The Black Hills union. [volume] (Rapid City, Pennington County, Dakota [S.D.]) 1889-1904, 1899-06-30
THE VALUE OF SILVER.
Would 1t Have DEPRECATED if
Not Demonetized?
FACTS TO PROVE IT WOULD NOT.

Coinage Would Restore Parity,
This question is frequently asked, and
it is one that should not be answered
in a dogmatic way. Political economy
is not an exact science, and just what
would or would not have occurred I'M
der different conditions should not be
affirmed with too much self assurance,
for there are always some elements of
uncertainty involved. Nor should those
who make the inquiry be too exacting
in their demand for positive proof. In
such matters all we can do is to take
the known facts and endeavor to draw
correct conclusions from those facts. An
attempt will be made to deal with the
question in this spirit.
The first point to be determined is,
what is meant by depreciation"
Depreciation means a l~essening in
value or in quality. The equality" of
silver, we know, has not changed.
Whether its value has or not depends
upon what we compare it with. If we
compare it with gold, it certainly has
shrunk in value about one-half. If we
compare it with commodities, it has de-
preciated very little, If at all. An ounce
of silver will exchange for nearly as
many manufactured goods as it would
in 1878, and Of u great export agri-
cultural staples it will actually change
for more. Under normal conditions the
tendency of land is to rise in value be-
cause Of the increase of population. Al
lowing for this tendency, 1t Is probable
that silver has held its own when COM
pared with land. There are parts of the
country where land is actually worth
less, measured in silver bullion, than it
was in 1870. For the proper considera-
tion Of this point it Is sufficiently &C.
curate to say that, compared with prop
erty in general, silver has about the
same exchange value as it had 25 years
ago. If there has been any decline, it is
very small.
On the other hand, the exchange value
i. e.. purchasing power of gold-has
enormously increased. Compared with
silver, it has nearly doubled. If we con-
slider those two things alone, it is i'm
possible to say whether gold has gone
up or silver down. We only know that
when we extend the comparison further
and find that gold will also buy very
nearly twice as much of produce in gen
eral we receive new light. Again, we
may say that commodities have gone
down or that gold has gone up, because
value is merely a relative term. But
when we come to consider the cause Of
the change an entirely different ques-
ton arises. 1t is perfectly obvious that
the value of all things must necessarily
be more uniform and stable, less easily
affected, than the value of any one
thing. 1t certainly seems more reason
able to believe that the change has been
produced by some cause peculiarly at
fecting the one thing-gold-than by a
cause affecting the many things-name-
ly, the commodities,
Let us then consider briefly what has
occurred during the last % years, the
tendency of which would be to peculiar
~ affect commodities, gold and silver
respectively. First, commodities. The
advocates of the gold standard attribute
the great fall Of prices to increased pro-
duction. The weakness of this claim
lies in the absence of proof to sustain
it. The theory which underlies it is
that the year 1873, in which the great
decline of prices began, was the begin
ming of an industrial revolution. That
previously production was carried on
by the most primitive methods, while
subsequent years have witnessed the
most startling improvements in mechan-
ical contrivances, with the result Of an
immense increase of production and
consequent ch%eapening. The theory is
plausible, but the foundation is lacking.
Every middle aged man and every
we'll read young one knows that the
great industrial revolution-the era Of
extraordinary inyentions-was between
1910 and 1870. Since the latter year
many improvements have been made,
Of course. but nothing has occurred in
that line of an extraordinary character.
Moreover, improvements in mechanical
processes only cheaper products by in
creasing the quantity. It is not a ques-
ton Of facility of production, but one
Of quantity. The best %attainable rec
ords show that the increase of produc-
ton was very much greater during the
earlier period than during the latter.
AS has been more than once stated in
these columns, from 1850 to 1870 the
annual increase Of production was 2A
per cent; during the latter only a little
over l per cent. Still, between 1850
and 1870 average prices rose some 1S
Or 20 per cent, while since then the de-
cline has been more than 40 per cent.
Such a change is nothing less than as
founding, unless we can find some cause
for it outside Of any mere questions Of
production. Considering that alone,
prices should have risen. We must look
further for the cause.
Let us glance now at the status of
gold and see if anything extraordinary
has occurred with reference to that. Up
to the year 1871 there were Just two
nations Of any Importance using gold
exclusively as standard money. These
were England and Portugal, with a
total population of about 40, 900, 600.
In that year Germany, having demons
stized gold in 1857, resumed its coin
Gge and suspended the coinage Of the
larger silver pieces. This action had
out little effect either upon gold or sill
YER. The mints Of the Latin union and
the United States, as we'll as those Of
some smaller countries, remaining open,
the silver which Germany would other
wise have coined was readily absorbed,
and gold went to that country in lieu
of silver. But early in 1878 the United
States practically demonetized silver
by abolishing the standard dollar. A
little later Germany formally pro-