The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-08-08

ticles in Germany after the war, OF
even now. is less than 1t Is in this
eountry-yery much less. The German
financiers have boasted of this re-
peatedly. II amounts to the same
thing on the part Of Germany, as plac-
ing a premium on our gold supply,
such premium being equivalent TO the
difference in the average cost of labor
between the central powers and the
United States and her allies.
While tariffs and trade agreements
may be developed and arranged to off :
set this difference in some degree, the
quickest way to place German labor
and industry on a parity with that In
the United States and the allied coun-
tries, will be arbitrarily to increase the
value of gold in namount sufficient
to offset the average difference in
the wage scale existing between the
allies and the central powers at the
Present time. This is possible only be-
cause of the conditions mentioned be-
fore, namely. that 81 per cent of the
gold and of the gold producing mines
of the world are controlled by the al
lies, and less than per cent by the
central powers. 1t is evident that the
governments Of the allies that control
this gold resource would have to do
twice the amount of work and sell
twice the quantity of material in order
to obtain the gold supply necessary to
establish proper reserve against the
paper credit structure that has been
developed by them on account OF the
war In other words, the governments
of the allies would compel Germany to
pay twice as much for her necessary
gold supply.
1t has been argued that such change
in value of the basic metal, gold, would
derange the structure Of credit, blu,
this can be obviated by agreement be-
tween England, France and the United
States, the countries that control the
gold supply of the world, and also by
suitable legislation in their respective
countries.
1t would be necessary, of course, first
for the governments not only to with
draw all gold coinage and hereafter
command the entire existing supply,
also to command all the gold to be
produced in the future. In large de-
ore hi hnc n1s Ixy
gold coins are rapidly going out of cir
culation. The issue of the federad re-
serve certificates is an illustration Of
what would take place in lieu of the
issuance of gold coinage. 1t would not
derange the value of the gold curren-
cy as issued, because it Is apparent
that the value of gold behind this cur
rency is in any case arbitrarily fixed
by the government. For instance, If the
governments arbitrarily agreed that
gold should be fixed at $40 per ounce
instead of the present fixed price of
$2067, the owners of certificates or
bonds will receive half as much gold
as they would now receive in redeem
ing their paper: but if half an ounce
of gold is worth twice as much as it Is
now worth (and this would be the
case) there would be no actual de-
rangement or change in the value OF
the curreny Of paper issues. In other
words, half an ounce of gold worth $40
would be just as satisfactory to the
holder of paper as an ounce worth
$20.67, because in both cases the value
itself would be fixed arbitrarily by the
government Moreover, this value
would be more in keeping with the
actual value of the gold as produced.
Fineness has to do only with the
purity of gold. The fixed price of
S20.67 per ounce as now established,
refers to pure gold only. Gold of less
fineness than pure gold is obviously
worth less than $20.67 per ounce in
proportion to the quantity of other
metals contained therein. For instance
in the 500 gold piece as now issued,