The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-01-26
WORLDS PAPER
MONEY EXCEEDS
l914SEVENT TIMES
Year of 1920 Faces Flood Of
Paper Currency With Gold
Reserve Far Below Needed
Amount.

The year 1920 faces world flooded
with paper money, The paper currency
Of 50 principal countries Of the world
81 the beginning OF the war agEre-
gated a little over seven billion dol
lars; at the end OF the war, November
1918, IL was about 80 billion dollars.
and in December, 1919, u totalcd Of
billions, these figures being Of course IN
very round terms and exclusive OF the
currency issues OF the Bolshevtkt gov
eminent, which alone are estimated al
o. billion dollars. The gold reserves
of the 30 countries 10 question aggre-
gated In 1914 little less than five bill
lion dollars. in 1918 a little over seven
billions. and In 1919 slightly below the
seven billion dollar line, The ratio OF
gold reserve to outstanding notes ~ the
80 countries in question was, in 1914, 90
per cent, by 1918 il had dropped 10
1874 per cent. and In December, 1919,
was 1871 per cent,
The woriu paper currency at the date
OF the arnlstiCe was more than iiFe
times as great as at the beginning OF
the war. and one year later. December,
1919. was seven times as much as at
the beginning OF the war The actual
increase during the year succeeding the
armistiCe was OVER 10 billion dollars,
or a IS per cent increase over that sN-
listing at the end Of hosulues. Inc
for which details are available, is seven
times as much as at the beginning OF
the war. while the gold in the Coun-
tries In question has increased less thAn
per cent meantime, AS consequence
the ratio Of gold to paper has fallen
from 40 per cent 10 1871 per cent
The central powers, Germany, Aus
tria- Hungary. Bulgaria and Turkey
had at the beginning Of the war about
$500 900 900 Of gold ad $1,000 100000 Of
paper. at it's termination they had
s6ss 900 600 OF gold and Si2,a05, o0O, 600 OF
paper while at this date little over
one year after the armlstiee, thelr
gold had fallen 10 $32T0O0, 600 and their
paper circulation advanced to SlS,dL-
coo 0n0 Their ratio Of gold TO notes
was at the beginning Of the war 49,
per cent, at the end OF the war % per
cent. and at the present time II per
cent.
the allies taken as group, which
began the war with IS, 1853, 600, 600 OF
gold and S. 900, 900, 900 OF paper, had at
It's termination $5,2i7,000000 Of gold
and S25 600. 600 600 Of paper and at the
present time s5,07l 900 OF gold and
$50. 500, 600, 600 OF paper. The ratio Of
gold TO notes was at the beginning Of
the war 76,6 per cent, at It's termlna-
tion a0s per cent and at the present
time I'LL per cent,
Nest Of this increase both during ana
subsequent TO the wal occurred Of
course In the countries participating
in the great conflict,
Taking the 20 countries and col
oniea, which were in greater or lesser
degree participants In the war their
paper currency in July, 1914 was in
round terms six billion dollars; In No.
vember. 1918, thirty-seven billions, and
these figures being again In extremely
round terms. Meantime, their stock OF
gold when taken In the aggregate
showed but n small Increase, from four
and one-third billions In 1914 TO little
less than six billion dollars In 1918
and less than 5Is billions in 1918
Their ratio. as a grC1P;; Of gold elrea.
IN November, 1918, l5,S per cent, and
In December, 1919, ll,2 per cent. In
certain countries, notably those OF the
interior Of Europe, including the cen
tral powers and Russia, the ratio Of
gold to notes fell with much greater
Austria Hungary from $40 per cent to
about 0.a per cent; Russia from aS per
cent In 1914 10 approximately I per cent
ut the date OF the advent OF the Biol.
sheyiki: Germany from practically u
per cent in 1914 to 3,5 per cent In 1919
Among the European allies the reduc'
ton In ratio of gold 10 notes was also
notable, but less dramatic than that Of
the central powers, the drop in ratio
of gold to notes being in the case OF
France from 81 per cent in 1914 TO ii,2
per cent at the close OF the war, and
sc per cent In 1919 Italy from 20 per
cent In 1914 to rs per cent In 1919,
while in our own case the ratio OF gold
20 notes dropped from 1915 per cent IN
1914 20 $50 per cent in 1918, and 62.3
per cent in 1919.
The neutrals OF course Jared better
- a. -
did those participating In the war,
though he total Of their paper figures
did increase from $lle6, 900 600 IN tho
eight countries for which figures are
available to S2,42i .000, 900 In 1919
though the increase OF gold was still
larger nroportionately from I5l6, ,000
In 1914 TO 81, t5l ,000, 600 In 1919, bring
ing the ratio OF gold to notes In this
group of eight neutrals from A,3 per
cent IN 1914 to sac per cent in 1913.
The most astonishing, not to say
alarming, feature OF this growth OF
world paper currency and reduction In
the ratio Of gold reserve thereto, DC.
following the war. II was Of cours,
necessary that the governments par
ticipating In the war should have iargt
quantities Of currency, and they did. AZ
Is shown from the fact that the paper
currency Of the % countries In question
TO s37.2St 000. 600 at the end Of the war
November. 1918. though why Il should
have been necessary TO add another
II billion dollars Ia the year following
the close of the war and bring the
grand total OF December, 1919, up tc
s4s.369, 600 0o0 Is difficult to understand
perhaps incomprehsnsible. especially
when We realize that none Of this in.
crease Of II billion dollars In the Il
months following the armistice included
any OF the "a billion dollars Of paper
emitted by the BolSheviki government
from Its establishment in October, 1917
to the end Of 1919. and which is Dc.
scrlbed by persons familiar with con.
ditions in Bolshevik Russia as having
no gold backing and therefore "abso.
lutely valueless."
Still another enlargement Of IN,
worlds circulating media Is the increase
In world national Indebtedness, for o.
course the bonds and other govern.
mental promises to pay. while not q