The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-08-16
WHAT WOULD HAPPEN.

Nothing could be more effective as
an instructor in political economy, and
especially in the department of 1t that
relates to finance, than such an in
creased production of gold as would
fairly inundate the world with a yell
low flood. 1t would correct a great
many theories that have become firmly
established simply because the con-
ditions have not been such as to bring
out the facts that would contradict
them. If it should come to pass that
the deposits of gold in Alaska might
be of such unprecedented abundance
and richness as to turn hundreds of mil
lions of dollars into the Golfers of the
world supplemented by the output of
the new gold fields that are being open
ed in every quarter of the world, we
apprehend that a great many people
would find their preconceiyed ideas
rudely shaken. ....
The first thing that would suffer is
the theory that cost of production
the precious metals. There is an ele-
ment of correctness in the contention
of the silverites that the fixing of a
mint price for the precious metal all
over the world has much to do with
maintaining it's market position If
1t were not for their absurd conten-
ton that a single nation, acting in
dependently and in opposition to all
the others, is as powerful as the &C
ton of all combined, and that one ma
ton can practically overcome and re-
verse the policies of all the rest, this
would have been admitted long ago.
What an international agreement, sign
ed by all the principal commercial ma
items of the world, fixing a reasonable
ratio at which all Of them would agree
to the free coinage of silver. might do
for the market price Of that metal as
compared with gold, we do not pretend
to say, and never have That it would
affect it powerfully, we have always
believed and believe now. At any
rate. it must be admitted that the ratio
between the two metals at present is
not determined solely by relative sup
ply or cost Of production.
According to the old idea, a large
addition to the supply of gold would
make it cheaper and, by COMPARE
son, would add to the value of silver.
Indeed, most Of the economists have ar
gued that balance between the metals
would be preserved by just this COM
pensating operation Of supply They
held that, when gold became more
plentiful, it would become less valuable.
and capital would turn to the produce
ton of silver. We have seen that the
immense additions made in every quar-
ter of the world to the gold supoly
The product Of the South African mines
the opening Of new mines in Colorado
and California, the application of the
cyanide process which is throwing
upon the market great quantities of
gold from low grade ores hitherto m
worked, and, finally, the prospect of
an enormous addition from the Klon-
dixie, has not tended to raise the price
of silver. On the contrary, at the mo-
ment when the prospects for an unpre
redented increase in the gold output are
brightest, silver is suffering a severe
decline from the lowest point previous
ly reached. The cherished theory that
silver would be restored to its ancient
position by additions to the gold sup
ply must be totally abandoned.
Another theory that is likely to suf-
fer is the quantitative theory of
money. This is the common position
OF the ablest economists and the wild
est fanatics, although they hold 1t in
widely different degrees. The latter
says that prices rise and fall with
fluctuations in the money volume, and
believes that this holds true regard
less of quality and within the limits
OF single political division The
economist, discardng this folly. still
figures out that the general level Of
prices all over the world follows. with