Clinch Valley news. [volume] (Jeffersonville, Va.) 18??-2019, 1897-07-02
Why SHE FLopPED.

/ monetary StanuoHQ upon Wnlcn Sne
has made unexRmpled progress. 1t is
not whit more strange than that sill
YER should have been demonetized in
the United States OF In Europe. There
has never been an attempt made to
show how the use of silver was doing
any harm. There were some theoretic-
al objections to the bimetallic princi-
pie, but they amounted to nothing more
than technical bubbles. twas claimed
that IL was impossible to maintain two
metals at exactly the same value, and
that there were bound TO be small
fluctuations. But II we concede this
TO be true (Which we do not) II is a con-
tention which fails to prove the sub
stance If the issue. There might be
small fluctuations, and IL might cause
some inconvenience. particularly in for
eign exchanges. But these would be
utterly trivial compared with the I'm
defensible wrong and injury which
must follow the abandonment of one
of the metals entirely. Mr.. Sherman
admitted this. very frankly, In his
Groesbeck letter.
But the fact is that when the general
decentralization of silver began in Eu-
rope, and actually took place in Ameri-
ca, its economic effects were not con-
sidered by the great body of the people
on either continent.
If, when Germany took her first step
In that direction. the prime movers had
stood up and declared that It's purpose
was to enhance the value OF gold, di-
minish the value of commodities and
20 L.
burden of all debt. the measure would
probably not have received a dozen
votes In the German parliament. II IL
had been generally known that the de-
monetization of silver would be fol-
lowed by such a fall of prices that the
money value of our great staples would
be reduced one-half In "a years, does
anyone suppose that the United States
would have been a party to the act?
We ell know better. The truth is that
even among business men" very few
had clear conception of what the cf-
feet would be. They had been In the
habit of letting the great bankers con-
troll the finances of their respective
countries. There can be no question
that the decentralization Of silver was
mainly brought about by the latter
OF course. they would not declare that
they wanted the change made In order
70 enrich themselves at the expense of
others; and so tho subject has been OBJ
scured by mysterious tnlk about the
par of exchange" and the superiority
of gold over silver as measure of
value, all of which is mere by-play.
The moneyed classes have always ia
vored the policy of restricting the
money supply, so as TO increase the
value Of their holdings; and such Is the
direct effect of demonetizing one of
the precious metals. In an article on
the gold standard In Japan the position
was taken that It had been brought
about by the creditor classes regardless
of the effect upon the Industries of
the country. Strong corroborative evil
dence of the soundness of that view is
now furnished by the London Econo-
mist, one of the most pronounced and
uncompromising advocates of the gold
standard published anywhere.
1t not only shows what the change
actually is, giving a translation of
the law, but IL shows why II was
done. Japan was prospecting with her
silver money, and there was nothing
In the business or Industrial situation
TO make such a change necessary. But
1t was thought that II Japan placed
herself upon the gold standard she
could borrow money more readily
abroad, 1. e., In Europe.
The entire defense of the gold stand
ard ESQ far as there is anything ut all in
it) revolves around the idea of borrow
Ing money. 1t is assumed that mon
etary system which makes 1t easier for
a government 20 negotiate loan is the
better system, no matter what the effect
may be upon the welfare of the people
as body. A moments thought will
show the utter fallncy OF such claim.
AS n matter OF course a man who has
money will lend IL more readily II he
knows that he will be paid in money
OF higher value than that which he
loaned. But this very circumstance
proves that rise In the value Of money
must be q direct gain to the money
lender; and 1T is perfectly obvious that
what he gains In this way somebody
else must lose.
The value of gold is constantly ris-
Ing. For moro than 20 years 1t has
gone up, that Is, increased in purchas-
Ing power. something like four per
cent. year. So that when a man
loaned money at six per cent he, In eff
feet, collected ten. He could lower the
rate to four per cent. and still the up
ward movement of the money in which
he was paid made IL In substance loan
at eight per cent. This is the reason,
and 1t ia the only reason. why men are
willing to accept lower rate of inter
est on bonds payable in gold. They
more than keep even by the rise OF the
gold. This is also the chief reason why
In every country where the gold stand
ard has been adopted the money lenders
have added enormously to their wealth,
while the producers. selling their prod
ucts for less and less money, have
grown poorer with each succeeding
year.
Yes. 1t may be conceded that by ADOPT
Ing the gold standard the Japanese gov
eminent can borrow money more read
lily. This very action will. itself, cause
gold to rise still more rapidly and add