Bonds Are Best Bet, Survey Shows

News that terminal leave bonds can be cashed by September 1 may raise an itch on the palm of the veteran, but something more like a furrow on the brow of the professorial economist. Two members of the Economics Department here saw the government move yesterday as another round in the inflation spiral.

"It's all up to the veteran and what he does with the money," declared John D. Black, Henry Lee Professor of Economics. "If all that purchasing power is thrust on the consumption market at once, it's bound to have a boosting effect upon prices."

Recent developments, Professor Black added, make any precipitous rise in public spending particularly dangerous now. Pointing to numerous wage increases, particularly in the basic industry of coal, Professor Black saw a spending increment made possible by terminal leave cash as an ominous inflation threat.

Vet Will Spend

That a veteran would cash in his bond only to pad his safe deposit account was regarded as highly doubtful by Richard M. Goodwin, assistant professor of Economics. He considered that where the payoff money came from was the determining factor in estimating a possible inflationary effect.

Comparisons cannot be made with civilian holdings of war bonds, Goodwin asserted, citing postwar surveys showed surprisingly reduced quantities still held.