Democratic Sentinel, Volume 20, Number 41, Rensselaer, Jasper County, 16 October 1896 — the PEOPLE'S MONEY [ARTICLE+ILLUSTRATION]

the PEOPLE'S MONEY

WOULD BENEFIT THE DEBTOR. This ■question directs attention to the fundamental mistake of the supporters of the gold standard. They continually assume that the value of gold never changes. And yet they all know better. They all know that if our present silver and paper dollars were withdrawn from the currency the scarcity of money would cut prices in two and raise the rate of Interest to unprecedented heights. The most fanatical advocate of the gold standard dares not suggest such a contraction of the currency because he knows that it would mean immediate and universal bankruptcy. Yet if the value of gold is always the same, instead of being determined by the supply of money, then such a contraction of the currency would injure no one. All our silver and paper currency now is at par with gold, and yet by reason of their presence business men are able to get prices, and interest rates which prevent general ruin. Increase the supply of such currency and they will again get prices and interest rates which will secure general prosperity. The supporter of the gold standard in this discussion has denied that the value of money is governed by the law of supply and demand. “Perhaps the most fundamental of all the delusions of the silverties add bimetallists,” he says, “is that ‘more money means higher prices,’ and that higher prices are a blessing to mankind.” So far as we are aware, no bimetallist demands higher prices, except as a return to the level upon which the mass of present debts were first contracted. But our critic is certainly right in saying that it is our “fundamental” belief that “more money means higher prices.” If this belief be false, then bimetallism is false; and if this belief be true, then monometallism is the cause of falling prices, rising interest and business stagnation.

Our critic declares “that there is no traceable connection between the volume of currency and prices.” The fact that every economic writer in the world —prior to this silver discussion—held that the volume of currency determined prices makes no impression upon him. He does not attempt to reply to this argument that if the supply of currency is doubled two dollars must change hands every time one does now, and, therefore, double prices must be paid for everything. He does not attempt to reply to this theory, showing that in every country prices have increased whenever there has been a large increase in the supply of currency, and have proportionately diminished whenever there has been a diminution in the supply. He merely presents a table for different countries showing that the “per capita" circulation is four times as great in England and France as in Russia and Austria, though prices are on the same ■level. The fact that there is four times as much wealth to be exchanged for money in the former countries as in the latter does not seem to occur to him. Our critic’s table, instead of refuting the law of supply and demand, exemplifies it Having rejected the principle that the value of money Is governed by the law of supply and demand, the defender of the gold standard goes to the further extreme of declaring that the supply of money in the United States would not be increased by the free coinage of silver. If we had free coinage, he says, a dollar would only buy half as much as now, and yet we would transact all our business with the same number of dollars. In other words, each dollar separately would transact just half as much business as now, but all of them together would’ transact the same amount. The supposition is absurd. Prices could not increase faster than the amount of money in circulation increased. The free coinage of silver would increase the amount of money in circulation by about $100,000,000 a year. This would mean that our currency would increase rapidly enough to restore and maintain the level of prices of five years ago There would be no difference in value between silver money and gold money, for the supply of gold money throughout the world would be increasing as rapidly as the supply of silver money. But the supply of both would increase faster than population, and fast enough to restore to debtors normal prices and a normal rate of interest.

The Chicago Tribune in 1878.

The purchasing power of legal tender silver coin furnishes the only proper test. The values of gold or silver as bullion are not pertinent to the issue, whether the two metals, as legal tender, can be maintained.—Chicago Tribune, Jan. 9, 1878. The prime object in remonetizing silver is to add to the solid, substantial, intrinsic money stock of the country. There can’t be too much hard moneyready money—in circulation. Such an inflation is stimulating and invigorating. It is at once a sign and prop of national and commercial prosperity. The simple remonetization of the silver dollar, with proper provisions for its coinage, will contribute a steady stream to the money resources of the United States.—Chicago Tribune, Jan. 23, 1878. The theory that a remonetization of the silver '‘dollar demands that the weight of that dollar be Increased to correspond to the present London bullion value of silver, as measured by '‘cornered’ gold, is simply absurd. It is in plain defiance of the experiefice of all the rest of the world—even with our own experience before the silver dollar was demonetized—which teaches that 15% ounces of silver to 1 ounce of gold is the proper basis for equalizing the money value of the two metals.—Chicago Tribune, Jan. 8, 1878. A correspondent asks us why we give so marked a preference to the silver dollar of 371% grains of pure silver, and reject the proposed “Christiancy dollar,” or the “Blaine dollar,” or the trade dollar. We shall not undertake

now to repeat or restate all of them. But the first, reason is that the dollar of 37114 grains pure silver has been the monetary standard or unit of value in this country from 1792 until 1873, a period 1 of 81 years. It is the ancient, unchangeable dollar of that country.— Chicago Tribune, Feb. 11, 1878.

