The advocate., 1890-07-16
Topeka, KANSAS WEDNESDAY, JULY lG, 1890

policy we had the great financial crash
Of 1873, which prostrated the entire busi-
ness Of the country and compelled almost
every bank TO suspend operations Prices
fell with rapidity that wrought the
greatest hardship on every productive
enterprise. John Sherman's prophecy
was fulfilled to the letter Business men
were unable TO meet their contracts and
debtors could not obtain money TO pay
the interest ON their debts.
During this year President Grant said;
| The currency has been contracted by the with.
drawal Of the 79O notes, or bonds.
The Chicago Inter Oceda of June 30,
1870, said:
| 80 the shrlnkage went on nc the beck and bid
OF the money power, OH tile volume had been
contracted VI 23O0OO,OsO,
Senator Stewart, Of Nevada, in reply to
the question, "What is the cause Of so
much dissatisfaction among the laboring
men Of the country" replied
Contraction Of the circulating medium .
The price Of lnbOr has decllnedn and this has been
produced by contraction. The system
OF contraction has been constantly going on
This IN In pursuance Oi the cherished policy Of
Che bOndh0ders, They never have, I'm any one
Instance, since the war closed, suggested nlens
ure OF legislation which did not Involve COntulc
tlOn,
So great was the distress everywhere
prevailing, that Congress august Is,
1876 appointed monetary commission
composed of three members of the Senate,
three members OF the House and three
experts, 10 investigate the financial cOndi-
tlOn as il related TO the industries Of the
nation, and report the result OF their in
quiries 10 Congress. The following OK
tracts are taken from their reports
While the volume Of money Is decreasing even
although very slowly, the value VI each unit Ot
money II increasing In corresponding ratio, ANA
property IN falling In price. Those who have con
tTaCted 10 pay money find that II s constantly be-
coming more difficult tO meet their engagements,
The margins Of securities melt rapidly away, and
che COnilScuilOn by the creditor Of the property
ON which they are based becomes only a question
aged and stagnate because the cost OF producing
commodities to-day will not be covered by the
prices ODtalnable for them tomorrow. EX-
changes become sluggish because those who have
money will not part with II for either property or
services, beyond the requirements Of actual cur
rent necessities, for the obvious reason that
money alone is increasing In value, While every
thing else h declining In price.
This results I'm the withdrawal OF money from
the channels Of circulation, and its deposit In
great hOardS where IL can exert no influence on
prices. The boarding of money, from the nature
Of things, must continue and increase not only
until the shTinkage OF its volume has actually
ceased, but until capitalists are entirely satisfied
that money lying idle on special deposit will no
longer afford them revenue, and that the lowest
level Of prices has been reached. IL IN the hoard
Ing OF money, when lts volume shrinks, which
causes fall In prices greater than would DO
caused by the direct efteCt Ot decrease In the
stock OF money Money, In shrinking volume,
becomes Che paramount object OF commerce In
stead of lts benencenG instrument Instead OF
mOblzlng industry, II pOsOns and dries up the
life currents It Is the fruitful source OF political
and social disturbance. It f0ments strife be.
tween labor and other forms Of capital, while
Itself hidden away In security gOrges on both. II
rewards elOge-flgted lenders and hlche9 from and
bankTupts enterprislng borrowers 10 Circuates
freely IN Che stock exchange. It has I'm all ages,
been the worst enemy with which society has
had % contend. The great and still continuing
fall Of prices In the United States has proved the
most disastrous 10 nearly every industrial enter
prise. Report OF SlUeT Commission, page 68.
The worst effect, however, economically con-