BIMETALLISM.

Press, Volume LII, Issue 9162, 20 July 1895, Page 10

BIMETALLISM.

TO THE EDITOR, OP THE PEBSS. Sir, —In seply to Mr Peache. He says, if a fleet of ships lay becalmed on the ocean' and one drif tea away, and the rest remained together, it might be fairly assumed that the oue ship moved and the others did not. Of course if she drifted away she moved. But I suppose he means, that after a certain time, tha only difference in their positions was that the single ship was a mile away from the others, which had not altered thoir relative positions. Of course, he means the single ship to represent gold, and the fleet commodities ; and ho tninks he has hit on a happy sitniie to prove the appreciation of gold. iiut there is no proof which moved. It is only assumption. If he was to bet fifty to one that the fleet remained stationary there would be no way of settling it. But, if we are going to make tho simile correspond with facts, we shall find that the fleet did move, and ihe various shipe al different rates. For instance, taking the periods 1873----1884, and 18841894, the following commodities feli in price respectively—Woo!, 50 per cent., 45 per cent.; wheat, 59 per cent., 42 per cent. ; silver, 50 per cent., 36 per cent. Sugar from 1892 to 1894 fell 40 per cent. Most of the 39 per cent, fall in tea took place during the last ten years. Now, though the fall in price does not correspond exactly with the increased production, it approximates nearly to it. Wβ know for a fact that the production of the commodities mentioned increased at a greater rate during the last ten'years than previously, and your readers will note that the greatest proportion of the fall occurred during that period, whilst in your recent article you named several articles that had risen in price. In short, the ships in the fleet did nofc preserve their relative positions; they moved about in all directions. So here we find movement and the canse —currents of wind and water, to wit— increased production, causing a fall—decreased production a rise, aud in is only by shutting our eyes to these palpable facts that we can assume that the single ship moved aud the fleet remained stationary. We can now safely bet 50 to 1 that tbo fleet moved. I am obliged to Mr Peache for furnishing mc with lan illustration that so clearly shows tho fallacy of the contention of bimetal lists, that a fall in the price of commodities means that they have been stationary and gold has moved. It has always been a difficulty for mc to understand why the quoting of index numbers of the fall in pricas, made up by various authorities, should show an appreciation of gold. It is only another way of expressing in figures that commodities have moved away from datum—not datum from commodities. The remaining remark of MrJPeache'e that ** even, however, if the one chip remained stationary and the rest drifted, the result would be practically the same, ,, I answer in this way. Suppose A lent B £100 when wool was Iβ per lb, and went to get his money back when it was6d. B would say, "My dear fellow, you make % great mistake. It is gold that was moved, not wool; consequently, I will give you back the quantity of wool that the money would have bought when I borrowed it." In short, if A could make good his contention that wool had moved,' he would get £100. If B could make good hid that gold had moved, he would pay £50, a considerable difference. In reply to Mr Grossmann he,made nse of language in an address to the public at Duuedin, which both your correspondent (Mr R. Clark) and myself interpreted to mean this:— " Gentlemen, I have carefully weighed all the influences at work likely to cause a fall in prices of commodities during the period 1873-1894, as compared with the period 1850-1873, when they rose, and I can come to no other conclusion than that it was the demonetisation of silver and, feeling confident of that, I urgently ask you to join with mc in agitating for its rehabilitation.'*' This means that he found the cause. In his next letter he replies with much warmth and energy (he charges mc with being grossly inaccurate), that we are taking him up too seriously. In his next letter, he makes considerable effort to minimise the meaning of the word cause. Well, now, what are we to understand 1 la it this—" VVhen I said at Dunedin that the demonetisation of silver was the cause of low prices, I did not mean that exactly. I meant that other powerful influences were at work, but which were the moat powerful, I leave 5 ou to choose"? lean only say we cannot agree to alter oar standard of value, till it is proved unstable, and this is no proof. Once more about authorities and the quantitative theory. Mr Grossmann, in his Dunedin address, says, "The argument simply is that an increase in ths volume of money raises prices and a diminution lowers them. In simpler language—lf you want to buy four sheep with all the money you have and have £12 to spend, your sheep cost £3 per head. If you have £8 to spend they cost £2 each; if yon have £16 to spend they cost £4 each." Now, we know that a man having good credit might buy a lot of cheep at auction on a bill, and before that bill became duo might have sold them and met the bill, and the whole transaction completed without the use of a single cotn. If John Stuart Mill was to say this could not be done, we would say ho was not a sound political economist, and he would have no weight as an authority. He says no such thing, however. Page 301, ho says, " An increase of the quantity of money raises prices, and a diminution lowers them." lint he qualifies it further on in the same paragraph of the page. He says caution is necessary in applying .the principal. His words are:—"Caution is the more indispensable, as the doctrine, though a scientific truth, has of l&te years been the foundation of a greater mass of false theory and erroneous interpretation of facts than any other proposition relating to interchange." Further on he says :—" It is habitually assumed that whenever there ia a greater amoun*. of money in the country, or in existence, a rise of prices mnst necessarily follow; but this is by no. means an inevitable consequence." In the same paragraph, he saye:—" The proposition which we have laid down' respecting the dependence ot general prices upon the quantity of money in circulation must be understood as applying only to a state of things in which money, that is gold or silver, is the exclusive instrument of exchange, and actually paseea from hand to hand at every purchase, credit in any shape being unknown. When credit comes into play, as a means of purchasing, distinct from mouey in hand, we shall hereafter fiud that the -connection between prices and the amount of circulating medium is much lees direct and intimate, .ind'that such connection aa does exist no longer admits of so simple a mode of expression." I think I have quoted enough to confirm the statements in my last letter —that Mill does not support the quantitative theory. Now, I wonder if Mr, Grossmann's other authorities will "fail him" like thi3 one has. This quoting authorities seems to be very like the game of bluff, at cards. 1 asked Mr Grossmann to explain some expressions that occurred in his recent letters, such as the juggling of gold monopolists with monetary laws, and our creditors making laws to artificially increase our debts, &c, but as he has not done so I shall presume that he made them ia on unguarded moment, and that he has

thought better not to uphold them. Bat there is one question, an answer to which will materially affect our decision on the matter, and that i 3 " Why should we make more dead money?" I must press for aa answer, and in doing so ramind him that this is now the third time of askiug. Ia conclusion, tha Sydney Morning Herald says—" Life is short, and bimetallism ia loug—and, further, very tedious." I feel sure many of your readers will look upon it so. Yet, it must be remembered that it is oue of the questions of the day, and as such should be comprehended by every intelligent man and woman. Specially should the new woman be able to make a profession of faith on the subject. But, if it demands our respectful attention, it does not follow that it should be a never-ending controversy. It has now been discussed in your columns for nearly twelve mouths, and it ia getting very monotonous answering the same arguments over and over again. With a view of bringing the discussion to a conclusion I shall submit the following issue:— Have we sufficient proof of the instability of our present; standard of value to warrant us in making a change ? If the advocates of bi-metallism fail to answer this in the affirmative I shall assume that your readers will give a verdict in favour of no change.—Yours, &c, Joshua Little. 16th July, 1895.