Iron County register., 1898-03-03
AN ILLOGICAL POSITION.
The Flexible Currency Scheme of Ex-
Senator Edmunda.

| that will expand and contract with the
demands of trade, that the volume of
gold currency Is of necessity rigid,
that to procure flexible currency we
must abandon gold and authorize a
bank currency founded on the assets of
the national banks, yet that to preserve
a fixed standard of value we must lie
down this flexible bank currency to
the rigid gold basis.
To thus say that we need a flexible
currency, that the banks shall be au-
thorized to issue such flexible cur
rency, but that they must conform this
so-ca1led flexible currency to their
stock of gold and so of necessity make
the volume of gold, the ups and downs
of the gold reserves of the banks, not
the demands of business, the measure of
this flexible currency, savors somewhat
of contradiction. In short, we are told
that the currency should be made f1ex-
ible so as to conform to the demands
of business, yet we are told in the same
breath that business must be made to
conform to the volume of gold.
To conform the volume of currency
TO the demands of business would seem
W Lu4C 1881 O1 SlI1
to permit the exchange of the products
of labor free from the evils of strin-
gency or initiation. If production is in
creasing and the exchanges to be eff
fected multiply, it would seem that
the currency should be increased so
that the demands for each dollar would
not grow. If those demands do grow.
if competition for the dollar becomes
more active, the dollar will grow dearer
and prices will fall. So the flexible cur
rency that conforms with the demands
of business must grow with business,
It must go on increasing with popula-
ton and trade. This kind of flexible
currency we are told we need, but we
are told that it must conform to the
volume of gold as well as the demands
of business, and so if the production of
gold does not happen to grow with the
increased productiveness of labor we
cannot have the flexible currency that
we are told we need.
To conform the volume of currency
to the volume of gold means that if
the production of commodities grows
faster than the production of gold
prices must fall, means that we shall
not increase the currency in response
to the demands of business, but that
we shall restrict the demands of busi-
ness to the supply of gold. And we can
make the demands of business conform
to the supply of gold, conform even
when the quantity of goods to be ex-
changed and the demands for money
are increasing while the production of
eoId is not, how? BY making the
money that we have do greater duty,
by making each dollar dearer and com
modities of course lower in price, SO
that each dollar will exchange more
goods and so that though the quantity of
goods to be exchanged is increased the
aggregate value is not. But, as we have
said, this is conforming the demands
of business to the supply of money,
not the supply of money to the demands
of business. And so a currency that
must conform to the supply of gold
must be flexible to the supply of gold,
the demands of business will be fex-
ible to it, not it to the demands of busi-
ness.
This sort of flexible currency the
Bank of England gives to England. It
regulates its notes and its credits by
its gold reserve. When that reserve
runs down it contracts its loans, con-
tracts business, makes business con-
form to it's stock of gold. And it forces
a contraction of business by calling
loans, by forcing men to realize ON
their products and so forcing down
prices and the volume of business done
which in turn has its effect on the vol
ume of business for the pulling down of
prices undermines the profits of enter
prise and leads to curtaiIed production.
The result of such action is to discour-
age imports of products into Great
Britain and so check the demand for
gold for export while the higher interest
rates forced by contraction and the
increased exports stimulated by forcing
prices lower tend to bring gold back
again. And with the increase of gold
comes expansion, with expansion comes
a rise in prices which invites increased
imports until at last gold exports again
result and the bank puts on the screws
of contraction to stop that export. Thus
it is that the volume of currency is
made to conform to the gold reserve
of the bank, of trade, is made to con-
form to the volume of gold.
This conformation of the value of
business to the volume of gold is what |
our currency 1eformers would trans
plant to America, yet they tell US that
our need is flexible currency, flexible |
to the demands of trade, and that this |
they propose to give us through the
medium of a banking currency. 1t is |
nothing more nor less than to tell US |
that what we need we cannot have un- |
less the production of gold conforms |
to the demands of business. And with |
gold the basis of all exchanges, with
the volume of currency and credits reg |
ulated by the volume of gold, with the |
supply of money thus rigid and the de- |
mands of money changing with the pro-
duction of wealth, the value of business |
will be made to conform to the supply |
of gold. AS the currency cannot be made |
to conform to the demands for money, |
the demands of money must be made |
TO conform to the supply. as the cur
rency cannot be increased with grow
ing volume of business, prices must be |
decreased so that the value of busi- |
ness shall not increa ease.-PhiIadelphia |
American.
Won't Know Where He Is At.
If all statements that are being made |
as to the presidents attitude upon the |
monetary question are to be believed,
he must be the greatest ''wobbler" of |
the nineteenth century. Mr.. Henry |
n II 4