Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1886-01-22
.GoId Scarcity and the Depression of
Trade"
For the Dlspatch.l

..Goid Scarcity and the Depression of
Trade"
For the Dispatch.l
In the October number, 1885, Of the
Nineteenth Century there is an article
on " Gold Scarcity and the Depression
of Trade " which shows such evidence
of profound thought upon this practical
and important question that ] beg that
you will give me the use Of your
columns for brief abstract Of its con-
tents. The writer, Mr.. MOreton Free
wen, is speaking for England alone and
advocates bimetallism and the free
coinage Of silver there. If it is needed
there IN that creditor country how vastly
more important is it here? He makes the
broad statement that the common idea
of attributing the depression of trade
to over.production is popular fallacy,
because oyer-production is impossible.
lie admits that oyer.production in any
particular trade is frequent, but impera.
tive causes always force quick re-
adjustment. He proves cOnclusively
that prices have been receding to the
standard Of lS49 prior to the celebrated
gold discoveries. and he declares with
out hesitation that the contraction of
the gold circulation causes the low
prices. Prices have fallen all
over the world more than 90 per cent.
in the last twenty years, and wheat.
especially, was lower in 1885 than 1t
has been for one hundred and ten years.
Prices went up on account of gold dis
coveries, which commenced in lS49 and
eliminated in 1864 ; and the decline in
the output Of gold, which commenced
and has continued since 1865, has in
the last five years brought about the
collapse of prices, because not until
1880 had the great accumulations Of
the metals been absorbed in the arts or
been dssipated by friction. lie
proves conclusively that the an
nual production of gold is but little
over one half of the requirements
of trade, and is yearly lessening, and
of the amount actually produced many
millions are used for other than cur
rency purposes, thus rendering the de-
felt a matter worthy of the most seri-
Gus consideration. He ascribes the fall
in silver to four causes--namely, its
characterization by Germany, its de-
monetization by this country in 1873
and our resumption Of specie payments,
the present Bland act relating to silver
coinage, and the hostile legislation of
England. 1t is we'll known that in 1882
Germany exacted war indemnity from
France amounting to $1,000, 700, 900,
to be paid in gold. The reason why it
was payable in gold was not only be-
cause it was the most precious metal,
but if paid in silver it would have,
to use the language of the writer,
choked the German minis for
many years. The consequences of
this act have been more momentous
than the direct issues of the Franco
German war. Silver was deprived of
its legal-tender value of the United
States in 1873, thus making gold the
currency basis in America, and when
in 1879 specie payments were resumed
both the United States and Germany
became active competitors for gold.
The writer uses the following plain
language about the Job" demone-
tizing silver in the United States
There are sufficient reasons for the
belief that the demonstration Of sill
yer in the States in 1873 was
Job, the particulars of which may
shortly come to light" Mr.. Alex
ander Del Mar, an authority on cur
rency subjects in America, and who sss
a Federal ofiice-holder at that tirS. ID.
recently stated publicly that ~, hasN,,
who the financiers in Eurole knows !
had enormously oyerdrt were who !
Council drafts and othewn Indian
ties, and between whom silver securi-
zation OF great profits vi the reali-
obstacle of the free coinap the single
tender position Of silver c and legal
States. the United
Comment upon this crl
erous act, which was dSlty and treach-
about by wholesale s,s,;ilsss brought
places, is unnecessary "'ioe,! - high |
that it did more ths/y' eAoeP' " ~
cause the downfall " az sn pe.' otS
party, under WIZ Vi 'ne nePG !. .aa
~ D. ., third cause was the
:, my on;n;on id this suggestion is,
rious eonsiderat worthy Of the most Sc
silver crisis in A XIh!fn has rs. caused
ton having destroyed the selfad-
justing functions of the two metals,
and by limiting the coinage of silver
has impaired the action Of the bimetallic
principle. For this has been the result
Of the Bland act: The compulsory COIN
ageofsome five millions sterling annually
has not given sufficient employment to
silver to sustain the ratio Of silver to
gold in the face Of German demoneti-
zation and the cessation Of coinage in
France. Had there been no such halt.
ing between two opinions had the
United States agreed to coin and issue
ell silver brought to the minis ipso
fdcto, she would now have been sigma
tory of the Latin Monetary Union, and
plus this steady demand thu ratio