Daily capital journal. (Salem, Or.) 1896-1899, 1896-10-24
FRIcEs AND coMM5DlrrEs,
Absurd Contention That 0ver-Produetioi
has Caused the Fall in Prices.


Absurd Contention That 0ver-Produetior
has Caused the Fall in Prices.
| wish TO call public attention il
the columns oil the JOURNAL to th'
false pretention OF gold standard news
papers and speakers, ,-ThOs. b. Reed
John Sherman, Thurston of Nebraska
and McCleary of Minnesota that
there has been no rise in the purchas
ing price OF gold, and that the cause
OF the fall of commodity values of the
world is "over-production." l have
frequently declared that this state
ment is untrue, and that could prove
its untruthfulness by facts and fig.
ures. l propose to do it now. The
facts and figures are taken mostly
from an article printed in the Lon
don Bimetallist, by Sir Guilford
Molesworth, who was a British dele
gate from India to the Brussels None
tary Conference in December, 1892.
That gentleman said: 1T will scarcely
be denied, except by superficial
thinkers, that the heavy fall in prices
which has paralyzed the trade indus
try of European countries as well as
the United States, all gold standard
countries constitutes very SER
lous evil amounting to a national
disaster" "What is the cause of this
fall?"
Gold monometallists say:"Increased
production"
Bimetalllsts say: contraction Of
the basis of international and stan.
dard money"
Let us see which theory agrees more
nearly with the facts.
Sir William Houldsworth, in expos
ing the fallacy of the 'overproduc-
tion theory, has taken periods of
nearly equal length-1S49-1872 and
lST2-Isa4. In both OF these periods
there has been large increase in pro-
duction. In the former period twhen
bimetallism eXisted) prices rose
largely, and in the latter period (gOld
monOmetallic) they fell heavily. AS
suming increased production to have
been the cause of the fall, Sir Will
liam Houldsworthr petinently asks,
HOW THE SAME CAUSE COULD
OPERATE IN ONE DIRECTION
AT ONE TIME AND ENTIRELY
IN THE OTHER DIRECTION AT
ANOTHER TIME?'
The himetallst's theory entirely
accounts for the phenomenon, Dur,
ing the former periods there was a
large expansion in the yolumn of the
metallic basis Of international
money, tending to raise prices, whilst
during the latter period there was a
great contraction of it, consequently
on the closing of the mints in Europe
and the United States to the free
coinage of silver in 1873. Prices which
before that time were rising suddenly
commenced their downward course, in
coincidepce with the date of the re-
striction of the miDtage of silver.
There is no doubt that increased
production of any commodity has a
tendency to produce fall in prices,
but monometallists lose sight of
another side Of the question. In
times of prosperity the demand for
such productions, whether arising
from increase In population, increase
in luxuries, fresh undertakings, or de-
velopment Of new countries, may, TO a
great extent, counteract, or even alto
together outweigh the lowering ten
deney of increased production.
In these busy days few people will
take the trouble to study figures. l
have, therefore, endeavored to eX-
hibit, in the accompanying graphic
diagrams, the increase or decrease per
cent in productions and price during
the two periods above mentioned.
Cotton and wheat are constantly
brought forward by monometallists as
the most prominent instances of in
crease in production. 1 have, there
fore, devoted separate diagram to
each of these commodities.
s.. t-., COTTON. .......