THE AMERICAN SILVER VOTE.
T'
" world is in, we fear, for a most serious and possibly a protracted currency agitation. The re- vulsion of opinion in America about silver has been unexpectedly strong. Even three years ago the body of the people could not believe that the "dollar of our fathers" was not a dollar, but a piece of fluctuating value. They maintained that it could be kept by legislation in its old place, and would not hear argument on the other side. The progress of commercial events, however ; the danger of a deficit in the Treasury, which is loaded-down with unsaleable silver ; Mr. Cleveland's unhesitating and even haughty deimaciation of the Silver Purchase Act as the cause of all troubles; and a perfect cyclone of local bank- ruptcy, have turned opinion round ; and, to the amazement -of the silver-men, it was found, when the vote was taken in thellouee of Representatives, on August 2Sth, that Members representing more than two-thirds of the population of the Union were prepared to abandon the Silver Purchase Act without any "compensation." Every proposal to fix a ratio between silver and gold was voted down, and the Repeal Bill was passed unamended by 241 ayes to 109 noes. It is believed that the Senate, which is the strong- hold of the silver-men, is dismayed by the exhibition of popular feeling, that it will pass an identical Bill, and that within a fortnight the United States will cease to be a purchaser of silver. As India has already ceased to be one, the two greatest markets for the metal will then be closed, and silver may sink to a price hitherto unheard of. the only checks on its sinking being that its production will he, in part at least, arrested, and that if it becomes very cheap it may be much more used in the arts, super- seding altogether the varieties of plated goods. With the losses of the producers of silver we have only ordinary sympathy. We cannot see why their case is worse than that of the producers of wheat, who have had to endure in all parts of the world an even heavier fall. The silver-men have been supported and deceived, like our .own wheat-growers, by unwise legislative action ; but it is no more wrong in the interest of the community to with- draw protection from silver than to withdraw it from any cereal. Both are articles of commerce, and if they are over- produced, there must of necessity be a fall in their usual price. Nor can we deny, as economists, that if gold could be used throughout the world as the sole standard of value, and could, under those circumstances, retain its price, that would be a great convenience to commerce, and probably -to the majority of mankind, who for their smaller trans- actions could Use token-money, whether of silver or copper or aluminium, as in England they have always done. We have had no bother with our currency for fifty years, except during momentary panics, and we see no reason, granted the conditions, why any other nation should have. Nor, finally, can we feel much respect for that dread of the forging, or rather, the reproduction of our token-money on a grand scale. That has not happened while it yielded, as at this moment it would yield, a profit of 40 per cent., and we do not see, if it did happen, that the consequences would be so serious. Suppose Japan to send us a million sterling a year in good half-crowns, the Japanese must, to place them, buy something ; and why should not token- money be as good an export in payment as anything else ? They could not send more than we could absorb ; for if theydid, merchants would not give goods for the coin ; and unless they gave goods, the .boxes of pieces would stay on boardship. No petty emission, nothing but a real export trsule, would do us any harm, and a big emission would eome under the ordinary laws of commerce. At least, if it would not, we, who do not pretend to dogmatise -on one of the most complex subjects in the world, do not yet see why. But there is a very big " but" in this matter. The whole of the monometallist theory rests on the assumption that there is gold enough available in the world to be the sole standard of the world's currency. If there is not, gold must "appreciate," or go up in value, and go up very fast, too, the whole world making a rush to get it. That would be a most serious affair, as we can show our readers by a simple, though exaggerative, illustration. Suppose the value of gold to rise till a pound would buy as much of all products as two pounds did. Then, wholly apart from the disturbance in the market prices, every State would find the weight of its debt doubled, the people having to contribute to the Treasury twice as much work or goods. Every tax would be doubled in weight. Every landlord would get two rents, and every agreement what- ever lasting more than a year would be entirely altered in its character. For example, every promise to pay a pound a week to a wage-earner would be a promise to pay two pounds. We do not say that in time the thing would not adjust itself, for it would, even the National Debts being lightened by conversions ; but the time would be very long—thousands of leases, for example, are for sixty years—and the depth of the misery caused in the interim by strikes alone—for the workmen would not understand why their nominal wages must be so cruelly reduced—would be appalling, might, indeed, in many countries involve a social upheaval. Now there are many sound economists who are not bimetallists at all, who maintain that this danger, modified of course in degree, is not only real, but close at hand. They contend that even if there is gold enough in the world to make it the sole standard, there is not gold enough obtainable-120,000,000, for instance, being lost in India—and that if gold alone is to be em- ployed, it will at once and steadily be appreciated. If there is not enough wheat from a drought, up goes the price of wheat; and gold is only an article like any other. The bulk of currency, they say, will be too small for the world's work ; and, granted their facts, we do not see what answer, can be made. We should ourselves, if the bulk of the currency must be increased, try paper, in small amounts,.—Scotland, for example, getting along capitally with a very small supply of gold, and without any depreciation in the value of the £1-note. We would even, if the danger were extreme, issue " in- convertible " paper equal to six months' revenue, the paper being really convertible because receivable in payment of taxes. But, say these economists, why not, if possible, keep silver, to which everybody is accus- tomed, and so avoid the shocking losses consequent on demonetising that metal ? Very good, that is perfectly sensible ; but then, can you do it ? The United States have tried their very hardest, tried honestly, with their magnificent wealth behind them, and they have failed. If we were to buy silver in masses, and issue notes against it, we should nominally raise silver into money ; but that is the precise experiment which the United States has tried, with the result that every source of prosperity and even the National Treasury, so much richer than ours, is in danger. There may be another way, but the acute brains at work upon the subject have not yet seen one, and the present writer can see but one, and that is practically im- possible. If the Governments of the world could and would limit the output of silver, or, which is more likely, could agree to tax silver very heavily, then the desired end might be accomplished. The first scheme, however, would encourage too many rogueries—rogueries of nations, rogueries of Companies—and the second involves the terribly difficult task of taxing all existing silver not in the shape of currency. We entirely agree, however, that the matter is very serious, and that the true key to the position—the possible inadequacy of gold for the currency work of the world—has not been sufficiently considered.
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