The Washington times., 1901-10-24

! dDunudnCe OF SCanllnSSS OF tne supply
| is a matter of prime Importance. The
worlds economic history proves that
| whenever the supply Of money has been
abundant business conditions have gen
| orally been favorable. and the progress
| of the human race steady and rapid;
While on the other hand scant and Ii
| minismng supply of money has been
ever accompanied by hard times and
retarded progress.
Nor is this a mere coincidence. The
| caUsal relation is perfect and easily dis
cernible. When the supply of money is
insufficient to keep pace with the re-
quirements of business. its exchange
value increases: that is to say. the
value of other things is less when eX-
pressed IN terms of money. 1t takes
larger quantity of hay or grain or cloth
or any other product 60 equal a given
amount of money. Plainly and simply
expressed, prices fall. The profits of
legitimate business shrink and perhaps
entirely disappear AS a result only
those whose wealth is chiefly in the
form of money or obligations payable
in money can thrive, and their prosperi-
ty is at the expense Of the toilers and
producers. 1t is production that
creates the worlds real wealth, and
when productive industry is checked it
means a halt, or at least a slackening
of the pace in the onward march of inn
provement.
Between the middle period of the Ro-
man Empire and the discovery of
America there was but little of either
sold or silver mined in the Old World.
\ large portion of the period is known
in history as the Dark Ages" The
opening of the silver mines Of Mexico
and Peru changed the whole face of Eu-
ropean affairs, borh political and com
mercial. Then it was that conditions
We're created which made 1t possible for
the slavish peasant 10 earn money
enough 10 lift him out of feudal bond
age and begin to walk erect as a man.
The progress OF Europe WAS greater
during the one hundred years imme-
diately following the beginning of the
gold and silver influx from America
than it had been previously in a thou
sand.
During the first half of the last cen
tury the supply of the precious metals
again became distressingly shcrt, and
business was stagnant and depressed
the greater part of the time on both
sides of the Atlantic. The gold fields of
California and Australia were found,
and once more the sunshine OF pros
perity came. From 1850 TO 1873 was lit
orally the halcyon period of the worlds
Industrial history, despite the fact that
there was now and then a panic pro-
duced by local or special causes
With the year 1873 another period of
depression set in, which, with only tenn
porary reviyals, lasted until 1896 in Eu-
rope and 1897 in America. What took
place in monetary way in 1873 and
subsequent years. students OF political
economy fully understand Silver was
generally demonetized by the leading
commercial nations, and the worlds
business was adjusted to gold alone,
metal then diminishing in annual sup
ply. The effect was the same as if there !
had been a sudden and heavy falling off /,
in the output Of the mines. 1t is note |
worthy that the revival in 1867 came !
only when, through the discoveries in /
South Africa and elsewhere, the gold /
supply had been increased sufficiently |
to make itself felt throughout the busi |
ness world. 1t was first apparent in |
England and Germany, but necessarily |
the effect was soon extended to Anieri- |
ca. 1t could not be otherwise, for as
soon as Europe became more prosperous
it increased its purchases of American |
goods. thus improving conditions here. !;
At this time it may be a question
whether the supply of gold is fully
keeping pace with the requirements OF
business. The outbreak of the Boer war
cut off nearly one-third of the worlds
yearly output The effect was at once
felt in all of the great money centres,
but less severely than ii otherwise
would have been, by reason of the fact
that the production was at the same
time increasing throughout the rest of
the world. The resumption of work in
the Transvaal mines (when it takes
place. will soon add largely to the sup
ply of new gold, and it will certainly be
felt in a business way. But that time
may still be considerably delayed. and
therefore we should welcome substan-
tial additions from other sources, par
ticularly from the mines of our own
country, for, aside from its effect upon
the money supply, gold mining is an
important industry.