The representative., 1895-12-25
A PHILOSOPHICAL ARGUMENT
1Conttnuea from yrs, p.~.,


Continued from First Page.)
gold prices must continue to decline
throughout the world that they must GER
tainly continue to decline in debtor coun-
tries as long as the gold standard is
maintained
There are reasons, also, why prices
should fall first in debtor countries, and
sometimes fall rapidly and very low.
Debtor countries in order to keep gold
enough to maintain the gold standard
unbroken must compete with one an
TO save their gold, and the country that
will sell lowest will sell most, and will
be most likely to keep it's gold.
The United States, besides offsetting
imports with exports, must pay to other
countries annual dues of not less than
$40o, 100000. Australia has $1O0,0O0.00O in
gold to pay, Egypt $30,OO0.800. India and
South American countries large sums.
None of these countries could pay in
gold single year. They must all pay in
commodities, and to induce their credit
ors to take commodities rather than de-
mand gold they compete with one another
and with the United States. in offering
products down. All these countries ex-
port agricultural products and hence the
competition is greatest in these products.
There is no escape for the American far
mer therefore, but to compete with the
farmers of all these countries.
Letters recently received by the writer
from Australia. from Queensland, and
from other debtor countries say that to
pay the interest due England they must
compete with the United States in the
expectation of cotton, wheat, hides, frozen
meat, dairy and other products. The
United States, in turn, must compete with
all such countries in the payment Of their
obligations to Europe. And as gold ap-
Co.
in quantity of these products Is required
to pay the same debt.
When, therefore, gold has doubled again
in value, as it surely will if things are
allowed to go on as they have gone since
1873 and are still going, all debts will have
been again doubled.
Even if debts bore no interest, the appre-
citation Of per cent per annum in gold
would, in twenty-five years, double all
debts.
How long will it take, with debts for
the world aggregating possibly $1O0, ,000,-
900 900, by the appreciation alone of gold
to transfer most of the worlds wealth
from those who have produced it to the
holders of the debts?
There never was and never can be de-
vised an agency at once so subtle, so
stealthy in its operations to work wrong,
and so far reaching in it's consequences
as a money that is constantly increasing
in value!
There is another agency which comes
in to force down prices in gold-using
countries faster and lower than compe-
tition among themselves would necessi-
tate, and that is competition with silver
using countries. The limits of this Mon
ograph will not permit detailed expla-
nation of the operation Of this force. Suf-
fee to say here that the destructive char
acter of this competition grows out of
4 fhaf fca hot q nd oenC q n o.
changed in silver-using countries, as the
gold price of silver falls 1t takes less
gold to buy the same amount of silver
and consequently less gold to pay the
same wages or to buy the same quantity
of goods in these countries. That is,
prices of commodities, measured by gold
fall in silver-using countries as gold rises.
Consequently more goods are bought in
such countries. In other words, their ex-
ports are increased. On the other hand,
as the gold price Of silver falls, and con-
sequently more silver to buy the same
goods in gold standard countries. This
checks purchases by silver-using cOun-
tries and leads them to produce more for
themselves, which they are now doing.
1t also leads Western manufacturers to
transfer capital and machinery to silver
using countries, and with cheap labor
there to compete with gold standard
countries.
That the ultimate effect of this compe-
tition must be to force down prices and
wages in this country, and in all gold
standard countries, is too apparent to be
questioned. Mr.. George Jameson is
therefore undoubtedly right when he says
in his prize essay: ''The divergence of
value between gold and silver will in
ably lead to a gradual transfer of the
gold-using to silver-using countries"
The conclusion then cannot be resisted
that dearer gold and lowe rprices for all
gOld-standard countries must attend the
continuance Of the single gold standard,
and that for all debtor countries the con-
ditions will become more and more ag-
gravated as debts increase and prices
fall.
Of course, as long as country bor
rows or goes on increasing its debt by
creating new obligations instead of pay
ing what it owes annually, 1t can pur-
chase for the time being exemption from
the consequences here stated; but that
such a policy must terminate sooner or
later, and that while it lasts that it can
only make things worse by piling up debt,
needs no argument or proof. Wall street,
when bonds are sold to Europe, may, like
Micawber, thank God SO much is paid;
but debts are not discharged by the is
sue of more evidences of debt This,
however. is what the United States has
DoSn QO1nS 1OT lWeIly-llNc yCdIS, uHlil
we find ourselves at last in condition
approaching that of Egypt, Italy and
South America. To follow this road long
err is only to get deeper in the slough of
debt The only statesmanlike way is to
face about create no more debts, adopt
a policy that will maintain prices, sus-
tain industries and make us again inde-
pendent To bring this about either the
supply of gold must be largely increased
or something else must take it's place on
the money side of the scale. There is no
reason to expect a permanent increase in
the supply of gold. The only relief then is
in the restoration of the system whereby
gold and silver together as for so many
ages in the past are made to constitute
the measuring factors on the money side
of the balance against commodities. In
no other way can the continual fall of
prices be prevented.
VN< ~ r