The Louisiana populist., 1896-12-04
AS TO CIRCULATION.
ONE OF THE PALACES OF
BANKERS EXPOSED.
Why Business Men Lose Confidence,
Hoard Their Money, and How 1t Pro-
duces Business Stagnation. Panic and
Industrial Depression.

lion Ouc VI us mdlu ltdluIcS 40 AiC-
quently lost sight Of There is great
deal said about the per capita circula-
tion and the whole amount of money
supposed to be In existence is cited
and the claim set up that 1t Is suf-
ficient According to the reports Of the
Secretary of the Treasury there is said
to be In existence about s23 per capita
There is no claim set up, however,
that this amount of money is in actual
circulation. On the other hand, 1t Is
estimated by good authorities that the
amount in active circulation will not
exceed IS per capita, and some esti.
mates. among which is no less author
ity than Senator Vest, Of Missouri.
place it as low as 81 or IS.
All authorities on finance agree that
1t is the volume Of money in actual
circulation which fixes the price Of
commodities. This being true, 1t fol-
lows that that money which circulates
best is the best money. Herein lies
one Of the great objections to money
having a commodity or commercial
value. Originally gold and silver was
merely an article of exchange, making
barter more convenient. 1t has its
| origin In the days of barbarism, and
can truthfully be said to be relic OF
that age. The fact that it is the recog-
| nized currency Of all ages is no better
reason for its use as actual money,
than that foolish superstition among
the negroes which makes q grave
yard rabbits foot" more valuable than
any other rabbits foot.
But conceding, as We must, the rec
ognized commercial value of gold and
silver. we have only to consider its fit-
ness as money. 1t is this commodity
value, in our opinion. which consti-
tutes 1t as the dangerous factor In our
currency system.
Like all other commodities, the value
of gold and silver depends upon the
universal law Of supply and demand.
II the supply falls short, either through
the ever-varying laws and chances
which govern its production, or the de-
mand increases by its extended uses.
the natural consequence is that its
value rises as compared with all other
commodities, and holders Of the pre-
cious metals are 10th to part with
them in exchange for commodities, the
prices Of which are constantly falling.
Here, then, is where lack OF confidence
begins. What man having $4,000 in
gold or silver would be willing to ex-
change 1t for real estate or personal
property with the certain knowledge
staring him in the face that the prop
erty FOR which he exchanged 1t would.
within q year or two, be worth Is per
cent. less than 1t was when he acquired
It?
The result Is he loses confidence and
boards his money. 1t Is taken out OF
circulation and the prices of COM
modities continue to fall in the exact
proportion to the money taken from
iactive circulation. This aggravates the
situation, lack of confidence spreads,
and financial collapse and industrial
depression results.
This state of affairs continues until
the people are reduced to the extremity
of resorting to barter. which is the bed
rock Of falling prices. and reaction sets
in until some unforeseen circumstance
or indiscriminate and wild speculation
again swings the pendulum of public
confidence in the opposite direction.
These are the laws which govern pub
lie confidence, create panics, govern
prices, and cause financial depression,
and this condition will remain as long
as the present system Of commodity
money obtains.
But even il the $23 per capita was in
actual circulation, 1t would not be suf-
fcient in this country of unexampled
enterprise and undeveloped resources.
France has a circulation of $3S per
capita, and her resources are devel-
oped and her population kept Dense 1t
is quite true that much of our business
is done through banks and with credit
checks of different kinds, but this does
not answer all the demands of our great
commercial system.
There are millions Of people who do
not and cannot transact their business
through the banks, and who must
either depend upon money as medium
through which to make their ex-
change or resort to the old barbarie
system of barter. Besides. they are
compelled to have money with which
to pay their debts and taxes, and when
that money is scarce and dear 1t works
hardship on them.
II, then, to resort to both gold and
silver as the foundation of our none.
tary system and our whole business
fabric, subjects US to the ever-recur.
ring danger Of the lack of confidence
the boarding Of money, panic and bust.
ness stagnation. 1t seems no less than 9
crime to lop on half of this foundation
and depend upon the one commodity oil
gold alone.