Evening star., 1934-07-15
What Is Our Money Standard?
scontlnued From Ptrst Paes }


Gold Juggling. reputation. confscs-
ton and debasensnt are enacted on
the theory that ihey wiii raise prices.
improve foreign trade, revive agricul-
tlire, eqIsiize debt burdens and end
depression Any opponent Of this pro-
gram must face the mean and hypo-
critical charge that he wants laborers
70 stsrvc, agriculture n die. debtors
70 b. strangied and depression 70 con-
tinue. one periodical published se-
res of articles In which all Eh0 ques-
toned the program we're "denation-
lists" working for the continuance oi
depression
The opposition TO the strange none
tary experiments has rested on one
simple proposition Namely. that the
experience OF history the principles
of economics and the opinion Of quail
ified men unite In the Judgment that
infiationary tinkering vlth the cur
rency retards and damages recovery.
This opposition contends that cur
rency manipulation does not help the
poor or the unemployed or the debt
ridden It contends that its very fsii-
ure In this respect may lead 10 a col
lapse OF Government credit and a
calamitous imitation that viii falI
heavily on the laborer and the man
of little property while II enriches the
speculator end the large stockhoideT.
The opposition TO the money program
wants TO see labor back al work, agri-
culture on It's feet and trade making
profits It is cheap propaganda that
ascribes any other motive to thB
opposition
Opposition Is Victor.
To date the opposition has won on
oil fronts II had all the better oil
the technical argument from the
start. II had the support OF prac-
tically all the qualified financial opin-
ION In the country 1t had the al
most unanimous support Of the great
newspapers II had the support OF
the sblcst men IN 8 Congress that as
a body did not know what 1t thought
or what II was doing II Is significant
that those very shrewd newspaper
men in Washington voted Carter Glass
the ablest Democratic Senator and
David Reed the ablest Republican.
And now the opposition has the
results to confirm its position. The
gold standard was abandoned Is
months ago. The beating down OF
the dollar in foreign markets was be-
gun months ago The dollar
was devalued more than months
ago For months successive issues OF
Government bonds and Treasury GER
tidcates haye pumped an indirect in
flation into the financial structure.
small but steady flow Of silver certifi-
Gates swells the currency daily. But
investment is sluggish, prices do not
respond and recovery lags.
The dollar was devalued IL per
cent. Proportionately, the commodity
price level should have risen nearly
10 per cent. The actual rise since
devaluation has been about 8 per
cent. From May. 1898. to May 1884,
the commodity price level rose about
25 per cent. A major aim of the pro-
gram was a very rapid rise OF agricul-
tural prices as contrasted with all
others. Such figures as are available
indicate that in that same year the
prices Of what the farmer sells rose
about the degree of the rise in the
prices of what the farmer buys.
10 Per Cent Increase in Prices.
The whole program has been
kitten chasing its tail 1t is only fair.
however. to note that general COM
modify prices have risen from March
/. 1888 (the extreme low point), to
June, 1884, about 40 per cent. while
agricultural prices have in this time
risen about SIS per cent.
How much of the general price rise
Is due to the monetary program no
man can say. The individual spokes-
men for the r. F. c., the A. A. A.,
the P. w A., the N r. A. and other
Government activities tend to main-
tain that their respective departments
are responsible for whatever improve
ment takes place The only agency
they do not credit Is the natural re-
covery from depression that is de-
veloping everywhere in the world.
But when the A. A, A maintains that
the rise in agricultural prices is due
TO the processing tax and the rise
of farm products is, in advance of
the rise of other goods, negligible, then
1t inevitably follows that the money
program has reduced agricultural
prices in relation to other prices. The
tlDuS CI6Ws Ol SLdllS-
ticians working for the alphabetical
establishments ought TO make a joint
report on this delicate statistical
problem
There is much more serious issue
than the failure of the monetary pro-
gram TO work out as promised. That
failure was anticipated and predicted
by the economists long since But
the very failure Of the program has
LED It's opponents TO a serious mis-
apprehension. The attitude of the
financial press is very much this: Il
told you so He never touched me-"
This attitude is short-Sighted There
are two issues more important than
the question whether the monetary
program has so far worked good or
harm.
The first of these is the question.
Where are We now?" Reader. do
you know what money system YOU are
living and working and making con-
tracts under? Is it a paper standard
or gold-bullion standard or a gold
exchange standard or a silver plated
gold standard? The most powerful
nation on earth. with the most varied
financial relationships. does not know
what money system it has now and.
even less, what system it will have a
month from now. The money of the
country is nondeScript collection of
irredeemable paper promises, Federal
Reserve notes. national bank notes,
greenbackS and silver certificates.
Back OF this is a sequestered. steril-
lied pile Of commandeered gold.
valued at about SIS 600 900 900 on Jan
uary 81 and about So 900 600 900 on
February /. And recently there has
been added TO this great horde an
unknown amount of useless and dan
gerouS silver bullion, a monument TO
the influence Of politics in economics.
Two Billions Set Aside.
OF this huge sum $4,000 GOO. 900 from
the profits" Of devamstion are set
aside for secret manipulation Of credit