The greatest hindrance to deflation in prices is the fact that everybody desires it in all products except that which he himself produces. How are we going to bring about deflation when we continually obstruct it? It is like the man who tries to lift himself by his own bootstraps.

This is exactly what lies at the root of the farmer's demands to the Federal Reserve Board to discount their warehouse, receipts. They wish to hold their grain for a better market, and thus keep prices up. Of course falling values in farm produce make it hard for the farmer; but it is no harder for him than for all other producers whose commodities are also falling.

It is inevitable that in times of a general drop in prices, goods must be sold at a reduced profit or even at a loss, because the change in wages tends to lag behind the change of commodity rates. Hence the producer is forced to pay a higher wage than the lowered price of his commodity justifies. The only way to prevent this, is to keep prices up to the high level.

The farmer's demands are an attempt to do this; they show either an astonishing ignorance of banking theory and practice, or a disregard of the public interest for selfish aims. We have had too much of price-fixing; it is to the nation's interest that the crops should be moved for consumption at prices fixed in an open and free market.