Democratic Northwest and Henry County news. [volume] (Napoleon, O. [Ohio]) 1894-1905, 1896-10-15

| anu yet utNs are worth less tuAu Oue-ll4u
what they were several years ago Now, ]
why Is 1t that with the wheat crop of the
world l20, COG, 900 bushels short and the
population increasing enormously, the rye
reached l70, coo, 600 bushels short, the prizes |
crop has the lowest point that 1t has ever
reached In the history of tho country
Purchasing Power of Money.
In order TO set more comprehensive |
view Of the whole subject let US see what |
are the fundamental laws governing |
| finance
There are two theories at present I'D |
vanced in regard 10 the purchasing power |
of money; one is what is called the cost of
production theory, under which supply and |
demand have but little influence, and the |
other may be called the qua initiative or vol |
ume of money theory. This theory is based |
upon the law of supply and demand
Cost of Production Theory.
The cost of production theory has been |
seized upon by the gold standard advo-
Gates of this country and is used as the ba- |
sis of their arguments. 1t simply means |
that 1t takes on the average definite |
| amount of labor to produce a gold dollar, |
and 1t Is the cost of this labor, the average |
cost of producing the gold dollar. that |
fixes its purchasing power, and after the |
dollar Is once In existence then its pur-
| chasing power undergOes comparatively |
little change. 1t will always buy an |
amount of property that is equal in value |
to the cost of producing the gold dollar, |
and the question of supply and demand |
has but little influence thereafter upon this |
dollar. 1t is practically Interchangeable and |
| always the same, 50 say the advocates OF |
| the gold standard. Under this theory it |
docs not matter whether money Is plenti-
full In the land or exceedingly scarce. The
purchasing power of the dollar will always |
be about the same 1t does not matter
whether there are ,0C0 men scrambling
to get the dollar because they must have
1t or whether there are only 10 men scram-
bling 20 get 1t, the dollar will remain !
practically the same 1t will buy no
more property when eco men are strug-
CLING to get 1t than 1t will when only 10
men are struggling to get it, and of course
If this theory Is correct then the demoneti-
zation of silver had no effect upon the
worlds prices of products and property. If
1t is correct, you can wipe out One-half of
the money that now exists in the world,
and 1t will not affect prices. The purchas-
ing power of the dollar being determined |
by the cost of production 1t continues to
be the same imagine l hear some man
say, "Why, that theory is contrary to the
experience of the whole commercial |
world" Well, my friend, that makes no
difference. Gold standard advocates don't
care about the experience of the CONNER
cial world. 1t Is true that under this theo-
ry the gold dollar should have become very
cheap In recent years because there is
scarcely an industry scarcely u field Of
production in which such tremendous i'm
provements have been made as in that of
gold mining. The labor saving machinerr
introduced in the last quarter Of a cent?
in this industry Is equal to if not grea
than that applied to farming 1t Is exac
the same as that applied to the mining
silver. 1t costs less on the average to mine
gold dollar now than it ever did before,
and yet gold dollar will buy twice the
product and twice the property that it
did u quarter of century ago Let me say
In regard to this theory that the great
statesmen and great 6nanciers of Europe
never entertained it for moment They
brush it aside with the wave of their hand
and look upon it as being ridiculous
Volume of Money Theory.
The other theory rests chiefly on the
law of supply and demand. Under it the
total amount Of money in the world forms
the standard and measure of prices When
there is a large amount of money IN circu-
lation among the people, prices are high;
when money is exceedingly scarce among
the people then prices are low. Under this
doctrine, if you wipe out one-half of the
worlds money prices fall oorrespondingly
on the average. If you double the volume
of the worlds money, prices will on the
average double; that Is, the general tend
rncy will be that way. The. price of any
particular article or piece of property will
again be affected by the law of supply and
demand as relates to 1t The volume Of
money forms what may be called the line
for prices. 1t Is horizontal if money is |
steady; it inclines upward if money is in
Creasing In volume; 1t inclines downward |
If money is shrinking In volume, and the |
general tendency of prices will be to move |
along this line, but the supply and demand |
in case of different articles will cause the |
price of those articles to from time to |
time either come slightly above or drop |
slightly below this line, This theory or
law, like the law Of gravttation in the |
physical world, is IN harmony with and |
explains nearly oil financial phenomena. |
When carefully studied, it will be found |
running through all the centuries and pro- |
ducing the same results everywhere. Tn |
der this law the demonetization of silver |
had to affect general prices throughout the |
world-that is, it had to lower the gener- |
al level of prices. And this was the view |
which nearly all of the great statesmen
and fnanciers of Europe took of the mat
ar the timp Rut that Ia not ali Tn
der this Inv 9 men require more money
than l man, 1000 require more than |
80 do
Increase of Population.
In other words, as population increases
there must be corresponding increase In
the volume of money or there will follow
a practical shrinkage-that Is, there will |
be less money per capita Formerly there
was added every year to the worlds stock
of money not only all of the gold, but all
of the silver, except what was used in the
arts, tine silver being about equal to the
gold. This IN a measure kept pace with |
the increase In population, so That the in
crease in population would not necessarily
affect prices, but now there Is added an
nually only the gold that Is produced, less
what Is used In the arts, In other words,
there Is added only one-half as much as
there used to be, while the population Is
increasing at more rapid rate than ever.
The necessary consequence Of this is and
will be that If this gold standard is main
tained prices must go on slowly and
steadily falling throughout all the years
to come So that the Cemonetization of
silver tended not only to reduce prices and
thus paralyze the enterprises and the in
dustries of the world, but it also creates a
condition which must give US slowly
but steadily increasing paralysis.
Checks Drafts, Etc.
1t is true that about 95 or SO per cent Of
oil our business is done by means of