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Show THEY ARE WORRIED. The good book tells us that the sins of the fathers shall be visited upon their children, even to the third and fourth generations. That is being realized now by those who sang a pagan when they believed that silver, as money, was destroyed. The trouble comes back to plague them. The New York Times publishes a speech made by Mr. Charles A. Conant, treasurer of the Morton Trust company of New York, before the American Economic Econ-omic association at Philadelphia o nthe 23rd of last month. The Times says that Mr. Conat has made a special study of the monetary question in the Philippines, and he spoke on the theme of "Currency Problem in the Orient." As given by the Times, he said: "A new crisis of exchange has been invoked by the recent fall in the gola price of silver a crisis which does not affect the gold countries directly di-rectly in their transactions at home, but does affect af-fect them profoundly in their relations with the East "By an unfortunate combination of circumstances circum-stances China has been subjected to a burden which under her loose system of taxation has withdrawn her from the market as a purchaser of silver and brought her into the market as a vendor ven-dor of It. The result has been primarily to depress de-press the price of silver almost to one-third of Its old historic parity. Much more Important has been the effect of this fall in Bilver upon China and other silver-using countries In diminishing their power to buy abroad. There is danger that the powers, in exacting the last pound of flesh from China, have 'killed the goose which lays the golden egg' by making it Impossible for her to continue her purchases of $200,000,000 annually in foreign goods. "The fall In silver has necessarily produced a similar influence in less degree upon our Southern m mWM neighbor, Mexico, where a late consular report If pHl shows that American investments exceed $500,- $ g'flfl 000,000, by adding greatly to the silver price of f frfiS her imports; has arrested the development of the Ki'Afll Philippines by discouraging the investment of i Ifflfl American capital, and has threatened to invoke I J Cll the same form of crisis in Siam, the Straits Set- iliKfll tlements, and the extensive possessions of France ifl in Asia. Thus the unforeseen results of diplomatic L j I'B greed is to defeat the purpose of all the mostly 1'IJmI and ostentatious measures of Caucasian interven- llHH tion in Chinese affairs for the last half century. yH "The situation calls loudly for a remedy; but p'H8l it is useless to seek this remedy in the delusive Hi wfl quicksands of international bimetaalllsm. The . ij$ h9H principal silver countries are not fitted for the in- wJhI troduction of a pure gold currency. Their scale fiftl of wages and prices is too low to make gold coins lf!8 convenient in daily transactions, and their wealth If Bl in most cases is insufficient to justify them In M'BI entering upon a rivalry with the rich nations for pI'vH the world's stock of gold. jpfiHflfl "Is there then no remedy for existing condl- iffi'SI tlons? Must the silver nations be condemned IwBH to a rate of exchange with the gold nations which ffBH fluctuates with the widest limits, which exposes f'Sfll their trade to greater uncertainty than the throw wfl of the gambler's dice, and which repels from in- "'iaJBI'Ifl vestment among them the accumulated riches of 'CnH the great civilized nations? This by no means jjiflH follows. There is a possible remedy based upon hIhH sound economic principles. JHVfll "It is possible to bring silver coins into a IffiBI fixed relation to gold by so limiting the supply IlijBfll of such coins that it shall always equal and more i IffiH than equal the demand at a fixed price. The price SJafl of an article responds to the demand for it. If lfl'1 the silver currency of the Philippines is just suf- fll ficlent in quantity to meet the demand for it, it 1811 will retain the value given it by law; if the sup- ifiH ply is greater than the demand for it no law can jj&fll bolster up its prices. Control of the quantity of tHldfl the currency by the government is the only means (finl of separating it from the fluctuations of the bul- tiflfffl lion market and giving it a definite value in gold. PIXH "Government control of the supply of coinage Hiflfli does not mean that this supply shall be arbi- iKfl trarily fixed without reference to the currents iill of commerce. If the supply of silver currency in wH the Philippines, in Mexico, or in any other silver Ifll country is kept at a fixed relation to gold, gold mSJl will continue to be, as it has nearly always been, 3H the money of international commerce. An in- . nfSS creased demand for currency will manifest itself IHifll by a high gold value for the local mo: oy, while SflU a decline in the demand will manifest itself by sIBI the loss of such gold as the country has and de- HiiRHI cline in the gold value of its silver coins. Wi "Through the foreign exchanges it will always ISsllH be possible to determine whether the supply of miBB currency is responding adequately or not to the IflH demands of trade. This can be done, even with- rafiH out any direct offer to redeem silver in gold, If bBMHGJ the government will establish a gold exchange 88bbW fund in the financial capitals of the world, like flmUD London and New York, against which bills may xfill be sold when the currency is redundant and jSuH where bills entitling the holder to silver coins may jfflfflfflB be bought with gold when there is a demand for fPJJHjflM them. The offer to receive the silver coins at a BeSHW It i flxcd par for public dues would establish a limit- ed redemption, such as has alone maintained our I i own silver dollars at a par with gold. 1 i "In order to secure the best results for silver 1 as a commodity and for the steadiness of the mon-IH mon-IH I etary system of the silver countries it is highly H 1 desirable that there should be some international i w concert of action between Mexico and those coun-1 coun-1 I tries having dependencies in the East. Such con-Hi con-Hi f 1 ! cert of action