OCR Text |
Show Printing Press Money WE HAVE HAD some experience with inflation, but never of the run-away kind such as that of Germany 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 uncontrolled uncon-trolled amount of printing press money that had nothing of a 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 inflation. The earliest case of Inflation In this continent dates back to 1628, in Virginia colony, according accord-ing to life Insurance company records. Those early colonials had nothing but English currency cur-rency and not much of that. Under Un-der such conditions, they found they could exchange tobacco for commodities. They could raise their own money, and tobacco became the money of the Virginia Vir-ginia colonists. In 1G28 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 tobacco, to-bacco, but he decreased what each pound would buy. By 16G5 It took 42 pounds to pay for what one pound had purchased in 1G28. The amount of tobacco had Increased much faster fast-er than the commodities for which lt could be exchanged, and the purchasing pur-chasing value of the tobacco money dropped. That was inflation due to too much money. There must be back of money something that gives it and maintains main-tains for it a stabilized value, something some-thing for which money can be exchanged 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 23 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 government govern-ment agreed to buy gold at $23-an-ounce value. Then In 1932 we raised the price we would pay for gold to 32 an ounce, but at the same time we repudiated our agreement agree-ment to exchange our printing press money for gold at any price. Under such conditions, our money had no real tangible value as It was backed by nothing noth-ing of a 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 63 cents, and that was inflation caused by unbacked printing press money. The dollar would buy only about two-thirds of the commodities it had previously bought. The printing press dollar dol-lar was backed only by faith in the government. It could not be exchanged for anything that had a world-wide stabilized value. Because of the devaluation of our money in 1932, the government received re-ceived during the war only 63 cents or less of value for each dollar it spent. The people purchased government gov-ernment bonds with 63-cent dollars. "We cannot afford to pay off our tremendous tre-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 national na-tional debt with the same kind of dollars the government received for its bonds, which are also but printing print-ing press money. An 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 uncontrolled uncon-trolled inflation caused by the continuous 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 honesty hon-esty and integrity of our federal government. That is all there is back of our dollars that we can exchange ex-change for the paper currency produced pro-duced on its printing presses, for the commodities and services we require. Should we lose our "faith" in the purchasing value of our currency, cur-rency, it would quickly drop, and we would face an uncontrolled inflation. in-flation. The more money we have the greater the "faith" needed to support its buying power |