Alma record. (Alma, Mich.) 1878-1928, 1896-02-28

general are from 40 TO 30 per cent be-
low those of 1873. It surely requires
10 argument TO show that business de-
preston must inevitably follow
steady and general fall of prices. The
9rists may talk airily about the beauty
# cheapness, but no practical business
man ever yet gathered comfort from a
fall la the price of the goods in his
hands. Nor has any producer ever
been benefited by a cheapening of his
product. A fall of prices means re-
iuced profits. Reduced profits mean
curtailing of expenses This III turn
means a discharge of employees. cut
ting of wages, and retrenchment In
| 3very possible way Discharged en-
ployes and those who have suffered A
'eduction of wages, must themselves
economize, and In some cases they be-
came an actual burden upon others.
So the effects spread from one individ-
ual to another and from one industry
to another until the whole community
feels the blight. Sooner or later con-
stantly falling prices are certain to pro-
be ultimately paid out of products, and
if the prices fall too much the debts
simply cannot be paid. When the crash
does come ii is bound TO be severe
one, because ii strikes people at time
when their ability to pay has already
been crippled by the low prices OF what
they have to sell. When the storm
finally clears away ii is found that null
titudes of struggling debtors have been
ruined, that tens of thousands of small
estates have been wrecked, while few
gigantic fortunes have been built up
at the money centers. which always
protect themselves at the expense OF
everybody else.
1t is worthy OF note in this connection
! that the period from 1880 TO 1870 was
one of almost universal progress and
prosperity. During that period prices,
upon an average. rose about 20 per cent.
But since then the whole aspect of af-
/ fairs has been changed. Instead of
continuing to rise. or even remaining
stationary, the trend has been ever
downward, the fall amounting TO more
than 40 per cent.
Now. it is clear that about the year
1873 something took place that affected
values and business in an extraor-
binary way.
1t is equally clear that it must have
been something of very general char
acter to affect so many different ma
! tons and peoples so far removed from
each other What was it? Was the
! industrial system of the world revou-
| tionized by the invention of machin-
! cry? Certainly not. Everybody who
can read ought to know that inventions
and Improvements in machinery had
been going on with great activity for
more than half a century before that
date, and that the improvements have
been no greater since
Were methods Of transportation so
changed as to produce any marked eff
feet? The answer must again be, No!
Even then we had nearly $4,000 miles
of railroad in the country, and the
ocean was bridged by lines of steamers
The most rigid scrutiny will bring to
light just one thing that occurred in
1873 which was calculated to materially
affect the general business and finances
of the world.
The standard of value was changed
by the decentralization of silver.
No amount of fine-spun theories, spe-
cial pleading, or juggling with words
will dispose of the cold historic fact
that in 1873 the United States and Ger
many both demonetized silver and
adopted the gold standard. That such
action on the part of these two nations
largely increased the demand for gold
and correspondingly enhanced its value
must be obvious to any person who does
not blindly close his eyes TO the great
economic law of supply and demand"
Gold being made the standard, and its
value rising under the increased de-
mand, other values which were meas
ured in gold fell in exact proportion.
Other nations followed the example Of
the United States and Germany, gold
rising higher and higher with the ever
increasing demand. and prices falling
lower and lower as gold went up
III 1910 the IOldllu tAIilSOu at W DIS
passed under which 100000 silver
dollars were coined each month. For
time the fall in prices was checked,
but other elements Of currency con-
traction were at work and the decline
soon began again. In 1890 the "Sher-
man law" was passed, by which some
thing over 81 900. 900 was added to the
currency each month, and again came
a slight advance of prices. But nnan-
cia troubles were abroad. The great
house of Barring had just failed the
Bank of England was in imminent dan
ger. and nearly every monetary center
of Europe was struggling for gold. AS
before stated the United States was the
greatest debtor nation in the world 1t
also had a larger stock of gold than any
other except France. England, in her
distress, unloaded great blocks Of
American securities and took away
from s75 600 600 TO 500 600 600 of orr