The Pekin Daily Times is an American daily newspaper published in Pekin, Illinois . It is owned by Gannett .
110-1382: Several other newspapers started in the Pekin area before the Daily Times, including the Tazewell Reporter (1839), the Pekin Weekly Visitor (1845), the Tazewell Whig (1848), Pekin Commercial Advertiser (1848), and the IIlinois Reveille (1850). In the mid-1880s, the Pekin Bulletin and the Legal Tender (a greenback newspaper ) were founded. The Tazewell Mirror , which became the Tazewell County Republican in 1860, then The Pekin Post , and eventually The Pekin Post-Tribune before ceasing publication. The Pekin Daily Bulletin ,
220-401: A closed economy , this is because charging zero interest also means having zero return on government securities, or even negative return on short maturities. In an open economy, it creates a carry trade and devalues the currency. A devalued currency produces higher prices for imports without necessarily stimulating exports to a like degree. Deflation is the natural condition of economies when
330-463: A net capital outflow from the economy. It can also occur when there is too much competition and too little market concentration . In the IS–LM model (investment and saving equilibrium – liquidity preference and money supply equilibrium model), deflation is caused by a shift in the supply and demand curve for goods and services. This in turn can be caused by an increase in supply,
440-543: A 1-to-1 rate — thereby netting the speculator a tidy profit. The Greenback Party of 1876 drew the support almost exclusively from farmers — few urban workmen cast ballots for the Greenback ticket. The situation changed somewhat in the summer of 1877, however, when a strike movement erupted across the country, leading to the suppression of local strike actions by Federal troops and a radicalization of workers. A myriad of local political organizations, independent not only of
550-582: A broader existence the following year, issuing a convention call in August 1874 urging all "greenback men" to assemble at Indianapolis in November to form a new national political party. The result of this call was an undelegated gathering of individuals held in November in Indianapolis which was more akin to an organizational conference than a formal convention. No new party was formally established, but
660-612: A column named "Klan Komments." F.F. McNaughton purchased the Times in 1927. McNaughton bought the Zerwekh Building when the Zerwekh brothers closed their bakery business. He installed a rotary printer in the basement. In the summer of 1971, an offset printing press was installed in the building that had been acquired circa 1906. After McNaughton's death in 1981, the Times was sold to California-based Howard Publications. In 2000,
770-671: A decrease in the money supply. Studies of the Great Depression by Ben Bernanke have indicated that, in response to decreased demand, the Federal Reserve of the time decreased the money supply, hence contributing to deflation. Causes include, on the demand side: And on the supply side: Growth deflation is an enduring decrease in the real cost of goods and services as the result of technological progress, accompanied by competitive price cuts, resulting in an increase in aggregate demand. A structural deflation existed from
880-405: A default on loans and setting off a financial chain reaction. Runs began on banks, causing a series of bank failures, and manufacturers shuttered their production, laying off workers. Dozens of marginal railroads went bankrupt while unemployment skyrocketed. A lengthy depression ensued, continuing through 1878. Pressure was placed on Congress to alleviate the business crisis through reinflation of
990-449: A deflationary spiral. A deflationary spiral is the modern macroeconomic version of the general glut controversy of the 19th century. Another related idea is Irving Fisher 's theory that excess debt can cause a continuing deflation . During severe deflation, targeting an interest rate (the usual method of determining how much currency to create) may be ineffective, because even lowering the short-term interest rate to zero may result in
1100-471: A discount according to distance from the issuing bank and the bank's perceived financial strength. When banks failed their notes were redeemed for bank reserves, which often did not result in payment at par value , and sometimes the notes became worthless. Notes of weak surviving banks traded at steep discounts. During the Great Depression, people who owed money to a bank whose deposits had been frozen would sometimes buy bank books (deposits of other people at
1210-518: A fall in demand, or both. When prices are falling, consumers have an incentive to delay purchases and consumption until prices fall further, which in turn reduces overall economic activity. When purchases are delayed, productive capacity is idled and investment falls, leading to further reductions in aggregate demand . This is the deflationary spiral. The way to reverse this quickly would be to introduce an economic stimulus . The government could increase productive spending on things like infrastructure or
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#17328018472831320-466: A fall in prices as a supply glut develops. This becomes a deflationary spiral when prices fall below the costs of financing production, or repaying debt levels incurred at the prior price level. Businesses, unable to make enough profit no matter how low they set prices, are then liquidated. Banks get assets that have fallen dramatically in value since their mortgage loan was made, and if they sell those assets, they further glut supply, which only exacerbates
1430-607: A few years earlier, banks requiring payment in gold or silver, the failure of several banks, default by several states on their bonds and British banks cutting back on specie flow to the U.S. This cycle has been traced out on a broad scale during the Great Depression . Partly because of overcapacity and market saturation and partly as a result of the Smoot–Hawley Tariff Act , international trade contracted sharply, severely reducing demand for goods, thereby idling
