FREDERICK NYMEYER, 16546 South Park Avenue, South Holland, Illinois, U.S.A. November 1964 Dr. M. W. Holtrop President De Nederlandsche Bank N. V. Oude Turfmarkt 127-129 Amsterdam-C, The Netherlands Premi, and X apr. as Dear Dr. Holtrop: I am replying to your letter of November 5, 1964. You will have other uses for your time than to correspond with me, but to clarify my views I shall comment on your last sentence: "And a trebling of the gold price would, in my opinion, only result in disastrous additional inflation." I agree with that statement, but only if an assumption is made which I do not make, to wit, that the present principles for credit building, the issuance of namely, uncovered paper money ("fiduciary media," using a Von Mises term), would be continued on the higher gold price. I am aware that in letters to William McChesney Martin and Senator Douglas I am disputing conclusions, and that to get at the real issue it is necessary to probe for the ultimate premise on which each man builds his argument. That premise (which determines basic attitudes) is, as I see it, a proposition which pertains to the nature of man, viz., whether he is inclined to be far-sighted and wise, or short-sighted and foolish. I hold to the same estimate of "man" which has been held by many people, such as Machiavelli or, for that matter, the Divines at the Synod of Dort who affirmed that man is perfectly depraved; (I do not accept their detailed propositions which are over-extended), The contrary view, which evaluates the wisdom and steadfastness of men higher than I do, can be covered by the term, "romantic." I have a pessimistic view whether William McChesney Martin or his type or ideas will be able to survive eventually against the in- flationary pressures of politicians, such as Vice President Humphrey, Wright Patman of Texas, and other systematic inflationists. The votes go to those who promise the most, and who can get their way because the system they wish to use employs a "romantic" view of man. I have seen some figures which show that the United States increased the money supply in Truman's administration $5.2 billion annually; in Eisenhower's administration, $5.7 billion annually; in Kennedy/Johnson's administration, $17 billion annually. I have not checked the figures, but the boom in the United States is, I think, solely due to accelerated inflation, whatever it is exactly. Therefore, my interest is primarily in the "system" rather than in the price of gold; but being a businessman, I deplore