The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1934-11-10

SON-
eminent econ
omy and a bal
anced blu d get. 1s ~
Why? Which ;. wa
of us is right?
The great Lewis haney
reason is that the French are a
thrifty people and have been so
burnt by their experience with
: initiation that they don't want
any more.
- So I would put first, their
desire to avoid the further in
jury to the people which comes
from initiation or devaluation.
They have had enough expert
menting, and want no more.
: Next, they want to make thrift
and saving possible. The typical
Frenchman is saver, and very
large number are holders of their
Governments bonds. They know
that if the value of the franc is
reduced, the value of their bonds
will also decline. They know that
savings are not safe when infla-
. ton is under Way-that like a
2 thief in the night, initiation takes
away the purchasing power OF
their money.
So the French take the course
of holding the quantity of
: money in circulation down to a
figure which can be reasonably
covered by their gold reserves.
They do not say, eve need more
money" They say, 1--WE want
to have sound and stable money
money which is as good as
gold" And the only way they
know to make francs as good as
gold is to keep them convertible
into gold.
You see, one way to remedy a
condition where so much currency
has been put in circulation that
it can't be redeemed in gold, is
to reduce the amount of currency.
. Bring the volume of notes, ETC.,
down to a figure at which the
gold cover will be sufficient.
Of course, this means lower
prices, and that is what the
French are accepting. The lower
prices are the less money we
: need. The lower prices are the
, more goods a franc or dollar will
= buy.
When a nation finds its prices
inflated and high, it means that
its money will buy little. Such a
nation can do one of two things:
. Cd It can manufacture more cur
rency, with the idea of giving it
to the people so they can stand
the high prices. 90 1t can re-
duce its currency so that prices
will fall, and then the money
people have or earn will buy
more.
We are trying the first expert
ment. France is taking the Sec
, ond course.
The great trouble with our
method is that it always defeats
itself. The more currency we
distribute, the less the purchasing
power of the dollar becomes. Then
prices rise, and our money" soon
buys less goods than ever. Only
spectators and a few of the large
debtors are benefited.
The French say, 1--WE will get
prices down, SO our thrifty PEG.
pie can buy goods. Low prices
will make low money wages pos
Sible, so our employers can en-
plOy more labOrerS."
Then, they say, our Govern
ment must economic and balance
its budget. They have learned by
experience that when a Govern
ment is spending more than its
income, it has to pile up debt,
which means that it Cd either has
to issue "greenback" notes, or 90
it has to issue bonds which are
made the basis of bank notes.
Both are equally bad, and mean
initiation.
eve are at present taking the
second courSe.)
And Of course, they know that
the more you initiate the currency,
the higher the money prices and
wages become, and that this fur
Their increases the Governments
money expenses. This is illus
trated by the Presidents recent
announcement that the salaries of
Government employees will be
raised