The great West. [volume] (St. Paul, Minn.) 1889-18??, 1891-06-19
SUPPLY AND DEMAND
A Short Chapter an the Fa1lacies of Such
n Doctrine.


q Doctrine.
There is an old-fashioned. flea-bit-
ten, teethless saying that supply and
demand regulate the price of every
thing It is true only when applied
to both sides of the question. ] have
wheat. and want pork. Wheat is very
plentiful and there is not much demand
for it Will / have to trade a large
amount of wheat for a small amount
of pork? That depends upon the de-
mand for pork. If there is large
amoTnt of pork and not much demand
the exchange will be even. Now, sup
pose I wish to trade wheat for pork
and find that will have to give
large amount Of wheat for small
quantity of pork would l be right in
asserting that there is too much wheat
in the country? May be so; but on
the other hand, may be it is because
there is not enough pork in the country!
We generally exchange our produce
for money. Those who SO blatantly
assert that supply and demand regulate
the price always wind up by saying
that the low prices are due to there be-
ing too much produced 'Over-produc-
ton" Was it over-production of
weat or scarcity Of pork? Is it over
production of produce or scarcity of
money? The surest way of answering
the questions correctly is by compar-
ing the amount of wheat and the
amount of money in the country dur
ing the time of low prices with the
amount of wheat and money in the
times of high prices. AS we have not
before us any reports later than 1888,
we'll compare '88 with 68, period of
twenty years. In 1868 the country
produced and imported together seven
and one-half bushels of wheat to every
person in it, and the amount of money
in circulation was $21.47 to every
person; the price of wheat was $1.421
bushel. In 1883 the wheat produced
and imported together amounted to
less than seven bushels per head, and
look at the price, 81 cents bushel.
Was the low price of 1888 due to too
much wheat, or too little money? Not
only does this apply to wheat, but to
every other crop. This year money is
still scarce, but corn and oats are
scarce too; hence they bring better
prices than when they were plenty; but
let wheat corn, pork and beef get
scarce and high, and the same scarcity
of money to buy them continue, and
we may expect distress and trouble of
the worst kind. OF course if there
was a scarcity of all things which
money buys, and a like scarcity of
money, the price would not change,
but scarcity of bread and meat only
will raise the price of them, and unless
there is plenty of money in circulation,
the poor must suffer. For instance, a
short crop of grain and meat will not
raise the price of metals, wood or
earthenware; hence the millions of
workingmen in factories will not get
higher wages, yet it will cost them
more to feed themselves and families.
We have now seen that the amount of
money in circulation has as much to
do with prices as the amount of the
that money represents the produce of
labor, it is only natural and reasonable
for this to follow. Go back to our first
test and put all of the money in one
pile and the produce in another. If
you add to the produce only, prices
will fall If you take away from the
money pile on ", prices will fall. If
you take away from the produce pile
only, prices will rise. If you add to
one pile you must add the same to the
other; if you take from one pile you
must take from the other The laws
of supply and demand must be applied
to both sides alike. Alliance Farmer.