Democratic Sentinel, Volume 20, Number 30, Rensselaer, Jasper County, 31 July 1896 — THE PEOPLES'S MONEY [ARTICLE+ILLUSTRATION]

THE PEOPLES'S MONEY

PAYING GOLD DEBTS. THE gold men are claiming that freo coinage would drive all the gold out of circulation and bring us to a silver basis. Then those who have prohirsed to pay in gold'would be unable to get it except at a high premium and would be ruined. We ate told that under free coinage the great banks and trust companies could pay of their>d«positors with 50-cent dollars. Still rite bankers, as a class, are fairly frantic in their opposition to a measure which they claim Is going to give them ■a profit of 50 cents on each dollar of their enormous deposits. Their pious souls revolt at the idea. Again, it is claimed that those owing ■debts payable in gold would be ruined liecause of the high premium they would be compelled to pay for gold, and yet, strange to say, the holders of gold mortgages are wild with fear at the thought of being paid In gold dollars at a premium, or, failing to get the gold, be compelled to foreclose and take tlie mortgaged property at half its value. Their Christian sensibilities are shocked at the thought. WTiat nonsense! If the great banks could double their money as a result of free coinage, does anybody doubt that they would jump flt the chance? If the holders of gold irfortgages could increase their value ’liy forcing gold to a premium, would they let such an opportunity go by? By every trick and scheme of manipulation known to finance, they are working to add to their accumulated millions. all the time pretending that they oppose free coinage in the interest of the laltoring man, the savings bank depositor. and the down-trodden debtor. It ought to be apparent to any person of usual intelligence that they are looking out strictly for themselves; that the gold standard gives them certain advantages which they might lose under free coinage, and hence their opposition. :

I.4keall other claims of the gold standfl rd people, this one involves many assumptions and absurdities. It assumes that several hundred millions of dollars in gold are to be driven out of circulation, milking money scarce and at the sumo time cheaper. It assumes that the United States, the greatest and richest of nations, is going to stop using gold, and still gold become dearer and more difficult to get. The ridiculous character of the first has been repeatedly exposed. Let us now glance more specifically at the latter. Suppose that a free coinage law were enacted, gold were to retire from circulation, and our silver and paper money vycre to drop to 50 cents on the ■ dollar. Such a result would be impossible, but we will supose'it. What would that mean? Simply this, that it would take two silver or paper dollars to equal one gold dollar.. In other words gold would stand at a premium of 100 per cent, over other forms of money. But if a silver dollar is only worth half as much as a gold dollar, then mhuifestly it is only half as hard to get it. If a bushel of wheat is worth 50 cents in gold, it will be worth $1 in silver. Now, if a farmer owes a gold debt of SSOO he must sell 1,000 bushels of wheat in order to get it. If we were on a silver basis and silver dollars were only worth 50 cents in gold, his 1,000 bushels of wheat would bring him 1,000 silver dollars. With these he could pay his debt as before. His 1,000 silver dollars would be the precise equivalent of 500 gold dollars, and he would neither gain nor lose. Tin- gold standardists assume that the silver dollar is going to drop to oneI'.ilf of its present value, and still it will require the same amount of labor and the products of labor to procure it. Then it is further assumed that it will require two- of these silver dollars to procure a gold one. If these assumptions were true, it would follow that the free coinage and increased use of silver, and the disuse of gold in this country had in no way affected the value of silver, but had doubled the value of gold. This assumption shows an ignorance of the-meaning of the word “value,”.as well as of the principle of supply and demand. Tlie reverse would be the case. With the American mint open, silver would be worth more than it is now, and gold less. This would he trud even though parity were not restored and gold went to a premium. 'y'f

Suppose that under free coinage silver went to $1 an ounce in goid. This would, make the silver dollar worth 77 eeuts. in gold. The gold dollar would stand al a premium (over silver) of 30 yr cent. But it-would not take as much wheat or cotton or any other product to buy a gold dollar as it does siow. Why not? Because the most of the gold forced out of circulation here, would go to Europe. The annual product of the mines would do the same. As; ’a result gold would become more plentiful* on that continent, and the prices there would rise. Our wheat and cotton and breadstuffs of all kinds would go up in fife European market, and that would carry them up here. Thus we would be confronted by the paradox of gold at a premium, and at the same time cheaper. A man with a gold mortgage on bis farm could pay it ibore easily than he can now. A farmer does not manufacture money for himself—he buys it with this products, and the higher their price the more,money he can get whether It be gold or silver or paper.' The creditor classes by forcing the gold standard upon the people, have driven the debtor classes to extremities. milking it almost Impossible for .them to pay their debts. Having creI®ted these conditions, leaving the debtors almost hopeless, they now unblushIngly declare that if they (the debtors) attemiit to relieve themselves, other and worse donditlons will arise whereby they will not lie able to pay at all and consequently will be ruined. In short they now have the unfortutate dbbtor fn a ditch from which he' Is* struggling desperately to extricate himself, and they left him that if he

