Evening star., 1933-01-29
Is the Dollar Dishonest =?

Is Cue UOlldr UlSuOucSCt
There is lot of talk today of the
dishonest dollar" and the inflationists
apparently want to make it honest
Senator Borah defines the dishonest
dollar" as follows:
A dollar which takes three times as
much wheat to buy, three or four times
as much cotton to buy, two or three
times as many hogs to buy in 1888 as
it did in 1929 is not an honest dollar:
it is a dishonest dollar.
But why blame it on the dollar? Sup
pose farmer had been accustomed to
swap a bushel of wheat for a cheese
until so many other farmers raised so
much wheat that many Of them were
willing to give two bushels of wheat for
the same cheese? Would that condemn
the cheese as dishonest cheese? Sup
pose, on the other hand, that scarcity
of wheat and plethora Of cheese made
1t so that the farmer could obtain the
same cheese for half bushel Of wheat?
Would the cheese or the wheat be dis
honest?
Senator Connally Of Texas Is suspi-
cious of imitation by free coinage of
silver, but advocates reducing the
amount of gold in the dollar in order
to make the dollar honest" again.
Senator Gore of Oklahoma chose fable
of his own to illustrate the Connally
proposal and it can be applied with
equal force to all currency imitation
schemes. 1t is little long, but 1t is
worth retelling as he told 1t:
Suppose that in 1929-it Is rather a
wild assumption-the Senator from
Texas and I were each possessed of
$1,000 in gold coin Of the United States
of present standard of weight and flne-
ness. The Senator from Ohio applied to
me for loan of $1,000 in gold. made
answer that I did not like the outlook.
I refused the loan, stating that pre-
ferred to keep my gold In my sock or
locked up in a strong box.
The Senator from Ohio then applied
to the Senator from Texas for loan
of $1,000 in gold. The Senator from
Texas, more public-spirited than myself,
with more confidence in the outlook,
made the loan of $1,000 in gold, pay
able four years after date.
When the date of payment arrived
prices had declined so per cent. Gold
had appreciated 100 per cent. The Sen
ator from Ohio took $500 in gold of
standard weight and fineness to the
Senator from Texas and made tender.
The Senator from Texas suggested that
he had lent to the Senator from Ohio
$1,000 of standard weight and fineness,
and that he desired, and all that he de-
sired, was the return of as much gold
as he had parted with.
The Senator from Ohio stated that
while the loan bore the form of gold,
after all. he had borrowed purchasing
power, and he was rendering to the
Senator from Texas as much purchas-
ing power as he had obtained, that $500
in gold would buy as much now as
$1,000 in gold would buy when the loan
was negotiated The Senator from
Texas. when pay day comes, still insists
on a thousand gold dollars of standard
weight and f1neness.
The Senator from Ohio comes to
Congress, exerts his influence with this
legislative body and prevails upon Con-
gress to cut down the number of grains
in a standard gold dollar to one-half of
what it was when the contract was en-
tered into. He returns to the Senator
from Texas and makes tender Of one
half as much gold as he borrowed; and
the Senator from Texas. under the
compulsion of Congress, receives one
half as much gold as he parted with.
am watching the transaction. I
have kept my gold in my sock. and I
have twice as much gold as the Sem
ator from Texas. have twice as much
purchasing power as the Senator from
Texas, because my gold slumbered in
stead of working.
Which, in this case, was dishonest?
The gold dollar or the Senator from
Ohio" and the Congress of the United
States? The question is important. As
Senator Gore pointed out, I'VE wonder
on the one hand why credit is refused,
when on the other hand we are dis
cussing the passage of laws which will
make it impossible for creditors who
have extended credit to collect their
debts"
Who are the creditors? They are
not merely those who own the mort
cages on the farmers farms. or who
hold the notes on real estate. The
holders of $4,000, 900 900 of tax-exempt
Government bonds are creditors, the
owner of a bank account or savings
deposit or a life insurance policy Is a
creditor and the lowliest wage-earner is,
in a sense, a creditor, his employer ow-
ing him for services rendered. And
these are the creditors who would fare
much as the Senator from OLo Jared
in the fable related above under cur
rency-debasing policies which for the
time being have been properly relegated
to. the background. Those who would
gain would not be the debtors so much
as those who hoard their gold, as the
Senator from Oklahoma boarded it.
the gold which "slumbered instead
of working" It is the problem of
Congress to wake this gold up and put it
to work by inspiring confidence in the
honesty and integrity of the Federal
Government.
n;ecouro oinu elements of the rllblir