Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-08-25

Washington, d. c., Aug. 1.-THE
proposal Of a great gold loan to EUROPE
"a vast sum of perhaps one OF tMo
billion dollars to be divided amohs .he
nations of Europe having the mcst
severely deprecated currencyIpeIr .
sistently refuses to be snelVeu. M
view of the fact that European aires
already owe the United States ZONE
ten billions of dollars, the natural eaIay
reaction of most Americans 10 Tie p.o-
posal is that it is out OF the ques,5o n.
to throw good money after pau. nuut
only by distinguished Europeans pus
by thoughtful Americans.
The theory of the plan is this: Eu,
rome owes us ten billion dollars n
cannot pay because she has too niue
capital with which to start her lnous-
tries: therefore if we lend her, say, TWO
billions more, she will be able to start
her industrial machinery, make money
and pay back not only the new TWO
billion loan, but the ten billions also.
The situation is likened to q man
who has a mechanical piano. lt mas
cost him a lot of money and he is anx-
ious to hear a tune to get his money s
worth. First, he must put q nlcKei
in the slot before the thing will func-
ton.
The reason it is suggested that the
American loan be made in gold is that
gold is what Europe needs more tnan
anything else to form a stable basis
for her deprecated currency. Inc
reason that an American citizen can
take a piece Of paper marked one dol
lar to a store and get one dollars
worth of potatoes is that everybody
knows there is one dollar in gold some
where in the treasury with which 10
redeem that paper. The reason a
German cannot take q paper marx 10
his store and get the old pre-war
marks worth of potatoes for 1t Is that
everybody knows the German treasury
hasn't gold enough to redeem more
than q hundredth part of the marx.
Therefore the paper mark becomes
worth only what the gold behind 1t IS
worth, or perhaps a trfle more IL
the gold behind American money dis
appeared. American dollars would de-
~preciate lust as marks have. Indeed,
during and for some time after the
American Civil war the same American
paper dollar that is worth 100 cents
today was worth less than % cents
because there was only 90 cents worth
of gold behind it.
We Have a Surplus OF Gold
Now the United States has more
than enough gold to keep her paper
money up to par. Europe mas not
nearly enough. Trade with Europe Is
changing almost from hour to hour
and no one can be sure what the money
he will be paid in will be worth to-
~nn xynnt m fFA0A
with Germany and other European
nations. Therefore, some Americans
believe that we should lend u sur
plus gold abroad to stabilize foreign
currencies and start q trade which
would result in the countries on both
sides of the Atlantic making more
money and paying off debts.
An interesting argument in favor or
such a loan is the warning which has
been issued by competent economists
against keeping all the gold in America;
Gold has been coming in for years until
we have more than any other nation
ever had in the history of the world.
It still is coming in. Our hoard is
rising and Europe's dwindling. The
warning is this: European countries,
having sent all their gold here, might
say. "Gold is an artificial medium of
exchange having no value except by
common consent. We have no more
gold and therefore it has no value to
us. We will not deal in it any longer
and will not recognize it as a thing
of value. We can't eat it or wear it
for warmth and this is no time TO talk
about adornment."
The United States would find thai
1t had given food, clothing, machinery
- -nl,ah1n onur r,ndfttaC and ra,
ceiyed in return what had become 6
very heavy. unwieldy and useles:
metal.
This seems an extreme statement
vet the fact must be recognized. that Il