Does an increase in the money supply increase or decrease interest rates?
I will frame this in the context of modern monetary policy and for the sake of clarity assume we are discussing the American economy. 

1) Whenever the Fed wants to bring about some change in the economy, they do so by using one of three tools: open market operations, setting the discount rate, setting reserve requirements. I will only discuss open market operations. The Fed recently introduced two new tools: interest on excess reserves and forward guidance. I include these to be complete. 

2) The Fed conducts open market operations through its NY branch's buy/sell desk. In simple terms, the Fed can buy/sell securities in the open market. This causes two things: a change in total bank reserves and security yields (by way of shift demand/supply curves, for example). 

Your question is whether or not it makes sense to think about an increase in the money supply causing an increase in interest rates. Since we want to discuss increasing the money supply, let's assume the Fed is buying securities in the open market. Whenever the Fed buys securities, it buys securities from banks and 'pays' the banks by 'adding excess reserves' to the banks' balances at the Fed. Total reserves in the banking system rises. All else being equal, banks have more money to lend. This increases the available supply of loanable funds. Since we assume demand for loanable funds is unchanged, and since interest rates are the equilibrating force in this market, we should see that interest rates drop (because the supply curve shifts right/up). 

You might also want to think in therms of what is happening to security yields. If banks start buying a large amount of securities in an effort increase the money supply, we should see a large increase in demand for securities. Assuming all else equal (in particular, assuming that there is no change in the supply of securities) we should see yields on securities fall (this is equivalent to the purchasing prices of securities rising). 

And so we see that the logic, whenever we consider either adjustment mechanism, points toward a fall in interest rates whenever the Fed increases the money supply. 

With this in mind, I think it is reasonable to conclude that the paper you've cited gets it wrong. And as a point of fact, we have witness recently (during QE) that money growth is not necessarily inflationary...as counterintuitive as that might be.