1540-437: A given percentage decrease in the monetary base the result is a nearly equal percentage increase in money velocity. This is to be expected because monetary base ( M B ) , velocity of base money ( V B ) , price level ( P ) and real output ( Y ) are related by definition: M B V B = P Y . However, the monetary base is a much narrower definition of money than M2 money supply . Additionally,
1650-477: A governing Executive Committee was named for the prospective "National Independent Party", with the body assigned the task of composing a declaration of principles and issuing another call for a formal founding convention. Several regional conventions took place in 1875, merging the activities of local political parties towards a single end. Most of those attending these initial gatherings were farmers or lawyers, with few urban wage workers or trade union officials —
1760-514: A great deal of capacity, and setting off a string of bank failures. A similar situation in Japan, beginning with the stock and real estate market collapse in the early 1990s, was arrested by the Japanese government preventing the collapse of most banks and taking over direct control of several in the worst condition. The United States had no national paper money until 1862 ( greenbacks used to fund
1870-555: A group of reform-minded farmers and political activists declared themselves free of the two established parties and established themselves as the Independent Party. One of the founding members, John C. Wilde, is cited several times in a northern Michigan newspaper from 1898 explaining the reasons for the beginning of the Party. The group nominated a slate for statewide office, running on a platform which called for expansion of
1980-411: A lower rate but is still positive. Economists generally believe that a sudden deflationary shock is a problem in a modern economy because it increases the real value of debt , especially if the deflation is unexpected. Deflation may also aggravate recessions and lead to a deflationary spiral ( see later section ). Some economists argue that prolonged deflationary periods are related to
2090-466: A period of protracted inflation during the Civil War. Between the years 1860 and 1865, the cost of living nearly doubled. As is the case in all inflationary periods, there were winners and losers created by the significant fall in currency value, with banks and creditors receiving less real value from the loans repaid by debtors. Pressure began to build in the financial industry for a rectification of
2200-406: A quick military victory proved ephemeral and in the wake of Southern victories the federal government found it increasingly difficult to sell the government bonds necessary to finance the war effort. Two 1861 bond sales of $ 50 million each conducted through private banks went without a hitch, but bankers found the market for the 7.3% securities soft for a third bond issue. A general fear arose that
2310-412: A real interest rate which is too high to attract credit-worthy borrowers. In the 21st-century, negative interest rates have been tried, but it cannot be too negative, since people might withdraw cash from bank accounts if they have a negative interest rate. Thus the central bank must directly set a target for the quantity of money (called " quantitative easing ") and may use extraordinary methods to increase
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#17328018472832420-443: A similar effect to currency pegs. Some believe that, in the absence of large amounts of debt, deflation would be a welcome effect because the lowering of prices increases purchasing power . However, while an increase in the purchasing power of one's money benefits some, it amplifies the sting of debt for others: after a period of deflation, the payments to service a debt represent a larger amount of purchasing power than they did when
2530-534: A target for a short-term interest rate – the overnight federal funds rate in the U.S. – and enforcing that target by buying and selling securities in open capital markets. When the short-term interest rate hits zero, the central bank can no longer ease policy by lowering its usual interest-rate target. With interest rates near zero, debt relief becomes an increasingly important tool in managing deflation. In recent times, as loan terms have grown in length and loan financing (or leveraging)
2640-478: A time of frenetic railway construction and associated land speculation. Rather than a managed system of national railroad construction through public works or leaving the construction of lines strictly to market forces, Congress attempted to spur the growth of the industry through the grant of enormous tracts of public lands to privately owned railway companies. In May 1869, the First transcontinental railroad across
2750-565: A yet another form of currency, also backed by government bonds rather than gold and redeemable in United States Notes. This non-gold-based currency became the functional equivalent of greenbacks in circulation, further expanding the money supply. With the production of consumer goods impacted by the conversion of factories to wartime production and the expansion of the money supply, the United States of America experienced
2860-441: Is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate ). Inflation reduces the value of currency over time, but deflation increases it. This allows more goods and services to be bought than before with the same amount of currency. Deflation is distinct from disinflation , a slowdown in the inflation rate; i.e., when inflation declines to
2970-466: Is a form of money). With the rise of monetarist ideas, the focus in fighting deflation was put on expanding demand by lowering interest rates (i.e., reducing the "cost" of money). This view has received criticism in light of the failure of accommodative policies in both Japan and the US to spur demand after stock market shocks in the early 1990s and in 2000–2002, respectively. Austrian economists worry about
3080-579: Is common among many types of investments, the costs of deflation to borrowers has grown larger. Deflation can discourage private investment, because there is reduced expectations on future profits when future prices are lower. Consequently, with reduced private investments, spiraling deflation can cause a collapse in aggregate demand . Without the "hidden risk of inflation", it may become more prudent for institutions to hold on to money, and not to spend or invest it (burying money). They are therefore rewarded by saving and holding money. This "hoarding" behavior
