The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1920-11-30

better than we; but, IL so, the RENE
dial castigation should be applied to
our banking system. On this theory
the way to induce delation would be
by reducing the gold reserve, and
complete deflation would be accom-
plished with its disappearance!
Though we are o threatened with
any situation so extreme as the con-
dition of complete disappearance, APP
parently viewed with equanimity by
our great banker, we are face to face
with a shrinking gold reserve which
we can hardly escape. We can hard
ly expect stable return of prosperity
till Europe again becomes a buyer as
largely as of old. The present situa-
ton in copper is typical of this. Now,
Europe cannot buy before her ex-
change depreciation is remedied -
until then she has nothing to offer us.
The slowing down of her purchases,
however, increases the amount of her
exports al compared with her i'm
ports, and, as regards us, this means
that her balance of trade with us Is
being gradually adjusted, which
means eventually a movement of our
gold to Europe to adjust balances;
and this is a tendency which will be
healthy for the world. Against this
the fact is that more gold is now go
ing into the arts in this country
principally jewelry-than we are pro-
ducing-so that our outstanding pa
per currency will tend to have a
shrinking basis of metal security.
Our whole endeavor should be t o
build up the worlds metal security
underlying its paper notes. The Nc
Fadden bill could wisely be adopted
in this country, and copied in all
other gold-producing countries. 1t
serves the double purpose of tending
to increase the production of gold
and decrease the economic waste of
1t by turning it into purposes of
adornment. The tax of approximate
ly SO per cent which the jewelers.
would have to pay is a moderate one.
Considering the general problem of
taxation for revenue, together with
the McFadden problem of taxation for
increase of gold reserve, we would
be inclined to recommend a 500 per
cent tax on gold and jewelry, of
which so per cent would be turned
over to the miners as a bonus, and
the remainder into the treasury to
help meet the general expenses of the
government.
w think that the McFadden propo-
sition might well be modified so as to
exempt from taxation gold employed
for useful purposes, as in dentistry.
This would further insure the retain
ing of the commodity standard of gold.
value as on the old fixed basis, and
would, in addition. refute the charge
of a change in the gold standard.
But the boarding of gold, especially
in times of great financial stringency,
is looked upon with disfavor by bank
ers; indeed. If the reader will ask for
a single $40 gold piece from his bank
he probably will detect some disfavor
or suspicion on the part of the bank
err; and it is nothing less than hoard
ing to suspend it around ones neck
or across ones chest, or locked up in
strong box as jewelry. Hoard
ing of this sort of silver and gold Gas
ornaments) in India has long made
that country a veritable sink of the
metals; and at the present time more
than the total production of the coun-
try in gold is thus boarded in this
country as jewelry. Will not the
bankers view this also with the ap-
propriate alarm?