Part 3

There is another way to calculate the decline, and that is by taking the average farm value instead of the export or New York city price, and including all roots and garden products not exported, and this makes the showing far more favorable to silver. The Agricultural Department at Washington has recently issued a pamphlet showing the crops of every year since 1870, and the average home or farm price, together with the total for which the whole crop was sold. Send for it and contrast the prices given in it with those known to you to-day, and you will find that in rye, barley, oats, potatoes, and many other things the decline has been very much greater than is given above. In short, it takes more farm produce to buy an ounce of silver than it did in 1873, and twice as much to buy an ounce of gold. Of Ohio medium scoured wool, for instance--and that is the standard wool of the market--it would have taken in 1873 two and a half pounds to have bought an ounce of silver, while to-day it will take considerably over three pounds. The monometallists habitually talk, and have talked it so long that they believe it themselves, as if silver had become so cheap that the farmer ought to rank it with tin, lead, or spelter; but if the farmer will try the experiment he will find that it takes a good deal more of his product to buy a given amount of silver than it did in 1873.

The plain truth of the matter is that the time has come for both gold and silver to increase in purchasing power; but by reason of demonetization almost the entire increase has been concentrated in gold, leaving silver almost stationary as to commodities in general, but somewhat enhanced as to farm products. In the name of common, honesty, is it not a high-handed outrage to make the old debts of that period payable in the rapidly appreciating metal, instead of one that has merely retained its value? and is it not hypocrisy to speak of such a system as "honest money," and affect to deplore the dishonesty of those who insist upon their right to pay in the least variable metal, which was constitutional and the unit of our money from the very start?

=We certainly do want to pay our debts in honest money.=

Gospel truth! And there is but one kind of perfectly honest money--that which will give the creditor an equivalent in commodities for what he could have bought with the money he loaned. Surely no honest man will pretend that gold to-day does that. At this point we must admit the painful truth that, in that sense, there is no perfectly honest money, that is, no money that does not change somewhat in purchasing power; and how to remedy this has been the great problem with the greatest minds among financiers--with all financiers, in fact, who are more anxious for justice than greedy of gain. But surely there should not be added to an innate variability that much greater variability due to the mischievous interference of interested parties, through the power of the government. And herein is made manifest the reckless folly of the gold men in fighting against the soundest conclusions of science and honesty, in striving for a standard of one metal allowing the greatest variation, instead of two which by varying in different directions might counteract each other.

Gold alone has varied in production in this century from $15,000,000 to $150,000,000 per year, or tenfold; but gold and silver combined have never varied more than sixfold. It is self evident, therefore, that the two combined form a much more stable mass than gold alone, and it cannot be too often repeated that the great desideratum in money, the one quality more important than all others, is stability in value, to the end that a dollar or pound or franc may command as nearly as possible the same amount of commodities when a contract is completed as when it is made. Economists dispute about almost everything else, but they are unanimous in this: That a money which changes rapidly in purchasing power is destructive of all stability and even of commercial morality. Will anybody pretend that gold has not changed rapidly in purchasing power within the last twenty years? Has not the universal experience shown that the variation has been very much greater in one metal than it ever was when the two metals were treated equally at the mint? The very least that could be asked on the score of honesty would be free coinage of both, with a proviso that debts should be paid with one-half of each. Back of all that, however, comes in the great principle of compensatory action, the variation of one metal counteracting that of the other; and from the standpoint of pure science and honesty it is greatly to be regretted that, instead of two precious metals, we have not at least five.

=The market reports do indeed show an unprecedented decline in the prices of farm products, except in a few articles such as butter, eggs, and poultry, in places where increased population counteracts the tendency to greater cheapness; but this decline is due to increased invention, and the great cheapening in transportation.=

How much of it? The records of the Patent Office show, and the experience of farmers confirms it, that all the improvements in farm machinery since 1870 have not reduced the labor cost of farm produce on the general average more than 2-1/2 per cent. Here is a little paradox for you to study. In the twenty-five years from 1845 to 1870 the progress of invention in farm machinery was greater than in all the previous history of the world, marvellously rapid, in fact, and during those years the farm price of the produce steadily increased; but in the ensuing twenty-five years to 1895 there were very few improvements, and the price has declined with steadily increasing speed. This fact is either ignorantly or skilfully evaded by Edward Atkinson and David A. Wells in their elaborate articles on the subject; so I will present some facts and figures which were obtained early this year in the Patent Office, and carefully verified by members of Congress from every portion of the farming regions.

