or twenty pounds of cotton is any more honest than one which will buy one
bushel or ten pounds? Is it because with the dear dollar the farmer must
work twice as long to pay off a mortgage, that the interest paid on the
great debts of the world will buy twice as much, and the debtor nations
are put at a terrible disadvantage as to the creditor nations personally?
Is that honest?

A very safe test of any theory is to follow it to its logical conclusion.
Take your "honest" money argument, on the basis of twenty years'
experience, and see where it will take you in the near future. The dollar
which buys two bushels of wheat or sixteen pounds of cotton is "honest,"
you say, and a dollar which buys but one bushel or eight pounds is not. By
and by, if your fallacy prevails, the dollar will buy three bushels of
wheat or twenty-five pounds of cotton, and will then, by your reasoning,
be much more "honest" than now. Is that your idea? How much lower must
prices go before you will admit that gold has gained in purchasing power?


=But it cannot be that prices have fallen because of the scarcity of
money, for the low rate of interest now prevailing proves that money is
abundant and cheap.=

That is a very old fallacy, and a singularly tenacious one, as it seems
that no amount of experience drives it from the minds of men. Look over
the history of our panics and you will find that after the first
convulsion is past the banks are soon crowded with idle money, and the
rate of interest falls. Take notice, however, that the money lenders
always declare that they must have "gilt-edged paper." Interest on
first-class securities is never lower than in the hardest times which
follow a particularly severe panic, and the reason is obvious: all