The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1896-10-04
THIS is UNANswERABLE
Debts in This Country Increasing 2M
per Cent per Annum.

per 1GnU per Anuum.
Following is an argument from the
pen of Professor Edward A. Ross, who
Is publishing a book entitled, Honest
Dollars" The author holds the pro-
censorship of political economy ut the
Leland Stanford University, but dur
ing the summer has been lecturing
in the department Of sociology at the
University of Chicago. Professor Ross
is a graduate of the University Of Ber-
lin, and obtained n degree Of doctor
of philosophy from Johns Hopkins
University In 1892 and 1893 he was
/ secreta@y of the American Economic
Association. He says:
'1r#s vital question now arises: Have
we at the present time an honest dol
bar or have we not2 This can be as
certained by examining the actual
course of prices The conclusion is
unavoidable that in gold standard
countries the fall of prices in the last
| twenty-tlhree years has been about 40
/ per cent. e., that the purchasing
power of dollar has increased about
81 per cent liz this appreciation were
uniform il would be equivalent to an
annual increase in the value of the
dollar about 2m per cent. OF course
! the movement has not been at all reg
ular. In periods of prosperity prices
/ have gone on a level, only TO crush
down suddenly whenever a commercial
crisis arrived. To is therefore fair to
/ assume that as the gold standard has
| behaved in the pAst so will it in the
| future, that If the gold dollar has got
2M per cent more valuable every year
since the world passed to the gold
standard it will continue to appreciate
| 2Ha per cent a year in the future. |
shall return to this later.
"In the United States the course of
prices has not so clearly revealed the
viciousness of the gold standard be-
cause we have pumped silver into our
currency from 1878 TO 1898 and by thus
avoiding the European scramble for
gold have eased the pressure of our
prices.
THE census of 1890 shows that the
farmers of the country groan under a
mortgaged debt of 81, 100 900, 900. With
the present standard they must expect
that burden to increase about $2S,000,-
GOO every year.. e., for every year
the debt runs an extra SOS, 1000 900
worth of farm products will have to be
sacrificed in order to overcome the am
nual increase in the difficulty of get
ting dollars to repay with. Besides
this, an extra 100000 of produce will
be needed to meet the annual increase
in the interest burden. Think how
many patches must be put on the
clothing, how many dresses must be
made over, how many toes must go
cold, how many farmers wives GO in
sane, in order to raise that more than
$40, 1000, 900 wrung out of the producer
by the gold standard. American rail
roads are bonded for about S., 000,0 00,-
044, so that every year S135,000,000
worth of freight and passenger bust
ness earns for the bondholder, and not
for the owners. Our public debt is over
$4,000, 100000, so that about S505, 000,-
900 represents the annual increase in
the amount of burden on the tax-pay-
ers. I cannot take up the other items
of debt, but the whole of it comes to
$50, 227, 100000. The gold standard
means that this two-sevenths of our
total wealth is loaned out and earning
for its owner besides his legitimate in
terest an unseen illegitimate interest
Of 2h per cent. And yet speak not
our statue books of usuryi This means
a total of S500,000,00O affected by the
annual dishonesty of the gold stand
ard. OF course some individuals are
both debtors and creditors and the
21a per cent, appearing ON both sides
of the ledger is cancelled. IF this APP
plies to one-tenth Of the whole, this
leaves us an average of $3.50, 1000, 900
worth of property that will, year by
year, be unjustly transferred from the
hand of the producers into the Golfers
of the creditors. Such is the bill we
are paying for the luxury of the gold
, standard. Is it worth the cost? Must
we go on climbing up the golden
stair" with this enormous burden of
debt on our backs?
This, then, is the size of the silver
question, so far as ID is question of
| justice. Keep the gold standard and
men impose upon the producing part
OF the people an annual tax that il
more than one half of the revenue of
the Federal, State, city. county aud
township governments OF the United
/ States.
| 1t is not hard to show that falling
| prices injure the productive power OF
| the country and lead to economic
waste. The modern business man
makes heavy outlay for land or ma
chinery or labor or raw material,
and it is often months, or
even years, before the sale
| OF the finished product, from which
| alone these costs can be recovered.
He ventures this outlay, assuming that
the price of the product will continue
in the future as much as it has been in
the past, unless some special factor
enters in. But, under a regime of fall
ing prices, his calculation always falls,
for the proceeds of the product do not
suffice to cover costs and leave a profit.
If the downward tendency is strong,
not only does the business man fail of
his profit, but he may be gradually inn
pairing his capital by having to market
goods at less than their actual cost. If
he has had to borrow part of his CAPT
tai, as most business men do, the
! shrinking value of his establishment
wipes out his own investment of CAPT
tai, and it falls into the NAV OF the
- l.. a r =