The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1896-09-07
THE FINANCIAL FORUM /
VALUE OF MONEY.
silverftes Would Cheaper 1T to
Raise Prices OF Products.

To the Editor of the Globe.
AFTER reading your editorial of Aug 28
resist taking issue with you on some nrnno.
sitions advanced in that article, which seem
10 me at variance with established principles
OF sound finance.
II both sides would calmly discuss the
great question Of the day, and manfuIly adj
Init such propositions as cannot be honestly
u us disregarding all immaterial Issues,
the PUBIC at large would soon be able to
FORM an intelligent opinion on the subject.
ana much bitterness would be avoided
assertion:
The volume of money in any one country
Is or trihing Importance provided it be Of
world" ~
This statement, though cunningIy oualf
iea amounts to denial of that great and
UNIVERSAL universally admitted law called THE guam
titatlve theory OF money" Graham defines
this law In the following language: 1.-THE
vaiue OF money is in the inverse ratio of
ms qtuantty, the supply of commodities re-
stuart lin Political Economy saws: ''The
Haaue OF money other things being the
increase Of f. ouany as It's quantity every
every diminution raising it, in a ratio ev
actly the equivalent
IN Every very, standard work on political economy
IN england and other European countries, as
Wen as cur own, affirms this law as the very
t Lung OF monetary science. / do not
dian,, therefore,, that you would seriously
uIsPute IL. Your fairness in that respect is
evidenced In the same article where YOU
FesoIutely set your foot on popular rnjsnon
grs ana mistakes, such intrinsic value =
II lew more of these current errors were
weeded out, 1t would simplify discussion and
Drlng out the truth; and yet Prof. Laugh
IN IN SO often, quoted by you. speaks Of the
iutfiHslc value OF silver in 1873 and 1875
IN th1s connection, let me call your atten-
ZION TO another current mistake MANY
people Pee .e VIII admit general and continuous
Ial IN prices of all commodities, but will
stoutly deny that money has appreciated IN
Vaiue; in fact, they contend that money and
especially gold, has fixed value" and
cannot appreciate or depreciate. This con-
tentlon is based upon the senseless theory
OF intrinsic value and, of course fails
Win IL. it; Correctly speaking, there is no
sucn thing as general fall in values +ha
apparent general fall in prices is only con-
elusive evidence of a rise in the yalua ~
taoney' Just as the changed water line Of
vessei AFTER unloading indicates a rise of the
the ocean, ei ieFeA u
Therefore we cannot escape the conclusion
that the appreciation OF money is due tn an
increased demand occasoned by an increased
supply OF commodities, an increased popuia
tlon or an extension of trade greater than the
corresponding coinage of money or else II
must De due to contraction of the currency
~ Either or all of these causes Indicate that
ne tne YoIume OF money is not proportionate to
tne demands made upon it, and the only rem
edy to this general and continuous fan in
prices seems to be in the increase of the VOL
ume OF money to keep pace with the increase
tension Of trade.
The question then narrows to the selection
OF the best material available to increase the
volume Of our money
The minis being open to free coinage OF
gold, 1t is reasonable to assume that ali the
gold available for money purposes has been
colned, and yet the so-calied fall in prices or
shr1nkage In the volume of money becomes
every year more apparent, and the disastrous
consequences Of a falling market on all our
Industries has forced upon us the early soi1
ton OF this financial problem.
The shrinkage in the volume Of money and
corresponding fall in prices, which was inau-
gurated by the closing of our minis to one
half the former money metal of our currency,
has been accentuated by the increase in our
population, and the extension Of our trade and
Industries.
1t is the ever widening chasm between
money and commodities which must be filed
with something more substantial and tangi-
Bile than faith or confidence: and I would be
pleased, Mr.. Editor, to read your suggestion
OF remedy which would infuse enough new
blood in cur diseased financial system to
meet the increased demands daily made upon
1T by progressive nation like ours.