Evening star., 1938-07-05

test, but opinions
will differ as to whether the Amer
lean people, in a long range test, will
come out in the black" or in the
red"
To take one yardstick of measure
ment-the one that has lasted from
the most ancient times to the present
namely gold-the annual income pro-
duced each year by the American
people is nowadays paid for in much
less gold than before and the ma
tional wealth. measured in gold bars
Is worth ever so much less than 1t
was in 1888, when the Roosevelt ad-
mlnistration began.
To illustrate: The national income
produced in 1882 would, if converted
into the yellow metal. have been ex-
Changeable for about 1000 100000
ounces of gold. This year, namely
1888, the estimated national income
will be eXchangeable for only about
100000 900 ounces of gold. So, meas
ured in gold, the Nation is not as
we'll off as it was even in the Hoover
year Of 1882.
The natural rejoinder to such an
appraisal, however, is that the paper
dollar and not the gold dollar is ac-
tually in use and that it doesn't make
much difference what amount of labor
you have to give to get gold dollar,
Its what you have to give to get a
paper dollar that counts In other
words, it is pointed out that the pur-
chasing power of the dollar has f1uc-
tuated very little. even though it takes
almost two paper dollars to have the
equivalent of the old gold dollar. That
Is true. But using a long-range test,
which is what Mr.. Roosevelt suggested.
purchasing power of the paper dollar
must remain steady over a long span
of time History shows that it doesn't
remain steady when the government
which issues the paper dollars keeps
on spending more than it takes in
Sooner or later the paper dollars grow
to be worth less and less, which is only
another way of saying they buy less
and less.
Must Be Retaliation.
This comes about because the people
eventually realize that there can never
be enough tax money produced to pay
the big annual budgets, and that when
expenses are not cut, but spending
continues unabated, there must sooner
or later be revaluation of the paper
dollar by the people themselves
AS matter of technical truth, we
nave devalued the dollar to a gold
content Of about 60 cents but we have
as yet no such thing as 60-cent dol
Var in purchasing power When devalu-
alton takes effect, and it may some
day if budgets are kept unbalanced,
the American people may become
aware of the fact that their dollar has
come down to so cents--that is, it will
be buying only so per cent of what it
Csed to buy.
To devalue down to so cents" in
Actuality is the next step in the long
range process and this will be felt in
the gradual increase in prices of goods,
services and commodities. Just now
there are signs that the process is
about to start. The stock market
prices are rising. Soon this will be
followed by gradual increases in price
sf many necessities of life. Pump
priming" always at the outset gives
ehe impression of real prosperity. Fac
tories begin to hum, orders begin to
rome in and the people begin to believe
they are making real progress Then
comes the relapse, as it did in the
latter part of 1887 and in the fore part
pf 1888, when orders drop on the
average Of about so per cent and the
decline is precipitate in almost every
hing.
Pump Printing Temptation.
The temptation is to cure this by
another dose Of pump printing" but
on the long-range side the people
gradually wake up to the fact that
their monetary unit is being depreci-
Ated. For there's only one yardstick
common to all generations and all
imes-it's gold The world has been
of the gold standard in innumerable
instances. But it always goes back
This does not mean that monetary
Anits are necessarily made redeem
able in gold. But the yardstick or
measurement basis is always gold
value. Even today. when nation de-
values its monetary unit, it is usually
In a ratio to some gold unit some
where
When it comes. therefore, to sur
Sival values" the American people may
De comforted by the fact that they
A,,,e 1o+e of y,,o 1pro,,pdc lote of oood
booking Office buildings for the politi-
clans, nice post Offices and bridges
and roads, but unless wealth is being
produced annually in greater and
greater quantity and requiring less
and less energy per man, there is nc
zeal gain in the long-range balance
sheet of assets, What is happening
produced, the output per man is moi
as big as it must be if prices of goods
are to be lower. The crisis comes
finally when the farmer who gets less
and less for his bounteous crops trie.
to exchange his produce for city made
Foods which are offered him at price.
10 high as to be out of reach because
labor costs have gone up without ar
Increasing amount of output.
The Presidents theory that larg.
volume and low prices go together
Is an excellent doctrine If he woule
apply 1t to all things, especially
the products made by labor. If. as il
desirable, wages should not be cut bu
maintained at higher and higher lev
o. L..