New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-10-12
REPLY TO PROF. FISHER
Overproduction of Gold Not the Cause
of High Prices, It Is Stated.
70 the Editor OF The Tribune.

To the Editor Of The Tribune
Sir: The letter of Professor Fisher
Of Yale University, published in this
mornings Tribune and his former one
eliciting your editorial referred to have
read with interest.
AS business man Of many years ex-
perience II seems to me that the theory
OF overproduction of gold as cause OF
advancing prices Is not fact. On the
other hand, there are several causes TOT
high prices which II is useless to men,
ton in this connection. However, l WISH
to state as instances Of my contention
two articles of staple consumption, nour
and sugar: while being under the same
basis OF exchange-gold-the price to-day
is both 30 per cent below the prices IN
1856 and 1857.
In 1856 | was with a Touring concern
in Troy, N. Y, who sold hour (oest
but not Of as good quality as is MADE
to-day at 81 30 per barrel. now % 20. In
1851 / was, with a wholesale grocery
house In New York City when graduated
sugar sold at IN cents per pound. whole
sale-now at cents per pound. Coal
another staple. in 1889 was 81 per ton.
Within two years now past 1t was at 70 70
per ton retail-now again higher.
This seems to me to thoroughly upset
the theory Of seigniorage or OF any tink-
ering with the recognized values OF our
universal exchange medium by any proc
ess OF seigniorage or Of amortization.
Pardon me for instancing another IL
Illustration of rise Of prices 1t is one OF
disturbance to our natural avenues VI
supply and demand which has hitherto
been natural, but Is now largely under
artificial control without any properly
regulated digestive function applied Tor
their regulatlon--that Is, they are no"
largely controlled by inexperienced ana
also uncontrolled factors who have not
yet digested the laws of supply and de-
mand, and who do not know the require
ments thereof, but who arbitrarily controi
most all supplies to their own advantages
without considering the economies which
rule the laws OF supply and demand.
When those laws are tempered with
In any way, whether by aruheiai factors,
such as the trust, or by Ignorance i
the country's needs. prices VIII nuctaate
without regard to the standard measure
OF values upon which all prices are
based. The medium Of exchange. II OF
universal recognized value, has no controi
over them. It Is only perceived In cases
among others Of local depreciation OF
intrinsic values by heaping obligations
upon them OF no intrinsic value, but
which add to the costs OF product'on
wherever those obligations are met pro"
ylded that no other cause intervenes 10
obstruct the natural law OF supply ana
demand In determining prices.
We rarely see gold in circulation, and
there Ia no difference In exchange values
between II ard all our circulating paper
medium OF exchange-one Is conVeruDie
into the other without premium or as
count Gold as the representative or
values the world over is the staple meas
ure OF exchanges in the absence OF de-
preclatIng local causes herein noted.
II We arbitrarily add the value OF any
quantity OF grains TO gold dollar we
necessarily add TO the present dohar
intrinsic worth by the same amount OF
we rob those who hold IL OF ike value
AS TO cost Of living. prices must be In
creased to keep pace with the cost OF
Therefore, II production re-
ouires costs OF dividends TO be paid upon
watered securities pledged to create such
production the prices VIII. must be
greater.
once more: Trust.made prices are who'll
IL arbitrary and can have no relation
whatever to either the laws OF supply ana
demand the laws OF exchange. or to tar
IN or no tariff, wherein their prices con-
troll markets.
Again. II as free manufactures under
the same tariff laws under which all must
operate. whether trust or independent. l
can sell my products at prices which give
me a fair and satisfactory return, while
II | combine with all others In my line
and advance prices 100 per cent
that advance In no way Is due to the tar
IN. which gave me chance TO make
satisfactory profit under II as a free man
ufacturer, but TO the fact OF the COM
bination alone.
II would seem that the only argument
necessary In the case Is the mere state
ment Of fact, as It is self-evident.
-. ct,, ~ Oct O 1912 NJ. -, 5.