Phillipsburg herald. [volume] (Phillipsburg, Kan.) 1882-1905, 1889-12-27

A Paper Prepared for the st. Louis Silver
Convention on Currency and Free
Coinage by H b. Kelly, Of
Mcpherson Kansas.

coinage on SILVER under the present law involves
two propositions, the first having reference to
the worlds standard OF values, while the second
has reference more particularly to the volume OF
circulating money in the country.
The argument for free coinage rests upon the
demand for an increase in the volume OF the
worlds standard of values. The argument for
full coinage may go no further than the de
mand for an increase in the volume of money in
this country without reference to any enlarge
ment of the volume of the standard Of values.
Gold is the standard by which the value of 9TH
IT moneys, paper and silver, is measured, the
value of these being determined by the facility
with which they may be exchanged for gold;
hence as gold is a standard of very greatly re-
stricted volume as compared with the worlds
commercial transactions, so must the volume of
silver and paper money Interchangeable with this
ratio, with the volume of gold. Gold being the
standard by which the volume and hence the
therefore the standard by which the price of labor
and It's products is measured. AS the volume OF
the standard of value is diminished, so IN core
spending ratio IS Its purchasing power augment
ed, and in an increase ratio with the augmenta-
cline in the price of labor and its products.
Free coinage OF silver and its general accept
4nCs by the world as CO-assOclate with gold as a
standard OF value would prove the great 1oerator
Of labor from the oppression to which it is sub
IeCted. A coin standard, rather than gold stand
ara not the qouhle standard OF two metals, CIV
ing the world standard of double the capacity of
a
5urate with the growth of production and bust
ness of the last thirty years.
Paper money or demand notes, constitute the
money OF business transactions. Paper IS the
worlds medium of exchange in business, and as
the volume must increase with the growth of
BUSINESS so must Uhe SCaG5Eu py Wh1cn paper is
valued and the base upon which it rests grow in a
like ratio with the growing demands of the busi-
ness OF an advancing civilization.
The population or per capita basis for approx
mating the required circulation of older countries
where production Is a liked annual quantity and
be made to apply here, where development and
improvement are rapid and where changes in
condition of population are continuous. no more
than can a growing boy be clothed year after wear
by the same fixed standard of measurement
Currency is any invention OF civilization by
which commerce and trade are carried and
Just as civilization advances so is there growing
demand for the use of currency. A pastoral PEG
pie living In tents and feeding and clothing them
selves have no use for this circulating medium
while the many new enterprises that spring up
with our growing civilization, the increasing
army of wage workers. a class receiving and eZ-
pending It's earnings IN currency, demands In a
corresponding EdUlO a grown. IN me volume OF
circulating mOnev. The extension of settlements
remote from business Centers, calls for wider
distribution OF money CIRCULATION, making 1t less
responsive to business demands. The growing
volume of railroad and other stocks and bonds
necessltaUes an increasing agSregdJ!0h OF money
at the great commercial CenterS with winch to
handle this class of securities, and this growth Is
far beyond the ratio OF increase IN popu1aUOis so
that an adequate circulation at the present time
for all business demands, might without chang
ing the ratio to population prove wholly made
quate a few years hence and as ours is a country
of rapidly changing conditions, 1t is important
that this be kept in view IN adjusting currency
The rapidity of the change that is transpiring,
appears in part. in the growth, from 1870 to 1885,
IN the industrial classes the number engaged IN
dg1lCIIIuie having increased curing ulG 1dSG ue
Cad6 but q per cent, while the nOn-agrlCultural
classes increased so per cent at the same time
and as development IN mining, manufacturing
and transportation has been more rapid the pres
ent than during the last decade it is safe to est
mate CWo-thIrds OF our entire INDUSTRIAL pOpuia-
ton at the present time, engaged IN other pur-
suits than farming.
as might be tTaCeabie to shortage in our cIrcula-
ton, the population standard proved of no value
as its application revealed but little per capita
change, but when business growth was compared
to currency growth, it was like an electric blaze
turned upon a picture in q dark corner, the lines
and defects appearing as they had not before.
If this standard has heretofore been applied 1t
has escaped my observation, hence 1 desire par
tiCuIariy to call attention to this thought, cur
rency growth compared with business growth.
permeates all lines of business falls most heavily
upon agriculture In TulnOusly low prices, for the
reason that the farm can not shut OFF the engine
of production at Will, nor hold products for bet
ter prices. The diseases in our commercial sys-
tenn is wide spread and organization IN all pur-
suits is being effected for epurpOse of detecting
and remedy1ng the eYlI. Farmers always the
conservative element IN all matters OF great I'M
port loyal as class to the best interests of gov
ernnenU, becoming dlscOuIaged with Ine long
drawn out depression, are casting about Tor the
purpose of relief if it be possible to find it.
Upon the per capita reckoning sufficient cir
CuiatiOn for the older countries of Europe would
prove inadequate here as production costs more,
population Is more widely distributed, develop
ment and improvement greater, municipal In-
debtedness greater, hence greater percentage of
the circulation is always locked up in sinking
funds to meet maturing bonds. And yet when
measured by population, production and material
wealth, while the United States is the richest
country the globe, in circulating money We
are poorer than France or England, nOtWlth-
standing our requirements are greater than
either.
The fifteen years from 1874.to 1888 inclusive, di-
vIdes into three separate and distinct financial
mol uTrr~Hg Of iva
follows: The first, 1874 to 1873 inclusive, was the
period preparatory to the resumption OF specie
payments, during which the volume OF currency
was diminished Ii per cent. which with Clevel-
Opment during the time Of perhaps 20 per cent in
production aud business, created a wide gap be
tween currency supply and demand hence de
cline the price OF farm staples OF 81 per cent,
and an increase Of 40 per cent in the number of
failures.
The second period, 1879 to 1888 inclusive, circu-
IatiOn was augmented So per cent by resumption
OF specie payments ana by large coinage OF 90
nestle and import gold followed by an advance
In prices OF farm staples OF % per cent
and a decrease OF Sc per cent IN the number OF
failures.
During the third period, 1884 to 1888 inclusive,
growth IN volume OF currency Ieu 10 per cent
short Of growth of production and business,
prices of farm staples declined 10 per cent, fail
ures increased IN nuLLlDet % per ect4IJ anu IN
amount involved 45 per cent Of these three
periods the two in which the volume OF currency
failed to keep pace with the grown OF puslness
were characterized by financial depression, low
prices and business failures This period IN
which we had a growing circulation was marked
by activity, good prices and financial prosperity
Failures stood in the period of diminishing
currency, 1874 to 1878, one in IS; IN the period OF
currency expansion, 1879 TO 1873, one in I2S; IN
the period of currency stagnatiOn, 1884 to 1888,
one in 90. During this last period our coinage
amounted to but 2g5 millions of dollars, % nil
lions of which was sent abroad, as against AS
millions coined during the second or prosperous
period. As the enlargement OF individual busl-
ness requires an increase OF money with which to
carry ii on. so 1t is with the whole people.
by no means lose sight OF the supply and de
mand as important factors IN determining prices,
nor of the general decline by reason of the great
#Trrrn- INN god
ton and cheapened transportation carrying the
products OF the world into the same market to
which we send our surplus, neither OF the loss
sustained by reason thereof, during I'VE years, of
90 Der cent in our exports of bread and beef sJus.
Yet primarily the extent of the standard of values
and the volume OF money responding to business
demands, determines relatively the quantity that
maEds
With the growth then Of production and. of