Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-02-13
FRIDAY.... FEBRUARY 10, 1872,
DOLLAR POWER DWINDLED.


Any man who owns n niece of
property and has good credit can
buy commodities by issuing for
them notes up to approximately
the value of property which he
owns, and in some cases can pass
his paper for even more, because
OF his good name and confidence
of recipients in his ability to pay
out, But when he duplicates and
duplicates the issue of paper, not
backed by anything, it will be
taken only at discount. That is,
he can buy commodities or prom
erty in less quantity, less wheat.
less other things than he secured
when limiting the obligations he
assumed, and when there was Sc
curity back of them. The purchas-
ing power of his notes decreases as
the issues grow.
Financiers are now demonstrate
ing that the purchasing power of
the American dollar has decreased
just in the same way, as initiation
of currency has increased. 1t is
pointed out that the cost of living
has increased &2.2 per cent, on the
average, since the war began, and
that the dollar purchases but S2.7
per cent as much rs it did before
initiation began by putting ont
nearly four billions of paper money
through the federal banks because
of war conditions and expenditures.
Increase of money" of govern
ments normally is no greater than
the increase Of gold reserves. With
so much gold in treasures, and
auxiliary agencies like banks, paper
currency and treasury certificates
promises to pay, are restricted to
gold reserve Gin some countries
silver), that is the basis upon
which such paper is issued. But
when war started and gold could
not be exchanged readily in COM
merce between various nations, and
was insufficient for expenditures,
initiation with paper currency be-
came a necessity In some coun-
'Iies me issue was limited only by
the material needs of war time.
In the United States. figures sup
piled by the treasury department
silo" ilo'e cIrculallon AT $l'o1O'-
nm in, T. 4
ooo'Voo III 'ulle' IVA $0'O4"'Voo'-
IVY "a November, lSio' ana w.
70 'uuo,ooU III Decehlper' 1919.
al ~ = the GoIa reserve against
i'ote circulation was $l'o25'oo0'ooo,
Whlie IN 1913 II was %2'lOIOOO,OOO,
anu t'e ra'io Oh sold 10 notes was
9''U per cent III I9I4' o5,z per cent
IN november 1919 ana a2.S per
SeiiI III DeceIi'peI' I'I9' the llg-
ufts Vi notes pelils exclusive OF the
soiu ana slNer cerlllIcates' Whlch
are coiiS'ueTeu merely as ware
houSe receipts Tor an equivalent
amount OF metal deposlted with the
LlIlteu states treasury
Inc race Value OF the paper cur
rehcy OF thlrty pflhclpal countries
oil tile "orIu aggregate $7,250,OoO,-
oVV IN 1914, $40,O0O,OO0, 900 at the
oate Oh ihe afmlstlce ana $oo'00O,-
oVO'oo0 IN December 1919 And
these flgures are exclusive of the
% 4,uOO'OoV,O0o or paper ISSUED by
t1e SOVIET government oil Russla'
ooiiles llhahclal experts compute
the increase OF paper currency IN
me world since the war started, as
0o0 per cent though the total gold |
reserve was increased but 40 per
cent
II Is argued that complete della
tion shouid be made at once TO
prilg down hlgh prices and enable
uollaf 10 buy as much as 1t for
merry secured But no such dras-
Tie course could be adopted With
OUT bringing on panic conditions
Win pfosuallon OF industries and |
business pullt up during the period |
OF IIush money The process will
nave 10 come gradually when notes
can ne retlred Wlthout croWdlhg |
the interests ana people TO whom |
me leueral banks extended credit
py issuing NOTES, ulrect or through |
ileiiper pahks mat EXTENDED credit !
ana redlscoumed 10 the federal
banks
rms country may never reduce
circulation TO the pre-War basis,
uhder enlarged operations that
nave come about and the increase
OF debt and taxation per capita,