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African gold mines, observe in the accompanying chart that a slight increase in the volume of money HAS SOMETIMES

FAILED TO MAINTAIN PRICES AFTER TWO OR THREE YEARS OF RISING PRICES AND EXPANSION OF CREDITS, and as a result falling prices have set in, with contraction of credits, thereby accelerating the fall in prices and producing depression. For an example, see the preceding chart. It is also to be observed that the rise of the price level in this chart was about 31 per cent-practically the same as during the past three years, but the increase in

the volume of money during the '80s was greater proportionately than during the era just passed. THEN IT WAS A 50 PER CENT INCREASE PER CAPITA, WHEREAS NOW IT HAS BEEN A 22 PER CENT INCREASE. This seems to show that the rise in the price level on so small an increase in the volume of money is largely the result of monopoly prices, and now that it has started downward, THERE IS LIKELY TO BE A MORE RAPID GROWTH OF DEPRESSION THAN FORMERLY, OWING TO AN ADDITIONAL CAUSE, NAMELY, MONOPOLY PRICES.

Later News: Depression Is Growing.

After the foregoing was in type, the writer examined Bradstreet's weekly paIt per, just issued (September 22). shows the following conditions:

The bank clearings for the United States for the week ending September 20 show a decrease of 27.7 per cent, as compared with the preceding year; out-` side New York a decrease of 6.2 per cent; in Canada a 6.2 per cent decrease. [In Europe there is also a decreasing business; see the succeeding paragraphs.]

Reactionary tendencies appeared in the New York stock market this week. *** The Steel stocks were weak, but have steadied somewhat, their decline being due to unfavorable reports about earnings and the anticipated reduction in the price of steel rails. The anthracite coal stocks naturally declined [owing to the strike]. [In railroad stocks] covering by shorts at moderate declines tended to steady the market AND RENDER ITS DOWNWARD COURSE A GRADUAL ONE.

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Boston, Sept. 21.-The merchandise market is generally quiet. * * The boot and shoe market is quiet. * Leather is quiet as a whole. *** Hides are quiet. *** Lumber quiet.

Business failures for the week numbered 183, as against 167 last week, 147 in this week a year ago. There has recently been a decree of foreclosure against the Chicago & Grand Trunk Railway Company.

About 700 employees of the Reading Iron Company went on strike yesterday at the Danville works against a reduction in wages of 25 per cent.

The York (Pa.) rolling mill has announced a reduction in the price per ton for puddling iron from $4 to $3.

The puddlers and other employees of the American Iron and Steel Manufacturing Company who struck several weeks ago have decided to accept a reduction in wages and return to work.

A notice has been posted at the four mills of the Susquehanna Iron and Steel Company, in Columbia, Pa., that on September 24 a reduction of 25 per cent in the wages of puddlers would go into effect, cutting them from $4 to $3 a ton. The workers at Lebanon will accept the reduction.

The Reading Iron Company, employing 2,500 men, has announced a reduction of wages ranging from 6 to 28 pe: cent, to become effective October 1. Pud dlers are to receive $3 instead of $4 per ton.

The next week will probably see final action taken as to the remaining wage scales, AS TO WHICH DEPRESSING REPORTS ARE CURRENT.

Also a Growing Depression in Europe. Bradstreet's weekly paper for Septem ber 22 has also the following data as to Europe:

A consular report says that from many parts of Germany come REPORTS OF STAGNATION IN MANUFACTURING INDUSTRIES, MORE ESPECIALLY IN TEXTILE BRANCHES. ***In the first six months of 1900 the imports of wool into Germany decreased 20 per cent in quantity AND 45 PER CENT IN VALUE, as compared with the corresponding period of 1899. *** The cause [of the depression in textile industry] is generally assigned to THE UNIVERSAL

LY DISCOURAGING STATE OF THE TEXTILE MARKETS, DUE TO OVER-PRODUCTION DURING THE PROSPEROUS SEASON OF 1899. THE FUTURE LOOKS SUFFICIENTLY DU

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The present monopoly situation has although petitioned by the Interstate come about while McKinley, Mark Hanna and the other leaders in the Republican party have controlled Congress and the administrative portion of the government. If the present monopoly situation is the result of their administration it would seem clear, then, that to continue them in power would be to continue the present monopoly situation. This probability is strengthened by the fact that they have refused to legislate for equality of railway rates,

Commerce Commission, and have refused to remove the tariff from monopoly goods. While thus refusing to enforce the existing laws against monopoly they introduced in Congress a bill for the control of trusts BY AMENDING THE CONSTITUTION OF THE UNITED STATES. This amendment could not possibly be put through for years, is unnecessary and would take from the States the control of their internal affairs, and, therefore, should not be tolerated.

b. Policy of Reform Party.

