The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-01-31

LEON. had become subJ 4 of serious
complaint among the population. The
cry was often heard, ait II time Tor
another revolution, and this time we shah
know whom 10 hang; tits the prOpiictorsl"
Absurd "a was the sentiment, it was hut
the expression of the feeling of u large
class in Paris.
The fact being established that prices
steadily advanced in Europe IN man
ner recognizable byall after the discovery
OF the California and Australian gold
mines. the only question remaining, is
whether it is or not II plain case Of cause
and effect. To prove that II is such,
il Is not necessary to show an nd
vance in exact proportion to the increase
in the volume of circulation. The river
may swell to double its size III its channel,
but though this may cause an overflow
that mandates the surrounding country,
the rise is comparatively small where the
water spreads over Il vast eXpausc. So
with an enlargement of money circu-
lntion that embraces the world in It's scope.
The supcrabuudance spreads Overan I'M
mcnsc field of TRANSACTIONS and the natu-
RAJ effect of the increased supply IL thereby
greatly modified. Thus prices do not adj
vance in proportion TO that increased vol
une Besides. transactions multiply in con-
sequence of the stimulus, more commodi-
ties become marketable, aud prices adj
vaucng, more money Is required.
And here let us say that we are not 50
dogmntic on this matter us the BidictW
represents US II Is not altogether because
we hold it TO be an equally sclf-evidcnt
proposition that volume regulates price.
rs that measure establishes quantity, that
We hold To- the doctrine. The axiom is not
only n deduction of reason, but it rests on
a wide basis of facts. 1t is dcduccd from
the most comprehensive investigation.
Nothing could be more complete and
thorough than the examination into the
facts made by the English Bullion Com
mittce Of 1910. a general rise of prices
says their report, "a rise in the mar
ket price of gold, and fall of the foreign
exchanges, will be the effect of an Excess
sive quantity of circulating medium in Il
country which has adopted "A currency not
cXportable to other countries or not con-
vcrtible at Will into a coin which is export
able"
soundc,t and acutcst minds of the British
Islands, headed by Mr.. HoRNER, who, rs II
committee OF Parliament, devoted months
ana years to n detailed exploration of all the
facts bearing upon the subject. Ii is thus not
u mere dictum. The committee were stout
ly opposed at every step. But they
fought, by their facts and their logic, II
Jealous majority out of the field. And
to day, if anything III finance stands
upon an Improbable basis, 1t is the doc
trine of that Bullion Report. 1t is wholly
inconcluslve 10 pit names, however high,
or speculdiions, however ingenious, against
such an array of fact and logic as they
combined in their report. Aud it was
in this sense that we dissentcd from the
speculative conclusions of tile authorities
quoted 10y the Bulletin.
And now, in regard TO the second period
to which the Bulletin refers, and in which
ii is alleged the paper circulation in France
rose from 1,3i, 100000 francs in 1SGJ to
!.sO3, 600 in 1875, and yet prices showed
no corresponding advance. We have not
the faces to enable lis to judge in regard to
prices of various commodities during that
period. We should be surprised TO know
that there were not some extraordinary
fluctuations in that turbulent aud disas-
trous time. But we can very readily con-
ccive II reason why prices of non-military
material should not have materially
changed.
Though not positively redccmahle in
coin, the paper circulation in France was
actually kept up near to the gold point;
and yet it was sufficiently below it to sup
plant gold in the currents Of trade. The
circulation was thus altogether in paper
The com was withlrawn. Very largo
quantities found their way into the bank,
aud were judiciously used in feeding the
market, 50 as TO prevent too great drpre-
citation of bank notes. With the gold with
drawn and paper substituted, which was
the natural result Of the situation, II Will
be seen that there was no such excess in
the volume Of circulation rs would appear.
JUDGED, rs "A matter Of fact, ii Is very pos
siDle that there was no excess whatever IN
the ordinary channels of trade. And thus
turbance OF values, especially us the affair
was so well MANAGED 10y the bank us to
Ike p its Issues from falling into dscrcdit
Thus keeping out the element of uncer-
power 10 initiate prices was so far held in
check as TO practically amount to nOthih =.