Evening star., 1919-08-31
BY WILL p. KENNEDY.
\ HERE has been considerable.
talk about the imitation of the

IN HERE has been considerable
talk about the imitation of the
currency being to blame for
the high cost of living.
Spokesman for both political parties
have proclaimed it on the floor of
the House-i.e., Champ Clark, leader
of the democratic minority. and Rep
resentative Simeon D. Fess. chair
man of the republican congressional
campaign committee. which put that
party into the majority.
There has been much expectancy
among business - interests-farmers,
exporters And shipping interests-re-
garding how the tremendous needs Of
the impoverished countries of Eu-
rope, already heavily in debt to the
United States, can be supplied when
they have no money to pay-how eX-
port trade is going to be financed.
Committee Action Awaited.
Therefore. those VINO look for SO
luton of the high cost of living and
those who are planning for a stable
development of foreign trade. and the
entire citizenship of this country
which. through the proper settle
ment of these two problems. expects
to enjoy more prosperous future.
are impatient to know what legisla-
ton in these directions the banking
and currency committee of the House
is considering.
Little or no,ning in the way of leg
slation aimed directly at debating
currency is going to be forthcoming,
for the simple reason that the commit
tee does not think any is necessary
The majority sentiment in the House
committee is that there is a much
simpler way and it is already work
able, with an opportunity for each IN
diyidual citizen to do his share
In SO far as the people continue to
borrow on their liberty bonds or on
Treasury certificates they tend 10
produce what might be called infia-
ton. The more quickly they pay ioE
those bonds and put them away as IN
vestments, the more they tend TO
bring down the issues of currency and
build up the cash reserve.
Gold Ratio With Currency.
This view of the situation is ea-
pressed by. Representative Edmund
Plat Of New York, chairman OF the
banking and currency committee, VINO
has held conferences with the leading
fnanciers of the country on this mat
ter of vital concern to the welfare OF
the nation. He says: .
,"Gov. Harding. Of the Federal Re-
serve Board is absolutely right In say
ing that imitation of the currency is
not, the chief cause of high. prices; we
have had very large issues Of federal
reserve notes. to be sure, but there Is
more than one dollar in gold Tor
every two dollars in currency that is
out.
PERSONALLY not venturing to- speak
for the committee, / think the nnanx
money. has been quite skillfully done.
believe that Gov. Harding is right IN
saving that if the people increase pro-
duction and increase saving SO as "
pay for the bonds now being carrleo
in the banks, the capital used up by
the war will be gradually restored
and the issues of federal reserve notes
will steadily diminish. They have, In
fact. diminished some already. out IL
is not to be expected that the VIII
stay down. because the Treasury must
continue to sell Treasury notes 1or
some months. -,
Highest Peak Of War Cost.
THE highest peak of the civil war
debt. it must be remembered. was not
reached until August. 1866, and 1t IS
hardly possible that the highest peak
OF cost for the American participation
in the, greatest war in history Will be
reached until the nfSt OF. tne year.
Chairman Platt sums up this situa-
ton by saying: IT'S credit imitation.
rather than currency imitation. that
is a factor of some Importance in the
present high prices of necessities of
life
No legislation is now contemplated
for reduction Of the currency. Mr..
Platt and other members of the COM
mittee say, and they do not think any
is advisable unless some arrange
m ents might be made to bring the
greenbacks. which are fixed amount
and not subject to. contraction and
expansion. into the federal reserve
circulation, so that they could be re-
duced gradually with the rest of the
federal reserve notes.
The greenbacks, however. form
comparatively small part today of the
currency and can hardly be called
factor OF great Importance. The
gold reserve maintained against them
in the Treasury of the United States
is almost equal in percentage to the
gold reserve back of the federal re-
serve notes.
Marketing Wheat and Cotton.
The. banking and currency commit
a