THE CURRENCY QUESTION.

Evening Star, Issue 9688, 4 May 1895, Page 4 (Supplement)

THE CURRENCY QUESTION.

TO THE EDITOR. Sir*.,—ln a resent issue you offered a nut for bimetallists to crack. I ask permission to attempt to crack it. Probably one of the reasons why so many oppose international bimetallism is because they have read the arguments advanced by such eminent authorities as Jevons, Mill, Locke, 44 a P? Smith, Ricardo, Fawcett, M'Oullock, and others against bimetallism : bub there is a great difference between the bimetallism these writers opposed and tlie bimetallism now proposed. The one was national bimetallism—a system that none of ns woufd dream of advancing ; and the other international bimetallism, a universal money a very different Walker, in Li a

work Money and Trade * (probably the finest work extant on the There I 8 -nothing J» show that one of those writers (Locke, Smith, and Ricardo), had hj! lived m these days,- might not have advo an international monetary union f n ‘ maintaining the concurrent circulation of the two metals, just as not one of th» writers whom I have named as advocates of bimetallism would propose the union of the two metals at a fixed ratio in the coinage hv a single State for itself alone.” y The reason we oppose national bimetallism is because under it the cheaper metal would drive out the dearer. One would be cheaper or, more correctly speaking, overrated’ because markets would exist in countries where monometallism (either gold or silvci 1 was. the monetary system, and where the price of the other would be higher. This would result in the country adopting national bimetallism being left with a monometallic currency composed of the less sought-after metal, whichever it may for the time being he. Under international bimetallism this could not happen—(l) Because instead of several monetary systems there would he one common system and one common ratio. (2) Because there could not possibly be an open market for either gold or silver, inasmuch as no a j. vantage could be gained by changing money for an exact equivalent in moneyfor under international bimetallism ail ounce, pound, hundredweight, or ton of either gold or silver would be worth in money exactly the number of coins it contained, according to the weight of each, and no one would sell the raw metal under a price the law per. mitted him to have it made into actual money. For an illustration we have only ( 0 look at the fixed price gold has kept ever since gold monometallism was introduced. The supply has varied enormously, hut the price has remained unchanged, simply because an ounce or any given quantity contains so many sovereigns. (3) It would ho impossible to drive one of the metals out of circulation under international bimetallism because there would be nowhere to drive it, to, lienee what is known as Gresham's law could not operate. The reasons gold is so highly prized at present are because it has a fixed price and because it happens to bo the metallic money of the leading commercial nations; But if the nations interested demonetised gold to. morrow and adopted silver in its place, gold would at once be at a considerable discount If both had a fixed price neither could uor would be at a discount as compared with the other. What the ratio should he has abso. lutely no bearing with the argument. Any ratio can be maintained provided it is fixed by international law. All authorities are agreed upon this point, although some sug. gest one and another a different ratio, which however, is a matter to be decided by the Powers interested. The natural ratio based upon the quantity of each metal discovered since mining began is t 0 ] When people talk of artificially raising the ratio to 15i to 1 they simply air'their ig nor . auce ; when they talk of artificially raising prices by bimetallism they act similarly, and forget^that the fact is that prices have been artificially lowered by gold monometallism consequent upon the attendant curtailment of the measure of value. As a great man has said : “ We believe in international bimetallism because we have seen it done.” Evidence tells us that a comparatively few States—Franco and the Latin Union—maintained a fixed ratio between gold and silver at a time during which the respective supplies of the metals varied as they never did before, or have done since and during a period when other leading countries possesed entirely distinct systems' That being so, we know that if all the prim cipal nations entered into an agreement concerning it it could not fail to be a success, You quote Lord Sherbrooke, who scoffed at a universal money. I give you as a set-off a man of whom every Britisher is proud-Mc Lidderdale. Many would-be clever men clever until they are proved otherwise, in' eluding Mr Gladstone, have laughed at international bimetallism ; but it still grows and will prevail, provided the sun continues to shine.—l am, etc., Ahtiifk M'Dos.iid. Dunedin, May 4.