There need be no haste in refunding the public debt at the rates now proposed and considered low. Unless the progress of the commercial world in the policy of contracting money by demonetizing silver is checked, bonds bearing a much lower rate of interest than any yet offered will be gladly accepted by capitalists here and in Europe. When the money stock is diminishing and prices are falling, the lender not only receives interest, but finds a profit in the greatly increased value of the principal when it is returned to him. A loan of money made in 1809, if repaid in 1848, would have been repaid with an addition of 145 per cent. in the purchasing power of principal and interest, besides all the interest paid. Those who have loaned money to this Government since 1861 have already received nearly as much in the increased value of their principal as in interest, and all the probabilities are, in respect to the four per cent. thirty-year national bonds now being negotiated, if they are redeemed in gold, that more profit will be made by the augmentation in the value of principal through interest. Indeed the signs of the times are, that the bonds of a country possessing the unbounded resources and stable institutions of the United States, payable in gold at the end of thirty years without any interest whatever, would, through the increase of the value of that metal, prove a most profitable investment.
All the facts of the situation to-day fully bear out the statements I then made.
So determined are the advocates of the single gold standard in defending the wisdom of its maintenance that facts whose existence would at ordinary times be readily admitted, are, during a discussion of the money question, pointedly denied. For example, within the past few weeks we have seen in various eastern newspaper contributions from prominent writers taking direct issue with the advocates of silver as to the prevalence of general distress throughout the country. They declare that there is no such distress, assert that they have looked for it in vain, and derisively inquire where it is.
Perhaps the best authority I can cite in response to this inquiry is the principal commercial daily journal of the east, the New York Journal of Commerce, itself one of the most ardent and uncompromising advocates of the gold standard. In an editorial article in its issue of January 11, 1890, that journal said:
FAILURES IN BUSINESS.
The public have been startled by the announcement that during the year 1889 there were 11,719 business failures in the United States, against 10,587 in 1888 and 9,740 in 1887. The estimated liabilities of last year's insolvents were $140,359,000 and the assets were $70,599,000, against $120,242,000 liabilities and $61,999,000 assets for the failures of the previous year. Thus the failures in 1889 were more in number and far greater in liabilities than for 1888, and the proportion of assets to the obligations shows that the total insolvency was more disastrous. Why in a season of profound peace, with no blighting frosts or withering droughts, and the most abundant yield from the field, forest, and mine so many in business have gone to the wall, no one seems able to answer. Many have tried their hand at a solution of the problem, and not one, as far as we can discover, has satisfied even himself with the result of his investigations.
HAS SILVER FALLEN?
In order to ascertain whether silver really has or has not fallen in value, it is necessary that all the facts be taken into account and the situation looked at from a correct point of view. If a person be seated in a boat that is headed to the stream and wishes to test whether or not he is making headway he must keep in view not the stream, but the shore. The occupant of a railroad car who observes a moving train on a contiguous and parallel track, frequently thinks his own train at a stand-still, when in fact it may be in motion.
Whenever a rise or fall appears to take place in the price of any one article or commodity, that is to say whenever a difference takes place in the relation which that article bears to money—all other commodities remaining unchanged—such difference must naturally and properly be attributed to changed conditions affecting the commodity, and not to a change in the value of money. But wherever there is a fall in prices throughout the whole range of commodities then it is clear that this change is mainly due to a change in the value of money. Such however is the force of education and habit that the masses of the people are slow to suspect any change in the standard by which they have been accustomed to gauge or measure all values. Indeed they find it difficult to understand how under any circumstances any change can take place in it. Having their eyes fixed on the standard, and on that alone, they naturally attribute to the articles measured, and not to the standard, any difference that may seem to arise in the relation they bear to each other.
But the apparent is not always the real. Nothing seems more warranted by the evidence of our senses than that the earth is a stationary object, while the sun revolves around it. For thousands of years the world was convinced of the truth of the geocentric theory of the universe, and millions of men have lived and died in the confident belief that this planet was immovably fixed in space, while the sun was a rolling and ever-shifting body. Even yet, among the mass of mankind, so ever-present is this impression, derived from ocular demonstration, that in spite of the declarations of science, the world continues in common use the phrases which originally described the process that took place, as men understood it; hence we speak of the "rising" and the "setting" of the sun. In the same way we speak of the rise or fall in the value of commodities, without being particular to note whether the change that has taken place is strictly a change in the value of the article itself or a change in the money with which its value is measured. Perhaps I can best illustrate my meaning by an allegory: