Mexico weekly ledger., 1895-05-09
Some Primary Financial Facts.

Some Primary Financial Facts.
From the Louisville tky,l Gourisr journal.
"Nili the Courier journal, AZ the
spokesman of the so-called souno
money advocates" writes DIR. s. f.
Hampton, of Milton, Ky, "answer the
following questions for the enlighten'
ment of its readers, or at least that
portion of them in darkness upon this
s%ubiect?n
The Courier journal IN always will
ing to comply with such requests
| when they are made in good faith and
by persons willing to study intelli-
gently and fairly information when
given them.
''The bonded Indebtedness of the
| world being thirty-tive billion dollars,
| which at , per cent gives al annual
interest of several hundred million
dollars, five hundred millions of which
is added to the principal debt every
year, and there being only ten billion
dollars in both gold and silver coin in
the world to-day, when can these
national bonds be paid? If never,
then how long before it will require
all the gold and silver coin in the
world to pay the INTEREST,""
Without stopping to discuss the ac-
curacy of our correspondents figures,
we would say that he starts off labor
ing under the radical error which
affiicts most "cheap" money advo-
cates-that the wealth of the world
is in its actual money, and that a dol
lar is necessary in every transaction
measured in terms of a dollar. These
mistaken people represent the esti-
mated amount of gold in the world as
equaling a cube of certain proportions,
and with it weigh all property and
labor. They do not stop to consider
that no money at all passes in 80 per
cent of the business transactions; that
not cash, but credit, as represented
by checks, drafts, etc., is the basis of
90 per cent of the worlds business;
that compared to this vast volume of
credit all the gold, silver and all other
kinds of money are insignificant. The
bonds of all nations could be
paid simultaneously on any one day,
just as nc bank, however solvent,
could ever pay at an hours notice all
it's obligations. There are in the
banks of the United States two or
three times more deposits alone than
there is money of all kinds in this
country. That, however, does not
mean that every dollar of these de-
posts a not be paid without en-
ploying but a small proportion of the
money in the country. National
debts are paid out of the resources of
the nations, the sweat of the people.
The dollar that goes into a national
treasury and goes out again in pay
ment of principal or interest of the
bonded debt goes in and out in the
same way many times. One good
dollar does the work of a hundred
dollars; a bad dollars chief work is
to drive out good dollars.
ii.
ssIf the amount of coin is only ten
billion dollars, half of which is silver
and half gold, would not the d%estruc-
ton of silver as money have the eff
feet of Fastening the time when it
will require all the money in the
world to pay the INTEREST,""
This question is answered in the re-
ply to the first question. Besides, we
know of nobody who proposes to de-
stroy silver as money. Even the free
silver men who are clamoriDg for
cheap money would not destroy sill
yer as money entirely. They want
to cut its purchasing power down by
one-half, but they want more OF it.
The gold standard countries are the
only real friends of bimetallism. 1t
is the gold standard countries alone
which have both silver and gold coin.
1t is the gold standard countries
which maintain both the gold half and
the greater part of the silver half of
the worlds coin. 1t is the free silver
men of the United States who would
strike from our circulation all our
gold
"If the determined efforts of the
Rothschilds and the Bank of England
to demonetize silver did not the
depreciation of its market value, what
did?"
The chief cause of the decline in the
market value of silver is to be found
in the increase of the supply and the
decrease of the demand. 1t is not
contended that the preference by the
civilized world for gold rather than
silver as a circulating medium has not
had much to do with lessening the
demand for the latter metal, nor is 1t
contended that if the leading powers
would combine for the greater use of
silver it's value would not in some de-
gree enhance. But it is commended
that the United States could not, in
the face of the enormous increase OF
silver production, restore the value OF
that metal by opening its mints to it.
Such an experiment, as is proved by
ali history, would only result in de-
priving us of our gold. Ever since
the discovery of America the move
ment of the value of silver relatively
to gold has been downward; in 1885,
the fall became more marked, and
within the last year the disparity be-
tween the two metals has been greater
| than ever before. The decrease in
the demand for silver has kept pace
with the development of the credit
system referred to in our reply to the
first of DIR. Hampton's questions. This
system avoids the inconvenience and
| risks of handling large sums of money.
! but under it the exchange of a certain
amount of money is necessary, and
the demand is for the most profitable,
least variable and that in which there
is most general confidence. "This
being the character of the monetary
desires of modern ~nations,o says
Laughlin, the ablest historian of bi,
metallism, "the opportunity of salts