The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1910-03-09
Gold Depreciation and Higher Prices

oV per cent more tnan the total pro-
duction for the preceding four hun
dred years. This continued increase
In the supply is not only rapidly de-
creasing the purchasing value of gold
but is also causing the present far
reaching economic changes in all
countries subject to the so-called
gold standard of value.
AS the value of gold does not nomi-
nally change, the average person il
very apt to fall into the error of as
suming that gold disobeys the econo-
mic law of supply and demand by
remaining constant in price; but by
comparing gold with the products Of
human labor, which are measured by
the gold standard, 1t will be found
that the purchasing power of gold has
greatly decreased. Corn, which in
1896 was worth 21.5 cents per bushe
at the farm, advanced to 35.7 cents in
1900, while in 1909, notwithstanding
the fact that the crop yield was the
second largest on record, the price
averaged 62.2 cents per bushel.
Since gold Is the standard of value,
or Of deferred payments-the so-call-
ed unit being 2S.21997 grains contain
ed in a dollar--it follows that value"
Is simply ratio between gold Call
forms of credit being contingent upon
gold reserves) and commodities. Hence
the general average price of corn, cot
ton and all other products or COM
modities must necessarily continue to
advance so long as the worlds produc-
ton of gold maintains is present un-
usual rate of increase.
The primary cause of the remark
able increase in gold production may
be attributed to the discovery that a
dilute solution of potassium cyanide
is rapid solvent for natural gold
Although the cyanide process, which
made possible the almost complete
recovery of gold, was patented in
England as early as 1887, by Nc
Arthur and Forest, 1t was not general
ly applied until early "nineties" I'M
provements In mechanical mining and
the discovery of new deposits were al
SO contributing causes 20 the general
increase in production. China Is
known to be very Itch in undeveloped
gold deposits, and II is very probable
that the regeneration Of that country,
which is now taking place, will be
coincident with large output. Japan
Is making extensive preparations for
the exploitation of the Korean gold
fields. Taking into consideration,
therefore, the new mining operations
throughout the world, the probable
discovery of additional deposits in
America and the likelihood that the
numerous deposits of low gold-bear-
ing sands will soon be made available,
there seems to be every prospect for
q continued increase in the worlds
gold production and consequent
further depreciation .n the standard
of value.
A depreciating standard causes o
temporary disadvantage, because the
price of finished products" and wa
ges of labor do not advance relatively
as fast as the cost Of raw material"
and food products; this consideration
is now causing period of hardship
for mill owners and mill workers du-
ring the process of adjustment. In
the cotton industry the process Of ad-
justment has become more pronoun-
ced. by reason Of the short crop yield
which confronts the spinner and
weaver with the absolute necessity
of making an advance in selling
prices, in order that cotton may be
again manufactured on an equitable
margin of profit.
The situation is further compli-
Gated by the fear that whether the
absolutely necessary advance in
prices be accomplished by 'curtaIl
ment' or by so-called "gentleman's
agreement" it may, in the present
unenlightened condition Of the popu-
lar mind, be exploited unfairly by the
importers and so-called insurgents"
to the detriment Of the protective
tariff on cotton goods. The first step
toward dispelling the existing uncer-
tainty which envelops the cotton in
dustry should be that Of forming
clear conception Of the principles in
volved and gaining a popular recog-
milton OF the inexorable economic
changes which have forced q perma-
nently higher level in the prices Of
all raw materials. II must be borne