3190-564: Is not consistent with the usual definition of deflation; a more accurate description for a decrease in the value of a capital asset is economic depreciation . Another term, the accounting conventions of depreciation are standards to determine a decrease in values of capital assets when market values are not readily available or practical. The inflation rate of Greece was negative during three years from 2013 to 2015. The same applies to Bulgaria , Cyprus , Spain , and Slovakia from 2014 to 2016. Greece, Cyprus, Spain, and Slovakia are members of
3300-495: Is seen as undesirable by most economists. Friedrich Hayek , a libertarian Austrian-school economist , wrote that: It is agreed that hoarding money, whether in cash or in idle balances, is deflationary in its effects. No one thinks that deflation is in itself desirable. Deflation causes a transfer of wealth from borrowers and holders of illiquid assets to the benefit of savers and of holders of liquid assets and currency, and because confused price signals cause malinvestment in
3410-400: Is the famous liquidity trap . When deflation takes hold, it requires " special arrangements " to lend money at a zero nominal rate of interest (which could still be a very high real rate of interest, due to the negative inflation rate) in order to artificially increase the money supply. Although the values of capital assets are often casually said to deflate when they decline, this usage
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3520-677: The National Labor Reform Party . Joining organized labor were the organized farmers in the form of the Patrons of Husbandry , commonly known as the Grange . Established in 1867, the Grange concerned itself with the monopoly power exerted by railroads, which used various aggressive pricing mechanisms for its own benefit against the farmers who shipped commodities over its lines. When the Grangers turned to politics around
3630-699: The Panic of 1873 which triggered the Long Depression that lasted until 1879. These deflationary periods preceded the establishment of the U.S. Federal Reserve System and its active management of monetary matters. Episodes of deflation have been rare and brief since the Federal Reserve was created (a notable exception being the Great Depression ) while U.S. economic progress has been unprecedented. A financial crisis in England in 1818 caused banks to call in loans and curtail new lending, draining specie out of
3740-589: The Populist Party . By the middle of the 1880s, Greenback Labor nationally was losing its labor-based support, in part as a result of craft union voluntarism and in part as a result of Irish defections back to the Democratic Party. Historian Paul Kleppner has observed that one of the traditional functions of third parties in the American political system has been the raising of new issues,
3850-436: The U.S. House of Representatives : 46th United States Congress , March 4, 1879 - March 3, 1881. 47th United States Congress , March 4, 1881, to March 3, 1883. 48th United States Congress , March 4, 1883, to March 3, 1885. 49th United States Congress , March 4, 1885, to March 3, 1887. 50th United States Congress , March 4, 1887, to March 3, 1889. Deflation Heterodox In economics , deflation
3960-490: The U.S. Treasury itself suspending redemption of its own Treasury notes . The gold standard was thus effectively suspended. United States Secretary of the Treasury Salmon P. Chase had already anticipated the coming financial crisis, proposing to Congress the establishment of a system of national banks, each empowered to issue banknotes backed not with gold but with federal bonds. This December 1861 proposal
4070-521: The dot-com and housing bubbles ), deflation reduces investment even when there is a real-world demand not being met. In modern economies, deflation is usually associated with economic depression, as occurred in the Great Depression and the Long Depression . Deflation was present during most economic depressions in US history. A deflationary spiral is a situation where decreases in the price level lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in
4180-814: The election of 1886 , only two dozen Greenback candidates ran for the House, apart from another six who ran on fusion tickets. Again, Weaver was the party's only victory. Much of the Greenback news in early 1888 took place in Michigan, where the party remained active. In early 1888, it was not clear if the Greenback Party would hold another national convention. The 4th Greenback Party National Convention assembled in Cincinnati , Ohio , on May 16, 1888. There were so few delegates who attended that no actions were taken. On August 16, 1888, George O. Jones , chairman of
4290-410: The 1870s until the cycle upswing that started in 1895. The deflation was caused by the decrease in the production and distribution costs of goods. It resulted in competitive price cuts when markets were oversupplied. The mild inflation after 1895 was attributed to the increase in gold supply that had been occurring for decades. There was a sharp rise in prices during World War I, but deflation returned at
4400-672: The 1874 elections in Wisconsin, California, Iowa and Kansas. This led the Chicago Weekly Tribune to state that the movement offered, "an opportunity to accomplish something for the country at large — not for the farmers merely, but for all who live by their industry, as distinguished from those who live by politics, speculations and class-legislation." Frustrated by their inability to get Democrats or Republicans to adopt inflationary monetary policy, southern and western leaders of monetary reform met in Indianapolis and proposed
4510-631: The Bank of Japan. Until the 1930s, it was commonly believed by economists that deflation would cure itself. As prices decreased, demand would naturally increase, and the economic system would correct itself without outside intervention. This view was challenged in the 1930s during the Great Depression . Keynesian economists argued that the economic system was not self-correcting with respect to deflation and that governments and central banks had to take active measures to boost demand through tax cuts or increases in government spending. Reserve requirements from
