Thomas Tooke

The plight of the people: Inflation 1913-1919

In Inflationary Period of 1913-1920 on April 22, 2012 at 9:18 pm

As Kemmerer, Princeton Economics Professor wrote in 1920:


The true value of savings accounts has been cut in half by the rapidly depreciating dollar, and the same is true of paid-up insurance policies, of fixed incomes from bonds, mortgages, pensions and preferred stocks. Chief among the sufferers have been those who least deserved to be exploited — college universities, benevolent institutions, and the thrifty people who in the past saved capital and put it to some productive use. All these have been penalized, and the newly rich, with extravagant spending tendencies, have watched gold pour into their purses. Teaches, clerks and others with fixed salaries have been hard hit. On the other hand, the facility with which money could be borrowed, owing to the low rate of interest demanded, led to dangerous speculation and shameless extravagance. Widespread discontent and extreme radicalism have resulted.


He further writes :


In connection with the discontent that usually results from inflationary movements, the French have a saying “the guillotine follows the paper money press- the two machines are complementary one to the other “.


The Russian could probably add their experience of 1917 and the Chinese theirs of 1848…


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