Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-02-10
mEx,co,s CURRENCY PLAN.
1New York Tribune.l

by Mexico and China in regard to the
monetary situation in Mexico and the
| far east. Not only does this niSunder-
standing obtain among the lay readers
of newspapers, but in the Offices CT the
newspapers themselves, among bankers
and students of finance and in congress
The general idea is that it is another
attempt ito do some thing for silver
instigated by silver producing coun-
try: that 1t involves in some way not
made clear an attack on the gold stand
ard that it is resurrection under a
new guise of the silver heresy, so eff
fectually buried in the two Mckinley
Bryan campaigns, and that 1T implies
a resumption to silver coinage on the
par. of the United States.
Nothing could be further from the
truth. There is no suggestion of free
silver coinage in 1t. There is no at
tempt to maintain a parity between the
two metals, as metals. at the ratio of
80 to l, or any other ratio. On the con-
trary, it is an effort to extend the gold
standard to silver using countries with
out upsetting business. Its purpose is
to bring about stability Of exchange
! between gold standard countries and
such silver using countries as shall en-
ter into the proposed agreement. In
other words, the suggested ratio OF 81
to l is not a coinage ratio between the
two metals, but basis for an exchange
ratio between gold and the silver coins
of the countries joining in the agree
ment.
The present Mexican dollar is worth
| its bullion value. Its coinage is unlim-
tied, and the same may be said of its
fluctuations. The result is disastrous
in the extreme. paralyzing business.
undermining confidence and retarding
progress. Mexico wants to adopt the
gold standard. Should she do so by
adopting bodily the United States mon
etary system, chaos would follow. 1t
would mean the sudden depreciation of
the Mexican dollar from 3S cents to 81.
No words need be wasted in describ-
ing the folly of such a proposition
What Mexico does propose and ask
however, is that an agreement be en-
tered into with her by those nations
having commercial interests in the far
east which shall make gold the nominal
and legal. as 1t is now the actual,
standard Of value, this result to be ac-
complished, without disturbing busi-
ness, by system of limited coinage OF
silver, backed by proper gold reserves
and guarantees. which will not attempt
to lift CIR control the price OF silver, but
which will have the effect of insuring
stability of exchange as far as none
tary systems are concerned.
To accomplish this Mexico suggests
/ legal coinage ratio Of 80 to /, instead OF
16 to 1, because that would increase the
value of the Mexican dollar from 80
cents to so cents, instead Of 3S cents to
Isl. Naturally, some initial disturbance
! to trade and social conditions would
follow, but nothing OF revolutionary
character like the chaos involved IN the
other plan Neither does this mean that
Mexico would coin a silver dollar twice
the size of the present dollar. She
would simply adopt legal ratio OF 90
| to for purposes Of computation and
Exchange, and continue to coin, Out
only on government account, dollars
Of such weight and fineness and In such
| quantities as may be- agreed upon.
Then the silver coins issued under the
agreement would, in the opinion OF the
supporters of the plan, circulate at
fixed value, regardless Of the fuctua-
lions in the price of silver. and ex-
change would fuctuate only In response
TO natural trade conditions, exactly as
| 1t now fluctuates between Great Brit
ian and the United States.
How thfs proposed monetary system
Ia expected to work can be seen from
the following example: A merchant
in Mexico receiving from the United
i Yrit
in payment Of debt would, under ex-
listing conditions and at the current
] rate OF exchange, be able TO OBTAIN
therefor 1870 in Mexican currency. SIX
months ago, before the recent heavy
drop in silver, he might have reaized
| only $240 Mexican, and SIX months
hence, if he is called upon to pay debt
of 500 in the United States. ana the
nrice of silver continues to fall, he may
he called upon to expend $3.50 Mexican
| to purchase 500 in United States ex-
change. Under the proposed plan II Is
believed that the Mexican dollar, coined
in limited quantities only, at the nomi-
nal legal ratio of 80 to 1, and secured
Inv gold, would retain a constant vaiue
of 5o cents in gold. Then merchant
receiving 800 in United States eS-
change would always be able to obtain
5000 Mexican for it, and If he wanted TO
remit 500 gold to the United States
he could always purchase the exchange
| for 5000 Mexican. The same lllustra-
| ton and the same reasoning Apply 10
the philippines as conditions now ex-
list there, and as they would exist We're
| Secretary Roots plan for distinctive
philippine currency put into operation.
Snap Shots.
A man is never too old to be re-elect-
ed to the senate a.
It is better to do nothing than to DO
something wrong.
The most harmful idiots think they
are smart.
Not much demand for better service
originates with people VINO wait ~
/