New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1918-06-16

toms Of such methods Of imitation are
the disappearance Of metallic money
and the general advance in the prices
of comm ODDITIES.
In this terrific war most Of the Euro
pean nations have recorted to this or
similar methods Of imitation. and be-
cause the operations Of various govern
ments have been united through bank
ing transactions and by reason Of in
terdependence and close international
relationship, even those nations en-
tirely unconnected with the war have
felt the effects of imitation. As q re-
suit, there has been in effect In the
last three and one-half years q world
imitation the like Of which has never
before occurred. To illustrate: Prior
to our entry into the war. when the
European nations were buying heavily
in the Uaited States, they paid largely
in gold for what they bought. and as q
result about billion dollars in gold
coin came to this country in the period
of two and one-half years. The reason
the European nations were able to send
us their gold was that they printed
paper money for their own use, releas
ing gold for Us.
But that gold imitation in this coun-
try Is one explanation Of the general
advance in prices OF all commodities
although undoubtedly it Is not the only
explanation, for it must be freely ad-
mitted that prices have been affected
| first by scarcity, occasioned by In
creased demand from Europe for many
articles produced by US; second, by
reason of the fact that increases in
taxes and wages Of labor have entered
into the cost Of production and sale of
ell articles, and account for share
OF the increased prices Of commodities.
1t is doubtful II we in our country
could have avoided imitation, no matter
how hard we had stuck to the plan OF
higher taxation or the "pay as you co.
policy, but we may as we'll frankly
admit that while our financial policy
has been conservative. the great in
crease in cur currency issues has con-
tributed to the general imitation. True
we have not issued currency or gov
eminent promises to pay In the form
Of circulating notes, but we have issued
bonds. and we have permitted-and In.
deed could not have forbidden--the use
Of these bonds az collateral for banb
credit.
Thus while the government has no,
paid for goods and services" with is
own circulating notes, It has issued It's
promises to pay in the form Of bonds
and it has permitted these bonds to be
hypothecated for currency, and thus
through our banking system, has Great
ed machinery under which the owner
of government bonds might secure
bank credit with which he might pa,
by check or In currency for what h.
bought. We have thus far in thi.
country been able to hold down tn.
issuance Of currency by maintaining q
high gold reserve against it, and Their.
is no national currency that is on
stronger basis. but to deny that tn,
issuance of government bonds to rails,
funds to pay for goods and service.
results in imitation would exhibit ar
2. The extent to which imitation has &C
counted for the general rise In prices is. Of
course, debatable. Those who dispute Il poin,
to the rapid advance in wages since 1914
due to the increased demand for labor ant
the withdrawal Of many soldiers from In.
dustry. The increased demand or diminished
supply of many commodities is also poin TED
to. AS against these arguments we have the
increased index number of more than zoe
commodities. the increased deposits and loa
and discounts of our banks. the increase II
6 rease in the national debts of all the glea'
nations.