People's Pilot, Volume 5, Number 50, Rensselaer, Jasper County, 18 June 1896 — MONEY CONTRACTION. [ARTICLE]

MONEY CONTRACTION.

HOW IT AFFECTS THE VALUE OF FARM PRODUCTS. Falling Prices That Constitute an Appalling Chapter in the History of Our Country—A Gold Standard Fallacy Punctured. The Railway Times: The prostration of business throughout the country is conceded on all hands, the reason why being the only question debatable, In the discussion a great variety of causes are assigned for the calamities that have overtaken the financial, commercial and industrial affairs of the country, and the remedies proposed are scarcely less numerous. On the one hand is found a class of statesmen—heaven save the mark—who contend that 1 a high protective tariff and a gold standard secures prosperity, while on the other hand are those who that a moderate tariff, with free trade in articles essential to successful manufacturing, together with the absolute restoration of silver to its money parity prior to 1873, are the real essentials of business prosperity. In this connection we observe that The American in its issue of April 4 contains an article captioned “The Wage-Earner Not Benefited by Falling Prices,” and introduces official figures, conclusively demonstrating that the business depression in the United States is owing chiefly to the demonetization of silver. The logic of the figures and the facts is conclusive, and are answerable only by the jugglery of figures and facts, Vfhich deceives those only who are not expert in the detection of the argumentative tricks of gold bugs, who represent the money power, and who, by crying “sound money” and denouncing silver, are able to use their money in shaping policies and corrupting the public mind. The American’s article is so replete with facts, based upon figures demonstrating the business calamities resulting from the demonetization of silver, that we refrain from any condensation of its salient facts that those of our readers who want facts by which they may be governed in the supreme moment of casting their votes, may have them as presented by The American—simply remarking that while the figures presented by The American relate specially to the farmers, they involve no less certainly the interests of all wage-earners. The American says: In 1872 the acreage of our cereal crops—corn, wheat, oats, barley, rye and buckwheat —was 68,280,197 acres .and the farm value of our cereal crops $874,594,459, the average value of the yield per acre being $12.81. In 1895 the acreage of our cereal crops was 149,955,163 acres, the farm value $1,017,316,936, and the average value of the yield per acre $6.78, the value to our farmers of every acre of cereals harvested in 1895 being $6.03 less than in 1872. If the money yield per acre had been as great in 1895 as in 1872, if the farmers had been hs fully recompensed in 1895 for their labor expended in raising cereals as they were in 1872, they would have received $900,000,000 more for their cereal crops in 1895 than they did. In 1871-2 the yield of cotton in the United States was 1,384,084,494 pounds and the farm value was $288,300,000. This, however, was a short crop. In 1872-3 the yeild was 1,833,188,931 pounds and the value $301,087,500. For the year ending June 30, 1895, the yield was 5,036,964,409 pounds and the farm value $262,426,000; for the year before, an average year, the yield was pounds and the farm The cotton crop of 18$t-5 was nearly three times as large and the cotton crop of 1593-4 more than twice 'as large as the cotton crop of 1872-3, yet the money value was less. The cotton acreage for 1894-5 was more than twice the acreage for 1872-3, but the value of the crop was $40,000,000 less. Making all due allowance for the effect on the price of cotton of the extraordinary crop of 1894-5, the largest on record, and taking the 1893-4 crop as a basis for comparison, we are forced to the conclusion that the loss of income to our cotton planters caused by the fall in the price of cotton, and directly due to the competition with the cotton of sil-ver-using countries engendered by the fall in the gold price of silver, has not been less than $350,000,000 annually for the two years ending June 30th last. As shown in another column, the number of horses in the United States January 1, 1896, was 64 per cent greater than on January 1, 1873; of mules, 74 per cent greater; of milch cows, 53 per cent greater; of oxen and other cattle, 93 per cent greater; of sheep, 16 per cent greater; and of swine, 31 per cent greater, yet the total value of farm animals was 3 per cent less on January 1, 1896, than on January 1, 1873. As we have shown elsewhere, if the value of farm animals per head was as great January 1, 1896, as it was January 1, 1873, the value of farm animals to-day would be between $2,600,000,000 and $2,700,000,000 instead of $1,600,000,000, and assuming the value of farm animals is realized by those raising live stock once in four years, this represents a loss to the farmers on account of the fall in live stock as compared to prices in 1872 of not less than $250,000,000 for the one year 1895. Thus we have seen that because of the fall in prices since 1872, directly due to the demonetization of silver, the farm value of cereals was $900,000,000 less for 1895 than it would have been, the value of the cotton crop to the planter $550,000,000 less, and the loss to those raising live stock not less than $250,000,000, or a sum of $1,50C|000,000 on agricultural products. It is true nominal wages do not fall as fast as wholesale prices, for the

i " wage-earner resists cuts in wages, bnt 1 finally wages do and must fall, for as j prices fall, reducing the fund out of 1 which v ages are paid, the employer will reduce 'wages, or, failing in thiß, close his mill or factory, for in the long run the employer cannot and will not pay wages out of his own accumulations. If the price received for the product is not sufficient to recompense the employer for his outlay for raw material and wages and leave a profit over incidental expenses he will have no incentive to production, always excepting the owners of such mills and factories, the machinery of which rapidly deteriorates in idleness, and who, consequently, will st.vyc’e on to keep their mills open ever, at a loss. So we find when trice are 'ailing, not only the nominal wage rate falling but the income of the wage-earner further cut into by short hours and idleness. And for such reductions the wage-earner is not, as we said, compensated by, a corresponding fall in the prices which he is obliged to pay in supplying his wants. Consequently falling prices mean a reduction in the purchasing power of his wages. His house rent is only remotely affected by falling prices and does not fall with the resulting fall in wages, and house rent is a laige item. Then the wageearner buys his bread at the bakery and the loaf of bread does not fall in price with the fall in wheat which impoverishes the farmer, or he buys flour in small quantities at the corner gro.cery, where he also buys other provisions. But it is long after the price obtained by the farmer for wheat and the miller for flour has fallen before the corner groceryman can reduce the price of the bag of flour, for he always has on hand a supply of flour while prices are falling which he could indeed replace at lower prices, but for which he may have paid considerably higher, and unless he can keep up the retail price much after the wholesale price has fallen and until he can dispose of what he bought at higher prices he will be out of pocket. And so it is with other groceries ana all goods bought at retail. The foregoing demonstrates conclusively (1) That the impoverishment of the farmers of the United States has steadily proceeded since the date of the demonetization of silver. (2) That there can be no real prosperity in a country where the farmers are reduced to penury and bankruptcy. (3) That with the impoverishment of the farmers all wage-earners suffer, and (4) as is said by The American in the closing paragraphs of the article in question—the wage-earner prospers when prices are rising, for then it is that his employer prospers. Then it is that he receives the best wages, and then it is that his wages go farthest and his command over the comforts of life is greatest. When prices are falling and when the profits of industry are decreasing, then it is that employment i 3 slack and wages low, while even the purchasing power of the smaller wage grows relatively less and less. All producing classes prosper together and they suffer together. Prosperity lies in rising prices, and adversity, losses, suffering, in falling prices. To check the fall in prices should therefore be our one great aim, for while prices are falling progress is impossible and civilization is at a standstill. The fall in prices during the last twenty years has been artificial and to check the fall we must remove the artificial cause —namely, the appreciation of gold. And this can be done only by decreasing the demand for gold, which in turn can be done by remonetizing silver.