Wallace on Inflation

When Henry Agard Wallace entered the Roosevelt Cabinet as Secretary of Agriculture, he was generally regarded as the Administration's most radical currency inflationist. After six months of economic bumps and political knocks he admitted last week that bushels of cheap money would be no magic cure-all for bushels of cheap wheat, corn, potatoes. To Chicago last week Secretary Wallace carried a carefully prepared speech which had been read and approved by President Roosevelt. In effect it was the Administration's answer to the Farm Belt's howl for inflation. Addressing the convention of the Grain & Feed Dealers National Association but talking at the whole Midwest, Secretary Wallace declared: "Left-wing farmers and Right-wing grainmen are both kidding themselves. They want to be left alone to face the problem ostrich-fashion--with their heads in the sand and their rumps out in the open ready to be paddled. . . . "America is a creditor nation to the tune of $1,000,000,000 annually but as a nation she has a debtor psychology. . . . The American people are still essentially high tariff . . . and for the time being profoundly nationalistic. . . . They do not like to face the fact that effective foreign purchasing power for our crop surpluses has largely disappeared. . . . We are still dodging the fact that we have 40,000,000 surplus acres of crop land for which there is no effective market, that there are still twice the normal supplies of fundamental commodities. . . . "My position with regard to controlled inflation has not changed. But please remember that inflation is not a cureall, that when it stops, as sooner or later it must, we will again discover that our problem is one of achieving balance. . . . There is danger that optimism, price-fixing and inflation will all tend to increase rather than reduce the lack of balance resulting from our creditor position, our high tariffs, our surplus acres, our excess stocks. . . . Waving wands will not dissipate real economic problems. . . . Price-pegging may have its uses but resort to price-fixing without control of supply is fraught with danger. . . . "If the purchasing power of farm products does not improve in the next three months, the price-fixers and inflationists will have great power in Congress and there will be passed legislation which will make the Agricultural Adjustment Act seem extraordinarily conservative. . . . "It is time for the people to begin to think in terms of longtime supply & demand which spreads over years instead of over days. There is no money in it right now for them but their children and grandchildren will get the benefits." In Secretary Wallace's own Iowa the always disgruntled Farmers' Union was last week demanding his resignation because he put production control ahead of price-pegging and inflation. Amid threats of another farm strike "that would overshadow anything that ever happened in this country." Milo Reno bellowed: "Secretary Wallace is more responsible than any other man in the denial of the American farmer to the right to production costs. So far my confidence in President Roosevelt has not been destroyed but it has been cracked mightily. He will either make good his promises or he'll be the last President of this American Republic."

To Secretary Wallace's defense at the Des Moines convention went Iowa's Democratic Senator Murphy: "There are folks who want to feed Henry Wallace to the lions. As I happen to know, he is the goat for things for which he is in nowise responsible. . . . While the farmer is losing his pants to his creditors. NRA prices are rolling up his shirt. We'll soon have a nudist colony of our own."

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