Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1897-06-10
WHY SHE FLoPPEp.
European Money Lenders at the Bot
tom OF Japan's Monetary Change.

not whit more strange than that sill
| yer should have been demonetized In
the United States or 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 it was impossible to maintain two
metals at exactly the same value, and
| that there were bound to be small
| fluctuations. But if we concede this
| to be true (Which we do mott it is con-
| tention which fails to prove the sub
stance of the issue. There might be
| small fluctuations, and it might cause
some inconvenience, particularly in for
| eign exchanges. But these would be
| utterly trivial compared with the in
| 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, it's 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
property in general, thus increasing the
burden of all debt, the measure would
probably not have received a dozen
votes in the German parliament. If it
had been generally known that the de-
monetization of silver would be fol-
lowed by such 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 all know better. The truth is that
even among business men, very few
had a clear conception of what the eff
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 characterization of silver was
mainly brought about by the latter.
Of course, they would not declare that
they wanted the change made in order
to enrich themselves at the expense of
others; and so the subject has been OBJ
scured by mysterious talk 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
yored 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 translation of
the law, but it shows why it 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
it was thought that if Japan placed
herself upon the gold standard she
could borrow money more readily
abroad, i. e., in Europe.
The entire defense of the gold stand
ard $50 far as there is anything at all in
it, revolves around the idea of borrow
ing money. It is assumed that a mon
efarv SvctoDo which D,alyaS II On Sia1- for
government to negotiate loan is the
better system, no matter what the effect
may be upon the welfare of the people
as a body. A moments thought will
show the utter fallacy of such claim.
AS matter of course a man who has
money will lend it more readily if 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 a direct gain to the money
lender; and it is perfectly obvious that
what he gains in this way somebody
else must lose.
The value of gold is constantly ris-
ing. For more than 20 years it has
gone up, that is, increased in purchas-
ing power, something like four per
cent. a 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 it in substance loan /
at eight per cent. This is the reason, |
and it is the only reason, why men are
willing to accept a 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 i
ucts for less and less money, haveI
grown poorer with each succeeding
year.
Yes, it 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
still more to the profits of those who
lend the gold. But it must not be for
gotten that while it will make it easier
Cor governments, and for individuals
who can furnish acceptable security, to
borrow money. it will also make it more
difficult for them to pay.
There are large numbers Of honest
men now fatuously defending the gold
standard upon the ground that if man
promises to pay in gold, he can borrow