Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1903-08-20
CHANGING NONE Y
MEXICO CONCENTRATES A NEW
FINANCIAL SYSTEM.
TO EXCHANGE SILVER FOR GOLD

TO EXCHANGE SILVER FOR GOLD
So Says Prominent Mexican Lum.
herman, James e. Meginn, Who,
Formerly Resided In the United
James d. Meginn, formerly of Kansas
City, Mobut now lumberman in
Mexico, thinks that the United States
will be benefited when Mexico adopts
the gold standard, which he saws tha
dark skin republic is sure to do. On
recent visit to Kansas City he talked
freely concerning the proposed
changes in the Mexican money stand
ard and went into the details of the
plan that President Diaz and his coun-
selors have formulated to prevent the
rapid fluctuations of exchange values
with the rise and fall of bar silver in
the markets of the world. In talking
on the subject he said:
There have been two large business
enterprises in the City Of Mexico
which have been forced to suspend
during the past few weeks and. there
are rumors afloat that raise a question
as to the financial standing Of one or
two more. The houses that are now
in process of liquidation are probably
able to pay dollar for dollar and proba.
bly, will do so. They did fine bust.
ness and their failure looks inexplica.
Bile to the outsider who is not familiar
with conditions in Mexico.
The com panies in difficulties are i'm.
portant houses, which buy large bills
of goods in France, Germany and Eng
land, on from six to nine months
time. When they bought their last
big bills exchange was very much low
er than it is now, as measured by the
Mexican dollar. The goods thew
bought arrived when exchange was
practically two to one as between Mex.
lean money and American money. but
it rose by leaps and bounds in the
meantime, and now is above 26O. The
goods were sold off on prices based on
the rate of exchange at the time of de.
livery, and when the houses came to
settle their bills it took all the pro-
ceeds of the sales. the principal, inter-
est and profits, and left the sellers with
nothing but the loss of handling goods
to show for their labor and investment.
Some of the stuff showed the importers
a loss without taking expenses of hand
ling the stock into consideration at all,
and the result was suspension. OF
course, in Mexico, nobody can fail. 1t
is Jail offense to do so, and anybody
who has seen the interior of Mexican
Jail will realize what that means,
The Plan of Action. j
For two years the merchants have
been casting about for some kind Of
an eXpedient, and with the assistance
|of the government plan has been for
mulated that they think will be effec.
tive. 1t is like this:
In the first place the government Is
to stop the free coinage of silver and
then enact a provision declaring that
all existing silver dollars shall be re-
deemable in gold at SO cents and shall
be legal tender in any quantity at that
rate.
The effect of an act of this kind
would not be to cause silver to rise. 1t
might not affect the price of it at all,
but the chances are if the supply re-
manned stationary that it would fall in
price. at least temporarilv. The main.
tenance of a gold reserve would than
occunv the attention Of tha .nvern..
ment and if this is successful The rate,
of EXCHANGE can ha maintained ohsol
lutelv stationary at 70 cents where,
now r. hobs around between ~ ana 70
mr. thereahnuts - > 49, -
:, : -,
Merchants Buy on Short Time.
"The conservative merchants have
abandoned, to a great extent. the prac.
tice of buying on long time. and. IKE
myself, price a shipment for only thir.
ty days subsequent to its receipt. In
this way the fluctuations of exchange
are neutralized to a large extent be-.
cause only the most violent variations
of value could cause a loss of any mo-
ment. 1t is the houses that do a long
time business that have been the heaW
lest losers by the present system.
'Another effect of the adoption Of
the gold standard by Mexico will he
seen in the tremendous increase in
business that will be done by the Mex
lean merchants with the United States.
1t is the custom in this country to lin.
l