ills

Pictures and Illustrations.

Trumbull White,

The Knights and the Shield.

William H. Harvey.

Henry M. Teller.

Joseph N. Dolph.

Richard P. Bland.

George G. Vest.

David B. Hill.

Arthur P. Gorman.

Charles F. Crisp.

John P. Jones.

John Sherman.

William M. Stewart.

William B. Allison.

J. Sterling Morton.

Grover Cleveland.

William J. Bryan.

Julius C. Burrows.

Fred T. Dubois.

Horace Boies.

William A. Peffer.

Benjamin Harrison.

Thomas B. Reed.

William McKinley.

Levi P. Morton.

Robert T. Lincoln.

Stephan B. Elkins.

Chauncey M. Depew.

John G. Carlisle.

Benjamin R. Tillman.

Joseph C. Sibley.

5

Preface.

It is not often that any economic or political controversy rouses discussion equal to that engendered by the grave financial questions now at issue. A single gold standard of currency, an international agreement for bimetallism, the free coinage of silver by the United States, all sorts of solutions of the present complicated situation, find their advocates in the public prints. Tons of books and acres of newspaper pages have been filled with the arguments in favor of the ideas of their writers. Furthermore, to prove that all this is not entirely wasted effort, such books are bought and read in large numbers, and newspapers find no more popular subject for editorial and news columns than the financial questions. The growth of this sentiment of interest has been gradual through the last few years, while other questions were holding paramount position in the minds of the people. But all at once there came a wave of awakening to the present importance of currency systems and their relation to the everyday prosperity of the country, and discussion began to multiply almost in geometrical ratio. It was necessary to feed the enormous demand for information, and the flood of books, pamphlets, and papers was the natural consequence.

In all this mass of literature there has been one lack. No single work has been available to the student who

6

sought a fair presentation of both sides of the question at issue. With a recognition that this was an omission which ought to be filled, the present work was planned and brought into the form which it now takes. To give between one pair of covers the basic principles of each recognized school of currency economists, and the arguments in favor of them was one portion of the plan. To have these principles and arguments presented by the most eminent advocates on either side, who should bring to their writings years of study and experience and fame sufficient to entitle their utterances to respect as the best interpretations of their views, was the remainder of the plan. It was believed that these eminent men, statesmen, economists, financiers, would respond to such an idea ; that they would welcome such a proper means of placing needed information before an enquiring public seeking knowledge enabling them to form proper judgment; that they would recognize the importance of a fair presentation of the questions at issue in the receptive and inquiring state of the public mind; and that they would be glad to assume a portion of the labor of making such a discussion accessible to many readers. There was no disappointment to follow. The most eminent men in the United States, famous in all walks of life which would bring them into familiarity with these financial questions, responded with hearty interest. The result is the volume offered herewith. Its contents have been supplied by senators and representatives in congress, by governors, by economists in private life, by great editors, by college professors, by bankers, by theorists, and by practical men. Credit must be given for the courtesy of the Chicago Record which enabled the use

7

of certain articles included in a discussion carried on through the columns of that paper, by many eminent advocates on either side of the financial debate.

Every phase of the question is here presented, in fullness of detail, comprehensively, and clearly. The opinions of our great men are side by side and may be weighed one against another. The arguments which they advance are presented in fair competition with one another, and each may stand or fall by its merits. The result is that every reader who seeks to know what is the right solution of the problem that meets him, rather than the mere fortifying of himself in an opinion previously formed, has here the material wherewith to form an opinion that he may defend, from full and careful study of all opposing views.

The whole object then, in the making of the book, has been to furnish a full exposition of the financial questions under discussion, giving the views and arguments of the leaders in the conflict, partisan and non-partisan. But in the selection and editing of matter, in the compilation of the contributions, partiality, partisanship, the influence of editorial opinion have had no place. The result is that for the first time a thoroughly disinterested presentation of the whole subject is made accessible. If it fills a portion of the need which it is intended to fill, enabling any inquirer to decide for himself what position he should take, as a man and a citizen, it will have fulfilled its object.

Page ImageTrumbull White,

13

An Introduction and a Legend.

A written to introduce a discussion such as the one which fills this volume can have but an unimportant function to perform, if it preserves the impartiality which is the measure of the real value of the work. It cannot elucidate the primary truths about the currency question, on which the adherents of all schools agree, for there are practically none such, even as primary as the definition of money itself. It cannot relate the history of money in the world, for the dispute begins with the beginnings of this history. It cannot even do much toward outlining the creation of our original monetary system, on the progress of legislation on financial questions in our own country, because it is on these very historical facts themselves that most pronounced differences arise. Almost all that can be done is to indicate something of the present supreme interest which the subject has created, and something as to the form which the discussion here has taken. When that is done, the reader will very properly prefer to turn to the arguments that bear directly on the case in dispute.

The silver question has practically supplanted the tariff question in public interest and discussion. The financial stringency which began to make itself generally felt in 1893, and from which the country was so slow recovering, caused every thoughtful man to seek an explanation of the condition, and finding the reason

14

of the condition, to seek a remedy for future crises of the same sort. The result was the wonderful spread of discussion on financial questions, the agitation for, and the opposition to the free coinage of silver by the United States, at a ratio to gold of 16 to 1 in weight. Of course the same questions had aroused widespread interest for generations before. No one who knows the history of our country can suggest that interest in our financial system and the legislation which has created or changed it is a new thing. With the memory of warm discussions and prolonged ones in every session of congress for many years, over these or similar controversies; the introduction of new forms of legislative enactment, nearly as often; and the utterances in every political platform, state or national, on the currency question, it cannot be said that the matter has been left in abeyance, and not been brought to the attention of the public at large. The record of the last half century of United States history is full of the chronicles of widespreading waves of popular sentiment on political and economic and moral questions, some of them having the dignity and strength of a concerted movement, enlisting in their ranks men of the highest character and ability; others failing to manifest such strength, and so losing their importance.

Some of these movements have been financial. The place to classify the present discussion of the silver question varies according to the point of view from which the observer looks. But few fair men fail to acknowledge that the causes of free coinage of silver, international bimetallism, and gold monometallism have each enlisted in their service men of worth and might in learning, in statesmanship, in eloquence, in

15

fame, in honesty, and in genuine regard for the welfare of all people, in the future as well as in the present. This fact should make possible the freest and fullest discussion of the subject from every point of view, without rancor or any stronger feeling than desire to attain the right. Such discussion has indeed become full and free, but unfortunately there has arisen that very feeling which is to be regretted, and sectional pride or sectional interest have been sought to array themselves under one or the other banner in unanimity. The discussion which has become so general, and which finds one of its expressions in the present volume, is of course but the successor of less general discussion maintained for many years. But in its recent form it is really young, and so far as the explosive interest which has been awakened throughout the central, western, and southern states is concerned, among people, hundreds of thousands, or even millions of them who are not always active to study the economic question at issue, its age is almost coincident with the present decade. Every year until 1895, the year of writing, has seen a multiplied increase in the territorial as well as the numerical extent of the agitation, and the larger public of the eastern and northeastern states are scarcely yet aroused to a realization that something of imperative importance is occurring.

One book written in popular style and sold at a popular price has so much impressed the people who are interested in the questions at issue, that not only have there been sold of it approximately one million copies within less than two years, but it has commanded the attention of writers on the opposing side to such an extent that at least half a dozen books have been

16

written with the avowed object of rebutting its arguments, and hundreds of newspaper editors devote space in their columns to controverting or sustaining the assertions made in it. There is no argument necessary to prove that public interest justifies, and the lack of such a work demands a book which shall within the limits of one volume give in convenient form the arguments on all sides of the controversy, as presented by the strongest and most eminent of the advocates.

The city of Chicago has become the center of the contest. This is partly because of its location, and partly because of its population. Standing as it does in the practical commercial center of the United States, the largest of the inland cities, its situation makes it easily accessible to the people of all parts. It is in touch with the west and south, as truly as with the east and northeast, and between these divisions, to some extent, have the lines of battle been fixed. Its population contains representatives of all sections. Its commerce is quick to feel any movement which touches commercial interests. Its newspapers are enterprising and quick to give space to questions and discussions of rising interest. It is the publishing center for many books dealing with this and all other questions of great or small interest. These things must explain why in the discussions that are to follow, citizens of Chicago seem to have a peculiarly large share in the arguments. They have been peculiarly active and interested, to study and write, and their matter has but its just and proper proportion of space. The opening discussion of the volume is one of the most important verbal presentations of the whole subject that has been made at any time. Immediately following it, are placed several

17

speeches which were made in the United States senate during the discussion of one of the most important measures of recent years, in each case furnished directly for this volume by the senators whose names they bear, who selected them as in each case being the presentation of the subject which the senator would now choose to make for public reading. From that point in this volume, the contributions are arranged in such a way as to make what seems the fairest presentation of both sides. Some of the writings are made directly in answer to others, while some are entirely independent of any matter adjoining. There is no alternate arrangement, placing first the views of an adherent of one school and then of the other, but each is here on its own merits, placed where seems most appropriate to the harmony of the whole. That the result may be the clarifying of the economic atmosphere through which many sincere, honest, and unsettled inquirers are looking for light, to enable them to make a proper decision as to their own course, seems not an unreasonable hope. It is necessary to concede honesty of intention and purity of motive to every writer here, or else to pass him by as unworthy of a place.

Once upon a time, so the legend runs, a shield hung at the side of a highway, along which knights were wont to journey as they rode to tourneys and to jousting-meets. It was so swung from its support that one side of the shield looked down the highway to the east, and the other side, as would naturally be the case, looked westward. On a certain fair morning in spring, as the sun was rising over the eastern hills, two knights armed. cap-ŕ-pié with lances in rest and visors raised came near to one another down the road. One of the

18

knights was dressed in chain armor of silver links, and was mounted on a beautiful white charger, which seemed to share his rider's spirit and bravery The other knight was clothed in gold mail, and proudly sat upon a fiery steed of ruddy chestnut hue, almost golden in its brightness. And the golden knight approached from the eastward, to meet his fellow, friend or foe as time would tell.

"Good morrow, sir knight," said the one of gold, "it is a fair and bright morning while we ride. When ye pass to this side of the swinging shield, fail not to turn and look how yonder sun reflects from its golden face, and dazzles the inquisitive eye that would read its scription and admire its skilful carving. A stranger knight am I to this highway. Can ye tell to me the reason why the shield hangs here?"

"By my halidome," quoth the other, "I cannot tell, most courteous knight, why hangs the shield. But sure am I your eyes do play you treason in the sunlight's glare. For silver is it, silver as my armor here, and exquisitely bossed and graven. Come where I stand, and see the silver shine."

"Now do you mock me, sirrah," said the first. "Know I not gold from silver in the gun? Do I not see with eyes that never failed? Is not the sun itself in thine, and but reflected rays, not half so strong, in mine? Is it the part of stranger courtesy to thus dispute, when meeting other strangers on the way? I close my visor to a face so false!"

And saying thus, the golden knight, with scornful mien, moved forward to pass on.

"Hold!" cried the silver one, with face aflame. "No man shall call me false! A knight I am, of honor

21

proven well, in many a tourney, fought in man/ lands Raise now your lance atilt, and ride ye hard, or you shall roll, full-armored, in the dust."

Then rode they fast together, and the shock, when under that fair shield they met, was fierce. Again they turned and rode, again they met. They fought until their lances broke in twain. They fought with swords, when lances failed them both, till chargers tired and faltered in the meeting. They fought on foot with sword and then with mace. They fought till morning passed, and noon, with raging heat, exhausted them the more. They fought throughout the quiet afternoon, beneath that swinging shield above their heads. And when the sun was sinking in the west, illuming now the other shining side, both fell there in the highway where they fought, wounded, exhausted, spent of blood, and dying. As these two knights had met in battle shock, they wavered forward now and then drew back, crossing the line that marked the shield's position, and shifting often each his own attack. So when they fell, it happened that the knight of gold was lying farther to the west, and he of silver on the eastern side. And each knight raised his eyes to see the shield whose metal face had forced him to a fight. Then he of silver cried aloud, amazed, "What do I see? A shield of gold it is." And he of gold in wonderment replied, "Now silver is it, or I am deceived."

Then struggled they from where they fallen were, despite their wounds, their weakness, and their pride, each to his former point of view again. And when they realized what was the truth, they lifted up their voices loud and wept, that such a fight should be, and

22

such a fate, for gallant knights to face when both were right in part and both were wrong. Then talked they of their early lives, and found by strange adventure that they two were brothers. One mother had they, but their lives had been apart from early childhood, and their paths had spread until they met again on this sad day.

The shield that hung above their knightly heads, as hand in hand they waited thus, and died, was golden on the side that faced the east. The western side was silver.

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Chapter I. — The Harvay-Laughlin Debate.

Of all the spoken arguments on opposing sides of the currency question during the early months of 1895, the one which it seems proper to name as the most important was the Harvey-Laughlin debate of May 17. For three hours during that evening these eminent advocates disputed before an audience composed of the most prominent men of Chicago, and many of national fame from other cities. Leading business men, bankers, economists, clergymen, and educators were there, ready to hear the views which they approved, or be convinced if facts of sufficient weight to controvert previously formed opinions were presented to them. For more than a week challenges, counter challenges, and preliminary negotiations were in progress, and when at last it was announced that the Illinois club had completed arrangements for the debate, public interest was thoroughly aroused, and applications for seats poured in by the thousand.

The personality and prominence of the two disputants were the cause of much of the interest which arose. William Hope Harvey, who championed the cause of the free coinage of silver, is the author of

24

"Coin's Financial School," the little book which has set the west on fire with interest in the fight. From him was to.be expected the most convincing presentation of the arguments in favor of his position that could be found anywhere. His unpretentious little volume, but one out of several which he had written in the same service, has roused attention in the columns of almost every paper in the land, and editorials sustaining or controverting it are constantly offered to the public. Prof. J. Laurence Laughlin holds the chair of political economy in the great University of Chicago, and commands attention whenever he speaks on economic questions. To this educational work he brought practical experience gained in a business career before be began his professional life. His works on the currency question are known wherever the question arises, and he is recognized as a leading authority for the views of those who maintain opposition to the free coinage of silver. At the time of this debate, Prof. Laughlin was contributing to one of the leading daily newspapers of Chicago, an editorial article each day, in j which he was taking up the chapters in "Coin's Financial School," seriatim, and answering them in turn. The disputants were therefore well matched.

The question to be discussed was put in the following form:

Resolved, that the United States should at once enter upon the free coinage of silver, at the ratio of 16 to 1, independently of the action of any other nation.

Of course Mr. Harvey maintained the affirmative of this proposition, which was negatived by Prof. Laughlin. It was a feast of logic and a flow of statistics. The wall behind the platform was covered with charts

25

and diagrams used by Professor Laughlin in illustrating his arguments relating to the relative production and quantity of gold and silver in the world, the prices of cereals and cotton and wages at various periods, and other statistical information relating to the subject under discussion.

It was 8:15 o'clock when a vigorous clapping of hands announced the entrance of the two distinguished disputants, Messers. Laughlin and Harvey, escorted by President H. M. Thomas. As they ascended the platform there was a renewal of applause. President Thomas seated the speakers, Mr. Harvey on his right and Professor Laughlin on his left. President Thomas at once stated the object of the meeting, and introduced Mr. Harvey in the following brief manner:

"There is probably no question at the present day in which there is such widespread interest, such general study and thought as that of the financial problem. Among the many conflicting views and statements which are presented for our consideration there appears to the uninitiated an almost hopeless mass of statement of facts and of theories. In this dilemma the Illinois Club is pleased to welcome to its rooms two distinguished students of finance, Professor Laughlin, on my left, of the Chicago University, and William H. Harvey, on my right, well known as a writer. Mr. Harvey will open and will have one hour, if he so desires. Professor Laughlin will follow with one hour, if desired. Mr. Harvey's rejoinder will be limited to fifteen minutes, Professor Laughlin's rejoinder to fifteen minutes, and the closing remarks by Mr. Harvey be limited to five minutes. It is my pleasure and privilege to present to you William H. Harvey, who will discuss the

26

affirmative of this question." In his address Mr. Harvey said:

"Mr. President, Members of the Illinois Club and Gentlemen: — When accepting the invitation of your committee I had hoped that this discussion would be on fundamental principles and facts, thus educational in its character, and later on, when better informed as to these, we would reach the remedy. I felt also a keen desire to get at Professor Laughlin on the unit of value existing prior to 1873 and the "crime" of that year, two points on which he has been misleading the readers of The Times-Herald. But he has seen fit to decline a discussion of those two questions, and we are to-night to take up the remedy — the last question covered by this controversy.

"The first reason why I am in favor of independent action by this country is that we should not be subjected to the influences of the governments of Europe. When our forefathers declared their political independence from Europe it was to free themselves from the class legislation of those governments, justly termed plutocracies. If the people can be reduced to poverty and the prosperity of the United States can be ruined by hanging to the financial policy of Europe, then we can be reduced to the same condition by financial legislation as a war of conquest would reduce us.

"Our friends the monometallists say: We admit bimetallism would be good if we could get international bimetallism. In other words, they agree that there is something radically wrong, but claim that we are tied to the financial policy of Europe. So that, if a war of conquest in this country by the monarchies of Europe, whose form of government is different from ours,

27

would reduce us to the condition that the people of those governments are in, and they can accomplish the same purpose by financial legislation, then there is a necessity for independent action.

"Where there is a necessity there is a remedy. Suppose you were to say to a man of common sense, ‘We are compelled to adopt the financial policy of Europe;’ and he replied, ‘The country is going to waste and ruin, and desolation is spreading from ocean to ocean,’ and demonstrates that the cause of it is our adoption of the financial policy of Europe and we say back to him: ‘It makes no difference, we are compelled to adopt the financial policy of Europe.’ This answer would not be acceptable to the hard-headed citizen of this country. The governments of Europe are plutocracies. They squeeze the lemon for the people about every so often. The few control class legislation and the masses are hewers of woods and drawers of water for the titled few. Like the farmer who goes out and robs the bees' nests, they rob the people and then give them time to fill the nest again before going out to rob it again.

"We have certainly not forgotten the history giving the reasons why our forefathers established this government — and that was the reason. Now, if financial legislation is one of the classes of class legislation by which the many are robbed and the few are enriched, by which the lemon is squeezed, then it is one of the institutions of the European governments that we, as a nation of people, republican in form, should declare our independence of. That is the first reason why independent financial action should be taken by the United States.

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"If they say, ‘We must have the same money that they have in order to carry on business with them,’ my reply is, ‘That the biggest business we ever did carry on with the balance of the world, and particularly Europe, was the time when they had gold and silver as money and we had neither.’ It is one of those peculiar arguments that wears its way into a man's brain when reiterated and monotonously given out by the daily press that we must have the same money that the other great commercial nations have. We never stop to investigate. It belongs to that catalogue of arguments that existed prior to 1492, when a majority of the people of the world said that the world was flat and a few men, including Columbus, contended that it was round.

"Those interested in purposely cultivating through ages an international money on lines marked out by them have the same possession of the public mind as the critics of Columbus had, and those who contend for financial independence from Europe can be classed with the followers of that great navigator, whose minds were in advance of the age in which they lived.

"This nation can have an independent financial system without any reference whatever to the balance of the world, and can carry on its own commerce by ocean and by land with the other governments of the world notwithstanding. We do not now settle our balances with Europe in coin except on its commercial value and by weight. Our coinage has nothing to do with it. Primarily balances of trade are settled with trade. We give them our wheat and we take their silks, and the balance that we may owe them or they may owe us will be settled just as merchants between

29

the importing points may agree to settle it. They can settle it in gold for so much a pennyweight as measured in the money of their country or our country, or in so much silver or in so much copper, or so much of any other merchandise as may be agreed upon between them in their trade relations.

"There is no such thing as an international money. So that when a merchant in London who has goods, and vice versa with a merchant in New York, finds at the end of six months that the merchant in New York owes the merchant in London $50,000 as measured in the American coin, whatever it is, and they have an understanding by which the New York merchant is to settle those balances, and it may be in wheat or it may be in cotton that the contract would be settled, anything that would be in a general way agreed upon: but gold or silver, irrespective of how much we were coining of it as money, could be agreed upon. So that in the beginning of a study of this question that point can be made clear to the mind of any man who does his own thinking.

"You cannot meet arguments that are purely theoretical, such as a man proving to another that a cat has three tails. He proves it this way: No cat has two tails and one cat has one more tail than no cat, therefore one cat has three tails. Profound theorists on the other side of this question are not especially fond of this class of reasoning. Growing out of a long — accustomed habit, the men who have studiously cultivated class legislation for their benefit have impressed the common masses with certain apparent fixed principles, which they are not to be controlled by, and one of them is necessity of international money, just as they

30

have made you believe that national bank money was necessary.

"Now, the reason behind that is this: They can go to Washington and hypothecate their bonds, draw their interest thereon; get a loan on these bonds to 90 per cent, of their face value, without paying any interest, to loan it to you at from 7 to 12 per cent. That is a special privilege. And we have learned not to blame people for doing these things. But we should. It should be a common country, conducted for the benefit of all the people.

"What we are contending for is the opening of the mints to the free coinage of silver (they are now open to the free and unlimited coinage of gold, and have never been closed to that metal), and the establishment of bimetallism on those simple and fixed principles that were adopted by those statesmen who had in view the interest of no class, but of all the people.

"What we want is bimetallism, and scientific bimetallism is this:

"1. Free and unlimited coinage of both gold and silver; these two metals to constitute the primary or redemption money of the government.

"2. The silver dollar of 371 ź grains of pure silver to be the unit of value, and gold to be coined into money at a ratio to be changed if necessary from time to time if the commercial parity to the legal ratio shall be affected by the action of foreign countries.

"3. The money coined from both metals to be legal tender in the payment of all debts.

"4. The option as to which of the moneys is to be paid in the liquidation of a debt to rest with the debtor, and the government also to exercise that

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option when desirable when paying out redemption money.

"The mints are now open to the unlimited coinage of gold. Such portion of the product of that metal as does not find an immediate demand to be used in the arts and manufactures is taken to the mints and coined into money — into money — and becomes at once the object for which all other products seek the market. It thus has an unlimited market, as the mints are open to all of it that comes.

"This was true also as to silver prior to 1873, but by operation of section 21 of the act of that year the mints were closed to the unlimited coinage of that metal. Hence, when silver now seeks the market and exhausts the demand supplied by the arts and manufactures and the small purchases of the government to coin it into token money, the demand for it ceases. Gold has an unlimited demand. Silver has a limited demand. Silver is now a commodity to be measured in gold. It is an object to be gored and kicked by bulls and bears. It is shut out from the United States mint. It is token money. It has been deprived of that unlimited demand it enjoyed prior to 1873.

"We would restore to it that unlimited demand. We would open the mints to it again. We would leave the mints open to gold as they are now. We would give silver the same privileges as gold. Restoring to it this unlimited demand would cause the value of silver to rise as compared with gold. This is what we want. This is what we would do.

"We would again make the standard silver dollar the unit of value, as it was before 1873. It would thus be a dollar, and the bullion in it would be worth

32

a dollar, as the number of grains of bullion in a dollar would have the right to walk into the mint and be coined into a dollar. No man would take less for it when he could have it coined at pleasure into a dollar. We would make gold coins of the value of so many silver units or dollars, as the law existed prior to 1873.

"Silver is the people's money. It was so regarded by our forefathers, and was the favored metal of the two. It was given the position of honor in the coinage of our two metals by having the unit of value made from it, and gold, its companion metal, measured in it. Gold was and is the money of the rich. This was to be a government of the people, and the people's money was to be the most favored. Twice when the commercial ratio between the two metals made it advisable to change the legal ratio, the change was made by recoining the gold coins. This was in 1834 and 1837. The spirit of our forefathers then lived in their sons. The gold coins were changed in weight and size. In 1834 the gold eagle had twelve grains taken out of it, In 1837 the gold eagle had two-tenths of a grain added to it. No change was ever made in the quantity of pure silver in the silver unit. There were to be no two yardsticks. The rich man's money, gold, was recoined when the commercial ratio changed to interfere with the legal ratio. This is the law we would re-enact.

"We would make both legal tender in the payment of all debts. We would repeal the law of 1873 and the Sherman law of 1890 authorizing contracts (bonds, notes and mortgages) to be taken payable in gold only. We would allow no discrimination to be made between the legal tender character of the two metals. We would allow no private individual to dictate to the

33

government what its legal tender money should be. We would place the white metal on an equal footing with the colored metal without regard to previous condition of race or servitude.

"We would give the option to the debtor, if there was any preference as to which of the two he would use in the payment of a debt. A break in the commercial parity causes the cheaper metal to be used. This increases the demand for the cheaper metal. This increased demand restores the value of the metal that had thus fallen below a parity and brings it back to parity. To give the option to the creditors causes the dearer metal to be demanded, and it thus grows dearer and dearer, and a parity is permanently broken and the gap grows wider and wider. When the debtor has the option the two metals will oscillate close to a parity and substantially at a parity. This oscillation is the elasticity that bimetallism gives to primary money. If one becomes scarce the other is used. If one is cornered the other takes its place. Either answers for money.

"A true knowledge of bimetallism and the simplicity of that system died with our ancestors. Selfishness stalked into the American congress at a time when neither metal was being used as a primary money — our primary money was then paper money. At a time when corruption was rife in our national legislature, followed by articles of impeachment against Vice-President Colfax for complicity in the Oakes Ames affair, the resignation of Secretary of War Belknap for bribery, the charge of corruption against numerous congressmen in connection with the Credit Mobilier scandal and land grant swindles.

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"At a time when statesmanship was dwarfed in personal selfishness men who knew what the effect of such a change in our financial policy meant organized successfully the first trust to be benefited by national legislation in this country. It was a money trust. It was the demonetization of silver. The money of the people was destroyed. Silver at that time was at a slight premium over gold.

"By this act the mints were closed to the unlimited coinage of silver, except the trade dollar, which was overvalued by eight grains and intended only for export to China, and it was shut off, by the act of 1876, except as the secretary of the treasury might permit it to be coined.

"Silver had then begun to fall, as measured in gold, and the breach in the commercial parity of the two metals, as was natural, gradually widened. With resumption gold asserted its importance and silver correspondingly declined. Under the Bland-Allison act of 1876 creditors began to make their notes, bonds and mortgages payable in gold to the exclusion of all other forms of legal tender money. This increased the demand for gold. Silver had ceased to be primary money. It had taken a place with nickel and copper as token money, all redeemable directly and indirectly in gold. That elasticity which the alternate use of silver with gold, that true bimetallism, gave to our primary money was now absent. If the demand for gold became too great to supply the normal needs of primary or redemption money, there was nothing to take its place as such. Creditors would demand the dearest metal and the law had given them the right to do so.

"There was but the one metal to which the mints

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were open — the commercial value of the other metal had been lowered by legal discrimination against it. Gold was carrying the silver just as it is carrying paper money. Silver was not permitted to take the place of gold.

"If gold was cornered neither the United States treasury nor debtors could put silver in competition with it. They must go to the men who have the gold and get it, and submit to their terms. A corner on beef cannot seriously threaten the health of the people of this nation so long as mutton and pork are in competition with it. A corner on gold could not, as it does now, seriously threaten the credit of this nation if silver was in competition with gold as primary money.

"What is the remedy? Shall we follow Mr. Cleveland and Mr. Sherman and such party leaders any farther? They have led us into a swamp, and the mire is getting deeper and deeper; we are sinking in the mud and slush more and more, with an abyss and oblivion beyond. Speaking of these two party leaders reminds me of the good old Methodist woman who was invited by a Presbyterian woman friend to go to her Presbyterian church to hear a Presbyterian preacher. Well, when they got there, they took seats up in the Amen corner, and, to the surprise of the good old Methodist woman, she found that the Presbyterian preacher could preach a real soul-stirring sermon, and she expressed her satisfaction by saying ‘Amen!’ This attracted the attention of the Presbyterian deacons, and they commenced looking cross-eyed at her. But the sermon grew better and better, and the Methodist woman was soon crying ‘Hallelujah!’ The dignity of the Presbyterian deacons was shocked. From crying

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‘Hallelujah’ the good old Methodist woman soon got to clapping her hands and shouting. This was too much for the deacons, and two of them took hold of her and, picking her up, carried her out of the church. As they passed down the aisle with her, she exclaimed. ‘I cannot stand the honor,’ and repeated this statement several times, ‘I cannot stand the honor.’ The curiosity of the old deacons was excited to know what she meant, and, when they put her down in the vestibule of the church, they asked her why she had said what she did. She replied: ‘Christ rode out of Jerusalem on one donkey, and I have ridden out of this church on two.’

"Let us have nothing more to do with the men who have assisted in tying the hands of this great nation and delivering its financial policy over to the gold gamblers of the world. The bank of the Rothschilds in England is now behind the United States treasury. They are our financial agents; our financial managers. We are paying them the princely salary of $8,000,000 for each six months of their valuable services. It requires special pleading to defend this transaction and the circumstances which have led up to it. You will hear some of that special pleading to-night from the gentleman who is to follow me. We are now in the hands of the pawnbrokers of Europe. They will take the same care of us that the spider did with the fly.

"We have very little gold left in this country. We are a debtor nation and our people and corporations are heavily in debt to the people in England, and the interest on what we owe them amounts to, annually, about $250,000,000, payable in gold. They demand gold. The contracts call for it in gold. To pay this

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we have a balance due us in trade with Europe of about $100,000,000. That leaves $150,000,000 still left to pay them. How do we pay it? We produce about $40,000,000 in gold yearly. We give them that. This leaves about $100,000,000 still due them. How do we pay it? Out of the reserve stock of gold. With them getting all our money represented by the balance due us on exports and all our animal production of gold, and $100,000,000 annually from our reserve stock of gold, how long is our reserve stock of gold to last?

"How are we to replenish it? There is only one way. That is to borrow it from those who have it, and that means England. And that is what we are doing. That means more interest, more gold annually to be paid to England. Where will it end? It means the ‘dismal swamp’ and ‘hell's half acre’ beyond.

"This is what having a gold standard means. A primary money without the elasticity that two metals give. The rich man's money. A money that is easily cornered; that can be physically cornered; cornered in this room — all of it — all there is in the world. A dollar from it is the size of a drop of water, so small that by act of congress of Sept. 26, 1869, its further coinage has been prohibited. We now have a unit of value so small as to be impracticable for use; that cannot be coined into money the size of a poor man's transaction. This is not now a poor man's government.

"How are we to pay these debts to England? Repudiate them? No! Robbers' dollars as they are, let us pay them. Result of a conspiracy played on us while we slept, yet let us pay them. If we don't, Lyman Gage or Russell Sage will say we are dishonest.

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They will never say the other fellow is dishonest. He wears good clothes, looks important and owns a newspaper. But how are we to pay these debts to England? It is this way: Restore silver; put it in competition with gold on a legal ratio of 16 to 1. Repeal all laws allowing a discrimination between the two metals; stop gold notes from being taken. Put silver in competition with gold as quickly as possible. Where gold contracts do not exist silver will go at once into competition with gold and this will take some of the demand off of gold. To that extent it will lower the value of gold. The extra demand for silver will raise its value. Everything will advance in value at once. The Tribune admits that.

"As silver advances, the silver England is now buying from us to ship to India ($15,000,000 last year), to buy wheat and cotton, will cost her more. India wheat and cotton that she buys with silver will cost her that much more. A farmer in India wants an ounce of silver for a bushel of wheat. At free coinage that ounce of silver is $1.29. That means that if England pays us $1.29 for an ounce of silver, wheat from India will cost her $1.29 per bushel. Then she will pay us $1.29 per bushel for our wheat. She now buys silver from us at 65 cents per ounce and buys wheat and cotton with it in India, and we must compete with that price.

"When our silver advances and the price of all our products advance and wheat and cotton go back to their old. price, we will be more than able to pay our debts. Our balance in trade will be $200,000,000 instead of $100,000,000, and this will only leave us 150,000,000 to pay the balance we owe England annually.

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The only way to pay England is to advance prices permanently, not spasmodically, as is now being done on a few articles.

"We are now getting drunk on more money borrowed from England. Fifty million dollars on railroad bonds last week. The relapse will be worse than the last attack. But they say gold will leave us, and will go out of sight, and how are we to get it to pay our gold debts? We are now paying 100 per cent, premium for it with our silver and about the same premium on it in wheat, cotton and other products. When we have put silver in competition with gold, the premium cannot possibly be that much. If when our mints are open to silver, gold is held at 25 per cent. premium, it will mean that we have taken 75 per cent. of the present premium out of it, as it now takes the silver in two silver dollars to buy one of them. It will then only take one and a quarter of one of our silver dollars to buy one gold dollar, and it will take less of any of our other property to buy gold than it does now.

"It is foolish to say that when silver is in competition with gold that gold will cost no more. As in the former illustration, as well say that beef will go higher by putting pork and mutton in competition with it. As we get these gold debts paid off we will be more independent. We can show gold that we do not depend on it for money. It will then be our slave. It is now our tyrant. It will then come back and beg us to take it as in 1873, when it — one of these gold dollars — was worth two cents less than a silver dollar. The more importance we place on it, the more we will have to pay for it; the less importance we attach to it the less we will have to give for it.

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"If a man suddenly finds himself floundering in the middle of a stream the quickest way out is to strike out for the nearest shore. The quickest way out of the present situation is to leave the mints as they are, open to the free and unlimited coinage of gold and throw them open to the free and unlimited coinage of silver at the ratio of 1 to 16 as full primary redemption money. And why the ratio of 1 to 16? Because that was the ratio when the trick was played. A great wrong has been committed and to right that wrong is the first thing to do.

"With the mints of this great nation open to the free and unlimited coinage of silver a demand has been created sufficient to absorb all the surplus silver in the world if it wishes to unload upon us. How much silver is there in the world? As expressed in dollars there is $4,000,000,000 of it available for use as money. As expressed in bulk it is the cube of sixty-six feet. It will all go in the room of the First National Bank of this city and the basement thereunder.

"Now, we will pull the throttle valve; we pass the act of remonetization. The mints are thrown open as they were prior to 1873. Now, what is the result? It would be like an engine starting off on a rough track to start with, probably. Here would come the silver of the world, we will say, to take our gold away: ‘You fellows have overturned silver. We are willing to swap with you; we will give you our silver and take your gold.’ Well, here they come with it. How are they going to give us their silver? They give us silver for our gold. How much would they get and how much would they give us? At the present time there is probably about $400,000,000 of gold in the United

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States. It is only a very small sum compared with the necessities of the country. Now, suppose they got all of our gold? What would they do with it? Would they eat it? Is there anything sacred about gold, or silver, either, except for the use of the arts and manufactories and for their desirability to use as money? Now, they want to bring us the balance of their silver.

"What do we give them for it? We give them our products. Ships are coming into our harbors from all portions of the world bringing us the silver of the world — this 66 feet. (I am taking an extreme view of it — a monometallist's view of it.) And they are going back with the products of our spindles and looms and of our fields. They have got our products and we have got their silver.

"We can go to work and raise the same products next year over again and tell them to bring some more of it if they have got it. They bring us all their silver and they have found out that we have got enough to give them for it. In other words, the United States is big enough when she throws her mints open to the free coinage of silver to take all the silver in the world, and give up her products in payment for it; and such a nation can fix the ratio between gold and silver. They could find ships enough to bring it to us. Two ships would carry it all. The products for this country for a single year would take it all. And we could still say: ‘Come on. We have more to sell you.’

"Such a thing would put our manufactories at work. There would be no idle labor in the United States in ninety days after the monometallists tried that game on us. There is only $1,400,000,000 of silver in the

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world that is not in the coins of the established governments.

"It would be the very best thing that could happen to this country if we could trade what is claimed to be $600,000,000 of gold in this country (but in truth less than $400,000,000) for all the silver in the world. It is just as good as money. It is an erroneous idea to stand gold up and worship it as a great god. There is nothing in it except its use in the arts and its use as money, and you have been impressed with its use of money simply because it has been impressed upon you.

"You don't have to carry silver around with you. You don't carry gold around with you. We carry more silver than we do gold. You carry a paper substitute to represent it. Gold would immediately come back and knock at our door. (I mean if this happened. I don't admit it will happen, because I won't say that the balance of the world are fools enough to give us their silver.)

"What I say will happen will be this: When a great government like the United States says: ‘Here is equal exchange, 16 for 1, gold for silver,’ a man in France is not going to part with his silver or gold unless he gets that much for it; unless he gets as much for it as the United States will pay for it, less the cost of exchange.

"So that when a government that is big enough to take all the silver in the world, if it wants to test its capacity, a demand is created by an influence that is able to sustain that demand, so that a man nowhere in the world is going to sell his silver for gold for any less than he can get for it in the United States. But we will not have to go to it alone. Mexico, Central and

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South America are already with us when we start. We start with one-half of the world geographically; all bonded together in sympathy. The reason why Mexico and the South American governments cannot go it alone is because they are small commercial governments. Europe and the United States are too much for them. The enormous demand made for gold by the enormous commercial transactions of Europe and the United States makes a demand for gold that the governments of Mexico, South America and China and Japan are not equal to overcome. So that the United States, when she would start, would have the assistance of these weaker governments with her.

"France said to the United States at the international conference in 1876, ‘we come here to hear your proposition and to follow you; all you have got to do is to start.’

"France has been enforcing the bimetallic system and refusing to pay out except half and half, saying to us: ‘We are waiting on you, open your mints and we will follow.’ So we would start with the western hemisphere, with China and Japan on the eastern hemisphere, and with France with the United States, two of the greatest governments in the world. When the nations of the world that give importance to silver have a commercial influence as great as those nations which give importance to gold, the commercial parity between the two metals will settle itself. England demonetized silver in 1816, and yet there was a commercial parity maintained at rates fixed from that time to 1837. The United States, France and the Latin union had their mints all open to silver, and England, stopping the free coinage of silver, had no effect upon it.

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So, if we begin, we begin strong enough to do it ‘The way to resume is to resume.’

"The way to remonetize is to throw our mints open and we have got it. We will have higher prices once more. Everybody can make some money. There isn't that paralyzed and deadly feeling that comes with the destruction of prices and the hoarding of money. Now, suppose that the gold does still leave us and you want to stop it. You don't need it in settling with a foreign country. We demonstrated that during the war. Because a man can go and buy it at whatever it will cost in order to pay it in settlement of his balance of trade. Our trade with foreign nations is only 4 per cent. of our business, and our domestic business is 96 per cent. of all our business. Which do you want legislated in the interest of, the 96 per cent. or the 4 per cent.?

"But suppose you keep the gold and have gold and silver both circulating among us. Gold doesn't circulate now; but suppose we wanted to keep them on a commercial parity and found that the conditions that I have described didn't do it, how would you do it? The first thing would be, how can we increase the demand for silver?

"Well, it might, be done two or three ways. In the first place we would send a commission or several commissions to Germany and say to those people, ‘Here, we, the great United States, have begun the work of declaring emancipation for the human race from these burdens that are upon them, and we want to add our argument to the arguments of your able bimetallists here in Berlin; we want you to come in with us.’ Wouldn't it have some effect? Would it not

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have more effect than to lay back like dogs in the manger as we are doing now? She could be persuaded possibly, with the influence of her other bimetallists, so that we could go on in that missionary work, launched on a gigantic scale as it would be, until we had back all of the governments of the world where we were prior to 1873, except England. We don't want her at all. You are not going to get her either. I would just as soon go to England, to the men who mold legislation in England, and ask them to give us bimetallism as I would to go to the rankest gold-bug in Wall Street as ask him to go down and persuade Mr. Cleveland to turn over to us.

"Why? Man is moved by selfish motive, unless he has freed himself from those base instincts, and large money makers, who have long since gotten more than they needed in this world, and are still piling up more for the purpose of saying that ‘I am the richest man in the world,’ or that ‘I am richer than my neighbor, and so my wife can say that she is richer than Mrs. Smith.’ When you strike a man like that, and that is the kind of man you strike when you go to England, who control legislation there, there is a selfish motive for their monometallism, and it is because they are the creditor nation of the world.

"All the world owes them money, and what is the use of commerce? It is the exchange of property; property for property, property for money, and money for property, and England can exchange her gold that you owe her, and all the world owes her, for twice as much of your property as she could if we had bimeallism. In round numbers, there are so many silver dollars in the world as gold dollars. The statistics will

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show you that there is a very slight difference, ail equal amount of each, dollar for dollar, free coinage prices; and when you add silver to gold as primary money prices advance, and England's gold would then have its value taken out of it, and it would have to pay twice as much for our property. Now, that is the reason she don't want to do it.

"If an undue and unrighteous influence by schemers and tricksters abnormally enhance the value of gold so that a commercial parity at 16 to 1 cannot be maintained, then do as our forefathers did — change the ratio and make the change in the weight and size of the gold coins. Monroe and Jackson, did it. They were not called dishonest for doing so. They were legislating in the interest of the people, and not in the interest of the favored few. We are not compelled to keep the legal ratio at 16 to 1; we can change it to 20 to 1 if necessary to fix the legal ratio to correspond with the commercial ratio, but if the change is made let us make it in the rich man's money and not in the poor man's money. To lessen the size of the gold coins makes more dollars. To increase the size of the silver coins makes less dollars.

"Let us have more dollars rather than less dollars. A parity at the same ratio is practicable, as admitted by the experience of ages. This is what we ask.

"This is a question of capital on one side and humanity on the other. Of sound money — the sound of the clod on the coffin — on one side, and sound money — the sound that has the honest ring of the people's money in it — on the other side. It is a question of an English policy or an Amercian policy. Which shall it be?

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PROFESSOR LAUGHLIN'S ARGUMENT.

When Mr. Harvey had finished, the moderator in a few words presented Professor Laughlin as the advocate of the negative of the question. The teacher of political economy said:

"I supposed, gentlemen, that we should discuss here to-night the question whether the United States should adopt the free coinage of silver at the ratio of 16 to 1, independently of other countries. I have not heard to-night any argument directed to that point. An attempt has been made to lead the discussion far off on the question of what the unit was from 1793 to 1873, but, to borrow an expression from our friend Tom Reed, ‘that fly was embalmed in the rhetoric of Judge Vincent.’ It is not necessary for us to go into that question.

"The persistence with which that point is referred to reminds me of the backwoodsman who pointed out the bear to his friend — the bear being up the tree — and aimed his gun at it. And the other fellow could not see the bear, and his friend was pointing at it and saying, ‘don't you see it?’ And it finally became necessary to do something and he said again, ‘Why, don't you see it?’ His friend said, ‘Why, no.’ And then he went over to his friend who thought he saw a bear, and it was a flee on his eyebrow.

"I should like for a moment or two to free ourselves from the obscuration of that mighty animal directly before our eyes, and get at some of the especial points of the question. Before commencing on those subjects, I should like to speak briefly of three or four points in correction of the argument of the gentleman preceding.

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"He spoke of the fact that there was greater trade with Europe during the times when there was a freer coinage of gold and silver than since 1873. I have turned to the statistical abstract of the United States for 1894, and find that in 1872 the gross sum of both exports and imports of the United States was $1,164,000,000; in 1894, $1,547,000,000. Certainly that statement is not accurate. Also the statement was made that we paid for our foreign goods by constant drain on our resources of gold.

"I happen to have here at my hand a chart, which possibly you can see, which shows a comparison of the ratio, representing in the green squares the total amount of exports and imports in our foreign trade from 1850 to the present time, and the yellow square indicates the relative amount of gold and silver both that passed out and in to settle all those balances. That, gentlemen, is the way in which the payment for our goods is made in foreign trades — not by the shipment of money, except in small sums, at particular times.

"Another point I should like to call attention to, which has occurred before, is in reference to the fact that the Bland act of 1878 and the Sherman act were supposed to require certain obligations in securities to be paid in coin. What seems to be that statement in the act of 1878 is that silver dollars shall be a legal tender for all debts, public and private, except where otherwise expressly stipulated in the contract. It is possible that people who demand the free coinage in the ratio of 16 to 1 would naturally prevent you or any other business man in this city from making an express stipulation for gold or any other article. It seems almost inconceivable to one that the law of 1878 would

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bear any such interpretation, and that is the only quotation that could possibly be so construed.

"It seems to me unnecessary to go further on this question, except to point out here one thing more before I begin — that we are supposed to be people who maintained gold and silver at a parity previous to 1873, and that this was done by the free coinage of both gold and silver. Reference has been made to France. Now, we know that in 1803 the French law established silver as the unit of measure. It was supposed that they had concurrent circulation of both gold and silver in France from 1803 down to the time of the discovery of gold in 1850. That is absolutely untrue.

"I quote from an official document issued by the French government in 1872 on page 562, in volume 2. This document says that in 1808 the circulation in France was only about 8,000,000 of gold — that is francs — and 2,000,000 of silver. In 1838 the whole of the French circulation did not include over 5 per cent. of the total circulation of 40,000,000 — that is, that silver had driven out gold, because they were not at a parity.

"Again, the same document says that since the law of 1803 France has had no gold monetary circulation during the period before 1850. Up to that time silver was our sole monetary circulation, but after the gold discoveries of California and Australia gold took the place of silver in the general monetary circulation of the country. You will find that in volume 2 page 32, of the same official document.

"Again, you will find in a report issued by the minister of finance in 1869 that France had had one-third of its circulation in gold. In 1843 almost all this gold had

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disappeared. Out of 53,000,000 francs then possessed by the bank only 1,000,000 francs was gold. This metal had disappeared from 1803 to 1848 because it had enjoyed a premium which reached at that time 11/2 per cent.

"And so I have twenty references of the same kind to show that not in France was there a concurrent circulation of gold and silver, for the reason that the two were not kept at parity; that every student of our own monetary system knows perfectly well was true of the United States. We had silver only in circulation up to 1834 and shortly after 1834, when the ratio was 1 to 15.19. So gold drove out silver, and we had only gold in circulation, and nobody in this audience ever saw a silver dollar in circulation after about the year 1840, and up to 1873 no silver dollars were in circulation, and consequently when the act of 1873 was passed there was not any silver, and had not been since 1840, in circulation, and at the time the act of 1873 was passed there was not even any gold or silver in circulation.

"But I would like now to pass, if you please, to the main points. I would like to discuss, in connection with the principal topic of the evening, money as a measure of value, or as redemption money is like a common denominator, to which other things are referred for comparison.

"In order to compare goods with money, there is no more need of as many pieces of money as there are articles to be compared than there is of having a quart cup for every quart of milk in existence or having a yard stick in a dry goods store for every yard on the shelf. The idea that to multiply the measurements of

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value is necessary is absurd, but it is of the foremost importance that the measure of values should not be tampered with, and should not be changed by legislation to the damage of all transactions based upon it.

"Right here is the whole secret of the opposition to silver as money. Silver has lost its stability of value. It is no better than any ordinary metal for stability. The action of India sends it down 20 per cent. The mere rumor of the Chinese indemnity sends it up 10 per cent.

"The more money there is roaming about in circulation is no reason why anyone gets more of it. Money, like property, is parted with for a consideration. No matter how many more coins there are coming from the mint under free coinage and going into the vaults of the banks through the credit of the mine owners who own the bullion, there are no more coins in the pockets of Weary Waggles, who is cooling his heels on the sidewalk outside the bank. The increased number of handsome horses and carriages on Michigan avenue does not imply that I can get them if I have not the money to purchase them with. I must produce work, turn out goods and labor. I must get gold or silver or something to the value of the goods, and in that way I will get them, and in no other way.

"There is no way of getting rich by short cuts, or by legislation, or by merely increasing the means of exchanging goods, when goods themselves are the principal thing.

"Money is only the machine by which goods are exchanged against one another. No matter how valuable, it is not wanted for itself. It is only a means to an end, like a bridge over a river. Do you suppose that

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the farmers of this country really believe that with each ton of silver taken out of the mines by the silver lawmakers in the senate that there are created bushels of wheat and bushels of corn and barrels of mess pork. The silver belongs to the mine owners. How will it get into our pockets or the pockets of anyone else? Do we insult anyone's penetration by supposing that the congressional kings are going coaching about the country distributing their money for nothing,

"Our farmers are no fools. They know they can get more money by producing more commodities to be exchanged for it, and for those commodities they want as good money as any other men in the country have got.

"I want to call your attention to the fact that goods in these days after being expressed in the common denominators of value are exchanged practically without the use of money. I will explain that very briefly, because the facts must be familiar to every business man in the City of Chicago. A sells a car load of wheat and draws a bill on the Chicago purchaser for the same. A discounts this bill and has a credit in his deposit account in a bank representing his wheat expressed in terms of money. But another person, B, may have sold to A woolen goods for the same amount. B draws on A for the sum and B also gets a credit to his bank account through the banks; then these two bits of paper meet and offset each other — that is the wheat and woolen goods expressed in the common denominator of value are exchanged against each other by a medium of exchange known as deposit currency.

"If you will permit me I will point to that chart on the other side of the room which represents the relative

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amount of that kind of currency in the United States as compared to the other kind. I refer to that large gray square at the right, which represents the total amount of credit deposits in the banks. Now, what does it do? Why, it does the work which we know exactly in quantitive form is performed by the clearings of the United States. That function, or that kind of money, the most welcome of all our kinds of money, amounts at the present time to $2,963,000,000 in our deposit accounts.

"But what work does it do?" If does the work of our clearing houses. You can verify those figures any week if you wish to know the way in which transactions are actually performed, goods actually exchanged without the use of money to the amount of $60,000,000,000 a year. And when you contrast the size of that with the square representing our gold, our silver certificates, our national bank notes and our greenbacks and subsidiary currency, which are the other blocks on the same sheet, you can see what an immense influence that has on our business.

"It is not necessary for me to expand further on that point because those are commercial facts apparent to any business man in the union. I can only say that from 92 to 95 per cent. of all our transactions are performed in this way, practically without the use of money, and that under recent investigations by the comptroller of the currency about 54 per cent, are performed in the same way. But it will be said by some one: "This vast system of credit" — but it is not credit, it is a system of exchange — but they would say:

"This vast system of credit must be liquidated in actual coin or money." And so our business system

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rests like an inverted pyramid upon the apex of the small reserve of coin. Now, how true is that?

"If I have explored rightly, and I took but a very short time to refer to that matter, it would seem to me that is just the means by which goods expressed in the term of the common measure of value are exchanged against each other without the intervention of money, and by this means, which is independent of the passing of coin from hand to hand. These transactions expressed in terms of money are not based upon coin, but upon goods that are bought and sold.

"No business man waits until checks and money have reached such a volume before he thinks that the medium is sufficiently large for the needs of trade, before he sells his car load of wheat or his bushel of corn or woolen goods. He first sells his grain and cotton and draws a check or bill afterward. The deposit currency I have spoken of is the consequence and result of the transactions. This system I have been describing is as broad as the transactions. It is ultimately resolved into goods and based on goods.

"It is not true, therefore, that this system I have been describing is unstable like an inverted pyramid. The transactions are the reason for the existence of the checks and deposits. The checks and the deposits are not the reason for the existence of the transactions. To talk then about redemption money being scarce or being cut off by the act of 1873 is about as futile as talking about hearses being scarce because there is not a hearse to every man. If people die rapidly the hearses do not stand so long in the undertaker's yard. If many transactions take place the money becomes nimble and a little goes a long way. One hearse may

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bury many people, one at a time, and so a little money will exchange a great many goods, but you say, there must be money enough to liquidate every transaction necessary, and you point to a panic, and when there is a money famine. You point to when there is a money panic, that is to say, when properties and securities are thrown on the market at once to be sold to get the legal means of paying obligations.

"Very true, but in ordinary times all goods are not at once offered any more than all people are dying at once. When a cholera epidemic comes people die, and die rapidly, and hearses are in exceptional demand, like money in a panic. But note this: Even if every corpse is not lucky enough to be carried in a hearse it yet can be buried some way or other. It may not be so stylish, but it gets there all the same. It may go to its grave in a cart or an express wagon. So the goods and money, if they cannot all be exchanged in currency for coin, they may yet be exchanged by other means, by clearing-house certificates, or, last of all, even by barter. All goods are not offered for exchange at once any more than a million men crossing a bridge are all on the bridge at the same time. A million men can all cross a bridge comfortably 100 at a time, but if they all cross at once there is a panic and some one is hurt.

"Now, I want to suggest in connection with the act of 1873 and with the general question very briefly one or two facts. Prices since 1873 have not fallen because of any lack of money, and I think I have shown you on general principles there has been no reason why there should be an increasing amount of money, and 1 intend to show you now by facts that prices have not

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fallen since 1873 because of any lack in the quantity of money.

"I have prepared on that chart the facts showing the most extensive movement of prices, the most exhaustive study of prices ever made in this country or any other. If the gentlemen can see across the room you will find that there is a straight black line crossing the middle chart and that that represents the figure 100, or the basis from which the figures move. Now, there is a line that starts from the beginning there in 1860 representing the movements of 223 articles quoted solely in the American market. That line rises up as you see it. It is marked ‘0.’ It rises up from that base line to 1865 and then it starts downward. It moves down and in 1879 strikes the base line again, so that the movement of prices shows that in 1879 we were exactly on the same level to prices before the civil war. Then the line moves slightly above the base line, showing that prices were higher than 1860. Then it drops a little under again to the figure ‘C,’ just under the line, and, compared with 1860, the prices of 223 articles averaged together in the American markets showed a decrease as compared with 1860.

"Now, let us compare with that the circulation. There is a line marked ‘D’ across it. Soon after the civil war it moved a little above the line, and then in 1879 the circulation of the United States advanced rapidly and moves to the right. There was a greater demand put upon the money with the increasing circulation, but I point to the chart to show you what the transactions were which you would appeal to as showing how much trade had increased. That might indicate the amount of demand put upon the circulation

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of the country. That line up there in red is the line of the coloring which I just explained to you was the amount of transactions in the United States practically without the use of money, consequently the very thing that you will refer to as indicating an increased demand upon money is the very thing which explains just to what extent we have economized the use of money.

"Lastly on that chart there is a dotted line and red, which begins some distance from the base line. That represents the value of silver compared with gold. It travels along the '70s about the same ratio, 15 1/2 to 1. Then it goes down and up. In 1879 it was just crossing the line of circulation at ‘D.’ It keeps on pretty steadily until after 1885, and then it drops below the line, then rises, and now it is again down; you can just see it faintly at the lower edge of the chart, like a star in the winter just passing over the horizon. That is a significant story. That shows the relation of silver to gold, while the line ‘C’ indicates the relation of all the commodities in the United States to gold.

"Now I ask you whether there is any parallel showing of silver relative to gold and commodities relative to gold? The price of commodities is 8 per cent, below what it was in 1860. Silver is 50 per cent. below. Isn't it perfectly clear then, gentlemen, that silver did not have the same purchasing power in 1894 as it had in 1873?

"There is absolutely no correspondence. The purchasing price of silver is infinitely below the price of the purchasing power which it had in 1873. Therefore, it is not to-day, in 1894, a just means of paying debts. But more than that, why should there have been any

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change in prices in the United States after 1873? There was no more gold in circulation than in 1873, yet, May 1, 1895, there was gold in circulation in the United States $568,000,000, and silver $524,000,000, making a total of $1,092,000,000. More redemption money has been coined by the mint by $1,092,000,000 and yet prices fall. That is due, without the shadow of a doubt to any investigator, to the cheapened cost of production.

"Moreover, if it be associated with a fall of prices since 1873, with the demonetization of silver, I point to the fact that there is more silver in circulation in the very countries concerned to-day than in 1873. Germany has still 110,000,000 thalers of her old silver and the five franc pieces of France are more in circulation than in 1873, and they are all legal tender.

"The United States, after the Latin union ceased to coin silver in 1878, tried this experiment, and now the United States has added to the circulation of the world something over $600,000,000. That is, there is more today, in 1896, than there was in 1873. Therefore, why the use of talking about the fall of prices having been due to the subtraction of the money of the world when there is more silver in circulation and more gold in circulation by hundreds of millions.

"Moreover, it may be said that commodities had fallen because of the subtraction of silver from the circulation. In 1873, compared with earlier years, the exertion of the average laborer had risen 8 per cent. The laborer to-day commands more gold than he ever commanded in the industrial history of the world. Not only have wages risen all this time, but because of this great cheapening in the cost of production of commodities,

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which has caused the falling of the prices of commodities in general, wages have risen in money, in gold, and his purchasing power has increased double. Not only has money risen but commodities have fallen. The laborer has got double since 1873. For heaven's sake let us have more of 1873 for the laborer.

"This persistence in saying that the fall of prices is due to silver is like the story of the grandmother, who said there was something good in everything, and the daughter said: ‘I really believe you would say something good about the prince of evil.’ ‘Well, my dear, I am sure we must all admit he has great perseverance.’

"Now the free coinage of silver at 16 to 1 — let us get the record to the point; when the market ratio was about 32 to 34 — it skipped about so much you can't be really certain. It has been 34 to 1; somewhere between 32 and 34 now. If the market ratio be that in the mint ratio you propose 16 to 1 there is a premium of sixteen ounces of silver profit on withdrawing every ounce of gold in circulation. Free coinage of silver at 16 to 1 means single silver monometallism; 16 to 1 is a single silver standard, and, in the language of my opponent, will start with all the South American countries and Mexico. Free coinage of silver, then, is absolutely certain to drive all gold out of circulation. The mere hint of it did that in the panic of 1893. May 1, 1895, the first of this month, there were $568,000,000 of gold in circulation. Since gold must be inevitably driven out if free coinage of silver is had, there will be no inerase in the quantity of money.

"If the people who support free coinage hope to increase the quantity of money it is perfectly evident on

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the face of it that it will contract the currency by the total amount of $568,000,000. It could not change prices, therefore, by increasing the amount of the medium of the exchange. That is plain. The only way it would act would be to increase the price of every, thing because reckoned in a cheaper medium than that of gold. This my friend admitted this evening.

"If prices would rise we would have a glow of satisfaction. It is the kind of glow of satisfaction which comes to the inebriate after he has been supplied with drink after he has been thirsty a long while. For example, take a pair of gloves worth 100 cents in gold. It would exchange for about 210 cents in silver. A dozen of eggs now selling at 15 cents would sell for about 30 cents, and everything we buy would rise in proportion, since the intrinsic value of the pure dollar is worth but 51 cents.

"As free coinage of silver would inevitably result in a rise of prices it would immediately result in the fall of wages. Its first effect would be to diminish the purchase power of all our wages. The man who gets $500 or $1,000 a year as a fixed rate of wages or salary will find he can buy just half as much as now. Yes, but some one said the employer will raise his wages. Now, will he? The facts on that are clear and indisputable. It has been one of the undisputed facts of history that when prices rise the wages of labor are the last to advance, and when prices fall the wages of labor are the first to decline. Free coinage of silver would make all the articles of the laborer's consumption cost him 100 per cent. more unless he can get a rise in his wages by dint of strike and quarrels and all the consequent dissatisfaction arising from friction between the employer

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and employee. He would be able to buy only half as many articles of consumption as he had before.

"In short, a rise of prices necessarily results in a diminution of the enjoyments of the laboring class until they can force the employers through a long process of agitation to make an increase in their wages. Are we willing to sacrifice the interests of the laboring class to the demands of certain owners of silver mines who hoodwink people with the cry of more money?

"This is a very distinct and serious damage. The damage runs in other directions, however. But the proposition to adopt a depreciated standard of value is simply an attempt to transfer from the great mass of the community, who have been provident, industrious and successful, a portion of their savings and gains into the pockets of those who have been idle, extravagant or unfortunate. The provision which has been made for old age, for sickness, for death, for widows and orphans or by insurance will be depreciated in the same ratio.

"No invasion of hostile armies burning and destroying as they advance could by any possibility equal the desolation and ruin which would thus be forced upon the great mass of the American people. Such desolation, moreover, does not fall alike upon the shrewd and unsophisticated. The shrewd ones, the bankers and the like, will be easily able to take care of themselves, while we plain people will be robbed of our hard earnings without any hope of compensation.

"Moreover, free coinage of silver would injure those who wish to borrow. I should like to touch upon the question of debtor and indebtedness. The justice of to-day permitting mortgages and obligations to be paid

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off in money 50 per cent, less than that in which they were contracted shows its own dishonesty on its face without further remark. When you think that since 1873 there has been only this standard, their offer to pay them in a money worth half of the present value is simply repudiation and dishonesty.

"Let me explain that. If I have attempted to save painfully $1,000 by many years of sacrifice, and loan it to B on a mortgage, then if B urges legislation by which he can pay me back in a cheaper money, worth one-half of what he got from me, do you suppose I would ever lend to B again or renew my mortgage? If I had pinched and saved, gone without a new overcoat or used a shabby parlor carpet in order to save something and invest it for my child, and if then I gave it over to B, who has the spending of it, is it not fair and square that I should have back again what I gave him? If B spent it and enjoyed it he is not thereby absolved from paying it back,

"I appeal to the sense of fair-mindness in every American in this land. No trick or sophistry can make the scaling of this debt to me anything but dishonesty and cheating. Any state that enacts laws whereby debts can be scaled signs its own commercial doom. Cheating is a bad business policy for man and state. I say that the passage of the bill, free coinage of silver at 16 to 1, would injure the borrower.

"The savings banks of the United States in the years 1893 and 1894 had deposits from 4,777,000 depositors, with a total amount deposited of $1,748,000,000, or an average to each depositor of $365.86. Pass a free coinage measure, 16 to 1, and you hurt the purchasing power of the deposits of the small

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savings in this country, affecting nearly 5,000,000 of people.

"The building and loan associations in this country are indebted to their members to the amount of $450,900,000. Pass a free coinage measure and you scale that indebtedness one-half, and whom do you touch? The life insurance outstanding Dec. 31, 1889, was $618,000,000. Scale that indebtedness one-half and leave a desolate widow or the children with one-half, and in recent years, too, under the present standard.

"Take the pensions to nearly the amount of $140,000,000 that are paid annually. Pass a free coinage measure and reduce those. You would thus affect 11,000,000 of persons. The case that I have described, therefore, is not a limited or special one.

"The bonded debt of the railways in the United States is about $6,000,000,000. If free coinage of silver were introduced it would enable these railways to pay off their debts with what is now equivalent to about $3,000,000,000. They would thus be relieved of the necessity of paying the small investors who have taken their bonds one-half of what these corporations now owe them, and it is only a few of such corporations and railways that have outstanding indebtedness that has run a long time, and which could have been Paid before the period of 1873.

"The Sherman act of July 4, 1890, unless it had been repealed, would have brought us to the silver standard as it was. The mere suspicion of it struck a blow at our measure of value, brought on a panic, made prices uncertain and caused doubts as to future plans in every factory and shop in the land. Those who have silver mines, and who can, by their wealth, control

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political parties and legislatures, who make the very seat of our national government their prided offices and actually turn the national senate into a bureau for bullying the prices of their product, to those men we say beware.

"Those of us who belong to the rank of plain citizens, who are thinking only of the country as a whole, who believe in honesty and intelligence, hold that when a question of right or wrong is presented in a campaign of education the people will decide for right and for justice. We cannot believe that a special interest led by millionaires can go on unchecked in their plan of sacrificing the taxpayers in order to heap up riches, especially when this is done on the most fallacious of economic grounds — grounds which have been proved wrong by the experience of every country of modern times. How long will it take to convince every man in the land that conditions of prosperity are those in which the honest men can best meet and pay his obligations.

"Unless the debtor can get employment or find a market for his goods, how can he pay interest or principal? Now, if tampering with the standard in terms of which all transactions are drawn, all contracts made, all goods bought and sold, brings industrial paralysis, because no one knows what will happen ten days hence, and no one will go on making goods for a changing market, it is to the interest of every laborer, every debtor, every honest man, is it not, to keep and maintain the value of the standard so far as that may be done?

"The debtor will be no better off by free coinage even if we had it, which we never will. Every lender

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would insert the gold clause in the contract on our present basis of contracts and prices. The very hint of possibility of a change to a depreciated single standard would precipitate a panic just as it did in 1893, and when the gentleman who spoke before me charged me with being certain to engage in special pleadings I ask him to consider the condition of the country to-day, what it is to-day with the great iron industries of Pennsylvania keeping up prices since there has been a steady recovery of industry from the very moment when Mr. Cleveland put his foot down and said, ‘We should and shall maintain our standard of value inviolate.’

"Is it true, that, even laying aside all honor and justice, resorting to a single silver standard depreciated 48 per cent., the debtor will sell his goods at 100 per cent. more, and the more easily pay off his debts? By no means. That is the most superficial of all ideas. Trickery is always sure to injure those who resort to it. And I do not myself feel it necessary to do any more than appeal to the selfish motives of the American people. I for one am ready to appeal to that integrity, that sense of honor, and that uprightness in the American people, which, whenever it has been appealed to, has decided rightly upon these great questions of justice.

"In conclusion, gentlemen, extraordinary as is the proposal for free coinage, it is in truth only a huge deceit. It was born in the private offices of the silver Kings, nursed at the hands of the speculators, clothed in economic error, fed on boodle, exercised in the lobby of congress, and as sure as there is honesty and truth in the American heart it will die young and be buried in the same ignominious grave wherein lies the now forgotten infant once famous as the rag baby.

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"Free coinage is greenbackism galvanized into life. That heresy in its old form of a demand for more money has already been laid low. It will not long deceive us in its new form of a demand for more silver, for silver fiatism, nor in any other respect in what it presumes to be. It is not a predecessor for bimetallism. It is a wild leap in the dark for silver monometallism. Under the cry for more money are veiled the plans of a giant syndicate of mine owners and speculators, who have hoodwinked the people in certain parts of the country and who are still deluding them with a specious argument for more money, and are laughing in their sleeves at a constituency so easily gulled.

REJOINDERS OF CONTESTANTS.

The applause following Professor Laughlin's address having subsided the chairman announced that Mr. Harvey would be given fifteen minutes for rejoinder to his opponent. Promising to cover in that time all the ground Professor Laughlin had gone over Mr. Harvey said:

"He says that exports in 1872 were $1,100,000,000, and in 1894 $1,500,000,000 as an argument that before gold and silver came back we were running on paper money. I would only say that the population has increased faster than the increase as shown by those figures. He says both the gold and silver exports and imports during the years from 1860 to 1870 were paid for in gold and silver, as an evidence that gold and silver were international money. Now, we did not have gold and silver as money then, and yet it

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was used in the settlement of balances. But as what? Not as money, but as merchandise, and it is so used today — not as coined money, but as merchandise. We had paper for money and they had gold and silver, and yet it was used as merchandise then as it is used now. And if all the gold went out of circulation with us and we had silver or paper temporarily we could buy the world's merchandise now as we did then and as we did all the time.

"He says that the clause in the Bland-Allison act that stipulates that silver is legal tender money except where otherwise provided in the contract is just and proper. Now, gentlemen, that clause meant this, except where otherwise provided in the contract we will provide for gold. Now, you silver men shoot your guns. You silver men can pass any law you want, we have got you sewed up in a contract which called directly for gold. Never before in the history of the world, nowhere in the records of the United States, can you find where we enacted any law authorizing a creditor to take a note discriminating between our legal tender money.

"It is statutory treason to disrupt and discredit our money, and a statute which permits it — which was the Bland-Allison act — is the first of the kind in the statutes of the United States, and it did just what it was intended to do — fasten a gold standard, by putting it in the contract. Such a thing was never done before, and is unjust, if monometallism is unjust.

"He says silver drove out gold in France. Silver also drove out gold in this country, he says, for the first fifty years of the century, and then gold drove out silver. Now that is just what we want the business men of

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Chicago to understand. That is bimetallism; bimetallism, which makes either gold or silver primary money, because when one metal gives out and gets dearer or becomes scarce the other comes in. How can silver come in now. There is no such law authorizing it to be primary money or redemption money. It cannot come in now. Gold has got the crack to itself, but under bimetallism for centuries, as long as we have statistical record of it, when one metal came in and drove the other out, it was because it was cheaper by a small percentage, which drove it partially out or for a short time. Or it drove it substantially all out, and then came the other, but it was the very fact that either metal answered for use as money and that if one was not enough or if the business of the country would have its back broken by reason of insisting on one metal — there was the other to take its place, and that is what bimetallism means.

"Now, it does not mean when one of the metals goes out of circulation temporarily that is not a measure of value, because it is a measure of value. This question is world-wide in the sense of commercial parity. If silver left us in 1873, because it was at 2 per cent. premium over gold, at 16 to 1, why was it? Because there was a market in Europe; the mines in France were open to it at the ratio of 15 1/2 to 1, and it went there, and took the place of so much gold, which came back to us, but it is not so now. Silver, when it leaves us, does not take the place of money, because silver is demonetized. With both the metals remonetized, one of the metals going out of use, and leaving us, we have still a measure of value, because it is holding up the measures of values for the world. It is holding up

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the value of wheat in London, where it makes them pay $1.30 for Indian wheat, and makes them pay us $1.30 for our wheat. Gold and silver alternately are the strength of bimetallism, and it is not this one or the other one used as a measure of value when both are conjointly repudiated before the law.

"‘No silver in circulation from 1850 to 1873,’ he says. Now, silver was in circulation at that time. I know it as a fact. I was a boy 10 years old in 1861, 9 years old in 1860 and I know silver was in circulation. There are instances in my life that implanted it on my mind that makes me know that, and you know it, if you were living at that time.

"He says the measure of value should not be tampered with. I agree with him. The measure of value from 1792, also during the continental days and up to 1873, were gold and silver, and it should not have been tampered with. You people are tampering with the measure of values. You tampered with it in 1873, and the gold standard is an experiment. Show me, in the history of the world, where it ever existed before, except since 1873, and except since 1816 in England only. The ages have had bimetallism at a legal ratio between gold and silver, and monometallism, the gold standard, was attempted to be fastened upon the world by the simultaneous action of the financiers of the world, beginning with 1873.

"He says that silver now bobs up and down. Of course it bobs up and down now. It did not bob up and down before 1873. Professor, take the table of ratios — comparative ratios between gold and silver — for 200 years in the book before you, and you will find they stayed together for those 200 years, and that silver

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did not bob up and down, except the slight difference of exchange in the different countries and the slight difference in ratio between France and the United States. It did not bob up and down. We want you to give them equal rights before the law, and then silver will not bob up and down. Of course it bobs up and down now, and the monometallists are the cause of it — the act of 1873 is the cause of it. You say people should work and turn out property, and they will get their money. They are working, but they can't get the money. They produce the property, and find the property, costs them what they get for it; that they get what it costs them to produce.

"The farmer finds himself in the same fix, and that is why he can't pay his mortgages. Mortgages are increasing. Would they increase, as they are now, like a cloud threatening the prosperity of the country, if it were true that such industry as the American citizens can display would produce property that they could not go and get money with? The trouble is, when they have produced the property, you have destroyed the price.

"The professor tells a good story. I have heard him tell the same story before. Now, I want to tell a story. It is true that if there is a bridge across the stream and everybody wants to go over it at the same time, there is a busy day such as we would like to see in this country again, and they could not get over the bridge at the same time. If there were two bridges, professor, they could get over. Also, if they should charge too much toll over one bridge we might get over the other bridge cheaper.

"He says silver is the property of the bullion owner

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only. Whose property is gold? No matter who owns it; whether it is owned by the citizens of Illinois or owned by the citizens of Colorado. It is a question of wisdom and intelligence as to what property, if we are going to have property money, is best to be coined into money, and when that question is intelligently settled no special argument and no criticism can be made upon it by pointing to American citizens as owning it. If they owned our silver in England, and England had her hand in the Rocky Mountains, we would not hear of who owns the silver. It is a lack of Americanism in not standing up for our own product that I object to, when the intelligence of centuries has determined that silver is a proper metal for use as money.

"He says goods are exchanged practically without money. He ought to go down to Washington and tell Mr. Cleveland how to do without money. He says business is done without the use of money. Well, if he can drive these gold standard fellows to the position of the fiatists, why, we may reason with them. If business can be done without money then there is no reason why we should discuss the question of redemption money at all. He says a man buys goods on one day, using the money to get other property on the same day, and that it is the exchange of property.

"The country merchant comes to Chicago and buys goods, and in the course of sixty or ninety days he pays for them, and has his goods on his shelf for a year. He must carry them with money; he must have money to pay for them.

"The only appropriate illustration that the professor used were such words as ‘hearses,’ ‘brains,’ etc. And

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such reflections which are in sympathy with the position of the country.

"He is not an international bimetallist. He says prices have not fallen since 1873.

Professor Laughlin — I didn't say that. I said that prices had not fallen since 1873 because of lack of money.