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4620-467: The Civil War), but these notes were discounted to gold until 1877. There was also a shortage of U.S. minted coins. Foreign coins, such as Mexican silver, were commonly used. At times banknotes were as much as 80% of currency in circulation before the Civil War. In the financial crises of 1818–19 and 1837–1841, many banks failed, leaving their money to be redeemed below par value from reserves. Sometimes
4730-635: The Daily Times was headquartered in a building adjacent to the Zerwekh Building on Fourth Street and Elizabeth Street. The Daily Times purchased its last Pekin-based rival, the Tribune, around the same time. The building housed a vaudeville theater, and then a dance hall. In the early 1920s, the Daily Times was owned by Ku Klux Klan Grand Titan Oscar Walter "O.W." Friedrich, the owner of the Capitol Theater, and his business partners and fellow klansmen Silas Strickfadden and E.A. Messner. The newsroom on
4840-602: The Greenback Party broadened its platform to include support for an income tax , an eight-hour day , and allowing women the right to vote . Ideological similarities also existed between the Grange ( The National Grange of the Order of Patrons of Husbandry ) and the Greenback movement. For example, both the Grange and the GAP favored a national graduated income tax and proposed that public lands be given to settlers rather than sold to land speculators . The town of Greenback, Tennessee ,
4950-568: The Hayes administration as a leading spokesman for those national politicians who wanted the nation's money supply used to expand commerce and fund westward expansion of the nation, not repay in gold the interest on civil war bonds Eastern bankers had bought to fund much of the civil war effort but whose antebellum lending practices to the South had helped slavery flourish. His 1875 national debates with hard money New York Governor Stewart L. Woodford set
5060-672: The North American continent was completed, bringing many localities to within reach of a national market for the first time. A frenzy to complete additional railway lines to open up new frontier areas for development followed, a situation in which the United States government and the great railroad companies of the day maintained a common interest. In an effort to speed such development, Congress granted cash loans and some 129 million acres (52.2 million hectares) of publicly owned land to subsidize construction. A great part of this massive stockpile of land needed to be converted into cash by
5170-579: The Republican and Democratic Parties but also of the fledgling Greenback Party sprung up around the country, concentrated in the states of Ohio , Pennsylvania , and New York . In the late 1870s, the party controlled local government in a number of industrial and mining communities and contributed to the election of 21 members in the United States Congress independent of the two major parties. The movement found particular success at
5280-553: The Treasury of the Grant administration George S. Boutwell formally abandoned the contraction policy and embraced the ongoing state of political inertia. Currency policy emerged as a hot topic in national politics, with politically active farmers and representatives of the fledgling national trade union movement endorsing a weak greenback-type currency as conducive to the needs of these groups as debtors. A looser currency supply
5390-532: The U.S. The Bank of the United States also reduced its lending. Prices for cotton and tobacco fell. The price of agricultural commodities also was pressured by a return of normal harvests following 1816, the year without a summer , that caused large scale famine and high agricultural prices. There were several causes of the deflation of the severe depression of 1839–1843, which included an oversupply of agricultural commodities (importantly cotton) as new cropland came into production following large federal land sales
5500-446: The U.S. Treasury issue specie (coinage or "hard" currency) in exchange for greenback currency upon its presentation for redemption beginning on January 1, 1879, thus returning the nation to the gold standard. Together, these measures created an inflexible currency controlled by banks rather than the federal government. Greenbacks contended that such a system favored creditors and industry to the detriment of farmers and laborers. In 1880,
5610-573: The accumulated metal to redeem the greenback currency on January 1, 1879. This deflationary move further tightened the already contracting economy, moving currency reform higher on the list of objectives of politically minded farmers. With the Democratic Party still discredited in the minds of many Northerners for its pro-Southern orientation and the Republican Party dominated by pro-gold interests, conditions had become ripe for
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#17328018472835720-408: The agricultural development of the land which they had to sell. Populations skyrocketed and marginal lands were sold and settled. In 1873, the economic bubble burst. The Panic began with a crisis in the overextended railroad industry, when the brokerage house Jay Cooke & Company found itself unable to sell enough Northern Pacific Railroad bonds to meet its financial obligations, leading to
5830-426: The asking price for their goods. When this happens, consumers pay less for those goods, and consequently, deflation has occurred, since purchasing power has increased. Rising productivity and reduced transportation cost created structural deflation during the accelerated productivity era from 1870 to 1900, but there was mild inflation for about a decade before the establishment of the Federal Reserve in 1913. There
5940-432: The bank) at a discount and use them to pay off their debt at par value. Deflation occurred periodically in the U.S. during the 19th century (the most important exception was during the Civil War). This deflation was at times caused by technological progress that created significant economic growth, but at other times it was triggered by financial crises – notably the Panic of 1837 which caused deflation through 1844, and
