People's Pilot, Volume 4, Number 52, Rensselaer, Jasper County, 20 June 1895 — FALLING OF PRICES. [ARTICLE]

FALLING OF PRICES.

WILL SILVER REMONETIZATION SEND THEM UP? The Grocers' and Importers' Exchange Claim That Price-Shrinkage is Due to the Demonetization of the White Metal —Want Silver. Recently a committee was appointed by the Philadelphia Grocers’ and Importers’ exchange to "inquire into the cause of falling prices and, if possible, to point out remedies to stop it.” While we do not indorse that part of the report which refers to “money, of final redemption,” we give portions which contain some very valuable suggestions: “This committee could see no way of abating the evils alluded to but by removing the cause. The question then arises. What is the cause? We are aware that prices Tise and fall in accordance with the law of demand and supply, but also saw that there was something abnormal in a decline in values which had continued for over twenty years, more or less steadily, and they knew that unless some new power was at work the law of demand and supply would work a remedy for either high or low prices in less time than that. The testimony brought before this committee proves a fact that the people in general are apt to overlook —i. e., that money also obeys the law of demand and supply. Until we turned our attention to this fact we could find no cause adequate to the calamitous fall in prices. > “Our attention being called to the axioms of political economy, we began to see the light on this subject: “ ‘Double the volume of money and you double the value of products. “ ‘Divide the volume of money and you divide the value of products. “ ‘Divide the volume of money and you double the debt. " 'Double the volume of money and you divide the debt.’ "These maxims In political economy are not now disputable. They are as well proven as the rules that guide us in arithmetic. To use round figures, the metallic money of the world Is estimated at 18,000,000,000, half gold and half silver. In 1873 the United States and Germany closed their mints against silver and struck it from the list of moneys—that Is. sliver was no longer money of final redemption. True, Great Britain had • demonetized silver in.J.816, but until the leading nations, in 1873, joined them the effect of their action was scarcely perceptible; 1873, then, is in time the vital point when the effect of dividing the volume of money began to be effective. "The members of the Grocers' and Importers’ exchange need not be informed as to the movement in prices during the past twenty-two years. They know to their cost. Many persons assert that It is not gold that has risen, but silver that has fallen. Prof. Saeurbeck’s tables dispose of that assertion. We here qi...te them: “Index numbers of forty-five principal commodities and silver by Prof. Sauerbeck: . - ■Year. 45 Coms. Silver. 1874 J. ..102 95.8 1875 96 93.3 1117$ 95 86.7 1877.. 94 90.2 W 8 87 86.4 1879 83 84.2 1880 88 85.9 1881.. / Bf> *5.0

1882 84 84.9 i 1883 82 83.1 1884 76 83.3 1885 72 79.9 188669 74.6 1887 68 73.3 1888 70 70.4 138972 70.2 1890 72 78.4 1891 72 74.1 1892 68 65.4 “This table shows that the forty-five principal commodities fell a little farther than the silver, but also shows that silver measured them in a. reasonably steady manner. Three-fourths of the human race still use silver as money of final redemption, and silver, therefore, as measured by the principal commodities, maintains its normal value, while gold has lowered the value of all commodities as well as that of silver. ’Tis absurd to try to show the value of anything by measuring it by Itself, as people do when they say a gold dollar is never more or less than a dollar. Hence the value of the | learned Scientific work performed by i Prof. Sauerbeck. Thue we find' that disorganization of trade, resulting from the long-continued tall of pries*, Is owing to the rise in the valve pf gold, and we see no remedy for that but in the remonetization of silver, so that the two metals can resume business at the old stand in the same way as before 1871 In the final analysis labor is the measure of values; it takes twice as much produce, therefore twice as much labor, to pay a debt os it dhi before 1873. "We pave been asked (his question, If the demonetization of silver is the pri,me cause pt failing prices, how was it that prices were so low during the period between 1815 and 1849? We have, in a later part of this report, noted the effect of the abundant stream of the precious metals which for several hundred years poured from the mines of the Spanish colonies of South America. This abundance of the precious metals led to profusion in their use. Kings, queens, lords; and the wealthy in general used them for ornamentation in a thousand ways, while cathedrals and ministers had their saints and patrons sculptured in gold and silver.

“The revolt of the Spanish colonies, one after another, which occurred after the example of the United States, con-

tinned throng a large part of the first half of this century. The struggles were long-continued and bitter. The mines were neglected, the fructifying stream ceased to flow, and the profusion alluded to could not be halted at once. The precious metals became scarce and prices fell, or the precious metals rose, as you choose to put it. In 1848 gold was discovered in California and shortly afterward in Australia. Then prosperity again appeared, prices began rising. The farmer’s heart was made glad, for when he settled up after selling his crops he had money to buy clothes for his children and send them to school. “There are many people who think that when we sell a thing for half price, but get money of double value, the thing is squared. And so it would be if there were no debts and if everything was adjusted to this new measure that has double value. But this is far from being the case. ’Tis a physical law that any force extending itself does so on 'the line of the least resistance.’ Labor resists violently. All salaried men are more or less disposed to do the same thing, consequently this adjustment. although we have been at it for over twenty years, is far from being accomplished. The produce of the farmer, the merchandise of the merchant, and the product of the manufacturer cannot resist, and so they are the first to be slaughtered. When these are leveled down, does any rational man see how wages and salaries can escape? Should monometallism survive, the adjustment of prices will only be complete when everything shall be reduced to one-half what they would be and were with bimetallism. And this process of leveling will last far into the next century and will cause untold suffering, misery, and crime, for extreme poverty is the highroad to barbarism. “Adam Smith says that after the discovery of the precious metals consequent to the discovery of America by Columbus prices of commodities had an advancing tendency for 200 years, everywhere adding to the comfort and wealth of the people, enabling them to educate their children and Anally dispelling the cloud of poverty and misery which gave to the preceding centuries the name of ‘the dark ages.’ We may well question the wisdom of legislation that reverses this picture and makes the addition to our precious metals a curse instead of a blessing. It should be remerribered that It was the merchants of the world and not the kingly governptents that established the first mints and that the'true fnnetiou of the mint was to assay and weigh the metals and stamp them. Their relative values were established by merchandising. When governments go beyond thin they interfere with legitimate merchandising, destroying

I prices, enriching a few at the expense of the many. Pandora would find more evils for the affliction of mankind in I falling prices than several little boxes . Such as she tried to give to Prometheus could contain. But as in Pkndora’s box, hope is atill left to us, for which let us thank the Giver of all good things. !”Thus we have attempted to accomplish the task assigned to us. Your loifiinlttee finds that there is a sear- ‘ city of money of final redemption. Credit money, such as our silver currency is now, and paper money from whatever source, can be of no relief. Credit money may, at the eaprlce of a ( speculating syndicate, be presented for payment at any time and thus aggraI vale the evil. ‘ I “We recommend that silver be added to its companion gold as money of final redemption, and your com iq it tea believes that the chief cause of the disorganized condition of trade and consei quentiy failing prices will be reI moved.” **