The Monitor-register., 1896-06-26
Has Gold an Inherent Propertv
Value2


has Gold an Inherent Property
Value2
EDITOR OF MONITOR REGISTER. There
seems to be a deep. seated conviction In
Inc minds Of many persons that gold
possesses some inherent propertv which
exempts it from the laws of supplv and
oemand-whioh governs the value of All
commodities-and hence that gold is an
~uhchangeable and sta BILE measure of
value. :"
Ihis belief, that an increased or de-.
creased supply, or an increased or
decreased demand for gold, can have NO
erect on its stability as a measure of
prices, Is fostered by a time-serving gold
press, ever though by doing so it ignores
the teachings of the great scholars, who
upheld the gold standard.
Lord Overstone, the most aggressive
and o~utspoken of gold monometallists.
declared: "a reduction of Calculations
must tend to lower prices"
John Stuart Mill, giving expression to
the general opinion of economists. said:
"Ihat an increase of the quantity of
money raised prices, and a diminution
lowers them"
Jevous, one of the most careful and
industrious of students, wrote: "Prices
temporarily may rise or fall Independently
OF the quantity Of gold in the country:
ultimately they must be governed BY this
quantity. Credit gives a certain latitude
without rendering prices ultimately in
dependent of gold"
But despite the unanimous opinion of
economists, that the quantity of money
regulates prices, the gold press persists
in misleading the people as to the true
relation between prices and the volume
OF money. Gold. no less than silver and
all other commodities, is subject to the
laws of demand and supply. Gold and
silver are naturally more stable than
other commodities, because their cycle of
production and consumption covers a
long term of years, and the yearly pro-
ductiOn never amounts to more thar a
small percentage of the total supply.
AS the average yearly production only
equals about 2 per cent. of the total
stock in existence, and as the greater
part of this is consumed in the arts, it
will be readily seen that increased or de-
creased production can only have a very
gradual and almost imperceptible effect
on the value of the precious metals. AS
they are less subject to the fluctuations
of supply, gold and silver were chosen
| by common consent as the most suitable
measure of value and this custom was
sanctioned by law.
If undisturbed by arbitrary measures
affecting the demand, the precious metals
constitute, of all commodities, the most
reliable and stable measure of value; but
| when the demonstration of silver threw
upon gold the chief burden of the cur
r~encies, a general scramble for that metal
among the gold-using countries ensued,
and its value doubled, as is evidenced by
the fall of prices. With a lack of caDdor
the gold monometallists close their eyes
to the appreciation of gold, which is a
sel%f.evident proposition, and attribute
the fall of prices to sundry other causes.
If wheat was the measure of value and
the harvest of other cereals should prove
such a failure as to cause the demand for
wheat to be so increased that it doubled
in value, it is clear the price of cotton
wool, iron, lead and manufactured arti-
Giles would fall so per cent, and no sane
man would attribute this fall to over
production, cheapening of the cost of
production, or to any other cause than
increased value of wheat. the measure of
value. Yet, when by doubling the de-
/ " SOIOyA u N1luO q iOOOhO OuOlO
and prices measured in gold have fallen
so per cent, the gold monometallists
have the e%ffrontery to either ignore the
fall In prices or attribute it to overpro-
duction or cheapening of the cost of
production.
In the seventeenth century the prinoi-
pal currency of Virginia was tobacco, and
those hardy settlers had a better idea of
a stable measure of value than some of
the distinguished monometallists of to-
day, as is shown by their act in increas-
ing the legal tender of tobacco when the
crop proved a partial failure. Not for
one moment did they attribute the fall in
other products to any other cause than
increased value of tobacco, and who can
deny the business of the act that declared
two pounds of tobacco full tender in
payment for three, contracted a Year
before, when two pounds has as much
purchasing power as three pounds the
year before?
Fluctuations in the value of currency
taught our f~orefathers that the apprecia-
ton of money brought about by con-
traction caused a fall, and the deprecia-
tion of money brought about by over-issue
caused a rise in prices, and when the
general level of prices fell or rose they
attributed it rightly to an increased or
decreased value of money. The gold
monometallists might learn a profitable
lesson from our wideawake and honest
| ancestors.
Increase the supply or quantity OF
wheat and its price will fall; decrease the
| quantity and it will rise. So with gold,
| if the quantity is gradually increased, its
| value will fall; if the demand ID increased
without a corresponding increase In the
| supply, the value of gold will rise, and
necessarily all products measured in gold
must fall correspondingly-and this is
just what has happened.
Silver has been destroyed as a money
metal and q double burden has beer
thrown on gold. 1t is idle to say that
the demonstration of silver could have
had no effect on prices because the silver
ia still in circulation. Silver is, indeed,
still in circulation, but it is mere token
money. and, like our legal tender and
bank notes, is redeemable Gin fact, If not
by Iaw) in gold. Such money cannot
take the place of full legal tender money
standing on its own basis as money.
Gold alone is our measure of value, and
it is impossible to expand our credit
money SO long as we base it on our
narrow supply of gold.
ANY increase in our paper currency
which might increase the quantity oil
money and thus naturally cause a slight
rise in prices must at once result In q
falling off in foreign purchases OF our
commodities, interest on debt Will
accumulate and gold will be exported to
Europe. Any expansion of paper will
be counterbalanced by a loss of gold.
So long as we persist in holding last to
the single approaching gold standard we
cannot hope to succeed in stopping the
fall in prices by issues of paper, for the
value of our money will automatically
adjust itself to the value of the British
and German currency by the export OF
gold. Not until we restore silver to its
place as nom and broaden the base
upon which to rest our paper money can
we hope to successfully expand our credit
system. ,,l
Supported alone by the narrow gold
basis, it is already top-heavy, and is kept
from collapse by purchasing gold with
the national credit.
It has been said that gold may be Com
verified into a mortgage on the whole
property of any nation in the world,
while its intrinsic value is equal to the
mortgage which it represents. 1t is too
true that gold and greed have been the
-.:uI orooka 70 dirrupt WhOla Nations