The Commoner.
5
JUNE 14, 1907. ,
figures aro very valuable data, from "which it
la possible to deduce important and substantially
reliable conclusions.
Let us be more concrete. Between Jan
uary 1, 1897, and November 1, 1906, the course
of Dun's index figures has been as follows:
Indox
Date i - Number.
January 1, 197... .... ..,.o- ...... 72.5
January 1, 1898.. 79.9
January 1, 1899....- ..-....,......'. 80.4
January 1, 1900 .y.. 95.3
January 1, 1901 95.7
January 1, 1902 . .. 101.6
January 1, 1903,... ..'. ..100.4
January 1. 1904 ; . 100,1
January 1, 1905 i 100.3
January 1, 1906 104.5
November 1, 1906 106.7 ,
Mr. Conant, of course, would probably ob
ject to attaching much importance to these on
the ground that a pronounced advance in some
one or two commodities, as for example wheat
or cotton, would bo sufficient to raise the index
figures, even though the prices of the other com
modities that entered into the index figures re
mained unchanged. Admitting the validity of
such an objection, however, the fact remains
that prices have unquestionably advanced dur
ing the past ten years, and we think it will bo
admitted on all sides that the extent of the
advance has not been exaggerated by the index
figures printed above.
Given, then, a material increase in prices
over a period of ten years, to what extent has
the gold output Increased during the same per
iod? The question is best answered by the
following table, which shows the world's output
of gold from 1896 to 1905, together with the
average annual output for the ten year period
from 1886 to 1895 inclusive:
Average 1886 to Ounces. Value
1895..... 6;591,469 $136,257,528
1896 , 9,820,075 202,998,626
1897 ; 11,483,712 237388,998
1898 '. .14,016,374 289,743,680
18991 . . . , . .,... . .16,220,263 314,630,233
1900 '. . .;.... .12,684,958 262,220,915
1901 .7. . . .12,894,856 266,559,884
1902 . . . .,... .., , . ,M 14,437,669 298,452,606
i9ti&.... ;...;. .v.'.-; 15,778,016 326,159,991
1904 16,739,448 346,034,521
1905 ,18,290,567 378,098,942
1906 (est) 19,372,887 400,472,445
The increase in the output of gold during
the past ten years has simply been unparalleled
in the history of the worltf The value of the
product for the decade 1896-1905 was almost
one billion, six hundred millions of dollars in
excess of that for the decade 1886-1895; that
is, the output increased more than 100 per cent.
Assuming that the figures for 1906 are sub
stantially correct, last year's output was scores
of millions larger than that of the largest pre
ceding year, and veritably hundreds of millions
in excess of that of any year previous to 1896.
"What is more natural, therefore, than to
ascribe the advance in commodity prices since
1896 to the heavy gold inflation? Indeed, in
what other way could the effects of such an
inflation .manifest themselves, for surely such
a tremendous addition to the world's stock
of the yellow metal could not have been without
some effect. To quibble over the question is
idle. There are the facts, and It still remains
for those who have no patience with the quanti
tative theory even in its most qualified form, to
explain them away.
Equally ridiculous is it to contend that
the gold inflation has had no effect on Interest
rates. By pursuing a method similar to that
employed in the case of prices it will be found
that interest rates have also advanced. It is a
matter of common knowledge. Indeed, that, the
gilt edged railroad, municipal and industrial
bonds are selling at the lowest price's In years,
which, of course, means that they are yielding
a much larger net income. But- how could it
be otherwise? Rising prices multiply the op
portunities for profitable investment. Heavy
borrowing thus ensues, with the result that in
terest rates advance, although it Is probable that
the first effect of the gold inflation is a tempor
ary decline in interest rates. Hardly anyone
needs to be told how seriously the mercantile
interests of the country have been hampered
during the past year by the high interest rates..
We anticipate that the reply that might be madj
to thfs is that the demand for money h,as beell
so much larger than the supply that higher in-
terest rates have been inevitable. , But what
brought about the increased demand for money
if it was not the steady advance in prices caused
by the heavier production of gold? As gold de-
predated in value it required a larger amount
to complete a given transaction, which is tanta
mount to saying that the demand for It increased.
Letters From the People
George H. Owen, Mcintosh, N. M. What
the peoplo of the United States want is not gov
ernment ownership of the now existing railroad
lines, but more roads. What good will it do
for the government to buy tho now existing
lines when they aro not ablo to handle the
freight business of the country as it is, Let
the government build a four track exclusively
freight and express road from Now York City
to Kansas City and then two double track
routes from there to San Francisco, Cal. One
by way of Denver with a branch to Portland,
Ore., and one by way of El Paso and Los Ange
les, with a branch to Galveston. Then let all of
tho cities north and south of tho government
line build a double track road to connect with
the government road and wo have the situation
grabbed. Then in addition wo need the deep
waterway from New York City by way of Chi
cago to New Orleans. A high protective tariff
always produces a boom, but when the boom
busts and it is "about time then will bo tho
opportune time to do these works. Tho rate of
the government roads will become tho common
rate of all of the roads of the country. Tho
past history of the tariff shows a busted boom
about every ten years.
