The sun., 1910-05-03
rHE RISE ~ PRICES.
Tne Dgunana EoF6;ssa. 90 Ven ~ the supply.
Must Ne CunuiaeFed.

To rHE EntroE ~ THG SrV-Sir. "
John Mile quantity theory Of prizes is 10
ne -disturbed- By such reasoning ~ Pro-
feusor IanEhlin's u ts little wonder that. a.
Mr. Gladstone once said. political economy
has been relegat-d 10 saturn
ArrardinR 70 your article On the subject.
,hls IL the hasis nom vhich Mr.. i.auRhlln
rejects the theory NJ . present inhaiion. a
gold imitation true. bui no less inhstioR. ""
says the great recent production -is not 90
large w proportion to the total stock Of gold
In the World - was the nsu Fold from isyS
10 Isss 20 the total stock IN 1873: yet IN the
earlier period there we're falling prices and
N the latter rising
I thought the most rudimentaFy theory
OF economics IL that prices are regulated
hy supply: true. bot by demand also. There
la not one word In Mr.. l.auGhlins aTRument
a. 20 the ds,nand for gold during these
periods. Ireland dFinEs Nhiskey and Eng
land beer does any one snggest Ihat II
every Rriton took - Shiskey. even u
the production Of whiskey increased its
price uolld not Tise3 And 20 With sold
sfter 1878. The United States almost a.
onte resumed aperte pAymenia IN gold ana
beca me en- omntvorous eusi ofner Tor the met
Al Thn demand. did u stand alone. would
equivalent In Ne effect on the world's com
modify prizes 70 the discovery Of the South
African gold hsld But u did no, stsnd
s9S sSS A.s sIsaS 10 cSsnSS Ssr @sss % ., siysr
for gold -coYe Of netions hftpeen 1873
and isae hegan % acramhle for aold. Russia
housht colossal AmopBts fog her var chest
sdSp, "a : rold s,sndsyd. Snd JSpsa followed
suh Nations uhich had been IN q hasis ~
inoonveTtihle paper and had never ssen
Rold coin acquired brand new gold cur
,s.Siss s1S 70, on ir.'. .S GSd .I, ?, rinSs
cold night for which half a dOnen men
acrar hled
is il any wond.r tha, an irrirating ditch
sTics Toe sstsr failed Of hs flnctISnP h !,
any wonder that gold appreciated hftween
1878 and is1S and prices fellf
Rut hrtween ieos and iaiO the annual
prodir tion of gold has far more than dOp.
bled. and recall no nation which pFevi iously
IN q paper basis has resumed specie nay
ments In gold. nor has any nat Ton since
teaA gone from q silver currency - q Rold
currency NJ. iaughlin writes ~ the tariH
and the trusts a. tributary ~ the rise 0f
price,. hut In England since isaa we have
had no tRrin Or trust exubeFances. and vet
our pricer have risetl fully a. n1urh a. yotiru
ME. SaueFbeck's -tndet number- for July.
leading commodities being iO0 for the
eleven years ihe7-I1i. vas 617. fOF lasi
month March. 5s.i. or a rise since tsos of
~ per cent.
10 c0nciude trom lH9 70 isse Ne had
huge fal ~ prices because Of Wholly alb
normal demAnds Atnse inaa while the de-
mand for Rold has been normal. hs supply
has be~n very eSceasive. Nsare 10 cOBtinWe
~ least for further quarter ~ q century 10
no earthly doubt that the index num-
lrer. now seventy y-nine. Nill advance 70 t0n
IL safe N this case to -prODhesy before
yen know
money. ~ eHect on wages and prices. has
become n supreme Importance not -
legislators chiefly hut IN every business W..
teTest. and n h deploraole that q stat smeBt
terpoaed - further pernlex public opinion
MORgIoN FhRwEN.
NEU YoRE. April ~.