State Convention—Gold as a Standard, Etc. 203' 
is drawn away from the country, general values diminish; which is 
only another way of saying that the value of gold increases, accord¬ 
ing to the natural law of supply and demand. 
It is true that the prices change, not merely, as these teachers 
intimate, in proportion to the decrease in the amount of gold, but 
far more than this, and for another reason; that is because of the 
derangement of business and the stoppage of industries consequent 
upon the scarcity of money. But, however this be, when the value 
of commodities decreased and the value of gold increases, then the 
latter flows back into the county. This causes prices to increase 
and the value of gold to decrease, until it has reached the extreme 
point of reaction, when the gold because of its two greatly dimin¬ 
ished value goes abroad again, causing the diminution of prices 
with the usual hardships and disasters attending such an effect. 
This is what is meant by the amount of money regulating itself 
as it is said it always will do on a sound metallic basis. It is simply 
regulation by revulsion. If these writers are correct, fluctuations 
are inevitable in the nature of things, crises must occur, every 
period of prosperity must have its antithesis in a period of disaster. 
This has been the actual course of events in our commercial history 
and in that of Great Britain for the last fifty or sixty years, under 
the regime of a nominal specie basis. A commercial cycle is ac¬ 
complished in about ten years, with something like intervening and 
and irregular epicycles. 
The history of one of these periods is the history of all, and is 
familiar to us all. We begin with moderate prices, money scarce 
and dear, and wages low, but employment at some wages for most 
wTio are willing to work. Production is enlarged, commerce is 
more lively, prices rise, capital increases, money becomes plenty 
and cheap. Our expenditures become more profuse, we begin to 
run larger risks in business, importations exceed exportations; 
money begins to go abroad, and consequently to become scarce, a 
panic ensues, business is curtailed, the panic changes to a real re¬ 
vulsion, many industries stop, bankruptcy becomes the order of the 
day, all kinds of commodities fall to the lowest prices, till money 
rises so much in value that it becomes an article of import, and as 
it flows back, industry revives, slowly at first, and then more rap¬ 
idly, and we start off again to repeat the same process. 
Now, it will be observed, that there is implied in all this change, 
