The Southern Mercury. (Dallas, Tex.), Vol. 10, No. 46, Ed. 1 Thursday, November 12, 1891 Page: 1 of 16
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Organize, Educate and Co-Operate."} OfftCldl JoUMdl of the Fdrif State AlHOflCe OÍ ToXQS. { "Libert/Tjuatiee and Equality."
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DALLAS, TEXAS, THURSDAY, NOV. 12, 1891.
WHOLB 10. 4(7.
— Scarce Money Means Ruin.
E. T. S., MARION, S. C.
There is no necessity to discuss
the effect of contraction on the
debtor and creditor classes. Ifthe
teachings of political economy be
true, as to the effect of volume of
money upon prices, it needs no ar-
gument to prové that a decrease in
the volume of money, benefits the
creditor class. By increasing the
purchasing price of money, and en-
hancing the volume of bonds, and
obligations held by them, they
Í'¿crease the injury of the
Lebtor class, who are forced
o give more labor, or ol
labor's products, in payment of
i their debts. It is estimated that
the purchasing power of the prec-
ious metals increased, between the
years 1809 and 1846, fully 146 per
- cent, because of the reduction of
i gold and silver during that period.
If this be true, money loaned in
1807, and repaid in 1848, would
have been repaid with 145 per
cent, in the purchasing power of
f principal and interest, besides all
° of the annual interest paid, during
that long period of scarcity and dis-
tress.
I give this historic illustration,
to show the effect of contraction
upon the debtor and creditor
classes. In this case, the causes
were largely natural and unavoid-
able, but the results to the classes
are the same, whether from na-
j tional causes, or from vicious legis-
lation and government adminis-
tration, as we shall be able to show
has been the case in the United
States since 1865.
In 1865, cotton, the money crop
of the southern states, was worth,
or would bring about 500 per cent
more than it will to day. It would,
therefore, require five times as
much cotton now to pay the prin-
cipal of any debt outstanding, or
any debt contracted in 1865, as it
would have taken to pay the debt
at that time. And yet, there is no
question of the fact, that a large
majority of the southern people
were in debt at that time—every
, patriot in the south had risked and
lost all on the issue of the Civil
War—their lands and their debts
were all that remained to them at
the close*
J twill be remembered, that in
the discussion of the necessity for
the lien law, in South Carolina, in
1865, it was[contended for, and be
lie ved, that the farmers of the state
could not continue to work their
farms, without the aid of the credit
that it was believed the lien law
would bring them—that existing
financial embarrassments made it
impossible to secure those irom
whom we hoped to obtain assist-
ance, in any other way, than by a
lien or mortgage on the crop. And
is it not a fact, too, that thousands
upon thousands of southern home
steads, were then mortgaged to ob-
tain the means to begin life anew?
And is it not a fact, too, thousands
of these same homesteads, have
passed into other hands, because
the contraction of the money vol-
ume, so reduced the pricesn o all
farm products, as to make it im-
possible for themerto pay these
mortgages?
We may, in a future number,
contrast the rightfulness to govern-
ment assistance of those, who have
been benefitted by the financial
policy of this government, and
those who have been injured by
that policy. '
Mr Dunning, in his Philosophy
of Price, in closing a review of the
finanancial policy of this country,
since 1861, says:
"Every law that has passed con-
gress since 1861, regulating the con-
dition of the government and peo-
ple, has been in favor of the rich,
and against the poor. Because of
this, great monopolies have grown
up. Immense corporations' have
sprung into existence and flourish.
All business is done upon a scale
that makes it impossible for the
small dealer or tradesman to en-
dure the competition; and continue
in business. Not only this, but
farming is fast' approaching the
same condition. 8oon, unless these
conditions change, our small farms
will be a thing of the past, and a
system of tenant farming will take
its place."
