xt7wwp9t2q46_74 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/mets.xml https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61.dao.xml American Liberty League 37 linear feet archival material English University of Kentucky This digital resource may be freely searched and displayed.  Permission must be received for subsequent distribution in print or electronically.  Physical rights are retained by the owning repository.  Copyright is retained in accordance with U. S. copyright laws.  For information about permissions to reproduce or publish, contact the Special Collections Research Center. Jouett Shouse Collection (American Liberty League Pamphlets), No. 77 "Inflation Is Bad Business" Radio Address by Neil Carothers, Director, College of Business Administration in Lehigh University, November, 1935 text No. 77 "Inflation Is Bad Business" Radio Address by Neil Carothers, Director, College of Business Administration in Lehigh University, November, 1935 2013 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61/59m61_77/Am_Lib_Leag_77_001/Am_Lib_Leag_77_001.pdf section false xt7wwp9t2q46_74 xt7wwp9t2q46  /
PAMPHLETS AVAH.ABLE
*
Copies of the following pamphlets and other
League literature may be obtained upon application
to the League’s national headquarters:
Statement of Principles and Purposes
American Liberty League—Its Platform I N F L   I ° N
An Analysis of the President’s Budget Message ·
Economic Security
nilation
The Thirty Hour Week Bill      
The Holding Company Bill -
Price Control
The Labor Relations Bill
The Farmers’ Home Bill
The TVA Amendments
The Supreme Court and the New Deal · *
The Revised AAA Amendments
The President’s Tax Program
Expanding Bureaucracy
Lawmaking by Executive Order
New Deal Laws in Federal Courts ~
Potato Control
Consumers and the AAA B¤di¤ Addféss bY
Budget Prospects
Dangerous Experiememaeen NEIL CABUTHERS
Economic Planning——Mistaken But Not New . . .
The National Labor Relations ACt_Summary Director. College oi Business Administration
of Conclusions from report of the National in Lehigh University.
St;.;zVi:y\e&i]ig.`1pn21_n;lzlttee Member of the Executive Committee
Irilgw X: Meet tha Issueig-Speech by W. E. Borah Economists' National Committee on Monetary Policy.
e merican ar- e Trustee of American . . .
InstitutiOnS_SpeeCh by Albert C. Ritchie and Member National Advisory Council oi the
Falgan Sociaiism din the New Deal—Speech by · American Liberty League
emarest oy
The People’s Money—Speech by Dr. W. E. Spahr ~
Legislation—By Coercion or Constitution--
Speech by Jouett Shouse
Recovery by Statute-——Speech by Dr. Neil ·
Carothers gmc
The Imperilment of Democracy—Speech by  44,
Fitzgerald Hall  
The Test of Citizenship——Speech by Dean Carl l-   u
W. Ackerman Q   q
Today’s Lessons for Tomorrow——Speech by QP M   VP
Captain William H. Stayton ’°Y LP
"Breathing Spells"——-Speech by Jouett Shouse
The Duty of the Lawyer in the Present Crisis-
Speech by James M. Beck
The Constitution and the Supreme Court—
Speech by Borden Burr · e
The Economic Necessity in the Southern States ·
for a Return to the Constitution—Speech by AMERICAN LIBERTY LEAGUE
Forney Johnston .
Our Growing National Debt and Inilation-—— National Headquarters
Speech by Dr. E. W. Kemmerer _ _
* National Press Buildmg
AMERICAN LIBERTY LEAGUE W°Shingi°¤' D' C'
National Press Building
Washington. D. C.
L Document No. 77
November, 1935

 of the New Deal legislation they warmly
approve. Some of it they know to be
unsound and injurious.
INFLATION IS BAD BUSINESS s_ The organization I represent, the Econo-
mists National Committee on Monetary
FQR a Vtty {tw niinntts I am going to Policy, 1S as group of economists interested
talk to you in very serious fashion about .. °SPcO1’·HY _m money and Credit policies
some very serious matters. But first let WnO ersanized inte 3 group in 1933 to tell
me tell you whom I represent. I represent the PeOP1e the itfuth about currency
a small organization of about ninety men, q]~‘e$¤On$· _TneY are not paid for this. They
Scattered Widely ovti. the Whole country give of their time and effort without return.
but belonging to just one profession. This TheY are net Pe1°$01”1allY interested in the
organization is tht Economists, National measures they discuss. Remember that fact
Committee on Monetary Policy. when when you hear criticism of the economists
you hear that your speaker is an economist bY _$Ome ¤fnee·h¤lde1‘ trying to defend his
you Wil] ctttainiy {tt] a dtnnitt reaction POl1C1€S. These economists are non—partisan.
