The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1873-11-15
Shall the Government Interfere with Prices

Shall the Government Interfere with Pricesl
1t IS hard to get nd Of the old fallacics Of the diff
ferent branches Of political economy. Balance Of
trade and protective tariff ideas are still devOutly
believed in by a large proportion Of the business
men Of the world, and the science Of money, one Of
the most abs;ruse and least understood Of al the
practical sciences, Is still full OF mysteries, even after
50 many centuries Of experience. 1t is not strange
therefore that mistakes in this field are often and
easily made. There are many points hONever 50 Is
tsblished as to be no longer matters Of question in
any circumstances one Of these is brought mp by
the request Of the Chamber of Commerce to the Gov
eminent to fix by legislation the value of English
sovereigns at more than three per cent. above their
psr vslue. The reasons for this extraordinary pro
position are simply because there is a scarcity Of coin
in the country, and capitalists are tired Of importing
it. In other words the country Is suffering tempo
rarily from a scarcity of money, and the Government
is requested to depreciste its value in order to relieve
the pressure. It would seem that such an argument
could hardly need s serious attempt at continuation,
its own plain statement being its clear condemnation.
1t was common once to fix wages and the prices of
all commodities by law, but such measures were OBJ
stacles to prosperity and have been succeeded by the
law of supply and demand, the principle Of which
las pSSu iuuuu 10 ue perfectly adS4uANt !" All POSS-
bic exigencies of trade, and to regulate wages and
prices upon the exact basis of intrinsic values. To
fix a fictitious value upon coins above their intrinsic
value is the same thing as fixing the price Of any
other commodity, and more objectionable from the
fact that money is n more universal commodity than
anything else. Lowering the standard of coins has
been occasionally ~practiced by ~prohigate governments
for the sake Of greater ease in paying their debts, to
the loss of their creditors, but such measures are no
longer defended, even the adoption of inconvertible
paper currency being generally condemned.
The direct result of the proposed change would be
mischievous in every direction; the damage and loss
caused by the enactmen of last year, making q de-
preciated silver coin the standard and legal tender
for all payments would be increased and more per-
manently established; contracts would be disturbed,
creditors defrauded and the prices of goods increased
by the loss of purchasing power on the part Of the
deprecated currency. The credit of the Govern
ment at home and abroad would suffer both by the
direct loss to its creditors and by the resulting want
of confidence in a government, liable at any time to
lower the standard of its currency. Our trade in
tercourse with other countries would become compli-
Gated from the different values of identical coins,
which feature would introduce friction, into all the
wheels of local and foreign trade.
Upon the other hand, what can be mentioned to
outweigh all of this mischief and doubtful morality E?
The chief gain is, to make coin plentiful; but we
have had a season of loss and misfortune, and we
have not got a plenty of coin, and we have no more
right to it, than a farmer has to profits when he has
lost his crops. We probably have all that we are en-
titled to. If simply more gold coin is needed as a
matter of convenience in handling, the deposit of
silver with the Government, in exchange for silver
certificates, supplies the want perfectly and better
than gold coin. These certificates are always re-
deemable and representing cash deposits to their full
denomination can never fall below par; they are
moreover very convenient to handle. This is the
true remedy to the gold trouble for the present.
They can even be used for the payment of foreign
debts if necessary, as the Bank Of California receives
them at a discount less than the present rates of
exchange.
The only benefit which could accrue to any one if
the proposed depreciation of coin was made, would
be to spectators and travellers who should bring SOW
ereigns into the country before prices had had time
to adjust themselves to the change, and capitalists
who are now at some trouble and expense in import
ing American gold; the advantage to the community
at large would consist in the pleasure of handling
more gold coins without any gain to the currency Of
the country in value.
l have neglected to mention the loss which would
result to us from the return of Sovereigns TO their in
trinsic value in sending them out of the country, be-
cause after prices should have had time to adjust
themselves to the new conditions, such losses would
be apparent instead of real; but it is doubtless true
that In such circumstances prices never fully conform
to the change and that there is always n small but
steady loss.
The best plan for US is to adopt the American COIN
age in all its features, which would make American
gold coins our legal tender upon the standard Of the
gold dollar, and half-dOllars and the smaller silver
coins legal tender for only small payments. The
United States have regulated their coinage as at pres
ents after many experiments and a great deal of leg
islation upon the subject, and the system is as perfect
as it can be made, and well adapted to all the demands
of trade. And as we do the greater part of our bus
mess with them, it follows that their coinage must be
the best adapted to our needs. 1t will be a grand
step when all the commercial nations adopt the same
money standards and denominations. Our obvious
and intelligent course is to agree with our nearest
commercial neighbors. If English money is pre-
ferred, let US adopt the English system in full, and
make pounds, shillings and pence our national cur
rency,b but avoid the absurdity of trying to convert
sovereigns into half-eagles, and save ourselves from
the censure and loss of prestige resulting from such
a masquerading attempt to create values by legisla-
ton.
The present money crisis naturally results from
our agricultural and commercial misfortunes, and is
only of temporary duration. In a years time our
exports will be greater in proportions to our imports
than has been the case for the last two or three years,
and the national profits will restore the money equi-
librium.
the grounds of principle, cannot properly be consid-
sidered even as a matter of policy upon the stand
point of capitalists alone; it being the province of
the Government to consider the interests of all of its
subjects, and measures for the relief Of q monied
class, where all are suffering, and which would en-
nance the burdens of the rest, cannot justly be passed,
without at least, a hearing from all interested.
S. b. DOLE.
Preamble and Resolutions