Hard, Soft & Red

"We need," said Colonel Leonard P. Ayres in Philadelphia last week, "a campaign of education to reduce the economic illiteracy of the people--and their representatives in Washington. Gresham's Law may be as applicable to individuals as it is to money."/- But the convention at which he spoke, a meeting of the American Statistical Association, and twelve kindred societies convening simultaneously in Philadelphia, was good proof that U. S. economic illiteracy is no longer quite so black as it once was. For of nearly 5,000 men present at the great annual economic camp meeting the public for the first time recognized perhaps half a dozen names of notable economists among a list which included (besides Colonel Ayres) Edwin W. Kemmerer, Irving Fisher, George F. Warren, Oliver M. W. Sprague, James Harvey Rogers, Mordecai J. B. Ezekiel, Rexford Guy Tugwell.

The same thing which has aroused public interest in economics was the chief topic of interest to the economists: money. One afternoon 3,000 pundits crowded the walls of the ballroom of the Benjamin Franklin Hotel to hear Professor Warren expound his theory of the relationship of the gold supply to price levels, that the cause of the Depression was that prices outran the supply of gold in the late boom. It was his first public pronouncement since he became adviser to the President. When he had done, the 3,000 listened just as eagerly to Professor Kemmerer who has taken the place of leader of the opposition theory, whose point was not a direct attack upon the Warren doctrine but that dollar tinkering brought danger of uncontrolled inflation, for there is no way of controlling public psychology once it goes inflation-mad.

The split between the hard and soft money men was dramatized a day later when the American Statistical Association came to elect officers. The nominating committee headed by Professor Irving Fisher named eight vice presidents to head inquiries on various economic subjects. One of those named was Professor James Harvey Rogers, to study "facts and methods bearing on economics and economic theory." Hard money men who "hate the guts" of soft money theories felt it was time to take a hand. They nominated Professor Harold L. Reed, hard money man from Cornell, in opposition. The vote: 53 (hard money men) for Professor Reed; 58 (soft money men and hard money friends) for Professor Rogers; 1 (an economist with a sense of humor) for the Big Bad Wolf.

Biggest news of the conventions was reserved for the last day of the American Economic Association meeting when Professor Rexford Guy Tugwell, Assistant Secretary of Agriculture, took the rostrum, propounded a doctrine which was neither hard nor soft, liberal nor conservative, but from the standpoint of economics bright red. Said he: "We have depended too long on the hope that private ownership and control would operate somehow for the benefit of society as a whole. That hope has not been realized. . . . Private control has failed to use wisely its control of the land."

His most drastic declaration: that privately-owned land must be "controlled to whatever extent is found necessary. . . . We are preparing a land program not merely for the benefit of those who hold title to it. . . ."

As first step he proposed that the Government buy up 50,000,000 acres of land, more if need be (total farm acreage in the U. S.: 986,771,016) in four chief areas: 1) the Appalachian Highlands and Piedmont Plateau; 2) Michigan and Minnesota; 3) the western fringe of the Great Plains; 4) patches in eastern Kentucky; convert it into parks, game preserves, grazing ranges, take it out of production.

"The area of land in production would be sufficiently limited so that it could be operated at its utmost efficiency without flooding markets and destroying exchange ability.

"Such a system would envisage a commercial agriculture made up of the most efficient farmers operating the best of our lands with the remaining lands being used in other ways, and the remaining farmers devoting their time to other occupations."

From Washington two days later the New York Times reported that the Administration was planning to start such a program, beginning modestly with a $50,000,000 expenditure, going on to an eventual $350,000,000.

/-Gresham's Law: bad money drives out good. Colonel Ayres's point: economic ignoramuses may drive out economic wisemen.

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