The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-03-04
AN INTERESTING ARTICLE.
THE MEANING OF GOLD EXPORTS


philadelphia American.)
When, the market being in a state of
uncertainty the speculator in the Chicago
wheat pit hears of gold exports he intui-
lively looks for lower prices-in the Ian
guage of the pit he turns bear. With the
brokers in the wheat pit it is we'll rec
ognized axiom that the export of gold,
other things being equal, means lower
prices for wheat, though they may not un-
derstand the cause. And this confidence
of the brokers in the belief that lower
prices will follow gold exports is well
founded. True, and of this the specpla-
tors are we'll aware, the price of wheat
may rise in the face of gold exports, for
although even the rumor of gold exports
is used as an effective argument by the
bears, the effect of such rumors on the
wheat market tending to depress prices
may be entirely offset and counteracted
by news of a bullish nature, such as in
juries inflicted On the growing crop, etc,
and the prospect of short crop. But it
is none the less true that the knowledge of
gold exports always has tendency in the
grain pit to depress prices. On news Of
gold exports bears sell and bulls hesitate
to buy, bears hoping that under the in
fuence of gold exports prices will 80 fall
as to enable them to buy back at profit
that which they sell and contract to de-
liver, and the bulls hesitating to buy for
fear that prices will further fall
The reason for such effect of gold ex-
ports on the grain markets is simply this
The export of gold means that our for
eign creditors regard gold as cheaper
than wheat Or other produce, it means
that at the price at which wheat is held
at such times the foreign demand s cur
tailed, it means that our foreign creditors
find they can take gold from us and buy
more wheat at Russian, Indian or Argen-
tine ports than they can at New York.
Our production of wheat being more than
sufficient for our own consumption, there
is only demand for our surplus at prices
that will tempt foreign buying. When
gold is taken in preference to wheat, 1t
means that the price at which we offer
our surplus products is not low enough TO
induce free foreign buying. The result is,
supply at such price outruns demand and
prices fall until European demand springs
up in sufficient volume to restore the equl-
librium between supply and demand.
What is true of wheat, is true OF cotton
and all other staple articles OF export.
All our chief commodities of export tend
to decline in the face of gold exports, for
gold exports mean that such commodities
are held too high to induce foreign buy
ing-that the foreign demand will be re-
stricted until prices fall.
For the producer then, what is the
meaning of continued gold exports? For
the farmer it means lower prices for his
wheat and corn. for the planter less re-
turn for his crop of cotton. The lesson to
be drawn from the renewed exports OF
gold in a month when the export of our
produce should be largest. when under
normal conditions gold should flow to. not
away from our shores. is that prices have
net YET reached that low plain which gold
monometa!ism makes inevitable. AS
much as our producers have suffered
from falling prices. they still must suffer
more if we adhere to the gold standard
Gold papers to the contrary, our farm
ers will receive less return for their labor
this year than ever before. The planting
and reaping of the crops has not enriched
but Impoverished them and brought them
one step nearer to bankruptcy. Cotton,
we are told, has advanced, but the cotton
yield will be but two-thirds of normal
crop. The average return for the labor
of the planter will be no greafer than last
year Cotton is. indeed, higher, but the
planter has less to sell. Of course some
producers in favored sections in Alabama
and Georgia will be benefited, but they
will be benefited at the expense of the
Texas planters whose crops have been ru