The independent. [volume] (Lincoln, Neb.) 1902-1907, 1903-11-19

coins were overvalued more than twice
and the silver coins nearly three
times. To maintain this generalization
the gold and silver coinage must have
been limited, otherwise the coins
would have failed to retain in the ex-
changes the generalization conferred
upon them by law"
AS in point of fact they did retain
this overvaluallon, it follows that the
coinage was limited, and that the val
lie Of the coins depended upon their
numbers.
The following extract is from a
pamphlet entitled Business Without
Gold,' by Michael Tnurscheim: Dur
ing the financial panic of 1857 the av-
erage prices OF cotton, iron, wool, silk,
-four and other staple goods in Lon
don, went down 81 per cent within two
weeks" Now, you certainly do not
believe that the cost of producing all
these goods suddenly went down n
per cent and soon after went up again?
You will not even contend that their
supply, or the .lantity required for
the peoples use had suddenly under
gone such f1uctuation. There can be
no doubt that what really happened
in this case was that the medium of
exchange, money, had suddenly be-
come exceptionally scarce, and it's val
ue had appreciated, a circumstance
which can only find its expression in
"a fall of prices" This was an ex-
treme case, which clearly showed the
real nature of our price fluctuations;
htrf fn1 i'm, 80 III ot1r.
as truly the operations of the law of
gravity as mountain slide does, So
If this sudden fall of II per cent was
clearly due to the change of the value
standard of gold-the daily trifling
changes are mostly owing to the same
cause.
Here is an extract from Lombard
Street." by Bagehot: 1T (money) is
commodity subject to great fuctua-
lions of value and those fluctuations
are easily produced by slight excess
or a slight deficiency of quantity. II
the dominant banks manage i'll the
rate of interest will at one time be ex-
cessively high, and at another time be
excessively low: there will be first
pernicious excitement and next fatal
collapse. But if they manage well,
the rate of interest will not deyiate so
much from the average rate; it will
neither ascend so high nor descend so
low. As far as anything can be steady
the value of money will then be steady,
and probably in consequence trade
will be steady, too-at least princi-
pal cause OF periodical disturbance
will be withdrawn from it,
Political Economy" (Bascom):
Even irredeemable paper might
within the limits of single country
have circulation IL its quantity were
by arbitrary power so limited as 10 be
kept constantly within the demand"
John Stuart Mill says: THE rate of
interest will be such as To equallze the
demand for loans with the supply OF
them. IL will be such that exactly. as
much as some people are DESTROYS to
borrow at that rate. others shall be
willing 10 lend. II there Ia more of
fered than demanded. interest will
fall: IL moro Is demanded than of
tcred. Il viii rise; and In both eases.
10 the point NJ which the equation az
supply and demand II established"
These quotations all harmonIze with
my idea that a scientific money sys-
tenn can be based upon the rate of ln-
terost and II space admitted could
ind enough bearing on the subject to
mako Il very monOtonoua reading,
even for those most interested.
JAS, 3. PATTON.