The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1892-03-23


The argument is fair and seems logical
but shall trysto show that the assump-
| ton upon which it rests is not logically
true and that the argument is, therefore,
misleading. One dollar. of the present
purchasing power and in only the pres
enL forms possible for it, would not an
swer the present demands of business
for this country became one dollar (10O
cents could not at best be In more than
100 places at one and the same time.
and could only buy things of trivial
worth when used; SO that, as there are IT
any and all times probably several mil
lions of exchanges seeking to be made,
including things of both great and small
worth, a single dollar of the present
purchasing power and only divided at
most into 100 parts, would lack vastly
both in purchasing power and-vclume.
But it is, | believe, well established
law laid down by political economists
and corroborated By reason and ex-
perience. that to diminish the supply OF
an article while the demand remains I'M
changed, increases in the same ratio the
value purchasing power of the article.
Applying this law to the case in hand, if
we diminish the supply OF money from,
say one billion dollars, to one dollar
while the demand for money remains
unchanged, we multiply the purchasing
power Of that dollar by one billion, Civ
ing it precisely the purchasing power
that the billion dollars had, and nov in
order to give it precisely the same capac-
ity for making exchanges that the billion
dollars had-which Mr. NJ. assumed TO
be preposterous-we have only 10 give 1t
volume by sub-dividing it into the same
number and variety of parts that the
billion dollars had, and distinguishing
the different sized parts by different
names for convenience of trade.
Whether gold dollar could be sepa-
rated into so many parts is not vital to
the main discussion, but | am inclined to
think if molten gold to the amount of 81
were thoroughly incorporated in a cru
chile of molten grosser metal, that each
coin made from the amalgam would con-
tain its proportion OF gold.
But, let us, in pursuit of the main
agreement, go little further and discuss
tenn in the direction of 81 currency.
Gold or its representative is, at present,
the worlds medium of exchange, and
the currency of each nation must, by an
memorable and necessary law of COM
merce, sustain its proper relation to that
medlum-or, rather, the relation of ma
TONS currency to other commodities is in
eXorably fixed by the relation it sustains
to gold. There is and can be substan-
tally no difference between money and
the gold bullion it either contains or can
be converted into. The money of ma
ton being a mere convenience to the
phase of the worlds
aggregate of exchange medium, so that
whenever the relative scarcity of a ma
tons money, or the relative abundance
of It's commerce to that of the world at
large, tends to raise the purchasing
power of the nations money above that
OF the gold bullion it contains or can be
converted into, then the bullion itself, or
Its representative, in obedience to the
law of supply and demand, flows in and
supplies the lack; and, conversely, when
the relative abundance of a nat on's
money or the relative smallness of its
commerce to that of the world 1T large
tends to lower the purchasing power Of
its money below that of the gold it
contains or can be converted into,
tidO Olltt III CNiiii SilGDS, IONo
out until their is left in purchasing pow
er only the amount of exchange medium
called for by the relative bulk of the
nations commerce to that of the world
at large.
If my premises are correct it follows
that no nation can maintain either a
greater or less aggregate of purchas-
ing power IN its currency than the world
at large has for the same bulk of com
merce; that the worlds medium of ex-
change is practically the only medium Of
that, like wheat or beef or
bacon, it gravitates to the parts of the
world where most required for use and
that before we could reach the condition
IF haying but 81 with which to do the
present business of this country the
volume of gold in the world would have
% shrink from the many tons now in
existence to less than ounce, and not
'nly that but gold would have to still be !
'etained by the world as its standard Of |
which it would not probably /
10.
Mr.. NJ. says further in his reply that I
he volume of money circulated deter /
mines the disposition OF mind TO ex- |
'hange freely; and that contraction of /
he circulation has a baleful effect up /
N the mind, destroying confidence. 1t /
trikes me that Mr.. VI. will have to mod (
fy either one or the other of these prop
sitions, For instance: 5000 per cap
Ia would he a very large
olums of money, and according to his
irst proposition ought to determine the
minds of everybody to a very free ex
hange; but should it transpire that the
olume of money had just been con-
racted from $1,000 per capita down to
900 per capita, then according to his
econd proposition confidence would be
one and its place would be fear and dis
rust; one or the other at least Of the
roposition must be faIlacious. If he
adj said that confidence has a salutary
feet on the mind Of the Spectator, in
reasing the amount of money seeking
Deculative investment. but dIstrust has
baleful effect on the mind of the specu-
n. contracting the amount Of money
seking speculative investment, | should
ave quite agreed with him
What ended our real estate boom in
he dav in February. 1851: Was il the
ldden disappearance Of money, or was {
the knocking out" Of confidence by ,
he Halt the EAGLL called:
In regard to this question OF conf
ence. there is 4 vast volume Of business
rowing out OF the actual pres
IL necessities OF humanity in which
plays but small part. The
regulation Of money while in tie hands
the great working masses l. not very ]
rcely question 81 confidence. and in
" opinion the great problem Of our dsy d
not how to keep speculative confidence !
i've and vigorous so that we can have !
erpetusi boom and be able to employ !
Dor on speculative work IN order that