The sun. [volume] (New York [N.Y.]) 1833-1916, 1893-07-31
THE LEVEL OF PRICES.

.------
Tho occurrences OF last week compel the
! admission. against which We have nll hitherto
been struggling. that the present financial
, troubles proceed from deeper causo than n
/ nero spasmodic and unreasoning panic. They
are so severe and widespread. and have now
lasted so long without Indications OF passing
| away. that they can no longer be regarded
| as superficial and temporary. They must
| rather DO viewed as the wholesome, though
painful. process OF transition from an un-
natural speculative Initiation to a soberer state
OF feeling and rs destined to end in read Just
ment of prices upon lower level than that
which has lately prevailed.
great deal IL said about tho influence OF
the currency upon prices, and It Is undouoted-
ly true that, In a general way. increasing the
volume OF currency in country tends to In
crcnse the prices OF comm ODDITIES there. while
| decreasing 1t tends to lessen them. An In
crease in the quantity, also. OF commodities
offered for sale while the volume Of currency
remains una tered. tends to reduce prices and
tho advocates OF free silver coinage are quite
right In saying that the production OF wheat
cotton. pork, iron. and other staples, has. dur
ing the past few years. so far eNcseded tho
production Of Gold that the power oi gold to pur-
chase them has been immensely Increased. and
that their priccs measured in gold have there
fore fallen. Tho production OF silver. on the
other hand, having kept pace with the
increased production OF these staples. its
purchasing power has not increased like that
Of gold and. therefore, II their prices were to be
measured in silver instead OF gold. they wouli
be higher than they are In gold. What the adj
vocates Of silver fall to perceive Is. that while
higher prices for wheat. cotton. and similar
things would give tho producer Of them moro
units OF money for his products. he in turn
would have to give the seller Of other commo-
dities more Of the same units for what he
buys. and that the workinGman could not buy
30 much with the same wages under the silver
standard as no can buy under tho gold stan
dard. Debtors now in debt would profit by the
substitution Of silver for gold as a standard OF
value. because they would pay their debts with
smaller quantities OF commodities. but this
benefit would be only temporary. Future
debts contracted under silver standard
would not be diminished
The efficiency OF a deprecated currency in
swelling prices is. however. trinlng compared
to that Of the craze for speculation which peri
odcully takes possession Of masses OF men
and lifts them Off the ground OF sober sense
into whirwind OF wild imagination. As we
all know. the most obvious and natural form
OF gambling is betting upon success and not
upon failure. While the professional book
maker takes the odds against n horse. the
public puts its money on his winning. OF the
gamblers on tho Stock Exchange. the great
majority. especially the amateurs, invariably
buy for rise. and only few Of them. mostly
professionals, regularly sell short. Indeed.
selling short. In times like these Is extremely
unpopular and exposes those who indulge
in 1t to unpleasant comments. They arc
looked upon. and on some accounts with
anemieg OF tina puhlic vvafara
deserving Of general reprobation. Tho conse-
quence is that the tendency Of prices. in what
are called good times. is always upward One
man buys. and after he has bought sells at
small profit to another. who. in turn sells to
another. who also gets another profit and SO
on. until the article dealt in. whether 1t be
stocks bonds, wheat. cotton. oil. or anything
else has risen in the market so high that the
last buyer cannot sell at n further advance and
has to lot go. Then comes a reaction and the
sellers for a fall have their turn. The marke ct
drops until fresh buyers for rise are tempted
to come in, and the process begins over again.
Ordinarily. these fluctuations are small. and
the losses and gains resulting from them SO
nearly balance one another that they do no
great harm beyond wasting time and mental
effort. 1t has been computed that o man who
plays cards steadily for any length Of time
usually comes out at the end. il the game is
an honest one. a winner or loser for but o
small sum. no matter how large his nterven-
ing losses or gains may be. In the same way
q gambler in stocks or produce may win q
great deal on one operation and lose a great
deal on another. but upon striking balance
at the end Of the year he will be neither much
ahead or much behind. 1t is only whom.
after succession OF years. prices have been
pushed UP. little by little. far above their true
hat. f.II A. Al
who are caught in 1t have to suffer.
Ono OF these periods Of small fluctuations
the total result Of which was large advance.
extended from the collapse OF 1873 to the In
fated epoch which proceeded the assassinu-
ton Of President Garfield in 1881. During
that period the rise in stocks was in the aGgre-
gate enormous Chicago Burlington and
Quincy. which sold for rs In 1873. rose to 80
in 1881. Northwest was 3lh In 1873 and 136
in 1881. Rock Island rose from G3 to the equiv
alent OF 2o7.St Paul from 2lH to 1873. Lake
Shore from 81 to 100. New York Central from
rs to 155. Union Pacific from Is to 100. and
Western Union from A to 1877. The coal
stocks suffered severe depression during 1875
and 1877. but they. too. ultimately netted IN
advance. Lackawanna rising from 80 in 1873
to 129 in 1881. Delaware and Hudson from
30 to 115. and New Jeraey Central from So to
H. From 1881 to 1884 prices declined again.
but not with any suddenness except In May. |
] $751; when the Grant Il Ward failures occa-
stoned short-livod furry from which the |
market soon recovered
Tho Barring collapse In 1890 gave another |
check 10 the rise. but this cause. too. soon |
ceased to operate and spec ulation. aidod by the
disbursements which tho Govern
mont had made for bond purchases In 1889. |
and by the steady pouring out of currency |
under the Sherman net Of July, 1890. carried |
prices up and up until during tho first three |
m onths OF this year Atchison touched 36'i. |
st. Paul S3ja. Northwest TIC. Delaware and |
Hudson 100. Lackawanna $50. Lake Shore |
81. Long Island 1885,. Manhattan ia. Mis-
souri, Pacific 90. New York Central lily. Con
eral Electric ia. CordaRo u.s. Pullman 198. |
Chicago Gas ~. Consolidated Gas la. and |
Western Union 1ol. All this went on.
It must be remembered, while Great Britain
was suffering from her enormous losses
in Argentina and in Australia France from
he WASTE OF millions on thv coppar cOrnor and |