To the Editor of the "Nomru-Cumna Day News"
Si—The *N.CDN." of the 14th inst, published an interesting account of the Rotary speech of Dr. E, Bloch, League's expert attaching to the National Economic Council. From the first, Dr. Bloch made the valuable servation that gold currency hod been introduced la this country hundreds of years ayo, about a cen~ tury after the reign of Alexander the Great. But to add as he did that its, cheap gold, Dr. Bloch seemed to Introduction ted, to a situation of making a queer statement. Indeed, Whatever might have been the causes which administered to the cheapness of gold, the increase in ite monetary use could certainly never render gold cheap.
Dr. Bloch then compared the pres ent situation in China to that obtaining 2000 years ago when gold was cheap and silver dear. But to me it seems rather dificult to establish the ease that gold is at the present cheap whilst silver dear. By. the: time of Jesus Christ or a little before, about ten ounces of silver was required to buy one ounce of gold; but now the ratio of exchange has almost come down to 80.1. Moreover, ever since the middle of last year, the world price of silver showed a tond-Jeney to fall; but within the same period, that of gold has continued Jalmost without perceptable changes. If any conclusion could be drawn: from these facts, it rather is that: Jgold has appreciated while silver is In reply to the question as to when ther, in the event of war, the price Jot silver would go up or down, Dr. Block said that silver value would /go up and gold value would go down. Dr. Bloch here seemed to be reason-ling from the experiences of the last Great War. To me, if history ever repeat itself, it will probably be not this case. To quote from Messrs. Warren and Pearson:
The rise in the price of silver was not due to an increase in its value compared with other basle commod! ties. The rise was not due to. scarcity of silver or to remoncttza tion of it. 1t was due to @ deprecia-
Lon In the value of gold.
(Gold ana They further say: coon "is be used for monetary the World War period, gold
inmost of the world. This tnereased the" supplies in' countries that Lined wae. gold and lowered the value of "gold. wherever' located.
With the universal adoption of paper standards, gold is already demonetized. From now on until the World war fo come, there could hardly appear another force depressing the demand for gold comparable to that prevailing in the Jast war. The more probable event, assuming in the case of war, an inevitable depreciation in the' various currency' units, would be a concurrent rise in silver and gold, is enlightening to hear from Dr. Bloch that a (downward) change in the U. 8. silver policy would most Probably be harmful to China, she held large stocks of silver." To this statement 1 readily concur. It should be pointed out, however, that here Dr. Bloch is entertaining, even implicitly, the assumption that both the Chinese price level and the exchanges have severed their relation with silver. To be consistent, Dr, Bloch should " have abstained, I think, from further committing himself fo the opinion that, in the event of a rise in silver, the Government would be able to do nothing at all. For, what more need our Government do in such circumstances than to sell its stock of silver and realize out of the transaction a better profit?
Dr. Bloch might have good reasons. for his ideas. I regret not having the opportunity of being present at his lecture, On this account, therefore, T suggest that you and other readers will regard the above not as a direct criticism of Dr. Bloch, but rather as a treatment of similar' sub-Sects by a different author.
Shanghai, Aug. 17,
Text read from the printed page and cleaned; old type leaves the occasional error.