The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1895-10-29

H.tSPOSo Oy law 10 J0u0 " bu0 uISSouA
ZION rather than toward the aggrega-
Ton OF wealth. The price of q thing is
the sum of money that will buy a
stated quantity Of that thing. When
gne supply of q thing relative to the
demand for the thing is normal, the
price OF the thing manifests the values
OF money. To bankers commonly
cheap money is o loaning at a
low rate of interest. I am dealingnow
Win the value of money, manifest in
prices o commodities ard services. I
sHaLl a. later with the interest worth
OF money.
Normal price is the sum of money
CnaG Will buy the stated quantity when
Gne supply of the thing relative to the
Gemano Tor the thing is normal. When
Sne formal price, as thus defined, is
low Gmanifests a high value of n
III normal price is high it mani
I9sGs Gne aggregate of money will lower
Ene value Of money, and thereby en-
nance the normal price of the thing.
normal price, as defined, applied to
Cnlngs IN general at n time, is the
plane OF prices. An increasing aggre-
gaGeo OF money lowers the plane of prices.
AOnormal price of a thing is it's price
ABOVE or below the price assumed in
assuming a plane of prices. When
Judge Aldredge's chinch- bug settled on
the growing wheat, the outlook prom
lsed an abnOrmally short supply rela.
tive to the normal demand for wheat.
The consequence was an abnormal
price for wheat, or else the farmer
must be instructed to nurture chinch-
bugs IN growing wheat.
with all mints closed against silver.
so that all increase of the worlds ag-
gregate of money is too re stricted.
Georgia may have a fair price for a
fair crop of cotton, provided Texas and
other States r short. Wheat, after
a decliI q to 55 cents rose, between
crops, to "a cents a bushel. Recently
it is down again in Chicago to 60 cents.
Corn, which brought go cents a bushel
when there was little or none to sell,
has recently dropped to 81 cents, when
the farmers toll seemed about to be
repaid If improved methods of pro-
ducing and harvesting, and modern
means of transportation account for
prices, what accounts for this same
low price of wheat in London three
hundred years ago7 / observe also
that excellent hops are rotting in the
fields of New York State for want of q
price that will pay to house and cure
them. Speculation may enter hops
hereafter and advance their price,
when all possible profit on the part Of
the hop producer has disappeared.
''The banker ia vitality interested to
distinguish between the valueof money
expressed IN the plane of prices, and
the interest worth of money. When
money was valued in cotton higher
in thirty years and valued in wheat in
London higher than in three hundred
years-in September, 1894-the interest
worth of the same money was less at
the time than for years. The dollar of
the United States, which then bought
two bushels of wheat or twenty pounds
Of cotton, had an interest worth of
only 3 per cent, per annum on four
months investment in prime cOmmer
cial paper of New York; earned but 1
per cent. per annum on secured loans
returnable on call.
Interest commonly is q share of
the profit in the 8 of money. The
profit foreseen must cover the interest
to be paid for money if producers are
to borrow and invest it IN production.
Declining prices while production is in
ORC cess tend to diminish profits, and a
threatening loss deters the producer if
production is about to be begun. an
increasing aggregate of money along
with the increasing aggregate Of pro
duction allows the expectation OF q
prof. in the use of money, and there
by provides profitable rates of interest.
Hence the profitable rate of interest
current when the plane of prices is
rising. Hence, on the other hand,
profitless rates of interest with idle &C
cumulations of money when the plane
of prices is falling.
The banker has another vital inter
est in a rising plane OF prices, namely,
the safety of his money with the Dor
rover. The producer borrowing money
adds his time and energy and invests
the whole in his production. What he
owns is money. His product must
yield money or his debt cannot be paid.
His product must yield money in eX
cess of the sum invested in production
or the producer gets no profit. Unless
profit is his outcome OF his production,
production will not continue. His dis
couragement reducing production be-
comes later the misfortune also of the
transporter, of the seller, of you who
facilitate exchanges, of the consumer
after all. A part of your misfortune
in a diminishing aggregate of money
and continually falling prices is next a
diatrust of your securities, a decline in
market for prop critics which secure
YOUR loan. Your fixed income if
any, is in danger. This is a teaching
of the historic school.
"You repealed the Sherman act in
November, 1898. and cut off thereby
q bruptly. a $50, 900, 600 yearly increase
of the worlds aggregate of money. In
! September, 1894, the price of cotton
! was lower than in thirty years. The
price of wheat was lower than in three
hundred years. On July 1, 1895 ST.
200 600, 900 of corporate stocks and
bonds were in default for dividends
! md intereat due Fixed incomes were