The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-10-01

A correspondent asks why gold has not
fallen in price or purchase power under the
same influences which have caused a decline
in other metals Chiefly because the inf1u-
ences have not been the same. The revolu-
ton in the methods of mining and treating
ores has made it possible to produce iron,
copper and like metals much cheaper than
twenty-five years ago. The Bessemer steel
process is an illustration of the agencies
producing the revolution. Furthermore, the
output of iron mines and mills has created
a competition which, because of it's album
dance. has forced down prices. The worlds
output of iron was doubled between 1870 and
1888. and much more than doubled to the
close of 1892. When there was scarcely iron
sufficient to meet the needs of the worlds
markets the producer made the prices.
When the producers began to fight each
other for the privilege of selling, competition
forced down the price. When producers have
formed combinations to limit the production
of iron it is because so much more iron
can be produced than is needed that if all
make all the iron they can they will soon
be bankrupt because selling below the cost
of production.
The same is true of silver. The output of
the mines in 1895 was nearly three times as
much as it was in 1870, when the demand, at
about $1.9O ounce was fully UP to the
supply. The demand has not kept pace with
production; hence the decline. Moreover, it
is impossible that it should have held its
price for the reason that it has been, since
capital and science have joined hands in
silver mining, a profitable business to mine
silver in the bulk of the worlds fairly good
mines at GO or 65 cents an ounce. And 1t
may be added that so long as more silver
than is needed can be produced at 60 or Go
cents an ounce no system of coinage can
make it worth s1.SO an ounce.
The correspondent also asks, when will
gold fall? In 1850 it did apparently fall tenn
porarily in comparison with silver. Being
a precious metal which the human race has
a passion to possess, its price will be less
easily influenced with the increased output
than most other metals. 1t is metal that
is boarded. Still there are indications that
the price of gold must fall because of the
rapid increase Of the stock during the dozen
years, which has been 100 per cent. During
the past four years the output has made
marvellous strides, promising by 1900 to
reach the vicinity of $4,000, 600 annually.
1t is understood what our correspondent
has in his mind He has the impression that
the alleged narrowing of the money stand
ard has caused the fall in prices. The
truth is that in twenty-five years the legal
-.
fully expanded. In 1860, according to Null
hail. the worlds stock of money was: Cold
81, ZOO 900 OOO silver, 81, OOOO 900; uncovered
paper, s1SOO,O 900 OOO-total, S. 300, 100000. The
estimate for 1896 was: Gold. $43i0, 1000, 900,
exclusive of $61O,OOO.OOO in China and india
legal-tender silver, $3,715, 100000; subsidiary
silver sSSS 100000; uncovered paper, $24S7, co.,
OO0-total, ls11,S41. 100000. Furthermore the
improved methods of exchange have made it
possible for one dollar at the present time to
do the work which required three in 1860
There is legal tender to-day in larger volume
than the world ever knew, and it is increas-
ing faster than at any time in the worlds
history, for the reason that the worlds out
put of gold is more than 80 per cent. greater
than the average of the years 1880, 1881, 1882,
1883 and 1884, while the actual coinage of
gold was 13S per cent. greater than it was
in 1856.