The Neihart herald. [volume] (Neihart, Mont.) 1890-1901, 1898-06-25

ment, ana from Lombard street has
come the edict which will almost in
evitably restore the free coinage of
silver in India, and if the portents
are reliable, restore it before the
world of trade is many months older
Let me put the position of Lom-
bard street In as few words as poss-
ible. Since the Argentine collapse;
since "American rails'' have been
questionable, enormous sums rep
resenting the national savings, have
been poured into gold mines and
other industrial enterprises, such as
breweries, tramways, etc. We have
had an era of phenominally cheap
money; never was money, though,
so dear to buy, so cheap to borrow;
and the price of all these mining
and industrial stocks have become
dependent on cheap money-that is
low borrowing rates. Let me make
this point clear, because it is this
which has killed the Indian "gold
standard"
Take first class gold mining Sc
curity, such as the johannesburg
Robinson mine. This mine will pay
an investor some percent, or f70O
year, on an investment of 10000
Now, the investor having good cred
it with his banker, deposits these
shares, borrows $4,000 at 81 per
cent (f28O), and earns f420 per an
nun or more than 20 per cent on his
$4,000. From such financial con
ditions as these it will be seen that
rise in the bank rate to, say 6 per
cent, will kill the profit in these in
Vulnerable transactions, will tumble
these mining shares by wholesale
out of bankers strong boxes upon
the market, and produce period of
panic. | understand that one of the
very first signatures to the memori-
al now in preparation, condemning
the proposals of the Indian govern
ment, is that of Lord Rothschild. 1t
is indeed not too much to say that
the revolt against bimetallism has
never been more determined than
the revolt against the present pro-
posal to give India gold currency.
Even if the currency commission,
now sitting, should dare to report in
its favor, it will even then be neces-
sary to apply to parliament for a
gold loan of f2O,0O0,O00, and there
is no prospect whatever that with all
the great financial houses in opposi-
ton, parliament will sanction any
such loan. 1t is quite understood
that the proposals of the govern
ment of India involve not merely
the transfer of these 2O,000,000 SOW
ereigns to India, but also at least
3O,OOO,0O0 more of merchants re-
mittances, to make good the stand
ard selected. Fifty million sover-
eigns! Such sum is more than
one-half of all the gold currency in
Great Britain, and it is only neces-
sary to state these figures to at once
destroy the Indian scheme as a pro-
posal advanced by sane men.
1t should be distinctly understood
that the Indian proposals have been
killed by the bankers and monomet-
allists, and that the bimetallists here
have, as matter of prudent policy,
made no appearance in the fray.
Sir Robert Clifton, much the ablest
of the monometallists authorities,
had long since reduced the question
of standards to the smallest possible
compass. Creditor nations in his
view, should and will adopt gold
standard, debtor nations a silver
standard, and in letter to the
Times of May 10, he presents his ar
guments once again in words which
even Senator Stewart might read
with approval. What Sir Robert
writes of India applies equally from
an economic standpoint to the Unit:
ed States. His entire letter requires
the closest consideration by your
''honest money" party; but its text
is in these lines:
"The general difficulty is that In
dia is a heavily indebted country,
having large remittances to make
annually in payment of interest and
dividends to foreign creditor coun-
tries, and chiefly in England, with a
gold standard Such country, if
it has the same money as the cred
itor country, can only retain it with
difficulty. BY the necessity of the
case the exchange is chronically
against it. People in India, and the
government itself with money to re-
NIT, seeks bills on England, on
which there is accordingly a premi-
um. What the nature of this premi-
um is, is very we'll explained in Mr..
Bagehot's papers on the silver ques-
ton. The result of such premium
in debtor country having gold
money the same as it's creditor, is
that the gold tends to flow away.
1t is the most ready asset to send,
far preferable to goods. In other
words, there is likely to be steady
drain of currency from debtor
country like India if its currency is
the same as the creditor country
England, and this steady drain will
contract and disturb the money
- Al A..