People's Pilot, Volume 4, Number 26, Rensselaer, Jasper County, 14 December 1894 — VALUE OF GOLD. [ARTICLE]

VALUE OF GOLD.

Tkore I* a Visible Premium Upon the Tello* Metal In Foreign Single Standard Countries and an Invisible Premium In This Country. A correspondent asks: “How would silver be kept at par with gold if the demonetization act of 1873 were repealed? Would not gold go to a premium and thus cease to circulate as money?” In reply we would say that the repeal of the demonetization act of 1873 would bring about an instant and an absolute change in the relations between the two metals. The silver dollar would be restored to its old place as the unit of value. The value of gold itself would be expressed in terms of silver. Thus an ounce of gold would be worth so many dollars in silver — silver being the unit and standard of value. By the law demonetizing silver and making gold the unit of value our currency system has been revolutionized. Two panics—the most dreadful ever known—have been required to bring about the shrinkage of values necessary to accommodate the demands of this financial revolution. Debts have been doubled, property values and prices have fallen, and. the volume of business has been reduced more than one-half in order that the money sharks of this country and Europe may reap the immense profits resulting from the dislocation. The moment silver is restored to its old place, the silver dollar becomes a unit and standard of value, as it was in the days of our prosperity. Silver would not have to be kept at par with gold, but gold would have to be kept at par with silver. Our correspondent asks if gold would not go to a premium and cease to circulate as money if silver were again made a unit and standard of value. Gold is already at a premium in every country where silver has been made the sole standard of value. In this country the premium is an invisible one, and, therefore, more disastrous than if a visible premium were registered in the market reports. The extent of this invisible premium may be measured and gauged by taking note of the shrinkage in values and the fall in prices that have occurred since 1873. In many European nations there is an actual premium on gold. There is a visible premium of more than three per cent, in Austria, a nation that has been for more than two years trying to establish the single gold standard. Germany has recently paid, and is still paying, la premium for gold in the open market. The result of all this is that we have in actual operation in this country the very results which the gold monometallists say would follow the free coinage of silver. We have every result except the actual additions that would be made to our money of final payment through the operations of free coinage. Europe is taking our small stock of gold whenever a premium on gold appears in the rate of exchange. The result is that gold, which never circulates among the people of this country except on the Pacific coast, has practically gone out of circulation altogether. It is hoarded in the banks more closely than ever. The whole demand for export falls on the small stock in the treasury that is supposed to be held for the purpose of redeeming our legal tender currency. The result is that as the stock of standard money becomes scarcer and scarcer, and,therefore, dearer and dearer, prices continue to fall lower and lower, and business utterly refuses to rally from the deep depression that followed the sudden shrinkage in values and fall of prices in June 1892 —an event that followed the closing of the Indian mints to the free coinage of silver. Our correspondent cannot help perceiving that if our mints were open to the free coinage of silver the export of our small stock of gold would cease to have a hurtful influence. Silver would come in to take its place, and bimetallic prices and values would take the place of the depreciation and depression that nowuxist.—Atlanta Constitution.