Wairarapa Daily Times. [ESTABLISHED 1878.] MONDAY, JULY 10, 1893. THE GOLD BAROMETER.

Wairarapa Daily Times, Volume XV, Issue 4466, 10 July 1893, Page 2

Wairarapa Daily Times. [ESTABLISHED 1878.] MONDAY, JULY 10, 1893. THE GOLD BAROMETER.

, The recent action of the India CounI cil in fixing the rupee at sixteen pence, seems not to be clearly understood here as yet, nor do many of our contemporaries seem to Bee that our tele' ' graphic information is meagre and confused, Without plunging into the deep waters of a controversy about a , matter which moat regard aa dry and remote, wo may any that India has, to all intents and purposes, adopted a gold basis, and in response the whole 1 silver world has received a terrible shock. Unless there are elements in this which we have thoughtlessly 1 missed, or which the cablegrams have omitted, we predict, as tbe next step, a riso in gold. And here it is necessary to explain that where gold is the basis, as it is in England and New Zealand, a rise in gold does not mean any alteration in the price ot gold, 1 but merely a general fall in the price of everything else, This is as obvious io the man who studies monetary questions, as it is abtruse and paradoxical to the farmer and bushtnan. Yet it is a thing the farmer has got to know sooner or later, He has got to matter the [ doctrine that while the price of gold must remain for ever absolutely fixed, so bug as it is the basis of our currency, its value, or purchasing power may vary indefinitely, and it is not convenient to demonstrate this over and over again in a daily journal, the farmer who doesn't see it, will do well to ask his banker to explain it once a week for two or ' three months, until it is clear. In the meantime he must take it on trust that a rise in gold is only manifested by a general full in prices. Now if the recent panic in silver merely means that silyer has gone down, fc just as copper, iron, or salt might go down in price, we need not bother ourselves about it here. But we must, before adopting this superficial view, ask a question. It is true that the closing of the Indian mints means a less demand for silver, and that this would lower the price of silver. > But does it not mean something more ? Does it not moan an increased demand for gold ? If this is the case then them will be a gradual fall in prices of Jill commodities, inoluding labour and land. We explained some months ago that, at a recent ' date, the yearly output of gold was ! reckoned in millions of ounces, about five, while the quantity i ooneumed in, the arte was three, and the amount oirculfitirg in coin 167. If the upshot of affaire in India is that only one (million ouncas) is retired for such purposes as bank reservfs fl.r pjt.ojilating medium, this will seriously dwpusp the amount available for consumption in tjip arts; arid will increase tbe value or "purchasing powef " of the yellow metal. This will cause a gradual fall in prices aljover the world. _ While all commodities wijl continue to vary in price relatively 'to escj) other, tbey will,"taken all round, tend downwrds. This would not matter an atom .to anyotie if we ajU'did business in casb. If a farmer's wool goes dofn frdtri froiu twejifl pounlst/ai?:, the farmer i would get less for his wool anjJ pay less forliis flour, and would be as well j off as usual. But we are not built ] that way.'' farmer haa to find ' every year (we wjlsay) £10,9 to pay : ou hi? moftgage, 0 *

in gold, and to got Hie gold lie will Lave to fiud ..more wool. The- Colony as n to pay (we will nay) two million sterling as interest on hor debt. Willi wool at sixpenQ", 80 million pounds .of wool will provide lliis amount. But with wool at 8d? It is dear that any considerable appreciation of gold, which is merely anolher.narae for an all round drop in prima, will affect most seriously a 'l ™bo h-ive to make fixed annual payments in gold, It is alfo clear .that ns there is (somewhere about) 167 millions of ounces in circulation, whilethe annual output is only about 5, a very small increase in tbo requirements of the world's coinage, an increase, say, of only 1 per cent, migliti well oatiße an appreciation of 60 per cent, With the very scanty data at our command, we cannot possibly do more than hint vaguely at the coming orisis. We oan however say quite positively that if the orisis does threaten uj, there will be gre-»t inducements to adopt bimetallism ns a present relief. No permanent relief is possible, except by very different measures, but if the general full in prices leads to intolerable distress, we shall probably hnye bimetullism, and a quiet period for ut time. After that, the deluge, but not in our time, What the learned are vaguely groping after, ia some standard of value which shull not vary as gold does. Many duoli standards have been devised, and there is a whole literature of the subject, but as we have not read it, and are not ashamed to say that we know next to nothing about it, it will suffice to say that no such standard has as yet beau reooih mended for practical ÜBe by any reputable body of economists.