The Filer record. (Filer, Idaho) 1919-1930, 1923-10-18
THE HIGH COST
OF CHEAP MONEY
Widows and Orphans Among
Chief Losers From Unsound
Currency.
E. E. AGGER CITES EXPERIENCE
Spectators Rather Than Inyes-
tors and Producers Win From
Currency Depreciation.


down, doubtless total more than our
staggering World War appropria-
tons, IT is declared by E. E. Agger.
an authority on economics, in the
Journal OF the American Bankers AS
ISOLATION Cheap money" he says.
IL very costly. since frenzied finance.
speculation and business disaster
have Invariably followed in the wake
Of unsound currency. He cites his
torical experience showing that wild
ews and orphans were among the
chief sufferers.
New generations OF adults. like
children. have to learn over and over
again that, when playing with fire.
one runs the risk OF being burned"
Mr.. Agger says. "Indulging curren-
CT heresies constitutes such an adult
playing with-fre. A glance over our
own historical experience would dem
onstrate this to the most ardent easy
money advocate, but such advocates
are usually those to whom history is
bunk
Soft Money Advocates Seek Profit
Unfortunately those who are will
ing to kindle the kind of confiagra-
ton involved In 'soft-money' eaperi-
nentation are not the only ones hurt.
Indeed. they may extort an advan-
tage for themselves. But the record
II all too clear concerning the mass
Of people. Heavy losses, injustice.
disorgsnized production and numer.
Gus other evils are inevitable.
-Unsound money projects impose
heavy costs on the government itself.
The first effect of cheap money is to
raise prices. Mounting prices mean
that. to meet Its needs. the govern
msnt must appropriate always larger
sums. Again. dallying with unsound
money weakens the governments
credit Prospective bond buyers be-
come hesitant when currency depre-
citation is threatened, because there Is
danger of agitation toward the pay
ment Of government obligations in the
cheaper money rather than in specie
Any such weakening Of government
credit means lower prices received for
bonds. consequently greater burdens
On the Treasury. Assuming that. In
the end. sound principles triumph, the
indujgences OF the unsound currency
days leave further costs to be met |
II paper money has been issued 1t |
must be redeemed. II a government
be unwilling to stoop to reputation
It must raise much more in taxes to
pay for the paper money than II re
csived at the time OF issue"
The total effect of paper issues In
increasing the cost Of the Civil War ls
estimated at about $500 1000 900. Mr.
Agger says. continuing:
Much more serious than the costs
of unsound currency to the govern
ment are the heavy direct and indi
rect costs imposed upon the people
Our productive system is controlled
prices. and the upset of prices,
caused by q depreciatinE currency, in
terfsres with the proper harmonizins
OF the different lines Of production
Price changes are not instantaneously
or uniformly effected throughout the
whole system. The result OF an In
dictionary movement IL a stimuli ton
Of speculation and over-inyestment IL
some lines, with inadequate develop
msat In other lines. The period OF
speculation seems q period OF prosper
Ity, but how false and unsound is such
II disclosed In the stress
and agony Of the inevitable period OF
which, Nemesis-like. fol
lsws on the heels Of the boom"
Wealth Unfairly Re-dIstributed
Mr.. AgEer then describes the dis
effects of an unsound money
o. the distribution Of wealth among
classes and individuals. Cheapenins
money through innstionsry expedi
snts is . gigantic fraud upon the cred.
Itor classes as against debtors. All
hose dependent on hxed incomes. or
receiving specified sums IN terms Of
money, are penalized when the pur.
power of money is depressed
n like manner the stakeholder PROFITS
Il the expense OF the bondholder-s
act which implies a reward to the
more speculztively inclined at the ex.
,snss OF the conservative.
Advancing prices cause discomfort
md give rise to agitation and unrest
ImonS those whose incomes cannot
rom pity be adjusted to meet higher
ivins costs Strikes are fonented
nd production Is curtziled Every
,exy shares IN these burdens Lack
{ stability IN money also undermines
IA veakens habits Of thrift A cor.
osion OF the moral integrity OF the
,sople IL inevitable Dishonesty Is
tin ulatsd and a desire 10 gain By
psculatioD rather than to earn a live
heed By productive and useful labor
susss Q marked deterioration In pop
lay habiu ana Character