The Providence news. (Providence [R.I.]) 1891-1906, 1897-05-18
PER CAPITA MONEY.
Do Prices Depend Upon Amount
or Upon Kind OF Money?


and cheap money advocates that prices
are regulated by the amount Of money
in circulation and that there Is any neo-
esary relation between prices and
amount of money. When driven from
one position, the bimetallists take ref
uge in another just as insecure and il
logical. but perhaps little more hid
den by sophistry. The more enlighten-
ed among them do not now assert that
to double the amount Of money Is to
double prices. They generally admit
that the rapidity of circulation and the
use Of credits affects the efficiency Of
money and prevents 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 silyerites is disproved in
many ways. Statistics of prices and
amount Of money per capita in use in
different countries at the same or at
different times fail to show any Ger.
tain relation between prices and money.
Thus, while prices have declined in the
world and in this country very greatly
since 1900 or 1862 or 1872, the amount
Of money in use has increased enor-
mously. From a per capita circulation
of $4.99 in 1900, Sl4. 63 in 1852 and
$18. 10 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 of the world
is about SIS; that Of the silver stand
ard countries only about $3.50. Will
some of the silverite professors who are
conducting financial schools" in west
ern 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 money is made has much more
to do with prices than the amount Of
money in use? Will they tell their class
es that gold has always been more val
liable, 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 established
when gold was only ! 5 or 16 times as
valuable az silver? Will they then ex-
plain that the value of both gold and
silver bullion is fixed in the long run
by the cost of production and that there
fore the value of bullion does not de-
pend upon the quantity Of money in cir
culation?
Will they try to make it clear
that if it takes five hours Of labor to
produce bushel of wheat and five
hours Of labor to produce 23. 90 grains
Of gold one product will exchange for
the other-that is. the price Of wheat
will be 81 per bushel under our present
standard? Will they then add that if it
requires only 21s hours work to pro-
duce enough silver (37lL grains) to
make dollar that the bnshel of wheat
will not exchange for less than two sill
yer dollars, and that this is the reason
why prices are higher in silver standard
countries? Will they explain the origi-
nal American financial policy, which
was to keep the coinage ratio as close
as possible to the market ratio? Will
they ask the members OF their classes to
vote to restore this thoroughly Amer
lean financial polioy?"
If the corps of silver professors and
cheap money statesmen who are con-
Quoting the national financial school"
fail to answer the preceding questions,
perhaps tE,y ere willing to explain
what kinds Of money are included in
making up the amount Of money which
affects prices. Does il include all kinds
Of government or state paper money, as
well as gold, silver and copper coins?
Does it include bank notes, which form
considerable proportion of our present
circulating medium? If you include
government and bank notes, why not
include bank credits? Are not more ex.
changes and greater exchanges effected
by means CT checks than by means Of
either paper money or coins? Is it not
as easy for one who has credit" (de-
posits) in n bank to buy and sell as il
he had money in his pocket? Do these
credits or deposits necessarily consist of
money at all? If man has that amount
of property, can he not have 81 900, 900
credit with his bank on which to draw
checks at any time? Cannot such man
buy and sell on a large scale without
the use Of ordinary money? Why, then,
should bank deposits not be included in
making up the per capita circulation of
q country!
When the classes of the national
financial school" can pass an examina-
tion on these per capita" questions, we
will prepare set of questions on other
subjects, ~, for instance, the cause Of
high and low interest rates, the advan-
tages Of high prices, the blessings Of
cheap money, etc. Byron w. Holt
IN SANITApIJIM