The evening times., 1896-10-15
President La Fetrn, an Ohio Man, Who
Is the Head of the Leading Chiiehh
College, Tells How silver Injured
His Adopted Country ana Warns
His Native Land.

/ ailu sUcisH ti1p 10 lne DHiteu st''es- AZ
present he is visiting friends and relatives
! IN this city. --..' -aIs.r
Prof La Fetra has a broad knowledge
, OF public affairs df the Spanish republics
ana an extended acquaintance with their
| officials and political leaders. lie is a
| stauch -1ldvocate OF the gold standard,
and in view OF the fact that Chile has
| Just passed through, a long period OF
financial depression as the result of a
| debased curteucy, and has recently adopted
L . solid gold basis, his remarks upon the
| money question are not only highly in
Fteresting, but most instructive Particu-
larly is this true at the present time,
hwben Presidential contest is at white
| heat over the financial problem.
GOLD THE TRUE STANDARD.
L Prot. La Fetra believes that it would
| be suicidal for the United States to at
tempt the free aud unlimited coinage of
lsilver ut the ratio OF l6 To l . and his ar
| g,iments against such IL proposition are
nas.d upon practical experience OF his
adopted country.
xevIew ing s..s. financial history OF Chile
and the conditions attending the deprcs
sion which ted ,up To the adoption of the
gold standard, he sad:
Prior 10 IsT9't Chilean government
coined gold and silver at the ratio of
l o IL 10 !, and there Was an issue Of
paper money by the banks based upon the
guarantee Of their cash capital, but gold
! aS tie STANDARD. Wh An the PERUVIAN war
broke out in that year the government
began an Issue of paper money on its own
account
The entire issue of 100000 was
| made inconycrtible is, gold could not
be demanded for it. Our unit of value
was then Lhe peCo. or dollar. which was
worth about 81 cents IN gold or United
States money. The first result was Il want
ernment ever 10 redeem ITS paper, aud the
currency Immediately began To dcpreci-
ate in value.
"Fluc uatiug from time to time ana from
daylo day, now falling, ti!cn rising, only
TO fall again, according to tie markets and
exchange abroad and the abundance or
scarcity Of our own products and various
other contingencies, the disorder continued
until in 1891, wien the agitation to re-
sUmc specie payment began i'll earnest, the
value OF the paper pcco formerly worth
90 cents was only worth 22 cents.
DOLLAR WORTH NINETEEN CENTS.
AT some time previous to tlis, however.
ittouctcd bottom " hen it felito9 l-2pencc,
or l9 cents.
The effect of this constant fluotuation
was to disarrangr all commercial trans
actions, and make it Impossible TO conduct
business on safe basis and at a le eitimatc
profiG. Prices Of all articles fluctLated in
accordance with the fluctuatiun Of money
on exchange. and it was impossible for
merchants and business men 10 calculate
thcir profits or provide against sudden and
disastrous losses.
But the most serious consequences Were
to the laburing classes.
The normal price of wages did not
change from the gold price in 1879 to the
paper price in 1894. The Iatc of wages
from 81 10 to $3.50 per day, and INA sons
81 30 To 81 per day when the pcCo was
worth 81 cents. and in S95, when il was
worth 20 cents, the nominal price was the
same, bat its real value was not one quarter
as niuch. SO that with sugar at 20 cents
and % cents pound in paper money, it
can readily he, seen how the deprecated
Currency worked both ways To the disad-
vantage of the workingnan.
Nor was this all. Every dollar Of geld
at once left the country and even here
the trouble didDotend. We were using silver
as subsidiary money, and as soon as the
paper currency deprecated and exchange
fell 10 "A figure that would give "A margin
To pay the freight, the subsidiary coin was
withdrawn from circulation and shipped
away 10 Europe.
ALL COIN LEAVING THE COUNTRY.
"Ty supply the demand for fractional
made. that IL, in a 2C-cent piece only 10
cents Of intrinsic value of silver was placed
"A Again, exchange fell continually, and
again this coinage followed the same cour,.
OF the gold and former issue of silver,
until 10 maintain u fractional currency for
mere convenience. and To avoid the Shin
plasters, the government began to issue a
coin which was 710 copper and 81 silver.
This was necessary 10 keep il in the country.
1ne consequence was, as | have said,
most disastrous to every line of business, aud
The resumption OF specepaynIeDts was made
The chief purpose of President Months ad-
miuiStralion. though he was not elected Oh
that issue, but came in with the revolution
of 1891.
~lt had all along been the intention of
the government to redeem its $50 ,OOO, 600
of paper in silver, though they were made
mconvertible, and to do this it had been
accum ulating n large quantity of silver, for
Chile is n large producer of the white met
al, but the revolution of 1891 swept that
away III war expenses.
Consequently, when Congress began the
consideration of the subject the question
aruse as 10 what.shOulu lie "a ass, gold
or silver. or both. This finally terminated
by deciding for gold as "A sound money
basis.
There was long argument, but it was
not at the time OF a political election The
chief reliance, ot course, was that all the
leading commercial nations of the world
had gold as Il basis.
SILVER OF UNCERTAIN VALUE
I'VE could not have accepted silver, as
that, toe, fluctuates, and is unstable and
unsatisfactory. June ] 1885, specie pay
ment was resumed upon . so and gold bass,
and to do this the government negotiated
a loan OF S1O,Ou0,u0O in Europe, four
Sfths of which went to purchase gold, all
our gold having long since departed and
the otner one-nfth purchased silver in our
own country from the mine owners ar.
that is now being coined at the ratio Of
"a As to , but lne amount is lIiniteu, only
gold enjoying free and unlimited adniis-
son 10 the mints. But i'll determining the
unit of value, to have set the peco at its
former pr,ce of 81 cents would have meant
enormous fortunes to those who CHANGED to
hold tie 10000, 900 of outstanding bills
which were thereby made as good as gold.
and which we're chiefly held by bankers
This would have been fatal error.
when the agitation TO resume specie
payments began, the $50, 1000, 900 of paper
money, which had fallen in value to about
$4,000, 900, began to rise again, anu the
peco as a unit was fixed at SO cents in
geld, instead OF at % cents, and conse-
queutly the coin diminished in size nearly
two thirds, SO that our silver dollar now
coined at 81 1 2 to 1 and containing in the
ueighhorhood of 300 grains is somewhat
smaller than the United States dollar and
masses for Sc cents