The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-09-09
A PREMIUM ON. GOLD.
Before Gold Could Go to a Premium
1t Must All Disappear From
Circulation.
THE EXPORT OF gold WOULD cheaper
GOLD AND HENCE RAISE PRICES.
Market for Our Products Would be Broadened
and Thus Would Our Indebtedness
be Lightened.
Philadelphia American.

The gold cOntractiOniStS seem lmbued
| with the notion, at least, they let no OPP
portunity pass of imbuing others with
the belief, that if we should open our
minis to the free coinage of silver gold
would advance to such premium that it
would take twice as many dollars to pay
our Indebtedness that is by its terms pay
able in gold, as now; that in brief, the
burden of all gold obligations would be
| doubled, and that our inability to Shout
| der these increased burdens would lead
to the bankruptcy of all those who have
been so unfortunate as to incur indebted
ness payable in gold
| But 1t is upon property that debtors
must depend for the payment of their in
debtedness; it is with commodities, not
gold, that debts are virtually paid Now,
we are told that the free coinage of sill
yer would give us 53-cent dollar, that
the price of everything measured in this
dollar would be proportionately en-
hanced, in short, that prices would be
| nearly double what they are now. Our
| producers, we are further told, would be
Obliged to sell their produce for 53-cent
dollars, that consequently the burden of
their debts, which they would have to pay
In 100 cent gold dollars, would be nearly
doubled, that they would have to give two
silver dollars where they now give but
one. But If prices were so enhanced. the
debtors could obtain two silver dollars
Tor the same quantity of produce with
which they must now part for one. in
what way would they be injured, even if
they had to part with two silver dollars
to obtain one gold dollar? Clearly the
burden OF their Indebtedness would be
greater than now. If the planter got
double the price in silver for his cotton,
ana the farmer double the price for his
wheat, 1t is obvious that the burden of
thelr Indebtedness would in no way be in
creased, even if gold were at a premium
or 100 per cent; that if they got twice as
much for their products they would be no
worse Off even if they had to give twice
as many dollars as now in satisfaction of
a gold debt
But that gold should go to a premium
OF leo per cent is. outside the range of
possibilities. It might go to premium,
but to a premium, equal to the present
difference in the bullion value of the gold
and silver dollar, never. Before gold
could go to premium, all our gold must
disappear from circulation, and disappear
from circulation it could not until silver
in equal volume was coined to take it's
place. Gold would not only leave the
United States because it would buy more
somewhere else than here, because our
foreign creditors could buy more cotton
with it in India, more wheat in Argentine
and Russia with the ounce of gold than
here. In short, If prices of those things
of which our foreign creditors have
need were higher in America than else
where, gold would be exported Other
wise it would not Consequently under
free coinage our gold could not be ex-
ported until silver was coined to take it's
place, for only an addition to our curren-
cy would cause prices to rise so that gold
would buy less of our products than of
the products of others. A contraction of
our currency, such as would be inevitable
upon the export of gold, would inevitably
force down prices, and this would put a
stop to gold exports, for lower prices
would tempt our foreign creditors to take
our products in preference to gold.
So until silver in equal volume to our
gold was coined our gold would not be
exported, and there could be no premium
on gold. But suppose silver to an
amount equal to the gold we now have in
use as money was available for coinage
and coined, and suppose that as a result
our gold should disappear. Where would
it go? In idleness it could not forever be
kept with profit. Gold of itself is useless
Men do not want gold for COLDS sake, but
for what gold will buy. Only by exchang-
ing it for the products of labor can it be
made to serve the needs Of man. So our
gold would go where it would find use as
money, go where it would be of service in
exchanging the surplus products of labor.
To silver using countries it would not go.
There it would have no more demand
than here. So to the gold standard coun-
tries of Europe it must go, to be added to
their stock of money.
And what effect would this disposition
of cur gold have on our producers? Evil
IDENTIFY the sending of our two or three
hundred millions of gold to Europe would
make gold more plentiful there as it be-
came more plentiful it would be easier to
get and cheaper, prices would rise. And
just as gold prices in Europe rose, the
further would our wheat and cotton sent
abroad go in payment of our gold indebt-
edness Thus our producers would be
benefited, and our debts lightened not
made heavier by the export Of our gold.
And while gold was thus falling in
Europe, whence we had sent our gold,
what would be the effect on the price of
silver of our demand for two or three
hundred million dollars worth necessary
to take the place of gold? Clearly, the
| increased demand would cause it to ad-
vance. How much would depend upon
the supply of silver available to fill this
demand? If supply at our coinage price
sufficient to meet the demand could not
be obtained, the parity between gold and
silver at our coinage ratio would be re-
stored, our gold would not disappear, and
it could not go to a premium. And,
meanwhile, Whist must be the effect on
gold prices of the enhanced gold price Of
silver? AS the gold cost of the ounce
of silver rose, the cost of everything
bought by the gold using from the silver
using countries and paid for with this
ounce of silver, would rise in like pro-
portion; for exneFence teaches that the
silver prices asked by the silver using
peoples are not dependent on the gold
price of silver.-They regard silver as
stable-as indeed it has proven for
many years. They look upon gold as
rising and falling in price, and they ask
for their products the amount of gold
which will bring to them a fixed amount
of silver. If gold commands large
premium, and a small amount of gold
will buy the ounce of silver, the gold
price they ask for their products is pro-
portionately small. If the premium falls
price in silver they insist upon obtaining
not price in gold.
&c. just as the increased demand con-