Mexico weekly ledger., 1896-07-30
traction and commercial disaster un-

gold, other than about $4,000, 600 or
SIS, O00, 900 circulating on the Pacific
Coast, is already in retirement.
Practically all our gold is in the United
States Treasury or held by banks.
The gold held in the Treasury will re-
main there if the Secretary avails of
his option to redeem United States
notes in silver. The gold in the banks
constitutes the quiet and undisturbed
portion of their reserves against their
liabilities. 1t will continue to do
money duty as such reserves after
the free coinage of silver is enacted.
Hence a premium on it will not con-
tract the currency. The utmost pos
sible contraction of the currency will
be the few millions circulating on the
Pacific Coast, and this will he retired
but slowly.
"a similar threat of a flight of gold
was made for the Bland act of 1873.
President Hayes was urged to veto it,
but Congress passed it over his veto.
Instead of a flight of gold as had been
predicted, we gained by importation
4 ZOO, 900 the first year, $4,000, 900
the next, and 800, 200 600 the third
year. During the IL years that the
act was ON the statute book we gain
ed 1921, OOO, 600 of foreign gold. In
stead of the destruction of our credit
abroad, as had been predicted, the
United States 4 per cent loan, which
stood 1O1 on the day of the enactment,
sold at 120 within three days, and at
100 subsequently,. Instead of defeat
ing the resumption of specie pay
ments on January / of the following
year, the $24, DOC, 200 dollars silver
which were coined in 1878 and circu-
lated by the means Of the silver cer-
tifcates, reduced the demand upon
the Government for gold. Hence,
the threat Of disaster now is without
historic foundation.
'sThis, then, is what will follow the
reopening of our minis to silver. The
gold already in the Treasury will re-
main there, if common sense dictates
the Treasury management; that is,
If the Treasurer exercises the option
to redeem the United States notes in
silver. A premium on gold will not
| occasion a contraction of the currency,
bank boards of gold continuing to
serve as a portion of bank reserves
against bank liabilities. A premium
on gold will tend to increase our ex-
ports by causing a higher rate of for
eign exchange, that is to say by yield
ing a larger net return in dollars on
the sale of bills of exchange drawn
against goods exported. A premium
| will tend to diminish our imports by
increasing the cost of bills of exchange
| with which to pay for goods import
| ed. The tendency of increasing our
exports and decreasing our imports
will be:
"First-To set our spindles running,
swell the number of paid operatives,
increase their wages, thereby adding
to the number and paying capacity OF
consumers, and thus enlarge our
home market for all home products
and manufactures, with prosperity
In general as the result assured.
''The tendency of increasing our
exports and decreasing our imports
will be, second, to establish a credit
balance of trade for the United States.
A credit balance of our trade mean
that Europe has become our debtor,
and must settle with us in money.
Europe's silver money is overvalued
with her gold, compared with ours, by
from 8 to Z cents on the dollar. The
European merchant Or banker will,
therefore, make his trade settlements
in gold more profitably by from 8 to
| per cent than in his silver. With the
instant that European trade settle
ments with the United States are
made in gold, parity for our gold ane
silver money is established in the
markets of the world. Herewith the
371.2 5 grains of pure silver in u sill
yer dollar and the 1922 grains of gol6
in gold dollar become Of exactly
equal worth, as bullion, in New York