The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-10-30
AN INSTRUCTIVE LESSON.
PROSPERITY Lam
CASHIRE DISTRESS.
How the Gold Standard is Ruin.
ing the Countries that Possess it.
(The Philadelphia American.)

(The Philadelphia American.)
Twenty years ago the japanese peo-
pie turned to Great Britain for their
cotton goods. Now they not only
manufacture cotton goods for their
own use. but are competing for the
markets of China and the Straits with
British manufacturers. Twenty years
ago the Lancashire cotton mills were
earning remunerative dividends, not
cotton spindle was at work in Japan
and the British manufacturers rely
ing on an uni ust treaty eXacted from
Japan at the cannOn'S mouth a treaty
that took from the Japanese govern
ment the right to protect her own in
dustries and encourage the establish
ment OF manufacturers i'll Japan by
imposing import duties of more than
five per cent ad valorem, on importa-
tionS of British goods, felt assured Of
the japanese markets for the cotton
goods for all time. Yet to-day the
manufacture Of cotton languishes in
Lancashire and prospers in Japan, the
Lancashire mills as a whole earning
not more than one per cent as divi-
dend on the money invested in them,
while the mills in Japan, grown up as
it were in a night, and competing
with the old and firmly established
mills and experienced hands of Lam
cashire are earning twelve to thirty
per cent for their stockholders.
Unprotected by import duties, the
growth of japanese manufactures in
the face of what appears to the super
ticial observer, the absolute free COM
petition with British manufactures,
seems ineXplicable. But to those who
have st udied the effects of the diver
gence in the value of gold and silver,
and the protection that the premium
on gold in silver-using countries has
extended to manufacturers in such
countries, this growth causes no sur
prise. Nominally unprotected, the
japanese manufacturers are better
protected against foreign competition
by the premium on gold than they
could be by the possible protective
tariff.
So long as silver was at par with
gold, the Japanese merchant having
demand for cotton goods sought the
Lancashire manufacturer, who was
then prepared to accept silver in pay
ment at par with gold. But now all is
different. The British manufacturer
refuses to accept that which the
japanese merchant can afford to offer
in payment, silver except at discount
equivalent to the divergence in the
value of gold and silver. The Japa-
nese merchant was ready to pay the
price demanded in gold when his sill
yer was at par with gold. but now
when gold is demanded, gold that is
worth twice as much in silver as be-
fore, he cannot afford to do SO.
Suppose the Japanese merchant
wants to buy cotton goods in Lanca-
shire. Gold is demanded in payment,
but the japanese has no gold to offer
He may offer to pay the price demand
ed in gold in silver, silver which is just
as valuable, will purchase justas much
in Japan as ever, but this the British
manufacturer doing business on a
gold basis, and loaded down with the
rent and taxes and interest which he
must pay in gold which is worth
double the silver the japanese asks
him to accept in payment for his
gold in effect comes to this. The
Lancashire manufacturer must ask
the japanese merchant double price
in silver for his goods, in silver that
costs the japanese as much labor to
get as ever, and on the other hand the
japanese merchant can afford to offer
only one-half the price for English
goods in gold (Which is eQuiv lent to
! the same price in silver that he was
| able to offer the Lancashire manufac-
| turer when silver was at par with
gold) The only alternative left the
Japanes merchant is to get the goods
he cannot afford to buy in England
| made at home.
The divergence in the value OF gold
and silver, the appreciation Of gold Of
| 100 per cent measured in the silver
money Of Japan, which buys as much
Of the produce of japanese labor as
ever, and consequently the doubling
Of the price to the japanese Of British
or other foreign goods for which gold
is demanded in payment,h has given the
manufacturer in Japan the advantage
of an iron-b bound protective tariff of
100 per cent. But the premium on
gold has even done more, for not only
has it excluded the prod ucts of gold
using countries from Japanese mar
kets by doubling the price to the
japanese consumer of everything
bought from gold using countries, but
it has aided and encouraged the Japa-
nese man ufacturer to compete for the
markets of goldusing nations; the
premium on the gold which he re-
ceives in payment for the goods he
sells to gold-using pc oples being just
so much bounty on expectation.
The position of the japanese pro-
ducer. protected against foreign COM
petition at home, and encouraged by
bounty, paid by the very people to