The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-12-13

II
for all amounts, with few minor copper
coins, constitute the currency. In Java, \
the silver guilder is maintained at |
fixed rate of exchange with gold, and the
business interests are free from the spec-g|
ulative influences of violently tiuotuat-
Ing currency. One disadvantage has
come to pass there from the oyerNalua-
ton Of the silver coin, this has offered
a temptation to counterfeiting. by MAX
ing a counterfeit coin of the full weight
and silver value of the real one. sQuantl-5
ties of such coins doubtless are in circu-
uation. Just as they probably are in this
country. {-.ass-a
Conclusions Regarding Oriental Currency.
Professor jerks says that the expert
ences Of India, Java. Ceylon. the Straits
Settlements and the. Federated Malay
States lead to these conclusions: 80
First-It is perfectly possible in orien-
tai dependencies to maintain fixed rate
of exchange between gold and silver with
out the, necessity of bringing gold, to any
great extent, into circulation. y ~
Second-In countries where imported
coolie labor is Of great Importance and
| where such coolie labor is mostly Chi
nese. it is probable that better terms e.
! e.. a lower percentage of cost in Wages)
can be made by using the silver standard
, than by using the gold standard. K Il
| Third-When silver is declining in value
as compared with gold, silver standard
| beyond doubt, affords stimulus to the
! production Of goods for export, especially
if the laborers employed are of the ignor-
ant coolie type, the prices of whose pur-
chased are largely customary. In the case
Of a newly developing country where COO
lie labor is demanded: this stimulus may
| prove, for some time at least, of advan-
tage without disadvantages enough to
offset. 1t is a question of degree of adj
vantage and disadvantage.
| Fourth-The advantage to the producers
| Of export goods are Offset in part doubt
less by losses Of wage earners, in part by
losses of consumers Of imported goods:
but this influence in the distribution Of
wealth may, quite corceivably for a con-
siderable time, be beneficial to the coun-
try a whole.
Fifth-On the other hand, conditions
may be such that this change in the dis
| tribution, of wealth may be a disadvant-
age. and each country needs to consider
| what the effect of the change in the
distribution of wealth will be before set
| Ting it's policy. f.,
= Sixth-In. the long run, it is probable
that under any standard these changes in
distribution will be gradually fixed SO
that producers in a country with a gold
! standard will not continually be placed
at any disadvantage regarding wages and
other costs Of production as compared
with those in the silver standard coun-
tries.
seventh-The silver standard, under
present circumstances, and probably for
a long time to come, brings an element
Of uncertainty and speculation into bust
ness, which, speaking generally, is to be
considered a decided disadvantage.
i Eighth-It is probable that in a country
whose business Is largely with gold stand
ard countries, the advantages of a fixed
rate of exchange on a>gold basis will more
than offset the advantages which might
| come from silver basis, unless the most
important factor in connection with pro-
duction is the Introduction of cheap coolie
!: labor. Even in the latter case, if there is
| a desire to develop especially the trade
l with gold countries, the fixed rate Of eX-
change with gold is to be preferred.
} Ninth-The flow Of capital for invest
ment in country is determined mainly
by the outlook for profits. Unless the
chances are very good, an added element
T Of speculation in business tends to check
investment Unless, therefore, conditions
of labor or other special conditions are
such as to more than offset the risks of a
| tuctuating rate of exchange. q fixed rate
> on a. gold basis will encourage the invest
ment of capital. r.. --a. ~s,.,
Tenth-If the gold standard. together
: with a silver currency, is to be adopted
in any Of, these oriental: countries, the dis
advantages which there may be in con-
! nection with it will be much less if the
fixed rate of exchange be made as nea.
as possible to the bullion rates, with
:. the silver coin as token, of light enough
weight so that there will be slight danger
{ of it's being exported if a rise occurs ir
the value Of silver bullion, and at the
same time with the coin not too light sc
as to afford undue temptation to counter
feiting. A coin Is per cent or 20 per cent
below the fixed exchange value would
t probably be light enough
= Eleventh-A permanent rate of ex
e change can be easily maintained by a pro
;. vision for the government to sell exchange
n at fixed rates between the home govern
e ment and the dependency Such rate
: should be high enough not to interfer
r with ordinary business, but low enough
l, to prevent extortionate business rate
q even temporarily in the dependency itself
n A reasonable gold reserve in the de
s tendency, to be used when large quaint
s ties are needed for export. may well b
y kept in conjunction with the above plan
l. Observation-Disclosures the standard O
= value, the efficiency Of the currency sys
; tenn is greatly increased by the use Q
= paper. An elastic bank note system, wit
~ notes current throughout the country, ha
~, proved BEST r...
y w, w. Jernane,