Southwest-sentinel. [volume] (Silver City, N.M.) 1883-189?, 1893-02-28

All this mass Of currency consists
of promises Of various sorts to do
that which it is absurdly impossi-
bic ever to do-namely, TO pay all
obligations in gold. Hence in
England the inflow or outflow of
a few millions Of the specie Of the
Bank of England reserve is a sub
iect Of profoud interest, and the
support Of a large banking firm is
a matter of national Importance.
A reference to a table in "Fenn on
the Funds" for 1889, will show
that while the national stock of
coin and bullion in the Bank Of
England from 1884 to 1856 in
creased 43 per cent, the proportion
of total reserve to total liabilities
has fallen from 90 per cent to Il
per cent. 1t is somewhat para
doxicall in an age of materialism
and scepticism that the basis of all
finance is faith-faith that the con-
tinually decreasing volume of gold
can liquidate the continually ex-
panding volume of obligations con-
vertible on demand; which reason
demonstrates to be impossible.
The function of credit, or com
mercial faith, is that it acts as cap
ital and economies real money.
The economy, however, accrues
disproportionately to those who al
ready have large means; for they
only have a reputation of wealth
and obtain the additional power Of
credit capital. So while the amount
of gold may grow less, capital may
continue to increase in the hands
of those who control the springs of
credit. Some such idea as this is
at the bottom of the conviction of
the working classes that their
material advantages have not in
creased ''pari passu' with those of
the richer ~sclasses. 1t should also
be remarked of credit currency
that, being based on faith, its vol
ume is subject TO the passions of
men unconsciously acting, as in
seasons of ''boom" or panic, or con-
s%ciously under the influence of in
terested motives. These alterations
fall most heavily on those whose
margins beyond their living are
small.
This stuperdous mass of credit
currency being based upon the
opinion hat it can, at will, be
liquidated in money, the fact re-
suits hat real money is still, as it
always has been, the measure of
the value of all other property.
In this quality resides the chief
value Of the precious metals; for,
from the dawn of history, men have
concurred to employ silver and gold
for that propose. Inconvertible
paper money will raise prices
locally and ftfully where it is legal
tender; but an addition to the
worlds stock Of real money raises
prices universally; for the benefit
of its stimulating properties flow
from class to class and from nation
to nation; all sharing a profit until
equilibrium is reached. This is
not a theory only, but a fact in his
tory show 10y the effect of every
addition to the stock of the worlds
metallic wealth whether by the
gold of the early American dis
~coveries, by the added silver of the
mines of Potosi, or by the more re-
cent gold of California and Aus
tralia. In like manner the sub
traction of one-half of the worlds
metallic wealth, through the can
collation. of the exchangeable value
and the debt paying power of silver
must cause a loss which will not be
confined to the silver Kings of
Nevada or the ryots of India but
which will spread from class to
class and land to land until the
property of the whole civilized
worlds has been brought to an
equilibrium of shrunken values as
measured in terms of money. Writ
ers upon monetary questions in
discussing the antecedent causes
of the panics which from time to
time have desolated the mercan-
tile world have been unanimous
in pointing out that these financial
w%hirlwinds have invariably been
preceded by great cancellations of
value by wars, famines or con-
| hnprnfinns the halefnl effects of