The Goodland republic. [volume] (Goodland, Kan.) 1891-1907, 1898-03-04
An ILLOGICAL POSITION
ne FLEXIBLE Currency scheme Of *
Senator Edmunda.

Senator Edmunds.
Ex-senator Edmunds recently IN q
Deech said. In effect, that what we
greatly need IS flexible currency t
that win expand and contract with the
demands OF trade, that the volume Of
cold currency IS OF necessity rigid \
That TO procure a flexible currency We 4
must abandon gold and authorize i
bank currency founded on the assets Of 4
the national banks, yet that 70 preserve 4
fixed standard Of value we must lie /
down this flexible bank currency 70 /
the rigid gold basis
To thus say that we need a flexible /
currency, that the banks snail be au-
thorized to issue such a flexible cur
-sncv. but that they must eonfOrfn this /
so-caIIed flexible currency TO Their
stock OF gold and 50 Of necessity make
the volume Of gold, the ups and downs
Of the geld reserves Of the banks not
I 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 fex-
Ifble so as to conform TO the demands
/ Of business. yet we are told in the same
I breath that business must be made 70
Iconform 10 the volume Of gold
/ To conform the volume Of currency
to the demands Of business would seem
j to REQUIRE the issue OF enough currency
TO permit the exchange Of the products
i of labor free from the evils Of striu-
/ Rency or imitation. If production IS IN
creasing and the exchanges TO be ef-
/ feeted multiply, 1t would seem that
] The currency should be increased 50
that the demands for each dollar would
not grow. If those demands do grow,
If competition for the dollar becomes
more active, the dollar viii grow dearer
and prices viii fail. So the flexible cur
lrencv that conforms with the demands
4 Of business must grow with business,
# must 20 on increasing with POpula-
tion and trade. This kind Of flexible
currency we are told we need, but we
are told shat Il must conform TO the
volume Of gold as wei as the demands
Of business, and 80 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
10 the volume Of gold means that II
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 bust
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
gold 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 viii exchange more
Ooodsand 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 10 the demands
Of business. And 50 a currency that
must conform to the supply OF colo
must be flexible TO the supply Of gold
I the demands Of business viii be feE
ibIe to 1t, not II TO the demands Of bust
ness.
This sort Of flexible currency tn
Bank Of England gives to England i
regulates its notes and its credits b!
its gold reserve. When that reservu
runs down II contracts its loans, con
tracts business, makes business con
form to its stock Of gold. And IT force
a contraction Of business by calling
! lloans. by forcing men to realize Of
their products and so forcing dow
3 prices and the volume Of business don
which in turn has its effect on the vol
: unie Of business for the pulling down o
Z prices undermines the profits Of enter
prise and leads to curtaiIed PrOductiO
The result Of such action is to discOuI
age imports Of products into Grea
: Britain and 50 check the demand 70
: gold for export while the higher interes
rates forced by contraction and th
Increased exports stimulated by fOrcin
: prices lower tend TO bring gold bac
. again. And with the increase Of gol
= comes expansion, with expansion come
a rise in prices which invites increase
imports until al last gold exports agai
result and the bank puts on the screw
OF contraction TO stop that export. Thu
II is that the volume Of currency
made to conform TO the gold reseT
Of the bank, Of trade, is made TO col
form to the volume Of gold.
This conformation Of the value
business to the volume of gold is WIZ
our currency Ieformers would tram
plant to America, yet they tell rs thu
our need is a flexible currency, hexib
. to the demands Of trade, and that tn
they. propose TO give Us through tt
medium Of a banking currency. 1t
nothing more nor less than to tell I
that what we need we cannot have Ii
: less the production Of gold conform
, 10 the demands Of business. And Wi
gold the basis OF all exchanges, vii
The volume Of currency and credits re
ulated by the volume Of gold, with Il
supply Of money thus rigid and the d
=. mands OF money changing with the pr
ductfon OF wealth, the value of busine
win be made TO conform TO the supp
- I Of gold. As the currency cannot be ma
to conform to the demands for none
=. the demands Of money must be ma
10 conform to the supply. as the Gu
ranev rannof he Increased with a gro