Evening star. [volume] (Washington, D.C.) 1854-1972, 1936-11-08

The relation OF money REFORM 10
icar and other Dorld problems is
discussed here BY the distinguished
Yale University economist, tDho has
Just returned from an extended
pisit to Europe, Uhere he and an
aide made studies OF the none
taru situation in ~ countries.
BY PROF. IRVING FISHER.
NEW HAVEN, Conn, November
(NAN Is happening to
the worlds money?
The sensational newspaper head
lines few short weeks ago announcing
the final surrender of France to the
long pressure on her to devalue the
franc have now been almost forgotten
in Europe, as in America. The re-
assurance that this would not precipi-
tate a currency war" of further de-
valuations came quickly, through pub
lication of the "gentlemen's agreement"
between England, France and the
United States.
This significant though not fully
disclosed action also has now been
accepted as q matter of course; also
the devaluations of Switzerland, Hol-
land and Italy; also the addition of
Greece, Turkey and other countries to
the two dozen countries already con-
shutting 'sterlingaria, the group of
countries attaching their currencies
to the pound sterling; also the hints
of a possibly variable price of gold
which would mean a variable gold con-
tent Of the American dollar, the Eng
lish pound. the French franc and
therefore of all the other monetary
units now tied to the pound.
These unprecedented events can
scarcely be without great and perma-
nent significance for the future. II
they are milestones on the road to
some goal. what is that goal, and is
President Roosevelt's reelection new
milestone on that road?
Many Interviews With Bankers.
1t was my good fortune to have
been in Europe when these milestones
were reached. My able assistant.
Hans Cohrssen, was also there. His
special job was to report on the
money problem in seven countries, in
addition to the FIVE visited myself.
These reports and our many inter-
views with the heads of central banks,
as well as with many other bankers,
business leaders, Government officials
and economists, point rather clearly
to the goal toward which, in all proba-
bility. not only Europe, but all the
world is now travelling and travelling
fast.
No Interpretation of these events
can disregard other problems besides
money. There are at least five great
international problems now troubling
Europe: Money reform, recovery from
depression. tariff reduction, what to
do about communism or fascism, and
how to escape World War. These
are all closely related. To solve any
one of them would help solve the
rest.
1t may seem far cry from money
to war But few years ago it seemed
a far cry even from money to de-
preston. "The depression" we are
told, has nothing to do with money"
One Of the chief results of the French
devaluation and its sequels has been
to spread the idea that monetary
policy. especially the pricing of gold,
has great deal to do with the de-
preston. The fact that devaluation
raising the price of Colds related
to and very similar in its effects to
q tariff has also become more obvious,
now that France has lowered her
tariff to neutralize the effect of de-
valuation on the cost of living.
Depression, Discomfort, Linked.
The close connection between the
depression and social discomfort, out of
which comes the class struggle be-
tween communism and other forms
OF government. is also being realized.
1t is being seen that, indirectly, none
tary imitation and deflation have unset
many governments-in England, Ger
many. France, and even the United
States. In fact, Russian bolshevism
was, as Lord D'Abernon pointed out
is years ago, largely product of
wartime imitation. Finally, we all
know that the present danger of war
has grown out of the communism
fascism struggle and so harks back,
In part, to money.
These are, Of course, only q few
among many interconnections among
The five great problems pressing for
solution in Europe-and Asia. Great |
efforts are now being made in Europe
to solve all five, lest soon Europe may
fall into general cataclysm of ruin. |
She cannot be expected much longer
TO stand unstable money, depression,
high tariff walls, class hatred and
for war. But Of the five
problems, that of money Is the one
which, just now, seems destined to be
on its way to the speediest solution.
1t would help nightly If Germany
would join in with the United States,
France and England, as Italy seems
to have done. and so with
all sterlingaria. Germany's money is
now in a perilous state, with Is sorts of
marks" very meager gold reserve.
\ dangerously rapid increase Of gov
eminent short-term loans at the
and, dependent on these
loans, specious recovery from de-
preston. Germany's frantic desire
for raw materials from abroad may
drive her to war If she cannot secure
sufficient tariff reductions and trade |
such as that just effected |
with Canada, and wean her industry |
from the government wet nurse.
Devaluation Brought Recovery.
While few people yet see very clearly |
The relation Of monetary reform to the |
other four sorts of reform so sorely |
needed, its relation to recovery from |
depression has been increasingly In
evidence for many years. Even In
France we no longer hear. 1.-THE de-
preston has nothing to do with money |
Or the price of gold" France. has
been forced to witness the fact that
every country. without exception.
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