St. Paul daily globe., 1896-03-31
MEXICO AN OBJECT LESSON.

0ueAiCo 10 iFleITeu 10 aI one anu the
same time as being an illustration of
the good and the bad effects of silver
basis. There>is probability for each
view. It depends entirely on the point
from which the observer looks. During
our civil waEgia stranger coming here
after the firstihnaAciai pinch WAS over.
seeing prices rising, money, such as it
was, plenty, industry booming, might.
If a superficial thinker. have come to
the conclusion that the old country
governments acould learn lesson in
finance from the young republic, and
discard, for irredeemable paper fat
ed by the government. their
stocks Of gold and silver. The craze
of greenbacks had its rise In the de-
lirium Of those war times Of paper
money.
But. IL he had looked for the things
not seen on the surface, he would
have found reasons to question the
seeming prosperity. He would have
seen the government issuing immense
quantities Of bonds, for which 1t re-
ceived its greenbacks at par. He would
have seen the greenbacks at a dis
count of from 40 to 60 per cent, MAX
ing the actual gold value Of the bonds,
subsequently redeemed In gold or con-
verted into gold bonds, from 40
to 60. He would have seen immense
quantities Of imports doubled in value
by the simple process Of transmitting
their gold values into paper prices. He
would have seen domestic manufact-
ures stimulated to excessive activity
by the double spur Of tariff on i'm
ports payable in gold and the differ
ence In the exchange bought to pay
for them. He would have seen this
premium on gold the football of the
exchanges, the money itself COM
modify constantly fiuctuating when
measured by the paper. He would
have foreseen that there was sure to
come time for liquidation, for pay
ment OF promises to pay, private and
governmental, in actual, not fictitious
money; Of rapidly falling prices, Of
commercial failures, Of stringency and
disaster. He would have seen men
clamor for more of the stimulus that
had produced the industrial delirium,
as the sot cries for liquor In the iassi-
tude following a debauch, and he would
have seen political parties making
cowardly concessions TO the clamor.
Much Of what such one might have
seen and foreseen here one can see and
foresee in Mexico. It is true that a sill
yer basis stimulates manufacturing. be-
cause the premium on gold operates as
protective tariff. equal to the premium
on gold, by increasing the price, stated
in silver, of the articles imported. We
see government per cents payable in
silver quoted at At In European mar
kets. while government gold per cents
are quoted at o.. One can easily un-
derstand that manufacturing estab-
lishments are paying large dividends
and that banks, dealing in exchange,
are declaring dividends OF from 10 to
16 per cent. These are all surface in
cations of prosperity, but they do not
disclose the whole nor the real condi-
ton. The fact is that, whatever prices
may be, the purchasing capacity Of the
mass Is narrow, wages are low and
prosperity is limited to those in a po-
sition to receive the benefit Of the gold
premium. Nothing Is more certain
than that this apparent prosperity will
fade out when settling day comes; that
artificial conditions cannot endure, and
that the economic penalty for violation
OF economic law will be exacted with
infexfble certainty.