Mr. Harvey — Well, that is too tough for me. He says prices have not fallen since 1873 for lack of money, why have they fallen? Is not property measured in money when everything else is equal? I don't think he told us why property had fallen. He points to a map on the wall representing the amount of clearances in a day going through the clearing-house. I thought he was going on with the illustration of the map and point out the gold in the country that it all rested upon, but he didn't do so, and I don't understand the object of the illustration. But the point we make, gentlemen, is that credit money and credits all are piled upon redemption or primary money. When you run, under such a standard as that it is a part of the statutory law of this country, it is regulating us with reference to our finances, and which we are reminded of, as to what that standard is, every time we look at one of our gold notes, our gold mortgages, etc.; and when you pile up all those methods and transactions of the nation upon a primary money you must consider (he quantity and quality of that primary money, and that is the essential question and issue that is between us here to-night. My fifteen minutes are up. I will finish this next time."

"Professor Laughlin will now have fifteen minutes, said the chairman, again, presenting that speaker, who said:

"With regard to the figures of exports and imports

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from 1850 down to the present time, I gave the figures for the total exports and imports combined in the year 1872 as $1,164,000,000, and in 1894 as $1,547,000,000, because the gentleman had stated that there had been a greater trade with Europe in the time when gold and silver had free coinage, and I used the year 1872 to show that there was a certain amount of trade, $1,164,000,000, and that to-day we had a greater trade, and that we do not have free coinage of silver.

"The gentleman referred to a most extraordinary proposition, which struck me at the time as so inconceivable that I thought I must be mistaken. It was in regard to the act of 1878. Now it happens that I was brought up in a lawyer's office, and I studied the old common law, and when he makes this statement that there never had existed anywhere in previous history any such statement as that a citizen of the United States was affected by such a statement as this in law, ‘except where otherwise expressly stipulated in the contract,’ ‘that citizens in the United States were not permitted to make a contract of any kind for the delivery of a specific kind of goods,’ I am amazed. I suppose it is one of the common law fundamentals, as old as any legal history. The statement, therefore, that a statement like that, recognizing the common law of the country, appeared in the act of 1878, merely as an expression, and never had been heard of before, is the most extraordinary exhibition of ignorance of the fundamental principle of law, as we understand it in this Anglo-Saxon age.

"Now, he made the statement in rebuttal concerning something I stated that the law of 1873 prevented silver from coming in and gaining its relative position again.

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If it would that alone would raise its value. Now, the fact is that before 1873 — the facts are indisputable — the relative market value of gold and silver so varied that they did not remain in circulation then, I challenge any student of economic or financial history to find an authenticated case of the concurrent circulation of gold and silver under a so-called bimetallic system for any length of time. I say that this is a fact indisputable — that it was either gold in circulation or it was silver in circulation.

"I have furnished here absolute, indisputable proof from the French financial documents to show that in France itself, where they attempted to establish what was supposed to be a bimetallic system, they did not have the concurrent circulation, the silver went out. They did not keep their parity. In 1860 the value of a silver dollar in gold was 104.58. The gentleman, then, must have been living in the plutocratic regions of those people who always paid about $1.04 when they need only have paid $1. Or he may have been keeper of a museum where they had those things on exhibition.

"The gentleman suggests that we have been tampering with the standard. Now, what do you mean by the standard? Why, the standard by which prices are estimated, by which transactions are made. Now, there was not any silver in circulation; there was not any gold in circulation. The Only standard we had been tampering with was the greenback. There was no change made, for there was no gold and silver in the country.

"Tampering with the standard is when we try to get that metal of the most unstable kind; and right behind

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the gentleman is a chart representing the girations of silver when it really has a chance. In 1876, irrespective of commodities or anything else, it changed its value 25 per cent. That is a pretty standard. That is the kind of standard to tamper with. In 1890, under a stimulation connected very closely with the passage of the Sherman act of 1890, silver went up and then it came down again like a rocket.

"Now he spoke of my chart over there and suggested that silver was bobbing. Yet, it has been bobbing, and has gone to the bottom, and it is like the old story of the man in the boat. When he dropped out of the boat he swore it was the boat that had gone up. He then says that we have spoiled the market because men, if they have produced goods, cannot sell, and in the next sentence he says a man sells for what it cost him to produce, and yet he says he cannot sell. Now, what is selling except getting what it cost to produce?

"Then he speaks to the point of the bridge illustration. I could not expect to be understood, even on a second reading. The bridge illustration was simply meant to show that in a time of great panic or great excitement, when a great amount of work has got to be done in a small space, that disorder sometimes arises. It is perfectly clear that, with order and with a proper medium of exchange, it does not make any difference which of the two bridges a man goes over, but if he goes on to the second bridge and it is a shaky one, and it bobs up and down like that, he had better not get on it.

"He also added that it was very un-American to talk about gold. Now, we produce gold as well as

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silver, and he asks who owns the gold. I answer exactly the same in regard to the matter of silver. The bullion owners, the mine owners, own the gold bullion just as much as the silver mine owners own the silver bullion, and when you put it into the mint it does not get into your pocket and mine. I tell you there is another process entirely beyond all that. The mint does not create any unlimited demand for gold. The mint does not buy gold. It is simply, and nothing more, than it merely changes its form into a round disk and. puts a stamp on it to indicate an authority, that it is a certain fineness and weight. That is all the mint does. It does not create any demand for gold, and gold mine owners own their gold just as the silver mine owners own their silver. And if it is un-American, I say, to say the truth, then I am an un-American.

"He objected to my funereal illustration. I suppose that he considered that if we were not going to have free coinage of silver that was quite too funereal a thing to think of, and I haven't any doubt if you will examine into my illustration very closely you will see a very much despised thing called a rag silver baby being carried out.

"He lastly says that the fall of prices since 1873 has not been accounted for by me. I did not say that prices had not fallen since 1873, because I called your attention to the movement of prices of 223 articles in coin. Since 1860 they had fallen 8 per cent. and it gives me an opportunity to call attention to something which I did not have time to before, and that is that the fall of prices began in 1865. It was at the time when prices were highest and from 1864 and 1865 the movement was steadily down.

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Now, if they are going to talk about 1873, why don't they talk about 1875? They were both under a paper money period. The high prices were in 1865, and when resumption of specie payment took place Jan. 1, 1879, prices were exactly on the same level as they were in 1860. But you start with silver in 1879, and compare its price with what prices were in 1879 after the resumption of specie payment, and you can see the difference and the change in the purchasing price of silver as compared with the money.

"Now, what was the cause of the fall in the values of the commodities? It seems to me that before an audience of men engaged in industrial operations, men who know something about manufacturing, who know something about the way in which industrial improvements have been introduced into every factory, in every furnace, in every cotton and woolen mill in this country in the last ten or fifteen years, that the change produced in the cheaper cost of productions, in improvements and inventions in the last fifteen or twenty five years is the striking marvel of this century. Many a man and owner of a mill I have heard say that it made him tired to keep up in this race of improvements. The moment that he has his mills adjusted somebody else had got something new and he had to change his mill and his men all over again.

"One man in the iron industry in Pittsburg wrote to me that since 1873 he could mention no less than 500 different inventions all united together to change the price of production of iron. You all know how the price has gone down How about the price of steel rails, which has gone down until steel is really no more valuable than iron was then? I need not go

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over this is a body of men who know the movements of commercial prices; the reduction of prices from the change of cost has been phenomenal. It has been one of the most difficult things of my life to understand why prices have not fallen more than 8 per cent. since 1860. The only possible excuse for it that I can see is the enormous production of gold. In 1893 the annual production of gold was larger than any time in the history of the world, over $155,000,000. And the directors of the mints show us that the reports of 1894 will show a still larger production of gold."

"Mr. Harvey will now have five minutes for the close of the discussion," said the chairman, announcing the author, who said:

"Professor Laughlin refers again to the bridge story. I want to do the same thing. If one bridge is rickety we use the other while we put the bad one in order. If we have only one and that is out of order, we have to wade or swim. That is the trouble now. We have only one bridge, and the administration and Mr. Cleveland have hold of one end and the Rothschilds have the other and they have drawn our end away from us.

"Professor Laughlin refers to the purchase price of wages, etc. There is contention on between the labor unions of the country and the financial and other trusts of the country, and it is a deadly struggle, as we know, and one of the worst things of that struggle is the 4,000,000 of idle laborers in this country. In order to hold up the wages of the country it is producing idle labor. It is better to all have wages and all have work and something to buy than it is to have wages forced up by unions and not enough people have work to do. That is our reply to that.

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"Professor Laughlin tried in his first speech to scare the savings depositors. That is one of the special arguments that is made on the other side. They will stop scaring them when they have no depositors left, and that is what their policy will come to.

"Professor Laughlin says debtors would not be benefited by remonetization of silver, but, later on, he says the debtors are trying to benefit themselves by cheating somebody — that they are going to cheat people by adopting a silver standard. Now, we cannot follow that kind of logic. We get lost if we do."

This was the end of the arguments and the formal gathering became an informal one after the chairman's expression of thanks to the speakers.

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Chapter II. — By Senator J. N. Dolph of Oregon.

It was in the summer of 1893 that President Cleveland called an extra session of Congress, to secure the repeal of the purchasing clause of the Sherman act. In the discussions which followed this proposal, both in the Senate and in the House of Representatives, the leading economists in Congress took active part. Some of them have selected the speeches delivered on those occasions as the most satisfactory and careful interpretation of their views, and portions of them are therefore included here.

Tuesday, August 8, when the Senate had under consideration the President's message, Senator J. N. Dolph of Oregon spoke in part as follows:

The President of the United States, moved thereto by the business depression and financial disturbances everywhere prevailing, and assuming that the present condition of the country is the result of the operation of the so-called Sherman law, has convened congress in extraordinary session and urged upon it in his message of to-day the immediate repeal of that law. Whether or not it would be wise under existing circumstances to repeal this law, the claim or the assumption that it is the principal cause of the prevailing business and financial condition of the country should not be permitted to go unchallenged.

The present financial and industrial condition of

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this country should surprise no one. It has been predicted for years by those who believe the prosperity of the country can only be maintained by the protection of American industries. The present condition is the logical result of the success at the presidential election of November last of the party which declares that protection of American industries is robbery, and stands pledged to reverse the policy which for more than thirty years has given us an era of prosperity such as this or no other country has ever before enjoyed.

Over all this great industrial system hangs a dark cloud of uncertainty and fear, an impending blow threatening its destruction. And so the wheels of progress are stopped. The fires are suffered to go out in furnaces, the machinery in great establishments is idle, and idle men seek employment. The importer will not import dutiable goods when he fears that soon his competitors can import them free of duty. The manufacturer will not produce his products in excess of the present demand when he fears that his surplus product may be compelled to compete with free foreign products. He will buy raw materials for present needs only while the prospect is before him of soon being able to supply himself with raw materials of foreign production free of duty; and so the importer, the merchant, the manufacturer to avoid disaster curtail their operations.

The wholesale merchants, the bankers, and all classes of creditors press collections, settlements are forced, and financial losses, business failures, and bankruptcies are the result. The Sherman law is not the sole or even the principal cause of the present financial depression, and its repeal will not cure our financial and industrial ills.

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No permanent improvement in the industrial situation need be expected while the destruction of the protective system is threatened or feared. No legislation by which domestic industries will be injured or destroyed, by which the products of foreign labor will be admitted to free or to greater competition with domestic products, which will result in transferring domestic industries to foreign countries, and giving labor now performed by American citizens to foreigners, will help to restore confidence or bring business prosperity.

After the Democratic majority in congress shall have settled upon a tariff policy, and formulated and enacted its tariff revision, whether such revision shall be general or be destructive only with a few American industries, such as the wool and tin-plate industries, the business of the country will adjust itself to the changes, and we may enjoy a halting, intermittent prosperity with lower wages to laborers, but a sound, permanent prosperity in this country will not, in my judgment, be again enjoyed until we are assured of the success of the Republican party and its control of both Houses of Congress, and that a policy is to be adopted and maintained by which the industries, the capital, and the labor of this country are to be preferred to those of foreign countries.

Necessity for the repeal of the Sherman law, if such a necessity exists, has been created by the success of the Democratic party, the threat of free trade and the predictions by the Democratic press and Democratic politicians of disaster to follow from the operation of the Sherman law, made in a systematic effort to secure the repeal of that law at the last session, of congress under a Republican Administration.

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There are so many widely differing views upon the silver question, so many diverse financial plans proposed, so many erroneous opinions concerning our coinage laws, our financial system, and the character and functions of money, that it may be useful to refer briefly to some of the elementary principles of political economy which can not be disregarded by congress if it would provide the country with a sound, safe, and honest currency.

Labor employed in the creation of useful articles is the source of all wealth. A useful product of labor is a thing of value. It may be a product of agriculture, for which the farmer plows and sows and reaps, availing himself of what nature has furnished him at hand; the fertile soil, the warmth of the sun, the early and later rains, or it may be the gold and silver for which the miner patiently delves in the great treasure vaults of nature, or the more useful products of iron and coal which require the labor of men to extract them from the earth and fit them for use, or it may be a coat, a hat, a watch, or a steam engine. All the things by which we are fed, clothed, and sheltered, which add to our convenience, comfort, and pleasure are the products of labor. They are valuable because they are adapted to the use of man. But one man can not make all the things he needs, or at least he does not. Hence we have diversity of labor, and one man mines gold and silver, another cultivates the soil, another raises sheep and grows wool, another manufactures cloth, another manufactures clothing, and so on.

Now, the man who works the mine or grows wool must have food and clothing and many other things. If there were no money or medium of exchange the

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manufacturer of cloth might buy wool of the wool-grower and give him cloth in exchange, but the wool-grower might not need the cloth. He would need provisions and clothing. He might take cloth and find a manufacturer of clothing, who would exchange clothing for it, and he might possibly exchange cloth for groceries, and the grocery man might in turn exchange cloth for something that he needed; but this would be a very tedious and unsatisfactory manner of conducting commercial exchanges. Hence the necessity of a medium of exchange — a tool of exchange — so that when the wool-grower carries his wool to the manufacturer of cloth or to some middleman and sells it, instead of taking cloth in exchange for it, he can receive this medium of exchange to the amount of the value of his wool, and this medium can in turn be exchanged for any other commodity which he may need.

This medium we call money. If we could conceive of the first community which invented money assembling together to choose such a medium we could probably obtain a pretty good idea of why gold and silver came to be selected. Such a medium should possess considerable intrinsic value; that is, be capable of being used for a great many useful purposes. It should be tolerably scarce, and hard to obtain, so as to be proportionately valuable, easily transported, and pass currently from hand to hand. It should be plenty enough, however, to answer the requirements of commerce, and it should be capable of being easily subdivided and changed in form Gold seems to possess all the essential requirements for money, and it is undoubtedly for this reason that it was selected. Silver partakes in some degree of the same quality, although it is more

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abundant and more easily obtained. Therefore it has been selected and used for money and made a legal tender for the payment of debts, in some countries for all sums and in others for limited sums only.

Sometimes in the exigencies of commerce the purchaser may not have this medium of exchange, money, in sufficient quantities to pay for his purchases, and hence he buys on credit.

When the war of the rebellion broke out it required a great deal of money to carry it on, and there were many reasons which rendered it difficult for the government to obtain money, that is, gold and silver. In its extremity the United States, to enable itself to meet its engagements, to pay the soldiers, to furnish arms, transportation, and supplies, not having gold and silver enough, issued its promise to pay money in the future. Some of these were promises to pay certain amounts of money at the expiration of a fixed period with interest semi-annually at fixed rates. These were the government bonds. Then it issued treasury notes or greenbacks of various denominations, so as to pass from hand to hand as money, which were nothing but acknowledgments of indebtedness, without any time being fixed for their payment or any agreement to pay interest. Congress made these notes legal tender for the payment of private debts.

As the legal tenders possessed no intrinsic value and were debts payable only at the pleasure of the United States, and as the war progressed portions of the people began to fear that the South would prevail and that the States remaining in the Union would be either unwilling or unable to redeem these promises, they rapidly depreciated in value until they were worth no

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more than 35 cents on a dollar; but as the prospects of subduing the rebellion and maintaining the Union increased they gradually appreciated in value, and after the war was closed continued to appreciate until they reached about the value of 90 cents on the dollar: that is, a dollar in greenbacks was worth 90 cents in gold.

Congress after a while passed the resumption act — that is, fixed a day when the government would pay its notes in coin if presented to the Secretary of the Treasury, and provided one hundred millions of gold in the vaults of the treasury to pay them. But all at once the legal tender notes became worth their face in gold and the gold in the treasury was not needed. The people preferred to keep the promises of the government to pay the money when the government was ready to redeem them.

The legal tenders and all treasury notes are evidences of debt of the government possess no intrinsic value. They are made by law to perform some of the functions of money. They are made legal tender for the payment of private debts and public dues, and their value depends entirely upon the provisions made by law for their redemption in coin — that is to say upon the fact that they are convertible into that which has intrinsic value.

We have several kinds of currency in circulation, performing the functions or some of the functions of money. There is the gold coin double eagle, eagles, half eagles, quarter eagles, etc. These gold coins are legal currency — that is, they have been declared by law to be a legal tender for the payment of private debts and public dues, but they also possess such intrinsic

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value that if you should melt them up into bullion the bullion would be just as valuable as the coin. In fact, when they are exported, the fact that they are coined with the devices provided by our laws upon them adds nothing to their value; their value depends entirely upon their weight.

Then we have the silver coin, which is also by law made a legal tender for the payment of private debts, and is receivable for public dues. The intrinsic value of the silver dollar, like the intrinsic value of the gold dollar, is the value of the bullion it contains, which at present is about 60 cents in gold.

The silver dollar in the payment of debts and public dues is required by law to pass for one hundred cents. Forty cents of the value of every silver dollar is based upon the credit of the government. It is true that the government has not agreed to redeem the silver currency in gold upon presentation to the treasury, but it has promised to receive it as the equivalent of gold for public dues, of which we collect about $500,000,000 annually. This is a qualified redemption in gold, and this provision, with the general expectation that the government will maintain this currency upon a parity with gold, has so far kept the silver dollar at par with the gold dollar.

There are also the gold and silver certificates, which perform the functions of money. They are receipts for gold and silver deposited in the treasury. They are redeemable upon presentation at the treasury in gold or silver coin as the case may require. They are like wheat receipts issued by warehousemen, which call for a given number of bushels of wheat upon presentation and pass from hand to hand instead of the wheat, until

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some holder is ready to present them to the warehouseman and exchange them for the wheat.

Any person may take gold not less than $10 in amount to the treasury and deposit it and receive a gold certificate, and the gold is kept in the treasury, to be returned to the holder of the receipt when it is presented. The same thing is true of silver certificates.

Then there are the legal tender notes, possessing, as I have said, no intrinsic value, but redeemable in gold on presentation to the treasury. They are, therefore, worth their face in gold. There are about $346,000,000 of this currency.

We have also another kind of national currency, the treasury notes issued under act of 1890. They were issued for the purchase of silver bullion at the market price at the time of purchase. The silver bullion is stored in the treasury vaults theoretically, if not legally, as security for the payment of the notes, and the law provides that the notes shall be redeemed upon presentation in coin — gold or silver coin — at the option of the Secretary of the Treasury. The gold coin and the gold certificates constitute an absolutely safe currency, for the coin is intrinsically worth its face, and j the certificates can be exchanged for gold upon presentation at the treasury.

The legal tender notes are equally safe, for they are redeemable upon presentation at the treasury in gold. A hundred millions of dollars in gold is kept in the treasury as a reserve for the payment of these notes, and the Secretary of the Treasury is authorized to sell bonds for gold, if necessary, for their redemption. The silver coin and silver certificates and treasury notes

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stand on a different footing. The intrinsic value of the silver coin in gold, as I have said, is about 60 cents on the dollar. The silver certificates are redeemable in silver. The treasury notes may be paid in silver coin. There is no provision of law for redeeming this silver coin and currency in gold, except the provision for the receipt of it as the equivalent of gold in payment of public dues.

If congress should repeal the law requiring silver coin and silver currency to be received for public dues, the value of the silver coin, the silver certificate, and the treasury notes would at once depreciate until they would be worth no more on the dollar than the value of the silver bullion in a silver dollar. To repeat, the gold and silver coin possesses intrinsic value. The gold coin is intrinsically worth its face; the silver coins are intrinsically worth about 60 per cent. of their face. The gold certificates and the silver certificates are the obligations of the government, and are valuable because they are convertible on demand into gold and silver. The legal tender and treasury notes are evidences of debt of the government, but possess no intrinsic value and are valuable only because the legal tender notes can be converted into gold upon presentation to the treasury, and the Treasury notes can be converted into coin, gold or silver coin, at the option of the treasury, upon presentation for payment.

While silver and gold possess intrinsic value, and for that reason, in part, are adapted to use as money, it must not be supposed they have a fixed relative value; that is to say, that a certain amount of silver is always worth a certain amount of gold. Considered as bullion, they are but products of labor, just as wheat, potatoes,

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cotton, and wool are products of labor, and it would be no more absurd to suppose that the relative value between potatoes and wheat, or cotton and wool is fixed, so that 2 or 4 bushels of potatoes are always equal in value to the value of a bushel of wheat, or that 5 pounds of cotton is always equal in value to a pound of wool, than to suppose that a given number of ounces of silver, say 16 or 20, is always equal in value to an ounce of gold.

The value of each metal, like the value of every other product of human labor, is fixed by the supply and the demand. This is the reason why the use of the two metals as money under free coinage of both is impossible without the concurrent use of the two metals as money, at an agreed ratio, by a sufficient number of commercial nations to maintain the ratio of their intrinsic value at the legal ratio agreed upon.

Some persons who demand free coinage of silver in the United States at the ratio of 16 to 1 appear to believe that gold and silver have naturally a fixed value relatively one to the other, and that the United States adopted that natural relative value by the coinage acts of 1834 and 1837. The relative intrinsic value of the two metals, as I have said, is fixed by the universal and imperative law which fixes the price of every product of human industry in the world's market.

The value of silver as compared with gold has been, with the exception of a comparatively brief period, constantly fluctuating since authentic history began. Five hundred years before the Christian era an ounce of gold was worth 13 ounces of silver. At the beginning of the Christian era an ounce of gold was worth 9 ounces of silver. Three hundred and fifty years later it

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required 15 ounces of silver to buy 1 ounce of gold. Two hundred and fifty years later still an ounce of gold was worth 18 ounces of silver. About the close of the fifteenth century the ratio was about 1 to 10; by 1688 the value of gold had again increased until an ounce of gold was worth 16 ounces of silver. For nearly two centuries this ratio was substantially maintained by the use of both metals as money by the principal commercial countries of Europe. When silver was demonetized by Germany and its coinage suspended by France and the Latin Union this ratio was no longer maintained, and the relative value of silver to gold has since greatly fallen and has been constantly fluctuating.

Until an international agreement can be secured between the principal commercial countries of the world for the free coinage of silver at an agreed ratio so that the intrinsic value of the silver product of the world as measured in gold can be maintained at the legal ratio agreed upon, each nation must determine for itself whether it will have a gold or a silver standard. A double standard is impossible. The two metals will not circulate together unless the parity of their value can be maintained. To-day the following foreign countries have the silver standard: India, China, Mexico, Japan, and most of the Central and South American States. The following have gold standards: Brazil, British possessions in North America, Denmark, Egypt, Finland, German Empire, Great Britain, Liberia, Norway, Portugal, Sweden, and Turkey. The following have legally a gold and silver standard, but in fact a gold standard. They have no free coinage of silver, and silver coin is maintained in domestic circulation on a

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parity with gold by some provision for its redemption in gold or by its receipt for public dues: Argentine Republic, Belgium, Chile, Cuba, France, Greece, Haiti, Italy, Netherlands, Spain, and Switzerland. Those people who propose free coinage for the United States propose that we shall change our measure of value from gold to silver and join India, Mexico, China, and other countries having a silver standard, and that silver shall be the basis upon which all the transactions in this country shall be conducted.

Our own experience is sufficient to show that it is impossible under free coinage to maintain in circulation both gold and silver when either is undervalued by the legal ratio. The coinage law of 1792 established the ratio of 1 to 15 between gold and silver. The intention of congress was to adopt the commercial ratio between the two metals in the markets of the world. But gold was undervalued and could not be kept in the country, and, its place was supplied with Spanish milled dollars and small, abraded silver coins. The ratio of France being at the same time 1 to 15 1/2, France took all our gold under a law that is universal and inevitable. To secure the retention and circulation of gold in this country the acts of 1834 and 1837 were passed. The ratio under those laws was 1 to 16. Gold was overvalued and silver left the country under the operation of the same law. To enable us to retain in this country silver subsidiary coins the act of 1853 was passed, reducing the amount of silver in half dollars and other fractions of a dollar, discontinuing free coinage of subsidiary coin and providing for its coinage by the government from silver purchased by it, upon which it received the profit.

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Does anyone suppose for a moment that when congress established a mint and fixed a ratio between gold and silver at 15 to 1 on the advice of Hamilton, or when in 1834 the ratio of 16 to 1 was adopted for silver and gold, if silver and gold had been of the value relatively to each other they are to-day the ratio of 15 to 1 or 16 to 1 would have been adopted? It is familiar history that Hamilton endeavored to adopt as the legal ratio the then commercial ratio between the two metals in the markets of the world, and that congress in 1834 designed to make the ratio such that gold would remain in this country, whether under it we could keep silver or not.

Some persons have proposed that a new legal ratio between gold and silver should be established by law, say a ratio of 20 to 1, and the mints be opened for the free coinage of silver at this ratio; but this proposition is impracticable, would surely give us a silver standard and drive gold out of circulation, would not increase the price of silver bullion or benefit silver producers, and would be no better for the country than free coinage at the present legal ratio. If we are to abandon gold as the standard, and to adopt the silver standard, it is not material whether a silver dollar is worth 50 per cent. or 90 per cent. of the gold dollar. If we could maintain in the world's markets the actual commercial and intrinsic ratio of value between gold and silver at some legal ratio we could adopt, then the question would be solved; but we can not.

This can only be done by the united action of the principal commercial nations of the world. If we should adopt by law a legal ratio, which at the time was the same as the commercial ratio of value of the two metals,

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before a dollar could be coined under it, silver, which fluctuates every day in price, might fall until the legal ratio and the ratio of the intrinsic value of the two metals would be widely different; and under free coinage at the ratio adopted only one metal would be coined or remain in circulation. Such a proposition shows a failure upon the part of those who make it to comprehend the first principles of the silver question.

Others have advocated free coinage of both gold and silver without an attempt to make the silver dollar the equivalent of the gold dollar, but letting the intrinsic value of gold and silver fix the current money value of gold and silver coin; in other words, that we should have two standards, a gold standard and a silver standard; but this is impracticable. In such a case one or the other of the two metals would have to be measured by the other, or we would require a third standard to measure them both.

Gold being the standard of value of all the great commercial countries, and the medium in which public dues must be paid and foreign debts settled, the silver coin under such circumstances would be but a commodity in foreign countries. Gold would disappear, and the depreciated silver currency be our standard of value, and the measure of commercial transactions or our exchanges conducted on the silver standard would be mere barter.

The government stamp can not create good money. All money must possess intrinsic value or be convertible into that which has intrinsic value. After the discovery of gold on the Pacific coast, gold dust was largely used as a medium of exchange, and before the establishment of the branch mint at San Francisco

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private parties manufactured gold coins of the weight and fineness of the United States gold coins, and in subdivisions as low as 25 cents. They were not made in imitation of the United States coin and were not legal tender, but they were worth as much, and passed as currency everywhere, as the gold coins of the United States.

When the branch mint was established the government did that for the public convenience which private parties before had done. This incident shows that while the stamp of the government, and legal tender enactments are necessary, to make legal tender money, it requires neither the government stamp nor statutes to make a convenient medium of exchange when that medium possesses the necessary intrinsic value, while, on the other hand, the depreciation of the legal tender notes during the war shows that neither the government stamp nor legislative enactments making a currency legal tender can always make good money. Neither the government stamp nor their legal tender qualities gave the legal tender notes the value they did possess as a medium of exchange, but this was imparted to them by the promise of the government to redeem them in money, and when the day of payment was fixed and provision was made for their payment they became good for their face, because they were convertible into gold at par.

If private parties were to coin silver bullion into coin of the weight and fineness of the standard silver dollars, such coin would be worth no more than its market value as bullion and would not circulate anywhere as a medium of exchange.

The silver rupee of India, the Mexican dollar, and the silver coins of Chin, and of every other country having

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free coinage of silver, are worth no more even in the countries where they are coined than the value of the silver they contain. The reason that the standard silver dollar of the United States is worth 100 cents in the United States and even in Mexico, although it contains less silver than the Mexican dollar, is because the United States has put the standard silver dollar into circulation, virtually saying this coin, though intrinsically worth only what the silver it contains is worth as bullion in the markets of the world, is issued upon the pledge of the government that it shall be accepted as the equivalent of a gold dollar in payment of all government dues.

If congress were to provide that all public dues should be paid in gold, and substitute no provision for the redemption of silver currency in gold, the standard silver dollar would become immediately worth less in the United States and everywhere than the Mexican silver dollar.

By the free coinage of silver it is proposed that anyone shall be permitted to take to the mints of the United States 371 1/4 grains of pure silver, now worth, say, 60 cents, and receive for it a standard silver dollar, which is to be a legal tender in payment for private debts at its face and receivable as the equivalent of a gold dollar for public dues, or, as provided in the Stewart bill of last congress, which passed the senate, receive for his 60 cents' worth of silver bullion a treasury note which is a legal tender in payment of private debts and receivable in payment of public dues at its face. The whole object of the Stewart bill was to make the government the purchaser of all silver bullion offered at the mints at the rate of 100 cents for 60 cents' worth of bullion.

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If there are now premonitions of the depreciation of the silver dollar when it is coined only by the government, and its coinage is limited, and its cost to the government is only its intrinsic value, what would happen if the mints were thrown open for the coinage of silver on private account and private parties presenting the bullion to the mints were to receive a profit equal to the difference between the value of the bullion offered and the face value of the coin or treasury notes received in exchange for it and the government were to lose an amount equal to the profit of individuals?

It seems impossible that anyone should suppose for a moment that the silver dollar or treasury notes received in exchange, for silver bullion under such a law could be maintained equal to a gold dollar. It could not be. Before the first dollar under a free coinage law could be coined, the silver dollar could be worth no more than the value of the bullion it contained.

The merits or demerits of any measure for the use of silver as money to-day must be determined by existing conditions. The question whether previous financial legislation has been wise or unwise is immaterial. The ratio of the value of silver to gold to-day, and not the ratio in 1873, is the important matter for consideration. Since 1873 silver has depreciated in value about 40 per cent. The product of silver increased from 63,000,000 ounces in 1873 to 140,000,000 ounces in 1891. The coinage of silver has been discontinued for many years by the principal countries of Europe. Many persons believe that with free coinage of silver we would be flooded with the world's silver.

The stock of full legal tender silver coin in the principal countries of Europe approximates $1,100,000,000,

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of which $430,000,000 are stored in the vaults of five banks, and could be thrown upon our markets without delay. I have never feared that free coinage of silver in the United States would cause the world's silver to be dumped upon us, because I have never believed that with free coinage the silver dollar would possess any greater value than the bullion it contained.

Of course, if under free coinage the silver dollar could be maintained the equivalent in value of a gold dollar we would speedily get all the silver of the world, and citizens of the United States and subjects of foreign countries and foreign governments themselves would undoubtedly avail themselves of the privilege of presenting at our mints 60 cents' worth of silver, receiving for it a legal tender note, and converting that into gold. The United States would become the purchaser of all the silver in the world — bullion, coin, and old silverware — paying a dollar in gold for 60 cents' worth.

But it is absurd to suppose that if everyone was permitted to carry silver bullion to the mints to be coined there would be any alchemy in the process that would double the value of silver bullion. It is as absolutely certain as anything can be that under free coinage the value of the silver dollar would depreciate until it was worth no more as money than the value of the bullion contained in it. As soon as this occurred, the profits to silver owners in exchanging silver bullion for silver coin would cease and there would be no longer any inducer want to take silver bullion to the mint to be coined. Silver, like every product of human labor, would be sold in the markets for what it would bring for use in the arts or for money.

The amount of silver coined under free coinage

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would be variable, and would depend upon a variety of circumstances. But little over eight million silver dollars were coined from the establishment of the mint until 1873, and it is not likely any great amount would now be coined under free coinage. With free coinage of silver, silver would be the standard for all our business transactions. Our $700,000,000 of gold would be withdrawn from circulation; the circulating medium would be greatly contracted, and the products of industry greatly diminished. Free coinage would not increase the price in gold of any commodity. The price of everything we import would still necessarily be paid in gold. If more silver dollars were received by the producer for his products, more silver dollars would be required to purchase everything which he consumes.

For instance, if the farmer should receive $1 in silver for a bushel of wheat, that silver dollar would go no further than 60 cents in gold or so much gold as in the world's markets would buy a silver dollar. The value of property measured in silver would be at once advanced to offset the depreciation in the standard of value. The last thing to be advanced would be the price of labor. Although the price of everything consumed by the laborer would be nearly doubled in value, it would be a long time, and after many a struggle, before the laborer would succeed in getting two silver dollars in lieu of the one gold dollar he now receives for his labor.

All producers and laborers would lose by the change in our standard of value, and only bankers, brokers, money — changers, and middlemen would profit by it. All salaries and pensions would be paid in silver and all appropriations of the government expanded in

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silver. The disturbance of our financial condition which would result from adopting a silver standard would produce great financial stringency, force the immediate collection of debts, increase the rate of interest, demoralize business, throw labor out of employment, impair the credit of the government, bring home for collection our State, municipal, and corporation bonds held abroad, impair confidence, bring upon us ruin and bankruptcy.

If existing debts were paid in depreciated silver it would be robbing the creditor, because they have all been contracted with reference, to the present standard, and 95 per cent. of them since the great depreciation in silver.

India, one of the countries until recently having free coinage of silver or coining silver on private account, has hitherto been a great consumer of silver bullion for ornaments and coinage, and has been pointed to by the advocates of free coinage as an example of prosperity with free coinage of silver. The amount coined has been large, but not uniform, some years being a hundred per cent, more than others. The following table shows the amount, expressed in dollars, of silver annually minted during the period of sixteen years, and shows the consumption of silver in India for coin:

1875 $23,830,686
1876 12,410,636
1877 30,518,415
1878 78,741,556
1879 28,122,004
1880 40,002,173
1881 20,682,625
1882 29,386,322
1883 24,927,400
1884 17,353,531
1885 548,487,114
1886 27,121,414
1887 44,142,013
1888 36,297,132
1889 37,927,814
1890 57,931,323
1891 32,670,498
Total 17 years... 590,562,059
Annual average 34,150,744

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The amount coined in 1890 is estimated at $30,000,000. The silver rupee of India contains 186 grains of pure silver; the half, quarter, and eighth rupees are of corresponding weights. The coinage of both metals until the recent action of the India government was practically free, provided the amount presented was equal to 50 tolos of gold or a thousand tolos in silver. There was a duty of 1 per cent, upon all gold and silver brought to the mints. Gold was not coined in any considerable amount, and the business of the country was conducted upon a silver standard. The stoppage of the coinage of silver on private account in India is not an abandonment of the silver standard. Silver is still the standard, and will continue to be whether the government coins silver on its own account or not.

It is said this action of the government of India is intended to have the effect to prevent the further decline of the value of the rupee, but upon what this expectation is based is not stated. The value of the rupee will be fixed hereafter, as heretofore, by its value as silver bullion in the London Market. It will still be measured in all London and in all foreign transactions by gold, and the discontinuance of free coinage by throwing the silver bullion heretofore coined in India on private account on the world's markets has depreciated, and will continue to depreciate, the intrinsic value of the rupee.

The claim sometimes made that silver has not fallen in value in India, and that the silver rupee in the interior of India will purchase as much wheat or as much of the other products of labor is absurd; it is Incredible. The price of wheat in London is fixed in gold by the world's supply and demand. It is impossible

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that there could be to the exporter of wheat from India a profit equal to the fall in the price of silver since 1873. Such a state of things could not exist ten days in any country under the sun. Competition among English wheat-buyers would speedily raise the price of wheat in India to an approximation of its gold price in London.

I am informed that the price of wheat is fixed in the export cities of India by the price in London and the cost of transportation, insurance, etc. The statement is undoubtedly an invention intended to make farmers believe that in some way the price of their commodities is affected by the depression of silver. Not every country which uses silver as money has a silver standard. In the United States we have about $500,000,000 of silver currency, but our standard is gold, and the difference between our gold and the intrinsic value of our silver currency rests upon the obligation of the government to redeem it in gold.

England, although having a gold standard since 1816, has about $100,000,000 of silver, subsidiary coin used in small transactions. France has $700,000,006 of silver and $900,000,000 of gold, but has a gold standard, and her silver passes at par upon the faith of its redemption, and an actual redemption in gold, and this is the case in every country which maintains in circulation silver upon parity with gold. In all these countries silver is redeemable in some manner in gold; free coinage of silver has been discontinued, and the stock of silver is not increased. On the contrary, in every country where there is free coinage of silver the purchasing power of silver coin is precisely the market value of the bullion it contains.

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"There is persistent and gross misrepresentation concerning the manner in which the act of 1873 discontinuing the free coinage of the silver dollar was enacted. The recent article by ex-Secretary Boutwell in the Boston Herald giving the facts concerning the manner in which the law of 1873 was passed should set the question at rest, but it will not. I quote the following from ex-Secretary Boutwell's article:

"The act known as the act for the demonetization of silver was passed in 1873, and upon a distinct recommendation made in my annual report to congress in December, 1872. The statement so often made and so generally believed, that the provision was introduced and passed surreptitiously, was without any foundation, as will appear from quotations from my report, which I shall incorporate in this article.

"The country had due and full notice of the policy proposed, and, if the friends of a silver currency were ignorant of the movement, the fault was their own. Not only was there no concealment, but, on the other hand, the change proposed was announced early and definitely. For myself, I can say that I never hesitated to avow the authorship of the measure, and I have been ready always to assign the reasons by which I was influenced.

"In 1860 the American silver dollar was more valuable than the gold dollar, according to the statute ratio between the metals, in the sum of about 4 cents. From that time onward the difference in favor of silver diminished gradually, and in 1872 the difference had disappeared.

"At that time the power drill had been invented and its value established. The use of dynamite was well understood, and the number and richness of the silver mines in the Rocky Mountains justified the conclusion that silver would deteriorate in value with each succeeding year.

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"On this theory of the then future my policy was based. We were then on a gold basis as far as the use of the metals had a part in our financial affairs; we were a principal producer of gold, and the most important steps had been taken in the work of bringing the treasury note to the standard of gold coin.

"In the same report I advised the coinage of a silver dollar, known as the trade dollar, in value superior to the Mexican dollar, which was then in use almost exclusively in the commerce of China and the East Indies. This coin, which was not current in the United States, became the means of a very considerable export of silver to the East.

"These two measures were designed to maintain a gold basis, in competition with England, our principal rival, and to substitute American silver for Mexican silver in our dealings with the countries using that metal."

The operation of the Bland act and the Sherman law was recently stated in an authorized interview with Secretary Carlisle. He said:

"The operations of the United States Mint commenced in 1792, and from that time to 1873, a period of eighty-one years, the total amount of silver dollars coined was $8,045,838. In 1873 the coinage was stopped by act of Congress, but in 1878 it was resumed under the so-called Bland-Allison act, by the terms of which the Secretary of the Treasury was directed to purchase and coin into standard silver dollars of 412 1/2 grains each, not less than $2,000,000 worth nor more than $4,000,000 worth of silver bullion each month, and between the date of the act and the 14th of July, 1890, a period of twelve years, there was coined $378,166,793.

"In addition to this there has been coined from trade dollars $5,088,472, and from the seignior age of bullion purchased and coined under the act July 14, 1890, the sum of $6,641,109, making in the aggregate

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$389,886,374 in full legal-tender silver money issued by the government since 1878. Of this amount only $58,016,000 was in actual circulation on the first day of the present month, the remainder being held in the treasury as part of the assets of the government, or being represented by outstanding certificates.

"The act of July 14, 1890, requires the Secretary of the Treasury to purchase 4,500,000 fine ounces of silver bullion each month, and it provided that he should continue the coinage of silver dollars, at the rate of $2,000,000 per month, till the 1st day of July, 1891, and under this act there has been coined $29,408,461, which makes a total coinage of silver dollars under all acts since 1878, $419,294,835, or more than fifty times as much as was coined during a previous period of eighty-one years. In addition to the silver bullion purchased by the government since 1878 and coined as above stated, the Secretary of the Treasury has purchased under the act of July 14, 1890, and now holds in the vaults of the treasury uncoined, 124,292,532 fine ounces of silver bullion, which cost the people of the United States $114,229,920, and is worth today at the market price of silver $103,411,386, thus showing a loss of $10,888,530.

"By the terms of the act the Secretary was required to pay for all silver bullion purchased by the issue of new United States Treasury notes, payable in coin, and it provided that upon demand of the holder of any such notes they should be redeemable in gold or silver coin, at the discretion of the Secretary, it being in the language of the act the established policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law. In the execution of this policy of Congress it is the duty of the Secretary when the necessity arises to exercise all the powers conferred upon him by law in order to keep the government in a condition to redeem its obligations in such coin as may be demanded, and to prevent the depreciation of either as compared with the other.

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"The records of the treasury department show that during the eleven months beginning May 31, 1892, and ending May 1, 1893, the coin treasury notes issued for the purchase of silver bullion under the act of July 14, 1890, amounted to $49,861,184, and that during the same period the amount of such notes paid in gold was $47,745,173. It thus appears that all silver bullion purchased during that time, except $2,216,011 worth, was paid for in gold, while the bullion itself is stored in the vaults of the treasury, and can neither be sold nor used for the payment of any kind of obligation. How long the government shall thus be compelled to purchase silver bullion and increase the public debt by issuing coin obligations in payment for it is a question that congress alone can answer. It is evident that if the policy is continued and the Secretary of the Treasury be compelled to issue bonds or otherwise increase the interest-bearing debt, it will be done for the purpose of procuring gold with which to pay for silver bullion purchased under the act referred to."

There is to be added to our stock of silver bullion the purchases made since this interview was had. The intrinsic value of the silver dollar is to-day $0.56; present value of an ounce of silver, $0.726. Under the Bland and Sherman acts we have purchased 460,000,000 ounces of silver at a loss, at the present prices of silver bullion, of $134,957,000.

One of the causes that sends gold abroad is a balance of trade against us. Gold is the standard of all the commercial countries of Europe, and all our imports from there must be paid for in gold.

A tariff that causes what we consume to be made at home tends to increase our exports and diminish our imports, and to bring gold to us instead of sending it out of the country. Then American travelers must

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provide gold for their expenses in Europe, and they carry a great deal of gold abroad annually, but the principal cause of the drain of gold from this country is the fact that we are debtors to the people of foreign countries, and when they demand payment we must send the gold abroad to liquidate our indebtedness.

During our recent financial disturbances there was a large exportation of gold. The stock of free gold in the treasury, that is, the amount of gold over and above the $100,000,000 reserved for the redemption of legal treasury notes, was exhausted and the reserve was encroached upon. This condition, in my judgment, was largely caused by the fear of our European creditors that we would go to the silver standard in the United States, and the consequent disposition on their part to recall their investments in this country. If we should adopt free coinage of silver and go to a silver basis, whenever an American citizen should go abroad he would be compelled to exchange the silver currency of the United States for gold, paying a premium equal to the difference between the intrinsic value of the two metals, and the same thing would be true concerning the payment of any balance of trade against us, and of the payment of our foreign creditors.

There is a great deal of absurd talk about the friends of silver and the enemies of silver. I am neither a friend of gold nor an enemy of silver. I am in favor of the use of the two metals as money whenever possible. The advocates of free coinage denounce those who oppose free coinage of silver as the enemies of silver, and as gold bugs, etc. Nothing could be more unjust. No legislation favored by those who believe that the gold standard should be maintained

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is for the purpose of discriminating against either metal.

I have no doubt but that the repeal of the Sherman law, the cessation of the purchase of silver by the government, and the throwing of the 4,500,000 ounces of silver monthly now purchased by the United States upon the markets of the world, would still further depreciate the price of silver; but the Sherman law has failed to keep up the price of silver bullion, and threatens under existing conditions, for which the law is not responsible, to force us to a silver standard.

I do not believe that the free coinage of silver would maintain the price of silver bullion or benefit silver producers, while it would bring disaster upon the country I claim to have been a better friend to the producers of silver than those who have favored free coinage. I have never thought that the purchase of silver by the government and coining it into silver standard dollars required to be received at their face for public and private dues, or storing it in the vaults of the treasury, was in accordance with sound financial principles; in other words, that such a course could be continued indefinitely, and the parity between the gold and silver dollar be maintained.

I believe, however, with the continuance in power of the Republican party, the Sherman law might have continued in force for some time to come without any disastrous effects. The repeal of the Sherman law without any substitute by throwing upon the markets of the world monthly 4,500,000 ounces of silver bullion now purchased monthly by the government, should the present production of silver continue, will necessarily greatly depreciate the price of silver bullion.

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It will stop the increase of our circulating medium by the issue of treasury notes. It will not, in my judgment, restore confidence or greatly improve the business situation. I fear, on the contrary, that it will make it worse. It may, however, prevent what is threatened, viz, the parting company of the silver and gold dollar, and enable the government to float its load of silver currency upon our present stock of gold. This will only be the case, however, by the repeal of the law unaccompanied by any measure calculated to shake confidence in the financial ability of the government, and by such a decided action of congress as to make it certain that there is no further danger of free coinage of silver, and. that it is the policy of the government to maintain the gold standard, and to redeem and retire the silver currency by substituting treasury notes redeemable in gold on presentation, or to maintain our present circulation of silver currency at par with gold under the present or additional provisions for its redemption in gold.

Some persons talk about the redemption of our silver currency in gold as if it were, like our legal tender currency, redeemable on presentation. Others ignore entirely the provision which has been made by law for the redemption of silver currency in gold, and point to the fact that standard silver dollars pass current at their face in this country as evidence that free coinage of silver would make the legal ratio in the United States between gold and silver 16 to 1, the actual ratio of the intrinsic value of the two metals.

I do not believe that the Secretary of the Treasury is authorized under the Sherman act to redeem the treasury notes issued under it in gold when the gold reserve

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is encroached upon, or to sell bonds to obtain gold to redeem them. They should, under the law, have been paid in silver coin when there was no longer gold with which to redeem them without encroaching upon the gold reserve, but the course pursued by the Secretary of the Treasury no doubt helped to maintain the parity between gold and silver.

In several of the States and Territories one of the principal industries is silver mining. The owners of silver mines and those engaged in dependent industries are interested in having a market for the products of the mines at prices for silver bullion which will make mining profitable and the mining regions prosperous. Their reasonable demands upon the general government, in this regard, have heretofore been more than complied with.

Under the Bland act the government became a forced purchaser of silver to the value of $2,000,000 per month, and under the Sherman act of 4,500,000 ounces of silver bullion per month, all in a vain endeavor to prevent the further depression of silver bullion. I greatly sympathize with these people, and if some one can devise a scheme by which silver mining can be protected without injustice to other interests quite as deserving and without danger to our finances and our credit, I should be very glad to support it.

It is evident that the Sherman law, even if it could be safely continued, will not be sufficient to keep up the price of silver bullion, and owing to its depreciation, silver mines are already closing down. Undoubtedly the law has helped to sustain the price of silver by withdrawing from the world's market so large an amount of silver bullion.

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While I have reluctantly concluded, notwithstanding the disastrous effect of the repeal on the price of silver bullion and the silver-mining industry, that the Sherman law should be repealed to prevent greater disaster, I am not willing to admit that that law is responsible for existing financial and business conditions, and I do not expect its repeal will greatly relieve us from such conditions. The proposition to repeal the provision of the Sherman law, authorizing the purchase of silver bullion, to receive my support, must not be connected with any other measure which would be equally or more injurious to the credit of the government and the finances of the country, such as the removal of the tax upon State-bank issues or free coinage of silver.

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Chapter III. — By Senator George G. Vest of Missouri.

To quote from the Republican platform adopted at Minneapolis, June, 1892: "The American people, from tradition and interest, favor bimetallism, and the Republican party demands the use of both gold and silver as standard money, with restrictions and under such provisions, to be determined by legislation, as will secure the maintenance of the parity of values of the two metals, so that the purchasing and debt-paying power of the dollar, whether of silver, gold, or paper, shall be at all times equal. The interests of the producers of the country, its farmers and its workingmen, demand that every dollar, paper or coin, issued by the government, shall be as good as any other. We commend the wise and patriotic steps already taken by our government to secure an international conference to adopt such measures as will insure a parity of value between gold and silver for use as money throughout the world."

The Democratic convention at Chicago, June, 1892; "We hold to the use of both gold and silver as the standard money of the country, and to the coinage of both gold and silver without discriminating against either metal or charge for mintage, but the dollar unit of coinage of both metals must be of equal intrinsic and exchangeable value, or be adjusted through international agreement, or by such safeguards of legislation as shall insure the maintenance of the parity of the two metals, and the equal power of every dollar at all times in the markets, and in payment of debt; and we demand that all paper currency shall be kept at par with and redeemable in such coin. We insist upon this

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policy as especially necessary for the protection of the farmers and laboring classes, the first and most defenseless victims of unstable money and a fluctuating currency."

I assume that after reading the platforms of the two great political organizations of the country, no one can intimate that there is anything partisan in the joint resolution which I have offered. To vote against this resolution, whether that vote come from one side of the Chamber or the other, is to declare to the people of the United States what is believed already by many of them, that the platforms of political parties are mere traps to catch votes, without sincerity and without honesty. It is time that the people should know whether politics is a juggle and fraud, or whether, when the great political parties which seek to control the destinies of a free people meet in council and make solemn declaration of policy and principle, they are worthy of confidence.

We are told that the repeal of the so-called Sherman act, or the purchasing clause of it, is all that is necessary at the present conjuncture, and that the clouds will be immediately lifted from the business and financial horizon, and the sun of prosperity again beam upon every portion of our land.

I was never the friend of the so-called Sherman act. I voted against it, spoke against it, denounced it as a makeshift, and declared it to be the worst measure for silver and for bimetallism that could be invented and placed upon the statute book. I am in no sense responsible for its enactment. To-day its malign and distorted features look out upon a land staggering and reeling upon the verge of bankruptcy. It's putative

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fathers have bastardized it, and are falling over each other now in a vigorous attempt to prove that they never favored it, and are not responsible for its existence.

In the report of the Herschell committee, appointed by the British House of Commons to investigate the question of mintage in India, the principal reason given for stopping the coinage of silver by private persons in the Indian mints is that the Sherman act might at any time precipitate upon the world a mass of silver that would probably cause a decline of its value to such an extent as to make free coinage in India absolutely ruinous. So this measure, introduced here ostensibly in the interest of silver, has come home to roost like a young chicken as a curse to silver. That act to-day is like a houseless and homeless legislative dog. There is no one to give it even a bone, and it can not find a kennel in which to hide its dishonored head.

If the issue presented now to the congress of the United States and the American people was simply the repeal of the Sherman act, I take it there would be very little debate and singular unanimity in our action; but the issue has gone beyond the repeal of the Sherman act. It is no longer a question of eliminating that statute, but it has grown into a question so grave and momentous that the congress of the United States must of necessity earnestly consider it before going any further in the direction which has been indicated to us.

The question now before congress and the American people is one of bimetallism. Every intelligent man knows it. There is no citizen of the United States today, who has given any attention to public affairs, who

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has read the message of the President of the United States; who has seen the utterances of those who enjoy his especial confidence, who does not know that we stand now face to face with the great question of bimetallism or a single gold standard.

The time for makeshifts and evasions and subterfuges has passed. No man in this country is so ignorant that he does not know that under the circumstances and with the declarations made by its advocates, the unconditional repeal of the Sherman act stamps forever upon our financial policy the single gold standard. Not one silver dollar will ever be coined in this country again if we permit the purchasing clause of the Sherman act to be repealed without a guarantee as solemn as the great necessities of the people, that silver shall continue to exist in the United States as a money metal.

I have been known as a steadfast and unflinching friend of the president. I defended him when assailed in the canvass for nomination; I defended him in the campaign, and in every speech I made to the people of Missouri I declared that Mr. Cleveland, like myself, was a bimetallist, and that we only differed in regard to the ratio at which the coinage of silver should be had. I had the right to make that statement, because he had accepted the nomination upon a platform that pledged the Democratic party to bimetallism. It was as well known that the Democratic party stood upon the doctrine of bimetallism as that it met in Chicago and nominated Grover Cleveland for president of the United States.

I do not undertake to say now that the president is opposed to bimetallism. I do not undertake to say

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that he would not give his executive sanction to a measure that coined silver at the commercial ratio with gold, but I do undertake to say that his message is most significant from what it fails to say. I undertake to say now, with the greatest respect for him and with not the slightest doubt as to the honesty of his intentions, when he fails in this great state paper at such a contingency to say one word in regard to bimetallism, it certainly means that he considers the free coinage of silver at any ratio so impracticable that it does not need executive notice. If a bimetallist at all, it would be an insult to the intelligence of the president to believe that under the circumstances he would have deliberately sent this paper to us and to the world without having indicated in some way that he was willing to bring about and maintain bimetallism on some terms in the United States.

When during the last congress it was proposed to pass a free coinage bill at the ratio of 16 to 1, although I had repeatedly voted for such a bill, although I had introduced a bill which passed the senate and went to the house of representatives identical in its provisions with that which was offered here, I moved to postpone the consideration of that measure until after the November election because our party had met and declared its platform and nominated its candidate, and I believed that in simple justice and in the spirit of fair play, Mr . Cleveland should be permitted to go before the American people upon our platform and that the silver question, as it had been disposed of in that platform, should become an issue and be submitted to the American people; but I did not mean to indicate for an instant that in voting for the postponement of the question at that

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time I gave up the great doctrine of bimetallism as established by the traditions and policies of our people and enshrined in their hearts to-day. In that session of congress I took occasion in discussing the financial question to make the declaration, by which I stand now:

"I have supported the free coinage of silver principally upon the ground that I oppose all class legislation. I have never been (perhaps it has been my obtuseness) able to see the justice of permitting a man who owns a gold mine to go to the mints, the common property of the people, and coin his gold without expense, and deny the same privilege to the owner of a silver mine, who is an equal owner in the mints of this country, and who possesses a product which under the constitution is a money metal. If it is proposed now, and we are rapidly nearing that issue, to strike down silver as a money metal in this country, I distinctly state that I shall be found in favor of bimetallism as established by the constitution of the United States and by the traditions of the American people."

I am anxious to avoid the slightest misstatement or to make any unjust criticism upon the present administration of my own party, but I do not feel myself at liberty, in view of the responsibilities imposed upon me, to refrain from stating emphatically my conviction that we must determine now the question of bimetallism or the gold standard.

In addition to what I have said in regard to his message, what intelligent man believes that, without the knowledge that the sentiments expressed therein were in consonance with the opinions of the chief executive, the head of the great banking department of this government would have come out in a magazine

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article, which I have before me, declaring for the single gold standard and announcing to the American people that silver was doomed and must cease to be a money metal in the United States?

I have the right as a public man and as a private citizen to assume that when an officer of this government, in control of its banks, near to the secretary of the treasury and in daily intercourse with him, appointed by the president of the United States and confirmed by the senate when the president himself knew that there was a difference of opinion in regard to that appointment, and that the Democratic party by a large majority and many Republicans deferred to his opinion in voting for that confirmation — I say that I have a right to assume that with these relations the comptroller of the currency does not antagonize the opinion of the president upon this great issue.

I do not conceal from myself the desperate character of the contest which has come upon us. I recognize the fact that the money power of the civilized world through its authorized exponents is against silver to-day as a standard metal. I do not attempt to delude myself into the opinion or impression that we are not entering upon a doubtful conflict. It has been the history of finance in all ages of the world that centralization and consolidation managed in one way or another to impress itself upon the destinies of all peoples. It is known as well as the names of the different countries upon the map of the globe that a few men, not exceeding perhaps one dozen, can to-day influence the finances of the whole world and can make and unmake even kings and emperors, obliterate frontiers, and change the destinies of the human race.

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England in 1815 overthrew Napoleon I., and to do this the younger Pitt plunged the English people into a vortex, as was supposed then by intelligent men, of absolute bankruptcy. Scarcely had the battle smoke cleared from the field of Waterloo and the shattered columns of the old guard had been broken in flight, when England, in 1816, went to the gold standard. An enormous debt had been created. To-day the consols of Great Britain govern the empire; all investment, all trust money, all the financial interests of the country are represented by the consols, and the blood of the body politic ebbs and flows with the rise and fall of its consolidated debt.

England went to the gold basis because deeply indebted to the Rothschilds and others for money which had been employed against the great emperor. In order to float that debt, in order to consolidate it, in order to keep in hand the finances of that country, a great commercial people, dependent not upon agriculture, but upon trade and commerce and finance, it became absolutely necessary that they should go to the gold standard in order to please the money-changers of the world.

The policy of the English Empire, aggressive and distinct in all its features, can be easily understood by the ordinary student of history, not to say of finance. It is the policy of Great Britain to centralize. Her vast colonial system consists of tributaries that pour their wealth into the great lake of England. The home country is first to be considered, and the colonies held by British arms are made tributary to the commercial and financial interests of the English people proper at home.

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This is the policy of the English government. All its colonies are simply provinces, and the great salient and objective point of all its legislation and policy is to concentrate wealth and power in the home government and with the home people. Is it any wonder, then, that England is to-day and has been since 1816 for the gold standard? It enables her to command the commerce of the world because gold is the money of commerce Mr. Jefferson declared as the result of his wonderful researches that the money of the American people should be gold and silver. Gold, he said, is the money of commerce, foreign commerce, intercourse between nations and bankers.

The fact that a large value can be put in a small compass, the facility of transportation, the ease of storage, all give to gold attributes which no other metal can possibly have; but is it to be said that silver has not its uses? Silver has always been the money of the people, not of the bankers and capitalists and usurers, but of the common, plain people, as Lincoln termed them, who, in their domestic barter and everyday business at home, do not need this red despot of gold, but silver, with which they and their fathers have always been familiar.

We are told that overproduction is the cause of the fall of silver in price, that it has not been legislation, but that natural causes, the law of supply and demand have brought silver to its present value in the markets of the world.

Let me ask my friends, the monometallists, one question. Was there an overproduction of silver in 1873, when it was demonetized in this country by striking the silver dollar from the coinage of the United States?

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Had there been overcoinage of silver so as to glut the markets and bring down its price under natural rules? We have the authority of the distinguished senator from Ohio [Mr. Sherman], of the secretary of the treasury to-day, Mr. Carlisle, and of the reports of the treasury department that but eight million of the standard dollars had been coined in the United States from 1792 to 1873: we put but $8,000,000 in circulation, and not so many, because the reports of the director of the mint from year to year show that the coin of the country goes into industrial pursuits and is used by the jewelers and artificers in precious metals, and a portion of that $8,000,000 must have been so used. Yet with this inconsiderable amount coined by this government from 1792 to 1873, it was deemed necessary in the latter year to strike out the silver dollar from the coinage of the United States.

It makes no difference who demonetized silver in 1873. We have had many explanations. The most plausible was that the standard dollar as it then existed was inconvenient. No other reason which has ever been given, in my opinion, afforded one shadow of excuse for that action.

My point made here now to be answered is, if overproduction and overcoinage of silver has caused its present depreciated value, how did the coinage of 8,000,000 standard dollars in 1873 justify or cause the action of congress at that time?

The two precious metals have fluctuated, as they necessarily must, in all ages of the world; first silver being produced in excess of gold and then gold in excess of silver. How is it possible that it could be otherwise? What intelligent man for a moment could

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advance the idea that two metals, dependent upon the quantity discovered in the bowels of the earth, should be mathematically or logically equal at all times in quantity or ratio?

After Cortez had conquered Mexico and had sent back to Spain the gold which he had taken from Montezuma and his successors, and from the provinces of Mexico, even robbing their temple in order to satisfy Spanish greed, all this treasure which we are accustomed to look upon as fabulous, but which in reality amounted to about $30,000,000 a year, failed to affect the markets of the precious metals in the Old World. It was not until a peasant who was hearding a flock of llamas at Potosi, in upper Peru, happened to discover silver mine of fabulous richness that the price of the two metals was seriously disturbed in the markets of Europe. For many years, as shown by this table, gold was produced in the most insignificant amounts, while silver was produced twenty, thirty, and thirty-two times in excess annually of the production of gold; yet the price of silver was not affected and it maintained its place as a money metal.

In order to show that my statement is absolutely correct, I have taken the trouble to make a calculation, based upon the Soetbeer table. From 1833 to 1840 there was produced thirty-two times as much silver as gold in the world; from 1841 to 1850, fifteen times as much; from 1851 to 1855, five times as much; from 1855 to 1860, four times as much; from 1861 to 1865, six times as much; from 1866 to 1871, three times as much; from 1871 to 1875, twelve times as much; from 1876 to 1880, sixteen times as much; from 1881 to 1885, twenty times as much; and from

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1886 to 1892, from eighteen to twenty-five times as much.

Now, I assert that these tables show, if they are worth the paper upon which they are printed, that the relative proportion of silver to gold has never been as great as it was in the eras I have named here, from 1833 to 1844 and from 1844 to 1850.

We hear upon every side the assertion that the production of silver which amounted to $74,000,000, according to the report of the director of the mint, in 1892 in the United States has caused its decline. There were $33,000,000 of gold produced in this country for 1892, the production of silver being about 2 to 1, and it is said that this accounts for the attack upon silver as a money metal and the attempt now to destroy it throughout the world. From 1832 to 1840, thirty-two times as much of silver was produced as of gold. If it be a logical proposition that the overproduction now has destroyed silver, why was it then not blotted out from the face of the earth as a medium of exchange and of standard value?

I call attention to the price of silver, which it is said is affected by overproduction. From 1833 to 1840, when there was thirty-two times as much silver as gold produced in the world, silver was worth in this country $1.29 and $1.32 an ounce. From 1841 to 1850, when there was fifteen times as much silver as gold produced, silver was still worth $1.29 to $1.31 an ounce. I quote from the report of the director of the mint. From 1851 to 1855, when there were five times as much silver produced as gold, silver sold in the United States from $1.32 to $1.35 an ounce, being an increase of from 3 to 5 cents on the ounce. From 1855 to 1860, when there

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were four times as much produced, it sold from $1.34 to $1.36 an ounce.

The decrease in the production of silver, as it would appear from this table, in 1850-'51, was not really a decrease in the mining production, but there was a vast increase from 1850 to 1855 in the production of gold on account of its discovery in California and Australia and the reworking of the mines in Siberia. It is absolutely impossible under the rules of logic, if our friends be correct that overproduction is the cause of the present condition of silver, that this enormous overproduction should have existed in the eras I have named and yet not have brought about the same result.

I have said, that it was impossible that these metals should remain logically and mathematically at the same ratio. Many circumstances and facts affect this ratio. Who will undertake to say now, unless he has the gift of prophecy, when the gold mines will cease to produce? There have been times in history — and we have them upon such proof that no doubt can exist — when the production of gold absolutely ceased, at other times when the production of silver absolutely ceased. Is it wise statesmanship for the representatives of the people to put themselves absolutely in the power of any one metal uncertain and precarious in the supply? Suppose to-morrow the gold production of this country should fall off one-half and of the world one-third, what would be the result? The United States, if it had eliminated silver, would be found absolutely at the commercial mercy of the vast hoards of gold which for war purposes have been piled up in the treasuries of continental nations and of England. Should we not rather rely upon both metals in whose production nature

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preserves an equilibrium? I can produce authority much higher than mine in regard to the precarious nature of these metals. The present Secretary of the Treasury said in 1878, when discussing the question upon which I have the honor now to address the senate:

"I know that the world's stock of precious metals is none too large, and I see no reason to apprehend that it will ever become so.

"Mankind will be fortunate indeed if the annual production of gold and silver coin shall keep pace with the annual increase of population, commerce, and industry. According to my view of the subject, the conspiracy which seems to have been formed here and in Europe to destroy by legislation and otherwise from three-sevenths to one-half of the metallic money of the world is the most gigantic crime of this or any other age. The consummation of such a scheme would ultimately entail more misery upon the human race than all the wars, pestilence, and famine that ever occurred in the history of the world. The absolute and instantaneous destruction of half the entire movable property of the world, including houses, ships, railroads, and all other appliances for carrying on commerce, while it would be felt more sensibly at the moment, would not produce anything like the prolonged distress and disorganization of society that must inevitably result from the permanent annihilation of one-half of the metallic money of the world."

Why, for sane men in a country that stands upon the bed rock of independence to put themselves in the hands of the monarchies of Europe, in the hands of the gold manipulators, who at any time can fix the price of the property of the world if they see proper to do so, is not only a crime, as the Secretary of the Treasury has declared

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it, but a crime so monstrous that no punishment could be adequately inflicted for its commission. Thomas Jefferson dreamed of an ideal republic, and what was it? He said:

"Let us found a government where there shall be no extremely rich men and no abjectly poor ones. Let us found a government upon the intelligence of the people and the equitable distribution of property. Let us make laws where there shall be no governmental partnership with favored classes. Let us protect all in life, liberty and property, and then say to every American citizen, with the gifts that God has given you, your brain and brawn and energy, work out your own fortunes under a just government and equal laws."

If Jefferson could to-day revisit the earth, or if the dead can take notice of the affairs of the living, what would he think of this country which he helped to establish and whose independence he put in letters of living fire upon the pages of history, if he should find sixty-seven million of freemen, with a continent for an inheritance, with the rain and sunshine and dew, the mountains and rivers, with almost illimitable resources, in the hands financially of a dozen men in New York, who make and unmake, and who can in an hour so hoard the currency of the whole country as to produce a money famine, and then exact from the people their own terms?

I desire to enter into no philosophical nor sentimental essay. I am an American, and I trust practical in the consideration of every question; but the genius of our institutions and of our people, the fundamental doctrines upon which we exist as a nation, the instinctive feeling of every true American, no matter of what

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political belief he may be, must be naturally against the policy that centralizes and consolidates the fearful power of money in the hands of the few against the many. For myself, I would give up every doctrine of my life and every feeling of my nature if I did not stand now to the last against legislation that would further extend this centralization.

But we are told that silver must be demonetized because it fluctuates in value; that gold is stable and silver is the changing child of caprice and circumstance. John Monteath Douglas, a business man in the city of London, who has unquestionably studied this question, says:

"Silver has really fluctuated much less than gold. Till December, 1888, and on to end of 1891, it continued to rise in value as compared with the average of commodities, just as gold did, but much less, and keeping a much closer and more uniform relation to the prices of commodities than gold did. See list of prices next page. The gold price of silver was ‘lower’ in 1888 and 1889 than it had been at any time within memory, but the gold prices of commodities were on the average lower still, as explained below in detail, so that silver had maintained its price, or rather risen in comparison with the average of commodities."

I can not resist saying parenthetically that the fallacy and the delusion of the argument made by the monometallists in regard to the fall of silver is based upon the idea, not of its purchase of commodities, but the value of silver in gold. All the statisticians and financiers of the world whose declarations are worth anything put the criterion as to the value of the precious metals upon their ability to purchase the necessaries

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of life. Any other criterion is false. When you can take so much silver and buy so much meat and so much bread, although gold may go up and silver still continues to buy the same quantity of meat and bread, it has not fallen. Silver, as this writer says, has not fluctuated under this great criterion of its power to purchase the necessaries of life, and the tables of the most eminent statisticians show it.

As a matter of course, it was absolutely impossible that these commodities and silver should be mathematically equal. That would be unnatural and impossible, but I make the statement here now and invite my friends the monometallists to disprove it, that the purchasing quality of silver has remained more stable than that of gold. Gold has fluctuated. Gold has gone up and gold has gone down, but silver has remained more nearly equal in its purchasing power from age to age, notwithstanding all the mutations of mining and of commerce, than has the gold metal.

As a matter of course, articles of necessity have fluctuated. It goes without saying that the failure of a crop and other vicissitudes, the law of supply and demand, which is invoked so often, will cause fluctuations in these articles. It would be just as absurd to say that they always remain the same at any standard as to say that gold and silver could always remain exactly equal. But the fact still remains that in the eras which are used by these statisticians the fluctuations in silver have not been so sudden or violent as the fluctuations in gold.

It is true that in the long period from 1803 to 1873 both silver and gold fluctuated in value, and it is true that during that period gold went to a premium of 1 1/2

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per cent. in France, and virtually went out of circulation, as is always the case; but it is also true, as shown by Chevalier, that with the exception of this era, which lasted but a few years, silver was the ruling metal in France. Silver was the standard of value really, although gold was also used. When the great Australian and Californian discoveries were made, gold poured into France and into Europe at such a rate that this whole book, Chevalier on Gold, is devoted to the discussion of the question how to make gold keep its parity with silver. The dread in Europe then was that gold would cease to be a money metal and that all the continental people would be relegated to the use of silver alone for all the purposes of exchange and as a standard.

Even if the monometallists could reach their elysium financially of a gold standard there would still be fluctuation in prices of commodities in this and every other country, and, as a matter of course, as gold increased in value, or, to speak more properly, as gold became scarcer prices would go down. Any discussion is imperfect, incorrect, and unsatisfactory that does not admit upon both sides what is known to the whole world, and must be always known to every intelligent human being, that if you increase the volume of money you put up prices, and if you decrease the volume of money you put them down.

I have seen the day in the vicissitudes of my life, when $20 in paper would not buy a loaf of bread, and a five-dollar gold piece would buy a house and lot. I want to read now, the statement of the rule, which is inflexible, as to the precious metals. I read from Chevalier, who is quoted approvingly as a great authority:

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"The effects of a rise or fall in the precious metals are displayed in a manner peculiar to themselves, owing to the attribute of money with which they are invested. When it is said that a commodity falls in value, it means that we must give a larger proportion of it than previously to procure in exchange the same quantity of any other article of commerce. The price of that article, whether it be iron, lead, corn, wine, or any other product, excepting the metal or metals of which money is made, falls accordingly; for the price of a thing is its value specially compared with those metals, or, to express differently the same idea, it is the number of monetary units which it is necessary to give in exchange for a certain weight or volume of another commodity. A diminution in the value of the metal from which money is essentially coined is shown differently in this respect, that its price remains the same; but then the price of all other commodities, without exception, rises if its value compared with itself has fallen, and falls if it has risen.

"I say that its price as measured by itself remains the same, since for this metal, specially and exclusively, the price is its value compared with itself. If, for example, the value of silver falls one-half as the monetary unit, the franc consists in France of four grains and a half of silver, a kilogram in weight of fine metal will still be worth 222 francs 22 cents, because one kilogram contains four grams and a half, 222 times and a small fraction; but in this case the price of lead, iron, wheat, wine, and all other commodities will be doubled, because, to obtain the same quantity of these articles, it is necessary to give double the quantity of silver."

There is the inflexible monetary rule. There is no sort of rhetoric or declamation that can do away with it. We had just as well confront this proposition now, and there is no escape from it. If for any cause (and I will leave the causes now to inject this remark) we

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strike down one-half the metallic basis of value in the world we double the burdens that are resting upon all who owe money; and we beyond computation almost, for no man can foresee the future, put down the price of commodities.

Mr. Horace White says in an article which I have before me that he hopes the day will come, and he wants to see it, when everything will be cheapened because it is to the interest of everybody that everything should be cheap. He disagrees with some of his own party, for it has been but a few years ago, in 1890, I believe, when we were told that the words "cheap" and "nasty" went together, and that cheap clothes made a cheap man. Now we are told by Mr. White that he wants to see the era come when commodities will be reduced in price, when the wheat-growers of the West instead of getting for their wheat delivered at a country depot 35 and 40 cents a bushel will receive 15 and 20 cents, when the mortgaged indebtedness of this country will be doubled, and the man who can to-day pay off his mortgage with a thousand bushels of wheat must add the labor, and the privation, and the mental anxiety necessary to raise 2,000 bushels in order to discharge the same indebtedness.

Now let me read another extract from this paper. In regard to the effect of the increase in the value of gold upon prices, this gentleman, (Mr. Giffen), who is now an extreme monometallism makes the following statement, as given in the essay from which I am reading:

"He then deals with the effects of this appreciation of gold on the distribution of wealth, and says: ‘It

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is obvious beyond all question that these effects may be important. The debtors pay more than they would otherwise pay, and the creditors receive more. The matter is thus not unimportant to the two large classes of people who make up the community. Appreciation is a most serious matter to those who have debts to pay. It prevents them gaining by the development of industry as they would otherwise gain.’

"As to the landowners, he shows how appreciation of gold and consequent fall of prices has swept away the surplus value of many estates, especially of land, and also estates of other sorts, and made them insufficient even to pay the mortgages on them; also, he illustrates the same kind of effect on stocks of various sorts."

