Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1908-12-12
THE HARD TIMES MYSTERY.

1t is not difficult to understand pros
perity. a fertile soil, q good climate.
temperate and Industrious populations,
sufficient capital, numerous manufac-
tuners and mines, great railroads
these and other well known conditions
In this coInsry especially serve suttl-
GENTLY to explain any kind OF prosper
ity, however intense or unbounded 1t
may be. Tho solution Of hard times.
on the other hand is far less easy
1T is known, for instance, that an in
creased supply Of money in clrcula-
tion tends to lessen prices by cheaper
ing money, the reverse is OF course
true. and prices rise, when the supply
OF money in circulation grows less. "A 1t
has therefore been concluded that an
Increase In gold production will In
crease the supply Of money through
It's influence on financial and CONNER.
cial markets and will result in an m
crease in the bank reserves. This. in
turn. results In an expansion OF credit,
thus increasing perhaps many fold the
availability of the money or reserves
ON hand in banks. When this easy
credit leads to a heavy increase OF
speculation, however, as 1T not infre-
quently does, there ensues boom
followed almost invariably by reac-
ton, which may amount to depression,
hard times, and even panic.
The production of gold has increased
considerably in recent years. a total
of 1883, $40 was extracted from the
worlds gold mines III 1887; the output
rose to S412. 556.136 in 1907. During the
same interval the index number
giving an average of prices for selected
commodities. rose according to Sauer-.
becll's system of computation. from 81
to So and according to the London
Economists from 1,ss5 to 1901.
1t thus appears that prices rose with
an Increased gold production: but was
this the real cause of the rise?
In recent issue Of the Engineering
and Mining Journal W. r. ingalls,
takes issue with the theory that the
Increased production OF gold WINS the
cause, in any marked degree. Of the
observed enhancement Of prices. He
says:
population and the production of the
necessaries of life may increase in tho
same ratio as the production of gold,
SO that the latter merely supplies the
increased requirement for it, and under
that condition will not influence prices
one way or the other. Industrial
changes III processes of nanuracture.
means of transportation and many
other conditions may effect prices so
that the average of the latter Will go
down, While the production OF gold goes
UP, or vice versa. The crises os 1879
and 1890 We're each followed by several
years of severe commercial depression,
but in each case while prices were
failing the production of gold was IN
creaSing.'
These various factors, as well as the
mere increase in gold. are to be taken
into consideration in accounting for the
| rise in the price accommodates. Mr.. In
gals shows, further that after the cri-
| sis in 1857, the prices for commodities
rose steadily until 1864, while. the pro-
| tuction Of gold was going down. Prices
then declined until 1870 while gold pro-
| duction was declining. Prices then
fell steadily until 1879, while gold pro-
duction was increasing. After a slight
rise in prices in 1850. the decline was
resumed, and this time conceded with
a declining gold production began To
rise which has continued with only
slight Interruptions ever since, while
the decline in commodity prices kept
on until 1895.
! H6 therefore concludes that from 1855