The sun., 1900-10-06
oUANrITATIvE THEORY or HONEY.
Discussion By Secretary Gage. Prof. john
son and Director Of the Mint Roberts.

| WASHINGTON, Oct. 5.-An interesting dls-
| o'ssion took place tonight before the WASH
lneton Economic Society, the subject being the
ouantitatlve Theory OF Money" and the speak"
| ers were Secretary Gage Prof Joseph french
Johnson OF the University of Pennsylvania
and Director Of the Mint Roberts. After the
leading speeches a general discussion took
place. among those participating being Prof
Mead, Prof Farauhar. Prof. Peters and Prof
Neale OF the Catholic University.
Secretary Gage opened with a description
Of the nature and evolution Of money. pointing
out how early theorists invariably based its
value upon its quantity. He analyzed the
theory OF money as presented by the classic
school,. Of which Mil Is the leader and showed
how the modern credit system compelled a re-
statement OF the monetary theory 1t could
no longer be held that prices de-
pend on money supply, for numer-
Gus other Influences and circumstances
entered into the problem and affected the value
OF money. lie showed how credit Instruments
did most OF the worlds business and pointed
out that credit was therefore factor in making
prices more important even than money. The
rapidly OF circulation was also factor which
must be taken Into account. In conclusion
the Secretary summarized his views by de
claring that In his opinion there was "A definite
relation between quantity and prices. II was
impossible 10 say that this relation was fixed
and unchanRing, for the proportion Of ex-
changes performed by credit Instruments was
capable Of indefinite increase
PROT, johnson criticised the opponents OF the
quantitatiNe theory of money, holding that
their claims that the quantity of money was of
little Consequence and lallacous. Credit, he
said. could not be properly called a substitute
OF money, but simply a device for making
money more efficient lust as a lever increased
the efficiency OF gravity. Under the present
system each dollar was capable Of performing
exchanges amounting To $40. consequently the
qlanllty was Of great importance for any
dlmlnutlon in the supply Of money would re-
duoe the amount Of business done on credit.
MI Roberts took the ground that the more
money IN circulation the less its purchasing
power put when the quantity went beyond a
reasonable amount then industries were stim-
ulated until overproduction ensued and crash
followed The efficiency OF a country's business
money. had much 70 do with
the relation between the volume OF It's
Circulation and prices In a country where
banks were not used. where all transactions
were consummated In money, and where each
individual when he had made a sale kept the
cash proceeds about him until he spent IL, the
snlcienoy OF money was so low that a much
larger stock was required 10 maintain banks
AZ gwen level than in a country where prices
used.
He treated on the relation OF credit to the
Quantitauve theory. and said II was the greatest
and most variable factor In prices He COM
batted the greenbacker theory Of an unlimited
supply or money by showing how such n supply |
would cause first. an era OF imitation and pros
perlty and then depression and finally rlin