Omaha daily bee., 1898-09-16
CHAMPIONS OF FIAT MONEY
Advocates Of Irredeemable Paper Issues Have
Their Day at Conference,
GENERAL WARNER STATES THE CASE
President of the American timetable
Union Presides and Leads on
with Exposition of His
Views on Paper Money.

1t was with some difficulty that Congress
man Charles s. Hartman Of Montana, who
presided over the sessions of the third aud
last day of the national currency conyen-
tion, could keep In order the middle Of
the-road fatist editors OF the Reform Press
association, who we're clamorous to be
heard and could hardly walt for the order
OF the program as arranged to be carried
out. The most obstreperous OF the fatists
were L. II. Weller OF Iowa, the original
Calamity" Weller, as he is willing to be
called, and N. II. Motsinger of Indiana.
Rising to a question Of personal privilege
Motslnger openly accused General Warner
OF being an Objectionable leader of the
discussion on behalf OF fatism on account
OF his bimetallic Views and his connection
with the sllverites. Warner promptly
squelched him, though, but assured him
that both he and Weller would be heard
at some time during the progress of the
debate.
The Affirmative for an unlimited issue by
the government OF an irredeeinable paper
currency was taken by General A.. J.
Warner of Ohio president of the American
Bimetallc union. General Warner con-
Cured in the opinion of the gold standard
apologists for falling prices with the eX-
ception of farm products, OF which the labor
cost has not been materially reduced, and
with the further qualification that fxed
charges, such as transportation rates debts
and taxes, remained the same notwith-
standing the lowering of the gem
eral level of prices. The debate he said
would be divided into, first, the advocacy
OF bank currency; second, the plea for
government issue Of paper money to cir
culate concurrently with the metals and
to be based upon them and, third, the
affirmation of an unlimited issue by the
government of an irredeemable paper cur
rency, or absolute fiatism.
General Warmers Preface.
Leading UP to his own paper General
Warner discussed the prices and debt ques-
tlons as follows in an endeavor to answer
the gold standard position
II was asserted yesterday that the fall OF
prices has been due to inventions and the
improved me 'hCd5 Cf IroluCtion, and is
therefore, blessing to the world an1
great gain to civilization. In that opinion
we entirely concur insofar as tie fall OF
prices has been due to a reduction Of tht
labor cost of production. If 100 pounds o.
steel can be made now for the saEla labor
cost required to produce ten poun7s twenty
years ago, the fall of prices in steel and stee
world may share 1t. So with all things tn.
cost of production of which has been reduced
and in consequence of their increased Guan
tity the prices of these things relatively t
prices Of other things have gone down, tha
is what we desire. But 1t does not follow
that farm products, OF which the labor cos
has not been materially reduced, should sci
for less money, while taxes, fares and debt
remain fxed / say it does rot follow tha
they should be forced down by a contractio'
of the r" Jney volume by which the genera
level CT prices Is lowered
One overpowering reason why the genera
level of prices should not be permitted t
fall is that the earth mes to each genera
lion burdened with thousands Of millions o
dollars OF debt If the general level o
prices keeps going lower and lower you'll
soon reach the level where the holders o
bonds and mortgages will take everything
leaving to the producers only bare living
We are dangerously near that line now
/ say that the dead hands should not b.
permitted to reach forth from the grave an
claim everything. The dead should hav
been satisfied while living with the serve
they received as an equivalent to what the
gave. 1t is proposed by our 6)id standar
friends that by the contraction of the vol
ume of money prices should be restricted t
the burdens left to us by the dead past bu
1t is the living and not the dead which ar
entitled to the benefits of labor and eX
change.
Advocates Elasticity.
He then read the paper he had prepare
as the initatory one in advocacy of a
elastic circulating medium, of which tn
following is the substance:
The measure of the effect of paper none
on prices and on other money does no
depend upon whether or not 1t is covere
by coin dollar for dollar, any more tina
upon the color or texture of the fiber of tn
paper on which the insignia of money
stamped, but entirely on the quantity c
such money into circulation The Drin
ciple IS the same, whether applied to pape
money or to gold and silver coin, or to gol
alone. No economist surely will disput
the proposition that II the stock of gol
should be at once largely increased by ner
finds of gold. while the worlds needs 70
money were unchanged, that the value c
gold everywhere would be decreased an
prices would rise. This would amount
The effect, no doubt, Of the restoration {
silver to unrestricted mintage would lowe
the value of all money, including gold, a
would be evident by a general rise of prices
On the other hand, should the supply {
gold for money be cut off by reduced produc
tion and increased demand for it for III
arts or for other non monetary purpose!
while the worlds needs for money continu
the same and no other money was sub
stituted for the gold, the value Of gol
would be increased and prices would fal
This is exactly what has taken place
the last thirty years BY the demonetiza
standard to countries heretofore using littl
or no gold for money, the demand for gol
relatively to its supply has largely increase
and its value correspondingly augmented
But the point wish especially to emphasi2
here is this: That the effect of the In
crease or decrease of paper money, to III
extent that 1t takes the place OF or adds
metallic money, or to the extent that
does the work of metallic money has III
same effect upon general prices, and on gol
itself or on so-called standard money, q
would much additional gold Obtaine
from altogether new sources and put int
circulation.
The creation and Of other kinds
money does affect the value of gold and
is necessary therefore that the currency
country should be dealt with as a whol
and not by parts, and therefore the issu
and regulation of paper money belong
naturally to the hands that control coinae
OF the metals. The only automatic regula
ton OF money is through the production
the metals, and when this principle
regulation is departed from, governmer
alone is competent TO set up another. Other
wise the power will be given TO others
practically nullify the power over coinag
placed by the constitution in the hands
the general government, for he who has III
power to issue paper TO circulate as none
has the power to drive out the metals er
tirely.
But what is claimed by the advocates