The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1896-08-27
The Appreciation of Gold.
TO the Editor of the Press.

To the Editor Of the Press:
The Hon. Chas. A. Towne whom l
regard as one of thegablest opponents Of
free coinage doctrine, falls into the usual
error of regarding money, itself, as the
arbiter of all business and industrial
conditions. While admitting gold to be
commodity" he tries to maintain the
position that it's fiuctuation in value is
the cause of fiuctuation in the values of
all other commodities; which is equiva-
lent to saying that the appreciation of
gold brings about an abundant harvest
and its depreciation is the cause of
short crop, when the fact is that product
ton determines the value of money, not
money production. In view of this fact
the argument that we need a double
standard because of the appreciation or
depreciation of gold, according to
WHISTLER the prices of commodities are
high or low, falls to the ground; be-
cause. if we had half d dozen money
standards, Lthey would all be affected In
precisely the same way and fol the same
reason. The king of all standards Is
production, and this is equally true
whether it is allowed its own way or is
limited and controlled by oil standard
companies. the owners of coal and silver
mines, or by government; and this is
precisely theareason why, with an under
production of silver, it remains, as cir
culating medium, on a par with gold and
why an overproduotion of silver would,
as all sound money men claim, inevita-
bly,, make silver dollar-n cheap dollar.
The free coinage men are perfectly light
In classing silver and gold as cGmmodi-
ties, but they fail to see, or admit, that
they are merely representatives Of real
values and not arbitrary values in them
selves and the manipulation of financiers
or the dictums Of monetary Congresses,
can never make them SO. As long as
the actual output of metallic money, the
actual yield of gold and silver mines,
plays only fra otional part in the bust
ness transactions and industrial enter
prises of the world, representing only
one per cent. in such tran saotions, 1t
must remain, what it virtually is, re-
dempti on money.
What is called, then, the appreciation
of gold since 1878, has had no effect on
market prices and how, and in what
way, the SO called demonetization of sill
yer could have caused a gradual decrease
in prices since that date, needs to be ex-
planned to be understood No common
sense explanation has yet been offered.
When the country has had, and still has,
all the coined silver it can use and that
silver has been, and still is, maintained
on parity with gold, has silver, practi-
oally, been demonetized, and if not
NpIactically'', what effect can it have
had on finance or trade? The burden of
proof is on the free silverites to show
that if silver had not been 'demonet-
lied" trade would have been better and
prices higher than they have been since
1873 and this leads up to the main ques-
ton; the advantage of free coinage as an
impetus to prices and trade. Is there
any reason In the supposition, or state.
ment, that the volume of metallic money
OF any kind creates demand for it, In
face of the fact that only one per cent.
of such money is used In business trap
sactlons? This Is the proportion, or per
oentage, as given by Secretary Carlisle In
his spsech at Covington, Kentucky, May
goth, 1895, and naturally suggests the in
quiry: What can we want Of free coin
age. The unlimited issue of n coin which
can SO easily be kept at its natural, and
| extremely arrow, ratio with general cir
oulation.
But to return to the question; does
volume, in itself, create demand? Mr..
Bryan tells his audiences that 1t does
II thought he believed it / should be
wanting in that respect which is thought
to DO naturally due to candidate for the
highest office in the gift of the American
people. II the farmer has all the potatoes
| in his cellar necessary to meet winters
consumption the addition of another crop
does not create a demand for potatoes.
But ii, after his fist crop is stored, he
| in creases his family by the employment
OF a larg crew OF men, the demand for
more potatoes becomes apparent Infia-
ton of currency even if there was any
practical use for it in the way of circula-
| ton, which there is not in the case of
silver money, never stimulated industry
production, or business; the demand for
imitation, as every sohool-boy knows,
must precede imitation; and just here
| Is suggested an argument quite at yari-
| ance with the accepted formula of the
bimetallists that low prices are an evil
| dence of the appreciation of gold. On
the contrary, prices were constantly ris-
ing, during the war, and thore was such
an appreciation of gold that it required,
| at one time, two dollars and eighty one
cents in currency to buy dollar in gold
willie bhe !nAhtion VI paper money, lar
from creating, in itself, a demand for
| money, was caused by the extraordinary
| necessities of the war, in clothing, feed
ing and equipping armies of men. 1t
had also another effect, that of driving
gold out of the country and forcing gov
eminent into an indebtedness of more
than two and one half billion. And this
law must always hold good, that where
there is a demand, as the bimetallists
claim, for an enormous increase in circu-
latiOn, the effsot will be to increase the