The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-02-03
Germany, Russia, France, Eng.
land and Even United
State Are Examples
BY RODNEY BUTCHER

NCOpyrlgnt, 1SxZ, MEN service, Inc.
I'll Washington. Feb. 3.-The effects o
!. currency initiation appear to be I'm
practicable.
E Germany and Russia tried it Will
. resultant chaos. France tried it an,
S survived, at the expense Of million
= LOT her citizens and to the enrich
5 ment Of others. Great Britain wen
off the gold standard and doesn'
/ notice any great difference.
, But England hasn't experienced in
flation, since she didn't expand he
currency as was widely expected wher
she was forced off gold nearly /,
months ago. She seems to have NJ
!. desire to return to gold in the neal
future. No one knows what woule
have happened if England had begur
to print paper money.
Our Own Experience
Currency initiation appears In oul
own history. Our forefathers began
to issue paper money in 1776 and soon
had $200,000,000 out in Continental
currency. The money became worth
less and was bought up by SPECTATORS
often at less than cent on the dol
lar, at huge profit when it was later
redeemed.
The government at war began to
print greenbacks in 1862 and issued
about s45O,OOO,OOO of them in two
years. The initiation drove the green
back dollar down to IS or 40 cents
in value. Debtors had q lovely time
and Uncle Sam paid through the nose,
turning over government bonds for
paper money and paying the interest
III gold. In 1865 the government be-
gan to retire greenbackS and debtors
thereafter had to pay in good money.
Since 1873 we have been on the single
gold standard.
Russian currency was inflated dur
!ng the war and was worth only one
eighth Of its face value when the
| Bolsheviks took power. Soon there
were quadrillionS of rubleS afloat and
money was virtually worthless. Final
ly the Russians stabilized their cur
rency internally, where it Is now two
to the dollar as compared with widely
fluctuating but far lower values out
side Russia.
AuAAoSlOlA - 1kS VVESt
Germany also inflated currency dur
ing the war instead of levying heavier
taxes. Her expenses afterward drove
her to initiation until the mark, ordi-
narily worth four to the dollar, stood
at 60 to the dollar in May, 1921. Next
year they were 1000 to the dollar.
Printing marks became q good sized
industry, with numerous factories
turning them out as rapidly as pos
sible, until the mark actually went to
1000, 900 100000, (trillions) to the dol
lar.
Wealth was sucked from the credi-
tor to the debtor class. Savings, pen.
sions and insurance were wiped out.
Mortgages. bonds and notes went up
in smoke. Millions Of persons were
impoverished. The middle class was
ruined. Germany's domestic debt dis
appeared since the government could
pay off its obligations without cost
on terms that amounted to repudia-
ton. Finally producers and mer-
chants wouldn't sell anything for any
amount of currency. So Germany
Cancelled all money and established
the new rentenmark at four to the
dollar. Lacking gold, she based this
currency on the national agriculture
and industry.
France also failed to raise enough
taxes to balance her budget and pay
interest on the national debt. Her
reconstruction expenses were piling
up So she inflated by giving notes to
the Bank of France, for which the
bank returned bank notes to the gov
eminent.
FRANCE MAKES 1T WORK
Up to a certain point she repeated
Germanys experience. BondholderS
and other creditors held the bag and
suffered. The domestic public debt
was reduced to a shadow Of its form
err SELF But the French france, be-
ginning at 10 cents. never declined
in value below two cents, and the gov
eminent quelled panic by stabilizing
with revalued gold content which
made the franc worth five cents.
With her public and private debt
vastly reduced, France proceeded to
enjoy years of relative prosperity. The
index of her wholesale commodity
prices is still higher than that OF any
other among score OF the chief
countries, standing at 7l.6 in terms OF
the American dollar alongside 68.7 Tor
Germany, 626 for the United States
and As for the United Kingdom.
Able to avoid initiation Of her cur
rency, Britain since going off gold has
enjoyed some of the boons promised
by the inflationistS in this country
and has not experienced some OF the
others. England has checked della
ton of prices and unemployment te
a greater extent than the United
States and France.
Britain didn't go off gold voluntar.
lily. She was forced off when othel
countries started a run on her supply
of gold. There was no violent rise II
prices, no general excitement ant
hence no large demand for more cur
rency. England Is rather proud o
the way her people took 1t. The ex
pected rush to grab gold and hoart
it simply didn't come off. Englishmei
have traditional confidence in tn
pound, the financial system and tn
British banks-which never fail.
RUNS ON GOLD
Commodity prices did rise Z or
per cent, but year later they ha'
gradually declined to q level repre-
senting q mere per cent increas
, and the very latest figures bring tina
down to IL per cent. Englishmel
point out, however. that in the sam
period American wholesale price
. have dropped to an index Of 62.6 fror
a 1880 average level Of q Will
French prices have fallen from o6.
, to TIC. Meanwhile. Of course, tn
dollar value Of the pound has De
creased from $4.86 to $3.50.
; A nations ability to Withstand COL
runs IS important because . pr1mar
anti-inflation argument u based q
Plan for Better