3
Those elements are population, demand, industry, supply, consumption, and savings or wealth, which, being mutually dependent, are not properly subject to great or sudden variations of relations. Such variations are generally due to misconceptions of moral relations, under some delusive hope. The most extraordinary instance of this was exhibited in the late war, during which the supply was diminished by the withdrawal of a large industrial force; and, as the deficiency thus produced could be supplied only from former savings, the consequence is a large debt to those from whom the savings were obtained. To recover from this it will be necessary to produce more per capita than heretofore, or to consume less, or both. As this is the only way in which the means of payment can be obtained, and as therefore much more time will be required for the payment of the debt than was occupied in its creation, it becomes the Government to encourage the industry of the country to the utmost, by freeing it from restrictions.
The only true encouragement for industry is freedom. Stimulus is not encouragement. When the currency was increased from six or seven dollars per capita to twenty or more a great increase of the nominal value of wealth took place, and if it be reduced to its former rate a proportionate decrease of the same will follow; but these changes are not for the interest of industry, but in defiance of it. For, as the rate of the dollar governs its value, and to that extent the value of wealth, increase of rate increases prices, and thus stimulates industry above the demand, and decrease by inverse influence depresses it below the demand; so that in either case the result is not encouragement but derangement.
Money represents demand, and thus the population, in which demand resides. It is therefore an element of political economy; but the rate of the dollar is not, because if each unit of demand (and thus of population) be represented by $6, that rate represents all there is of demand, and if each be represented by $16, this rate can do no more. If, therefore, an attempt be made to increase industry, not by increase of population, and thus of demand, the cause of industry—not by industrial freedom, its encouragement, but simply by increase of the rate of the dollar—the attempt
