114 TWELFTH REPORT. 



CAUSES AND REMEDIES AS SEEN IN MONETARY CONDITIONS. 



JAS. B. MITCHELL. 



We are accustomed, as a people, to work up a greflt deal of emotion 

 over slight or evanescent ills. Nor are we alone in this. We remember 

 how England, but a few months ago, was stirred up over what was 

 imagined to be a threatened invasion by Germany. 



The present high prices, in my judgment, are not a cause for serious 

 alarm. To be sure some of our medical friends say we are in danger of 

 degeneration from under nutrition, but if the truth were told we should 

 be found to be in much greater danger of degeneration from excessively 

 extravagant living. 



Our present prices seem extreme in contrast with the abnormally 

 low prices of — say thirteen or fourteen years ago. This is esi^ecially 

 true of certain food-stuffs, notably meats and some other farm products,^ 

 which are indeed very high, but the reasons for this will, no doubt, be 

 explained by others. 



Our Democratic brethren persisted, back in 189G, in telling us that 

 gold had been steadily increasing in value for more than twenty years; 

 that the dollar would purchase more jn-oducts, the world over, in '9)j 

 than at any time during this period. They told our farmers that their 

 products had diminished in value relatively to gold; that it took more 

 of the products of the farm to pay the mortgages they had contracted 

 in previous years than the money they had borrowed would purchase 

 of those same products at the time the mortgages were given. In other 

 words, they told the farmers, whose long time debts were coming due, 

 that they would have to pay back more than they had borrowed — not 

 more money, but more value, more purchasing power. 



All this was, in large meiisure, true and hard for their Republican 

 opponents to satisfactorily answer. For whether we view the general 

 price level in the period from 1882 to 1896 from the standpoint of whole- 

 sale or retail prices, from that of raw materials or manufactured pro- 

 ducts, or whether we compare the trend of prices in the United States 

 with that of foreigu countries, a decided decline in prices is noticeable. 



This is graphically illustrated in various United States bulletins. In 

 the chart here exhibited — which is an enlarged copy of one taken from 

 the report of the United States Industrial Commission vol. XIX — we 

 have the comparative movement of wholesale prices in this country and 

 Great Britain, from 1882 to 1901. We note a fall in the United States 

 of 45 points — from 120 to 75 — or 387f ; and in Great Britain of 31 points 

 — from 109 to 78 — or 28% ; that is, 62 cents would purchase as much in 

 this country in l896 as |1.00 in 1882; and the equivalent of 72 cents in 

 English money would buy as much in Great Britain in 1896 as the 

 equivalent of a dollar would in 1882. 



This is only another way of saying that gold increased in value, dur- 

 ing that period of fourteen years, about 62% in the United States, and 

 about 40% in Great Britain. Before the present rise in prices, there- 

 fore, there was a very remarkable fall. 



