to fall, and, consequently, investments become unprofitable:  therefore they do not invest; therefore they do not want money; therefore they do not borrow, and idle money accumulates.  This is a phenomenon always observed in hard times.  In good times, on the contrary, when investments are reasonably sure to be profitable, there is naturally an increased demand for money, and so the rate of interest rises.  As a matter of fact, however, interest rates, when properly estimated, have been for several years past very much higher than previously—­that is, the borrower has, in actual value, paid very much more; so rapid has been the increase of the purchasing power of money, that the six per cent. now paid on a loan will buy more than the ten per cent. paid a few years ago.  In addition to that, the value of the loan has been steadily increasing.  Make a calculation for either of the years since 1890, and you will find it to be something like this:  the six per cent. paid as interest has the purchasing power of at least ten per cent. a few years ago, and the lender has gained at least two per cent. a year, if not twice that, by the increased value of his money; so the borrower will have paid, at the maturity of his obligation, at least twelve per cent. per annum, and probably much more.

The silent and insidious increase of their obligations, by reason of the enhanced and steadily enhancing value of gold, has ruined many thousands of business men who are even now unconscious of the real cause or of the power that has destroyed them.

I may add in this connection that the three per cent. now paid on a United States bond is worth about as much in commodities as the six per cent. paid previous to 1870, and at the same time the bond has doubled in value for the same reason; thus, calculated on the basis of twenty-five years, the bondholder is really receiving, or has received, the equivalent of ten per cent. interest.

DEMONETIZATION OF GOLD.

Gold has an intrinsic value, says the monometallist, which makes it the money of the world.  It is sound and stable, while silver fluctuates.  See how much more silver an ounce of gold will buy than in 1873, but the gold dollar remains the same, worth its face as bullion anywhere in the world.

But suppose there had been a general demonetization of gold instead of silver, how would the ratio have stood then?  Would not the same reasoning prove silver unchangeable, and gold the fluctuating metal?

Oh, nonsense! it is impossible to demonetize gold, because the civilized world recognizes it as an invariable standard by which all commodities are measured in value.  The supposition is absurd.  It would be very much like deoxygenizing the air.

But, my dear sir, gold has been demonetized, and not very long ago, either, and very extensively, too.  It was deprived of its legal tender quality by four great nations, comprising some seventy million people; demonetized because it was cheap and because the world’s creditors believed it was going to be cheaper; the demonetization, so far as it went, produced enormous evils, and nothing but the firmness of France and the far-seeing wisdom of her financiers prevented the demonetization becoming general on the continent of Europe, which would have reversed the present position of the two metals in the public mind.