Prophecy

A best seller of 1934 was Kemmerer on Money, a timely tract on the gold standard whipped out by Princeton's famed money doctor. Onetime financial adviser to the Philippines, the Dawes Commission and eleven foreign nations, Professor Edwin Walter Kemmerer has lately been in high domestic favor with hard-money men and balanced budgeteers. Last week in Philadelphia Dr. Kemmerer ventured a prophecy on prices by the end of Depression. Said he: "We may reasonably expect that the cost of living, the wholesale and general price levels will be something like double what they are today."

The Kemmerer prophecy was based on three assumptions: "1) that the gold standard will be retained in the U. S. and the other countries that continue to have it; 2) that the leading countries of the world that are now off the gold standard will return to that standard; 3) that we will not further debase our own gold monetary unit but will continue with our so-called 59-c- gold dollar." These assumptions implied that "within a reasonable time we will balance our budget and will thereby avoid any runaway inflation."

With the return of more stable conditions, explained Professor Kemmerer, gold would come out of hoarding throughout the world, the demand for the metal would ease, prices would consequently continue to rise. If the dollar had not been cut to 59-c-, U. S. prices might only return to pre-Depression levels. Now, however, prices would not only recover to former levels in terms of Roosevelt dollars but, to make up for the slash in the gold content of the U. S. monetary unit, would mount another 69%.

"From February 1933, the last month in which we were on the old gold coin standard, to the present, wholesale prices have risen 35% and the cost of living 16%," Dr. Kemmerer declared. "Many important items of food have shown spectacular rises during this period. The public, particularly our women folk, are becoming increasingly concerned over these continued advances in the cost of living; and consumers' strikes are being reported frequently."

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