The White Pine news. [volume] (Treasure City, Nev.) 1868-1906, 1894-03-10
Stewart on Contraction.


The following extract is taken from
Senator Stewards book on the "Sci-
ence of Money" The stringent con-
dition of finance, together with the
depressed state of commercial and
industrial pursuits throughout the
world, forces the study of our financial
system to the front. Senator Stew
arts idea of expansion and contrac-
ton of money is given below. He
says:
A constantly increasing volume of
money is necessary to supply the in
creased demand, arising from the
growth of population and business. A
decreasing volume of money, as COM
pared with the demand, is disastrous.
It oompels the debtor to pay in dear
er money than he undertook to pay
when he entered in the contract. It
discourages enterprise, because pro-
perty produced or acquired by the in
vestment of money, declines in price,
and thus the probability of profit upon
any venture is diminished. When
money is advancing in value, or what is
the same thing, is increasing in power,
the human instinct of gain induces in
vestments in money. Such invest
ments are made by exchanging prop
erty for money, with a purpose to
hoard it, or for bonds and other credits
which are investments in money fu-
lures. Investments of this character
do not create wealth, but absorb
wealth already produced.
When prices are rising, the same
instinct leads to the acquisition of
property. Property is acquired by
purchase, and by production which
results from the employment of labor.
In production is the source of all
wealth and prosperity. Spectators
of every description, including dealers
in money, in the language of Wall
street, ego long" on those things,
whether property or money, which
are rising in price or value, and go
s'short" on those things which they
believe to be on the decline. Since
the demonstration of silver, money
has been appreciating in. value, and
the competition to acquire reliable
money future has been SO great as
to induce people to accept very low
interests, in view of the prospect of
an increase in the purchasing power
of money invested. The decline of
prices has been so serious, as to in
duce prudent men to go short on pro-
perty, by declining to engage in new
enterprises, and by converting their
property into money futures. En-
forced idleness, produced by the en-
hancement of the gold, or what is the
same thing, the fall of prices, has
withdrawn the progressive and the
ambitious from productive undertak-
ings, and has led them to seek wealth
by investing in money futures.
An infinite variety of causes effect
progress and prosperity. Wars, pesti-
lence, famine and bad government,
are common Affections of the human
race. But, in the absence of known
and great calamity, contraction of the
circulating medium is the only instrl-
ment of universal misery. No form
of civilization or government has been
able to withstand it's blighting infu
ence, or to survive it's long continu
ance. The unlimited use of gold anc
silver, under present conditions, woulc
rescue the country from pending dis
aster, and, if the mines should con
tinue productive, would secure a pros
porous future. If, ignoring wei
known facts, such as, that the quan
tity of gold coin in existence is con