The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-10-21
HOW FAST PRICES WILL RISE
UN DER THE FREE COINAGE OF
SILVER.
With Increasing Prices Hoarded
Wealth Seeks Channels of
Trade.
(By John Davis.)

(By John Davis)
I have read your editorial on the above
subject with much interest. It is an i'm
portant point in our current discussions
which has been too much neglected, and I
am glad you have broached it.
But, in my opinion, you are not sufficient
ly hopeful. There are those as you say,
who are "frightened' lest the free coinage
of silver may bring a sudden and danger
Gus rise of prices. Yet there are others so
melancholy that they fear that the small
addition of money under free coinage will
do no good, or if there should be any relief
1t will come so slow that it will not save
the country. In writing to comfort one Of
these parties we must not forget the exist
ence of the other. t7-- -.''
Let us, therefore, examine the actual
facts as they now exist, and then predict
the future by the lessons Of the past. The
treasury report states that there are now
in existence in this country, outside of the
United States treasury about 81, 600 600, 900
That is bad exaggeration, but
will not now discuss that point. Let us
call the amount about !, 400 millions, in or
der to be somewhat nearer the, truth. /. In
the light Of multiplied discussions by Sen
ators Plumb, Logan and Others of the past
and the best judgment Of the present, per-
haps there are now in actual circulation
about $600,000000. That is a LIBERAL esti-
mate. This leaves $500, ,OOO 600 locked up In
the banks and otherwise boarded because
of general falling prices. That money IS
waiting for prices to touch bottom, and
to show hopeful signs of rising; then it will
suddenly bound into circulation.
1t is law of finance, without exception
O that during time of falling prices
money will not circulate freely. It remains
idle waiting for prices to touch bottom.
And (O during a time of rising prices mon
ey cannot be prevented from circulating.
Men insist on investing their money for the
profit there is in it during time of rising
prices. at.-t- t't-e
Now, in the present case, we have $780,
100000 of idle money outside Of the United
States treasury. A part of that money.
say 5000, ,0G0 600, must be held, more or less
permanently, as bank reserves. This leaves
$500, COO ready for active circulation
when the proper conditions occur. Under
the present gold standard policy the proper
conditions can never occur. Money must
continue to decrease as the people increase
and prices must continue to decline. Prices
can never touch bottom because there Is
no bottom except receding one.
But let us change conditions. Let US
commence adding money, however moder-
ately, by means of free coinage, and at
once prices have touched bottom The
hope of rise appears. The more hopeful
of the bank depositors will begin at once
to write checks and to invest their money.
Prices generally will begin to rise. This
will encourage others. Men will check out
their boarded stores and set their money to
circulating. Enterprises are started. Idle
men are hunted up and set to work. There
is at once period of activity, and we have
rising prices of land, labor and their prod
ucts, and of all species Of property except
bonds, mortgages. taxes and fixed in
comes. These do not increase, but from
year to year become less burdensome.
All this may take place gradually during
the first year after free coinage has been
a certain fact, though very little silver may
have been coined.
Now let us look to the lessons of the past
in order to judge as to how fast prices will
rise, and about how long it will take to in
augurate good times by means of the free
coinage of silver.
Prior to 1873 we had bimetalism supple
mented with paper. Prior to that time we
had few millionaires and no tramps hunt
ing work and begging bread as regular
profession. In that year silver was demon
etized We adopted the gold standard, and
with it came the millionaire and the tramp
in their dangerous forms. Their advent
was marked by sudden panic lasting until
1878, bringing greater distress to labor than
ever seen before in this country. Troops
were called out to suppress the hungry and
the destitute. and cities began to burn.
Wny all this? Because the demonetization
of silver and the prospect of falling prices
drove the active money into hiding to await
better times.
From 1873 to 1878 wheat fell in New York
about 46 cents per bushel. cotton about Z
cents per pound and corn about 15 cents per
bushel. These staples are mentioned as
examples. There was a general fall all
along the line. The actual amount of sill
yer was not decreased by the law Of 1873
but that law meant ultimate contraction,
and money began to go out of business in
self defense.
In 1873 there was a law passed to partially
remonetize silver, and to coin some two
to four million dollars per month. 1t went
into effect, and added money but slowly
but it meant more money, and the boarded
money was at once called into action.
Prices began to rise all along the line, and
the business of the New York clearing
house Immediately showed the change
From 1878 to 1880 wheat in New York rose
about 30 cents per bushel, cotton 2 cents per
pound, and corn 10 cents per busheL And
as the New York clearings rose from t22,-
5Os OOO 900 in 1s7S to $2 1877 600 in 1879, 7,
1s2. .OOO 600 in 1880. and 1866 600 900 in 1884,
From the prospective addition of $40 :
600 of silver a month we Immediately began
to recuperate. Prices began to rise and
business to increase Immediately but the
rise was not great enough to brighten"
anyone. In my opinion the reconciliation
of silver would afford relief at once, &but
even ultimately 1t will not damage the
country by the great and unreasonable rise
OF prices. I know men unable to buy de-
cent clothes for their families, who ,actii-
ally lose sleep lest the country will be so in.
undated with good legal tender silver dol.
lars that dollars will be worthless know
others who refrain from voting for free
silver because they are hopeless as to- silver
affording relief. 1 beg of these two>classes
to cheer up and help us to save the coun-