Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1920-05-19
HIGH PRICES AND NUMBER Q
DOLLARS IN CIRCULATION

HIGH PRICES AND NUMBER OF
DOLLARS IN CIRCULATION
On the last day of last month
the American Academy Of Political
Science held a meeting at the Aston
Hotel in New York City. A mem
Der Of the firm Of J. P. Morgan & Co..
was one Of the presiding officers.
Those in attendance were represent
tatives Of the same interests that rob
bed the producers ofSthis country dur
ing the latter part Of the last century,
by shrinking the country's circulating
medihm far below the requirements
Of ordinary business. The object OF
the meeting was to devise some plan
by which the money OF the country
could be reduced at least one half;
or, better still, II it could be cut
down to the good old level Of 1896,
when the business interests of Amer
ica burned at the stake, and big fin
anceers reaped profits that would
astonish the most rapacious profiteer
I Of present day times.
Quite contrary to their contentious
IN 1896, they are now firm believers IN
the quantity theory Of money. quits
willing to admit that ''the larger the
number of dollars the less the value
OF EACH, and the less each dollar can
buy;" and, Of course; the converse Of
this statement is true. the fewer the
number Of dollars the more the value
Of each and the more each dollar can
buy. The men who own dollars can
make them dear by reducing the num-
Der in circulation. and that will make
the products Of labor cheap. There
was no. disagreement between them
about the magnitude Of their gains II
half Of our circulating medium could
be squeezed out Of circulation, nor was
there any attempt to-dissuise die fact
that "The operation would surely be
painful to some. But when 4, came
to the FORMULATION Of . program that
would bring about the desired re-
suits. .ths5 ess Wholly unable ia
agree. ll ! IL ksr shsdl6
differeit Do. The pr6c eedines 81
the meeting rsad somewhat like the
fable o. the mica and the cat. The
mice ali agreed sblt there should be
= bell on the cat sbut how to attach
the bell to the cat caused serious dis-
agreements.
The discussion Disclosed a N
generally known. s III Aimee ~ g
tice was signed the enormous aum 81
1900, 100000 in gold has been sent out
Of the country. but that did not pro-
duce the desired results. The Federal
Reserve Act has 50 changed our finan-
cial conditions, that the loss Of few
hundred millions of gold does not
alarm the banks and cause panic as
It did in the bad old days when Wall
- !, J.
Street dictated the financial policies
Of the Federal government. Attention
was called to the fact that the Federal
Reserve Banks could now make dol
lar do so much service and support so
much credit, that heavy expectations
OF gold had little effect upon the vel
nme Of money in circulation. It was
also stated as fact, that 1t was too
late to reduce the circulating medium
OF the country by raising the discount
rates. High rates of discount might
stop further expansion, but could not
undo the inflated conditions already
here.
Many seemed to think that the banks
could reduce the volume Of money in
circulation, by refusing to make loans
for speculative purposes, but no one
was able to explain how the banks
could be induced, or obliged to re-
fuse to make loans to financially re-
sponsible merchants, jobbers, manu-
facturers and retail traders, who are
now enjoying the prosperity Of infla-
ton. Since the enactment of the Fed
eral Reserve Act the banks Of the
country are not at the mercy of any
private interests.
The most feasible plan suggested. In
behalf Of the interests represented at
the meeting, was to try and get con-
troll OF the government again, and have
the strong arm of Federal power do
some strong-arm work in their behalf.
Even that plan offered no very allur-
ing prospects. The Democrats, while
desiring at all times to be just, have
never at any time been on very friend
" terms with the scheming, scarce
money advocates. And hatred OF that
class, rather than unfriendliness, de-
scribes the attitude Of the Johnson
wing OF the Republican marty