The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-08-23
Former Director of e. S. Mint
Tells of Unrest.
Present High Prices Due to
Credit Imitation.
SAYINGS have BEEN INJURED
Before War Accounts Worth
Only Half as Much.
Bank Deposits Are Not Wealth,
Says Geo. E. Roberts.

New York, Aug 23.-Why has the
dollar declined in value, so that today
it is worth only about half as much
as it was before the outbreak of the
European war? The answer is that
it has been diluted. and Americas
bloated credit system is held to blame
II the United States had issued
greenbacks instead of bonds to finance
the war there would be a clearer I'M
Outstanding of the initiation which has
cut in half the purchasing power of
the dollar. 1t would be apparent that
the production of useful commodities
having been curtailed, and the turn
out of dollars having been greatly ex-
/ banded, it would take more dollars to
| buy given commodity, under the law
of supply and demand. But the step
/ from greenbacks to bonds was a step
out of the realm of currency into the
realm of credit, and it confused the is
sue.
Factor in High Prices.
The man who had a saving account
of a thousand dollars before the war
| has only half as much now. The man
/ who works for $50 a week, say. is ac-
tually getting only SIS. Those things
! are true. whether you blame high
4 prices or initiation. But If you are
| prone to consider high prices a kind
|
J wrong, because, according to George
F. Roberts. former director of the
mint and now vice president of the
National City bank, high prices are
! chiefly a reflex of the credit initiation
| from which this country is suffering
and the initiation is remediable.
Twenty years ago the people or
| this country rallied against the So
/ cent dollar" Mr.. Roberts said the 9TH
er day, land free silver was voted
p. he T7f
dollar today. and it is Va question
whether we are going to make it per-
manent.
Due To Change in Money.
Everybody knows that the pur-
| chasing power of money has declined,
| that prices are twice as high, but most
| people think ii is due to the fact that
Something has happened to commodi-
ties. Few think of it as due to
changes on the side OF money. There
! is something delusive about a rise in
prices due to depreciation in currency
1t sets up a situation which looks IKE
prosperity and which for time has
some of the features of real prosper
ity Rising prices stimulate buying
and stimulate production while they
last They make business good and
bring profitable employment. We have
had a great increase in bank deposits,
and some people, including some
bankers. regard that as prosperity.
They think it is proof of an accumula-
ton of wealth.
Bank Deposits Not Wealth.
But bank deposits are not wealth
II you borrow $4,000 from your
banker, and 1t is credited to your
checking account. the deposits of that
bank rise $4,000. And when you
check it out. your checks will be de-
posted in other banks. and will in
crease their deposits. Bank deposits
constitute purchasing power, and the
$4,000 we have taken as an example
remains in circulation until somebody
paws off the $4,000 out Of savings
so long as that $4,000 remains
in circulation it is not an increase in
wealth. But that is the kind OF pur-
chasing power we have in this coun-
try. 1t is pure initiation, kind OF
bloat or dropsy.
Savings Wiped Out.
IT the present level of prices IS
permanent the value OF money and
! OF all obligations to pay fixed sums