A reduction in the volume of money relatively to population and business, or, (to state the proposition in another form) a volume which remains stationary while population and business are increasing, has the effect of increasing the value of each unit of money, by increasing its purchasing power.

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We have 22,000,000 workmen in this country.  In order that they may be kept uninterruptedly employed it is absolutely necessary that business contracts and obligations be made long in advance.  Accordingly, we read almost daily of the inception of industrial undertakings requiring years to fulfil.  It is not too much to say that the suspension for one season of the making of time-contracts would close the factories, furnaces, and machine-shops of all civilized countries.

The natural concomitant of such a system of industry is the elaborate system of debt and credit which has grown up with it, and is indispensable to it.  Any serious enhancement in the value of the unit of money between the time of making a contract or incurring a debt and the date of fulfilment or maturity always works hardship and frequently ruin to the contractor or debtor.

Three fourths of the business enterprises of this country are conducted on borrowed capital.  Three fourths of the homes and farms that stand in the name of the actual occupants have been bought on time, and a very large proportion of them are mortgaged for the payment of some part of the purchase money.

Under the operation of a shrinkage in the volume of money this enormous mass of borrowers, at the maturity of their respective debts, though nominally paying no more than the amount borrowed, with interest, are, in reality, in the amount of the principal alone, returning a percentage of value greater than they received—­more than in equity they contracted to pay, and oftentimes more, in substance, than they profited by the loan.  To the man of business this percentage in many cases constitutes the difference between success and failure.  Thus a shrinkage in the volume of money is the prolific source of bankruptcy and ruin.  It is the canker that, unperceived and unsuspected, is eating out the prosperity of our people.  By reason of the almost universal inattention to the nature and functions of money this evil is permitted, unobserved, to work widespread ruin and disaster.  So subtle is it in its operations that it eludes the vigilance of the most acute.  It baffles all foresight and calculation; it sets at naught all industry, all energy, all enterprise.

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