The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-05-21

would exchange ii for silver bullion in
the market at the ratio of about thirty
of gold. have the thirty-two pounds of
silver coined into dollars at the expense
OF the people. and with this cheap money
pay the demands of their depositors and
other creditors. The masses of the people
cannot do this, for they have gold nor
have they any silver bullion to be coined
at the expense of the government.
But il is said that although the masses
of the people. have no bullion, many of
them in debt and that the free COIN
age of silver would increase prices and
give them more money. thus enabling them
TO discharge their obligations more easily.
The merit of this argument will be judged
by each individual according TO the view
which he may take of the nature of his
obligations 10 the people who have loaned
Who has Borrowed orr R' thousand dollars '' in
gold, or it's equivalent. and has promised
doIlars' worth of another mans property
and promised TO pay for ii in the standard
money recognized by the law at the date
of his contract believes that il would be
just and honest to discharge his obligation
in a new standard worth only half as much
s he %ouS M
dorse this argument and ii would be USE
less to discuss the question with him. But
the immediate effect OF the adoption of a
free coinage policy at the ratio of Is to
extent Of about ss25,OCo,0OO, by the with
drawal of that amount of gold from cir
culation and from use as the basis of notes
and other forms Of credit. prices would
not even nominally advance. On the con-
trary. for the time being at least, this
contraction would greatly reduce prices be-
cause il would alarm the country. destroy
credit and undoubtedly produce the most
serious financial disturbance this country
has ever witnessed.
EFFECT OF FREE COINAGE.
Every depositor in the savings and other
banks fearing that he would ultimately be
ciIx hmm
diately demand the return of his money,
and this would compel the banks to call
at once for the payment of all the notes
and other securities they had discounted
for their customers, and the contraction
of the currency would cause an increased
demand for currency at the very time when
it could not be obtained, and thus the diff
Guilty of the situation would be increased
by both causes. The banks would be COM
PEELED TO either suspend payments them
selves or drive their customers, who are
generally business men-the men who give
employment TO labor in every community
Into bankruptcy at once Who would
body except the holders of gold and the
owners of silver mines. the holders of
silver bullion and the brokers and specu-
lators in the stocks Of silver-mining CON-
panies.
The people who owe debts and
able 10 pay them would be the. ones TO
Sur1er most, Wnlle the people WHO owe no
debts and have money on hand would be
the ones to profit most. Every man in
debt would be called upon to pay it
promptly when due; there would be no
more extensions of old debts, or any new
credits given. because no man could fore
tell what the money would be worth at
laborer would be thrown out OF employment
by the failure or suspension of his en-
ployer, the farmer would receive less real
money for his products, property would be
sold at low rates under judicial proceed
ngs all over the country, credit would be
destroyed. and all industrial and CONNER
cial enterprises would stand still. awaiting
the result Of the new experiment with the
monetary system.
OF course a great country Ike this, rich
mately recover in some measure
from even such a. disaster, but
how long a time would be required TO
do so no man predict. All the minis
of the United States. If devoted entirely 10
the coinage of silver dollars. could produce
only about $40CC0,OO0 per annun. and, there
fore with free coinage 1t would require
more than fifteen years to put silver dollars
i'm place of the gold we now have and give
back 10 the country the same amount OF
metallic money now existing. But, in the
meantime, we would have deprecated
standard of value with .nominaliy higher
price-after the first collapse was over
on account of the reduced purchasing pow
er of the dollar, and at the same time we
would have for long time FEWER doilars
TO pay with. Common prudence would die
tate that, when any considerable change
is to be made in our monetary system.
some provision should be made in advance
of the actual change for gradual transi-
ton from the old TO the new order OF
things; a transition period should De pro-
vided for so as to avoid. as far as posi-
BILE sudden disturbance of business and
contraction of the currency; but the adj
vocates of free coinage have no SUCH plf-
nose They propose make sudden and
revolutionary change in the standard upon
which all existing contracts OF the people
are based and by which all values ar, are
care of themselves.
EFFECT ON DOMESTIC TRADE.
But, suppose the change is made, and
that the business affairs Of the country
have been finally adjusted TO the new
standard, what will be the effect on our
domestic trade? The prices of all things
will be nomnally increased-that is to say,
it will require greater number OF dollars
to purchase a given amount of any COM
modify than il required before. There APP
pears to be a singular delusion in the minds
of some upon tbs subject. Many good peo-
pie appear to think that in some mys-
FERROUS manner, which no one has yet at
tempted TO explain, the government, by leg
islation or otherwise can increase the prices
of the things they have to buy. If there
is any financial necromancy by which this
one-sided increase of prices can be accom-
plished our free-coinage friends ought to
explain il TO the people The plain, every
day, common-sense view of this subject Is
the only correct one. If prices are in
creased solely on account OF an increase in
the volume of circulation or on account of
depreciation of the currency. without any
change in the relation between the supply
and demand OF the commodities TO be ex-
changed, the increase in prices will neces-
sarily affect all things alike. III, therefore,
the farmer or planter receives greater
number of dollars for his crop of cotton
or wheat. he. will be compelled TO pay a
correspondingly greater number OF dollars
for his agricultural implements, for his gro
ceries for his clothing, and, in short,
for everything he purchases. Consequently,
his profit, if he has any, Will bear about
the Same relation to his expenditures that
il bears now-that is to say, If he now
makes profit of 10 per cent. he will make
a profit of no more than 10 per cent. then.
Now it is out of the clear profits of his
business that he must pay his debts, and
it therefore remains to be seen how much
benefit he would ultimately derive from
nominal increase in the prices of commodi-
ties He cannot control the prices of the
extent that other producers can control
the prices of theirs. and ii may be that
the prices of the things he is compelled
to buy will be increased in much greater
proportion than the prices of the things
he has to sell. and if So he will be loser
instead of a gamer by the change.
1t is contended. however. that prices of
commodities have fallen since 1873, and that
this reduction OF prices has made ii more
difficult to pay debts now than Ii was then.
1t is true that the prices of some things
have fallen. but IL is equally true that the
prices of some things have increased. Ii is
not true. however. that Our people owe any
debts contracted as far back as 1913. but it
may be that some of our great corporations
before hat date