What is the policy of the parties opposed to the Administration? The trust magnates are fighting the nominees of the Reform parties and all the railway magnates are fighting them. This of itself is sufficient to show how the people in general should vote. And an examination of the platform of the leading party in the reform organization and of the history of its candidates shows clearly why the trusts and railways are fighting them. The platform says: "We favor such an enlargement of the scope of the Interstate Commerce Law as will enable the commission to protect individuals and communities from DISCRIMINATIONS AND THE

PUBLIC FROM UNJUST AND UNFAIR TRANS

PORTATION RATES." "Tariff laws should be amended by putting the products of trusts upon the free list, TO PREVENT MONOPOLY UNDER THE PLEA OF PROTECTION,” and other efficient remedies for monopolies are set forth. They are considered in detail in a later portion of this volume.

Such are the comparative policies of the two great parties as to monopoly. The Reform party will really reform the monopoly condition, and thus prevent the evils which now flow from monopolies. Among these evils is industrial depression. An additional cause of industrial depression is the falling price level, and on this point let us compare the policies of the two contending parties:

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(2) RESTORATION OF THE PRICE LEVEL BY MEANS OF STANDARD MONEY.

If the Democratic financial plank is upheld, the price level will be restored to about where it stood last spring and then will be kept stable year after year. A free silver law at 16 to 1 will raise it no higher, because the platform of 1900 declares that standard silver money shall take the place of paper currency issued by private corporations-some $300,000,000 or $400,000,000 by next spring. This silver will be represented by paper certificates, just as gold is represented by certificates. All this silver will be used before there can be any increase in the volume of our money. The remainder of the silver that will come to us from abroad will not exceed $500,000,000. Such an increase in the volume of money in the entire gold standard world will restore the price level to about where it was last spring. Every business man should hail with delight a policy that will so increase the volume of money as to put a stop to the falling price level and the growing depression and reverse the situa

tion, thus putting farm prices and all other competitive prices on the up grade, stimulating industry in all its branches. Since our recent experience of the delightful effect of an increase in the volume of money and rising prices, our people are no longer frightened by the declaration that it will injure them. The only men who object to a restoration of the price level are the creditor class.

The Administration has attempted to stop the falling price level by the issue of more money, but their system for. accomplishing this is insufficient. Through the private banks it has put out about $100,000,000 of paper money. The Reform parties desire to sweep this private paper money out of existence and put in its place "the dollar of our daddies" full legal tender money-each dollar worth one hundred cents, and the metal worth its face value. This is better than private paper money. The platform of the Democratic party is set forth at page 52 below.

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3. DIRECT CONTROL OF VOLUME OF PAPER CURRENCY BY GOVERNMENT OFFICIALS, UNDER DEFINITE RULE AS TO STABILITY IN MONEY MARKET AND PRICE LEVEL.

The foregoing relates to the metallic money that is given free coinage. This is termed "standard money." But this. is only one portion of the money that is in use. Let us consider the policy of the Reform parties as to the paper currency. There is a paper currency in use and all are agreed that we must continue to supplement our metallic money with some form of it. Should all our paper currency be withdrawn it would cause prices to fall. There are $346,000,000 in greenbacks and about the same amount in private paper currency, making a total of about $700,000,000. This is about one-third of all the money we have.

The policy of the reform parties is to repeal the law which grants to private corporations the power to issue paper currency, replace this private paper currency with standard money, and

THENCEFORTH KEEP IN THE HANDS OF A DEPARTMENT OF THE GOVERNMENT THE ISSUANCE AND WITHDRAWAL OF ALL PAPER CURRENCY. The officers of the government would operate under an express command that the volume should be such that the price level would neither

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rise nor fall. In other words, when the reform forces come into power, Congress will lay down a definite and just rule as to the volume of the paper currency. No longer will there be violent fluctuations in the interest rate of money and this will put an end to fluetuations in the price level. This, in addition to dealing out exact justice as between debtor and creditor and maintaining prosperity because of a stable price level, will remove the money question from politics; where a law is manifestly just there is no party that will advocate its repeal.

