National Affairs: Turn of the Flood

(See front cover)

More than two years ago a thin, fine rain of inflation sentiment began to fall on the Slough of Depression. Nine months ago men realized there was a rising flood. By October when the last of the old gold standard was submerged many a man saw in his mind's eye the members of Congress assembling in an inundated Capitol wading through the green waters of the flood, legislating in a sea of deep greenbackery. Last week the prophets of catastrophe saw that they were at least in part mistaken. The flood looked silvery, not green and the direction of its drift indicated that it had turned into another course. No shouts of "Greenbacks! Give us Greenbacks!" rose from the Capitol, but 20 Congressmen adopted a resolution, previously framed by 18 Silver Senators, calling for bimetallism—free and unlimited coinage of both silver and gold —"at a ratio to be established by law." Senator Wheeler of Montana and Senator King of Utah called on the President with silver in their mouths. They emerged with shining eyes, and Mr. Wheeler confided to newshawks: "He is thinking about silver." Certainly the President was thinking about silver, if only because a soft answer sometimes turneth away radicals. Arkansas' Robinson, Democratic leader of the Senate, might announce (as he did), "My personal opinion is there will be no silver legislation in the near future." But the President could not afford to ignore a subject so dear to the heart of Congress. It was indicated that if necessary the President would have Senator Pat Harrison of Mississippi introduce a White House silver proposal. Such inflationist outcries as were heard came chiefly from the Senators and Representatives of the six large silver-producing states,* where remonetization of silver means profit first, inflation second. For the moment at least the President's "stupendous" budget message (see p. 17) had stilled Congressional demands for Greenbackery or other measures likely to impair Government credit.

But the inflationists had not suddenly gone into hibernation. When a correspondent gave out the impression that Senator Elmer Thomas of Oklahoma had given up his leadership of the Inflation cause, Senator Thomas was quick to say that on the contrary his cause was all but won, that he was pressing his victory to completion. And he added, sensationally, that he was already devising means for controlling the post-Depression boom which he believed to be inevitable as the result of his efforts.

Making the Tide. Notable indeed in the annals of the U. S. had been the Thomas efforts. The dazzling light of inflation having burst upon him more than two years ago, he was by January 1933 already filibustering in the Senate for "reflation or revolution." In February on the very day that Michigan's banks were collapsing like a house of cards, he wrote letters appealing for inflation to the big bankers of Manhattan—Morgan, Aldrich, Mitchell, Potter, Harrison et al. Said he to them: "After months of effort, here we are forced to appeal from an impotent Congress and a short-sighted administration to you, a higher power, to stop forcing the retreat and to, at once, give the order to advance."