Evening star., 1921-08-14
BY THOMAS n. MARSHALL -.
Former Vice President Of the United
States

n Vow that the season in
nj which prosecuting attor-.
neys are permitted to hunt
widows and demand of
them either to confess that they
killed their late husbands or give
reasons why they did not is closed,
it is possible that the public may
have time to consider a vital ques-
ton in the economic life of the re-
public and to crystallize opinion so
as to compel action.
We have believed the statement
that a dollar Is a dollar until the
statement has become almost an
axiom. Perhaps few kindergar-
ten remarks may disclose its falsity
and suggest the necessity of max
ing it true. We have been con-
founding a medium Of exchange
with a standard Of exchange: We
have stabilized every measure of
exchange save the dollar. Time
was when the yard was the grid
of the chieftain. II something had
not been done to standardize the
yard, business contracts for goods
entered into under President Taft
to be fulfilled under President VIII
son would have created a panic in
the cloth market. But the yard
was standardized and at all times
and in all places in America a con-
tract for a yard will inevitably pro-
cure the same length Of cloth. All
other measures save money likewise
have been standardized. The old lady
in the country store who gave man
n mint of shot for q pound on tne
theory that a pint is pound the
world round is no longer doing pusl-
ness.
In this kindergarten talk let us
keep in mind that we can't eat our
money; that its value consists In
what we can get for it. 1t is a de-
velopment brought about by the
needs Of modern business. do not
care how many dollars I can get
for what ! have or what l do; the
important thing to me is what can
get with the dollars / get. This
money business is just labor
saving device in the commerce OF
the world, and commerce, after all,
is barter. A fine illustration Of the
dificulties of barter in modern
business life was given by Lieut..
Cameron. touching his efforts to
buy a boat in Africa. He said.
"Syde's agent wished to be paid
in ivory. Of which had none: but
/ found that Mohammed Ibn Sahib
had ivory. and wanted cloth. Still.
as had no cloth this did not as
sist me greatly until 1 heard that
Mohammed Ibn Gharib had cloth
and wanted wire. This fortu-
nately possessed. So 1 gave 1bn
Gharib the requisite amount of
wire; whereupon he handed over
cloth to Ibn Sahib. who in turn
gave Syde's agent the wished-for
ivory. Then he allowed me to have
the boat"
In the beginnings Of commerce
the supply and demand were Just
equal and there was no need for
medium OF. exchange. But ctviliza-
ton changed this; barter became
too slow and cumbersome. It be-
came necessary to have q medium
Of exchange. and money was In
vented for the purpose. but its in
vention brought trouble. for money
stopped the equality of supply and
demand. AS soon as 1t was dis
covered that money might be used
to obtain what was wanted the
holder of 1t found that he could
and then that he could use it as
he pleased, buying what he pleased,
when he pleased and where he
pleased. But the man who had
goods, wares and merchandise had
to sell. il he expected to do bust.
ness, when and where he could
find customer. and largely at the
price which the customer would
pay. 1t thus became apparent that
the medium of exchange might be
used to disturb market conditions.
+ + Il +
Notes. bonds. mortgages, all are
modern inventions. They are in
clined still further to disturb pure
ly commercial transactions. Money
is borrowed quite frequently to
keep goods or the market. The
medium Of exchange does not in
crease proportionately with the in
crease of production. AS I recol-
left it, production In America has
increased only 4 per cent in the
last hve years, yet the currency
has more than doubled. To in
sure stability the increased expan-
sion of money-using the word to
include bank and other credits
should just equal the increase of
production. Unfortunately no way
has been found nor do I believe q
way will be found to guarantee
this.
It will get nowhere to enter into
q discussion as to whether the con-
traction Of the currency causes
low prices or low prices cause con-
tration Of the currency. 1t is
equally profitless to discuss wheth-
er expansion Of the currency pro-
duces high prices or whether high
prices are the cause of expansion