Evening star., 1933-01-22

and cheese to gold and faith
in government.
Today. in some parts of America.
even the promise to pay in goods
and services is being made into
money. This is the money used by
the Nations unemployed in their bar
ter and exchanges, about $50 of which
,, have been organized in the United
States since the depression. This
money is scrip, simply a promise to
pay the bearer goods and services.
Yet, while the unemployed seek to
make more money, the United States
in recent months has had more money
i in circulation than at any time in its
history-that is, more coins and bills.
i, There is more in circulation today
than there was in 1929. What is this
| paradox?
AS Prof Ray Rogers of New York
| University points cut. the paradox is
! simply that the money that circulates
in the form of bills and coins is but
a fraction of the total stuff that is
used for money. The major part Of
our money is bank deposits.
On June 30, 1882, total bank de-
posits stood at SAL 1863, 10000 At the
same time total bills and coins in cir
culation totaled about $500, 900 600.
|
the banks for their money it would be
utterly impossible to satisfy the de-
| mand. There Is no shortage of money;
rather, there is a shortage of circu-
| latloa Of money, Rogers says.
| Pref. Rogers explains that the bills
ami coins amount in effect to the Ma
| tion's change. the bank deposits are
the most important money.
Money NOWADAYS thus is based
largely on credit, on faith that de-
posts may be turned into bills ana
coin and ultimately into gold-and
there is only some $4,000 900, ,OO1 of
monetary gold in the whcle world.
10 reach this point in moneys de-
velopment hes been the process of
thousands CT years. First man sim
ply swapped goods for goods, or goods
Tor services. method he has never
| completely ceased using.
Then he tried commodity money
A bushel Of wheat. for instance. may
be used as a standard to value other
| thmgS. Or he might use fishhooks.
| cneeSe, rock salt, tobacco, animal skins,
nails, soap, spices, gum drops. wood
| pecker scalps and multitude of other
| things which could be and were used
and therefore had value in themselves
! After commodity money came various
| iormS paSed largely on their vanity or
| ornamental values. There were strings
| OF beads. tiger claws, pieces of stone.
| pretty glass
About the same time, but generally
| somewhat later, various metals came
into use; copper, brass, iron, silver,
platinum and gold.
Then developed the change from
which modern monetary systems have
grown
Governments put the metals in vaults
and issued pieces of paper promising to
,, pay the bearer in the metal. At first.
| each piece of paper had to be backed
py an equivalent amount of metal.
Then the system became more elastic
until today in the United States a Fed
eral Reserve note is backed by only 40
per cent gold, and bank deposits, of
course, have much smaller theoretical
! gold value
The depression. in accentuating bar
ter has caused the unemployed to or
ganize mutual exchanges and the ex-
changes are using scrip to facilitate the
barter.
Many economists doubt that scrip
will ever become a money of national
! Importance, although its use may spread
as barter grows.