AN TAKE THE CASH...

The majority of the schemes to end the depression propose to do so by inflation. We are told that any plan that will release frozen assets will permit an expansion of credit which cannot fail to stimulate business activity.

The persistence with which this view is held is a source of wonderment to many economists. They point out that an increase of credit in a quiescent period is not accompanied by a proportion ate rise of prices. Credit and trade seem to advance hand in hand while prices do not go up noticeably until a speculative boom has set in. They point out further that the lowering of the discount rate has had apparently no stimulating effect on business, although it offers a very powerful incentive to borrow. Still, the banks are begging to lend, but nobody wants to borrow. From these facts the economists draw the justifiable conclusion that commercial activity creates credit and not credit, business activity.

If this is so, only consumers demand can not the whoels of industry in motion. As means of increasing sales, coercive selling and installment plans are new in well deserved disrepute. The only remaining method for encouraging buying is to improve the product and to lower its price. Reluctantly and as a last resort some industries have decided to make long awaited technical improvements in their processes and goods. Perhaps the stolid engineer will soon occupy the throne which the florid sales man has abdicated.