12
RECENT DEPRECIATION OF GOLD.
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[WRITTEN FOR THE DAILY PRESS
BY MR. CONSUL NICKERSON.]
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The crime of 1873 when silver was demone- tized by a subterfuge in the United States, and the closing of the British-Indian mints to silver in 1893 were both done under the influence of that class of immense intelligence, bankers, financiers and coupon cutters-all that class which has either the time to attend to law-making or the inclination to control legislation under the fear that the precious metals, gold and silver, were to become too plentiful. Too plentiful for whom? For humanity? No, gold and silver together have never been too plentiful for the welfare! of humanity. Too plentiful then for those who live upon invested capital, and upon fixed incomes, but not too plentiful for the labourer, the producer, and the merchant, in short, for him who launches his barque in any manner upon the ses of endeavour-for humanity as a whole.
The demonetization of silver in the western world, and its deminting in India in 1893 were the means the above mentioned class took to combat the immense class peril they feared.
The bankers were mistaken in fearing evils to themselves, since s plentiful money supply and the stable or rising prices for all com. modities which follow in its train, are for the welfare of bankers, who do not then have to take losses because of the failure of their debtors. But those who live on fixed incomes had some justification to fear the lessened purchasing power their incomes would have if prices continued to rise because of the increase in the supply of the precious metals available for money.
The above mentioned class have been con fronted since 1896 as some say. since 1900 as all
are agreed, with an enormous increase of gold coming from the mines of the world. To-day the yellow metal which this class had almost persuaded the world possessed a mysterious fixed value, is pouring from the prolific mines of the world at the rate of $400,000,000 (gold value) annually. More than a year ago we were assured by the Hon. Alex. Del Mar, the great American savant and historian of the precious metals, that the new gold supply was at the rate of more than $1,000,000 per day; and at the same time he ventured the prediction that the world was to be annually supplied with more gold than it ever dreamed of. Already the prolificacy of the world's gold mines during the last ten years has caused a very important depreciation of the value of the yellow metal relatively to things in general, including silver. The great rise of gold prices resulting from this depreciation in the value of gold, because of the recent vast additions to the existing stook of that metal, has stimulated the production of all commodities, and of the exchanging of all commodities, in the western world, giving rise thereby to great prosperity in that hemisphere; while it has alco affected the welfare of the dwellers in the Orient, where silver has of late been rising in a notable manner. The question for practical men to consider in the East is, what will be the effect upon com. merce and upon the general welfare of humanity of a still further increase in the quantity of gold annually coming into the thirsty channels of commerce and finance, and thereby causing a continuing rise in silver.
As between a gold price leval country and a silver using country, the difference in price levels has soted as a bonus or stimulus upon exports from the silver country to the gold country, and as a protective duty against imports from a gold country into a silver country. To state this comprehensively we may say that of recent years there has been a stimulus to exports from the Orient to the western world, and that imports from the western world into the Orient have been impeded. A higher gold-price for silver, or what is the same thing, a lower silver price for gold, hemispheres will should monies made of the two metals ever again reach a parity at their coinage ratios-be conducted without any artificial stimulus or impediment growing out of the divergence between their price levels.
means therefore that commerce between the two
THE HONGKONG WEEKLY PRESS AND
We
Since the gold mines of the world bid fair to ontinue pouring their golden produce into thet lap of humanity even more rapidly than is now the case, and since there is no reason to expect the present liberal output from the world's silver mines to decreas→, are justified in expecting that the money metals
will continue to furnish plentiful and increas. ing supplies
money for humanity's use. Metallic money will also supplemented by farther increases of paper be
money. Hence we may expect the era of rising prices in gold countries to continue; while it seems probable for the level of prices likewise to rise in silver using countries, though par. haps not so rapidly as in gold countries.
of
We have seen in the historical view of the relative values of the two money metals, hat they have greatly varied in the past relatively both have varied very greatly in value relatively to one another; and it is likewise true that to things in general. Gold to-day is falling relatively to things in general. Prices in go d standard countries are rising. The production and exchange of all commodities in them is increasing by leaps and bounds-thus causing such countries to be excellent markets in which to sell. If there should come any collapses of credit in gold countries, the recovery therefrom
rising as time
runs
and confidence will
will be speedy and complete, for prices will be contions, for only when compelled to stand on a quagmire of declining prices does confidence disappear.
The continued flood of gold over gold standard countries will release silver from the western world for use in the Orient. This has happened before notably in the sixth decade of the last century when $1,500,00 4000 of silver came to the Orient as gold went into the circulations of the western world. We may expect the in- creasing supply of silver in the Orient to af least maintain the present level of prices and perhaps to cause the level to rise in its silver using countries with the consequent stimulus to the production of wealth, and the volume of
business to be done within them.
