The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-08-14
THE EXPLANATION.
RISING PRICES AND PROSPER
ITY.
(Philadelphia American.l

(Pnlladelphla Amerlcan.)
When prices ARE falling, then it is that
the farmer, no longer able to dispose of his
crops at profit, becomes impoverished,
and, unable to purchase even those things
which he looks upon in times of prosper
ity as reconsideration it is that the man.
ufacturer suffering losses becomes dis
heartened and closes his mill or factory
or curtails production. Yet, when labor
is thus reduced to idleness, when least
is being produced, then it is that the mar
kets are said to be "glutted,' that surplus
products accumulate on the hands of pro-
ducers, and we are told to look for the
cause of falling prices in overproduction
or cheapening of production.
1t is undeniable that prices are highest
and products find the readiest market
when everybody is at work and most is
being produced, and it is, therefore, not
reasonable when production is curtailed
and prices ruinously low to seek for a
remedy in further curtailment of produc
ton. Overproduction is a sham, shad-
Ow, will-o the-wisp used by the gold
monometallsts to lead astray the people
and divert their attention from the true
cause of falling prices
AS prices fall products do, of course, ac-
cumulate on the hands Of the producer,
out these Accommodations of unstable pro-
ducts are not the cause Of falling prices,
but are caused by falling prices. The ap-
probation of gold has made money so
dear to amount to an almost prohibit
DRY tax on the exchange Of the surplus
g cd for hn ,!IrC
products of others.
AS gold appreciates prices fall, and as
prices fall gold flows from productive in
to nOn-productive channels, for he who
invests money in productive industries
not only receives nc interest, but his prin-
cipal depreciates, while he who withdraw
his money from productive enterprises
and invests it in debts Of solvent debtors
or holds it idle, reaps the advantage of
falling prices for the further prices fall
the greater the purchasing power of his
gold. Consequently, as gold appreciates,
1t besOmeS more and more centralized in
the financial centers and a few hands.
When prices are rising or gold falling the
owner Of gold seeks the producer. for his
gold only yields return when invested in
the products Of labor, but when gold is
approaching or prices falling the producer
must seek the owner of the gold. Thus,
when gold is falling the buyer seeks the
seller, the local centers are established
and the seller makes the price, but when
gold is approaching the seller must seek
the buyer, not in the local centers, but il.
the financial centers where gold is CEN
tralized, and he must accept the price Of
fered by the buyer, the owner of the gold,
or his products will remain unsold, I'M
sought.
AS the price fixed by the owner of gold
leaves the producer no profit, the producer
hesitates to accept the price offered and
only sells when driven by necessity. This
is the reason why stock accumulates on
the hands of all producers and it is this
accumulation that the gold-monometal-
lists point to as proving the theory Of
overproduction.
But as to the explanation advanced by
the gold-monometallists when they deny
that the fall in prices has been caused by
the contraction of the volume of money
and attribute the fall to cheapening pro-
>duction. A sufficient answer is to be
found in the fact that between 1850 and
1878 prices rose steadily, although i'm
proved methods of production were used,
inventions multiplied and the cost of proA
duction was reduced. If, as the gold
monometallists tell us. the labor cost of
production fixes the prices of all commo
dities, prices should have fallen, but they
rose so per cent.
& But we need not go back so far. The
recent rise in prices refutes those who att
trlbuted the fall in prices to overproduc-
ton and the cheapening of production.
Early in the year the prospects of the
early restoration of silver to it's place as
money led to an advance in the price of
silver. and with the rise in silver came a
general advance in the general price of
commodities. Mr.. Sauerbeck's tables
show that prices were over per cent
higher in May last than in the previous
February. Prices have advanced still fur
Their during June, and possibly may have
advanced relatively more in this country
than in England.
The gold monometallists told us prices
were low because of overproduction We
have increased production and prices
have risen. They told us prices were low
because of the cheapening of production
But we are still using the same improved
methods of production and yet prices have
risen. They tell us that the laborer will
suffer from the restoration of silver to its
place as money because his wages will not
rise proportionately with the rise in
prices sure to follow the reconciliation
Of silver-infiation, as they call it. But
mark, prices have risen, and if we may
put faith in gold organs no one has
gained more than the wage-earner
AS matter of fact, the newspapers
have conveyed exaggerated impressions as
to the magnitude of business improve
ment. Prices have risen slightly and
wages in some instances have been ad.
vanced, but the gold organs ignore the
true reason. 1t is that silver has adj
vanced in price and removed to a slight
extent the competition of silver-using
countries. The growing demand for the
restoration of silver to its place as money!
Is bearing its first fruit in the present
partial revival We are having a mere
taste of the advantages and prosperity
that must return in the wake of bimetal-
ism. If the & old-monometallists succeed