6050-524: The central bank could start expanding the money supply . Deflation is also related to risk aversion , where investors and buyers will start hoarding money because its value is now increasing over time. This can produce a liquidity trap or it may lead to shortages that entice investments yielding more jobs and commodity production. A central bank cannot, normally, charge negative interest for money, and even charging zero interest often produces less stimulative effect than slightly higher rates of interest. In
6160-427: The central bank were high compared to recent times. So were it not for redemption of currency for gold (in accordance with the gold standard), the central bank could have effectively increased money supply by simply reducing the reserve requirements and through open market operations (e.g., buying treasury bonds for cash) to offset the reduction of money supply in the private sectors due to the collapse of credit (credit
6270-467: The central bank. Debt deflation is a complicated phenomenon associated with the end of long-term credit cycles. It was proposed as a theory by Irving Fisher (1933) to explain the deflation of the Great Depression . From a monetarist perspective, deflation is caused primarily by a reduction in the velocity of money or the amount of money supply per person. A historical analysis of money velocity and monetary base shows an inverse correlation: for
6380-616: The civil war, a controversial major general of Union forces during the war, and a Republican turned Democrat after the Grant Administration. His national debates on Greenback monetary policy led the party's growth and influence as spokesmen against the post-war redevelopment of monopolistic gold-based capitalism. Ewing's advice to Andrew Johnson had helped point the administration towards an anti-gold-standard Treasury department. Ewing served in Congress from 1877 to 1881 during
6490-423: The convention: The paper currency, commonly called 'legal tenders' or 'greenbacks,' was actually paid out for value received as so much gold, when gold could not be obtained ... But whether our currency will always be on a par with gold or not, ... the commercial and industrial prosperity of a country do not depend upon the amount of gold and silver there is in circulation. Our prosperity must continually depend upon
6600-511: The country's gold supply was inadequate and that the nation would soon leave the gold standard . In December runs on deposits began in New York City , forcing banks there to disburse a substantial part of their hard metal reserves. On December 30, 1861, New York banks suspended the redemption of their banknotes with gold. This spontaneous action was followed shortly by banks in other states suspending payment on their own banknotes and
6710-674: The creation of a new political party for currency reform. They would meet again in Cleveland to formally launch the Greenback Party in 1875. The Greenbackers condemned the National Banking System , created by the National Banking Act of 1863, the harmonization of the silver dollar ( Coinage Act of 1873 was in fact the "Crime of '73" to Greenback), and the Resumption Act of 1875, which mandated that
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#17328018472836820-406: The currency, pitting railroad promoters and the iron industry against Eastern bankers and the merchant elite, who favored a stable, gold-based currency. Although those favoring currency expansion won the day in Congress, which passed an Inflation Bill calling for a $ 46 million boost in output of National Bank notes that would raise the ceiling on unbacked currency back to $ 400 million, the legislation
6930-419: The debt was first incurred. Consequently, deflation can be thought of as an effective increase in a loan's interest rate. If, as during the Great Depression in the United States, deflation averages 10% per year, even an interest-free loan is unattractive as it must be repaid with money worth 10% more each year. Under normal conditions, most central banks, such as the Federal Reserve, implement policy by setting
7040-575: The deflation only lowered the cost of goods that benefited from recent improved methods of manufacturing and transportation. Goods produced by craftsmen did not decrease in price, nor did many services, and the cost of labor actually increased. Also, deflation did not occur in countries that did not have modern manufacturing, transportation and communications. By the end of the 19th century, deflation ended and turned to mild inflation. William Stanley Jevons predicted rising gold supply would cause inflation decades before it actually did. Irving Fisher blamed
7150-401: The discount depended on the financial strength of the bank. In recent years changes in the money supply have historically taken a long time to show up in the price level, with a rule of thumb lag of at least 18 months. More recently Alan Greenspan cited the time lag as taking between 12 and 13 quarters. Bonds, equities and commodities have been suggested as reservoirs for buffering changes in
7260-407: The emergence of a new political organization to challenge the political hegemony of the two established parties of American politics. The Greenback Party emerged gradually from the consolidation of like-minded state -level political organizations of differing names. According to historian Paul Kleppner , the origin of the Greenback Party is to be found in the state of Indiana , where early in 1873
7370-512: The financial center in the Northeast to the commodity producing regions of the (mid)-West and South. In a procyclical manner, prices of commodities rose when capital was flowing in, that is, when banks were willing to lend, and fell in the depression years of 1818 and 1839 when banks called in loans. Also, there was no national paper currency at the time and there was a scarcity of coins. Most money circulated as banknotes, which typically sold at
7480-659: The financial system of the United States of America, creating vast new war-related expenditures while disrupting the flow of tax revenue from the Southern United States , organized as the Confederate States of America . The act of Southern secession prompted a brief and severe business panic in the North and a crisis of public confidence in the Federal government. The government's initial illusions of
