The Portland daily press., 1893-08-11

unhappy country, in the form of a "war
indemnity. France had paid this money
with surprising promptness, and in 1872
it was in the Golfers of Germany The
latter country had. until that time been
on a silver basis, being virtually a
silver monometalic country She now
determined to put her gold into circula-
ton; call in the greater portion of her
silver; melt it into ingots and sell it in
the markets of the world.
There was great futter at once in the
silver market. Here was Germany with
a great mass of silver, some said SIS, 900,
coo worth, ready to demoralize the mar
ket. AT once there was a panic In 1873
the Scandinavian States changed from
silver to a gold basis; then the Latin
Union closed it's mints to the free coin
age of silver. Under this succession OF
reverses silver fell rapidly in value In
1878 the ratio was l to Is. 80; in 1874, L
to 1917: in 1875, to 16. So; and in 1876,
1 to 7.4s; in 1878 it rose to l to 10. In
the fifteen years since that date the con-
Vi SllNCI las grow Ii 0uSeeStAAJ "OASSs
and at this time in the estimation of
the worlds market, % or 80 parts of
silver are required for one of gold, the
ratio averaging about 1 to 49,
In all that is said about ratio the dis
tinction should be borne in mind that
legal ratio and market value ratio are
two different things The laws of a
country prescribe that in coming gold
and silver certain ratio las to Is 1-2 in
France, or to Is. 966 in the United
States) shall be maintained. Such ratio
has usually been established at about
the market ratio; but does not change
with it except by new enactment.
The market ratio is determined in the
London market, where silver is bought
with gold. The price quoted is for one
troy ounce of standard silver" thirty
seven fortieths fine, and is always quoted
in pence. Therefore the ratio between
gold and silver of the same fineness, or
between pure gold and silver, may be
determined by the following formula,
CAB being the value in pence of an ounce
of gold:
943
Ratio.
Quotation
in Pence
Thus, if the price of silver in London
is Gid for troy ounce, as it was during
1865, it will be found by working out the
formula that the ratio was about Is. 49,.
In the Boston papers "wednesday, Aug.
9zg3), quotations showed bar silver at
34d in the London market. At this
rate the ratio was to 27.7.
Some journals give the quotations OF
silver in American money. In that case
the ratio may be determined by dividing
the value of an ounce of gold in cents
by the quotation for an ounce OF silver
in cents-
2Oe6
-=RatiO.
Quotation
in cents.
The market ratio being given, 1t is pos
sible by comparing it with the legal
ratio at which our silver is coined, to
ascertain quickly the value of the silver
in our dollar at any date. By Wednes-
DAVIS quotations in the London market
27.7 parts of silver were required for one
of gold By our coinage law only ID. 50
parts are required. Therefore:
M Rstie 1888 200 cents y va in dollar
Substituting the market ratio of We'd
nesday:
OF TX aQ >, 100 cents 6S cents.
Thus IS cents was approximately the
intrinsic value of our silver dollar by
Wednesdays quotations for the London
silver market.
Closely connected with the considera-
ton of ratio, comes the tendency OF
what is called the heaper metal to drive
out the dearer This tendency has an
important bearing on the silver question,
and deserves to be dwelt upon at some
length. It is plain that if the intrinsic,
or bullion, value of coin is the same
as the value stamped on its face, that
coin will be received with confidence and
paid out without reluctance. Thus, the
gold eagle is worth ten dollars either as
coin or bullion, and no more, because
the 25S grains Of gold are Of the stand
ard money metal of the great commercial
nations Now suppose we have silver
dollar, made of bullion which when
melted up is worth 103 cents in gold,-a
supposition quite contrary to present
rsality,-the bullion value of ten OF these
dollars will be worth $10.3 in gold. Now
both being legal tender, it is evident that
the man who has debt of ten dollars
to paw will give his creditor ten dollars
in. gold, reserving his silver money to
melt up for the profit on the bullion.
The speculator also, will seek to buy
ten silver dollars with ten gold dollars,
in order to resell the silver in bullion
form for 5000. Thus the silver dollars
will disappear. They have been driven
out by the cheaper dollar, on the law
that the cheaper money always drives
out the dearer.
This is nc fanciful illustration. II
actually happened in this country AS
hos oI,ooJxr Lao,, ,,o+od tho 6icooxyapV nj