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THE MONEY QUESTION 1913 :

I have charts here which illustrate the whole subject of the money uestion. The first is chart 1, which is the general price level from $10 on, and it is different from most of them, in that I have conected together the 1913 price level and the 1926 price level. (Charts to 12 inclusive.)

The meaning of price level is the average height of the prices of ommodities at wholesale. And the height is measured each week in pur United States by our Government operating through the statisical' bureau of the Department of Labor. The method is simple when enough of the details are stated, as is the form of statement in these hearings by Ethelbert Stewart, Commissioner of the Bureau of Labor Statistics, Department of Labor.

In the accompanying chart 1 is pictured to the eye the price level in our United States for 1910 to date. The reason why the height varies considerably is the refusal by the Government's commission, the Federal Reserve Board, to attempt to supply just enough paper currency and bank credit each day to keep the price level stable, and then the board has operated in behalf of the bankers, the creditor class, except each two years to raise the price level and help win the election until 1930 and then the deflation was continued.

The evidence is conclusive: the official index of the price level that is charted; also the statement by the board in its 1923 annual report, cited by Commissioner Adolph Č. Miller in his statement at the hearings on the Strong bill of 1926, which asked Congress to issue a mandate that the Federal Reserve Board must aim to stabilize the price level. (P. 634, 1926 hearings.)

Each of the other commissions that are assisting Congress are definitely instructed as to the policy which Congress desires to have applied, while the commission which gages the daily supply of the people's medium of exchange is left free to deflate terrifically in behalf of the creditor class, as has been done during the past 11 years of the Republican Government. (See chart 1.) The Wilson government, which framed the Federal reserve system, placed in its bill an instruction to the Government's commission to aim to maintain a stable price level, thus to benefit the producing groups and do justice to the bankers, the creditor class. But in the House, which first considered the bill, the stablilty clause was stricken out and I wrote a letter and asked to be heard for the retention of that clause, but no hearing of any kind of a public nature was permitted, and the Senate did not restore the stability clause, for a good reason I believe; the leading of the spirit, for the World War was at hand and a rising price level helps a Government to win a hard-fought war. But beginning in 1922 Congressman Goldsborough began introducing a bill to instruct for the stabilization of the price level; and he did so in the next Congress; and in the next Congress Mr. Strong introduced a bill asking Congress to instruct the Federal Reserve Board to aim to stabilize, but Commissioner Miller and the other members of the commission said that they preferred to do as they pleased, and they have pleased to deflate in behalf of the bankers and the other portion of the creditor class.

My duty, too, is to point out that the daily policy of the Government's commission, the Federal Reserve Board, is under the direct control of the President. He has on the board of eight members

CHART No. 2

Per Cent 150

PHYSICAL VOLUME OF INDUSTRIAL PRODUCTION

INDEX OF F.R. BOARD, 1923-25 - 100

T Adjusted for Seasonal Variation T Additions by THE RESEARCH INSTITUTE, George Shlbley, Director

Per Cent

130

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70

*5 PRORT L038 D PRODUOTI ON
Note that in 1929 the growing 400 rsanitation
ace an . result of the Talling Price Levol (chart 1): 70

d that the unusual length of time of the falling
Pro. Levol oounts for the unusual Di.organisation
for the rodu oine oronap., and the unusual hanem is to
hodreditor olan..

so

1931

1926

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120

CHART No. 5 Bank Clearings Index Declines to New Low BRADSTREET WEEKLY, March 19, 1932.

GROWING DEPRESSION AFTER
1929
1930

9 LEGISLATIVE MEASURES BY
THE ADMINISTRATION, ASSISTED
BY DEMOCRATS AND PROGRESSIVE
REPUBLICANS. BUT DEFEATED

BY DEFLATION BY THE GOVERNMENT'S
1928-30 Average COMMISSION, THE FEDERAL RESERVE

BOARD, see chart of
ACTUAL

FEDERAL RESERVE CREDIT. Date
of this chart March 19, 1932.
Research Institute
George Shibley,

Director

110

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R CENT.

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