American Affairs, Vol X, No 2, 1948
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Amencan A Quarterly Journal of Free Opinion APRIL, 1948 Spring Number VOL. X, No. 2 Principal Contents Comment Editor 65 Uncle Sam in the Wheat Pit Editorial Correspondence 68 Winds of Opinion 70 A Federal Plan for Education Washington Correspondence 72 The Great Educational Hoax The Very Rev. Robert I. Gannon, S.J. 77 The Rule of Planned Money Garet Garrett 79 A Dollar Is a Dollar Is a Dollar Letters 88 Why We Can't Afford Deflation Allan Sproul 89 Comes Next the Capital Levy 91 The International Bill of Rights Digest and Review 93 The Virginia Idea Governor William M. Tuck 96 England's Thought of Bankruptcy London Correspondence 98 Mr. Churchill's Footprints Noted by Himself 101 Review G. G. 103 Private Enterprise in the Official Dog House They Neglected Their Tools How To Foment Minority Passions What To Do With Communists Donald R. Richberg 109 What of a Stalin Plan? Freda Utley 111 Thirty Years of Frustration. Senator Homer E. Gapdwat 115 A Germany To Live With Walter Liechtenstein 116 Money Takes Its Revenge Joseph M. Dodge 123 SUPPLEMENT Federal Thought Control A Study in Government by Propaganda BY FOREST A. HARNESS An American Affairs Pamphlet By the Year $2.50 Single Copies 75 Cents Notes on the Contents A Federal Plan for Education. This is a critical analysis of the Report of the President's Commission on Higher Education. The meaning of it, which is strange to the American tradition, was not to be found in the newspaper reports. Money. In the field of monetary phenomena there now is a world-wide sense of foreboding, and that is why there is so much about money in this number of American Affairs. There is first an article entitled "The Rule of Planned Money." It is followed by a statement of the fundamental argument for the return to a free gold standard, by Professor Walter E. Spahr, who is the most brilliant writer on that side. "Why We Can't Afford Deflation" is from a speech on what moves the United States Treasury to support the price of government bonds, by Allan Sproul, president of the Federal Reserve Bank of New York. "A Dollar Is a Dollar Is a Dollar" is an amusing exchange of letters between the Treasury and a Cleve- land citizen who only wanted to know what lawful money means. "Money Takes Its Revenge" is a series of excerpts from the speeches of Joseph M. Dodge, president of the American Bankers Association, who has been going about the country with an evangel of sound banking, telling bankers what they may expect if they don't step on the brakes. What of a Stalin Plan? Freda Utley is a world person, widely known for her lectures and writing on current history. Her journalistic experience began in Japan in 1928 as correspondent of the Man- chester Guardian Commercial. Then she did research work at the Institute of World Economy and Politics, Academy of Sciences, Moscow; that is where she learned about Russia. After that she spent several years in China as correspondent of the London News Chronicle and representative of the Reader's Digest. She is a member of the Advisory Council of the Department of Politics, Princeton. A Germany To Live With. Walter Liechtenstein, formerly vice president of the First National Bank of Chicago, spent a miserable time in Germany trying to put the wheels back into the ruined financial mechanism. He returned only a few weeks ago. American Affairs is a quarterly journal of thought and opinion. In that character it is obliged to touch many subjects that by nature are contro- versial. Its pages are intentionally open to views and ideas that provoke debate. By printing them the National Industrial Conference Board does not endorse them; it undertakes only to acknowledge the integrity of the contributors and the good faith of their work. Published Quarterly by National Industrial Conference Board, Inc. Editorial Office, U7 Park Avenue, New York 17, N, Y, Cable address, MCBOARD, New York. Subscriptions, $2.50 per year postpaid. Single copies 76 cents. Multiple subscriptions available to Associates of the National Industrial Conference Board for mailing to more than 26 separate addresses, $1,50 per year. Copyright. 