Evening star., 1924-01-06
Ben Franklin's Currency Plan
keystone of New German System

is to receive the sum of 1900. .o0o, 900
rentenmarks from the new bank in
the form Of a loan to help pay the
expenses Of the state. OF this sum,
300. 900. 900 rentenmarks bear no in
currency re reosssSie Sss for all s debts % to
the government, such as taxes, but
the rentenmark has not been specif-
ically declared a legal tender. Pre-
sumabiy. II the experiment works
HopeA to Stabilize Business.
The German government rega ris
the rentenmark as an intermediat
step toward absolute return to the
cal commission to study the prob
lem further. 1t is hoped that the
existence of the rentenmark will
stabilize German business while the
new currency reform plan is being
perfected. As an additional stabil-
izing measure, the rsichsbank has
been authorised to issue circulating
notes secured by any holdings Of
British pounds, American dollars or
gold which may happen to come into
it's possession. As the dollars and
pounds are on . gold standard basis
they are regarded - safe security
The new rsntenmark il an effort to
give the public confidence in the circu-
lating medium. II they have confidence
In the claims Of the new establishment
that the new paper money actually is
secured by tho real property OF the ma
ton and II the notes are accepted at
face value Germany will have made a
long stride back toward financial solid
ity. 1t will not be long before 1t will be
known whether the experiment is work
ho NJ ~
depreciate 1t probably will be difficult
to stop II following the path Of the old
German mark. The next month or two
will tell the story.
OrgiAateA VITA Franklin.
The new German currency 10 Of es-
peciaI interest to Americans in view
OF tho fact that it appears to have been
modelled after a currency scheme in
vented by BENJAMIN Franklin. In the
early days OF Pennsylvania history, be-
fore the war of the American revolu-
ton, the finances Of the Pennsylvania
Franklin, then q young man, conceived
the idea OF baaing an issue on the land
values Of the province.
Bills OF credit were issued to farmers
to the government for the use Of the
credit. The interest collected built a
new statehouss for Pennsylvania and
assisted In other government financing.
IN addition the credit notes increased
srapfy, as they stimulated trade.
The rentenmark does not duplicate
the franklin bills Of credit because no
interest is paid for their use and be-
cause OF other general differences. but
there is a fundamental similarity in
that both the issues use land values and
rAal property as basis of their Se-
curity.
Danger In Situation.
One threat throws somewhat of a
shadow over the new currency; that is
the threat Of the operation Of Gresham's
law. This is law Of currency which
holds that where two qualities Of money
are in circulation. q superior and an in
ferior quality, the inferior money will
drive out the superior kind Thus
WHARF gold ana paper money are cir
cuiating the gold will disappear and tho
paper money continue to be the only
reason for this is that the people viii
hold on to the better kind Of money,
hoarding 1t under the fear that no more
Of It may come their way. With every
one doing this the good money soon
stable money 10 all shat is In circula-
tion, The value Of . stable currency
Is felt only when that currency is In
II the German people hoard the more
are making purchases the establishing
eject Of the. new medium viii BE- lost.
The trend Of de experiment must be
Watched for some time TO determine
whAthsr this II to b ~ fatA