Puslapio vaizdai
PDF
„ePub“

Mr. Carden in a later report to the Foreign Office on the trade of Mexico in 1895 attributes to the depreciation of silver the expansion of that trade and of the general prosperity of the country, as follows:

"This favorable condition of things must be attributed in great measure to the stimulus afforded to the development of the agricultural resources of the country by the depreciation of silver, which, far from being prejudicial, has proved to be of the greatest benefit to Mexico, as I predicted it would in my report on that subject of August, 1893."

I will give now some of the reasons that Mexico has to be so far favorable to the silver standard and not to lose all hope that silver may yet be reinstated as a money metal by the great commercial nations of the world.

The Natural Ratio and the World's Production of Precious Metals. -We have not yet lost all hope of the rehabilitation of silver as one of the money metals of the world, because, although modern machinery and improved methods have cheapened the production of silver, the same causes, and especially the discovery of new and rich gold fields, like South Africa and the Klondike, have increased very largely the proportions of the production of gold.

I will enter into some details on this subject to show that the position of Mexico is not entirely destitute of foundation and sound reason.

loss arising from the fall in value of the silver dollar. Supposing this fall should continue as is most likely to be the case when the Sherman act is repealed-the development of agricultural enterprise and the increased movement of trade will have to be considerable to offset the loss in revenue of the government. Mr. Carden thinks that in four years that movement may increase to the extent of from 10 per cent. to 15 per cent. Then there has been a notable increase in the exports, not only in amount, but also in the silver value of these articles, the selling price of which, being in gold, is improved by a rise in exchange. Calculated at 60 per cent. premium as regards the gold values (i.e., taking the silver dollar at 30d.), the exports in 1891-92 would show an increase of $21,897,522 over those of 1889-90. This calculation shows that what would be gained by the increased gold value of the exports more than covers what would be lost in connection with the greater silver cost of the imports; that is to say, the increased purchasing power of $16,599,800, which a gold premium of 60 per cent. would require, would be met by an increase of $21,897,522 in the value of the exports. As stocks of merchandise on hand were then considerably reduced, Mr. Carden thought the commercial classes would not suffer much actual loss by a further fall of silver, provided it were fixed and permanent, and that prices would soon adapt themselves to the altered condition of exchange. The railways, he thought, would find compensation in the ordinary development of their traffic and by the opening up of new traffic for export, while, as for the silver mining enterprise, which is an important factor in Mexico, the profits are not affected by a reduction in the gold value of silver, while the increase in the cost of supplies imported from abroad is offset by the very general existence of a small proportion of gold in the silver ores. On the other hand, a depreciation of silver would greatly stimulate the mining of gold, copper, and the base metals.

Among the advocates of gold monometallism, and I am not speaking of the intelligent advocates of a single standard, it is commonly said that the reason why most of the nations of civilization have demonetized silver is its excessive production of late years as compared with gold. They always declared that silver is mined so abundantly and so cheaply by modern processes that it has become useless except as token money. But the facts regarding production do not bear out this assertion. Silver, as I will show by unimpeachable statistical authority, is not produced in excess at the present time.

It used to be affirmed that, to preserve the parity of exchange between gold and silver, the production of the latter should be as sixteen ounces to one of the former. But since the discovery, in the middle of our century, of the Australian and Californian gold-fields, the output of the yellow metal has been excessive, and that of silver, as Mulhall, the statistician, points out, relatively short. If, he urges,

the production of the two metals determined their value, silver should be worth at present 33 per cent. more than in 1850, for from 1850 to the close of 1894 the production of silver, in weight, has been, approximately, but twelve times that of gold-93,714 tons of silver to 8108 of gold.

But the depreciation of silver has been more than 50 per cent., for it sold in London in 1850 at 60 pence an ounce, and to-day it ranges below 28 pence!

The silver production of the world from 1850 to the beginning of 1895 was as follows:

[blocks in formation]

The annual average output of silver at the present time is 5,000 tons, and it is interesting to bear in mind that, in twenty years, from 1850 down to 1870, the average production was only 1050 tons yearly. Taking this fact in connection with its demonetization and the decline of silver in value is explained. There are some curious facts regarding the precious metals, and the following table shows that the world's stock of silver, as compared with gold, was in 1848 as 32 to 1, whereas at present it is less than 20 to 1. The world has taken advantage of the increasing supply of gold to employ it more extensively in money.

[blocks in formation]

These figures show how, relatively, gold has outdistanced silver; how slight, in comparison, has been the increase in the world's stock of silver to that of its stock of gold.

