CHAPTER XII

RELIEF IN SEVEN YEARS OF STABLE MONEY

A major reason why expected earnings of corporations
 should now bulk larger than they did a
few years ago, as reflected in the high price levels of
stocks, is that since 1922 the United States has had a
comparatively stable level of commodity prices, that
is, a stable dollar.
We have had seven years of stable purchasing
power, such as has never existed before in this country.
 The influence of this factor, while potent, is
subtle and generally overlooked. Through what I
have called the “money illusion,” the business man
generally does not know when the dollar does change,
much less does he realize when the dollar does not
change. But the harm from the change and the good
from the lack of change are very real and powerful.
Like the influence of peace as distinct from war, any
stability of commodity prices which makes the calculation
 of the business man, in terms of dollars and
cents, more safe than when the purchasing power of
the dollar is constantly changing, results in prosperous
 conditions, bigger earnings, better prospects, and
a higher price level of securities.

Qs