Cottonwood report. [volume] (Cottonwood, Idaho) 1893-1901, 1896-09-11

IS IN I'LL small proceed to
NE true source from which this
mic evil flows. Our object in this
Try is to ascertain the truth.
= fious causes have operated to
about the phenomenal and uni
II fall in prices since 1873. From
1ature of the case, it is to be ex-
"a that in a complicated question
his, there is more than one fac
operation.
addition to the main factors of
3netization and contraction of the
Ic11cy and concentration Of the
1G&y power which have been the
n<fn Factors in producing the phenom-
Tall in prices, we find that there
KIN 5everal subsidiary factors which
mt particular classes of property.
1fanza" farming, the introduction
approved machinery for certain
>u14 Of farm work, the dealing in fu-
IN<6 and options in New York and
Q1I66Eo exchanges, the methods prac-
N1<d by large grain dealers, and the
{Ht36duction of merchant milling I'M
64t consolidated capital, have all had
<@fdency to place the farmer, who
13II44a wholesale and buys at retail,
&c disadvantage, and to depress the
rEIc<s of certain of his products.
ne ground upon which the bimetai-
:1I4< 4tands today, however, and the
tafQen of his complaint is altogether
Iefent. He is not complaining of
~ VIBRATION of those subsidiary fac
fo<1 Which are always disturbing more
III <e8s the prices Of particular articles.
N - the universal decline in prices
which he complains of, and which he
tfLes 10 remedy. This universal decline
IA prices, and consequent paralysis of
industry and commerce is admitted
BY the monometallists 1t is the exist
euce Of this admitted general and per-
uianent depression which forces us to
tIie conclusion that there must be
GENERAL cause in operation which pro-
dtlcek such a widespread effect. In
this connection, Sir William Houlds-
worth. delegate of Breat Britain, said
AZ The Brussels conference in 1892:
The origin of the gold and silver
conmission of 1878 was the feeling that
deep and abnormal depression of
trade had set in, which, unlike previous
depressions. showed no signs of re-
<1Htt4* rive QeHnlte CONCLUSIONS were
arrived at:
That the depression dated from
1873 or Whereabouts.
70 That it extended to nearly every
branch of industry, including agricul-
ture, manufacturers, mining, and is
not confined to England, but extends
to all the industrial countries of the
That it appeared to be closely
connected with the serious fall in gen
eral prices, resulting in the diminu-
ton and consequent irregularity Of en-
ployment of the wage earners.
That the duration of the depres-
sion has been most unusual and abnor-
NAL
Mo adequate cause exists unless
caused by the dislocation produced by
currency changes.
The second commission confirmed
the findings of the previous commits
sien Az to the date of the disturbance,
as 70 the fall in prices and the effect of
the {au on industries"
Wo Sarficient reason has been adj
vanced by the monomotellists for this
universal disastrous decline in prices.
overproduction theory and the theory
OF progress in manufactures. They
have never proved those theories; all
they do is to stand idly by and try to
criticize and destroy the proposals of
the bImetallists, but they offer nothing
to relieve the distress. The bimetal-
lisfs can at least take this credit to
themSelves they attempt solution Of
the DIoblem; the monometallistS dc
fundamental Proposition.
In affempting to explain the rela-
zion OF prices TO the currency, I would
first lay down as a fundamental prop.
csition that the prices prevailing dur
Ing E5ven period are determined by
the relation which the total quantity
OF money functioning during saiG
period bears to the sum of the prices
at the circulating commodities, and tc
the nuutber Of commercial transactions
or the Number of times the commodi
ties are bought and sold before they
are assumed. In other words, price.
depend Upon the volume and velocity
Of the currency. To perform a giver
amount Of work the currency must pos
6ese. like a quantity of water, GER
tain volume and velocity. If we wisl
to make a turbine wheel perform /;
certain amount of work we must hav,
certain volume of water under a Ger
tain mead or velocity. If we wish [,
increase the work to be performed w
must increase either the volume or tn
velocity of the water, or both. TIL
same law can be applied to the cur
rency. Many gold bugs think that We
locify u the only factor entering int
monetary currency. They overlook
the fact that to perform a certai
amount of work or business a certai
volume also is necessary, and that a
The business increases the volum
should Increase in the same proportion
II the velocity remains unaltere6
Velocity is only one of the factors. A
the Institutes for money that hav
been Invented, such as checks, draft.
0IIIa Of exchange, etc., help to Civ
velocity to the currency, but none c
these substitutes add to the currency
volume. All these aids to the cul
re0cY4 velocity were invented owe
h1I( century ago. and there hav
been 40 more inventions of this natur
6Luee. At the time of their introdut
4 LIC1 ley brought great relief to I'll
Hc<I1 of commerce and industry, an
~ 11rvica ia now tnva In q hIa m n