Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1878-02-01
The Decline of the Gold Premium.


IN the first place there are powerful
commercial causes in operation tend
ing to bring about decline III the paper
premium on gold which are quite in
dependent Of the silver agitation or re-
sumption, or any other iidancal Or
monetary legislation. Our immense
exports Of grain and other products
have created large foreign balance ~
our favor which has resulted il ~ steady
flow Of gold to this country while IT has
arrested the expectation Of gold from
This country. For instance here il Il
paragraph from the New York HcruM
Of the 2lst inst:
+" lIalf i million of dollar, in gold
we're drawn from the Bank Of England
for shipment to New York. Although
ncction with with the very recent OK
portatiOn of gold from iingand To this
country, il marks the steady specie
curront winch hnH set westward, and
which cannot fail to have It's influence
III further reducing the premium here"
In fact the effect Of this importation
VAS registered in n still further decline
Of the gold premium. But though II
may seem paradOxlcaI assertion, il Is
nevertheless true that both the prospect
Of silver monctiMltion with resumption,
and the prospect TINT it would moi lie
monctized, would in different ways tend
TO bring down the premium on gold.
We do not now refer to the obvious cf-
feet Of monetizing silver in throwing I'LL
the gold coin in tins country upon the
market since il could no longer be
used in this country for monetary pur-
poses, except to pay foreign balances
though this would undoubtedly bring
about slight temporary decline in the
value o. gold for few months, till it
oond be absorbed by cgoll countries
Of Europe to certain specific elects
which are thus described by the New
York Heydhi
Now, If the silver bill becomes law
not enough Gun be coined between the
date Of it5 passage and the LIST Of Janu-
ary next, the date fixed for resumption,
for relieving the treasury from paying
out 1T once MI the gold it will then
have ON hand. If VIC resume on gold
alone the specie reserve Of the govern
ment will not be materially reduced
after our paper currency reaches par,
but if we rcmonetize silver and make
IL equally with gold u medium Of pay
ment, the difference IN the value Of the
Two metals will cause all the gold To be
drawn out - fast ns grcenhacks can be-
presented. The certain diminution Of
the quantity Of grcenbacks in circun-
ton and the corresponding increase in
the amount Of gold lM loose from long
Imprisonment would preclude tho posi-.
bllity Of II gold premium. IL the silver
bill passes il will BE- impossible for the
government Ia hold reserve except in
that metal, and rs silver enough VIII
not have been "oincd for that purpose
ut the legal datc Of resumption, the OK
pertinent Of specie payments would
break down NJ neon ~ it was begun
OF course these effects would last
only 10 long rs there was gold III the
treasury 10 redeem grccnbacka, After
the gold was exhausted, then their value
would be expressed in silver, so long an
they were rcdocmnble in silver, and no
one can now tell what effect rcmonc-
tlz,ltion would have ON the value of
silver. If accompanied by resumption.
Seine increase Of itS value, certainly,
might be looked for, but how much
or how long il will last cannot now
30 conjectured because among other
doubtful elements we cannot tell what |
effect monotizntion would have upon
the policies of France and other coun-
tries of the silver union. On the other
hand if it We're certain that silver would
not bc monctlzed, and thnt tho roaump
ton act would remain unrcpcalcd
grccnbacks would appreciate. Perhaps
the mutual play Of these opposite pros
poets exercise some influence III tile de-
cline Ct the gold premium; though
counting them both ~ null II may be
easily accounted for, IA W. have already
stated, by commercial causes entirely
independent Of congressional lcgisla-
ton But if thu resumption net should
he repealed what then would hc the
effect Of silver monetizationY II would
drive Ill tho gold out 81 the country,
except such ns was bought asa com
m,rcm commodity III the market
to pay foreign balances. Silver
would be used only whore gold is now
used to pny duties and interest on the
public debit and not Il dollar would
come into circulation or be USED rs
money in commercial operations while
tho degradation of the standard Of
value would carry grccnhneks with it
II il evident, therefore, that the pros
poet that the resumption net will he re-
pcalcd cuts uo figure among the current
spccumtions OF the money market
Whatever else congress may 10 the ~
sumption net il evidently believed Is 10
beyond It's power to repeal ~, PdH
pionfer Press,