The Kinsley graphic. [volume] (Kinsley, Kan.) 1890-1940, 1893-06-09
SENSELESS TWADDlE.
The Fiat of the People. Expressed In Coin
age Laws. Gives to Gfolss and silver ar
Artificial VaIna

ne Sourler-J Ournal puDlSneS thts
morning a communica tion from friend
; in Missouri on free coinage and lega
tender. We think, too, that all of us
that is. almost all of us, want an hon
est dollar;" a 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 lie
contends that Il gold dollar is gold
dollar because congress has said
so, and that when congress says
1929 grains of silver constitute silver
dollar it will be worth 100 cents.
We think not. The fiat of congress
does not make a5.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 its fiat the price of
| silver than it can the price of wheat or
of cotton. Couricr-Journal.
Compare the above senseless twaddle
with the following extract from the
| speech of Senator Jones, of Nevada, be-
fore the international monetary COM
| mission:
IF we are to rely upon gold alone for
money the world must be prepared for
| n period of long enduring distress and
disturbance. But why should we rely
on gold? Its prestige comes from the
! general belief that its value as money
is derived from its value as commodity
| in the market. The fact that the Bank
of England, under the requirement of
It's charter, always gives e5 LIS Cd for
an ounce of the metal, and that it can
nowhere else be got for less, is taken
TO be IA demonstration that the demand
for gold as a commodity determines the
value of the metal as money.
The annual yield from the mines be-
| ing about 500, 900. 600. and the demand
| for the metal in the arts about S6o 010,-
600, while for coinage there is supply
| of but SO, 100000. 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 aswell as use in the arts.
Against this, what is the aggregate
| supply? Manifestly not the. trifling
production of one year. The metals
being practically indestructible, the ag
gregate supply available each day is
| tne entire stock in eXistence-the 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 aggregate
supply is the supply from all sources;
the aggregate demand, the demanl for
all purposes.
The total amount of gold in exist.
ence, estimated in money of the Uni ed
States, appears to be: in round nJm-
, berS. about 1903 0O).0 Such pr
ton OF this as exists in the form of
bullion is not the only portion on W hich
the art demand is mlde. When Il
jeweler, dentist or glider wants gNld
for the purposes of his trade he d .es
not seek the seller of bullion tie
takes the gold coins and mclts them Up.
| As have said, therefore, the supply
available for commodity purposes q nd
against which that demand pressea is
| the entire stock of gold in existence.
This means a commodity demand of
SG5, 900, 900 operating against supply
| of $4,000, 200, 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 ;ib-
surd. We know that all the labor a1d
all the salable property in Europe and
America are constantly offered in cx-
/, change for gold. 1t would not be too
! much to assume that each dollar of the
| 1900. .OO0,0 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. 900. 600. 900.
| The proportion, therefore, which the
| commodity use of gold bears to the de-
| mand for its use money is the prC-
portion that Is bears to $4,000.
1T is this colossal demand. and nos
! the insignificant art demand. that fixC:.
| 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
| oil fg,x,
coin impressed with the stamp of the
government. From the frequency with
| which in France the government au-
| thorities debased coinage. the word
| bullion (.mintD 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 it as moncy-limit the demand for
| it wholly to the commodity demand
| and what should we see? A stock of
| "a. 900. .OOO. 900 on the market at given
| time, against which there would oper-
| ate an art demand of only s65, 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"
Why They Failed. (.
| A Washington dispatch of May. 10
says: Secretary Carlisle said this morn
ing, in speaking of the failure of 50
many national banks, that the banks
were evidently ip bad condition and
failed of their Own weight without any