People's Pilot, Volume 4, Number 19, Rensselaer, Jasper County, 26 October 1894 — THE GOLD STANDARD. [ARTICLE]

THE GOLD STANDARD.

How It Has Caused a Destruction of Values and Loss to Producers. John Stuart Mills, in his “Principles of Political Economy,” says: “If the whole money in circulation was doubled, prices would double. If it was only increased one-fourth, prices would rise one-fourth. The very same effect would be produced on prices if we suppose the goods (the uses for money) diminished instead of the money increased, and the contrary effect if the goods were increased or the money diminished. So that the value of money—all other things remaining the same —varies inversely as its quantity; every increase in quantity lowering its value, and every diminution raising it in a ratio exactly equivalent. That an increase of quantity of money raises prices, and a diminution lowers them, is the most elementary proposition in the theory of currency, and without it we should have no key to any other.” That is a very great economist’s tolerably emphatic opinion that contracting the currency sends down all prices and values. But “there are others.” Leon Faucett, in his “Researches Upon Gold and Silver,” written over fifty years ago, said: “If all the nations of Europe adopted the system of Great Britain, the price of gold would be raised beyond measure, and we should see produced in Europe a result lamentable enough.” Well, have we not seen it, and in America also? Before a French monetary convention in 1809 some testimony very much to this point was given by the late Mr. Wolowski and by Baron Rothschild. Mr. Wolowski said: “The sum total of the precious rfaetals is reckoned at fifty milliards, one-half gold and onehalf silver. If by a stroke of the pen they suppress one of these metals in the monetary service they double the demand for the other metal, to the ruin of all debtors.” Baron Rothschild said this: “The simultaneous employment of the two metals is satisfactory, and gives rise to no comr/laint. Whether gold or silver domina-.es for the time being, it is always trie that the two metals concur together in forming the monetary circulation of the world, and it i* th*

general mass of the two metals combined which serves as the measure of the value of things. The suppression of silver would amount to a veritable destruction of values without any compensation.” Now, that is the theory of money as laid down by the accepted fathers of political economy, namely—that to reduce the amount of legal tender money in circulation is to reduce the value or price of all other things relative thereto. Do the facts bear out that theory? The American people can apply the test of their own observation and experience for the past twenty-two years to find an answer to that question. With the year 1873 began the reduction of the amount of money in circulation in this country. That reduction has gone on steadily ever since, its pace being only moderated for a few years under the Bland silver act of 1878 and the Sherman silver act of 1890. • Have prices and values of all commodities measured in money gone down in the same period, or have they not? If they have, the economists above quoted are right, and, if not, they are wrong. The record of market prices shows that an acre of wheat sold for a little over §l3 in 1873. Now, after 21 years of diminishing circulation, an acre of wheat will sell for less than SO. The average acre’s value of all the staple crops of our farmers sold for 85 per cent, higher prices in 1873 than they are selling for in 1894. Does not this help us to understand the despairing cry of the western and southern farmers for relief? We can take a pencil and figure out for ourselves that if the wheat crop, the corn crop and the cotton crop of 1894 could be sold at the same prices they brought in 1873, before the terrible contraction of the currency began, the farmers and planters of the United States would have at least $800,000,000 more in their pockets than they have as it is.

. If the crop-growers had those SBOO,000,000 more to spend, does any man, except he be a gold standard shark or one of his ignorant dupes, think that so many factories would have been closed or running on half time this year, or that we should have heard the incessant talk of cuts in wages,strikes, lockouts and the rest of it? Remember that the staple crop-grow-ers are the underpinning of the whole superstructure of American national prosperity. The appalling shrinkage in the selling values of their crops—sßoo,ooo,ooo a year out of their pockets this year, and more next—-has made them too poor to be good customers to the eastern manufacturer and merchant that they used to be. It has made them discontented, despondent and demoralized. And the remedy for it all is—what? There is but one possible remedy. Stop the contraction" of the currency, readmit silver to coinage, enlarge the circulation to meet the larger population and business of the country, and end the long, dismal reign of a money standard that grows dearer all the time, hence makes all products cheaper, and is necessarily driving all the producing classes nearer to the abyss of hopeless ruin and poverty.—N. Y. Recorder.