598 IOWA DEPARTMENT OF AGRICULTURE 



money is to a large extent a paper money, and as a consequence their 

 prices are very high. England and France cannot deflate their currency 

 at once, because they would precipitate disaster the moment they tried 

 to do it. In 1869 in this country they tried to deflate, but with such 

 disastrous results that they had to stop it, and we were not able to 

 undertake it seriously until along in the '70's. I don't think France and 

 England will attempt any serious deflation within the next five or ten 

 years. I will also venture the opinion that the exchange rate will be 

 against them for at least five or ten years. That is, their money will 

 not be on a parity with ours for five or ten years. They will use this 

 as a "bear" argument for a long time to bring down our farm products, 

 but I don't think they will get very far with it. I will sum up by saying 

 that prices will be higher than a lot of people think, possibly for twenty 

 years, but at the same time there are likely to be very serious crises so 

 far as the farmer is concerned for two or three years at a time, when 

 he will get it in the neck. This is more or less introductory. 



I was going to talk about some phases of economics, and I am going 

 to apologize for economics by saying that it is a dry subject. Economics 

 has been a sort of dead language, in my opinion, for the past fifty years. 

 Economics was founded by Adam Smith about 150 years ago, and at that 

 time it was about the livest thing there was. People in that day enjoyed 

 reading Adam Smith, but, as I say, in the course of time it became more 

 or less of a dead language. Now, however, under the influence of war 

 conditions, economics has been waked up from its Rip Van Winkle sleep. 

 People are living under new conditions and they demand a new eco- 

 nomics to interpret these conditions. 



About 150 years ago a man by the name of Watt invented the steam 

 engine, and another fellow named Stevenson invented the railroad, and 

 then somebody else learned how to apply power machinery to spinning 

 and weaving. Before that people lived along generation after generation, 

 century after century, under practically the same conditions. Population 

 was stationary. Wheat produced eight or nine bushels to the acre. Then 

 along came McCormick with his reaper and farm conditions changed 

 rapidly. Prior to the advent of McCormick's reaper, it took three hours 

 of manual labor to produce a bushel of wheat, while now it takes ten 

 minutes. Fewer people could do more work on the farms and millions 

 were released to the cities. Then in rapid order followed the use of 

 petroleum, coal, electricity; and civilization, like a snowball rolling down 

 hill, gained momentum from its own weight. Thus our civilization came 

 of a sudden, and we soon had railroads, steamships, telephone, telegraph, 

 wireless telegraphy, automobiles, airships, and we now don't know how 

 much farther we are going with it. Physicists tell us that we are on 

 the verge of discoveries which will make all that has gone before seem 

 like child's play. But in the midst of all these changes we still continue 

 to hold onto the economics of Adam Smith; the economists devised to 

 get the situation of 150 years ago when there were large numbers of 

 small units of business freely competing with one another, where supply 

 and demand had full and free play. But this is not so well adapted to 

 this present day. Today the farmer is the only business man whose 



