The Worthington advance. [volume] (Worthington, Minn.) 1874-1908, 1875-10-08
materially differing from that Of othe,
civilized nations.

materially differing from that OF Othe
civilized nations.
While the fourth resolution of tn,
Convention demands currency which
at the will Of the holders OF the proposed
90 bonds may be made equal in volume
10 the amount OF the national debt, tn,
ABOVE cited requirements of the scconG
fesf luton demand that the currency st
created shall be safe, and that it shall bt
variable according to the needs of the
people III amount and value not material,
dif1erent from that OF civilized nations
dhese two resolutions involve solecism
I ou cannot produce $2,Oo0,OO0,00O o.
lrredeemable paper currency which will
not III value be materially diferen: from
that OF civilized nations. You cannot
produce single dollar of irredeemabl&
currency which will not from the moment
1t is uttered be affected by such differ
encc in value. The value of this cur.
rency consists entirely in its purchasing
power. The increase in volume raises
prices simply, and price and value are
different things. zA~speculator has one
thousand barrels of pork. He issues ono
thousand tickets, by each Of which he
promises to give one barrel of that pork
to the bearer and sells those tickets. Sc
far this is a plain TRANSACTION. Each
ticket is at par. But he afterwards
under mbarrassmcnts in his business
issues one thousand more tickets of the
same tenor, Tut does not provide himself
with any more pork. When the fac.
comes to be understood the tickets de.
preciatc, and the holder gets but half a
barrel Of pork when they come in for re.
demption in case they are all prcsenccd
at once. The alert and wary capitalist,
however, understanding this fact, urloads
these tickets in advance of their presen.
tatlon, pays them to the workman. ex.
changes them for 'portable property
with the unwary before want OF conf.
dcncc becomes general, so that when tho
day Of liquidation comes, the loss is by
them and not by him. 1t is just so with
any currency which is not always re.
dcemable at once in specie. The tickets
refer' cd to may make the pork business
lively for time, but they surely result
Ill collapse Of that interest whenever the
necessities of the holders prompt them to
apply for their redemption. Such an
increase Of currency at once un-
settles prices. 1t debauches industry
byiotoxicati,.g it with speculation. 1t
teaches men to endeavor to increase
their store without rendering an equiva.
lent in value. 1t bears With disastrous
force upon the laboring man, because his
wages are the last to rise under the infa-
tlon. Stocks, articles of luxury, mer-
chandise rise first in price-wages not
until long atterward. Its effect upon ag-
riculture is peculiarly evil. We have D
large surplus of agricultural products
which must be sold in the markets OF
Europe. The value of this surplus de
ternincs the price of the whole crop, and
the value of this is founded upon what it
brings in gold. So the farmer sells what
he raises at a gold standard, but he buys
What ne wants at currency prices. Wheat
in 1871, with a currency, estimated at
$50 per capita, was worth no more than
it was in 1860, with currency of $l4.50
per capita, though prices Of things to be
purchased by the producer had advanced
at least SO per cent an amount far be.
yond the premium on gold in 1874.
The expansion benefits nobody except
the debtor by enabling him to pay with
less than he(agreed to pay, and the spec.
ulat or who in such times reaps the benc-
fit by his operations.
1t is true that during the process of in
flation great business activity SUPER
vcnes. Bnt this activity has always
filled, and always will fill the volume OF
currency very soon. Then things come
to standstill; collapse follows fever and
then the cry goes up for more stimulus
in the shape Of more currency, until
finally the end is reached in reputation
that immcdicable palsy of nations.
In the course of the process above in
dicated the following consequences re.
suit: The neccssarics Of life advance to
the extent of the premium on gold plus
a Fictitious increase occasioned by the
Of further increase in the cur
rency; wages Of the laborers do not cor.
increase, relatively to the
purchasing power Of the currency in
which they ara paid; they are lower than
they were before the increase; the savings
of the people, such as depositors in
savings banks, have suffered partial con.
fiscation; future prices and executory
contracts have been rendered so uncer-
tain in view Of the doubt whether the
next step will be contraction or expansion
that business hasano longer been conduct
ed OH Legitimate basis; rage for spec
ulation infects those whom it never be-
fore tainted; the ease with which debts
are paid creates false facility in incur
ring new and greater obligations as mar
gins to carry these speculations interest
which was low during the time Of expan.
sion has become suddenly high at the
hccessitous moment Of reaching the. limit
Of expansion. This prevents renewals,
precipitatcs the sacrifice of property,
checks business and finally produces
widespread bankruptcy.
In 100 the colony of Massachusetts
issued f40,000 in bills Of credit, redeem
able in four years. IN III the: time Of
redemption was set at five years, and in
l7l2 at six years. Depreciation began.
A popular demand was made for more
paper money. 1nl7l5:a bank was au.
thorjzed to issue 100000 redecmablc in
ten years. The time Yas afterwards ex'
tended to thirteen years. Depreciation
went on. The Governor advised the As.
sembly to issue 100000 to revive the
low state Of trade, "bccausc bills were
scarce" It did so in l7l9. In l72(
trade became paralyzed again and more
currency was called for. In 172l, fl00,
600 more was issued; in 1922, 100000
in 1928 100000 more. The home gov
ernment then prohibited further action O
this kind by the colony and banks wer'
used to repeat the evil. Trade, was stag
nant and money scarcc,'' The mer
chants Of Boston issued fl10,000 redeem
able in ten wear. Silver ran to twenty