The Nonpartisan Leader Newspaper, April 4, 1921, Page 7

. that grain now .has. “gteady market that gold now has, and the specula- GRAIN DOLLARS Why Not Let the Speculators Gamble in Gold Instead of Wheat? The author of this article, a St. Paul (Minn.) business man, is an original thinker along eco- nomic and political lines. This article repre- sents his views, not necessarily the views of the Leader. At the same time it is worth while noticing that whether or not the “grain dollar” would solve all the farmer’s problems, econo- mists generally recognize that there is need for a change from our present standard of money. Professor Irving Fisher of Yale, one of the na- tion’s leading economists, urges the adoption of a “stabilized dollar” based on the value of some 50 or 100 commeodities, including coal, iron, cotton, copper, etc., as well as using the five grains urged as a standard by Mr. Keefe. BY THOMAS KEEFE ARMING interests have been hard hit by the great fall in prices for the products of the farm, and the farmer is looking around for means to better his marketing conditions. There is a BTaTR remedy for the farmer. To tell about this remedy is the object of this article. . Take notice of the producer of gold: Any time he has any of his product to sell he may take it to the government treasury and get money for it, and always exactly the same amount of money for the same amount of his product. The government receives his product, assays or grades it, and issues to him gold certificates, which are in reality storage receipts, and which the gov- ernment provides shall be money. It stores his gold free of charge, and any time he may return his gold certificates and receive his gold. The government that can do that with gold can do that with grain. Let the government receive grain from all who may bring it, as it now receives gold from all who may bring it. " Let the govern- ment grade that grain, as it now assays or grades the gold, and weigh it. Then let the government issue grain certificates for that grain, as it now issues gold certificates for that gold. And let the government provide that those grain ceértificates shall be money, as it now provides that gold certificates shall be money. Then the grain grower will be able to pay his debts and do everything with those grain certifi- cates that the gold producer can do today with his gold certificates. Then the grain grower will always get the same amount of money for his grain, just as the gold producer now always gets the same amount of money for his gold. The price of grain will never change then, just as the price of gold never changes now. PRICE OF GRAIN INFLUENCES PRICES. OF ALL NECESSITIES In other words, let grain take the place of gold in our money system, and let gold take the place Then grain will. have that tor may speculate in gold as he now speculates in - grain. Then the speculator can speculate in grain no more than he now can speculate in gold. Gold is the same price because the government always gives the same amount of money for the same amount of gold—one dollar in money for 25.8 grains of ‘gold. If the government would only do that with grain, grain would always bring the\ same price, just as gold now always brings the same price. And if there were a steady market for grain there would be a steady market for practi- cally every product of the farm. £ The prices of other farm products stay with the _price of grain, go up when the price of grain goes up, and go ddwn when the price of grain does. That is true today, has always been true and al- ways will be true. And that is because of the law of supply and demand. / The eyes of millions of farmers are on the mar- ket quotations every day. If hogs should be high and grain low, grain will be withheld from the market and fed to the hogs, thus eventually in- creasing the weight of hogs on the market and de- creasing the weight of grain. And so it is with beef, mutton, poultry, butter and eggs. ' If cotton is high and grain low, more cotton and less grain will be raised, thus balancing the price of cotton with grain. And it is so with tobacco and hay, and every other product that- may be pro- ~ duced on the farm where grain may be produced. So, if the price of grain were steadied, the price of every product of the farm would be steadied. There would be a little fluctua- tion in the price of the various products of the farm, but just enough to be noticeable, so that the farmer would know in what product to increase his production, and in what product to decrease. Using the grain dollar, the price of all the prod- ucts of the farm will be steadied. But the cost of living depends upon the price of the products of the farm. And the wages paid the wage-earner de- pend upon the cost of liv- ing. And the cost .of the machinery, the clothes, the shoés, and everything the farmer buys depends upon the cost of production, which depends upon the wages paid the wage- earner, which depends upon the cost of living, which depends upon the cost of the products of the farm. So, if the government will only do with grain as it now does with gold, instead, grain and all the necessaries of life