But I suppose it is not necessary to read authorities to show that the increase in the value of gold which would follow from the elimination of silver as a money metal would increase the burdens of indebtedness immensely all over the world, and would put down the price of products, thereby taking away from the debtor the ability to pay with the same amount of property a debt which he had contracted upon a different ratio and under a different standard. Even the Herschell committee, in justifying the closing of the mints in India to the private coinage of silver, makes a statement to this effect, to which I ask the attention of our monometallic friends.

I am not in the habit of appealing to the prejudices of the poor against the rich. I know but one rule in my legislative conduct, to protect all alike and treat all alike, and it is not just to the debtor who has contracted his indebtedness under silver and gold to strike silver out of the currency and take more than one-half in excess of his property to pay a debt so contracted.

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No living man can justify legislation like that. If we had the power now to put this country, all obligations being obliterated, to the test whether we should have gold or silver, one standard or the other, it would be a fair issue. But as we are now, with debts contracted to the amount of $8,000,000,000 in the United States, to strike down the ability by one-half of the debtor to pay his obligation is not only unjust and ruinous, but absolutely wicked.

Another argument is made daily and hourly by the metropolitan journals. It is said we can not maintain a different standard from Europe. We must not put this country in a position of isolation. We must not, to use a much-abused term, put a wall around the people of the United States. I am not disposed to be prejudiced against England. The English are a great people. They understand the chief end of commercial life better than any people who have ever existed, even than the Venetians. I am not here to array the people, of the United States against those of Great Britian. We come from the same lineage, and they simply exercise the right that we exercise — to take care of themselves. I can understand how an Englishman would be for the gold standard. The gold standard makes England financially the mistress of the world.

In 1844, after they had demonetized silver in 1816, the British Parliament passed the bank act, in which they made it mandatory on the Bank of England to buy every ounce of gold that came from any portion of the world for all time to come, at the fixed valuation of Ł3 17s. 8d. an ounce, a fraction over $20.

What was the inevitable result? All the world except England was on a silver or a bimetallic standard

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Germany was on the exclusive silver standard The Latin Union was on the silver standard. Even. country of any importance in the world was championing silver; and yet our ancestors deliberately took up the gauge of battle and said to the whole world, "You shall have gold," as my predecessor here, Mr. Benton said, red gold, and although their first step was challenged to the death, they said, "Every ounce of gold produced anywhere in the world shall be bought by the Bank of England at the price we have named," and that fixed the price of gold in the remotest parts of Asia.

Every man who had an ounce of gold knew what it was worth, taking off the cost of transportation. He knew that the Bank of England was bound to pay that or give up its charter. Their object was to make England a gold emporium and chain the gold standard upon the people of the whole world, and they have almost succeeded in that gigantic endeavor. By fixing the price of gold they enhanced its value and forced the world to take their standard.

If this country should now surrender silver it becomes like iron or lead or any other metallic commodity, and its qualities as money are destroyed forever. I repeat, if I looked at this subject from the English standpoint I would unquestionably advocate gold. Gold represents, the genius of financial centrality. If England can bring the whole world to a gold standard, with her vast carrying trade, with her large colonial system, she is mistress of commerce and finance.

Who could have stated the matter more succinctly and distinctly than Mr. Gladstone did in the debate in the House of Commons three months ago on the continuation

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of the Brussels conference? Mr. Gladstone said, "Why continue the conference? What necessity is there for England to send any more commissioners? We do not intend to go to anything else but the gold standard. We are the creditor people of the world, and we want money to have the highest purchasing capacity, the largest quantity of which can be put in the smallest bulk."

That is an honest statement. He said, "We do not propose to negotiate." Germany has joined England. After Germany had wrested with iron hand from France $1,000,000,000, principally in gold, she looked across the channel and saw England the mistress of the seas, and Bismarck, looking to the splendid future of a consolidated empire, whose commerce should rival that of Great Britain as her armies had conquered France, said, "We will go to the same basis financially; we will adopt gold." Then they took their silver, melted it into bars, carried it over to France across the frontier, and added insult to injury by asking the French, after paying them $1,000,000,000 of war indemnity, to coin their silver in order to help them to get more gold in their rivalry with Great Britain.

I have said that I believe the principal object of the English government is to concentrate, as far as they can, their commerce, wealth, or the products of it, in the Merchants of England, the commercial classes. As to their nobility and the landed aristocracy, their autonomy provides for them; but in the carrying trade, in the extension of commerce and the use of the instrumentalities that are most valuable to commerce, and is one of them, they hope by constant accretions

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to make the British Empire the most magnificent the world has ever seen.

Whenever one of their colonies comes in contact with this system of home accretion the British Parliament immediately takes the province in hand and corrects that mistake. While England ostensibly allows everyone of her colonies to fix its own tariff, she manages most decidedly and absolutely to make that tariff, whatever it is, subordinate to the interest of the English manufacturer at home.

Now, there is a significant fact in regard to the demonetization or attempted demonetization of silver in India, and I read again from this pamphlet:

"Soon after the rise of gold began in 1873 a large cotton-spinning trade, begun previously in India, with English machinery, to supply India itself, felt at once the stimulus supplied by the difference in exchange. It prospered rapidly, grew, and continues growing fast and steadily, and exports to China and other silver countries. Here are comparisons of the English and Indian exports of cotton yarn, in pounds, to China, Hongkong, and Japan, which have for some time been supplied annually to the Economist by Mr. Abraham Haworth, of Manchester. They show how the product of silver wages beats the product of gold wages, and beats them more as the divergence between the metals widens.

"The quantities are given in pounds weight. The contrast between the stationary quantities from England and the rapid expansion of the Indian export indicates plainly a sad future for Lancashire trade if gold wages there must continue competing with silver wages in foreign markets. India will on the present footing beat Lancashire everywhere, meanwhile in the large class of goods made of Indian cottons, but ultimately in any material."

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Then follow statistics showing that from 1876 to 1881, England exported to China and Japan yearly $38,560,000 in these cotton goods. India then exported only $19,641,000. From 1882 to 1887 England had dropped off to $33,682,000, India having increased from $19,641,000 to $71,319,000. In 1888, one year, England sent to China and Japan $44,642,600 worth, and India went from $71,319,000, the preceding year, to $114,707,300. In 1889 England sent to China and Japan $35,720,200 of these cotton goods, and India $126,766,800 against $114,707,300 the preceding year.

In 1890 England exported to China and Japan $38,057,400. In the meantime, in the same year, the Indian export increased from $126,766,800 to $145,112,800 worth of cotton manufactures, and it was time for the English merchants to stop this rivalry. The child had outgrown the parent. The colonial manufacturers had taken away the market in Japan and China, and it was necessary to do away with silver in order that the monopoly of this eastern trade might go back where it had originally been, in the English manufacturer and the English merchant.

We are told that the Bank of England controls the finances of the world. It is a poor argument, it seems to me, to a people who in twenty-five years have paid off two-thirds of a war debt of $3,000,000,000, to tell us that England has more financial ability and is a stronger country in a monetary sense than the United states. The Bank of England is not the mistress, financially, of the world; it is not the largest bank in the world. If our friends the monometalists would be more accurate and go to the resources of the large banks of the world, they would find this to be so. The

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Bank of Germany has $185,000,000 of gold and $100,000,000 of silver.

I call the attention of the senate to the fact that we are constantly told that Germany is on a gold basis. Germany has $100,000,000 in silver thalers of full legal tender quality to-day, perfectly equal with gold, and at the ratio of 15 1/2 to 1. Every dollar of it is in circulation, answering all the purposes of gold.

I see in a New York paper, carried away by the enthusiasm of the gold standard, a statement that Germany would hail with acclaim, quoting some Amsterdam merchant, if we should go now to the bimetallic standard and continue to coin silver, because Germany would immediately unload her waste silver on the United States. Has not Germany had an opportunity to do that under the Bland act and under the Sherman act? If silver is a drug in the market and they want to sell it at any price, why have they not brought it here? If they are so sick of it they would take anything for it. If it is the drug that they say is now creating financial dyspepsia in Germany, why do they not throw it out, even if it takes lobelia and ipecac? They have $100,000,000 full legal tender silver, and yet Germany is on the exclusive gold standard. The Bank of Germany has $185,000,000 in gold and $100,000,000 in silver. The Bank of England, the boasted mistress of the finances of the whole world, before whose fetish we are to bow down now or we shall cease to exist as one of the first nations of the world, has $135,000,000 of gold and no silver, except subsidiary coin. It is true under the law of England — now mark it — that any man from any part of the world can draw gold out of that bank; yet whenever they find

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that the export of gold is too large, they put up the rate of interest and stop the exportation. Ostensibly they say to the whole world: "We are on the gold standard; come and get all the gold you want, and we will pay you Ł3 17s. 8d. for every ounce you bring us." Yet, the minute they find there is too much gold going out, they put up the rate of interest and prevent its exportation and contradict absolutely their pretense.

Spain has $35,000,000 in gold and $20,000,000 in silver. Austria-Hungary has $55,000,000 in gold, and $85,000,000 in silver. The Bank of France has $330,000,000 in gold and $225,000,000 in silver, and Mr. Horace White says in an article which attracted my attention in the last forum, that the man who says that France is on a bimetallic basis is an idiot, and ought not to be listened to in any part of this country. He says the poor creatures actually believe it when they say it; but they are ignorant, they do not know, they are not numbered with the financial four hundred who understand this question. France not a bimetallic country with two hundred and twenty-five millions of legal tender silver in the reserve of the Bank of France to-day!

And seven hundred millions of standard silver dollars in the whole country, and yet it is not a bimetallic country! Mr. White says in this article that as soon as you refuse coining a metal it is demonetized. I belong to those poor, benighted, and ignorant creatures who think that when you demonetize a metal it ceases to be money. Is not silver money in France to-day, in Germany, in Austria-Hungary, in Holland, and in Russia? Yet he says that denying it free coinage demonetized silver; in other words, that silver is not

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money to-day in the United States. I must colliers that I am benighted if his definition is correct; but I am not surprised at it. Listen to what Mr. White says about this question and about India. Here is the spirit of monometallism. I am not caviling about words, but it shows the genius of this centralizing scheme, to use no other word, which is now being urged upon our people. He says:

"It would be rash for anybody to predict the future course of events in India. We may be pretty sure, however, that the men who have directed it and who are responsible for its consequences have not acted without careful circumspection. If they are censurable at all it is for too great delay rather than for undue haste. But before anybody censures them for too great delay let him put himself in their place. Let him charge himself with the destinies and fortunes of 250,000,000 of people, for the most part very poor and too ignorant to know what is good or bad for them in a financial way.

"In this last particular they are not alone among the nations of the earth, but the peculiarity in India is that a handful of men have to decide the most important questions without much, if any, aid from public opinion, and without ever referring them to the hustings. When it comes to questions of high finance this may be an advantage to the governed, but it adds enormously to the responsibilities of the governors and will surely give them pause when such a momentous step is to be taken as a change in the monetary standard."

It is a blessing to have the favored few to determine these questions for you; it is a great boon of Providence that a few gentlemen in New York are to determine this question for the American people, and all of us who decline to follow them and abandon the traditions

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and policy of the government and the manifest dictates of common justice are either guilty of a crime intentionally, or else we are put in the role of lunatics. It is a favorite expression now to talk of the "silver lunacy."

I am ready to follow that great lunatic, Thomas Jefferson, on this question. I am willing to follow the men who made the Constitution of 1789, and said that no State should make anything but gold and silver a legal tender for the payment of debts. If they did not mean that silver was a money metal, then the English language has become so nebulous as to be useless.

The Bank of France has three hundred and thirty millions of gold and $225,000,000 of silver. The Russian State Bank has $480,000,000 of gold.

We are told that it is impossible to sustain silver in this country unless we have a conference with other nations of the world and all will agree to it. France sustained the bimetallic standard for eighty years before 1873, with Germany on one side on an exclusive silver basis and England on the other with a gold basis; and to-day the French people are financially the first People in existence. England, the so-called mistress of finance, when the Baring failure took place and the world was racked and tortured with doubt and uncertainty, borrowed $15,000,000 in gold from the Bank of France in order to sustain her credit — $15,000,000 in gold from a country which had $700,000,000 of legal tender silver and $225,000,000 of it a bank reserve!

Now, look at the South. There are 4,000,000 negro peasants, anxious to get silver. All of us who know them know that they prefer silver to any metal in the world. Why can we not float $500,000,000 of

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silver in this country, instead of being told that we are shipwrecked if we continue the process another day? Why are we to demonetize it?

Why, if I have heard anything, it was that to go on with the increase of silver metal, even to buy the bullion and issue the bullion notes under the Sherman act, would bring us to bankruptcy.

Why, I ask now, can we not go to silver coinage with a country increasing in population as no country in the world has ever increased, when we are standing almost sword in hand to keep immigration from our soil? France is a finished country — accompli, to use their own tongue — with her population fixed, and yet she maintains this enormous amount of silver, and is to-day the strongest nation, financially, in the world. The Director of the Mint said recently, as to the financial power of France, and it is also valuable as showing the effect of legislation on the price of silver:

"The French ratio of 1 to 15 ˝ was a fixed point about which the price of silver moved. The London price fixed the relative value of silver and gold for the commercial world, but the commercial value could never vary very widely from the coinage value as long as the mints of the Latin Union stood ready to transform gold and silver into coin at the ratio of 1 to 15 ˝."

I say that it is not the overproduction of silver which has brought down its value. The reports of our Director of the Mint show that the legislation of 1873 of this country and Germany caused the phenomenal and abnormal fall in the price of silver. How could we expect this metal to hold its own with gold when we had taken away from it its chief value, that of money?

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The report of the director of the mint for the last year, 1892, shows that we produced in this country $33,000,000 in gold, and $11,376,037 was taken for the arts, leaving a little over $20,000,000 in the United States of gold production and $74,000,000 in silver, out of which $7,209,362 was taken for the arts — $74,000,000 of silver, with a population of 67,000,000, increasing at the rate of from 500,000 to 600,000 each year, and with enormous resources and this increasing population and the negro population of the South anxious to take silver, and preferring it, we are told that we can not float silver if we have free coinage.

In the Brussels Conference I was struck with this statement coming from Mr. Boissevain, the delegate from the Netherlands. He said:

"In my opinion the chief cause of the fall in the gold price of silver has been the enormous decrease in the monetary use of silver during the last twenty years in consequence of the legislative measures which date from the new monetary law enacted in Germany."

How could we expect silver to maintain its value when the two largest nations in the world, the two most important nations, Germany and the United States, struck it down and took away from it its money value and reduced it to the basis of silver spoons and forks and plate? We give free coinage to gold, and it goes up and up, and we say to it "Io triumphe." Here is the idol financially of the whole world! Take away the monetary value of silver, and then say, "Here is a metal that is debased and depreciated." What has done it? I have read the tables to show that overproduction did not do it. It was legislation that did it;

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the settled determination by adverse laws for the benefit of the capitalists and the financial centralizationists of the world to bring us to a gold basis for their own purposes.

But there is another consideration. Argument would be so potential as to amount to demonstration before I would ever agree to strike down one section of this country and prostrate it for all time to come. If we are to destroy silver, there are a million people in the Western silver-producing States whose principal product is destroyed.

It was said the other day, rather dramatically, by an ex-member of this body, that in the extreme West the people are crying for bread and in New York they are crying for gold. I have letters now in my committee room from friends who went from my State to Colorado, stating that they had given all they could give to the houseless and homeless and hungry, and they could give no longer. Suppose we to-day were called upon to pass a law stopping the factories of New England. Sir, language fails to describe the torrents of eloquence we would hear from that section in protest.

Suppose we were called upon to strike down the wheat product of the Dakotas and the Red River of the North, would we not expect to hear from every man in that section who was able to utter a sentence in protest against this destruction of property and even of life? I know how a senator feels in fighting against a proposed law that he honestly believes will destroy all the prosperity of his section. When the force bill was here, with my convictions I would have sacrificed life to defeat it; and if I were here from one of those silver-producing States in the West I would fight the

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demonetization of silver as I fought the force bill, for it involves all that those people can hold dear in the way of property rights and the comforts of life.

I say arguments must be brought here "stronger than proofs of Holy Writ" to make me do this. If I can, by any possibility, by legislation, tentative or otherwise, keep this great disaster from those people, citizens of this Republic, of the same blood and lineage with ourselves, I will take the responsibility of even a mistake on my part rather than perpetrate what I consider such an outrage. I know those Western States, not from description, but experience; I know what their people have endured in leaving the comforts of what was then civilization in the Eastern and Middle States, and going, with rifle in one hand and pick in the other, to blaze the pathway of civilization in the canons of the Rocky Mountains. They have built up this industry upon the faith pledged to them by the people of the United States in its Constitution and laws that the product of those mines should be considered as a money metal; and we are now asked, because the financial four hundred in New York and the commercial classes in England think they alone intellectually can dispose of this question, to beggar these people and say to them, "Find something else to do; we want gold, gold, gold."

A single word about the necessity for an international agreement. I have endeavored as best I could to study this question and I have come to this conclusion: Every civilized country in the world has consulted its own self-interest and established its own basis of money. Take the report of the Herschell committee that examined into this whole question in order to ascertain

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certain what were the financial systems of the different countries of the world before they would make a recommendation as to India to the English Parliament.

I am told that we are to come under a regular rule and that this is a scientific process, which insures unanimity and international agreement. There is Russia, with paper money payable in roubles, which are never seen, and there is neither gold nor silver in circulation, although they have an enormous war chest of $480,000,000 in gold. There is France, as I have shown, on the gold standard, with $700,000,000 of legal tender silver. There is Austria-Hungary, with gold and silver. There is Holland, with a large silver circulation, though on a gold standard, and so on. But I will read the synopsis, though I can not refrain from giving a crumb of comfort to my friends the Populists. Here is a prosperous country that has neither gold nor silver, but entirely irredeemable paper. The Herschell commission says in the case of Brazil:

"The case of Brazil is perhaps the most remarkable of all as showing that a paper currency without a metallic basis may, if the credit of the country is good, be maintained at a high and fairly steady exchange, although it is absolutely inconvertible and has been increased by the act of the government out of all proportion to the growth of the population of its foreign trade. The case, it need hardly be said, is not quoted as a precedent which it is desirable to follow.

"The Brazilian standard coin is the milreis, the par gold value of which is 27d. A certain number were coined, but have long since left the country, and the currency is and has since 1864 been inconvertible paper. The inconvertible paper was more than doubled between 1865 and 1888, but the exchange was about the same at the two periods, and very little below the par

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of 27d. It had gone down to 14d. in 1868, the date of the war with Paraguay, but had risen again, and was, in 1875, as high as 28 3/8d. In 1869, when the quantity of paper money was increased from Ł12,468,000 to Ł18,322,000, the mean rates of exchange showed an advance of about 11 ž per cent. Since the revolution which displaced the empire and established the republic the paper issues of the banks were increased by more than Ł30,000,000 in less than three years, so that the paper issue in 1892 amounted to Ł51,872,700, and as the result of this and of diminished credit the exchange in that year ranged from 10 źd. to 15 1/4d."

It is a remarkable fact that Brazil to-day has neither gold nor silver as a basis, but has simply fiat and inconvertible money.

But I come now to the synopsis and conclusion of the commission after examining all the financial systems of the world:

"It is impossible thus to review foreign systems of currency without feeling that, however admirable may be the precautions of our own currency system, other nations have adopted different systems which appear to have worked without difficulty, and have enabled them to maintain for their respective currencies a gold standard and a substantial parity of exchange with the gold using countries of the world, which has, unfortunately, not been the case with India. This has been effected under all the following conditions, viz — "

I ask attention to this extraordinary condition of financial affairs, when it is demanded of us that all the world shall come to one ratio and standard of value —

"(a) With little or no gold coin, as in Scandinavia, Holland, and Canada;

"(b) Without a mint or gold coinage, as in Canada and the Dutch East Indies;

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"(c) With a circulation consisting partly of gold, partly of overvalued and inconvertible silver, which is legal tender to an unlimited amount, as in France and other countries of the Latin Union, in the United States, and also in Germany, though there the proportion of overvalued silver is more limited, the mints in all these countries being freely open to gold, but not to silver, and in some of them the silver coinage having ceased;

"(d) With a system under which the banks part with gold freely for export, as in Holland, or refuse it for export, as in France;

"(e) With mints closed against private coinage of both silver and gold, and with a currency of inconvertible paper, as has been temporarily the case in Austria;

"(f) With a circulation based on gold, but consisting of token silver, which, however, is legal tender to an unlimited extent as in the West Indies. The case of Holland and Java is very remarkable, since in that case the gold standard has been maintained without difficulty in both countries, although there is no mint in the Dutch East Indies, no stock of gold there, and a moderate stock of gold in Holland; whilst the currency consists of silver and paper legally and practically inconvertible into gold, except for purposes of export. The case of Canada, which maintains a gold standard without a gold coinage, is also very remarkable.

"The case of Austria-Hungary is also interesting, and presents a remarkable contrast to that of India.

"It will be seen that a country with a silver standard, and a currency consisting partly of overvalued silver but chiefly of inconvertible paper, has been able, by closing its mints against private coinage for a series of years, and whilst still continuing to coin silver on government account, to maintain a fairly steady rate of exchange with gold using countries for a considerable period preparatory to adopting a gold standard."

In the face of this statement, what becomes of the argument that we can not maintain exchange with the

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gold countries of Europe if we have silver coinages in the United States? Here I have read the absolute proof that these countries maintain their exchanges, and yet some of them have silver and gold, some have silver alone, others have paper inconvertible into either silver or gold.

I repeat my statement, that this financial question, instead of being one of a great national brotherhood, of which we have heard so much lately, is simply a matter of adjustment according to the self-interest of the countries which are called upon to act for themselves. If, with our resources, we can not maintain any system, I am mistaken in the American people and their history.

We have come to the parting of the ways, we are now at that point when one road leads to the gold standard and the other to the bimetallism which our fathers established, and which the policy and traditions of this country have always favored. That we may consider it with a deep sense of the responsibility resting upon us for ourselves and our posterity is the duty of every legislator. If a Democrat can not be a Democrat in the larger sense of the term, he should not approach it; if a Republican can not be a Republican without looking to his party standard and the narrow signification of nomenclature, let him not approach it; if our friends, the Populists, can not consider this question without antagonism to both the old parties, they have forgotten the meaning of the name of their party, the People's party of the country.

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Chapter IV. — By Senator George F. Hoar of Massachusetts

The American people have no reason to be ashamed of their legislative history. Our American constitutions, as well as the great measures which crowd and adorn our statute book, have very often been the product of times of excitement, of depression, and almost of despair. They have been enacted amid predictions of failure, amid taunts and expressions of contempt from foreign critics, and against powerful and angry opposition at home.

It has been the good fortune, as it has been the glory of the American people, that it has ever plucked the flower Safety from the nettle Danger; that it has made times of distress and commotion and evil its great opportunity. From the gloom of the Revolution, from the sorry story of the years which followed the peace of 1783 — of feeble government, of disaster, of discontent, of broken faith, of depreciated currency, of stay laws, of suffering debtors, of cheated creditors, of lawlessness, of Shay's rebellion, and popular commotions north and south — came the state constitutions, the ordinance of 1787, the Constitution of the United States, the judiciary act, and the great legislation, State and National, which is at the foundation of all our institutions.

From the abject history of the Jefferson administration came the acquisition of Louisiana, the establishment

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of sailors' rights, and the great naval glories of the war of 1812. From the unutterable woe of the rebellion came the abolition of slavery, the permanent establishment of national authority, and the legislative achievements of the past thirty years.

I believe that from the present panic, if we will but rise to the occasion, we may yet get an equal blessing, a sound, secure, and stable currency.

In one respect the condition of the United States is peculiar. We settle our financial policy in accordance with the popular vote. The great mercantile nations of the world, in fact, and commonly in form, refer such things to experts. The administration in Great Britain consults the governors of the Bank of England, the representatives of the chief mercantile houses, a few men who have become recognized authorities in financial circles, and acts upon their advice. Very few members of Parliament would think of thrusting their own judgment into a debate on a financial question against that of the men of their own party who are their recognized leaders on such subjects. I suppose this is still more true of France, of Germany, of Belgium, and of Holland.

But with us the finances of the country have been for a good while the football of parties and of factions. Every demagogue in public office, or seeking public office, every theorist desiring to get notoriety by extravagance, every anonymous and reckless scribbler who escapes contempt only by concealing his personality, every agitator who would marshal class against class, every anarchist who seeks to overthrow all social order, every brawler who would stir the passion of section against section, of labor against capital, of debtor

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against creditor, of the poor against the rich, prates glibly about the currency, and uses some misrepresentation or sophistry about the currency as his weapon of mischief.

Yet nothing is more certain than that a disturbance of the currency is an advantage only to the classes who are so attacked, and brings nothing but evil and disaster to the classes to whom the appeal is made. As Daniel Webster said nearly sixty years ago:

"He who tampers with the currency robs labor of its bread. He panders, indeed, to greedy capital, which is keen sighted and may shift for itself; but he beggars labor, which is honest, unsuspecting, and too busy with the present to calculate for the future. The prosperity of the working class lives, moves, and has its being in established credit, and a steady medium of payment. All sudden changes destroy it. Honest industry never conies in for any part of the spoils in that scramble which takes place when the currency of the country is disordered. Did wild schemes or projects ever benefit the industrious? Did irredeemable bank paper ever enrich the laborious? Did violent fluctuations ever do good to him who depends on his daily labor for his daily bread? Certainly never.

"All these things may gratify the greediness for sudden gain or the rashness of daring speculation; but they can bring nothing but injury and distress to the homes of patient industry and honest labor. Who are they that profit by the present state of things? They are not the many, but the few. They are the speculators, brokers, dealers in money, and lenders of money at exorbitant interest. Small capitalists are crushed, and their means being dispersed, as usual, in various parts of the country, and this miserable policy having destroyed exchanges, they have no longer either money or credit. And all classes of labor partake, and must partake, in the same calamity."

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There are subtleties in these financial questions surpassing the subtleties of metaphysics. No theologian, no schoolman, no doctor of the civil law, no writer on contingent remainders or resulting trusts or executory devises was ever called upon to deal with more hair-splitting distinctions and profound speculations, more logical puzzles baffling the human intelligence than can be found in the works of writers on finance in this or other generations. And yet it is not too much to say that there is no subject of legislation which so demands wise and dispassionate consideration, and whose clear understanding and correct resolution is so vital to all the best interests of society. As Alexander Hamilton declared in his famous report:

"The general state of debtor and of creditor; of the relations and consequences of price; the essential interests of trade and industry; the value of all property; the whole income, both of the state and of individuals, are liable to be sensibly influenced, beneficially or otherwise, by the judicious or injudicious regulation on this interesting object."

Credit is the life-blood of trade. A sound currency is to the affairs of this life what a pure religion and a sound system of morals are to the affairs of the spiritual life. And we should beware of the men who seek to make of this great interest an instrument of personal or party advantage, or of exciting hatred or discontent, or disturbing social order, wherever such men may be found, whether in high places or low, as we would beware of those men who have used the religious feelings of mankind as instruments for like purposes.

And, as, in dealing with the great religious problems which concern mankind a few strong instincts and a

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few plain rules — the lessons of experience — the authority of a few safe guides, are found by the masses of mankind sufficient unto salvation; as all the law and the prophets are summed up in two simple commandments, easily to be understood, and easy to be practiced, so, I believe, the path of safety through the financial difficulties which surround us is in like manner to be discerned.

No man whom the American people have trusted with any share of political power is entitled to be respected who approaches the duty of this hour in any partisan or sectional spirit or inspired by the desire to reap partisan advantage from the public calamity. Our task is to discover and to remedy the great evil under which all class and all parts of the country suffer. The workshops are closing, the banks are stopping payment, workmen are idle, the homes of the poor are threatened with want, and the property of the rich is in peril.

I can conceive of no better evidence of the prosperity of a nation than that its people are universally well employed at a rate of wages, or other form of compensation, which yields to them the necessaries and comforts of life. Indeed, it is not so proper to speak of this state of things as an evidence of prosperity as to speak of it as the definition of prosperity. That was the condition of the American people, beyond any other known, in the autumn of 1892, and for a long period before. The president himself, in his late message, describes the situation:

"With plenteous crops, with abundant promise of remunerative production and manufacture, with unusual invitation to safe investment, and with satisfactory assurance to business enterprise."

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Not only did this condition of things exist, but by the confession of our eminent statisticians, free traders, and monometallists, as well as protectionists and bimetallists, it was a condition of things which had been improving year by year. The purchasing power of wages had been increasing for twenty years, although the tendency at the same time had been to diminish the length of the day's work. The problem before us is to restore that condition of things. If there is any law on the statute book which has had the effect to disturb it, or if there be any threat or fear of new legislation which is to affect or disturb it, it is for us to change that law and to make that legislation impossible.

This misfortune of the American people, in regard to this currency question, is the spirit and temper in which it has been debated. It is difficult to find upon either side an honest statement of the other's position or an honest answer to the other's argument. What bimetallist, what advocate of the free coinage of silver at the old rate can recognize himself, or his opinion, or anything he believes in and stands for, in the portraiture drawn by his antagonist? What man who believes either that we must submit to the standard of value established by the consent of the commercial world, or who even believes that the world's supply of gold is enough to meet its demands for a standard, or a currency, without sensible fluctuation or change of value, entertains any of the opinions or desires that are imputed to him by the press or by public speakers in certain sections of the country?

Any man or party in the Eastern States who should desire to have the value or the purchasing power of the dollar increased in order that the value of debts,

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or that assured and permanent incomes might be increased, or in order that speculation in gold or in credits might be rendered more profitable, would be hurled from power and buried in infamy by the swift and righteous indignation of the whole people of those States. The prosperity, the power, the happiness, the rapid growth of the Northwest and the South are as dear to the people of New England as their own. What they want, what they desire and strive for, is not an appreciating standard of value but an unchanging standard of value, so far as the lot of humanity will admit. The merchant, the manufacturer, the builder of railroads in the Eastern States is a constant and perpetual debtor. The wage-earner, the depositor in savings banks, the holder of the policy of life insurances, the widow and orphan who are living on the spare savings of the husband and father in his lifetime are constant and perpetual creditors. They are alike interested that the obligation contracted to-day shall be precisely the same obligation, no greater and no less, when it is to be discharged, five or ten or twenty years hence, or whenever its annual or semiannual interest is to be paid throughout that period. The present value of the dollar as a medium of present exchange can be ascertained with reasonable accuracy by the parties to any contract.

Appreciation and depreciation can be ascertained and provided for. But, to use the expressive phrase of Mr. Belfour, "money is the record of obligations extending over long periods of time." And it is an injury, it is destruction to any community which has risen in civilization above the pirate stage, when that record is liable to uncertainty or is the subject of speculation

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or gambling. If the people of the Northeast seem to the people of another part of the country to be contending for anything likely to bear hardly upon them, it is because they do not see or anticipate such a result, and not because they desire it or are indifferent to it.

So, on the other hand, I do not believe that any large number of the people of the Northwest desire the destruction of property, impairment of credit, or any injury whatever to the people of the Northeast. Their ambition is to acquire property, their hope is in the establishment and maintenance of credit. They always have depended, and for a long time in the future they must depend, for these things on a close alliance and an interchange of advantages with the people whose children they are, with the States whence they came, and with communities from whose institutions they have modeled their own, and with whom in the great and glorious future they must live or bear no life. Chief among the resources of the West is its alliance with a wealthy and prosperous East. The wealth of the East must perish but for its alliance with a wealthy and prosperous West.

There are wild utterances everywhere. They are heard from Boston and New York and Chicago as often as from San Francisco or Denver. But they do not come chiefly from Americans, and they do not represent the prevalent spirit of any American community.

The people of the United States are divided on this question. The two sides are, in my judgment, equally honest and equally intelligent. One believes that the policy of the other leads to an increase of the burden of debt, to the contraction of the world's supply of

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currency, and to that worst form of fluctuation in the standard of value, the constant increase of the purchasing power of money, with its consequent fall of price and strangulation of business. Another portion of the people believe, with equal sincerity, that the free use of silver, at its old rate, by a single nation alone leads to the destruction of the obligation of existing debts, the impossibility of any secure credit for the future, and turns all fixed business into speculation and gambling.

Each party is equally honest and sincere, and the two parties desire, in my opinion, the same thing — a currency which shall be sufficiently abundant for all exchanges, domestic and foreign, and a standard of value which shall be as unchangeable through the years and generations as the wit of man can devise. The proprietors of silver mines not unnaturally desire to sell their product to the best advantage. But I do not think they or their advocates on this floor will claim that we shall adopt any policy with regard to the currency merely that they may sell their product at a profit. What they would say, I suppose, is that, believing as they do, the disuse of silver for the purpose of currency to be attended by consequences disastrous not only to the people of this country, but to all mankind, the fact that laborers and capitalists who are engaged in their special industries are likewise to be ruined by it, does not render it any more acceptable to them.

The great and fundamental difference between these two parties is the difference as to two questions of fact.

First. — Is the existing stock of gold available for currency sufficient, with the yearly addition to that

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stock, to maintain prices at their present level and keep the burden of debt from growing heavier year by year in the future?

If it be, then the advocates of silver have no right to demand its consideration when we are regulating the currency, but must, like other producers, stand or fall by the general policies by which we encourage American industries.

But if it be not sufficient, if the cord of indebtedness, is to tighten year by year around the neck of the debtor by the rapidly increasing value of the gold dollar, then the advocates of bimetallism are justified in demanding that every lawful resource of the Government shall be exhausted and every energy of the American people taxed to its utmost to prevent such a result.

Now, I can not find that the researches of our statisticians enable us as yet to decide this question to our reasonable satisfaction. The tables which are used by the bimetallists show a constant increase in the value of gold since 1873. As compared with the forty-five principal commodities selected by Mr. Sauerbach, they show a constant increase in the purchasing power of gold as measured in those commodities, and show, on the other hand, a comparatively small falling off in the value of silver. On the other side, the monometallists point out that if you strike out from the list the articles whose production has been greatly cheapened by increased labor-saving appliances, or whose price in the market has been lessened by the vast recent saving in the cost of transportation, there has been very little fluctuation in gold.

I can not myself escape the apprehension that the bimetallists are at least partially in the right. It may

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be that the appreciation of gold has not yet taken place to the extent of their belief. But there is a large stock of silver still in use in the United States and on the Continent. What has been done as to India, and what is to be done by us, have not yet had an effect which can be measured.

The second question is not so difficult. Is it possible for the United States to maintain a standard of value in separation or isolation from the rest of the civilized world?

I have been, ever since I was old enough to have an opinion on the subject, a bimetallist. I think that is true of all the American people down to 1873, with a very few exceptions. But it has been the bimetallism of Alexander Hamilton, of Washington and his Cabinet, of the framers of the Constitution, of the members of the First Congress, and of the Constitution of the United States. It always recognized and took for granted that the money standard of the world's dealings must be settled by the usage of commercial nations. It recognized also that if there were a change in the relative value of the two metals the more valuable metal must, in the end, prevail. I do not understand that there is any purpose anywhere to discard the use of silver. It is still, and always must be, a large instrument in the commerce of daily life in all countries. Even when the use of silver is directly confined to that of subsidiary coinage, it is not insignificant or unimportant. We have about $50,000,000 of subsidiary coinage, but every dime of that coinage passes from hand to hand a hundred times where the gold dollar would so pass once.

The lesson of all experience points to the use of gold

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and silver to effect exchanges and to measure values for the commerce of mankind. From the foundation of the world they have performed this great office. They are known as the precious metals in the universal language of civilized men. They are adapted and they alone are adapted, by permanence, by their capacity for being coined and stamped, for the convenience with which they may be kept and transported, to perform this service for mankind. They are the only complements of each other. If the weight and size of silver, in proportion to its value, be too great for use in large transactions, the size of gold, in proportion to its value, is too small for safety and convenience in the smaller and commoner transactions of life.

Silver circulates everywhere to-day, and will circulate everywhere until time shall be no more, as the money of the common people, whatever may be the action of the government.

In the countries where gold is the only recognized lawful standard of value, silver is still the instrument of the commerce of man's daily life. Sometimes one has risen for a few years, perhaps for a generation, in value as compared with its companion, and sometimes the other. Sometimes mistaken financial policies, sometimes popular excitement, sometimes the schemes of designing speculators, may have depreciated or exalted one at the expense of the other. But this august and regal pair — the queenly silver and the royal gold — have maintained throughout all ages, and through all tune will maintain their companionship and their supremacy. If you undertake to settle this question by driving either from the country, you will have no peace until it is restored. The principle which recognizes

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both has its foundation in nature, and in the experience of man.

That the words "money" and "gold and silver" were regarded as equivalents in constitutional meaning is shown by the fact that the Constitution makes a separate provision as to bills of credit and does not include them in the sentence which applies to money. It is not gold or silver that a State may make a legal tender, but gold and silver, the legal value of which, by another clause of the Constitution, is to be determined by Congress.

Chief Justice Ellsworth and his associate, who represented Connecticut in the constitutional convention, in their report to their constituents of the proceedings of the convention, say that the new Constitution provides that no State "shall make anything but money a legal tender for the payment of debts," showing that, in their judgment, the word "money" and the words "gold and silver" are identical or equivalents.

Alexander Hamilton considered this question in his great report on the mint and the coinage. He gave fullest weight to the arguments of the monometallists. He admitted that the money unit had up to that time virtually attached to gold rather than to silver. But with the fullest concurrence of President Washington and the statesmen of his time, he declared for the principle of bimetallism. His arguments have not lost their original force. They have not been answered in any discussion. The people of the United States, when the tempest has passed, will settle down and be reconciled to the solution of this great problem in which Washington and his Cabinet joined. They never will be permanently reconciled to any other.

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Daniel Webster declared more than once, and with great emphasis, that the Constitution requires the coinage of both metals; and it would be a disobedience to our constitutional duty were congress to discard either.

All our great financial authorities of both parties, from the framers of the Constitution, from Alexander Hamilton, and Jefferson, and Webster, and Calhoun, and Benton, and Chase, and Fessenden, Federalists and Republicans, Whigs and Democrats, down to the disturbed period which followed the war, have agreed upon this policy. There were differences which divided political parties. Whether congress should authorize a paper currency, under careful safeguards, redeemable in coin, or should leave that to State discretion, or to private enterprise, was a question which divided parties and made and unmade presidents and administrations. But down to the year 1863 it never was heard in this country that the legal tender and the standard of value should be anything but gold and silver; nor was it ever claimed until 1873 that both gold and silver could not be relied upon to perform this service.

I have no doubt that the Committee on Coinage, who reported and enacted the statute of 1873, were actuated solely by a conscientious desire for the public good. I would give no countenance to the miserable slander that they were acting in the interest of capitalists or monopolists or of creditors; or that they desired to conceal what they were doing from the American people, or from anybody. They selected for their single standard what was then the cheaper metal, a metal not only then the cheaper, but of which a large and constantly increasing supply was confidently expected. The

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scheme was proposed in the report of the Director of the Mint, was recommended by the Secretary of the Treasury in his report, was printed in the House of Representatives thirteen times; was called to the attention of chambers of commerce, was the subject of deliberate discussion in some of them, and was well known to leading financiers.

The senate first voted to request the president to open a correspondence with other countries in relation to the unit of value. That correspondence took place. Then the Director of the Mint proposed, in his report, to adopt a single gold standard. Then the Secretary of the Treasury urged the measure in his report to congress. Then the matter was referred by Mr. Hooper of the house, to public bodies for their opinions.

Mr. Ernest Seyd was an authority on all practical mechanical measures connected with coin. Mr. Hooper wrote to England asking his assistance in the matter. Mr. Seyd wrote him quite a long letter early in the year 1872, and he then came here. I have his letter to Mr. Hooper, making the final discussion upon the bill which Mr. Hooper submitted; and after suggesting in that letter various practical reforms, which are of little or no importance in this connection, Mr. Seyd goes on with an able and elaborate argument against monometallism, and says the great fault he finds with Hooper's bill is that lie undertakes to bring this country to the gold standard, which he thinks would be destructive, and against which he had written a book at home; and he urges upon him the free coinage of silver at the rate of 400 grains to the dollar. Mr. Seyd wrote it to Mr. Hooper after the bill was framed, most earnestly and laboriously urging him not to adopt monometallism and

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recommending that the standard of silver be 400 grains instead of 415.

We were not having specie at all and had not any specie circulation for three or four years after that time and in 1878 in came the Bland act restoring silver and providing for a larger coinage of silver every year than we had had before in the whole seventy-three years of the century put together.

Now, to return, both the great political parties in this country were of this way of thinking down to the last national election.

But the great question, of course, is the question of ratio. Here, too, we must follow — whoever may be disappointed and whatever the cost —

First, the principle lay down by our earlier authorities;

Second, the precedents of our legislation.

Alexander Hamilton declared that if the two metals, at any time, were separated, the more valuable metal must be the standard for the reason that the fluctuations would be the more likely to attach to the inferior metal. No respectable American authority, until the recent discussions, can be found to the contrary. We can not establish a contrary policy to-day without entailing upon the country infinite mischief, and disregarding the opinion of the whole commercial world and without a separation from all the leading nations of the world in this matter of the standard. I hold that this is a thing almost as impossible as attempting to exempt our portion of the planet from the operation of the law of gravitation itself.

Everything points to an enlargement of intercourse and to closer relation in the future. The ocean voyage

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between the two hemispheres has been reduced from an average of thirty days to less than six days, and the time is at hand, in the opinion of the best naval architects, when ocean lines will make their ordinary voyage within a hundred hours. One-half of the population of the United States are within speaking distance of Washington by telephone. The time is undoubtedly at hand when the Atlantic will be no impediment to audible communication between the two continents.

Besides, the precedents of our own legislation, down to the time when the opinion of this country was divided upon this question, all point to the same result. If silver were queen, gold was king.

There is nothing which points to any considerable rise in silver in the near future, unless there may be some brief and temporary diminution of the product. If it comes, however difficult, there must be a new revision of the relation between the two metals. That can only take place by the common consent of commercial nations, and it will be idle and hopeless to expect it otherwise.

Believing, therefore, with Hamilton, that the bimetallic standard is that upon which alone this country can permanently and safely rest, and believing also, with Hamilton, that whenever the two metals separate the standard must be conformed to the more valuable, I am in favor of at once putting a stop to the purchase of silver for coinage. Otherwise it seems to me clear that our gold will take its departure, and we shall be left in that most wretched of conditions, a nation with a single monometallic standard composed of an inferior metal, constantly fluctuating and rapidly degenerating — a condition from which every wealthy commercial nation in the world, now including India, has escaped.

Another course may be suggested which might, under circumstances different from those which now surround us, prove practicable and desirable. That is, to coin a legal tender silver dollar of a weight sufficient to make it equal in value to the gold dollar; make the gold and silver dollars receivable for all debts, public and private; make them interchangeable at the treasury at the will of the holder; pledge the credit of the government to maintain this relation, and provide that if at anytime the bullion value of the silver dollar should fall to a point more than 2 or 3 per cent. below the gold dollar the coinage of silver shall cease until the ratio be restored. This plan will go far to answer the arguments of those persons who think the stock of gold in the world insufficient to supply the world's need of a currency and dread falling prices, increased burden of debts, and strangulated business. But I fear we can not adopt it now.

First, it would not be accepted by the special representatives of the producers of silver, without whose concurrence it can not be adopted.

But, second and chiefly, because we have on our bands four hundred and twenty million of standard silver dollars of which three hundred and eighty million are in circulation, either as coin or by the certificates which represent them, not now taking into account upward of fifty million of subsidiary coin. If this policy were to be adopted now, we must either attempt to maintain, side by side, two standard silver dollars of different weight or we must call in and recoin our existing silver currency at a cost to the treasury

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of a sum which might not improbably equal 50 per cent. of the entire value of our silver coinage. We must, therefore, abandon for the time being an attempt to make our present silver product useful for currency and remit that question to the future. It will be all we can do to support our present stock of silver coin without depreciation.

No man can regret more than I do any temporary distress which may fall upon those young communities which have lately taken their places in the sisterhood of American States. I would go, as I have heretofore gone, to the very limit of public safety, in my regard for their special condition. But they must not expect — I do not believe that their representatives here will seriously claim — that we should be affected, in regulating the currency, by a desire to promote the sale of a particular product.

I do not think such a policy would, in the end, be of advantage to the silver-producing States themselves. I believe that if this country should be put on what is called a silver basis, and our home supply of coinage could be furnished by Colorado and the other silver States — I believe if the whole world could be put on a silver basis, and these silver States could furnish all the silver, it would be an unmixed evil to them. No nation, no State ever got permanent strength or prosperity from its wealth of the precious metals. There always has been, and there always will be, an element of chance, not to say gambling, in that product. Spain and Mexico and Peru tell their own story. The true prosperity of California began when the great profits of her yield of gold ceased and other industries appeared. I was specially gratified by the note of courage

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in an utterance attributed to the senior Senator from Colorado, in which he told his people not to be down-hearted — they could be a powerful State without silver. I am not sure that it would not have been better, both for Nevada and for the country, if there were not a mine within her borders.

I am told that Colorado produced in 1892, fifty-five millions of coal, sixty millions of farm products, thirty-four millions' worth of cattle, and that her manufactures were seventy-five millions, while her silver product was about twenty-three millions. Two hundred and twenty-four millions of these products, the demand for which no legislation can affect, is a pretty good showing for a State not yet twenty years old. Of the wealth she produces even now, her silver product is not a tenth.

I do not think we shall gain much by discussing here the responsibility for the condition of things that exist in this country. It is our duty to agree, if we can, upon a remedy. We shall probably, all of us, have something to say to the people when they are asked to determine to what leaders they shall give their confidence hereafter. But I voted, after the best consideration of the subject of which I was capable, for the much-abused statute of 1890. "I have seen no reason to change my opinion of the wisdom of that vote in the light of subsequent experience. That law has been most bitterly attacked. I desire to leave on record somewhere, and the records of the senate seem to me the fittest place, the reason which governed my action.

The law of February 28, 1878, commonly known as the Bland bill, as it passed the house of representatives,

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provided for the free coinage of silver without limit, at the rate of 412 ˝ grains to the dollar. The owner of the silver bullion, under the operation of that bill as it passed the house, could have taken it to the mint and received a legal tender dollar, coined and stamped, for every 412 ˝ grains of silver. This not only would have enabled the owner of the silver to make a large profit, as the process of its degeneration went on, but it would have been an issue of fiat money, pure and simple, so far as the difference went between the bullion value of the silver dollar and of the gold dollar.

The senate amended the house bill by limiting the amount to be purchased to a sum which was not to be less than two million and not more than four million dollars' worth a month, at the discretion of the secretary. The secretary was to purchase the bullion at its market value and coin from it all the 412 ˝ grain dollars it would make. The bill so amended passed both houses over the veto of President Hayes. But the fiat money remained, and for twelve years had been accumulating in the treasury.

For that issue of fiat money the act of 1890 substituted the purchase of silver at the rate of 4,500,000 ounces a month. But it declared it the duty of the Secretary of the Treasury to maintain its parity with gold, to do which it would become his duty to use all the powers committed to him by the resumption act of 1875.

In other words, instead of the fiat money of the Bland bill, every dollar of the property and the utmost limit of the credit of the people of this country were pledged to the maintenance of our silver currency on an equally with gold.

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It is true that the amount of silver to be purchased was increased by the act of 1890 from the limit of from two to four million dollars' worth a month — at the discretion of the Secretary of the Treasury — to a fixed amount of 4,500,000 ounces a month, without discretion; to be purchased, however, at its market value, so that the profit of the transaction inured to the treasury.

It is true also that since the Bland bill was enacted but two millions' worth a month had been in fact purchased. But that condition of things could only continue so long as there should be a Republican Secretary of the Treasury, or a Democratic Secretary differing wholly from his party. In the not unlikely accession of the Democratic Party to power we had every reason to expect that silver would be purchased to the largest monthly limit permitted by law.

This was not only the opinion of Democrats who might be termed extremists, but of the leaders of the party in congress, with perhaps, half a dozen exceptions. Certainly no man represented, then or now, what would be called the moderate and conservative opinion of his political associates more than the present Secretary of the Treasury. He had, and deserved, their full confidence, and he had and deserved the friendly regard of all who have been his associates in the public service. If the personal inclination of his party had been followed, without considerations of special availability in one or two States, he would have been preferred to Mr. Cleveland as a candidate for the Presidency itself. It was natural and almost inevitable that, in the case of Democratic success, Mr. Carlisle should be called to the treasury, and should be clothed with the discretion given by the Bland bill.

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Now Mr. Carlisle had voted for the free coinage of silver, of which he was an avowed advocate, although he desired that the profit should go to the government and not to the owner of the bullion. In his very able speech in favor of the Bland bill, as it finally passed the house, delivered in the House of Representatives February 21, 1878, he gives his opinion on this subject, and especially his opinion as to the proper exercise of this discretion by the Secretary of the Treasury. He says:

"My position upon the subject is briefly this: I am opposed to free coinage of either gold or silver, but in favor of unlimited coinage of both metals upon terms of exact equality. No discrimination should be made in favor of one metal and against the other; nor should any discrimination be made in favor of the holders of either gold or silver bullion and against the great body of the people who own other kinds of property."

He goes on to denounce Mr. Sherman, then Secretary of the Treasury, as well known to be hostile to the purposes of the Bland bill, and to denounce the resumption act of 1875 as a destructive scheme. He says:

"The senate has declared by a large vote that the coinage should be limited to a sum not less than $2,000,000 per month. If the execution of this measure could be entrusted to a public officer whose opinions upon the subject were in accord with those of the great majority of the American people, and whose sympathies were with the struggling masses who produce the wealth and pay the taxes of the country, rather than with the idle holders of idle capital, the provisions alluded to would be of little consequence, because he, would coin the maximum instead of the minimum amount allowed by the amendment."

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Let me not be understood for a moment as desiring to cast any imputation either upon the integrity or the wisdom of the present Secretary of the Treasury. I suppose that he has changed his opinion as to what would be a wise exercise of his discretion under the Bland bill, even if he were vested with it. But I suppose that, in common with a large number of his countrymen, his change of opinion has been brought about naturally and honestly, as well as inevitably, by a change of situation. The argument which might have convinced as honest a public officer as Mr. Carlisle in 1878, appears very differently in 1893. In 1878 all parties in the United States expected to continue the coinage of silver. The question was whether it should be limited or unlimited. There was no reason to doubt that if the consent of Great Britain could be had, every other European government would gladly open its mints again to silver. Many great and conservative British financiers then thought that the way to protect India was not to put her on a gold basis, but that England herself should resume the coinage of silver at a proper ratio.

It is no secret that some of the cabinet of Lord Salisbury and that Mr. Goschen himself inclined to this view and were ready to adopt it as the policy of the government, if the consent of the business men of London, with anything near unanimity, could have been had. This opinion has within a few days been reaffirmed by Mr. Balfour. I have never agreed with the opinions expressed in favor of the free coinage of silver by Mr. Carlisle, and those who then thought with him; but justice to them requires it to be admitted that the question was a very different one when the

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policy of the commercial world, outside of this country was still undecided, from what it is now when that policy is settled.

This then was the condition of things under the bill for which the Sherman bill was a substitute. The Bland bill of 1878 required the addition to our silver coinage of $2,000,000 worth a month, not redeemable in gold, and legal tender for all obligations, public or private. The Secretary of the Treasury was bound to the purchase of at least $2,000,000 worth a month, and to coin from it all the dollars it would make. But he was at liberty in his discretion to purchase and coin. $4,000,000 worth a month.

If we had a secretary entertaining the then opinion of Mr. Carlisle, who favored and voted for free coinage of silver, and who favored the passage of the Bland bill over the veto of President Hayes, we were to have $4,000,000 worth a month, of $48,000,000 worth a year. Now this, so far as the difference between gold and silver was concerned, was fiat money pure and simple.

What would have come if this law had been continued? If we had had a Democratic Administration — if that administration represented the opinion of nine-tenths of the Democratic party — we were to have forty-eight million dollars' worth of fiat money a year. To what condition would this have brought us, inevitably and swiftly, even if the smaller quantity alone were coined? I will let Mr. Cleveland himself answers this question.

He declares in his message, December 8, 1885:

"This operation will result in the substitution of silver for all the gold the government owns applicable to its general purposes;"

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That the —

"Hoarding of gold has already begun;"

That —

"The two coins will part company; * * * then will be apparent the difference between the real value of the silver dollar and a dollar in gold; * * * gold, still the standard of value, and necessary in our dealings with other countries, will be at a premium over silver; * * * rich speculators will sell their hoarded gold to their neighbors who need it to liquidate their foreign debts, at a ruinous premium over silver, and the laboring men and women of the land, most defenseless of all, will find that the dollar received for the wage of their toil has shrunk in its purchasing power.

"That disaster has not already overtaken us furnishes no proof that danger does not wait upon a continuation of the present silver coinage. We have been saved by the most careful management and unusual expedients, by a combination of fortunate conditions, and by a confident expectation that the course of the government in regard to silver coinage would be speedily changed by the action of congress."

In his letter to A. J. Warner and others, members of the Forty-eighth Congress, February 24, 1885, Mr. Cleveland says:

I Gold would be withdrawn to its hoarding places, and an unprecedented contraction in the actual volume of our currency would speedily take place. Saddest of all, in every workshop, mill, factory, store, and on every railroad and farm, the wages of labor, already depressed, would suffer still further depression by a scaling down of the purchasing power of every so-called dollar paid into the hand of toil. From these impending calamities it is surely a most patriotic and grateful duty of the representatives of the people to deliver them."

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The representatives of the people did deliver them. With no help from Mr. Cleveland or his political supporters, the Republican party arrested the swift progress of the danger which threatened us, and removed a large part, though not the whole, of the evil of the Bland bill. The act of July 14, 1890, while it for a short time increased the amount of silver which the Secretary of the Treasury might purchase and coin, declared the "established policy of the United States to maintain the two metals at a parity with each other."

By the statute approved January 14, 1875, the act to provide for the resumption of specie payments, the Secretary of the Treasury is authorized to use any surplus revenues not otherwise appropriated, and to issue, sell, and dispose of, at not less than par, any bonds of the United States described in the act of congress of July 14, 1870. Those bonds were: A bond bearing 4 per cent. interest, running for thirty years; a bond bearing 4 1/2 per cent. interest, running fifteen years; a bond bearing 5 per cent. interests, running ten years.

So that the act of 1890 substituted for the issue of twenty-four million gold dollars' worth of fiat-silver money yearly the present purchase of silver, with the whole faith and resources of the government pledged to maintain its equality with gold.

It is said that we had in the treasury June 30, 1893, $362,000,000 of silver in coin and $118,000,000 in bars; and this is true. But of this four hundred and eighty millions, three hundred and forty millions, or there about, is in practical circulation in the form of silver certificates.

We had, at the same time, in the treasury, $110,000,000 of gold in coin, and seventy-eight millions in

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bars. Of this one hundred and eighty-eight millions, ninety-four millions, or about 50 per cent. was in practical circulation in the form of gold certificates.

While the gold certificates in circulation amount to only one-half or thereabouts of the gold in the treasury, the silver certificates in circulation are about two-thirds of the silver in the treasury. We have one hundred and fifty millions of silver certificates in circulation against ninety-four millions in circulation of gold certificates.

I suppose it will not be claimed that, so far as the silver is in practical circulation, the most convenient form of that circulation is not the deposit of the bullion, or coin, in the treasury, and the transfer from hand to hand of its paper representative. I suppose that if all the silver now in the treasury should be replaced by an equal value in gold dollars, and the silver destroyed or sent out of the country, as large a proportion of the gold as the amount of the silver certificates bear to the entire mass of silver would circulate in the form of gold certificates.

Under the statute of the United States, which differs in that respect from that of some States, the repeal of an act which itself repeals a former act does not revive such former act. So in voting to repeal the act of 1890, or any part of it, we do not revive the legislation from which Mr. Cleveland anticipated such mischievous consequences in the near future. Were the Bland bill now to be revived I, for one, should not consent to repeal the law of 1890, and to vest in Mr. Carlisle the discretion which he is so solemnly pledged to exercise, of purchasing silver and issuing fiat dollars of 412 1/2 grains at the rate of 4,000,000 gold dollars'

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worth, or at present rate 7,371,428 silver dollars a month.

This discretion, it will be remembered, was vested by law wholly in the secretary and is beyond the control of the president himself.

One party, the Democratic party, almost unanimously — aided by Republicans enough to make a majority of both houses of congress — were well known to be in favor of the free, unlimited coinage of silver at the rate of 412 1/2 grains to the dollar. There were a few exceptions in the Democratic party. But that the friends of free coinage of silver represented its settled opinion and its deliberate purpose is shown by the fact that at its advent to power the Secretary of the Treasury and every Democratic member of the committee on finance of the senate, with a single exception, is a person who was then of that way of thinking.

Now it is notorious — no honest man who remember the history of that time will deny — that the alternative presented to us was the passage through both houses of congress of a bill for the free coinage of silver or the adoption of the measure of 1890a measure far better than the existing law which it repealed, on the one hand, and infinitely better than the new law with which we were menaced, on the other. It is true that President Harrison undoubtedly would have vetoed a bill for the free coinage of silver. But it is also true that the passage of such a measure through both houses of congress — arrested only by the opinion of the executive — would have caused infinite mischief in its effect upon the public credit, both abroad and at home.

Now, you tell us that the main cause of the present difficulty is that foreigners will not keep our securities

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so long as they are afraid they will be paid in depreciated silver, although the whole credit of the government of the United States is pledged to make every silver coin as good as gold coin anywhere. What do you think would have been the effect on our credit of the continuance of the coinage of silver dollars under the Bland bill, there being neither obligation nor authority resting upon the government to exchange these silver dollars for gold dollars, and the purpose of the American people being learned only from the fact that under its existing law it was coining $24,000,000 worth of fiat money annually, to grow to $48,000,000 worth whenever a Secretary of the Treasury agreeing with Mr. Carlisle should come into power; and that there was a congress, both of whose houses were purposing to substitute for that an unlimited coinage of depreciated silver whenever they could get rid of the constitutional restraint imposed only by an individual will?

There has never been a day since the resumption of specie payments until long since the present administration came into power when, if you had taken a thousand dollars in gold and a thousand dollars in silver into any national bank in the country, the bank would have given a dollar for its choice between the two as a deposit. It may be that a bank — one of whose customers was paying a large body of workmen their wages on a pay day — might have given something for the silver for convenience of making change. The silver currency of the country was maintained practically on equality with gold.

I believe that if President Cleveland in his inaugural address had declared that every authority vested in him, or in the treasury department, would be used to

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keep every dollar of our currency as good as every other, and had been left at liberty by the pledges of the platform on which he was elected to add assurances that there should be no change made in the protective system which should not take effect far enough ahead to allow existing industries to adapt themselves to the new condition of things, the calamity which is upon us would not have come.

The purchase of silver under the act of 1890, in my judgment, is a wasteful and extravagant expenditure of the public money. It never could have been excused, but as an escape from the fiat money of the Bland bill, and from the threat of an absolute free coinage of silver. But we could have maintained our national credit and the integrity of our national currency in spite of it, without disaster or panic, but for the advent of President Cleveland to power.

No candid advocate of silver currency can affirm that I the people of the United States have not gone to the extreme limit of public safety in the struggle to maintain silver in connection with gold as the monetary standard. We have purchased this metal and coined it and given it a legal tender power beyond its value for fifteen years. We have, at the expense of the people, purchased it in large quantities beyond any public necessity and beyond any desire of the people to use it as money. During all this time it has been constantly on the decline. Even India has abandoned it. Certainly the experiment has been fully tried and the government has gone to the extent of its resources in obedience to their desire.

I suppose that with the coinage of the silver dollar stopped, this country could maintain without difficulty

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our present volume of silver currency on an equality with gold. Some of our friends are apt to point with dismay to the mass of silver coin in the treasury. But every coin in the treasury that is represented by a silver certificate is in practical circulation in the most convenient way. I do not believe that the great commercial nations of the world will long submit to be deprived of the great advantage which seems to me to come from the use of both the precious metals. I look still for an international agreement upon this subject. If that shall come, the relation of the two metals to each other will be carefully reconsidered.

But I believe one can be — I will not say established by law, but I will say — ascertained by experience which, when recognized by law and by the common consent of mankind, can be maintained without substantial change for generations to come. From such a condition of things the communities upon whom the present crisis bears the hardest will reap, in my opinion, the most abundant harvest. They will cease to depend on a single product, fluctuating in price, with its ever-present temptation to gambling and speculation.

I am not unmindful of the opinion of some of the wisest and best financiers that the supply of gold is sufficient for the world's wants for a metallic currency and a standard of value. I do not agree with them; but it may be that the product of gold will increase, at least, to the world's needs in that respect, if not sufficient now. This opinion may, in the end, prevail I do not think anybody who can be trusted has settled yet what are the wants of the world's business, or has any very clear idea on the subject or knows very accurately what is likely to be the world's product of gold.

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Within twenty years silver has been discarded as a measure of value in every country of importance but Mexico. It is not a measure of value in the United States, and has not been since 1834. There is no human probability that it will ever be restored to that function unless some time in the future the supply of gold shall become subject to great fluctuation and the supply of silver become steady. We can not provide for such contingencies and it is needless to speculate about them. But I am utterly opposed to a declaration that we will never use silver again as currency, or will never again coin it for a legal tender.

To make such a declaration by congress, or to adopt such a policy, would, in my opinion, arm every agitator and anarchist and socialist with an almost irresistible weapon. They would say that by the perpetual adoption of a single standard the world's burden of debt would be constantly growing heavier, and that the prices of the world's product would gradually and constantly be falling. In support of their contention they would point, not only to the opinions of the fathers, but to the recent utterances of nearly every public man of all parties; of candidates for the presidency; of nominating conventions; and, with scarcely an exception, of every person clothed, or likely soon to be clothed with legislative authority. They would point to the fact that even in England the representatives of the last Tory administration inclined more and more to the bimetallic standard, properly adjusted, and to the policy of giving silver a share in the function assigned to the precious metals. I suppose they adhere to that view now. I do not believe that a policy of eternal monometallism, adopted in a, time of panic, could stand.

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It is enough for the present occasion to say that there should be no further coinage of silver, except by the unanimous consent of commercial nations. Upon that policy, if we adopt it voluntarily, we can stand. If we decline to adopt it voluntarily, we shall be compelled to it, alike by the loss of trade and by the necessities of all classes; chiefly, however, of the laboring men of the country, who can not live without a stable currency and a steady credit.

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Chapter V. — By Senator John Sherman of Ohio.

If we adopt the single standard of gold without aid from silver, we will greatly increase the burden of national and individual debts, disturb the relation between capital and labor, cripple the industries of the country, still further reduce the value of silver, of which we now have in the treasury and among our people over $593,000,000, and of which we are the chief producer, and invite a struggle with the great commercial nations for the possession of the gold of the world.

On the other hand, if we continue the purchase of silver, we will eventually bring the United States to the single standard of silver — a constantly depreciating commodity, now rejected by the great commercial nations as a standard of value; a commodity confessedly inconvenient by its weight, bulk, and value for the large transactions of foreign and domestic commerce, and detach us from the money standard now adopted by all European nations, with which we now have our chief commercial and social relations. In dealing with such a question we surely ought to dismiss from our minds all party affinities or prejudices; all local and sectional interests, and all preconceived opinions not justified by existing facts and conditions.

Upon one thing I believe that all agree: That both these extreme positions shall be rejected; the both silver and gold should be continued in use as money — a

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measure of value; that neither can be dispensed with. Monometallism, pure and simple, has never gained a. foothold in the United States. We are all bimetallists. But there are many kinds of bimetallists. One kind favors the adoption of the cheaper metal for the time being as the standard of value. Silver being now the cheaper metal, they favor its free coinage at the present ratio, with the absolute certainty that silver alone will be coined at our mints as money; that gold will be demonetized, hoarded at a premium, or exported where it is maintained as standard money. The result would be monometallism of silver.

Another kind of bimetallist, recognizing that 16 ounces of silver are not worth in the market 1 ounce of gold, proposes the free coinage of 20 ounces of silver as the equivalent of 1 ounce of gold. But this is only a difference in degree, because 1 ounce of gold is worth from 27 to 29 ounces of silver. Gold being undervalued, the hoarding or exportation of gold will inevitably follow, and silver will be the only standard. Another kind of bimetallist is one who believes that the essential quality of bimetallism requires that the coins of the two metals shall be maintained of equal purchasing power. The only way in which this can be done, in case the two metals are not on a parity of value at the legal ratio, is by freely coining the more valuable metal and coining the cheaper metal at the legal ratio, and maintaining by the fiat of the government coins of the two metals at parity with each other.

The two metals, as metals, never have been, are not now, and never can be kept at par with each other for any considerable time at any fixed ratio. This necessarily imposes upon the government the duty of buying

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the cheaper metal and coining it into money. The government should only pay for the bullion its market value, for it has the burden of maintaining it at par with the dearer metal. If the bullion falls in price the government must make it good; if it raises in value the government gains.

The government is thus always interested in advancing the value of the cheaper metal. This is the kind of bimetallism I believe in. It is the only way in which two commodities of unequal value can be maintained; at parity with each other. The free coinage of silver and gold at any ratio you may fix means the use of the cheaper metal only. This is founded on the universal law of humanity, the law of selfishness. No man will carry to the mint 1 ounce of gold to be coined into dollars when he can carry 16 ounces of silver, worth but little more in the market than half an ounce of gold, and get the same number of dollars.

The free coinage of silver means the single standard of silver. It means a cheaper dollar, with less purchasing power. It means a reduction in the wages of labor; not in the number of dollars, but in the quantity of bread, meat, clothes, comforts he can purchase with his daily wage. It means a repudiation of a portion of all debts, public and private. It means a bounty to all the banks, savings institutions, trust companies that are in debt more than their credits. It means a nominal advance in prices of the produce of the farmer, but a decrease in the purchasing power of his money. Its chief attraction is that it enables a debtor to pay his debt contracted upon the existing standard with money of less value. If we want cheap money and to advance prices, free coinage is the way to do it; but do not call

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it bimetallism. The problem we have to solve is how to secure to our people the largest use of both gold and silver without demonetizing either.

It so happens that while our country is vast and rich, and full of wealth in the past and in its promises for the future, yet, from its peculiar position, it may be made the base from which gold, silver, or anything else may be drawn.

There is among the nations of the world one great creditor nation, which holds bonds and securities in various forms to the amount of thousands of millions of dollars. It is a country which has not been invaded by a foreign foe for five hundred years. Its insular position is its safety and its fortress. It is a nation of intelligent people, who command the commerce of the world, whose flag floats on every sea. We ought not to be ashamed of them, or to hate them or dislike them, because we are their children and possess very many of the qualities of the parent stock.

England is the great creditor nation, but in her vast enterprises she became involved in difficulties since the passage of the act of 1890. Large investments were made by her capitalists in the Argentine Confederacy, amounting to hundreds of millions of dollars. They, by some sudden collapse, were entirely lost; the Bank of England was threatened, and was compelled to make good those losses, at least to the extent of the drafts made upon England, in order to maintain the banking houses of England, which might have otherwise toppled to their fall, perhaps carrying with them the old mother of them all, the Bank of England.

These difficulties suddenly grew up and England Was compelled to obtain money from France and other

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parts of Europe. The immediate result was that our securities were sent home here to our market. They held our securities abroad and now hold them, to the amount of billions of dollars. They were sent here for sale, and the proceeds in gold were shipped back to pay the losses of Great Britain in the Argentine Confederation.

As I say, our country is great, rich, and powerful; but we have this difficulty, it is a new country. Our wealth is not in gold and in silver, not in money, not even in bonds and mortgages to send abroad. Our wealth is in our mines, our farms, our workshops, and our railroads — the most wonderful development of modern times, because we have in this great agency of commerce more miles of railroad than all the nations of the world.

These are our sources of wealth, but they are also causes of danger, because they could not have been developed in the last few years without going into debt, and that debt may be demanded at any time and will draw from us gold, silver, or anything else.

Following the Argentine trouble, the banks of Australia failed, and the same process went on them with the same result. They drew upon our gold.

Not only that, but other causes combined to produce this trouble. At the very time when we were carrying on this experiment under the act of 1890, Austria-Hungary, Romania, and several other countries of Europe were changing from a paper or a silver standard to gold, and they made demands upon us. They did it through the English bankers, who were compelled to sell American securities in order to draw our gold away, and then, after the decline of these securities,

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caused by their sudden sale, recouped their losses in the market by buying them at an advance in a short period. That was an additional trouble.

There was still another trouble. For the first time in many years, the balance of trade turned against us. Hitherto we have boasted of from fifty to one hundred million and sometimes two hundred million dollars balance in our favor, which helped us to pay our debts and the debts of our people; yet during the fiscal year, ending on the 30th of June, 1893, the balance of trade against us was $18,735,728.

The act of 1890 demonstrated the inevitable result I of free coinage in our country. If the purchase of 54,000,000 ounces of silver a year did not prevent the further decline of that metal, what world have been the result if we received and coined all the silver that would be brought into the United States from any region of the world at the fixed price of $1.29 per ounce, worth in the market 73 cents an ounce? This is a proposition the logic of which it is impossible to avoid. It is a lesson necessarily to be taught. Without it many honest people could not be persuaded that the fiat of the government was not sufficient to lift the price of silver or to prevent its fall,

There is no doubt that the act of 1890 is made the imaginary pretext for many evils it did not produce. It is made to bear the results of wild speculation, of tears well or ill founded as to future legislation, of failures and disturbances with which it has no connection. It is made the scapegoat for extravagance and folly. The fears of business men that the tariff policy of the Democratic Party will disturb all domestic industries And open our markets at cheap rates to the production

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of every country in the world, and the cautionary measures taken by them to guard against this competition is a far more potent cause for distrust, stopping of factories and workshops, than the purchase of 4,500,000 ounces of silver a month.

Certain it is that the act of 1890 did not produce a scarcity of currency. The evil which our people have been suffering was not the volume of money but the hoarding of it. It was a currency famine caused by the hoarding of money taken from its ordinary channels and hidden away in secret places by reason of the fears of millions of people in all ranks and conditions of life. Now, I wish to make a few observations in regard to what ought to be done for the future.

I take it the first object we all have in view is to preserve intact the parity of all our money. We have now seven or eight hundred million dollars of paper money outstanding for which we are responsible. We have undertaken to maintain that at parity. How can it be done? Ordinarily a small reserve would be sufficient to give security to everyone and prevent any fear; but in times like these, in my judgment, it is the duty of the prevailing party, who have the power of the government in their hands and can exercise that power at any moment, to strengthen the reserve, so that nobody will fear we will not maintain the parity of all forms of money in our country.

In order to carry that out it may be necessary to issue the securities of our country to buy gold. They will command gold in any market. They would draw it from the Bank of England. A demand note, a note payable at the pleasure of the United States, drawing, say, not to exceed 4 per cent, interest, would

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command gold everywhere; and it is the only way by which the government can summarily acquire the possession of gold to maintain its reserve.

I wish now to call attention to the coinage act of 1873, which has been the subject of so much misrepresentation and falsehood in this debate. I propose to show, in the most unequivocal manner, the deception and falsehood, largely the result of cowardice that has been uttered in respect to the act I refer to.

When the coinage ratio was fixed by Alexander Hamilton of 15 ounces of silver as the equivalent of 1 ounce of gold, it was substantially equivalent to the market ratio, but the constant tendency of silver to decline in relative value had been going on for years and continued in an almost imperceptible degree, so that when the French standard was fixed at 15 ˝ to 1, the little gold then in the United States was exported, and silver alone was the coin in circulation. At that time, and for many years, foreign silver coins were largely circulated as money in the United States, mostly in worn and, depreciated coin worth less than its nominal value. This caused the silver dollar, then coined in small quantities, to be melted, as more valuable than the coin then in circulation.

Mr. Jefferson, in 1805, discontinued the coinage of the silver dollar, and for thirty years not a dollar was issued. Our currency was either the paper of State banks, fractional coins, or depreciated foreign silver coins. The Spanish milled dollar and the Mexican silver dollar still continued to be the legal standard of money in this country until 1873, some of it at least. So the only dollars then in circulation in this country were dollars of foreign manufacture. After the action in

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1835, etc., they were beginning to be coined more or less, but almost entirely for the Chinese trade. They were exported there during and since our civil war, at the time when specie payments were suspended in all parts of our country except in California. Practically no gold coin was then in circulation. This continued until June 28, 1834, when, in order to secure gold in circulation, the ratio was changed to 16 of silver to 1 of gold. The object of this change was distinctly stated, especially by Mr. Benton, who said:

"To enable the friends of gold to go to work at the right place to effect the recovery of that precious metal which their fathers once possessed; which the subjects of European kings now possess; which the citizens of the young republics to the south all possess; which even the free negroes of San Domingo possess; but which the yeomanry of this America have been deprived for more than twenty years, and will be deprived forever unless they discover the cause of the evil and apply the remedy to its root."

