The Anaconda standard., 1899-09-06

" the currency problem in Porto
Rico, Secretary Gage learned
something in few days of which forty
years experience as a banker had, ac-
cording to his own statements, left him
in profound ignorance Shortly after
his appointment as secretary Of the
treasury, he publicly stated that the
coinage of a metal added nothing to it's
value, that it merely changed it's form.
In this view he either ignorantly or
wilfully left out of consideration
the fact that when metal is
coined into legal tender money a new
use Is created for it that gives rise to
a new demand, which necessarily adds
to its value
Mr.. Gage looked merely at the me-
chanical work of coinage ignoring the
money function which is the true
point of difference between bullion and
legal tender coin. He may have been
misled by the fact that when coinage is
free, as in the case Of gold now, there
is scarcely an appreciable difference in
value between the coin and the bull
have shown him that under the circum-
stances the bullion and coin are prac-
tically interconvertible. The holder of
bullion can have it converted into coin
and the coin may in turn be converted
into bullion, all without expense and
virtually without delay To all intents
and purposes they are the same thing.
But stop the coinage of gold and see
how quickly a difference would appear
between the coin and bullion. This has
been shown wherever it has been tried,
and Mr.. Gage finds it necessary to meet
just such a condition in Porto Rico.
In that island since the beginning of
1896 there has been distinctively local
coinage and currency, the Porto Rican
silver peso standing absolutely upon it's
own footing. 1t is not redeemable in
gold or in anything else. Still it is
worth a good deal more than the same
weight of uncoined silver bullion. The
gold men in the United States have be-
come so accustomed to looking upon
that metal as the regulator of all values
that they might well be expected to
insist that they are so redeemable, or,
like Governor Roosevelt, when cornered
by Moreton Frewen, fall back upon the
plea that even if not so redeemable
there is gold back of them" But even
that specious plea would fail here, for
there is literally nothing back of the
Porto Rican peso. Why then is it that
piece of bullion that is only worth
forty-six cents in gold When coined into
Porto Rican dollar instantly stands
for sixty cents, and is worth that sum
either in New York or London? What
difference is there between the bullion
and the coin save that one is money"
| and the other is not?
Speaking officially of this matter Sec
| retary Gage says: FROM information
| fairly to be relied upon, it appears that
| the island coins have a value in do
mestic exchanges and in the purchase
| of sterling bills considerably above their
| bullion value, measured by the world S
price for silver. 1t would seem just
and wise to adopt this local value in the
establishment of a fixed ratio to the
both an admission of the fact that
Porto Rican coin is worth more than
bullion, and also a proposition to es-
tablish a fixed ratio at the higher value
between the Porto Rican coin and the
| American.
| We are not prepared to admit that
Mr.. Gage has. even now, very firm
| grasp upon the principles Of monetary
science; but it is a pleasure to observe
that he has, at least, learned that the
coinage and monetary use of silver In
| Porto Rico has added something to its
value. If he will now admit that the
same principle holds good in the United
States, he will have taken another i'm
| portant step.