1.5-. 1924

THE CHARLOTTETOWN GUARDIAN

that share ot exchangeable com. Ill‘? 0f the problem is further ob- moulm; m“ i; can 01mm actuulscurud by the fwct that ourL-iiuan- - posseeslon of through tamiqomlcial statisticsdo not- diflsrentifle -,,~ Anytcriedlt obligations a Govmr-gfillgefiil efxlllklll Wealth. which. men ssues n excess of th c 111891! B 00mm‘ 88 ' merely evidence of indebtedltqeslsa, and credit wvbligatioms which, j Germany has today more valuable though classed as wealth are not properly in the possesskm o! he]. such, and we need iurther to have citizens than she ever ‘had before Values‘ lllelwllled. not by a nom-

mon NINE _

-.-._.-s--i_‘_.

(caotlqpeqjrgmjigo l‘) and consequ tiy the right to do

llllllld 801d was rarely exercised, for

_.._ “ out‘ dQfll?"'?/°°.|ll.-“' 9lsth5dfird- As ‘very few persons want sold as ll in he h; i .t h _ lnal gold standard, but b n l 1'01‘ lllilmmel‘ “ml-N s?“ “Jml”; ‘°°mm°dm’- ~ iigstign-i. spaqyibliein Edna-fig)‘: gye "filled "D011 a great number‘) o?

n franc; n mark; a roublenalidcred- But Governments began to logos i; obllgal-lqflfl came tobtymadc out such notes. So long as these were in terms of th ii. actually redeemable in gold no lint, although, Gold _> nlpgi Silver overlsozle could long continue. for t-unle tlitls ‘to be looked ‘u gn ai- any such would he presented for most exclusively is Wind) d: of redemption and taken out of cir- miiio, they yet were recognized as culation. ivlilllilllg tilelretaius an conllnodl- lBut when redemption was res- iitd, and as sboh. iluqtiiated in Lift-ted or withdrawn and an ex- vulue in obedience to tile law 10f cess of these notes was forced into supply nnri demand. in as much. zlleulatiou. that is when the nor- }1\‘,\\'(}\'Qf, osjny‘ change iii their ma-i relationship, which should be value was made evident. only in maintained between credit oblig- llii- rise and full in pride another stiotrl audthe actual commodities, commodities. as a whole. llllybra vras lntgllidini; gold. upon which they .lil(l ls a tendency to overlook this TOll, was seriously affected certain ;;-,;-i_ Ag exemplifying sluchjfluctu- rcstllts necessallly foliowed:— uiiull. townrdi the middle of last lat. The over supply caused a i-onturyJlle suilill’? (If dlivebiargely loss of value on the pal-t of cur- rency as compared with Commodi-

inl-reased ancig-Jita value wrr‘ d- lngly decreased. So long as the ties. T-hat is the price of commodi-

woriihless because they possess no elaille 90111111051159!- oxch»angeable—that is no market- in this itonueotion a uole which able value. appears in IFmnkHn K. Lane's let- in th-lo connection lt is well to let's. lately published. may be 01' remember that ibis appllgq; not omy interest. it reads-‘Page 74~—'l‘o M-ra to Govei-nmom andflank N019; bu.‘ bane-March 1910——Make me pre- elso to Bonds and other securities. Pale ll 180111-18 011- "The 11994 l1! l1 A coal company ivhich issues-bonds world bank-flan international and in excess of what the coul as mined Infill-Penile"! FlllflllPllll flllillfllll)’ will provide for, is guilty oi lnfla- ivhicn ‘anal-i ifiX standards of value tiou though it. ulay have an ex- llfliel-l 011 110 01101119151 01' 601111119‘! seas of coal in the bowels of the it!’ 11111 1111 a HWY-l "ll-mile? "l earth. Just at! a banker is who dis- staples- counts a note oi hand biased upon Bili- Wllllfl We ililillflle llllllll-lml. land in tile ‘North West shunted 100 and seek to safeguard ourselves miles frc-m a railway. Potential from its dangers it is necessary to ivea-ith and exchangeable wealth realize that deflation as u remedy, are -i.wo distinct lihlligts. The poten- if brought, uibuut too rapidly or car- tini wealth of the labour oi’ u mii- n1e(‘ to excess may 19ml w sci-loo... liou men is very great. amounting troubles of another sol-L to more than five hundred millions ]sl__]_t must tend to bring‘ hboill

mill‘: weroopen tofree coinage it for a timeroiaihed its ‘estubilnlied value oi 1d 1611a! bid. I But the niilrts “Bpdqdily ' ; tvllll Bllfpllll Bllv '

found necessary to deny free coin- our. As a result it had to faili to its iitlllliilfiflllléfifi u,co__ _ ity. The Pulled‘ shteslitgeqipte to hpld it .11 the v16, to l1 by con lining the right.“ 1PM cbinile. an when the supply of inintedcoina became‘

too poautivy issuing Silver Certi- ilsuies azaiust sliver “deposited in ks vaults.‘ These too, became tilled, llilil notwithstanding the Country's rllilrztious fllianclal strength it p“ m how to this ia\v'ol‘,suppiy and .l.c-.raud. and abandon the at. ivllllll- li- Willy the chemists were to discover a mehod or prodigy“; KFlil as cheaply ab we can now priillllce iron, it would inevitably become useless as a standard of “llllle- A ‘Pound or coal would be ex- "llllllsod for a pound of gold.

