The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1895-06-01

In recent address before the Wau-
bansee club Of Chicago. Professor ]
Lawrence Laughlin, professor Of politi-
cal economy In the University Of
Chicago, presented strong arguments In
favor Of q single gold standard, with
silver used, If at ALL only In subsidiary
coinage. He said:
Professor Laughlin's Address.
In spirit of sincerity and truth I beg
to be allowed to state same facts relating
to prices. ] have no theories to propose.
no distractions to enforce. / have no
place here for anything but facts. and to
facts l shall mainly confine myself. First
of ALL let me clear away any obscurity as
to the meaning Of price. The price Of any
thing Is its value expressed In the money
Of account The rice is the quantity OF
gold or silver for which 1t will exchange.
Some years ago ton Of steel rails ex-
changed for the number Of grains in sixty
gold dollars: now for the number OF grains
in twenty-five gold dollars, or thereabouts.
That Is, its price was formerly $50; now 1t
Is S25. We see. then. that price is Il ratio;
ratio between goods and money. II my
left hand represents the money term Of the
ratio and my right hand the goods term of
the ratio. like the numerator and denomin-
ator of a fraction, you will see that the
value of the ratio Tor fracton) may change
because of changes In the position of either
my left or my right hand. Ii my left hand
representing money! rises or falls, while
my right hand stays immovable. the ratio
is changed In value; II my right hand (rep-
resenting goods rises or falls, while my
left hand stays immovable. the ratio Is
also changed. That Is. the ratio, or prices.
can be changed from either Of four causes
,,tt t.,.r to- 81 .l....
money. q An abundance. or fall in value
of money. 8. A scarcity or increased cost
of goods in general. 4. An abundance. or
diminished cost Of goods. 1t will be per-
fectly clear from this that u fall of prices
Is not necessarily due to a scarcity OF
money. The ton of steel. everyone knows,
fell in price from $50 to sos because of the
Introduction of improvements in the pro-
cesses OF manufacture.
Prices and Currency.
Here also let me speak of Il theory that
prices vary exactly in proportion to the
quantity Of money in circulation. l take
the liberty Of saying that. so far as know
the practical facts of business life. this
theory does not explain the facts. In my
years Of business life I learned that men
cared more for the logic Of facts than for
theory. Prices might possibly change en-
actly with the quantity Of the circulating
medium II all goods were exchanged by
the use Of money. But that Is not the case.
About 92 to 95 of all transactions are per-
formed by checks, bills and the clearing
house system, with the passage of almost
no metallic money. Transactions to the
amount of nearly s6OO00,0o0 are annually
taken care of in the United States by this
system. But will not dwell on that; 1t Is
a common practice for business men to
watch the amount Of clearings to see If
transactions and trade are increasing or
diminishing. But these vast clearings are
exactly those which are performed with
out the use OF money.
This quantity theory Is unsatisfactory
for the reason that 1t does not explain the
facts of prices in the United States. In
the chart before you you will see that
prices Of 222 commodities in the United
States (taken from the Aldrich senate re-
port, rose from 1860 to 1865 with the depre-
citation Of paper money, and have fallen
since 1865 until on the resumption Of specie
payments In 1879 they were again on the
same level as In 1860; from 1880 to 1884 they
were above that level, and at the present
time only per cent. below the level Of
1860. The circulation, however steadily
Increased. but prices did not correspond In
any way whatever. An increase in the
quantity of money did not raise prices
because tho money In modern times is not
compared directly with all goods. 1t Is.
therefore. a delusion to suppose an in
crease Of money will in fact necessarily
raise prices.
We are now at a point where we can in
telligently discuss much mooted question.
II Is said that goods have fallen since
1873, and that silver has also fallen in the
same proportion; so that silver has the
same purchasing power today as 1t had in
1873. Hence, II is argued. silver Is the more
Just medium In which to pay debts be-
cause. 1t Is asserted, gold has become
scarce, and prices Of all things. including
the gold price of silver, have fallen be-
cause gold has appreciated. Let US appeal
again to the facts My own dictum is
worth nothing. You will see that am US
ing only American prices (from the senate
report. and not the English prices Of
Sauerbeck (Which "Coin" uses), and that
the line Of prices represents the move
ment Of 232, instead of only forty-fve In
6auerbeck's table, since the more articles
in the list the less chance of error. In
1860 prices stood at the point 100; they we're
at 100 again in 1879; they were five to eight
points above from 1880 to 1884, and now are
about 92, as follows: