New-York tribune., 1918-01-20

might have already learned that
had come into their preserves anc
made a profit in gold at time
when they and their associates were
trying to discourage the despicable
Chinese speculation. When
reached the hotel it dawncd upor
me that the six sovereigns belonged
to my wife, and that I had beer
carrying them so long that I thought
them my own. So I did not make
the profit.
Does any one think there will
ever be sound money in China if the
foreign exchange bankers can pre-.
vent it?
Should Americans
Invest in China?
Now comes the question which
most concerns us Americans. "Why
should any American invest money
In China, or in any country not
actually on gold basis to-day?"
America is actually on a gold
basis. In Honolulu the clerks at
the stores will apologize to you
whenever they are compelled, on ac-
count Of shortage in paper money,
to return you considerable amount
of gold in change. No one wants
gold 50 long as he can be sure he
can get it. The moment gold is re-,
fused at an official place of redemp-
ton, then the country in which the
refusal Is made is no longer on a
strictly gold basis, no matter what
laws Of expediency may have been
passed. In times Of grave public
danger reputation of gold pay
ments is fully justified. But it is
worse than foolish not to let the
public know the true state of af-
fairs.
shall have the apologists for fiat
money and other unsound currency
at my heels for these statements.
But was not brought up in "Coin's
Financial School" I fought with
my pen for sound money in 1896.
when the free silverites were almost
strong enough to beat Mr.. McKin-
ley. They did not beat him. We
got sound money; the gold standard.
without qualifications; and we have
maintained it to this day. If not
the greatest, it has been one of the
greatest contributing causes of our
unequalled prosperity. We needed
only this one pillar to bring our
economic structure equal in strength
to that Of England, which has al
ways seemed to understand what
sound money means to a nation.
Poor China's monetary system
cannot be said to be unsound. It's
rotten!
Reputation Here
An Impossibility
In making any investment, par
ticularly in bonds not secured bv
mortgages on physical property Of
undoubted liquidating value, the
first consideration is the moral risk
Bonds of nations, or their sub-divi-
slons have often in the past been
issued too literally, either through
necessity or otherwise. Particular
ly in America, municipal bonds have
frequently been put out in startling
quantities through the whims Of
rather petty politicians who were
willing to burden their fair cities
with huge debts in order to gain for
themselves the evanescent name Of
progressive statesmen" Yet all
these obligations are secure, because
they are backed by the basic honor
OF millions Of "safe" people, who
understand the next-to-sacred char
acter of the promises contained in
modern financial scraps of paper
known as "bonds." American peo-
pie will never try to repudiate pub
lie debts under any circumstances.
On the other hand, who can tell
what will happen in the Far East?
All is nebulous. The natives have
not had a century or more of con-
slant training and enlightenment az
to the nature Of paper promises
and the necessity of their fulfil
Ment. Russia whila 0aoo-,,h;..,1x