Iron County news. [volume] (Hurley, Wis.) 1913-1950, 1923-10-06
The PERIL OF
EDISON-FORD'S
MONEY SCHEME
Would Create More Paper Money
Than Russia's TrillionS But
Add No Real Wealth.
SOME DANGEROUS PALACES
Would Remove Safe Restraint Of Gold
Basis and Open Way to Endless
Issues of Paper Money.

How the United States would be
swamped, under a create. volume OF
worthless paper money than has
ruined Germany and Russia, by the
Edison-Ford commodity currency plan
is 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. Eos
ter, Director Of the Pollack Founda-
ton for Economic Research. Mr..
Foster says:
1.-THE supply OF money, says Mr..
Ford, Is 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
perity.' From a hundred quarters
comes the demand for the govern
ment to speed up the printing presses,
In order to crush the money monopo-
~ reduce interest rates, and make
II easier for everybody to get money.
Initiating the currency, however,
though It enables people to get more
units OF currency. does not enable
them TO obtain more purchasing
power, and 1t does not reduce interest
rates. In all her history Germany
never had so much money or as high
interest rates as in 1922 Money. I'M
like other forms Of wealth, is not
easier to obtain simply because the
total supply is increased. On the cen
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 Fallacy
1--WE are assured, however, that the
Ford Edison pan provides money for
the farmer at virtually no expense to
the 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 in the whole project.
1t is dangerous because of the uni
versal desire to get something for
nothing.
Here Is the gist of the matter:
Money will buy whatever is produced.
not a particle more 6y any trick OF
alchemy, or legislation, or finance.
The Russians, having multiplied their
money 257 600 times, cannot buy as
much with 1t as before. When we
print more money there are no more
goods for money to buy; not a single
| additional pillow, 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 on in purchasing
power Since there are no more
| plows, and hats, and potatoes, and
so on, to distribute, If some people
| get more, others must get less.
Imitation under the Edison plan is
limited mainly because, on account OF
fits indefensible discrimination. most
groups of producers Of goods and
services are not allowed to partici-
pate II all groups were included, as
In fairness and in politics they would
have 10 be eventually, the possibilities
OF imitation would be vast
The Deadly Spiral
1.-THE total income OF the United
| States is now in excess OF fifty bill
| lions of dollars The total money in
circulation, including bank deposits
subject TO check. is not far from
twenty-five billions. It follows that
the annual production, If used as
basis for new issues on the Edison
plan. could at once greatly increase
the volume of money in circulation.
Every addition 70 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 is
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 given annual
production. Prices would become still
higher; and so on up an endless
spiral
Even In Russia, where financial
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 complain that there is not
enough money to DO business with
without Tire arbitrary restraint Of the
gold basis, and with Muscle Shoals
inflationists, and sundry other kinds
% fnflationists constantly pressing
their claims upon Congress, IT Is not
at all certain that the United States,
once we'll on the road to financial
chaos. would in the end be outrun by
Russia