THE APPRECIATION OF GOLD AND THE EXISTING DEPRESSION.

Ashburton Guardian, Volume V, Issue 1423, 21 May 1886, Page 3

THE APPRECIATION OF GOLD AND THE EXISTING DEPRESSION.

(Dunedin Evening Herald )

A thoughtful correspondent of the Daily Times has ruggestrd that the cause of the depression so generally felt is to be found in the depreciation ot silver, and therefore that silver should be made a legal tender as well as gold. The subject is one deserving of far more attention than it receives, as there is no doubt that the distressing fluctuations iu modern time* are vreatly due in defective mauag -men' of the currency. It may be noted that thore was greater stability in and rates of interest previous to 1819 when Peel's Act made go d the only standard From 1717 to 1774 all persons woro able to discharge their engagements either In gold or silver coin, Toe Bank cf England

could check speculation in gold by making pty meets in silver, A new coinage took peace in 1, i 4, and owing to the money dealers importing oar old worn coins from the Comment, and demanding new guineas in exchange for them, a law was passed restricting payments in silver coin to L 25, but allowing silver to be received to any amount by weight at 6s 2d per oz. Within three months of the passing of Peel’s Act fixing gold as the sole standard, a disastrous crisis arose. There was no

employment for working men. Thi starving artisans demanded Parliamentary reform as a remedy, and the frightful massacre at Petorloo was the result. From that day to this, the commerce of Britain has been subjected to periodical perturbations, interests varying from one to ten per cent, without anv reason than that gold was exported. A return to the old system is now advocated, but as this would deprive the Rothschilds and other capitalists of the profits they make in dealing—we should rather say gambling with gold—the relief demanded will not be granted

without a struggle. In the mean time, various facta are coming to light showing that the present system cannot be continued with safety. Wheatgrowing countries like New Zealand are suffering from undue competition of India, The Indian cultivator raises his crop at a cost calculated m silver rupees. When he sells it at a price which barely pays his expenses—say, 32s—he receives from England the price in gold, which, owing to the difficulties in exchange, is equivalent to 40a in silver, a price which yields hint a handsome return. \V e are therefore prejudicially handicapped in wheat-growing by the maintenance of a single standard. While the agriculturalists of India profit by their expenses being paid in silver, and the price received being paid in go.d, the Government of India is an enormous loser. It receives its revenues in silver, and lias to remit to London at the value in gold, thus losing yearly many millions sterling in exchange While the “Times” correspondent is so far right in his remarks, it may bo observed that the appreciation of gold and depreciation of silver does not account for the universal charac cr of the depression,

which is not limited to wheat alone, but extends to all produce. Copper, iron, tin, sugar, and all other commodities have shared in the reduction of price. An American financier, Del Mar, otters the

clearest exposition of the cause. He says that every country requires a certain total volume of money (in gold, silver, and notes) for its use, and that if the total volume bo inadequate money becomes dear, and all prices necessarily fall. 'iho following principles are maintained by him ;—(i) That whilst war, harvests, production, speculation, and the other principal Influences other than money, which affect prices, may affect the prices of many things, they do not, and cannot either separately or collectively, affect the prices of all things ; (2) that whenever they enhance prices In one direction they depress them in others, and vice versa ; and (3) that no cause or influence can enhance or depress the prices 0* all things, except an increase or diminution in the whole sum of money. We have repeatedly expressed our opinion that the depression in New Zealand has been intensified by the diminution of the volume of money In circulation, from whatever cause this may have proceeded. In 1879 our note circulation was over a million. Since then a large increase of trade and population has taken place without a corresponding increase, of circulation. On the contrary it has considerably diminished, and at this moment is under a million We see no remedy for this but the liberation of our domestic circulation from the control fcf private institutions, and having it vested in the hands of the State. We have not yet seen the shadow of a sound argument against this. At present the State is a mere slave working in chains for the profit of foreign masters, whose only care is naturally their owa interest, and according |to ordinary rules no one can blame them for acting up to what they believe is for their owa advantage. Referring to the question of wheat it is likely prices will improve. The wheat crop of Central India is reported by the Agricultural Department of that country to be again contracted, and to have suffered from unsettled weather. Only in seine parts is the crop expected to yield pp to or ahoye an average return.