CHAPTER V. 



OVER-PRODUCTION THE LAW OF SUPPLY AND DEMAND. 



THERE is, perhaps, no greater mistake made than the 

 theory contended for by some of our cross-roads politicians 

 and hair-brained editors, that money has nothing to do 

 with controlling prices; that the law of supply and demand 

 alone fixes the price of every commodity. If these self- 

 appointed political economists were to allow the scales of 

 prejudice to fall from their eyes long enough to examine 

 the true principles which underlie and govern commerce, 

 they would learn that " price" is simply the expression of 

 the relation that exists between money and commodities 

 or articles of commerce; and that they are as relative to 

 each other as one commodity is relative to another; and 

 that both are governed by this same law of supply and 

 demand. Were it possible to remove the influence which 

 this law exercises over money, and allow its actions to 

 effect only the commodities of the country, their theory 

 might be tenable, and we would have a true u standard of 

 value." This school of political economists and strange 

 to say it includes many respectable and intelligent advo- 

 cates affirm that if wheat, corn, or any other product of 

 labor is plentiful that prices will be correspondingly low; 

 that if there is a large output of all the commodities there 

 will be a general fall of prices. But they utterly fail to 

 see that money is subject to the same law; that if it is 

 plentiful it is cheap; that it does not take so much of the 

 different commodities nor so much labor to procure it; 



