Monetary Policy and Economic Stabilizatio

MONEY

by Arthur D. Gayer (Macmillan, $3.00), is a book on its own account; it has a thesis. It is also a book about other books and their theses. The author presses his own point, but not to the neglect of others that deserve consideration. He belittles nobody.

That we must make a choice he takes for granted. The only question concerns the direction we shall take. He does not believe that the revamping of the monetary systems of the world is sufficient. Equally much must be done on the purely economic side. We shall never go back to the gold standard as we have known it, or thought we knew it. That is wrecked beyond repair. What we should do as soon as possible is to go on to one so elastic and pliable that the various monetary units of the world can gradually creep into a proper relationship. A provisional and experimental linking of the American dollar and the British pound would thaw out frozen money and credit for a good part of the globe.

A stable price level is not an economic cure-all. Rhythm, harmony, and balance within the general price structure are frequently more important than altitude. What the United States needed from 1924 to 1929 was not the stable price level it had, but a gradually declining one. Technological improvement had lowered costs. Their falling away from fixed or stable prices swelled profits. These in turn begot speculation. Those falling costs, if converted into tower prices and a higher general standard of living, would have saved the day—Henry Ford’s doctrine. We should have avoided inflation and thus escaped devastating deflation.

This is a sane and provocative book, understandable by any well-informed general reader. It would serve admirably as a beginning for those who propose to bore into the situation which now confronts the whole monetary and financial world.

Gold and Prices, by George F. Warren and Frank A. Pearson (John Wiley & Sons, &5.00), is a revision and a renaming of Prices, which caused such a stir in 1933. We are told that the authors continue their discussion of fiscal policies and reveal the economic situation as it exists to-day, and what, monetary policies are necessary to bring about complete recovery.

Their theory is that by changing the gold content of the dollar any desired price level may be attained and kept. They are sure of it —so sure that they infuriate some of their critics. In the good old days when the buggy-top swayed too far to the left a question arose as to whether ’she’ was heavy or ‘he’ affectionate. To Professors Warren and Pearson there is only one answer. She’s heavy, and has got to reduce before the top swings back into plumb.

The authors have thrown up a breastwork of two hundred and twenty-nine graphs and one hundred and fifteen tables, so that the critics have a pretty hard time sighting the object of their sharpshooting. This makes them still madder, and they aim at the theory incarnate. They get unalloyed joy in likening Professor Warren, who used to be seen in Washington occasionally, to the well-known fly which sat upon the axle of a chariot wheel and said: ‘What a dust I do raise!

The New Monetary System of the United States,issued by the National Industrial Conference Board ($2.00), is a running and readable account of what the old gold standard was, how it worked, and why it broke down, and the new plan of monetary management. A few very helpful diagrams aid the reader in keeping track of himself, and a well-arranged appendix enables him to compare the new system with the old. The book gives the gist of the whole matter.

HOWARD DOUGLAS DOIER