II. BY M. W. HOWARD.
The term, “a standard of value,” so often used, is erroneous and misleading. There can be no fixed standard of value, and the student who wishes to delve into our financial problems should clear his mind of such a fallacy at the very threshold of his investigations.
Money is a commodity; it is regulated by the same laws of supply and demand which regulate the price of corn, cotton, wheat, land, labor, etc. If the wheat crop is short, wheat will be dear; if abundant, it will be cheap. So with money. If the money supply is not sufficient to meet the demands of business and commerce,—if the money crop is short, in other words,—the money will be dear; it will command too high a price, its purchasing power will be too great.
On the other hand, if the money supply is abundant, sufficient to meet all demands upon it,—in other words, if there is a bountiful money crop,—it will be cheaper; it will not have such a large purchasing power; it will be worth less when measured by our labor, our lands, and the products of our labor.
I oppose the single gold standard because it makes the money crop short, gives us a small circulating medium, and hence enhances the value or price of money.
We have a certain demand for breadstuff, which is constantly increasing as our population multiplies; suppose that we cease producing corn, and find no substitute for it, would not the price of wheat be greatly enhanced, providing there is no increased wheat production? So with the money supply. There is a certain demand for money, ever increasing as population grows. How shall we meet it? By producing more money, or by destroying one-half of that which we now have, by eliminating one-half of the base of future supplies of money?
The latter is now the policy of this government, and as a consequence the price of gold has been greatly enhanced, and its purchasing power has increased each year, and will continue to do so.