The herald., 1896-10-11
Observation-Disclosures
! a LOGICAL
! CONVERSION
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DelHB equal, tHe PRICES VI CoiliiiouillcS
in general vary directly as the quantity
Of coin money in circulation"
In applying this rule we must bear
in mind that money substitutes, such
| as bank notes, treasury notes, silver and
| gold certificates, bills Of exchange,
drafts, notes, checks, etc.. are not mon
ey, but merely evidences Of debt. They
| are like kites; so long as the wind of
confidence bears them along, SO long as
| the string of coin redemption keeps
| them at an angle which catches the
wind of confidence, they sail the air of
| commerce, pictures Of power and Sc
curity; but if the wind of confidence
| gives out, or the string of coin redemp-
tion be too short or break, they drop
down. worthless pieces of paper.
| If then, according to the above law,
the prices Of commodities in general
vary directly as the quantity Of coin
money In circulation. ~ then contrac-
tion must depress prices, while infla-
| tion must cause them to rise. Depriv-
| ing silver of its monetary function was
! practically the most far-reaching, tre-
mendous contraction of the currency
! ever inflicted upon the world, necessa-
| rily causing the greatest, most sudden
and widespread depression In prices of
commodities ever experienced, and vice
versa, the re-establishment of the free
| coinage of silver in the United States,
which Is by far the largest silver pro-
ducing country Of the world by increas-
ing the quantity of coin money, would
produce general and lasting upward
tendency In prices Of all commodities.
Enterprise, industry, commerce flag
When prices are dropping. No one wants
to buy or manufacture on falling
market, and vice versa, everybody
market. Therefore. the free coinage Of
both silver and gold, by largely increas-
Ing the amount of money, must tend to
produce times Of great commercial and
industrial activity. with increased de-
mand for labor. rising wages and plenty
OF work. AT the same time it must tend
to lower the rate of interest, make cap
ital plentiful and diminish its power
ana influence as compared with that of
productive labor. 1 feel sure YOU will
not deny that of late years the power,
influence and arrogance of mere wealth
mas greatly increased, while the op-
portunlt1es OF persons who have moth
ing but their industry and talents to sell
nave greatly diminished, and that the
sympathtes and hopes of humanity al
large must be far more with the latter
than with the former.
IL may be claimed as an objection that
imitation of the currency leads to a
short-lived prosperity, liable to sudden
coiiapse at any time, but this Is only
half truth. The full truth, as proven nv
history and economies, being that ar
tlnclal imitation, in other words, inf1a-
tlon py paper money substitutes, is dam
seIous ana apt to collapse suddenly,
Whlle on the contrary, coin initiation
has Invariably proven a secure and
lasting basis for industrial and CONNER
cial prosperity.
1T has been asserted that free coinage
OF silver Will give us silver monomet-
a.iisfm, this with 53-cent dollar. Even If
ctr
ity with 53-cent dollar would be better
than general disaster with a 1oO-cent
dollar. But 1t has not been proved and
the Whole claim is without rational
foundation, for it rests on the mistaken
appNcation OF a by no means infallible
RUE; uhls rule is known in economies
as the Gresham law" viz: "Where two
coinages OF equal legal tender, but un-
equal bullion value, circulate side by
slde, the superior coin tends to leave The
country From this they argue as fol-
lows: AT present the gold dollar is
our monetary unit and the silver dol
lar passes at par only because II can
be exchanged for a gold dollar: take
away the exclusive gold basis. as Won
would by the free coinage of both sill
yer and gold. and through the opera
ton OF the Gresham law" the silver
uoiiar VII sink to it's present bullion
value of SO cents only"
But circumstances alter cases rbera
Is law applicable to this case. which
Is more far-reaching, infallible and uni
versal that the Gresham rule. and that
IS the law of supply and demand. Tha
ABOVE argument is incoherent and incon-
slstent, because 1t disregards NOT onIv
the law of supply and demand, but still
more the causes which led to the low
bullion value of silver and the far
reaching. powerful effects that must
necessarily follow the removal of these
causes
The causes which led to the low bull
Ion value of silver are: Firstly, the de-
monetization of silver in the United
states, Germany, Scandinavia, etc.,
which cut Off the principal demand for
silver (the United States are far more
important, commercially and Industrial
ly, IN this matter than the others) in the
markets of the world. Secondly. the
forcing upon the worlds markets the
enormous annual silver production of
the United States-cutting off the de-
ihahd' whiie at the same time enormous
ly increasing the supply, caused an un-
paralleled depression in price. But the
free coinage of silver in the United
States will simultaneously reverse the
action of both causes, viz: enormously
increase the demand, while cutting off
the main source of supply. This must
greatly Increase the bullion value of sill
age in the supply Of silver money will
diminish the demand for both gold mon
ey and gold bullion, and therefore. to-
gether with the enormous gold produc-
tion Of South Africa, it will tend to de-
press the bullion value of gold-in other
words, 1.-The bullion value of the two
metals will tend to approach each other
at the legal ratio of 16 to l." 1t, there
fore, is evident that the argument from
the 5S-cent dollar and silver monometaI-
lism is no argument at all, but begging
the question.
There are many minor issues con-
tained in this subject. For instance, if
the United States legalize bimetallism,
will other important nations be inclined
to follow our leadership? Will 1t help
or hinder our trade with the silver coun-
tries, such as China, India, Japan, South
America, Mexico, ETC., for which Eng
land so eagerly completes? Will it help
or hinder our aim to compete once more
for the maritime carrying trade of the
world? Will it tend to elevate or lower
the standards of honor and morality?
But will not take up your time to enter
upon these questions, unless you should
ask them. There is one matter. however,
which l must briefly touch, and that is
the partisan claim represented by the
cry, "Repudiation!" Is it rational or
even decent for the pretended spokes-
men of about one-half our people to as
sumo the role Of Uriah Heap and claim