The representative. [volume] (St. Paul, Minn.) 1893-1901, 1893-06-07
sENsELEss TWADDLE.

SENSELESS TWADDLE.
The Fiat Of the People, Expressed In Coin
age Laws, Gives to Gold and Silver IN
/ Artificial Value.
The Courier-Jou rnal publishes this
morning a communication from friend
in Missouri on free coinage and legal
tender. We think, too, that all OF us,
that is, almost all of us, want an 'shon-
est dollar dollar of full value at all
times. That much admitted, we have
only to determine how we can secure
such dollar There is not much diff
ference Of opinion between the Courier
journal and this. correspondent. In
deed. it is confined to one point. He
contends that gold dollar is gold
dollar because congress has said
So and that when congress says
1925 grains of silver constitute silver
dollar it will be worth 100 cents
We think not. The fat of congress
does not make 25.s grains of gold worth
81. The market price determines the
value of both metals. The markets,
and not congress, control. Congress
can no more fix by it's fat the price OF
silver than it can the price of wheat or
of cotton.-Louisville COurier-J ournaL
| Compare the above senseless twaddle
with the following extract from the
speech of Senator Jones, of Nevada, be-
fore the international monetary COM
| mission:
eff we are to rely upon gold alone for
money the world must be prepared for
la period of long enduring distress and
disturbance. But why should we rely
on gold? It's prestige comes from the
general belief that it's value as money
| is derived from it's value as commodity
| in the market. The fact that the Bank
of England, under the requirement OF
| its charter, always gives E3 lis Cd for
an ounce of the metal, and that it can
nowhere else be got for less, is taken
to be a demonstration that the demand
for gold as commodity determines the
| value of the metal as money.
''The annual yield from the mines be-
! ing about 500, 900, 900, and the demand
for the metal in the arts about S65, 00O,-
| 600, while for coinage there is supply
of but S35, 900, 900, it is argued that the
commodity use is greater than the
money use, and therefore fixes the
value of the metal.
81 maintain that this theory is funda-
mentally wrong. Instead of the COM
modify demand esta blishing the value
of gold as money, it is the demand for
the metal as money that fixes it's price
as a commodity. This should be plain
from consideration of the factors en-
tering into the question of supply and
demand.
''The demand for gold, as for other
things, must mean the aggregate de-
mand for that metal for all purposes
whatever. 1t must, therefore, include
the demand for gold for purposes of
money as well as use in the arts.
against this, what is the aggregate
supply? Manifestly not the trifing
production of one year. The metals
being practically indestructible, the ag-
gregate supply available each day is
the entire stock in existence-the stock
that has been accumulated through tho
slow process of time, reinforced each
year by the current product from tho
mines. In other words, the aggregate
supply is the supply from all sources;
the aggregate demand, the demand for
all purposes.
''The total amount of gold in exist
ence, estimated in money of the United
States, appears to be, in round num-
bers, about $4,000, 900, 900. Such por-
ton of this as exists in the form of
bullion is not the only portion on which
the art demand is made. When a
jeweler, dentist or glider wants gold
for the purposes of his trade he does
not seek the seller of bullion. He
takes the gold coins and melts them up.
AS have said, therefore, the supply
available for commodity purposes and
against which that demand presses is
the entire stock of gold in existence.
This means a commodity demand of
sos, 0O0, 900 operating against a supply
of 81, 600, 900, 900, or in the proportion
that Is bears to 1000.
"What, on the other hand is the de-
mand for gold as money? To measure
this demand by the coinage of each
year would be in the last degree alb
surd. We know that all the labor and
all the salable property in Europe and
America are constantly offered in ex-
change for gold 1t would not be too
much to assume that each dollar of the
81, 600, 100000 in existence is earned
that is to say an effective demand is
created for it-twice in each week. or
1O4 times year. This constitutes a
total annual demand of s416, 600. OOO. 900.
The proportion, therefore, which the
commodity use of gold bears to the de-
mand for its use as money is the pro-
portion that IS bears to 416,OOO.
''It is this colossal demand, and not
the insignificant art demand, that fixes
and determines the value of gold. The
statement that the precious metals are
dependent for their value or price upon
the coinage demand is supported even
by the very name bullion which
originally meant the mint where the
alloy for coinage was prepared and the
coin impressed with the stamp of the
government. From the frequency with
which in France the government au-
thorities debased coinage, the word
bullion Cmint) came to signify the
base mixture issued from the place of
coinage.
''Not only is the money demand infin-
itely the larger of the two Int - Sc -,