Show how inflation f hurts farmer period of false prosperity Is always followed by distress by WALTER E secretary Secie tary economist economists national corn com cittee on an monetary policy and mem ber of the national advisory council of the american liberty league valle currency inflation is taking place some classes appear to benefit notably the farmer for this reason the principal fana farm leaders are aavo eating currency inflation drives tor for currency inflation in this country hare have been and are today to a large extent agrarian ra increments 11 the benefits 1 in the case of the farmer as with other clashes are apparent and cot not real they fade into dismal disaster several important factors contribute to the relatively favorable position given the farmer by currency fufla tion the prices of his products rise rapidly at the same time he tends to hold his expenses per unit of product down for a considerable time he delays buying new equipment he does not add to his investments in land or buildings he ile holds down bis his labor supply these things give the farmer an unusual and most welcome margin of profit with which to pay his debts accumulates debts after these debts are paid how ever he will begin to consider ways and means of expansion he will re store hia his depreciated property buy new equipment increase his number of employees and perhaps purchase new buildings and land when he begins buding he will find that the prices are rising rapidly or have risen to startling heights to buy before prices rise further will seem prudent the ten d deney to borrow in order to buy will increase thus as inflation continues farm debts will mount steadily the burden and distress associated with old debts will be forgotten the steadily rising prices of agricultural products will appear to provide ample assurance that all Is well the more the currency Is inflated the higher the prices will rise and the greater will be the amount of new debts accumulated conditions after 1920 then comes the headache in time the inflation of the currency will come to an end prices will collapse and the dangers and burdens of the debts will be become come painfully apparent enforced liquidation will begin its destructive course distress and suffering will become widespread farmers w III realize then that once again they are living through the hard times which anvari ably follow an inflation the difficulties dIfficult les which farmers have experienced since the collapse of 1920 have been due largely to the credit in flatten which took place during the world war and to the related malad just ments which the war and inflation generated periods of falling prices and liquidation are almost invariably caused by a receding period of cur rency inflation therefore to ur ure e in as a means of overcoming the distress of depression Is but to prepare the way tor for another period of distress |