The climax. [volume] (Richmond, Madison County, Ky.) 1887-1897, 1896-10-28
CREDITORS ARE FEARFUL.
Bimetsllism Means They Cannot Double
Real Value of Western Investments.

CREDITORS ARE FEARFUL.
BimetsIlism Means They Cannot Double
Real Value of Western Investments.
A fall in prices represents a CORE
spending increase in purchasing power
of money. A rigidly just system in
payment of debts would therefore al
low payment in a nominal sum dimin-
ished in exact ratio TO the increase in
purchasing power, or. in other words, /
to the fall in prices. So we'll recognized
is this fundamental law of equity in
payment of debts that Prof. Laughlin,
himself one of the gold champions of
the present time, has proposed multi
pie standard, consisting of unit COM
pounded of the ruling prices of dozen
or twenty of the standard commodities.
Thus a man might cquitably pay S1O0
debt of paying S120 or $50, or more or less
either way, according to the variation
of the nominal standard in purchasing
power. He would be paying equitably
because he would be returning the same
purchasing power, though not the same
nominal value in money.
A rise in prices -.aresents fall in
the purchasing pow, a dollar, and
hence decreases the oil 'olue of the
debt. Initiation causes a rise in prices,
and hence does injustice to tht In t1o
itor. Contraction produces a om,ei III
prices, increases the power y ,lh55 3 ny. u
lar, and hence does injustice to the
debtor.
change either way in the purchas-
ing power of the standard does injustice
to somebody. The great desideratum
is q standard that will not vary. OBJ
viously, if creditors should influence
legislation to lower prices they would
be dishonest. Either course would be
easily possible by legislative manipu-
lations; either would be dishonest and
subversive of government.
Now, passing these A B C propositions
which nobody thinks of denying. how
do they apply to the present situation?
Have we a case of initiation or of contrac-
ton? Of contraction. Have we q case of
rising or of falling prices? OF falling.
Have we a case of increased or decreased
purchasing power of the dollar? OF in
creased. Have we a case of advantage
to the creditor or the debtor? The
creditor. To what extent? In the av-
erage, to just about the percentage in
the fall of price OF silver bullion.
Average prices have fallen just about
80 per cent. since the demonstration of
silver, or since that act began fairly to
produce its legitimate consequences.
This Is simply another way OF saying
that the gold dollar has appreciated in
like ratio. Everything has fallen ex-
cept gold. 1t, being the standard, has,
of course, risen. Now, let us ask those
who so sweepingly charge western cred
itors with an attempt at reputation:
Who are the aggressors in this case?
Instead of the silver movement being
an aggressive effort on the part of
debtors to pay 50-cent dollars, it is q de-
| fensive movement on their part to pre-
vent their creditors from making them
pay 2OO-cent dollars.
Most of the debts, mortgages and
| bonds which now hang like body of
/ death over the newer portions of our
| country were contracted from ten to
| twenty years ago, since which time
| prices have fallen half. If n Nebraska
| farmer borrowed $1,000 20 years ago,
when wheat was worth 100 cents BUSH
ell and other things in proportion. he
was borrowing a purchasing power, ex-
! pressed in wheat, of 81 900. Now, if he
is compelled to pay the 1000 in gold,
when wheat is worth only so cents a
bushel, he is practically paying a pur-
chasing power of $4,000. In general
terms, it may be asserted that the west
ern borrower is compelled, under the
! gold standard and the fallen prices
which it causes, to pay twice the pur-
chasing power in wheat, corn, wool,
horses, labor, all the essential products
of his life's work, that he borrowed.
Hence, even if the free coinage of silver
does result in permanent 50-cent silver
dollar, and if the debtor pays his gold
debts In that deprecated currency, he
Is, after all, paying back the same guam
tity of labor and the products of labor
that he borrowed. Five hundred dollars
in gold or $1,000 in silver is worth as
much now as $1,000 in gold then. II
these things be true, what becomes OF
the charge of reputation so flippantly
hurled against the Woodworking pio-
peers of civilization in our great west?
Who is dishonest, the debtor who is
trying to pay his debt in a form that
commands the same purchasing power
for himself and the creditor, or the cred
itor who seeks to take advantage of cir
cumstances by which he can force pay
nIent in form, even though it be nom
irally the same, in reality twice the bur
den to the debtor and twice the advan.
tage to himself? Does it not rather ap-
pear that the sentiment which several
of your correspondents express is max
ing its cutlery, not so much because il
is in danger of losing half of its western
investments, as that it is afraid it will
not succeed in doubling their real value
through an artificial fall of prices?-
Cor. n. Y. Outlook.