By the act of 1834, superadded to by the act of 1837, the ratio of 16 to 1 instead of 15 to 1 was adopted. The result was that gold coins were largely introduced and circulated; but as 16 ounces of silver were worth more than 1 ounce of gold, the silver coins disappeared, except the depreciated silver coin of other countries, then a legal tender. To correct this evil congress, February 21, 1853, provided for the purchase of silver bullion. That was the first time the government had ever undertaken to buy bullion for coinage purposes, so far as I now remember. It provided for the purchase of silver bullion and the coinage of subsidiary silver coins at the ratio of less than 15 to 1.

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As the value of these coins was less than gold at the coinage ratio, they were limited as a legal tender to $5 in any one payment. They were, in fact, a subsidiary coin made on government account and, from their convenience and necessity, maintained in circulation. They are the very coins now in use, revived and reenacted by the resumption act of 1875.

It was not the intention of the framers of this law to demonetize silver, because they were openly avowed bimetallists, but it limited coinage to silver bought by the government. They saw in this expedient a way in which silver could be more generally utilized than in any other.

After the passage of the act of February 21, 1853, gold in great quantities, the product of the mines in California, was freely coined at the ratio of 16 to 1, and was in general circulation. If, then, the purchase of silver instead of the free coinage of silver is the demonetization of silver, it was demonetized practically in 1835, and certainly in 1853, when the purchase of silver and its use as money increased enormously. In 1852 the coinage of silver was less than $1,000,000. In the next year the coinage of silver rose to over $9,000,000, and reached the aggregate of nearly $50,000,000 before the beginning of the civil war. Then, as now, the purchase of silver bullion led to a greater coinage than free coinage.

This was the condition of our coinage until the war, like all other great wars in history, drove all coins into hoarding or exportation, and paper promises, great and small, from five cents to a thousand dollars, supplanted both silver and gold.

New we come to the act of 1873, which dropped

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from the coin the silver dollar. The charge has been made over and over again that this was surreptitiously done; that it was done under cover in some way. That has been clearly disproved by the exhibition of the public records, and it seems to me that every intelligent man ought now to have seen that fact. But there has been a repetition of that imputation. It was an imputation against the whole mass of the forty-second congress, and yet in conventions no doubt of honest and good people — I do not in the least disparage them — they denounced the act of 1873 as a fraud and as a crime; yes, it was the crime of 1873.

What is the history of that bill? It was a bill framed in the treasury department. It did not come into congress in the ordinary way, but it was framed in the treasury department by a distinguished body of experts, every one of whose names is now borne with honor wherever it is mentioned. Most of them are dead, but some of them are living. Mr. Pollock, long a Director of the Mint; Mr. Secretary Boutwell, who claims to be the author of the bill, and properly so, because he was at the head of the department; Mr. John Jay Knox, who held the office of Deputy Comptroller of the Currency; Mr. Linderman, who was Director of the Mint; Mr. Patterson, who was Superintendent of the Mint at Philadelphia, and a whole host of other experts, framed that bill after a most elaborate correspondence, which is contained in the official documents communicated to congress at the time.

So the whole matter was open. They circulated thousands of copies of the bill to everybody who desired to read it or could be prevailed upon to read it, m order to get the sense and judgment of the experts of

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our country in respect to the coinage, and those answers are printed in a public document communicated to congress upon the call of the house of representatives before a single step was taken on the bill.

These were men of untarnished character. It was a scientific bill, a bill that members of congress do not care much about handling, because if we are lawyers we are not metallists, if we are business men we do not know anything about the mystery of coinage, one of the most subtle and careful sciences. These were men who would rather pore over a table of logarithms or study a problem in geometry or do something of that kind than do anything to tarnish their name and their fame. They prepared this bill at the request of the Secretary of the Treasury, and it was communicated to congress.

The bill contains seventy-one sections. Sections 15 and 18 of the bill are the only ones to which this imputation has ever been made. I have here sections 15 and 18 as originally introduced by the Secretary of the Treasury and sent to the Committee on Finance. Here are the original sections:

"SEC. 15. And be it further enacted, That of the silver coin, the weight of the half-dollar, or piece of 50 cents, shall be 192 grains; and that of the quarter-dollar and dime shall be, respectively, one-half and one-fifth of the weight of said half-dollar. That the silver coin issued in conformity with the above section shall be a legal tender in any one payment of debts for all sums less than $1.

"SEC. 18. And be it further enacted , That no coins, either gold or silver, or minor coinage, shall hereafter be issued from the mint other than those of the denominations, standards, and weights herein set forth."

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Under that section the dollar was dropped from the coinage, a dollar that had scarcely been used for nearly seventy years except to put silver in form for exportation. But I will allude to that more hereafter.

These sections in the three years that the bill was pending in congress were changed either in the house or senate in only one or two unimportant particulars. The House of Representatives thought it was necessary to provide a dollar. They knew that the dollar was dropped out, as everybody else must have known, because the gentleman who framed the original bill give the history of the act, and this matter was pointed out by them. It was discussed and the reasons given.

I have the form which these two sections assumed when the bill was finally passed. Here is the difference:

"That the silver coins of the United States shall be a trade dollar."

Instead of a trade dollar, and omitting the dollar of 412 ˝ grains — nobody proposed such a dollar — the house of representatives put on a dollar of 384 grains, and that was to be, like the half-dollar, a subsidiary coin. It was to be of the exact weight of two half-dollars. That was put on by the House of Representatives, because they wished to keep the form of a dollar, and it continued 384 grains.

The bill was pending during three different sessions of congress. The dollar of 384 grains was inserted when it came to us from the house. The bill of 1870 having passed the senate, failed in the House of Representatives for want of time. In the following congress the same bill was taken up in the house, there considered,

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passed, and sent to the senate. The senate then, upon the demand of the people of the Pacific coast and the petition of the State of California, inserted, instead of the 384-grain dollar, the trade dollar containing 420 grains. The senate also dropped out the word "grains," which had been introduced in the house, and in that form it finally passed. Throughout all these changes this provision remained:

"Sec. 17. That no coins, either of gold, silver, or minor coinage, shall hereafter be issued from the mint other than those of the denominations, standards, and weights herein set forth."

It is thus shown that from the first introduction of the bill, April 25, 1870, until its final passage into a law, February, 1873, the silver dollar of 412 1/2 grains was dropped from the silver coins, and by section 17 was prohibited.

The finance committee carefully examined that bill. We were not in any hurry about it. It was sent to us in April, 1870. In December, 1870, the Committee on Finance, after a careful examination, after having the bill printed and sent by the order of the senate to everyone who desired to read it or look over it, reported it unanimously.

The bill was reported to the senate December 19, 1870, after lying in our committee room for eight months. The nature of the bill I have already described. The dollar was dropped from the coinage in the bill framed in the treasury department. It was then an unknown coin. Although I was quite active in business which brought under my eye different forms of money, I do not remember at that time ever to have

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seen a silver dollar. It was an unknown quantity. Probably if it had been mentioned to the committee and discussed it would have been thought, as a matter of course, scarcely worthy of inquiry. If it was known at all, it was known as a coin for the foreign market.

No one proposed to reissue it. The Pacific coast had six intelligent, able, and competent senators on this floor, representing a population then of not more than a million, if that much. They would have carefully looked out for the interests of silver, if the bill affected them injuriously. But the silver dollar at that time was worth more than the gold dollar. California and Nevada were on the gold standard.

As I said, the bill was printed over and over again, finally reported, and brought before the senate it was debated for three days. The senator from Nevada, Mr. Stewart, took a leading part in that debate, and every senator from the Pacific coast spoke upon the measure. Representing the committee, I presented the questions as they occurred from time to time, until finally we differed quite seriously upon the question of a charge for the coinage of gold. The only yea and nay vote in the senate on the passage of that bill, after two days debate, occurred on the 10th, day of January, 1871.

Every one of the six members from the Pacific coast Voted for the bill after full debate.

The continuation of the history of that bill through the house of representatives and through all of its stages until it finally passed into the hands of the Committee of Conference is clearly and distinctly stated by the report of Mr. Knox, which has been published.

The bill went to the House of Representatives. The

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official record shows that it was carefully considered there, especially section 16, dropping the old dollar. It is sometimes said that nobody explained that the dollar was demonetized. Here is the statement made by Mr. Hooper, who had charge of the bill, one of the most eminent men who have been furnished the House of Representatives from the State of Massachusetts.

"Section 16 reënacts the provisions of existing laws defining the silver coins and their weights, respectively, except in relation to the silver dollar, which is reduced in weight from 412 ˝ to 384 grains; thus making it a subsidiary coin in harmony with the silver coins of less denomination to secure its concurrent circulation with them. The silver dollar of 412 ˝ grains, by reason of its bullion and intrinsic value being greater than its nominal value, long since ceased to be a coin of circulation, and is melted by manufacturers of silverware, It does not circulate now in commercial transactions with any country, and the convenience of those manufacturers in this respect can better be met by supplying small stamped bars of the same standard, avoiding the useless expense of coining the dollar for that purpose. The coinage of the half dime is discontinued for the reason that its place is supplied by the copper nickel five cent piece, of which a large issue has been made and which, by the provisions of the act authorizing its issue, is redeemable in United States currency,"

That shows that it was done openly and fairly, that attention was called to it, and that it was debated. That bill finally passed the House of Representatives on the 27th of May, 1872. It came to the senate, was referred to the committee on finance, and not reported until December 16, 1872. We were not in a hurry about it. It was a great measure, a heavy measure; it was finally brought before the senate, and the senate, instead

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of providing for a dollar of 384 grains, struck that out and inserted the trade dollar. That trade dollar was only a legal tender for $5. It was not until years after, when that trade dollar came into general circulation here, that finally the legal tender quality was given to it.

The bill was brought up again before the senate for final consideration. No doubt the senate was somewhat weary of it. It had already passed the senate in the previous congress, had been read in full in all its copious length, and was then taken up and considered as such a bill is very apt to be which has once passed the senate of the United States. Finally, after debate upon several amendments, it was passed unanimously, and then, at last, I was charged with the responsibility for it, when I merely voted with all others for the bill.

The action of the senate was unanimous. The only important amendment made, I think, to this section, or to any section of the bill, was the substitution of the trade dollar for what was called the franc dollar. I believe the dollar provided for by the house was precisely the equivalent of 5 francs, or two half dollars of our subsidiary coin. Then it was made a legal tender for only $5.

There never was a bill proposed in the congress of the United States which was so publicly and openly presented and agitated. I know of no bill in my experience, which was printed, as this was, sixteen times, in order to invite attention to it. I know no bill which was freer from any immoral or wrong influence than this act of 1873. Not one single word of that act has been impugned, but there have been the false allegations

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made that the silver dollar was surreptitiously omitted from the coinage. No fact can be proved more clearly and fully than that is a falsehood and a lie by whomsoever uttered.

Now, to resume for a moment the history of the act of 1873: It was framed in the treasury department after a thorough examination by experts, transmitted to both houses of congress, thoroughly examined and debated during four consecutive sessions, the information called for by the house of representatives and printed six times by order broadly circulated, and many amendments were proposed, but no material changes were made in the coinage clause from the beginning to the end of the controversy. It added the French dollar for a time, but that was superseded by the trade dollar, and neither was made a legal tender but for $5. It passed the senate on the 10th of January, 1871 — 36 yeas and 14 nays — every senator from the Pacific coast voting for it.

It was introduced in the House of Representatives by Mr. Hooper at the next session. It was debated, scrutinized, and passed unanimously, dropping the silver dollar as directly stated by Mr. Hooper. It was reported, debated, amended, and passed by the senate unanimously. In every stage of the bill and every print the dollar of 412 ˝ grains was prohibited, and the single gold standard recognized, proclaimed, and understood. It was not until silver was a cheaper dollar that anyone demanded it, and then it was to take advantage of a creditor.

Now, it has always been within the power of congress to correct this error, if error was made; but congress has refused over and over again to do it. When

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the controversy arose about the Bland bill and the house of representatives proposed the free coinage of silver, the senate rejected it after a deliberate contest and substituted in place of it what is called the Bland-Allison act, which required the purchase of silver bullion at its market value and its coinage to a limited amount. Every effort has been made from that time to this to have the congress of the United States pass a free coinage act.

As I said before, shortly after the passage of the Bland-Allison act, and from that time on there was a constant debate going on in congress, and finally congress raised the amount of silver bullion to be purchased to four million and a half ounces by the act of 1890. The question then was between the free coin age of silver and the purchase of silver in a limited amount to be coined at the pleasure of the government as it was needed. The same question is upon us now in the difficulties which surround us, and it is time that the question should be definitely and finally settled.

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Chapter VI. — The Science of Money — By Senator William M. Stewert of Nevada.

Civilization is created by making common to all what is known or produced by each. There are two inventions of man which are essential to civilization, namely language and money. Neither is useful in isolation while there is but one individual to learn or to produce.

Spoken and written language make acquired knowledge accessible to all. Money commands services and all the products of labor, and makes the efforts of the whole human race contribute to the wants of each member of society. Equally with language, it is an essential factor of civilization, without which man would soon descend to the lowest condition of barbarism.

I am not aware that even a single tribe of men has been discovered which did not possess some kind of money. The efforts of barbarians to create money, which would enable them to enjoy the fruits of each other's labor, are very instructive. Cowrie shells, to this day, answer all the purposes of local currency among certain African tribes; Wampum, made from shells, fully possessed the money function among the American Indians; cattle were used as currency in ancient Greece; the money of Iceland in former times was codfish, and our Anglo-Saxon ancestors used slaves as money.

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With the advance of civilization these various devices are abandoned, either on account of their inconvenience, or because they are too abundant. The more civilized nations have used gold and silver from earliest history. The reasons why their use has been so long continued may be found in their indestructibility and limited quantity. Throughout history the almost universal use of the precious metals as money, has educated the world to the idea that the precious metals possess some intrinsic quality which makes them money, and to overlook the fact that their money function was given to them by Man and not by Nature. They do not consider the fact that if, in the beginning, there had been discovered some other material more easily obtained, more conveniently transportable, equally indestructible and limited in quantity, gold and silver might have remained commodities without any detriment to civilization.

It must be borne in mind that, at the time the precious metals were first used as money, and for a long time afterward, the arts of making, engraving and printing paper were unknown, and also that the means of limiting the quantity of money by law were very imperfect, on account of the frail and unstable character of government. Every civilized government of modern times has given numerous practical illustrations of the possibility of producing paper money possessing durability, more convenient in use, and more cheaply transportable than either gold or silver.

No fixed system or rule for limiting quantity by law has yet been established. This is the important question to be determined before the limitation, which nature placed on the quantity of gold and silver, can be

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abandoned. Before discussing the importance of limitation of the quantity of money, I will consider the function which money performs.

Money is a medium of exchange, an expression of price, and a measure of deferred payments. In the early stages of civilization the function of facilitating the exchange of the property of one man for the property of another, and designating the price of property exchanged, were the most important uses of money. But, at the present time, the measurement of time contracts, so as to do equity between debtor and creditor, is the paramount consideration.

When, by custom, agreement, or law, a common representative of things useful has been selected, such common representative may be exchanged for any property; because, by such custom, agreement or law, it is made representative of all property. The representative of all property may, or may not, be composed of material useful in itself, without regard to the function of representing other useful things; but it cannot be money, unless it is made an order for all things for sale, by some law, custom or understanding, which the people observe, either voluntarily, or by force of sovereign authority. It must be an unquestioned order or warrant of attorney, in the hands of its owner, for everything offered for sale, and for the discharge of all obligations payable in money.

The power conferred by this warrant of attorney, in modern times, is called legal tender; because the law requires creditors to receive it in payment for debts. The use of the precious metals as money, and the use, at the same time, of stamped paper of no appreciable value, has led to much confusion. The fact that the

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precious metals have uses, other than those incident to the representative value conferred by the money function, tends to complicate the subject, and leads many to suppose that it is the material in these metals, and not the money function, which makes them valuable as money.

Neither gold nor silver can be used as a commodity, and at the same time in its representative character, as an order for all things for sale, and a legal tender for the payment of debts. Anything which is clothed with the money function of a dollar, will pay a debt amounting to a dollar, and buy a dollar's worth of property — no more and no less — no matter of what material it may be made. It is the money function which makes it a dollar, not the paper, the gold or the silver. If there were no law, custom or understanding, by which the money function could be conferred upon anything but gold and silver, and gold and silver only could be converted into money without loss or charge, the amount of gold required to make a dollar, would be worth a dollar, and the amount of silver necessary to make a dollar, would also be worth a dollar. And if the money function could only be conferred upon a certain kind of yellow paper, and another certain kind of white paper, and all such paper, both the yellow and the white, could be converted into money without loss or charge, the amount of yellow paper required to make a dollar, would be worth a dollar; and the amount of white paper required to make the same amount of money, would also be worth a dollar, but the value of each dollar in commodities, would depend on the number of such dollars.

Rude nature, never has, and there is no probability

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that she ever will, yield from the mines too much of either gold or silver, or both, for use as money; consequently, it has always been, and still is, safe and expedient to confer the money function upon all the precious metals, offered for that purpose, by coining them into money.

This limitation of nature is called the automatic theory of money. From time immemorial, previous to 1873, with few exceptions, the great commercial nations have furnished their people with fall legal tender money, by coining all the gold and silver deposited at their mints for that purpose. But the case is very different where paper or any other material, which may be obtained in unlimited quantities, is endowed with the money function. While the precious metals were both used, a law providing how much of each should be required for a dollar, or other unit of money, and with a provision for the unlimited coinage of both, was all that was required. But where paper or other material of unlimited quantity is used, the law must not only provide how paper shall be converted into money, but must also determine what quantity of money shall be created from paper. In the former case nature determines the quantity of money; in the latter the quantity must be determined by law. In other words, in using paper in the place of gold and silver, the law of Man must be substituted for the law of Nature.

The automatic theory, of limiting the volume of coin, by the quantity of the precious metals, is not a perfect system. When the mines are productive, coin is more plentiful than when the output is diminished from exhaustion of the mines or other causes. In

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every age of the world, when there has been an abundance of coin, there has been prosperity as well; and, When there has been a scarcity of coin there has been adversity. Thus the automatic theory works well when the precious metals are abundant, and badly when they are scarce. It is not a scientific system, because such a system would furnish an adequate supply of money at all times, without regard to the accidents of mining.

For 1,400 years previous to the commencement of the 16th century it worked badly, because very little gold or silver was produced. For 300 years previous to 1810 the automatic system worked well, because during that period mines were reasonably productive. Between 1810 and 1850, on account of the Spanish-American wars, which nearly destroyed mining, the system produced ruinous contraction and hard times. From 1850 to 1873 there was a copious yield of the precious metals, and the progress of civilization was marvelous. In 1873 the automatic system was abandoned, and a scheme was inaugurated to regulate the volume of the standard money of the world by gold alone.

This undertaking has not been fully accomplished, but, in its approach to consummation, it has produced disaster. It was the most radical financial revolution ever undertaken in the history of the world, and one which, if finally consummated, must end in ruin. If the automatic theory had not been abandoned in 1873, the prosperity of the preceding twenty-three years would have continued, because the output of the two metals would have maintained a reasonable supply of money. The restoration of the automatic system, by

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the remonetization of silver, would secure future prosperity indefinitely, if the discovery and development of gold and silver mines should furnish an adequate production of the precious metals.

If modern civilization is to be maintained, the automatic system must be restored, or a more scientific system devised and established in its stead. Education and habit of thought favor the automatic system, which, as we have seen, consists in the use of both gold and silver, without discrimination against either. The abandonment of the automatic system has forced the inquiry as to what necessary functions gold and silver perform as money, which might not as well be performed by some other substance.

Since the arts of making, engraving and printing paper have been invented, a material has been produced, having every essential quality of gold and silver, for use as money, except limitation of quantity. Paper is sufficiently durable, cheaper as to cost of transportation, and more convenient than coin, except for small change. The only question remaining is, can any sure and safe rule be ascertained and established by law for the limitation of quantity.

General prices furnish a rule or gauge by which to determine whether the supply of money is sufficient, or otherwise. The volume of money in circulation, and all the property for sale, is reciprocally a supply and demand as to each other. If the average price of commodities is stable, the proper volume of money is in circulation. All authorities agree that stability in general prices is the end and aim of monetary science. Any increase or diminution in the supply of money produces a corresponding rise or fall in general prices. At the

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beginning of the sixteenth century, when there was only about $150,000,000 of coin in circulation in all Europe, general prices reached the lowest level in history. A hundred years after the discovery of gold and silver in Mexico and South America, the volume of metallic money was more than quadruple, and prices greatly advanced. Between the years 1810 and 1850, the cutting off of the supply of the precious metals, due to the Spanish-American wars, largely reduced the supply of money, as compared with property for sale, and prices fell over 50 per cent. The new supply of gold from California and Australia advanced prices, between 1850 and 1873, from 18 to 25 per cent. Since 1873, the reduction of the supply of standard money, by the demonetization of silver, has produced a fall in general prices amounting to fully 50 per cent.

These practical examples are in harmony with the law of supply and demand. A supply of money, in excess of the legitimate demands of business, is not desirable, because it disturbs the equity of time contracts, and enables the debtor to discharge his obligations in money less valuable than the money in circulation at the time the contract was made.

A constantly increasing volume of money is necessary to supply the increased demand, arising from the growth of population and business. A decreasing volume of money, as compared with the demand, is disastrous. It compels the debtor to pay in dearer money than he undertook to pay when he entered into the contract. It discourages enterprise, because property produced or acquired by the investment of money, declines in price, and thus the probability of profit upon any venture is diminished. When money

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is advancing in value, or, what is the same thing, is increasing in purchasing power, the human instinct of gain induces investments in money. Such investments are made by exchanging property for money, with a purpose to hoard it, or for bonds and other credits, which are investments in money futures. Investments of this character do not create wealth, but absorb wealth already produced.

When prices are rising, the same instinct leads to the acquisition of property. Property is acquired by purchase, and by production which results from the employment of labor. The employment of labor in production is the source of all wealth and prosperity. Speculators of every description, including dealers in money, in the language of Wall street, "go long" on those things, whether property or money, which are rising in price or value, and "go short" on those things which they believe to be on the decline. Since the demonetization of silver, money has been appreciating in value, and the competition to acquire reliable money futures has been so great as to induce people to accept very low interest, in view of the prospect of an increase in the purchasing power of money invested. The decline of prices has been so serious, as to induce prudent men to go short on property, by declining to engage in new enterprises, and by converting their property into money futures. Enforced idleness, produced by the enhancement of the value of gold, or what is the same thing, the fall of Prices, has withdrawn the progressive and the ambitious from productive undertakings, and has led them to seek wealth by investment in money futures.

An infinite variety of causes affect progress and

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prosperity. Wars, pestilence, famine and bad government, are common afflictions of the human race. But in the absence of a known and great calamity, contraction of the circulating medium is the only instrument of universal misery. No form of civilization or government has been able to withstand its blighting influence, or to survive its long continuance. The unlimited use of gold and silver, under present conditions, would rescue the country from pending disaster, and, if the mines should continue productive, would secure a prosperous future. If, ignoring well known facts, such as, that the quantity of gold coin in existence is constantly being reduced, through abrasion and loss, and, that there is not any reasonable prospect of a future production of gold more than sufficient to supply the arts, the money powers shall continue to resist the restoration of the automatic system, and to insist that the volume of money of ultimate payment shall be reduced to the narrow basis of existing gold, an effort must be made to secure a more scientific money system, which would dispense with the use of the precious metals altogether.

A paper money, representative of all property for sale, clothed with unlimited legal tender quality, redeemable in debts and taxes, and of a proper volume, would be ideal money. If such paper money were established, and the Secretary of the Treasury were required to pay it out in lieu of all other money now in the treasury, or hereafter to be received; if he were further required to destroy all other paper money of whatever description, in, or to be in, the treasury; and to sell, as bullion, all gold and silver in, or to be paid into, the treasury, and to replace it all with the newly-established

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paper money, the volume of circulation in the country would, thereby, be neither increased nor diminished; but it would consist of a single circulating medium, which, to the exclusion of all other money, would be clothed with the money function and legal tender power.

Does anybody doubt that the only money which would pay debts and taxes, in the richest country in the world, would be the best money? Every resident, and every foreigner, desiring to buy property, pay debts or taxes in this country, would be compelled to have it. Would not such a demand be sufficient? If it be contended that the present supply of money is adequate, it cannot be maintained that it will continue to be so. The growth of population and business constantly increases the demand for money; and the supply must also be increased to prevent contraction. The percentage of increase of population is known, and a like per cent, of money could be added, by covering into the treasury a further amount of representative paper money, in lieu of taxes, and the paying out of the same for current expenses. The increase of business might require a greater percentage of increase in the volume of money, than the growth of the population would indicate. In that case it would be necessary to resort to that certain and reliable gauge of the volume of money, which is found in the general range of prices. Competent and reliable statisticians might be employed to investigate prices, and ascertain whether general prices were rising or falling. If rising, the amount of money covered into the treasury, from time to time, might be diminished, and, if falling, an increased supply must be found, until stability in general prices should be

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stored and maintained. It is the volume of money which regulates general prices, and, by the rise and fall of general prices, any excess or deficiency in the volume of money in circulation, is shown.

The reason why general prices, and the volume of money, respond and correspond to each other is because the money in circulation, and all the property for sale, is reciprocally the supply and demand for each other. The confusion which exists with regard to the relation between money and prices arises from a comparison of isolated articles or commodities, with money. The demand for money is equal to the demand for all other things; because it is the universal order for property; but the demand for each kind of property is limited. Its value, as compared with other property, and its price in money, depend upon the supply and demand of the particular kind of property. The fluctuations, in price or value, of every description of property in obedience to the law of supply and demand, have no effect upon the aggregate value of all property offered for sale; for that value is dependent, solely, upon the total supply of money.

Whatever credit devices may be invented, whether government or bank currency, redeemable in gold, or private checks, bills of exchange or other promises to pay, the volume of the circulating medium must ultimately depend upon the volume of money clothed with every money function. Money redeemable in other money is simply a form of credit. Credit is limited by the means of payment or redemption. Since prehistoric times and up to the year 1873, the fabric of credit, including currency redeemable in coin, rested on both gold and silver. That part of the foundation which

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consisted of silver, has been removed, and the silver coin, which formed at least one-half of the base, has been converted into credit money, to be redeemed in gold. In round numbers, the gold coin, silver coin and paper money of the world, are about equal to each other. The pyramid was firm and substantial while gold and silver was the base, and constituted two-thirds of the fabric; and while paper, the apex, represented only about one-third. It now stands: gold coin, one-third, for the apex; and silver and paper, two-thirds, for the base; but the pyramid is reversed, with the apex at the bottom.

The load of credit resting on gold must be greatly reduced to correspond with the gold standard, and that is the process now going on, which has produced the current financial "squeeze," and to which the authors of the ruin point as an "object lesson."

The hope of relief by increasing debts, or issuing more currency redeemable in gold, is vain. The inflation of prices, by issuing paper redeemable in gold, without gold for redemption, must end in panic and collapse. It would be like attempting a permanent cure of delirium tremens by an increased indulgence in strong drink. The grasp of gold contraction can only be temporarily relieved by credit devices, as a patient is sometimes revived when suffering from the effects of alcoholism, by a cocktail in the morning, only to be sunk to a still lower depth of depression by the inevitable reaction later in the day. Banks are the storm center of panics. The squeeze of 1893, to force the gold standard, pumped the wind out of $4,500,000,000 of bank credits, based on $500,000,000 of reserves. But the "object lesson"

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has not silenced the demand of the gold trust for more credit and less money.

The alternative of scientific money, of material other than gold and silver, or the restoration of the automatic theory, is presented to the creditor class. The revolution which they have inaugurated to destroy the automatic theory, must either be arrested by the restoration of silver, or by the invention and establishment of a better system.

The preliminary effects of the gold standard contraction have paralyzed enterprise and destroyed the prospect of future credits. It is now destroying existing obligations, and, when it's deadly work shall have been fully accomplished, all bonded debts will have been liquidated by repudiation and bankruptcy. If blind greed is to be the only guide of the money powers in the future, as it has been in the past, the horrors of universal ruin and the disorganization of society may be realized before the work of reconstruction can be begun. The hope still exists that there is sufficient intelligence in the masses, to direct their dormant energies in a mighty effort to break the chains of contraction, with which fraud and avarice have bound the limbs of enterprise. If this hope may be realized, the civilization of the Nineteenth Century will escape the abyss of degradation and want in which all preceding civilizations have perished.

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Chapter VII. — By Senator Wm. B. Allison, of Iowa.

It has been disclosed to us that between 1860 and 1890 our population had more than doubled, notwithstanding in the mean time we had a most desolating and devastating civil war. I was gratified to learn that between 1860 and 1890, the wealth of this country had grown, not in proportion to its population, but tad grown fourfold in wealth from $16,000,000,000 to $64,000,000,000.

I was also gratified to learn that during all this progress of development and growth, the West and the Northwest have been specially favored in that progress; that the growth of wheat from 1871 to 1892, a period of twenty-one years, had increased from 240,000,000 bushels to 611,000,000 bushels; that the Southern States, which had been overrun, as it were, by our armies, with devastation in their pathway, have so far recovered that from 1870 to 1892 they had increased the growth of the great staple crop of cotton from nearly 4,000,000 bales to more than 9,000,000, vales, and that nearly all other agricultural products had increased in the same proportion. I was also gratified to see that during that time the exchanges in fifty cities of our country had disclosed the enormous growth of 862,000,000,000 per annum.

It occurred to me that the question which we are now debating is, in some of its aspects, if not in all,

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the most important question which can engage the consideration of the American people. This great production, this great population, energetic and active as it is, all receiving either wages or the result of its products, can not engage in the ancient methods of barter. We must have some measure whereby we can value these exchanges and products, and the question in which we are engaged is whether we shall at this time, by direct or indirect legislation, change the measure of value in which all these products are exchanged, and by which all these wages are measured and have been exchanged and measured since 1879, and under which all this prosperity, or practically all of it, has grown up.

It seems to me that, in the discussion of this question, it is our duty, first, to ascertain exactly what is our condition as respects coinage and what we should propose to meet it.

We have had since 1792 in the United States laws respecting the coinage of money and the regulation of its value, and also regulating the values of foreign coins. It is due to the men who framed those laws that we should say that when they framed them they undertook — believing as we believe, that it is better to rest the measure of value upon both metals than upon one — they undertook with the utmost care to ascertain what? To ascertain the relative value of the two metals, if they were to use them both in measuring the values, and the products and the labor of our country. This could be done by one of two methods, either to fix a ratio between them, with free mintage at the commercial ratio, or make one of them the standard of value and coin the other in limited quantity for domestic circulation only. They chose the first as the only

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true method. So careful, history tells us, were they in that measurement to ascertain the true ratio, that Alexander Hamilton, the then Secretary of the Treasury, took 1,000 minted Spanish-milled dollars and weighed them in the scale to determine the amount of the abrasion which they had undergone by means of circulation, so as to ascertain the average value of these abraded dollars in our own circulation, because it is notorious that our circulation at that time was principally silver, and the silver was chiefly what were known as the Spanish-milled dollars, those coined in Spain and those coined in the Spanish possessions on our own continent. After weighing these dollars the average was found to be 371 grains of fine silver.

In order to determine the exact ratio between silver and gold — because it was intended to use gold as well as silver — a further examination was had to ascertain what other nations had taken as the relative ratio between the two metals, silver and gold, and in order to make that ratio what they believed to be the exact commercial ratio they added a quarter of a grain to the average of the Spanish-milled dollar and fixed the silver dollar at 371 ź grains of fine silver. Upon that principle, thus based, they authorized the mintage of both gold and silver.

All the nations of Europe were then using either gold or silver, with free mintage of the standard metal, or using both metals as a standard, with free mintage. They did not all have exactly the same ratio, but the variations were slight, and there was then a universal demand for both metals at the mints. Therefore, away back in 1792, we started out upon the idea of a double coinage and a double measure. Whether that was wise

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or otherwise, I shall not now stop to discuss. That double measure and standard, modified in a way I shall presently speak of, continued until 1873, when by the act which has been so often alluded to, we changed our standard to the single standard of gold.

Because the relation in Europe, as developed a few years afterwards, disclosed that we had fixed a wrong ratio, overvaluing silver, our gold left the country until, as is stated in the reports made to the house of representatives and to the senate in 1834, there were scarcely a half million dollars of gold in the United States.

It is stated by Albert Gallatin in his testimony before the committee having that matter in charge in 1833, that our gold appreciatively departed beginning in 1821. But a further examination of that subject discloses that our gold commenced departing long before that; and although Europe, during the period from 1803 to 1815, was desolated by the allied armies and by the armies of Napoleon, although we ourselves had passed through a war with Great Britain, it was disclosed that gold went from us so rapidly that in 1821 the attention of congress was called to the subject. Indeed I believe the attention of congress was called to it as early as 1818.

A resolution was introduced in one branch of congress for the purpose of remedying the defect in the ratio adopted in 1792, and Mr. Gallatin, in his testimony, stated the fact that Great Britain had then established the gold standard and started upon the pathway of specie resumption upon the gold standard. He stated that this demand went on and on long after Great Britain had filled her coffers and her banks

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the surrounding nations with all the gold that she needed, and up to the time of his statement made in 1833.

The discussion of the failure in 1792 to make the correct ratio led to a long discussion for a change of ratio. That change of ratio was discussed in these Houses, and resolutions of inquiry were adopted addressed to the Secretaries of the Treasury. In 1829 Samuel D. Ingham, then Secretary of the Treasury, made an able report upon the subject to the two houses of congress, and, judging from that report and from his administration of the treasury, Mr. Ingham was a man of competence in that high place. He made a report in which he stated the fact that our gold coins had been swept away from us, that our people desired gold, and that it was important, if we were to have gold as a part of our circulation, that we should change the ratio. A large amount of testimony of experts, of men of the highest character and learning respecting the true ratio, was taken at that time and in subsequent years. It was shown that from 1803 France had had the ratio of 15 ˝ to 1 and that other nations had different ratios; but that the French ratio was the prevailing one because of her central and pivotal position in the trade of Europe.

Whilst Albert Gallatin, who had given great attention to the question, insisted that the true ratio should be 15 ˝ to 1, in accord with the French ratio, I believe that Mr. Ingham insisted the ratio should be 15.625 to 1 — mark it, 15.625 to 1, not 16, not 15.80, but 15.625 in order that there might be no mistake as to the delicate and careful fractions which should disclose the true commercial and mint ratio between the two metals.

Others insisted that 15.80 was the true ratio. Then

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it was said that, owing to the methods of communication between one country and another, and especially because we were in one continent and Europe was in another, we could afford to make a little variation from the exact, truthful ratio which science had disclosed to be the equilibrium between these great metallic forces in the mintage of the world.

So I have no doubt the idea prevailed that we could make the ratio 16 to 1, and that the shade of difference between 15.625 or 15.80 would not enable other nations to gather from us our gold or our silver, and we could still hold them both at a parity in value in the metallic circulation of our country. We then made the ratio 16 to 1 upon the idea that, taking all things into consideration, we could safely do so, and that we should be certain to retain all the gold and all the silver to which we were entitled in making the exchanges of the world and for our internal exchanges as well.

What was the result of that slight difference between 15.625, and 16? It was that our silver — which is the money of the people — went out of circulation, and we were relegated to what we have been too much relegated recently, the substitution of one-dollar bills the silver of our country. The silver oozed out in the course of commerce, and people were obliged to substitute something in the place of the silver dollars and one-dollar bills took their place. So it is true that in 1853 there was practically no silver money in the United States.

I pause here to say that I have heard it frequently stated that, notwithstanding our mints were open from 1792 to 1853, or 1873, if you please, to the coinage of

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silver, during all that period we only coined 8,000,000 silver dollars. All our fractional coins, half-dollars, quarter-dollars, and dimes, were a legal tender for any sum until 1853. One could have gathered up the dimes, the quarters, and the half-dollars and have made a payment in those from 1792 to 1853; and of those coins there were nearly $130,000,000.

It may be truthfully said, therefore, that during all this period it was the aim and purpose and effort of our people to utilize both silver and gold, without discrimination against either. But in 1853, instead of changing our relation to that of the commercial nations of the world, as in my belief we ought to have done, and yielding, as we ought to have yielded, to what was known as the bimetallic relation of France and of Europe generally, we undertook to bridge over the situation by coining fractional dollars, depreciated 8 per cent., in order that we might keep them here. That was in 1853. That was the time to have established silver permanently in our circulation. Surely to the Republican party can not be imputed that mistake, because both houses of congress were wholly Democratic.

Our foreign coins were also a legal tender up to 1857. For the encouragement of our mints they were then declared to be no longer a legal tender. Eighteen hundred and sixty came, and with it came the war, which lasted four years; and with that war came a depreciated paper currency.

So, although both gold and silver were our legal standards of money, as they had been since 1792, by the exigencies and misfortunes of war, both those metals disappeared from our circulation, the one being held

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here to some extent, and the least valuable, for the purpose of paying duties, because under our law we had required the duties upon imports to be paid in gold, or in coin, which was then gold. We did not use the words "gold coin," but we used the word "coin."

Gold being the cheaper metal, of course remained here during the period of the war to execute the functions imposed upon it by the statute — the payment of duties and the counter payment by the government of interest upon the public debt.

Now, I have gone over this history to show that the people of the United States during all this period favored both gold and silver; that they sought to establish a ratio which would retain both; that they did this with the utmost care, dealing in the minutest fractions to accomplish the purpose, and which they believed to be essential for its accomplishment. This brings us to the year 1873, which seems to be a sort of era in this great question. I agree that it is so, because, although our depreciated paper was the only money in circulation, except, as I have already stated, for the payment of duties and for the payment of interest on the public debt, we dealt with the coinage law, and whilst we were dealing with it, contemporary almost with that dealing, all Europe dealt with it as well.

To Europe this action was of the utmost present importance. In the United States we were on a debased currency, in 1873 still far removed from specie payments, and our people were absorbed in other questions and failed to realize the ultimate effect of a change of standard. But it is not believed that it was even then known in Germany that her action and the action that followed in the Latin Union would lead to such

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momentous changes in the future. Germany had wrested from France a thousand millions of dollars as a condition of peace. She had consolidated the German Empire and made it one instead of many states. All of these states were on the silver standard. It was thought then to be a great stroke as respects German unity if they could not only have a common ruler, a common Reichstag, but a common currency, and that they should make that currency as distinguished as possible from every kind of currency they had hitherto held. Therefore, they started out with the mark, making it the unit of value, and making gold the only standard where silver had been the only standard before.

Germany, as we know, lies geographically in the neighborhood of surrounding millions of industrious and active people. Her enemy, France, lies upon one side and Belgium and Italy lie in between. France, Belgium, and Italy, the Latin Union states, had the double standard, and they had millions upon millions of silver under that double standard. Germany said, "This is our time to get rid of our $500,000,000 of silver and allow the mints of the Latin Union states to absorb it, and we will take their gold." The Latin Union states, alert as they were, saw that it was no part of their policy to pull the chestnuts out of the fire for Germany, and therefore they immediately agreed that they would coin only a limited quantity of silver instead of having their mints open as they had been open before; and that limit of quantity, extending for a few years, developed itself into the absolute closing of the mints of Europe to the coinage of silver. So it is at this day and hour, and for fifteen years there has

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not been a mint open to the coinage of full legal tender silver in all the European states.

Now, I want to go into this history a little. It so happened that at the same time we changed our unit of value from gold and silver to gold. The year 1873 is a starting point, I agree, in all these debates and in the question in our country. It may be that it was not known in 1873 in the country generally that that change was made. It is not strange that it was not known, because at that time we were wholly upon a paper basis; but it is true that later on, and very soon, it was thoroughly known in our country. It can not be assumed that the men who studied these questions and were familiar with them should have been ignorant of that action in 1875. It is not true that they were ignorant of it in 1876? In 1876, with a presidential election impending and with a full knowledge by the people of the United States that this great wrong had been committed, if it was a wrong, the members of the two houses of congress then in session (and it was my fortune then to be a member of the senate) discussed these questions over and over again, and many bills were introduced and many amendments were proposed on the subject.

Now, then, 1876 came, and with it came a growing disparity between the two metals. The trade dollars became somewhat plentiful on the Pacific coast, and at the instance of the Pacific coast and its representatives then in congress, the power or quality of carrying silver to the mint was taken away by our statutes, and the question of the quantity of dollars to be coined was remitted to the Secretary of the Treasury, and then they could only be coined for export.

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So one essential quality of free mintage was taken away in 1876 and not in 1873, and at that time fortunately or unfortunately, as the case may be, one branch of congress was Democratic and the other branch, the senate, Republican.

I do not believe in the policy of piling up bullion in the treasury of the United States and holding it there uncoined. I believe that that is a most dangerous policy to silver itself. It is a menace to the price of silver, and it has something to do, in my judgment, with the depreciation of that metal.

When a bill for the free coinage of silver was introduced, Wall Street was frightened and stocks went down a point or two. In Europe, when it is suggested that we are going to sell the silver in the treasury, what is the effect on the price of silver? What is the effect of a mere suggestion by a prominent man in this country, whether he be in congress or not, that the silver bullion held in the treasury of the United States should be sold for gold? We have there now 122,000,000 ounces of it. That would carry down silver as rapidly as it could be carried — taking into account the cost of its production, as rapidly as did the action of India. The more we put there the more dangerous it is to silver, unless we follow it up by coining that silver and strengthening our gold reserve.

For myself I am in favor of coining every dollar of the silver that is in the treasury. It ought to be coined. When I say that I do not mean now, presently, but it should be understood as the policy of the government that we will not have in the treasury stored away there silver bullion for sale.

I should be in favor of coining it as soon as practicable

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It might be wise to leave it for a short time for other reasons pending action in concurrence with other countries. But I am for coining it and going on with its coinage. That must be done. Not one dollar of that silver can ever be sold without the sanction of congress, and that sanction I am sure will never be given. Therefore as we pile the silver up in the form of bullion we put in menace the price of silver everywhere, and it should be coined.

There is another thing to be noticed. By the policy of 1878, which has not yet been changed, we practically agreed to maintain silver at par with gold coin. That was a good pledge to put into it, but it was a pledge already involved in the policy and in the law itself. We have put into the treasury under the coinage act of 1878 $70,000,000 in round numbers, not raised by taxation, but in the form of seigniorage or profit, and with that money we have purchased 4 or 4 1/2 per cent bonds for every dollar of it, and thereby released to that extent so much of the interest-paying debt.

Are we to take that great surplus fund called seigniorage from the men who have our silver certificates and our silver dollars and not use it to maintain its parity with gold? It is said that there is in the treasury a seigniorage of $60,000,000 over and above the coinage that is necessary to redeem the treasury notes outstanding. If there is, does not the same equity require that that seigniorage shall be utilized and used to maintain the parity in value between the two metals which we declared positively in 1892 we would maintain?

What I have said, I think, tends to show — first, that all history discloses when a small divergence is made

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from the true commercial ratio, the result is, whatever your established ratio by statute, you are upon the ratio which represents the overvalued money. We must not forget that the commercial ratio is fixed by the demand for silver as money, that demand having been greatly diminished by legislation in Europe. It must be restored by the same method and through the same processes.

I undertake to say that it is absolutely impossible for us to, deal with the question of ratio at this time on any bill. A ratio of 27 to 1 or 28 to 1 would be an unwise ratio; for, with silver fluctuating 20 cents in a single day, how can you make a ratio that will be a just ratio?

The moment the resolution of the Indian council stopping the free coinage of silver was adopted away up on the mountain slope of the Himalayas, and was telegraphed to London and to New York, silver bullion went down 25 per cent. Then it went up 15 per cent. in the next week. Can we make a ratio which will measure all values and all debts and all credits on the basis of a fluctuating value like that? To merely state the proposition is to show its impossibility.

In 1876, when the price of silver bullion went down, it was noted as one of the reasons why it went down that England was selling council bills at the rate of $75,000,000 per annum upon India, payable in rupees.

Here is India, which is the entrepôt to the Orient, so far as its trade is concerned. Here is the trade between India and China and the strait Settlements, and the region round about — without going over them all — which amounts to $1,000,000,000 per annum. I do

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not mean their internal trade, but I mean foreign trade of purchase and sale between countries who trade with each other to the extent of $1,000,000,000, computed in gold at the present price of silver.

Here is this $1,000,000,000 of external trade computed at the present depreciated prices, all of it sold in countries on a silver basis, and all of it sold since 2877 upon a fluctuating exchange bearing upon the price of silver.

England, in addition to that, demanded from India Ł15,000,000 in exchange in the form of council bills, and by that means she prevented India from absorbing the silver which she would naturally absorb, and which she did absorb prior to 1873 when the par was dislocated. So these council bills came in, and while we bought 4,500,000 ounces of silver a month England practically sold 9,000,000 ounces per month. During all these years while we bought silver she sold silver, or its equivalent, in the form of council bills, and she goes into the markets of London with these council bills in competition with silver bullion, and thereby bears it clown if she chooses, and reduces the exchange by selling the council bills at a lower rate than the bullion price of silver. She can do that. Then the bullion price goes down, because the silver bullion gathered at London is the silver bullion that goes chiefly to China and to India.

The stocks of gold in the banks of Europe and in the United States aggregate Ł309,000,000, or $1,500,000,000.

I do not know how much of that is held for war serve, but it is well known that France, Germany, and Russia have large reserves of gold, the two former an

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amount beyond any necessity of maintaining at par their paper money. It is well understood that they have strengthened these reserves preparatory to the contingency of war, and that Russia, although wholly on a paper basis, has lately added very largely to her holdings of gold, and I have no doubt a large sum is held in the countries I have named, not to maintain the par of paper money, but for war purposes.

That all the great interests of this world can be carried on by the use of gold alone as standard money is, to my mind, impossible. I believe that the $3,500,000,000 of full legal tender silver money in the world will continue to be legal tender money, and I believe that the $165,000,000, or whatever may be the amount which we have now in the United States of full legal tender silver money, will so continue. We have in the United States to-day one-sixth of the coin legal tender silver money of the world, and yet it is said that we are in favor of the single standard of gold. The single standard of gold is impossible, whether we favor it or object to it. This $3,500,000,000 of full legal tender silver money will, in my belief, remain as legal tender money.

It may be true that the business of the world can be carried on with units, whether silver, gold, and paper. But I am speaking now of the general situation as it is now, with debts as they are, obligations as they are, property as it is, currency as it is, and all the relations of civilized countries as they are. With these conditions refining, both gold and silver must be used.

I wish to say a few words regarding my belief as to the best way of dealing with the present situation. I believe the way to deal with it is to deal with it as we

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deal with other things; that is, to deal with the peoples who, like ourselves, are interested in the subject. Here is $3,500,000,000 of full legal tender silver money in 3 the world. I will not say every dollar of it is full legal tender, but most of it is full legal tender money with less bullion in it than the bullion in the coins of, the United States. This money is scattered throughout the whole of Europe. It permeates every bank and every business relation of Europe; it leads into all their debts, into all their credits, into all their transactions. Are not these people interested with us in the rehabilitation of silver?

We have heard it said that this country of ours is big enough and strong enough to deal with all these questions independently and without the concurrence of other nations.

It is said we should not engage in agreements respecting this subject. Why not? There is not to-day a civilized nation on the face of the globe with which we have not agreements about every conceivable thing relating to commerce. We have made treaties over and over again about matters related to our commerce and our trade.

We were persuaded to engage in a convention with European powers respecting the situation of Congo in Central Africa, and we followed to the early recognition of the flag of a private association, which association was afterwards turned into the State of Congo and following this we have made most valuable treaties with all the European nations with respect to the trade of Central Africa. We have made over and over again treaties whereby we agree that certain articles should come into the United States at certain rates of duty

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upon the condition that certain other articles from this country should go into those countries at certain other rates of duty, and yet there is in the congress of the United States, under the Constitution, power only to levy and collect taxes and imports. That was done long before any provision concerning reciprocity was inserted in what is known as the McKinley tariff act.

We made a few years ago a most important treaty with Great Britain, submitting to arbitration a single question relating to the seal fisheries in Bering Sea, and selected two of the most eminent men of our country, Senator Morgan, of Alabama and Associate Justice Harlan, of the Supreme Court, as arbitrators on the part of the United States.

This great tribunal reached a wise solution of this difficult question. But this solution involved not only arrangements between the two countries but with other commercial countries.

Our statutes and our treaties are full of illustrations, and yet it is said the dignity of this country is imperiled if we treat with other nations as respects the common measure of value which shall make all international exchanges of products and fix a ratio between the precious metals which shall utilize both metals in making these exchanges. We have seen the fluctuations which have made unstable all exchanges with silver-using countries, and have only lately seen that by the action of India, a foreign country, our silver producers have had their product fall in a single day 20 cents per ounce, to recover again 12 cents per ounce in a few days, when that would have been impossible if we had had international action on the subject.

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No more important commercial arrangement can be made than that which will secure the common use by commercial nations of both gold and silver as international money.

Is it of no importance to the State of Colorado and the surrounding mineral States to say that the Indian council on the Himalayan Mountains can affect the value of their property to the extent of 20 cents upon each dollar of production? Is not that worth dealing with foreign nations about, if thereby these great changes can be avoided?

But it is now stated that because we propose to deal with this question internationally, we are belittling the American Republic. There is no greater question for the people of this world than the question of money; there is no question which affects more deeply all the trade of all the nations than the question of money. Therefore there is nothing that should so engage the attention of commercial and civilized nations as that question.

A statement made by the Secretary of the Treasury in 1830, I think clearly presents the importance of this question, showing that this is not a new suggestion.

It is House of Representatives Executive Document No. 117, Twenty-first Congress, first session, dated May 4, 1830. The then Secretary of the Treasury said:

"A conventional agreement among the principal commercial nations of the world which desire to use both gold and silver as standards of value, fixing the lame relative values, might avert such consequences."

That is the consequence of one or the other metal

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going out. The Secretary was showing that gold was going out.

"But the regulation of the coins of a country is regarded as a high attribute of sovereignty; and until higher objects of ambition shall overcome the folly of maintaining mere dignity at the expense of public good it is not to be hoped that such a measure would be favorably considered."

What he stated as wise for the nations had been practically adopted by the European states centuries before; namely, to adjust the ratio between the two metals in each state, so as to conform as nearly as possible to the commercial ratio prevailing in the surrounding states. This was done by Locke in 1666, and fifty years later by Sir Isaac Newton, although both these great men believed that the unit of value should be based on silver, that metal being least liable to fluctuation as compared with gold.

Now, in this year, with these perturbations in the price of silver, with one set of nations in the Orient with their thousand millions of commerce with each other and with the nations of Europe and the United States, and with their exchanges now at a discount of from 40 to 50 per cent measured in gold and fluctuating every day in the markets and exchanges of the world, dealing in products which we are bound to use, and which we see upon our tables every day, with no house so humble that it does not have daily upon its table some of their productions — dealing with those people, as we are, upon these great commercial questions, why is it that there should not be between us and them a common measure of value? Yet that proposition is whistled down the wind by statesmen in congress.

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A suggestion has been made respecting the conference at Brussels. I wish to say that in 1878 we put into a statute a provision that there should be a conference of nations with a view to a common ratio with free mintage at such rates. The conference failed, although the principle was agreed to. An examination of the text of the resolutions adopted by the conference of 1878 will show that they declared it was a desirable thing for the nations of the world to use both gold and silver as money measures of value.

It is my belief that if this government will undertake the policy of international arrangement regarding silver and gold, that policy will be accomplished and within a reasonable period we will be able to restore the parity between the two metals, and practically rehabilitate silver. This is my belief, and that is the permanent and wise solution of this question. In the meantime, it seems to me, we shall have to drift along as best we may, purchasing from time to time and coining all the silver that we can use in our domestic circulation maintaining the parity, and I have no doubt we can absorb a considerable amount beyond that which we now have. My belief is that if we are to have an international agreement, we must make it appear to the nations of the world that we alone do not mean to take care of silver. That is the salient point. There are men in Europe of the highest character who read every speech which is made in congress, and who gather their opinions from our public documents, who believe that sooner or later the government of the United States will go to free coinage and thus relieve them from their situation, and relieve us of our gold as well, and this is a constant hindrance to an agreement.

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The recent action of India will only hasten the consideration of the subject by all the nations, whether they use gold alone, or both gold and silver.

I am not thoroughly familiar with public opinion in Europe upon this question; but I have no doubt that the public opinion of Europe is that a conference of nations should assemble and deal with this question, and when I say that I do not exclude Great Britain, All these nations are deeply interested in the subject. They can not afford any more than can we to have silver obliterated. There are more than $1,200,000,000 of full legal tender silver in circulation in Europe, and they are interested, as we are, in placing this silver on a par with gold in international exchanges.

It has been said that England is against us because she is a creditor nation. Those who have studied the tendency of public opinion know that many of the most influential Englishmen in public life and in the universities believe in what we call bimetallism; that is, the fixing of a ratio between the two metals whereby there shall be free mintage in concurrence by the commercial nations. There is a silver party in England, and it is a strong party and a growing party, and in my belief, when opportunity is given, will be a triumphant party, favoring the utilization of silver as well as gold.

It may be that those enjoying annuities, those having long investments, will cling to the opinions and views as expressed by Mr. Gladstone, but it is certain that nearly all the men engaged in commerce and in the manufacturing industries of Great Britain, and all the great agricultural interests of Great Britain — these three great productive classes of Great

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Britain — are to-day in favor of utilizing silver and gold.

It has been demonstrated over and over again by Mr. Balfour, by Prof. Foxhall, by Mr. Grenfell, and by other writers, many in number, that the creditor interests of England are not to be damaged by the union of the two metals, that it will so revive the trade of the world and the business of the world as to overcome and overbalance all that may come to a few annuitants or interest-receiving people as respects the great credits of England, and in addition their investments will be made more secure.

So I state here as my belief that if we will have patience upon this question and deal with it in a states-manlike way, as was proclaimed by Mr. Ingham more than fifty years ago; if we will dismiss from our minds our prejudices and our party leanings and deal with it as a great question involving our country in its integrity and in its interests, we shall soon see the time when silver and gold will travel side by side. I have no idea that the accidental production of $100,000,000 of silver now as against $50,000,000 of gold, or $100,000,000 of gold hereafter against $50,000,000 of silver weighs as a thread in the balance. It is not the overproduction or underproduction of these metals that affects them. There is lying behind the silver in its pathway now nearly $4,000,000,000, of silver that is only a local currency, and that in a sense drags down the annual production of our mines.

Thus believing, I know of no interest in the United States that can possibly favor the suggestions which have been made which lead to a silver standard and which will bring a silver standard. Surely, it is not

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the purpose of those who want a silver standard, or who want to rehabilitate silver, to change the measure of value of all the things we consume, of all the wages of labor, of all production, of the relations of debtor and creditor, whatever they may be, since 1880, if you please, when the large debts were incurred. Shall it be said that we favor the scaling down of debts? Shall it be said that the $6,500,000,000 of railroad bonds shall be scaled down?

When you come to the question of debts of twenty years ago they are very few indeed. It is stated by those who have examined the subject that debts on the average are only nine months old. I appeal to the experience of any business man. How does he manage to continue to have the same creditor for a period of twenty years? These changes come and go as the tides come and go. The railroads that have borrowed $6,600,000,000, it is said, and mortgaged their railways, never expect to pay a dollar of it, except in the form of a renewal of those mortgages.

Those mortgages are as much a part of the system of railways in every country on the face of the globe as are the cars or the engines. As their 6 per cent, investments mature, if the rate of interest is lower they refund the loans; and so it goes on and on forever, with increasing celerity and activity as respects railroads. So with the business men of our country, our savings banks, our manufacturers, our farmers, our producers. Debts created this year or five years ago are paid to-day. They are paid by a new loan at a reduced rate of interest or in some other form by accumulation of earnings. If you go back thousands of years it is found that the reason originally or one of the great reasons,

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why silver and gold are stable relatively as respects the quantity, that whatever fluctuations or changes there might be, or depreciation or appreciation in value of the metals, would be such an appreciation or depreciation as would spread itself over a series of years and thus do no harm to anybody.

You may take silver and gold outside of their use as money and they are worth very little in comparison, although it is said now that one-half of the current production of gold is used in the arts; but for this purpose alone there is an accumulated supply which would last for fifty years. I have no doubt that more than that is so used, and it is for that reason, among others, that I believe it will be only a short period before there will be a full rehabilitation of both metals.

So believing, and believing that the industrial interests of this country, its wage-earners, its farmers, its producers in every section and every State of the Union will be injured by transferring ourselves suddenly from the standard of money upon which all our obligations have been made and all their arrangements are being perfected is a mistake, and a mistake greatly to their injury.

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Chapter VIII. — By Hon. J. Sterling Morton, Secretary of Agriculture.

When one declares: "I am in favor of the free coinage of silver at the ratio of sixteen to one," does he not admit that he is a gold monometallist? Is not the "one" spoken of in his declaration a gold unit?

The farmers of the United States evolve from the earth by hard labor all cereals, fruits and other food. The prices of these products are determined by the relation of the supply to the demand for them. Farmers have never called upon the legislative power of the government to establish remunerative prices for the results of their labor. The miner and smelter, by the same sort of exertion, evolves from the earth silver bullion; and why should the people evoke for him the authority of law to establish for his product an artificial price? Conscientiously and consistently, for many years, many citizens have antagonized a protective tariff, because it, by law, puts an artificial price on the things they have to buy; and it seems now as though the same citizens ought to oppose the free coinage of silver at the ratio of 16 to 1, because, by law, it puts an artificial price on silver. When silver bullion is selling at less than 70 cents per ounce on the market, its free coinage into 412 ˝ grain dollars, which are made a legal tender for all debts public and private, forces it upon the people at the rate of $1.29 per ounce. Therefore,

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is not the free coinage of silver at the ratio of 16 to 1 the application of the protective tariff principle to domestic affairs? Ought not all those who heretofore antagonized the protective system also, by the same reasoning, to antagonize the free coinage of silver?

Why should any good citizen advocate a monetary system which will compel the gold miner to dig until he has secured 100 cents' worth of that metal, at its bullion value, before he can demand a dollar for the same; and will at the same time allow the silver miner a dollar for every 50 cents' worth of silver bullion that he gets out? The farmer never gets a dollar for 50 cents' worth of wheat. Why then should he advocate the free coinage theories by which the miner or owner of silver bullion is to receive more than a dollar for every 50 cents' worth of that metal? Is not the free coinage of silver, as proposed to-day, a scheme for placing a premium upon mine labor and mine products, which farm labor and farm products must pay?

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Chapter IX. — By Hon. John Dalzell of Pennsylvania.

I ASSUME in the first place that almost every one, except the free silver men, who are really monometallists, is desirous of seeing both gold and silver the standard money of the commercial nations of the world; that almost all are in favor, in other words, of international bimetallism. But as we can not now at this time have that, it is material to be borne in mind that the American congress may not legislate internationally; but may legislate simply for the United States of America. And it is material to be borne in mind also that our existing monetary system does not conform to the monetary system of any other commercial nation at the present time.

The year 1873, when silver was demonetized, marked a revolution in monetary history. In the results of that revolution all the commercial nations of Europe acquiesce. We alone dissent. Except in silver standard countries, ours are the only mints that are open to the coinage of silver.

Now, whether it was wise to demonetize silver, how silver was demonetized, whether surreptitiously or openly, are questions which have no pertinence in this discussion except for the purposes of declamation. "It is a condition, and not a theory, that confronts us." The question is, can the United States, single-handed and alone, remonetize silver under existing conditions?

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I shall not stop to discuss ratios for this reason: If you can fix the commercial ratio of that which is a commodity in the world in relation to gold by law you can fix it at anything you please. If you can not by law fix its real relation because it is a commodity, then it does not make any difference what ratio you put in your law. Now, what is this proposition for free and unlimited coinage of silver? Reduced to terms of plain English it is this: That every man who has 56 cents' worth of standard silver may go to the United States mint and have it marked a dollar. "Resolved," it is proposed we shall say, "that 56 is equal to 100; that 1 is equal to 28.52."

It is declared that the gold dollar is a "dishonest dollar;" and not an absolute measure of value. Nobody claims that gold is an absolute stable measure of value. What we do claim and what is true is that it is the most stable measure of value. It is the measure of value all over the world. It fixes the value even in silver-standard countries. Now, on what basis is it assumed that gold has gone up and that silver remains stationary? Because there are so many commodities that have fallen in price and silver has fallen in price with them, and, therefore, gold has gone up and silver has not moved. Was there ever a more patent non sequitur?

We do not need to imagine a scarcity of gold to account for falling prices. New processes, improved machinery, inventive genius, new facilities for intercommunication — these, and not the scarcity of gold, are the causes of falling prices. The records of the Patent Office, the roll of the great captains of industry whose genius has wedded usefulness and beauty and cheapness,

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and made the luxury of the past the convenience of the present, refute your silly claim that gold is the only factor in fixing price.

Raw materials, food products, have fallen in price upon the same principle. New fields have been opened, their soil put under the plow. Civilization has pushed its resistless march into new territory, discovered new secrets of nature, opened new mines to the sunlight, bridged new streams, built highways to the hitherto inaccessible; introduced electricity and steam; annihilated time and space.

The history of our trunk-line railroads furnishes the key to falling prices. In 1865 the Pennsylvania Railroad Company and its lines west; of Pittsburg, the New York Central and Hudson River Railroad, the Lake Shore and Michigan Southern, the Michigan Central, Boston and Albany, the New York, Lake Erie and Western, carried 11,151,701 tons of freight, or to express it in another way, moved of tons 1 mile 1,654,324,000. And how much did each ton cost for carriage? It cost 2.9 cents per mile. In 1885, twenty years afterwards, this same system of railroads moved of tons at the rate of 1 mile 11,331,306,000, at a cost of six-tenths of a cent a mile.

Now, these railway lines carried somewhat less than one-fourth of the tons moved 1 mile in 1885; yet they saved on the difference between cost of carriage in 1885 and the cost of carriage in 1865, $256,500,000. I might pursue this line of argument, to show the same results, with other roads, but it is not necessary. And yet, in the face of incontrovertible facts like these, people get up ingenious schedules to prove that silver has remained stationary and that gold has gone up.

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Why, the characteristic feature of this day is low price of necessaries and high wages. If the low price of necessaries is due to the scarcity of gold, why have not wages gone down also?

The fall in the price of silver is easily accounted for on the very simplest of economic principles. Increase the supply of any commodity, decrease the demand and prices go down. Now, since 1873, when silver was demonetized, the production of silver has increased .50 per cent., and the demand has decreased by the amount theretofore called for by the mints of Europe, since that time closed against it like our own, except since 1878. Since 1873, when silver was demonetized, gold production has constantly increased, and is increasing to-day. The probabilities are that it will continue to increase to a much greater extent in the future.

In 1887 the Queen of England appointed a royal commission to inquire into the recent changes in the relation of the precious metals to each other. In the same year President Cleveland appointed Edward Atkinson, a distinguished statistician, to inquire as to the feasibility of bimetallism by international agreement. Mr. Atkinson states the results of the investigation of that royal commission as follows. He says?

"I find in it abundant evidence sustaining the positions which I have taken to wit:

1. The mass of gold in existence has been sufficient to enable Germany to adopt the gold standard of legal tender, the United States and Italy to resume specie payment substantially on a gold standard, the Latin Union to cease silver coinage and to maintain their existing stock of legal tender silver at par in gold, without creating any apparent scarcity of gold and without

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any special influence in depressing the prices of commodities or services.

"2. The reduction in the price of commodities has been no greater than would be warranted by and might have been expected from the improvements in the processes of production and distribution. This reduction, having been accompanied by a general maintenance or rise in the price or rate of wages, has been almost wholly beneficial, temporary hardship to special classes being admitted."

Our friends on the other side say, "discontinue the use of silver; take it out of the world's money, and you necessarily appreciate gold to that extent."

What I have already said refutes the assertion. We have seen that the gold supply has kept pace with the gold demand, and promises to continue to do so in the future. This has been proven by the statistics of gold production, and by the evidence taken before the Royal Commission.

But in addition to this the free coinage argument wholly ignores the function of credit in our modern business life. The volume of money consists not simply of gold and silver and authorized issues of notes, but of credit also. This is an expanding and contracting instrument as the necessities of trade and commerce demand. It serves to conduct from 90 to 95 per cent. of the world's business. It has been well said, the progress of civilization is toward diminishing instead of increasing the requirement of large amounts of bullion.

Much stress has been laid by our friends on the other side on the injustice of making the debtor pay in dearer money than that which he borrowed. If I have proven anything so far I have demonstrated that the only method to prevent such injustice, so far as it can be

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prevented, is to abide by the most stable of all measures of value, gold. And mark you the injustice to the debtor of paying his debt in dearer money than he borrowed is no greater than the injustice of making the lender take his loan in money which is less valuable than that which he loaned.

That aspect of the question seems not to have presented itself to our friends on the other side at all. They assume that all lenders are rich, millionaires, goldbugs, corporations, and that all the borrowers are poor farmers, and that such being the case it is no harm for the latter to cheat the former. Is there one rule of honesty for the rich man and another rule of honesty for the poor man?

I have been amused in listening to the self-styled champions of the poor man, advocates of the millionaire mine-owners of the west, denouncing millionaires; in one breath denouncing all moneyed institutions, aggregations of wealth, and corporations — the indices of national prosperity — and in the next demanding a market for the product of the western mines and for the surplus silver of the world. Why not the same kind of legislation for the steel billets from the mills of Pennsylvania, for the pig iron from the furnaces of Tennessee, or the wheat from the fields of Dakota? It seems to me that this indiscriminate denunciation of wealth, this arraying of the rich against the poor, is nothing more or less than incipient anarchy. Whence can it lead but to a war of classes and the eventual overthrow of the State? And is not he an incendiary, against whom society has a right to protect itself, who raises the banner of rule or ruin and appeals to the basest passions of mankind?

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The silver men pretending to be bimetallists are monometallists. What they would have is not a double, but a silver instead of a gold standard. This is plainly to be gathered from the address of a well-known advocate of free coinage, whom I quote:

"If a single standard were really more desirable than a double standard, we are not free to choose gold and would be compelled to select silver. * * * If bimetallism is impossible, then we must make up our minds to a silver standard."

And then he paints the glories of a silver standard. He says:

"A silver standard, too, would make us the trading center of all the silver-using countries of the world, and these countries contain far more than one-half of the world's population. What an impetus would be given to our western and southern seaports, such as San Francisco, Galveston, New Orleans, Mobile, Savannah and Charleston."

That is to say, let us cut loose from England and France and Germany — from European civilization — and cast in our lot with India, China, the Straits, Japan, Mexico, and South and Central America.

Truly a suggestion worthy the mind that conceives it to be in the power of legislation to reverse the rules of arithmetic.

I want to say that the moment you declare that 56 cents' worth of silver is equal to a gold dollar, that moment you open your mints to all the silver of the world. You bid it welcome to come, and it will come; and when it comes gold will go, go into silver purchases, go

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into hiding, go abroad. With what result? With the result to defeat the very purpose for which free and unlimited silver coinage is urged; with the result suddenly and violently to contract instead of increase the circulation. The American dollar will buy in foreign exchange just as much as and no more than the bullion in it is worth. The United States will be on a silver basis.

Two things, I grant, the free and unlimited coinage of silver will accomplish. First, debtors will be enabled to scale their debts to the extent of from 40 to 50 per cent. and cheat their creditors to that extent; and, secondly, you will furnish a market for the silver mines of the west. But these results will be accomplished at the price of justice and to the eternal disgrace of the American name.

I believe in bimetallism, the use of both gold and silver as the standard money of the world, and I expect to see that system come in time. I believe that bimetallism is possible, however, only by international agreement, and I am in favor of every honest effort to bring about that agreement. The United States having been on a gold basis substantially for sixty years past, debts have been contracted on that basis, and prices fixed all over the world on that basis. I am opposed to any measure that would either suddenly or gradually put us on a silver basis. I am in favor of any needed measure for the expansion of the currency that will put behind every dollar issued the guaranty that it shall be equal in purchasing and in debt-paying power to every other dollar.

I believe that this is a question which rises above the plane of party politics. This question can be settled,

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but it must be settled by each man in the domain of conscience enlightened by patriotism. The interests at stake involve the financial future of this great people; they are the interests of country, and country is above all.

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Chapter X. — President Cleveland's Letter.

Early in the month of April, 1895, a committee of Chicago gentlemen invited President Cleveland to be present and take part in a meeting "in the interest of sound money and wholesome financial doctrine." In his letter declining the invitation, the President said:

"My attachment to this cause is so great and I know so well the hospitality and kindness of the people of Chicago that my personal inclination is strongly in favor of accepting your flattering invitation, but my judgment and my estimate of the proprieties of my official place oblige me to forego the enjoyment of participating in the occasion you contemplate.

"I hope, however, the event will mark the beginning of an earnest and aggressive effort to disseminate among the people safe and prudent financial ideas. Nothing more important can engage the attention of patriotic citizens, because nothing is so vital to the welfare of our fellow-countrymen and to the strength, prosperity and honor of our nation.

"The situation we are confronting demands that those who appreciate the importance of this subject and those who ought to be the first to see impending danger should no longer remain indifferent or over-confident.

"If the sound-money sentiment abroad in the land is to save us from mischief and disaster it must be crystallized

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and combined and made immediately active. It is dangerous to overlook the fact that a vast number of our people, with scant opportunity thus far to examine the question in all its aspects, have nevertheless been ingeniously pressed with specious suggestions which in this time of misfortune and depression find willing listeners, prepared to give credence to any scheme which is plausibly presented as a remedy for their unfortunate condition.

"What is now needed more than anything else, is a plain and simple presentation of the argument in favor of sound money. In other words it is a time for the American people to reason together as members of a great nation which can promise them a continuance of protection and safety only so long as its solvency is unsuspected, its honor unsullied and the soundness of its money unquestioned. These things are ill exchanged for the illusions of a debased currency and groundless hope of advantages to be gained by a disregard of financial credit and commercial standing among the nations of the world.

"If our people were isolated from all others and if the question of our currency could be treated without regard to our relations to other countries its character would be a matter of comparatively little importance. If the American people were only concerned in the maintenance of their life among themselves they might return to the old days of barter and in this primitive manner acquire from each other the materials to supply the wants of their existence. But if American civilization were satisfied with this it would abjectly fail in its high and noble mission.

"In these restless days' the farmer is tempted by the

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assurance that, though our currency may be debased redundant and uncertain, such a situation will improve the price of his products. Let us remind him that he must buy as well as sell; that his dreams of plenty are shaded by the uncertainty that if the price of the things he has to sell is nominally enhanced, the cost of the things he must buy will not remain stationary; that the best prices, which cheap money proclaims, are unsubstantial and elusive, and that even if they were real and palpable he must necessarily be left far behind in the race for their enjoyment.

"It ought not to be difficult to convince the wage-earner that if there were benefits arising from a degenerated currency they would reach him least of all and last of all. In an unhealthy stimulation of prices an increased cost of all the needs of his home must long be his portion, while he is at the same time vexed with vanishing visions of increased wages and an easier lot. The pages of history and experience are full of this lesson.

"An insidious attempt is made to create a prejudice against the advocates of a safe and sound currency by the insinuation, more or less directly made, that they belong to financial and business classes and are therefore not only out of sympathy with the common people of the land, but for selfish and wicked purposes are willing to sacrifice the interests of those outside their circle.

"I believe that capital and wealth, through combination and other means, sometimes gain an undue advantage; and it must be conceded that the maintenance of a sound currency may, in a sense, be invested with a greater or less importance to individuals according to

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their condition and circumstances. It is, however, only a difference in degree, since it is utterly impossible that any one in our broad land, rich or poor, whatever may be his occupation, and whether dwelling in a center of finance and commerce or in a remote corner of our domain, can be really benefited by a financial scheme not alike beneficial to all our people, or that any one should be excluded from a common and universal interest in the safe character and stable value of the currency of the country.

"In our relation to this question we are all in business, for we all buy and sell, so we all have to do with financial operations, for we all earn money and spend it. We cannot escape our interdependence. Merchants and dealers are in every neighborhood, and each has its shops and manufactories. Wherever the wants of man exist business and finance in some degree are found, related in one direction to those whose wants they supply and in another to the more extensive business and finance to which they are tributary. A fluctuation in prices at the seaboard is known the same day or hour in the remotest hamlet. The discredit or depreciation in the financial centers of any form of money in the hands of the people is a signal of immediate loss everywhere.

