The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1918-11-16
A SUBSIDY FOR
GOLD PRODUCERS

eminent subsidy to the producers Of
gold in this country. Attention is
called to the fact that the country's
gold reserve is getting near the safety
point, when the large amount of credit
currency paper money! is taken into
consideration. 1t is argued that an
increase in the gold supply would
tend to check the rise in prices.
Today any producer of gold can
take 1872 grains of pure gold to the
United States mint and have it coined,
free of charge, into a gold dollar. If
a subsidy of, say, fifty per cen is of
fered by the government, any gold
producer can take 1872 grains of gold
to the mint and have it coined into a
dollar free of charge. and receive fifty
cents in addition as a bonus or sub
sidy. The transaction would have
the effect of increasing the purehas-
ing power of his 1872 grains of gold
but the government would stand the
loss of the fifty cents on each gold
dollar thus coined.
Did not the silver producers in 1896
ask the government to stamp 371.25
grains of silver one dollar, when that
amount of silver was worth only fifty
cents, thus increasing the purchasing
power of the 371.25 grains of silver
brought to the mint by the silver
producer?
If a government subsidy is to be
paid producers of gold. why not a gov
eminent subsidy to producers Of sill
yer, and all other metals? Under the
proposed subsidy plan, the govern
ment, that is the people, would pay
the subsidy or bonus.
Would such a plan help lower
prices, or in other words check the
advance in prices? To pay the sub
id. the government would issue
q 2 notes or promises to pay, or sell
hoads. whereas the high prices
re largely due to the enormous
issues and bond issues, by not
only the United States, but by all the
belligerent nations.
Last week there were $2,502, 4S8, 00C
in federal reserve notes in circulation
4 year ago there were only $815,210, |
coo. This is an increase to more thar
three times the amount of a ear ago
In addition, the United States has is
sued, or will issue. more than 100000,
900. 900 in bonds. Other nations have
issued notes and bonds in vast
amounts.
A nation is like an individual or a
corporation; if it issues notes and
borrows in addition by means of
bonds in immense quantities, prices
are bound to advance rapidly. This
was the case during the civil war and
after. Prices in green-backs advanced
rapidly, and did not decline to normal
until 1879 when specie payments were
resumed. High prices manifested
themselves in a premium on gold.
Prices have advanced all over the
world since 1914, largely but not
wholly, because of the increase In
credit money and the gigantic loans
OF all the warning nations. Gold
would probably be at a premium in
the United States today but for the
fact that all credit money such as ma
tional bank notes, federal reserve
notes and g~reen-backs are received
for public dues by the United States
government.
But this legal parity does not pre-
vent high prices; and prices will re-
main high until the issues of credit
currency and of bonds are checked.
That can come only with the close of
the war.
The credit of the nation is stretched
almost to the limit, and the loss of
balance between commodities and cur
rency manifest itself in high prices.
When the equilibrium is again re-
stored, as it surely will be, by the pro-
duction of wealth, prices will gradu-
ally fall. Then the cost of producing
gold will decrease.
Gold forms the basis of credit cur
rency simply because it is discovered
TO possess the greatest concentrated
and stable value of any known com
modify. Any non-pe.ishable com
modify might serve the same purpose,
provided such commodity could be
conveniently and closely stored, and
handled in sufficiently large guam
titles.
The country does not need gold so
much as il needs ocher forms Of
wealth. used to sustain life and ada
to our daily needs and comforts. Gold
cannot be eaten, nor can it be used as
fuel or clothing.
-. 49, -x4t01c {& mould