xt7wwp9t2q46_48 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. 51 "The People's Money" Speech of Dr. Walter E. Spahr, Professor of Economics, New York University, July 10, 1935 text No. 51 "The People's Money" Speech of Dr. Walter E. Spahr, Professor of Economics, New York University, July 10, 1935 2013 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61/59m61_51/Am_Lib_Leag_51_001/Am_Lib_Leag_51_001.pdf section false xt7wwp9t2q46_48 xt7wwp9t2q46 _ Pamphlets Available * *
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Copies of the following pamphlets and l
other League literature may be obtained  
_ upon application to the League°s national E
p headquarters :   _
Statement ofbPrinciples andIPuI1;p0$es · M
Am rican Li erty eague—— ts at orm
An iinalysis of the President’s Budget Message  
Arxnlysis of the $-28%,000,000 Emergency Relief
ppropriation ct
Economic Security * * *
. The Bonus
Inflation
The Thiigy HourkWeel§ ll A ‘ Speech of
Th Pen ing Ban ing i
Th; Holding Company_Bill _ d 9,, DR' WALTER E' SPAHR
IEZLJZ;EI}°]§:,,‘l‘§§‘}J1E"};°.‘;;,B°‘"°°“ F"°“ S' "` Professor of Economics, New York
Where Are We Going?-Speech by James W. University, and Member of the
Priigdébvsggl N&ti0118l Advisory Council of
Yesterday, Today and Tomorrow the American Liberty
The Labor Relations Bill Lea u
How Inflation Affects the Average Family- g 6
Speech by Dr. Ray Bert Westerfield R in
The AAA Amendments I
P°g;;‘;;l B““k'“;“ip1;°;' by D" Waller E'   Round Table Discussion of
The B'tuminous oa i ‘ cc • ·
Reigimlznting the Farmers-Speech by Dr. G. W. I The C°IIS_III“II°II and The New D°aI”
y • • •
Exmféon of the NRA { Institute of Public Afizairs
Human Rights and the Constitution-Speech University 0fV1rg1n1a
by R. E. Desvernine I
The Farmers’ Home Bill ‘ July I0, 1935
The TVA Amendments
The New Deal, Its Unsound Theories and o
Irreconcilable Policies-Speech by Ralph M.
Shaw
Is the Constitution for Sale?-Speech by Capt.
William H. Stayton
How to Meet the Issue-Speech by William E. ERIC
Borah wb ;_—_} 44,
The Supreme Court and the New Deal Y  
The Duty of the Church to the Social Order- I,.   M
Speech by S. Wells Utley 3   Q
An Open Letter to the President-By Dr. Neil Q? I “" IL O
Carothers Ty LEP
The Revised AAA Amendments
The Return to Democracy-Speech by Iouett
Shouse ‘
The President’s Tax Program
The American Bar-The Trustee of American
F I)nstit1gionsFSpeechhby 1 u reyereei ef this Pi`ih‘
enterprise; and to the attempts of governments eipie ie oottoiu te tiii out thoughttui ond intoi‘
to meddle with the operation of those economic s iigont oitizons with it tooiing et gtovost oouooi`n
laws and principles which have matic possible ter the weifere et the peepie ef this notion-
the attainment of progressively higher stand- The thing noodod and dositod- hy thoughttui
ards of living by the people oi the most ad, people today is a sound business recovery, after
vanoed nations of the World_ which it is hoped the desired and necessary re-
forms would be worked out carefully and de- ¤
liberately so that their success may be assured, r
CONSIDERING the nature of the so-called re- ami $0 that tho ouSt0iutu`Y oVoiutiohtu`Y Pi'oo' ~
covery mcttctitcc of thc government at Washing- eeeee may het he repleeed hy the mere dau'
ton, it seems quite clear that the Administration gotous and ioss Yoiiohio i`oVoiutioiioi`Y (mos-
has failed to understand the fundamental causes Without i`oo0Voi'Y» desirable referms ooh ¤oVo1`
of the business collapse in this country, and that ~ he effective; tho1’oi01‘o» i`oo0Voi`Y must he tho
it has been almost totally blind as to the nature hret and tuhtiamohtoi o0¤Sitioi‘¤ti0¤·
of the methods by which a country recovers t
from a depression. Symptoms have been mis- <
taken for causes, and, for this reason as well as THE Position of the m°uoY ti¤koi’oi`$ with i`o·
U for others, the forces which normally generate Sheet te tho doPi°ossion und i`oooVoi`Y ie moto
recovery have been and are being hampered, or oasiiY undotstood ih the souso that the mouoY
subjugated, or destroyed by those agents which nioddiots ttPPotu` ih oVoi`Y doPi`ossion• Indoodt
appear to be working toward a political, eeo. every severe business recession brings them out
nomic, and Social revolution. just as gophers are brought out of their holes by
The fact that the major features of the eco- tt nood-
nower arc, to a large degrees based upon the tutored in monetary affairs to link their distress
capitalization of discontent and human suffering iiiogioniiY with the oui`i`onoY suPPiY· The feet
has created a most unusual state of affairs in thet they here loss monoY during tho doPi'osoiou
this country. All thoughtful people know that and had moto ih times et Pi`osPoi`itY ioods mehy
there is an unprecedented amount of misery and te tho oonoiusion that soniothing must he wrong
3 9

 with the monetary system. They fail to realize posed of radicals, or money tinkerers, or both,
that the supply of currency is small because a series of wild-money bills were drafted, passed,
business is stagnant, and that the supply ex- and signed by the President. The inflationists,
pands when business expands. They forget that (_ devaluationists, and silverites have all had their
the supply of currency, unless it be inflated, is, . J fling, and the President has signed every bill
in the main, a thermometer of business activity. ‘ passed by them except the Patman bonus bill.
People are rational enough when they consult   But they are not yet satised. From one end of
their thermometers regarding the temperature. the country to the other the money tinkerers
They know the mercury is low because it is are still busy. Monetary demagoguery has been q
cold; they do not suppose that the low mercury and is in full flower. ~
caused the cold. They become quite irrational,
however, when the monetary mercury is low and I j
assume that it caused the depression. They also T SHOULD be an arresting fact that not one L
assume that recovery can be generated if they of these demagogic leaders is ever a well trained j
increase artificially the currency supply. It person in monetary affairs. Demagogues inva- ;
would be just as rational to expect the tempera- riably spring from dark corners. They are in-
ture to rise when a match is held under the variabl what has been a tl called “rabble
mercury bulb. This might wreck the ther- rousersl; Although blind rleggrding the mone-
mometer, but it certainly could not increase the tary matters, they nevertheless presume to lead
temperature. Applying the inflationary match the blind. They strut and fume and inflame.
to the money thermometer might wreck the They stir up class hatred. They promise the
thermometer, but it certainly would not gen- unattainable. They become drunk with their
erate a sound business recovery. own words and emotions. They imagine great Y
The consequence of this confusion is that powers are in their grasp. They see a great fol-
multitudes lose their perspective as to causes of lowing and begin to believe that some unseen i
their trouble and fail to see the rational road power has selected them to lead the people to
to recovery. salvation. They whip themselves and their fol- *
But this depression differs from preceding lowers into a frenzy of emotion. Ignorance,
ones not only in the fact that it is the most ambition, hope, a crusading zeal for reform,
severe ever experienced by the people of this l egotism, spite, hate, quackery, and hypocrisy all
country but also in the fact that it has been l combine to give these depression outbursts for
characterized by the most determined and suc- . monetary tinkering the tone and characteristics »
cessful effort to tinker with our currency ever of which all thoughtful people are aware.
