The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-02-09
Wages Don't Keep Pace

Wages Don't Keep Pace
The debate on currency initiation
is chiefly between creditor and
debtor, between bankers and inves-
tors on the one hand and farmers
and other debtors on the other. But
two other classes that include most
of us-consumers and wage-earners
might be affected even more
vitality.
Changes in prices of goods sold at
retail to consumers always lag no
ticeably behind the wholesale or
producers price Payment of wages
to workers similarly lag behind
changed conditions in business.
For instance, government statistics
show conclusively that the song
writer didn't know what he was
talking about in the current hit en-
couraging matrimony because "po-
tatoes are cheaper" etc. The cost
of living on the average, calculated
from prices of food, rent, clothing
etc, fell about % per cent from De-
cember, 1929, to December, 1882.
But the pay roll total in the manu-
featuring industries, to take one in
stance, has fallen more than 60 per
cent. The number employed in
these industries has fallen more
than 40 per cent.
Bi-Metallism One Method
AS to the actual functioning of
currency initiation, here are some Of
the methods proposed:
OBSERVATION-DISCLOSURES would be
made a basis of money, at a weight
ratio with gold. Sixteen ounces of
silver, under the Wheeler plan,
would be made worth one ounce of
gold. Gold now is worth little
more than $40 an ounce, and silver
about 30 cents.
This would make silver worth
about 1925 an ounce in gold money.
Large quantities of silver would be
sold to the government, and money
would be issued against it. The
money would be used to pay part of
the governments five billion dollars
of expenses annually, thus putting
it in circulation"
A variant of this plan is sym
metallism,' whereby each dollar,
now backed by about 25 grains of
gold, would be backed by specified
amount of gold and specified
amount of silver. This represents an
attempt to prevent the gold money
from being boarded while a less
respected currency is used to pay off
debts.
DEVALUATING THE DOLLAR
T. amount of gold backing each
dollar would be reduced If this
were cut in half, the price of gold
would be doubled. The government
could issue twice as much treasury
and gold note currency on its present
reserve. Senator Connally Dem
Tex. has Endorsed this plan.
ISSUANCE OF NEW MONEY
There are many of these proposals
the beSt-known being the Thomas
Rankin bill for issuance of currency
known as Liberty notes. which
would be used to pay off government
obligations. Another has been in
troduced by Representative Busby
dem, Miss, one of the leading
inflationists, proposing Cd that the
treasury issue three billion dollars
in ten-year per cent bonds tC
Federal Reserve agents, and that
~ the Federal Reserve issue three
billion dollars in its notes-cur-
rency.
This money would be issued one
billion dollars at time, and stopped
when and if the commodity price
index reaches 80 per cent of the
1929 average. The money woulc
be backed by 20 per cent of gold
compared with 40 per cent of golc
nof required as backing for Fedora
Reserve notes.
Gold Standard Threatened
All these measures would involve
going of the gold standard, accord
ing to most of the experts. Great
Britain achieved initiation to some
degree without resorting to any OF
these. She merely went off the
gold standard overnight and the
principal effect was on her inter
national trade.
Prices in general in Britain are
about where they were before. Blu
the fact that the United States p
about 95 per cent self-Sustained
consuming mostly goods produced
at home, is advanced by imitation.
lists as proof that there must be {
stimulation, an expansion. o.
money at home to arrest the tobog.
gaming dollar.
There is another kind of "infla
tion"-the imitation which accom-
panied the prosperity of thi
country-high wages and big prof.
its-during the World war. Thi.
is a government bond imitation
coupled with an assured demanC
for goods.
One such plan TO finance eco
nomic recovery with government
bonds will be stated next, in tn,
anal article nf this series