The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-07-28
DEVOTEES OF AN Exploded
THEORY.

some years ago a number or economists
arrived at the conclusion that the adoption
of the gold standard was responsible for
the alleged decline of prices or values. In
vestigation did not sustain the broad as
sumption. 1t was found by all comparisons
that while there has been a fall in the
prices of many articles since the introduce
ton of labor-saving machinery, the prices
of not a few articles had advanced. The
extensive inquiry into the movement of
prices by the National Bureau of Labor to
carry out the order of the Senate in 1890
showed that between 1860 and 1890 the aver
age of all prices. making those Of 1860 100,
had fallen to $780, In 1890 the price of meats
was 1915. compared with 100 in 1860, but the
prices of all the other foods were 1885 in
1890, compared with 100 in 1860. The prices
of farm products generally were as high
in 1890 as in 1860, but the prices of clothing,
rentals and house furnishings had declined
rapidly during that period.
1t must stand to reason that if the fall
in prices had been due to the demonetiza-
ton of silver and to the assumption that
there is not enough gold to sustain the
trade and business of the commercial
world the decline would have been the
same upon every article or class of articles.
When, in 1890, it was shown that the gen.
eral price of whole classes of products, like
lumber and building materials. had ad-
vanced % per cent. between 1860 and $780,
while another class had fallen more than
% per cent, it is fair to conclude that other
influence than the decentralization of silver
by Germany and few small States is re-
sponsble for the changes in prices. The
first and most potent of these influences is
supply and demand, and the great reduc-
ton in the cost of production by the intro
duction of labor-saving machinery. I'M
mense production has been made possible
and at a greatly decreased cost. The supply
consequent has created a competition which
has caused decline in the prices of many
articles
If the assumption that the scarcity of
gold could have had any basis in fact, it
must have been at the time it was first
made, more than a dozen years ago. In 1874
the worlds output of gold was valued at
$96, 200 900; in 1874, at $780, $50 900; in 1885, at
$97, SOC, 900. The value of the output of silver
for those years was. 1873, $oZ,IZOVOV5 1914,
$7O674, 400; 1876 ST., 57S 100. The average value
of the output of gold the past three years
has been considerably more than double the
output of any one of the three years named
and double the coinage value of gold and
silver named in any one of those years
The average output of gold during a period
of three years. as late as 1882, 1888 and 1884,
was less than 800, 900 900, and not half
much as the value of the gold output of 1875.
A few theorists who several years ago
concluded that there is not enough gold
for the basis of the money of the CONNER
cial world, insist upon that exploded as
sumption now. They will not take into con-
sideration the changed conditions, which
are that the annual output of gold has been
since so late a date as 1887, and is now
equal in value for money purposes to the
output of both metals at the date of specie
resumption by the United States. SO these
deVotees to an exploded assumption con-
tinue to talk of the insufficiency of the sup
ply of gold in the same language as did
those who first made it years ago. If there
had ever been any ground for their assump-
ton the more than doubling of the annual
output of gold has swept it away.