7590-400: The form of underinvestment. In this sense, its effects are the opposite of inflation, the effect of which is to transfer wealth from currency holders and lenders (savers) and to borrowers, including governments, and cause overinvestment. Whereas inflation encourages short term consumption and can similarly overstimulate investment in projects that may not be worthwhile in real terms (for example,
7700-477: The greenback currency from circulation, a necessary first step towards restoration of the gold standard. In response, Congress passed the Contraction Act of 1866 , calling for the withdrawal of $ 10 million in United States Notes within the first 6 months and an addition $ 4 million per month thereafter. Substantial contraction of the physical money supply followed. About $ 44 million in greenback currency
7810-420: The industry, the enterprise, and the busy internal trade and a true independence of foreign nations, which a paper circulation, well based on credit, has always been found to promote. The Greenback movement argued that the previous effort of using an unbacked currency had been sabotaged by monied interests, which had prevailed upon Congress to restrict the functionality of the notes — declaring them unsuitable for
7920-410: The inflationary impact of monetary policies on asset prices. Sustained low real rates can cause higher asset prices and excessive debt accumulation. Therefore, lowering rates may prove to be only a temporary palliative, aggravating an eventual debt deflation crisis. When the central bank has lowered nominal interest rates to zero, it can no longer further stimulate demand by lowering interest rates. This
8030-468: The internal economy, there is no pressing need for individuals to acquire official currency except to pay for imported goods. If a country pegs its currency to one of another country that features a higher productivity growth or a more favourable unit cost development, it must – to maintain its competitiveness – either become equally more productive or lower its factor prices (e.g., wages). Cutting factor prices fosters deflation. Monetary unions have
8140-483: The money supply. In modern credit-based economies, deflation may be caused by the central bank initiating higher interest rates (i.e., to "control" inflation), thereby possibly popping an asset bubble . In a credit-based economy, a slow-down or fall in lending leads to less money in circulation, with a further sharp fall in money supply as confidence reduces and velocity weakens, with a consequent sharp fall-off in demand for employment or goods. The fall in demand causes
8250-537: The national committee, called a second session of the national convention. The second session of the national convention met in Cincinnati on September 12, 1888. Only seven delegates attended. Chairman Jones issued an address criticizing the two major parties, and the delegates made no nominations. With the failure of the convention, the Greenback Party ceased to exist. Many Greenback activists, including 1880 Presidential nominee James B. Weaver , later participated in
8360-461: The national currency. (In Wisconsin in the same year, a short-lived Reform Party , also called Liberal Reform Party or People's Reform Party, a coalition of Democrats, reform -minded Republicans, and Grangers secured the election of William Robert Taylor as Governor of Wisconsin for a two-year term, as well as a number of state legislators, but it never formed a coherent organization.) The Indiana Independent organization cast its eyes upon
8470-582: The non- gold backed paper money, commonly known as " greenbacks ", that had been issued by the North during the American Civil War and shortly afterward. The party opposed the deflationary lowering of prices paid to producers that was entailed by a return to a bullion -based monetary system, the policy favored by the Republican and Democratic parties. Continued use of unbacked currency, it
8580-535: The notes became worthless, and the notes of weak surviving banks were heavily discounted. The Jackson administration opened branch mints, which over time increased the supply of coins. Following the 1848 finding of gold in the Sierra Nevada , enough gold came to market to devalue gold relative to silver. To equalize the value of the two metals in coinage, the US mint slightly reduced the silver content of new coinage in 1853. When structural deflation appeared in
8690-842: The old Times building began in October 2013. In 2015, Pekin Daily Times merged with TimesNewspapers. The merged team is located in the Pekin headquarters. Greenback Party The Greenback Party (known successively as the Independent Party , the National Independent Party and the Greenback Labor Party ) was an American political party with an anti-monopoly ideology which was active from 1874 to 1889. The party ran candidates in three presidential elections , in 1876 , 1880 and 1884 , before it faded away. The party's name referred to
8800-509: The only other daily newspaper in Pekin, ran for nine months from January 3 to October 5, 1876. In 1852, a short-lived German language newspaper Per Wachteram Illinois was published. Circa 1875, John Hoffman started a German weekly called the Pekin Freie Press . This publication was sold to Albert Weiss, then to Jacob Schmidt in 1914. During World War I , this newspaper was changed to English language and renamed it Free Press ; it
8910-606: The paper was sold to Liberty Group, later becoming GateHouse Media Inc . GateHouse was acquired by Gannett in August 2019. In September 2007, the offset printer produced its last run and printing operations moved to the GateHouse press in the Peoria Journal Star building. The offset printer was sold for parts in 2012. In August 2012, the newspaper's operations moved to a building on Court Street, which had previously housed Rick’s TV & Appliances. Demolition of
9020-407: The payment of taxes or national debt. This inevitably depreciated the value of the unbacked currency when circulated side by side with fully functional gold-backed notes, the Greenback movement argued. Moreover, this differential in values was exploited by speculators, who purchased unbacked currency at a severe discount with gold-backed notes and then pressured Congress into redemption of the same at
