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Page 27
"The price of things estimated in gold--their gold price--may
change, whilst their price estimated in silver--their silver
price--remains unaltered. This will occur if the value or
purchasing power of gold goes up or down, while the value or
purchasing power of silver remains unaltered. Suppose, for
instance, that gold is in any way scarce in relation to the
demands upon it. Then, in any country where gold is the standard
metal of the currency, those who wish to obtain, a certain
quantity of gold, whether in coin or in bullion, will have to give
a larger quantity of other commodities in exchange for it; or, to
put the matter in another light, those who have only a definite
commodity to part with will receive less gold in return for that;
in other words, there is a fall in gold prices. Suppose, on the
contrary, that gold is abundant in relation to the demands upon
it, then those who wish to obtain a certain quantity of gold,
whether in currency or in bullion, will not have to give so large
a quantity of other commodities to obtain the quantity of gold
they require; or, to put the matter as before in another light,
those who have a definite quantity of other commodities to dispose
of will obtain more gold in return for them; in other words, there
is a rise in gold prices. If in either case there is no change in
the value of silver, then the price of commodities stated in
silver, that is, their silver price, will remain unchanged."
In referring to the very prevalent notion, especially among the uneducated
classes, that the gold unit of measure of value does not vary, he says:
"As for the tenant purchaser, he probably thinks that after the
extra pressure of the first few years he may look forward to easy
times for the rest of his life. He little knows what is before
him. If things go on as they are, it will be harder for him, ten
or fifteen years hence, to pay forty pounds a year than it would
be to pay fifty pounds a year now; but of all this he knows
nothing--how could he? His only idea is that a pound is always a
pound, and a sovereign is always a sovereign; so, in the belief
that the yearly payment, when it is reduced to forty pounds, will
be well within his reach, he puts his head into the halter."
THE "DUMP" OF SILVER.
All the world will dump its silver on us if we adopt free coinage, says
the monometallist. How much, and where will it come from? asks the
bimetallist. Oh, the world has billions of it ready for us, is the vague
general reply; but when we ask for a bill of particulars we get instead a
fine confusion of prophecy.
One answers that it will come from Spanish America. But we have already
shown that all nations from the Rio Grande to Cape Horn have but
$100,000,000 for their 60,000,000 people. The South Americans have but 83
cents apiece. The Mexicans have $4.54. The Central Americans have $2.14.
And the South Americans have $550,000,000 in paper money, to bring which
to par and maintain it there will require at least $300,000,000 more in
silver than they now have. No "dump" from there.
From France, says another. Well, France has $487,000,000 in silver coin,
and some bullion; only $12.94 per capita in coin, and valued at 15-1/2 to
1 of gold. At her ratio an ounce is worth $1.3336; at ours $1.2929. Will
she rob herself of coin, when she has none too much for business, and sell
it to us at a loss of 4 cents on the dollar and freight charges? Germany
has but $215,000,000 in silver coin, less than half as much as France,
though having 13,000,000 more people, and Great Britain has but half as
much as Germany. All the other Europeans together have much less than
these three nations, and used at a higher valuation than ours. How then
can they "dump" any on us?
From India, say a few. Well, India has a deal of silver--$950,000,000,
according to our Director of the Mint. But she has 296,000,000 people, so
it is but $3.21 apiece. And the best evidence that she has not too much is
found in the fact that she is importing more. China has but $2.08 per
capita; Japan has but $4, and is importing heavily; Australia but $1.49,
and the black and brown races still less. In short, all the world outside
of the United States has but $3,444,900,000 in silver coin, or $2.46 per
capita. It is a plain case that there will be no "dump" from the coined
silver.
But the bullion, the old silver, the scrap heap, will they not ship that
to us by billions? Well, how much is there, and where is it? Will the
nobility and gentry of Europe melt down their family plate, the plain
people everywhere their silver ornaments, and the Hindoos their household
gods, to send us the silver? If so, why did they not do it when a cup, a
watch, or a silver god would buy twice as much gold as now? But the
supposition is absurd. The manufactured articles are worth very much more
than the metal in them, to say nothing of the sentimental value. A prize
silver cup, for instance, won in a great race or regatta, could not be
bought for ten times its weight in gold. There remain, then, only the
scrap heap and the stored bullion, and nobody has been able to locate any
great mass of it. Is it reasonable to suppose that moneyed men have been
storing away silver for years, making no profit on it and losing the
interest, and doing it in the face of a falling market? No, the timid may
be reassured; there will be no "dump."
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