The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1897-07-10
JAPAN,s CHANGE TO GOLD BASIS.
How the Change Was Brought About and
the Controlling Motives.
(1aev. ]. L. Deering in Boston "atch'
man,


Upon the enforcement of the new law
on the 1st of October, Japan will pass
from the company of all 9th OF oriental
nations doing business on silver basis
into the companionship of the nations
whose finances are conducted upon q gold
basis. Like most other things done by
this progressive nation, she does not pro-
pose to adopt ratio exactly like thatAex-
listing or proposed by other nations but
makes the ratio to 1924; the new GOLD
ven will thus be equal to little less than
60 cents United States gold, or actually
1886.
One of the striking features of the +blll
is that the government agrees to exchange
one silver yen, such as are at present III
circulation, for one gold yen of the new
coinage at any time for five years from
the date of the new law coming into
force. The government thus pledges itself
to redeem it's 125, coo, 000 yen now in cir
culation at fixed rate OF 80 pence per
ounce, whether the rate in London be us
low as 20 pence or even lower. This is
one point at which European financiers
the promulgation of the law all silver
coinage is to cease, except that OF the
three subsidiary coins for small change;
thus Japan is not entering upon bimet-
alsm, as some have supposed. The new
law provides forsthe issue of three gold
coins-a 20-yen piece, a 11-yen piece, and
a5yen piece. There will also be of sill
yer, 50-sen pieces, 20-sen and l0-sen
1a1c I,a ,nd mir l-pI
1ive-sen pieces and copper one-sen pieces
and five-rin pieces. For convenience
we may say that the yen will equal 30
cents American gold, the 50-sen piece
will equal % cents, and the rim is equal
to one-quarter of a cent.
But what are the reasons for Japan S
sudden adoption of the gold basis? We
cannot do better than briefly examine
some of the arguments set forth by Count
Matsukata in his speech before the House
of Representatives when he advocated
the bill. He said
'eThe chief economic advantage we may
hope to gain is that we shall avoid f1uctu-
ations in the prices of the commodities.
The adoption of the gold system cannot
fail to lessen such lamentations SO that
the anomaly of constant ups and downs
in the price of the commodities may be
eventually avoided. Great appreciation
of price may produce temporary state OF
prosperity in the market, but as mate
rails and wages must be gradually inf1u-
enced by the anomaly, the final issue
must be not only injury to production
but the decrease of exports. On the Other
hand, any sudden fall of the price Of
commodities is sure to inf1ict loss on the
commercial community, and to impair
the circulation of money. These abuses
and injuries, however, are inseparablt
from the silver system, and cannot be
avoided except by recourse to gold mono
metalism. The second profit that we may
hope to derive from the gold standard il
an increase of exports. A gold system Sc
ures convenience of trade with foreign
countries having similar system, an6
prevents fluctuations in the prices of com
modities. The fluctuations in exchange
are also avoided. Finally comes the
question of access to larger stores of CAPT
tai The progress that we have made il
western civilization has imposed upon
us the necessity of holding close comlnu
nication with the markets of the world
But we are separated from Occidental ma
tions at present in the matter of none
tary circulation. That Inconvenience
will be removed by bringing our coinage
system into uniformity with theirs, and
considerable facilities will be gained fol
the circulation of money and with respect
to financial affairs generally
Such are some of the points which the
count expounds at length. He answer.
will be at disadvantage in her trade with
China if she adopts the gold standard, by
saying that this will be more than over
come by the advantage of proximity ant
previous relations in trade. 1t is doubt
less true that the statesmen of japan be
lieve that silver has sunk to the loves
point, and that the tendency is hencefortI
to be upward and that having made
great gain by the gradual fall, they will
now take advantage of the probable rise
in silver to gain further advantage
through adopting the gold basis. The
count does not clearly state this, however
but it is to be gathered from the vernacu
lar press. 1t remains to be seen if the
new experiment succeeds. The question
has been asked, where is Japan to get hel
gold with which to redeem her silver now
in circulation? 1t is answered that the
indemnity that she is receiving from Chi
ma is very advantageous means Of secur.
ing it. 1t is seen by the quotation from
the counts speech above that the argu
lnent which Influences European nations
to reject gold, namely, that gold mono
metalism tends to pull down prices. is
made the ground of advantage to Japan
for adopting this system. Japan object.
to the advance in prices, which by gener
al consent is supposed to be sign Of
prosperity, and asks for lower prices.
The argument suggested by Matsukata
as to the influence of gold coinage to at
IL
doubtful matter. There is little question
but what Japan wishes to raise foreign
loans and the count thinks that this vii
be the moro readily done on gold basis
1t remains to be seen, however, how rap
IDLY the bonds are bought up. Among
Europeans living in Japan there is a
great deal of doubt as to tho wisdom O.
the new movement, many going so far a!
to prophecy dire things as to it's cffec
upon Japan's commercial prosperity AS
to the people themselves, there is vas-
deal of ignorance on the subject; one rea
son for the quiet way in which the bill
was rushed through being the ignorance
of the whole question on the part of til,
members of the Dict The novelty of the
bill attracted many, some of the argu-
mems presented were taking, and the
suddenness of the whole thing was fascin
ating to the public mind AS to the actu
al result, it is better that time should
solve it where there is such disagreement
AEorg authorities, than that mission.
a'y should turn prophet. The statement
. the general facts concerning tho bill il
ail that | would attempt.