The Alaska daily empire., 1921-08-09
RECONSTRUCTION OF MONETARY SYSTEMS OF CERTAIN NATIONS
 TO HELP ESTABLISH NORMALCY

BUENOS AIRES, Aug. 9-Recon- struction of the me>le,ary systems Of those countries whose currency has depreciated, on the plan followed by Argentina in 1899, iis recommendei ei by Carlos A. Tornquist. international banker. who was Argentine delegate to! the Brussels financial conference last year ts
 Adoption of this plan. he told mem bers Of the American Club at luncheon here. had fixed a perman ent value for Argentina's then fluct- uating paper currency and quickly enabled the country to emerge from monetary chaos into economic sta bility and prosperity. Many Of tho leading men in Germany. he said. were already in favor of adopting monetary reform patterned after Ar gentinas.
 Explaining the mechanism of the plan, of which his father was the author. Senor Tornquist said under the Conversion Law of 1899, by It WdS icu lnlO ClLtAN, t value of A cents gold was fixed fof the paper peso and the national if nancial institution which the law created was authorized to deliver one paper peso in exchange for that sum in gold and vice versa. The value, he said, was fixed very much below par, because the depreciation of the paper money had become a permanent one and because values had become adjusted to the depre. citation. that is, to say. that, apart from the fluctuations lia to be produced by abnormal causes; the real value of the paper peso meas ured in gold was A cents"
 Public Responds to Law
 The public immediately respond ed to the law having confidence in the plan, with the result that the value of the paper peso became more and more stable and it ceased com. pletely to fluctuate even when the country had obtained only a modest stock of gold. This stock has con stantly increased, from barely S3,000 in 1902, to $90,000,00 in 1905, to $470 100000 in the present day. Un- covered circulation of 293 ,000,00 pa per pesos was assimilated and placed on parity with the emis- sions subsequently, made on gold basis. Today. he said Argentina had paper circulation of about 1850, 100000 pesos, backed by a me tallic guarantee, which. according to the rate established by the law, amounts to 80 per cent.
 'I believe he continued, that the existence of such a high proportion of yellow metal gives me the right to affirm that Argentine money is whole world"
 Production MultipIies
 The result had been that from the time of the sanction of the law, for eign capital had flowed into the country on a large scale, production multiplied, commerce attained extra ordinary proportions, immigration increased, a~ntl Argentine produc- tion today is one of the essential factors in the worlds markets in providing foodstuffs for mankind and raw materials for manufacturers"
 Senor Tornquist advocated as the first remedy for the European eco homie disorder, adherence to the n a . conference for strictest economy. sup pression of subsidies and economic barriers, the reduction of armament expenditures and suppression of un- productive works and even certain productive.
 "If they will follow these sound recommendations from the confer ence of Brussels" he continued, "it is my opinion that many countries will in a relatively short space of time, be able to place themselves in a normal economic condition, under which their production and consump- tion will be maintained in a pro- portion permitting the liquidation of the obligations contracted by req son of the war. Then. in my opin- ion. will be the time for these ma. tions to begin to think of readjust- ing their monetary systems.
 . New Plan Feasible
 "It does not appearsto be possible to effect this reconstruction of systems by means of dis imitation for this would be a slow process and would not do away with the fluctuations in the value of money; and. worse still. it would impose completely unnecessary sacri- fices upon industry. commerce and production.
 "On the other hand. I consider the Argentine example perfectly feasible for many countries. Our conversion law, its origin. it's result, its eco homie effects, I consider a subject of great importance and great prac- e. trsA