Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1898-07-08
A BOON TO THE WORLD.
Would Be Free Coinage of Sill
yer In This Country.
A VALUABLE COINAGE PRIMER.

Some Plain Facts About value-Eluci,ia-
tion of the Terms Supply and Demand.
Factors Which Determine the Value of
Money Quantity of Coin Needed.
With a greater number of coins prices
will be higher, and the increase of
prices will check the production of pre-
cious metals. The value Of thing is
what it will exchange for. The value of
money is what money will exchange for
on its purchasing power. The value Of
money is inversely to general prices,
falling as they rise and rising as they
fall. If prices are low, money will buy
much more of other things and is of
high value; if prices are high, it will
buy little of other things and is Of low
value, writes +. A. Bcnsberg in The
Mississippi Valley Democrat Now the
general theory of value, it appears and
the proximate conditions which deter
mine it is the equation between supply
and demand, and this is clearly the case
with reference to money. The terms
supply and demand need, however, some
elucidation. Let US consider what is
meant by the supply of or the demand
for money. The supply Of a commodity
means the quantity Of it which is offer
ed for sale. But in what shape does the
sale Of money take place? By being Of
fered for goods. The supply Of money,
then, is the quantity of it which people
are wanting to lay out or, to put the
point more concisely. it is all the money
i'll circulation at the time. Again, to
take the case of demand. The demand
for a commodity is the purchasing pow
er offered for it. Demand. in the special
case of money, consists of all the goods
offered for sale. There is, however, a
peculiar feature in tho case of money
which arises from it's position as the
medium Of exchange-viz, that money
is, SO to say, in constant state of sup
ply and demand, since its principal serv-
ice is to act as the means of purchasing
commodities From this it follows that
the factors which determine the value
Of money within a given time are:
First. the amount Of money in circula-
ton. and, second, the amount of goods
to be sold
The next question which arises is,
What quantity Of money does nation
(worldD require? What amount of the
circulating medium is necessary for the
proper making Of the industrial organ
ism? Totsis puzzling problem the earli-
er economist gave answers in the shape
Of definite formulas. Thus Sir w. Pet
ty was Of the opinion that the amount
Of coin required by country was one.
half Of the rent Of the land, one-quarter
the amount Of building rent and one
fifty second part Of the annual wages Of
labor. Modern statisticians, however,
decline to attempt a quantitative an
swer and content themselves with indi-
eating conditions which the problem in
wolves. In fact, we must first examine
the work which money has to perform,
and this depends upon several condi-
lions. The first of these is the popula-
tion. Other things being equal, twice as
many people will want twice as much
money. Tho second is the amount OF
transactions, for, if the amount Of bust
ness done is double, the amount Of mon-
ey must be also double. Another factor
which must be estimated is the extent
Of boarding, for all the money boarded
is withdrawn from circulation, and
increases the total amount needed.
Silver and gold are only suitable ma.
terials for forming the principal cur.
thnxy n Il <.,A A~~I Ix<
ing kept. Their firm and compact tex
ture makes them difficult to wear Their
cost Of production is SO considerable
that they possess great value in small
bulk, and their identity is perfect The
possession Of both Of these metals Of
all the qualities needed for money is
more briefly but forcibly put by Cantil-
Ion when he says that silver and gold
are Of small volume, of equal goodness,
easy Of transport, dividable without
loss, easily guarded, beautiful and bril-
liant and durable almost to eternity.
Why 16 to 1? Because at 10 to l the
worlds supply Of silver and gold is very
near equal. and gold, made to share the
burden with silver, will fall in price
the world ever to this ratio. which will
be the true measure Of values. The
worlds supply Of money is not suffi-
cient to meet the demand, and therefore
its value has doubled within the last 25
years. The law Of supply and demand
applies to money with greater force
than to anything else. for the reason
that the demand for or the supply Of
money affects all products Of labor and
therefore labor itself. The increased
purchasing power Of money has not
affected the value Of stocks and bonds
to the extent it has labor, for the reason
that although the earning power Of
stocks and bonds are very near one halt
this one-half will buy just as much Of
the products Of labor as the whole world
would have bought in 1878, when the
worlds supply Of money was 6,5OO,.
600, 1000 silver and gold, very near an
equal amount Of each, good the world
over at 16 to /. One hundred million
people used this money as the measure
Of values, that is Sc. so per capita. To.
day 1850, 900, 900 people use gold as
the measure of values, and there is only
1900, 900. 900 in gold in the world.
that is 50. 25 per capita. and any article
which sold 25 years ago for Sc. so can
be bought today. with one or two excep.
tions. for $3.2 The gold standard means
steady, constant and indefinite in.
crease in the purchasing power of money
that is, falling prices. With a greater |
number Of coins prices will be higher.
and increased prices will check the pro.
duction Of precious metals. The only
way to get greater number Of coins is
to open the United States mints to the
free and unlimited coinage Of silver at
16 to l. which would be boon to the