Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-01-28
LIVING IS TOO CHEAP
Mr.. Peppers Estimate Of the
Guatemalan Republic.
PRESIDENT CABRERA
FINANCIAL REHABILITATION
THE TASK BEFORE Him.
To Put the Country on Silver Basis
the Problem of His Second
Administration.
Special Correspondence Of The Evening Star.


Special Correspondence of The Evening Star.
GUATEMALA CITY, January II. 1904.
Living is too cheap in Guatemala. Take
tropical country, where wants are easily
supplied. and vast volume of money with
which to supply them, and If some theories
| of political economy are correct the acme
| of human happiness ought to be reached
| But it isn't so here. The people have 10
| work pretty hard for living. The cheap
ness theory breaks down.
President Cabrera has been busy during
his first Administrations establishing IN
| ternal peace and giving effect to the anrma-
ton of friendship toward the neighoor re-
publics. He is the representative OF the
liberal party. which has named him Tor re-
election. He will be reelected, and If dur
ing his second term he succeeds in getting
| his country out of the financial quicksands
| and on solid ground. he will deserve even
| more praise than now is given. Financial
rehabilitation for Guatemala, it Is under
| stood will be the leading policy of his ad-
ministration during the second term. 1t Is
| a great task, yet is not impossible Inc
| country has many elements OF swift and
sturdy recuperation.
| The theory which has broken down in the
| application of it was a thinly disguised
| cheap labor one. Guatemala has one sta-
pie, world sought crop-coffee. This is sold
for gold. To produce 1t by paper wages
| seemed a means of never ending wealth.
| Yet there are a large number of poor coffee
planters and a larger number who are in
the hands Of the money lenders and whose
| estates are mortgaged beyond redemption.
| They are poor without yet knowing it.
Everything is Cheap.
| Before studying the application Of the
| theory further, few results may be worth
noting. Railroad travel is low that it is
cheaper to keep moving than to stay STILL
For a good seat in an unusually good car
or a good train and over an excellently bal
| lasted roadbed from the port of San Jose to
| the capital on the Guatemala Central
paid in local currency the equivalent of Al
| cents gold. The distance is seventy-five
| miles. Freight tariffs are proportlonately
| as low passenger rates.
| At the best that the best hotel offers,
with all the extras that can be thought Of
| on the American plan, the charge Is the
| equivalent of 81, 1914 cents gold.
Fees and tips on the same basis. A
shine is 2 cents; walters gratuity, II
| anything, 3 cents; a messenger, 11a cents
A sumptuous New Year dinner in the best
| restaurant, by special eXertion was made TO
| cost half dollar.
| But it is not the effect Of monetary sys-
| tenn on the passing visitor that need con-
! Germ a country. Its own people, its own
| trade and it's own industry are the measure
| to determine whether it il well off. With
| wages near zero and with the purcna.Ius
| power of the mass of the consumers so near
! the vanishing point, cheapness of the ne
| cessities of life has to follow. 1t also has
| to follow that there becomes hardly such
a thing as imported necessities because for
/ eign products cannot be adjusted to the
| lower levels of cheapneSS. Guatemala once
| had a f1ourishing foreign trade, but the i'm
! ports have dropped and the governments
| income has fallen with the drop. Some reve-
nue. had to be found, and the export duty
| on coffee was raised to one cent a pound,
| gold. With the existing price it is a very
| heavy tax to pay, but the planter and eX-
! porter must meet it. Taken with interest
| and similar charges in gold, it becomes a
| question whether the excessively cheap Ia
! Dor, paid in fuctuating and deprecated pa
| per is compensation. 1t is here that the
| original theory has broken down in opera
| ton.
Exchange at this time varies between
! $3.50 and S17OO. 1t has been as high AS
- to !. That is, gold dollar has bought
| twenty-five paper dollars. Exchange seems
! to be the chief business of the banks, and
/ there are many of these institutions. The
money brokers al so are numerous. All of
| them keep busy at the expense of the rest
| of the community.
Abundance of Small Coin.
| Another illustration of the cheapness Of
money is in the abundance of small coin.
| l have been recently in countries where,
| though the mass of the people were poor,
there were no pennies or 2-cent pieces IN
| circulation. That does not obtain in Qua
| temala. The silver coins We're exported
| long ago when the paper issues began 10
| get plentiful. but there is a coin known
| the real or shilling which is not silver. Its
nominal value is 1919 cents. Then there IS
the half real and the quarter real Guar
| to The latter is often bought by the hand
full for souvenirs and is used in making
rios such bracelets and necklaces. But
| it also is used for change and the half real
! is quite common for this purpose. The gold
| value of the quarter real is about thirty-one
| one hundred and sixty-fifths of cent That
| is fractional circulation almost as minute as
| the Chinese have.
| Excessively low wages are evidence that
| the reward of toll has not been adjusted to
! the fall in the value of money. This also is
! true of salaries. There has been but little
| change in the amount paid Officials of the
| government, such cabinet members,
| ceive $500 a month in currency, where they
| used to receive the same amount in paper,
| while the salary of the judges is $500
| monthly. That is to say, the remuneration
| of the highest government officials Is 500
| year in gold and of the judiciary $500.
| The pay of the general run of employees.
| whether official or in business. does hot
vary much from 500. paper, per month.
| The people live on this basis because they
| must, but 1T has to be on a limited scale
| Genteel poverty as in all the Latin Ameri-
| can countries, is philosophical and uncom-
planning.
| 1t is not necessary to go to the old set
| tier to hear the talk of the good old times
| They were good as recently as a dozen
years ago, when there was plenty of gold
! and silver in circulation How the issue of
| paper money was begun and how reckieSsly
the banks put it out, do not concern the
! present situation. 1t Is the common story
| of all nations which go into the business
OF creating circulating medium by means
! of the printing press until experience
| teaches when to stop the presses The notes
| recite that they are redeemable in ''moneda
| efectiva,' effective or current money and
| this is supposed to be silver But in eff
| feet, there is no silver available for re-
| demption purposes. 1t must be secured
The Problem Presented
How to obtain it is the great problem
which it is hoped to solve during President
Cabrera's second administrations No
thought is entertained of the gold stan
dard Guatemala will be glad to get on a