The copper country evening news. [volume] (Calumet, Mich.) 18??-1907, 1896-10-08
GOV. ALTGELD
@ NFINANCE
Continued from Page -

number Of years. In 1895 the crop was
very large and amounted To 2, 500, 900, 900
bushels. This year the worlds production
Is 100, 000, 900 bushels less than last year,
and tho total production Of the world IL
smaller than II has been for six years, yet
wheat is lower than ever before. In addition
to this the crop Of rye, which, together with
what, furnishes the bread of the world,
Is 10, 900, 900 bushels short, yet in spite Of
that fact the price of rye has fallen steadily
with that of wheat IL may also be re-
marked that we have the smallest cat crop
that we have had for u great many years
and yet oats are worth less than half
what they were several years ago. Now,
why is 1t that with the wheat crop of the
world 100, 900, 900 bushels short and the
| population increasing enormously, the rye
reached 10, 600 900 bushels short, the price
| crop has tho lowest point that it has ever
reached in the history of the country
Purchasing Power of Money.
In order to get more comprehensive
| view of the whole subject let us see what
are the fundamental laws governing
| finance.
There are two theories at present adj
vanced in regard to the purchasing power
| of money; one Is what IL called the cost Of
/ y,
demand have but little influence, and the
other may be called the quantitative 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 adyo-
| Gates of this country and IL used as the ba-
| sis of their arguments. Ii simply means
Il Ia Al Int .
amount of labor to produce gold dollar
| and it is the cost of this labor, the average
cost of producing the gold dollar, that
fixes it's 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, 40 say the advocates OF
| the gold standard. Under this theory IL
| does not matter whether money is plenti-
| full in the land or exceedingly scarce. The
| purchasing power OF the dollar will always
| be about the samo. Ii does not matter
| whether there are 200 men scrambling
TO get the dollar because they must have
| IL or whether there are only 10 men scram-
| bling to get 1t, the dollar Will remain
practically the same IL will buy no
| more property when 1000 men are strug-
Cling to get il than IL will when only 10
men are struggling to get it, and of course
If this theory is correct then the demoneti-
cation of silver had no effect upon the
worlds prices of products and property. II
it Is correct you can wipe out one-half of
| Al. tl..f xief. n hn
and it will not affect prices. The purchas
ing power Of the dollar being determined
by the cost of production 1t continues to
be the same i imagine l hear some man
say, "Why, that theory Is contrary to the
| experiences 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-
~ the gold dollar should have become very
cheap in recent years because there Is
scarcely an industry, scarcely Held OF
production In which such tremendous i'm
proyements have been made as in that OF
gold mining. The labor saving machinery
introduced In the last quarter OF a century
In this industry is equal to If not greater
than that applied to farming 1t is exactly
the same as that applied to the mining Of
silver. 1t costs less on the average to mine
| u gold dollar now than 10 ever did before,
and vet a gold dollar will buy twice the
product and twice the property that 1t
did quarter of "a century ago. Let me say
In regard to this theory that the great
statesmen and great fnanciors of Europe
never entertained it for moment. They
brush IL aside with tho wave of their hand
and look upon II as being ridiculous
Volume of Money Theory.
The other theory rests chiefly on the
law of supply and demand. Under 1t tho
total amount of money in the world forms
| the standard and measure of prices. When
there is "a largo 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, IL you wipe out one-half Of the
worlds money prices fall correspondingly
on the average. II you double the volume
of the worlds money, prices will on the
average doubles that Is, the general tend
J ency 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 IT, The volume OK
money forms what may be called the line
for prices. 1t Is horizontal IL money IL
steady; it inclines upward II money Is in
creasing in volume; IL inclines downward
II money is shrinking In volume, and the
general tendency of prices will he to move
along this line, but the supply and demand
| I'm 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 gravitation In the
; physical world, is In harmony with and
explains nearly all financial phenomena.
When carefully studied, IL will be found
running through all the centuries and pro-
ducing the same results everywhere. I'm
, der this law the decentralization Of silver
had to affect general prices throughout the
/. world--that is, IL had TO lower the gencr-
al level of prices. And this was the view
which nearly all Of the great statesmen
, and financiers Of Europe took OF the mat
/ ter at the time. But that IL not all. I'm
de- this law men require moro money
than | man, 1000 require more than
so do
Increase of Population.
In other words, as population increases
there must be- corresponding Increase In
the volume of money or there will follow
practical shrinkage-that Is, there will
be- less money per capita. Formerly there
WINS added every year to tho worlds stock
of money not only all of tho gold, but all
Of the silver except what was used I'm the
arts. the silver being about equal to the
gold. This In 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
nualy only the gold that is produced, less
| what Is used In the arts. In other words,
| thor, Ia as,lesi only one half ms much rs