The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-08-27
RIVER AT s A. NJ.
IT CUTS BOTH WAYS.


Jones and Stewart have given up the
contention in favor of free coinage of
silver for the present, Mr.. Towne is
not inclined to be so submissive. He
has given to the public a long inter-
view. in which he expresses the belief
that the silver issue will maintain it's
place of Importance in politics, and in
which he further attempts to break the
force of the heavy rise in the price Of
wheat coincident with a sharp decline
in that of silver. It was to be expect
ed that he would use this form of ar
gument, but it should not be allowed
to pass without a reminder that it cuts
both ways. Mr.. Towne cannot adopt
the principles of those who hold that
price is governed by the relation of
demand and supply in one season or
in one campaign and reject it in an
other. He and those who think with
him must choose their ground, and,
having chosen, must maintain II.
The reasons given ny Mr.. Towne for
the advance in wheat prices of the
present season are perfectly rational
and valid. He points to deficiency in
supply, to the general shortage or fail
ure of the wheat crop everywhere, to
the distressed condition of India, and
aserts that these commercial facts fur
nish an adequate explanation of the
advance of wheat. So they do. Mr..
Towne. however, cannot be permitted
to accept such facts as an explanation
for a rise in prices, and to deny them
as an explanation of fall. Neither he
nor any advocate of free coinage can
be permitted to charge variations of
price in one direction to the demone-
tization of silver, and in the other di-
rectiOn to fluctuations of demand and
supply. They cannot attribute a fall
in wheat to the abandonment of free
coinage Of silver and claim that over
production had nothing to do with it,
while crediting a rise in wheat wholly
20 lessened production, and assuming
that the silver question-had nothing to
do with ii. This is a violation of logic
and a form Of evasion common in all
discussions, but too weakly fallacious
to deceive the public
1t is true, as Mr.. Towne asserts, that
the rise in wheat prices is due to a
greatly lessened supply without a cor
responding decrease in demand 1t is
also true that the preceding fall in
wheat prices was due to an enormous
increase in supply without a CORE
spending growth of demand. The
opening of vast areas of arabic land in
our own Northwest, mostly devoted to
wheat raising, and the rise of India
and the Argentine to prominence as
exporters of wheat, threw upon the
worlds market a vast amount Of this
cereal within a short period of years.
Since this could be absorbed ONLY nv
such an increase of population as did
not occur, or by greatly increased con-
sumption, prices fell This is the whole
story, and it is written in the annals
Of trade as legibly as is the story of
this years boom in the wheat market.
n rs CAUSES OIL the Two are precisely
analogous, and supply and demand
have operated in both cases without
reference to the use OF the price of sill
yer. Silver itself has defined for the
game reason, namely, because the
worlds product is larger than the
worlds demand for it.
The important conclusions to be
drawn from these changes in market
quotations, as far as the popular mind
Is concerned, are two. The first is that
the pure assumption that there is any
necessary connection between the price
of silver and that of wheat has been
Demolished utterly and forever. The
second is that the fall in prices. not
only of wheat, but Of other commodi-
ties. which bore hardly upon our people
during previous years, was not due to
Cuc silver policy, or to anything else
than The operation OF the law of supply
and demand. Cheapened and improved
processes of production, resulting IT,
the offering to the public of an in
creased quantity of commodities that
could he sold with i profit at lower