Evening star., 1932-12-27
WHEAT PROPOSED
AS MONEY BASIS
Would Raise Grain Price and
Speed Prosperity, Says
London Banker.

LONDON R.-The use Of wheat as
q basis for money would double the
price of the grain and provide a swift
avenue for return of prosperity, believes
j. F. Darling, director of the Midland
Bank, one of EnglandS important nnan-
cial institutions.
Darling, who would link wheat to
gold and silver, believes that In wheat
as a basis for currency we possess an
even more powerful instrument for
trade"
Wheat" he declared when announc-
ing the scheme, has in a marked de-
gree one of the qualities of currency
basis in that it is in universal demand
and has a worldwide market"
There would be a central super bank
as custodian for such wheat and gold
and silver as formed the basis for the
currency His plan-aS advanced-con.
siders only the British Empire and
would use 300,OJ0,000 bushels OF wheat.
Debts could then be settled BY
debit and credit in the ledger OF tne
custodian Nor would it matter IN now
many elevators or warehouses the Wheat
was stored, or in what empire countrlss
they were situated. SO long as they pe,
longer to the same organization ana
were subject to efficient care and IN
spection The location OF the wneat
would then become matter OF conven,
fence for the ultimate marketing OF IL.
idea in Ab-aham's Day.
Tracing the idea back to the days OF
Abraham, and the centuries before
when wheat was widely used as money !,
and stored in temples, he would form a !
super-central-bank embracing the EN-
pire. ,a
This institution would hold the gold
and the wheat as assets, an on tne |
other side of its balance sheet tnele
would appear corresponding balances 70
credit Of the currency-issulng authorlly
of each country, against WHICH ioeaA
currency would be issued !,
Therefore, a debit to the account oi
one country and credit to that OF an I,
other would be tantamount to trans
fer of SO much gold and so much Wneat,
without necessarily the gold or tne
wheat even leaving the vault or eeVa-
tor in which it was stored"
In this country we hold at present
about fl4O 100000 of gold OF ll3 grams
fine" he said, ''or the same content as
our old, but vanished friend, the SOW
ereign. Against this gold there IS an |
issue of paper money of G414,000,0OO OF
which f36O,OO0,00O is in circulation ana
the balance in the Bank OF England
reserve. Assume that we earmark 0:
set aside s4OOO0,00O Of this gold IN
order to purchase wheat. On the basis
for pound represented by half SOY,
ereign in gold and bushel OF standard
wheat, the remaining fl00.00O,OUU OF
gold would provide 200, 200, 900 hal1 soy.
ereigns or their gold content. Wnlcn
along with 200 600, 900 bushels OF stand
ard wheat would give covered or non
f1duciary basis Of f200,000,000 for our
currency leaving f214,000,00O uncov-
cred and if the other countries OF |
the empire are to be placed on q slml.
lar basis probably further 100 ooo
bushels of wheat would require to be
purchased, or a total OF 3o0,oO0,o0o
bushels.
This Is a vastly different proposal TO
forming a wheat pool to take that guam |
tity of wheat off the market for the !
time being" he said.
"Of course older wheat would require |
to be sold and new wheat purchased, SO |
as to keep the stock in good condition. |
But although not the identical wheat, |
much the greater part OF the 3OO,-
100000 bushels would remain perma- |
nently of the market. 1t could only be
got at through rendering currency |
the currency would be contracted. Fur !
ther, every pound SO rendered would
only liberate one bushel OF wheat along |
with half sovereign Of gold.
So Much Gold Replaced.
What has happened is that wheat !
has taken the place OF SO much gold as
basis for currency. And the currency |
would always be prepared to take more |
ana more wheat off the market on the |
same condition-that is. paying pound |!
in currency for bushel OF wheat. plus |
the gold in half a sovereign. But re- |
member that the superbank'S holding OF /
the two must BE- kept in about equal |
proportions. 1t should hold in Its re- |
serve approximately half a sovereign for |
every buShel of wheat and bushel OF |
wheat for every half Sovereign-and It's |
legal obligation would be to pay or re-
ceive currency against the combina-
ton.
Now, if you have an organization |
which is prepared to take 3O0O0OO0O |
bushels, or even 200000000 bushels Of |
wheat off the market and thereafter to |
continue to use wheat along with gold, |
as a basis for currency, there can be |
little doubt that very material rise in |
the price of wheat would result. So |
widespread would be its influence that |
II is we'll calculated to initiate-for what |
we are looking for Is something power |
1uk W SJdlG pIlCCo s-tO III. |
itiate that upward movement in prices |
which is so essential if the world crisis |
Is to be overcome.
X X X
"The empire superbank is put for |
ward as sound business proposition |
to be run on a prof1t-earning basis. 1t
would belong to the participating gov
ernments, as would its profits. Indeed |
it would be Socialism in its highest ,
and most constructive form, developing |
an entirely new business on lines so
large and comprehensive that only gov
ernments acting in close cooperation
could undertake it. For the valuable !
services it would render to each men, |
ber country reasonable charge would
be made"
No Trade Interference.
II would like to emphasize. however,
that no interference with the wheat |
trade is contemplated. Holding wheat
free of interest has reference to the
100000 1000 bushels, or whatever the
quantity may be, that has been taken
of the market as basis for the cur
rency, and is comparable with gold held
by central banks, which Is also held
free Of interest, currency having been
issued against 1t.
"The bank would have two sources