The New York herald., 1921-07-26
Where the Gold Standard Fits In.

EINAR B. MORvIG or TOnSberg, Nor
way, like many other postwar scep-
tics, Graves to know just where the
gold standard fits into the economic
welfare of the world. He has written
to London publication to ask the
question, but his entertaining letter
is really an attempt to prove that the
world would be just as well fed and
clothed If all the gold were dumped
into the middle of the ocean.
So far as he can understand, he
says, lit is just the same whether
paper notes or gold coins buy the
necessities of life, as long as the
paper is considered good money by
all parties concerned, and trade may
in such case flourish more than ever
by help of paper notes and credit
advances" without any need for gold
or any hardship from the absence
Of 1t. And he further expounds this
conviction:
the value of paper notes. and this
may be all right, but have often
been wondering how a man with a
reasonable quantity of brain stuff
can consider this mass of cold. bar
rem metal. hid in the huge cellars of
the various State banks, as being of
-
the world, and as the only proper
omnipotent basis for the circulation
OF the commodities Indispensable for
human existence.
1T is fictitious valuation. and no
one can deny II, but this fiction may
be necessary in order to furnish the
economical bookworms with basis
for carrying on with mathematical
manipulations and statistics.
THE economical questions are
stuffed up with sophistry and sense
less self-holy brag. Social evolution
and logical revision of the eco
nonfic laws are imminent necessities
of the day. Moral sense, combined
with a proper valuation of the COM
modities OF the world, Is necessary
in order to contrive a new and
healthy function of the economical
apparatus. and / suppose the social
unrest will prevail and increase un-
I'll this baby is born and made At
for further development"
The writer OF this sceptical letter
is right in one thing; so right that
IL he had followed out the analysis
he would have answered all his own
questions. He says paper money is
as good as gold coins to buy the
necessaries of life 'as long as the
paper is considered good money by
all parties concerned" But what OF
the time when the paper money OF
one country is refused by the people
of another. or when, as in Russia, the
people within the country itself re-
fuse to accept the paper money
printed by their Government?
What economic baby" is going TO
be born, or can be born, which will
guarantee to these people that, II
they take paper money in payment
for their goods or services. it will
buy something they need when they
get ready to spend it7
Can Norwegian shipbuilder swap
vessel to a Kansas wheat farmer
for grain? Or IL the shipbuilder
choose to pay for his grain in Nor
wegian currency, can the farmer buy
ploughs in Indiana, fertilizer in Ger.
many or Chile, with the Norwegian
money?
Is there any certainty that when,
say, a million kroner of Norwegian
money was finally distributed among
the various sellers and purchasers,
they would be able to buy with II in
Norway exactly what they wanted?
Has Norway all the diversified com.
modities on hand that may be re
quired? II not. then her currency