The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-05-08
HOW Is THIS?
Silver Rises and Wheat
Rises.
CONCURRENT RIsEIN PRICE OF
SILVER, COTTON AND
WHEAT.

the part of the gold-mOnometallist to
"dislodge the impression" that the fall
ia silver has caused a ruinous fall in
prices, and that the only remedy for the
continuous fall is to be found in the re-
monetization of silver. The Ledger de-
elares it will take time and effort to
"dislodge" this growing conviction, hut
1t adds that By the circulation of Sound
money literature and the influence of
Sound money" newspapers and capable
speakers it can oe dcne.
In conclusion, the Ledger says that "a
rise in the price Of farm com modities
refutes the theory that governmental ac-
ton with regard to silver keeps prices
at their present level. Cotton has risen
recently; SO has wheat; so also has beef.
The fluctuations in prices SHOW that
causes other than the relation of silver
to the currency effect business affairs"
Here we find the rise of cotton and
wheat referred 20 as a REPUTATION of the
fact that the fail in silver caused a fall
in the price OF ali staple commodities,
but the Ledger neg,ects to mention the
rise In the huilios. price of silver coin
cident with tbs rise of cotton and
wheat. Instead of proving that the fail
in silver is not related to the fail in
prices, the. recent rise in cotton and
wheat only adds further proof Of the
fact that the price of silver controls the
price of wheat, cotton ETC. Silver falls
wheat and cotton fail; silver rises, wheat
and cotton rise. This has been invari-
ably the case. 1t is not merely coinci-
dent; it is a necessity.
When silver falls it causes a fall in
exchange with silver-using countries
when it rises it causes rise in exchange
In 1873, before the demonstration of sill
yer, and when silver was at par with
gold, not at our ratio of Is to /, but at
the French ratio of 1914 to /, the Indian
rupee was worth 2 shillings, the Next
can dollar was worth it's face value as
bullion. Then Indian wheat was worth
10 shillings a hundredweight at Bombay
about $1.38 per busheD, and Mexican
wheat at Mexican ports was worth ap-
proximately the same. This wheat could
be laid down in London at about IL shil-
lings 4 pence per hundredweight (about
$l.70 per busheD. AS silver was dis
placed as money it fell in price, and eK-
changes with the silver-using countries
fell with it, until now rupee exchange
fiuctuates at l shilling instead of 2, and
Mexican exchange at so cents instead of
par ($D. What is the result? Silver
prices in India and Mexico have remain
ed approximately the same for the last
twenty years. The Mexican and Indian
farmers can afford to lay their wheat
down in London at one-half the rates
Tin golO prevailing in 1873. Exchange
has fallen SO that the Englishman can
buy double the exchange with the same
amount of gold in 1895 as he could in
1873, and yet when the Indian and Mex
lean converts this exchange into silver
he can purchase with the proceeds as
much today as he could IN 1873.
our surplus product of wheat and cotton
to Great Britain for market, and the
price we can obtain for the surplus fixes
the price of our whole product, less the
cost of transportation. There our pro-
ducts come in competition with those of
silver using countries. We measure our
products in gold, and o,:r exchange with
England consequently remains at par;
but we must sell our cotton aud wheat
at fall in price equivalent to the fall
in exchanges between England and the
silver countries, consequently the price
we obtain for our cotton and wheat in
England must fluctuate with the fall
and rise of exchanges with the silver
using countries.
An ounce of silver will buy as much
as ever in India or Mexico or Argentine.
With an ounce of silver the Englishman
can buy in Bombay about bushel of
wheat or 10 pounds of cotton, and it will
buy the same in Mexico. While he can
buy this silver at 60 cents an ounce in
gold, he will not gay more than SO cents
a bushel for wheat or cents a pound
for cotton in New York. But when sill
yer rises SO that It commands 671% cents
in gold, as it has done in the past few
weeks "a rise OccasiOned by the belief
that the payment Of the Chinese war in
demnlty would cause a demand for sill
VERY, the Englishman finds it to his adj
vantage to bay wheat in America in
preference to Bombay at anything under
G7h cents bilShel, or cotton at ca
cents pound New York;, because prices
are not disturbed in silver-using coun-
tries by fluctuations in the purchasing
power of gold, ard an ounce OF silver
costing 671a cents in gold will net pur-
chase any more wheat or cotton in India
or Mexico than an ounce costing SO cents
These figures are, of course, arbitrary
and differences in freight charges. in
surance and artificial manipulation O.
the markets will cause fluctuations in
the prices of commodities at all times
But the one controlling factor in the
price of all commodities that can be sup
piled freely by silver using countries is
the price of silver
In 1873 silver was worth 60 pence an
ounce in London and wheat was worth
since silver s.la at 81 cents, a fall OF
ancut $1.70 G.ondonl. A few months
s.: ner cent. end wheat sold at "a shil-
'iags quarter (about IS cents busheD
q fall of a little more than SIS per cent
While silver s5!,. at u pence mot quite
60 cents, cettan sold in New York at
So. cents psr pound and wheat sold at
Chicago at u:.der so cents
Such is the lesson to be learned from
The coincident fall in the price of silver
and staple commodities covering De-
ricd of over twenty years. The same
lesson is repeated in the recent rise in
prices. On the It'll of March silver was
quoted in New York at eO5s cents an
ounce; cotton, middling uplands, at 5as