The herald., 1896-09-20
The opposition threatens us with flood

The opposition threatens us with flood
of Europe's silver upon our reopened
| minis. We answer, Europe has no silver
but her silver money. Her silver money
values silver at from cents to cents
on the dollar higher than ours. Hence
the European merchant or banker must
sacrifice from to per cent of his full
legal tender money in order to recon 1t
at our miISS. Europe's silverware, like
Americas silverware, carries in it the
additional value of labor and the man
ufacturers profit.
They threaten us with flood of silver
from the far east. We answer that the
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 $40, 0OO. 900
| to SEQ, 600, 900 worth every year. And
midas absorption of silver will be en-
| larged by the steadiness Of the price for
silver fixed by our reopened mints.
| They threaten us with a Sudden re-
| tirement of $500 900 gold. with the ac-
| companying panic. causing contraction
| and commercial disaster unparalleled"
| We answer that our total stock of gold,
| other than about 10000, 900 or SIS. 00O. 900
| circulating on the Pacific coast, Is al
ready in retirement Practically all our
J gold Is in the United States treasury or
held by banks. The gold in the treasury
N Eema!n there # th ga HffEstthhs bS SnEs
constitutes the quiet and undisturbed
| portion of their reserves against their
liabilities. 1t will continue to do money
duty as such reserves after free coinage
for silver is enacted. Hence premium
on it will not contract the currency. The
utmost possible contraction of the cur
rency will be the few millions circulating
on the Pacific coast, and this will be re-
tired but slowly. q.
A similar threat of a fight Of gold was
made for the Bland act of 1878. Presi-
dent Hayes was urged to veto it, but
congress passed it over his veto. Instead
of flight of gold, as had been predicted,
we gained by Importation 81, 900 900 the
first year, s7,0O0,O0O the next, and 500.
100000 the third year. During the twelve
years that the act was on the statute
book we gained 1921 100000 of foreign
gold. Instead of the destruction of our
| Grsolt ABROAD, as had been predicted, the
United States 4-per-cent loan, which
stood at 101 on the day of the enactment.
sold at 120 per cent subsequently,. In,
stead of defeating the resumption Of spe-
cIe payments on January of the follow
ing year, the 24,oo0,OoO silver dollars.
W., , were coined IN 1878 and circulated
Dy means OF the silver certificates. re-
ouced the demand upon the government
Tor gold. Hence the threat of disaster
now is without historic foundation.
rms then, Is what will follow the re-
opening OF our minis to silver: The gold
=. IN the treasury will remain there
II common sense dictates the treasure
management; that is, If the treasury ex-
erclseS lts option to Observation-Disclosures
notes In silver. A premium on gold
VIII not occasion a contraction of the
currency, bank boards of gold contin,-
ing to serve as portion of bank reserves
asalnst their liabilities A premium
on gold will tend to increase our er-
ports by causing higher rate of foreign
exchange, that is on the sale of bills of
exchange drawn against goods import
co. Such premium will tend to dimin
ism our imports by increasing the costs
OF p1ils OF exchange with which to paw
Tor goods imported.
me tendency of increasing our ex-
ports and decreasing our i'm lorts will |
De, hrst to set our spindles running. swell |
the NUMBER OF paid operatives, increase
thelr wages, thereby adding to the Num- |
per ana paying capacity of consumers.
ana thus enlarge our home market for
all nome products and manufacturers
with prosperity in general as the result
assured. ~ eui'
Inc tendency of increasing our exports
ana decreasing our imports will be sec
ond, to establish a credit balance oe
trade for the United States./ A credit
balance of trade means that Europe has
become our deotor and must settle
money is overvalued in her gold, COM
pared with ours by from to 7>rgi,ts on
the dollar. The European merchant ny
banker will therefore make his trade
settlements with us in gold, more profit
ably by from 3 to per cent than in
his silver. With the instant that Eu-
ropean trade settlements with the Uni
ted States are made in gold, parity for
our gold and silver money is established
in the markets of the world.
herewith the 371.25 grains of pure sill
yer In our dollar and the 1922 grains of
gold In our gold dollar become of ex-
actly equal worth, as bullion, in New