"If reckless discontent and wild experiment should sweep our currency from its safe support the most defenseless of all who suffer in that time of distress and national discredit will be the poor as they reckon the loss in their scanty support, and the laborer and working man as he sees the money he has received for his toil shrink and shrivel in his hand when he tenders it for the necessaries to supply his humble home.

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"Disguise it as we may, the line of battle is drawn between the forces of safe currency and those of silver monometallism. I will not believe that if our people are afforded an intelligent opportunity for sober second thought they will sanction schemes that, however cloaked, mean disaster and confusion, nor that they will consent, by undermining the foundation of a safe currency, to endanger the beneficent character and purposes of their government. Yours very truly, "Grover Cleveland."

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Chapter XL. — William J. Bryan's Reply.

The President's letter drew forth a storm of protests from the silver men, and Hon. William J. Bryan, of Nebraska, promptly addressed the following letter to the President:

"The Hon. Grover Cleveland, President. — Dear Sir: In your recent letter declining an invitation to attend the Chicago ‘gathering in the interest of sound money,’ you say: ‘What is now needed more than anything else is a plain and simple presentation of the argument in favor of sound money.’

"To ‘a vast number of our people’ ‘Coin's Financial School’ seems to be ‘a plain and simple presentation of the argument in favor of sound money,’ but some of your friends have not been pleased with the argument. Since you secured the unconditional repeal of the Sherman law you have very properly taken the place so long held by the author of that law, Senator Sherman, and are now the acknowledged leader of the gold standard advocates of the United States, both democratic and Republican, and to you, therefore, as the leader of that element, the people naturally look for ‘a plain and simple presentation of the argument in favor of sound money,’ according to your understanding of sound money, or at least for an intelligent definition of it.

"What do you mean by the phrase ‘sound money’?

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In your letter you make frequent use of that and kindred phrases. In fact, in the course of your letter you speak three times of ‘sound money,’ twice of a ‘safe currency,’ once of a ‘sound currency,’ once of a ‘safe and sound currency,’ once of ‘safe and prudent financial ideas,’ and once of ‘wholesome financial doctrine.’ You also speak once of a ‘debased currency,’ once of a ‘degenerated currency,’ and once of ‘cheap money.’ In one place you describe your opponents as ‘the forces of silver monometallism,’ but you nowhere explain what you mean by ‘sound money,’ or what you consider ‘cheap money.’

"Now, everybody favors ‘sound money’ and ‘a safe currency,’ and a plain and simple statement of what you mean by those euphonious and universally admired phrases might dispel the war clouds and make a ‘line of battle’ unnecessary. If by ‘sound money’ you mean a gold standard why did you avoid the use of the word ‘gold’ in your letter? If by a ‘safe currency’ you mean bimetallism why did you avoid the use of the word of ‘bimetallism’ in your letter? Your letter nowhere contains a direct reference either to the gold standard or to bimetallism, but is quite replete with expressions which may mean a great deal or nothing, according to the interpretation placed upon them.

"Your opponents have always given you credit for courageously defining your position on public questions. Will you prove their confidence well founded by stating frankly what kind of a financial system we shall enjoy if the sound-money sentiment abroad in the land ‘succeeds in saving us from mischief and disaster.’ Your opponents candidly avow their purpose and clearly outline the legislation which they desire. Is it not fair

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to ask that you define your policy with as much frankness?

"Your opponents favor the free and unlimited coinage of gold bullion into dollars, each containing 25.8 grains of standard gold. Are you in favor of this? Your opponents are in favor of the free and unlimited coinage of silver bullion into dollars, each containing 412.5 grains of standard silver. Are you in favor of this? If not, are you in favor of the coinage of silver bullion into dollars of any size? If not in favor of the free coinage of silver, what charge, if any, would you make for coinage? If you are not in favor of the unlimited coinage of silver, what limit would you suggest?

"Your opponents not only believe in the restoration of the free and unlimited coinage of both gold and silver at the present rate of sixteen to one, but they are in favor of taking this action at once without waiting for the aid or consent of any other nation on earth. Do you agree with them? If not, do you favor the restoration of bimetallism by international agreement? If you are in favor of an international agreement, what ratio would you advise and what nations are in your opinion necessary to such an agreement? If you favor an international agreement, how long are you willing to wait for it? Your opponents are in favor of making standard gold coin and standard silver coin equally a legal tender for all debts, public and private, and are opposed to making a silver dollar a promise to pay a gold dollar or a gold dollar a promise to pay a silver dollar; do you agree with them?

"Your opponents believe that the free and unlimited coinage of gold and silver at the present ratio of 16 to

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1 by the United States, regardless of the action of other nations, will give us sound money and a ‘safe currency.’ They not only believe this, but they support their position by arguments so plausibly presented that even you are frightened into the belief that ‘the sound money sentiment must be crystallized and combined and made immediately active’ in order to prevent their success at the polls. Can you define your position so clearly and defend it so plausibly as to scare your opponents as badly as they have scared you? Is the failure of the gold-standard advocates to define their purposes and defend their financial system due to lack of knowledge of the subject or to an unwillingness to let the people know what they intend? If ‘the proprieties’ of your ‘official place oblige’ you ‘to forego the enjoyment’ which you would derive from the wilting of another letter explaining your last letter and defining your position on the financial question please designate some one who has authority to speak for you so that the people may be ‘afforded an intelligent opportunity,’ as you suggest, to study and decide this now paramount public question.
"Yours very truly,

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Chapter XII. — By Hon. Julius C. Burrows, of Michigan.

Coin silver dollars at the ratio of 16 to 1 or 20 to 1 and you have a dollar intrinsically worth less than the gold dollar, and coin such a dollar as that — permit the owners of silver bullion to bring to the mints of the United States, and have manufactured into dollars, a certain number of grains, worth in bullion much less than after they are coined, is a proposition to which I cannot give my assent.

But it has been stated and repeatedly asserted that the present silver dollar is the "dollar of the fathers." That statement is not true. It is not the "dollar of the fathers," and the fathers if living would repudiate such an assumption as a reflection upon their integrity and sagacity. The silver dollar of the fathers was intended to be and was in fact practically equal to the gold dollar in intrinsic value.

When Hamilton and the men of his time were considering the establishment of the United States mint, in 1792, the question presented was whether we should coin silver or gold, or both, and having determined to utilize and coin both gold and silver the only remaining question was just how much silver should be put in the silver dollar and how much gold in the gold dollar, and it was agreed on all hands there must be just such an amount put into the silver dollar and the gold dollar as would make them exactly equal in

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commercial value, for there was no man living at that time outside a mad house who entertained the idea that you could coin dollars of unequal intrinsic value and make them circulate side by side in any monetary system. For it is a law as old as monetary science and as inexorable as the moving of the spheres that if you have two dollars of unequal value the cheaper will be the only one that will circulate and the more valuable will be driven out of circulation.

Mr. Baring said upon this subject: "A very slight difference of one-tenth or one quarter of 1 per cent, would determine the use of one metal or the other."

Our own history demonstrates the truth of this law. Under the ratio of 15 to 1, established in 1792, the two coins separated in a few years, because it was found that the commercial value and the monetary value did not correspond, and gold went out of circulation and our coined silver was the only money remaining in circulation. In 1834 the ratio was changed to 16 to 1, but it was soon discovered that the commercial ratio did not then correspond with the monetary ratio and the result was that silver was more valuable than gold, and went out of circulation, while gold became our only circulating metallic money. When the owner of 371 1/4 grains of pure silver could get more for that silver uncoined than he could by having it coined into a silver dollar, certainly he would not take it to the mint of the United States to have its value lessened by being coined into money. So silver dollars went out of circulation.

In 1861 we were flooded with a depreciated paper currency less valuable than either gold or silver, and the result was that it drove both gold and silver out of

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circulation, and they remained out of circulation until we resumed specie payments in 1879.

This people have not forgotten the battle for the resumption of specie payments, and they do not care to repeat that experience. It was a long journey, fraught with hardship and disaster to many individuals, and had to be pursued in the face not only of Democratic opposition demanding the repeal of the resumption act and the continued non-payment of our unredeemed promises, but parties sprang up in favor of fiat money and the wildest financial vagaries which, for the time being, threatened the credit and financial integrity of this nation. Must we fight that battle over again?

This contest for the free coinage of silver began in 1874, and it has been prosecuted with unceasing vigor ever since. Why? Up to that time the silver dollar was worth more, intrinsically, than the gold dollar, being worth in 1873 $1.03 as compared with gold.

Up to that time the coinage of silver dollars in this country had been very limited. One would think from the tenor of this discussion that all at once a great outrage had been perpetrated upon silver that it had been stricken from our monetary system at a blow, by the force of law, when the fact is that from 1793 to 1805, a period of twelve years, we coined but 1,439,517 silver dollars. From 1806 to 1836, a period of thirty years, we did not coin a single silver dollar. From 1836 to 1873, a period of thirty-seven years, we coined only 6,606,321 silver dollars. In eighty years we only coined a total of 8,045,838 silver dollars. So long as silver remained more valuable than gold there was no clamor for the free coinage of silver, but in 1878, when resumption was an assured fact, and the people had decreed

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that they would keep faith with their creditors and pay their unredeemed promises, then the champions of cheap money turned their attention to silver, finding it had declined in value from $1.03 in 1873 to $0.89 in 1878.

Then the cry went up for the free and unlimited coinage of silver dollars, of 371 ź grains, worth 89 cents, and we entered upon the course of coining silver and continued it for twelve years, and during that period coined 419,000,000 silver dollars, while in the eighty years previous we had coined only 8,000,000. After continuing this for twelve years the silver in the silver dollar declined from $0.89 to $0.72, and we found ourselves with 419,000,000 silver dollars worth, intrinsically, but 72 cents each. In 1890 when it was believed that our volume of silver then in circulation was as great as could be maintained at a parity with gold and avoid the danger of a silver basis, then the Democratic party again clamored for the free and unlimited coinage of silver. The battle is now renewed under the plea of bimetallism, and the advocates of the free coinage of silver seek to delude the people by asserting that they are in favor of bimetallism while its opponents are not. We have bimetallism to-day.

We have not only the 419,000,000 silver dollars coined, the 151,000,000 treasury notes given for silver bullion, but we have 5,558 tons of silver bullion uncoined, and let it be remembered that the repeal of the purchase clause of the Sherman act does not demonetize a single dollar of this nearly 600,000,000 of silver. On the contrary, in the interests of bimetallism we propose to maintain the whole volume of this silver coin and paper at a parity with gold. We who favor the

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repeal of the act of 1890 are the only real bimetallists, and we are pursuing the only course in my judgment by which bimetallism can be maintained. The free and unlimited coinage of silver at any of the ratios named will destroy bimetallism and will reduce this country to a single standard, that of silver, and that depreciated, and I am suspicious that for this very reason some gentlemen are anxious for its triumph. The opening of the mints of the United States to the unrestricted minting for individuals of silver into legal dollars at any ratio to gold less than the commercial value of both metals, under the pretense of aiding the cause of bimetallism or for the purpose of establishing or maintaining bimetallism in the United States, is simply playing upon the sentiment and credulity of the American people.

Bimetallism means the joint use of gold and silver as money and the history of our country prior to 1873 has shown, what is admitted by all the great authorities on bimetallism, that so long as there is a variation of even one-half of one per cent, between the commercial value of the pure metal contained in the standard coins and their face value the one which has the commercial value in excess of the other will not circulate side by side with that other. For this reason, prior to 1834 gold coins did not circulate in this country, and after the change of ratio in 1834 and 1837, silver did not circulate. Of course the silver dollar now is practically credit money, sustained at par with the more valuable dollar by government redemption in gold; but with the free and unlimited coinage this would necessarily disappear. There would be no gold redemption, so that free coinage of silver at this time

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really means the adoption of silver monometallism. The real issue, then, is not between bimetallism and gold monometallism, but between bimetallism and silver monometallism.

Let the people but once understand that all this talk about bimetallism is simply a cover to hide the obnoxious fact that it is silver monometallism that is the real purpose, or at least the certain result, and they will have none of it. There is no considerable portion of our people who would vote to place this country on a silver basis. The argument between the advantages of the two systems is a real, living one. Turn your eyes to the countries having the silver standard alone — Mexico, South America, Asia — and those having the gold standard with a silver circulation maintained on a parity with it, like England and all Europe, and there is no room for argument. The latter countries are prosperous, intelligent, and progressive; the former embarrassed, poor, and ignorant.

As was once said by another, "I think I see clearly through this day's business." It is the old fight for cheap money, and the people are deluded with the idea that if money is cheap they will be prosperous. A farmer is in debt 1200; he can sell his horse for $100 in the money of to-day, which, applied to his indebtedness, would discharge one half of it. Now, if by some process he can cheapen these dollars until they are worth but 50 cents, he can then sell his horse for 200 of these 50-cent dollars and then discharge his indebtedness of $200. This is the milk in the cocoanut of this whole business.

But let me say that cheap money is a delusion, and a depreciating, fluctuating currency cheats every man

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who touches it. It cheats both ways — when it is declining and when it is appreciating. In war times the man who loaned $1,000 in gold was obliged to take his pay in paper worth 33 cents. The farmer who gave a mortgage for $1,000 on his farm when we were on a paper basis of 33-cent dollars felt it to be a hardship when he was obliged to pay that mortgage in paper dollars worth 100 cents. But that is the inevitable effect of an unstable currency. I affirm that whenever we have a vacillating, depreciated currency it injures all classes and all conditions.

But labor is sought to be deluded with the idea that it is in their interest, somehow, to have cheaper money. Labor does not want cheaper money, but good money — money that will be good to-day and to-morrow, for money is not only the measure of value, but it is the storehouse of values; and when a laboring man has completed his day's work he wants to be paid in a coin that will be not only the full measure of the value of that day's work, but in a dollar that will preserve the value of that day's work, The laboring people of this country having to-day $1,700,000,000 in the savings banks, every dollar of which is worth its face in gold, do not want to be paid in a cheap currency worth one-half that amount; and yet the appeal is made here and elsewhere that all this struggle for cheap money is in the interest of labor!

It was once said "Liberty, how many crimes are committed in thy name!" and it might be as truthfully said to-day, how many crimes are committed in the name of labor.

At one time a practice prevailed in England of clipping the coins and thereby depreciating their value.

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The English government made that practice a felony punishable by death. Women were burned at the stake and men were dragged to the scaffold for clipping the coins of the realm. But it is now seriously proposed to legalize an unlimited issue of debased currency. It is proposed that this great government, which through all its perilous history of the last thirty years kept faith with all its creditors and stands to-day with a credit matchless and unimpaired, shall now enter upon the shore less and fathomless sea of depreciated coinage, whose only harbor is national repudiation and individual bankruptcy, to the utter destruction of the nation's credit and the prosperity of the citizen.

Rather than do this, you might better at once invoke the policy of a Solon, and scale all public and private debts, and have done with it at once.

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Chapter XIII. — By Elijah A. Morse, M. C., 12th District of Massachusetts.

The question is, "What is sound money?" In brief any form of money which is interchangeable with gold, and is recognized as worth its value in gold in the great commercial nations of the world, England, France, Germany, Austria, Russia and the United States. The enemies of sound money and those who favor the free coinage of silver, while professing to be bimetallists are really monometallists, in favor of a single standard, and that standard silver, and could they succeed in getting congress to vote for the free coinage of silver in the ratio of 16 to 1, and in the absence of any international agreement as to the ratio they would immediately degrade our financial system from the high position which it now occupies to the level of that of Mexico, the Central American and South American republics. "From which, good Lord, deliver us!" At present, under the financial policy inaugurated by the Republican Party, and indorsed and continued by President Cleveland, all forms of United States paper money, and silver money as well, are interchangeable with gold. Perhaps an illustration of Mexican finance and the effect of the single standard may be in place here. A gentleman visiting Mexico paid for his dinner, for which the charge was 50 cents, with an American silver dollar, and received in change a Mexican silver dollar, worth 50 cents in gold. Our consuls in China, a silver

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country, are able to double their salaries by exchanging $1 of United States money for $2 in silver in that country.

The precious metals always have been and always will be the standards of value, since Abraham bought the cave of Macpela to bury Sarah in. I am a bimetallist, I believe in both silver and gold as money, but I insist that they must be maintained at a parity and interchangeable the one for the other. What this country ought to do, and what every friend of sound finance ought to endeavor to promote is, to join in an international agreement as to the ratio between gold and silver. And there are at present, fortunately, indications that such an international agreement may be reached. When that becomes an accomplished fact, free coinage of silver will be safe, legitimate and proper, and the financial question will be eliminated from politics as it ought to be.

I regard the present national banking system of the United States as the finest banking system this country or the world has ever seen. A national bank bill of the United States is not only interchangeable for gold in any section of our own country, but in any country of Europe, or Asia and Africa as well. I regard the national banking system as a national blessing, and would favor its indefinite continuance, having United States bonds deposited with the United States treasury for a basis, supplemented by the deposit of state and municipal bonds as security for circulation. Nothing can be more important to the perpetuity and stability of our government than to continue the present sound financial system.

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Chapter XIV. — The Fall of Prices — The Cause and the Cure — By President E. Benjamin Andrews of Brown University.

That a very great fall in general prices has occurred since 1873 is uncontested; but the baneful effect of that fall is not so widely seen. Some, indeed, deny that fall in prices is an evil, and deem it an advantage instead. Such people confuse falling prices with falling costs, two things which are perfectly distinct. The amount of labor necessary to produce the great commodities of life may be lessening from year to year, and yet the prices, the money values of those things, be increasing. Costs and prices may rise or fall together, or one may rise as the other falls. The costs of things were falling in the sixteenth century, when American silver was first getting distributed in Europe; but prices were then rapidly rising. Likewise between 1850 and 1873 costs were falling more rapidly than now; but prices were not falling; they were rising. Even when the two movements coincide, as at the present time, they are not to be identified. A lowering of the costs of things is always advantageous, meaning an easier living for mankind. A fall of general prices is always a curse.

I desire also to emphasize the fact that it is the fall in prices which is mischievous, and not the lowness of the prices after they have fallen. While, during its progress, a general fall of prices, however caused, is always

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unfortunate, and while the effects of such a fall may be grievous and continue long, yet a low range of prices when attained, considered apart from all the causes which made it low, may be as desirable as a high range of prices.

In what I shall say, therefore I have in mind falling prices, not falling costs, and falling prices, instead of low prices; and my immediate purpose is to set forth how unfortunately, in many ways, a fall in general prices works.

I say, first, that falling prices, such as are now occurring throughout the gold using world, work outrageous injustice.

Appalling is the moral wrong which the fall of prices since 1873 has wrought. Think of all those time contracts, which form so prominent a feature of modern business. Probably 70 per cent. of the world's commercial transactions are based on some sort of deferred payment or credit. It is estimated that a trillion and a half dollars' worth of these deferred payments are outstanding at this time. Appreciating money is occasioning injustice in case of every one of these obligations. The business friction proceeding from this source I mention presently; here I hold up to view the fraud of the system; how increase in the value of money robs debtors. It forces every one of them to pay more than he covenanted to pay, not more dollars but more value, the given number of dollars embodying greater value at the date of payment than at date of contract. In these days debtors must struggle hard to be able to pay what they honestly owe. A money system which forces them to pay from 10 to 50 per cent. blood money is devilish indeed.

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On September 1, 1865, our national debt was about $2,750,000,000. It could then have been paid off with 18,000,000 bales of cotton or 25,000,000 tons of bar iron. When it had been reduced to a billion and a quarter of dollars, 30,000,000 bales of cotton or 32,000,000 tons of iron would have been required to pay it. In other words, while a nominal shrinkage of about 55 per cent. had taken place in the debt, it had, as measured in either of these two world staples, actually been enlarged by some 50 per cent., all this unearned purchasing power going to the holders of bonds.

Between 1870 and 1884 the public debt decreased not far from three-quarters of a billion dollars, yet if we take wheat, corn, beef, oats, coal, cotton, and bar iron together as the standard, and they make not a bad standard, the debt did not decrease, but increased not less than 50 per cent.

In the Westminster Review for October, 1880, Mr. Burr Robertson computes that the British national debt at Ł775,000,000 was in 1880 represented by a volume of staples which in 1873 or 1874 would probably have cost Ł890,000,000, so that the fall in prices between 1874 and 1880 affected a gratuitous distribution among consol holders of about Ł115,000,000 at the expense of the tax-paying public.

He says:

"The whole amount of the British Government's expenditure in the financial year 1878-79, being Ł85,000,000, represented a purchasing power of at least Ł12,000,000 more than the same amount of money would have done 1873-74, when the total expenditure was Ł77,000,000, so that between 1873-74 and 1877-78 the burden of taxation in the United Kingdom

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increased by a purchasing power of Ł20,700,000, though the nominal increase was but Ł8,000,000."

Say, if you please — what in now and then a case may be true, though it is not true generally — that the larger batch of commodities now needed to pay a given debt cost no more labor than the smaller batches which would have sufficed to pay it long ago. But where is the justice of a money arrangement which throws all the benefits of improved facilities in industry into creditor's hands and utterly forbids debtors to share in the improvement?

I declare next that a fall in general prices places a fatal clog, handicap, or brake upon the creation of wealth. Making all due allowance for subsidiary difficulties, the radical business trouble from which this and other countries on the gold standard are now suffering is, I believe, that, owing to the increasing scarcity of full money, goods of nearly all sorts are having to be sold at smaller and smaller prices. The blight upon our business originates in that scarcity of full or exportable money, leading to a continuous and discouraging fall in general prices, which first made production and credit business less and less profitable, and now at last makes them less and less possible.

Every business is affected more or less with certain fixed charges, levying upon it the burden of an absolute number of dollars. Taxes and mortgages illustrate this. These burdens can not be lightened when assets and profits fall. You continue liable to pay them dollar for dollar; that is, immensely to overpay them so far as value is concerned, no matter how much your income may have shrunk. Your assets little by

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little dwindle away, while your liabilities remain what they were. This circumstance infinitely aggravates the load which great bonded industries like railways have to carry, and vastly aids to multiply receivership.

A manufacturer usually considers it safe, if necessary, to borrow, say, 50 per cent. on the security of his plant. The decline of prices which began in 1873 caught many who had done so. In a multitude of cases the decline has swept away the owner's portion of the capital, leaving only enough to pay the loans. Suppose a ship or a factory built at a cost of $100,000, of which $50,000 were borrowed. It is now worth not over $60,000, or 40 per cent. less than cost. The mortgage, therefore, represents five-sixths of the value instead of half, the owner's interests having sunk to $10,000 instead of $50,000. As trade is unprofitable, many a man so burdened fails to pay the interest. Then the mortgage is foreclosed, the property is forced off at just sufficient to cover the loan, and he is ruined. This process exactly describes the condition of innumerable business men in this and other countries having a gold standard. A great portion of the country's capital has thus silently passed into the hands of mortgagees and and bondholders. The discouragement which this state of things produces is intense. After it has gone on for years a kind of hopelessness oppresses the commercial community. Nearly all advance enterprises come to a standstill, many works are closed, labor is paid less or thrown out of employment altogether, strikes are frequent, and the utmost distress prevails. It is out of order to rejoin that the vicissitude described merely transfers wealth from one possessor to another, and does not change the nation's aggregate welfare. Were this

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all it would be bad enough. The craft of the pickpocket or card sharper is in no wise innocuous because it only transfers wealth from one pocket to another. The prosperity of the nation depends upon the security men may feel in retaining the products of their industry. Nothing affects it more vitally than unjust alienation. But the process set forth is much more than a mere transfer of goods from owner to owner; it prevents production and that on a truly colossal scale.

Falling prices (appreciating money) set up a special, positive motive for abstaining from productive industry. This is the impulse to hoard. Appreciation of money tempts holders of money and of titles certain to be paid in money to cling to these and not invest in industry. It intensifies the demand for bonds and depresses that for stocks. The present is the age of bondholders. That all are so anxious to invest in bonds is, from an industrial point of view, an alarming symptom. If there is anywhere to be had a mortgage on wealth already realized or practically certain to be realized, everyone rushes for it, while new undertakings which would once have been thought full of promise, and would be so still but for the money difficulty, responsible capitalists avoid unless they can engage in them under some special shelter or guaranty, like a trust or a very high tariff. Irresponsible, feeble, and ignorant industrialists, to be sure, go on, trying to produce unsheltered. Some of them, by sweating their wage workers, have some success, their winnings, however, speedily falling into bondholders' pockets. One set of weak producers fails, another rises and runs the same course. Always some are making the endeavor. The bondholder never fails of supporters. For my part I pity the class of brave,

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small industrialists quite as much as I do the men who toil for wages. They are a sort of serfs. A business situation which thus coddles the bondholder and snubs the stockholder can not be healthy.

In this risk to industry from having to produce against a falling market, this bondholder instinct, and this hoarding motive or impulse to clutch at gold-paying paper and not let go save when return in kind is sure, we see the reason why our banks overflow with funds which they can not loan, and our streets with hungry men willing to work, but unable to find strong employees who have heart for productive enterprises.

The first victims to falling prices are producers of the weakest class. These are the farmers — weakest because possessing the least capital and unable either to combine or to stop producing. Hence the agrarian distress in every farming country and section of the gold using world. Hence the efforts of the farmers everywhere to better their condition through various political devices.

The staple of Australia is wool, whose exportation, so profitable until 1873, made that continent very prosperous. A large British debt was contracted. But between 1873 and 1888 wool fell from 33 to 16 cents. The whole clip for a year is now insufficient to pay the annual interest on Australia's British-held debt. Panic rose in 1888, but was lulled for a time by re borrowing at high rates. But it came. In January, 1893, 40,000 houses were to rent in Melbourne, the population having decreased in 1892 by over 17,000. The exodus continued and even increased in 1893.

Now it is our turn. The United States pays, mainly in farm produce, at least $100,000,000 a year in foreign

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interest. This was a light burden in 1873, when wheat brought $1.85 a bushel in London and $1.15 on the farm. In 1889 it had fallen to $1.03 in London and 69 cents on the farm. The yield for 1889 was about 340,000,000 bushels, which came to some $115,000,000 less than it would have brought sixteen years earlier, to say nothing of the lower income in freights, which had to be suffered in order to get it marketed at all. For the year 1893 our wheat brought the farmers only 54 cents, the lowest price ever known till then. In 1894 it was lower still. The New York price of wheat, No. 2, red, for 1894, averaging the fifty-two weekly averages, was 60.4 cents. The price on the farm can not have been far from 40 cents. The London price was 22s. 10d. a quarter, a fall of 3s. 6d. from 1893. In 1881, 383,000,000 bushels sold for $456,000,000. In 1893, 396,000,000 bushels sold for but $213,000,000, a shrinkage of $243,000,000.

The money yield per acre of wheat has fallen in twenty years from $13.16 to $6, or about 54 per cent. Cotton prices have fallen very much like wheat prices. The cotton crop of 1893, 6,600,000 bales of about 470 pounds each, brought the producer not over 6 cents a pound, or about $186,000,000. By the price of 1873, viz, 16 cents, it would have brought over $310,000,000 more, viz, $496,333,000. The money yield per acre of cotton has in twenty years fallen from $28 to $10.65, or about 62 per cent. The money yield per acre of wheat, corn, oats, hay, and cotton, taken together, has fallen in twenty years from $15.65 to $8.15, or about 48 per cent.

From 1873 to 1889 the nation's paying power was reduced at least one-third. We could no longer

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our foreign interest in wheat and cotton, and had to begin sending gold abroad, a movement intensified in that England has been drawing in the principal of her loans; her net imports of gold having been for 1887, Ł600,000; for 1888, Ł800,000; for 1889, Ł3,000,000; for 1890, Ł9,000,000.

The agricultural classes, sections, and nations impoverished, lose power to purchase of the manufacturing classes, sections, or nations, and so these, with the middle men, carriers, and merchants, also grow poor. Adversity comes over the entire world of producers. The only people able to prosper are the very small class who create nothing but live upon income from loans. Even these, though they may profit for a time, can not escape loss if money continues to grow precious. Failures and repudiation must ensue. Portugal, Spain, Greece, and Argentina have already defaulted on their bonds. Mexico has virtually threatened to do the same. It is believed that Italy was kept from repudiation only by the use of British gold to bribe legislators to vote new taxes. The richest money lenders on earth, the Rothschilds, appear to have concluded that their surest way to realize satisfactorily upon their loans is to check the rise of gold by increasing the world's stock of silver money. At the Brussels Conference Alfred Rothschild earnestly argued for such a policy.

I maintain, thirdly, that falling prices in any country, at the very same time that they lessen such country's ability to compete with others, invite against it disastrous competition from lands differently situated. In Europe agriculture is at the lowest ebb ever seen by living men. All silver countries can send their

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produce there. As silver has not with them lost in purchasing power, and as they receive the same amount of it for one sovereign, mark, or franc, as once they did for two, they can prosper themselves while starving European farmers. Europe's other productive industries suffer from the same cause. European merchants trading with silver countries, find on the one hand their capital invested there reduced by one-half, and on the other that, the par of exchange being destroyed, their present trade with those countries is, if not destroyed, a mere matter of gambling chance.

Sir Thomas Sutherland, presiding at the last annual meeting of the Peninsular and Oriental Company, after calling attention to the extraordinary advantages which silver countries now possess in manufacturing — noticing Bombay as a rival to Manchester, Japan, with its splendid supply of coal, as making enormous strides in cotton and other manufactures, and Shanghai as having entered upon similar enterprises on a large scale, said:

"There can not be the slightest doubt that this low value of silver, if it continues, must tend to check exports from Europe to those countries, and must stimulate industrial and manufacturing activity in the far East. It is impossible to foresee to what this may eventually tend; but there may possibly be in this room at the present moment some gentleman young enough to live to see the Peninsular and Oriental ships built on the banks of the Yang-tse-Kiang instead of the banks of the Clyde, or the Tees, or the Tyne."

The first spinning mill in Japan was built in 1863, with 5,456 spindles.

At the end of 1883 there were 16 mills with 43,700 spindles; 1888, 24 mills with 88,140 spindles; 1892,

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39 mills with 403,314 spindles; 1893, 46 mills with about 600,000 spindles.

From 5,000 spindles to 600,000 in thirty years is rapid progress.

The bimetallist members of the late German silver commission placed on the record of the twenty-first session the following solemn declarations:

"A setback to German agriculture is manifest, referable, on the one hand, to the necessity of selling a constantly increasing amount of depreciated agricultural products in order to pay wages, interest, rent, leases, taxes; and on the other hand, to the increased power of competition on the part of other countries, silver countries, that is, and countries on a money basis of depreciated paper. In proportion as their silver or paper loses in power to buy gold, these countries, enjoying in effect a high export premium, are able to throw their native products upon the world's markets at prices far beneath what it costs German farmers to produce them, so plunging these latter in deep distress.

"The demonetization of silver is also working a more and more visible injury to German manufacturing industry:

"(a) On account of the ever-lessening ability of the farmer class to purchase manufactured products.

"(b) On account of the decrease in exports to silver lands and of the consequent recoil upon the home market of the articles hitherto exported thither.

"(c) On account of the competition offered by the rapidly developed manufacturing plants of silver lands, favored by the low cost of production there and by the premium upon exportation there from produced by the fall in the gold price of silver.

"Unless means are taken to prevent, it will not be long before the manufactured products of the silver countries will find the German market. To import Indian yarn into Germany is already a paying operation."

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I could recite innumerable testimonies of the same tenor with these did time permit and occasion demand. It is facts like these which have led the Reichstag to vote for an international monetary conference.

Stupidly as the ignorant may overlook it, and persistently as those interested in maintaining the sole go I standard may deny it, the United States is a; victim of this same silver land competition. That it is which so lowers the price of wheat and cotton, or narrows the market for them. The acreage under these staples, to be sure, keeps up fairly well, though the price falls. Certain writers therefore allege that cheaper production accounts for the fall. If farmers could not afford to sell at these low prices, it is argued, they would stop raising. That is, I believe, a total misconception. The farmers continue these crops, not because they can, in the sense that the crops pay, but because, being tied to their farms, usually mortgaged, they must continue, however petty their income, and try to make up by the quantity raised the lost suffered in fall of price.

The dependence of prices in America upon the gold price of silver, in the case of articles whose surplus competes in London with the produce of silver countries, is very direct. One might suppose that the larger market would rule, and that the London (gold) price would remain steady instead of being itself fixed by the silver price. But it is not so, and this for a reason which Mr. G. Jamieson, British consul-general at Shanghai, gives in an article in the Journal of the Royal Statistical Society, London, for December, 1893. He says:

"It is a well-known fact in the commercial world that it is much easier to lower prices than to raise them,

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If you can afford to go down a half-penny, a bargain is much more easily struck than if you are bound to stand out for a rise of a half-penny. It would seem, then, to be a general rule that the adjustments following on a fall of exchange are always made along the line of least resistance, and that, therefore, it is not the China (or India) price that rises, but the London prices that fall. Merchants find it easier to buy Asiatic produce at the old prices and sell it in London at a concession than to stand out for old prices at home in order to pay more to the producer.

"From this point of view it is really silver that rules the world. It is the purchasing power of the cheaper metal that determines the prices all over. Just as in a bimetallic country the cheaper metal will drive out the dearer toward her monometallic neighbor, so, as between countries of different standards, will the prices prevailing in the countries of the cheaper metal drag down prices all over to their own level. And, reasoning forward from the experiences of the past, it would not, perhaps, be too rash to suppose that the prices of commodities in Europe, so far as they can be drawn in any fair quantities from silver-using countries, must continue to decline with every further fall in (the gold price of) silver."

It is not silver countries alone whose exports crowd those of gold lands. Worse pressure, if possible, proceeds from countries like Greece, Spain, Portugal, and Argentina, whose crushing gold debts have driven them to a paper-money basis. The depreciation of their paper acts as a premium on exportation from these countries to gold-standard countries, depressing in these latter, first the prices of international commodities, and indirectly the prices of many other commodities.

If in Spain, say, gold rises from paper par to 125

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above, a Parisian wine merchant can buy with a given number of napoleons 25 per cent, more Spanish exchange than before. As it will take a long time for Spanish paper money to lose any of its purchasing power in the rural districts, and as, therefore, each paper peseta will practically buy as much wine after the rise of gold as it would before, the Frenchman's gold laid out in Spain brings him a quarter more wine than before. Therefore any art of the demand on him that he can supply with Spanish wine he is sure to cover in this way instead of purchasing in France itself. The French raisers of brands previously competing with Spanish are driven from the market, while all French wine producers suffer more or less. The same is true in case of several other commodities. Paper-money countries having this advantage are doubtless laying up wrath against the day of wrath unless, indeed, as many of them will certainly do if the craze for gold continues, they give up all idea of returning to specie; but in the meantime they immensely gain at the expense of neighboring States whose money is at gold par. Precisely this is the explanation of the Argentine wheat shipments, which have of late become so enormous as to alarm United States and Russian farmers. In 1892 Argentina exported only about 25,000,000 bushels. In 1893 the shipments rose to 45,000,000 bushels; in 1894, it is said, to 75,000,000. The export for this year will probably show an even greater advance.

Who are our chief competitors for the tin industry? Not Cornwall or Australia, but the Straits and Bolivia — both silver countries. Bolivia sent to Liverpool 224 tons of tin in 1895; in 1894, 3,482 tons. In 1873 the Straits Settlement shipped 6,963 tons; in 1894 it

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shipped 46,640 tons. Australia, a gold country, exported 11,121 tons in 1893; in 1894 only 5,824 tons. Cornwall used to produce annually 10,000 tons; last year its product was but 8,000. Moreover, while the tin industry of the Straits is most flourishing, that of Cornwall is the despair of everybody connected with it.

Manufacturing in general is interested in this question. All parties agree with Governor McKinley's remark at Rochester on Lincoln's birthday, that "We want a foreign market for our surplus products of manufacture and agriculture." Some would promote foreign trade by reciprocity and by subsidies upon steamship lines to foreign countries. Others prefer the method of reducing duties. But no intelligent American will deny that in some way or other exports from the United States of America must be increased if the prosperity of our country is to go on. A very great part of the new exports must go to lands on the silver basis, as China, Japan, Mexico, Central and South America. We ought to be the principal manufacturers for all those regions. No other great manufacturing nation is so near them.

But to utilize this gigantic possibility we must be quick, or those parts of the world will have supplied themselves. At many a point in India and China, at well as in Mexico and further south, the tall chimneys already smoke and the clatter of machinery is heard. Soon, unless the currency problem is settled, the teem

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absolute necessity resting upon this country to extend its foreign markets, they would take advantage of England's folly in continuing the regime of falling prices. They would place the United States at the head of the silver-using nations to do their manufacturing. "Let us break off commercial relations with Europe," they say, "if only we can establish such relations with that vast world where manufacturing is either nonexistent or inchoate, and must grow, if at all, with difficulty; and let us create for those populations all their manufactured articles, taking in return those things which they can produce so much more easily than we."

Much as this proposal has been ridiculed it has great force. The thought in itself is magnificent. We no doubt have an opportunity by the means suggested to "dish" England in the markets of the world. If this could be accomplished without involving other difficulties it would be the finest commercial coup d'état ever effected. So much reason attends the notion that it seems to me sheer madness to oppose to it a policy like England's present one, of stubbornly adhering to money based on gold alone.

Fourthly, we see in the fall of prices and the accompanying danger to business the true cause of the worldwide movement, so astounding to free traders, for trusts and what we should once have called inordinate tariffs. This phenomenon marks the precise period, since 1873, during which money has been swelling in value and goods losing in value. New South Wales, till 1891 ever the free trader's welcome standby, succumbs to this drift. The reason of it is perfectly obvious. Owing to the down-grade prices, production is extra hazardous

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and needs shelter. When prices threaten or begin to fall, when stock depreciates upon manufacturers' hands, they inevitably struggle to avert these results, welcoming any resource that can aid. Unable to compass their ends otherwise they agitate for high tariffs. I unhesitatingly avow the conviction that had prices since the war been stationary or only slowly advancing, the rise in United States tariff rates culminating in the McKinley law would never have been so much as thought of.

These rates have been lowered somewhat, and if the change had been preceded by proper monetary reform the reduction might be permanent, and, perhaps, in a little time, with the approval of all, made greater still. But I fear that it can not be permanent. I would say to my Democratic friends, begging them note well the prophesy, that, unless monetary reform comes soon, the tariff which they have been at such great pains to give us will speedily be ripped in pieces and rates of duty be imposed higher than those of the McKinley act. I believe this inevitable. Mark my words: Alow tariff policy can never be established in these United States so long as gold alone continues the basis of our currency.

By no means all those crying for highest protection, whether here or in Europe, are addicted to protection as a general policy. Many such are, in theory, free traders, i.e., they would advocate free trade were prices stable or rising. Willingness to subject your country's industries to normal foreign competition is one thing; quite another is it to do so when your competitors are helped to beat you by a home bonus on exportation, as is the case with all exporters from silver and paper lands to-day. In France these "opportunist" protectionists

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are a powerful and growing party. Their login, is as yet imperfectly understood in this country; but men are mastering it more and more, and it will insure to the protectionist ranks armies of recruits in every congress and presidential election till general prices cease falling.

Such is my diagnosis of our present industrial disease. In my belief a true cause of morbid conditions in the body industrial has been laid bare. The extrusion of silver from service as full money greatly reduced the amount of the world's money available for ultimate liquidation — reduced it absolutely and reduced it far more relatively to those needs for fundamental money which rise from the growth of population and business. A distressing appreciation of money per unit has ensued, meaning a tremendous drop in prices. This disastrously handicaps all production. It does not entirely prevent production. Nothing short of killing off the race could do that. But it renders production indefinitely feeble compared with what it would be but for the handicap. The world needs an addition to its fundamental money; not more bank notes, not more token coinage; not more full legal tender tokens like our silver dollars and the French écus, but money that can do everything that any money can do. We need, I say, a greater bulk of money that is exportable, good in ultimate settlements, suitable for bank and government reserves. A stop must be put to this ubiquitous rush and clutch for gold; the passion for hoarding must be cured. It can only be done by abolishing the legal primacy of gold. This is the proper prescription for our patient. The only question is whether he can be induced to try the remedy. My belief is that the

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rehabilitation of silver as full money by a few of the great commercial States of the world would furnish it. If so, that course is most desirable.

In saying this I am not forgetting the gratifying new output of gold of late in South Africa, Australia, and the United States. This does not lessen in the slightest our need to make silver again full money.

It is interesting to notice the joy with which the new gold is hailed by men who have been assuring us for years that no more money is needed; that the quantity theory of money is exploded; that prices are not fixed by money but by credit, and that every fall in prices ought to be hailed with hallelujahs. Their welcome to this increase of the world's monetary stock justifies their good sense at the expense of their consistency. The veteran French economist M. Leroy-Beaulieu is one convert. So recently as 1889 he held, as many Americans hold, that the fall of prices, which he declared a blessing, proceeded not from a diminution in the supply of money, but solely from progress in the industrial arts, cheaper transportation, and overproduction. He has now changed his view. He believes that the new gold will cause each grain of gold in the world to lose its value, to wit, will provoke a rise in general prices; and that "all the countries on a basis of depreciated money and suffering from low exchanges will be able to better their monetary situation and come back to a solid monetary standard."

So Mr. Henry Binns, in the London Economist for last December 29, anticipates a "considerable rise" in prices from the increasing supplies of gold, and views the rise as a ground not of "alarm, but of congratulation." Our American monetary theorists of the gold

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school must admonish M. Leroy-Beaulieu. From their point of view his allegations are fatally heretical. To me, however, they are most welcome, only I can not agree with M. Leroy-Beaulieu in the expectation that gold alone will stay the fall of prices or heal the disordered exchanges now prevailing between gold countries and silver or paper countries. Thus, though 1893 brought forth $4,250,000 more gold than 1892, prices during 1894 did not rise, but fell 10 per cent. The prophecies of a future annual output of gold very much exceeding that of 1893 — $155,522,000 — rest on no solid foundation. They are made largely in the interest of speculation. Eight South African mines of which I have read, possessing a capital of only $75,500,000, though they have as yet paid no dividend at all, are floating stock which, at the rates at which it is quoted, foots up $215,430,000.

In his last report the Director of our Mint presents some very interesting figures touching the gold outlook; but I do not think all his deductions from them quite sound. He concludes that the value of the gold alone which in 1873 was available for coinage purposes in the western nations exceeded by $7,000,000 the total value of gold and silver both available for coinage, on the average, in the years 1866-1873. Were this true, the fact would but serve to illustrate how insignificant so slight an increase is in view of the advance that has meantime occurred in population and business; because, as just stated, prices fell in 1884 instead of rising.

But I believe Mr. Preston mistaken in his conclusion and in a number of data which help him to it.

(1) While from the world's gold yield for 1893 he properly deducts Russia's product of 37,325 kilograms as now serving no monetary end, he does not deduct India's product of 5,738 kilograms ($3,813,600).

(2) While in estimating the industrial use of gold and silver in 1871-1873, which he naturally wishes to make as large as possible, that the monetary gold and silver of those years may seem the smaller, he unhesitatingly uses Soetbeer's estimate; on the other hand, in estimating the corresponding figure for gold in 1893 he first scales Soetbeer's outside estimate by 10,000 kilograms, then averaging this result with three less trustworthy estimates, one of which, Ottomar Haupt's, I consider of little value. Haupt's data, the poorest of all, Mr. Preston, in case of three important countries, duplicates in the United States estimate, thus weighing them twice in the result arrived at, and doubling the power of whatever error they may contain. Suess's estimate, which agrees with Soetbeer's outside figure of 120,000 kilograms, is ignored altogether. Thus, instead of Soetbeer's outside estimate of 120,000 kilograms of gold as used industrially, etc., in each recent year, he places the figure at 91,125 kilograms.

(3) Except as to three countries, Mr. Preston makes no allowance for any increase in the industrial consumption of gold in 1893 over that of preceding years. But it is probable that this was very considerable, since consumers of gold were mainly people who little felt the hard times, which indeed began only when the year was half over, and since the appreciation of gold, by making the possession of gold ware a badge of wealth, probably increases rather than decreases the per capita number of grains of it yearly purchased for such purposes.

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My belief is that the gold used up yearly for art, industry, and boarding considerably exceeds Dr. Soetbeer's extreme estimate of 120,000 kilograms. I so judge because of a general habit — overlooked, I think, even by Soetbeer, far the most careful statistician who has examined the subject — which small jewelers have of using up gold coins coming to them in trade or bought at banks. Such coins must aggregate a vast sum, of which the big jewelers, whom alone statisticians consult, would be quite ignorant. Soetbeer, the ablest authority on the subject, among the last words he ever wrote said, in 1891 or 1892:

"Although it can not be demonstrated that the use of gold in arts, hoards, and export to the East consumes the entire output from the mines each year, yet, on the other hand it can not be demonstrated that it does not do so."

Allowing for the jeweler's habit, which I have referred to, and for some increase of consumption in 1893 beyond that of preceding years, I should place the gold going to arts, industry, and hoards in 1893 at least so high as 125,000 kilograms. Not insisting on this, however, let us simply take Soetbeer's figures for 1891, viz, 120,000 kilograms, equaling $79,752,000. Adding to this the Russian and Indian product for 1893, we have, as the sum of gold put in that year to nonmonetary service, and therefore to be deducted from the total product of the world, $108,565,600, instead of $88,000,000, the amount deducted by Mr. Preston. The monetary part of the 1893 gold product of $155,522,000 was therefore only $46,956,400, and not $67,522,000, as concluded by the Director of the Mint. The

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increment to the western world's money stock for 1893, instead of being $7,000,000 more than that of one of the years just preceding the demonetization of silver, was less by $13,605,575 than the average of those years. When we consider with this the world's increase in population and wealth since 1873, England, a representative country, having gained 7,000,000 souls and increased her commerce, spite of the fall in prices, from. 470,000,000 sterling to 681,000,000, it is not strange that, prices fell 10 per cent. in 1894.

I am happy to join the Director of the Mint in his belief that the yearly output of gold is likely to increase for a number of years; and though nonmonetary consumption will increase, too, I presume that the part going to replenish the monetary supply will be not a little augmented. But there are three colossal and obdurate reasons why one can not expect our business distress to be relieved by gold alone.

Suppose the new gold to succeed in stopping for a single year the fall in prices. No one can imagine the immense spur and enlargement to industry which would immediately ensue. Let prices cease to fall, let investments in enterprises for producing wealth again become safe, as before 1870, let the srockholder again have a chance to make something as well as the bondholder, let the loaning of European and United States capital in China, Japan, India, and Mexico cease to be a form of gambling, and a volume of new industry would spring up to which the slight increment of gold money that started it, enlarged by all the credit that could be based upon this, would be utterly inadequate, making a renewed fall of prices the quick and sure sequel. So past an amount of business would be called into life by

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an arrest in the fall of prices that the utmost amount of money which the coinage of gold and silver both could furnish would be necessary to sustain it. No inflation, I am persuaded, could result from the free coinage of both metals, could it be made general. Both together would perhaps be able to sustain prices, but would not sensibly raise prices.

A second reason why gold alone can not check the fall of prices is that the moment the metal obviously becomes at all plentiful, Austria and India will purchase vast sums that they may place themselves completely on a gold platform. Japan also would probably at tempt to change from silver to gold. If this did not turn the gold plenty to penury again, other silver nations would do the same. You can not permanently maintain the gold standard anywhere unless you can do it everywhere. The world of com pierce will not brook division into monetary hemispheres. It will not tolerate the chaos of one basal money for the West and another for the East, one for wealthy centers and one for cruder communities, one for the motherland, the other for colonies. In kind, all the griefs which are moving India to try and place her feet upon gold press Mexico, all Central and South America, Ceylon, Mauritius, the Straits, Japan, and China to do the same; and no possible increase to the world's stock of gold will enable it to be so spread out The conflict for gold, if it is not paired with silver, must be not only irrepressible, but more and more bitter without end.

A third reason for denying that gold alone can heal the world's monetary lesion is as follows: Prof. Shield Nickerson makes it extremely probable that when silver falls in value, as it probably did to some extent during

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1893 and 1894, and falls, too, in consequence of causes directly affecting itself and not in the first instance reaching gold at all, still the gold prices of international commodities are determined by their silver prices. That is, suppose some cause in the gold-price world to be so affecting the relation of gold to commodities at large that, if you could annul all influence from the silver-price world, gold would cease to rise in value; yet, since you can not annul that influence, if silver goes on falling in relation to gold, gold will, in fact, not cease to rise in value, but the gold prices, in gold lands, of all commodities in which gold and silver lands compete, will continue to fall.

Were silver again standard money everywhere, the demand for it would be so great that its marginal cost, and so its value in the world's trade, would not fall but probably rise, prices in silver falling to correspond; but if silver remain full money in the silver lauds only, excluding India, the demands for it can all be met at such a marginal cost as will permit the gold price of silver to fall and prices in silver lands to rise, slowly, for an indefinite time, if not forever; this fall, through the whole of its extent, pulling down general prices in gold lands.

Pacing the three considerations thus presented, I can not but think the hope of monetary relief from gold alone wild and visionary in the extreme.

But while the new gold does not modify in the slightest the need of restoring silver to its old rôle as full money, it triumphantly answers the only argument which, with me, ever had any weight against trying to restore silver. Hans Forssel, of Sweden, following Professor Lexis, argued in the Monetary Conference of

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1892 that however large any international pool of gold and silver might be, making it perfectly impossible for its gold to leak out of it, its gold might become so scarce as to belost in it. This objection to bimetallist effort then had some force, but the output of new gold now deprives it of all validity whatever.

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Chapter XV. — The Banking Principle — By Edward Atkinson.

Before dealing with my main subject certain existing conditions will be stated.

It is becoming evident that the great body of thinking people in this country are realizing the necessity for an adjustment of our banking system to the present conditions of our trade and commerce. It is also becoming evident that both the bankers, business men and students of every kind who try to master details and principles as well as the mass of the people who have not time to master details but are governed by common sense (of course omitting populist and currency cranks), have reached the conclusion that there must be a unit or standard of value, either monometallic or bimetallic, which shall be the lawful money in which all notes and subsidiary or undervalued coins which bear the semblance of money, whether of the nation or of the banks, shall be promptly redeemed on demand.

There is a difference in judgment between what are called "monometallists" and "bimetallists" as to whether that standard and unit of value shall consist simply and singly of a fixed weight of gold converted into coin, or of gold and silver held together at a fixed ratio of weight by an international treaty or agreement. That discussion holds no necessary part in the consideration of the system of banking or of the banking.

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principle, it being a separate and distinct issue. Neither monometallists nor bimetallists give any support to the suggestion for the free coinage of silver at the present ratio of sixteen to one without the co-operation of other nations, nor do they give any support to the advocates of fiat or legal tender paper money to be supplied by the nation.

Those who might and may soon unite in the support of a sound system of banking under which all notes of every kind shall be subject to prompt redemption on demand in the lawful standard or unit of value, are at present unable to act together for certain reasons. Many of the elder men who have a thorough knowledge of the practice of banking are affected in their judgment of the course which should now be taken by their recollection of the difficulties and dangers of what has become known as the "wild-cat banking and bank notes" of the ante-war period. Many other men of sound judgment are governed by the sense of the benefit which was gained by the establishment of the National bank system and through the circulation of the National bank notes secured by United States bonds. Great masses of people who possess votes, and therefore influence, are affected by the delusion that it is necessary that there should be a very large supply of the small instruments of exchange (notes and specie) which pass from hand to hand. With many persons the only conception of money is limited to such small notes, National or bank, as the case may be, and to the coins which pass from hand to hand.

In dealing with the reform of our banking system all these variations in judgment or in imagination must of necessity be considered. It therefore follows that any

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plan that can be suggested with any prospect of its being considered and passed by congress must be prepared so as to meet these existing conditions.

In the subsequent treatise I have endeavored to provide a way for the adoption of a true banking principle in the issue and circulation of bank notes. I have also endeavored to provide for such an extension of banking in remote districts through the establishment of branches as may overcome the prejudice of ignorant or uninformed people against banks and bankers by enabling them to learn for themselves that the bank or banker who conducts the business under safe conditions is the next friend of the farmer, the manufacturer and the mechanic alike; rendering to all a most valuable service in consideration of a reasonable profit which such banks and bankers may secure in the conduct of their work, either as banks of deposit or by the issue of notes. Consistently with these motives and considerations I have endeavored to make what I believe to be the true banking principle as plain as it may be made, by pointing out what I believe to be errors or delusions and thus removing much of the complexity with which the subject has been obscured.

The object of this paper is therefore to bring four main points into conspicuous notice.

1st. How impossible it is for the government to provide or supply money for the transaction of business.

2d. How safely, surely and simply the community will supply itself with all the money that it can use, provided it is left as free from legal restrictions as possible.

3d. That the safest custodians of the business of the

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country, including banks, are the men who conduct the commerce of the country.

4th. How surely a safe supervision will be exerted over bank note issues by banks and bankers themselves, since upon them must fall the greater part of the losses which would ensue from bad methods of banking and from the issue of bank notes of an unsafe kind.

Bank notes issued consistently with the true principle of banking must rest wholly upon the general assets commonly called the business or commercial paper which is discounted by banks. Bank notes secured by a deposit of bonds or mortgages require that the capital of the bank which might otherwise be used for discounting business paper shall have been invested in such bonds, thus limiting the ability of the bank to discount commercial paper by the amount of capital thus invested.

Since the enactment of the National Bank Act all the conditions of the country have profoundly changed. Capital has increased enormously, and by means of the railway express and telegraph services the whole country may be said to have become a unit for banking purposes.

The present quick and ready communication throughout the country would now render the issue of bank notes, redeemable under what was known as the old Suffolk Bank system of redemption in New England, as safe and sure as that system then was prior to 1861 and as the Canadian system, which is analogous to it, is at the present time.

It is an axiom in banking that the consumption of the goods or commodities of which bankable paper is the transferable title, is the source of the power for

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paying the representative note, draft or bill of exchange which the bank has discounted. About one-half the business of this country consists in the production, conversion and final sale for consumption of articles of food, this consumption of food cannot stop even in the hardest of hard times, because the most productive country is always within about one year of starvation — hence it follows that bank notes issued and circulated in farming districts, i.e., notes, drafts and bills of exchange which are representative of the production and distribution of the products of the farm, as well as credits granted to market men, grocers and other dealers in food material, may or must be sure of prompt redemption if due care is exercised in granting such credits. The very prompt payment of this class of paper was very noticeable during the recent panic. A large part of the food cannot be kept long and each year's product must be almost wholly consumed in any given period if not exceeding twelve months. On the other hand, notes or drafts representative of whiskey might be slower of redemption because the liquor improves by age. If a separate series of bank notes were issued year by year specifically secured on each year's product of whiskey, redeemable at its market value equivalent to and proportionate with age, such notes would gradually become worth a premium as each series became of older date. "Whiskey notes thus redeemable would be in marked contrast to silver notes issued on a bullion purchase or deposit. Had United States notes been redeemable only at the market value of the silver bought by the government since 1878 they would now be depreciated one-half. The fear of

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this loss has lately promoted a most wholesome demand for the redemption or funding of these notes.

No private banker or incorporated bank would ever have issued its notes upon such a poor security as silver. Neither would any private banker or incorporated bank have ever placed itself in the grotesquely absurd position in which a series of incapable congresses have put the treasury of the United States. The government has issued its promises to pay on demand for a little less than $500,000,000 for the purchase of silver bullion and for the conversion of "trade dollars," which it now holds in its vaults under conditions which forbid its use or sale. The only resource of the government for the redemption of these notes is therefore through the exercise of its power of taxation. When for a time the revenue from taxes becomes insufficient for such redemption it must borrow on interest-bearing bonds in order to defer payment for a time without recourse to the silver, as it has done.

In support of the theory that a true and safe banking system for supplying small notes for circulation from hand to hand, based on general assets consistently with the "banking principle," certain very close estimates of possible loss will now be submitted. From the best analysis, tested in many ways, that I have been able to make, I have become satisfied that the average annual product of the people of this country per capita is now in excess of what $200 in gold will buy at retail prices in one year. That was my conclusion in 1880. This per capita estimate would make the total annual product of 1894 nearly $14,000,000,000 worth of food, fuel, fibers and fabrics of every kind. Substantially one in three of the population is occupied in gainful

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pursuits, each one sustaining two dependents on the average. At the estimate of $200 worth per capita, the average proportion of our annual product falling to each person occupied for gain would come to $600 worth if it were distributed uniformly per capita at retail prices.

Out of this product the National, State and municipal taxes take substantially $12 per head, or 6 per cent. of the product on which share those who do government work are sustained. The additions to the wealth of the country on the very careful estimates of the Census Department in the last decade were in ten years $130 per capita, of which probably more than $30 represented the rise in the value of land. The remainder was the share of the product added to capital at the average rate of $10 a year per capita, or 5 per cent. of the computed product.

This estimate does not cover the entire gain in wealth, which is made apparent by the computations. It is the measure of the gain in the average capital per head, upon the basis of the census figures, which are doubtless as near the mark as it is possible for such approximate estimates to be. The population of 1890 computed at 62,622,250 shows a gain of 12,466,467 over the population of 1880, which was 50,155,783. The population added in the decade had, therefore, attained property to the average amount of 1880, to wit, $870 per head. In addition to this, the whole population of 1890 possessed an average valuation of $1,000 per head — a gain of $130 each, including the whole number enumerated in 1890. It is this gain in wealth which I have divided by estimate, as land valuation $30, railroads, canals, buildings, public and private, furniture,

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mines, machinery, tools, implements and products on the way from producer to consumer $100 on the average to each person. It is this addition to capital which comes to $10 a year and which represents a daily contribution of each person to the capital added in the decade of 2.74 cents a day to this increase. What the bearing of this is upon the question of the distribution of the annual product will presently appear.

In view of the rise in the rate of wages between 1880 and 1890, the lessening margin of profit and the reduction in the rate of interest, it is plain that the average product increased and probably amounted in 1890 to what $225 a year would buy at retail prices, or $200 free of taxes and of contributions to capital. These problems become more easily comprehended when reduced to terms per day.

If this computation of $225 is approximately correct the annual product of 70,000,000 people would possess a valuation at retail prices of $15,750,000,000. This product is the subject of trade and commerce less what is consumed directly by those who produce it. It is our provision for shelter, food, fuel, clothing and other material wants.

This product which is the subject of commerce becomes more comprehensible when reduced to terms of daily demand and supply. Two hundred and twenty-five dollars' worth divided by 365 days comes per day to

  6191c
$12 assigned to taxation comes to 3.29  
$10 added to capital comes to 2.74  
  603c
Remainder 5588c

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This remainder may be held to represent the average expenditure of the mass of the people for other purposes than taxation and additions to capital, as for shelter, food, fuel, clothing and sundries.

Assuming a basis of one in three occupied for gain this sum of .5588 cents per day represents an income and expenditure of $1.676 per day, which sum multiplied by 365 days comes to $611.77 per year, to each person occupied for gain and two dependents. A comparison of this estimate with the average earnings disclosed by the census and by Commissioner Wright's reports goes far to sustain the very close approximation of these figures to the facts.

It is a startling fact that great as the product of this country is — far greater ratably than that of any other, — yet the average person must be sheltered, warmed, fed and clothed from what 55 to 60 cents a day will buy at retail prices. Yet that is the measure of all there is produced at my estimates, which are very much higher than those of most students. When I have endeavored to prove that adult men and women can secure comfortable rooms, well warmed and lighted, adequate clothing and full nutrition in the city of Boston on an expenditure of not over $200 a year, my statements have been received with incredulity or derision, and sometimes with obloquy and personal abuse, yet there is a vastly greater number of people in the United States that have less than that sum to spend than there are who have more.

Whether these computations are exact or not they are sufficiently near to serve as a good working hypothesis in the subsequent analysis of the trade of the country and its connection with banking.

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Assuming, as I think we safely may, that the product is now sufficiently in excess of $200 worth per head to meet taxation and additions to capital, there would remain $200 worth per head on the average to be expended or consumed by each person. This expenditure would be in about the following proportions: $90 to $100 for food, fuel and light; $25 to $40 for clothing, carpets and other textiles; $25 to $40 for rent, and the remainder for sundries; each person sharing this product by the measure of his earnings, wages, profits or other modes of distribution.

A part of the food supply is consumed, where it is produced. We may estimate that at $30 worth per head, which would be a very large average proportion of the food which is not bought and sold. There remains $170 worth of food, fuel, fibres and fabrics, which are the subjects of commerce — that is to say, of purchase and sale.

Let any one consider the known facts as to the dealings in these materials. For instance, a credit is granted by a storekeeper to the grower of cotton in the South at very exorbitant charges; the storekeeper really being the banker of the community, where banks and bankers are subjected to prejudice and suspicion, and therefore cannot safely serve the community. The storekeeper having granted a credit to the grower sells the bale of cotton to the dealer, he then buys his goods on credit, longer or shorter, — the dealer sells the cotton tc the factory, the manufacturer sells the doth directly or through a commission merchant to the converter or to the jobber, — finally it is sold again in the form of clothing. All these transfers or conversions are worked by separate bargains and sales, each one of which is

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transacted on credit or by passing cash. Western grain is sold by the farmer to the miller or his agent, the flour is sold by the miller to the merchant, by the merchant to the baker; finally the bread passes mostly through shops before it reaches the consumer. The great number of conversions of timber and metal into buildings, machinery, etc., are to be considered. So it is in every branch. Every trade, bargain or conversion from the crude to the finished product involves a purchase and sale; it is therefore worked by the use of instruments of credit or transferable titles, such as notes, drafts, bank credits and bills of exchange. It is conducted in least proportion by the passing of cash in some form or lawful money.

There is another set of monetary transactions in the work of transportation. During the last year which I analyzed, I think it was 1892, 22,000 pounds of food, fuel, fabrics and fibres were moved 110 miles by steam railways only, for every man, woman and child of our population, taking no account of transportation by rivers and canals. Retail transportation by wagons costs more than wholesale transportation by railway. It costs more to distribute loaves of bread through shops and by bakers' carts than any other element in the cost of bread. Here again are bargains and sales in almost infinite number.

Now, if we estimate only three transactions on only $170 worth of food, fuel, fibres and fabrics to each person, the trade of the country, which is worked in greatest measure by instruments of credit or negotiable titles, and in least proportion by the passing of cash, comes to over $500 per head each year. We now number 70,000,000 people. At three conversions only

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from producer to consumer, the volume of our mercantile transactions would come to $35,000,000,000 a year. It is probably much more.

All the wholesale transactions and a large part of the retail trade are conducted by instruments of credit or negotiable titles, known as notes, drafts, bills of exchange and checks, or on book accounts or credits granted by retail dealers; a part of the retail trade only is conducted by what is called cash, i.e. by the use of small notes and small change.

The demand for more money in legal tender notes or silver dollars is made by persons who have no conception of the true conditions of trade. In their misdirected efforts to provide by legislation for the issue of fiat money or by the free coinage of silver, they have created distrust and have thereby brought on a panic accompanied by a partial paralysis of trade, thus reducing prices by their very effort to increase them.

It is the function of banks and bankers to Seal with these transferable titles or representative instruments of the exchange of property. Banks do not deal in money. The notes, drafts, bills of exchange and bank deposits are representative of the property passing by title in money from the producers to the consumers. These instruments of credit are adjusted in amount to the quantity and value of the property of which the titles in terms of money are in process of exchange. This process is automatic. A small proportion, estimated variously at from 5 to 10 per cent. of these transactions, is conducted by the use of bank notes, legal tender notes, or small bills of various kinds and specie or small change, ninety to ninety-five per cent without the passing of any money from hand to hand.

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Keeping in mind the magnitude of these transactions, the figures of mercantile losses of the last three years give a clue to the proportion of losses by mercantile failures on all discounts of business paper incurred by banks and bankers, merchants and traders. Of course we have no clue in these figures to the losses of retail dealers from default of payment by their customers, when the dealers do not fail themselves, but we have a very close measure of the losses on the larger transactions in which banks and bankers are concerned.

On the "Bradstreet's" figures lately published, the losses in 1894 by mercantile failures were $80,000,000, — a very large sum when considered as a unit, but a very small fraction when considered in proportion to the total transactions. This loss computed on a trade of $35,000,000,000 comes to only 22 86-100 per $100, or less than a quarter of 1 per cent. The losses in the panic year were $163,000,000, double those of 1894, but yet less than a half of 1 per cent. on the total trade. In 1892 the losses were $60,000,000, or less than a fifth of 1 per cent. on the trade of that year, which was conducted under normal and safe conditions before the danger of national discredit had become apparent to the multitude.

From these figures one can judge of the absolute security of a banking system in which prudent bankers deal with transferable titles to this great volume of the necessaries, comforts and luxuries of life in monetary terms established on a stable unit of redemption. The losses by bad debts in the wholesale traffic in a very large number of establishments, with which I happen to be personally familiar, have not been a tenth of 1 per cent. per annum during the last ten years. Hence it

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follows that no well managed bank loses a quarter of 1 per cent. per annum under a sound monetary system, or 25 cents per $100 on its discounts of mercantile paper. The government attempts to exert no supervision over these titles to property in the form of notes, drafts and bills of exchange which are discounted by banks; if the government attempted any such supervision it would be a futile waste of effort.

Such being the facts, what bond or security of any kind can be equal to this great volume of bankable paper, which constitutes the chief element of bank assets, representative of commodities of which the consumption assures the redemption of such small notes as may be needed for the conduct of a part of the final retail traffic of the country? Yet, because these notes have the semblance of money some additional protection may be given to holders by rendering stockholders liable and by making these notes which possess a semblance of money the first lien on the assets of the banks; but that redemption must be in true money.

The best definition of true money is that of Henri Cernuschi, the most prominent advocate of what is called bimetallism. "It is by the ordeal of fire that money may be tried. The coins which, being melted down, retain the entire value for which they were legal tender before being melted down, are good money. Those which do not retain it are not good money."

Little more can be needed to secure redemption in these days of clearing-houses and telegraphs than the quick and close supervision of one bank over another through the clearing-house. No "wild cat" bank could possibly put "wild eat" notes into circulation under present conditions.

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Measures would at once be taken by bank associations or clearing-houses by which the prompt redemption of bank notes could be as absolutely assured as it was formerly in New England under the Suffolk system in Boston, and is now in Canada. Under this system the government would soon be rapidly divested of any connection with the supply of the currency, except the supervision of the clearing-houses by the Comptroller.

It has become evident that whenever a safe and suitable bank note currency is permitted to be supplied by banks, which will adjust itself automatically to the business of the country, the demand notes of the United States now circulating by force will be presented for redemption or funding, thus divesting the government of any connection with the issue of notes and taking it out of the business of banking for which it is unfit.

The Administration now holds complete power for the redemption of these notes by the issue of 5 per cent. bonds under the resumption act. Public opinion is becoming so rapidly concentrated on the lines of sound banking and sound money as to make it very certain that the next congress, whenever it meets, will obey the public mandate on these lines without much regard to mere party lines.

There are many matters of detail which need not be treated at length. The writer is profoundly convinced that he has underestimated the sum total of the bargains and sales or mercantile transactions which are necessary to the distribution of our annual product. The volume of trade, aside from real estate, stocks and bonds, doubtless comes to over $100,000,000 a day for every day in the year, including holidays and Sundays.

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In such case the proportion of losses from bad debts on mercantile transactions in the necessaries, comforts and luxuries of life comes to less than the proportion which has been indicated. If it be true that even in a panic year the losses by mercantile failures have been less than a half of 1 per cent. on the total volume of transactions, then a tax of one-half of 1 per cent., imposed through the clearing-houses and held by the Comptroller of the Currency for their protection, would be far more than ample for the ultimate redemption of all notes issued by all banks authorized to issue them. An additional tax of one-half of 1 per cent., making a total tax on circulating notes of one per cent., would be equitable in consideration of the supervision of the government through the clearing-houses. If the revenue and redemption tax on bank note circulation were thus limited to 1 per cent., without other restrictive provisions, like the deposit of bonds or legal tender notes or other unnecessary security, the whole capital of the banks would be available for business purposes, and the profit on the circulation in excess of 1 per cent. would be quite sufficient to induce the creation of a volume of bank note currency which would automatically adjust itself to the conditions of business year by year; such a currency would also adjust itself to the variation in trade season by season in each year. Under the present conditions of compulsory reserve on deposits and investment of capital in bonds, the banking community is legally forbidden either to extend support to merchants or its note circulation at the very time when both are most needed. On the other hand, banks may be, and often are, oppressed by the accumulation of government notes which cannot be used

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except in unwholesome speculation at the period when there is little or no call for small note circulation.

A single very superficial objection to the State bank issue of notes is that travelers might be forced to take bank notes in change which could not be used when outside of the section in which that bank happened to be situated. A simple reference to the very extensive system and use of travelers' checks and money orders issued by the American Express Company and others, gives the clue to the ready method in which all these petty objections can be met. The American Express Company and others which issue checks have something like 6,000 branches. Their travelers' checks are convertible into cash that is in customary use in every part of this country, and in nearly every part of Europe at these branch offices. Other express companies, such as the Wells-Fargo Co., the Adams Express Company, and many others, issue money orders. The total number of branches at which these checks and orders can be cashed number over 20,000.

In fact, these travelers' checks, issued by express companies payable not only in all parts of this country but in many parts of Europe, are also convertible into the cash of other countries, not only at regularly established agencies, but at hotels, railroad stations, etc., in many parts of the world. The printed supplement to the United States' list of the correspondents of the American Express Company, where their checks may be converted into the cash of the country, includes many places in Asia, Africa, Mexico, South and Central America and the West Indies — even in Jerusalem.

Any change in our banking methods might be rightly accompanied by permission to the great city banks to

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establish branches all over the country, wherever they might please, or in specific clearing-house districts. This would tend not only to equalize the rate of interest and to carry capital from the congested centers in the cities to the very confines of the country, as this system does in Scotland. It would tend to remove all objections that can be raised in respect to the circulation and ready redemption of State bank notes. If express corporations find it for their interest to issue checks and money orders and conduct their business with safety in the service of those who choose to avail themselves of it, the question may well be asked why banks should be deprived of the same privilege which would work a service in the distribution of their more ample capital as much greater as their functions and capital are greater than those of an express company.

The eleven great banks in Scotland have, I believe, over 1,000 branches in that small State of a little over 4,000,000 people. The thirty-eight Canadian banks have 460 branches, extending from Halifax on the east to Vancouver Island on the west coast.

What but profound ignorance and jealousy of banks and bankers prevents the people of this country securing the same service with the corresponding benefits in the wide distribution of capital and in equalizing the rates of interest thereon?

The deductions which must ensue from these premises, if they are approximately correct, may be stated in the following terms:

1st. — There must be a lawful unit of value which will serve as the standard of all transactions, bargains, sales and exchanges.

2d. — Duality in a unit is unthinkable.

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3d. — The present lawful single standard or unit of value of the United States is a dollar made of gold.

4th. — Legal tender acts work by forcing a substitute for the lawful unit of value into circulation which when not instantly convertible or redeemable at the standard of the lawful unit become distrusted and presently depreciated.

5th. — As wealth and intelligence increase, the exchange of services and products in which commerce consists is augmented much more rapidly than the growth of population.

6th. — With this growth of commerce the use of instruments of credit in place of coin is also greatly increased, while the circulation of the coin, which is the unit of value, is reduced.

7th. — The right of place for the coin which is the unit of value is in the reserves of banks and bankers, by whom the titles to exchangeable products are discounted and by whom credits are granted.

8th. — It would be impossible for the government of the richest nation to supply coined money sufficient for the whole work of commerce. A much less sum may always be available in ample measure for prompt redemption. A rich nation will always supply itself with all the coin of the highest standard that it can possibly use in sustaining its instruments of credit.

9th. — There is no international legal tender, therefore foreign exchanges are now adjusted to the pound sterling, which is the name or title given to one hundred and thirteen grams of gold, the equivalent coin being named sovereign.

10th. — The effort of the advocates of the free coinage of silver, or of the issue of government legal

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tender paper and other devices for supplying money, may be attributed to their ignorance of the function of credit and of the necessity for an established unit of value. Their efforts are usually accompanied by bitter prejudice against banks and bankers. The invariable result of any success on their part is a paralysis of industry by which prices are forced below cost and the compulsory idleness of large numbers of workmen ensues. These results, long before predicted, were fully realized in the purely financial panic of 1893, and will be brought about again sooner or later unless the delusion for "cheap money" is crushed out. Another result of this delusion is found in the condition of the specific states from which these misrepresentatives are sent to congress. They remain relatively poor and un-progressive because the public credit of the state is distrusted as well as the private credit of the citizens.

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Chapter XVI. — By Charles Foster, of Ohio, Ex-Secretary of Treasury.

I DO not concede that there is any serious trouble with our currency as it stands at present, every dollar of which is the equal of every other dollar; and I see no great difficulty in maintaining this condition, simply at the cost of maintaining a sufficient gold reserve. But, in my opinion, the time has come when legislation upon the currency question should be had upon broad lines. The time has come when our floating debt (I mean the treasury notes, both old and new) should be funded and paid, and that all of the paper currency of the country should consist of national bank notes.

