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A Dangerous Political Issue.
powerless when changes are great, and as soon as it is seen that either gold or silver coin is likely to command a premium in any country, it is withdrawn from circulation, and panic commonly results.
Besides this, the fixing or the altering of the ratio must become a dangerous political issue unless it be decreed that it shall be adjusted always upon the basis of market values. 1
From the beginning of civilization gold and silver have been used about equally as the money of the world.?
Joint-metallism would continue this beneficent parity, and would provide a sufficient metallic basis of money to check the illegitimate decline in prices of commodi
Numerous writers have recognized the fact that there would be some advantage in a flexible ratio. The following plans have been proposed : Frequent recoinings at market values. Coins of an amalgam of fluctuating proportions. Gold disks framed in silver disks of fluctuating thicknesses. An agreement among nations generally to join in the purchasing of silver, and in fixing the ratio from time to time, etc. All these plans present difficulties which my plan entirely avoids.
2 Tables on pages 49 and 50 of the Report of the Director of the Mint for 1893, give the estimated stocks of gold and silver money in the world amounting to $3,901, 900,000 gold, and $3,931,100,000 silver.
1. Because we are the largest producers of silver.
2. Because we owe more money than any other people.
3. Because our principal exports are wheat, cotton, etc., which have to be sold in competition with India and other countries whose currency is silver, and where wages and the prices of commodities used by laborers remain substantially as they have been for many years.
Cotton and wheat are sold in England at gold prices for pounds sterling, and thus the world's price is determined.
For every pound sterling which a planter in India receives for cotton or wheat sent to England, he can now employ twice as many native laborers as he could a few years ago, for their wages remain the same in silver coin, viz. : one quarter of a silver rupee per day.
In view of this fact as to the reduced gold cost of the production of wheat and cotton in India, owing to the fall in the value of silver, or appreciation of gold, I am unable to comprehend how our greatWells and Atkinson Answered.
est economist, my esteemed friend, the Hon. David A. Wells, can maintain what he wrote in his very valuable book on Recent Economic Changes, p. 232 : “ If the fall in the price of all desirable commodities has been an evil, as not a few seem to believe, it cannot be conclusively proved, in respect to even one article, that any such fall has been extensively due to any decline in the value of silver or any appreciation of gold.”
If Mr. Wells's views have been modified by the course of events since August, 1889, the date of the preface to that book, it would be of the greatest possible advantage to have a public expression from him now.
These facts regarding the fall in prices of wheat and cotton appear to furnish a complete answer to Mr. Atkinson's demand for the name of any one article in which the variation in price since 1873 may not be accounted for without any regard to the ratio of gold and silver.
If silver continues to decline, much less wheat and cotton will be cultivated in
this country, the wages of our agricultural laborers must fall, and as less of these will find employment in raising wheat and cotton, the competition for employment will become greater in other departments also, and will result, after a period of strikes, etc., in a general decline in wages and a great increase in the burden of debt, and the more so if that debt has to be paid in gold.
Gold monometallism, by diminishing the total metallic basis of currency, and thus causing a continual decline in everything except gold, tends to transform a nation of enterprising farmers, traders, and manufacturers into a nation of wage seekers, with some great money lenders, speculators, and monopolists. For the difficulties and losses of productive enterprise are increased and destructive speculation is promoted.
Business development requires some prudent use of credit. But to incur indebtedness on a gold basis when the world's known stock of gold is less than one eighth of the world's known debts, is
Danger of Another Panic.
to sell gold short when the short interest is known to be eight times as large as the total known amount of gold in existence.
We are now in danger of another great money panic from the withdrawal of gold from circulation. Under joint-metallism one money metal could not drive out the other, for they would have to be presented together at the mint and would be available together in payment of debts.
Our natural resources and mechanical development must give this country the leading position, even while we may endure much bad fiscal legislation. But if our commerce were relieved from unnatural restrictions, and our currency placed upon the sound, honest, permanent, adequate, and scientific basis of jointmetallism, the final money reserves of the world (the money that can be loaned at the lowest rate) would be held here, and the exchanges of the world drawn in dollars.
There ought to be a commission appointed, consisting of two eminent judges of our highest courts, with, say, David