The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1894-12-19
WEDNESDAY, DECEMBER 10, 1894.
A MONoMETALLIsT ANSWERED..

swering it The Sentinel would first call
the Items attention to the fact that it
mistakes The Sentinel's position. The Sen
tinel is not an advocate Of the free COIN
age of silver by this country alone. 1t
does not hold that the appreciation of
gold Tor depreciation Of prices was caused
by the decentralization Of silver by this
country alone, but by its general demone-
tization by the commercial nations. 1t
holds that no one country alone can posi-
bly, undo the evils of this general demone-
tization, and restore standard money TO its
former relation to commodities. 1t holds
that change to a silver standard by this
country (and that is what free coinage
by this country alone necessarily means),
when such a change would mean doub-
ling of all values of commodities and a
shrinkage Of one-half in all values Of
securities not expressly payable in gold
would be ruinous to the country. But on
the other hand, It holds that the demone-
tizadon of silver was. and is, a real in
jury not TO mine-owners, but to the whole
people. And it holds that if this country
had adopted free coinage in 1878 when sill
yer and greenbacks were on par. and had
gone TO a silver standard. the action would
have counteracted much of the loss of
specie resumption and would have pre-
vented the loss Of millions Of dollars that
the American people have suffered since
then.
The Item first denies that gold has ap-
preciated in value, and claims that aver
ages prices Of commodities have depreci-
ated on account Of improving machinery,
new processes, etc. This argument has
been invented by monometallists since the
present question arose Previous to that
time all economists admitted that a move
ment of average prices was a movement
OF standard money. The complete answer
to it is found in this fact: From 1850 to
1873 average prices advanced as rapidly as
they have declined since then, and no one
can point to any influence of improving
machinery, new processes, cheapened and
extended transportation, or any other
cause now claimed to reduce prices, that
was not as extensive and influential from
1850 to 1873 as it has been from 1873 TO
1894. The only difference between the two
periods, in general character, is that in the
first the supply of standard money gold
and silver was enormously increased by
the unprecedented production Of the
precious metals in California Australia,
Nevada, British America, etc, while in
the second the supply of standard money
was steadily diminished by the demonetiza-
ton of silver by the several commercial
nations. If the Item can reconcile this re-
markable change in the movement OF
prices with IT'S theory it will do more than
any other monometallist has ventured to
attempt.
The Item next argues that gold cannot
have appreciated because Interest rates.
have declined. They have declined slight
E-not so much as claimed by monometal-
hsts-but did it ever occur to the Item
that there is a difference between interest
rates and INTEREST,"" Suppose that in
1874 wheat was worth 81 per bushel, and in
1894 it was worth $3.50 per bushel In 1874
A loans to 500 in gold. payable in gold
in twenty years. with per cent interest.
At the same time B loans to A 100 bushels
of wheat, payable in wheat in twenty
when they settle. A gets 5000 in gold and B
gets 200 bushels of wheat. but AS 500
OF gold interest has appreciated just as
much as the principal, and BIS 100 bushels
of wheat interest is deprecated just as
much as his principal. There has been no
change at all in the interest rate, but there
has been an enormous change in the in
terest. You cannot measure the apprecia-
ton or depreciation of anything by inter
est in kind. But note this: A can as well
afford to loan his gold at per cent. now
&c he could TO loan it at per cent in 1873.
because when he uses his interest income
for his support So will buy as much now,
on the average, as Sc would in 1873. AS a
matter of fact the tendency of an appre-
ciating money standard (or depreciating
prices Is to lower interest rates, but not
10 lower actual interest as measured in
purchasing power.
The Items last proposition is that prices
depend on the total supply of money of
all kinds and not on the supply of stand
ard money alone. 1t puts its argument
very ingeniously thus:
II all values (prices and wages) are
W. fixed Gn so far as the money factor
can affect them) by the volume OF gold
only, then it must follow as night follows
day. that 1t could not affect these values il
all the balance Of our currency were de-
stroyed in an Instant In other words.
the existing one Thousand millions of cred
II money Silver and paper, having had
no influence in fixing present values, it's
utter and immediate destruction could
have no influence in changing or "unfx-
ing" those valuesi The mere statement
OF the proposition shows It's absurdity. IL
our currency should be suddenly con-
tlacted 6ve-eighths Of it's volume all sane
business men will admit that prices
would go down rapidly and business Of all
kinds would be Frustrated.
This seems very formidable, but let US
consider It for moment. It is founded
on the idea that values are fixed by this
country alone. whereas they are fixed by
the combined supply and demand OF the
world. In this country there would at