58 



THE IRRIGATION AGE. 



To illustrate, we will take wheat, which is 

 a production common to many countries. 

 Naturally Great Britain will favor its own 

 colonies, and the commercial and financial 

 supremacy of that kingdom gives it a 

 commanding influence as to all its neighbor 

 markets. When silver was demonetized 

 twenty-three years ago, the chief com- 

 petitor to the United States in supplying 

 Europe with wheat was India, and a 

 bushel of wheat was about equivalent in 

 value to an ounce of silver. These two 

 countries have continued to compete in 

 the same markets, but under distinctly 

 different conditions. They were on a sil- 

 ver basis then and they are yet; that is, 

 their products were and are measured by 

 a silver standard. This country had a 

 bimetallic standard then and silver and 

 gold were at a practical parity, and as 

 there was free coinage of both metals the 

 commercial and coinage ratio were the 

 same. Through some influence which it 

 is difficult to exactly locate our congress 

 was induced to demonetize silver, to make 

 a commodity of silver bullion, which being 

 denied coinage fell rapidly in price rela- 

 tive to gold which % became practically 

 the single standard. 



Coincident It was then that trouble be- 

 Decline. g an f or ug j^ was no t 



realized until we had begun to prepare 

 for a resumption of specie payments, and 

 then the fall in price was interrupted and 

 retarded by the Bland-Allison act, which 

 provided for the purchase and coinage of 

 $2,000,000 to $4,000,000 of silver bullion 

 monthly. There was a sufficient excess 

 over the purchase limit, as fixed in that 

 law, to meet all the requirements of 

 Europe in keeping up the waste of its 

 coin in circulation, and to settle Asiatic 

 balances, and the price was pretty well 

 sustained for a number of years, but at a 

 discount of 20 to 30 per cent. Then the 

 production of silver began to increase in 

 this country and the surplus for export 

 was greater. With mints of all the lead- 

 ing nations closed against it, with all the 

 financial institutions of Europe and this 

 country leagued in opposition to its free 

 circulation, and with the ruling of our own 

 treasury officials to still further discredit 

 it, the price began to fall again. Then 

 came the Sherman bill to interpose anoth- 

 er check by fixing the limit of purchase 

 a peg higher, and providing for the 



purchase of $4,500,000 each month ; but 

 the production went on increasing. The 

 British government suspended free coin- 

 age in the India mints, and the price went 

 down lower than ever. Now, it is a 

 striking coincidence that the price of 

 wheat fell and rose just in proportion with 

 the rise and fall in the price of silver 

 that is, in this country. It did not rise or 

 fall in India. All the time the price has 

 remained steady there, and the ounce 

 of silver has purchased a bushel of 

 wheat. 



Disastrous Let us consider the effect on 

 Effects. thig raar k et . When silver 

 bullion was worth $1.32 an ounce, as it 

 was in 1872, it made the bushel of India 

 wheat cost in Liverpool about $1.45. 

 Wheat from this country was worth 

 then the Liverpool price less transporta- 

 tion, or about $1.15 in Chicago. When 

 they can buy our silver in London at 66 

 cents and it was down to 63^ in 1894 

 the bushel of wheat can be bought in 

 India, and in other silver countries, on 

 the same basis as formerly, but at a cost 

 when measured in gold of only just one- 

 half as much and it can be landed in 

 Liverpool at about 85 cents, it follows 

 that we must accept for our wheat the 

 Liverpool price, as before, less the cost 

 of transportation. We are holding our 

 coined silver on a parity with gold, while 

 we are selling our bullion silver as a com- 

 modity at half price. The illustration as 

 to wheat is equally applicable as to all 

 those commodities which can be bought 

 on a silver basis, in silver using countries, 

 that are sold in the gold using markets of 

 Europe in competition with ours. The 

 lowest price from any country sets the 

 price for all, and our misfortune is aggra- 

 vated from the fact that the Liverpool 

 price for our surplus also fixes the price 

 for what we use at home. If we figure it 

 out as to wheat we shall find that the 

 effect upon the wheat crop of last year 

 467,000,000 bushels would show a loss 

 to our farmers and transportation com- 

 panies, the greater part borne by the 

 former, of at least $280,000,000, although 

 less than one-third of the crop was sent 

 abroad. All the food products, wheat 

 and flour, corn and oats, provisions in 

 every form, and everything which enters 

 into the production of them is affected in 

 almost the same proportion. 