observed in our history. This is doubtless due In time these radical movements die down;
to the fact that never before has a Federal Ad- their leaders burn themselves out, and their fal- j
ministration aided and abetted currency tinker- lacies, follies, and foolishness are exposed. The
ing as a means of alleviating suffering in a de- return of prosperity invariably destroys such
pression and of fostering business recovery. The movements and their leaders. When people see
consequence of the attitude of the present gov- prosperity returning without the use of the
ernment has been that the money tinkerers, monetary schemes of these demagogues, they
from every corner of the nation, have converged lose faith and interest in both the schemers and
upon the White House. And there they have their schemes. With increased employment and
received a genial reception. They have been income, people find themselves too busy and
made official advisers on monetary matters. With too comfortable to bother further with fantastic
an overwhelming majority of Congress com- monetary panaceas. Thus, such movements die
» 10 11

 out. The solution, therefore, lies in doing every- they were publicly proclaiming it scarcity of
thing in our Power te aid reeoverY and to Pre' both. Such a distortion of facts characterizes
vent the adoption of wild-money schemes before the tactiqs cf the rncney tinkerers in every de.
reecvery een take Piaee·   pression, but at no time have the facts been
oheervins this unusuaiiY dangerous trend to' ignored or distorted more flagrantly than during
ward currency tinkering in this country, ninety- the present depression.
five of the leading monetary economists of this
nation formed, in November, 1933, the Econo- it
mists, Nationai Committee cn Mcnerery Pciiey ANOTHER of the most outstanding fallacies ,
fer the purpcee ci dcins everything pceeihie ic of the monetary tinkerere, in their efforts to
iniorm the ecuntry ee to the dangers cf these raise prices, is seen in their failure to appreciate
Wiid monetarY ProPosais» to Prevent their enact- the elementary truth that there are two kinds
ment inte iaw it Possihier and to suggest eon‘ of rising prices. One is sound, the other is un-
structive measures- This Committee Was net oniY sound. Each is characterized by different causal .
anxious to place its accumulated knowledge at i‘sctcrs’ by digerent human reactions, and by
the disPosai ef the eountrY hut it had hoPed that diiterent economic consequences. The causal
it might he ot reai Service to the government in factors differ in the fact that a sound rise in
times like these., The Administration, h0WeVe1‘» prices is caused by the increased activities of
has net Weiccmed its advice and recommenda‘ producers; the unsound rise in prices is caused
tions, and has ignored it en PraetieaiiY every by currency inflation. The reactions of people
mejcr Point reiating tc mcnetery questions- in' differ in the fact that a sound rise in prices gen-
stead ot Proiiting hY Such eXPert edvice. this crates widespread confidence because it rests
.AdIninlSt1`atiOn l'laS chosen to surround itself upon increased income growing out of increased
with mcnetery advisers ot en eXeeedingiY un" productive activity and increased employment;
crthcdcx s01't··in meet instances men cf nc the unsound rise in prices generates fear be- P
standing O1` I‘Cpl1tatiOn 01’ €XpB].’lCnCC WllatBVCl.' cause the currency supply is increased without
in tlflC   of InOn6t81`Y aHai1'S. ThE conse- there being any increase in Production, in ein.
quence has been an orgy of wild and fantastic ployment, in wages, or in income. The fear is
monetary legislation which has been the laugh- . of the devastating eifeets of s depreciating cnr.
ing stock of tl'1B liiadillg In0nCta1‘y al1tl'l01`itlCS rency_ The economic consequences differ in
cf the W01°id· the fact that a sound rise in prices can continue  
One cf the chief ccntenticne cf the monetary ¤· until rt state of general economic equilibrium is (
tinl£C1’61’S llaS been that tl1Zl.S natIt0n haS S11lT61’Bd reached between production and demand and a
l)CCa\1S6 of a SCaI‘Clty of CUITCHCY, and that   tl1C condition of widespread prosperity PreVai]s_
supply were increased by ecme artiiiciai means The unsound rise in prices, caused by currency
prices Wenid riee and a sound reccvery Wenid he inflation, never culminates in a state of economic
generated- This ccntenticn, snPPoi‘ted hy the equilibrium or in general prosperity. It always
iI1tlati0niStS, d€Vall1atlOIliStS, and Sil.V€1‘ZltCS, is ends in disaster, and this may assume any one
false. The currency expansionists confused the of three forms; (1) there will be e collapse
Cal1SC and CH6Ct 1‘Clati0I1Sl"lip l)CtW€Cn p1‘0(ll1Ctl.VC in prices   inflation is halted at any point;  
activity and prices cn the one hand and the there will be a general destruction of values and
currency supply cn the ether- They placed the inipoverisbrnent of the people if inflation is ear-
Caft b6f0I'C thC—h01‘SC.   ignored completely ried to the bitter end and the currency repu.
