THE APPRECIATION OF GOLD.

New Zealand Mail, Issue 1196, 1 February 1895, Page 17

THE APPRECIATION OF GOLD.

TO THE EDITOR.

Sir,; —In his letter in your issue of. the Ilth, Mr C. Pharazyn intimates to the bimetallists that they are annihilated at one fell swoop. As a close student of the controversy for about ten years, I beg to point out that the “ logic of facts ” is against Mr Pharazyn. If he will turn up Mr Tidman’s book “ Money and Labour ” he will find a table giving the gold yield throughout the century, and along with it an index line based on Mulhall’s statistics of prices. This table will show him that the gold question is the lever behind the variations of prices. It shows that when gold became appreciated by its being made the only “ legal tender ” under Lord Liverpool's Act of 1816, the prices of a verage products came down With a rush, and misery and destitution followed in the train ; that when the gold yield of 1852 reached the extraordinary value of £36,000,000 sterling, prices went up with a boom as the result of the depreciation of the precious metal consequent on that big addition to the world’s bullion; that as the yield of gold has fallen, or as it has increased during the century, prices have fallen and risen in direct sympathy with and as a result of the variations. We have, further, the facts that, notwithstanding the enormous gold yield of 1852, the best financial authorities of that time considered that yield was not more than sufficient to meet the rapidly-growing wants of increasing commerce and population ; that as the gold yield has increased people have been able to largely reduce their debts, while as the gold yield has fallen off people have got deeper and deeper into debt. Forborne years now there has been practically'no addition to the world’s bullion, although commerce and population have been increasing, making a greater and greater demand on it, and steadily appreciating its value till it is now at an average annual rise of 5 per cent. It may be asked what has become of the gold yield of late years, as it has run from 15 to 24 millions a year? Well, statistics show that the whole of it has gone, into jewellery and the arts, with the exception of about three millions a year. It is estimated that amount makes no addition to thb world’s bullion, as it no more than makes up for wear and tear and loss. Conservative as he is, the Right Hon A. J. Balfour, who, since he was chairman of the Currency Commission, has devoted much time and attention to the subject, states that the position is now so serious as to threaten the stability of the nation, and he contends that it is better to have a depreciating currency than an appreciating one, if it is found impossible to arrive at a system of uniform standard from year to year. Lord Fairer’s statement, quoted by Mr Pharazyn, goes for nothing, as most people know that the paper in circulation is in proportion to the active bullion at a ratio of about 30 per cent. Our bluebooks show that last year New Zealand exported £900,000 of specie, and the people have felt the effects in “tight” money. Mr Pharazyn thinks the glut of gold in England settles the bimetallists. He forgets that England is the capitalist centre of the world, that payments have to be made in gold in London, and that most of the world is like New Zealand, having to ship gold to London. Consequently, it accumulates without employment, and will aceumu- I late there in the hands of a few large capitalists, and at the expense of the I

rest of the world, till the tendency will be for the borrowing nations and colonies to reach such a state as that reported from Newfoundland. Of course, the big gold owners will try to make people believe the fault is not theirs, but they did not subscribe the £IOO,OOO entrusted to Mr Ernest Seyd to bribe the American Senate to sacrifice their country to the gold-bug without knowing that it; would pay them to do so by furthering the appreciation of gold, and so enriching themselves though the rest of the world and of humanity should suffer.—l am, &c., Woodville, Jan. 9. E. A. Haggen.