9130-399: The price level. Since reductions in general price level are called deflation, a deflationary spiral occurs when reductions in price lead to a vicious circle , where a problem exacerbates its own cause. In science, this effect is also known as a positive feedback loop. Another economic example of this situation in economics is the bank run . The Great Depression was regarded by some as
9240-485: The railways to finance their building activities, since railroad construction was a costly undertaking. New settlement had to be attracted to the virgin lands west of the Missouri River , which had been previously regarded by the public as worthless to the needs of agriculture due to insufficiencies of the soil as well as the arid climate. Millions of advertising dollars were spent by the railway companies promoting
9350-593: The second floor was reportedly used to recruit socials to the KKK. The Klan owned the paper from September 1923 to June 1925. According to a Minnesota publication, it was the first daily newspaper to be purchased by any Klan in the country, and the Pekin Klavern was one of the most active in the Midwest, inducting 500 participants on August 15, 1923. During this period, the paper published Klan activities, editorials, and
9460-500: The situation. To slow or halt the deflationary spiral, banks will often withhold collecting on non-performing loans ( as in Japan , and most recently America and Spain). This is often no more than a stop-gap measure, because they must then restrict credit, since they do not have money to lend, which further reduces demand, and so on. In the early economic history of the United States, cycles of inflation and deflation correlated with capital flows between regions, with money being loaned from
9570-471: The stage for a rapid but brief rise in party national influence. The Greenback Party was in decline throughout the entire Grover Cleveland administration. In the election of 1884 , the party failed to win any House seats outright, although they did win one seat in conjunction with Plains States Democrats, James B. Weaver , as well as a handful of other seats by endorsing the Democratic nominee. In
9680-519: The start of the 1870s, railroad price reform was chief on its agenda, with currency reform making it easier for debtors to repay their loans a distinctly lesser concern. The Greenback Party would be an alliance of organized labor and reform-minded farmers intent on toppling the political hegemony of the industrial- and banking-oriented Republican Party which ruled the North during the Reconstruction period . The late 1860s and early 1870s were
9790-434: The supply and demand for goods and the supply and demand for money, specifically the supply of money going down and the supply of goods going up. Historic episodes of deflation have often been associated with the supply of goods going up (due to increased productivity) without an increase in the supply of money, or (as with the Great Depression and possibly Japan in the early 1990s) the demand for goods going down combined with
9900-507: The supply of money is fixed, or does not grow as quickly as population and the economy. When this happens, the available amount of hard currency per person falls, in effect making money more scarce, and consequently, the purchasing power of each unit of currency increases. Deflation also occurs when improvements in production efficiency lower the overall price of goods. Competition in the marketplace often prompts those producers to apply at least some portion of these cost savings into reducing
10010-512: The supply of money, e.g. purchasing financial assets of a type not usually used by the central bank as reserves (such as mortgage-backed securities ). Before he was Chairman of the United States Federal Reserve , Ben Bernanke claimed in 2002, "sufficient injections of money will ultimately always reverse a deflation", although Japan's deflationary spiral was not broken by the amount of quantitative easing provided by
10120-478: The testing of their viability amongst the electorate, and the pressuring of established political parties to appropriate these issues as part of their own electoral agenda. In this the Greenback Party and the People's Party which followed it were ultimately successful, moving the Democratic Party to espouse looser monetary policy and an ultimate abandonment of the gold standard. The following were Greenback members of
10230-407: The underlying technological progress in an economy, because as productivity increases ( TFP ), the cost of goods decreases. Deflation usually happens when supply is high (when excess production occurs), when demand is low (when consumption decreases), or when the money supply decreases (sometimes in response to a contraction created from careless investment or a credit crunch ) or because of
10340-770: The union movement having been shattered and atomized following the Panic of 1873. The party nominated its first national ticket at a convention held in Indianapolis , Indiana in May 1876. The party's platform focused upon repeal of the Specie Resumption Act of 1875 and the renewed use of non-gold-backed United States Notes in an effort to restore prosperity through an expanded money supply . The convention nominated New York economics pamphleteer Peter Cooper as its presidential standard-bearer. Cooper declared to
10450-538: The use of state or private force to suppress union strikes . The organization faded into obscurity in the second half of the 1880s, with its basic program reborn shortly under the aegis of the People's Party , commonly known as the "Populists". Later, during the early 20th century, parts of the agenda from both parties were accomplished by the Progressives . The American Civil War of 1861 to 1865 greatly affected
10560-431: The velocity of the monetary base is interest-rate sensitive, the highest velocity being at the highest interest rates. In the early history of the United States, there was no national currency and an insufficient supply of coinage. Banknotes were the majority of the money in circulation. During financial crises, many banks failed and their notes became worthless. Also, banknotes were discounted relative to gold and silver,