Since 1795 there have been granted 6,700 patents for plows, but since 1870 there have been but three really valuable improvements. Farmers are divided in opinion as to whether the riding plow reduces the labor cost. The lister, recently patented, throws the earth into a ridge and enables the farmer to plant without previously breaking the soil. It is valuable in the dry regions of the West, but useless where the rainfall is great, as the soil must there be broken up anyhow. There have been 920 corn gatherers patented, of which only one is considered a success, and most farmers reject it on account of the waste. The general verdict is that the labor of producing corn has been reduced very little, if any. In the labor of producing potatoes there has been no reduction whatever, nor in the finer garden products, nor in fruits. It takes the same labor to produce a fat hog or a fat ox, a sheep, horse, or mule, as in 1870. In wool growing many patents have been taken out for shearers, and three of them are said to be savers of labor, provided the wool grower is so situated that he can attach the shearer to a horse or steam power.

There have been since the opening of the Office 6,620 patents for harvesters, of which the only great improvement since 1870 is the twine binder, for which over 900 patents have been taken out. The beheader is used in California, as it was before 1870, and in the prairie regions the sheaf-carrier has recently been introduced, holding the sheaves until enough are collected to make a shock. Counting the labor of the men who did the binding after the original McCormick reaper at $2 per day, the total saving by all these improvements since 1870 is estimated at 6 cents per bushel for wheat, rye, and oats. Much of this saving in labor is neutralized by cost of machines, interest, and repairs. There have been nearly 3,000 patents in fences, over 5,000 in the making of boots and shoes, and in stoves and heaters 8,240, none affecting farm labor except the first. In cotton growing exactly the same processes are used, from planting to picking, as in 1850; but out of many hundred attempts to invent a cotton picker it is now claimed that one is a success, though it has not yet got into use. The cost of ginning the cotton has been reduced about two-fifths of a cent per pound. There have been 176 patents for saw gins, 63 for roller gins, and 47 for feeders to gins, out of all of which there has been a new gin evolved which will be in use hereafter. I might thus go around the list, but enough has been said to show that nearly all our farm machinery was in use before 1870, and that since that date, as I said, the reduction of labor cost has not upon the whole field exceeded 2-1/2 per cent. The assertion that reduced transportation lowers the farm price is in flat contradiction of political economy, as, according to that, the benefits should be divided between producer and consumer, the farm price rising and the city or export price declining.

=The price of what the farmer has to buy has declined in equal if not greater ratio, and so his margin is as great as ever.=

It is evident that you are not a practical farmer. However, your non-acquaintance with the figures is not to be wondered at when we consider what has been said by great scholars and statesmen. I recently heard a politician, and one of perfectly Himalayan greatness, say in debate that a day's work on an Illinois farm would now produce more than twice as much as in 1870, and another clinched it by adding that a man could pay for a good farm by his surplus from five years' crops. Now go to some practical farmer and get him to make the calculation, and you will find that what he has saved by reduced prices is less than one-fifth of what he has lost from the same cause. The average farm family in the central West consists of five persons, and their greatest saving has been on clothing. You may set that at $30 per year. The next is in sugar, for which they pay but half the price of 1873. There is no other item that will reach $5, not even including all the iron or steel they have to buy in a year. The largest estimate of gains, unless they go into luxuries, does not exceed $90 per year. At least a third of this gain is offset by increased taxes.

Now let us see what this farm family has lost, counting only the price of the surplus it sells and taking our average from the official reports. On 500 bushels of wheat, at least $250; on 600 bushels of corn, $120; on ten tons of hay, $30; on rye, oats, potatoes, and so forth, $50; on three horses and mules sold per year, $100. Total, $550, being more than ten times the net gain over taxes.

