The Grenada sentinel., 1897-09-25
MhEAI AND SILVER.
O0e cf the E1ects Of UnPestrtcted
Coinage OF Two Meaals.

Coinage OF Two Metals.
The following question was asked of
the American by a subscriber:
Suppose that the United States should
resume the unrestricted coinage Of silver
and that silver should rise to 81 % per ounce
in gold?, The East Indian farmer would
then have no advantage Cby reason of the
exchange between gold and silver over
the Uaited States farmer in competing
for the London wheat and cotton markets
but would not Argentine. by virtue OF her
paper money and the premium on gold,
still keep down, the price of wheat and
cotton? And what about the price OF
wheat and cotton that comes from Aus
tralia. Russis and EGYPT?
The following answer by Wharton
Barker. editor of the American, is well
worth careful reading:
II is true. he says, that the restora-
ton Of bimetallism would not OF itself
put the paper currency of Argentine on
parity with gold or destroy the pre-
MUM on gold as measured by that cur
rency, which premium now stands at
100 per cent. But the restoration of BIZ
metalIsan would cut this premium
down. for it would cheaper gold OF
course. prices are fixed in Argentine
by the volume of her paper currency.
Now. the restoration of bimetallism
would in no way affect the volume of
that paper currency, and therefore
prices in Argentine would not be dis
turbed. But in the gold standard ma
tions there would come, with the res
toration of bimetallism, an increased
supply Of money and rising prices. In
other words. prices for Argentine prod
uce. though rising in terms of gold,
would remain unchanged in terms of
paper. Thus would the premium on
god in Argentine be cut down, as gold
was cheapened her currency would rise
in terms of gold. though remaining un-
changed in terms of Argentine prod
uce. The purchasing power Of that cur
rency would only change with changes
in its volume. Thus would the bounty
on exports to gold-using countries, and
the whole of the effective bounty be
cut away and the Argentine producer
put on the same footing-that is, left
with no artificial advantage over our
people.
True, premium on gold in Argen-
tine would still remain, but this pre-
MUM. if it represented not an appre-
citation of gold but was the result of a
depreciation in her own currency-
that is, depreciation in purchasing
rower-would give to the Argentinian
no advantage over our producers. It
must be remembered that it is the ap-
probation of gold that gives our COM
petitors the advantages they enjoy. not
the depreciation in their own curren-
cies. Argentine enjoys an advantage at
this time. for she sells her wheat for
money that has appreciated. but the
whole of the premium on gold is not an
effective bounty. for the reason thai.
part of it is built up through the de-
preciation of her own currency. not
from the appreciation Of the currency
of goid-using countries to which she
sells. The premium on her currency
that results from this appreciation
profits her; the part Of the premium
that results from actual depression in
her own currency profits her nothing.
A currency deprecated as measured
in commodities or by productive power
would confer no advantage on produc-
ers in Argentine or any other country.
for what they gained as premium on
gold or silver they would lose in in
creased cost of production. Argentine
has at present an adva antage, because
the premium received in gold for what
she sells in England is much greater
than the increased cost of production
that has come with the depreciation in
her currency. The currency cost of
producing wheat in Argentine has
greatly increased, perhaps increased
by 100 per cent. during the lasn IS years.
but the premium on gold has increased
by nearly 200 per cent. 1t is this extra
100 per cent. premium over and above
the increased costs Of production that
so encourages wheat exports from Ar
gentine ito England. Take away this
part of the premium which is due to the
appreciation of gold, and Argentine
would have no advantage over us, and
she could not keep down the price of
wheat. as the increased cost of pro-
duction would offset the premium re-
ceived in gold or silver.
As to cotton there is no competition
with Australia. which raises none, and
little with the cotton of the steppes of
Asia. though it is true that Russia now
raises in her Asiatic empire a large part
of the cotton she needs, and to that ex-
tent has our cotton been displaced, Rus
sia formerly buying the cotton she
used, about 100000 bales, from us. This
market we can never hope to regain.
As to Egypt, superior staple Of cotton
IL raised in that country, and until we
are prepared to supply the deman Ids for
such fine staple cotton. those having
need of it will continue to buy cotton
from Egypt. and in increasing quaint.
ties. as their needs increase. 1t is this
kind of cotton she sells now.
The serious competition our planters
have to fear in the future. and which
will grow until IT. becomes crushing il
= i s-T