Newspapers / The State’s Voice (Dunn, … / Nov. 15, 1933, edition 1 / Page 1
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..-a** •-t FOR THINKING PEOPLE NrC.,’NOVEMBER 15, 1933 ■ Avf.. NUMBER H 't This, artiele ls'~ answering anargu- £| meat against inflation of the currency ’ ^ priblished by Oaret Oarrett in = the ; rf Saturday Evening Post, of Novfflitei -4, That article is baaed upon the fts- A - ■ sumption that (money is a^ahere me»^ ytfr» of value. Mr."Garrett’s argument and illustratons based upon thgt pro inise are puerile. "* Buyers do not exchange yardsticks L"tor cloth, bushel measures for wheat. One yardstick in the hands ’ 'oT '"a '? *..merchant will measure a* thousand bolts oil cloth. The man (who would v- •?buy five yards of cloth at a dollar a* yard must himself have five dollars and pass them over the counter." 7c.'. About Varying Units'of. Meastff* . ' ' < Mr. Oarrett scorns the*'idea-that bnsness may be improved and Jprbs perity restored by merely calling &• half-yard a yaid: He Insists upon; the - ' necessity of an invariable measure;-, | -much importance is attached to . the maintenance of an Invariable K;; yardstick that the standard yardstick ? ,|S 4)re«erved in a -glass case at Wash 7 inigton as if a treasure. But the gen- ; Vf " tleman is as blind to the fact that 'ea^newxs^itoftneniee« 'fimay K&viae at Variation in . the length of t jx, a t * n t a tt d a r d yard-stick as he r is - i ■ that money is more than a measure of value. In Paris, the standard merer - & measure is similarly preserved. Put .ft' has —been decreed- by, government J v. that the standard meter nnit is ac* rentable as a measure of length or ’distance at only a definitely specified ■ temperature. ' .TT.t v Heat that’ standard meter to- a * ♦ blti* glow and *t wonld be false: elifj* it to 100 degrees below aero and C It a false. Yet not one Iota of change f;\ bis occurred In the'quantity or the ‘_.-vquality of the material of the rueaa-“^ ure. Accordingly, to possess an Inra : * 1 riaWe measure of value, Mr. Garrett ' > must look1 to more than the quantity and the purity of the gold, say.-of which his unit is composed. He must .guard aeainst extraneous influences which' as truly, produce variations as ^ the degree of temperature affects the variableness of the standard, meter . jrtick. Management is required. Main 30 tataim?- that meter measure at the. - prescribed temperature is absolutely y. an act of . management, 9 management O decreed by the very same authority^ .... -fhat decreed the unit, itself. And .a inore exact arid invariable measure of ' • length than that chosen by the French. _ ' government for the meter ^hoiiid be ■a' ' discovered, or f i more convenientl ^ length, the same mannrrinj? "authority1 ..$f could decree its use. Mr. Garrett .Is risbt TovaTi’aWeness In -ft measure ;is.f 1 ,v altogether desirable and essential. All ; accidental influences affecting its: in- j tegritv as a. measure mast..be/eiimi- * '%/ nated. Bnt the gentleman fails id gee that it requires toana#etobht to maln ;r tain the tnfariaWUty !and- not a* mere; ' dependence Upon the material of which J.jt COnSljdS. ' //./; > If Money More Than a Measure of Value vp. (?rant M£;' Garrett’s assumption. j?f'/ that iboJtey is a measnre of valne.' Yet - ' money is more than that. It. is at, ■;c. least a renresentaffve of value.1 Tbet ♦ government has decreed that the dol | ■; lar fa. in effect, a mortgage upon- any |?£.'vendible article 'to the extetot of/ the • . value the dollar jermesents. It 'p- tecal tender for both’"debts and fren- / ;M diwea. in the domatos of the #overn f -'ment anthoriatog'i®3ssU«t Yard sticks ffc;:are~not.• r ?*;%:~ ■ C,r'; ! •- wSomndw money exrwnentfi mpto/ail , 4rj Mr. Garnett. contend that monej. per t a. we. mnst possess yalne and th#t Its ; far leapl tender value and its inotinslc value Should accord. Vet they Insist ^ i" onlr that the amount of money1 toff- : |:*>ttrfal in the anit shall be Invariable, not the value ob it President Roose velt, on the ether hand, is seeklngj just as did the French government In respect to a convenient and invariable unit oflength, ^.convenient dollar •» “valuekvflrst, and^theft ijtsjWtntfinaiiceS aft that value, which is certainly quite * ;;a different thing'from that ungedby Mr. Garnett, as the following .cohsid- • erations twill show. **- --- -- Use ef a Material for “Sound” Money Controls the Supply and Demand > For that Material -There is no need for: ah argument of the question of the validity of the ' law of supply and demand.. It stands^. Yet the "very use of any substance scarce enough to be-used as a “sound” money material s develbpe^ltS demands by that' very use/TJtterly demonetize 2' gold forever andtomorrow men-would ~ bei lm wking gold dollars / for’ silver - ones. Not only-dwthe real valu6"'of “ gold controlled by the supply existent but by the 'ffegTee of/hoarding of . that supply. The Kimberly Diamond Com- / pany has maintained the price of dia monds by withholding froin the* chan nefe .qf trade great 1 quantities of South African-, diamonds. Gold, like:: diamonds, is readily hoarded, monop olized, or cornered by .those whose In.