It may be, therefore, that in the time that is now before us we shall have better chances for a practical war upon this system than we have had hitherto. As long, however, as I can remember, and as long as I have had any share in it, we have got along without any encouragement in it at all. We have done what we could without that. We got so we did not expect it. We knew that we should be neglected and treated as persons whose opinions in these matters were not of any importance or worthy of any attention, and so we went on and kept up our arguments, as we considered them, to the best of our ability and without very much result.
Now, it may be that we are on the eve of a different time, when the circumstances will be more favorable, more hopeful, more full of opportunities, and I certainly, for my part, most profoundly hope that that is so.
I have noticed with some discouragement the efforts that Mr. Williams has made on the floor of Congress to get some modifications of the tariff made, or some argument even opened up there that might give the matter activity and life in the legislative domain. They did not seem any more encouraging than what we used to see in the old times. But it is certainly in the nature of things that the difficulties and absurdities of this system must come out in practice more and more distinctly as we go on, and the need for reform will therefore force itself in the shape of a play of interests that will bring new and counteracting forces into operation to which we may look for help in the overthrow of the system.
PROSPERITY STRANGLED BY GOLD[35]
Some of the silver fallacies were stated by Mr. St. John, in his address before the silver convention, with such precision that his speech offers a favorable opportunity for dealing with them.
He says that “it is amongst the first principles in finance that the value of each dollar, expressed in prices, depends upon the total number of dollars in circulation.” There is no such principle of finance as the one here formulated. The “quantity doctrine” of currency is gravely abused by all bimetallists, from the least to the greatest, and it is at best open to great doubt. When the dollars in question are dollars of some money of account which can circulate beyond the territory of the State in which it is issued, the quantity doctrine cannot be true within that territory. It may be noted, in passing, that this is the reason why no scheme of the silver people for manipulating prices in the United States can possibly succeed. Silver and gold will be exported and imported until their values conform throughout the world, and prices fixed in one or the other of them will conform to the world’s prices, after all the trouble and waste and loss of translating them two or three times over have been endured.
The quantity doctrine, however, means that the value of the currency is a question of supply and demand, and everybody knows that to double or halve the supply does not halve or double the value, or have any other effect which is simple and direct. If it did have such effect speculation would not be what it is.
Mr. St. John goes on to argue that our population increases two millions every year, on account of which we need more dollars; that the production of gold does not furnish enough to meet this need, and that, therefore, prices fall. This argumentation is very simple and very glib. Prosperity and adversity are put into a syllogism of three lines. But, if we can avert the fall in prices and adversity by coining silver, it must be by adding the silver to the gold which we now have. “High” and “low” prices are only relative terms. They mean higher and lower than at another time or place; higher and lower than we have been used to. If misery depends on ten-cent corn we are advised to cut the cents in two and we shall get twenty-cent corn and prosperity. Corn will not be altered in value in gold, or outside of the United States, and, as all other things will be marked up at the same time and in the same way, its value in other things will not be altered by this operation. When we get used to twenty-cent corn it will seem just as low and just as “hard for the debtor” as ten-cent corn is now. Then we can divide by ten and get two-dollar corn, by adding free coinage of copper. When we get used to that we shall be no better satisfied with it. We can then make paper dollars and coin them without limit. Million-dollar corn will then become as bitter a subject for complaint as ten-cent corn is now. The fact that people are discontented is no argument for anything.
The fact that prices are low is made the subject of social complaint and of political agitation in the United States. Prices have undergone a wave since 1850. They arose until about 1872. They have fallen again. They are lower than they were at the top of the wave all the world over. This fact, the explanation of which would furnish a very complicated task for trained statisticians and economists, is made a topic of easy interpretation and solution in political conventions and popular harangues, and it is proposed to adopt violent and portentous measures upon the basis of the flippant notions which are current about it. But what difference does it make whether the “plane” of prices is high or low? If corn is at forty cents a bushel and calico at twenty cents a yard, a bushel buys two yards. If corn is at ten cents a bushel and calico at five cents a yard, a bushel will buy two yards. So of everything else. If, then, there has been a general fall, and that is the alleged grievance, neither farmers nor any other one class has suffered by it.