The herald., 1896-07-23

| price OF wheat will increase the demand
for dollars to invest in its production.
| Then the borrower of dollars to invest
! in the production of wheat, being reason
| ably sure of a profit from that employ
ment of money, can afford to pay inter-
f, est for its use as part of his profit In
| other words, interest is a share of the
| profit on the employment of money. So
that abundant money readily obtaina-
BILE, which is to say really cheap money,
is the money which commands high
rate of interest as a share Of the profit
| of the borrower in using it.
| We appeal to the country in the Justice
of our cause on two points in common
inquiry must be satisfied-as follows:
The experience OF Mexico is held up for
our alarm. We answer first that Mex
leo is conspicuously prosperous at home.
! Her increase in manufactures, railway
| earnings and the like in recent years is
| phenomenal
Second-Mexico is no criterion for the
United States, for the reason that she
has foreign trade Indebtedness of about
$40, 900, 900 in excess of the value of her
exports of cotton, sugar, coffee. hides
and the like, which must be paid for in
| the surplus product of her mines Her
silver, therefore, goes abroad as mer-
| chandise and at valuation fixed by the
| outside world The United States, on
the other hand. is a nation of 70,000000
people scattered over territory seven
| teen times the area of France. single
one of our railway systems. the Erie,
exceeds the aggregate railroad mileage
of all Mexico. We offer employment for
money to an aggregate greater than the
worlds spare silver Will furnish. Hence,
our silver at home and abroad Will be
valued as the money of the United States.
The opposition threatens us with flood
| of Europe's silver upon our reopened
mints. We answer, Europe has no sill
yer money. Her silver money values
| silver at from cents to cents on the
dollar higher than ours. Hence, the
European merchant or banker must sac
rifice from three to seven Fer cent of his
full legal tender money in order to re-
coin it at our mints. Europe's silver
ware. like Americas silverware, car
ries in it the additional value of labor
and the manufacturers profit.
They theraten us with a flood of silver
IIOlH lIlt Lar tdSl. < dilSM 0l tAil tiic
course of silver is invariably eastward
and never toward the west British In
dia is a perpetual sink of silver, absorb
ing it never to return by from fifty to
sixty million dollars worth every year,
And India's absorption of silver will be
enlarged by the steadness of price for
silver fixed by our reopened mints.
They threaten us with sudden re-
tirement of 100000, 600 gold with an ac-
companying panic, and causing contrac-
ton and comercial disaster unparal-
leled"
We answer that our total stock Of
gold, other than about 800, 100000 or
$3.50, 900, 900 circulation of the Pacific
coast, is already in retirement. Prac-
tically all our gold is in the United
States treasury or held by banks. The
gold held in the treasury will remain
there if the secretary avails of his option
to redeem United States notes in silver.
The gold in the banks constitutes the
quiet and undisturbed portion of their
reserves against their liabilities. 1t will
continue to do money duty as such re-
serves after free coinage of silver is
| enacted. Hence premium on it will not
contract the currency. The utmost pos
| sible contraction Of the currency will be
| the few millions circulation on the Pa
cific coast. and this will be retired but
slowly.
A similar threat of flight of gold was
made for the Bland act of 1878. Presi-
dent Hayes was urged to veto it, but
congress passed it over the veto. In.
stead of a flight of gold as had been pre-
r'Gicted. we gained by importations, 81
100000 the first year; SIC, 600 900 the next
and s9O,0OO,00O the third year. During
the twelve years that the act was on the
statute books we gained $221 900, 900 of
foreign gold. Instead of the destruc-
tion of our credit abroad as had been
predicted, the United States four per
cent loan, which stood al 101 on the day
of the enactment, sold at 120 per cent
within three years, and at 130 per cert
subsequently. Instead of defeating the
resumption of specie payments on Jan
uary l of the following year, the 26,-
100000 silver dollars which were coined
in 1878, and circulated by means of the
silver certificates, reduced the demand
on the government for gold. Hence, the
threat of disaster now is without historic
foundation. This, too, is what will fol-
low the reopening of our mints to silver.
The gold already in the treasury will re-
main there If common sense dictates
the treasury management-that is if the
treasurer exercises the option to redeem
United States notes in silver.
a premium on gold Will not occasion a
contraction of the currency, bank
boards of gold continuing to serve as a
portion of bank reserve against bank
liabilities.
a premium on gold will tend to in
crease our exports by causing higher
rate of American exchange-that is to
say. by yielding a larger net return in
dollars on the sale of bills of exchange
drawn against the goods exported. a
premium will tend to diminish our i'm
ports by increasing the cost of bills of
exchange with which to pay for goods
imported.
The tendency of increasing our ex.
ports and decreasing our imports Will
be:
First-To set our spindles running,
swell the number of paid operatives, in
crease their wages, thereby adding to
| the number and paying capacity of con-
sumers, and thus enlarge our home mar
| llet for all home products and manufac-
! lures with prosperity in general as the
| result assured. The tendency of in