The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1896-09-19
THE FINANCES OF CHILL.
A Worry Instructive Chapter on the Re.
lation of Gold, Silver and Paper.

The experience of Chilli in bimetal-
lism ana inconvertible paper and the
painful steps required to return to the
gold standard. are SO very instructive
as to be worthy of considerable space.
This history is told in Il recent report
from the United States minister. He
shows that the same cause will produce
the same results now as in former
generations.
The law of 1851 established bimetall-
ism in Chill on ratio Of 1882 10 l.
It will be observed that this was dis
tinctly unfavorable to silver as
money metal, for the United States
ratio of l5SS to ! was too hish, ana
the French ratio was 15.5 to /. The
Chillian ratio had the effect. which ap-
pears to have been its purpose, or
sending silver out of the country ana
and bringing gold in so that the coun-
try used silver in the settlement OF its
International balances and circulated
gold coin. After 1874 silver fell so far
that the ratio of 1853 was too low.
and i'm his report for 1876 the Il rector
of the Chillian mint said: "As Il re-
suit of the commercial ratio of | to
l1G23 Chillian gold, which before was
favored. has become undtrValu"d in
commercial trans actions by about 1la
per cent. AS | have before stated. we
have not had to wait for the result.
The abundance of this gold coin has
been followed by its almost entire dis
appearance from our market Prior TO
the decline Of silver, silver coins did
not circulate subsequent tn that gold
coins did not circulate; both results
are in absolute accord with the eX-
perence under like conditions Of the
United States. England. France. Ger
many. and other nations, and both are
quite iuexplcable according to the
philosophy OF our free coinage men.
PAPER INITIATION.
The banking law of Chill was very
lax 20 years ago. but until the expulsion
OF gold The hank note circulation was
not large But when gold went out Of
use the banlInote circulation increased
rapidly. because the people would not
handle silver in considerable quanti-
ties. Here is a perfect duplicate of our
experience in the early part of this
century. What we did for many years
prior to 1884 the Chilians did for sew
eral years after 1874. Chilli had to re-
duce the tincness of minor silver, as we
did in 1853 and France did Il dozen
years later. in order to keep small
change in circulate After silver had
displaced gold because ii was cheaper.
and been displaced in turn by paper
because it was lighter, the war with
Peru and Bolivia occurred and led to
very large increases of government and
bank paper. and these issues We're in
convertible. The paper presently de-
clined, and for several years before
resumption it was very low and going
lower The original gold peso was worth
A. pence. sterling: the paper peso was
worth less than half of that when the
legislation of 1892 and 1893 was enacted.
designed to re-establish specie pay
ments on the basis of a peso of "a pence.
This legislation was conditional and
till it was worth but 11ia pence. When n
the resumption law OF 1895 was passed
the government had to take notice of
the fact that engagements had been
entered into which depended upon the
promise of the government tn redeem
at "A pence. but to do that when the
peso was worth but half that amount
was felt to be imposing too heavy a
burden OH the stae, so that u comprom-
ise was effected upon the basis of a peso
of 18 pence. The latest and the success
full resumption legislation provided for