The Farmington times. (Farmington, St. Francois County, Mo.) 1905-1926, 1922-01-27

I
yer dollar, are worth less in this coun
try.
Why is gold selected as the unit O
value? On the fallacious reasonin,
that such a unit is needed.
Why is that reasoning fallacious
Because it has no fixed value. 1t, Xix,
all commodities, is subject to the Law
of supply and demand. The govern
/ ment has fixed its price at $20.67 al
ounce, and for that reason it appears
to have fixed value. But this is mo-
a fact. Being of a fixed price, any
variation in value must be shown II
the prices of other commodities, thu
prices of which are not so fixed.
When Gold Was Cheap Money
Gould the government make any
thing but gold the unit of value? Ger.
tainly. Prior to the decentralization OF
silver that metal was a unit of value
Is not gold universal money; that
is, does not the gold dollar of the
United States pass current in foreign
countries? No; gold coins of any ma
ton are estimated at bullion value
elsewhere than in the country Of is
sue.
Has gold ever been demonetized :?
Yes. In the SOS the Netherlands,
Belgium ard Germany. demonetized
gold and made silver the sole unit Of
value, or money base, in their respec-
tive jurisdictions.
Why was this done? The discovery
of vast deposits of free gold in Cali
fornia and Australia led to the fear
on the part of the holders of money
credits that the increase of the worlds
supply of gold would render the met
al so cheap as to depreciate its money
value.
Has paper money ever been at
premium over gold? Yes. It is stated
that at the expiration lin 1911 of the
charter of the Bank of North America,
the first national bank organized in
the United States, its notes were at a
remium over coin. The government
held the majority of the shares of
that institution, and it was the only
bank in the history of the country
that was not owned by private capt
tai.
Has there ever been another in
stance of the kind?
The governor of the Island of
Guernsey, in the English Channel, re-
fused in 1847 to sanction the borrow
ing of money to build market house,
but financed the enterprise on the
strength of the credit of the island
by issuing scrip that was made receiv-
able in taxes and market rentals. The
project was successful and the demand
for the scrip finally exceeded the sup
ply, so it rose to a premium over the
ordinary coin of the realm--goId and
silver. To remedy this, it was de-
creed that market rentals might be
paid in the ordinary currency. When
the scrip was retired the market
house had paid for itself and the is
land had its improvement without the
payment of farthing in interest to
the money lenders.
How are price fluctuations to be ac-
counted for? A prime cause for the
changes in the level of prices, as
agreed by all economists, is the ex-
pansion and contraction of the volume
81 money in circulation. If the vol
1me of money increases more rapid
" than the volume of goods, prices
naturally become higher; if it does not
increase or is diminished, the trend is
Q lower price levels for commodities.
the money lenders fear ex-
,anslon and favor contraction.
What is the effect of boarding |
money? To reduce it's volume. Banks |
Ioard for the same reasons that mo-
opolies restrict production-to be
Die to secure greater profits OH their |
took i'll trade.
What is the effect of this course on
Industry? 1t places business and pre-
uctlon on a credit basis, so compell-
1g the producer to finance his bust
ess with borrowed money and the
to supply his needs in the
anne way. This adds to the taxes of
ach for the privilege of existence.
10 borrow money one must give
adequate security" What is ade-
late security? The security for all
'ans rests on land and labor in the {
st Analysis. II
Could that security be utilized in
lie solution of the money problem? s
ne school of economists says it l
'uld. The theory is that the govern {
ent itself should issue money with {
1T the intervention of fiscal agents. j
asing it on the faith and credit of /
lie nation and limited only by the tax t
Die values Of the land. This, it
aims is the real basis of money, c
hatever its nature. But control of 6
e volume of money in circulation c
rs, since the organization of the
nited States Bank in 1916, (the bank |
ught by President Jackson) been I
,legated to fiscal agents, who have {
iministered the trust for their pri- I
tie profit, II
Question About Federal Reserve
Has no attempt been made to rem
ly this situation? Yes; the nation !
bank act of the Civil War period !
as intended to supply legal tender
lrrency of sufficient volume and SO
stributed as to supply local needs.
ational banks were encouraged. They
ere given the right to issue 'money".
ased on the deposit of government
,nds. Other banks of issue were
'iven out of business by the levy of
nrOhi bifiua inv af m 49,. - |