The Bingham County news. [volume] (Blackfoot, Idaho) 1918-1930, 1923-06-22
THE HIGH COST
OF CHEAP MONEY
Widows and Orphans Among
Chief Losers From Unsound
Currency.
E. E. AGGER CITES EXPERIENCE
Spectators Rather Than lnves-
tors and Producers Win From
Currency Depreciation.
:. E. AGGER CITES EXPERIENCE


United States from unsound money
experiments, from colonial times
down, doubtless total more than oul
staggering World War appropria
tons, It 10 declared by e. q. Agger
an authority on economics, in the
Journal Of the American Bankers A.
sociation. Cheap money" he says
10 very costly, since frenzied finance
speculation and business disastes
have invariably followed In the wake
Of unsound currency. He cites his
torical experience showing that Wild
ows and orphans were among the
chief sufferers.
New generations Of adults. like
children. have to learn over and over
again that. when playing with IRE,
one runs the risk OF being burned"
Mr.. Agger says. 'Indulging curren-
q herssiss constitutes such an adult
playing-with-frs. 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 10
bunk
Soft Money Advocates Seek Profit
Unfortunately those who are will
ing to kindle the kind of conhagra-
ton involved in 'soft-money' expert
mentation are not tho 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,
disorganized 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
ment 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 IL
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
Of the unsound currency
days leave further costs to be met. |
II paper money has been issued II
must be redeemed. II a government |
be unwilling to stoop to reputation |
1t must raise much more in taxes to |
pay for the paper money than it re-
ceived at the time of ISSUE"
The total effect of paper issues In
the cost of the Civil War Ia
at about $500, 1000, 900, Mr.
Agger says, continuing:
Much more serious than the costa
Of unsound currency to the govern
ment are the heavy direct and indi
rect costs imposed upon the people
Our productive system Is controlled
through prices, and the upset Of prices,
caused by a depreciating currency, in.
terferes with the proper harmonizins
If the different lines Of production.
Price changes are not instantaneously
>r uniformly effected throughout the
whole system. The result of an in.
iationary movement Is stimulation
# speculation and over-investmenti in
'ome lines, with inadequate develop
nent in other lines. The period OF
peculation seems a period Of prosper.
ty, but how false and unsound Is such
Is disclosed In the stress
nd agony Of the inevitable period OF
LIQUIDATION which, Nemesis-like, fol
ows on the heels Of the BOOM"
Wealth Unfairly Re-dIstributed
Mr.. Agger then describes 'the dis
ressing effects of an unsound money
n tho distribution Of wealth among
lasses and individuals. Cheapening
honey through inhationary expedi
nts is gigantic fraud upon the cred.
or classes as against debtors. All
1ose dependent on fixed incomes, or
eceiving specified sums in terms Of
loney, are penalixed when the pur.
hasing power Of money 10 depressed.
! like manner the stakeholder profits
/ the expense of the bondholdsr-a
vet which implies . reward to the
lore speculatively inclined ut the OK
ense of the conservative.
Advancing prices cause discomfort
nd give rise to agitation and unrest
mong those whose incomes cannot
romptly be adjusted to meet higher
wing costs. Strikes are fomented
I'D production - curtailsd. Every
ody shares in these burdens. Lack
stability in money also undermines
nd weakens habits Of thrift. A cor
,sion of the moral integrity of the
IL ~