The demouetllution of Silver nzould-have caused a most serious. u not disastrous pnhaflcamqpg or the value of gold were it not ma; another factor came into play. As business and commerce increased notes oi’ hand, (Bills _o£ exchgngg, Jiils oi iading, ihoudg 3nd 0mm- t-rrdii obligations became a form t" fill-hillbilly currency and these lil an ever lilcreasing degree 19g. ~i~llcd the demand for gold, iowerou its vulue and did away with defla- tion. if credit obligations possess dliil retain exchunglbi-lity in full lrvilsurc they would rarely. if ever u» ilvescuted for ‘Yfidflllilhl-Jil in trill l. iluhi-‘icy wem rind pro oblige“ i» u largo degree of uitoerttiuty us my their value which gran iy rm- ulritd their value as currcncy. To \‘\'< Promo this ditllruitynilnlzizi were IlliIhOPlZEZl l0 issue notes {if (yon. Yvillfilll. (|@i10liilfill.l.lGll—-- (promises i" lllly n spool/do sum in gold to l‘~'.'li‘9l'.l ‘ilnese being made a first Qllllliil llllon all tho hanks nsseta, l-lrlr issue bclng ituzriuted to de- Ivitc lllnlt"; utld secured by an ad- ~ illuto redemption iund, pilasorised l ‘Hiillllll!’ lll very large "mess-ore.

tics rose.

2nd} Such inflation did and must. impart that stimulus to trade which ioliows upon a rising market.

3rd. ‘it rendered it easier to l-iq- uidaie existing debts, made pay- wble in such currency, and raised ib'e rate oi‘ exchange in dealing with“ countries on‘ a gold armors nearly gold basis.

41th‘ it ‘tended to lessen the cost o.‘ pwduction as compared with that-carried on in countries on s gold 0r more nearly gold basis,

Thus rnr the results seem so satisfactory to the superficial ob- server as to lead him to conclude that inflation is beneficial, but oth- er results iOllJN which are of a very different character. By import- ing a large element of uncertainty with regard to the actual-l value of crcdlt obligations it does and must.

5th. impair the stability o! all linnncial undertakings.

6h. Dcpreciate the value oi the currency in the markets of the world. _

7th. if not checked lead to finan- cial disaster.

The lflnanciai and business worlds

must realize that financial staibli- ltyuepends upon the relationship which exists between credit ob- ligations. including currency. and the oum oi’ actual exchangeable commodities upon which they do. pend for their value. ‘it requires no effort to realize that the value of a note of hand depends upon the markers possessing saleable-that is, exchangeable asset-g, but few ap- r-reziitto that the same nuic applies to credit obligations of our Banks, Financial institutions and the Nai- lml at large.

A liioverilnten‘ i; issue oi’ curren- i-y notes is theoretically based up- on uii the property of the Country. but the irsopcrty of t-he Country is in tho hands of individuals who have already issued credit oblig- ations illilfiflil upon it—to invali-

er oi taxation would involve colit- merciul lillllkilliilif)‘. All -thnt ii gov- ernment bus 0.‘ available. assets is

date those by the pre cmplivc pow- _

be converted wealth- that is if‘ the men cannot get work-it is worthless. These facts bid us to realize the need of maintaining a legitimate between credit obligations and ex- changesibie commodities. Nations, Provinces. Cities have Wllfllllllblloll 811d ‘f0 been and are mailing credit oblig- to a still lowerlevel- ations to an extent which impairs

commodities the operation of the 141W 0i and Demand and the "prices of th letter are forced up. -

While such inflation

into

for

exchangeable

relation

in other in commodi-

Thus .the

M dmlnéla year’ ‘but H it “mum a fall in the priccoi‘ commodities. 2nd.—-A failing market induces‘ a disinciinadion to trade and prcdltc

es commercial depression.

4th .—

correspondingly

upon which the burden oi‘ the debtor.

What business requires

changeable commodities. wheihe not be disturbed without d-angerou “consequences and, if the Ilbllil-OQ be great, without disaster. ‘in the ever

the exchangeirbl

duction and causes unemployment. F "ml"?!-

is sta- exlst be obligations and ex-

they ‘be satisfactory or not, ca_n-

distur-

rccurriitg aileron-ant disregard of supp] lion of good and bad times in bus- a r m, f; iness may be seen the operation oi‘ a V‘ n u” of cram‘ the law oi‘ supply and demand sce- is recogniz-king to estaibllsh equilibrium be‘ ed as an existing and unwelcome tween credit obligations iInciudingQO 1e M t u, M condition. i?“ h; matighé diviggg currencgguand m l I ‘ n si- ma e mlts. is to replace towards ta n; 41 V1111 E <1 commo es on w Ci tlcy res, cmowraflond m1 Oililflllllllllllell ll M79" m1‘ ‘"79’ is doubtful whether we will everhdjuatmeute baelwei‘; guarding individual interest, not to t wards removing the cause. The nat-i