of some sort. Some of you will immedi- TneY are P1'ee€Y well divided between
ately lose interest and turn the dial to find RePnbneen$ and Democrats, but they put
something more exciting or entertaining. the Welfare Of the eOnnt1‘Y above P¤1'tY
Some of you will prepare yourselves to hear ?He81¤nee· And they are not afraid of any
a lot of long words devoted to vague and lnteresn organization, or party in the
impractical theorizing. Some of you will United States-
be ready to resent anything I say because
You disapprove out Present goVei.nment»s And finally, they do not believe they know
policies and believe that the economists are evcrytnmg ebOnt eeenemics. The more men
responsible for these policies. Others of know ?bOnt eeeaemie f01‘€eS the less they
You, on the other hands will be hostile are 1ncl1ned to think they know everything.
because you approve our governmental poli- If YOU Went te end e men Wh0 has the exact
cies and believe that the economists bitterly answer tO_ OVe1'Y eeenemie question don’t go
oppose su these policies And eu of you . to the trained and informed economists. Go
are mistaken on these points, even those to wine man whe has f1eVe1‘ Studied
who turn the dial to another station. €°OnOn“OS> Seme man Wh0 d0eS not know
_ _ _ anything about economic history, some
_ For there 1S nothing of more pfaetleel ~ politician who has spent his life running for
importance t0 YOU flghe HQW than eefteln ofnce, some visionary reformer with a
econom1c_quest1onS. There 1§ nothing veggie patent economic cure—all, some special
or theoretical or unpractieal in out e¢01‘10I§11e » interest representative with an axe to grind.
discussion here. Nor are the economists
responsible for the legislative experiments But the economists do know a lot about
enacted in the past three years by our money and credit and finance, which are
Federal government, although there has among the most delicate, complex and
been propaganda to make the people think tangled things in the whole Held of
they are. On the other hand, the econo- economics. And here is what they will tell
mists are not as a group opposed to all the you about our money and credit situation.
policies of the present administration. Some First, they will tell you that the money and
2 3

 credit policies of the United States since situation. In a recent broadcast Professor
1932 have been in large measure unneces- E. W. Kemmerer has explained better than
sary and unsound. Secondly, they will tell I can just how government spending is
you that these money and credit measures creating this unwholesome credit situation.
have been 1n part class legislation, taking It boils down to very simple facts. Our
V fron; one c1?s· iii our Tcleugfry alnd giving ta   Federal Government is spending money at
anot er, un air y. 1r y, t ey w te the rate of more than 7000 millions of
you lghatdthege neeasuges have ug large degree   dollars a year, but it is getting in revenues
wea ene t e oun ations o our who e not much more than half that. The rest it
currency and credit system. They will tell is borrowing, just as a man living beyond
you that the repudiation of the gold clause his income may borrow for a while to keep
in our bonds was unnecessary, that the up with the Joneses. Our government is,
commandeering of all- gold in private hands roughly, spending $230 for every second
was plain confiscation, _ that the gold- of every minute of every hour of every day
purchase program was a ridiculous juggling and every night. It has been doing this
act, and that the devaluation of the- gold for two years. But it is taking in less than
dollar to S9 cents was a grievous mistake $130 per second. It is borrowing at the
that has retarded recovery. rate of $100 a second. The government will
, , , s end about $207 000 while I am talkin to
But all th1s·1s past history. We are con- Yau these few mim1teS_ g
cerned here with the present and the future.
I Wh€f€ 31‘€ W€ HGW? At the P}‘Q$€¤€ '€1m¢ The government is borrowing these
z we {ace two very unhappyegonliimons- (ang incredible sums chiefly from the banks. This
is r o money situation- o ave roao o automatically results in a swollen and
a stage where we do not have any reC0gn1Z- morbid condition of bank reserves and bank
i able m0¤€Y $Y$€€m Whatever- We do hot credit. The combination of an uncertain
V h1Q0W What 0m' m0h€Y §Y$t€m 18 0i' Whore currency system and a bloated credit con-
it is 801¤8· We are 0h an 1¤`€d€€m¤hl€ P¤l{€Y dition is as explosive as dynamite. It may
m0¤€Y basis- The P3P€I` m0¤€Y 18 3 mis- explode in a national inflation.
