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i e^S TEL. • PE (N. Y ) RE 5-9200 16O6 WALNUT STREET 2-8300 PHILADELPHIA 3. PA. 2.5.51. De ,r S i r , I'm home sick'and please excuse my typing. Since we are faced with the evil of i n f l a t i o n a r y psychology, why could we not fight i t with DEFLATIONARY pshchology? Why could we not reduce t a r i f f s say 5/o per month. This is mildly deflationary and not suddenly harmful, i f at a l l . There are dozens of other wqys of deflating, bureaus could be cut right and l e f t , ana cannot people i n government cut and talk about more cutting. On September 14th 1928 I wrote to a half dozen economists to say that the crash was i n the makingo A l l told me I was wrong. Moody said that a "defaulted foreign bond would be as rare as a white robins egg"• I r v i n g Fisher said that realty was only inflated " i n a few urban areas". We then had i n f l a t i o n ( o f securities) for a year and four days, and then the security crash followed by the busbusiness crash. Can we not expect now c i n f l a t i o n followed by a deflation. Everyone really expects t h i s , but thinks(in Wall>5t especially), that i t can't happen now* Eut i f we taik about the inevitable i t sometimes hastens events, and i n this case the i n f l a t i o n might be leveled o f f . Might i t not? I'm a stock broker, and manage trusts largely, and that is a beautiful nightmare, but things are not helped by the Washington talk about more and more committees. I t s rather dreadful to ask a great s a i l o r , on of the greatest, such a3 Admiral Mimitz, i t s awful to ask him to aay and define the encroahments of government on the rights of the English speaking i n d i v i d u a l , and due process of law. I s n ' t i t clear, abundantly clear (as Mr Tugwell would say) that the area of free action i s gradually disappearing, but, or rather "and" with a painful regularity? I t seems to me that i f the dreamers talk about bigger government, i t s up to sane people to talk aDout "smaller" government. And i f people like Mr Keyserling talk about prosperity, i s n ' t i t just to talk abotet the consequences of this a r t i f i c i a l boom, t h i s synthetic prosperity and consequent deflation, or worthless money. I naturally assume that our currency w i l l be devalued, but from my reading I'm convinced that devaluation w i l l not be enough to set things r i g h t , when once the confidence i n government sincerity and securities has gone. And can i t help going? This adds up to the thesis that i f we talk of the glaringly obvious results of t h i s i n f l a t i o n a r y nonsense, i f we talk about the nonsense, w i l l we not lessen i t ? I fear that i f Mr Truman had been through the German i n f l a t i o n , he would s t i l l be sure that i t could not happen here, and certainly not i n Missouri. Yet he must know that i t s no fun to get a good kick from a mule, and when phony money gets strong i t can kick like a mule. Yours sincerely, Alfred-Middle. Hon. Marriner Eccles. W JHVJiOtH loi^Ro ^ x x x s vn© raer T an JfrK-KYUe) iOCfifAJtt IHT iO
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