The advocate., 1896-09-16

is it economic law. Properly stated, the
Gresham law is that cheap money al
ways "tends" to displaCe desrer money,
but whether or not it succeeds depends
upon many factors. 1t seldom does
except when there is more money, or sub
stitutes for money, in existence than is
absolutely necessary for the transaction
Of business.
No country ever loses it's metallic
money unless the balance of trade, in
cluding all payments, is against it. Gold
is undervalued 6 per cent. more in India
than it is in America, and 3 per cent
more than it is in Europe, and yet both
gold and silver pour into India in an al
most uninterrupted stream, the reason
being that the balance of trade is in her
favor, and some Of her people desire more
gold while others prefer silver. That is,
as she is master Of the situation, and has
not as much Of either metal as she wants,
she takes both-but several times as
much silver as gold.
Nearly all goldite writer's and speakers
assert that, in consequence Of the change
in the ratio in 1884, which undervalued
silver 81 per cent, that metal imme-
diately disappeared and was exported for
the sake Of the premium; but that is in.
correct. Hugh Mccullough, the first
Comptroller Of the Currency, and who
was Secretary Of the Treasury under Lin
coin, johnson and Arthur, was Cashier
OF the Fort Wayne branch Of the State
Bank Of Indiana from 1884 to 1857, and
President Of the Bank Of Indiana from
that time to 1868. He inaugurated the
contraction policy, and never was even
tinctured with greenbackism. Yet, on
page 10 Of his "Men and Measures Of
Half Century" which went to press in
1887, this most competent witness says:
Although the double standard existed In che
United States the metallic currency OF the
country chiefly, and throughout the West ercit.
siuely from the time the bank was organized, in
1884, to the discovery OF gold In California, In
lS4S, tUds silrGr. The capital OF the bank was
paid up I'm Spanish and Mexican dollars, and
It's revenue continued TO be In this coin until
1t was sold for gold, at q premium OF about
per cent. on Mexican and 6 per cent. on Spanish.
/ had been banker for fourteen gears before
handled or san dOiidr in g0id ercept the ten
ihdLer bieCes brought into The COuntry by German
immigrants. IL Professor Sumner had been q
banker AZ any time prior TO 1S4S, he would not
have gone so wide Of the mark rs he did in
saying, In the 1885 number OF the North Ameri-
can RtpiGw, ave do not want or need silver As
q circulating medium and shall not abandon
IL, because we never had It," We did have iE;
and, sooner or later, we shall have IL again,
and WtthoUt its being deDradcd We are not pre-
pared--the world Is not prepRred-fOr the de.
monetization OF either gold or silver nor can
this preparation be brought about without the
Wlplng out OF very large part OF public and
private debts. Debts contracted when both
metals are used as money would be burden
too heavy to be borne when measured by a
single standard.
What will happen next spring, after
silver has been remonetized, can only be
conjectured. When the Bland bill was
under consideration, in 1878, the leading
bankers Of the East asserted positively
that its passage would at once "driye all
the gold out of the country, and make
resumption impossible" and they appar-
emily believed iJ would have that effect;
but, on she contrary, for the first time in
seventeen years the imports Of gold began
to exceed the exports, and continued to
do 30 until 1889.
1t is. OF course, possible that New York
and England bankers will entirely lose
their senses when Bryan Is elected, and
null damn, thn Rrnnn;nI ,,ln ,,,..., u oi,.