The Monitor-register., 1897-09-10
PUBLISHED BY REQUEST.
Silver and Wheat.

The gold press is exultsnt over The rise
in the price of wheat while silver ia de-
clining. 1t is pointed to as proof couclu-
sive that there Is not and never has been
any come ction between the prices of
wheat and silver, and that, consequently,
the silver mems contention upon this
head is false. There is always superficial
argument upon both sides OF every public
question, because there are 80 many pep
pie who persist in debating matters
which they do not fully understand. Pro-
badly there is no phase of the silver CUES.
ton of which this is more conspicuously
true than the relation of silver and wheat.
Some silver men have argued it, or rather
asserted" it in such a way as to indicate
a belief upon their part that there was a
sort of natural connecting link which
could not be broken. On the other hand,
the gold men have constantly and dog
matically declared that there was no con-
n~ection whatever, and that the value of
wheat, like that of everything else, was
" u ioW W bupPiy ouu
demand" No silver advocate of any re-
pute has ever denied that the Law of sup
ply and demand fixed the price of wheat.
But conceding this, it docs not follow
that there was no connection between the
gold price Of that grain and the gold
price of silver. The relation between
them was not a natural and arbitrary one,
but purely commercial, and up to a CON-
paratively recent date the decline of silver
had a most important bearing upon the
supply of wheat in the English market,
where the worlds price for that cereal is
made.
To make this clear : When silver was
shut out of the mints of Europe and
America its gold price at once began to
fall. But it continued to be the money of
India just the same as before, and its
value, compared with wheat and cotton
and other native products, remained sub.
stantially unchanged. From 1878 to 1898
an ounce of silver would, upon An aver
age, buy a bushel of wheat at Bambay
and lay it down in England. Therefore,
if a considerable quantity of East Indian
wheat could be sold in England at the
same rate, it is plain that all other wheat
sold there must be at the same price, and
that the price of a bushel of wheat and
the price of an ounce of silver must run
more or less closely together. But no
we'll informed silver man ever claimed
that there were no variations. When it
is said that silver has remained stable in
countries using that metal as money, it is
not meant that prices stood at q dead
level all the time, like the surface of the
sea in a calm. That is never the case in
any country or under any monetary
system. Prices will rise and fall with
the changes in supply or demand. Some.
times the wheat crop of India wal extra
large and again it was deficient. OF
course this would affect the silver price
at Bombay, and consequent y at London.
There were times when it required more
than an ounce of silver to get the bushel
of whest, and other times when less than
an ounce would do it. This would Ca use
variations from year to year, and the lines
representing wheat and silver prices
would not be exactly parallel.
The reader will catch the idea at once
by glancing at a table taken from Score
tary Carlisle's letter to the United States
Senate, dated May Z 1894. 1t shows bow
wheat ranged in price at Bombay from
1878 to 1892, and is as follows:
l 100 1' g 1889 100 l iSs l' SO 1873 % ISIS is
That is to say, calling the silver price
in 1873 400" it ranged through the
various figures given. finally reaching
119 In 1892, a year in which the crop was
very short.
The average for this period was 9S1.
Thus, over a period of years, the
Hindoo received practically the same
price in silver for his wheat, although
there we're fluctuations from one year to
another.
The same Of course. is true of the
American price. In 1895 an ounce of
silver would exchange for 10 pounds of
wheat in New York. In 1878 an ounce
of silver would exchange for go pounds
at that point-approximately the same.
But from one year to another there had
been a drifting apart, as a result of crop
conditions, speculation, etc.
Let us go on a step. When the gold
price of silver began to fall In London
while the silver would continue to buy
about the same quantity of wheat at
Bombay, it became to the interest of the
importer to exchange his gold for silver
and buy wheat in India. AS a result, East
India wheat reached the London market
which. but for the fall in sill yer,
would never have got there at all. Right
here comes in the principle of supply and
demand. The fall of silver increased the
supply of wheat in the English market.
In 1873 the exports of wheat from India
to England were less than a million
bushels; in 1892 they exceeded fifty
million bushels. The London price be-
gan to fall, but in falling it kept close to
the decline of silver, for the reason al.
ready given, namely, that she silver price
in India remained nearly stationary, the
supply there having practically kept
pace with the demand.
Since 1892 there has been . marked
falling off In the exports of wheat from
India: First in that year the crop was
about ~ per cent short; second, in 1893
the mint of that country was closed to
silver on private account, which gave the
rupee a fictitious value above that of
silver bullion, and third, Argentine
doomed up as a competitor. Argentine
produces and sells wheat on the basis of
a paper currency cheaper ever than silver.
Her competition involves the same
principle as that of India. AS gold rist s
it becomes sharper and keener. But it
SO happens that at the present time
Argentine has no wheat, or very little.
for export. In short we are temporarily
relieved OF both Indian and Argentine
competition, and, as a matter of course,
the price of wheat rises. Aud this takes
place just as silver receives a staggering
blow by its demonstration in Japan aud
falls.
The specific connection between wheat
and silver being thus broken. the former
is o affected just the same as commo.
dities in general are affected BY the
appreciation of gold. With our two