Evening star., 1933-07-25
Fallacy of Attempt to
Place Debtors and
Creditors in Two OPP
posing Croups-What
Debtors Are to Be
Chosen for Benefits?

(Note: This 10 the third and conclud-
ing article OF series OF three special
articlss discusstng proposals to aid
debtors BY chsapening dollars)
ITHE two previous articles Of this
series have shown the fuctua-
tions up and down Of the value
of the dollar measured In COM
modities - sometimes beneating the
creditor 1T the expense Of the debtor,
sometimes the debtor At the expense Of
the creditor. But the changes In such
values have been wrought heretofore
without changing the standard OF meas
urement-the gold dollar.
II currency debasement 10 undertaken
now, ut what value in purchasing power
in gold content must the dollar be
stabilized to do justice to creditors and
debtors! Does experience show that IT
will remain stabilized II hxed at the
value of any year In the past?
How can 4 value be fixed which Will
do justice to all debtors, since not all
the debts were contracted In the same
year and since in NO two years have the
debtors borrowed the same kind sf
dollars?
The assertion in the Senate that one
| purpose of the new deap' was to
transfer two hundred billions Of unearn-
ed dollars from creditors to debtors, II
even remotely accurate, raises distinct
ly the questions, "Who are creditors?"
and who are debtors?"
Investigation shows that it is impossi-
BILE to separate people into these two
distinct hostile groups or to keep peo-
pie from shifting from one group to the
other every year or to prevent the same
person from being at the same time
both debtor and creditor. with his
financial house divided against itself.
When the attempt was made by
Bryan in 1ss6-ls0o to right the "orime
of 1873" it was found impossible to do
| Justice to the slightly aggrieved debtors
of 1873 by inflicting oversevere punish
ment on the creditors of 1896. It Is
EQUALLY impossible in 1888 by infiicting
penalties upon creditors to right the
wrong to debtors In 1913-1916.
The "Crime Of 1873"
According to the free silver advocates
OF 1896 it was argued that because
debtor Of Is or 10 years past had been
"swindled" by . slightly appreciating
! money, therefore the creditor Of that
! day should be swindled out Of A per
cent OF his due by . sudden depreci-
alton of the money with which he Is
| paid. That was the silver view Of COM
pensation. All creditors were grouped
together and all debtors were grouped
together without regard for the years In
which they lived and were arrayed
against each other like the Indians and
white men of old times on the frontier.
II a white man killed an Indian the
Indians would in retaliation kill the
first white man whom they met. The
creditors of 1896 were to be robbed OF
Al per cent because the debtors Of the
70s and the sos may have been robbed
2 or per cent, though the debtors
Of the 70s who suffered this small rob-
berry were In many instances the cred
itors of the eos whom 1t was proposed
to plunder
The creditor Shylocks. marked for
destruction by the infiationists Of today
even as they we're marked for destruc-
ton by the free silver advocates Of 1896,
include every one millions In the ag-
gregate) who is paid salary or wages
only as the service or labor Is perform
ed. To the extent to which the dollar
would be deprecated by currency de-
ho~ IN hot VUN,l1d o
be reduced, though remaining nominal
ly at the same figure. If it Is assumed
that imitation would. as many Of its ad-
vocates assert, raise the price Of all
commodities to a figure that might dou-
BILE their present rates, no working
man believes that his wages would be
doubled at once.
During the depression period between
1899 and 1888 there has been . steady
increase Of the purchasing power Of the
dollar and depreciation Of the prices
Of commodities, whether silver Or farm
products or cost Of living products, re-
tail or wholesale.
But even this increase has not carried
the cost Of living (retaiI dollarl up to
the level Of 1913 to 1915. In 1913
the dollar was 100 cents. in 1914. 81
cents; in 1915. IS cents; IN 1916.
cents; in 1882, IS cents.
Is there anything - startling In the
unwholesome conditions Of today that
in order to correct them We must re-
pudiate our contractual gold dollar er
rob 1t Of half its content sr Substitute
for It . silver dollar Of . small fraction
Of its bullion value?
These devices were mot necessary to
correct the conditions Of 1918 70 1915
as related to the dear" cost ef living
dollar. Why are they necessary new?
Does the element Of justice to the
debtor really enter the picture? Can
the matter Of justice to the debtor be
considered without equal consideration
of justice to the creditor? Loans, OF
course. are made every day. Industry
and commerce are supported by creoit
system in which money Is being con-
stantly loaned, to be repaid at . later
date. II it is unjust to force . debtor
to repay dear" dollars when he bor-
rowed cheap" dollars, is 1t not equally
unjust to force . creditor to accept
cheap" dollars in return for the dear"
dollars that he advanced to benef1t the
debtor? And. If the standard OF
measurement-the gold dollar-is to be
shortened 80 that debtors may repay IN
the same dollars which they borrowed,
what debtors are to be thus benefited?
Liberty Loan Debts.
Let us examine, briefly. the case Of
Uncle Sam, who, while being . creditor
as regards the rest Of the world. Is .
debtor at home; who cheapens his dol
lar for the benefit of his debtors in
Europe, to the injury of his bond
holding and other creditors at home:
Let us consider his debts as represented
in the five Liberty loans. Let us say,
for the purpose of this illustration. that
these debts were assumed in terms OF
the Department of Labor's cost OF hv-
ing" dollar-such dollars being express
sive of purchasing power at retail ana
~. 1On-cent dollar of 1919 heinz used