does not stop Lis struggles he will be pushed in still deeper. If such argument as that were to prevail no evil could ever be remedied. ‘ ... Precisely the same principle applies to foreign debts payable in gold. We often hear it said by way of objection to free coinage that if gold should go to a premium, and retire from circulation, while we eould use silver or paper for local trade, our foreign creditors would tnke nothing but gold, and we would have no gold to give them. The answer to that objection is very simple. Even if gold should go to a premium and retire from circulation it does not follow that we could not get gold. Any nation can get gold if it has anything to buy it with. Russia has been a silver standard country nominally, but with a paper currency. Nevertheless Russia has succeeded in storing away in her war chest something like $400,000,000 in gold. India is a silver standard country and she is supposed to have from $600,000,600 to $1,000,000,000 in gold hoarded awayJ So with other silver countries. If we were on a silver basis to-morrow it would not make our command over gold any the less, but on the contrary greater. In the first place every dollar that was expelled from the United States would add just so much to the stock of Europe, where our surplus commodities must be largely sold. This would, as has been frequently stated, raise prices there, and give us more gold for our wheat, cotton, petroleum and breadstuffs. Our mines would go on producing gold just the same, and if we were to stop using that metal for money at home, every ounce that we could get from any source would be available for the payment of our foreign debts. t?hder existing conditions, we have to provide gold both for home use and to satisfy the foreign demand as well. When the foreign demand becomes unusually strong and a heavyexport of gold follows, the cry of “danger” is raised, and the whole country is nearly or quite thrown into a panic. That is because we are attempting to maintain a gold standard with an insilfficient supply of gold. I» we were upon a silver basis or a paper either, 1t would make no difference to us whether there was much gold or little gold in New York. The most of us can remember back to the time when our currency was exclusively’ paper, depreciated below the gold and silver level all the way from 1 to 60 per cent. But we paid our gold debts far more easily than we can now. Our mines continued to yield, our products brought good prices in gold in the European market, while an abundant supply of “greenbacks” did our internal business and filled the entire country with the hum of well-paid industry. So it would be again. If free coinage restores and maintains parity, that of course -meets every objection. If It Showld not restore parity, and gold should rise to a premium, it would give ns just the same advantage as the silver standard countries now enjoy in the European market, and our foreign gold debts could be paid far more easily than they can now.—National Bimetallist.

English Authority, Aneditorial in the London Commerce, a recognized trade authority, champion of monometallism for England and claiming the largest circulation in the world, has caused considerable talk among business men. From it the following extract is taken: Leaving the question of tariffs for a moment, let us consider what a bimetallist America will mean for us. In the first place it will mean an immediate premium upon United States exports. The effect of mining silver at the proposed ratio would in all probability bring about a great boom in •manufacture of all kinds. Wages might rise considerably, but the experience of other countries goes to show that they would not rise in proportion to the advantage which exporters would derive who send their goods to a gold-using country, to wit, the United Kingdom. The manufacturers of the States would not be quite in the same position of vantage as the agriculturists of the ArgenUtU, nor the exporters in India, but thty would have a sufficient leverage over the manufacturers here to turn the scale in every trade where now there is a doubt which way the market trends. In tin plates, many kinds of machinery, including some of the very heaviest, in leather, and in many sundry manufactures where the British producer can with difficulty hold his swni ihe effect of the change would be decisive. Then this policy is also a bribe to the farmers. American dead meat—live cattle being prohibited—wheat and all farm produce suitable for exportation would come over in greatly augmented quantities, for the difference in the exchange would mean such an addition of profit that an immense stimchfs would be given all along the line. As to silver mining, all that can be said is that there would be a rush. The dimensions of the movement would depend upon many things Impossible to foresee. These anticipations oi what has become possible are not, be it remembered, based on mere theory. We tnow already too well what to expect from foreign traders In a country where silver is the standard currency. India, Japan and Argentina are all bearing witness to the insidious effect on British trade of conditions similar to those now in perspective in the United States. Meantime, we cannot too soon face the possibilities and realize the true significance of the position as it is. Among our local business men thia is considered a substantial acknowledgment that free silver coinage at a ratio of 16 to 1 would give us the markets of the world, both for our manufactures and our agricultural products.—Cincinnati Enquirer. Recording to the beliefs of the Arizona Indians, the cliff dwellers built along the bluffs because they-feared another deluge.