The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1895-05-23

benefit he would ultimately derive from
n nominal increase in the prices
is compelled to buy will be increased in
much greater proportion than the prices
of the things he has to sell, and il so,
he will be q loser instead of a gamer
by the change.
1t is contended, however, that prices of
commodities have fallen since 1878, and
that this reduction of price has made
it more difficult to pay debts now than
it was then. 1t is true that the price
of some things have fallen, but ut is
equally true that the price of some things
have increased. 1t is not true, however,
that our people owe any debts contracted
as far back as 1873, but it may be that
some of our great corporations which is
sued bonds before that date still owe
them, but they have all been refunded
at low rate of interest, so that our
free coinage friends need not be disturb
ed on their account. The fundamental
proposition of the advocates of free coin
age is that all values are measured and
all prices are fixed and regulated by the
amount of redemption money in the coun-
try, and that the amount of paper cur
rency, or credit money, as it is some
times called, such as bank notes, govern
ment notes, and other circulating media,
exert no influence on the values or
of commodities. He cannot control
the prices of the commodities produced by
him to the same extent that other pro-
ducers can control the prices of theirs,
and it may be the prices of the things he
prices of commodities. Having dog
matically asserted this principle, they pro-
coed without further argument to the
conclusion that the legal characterization
of silver in 1878 and the legal establish
ment of the gold standard of value at
that time are the causes of the alleged
decline in the prices of commodities in
this country, and then, upon the theory
that high prices for the necessaries of life
would be blessing to the people, they APP
peal to the consumers of agricultural
and manufacturing products to unite
with them i'm their effort to secure the
free and unlimited coinage of all the silver
that the owners of bullion may see prop
er to present at the mints. Even If we
should admit the truth of their first prop
osition, their conclusion that the demone-
tization of silver reduced prices is found
ed upon the assumption of fact which
cannot be established. They have wholly
failed to allege, much less to prove, that
silver actually constituted amy part OF the
redemption money in use or in existence
in this country before or at the time OF
that Legislation. If it did not, then
il is clear that its legal demoneuZatlon
did not and could not in fact reduce the
amount of such money in this country,
and therefore cannot have reduced prices.
1t is we'll known personally to every
gentleman in this audience who was old
enough to know what was transpiring IN
1873 that there was not dollar OF silver
i'm circulation at that date. The assump-
tion upon which the argument is based
is Numerically opposed to the historical
and official fact. The only metallic or
redemption money in use here at that
time was gold, which amounted to only
$135,000,000, including what the govern
ment was using, whereas we now have
about 1925, 100000 in gold, and $780,
652,S73 in full legal tender silver, be-
sides SIT 100000 in subsidiary silver coin.
If, therefore, prices have fallen since
1873, the decline has taken place in spite
of the fact that our full legal tender
metallic money has been increased until
it now amounts to more than seven
times as much as it did at that date,
and consequently the alleged decline in
prices must be attributed to some other
cause than the decentralization OF silver.
These facts prove not only that the de-
monetization of silver did not reduce
the amount of redemption money in this
fundamental proposition of the advocates
of free silver coinage is erroneous and that
prices are not fixed or regulated by the
amount of redemption money alone, for,
if so, prices should have increased since
1873
Substantially the whole argument for
free coinage so far as it is addressed
to the honest people of the country, is
based upon this flimsy foundation, upon
an erroneous principle and a false as
sumption of facts. That the amount of
money in circulation, or available for
circulation, has more or less influence
upon the prices of commodities is not
disputed by anybody, but it Us not the
amount of metallic or redemption money
alone that eXerts this influence. If all
other conditions remain the same, If the
relations between supply and demand ale
nchanged, if the cost of production, trans
portation and financial exchanges are
stable, an increase or decrease of the
currency in circulation, or available for
circulation, will to q certain extent in
crease or decrease prices, as the case
may be; but by the terms money" and
currency" in this connection mean Gerry
element that enters into and is utilized
in the complicated processes of buying
and selling IN tine markets LOT prOuucLS
and in the mercantile exchanges, whether
it be gold, silver, bank notes United
States notes, checks, bills or other forms
of credit, written or unwritten. Credit
or confidence is an element of far greater
Importance in fixing or unfolding prices
than the mere amount of actual money
in use or available for use; and in fact,
about 95 per cent of the entire business
of the entire country is transacted with
out the actual use of metallic money,
or its paper representatives; and as to-
metallic money itself, whether in gold or
silver, it lis not used to the extent of
more than 1 per cent in our business
transactions. In view of these facts,
which are as we'll established as amy
other facts relating ito our commercial
and financial operations, how absurd 1t
is to contend that prices are fixed by the
amount of that particular kind of cur
rency which does not constitute more than
one4hundredth business capacity of the
whole. In the broadcast and most com
prehensive sense the business capacity
and personal integrity of each individual
constitute 10 part of the effective currency
of the community in which he lives, be-
cause these characteristics enable him to|
become a purchaser of the commodities
il has to sell, although at the time he may
have neither money nor property. Credit
is n purchasing power, and the man who
noeSaSseS it completes in the markets