But the price level of both Orient and Occident seem likely to seek and draw nearer to some common level. In short the divergence between the two metals bids fair to disappear, demands of mankind and forces of nature. as the result of the working of the inexorable
When the avarice of mankind started a crusade against silver about forty years ago, it forgot
that a
thousand millions of human beings preferred silver as money to gold, and for
excellent reasons, one of which was that silver was far more suitable for the myriad small payments and transactions commo1 to the masses of humanity, and within their reach. The French apothegm, Dieu pardonne, mais la Nature jamais, will receive another demon. stration: for the "nature of things" is too strong for
the avarice of mankind. The enormous demand for gold created by law in gold standard countries and superimposed during the last generation upon the always existing demand for that metal, has resulted in an enormous increase of its supply, while silver also has been produced as a by-product in gold mines, at the same time continuing in generous supply from its own mines. The mass of humanity must use silver to the exclusion of gold, whether it will or not silver is the more useful metal, as has been shown by the way its price has stood up during the last
generation under blows which, had they been delivered upou gold, would have caused the latter metal to have fallen like a lead plummet. The efforts of the gold mono-metallists to place the world upon a gold standard have progressed as far as they are ever likely to go; and as the gold price of silver is now rising, owing chiefly, as we have said, to the increasing prolificacy of the world's gold mines, the highly artificial character of some gold performance in legisla- tion will be manifest for the amusement of huma- aity-or rather the portion of it that can think.
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[January 7, 1907. ~
rises-a futility always apparent, and for many other reasons, for men who could see without gold spectacles. The scarcity value given the British-Indian rupe, may not always avail to to keep it from the melting pot; for when the rupee is worth more to melt than its present arbitrary gold exchangeable value of 1/6, the local silversmiths in the Indian villages, and the money changers of the East will prefer
gold a rupee will fetch. the silver metals composing a rupes to the
The merchant exporting from the Orient to the Occident must continue to be a speculator in exchange in spite of himself, so long as the relative value of gold and silver monies fuo- taates. The local prosperity of Hongkong will ba preserved to no small extent by her local paper money, but the commerc› of the Orient world will conlions to be with the western prejudiced by the fluctuations of exchange.
When the nations of the world are again ready to recognise the teachings of history and the facts of human experience throughout all time, we may again bope to see an international monetary conference, which will lead to the rehabilitation of silver as a money metal in the western world, and the reopening of its mints to the coinage of the white metal upon terms more forourable than at present The crusade against silver has finally failed. Silver as the money metal, the standard of the Orient, can ot სც destroyed, in spite of all the gold mono metallists that ever were born to admire themselves. The nature of things has been too strong for the avarice of mankind and the mighty needs of the myriad users of the white metal will continue to compel its use in spite of the avaricious or the ignorant efforts to banish it in favour of gold. The truth is that nature has seemed to supply humanity with both the money metals in somewhere near the quantities and proportion to meet the needs of humanity. If all payment were large payments, gold might be the only money metal. If all payments were small payments silver might be the only money metal. But so long as some of the world's payments are large ones, and most of the world's payments are small ones, both metals will be useful as money. The commercial affairs of the eastern and western worlds would be best served if legisla- tion concerning the mint-laws should be agreed upon and passed to establish stability in their relative price levels.
Is it to much to hops that the good sense of the English-speaking peoples will finally assert itself by insisting through their parliaments and congresses upon some legally fixed stability of international prices that will be effctive and permanent because of its own comprehensive scope and its harmony with the coinages of the Latin Union?
FIRE AT TAIKOKTSUI.
A fire, which at one time threatened to have most disastrous effects, occurred in the stores department of the Kowloon-Canton Railway at Taikoktaui an January 5th. The alırm was raised about 2-15. Then it was found that, through some cause still unknown, a num. ber of logs had become ignited, and as the timber and other stores were of a most inflammable nature the flames spread with great rapidity-
The European staff at the Cosmopolitan Dock turned out promptly with fire appliances, and worked heroically to quell the outbreak. With two sets of hose, almost half a milẻ in length, from the pumphouse, they were able to prevent the conflagration from becoming more general and from destroying the village of Taikokteni. As it was, some of the houses had caught fire,
bat the well directed streams of water extin
guished the flames. The huge oil tanks, too- were in imminent danger, and had the fire reached them the consequeno's would have been most disastrous. Some idea of the difficulties encountered by the volunteer firemen will be gained from mention of the fact that when The under valued silver coins which they were playing the hose on one burning have been issued B.S token money, mass matig had to be held behind them to in countries like Japan and the Philippines, protect them from the force host of the fire at silver rises- their backs The Hongkong Firs Brigade will seek the melting pot as
arrived later, and the flames were extinguished by six o'clock. The damage is roughly estimated at 850,000. Fortunately, the loss will not interfere to any appreciable extent with the proress of the railway undertaking,
or 18 gold depreciatur. The utter im possibility, of placing China on a gold basis will be apparent to Professor Jenks, and the other gold mono-metallista. Even they will perceive the futility of the attempt as" silver"
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