Table V.—Average Price of Ten Commodities in the New-York Market for Twenty-six Years* (1834-1859), with the Amount of Currency per capita.

* Financial Report, 1863.

Table V. (continued).—Average Price of Ten Commodities in the New-York Market for Twenty-six Years (1834-1859), with the Amount of Currency per cajnta.

These facts are shown geometrically in Diagram No. 5.

This Diagram may require some explanation. The upper line represents the variations in the prices of the ten commodities chosen, for each year, from 1834 to 1859 inclusive, as already given in the tables. The lower line represents the bank currency, per capita, for the corresponding years.

Several important facts appear in this figure. The first to be noticed is the remarkable correspondence between the first and second lines, rising and falling together; proving most conclusively, by their agreement through so long a series of years, that prices depend on the quantity of currency in circulation.

The average currency, per capita, from 1834 to 1859,

26 years, was..............\$11.99

Average prices during that time.........20.80

Highest amount of currency (1837)........17.61

Highest prices (1836)............29.46

Next highest prices (1837) . . .........28.40

Difference between lowest and highest currency . .185 per cent. Difference between lowest and highest prices . . . 101 per cent.

It will be observed, that the difference in prices is not as great,per cent, as the difference in currency per capita. This is in accordance with what has been already laid down in regard to the unnatural extension of credits, caused by the expansion of the currency. These, of course, require a larger amount for their discharge. The currency has relation to credits as well as commodities.

The correspondence exhibited, in the foregoing tables and diagram, between the quantity of currency and the rate of prices, shows conclusively and impressively the effects of a mixed currency as a standard of value; viz., that as it expands or contracts from arbitrary but resistless causes, so prices are elevated or depressed, — variations which are often sudden and excessive.

In 1857, the highest point of expansion was attained, amounting to 103 per cent over 1849; and the price of commodities had advanced 69 per cent.

The list (see United-States Financial Report, 1863) from which the foregoing table of ten items was selected contains seventy articles, the prices of which correspond essentially to those we have presented.

Two important articles are omitted, viz. cotton and flour, from the list here given, because their prices are more affected by the foreign market than by our own, and may be noticed hereafter.

After making due allowance for those fluctuations which arise from supply and demand and from accidents, the evidence is most conclusive that the quantity of currency in existence does determine, essentially, the prices of commodities; and that, as a mixed currency must fluctuate greatly in amount from its inherent properties, it cannot perform satisfactorily its function as a standard of value.

The foregoing calculations, it will be observed, are made on the currency as estimated per capita. This is regarded as the most correct mode; since, as population increases, it is presumed that the industry and trade of the country is increased proportionally, and, if so, a larger amount of currency will be needed. If the increase of currency is greater than the increase of population, the per-capita calculation will show it.

It may be said, at this point, that the same effect on prices would be produced by an equal expansion or contraction of a value currency. Granted; but such rapid and violent changes could not take place. Specie cannot be increased like paper. It costs labor, like corn or cotton, and is subject to the same laws of supply and demand. It can only be brought in because it is wanted, — because some one wishes to give its price for it; but this desire to bring it in decreases regularly with the amount obtained. The more it is introduced into the country, the less, by the natural laws of trade, is it worth; the weaker the inducement to send for it. If, by any chance, it comes in till there is a redundancy, the prices of other things are raised, its own value is therefore lowered, and it flows off till the equilibrium is restored. Such an exportation would cause no more anxiety or alarm than the shipment of an equal value of flour. With a mixed currency, there is the embarrassing fact, that it cannot be exported. The foreign balances must be taken out of the specie basis. We have seen the course of contraction that must ensue.