The enterprise. [volume] (Wellington, Ohio) 188?-1899, 1897-05-19

High and Per Capita Money Low In
Silver Standard COuntriest-Shouiu
Denosits in Banks he Included In
Estimating Amount of Money "hieh
Affects PrIcesf
One of the numerous fallacies upon
which the free silver delusion is found
ed is the assumption by all silverites
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
iuge in another just as insecure and IL
logical. but perhaps little more hid
den by sophistry. The moreenlightened
among them do not now assert that to
double the amount of money is tc
double prices. They generally admit
that the rapidity of circulation and the
use of credits affect the efficiency OF
money and prevent an exact statement
: of the relation between amount of mon.
ey and goods, but that more money un.
doubtedly means 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
ily since 1900 or 1852 or 1872, the
amount of money in use has increased
enormously. From per capita circu-
Ilation of $499 in 1900, $14.63 in 1852 and
$3.50 in 1872 we now have one of $23,
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 oftheworld
is about SIS; that of the silver standard
countries only about $4.30. VIII some
of the silverite professors who are con-
iducting financial schools" i'll 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
33 times as valuable while most of the
coming ratios of the world were estab-
lished when gold was only IS or 1G
times as valuable as silver? viii 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?
Will they try to make it clear that ii
it takes five hours of labor to pro-
duce a bushel of wheat and five
hours of labor to produce 23.2S
grains of gold one product will eX'
change for the sther-that is, the price
of wheat will be 81 per bushel under oul
present standard? Will they then add
that if it requires only 2H hours work
to produce enough silver (37A grains,
to make q dollar that the bushel OF
wheat will not exchange for less thar
two silverdollars, and thatthis is the rea
son why prices arehgherin silver stand
ard countries? Will they explain the
original american financial policy
which was to keep the coinage ratio a:
close as possible to the market ratio
will they ask the members of theil
classes to vote to restore this thor
oughly American financial policy"
If the corps of silver professors ant
cheap money statesmen who are con
ducting the national financial school
fail to answer the preceding questions
perhaps they are willing to explain
what kinds of money are included u
making up the amount of money whicl
affect prices. Does it include all kind
of government or state paper money, a
well as gold, silver and copper coins
Does it include bank notes, which form
a considerable proportion of our pres
ent circulating medium? Ifyou includ
government and bank notes, why no
include bank credits? Are not more eS
changes and greater exchanges effecte
by means of checks than By means o
either paper money or coins? Is 1t nc
as easy for one who has credit" (de
posits) in bank to buy and sell as
he had money in his pocket? Do thes
credits or deposits necessarily consis
of money at all? If q man has ths
amount of property, can he not hav
$1,000,OoO credit with his bank on whic
to draw checks at any time? Cannc
such man buy and sell on large seal
without the use of ordinary money
Why, then, should bank deposits not h
included in making up the per capt.
circulation of the country?
When the classes of the nation;
financial school" can pass an examin
tion in these "per capita" questions, v
will prepare set of questions on oth'
subjects, as, for instance, the cause I
high and low interest rates, the adval
tages of high prices, the blessings
o1oon ,,onax ato -Rvron w Holt