Conservative *
general scramble of such a readjustment.
All of the now "prosperity" which
others are said to enjoy is obtained at
their expense.
The plea for rising prices is made in
behalf of property-owners those who
have real estate or commodities for sale
but there is a very much more num
erous class iu society who also have
something to sell , viz. , the wage-earners.
Under the industrial organization of to
day they comprise the millions. They
are the class for whose welfare and pro
gress society is most concerned the
class in which are grouped those who
most need the protection that the laws
are designed to give. Whatever efforts
are made to raise the conditions of men
should lift from the bottom.
The Interests of Labor.
In his "Six Centuries of Work and
Wages , " Thorold llogers , the English
economist , quotes and endorses the fol
lowing statement from Tooke's great
work , "History of Prices , " published iu
1887 :
"According to all experience , whether
within modern observation or recorded
iu history , it may be laid down as an
established maxim that labor is the last
of the objects of exchange to rise in con
sequence of dearth or depreciation , and
that commonly the price of labor is the
last to fall in consequence of increased
abundance of commodities or of in
creased value of money. "
Since then iu a general advance wages
lag behind , this class at such a time is
put under constant disadvantage. Its
members must be continually getting
their pay increased in order even to hold
their own. That is the worst possible
position for the wage-earner. The most
commanding position that he can occupy
is to have a standard of value iu which
wages may be steady , while the prices
of commodities fall to correspond with
every elimination of labor from their
cost. Then all the forces that make for
industrial progress work for him. Then
his share of our constantly increasing
production of commodities is laid
promptly at his door. Every year sees
the purchasing power of his wages in
crease without aggressive action on his
part. None are so ignorant , timid , or
dependent as to be unable to buy at
lower prices when they are prevalent ;
but all are not equal in the intelligence ,
courage , and resources required to make
a continuous fight for a higher rate of
wages.
It is true that as prices advance ahead
of wages , the increasing profits of em
ployers stimulate the demand for labor ,
and gradually advance the price of the
latter. This only illustrates the ten
dency of natural laws to restore an
equilibrium that has been disturbed.
After prices have ceased to advance , as
eventually they must , wages will finally
resume the relative position , they have
lost. Unfortunately , when prices cease
j *
rti t ijajuij ij ti
to advance after a period of expansion ,
they generally do BO with a crash which
disorganizes the whole industrial ma
chine , and throws thousands out of em
ployment. The crash is commonly
attributed to the interposition of some
now influence ; but it is as inevitably a
part of the whole movement as any
other feature.
It seems inevitable that we are to
have a great increase in the volume of
money , accompanied , no doubt , by full
industrial activity and much speculation
the world over. It will be a good time
for debt-paying ; but unfortunately people
ple do not pay their debts at such a
time. They see too many good things
that they think they ought to buy.
People make debts in booming times
and pay them iu hard times. Those
who think the government ought to
provide money enough "to do the busi
ness of the country on a cash basis , "
and that panics and commercial depres
sions could bo prevented by a "sufficient
supply , " will learn that indebtedness
more than keeps pace with any increase ,
and that the most marvelous outpouring
of gold may be followed by unparalleled
stringency in the money market.
The JTormor Golden Kru.
The only increase in metallic monetary
stocks in recent times comparable to the
one now being made was that following
the discovery of gold in California and
Australia. The stock of gold and silver
coin in the world , excluding Asia , iu
1850 has been , estimated at $2,000,000-
000 , and in 1860 at § 3,800,000,000 an
increase of 40 per cent. The present
stock of gold and silver coin outside of
China and the Straits Settlements is
about $7,500,000,000. To add 40 per
cent to this stock iu the next ten years
would require a net annual increase of
$ { 500,000,000 ; and ib seems entirely
probable that this will be made in gold ,
besides any additions to the stock of
subsidiary silver.
The influence in Western Europe of
the increased output following 1850 was
modified by the extraordinary movement
to the East which set in about that time.
The building of railways iu India , and
other extensive investments , with a
rapid increase in exports , raised the not
imports of gold and silver into India for
the five years , 1855-59 , to an annual
average of about $05,000,000. That was
talcing 40 per cent of the entire product.
The expense of the Crimean war , with
the subsidies and loans made by England
and Franco to Turkey , distributed largo
sums of coin iu Eastern Europe , a re
gion comparatively destitute of it. As
a result of those movements , no increase
of metallic stoclcs in the banltB of Wes
tern Europe from 1850 to 1800 is ap
parent.
It is generally accepted , however , that
the output of California and Australian
gold was responsible for at least a part
of the rise of prices which occurred from
1849 to 1870. Jevons estimated the
average rise in commodities from 1849
to 18(50 ( at 24 per cent , and the net rise
to 1809 to 19 per cent. He considered
that this sustained advance was duo to
the depreciation of gold ; but it is diffi
cult to see how the influence of the wars
and now trade conditions which inter
vened can be so identified and measured
as to enable any calculation to be made
of the influence of the new gold.
Hunk Kesourees IncruiisiiiK *
If wo look only to money in banks ,
and ignore estimates of production , con
sumption , and coinage , we got rid of
many uncertainties ; and after all that is
the potential quantity iu monetary
stocks. Money in idle hoards , and re
quired iu pockets and tills for the daily
exchanges , is not available for loans or
for now enterprises. So far as money is
the basis of credit , it is the supply in
banks that is effective , and supports in
dustrial undertakings and speculation ,
and that through these channels has
bearing upon prices. The supply of
money iu banks is now increasing more
rapidly than at any previous time. The
stock of gold in such depositories in
Europe and in the United States , we
have seen , has increased nearly 40 per
cent in five years.
Another feature of modern trade re
lations which has au important bearing
upon the effective use of monetary
stocks , is the vast accumulation of high-
class investment securities known and
traded in in all the important money
markets of the world. Their value is so
stable , and their shipment so easy , that
in large degree they take the place of
gold in the settlement of international
balances. An unusual harvest in one
country with shortage elsewhere is com
ing to require less and less an alarming
drain of money from one to the other.
In conclusion , as we contemplate the
waste of capital and productive energy
in the search for gold in the Klondike
and elsewhere , the time seems opportune
to recall the comments of the French
economist , Blauqui , in reviewing the
outpouring of the precious metals which
resulted from the discovery of America.
Writing about 1840 , when the rich flow
from Mexico and South America , which
for several centuries had poured into
Europe , had almost ceased , and the
mines of the New World seemed to be
exhausted , he said :
"Everyone knows today that the real
advantages which Europe derived from
the discovery of the mines of the
New World do not coino exclusively
from the abundance of the precious
metals , but from the cultivation of the
commodities for consumption which
constitute the basis of our exchanges
with that country. Gold and silver hav e
disappeared ; cotton , sugar , and coffee
remain. The single discovery of the
potato was worth more thau all of the
mines of Mexico and Peru. "
GEORGE E. BOBEHTS .
