The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-07-09
A warning From south America.

A Warning From south America.
We have never doubted that the people
want sound money. The great majority
of those who are now in favor Of the free
silver coinage either believe that this
country's credit is sufficient 10 keep the
silver dollar on a. parity with the gold
dollar however much silver may be coin
Cd. 1Or else they do not understand what
the free coinage OF silver at the ratio OF
Is 10 ! means. When they are brought 10
a fun knowledge Of the truth they are
quick 10 abandon the silver craze and de-
clare themselves 10 be in favor Of sound
money.
As a matter Of fact the free coinage Of
silver at the ratio OF 1s to means the Is
suing Of an unlimited amount Of fat
money, because the market value Of the
silver in the silver coins would be worth
only half the face value Of the coins. II
these fiat silver dollars were kept on
parity with gold dollars IT would be by the
credit Of the government. And how long
would the credit Of the government keep
them on a parity with gold dollars? only
so long as the government could redeem
the silver dollars with gold dollars when
the silver dollars were presented for re-
demption. How long that would be is ap-
parent from the fact that the government
found It extremely difficult to keep silver
and gold dollars on a parity at the time
the purchasing clause of the Sherman
silver law was repealed. Indeed. It was
not keep them on a parity much longer
that brought about the repeal of that
clause.
Fiat silver money is practically the same
as fat paper money. 1t becomes cheaper
as the volume of it is increased. The fed
eral government issued a large amount OF
fiat money during the civil war, and it
became worth less than half as much as
gold. The confederate states issued a vast
quantity of fiat money and it became alb
solutely worthless.
The Argentine Republic furnishes a later
illustration of the destructive effects Of
fiat money on national and individual pros
perity. Up to 1884. that republic was on
gold basis and was extraordinarily pros
porous. Her credit was high and she
could borrow all the money she needed for
the development Of her agricultural re-
sources and for business purposes.
In 1884. her prosperity received several
severe checks. These checks had no con-
nection with the quantity or quality Of the
money in circulation. They were due to
causes wholly Independent of the curren-
cy, but the people thought the way to
overcome them was to issue fiat money.
The July Century Magazine, in an edito-
rial article speaking OF the effect which
this fiat money had upon the republics
prosperity says: This flood Of paper was
swelled till it reached a total of s3SOOOO 900
"a per capita OF 500 for every man, wo>
man, and child in the republic, all ire
deemable. and worth only about twenty
five cents on a dollar. In 1890 the collapse
came: the republic went into bankruptcy,
banks were left without a penny, land
was unstable at any price. business came
to a standstill, and the per capita money
circulation Of 800 gave way to per capita
debt of more than the same amount"
The Argentine Republic has I'M
dertaken to get rid of her
vast volume of cheap money
by redeeming ss.oOOo0O Of it each year. II
will take her many years to restore her
credit. In the meantime her commerce is
languishing and her vast agricultural re-
sources are not being developed because
she cannot get the means with which to
develop them. Foreign investors will not
risk their money within her limits, in en-
terprises of any kind. 1t is impossible to
estimate the damage she has suffered from
the mismana cement of her financial at
fairs. In closing its comments on the
Argentine Republics cheap money disas-
ter the Century says:
Great, rich, and resourceful as is the
United States, we should be brought to
the same condition as the Argentine Re-
phblic'were We TO follow the same reckless
and dishonest policy. If we were to repu,
date our solemn obligations, were to pass
from gold to a silver standard, thus re-
pudiating at a single stroke over half of
our debts, the flow of capital and labor
from abroad into our land would cease al
once. The mere possibility that we might
do II, few months ago, sent American
securities which were held abroad rush
IhS dCISsS lne AtIdHtlc 10 De SOld mere in
such volume as TO turn the tide of gold
to Europe in alarming quantities Moth
ing but President Cleveland's prompt and
determined action TO uphold the national
credit at all cost checked the calamity Of
national bankruptcy at that time We
must not make the mistake which the Ar
gentine Republic made of thinking we are
great and rich enough to stand anything.
No nation has ever lived. or will ever live.
great and rich enough to be foolish fool
hardy. or dishonest without suffering the
consequences.
A Wise Committee.
The action of the democratic state CEN
trail committee of Missouri in refusing