People's Pilot, Volume 3, Number 52, Rensselaer, Jasper County, 15 June 1894 — ALL BOSH. [ARTICLE]

ALL BOSH.

The Fallacy That the Government Guarantee Makes a Silver Dollar Worth Its Face as a Purchasing Power. The Nashville Banner quotes with words of strong commendation an interview with Judge W. L. Nugent, of Jackson, Miss., published in the New Orleans Picayune, in which the judge declares that nothing but the ‘‘government guaranty” keeps silver and silver certificates afloat on a parity with gold; that the country has already lost millions of dollars in the effort to maintain the existing parity, and that the “United States treasury is at the mercy of the gold hunter.” The Banner, in commenting upon this, says: “This last sentence states a fact that merits consideration, as it throws light on the financial depression and points out the cause of a very serious trouble with which the country is confronted. ‘The United States treasury is at the mercy of the gold hunter,’ and he is availing himself so freely of the opportunity thereby afforded as to produce a very uncomfortable feeling in financial circles. “Six million dollars in gold went out of the country last week, and the exports for the present week will probably be larger, and it was nearly all drawn from the national treasury, thereby depleting the reserve fund held there for the redemption of paper and to keep the silver circulation at par.” We wish to ask our contemporary where and in what form is that “government guaranty” that keeps our silver and silver certificates at par with gold? Where is this guaranty written, and what is the process by means of which this parity is maintained? What authority has our contemporary for the position that the whole mass of our silver currency is kept at par by the pitiful, precarious and ever vanishing gold reserve held in the treasury? The Banner emphasizes Judge Nugent’s statement that the United States treasury is “at the mercy of the gold hunter,” and that gold is being drawn from the treasury at the rate of almost a million a week to supply his insatiate appetite, which continues to cry with the voice «f the horse-leech’s daughter. We were promised all this would stop as soon as the Sherman act was repealed. Why has this promise failed us? Why is it that gold began to leave the country in large quantities before the Sherman act was passed, and continues to do so after it is repealed? The answer is—“the gold hunter.” But why this eager, restless, persistent search for gold? The Banner has attempted to prove to us that all Europe is gorged and glutted with gold; yet the gold hunter keeps up the chase' with unwearied activity. The gold hunter would not be a factor if gold were not scarce; and, Sherman law or no Sherman law, he remains in business at the old stand. The gold supply not only of the treasury, but of the country, is largely at the mercy of the foreign gold hunter. The many millions of American securities held abroad are practically demand notes to be returned to us for gold whenever there is a condition of financial stress or disturbance abroad. Senator Sherman himself has demonstrated that the withdrawal of gold while the Sherman act was in force was due to causes wholly foreign to the condition of our currency laws. In such a case is it any advantage that we have no means of filling the vacuum in our currency caused by the manipulations of the gold hunter?

The Banner seems to think that we are still losing many millions of gold because of the public distrust of the government’s ability to keep the whole mass of our silver money at par by redeeming it in gold. The only logical conclusion of this argument is that the government must contract the volume of this credit —destroying silver money by demonetization, or else it must sell bonds and increase its gold reserve. The latter plan is utterly futile. We may sell bonds abroad and get gold, but the gold hunter will come and take it back again. The net result would simply be the exchange of government bonds for foreign goods or American securities in foreign hands. The truth is, the moment the people become convinced that the value of their silver money is dependent upon the government’s ability to redeem it in gold, that moment we will be face to face with a great financial panic. Luckily, the instinct of the people is truer than the philosophy of the money sharps. They know that their silver is good money because it will pay a dollar’s worth of debt and a dollar’s worth of taxes in every village, town and hamlet in the union, and not at all because the government of the United States will redeem it in gold.—Memphis Commercial.