would undoubtedly recognize the H 1 1 fall in the value of silver by the adoption of a H I "new- ratio of about 32 to 1, as has been proposed H i for the Philippines. If China is given a uniform B I g monetary system as provided in the recent draft Hi I ' of the treaty with England, she will absorb im-H im-H mense quantities of silver and do much to give H. I 'Ij ' the metal stability of value. The adoption of a H: ij common unit of coinage between China, Mexico, Hi I 1 1 the Philippines, the Straits Settlements, and Indo-H; Indo-H; w Ij China would undoubtedly do much to promote ; I m i their trade with each other and with the gold H r i i countries. H r i! "It is not desirable, in my opinion, however, m I S ! in the present state of international good faith H1 iff; an economic knowledge that one nation should be K I I, , bound to use the coins of another or that any na- H i P I tin should be deprived of the exclusive control K i . , Ij . over her own monetary system, which is lacking Hi; , in Mexico and the Philippines, because their de-- H ; i 1, 1 predated silver coins have become international i 'K 1 in their use. It is desirable that each nation B 'IE; should have control of its own monetary system, B .i ! iy ! B j K in order that it may correct its own mistakes H ' 1 m 'I and suffer the consequences of its own blunders, . M ' g JT i but the time is evidently at hand for a new effort M I'l to restore the par of exchange between the gold M H I! countries and the East along lines which conform if II I to economic laws instead of vainly seeking to re- m I , I verse them." B 1 M Our neighbor, the Tribune, in discussing the fj I ft foregoing, uses these words: "In order to do away with this disadvantage to the silver-using nations in their dealings with the nations whose standard is gold. Mr. Conant makes two proposals. One is that the nations all agree on a fixed ratio between gold and silver, and he suggests that this ratio might be 32 to 1. That, however, is open to the objection that this is not a political but an economical question, and trade would not necessarily recognize any fixed ratio whatever. Even when there was a very small difference dif-ference between the ratio of gold to silver in this country, as compared with the commercial ratio, the metals drifted apart; first, when we undervalued under-valued gold in our coinage, we lost it; second, when wo undervalued silver, we lost that; and at the time of the stoppage of the coinage of the silver dollar by the act of 1873, silver was undervalued, under-valued, and the silver dollar bore a premium. All of which shows two things: first, that mintage must conform to commercial values, and cannot control them; second, that gold and silver have never coincided as measures of values, at any ratio of coinage, for any definite period. This proposal of Mr. Conant's, therefore, would probably prob-ably fail, even with the proviso that he incorporate, incorpor-ate, to limit the amount of the silver coinage." It must seem strange to old readers of The Tribune to read the above in its columns. Because of certain inherent properties, among which were malleability, indestructibility, lustre, etc., and because after the two metals came into use as money, not enough of both could be obtained ob-tained to meet the world's demand for money, they were called precious metals. After that the money value made the commercial value and there was no disturbance of that until silver was demonetized de-monetized by the United States and Germany. The reason that silver floated away from the United States between the years 1837 and 1873 was because be-cause our ratio was 16 to 1, while that of continental conti-nental Europe was 15 to 1, and the commercial value was fixed by the European ratio. As wo I look upon the statement of Mr. Conant he does not H yet understand the question at all, beyond the II fact that when the so-called civilized nations repu- II diated silver and took from it its old demand, they at the same time killed their trade among I ' the nations where they hoped for their greatest 1 trade, stopped investment, jeopardized investments I already made, and he is now struggling in a con- I fused way to call back under some disguise the I old use for silver. Two sentences in his speech make clear how confused his ideas are. He speaks of "the delusive quicksands of international bi. mettalism" and a little later thinks it most "desirable "de-sirable that there should be some international cert of action between Mexico and those countries coun-tries having dependencies in the East." As though a general international agreement would be a "delusive "de-lusive quicksand," but a limited one would be effective. , He thinks the problem might be solved by an agreement, and then by limiting coinage so much that there would never be a surplus. If he keeps studying the matter for another year or two the fact will finally dawn upon him that if the five great controlling nations, Great I Britain, Germany, Russia and the United States I would agree to fix a ratio between gold bars and silver bars of say 32 to 1, that would fix the price of silver all around the world, both the coinage and commercial value, within three days. Then every nation could coin as much or little as it pleased, it would not matter. "Then the true business busi-ness of the United States would be to sell China her silver and take in exchange Chinese products, then American investments in silver countries would be safe, then our country would swiftly dominate dom-inate the trade of the Pacific. It is a good sign that investors in silver countries coun-tries are" frightened, that manufacturers and merchants mer-chants are troubled because their trade with the Orient and Spanish America is falling off and that transportation companies are disappointed because be-cause there is so little Oriental trade for their railroads rail-roads and big ships. They are liable sometime to call a halt on the money changers and to ask them why, when more than half the world's workers were starving, they struck down the only money through which the daily transactions of those millions can be measured? |
