The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-05-06
HERE is THE PROOF,
CURRENCY CONTRACTION AND
FALLING PRICES.
Scarcity of Money Can Only Lead
to an Increase of Poverty
and General Distress.
PHILADELPHIA American.


We have before had occasion to speak of
the contraction of our currency consequent
OF the last bond issue, and foreseeing such
contraction, we predicted at the time of the
last bond issue, that the boarding in the
treasury Of money received in payment fG1
the bonds sold to replenish the gold reserve,
would inevitably lead to a further fall in
prices to the injury of all producers.
On January 1, 1896, the amount of money
of all kinds in circulation in the United
States was estimated by the treasury de-
partment at $1,579, ,206, ,724, and on Feb
ruary l, just before the last bond issue at
81, ,589, ,72O,607. During the month of Feb
ruary payments into the treasury on ac-
count of the bonds sold for gold, and the
piling up in the treasury of the money re-
ceived in payment, led to a marked con-
traction of the money in circulation. Pay
ments into the treasury on account of the
bond issue, though on smaller scale, con-
tinued during March, leading to further
contraction of greenbacks and treasury
notes in circulation, these notes in large
part being presented for redemption in gold,
the gold thus paid out being pair back
again into the treasury by. purchasers Of
bonds. The resulting contraction of our
currency during March by this indirect pay
ment of greenbacks and treasury notes for
bonds though considerable, was in large
measure offset by an increase of bank cir
culation to an amount of $3.50, $50, the
actual contraction during the month being
but little over 100000. Thus we find the
amount of money IN circulation, as given
by the treasury statements, to have been
81, ,528, ,057 on March 1, and 81, ,52S $780,
463 on April 1, contraction in circula-
ton for April of over $61 100000 as COM
pared to February /, and of $50, ,261 as
compared to January 1, or contraction
since the first of the year Of approximately
3H per cent. But as the estimates of
money in circulation given out by the treas
ury department are manifestly too large,
the prOportionate contraction resulting
from decrease IN circulation of over $780,
100000 is considerably greater than it ap-
pears.
AS our currency has thus been contracted
by withdrawing money from circulation
and piling it up in the treasury, smaller
and smaller amounts of money has been left
to do the work Of the larger amount in cir
culat:on three months ago. The result has
been of necessity to stretch on monetary
yardsticks And as money has grown more
valuable prices have fallen. As shown by
in general were nearly five per cent lower
or Apr! than three months before.
And that such fall Of prices should
have had benumbing effect on industry ID
not surprising. The average merchant is
fortunate if he can turn over h.s stock of
goods once in three months, and conse
quietly fall IN the general level OF prices
of five per cent within three months means
to merchants in general loss from depre-
cation equal to five per cent of the value of
stock they are obliged to carry. Naturally
in the face of such depreciation, mer-
chants restrict their purchases and endeav-
or to carry the smallest possible stock
Thus the demand for manufactured goods
is curtailed, leading to lower prices for SUCH
goods, and shorter hours and lower wages,
rot alone for those employed in mills and
factories, but for all wage-earners, for as
every wage-earner Is thrown out Of work
he is irresist:bly forced, sooner or later, to