The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1896-09-04


avail themselves q snch opportunities 70.
speculation, a source of national immor'
atty in creating vast opportunities for
gambling In the Medium of exchange, con
ditiors which in the past have resulted
from schemes Of fiat money, during our
own periods of state banking, and in war
times when gold was at a premium? That
this would be Wall streets opportunity,
no one need be told who can recall the
feverish transactions o the Gold Elk
change. And because this is undeniably
true, "the friends of silver who wish
to strike down gold with a view of wreak-
ing some imaginary harm to Wall street,
are the real friends of the worst ele-
ments that Wall street harbors. For
while the legitimate operations of the
street would be injured by having silver
as a medium of excbange-which would
provide rs with a rapidly ~fluctuating
measurement of the dollar from week to
week, from day to day, from hour to hour,
the gambling operations of Wall street
you'd be reinforced by as powerful a
factor as ever gave to the accidents Of
chance their deIusive and dangerous fas-
cination.
Does the present measurement of the
dollar in 25.S grains gold have a ten
dency TO increase the ate of interest?
Let US examine a few facts. The bank
ers and merchants of Great Britain bor-
row money at a rate of interest lower
than anywhere else in the world-less
money is there required to effect ex-
changes. The London bankers hold only
from 10 to II per cent. of their deposits
as a reserve; our bankers hold from rs
to 80 per cent. Here is a demonstration
of how vast and complex a world of
commercial transactions may be based or
a trifing amount of gold. And the low
rate of interest in Great Britain proves
beyond question tha the gold standard
gives to the Shylocks no undue advan-
tage.
Now the reasons money cannot be Dor
rowed by the Western farmers save at
usurious rates of interest is because the
kind of collateral which they have to
offer is necessarily of an u-nsubstantial
and variable kind. This is the chief ex-
PLANTATION Of the nigh rates of interest
paid by the Western farmer who would
borrow money on his land The security
is poor, and that this IS SO is proven by
large numbers of those who have invest
ed in Western farm mortgages. And this
is q sufficient answer to one of the falla-
cies urged by the friends of silver ana
the advocates CT cheaper money.
Another is that (which speaks of 1.-THE
owners of gold'-of those who control
the yellow metal" Who are the owners
of gold? They are the depositers an saw
ings banks; the hundreds of thousands of
men with a five dollar gold piece in their
pockets, and the old women who have
secreted gold coins in out of the way cor
ners. These are the owners of gold.
But, of course, it is not these individ-
uals to whom the opponents of the gold
standard refer. They are the bankers.
who are popularity supposed to create a
scarcity by boarding. But what, in nor
ma times, follows a gold scarcity? A rise
in the rate Of interest, and an immediate
freeing of a sufficient amount of gold to
restore the equilibrium, and thus to pre-
vent or break the corner. To those who
believe that all financial and economic
systems should conform to natural law,
there is something in this obedient flow
of gold to centres where the movements
OF trade make gold temporarily scarce,
that should suggest the true relation of
that metal TO commerce. This result can
not fail to occur at ali times, save in
periods when the gold standard SIS threat
ened
Nor do bankers hoard, save in excep-
tional times like the period through which
we lave just passed. aud for which hoard
ing the silver men and not the banks are
responsible. Indeed, bankers are always
willing 10 loan, and often beyond the limit
pr safety; and the supposed "tightness''
of money in normal times is a symptom
rather of financial health than disease,
since 1t is a proof that money is active.
in which times there is, of necessity
greater prosperity; and for such tight
ness the bankers, of course, are not re-
~sponsible. And there is positively no con-
neetion between the volume of money and
its ~tightness. The "cornering of gold,
comes from a general boarding on the
part of the people-the banks included
and is sometimes, indeed usually. the re-
suit of a loss of confidence in the Gov
ernment's willingness or ability to main
tain the gold standard The Temptation
to such boarding is the profit that would
come to the holders of gold should the
silver men reduce the country to a silver
basis. Withdraw this fear and the hoard
ing Immediately ceases.
DANA MILLER.