And while gold is being mined in a ratio to silver far beyond the averages of former years, the arts are taking up a large proportion of the product. In 1894, the gold mined was 273 tons, and Soetbeer estimates, on a carefully ascertained mass of data, that 100 tons are yearly absorbed in the arts. Silver is being mined at the rate of 5000 tons a year, and 500 tons are consumed in the arts. And, although as silver declines in price the manufacturing use of it increases, it remains a fact that a vastly greater proportion than of gold is available for monetary use.

Mr. Francis B. Forbes, of Boston, a careful student of the currency question, has taken the trouble to compile a series of tables of great value, and, incidentally, he confirms Mulhall's statistics, which I have just given, demonstrating indubitably that silver is not being produced in excess of a just ratio to gold.

TABLE A.-WORLD'S PRODUCTION OF GOLD AND SILVER, 1493-1896.

[blocks in formation]

TABLE B.-WORLD'S ANNUAL PRODUCTION OF GOLD AND
FOR THE ELEVEN YEARS, 1886-1896.

SILVER

[blocks in formation]

The remarkable increase in gold extraction in recent years has not been met by a corresponding increase of the silver output. The ratio of silver to gold mined last year is better than the 16 to 1 proportion over which the recent presidential campaign in the United States was fought.

From the beginning of this century down to 1850 the total product of silver weighed 27.6 times as much as the gold output; then came the great gold discoveries in California and Australia, and the next twenty-five years saw the relative weight of the world's production of silver to gold reduced to 6.5, when in Europe a movement began, headed by Michel Chevalier in France, to demonetize gold. Luckily this was not done, and the great flood of the money metal enriched the world and marvellously stimulated commerce, manufacturing, and colonization. In the next period, 1876-96, silver again began to be mined in a normal ratio to the gold output, but the hue and cry against it grew louder and deeper, resulting in the general demonetization of silver in Europe. The fact of greatest significance is that during the ninety-six years of our century ended December, 1896, the ratio of silver to gold was only 11.8.

Mulhall puts it concisely, saying, "If the production of the two metals determined their value, silver ought to be now worth thirtythree per cent. more than in 1850!" And another fact bearing on the great controversy: "The stock of silver as compared to gold in 1848 was as 31 to 1, whereas at present it is less than 20 to 1, and yet silver has fallen fifty per cent. in price."

Why, then, has silver been so discredited, and why is its commercial value so low at present? There is one obvious answer; it has been legally shorn, that is, artificially, of its value, just as gold, if de

monetized, would be accorded a lower price as an article of com

merce.

Two facts have been made clear by statistics, one that silver is not extracted, the world over, out of proportion to gold, and, second, the world's stock of silver is, proportionally to gold, less than it was forty-nine years ago.

The old-school political economists maintained stoutly that a monetary standard, to be satisfactory, must have a stable and permanent value. The theory is a very dazzling one for the man who makes up a text-book of political economy and an outline of monetary systems in the quiet of his study, aided by any sound author on logic; but when coming to real life it does not look well. They have assumed that gold is permanent in value and therefore the only reliable monetary yardstick. Practical and accurate observers find fault with the theory that gold is the best possible standard of value because "it does not fluctuate."

[ocr errors]

It has been shown by laborious students of prices, like Mr. Sauerbeck, that, during the past quarter of a century, gold has risen in value sixty to seventy per cent. as compared with commodities in general, while silver has fallen in relation to staple articles twenty-five to thirty per cent. Gold has been even more unsteady than silver. One great cause of the rise in value of gold is the demonetization of silver, throwing more of the world's monetary work on the yellow metal, while, for exactly the same cause, silver has been discredited. I find the editor of the Statist, of London, a trustworthy authority and an advocate of gold, admitting that Neither gold nor silver has a stable value independent of its monetary use, and neither, therefore, satisfies the condition laid down by the older economists." But, as might be expected, the editor of the Statist adds: "This is only another illustration of the numberless blunders into which the older economists were led by the deductive method to which they adhered."

[ocr errors]

Gold makes a very good currency basis for old and wealthy nations, where the banking system is highly developed and credit is perfected, but for young and poor nations, busily engaged in developing their resources, it remains to be seen if it will serve their purpose. The gold and silver question is not one to be studied in a partisan spirit. Perhaps, some day, people will admit that both metals are useful money bases, and the Statist itself, a few years ago, wanted to divide the nations into gold-using and silver-using. It was not a bad idea, could it have been arranged by international agreement.

England and Silver.-Another reason why Mexico has not yet given up all hope that silver may be reinstated as a money metal, is the belief that the manufacturing interests of Great Britain would suffer so much by the bounty to manufacturing produced by the depreciation of silver

« AnkstesnisTęsti »