The Indianapolis journal., 1895-05-11
BRAZIL's HUGE JOB.
Effort to Place the Republics Paper
Money on n Par with GOld.

WASHINGTON. May 1o.-The Republic of
Brazil has begun 10 strengthen her gold
reserve and reduce her paper money. Senor
Mendonca, the Brazilian minister here. has
received copies of a decree calling for
loan of 100,000,O0o contos. or s50,GO0,0o0. Part
of this was taken by the people in the form
of popular loan, much as Senator Sher-
man urged as the most desirable manner
Of floating bonds. loGi this, sl0.oOo,OGO was az
once used in redeeming paper money and
$l5,o00.000 more will be used for the same
purpose. The important feature of this
step is that Brazil is strengthening her
gold reserve and reducing her paper money,
with view TO bringing her two forms of
currency gold and paper to an equality.
"At the present time, said Senor Men
donca, ''our paper currency is worth 40
cents on the dollar in gold. This deprecia-
ton was due to the large issue of paper
some years ago, when the printing presses
were started and flood of paper bills, as-
gre3atng 375, ,Goo,o0O or little short of the
United States issue of 'greenbacks,' was put
into circulation. The gold reserve of Bra
suit therefore of putting out this large
amount of paper, while the gold reserve
remained unchanged, was to send gold TO a
premium and the paper money TO a dis
SO small. compared with the
gold balance. that paper was actu-
paper miIreis being n gold penny above par
But with the increase of the paper cur
rency, its value gradually fell until, as |
have stated, the current rate is about ~
cents on the dollar OF gold 90 per cent.
discount.
These conditions" continued the mini
ter, are what give Importance to the pres
ent step by the Brazilian Minister of
Finance to redeem the paper. After taking
up sI5coo.ooo the outstanding paper none!
will be reduced by about IL per cent At
the same time our gold balance is being
maintained at its fun figure. The natural
result therefore, will be TO give a greater
gold value to the remaining paper outstand-
ing. Instead of paper being al a discount
of so per cent. ii will be Immediately re-
duced to about i5 per cent: But the first
great step will have been taken toward
bringing paper money up TO the full
value. dollar for dollar, TO gold. When
other redemption OF paper occurs. it Will
still further reduce the discount of paper
and thus. slowly but surely, Brazil will have
currency either )f gold o. of taper. tear
ing the government stamp which is worth
as much as gold. OF course such paper
money cannot be called flat To be sure
IL is not a coin note, and it bears merely
the stamp OF the government assuring it's
credit but when il pnssss current with
gold. that is a sufficient proof OF its value"
Senior Mendonca says G:is step does rot
mean that Brazil intends &c adopt the geld
standard. ut is not 50 Tnii&n that as 1t
is "A determined purpose 10 restore COM
piete credit TO it's paper currency" said
he. Probably all nations are striving TO
secure the most perfect standard of value Ii
happens with the United States. having gold
and paper as the two main forms of money
that gold is naturally the standard. There
is some silver used as sIIbs iiaTv coin. trt
not sufficient TO live Us bimetallSm in
the sense used in the United States with gold
and silver coined, and circulating side by
of gold and silver. and We expect to make
our paper as good as gold.