Evening star., 1931-12-09
BY MARK REQUA.

It seems probable all manner of pana-
ceas will be offered to cure industrial
and agricultural ills at the present ses-
sion of Congress. Specious pleas will
be made for patent me5icine legisla-
ton guaranteed to effect speedy and
complete recovery The question arises,
however, who will guarantee the guar
antor?
Honest -intentioned citizens in time
of distress seek relief through govern
ment, in the mistaken belief that gov
ernment is wiser than the individual
IN private life, and that it can success
fully legislate against the operation of
economic law.
II there has been one fact demon
strated over the more than two years
of our depression, it is that legislation
cannot effect the cure. President
Hoover summed it up by saying that we
cannot legiSlate ourselves out Of world
depression, but we can and will work
ourselves out.
Lesson May Be Futile.
If the people could be brought to
realize the truth Of this statement, the
depression might well be worth all it
has cost, heavy though the price. Un-
fortunately, the lesson will probably
not be learned.
Perhaps it will be possible tt learn
sore wisdom from the French Revolu-
ton. There were numerous examples
there that might be taken to heart, for
during that period practically eiery one
of the modern-day proposals for anel
ioration of national ills was advenced
in one form or another, and without
exception practically all failed There
is no more glaring example than the at
tempt to legislate value into the as
signats, or paper currency. Here is the
story:
In 1888 France was in deep financial
embarrassment There was a heavy
debt, a serious deficit and a general
want OF confidence in business circles.
Capital had shown its proverbial tinlid-
ity. Stagnation was in evidence in
every direction. Statesmen-l meas
ures. careful watching and wise man.
agenent would probably have led to a
return of confidence, but this involved
waiting, self-denial and sacrifice. Few
nations have been able to exercise these
virtues.
Call for Paper Money.
There was search for some short road
TO prosperity, ana the call became in
sistent for paper money. Necker was
minister Of finance, able, honest, cour-
ageous, one Of the great bankers of
Europe. He tried TO keep France faith
ful to those financial principles the
experience of modern times has estab-
hshed as the only path to national
safety.
In the National Assembly constantly
increasing party held up paper money
as a panacea, as a way of securing re-
sources without paying interest. Marat
and others joined in the hue and cry.
Necker was pictured 2s a wretch seek
ing only to enrich himself from the
public purse
BergaSse, a deputy. prophesied the
evils he said we're sure to follow the
Issue OF such currency Read In the
light Of future events, his prognostica-
tions are little less than miraculous
foresight.
Clamor for New Medium.
However, the Finance Committee of
the Assembly reported that the people
demanded new circulating medium.
that the circulation of paper money
was the best operation. The next day
the debate began. Deputy Martineau
was only fearful the proposed issue
would not be large enough He believed
the sole cause Of stsgnant business was
want Of more of the circulating
Cazales and Maury showed that tbe
result could only be disastrous, Se~er
perhaps did a political prophecy meet
with more exact fullllment thin ,he
picture drawn in one of Cazales'
speeches, but the current ran stronger
ana stronger. Neeker's influence and
experience were gradually worn aWay.
Inc French people were not ignorant
OF the dangers of issuing irredeemable
money. They knew from fearful ex-
perience In John Laws time the din
culties and the dangers of a currency
not based upon specie. They had
learned how easy 1t was to issue and
now difficult to check an overissIe: how
~ LED to the absorption of the means of
the working man of small fortune: how
IL impoverished those living on fixed
incomes salaries or wage; how it
created on the ruins of prosperity a
sn1aI class OF debauched spectators:
now 1t stimulated overprodlction Of
first and then left every Industry inert
afterward; how it broke down the idea
OF thrift and developed political and
social immortality.
Impulse Was Natural.
II was no mere attempt at theatrical
display, but a natural impulse which
led a thoughtful statesman in this de-
bate to hold up in the Assembly a niece
OF paper money and declare it was
mostened with the blood and tears of
their fathers. But the current toward
paper money had become irresistible
Oratory prevailed over experience and
science.
1t was decided to issue 400 ooO, 900
1TGnRg
landed property of the nation as is
security Surely the security was a1,nIc
france had cnly recently conlgcated
the property of the French church,
valued at about four billion france. The
issue was made in April, l790-4O0 .O00, :
ooO francs in assignatS-paper money
secured by pledge Of productive real
estate and bearing interest to the hold
ers at 3 per cent.
NO lrredeemable currency has ever
Claimed more practical and scientific
guarantee for its goodness. It was said
that the assignats bearing Interest
would soon be considered better than
the coin then boarded, and would again
bring 1t out into circulation.
Legislation Cheered.
The legislation caused great inv for
Its result was apparently all the mo-t
sanguine could desire. The Treasurz
was at once greatly rclie; ed, a po-tt!on
OF the public debt waJ paid, c'ed!tor,
were encouraged, credit revived, ordi-
nary expenses were mct. trade was re
Nved and all difficulties seemed past. p
But soon there came result more
diSquieting. Times grew less EASY
within four months after the issue of t6r
100000, COO the government had spent
1t and was again in distress. The CT,
went up for another issue.
Deputy Gouy proposed to liauidat,
the entire debt of two billion four nun.
dred million francs by one single opera.
tion-grand, simple and magnificent
His discourse was loudly applau5ed
Necker again intervened ard tried ra~-
earnestly TO dissuade the Assembly
suggested other means and preoictet
terrible evils.
Necker's Advice Spurred.
The current was again runnin,
strong Necker's advice was spurned
T. - ia