Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-08-30
From the New York Tribune.
Fiat" Money and its Effect Upon
Wages.

are advised to vote for the indefinite post
ponement OF the resumption OF specie
payments and for unlimited issues OF ire
deemable paper money by the Govern
ment, in order tsat all kinds of industries
NAV be stimulated, prices advanced and
wages increased. 1.-The wheels OF indus
try are stopped" say the philosophers OF
this new scnool, ''because the currency oi
the country has been forcibly contracted
until its volume is too small 10 meet the
legitimate demands Of trade. The result
mas been runous decline in the price OF
almost everything produced in the United
States, the destruction OF capital aud the
distress OF labor. Issue more paper mon
ey and prices will begin TO rise, produc-
ion viii! be stimulated, labor will find en-
pioyment at better wages aud prosperit,
will return"
The fundamental error in this argument
Is the assumption that the price of any
thing de spends entirely upon the abund
aDce or scarcity Of the currency Tn.
effect OF demand and supply and cost OF
production, TO say nothing OF local and
Incidental causes, is entirely lost sight OF
a single example will illustrate this. On
,he first OF Sep .ember, 1873, No. Amer
can pig iron was quoted in the New York
market at $4IaS45 per ton, and printing
cloths at 63a6sc. per yard; to-day, No. |
American pig iron can be bought Tor Sl6-
oOaslo per ton, and printing cloths Tor
ll-l6c. per yard. Here is reduction o
AT least GO per cent. in the price OF iron,
and more than 43 per cent. in the price oil
rinting cloths, while the actual reduction
ii the volume of the currency has no,
been one-fourlh as great. The supply o,
ron and cotton cloths exceeds the de-
mand, aud no artificial stimulus ever in
vented could permanently increase th.
price OF commodity unless the demand
ior 1t were simultaneously increased.
The trnth is that our means for produc-
ing the staples OF trade, such as bread
.utis, iron and cotton goods, exceed the
demand for them at old prices, but we
nave gradually reduced the cost of pro-
duction SO that the surplus OF our fields,
mines and looms begins to find mar ket
IN foreign countries, and even England il
alarmed lest American iron and cotton
goods shall successfully compete with her
own. Increased exports mean Increased
employment for American labor, increased
profits Tor capital and increased wages for
workingmen. Any policy that tends. by
increased cost of production. TO close tn.
doors OF foreign markets to American
goods, would be calamity from which
labor would be the first to suffer.
But, admitting that initiation would
cause temporary rise in prices and an
increase In the rates of wages, common
experience has proved that the latter i,
never commensurate with the former or
with the Increased cost of the common
necessaries of life. Statistics referred t.
ny Mr. George Walker in his testimony
before the Hewitt Committee Yesterday.
show that during the period of greatest
initiation in this county, and cousequen,
widest speculation, the cost of living in
creased 100 per cent. when compared
with what it was in 1860, while the aver
age advance in wages was only about co
per cent. In other words, the working
man had to pay 81 for what cost him 81
in 1860 while he only earned 81 60 by
the same labor Tor which he received 81
before. Nor is this all. The rise In
wages does not come at once when the
prices of commodities increase. The his
tory OF prices in this country during the
war shows that long time elapsed after
the cost OF the common necessaries of
life began to increase before there was
any perceptible advance in the rates of
wages.
The sufierings Of the workingmen of
this country cannot, therefore, be perma-
hently relieved by an imitation of the cur
rency. On the other hand, any apparent
benefit which they might derive from the