- . terest it Is.. to maintain a. high price -level for it In terms of any other eoan-j. modify or of service... That would be. Arne even if gold wergoot a money /Bat wherein the demand for gold . is particularly divorced from the nafew .msffl law* of supply and demand Is t» tire fact that^ il§ very use as money, j the supposed .invariable measure of • values, creates an artifieiai demand for the metal, Thus the. money metal : has the power to lift itself by its own bootstraps.- Bat jthat is not all. Ifci.;. use as money makes it a more, fit substance for hoarding and for man--, ipulation. If using half the. gold sup ply as money raises the Value of gold * by increasing the demand, using three fourths- of -the supply would still fur- . 4ber increase the demand and lessen the supply* again raising Its -value. (Unfortunately," nven. in America, the volume of .gold. .used>hs money .a nd ’ of- currency supposedly based upon . gold has been subject to manipulation by the jmonopolists of the metal and by .private agencies intrusted by. the - government with the. issue of the cur rency. - ^ • Withholding of gold money, or-the ? .currency based »open gold, from, eit; jculation through a monopoly which Capbe byokenonly bymeans of loans Upon the monopolists’ own terms is . as effective in> increasing:' the demand ; for gold and raising it's comparative yaliie hs the absolute- non-existence of » that cold would be. : When Joseph' • hoarded the wheat of Egypt. the priee V went shv-high. Mep even sold all they possessed and: . enslaved themselves ;• .apd families for the minimum reauir-. ed.hy necessity. The supply, and there fore the price, .was controlled not by the supply of wheat existing but by the will of the lord of the - wheat. - Aipericans have been as ' effectually poyerty-stricken and enslaved- by the • /money lords. rk\ , The insuffeiency of: production iinr-5^ ing the seven barren year* to- supply *; the demands of the^p^tion,; .con- > stantly increasing, gave Joseph 'the r power to enslave .Egypt, which, pow er,, it Is regrettable to say, he. did nob . forbear to use. . Similar conditions ..have , given the money controllers the ; same power over the American peo-~ pie. They .have used if as relentlessly as did Joseph. _ .--- * - - ^ ^The- Task e£Manage*nei*t. ~ - sOhe little precaution is all the con trel needed tp maintain the standard meter measure at an invariable length,-j Bat it la clear that dozens of control _ . measures are necessary to maintain a ; measure;t? yalues at an invariable, standard. - And -the more precious the ; money material the more management is necessary. On the. contrary, a ; money that possesses no intrinsic value; hut only represents value, may be reg ulated through the simple process of accommodating the Supply to _the de mand at the .'point of ■value in- terms •"of the average price of a number of staple commodities.. That much' l as • -to be done in cage the money material has intrinsic value, and .forty other things beiRies. Accordingly," if would . Seem that the" easier way t to maintain ; I an. invariable, hr - approximately in ■ vadrtable, measufd of value'in the .form of money, is to discard intrinsic values 1: "altogether. Gold-by oveight’and purity might still be used in trade, but only upon a barter hn&is.* It. would not have the advantage, of being able to lift itself by the very force, of - being stamped as money, tike wheat, cot ton, and other commodities, it would be governed-truly by the law of sup - ply and demand., . ■ Examides of the Inflation of “Sound* fpri; Money. rlr'0: • There was a instinct ’ inflation of .nwsnhy when the gold mines of Alaska ■ -and - q£- South. Africa.. wterg Jg flush. There was a distinct inflation- of mon ey during the war period. The value, of,, even the gold dollar was cheapened. •The 'best criterion of value is the cost of - replacement. Oh that standard, a gold? dollar Iwohld" not have hired the mining of the material for another in 1919. tSold mining was almost dis continued, Last. year, a dollar hill; and only recently one of" the ■“feheap”' American dollars, would pay for the mining of the material for a gold' dol lar from the abandoned mines of, the. country. iGold mining became popu lar even in Bandolph county. By v the bej3t criterion of values, replace ment’cost, the gold dollar hah1 varied ■ much within- the, past fifteen years. - jBui there s. ig ,a ^lassie example, whether historical,, or apocryphal. It’ is related that the earlier European exploiters of the-Indian fur frade in Neiw England\found the Indians- using 