My suggestion is, that the government authorize the issue of two and one-half per cent, bonds, in amount sufficient to take up the five hundred millions of new and old treasury notes; that these bonds be available to the banks upon which to base circulation; that the banks should be permitted to issue circulation up to the par of the bonds, and in amount equal to their capital and surplus, and that only a small tax should be placed upon the banks to pay the government for its expenses for printing the notes, and its oversight of them.

To give the elasticity that is so much desired, I think it would be well to authorize all clearing-houses to

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issue clearing-house certificates, in emergencies, at the discretion of the clearing-house committee, upon the pledge of unquestioned collateral. I would also suggest that the comptroller, with the approval of the Secretary of the Treasury, be empowered, when an emergency arises, to issue to such banks as apply, what may be called emergency circulation, to a limited extent of their capital and surplus (say twenty five per cent), upon such pledge of collateral as shall be satisfactory to him.

A tax of 1 to 3 per cent. might be charged upon such notes, to create a fund for the redemption of the emergency notes of failed banks. No reserve to be required for such emergency notes. The good assets so named, to be held as security for the redemption of certificates so issued. If it should be found practicable, which I doubt, for a clearing-house district to be so formed as will enable it, within its own jurisdiction, to engage in the business of authorizing the issue of certificates, I can see no objection to giving such authority. When conditions change, the circulating notes are to be paid off first, and, secondly, the clearing-house certificates.

The notes should be a first lien upon all the assets of the bank. To avoid any question as to the ultimate payment of any circulating note, the government itself should guarantee their redemption. There can be but little risk to the government in any event, and it is better, even if the government should lose something by this guarantee, than that there should be any question as to the soundness of the notes themselves. These emergency notes should have some distinguishing mark printed upon them, to distinguish them from the regular issues.

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If this plan of finance should be adopted and consummated, the total amount of United States bonds outstanding would be about $1,300,000,000. To cover the bank note circulation now outstanding and make good the withdrawal of $500,000,000 of treasury notes by an equal increase of bank notes, would require $700,000,000, leaving $600,000,000 for further use as a basis for circulation. The increase of bank notes should at all times practically keep pace with the retirement of the treasury notes.

The $600,000,000 of bonds yet unused will, for the time being, furnish a sufficient basis for the farther issue of notes, so that the question of furnishing a substitute for bonds as security for bank notes is not at present important. When the time comes that bonds are no longer available for this purpose, there can be no doubt that a practical substitute can be found.

I have suggested that the banks be authorized to issue notes equal to their capital and surplus. This suggestion is prompted by the fact that the total surplus exceeds the capital, and in some banks the surplus exceeds many times their capital. The banks should be required to keep at least one-third of their reserve in gold. If this plan be adopted, the volume of emergency notes and clearing-house certificates could be availed of to so great an extent as to allay the fears of the most timid as to any scarcity of money or even of credits

A gentleman holding high official position in the present administration, has said that the government has no more concern over the deposits in national banks than it has over wheat stored in a public elevator. If this be true, as the bank notes are amply secured, why does the government exercise supervision over the

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banks? What is the object of this supervision, if it is not to use the utmost efforts of the government to secure sound banking, to keep the banks within safe, prescribed lines? If this is not protecting depositors, I wholly misunderstand its object.

These banks having been authorized by congress, it is the plain duty of the government to use its best efforts to protect the public in all their dealings with institutions so authorized.

If a system of currency legislation such as is here briefly and imperfectly outlined, were adopted, then the paper currency of the country would be only the notes of the national banks. There would then be no necessity for the government's maintaining a gold reserve of any amount. This being accomplished; it seems to me that the government might then undertake the purchase of all of the American product of silver, and coin it, or permit the holders free coinage of the American product, the seigniorage to go to the government.

As it will take, according to well-authenticated figures $800,000,000 to transact the retail business of the country, the present stock of silver can be utilized for this purpose. If all this business is done with silver, $300,000,000 in addition will be required. It is sought to do this by limiting the issue of bank notes to denominations not less than $10 or $20.

The treasury would be relieved from the task of maintaining a gold reserve. Silver being a legal tender, the banks could not be denuded of their gold. When gold vas wanted for export, the exporter would then get what he wanted by negotiating with those who had it. In other words, our condition would not be

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that of inviting gold exports, as is the case at present.

It has been suggested that hereafter no bank notes or circulating medium in the shape of paper, should be of less denomination than ten dollars. The purpose of this is to compel the circulation of silver for all of the small transactions of the country, which it is estimated would require $800,000,000. I doubt very much whether the requirement would be so great, but that is not a matter of importance. I no not see any special benefit in compelling the circulation of silver dollars. I would agree with the plan so far as to say that no bank note should be issued of a denomination less than ten or twenty dollars. But I can see no reason why this inhibition should apply to silver certificates. The certificates simply represent the silver in the vaults of the treasury. It is much, preferable, in the daily transaction of business, to handle the notes, than it is to handle the silver. And then, again, there would be no abrasion or loss of silver. There are seasons of the year when the West and South need small bills to move the crops. If that suggestion prevails, then a large additional cost is imposed upon the public for transporting and handling the silver; and it must be remembered that when this currency has fulfilled its mission, it is returned again. The end is practically the same, viz: the compulsion of the use of silver for all the small transactions of the country.

I would also modify the sub-treasury act so as to permit the Secretary of the Treasury to deposit the moneys of the government with the banks, taking government bonds as security, as is done now with receipts of internal revenue in many places. A small

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rate of interest might be charged the banks. If this were done, the money of the government would be in the hands of the people for daily use, and would add to the present volume something like $150,000,000. If, in addition to what is here suggested, a national clearing house would be established, so that gold need not be constantly carried back and forth across the Atlantic, an enormous improvement in financial and currency conditions will have been achieved.

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Chapter XVII. By Senator Fred T. Dubois of Idaho.

It is very evident to the most casual and indifferent observer that the cause of silver is gaining ground every hoar. This is apparent in Germany, England and all the gold-standard countries of Europe, as well as in the United States. The most rapid progress and the crystallization of sentiment is more marked in the United States, to be sure. The reasons for the change of sentiment are easily understood. Distress and hard times are general throughout the world. There is a prevailing opinion among producers and wage-earners that the era of falling prices and consequent depression in all lines of trade has been brought about by the adoption of the gold standard by the leading nations of the world. Nothing is of stable value now save good gold mines and gold money. There are not many of the former, and the owners of gold money as a rule do not live in the United States.

The great majority of the people of this country understand, I think, that with gold as the sole standard of money that metal is appreciated and all things which it measures in value are depreciated. It is boyish and unworthy of men who undertake to direct public sentiment to say that silver has not been demonetized. To say that silver is still in use and in large quantities in the United States and that it is maintained on a parity with gold is a begging of the entire monetary

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question which is entirely unworthy of some distinguished gentlemen who have lately expressed them-selves. There must be basic money. On this other moneys rest. There must be a money of ultimate redemption in order to insure absolutely safe currency. It is a serious question whether there is or can be enough of both gold and silver to supply this basic money. When both were used, prior to 1873, they seemed to answer the purpose and remained at a ratio of about 15 1/2 ounces of silver to 1 of gold. The prices of labor, of wheat, cotton, corn and other products were maintained.

When silver (which comprised one-half of the basic money) was demonetized, when it was no longer recognized as the equal of gold at the mints, but was made a commodity the same as coffee, it fell in value as compared with gold, until now it is as about thirty-two ounces of silver to one ounce of gold. The significant fact, however, that wheat and corn and cotton and the value of all other products, as well as the price of labor, has fallen with silver is what creates the great demand for the restoration of silver as basic money.

I have the greatest respect for many of the able silver advocates in the United States who do not see their way clear to unlimited coinage by our country acting alone. I myself cannot see how we are to secure bimetallism unless the United States takes the initiative. England is a creditor nation. The gold standard makes money scarce and dear. This is to the advantage of England and she will not consent to the addition of silver as redemption money unless she is compelled to. I have no hopes of any international agreement until after this government adopts free coinage. England

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and the other great nations of Europe will then be compelled to join us or lose their commercial supremacy.

The minute the United States adopts free coinage at the ratio 15 1/2 or 16 to 1 the price of silver will be regulated throughout the world. No one who has given the subject serious thought or who has any regard for his reputation as a student of finance attempts to argue any longer that the restoration of silver by the United States acting independently would cause the country to be flooded with silver from foreign nations. This country could not be a "dumping ground" for silver for the simple reason that there is no nation which does not absolutely need all the silver which it has. There is no loose silver anywhere to come here. There will be no object in foreign countries sending silver here, even if they had it to spare, because it would be worth as much in each of the foreign countries as here and they would lose by sending it here what the cost of transportation would amount to.

Some claim that with free coinage all the gold will leave this country. What if it does? Where will it go to? Admit for the sake of argument that it will go to England. The volume of the money in England will increase to that extent, with the result that the price of our products which we sell in England will be enhanced and England will find it impossible to retain the gold.

It has been demonstrated clearly that gold cannot be retained in this country under the present condition of affairs. The government is absolutely at the mercy of any syndicate of rich bankers who desire to take it out of the treasury. All they have to do is to present

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the various forms of currency for redemption and our gold reserve of $100,000,000 melts away. The experience in this direction has been so recent that every one can recall it. The government has issued over $100,000,000 of new bonds bearing interest in its desperate effort to maintain the gold reserve of $100,000,000. It might continue this operation and in that way supply the gold deficit, which is liable to occur at any moment, but these bonds with interest must be paid at some time. This process of borrowing gold with interest-bearing obligations cannot continue indefinitely.

The silver men in the country are very much in earnest. They number a great majority of the people and will, I think, find a way to make their demands effective.

It looks to me as though both of the great national parties would declare for silver in 1896. In my judgment no party can win which endeavors to keep our government fastened to the single gold standard. If both of the leading national parties should be controlled by the gold standard advocates, neither of them could elect their candidate. An advocate of silver would then be nominated either in the Electoral College or by a separate national convention and elected.

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Chapter XVIII. — By Murat Halstead, of Brooklyn.

How is the silver and gold question to be settled? First, we will state what will not occur. Our mints will not be made free markets for silver until a great deal happens that is not popularly contemplated. No free silver bill will become a law; at least until after all the present champions of that radical measure have abandoned its advocacy.

Nothing important will transpire in an international conference. There will be no congress of nations that will proclaim unlimited coinage of silver into lawful money without limit until the battle of the standards is practically over, settled by commerce, not conferences.

Let us put down a few points to mark the way to a clear comprehension:

First. — No one has ever conspired agaisnt silver in this country. The origional "Criminal of the Century" was Thomas Jefferson, who, through James Madison, in 1806, ordered the Director of the Mint to cease coining silver dollars, an order that stood for a generation.

Second. — This was not because silver was improper or unsuitable, but for the reason the silver dollar was more valuable under the ratio than the gold dollar, and was exported accordingly.

Third. — Thomas Benton had the same trouble that Thomas Jefferson encountered with silver dollars. The

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coinage of silver dollars was not restrained because the dollars were unpopular or useless, but were too good to circulate. This fact cuts into the extremists on both sides, and will stay and bear an edge.

Fourth. — The silver dollar was still at a premium in 1873, when it was dropped by act of congress from the list of coins. The act of congress amounted to the same thing that the act of President Jefferson did, though an act of omission not commission.

Fifth. — Why, then, is not Jefferson the centennial criminal? Why did not his crime produce all the awful consequences we hear so much about out West and down South?

Sixth. — The act omitting the silver dollar coinage was not passed secretly. The facts, were all fairly stated on the floor of congress, but years passed before the people knew that anything had happened. They did not feel interested and actually their concern was slight.

Seventh. — The fall of silver was not expected, but Germany adopted the gold standard, and the various modern improvements in mining were rapidly increasing the product of silver. We had not done anything that influenced the market.

Eighth. — We were approaching the resumption of specie payments, and the popular instinct that it would be well to be thoroughly equipped with both money metals was correct. Specie meant both gold and silver coin, and we could not resume with what we had not.

Ninth. — There had been an immense increase of indebtedness — issues of securities — in the paper money period, and of course there should not be removed one of the metals constituting "coin" for the discharge of

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obligations when we attained the specie — that is, the gold and silver basis.

Tenth. — Upon this argument and the belief that the purchase of silver by the government would advance its price, the policy of coining two millions a month, at least, of silver dollars, was established, and its disestablishment did not follow until we had broken all records in coining silver, heaping it up by the hundred millions, and had done it all the while on a falling market.

Eleventh. — The difficulty of the decline of silver while the government was taking the bulk of the product of the mines had not been anticipated. Nobody "demonetized" silver, or wanted to do so, because he thought it was down — or would be put down. Our experiences had been from the first that we undervalued silver in comparison with Europe — and put so much of it in our coins that they were worth more than their faces called for.

These are the plain truths of the silver question. They are written in the laws of the land, and the history that gives the reasons for the laws. We have stated the facts without fanciful decoration. There was no secret, no conspiracy, no crime, no wrong done in the silver matter. We reversed the Jeffersonian policy by coining an amount of silver beyond all examples, and that is what is called demonetization.

If there was any great impolicy in our proceedings, it was in resumption — in not going on with paper — in not combining the greenbacks and the gray backs, as "the Blue and Gray" were united. We might as well, perhaps, have adopted the Confederate currency at first, as the Confederate tariff at last. But it was

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just as natural to us, after the military overthrow of the Southern Confederacy, to press on to fix high credit for the republic among the nations, by paying the national debt largely and making all our money as good as gold — as it was for Germany to adopt the gold standard after defeating France, and getting for indemnity $1,000,000,000.

Perhaps it would have been better to have printed enough greenbacks to pay the national debt, and to have rushed along the lines of Populistic endeavor — and thus to have tried the cheap money patent medicine to the full — but that was not what the statesmen who had charge of the country after the war thought about it. They held that the Southern Confederacy had experimented sufficiently with unlimited paper money. They believed the southern soldiers were brave — the southern generals able — for, indeed, there were many things unaccountable on any other presumption — but they did not think well of the southern politicians as they appeared in the origin and conduct; of the war.

If we were going into the cheap money business at all, we should have done it right away after the war and to the full extent. The end, of course, would have been the annihilation of credit — the impoverishment of the many — the enrichment of the few. That's the way with paper money inflation.

The silver controversy is unworthy the intelligence and the integrity of the American people. This free coinage of silver policy is a poor, shabby half-way proposition. It is a 50 cent repudiating dodge, or it is sheer craziness. If it does not mean to settle at 50 cents on the dollar, what is it fit for?

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It is said that the demonetization of silver has caused the price of farm products to fall. Well, wheat and cotton have been going up and down lately and silver has not sympathized in the least with their movements, and this is a demonstration of the falsity of the assumption that silver pulls our farm products up and down.

It is well to have plenty of money, the people say, and so it is, truly; but as for silver, we have $510,000,000 in the treasury, and if the people want a few hundreds of millions of silver dollars to jingle in their pockets there they are — five silver dollars for each man, woman and child in the United States not in circulation. Why do not the people get them out of the treasury and carry them around? Why should we coin any more of them? More than five hundred millions of silver dollars coined and in pigs in the vaults and staying there from month to month and year to year, ought to be sufficient for the most imaginative silver crank, but they seem only to cause the inflammation of folly.

The situation is a simple one, and the best thing that can be done with it is to let it alone. The course of events will take care of it. The Director of the Mint reports the output of gold in 1894 to be $172,000,000; in 1890, the output was $118,000,000; '91, $130,650,000; '92, $146,297,000; '93, $157,228,000, and in '94, a gain of $15,000,000 over '93 — the greatest production of gold ever known in the world, and the evidence of continued increase goes on. The Director of the Mint, a constant student of this matter, says the gold product will soon reach $225,000,000

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a year — more than f 18,000,000 a month — over $4,000,000 a week.

There are enormous banking reserves of gold in Europe, and there is a prodigious sum unaccounted for by the money in circulation and by the metal consumed in the arts. The people have been hoarding it. Gold has gone into the stockings in Europe and America, as silver slumps in Asia. There is no lack of it but there is no harm in plenty of silver also.

That the increased production of gold will be influential in human affairs is unquestionable. It will favor particularly the prosperity of Labor. The "World" has a cablegram from Europe that the Rothschilds are in favor of international bimetallism, and the same journal reports Senator Jones of Nevada as saying:

"The greatest bankers in Europe are in favor of bimetallism because they have watched closely for a number of years the increase in gold production, which has been going on steadily for a decade, and have come to the conclusion that a tremendous fall in the price of gold, as measured in the general level of prices, must inevitably take place. This fall they have figured as beginning probably within three years and extending indefinitely."

This is going too far, but it is in the nature of suggestions that are of importance. The addition of at least $200,000,000 of gold each year will cause a gold inflation, but the bankers are not prepared to fall back on silver as the more steady metal. That shift cannot be turned, but it is true that the Rothschilds have been interesting themselves in the African gold mines, and willing to favor an increased use of silver, but outside of this country in the gold countries no one advocates

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what we call free coinage. Such madness of misinformation is not conceived elsewhere. With the consumption of silver limited in coinage and the new supply of gold pouring in and free at all the mints, there will be an approximation of the two metals in market prices at the old ratios, and it will come pretty fast when the movement is fairly under way. When this happens there may be business in conferences, but not until then.

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Chapter XIX. By Ex-Governor Horace Boies, of Iowa.

The question to be answered, in my mind takes the following form: "If the choice in fact lies between the maintenance of our present money standard or its abandonment for a standard of silver only, would you recommend the change, or deem it wise to change our monetary system to the silver basis?"

Before answering this question, I desire to say: Our present money standard is purely a gold standard in which the unit of value, (one dollar) is fixed at twenty-five and eight-tenths grains of gold. That this was substantially the standard of the gold dollar before as well as since the demonetization of silver in 1873. That the demonetization of silver reduced by nearly if not quite one-half the primary money of the country, and in obedience to the inexorable law of supply and demand necessarily enhanced the value of the remaining one-half which was not demonetized.

That the process of increasing the value of this half was not an instantaneous process but a continuous one, that has been constantly going on since the act of demonetization, and must continue to go on in the future so long as the necessities of governments or the greed of men induce them to hoard gold, and thereby diminish the volume of primary money in circulation, and this in an accelerated degree, if for any reason the world's annual production of this one metal is hereafter

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diminished. That the experience of our own government in the recent past demonstrates that under our present system, this nation, one of the strongest and wealthiest on the face of the earth, is absolutely at the mercy of the money power of its own citizens, a limited class of whom are capable of draining its treasury of the last dollar of primary money it possesses, or sending it into the markets of the world a suppliant at the very feet of foreign money kings, to exchange its credit for gold on any terms these gentlemen see fit to dictate.

That the effect of enhancing the value of the primary money of the country upon the debtor class is even more disastrous because it increases the burden of their obligations to the same extent that the value of the one metal that constitutes the primary money of the country is enhanced, and to the same degree increases the wealth of the creditor class of this and other countries who hold the immense aggregate of our obligations to pay, national, state, municipal, corporate and individual, the entire weight of which must always be borne by the producing classes.

That as the value of money is enhanced, the price at least of the products of labor must necessarily diminish as they have diminished since silver was demonetized, and in the end the price of labor must inevitably seek the same level comparatively that products produced by it sell for in the markets.

The choice, therefore that the question suggests to my understanding is simply a choice between our present gold standard to remain a fixed and unalterable principle in our currency system for all time to come, and a silver basis that would by reason of a cheaper

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unit of value, exclude gold from circulation as money among the masses of our people, but leave it equally with silver; legally at least, a part of our money of redemption.

With this explanation, I unhesitatingly answer that I would exchange our present money standard for a standard of silver only, if this is necessary to secure the use of both gold and silver as legal money of redemption.

I have reached this conclusion because I am now convinced the contest in which the people of this country are now engaged is not one of ratio at all, but one that involves the vastly more important question of whether we are to reincorporate into our financial system the principle of bimetallism on which the fathers of the republic anchored it, and which I am entirely willing to affirm upon my own personal knowledge, was eliminated from it without any general understanding by the masses of what was being done.

I want it understood, however, that I am as much opposed to silver monometallism as I am to gold monometallism, and when the country reaches the question of what shall constitute an honest dollar in each metal, if it does in my lifetime, whatever influence I possess will be used to make both honest dollars, equally just to all classes, and to provide safeguards if any are found necessary to maintain the parity of the different coins.

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Chapter XX. — By Col. A. K. McClure, Editor of the Philadelphia Times.

The adoption of free silver coinage in this country on the basis of 16 to 1 would at once precipitate silver monometallism and a tempest of destruction to commerce, industry and trade would inevitably follow.

Such a step would degrade the United States that has maintained its credit throughout the entire world for more than a century, to the pagan nations and semi civilized South American governments. Both public and private credit would either be destroyed or greatly impaired, and the severest blow would fall on the industrial classes of the country.

The adoption of the silver standard in this country would bring back upon us from the old world hundreds of millions of securities in excess of the entire money of the country, including gold, silver and paper. Our securities would be discredited, and we would be compelled to redeem them; our great improvements, largely maintained by foreign capital, would be summarily ended, and the pall of death would fall upon American enterprise.

International bimetallism is not possible unless on the basis of the intrinsic value of gold and silver coin, and how the parity of the two metals can be maintained when silver is constantly varying in value, is not comprehended. The adoption of bimetal standard of 16 to

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1 would be a departure from the fundamental theory of honest money, and it certainly must be rejected by the leading governments of Europe for the reason that it would at once double the value of the money of the pagan and semi-civilized countries of the world which have the silver standard.

The only safe rule for the United States to adopt is to maintain the money standard that is accepted by all the civilized countries of the world. We must do it not only because it is right and honest and necessary to the maintenance of public credit, but we must do it because we are the largest borrowing nation of the world, and have developed for our people billions of wealth by the aid given us from foreign capital.

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Chapter XXL. — By Morris M. Estee. of California.

The modern way of increasing the interest on money is to increase the purchasing power of the principal sum, without changing the specified rate of interest. For many years England has done this. The creditor classes of America are now imitating her example. This is dishonest. It benefits the creditors, but ruins the debtors.

Nothing can be truer than that the financial resources of this country are attacked when we attempt to destroy one part of our metallic money, for by this means the value of products are lowered, the amount of our debts is increased (because the purchasing power money is greater as the amount of money becomes less) and hard times ensue.

Constitutional law, as well as the customs of our country, marks out a financial policy which makes necessary the full and free coinage of gold and silver money. In this connection it may be stated as a general proposition, there are but two international money metals, gold and silver. Gold being the rarest and most difficult to obtain, is the most valuable. Silver has always been used as money, and is the most convenient for small transactions. It is the money of the people, and is used alike by the beggar and the prince. In our own country, thousands of transactions are made in silver where one is made in gold. East of the

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Missouri river there is practically no gold in use. Silver, coin and paper are the only moneys in circulation.

The coin value of silver in the United States compared with the coin value of gold is as sixteen to one; that is, the coin value of sixteen ounces of silver, 900 fine, is equal to one ounce of gold.

The Constitution of the United States provides that:

"The congress shall have power * * * to coin money and regulate the value thereof;" and further — "that no State * * * shall make anything but gold and silver a tender in payment of debts." (Sections 8 and 10, Article 1, Constitution.)

It is constitutional law, that no State can make anything but gold and silver coin a tender in payment of debts. Under this plain constitutional provision, a State can make both gold and silver a legal tender. But it cannot make one a legal tender and prohibit the use of the other. Both metals were selected by the builders of our government as the necessary money metals of our country.

Congress has no powers except such as are conferred upon it. The States retain all the powers not expressly taken from them. The general government coins money, and it coins the money that the Constitution prescribes, but the States are authorized to make gold and silver the only legal tender in payment of debts. In a word, the States may indicate the purposes for which the money so coined by congress can be used; but congress cannot, by refusing to coin gold and silver, prevent the States from establishing a legal tender which the Constitution directs.

When congress is given power to coin money, it means only those kinds of money which the same

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instrument says shall be a legal tender in payment of debts. This clause of the Constitution clearly points out to the States the duty which they have to perform. The Supreme Court has decided that congress has the power to make paper money a legal tender. The States cannot do this. Congress has no power to demonetize any money which the States may declare a legal tender; nor is there anything in the Constitution which directly or indirectly gives to congress the authority to demonetize any constitutional coin. It may coin money; it may coin gold and silver, but nowhere is congress given the authority to destroy gold or silver as money.

As a question of national policy, there are many reasons why this should not be done. The United States produces more gold and silver than any other country, and the largest possible use of both metals encourages production and adds to the stable money power of the people.

In 1893, it is claimed, the world produced in gold and silver about $363,892,800, and the same year the United States produced $113,531,000, or about one-third of the total product. During the first ten months of the year 1894, there was exported from the United States, in excess of our import? of gold, more than seventy-three millions of dollars. This was necessary to sustain our balances of trade and pay our indebtedness to foreign countries. Hitherto, the policy of our government has been to increase the exports of products, and decrease the exports of gold so that our trade balances would be sustained without the use of money, but the change in our revenue laws, and the admission into our country of free and cheap raw material and of more foreign manufactured articles; has disturbed the courses of

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trade and thus caused a marked change in the amount of our exports and imports. We are now compelled to send out of the country more money to meet the demands which these now conditions impose upon us, and should we continue to export the same proportionate amount of gold for the next five years as during the last ten months, there will be very little, if any, gold left in the country, because a large part of the gold in the United States is not obtainable either for exportation or business purposes. The recent large shipment of American gold to Europe has surprised the gold people. It had been claimed that, when silver money and silver certificates were out of the way, gold would be abundant. But gold has not been abundant, nor has it remained at home, nor have our foreign and domestic markets improved. It matters not whether gold goes abroad to pay our trade balances, or is sent abroad for sale as a speculation, the result is the same — our favorite money is going away from us, and it leaves only paper money to do business with here. In a word, we have assisted England and Germany in making gold so valuable to them that it has become useless to us, for we cannot keep it at home. Silver has not driven it away. Free coinage is not the reason for its going, as we have not had free coinage. It is the result of new financial theories, the threatened and actual change in our tariff laws, and our conspiring to build up gold at the expense of silver, by driving it out of common use in the business and commercial centers of our country.

American credit must be sustained by Americans. Our prosperity and our ability to pay is the crucial test of our credit. One thing is certain: when we are

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not prospering at home we have no credit abroad. Being a debtor nation, we have no foreign balances in our favor, and when our exports do not largely exceed our imports, gold leaves, whether we have the free coinage of silver or not. The question resolves itself into this: Shall we have two money metals or none? We may try to retain gold, but we cannot do so if we demonetize silver. In times of prosperity we receive from abroad more money than we pay out; in times of business depression we pay abroad more money than we receive from there. This is so because our foreign creditors become alarmed and lose confidence in us, as we lose confidence in our ability to pay. When the value of our export products does not equal what we must pay abroad, and, as we increase the amount and value of our imported luxuries, we have to meet the difference in money; and when we join our foreign creditors in declaring that silver is not good money for home use, it will not be good money elsewhere. Thus gold will go out of the country in the same ratio as the excess of imports comes into it.

American mines in 1893 produced about $45,000,000 of gold. The arts, and losses in transportation and other causes, took about $15,000,000, leaving last year's increased gold supply of the country for coin purposes, if all was retained here, about $30,000,000. When we bear in mind that our increase of population and of business demands a constant increase of money, it will be noted that this increase of our gold supply will not exceed the home demand, and should the present tariff laws be continued and no change made in our coinage acts, gold will leave the country in the future, to meet

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our foreign obligations as it has done in the past, and the more gold we mine, the more will go abroad.

When we export money we take from our own people the most potential instrument of trade and commerce, but when we export our surplus products, we merely find a market for what we do not wish to use in our own country, and thereby increase our profits. And again: the interest on American securities held in Europe payable in coin is enormous, and must be met; and yet, in view of all these facts, we join hands with England in making gold more and more valuable and silver less and less valuable.

It is only within the past few years, and with a very few nations, that silver has been demonetized, and yet in those countries where gold is recognized as the only money metal, paper is the money of commerce because business cannot be done with gold alone. Bank bills, checks and drafts are the customary means of transferring values.

Mr. James Platt, the great English writer on finance, says:

"Money is nothing else than a form of credit, a thing, whatever its substance, which men by common consent have agreed to recognize as a symbol of wealth."

As money is a "symbol of wealth" it would seem that the more money, the greater our wealth, unless the increase of quantity decreases the quality or value, until it ceases to symbolize wealth. In this connection, some things are self-evident.

It is a fact that as there is not enough gold to perform all the functions of money or to transact the business of the country, we must have some money other

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than gold; that silver has intrinsic value and in that respect it is better than paper money. Therefore we must have some silver as a part of our "symbol of wealth," for use as change.

When we increase the forms of credit in our country, we enlarge our business possibilities, and we accomplish this by increasing the amount and uses of silver money. Silver is one of the conspicuous products of the United States, the output of our mines for 1893 being $77,000,000. Like gold, it is used in the arts and as money. Millions and millions of dollars of this metal is in daily use in gold countries as subsidiary coin. England is compelled to use over $100,000,000 of silver subsidiary coin to make change. Is it business wisdom for America to join England in making one of our products, whatever the character of that product, less valuable? And what adds to the folly of this act is, that we assume to do it in defence of American credit, and we commence by destroying the value of millions of dollars of American silver. Every thoughtful man knows that we could not sustain our domestic or foreign credit an hour if such credit was based upon the amount of gold in circulation. If the people holding United States currency should demand gold from the treasury of the United States, they could not obtain it, nor could any bank in the country which issues paper money redeem that paper in gold in any monetary crisis.

It is clear that gold is not omnipotent as money, and it is equally clear that there is not gold enough in the world to stand behind and sustain the world's credit or to transact the world's business. Nor is there gold enough in the United States to stand behind and sustain

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American credit. Gold and silver combined can come nearer accomplishing this purpose. If silver is used at all as money it should be given full credit to the extent of the amount required for circulation, and the largest possible amount should be put in circulation, because this would enlarge our credit. The name of gold is used for big transactions, but the fact is gold itself is not used. When great financial stress comes gold is of little value to the business world, because the business world cannot get it. It is then hidden away by those who wish to save something from the general wreck.

Hoarded money is non-earning money. The secret of business success is to have every dollar earning something and to have every man employed and at fair wages. Work is a source of wealth. We cannot have labor without laborers, but we can increase wealth without increasing the number of millionaires. This should be the chief purpose of our financial legislation.

The value of money depends largely upon what is done with it at home and not upon what it will bring abroad. Money which circulates most, whether gold or silver, is the best for the people using it. Money that every one wishes to keep is of little benefit is business, for, like jewels, it may be too valuable for use. All money must have something in it or behind it. The security standing behind money is in most cases the wealth of the nation issuing it. Take England. Its public debt is $3,277,888,000 payable in gold, and yet the whole amount of gold which England has is but $510,000,000. It is thus observed that it is not English gold which maintains English credit; it is her

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vast resources, her honor and her custom of paying what she owes.

Though gold is less bulky, it is no more convenient a form of money than silver, and it never has been in common use among the masses of the American people. Silver is so used because it is the money of small transactions. Infinitely more people use silver than gold, and therefore when we demonetize that metal more people will be injured than if we should demonetize gold. Small transactions multiply as our population increases, and it is these transactions which sustain the home markets, the business enterprises and the credit of the nation. It is the modest accumulations of the many and not the vast fortunes of the few which most benefit the country. Wall Street could not exist an hour but for the great Republic with its teeming wealth and its 65,000,000 of people which stand behind it. It is the fact that it is the clearing-house for the business enterprises of the nation which makes it powerful. In itself and of itself Wall Street creates nothing, has no power and no credit except such as the rest of the country gives to it.

If it were possible to have an international coin, with a fixed international value, it would doubtless be better for the people of the world. This at present is impossible, but when we have both gold and silver we have a metallic money which will fit every transaction and which will find its way into every man's pocket. The tendency then is to distribute wealth more uniformly among the people and thereby benefit the nation. Hence the first duty of this country would seem to be to build up its own industries by the wise use of its own money, then its credit abroad will care for itself.

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A country like the United States, which is so busy maintaining its foreign credit that it forgets to pay any attention to its home industries, cannot long maintain either its foreign or domestic credit. More of the American people have been out of employment the past two years than at any other period in thirty years. New systems of revenue and of finance have been introduced until we have but little revenue and even less knowledge of finance. We have been trying to legislate confidence into the country by driving money out of it. True some of the financiers of New York and of England declare that free coinage of silver will disrupt our financial system. When a financial system benefits only those who have money to loan it is the wrong system and should be disrupted. The present system is un-American and it should be done away with. It is also claimed that if we coin silver gold will leave the country. Is this true? Gold is, leaving the country now faster than the government can borrow it, and, as stated, it will continue to leave unless we have something else to send abroad to pay our debts. We should coin American money for American circulation, because all money is a commodity when it leaves the country which issues it. What is of most interest to us is the amount which the surplus products of our farms and our factories will sell for, not what our money will bring. We have but little money compared with the limitless extent of our productions. There has not been three months in the last two years during which the producing classes of America have not lost more money by the depreciation in the value of labor and the productions of labor than the full amount of all the gold in the country.

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Our corporate, municipal, state and national bonded indebtedness is more than twenty times the amount of our gold, most of which is payable in coin, and of all kinds of property we have about $66,000,000,000. It would be ridiculous to say that $500,000,000 of gold could sustain the value of all this vast property.

American gold people cannot disassociate the value of American gold and silver bullion in a foreign market from the value and uses of American gold and silver coin at home. They talk of gold money as though it was the only evidence of wealth. It is our farms, the products of our farms, our cities and towns, our rail-roads and factories, our mines of gold and silver, of coal and iron, the great extent of our territory and the thrift and push and energy of our people, which constitute our wealth and which are the source of our credit.

If the war of 1861 were repeated there is not a bank in the country which issues paper money redeemable in gold that could, on demand, pay out gold in twenty-four hours after the war began. When our credit is attacked gold does not sustain it. It is simply the old story that when everybody wants gold there is none; when nobody wants it there is plenty. There never can be too much metallic money. An abundance of gold and silver never caused an undue inflation in prices. Gold is needed, silver is needed, and property of every kind, and in vast amounts, is needed to sustain our business credit and maintain our enterprises. You cannot attack the value of one kind of property without materially affecting the value of all property.

Credit is born of confidence and confidence corner from seeing the product of the farm selling for good prices, from hearing the wheels of machinery in action,

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from knowing that commerce moves in its wonted channels, from feeling the financial pulsation which an increased output of our mines gives to the country.

It is a fact that the value and amount of silver money in circulation largely fixes the value of commodities and thus builds up business confidence. Look at the rise and fall of wheat and the rise and fall of silver bullion. They parallel each other. The fact is, the producers of raw material need more money to sustain their business than any other class of people, and in a country like ours the parity of the coin value of gold and silver must be maintained or the prices of products will not be sustained. No workingman ever refused a silver dollar in payment for his labor. Why should the Wall-street banker refuse to let that same dollar pass through the clearing-house when he knows that four-fifths of the American people gladly accept it as money?

American markets, American labor and American money must be sustained at home. We cannot have business prosperity when the products of the farm and the factory sell at a loss. We can no more rely for our success upon European theories of finance than upon European values of labor. This nation is a nation unto itself. Our form of government, the variety and amount of our productions, our vast territory, our isolation from the older and more populous civilizations of the world, and the marvel and mystery of our growth, show clearly that our civilization is a creation of our own, and not an imitation of others.

In the United States, the West and South are the producing portions. The majority of the people of these sections are in favor of the free coinage of silver because it will make more money, safe money and cheap

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money. The silver producers are interested in the free coinage of that metal, because it will increase the amount of and the demand for the productions of their mines and thus encourage their development, and enlarge their output. The debtor classes, those who owe money to the capitalists of the East, are interested in the free coinage of silver because they reason that gold and silver are the money metals of the Constitution; that when they borrowed the money they now owe, gold and silver were in general circulation in the United States, and that after the creation of these debts, any effort made by the creditor classes to demonetize silver, thereby decreasing the amount of money in circulation, is dishonest because it makes money dear and the debt greater.

The Sherman bill was a poor make-shift for free coinage, but it was better than nothing. It provided for the purchase in open market of $4,000,000 worth of silver monthly, and the issuance of a like amount of silver certificates as the representative of that metal. This act is now repealed, and the plain, undeniable result of all this financial legislation is, that the value of gold has increased and the value of commodities has uniformly decreased. Hence it takes more of the products of labor or of capital to pay any given amount of debt now than it did when silver was freely coined. Tinkering with financial questions is dangerous. The very uncertainty which it causes imperils business and injures credit. The remedies proposed are often worse than the disease, for stability is the chief object to be attained in monetary affairs. The fact that gold and silver are practically indestructible, gives to both these metals a monetary value in the business and financial

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world which the creditor classes cannot destroy, nor the debtor classes unduly inflate.

There is a financial war in progress between the creditor and the debtor classes, between those who have money to sell and those who have products to sell, between the producers and the consumers. The question is, shall we make money scarce and valuable and products cheap, or products valuable and money cheap? The gold people declare that the increase of the purchasing power of gold and the consequent lowering of the values of property do not injure the producer, because the same amount of money will buy a like amount of things now as before the exaltation of gold.

The argument is specious. There are $500,000,000 of gold in the United States and fully $66,000,000,000 of property. The most of the American people own some property; but there are not to exceed 10,000 of the American people who have any considerable amount of gold.

Two objections are urged against the free coinage of silver: one that it will drive gold out of the country; the other that it will create an undue inflation of prices. It has been shown that the United States is a debtor nation; and, as we have to pay to foreign peoples a large amount of money annually, the only way to keep that money at home is to maintain prosperity at home. It is axiomatic that a country is not prosperous, although its securities may sell at a premium, if its products sell at a loss. There is something radically wrong when national credit is good and private credit bad. The American people are not prosperous, and the best proof of the unfavorable condition of the business of the country is that the government is running in

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debt to meet its usual and ordinary expenses. Indeed it is borrowing money to send out of the country and coining no money which will stay at home.

It has been asserted that the free coinage of silver will make it necessary to protect our country against the undue importation of foreign silver bullion brought for coinage to the mints of the United States. This will not be the case because most of the foreign silver money now in existence passes as such at par in the countries coining it, and foreign silver bullion will not seek American coinage unless it at the same time seeks American investment, because while American coined silver, like American coined gold, is money here, it is only a commodity abroad, and will there sell as bullion. And suppose all the United States mints should coin silver only, they could not produce one dollar a year for each inhabitant. The country can stand that much inflation.

On the 31st of December, 1893, there were 175,441 miles of completed railroad in the United States. These roads were built at the nominal cost of $11,855,968,166 and their outstanding liabilities are $11,443,888,892. Of this vast amount $5,470,292,713 is bonded indebtedness, most of it due in twenty years. A large portion of this bonded indebtedness is held in Europe, the principal and interest payable in coin. It is thus inevitable that for this purpose alone, and for many years to come, there will be a large European demand for American gold. In view of these facts, a necessity for an increased coinage of silver seems apparent. The fact is, gold cannot be obtained to meet our ever-accumulating foreign indebtedness unless our exports of products are largely increased. A day of reckoning

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will come. Let a great war break out and note the result. Instead of one-sixth of all the railroads of the country being in the hands of receivers, as is the case now, five-sixths of them will be in that condition. This would destroy public and private credit. It would do more harm than to pay our debts in silver for a century. The business world cannot pay its debts in gold; and that country which adopts both metals as the basis of its monetary system will, in the long run, have more money, better money, and will do more business at home and a safer business abroad than under a single standard. If foreign wars or foreign trade take the gold out of the country, silver will remain; if silver goes, gold will remain.

If asked to suggest a remedy for present conditions, three present themselves. Neither one may fully meet expectations. They are:

1. The full and unlimited coinage of silver.

2. The free coinage of silver produced in the United States.

3. The equal coinage of both gold and silver.

No one man ever invented a perfect financial system; it can not be created alone by legislative enactment; it is a growth; it comes with the varied teachings of success and failure.

The position of the United States on the Western Continent and in the financial world, demands that it should have a distinctive financial policy. We cannot imitate the English principles of revenue and finance unless we do so at the expense of our own people. The United States produce gold and silver in large quantities. We produce more raw material than any other people, and if we protect our home markets and consume

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at home to the extent of our needs what we produce at home, our exports will exceed our imports and gold will not leave the country.

The principle of protection and the free coinage of silver are both necessary to the fullest and highest industrial development of America.

In conclusion, there is a selfish side to the money question. The people who have gold want to make it more valuable; the people who have silver want to make it more valuable. The gold people want to demonetize silver because it is cheap, and to do this they would drive out of the world's money circulation $4,000,000,000 of silver. But the great masses of the enterprising people, the producers of wealth, those who have their fortunes yet to make, want both money metals, because this will create more metallic and cheaper money and thus encourage and promote private enterprises.

Hitherto the American producers have been numbered among the voiceless millions, but they will be heard at the next presidential election. It is a happy omen for the future of American politics that new issues are being submitted to the people. As a result past dissensions will be forgotten, different sectional lines will be drawn as new principles are evolved, parties will divide on the money question, and that party which either evades the free coinage of silver or is opposed to the same, will fail.

In the United States, as elsewhere, money is power, and every year the rich are becoming more powerful. Those who have little are naturally jealous of those who have much. The responsibility resting upon the rich is becoming greater. Money cannot safely corner

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the industrial pursuits of a great nation. A free people may be deceived and misled for a time, but in the end they will do the right thing. While the influence of Wall Street is great, as a factor in American politics its very name is a source of weakness, and in the near future American finance will figure in American politics.

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Chapter XXII. — By James H. Eckels, Comptroller of the Currency.

It must be evident to any one who will examine into the present status of the agitation for the free coinage of silver that no argument can be adduced by those who are opposed to it which will in any wise affect public opinion in the distinctively silver-producing states. The business men of those states, not less than the leaders of political parties, make their demand with the end in view of securing a fixed and profitable market for that which they consider their most valuable product. The elements of harm to safe national financiering and right principles in currency legislation apparently do not enter into their view of the question, and therefore many of the propositions which they present are faulty in statement and wholly unstained by either the basic elements of sound finance or the historical facts of this and other countries. Fortunately for the public good the group of states thus directly interested in subjecting the American people to yielding tribute to them is small, both in numbers and population, as compared with the whole. The threats, therefore, of their political leaders, impartially made by both republican and democrat, or party secession ought not to have the effect of driving, for political reasons, the great body of the people into taking such action as must inevitably bring disaster upon all.

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Heretofore when called upon to deal with questions of a similar character the great mass of opinion has at the critical time always been found to be upon the right side. There is reason to believe that in the present instance no exception to the unvarying rule will be had.

This result will be attained quite as much through the manner of campaign of the advocates of free coinage alluded to as by the educational method pursued by those who combat them. The proponents of free coinage of silver may fairly be charged with having systematically withheld from those whose aid they have sought a full and true statement of the historical and other facts relative to this question, a knowledge of which is necessary in order to form a proper judgment of the merits of the controversy. This has been nowhere so manifest as in the manner in which the question of the treatment of silver as a money metal by this and other governments since 1873 has been presented by them. Wherever the figures have not been actually perverted the matter has been so slurred over as to create the impression that all gold-standard countries have in their abandonment of the further coinage of silver also abandoned the further use of that which they then had. The figures are at hand to demonstrate not only what little ground there is for this complaint but to show as well how very much silver is held by the particular countries of which the silver agitator now most bitterly complains. The great part of this total amount of legal tender silver coins was added during the period of what they term "silver discrimination and falling prices." This is almost entirely the case in this country. Prof. Lexis, who is regarded as a

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standard authority upon momentary statistics, has recently called attention to this very significant fact, and given figures which show Germany to have at present 400,000,000 marks in thalers besides 400,000,000 marks in fractional silver. France and the other states of the Latin Union have not less than 3,000,000,000 marks or $714,000,000 in silver 5-franc pieces. Spain coined from 1876 to 1892, 641,000,000 peseta pieces, while both the Netherlands and Austria-Hungary, notwithstanding their introduction of the gold standard, have kept all of their legal tender silver pieces. The annual coinage of silver in India up to June 26, 1893, was, at the ratio of 1 to 15, from $130,000,000 to $140,000,000, while in China and Japan the amount which could be used for monetary purposes is not limited.

More significant than all this, however, was the coinage at our own mints during the period from 1878 to January, 1895. The total coinage of silver in this country prior to 1873, under conditions now reverted to by the advocates of free coinage, was but $143,465,150.70, the greater part of which was in fractional coins. In the years since 1873, the years when most has been heard of silver not being accorded to its proper place in our money issues, there have been put forth by the government with full legal tender properties given them $588,444,468.45 either in silver coin or the representative thereof. This remarkable increase in our legal tender silver currency has been the constant subject of remark on the part of those who have witnessed unprejudiced the agitation carried on here for a larger coinage of silver and analyzed the reasons assigned for It. Nothing more philosophic nor more worthy of study on the part of our citizens relative to the same

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has been suggested than the following query of the author heretofore referred to:

"The question which I have repeatedly put to the defenders of the opinion that there has been an intrinsic appreciation of gold has never yet been answered. The question is this, and it has reference to the United States: How has it been possible that the United States, which from 1878 to 1893 issued more silver money or silver covered notes than all the European states taken together had issued in a like period previous to 1873 and more than it would have been called upon to coin under the system of universal international bimetallism, I ask how has it been possible that the United States, which produces annually $33,320,000 gold and coins in correspondingly large sums, and which moreover has maintained in circulation $346,000,000 of paper currency, with its defacto double standard and the superabundance of media exchange, has suffered from a perhaps still greater depression than that assumed to have been produced in Europe by gold monometallism, and that the prices of commodities of the United States, notwithstanding the Chinese-like isolation of its market by a protective tariff wall, have shown the same downward movement that we find in Europe? Is it not plain that the movement of prices which in two regions, with the condition of the standard so entirely different, but which manifest the same effects and the same course of things, must have other causes than the demonetization of silver, which did not begin in the United States until the repeal of the purchasing clause of the Sherman act, but which has left $567,000,000 in silver credit money in circulation at its full nominal value?"

A second criticism which may justly be passed upon the advocates of the free coinage of silver is their refusal to grant that the increase in this country of banking facilities during the years from 1873 have in any

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wise made unnecessary a further extravagant enlargement of our silver metallic currency.

It must be evident to the student of financial problems that the continued improvement in banking methods renders less necessary the employment of a large metallic currency. These banking refinements of ours, imperfect as they are, have played no insignificant part in the country's monetary history throughout the last two decades. The statistics of the national banks alone show their number to have increased from 1,968 with individual deposits of 1641,121,775 in 1873 to 3,711 with individual deposits of $1,690,961,299 on May 7, 1895. The increase has been correspondingly great in state, savings, private banks and trust companies. All this has added to the available capital of the people, reduced rates of interest everywhere, lessened their need of a further expansion of our money circulation and given to them a currency which is sufficient. Every dollar deposited in a bank is so much idle capital turned into a channel of usefulness and made to bear instead of the weight of a single transaction, as is the case with cash instead of check payments, the weight of many different transactions. In no other country, excepting possibly Scotland, is the deposit feature of banking so prominent as it is here. It is so much the principal thing in banking with us that the circulation feature is but an incident to it. It is almost unpracticed by the people of continental Europe, and hence the benefit of credit instruments which is available to us is wanting to them. They, from force of habit and methods of business, can justify a large volume of circulating media; we cannot. The number of depositors in the banks and kindred institutions

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in the United States, according to statistics carefully gathered, are 8,192,749, a power so great as to cause the leading banking magazine of Great Britain to say in its latest issue in commenting upon the fact:

"The tendency of deposits in banks working in progressive districts is to increase, and we may feel certain that this will be the case with the customers of the banks of the United States. The 9,000,000 depositors in banks form a force unparalleled in any other country. The inference we may draw from the figures before us is that, we must look for sharper competition on the other side of the Atlantic, and while with care and prudence we may hope to hold our own, it is only by the most careful employment of our resources that we may hope to retain our position."

The advocates of the free coinage of silver have continually protested that the end sought by them is the coinage of silver under the conditions which prevailed prior to 1873. A casual investigation even will prove that they do not desire any such thing. The idea in the enactment in every coinage law from the establishment of the government to 1873 was to have the coins be approximately of the same commercial value without the government's stamp affixed, as they would do with it. A very small fractional difference was to be made in favor of the coins simply to prevent their being too readily sent to the melting, pot. Whatever increased value the stamped coin had over the unstamped metal was the result of the convenience arising from its use in business transactions — It never was seriously suggested by any advocate of the free coinage of silver until the present agitation that the commercial value of the metal should be disregarded

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and an artificial value fixed by law. It is to be remembered that the ratio of 16 to 1 in 1895 is a very different thing from the ratio of 16 to 1 in 1873. The very fact that those who control this movement object to adopting as a part of their silver creed anything more from the coinage laws prior to 1873 than the mere figures of ratio is sufficient to prove that they are insincere in their demand for the enactment of a law similar to the earlier coinage acts. If not, they would accept the spirit and the reason of the law as readily as the bare ratio which they desire to take from it. The cause of their not so doing is to be found in the change in the relative value of the bullion value of a silver dollar then and now. In 1873 the average value of the bullion in the silver dollar was $1.004. The first quarter of 1895 it was $0.469. A careful calculation shows that pure silver was worth in 1876 only 89 per cent. of its value in 1872; in 1881 only 84 per cent.; in 1866 only 77 per cent.; in 1889 only 70 9 per cent., and in the first quarter of 1895 only 46 per cent. During the first five years it lost 11 per cent. of its value; during the first ten, 16 per cent.; during the first fifteen, 23 per cent., and during the twenty-three years since 1872, 54 per cent. It must be manifest that a metal so changeable in value is wholly unsuited for the purposes of being a standard of value.

Louis Wolowski, in his testimony before the French commission of inquiry into the principles and facts governing the monetary and fiduciary circulation of 1865, said:

"The instrument of exchange should always be a

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measure, and at the same time an equivalent; it should be constantly equal to itself (that is always have the same value); it should be susceptible of conservation without abration or loss, and circulate with facility; it should be divisible into fractions reunitable at will; it should be made of a substance not destined for destructive consumption, in order that the existent mass thereof may be only slightly affected by new additions thereto, for it cannot be too frequently repeated that the first and fundamental condition of the measure of value is its stability during the periods which embrace the habitual transactions among men."

The history of silver throughout these years when the production of it has so far exceeded that which was prior to 1873 only sufficient for the use and the waste of it demonstrates that it neither meets the requisites of a standard of value as given by Wolowski nor that demanded by Leon Say, who stated that the most essential quality of money is " that in the variations of its value, that is of the metal of which it is composed, there should be as few fluctuations as possible. These fluctuations will be smaller in proportion as the metal in question enters more extensively and regularly into trade, has a constant production and one proportionate to human wants, profits and efforts, a well-guaranteed manufacture, a conventional legal tender power in conformity with that recognized by public opinion, and is issued in the form of coin, scrupulously measured by strict necessity."

It has long been held that the best theoretical money would be of gold and silver coins stamped with no other mark excepting those indicating their weight and fineness, and no other value than their current commercial value. Such was the system in vogue at a

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time for commercial transactions were few in number and involving small amounts, but now that the number of them is almost beyond calculation, and the sum total of values affected by them correspondingly vast, the world demands as has been well said "a money system which requires of those who use it neither calculation nor even reflection." Metal moneys having in the first instance been based wholly upon commercial values the friends of the free coinage of silver in this country must, in order to prove their fairness and unwillingness to be party to the issuing of a dollar which does not have the value of a dollar, cease insisting upon the coinage of silver at any other ratio than its commercial ratio.

It is problematical whether or no silver can ever again be accepted as a money metal of other than a secondary class, even though all the great commercial nations of the world should join in an international agreement to maintain it on a footing with gold. It is absolutely certain that the United States is unable of itself to force its so being accepted. The position of the people of this country is that of a debtor and not a creditor nation. As long as we are compelled to borrow and to seek for investors in American enterprises among the moneyed people of England and the continent we are not in a position to maintain a defiant attitude on this silver question. It may be heroic to do, but it is none the less absurd. It will be time enough to undertake to reverse the facts of all financial history and monetary experience when we are free from debt and are lending to our European neighbors. Until that point is reached, however, we must recognize that this whole question must be dealt with from

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a practice and not from a sentimental standpoint, and we must deal with the facts as they are and not as we wish they might be.

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Chapter XXIII. — By Wm. P. St. John, President of the Mercantile National Bank of New York.

Under official dictation, tutored by the one most aggressive of all our handful of "goldites" in the United States, congress fiddles with bank notes while the burning issue is our primary money.

Identically tutored, our Chief Executive has required his Secretary to abandon the option conferred by law upon the United States and grant to holders of the United States notes the right to exact gold always; silver never, as their redeeming coin. Had the option to redeem in silver dollars been exercised boldly at the time when only 3,000,000 silver dollars were owned by the United States, with an ownership of $116,000,000 gold, any possible alarm could have been laughed to scorn. To attempt to seize upon and exercise the option now, or under immediately prospective conditions of our treasury, would be to court all the perils of disaster.

Identically tutored, the demand appears, "one step at a time," to substitute bank promises of money for $907,000,000 of the primary and secondary money which they promise. Were the scheme adopted and successful, the result achieved would be $907,000,000 of new bank promises, $207,000,000 of existing bank promises, and $1,700,000,000 of promises called deposits, an aggregate of $2,854,000,000 of national-bank

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liabilities payable on demand, resting or wrangling on our available supplies of gold. The pretense of the tuition is that this is "sound finance."

Redundant bank notes have invariably banished gold and silver. They never were suspected of enticing either into money. And national banks cannot hope for popular consent to their redeeming their circulating notes in officially discarded paper dollars.

Money is the creature of law. Money is all domestic. Our $10 gold piece is accounted 258 grains of nine-tenths fine gold when beyond the jurisdiction of the United States.

Money and the yardstick have nothing in common. The yardstick is an exact, unvarying measure of length. Money is an uncertain, variable measure of varying values. The yardstick is not bartered for commodities. Money is the means of acquisition and momentarily the measure of value of the thing acquired. The yardstick is a unit of length. The dollar as a "unit of value" is preposterous. Our Hamilton-Jefferson statute, founding the mint, provided a dollar as our "unit of account." That dollar of 1792 and the dollar of 1894 contain identically 371.25 grains of silver.

The aggregate of all money afloat and in bank in the United States is our true measure of normal value of commodities here. The aggregate of money of all nations trading internationally is the measure of normal value of all commodities consumed by all. Therefore, to enlarge the aggregate of money in the trading world is to raise normal prices of commodities everywhere. To enlarge the aggregate of money in the United States is to raise normal prices for home and internationally consumed commodities here. Per contra, to diminish

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the aggregate of money in the United States is to lower all normal prices here; and to diminish the world's aggregate of money is to lower all normal prices of internationally moving commodities in all the trading world.

Omniscience and infinite integrity in law-making, but nothing short of these, would yield perfection in money. Perfection in money, thus provided, would involve the use of neither gold nor silver, nor any other commodity.

Now, if my caution against it will be quoted along with my description of it, I will describe perfect money, to wit:

Any convenient substance of about the "intrinsic" properties of silk-ribbed paper prepared to defy the counterfeiter, issued by authority of the law of the United States, and promising no redemption whatever, except acceptance for all dues to the United States, and also made receivable and payable for all dues and debts, public and private, within the jurisdiction of the United States. But my caution against any attempt at such perfection in money of the United States is that imperfect humanity has not been more safe to handle any near approach to it, nor with any other than commodity money, than children are to toy with keen-edged tools.

If United States notes of 1862 and treasury notes of 1890, together $497,000,000 were retired, they might all be replaced with logically perfect money as described, provided silver dollars and certificates and bank notes were also all retired. The success of the issue would insure over issue, and then collapse.

Bank notes differ only in degree from treasury notes, for this same peril is lurking in them. The wary can escape

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a degree of peril in the bank note, refusing it as not a legal tender. But the peril is in the bank note, nevertheless, as Jefferson and Andrew Jackson knew. Nature's restrictions upon the world's supplies of gold and silver, and the burden of the art and industrial uses for these commodities, make these safer than irredeemable paper as our tool of trade.

Gold bullion and United States gold coin enter Europe with one and the same right conferred by law, the right of transition into English money at the price of Ł3 17s. 10 1/2d. per Troy ounce, eleven-twelfths and 1 penny-weight fine. By law, France, Germany, and the other important continental states similarly endow gold. And, by virtue of our law, gold carries the right of transition into the money of the United States at the fixed price of 23.22 grains pure, or 25.8 grains nine-tenths fine, for a dollar.

Thus, by law, the market price and mint price of gold are one and the same, so long as there is gold produced each year more than the arts and industries and India absorb. For so long, gold in the lump, its weight and fineness being known, is the equivalent of coin in Europe and the United States, for the reason that the possessors of gold will accept no lower price while the mint price is offered in lawful money at the mint; and artisans will not pay more for gold because it is obtainable at the mint price by, melting the coin.

Imagine all these mints of Europe and the United States to deprive gold of all further right of transition into money. Imagine the law of each of all these nations to grant to silver exclusively the right of transition into the money of each, at one price, equivalent to 371.25 grains pure (412.5 grains nine-tenths fine) for a

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dollar. Thenceforth the "price of silver" in Europe and the United States would be this one mint price. Silver in the lump then, as gold now, its weight and fineness being known, would be the equivalent of coin. Possessors of silver then would not accept less than this one mint price for it, for the reason that lawful money could be had for it, at this price, at the mint; and the artisan would pay no more for silver because he could obtain it at this mint price by melting silver coin.

But, with the support of mints withdrawn from gold and provided there is, as some economists aver, a yearly production of gold, neighboring $25,000,000 more than the arts, industries, and India absorb, the market price of gold would fall rapidly until the price attained would permit the lower arts, in utensils and the like, to absorb the surplus gold. Exactly this result is evident in the world's withdrawal of mint support from silver, but much less rapidly attained.

Next, imagine all these mints of Europe and the United States to grant alike to gold and silver the right of transition into their money at the will of the possessor, at one price for gold, equivalent to 23.22 grains for a dollar; and at one price for silver, equivalent to 371.25 grains for a dollar, all the coins resulting to be unlimited legal tender within the territory of the nation coining them. If gold is produced each year more than the arts, industries, and India absorb, the one only use for the surplus is employment as money. If there were silver produced each year other than is likewise absorbed, and no one doubts it, the only use for such surplus silver would be employment as money. Hence, for so long as there continued to be any surplus of gold

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and any surplus of silver over the said art absorption of each, and provided the surplus of neither metal were sufficient alone for the world's entire need of money, for so long the mint price and market price would be one for gold, and the mint price and market price would be one for silver. Which would mean that the one mint price for gold and the one mint price for silver would be the universal market price for each; and would mean universal parity of the gold and silver coins at the ratio established by these mints.

This is bimetallism by a concert of laws. It does not seem, akin to the attempts which our "goldites" would thrust upon us; as, for instance, the setting up of a universal price for each of all commodities, or for any one of them so abundant everywhere as iron.

Among other "silver lunatics" sanctioning the confidence that bimetallism thus attempted could not fail, are the learned professors of political economy in the colleges of London, Oxford, Cambridge, and Edinburg, and the late De Laveleye with others of the profession on the continent, and a host of men of other callings eminent throughout Europe and in the United States.

The aforesaid self-same tutor, to the contrary not withstanding, the abandonment of silver and substitution of gold alone as the primary money of unlimited coinage is not the "natural selection of commerce," but the ignorant or vicious achievement of statecraft.

The subjects of England were deprived of their right to convert silver into money — temporarily first in 1798 and finally in 1816 — under conditions of little public concern, for the reason that irredeemable bank notes were England's full substitute for money. Precisely similarly the people of the United States

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were deprived of their right to convert silver into money, a right enjoyed for eighty years, while irredeemable paper of sundry kinds and excessive volume supplanted gold and silver money in the United States.

[Extract of note of Sir David Barbour (British finance secretary to India) October 20, 1887.]

"In no portion of Lord Liverpool's ‘Treatise on the coins of the realm’ is there any allusion to: (1) The treasury order of 25th October, 1697, directing that guineas should be taken at 22s. each; (2) the council order of 8th September, 1698, referring the question of the high rate of the guinea to the council of trade; (3) the report of the council of trade, dated 22d September, 1698; (4) the resolution of the House of Commons on that report; (5) the orders of the treasury to receive the guineas on public account at 21s. 6d. each, ‘and not otherwise.’

"With the publication of these documents falls Lord Liverpool's statement that the English people, by general consent and without any interposition of public authority, attached a higher value to the guinea after the great recoinage than the market value would justify; and with the fall of the alleged fact must disappear the conclusion drawn from it, namely, that with the increase of wealth and commerce the English people in 1698 had come to prefer gold to silver. And with the disappearance of this hypothesis there disappears the only evidence brought forward in support of the theory regarding the progress of wealthy countries from silver to gold, which Lord Liverpool invented in order to overthrow Locke's opinion that ‘gold is not the money of the world, or measure of commerce, nor fit to be so.’

"Lord Liverpool's theory may, of course, be sound, though the facts on which he relied in 1805 were imaginary; on the other hand, it may fairly be said that it was the acceptance of the theory on the authority

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of Lord Liverpool which brought about in the nine-teenth century that state of affairs which is now held to prove the soundness of the theory. * * *

"How Lord Liverpool, or those who acted under his orders, came to overlook the existence of the documents which I have quoted, and which at that time would have destroyed the basis of his argument, is unaccountable."

But if any attempt of ours to achieve bimetallism independently is to yield silver as our only money, my conviction is the conviction of Robert Morris, namely, that silver is preferable to gold if either is to be the only current money of the United States. The present Secretary of the Treasury of the United States and his associates of the President's Cabinet have lately shared a well-advertised effort to heap posthumous honors on Robert Morris.

The repeal of our "Sherman Act," November 1, 1893, following the closing of India's mints in June against the further coining of silver on private account, severed the last link that coupled silver to its crippled right of transition into the money of the Western world. Hence, just thirteen months ago, for the first time in history, the commercial world began a free concert of absolutely blind experiment in money.

The latest estimates of Soetbeer, in his almost posthumous publication of 1892, accorded little, if any, new gold from the mines each year to the world's increase of money. Now observe that while the population of the United States enlarges at a rate equivalent to adding the population of Mexico to ours within seven years, or of adding the population of Canada and all other British possessions in North America within three

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years. This is absolutely blind experiment which the United States shares demands that whoever would increase the world's aggregate of money by the equivalent of $1,000 must provide 4.03 pounds Troy of gold.

Within the last half of the brief period succeeding 1873, 10 cents a pound was a sentimental price for cotton and "dollar wheat" was a sentimental term. Recently, 5 cents a pound in towns and 4 1/2 cents on the plantation, 50 cents a pound and "hog feed" on the farm were prices current. The dollar of the United States, half an inch in width and a thirty-second thick, is thus become $2 with which to buy the sweat and toil and anxieties of a season, at the very head and font of prosperity in the United States. While thus the dollar of the United States is worth 2 bushels of wheat or 20 pounds of cotton, it gauges the prosperity of the United States at 1 1/2 cents a year, if invested for the period of sixty days in strictly prime commercial paper of New York.

The flood of our prosperity cannot rise higher than its source. The font is where the nourished earth yields her own increase and for toil returns a hundredfold. It follows that the conditions contemplated must alter presently, or the want of a traveling public and the lack of sufficiently liberal movements of freight, at profitable rates, will shrink the earnings of certain of our main trunk lines of railway into a deficiency of any dividends and, latter, into default of interest on their bonds. Unless relief of law ensues without delay, choice parcels of real estate in New York City will manifest declines in prices, exceeding 20 per cent., between sales in January, 1893, and December, 1896.

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I am well aware that moderate demand upon liberal supplies of commodities produced at low cost and distributed cheaply will yield low prices. On these terms low prices stimulate moderate demand into a liberal demand upon the same supplies, and so tend to recover prices. On this basis low prices of our staple necessities are desirable. In such variations of demand relative to such supplies, the producer may gather amid the fluctuation of prices, his fair share of the advantages conferred on all by his abundance.

But, for the reason that the producer does not share, the general advantage of the abundance of his supplies, the United States at large is sufferer. Relief must be provided, and for that achievement we propose that, at all hazards, the United States shall abandon experiment.

We ask the congress now sitting to restore our Hamilton-Jefferson coinage system, founded with the mint, maintained for eighty years without complaint, and overthrown unobservedly at a time when neither gold nor silver was our current money.

On December 6, I submitted to the Chamber of Commerce a developed plan to restore, or attempt, bimetallism independently, the plan providing the modern convenience of paper substitutes for coin and providing ample means to stifle any possible money panic arising with the enactment. No moment could be more propitious than the present for any such attempt. Idle accumulations of money in our important money centers, like the present, are rare.

Our "goldites" antagonize every such proposal with two objections, to wit:

(1) That such legislation is superfluous because "if

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there is not gold enough for all, there is gold enough for us. * * * We can command gold in competition with all the nations. * * * The United States is the largest and best source of supply of the commodities that the world most needs — cotton, wheat, provisions, petroleum, and the like."

(2) That to reopen our mints to silver without limit while offering coinage to gold without limit will merely substitute silver monometallism for gold monometallism in the United States. They mean that the proposed enactment will yield silver dollars and paper redeemable in silver dollars as our only money, and for the reason that it will banish gold money and expel it from the United States.

We adopt, for argument's sake, both of their predictions as the assurance of our safety in making the attempt.

Our ability to command gold in competition with nations striving for the meager supply of gold available to money would depend upon the further sacrifice of our producers of petroleum, provisions, wheat, cotton, and the like. Lower and lower prices for these elementary essentials of our prosperity must pursue a foreign market and every drain of Europe's gold to us as our return for them would further lower Europe's prices for all commodities, including any more of these she buys.

By our proposal, on the contrary, the United States provides itself the convenient ability to part with gold composedly. Instead of our present restriction to gold alone as our tremulous necessity, we propose to be able to loan our gold to Europe for our own sakes, selfishly. If, as our Mint Director estimates, we have $600,000,000

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of gold and $20,000,000 annually produced in excess of our needs in the arts and industries, to spare a liberal portion to Europe, having a convenient abundance of domestic money at home, is to loan Europe the vehicle with which to carry our prosperity. To increase thereby Europe's aggregate of money is to raise normal prices of all commodities in Europe, including those for which the United States is Europe's best source of supply. Therefore, diametrically the opposite in achievement to what our "goldites" urge, we would enlarge Europe's demand for our surplus petroleum, provisions, cotton, and wheat, and upon a higher plane of prices for them as she buys.

Imagine, as the immediate achievement of our proposed enactment silver dollars and paper redeemable in silver dollars to be the only money of the United States. The tendency first evident will be its restriction of our importations of European products. This is evident under India's silver monometallism in her relation to the outside world. But a home experience may be recalled:

During the period of plethoric State bank notes in the United States, when a New York merchant had sold to western and southern merchants and bills were due, his collector obtaining local bank notes in a western city would invest in grain or flour, in a southern city would invest in cotton. Shipping the flour and cotton to New York, the sales would realize New York bank notes. The operation was thus equivalent to shipping New York bank notes from the western or southern cities to New York. The like operation between the United States and Europe for our international trade settlements would take the place of gold

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shipments, if gold were hoarded for a high premium, as feared. Each such operation would swell the volume of our exports of commodities and benefit, primarily, those for whom we must be most concerned, our producers.

But the likelihood of any need of such an operation as a part of the contemplation of the New York merchant in selling to the west and south tended to make him undisposed to sell there. To such extent the southern and western importations from New York were lessened. To the like extent our foreign importations will be lessened under our silver money regime, to the advantage of our home manufacturers as against the foreign manufacturers all the time. But in our experience, when the New York merchant or manufacturer found his home market not broad enough for all his wares, as was frequently the case, his surplus was sold west and south at as low price and sometimes even lower prices than to customers at home. The home market price, being for the greater portion of their merchandise was maintained, at a sacrifice of profit on the moderate surplus sold elsewhere. Similarly Manchester, Lyons, and German manufacturers would experience the restriction of our silver money upon them. Our importations of Europe's products are to some extent a surplus which she must sell. To that extent our importations of foreign products will continue to foreign disadvantage and our gain.

But, because we are Europe's "best source of supply" for our great surplus of staple commodities, Europe will buy of us, even though we do not buy of her. As, for instance, we buy from Cuba $75,000,000 worth of goods a year and sell to Cuba $12,000,000 to $25,000,000 only;

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or as Brazil finds a market here for $70,000,000 of her commodities and buys $40,000,000 only of our commodities in return; and finally as England, on the contrary, is debtor to the United States for an excess of $100,000,000 a year by average in our mutual barter of commodities with her.

Therefore, with our silver money restriction upon importations setting all our spindles turning, employing operatives at full time and these operatives made thereby to enlarge our aggregate of home consumers of all home products; with our trade settlements in merchandise serving to enlarge the exportations of our spare products; with Europe's prices for our products enhanced by our enlargement of Europe's aggregate of money, our achievement next evident will be a credit balance of trade established in Europe for the merchants of the United States. At that point exchange on London would sell in Wall Street at a discount. This means a drift on gold payable seven days from date offered at a discount in standard silver dollars — the despised, stigmatized 50-cent silver piece in Wall Street, held at a premium over gold in London. It means our silver dollars and our gold coin at par — bimetallism a reality in the United States. Our prosperity as her example, and to such a degree at her expense, is likely to enforce the influence of Manchester's opinion of English monometallism, the result of which may mean the abandonment of her vicious monetary system by England.

Europe's only silver is her money. Europe's silver coin is valued from 3.06 cents to over 13.33 cents per dollar more than ours. Her "silver pots and spoons" Garry the additional price of labor in them. She will

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ship us gold, therefore, rather than silver, at a minimum preference of 3 per cent.

Our "goldites" would dismiss all this on the ground of an over-abundance of silver. Had the most influential doctrinaire in money in Europe been as influential with lawmakers in 1853 as our aforesaid tutor was influential with law dictators in 1893 France would have closed her mints to gold. Silver monometallism would have been the coinage system of the world. Chevalier threatened France with an abundance of gold as cheap and overwhelming as iron. Silver is the over-abundant prediction of our influential doctrinaires. Note, however, that $5,000,000 worth of silver bullion is at this moment an overestimate for the world's distributing markets' supplies of silver.

Finally, our "goldites," and in particular our tutor aforesaid, distort history for proof that bimetallism is a failure; and that independent bimetallism in the United States during eighty years furnished the experience for the certainty of failure if attempted now. The facts, justly handled, refute both assertions flatly.

The world's great mints were never open to gold and silver without limit on a single price among them for each metal. In consequence every seeming divergence between a market price and a mint price for either metal was invariably a difference between mint prices. Divergence between one mint price and another, or other mint prices, has to answer in history for every annoying flight of gold or of silver internationally. By undervaluing gold relative to silver, compared with the French mint's valuation of gold relative to silver, our coinage act of 1792 caused our merchants to choose gold preferably to silver for their foreign settlements, following

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1792. By undervaluing silver relative to gold, compared with the French mint's relative valuation of the two, in our coinage act of 1834 we made our merchants choose silver preferably to gold for foreign settlements thereafter. This divergence between mint prices — not divergence between our mint price and any market price — cost us gold in one period and cost us silver in the other, for the reason only that during most of both periods we were usually the debtors in balancing our foreign trade.

Our "goldite" assertion that our said act of 1792 effectually demonetized gold by expelling it from the country, and that our act of 1834 effectually demonetized silver by expelling it, are alike refuted by indisputable records, not made for argument, but reporting facts. Thus for the twelve years ending 1805 our gold coinage exceeded our silver coinage. In the eighteen years following our gold coinage was half our silver coinage. In the nine years ending 1833 our gold coinage was one-fourth our silver coinage. And in this same period of "banished gold" (?) our trade movements of both metals were usually in one direction, usually export in excess of import of both until ending 1823. In 1824 the net movement of the two was import in excess of export; 1825 refutes this gold-banishing theory flatly by a net import of gold and a net export of silver. In the five years following, both metals moved together again, import in excess of export. In 1831 our "goldites" are again refuted flatly by the net import of gold with a net export of silver. Thereafter gold and silver both show import in excess of export until 1834.

