Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-05-09
BY l. A. FLEMING.

During the past week there has
been great pressing home Of the
world need of conservatism. defla-
tion and great care needed in further
extension of credit. People have
come to believe that it is necessary
indeed. the need is so great That
| it needs but to be explained to con-
vince the most skeptical that the hue
and cry at the present time is not
a needless scare.
According to the very latest sta
tistics. prepared by o. P. Austin.
statistician of the National City Com
pany. the paper money now in cir
culation. other than that issued in
creased from $1,000, 100000 at the
opening of the world struggle. to
$40 000,O0O.0OO at the time of the
signing of the armistice. and to
S56. 000. 100000 now.
National debts of the world have
grown from $4,000. 100000 in 1913 to
$265 200. 100000 in 1920, while world
credits. another form of imitation,
have increased enormously
Meanwhile the stock of gold in the
world has increased but $4,000. 100000.
The ratio of gold to paper currency.
which was 20 per cent in 1913 and
is per cent at the close of the war.
is now II per cent. The increase in
world paper during the war period
has been $4,000, 900. goo, and since
the war $4,000. 600. OOO-just about
one-half of the war pressure in
about one-third of the time we have
been ostensibly a peace.
The worlds budgets are five times
the pre-war days estimates and the
annual interest charges are now So
900. 100000 as compared with $1,15O.-
600. 900 before the war.
Back Up Federal Reserve Board.
These facts and figures but back up
the Federal Reserve Board ie its de-
mand for reduction in credits: in eff
forts to secure the elimination of the
billions of liberty bonds from func-
tioning as money through the use of
the discount privileges of the regional
banks. Higher interest rates are be-
ing made on this class of securities
and the sliding scale is also being
used to force banks to liquidate
through the increased interest
charged on rediscounts.
Bankers themselves see the neces-
sity for this action and have forced
the liquidation of loans secured by
liberty bonds whenever possible.
Evidently the general public also
realizes that large funds are neces
sary to keep business going and very
heavy gains have been made in de-
posits-the District of Columbia be-
ing especially frugal IN TINS matter Oh
saving.
1t is within the possibilities that
some of our big gains in deposits have
come from government employees sens,
ing the danger of loss of position.
Deflation is the order of the day. 1t
has started. but it has relatively far
to go, and the conservative men of
the nation would like to see it con-
tinue, not in a hasty expensive de-
fation such as Wall street recently
staged, but a slow. gradual reduc-
ton. without apparent injury to the
interests Of business.
Protest Against Taxation.
CR4ted protest has been made dur
ing the last week against any addI-
tional taxation, and especially against
the proposed sales tax urged to pro-
vide the proposed soldiers bonus.
This nation is suffering to an ex-
tent that many do not dream Of as
result of present taxes.
Efforts have been made to secure.
if possible. reduction in excess
profits taxes. and this has been urged
by former officials of the Treasury
and students of economy.
Men who have heretofore cheer
fully borne their part in the matter
of paving their share of the nations
expenses have not hesitated to go on