New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1884-04-14
TOO MECH MONEY.

A few days ago, prices of nearly all products
were unusually low. Excessive productit n,
and accumulation of supplies in excess of the
demand, were the causes commonly given.
But n sharp reaction upward quickly followed.
Prices mounted for a few days as quickly as
they had plunged. Nobody pretended that the
relations of supply and demand had changed; i'll
the ordinary phrase it was simply natural
speculative reaction.
1t would be nphilosophic to accept such
changes as q matter of course, without seeking
any cause. Ordinarily, when period OF especial
depression in prices comes, 1t lasts until the mar
kets have cleared themselves; until the normal
relations between demand and supply have been
established. In this case 1t Is necessary To look
tor causes which operate without regard to the
relations of supply and acknowledgements which
stimulate excessive production, which favor
unnatural accumulation of products and which
kindIe speculation before the markets have time
to recover a natural condition and tone.
It need hardly be said that the tariff, to which
some attribute these phenomena. entirely fails
to explain them. If it might possibly promote
over production of iron or of wOOllcn goods, no
body in his senses imagnes that it could cause
unnatural accumulation of cotton or wheat or
oil. or excessive issues of stocks and bonds, or
an irrepressible tendency to speculation in grain
and provisions.
We reached very low prices in 1878, just be-
fore the resumption of specie payments AT that
time there were in use by the people. not III
banks or in the Treasury, about $4S6,5OO,0Oo
of paper money, and 100000 standard silver
dollars. The gold then i'll the country was held
as merchandise, and except i'll a small part OF
the country, did not circulate as money. We
now have in actual circulation, not held by the
Treasury or the banks, according 70 Controller
Knoxs report of last November, over
S916, OOO. 900, and at this time considerably
more. The gold has gone into circulation, and
has been greatly increased, the silver dollars
and certificates have been forced into clrcula-
tom and, in short, we have not lar from two
dollars in actual use among the people where
we had one dollar in October, 1873.
The low prices of 1878 lasted until the
markets had been relieved by distribution.
Then steady and sure improvement i'll all di-
rections began which was presently changed to
the wild excitement of progress by leaps and
bounds when gold came into general use, and
gold, silver and certificates began to flood the
country Over production was natural result,
because prices were inflated. Wild speculation
was natural result because there was a vast
surplus of money with which to carry products
and securities. Excessive issue of securities
and unnatural accumulation Of products were
natural results, because. whatever the state OF
the markets for the moment, the plethora OF
currency encouraged everybody to hope for
another speculative boom very soon.
The speculative excitement has had its usual
effect. After long debauch, headache. The
public is sick the spectators themselves shave
been sick. But every violent decline in prices
only invites to a violent advance, because the
superabundanco of money makes speculation
easy. The markets have not time to free them
selves before a new rush of prices begins.
From this unnatural state of things there is
one way of escape; we can get rid OF part OF
our floating capital called money. We are get
ting rid of part. But, as Congress refuses to
lessen the paper part OF the silver part we are
sending gold to Europe.