will not fluctuate in price, while only luxuries, such as gold, will be subject to the great fluctuations in price that the necessaries of life are now subject to. GOVERNMENT FIXES PRICE OF GOLD; WHY NOT FIX THE PRICE OF GRAIN? Long ago the government declared that our money should be gold. Then it declared that 25.8 grains of gold should be a dollar. So the word dollar is only the name for a certain weight of gold. The same weight of gold will not always buy the same amount of food, and therefore the dollar, which means a certain weight of gold, will not al- ways buy the same amount of food. And so, be- cause we use gold for money, we have sometimes high prices and sometimes low prices for food and the other necessaries of life. But the same weight of grain always buys ap- proximately the same amount of food. The govern- ment which declared that a certain weight of gold should be a dollar can declare that a certain weight of grain shall be a dollar. If it would do that then that grain dollar would always buy the same amount of grain and, as a matter of course, the same amount of other necessaries of life. For a grain dollar I would not propose any one grain alone. One grain;, used as money, might be subject to some manipulation or fluctuation due to short or heavy crops. There' are five grains known as the breadstuff grains. They are wheat, rye, oats, corn and barley. I propose that we use five grains as money. Suppose we should change from the use of gold as money today and use grain for money, just how would it be done? Today a dollar buys 60 pounds of the breadstuff grains. That is, you could take a dollar and go out and buy with it 12 pounds of each of those five grains today, 60 pounds in all. " Let the government provide that hereafter our money shall be grain instead of gold. Then let the government provide that the dollar shall be 60 pounds of those grains, 12 pounds of each. That would not be increasing or decreasing the value of the dollar today.. It'would only be stating the value of the dollar in a different commodity than gold. The government might establish a grain treasury at Chicagg, for instance, or at any other point. And then it could provide that grain should .be money, and that any one bringing to that grain treasury 12 pounds of wheat, 12 pounds of rye, 12 pounds of oats, 12 pounds of corn and 12 pounds of barley, of certain grades, would receive a grain certificate for WHY MONEY IS TIGHT —Drawn expressly for the Leader by John M. Bear. one dollar, and that, on return of such grain cer- tificate, one would receive that amount of grain. There would be no trouble, no disturbance to business at all, in making this change. The cur- rency that the people have in their pockets, and in banks and safes, would stay right there. Each dol- lar of that currency is worth 60 pounds of grain today, and it is also worth 25.8 grains of gold today. If the change were made, each dollar of that cur- rency would be worth 60 pounds of grain tomorrow and forever thereafter. So, as far as changing is concerned, it is only a question of which would be the better—a dollar that is always worth 25.8 grains of gold, or one that is always worth 60 pounds of grain? Which is better, a dollar that is always worth the same amount of gold or one always worth the same amount of food ? There may be those who will doubt the advisa- bility of making this change and that the change if made would have any such effect. Let us not argug about the matter with them at all. DOUBLE STANDARD PROPOSED FOR TRIAL OF GRAIN DOLLAR PLAN If a man is to dig a ditch you may think that a spade is the best thing for him to use, while I may think that a shovel is the best. There is no use wasting time arguing about that matter. Let us give him both the spade and the shovel. He will find out which is better and use it. And so we may do with the proposed grain dollar and the gold dollar. We have now only the gold dollar in which to measure values. But for meas- uring distances we have two measures, the foot and the meter. And of these two measures of distance we may use whichever we prefer. As we do with distance so let us do with values. Let’s have two measures for measuring values, the gold-dollar and the grain dollar. Let the govern- ment keep on doing with gold just as it is doing now. And then let the government establish its grain treasury and do with grain just as it does with gold now, and declare how many pounds of grain are in the grain dollar and declare that to be money as well. Then, unless the grain dollar is better than the gold dollar it will never come into general use. If it is better it will drive the gold dellar out of use. Then the farmer, the merchant, the banker and every -other business man can bargain to pay in whichever dollar he wishes. In time all will come to see that prices remain steady in the grain dollar and that it is only in the gold dollar that prices go way up and then go way down. Business men will use the grain dollar. Speculators and other gams- blers may use the gold dollar, as that kind of a dollar is especially suitable for gambling purposes, and suitable for nothing else. PAGE SEVEN s