The Indianapolis journal., 1896-06-16
OBJECT LESSON IN FREE SILVER.
A Customer Buys a $1,000 Draft on
3 W Hong Kong for 1854.


A simple lesson in free-silver was afforded
by transaction In the Illinois Trust and
Savings Bank yesterday. Among the banks
customers ere several Cinnamon, who fire.
quently buy exchange payable in Hong
Kong and other Chinese cities. Yesterday
one of these customers bought for 1854
draft for 81 600 in silver, payable at Hong
Kong AS the purchase was made largely
In silver certificates, the transaction may be
regarded as affording fair Illustration OF
how one cheap American silver dollar,
backed by gold standard, win purchase
two more valuable dollars when circulating
In silver standard country. China is a
silver standard country. While its stock of
this coin is estimated at $4,000 600, ii is
largely of foreign coinage. Its own coinage
Is limited to about $l5, 0e0 mfnted within
| the last five years, and for use largely at
treaty ports
The $1,000 draft is payable in Hong Kong
10 u Mexican dollars. Ihese Mexlcan ao1ars' Jars
ly IL South American and certain Asiatic
countries where they are the standard
instance. they are the standard dollar in
which accounts are kept. In other ports
the standard of measurements is a tael
which varies in value and weight in differ
ent parts of the country.
In selling the $1,000 draft the bank fixed
the price according to the value of silver
in New York. These quotations yesterday
morning were 69la cents per ounce for pure
silver. Taking this as a basis. the relative
value of the Mexican and United States
silver dollar is easily determined. The
Mexican dollar has 4l7.19 gross grains. or
31717 grains of pure silver. The United
States silver dollar has 412l2 gross grains,
or 311.25 pure grains. This establishes the
Grains.
United States, pure silver. 3ll p
Mexican dollar, pure silver ........ .377.1I
Since according to yesterdays quotations
an ounce of silver was worth 6s.5 cents,
one grain of pure silver is equal to .14fS
cents. This would make the actual rela-
tive values for the two dollars as follows:
Cents.
United States silver dollar. 81 1870
Mexican silver dollar. 546l42
AS will te seen. the Mexican dollar fs
actually worth more than the United states
| dollar, so that if the United States silver
| dollar passes current for 81. the Mexican
| on the same basis is worth S1-016-
| But backed by gold standard, the
| United States cheap silver dollar will buy
! almost two for one of the higher priced
Mexican dollars. Or. IN other words, 544
| of United States cheap dollars, backed
| by a gold standard will buy $1,000 worth
| OF more vluable silver dollars in a country
| where they pass purely on their merits.
Concerning the Chinese monetary sys-
| 1890 China opened mint at Canton, and
| has since coined about $15,000.00o worth OF
| silver for use mainly in the treaty ports
as indicated. According to the latest re-
ports. statistics as to the amount OF
| bank notes outstanding are obtainable The
| banks. for the most part. have capitals OF
| n few hundred or few thousand dollars
| only. and are under no sort of government
| control. Their notes issued for both
cash Ia copper eoin) and silver gener-
mediate vicinity Of the bank, and would
| not be accepted in another city or another
| part of the same city.