And in the period following 1834, while "banished

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silver" (?) is the assumption of our "goldites," our silver coinage in the first eight years equaled our silver coinage of the eight years prior. Our silver coinage in these first eight years exceeded by $3,000,000 our coinage of gold. In the second eight years ending 1850 we coined $18,000,000 of silver, although we were not producing silver, but were producing gold in amounts more vast than the world had known. And in the first four years of this "silver banished" (?) period our imports of silver exceeded our exports of silver by $6,000,000 more than our imports exceeded our exports of gold. For the three years ending 1842 the net movement of both metals was together, export in excess of import. And nine years after this act of 1834 our net movement was import in excess of export for gold and silver both. Our "goldites" are refuted notably and finally in the fact that prior to our civil war no really important movement of the one metal inward and the other metal outward is the record of any year.

And note also in this connection and at this particular moment, besides the considerable sum in coins of foreign nations, circulating as our legal tender until 1857, and besides the unlimited legal tender functions of half dollars, quarters, and dimes until 1853, and besides the fact that 80 per cent. of all the silver dollars coined were coined after 1834, this fact, namely, that redundant bank notes which increased by more than $200,000,000 in a period of ten years, were tending all the time to house both gold and silver in quiet bank reserves.

Finally, I regret profoundly that space forbids the details of independent bimetallism in France and the record of her mint dictation of the world's market price for gold and silver during a period of seventy years.

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On the closing of her mints against silver in 1874 France had $900,000,000 of gold and $700,000,000 of silver circulating side by side as money. Her population barely exceeded 35,000,000. Our present population exceeds 65,000,000, with a promise of exceeding the aggregate population of Great Britain and France within ten years; and our use for gold and silver is for a circulation over a territory seventeen times the area of France.

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Chapter XXIV. — A System of Currency — By E. S. Lacey, Ex-U.S. Comptroller.

The prosperity of the people of this country can never rest upon a solid foundation until the questions relating to coinage and currency are settled permanently and settled correctly. Money is the life-blood of the commercial body, and the latter cannot enjoy sound health unless the former meets all just requirements as to quantity, quality and activity.

Primary money constitutes the standard and measure of value, and must consist of gold, or silver, or gold and silver combined. Our present standard is gold. Considered in the light of either history or science, it seems quite impossible, under present conditions, for the United States to undertake the free and unlimited coinage of full legal tender silver without its resulting in the expulsion of gold, and the adoption of silver as the sole standard and measure of value. The condition of the countries now using the silver standard is not one of prosperity. Mexico, the states of South and Central America, and the nations of Asia are the countries now in this category. The unhappy condition of the producers in these countries, and the low state of civilization prevailing, form parts of a picture which cannot be inviting to the citizens of the United States. All the great commercial nations of Europe long ago adopted the gold standard. While

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depression has characterized the business activities of all countries during the past two years, it is apparent that the condition of the people in the silver standard countries is by far the most deplorable. It seems demonstrable that our condition under a silver standard would be far from satisfactory, but the period of transition from gold to silver as standard money would undoubtedly be the most disastrous known to any people.

It is of great importance that the battle of the standards now in progress should be waged until a decisive victory shall establish the right, for uncertainty is fatal to every interest; but whatever may be the decision as to primary money, it is clear that radical reform as to our credit money is an absolute necessity. It is imperative that we immediately proceed to supply the people with credit money as a medium of exchange amply secured, promptly redeemable in coin, and automatically conforming in volume to the necessities of business. To this end, the following propositions are submitted:

1st. All gold coins and notes (except silver certificates) of a lower denomination than ten dollars to be retired and reissued in notes of ten dollars and multiples thereof.

2d. All silver certificates of a higher denomination than five dollars to be retired, and reissued in denominations of one, two and five dollars.

3d. The United States legal tender notes and the treasury notes of 1890 to be funded into U. S. 3 percent. 50 year bonds, the government reserving the right to call and pay, at the end of any fiscal year, bonds equal in amount to the surplus revenue for that period, the bonds so paid to be selected by lot.

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4th. National banks to issue notes to the par of United States bonds deposited to secure circulation, and pay an annual tax of one-fourth of one per cent, upon said notes.

5th. A redemption fund equal to 10 per cent. of said note issues, to be maintained by said banks in the United States Treasury for the purpose of redeeming said notes at the office of every assistant treasurer of the United States.

6th. One-third of that part of the lawful money required to be held by national banks in their own vaults may consist of the notes of other national banks.

The first two propositions submitted are designed to prevent the payment of custom duties in silver certificates or anything besides gold. If the government is to meet its obligations in gold, all taxes and duties should be paid in gold or its equivalent. In order to accomplish this, we must use silver and silver certificates as domestic money. That is the use to which silver is perfectly adapted, and it is important that this sphere of activity be reserved therefore. There is in circulation in the United States in gold coins, and in paper notes below the denomination of ten dollars, between three and four hundred millions of dollars. If these were retired, and silver certificates were issued only in denominations of one, two and five dollars, silver and silver certificates which have heretofore caused us so much uneasiness would be absorbed in the daily transactions of life; they would be found in the pockets of the people, in the till of the tradesman, and not in the banks and custom houses of the country. And so the first two propositions look to the utilizing of silver, within its proper sphere.

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The third proposition is to fund the legal tender notes, and the notes of 1890, into long 3 per cent. bonds, for the purpose of getting the government out of the business of issuing circulating notes, so that the legal tender notes and the notes of 1890 cannot be utilized for the purpose of exhausting the treasury of its gold supply. We have seen this process repeated time and again, forcing the government to issue bonds in order to provide a fund from which to redeem this endless chain of legal tender notes.

The fourth proposition is to allow national banks to issue notes to the par of United States bonds deposited to secure circulation. This makes the issue of notes perfectly secure, and there is no sound argument against it.

Proposition No. 5 provides for increasing the bank note redemption fund to ten per cent., and that bank notes shall be redeemed at the office of every assistant treasurer in the United States. Under the existing system, the notes issued by a national bank are seldom or never presented at its counter for redemption, and so far as the redemption at Washington is concerned, at least four-fifths of the notes redeemed are unfit for circulation, so that it really amounts to nothing more than the retirement of worn-out notes. This plan is wholly inadequate. Redemption should proceed from day to day precisely as does the redemption of drafts and checks. There should be an active, every-day redemption of these notes in every prominent city, in order that the volume may increase or diminish so as to conform to the necessities of the business of the country. It would be a hardship for national banks to maintain a fund in every reserve city in the United

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States for the purpose of redeeming their notes. If we increase the deposit of the banks with the United States government to 10 per cent., or, if necessary, to 15 per cent. of their circulation, and provide for the redemption of their notes at every United States Assistant Treasurer's office, our system would correspond in some degree with the redemption of the notes of the Canadian banks. The last named institutions maintain branches in the leading cities of the Dominion, and their notes are daily redeemed at all these points.

Such a system of redemption would produce the elasticity absolutely essential in credit money. It is impossible to have a greater or less volume of checks and drafts than business requires, and under proper methods of redemption, this would be equally true of bank notes.

The last proposition, that one-third of that part of the lawful reserve required to be held in the vaults of the banks may consist of the notes of other banks, grows out of the necessities of the case. If we fund all the legal tender notes and the notes of 1890, nothing would be available for the reserve of national banks except gold, silver and silver certificates. Hence, as silver would be employed as domestic money, there might be a deficiency in the money available for bank reserves. I can see no serious objection to counting, as a part of the reserve (to the extent of one-third at least), the notes of solvent banks, secured as those notes will be in the plan proposed. This will not interfere with the proper redemption of bank notes, because when the stock of gold and bank notes at a given point is so small that it is only sufficient to supply the

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bank reserve, there will be no need of reducing the volume of the currency by redemption. When the stock is in excess of this amount then, of course, the redemption will proceed as usual, and the necessary contraction will result.

In my opinion, this plan would give us a sound currency, well secured, redeemable in coin at all the principal cities, and so elastic as to conform to the necessities of trade. Unless we can provide a paper currency possessing all these qualities, a proper solution of the questions relating to the coinage of gold and silver will not bring us the needed relief, and embarrassment and depression, panic and disaster, will periodically afflict us.

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Chapter XXV. — Silver and the Banks — By Lyman J. Gage, President of the First National Bank, Chicago.

The silver question has been long under debate. The issues involved have been affirmed, denied, and declared to be unworthy of debate. Events now indicate that these issues, whether good, bad, or indifferent, must soon be met and forever settled.

My objections to silver do not lie in the fact that the silver standard is peculiarly inimical to the interests of banks. On the contrary, I affirm that aside from the benefit conferred on silver mining interests, bankers and money brokers are the only classes likely to reap advantage there from.

How can this be? The answer is not remote. It is now generally admitted that what is called a double standard is not a practical and enduring possibility. With gold and silver both current, one must be superior and the other subordinate. At this hour such is the fact with us. Gold is the recognized money of accounts, and silver circulates in a reduced volume by the sufferance of the commercial community, but in a purely incidental and subordinate relation. The continued infiltration of silver coin and silver certificates into the channels of circulation, supported and enforced by the treasury department, threatens to soon reverse the present relation of the two metals in our financial system. When that shall be accomplished, silver will

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be the money of account, and our gold coin, possessed, as it is, of a higher commercial value abroad, will either be hoarded at home or seek its higher exchangeability in other countries.

I have said the banking class would find advantages in this shifting of standards. It will occur in two ways — first, through the profit arising from exchanging with the public the then absolute money, gold, for the new medium, silver; and second, with silver payments made respectable, the banker will find as good protection as he now enjoys against dangerous runs, with much lower average reserves, and the difference he can lend at a profit.

The bulky character of silver, also, will render the banker's service to the public the more indispensable. It is true that the purchasing power of his capital, when counted in silver, will be much reduced; but as he is never a buyer — always a lender — this will not consciously affect him, or, if it does, the conversion of his present gold reserves, with their accompanying premium, into the lower silver standard, will nearly or quite make good such loss.

Why, then, do I oppose a movement which promises these benefits? We oppose it, notwithstanding these temporary and unworthy advantages, because, taught by the nature of our relations to reason on these things, we perceive, or honestly think we perceive, that the adoption of silver as the money of account will be detrimental to our commercial and industrial interests, and in the prosperity of these the nation's highest welfare is closely bound.

How will our industrial and commercial interests be adversely affected? We are a commercial people.

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The extension of our trade and commerce over all seas and with all people is recognized as a most desirable object. At present the extent of this trade and commerce is limited. Older nations have naturally been in advance of us in the world's markets, and we are met by this embarrassment.

Another fact exists. It will not be disputed that for all our commercial transactions with other people, settlement must be made in the London money market. If we buy sugar in Cuba, we pay for it in London. If we sell goods in Brazil, we accept English funds therefor, payable in London. So that, whether we buy or sell in the course of our foreign trade, London is the settling house for all this trade. At the present time our financial system rests upon, and our commercial values are measured by, the same metallic standard, namely, gold coin. Our gold coin shipped to the British mint may be coined into sovereigns at a nominal expense, and English sovereigns shipped to us may be transmuted into our gold coins at no material cost. Thus in the competitive struggle for a place in foreign markets we enjoy a great advantage in using the same metallic money standard.

The rise and fall of gold, or the rise and fall of commodities in their relation to gold, affect us in our great competition in an exactly similar manner. We enter the commercial contest with weapons equally matched. It is now proposed voluntarily to surrender this important position. With silver money of the present weight and fineness the recognized and established money account in our domestic affairs, we shall have our industrial exchanges carried on under a money standard many points removed from the settling house

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standard. Our domestic values will rise and fall in relation to an entirely different standard. Can anyone measure the deranging influence of this fact upon our foreign trade? But this indirect and ambiguous adverse influence is not all. In every settlement abroad, we shall be at the disadvantage of converting our domestic money of account, silver, into the English money of account, gold. And that this will always be at a charge to us is plain, if we reflect a moment. Thus, if in settling balances abroad specie shipments are required, we must send either gold or silver. If we shall send silver, it will be converted at our cost in the English market into their money of account, gold. If, then, we ship silver, it will disturb the previous equilibrium of the market there and reduce the price. If we shall send gold, its purchase in our own market will disturb the previous equilibrium of our market and advance its price, and contrariwise, if in the settlement of balances we receive money from abroad, it will be in a like measure against us.

If we buy silver in the English market, it must enhance its purchase price. If we bring gold, it will find a falling market here. Whether we pay or receive, therefore, there will always be an unknown percentage against us. Not only will this be so when actual balances are thus bodily transferred, but also in the ordinary course of settlement through the medium of the bills of exchange, which to a large extent meet and cancel each other. The influences just described will be taken into account by the exchange dealers, and a larger margin of profit than is now required will of necessity be exacted We all "know that trade turns upon small percentages, and the larger the transaction

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the more influential is a fractional per cent. It follows, then, that with silver the established money of account at home, our foreign trade will be prejudiced and restricted. It follows, also, that those who furnish products to go abroad must furnish them at a price somewhat less, and those who consume products brought from abroad, must pay somewhat more, to make good the increased margin for cost and risk in converting the unrelated standards of the two countries. It will give an increased profit to dealers in foreign exchange. It will force the importer to add an extra per cent, to his selling price. It will make the exporter deduct a percentage from his purchasing price. Who will suffer therefrom? The industrial classes who produce and consume the exchangeable products. Why should this wrong be perpetrated? Will it protect and advance our silver interests? If so, it will be a benefit to a class aggregating in number about one hundred thousand. Will it adversely affect the interests of our agricultural and other industrial classes? If so, and it is this I affirm, it will prejudice the welfare of the whole people, for in these two classes our entire population is substantially included.

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Chapter XXVI. — By Senator W. A. Peffer.

Why unlimited Silver coinage should be restored at the ratio fixed by Congress in 1837 — Sixteen to one of Gold.

The "money question" covers a much wider field than is presented in current discussions of the subject; and the "silver question" involves much more than is commonly considered in the ordinary debates of the day.

Silver coinage is desirable or necessary, if at all, only because we use gold for money coins and there is not gold enough in the country or the world to supply the reasonable demands of the people for lawful tender money in their daily business.

In order that we may proceed understandingly, let us first consider

What is Money?

Without dwelling on a discussion of definitions, it may be said, in a general way, that money is any device used by common consent among men with which to affect their cash exchanges and to pay their debts and taxes.

Money is necessary only because individual men and women produce more of some kinds of property and not as much of some other kinds as they need for their

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own use, and they desire to exchange their surplus for what they require of the surplus of other producers. It often happens that the producer and the consumer of an article are far apart, and it is therefore impracticable for them to make an exchange of the particular articles. This is the case with respect to the Kansas farmer who raises wheat, and the planter of Brazil, who raises coffee; with the manufacturer of Chicago who produces steel rails, and the farmer of China who produces tea. Instances almost without number might be cited to illustrate the proposition. It is mirrored daily on the dinner table of any citizen. Note the things resting there — the viands of many kinds — where were they produced? The vegetables and fruits represent regions far apart; the potatoes from Colorado, celery from Michigan, cranberries from Wisconsin, and strawberries from Florida, Bread made from California wheat, rice grown in South Carolina, beef produced in Wyoming, and mutton in Ohio. The porcelain and glassware and the cutlery — where were they manufactured? Some in the United States some in France, some in Austria.

These things are surplus productions of persons living and working long distances from one another. One produces enough for a thousand in some instances, and he in turn is one of many that consume what some other person made or raised many miles away.

Most of us are producers, all of us are consumers; and what we consume, besides what we ourselves have produced, is part of the surplus that other persons have produced.

It is this surplus of production that the producers sell and that consumers buy.

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And because the two factors — producer and consumer — live and work far apart, it is a great convenience to have home traders and merchants to collect the surplus from those who produced it and distribute it among those who wish to consume it. A very large number of the people are engaged in this work of collection and distribution — as exporters, importers, carriers, commission men, brokers, bankers, merchants, salesmen, etc. This is commerce. It would however, be an impossible thing for men to carry on the traffic of the world if they had no means of representing the value of property dealt in, and some means of transporting the values as well as for moving commodities. Such means is found in what we call money, and in certain forms of paper often used in place of money;

The amount of this surplus property which is being moved from place to place in order to take it from the persons who wish to sell it, and get it to those that want to use it, is beyond our comprehension, and the character and number of vehicles employed in transportation are too many for enumeration. It is officially stated that the property carried over American railroads and canals and on our river boats and coasting vessels, is greater in tonnage and value than that of the combined foreign commerce or all the great nations of Europe.

It is to procure part of this enormous surplus that most of the labor of the world is performed. The greatest problem of life is to live — to procure the means of subsistence; and what of our needs we cannot supply from that which we ourselves produce, we must supply out of what others have to spare. To effect these exchanges, money is imperatively required.

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Origin of Money.

Without stopping now to consider what other uses there are for money, as, to pay for labor, to pay debts, taxes and other demands upon our resources, let us keep our minds closely on the subject of procuring things we need for food, clothing, shelter — things needful to sustain life and to supply comforts and special luxuries. It was in the development of commerce that money was invented. Money is an invention — the fruit of discovery, just as machines are invented in order to apply certain mechanical principles which have been discovered. In the beginning of trade, there was no money. All exchanges of property were made for other property — article for article. It was early discovered that certain metals, because of their beauty in the pure state, and because of their fineness of substance, their indestructibility, and their susceptibility to high and brilliant polish, were peculiarly well adapted to use in ornamenting the person, the home, the temple, the palace and all resorts of pleasure and passion. Early it became common to adorn public building? with articles made of gold and silver. Temples of worship were, and still are, rich in golden ornaments — vases, statuary, and the like These metals were articles of commerce exchanged for other things; and because of their peculiar properties and uses, they were universally sought after. They were special objects of prey on the part of invading armies. It is a truth of history that "in the search for gold whole races of people have been put to the sword, continents subjugated, religions and civilizations destroyed." It is equally true that men and women of

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wealth and fashion have sacrificed honor and fame — even life itself, for possession of the precious metals.

These considerations have made silver and gold objects greatly to be desired by all classes of people, and we find that in the earliest periods of history, they were sought by traders as articles of merchandise. History, sacred and profane, is full of commercial transactions showing that gold and silver were always in demand for trade. Abraham "weighed" out four hundred shekels of silver, "current money with the merchant," and Joseph was sold for "twenty pieces of silver."

And in that way the precious metals became money — current money with the "merchant." They came to have a commercial value, the same as other articles of merchandise; and because a small quantity of them by weight, would exchange for much greater quantities, by weight, of other articles, and because goods had to be transported by caravans long distances between trading points, these metals, when they could be procured, served well as a sort of medium by means whereof trade in other things was always profitable.

In time, rulers of nations undertook to regulate trade in the precious metals by impressing on them certain marks to show officially their weight, so that in making exchanges for other property all parties might be apprised of the weight of the metal, and then they could put their own value on it as measured by values of other things. They were exchanged by weight in one form or other and their value in relation to other articles, and the value of other articles in relation to the metals, came to be more and more distinct and regular as commerce spread among the nations, until at length,

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Certain Values Were Assigned by Law

to certain weights of the metals. This legal value Varied from time to time and in different countries, not only with respect to the values of other things, but with respect to the metals themselves.

In the sands of the rivers of India and of the regions north of the Himalaya mountains, as well as those of Egypt and Arabia, were found great quantities of fine gold, but there was no silver there; hence, until traders began to exchange silver from the mines of Greece and Spain for gold in eastern countries, silver was the more costly metal in the gold regions, and gold the more costly in the silver regions. During the greater part of the second century B.C., one pound of silver was worth ten pounds of gold in Arabia. In earlier times the difference had been twice as great. In ancient China and Japan the ratio between the two metals was always low. In Egypt, in very early times, the ratio was one of gold to two and a half of silver, by weight.

Ratio between Silver and Gold.

The relative value of the precious metals compared with one another or with the values of other property cannot be ascertained by cost of production. War, which was always in progress somewhere, was the great disturber of prices. There were sudden changes of ratio following the conquests of Alexander, Julius Cćsar, Cortez and Pizarro. And this was caused by the movement of large quantities of the metals from place to place by the conquering armies.

With the decline of the Roman Empire, gold went east and trade with Europe fell off until revived by

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Arab merchants during the seventh century. Afterward the Venetians opened trade with the Oriental nations, taking to Asia "slaves, weapons of war, grain, ship and other timber, and iron," and got in return "gold, gold dust, silver, spices, drugs, sugar, and other commodities."

Gradually, as commerce spread, and until the discovery of America, the ratio between the values of silver and gold grew to 12 to 1. The English mint ratio in 1482 was 11.16 to 1. In North Germany in 1403 it was 12.80 to 1. The commercial ratio in England in 1687, is given at 14.94 to 1, and it did not reach 16 to 1 until 1808, when it was 16.08 to 1. It never went beyond these last figures, except in 1813, when it reached 16.25 to 1, until 1875, when it was 16.59 to 1, and has not been below that since.

Unit of Value.

Slowly, in the course of trade among people of one locality, and in the development of commerce among people of different places, men became familiar with certain ideas or estimates of value attaching to particular articles when measured by the value of some one or more other things; they employed certain words, names or signs to represent those ideas or estimates of value ; and when they came to use some particular article or a certain weight of some particular article, as a means of representing the idea or estimate of value and also to use it as a medium of exchanging other property, they gave to it the name or designation which, they used in expressing the idea of a unit of value.

Every nation has its own familiar names or words to express values, and they use no other. In Great Britain,

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values are expressed in pounds, shillings, pence and farthings. In France, the unit of value is expressed by the word "franc"; in Germany it is "mark"; in the United States it is "dollar." An American, not accustomed to the use of any coins but our own, does not know how to express value in francs or marks; and Frenchmen and Germans, who are not familiar with our coins, do not know how to estimate or state value in dollars. Nor, could any of us, whether American, Frenchman, German or Englishman, estimate values by the weight of the metals of which our coins are made. No man here or elsewhere would think of stating the value of his horse or his farm in pounds or ounces of gold or silver, and yet it is by weight of metal that property is paid for when payment is made with metallic coins. We do not express values by the weight of some kind of property. We are accustomed to use words for that purpose that do not express the idea of weight at all — words that express the idea of value and nothing else. In truth, value is an idea and cannot be precisely defined. It is a relation existing between productions of labor with respect to their usefulness or desirability among people who use them or desire their possession.

A bushel of wheat may be worth a dollar in money. But what is its value in corn, or cotton, or cloth, or oil or any one of a thousand other articles? And what is the value of a dollar when expressed in any of these other things?

Value is necessarily a relation, an idea or conception of the mind. But after we have become familiar with a certain word to express what we have learned to regard as a unit of value, we employ that word for the

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purpose and comprehend its application perfectly; and by the use of that term we express or estimate value readily and understandingly. If I am asked the value of my farm or of any other property which I own, I would not think of answering in wheat, or bacon, or flour, or in anything but dollars, and because we have all become accustomed to express values by the use of the word dollar.

And, as before stated, when we use some substance or a certain quantity of some substance to represent a dollar — that is, the value of our unit, we call that thing a dollar, and its multiple a certain number of dollars. For example, when our government was organized, the Spanish milled dollar was current in the country, the people were familiar with its use, and it was taken as the representative of our unit of value — the dollar. An American silver coin with American devices, but to contain 371 1/4 grains of pure silver, and to be of the value of a Spanish milled dollar, "as the same is now (then) current," was authorized by our first mint act in 1792. All multiples of the unit was made of gold; divisions of the dollar, down to five cents were made in silver; and one hundredth part of a dollar was represented by a copper one-cent piece.

In 1873, our unit or dollar piece was changed from silver to gold, and the silver dollar was dropped from the list of coins to be thereafter minted.

From the beginning in 1793, to 1873, our total coinage amounted to: —

Gold $1,097,683,511.22
Silver 172,392,780.23
Total... $1,270,076,291.45

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Total amount from 1793 to June 30, 1894 —

Gold $1,771,880,288.00
Silver 675,954,221.30
Total... $2,447,834,509.30

Amount of Money — Coin — in Circulation.

It appears from the treasury statement for May 1, 1895, that the amount of gold coin in the United States outside the national treasury at that time was estimated to be

  $483,111,525
Amount in Treasury 89,954,140
Total stock... $573,065,665

This amount is probably 50 per cent. too large; for aside from the fact that the figures are privately conceded to be inaccurate, if the President and the Secretary of the Treasury were satisfied there is more than half that much gold in the country, they would hardly have ignored our own people in the matter of bond sales.

It is well known that Austria-Hungary, Italy and Russia have been laying up gold for some time past; and it is a fact equally well understood that citizens of the United States and others have taken large amounts of gold from this country on tours of travel.

But, assuming the treasury figures to be substantially correct, we have in the country: —

Gold $573,065,665
Silver dollars 423,127,039
Total... $996,192,704

Of this amount $330,914,504 silver is covered by

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certificates that have been issued against silver dollars, and they are in circulation, but are not legal tender money. The coins, which are good tender, are thus tied up and cannot be used for money purposes unless the certificates are returned to the treasury and surrendered, something that nobody expects. Our stock of coin, then, is properly subject to this reduction, and that would leave us only $92,212,539 of silver coin that can be called into use at any time.

However, let us assume that every silver dollar is free and that we have at least $250,000,000 in gold more than we do have — taking the treasury figures just as the books show them; we have, as above stated, $996,192,704 full lawful tender money in the country.

According to the metallic theory of money — a theory and a practice that has descended to us from remote ages past, this $996,192,704 in metal coins, is the equivalent of all the rest of the property in the country, amounting five years ago to $65,000,000,000 — one dollar in money to 66 dollars in other property. This would amount to about fourteen dollars to the head of population, and we transact a yearly business amounting to more than 100,000 million dollars. If we divide the gold by two, as the actual facts warrant, we should have but about $300,000,000 in gold, and $100,000,000, in silver to work with — a total of but $400,000,000, a per capita of a little over six dollars, and of this total of gold, the treasury aims to hold $100,000,000 as a reserve fund for the redemption of government notes; the rest is mostly held as bank reserves.

If the gold monometallists theory and practice is the correct one, then, at best — conceding all they claim, using the treasury figures, false and misleading as they

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are, still we would have only a little over $500,000,000, with a reserve of $100,000,000 that cannot be touched except for redemption purposes, leaving us at most only $400,000,000 to handle a business of 100,000 millions — one dollar in gold to be the equivalent of $250 of other property in trade.

But this is not all. Our public and private debts amount to about $25,000,000,000, a sum equal to the assessed value of all our taxable property in 1890, and this enormous indebtedness, according to the gold party policy, must be paid finally out of our $400,000,000 gold coin. This, it appears to me is impossible. We could pay only as Micawber paid with our notes, renewed every pay day.

Restore the Law of 1837.

Hence, I favor the immediate restoration of silver to its ancient place as one of our money metals. Let gold and silver be coined in unlimited amounts, on exactly equal terms, as it was done under the act of January 18, 1837, and at the weights and ratio therein provided. I favor this policy —

First. — Because we have not lawful tender coin enough for the legitimate demands of our trade.

Second. — Because we shall require much more coin than we now have to pay our coin obligations, and more than we will ever have if we persist in maintaining an exclusively gold basis.

Third. — Because this policy would tend to revive business, stimulate enterprise, employ labor and capital, and encourage the people.

As to the first reason, if the fact were not self-evident that we have not now gold coin enough to

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transact our business with, it needs only be said that from actual tests it appears that only about one per cent, of the business done in and through our banking houses, is done with gold. A less amount is done with silver. We are compelled to use various forms of paper to make up the difference between two per cent. and one hundred per cent. And, although we use large amounts of greenbacks, treasury notes, silver certificates, and national bank notes, still, even with these added to the metal coins, we are able to supply only eight per cent, of the demand, and we do all the rest of our trade — 92 per cent., with private paper, notes, checks, bills, drafts, etc.

Only one per cent. of our business is done with our present basic coin — gold. Ninety-nine percent is done with substitutes for gold. Silver is discredited by the government, and a contract written payable in gold, excludes the use of every other kind of money in payment, notwithstanding the promises and pledges of partisans that every dollar is as good as every other dollar.

Second. — Our national interest-bearing debt now amounts to about $750,000,000, of which $25,000,000 is payable at the option of the government; $559,000,000 is payable July 1, 1907; $100,000,000 payable February 1, 1904; the rest payable in 1925.

All of this is to be paid in coin of the value of our coin on the 14th day of July, 1870, the day the refunding act was approved. All our bonds now out were issued under, and in accordance with, the provisions of that act, in so far as the matter of their redemption or payment is concerned. The words of the statute are — "redeemable in coin of the present standard value."

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At that time and for eighty years prior thereto, our coin consisted of gold and silver.

It is clear that were any part of the bonds now due and payable, and if we would pay them with gold, we should have to borrow every dollar that we would pay; for we have lately been obliged to sell upward of $162,000,000 in bonds to restore the $100,000,000 gold reserve, and, that is about all the gold the government has or will have without the sale of more bonds. And if our present policy is to be continued, we shall never be any better off, in this respect, than we are now; for, it must be remembered that according to our present policy, the greenbacks and treasury notes — nearly $500,000,000, in all, are redeemable in gold, though the law says "coin;" and if all the notes were presented at once, or within a year, for redemption, there is not gold enough in the country to pay them. The government is the redeemer, and it has not one-fifth part enough gold in the treasury to redeem all these notes at once. What is still more, the act of May 31st, 1878, requires that when these notes are redeemed, they shall not be cancelled, but shall be paid out again and "kept in circulation;" so that, if once paid, they may be presented again and again, and there is no end to the process of redemption. We have recently seen such an operation twice performed within thirteen months, and it may be repeated any time that it suits the pleasure of the money-changers to make another raid on the treasury. Where is the gold to come from to keep up this interminable redemption? It must be borrowed on public credit. There is no other resource, unless we change our policy and restore the old law and the old policy of coining and using silver money.

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Third. — It is a well settled fact in the history of money, that a large supply in active circulation operates as a stimulus to business enterprise. Prices are well maintained and the people prosper. Without stopping now to discuss the question whether good business makes money plenty, or whether plenty of money makes business good, we all agree that with an active circulation of money, business is always "good." And in this connection there is an important element of service in what we call

Free Coinage.

It puts money out at once among the people, while if bullion is purchased for coinage and paid for with paper, the coin is apt to be stored and may not get into circulation at all. It would change the situation if coinage value was paid for the bullion and the paper made full legal tender. But none of our paper, under the present practice and under existing laws, will pay a gold debt; at any rate, not till after judgment is taken and execution issued. The court could not enforce payment in gold, even though the judgment be for gold. The security would be sold for whatever it would bring in dollars, and that would be the end of the transaction.

Free coinage means that when a person takes bullion to the mint it will be coined for him free of charge. He takes the coin when it is ready, and he, not the government, puts it into circulation. He wants it to circulate and for no other purpose. It is of no use to him unless it does circulate. His first effort after getting the coin into his possession, is to find some profitable way of getting rid of it. He immediately puts it

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where it will begin to perform its lawful functions as money. Hence, free coinage of silver would at once get fresh money — full lawful tender money — into active circulation, leaving blessings in its wake.

Objections Considered.

Concerning objections commonly urged against the bimetallic basis, I have little to say here. If it be true, as the Bullion Report of 1810 puts it, and we all agree on the proposition, that there is gold enough in the world to do the business of the world, the level of prices rising and falling with the quantity of gold in use as money, it follows that with an absolute or a relative diminution of the quantity of money in use, the level of prices will fall, and with an enlargement of the money volume, the level of prices will rise. Everybody concedes this; and all but the gold speculators concede that the deplorable condition of business for some years past is due in some measure at least to a diminution of the world's legal tender money through the demonetization of silver. If they do not concede this, their manifestation of desire for an international coinage ratio is hypocrisy.

It may be safely assumed, then, that all the people, save a very few, are of opinion that we ought to use silver as well as gold, but many insist that it should be done at a ratio different from the present legal limit of 16 to 1 by weight. They argue, notwithstanding the assertion that legislation cannot impart value to any commodity, that by international concurrence we can do for the whole world what no one nation can do for itself — legislate value into silver and make it equal to gold at any ratio we choose to adopt. That gives us

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the case without further argument. If by the concurrence of any number of nations, silver can be made more valuable in international commerce, then, by the same reasoning, any one nation can safely use it for local purchases at any ratio the people agree upon.

In 1837 we adopted the ratio of 16 of silver to 1 of gold, by weight. (The exact proportion is a fraction less than 16). It has not been altered since. In 1870, when our debt was refunded and new bonds authorized, silver was more valuable than gold at the legal ratio; and in 1873, when the coinage laws were revised and the silver dollar dropped from the list of coins, silver stood 103, with gold at 100.

Depreciation of Silver not Caused by Overproduction.

The depreciation of silver since that time has come about, not from overproduction, but from demonetization. Germany and the United States, both the same year, discrediting silver by discontinuing its coinage except for subsidiary purposes, followed by France and the other States of the Latin Union, and they followed more recently by Austria and Italy, has greatly diminished the demand for silver for coinage purposes. That, and not overproduction, occasioned the depreciation. If gold had been treated in that manner it, too, would have fallen in price. But gold has been held up by the laws of these great nations, while silver has been thrown on the open market to seek its level among corn, wheat, cotton and other commodities. Great Britain pays Bank-of-England notes for all the gold bullion offered at the rate of Ł3. 17s. 9d. per fine ounce, and every note of that bank has behind it its

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face value in gold at this rate of purchase. In the United States we pay an eagle, or ten dollars, for every 232.2 grains of fine gold brought to the mint. So it is in Germany and France, and in all gold-using countries; they pay a fixed sum for all the gold bullion brought to their mints, and that fixed sum is written in their laws; while, as to silver, that is purchased just as corn or coal or pork is bought — in the open market, as it is required. Gold is protected; its value is fixed by the law and maintained by the law, while silver is left to find its level with other articles in the wide world of commerce.

Fluctuations in the Production of the Precious Metals.

The records of the world's production of the precious metals show that it has not been uniform from year to year, nor from decade to decade, nor for any periods put in comparison. On the contrary, the output of the mines has been very irregular; some years and some periods less, and some more in the aggregate, less or more of one or the other of the metals; at one time gold leading, at another time silver leading; and this applies not only to the quantity of product, but to its value as well. Yet the commercial ratio of value between the metals has varied but slightly from time to time during five hundred years prior to 1876.

The United States Mint report for 1894 shows that from 1493 to 1893 the total production of the precious metals was: —

Gold $8,391,101,000
Silver $9,909,041,000

During this 500-year period the excess of silver production over that of gold was about 18 per cent.

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From 1493 to 1700, the production was: —

Gold $1,107,955,000
Silver $2,496,904,000

For this period of more than 200 years the excess of silver production over that of gold was 103 per cent.
From 1701 to 1800, the output was: —

Gold $1,262,805,000
Silver $2,370,809,000

Excess of silver nearly one hundred per cent.

From 1801 to 1893 the figures are: —

Gold $6,028,341,000
Silver $5,141,328,000

Excess of gold over silver, 17 per cent.

From 1851 to 1875: —

Gold $3,161,060,500
Silver $1,288,527,500

Gold excess, 150 per cent.

From 1876 to 1893, the record shows: —

Gold $2,066,999,000
Silver $2,392,334,000

Excess of silver nearly 16 per cent.

Ratio has not Varied Much.

Notwithstanding the fluctuations in amount of production in different years and different periods of years, the commercial ratio played between 11 to 1 and 16 to 1 during a period of nearly 500 years, and no rapid or great depreciation of either metal as compared with the other began or continued until after demonetization.

The average of the mint ratios of England, France, Germany and Spain in 1492, the year of the discovery if America, was 11 to 1. Ninety years before that

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time, in North Germany the ratio had been as high as 12.80 to 1.

In 1687, according to the tables of Dr. Soetbeer, copied in the United States Mint report for 1894, the ratio was 14.94 to 1. It reached 15 to 1 two years later, and has never been as low as 14 to 1 since; nor did it ever reach 16 to 1 until 1808, when the figures were 16.08 to 1; and, excepting two years, 1812 and 1813, when it was 16.25 to 1, the ratio was never again above 16 to 1, until 1874, when it was 16.17 to 1, and has never been that low since. The fall has been continuous from that time. In 1893 the ratio was 26.49 to 1 and is now lower.

Silver has Kept Even With the General Level of Prices.

The price of silver bullion has not fallen more than the general level of prices. Many different combinations of useful commodities have been presented with their index number 100 as the average price, and silver has kept even in all of them with the downward trend since 1873 — the year of silver's demonetization in two of the great countries of the world.

Here is Prof. Sauerbach's table: —

Index numbers of forty-five principal commodities and silver by Professor Sauerbach:

Year. 45 Coms. Silver. Year. 45 Coms. Silver
1874 102 95.8 1884 76 83.3
1875 96 93.3 1885 72 79.9
1876 95 86.7 1886 69 74.6
1877 94 90.2 1887 68 73.3
1878 87 86.4 1888 70 70.4
1879 83 84.2 1889 72 70.2
1880 88 85.9 1890 72 78.4
1881 85 85 1891 72 74.1
1882 84 84.9 1892 68 65.4
1883 82 83.1      

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These 45 commodities comprise the principal articles of grain, provisions, clothing, fuel, etc., articles commonly used and regarded as necessaries.

About Honest Money.

As to the honesty of restoring silver, there is no question of honor involved. The coinage of money and the regulation of the value thereof is within the exclusive jurisdiction of congress. That body may make money coins out of gold, silver, copper, nickel, paper, or any other substance. The language of the Constitution is: "Congress shall have power to coin money and regulate the value thereof." "No State shall coin money or make anything but gold and silver coin a tender in payment of debts." But congress never has guaranteed the market value of any of the materials out of which it authorizes coins to be made. It once (1834) took six per cent, of pure gold out of our coins, and the lighter weight afterwards paid debts quite as well as the heavier weight had done before. In 1853 we reduced the weight of our smaller silver coins, but they have always paid their way as the heavier coins had previously done. Our minor coins now are not one quarter full weight, yet the law has somehow put full value into them. We have perfect legal and moral right to make our coins of whatever material we choose and give them the value that suits us. We never promised to pay anything more than our lawful coins, and if creditors do not wish to take these, let them take our corn, or cotton, or whatever else we have that they do want, and they can turn that into money that will suit them.

Let the reader not forget that the laws do not pretend

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tend to regulate the value of bullion. It is coin that the law imparts value to — legal value, not value in the abstract and as compared with the values of other property. The law provides only that coins shall be made of certain metals by weight, and that the coins shall have a certain legal value, no matter what may be the market price of bullion. The paper in a paper dollar has no market value, but the paper dollar was good when there was neither gold nor silver money circulating in the country.

Our lawful coin in 1870, when the refunding bonds were authorized, consisted of dollar coins of 412 1/2 grains of standard silver, and multiples of dollars in gold coins at the rate of 25.8 grains of standard gold to the dollar. The law obligates us to redeem the bonds in "coin of the present standard value." The standard value of the silver coin was one dollar; the value of the gold coins was: the eagle, ten dollars; the half-eagle, five dollars; the quarter-eagle, two and one half dollars. And their values have not been altered since. If, then, we pay in these coins or either of them, we comply with the terms of the contract.

I beg the reader to remember that our metallic currency consists of coin, not bullion. If we had promised to pay in bullion, the language of the law would have so provided, and we would have said so many ounces of silver bullion or of gold bullion; or, we would have said bullion at a certain price per ounce.

But we said coin, and the laws had long ago fixed the weight and value of our coin.

In the contract entered into last winter by the Secretary of the Treasury with the Morgan-Rothschild syndicate, the word "coin" does not appear; nor does

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"dollar," or "pound," or "franc," or "mark," or the name of any other coin. The contract requires the delivery of a certain quantity of gold measured by ounces.

Our obligations are payable in coin, coin only, and nothing but coin; and there is nothing, absolutely nothing, in the contract or in our laws providing that our coins shall be measured by the market value of bullion or of anything else. Our unit of value was and is the dollar, and it was, when all our coin obligations were contracted, to be represented by a coin weighing 412,1/2 grains of standard silver — silver nine-tenths fine, without reference to the market value of silver bullion.

It would be nonsense to say "redeemable in coin measured by the market value of bullion when the debt matures." If that was to be the construction of the contract, we would have so written it and the words would be — "redeemable in gold at its market value in London, England."

Call silver coins fifty-cent dollars, if you choose; they are quite as honest as 200 cent dollars, and that is the value of gold dollars now measured by the value of articles in general use among the people. These articles, generally, that is to say, the general level of prices, has fallen fifty per cent, since 1873; so that if we should measure gold coins by the general level of prices, as the gold party insists that we shall do with respect to silver coins, we would find that the gold dollar is a 200-cent dollar, and the silver dollar is a 100-cent dollar — an honest dollar.

This quibbling over the value of mewl dollars proves two assertions — (1) that our financial affairs are controlled by brokers and speculators; and (2) that we shall never have a just, safe, sound and satisfactory

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monetary system until we discard metals, and thus get rid of the men that prey on the people and rob them through interest and rent.

Paper is the best material for money coins, but I have undertaken only to show why, as we are at present situated, with our gold monometallic system in full operation, and with our coin obligations out, we ought promptly to restore the old system of free coinage of both gold and silver at the present ratio, to the end that we may have coin on hand to redeem our promises honestly and in good faith.

I pray that the government of the United States will never again enter into any sort of a contract requiring us to pay anything but dollars. With our immense export trade, we shall at all times be able to sell our products and with the proceeds pay our debts. Our dollars ought to represent our property, all that we have, and not merely the little gold in our possession; and our money ought to be made of material which, in small bits, would have no appreciable market value. Then it would not be "cornered," and when war or hard times should come it would not slink away and hide. When the people need money they ought to have it within easy reach.

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Chapter XXVII. — By E. Rosewater, Editor of the Omaha Bee.

The unprecedented disturbance and depression of trade, commerce and industry which first manifested itself in a marked degree in 1873 and has prevailed with fluctuations of intensity up to the present time, has been interpreted by many as the natural result of the disuse of silver as a money metal by the leading nations. Some of the most prominent public men in America, notably members of congress from silver producing states, have taken this view of the phenomenal and universal decline in prices. It can hardly be said that these parties are disinterested, or in other words that their conclusions have not been biased by their anxiety to unduly stimulate the silver industry and by the heavy profits which the bonanza mining millionaires expect to reap from a restoration of unlimited silver coinage. Those who have taken the pains to look beneath the surface and study the problem in all its bearings ascribe the decline of prices to multifarious causes. If a comet had appeared in the sky in 1873 and remained in sight within our planetary system for the past twenty-two years, there would doubtless have been any number of scientific charlatans who would ascribe to the presence and proximity of the comet all the cyclones, the droughts, hailstorms, floods and epidemic diseases that have occurred during that period. And there would have been millions of

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people credulous enough to believe in the terrible effects of the comet upon our system, and nobody could dissuade them from that belief. It is so with the financial charlatans who charge every disaster that has befallen the financial and commercial world within the past twenty-two years to the divergence between silver and gold and the disuse of silver as a money metal. This decline in prices has been universal, affecting nations that had been involved in war, as well as those which have maintained peace, those which have a stable currency based on gold, and those which have an unstable currency based on promises which have not been kept; those who live under a system of free exchange of commodities and those whose exchanges are restricted by protective duties. The decline in prices has affected alike England, Germany, Australia, South Africa, the East Indies and California. The poverty in Australia was reported as more extreme in 1885 than at any former period in the history of the colonies. And Australia had $32 of money per capita. Does it stand to reason that the restriction in the coinage of silver alone was responsible for this universal depression? Is not the true cause to be sought in the great industrial revolution that has been in progress all over the world within the past quarter of a century? Take, for instance, the trade depression in Germany. The war indemnity which had been exacted of France in 1871 made Germany flush with money. Ready capital became so abundant that banking institutions almost begged for opportunities to place their loans, and interest rates fell as low as 1 per cent. As a legitimate result the whole country invested and engaged in all manner of new industrial and financial enterprises. In

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Prussia alone 687 new joint stock companies were founded during the year 1872, with an aggregate capital of $481,000,000. The sudden growth of industries, the temptations of cities and towns which assumed a rapid and unhealthy growth, induced hundreds and thousands of men and women to desert their farms and seek employment in trades. Reaction and disaster came with great suddenness. In the fall of 1873 great fortunes rapidly melted away, industry became paralyzed and the whole of Germany passed at once from a condition of great prosperity to a depth of financial and industrial depression never before equalled. In the United States the crash of 1873 was preceded by several years of high prices, large profits, large importations, a railway-building mania, expanded credit, over-trading, over-building and high living. The failure of Jay Cooke . Co., precipitated the crisis; Within twenty-four hours after the collapse of the Northern Pacific balloon nineteen banking houses had failed, and a succession of bankruptcies followed which, within three years, aggregated $775,000,000, while the railroad bonds in default on January 15 1876, were represented as aggregating $789,367,655. In Great Britain the depression and decline in prices did not set in until 1875, and they were largely due to the commercial sympathy that prevails between England, Germany and the United States. There is a very general agreement that in England and on the continent of Europe the year 1879, 1885 and 1886 were the worst that have been experienced in the period commencing with 1873. A subject of such transcendent importance and affecting so intimately the material interests of nations and individuals naturally attracted great

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and continually increasing attention throughout the civilized world. Investigation undertaken by committees of congress and by royal British commissions ascribe the general industrial depression: First, to changes in the distribution of wealth; second, a natural tendency to diminution in the rate of profit consequent on the progressive accumulation of capital; third, industrial overproduction and impairment of agricultural industry consequent on bad seasons and the competition of the products of other soil which can be cultivated under more favorable conditions. The loss in British farming lands is computed at over $300,000,000. In France the principal causes assigned are excessive speculation prior to 1873, followed by bad crops, the great falling off in the production of wine through the destruction of the vineyards, which is estimated at over $2,000,000,000, a sum nearly double the amount of the war indemnity of 1871, and general overproduction of manufactured products.

The consensus of opinion among the ablest writers and thinkers is, however, that the chief cause of the depression within the past quarter of a century must be traced to the marvelous changes that have taken place through the introduction of machinery and the appliances of steam, electricity and natural gas to the production of articles in every branch of industry, the consequent displacement of large numbers of workmen, and last but not least, to the cheapening of transportation and increased facilities afforded for the conveyance of products from one country to the other. The remotest parts of the earth have been brought near to each other by the steamship and the railway, and countries separated by great oceans and thousands of

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miles apart are now competing actively in the marts of the world.

Let us take a glance at some of our own products. It is to be noted that in very few branches or productions have greater improvements been made and adopted in recent years than the growing of wheat. On many large ranches in California steam plows are used and on others gang plows which turn six furrows and are drawn by from eight to fourteen mules. Not infrequently plows are run in straight lines a distance of from six to eight miles. A patent machine for sowing seed is employed by means of which it is claimed that one man and a team can sow one hundred acres of grain a day. Under such conditions wheat can be raised in California at a cost of 70 cents per hundred or 42 cents per bushel. In 1881 the two Dakotas with 150,000 square miles did not produce a single bushel of wheat for export. In 1892 Dakota exported 30,704,000 bushels, or nearly as much as the annual export from India since 1880, which has been primarily responsible for the decline of recent years in the world's average price of wheat. In 1887 Dakota's crop was 62,500,000 bushels, or one-seventh of the total wheat product of the United States; in 1890-91 Dakota crops went down to 37,000,000 bushels, but this was owing to a shortage in the crop.

Australia and New Zealand are becoming sharp competitors in the wheat market, having changed their sheep ranches to wheat lands. Previous to 1873 India exported little or no wheat to Europe, owing to the high cost of freight and the export duties; in 1881 the freight from Calcutta to London was 60 shillings per ton; in 1886 freight had declined to 30 shillings per

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ton or 37 1/2 cents per hundred pounds. That brought India's cereal into active competition with American wheat in London.

Laws of supply and demand naturally are the prime regulators of prices. From 250,000,000 bushels of wheat raised in the United States in 1872 the crop of wheat steadily advanced until it was 512,000,000 bushels in 1884 and 477,000,000 in 1886. In 1849 the United States produced four and one-third bushels of wheat per inhabitant; in 1859, five and one-twentieth bushels, in 1869, seven and one-half bushels; in 1876, nine and one-tenth, and the same in 1884. In thirty-four years, from 1849 to 1885, the increase of population was 141 per cent.; the increase of wheat production 410 per cent. That explains why the price of wheat has been gradually receding. The same applies to the production and price of cotton.

If those who take a despondent view of the great industrial depression and marked decline in prices would ponder and reflect they would discover a silver lining behind the dark cloud. The general decline in prices all over the world has placed the wage-worker within the reach of articles and commodities that formerly were luxuries within reach of the wealthy only. While prices have gone down 30 per cent., wages have gone down only from 5 to 10 per cent. since 1873, and the laborer can save more on present wages than he did during the inflation period after the war, and his money will go further than it ever did before. The savings banks in all our large cities attest the fact that the wage-worker has not fared badly by the drop in prices, and the laborer is vitally concerned in keeping the purchasing price of the dollar as large as it is now, unless

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he can secure an advance of wages to correspond to any lessening value. The cheapening of food, clothing, furniture, fuel and rents have enabled the men of small means to live comfortably, and their savings go a great deal further than they ever did before. The decline in prices enables men of moderate means to carry on business with small capital. While the farmer has been seriously affected by the decline in food product prices, he also has had the benefit of cheaper sugar, cheaper lumber, cheaper clothing, cheaper furniture and the cheapening of all commodities he has to buy. The fall of 30 per cent. in the price of all commodities the world over has enabled the commercial and industrial world to do business with one-third less currency. In fact, the rapid exchange that now takes place by rail, express and the telegraph in the mercantile world has materially lessened the demand for ready money. Twenty-five years ago it took a small fortune to stock a first-class dry goods store. Now, with calico at four cents a yard and all merchandise at one-fourth of war prices, the dry goods merchant is in a position to make a splendid display on a very moderate amount of capital, and so with all the other classes of business. As a natural consequence, a much smaller volume of money is now needed for the transaction of business than when prices were high. Abundance of the circulating medium does not always represent prosperity. The Argentine Republic, with 2,000,000 of people, had $6,000,000 of metallic money and $379,000,000 of greenbacks in 1880, or 1189.70 per capita; but at the end of nine years her greenbacks became almost worthless and the country was thrown into a state of general bankruptcy.

The advocates of free and unlimited coinage of silver

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point to the panic of 1893 and the intensified commercial and industrial disasters in the United States, as the culmination of the so-called crime of 1873, As a matter of fact the disastrous collapse of 1893 is chiefly due to the criminal over-capitalization of corporate properties and the colossal frauds perpetrated upon investors. While the total debt of the United States, including bonds and greenbacks, aggregates a trifle more than $1,000,000,000, and the bonded debt of all the states, counties, cities and school districts is less than $1,200,000,000, the bonded debt of the no ways of the United States is over $6,000,000,000. The bonded debt of the various industrial corporations, including the telegraph, telephone, electric lighting, electric motor, street railways, water companies, gas companies and the various concerns that have been operated under trusts, aggregate $4,000,000,000 more, and these concerns are stocked for about $12,000,000,000. The bulk of all this capitalization represents fraud in Its most glaring form. Construction companies and Credit Mobilier rings under the sanction of state and national legislation exploited the investors and robbed each other until the balloon collapsed and precipitated general disaster upon the whole country. Some of the biggest frauds have been perpetrated by the billionaires of the mining states, who flooded the stock exchanges of New York, London and Paris with billions of imaginary wealth. These are the true causes of the terrible shrinkage in values, and the remedy must be directed to the prevention of the recurrence of such frauds. The shrinkage in the price of silver is but a drop in the ocean when compared to the destruction of credits. The aggregate commerce of the United States is computed

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to represent $60,000,000,000 a year. Of these exchanges, 98 per cent. are credits, and 2 per cent. primary money, gold and silver. For every dollar in silver circulated in our exchanges struck down by demonetization, $98 of credits were struck down by fictitious and fraudulent capitalization. We have destroyed $58,000,000,000 of credit, and cannot hope to restore confidence and prosperity by paying 100 cents for 51 cents' worth of silver. We cannot talk of the crime of 1873 and ignore the crimes that preceded 1873. In 1492 the relative value of silver to gold was as 10 ˝ to 1. In 1760 the ratio stood 14 ź to 1. Here was shrinkage of 38 per cent. in the value of silver. Who committed that crime and why did silver shrink 38 per cent, in spite of its free coinage by all the nations? In 1793, thirty-two years later, silver had depreciated further to the ratio of 15 to 1, or shrinkage in thirty-two years of 5 per cent. more. In 1813 the ratio was 16 ź to 1, or a further shrinkage of 8 per cent. The total shrinkage, therefore, in the relative value of silver to gold between 1492 and 813 was 51 per cent. Silver bullions worth $1 at the time of the discovery of America was worth only 49 cents in 1813, and in the face of this tremendous shrinkage the world prospered in its industrial and commercial intercourse. Prices of commodities went up and wages were higher than they had been at the time of the discovery of America. It is charged that silver was demonetized for the purpose of reducing the value of the property of the land owner, and for the purpose of reducing the value of wages of the laboring man. Money has two qualities; purchasing power or exchangeability for other products, and the productive power of earning an income for itself by use.

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Making money dearer means raising the price for its use, but money is cheaper in the United States now than it ever has been. The purchasing power of money is greater than it ever has been and the value of wages is greater than it ever has been, because the laborer can buy more of the necessaries of life with his wages than he ever could before. The true standard of values is labor, and measured by that standard our present money has not changed materially from the standards that prevailed up to the war. In fact, labor commands higher wages in 1895, in spite of all depression, than it did in the period of sixty years preceding the war. Prior to 1861 the common laborer's wages was 75 cents to $1 a day. To-day the common laborer earns from $1.25 to $1.50 per day, and the best mechanic, who did not earn over $2.50 per day prior to 1860, now earns from $2.50 to $4 per day, and that for eight hours' work, instead of ten to twelve hours' work as formerly.

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Chapter XXVIII. By John G. Carlisle, Secretary of the Treasury.

The proposition to revolutionize our monetary system and thus destroy the credit of the government and the people at home and abroad, violate the obligations of all contracts, unsettle all exchangeable values, reduce the wages of labor, expel capital from our country, and seriously obstruct the trade of our people among themselves and with the peoples of other countries, is one which challenges the intelligence, patriotism, and commercial honor of every man to whom it is addressed. No matter what may be the real purposes and motives of those who make the proposition to legalize the free and unlimited coinage of silver at the ratio of 16 to 1, these are the consequences involved in their scheme, and, in my opinion, they cannot be avoided if it should be adopted.

I do not charge that our fellow-citizens who propose to revolutionize our monetary system by a sudden change in the standard of value really desire to see the business of the country ruined, or even injured, or that they believe any injurious consequences would follow the adoption of their policy, but, in my judgment, the results would be most disastrous to the material interests of all the people in every part of the country, and, therefore, I shall appeal to them carefully to review the grounds upon which their opinions have been formed before it is too late to correct a possible mistake upon

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a subject of such supreme importance to themselves and to their posterity. It is not necessary to impeach their motives in order to answer their arguments, nor would it be wise or proper to underestimate the intellectual and material forces behind this great popular movement in the South and West, a movement which now seriously threatens to disrupt existing political organizations and reform party lines; but, no matter what may be the motives or the present numerical strength of our opponents in this controversy, the merits of the policy they propose to inaugurate must be subjected to the tests of reason and experience, and if it is shown to be impracticable, or fundamentally wrong in principle, we may be confident that it will not finally command the support of a majority of our people.

Before proceeding to the discussion of the main question presented, it may be advantageous to state as briefly as possible a few admitted or well-established facts having an important bearing upon it. From the earliest times gold and silver have been used as money, not because there was at the beginning any law declaring them to be money, but because, by reason of their limited and regular supply, their great value as compared with other things in proportion to weight and bulk and their durability, they were more stable and convenient than any other commodity as measures of value in making exchanges. Consequently, these metals were used as money by common consent of the people for centuries before there was any law upon the subject or any coins in existence; they passed by weight, and their values in effecting exchanges were determined by the quantity of pure metal contained in each piece. Each metal had a distinct value of its own,

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and when it was used in trade neither the buyer nor seller troubled himself about the ratio between it and the other metal. The laws of trade fixed and regulated the actual and relative values of both metals in the purchase and sale of other commodities, just as they do now. They had been used as money several centuries before any government undertook, by royal proclamation or statute law, to establish a ratio between them, and, when this character of legislation was first begun, the public authorities did not attempt to establish new values or new ratios, but accepted those already fixed by the laws of trade and the custom of merchants. Coins were made, not for the purpose of attempting to add anything to the intrinsic or exchangeable value of the metal contained in them, but for the purpose of attesting, by public authority, its weight and purity, thus avoiding the delay and uncertainty resulting from the practice of weighing each piece as it passed from one to another. That the coinage of the metals does not now add anything to their actual value in the commercial world, is conclusively proved by the facts that, in all the great transactions between the people of different countries, the coins are accepted only at their bullion value, determined by their actual weight and fineness, and that bullion itself is still used in making payments, just as it was thousands of years ago. Whatever effect legislation upon the ratios, in connection with legal tender laws, may have had upon the use of the two metals in the payment of antecedent debts, it has never had the slightest effect upon the actual or relative values of the two metals in national or international trade. For many centuries, even after the commerce of the world had grown to enormous proportions, the

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propriety of making any given quantity of bullion, or any particular coin, a legal tender was not even suggested, and up to the present time there is no legal tender in international trade. Whether payments are made in gold or silver coins, or in gold or silver bullion, actual intrinsic value determines the amount or quantity to be delivered, no matter what may be the legal tender laws of the different countries, and no matter though they may have the same or different ratios of value between the metals within their respective limits. The law of France, for instance, places a higher value upon silver relatively to gold than is placed upon it by the laws of the United States, the French ratio being 15 ˝ to 1, and ours being 16 to 1; but if 16 pounds of our silver, coined or uncoined, were sent to that country to be used in the payment of a debt or in the purchase of commodities, it would not be accepted at the ratio of 15 ˝ to 1, or at the ratio of 16 to 1 as compared to gold, but only at the ratio of about 32 to 1, which shows that neither our ratio nor the French ratio has any effect whatever upon the value or purchasing power of the metal itself. Coinage is free in Mexico, and the dollar, which is full legal tender, contains 377.17 grains of pure silver, while our dollar contains only 371.25 grains of pure silver; yet Mexican silver dollars are sent into the United States and other parts of the world and sold at the price of the bullion contained in them, which is about one-half their nominal or legal value in their own country. The legal tender laws affect the debt-paying power of the coin itself in the country where the laws prevail, but the laws establishing ratio do not affect the value of the metal contained in the coins either at home or abroad, because it is the metal that fixes the value

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of the coin, and not the coin that fixes the value of the metal.

For a long time, during the early history of the world, and even during the mediaeval age, gold and silver, in bullion or in the form of coins, constituted almost the entire circulation among the people, even in the nations most advanced in trade and civilization, and, consequently, the quantity of these metals that could be procured and kept in use was a question of far greater importance then than it is now or ever can be in the future. When life and property had been made reasonably secure by the establishment of stable governments, and regular processes were authorized for the enforcement of pecuniary obligations, credit or confidence largely took the places of bullion and coin in the commercial transactions of the people, and a much smaller amount of metallic money was required in proportion to the whole volume of business done than had been required before. The use of credit in the form of bank notes, checks, bills, and other evidences of debt has so increased in modern times that in all highly organized commercial communities the use of coin, except in making change, has been almost entirely dispensed with. The percentage of coin actively employed in conducting business in this country is so small that it is almost inappreciable; so small, in fact, that its disuse in our transactions would not be felt if we had a substitute for, or a paper representative of, the subsidiary pieces. In England, France, and some other countries, a larger amount of coin is used, because they have no very small notes.

Although we have the gold standard, or measure of value, in this country, our actual slock of gold bullion

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and coin amounts to only about one-third of our actual currency — a condition of affairs which would have been inconceivable a few centuries ago. We have about $625,000,000 in gold, $397,652,873 in full legal tender silver, $346,681,000 in old United States notes, $149,584,471 in treasury notes issued in the purchase of silver bullion, $209,719,850 in national bank notes, and $76,169,569 in subsidiary silver coin, making in all $1,804,707,763, exclusive of the minor coins, and every dollar of this vast volume of currency is kept equal in value to the "standard established by law, so that every man who receives a silver dollar or paper dollar in exchange for his products, or in satisfaction of a debt, gets just as good a dollar as the man who receives gold. This is the monetary system and this is the financial condition which the advocates of free coinage at the ratio of 16 to 1 now propose to revolutionize at once by a change in the standard of value, so that the whole mass of circulation left for the use of the people would be reduced to about one-half the purchasing power it has now; or, in other words, so that it would require about double the amount of currency that is required now to perform the same service in the exchange of commodities. But the consummation of such a policy would produce results more far-reaching and disastrous than the mere reduction of the standard of value, because, for a long time, at least, credit, which constitutes by far the most important factor in our financial and commercial transactions, would be substantially destroyed by the confusion and uncertainty necessarily following such a great and sudden change in our monetary system.

But it is contended by a large number of the advocates

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of free coinage — perhaps a majority of them — that the effect of their policy would be, not to abolish the present standard of value and substitute the single silver standard in its place, but that it would establish what they call bimetallism and a double standard. I confess my inability to understand what is really meant by a double standard or measure of value; the idea is incomprehensible to my mind, because I cannot conceive how it is possible to have two different legal and authoritative measures of the same thing in use at the same time, as, for instance, a pound weighing sixteen ounces and a pound weighing eight ounces, or only half as much, and both declared by law to be legal pounds. I agree entirely with Gen. Jackson's Secretary of the Treasury, who said, "The proposition that there can be but one standard in fact is self-evident." The proposition to establish and maintain two different measures of value to be in use at the same time, and to be applied to the same things at the same time, embodies a physical and metaphysical absurdity, and this is so evident that the ablest thinkers and writers upon the subject have been at last forced to abandon it. Prof. Francis A. Walker, one of the most distinguished bimetallists in the United States or in the world, in a carefully prepared paper recently published, says:

"But one thing more remains to be said in this connection; that is, in reply to the allegation of the monometallist writers that the course of events in France which has been recited did not constitute a genuine case of bimetallism. If these writers may be permitted to impose their own definition upon us, their contention can to a considerable extent be made good. What

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they say is, that France from 1803 to 1873 did not enjoy the concurrent circulation of the two metals, but only an alternate circulation, now of one and now of the other; and this, they declare, is not bimetallism at all. Therefore, according to their view, there is no great historical instance of the success of bimetallism.

"If, on the other hand, we may be permitted for ourselves to say what we mean and propose by bimetallism, the criticism in question does not touch our case at all. We flatly deny that bimetallism necessarily involves the concurrent circulation of the two metals. There is some reason to believe that the French statesmen of 1803 really expected that concurrent circulation would result; but no bimetallist nowadays makes the concurrent circulation of the two metals in the same country a necessity of that system. If it results only in establishing an alternating circulation, the chief results of bimetallism will still be achieved, as they were by the action of France."

This is intelligible, for we can all understand how it is possible to have an alternating standard and circulation, sometimes gold and sometimes silver, and the monetary history of the world proves that this is just what happens whenever the two metals are freely coined in any country and made full legal tender. Values will always be measured by the kind of money in actual circulation, no matter what the law may declare, and, therefore, if the free and unlimited coinage of silver at the ratio of 16 to 1 should drive out gold and substitute silver and paper redeemable in silver in its place, we should have a single silver standard and actual silver monometallism. Instead of using both gold and silver as we do now in larger amounts than ever before in our history, we should instantly expel the more valuable metal from the country and make

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the other the sole basis of our currency. We have new practical bimetallism — the use of both metals as money; we should have then practical monometallism — the use of only one metal as money. This is neither speculation nor prophecy, but a conclusion based on facts established by the experience of all nations in all ages.

In order to eliminate all irrelevant matter and simplify the argument, allow me to state exactly what the proposition now pending before the people is: It is proposed that the United States, without the co-operation or assistance of any other government, shall provide by law that all the silver bullion, or foreign silver coins, that may be presented at the mints by individuals or corporations, foreign or domestic, shall be coined, at the public expense, into silver dollars, at the ratio of 16 to 1 with gold — that is, that sixteen pounds of silver shall be considered equal in value to one pound of gold, and the weights of the coins shall be adjusted accordingly — and that the coins so made at the public expense shall be delivered to the owners of the bullion, or foreign silver coins, as the case may be, and all the people of the United States, but nobody else, shall be compelled by law to receive them as dollars of full value, in the payment of debts due to them from their own fellow-citizens and from the citizens or subjects of other countries. It is not proposed that the citizens or subjects of other countries, with whom our people trade, shall be compelled to receive these silver dollars in their transactions with us, because that can be done only by international agreement, and our impatient free-coinage friends declare their determination to proceed at once independently of all other governments. All who are indebted to us are, therefore, to have the privilege of

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paying in silver, while all to whom we shall become indebted are to have the privilege of requiring us to pay in gold.

Measured by their purchasing power in the markets of the world, which is the only real test, the relative value of silver bullion to gold bullion is about 32 to 1; that is, it requires in all countries, silver standard countries as well as gold-standard countries, about 32 pounds of silver bullion to procure the same quantity of commodities that one pound of gold bullion will procure, and, therefore, the proposition to authorize the free and unlimited coinage of silver into full legal tender money at the ratio of 16 to 1 means, under existing conditions, that the intrinsic value of the silver dollar shall only be half, or about half, the intrinsic value of the gold dollar. My own opinion is that after we had passed a certain limit the more silver dollars .we coined the less, they would be worth, because the inflation itself would still further diminish their purchasing power. Such legislation by the United States alone would not reduce the value of the gold dollar to any extent whatever, because, as already stated, the value of that metal in commercial transactions all over the world is estimated according to its weight and fineness, and will continue to be so estimated, and consequently the only way in which this country alone could diminish the value of its gold dollar would be to reduce the weight of the pure metal contained in it.

The attempt to coin the two metals without limit as to amount into full legal tender money and keep both in circulation at the same time has been made by nearly every civilized nation in the world and has failed in every one of them. It has failed because in every

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instance it has been found impossible to establish and maintain a legal ratio corresponding at all times with the intrinsic or commercial ratio between the two metals contained in the coins, and because whenever either of the metals was undervalued relatively to the other in the coinage laws it was expelled from the country. England persisted in the attempt for nearly five hundred years and, notwithstanding the enactment of most severe penal statutes against the exportation of coins or bullion, was at last forced to abandon the effort and adopt the single standard. France, in her efforts to keep the coins of the two metals in circulation at the same time, changed the legal ratio between them more than one hundred and fifty times in a single century, and finally, in 1876, finding that gold was leaving her and that in ten years her net imports of silver had amounted to $280,000,000, stopped the coinage of legal tender silver, and for nineteen years the attempt has been abandoned in that country. Many other nations in Europe and other parts of the world have subjected their people to great loss and expense by their adherence to monetary systems based upon the theory that a double standard could be maintained, but in no case have they succeeded in keeping the coins of the two metals in use at the same time, except for very short periods. Our own country is not without experience upon this subject, and the results here were just the same as they have been everywhere else. By the act of 1792, which was our first coinage law, the legal ratio between gold and silver was fixed at 15 to 1, when in fact the true commercial ratio was or soon became about 15 1/2 to 1, and the result of this very small overvaluation of silver in the coinage was that gold went out of

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circulation and we had practically silver monometallism until after the passage of the act of 1834. For the purpose of restoring gold to the circulation, congress in 1834 changed the ratio from 15 to 1, to 16 to 1, and as this was an overvaluation of gold in the coinage, silver left the country, and from that time on until 1878 we had practically gold monometallism, whenever we had any metallic basis at all for our currency.

It would be a useless consumption of time to go into a detailed account of the monetary legislation of this and other countries, or to show at length how it affected the movements and use of the two metals by its repeated failures to conform the legal ratio to the actual commercial ratio between them. The great and important fact conclusively established by the history of that legislation and its effects upon the circulation of the coins of the two metals is, that whenever one of them is overvalued relatively to the other in the coinage laws, with free coinage or coinage upon equal terms, and both are made legal tender, the coins of the undervalued metal will be driven out of circulation and out of use as money in the country where the unequal valuation is made. The reasons for this are perfectly plain. Both being legal tenders, the least valuable coins will always be used in making payments, and will become the measures of value in the exchange of commodities, and consequently the more valuable coins will be hoarded or sent out of the country into a market where their real value will be recognized. Now, as this is just what has always occurred — at least in modern times, when commercial relations between different countries are so intimate and the means of transportation are so rapid and cheap — even when the

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undervaluation or overvaluation amounted to only one or two per cent., I think we are fully justified in concluding that if the United States alone should adopt the policy of free and unlimited coinage of legal tender silver at the ratio of 16 to 1, which would be an overvaluation of that metal to the amount of 100 per cent., all the gold in the country would be immediately hoarded or exported or be held as a commodity by speculators engaged in the business of buying and selling it at a premium. If this should be the result, the free coinage of silver would not for a long time add anything whatever, even nominally, to our stock of money; on the contrary, the immediate effect of such a policy would be a contraction to the extent of fully one-third of our present volume of currency by the expulsion of about $625,000,000 in gold, and it would require more than fifteen years to supply its place with silver dollars, even if our mints coined nothing else.

All who have been or may be induced to give their support to this revolutionary policy, upon the assurance that it will give the country more money for use in the transaction of business, will be greatly disappointed, for they will find, when it is too late, that instead of having more money they will have less, and that it will be depreciated in value besides. The introduction into the currency of a country of any kind of money about which there is the least doubt will always operate to drive out the same amount, or about the same amount, of better money and thus leave the people with substantially the same volume of currency they had at the beginning. The act providing for the purchase of silver bullion and the issue of legal tender treasury notes in payment for it was passed on the 14th day of July,

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1890, and the purchasing clause of that act was repealed November 1, 1893. While it remained in force, United States treasury notes were issued to the amount of $155,931,002, and there were many people who believed that this was making a material and permanent addition to the volume of our currency; but the official records show that during the same time the net exports of gold from this country amounted to $103,419,491, so that the real addition to our circulation accomplished by the issue of near $156,000,000 of new notes was about fifty-two and a half million dollars during a period of more than three years. The mere apprehension that the government would not be able to maintain the parity of the two metals under the policy inaugurated by that act, not only discredited the new treasury notes themselves, but the whole volume of our currency, and gold went out about as fast as the new notes came in, While, therefore, it is not at all certain that free coinage would ultimately make any considerable addition to our circulation, it is absolutely certain that it would give us a depreciated and fluctuating currency, and the question is whether the producers of cotton, wheat, corn, beef, pork, oil, lard, cheese, and other exportable articles will be benefited or injured by such a result. It is an axiom in trade that the prices of exportable products are fixed in the foreign market where the surplus is sold, and are fixed in the currency of that country according to its nominal value there. If sold in England, for illustration, the prices are fixed and paid in pounds, shillings, and pence, and not in dollars and cents, and, consequently, it makes no difference to the foreign purchaser what kind of currency the producer has at home. The character or value of the currency the producer has at home. The character or value of the currency

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in use in the producing country does not affect the price of the article abroad to any extent whatever, for the purchaser there trades in his own market and uses his own currency in measuring values. The establishment of a silver standard here could not possibly Increase the price of cotton or wheat or any other American product in Liverpool, London, Paris, or Berlin, whatever effect it might have upon the nominal price in this country. If our monetary system were so changed that it would require two dollars to purchase here the same quantity of commodities that one dollar will purchase now, it would not affect the value or purchasing power of the English pound sterling, the French franc, or German mark in the least. The only effect would be that the exchange would be doubled, and the pound sterling instead of being worth $4.866 in our currency, as it is now, would be worth $9.732, and when our people wanted to make a remittance to pay a debt abroad they would have to pay twice as much in our money for the same number of pounds as they pay now, while the foreigner who wanted to make a remittance to pay a debt here would pay only half as much in his money for the same number of dollars as he pays now. But the exchange would be in a constant state of fluctuation, just as it has been between Great Britain and India on account of the changes in the prices of silver from day to day; and the American producer would be compelled to pay for the risk taken on account of the fluctuations by receiving a less price for his cotton, wheat, beef, and other articles. The farmers and planters do not export their own products but they sell them at home to somebody else who sends them abroad, and if the exchange is steady and the

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money in which he is to pay for the products has a fixed value relatively to the money in use in the country where he expects to sell them, the purchaser here can afford to pay the highest price that would leave him a reasonable margin of profit in view of the conditions existing in the market abroad. In other words, he has to incur but one risk — the possible fall in the price of the products abroad; but if the currency here is depreciated and fluctuating, if our money has no fixed and certain value relatively to the money in use abroad where he expects to sell the products, there is an additional risk to be incurred which will have great influence in determining the price he can afford to pay the producer. In addition to the risk of a fall in the price of the products abroad, he must incur the risk of a rise in the price of silver between the time of his purchase and the time when he receives the proceeds of his sale, for if silver rises in the meantime he may not get back as many dollars as he paid out. The producer must pay for both of these risks by receiving a smaller price for his commodities, and hence his prices will never increase in proportion to the actual depreciation of the money in which they are paid. To illustrate my meaning, when silver is worth 60 cents per ounce, the bullion contained in a silver dollar is worth 46.4 cents, but if the price of silver should advance to 62 cents per ounce, the value of the bullion contained in a silver dollar would be 48 cents — an increase of over 3 per cent. Now, the price of cotton or wheat will not rise in proportion to the depreciation of the dollar in which it is to paid; that is, the purchaser for export will not pay for it at the rate of 46.4 cents for each dollar when silver is worth 60 cents an ounce, because he knows that

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silver may rise to 61 or 62 cents per ounce before he can sell the product abroad and get his money for it, and he knows that if this happens the gold he receives abroad cannot be exchanged for as many silver dollars as he paid the producer here. He will not take all this risk upon himself, but will compel the producer to bear it by receiving a less price for his cotton or wheat; and this argument applies with equal force to all other articles. It is impossible to estimate accurately the amount of loss which this would inflict upon the American producers of exportable products, but it would undoubtedly be very great, as the value of our exports of domestic merchandise is nearly $870,000,000 per annum, and a small percentage upon this large sum would very materially affect the incomes of our producers.

