many regrettable cases the effect is bankruptcy, involving other useful organizations, so that the employment of labor is still further diminished, with consequences in individual tragedy which cannot be measured.
Unfortunately the only extra labor called for, during such a period, is that of multitudinous Government officials, Treasury Department sleuths, so called tax-experts, attorneys, receivers and other carrion-hawks of commerce who fatten in proportion to the fatalities. It is not their fault, but the havoc has been so great that the unpleasant task of administering the coup de grace to the wounded and of clearing up the remains must be attended to by some one.
(d) Alternate “inflation” and “deflation.” This is often accentuated by the “adjustment” of interest rates, which is to some extent instigated or sanctioned officially,[1] and is a cruel buffeting, first from one side and then from the other, of the economically insecure, with the result that they are crowded into dependency without ever quite realizing how it was done. What we all see is that if there are two parties to an extended contract during such a period, one of them must suffer disastrously, because he has agreed to give goods for dollars on the way up, or dollars for goods on the way down. When the immediate pressure is over, the victim of the buffeting finds his watch gone and his pockets inside out. He has been “frisked,” but not by his neighbor who may have suffered equally in another direction, or by some prowling criminal. The damage must be laid to circumstances beyond our control. However, they are only beyond our control because we have made no attempt to control them.[2] And no control can be effective till we have a scientific unit of value.
- ↑ Compare the policy of the Treasury Department cited in footnote on page 228 with the subsequent policy of the Federal Reserve Board. “There was nothing ‘hesitant’ in the policy of the board at this time—Rates were advanced as follows in January, 1920—Liberty Bond rate from 43⁄4 per cent at ten banks and 5 per cent at two banks to 51⁄2 per cent at all banks. Such marked advances of rate do not betray ‘hesitation’; they evidence conviction.”—“Federal Reserve Policy,” A. C. Miller, Federal Reserve Board, Washington, D. C. American Economic Review, Vol. XI, No. 2, June, 1921.
- ↑ “We need, for instance, a science of the money market and of commercial fluctuations, which shall inquire why the world is all activity for a few years and then all inactivity; why, in short, there are such tides in the affairs of men.”—W. S. Jevons (“The Future of Political Economy”), “Principles of Economics,” page 206. Macmillan and Co., London, 1915.
What we need is not a science of the money market but a scientific money.
