Franklin H. Head, of Chicago (business man): “That an increase in the quantity of money reduces prices, and a diminution lowers them, as stated by Mill and other economic writers, is the most elementary proposition in the theory of currency, and without it we should have no key to any of the others.”
Amasa Walker, of Massachusetts: “Other things being equal, the amount of currency in circulation determines the prices of everything that is for sale; and these are increased or diminished as the volume of the currency is increased or diminished.”
A. B. Hepburn, of the United States Treasury (Forum, 1894): “When credit is withheld a money stringency is easily created.”
Prof. William G. Sumner, of Yale (“History of American Currency,” page 205): “In 1872 this issue was forced out of between forty and fifty million, reducing a redundancy and enhancing retail prices.” Page 211: “The war being ended, the financial question took this form: ‘Shall we withdraw the paper, recover specie, reduce prices, lessen imports and live economically until we have made up the waste and loss of war? Or shall we keep paper as money?’ Mr. McCulloch proposed to contract inflated paper and pursue the former alternative.” Page 221: “The whole story goes to show that the value of paper currency depends upon its amount.” Page 329: “If, therefore, a nation has a specie currency, a drain upon it by an adverse balance of trade, a foreign payment, or any other similar cause, would immediately produce a lowering of prices and a return of current specie until the natural level was once more restored.”
Prof. Francis A. Walker, Yale (“Money,” page 57): “The value of money in any country is determined by the quantity existing. Its power of acquisition depends not upon its substance, but upon its quantity.... That prices will fall or rise as the volume of money be increased or diminished is a law that is unalterable as any law of nature.” Page 210: “Gold and silver undergo great changes of value and become in a high degree deceptive. Prof. Jevons estimates that the value of gold fell, between 1789 and 1809, 45 per cent.; from 1809 to 1849 it rose 145 per cent., while in the twenty years after 1849 it fell again at least 30 per cent.... When the process of contraction commences the first class on which it falls is the merchants of the large cities; they find it difficult to get money to pay their debts. The next class is the manufacturer; the sale of his goods at once falls off. Laborers and mechanics next feel the pressure; they are thrown out of employment. And lastly the farmer finds a dull sale for his produce.”
Robert Ellis Thompson, M. A., University of Pennsylvania (“Political Economy,” page 151): “The influx of money into a progressive country is one of the most powerful promoters and increasers of production. When it is plenty all sorts of productive work is stimulated. Labor is the master of capital, and industrial enterprise gains a more than proportionally large return for its outlay.” Page 209: “The possession of a large quantity of money enables any country to organize its industries upon such a scale as to carry its division of labor to such perfection as will bring down the prices of all the products of industry, while affording a larger return to both capitalist and laborer. It therefore makes such a country a cheap place to buy in, mainly because of that accumulation of money which was to make everything dear.”
Professor Thompson (“Political Economy”) quotes Thomas Tooke, page 208: “If money has increased, industry and trade are increased.... If iron and cotton are scarce, those who need them suffer by the scarcity, but it has no effect upon the prices of other materials. If, on the other hand, money is scarce, the price of everything else is affected. Every one must make exchanges, just as when the water falls in the rivers traffic is interrupted because the vessels are aground.”
Professor Francis Bowen, Harvard (“American Political Economy,” page 280): “The whole process of exchange may be compared to the process of weighing a well-poised balance, the money and the merchandise being placed on the opposite arms of the lever. Increase the weight on the money side, and the merchandise is sure to rise.” Page 281: “The equalization of money is but another name for the equalization of prices.” Page 244: “The probability of the notes being redeemed at some future day, more or less remote, is not the cause even of the depreciation in the value of paper money, ... but solely on the relative amount of the currency compared with the needs of business. How great are these needs? Commerce needs money or currency enough to enable it to perform its peculiar function; that is, to make the prices of commodities in the home market equal or as nearly equal as possible to the prices of the same commodities in foreign markets.” Page 245: “If there is only $100 to buy flour with, and only ten barrels of flour offered for sale, the competition of buyers and sellers must fix the price at $10 a barrel. If there was twice as much flour, the number of dollars being the same, the price must be reduced to $5. On the other hand, double the quantity of money; there would be $200 available for this purpose, and, as at first, only ten barrels to be sold; the price would rise to $20 a barrel.” Page 301: “The general principle is that the value of money falls in precisely the same ratio in which its quantity is increased. If the whole quantity of money in circulation was doubled, prices would be doubled; if it was only increased one-fourth, prices would rise one-fourth.”
President Steel, Lawrence University: “The conventional unit of lineal measure must not be a line which averages a foot, though it may be fourteen inches to-day and nine inches to-morrow; for the same reason it is desirable that the unit of value should have the same purchasing power next week as it has now.”
Prof. Francis Wayland (“Elements of Political Economy,” page 297): “If there is more money in a country than is needed for its exchanges, the price of goods is raised and it is sent abroad for new purchases. If there is a scarcity of money in a country, the price of goods declines, and money comes in from other lands to be exchanged for them.” Page 298: “If money is abundant because business is stagnant and exchanges are few, it is a sign of adversity rather than of prosperity.”