THE PENALTY OF INFLATION.

Ellesmere Guardian, Volume LIII, Issue 12, 12 February 1932, Page 4

THE PENALTY OF INFLATION.

I "A large part, if not the whole, of our present depression is due, not to any general trend at all, but to the tfact that a period of ridiculous expansion and inflation must obviously be followed either by repudiation, complete or partial—as in Germany, France, Italy, Belgium—or else by, a period of deflation before the general normal curve can be again reached," writes Dr. Robert A. Millikan in the Atlantic Monthly. "To take just one simple but typical case: If, because of boom conditions, induced no matter how, lowa land goes up to 400 dollars an acre when long and worldwide experience shows that it cannot produce enough staple agricultural crops to pay the interest on more than 200 dollars an acre, then there is no possible way of getting back to normal without carrying through insolvency the lowa farmer who has borrowed on a 400-dollar valuation, and with him the lowa banks that have loaned on that 400-dpllar valuation. We are simply paying the penalty of such inflation now, and the consoling thing about it is that there is a normal curve which we must presently reach no matter how much our elated or our depressed psychology may have carried us above or below it."