Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1896-05-03
The Money Question and Foreign
Investors.

10 lUe LlllOr OF tAe DlsldiCn.
In Mr.. Goddins very courteous reply
% my article on 'The Way out Of our
Financial Difficulties" published in your
edition Of April 18Th he has entirely over
looked the method Of the reasoning, which
is what is known among mathcmaticians
as the 're1uctio ad absurdam" process.
The cases OF the trustees, as / put them,
were hypothetical
The existing relation OF things can, per-
hape, be better understood by the fol-
lowing illustrations: Suppose q traveller,
going to Mexico with 1000 American
silver dollars in his pocket, changes them
10 10000 Mexican silver dollars, and is
called suddenly back. When he presents
his 1000 Mexican dollars 20 the United
States bank he can no longer get back
his 1000 United States silver dollars
Although there is actually more weight
of silver I'm the Mexican dollar than in the
United States dollar. he only gets back
about 600 United States silver dollars. or
course any traveller or trustee, knowing
the condition Of the exchange, would de-
mand 1900 heavyweight Mexican silver
dollars for his 10000 lightweight United
States silver dollars. Now. the point l
wish 20 bring out and emphasize is this,
that unless The traveller or investor de-
manls 1000 Mexican silver dollars for his
lOO9O United States silver dollars he
loses heavily. Many such transactions
would ruin him. The inevitable result
OF this must be that Americans investing
u Mexico must demand that repayment
DE maze tlLN'l lu EN.A OF ~ "a tA'atIl
number Of Mexican silver dollars for an
equal number OF United states silver
dollars.
Next. suppose we reverse the positions,
and let us take tho position of the Next
can, and let an English Investor take the
place of the American in the preceding
case. ...noo
suppose an Ene,ishman buys a $4,000
American bond 40 par This costs INN
about 5000 or $1,000 IN god. he comes
over here and sells his bond at par ana
by the laws Of this country the Amer
can compel him 20 accept 1000 Onlte1
states silver dollars in payment. II ne
takes these 1890 silver dollars back win
him to England and tries 10 exchange
them there, he viii no longer set back ms
f2.09o but he Will find out that he only
gets back about II 200, equivalent 70 s1Vy
in gold. OF course. he VIII not take DdSA
the 1900 silver dollars with him, but ne
viii 20 to the United States Treasury,
cet 1000 gold dollars for his 1000 silver
dollars. and then when ne Tc Key ,, "a "a
England he exchanges his lO,eU Dnltci
States gold dollars for 1900 ana Is an
right He has lost nothing by the tranr-
action There Is no danger 10 the foreign
investor as long s the United Stale5 "a, III
and will pay gold dollar Tor every SILVER
dollar or paper dollar on demand. But
If the moment does come when the Ohlle4
states cannot or viii not DO TINS, al.u
the foreign investor IS compeAled 70 lahe
"A silver or paper dollar Tor MS 6olu
money. then he will lose frightfuly. II
was the fear of this contingency by i9r-
oign investors that caused them 10 Ie-
mand pavment OF debts due them 10y
Americans, and TO sell our STOCKS ana
ponds and ret the gold Tor them at
time when the United States Government
was able and willing 10 pay. -.
Looking al the question IRON this point
Of view, 30 will be seen az once that un-
less the United States Treasury Is abe
and does az all times pay out the gol9
when demanded. a fearful loss 70 loIelgh
investors would result Now, 10 Keep
enough gold on hand 10 DO TINS requires
that the government issue bonds with
which 10 buy the gold. This IS nothing
less than that the United states snQuiq
borrow money. or course, II the Ohl.eu
States Us borrowing money, IL colhpeleS
AGAINST ali other borrowers, and, in tact,
MS last bond issue locked up temporarily
about one thild OF all the cash Of the
Further than this, as an Involvement for
foreign investors 10 keep their money
here. instead Of getting gold Tor II ana
taking 10 out Of the country, II is a ne
cossitv that our rates Of interest shou ld
be high Resorts must be made 10 aruH-
cial devices TO keep rates Of money hlgh'
and Of course this stagnateS circulation
and keeps up the existing strngency.
Some might say let the foreign investors
take care of themselves, that when per-
son is dying for the want or meat anu
bread the theft OF II IS legitimate. me
object Of my article was this. 20 make II
ciear-nrst that the situation is exceed
ingly DANGEROUS and complicated, ana
grc3t many interests are At stake inVOlv-
ing greater sums Of money than has ever
before been known In the world;
second, that an ordinary man Is not
capable Of arriving at correct solution
Of the problem, that the question should
be submitted 10 the ablest fnanciers or
t6e world. whose services can be pur-
chased for this occasion by an approprla-
ZION from Congress. that this appropria-
lion should be made, and that they should
be called upon TO investigate the ,condi-
tion of eVrvthing and TO recommend what
10 do under the circums ances, $1,000,
c. L. T.. BURGWYN.