It is argued that the existing standard of value ought to be abandoned because since 1873 prices of commodities have fallen, and will continue to fall, if the standard is maintained, so that it has been, and will continue to be, more and more difficult each succeeding year to pay debts; that this fall in the prices of all commodities is attributable to the appreciation of gold, and that the appreciation in the value of gold has been caused by the alleged demonetization of silver in Germany in 1871 and 1873, the omission of the standard silver dollar from the coinage of the United States in 1873, and the suspension of the coinage of silver by France in 1876. It is true that the prices of many things have fallen since 1873, but it is true, also, that the prices of many things had fallen long before that date. The assertion that the fall in prices since 1873 is due to the appreciation of gold alone is based upon the assumption that the relations between supply and demand have not

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changed, that there has been no diminution of the cost of production and distribution, that the facilities for affecting financial exchanges have not been improved, and, in brief, that the world has made no progress in the conduct of its industrial and commercial operations for more than twenty years. This assumption is so inconsistent with well — known economic and historical facts that it seems scarcely worth while to give it a serious consideration. Reductions in the prices of commodities are generally due to so many different causes that it, is scarcely ever possible to ascertain the extent of their separate influences. I presume, however, that even the most ardent advocate of free coinage would be willing to admit that the invention and use of labor-saving machinery, the extension of our railroad systems, the improvement of our water-ways and the great reductions if. the rates for carrying freight, the employment of steamships, the use of the telegraph on the land and under the sea, the application of electricity in the production of light, heat, and power, the utilization of by-products which were formerly wasted, the introduction of more economical methods in the processes of production, the wonderful advance made by our laborers in skill and efficiency, the greatly reduced rates of interest paid for the use of capital, and many other things which it would require much time to enumerate and explain, have affected prices in some measure, at least, and yet they ignore all these great influences in their argument upon the subject and attribute the lower prices of commodities to a single alleged and inadequate cause — the appreciation of gold. I presume, also, that our free coinage friends will admit that if the change in prices has been caused entirely by the appreciation

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of gold, the reduction would have affected all things alike, because it cannot be denied that, in the absence of other influences, gold must bear the same relation to the price of one article that it bears to the price of another. But we do not find that the prices of all things have been reduced in the same proportion, nor do we find that the prices of all things have in fact been reduced. A very few illustrations will serve to show the weakness of the contention that the decline is due alone to the appreciation of gold.

In 1891, 1892, and part of 1893 I had the honor to serve on a sub-committee charged by the senate of the United States with the duty of ascertaining the course of prices and wages of labor for as long a period as authentic records would enable us to embrace in our investigation, and, after a most thorough and impartial examination of the subject, a report was made which fills four large volumes and embodies a mass of information upon these subjects which cannot be found in any other official form. As to the course of prices and wages the committee was unanimous, though there were differences of opinion among the members as to the causes that had from time to time produced the changes. The prices of many articles and the wages of labor in many occupations were ascertained during each year as far back as 1840, and for the purposes of comparison the prices of commodities and the wages of labor in the year 1860 were adopted as the standard. The sufficiency of the reasons for selecting that year rather than any other will not, I think, be questioned. There were no great financial or other disturbances during that year, business was in a normal condition in all parts of the country, no changes had been made in the monetary

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systems of the world for many years, the United States was using gold as the measure of value, just as it is now, except that there was no legal tender silver in circulation as there is now, the people were prosperous and the prices of commodities and the wages of labor were fairly adjusted with relation to each other. At the time when this investigation was made all the legislation in regard to silver now specifically complained of had been accomplished, and if prices or wages had fallen there was as much reason to attribute the reduction to that legislation then as there is now. Ample time had been afforded for its affects, if it had any, upon prices and wages to be felt, and the fact that the investigation was not made for the purpose of influencing legislation upon the silver question adds to the value of its results.

In the first place, the committee unanimously selected 232 articles in common use which it was agreed constituted the great bulk of the consumption and expenditures of the people, and these articles were separated into eight classes or groups; that is, clothes and clothing, fuel and lighting, metals and implements, lumber and house-building materials, drugs and chemicals, house-furnishing goods, and miscellaneous commodities. It was found that the prices of articles used for food, taking them altogether, had fallen less than 10 per cent. since 1873, while the prices of clothes and clothing had fallen 32 per cent.; fuel and light nearly 24 per cent.; metals and implements, 35 per cent.; lumber and building materials, nearly 20 per cent.; drugs and chemicals, 31 per cent.; house-furnishing goods, 27 per cent., and miscellaneous articles, 10 per cent. The prices for the year 1860 being taken as the standard were represented by 100, and increases and

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decreases were shown by deviations from that number up or down, as the case might be. The investigation showed that at the time it was made articles of food stood at 103.9, or nearly 4 per cent. higher than in 1860; clothes and clothing at 81.1; fuel and lighting at 91; metals and implements at 74.9; lumber and house-building materials at 122.3; drugs and chemicals at 86.3; house-furnishing goods at 70.1, and miscellaneous articles at 95.1. These results of the investigation establish three facts which have an important bearing upon the present controversy. The first fact established is that the prices of articles of food which are the products of the farms, gardens, orchards, and dairies of the country, were about 4 per cent. higher than they were in the year 1860, long before the silver legislation now complained of; the second is, that the fall in the prices of these farm products since the year 1873 has been much less than the fall in the prices of the commodities the farmers have to buy; and the third is, that the reductions in prices have not been uniform, either as to particular articles or groups of articles, and therefore cannot be attributed to one and the same cause — to the appreciation of gold, for instance. The conclusion is inevitable that various influences have operated to produce these changes in prices, some affecting one group of articles and some another and doubtless some affecting all, but to no one influence can the whole result be attributed. Cotton and wheat are the commodities most frequently referred to by those who contend that the fall in prices is due to the appreciation of gold, but there is nothing whatever in the methods of producing those articles, or in transporting or selling them, or in the character of the

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money received for them, which would make the appreciation of gold affect their prices more than it would affect the prices of other commodities produced by our .people. In addition to the various causes which have more or less affected the prices of all articles, the prices of these two products have been seriously affected by the enormous increase in their production since the year 1872, which was the last crop year preceding the legislation in regard to silver. The production of cotton in this country in 1872-'3 was 2,974,351 bales, containing an average of 439 pounds net weight, while the production in 1893-'4 was 7,549,817 bales, containing an average of 474 pounds net weight, or an increase of nearly 200 per cent. in this country alone, besides the great increase that has taken place in competing countries; and in 1894-'5 the production here was much larger, being nearly 10,000,000 bales. According to the statistics of the agricultural department, the production of wheat in this country in 1872 was 249,997,100 bushels, and in 1894, 460,267,416 bushels, or nearly twice as much, and there has also been an enormous increase of production in competing countries. But, notwithstanding the great increase in the production of cotton and wheat, here and in other countries, and the consequent decline in their prices, a given quantity of either of them will now purchase in our own markets and in the markets abroad a larger share of many other useful commodities than it would have purchased in 1872 or 1873, so that, in fact, as compared with many other things, the values of cotton and wheat have appreciated.

The one thing which has been less affected by the changes in the relation between supply and demand, by

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improvements in the methods of production and distribution and by the other influences which produce fluctuations in prices of commodities generally, is labor, and it is by far the most important single source of income possessed by our people, a much larger amount being expended every year in the payment of wages than for any other one purpose. The cost of labor in the manufacturing and mechanical industries alone during the census year 1889 was $2,283,216,529, which was nearly two and one-half times the value of all the wheat and cotton produced in this country; and if we add to this the amounts paid for farm labor, for clerical and other work in mercantile establishments, for domestic service and for work on railways of all kinds, on water craft, on streets and other improvements in the cities, and in the many other occupations which give employment to our people, we would have a sum almost, if not quite, equal to the value of all our agricultural products. It is evident, therefore, that if the alleged depreciation of gold alone has caused a reduction of prices, the wages of labor, the greatest commodity in the market, should have fallen since 1873; but exactly the reverse is true. The investigations of this subject by the sub-committee covered a period of fifty-two years and embraced all the occupations in which our people were engaged, and the fact, unanimously found, was that, although eighteen years had elapsed since the silver legislation, the wages of labor were higher than in 1872 or 1873. Wages were found to be nearly 61 per cent, higher than in 1860, which was thirteen years before the silver legislation, and more than eight per cent, higher than in 1873, when that legislation was adopted.

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The argument that the reduction of prices is due to the appreciation of gold is necessarily based upon the further assumptions that the legislation in regard to silver has produced a scarcity of redemption or metallic money in the world, and that prices are fixed and regulated by the amount of such money in circulation, or available for circulation. Neither of these assumptions is justified by the facts. The most exhaustive efforts have been made from time to time by the treasury department, through the Director of the Mint, by careful examinations of the monetary statistics of other countries, by correspondence with our diplomatic and consular representatives abroad and with foreign financial authorities, and otherwise, to ascertain the actual amount of gold and silver used is money in the world, and the result shows that there is now more gold and silver in the aggregate, and more of each one of them, in use as full legal tender money than there ever was at any other time in the history of the world. The gold in use as money amounts to $3,965,900,000, the full legal tender silver amounts to $3,435,800,000, and the limited legal tender silver amounts to $619,900,000. The policy of maintaining, or rather attempting to maintain, the so-called double standard never succeeded in keeping so large an amount of full legal tender silver in circulation in the world as there is at this time, and one of the principal reasons for this is that the effect of the policy was to drive first the coins of one metal and then the coins of the other into the coffers of the hoarders or into the melting-pots, because they were undervalued in the coinage laws and would not remain in use as money.

I attach very little importance to the per capita

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argument, because the amount of currency required in a country depends mainly upon the volume of business to be transacted and the customs of the people in conducting their exchanges, and not at all upon the number of men, women, and children residing in it, but, as there are a great many who believe that the circulation should be regulated by the census returns, it may be worth while to state that the production of gold alone in 1890 — and it is much larger now — was nearly two and a half time greater than the average annual production of gold and silver both during the decade which closed with the year 1800. In 1800 the population of all the countries in Europe and America was 197,505,895, and the production of both gold and silver amounted to $24.49 for every hundred inhabitants, while in 1890 the population of the same countries was 466,789,341, and the production of gold alone was $118,849,000, which amounted to $25.46 for every hundred inhabitants, or ninety-five cents more for each hundred people than was furnished by both metals during each year in the former decade. In 1894 the population of these countries was 485,180,841, and the production of gold alone was $157,228,000, being $32.41 for each hundred inhabitants, or $7.92 more for each hundred people than the total of both metals during the last decade of the last century. If, therefore, the people of Europe and America had used as money all the gold and all the silver annually produced in the world one hundred years ago, they would not have received as large a per capita addition to their stock of money as they would receive now by adding the gold alone. In view of these facts, I submit that the silver legislation of 1871, 1873, and 1876 has not diminished

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the world's supply of metallic money as compared with former times and prevented the single gold-standard countries from making as great an annual addition to their stock of metallic currency.

Official monetary statistics show that in the gold-standard countries of the world the stocks of money are much larger per capita than in the silver-standard countries. Taking the large gold-standard countries and the large silver-standard countries, it appears that in 1894 the stock of money in the United States was over $25 per capita, in the United Kingdom nearly $20, and in Germany nearly $19, while in Mexico the per capita was $4.71, in Russia and Finland $8.32, and in China $3.26. The gold-standard countries use large amounts of silver as money, but the silver-standard countries use no gold as money, and cannot do so for the reasons I have already endeavored to explain. But for the reasons already stated, the commercial nations of the world do not now require the same proportion of metallic money in the transaction of their business that they required a few centuries ago, or even one century age. Credit has been vastly extended and the use of paper in the form of notes, checks, and bills has almost entirely displaced metallic money in the daily business of the people, and as long as these forms of credit are kept equal in value to the metallic standard, the effect upon the prices of commodities is precisely the same as if the whole volume of circulation consisted of standard coin, for, as long as equality in their value can be maintained, the paper representatives of the dollar perform exactly the same office in the exchange of commodities that gold dollars themselves would perform; but if this equality is

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destroyed, the paper is discredited, its purchasing power is diminished, and the people have no longer a stable measure of value.

One of the most effective arguments made by the advocates of free coinage, in some parts of the country at least, is that the people are in debt, and that it is the duty of the government to relieve them by such legislation as will enable them to procure cheap money for the purpose of discharging their obligations, and in support of this argument the most exaggerated statements are made as to the depressed and suffering condition of our farmers, wage-earners, and other producing classes. This argument concedes that under the proposed system of free coinage at the ratio of 16 to 1 all the various kinds of currency in use by the people, including the silver dollar itself, would be worth less than it is now, for, of course, if this is not to be the result money would be no cheaper than it is now. To assert that the people are in debt is simply to say that they have traded with each other on credit, that one part of our fellow-citizens, relying upon the integrity and financial standing of their neighbors and acquaintances, have lent them money on time and sold property to them without demanding immediate payment in cash, and that in this way they have enabled many people to carry on a useful business and live in comfortable homes who otherwise could not have done so. If it is a crime to lend money to a man who wants to borrow it, or to sell property on credit to a man who wants to purchase it, and has no ready money to pay for it, let the perpetrators be properly punished, but let us not involve the whole country in confusion and disaster and immolate the innocent and guilty alike in order to punish

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the real offender. If our people are in debt they owe each other, and, consequently, about as many would be actually injured as would be apparently benefited by scaling the obligations down to a silver standard. The indebtedness of the farmers, mechanics, and other laboring classes of our people, although large in the aggregate, is quite small in comparison with the whole indebtedness of the great railroad and manufacturing corporations, the national and state banks, savings institutions, trust companies, insurance companies, building associations, and other organizations engaged in financial and commercial enterprises. These various organizations are indebted to the people to the extent of many billions of dollars, and while it is true that many of the people are also indebted to them, their debtors and creditors are not the same persons, and, therefore, the debts cannot be set off against each other and extinguished in that way. I deny that there is any such thing as a distinct "debtor class" in this country, for, while nearly every one owes some debts, large or small, nearly every one has also some debts owing to him; in other words, he is both debtor and creditor The laboring people, as a general rule, owe very little at any one time, while their employers are always indebted to them, because wages are not paid in advance; and besides, many of them have small deposits in savings and other banks, in trust companies, in building associations, and large numbers of them have their lives insured for the benefit of their wives and children, and consequently they are creditors of the banks and the insurance companies. The savings-bank depositors in this country last year numbered 4,777,687, and the wives and children of the depositors

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who depend upon these accumulated earnings for future support doubtless numbered 10,000,000 more. There were 1,925,340 depositors in the national banks last year, and 1,724,077 of them had deposits of less than $1,000 each, while state and private banks and loan and trust companies held deposits for 1,436,638 people. Our life insurance companies, to say nothing of companies insuring property against loss by fire and otherwise, had 7,505,870 policies outstanding last year, upon which the premiums had been paid, or were being paid, by the people, and the mutual benefit and assessment companies had 3,478,000 members. The building and loan associations had nearly 2,000,000 members, all of whom had paid their money in as required by the rules of the body to which they belonged. Here, then, are about 21,000,000 of our people, generally poor, or at least people of moderate means, who have given credit to these great corporations and companies, and, in my opinion, it would be a grievous wrong to adopt any policy which would deprive them of the legal right to demand and receive just as good money as they parted with when they made the deposits in the banks or paid the premiums on their insurance policies. The hard-earned savings of the poor ought not to be sacrificed to the avarice of the wealthy mine-owners or the ambition of aspiring politicians, and if the people who have a substantial interest in the welfare of the country and a just appreciation of their responsibilities as citizens will exert their proper influence in public affairs this great wrong can never be perpetrated.

It is not my purpose to discuss here the various propositions which have been made from time to time for the improvement of our banking system, or for the

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retirement of United States notes, because the questions involved in them are so important and so large that they cannot be properly considered in connection with the subject to which I have addressed myself. We have an abundance of money in this country for all the purposes of trade, and the disturbances and hard times of 1893 and 1894 were not caused by a scarcity or contraction of the currency, but by a contraction of credit resulting from a loss of confidence in the stability and value of our currency. So far as the mere volume of our currency is concerned, we had then and have now an ample supply for all necessary purposes, but under the existing system it is not properly distributed and is not sufficiently elastic to meet all the changing requirements of business at different periods of the year. The United States should go entirely out of the banking business by the withdrawal of its arbitrary and compulsory issues of notes and afford the people an opportunity to supply their own currency based upon their own means and credit, thus enabling every community to utilize its own resources when necessary and adjust the circulation from time to time to the actual demands of legitimate commerce. In what way this shall be accomplished is a question which has already engaged the serious attention of the people and public authorities, and it will no doubt continue to be investigated and discussed until a plan is formulated which, if not perfect, will at least have the merit of being a great improvement upon the existing system. In the meantime our highest duty is to preserve the present standard of value, maintain the parity of the two metals, and keep all the money in circulation among the people, whether it be gold and silver coins, or paper based upon them,

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equal in purchasing power, so that no discrimination will or can be made between those who receive silver or paper and those who receive gold. A great government should do nothing to discredit its own obligations or diminish the value of the money in the hands of its citizens, nor should the people of a great country ever consent to the adoption of a policy, through experimental financial legislation or otherwise, which would vitiate the obligations of their contracts, interrupt the regular course of their business and destroy the foundations upon which their industrial and commercial systems have been constructed. The spirit of conservatism is still strong among our people, and, notwithstanding the delusive promises and selfish appeals that are now largely influencing their opinions in some parts of the country, the truth will ultimately prevail and I have no doubt of the result when the time for final action comes.

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Chapter XXIX. — Carlisle's Speech Critisized — by Gov. B. R. Tillman, of South Carolina.

I shall in what follows offer some criticisms, and arguments in answer to the speech made by Secretary Carlisle at Memphis, Tenn., May 23, 1895. I do this because that speech has been circulated throughout the country, and stands as the accepted creed of the gold monometallists, and the ablest defence of the policy now pursued by our government.

The vital nature of the issue is clearly stated by Mr. Carlisle, when he says:

"I do not think the importance of the question can be overestimated or that the gravity of the situation can be overstated. The proposition to revolutionize our monetary system and thus destroy the credit of the government and the people at home and abroad, violate the obligations of all contracts, unsettle all exchangeable values, reduce the wages of labor, expel capital from our country and seriously obstruct the trade of our people among themselves, and with the peoples of other countries, is one which challenges the intelligence, patriotism and commercial honor of every man to whom it is addressed."

There are millions of our fellow Citizens who no doubt honestly believe this indictment so strongly drawn against the advocates of bimetallism to be true in every particular. There are other millions, — a great

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majority of the American people, — I firmly believe — who feel that instead of impending disasters, the bolts have already fallen: and that our monetary system has already been "revolutionized"; that the credit of the government has been so far "destroyed" that $162,000,000 of bonds were deemed necessary in time of peace to bolster it up and others must follow. That the credit of the people at home has been so injured, the obligations of contracts so violated, all values so unsettled, so much more of labor or of the products of labor are necessary to buy a dollar with which to pay debts, that bankruptcy stares all debtors in the face, while millions have already been pauperized by this "monetary revolution." That this struggle to lift mortgages is hopeless under existing conditions, and the savings of all previous years of labor must be lost. We know there are millions of workers out of employment. We know the farmers of our land are selling their crops for export at less than the cost of production. Can the condition of the country be made more desperate? Will the restoration of silver to its constitutional place as a money of final redemption increase our ills?

Is the country about to be ruined, or is it already ruined? Are we threatened with a "spring of wars unnumbered" from a return to the bimetallic standard, or will it give us relief from a well-nigh unbearable situation?

Mr. Carlisle contends that the country cannot and ought not retrace its steps. Let us examine his arguments. We will find some remarkable cases of self-deception or contradictions.

He says:

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"From the earliest times gold and silver have been used as money, by common consent of the people for centuries before there was any law upon the subject or any coins in existence. The laws of trade fixed and regulated the actual and relative values of both metals in the purchase and sale of other commodities just as they do now. They had been used as money several centuries before any government undertook to establish a ratio between them, and when this character of legislation was first begun the public authorities did not attempt to establish new values or new ratios but accepted those already fixed by the laws of trade and the custom of merchants. Coins were made not for the purpose of attempting to add anything to the intrinsic or exchangeable value of the metal contained in them, but for the purpose of attesting by public authority its weight and purity."

So far it is the statement of fact as attested by history. But listen to the "lame and impotent conclusions" deduced from it:

"That the coinage of the metals does not now add anything to their actual value in the commercial world is conclusively proved by the facts that, in all the great transactionsbetween the people of different countries, the coins are acceptable only at their bullion value, determined by their actual weight and fineness, and that bullion itself is still used in making payments, just as it was thousands of years ago. Whatever effect legislation upon the ratios, in connection with legal tender laws, may have had upon the use of the two metals in the payment of antecedent debts, it has never had the slightest effect upon the actual or relative values of the two metals in national or international trade. * * * *

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The legal tender laws affect the debt-paying power of the coin itself in the country where the laws prevail, but the laws establishing ratio do not affect the value of the metal contained in the coins either at home or abroad, because it is the metal that fixes the value of the coin and not the coin that fixes the value of the metal."

This statement is utterly at variance with the facts.

Only one of the metals — gold — is being coined now in any of the great commercial countries, and when we remember that for hundreds of years the coinage of the two metals at the mints of Europe and America kept the ratio approximately at 15 1/2 to 1 it is astounding to be told that the "coinage of the metals does not add anything to their actual value in the commercial world." Can any sane or honest man believe that the free coinage of gold and the interdict against silver being coined have had no effect on the relative value of the two metals? Is the experience of mankind for ages and the teachings of history to go for naught against the dictum of a financial doctrinaire who has argued with equal ability on both sides of this question, even in the speech we are considering? If the coinage of one metal and the failure to coin the other do not affect value, why do the advocates of the gold standard object so strenuously to restoring to silver its right of coinage. Will any one assert that if gold and silver could swap places, making silver the standard of value with free mintage, and gold the commodity, that present ratio of the metals would not be reversed and a silver dollar be worth one-eighth of a gold dollar instead of one-thirty-second part? In twenty-two years the coinage laws and nothing else

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have raised the value of the gold dollar to double its normal value both as compared with silver and with all other kinds of property.

The ratio between the metals will settle itself when the mints of the world are opened to the two on equal terms, and as experience and custom among men had made the ratio about 15 1/2 to 1 for thousands of years. We can justly claim that the interference of governments by their coinage laws for the advantage of gold and to the discredit of silver has had everything to do with the relative value of the two at this time, and Mr. Carlisle's assertion to the contrary is proved to be untrue. In this connection I assert as an historical fact that the ratio between the metals as bullion in the marts of trade never deviated from the ratio fixed by law for coinage more than 1 per cent, until the mints were closed to silver.

Mr. Carlisle next discusses the question of standards and satisfies himself and his followers, no doubt, that actual bimetallism is an impossible attainment except by and through the single gold standard now existing. In a word one metal must be redeemable in the other and be denied further coinage to obtain bimetallism. Bimetallism, honest, real bimetallism, means the unlimited coinage of both metals on the same terms into primary money at some fixed ratio, no matter what; though the experience of ages had settled on 15 1/2 to 1 as about the right proportion, Whether the two circulate at the same time in a given country or first one and then the other shall be its metallic currency, makes no difference. Honest bimetallism means the use by the nations of the earth of $7,500,000,000 gold and silver, the world's entire stock, as primary money with

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which business may be transacted and debts paid. Dishonest bimetallism means the use of just half that much of gold money and the shrinkage of values to correspond to the change of standard, and the reduction in the volume of legal tender.

The struggle among the nations of the world to obtain gold is what has doubled its price or value. The demand has been great because it is the only standard of value, and has the right of way to the mints — is actual money by lawand the supply being limited and inadequate, it has continued to rise, requiring an increased amount of silver and all other commodities to buy a given quantity of it. Bimetallism — the double standard — coinage into primary money on terms of equality of both metals can alone restore to the world its lost prosperity. The double standard — the circulation on terms of equality of both metals, as Mr. Carlisle contends, may be impossible of attainment in any one country for long without international agreement, but the business relations existing between the nations of the earth are so close and sensitive, that the price or value of both depends on the mintage of both. Bimetallism does not mean the simultaneous circulation of both in a given country, but the right to coinage of both. Whether gold or silver shall then circulate in a country will depend, as Mr. Carlisle himself says, on its coinage laws. I quote from the Memphis speech:

"With free coinage or coinage upon equal terms, and both are made legal tender, the coins of the undervalued metal will be drawn out of circulation and out of use as money in the country where the unequal valuation is made."

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In other words the ratio between the metals in coinage determines which metal shall circulate. But both will not circulate if either is undervalued unless one is denied coinage. Our silver dollars — derisively called "fifty-cent dollars" now circulate side by side with the hundred cents gold dollar — "practical bimetallism" Mr. Carlisle calls it. But one is the slave of the other. They are both "fiat money" and it is the stamp of the government which gives them a money value. The greenback paper dollar — also "fiat" — circulates too. It is worth one hundred cents because it is redeemable in "coin," gold or silver. Melt the gold and silver dollars into bullion — the gold is still worth one hundred cents but the silver is only worth fifty. The gold may go to the mint and be recoined; the silver becomes a commodity, and may not be coined now in the United States, yet Mr. Carlisle tells us we have "practical bimetallism," and also the only bimetallism that is possible!

The difference between the two, the false and the true bimetallism, as well as the sophistry which seeks to prove that gold has not appreciated in value, which is the reason for the fall in prices and hard times, can need no clearer exposition. To illustrate more fully however: The paper dollar is money because it is a promise to pay a dollar on presentation "in coin." The silver dollar is a dollar, a coined dollar, as is the gold dollar, and neither represents anything but itself. They are primary money. But the silver dollar is no longer worth one hundred cents as bullion because silver has been demonetized in this country and Europe. Demonetized how? "By the laws of trade and the custom of merchants?" No, by law or royal edict.

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The greenback dollar is a dollar — legal tender for debt whether it is worth one hundred cents in coin or not by decision of our supreme court. The silver dollar is not a promise to pay, but holds its value because of its stamp. The gold dollar is a dollar at all times and in all shapes because of its right to coinage under the law, and yet Mr. Carlisle says that "Legislation has never had the slightest effect upon the actual or relative values of the two metals in national and international trade." How could an honest man make such a statement?

We are next told that should the United States restore the free coinage of silver without similar action by other countries, all our dollars in circulation would become fifty-cent dollars because that is the commercial value now of the silver in a dollar. Our old greenback friend — the stay and prop of the Union during the civil war — must of course fall to the level predicted for his white brother. "The laws of trade and the customs of merchants" — in spite of legislation, which I have shown has such a marked effect on the ratio or relative value of the two metals will drive the price of the silver dollar and the greenback both lower than greenbacks ever fell except for a brief period during the darkest hours of the war, when Confederate successes made the preservation of the Union doubtful, — though the population of the dis-United States was then only 32,000,000 in sound members and 9,000,000 of these were in the seceded states and the amount of greenbacks in circulation was $1,640,000,000. The yellow dollar will again disappear from among us as he did in 1861. We are now a united people of 70,000,000; we are at peace. Yet we are gravely told by the Secretary of the Treasury,

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the leading fiscal officer of the richest and greatest nation on the earth, that we are at the mercy of the "laws of the trade and the customs of merchants" in other countries; that our people are bound by the Shy-locks of Europe and must submit, that we dare not act independently and emancipate ourselves from the grinding thraldom!

Shade of Washington! who led 3,000,000 into the light of liberty and independence! Shade of Jefferson! author of the immortal declaration of the 4th of July, and first of Democrats! Shade of Jackson! hero of New Orleans and destroyer of the plutocracy which sought to enslave the people of the republic in its infancy! Shade of Lincoln! typical American, who sprung from common people, loved them with the vearning love of a mother and warned them of this very danger! — have we sunk so low? Must this great country await the nod and beck of the aristocracies of Europe? Must our idle millions continue to beg for work and go hungry or join the army of tramps and beg for bread. Must tens of millions of farmers continue to

"Lower buckets into empty wells
And grow old in drawing nothing up,"

receiving no reward for their labor because the "idle owners of idle capital," here and in Europe, have decreed the destruction of one of the money metals of the world and their own government is too cowardly to strike off the shackles of foreign dictation and restore the money of the constitution?

Can any sane man be made to believe that it is possible for Mr. Carlisle's prediction to come to pass?

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That with our increased population and wealth we are so dependent on other peoples that we cannot, dare not, act independently in a matter of such vital moment? Are we indeed so insignificant a factor in the world's affairs that we must pay tribute to British greed and await the permission of Rothschild and his guild of bankers to remonetize silver? Where were Rothschild and his bankers during the civil war? Did they come to the assistance of our government then? Of what use was the Declaration of Independence any way?

One's indignation grows weary at the cowardly truckling to British masters, but we are dealing with argument and not invective and must return to this astounding proposition from Mr. Carlisle's speech:

"All who are indebted to us are, therefore, to have the privilege of paying in silver, while all to whom we shall become indebted are to have the privilege of requiring us to pay in gold."

Suppose silver restored to coinage and as a result gold disappears or goes to a premium of two to one, will the above statement or prediction come true? Bear in mind that nobody owes us but that we are the debtors and that nearly all our exports are agricultural products. In another place Mr. Carlisle says:

"It is an axiom in trade that the prices of exportable products are fixed in the foreign market where the surplus is sold and are fixed in the currency of that country according to its nominal value there."

Well, it will follow as a matter of course that at home or in the country where produced, these, articles

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are to be priced in the home currency. Then if it should happen as we are told that the remonetization of silver by this great and rich country should have no effect on its value in the markets of the world and all our dollars really become fifty-cent dollars away from home, then this would be the result.

The price of every thing we export would double in the home market while remaining as at present in the European or gold markets, while what we import would cost the same it now does in the foreign markets and would sell for double at home. Our silver dollars would weigh as bullion and be fifty-cent dollars abroad and at home. But we export more than we buy and hence would send no money to pay but would exchange products just as we do now. Wheat would be worth one dollar a bushel in the United States and sell for fifty cents in gold in Europe. Cotton ten cents in New York and five cents in Liverpool and so on, through the list of exports.

Would that hurt the American farmer? "But the exchanges, the fluctuations!" exclaims Mr. Carlisle. "The producer must pay both these risks," and he attempts to show that the farmer would not get as good prices for his product as he does now when the gold standard makes no difference among gold-standard countries and exchange rises and falls only between silver-standard countries as silver goes up or down. The reply is the farmer can stand it and will thank God for the chance. But silver will be constantly rising instead of falling as it has been for twenty years and would soon reach the old ratio. The argument can have no weight with any farmer who owes a debt and compares his ability to lift the mortgage with wheat at

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50 cents and wheat at $1 a bushel. Mr. Carlisle grieves, or seems to grieve, because the Englishman could then send over to us his 50 cents' worth of silver equal to a dollar to pay a dollar debt with. While the farmer grieves because he now has to a send a dollar's worth of wheat and gets back only 50 cents in gold to pay his debt. Let those who owe us pay the silver dollar then, and let us pay our foreign creditors in gold — 50 cents' worth of it — or give two dollars or one. That is what we now do in effect on all we buy from them. Our debts in Europe are not a hundredth part of the debts we owe at home, and cannot pay at the present prices of our products. International exchanges are as nothing compared with our local and interstate commerce.

But let us see. We owe Europe a large amount and have to send the interest over annually. The balance of trade in our favor pays most of this but the rest is paid in money. Some of the bonds are gold bonds, but most of them are "coin" bonds, and hence a dollar in silver or gold is legal tender for either principal or interest. This interest is now paid in gold only and is in effect a double interest, and it is hard to understand why the government of a debtor nation, and that nation the greatest producer of silver, should pursue a policy which lowers the price of silver and impoverishes its agricultural classes. If that interest is paid in silver instead of gold, the silver dollars under the "parity" policy of our government are exchangeable for gold and are worth only 50 cents otherwise, and the practical effect is to require $2 worth of products to pay $1 of interest. This will be clearly understood if we suppose silver remonetized and coined at the ratio of 16

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to 1. According to Mr. Carlisle the silver dollar would then be worth only 50 cents, yet it would still pay the same interest it pays now. It is clear then that under the gold standard policy now pursued we are paying double interest on all our bonds held in Europe, and that is why England will never consent to remonetize silver by international agreement.

But Mr. Carlisle calls this proposition "Repudiation," "National dishonor!" It is neither. The bonds are "coin" bonds just as all United States bonds and greenbacks are payable in coin. Silver and gold are both coin when stamped as dollars. Where, then, is the dishonesty in paying what we promised? "It is so nominated in the bond," and no fair or honest man can complain. When Shylock was offered his money he demanded the pound of flesh also. He lost both in consequence. The Shylocks of our day have learned to bribe the rulers and judges so that they get both money and flesh. The demonetization of silver gives it to them. And the "Daniel come to judgment," at Memphis, is now hailed by the tribe of Rothschild with,

"O, noble judge! O, wise and upright judge!"

The demonetization of silver was once denounced as the "Crime of 1873." Its remonetization now on the same authority would be an "experiment" wrought with disaster. The talk about "parity," "sound money," and commercial honor are mere catch words to deceive the people and keep them bound hand and foot while the toiling millions of producers are robbed annually of hundreds of millions.

The entrance to Dante's Hell had over it:

"Who enters here leaves hope behind."

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The peopid of the United States were led by traitors into that dark portal in 1873. They have tried in vain ever since to retrace their steps and get out. Mr. Carlisle tells us it would be a most disastrous experiment to return to the upper world where the sun of hope and prosperity is shining. He last year proposed to lock the door behind us by the issue of gold bonds and it is still his purpose to aid the president in forcing the country onward and downward in the path of ruin.

"International agreement" was not deemed necessary by those who sneaked the demonetization act through congress in 1873. The United States led off in that "crime against humanity." This country dealt the first blow and forged the first link in the chain which binds her a captive to Mammon. It is cowardly to do wrong alone and they cry out for help to do right. Our own people are the greatest sufferers. They will be most benefited by the restoration of silver. England did not affect the price of silver or destroy the ratio of centuries till the United States led off in support of the British scheme of demonetization adopted in 1816. France is the friend of the white metal and would act immediately if we set the example. It is idle to ask or expect English co-operation. Mr. Gladstone said in a speech in parliament two or three years back (I quote the substance not the exact words): "It would be an inestimable blessing to the people of the world if silver were restored as money, but England cannot afford the specific. It means an annual gift to the other nations of the world of $500,000,000!"

Does anybody expect England to surrender so large a sum of her own free will? It is useless, then, to talk

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of international agreement; and to wait for it means to wait forever. We may turn our faces to the wall and bid adieu to any hope of prosperity. We have ignored the teachings of history and the experience of mankind and entered on a dismal experiment. So far from bimetallism — a restoration of silver to coinage — being an experiment; it was the fixed policy and custom among nations during all past ages. It required all of both metals to supply the world with primary money, and the policy of redeeming one or the other has existed for twenty-two years only.

To sum up: It has been shown, 1, That legislation, the laws governing coinage and refusing to silver the right of mintage is alone responsible for the change in the ratio between the metals and the fall of silver; 2, that the destruction of silver as a standard or primary money has produced the shrinkage in values and the fall in prices. Under the well-established rule that supply and demand control prices — money yields obedience to this law as well as products, and the world's stock of money being reduced one-half by the demonetization of silver, and silver itself becoming a commodity, values adapted themselves to the reduced supply. Mr. Carlisle's major premises being false, all his argument falls to the ground.

I will close by recalling what he said about the rule which obtained when legislation first began on the subject of coinage:

"The public authorities did not attempt to establish values or new ratios but accepted those already fixed by the laws of trade and the customs of merchants. Coins were made not for the purpose of attempting to add anything to the intrinsic or exchangeable value of

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the metal contained in them, but for the purpose of attesting by public authority its weight and purity."

All that is necessary is to return to this custom of the ages. Give the two metals the right to be coined into money — the ratio will adjust itself — and values rise to their normal level. It is a matter of law, for coinage depends on law alone.

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Chapter XXX. — Silver in the Constitution — By J. B. Cheadle, Ex-Congressman from Indiana.

I desire to present some phases of the legal questions involved in the discussion of the currency and ask the gold men whether they propose to obey the law and yield a cheerful obedience to the plain and mandatory provisions of the Constitution. Ours is a Constitutional government, that Constitution being the supreme law of the land. It must be enforced in every state and obeyed by all the people. To enforce it the government was established and is maintained. The Constitution is supreme not in one but in all things; it must, therefore, be obeyed in all things.

Only recently an act of congress that levied a tax upon the incomes of the rich was declared null and void by the Supreme court of the United States, for the reason that it was enacted in violation of the constitution, notwithstanding the direct grant of authority to congress "to lay and collect taxes, duties, imposts and excises." This decision prohibits the laying and collection of taxes — unless they are laid in compliance with the provisions of the Constitution. There is no appeal from that decision. The fact that there will be a deficit of not less than $45,000,000 in the revenues for the fiscal year ending June 30 counts for naught. The Constitution must be obeyed. That is the supreme fact of the hour.

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Do not the bankers know that they are defying the constitution when they declare against silver and demand that gold, and gold only, be made the legal standard of values in our money system? Congress can pass laws, but if they are to be legal they must be enacted by congress pursuant to the grant of authority in the Constitution. There is no escape from this conclusion. I lay down this proposition that on no other question must the Constitution be more literally obeyed than in the grant of authority "to coin money and regulate the value thereof." The necessity of absolute honesty in creating a money system and establishing the unit of value in that system renders this duty imperative.

What is the command to congress in the Constitution: "To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures." This grant is in section 8, article 1, of the Constitution, and is rendered still more explicit in section 10 of the same article, where, in enumerating the restrictions upon the states, they are prohibited from making "anything but gold and silver coin a tender in payment of debts." Thus it will be observed that congress is commanded to coin money and regulate the value thereof, and all other authorities are prohibited from making "anything but gold and silver coin a tender in payment of debts." Gold coin and silver coin are thus made the constitutional and legal tender money in payment of debts. Having been made legal tender, how can either one of the metals be dethroned as legal tender money? Certainly not by act of congress, for the command to it is to coin money, that is, create money — not destroy it. Daniel Webster, the greatest constitutional lawyer

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this nation has produced, said: "I am clearly of the opinion that neither congress nor any other authority can legally demonetize either silver or gold." If one coin can be dethroned as money then the other one can be, and thus the Constitution could be disregarded, yes, overthrown. Mr. Webster made one other statement at the same time that I commend to the most thoughtful consideration of gold-standard men. These are his words: "The command to congress is to coin money, not destroy it; to create legal tender money for the use of the people, and the grant of authority to create money cannot be construed to mean authority to destroy money."

The Constitution having made silver coin a legal tender in payment of debts it must retain this quality until it is taken away by a constitutional amendment. Therefore, when men demand the gold standard they deliberately request that the supreme law of the land be disregarded; they are traitors to the spirit of our institutions. Certainly the wealth of the nation will not invoke the aid of the supreme law of the land to evade the payment of a tax because it was in violation of that supreme law, and then, in the next breath, advocate the open and willful violation of one of its most important provisions, the effect of which would be to destroy one-half of the legal tender coin money of the country.

The plain mandate is to coin legal tender money out of silver and out of gold, and when coined regulate the value of each coin.

I want to emphasize, if possible, the fact that every consideration demands that the Constitution be enforced in all of its provisions in every section of our country.

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National honor demands it, and national honor never considers the question of cost. The permanency of our liberties demands its enforcement, and these are above all cost. The blood of all the heroes who died in the establishment and preservation of the Constitution cries aloud for its enforcement, and a loyal people dare not disregard this appeal.

Thus it will be seen that in this contention the silver men have the Constitution on their side. They demand that it be enforced, and in this demand they will become stronger in the confidence of the public the longer this question is debated.

Upon the question of honest money I want to say this: The act of congress of 1792 created the only honest dollar, the only legal coin dollar known to our money system. It was the silver dollar, and the same section of the same act measured all other coin money in and by this dollar. To illustrate: The act fixed the value of the $10 gold piece as follows: "Of the value of ten dollars or units," the same of the $5 and $2 and 50-cent gold coins. So that the two metals were tied together at the legal ratio. The quantity of gold in the gold coin has been changed, but the quantity of silver remains the same now, after the lapse of more than 100 years. This other fact remains: During the first half of the present century the world's output of silver exceeded that of gold $614,028,000, and yet freedom at the mints held it at par with gold at its legal ratio, not withstanding the increased silver output, and it held it at par until 1873, when the tables were turned and the world's output of gold exceeded that of silver. In 1873 the mints were closed to silver, when it was worth $1.03 in gold. New mark the result in 1895,

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when the output of gold from 1852 to 1898, forty-one years, exceeds that of silver in the enormous sum of $1,142,975,000. Silver that was above par in gold when free at the mints loses value when measured in gold until it is only worth 67 cents instead of 100 cents. It must be apparent to every candid mind that the honest dollar is the creature of the law, and that where both coins, gold and silver, are made legal tender in payment of debts it is an imperative necessity that both be treated alike at the money mints, in order that the coins may be of equal value. The fact that freedom at the mints kept silver at par regardless of the output of the metals, and the further fact that, when denied the freedom of the mints, it declined in value, in the face of a largely increased output of gold, forever settles the status of the honest dollar. It is — yes, it must be — the creature of the law.

I will restate the proposition so that the children can comprehend its meaning. The only constitutional legal tender money consists of gold and silver coins, authorized by act of congress pursuant to grant of authority in the Constitution, which coins have an equal value upon an established legal ratio. To maintain these coins at the same value they must receive the same protection at the money mints. The right is now denied silver, with the result that its equal value is destroyed. The silver men demand as of right that silver be restored to its rightful place in our constitutional money system. The bankers and gold men ask that the Constitution be disobeyed — that gold, and only gold, be made the legal tender in payment of debts.

Will the American people who freely gave their loved ones to die in defence of the Constitution until

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the dead numbered 864,112, and expended thousands of millions of money to save it, now obey it themselves, or will they permit the greed for gold to annul one of its plainest provisions? Shall we be patriots or traitors?

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Chapter XXXI. By Hon. Joseph C. Sibley of Pennsylvania.

Silver is the only stable standard of values maintaining at all times its parity with every article of production except gold. The ounce of silver, degraded by infamous legislation from its normal mintage value of 1.2929 an ounce to about 60 cents, has kept its parity with the ton of pig iron, the pound of nails, and all the products of our iron mills. The ounce of silver has maintained its parity with the barrel of petroleum, with granite blocks, with kiln-burnt bricks. With lumber growing scarcer year by year it still keeps its parity. It is at parity with the ton of coal; with the mower, reaper, thresher, the grain drill, the hoe, and the spade. Silver at 1.2929 and beef at 7 cents per pound in the farmer's fields has kept its parity, and the ounce of silver at 60 Gents buys to-day beef at 2 cents per pound on foot. The pound of cotton and the ounce of silver have never lost their level. No surer has the sun indicated on the dial the hour of the day than has the ounce of silver shown the value of the pound of cotton. As surely as the moon has given high tide or low tide, just so surely has the ounce of silver given the high and low tide prices of wheat. The ounce of silver has maintained its parity with your railway dividends, with the earnings in your shops and factories, in all departments of effort.

If parity with gold, is demanded, and the Secretary

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of the treasury construes the law to mean whenever demanded to pay gold, then let us maintain the parity by reducing the number of grains in the gold dollar from 23.22 grains pure gold to 15 grains, or to such number of grains as will keep it at parity. While we may wrong by so doing the creditor class, through the increased value of the products of human industry, we must remember that for every one creditor there are a thousand debtors; and we should remember that the aim of the government is the greatest good to the greatest number, and also the minimum amount of evil. But no such drastic measure is necessary. Parity may be maintained and every declaration of governmental policy fully met by accepting for all dues, public and private, including duties upon imports, silver and paper issues of the nation of every description what-so ever.

In all the gold-standard nations destitution and misery prevail. With great standing armies in Europe outbreaks are not of frequent occurrence, and yet one rarely peruses his paper without reading of these outbreaks. At Montreal, St. Johns, Newfoundland, in Italy, in Spain and Portugal, Sunday gatherings in Trafalgar Square, London, of the thousands of unemployed, where rioting is prevented only by keeping the crowds in motion. In Nebraska and Kansas, the land of wheat and corn, we read of starving households; even in Ohio appeals are sent out for the relief of thousands of starving miners, and yet men have the temerity to tell us that the evils arise from overproduction.

Succeeding the great Irish famine of 1840, writers speciously commenting upon that great disaster, in

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which thousands of lives were pinched out by hunger, held that Ireland was too densely populated; that people starved because of overproduction of men, women and children. To-day thousands of men, women and children are suffering the pangs of hunger, and yet we are told that this comes from overproduction. Is it from overproduction of wheat? People are freezing. Is it because of overproduction of coal? Multitudes are in rags and nakedness. Is it because of overproduction of cotton and wool? We were told that we could not hold bimetallism because of the overproduction of silver.

Men tell us that there is an overproduction of silver, and that its price had diminished in comparison with gold because of its great relative increase. Such statements are not only misleading, but absolutely false. Figures show that in 1600 we produced 27 tons of silver to 1 ton of gold; in 1700, 34 tons of silver to 1 ton of gold; in 1800, 32 tons of silver to 1 ton of gold; in 1848, 31 tons of silver to 1 ton of gold; while in 1880 the production of silver had declined until we produced 18 tons of silver to 1 ton of gold; and in 1890 but 18 tons of silver to 1 ton of gold; and that, instead of the ratio of coinage being increased above 16 to 1, if relative production of the two metals is to determine the ratio, then the ratio should have been diminished rather than increased, and confirms the fact that merely the denial of mintage upon terms of equality with gold is responsible for all depreciation in the value of silver bullion.

All the silver in the world to-day can be put in a room 66 feet in each dimension and all the gold can be melted into a cube of 18 or 20 feet. There are today

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less than twenty-five millions of bar silver in all Europe. Mr. St. John, the eminent banker of New York, had stated that there was not over five millions of silver that could be made available to send to our mints. Begin to coin silver to the full capacity of our mints, and we would have to coin it for twenty years before giving to each inhabitant a per capita circulation that France, the most prosperous nation in the world to-day, possesses.

Men tell us that money must have intrinsic value, forgetful of the fact that a paper bank was established in Venice in the eleventh century whose bills of emission at no time failed to command a premium over and above gold and silver. Historians inform us that the premium upon the paper over gold in commercial transactions rose as high as 32 per cent., until by law the Republic declared that it should be illegal to demand in excess of 20 per cent, premium on the paper money over gold and silver coin of standard value. That bank was founded, stood the shock of arms, the mutations of time and governments, for five hundred years, and until the day that Napoleon marched his conquering legions into Venice. The faith and the property of the Venetian Republic stood as a sure foundation for issue.

The struggle to-day is between the debtor and creditor classes. With one-half the world's money of final account destroyed, the creditor can demand twice as much of the products of your field, your shop, and your enterprise and labor for his dues. In this struggle between debtor and creditor the latter has taken undue advantage and by legislation doubled and trebled the volume of the debt. For example, suppose you had

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given a note to your neighbor promising to pay, one year after date, 1,500 bushels of wheat. You thresh the grain, measure it into the bin, and notify your creditor that the wheat is at his disposal. He goes to the granary, sacks the wheat, and then brings up your note and states, "I have taken 500 bushels, which I have endorsed on your note. I will call on you for the balance when next year's crop is harvested." You say, "Why did you not take all the wheat and let me make full payment?" The note holder answers. "I did take all the wheat, and there were only 500 bushels in the bin instead of 1,500."

You fail to understand how that can be possible. You know that you threshed out and measured into that bin 1,500 bushels of wheat. You go to the granary and find that it is true. No wheat is there, but there appears to be an enormous lot of wheat upon those wagons for 500 bushels, and you ask the note holder, "Who measured this wheat? and let me see how you measured it." You see something in the form of a measure about as large as a washtub, and you ask him what that is. He tells you that is the half-bushel measure which he measured your wheat; but you reply, "My dear sir, that holds more than half a bushel; that measure will hold 6 pecks." He answers, "Correct, it does hold six pecks, but it now takes 12 pecks to make a bushel, instead of 4 pecks. Together with other friends who had wheat coming to us we went before the Committee on Coinage, Weights, and Measures and secured the passage of a legislative enactment, that it should require 12 pecks instead of 4 pecks to make a bushel. We have secured this legislation for the proper protection of the holders of wheat obligations,

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for our own security, and for fear that we should become timid and lose confidence in your ability to pay unless we changed the standard of measure." But you reply, "Sir, we who have obligations maturing, contracts long outstanding, have never asked or consented to the enactment of such legislation. Our representatives in congress never permitted us to understand that any such legislation was pending." He replies, "Sir, you might have known it had you desired to do so, or had you kept yourself as well posted in legislative affairs as do the holders of obligations calling for products of the soil for payment. We have our representatives in congress. We reward them for their fidelity to our interests; we punish them for fidelity to yours. You are not capable of comprehending problems of such intricate nature as are involved in the system of weights and measures. While you have been debating the tariff we have been students of the financial school taught by Rothschild and his American allies. You should not produce so much wheat, or should devote your attention to better tillage of the soil. You should be steadfast and loyal to our congressmen and to our party. Vote the straight ticket and beware of the evils of overproduction."

This, in my judgment, is not a far-fetched illustration, but depicts the exact condition against which production to-day protests. The debtor's obligation, true, does not call for wheat in specific terms. It calls for dollars, but by legislation we have made the dollar three times as large in purchasing power or in measuring values as it was before. We talk about gold being the only money of intrinsic value, and attempt to befog and mystify the masses by telling them that it

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has intrinsic value, when its value is merely the artificial product of legislation.

Enact a law, to be rigidly enforced, providing that no meat of any kind, whether "fish, flesh or fowl," except mutton shall be used for food. What will be the intrinsic value of your beef cattle, of your swine, your poultry, and your fish to-morrow? The mutton-headed monometallists would tell you that the great increase in the value of mutton was because of its intrinsic worth. Let this nation and the commercial nations of the globe enact a law to-morrow, that neither cotton, nor silk, nor fabric should be used for clothing or covering, forbid the factories of the world to spin or weave aught but wool, and what will be the intrinsic value of cotton or silk thereafter? Wool will be king; its value will be enhanced, but cotton, hemp, and silk will be as valueless as weeds or as gossamer webs.

With the mints open to free and unlimited coinage of both gold and silver there has never been a moment when silver has not maintained its parity with gold and at a ratio of 16 to 1 commanded a premium of more than 3 per cent, over gold. And if, by some fortunate discoveries to-morrow, gold should be found in great quantities sufficient to lessen the income of the annuitant, the bondholding, or the fixed-income class, there would arise a demand for the demonetization of gold and the establishment of the pearl, ruby, or diamond standard of values. Whatever standard can bring to grasping hands and greedy hearts the most of the toil, the sweat, and unrequited effort of his fellow-man, this standard will be demanded by the representatives of greed, and must be resisted by those who represent humanity and Christianity.

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We are not dependent upon the opinion of mono-metallist or bimetallist. There have been standards erected whereby men can unerringly determine whether values have appreciated or depreciated in comparison with gold. In 1845 the London Economist sought to ascertain the range of values which should determine any increase or decline thereof. They took the values of twenty-two leading articles of production and consumption in Great Britain, from 1845 to 1850, taking enough units to make 100 or one dollar. For instance, one unit of wheat, one dollar; ten units of cotton, one dollar; three units of wool, one dollar, and thus through twenty-two leading articles of production and consumption, with enough units of each of the given articles at the average range of values during the five years named to establish a standard. Therefore, the value of the twenty-two leading articles forming the basis of computation would add 2,200. If prices should vary so that one unit of wheat should be worth 1.25, ten units of cotton 1.10, three units of wool 90, the average rise and fall would be indicated by the total footings of the twenty-two leading articles thus forming the index number.

The results of these tables are astonishing. The average of values which from 1845 to 1850 had shown 2,200 as the index number, owing to the discoveries of the gold mines of California, adding to the volume of money of final account, steadily increased. The output of Australia commencing to come into the channels of commerce in 1853, added still more to the footings of the index columns. Year by year values increased, until in 1864 high-water mark was recorded, and the index number was then 3,780. From 1866 to

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1873 prices declined, largely owing to the great contraction in the volume of American currency which tended to reduce the value of American products. But the real depreciation in the total footings did not set in until the United States, following the lead of Germany demonetized silver. From that time to this the decline has been rapid.

Prior to 1873 but two nations, Great Britain and Portugal, were upon the gold basis. They had a population of 42,000,000 of people. To-day the same, or even a less amount of gold, is divided among the 320,000,000 of people who have adopted the gold standard. The result has been a continuous struggle for gold and a continuous shrinkage of values proportionate to the enhancement of gold. On the 1st day of January, 1893, the index number was 2,121 showing a range of values below those obtaining in 1845-1850. The 1st day of January, 1894, the index number was 2,082; and on the 1st of January, 1895, the index number is 1,923, or a decline of nearly 50 per cent, in values below the year 1864, and a decline in values of about 12 per cent. below those prevailing in the period embraced between the year 1845 and 1850.

This decline must be checked, or we must return to the condition of the middle ages, to its miseries, to its woes, to a period when money was so valuable, during reign of the Henrys, that seven cents measured as much of the products of the field, the brawn, and the muscle as are measured by one dollar of the present day.

We have plucked the deadly Upas tree from an alien soil and planted it in the free soil of this Union. What are its fruits? It has given the homesteads of

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thousands of toilers to the creditor. It has given one-third of our railway mileage to receivers. It has given reduced earnings to every one of the other two-thirds, and dividends upon stock and interest upon bonds to but few. It has given idleness to four millions of would-be toilers in shop and field. It has given productive capital no scope for use and little or no return for risks assumed. It has given the silver miners ruin. It has given the farmer 40 cents for wheat and the cotton planter but little over 4 cents for his cotton. It has produced a Republican majority of about 150 in congress. It has given nakedness, hunger and cold to millions of men, women, and helpless children. It has produced a sea of tears, an avalanche of groans and prayers for succor. It has blighted hope and paralyzed aspiration in a million homes. It has produced a crop of defaulters and criminals until the jails and prisons overflow. It has produced mobs and riots and the calling for armed forces of the nation to check and control. It has produced $100,000,000 more of government bonds, which are so many financial fetters to shackle the feet of industry.

The cause at trial is that of creditor versus debtor; humanity versus selfishness; truth versus error — a free government such as our fathers designed to found versus the rule of an organized plutocracy. Every great statesman and political economist of the last three hundred years has laid down as a political axiom that the values of property are determined by the volume of money proportionate to the volume of trade transactions. I shall quote in an appendix the declarations of many great thinkers upon this topic from the days of John Locke and Adam Smith down to the

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present moment, which, briefly condensed, may be summarized as follows:

Double the volume of money, you double the value of products.

Divide the volume of money, and you divide the value of products.

Divide the volume of money, you double the debt.

Double the volume of money and you divide the debt.

Nothing more clearly illustrates the increasing value of money than an example the force of which must be apparent to the dullest intellect. If a man had sold his farm for $30,000 in 1873 and buried his money deep into the earth, or, as men do, placed it at interest at 6 per cent., in addition to his interest, with one-third of his $30,000 he can to-day repurchase the same farm. If this man has gained $20,000 and the interest on $30,000 for twenty years, then certainly the man who purchased the farm has lost $20,000 of his purchase money and the interest on $30,000. If a farmer had sold $10,000 worth of horses in 1874 he could purchase others, their equal to-day, for $2,000. If he had sold his beef cattle from off his farm for $6,000, he could buy back to-day an equal or greater weight of beef cattle for $2,000. Money has been magnified; sources and profits of industry have been minimized. If the man who sold the farm for $30,000 in 1873 had placed it at interest at 6 per cent. it would amount to more than $100,000 in 1894 with interest annually added to principal If the one man has gained through appreciation of money and interest more than $90,000 net, the man who purchased has certainly lost an equal sum. By vicious legislation money has been made a monarch,

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while industry and production have become beggars oft the face of the earth.

Men who work upon the farm, in the shop or in the mine are prone to think that the volume of money in a nation and matters of finance are subjects in which necessarily they can have but passing interest, and relegate the entire subject to the "masters of finance," to those who loan money, deal in stocks, manage banks, and operate trust companies. This indifference to such subjects has led mainly to the condition which confronts the nations of the world today. The most careful compilations of the last census indicate that in 1890 three-tenths of 1 per cent of the population of the United States received more than 70 per cent of the total increase of wealth, or that of the increase of national wealth in the last ten years, of every one hundred dollars of increase 1 man out of every 300 men took seventy dollars and the other 299 men had thirty dollars to be divided among them, or about ten cents apiece.

Now let us state the problem fairly and honestly. If in any given community of 300 citizens one man was taking seventy dollars out of each one hundred dollars that was earned by the united efforts of all that community, how long would it be until you could make the 299 men see that they were called upon to take more than a passing interest in financial questions so far as they concerned that community? What is the plain duty of the 299 citizens? Clearly not to despoil or rob the man of his possessions, but by united effort to assist one another in the securing of such legislators as will enact laws so beneficent in their operations as will make such absorption a future impossibility. Let me

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show you now how partyism works: This man who gets the seventy dollars springs a great issue through the columns of his newspaper as to whether a man should wear boot heels 3 inches high or no heels on his boots. The strife waxes hotter and hotter, the 300 men divide their forces, 150 for boot heels three inches high, and 149 against any heels, and while the votes are being counted he is secretly laying his plans to steal every pair of boots and shoes in the whole community. The old Roman maxim, "Divide and rule," is employed today as much as ever in the palmiest days of Roman power. The 299 men strive with no concert of action, but pull this way and that, and their efforts redound in the end not to the well-being of all, but to the further aggrandizement of the one who upon false issues has divided them.

The body politic, financial, social, and industrial, is to-day afflicted with a thousand ills, and each ill has developed a horde of specialists who have some specific remedy for each separate malady. Apply the remedy for the one great evil, arrest the pygemia which, unchecked, must destroy the whole system, and the thousand wrongs and ills, which are but symptoms of the universal disease, need no remedy, for with the purifying of the lifeblood these excrescences and tumors, by the natural process of absorption, will disappear; the receiverships, the bankruptcies, the closed factories, or those operated at a loss, the profitless investments, the mortgaged homes, the paralyzed aspirations, the idle men, the tramps, the strikes, the lockouts, socialism, and anarchy disappear as the summer clouds before the noonday sun.

Arrest the decline of values of all forms of property

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arising through appreciation of gold, and humanity takes on new hopes and girds herself for conflicts, not among its fellows but for conquests over the material universe. Fix at some point through bimetallism stability of values, where investment shall unerringly know that through appreciation of gold and debasement in value of all products there shall be no longer from year to year a continuous decline of the latter, and at once you inspire courage and faith in every legitimate enterprise and activity in every field of usefulness. But continue the dwarfing process, the crushing, grinding, resistless, and relentless system of gold monometallism, and with it you discourage enterprise, dampen ardor, dispel hope, and destroy faith; and then the teachings of the Master will be reversed, and the provident and faithful steward will be he who alone has buried his talent in the napkin, while the man who had the five talents and used them in the fields of human activity will be the one who will return to his lord empty handed to merit rebuke for having attempted to use his money for his own and society's betterment.

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Chapter XXXII. — Attitude of the Parties and Candidates on the Silver Question. — Financial Plank in the Platform Adopted by the Republican Convention at St. Louis, June 17th, 1896.

The Republican party is unreservedly for sound money. It caused the enactment of the law providing for the resumption of specie payments in 1879. Since then every dollar has been as good as gold.

We are unalterably opposed to every measure calculated to debase our currency or impair the credit of our country. We are, therefore, opposed to the free coinage of silver except by international agreement with the leading commercial nations of the world, which we pledge ourselves to promote, and until such agreement can be obtained the existing gold standard must be preserved. All our silver and piper currency must be maintained at parity with gold, and we favor all measures designed to maintain inviolable the obligations of all our money, whether coin or paper, at the present standard — the standard of the most enlightened nations of the earth.

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William McKinley, Republican Candidate for President of the United States, on the Silver Question.

The national credit, which has thus far fortunately resisted every assault upon it, must and will be upheld and strengthened. If sufficient revenues are provided for the support of the government there will be no necessity for borrowing money and increasing the public debt. The complaint of the people is not against the Administration for borrowing money and issuing bonds to preserve the credit of the country, but against the ruinous policy which has made this necessary. It is but an incident, and a necessary one, to the policy which has been inaugurated. The inevitable effect of such a policy is seen in the deficiency of the United States Treasury, except as it is replenished by loans and in the distress of the people, who are suffering because of the scant demand for either their labor or the products of their labor. Here is the fundamental trouble, the remedy for which is Republican opportunity and duty.

During all the years of Republican control following resumption there was a steady reduction of the public debt, while the gold reserve was sacredly maintained, and our currency and credit preserved without depreciation, taint or suspicion. If we would restore this policy that brought us unexampled prosperity for more than thirty years under the most trying conditions ever known in this country, the policy by which we made and bought more goods at home and sold more abroad, the trade balance would be quickly turned in our favor, and gold would come to

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us and not go from us in the settlement of all such balances in the future.

The party that supplied by legislation the vast revenues for the conduct of our greatest war, and promptly restored the credit of the country at its close, and that from its abundant revenues paid off a large share of the debt incurred in this war, and that resumed specie payments and placed our paper currency upon a sound and enduring basis, can be safely trusted to preserve both our credit and currency with honor, stability and inviolability.

The American people hold the financial honor of our government as sacred as our flag, and can be relied upon to guard it with the same sleepless vigilance. They hold its preservation above party fealty, and have often demonstrated that party ties avail nothing when the spotless credit of our country is threatened. The money of the United States, and every kind or form of it, whether of paper, silver or gold, must be as good as the best in the world. It must not only be current at its full face value at home, but it must be counted at par in any and every commercial centre of the globe.

The sagacious and far-seeing policy of the great men who founded our government, the teachings and acts of the wisest financier at every stage in our history, the steadfast faith and splendid achievements of the great party to which we belong, and the genius and integrity of our people have always demanded this, and will ever maintain it. The dollar paid to the fanner, the wage-earner and the pensioner must continue forever equal in purchasing the debt-paying power to the dollar paid to any government creditor.

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Recent events have imposed upon the patriotic people of this country a responsibility and a duty greater than that of any since the civil war. Then it was a struggle to preserve the government of the United States. Now it is a struggle to preserve the financial honor of the government of the United States.

Then it was a contest to save the Union. Now it is a contest to save spotless credit. Then section was arrayed against section. Now men of all sections can unite, and will unite to rebuke the repudiation of our obligations and the debasement of our currency.

In this contest patriotism is above party, and national honor is dearer than any party name. The currency and credit of the government are good now, and must be kept good forever. Our trouble is not with the character of the money we have, but with the threat to debase it. We have the same currency that we had in 1892 — good the world over, and unquestioned by any people. Then, too, we had unexampled credit and prosperity. Our difficulty now is to get that money in circulation and invested in productive enterprises which furnish employment to American labor.

This is impossible with the distrust that hangs over the country at the present time, and every effort to make our dollars, or any one of them, worth less than one hundred cents each, only serve to increase that, distrust.

What we want is a sound policy, financial and industrial, which will give courage and confidence to all, for when that is done, the money now unemployed because of fear for the future and lack of

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confidence in investment, will quickly appear in the channels of trade.

The employment of our idle money, the idle money that we already have, in gainful pursuits will put every idle man in the country at work, and when there is work and wages there are consumers who constitute the best market for the products of our soil.

Having destroyed business and confidence by a free trade policy, it is now proposed to make things still worse by entering upon an era of depreciated currency. Not content with the inauguration of the ruinous policy which has brought down the wages of the laborer and the price of farm products, its advocates now offer a new policy which will diminish the value of the money in which wages and products are paid.

Against both of these we stand opposed. Our creed embraces an honest dollar, an untarnished national credit, adequate revenues for the uses of the government, protection to labor and industry, preservation of the home market and reciprocity which will extend our foreign markets.

Upon this platform we stand, and submit its declarations to the sober and considerate judgment of the American people.

We must have a sound dollar, as sound as the Government and as untarnishable as its flag; a dollar that is good not only at home, but good wherever trade goes; a dollar that is as good in the farmers' and working men's hands as in the hands of the manufacturer or capitalist.

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Garret A. Hobart, Republican Candidate for Vice-President of the United States, on the Silver Question.

Uncertainty or instability as to the money question involves most serious consequences to every interest and to every citizen of the country.

The gravity of the question cannot be overestimated. There can be no financial security, no business stability, no real prosperity where the policy of the government as to that question is at all a matter of doubt.

Gold is the one standard of value among all enlightened commercial nations. All financial transactions of whatever character, all business enterprises, all individual or corporate investments are adjusted to it. An honest dollar, worth 100 cent everywhere, cannot be coined out of fifty-three cents worth of silver, plus a legislative fiat.

Such a debasement of our currency would inevitably produce incalculable loss, appalling disaster, and national dishonor. It is a fundamental principle in coinage, recognized and followed by all the statesmen of America in the past and never yet safely departed from, that there can be only one basis upon which gold and silver may be concurrently coined as money, and that basis is equality, not in weight, but in the commercial value of the metal contained in the respective coins. This commercial value is fixed by the markets of the world, with which the greatest interests of our country are necessarily connected by innumerable business ties, which cannot be severed or ignored. Great and self-reliant as our country is,

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it is great not alone within its own borders and upon its own resources, but because it also reaches out to the ends of the earth in all the manifold departments of business, exchange and commerce, and must maintain with honor the standing and credit among the nations of the earth.

The question admits of no compromise. It is a vital principle at stake, but it is in no sense partisan or sectional. It concerns all the people. Ours, as one of the foremost nations, must have a monetary standard equal to the best.

It is of vital consequence that this question should be settled now in such a way as to restore public confidence, here and everywhere, in the integrity of our purpose. A doubt of that integrity among the other great commercial countries of the world will not only cost us millions of money, but that which, as patriots, we should treasure still more highly — our industrial and commercial supremacy.

FINANCIAL PLANK IN THE PLATFORM ADOPTED BY THE DEMOCRATIC CONVENTION AT CHICAGO,
JULY 8th, 1896.

Recognizing that the money system is paramount to all others at this time, we invite attention to the fact that the Federal Constitution names silver and gold together as the money metals of the United States, and that the first coinage law passed by Congress under the Constitution made the silver dollar the monetary unit and admitted gold to free coinage at a ratio based upon the silver dollar unit.

We declare that the act of 1873 demonetizing silver without the knowledge or approval of the

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American people has resulted in the appreciation of gold and a corresponding fall in the prices of commodities produced by the people; a heavy increase in the burden of taxation and of all debts public and private; the enrichment of the money lending class at home and abroad; protection of industry and impoverishment of the people.

We are unalterably opposed to monometallism, which has locked fast the prosperity of an industrial people in the paralysis of hard times. Gold monometallism is a British policy and its adoption has brought other nations into financial servitude to London. It is not only un-American but anti-American, and it can be fastened on the United States only by the stifling of that spirit and love of liberty which proclaimed our political independence in 1776 and won it in the War of the Revolution.

We demand the free and unlimited coinage of both gold and silver at the present legal ratio of 16 to 1, without waiting for the aid or consent of any other nation. We demand that the standard silver dollar shall be a full legal tender, equally with gold, for all debts, public and private, and we favor such legislation as will prevent for the future the demonetization of any kind of legal tender money by private contract.

We are opposed to the policy and practice of surrendering to the holders of obligations of the United States the option reserved by law to the government of redeeming such obligations in either silver coin or gold coin.

We are opposed to the issuing of interest-bearing bonds of the United States in time of peace, and condemn the trafficking with banking syndicates, which in exchange for bonds, and at an enormous profit to themselves, supply the Federal Treasury with gold to maintain the policy of gold monometallism.

Congress alone has power to coin and issue

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money, and President Jackson declared that this power could not be delegated to corporations or to individuals. We, therefore, denounce the issuance of notes as money for national banks as in derogation of the Constitution and we demand that all paper which is made legal tender for public or private debts or which is receivable for dues to the United States shall be issued by the government of the United States and shall be redeemable in coin.

William Jennings Bryan, Democratic Candidate for President of the United States, on the Silver Question.

The humblest citizen in all the land when called to armor in a righteous cause is stronger than all the whole hosts of error that they can bring. I speak in defense of a cause as holy as the cause of liberty, the cause of humanity.

The miners who go a thousand feet into the earth or climb two thousand feet upon the cliffs and bring forth from their hiding places the precious metals to be poured into the channels of trade are as much business men as the few financial magnates who, in a back room, corner the money of the world.

You come to us and tell us that the great cities are in favor of the gold standard. I tell you that the great cities rest upon these broad and fertile prairies. Burn down your cities and leave our farms, and your cities will spring up as if by magic. But, destroy our farms, and the grass will grow in the streets of every city in this country;

We shall declare that this nation is able to legislate

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for its own people on every question, without waiting for the aid or consent of any other nation on earth, and upon that issue we expect to carry every single State.

We go forth confident that we shall win. Why? Because upon the paramount issue in this campaign there is not a spot of ground upon which the enemy will dare to challenge battle. Why, if they tell us that the gold standard is a good thing, we point to their platform and tell them that their platform pledges their party to get rid of a gold standard and substitute bimetallism. If the gold standard is a good thing, why try to get rid of it?

The very people who tell you that we ought to declare in favor of international bimetallism and thereby declare that the gold standard is wrong, and that the principals of bimetallism is better — these very people four months ago were open and avowed advocates of the gold standard and telling us that we could not legislate two metals together even with all the world.

I want to suggest this truth, that if the gold standard is a good thing we ought to declare in favor of its retention and not in favor of abandoning it; and if the gold standard is a bad thing, why should we wait until some other nations are willing to help us to let go? Here is the line of battle. We care not upon which issue they force the fight. We are prepared to meet them on either issue or on both. If they tell us that the gold standard is the standard of civilization, we reply to them that this, the most enlightened of all the nations of the earth, has never declared for a gold standard, and both the parties this

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year are declaring against it. If the gold standard is the standard of civilization, why should we not have it? So, if they come to meet us on that we can present the history of our nation. More than that, we can tell them this, that they will search the pages of history in vain to find a single instance in which the common people of any land have ever declared themselves in favor of a gold standard.

They can find where the holders of fixed investments have. Mr. Carlisle said in 1878 that this was a struggling between the idle holders of idle capital and the struggling masses who produce the wealth and pay the taxes of the country, and, it is simply a question that we shall decide, upon which side shall the Democratic party fight? Upon the side of the idle holders of idle capital, or upon the side of .the struggling masses? That is the question that the party must answer first, and then it must be answered by each individual hereafter. The sympathies of the Democratic party, as described by the platform, are on the side of the struggling masses who have been the foundation of the Democratic party.

There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous persons, their prosperity will leak through on those below. The Democratic ideas have been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class for taxation. Mr. Jefferson, who was once regarded as a good Democratic authority, seems to have a different opinion from some. Those who are opposed to the proposition tell us that the issuance of paper money is a function of the

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bank, and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them as he did, that the issue of money is a function of the government and that the banks ought to go out of the government business. They complain about that plank which declares against the life tenure in office. They have tried to strain it to mean that which it does not mean. What we oppose in that plank is the life tenure that is being built up at Washington, which excludes from party representation and its benefits the humbler members of our society.

We have grown to 70,000,000, and declare that we are less independent than our forefathers? No. It will never be the judgment of the people. Therefore, we care not upon what lines the battle is fought. If they say bimetallism is good but we cannot have it till some nation helps us, we reply that instead of having a gold standard because England has, we shall restore bimetallism and then let England have bimetallism because the United States has.

If they dare to come out and in the open defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of this nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them you shall not press down upon the brow of labor this crown of thorns. You shall not crucify man on a cross of gold.