The Washington herald., 1921-12-18

w more and more to realize the importance
Of rchabilitating the currency OF Europe
in any genuine attempt to restore satisfactory
economic and industrial condition there, items
of interest from the strange, nightmare currency
- muddle continue to appear In Austria it has been
" discovered that the and two-crown notes now
cost more to print than they are worth currency
. after printing. The Bolsheviki met that situation
a long time ago by increasing the denominations
of the notes printed In Austria, further it is re-
ported that physicians outside of Vienna will no
longer accept fees in Austrian paper-currency in
Sstinc upon payment in wheat and having fixed
scale OF charges in wheat for their services. There
has been, recently, violent furry in Russian OK
change. The Soviet roublc suddenly declined in
value from about 10000 to the dollar to about
100000 to tho dollar. recovering, later, to about
100000 the dollar 1t is reported that some gold
has reappeared currency in Russia. Such an
occurrence was not unanticipated by economists
b who have rather expected that when paper cur
,rency reached point where it was no longer gen.
orally accepted boarded mctal-currency might
come forth. Yet. the amount Of metai-currency in
Is small and it is likely that enough metal
currency could be uncovered in Europe to supply
currency needs The league OF nations has minted
gold franc at Geneva. This is thought to be the
smallest modern gold coin Its weight is .o3225So5
OF gram. its value in American money being about
? cents Only one coin has been mnted it is
intended solely as a OF value 1t is stated
that the Soviet government is about to issue some
. sort of metal roubles. decreeing that each metal
rouble shall be worth 10000 paper roubles. The
circulating OF the Polish National Bank
reached 2Sooooo.ooo marks at the end OF Septem-
Der. These are some of the conditions and occur
in the European currency whirlpool.
Nearly every banker and economist has ia
vorite prescription for the European currency all
han
which shall issue an international currency backed
by gold-mostly American gold. Professor Cassell
OF Sweden, an internationally famous expert, warns
against a too rapid de1ation with the purpose OF
returning the gold standard and that gold is
now too variable to be good standard for cur
rency. He thinks gold should be stabilized. French
experts differ, advocating return to the gold
standard through gradual dchaton and through
reducing the pledged pretended gold value OF the
PAPER currency now issued. Henry Ford enthusiast
tically discovers energy currency and thinks it
NAV be panacca. Prof. Irving Fisher. whose
clever and perhaps practicable scheme stabilize
the dollar has been pushed out OF sight here, has
his solution. Meanwhile there continues the mad
tune OF the speeding government printing presses
OF Europe frantcay engaged in grinding out
and vet paper money-pretty paper money
whose value becomes each week more and more Of
an indefinite puzzle.
The report that, in parts OF Austria wheat
is being used currency recalls the fact that such
practice has obtained in Russia also. There it is
stated that in many transactions, the Soviet paper
money has been refused and trading has been done
in wheat In Russia, these trading operations have
been practically primitive barter; peasants have
exchanged wheat for goods which they needed.
Wheat has not really been used as a medium of
exchange to any considerable extent. Wheat is too
clumsy to be a medium OF exchange. 1t can never
be put in use money and be satisfactory. But
would this objection of inconvenience apply to
ourrency-a paper currency based wheat?
Gold is not convenient currency 1t is OBJ
jectionable for just opposite to that which
may be charged against wheat The bulk of wheat
necessary for in ordinary currency transactions
is too great. The bulk of gold necessary for ordi-
nary currency transactions is too small Gold even
in the United States where there is plethora of it.
has practically been abandoned as currency Gold
is used base for currency. For long time if
has been considered ideal as a currency standard
But would it be possible for Russia for Central Eu-
rope, to develop wheat standard which would be
quite satisfactory?
Prof. Cassel, referred to above states that the
value OF gold, largely account of the most alb
normal present distribution of gold has Auctuated
violently IN recent years That is it has fuctuated
in terms of commodities in general MEMBERSHIPS
OF life. He considers it longer ideal as a cur
rency he thinks could be restored by action taken
to stabilize gold. How stable is wheat and if not
naturally sufficiently stable, could it be stabilized?
There are big wheat crops and small wheat
crops. bumper crops and crop failures But if gov
ernments decided to operate under a wheat stand
ard great government elevators could be built and
maintained which would hold the government.
LII