344 HISTORICAL AND POLITICAL. 



circulation, so far as the wants of the people are concerned, is the 

 pension money, because it goes into active circulation. Who will- 

 deny that the money issued by the Secretary of the Treasury to relieve 

 the September squeeze would have prevented the December flurry if it 

 had been issued direct to people who needed it and would have used 

 it, instead of being issued, as it was, in thousand-dollar gold certificates 

 that never changed hands afterwards ? 



Money put out under the proposed system could never augment the 

 consumer's price, because it could never abnormally augment the 

 relative volume. Take, for instance, any agreed ratio between demand 

 and volume of money, independent of agriculture, and then dump the 

 products of agriculture to create a greatly augmented demand ; issue 

 money to the full amount of one-third of the product of agriculture, 

 which is more than those affected by the sub-treasury plan represent, 

 and there will still be a deficiency in the ratio of the volume that must 

 be supplied by its accelerated speed of circulation; therefore the 

 highest prices, or those which now obtain with the consumer, would not 

 be increased, but the tendency would be to bring the lowest prices, or 

 those now realized by the producer, up to the mean price towards which 

 the consumer's price must also tend. 



This government now maintains about $346,000,000 of treasury 

 notes, that circulate on a parity with gold, that are based on nothing 

 but the government credit. Several members of Congress have recom- 

 mended that the amount of such notes be increased. This may be 

 done and the amount doubled, or very materially increased, without 

 depreciating such notes from the gold standard; but all must admit 

 that there is a limit, to go beyond which would depreciate such notes, 

 and that such limit is constantly changed by circumstances, such as 

 war, famine, and others. It is hereby claimed that the amount of 

 treasury notes that would circulate, when based on wheat and cotton, 

 would be self-limited to an amount that would always be on a parity 

 with gold, and that none of the disturbing influences which affect 

 government credit would have any tendency to depreciate such notes 

 from the gold standard. In considering this proposition it must be 

 remembered that the farmer is not compelled to deposit his wheat and 

 cotton ; it is entirely optional with him. It is a generally recognized 

 fact that the price of these products is regulated by the export market. 

 The price of the portion exported regulates and fixes the price of the 

 gross product, including all that is consumed in this country. The 

 foreign markets to which these products are exported, and from which 

 quotations are received that regulate domestic prices, are using the 



