( 188 ) 



When these methods are used, unspent incomes and govern- 

 ment debt, both of which are inflationary, rise to new and 

 greater heights. 



Patching market prices with ceiling prices, patching that 

 patch with rationing, and patching that patch with subsidies 

 do not solve the problem. They merely postpone the day 

 when the tire blows out. 



We Have a Two-Money System 



Bimetallism was the original two-money system. It did 

 not always work, because it was impossible to control the 

 supply of and the demand for silver and the supply of and 

 demand for gold, or to keep the legal ceiling prices of the 

 two metals in equilibrium with their market prices. 



The present rationing system is also a two-money system. 

 One must have dollars to get the property and one must have 

 coupons to get title to the property. There is no lack of dol- 

 lar money; there is a shortage of coupon money. With the 

 supply of dollar money greater than the supply of coupon 

 money, it will be hard to keep commodity prices at their 

 legal ceilings. The difficulties of accomplishing this objective 

 are enormous. 



Ceiling Prices Are Inflexible 



Ceiling prices, unaccompanied by the other phases of a 

 regimented economy, retard production, stimulate consump- 

 tion, and interfere with the movement of goods through the 

 channels of trade. These difficulties are likely to be greatest 

 in large cities in deficit areas. This is due in part to the in- 

 flexibility of ceiling prices. 



Price ceilings tend to be based on differences in freight 

 rates. This operates to the disadvantage of large urban cen- 

 ters like New York City. The difference between the price 

 of a chicken in Missouri and New York is greater than the 



