Gold Not Necessary for Foreign Trade [pp. 483-488]

GOLD NOT NECESSARY
:~~~
IQua HE REFORM CLUB
of New York and
the gold press as sume that our for tIw v~f eign commerce
depends upon the
gold standard, and
that low prices bene fit alike all classes of
the community. Each
of these assumptions is
so manifestly false that
it seems a waste of time
to refute them. But as they constitute
the stock in trade of the goldites, you
will pardon me for calling attention to
facts showing the absurdity of such contentions.
Legitimate international trade, or commerce, consists in the exchange of the
commodities of one country for those of
another, and such exchanges ought to
balance each other without the use of
domestic money.
The American importer buys goods in
England with English money and the
English importer buys wheat and other
farm products in this country with United States money. The money in each
case is procured by bills of exchange
drawn against the exports of the two
countries respectively. If neither country buys more than it sells, the accounts
balance, and the trade is beneficial to
both. The country whose aggregate imports are more than its aggregate exports
goes into debt and creates what is termed
an unfavorable balance of trade, which
means disaster.
No country should, by currency regu 483
FOR FOREIGN TRADE.
lations or otherwise, encourage an adverse balance of trade. Every excess of
imports over exports should be prevented
if possible. To provide a currency especially fitted for the payment of an unfavorable balance of trade would be a
ruinous policy, and if it resulted in the
export of money such export would disturb business, contract the volume of
money, produce falling prices, and create
hard times.
The United States is not engaged in
foreign commerce. Exporters and importers do that business. If John Doe
and Richard Roe buy more goods in foreign countries to sell in this country than
can be paid for with the co'm'modities we
send abroad, they are engaged in an illegitimate and injurious traffic. Let them
find the means of payment, and let them
cease asking for legislation which will
enable them to export United States
money and thereby deprive the people of
a stable volume of money for domestic
purposes.
Comparatively few individuals are engaged in foreign commerce and they can
take care of themselves without regard
to the character of the currency in this or
in any other country. While they are engaged in exchanging our commodities for
the commodities of other countries, their
business is legitimate and beneficial; but
when they attempt to interfere with the
currency of this country to accommodate
excessive importations, they are public
enemies and should be restrained by the
legislation and administration of the government.
If we should admit that gold, for ex
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