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Few amendments to constitutions have been proposed besides those already mentioned. Washington proposes an amendment giving to each municipal corporation the right to determine by majority vote what kind of property shall be subject to taxation for municipal purposes. Connecticut proposes an amendment that no person can vote who is not able to read any section of the State laws in the English language; New Jersey one to extend the right of suffrage to women in school elections.

We have now hastily gone over the laws of some twenty States for the year 1897. Among them, only in Massachusetts and Arizona do we find no new legislation worthy of special mention; whether by reason of a peculiar conservatism in those two communities does not appear. The Governor of Massachusetts, however, in his inaugural message took strong ground against the excessive mass of legislation recently turned out by the annual laws of that commonwealth, and this has doubtless had its effect. New Jersey and Maine have also no social legislation worthy of special notice, but the statute books of Kansas and Washington this year would be an interesting study to any student of social science; and this brief summary may be closed with the remark that Washington has also passed resolutions through both houses petitioning Congress to repeal President Cleveland's proclamation as to all forest reservations, and also to throw open all other reservations (apparently this would include the Indian reservations) to the enterprise of the lumber interests and the mining interests of that State.

F. J. STIMSON. Boston.

NOTES.

Demand and The Ratio. Between the Notes on the Currency Question and the editorial comments, in the February number of the Review (pp. 452-456), the points of difference are apparently, is or is not the predominant factor of the demand for the money metals the demand that is "provided by governments for their use as legal tender, standard money at a fixed mint rate in standard coins;" and, since 1873 has or has not the demand for gold increased, and that for silver diminished?

As regards the former question it seems only reasonable to contend that a free coinage demand has a vastly greater effect in increasing value than a limited demand at the lowest obtainable price.

With reference to the latter, in the editorial comments the relative amount of the gold and silver coined by the leading nations of the world is adduced as evidence that, on the contrary, the demand for gold has diminished and that for silver has increased; but the failure of mints to always distinguish in their tables between coinage of fresh metal and re-coinage of old pieces makes the figures untrustworthy. It is possible that a year of much re-coinage with little coinage of fresh metal might exceed a year of much larger coinage of fresh metal but without re-coinage. Moreover there are vast stocks of coins in government treasuries, bank reserves, and private hands, that, without resort to coinage or recoinage, can be and are drawn on when there is an increased demand. For example, in the period before the passing of our Sherman Act the money market articles of the London "Economist” were one long wail of anxiety lest the demand of other nations might reduce the gold reserve of the Bank of England below the danger minimum. After we had passed the Act and flung our gold into English laps, their capitalists, lacking confidence in the future of currency and trade, demanded gold, still likely to increase in value, as the safest profitable investment; it accumulated in the banks; and the "Economist" wailed instead over the plethora of gold and the meagre earnings of capital.

As to the increase in the demand for gold, it should be remembered that in 1870 only England and Portugal among the nations gave to gold alone the monopoly of free coinage as standard money;

now, the United States, India, and all the leading nations of Europe, have suspended the free coinage of silver. In most of these countries gold is employed to do the work formerly shared with silver or done by silver alone. Is it not reasonable to contend that this vastly increased free coinage demand thus provided for gold has vastly increased its value; and that the increased purchasing power of gold must have in consequence tended to depress the gold prices measured in it, whatever other causes affecting the demand for and supply of the commodities measured there may also have been, to increase, neutralize, or lessen the effect on prices?

As to the decrease in the demand for silver, it should be remembered that from 1876, at latest, almost all the silver coined by the United States and the leading nations of Europe has not been coined as "standard money at a fixed mint-rate in standard coins” as previously, but has instead been bought by governments “at the lowest price to which it could be beaten down;" and that the coins, even though still legal tender, have not been, and are not, as previously standard money, but instead token coins whose intrinsic value is greatly less than the face value assigned to them in the table given in the editorial comments. Is it not therefore reasonable to contend that the former monetary demand for silver has been diminished since 1873, and that its decreased purchasing power must in consequence have tended to raise silver prices, whatever other causes there may have been at work to modify the effect?

In support of the contention of the Notes that the sudden and enormous changes since 1873 in the relative value of gold and silver have been solely due to the sudden and enormous changes in the relative free coinage demand, and not to the changes in relative production, Mr. Rothwell, widely known as a most able and accurate statistician, may be quoted (Universal Bimetallism, pp. 12 and 13; published in 1893): "The relative weights averaged, from 1680 to 1700, about 31.8 silver to i gold, or nearly the same proportion in which the metals are at present produced, yet while it then required only 15 of silver to equal i of gold in value, it required in 1892 no less than 23.73 silver to equal i of gold, and at the present time it requires about 30 to I.

