The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-10-30
TOPEKA STATE JOURNAL
INFORM ALTON
Blu RE AU
FREDER1C ,. HAsKIN. Direoeaz.
WashlnGtca. y. C
HAVE WE TOO MUCH MONEY?

HAVE WE TOO MUCH MONEY?
Washington, d. c., Oct. 27.-So far
as you personally are concerned you
proba bly, return an unhesitating mega
tive; but concerning JUS all as ma
ton, the question is an important one
Some people believe that we have too
much money in circulation and that
! this abundance of the circulating me
dunn is one of chief causes of high
prices
The argument is plausible one and
| it has impressed many persons They
invoke the good old law of supply and
demand. If there is a great deal of
money in circulation in proportion to
| the amount of other commodities in
| circulation, then, they argue, the value
| of the other commodities as expressed
| in money will rise and the value or
money as expressed in these commodi-
| ties will fall.
| There is also a suspicion abroad
| that our currency is actually inflated
! that the proportion of the circulat-
! ing medium to the gold that secures
| it is too large. This last suspicion is
put promptly to rest by treasury OF
| ficials. They point out that every dol
i lar in federal reserve notes issued by
, a district bank to a member bank
| must be secured by the deposit of Az
! cents in gold and SO cents in nego-
| table securities. All of our issues OF
! currency are therefore adequately Sc
cured. The idea that our currency is
| inflated in the sense of being unsound
is a mere popular bugaboo and 9ne
which should he laid forever to rest.
| But the idea that our currency is
| inflated in size-that it is too big for
the volume of business and thereby
raises prices-deserves detailed an
swer. There is certainly no denying
that the purchasing power of the dol
lar, a thing we need, has decreased by
| half in a few years. If you have
| fixed income of fifty dollars a week
| it will only buy you half as much to
eat and to wear now as it would IN
1913. The goods have gone up, or
the dollar has gone down. Put it
| either way you please, the results are
| the same to you.
| Is this diminished value of your
dollar due to the fact that there are
too many dollars in circulation?
A question along this line was re-
! Gently addressed by Senator George
Mclean of the senate committee on
banking and currency, to the treasury
department.
| The treasury department states I'M
! equivoeally that there is no such thing
in the United States as currency in
| nated either in size or in value. It
goes even farther and states that I'M
der our present system of issuing coin
and paper money, there can be no such
thing as an inflated currency.
To get the facts definitely in mind,
! it may be said that money in circula-
ton means money in existence in the
United States outside the treasury and
the federal reserve banks This is the
money in the possession of the people
and used for the transaction of bust
ness.
On the first or July, 1914. just be-
fore the war broke, there was $3,41s,-
n o
/ l, 1917, on the eve OF our entrance
into the conflict, there was $4,f90,-
1 $4,000 in circulation, an increase of
more than half billion. On Deem
Der 1, 1918, which may be taken as
a date near the termination of HOSTILE
ties, there was s5,119.9S5, 600 in cir
culation-a cold increase of billion
dollars for the war period. Eight
| months later the amount had shrunk
to $4,790.S90,0 900. So, as matter of
fact, there is about one-third more
currency in circulation today than
there was in 1914. and one-sixth more
than there was in 1917.
The first point that the treasury
makes is that these increased amounts
of currency, under existing circum-
stances are not mutations. The United
States is a going concern and an in
| crease should be expected. Added to
the normal increase is the logical in
crease necessary in carrying on
greatly increased amount of business.
The amount of currency necessary
should be greater each year, ana espe-
cially in active years.
| Furthermore, if prices and wages
rise, from whatever cause, the amount
| of currency, under the present system,
has got to rise to keep up with them.
If a man were operating paint shop
and working ten employees in 1915,
and paying them an average of $40 a
week. he would have required 5000 on
a Saturday night. Today he pays
those men $40 a week and requires
, 5000 in cash.
The housewife must now take along
| a bigger roll when she goes to mar
} ket. The marketman must keep more
!, money in his till to conduct his busi-
ness. Whoever you are and wherever
| you live, the bulk of money that 1t is
: necessary for you to use is greater
. than it used to be. This means that
the mass of money In the nation must
be greater than it used to be. The
amount of currency, say treasury ot1l-
| Gals, has not increased to a greater
, extent than is necessary to take care
of changed conditions.
) Having presented these faots--to
: controvert the claim that the cur
step boldly Worth with the second
claim. They state that there viii
never be any initiation of currency
in this country, that the United States
has finally worked out aHd demon
strated the effectiveness of a currency
system which is truly flexible; They
I state that this is a goal toward which
: | this nation has been struggling since
the day of George washington.
The conditions under which the
Observation-Disclosures