Ottumwa weekly courier. (Ottumwa, Wapello County, Iowa) 1872-1899, 1873-11-20
INITIATION IN CURRENCY.

ls INFLATION IN CURRENCY.
Every old miser and bullionisi vii
roll up the whites Of his eyes when he
hears Of a proposition to increase the
currency of the country, shake hi.
head, and talk to you of the dangers
of Imitation"
Mr.. j. T.. Williams, Presiden, Of the
Metropolitan National Bank OF New
I York, in his recent letter to the New
York Eceaiag Post, under the head
OF "WE HAVE TOO LITTLE CURRENCY.
says:
"Now, MI. Editor, did il ever occu,
10 yon, in mourning over the high
prices You attribute TO paper, that gold
and silver, after all, may be the real
culprits? Let us see Between 1S47
and 1868 California produced no less
than $9O0.O0O,O00 gold, and is now
producing at the rate Of at least sixty
millions a year. Australia. between
1851 and 1867, yielded Il3f.OO0, 900, or
$3.50, 100000. This aggregate--Sl $780,
OO0.ON has been swolleR since then
to at least two thousand million dol
lars. And now the annual gold pro-
duct OF the world is onr hundred aud
fifty millions.
1on know, sir, that The paper cur
rcncy Of England has been fixed for
| twenty years: that OF this country has
been also permanent since 1864. for
the United States notes have been re-
duccd as much as the national bank
notes have been increased. Behold
the net result. Within twenty-five
years gold currency has accumulated
four times as rapidly as paper curren-
cy' Two thousand millions Of gold
TO five hundred millions oil paper II
Is true that for the first ten or fifteen
years after California began 10 Weld
her product of gold and silver the
world was simply filling up with the
precious metals, and therefore prices
| were little changed. Of late. how
ever, gold tells on the values OF COM
modities the world over. An advance
of thirty to for y per cent. even in
hard money France shows the silent
but irresistible effects our gold has ac-
complished there. 1t is the same in
England, for, although paper remains
stationary, gold, in consequence Of in
creased product, is cheapened, and ar.
ticles OF commerce comparatively
made dearer. Old prtccs. then, can
nerer again come toner calnes! Thank
the precious metals. not he innocent
paper, for that result; and do Justice,
hence forth, TO q currency nj once The
cheapest md most convenient. Your
beloved gold, not our much abused
paper currency, has inflated prices
everywhere. As the relative price of
gold compared with silver has varied
from time to time for centuries, SO
will vary the prices Of gold and COM
modities. according to supply and de-
mand.
Nor should we lose sight Of The
quality Or durability which belongs to
| specie.
The stock Of gold and silver remains
the same always--aftcr allowances for
uses in the fine arts. You cannot eat
it like wheat, wcarit out like cotton o,
iron, or consume il in any way. Once
produced it exists as bullion or cur.
rcncy forever afterward.
| Here, then, is explained-it il hoped
satisfactorily question you ask
ask 'as to the fact of the almost uni
versai rise in prices which has taken
place within the past ten or twelve
years. 1t is only remarkable the ex-
| planati0n did not occur to you.
You likewise call on .'the distin-
guished author" 10 explain how il Is
that We have been able to invest such
enormous sums in mere speculative
1 fentcrprfscs-raiiways, buildings, ex.
trayagant living, etc. And to this
half replying yourself, you say: "IIt
will answer we have been prodigious
ly prosperous in spite of war. Chicago
and other fircs,' etc.
This, | think, ia true Is far as ii goes,
but 1t is not complete answer. For
some time after the successful termi.
nation of the war our credit was &C
good in Europe, and the rates of inter
est so high, compared with theirs. tha,
we were enabled to negotiate cart loads
of railway bonds, to form loan and
trust companies for lending money in
Chicago and elsewhere. and general,
to tempt foreign capital to llow ihi.
way.
Then. too, as many may think. under
a mistaken policy in regard 10 saving
interest on our United States bonds
we have sold a very large amount ol
five per cent. bonds TO Europe. paving
off the original bonds here, in the
hands of our savings banks and citi.
zens, who originally loaned the money
to the government. These bonds were
taken when Europe would not touch
them and ont of the money so raised
in part at least, the war was success.
fully prosecuted, and then the foreign
er is ready TO take the bonds bearins
five per cent. interest, and cur owl
people are required to give them MP
not to be paid out of accumulated in
come of our country, but ont ot chenp
er money boSyoned abrond.' Thus two
hundred millions, at one time, wcr,
paid back to our people and they wcr,
forced to find new and less desirabl,
investments. Twice year. now, til,
| gold must be sent to Europe to pa,
| interest formerly paid to our citizens
| So far as we are concerned, such gol,
is as much lost to ms as if sunk i'm IN
Atlantic, whereas, if paid to our citi
Zens, even at a higher rate, it woul,
have kept the wealth here, ready to b.
loaned again to the government j,
time of need.
This process, it will be scent -thes
VarlOuS processes, lnueed-br0ugh
large. sums Of money which neccssari
ly found their way into railways ant
buildings.
II Again, you say your explanation il
J "that we have gone on making none,
much faster than we have mad,
value" (whateyer that may mean,
"and that prices have gone up becaus,
VIC had more money than we conlt
use rightly."(?)
have already given my view Of til,
cause Of enhanced prices. But
would ask you, who must remember
the panics of 1897 and 1857. il tho,
did not occur in consequence of tn,
export of a few extra millions of yolt
to Europe? Would they have happen
ed--could thcy--if the banks hat
possessed few more millions o
specie! Certainly not, and so III,
banks suspended. A general prostra
ton of credits and ruin of fortune
then took place, although IN specie
pdyiag tiiaes, trhea al hts happened
how much more disastrous Mdt thai
this.
The simple hWM is, .re haze aop N