An Expensive Dollar.

Men who work for wages should remember that money not only buya things, but that it has to be bought. A dollar is bought by a workingman with a certain amount of work. If dollars are few and workingmen plenty he will have to pay pretty dear in effort for his coin. Perhaps he will not even get a chance to buy it at all, either because there are not enough dollars to go round or because he cannot or will not pay the price. In such event the fact that the dollar he doesn’t get is one of great value neither interests nor profits him. The shopkeeper buys his dollar with goods. Ninety-nine out of every hundred of his customers, if he runs a city store, work for wages, and if the dearness of the dollar destroy their power of purchasing he will get fewer dollars to pay.clerks, and some must be discharged, few dollars with which to buy goods and factories will be closed. Every class of labor thus suffers by a dear dollar. Does the banker, the money lender, the man whose investments bringing in interest outweigh all his other sources of Income suffer from a dear dollar? In no way. He does not buy dollars with work, with goods, with produce. He lends a dollar, gets back one which, under existing conditions, is sure to be more valuable than the one he lent, and moreover receives interest in money of high purchasing power. His apparent interest lies wholly on the side of a dollar which is dear to-day and dearer to-morrow. We say his apparent interest because in fact the present system persisted in will be harmful to the banking classes as to others. The goose that lays the golden egg may be slaughtered. All, securities are founded on the prosperity of the nation, and a policy which compels the distress of the people will compel the depreciation of the banker’s securities. The common people, however, will get near the core of this currency question if they remember that to get a dollar they must buy it with labor if workingmen, with wheat and corn if farmers, with cloth or china if merchants. The dollar -which will exchange for twice as much as these commodities, as did the dollar of thirty years ago, is a dollar that costs them dear.

Japan’s Business Boom.

In 1873, in Japan, an ounce of gold bought 15% ounces of silver. In 1896 half an ounce of gold buys 15% ounces of silver. Prices in gold-standard countries are calculated in gold value. The Japanese manufacturer can, therefore, make goods in that country, send them to the United States, sell them for half the gold price of 1873. get with that gold as much silver as he did in 1873, take that silver to Japan and with it purchase as much of everything as he ever did and pay as much debts and taxes as he ever did. As gold rises still higher In value, compared with silver, the Japanese can afford to make still lower and lower gold prices for his goods, and as the same goods must sell for the same price in the same market the American manufacturer must come down in his price, although his debts and taxes do not come down. This is the secret of the recent importations of Japanese goods at prices that have alarmed our manufacturers.—Cumberland (Md.) Times.

Money's Narrow Basis.

The only money in the country is the gold estimated at between $500,000,000 and $600,000,000, but in fact probably much Less. All ether forms of currency are in fact or in practice promises to pay money. The silver movement has for its purpose an Increase of the amount of actual money, and nothing else. Putting the highest estimate on the amount of gold in the country, there would then be less than $lO per capita on which to carry on the business. It is customary to use all the currency as a basis in estimating the per capita circulation. Such a course is no more justifiable than it would be to Inelude all bank checks, promissory notes and drafts as a part of the circulation. They, like greenbacks, national bank notes and treasury certificates, are mere promises to pay money, which is gold, and in which all other mediums of exchange must be finally redeemed. Silver men think the monetary basis is too, narrow for the superstructure.— Topeka Journal.

What Silver Men Want.

What the silver men propose is to make these silver dollars money—money that cannot depreciate in value by an accident while in the hands of the people—money that needs no redeemer or any other money behind it. They want one dollar as good as every other dollar, in fact as well as in theory. This is whait the Republican party has always contended for before it fell into the hands of Hanna, Kohlsaat and Platt at St. Louis, and Lt is what the people are demanding to-day. They want th(? parity of the metals established and maintained in accordance with what is declared to be the established policy of the Government, both In the Sherman law and in the bill repealing it. There has been no such thing as a parity since 1873. Restoration of it is demanded first, and maintenance afterward.—Topeka Journal.

Can the United States Do It?

Any nation which is the equal of Eng. land can do for silver what England has done for gold. The United States can do it, and the duty rests with her. The Government should make the citizen’s dollar worth commercially what it says it is worth.—Topeka (Kan.) Journal.