Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-11

Yesterday marked the issuance from
banks of the new small bills, called
money. These are third smaller than
the paper we have grown accustomed
to handling, yet they buy just as mucn
Of any kind of merchandise.
The Treasury has been considering
the reduction In size of the paper cur
rency ever since 1910, but the war in
terfered with any such unnecessary
undertaking. and even since the war
the enormous amount OF mechanical
difficulty in making the change has
caused years Of delay. Today the Bu-
reau of Engraving and Printing Is
ready with 912, 100000 bills OF the ulti-
a decade or more before all the old
money will have been exchanged Tor
the new. but the greater convenience OF
the smaller bills makes them very at
tractive, and the saving In cost OF pro-
duction amounts to some 81 ,50O,OOO a
wear. Besides, the new bills are printed
on better and tougher paper, ana the
engraving is even finer than any pre-
ceding. But all Of that is mere me-
chanical technique. What IS money
The inordinate love of-not the tning
itself-is the root Of all evil.
Most men of the present generation
have almost forgotten (if they ever ex-
nerienced) the wild debates of the first
BRYAN campaign of 1898 and 1894 when
all voters suddenly became "fnanciers,
ready to argue that, money being
good thing" the more We created, the
weather. we would be as Nation: Inc
free coinage of silver at the arbitrary
ratio of Is to l was to sink or noat
the Ship of State. sixteen to one" nao
no relation to the comparative market
value of Is ounces of silver or ! ounce
of gold, but it was to become hxed
ratio. by which a dollar" could be
stamped on so cents worth of silver, and
become legal tender for all debts; that
was cheap money" and everybody who
thought he should have more money
was expected to favor such an obvious
way to get it. Printing it on paper was
even cheaper.
Now, specifically at least, why is not
the stamping of lone Dollar" on piece
| of paper only two-thirds as big as last
years dollar the same sort OF cheap
ening money as was Bryan's propoSltlon
to take half a dollars worth OF silver
and lie about it by calling it dollar?
When one can answer that question: ne
can qualify as really knowing the nrst
principles of finance.
Yet millions of "financiers" through
out Europe and the world-even in
! GLIDING the United States-are con-
WINGED that stamping or printing
money" creates its wealth, and so IN
Russia Gas was quoted recently from
| President Hoover it became so plentiful
that it took 100000 rubles (face val
ue, So ,00O, 000) to equal 81 OF American
coinage.
The answer to that gives the secret
| of all that creates value in morey-1t
| is credit definitely measured. The sill
yer dollar today contains less than oU
cents worth of metal, but 1t Is ex-
| changeable for 81 in gold anywhere In
| the world, because the United States
| Government, in issuing 1t from the
mint, has pledged Government credit,
by law, in its guarantee to redeem IL
with a dollars worth of gold, and the
credit of the United States today Is be-
yond question.
Bryan and other free suverites" OF the
nineties was not to be redeemable In
gold, but was to stand solely upon the
| bluff that it was dollar" although
there was to be unlimited" free COIN
ace of so cents worth Of silver at the
rate of 16 ounces of silver to OF gold.
ANYBODY owning an ounce Of gold worth
SIS to $18 could buy 80 or more ounces
Of silver with it and compel the mint
then to lie and stamp $50 on what
they had presented.
So we have a demonstration today
! that 1t is not the size of the scrap OF
paper which makes the dollar, but the
sanctity and reliability of the credit OF
the government which guarantees to
redeem that scrap Of paper In pure
gold worth 81, or whatever value Is
stamped on the paper money"
| n X y X
There is nevertheless endless twaddle
about making stability" Of money, and
more or less dispute as to whether gold
| is stable or whether its value fluctuates
W and down, the same as any other
| commodity.
What is really "up" and what is
down? That sort Of discussion Is
based upon pre-Einstein theories OF
relatively of space and motion. Notnne
| can be proved to be stable in the uni
verse. It's relation to everything else Is
! all that locates it.
what is stability? Gold Is accepted
as the unit of value mainly because II
| is indestructible, easily handled and
easily safeguarded against robbery. AL
United States money Is based on its
redemption In gold; the currency is only
the token of so much gold, yet gold to-
day will not buy the same quantities as
1t did 10 years ago, or will 10 years
hence. Is our money unstable" then?
| \ \
A year ago the famous fictionist, H
q. Wells, expressed himself in the Sat-
urday Evening Post as follows:
Three things the world requires from
its money-credit organization. Tit
meant o payment for q days work, Q
| weeks work, or q months work, that
! viii surely keep its promise to the work.
er. It must represent absolutely stable
purchasing power. 1t must never eVap-