New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1896-08-12
New Ul1n Re1s'is "
JOHNSON & WlcHERsn, .PbsusHEa.,
Wednesday August 1s, 1896.
Silver and Prices.

Z
duction in silver-using countries, and a
paid in silver, does not ckange.with chan
ges in the gold price of silver, it is clea1
the gold price at which silver uslag PEG
Piles can part with their produce mus
vary just as gold rises or falls as meas
ured in their currency. Now since 1875
and the great fall in silver, as measured
by gold, set in, the ounce of silver has
lost none of its purchasing or producing
power in silver-using countries. Conse.
, quently such peoples can, and without
reducing their profit on production one
jot, sell just as much produce for the
ounce of silver to-day that costs in gold
but 60 cents, as they could for the ounce
of silver that formerly cost over $1.29.
SO to gold standard countries they can
sell for So cents in gold or its equiya-
lent just as much of their produce as
they could for $1.29 before 1873.
Our planters and farmers who have
had to contend with this competition in
khe European markets have, of course,
been obliged to cut prices; for though
their competitors have asked and re-
ceived the same price in silver, the equi-
valent of this silver price in gold has fall
len, just as the gold-price of silver has
fallen.
The purchasing power of silver money
in silver standard countries is of course
fixed by the relation between the GUAM
tity of silver in circulation and the de-
mands for money by those having goods
to exchange for it. To increase the GUAM
tity of silver in circulation, so as to out
strip the demand for it. can Of course
have but one result. 1t must cheaper
money and cause prices to rise. On the
other hand, to decrease the quantity of
silver in circulation while the demand re-
mains the same or increases, is to make
money IN such countries scarce and pri-
ces correspondingly low.
In the same way in gold standard
countries prices are dependent on the
volume of credits and the quantity of
money in circulation, which IN turn are
dependent on the stock of gold available
for redemption purposes; for scarce
money means dear money and dear mon
ely low prices, just as plentiful supply
OF money means cheap money, and cheap
money high prices.
Before 1878, and when a parity was
maintained between gold and silver, a
stability of prices existed the world over,
but when the western nations discarded
silver as money metal, closed their
minis against it and established them
selves practically on gold basis they
destroyed all connection between the
currencies of gold and silver-standard
countries, 80 that now the course of pri-
ces in silver using countries is quite in
dependent of the movement of prices in
gold-standard countries. So we find
prices falling in gold-standard countries
while they have remained stable in sill
ver-standard countries, and this has Civ
en- our silver using competitors great
advantage.
Before silver was demOnetized and the
mints of the great nations of the wes-
tern world, excepting England, were
open to the free coinage of silver, the
United States, France and the other
countries Of the Latin Union being on a
blmetallic and Germany and Austria ON
silver basis-the movement of prices
remained the same the world over. When
gold became relatively scarce, silver to a
degree took Its place as money in the
currencies of the bimetallic nations OF
the western world with the result that
the tendency of gold to rise and prices
to fall was minimized, and that to snch
degree as gold rose, silver rose likewise,
50 that the effect on prices was the same
all over the globe.
On the other hand, when, as after the
discoveries of gold in California and
Australia, the production of that metal
increased greatly, with the result that
gold became more abundant, the ten
dency of gold to fall and prices to rise
was minimized by the enlarged use OF
gold and relatively decreased use of sill
vel in the bimetallic nations of the wes-
tern world. AS gold became more a
bundant in the western world, silver was
exported to the Orient. So the volume
of currency increased not only in gold
using but in silver-using countries as the
result ofthe increased production of gold
Consequently prices rose in silver-nsing
as well as gold-using countries
SO previous to 1878, when the COM