During the one hundred and seventy years from 1700 to 1870 the relative values of silver and gold varied only between the limits of 1474 to 16/4 to 1 (which represented about the average coinage ratios) though the production-ratio fluctuated between the limits of 4 and 50 silver to i gold.” *

From this record (see

*

page 37) it is very evident that during "all the past, up at least to 1870, the value-ratio of silver and gold was not governed by their production-ratio; or otherwise, the value of silver as compared with that of gold was not governed by either the actual or the relative production of the white metal; it was in fact maintained almost stationary for the two hundred years preceding 1870, while the actual production increased four-fold, and its relative production fluctuated between 4 and 50 to i of gold.” If before 1870 the changes in relative value were not due to changes in relative production, it is reasonably certain that the changes after 1870 were also not due to relative production; and if they were not due to changes in relative supply, they could only have been due to changes in relative demand.

In conclusion it is submitted that it has been shown that the contentions of the “Notes on the Currency Question” are in accordance both with experience and with reason.

F. E. WOODRUFF. Shanghai, China, March 29th, 1897.

We print the above note at the request of Mr. Woodruff, though it does not appear to throw much new light upon the discussion in our May number. We endeavored to show at that time the error made by Mr. Woodruff, in common with many other bimetallists, in assuming that the changes in the relative value of gold and silver since 1873 had been due solely to the great increase in the demand for gold provided for by the governments and to the decrease in the demand for silver by simply stating the facts and showing that there had been actually down to 1893 an increase in the demand for silver and a decrease in the demand for gold. Mr. Woodruff endeavors to meet these facts partly by questioning the accuracy of our statistics, which make no account of re-coinage, and partly by showing that the legislation of various states giving up the free coinage of silver and introducing the gold standard, would lead us to expect a falling off in the demand for silver, and an increase in the demand for gold. As regards the first point, the correction to be made for re-coinage does not apply any more to silver than to gold, but rather less, because gold is used more commonly in international trade. The gross figures are therefore less favorable to our contention than the net figures would be. Moreover, for a part of the period (1882-1892) the corrected figures were given in the Yale Review for August, 1894. As regards the second point

Mr. Woodruff is quite right in saying that if we only knew that several leading nations had adopted the gold standard and ceased the free coinage of silver we should naturally assume the effect to be as stated by him, but what we endeavored to show was that the facts as we now know them completely belie this assumption; in other words, that in spite of the "demonetization" of silver and the adoption of the gold standard, there has been other legislation which has resulted in greatly increasing the demand of the mints for silver, while the use of bank notes and other substitutes has likewise, in spite of the adoption of the gold standard, not increased the demand for gold. To those who only know part of the facts, Mr. Woodruff's argument is plausible, but to those who do know the facts, it is not convincing to be told that certain legislation must necessarily have led to something which we now know has no existence. In his endeavor to ignore the facts Mr. Woodruff is actually driven to the untenable claim that all changes in the relative value of the metals, both before and since '70, have been due, not to changes in the relative supply, but only to changes in the relative demand, a position which is quite in contradiction to that of the late Gen. Walker, with whom we agree in holding, that value must always be determined, not by demand alone or supply alone, but by demand and supply together.

We have never claimed, however, that the mere amount taken from the mines could be held to measure the supply in any strict sense of the word. By supply in economics we mean the quantity that can be supplied at a price. The peculiar feature of the silver market from 1878 to 1893 was that the quantity supplied continued to increase in spite of the fall in price, thus showing that, if free coinage had been practiced by the leading nations, the output would have been much greater. The situation created by the limited, though large, demand of the Bland and Sherman acts, was peculiar, not in that the demand was less efficient than the demand for the same number of ounces would have been under free coinage, but in that the real extent of the supply was disguised.

Mr. Woodruff makes another error in stating that the demand for silver since 1876 was “at the lowest price to which it could be beaten down,” and that this demand was therefore less effectual than the demand for standard money under free coinage. As far as our own legislation is concerned the facts are just the opposite. Both the Bland act and the Sherman act created a demand [the one for a fixed value, the other for a fixed number of ounces) at prac

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