The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-12-25
4 PHILOSOPHICAL ARGUMENT
The Future Of Prices Under the
Gold Standard.
LET ALL THINKING MEN READ.
(By A. ]. Warner, President American
Bimetallic League.)

(By A. ]. Warner, President American
Bimetallic League.)
It must be apparent to any one that
prices of commodities which enter into
international commerce cannot vary, in
countries having common money stand
ard greatly more than the cost of trans
porting from countries where prices are
lower to countries where prices are high
err. 1t is also a we'll established fact that
prices in debtor countries or in those
having tribute in any form to pay, will
always be lower than in creditor coun-
tries, or than in countries having no for
eisn debt. 1t hardly be disputed
either, that, while a nation out of debt
and whose people are not in debt to the
people of other countries, may. by pro-
tective laws. maintain higher level of
prices than otherwise might obtain. a
debtor nation, which must export gold IL
prices are too high to pay what it owes
with commodities cannot do this but on
the contrary must accept even a lower
range Of prices than would be necessary
If it had no foreign debt to pay.
If these principles be admitted as on
economic grounds it is believed they
must be, how is it possible for prices in
the United States to remain at any time
very long above, or even entirely up to
the prevailing international level of
prices. 1t is manifeStly not possible as
to those products which enter into inter
national trade. Nor is it possible perma-
nently to maintain in any country a rel
atively higher level of prices for the prod
ucts of all. Combinations and monopolies
may, for time, by resisting a reduction
in wages and restricting production, keep
industries
above the price level of others. but they
who earn less will buy less of others. and
consequently less of the things produced
at a higher cost will be sold.
The pressure too, on the one side by
capital to share the larger profits Of mo-
nopolies and on the other of labor to par
ticipate in the higher wages paid in Or
ganiZed industries, tends constantly to
an equalization of profits and wages; and
in the end the forces that tend to bring
nearer together profits and earnings will
prevail. Hence the law as to prices of
commodities that enter into the nterna-
tiJnal commerce becomes finally the law
of prices generally: and under this law,
as above stated, il follows that prices
generally, in countries having a common
money standard cannot vary greatly be-
You'd the cost of transportation from one
country to another of things that enter
into international commerce; and further
more. that prices generally in a debtor
country can never be as high as in cred
itor countries, or in those owing no for
eign debts.
Upon these principles. what is the pros
pect. first, of a rise of prices generally
throughout gold standard countries, and,
secondly of rise in the United States?
In the first place it should be understood
that, with gold as the sole standard. a
rise Of prices means fall in gold; a rise
of prices, therefore, in all gold standard
countries means a general fall in the
value Of gold. One side of balance can
not go up without the other going down.
To say that gold prices have risen is the
same thing as saying that gold has fall
len. II goods become dearer gold nee
essarly becomes relatively cheaper. If
it takes a less quantity of goods to buy
a pound of gold than before. it takes
more gold to buy the same quantity of
goods.
A general rise Of prices therefore, i'm
plies a depreciation of gold But does
anybody claim that gold is likely to de-
preciate in the immediate, or for that
matter In the remote future? No. all
evidence is against such view. Not
Withstanding a temporary increase in the
production of gold as the result Of new
finds in South Africa and Australia, there
is not as much gold for coinage purposes
now as there was in the fifties when the
supply for coinage reached over 100000
600 year. and when silver was also adj
mitted to free coinage; while on the other
hand population has largely increased,
and the population using gold alone as
standard money has increased from fifty
millions to more than three hundred mil
lions; SO that in view Of the case is there
any prospect that gold will depreciate or
become cheaper, and as a consequence
there cannot be a general rise Of prices
1t is amusing to see, as we often do, in
the same paper, or hear from the same
person. expressions of great satisfaction
that prices are going up, while they ex-
press adherence Of depreciation Of
money The truth is there cannot be a
general rise Of prices without deprecia-
ton Of money. All persons, therefore,
who inteligently desire a rise of prices
want a fall in money.
Mr.. Cleveland has frequently. in his ut
terances on money, rallied against de
preciated dollar" but to him the depre-
citation Of property Of all kinds-of. ev-
erything that must go TO buy the dol
lar--is of no consequence.
Nevertheless, what is now really need
ed most Of all. is healthy rise Of prices
from the low level to which they have
fallen to the hurt of all who have dol
lars TO buy debts 10 pay.
But under the single gold standard a
permanent rise in prices generally is i'm
possible: on the contrary. as gold grows
dearer for the world general prices in all
gold standard countries must continue to
decline.
The rise of gold since 1873 has not been
less than 100 per cent, as evidenced by a
fall in general prices Of now fully 30 per
cent. The fall throughout the world has
been - to Is per cent since the minis Of
India were closed and the purchase and
coinage OF silver stopped in the United
States and The fall has been greater in the
United States than in many other gold
standard countries because the general
range of prices before that was. for spe-
cial reasons higher here than in other
countries.
D,n's raview for September Of this year
says prices re IS per cent lower than
year ago Notwithstanding the marked
rise in iron and few other things.
If, then, there is not only no prospect
Of rise in prices generally in gold stand
ard countries, but instead. the certainty
Of continual decline as gold grows
daarer what is the outlook for the United
States and other debtor countries?
1t has been shown that prices in debt
or countries, in accordance with the prin-
cipie laid down by Mill, must range low
er than in creditor countries, and it fol-
lows as necessary consequence that if
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