The Raymer enterprise., 1923-09-06
THE Peril OF
EDISON-FORD'S
MONEY SCHEME
Would Create More Paper Money
Than Russia's TrilIions But
Add No Real Wealth.
SOME DANGEROUS FALLAcIES
Would Remove Safe Restraint Of Gold
essIs snd Open Way to Endless
Issues Of Paper Money.

How the United States would be
swamped. under q greater volume Of
worthless paper money than has
ruined Germany and Russia, BY the
Edison Ford commodity currency plan
10 pointed out In the present article.
concluding the reviews. prepared BY
the American Bankers Association.
Of the recent exposure Of the folly Of
the whole scheme BY william T fos.
tar, Director OF the Pollack Founda
ton for Economic Research Mr.
Foster says:
-'Ths supply Of money. says Mr..
Ford. IL inadequate. There Is more
wealth than there Is money to move
IT, He draws a vivid picture OF the
golden dam to the stream OF pros
penty.' From q hundred quarters
comes the demand for the govern
ment to speed up the printing presses,
IN order to crush the money monopo
IT, reduce interest rates. and make
II easier for everybody to get money.
Initiating the currency. however.
though II enables people to get more
units Of currency. does not enable
them to obtain more purchasing
power, and Il does not reduce interest
rates. In all her history Germany
never had 50 much money or as high
interest rates as In 1922 Money. un
like other forms Of wealth. is not
easier to obtain simply because the
total supply Is Increased. On the con.
trary. Increasing the supply Of money
ordinarily increases the demand for
money. and Interest rates depend not
on supply but on the relation between
supply and demand,
A Dangerous FaIiscy
we are assured. however, that the
Ford Edison plan provides money for
the farmer at virtually no expense to
tho government or to anyone else
All the government has to do Is to
print the money What could be sim
pier! Here We come to the most dan
gerous fallacy 10 the whole project
II 10 dangerous because Of the uni.
vsrsal desire to get something for
nothing.
Here IL the gist OF the matter:
Money win buy whatever Is produced.
not . particle more by any trick Of
alchemy. or legislation, or finance
The Russians. having multiplied theii
money 267.0 900 times, canno, buy as
much with II as before When We
print more money there are no more
goods for money TO buy; not a single
additional plow. or hat. or potato.
Some Of those who get the newly
printed money can buy more goods
than before: all other people can buy
fewer goods than before. because their
money has fallen OF In purchasing
power. Since there are no more
plows. and hats. and potatoes. and
so on. to distribute. II some people
get more. others must get less.
thhhtiou uhuCI tuV pldu Is
limited mainly because. on account OF
its indefensible discrimination, most
groups OF producers Of goods and
services are not SLOWED to partici
pate II all groups we're included. as
IN fairness and In politics they would
have to be eventually, the Possibilities
Of Imitation would be vast
The Deadly Spiral
"The total income Of the United
States is now In excess Of ffty bill
lions Of dollars. The total money In
circulation. including bank deposits
subject to check. Is not far from
twenty-five billions. 1t follows that
the annual production. II used as
basis for new issues on the Edison
r'"n. could at once greatly Increase
y volume OF money In circulation.
Every addition to the monetary supply
would tend to raise prices. The higher
prices became. the higher would be
the loan value Of a given volume OF
goods since the size Of the loans Ia
based on values and not volume. The
greater. therefore, would be the vol.
ume Of new money that could be is
sued on the basis Of q given annual
production. Prices would become still
higher: and so on up an endless
spiral
Even In Russia. where hnanc
printing presses hold the worlds rec
ord for volume. where new issues Of
two hundred trillions Of rubles per
month stagger the imagination. the
people com plain that there is not
enough money to do business with
Without the arbitrary restraint Of the
gold basis. and with Muscle Shoals
innationists. and sundry other kinds
OF innationists constantly press, ne
their claims upon Congress. Il Is not
at all certain that the United States, |
once we'll on the road 10 hnancIa!
chaos. would 10 the end be outrun by
nnasia