Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1893-06-14

OVO, wn1ie 1or coinage there Is a supply
OF but $4,000, 900, it is argued that the
commodity use is greater than the
money use, and therefore fixes the
value of the metal.
Il maintain that this theory is funda-
mentally wrong. Instead of the com
modify demand establishing the value
| of gold as money, it is the demand for
the metal as money that fixes its price
as commodity. This should be plain
/ from a 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 stock
that has been accumulated through the
slow process of time. reinforced each
year by the current product from the
mines. In other words. the aggrega te
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, 600, ,0OO Such por-
tion 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
s65, 900, 900 operating against a supply
of $4,000, 600, 900, or in the proportion
that 65 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. It would not be too
much to assume that each dollar of the
q, 1000, ,000, 900 in existence is earned
that is to say, an effective demand is
created for it-twice in each week, or
104 times a year. This constitutes a
total annual demand of s416, 600, 600, 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 65 bears to 100000.
''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 ('mint) 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, but it is in
creasing in an accelerated ratio.
Take away from gold the demand
for 1t as money-limit the demand for
It wholly to the commodity demand
and what should we see? A stock of
$4,000, ,000. 900 on the market at given
time, against which there would oper-
ate an art demand of only sos 900, 900 in
any one year. This would constitute
more than sixty years supply of the
metal for use in the arts What let
me ask, would be the value of any
other commodity of which there were
sixty years supply on the market at a
given instant of time? What would be
the exchangeable value of iron. steel,
brass. copper or nickel if the available
supply Of those metals in the markets
of the world were sufficient to meet all
demands for sixty years to Gomez"
The function of money is to facili.