New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-09-11
Germany's Great Exchange Bluff
copYrieht. taaa. Nav YORK Tribune lae.

number of marks daily. Alternative
lys some men would be better off than
others, which, under our assumption
that the necessaries only are
produced, must lead to the starvation
of the less fortunate.
0nr first conclusion, therefore, is
that the value of the mark lis fixed by
the wages paid to the producers Of
necessaries for their days work. We
may ignore the position of those not
engaged in production, because It
merely means that the producer can
not retain his whole output for him
self; he must surrender part of 1t for
the benefit of non-p producers.
Output of Luxuries
Next, let us approach nearer to
actual conditions, and assume that the
Germans produce their whole neces-
saries in a day of five hours, on the
average. They would then have an
equal time on their hands for manu-
featuring all those other commodities
they desire, which may be termed
luxuries. Gin practice, Of course, half
the population would be so engaged.
as men cannot conveniently change
their oecupation.) If each worker still
receives five marks per day he Is now
entitled to purchase with them not
only his necessaries but an equal
amount of luxuries in addition. (The
wealth of whole nation being under
consideration, the fact that all do not
receive an equal share does not affect
our argument.)
The value of the mark has therefore
risen, and proportionally to the ma
tion's higher efficiency in the produc-
ton of its necessaries of life. The
less time required to produce the lat
ter, the greater the quantity of
luxuries available. In other words,
the purchasing power of money in a
country depends primarily upon it's
efficiency of production, and while it
can be varied at will by an alteration in
wages Gas, for instance, by the German
workers receiving $3.50 marks per
week instead of 35, when money has
been inflated $50 tines) this has no
bearing on the wealth of q nation. The
available wealth of Germany depends
upon her production. upon what she
produces in excess of her necessaries.
1t follows % that, in order to
maintain the value of money constant,
which is the first desideratum, wages
must be stabilized and increased only
parl passu with a greater production;
CD that the issue Of money is not
the cause but the effect OF imitation
The printing press Us innocent of any
economic misdemeanor.
Now for the second, and easier part
OF our problem the value Of the mark
IN other countries. Prior to the war
the rate of exchange was more or
less constant, except in times OF crisis.
II country be involved In difficulties
the question Of credit enters. It be-
comes uncertain whether she will be
able to pay her debts. d.. to send
us her goods in return for those we
supply. (She cannot send goods in adj
vance for the reason that she Is in
particular need Of then) Hence, to
cover the risk, the rate Of exchange
will be altered TO her detriment,
whereby she has to surrender i larger
amount Of her money in return for
ours, and receives less Of our goods.
As . rule, 9 nation. like an individ-
uai' naturally assures its creditors
1hat y can and will pay. 1t endeavors
20 maintain its credit; consequently
variations IN exchange were usually
small. But to-day we have a
debtor ~ Germany who says she
cannot pay, and we know that she has
NO insentson Of doing 80 IL she can