The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1921-12-27
MUST WE SCRAP ECONOMIC LAwsy


MUST WE SCRAP ECONOMIC LAwsY
Tho most amazng indication Of tho chaos Mt
tending our immediate times is the alncrity win
which the Ford- Edison ideas ot finance are
being accepted. hitherto sound economists arc
coming forth 10 support these two vislonnrles
who arc as much tainted with scnahnoss az
they arc inbucd with patriotism.
Rcsrdioas Of the space required. Tho world
rcproduocs the following from the Manufactu7-
ors Record. Tor the purpose ~ showing how
intellectually is willing to compromise with ex-
pcdcncy Edmunds cannot possibly accept the
rno invoked bv Ford aud Edison without re-
iectiug every law Of economies he has cherished
throughout his entire life. Yet he gives these
two men ubsolutiou and confcasos the possl-
billy Of HIS own miHtokee
Tho world presents the remarkable brief
without any such conccsslon. 10 rcaffirms ~
conviction, that " Edison and Ford are right In
tho case Of Muscle Shoals then an textbooks on
economies, Groshams law and every other
hitherto accepted sound theory Of finance, are
worthless:
Henry Fo.d ls probably wrong when he
Gays that gold IL the cause Of war. The lure
Of wealth undoubtedly breeds trouble but
this would be true whether the visible cvi-
dence OF wealth happened to he gold
form OF money based on some other unit.
Money as the root OF evil does not mean
particular Kind Of money Men fought for
possessions long before there was any such
thing na coinage,
We have scon a report to the effect that
Mr. Ford is willing to accept nou-interest-
ing-bcaring bonds in connection with his
Muscle Shoals proposal If he is willing
to accept such bonds and complete the en-
terpriso, we do not know that IT IL within
the mouth of anybody to object It Is not
HItEF rtHrfl Ian N.auE
tractor expressed To this newspaper the
thought that the government, in undertak-
Ing Internal improvements, should pay for
thom with bonds that bore no Interest
A chief idea OF Mr.. Ford appears to be
that actunl currency based the energy
developed by such an improvement as that
at Muscle Shoals would be backed by
fundamental earning power Inherently bet
ter as basic unit than gold itself There is
nothing very startling about this theory.
Fundamentally the Identical theory under
lies our issuance OF federal reserve notes
Theae notes are issued, In. theory. to cover
business transaction In process or com
pletion. bank makes n loan on cotton, 1t
then redscounts the note and gets federal
reserve notes In exchange. When the cot
ton loan X paid, tho notes are retired. II
is nothing more than the employment OF
tax to lift n business load from spot In
time to another In tmc--from September,
say to April.
suppose 81 900 In currency were is-
sued based on the earning power Of Muscle
Shoals. suppose the unit earned mot
total 100000 each year which would be
turned In to the treasury and 100000 of
the currency retired, In ten yeats the en-
tire issue would have been called in. In
principle. this Is nothing more than what
normally happens in the case of federal
reserve note. except in the element OF time.
As 10 the safety OF the earning power dan
ger from earthquakes, Industrial paralysis.
etc. the risk would be greater, with
number OF projects, than is usually taken in
of n note.
The Significance of the Ford proposal.
however, does not lie In the likelihood of It's
acceptance Rather may IL be interpreted
AS an indication of the growing conviction
of A number of business men and ccono-
mists that tho time is approaching for a
serious. very deliberate and exhaustive
study of the whole system OF currency In
accordance with modern concepts, with the
idea of discovering whether or not the sys-
tenn which was sufficient for the require
ments of our ancestors may not, perchance.
be inadequate In the present day and gem
Grafton. Mr.. Ford feels that something IL
wrong and that is Just the way numbers OF
other people think. But to attempt AZ this
time to diagnose the disease completely
and offer a new system that would be per-
feet or an Improvement would be rather
| daring undertaking,
There are 10 substitutes fer the positive
virtues OF honesty energy. Woodworking
and providence nation cannot be made
rich by edicts and when money is made so,
easy that anybody can get 1t In quantities
II will be correspundingly worthless. But
there is great deal of difference between
easy or fiat money and "a money system so
attuned to the necessities of the age that
the deserving man is not unduB penalized,
| and 80 administered that no set of men can
| arbitrarily manipulate the system 80 as to
bankrupt the weak and multiply the riches
! OF the wealthy Sound money and domoc-
| racy are not contradictory conceptions. The
idea Is growing that perhaps the very con-
cept OF money, as the bankers know ii, la
antaponistic to the theory OF democracy as
practised IN the United states. There Is TOO
much OF tendency to employ control OF
credit as instrument OF general dis
This newspaper will never advocate any
system OF money that is not thoroughly