New-York tribune., 1922-02-05
Panic OF 1898

Any one who remembers the panic Of
1893 knows that.
"ls not gold a universal money; that
is, does not gold dollar of the United
States pass current in foreign coun-
tries? No. gold coins Of any nation
are estimated at bullion value else
where than in the country of issue"
There is no universal money" in the
shape Of universal coined money" But
the universally of gold as money ma
terial is proved by the very fact men
toned, viz, that gold coin Of one coun-
try is valued in another country at its
bullion content. whereas silver coin Of
one country is valued in another coun-
try at its face value in gold, less ship
ping charges, provided that in its home
country it can in fact be exchanged for
gold al that face value.
A full weight British sovereign is to-
day worth S4.S6 at New York, although
s5 Bank of England note is worth
the pound. The reason is that in fact
the banknote cannot be exchanged for
its face value in gold sovereigns.
HAS gold ever been demonetized :
In the SOS the Netherlands, Belgium
and Germany demonetized gold and
made silver the sole unit of value, or
money base. in their respective juris-
dictions. Why was this done? The
discovery of free gold in California
and Australia led to the fear on the
part of holders of money credits that
the increase of the worlds supply of
gold would render the metal so cheap
as to depreciate it's money value.
If the "decree of government that
gold or silver, properly certified, shall
be legal tender makes metal money
why should these governments have
taken fright (prcmaturcly) over the
possible increase in the supply Of gold
FoUo,ced Example
Why did not other countries follow
their example? And why did those
countries retrace their steps?
Because gold continued to be the one
universally acceptable substance. and
silver lost the acceptability it had en-
joycd.
"Has paper money ever been at a
premium over gold? Yes"
No. Never has paper money been
worth q premium over gold in any real
sense. Whenever this has occurred
as during the late war, where export Of
gold was forbidden and United States
notes, which could BE- shipped by mail
were more desirable than gold, which
could mott has. been by reason of
purely temporary conditions physically
interfering with the movement of coin
"Has there ever been another in
stan.e of the kind? The Governor of
the Island Of Guernsey. in the English
Channel, refused in 1S47 to sanction
the borrowing of money to build d
market house, but financed the enter
prise on the strength of the credit OF
the island by issuing scrip that was
made receivable in taxes and market
rentals. Tho project was successful
and the demand for the scrip finally
exceeded the supply. so it rose to a
premium over the ordinary coin Of the
realm-gold end silver. To remedy
this it was decreed that market rentals
might be paid in the ordinary cur
rency. When the scrip was retired the
market house had paid for itself and
the island had its improvement with
out the payment of farthing to the
money lenders"
Utter nonsense! In the first place
the scrip" was not money" at all, but
form of investment emitting one to
the services of the market house As
long as the right to these services was
exclusively in the scrip, the scrip sold
at premium; a s soon as the exclusive
privilege was withdrawn the premium
| disappeared.