The Yale expositor., 1895-07-12
BACK TO OLD RATIO.
SILVER UNDER FREE COINAGE
WOULD SOON INCREASE.
Outlining the Forces Which May BE
Expected to Work Together to Re-
Establish Former Comparative Values
OF the Two Metals.

AS an important factor III lnlS Cdhi-
paign of education is the elimination
of undisputed points trust it will per-
NIT believer in bimetallism to admit
some of the points made by the dis
tinguished gentleman whose letter ap-
peared in The Record of Wednesday,
June 10, Mr.. James II. Eckels, comp
troller Of the currency.
Mr. Eckels, in the article above men
toned, says: "A careful study Of many
of the arguments advanced by the ad-
vocates of the free coinage of silver
shows them to be justly open to
Legitimate criticism" Undoubtedly he
is correct as to some of the arguments
advanced by the advocates OF BIZ
metallic law for the United States at
16 to 1, but many of the arguments ad-
vanced by both sides do not really touch
the question at issue, except as they
show what motives have actuated legis-
lation in the past and the monetary
principles to be observed in deciding
upon a remedy.
The principal fact which character
ICES the gold standard as unjust is
this: Since the tie was severed which
previous to 1873 bound silver and gold
together, so as TO make them through
out the world, for monetary purposes,
practically one metal - bimetallic
standard-the measure or standard of
exchange value in the gold-standard
countries has increased so that in Eng
land during January and February,
1895, the wholesale prices of commod-
tiles were 40 per cent lower than on the
average OF the years 1S67-77, which Is
the average OF the twenty-five years
1S53-T tSauerbeck's table OF prices,
March number of Statistical Society's
JournaD. Forty per cent is &C 2-S per
cent of 60; in other words, the exchange
value of gold increased &C 2-S per cent
as compared with the periods above
mentioned In the United States the
increase has been fully IS per cent. (See
senate report on wholesale prices and
wages for fall in prices to 1922
ii. The far-reaehing effects of this appre-
citation of the measures of exchange can
only be realized when its effects are
considered in detail ore of the prin-
cipal effects of falling prices is TO dis
courage production; lessened produc-
ton results finally in lessened wages.
and large numbers of men out of en-
ployment. Another evil is that the
burden of all debts OF eighteen years
standing are nearly doubled. Anoth-
er very important fact is mat where
prices are fixed by law, such as street.
car fares gas rates, etc, the exchange
value of the price so fixed mas nearly
doubled in the last eighteen years.
Again. many prices are fixed by GUS
tom and so do not fall In proportion as
other prices fall
There are several other III effects
which have follow cd as result of the
severance of the tie which previous TO
1878 held silver and gold constantly to-
gether at about the mint ratio p.1.iGcl
for in the bimetallic laws. Mh.Ie &c
ratio between silver and gold was fixed
through the operation OF me bimeta,!ic
laws, the exchange between s.iver-u5-
ing countries ana gold-us!ng countries.
The i'll effects which followed the sew
ersG"e Of the bimelallic tie We Will not
stop ~ enuAerate.
As regards the criticisms which Mr.
Eclles makes of the arSu; ents for free
coinage, the principal point which the
writer wishes to make is that Mr..
Eckles explains away the appreciation
in the exchange value OF gold.
Mr.. Eca.es calls attention 10 the
great increase in this coui trv of bank
ing facilities since 1873. Granting it,
what does 1t demonstrate? Simply this:
The extension of banks and c,earir.
houses has economical the usg VI mon
ey and so helped to keep general prices
from falling to where witlou this econ
, omy in the use of money they would
have fallen. In short, general prices
would have fallen 70 much greater
extent had there moi been in the United
States the increase III III use OF banks
and clearing houses. IN the future n
proportionate extension in the econo-
MIXING of money through the use OF
checks is not probable. Therefore II
the gold standard is continued, the tai
in prices, so far as this cause is con-
cerned, is likely to be greater than in
the past.
Furthermore, the tendency to make
cash payments by those who do 10.
check against a bank account IS in
creasing and should be encouraged.
But keeping cash on hand dlminishes
the rapidity of circulation and SO tends
to lower prices. (Same effect. Prof.
Marshall. advocate OF the gold stand
ard, in his evidence before English gold
and solver commission. sec. 9559.)
Another principal point which Mr..
Eckles makes is that silver Is
now used very largely as money
In the United States, and that
France and the other states
OF the Latin union and many Of the
other states of Europe ere using large
quantities Of silver. All this is true,
but 1t does not alter the fact that in
gold-standard countries the measure of
exchange value has nearly doubled In
the last eighteen years as compared
with the twenty-five years preceding
1877.