The advocate and Topeka tribune., 1892-08-31


and not property, unless the creditor
shall choose to accept II, that lS required
for the payment of debts, and the power
Of property over credit Is limited to lts
command In open market over money,
which command must be greater or less
as the volume Of money is larger or
smaller. If the amount Of credit which
can be safely extended upon property be
not governed by the price It can be sold
for, then credit must be an institution
based upon the whims and Caprices of
those who extend 1t. II credit is either
increased or diminished upon property
which has undergone nophysical change
and without reference to It's price, such
increase or diminution must be ascribed
to the abnormal mental condition of the
money-lender; this is q disease which,
as 1t is not caused by q change In mate
rial conditions, ls beyond the reach Of
the remedies Of the political economist,
and must be treated psychologlcally.
The mistake is often made that prices
are not controlled by the volume Of
money, because they have neither risen
nor fallen concurrently with, nor In exact
proportion to, the increase or decrease Of
such volume. The precious metals are
dlffused over 80 vast a surface and their
current production is 20 small In COM
psrison with accumulated stocks, that it
takes considerable time for changes In
their yield to 80 affect their volume rela-
lively to population and business aS to
produce any sensible effect upon prices.
The entire property interests Of a coun-
try are united In maintaining, and IL pos
sible In advancing, the price Of property,
and In resisting to the uttermost any
decline. A temporary maintenance Of
nominal prices, even in the presence OF @
shrinking volume Of money, 10 especially
practicable with imperlshAble property,
such as real estate. When money begins
to become scarce by reason Of shrink
age In Its volume, the first effect upon
real estate Is found to be, not decline
Of It's nominal price, but dlminutlon In
the number of transactions. Market re-
ports quote real estate "CluIl; fen Gales,
but prices frm." This stsgnation is
ascribed to temporary causes, and a
speedy recovery predicted. In order to
maintain prices the terms of purchase
are made easier. The amount Of cash
payments is reduced, and the deferred
payments, secured by mortgage on the
property, extended over longer periods.
After q time this expedlent fails, and,
even then, nominal prices are eunnaturally
held up for short period by the strug-
giles Of those who have purchased upon
these extended credits, and by the tenac-
ity of owners who refuse to sell at lower
figures, and mortgage their own property
to protrsct their power to hold. The
Of voluntary transactions Is
finally followed by the activity Of lnvol-
untsry ones under the direction Of sher-
lffS and by the foreclosure Of mortgages.
Upon any material decline in the price
Of real estate, a large class Of investors,
believing that the bottom has been
and desiring to profit by the re-
action which they think lS sure to come
speedily, enter the market and tempo
rsrlly check the decline. Another fall In
prices sweeps them and their margins
away, and.a third class Of dealers, now
a haolutalu carfoip that hokfoun vnrloaa