Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-09-02
GUATEMALA TURNS
TO GOLD MONEY
New Coins, Minted in U. S.,
Replace Paper Used rs
| YearS-Loan Unneeded.

Guatemala, a republic of Central
America, which equals in area the
state of New York, has just accom-
plished an unparalleled financial feat
III stablliZing it's currency and placing
IT on gold basis after 26 years Of
fuctuation and depreciation, and this
without loan. either foreign or do
mestic. The President of the republic,
Gen. Jose Maria Orellana, and his
minister of finance, Senior Carlos o.
Zachrisson, have been receiving con-
gratulations from every part of the
world, and much credit is also given
to Senior Don Francisco Sanchez La
tour. the Minister from Guatemala
TO Washington, who purchased the
gold and silver from this Government,
selected the design for the new coins
and superintended theeir production
by the United States mint in Phila-
delphia
Discussing this remarkable achieve
ment, the Guatemalan Minister said:
1.-THE sterilization of the money of
Guatemala after more than a quar-
ter of a century of fluctuation and de-
probation, was accomplished in the
following manner. The first conSid-
Grafton was that of revaluation, and
this was done by adopting a new
unit, the value of the American dol
lar. Then followed the amortization
of the deprecated paper money at an
arbitrary rate. Next a reserve fund
was created with the object of pro-
tecting the paper money during the
period previous to its redemption and
amortization, which of necessity was
a slow and extremely delicate process.
This reserve fund was accumulated
through various taxes on imports and
luXuries, such as ernmentS gen.
orally do during wars or other ma
tional crises. Export duties made the
bulk of il, and there was also the
profit which accrued to the Guate-
malan treasury through the minting
of the silver.
Not single CentavO was obtained
Through any variety Of loan. The
funds which became available through
this system of taxing were handled by
specially created bureau called La
Gaia Reguladora.' and such excellent
work did these officials accomplish
that the very day the new currency
law went into force the money of the
republic became stabilized and of Il
fixed value When a coffee planter
sells his crop he now knows to the
last cent what he will receive for It,
while in the old days he sometimes
faced ruin because the figures quoted
greatly from those in force when it
was ready for expectation. The new
currency is protected by a reserve
fund of moro than 40 per cent of the
gold and silver coins now in the treas
ury besides those in circulation. The
old 'billetS,' the paper money, are now
being exchanged at a rate established
by law, and new bills representing
gold and silver coin in the national
Treasury or New York drafts are in
brisk circulation.
Since the recent adoption of the
new currency law the government of
Guatemala has established the new
central bank, which is to be the only
bank of issue for the next 80 years.
The capital for this institution has
already been many times oversub-
scribed by the citizens of the republic
and by business men of other ma
tionalities living in the country. 1t
IS almost impossible to describe the