The herald., 1897-08-09
Mexican Money Goes Down
With 1t
NOT A HOPELESS SITUATION
IN THE OPINION OF MANY ABLE
FINANCIERS
Mexico's Biggest Banker Anticipates
Improved Business at the Ex-
pense of Gold Countries
Associated Press Special Wire.


ST. LOUIS, Mo-, Aug. S.-A special to
the Globe-Democrat from the city OF
Mexico says: The rapid decline in the
price of silver has caused much apprs-
hension in government circles The pos
sible effects upon Mexico are being gem
orally discussed an6 much speculation is
indulged in as to what point exchange
may reach. Yesterday the premium on
gold was 1869 to 1851.
Lionel c. Garden, the British consul,
who has resided in this capital for many
years and who has an International rep
utation for the many articles he has
written on the silver question, in an in
terview on the subject says: My opin-
ion is that the prise of silver is entirely
governed by the law of supply and de-
mand. India under ordinary circum-
stances. takes large proportion of the
surplus production of the worlds silver,
and it is natural that the silver mar
ket should be affected by the present
poverty-stricken condition of India and
the consequent fall in the price of silver.
The present low price will only continue
as long as the present condition of af
fairs in India does.
Moreover, a point must be reached,
IL silver continues to fall, sooner or la ter,
at which it will be found impossible to
make silver profitable in countries where
the gold standard is in use. Therefore,
the supply, when that point is reached,
will become much restricted and prices
aOr W in cOn @ a. IN
take on normal level.
The effect Of the present fall will slim
ulate the production of silver for export
and therefore will be benefit to Mexico
to far more considerable extent than
the prejudice that may result to the
government and railway companies on
account of the price of wages here; but
I have no reason to anticipate this as
long before such point could be reach
ed the production of silver would have
ceased to be possible in all countries
where wages are paid in gold. At the
present rate of exchange, higher prices
may have to be paid for interest abroad.
The arguments I made to my govern
ment a few years ago as to results that
might happen to Mexico owing to fail
in silver still hold good. with this add
ton, that it might be serious 10 this
country if silver fell 80 far as OF effect
12S per cent premium"
H. G. Walters, manager of the Banco
de Hondres, the largest banking estab
lishment in this republic, said he did
not believe the present fall in silver
would affect Mexico. The loss occurring
10 the government, even at the present
rate of exchange, generally amounted TO
very little, he said, and the government
could easily stand it. He believed that
if silver sold much lower, the republic
would soon have a. monopoly of mining
it, and countries like the United States
Australia, etc., would suffer the most.
He believed the fall would only tempo
rarily affect trade here. 1t might have
some permanent effect ou certain class
es of foreign merchandise, but it would
certainly stimulate all native indus
tries and would tend to attract capital
The railways will find tremendous in
crease in local traffic, which will eventu-
ally offset their loss on foreign exchange.
"I see no reason to anticipate amy per-
manent loss by the fall in silver, but
rather the opposite" said the banker
in conclusion.
H. R. Nickerson, general manager of
the Central railway, the largSt railway
corporation doing business in the re-
public, refused to talk silver generally.
He said, however, that at present the
road was earning on silver basis and
purchasing most OF its supplies on gold
basis, and the result was most detri-
mental to the interests of the road.