The New York herald., 1922-02-20
Would Back U. S. Green
backs With Unit of
Energy
ROBERTS RIDDLES SCHEME
Banker Also DenOunces Ford
Project to Finance Muscle
Shoals as Dangerous.

Thomas A. Edison is out with a new
QUESTIONABLE, addressed this time not
10 college boys under suspicionsof not
knowing all they should, but to bank
ers and ecopomists. Mr.. Edison sub
Tnits a QUESTIONABLE Of twenty-six
parts to support the stand that he
has taken along with his friend Henry
Ford that natural resources are a per-
fectly good basis for Federal currency
--as good as gold.
He asks the financiers and econo-
mists Of the country to give him their
opinion regarding variety Of ideas
springing from his and Ford's concep-
ton of water power and such natural
assets as proper security for paper
money.
His first question is: What in your
opinion, would be the approximate mar
ket value of troy ounce of pure gold
II all the Governments of the world
should demonetize it?" Then he passes
on to questions as to why currency is
sued on basis Of so per cent. of the
value of necessaries OF life stored fin
Government warehouses would not be
sound money; why the equity retained
in the warehouse goods could not be dis
counted at commercial banks.
Currency and Water Power.
He asks how there could be imitation
OF the currency If paper money were to
be issued for only so per cent OF the
value Of necessaries of life in the Gov
ernment warehouses; would the far
he n al,,,a
a system at their disposal, and would
there be any greater danger from over
issuance OF paper money under such a
system than there is nowadays, when
there is an overissue on the basis of
gold?
He asks too IL currency issued on the
basis of water power owned and leased
by the Government be sound money, and
1f such currency would not have value
as great as the 800, 900 first mort
gage bonds of the Union Pacific Rail-
road. If the answer is that such cur
rency is not sound money, Mr.. Edison
demands to know just why
He also wants to know IL gold could
be demonetized in the United States at
some future time. except for paying
international balances, and a national
currency established based on real
wealth, as stated. without real dis
turbance. Would currency of the new
character increase or decrease banking
profits? His curiosity then turns to
Germany and he inquiries, with Germany
holding much gold still, if she is not
yet on a gold basis.
Meaning of s.Tiat Money.
He wants to know IL the words fiat
money" mean that money not redeem
able in gold at par Is fiat money, and
he suggests that, if this assumption is
correct no nation ever had or ever
W.. have enough gold to redeem its
currency. He inquiries what value gold
can have as standard il the cur
rency issued against il is constantly
in excess of the gold whose value is
constantly varying. He closes his ques-
tonnaire with this:
Germany has issued and is now is
suing enormous quantities of fiat money.
This appears to be serious. yet all her
people are working furiously America,
its is said, has no fiat money. Four
million men are idly living off the work
ers and we have depression in business.
The same is the case in England. Point
out why this is so and what will prob
ably be the final result"
In connection with Mr.. Edisons ques-
tionnaire. George 10. Roberts, vice-presi-
dent of the National City Bank, said
"A Government cannot produce wealth
by any different processes than indi-
viduals. 1t has no magical powers 1t
cannot create something out OF nothing
Neither Mr.. Edison nor Mr.. Ford see
any use for gold as money. The for
mer says that what is wanted Is "a
unit of energy as the standard of value
If q currency note was printed to rep
resent 'one unit OF energy nobody
would know what IL was meant to be
worth. Even q note which purports
TO be worth one dollar would have no
definite meaning until the word dollar
was defined The dollar gets its meaning
frnm the fact that It contains 2223
- lins Of gold. The nations have gone
through a long process of evolution TO
trade. and have by common cnosens
accepted gold as such representative"
Mr.. Roberts denounced the Muscle
Shoals project--the proposition made
by Mr. Ford that the $4,000, 900 re-
quired to complete the plant be pro-
red. not by bond issue or by taxa
SS,n. but by printing paper money to
- at amount and using II to pay for
labor and materials--as dangerous and
unsound
1T Is an undisguised proposition"
said the banker. ito finance the Gov
ernmcnt by printing paper currency,
differing in nothing but degree from the
policies that have reduced the cur
rencies of Central and Eastern Europe
10 the border Of utter worthlessness. II
Is unsound and dangerous from the be-
ginning. and the saving OF interest on
s30.000,000 would be nothing In COM
parison with the risk incurred in adopt