1947, NATIONAL INDUSTRIAL CONFERENCE BOARD, INC. A merican Affaiairs GARET GARRETT, Editor APRIL, 1948 Published Quarterly VOL. X, No. her mind on the grocery bill and knowing the cost of Comment a sack of potatoes, she was cynical. She got that way By the Editor from reading on the front page of the newspaper that the President said it was her job to kill the dragon and she could do it if she really tried, and HE terrible dragon had made all consumables then obscurely, in another column of the same Tscarce and was beginning to eat up the durables. paper, that the government had spent $45 million To slay him was imperative public business. The this year to keep the price of potatoes up. After all, name of the dragon was inflation. He heard what this dragon devours only things, and so long as everybody was saying about him and he was not in people can afford to feed him he will keep the ogre the least scared. In fact, he was amused, because the away. The ogre is deflation and is supposed to only thing that could kill him was a word that devour people. A rise of a dollar a bushel in the nobody could utter. The word was deflation. One price of wheat added a penny to the cost of a loaf day the dragon was seized with a violent fit from of bread, and everybody complained of that; but a gorging himself on cereal dessert and lay on his back fall of fifty cents in the price of wheat, which can- with all his feet sticking up in the air. Then did the celed only half the rise, was a premonition of eco- people attack him? No. And a strange thing hap- nomic disaster. Likewise, if one half of the rise that pened. The Washington seers, bankers, merchants, has taken place in prices generally in the last two industrialists, editors and farmers all joined hands years—one half of it only—were canceled, Amer- in a ring and went around and around the dragon ican industry would be in the red. Inflation trans- intoning the formula: "He is sick but he will not fers buying power from those who save to those who die." Then the economists, official and private, held spend; deflation transfers it back again. The moral an inquest on the wreck of three-dollar wheat, and is anything you can make of it. The dragon, at any solemnly announced: "This is not it." By it they rate, has a sense of humor. meant the beginning of deflation. Nobody wanted deflation. That was what the dragon knew. Least of all did the government want deflation. In Chicago the Secretary of the Treasury said: E have now of our own a governmental de- "We estimate that peak production and employ- Wvice comparable to the British White Paper ment, together with substantial price inflation, will by which oncoming policies cast their shadows combine to keep the government's receipts at these afar. It is the Report of the President's Commission. high levels. The cold facts are that present economic The Commission is summoned by presidential com- conditions, budgetary considerations, inflationary pressures and debt management problems are such mand, performs its task and dissolves. Its task is to that we cannot deliberately allow revenues to drop cause a light to fall in a certain way on a subject below present levels at this time." as to which people have not yet made up their minds or one about which popular thinking needs to So the government was actually counting on infla- be conditioned. Generally the papers are very well tion. That leaves only the housewife. The govern- written. The eminent persons who sign them do not ment had been exhorting her to fight the dragon always write them, in fact almost never. Experts are with the rolling pin. But the housewife, even as the hired to do that. The finished work is presented to dragon said, did not want deflation either, because the distinguished members of the Commission, who it might put the old man on the porch with no job read it with vicarious pride of authorship, take here at all, and in that case how would she be any better and there a minor exception which may be recorded off with butter at fifty cents than with butter at a in a footnote, and then embellish it with their dollar? What she wanted was cheaper groceries— names. Thus it becomes standard propaganda for that is to say, a decline in the cost of living, with the duration of the campaign. The President sends the old man at work at high wages. Moreover, with it to Congress with a message asking that its prin- 66 AMERICAN AFFAIRS ciples be embodied in legislation and the public the dream to unravel its latent content. The panic printer produces a quantity of it as an official docu- was not deeply enough felt, as it may be in dreams ment for wide circulation. Anybody may print it. with emotions of grief, and this could mean only The one entitled "To Secure These Rights," by the that there were concealed consolations. Evidently in President's Commission on Civil Rights, reviewed this dream the loss of the United States was not an in the Winter number of American Affairs, was absolute calamity.