The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1895-05-30

avnortabIe articles will be benefited OF
injured by such a result. 1t is an axiom
in trade that the prices of eXportabl6
products are fixed in the foreign market
where the surplus are sold, and are fixed
in the currency of the country according
70 its nominal value there. Ii sold IL
England, for illustration, the prices are
fixed and paid in pounds, shllIngs, ana
nence. and not in dollars and cents, and
CON Se1nen+lv. if makes no difference to
the foreign purchaser what kind OF cur
rency the producer has at home. The
character or value of the currency in
use in the producing country does net
affect the price of the article abroad 10
any extent whatever, for the purchaser
there trades in his own market and uses
his own currency in measuring values.
The establishment of a silver standard
here could not possibly increase the price
of cotton or wheat or any otller amer
can product in Liverpool, London, farls
or Berlin, whatever affect IT might nave
upon the nominal price in this country
If our monetary system were SO changed
that it would require two dollars TO pur-
chase here the same quantity of commodi-
ties that one dollar would purchase now,
if would not affect the value or purchas-
ing power of the English pound sterling,
the French franc, or German mark in the
least. The only affect would be that the
exchange would be doubled and the
pound sterling instead of being worth
S4.S6G in our currency, as it is now,
would be worth 1912, and when our
people wanted to make a remittance to
pay debt abroad they would have to
Day twice as much in our money for the
same number of pounds as they do now
while the foreigner who wanted to make
a remittance to pay Il debt here would
only pay as much in his money for the
same number of dollars as he pays now.
But the exchange would be in a constant
change of tluctuation. just as it has been
between Great Britain and India on ac-
count of the changes in the prices in silver
from day to day; and the American pro-
Queer would be compelled to pay for the
risk taken on account of the fluctuations
by receiving q less price for his cotton
wheat. beef, and other articles. The
farmers and planters do not exports their
own products but they sell them at home
to somebody else who sends them abroad
and if the exchange is steady and the
money in which he is to pay for the pro-
ducts has Il fixed value relatively to the
money in use in the country where he eX-
poets to sell them. the purchaser here can
afford to pay the highest price that would
leave him a reasonable margin of profit
in view of the conditions existing in the
market abroad. In other words he has
to incur but one risk--the possible fall
in the price of the products abroad: but
if the currency here is deprecated and
huctuating. if our money has no fixed
and certain value relatively to the money
in use abroad where he expects to sell
the products, there is an additional risk
to be incurred which will have great
influence in determining the price he can /
lOrd to pay the producer. In addition to |
the risk of fall of the price of the pro- |
ducts abroad, he must incur the risk of a |
rise in the price of silver between the time |
of his purchase and the time when he re-
ceiveS the proceeds of his sale, for if silver |
rises in the meantime he may not Get |
back as many dollars as he paid out. The |
producer must pay for both of these risks |
by receiving Il smaller price for his com
and hence his prices will never
increase i'll proportion to the actual de-
probation of the money in which they are
paid. 10 illustrate my meaning, when |
silver is worth GO cents per ounce, the
bullion contained in 4 silver dollar is |
worth 4G.4 cents but if the price of silver
should advance to 62 cents per ounce.
the value of the bullion contained in a
silver dollar would be IS cents-an in
,rease of nearly t ID per cent. Now. the
proportion to the depreciation of the
lollar in which it is to be paid; that is.
he purchaser for export will not pay for
t ut the rate of Is cents for each dol
ar when silver is worth GO cents an
ounce. because he knows that silver may
Use to 81 or 90 cents per ounce before he
an sell the product abroad and get his
money for it. aud he knows that if this
happens the gold he receives abroad can
rot be exchanged for as many silver dol
ars rs he paid the producer here. lie
will not take al this risk upon himself,
nut will compel the producer to bear it by
'cceiving Il less price for his cotton or
wheat; and this argument applies with |
,qual force to all other articles. 1t |
5 impossible to estimate accurately the |
mount of loss which this would in |
ict upon the American producers of eN-
portable products, but it would un-
loubtedly be very great, as the value of
)ur exports of domestic merchandise is |
nearly SS1O.00O,O0O per annum. and Il
small percentage upon this large sum
would very materially affect the incomes
Of our producers.
THE REAL REASON FOR FALL IN
PRICES.
1t is argued that the existing stand |
ard of value ought to be abandoned be-
cause since 1878 prices of commodities
have fallen, and will continue to fall, |
if the standard is maintained. so that it
has been, and will continue to be, more
and more difficult each succeeding year
to pay debts; that this fall in the prices
of all commodities is attributable to the
of gold, and that the APP
probation in value of gold has been caused
by the alleged demonstration of silver
in Germany in 1871 and 1873, the omis-
sion of the standard silver dollar from the
coinage of the United States in 1873. and
the suspension of the coinage of silver
by France in 1876. 1t is true that the
prices of many things have fallen since
1873. but it is true also that the prices of
many things had fallen long before that
date. The assertion that the fall in prices
since 1873 is due to the appreciation of
gold alone is based upon the assumption
that the relations between supply and de-
mand have not changed. that there has
been no diminution of the cost of pro-
duction and distribution. that the facili-
ties for effecting financial exchanges have
not been improved, and in brief. thar
the world has made no progress in the
conduct of its industrial and commercial
operations for more than 90 years. This