New-York tribune., 1902-12-16
MEXICO AND GOLD BASIS
Some Of the Difficulties Of Efectang
the Change.

Mexican industries American and European CAPT
tai now controls the principal mines, railroads and
manufactures That influence is eXerted acd'eIy
In favor of a gold standard The agitation mas at
length become acute as witness the protest against
the gold standard by the silver miners and farmers
Of Mexico
In considering the questions thus presented to
Mexico 1t Is necessary to reflect that we cannot pass
judgment without knowledge accurate knowledge,
Of the extremely complicated problem thus pre-
sented to the statesmen and inanciers OF the nesh
boring republic. Certainly must utterly fail 10
grasp its import if venture to consider L rom
our standpoint only. Mexico is debtor nation
has always been debtor nation. and in all propa-
bity must ever so remain. She has chung 10 the
silver standard because it has proven more pro-
tecting to her struggling Industries than any purely
protective system she could venture to ADOPT II
would probably be Impossible to raise materially
her present tariffs. Under the stimulus Of >Amerl-
can enterprise she has become comparatively rich
and prosperous. but the balance of trade IS sun
enormously against her. 1t does not decrease De
cause the wealthy classes have increased their ex
penditures abroad pari passu with the Improvement
of their fortunes.
Silver in form of Mexican dollars and bullion
still constitutes the principal export. The total
product reached nearly sixty million ounces last
year, Mexico being the greatest producer the
United States coming next with 55,o0o'oOo ounces
but the gold product of Mexico was only apout
81 0O0 against nearly $50 100000 for the United
States. That contrast great as 1t Is dWlndes into
insignifcance when compare the mouStrlai
products of the two nations. Inc tact thaI Ale
product of silver in Mexico is so largely IN excess
of all other products sufficiently illustrates the
situation from a commercial standpoint. Ana 'his
despite the fact that during recent years the most
enormous premium has been offered the develop
ment of Mexican industries. The raw na1erldi she
produces is paid for in silver, her labor is paid IN
silver while everything she export is marketed
in gold. But, former minister Mr. roster,
has explained, Mexico is not rich country she
has rivers, waterways and but little water
power. Her industrial development began with her
railroads, all built by foreign capital Her agrl-
cultural much of her mining labor is still IN
condition of peonase. Notwithstanding the system
has been abolished by law. Few Mexican Iaoorers
have ever seen a gold piece In the interior silver
has not lost its purchasing power Probably the
average rate of peon labor does not exceed sew
enty cents, silver. per diem, except where AlneFi-
cans exploiting the industries.
II is the pressure brought to bear by the FOR
eigners' who the railroads and other invest
ments, the German, Spanish and French importers
and the complications of Mexican finance obligated
to pay gold bonds with silver, which are potent 20
bring about a change OF standard from silver 10
gold. The agricuturists and miners, as we nave
seen, oppose it. Well may they hesitate PROBABLY
it is possible for human intelligence TO forecast
fully the consequences of change. certainly II
would Immediately put end to the export OF
Mexican dolIars-so important market for silver
long in in silver standard countrles because
of course the dollar would be at par at home
Silver bullion must continue TO be exported, at
what rate can only be conjectured. The exchange
against Mexico scarcely decline under go4d
basis, because the balance OF trade must continue
heavily against her In fact, a gold standard ol-
reCtiy threatens the cuFtament, II not the eSleS-
mtnaton of her infant industries, nourished as
they have been by the use of silver at home ana
by a gold market abroad She can scarcely venture
TO increase her present tariffs. any one familiar
with them must concede- 1t Is dangerous at tii'S
crisis to run the risk suftocating these indus
tries, which would still further increase the bal
ance of trade against her.
Last week the of exchange on the United
States Europe quoted at the capital at
1sD per cent premium. is stated that Mexico
paid the current year s1S0000o0 more for exchange
than during the previous year The incessant nuc-
tuations in the value of silver are almost as de-
structve the depreciation 1t Is dlIlcult 10 see
how the gold standard materially decrease this
loss when we consider that silver must still form
her chief export and that the adoption OF god
standard distinctly threatens her few lnous-
tries, developed and nourished under the proteclon
NJ no or $50 per cent premium of exchange The
Mexican miners quoted as saying that silver
mines in gold standard countries must smut down
a the present price of silver, therefore Mexican
mines cannot continue to be operated on sou
basis" That is a still more serious fact for Mex
leo to 1t is certain that 40 per cent or more
OF the silver mines proper of the United
States are closed. The present silver product is
a byproduct of Lead copper and gold mining con-
seoueut upon the enormous increase of smelling
processes induced by superior modern skill ana
economy 1t is important TO note here that II all
the silver mines proper of the United States could
he reopened, the increase in the silver product
would not probably exceed ~ or 10 pei teH' VI '0
present output
It is probable that the silver product by smelt-
ing has reached its limit in the United states;
displayed by Americans in the acquisition Of Mexi-
can mines Of character suitable for smelling op-
is evident that slhG9gh 2u Mexican sgsr
tion might be nearly or quite suspendea unGer @ a
greatly reduced because of the steady growth of
Smelling. The present antiquated process Of penSI
by Pae o ad Woad become S1
obsolete The silver mines under gold bass
such being the manifest destiny of the mines under
a gold basis, it is not dltncult to forecast the
manning industries. They could only be continued
under eaPa @ s Nth Gf1 fhe Rod or sp
planting silver. gold methods would suppiant the
b saT ft des Sufficiently m explains
the situation. II originally used forecast
never take place: but that modern methods, mod
ern currency and modern enterprise are destned TO
pc One OF the great American daes credited with
being in touch with administration, speaking
of the disorganization consequent upon the recent
ut is regarded all important that in the settle
of this subject the Unite United States should have
Guiding Mexico. China India and the Straits 1t is
tmres through diplomatic channels. and the CO
operation of other silver using countries is Teled
ation is enacted will be. it is thought the adop-
ton Of the gold standard by all countries now using
Words of profound wisdom At last the silver
using countries be consulted. In that preg-
nant sentence be found the crux of all the |
blunders made during the last twenty or thipy
suIting any other nation on question of the most
nabed to buy for silver in countries of the silver
standard and TO sell for gold 1t could not be ex-
age Of Commercial competition. The great powers
Init