Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-09-14
AS TO CHEAP MONEY
The Question Discussed by Well-hformed
Student on Economic Subjects.
The Relations of Gold and Silver
Both ms to Money and In .
Commercial Sense.


pure gold, the amount contained in one
dollar, whether in coin or bullion. is, in
silver dollars. 81. or 371.25 grains of pure
silver Coined in silver bullion, 700 grains;
in wheat at fifty cents per bushel. two
bushels; in corn at twenty-five cents per
bushel four bushels; in cotton at eight
cents per pound, twelve and half pounds;
in potatoes at twenty-five cents per bushel,
four bushels; in beef at 1ifteen cents per
pound, six and two-rhird pounds; in dress
goods at twenty-five cents per yard, four
yards; in silk or cloth at 81 per yard, one
yard; in labor at 81 per day, one
day. The commercial value Of 371 grains
of pure silver in United States coins Is the
same as that Of 2322 grains Of geld; for
each coined silver dollar of the United
States is now equivalent in value to each
gold dollar. These metals when coined by
the United States, are so Joined together
by statute that their parity in value is
maintained. It Is immdterll when one
goes to the market or store 10 purchase
goods whether he pays in gold or silver
dollars; their purchasing power is the
same.
The commercial value Of 81 grains Of
pure silver bullion IS, In gold coin or bull
lion. 1881 grains, or fifty-three cents in our
present currency; in other commodities at
the prices above named. us follows: In
wheat. $50 bushels; in corn, 3-25 bush
els; in cotton. 5-S pounds; in potatoes,
1928 bushels; in beef ) SIS pounds; in
dress goods. 2 3-25 yards: In silk or cloth,
53-1QO yards; in labor, 53-lOO day. That is,
these quantities of the several commodities
specified are exchangeable for eacn other
at the prices named. If now the govern
ment should agree to rec live any one Of
these, for instance. corn, at double its
commercial value, reckoned in other COM
modities. and by statute oblise all its citi-
zens to do the same. making corn the
STANDARD OF value, then, of necessity, as a
matter OF self-protection, when these citi-
zens desire to exchange wheat or beef or
cotton or silk for corn, hey must double
their charges for these articles; that is, the
statutory increase Of the price of any COM
modify carries with 1t a corresponding in
crease In the prices Of all other commodi-
ties for which 1t is exchangeaDle Under
these circumstances, the 5.S grains Of pure
goid now paid for a bushel of corn eqliya-
lent to or worth twenty-five cents will be
worth fifty cents. To express the same thing
In other words II would require two BUSH
els OF corn at the old par price, instead Of
one, 10 purchase o.S grains OF gold; that is
gold would go to a premium of 100 per cert
Inc only provision by which this could be
prevented would be that the government
should promise to redeem all corn present.
per bushel. In that event gold and ~,
corn, would become the standard of value
Advancing the Price of Silver.
Suppose, however, that instead Of Sc
Letting corn, the government should choose
Silver for the purpose indicated, and ad-
vance the price Of 81 grains from ffty-
three cents to one dollar, agreeing to nav
this price for whatever silver it used. and
requiring by law that all citizens do the
same Inc increase by statute of the
commercial value of silver would inevitably
De attended by an increase in the price of
all other commodities, gold included. the
amount of such increase being modified nv
the supply and demand of each, as the law
OF supply and demand Is always applicab bic
70 al commodities. This would, of course,
result in sending gold to a premium in re-
iaion to silver; that is, while under ex-
iStlnS laws TOO grains of silver bullion and
3D. grains of gold are both exchanged bile
l l one gold dollar under the proposed law
100 grains of silver would be exchaneeahle
at the mint for $1s9, which would then
be the price of a gold dollar: or in other
words. gold would go to a premium of
about - per cent. other conditions remain
ing in statu quo.
pressed as follows: Whenever from any
cause gold goes to a premium in relation
10 that commodity which by statute is
mace the standard of value the price Of
crease proportionately. The price of com
modlt1es Is In the final analysis found to
De determined by the price gold. 1t, there
lore, uniformly happens that when the
or certificates, or greenbacks. is depre
ciated in value in comparison with gold
prices begin TO rise, the per cent of such
increase Incl, experimenting the premium on
gold, provided this depreciation is long con-
tinued. BY this 1t is not meant that On
Black Friday the prices OF products ad-
vanced step by step with the price of gold
but that had the highest price of gold on
tnat disastrous day been established as the
permanent price. the increase In the per
manent prices Of goods would have approx-
mated that of gold.
Relations of Silver and Gold.
whether. however, under existing circum-
stances. the premium on gold would, in the
event OF the passage Of free silver law
approach In amount the difference in the
present commercial values of the two met
ais Will depend in a large measure upon
the influence OF another law, viz, that Of
supply and demand. a law Of universal an
piication, which must be taken into con-
siceration In any full and fair discuss sion
be remarked tia: IL a matter of sa,a Tar
amount importance no political or partisan
bias, no determination to carry a point >"
should be allowed to stand in the way Of
substantially proved by an opponent, or
OF the recognition Of the validity of anv
argument for which thoroughly good
grounds are alleged.
The essentially important thing that
upon which measureless Interests depend.
Is the discovery Of truth, the ascertain,
ment, If possible, of those financial Dr;n-
ciples upon which the very best monetary
system can be built. Tor any party to
shut its eyes to facts, or 20 deny the an
plication of universally recognized laws. ia
to multiply dangers and to make con-
fusion worse COMPOUNDED. 1t cannot rea-
sonably be denied that the advocates of
free silver" are right, when contendipg
that the decrease in the price Of silver since
1873. is In part at least, to be attributed to a
decrease in the demand for the white
metal. Prior to that date this demand was
divided between the government. that
wished the bullion for transformation into
coin. and the manufacturers who desired
1t for transformation into silverware It
was required for use as money, and for
use In the arts. By the demonetiza,i of
silver. all demand for coinage pu1poses
vas suspended and destroyed, and the en-
tire supply thrown upon the marke; fer
use In the arts. To be sure, the govern
ment later began to purchase silver at
market rates. but this was only a tenn
porary arrangement, an experiment and
only served to modify In a measure the
legitimate effect of the act Of 1873. That
effect was necessarily a decrease in the
value Of silver bullion Under the iaevita bic
operation OF the law Of supply and 6e-
mand. If analogous action had been taken
by the government in reference 10 any
mn $Hr