the statistical records as to the huge currency (hated as in Germany, for instance; and (3) in.
supply and exceeeive henk reeervee at the time flation rnuet be followed by devaluation ii rt
12 ig

 collapse or mpudiation is to be avoided, and, The arguments of the devaluationists have
c in this instance, the disasters and suffering are been dsmcsstistcd tc bc false in eVe1`Y imP0Y'
determined by the degree of devaluation. tant respect. There was no scarcity of gold as
The contentions of those who advocate an up the devaluationists insisted, and there is no
artificial rise in the price level by currency in- kscws or predictable relenensnip bctwccu a
flation are false on every major count. Outside gwen emeunt cf dsvsiuaticc and ns enieet en
Of War, human beings probably have never d€_ h the PPICB level. Devaluation was inexcusable
vised an instrument more destructive of human as e recevery device in tnis eennn`Y¤ and had
welfare than currency inflation. the governmentlnot led the public to expect it, K
Those who urge that the price level should be and had ferelgn exenenge retesv as e e°nSe‘
forced up to that of 1926 in order to equalize quence’ net bsccms adiustcd tc tnese eXPeete'
debt burdens can m arsh 31 no Sound arguments tions, devaluation would never have been neces-
in defense of their thesis. This is inflation, Serie
v although the advocates of such a scheme have
called it reflation in order to fool the uncritical T _ _
public. There are no sound arguments known HE cllvej egltetere have never been able tc
for forcing artificially a rise in the price level, cilcr enythmg but Specleue arguments in nenen:
regardless of purpose. And there is no valid of the1r schemes to do something for silver.
argument known for contending that we Should They have, nevertheless, been able to dilute our
return to the price level of 1926. After a country ccrrency euppjy wnn an lnefeesen amount cf
has passed through a depression, there is D0 silver which w1ll place an additional load on the
human being who has any Possible way Of knOw_ gold supply when the nat1on returns to a gold
ing when or at what level the next equilibrium Stancard' _ _
price level will be reached. Furthermore, the Tldc H of thc Bcnkmg B11] cf 193c’ eepeceed
debtor-creditor ar ument is unsound becaus by the HOuSc_thc Sc-ccllcc Ecclcc b111_in`
e c volves some of the same funda t l f ll '
debtors cannot be separated clearly from cred- . mcn c c cclcc
_ _ as to the relation between the currency supply
itors; because debtors can pay their debts more ,
_ _ _ _ and a sound recovery, and, for this reason
eas1ly only 1f they can obtain more income more n among Others has been Subject to Sevgm Criti-
easily, and this is something that inflation does " cism and coniicmnation by Outstanding money
not insure; because 1nflat1on 1mpover1shes the and banking authorities. p
mass of people; because the inflated currency g Finally, those who blame our monetary
dccs not climb imo thc Peekete cf We1`thY system for the depression forget that the depres-
debtors and avoid the unworthy creditors; and sion was no mspcctm. of monetary Systems. All
because debtors and creditors cannot be dealt types were carried down in the crash Most of
with in general with the expectation Of iIlSU1`il'1g the proposals for changing our currency system
justicc· Thc intcrcst cf justicc as bctwccn _ have provided either for a devaluated metallic
debtors and creditors can be served best, and monetary standard, or for an inflated paper
then only approximately, when individual standard, or for more silver in our currency.
