The midland journal. (Rising Sun, Md.) 1885-1947, 1933-02-10
WHAT'S GOING ON
IN WASHINGTON
Clearing Up This Initiation
Thing; What 1t Is and
What 1t Will Do.
ev WILLIAM RRUcKART


Washington. 1T appears from the
injuries have had that there Is
good deal of confusion as to what this
imitation thing is all about. It is equal
y convincing, on this same basis, that
imitation talk is going on everywhere,
and it's widespread character would In
dictate that some sort Of imitation Is
going to come out Of the extra session
of congress that now appears to be
scheduled for April.
The unbiased truth is that a very
great part of this talk is wholly mean
ingless, because there are millions OF
persons who have had no opportunity
to inform themselves about it. 1t is
further truth that many men are talk
ing for or against imitation without
background of knowledge that war
rants their discussions. Their views,
in some instances, are worthless but
they express them and people who
have been denied authoritative infor-
nation are thus being misled.
But what is imitation? What will 1t
do? Why do SO many persons think
1t is advisable or necessary?
The answer to the first requires
detailed statement. The other two
questions can be traced directly to the
depression, so that "hard tines con-
stitutes the answer.
Records fail to disclose any more
precipitous decline in commodity
prices than this country, and the world
as well, have known in the last three
years. By commodity prices, one nee
essarily must refer to that extensive
list of things which constitute the base
Of commerce and industry. Typical of
them are wheat, cotton, corn, steel,
chemicals, rubber, coffee or foodstuffs.
Everyone Of them has suffered a price
decline to points as low, or lower, than
ever before in modern times. The
obvious, and natural, result Is reduc-
ton of income for everyone having any
part in their production and distribu-
ton. And the effect carries through
to those who work with their hands
in the factories of the country, in the
shape of wage cuts or part time work
or no work at all.
Those factors partially explain why
there is so much talk about imitation.
But about imitation, itself? In COM
mon discussion, it refers to imitation of
the currency, some Of which you and
have had the privilege Of touching in
days gone by. But there is also infia-
ton of credit, which is. another and
more intricate matter. The two are
inseparably linked, however. Imitation
of credit is bound to occur when there
has been imitation Of the currency, al
though imitation of credit can be &C.
complished without imitation Of the
currency. From present indications,
the thing which congress probably will
do will be to initiate credit more.
Our present money unit is the dol
lar. It represents 25.S grains of gold.
Then, there Is our currency. That is
paper money. 1t has been described
as Representing" the gold coin. The
treasury officials tell me that most
folks mean all of the various kinds of
money when they speak Of currency.
That is not quite true. Currency, new
ertheless, represents the gold that lies
In the treasury and the possess0r of
paper money can get gold for it. ex-
cept in respect Of the limited amount
of paper money known as silver certi-
ficates.
So, actually, when people talk about
imitation Of the currency, they are talk
ing about increasing the volume of
this currency.
Three Methods of Imitation.
So we come to the point. How can
this imitation be arranged and what
is its effect?
There are three commonly accepted
ways Of accomplishing imitation. One
way is to increase the volume of the
money units, or dollars actually avail
able, which means there must be an
increase In the gold stock held by the
treasury. A second method is to in
CNctioc Lie Qudutity VI Lie paper IHdI
represents the gold, without, at the
same time, increasing that gold stock.
The third plan is by creating new
dollar, a different dollar from that
which we have been using. All three
methods have their partisans. Each
has arguments in its favor, If you as
sumo, believe or know positively, that
imitation is the proper thing to do. 1t
may be said just here that experts ev-
erywhere know the first method is next
to impossible, because there is not
enough gold in the world to permit it.
AS to the second plan: Some of it's
sponsors call it managed currency"
because by increasing the number of
paper dollars, the total is supposed to
be maintained at a level consonant
with prices of commodities. That i'm
plies decreasing the volume, as well
as increasing it. when the conditions
warrant the former course. Yet 1t
causes the question to be asked, "Will
the paper dollar then represent the
gold which it now represents, or will