The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1930-10-03
R24>;..4
Those Wicked
Rolsheviks
By JORGE

1t remained for the N. Y. Times to discover
Imitation of the currency. Not here, of course!
But in Soviet Russia. True, it was unfortunately
published day two after the Gold Committee
of the League of Nations admitted that by 1884
there wouldn't be gold enough to give a gold
basis to the currency floating in capitalist coun-
tries.
But that's hardly news There isn't enough
now! However, the Times sudden righteousness
over imitation in the Soviet Union needs going
over 1t was given out by a guy named Baker,
who is plugging hard for embargo on Soviet
manganese in behalf of the American manganese
interests.
Baker says that for one ton of Russian man
ganese sold here for $3.50. the Soviet, by some
especial Bolshevik magic, make profit of $45.62!
He arrives at this strange conclusion by beating
the devil around a bush.
Because the Soviet currency is based on the
ratio of thrv7 to one of what it calls solid cover"
And because solid cover includes foreign money
from gold standard countries) as well as pre-
cious metals-while the balance of three -fourths,
not solid cover is based on merchandise and
paper representing tangible goods, Baker figures:
That for the S12.50 the Soviet gets for a ton
of manganese here, it issues its own currency for
three times that and then adds, under the law,
three fourths of the currency issue in treasury
notes, thus has s6562. Baker allows a de-
duction of $40 for production cost and arrives at
his profit estimate of $45.62! Amt those Reds
the very devil for tricks!
Only one little thing is the matter with this.
That is, that it's not true. Everybody but Baker
apparently. knows that all sales of the Soviet
abroad are being put into machinery for in
disqualification under the 5-Year Plan.
However if the Bolsheviks have any imitation.
they pikers beside "our" Federal Reserve
Ask all the boys who got stung on the Stock
Market crash just how it happened that the
wonderful brains of the Federal Reserve couldn't
stop it. Oh, my eyei The Federal Reserve helped
it along with the greatest imitation in the worlds
history.
farmer in Oklahoma mortgages his cows
aud 1l,fa
that so much money is loaned to Sam Jones.
Jones has that money, though he don't keep 1t
long. But it's in circulation Yet the bank dis
counts it to the Federal Reserve District, and
gets the right to use rs percent of the total as
money"
From number of such punches of money
merely book money, money of account" it
again loaned a holder of $1,000 General Motors
stock, let say, the sum of $1,000 in the days
when General Motors was selling at 200, or when
the face value of 81 900 worth of stock was worth
$4,000.
1t issues this sum of 81 800 in currency to the
owner of the stock and takes the collateral, the
stock, to the Federal Reserve and gets 80 percent
of the $1,000 in redscount, of which it is allowed
to issue rs percent again in loans to, let us say,
building investment corporation. And so on
ad infinitum.
This gigantic imitation of money of account
can go on so long nothing happens" But
when the price of farm products falls, and Sam
Jones the farmer don't pay the mortgage; and the
Stock Market collapse sends General Motors
down to 80 from 200 (making the 81 900 worth
of stock look like 5000; and when the building
investment corporation finds that it can't collect
and hence can't meet its loan--then things beain
to shrlve up and the whole banking system is
rocking like house of cards.
Hence, pardon our smile at the tone Of moral
indignation with which the N Y Times scoIds
the Bolsheviks for Imitation"
But Baker holds out the pitfying hand to the
poor ignorant Russian worker" All how these
ter-revolutionists break into tears for the
Russian worker! But isn't it funny how they
are so hardboiled to American workers.