Henry Clay, discussing the evils
of contraction, said:
4'By the contraction of money in
England, from 1816 to 1625, more
than four-fifths of the land owners
were robbed of their estates, the
whole number in the kingdom, was
reduced from 160,000 to 30,000."
After speaking of the revolution
of 1839, caused by the searcity of
money, he gives illustrations of
ruin wrought, from which I select
a single example.
"In Pike county, Mo., as stated
by the Hannibal Journal, the sher-
iff sold three horses at $1.50, one
large ox at 12*4 cents, five cows,
two steers, and one calf, the lot at
$3.25, twenty sheep'at 13^ cents
each, twenty-four hogs at at 25
cents for the lot, one eight day
clock at $2.50, a lot of tobacco,
seven or eight old hogsheads, at
$5, three stacks of hay at 25 cents
each."
But as remarked, it is unneces-
sary to discuss the effect of contrac
tion of the money volume upon
tlie debtor and creditor classes, be-
cause the effect of contraction is
now too well under- tood, so we
come at once to the discussion of
its effects upon the wage earners,
and wealth producers of the nation.
In Dunnings Philosophy of Price,
page 33, he says:
"Whenever it becomes apparent
that prices are rising, and money
falling in value, in consequence of
an increase in its volume, the great-
est activity takes place in ex-
changes and productive enter-
prises. Everyone becomes anxious
to share in the advantages of ris-
ing markets. The inducement to
hoard money is taken away, and
consequently, the disposition to
hoard it ceases. Its circulation be-
comes exceedingly active, and for
the very plain reason that there
could be no motive, for holding or
hoarding mo«ey, when it is fall-
ing in value, while there would be
the strongest possible motive, for
exchanging it for property, or the
labor which creates property, when
prices are rising. Under those cir-
cumstances, labor comes in great
demand, and at remunerative
wages. This results not only in
increased production, but an in-
creased consumption, as the wants
and expenditures of laborers in-
crease with their earnings,"
John Sherman said, in a speech,
on the floor of the United States
senate, in 1869, before he became
the high priest of monopoly:
"The contraction of the currency
is a far more distressing operation
than senators suppose."
Our own, and other nations
have gone through that operation
before. It is not possible to take
that voyage without the surest dis-
tress. To every person, except a
capitalist out of debt, or a salaried
officer, it is a period of
loss, danger, lassitude of trade,
fall ot wages, suspension of enter-
prise, bankruptcy and disaster. It
means the ruin of all dealers,
whose debts are twice their busi-
ness capital, though one-thin! 'ess
than their actual property. It
means the fall of all agricultural
productions, without any great re-
duction of taxes.
What prudent man would dare
to build a house, a railroad, a fac-
tory, or a barn, with the certain
fact before him, that the greenback
that he puts into his improvement,
will in a few years, be worth 35
per cent more than his improve-
ments are then worth?
When the day comes, every man
will, as the sailor says, be close-
reefed. All enterprise will be sus-
pended, every bank will have con-
tracted its currency to the lowest
limit, and the debtor compelled to
meet in coin, a debt contracted in
currency, will find the coin hoarded
in the treasury, and no represen-
tation of coin in circulation, his
property shrinks, not only to the
extent of the contraction of the
currency, but still more by the ar-
tificial scarcity, made by the hold-
ers of gold. To attempt this, is to
impose upon our people, by arrest-
ing them in the midst of their law-
ful business, and applying a new
standard of value to their property,
without any deduction of their
debts, or giving them any opportu-
nity to compound with their cred-
itors, or to distribute their losses,
and would be an act of folly, with-
out an example in evil, in modem
tinges."
Hon. B. F. Wade, while vice
t* ""i
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Park, Milton. The Southern Mercury. (Dallas, Tex.), Vol. 10, No. 46, Ed. 1 Thursday, November 12, 1891, newspaper, November 12, 1891; Dallas, Texas. (https://texashistory.unt.edu/ark:/67531/metapth185438/m1/1/: accessed June 27, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; .