The Washington herald., 1922-02-18

rency and hive also experienced falling Oh IN
profitable visitors from other countries. These
peopl., with their good money, have even sefiously
discussed going deliberately about making their
money poor They have considered Artificial inaa-
ton Fortunately thus far. they have not yielded
to the suggestion
Their currency problem was explained in 1.-THE
January II issue of the Basler Nachrichten quo
tation from which is as follows.
an the annual report Of the banking firm of
A. Sarasin ct Gle, in Basic, it is pointed out that
the proposals for the devaluaton or the Swiss
rency, by means of an increased note issue in or
der check the competition of countries with de-
preciated currencies fortunately no longer put
forward seriously. The idea has been frequently
opposed by financial experts, and the president
of the Swiss financial department has come for
ward as its opponent. 1t is by no means certain
that an increased note issue would cause the Swiss
franc fall and thereby raise the exchange rate Of
foreign currencies and even were il to do so the
level of prices in Switzerland might not assimiiate
itself to that obtaining in the countries competing
with her. Moreover, can anyone guarantee that the
high exchange rate of the Swiss franc will be per-
manent? IT, as is invariably the case the national
Indebtedness exercises injurious effect upon the
currency Switzerland has every reason for anxiety
for the debts of the state, including the deficit of
the state railways and Of the cantons and munich
palities, are aiarmingly large. The national bank
IS being continually called upon for short-term
loans by the state and the state railways. 1t is
more than probable that for the next few months
increasing indebtedness the part of public de-
partments is to be reckoned with. The state and
its undertakings faced by huge deficits especi-
ally the railways, which during the first eleven
months Of last year showed small surplus that
it was barely possible to the and tho
sums written off. All the interest payable has to be
found by mourning fresh debts, and the existing
deficit is thereby increased. In the circumstances
it is obviously not the time to talk of artihcialy
increasing the floating debt Of the country by an
entirely unjusti6ed issue of notes"
&c. it would seem that Swiss good sense has
triumphcd the temptation to depreciate the
currency arthcally. While it is true, suggested
in the Nachrichten, that the national Indebtedness
has effect the currency, inasmuch out
standing bonds and other public securities bearing
interest sort of sluggish currency, the effect is
by means such issue OF noninterest bearing
notes-paper money. A new issue Of notes, if it
left the Swiss gold Of sufficient percentage
still to maintain the gold standard might not cause
the Swiss franc to fall But if the note issue were
large enough to compel the abandonment of the
gold standard seriously to threaten that re-
suit. the franc would fall, sure enough.
The Swiss currency situation is akin to Ameri-
cas-, but smaller scale. America, too has par
money money gold basis in spite of huge
national debt (proving again that loans do not
greatly effect the exchange). Switzerland, like
America, notices some difficulties from her good
money but the difficulties are trile compared to
the troubles brought about by the nightmare cur
rencies of some European countries.