Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1893-06-07
THE PREMIUM ON GOLD.
1t Is Simply an Increase In the Purchasln
Power of the Gold Dollar.

per, we say lndL Lnere Is a premium
on gold"
If one hundred dollars in gold are
worth as much as one hundred and four
dollars in silver, we say that gold is at
a premium of four per cent If one
hundred dollars in gold buys as much
commodity as one hundred and ten dol
lars OF paper money, we say that gold
is at premium of ten per cent.
What causes this premium on gold?"
Sometimes it comes from natural rea-
sons; at others from those which are
artificial
very great over-production of sill
yer, In comparison with the produc-
ton of gold, would cause the silver to
become cheaper internationally; Just as
very great production of gold
has heretofore been known to make the
yellow metal SO cheap that nations
ceased to coin it as money at all.
Again, both gold and silver would rise
above paper currency, from merely nat
ural causes, when the government issu-
ing the paper promises was in such
condition that the business world could
put no faith in the national obligations
Thus confederate money went down as
the government itself went down.
Gold and silver having intrinsic value
where the paper had none, the two
metals rose above the worthless paper
which was issued by a failing govern
ment.
These are instances of gold going to
premium from natural causes
The same result follows when by the
laws of a country whose credit is un-
questioned there are certain obliga-
tions which can only be paid in gold.
Each of the causes has a tendency to
produce the premium on gold.
They do so, indirectly, by making
that kind of currency perform certain
exclusive functions.
They do so, indirectly, by creating
special market for gold, as distinguished
from other kinds of money. This
market, like all others, can be ''cor-
nered."
does just what monopoly does every
where it raises the price.
In this country there has been for a
long while an effort to have the custom
house duties payable only in gold to
have the interest on the bonds payable
only in gold, and to have certain con-
tracts for the loan of money payable
only in gold.
Now, it can readily be seed that if
the government encourages this policy
and sets the example of preferring gold,
it becomes an active member of the
gold premium" cons piracy.
The present democratic administra-
ton is doing that very thing. 1t is car
rying out the republican programme of
paying to the holders of silver purchase
notes nothing but gold, when the law
says they shall be paid in either coin.
Lay aside the law and common sense
would say that silver note ought to
be met with the silver and not with
gold; with the commodity which was
deposited when that note was given,
and not with some other commodity
In fact, the law directs the coinage of
the silver purchased for that very pur-
pose.
Hence, when Mr.. Cleveland and Mr..
Carlisle persist in a policy which fur
ther increases the special demand for
gold (Which demand is purely artifi-
cial), they play into the hands of Wall
street, and hasten the upward march
of gold.
How does the gold premium" hurt?
TO answer this question fully, one
would have to discuss the whole prob
lem of finance. 1t is sufficient, in this
instance, to say that the premium on
gold means that one form of currency
has risen above all the others; that it
controls all the others; that it rules
the markets; tina it dictates prices and
squeezes values.
To allow one kind of currency to as
sess the value of the others, and to fix
all the prices in the business world, is
contraction upon stupenduous scale.
The president who would propose to
destroy all our paper money and to
melt all our silver, would kindle the
flames of insurrection in this country
before the sun went down.
Yet the president who says that gold
must have the mastery over silver and
paper money, does an act whose conse-
quences are precisely the same. He re-
duces the amount of our real money by
virtually saying that gold alone is the
real money.
All teachers of political economy agree
that prices adjust themselves to the vol
ume of money in circulation. Cut down
the currency, and you cut down prices.
Cut down prices, and you make debts
harder to pay. They absorb more
labor, more produce, more Hand, more
houses, than they did before Hence,
bankruptcy and ruin.
f.frha Io1lor IN,,1,,s ,,,o,.o kl..-
did, says the capitalist. So it does.
Buys more labor, more cotton, more
corn, more land.
The dollar is harder to get with
labor and labor's produce. But it pays
no more of the debt than it used to pay
The claim has been made that as le-
gal tenders are cheapened by the gold
premium, the debtor can more readily
obtain them and pay off his debts with
them.
This is unsound. Silver and green
backs get no cheaper in comparison
with cotton or wheat 1t is the gold
which gets dearer in comparison with
them all.
1t requires just as much cotton or
wheat to get the silver or greenbacks
oNt' ~ NNAN CNAChC pIO NCnJ 10 d DTcu-
ium; but it requires more cotton. wheat,
silver and greenbacks to get the gold.
Again. it has been claimed that as
cotton and wheat are priced in gold
standard countries, the advance in the
value of gold would mean an advance
in those commodities.
Let us see. When gold advances it
does so at the expense of something.
What is that something which falls be-
hind? 1t is the other kinds of money.
Now how could silver or greenbsclxs
fall behind gold if they could continue
to purchase just as much wheat and
cotton as ever, when compared with
cold? And how can producer get
more silver and greenbaclSs for his pro-
ouce when the relation between those
forms OF currency and his product have
undergone no change whatever?
.zl.