Marietta daily leader. (Marietta, Ohio) 1895-1906, 1897-05-15

Financial school"-Wby Are Prices
High and Per Capita Money Low In
silver Standard Countries :--ShOuld
r,epos.ts in Banks &c included In
Estimating Amount of Money Which
Affects Pricess
One of the numerous fallacies upon
which the free silver delusion is found-
ed is the assumption by all silverltes
and cheap money advocates that prices
are regulated by the amount of money
in circulation and that there is any nee
essary relation between prices and
amount of money. When driven from
one position the bimetallists take ref
uge in another just as insecure and IL
logical, but perhaps little more hid
den by sophistry. The more enlightened
among them do not now assert that to
double the amount of money is to
double prices. They generally admit
that the rapidly of circulation and the
use of credits affect the efficiency of
money and prevent an exact statement
of the relation between amount of mon
ev and goods, but that more money un-
doubtedly meons higher prices, and vice
versa.
The per capita idea of money so prev
alent with silverites is disproved in
many ways. Statistics of prices and
amounts of money per capita in use in
different countries at the same or at
different times fail to show any certain
relation between prices and money.
Thus. while prices have declined in the
world and in this country very great
" since 1900 or 1852 or 1872. the
amount of money in use has increased
enormously. From per capita circu-
lation of $4.00 in 1900, &14.63 in 1862 and
$3.50 in 1872 we now have one of S23,
and this Notwithstanding the greater
rapidity of circulation of modern dol
lars and the vastly improved and ex-
tended use of credits. Will some more
money" advocate please explain this
great fall of prices in connection with
the great increase in per capita
money.
Again, the per capita circulation of
the gold standard countries of the world
is about SIS; that of the silver standard
countries only about $3.50. viii some
of the silverite professors who are con-
ducting financial schools" in western
and southwestern states explain to
their classes why prices in silver stand
ard countries are about twice as high
as in gold standard countries, although
the per capita circulation is less than
one-third as great? Will they explain
that the value of the material from
which the money is made has much
more to do with the prices than the
amount of money in use? Will they tell
their classes that gold has always been
more valuable, weight for weight, than
silver, and that it has recently become
80 times as valuable while most of the
coming ratios of the world were estab-
lshed when gold was only is or 1G
times as valuable as silver? Will they
then explain that the value of both
gold and silver bullion is fixed in the
long run by the cost of production and
that therefore the value of bullion does
not depend upon the quantity of money
in circulation?
w III lueN llN " AithC IL NISs'A 'i't' -
it takes five hours of labor to pro-
duce a bushel of wheat and five
hours of labor to produce 23.22
grains of gold one product will eX-
change for the other-that is, the price
Of wheat will be 81 per bushel under our
present standard? Will they then add
that if it requires only 2h hours work
10 produce enough silver (37A grains)
to make a dollar that the bushel OF
wheat will not exchange for less than
two silverdollars and thatthis is the rea-
son why prices are higherin silver stand
ard countries? Will they explain the
original American financial policy"
which was to keep the coinage ratio as
close as possible to the market ratio?
viii they ask the members of their
classes to vote to restore this thor
oughly American financial policy?"
If the corps of silver professors and
cheap money statesmen who are con-
Quoting the national financial school,
fail to answer the preceding questions,
perhaps they are willing to explain
what kinds of money are included in
making up the amount of money which
affect prices. Does it include all kinds
of government or state paper money, as
well as gold, silver and copper coins?
Does it include bank notes, which form
a considerable proportion of our pres
ent circulating medium? If you include
/ government and bank notes, why not
/ include bank credits? Are not more eX-
Z changes and greater exchanges effected
by means of checks than by means of
either paper money or coins? Is it not
as easy for one who has credit" (de-
posits) in a bank TO buy and sell as if
he had money in his pocket? Do these
credits or deposits necessarily consist
of money at all? If a man has that
amount of property, can he not have
S1,OO0,000 credit with his bank on which
to draw checks at any time? Cannot
such man buy and sell on a large scale
without the use of ordinary money ?
Why, then, should bank deposits not be
included in making up the per capita
circulation of the country?
When the classes of the national
financial school" can pass an examina-
ton in these per capita" questions ,ye