Delaware gazette and state journal., 1896-01-30
WHEAT AND AN UNSOUND CURRENCY.


WHEAT AND AN UNS0UND CURRENCY.
Financial Chronicle, Jsu. e5ih.
There is an inquiry relating to the
existing industrial situation, well
worn by discussion il may he, which
nevertheless is so often raised that il
will be OF use to again devote little
time 10 its consideration. A letter re.
ferring TO the matter in mind we have
kept near us for about two months.
intending to notice the suggestion as
soon as we could make it convenient.
What our correspondent says we give
below, The idea the writer intends to
enforce ia that IL ia not the currency
defects, but the price Of wheat that is
the main cause Of the present depres-
sion. In other words, we may relieve
trade from tho disturbing effects Of an
unsound currency without favorably
affecting the price of wheat; that con.
sequentiy we must wait until the
long continued agricultural depression
has spent itself, and its pendulum
swings the other way" before we can
expect the business situation to greatly
improve.
ScorT & Co., BANKERS & BROKERS,
WlLMlNGToN, Nov. ~. lSOj
Editors Commercial and Financial Chron-
Dear Sirs We are apprecintivc readers of
your publication, IN your admirable ar
ticlc, "Whv Not Settle the Currency CUES
ton Now?' in last weeks issue, you hold
that the main cause of the present uniavor-
able conditions is our currency situation.
You state: We only refer TO them now TO
recall how universal the loss is that is being
caused by our unfortunate currency system,
at time too when industrial conditions are
so favorable that we almost have within our
reach a term OF prosperity greater than ever
before realiZed.p We do not wish to bClittle
the loss resulting from our unsatisfactory
currency system, and we should like to be
able TO believe fully with you in the above
quotation; but with about AZ per cent of our
entire population (under the census OF 1890
dependent on agriculture, is it not true that
the greater portion of this A per cent is
absolutely nnprosperOus with wheat and
corr at prevailing prices? That this inn
portant part OF our population has no sur
plus to spend, is not that the main cause Of
dlscouragiBg business conditiuns2 Do you
believe that sensible currency arrangements
would affect the prices of these staples
sufficiently to materially assist this class Of
our people? We would appreciate an article
calculating this matter. So many Of us fear
the business situation cannot greatly i'm
prove until the long-continued agricultural
depression has spent itself and its pendulum
swings the other way. Yours, truly,
SCorr a. TO.
There probably never was time Of
depression when one could speak of a
single influence and say that it, and
it alone, was interfering with indus
trial development There may. in
truth, be but single cause at first,
and yet the dislocation may permeate
finally our entire industrial system,
acting and reacting with each new dis
turbance it works, aggravating every
unfavorable circumstance, until the
mind is honestly confused in the effort
to fix upon tho leading and original
source OF the harm wrought. Look
back for illustration over tho road we
have been travelling the last three or
more years Largo production Of cot
ton in America with decided fall in
price is one important feature; full
production OF wheat in Europe, with
an enlarged visible supply, is another
still others are low prices for all agri-
cultural products very small margin of
profits in every industry, tariff agita-
ton, exporls Of gold, Withdrawals Of
foreign capital, and numerous bank
and other failures. We only stop
enumerating them because we have
specified enough to enforce what We
have asserted and satisfy every one of
the truth Of the statement made. We
never have said and never intended 10
say that an unsound currency was the
only influence depressing wheat at this
moment, or that the low price Of wheat
did not in turn contribute TO the trade
depression.
While though we admit that neither
of the foregoing assertions il made
would be correct, it is equally we'll
established that there are primary
causes and secondary causes of con
tinued and general trade depression,
and that the low price Of products can
never in such case he a primary
cause. Prices are dependent upon sup.
| ply and demand. To be sure there arc
at times other contributing influences.
AS for instance when there is ten
dency towards deficiency in the SUP
ply, or when there is tendency
towards an eXceaR. competition among
sellers or competition among buyers
as the case may be, may depress or
raise prices abnormally; but this is
more or less temporary movement or
force which breaks down after brief
period through an enlarged product
and very likely an over supply II there
has been lack which has led to alb
normally high prices, or through de.
creased product il there has been an
excess causing abnormally low prices.
Hence we are brought back 10 the posi-
ton that supply and demand control
price, and that consequently decline
In the value of wheat cannot in itself
be the cause Of trade Impression there
must be cause or causes operating
which have increased the supply Of
that commodity materially y or decreased
tho demand, or both, before price will
fall. The wheat depression is thus no
hap hazard affair, no "swing of the
pendulum, = to be reversed when the
movement "has spent itself. y There
arc real forces at work lying back of
the depression in price, other per-
manent or removable or both so far as
they are permanent any backward
swing is impossible; SO far as they arc
removable recovery in prices is Of
course to be expected when such agen-
cies are eliminated.
| II one would seek to reach correct