Evening star., 1923-09-15
Can Europe Hold Together?
1.-THE Yardstick of Civilization.
By JOHN II. SINCLAIR.

The first question In Europe today
at the base of Europe's ilis--is that
of money.
In the past there have been proposed d
many tests of civilization-for in
stance. art, religion. education. the
place of woman-alI of these we
might call yardsticks Of civilization.
But by its very nature, an industrial
| order, such as modern civilization,
brought at this time to it's very high
est achievement, cannot be measured
except in terms of the purchasing
power of its money, This is not as
sordid as 1t seems, for the purchasing
power OF the money of a nation deter
mines in a broad way it's living stand
ard In the world, l. G., the bread and
butter. the shoes and dresses. the
| books and culture 1t can bestow on
each citizen within it's political boun-
daries.
In considering this question of the
purchasing power of money every one
of us has to surrender certain pro-
vtncial habits of thought. We think
of the British pound in terms of the
American dollar, but seldom think of
the American dollar in terms of the
British pound. This thinking only in
terms of American money tends to
obscure our understanding of what
lies at the base of Europe's distress.
! When we force our minds to consider
tho American dollar in terms of the
British pound, the German mark. or
the Russian cherwonitz (the new
Russian money!, we are confronted
by that mysterious thing commonly
called THE rate OF exchange"
= X n !;
BY rate of exchange we mean the
common basis Of money value be-
tween countries. This is measured by
| the amount OF gold in the coins of the
respective countries. The Italian Ira
Is merely q lump of gold Weighing
| 4.4S grains. The American dollar is
a lump of gold Weighing 23.22 grains.
| Thus in the italian lirn there Is 1887
as much gold as in an American dol
lar. So on par of exchange II is worth
1913 American cents or take the case
I of the English pound. 1t contains
112.S1 grains of gold. In American
money the English pound has 4.S665
times as much gold AS the American
dollar. So one English pound contains
as much gold as s4.s6S5. And If you
walk into the New York assay office
and lay down a gold pound the off,
GERS are bound to give you s4.S6S5.
So up to the time of the war, 1914.
| the par OF exchange was the yard
stick of national health, because II
expressed the fixed relation between
gold contents of the standard money
| of the countries, or more generally
| the relative amounts contained In the
gold coins. Thus we see that the par
! of exchange between London and New
York showed to the whole world that
FL gold contained as many grains as
s4S66 United States money, or 25.22 II
gold French francs, or 20.43 German
gold marks. When An Englishman
said a pair of boots was worth l
pound, he meant that he was prepared
to exchange that article for ll2.S1
grains of gold. And when an exporter
| in the United States said that book
! was worth 81 he meant that he was
prepared to exchange that book for
2322 grains of gold. Thus the world
trade developed more especially in
| those European countries where the
| par of exchange" was based on gold.
! Now this Is the theory OF the thing.