The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1920-10-19
FRANC HAS A RELAPSE

! Last March 1t took nearly II French
| francs to buy dollar. From then On
the franc steadily improved until you
could buy dollar with about IL 1-2
| The French press was jubilant. They
predicted that the franc would 40 or
climbing until 1t reached par. Then IL
| began another relapse and lately has
| been staying pretty close to Is.
Frenchmen don't understand this. II
looks crooked" Why should not a
| franc be worth a franc In America?
Why should 1t not be worth 10 cents,
| instead OF z?
The American representative at the
| Brussels financial conference explained
| 1t. but was hardly thanked for his
| palms Any money Is worth only what
1t will buy. A dollar will buy certain
! amount OF gold. How much gold will
frame buy? There is the test. 1t
takes 15 francs to buy dollars worth
OF gold, 1t should not be forgotten
that during the war. when the United
States government suspended gold pay
ments the dollar also declined in value
In relation to foreign money that was
still on gold basis. When gold pay
back to par.
But the Frenchman objects in tho
course of time the franc will also be
redeemed In gold.
VIII 1t? II the bankers OF the world
were really confident that the French
government, within year, or Ave years,
or ten years. would redeem its paper
money at Its face value in gold, would
they not hasten to put all they could
scrape together into francs, and calmly
await the time to collect their 200 per
cent. profit?
1t is all a question of confidence, as
Mr.. Boyden explained. II we could be
confident that the paper money of gIGu-
rope would be redeemed, we should all
buy 1t and prepare to be mllionaires.
That sounds harsh and unfeeling, and
the French papers advised Mr.. Boyden
to so out and see the ruins OF northern
France and realize just how much
France has suffered. But Mr.. Boydcn
had been on the Hoover mission, no
had no need to be instructed In tho
sufferngs of the war. And there Is
probably no very large number OF
Americans who do not appreciate all
that has been suffered by the invaded
nations. American sympathy has been
expressed in gifts, loans, relief work.
But-and this Is what MIR. Boydens
critics should remember--lnvestmen
are never made on a basis of sympathy.
Too Much Paper Money.
The reason for tho depreciation OF
European paper Is primarily that dur
ing the war the governments found II
easier TO print bonds and bank notes
than to impose taxes, What would
have happened II instead Of saying to
had said, "pay?"
Many economists argued that a man
who had money to lend TO the govern
ment--money. In other words above
and beyond his needs-miHht Just as
well pay II In taxes.
But. II was argued In return, II he
lends II he gets a bond or a note, on
which he can secure n loan from the
bank.
Then. answered tho economists. he IL
not really lending nightingale Is
merely an intermediary. Go after the
people who have II, not those who have
to borrow In order to lend to the gov
eminent.
hut the contrary policy was adopted.
with the results that are now well
known. What the results would have
been under the other system cannot be
said with certainty.
The worst OF II IN that the borrow
Ing policy continues. For instance, al
though Germany has voted drastic tax
laws. the taxes are not being collected,
and the government Ia being financed by
forced loans in the shape OF additional
printed currency,
The automobile market has turned out
TO he nm excellent business barometer.
II is significant, therefore, that through
out Europe tho bottom has suddenly
dropped out OF Il. orders are being
cancelled, workmcn laid Off, factories
shut down