Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1950-09-21
Printing Press Money

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WE HAVE HAD some experience
w with initiation, but never of the
runaway kind such as that of Ger
many and France, following World
War I, and that Of China at the
present time. Ours have been minor
compared with those of other nations
and have resulted from an uncon-
trolled amount of printing press
money that had nothing of tangible
value to back and sustain the dollar.
We had unbacked printing press
money during and just after the
Civil War, and with it had initiation
The earliest case of initiation
in this continent dates back to 4
1928, in Virginia colony, accord Z
ing to life insurance company
records. Those early cOlOnials
had nothing but English cur
rency and not much of that. I'm
der such conditions, they found
they could exchange tobacco for
commodities. They could raise
their own money, and tobacco
became the money OF the Vir-
ginia colonists. In 1923 they
could exchange one pound Of
tobacco for commodities they
desired to the value of three
shillings, six pence of English
money, about 80 cents.
Each Virginia farmer raised his
own money, and year after year,
he increased his production of to-
'bacco, but he decreased what each
pound would buy BY 1865 it took
AZ pounds to pay for what one pound
had purchased in 1923. The amount
Of tobacco had increased much fast
er than the commodities for which
it could be exchanged, and the pur-
chasing value of the tobacco money
dropped That was initiation due
to too much money.
There must be back Of money
something that gives it and main
tains for it stabilized value, some
thing for which money can be ex-
changed that has such a stabilized
value. For many years, we. like
most other nations of the world,
used gold as the tangible value
back of our money. For each % of
our dollars we could, if we wished,
get in exchange, an ounce of pure
gold, and that ounce of gold had the
same value throughout the world,
maintained because each govern
ment agreed to buy gold at $23
announce value.
sThen in 1892 we raised the
price we would pay for gold to
81 an ounce, but at the same
time we repudiated our agree
ment to exchange our printing
press money for gold at any
price. Under such co=a;ti=----
our money had no real tangible
value as 1t was backed by moth
ing of tangible character, only
by the faith of the people in the
integrity and permanence of the
government. With those chang
es, the actual purchasing value
Of the dollar dropped to about
So cents, and that was initiation
caused by unbacked printing
press money. The dollar would
buy only about two-thirds of the
commodities it had previously
bought. The printing press dol
lar was backed only by faith in
the government. 1t could not be
exchanged for anything that had
worldwide stabilized value.
! Because of the devaluation of our
money in 1882, the government re-
ceived during the war only So cents
or less Of value for each dollar it
spent. The people purchased gov
eminent bonds with 63-cent dollars.
We cannot afford to pay off our ire
mendous national debt contracted
on a 63-cent-dollar value, and so
cannot go back to the gold standard
at the old price of $23 an ounce.
We could go back to the gold
standard at around $33 to $35 an
ounce for gold, and pay off the ma
,tional debt with the same kind of
dollars the government received for
its bonds, which are also but print
ing press money. Al, effort is now
being made to put our dollar back
on the gold standard at around $35
an ounce for gold.
We must either do that or face
the grave possibility of an uncon-
trolled initiation caused by the con-
tinuous increase in the amount of
printing press money in circulation,
that provides us with more money
with which to buy the commodities
that are not produced. That could
happen quickly, and the purchasing
value of our unprotected printing
press dollars drop to practically
nothing.
We cannot establish wheat, corn
or cotton as the tangible value of our
dollars of to-day, any more than the
Virginia colonists could stabilize
the price Of their tobacco dollars.
Our American money is faith"
money, so designated because we
accept it on our faith" in the hon
esty and integrity of our federal
government. That is all there is