a bushel in 1865 brought sixty-four cents twenty years later.  The meaning of this for the farmers in debt—­and nearly three-fourths of them were in that class—­can be shown by a single illustration.  A thousand-dollar mortgage on a Western farm could be paid off by five hundred bushels of wheat when prices were high; whereas it took about fifteen hundred bushels to pay the same debt when wheat was at the bottom of the scale.  For the farmer, it must be remembered, wheat was the measure of his labor, the product of his toil under the summer sun; and in its price he found the test of his prosperity.

=Creditors and Falling Prices.=—­To the bondholders or creditors, on the other hand, falling prices were clear gain.  If a fifty-dollar coupon on a bond bought seventy or eighty bushels of wheat instead of twenty or thirty, the advantage to the owner of the coupon was obvious.  Moreover the advantage seemed to him entirely just.  Creditors had suffered heavy losses when the Civil War carried prices skyward while the interest rates on their old bonds remained stationary.  For example, if a man had a $1000 bond issued before 1860 and paying interest at five per cent, he received fifty dollars a year from it.  Before the war each dollar would buy a bushel of wheat; in 1865 it would only buy half a bushel.  When prices—­that is, the cost of living—­began to go down, creditors therefore generally regarded the change with satisfaction as a return to normal conditions.

=The Cause of Falling Prices.=—­The fall in prices was due, no doubt, to many factors.  Among them must be reckoned the discontinuance of government buying for war purposes, labor-saving farm machinery, immigration, and the opening of new wheat-growing regions.  The currency, too, was an element in the situation.  Whatever the cause, the discontented farmers believed that the way to raise prices was to issue more money.  They viewed it as a case of supply and demand.  If there was a small volume of currency in circulation, prices would be low; if there was a large volume, prices would be high.  Hence they looked with favor upon all plans to increase the amount of money in circulation.  First they advocated more paper notes—­greenbacks—­and then they turned to silver as the remedy.  The creditors, on the other hand, naturally approved the reduction of the volume of currency.  They wished to see the greenbacks withdrawn from circulation and gold—­a metal more limited in volume than silver—­made the sole basis of the national monetary system.

=The Battle over the Greenbacks.=—­The contest between these factions began as early as 1866.  In that year, Congress enacted a law authorizing the Treasury to withdraw the greenbacks from circulation.  The paper money party set up a shrill cry of protest, and kept up the fight until, in 1878, it forced Congress to provide for the continuous re-issue of the legal tender notes as they came into the Treasury in payment of taxes and other dues.  Then could the friends of easy money rejoice: