The Canton times. (Canton, Miss.) 1893-1906, 1894-08-10
COMMERCIAL SUPREMACY.
1t is Within Our Reach If We Get
Onto q Solid Gold Basis.

1t is Within Our Reach If We Get
Onto q Solid Gold Basis.
That most eminent of all financial
writer's, Paul Leroy-Beaulieu. has an
article in the December Forum enti-
tied conditions for American Com
mercial and Financial Supremacy"
He points out clearly the injury we
are sinficting upon ourselves by agi-
tatlng for cheap dollars, and by keep
ing our Government in the banking
business. These destroy confidence
and scare investors away.
Discussing our ''greenbacks" which
are responsible for keeping our Gov
eminent in the banking business--he
finds that while other great countries
have issued or caused to be issued
considerable amounts of paper money
during critical periods ours is the first
to refuse to take up and cancel its
notes as soon as possible. This was
great and vital error which we did not
repair entirely when we resumed
specie payments in 1879. "a govern
ment," he says sis i'll fitted
and Ill equipped to maintain
paper money in circulation, even if
the paper is redeemable in specie. The
redemption done is in itself a great
trouble and a continual embarrass-
ment." He thinks that the junction
aries of a.government "who must act
by fixed and always identical rules"
cannot make flexible and safe cur
rency out of Government paper.
If the government were out of the
banking business and private banks
were left to deal with the expectation
of gold problem they would, when
harmful expectation begins, raise the
rate of discount until such expectation
is checked. This is what European
banks do in similar emergencies.
When the gold movement is controlled
in this way, it produces ''only a light
and momentary embarrassment, not to
be compared with the shock and the
discredit resulting from an outgo of
gold the end of which cannot be cal
culated.
can advance in the money rate in
order to arrest the outgo OF specie,
particularly gold, is sure to succeed if
the Government does not disturb the
natural course OF operations by arti6-
cial measures Such an advance checks
the imports of merchandise, and, on
the other hand, stimulates exports. 1t
draws capital from abroad to seek the
better returns which are the conse-
quence of this advance.
"Thus whenever the banks, pubic
or private, are charged with the pro-
lection of the metallic reserve of the
country, they accomplish it with GER
tainty by this sovereign method OF
raising the money rate. On
the contrary, when the state issues
the fiduciary currency. as in the Uni
ted States, it has no real means of
protecting the metallic reserve. Il
cannot raise the discount rate, for it
does not discount commercial paper.
It is under obligation to pay gold to
all who demand it, without any power
10 regulate or reduce the demand. 1t
is absolutely disarmed. Its sole re-
source is to secure specie by loans
abroad. But as these loans have no
effect on the general current OF bust
less. their proceeds are soon exhaust
ID and they must be renewed. This
ncapacity to protect its reserve is the
thief reason why state is not fitted
10 issue fiduciarv money"
After discussion of "Bimetallism,"
which should be read by all, NJ.
Leroy Beaulieu concludes as follows:
Gas soon as the capitalists. small
md great, OF Europe snail know that
he United States have definitely
dopted the gold standard and rele-
,ated silver TO subordinate none
airy role the savings of Western
europe will flow toward that country
freed from the fear that he may sou
lay be repaid in deprecated none
very person with savings In
Europe will be happy to find ret
( 81 to 4 per cent. in good Amer
and of to 81 per Ger
be shares of we'll established
an enterprises. Then the
erritory OF the United Stat
Is vast resources rapid
letelv mt in the way