Relief in Seven Years of Stable Money 187 
is because the people could not only buy goods with 
a dollar, but because they had more dollars in 
their income. 
We do not often have such an expansion of com- 
modities at reduced prices as has been recorded dur- 
ing the past few years. This expansion has taken 
place in the greatest burst of speed American indus- 
try ever attained. But the reduction in prices was 
warranted, for the most part, by an equal or greater 
reduction in unit costs. Had there been a reduction 
in prices such as that from May, 1920, to June, 1921, 
when the dollar rose rapidly in buying power, from 
40 to 70 pre-war cents, there would have been no 
such expansion of American industry as the last six 
or seven years have witnessed, but a repetition of the 
collapse of industry that took place in the 1920-1921 
period. 
For when prices fell in the summer of 1920 below 
the level of cost, profits ceased and losses were in- 
curred, factories shut down, workers were turned 
away by hundreds of thousands, continued purchas- 
ing power was reduced and “hard times” came on. 
Such were the evils of deflation. 
The evil of inflating the currency is about as great 
as the evil of deflating it. A workingman who, in 
1896, had put $100 into a savings bank found, in 
1920, that his principal, plus compound interest at 
41% per cent, amounted to about $300. On the face 
of it he had his principal back and in addition $200 
of profit, or accumulated interest. This $200 seemed 
a genuine reward of thrift. But it was an illusory