Judsonia weekly advance., 1922-03-02
WHAT Do YOU KNOW
ABOUT MONEY AS MONEY?
Continued from page one)

OOulU THAT SeCuIity Dc utihHSu III
the solution of the Money Problem
One school of economists says it could
The theory is that the government
itself should issue money without the
intervention of fiscal agents, basing it
on the faith and credit of the nation
and limited only by the taxable values
of the land. This it claims is TIE real
basis of money, whatever its nature.
But control of the volume of money in
circulation has, since the organization
of the United States Bank in 1916,
(the bank fought by President Jack
SOM been delegated to fiscal agents,
who have administered the trust for
their private profit.
Question About Federal Reserve
Has no attempt been made rem
edy this situation? Yes; the national
bank act of the Civil War period was
intended to supply legal tender cur
rency of sufficient volume and so dis
tributed as to supply local needs Ma
tional banks were encouraged. They
were given the right to issue "nIon-
ey,' based on the deposits of GOV ern-
ment bonds. Other banks of issue
were driven out of business by the
levy of prohibitive tax of 10 per
cent on their circulation, leaving the
national banks monopoly in this
/ field.
! With what result? The volume of
money in circulation was restricted to
the limit necessary to maintain high
interest rates. Few, ifany banks APP
preached the limit of their authorized
circulation, excusing their Delinquent
cy by claiming the demand did not
] warrant it.
] How about the Federal Reserve
system? The Federal Reserve Sys-
tenn is modification of the plan pre-
scented by Senator Aldrich for Fed
eral Reserve Association, in which the
money issuing power was to be cen
tralized in one great bank owned and
operated by the. "Mcaey Trust This
plan was evolved by an international
banking house in Wall street. The
Federal Reserve System established
regional banks, broadened the power
of issue to include, in addition to gov
eminent bonds, other publicc and COM
mercial obligations as a base. 1t is
capitalized by national and state
banks, each of which could demand a
sufficient volume of notes, made le-
gal tender by the government, for To-
cal needs, on deposit of approved Sc
curities. But the mandatory provis-
ions of the law were nullified by the
Federal Reserve Board by the exac-
ton of prohibitive rediscount rates.
Not only was this restriction effected
but an arbitrary retirement Of notes
issued was decided on, and it is due to
this that there is money shortage"
today.
Keep Money Function in Public's
Hands.
Is there money trust? A good
answer to that question was made be-
fore the Pujo investigating commit
tee, in 1918, by J. P. Morgan. He as
serted that the system of fiscal legis-
lation since the Civil War had been
"unscientific banking" and pointing
to the banks Of Europe as models (al-
though they have failed to serve their
people since) he denied that. there is
money trust, claiming competition
in banking is as keen as in other lines
of business. He admitted that, as in
other lines, business policies Of rival
concerns are necessarily identical, but
that the cooperation and understand
ing essential to trust is absent.
There can be small differencesto the
public whether it is squeezed between
two mighty engines or under their
combined weight.
What can be done to remedy this
situation? Several plans are advanc-
er, but none can succeed unless back
ed by public opinion. There is prac-
tical unanimity onone point-that the
delegation of power to fiscal institu-
lions must cease. The government,
without the endorsement of which no
currency can be made legal tender,
must reclaim that authority and exer-
else it. One of the leading economists
who has labored for years fol
the naturalization of ur finances in
slsts that the government shall cease
to go to the bond market as borrow.
Yer. He would hava Tho ero,ra..x,.a -