The Washington times., 1901-08-23
Foreign Gold In Cuba.

The news comes from Cuba that the
Government is losing money through
the payment of duties in French and
Spanish gold. The centen is said to
be received by the Government at four
dollars and eighty-two cents, and the
louis dor at three eighty-six. while
they are now worth in the market only
four dollars and seventy-nine cents and
three dollars and eighty three cents re-
spectively. This means a loss of about
one-half of one per cent when the
French and Spanish gold is exchanged
for American coin. Then we are
further informed that when these for
eign coins rise in the market they are
no longer used in making such pay
ments.
These facts are both suggestive and
instructive. They show the absurdity
of much of the economic argument
which we have heard of late years.
based upon the idea that gold has
fixed and unchanging value. French
and Spanish gold is just as pure as
American gold. and yet we hear that it
fuctuates so that it can be used to the
disadvantage of the United States by
those having duties to pay. That is to
say, q man can go to bank and buy
napoleon dor for three dollars and
eishty-three cents. and pay 1t right
over to the United States for three
eighty-siX.
And these changes are not confined to
Cuba by any means. The rates of ex-
change between New York and London,
Paris, and Berlin. and between all Of
the worlds money centres are constant
~ changing. Sometimes an English
sovereign is worth four dollars and
eighty-nine or ninety cents in New
York, and sometimes It is worth no
more than four eighty or eighty-one.
The price of American eagles varies
considerably at the Bank of England
or the Bank of France. 1t all depends
upon the condition of the money mar
ket. and where the gold happens to be
needed the most. Cold the Klondike
is never worth quite so hitch as gold at
the San Francisco Mint. because it will
cost something to get 1t to the mint.
saying nothing of the delay.
When the Royal Gold and Silver Com
mission few years ago investigated
the reasons for the change in the rela-
tive value of gold and silver, 1t was
shown, and 50 stated by the commits
sion in its final report, that during the
period Of seventy years between 1905
and 1873, while the minis of the leading
nations were open TO the coinage OF sill
ver the variation in the relative value
of the two metals in the London mar
ket had been no greater than the varia-
ton in exchange between countries
using the same money metal
All-of this simply goes to show that
the value of money. like that of any
thing else. is fixed by the great law of
supply and demand. When the supply
is abundant at a given point and the
demand weak, the value will fall; when
the demand strengthens or the supply
is diminished the value will rise. This
applies to gold money as well as to any
other; although in the case of paper
money the question of confidence in the
stability of the Government which is
sues it will also have a marked effect
upon its value. That confidence may be
so impaired as almost completely to de-
stroy its value, or the same effect may
follow an enormous over-issue of the
paper, as in the case of the French as
signats and mandats.
OF course, there cannot be very much
variation between the value of gold
coins Of different nations, because at a
small expense they can be returned TO
the country in which they were coined.
or they can be recoined in the country
where they happen TO be. But this re-
suits from purely artificial regulations
and laws. When we take a broader
view of the subject and consider gold in
its relation to commodities and proper
ty generally it is governed in its value
as absolutely by the law of supply and
demand as is corn or wheat or hay.