Word: scherman
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UNCLE AM is now sitting on top of the highest pile of gold the world has ever seen --nearly 21 billion dollars worth of the precious metal, nearly three-quarters of all the gold in the world. And by the 1933 Gold Prohibition Law (as Mr. Scherman terms the anti-hoarding act of the banking crisis days) no one else in the United States but the Treasury, not even the Federal Reserve Banks, can hold any gold at all. Further, the President by executive decree can fix the weight of the gold in a dollar pretty much as he pleases...
...even to ten cents. F. D. R. might be able to show a surplus over relief and defense expenditures! This modern Midas touch, though, would also bring it is difficulties. Such an increase in government expenditures would multiply the money supply, raise prices, and bring on inflation. Mr. Scherman, who makes no bones about distrusting our "entrenched bad government," thinks that the only protection for the common man against these dire consequences is to repeal the Gold Prohibition Act. Then, whenever F. D. R. decides to make another paper profit, the common man can demand gold for his paper currently...
...this is true. However, Mr. Scherman has found only one of the numerous Ethiopian tribesmen in our gold pile. The New Dealer's inflation which lie fears would at least come by wilful choice; but the tremendous excess reserves now in the banking system could just as easily finance a major boom which both Treasury and Reserve Board would find hard to combat. And experience has proved that in time of crisis the government disbursements, for defense or for relief, will be financed by any and every means available. Issuing billions of dollars of modern Liberty Loans...
...Amateur Economist Harry Scherman, president of Book-of-the-Month Club...
What to do about this deplorable contrast between private and Governmental honesty Author Scherman makes less clear. The essential thing, he suggests, having summed up a laissez-faire program that looks suspiciously like Adam Smith in modern dress, is to "raise the standards of economic literacy among...