Show DISASTER WILL SURELY FOLLOW FOLLO Continued from Page 1 The New York City bonds are of ot the highest hl hest character and would ne no necessarily be Included Yet Tet of ot those It I should be said Eald that the 3 per Der cent some years ears ago sold for between 10 and 11 while today they are selling at 65 and New York City is finding it i difficult to float foat the new loan at 6 per percent percent percent cent This sort of ot Inflation must be stopped Bank liabilities whether to depositors or note holders must be based upon gold not upon fluctuating credits Expansion Is simply increasing IncreasIng Increasing ing Ing the liabilities of a bank without a a corresponding increase of ot cash cah reserve and this may take place although the reserves be In gold coin It I Is simply a question of ot the relation of the liability to the reserve and not the form orm of ot lia ha liability la Definition of Inflation Inflation on the other oher hand Is bas baa basing ba baaing ing one credit upon Ullon another It I is wholly Immaterial what the basic credit Is whether a government nt bond state bond bond municipal or a n railroad bondA A cashiers check does not lead to expansion nor inflation for the reason that by the very nature of the Instrument Instrument instrument ment It I is sent ent fent home for redemption at once bank holds a cashiers cashiers check r of the weakest or the strongest bank as a part of its Is re reser reserves serves servas s but sends it to the banker as ser directly and swiftly as possible for re ye redemption red d n A bank Issue consisting of cashiers checks payable to bearer will wi always keep the currency of ot the country down to the lowest st point of ot necessity and yet et will wi always meet the largest demands of trade and com corn commerce merce merie The entire entre banking resources of the world aggregate about 3 Of this Is II employed In foreign countries and In Inthe Inthe Inthe the United States Of Df the 00 employed abroad about 25 per cent consists of ot credit credi bank notes or cash cashiers cashIers cashiers checks or current credits credit While with our enormous banking resources which exceeds of the entire entre banking resources of ot the world we have not a single dollar dolar of ot such currant current credits except the clearing clearinghouse cearing clearinghouse house certificates and cashiers checks now in circulation I I however although previously hostile to Franco was impressed his ability and sincerity and refused refuse to allow him to go On the contrary un under under Under der a clause clauso of the constitution which virtually suspended the legislative branch of ot the government he granted Franco power to govern by decree decree Ample precedent existed for such a proceeding proceeding Bold Work of Franco As dictator Franco boldly began work lie He stopped graft right and left and did Ild not hesitate to liquidate the royal debt by decree and he Increased the civil list on the ground that the royal dignity digity demanded that it should be free treo from monetary em om embarrassment I should At the same time he put a n system of ot public accountability Into operation which would end the th practice of ot making advances to the king He also Increased salaries of or orthe the l government employee and the officers of the army yet the thenet thenet net of or this adjustment Is said to have been a R reduction in the tho th de deficit of The leaders lEaders of or the old parties who included members of the oldest Por lor POI se nobility naturally were W le fu furious furious furious rious at the premiers course At firSt could that they they were w re confident succeed in persuading the kin klu to un nil unhorse UI horse hol France Francol They The started start a news new newspaper paper pp r agitation n and provoked the tle so demonstrations called caled but ar they the made little liflie head headway hO headway way Only the Republicans seemed to tobe tobe tobe be the gainers and they not t to any great gret extent extent Republicans Are Few The Time leaders l ders Machado and Castro bore bor witness to the justice of or Premier Francos charge against the old par parties partes parties ties tes but they that this only proved the Impossibility of continuing a regime and they also al declared delare that Francos profession Droe lon of IJ civic virtue was wa a travesty They Th y se secured secured cured Important accessions to their party notably Senor Cunha who re recently announced that he could no nc longer support absolutism and would become a republican but outside of ot Lisbon and Oporto where whore J Ism lam liar bar ha considerable strength persons familiar with the situation say sy there ther Is little republican sentiment The hope of the old parties That King King Carlos Caries would abandon Franco has hc been boon rudely shattered by his recent reee t interview endorsing the die dic dictators policy polley and announcing his lila in intention tent to see him through t th 1 present acute phased phase pha The old parties parte with their backs to the wall wal are aro lighting fighting with wih redoubled energy and ane shifting their attacks on the king on the ground that he lie Is exceeding his con constitutional role but Franco with his tightened on the reins while permitting free criticism of ot himself him lt has forbidden criticism of the gov government government suppressing suppressing newspapers vio vie violating hating lating his Injunction and when the re recent recent cent bomb fiasco occurred he instituted a summary trial to 10 try anarchists and amid offenders against public security He prohibited also speeches designed to inflame the populace It I is 1 understood that Premier Franco Francos Js s now confident that a government majority is in sight and he expects to tobe tf tobe be able to hold the th elections in March |