PREVIEW

It is an essential part of the case of the silver men that the country is having “hard times.” The bolters from the Republican convention say, in their manifesto: “Discontent and distress prevail to an extent never before known in the history of the country.” This is an historical assertion. It is distinctly untrue. There is no such discontent and distress as there was in 1819, or in 1840, or in 1875, to say nothing of other periods. The writers did not know the facts of the history, and they made use of what is nowadays a mere figure of speech. People who want to say that a social phenomenon is big, and who do not know what has been before, say that it is unparalleled in history.

There has been an advancing paralysis of enterprise and arrest of credit ever since the Sherman act of 1890 was passed. The bolters say that “No reason can be found for such an unhappy condition of things save in a vicious monetary system.” The reason for it has been that the cumulative effect of the silver legislation was steadily advancing to a crisis. The efforts by which the effects of that legislation had been put off were no longer effective, and it was evident that the country was on the verge of a cataclysm in which the standard of value would be changed. What man can fail to see the effect of such a fear on credit and enterprise? And with such a fear in the market, how idle it is to try to represent the trouble as caused by the fact that the existing standard was of gold, or of silver, or of anything else! Men will make contracts and go on with business by the use of any medium, the terms of which can be defined, understood, and maintained until the contract is solved, but uncertainty as to the terms, or danger of change in them, makes credit and enterprise impossible. In the whole history of finance no crisis can be found which was so utterly unnecessary, and so distinctly caused by the measures of policy which had gone before it, as that of 1893.

So much being admitted as to “hard times,” it remains true, however, that by far the greatest part of the current declamation about hard times is false. Prosperity and adversity of society are not capable of exact verification. At all times some people, classes, industries, are less prosperous than others. The fashion has grown up among politicians and stump orators of using assertions about prosperity and distress as arguments for their purpose, and parties come before the public with prosperity policies. They have programs for “making the country prosperous.” If this country, with its population, its resources, and its chances, is not prosperous by the intelligence, industry, and thrift of its population, does any sane man suppose that politicians and stump orators have any devices at their control for making it so? The orators of the present day see prosperity where they need to see it for the purposes of their argument. They say that all gold-standard countries in Europe are in distress. Mr. St. John says that Mexico is prosperous. As to Canada, we have seen no statement. According to some discussions which are current, the bicycle rivals the gold standard as a calamity-producer. As the bicycle has certainly gravely affected the distribution of expenditure and the accumulation of capital, its efficiency as a crisis-maker, in its degree, whatever that may be, can be rationally discerned, but nobody has ever been able to show any rational grounds of belief that the gold standard is a crisis-maker.

A crisis will also be produced whenever capital has been invested on a large scale in any unproductive investment, whereby it is not reproduced, but is lost. The enterprises are always made the basis of engagements and contracts. When the enterprises fail, the engagements cannot be met; other engagements based on these also fail, and so on through the whole industrial organization. Such crises are inevitable in a new country. Enterprises run in fashions. At any one time great groups of producers tend to one line of industry. That industry is sure to be overdone and to come to a crisis. In a free country, where every man is at liberty to direct his enterprise as he sees fit, what is the sense, when it turns out that he has made a mistake, of trying to throw the losses on other people? No one would propose it as to an individual or a number, but when there is a great interest it makes itself a political power and produces a platform for the same purpose, generally with inflated principles of humanity, justice, democracy, and Americanism as wind–attachments to make it float.

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Tags: Banking, Commodities, Fiat currency, fiat money, fraud, Gold, hard times, hardship, Hyperinflation, Inflation, Paper Currency, paper money, silver