Something of this kind has been going on in our bond and stock markets of late. The inevitable influence of gold on prices has made itself slowly felt for a long period, but it is only in the last year that a considerable number of individuals whose operations are of importance in the financial world have come to recognize how powerful this influence is. Price changes in divers securities and commodities hitherto unaccounted for, or attributed to wrong influences, have suddenly been explained to a number of important financiers, and a correct understanding of the problem has undoubtedly resulted in radical readjustments in some quarters. With that pertinacity in error which seems to distinguish the ordinary speculator, he has, however, gone on attributing these processes of equilibration to causes which have only a limited bearing on the case. The recent heavy decline in bonds and stocks, for example, was popularly ascribed to political and legislative action against railroads. Scarcity of money was given second place in these deductions, and gold production third place, or no place at all. If we reverse this order of importance and give gold production first place, monetary affairs second place, and political affairs third place, we are nearer the truth. It looks a little ridiculous that the scope of intelligent perspective should be blocked by three thousand miles of water, and that the unthinking majority who ascribe our decline in bonds to local politics should have failed to recognize so potent a fact as that the decline was world-wide; but such is the case. The readjustment in bonds was due to excessive over-production of gold, and it may be safely assumed that so long as this over-production continues to increase rapidly, bonds will continue low in price or, what amounts to the same thing, interest rates will remain high. As to the importance of a correct understanding on this subject of gold supply and its influence on prices, I quote from Mr. Byron W. Holt’s book “The Gold Supply and Prosperity,” which, I may add, is used as the text book for this chapter. Mr. Holt says: “This is the great problem that now confronts the financial world and demands solution of every investor. Not to solve it may mean great loss and possible failure. To solve it means success and greatly enhanced wealth for all who now have either a fair share of this world’s goods or who have credit and can intelligently go in debt for a large amount.” As speculation or investment-speculation, as defined in the introduction to this book, are the subjects under discussion it is the intention to take up, in turn, such points as bear particularly upon price changes of speculative shares and commodities influenced by our increasing supply of gold. The main points to be considered are as follows: