The battle is on. Smart politician that he is, Roosevelt could not keep the inflation issue from coming to the front. Since his inauguration it has hung ominously in the background. The inflationists have never been very quiet, and within recent weeks their meagre squeal has grown into a major howl. But only in the last week have any considerable "sound money" jitters become noticeable. First Barney Baruch, adviser extraordinary to the New Deal, pronounces his opposition, and then comes the electric shock of Professor Sprague's desertion and condemnation of the Administration. Now the Federal Reserve Advisory Council intones a sombre, if hollow, denunciation of a "currency of fluctuating value," while the New England Council points to a dire future if there is no stabilization of currency. No doubt we are in for a heavy salvo of such pronouncements, which will be as frantic and foreboding as they are uncomprehending.

The particular blast of Dr. Sprague is likely to be the signal for serious battle, which he promises to begin with a series of syndicated articles on good and bad monetary policies. Carrying the prestige of the "brain trust" to the Roosevelt public opinion and that of the Bank of England to American industrialists and bankers, his opposition will undoubtedly be of prime importance in undermining the President's general support. This, in the opinion of Castor and myself, is indeed a great misfortune. The story is told that at a banquet in London, where Dr. Sprague waxed conservatively eloquent over the manifold virtues of the depression in eradicating the weak and inefficient, etc., Mr. J. M. Keynes approached him afterward and said, "There is only one word to describe you. You are a sadist." Dr. Sprague is a primitivist whose primitivism extends back only to the nineteenth century. Along with many other learned economists of our time he yearns for a world which exists no more and insists upon an attitude which can only seem uselessly scholastic.

To say that the President's money policy is "a drift to unrestrained inflation" is surely an unfounded fear and is part and parcel of that indefensible position that all inflation gets out of control of the inflators. The present gold-buying policy is not inflationary at all, but its psychological effect is--witness the rise in stock and commodity prices and the fall in certain bonds. If enough people of Sprague's positions continue to point out that the policy is not inflationary, it will in fact cease to have the effect of raising internal prices. This certainly is not the only way of inflating and it may not be the best, but it has been making a start towards an absolutely necessary inflation.

Whether or not inflation, or reflation, was necessary to get us out of the depression, the New Deal policies have made it necessary now; the only question is now it is to be done. By his opposition to the Administration, Dr. Sprague is contributing heavily to upsetting the Roosevelt control over public policy and is thereby destroying our one chance of getting a carefully engineered inflation.