The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1896-08-22

land. France, Germany, and other ma
lions, and both are quite inexplicible
according to the philosophy of our free
coinage men.
The banking law of Chill was very
lax 20 years ago, but until the expul-
sion of gold the banknote circulation
was not large. But when gold went
out of use the banknote circulation
increased rapidly, because people
would not handle silver in considerable
quantities. Here is a perfect duplicate
of our experience in the early part of
this century. What we did many years
prior TO 1884 the Chilians did for sew
eral years after 1874 Chilli had to
reduce the fineness of minor silver, as
we did in 1853 and France did a dozen
years later, in order to keep small
change in circulation. After silver had
displaced gold because it 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 were
inconvertibIe. The paper presently
declined, and for several years before
resumption it was very low and going
lower. The original gold peso was
worth 40 pence, sterling; the paper
peso was worth less than half of that
when the legislation of 1892 and 1893
was enacted designed to reestablish
specie payments on the basis of a peso
worth "a pence. This legislation was
conditional and impracticable, and the
peso declined till it was worth but
111R pence. When the resumption law
of 1895 was passed the government had
to take notice of the fact that engage
ments had been entered into which
depended upon the promise of the gov
eminent to redeem at "a pence, but
to do that when the peso was worm
but half that amount was felt to be
imposing too heavy a burden on the
state, so that a compromise was
effected upon the basis of a peso of
18 pence. The latest and the success
full resumption legislation provided for
the redemption of the banknOtes in gold
also; this had not been provided for in
the earlier acts and was leading rea-
son for their ill success. On June l,
1895, the government and bank paper
became redeemable in gold coins on
the basis of a peso of IS pence.
A good part of the gold for the pur-
pose of resumption was procured by
Chilli, as it was by the United States,
on bonds sold in Europe. But there
were two striking differences between
CHILEAN resumption and ours. They
destroyed the redeemed notes. We
reissued the notes, and we have re-
deemed them over and over again, using
for that purpose the gold revenues of
the government, and when they ceased
gold procured by bonds. When the
Chilians redeemed a note they made
sure that it would not come back again
for repayment. They wished for no
endless chain We waited till the
paper money had appreciated very
much before we promised to resume;
then we fixed a date of resumption
four years ahead, and that encouraged
the appreciation of the notes, so that
they were practically at par before
the date of resumption arrived. The
Chilians voted February IL to resume
June L, the peso being at the time very
greatly deprecated, and they reduced
their coin not to the level of the paper
but toward it. By the law of 1851 the
condor of 1872 grams of fine gold is
the equivalent of 20 pesos. The coined
silver peso has been reduced from %
to 20 grams, it's fineness has been re-
duced from 900 to 1876, and it is a
legal tender for not more than 80 pesos; |
the fineness of the gold coins has been |
increased to the British standard, and |
the pound sterling is a legal tender for |
Is 1-3 pesos.
Free silver coinage was without any |
in Chill, and the only oppo- |
sition to the resumption legislation !
came from those who urged that the |
should wait till the paper peso |
had appreciated to par before under |
taking it. AS the paper peso was |
depreciating this party did not prove !
very powerful.
IANDI ORD,S SALE