The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1866-04-05

the amount of money. Theretore,i any
amount of money that may be in the
world is enough for the business OF the
world. Ifthe Quantity of money be in
creased, prices of things rise in proper
ton; that is, money depre reciatesi in value
in proportion to its increase in quantity
If the quantity be decreased, prices oil
things decline in proportions; that Is
money appreciates in value as il dimin-
ishes in quantity, Ifreduced one-half
that half-after the revolution has taken
place, and things have become settled
on the new basis-will have as much
purchasing power as the whole had pc
fore. Half dollars now will be equal to
dollars then. If the Quantity of money
is doubled, two dollars-after the dis
turbance has become settled-will have
only the purchasing power that one had
before. roo ~ t'sttl7 III. III
This principle is now universally seen
in the currency experience ofthis coun-
try, and is universally disregarded in
the money theories and congressional
discussions. II is recognized by Mr.
McCulloch in his report, when he says
The demand for money increases 10y
reason of an advance In prtces) with the sup
. In proportion to its increase prices adj
vance. Pages. sg.+...s tfs-a 4asgE.L
But he contradicts it in his reasoning
against Government paper money as q
permanent policy, when he says:
The objections 10 such policy are that the
paper circulation OF the country should DC
flexible, increasing and decreasing, according
10 the requirements OF legitimate business
Page4. .,.,tl,f,-fa i.-5ls7Iiaa
This is viewing thegmoney of the
world as limited to the short circuit oi
bank discounts and issues, rather than
in its functions as the general standard
of value and medium of exchange. Ii
IL be true that prices will rise as the
quantity of money is Increased, the un-
dertaking to satisfy the demand by in
creasing the amonnt of money Is like
trying to quench fire with fuel.
II is an error of the simple to sup
pose that the increase of trade requires
a proportionate increase of money
Trade increases by profits which bring
money, Trade furnishes its own eX-
changes, a trade of 800 millions is car.
ried on between this country and
Europe with the movement of from
thirty to fifty millions of money. Trade
Indebtedness to the amount of sixty or
seventy millions day is settled at the
New York Clearing House with the
transfer of one or two millions of mon
If it be true that prices of things ad-
lust themselves to the quantity ofmon-
ey, the amount of lnoney-taklng its
value into account-cannot be perma-
the disturbance has adjusted itself, the
whole amount of money will have the
same purchasing power 1t had before
This rudimentary principle of money
will explain all the phenomena OF our
disturbance of values and trade II men
instead of laying aside their reason
when theY come to monetary affairs,
upon the conclusion that it is an occult
mystery, a black-letter art, hidden from
ali but the initiated, will stick to their
common sense, and apply this prinel-
pie, they may understand the condi-
lions of the currency may see the rea-
sons of all the complicated symptoms
of the past workings, may caIculate
the future operations ofany given mon
etary policy, and may judge the plans
of our public financiers as intelligently
as if they had managed bank discounts
or congressional elections, all their
lives. -5-.,.,r1r,-F .z.-s
The effects on the geneal warfare by
the increase and decrease OF the guam
prices are rising debtors are relieved.
stocks in trade lin which credit is al
ways a large element) are enhanced
in value, the profits of trade are IN
creased, and enterprise of every sort is
stimulated. The result is general
liquidation ofindebtedness, an increase
ofactual capital, and general pros
W.
Quantity of money reduces prices, the
obligations of debtors are increased,
stocks in trade fall on the debtors
hands. the profits oftrade and all enter
prises are changed to loss, trade and in
dustry are paralyzed, property is sacrl-
feed by forced sales, the harvest OF the
we'll secured creditor and OF the capital
ist sets in, extended credit can only be
liauidated by bankruptcy, and the re-
suit is general distress and prostitution.
tits this inevitable contraction of the
cnrrency that makes the calamity OF
the imitation. This is not generally
understood. Mr.. McCulloch, and most
of those who discuss legislative mon
etary measures, regard the rise iIt val
ues. as, theSreal calamity, and fall as a
blessing to be sought.
The quantity ofmoney cannot De hx.
ed, inasmuch as the real money-goIu
and silver-is constantly increasing
The result Is seen in the constant rise
of prices for, centuries. This increase
is so slow and regular that 1t makes no
serious disturbance of values. Inns
much-as the amount cannot be limited,
it is better that II should increase than
decrease, for the reason we have given
above, for the increase lightehs the load
of the gdebtor class-always "a great
class in civilized countries. Ihts nut u
raj Increase of money is SO 1mpercepti-
BILE and so evenly distributed that IL
creates no evil disturbances in trade
II is only when the increase Is artlhclal
and local, by the creation, of paper
lmonev-nioney not brought In by the
increase of production or the profits OF
trade. but artitioially created and
thrown into the ? circulauon-that II
causes an evil disturbance:
The increase of money increases the
demand for things. The rise OF prices
by the increase or money in one coun-
try makes it cheaper to- buy In coun-
tries where prices have not been thus
raiseilo D Thus the creation. OF money IN
one country stimulates 1mportatlons
from other Countries, and eventually
depresses home production. This MIR.
McCulloch perceiyes when he says IN
his report sour imports increase. and
ourexports diminish, under the innn-
enoe OF redundant currency" de
strangely forgets it when he proposes
to restore specie payments without
greatly contracting this redupdantcur-
rency, !, thus depreciating coin TO the
value of the currency, and addlnR the
whole amount of the coin to the redun-
dancy. y. I l5-ss..5's
The outflow of money to pay for
these imports, tendst to reduce the guam
tity of money. to the. general level.
When it reaches that point, prices oi
things adjust themselves to 1t, importa-
tions fall off. and the balance of trade
Is restored, This outflow must con-
Time until the general level is reached,
The increase of money by the issue oil
redeemable paper, depreciates Tor the
time the real money the same as the
paper: but only the money that is cur,
rent abroad willsgo to pay foreign bal
ances. This creates a demand for re-
demption in coin that either causes
contraction of the paper money! or, II