A 'STABLIZED DOLLAR' WOULD PRODUCE VIOLENT CHANGES IN PERIODS OF FALLING PRICES.

The new book, "Stabilizing the Dollar," brings under one cover much of the material the author has presented in numerous papers and develops the argument for his plan in such persuasive form that the reader can hardly escape regretting his inability to be converted. The writer desires to call attention briefly to the phase indicated in the title of this paper, i.e., the probability that if the author's plan were in operation the periods when prices are falling would be marked by sharp drops in money values that would be disastrous to many lines of business and would increase the distress that goes along with depressions in the recurring business cycles. Business mortality would rise, failures multiply and opportunities for mitigating disaster by spreading the losses over the community would lessen. The level might not rise as high as in the case of unstabilized prices, hence the distance of the fall might be shorter but the descent would be more abrupt, less subject to control. The process of credit inflation in connection with war finance has been made familiar in discussions too many to mention. The government received credit on the books of the banks in exchange for certificates of indebtedness.