Rensselaer Semi-Weekly Republican, Volume 20, Number 12, Rensselaer, Jasper County, 14 October 1898 — STANDARD GOLD [ARTICLE]

STANDARD GOLD

WHY IT HAS BECOME THE BASIS OF ALL MONEY SYSTEMS. Annual Increase of Its Product Compared With That of Population. Nothing oould more clearly show that it was the fear of ruin nnder oar go-it-alone silver coinage craze that brought on the terrific depression and hard times of 1898 to 1896, than a comparison of the volume of money then, and daring more prosperous periods. Here are some comparisons from official sources: PROSPEROUS PERIOD.

~g.-o siy uj.e **-1 a 2 Si? SSg 3 o' S.p3 3 5 YEARS. 2 E?O m 3. p p 2 K o r\ ?;! rs j i :f S : 1 :2. 1879 $2152 $1.21 $ .49 1880 24.04 1.27 .55 1881 27.41 1.31 .<3 1882 28.21) 1.27 .80 1883 ..... 30.61 1.17 .05 * PERIOD OF DEPRES-lON. 1893 $ 34.71) $ .73 $ .49 1894 35.39 .81 .50 1895 34.33 .88 . 47 1890. 32.88 .78 .34 Of course, it is supply and demand that regulates prices of products. It was not a larger volume of money that lowered the prices of wheat and corn, nor the smaller volume that put the prices up. But here it is seen that depression and hard times came upon the oountry when the volume of money per capita was greatest, aud nnder the operation of the greatest volume of silver coinage and silver bullion purchase this or any other country ever saw before. All noted writers on monetary aud eoonomic science agree that contraction of the volume of mouey tends to depression aud hard times. But our hard times came during the period of greatest volume of money. It was also apparent why the price of silver went down so rapidly during our largest coinage of silver. All tho great commercial natious of the world had for years stopped the coinage of that metal, except in a small way, and its production at the mines was rapidly increasing. The production of gold in the meantime began to increase rapidly, and these nations preferred it as a standard, experience having shown that it fluctuates in value less and costing far less to transport it in the settlement of balances of trade than silver. Why Gold Ha* Become the Standard. Allusion has already been made to the fact (hat one reason why gold has now become the money standard of all great commercial nations is, because transported chiefly by weight in ances between nations, it was fonud that a cheaper rate of express charges by more than one-half was in favor of gold.„ r l*he chief reason, however, why gold has become the staudard, is because of its adequately increased volume of production, and that it fluctuates far less in value than silver. For several years past the increase of the world’s gold production is inuoh greater than the increase of the world's population, as showu by the following table from official sources: WORLD PRODUCTION OF GOLD. c S’ a? ,r eg, F? \l YEARS |§ p | f| : o' • • ; ? :d: a { ? 1891 130.85:1,IKK) U,801,3tK) 9.03 1892 148,651.500 16,01)1,500 10.91 1803 '157,494,800 1 0,843,3tK> 6.88 1804 181,175,8 K) 23,0*1.800 13.07 1895? 199,34,100 18,128,500 9.09 1896-7 442,950,'Ml 411,095,900 17.22 _ Thus it is soen that the average aunual increase is nearly 10 per oeut, whereas statisticians agree that the increase of the world's population is 8 per cent. Bat it should be borue in mind that over ouo-third of the world’s population are not a commercial people, have little in oommon of the truding customs of the commercial nations, and, therefore, make little use of monetary standards. Considering of the world’s gold production to the population of the commercial world, the increase of gold would, therefore, stand about as.follows: Annual incroase of gold product, 15 per cent. Auuuul increase of population, 8 per cent. Thus it is soeu why the commercial world, worried for centuries in attempts at maintaining the two metals at a parity. have come at last to select one as a standard. Hotb 4*«ild nml Stiver. It is worthy of note, however, that all gold standard nations also use silver as u currency, maintaining it at a parity, but tbat ail silver staudard oouutries do not maintain a gold currency, for, according to all experience, silver standard nations are inonometullist countries, the world's standard metal not stay tug in circulation with silver, because it is the cheaper metal. This country, though for years past measuring values by the gold standard, maintains fur the largest volume of silver in circulation at u parity with gold. Money.** There is no greater delusion than the assumption that because gold is the staudard of value it Is therefore the vehicle of all ‘'ultimate redemption” and therefore too limited in volume to redeem all obligations. Not a day of the 800 business days of the year passes but hundreds of thousands of dollars of obligations are "ultimately redeemed" and settled forever, with uot a dollar of gold entering into the transaction, beeauso silver dollars and all forms of national and bank t paper are at par with gold, and, therefore, as good aa gold

in "redeeming" all these obligations. This fact is so palpably trae in all experience and observation that it only needs to be stated. Therefore the chief commercial uses of gold is in paying balances, and in other international transactions. It is said that oar home or domestic commerce and trade annually amounts to 180,000,000,000 ox $40,000,000,000 and it is in all experience tbat not $1 of gold to thousands of other forms of currency enter into this great volume of business. Ha* Gold Appreciated In Valne? It is asserted by some that gold as a standard, or measure of value, has appreciated. The real test of the rise in value of anything is to be found in the rate charged for its use. If the price of wheat is only 60 cents a bushel when 50,000,000 of acres of land is devoted to the crop, because the supply is great, reducing the area to 25,000,000 of acres would probably so reduce the supply as that it would put the prioe up to about $1 a bushel, and thea the rental rate on the land would also increase, for the laud itself woijld enhance in valne. And so of gold. If it has appreciated, a higher rental, or interest rate would be charged for its use, for gold itself or its representatives in other forms of currency reduced in supply would be enhanced in value. But the foot is, one may gc to any bank and borrow thousands of dollars of gold and other forms rif currency at a parity with gold, at 6 per cent now. whereas, a few years ago, th 9 interest rate was 8 to 10 per cent. If farm and manufactured products have gone down in price, so has interest, or the price for the use of gold and all other forms of currency. Any form of currency, specie aud paper alike, if all be kept at a parity, when contracted or curtailed in volume till the demand is greater than the supply, the rate of interest would go up. But it has been showu that both gold and paper ourrency hasliucreased per capita, and the lower interest rate is therefore proof of a more ample supply than formerly. And so the assertion that gold has increased in value is proven to be untrue both by the facts showing its increased world wide supply more rapidly than population, and the greatly reduced rental, or interest rate, on its use.