ADMIRAL srunozs Admiral Sir Frederick Sturdee, Admiral of the Fleet, ha: been in 3rd.-—T-hls in turn restricts pro- "lo British Navy for more than hi"

and is famous for his

Unemployment restricts ¢°m°l|¢l°fl 0f file German raiders rces production "m!" Von Spec in the Pacific in

i915. In an address in London, he

5th.——Further deflation by en~ "I" "w wrwtruetlon of the Sin]- the rates which safety demands hanoing the value to the holder of “P°'° ‘"1"- ibsllrlna it to he the should exist between such obliga» credit. obligations. tious ‘and the exchangeable value renéy, all the commodities they rest. The fact that such ob- ligations are nominally payabic lu b||ity_qahe rates wMc-h gold means little-in effect. theykween cred“ have to be settled

credit obligations or _ I ties which possess value in terms of tifoir marketability. relation which may exist betwee credit obligations‘ and the tvctua comes directly under

including cur- key l° m‘ pacm° “"5 "m" l° i"! increases

PIP! of the Empire

trade with China. ‘unrefined in

g taln a condition oi" eta-hie cquiillbri. “m. but it does lie within our pow. er. in the light oi‘ a better apprec- iation of m9 SISHIIlcan-ce 0t’ the fgrlfiimllS facts to guard against, the "' o 9m fwd Dmlimlod fluctuations which ioilow upon our wilful (sel- fish) even more than our lgnm. the laws which

l.

B

The most effective remedy, om. ‘m9 "5 U19 llllaretlt one of restrict- ill: the issue of credit obligations ° competifion, as rai- as possible. by effect better supply and

b9 “we u’ brmg abm“ “m1 mamfbicmand this it l-‘s that imparts to

‘huge corporations their efficienr_v--- ‘iThey involve grout dangers but t-hey are pointing the ivay to (lie ‘only method by ulenns oi‘ wilicll a .so'.1ution oi‘ the problem may be lreuclied. That is intelligent control lot each country's, and ultimately of ‘Aha world's business taken as a iwholc. ‘Tilc .Bfll'likEl‘-.S Assntlutiiln laud utlici- similar financial and in- dustrial institutions il'i)l\\'llliril‘rlli(l- iillg that lllc-_\‘ are working primal‘- -ii_v_iu tlir- intern-st of ihei i‘.li't* ‘holders urc lilo ulosl. st: ilizlng ‘factors in the Finaui-iul uni (‘nul- |\.l_}"ial 111p iii our ilum-ininu lu- .tln_v. itcsiril-titius are to l.» uvold- ed, ii" at all posilhlv. Wllill U"? world ileedz-i is morn highly organ- izi-il effort ilOillllllilifll by u sonsu o!‘ the llll.9i‘ili‘[)(‘li(lt!iil..‘. ol‘ iuluiau- ity .u.i u whole. The rut-r: is not 1m alggrcgalticiu nt‘ inziirivluuis 1W0 l" strivu cilril ill his own llll4'l'P$l§ but u potetltiul unity which it is lilalrs duly to convert lulu iill ur- ttlulity. (‘militias-illicit lllill. ii\\:.§ llfl control suvi- the IYYP-‘Qlll- Plllllu vil-

t-ruilnn ui‘ lilo 18W m‘ slipl-lj: ullil ileuluiid constitutes u aliiti- ul “all .'. and la the- iui-iling cause u? opt-ii

glmwlllllph allows n hydroland

v. J

tank making l4 knots an hour

‘"5"! u" Fwd!!!» US. navy maneuvers at Panama. Th: fight

int! WQCMW lsldcslljgned fbucitlter land or vvater and in cquippec’ - with 01-75mm. gun in the bow - o

ikllfl

i. mo ‘ m» alive-uh

The fad which originated in Toronto of pasting on the arms and cg: initials of taping and leaving them on until the surrounding has been tanned. has just recently been adopted by

the younger net on ‘the sands of Palm Beach

M50 million an expected to be moved this your. -u-|\ f tail on bullial house

waltiilre. .\lllll is t-illiztlili- u!‘ noun-- thing betuvl- lliilil this. but l.) inuko

mm progress llle lined iilii-lligzvll- cos uilii tiic wlilosl l-xpi-riont-i- must llc cluplov-tllh and iliiortwl with singleucsii oi‘ lllll‘i1<lI~‘-tl. lo-

wurds securing lli(‘ illlhlll‘ Kllvll- _

so long am niltiilllul. irlusii or pin- vute interest LZUIWI lites "Hill"? muin objective no sulislitt-tolii sob ‘utiou oi‘ them ilroblrnls can l.-.~ o ~ iiaiiloil. Our hope lies not so lllllPll in restrictive legislation as m luflli- cation. Two thing/s are llarllvuiarll‘ §needed__qoncra| enlightenment and the development oi a type 0i 1119"- in both governmental and business

irircles to whom the large execut- ive powers. essential to efficient administration. may saiitely be on- urn-shed.