Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1886-01-31
The Great Economtst. Mr. Frewen,
Takes an English View OF the Gold
supply.


The Great Economist. Nr. Frewes.
Takes an English View Of the Gold
supply.
To the Editor Of Bradstreets:
Sir,-Your issue for December 9Th
contains a very exhaustive statement OF
the present currency involvement in
the United States from the pen Of Mr..
Edward Atkinson. know of no one
whose statistical researches have so at
tracted the world on this side the seas
as have Mr.. Atkinson's; and | confess
that, in view of the necessary limita-
ton of every mans capacity for work,
grudge any departure of the talented
author of 1.-THE Distribution Of Pro-
ducts into currency conjectures, to
the neglect, perhaps, of department
of science in which he has few, if any,
living equals.
The entire standpoint Of the currency
controversy is as to whether or not
gold is rapidly approaching, and thus
becoming insufficient to measure an i'm =
mensely-increased commercial produc-
ton. Some fifteen years since the Lon
don Economist estimated that to sus-
tain prices an annual production Of
some 930,00O,000 in gold was required,
and in its review Of the year 1873 (the
year after Germany's decentralization OF
silver the Economist, at that time |
believe edited by the late Mr.. Walter
Bagehot, describes the financial future
in these words " Unless the annual pro-
duction of gold suddenly increases the
money market of the whole world will
be disturbed by this scarcity Of metal"
Now, what is the present production
and distribution Of gold? Is it or is
it not sufficient for international require
ments? The text of Mr.. Atkinson's
statement is that gold must be sufficient,
because since 1916 the aggregate of gold
was doubled. while the aggregate Of
population shows an increase Of less
than 40 per cent. 1t would, | think,
be easy to demonstrate that previous to
the California discoveries, in lS49, gold
was entirely insufficient to supply a
currency medium for the comparatively
limited volume Of commercial trans
actions; that as result prices in gold
monometallic England were constantly
falling, the burden of all debt increas-
ing, and that an obstacle far greater than
any tariff restrictions was preventing the
expansion Of international trade. But
even assuming that gold was currency,
and sufficient currency, over an area
equally as wide as now, what is the
value of any statistical deductions
based, as Mr.. Atkinson's are, upon the
quotient of gold divided by population:
Suppose that 81, O0O,OO0,00O Of gold
have been produced in the last ten
years, and that the entire mass has been
absorbed by jewelry and the arts, this
great mass of gold, so far from relieving
and expanding the supplies Of gold
in currency, must have caused a
still further appreciation Of gold,
because more gold would be required
in the surrencies to measure and
effect the exchange Of this volume Of
the metal which has been sucked into
commodities. And, the illustration
apart, what are facts? Soetbeer, a
gold monometallist, who is possibly too
busy with his statistics to pay much
to the social evils resulting
from a contracted currency-Soetbeer,
who is the recognized European au
thority as to the production statistics of
the precious metals, estimates the total
yield of gold last year at less than
&l6,000,000. He shows that Of this !
amount 100000 were absorbed by !
iewelry and the arts and more than
"a, 100000 were purchased by In
da, instead Of silver, to be hoard !
ed in that country, which has no |
gold currency. 1t follows, therefore,
that while in Europe commodities which |
require a currency medium are increas-
ing with great rapidity, the gold re-
quired to measure this production is
actually diminishing, and thus credit,
which here has gold basis, is shrink
ing, and therefore prices are falling. |
And to emphasize the actual terror of
our position, we need only turn to the |
estimates of the gold you had in cur
rency in 1878, which DR.. Linderman
returned at s244, 100000, and which
the Hon. II. Burchard reported twelve |
months since to be s6l0,000,0 900; that
is, while Europe is getting no new gold |
to coin you are draining her sup
plies on hand at the rate of nearly |
el0, 100000 year. Is it any wonder
that we have panic Of prices here, and
that, as every authority seems to be
agreed, we are on the brink Of a tre-
mendous fall in wages:
The United States, let me say in con-
clusion, is scarcely less concerned than
we are by contraction Of our cur
rency. Such a contraction means a
fall in prices that is, American ex-
ports, when sent here, have to be paid
for at price which is constantly falling.
Yours faithfully,
MOREToN FREwEN.
London, December 80.
Manchester Streets.
MANCHESTER, VA, Jan. %, 1886. !