The Progress of Currency Reform; A New Phase of the Tariff Question; The New England Cotton Strike.

SINCE

INCE the YALE REVIEW commented upon the outlook for currency reform last August, some very important events have occurred in the monetary history of the world. The output of gold has continued to increase and is estimated to have reached during 1897 a value of about $240,000,000. India has not only refused to reopen her mints to the free coinage of silver, but has so far confirmed her previous action in closing these mints as to agree to issue rupees in India upon the deposit of gold in England, thus enabling India to feel at once in its currency any increase in the assets of the government, even though those assets are in London and in the form of gold. The rupees thus issued are, therefore, like our own silver dollars, a token currency secured by gold. Russia has followed Japan in the adoption of the gold standard and has at last consummated the change for which she has long been preparing.

In our own country the monetary commission appointed as the result of the Indianapolis convention has succeeded in framing a plan for the reformation of our currency and banking system which meets with the approval of a very large class of people, and has been unanimously endorsed by the convention which was re-convened at Indianapolis in January. This plan is the most comprehensive positive proposal, with the exception of Secretary Gage's plan, put forward as representing the views of those who believe in the gold standard. As we expect to

have its provisions discussed at length in our May issue, we will only say here that, in view of the number of debatable points involved, it is surprising that the commission should have been able to formulate a plan so well adapted to unite the friends of sound currency.

Not the least important event in the financial history of the six months has been Senator Wolcott's speech of January 17th, in which he explained the reasons for the failure of the peripatetic bimetallic commission. In that speech, while complaining somewhat bitterly of the lack of support which the commission had received at home, and of the various circumstances which occurred to discredit it, Senator Wolcott distinctly stated that it might be necessary for a future commission "to make concessions in the ratio, bringing it somewhere in the neighborhood of 20 to 1, and more nearly approximating the ratios recognized by Russia, Austria, and India." As it has hitherto been one of the cardinal points of the bimetallist's creed that the fall in silver was due entirely to the hostile action of government, and that it would require but an international agreement to restore the French ratio of 15% to 1, this admission is very significant, and coming as it does from the representative of a silver State, seems to indicate a willingness to accept the situation, at least in part, which is rare among thorough-going bimetallists. Even so candid and moderate a man as the late Gen. Walker was very loath to commit himself to any change of the ratio, as may be seen by his communication to this REVIEW in November, 1896.

In the United States the forces of reaction are, however, still strong, as is shown by the adoption of the Teller resolution in the Senate. The resolution, which declared that the government would violate no obligation by paying its bonds in silver, secured 47 votes in its behalf to 32 against it. It has thus made certain (what was before only too probable) that the Senate will block any attempt at financial legislation which may bẹ made by the House in the interests of a stable standard of value and an efficient banking system. That this opposition is capable of doing a great deal of harm for some time to come, must be conceded. That it can win the day in the end, can be

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believed only by one who believes that our country has reached the zenith of its progress and is ready to relapse towards a lower stage of civilization. The tendency of the ages is from a cheaper standard of value to a more expensive. In our century that means that the gold standard is the standard adopted by nations which claim to lead in the commercial world. To try to introduce a silver standard is to go back to what has long been discarded. To try to pay the government debt in silver at its present value is simply a resort to the long-discredited measures of sovereigns, whose best financial resource lay in the debasement of the currency. Muhammed Tughlak, who ruled in India from 1324-1351, is said to have been "an accomplished scholar, a skillful captain, and a severely abstinent man. But his ferocity of temper, perhaps inherited from the tribes of the steppes, rendered him merciless as a judge, and careless of human suffering. * Having drained his treasury, he issued a forced currency of copper coins by which he tried to make the king's brass equal to other men's silver. Tughlak's forced currency quickly brought its own ruin. Foreign merchants refused the worthless brass tokens, trade same to a stand, and the king had to take payment of his taxes in his own depreciated coinage." It will be vain for the Tughlaks of our Senate to emulate their oriental prototype. The world has made too much progress since the 14th century. There are too many people now living who know that even the United States government cannot make its silver equal to other men's gold, excepting by redeeming it in gold. And though the peculiar constitution of our Senate makes it possible for a small group of men to obstinately resist the will of the people, as shown by the rejection of the Teller resolution in the House, we may be quite confident that in the end they will as inevitably fail as did the great Mogul emperor.

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It would be decidedly premature to predict an era of good feeling between Protectionists and Free Traders. On questions of principle they will always stand far apart, but the commercial history of the past year seems to have decidedly modi

fied the point of view of the political Protectionist and to have furnished him with some arguments which an extreme Free Trader might readily subscribe to. This has been seen in the recent utterances of public men on the subject of our manufactures. A very strong and able speech made by Senator Platt of Connecticut, at the dinner of the New Haven Chamber of Commerce last November, illustrates this point. The most weighty part of that speech dwelt upon the ability of our manufacturers to compete in the markets of the world with other nations and upon the great importance of stimulating our export trade by all means. President McKinley in his speech at the Manufacturer's banquet in New York, January 27th, struck the same note. His utterances on the subject of the currency were thought to be so much more important, that what he failed to say on the subject of the tariff was overlooked. The part of his speech, however, devoted to manufactures was perhaps more notable and more significant than that devoted to the currency. "National policies," he says, "can encourage industry and commerce, but it remains for the people to project and carry them on. If these policies stimulate industrial development and energy, the people can be safely trusted to do the rest. The government, however, is restricted in its power to promote industry. The government can raise revenues by taxation in such a way as will discriminate in favor of domestic enterprises, but it cannot establish them." He then goes on to explain how by better information, by "energy, enterprise, and industry," the people must take advantage of these facilities. Mr. McKinley will, of course, not draw from his remarks the conclusions which a Free Trader would be apt to draw, but it is natural to infer that, if we are to stimulate our trade by such measures as will really make us more efficient in competing with other nations, and if our people have been able to increase their exports, as they have done in the past year, by some $17,000,000, of which nearly 27 per cent. consisted of the products of domestic manufacture, the question of protecting our laborers against the competition of "the pauper labor of Europe" must in time sink to a subordinate position, and reduce itself at last to a rhetorical phrase.

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The frank recognition of this tendency by the leaders of the Republican party, coupled with even a moderate relaxation of our high protection duties, and an insistance upon currency reform as the main issue of the day, would greatly strengthen the party for many years to come.

It is always difficult to discuss the merits of a strike. Those who really know the circumstances are usually too much interested on one side or the other to have an unbiased opinion, while those who are impartial are apt to be ignorant of essential features of the controversy. Whether or not the strike against a reduction of wages in many of the centers of the New England cotton industry can succeed, is a question upon which we do not propose to venture a prophecy; but the collapse of the engineer's strike in England furnishes some valuable practical principles which are too apt to be disregarded by the leaders of all strikes in industries working for the market of the world. The engineers were last summer, when their strike began, in a peculiarly strong position to carry on an aggressive war. They had large funds in their treasury, they had coolheaded and practised leaders, and they had the prestige which came of nearly half a century of prosperous existence. Yet they failed and were finally obliged to accept the employers' terms, principally because it was found that the stoppage of industry in England was rapidly driving orders to foreign countries. The leaders of a strike in such an industry can no longer content themselves with measuring the relative power of employers and employed in the country concerned. They must reckon with the competing.power of nations or sections of nations. Unless the leaders of the cotton strike in New England are perfectly sure of the ability of New England to compete with the South, a point which seems, to say the least, to be open to debate, they should hesitate before pushing to an extreme a contest which may result not only in a failure to maintain wages, but in a failure to find employment on any

terms.