The Agricultural Department figures indicate that, taking the United States as a whole, including even the intensive farming near the cities, the reduction of annual income is a few cents over $6 per acre. Thus something like $1,800,000,000 has been taken from the farmers' annual income, and the farmer being just like any other man, in that he cannot spend money that he does not get, this withdraws $1,800,000,000 from the manufacturers' and general market. In view of these figures--and if anything I have understated them--what conceivable good would a raise in the tariff do the manufacturers so long as our farmers must sell on a gold basis and be subject at the same time to the rapidly increasing competition of silver basis countries? I have said nothing of fixed charges which do not decline, or of the cost of the federal government, which steadily and rapidly increases. Have you heard of any decline in official salaries, taxes, debts, bonds, or mortgages?

=That is plausible at first view, but it cannot be true as to the country generally, because wages have risen; or at least they had risen continuously till 1892, as is clearly shown in the Aldrich Report.=

The Aldrich Report is a miserable fraud. It does not so much as mention farmers and planters or any of the laboring classes immediately dependent on farmers. It gives only the wages of the highest class of skilled laborers and in those trades only where the men are organized in ironbound trades unions which force up the wages of their members. Take the lists and census and add the numbers employed in every trade mentioned in that report, and you will find that all together they only amount to one fourth the number of farmers, or about 12 per cent. of the labor of the country. Furthermore, it takes no account whatever of the immense percentage of men in each trade who are out of employment. One who didn't know better would conclude from it that our coal miners worked 300 days in the year, and that stone masons, plasterers, and the like worked all the year in the latitude of New York and Chicago. And these are but a few of the tricks and absurdities of the report.

Wages are labor's share of its own product. The claim that wages generally can rise on a declining market involves a flat contradiction of arithmetic; it assumes that the separate factors can increase while the sum total is decreasing, and that the operator can pay more while he is every day getting less. The whole philosophy of the subject was admirably summed up by a Southern negro with whom I recently talked. "If wages be up, how come 'em up? We all's gittin' but half what we useter git for our cotton, and how kin five cents a pound pay me like ten cents a pound, and me a pickin' out no mo' cotton?" His philosophy applies to 60 per cent. of all the working people in the United States, for that proportion do not work for money wages. They produce, and what they sell the product for is their wages. Viewed in this, the only true light, the wages of 60 per cent. of our laborers have declined nearly one half, making the average decline for all laborers nearly a third. How, indeed, could it be otherwise? Will any sensible man believe that a farmer could pay men as much to produce wheat at $.50 as at $1.50? Or take the case of the cotton grower. It takes a talented negro to make and save 3,000 pounds of lint cotton; when he sold it at $.10 he got $300, and when he sells it at $.05 he gets $150, and all the tricks of all the goldbugs in the world cannot make it otherwise. To tell such men that their wages have increased, in the face of what they know to be the facts, is arrogant and insulting nonsense.

=This nation should have the best money in the world.=

Very true. And the question of what is the best can only be determined by science and experience. It is certain that gold standing alone is not; for its fluctuations in purchasing power have been so tremendous as again and again to throw the commercial world into jimjams. History shows that it has varied 100 per cent. in a century, and we have seen in this country that its value declined about 25 per cent. from 1848 to 1857, and that it has increased something like 60 per cent. since 1873. Without desiring to be ill-natured, I must say it seems to me that a man has a queerly constituted mind who insists that that is the only "honest money."

=But we don't want 50-cent dollars.=

And you can't have 'em, my dear sir. A dollar consists of 100 cents. The phrase "50-cent dollar" and that other phrase "honest money" remind me of what I used to hear in my boyhood when the slavery question was debated with such heat: "What! Would you want your sister to marry a nigger? Whoosh!" It was assumed, if a man denounced slavery, that he wanted the colored man for a brother-in-law. Men who employ such phrases show a secret consciousness of having a weak cause. And while I am about it I may as well add that I do not admire the way some of our fellows have of denouncing gold as "British money." Great fools, indeed, the British would be if they did not fight for a gold basis, for by reason of it they get twice as much of our wheat, meat, and cotton for the $200,000,000 per year we have to pay them in interest. According to the Chancellor of the Exchequer, the world owes England $12,000,000,000, on which she realizes a little over four and a half per cent., or pretty nearly $600,000,000 per year. Fully that, if we add income from property her citizens own in this and other countries. On the day we demonetized silver, that $600,000,000 could have been paid in gold in the port of New York with 450,000,000 bushels of wheat; to-day it would take 900,000,000 bushels. In short, the amount of grain England has made clear because of the rest of the world adopting monometallism would bread all her people, feed all her live stock, and make three gallons of whiskey for every person on the island. Why shouldn't they take what the world willingly gives them? I have my opinion, however, of the common sense of a world which does things that way.