We shall now proceed to demonstrate that this policy proposed by the Reform parties is not visionary, but is a system similar to that which prevails in all the leading countries of Europe. On the other hand, the Administration's policy, as set forth in its currency law of last March, is the exact opposite of the European systems. No first-class country in the world, except the United States, has a monetary system that is at all like the one provided for in the Administration's Currency Law of last

March.

Comparison With European Systems for Controlling Money Market and Price Level.

(1) OUTLINE.

(2) IN DETAIL.

(a) Elementary Principles.

(b) Direct Control by the Government.

(c) Combined Control by the Gov

ernment and Representatives of Producing Classes.

(d) Control Through the Represen tatives of the Producing Classes. (e) War Chests of Gold-European States Distinguished from the United States.

(1.) OUTLINE.

Under the Administration's Currency Law, the private individuals whose business is that of loaning money and credit and speculating in stocks ARE

GIVEN A MONOPOLY CONTROL OF THE SUP

PLY OF NEW CURRENCY. But in Germany,
France, Austria, Russia and other great

countries the control of currency is in the governments themselves, or in the hands of the commercial classesclasses which are injured by high interest rates and fluctuations in prices.

Let us examine in detail these European systems, for they demonstrate the

evils of the Currency Law of last March and prove that the policy advocated by the Reform parties is in line with the European systems, except

(a.)

(al) AS TO CONTROL.

that we differ from them in not needing a fixed volume of gold-a weapon of

war.

(2.) IN DETAIL. Elementary Principles.

It is a well-known law of money and prices that an export of gold from this country tends to lower prices and that an inflow of money tends to raise prices; and that likewise an increase in the volume of paper money tends to raise prices, while a contraction tends to depress prices.

The way that changes in the volume of money operate on prices is through the interest rate on money-the bank rate. A raise in the bank rate makes it less profitable to hold property and pay the bank rate of interest-it lowers the value of the property and consequently some of the holders of property offer it at a lower price. This results in a larger amount of sales over those which would otherwise have occurred, and some of the loans receiving the highest interest rate are paid, thus increasing the "reserves" in the banks-increasing the cash in the bank as compared with the amount owing by the bank to depositors. On the other hand, a lowering of the bank rate makes it more profitable to hold property and pay the bank rate of interest-it raises the value of property and consequently some of the would-be purchasers of property increase their offers. This results in a larger amount of sales over that which otherwise would have occurred, and so some of the property is paid for with money drawn from the banks, and some of the purchasers borrow money or credit from the banks. This reduces the bank reserves.

It follows that THEY WHO CONTROL THE BANK RATE CONTROL THE PRICE LEVEL, if the volume of money remains stationary.

But if the volume of money does not remain stationary, but is elastic, THEN THE BANK RATE NO LONGER CONTROLS THE

PRICE LEVEL. For example, if the supply of money can be increased to take the place of credit, should it be withdrawn, it is apparent that those who control the supply of credit do not control price level; and if the supply of money can be made smaller whenever the volume of credit is inflated, it is again clear that those who control the supply of credit do not control the price level.

EFFECT OF CONTROL OF VOLUME OF PAPER CURRENCY.

Stated in a slightly different form from the foregoing, it may be said that THOSE WHO CONTROL THE SUPPLY OF MONEY CONTROL THE BANK RATE, AND THUS CONTROL THE PRICE LEVEL. For example, the price level can be raised if the volume of money in circulation is sufficiently increased; and, on the other hand, the price level can be lowered if the volume of money in circulation is lessened sufficiently.

(b1) EFFECT OF RISING AND FALLING PRICES.

Another important principle is that a falling price level increases the purchasing power of money and of debts payable in money.

EFFECT OF FALLING PRICE LEVEL.

"Falling prices" also disorganize the forces engaged in production, and the disorganization has been in proportion to the length of time that the falling prices have continued and the severity of the falls. All this is demonstrated by history.

The disorganization of industry is evidenced by the unemployed and the

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