The Wilmington morning star., 1944-05-04
BOX
To The Editor:

April 70, OF your excellent 49, W.
! was particularly taken" bv p S,
"Bit' entitled 'It's Deflation my ne
Certainly your choice of s,s
Ject matter to editorialize was
timely one. Certain it is, also ~.
imitation and its inevitable resuI.
deflation, are among the more ;rO
portant problems facing US now an an,
confronting us in the future N''a
However, I respectfully reo,s,.
that you permit me to look asSss
at certain observations made s" ",
the above mentioned portion =,
your editorial page. Perhans -
would be fairer to state that WIN.
I am going to gay is intended merss
ly to elucidate and clarity seyer.,
points raised in your article
Quoting your piece" We are now
told that price controls are an a.,
sential means of preventing detls.
ton. OF course, your purpos.
in making this statement was ~
bring into focus the fact that fl.
O. P. A. proposed to utilize III.
same tool (price controls) to com
bat both the initiation and deflation
evil, with resulting confusion to III,
general public. This confusion !,
not necessary. Let US see wbv
I agree with you that inflatio,
and deflation Cat least their oh.
vlous symptoms-high versus low
prices)-ar epoles apart; yet thew
are closely connected in that III.
one, deflation, is the inevitable out.
growth Of initiation regardless a. IL
what degree that deflation MAN.
tests itself.
Now let us return to the fourth
paragraph OF this letter and elimi
nate any confusion as to how pic,
controls can be applied to conbai
deflation as we'll as initiation. II is
quite easy, by contrasting two din.
: ferent conditions, to show how
price controls can also combat d..
flation.
First: Let us disregard any pric.
control measures in existence. In
the absence of such controls, then
prices would be adjusted by SUD.
ply on one hand, demand on III.
other. Under present war time con.
ditions, with greatly depleted con.
sumner supplies available and with
a huge purchasing power (demand)
in the hands of the buying public,
prices would skyrocket to dizzo
, heights in the absence Of controls
!. Alas and alack, however,when the
= initiation period has passed the
. drop in prices (deflation) will be
very great with its consequen.
g loses to the general business
scene.
> Second: Lets see how the pic,
y ture will be under the present set.
= up - under price control. Prices
). have not increased as much a,
they would have had there been no
price controls. However, and
underscore this please, there will
/, be a great drop in prices (detla.
q tom following the end Of the pres.
: ent restricted initiation" if you
will excuse the term. But the i'm.
portant point it the defation will
!. not be Every great. In short, the
II Relative degree of deflation, Tor
= drop in prices) will be less under
y price control measures than it
would be unde-- An absence Of
e price control.
e Present price control measures
Il will not eliminate deflation-these
% measures will lessen the distance
to which prices will drop. Meta.
i phorically speaking, instead Of
20 dropping from the tenth floor to
n the basement prices will drop from
It thu tenth floor to only the second
% or third floor. The foregoing should
7, clear up the confusion mentioned
1t earlier in this letter.
Finally I do wish to ''bicker"
e. with you over your Interpretation
e of and Importance attached to the
=. business cycle. A ga n partially
n quoting your editorial directly
'Ihe medium by which free enter
k prise has performed its miracles
d the business cycle-must be ellml'
nat4d". This quotation, or even, Tor
that matter, the entire sentence
from which it was taken, states
y the belief that it is the business
cycle itself which causes fes en-
terprise to be great.
fear, that you have the cart
before the horse! The wonders and
y miracles OF free enterprise are MOI
"a Instrumental by the business cycle
" Rather the business cycle is the
a; mysterious and intriguing offspring
~ of the system Of free enterprls';,
~ Therefore, it is the fluctuations ana
~ changes inherent in the system 0,
=, free enterprise which has caused
" free enterprise to be the raedlu"
u for the business cycle. :,
~ Putting it another way, the feai
a worth of the system OF free enter
to Continued on Page Eight