The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-03-18
THE FALL IN PRICES.
1t Is Due to the emOnetiZatiOn of
Silver, and the Increased
Purchasing Power of
Gold.

This is positive proof that cheapening of
the real cost of production does not always
lead to lower prices. When prices do not
fall as a result Of the Introduction of labor
saving machinery the wage-earner, whose
wages are of necessity dependent upon the
price received by the capitalist for the
joint product of labor and capital,
benefits by receiving higher wages
improved methods Of production, the
wage-earner may be benefited by be-
ing able to buy cheaper; but he will
not be benefited to the same degree, for
he buys at retail and his wages are fixed
by wholesale prices, and retail prices do
not fall as rapidly as wholesale prices.
Since 1873 prices have fallen as shown by
the senate report before referred to- down
to 1891 and by tables prepared especially
for the American since 1916 per cent. The
questions. .whathasb cen the cause of this
fall? Gold monometallsts have attributed
it to the Introduction of labor-saving ma
chinery and a general saving of labor and
time in production
Progress has undoubtedly been made
in cheapening the actual cost Of pro-
duction since 1878 with a tendency to lower
prices, but there can be no doubt that the
fall in prices is due primarily and chiefly
to the rise in the value in money. The
greatest advance in improved methods of
production has been made in manufacture
ing establishments. and If the cause of
the fall in prices was the cheapening of
production, the products of such factories
would naturally show the greatest decline
in prices. But such is not the case. On
the other hand. it is agricultural products
that have fallen furthest. AS shown by
tables based on 100 staple commodities,
which we have prepared, the general level
of prices has fallen AL pen cent since
d.
stuffs have fallen 40.41 per cent, while
manufactures in iron and steel have fallen
but 2S.51 per cent. and manufactures of
textiles but 9.44 per cent while raw cotton
has fallen II per cent, and wool over 40
per cent.
During these five years there has been
little if any cheapening in the cost of
production of agricultural staples, yet they
have fallen in price much further than.
manufactured articles. in the manufacture
of which the greatest advances have been
made towards cheapening production by
the constant Improvement of machinery.
This fact disproves the assertion that the
fall in prices is due to cheapeninS of the
actual cost of production.
For the fac. that agricultural products
have fallen much more rapidly than man.
ufactured articles, there is only one eXpla
nation and that is. our agricultural prod
ucts were the first to come into direct COM
petition with the products of silver using
countries. The appreciation OF Soid. OF
the money which silver using peoples
receive in payment for what they sell to
gold using peoples. and which they can
exchange for double the amount of sill
yer that they could twenty years ago.
has greatly encouraged production and
stimulated exports from silver to gold
using countries. To increase the area de-
voted to raising wheat and cotton was
the work of season; gathering experience
and knowledge and building the factories
to make manufactured goods the work of
decade or more. The result is that
while our farmers and planters have suf-
fered from the competition of silver using
countries for years, our manufacturers are
only now beginning to feel Asiatic compe-
tition This is the explanation of the fall
in prices that has been more marked in
agricultural than manufacturing articles.