'wampum shells as ‘‘sound” money,. The shells were valued as ornaments, and- were scarce. The intrinsic value. of gold, apart from that , value added : •hy "its use as a^money material, is due to those v«ry two characteristics. ,; The exploiters, having means of travel and conveyance, went down the-coast to where -tile sheila were- abundant and brought back a load-: They cohse Quentiy ruined the Indians’ money by inflation. . Control was lacking. The •di»eovery: ~of a mountain of gold ft*, day-protdd .destroy the value of gold tomorrow. Inflation. can occur with ‘ the currency based Upon the most; precious of' commodities'; also defia- : tion. Management most control the Patae-of &e unit of currency, what- ; ever the material of which it is made. .Jibe Jastireeflrtflation. -An occasional individual may be in-’ iured *t>y Inflation; (But the only in- . jury that chu^occnr to a possessor of* cnrrencv or- of solvent Credits, through an inflationary “ process must he ^ wrought altogether through /decreasing . the buying power of 'those dollar*/ lint that injustice will be wrought by any process that 7 raises commodity-" and service prices. .. If Mr. Roosevelt - succeeds in raising prices- to the parity lerel ^onsiht throngh bis' NBA and other schemes, erery p o s s e s s o n. or. otLa dollarjsMured. before the rise of the level of prices, even of recent _ s-'&hu V, /, , PLANNING. ; v %. .The Editor la asking the sub-' seribers. to excuse the half-size paper this time. He had to take; tine off to view the horizon and to adapt plans for next' yearte changed conditions and in vMr * of tlie experiences of the initial' year. r? - •• Hie first year of the Voice ex-:' piles with the Jan. 1 issue/and It is time that consideration be given, * . to tile future form of the paper, , Hie next year’s Voice may see rad- , ical changes..It \yas launched and . toe been operated against great odds. Adaptation is necessary. 1 TOhen the plans are matured. tQp " editor-pubiisher hopes to ,be freer* ■ to give Wore attention to pian • ning.the • paper.' '■::'4}■:"■*. ’ ’ y. '»i" ■l.>!lli.i.r'»y.».^ try* • •' rises, receives all the injury that . a v e out r‘o l l.e d inflation would ef fect. Yet all the. administration’® _ schemes, for raising prices must first , counterbalance the bearish influence of a deplenished etfrrehc^ supply. It is possible, then,' that the President must yet resort to inflation to obtain the parity of - prices he seeks. AH • agree’ that parity^ prices are .desirable and. ncessary, -Then, if inflation to' ..necessary, to secure Rarity in flation is desiraMa V , Is' the. President AttwoptShg the /I T^r ImposdWeT *■■•■■. The writer feels that the* PresideftC is attempting an impossible fljing ha attempting to raise commodity prices by cheapening the" Ame/ican dollar in terms of gold. - It 1s notjeheap money that makes plentiful mobey. On ,th« contrary;, plenty , of • money ...make® cheap • moneyr-whatever the material of Which it consists or that upon which the currency, is based. Cheapening the dollar is not multiplying the dol lars. Pirices have not responded'to fchq cheapening of the dollar. Cotton is only bO per cent higher “than’ Wet season. If the increase is to at-, trihuted to the cheapening of the dql*; iar, what ir the use of the .reduction of acreage scheme, the various, codes and other means inaugurated! tQ. re store purchasing power, and. thei^ fore to raise _comtaodity prices? This, article is written before It is seen whether Mr. Roosevelt can dis prove the quantitative ; theopy money by substituting the cheapening process for the process of multipliea tion, or addition. - Tberesulfcerf'hi* ■ process thus far _favQr tbqr validity of . the • quantitative- theory.- T£e cheapening process hasn,t .-worked ^et, I# it h does prove to; be effective iia .price raising, the PresHent, perhaps nnconerionsly Or unintentionally," will have settled an . age-old dispute—' whether the buying power of U dol lar depends upon the intrinsic value Of the material of the dollar or upon Che number Of dollars in > actual cir culation and the speed-of ibai. ;<djpcjB lation. In fact, the. President’s., jjt teanpt, {whatever the . resold, should settle, oneway or the.oilier, the Valid-1 ity of the .Quantitative theory < of.: ^jadhey.'"'' vvsV-T’ .Finally, no one holding dollars ox solvent credits acquired before 1800 'can receive any Injustice through the degree Of inflation necessary to re store parity prices. Whatever valpe his money or solvent Credits possess above their value in 1029 has beg* unearned and- instead, of''inequity -..ft ■jg equity to tafce away that value ob tain od through circumstances that ‘ poverished millions—yes, tens pf m.
The State’s Voice (Dunn, N.C.)
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Nov. 15, 1933, edition 1
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