The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-04-10
COINAGE FALLACIES
INDEPENDENT NATIONAL ACTION ON
SILVER WOULD BE RUIN0Us.
The Per Capita Now Greatly Exceeds
That of Thirty Years Ago-JnIfn-
tied Coinage Theories Upset.
Washington Correspondence Philadelphia

Washington Correspondence Philadelphia
Press.
the well-known political friend of Mr..
Cleveland. declared in an interview in Gin
cinnati the other day. which was pub
lished in the Press of April 8. that the
silver question would throw all other ques-
tions into the background in the next presi-
Dental campaign But he went SO far as
to say that national free coinage now would
result in "a tremendous revival of bust
ness, money turned loose. factories going
full capacity and trade of every silver
country coming our way" This declaration
has already done good service in Western
and Southern papers in behalf of free silver
and coinage, and coming from an Eastern
college president, and friend of President
Cleveland, it will naturally have consider
able influence, although the opinions of
thousand better known and wiser men
than President Andrews could be quoted
to the contrary. Senator Sherman said
yesterday that the free coinage of silver
by the United States alone would result
in the most tremendous financial panic this
country has ever known, and that it would
paralyze business and trade beyond any,
thing ever known in the history of any
nation of the world" But, of course, Prof.
Andrews, young man comparatively, who
has studied the question from theoretical
point of view, will be accepted by the silver
men good authority, while Senator Sher-
man. with his forty years experience in
of the Treasury, will merely be put down
among these silver people as a gold bug"
That appears to be the only answer they
can make to the Senator'S argument Where
the tremendous revival of business would
come from that Professor Andrews speaks
of is more than Senator Sherman can dis
cover.
There is stock Of silver in the world
s624, coo Is in the United States If
the minis of the United States are opened
to the free coinage Of silver, the entire A-
900, 100000 of silver IN the world, which is
now worth only about so cents on the dollar,
must be increased in value one-half, or else
silver basis, and gold would become a COM
modify. It requires no argument to show
not by any possibility. lift this vast stock
of silver to a parity with gold, at the ex-
If ra e s fnS coany The tbsrs n
silver anywhere to be brought to the United
States to exchange for gold have been
Treasury Department to be absurd.
IN FOREIGN BANKS
There is $640, OO0, 600 of silver in the vaults
of eight banks in. Europe, according to the
London Economist. 1t is absurd to sup
pose that those banks would not exchange
a large amount of that silver for our gold
even at loss if they got the opportunity,
especially jas some of them have been pay
ing a premium for American gold within
the last year. That would mean that the
gold in this country under free silver coin,
age, would Immediately go to premium,
and would no longer be a part of the cir
-culating medium of this country. Accord
ing to the sfsts there e. goS
The free coinage of silver would mean the
immediate contraction of the currency to
Professor Andrews says that it would turn
money loose" If the minis were set going
at their full capacity coming silver dollars,
it would take many years to make up for
the gold that would be Withdrawn from cir
culation the moment that the free coinage
tho volume of money has anything to do
with the business of the. country, as Pro-
fessor Andrews implies, then this enormous
contraction of the currency would have the
opposite effect of what he asserts. And it
would bring about just as Mr. sherman
AS soon as it became evident that this
country was going to adopt such a policy
all foreign investments not payable in gold
would rapidly be withdrawn, because such
well as domestic debts one-half. According
to the best estimates this country sends
$4,000, 900 a year abroad to pay interest and
dividends upon American securities held
there. AT 5 per cent, which is a liberal
estimate for such interest and dividends,
United States of 81 500, 100000 A similar
amount is estimated as the profits of for
eign corporations doing business here, and
of nonresidents, derived from real-estate
investments, partnership profits and so
. forth, to say nothing OF nonpaying securi.
ties. That would double the amount of
foreign investments in this country. 1t
would make a total of So, 900 OO0, 600, which
under free coinage Of silver s Wona p nra
fly of such legislation would lead to the
prompt withdrawal of all that foreign cap
ital, or of much of 1t as could be got out
of the country before the scaling actually
took effect. This is no guess work, be-
years the withdrawal of a vast amount of
foreign capital under the scare that was
got up because of silver purchases Inc
contraction of the currency to an amount
of over s627. 0O0.0 00 and the withdrawal Of
vast millions of foreign capital would, ac-
cording to Professor Andrews. cause
tremendous revival in business.
A GREAT DISADVANTAGE.
The foreign trade of the world is now
carried on under a gold basis. If mer
chant exports shipload of goods to Mex
leo the Mexican purchaser pays him in a
bill of exchange, generally drawn on Lon
don, payable in gold And if the merchant
in Mexico sells a cargo of goods to some
one in New York he receives in pay SIM
liar bill of exchange. AS the circulating
medium of Mexico is silver. and as silver
Is constantly Huctuating In Vaiue-d nue.
tuation which last week amounted to sew
eral per cent an allowance must be made
for this possible fuctuation. For instance.
If the Mexican merchant wanted bill o.
exchange on London last week he would
have had to pay a broker or banker prob
ably 10 per cent. more in Mexican money
than he would have had to pay l.
gold. 1t would be weeks. probably, after
the bill of exchange was drawn in Mexico
before il would be paid in London in gold.
Hence the banker or broker in drawing the
bill would have to make allowance for the
possible fluctuaton in the value of silver
from the time the bill was drawn until it
was paid in London. And of course the
man who bought the bill of exchange
would have to pay more Mexican money
to make up for that possible loss in silve.-
Mr. Lyman j. Gage, the well-known CHI
cago banker, who inve stigatel this matter
in Mexico. estimated that thi amounted to
a tax of from 10 10 per cent on all of
Mexicos foreign trade. For the fiscal year
1894 the total foreign trade of the United
States was s1,5f7. 135 1874. If the United States
should adopt the Mexican system for the
free coinage of silver this country would be
in precisely the same condition as Mexico,
so far as its foreign trade is concerned:
And If this brokerage on the total OF all
our foreign trade amounted to only per
cent. 1t would aggregate $40. fl4,Oo5. which
would ont of the producers and go
into the pockets of the bankers and brokers
of New York and London. That would be