MONOPOLY OF EXCHANGE. 415 



Exchanges become sluggish because those who have 

 money will not part with it for either property or services, 

 beyond the requirements of actual current necessities, for 

 the obvious reason that money alone is increasing in value, 

 while everything else is declining in price. 



This results in the withdrawal of money from the 

 channels of circulation, and its deposit in great hoards, 

 where it can exert no influence on prices. This hoard- 

 ing of money, from the nature of things, must continue 

 and increase not only until the shrinkage of its volume 

 has actually ceased, but until capitalists are entirely sat- 

 isfied that money lying idle on special deposit will no 

 longer afford them revenue, and that the lowest level 

 of prices has been reached. It is the hoarding of money, 

 when its volume shrinks, which causes a fall in prices 

 greater than would be caused by the direct effect of a 

 decrease in the stock of money. Money, in shrinking 

 volume, becomes the paramount object of commerce in- 

 stead of its beneficent instrument. Instead of mobilizing 

 industry, it poisons and dries up the life currents. It is the 

 fruitful source of political and social disturbance. It foments 

 strife between labor and other forms of capital, while 

 itself hidden away in security gorges on both. It rewards 

 close-fisted lenders and filches from and bankrupts enter- 

 prising borrowers. It circulates freely in the stock 

 exchange. It has, in all ages, been the worst enemy with 

 which society has had to contend. The great and still 

 continuing fall of prices in the United States has proved 

 the most disastrous to nearly every industrial enterprise. n 

 Report of Silver Commission, page 53. 



u The worst effect, however, economically considered, 

 of falling prices, is not upon existing property nor upon 

 debtors, evil as it is, but upon laborers, whom it deprives 

 of employment and consigns to poverty, and upon society, 

 which it deprives of that vast sum of wealth which resides 



