The Freeman 1972 - The Ludwig von Mises Institute

428 THE FREEMAN Julyrequisitioned. On December 11,1779, Congress "voted requisitionson the States for specific suppliesof flour and Indian corn. December14, they established a systemof requisitions and contributionsof this kind, Maryland alone votingno. February 25, 1780, anelaborate apportionment of requisitionsfor such supplies wasmade. . . . Each State was calledupon for the staples which it produced."27The most drastic impact of inflationis that it tends to disintegrateand divide society, to turnemployee against employer, thegoverned against the governors,the creditor against the debtor,the producer against the consumer,the populace against speculators,and so forth. Inflation tends· to reversethe rules of economic behavior:where once it was prudentto save money, it becomes expedientto spend it; where once it wasgood business to supply consumerswith durable goods, it becomesprofitable to delay the sale; whereonce creditors were those whowere better off, it now becomesgood business to borrow moneyand repay it with a currency thatis less valuable than when the loanwas made. The solid citizen who iscautious and prudent can do wellover the years by hard work, carefulinvestments, and saving,when the money supply is stable.His prosperity may well be describedas virtue rewarded. Inflationsets the stage for wealth tobe gained in a different fashion:by borrowing, by holding on togoods for the inevitable higherprices, and by attending closely tothe swift changes in the value ofthe money. Such means of gainingriches are widely resented, particularlyduring a war.Unhappy Consequencesof Rampant InflationMen contemporary with eventsfrequently described the consequencesof the inflation as well ascould be done. Josiah Quincywrote these words to GeneralWashington:I am firmly of the opInIon, andthink it entirely defensible, thatthere never was a paper pound, apaper dollar, or a paper promise ofany kind, that ever yet obtained ageneral currency, but by force orfraud, generally by both. That thearmy has been grossly cheated; thatcreditors have been infamously defrauded;that the widows and fatherlesshave been oppressively wrongedand beggared; that the gray hairsof the aged and the innocent, forwant of their just dues have gonedown with sorrow to their graves, inconsequence of our disgraceful depreciatedpaper currency....28By 1778, John Adams could saythat "every man who had money