cellaneous lot of bank and government
promises to pay. But the man who has Some very able men believe that a vast
‘ one of these notes cannot redeem it. There inflation is now unavoidable, that we are
is a huge pile of gold and silver lying dead caught in the current and bound to go over
in the government vaults. The gold dollar the dam. Speaking here for myself alone,
is cut dozvn tc;1 53 centsh but ycglu cannit get I I do not believe it. I do not yet believe that
one of t ese o ars an you o not now we are doomed to any disastrous inflation.
when the S 9 cent dollar may be cut down   But we are moving in that direction. Let’s
again. The silver in the vaults 1S a great ~ consider here in plain talk just what infla-
mass of useless metal, of shifting value and tion means.
uncertain legal standing. We have no stand- _
ard money. And the volume of paper The first consequence of inflation is a rapid
money is constantly increased by the issue and feverish r1se·of prices, in stocks, m raw
of new notes. materials, in retail goods. This rise of prices
is always far ahead of the wages and salaries
The other condition is equally serious. of the great mass of the people. The im-
We have a swollen and abnormal credit mediate result is a rising cost of living. This
4 5

 is a practical thing. There is no theory investment in business, which always end in
about it. It falls most heavily on the wage- later collapse.
earner, the small salaried man, the man or Th. . . h b .
woman on a small income. It means that r 13 IS not eceinimli. t tert gf gem;
the children of the poor have a little less to ecb eelanlgnsteeee . Y molly en fe S rel
eat, that houses are a little colder in the eimiee h tire 1S ne ‘m§°fe3“;.“ee*°§ eg ne
erfttter tftet fatfter feet ret eet a ttetr ?.Z’..§ ilijaof ee;;:..$::...;;:;...:a1;ga
Ovcfcoee the important countries of Europe after the
As inflation progresses it eats into savings Wofld Wei`- But ft Wes an old $fofY_1n bfS‘
accounts. Even a small inflation will take tary long befare that- Gevrge W/a§nfn8fon»
away all the interest on savings and then who Wes e Heb men> end_fnS Soldlefsa wha
cut pieces off the account itself, faster than Wef e Poof men> suffered anne from t¤flatt<>¤
the owner. can add to in AS ie moves one even before there wasa United States. Time
inneeion eeduees the Veiue of all fixed after time the countries of ·Latin America
incomes, from bonds, building and loan have been Soonfged bY Inflation-
shares, preferred stock, and life insurance Throughout history inrietion hes been
policies. Slowly but surely it eats away the Practically always e misery growing out of
living of the widow and orphan, takes boys the emergency of wer, as in the United
0Ut of $¢h001 and Couegfb _$end$ old PeoPle States in Civil War times. Very rarely has
out t0 hunt Work of onen`1fY» and _de$ff'oYS a nation deliberately adopted an inflation
the life—long accumulations of thrifty. and policy in tirne of neeee_ There were two
h31‘d·W01`ki¤8 P€oP1e· It de$ff`oY$ nn1Vef‘ notable exceptions to this rule in France a
sities and hospitals, charities and pension long tiine ego, onee when e hieekguerd
SYSt€m$» Wills and inheritaneea l adventurer named John Law drove the
In the n 1 t f . . n . French people to erum with an inflation
. , aa S egee O e mmeue Ile atterr e scheme, and again in the French revolution
neelen S eeede le .deeemYed’ lee mdueemee when the nation deliberately adopted infla-
Peeelyzeelr lee eaertaf eeeen °ue‘ A mer- tion with the notion that it would stimulate
chant will sell all his goods at a handsome business The French ee le ennee the
Prefft Week after Weefe ertfr te fad ftfrataeff memory of the mm resifonfible for time
bankrupt at the end. A workman will labor dieeseeee
all week and find on Saturday that his wages `
have been going down every day. There is It is almost unbelievable that in this
g Popular ngtign that inflgtign hurts the . €I1llgl’1IZ€1‘1€d 3.g€ tl‘1€ UHlt€d States should
rich but not the poor. Inflation hurts start on this primrose path to destruction.
_ everybody, rich and poor. But it falls most But, deliberately or not, we have started on
heavily on the wage-earner, on the little . this very road. We show no signs of return-
fellow. In Germany inflation drove the ing sanity at present, and in the next session
plain people to black bread and paper of Congress there will be a renewed pressure
clothes, but it also destroyed the prosperous from misguided planners and scheming poli-
classes. No class can escape, unless it be a ticians to force still greater inflationary
very small class of manipulators and gam- spending and still more currency debase-
blers. There is another idea that inflation ment. In my judgment there is still time
promotes prosperity in business. What it to stop this financial dance of death. But
promotes is speculation, waste, and reckless it must be stopped very soon.
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