Show A GOOD WAY TO UPSET PRICES further exposures of how edi edl sonford son ford money plan would fail fall to aid farmer tho the way the edison ford commod mod co ity money scheme ic hoino aimed to stabilize monetary values woold have exactly tho OP opposite effect Is to discussed in the present article which Is tho the second dt la in a series aeries prepared by the american junkers association reviewing the ex lox rosuro 0 of the weaknesses weak of the plan an presented by william T poster director of the pollack foundation tor for economic research briefly elated stated tho the edixon ford plan provides for Clove government ramont warehousing ot of basic commodities against which currency would bo be loaned to the pro ducer without interest Inte reet up to halt hall the th average value of the products tor for the previous loue twenty five years this currency would be cancelled as 03 the commodities were withdrawn and passed into trade on tho the other halt of the value the producer would receive equity certificates which ho be could lell sell or UBO use for or bank loans on thes these points mr foster floater says upsetting equilibrium steady price levels depend mainly on the balance between tho the volume of goo goods do on the market and the volume of money offered for goods the edison plan Is designed express el press ly to to upset the balance A farmer delivers say two thousand bushels of wheat to the Go government warehouse ware and the government delivers one thousand dollars in new now money to the farmer when tho the fanner farmer nells the wheat he repays the loan and the GOT ernhout dest destroys the money thira thus the volume of money Is increased precisely when goods irre stored and the volume of money Is decreased precisely when these goods are marketed in other words each transaction bekins begins by placing in circulation goods 1 without money to match the goods dollar demand Is to created as the supply 0 of f goods Is to withdrawn the sup au ply of goods Is in created as dollar demand Is withdrawn would it enable the farmer to borrow more money on his products than he can now borrow when mr edison contends that farmers would obtain larger loans on their crops than they can now obtain from banks he Is confronted by this dilemma either the banks are now refu refusing I 1 to make sound loans or under the edison plan the government would make unsound loans neither mr edison nor mr ford can c an consistently contend that banks now refuse to make sound loans tor for that at la is the way banks make most of their profits and mr ur edison and mr ford have no doubt that banks are conducted for profit it follow follows a that the plan would yield larger loans to farmers only it the government met the risks of or unsound banking in that case all that insolvent borrowers gained would be paid by tho the real reat of the population which to say the least li in not a fair deal cutting down farm credit apparently however the government Is not expected to run many risks tor for the farmer Is in allowed to borrow an amount no greater than one halt ball the average value of his product for the previous twenty five years but prices have risen so high since 1896 that the farmer could bor row on most products much less than half halt the present value of the products it would be much less therefore than the farmer could borrow directly from tho the banks on an graded products on an products not graded no govern ment loans would be made for there would bo be no way ot of determining the twenty five year price average Illo however wever the farmer having obtained the stipulated government loan on his goods could then offer his equity certificate to a bank for an in additional dit ional loan but the equity certificate ie Is virtually a second mortgage and no bank would prefer a second mortgage to a first mortgage suppose the old national dank bank was willing to lend a farmer eight hundred dollars on one thousand bushels of wheat suppose however the farmer deposited the wheat in a federal warehouse and obtained five hundred dollars from the government certainly the bank would not lend the farmer three hundred dollars on the equity certificate the krotec tion of the bank would be greater if tho farmer relied on the bank tor for the entire loan for or in that case the bank could realize on its security without being obliged to pay five hundred dol dot lars to get the wheat out of govern ment storage the farmer can now borrow more money from a bank on standardized farm products than under the edison plan |