Hawke's Bay Herald. TUESDAY, JUNE 1, 1897. PRICE LEVELS AND THE CURRENCY.

Hawke's Bay Herald, Volume XXXII, Issue 10624, 1 June 1897, Page 2

Hawke's Bay Herald. TUESDAY, JUNE 1, 1897. PRICE LEVELS AND THE CURRENCY.

The financial editors of both the Sydney morning dailies have commented on the table of pihe levels published by Mr T. i A. Coghlun, the Government atatlatlolau I of New _"u_th Wales. We can't say that i we fiad thtir remarks either helpful ac I giving assistance to understand the position or oonvlnciog aB establishing their own views. They resemble very muoh what we oan conoelve a learned critique of the play of " Hamlet " would be if all mention of the melancholy prince were excluded from it, or at best only Intro . duced to show that he was a useleas exoresoenoe on the plot. Taking the Sgdney Morning Herald first by virtue of seniority, we fiad It committing itaclf to the following proposition :— " In 45 yeara the increase ln the production of silver has been nearly sixfold, and nearly threefold since it wob demonetised by Germany, vF_ai' ti miald _ aye hssn na_ i its price beeu 'artificially' maintained by Itß retention as standard money it is impossible to say, but it would probably have bean vastly greater," the inference being that lf the civilised nations of the world had not condemned themselves to an altogether unwarrantable contraction of their onrrency by demonetising silver, j they would have snffdred from undue expansion. It need hardly be pointed out that thiß ls an entirely gratuitous assumption, without a particle of evidence to warrant it, Moreover, there is a speoial pleading which almost descends to low canning in the use of the word "artificially" whioh we have quoted. Sllvor wbb artificially demonetised. Its natural fanotlon, which it had fulfilled from timo immenvjrial till 1873, ie that of money. The intorferonoa which, without one or thought for the consequences, deposed it from that function was artificial. To abstain from interference would have been sensible and natural. Suoh a transparent attempt to oall blaok white, and white black, 1h unworthy of the columns iv which it appears. It may freely bo conceded that lf the price of diver had been maintained at 5a per cz many mines whioh are not now woikingwonld be turning ont the white metal. Bat the nnmberof tbese is nothing like bo groat as on? Sydney oonlemporary tries to mako ont, and in the nature of the case theao mines which hovor on tho boundary line between profit aud loss ara not large producers If thoy wore, they would pay, like the Broken Hill mines, at the proaent low prices. No movement In the price of sliver would call a single freßh mine Into existence, and most silver mines are worked for all that they ore worth irrespective of prices. The Implication that the increase In the production of silver has been greater than that in the production ot gold is also unwarranted and misleading. As a matter of fact there has been no over-production of sliver of a nature to break down the ratio. In the 60 years from 1781 to 1830 the prodnotlon of silver was 48'20z to lcz of gold, yet the ratio of priceß was maintained at abont IS to 1. Will it be believed that since 1573 the production of BlWer has never exoeeded 220z to loz of gold, and yet tbe ratio of prices has fallen below 30 to 1 ? What can have caused thia but the closing of the mints 2 If over- prodnotlon could have canned it with open mints, It certainly wonld have broken down tho ratio at the end of last century and tho beginning of this, As for the assertion that the prodnotlon of the precious metals has been in exoess of the world's financial requirements, It is equally baseless, The increase in the production of commodities and of services paid for la money has beeu even more phenomenal, owlßg to the advances of science and invention, than the Inorease In the prodnotlon of the precious metals. That, as a matter of faot, the supply of money has not kept paoe with the supply of commodities is evident irom the table of prioe levels to whioh we have before alluded. Tho Inference is that the disastrous fall in prices has been mainly due to the " artificial " and uncalled-for demonetisation of silver In 1873, and that, so far as it is dne to this cause, it oonld be retrieved by remonelisation. We have not space at tbis time to dwell on the advantages that would flaw from restoring the rnptured link between the commerce of the East and that of the Weßt. They are, however, of at least equal importance with those which relato to the movement oi priceß, Tho Sydney Daily Telegraph, In, its way, Is quite ao Ingenuous and unconviooing a speoial pleader as the Sydney Mom- 1 ing Herald, Onr production of com- j modi its it saya is SOO per cent greater than it was a quarter of a century ago, j Ibe obvious Inference (feat tbeteioig m I

i ni« IS I||_W 500 per oent in the stream of I^^Bmoney would be ln stiiob propor- w Hamlet is 'e,f t out. The v |HEf> asked to believe tl int increase of jj j^^Bloo, reduotlon in thi ) cost of living v oost of conveying produoe v |H9rket are responsible for tbe I tbe deollne. Bin tetallists treat H^Vdversaries, we thin c, with muoh I a HHfoandour than they cjfelve. No bi- J metallic of any etandtyßwould ignore ' any re B i and genuine oan-'Pwhloh tended j to redhoe prices ln any suoh disingenuous t way s 9 that.in which thesrj writers ignore E the d!]Rstrouß interference^ With the cur- t rency which has been ejected the last five a n d twenty years. T ! ejcauses of low i prlcei, adduced by the TMegraph are | i causes of piosperity. If the fall in prices < were wholly due to them pre duoers would j be more prosperous to-day t lan ever they were. But ns a matter of'ff ot production la so Httie prosperons that noneyed mon allow their capital to Ho i<H i in the bsnkß rather tban embaik Inii'. Records of banking fignreß, as the dl/faey Morning Herald admits, are record's bf stagnation. What the world needs ls inch an impetus to comnerce as was given cf tha gold discoveries of 1850. The precious me'ai in largo quantit les was minted int) money, thus icon mating the purobeying power of oon miners. Profits increased, and bbc w leels of commerce revolved brlsklyl. When the production of gold began to fall off there w _ a great lnorease in tl c production of siVer, Would not this In its tnrn have Ripen a similar impetus to industry and commerce if the wisdom ( ') of the world's g'eat men had not olosed tbe mints against it, and at the sa me time olosed tie door against the pro iperlty of their own people? The very oare which ls tiken by some financial writers to keep tnis view of the case in ihe background (Ives room for the inference that they themselves have some suspicion of its 'oice and truth, Under all the clioumtanees we oan see why it is sometimes idvlsablo to leave all met tion of Hamlet jut oi the dleousßlon of-th 3 play.