The Washington times., 1901-08-11

| sary for Mr.. Roberts to state this point,
as he was assuming a case in which the
supply was increasing mare rapidly
than the demand.
Again, the Mint Director says: The
conclusion that an increase in the
| stock of money will permanently AFFECT
| interest rates is, however, mistake
due to a confusion of ideas. An in
| crease in the stock of money will even
tually find expression in a depreciation
| of the value of money as compared
with commodities: but interest is a
| payment in kind, and suffers the same
| depreciation in value as the principal,
! without any reduction in the rate" 1t
may be added to what Mr.. Roberts says
! concerning interest rates that an in
! creasing stock of money, by stimulating
| business. frequently raises the rate of
| interest by increasing the demand for
! loans. But the main point to which at
| tention is directed is the fact that an
| increase of money will find expression.
| in depreciation of money as COM
pared with commodities. Then Mr..
( Roberts points out how the great gold
discoveries of California and Australia
cheapened money. quoting Jevons to
the effect that the shrinkage was not
less than nine per cent, and probably
fifteen.
Many other quotations could be given.
but It is unnecessary, as the whole arti-
Gle is intended to deal with the question
whether gold is likely to become super
Ii, I
opposed to the sterotyped arguments"
in favor of gold with which the welkin
was made to ring in 1896, and again in
1900. Leading advocates of the gold
standard denied the cumulative theory
in toto, insisting that the quantity of
money made no difference in its value,
and that the value of gold never
changed, because it was intrinsic" In
the monetary debate at the Omaha Ex-
position in 1898, every advocate of the
gold standard who touched the point
at all ridiculed the cumulative theory.
If the value of gold is fixed and I'M
changing because it is intrinsic" it is
a sheer waste of time for Mr.. Roberts
to discuss the possibility of the metal
depreciating through excessive abund-
ance for it matters not how abundant
it may become, its value can never
change, according to gold standard phil
csophy.
But the Mint Director is right about
it nevertheless. The denial of the guam
titative theory was a political denial
not an economic one. The conclusion
reached by Mr.. Roberts is that with the
close of the Boer war the annual pro
duction of gold may easily rise to four
hundred million dollars, and that I'M
less new uses spring up for it, the
metal will be likely to depreciate. These
new uses, he thinks, will be found in
the development of China and other ORR
entail countries now employing silver.
AS yet, though, it may be remarked,
there seems to be no cause for alarm
over the prospective depreciation of
gold The metal did fall in value from
the latter part of 1897 until February,
1900. but no more than enough to rep
resent a healthful and invigorating adj
vance in the prices of commodities, a
condition which always marks period
of business revival. Since the date last
named, prices have been slowly falling
again. which is ONLY another way of
saying that gold has been rising in
value. How II will be if the production
reaches four hundred millions annually
and is long continued at that rate, we,
of course. cannot say, but 1t is safe to
conclude that business will move apace, |
and that there will be no depreciation |
of gold that will make it necessary to |
force its use upon China and other sill |
yer countries in order to save capital |
lists from loss. But We will not go into |
that now.
We will simply remark in closing that |
there certainly is none too much gold |
now, although the production is nearly |
three hundred millions a year. Neither |
Mr.. Roberts nor anyone else whose |
opinion is of any value will claim that |
gold has become superintendent. What, |
then, would be the condition II the out |
put were only one hundred millions, as |
it was in the early eighties? Even as
late as 1886 the production had not in
creased sufficiently to fill the void |
caused by the decentralization of silver, |
for the value of gold was still rising.
Such being the case, it is evident that |
the supply Of gold was not sufficient for
the worlds monetary requirements, and |
the objections TO 1t based upon the
cumulative principle were absolutely
sound. The bimetallic issue would still
be alive and pressing if the supply Of
gold had not increased beyond all ex-
pectations.