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Has Silver Depreciated?

Has Silver Depreciated? image
Parent Issue
Day
22
Month
January
Year
1895
Copyright
Public Domain
OCR Text

To íhc Editor: One of the stock arguments against the coinage of silver by the United States at a ratio of 16 to i, is the alleged depreciation of that metal. I wish to question the validity of the assumption that gold has held a fixed valué since it parted company with silver at the 15 to 1 ratio, and that the resulting difference in their bullion valué is due to a depreciation of the latter meta!. The fact that 23.22 grains of gold is called a dollar, and that 371.25 grains of pure silver, its equivalent at a ratio of 16 to 1, will now purchase less than 12 grains of gold, I will not dispute. It has no bearing upon this phase of the subject. The only way in which we may determine the truth or falsity of this proposition is by a comparison of each metal with other producís of human industry, gold and silver being but the results of so much toil, and their price like the prices of other commodities being governed by supply and demand. If such a comparison shall show that a given weight of silver bullion will only purchase 50 or 60 per cent, of the quantity of other producís which it purchased before deraonitization, then we may assume that the difference between the coin and bullion valué of that metal measures its depreciation. On the other hand, if that comparison shall show that ver bullion has maintaineii a steady relation to other forms of property, and that its purchasing capacity has diminished with respect to only one commodity - gold - we must conclude that silver has not depreciated, but that gold has appncktted. Let us consider the metáis in their bul lion form without the confusing stamp of the mint. When the act of demonitization took effect the value of an ounce of silver bullion was $1.32, of an ounce of gold, $20.66- .;. An ounce of that silver bullion, worth then $1.32, now #0.59 in terms of gold, will today purchase as much of anything the merchants of Ann Arbor or the farmers of the state of Michigan have to sell, including farm lands, as it would then or at any penod between those dates. Your ounce of gold will more than doublé its former purchase. Fortunately the reports of the various government bureaus furnish conclusive evidence on this point. The decline in the gold price of our staple exports as tabulated from year to year by government statisticians has kept even pace with the decline in silver bullion. The average price for the year 1873 for four principal exports was as follows: Silver, $ 1.298; wheat, $1.31; corn, #0.72; beef, $0.78; cotton, $1.88. The New York quotations for Friday, January 11, 1895, were as follows: Silver, $0.59; wheat, $0.63; corn, $0.51; beef, $0.04; cotton, .055. So close, indeed, has been the relation between silver and our great scaples that there has not been a time in the past twenty years when the price of corn, wheat, and cotton could not have been safely presayed from the price of silver bullion. As a notable instance of this sympathy, when silver made its sudden rise to $i.2i, in September, 1890, ust after the passage of the Sherman law, wheat and cotton followed in the upward movement, and dropped again with the metal. In July, 1893, wheat feil from #.70 to $ 50, cotton from $.09 to $.06, silver from $.82 to g.58. This list might be extended to cover every field of American industry. Then we must conclude that the purchasing power of silver has not declined, but the price of gold has made an enormous advance. Can any valid reason be assigned to cover the decline of every species of property 3Ut gold, except that the latter commodity has advanced? In the light of these facts is it not more reasonable to speak of 23.22 grs. of gold as the 200 cent dolar, than to allude to the 371.25 grs. silver as the 50 cent dollar? Can we discredit the stability for soundness of a money metal the price of which during these years of discrimination ïas been a barometer of the values of all other property and a just arbiter jetween debtor and creditor? Shall we cali that dollar dishonest which las met every requirement of stable currency while denied full money Drivileges, or that other dollar whose ncrease in value with each succeedng year makes it a suitable measure or those only who live upon the earnings of bonds and morteaees?

Article

Subjects
Ann Arbor Argus
Old News