The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-09-04
SILVER-USING COUNTRIES.

There is a general disposition on the
part OF silver-using countries to relieve
themselves from commercial dependence
on countries that have adopted the gold
standard. The silver countries say truly
that as long as they buy goods OF gold
coun tries. agreeing to pay in gold. they
cannot know what prices they are paying.
If silver falls In Its relation TO gold the
prices are higher; il silver rises the prices
are lower. In either case buying goods
from a gold country IS something OF a
gamble. If silver countries trade with
each other their currency will not be al
fected by fluctuations between gold and
silver. The coun tries which have adopted
the gold standard are the principal manu-
featuring countries in the world. Hand
some profits have been made by the rise
in gold, in addition to the ordinary profits
of trade. Selling raw materials to manu-
featuring countries and buying finished
goods Of such countries has kept the raw
material producing countries poor, while
the manufacturing countries have grown
rich. When the raw material-produclng
countries needed money the manutactur-
ing countries have loaned IL. taking care
that bonds were made payable in gold
The statement has been made on good
authority that London capitalists bought
hundreds Of millions of the currency of
the Argentine kepu bic at its market value
and loaned the same stuff TO the Govern
ment with the simple and seemingly inno-
cent proviso that the bonds should be
paid, principal and interest, In gold. 1t
has even been ascertsined that a good
deal of the currency exchanged for
oIA Nuo nfnr Oft 10
this may be difficult of proof, the
fact that the genuine currency was
printed in London shows that an Oppor-
tunity was offered for the alleged fraud.
The silver-uSing countries, almost without
exception. are paying interest in gold on
bonds that were issued when there was
but little if any difference between the
commercial value of gold and silver in the
legal ratio. But the appreciation OF gold
has nearly doubled the actual burdens of
these debts. Nearly twice as much as
formerly of the products of the silver
countries has to be sold to get given
amount of gold. 1t is not surprising.
therefore thai the Mexican FIndncier sees
ia this wide difference between the values
of the currencies of silver countries and
of gold countries an opportunity for Mex
leo TO Increase its foreign trade. Mexico
is the natural leader of silver countries in
finance and trade. II it lacks machinery
or capital. the United States will supply
both. In fact American capital is as ready
10 work in Mexico as in the United States.
The United States is at present on the
gold basis and will remain so for some
years. We cannot, therefore. offer the
silver-usng countries of Asia and South
and Central America the advantage of a
financial union with a common dollar, but
through individual action in Mexico we
may share the coed results of such an
alliance. The gold nations in effect have
a union. No debt can be paid in one of
them in currency that is not acceptable at
the three great banks of England. France
and Germany. The United States seeks
membership IN the European union
rather than with the silver countries. But
Mexico is in a position to take advantage
of our financial dependence upon Europe.