The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1922-08-24
NO SHORT CUT TO
GREATER WEALTH
AMERICAN BANKERS EXECUTIVE
IN WARNING POINTS OUT
NEW ECONOMIC DANGERS.
FIAT MONEY PROVEN TO Be OELuSON
Russia is Held To Be Horrible Ex-
ample of Finance That Has Run
Mad.
BY F. n. Shepherd, Executive Manager

BY F. N. Shepherd, Executive Manager
American Bankers Assn.
Editors Note: F. N. Shepherd, eX-
ecutive manager for the American
Bankers Association, knows money
which is to say, knows the economic
condition of the world in general and
the United States in particular. Few
people realize the trend here and
there in this country to upset the pre-
sent system and substitute other sys-
TENS that on their face hold forth
great promise but in reality-but read
what this expert has to say.
On this good old boat we call the
United States Of America there are to-
day no small number of economic
mutineers, who, without any particular
thought for the rest of us, fairly make
the boat rock in their effort to grab
what looks to them like life preservers
in the form of government aid, special
privilege, more money and cheaper
credit.
We should see that these facts are
given consideration for we are all in
the same BOAT and will surely weather
the storm or go down together.
They nave not only d~isregarded pro-
perty rights; violated contracts; ap-
propriated the accumulations of labor
and savings of individual effort, but
probably worst of all in it's ultimate
effect, have drowned the hum of in
dustrial machines producing disable
goods for the people by the mad roar
of the printing press turning out rubles
by the trillion.
If there ever was a horrible example
from which we should take warning
here it is-and yet, no inconsiderate
number of our people are clamoring for
fiat money and lots of it. They, too,
would defy the teachings of history
and the warning of human experience.
Upon the advent of Lenine and Trot-
zky the printing press was speeded up.
Why bother with a gold reserve when
it was so easy to turn out paper rubles
bearing the government imprint? For
a viii llluSO oCCllCo W 81 dlOh6 ulCA-
rily and the goose hung high, but today
it literally takes a bushel of money to
buy a bushel of wheat-if you can get
anybody to accept the money.
The report before me shows that on
April 2Sth the paper money in circula-
ton in Russia had reached the pheno-
menal total of seventeen trillion rubles.
One hundred billion more was being
printed every day. Prices in Moscow
had risen until it took 10, 900 rubles to
buy a pound of bread, and 100000 rub
les to buy a pound Of steel. In the
private money market in Moscow, the
American dollar brought 2,75O, 900 rub
les, and the pound sterling more than
r. OO, 900 rubles. A point has been
reached where it will be impossible
to improve the situation without re-
pudiation and establishing a new cur
rency which will be recognized
abroad.
The present condition in Russia is
not unlike that which existed in
France over a century and a quarter
ago under the Revolutionary govern
ment from 1871 t 1896. The people
of that day thought they would take a
short cut to economic salvation
through utilization of the printing
press. Although economists warned
against the expedient with it's newt
able initiation of values and onse-
quent depreciation of the circulating
medium, they decided they would ls-
II only 400, 900 !ivres. called assig-
mats, because they were based upon
not only the government fiat but the
safest security in the world, the pro-
ductive lands confiscated from the 10
bility and the church. A fine security
they thought, and they made pro-
vision in the form Of an interest
charge for the retirement of the is
sue.
No Short to Great Wealth Continued.
But what happened? After the
first faint stimulative effects, the de-
preston sunk lower han before, in a
few months, when the effects Of the
100000 livres wore off, they decided
to issue 500, 900 more and make that
the limit-a total of 1900, 000-but this
had only temporary effect. They went
through the anne experience again
and again until they had issued a to-
tai of forty thousand million. The
money became so nearly worthless
that they issued the same thing in a
larger denomination and called it a
mandat-a mandat being the equiva-
lent Of thirty 600 assignats. They
ran the full gamut of absurdity, and
finally collected the paper, plates
and presses together one morning and
burned them in the presence of the
people.
And what were they doing in this
country just a few years previous to
that time? To recall the name Of