The herald., 1896-10-23
REDEMPTION MONEY

Mckinley newspapers and orators are
trying very hard to make it appear that
there is no relation between the price of
silver and the price of farm products, by
pointing to the present rise in grain
prices, which are not accompanied by
corresponding advance in the price of
silver bullion, but they only expose their
ignorance or their dishonesty, which ever
it may be. The present advance in the
price of breadstuffs is directly caused by
a short grain crop in India and Australia
and a demand upon this country to sup
ply the deficiency. 1t is temporary
market for our cereals, and 1t is an un-
natural one, too. In the natural course
of planting and gathering those coun-
tries would have grain to sell. Indeed.
it is their business to raise farm products
to sell, but this year it happens that the
yield is too small to supply their own
wants, and the conditions under which
the demand upon us for enough bread
stuffs to make good their own deficiency
for home consumption is no more re-
lated to the silver question than was the
destruction Of the grain and hay crops
by drought and hot winds in Nebraska
in 1884.
The average depreciation of commo-
dity prices since the demonetization of
silver in 1873 has been about As per cent,
and it was caused by the failure of the
government to increase the supply of it's
circulating medium in proportion to the
increased demand of commerce for
money. Prices did not ''go a-tumbling"
on the passage of the act of 1873. They
fell gradually and in harmony with the
increase in the demand for money over
the supply. The volume of money has
increased since 1873, but the distance be-
tween the supply and the demand has
steadily widened because the growth Of
the volume of merchantable commodi-
ties has been very much greater than
the growth of the ability of the money
medium to provide for their interchange.
The condition in which general trade
finds itself today, is the result of a slow
process. The government since 1873 has
supplied the people with money with
which to transact business in inverse
ratio to their requirements, which oper-
ated to gradually force commodity val
ues to lower levels.
1t is true that there appears to have
been an increase in the per capita money
Of the country equal to little over $4
since 1873, but there has been no such
increase in fact The act of 1873 made
gold money the only ultimate redemp-
tion money of the country, and all other
forms of money were made token money
redeemable in gold. When silver was
demonetized and the country put upon
a gold basis the total gold in circulation
in the United States was 100000 Now
it is said to be nearly 100000, 900, and
that is the sum total of the redemption
money of the country. The total money
in circulation is about $1,600000, 900, but
over 81, 100, 000.0 900 of it is merely prom
ises to pay money, which is gold The
Bland-Allison silver coinage act merely
increased the volume. of token money. 1t
created no ultimate redemption money,
and the same was true of the Sherman
silver purchase act.
Hence, since 1873 we haee had no
money that waa legal tender of and
in itself except gold. Silver dollars are
a legal tender for all public and private
debts, but they are so only because they
are convertible into gold. Were they
not so convertible, and in the absence of
& law giving them the function of ulti-
mate redemption money, their purchas-
ing power would be exactly their COM
modify value. That is to say, the reason
why a silver dollar and paper dollar
will buy as many goods as gold dollar
is because the government is pledged
to exchange gold for the silver dollar and
redeem the paper dollar in gold. If the
silver dollar were clothed with the same
money function that gold possesses the
volume of redemption or legal money
would be as much larger than it is as
there are silver dollars, which would
make the present total of actual money
nearly $1,20O,0O0,00O instead of less than
$500, 900, which is the present amount
In 1870 the population of the United
tSates was nearly 100000, and today it
is about 72,000,000 Here we have an in
crease of population of 80, 900, 900 with an
increase in redemption money of less
than $500,O00,000, or rather with a total
volume of redemption money of that
amount. Had silver not been demon
etized, the total redemption money, gold
and silver, at this time would be about
$4,000, 100000, or four times greater than
it now is. The present volume of re-
demption money, gold, amounting to less
than $5O0,000,0O0, can and is being con-
trolled by the money syndicates, who
depress and advance commodity prices
for speculation purposes, but If silver
were given its proper and natural place
in our monetary system as redemption
money, the volume would be too large
for the syndicates to CONTROL, but it
would not be abovs the demands Of the
business operations of the people. Thus
the question of opening the mints to the
coinage of silver into redemption dol
lars on parity with gold is business
proposition which has the' sanction of
the experience of commerce and the
needs of the business interests of the
people. The single gold standard means
an insufficiency of money to do the busi-
ness of the country and consequently
dear money and low commodity prices,
while, on the other hand, the remoneti-
zation of silver would mean a sufficiency
of money to let the law of commodity
supply and demand have free course.
COLLEGE CT AGRICULTURE
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