10670-546: The vibrant green ink used on the reverse side of the bill. A dual currency system emerged in which this fiat money circulated side by side with ostensibly gold-backed currency and gold coin, with the value of the former bearing a discount in trade. The greatest differential in value of these currencies came in 1864, when the value of a gold dollar equaled $ 1.85 in greenback currency. Congress finally enacted Treasury Secretary Chase's National Bank plan in January 1863, creating
10780-539: The war's end. By contrast, under a fiat monetary system, there was high productivity growth from the end of World War II until the 1960s, but no deflation. Historically not all episodes of deflation correspond with periods of poor economic growth. Productivity and deflation are discussed in a 1940 study by the Brookings Institution that gives productivity by major US industries from 1919 to 1939, along with real and nominal wages. Persistent deflation
10890-669: The weak currency situation. A change of heads at the Treasury Department in March 1865 proved the occasion for a change of course in American monetary policy. New Secretary of the Treasury Hugh McCulloch not only declared himself sympathetic to the banking industry's desire for restoration of a gold-based currency, but he declared the resumption of gold payments to be his primary aim. In December 1865, McCulloch formally sought approval from Congress to retire
11000-508: The worldwide inflation of the pre-WWI years on rising gold supply. In economies with an unstable currency, barter and other alternate currency arrangements such as dollarization are common, and therefore when the 'official' money becomes scarce (or unusually unreliable), commerce can still continue (e.g., most recently in Zimbabwe ). Since in such economies the central government is often unable, even if it were willing, to adequately control
11110-478: The years following 1870, a common explanation given by various government inquiry committees was a scarcity of gold and silver, although they usually mentioned the changes in industry and trade we now call productivity. However, David A. Wells (1890) notes that the U.S. money supply during the period 1879-1889 actually rose 60%, the increase being in gold and silver, which rose against the percentage of national bank and legal tender notes. Furthermore, Wells argued that
11220-522: Was vetoed by President Grant on April 22, 1874. The next Congress moved in the other direction, with the Republican leadership making use of steamroller tactics in order to finally resolve the dual currency situation through passage of the Specie Payment Resumption Act . Under the plan the government would accumulate a sufficient gold reserve over the next several years through the sale of interest-bearing bonds for gold, using
11330-454: Was believed, would better foster business and assist farmers by raising prices and making debts easier to pay. Initially an agrarian organization associated with the policies of the Grange , the organization took the name Greenback Labor Party in 1878 and attempted to forge a farmer–labor alliance by adding industrial reforms to its agenda, such as support of the 8-hour day and opposition to
11440-400: Was clearly understood as being the result of the enormous gains in productivity of the period. By the late 1920s, most goods were over supplied, which contributed to high unemployment during the Great Depression. Bank credit deflation is a decrease in the bank credit supply due to bank failures or increased perceived risk of defaults by private entities or a contraction of the money supply by
11550-405: Was inflation during World War I , but deflation returned again after the war and during the 1930s depression. Most nations abandoned the gold standard in the 1930s so that there is less reason to expect deflation, aside from the collapse of speculative asset classes, under a fiat monetary system with low productivity growth. In mainstream economics , deflation may be caused by a combination of
11660-656: Was initially ignored by Congress, which in February 1862 decided instead to pass the First Legal Tender Act , authorizing the production of not more than $ 150 million of these legal tender United States Notes . Two additional issues were deemed necessary, approved in June 1862 and January 1863, so that by the end of the war some $ 450 million of this non-gold-backed currency was in circulation. The new United States Notes were popularly known as "greenbacks" due to
11770-476: Was named after the Greenback Party about 1882. The party seems to have made use of slightly different official names in some states, with the organization appearing on the ballot in the November 1880 Sacramento , California , city election as the "Greenback Labor and Socialist Party". Among its national spokesmen, although not the best known, was Thomas Ewing, Jr. , a noted Free State advocate in Kansas before
11880-669: Was published until 1934. The Pekin Plaindealer was established in 1856, succeeded by the Tazewell Register , which changed its name to the Pekin Times circa 1880. The Daily Times was founded by Joseph B. Irwin and W. T. Dowdall as a daily on January 1, 1881. It was a four-page broadsheet with five columns of text per page. A related weekly newspaper , The Pekin Weekly Times , had begun in 1873. In 1906,
11990-489: Was seen as a way of breaking the perceived stranglehold on the national economy held by banks and wealthy industrialists. Chief among these supporters of so-called "Greenbackism" was the National Labor Union (NLU), established in 1866. This and other groups began to turn to political action in 1870 in an effort to advance their political agenda, with an August 1870 convention calling for the establishment of
12100-465: Was successfully withdrawn from circulation before a recession in 1867 helped fuel opposition in Congress to the deflationary redemption program. In February 1868, Congress terminated the Redemption Act and a state of what is today known as gridlock emerged, during which Congress refused to either formally leave the gold standard or to redeem its non-gold currency in circulation. Secretary of
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