debtors and creditors adjust their differences on Wherever such systems were found the depres-
some basis mutually satisfactory, considering sion carried them down; and none fell farther
the necessities of the moment, A generalized 1101* caused IIIOIC disaster than the inflated paper
device, such as currency inflation, can never in- m0¤€Y SYSt61l1S HOW S0 highly recommended by
Surg even approximate justice as between 1QhC 1I1H3.lZ1OI11SlZS. Neither tl11S depression I1OI` H
debtors and creditors. sound business recovery is a. IIIOI1Cta].°y phenom-
t 14 15

 611011 111 1116 861186 g61161‘aHY 8nPPosod bY tno appropriate that the proper way be pointed out
1110116Y 1116d11161’8· ; Summarized briefly, it is as follows;
T O o l 1 (1) Both the government and the people
HE currency tmkerers are a m1sgu1ded lot ’· 1111181 H666p1 the fact that the road to ye.
and have been on the wrong track. They have oovgryi P1`osPo1`11Y- 81111 $6116181 well-being is
done great damage and much more may be done to 6 Gund PY beth 1¤·11V1<1¤¤1S and 1n€11`
before a better informed government can repeal government m harder wOrk’ not 1}**; iu
longer hours of labor, not shorter; 1n rela-
the unsound and dangerous monetary laws now ( l1V€ly low pay temporarily, not higher; in
» cluttering up our statute books. People must Y greater economy and saving, not less; and 1
learn that trade, reegvery, and prosperity grew In greater PI`OdHCtl.OII, I10lZ less. TIIGIQ is ]]()
and expand upon a sound currency, not upon easy mad tu re°°VerY‘ There Is no WsY In
which the people 1n general can spend or
an unsound one. b h · .
_ _ _ orrow· t e1r way 1nto a sound recovery.
Monetary tinkering of the type eXp61‘16110611 There IS no way by which the people in
by this country must be appraised with the general can get something for nothing.
proper perspective. It is a disease of depres- (gl The g0V61`111116111 1111181 Cooperate with
sions. The germs attack the monetary dema- glgtiuiss mes; Femevle svsrg obstsolo P08·
. . . ro ‘ _
gogues who, in turn, prey upon and inject the do 1 I3 eu. lim S’ lan. Substitute me
_ _ _ na an genera regu ation 1n constitu-
vlyus into the suffering and l1Il111101’6d 11138868- tional form for the present arbitrary and
It is not a disease that those untrained in mone- repressive policies now retarding recovery
tary matters ever understand. It is the province and dos11‘0Y111g 6011111161166.
of experienced monetary doctors, just as certain in (3) The geveruniint should 1`o1110V6 118611
. . . e e ‘ ‘ ,
human diseases are the prov1nces of experienced - · V rf, way POSSI C rum busmeee eeuv
h _ _ Th “P 1 ’ M ” _ ities. t IS not the function of a const1tu-
p .Y811>1¤11S· . 6 60p 68 0116}* 18 1101 801116* tional republican government in this na-
th1ng for the 1nexper1enced or for the untrained tion to compete with its citizens in their
to manipulate. The "People’s Money” can be oHo1`1s 10 1113116 n11V111g·
a good money and serve them well only when C (4) Q¤£1¤1;1¤11¤¤¤Ls¤v§r¤m¤¤r and g0V·
. . rnm ·
properly mformed and experienced experts pro- b cn Y aw’ rat C1 t an uy mem must
_ d _ _ _ dl f h 1 e restored. The bureaucracies should be
1661 11 611 11111111111111 11 801111 Y 01 1 6 I16oP o dismantled, and the appropriate functions
who use 1t and yet have little understanding as ` of government should be returned to the
to its true nature and functions. It is a diffi- Cabinet omoors and 10 n 16W P61`1118116111]Y
cult task, indeed, to make the general public _ estfglleétieu bureau? aud eomm1ss1ons·
realize this simple truth. It is also a slow and 1 and gua1_;;c;°(; cmlgmy must be reepeeteu
difficult task for a relat1vely small group •to (6) We must be given a Sound currency.
swmg a country back to the fundamental prin- Business th