GOLD AND SILVER. T HE Silver question is too important and
too complex to be written about dogmatically, more especially at emoment when the greatest experts audibly acknowledge hesitation ; but there are some general considerations which can hardly be questioned, and which are a little too much overlooked. There is a sort of vague alarm about, which, as far as nations are concerned, must be a little exagge- rated. There are people who talk as if all commerce were going to pieces at once because the Indian Government intends to try to introduce a gold standard. Now, how can that be true P It is, of course, immensely important to India, mercantile as well as official, to know if that experi- ment will succeed. It is also most important to Mexico, because its Government receives taxes in silver, and has payments to make in gold, and because silver is in that country a great article of export. It is most im- portant, again, to the United States, because of imprudent legislation, and because silver-mining is in some of the States as large an industry as coal-mining is in Stafford- shire or Scotland. And it ought to be of the last im- portance to Russia, where the standard is silver, though the great privilege of the State there, the willingness of the poorest to take Government paper, seems, in some way as yet not perfectly explained, to break and diffuse the shock. But though the immediate situation is grave, and calls for more brain-power than the Treasuries seem to have at their disposal, the permanent consequences must be less than is imagined. The price of silver must surely arrange itself in one of three ways. Either it must fluctuate, as it has so long done, or it must drop to the point which, with present means of mining, is the lowest possible ; and this may be taken, experts tell us, roughly at 2s. an ounce, that being the probable "pivot of price" after the repeal of the Sherman Act, and after poor or remote mines have been shut down. Or it must sink still further, to a point to be fixed by newly discovered methods of extraction, say even ls, an ounce. The last two cases are what the public really considers for- midable; but in either of them silver will remain, after the shock and the personal losses are passed, nearly as useful as it has ever been. Grant fixity of price, and the States of the world can use silver at one price as well as another,—even use it as France now does at a fixed ratio to gold. Owners of plate or of silver in bulk will lose heavily, and mine-owners with large lodes not dug out ; but in using the metal as currency there will be no trouble. Some mints will even make money, for they will buy silver for token-coinage very cheap. Even in India, the rupee will remain as a token just what it is new, and so also in America. Of course, if silver and gold are both to be legal tender to any amount, the silver currency must be called in and replaced by heavier coins ; but that expendi- ture will be the limit of loss. For silver as merchandise a fall of price means nothing. The merchant will only buy more and remit more, just as he does now if he pays for wheat by exports of copper or tin. But suppose silver keeps fluctuating just as copper and tin do, and worries Governments more than they can bear, as it worried the Government of India ? Then, as it i seems to us—and t must be remembered that we are only thinking the matter out, and make no pretension to be great experts—the way out must be the Indian one,—to adopt the gold standard, and use silver as token-currency only for internal trade ; and the question resolves itself solely into this,—Can the world get gold enough to make it the world's standard without a most oppressive appre- ciation of gold P With all the world wanting the metal, gold must go up ; and can the world bear that ? We do not know "for certain "any more than anybody else does ; but the world did bear a sudden and terrific depreciation of gold in the fifteenth century without going to pieces, or knowing, indeed, exactly what was happening to it. It is by no means certain that the new trouble, supposing it coming—and it is coming, if India gets a gold standard —will he so very terrible. The gold-supply is increasing, and will increase for years as Africa and Australia and India are better searched, and as gold appreciates they will be searched with a microscope. Then the movement of gold from country to country is facilitated by every new steamer or other improvement in locomotion, and that makes the quantities required to meet international demand less, just as a clearing-house makes it less. Next, it is not only possible, but easy, when men begin to understand their need, to abolish the use of gold all over the world for pieces under two pounds' value ; and to place such a tax on gold-plate—which has no use whatever, except as an article of beauty or luxury—as shall drive, say, two-thirds of all gold into the mints, where it is, on the hypothesis, of use to the community. The Governments, remember, will want to keep gold steady, and will fall-in willingly with any legislation which the experts consider necessary, without reflecting too deeply on the interests of traders, who are, in fact, hit heavily whenever a new tax is imposed. Then the object being the storage of all the gold in the world in Government cellars and those of State Banks, we must all come to one- pound notes for the daily transactions of life. They are nasty, dirty things, and their makers do not make them strong enough ; but they must be used to lessen the daily requirement of gold, whether men like it or not. And, finally, we do not quite despair of an international paper- currency in very large notes. People may smile at that ; but the thing very nearly exists now. At least, we fail to see the difference between that and a Bank of England post.. bill, which you can take anywhere and get money for at the exchange of the day, just as if it were a bag of gold. We conceive, at all events, that when the interest of all Govern- ments is alike—as, if they all adopt gold as the standard, it will be—the using-up of gold may be and will be greatly lessened, possibly so lessened that the appreciation may not be found excessive.
Appreciation of course there will be, and the suffering to all who have to make fixed payments will be considerable. But we do not exactly see why the community should consider this—except in one respect—any more than it considers the landlords' sufferings owing to the fall in the price of wheat. Business goes badly for a class, that is all ; and the sufferers must marry Americans, or get out of the scrape in any other less attractive way they can find. The National Debts, no doubt, are more important ; but then do we not exaggerate their importance to the taxpayer ? As fast as capital accumulates, interest diminishes. All over the world it has diminished in the last thirty-five years—speaking roughly—from 5 per cent. to 3, and the process is still going on. At this moment, if the fear of that wretched Great War could be lifted off Europe, the solvent Governments could borrow at little more than 2 per cent. ; and it is their rate which fixes the rates for mortgages and all other transferable fixed payments. The people would not benefit, as they ought to do, by the reduction ; but they would be exempted by the reduction from any fresh exac- tions caused by the appreciation of gold. Of course, if that appreciation were enormous, they would suffer ; but then bow is that suffering to be avoided? By bimetallism, say some very able and honest thinkers ; but then, apart from other questions, bimetallism is just the experiment which has been rejected. The action of the Government of India, sanctioned from home and approved by the experts working with Lord Herschel!, may mean a great many things, but it must mean" No" to bimetallism.
One last word. Everybody tells us that the danger of forgery is underrated, and that it will be tried on a. great scale by large capitalists with good machinery in States where police connivance can be bought. We should like to know why, if that is the case, the forgery of our token- currency is not going on now when the profit is 40 per cent. ? As to Governments protecting forgers, they have no earthly interest in doing it ; and if they had, could be subjected to just the same pressure as that which sup- pressed piracy. There is no more reason why civilised mankind should bear to be plundered in the one way than in the other. As to forgery by hand by forgers without capital, that is an annoyance, not a national danger.
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