Buchanan County bulletin. [volume] (Independence, Iowa) 1869-1891, 1870-04-15
GOLD AN d THE RISE OF PRICES,

The premium on gold, beginning
its upward march in 1869, soon after
the passage of the Legal Tender Act,
eliminated in 1864. At the end of
this year it stood at 1927. Its high
est point during the year was 1886,
and its lowest $l5l. This was
large advance upon 1869, as the
latter year was upon 1862.
The prices Of commodities followed
up in the same general proportion
and the consequence was that the
latter part OF 1864 was the period of
the highest average range Of prices.
Tie price of many articles was
doubled, that of others tlebled, and
that of still others quadrupled.
Wages, though slower to move, had
received strong impulse in the up
ward direction.
The theory Of this ascending scale
of prices was the depreciation of
currency as compared with the gold
standard. Though gold has. almost
wholly disappeared from the circles
OF trade as money, being bought and
sol | like any other commodity, Il
was nevertheless assumed to be the
indicator Of values Prices hence
went up with the advance of the
gold premium, and the purchasing
power If paper currency was cor
respondingIy reduced.
We have never regarded this
price imitation as legitimate result
OF the natural laws OF trade, with the
execution of comparatively few
cases. 1t certainly was not due to
large decrease in the supply OF com
modilies i'll proportion to the demand,
since no such general TACT has eXis-
ted at any time Nor was it due to
such an excessive issue Of paper cur
rency as to make the monetary
medium altogether too great for the
amount OF trade, since this too was
not fact; and, moreover, pliccs
have fallen from the scale of 1864,
without any reduction in the quantity
of currency-a circumstance which
shows that mere quantity was not
the cause of1he initiation. Nor again
was i; due TO the ilredeemabeness OF
the currency since this, though
sufficient reason tor some degree of
depreciation, car never explain the
statistics OF the price table. This
currency was legal tender, issued
H.. 4
and, though irredcemable for the
time being, there never was any Just
gruund Tor doubt rs to It's ultimate
payment i'll coin or It's equivalent.
No one, not absolutely berct. of COM
mon sense, can believe that the de-
gree OF the stability and solvency OF
the Government was al any time fairly
indicated by the varying rates Of Ike
cold premium, and the corresponding
movement in prices as expressed in
the currency of the country.
The real canse of this large imitation
we find in two connected influences.
both Of which were mostly artificial.
The first was the enormous speculo-
ton in gold AS Il commodity, chiefly
in the New York Gold Room, having
no relation to its demands for business
purposes or to the scarcity of It's
supply. The price OF gold from dav
to day and week to week was almost
entirely the mere creature of such
speculation. 1t was manufactured
by gold gamblers, without any refer
ence to the gold wants o! the com
munity. The second influence was
the popular assumption that although,
gold had almost wholly ceased to be
used as money, and WAS mainly dealt
in as a speculative commodity, it was
nevertheless the ideal standard by
which to measure The cxchanccablc
value of that which was in public use
as money. This assumption entered
into the ordinary operations of trade.
The gold gamblers i'll Wall Street
ard Broad Street established the
currency price Of gold, and the traders
made this price the general law for
the urchas!ng power OF currency in
relation to other commodities. The
movement had its prime impulse in
stupendous, unpariotic, and selfish
system of gold speculation. Ii This
one influence could have been kept
ont OF the market, there would nave
been no such rise OF prices. There
would have been none it the people
could have forgotten that gold had
ever been the standard If value.
There was really no natural occasion
for this immense imitation. The
whole thing was largely ideal and
speculative, being based on market
that was ab"ormal'y influenced by
the gold premium. 1t gave the ira.
ders fine chance to make money.
and imposed heavy tax upon users
and consumers. The people, having
had an ample taste OF this kind of
luxury, are now not little gratitiel
that the tide OF prices is turning III
the opposite dlreclion.-N y. hide
pendent
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