Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1919-06-06
ESTABLISHED 1855
MONEY OF THE WORLD
Expert Authority Discusses lnterna'
tlOnal Finances.
Why PRICES ARE ABNORMALLY HIGH

Senator Reed Smoot Says Ihat rres'
ent Initiation Amounts to one-third OF
the Wealth of the World on Basis
Of Values as Established at the Be-
ginning of the War.
This world, according to Senator
Smoot CUtah), the acknowledged con-
gress experts in such subjects Is no" IN
aated to the extent Of s240.OOO,OOO'Ooo
AS the sphere is only worth at pres
ont depreciated values of money about
1860 OOO. 900, 900, the senator finds tna'
the>infiation represents one-foarth the
whole status of the planet.
But that is not the worst OF II. on
tho basis of values as they existed be-
for the war caused imitation the worio
was worth about s7SO.O0O 100000. SO
that to-day imitation represents almost
one-third as much as the legitimate
valuation of the ball before the Ger-
mans started their abortive effort TO
capture 1t.
Starting with the figures the senator
outlined today to The Sun the scheme
of starting a gradual, systematic dena-
tion, on which he has been at WORK
ever since the war ended. He has been
in conference with many men OF al
fairs. and studied the legislative
and fiscal programmes OF as many
countries as have started developing
them and made the results accessible.
OF these the number is not large, ana
the senator is convinced that the united
States must lead the world in the ell
fort to restore a normal basis. AT the
best this will be a matter OF many de-
cades, perhaps generations.
In no event is it to be expected that
the former economic conditions can be
restored, nor can the old relations be-
tween money and prices be revived.
Initiation is here to stay, and business
in his opinion, will have to make up
its mind to resume on the new level.
Fiqures in Costs of War.
In making this statement that there
is now s24O, ,OO0, 900, 900 of imitation Sem
ator Smoot explained that he reached
this figure by adding together the cost
of the war, the devastation caused by
II. and the imitation of the worlds mon
ey stocks.
In 1914 there was little imitation,
comparatively speaking. Money was
on a sound basis, most Of the worlds s
business being on a secure gold stand
ard: and the public debts were COM
u to the wealth even Of the most
heavily involved nations. Today all
this is changed. Not only is the world
heavily involved in debts but it is GER
tain-and at this point the senator is
vigorously emphatic-to go on increas-
ing the measure Of Indebtedness and
therefore of imitation for consider
able, though indefinite future.
In our own county. for instance ne
warnes, there is certain to be disap-
pointment for any optimistic hopes
that governmental expenses will be re-
duced at any such rapid rate as that
at which they were expanded when
wars demands made it necessary 10
think and calculate in billions instead
of millions.
America, if proper financial policies
are adopted, will be able before long TO
strike a balance between outgo and IN
come, and then to begin gradual dis
charge of the debt. But on the whole
debts for a long time will continue ex-
panding.
Two Ways of Facing Problem.
There are just two ways in which
the world can meet the conditions II
faces" said Senator Smoot. Either
the nations must look the facts square
" in the face, recognize that they can
not carry the burden, and repudiate
their domestic debts, or else they must
impose a special levy on wealth that
will nearly reach the point of confisca-
tion. The world cannot live on It's
present plane always, and 1t will not.
I'm speaking of reputation | confine
il to domestic holdings Of their obliga-
tions, for believe that no nation would
be willing to repudiate debts owing to
the nationals of other states; that
would break down the whole fabric OIL
national credit. The levy on wealth
of which l speak as an alternative, Is
under serious discussion in the coun-
tries of Europe.
ITO meet the situation of this coun-
try and make our process of defation
keep step with that of counties which
may be forced to adopt one or other OF
these expedients l am working out
plan of amortising our debt through q
sinking fund. A few evenings ago
met with a group of important busi-
ness and financial men to discuss DIFF
ferent plans for administering such
fund.
"A sinking fund designed on basis
of q per cent annually would produce
750,O0O,000 each year, and return that
amount Of the debt. That is, it is pro-
posed to keep up the interest, and ir
addition raise from revenues enough tc
return each year "a per cent of the
present face value of the debt. / as
sumo for the purpose of this calcula'
ton that the aggregate debt is $780,
600, 100000. 1t will be found to reach
lust about that figure when all the
items are before us.
Legislation to be Mandatory.
"A p per cent annual sinking fund
payment would pay off the debt in 8
little under "a years; just about 2;
years nine months. 1t would be made
absolutely mandatory to invest this
fund in retiring the governments Sec
urities; it would not be permitted tc
he invested in any other way.
ION the same basis, a sinking func
of l per cent annually would raise
5000, 100000 year with which to re-
turn the debt. and would extinguisf
the whole in "A years.
"a fund of II per cent would raise
s450.000,O0O annually, and in a little
less than 32 years would wipe out the
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