Birmingham age-herald., 1895-05-24
ABSOLUTELY PURE

upon the nominal price In thlS country If our monetary system were so changed that it would require $2 here to purchase the same quantity of commodities that $1 will purchase now, 1t would not affect the value or purchasing power of the English pound sterling. the French franc or German mark in the least. The only effect would be that the exchange would be doubled, and the pound sterling lll- stead of being worth s4.S66 in our cur rency, as it is now, would be worth S9.732. and when our people wanted to make a remittance to pay a debt abroad they would have to pay twice as much in our money for the same number ot pounds as they pay now, while the foreigner who wanted to make a remittance to pay debt here would pay only half as much in his money for the same number of dollars as he pays now. But the eX- change would be in constant state of fluctuation, just as it has been be- tween Great Britain and India on ac- count of the changes in the prices or sil- yer from day to day; and the American producer would be compelled to pay for the risk taken on account of the fiuctu- ations by receiving less price for his cotton wheat beef and other articles. The farmers and planters do not export their own products, but they sell them at home to somebody else who sends them abroad. and if the exchange is steady
 
 the products has fixed value relatively to the money in use in the country where he expects to sell them, the purchaser here can afford to pay the highest price that would leave him reasonable mar gin of profit in view of the conditions existing in the market abroad. In other words. he has to incur but one risk-the nossible fall in the price Of the products abroad; but if the currency here is de- preciated and fiuctuating, If our money has no fixed and certain value relatively to the money in use abroad where ne expects to sell the products, there is an additional risk to be incurred which will have great influence in determining the price he can afford to pay the producer In addition to the risk of fall in the price of the products abroad, he must incur the risk of a rise in the prlce or silver between the time of his purchase and the time when he receives the pro ceeds of his sale, for If silver rlses III the meantime he may not get pacK as many dollars as he paid out.
 The producer must pay for both or these risks by receiving a smaller pflce for his commodities and hence ms prices will never increase in proportion to 'ne actual depreciation of the money m which they are paid To illustrate my meaning. when silver is worth 50 cents per ounce, the bullion contained Tn a silver dollar is worth 46.4 cents, put IT the price of silver should advance 10 oz cents per ounce, the value Of the pulllon contained in a silver dollar would De 4o cents-an increase of over per cent. Now the price of cotton or wheat VIII not rise in proportion to the depreciation of the dollar in which it is to be paid; that is, the purchaser for export Will not pay for 1t at the rate of 46.4 cents for each dollar when silver is worth eo cents an ounce because he knows that silver may rise to 61 or 62 cents per ounce before he can sell the product abroad and get ms money for it, and he knows that II thls happens the gold he receives abroad can not be exchanged for as many silver dol lars as he paid the producer here. lie will not take all this risk upon himself. but will compel the producer to bear It by receiving a less price for his wheat or cotton; and this argument applies with equal force to all other articles. It IS lm- possible to estimate accurately the amount of loss which this would inflict upon the American producers of export able products but it would undoubtedly be very great, as the value of our eX- ports of domestic merchandise is nearly SS70, ,000 900 per annum and a small per centage upon this large sum would very materially affect the incomes of our pro- ducers.
 An Inconsistency Pointed Out.
 It is argued that the existing standard of value ought to be abandoned because since 1873 prices of commodities have fallen, and will continue to fall, if the standard is maintained, so that 1t has been and will continue to be, more and more difficult each succeeding year to pay debts; that this fall in the prices of all commodities is attributable to the ap- preciation of gold. and that the apprecia- tion in the value of gold has been caused by the alleged characterization of silver in Germany in 1871 and 1873, the omission of the standard silver dollar from the coinage of the United States in 1873, and the suspension of the coinage of silver by France in 1876. It is true that the prices of many things have fallen since 1873, but it is true also that the prices of many things had fallen long before that date. The assertion that the fall in prices since 1873 is due to the appreciation of gold alone is based upon the assumption that the relations between supply and demand have not changed; that there has been no diminution of the cost of production and distribution; that the facilities for effecting financial exchanges have not been improved, and, in brief, that the world has made no progress in the con- duct of it's industrial and commercial operations for more than twenty years.
 This assumption is so inconsistent with well-known economic and historical facts that it seems scarcely worth while to give it serious consideration. Reductions in the prices of commodities are generally due to so many different causes that it is scarcely ever possible to ascertain the extent of their separate influences. pre- sume, however, thateven the most ardent advocate of free coinage would be willing to admit that the invention and use of iabor-saving machinery, the extension of our railroad systems, the improvement of our water ways and the great reduc- tions in the rates for carrying freight, the employment of steamships, the use of the telegraph on the land and under the sea, the application of electricity in the production of light, heat and power, the utilization of by-products which were formerly wasted, the introduction of more economical methods in the processes Of production, the wonderful advance made
 la -lxi Ga.ain.