The weekly intelligencer. [volume] (Lexington, Mo.) 1891-1901, 1896-07-25

did a larger business at better rates.
The credit OF q country is not determin-
ed by its currency, but by its prosperity.
Thus India S credit, the rate at which
she borrows, has greatly improved side
by side with the depreciation of her cur
rency. So also has Russia'S. OF the
Argentine and Brazil it is not TO much
to say that lncOnvertable paper issues, !
and the stimulus thus afforded their
exports because of depreciation, has
alone enabled these countries to con-
tinue paying the interest on their fore,
loans. And what is lacking in the
United States is not really the lenders
confidence in the currency; it is rather
the conviction Cf both borrower and
lender that money invested in Il ia n or
factory will earn no profit; that the
pains and perils of IL fresh resumption
period are inst ahead, and that while
prices over there are even now depressed
below the point of possible prOnt, they
must be depressed - per cent further
yet before imports, uhder any tariff,
can be so checked as 10 permit gold to
remain at home in the cuI Iency. And
further than this, let me ask how. if
imports are to be checked by high
tariff; is the necessaI : revenue to he
secured for the federal government? If,
then, as | believe, the critical position
of the United Stat IS results from the
present conditions of exchange between
Europe and Asia, and can only be rem
edied by some action which will raise
those exchanges, much may be said for
the policy of free silver, even should
that policy involve gold premium in
New York. 1t is not the exporter from
America who will be hurt by that pre-
MUM; it is the e.. lort II to y America
other words, thec English manufacturer.
But let me go fuI ,heg, and ask your
reasons for believing that the United
States is unable to maintain the parity
OF to 16, assuming, as we may assume,
that IT the I mexican n ntS open. to the
free coinage of dollars we shall open
mints again to the, ,ee coinage of dpees.
Are there any scientific grounds for the
conviction, so GeuerallvNIeld. that such
mOnet1. J union as his bime, .allism
in America and silver mOnOmetallism in
India wO1ld fall to maintain the world s
parity? l do not venture, of course, to
dogmat:ze as to this; but the problem is
so interesting and the experiment by
the United States-whether next year
or in l90l-is so extremely probable.
that it is worth while for those who
held that the experiment would be
attended with disaster TO offer some
thing for our consideration more convin-
cling than prophecies.
In the first place, then, free coinage in
America would bring the Asiatic
cAClldIlSCS " liIC
moment, at least-and, assuming that
you are right. and that there would be
panic sales of American securities held
here. perhaps e4O,0O0,OOO sterling of
American gold would flow into Europe.
This great flood of gold would be likely
to initiate prices here to some extent, to
thus increase the exports from the
United States, and also to reduce the
gold premium at Buenos Ayres and else
where, thus checking exports of wheat.
etc, which compete with similar exports
from America. And, again, the prodig
ious rise in the exchange with Asia
would eA pand European exports to Asia
and, until gold prices here had risen,
would greatly contract exports from
Asia to Europe. Thus double influ-
ence favorable to the balance of trade in
the United States would be eXerted.
The United States would export more
to England because Asia would export
less, and thus Americas s gold, as well as
her securities, would go back to her.
Secondly, because England selling more
goods to Asia, the rupee, the dollar, and
the yen being at par, England could
then also buy more produce from the
United States Thus, while rec coin
age in the United States might, i'll the
first place tend to displace gold. there |
would almost simultaneously be exerted !
an even more power lul tendency for
order to liquidate what it seems to me
must be an immense trade balance in
favor of the UpIt d States. AS to the |
absurd idea one frequently encounters, |
that Asia will dump silver upon the
American mintS and carry off gold. it is
hardly necessary to examine this fallacy. |
1t is for the ObjectoTS to show why Asia |
should give the metal which to her is |
alone money in order to buy the other
metal which is not money, and why also |
the white metal should be withdrawn |
from the boards of the Orient at that
moment when it appreciates, i'll order |
that it NAV be exchanged for the yellow |
metal, which has just deprecated almost |
one-half in terms of rupees.
The present Lord Aldenham then |
Mr.. IIucks Gibbs), in his evidence be-
fore the Currency Commission in 1856, |
declared that, in his judgment, America
with oIen mintS could maintain the |
parity without help. There is no one
who has had a larger practical expert |
ence of exchange problems than Mr..
Gibbs; there is no one whose opinion is
more entitled to respect. And since
that evidence was given what have we
seen? On a certain Monday in June,
1898. we saw the two metals at parity |
of to 2l: on the Friday of that week
the parity had become ! TO 304. And |
why? Because the Indian mints had |
not possible to argue seriously that,
while the closing of the Indian mints
had thus enormously reduced the god |
price of silver. yet the re-opening of
those mints would have failed to bring
about rise; SO that it is fair to assume
that if between Monday and Friday the
ratio fell from l to 81 to / to 3O4, then
between Friday and Tuesday, had the
Indian mints been re-opened the ratio
would have risen from ] to 800 to / To
"a. And supposIng, further, that on
Tuesday the United States had accepted
free coinage at to Is, is it inherently
improbable that such IL vast country.
with such a bCundlesS exporting capac-
ity, could have lifted silver to 5S4d?
Permit me to recapitulate. The diff
ference between open mints and closed |
mints in India had been demonstrated
by the experiment of 1892 to be silver at
30}d and silver at 3S4d, and this having
been ascel tained, is it the folly, it it the
lunacy, is it the dishonesty that the
New York press so glibly declares it, If
we venture to hold that the difference
between open mints in the Urited
States and closed mints in the United
States, is the entire difference between
3S4d and 5S4d? In other words, if India
contributes a % per cent lift to silver by
giving it free coinage, why cannot
America contribute further 50 per
from l to n to to Is? What, permit
me to ask, with much respect, is your
view as to this? We are aware that you
favor bimetallism, and not merely "by-
and-by metallism.h Either a monetary
union over a strictly limited area will
establish the parity, or, if not, then the
whole system is chlmerical; because if
bimetallism needs to be universal, then,
also. it follows that our opponents are
correct in declaring that the system is
impracticable, because the detection of
one or two warning nations would serve
to destroy it.
The new French prime minister, NJ.
Meline, on Saturday last, when pointing |
to the rapid spread and acceptance by |
experts of the bimetallic theorem, declar- |
ed that what alone is now needed is the |
electric spark Such an electric spark |
may very well prove to be free coinage |
plank in the national democratic con-
ventiOn, which meets at Chicago on
July 7. For even if the republican
party should elect its president, still
Il