=We want money that is equally good all over the world.=

There is no such money. The coin we send abroad is only bullion when it gets there, and most dealers prefer government bars. The exchange must be calculated exactly the same whether we use gold, silver, or paper in our domestic trade; and this notion that we "should be at a disadvantage in the exchange" is a delusion. The variations in the value of the greenback during our war era were calculated daily, and prices in this country rose or fell to correspond. It must, I say, be calculated just the same in gold or silver, and any smart schoolboy can do it in a minute on any transaction.

=What I mean is that the silver dollar is worth only 50 cents in gold.=

And by the same token the gold dollar is worth 200 cents in silver. The answer is as logical as the quip, and neither is worth notice. Such a process merely assumes an arbitrary standard and measures all other things by it, as the drunkard in a certain stage of intoxication thinks that his company is drunk while he is duly sober. And, by the way, where do you get your moral right to say that a dollar which will buy two bushels of wheat or twenty pounds of cotton is any more honest than one which will buy one bushel or ten pounds? Is it because with the dear dollar the farmer must work twice as long to pay off a mortgage, that the interest paid on the great debts of the world will buy twice as much, and the debtor nations are put at a terrible disadvantage as to the creditor nations personally? Is that honest?

A very safe test of any theory is to follow it to its logical conclusion. Take your "honest" money argument, on the basis of twenty years' experience, and see where it will take you in the near future. The dollar which buys two bushels of wheat or sixteen pounds of cotton is "honest," you say, and a dollar which buys but one bushel or eight pounds is not. By and by, if your fallacy prevails, the dollar will buy three bushels of wheat or twenty-five pounds of cotton, and will then, by your reasoning, be much more "honest" than now. Is that your idea? How much lower must prices go before you will admit that gold has gained in purchasing power?

=But it cannot be that prices have fallen because of the scarcity of money, for the low rate of interest now prevailing proves that money is abundant and cheap.=

That is a very old fallacy, and a singularly tenacious one, as it seems that no amount of experience drives it from the minds of men. Look over the history of our panics and you will find that after the first convulsion is past the banks are soon crowded with idle money, and the rate of interest falls. Take notice, however, that the money lenders always declare that they must have "gilt-edged paper." Interest on first-class securities is never lower than in the hardest times which follow a particularly severe panic, and the reason is obvious: all far-seeing business men know that prices are likely to fall, and, consequently, investments become unprofitable: therefore they do not invest; therefore they do not want money; therefore they do not borrow, and idle money accumulates. This is a phenomenon always observed in hard times. In good times, on the contrary, when investments are reasonably sure to be profitable, there is naturally an increased demand for money, and so the rate of interest rises. As a matter of fact, however, interest rates, when properly estimated, have been for several years past very much higher than previously--that is, the borrower has, in actual value, paid very much more; so rapid has been the increase of the purchasing power of money, that the six per cent. now paid on a loan will buy more than the ten per cent. paid a few years ago. In addition to that, the value of the loan has been steadily increasing. Make a calculation for either of the years since 1890, and you will find it to be something like this: the six per cent. paid as interest has the purchasing power of at least ten per cent. a few years ago, and the lender has gained at least two per cent. a year, if not twice that, by the increased value of his money; so the borrower will have paid, at the maturity of his obligation, at least twelve per cent. per annum, and probably much more.

The silent and insidious increase of their obligations, by reason of the enhanced and steadily enhancing value of gold, has ruined many thousands of business men who are even now unconscious of the real cause or of the power that has destroyed them.