The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1919-09-04

The per capita circulation on July
/, 1914, was $31.S7. On July 1, 1919,
it had increased to $54.2S. The gem
eral stock OF money in the United
States on the two dates was as follows:
July /, 1914-$3,73 IS, 500, 345.
July /, 1919-s7,5S8,473,771
Thus the actual stock of money in
the nation has doubled in the five
year period while that actually in
circulation has increased about two
thirds. To preserve the standard
value of the dollar, the country would
have had to nearly double its bust
ness during the period. There are
no figures at hand to show what the
expansion actually was, but a super
fetal survey does not indicate any
material increase. There have been
increases in some lines and decreases
in others, but the general observer
knows that the business of the coun-
try is not two-thirds larger than it
was in July, 1914. The basis of the
present financial policies and laws is
that they permit the automatic ex-
pansion of the volume of money when
it is needed and contract it when the
need for expansion no longer exists.
Under the federal reserve bank law
1882 2 .645 in emergency currency
was issued. The issuance commenced
August 3, 1914, but all the circula-
ton was retired before the end of the
calendar year, 1915. No other emer
eency currency has been issued. The
federal reserve bank, however, has
issued federal bank notes and federal
reserve notes, the total amount out
standing of which was $2,657 ,675,75
on July /, last. The secretary out
lines the impossibility of withdraw
ing any part of the federal reserve
bank notes and federal reserve notes,
in the following language:
The treasury department has no in
t%ention, nor, indeed, the power, to re-
tire or withdraw from circulation any
thereof, nor, as | am advised, has the
federal reserve board.
This currency can only be with,
drawn from circulation in accord
ance with the law, and can neither
be hurried nor delayed If the in
tlation Of the currency and the in
crease in the amount of money in cir
culation is responsible for the oppor-
tunity for making high prices. the
deflation Of the currency must be the
result of new legislation, except as
the compression of the volume is pos
sible under the automatic operations
of the federal reserve law.
This currency can only be with
drawn from circulation in accord
ance with the law, and cam neither
be hurried nor delayed. If the in
fation of the currency and the in
crease in the amount of money N cir
culation is responsible for the oppor-
tunity for making high prices, the
dehation of the currency must be the
result of new legislation, except as
the compression of the volume is DOS
sible under the automatic operations
of the federal reserve law.
1T must not be forgotten. either.
that IN securing redress from high
prices by artificial de1ation. there
Is danger of disaster. If the purchas-
ing power of the dollar is changed to
what it was in 1914, it is easy to see
that it will purchase but half or two
thirds the quantity it does now, so
that the burdens of the people would
be increased for the time being in
stead of being relieved. In the end,
prices would be forced to the level CT
the purchasing power of the dollar,
but the interim would be disastrous.
When both money and prices were
debated, conditions would be sound
and reasonably permanent. But eau
ton must be used in reaching that
result, else the country be swept into
a chaos Of hardships and bankruptcy
which would be ruinous.