, Hiram A. Pettey, Stewartsvlllo, Minn.
When President Roosevelt came into office It
was said by a great many democrats that some
thing would be doing, but I could not share in
that belief. With all fairness to him, could any
thing be expected of him? Ho was born of
the privileged class, in the house of special
privilege was he reared and educated, and ho
owes to the money power all that he Is politi
cally; naturally Mb. sympathies lie there; pluto
cratic as Judge Parker was he was extremely
democratic in comparison to Roosevelt, whom the
trust magnates elected by pouring .millions into
one great corruption fund, while Judge Parker
who bid for their support got not even a cor
poral's guard. And has he not been true to
their bidding? He has been president five
years and not a trust magnate lies in jail, al
though they have robbed the producer right
and eft In direct violation of the laws. He is
just the man they want; he has fallen in line
with them at every turn, but how the plain peo
ple can want him again is more than I can under
stand, unless it is like the fellow's frogs told
about in The Commoner sometime ago they
were fooled by his noise.
William A. Garretson, Lebanon, Mo. That
so many people in this country, Including most
of those reputed for high intelligence, have
hailed an excess in value of exports over Im
ports as a state of trade to be desired, and unit
ed in calling it a "Balance of trade in our
favor," Is one of the most remarkable cases the
world has produced of an absurdity being made
respectable. The national republican conven
tion that nominated-McKInley and Roosevelt, in
the resolutions they adopted congratulated the
people of the United States on the balance of
trade being in our favor, because we had then
for some years been sending out of the country
more wealth than wo "had been receiving from
other countries. And the fact that this absurd
ity was hardly criticised at all during the cam
paign may be fairly taken as proof that the
people generally failed to perceive that it was
- an '-absurdity. If all stocks and bonds, or other
'' forms of indebtedness, were held in the coun
, tries where they are payable; and all land titles
were held by people residing in the countries
where the lands are located, all countries would
import, measured In terms of money, more than
they would export. As a matter of fact, take
the whole world's trade, and the aggregate of
imports will be .found to exceed the aggregate
of exports by about twelve per cent. This is
necessarily the case, and must always continue
to be; for trade can not continue unless it
affords a profit to those engaged In it. And
the profit is shown in the return for goods sold.
Some countries import more than they export,
awhile others export more than they import. But
" in the grand aggregate imports exceed exports.
And it would be so in the case of each country
if " natural conditions prevailed. In tho case
of England the Imports are over forty per cent
larger than the exports. This Is becauso Eng
lish Investors aro very largo owners of lands
in othor countries, on which thoy recoivo ront;
and also largo ownors of foreign stocks and
bonds, on which thoy receive dividends and in
terest. In tho case of the United States wo ex
port much moro than wo import becauso mil
lions of acres of lands in this country aro owned
by foreigners, and hundreds of millions of dol
lars in stocks and bonds, payablo by Americans,
aro owned by foreigners. And to pay ronts,
dividends and interest to these foroign Investors,
moro wealth must bo sent out of tho country
than can bo brought In. Tho creditor countries
can, and do, import very largely moro than thoy
export. Tho debtor countries must export to
pay their debts, and if thoy owe very much
abroad, as wo do, thoy must export largoly moro
than thoy import. I notice Mr. G. F. McMurchy,
of Vicksburg, Miss., asks In Tho Commoner of
May 3, "What conslltutes a true 'balanco of
trade?" That thoro is no such thing, Is tho
only answer to that question.
Seward Gwaltney, Somen illo, Ind. One of
tho Important things for which all honest voters
Bhould now strenuously contond Is "publicity of
campaign contributions." It Is important be
cause it Is ono of tho few ways by which cleaner
elections can bo obtained. Mr. Bryan spoke of
this in his Madison Squaro Garden speech and
offered forcible argument in Its favor. Mr.
Roosovolt In his message to congress also ox
pressed himsolf as in favor of it. But thero
publican congress, which represents tho posi
tion of that party in general, has uttorly neglect
ed to pass any legislation on tho subject. I
think wo can all agree with tho New York
World when it says "that tho failure of tho re
publican majority in congress to provide for
complete publicity of campaign funds and to
prohibit corporations from contributing thereto.
Is inexcusable." Nevertheless tills should not
prevent democracy from doing Its duty. Tho
fact that the republican party has failed to put
forth any effort to secure publicity does not
constitute any reason why the democratic party
should be negligent. Tho peoplo aro entitled to
know from what sources tho campaign funds
of all political parties are derived. And whether
or not the republican party make known its
contributions, the democratic party should pub
lish Its list. And this, as Tho Commonor has
repeatedly emphasized should bo dono before tho
election that tho people may bo guided in cast
ing their ballot. Let democracy take tho initia
tive and if the republican party does not follow
the example It will throw upon them a suspicion
-which, to say tho least, can not prove beneficial
to their ticket.
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