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HIGGINSyiLLE, /AO. m No ig EXTRACTS FROM LETTERS RECEIVED BY THE AUTHOR OF " JOINT-METALLISM" Hon. David A. Wells, LL.D., D.C.L., etc.— Your plan is certainly novel and ingenious. Hon. John E. Russell, Member of Congress from Massa- chusetts. — The importance of the question you so ably discuss cannot be overestimated. The Right Hon. Lord Playfair. — It is certainly a much more honest system of bimetallism than the schemes al- ready propounded. Prof. W. Smart, LL.D., Glasgow.— It is a most suggestive contribution to a subject which is now creating as much interest in Great Britain as it does in its parent country. W. T. Harris, United States Commissioner of Education. — In my humble opinion the best book on this subject — a subject of vital importance to the prosperity of the people of this country. Right Rev. H. C. Potter, LL.D., etc.— Much impressed by your argument. Rev. David H. Greer, D.D.— I think your statement of the question most admirable and convincing. Hon, Carroll D. Wright, United States Commissioner of Labor.— Your theory attracts me very much. It seems to me that there is within it the solution of the difficulty. Prof. Francis Wayland, LL.D., Dean of Yale Law School. — If It has not brought complete conviction to my mind, it has certainly shaken some of my pet beliefs. JOINT-METALLISM PLAN BY WHICH GOLD AND SILVER TOGETHER, AT RATIOS ALWAYS BASED ON THEIR RELATIVE MARKET VALUES, MAY BE MADE THE METALLIC BASIS OF A SOUND, HONEST, SELF-REGULATING, AND PER- MANENT CURRENCY, WITHOUT FREQUENT RECOIN- INGS, AND WITHOUT DANGER OF ONE METAL DRIVING OUT THE OTHER With the Compliments of the Author MONOMETALLISM Part IIL-HISTORY OF THE SCIENCE OF MONEY AND COINAGE Part IV.-THE APOTHEOSIS OF CREDIT— OBJECTIONS ANSWERED AND HONEST LEGISLATION DEMANDED. Part V.-FREE-COINAGE DEBATE ; LETTERS ; AFTER THE ELECTION, WHAT ? G. P. PUTNAM'S SONS NEW YORK LONDON 27 WEST twenty-third STREET 24 BEDFORD STREET, STRAND flic JLinichcrbockct press 1S96 EXTRACTS FROM LETTERS RECEIVED BY THE AUTHOR OF " JOINT-METALLISM" Hon. David A. Wells, LL.D., D.C.L., etc. — Your plan is certainly novel and ingenious. Hon. John E. Russell, Member of Congress from Massa- chu - ■' - ^tinn vou SO ably disc The Ri< mor rea Pro t/^v.* In my humble opinion mc subject of vital importance to the prosperity of the people of this country. Right Rev. H. C. Potter, LL.D., etc.— Much impressed by your argument. Rkv. David H. Greer, D.D.— I think your statement of the question most admirable and convincing. Hon. Carroll D. \Vright, United States Commissioner of Labor. — Your theory attracts me very much. It seems to me that there is within it the solution of the difficulty. Prof. Francis Wavland, LL.D., Dean of Yale Law School. — If it has not brought complete conviction to my mind, it has certainly shaken some of my pet beliefs. JOINT-METALLISM A PLAN BY WHICH GOLD AND SILVER TOGETHER, AT RATIOS ALWAYS BASED ON THEIR RELATIVE MARKET VALUES, MAY BE MADE THE METALLIC BASIS OF A SOUND, HONEST, SELF-REGULATING, AND PER- MANENT CURRENCY, WITHOUT FREQUENT RECOIN- INGS, AND WITHOUT DANGER OF ONE METAL DRIVING OUT THE OTHER BY ANSON PHELPS STOKES FIFTH EDITION COMPRISING Part I.— JOINT-METALLISM— APPENDIX Part II.— JOINT-METALLISM VS. BIMETALLISM AND MONOMETALLISM Part III.— HISTORY OF THE SCIENCE OF MONEY AND COINAGE Part IV.— THE APOTHEOSIS OF CREDIT— OBJECTIONS ANSWERED AND HONEST LEGISLATION DEMANDED. Part V.— FREE-COINAGE DEBATE ; LETTERS ; AFTER THE ELECTION, WHAT > G. P. PUTNAM'S SONS NEW YORK LONDON 27 WEST TWENTY-THIRD STREET 24 BEDFORD STREET, STRAND S^IjE ■^unclurbockct |.lrcss 1896 Copyright, 1895 BY ANSON PHELPS STOKES Entered at Stationers' Hall, London By G. p. Putnam's Sons Ube Iknicfjcrbocfccr iprcae, "Hew IBorfi • « « « • • • • • • t • • * ft • • • • ft « • « • ft ft • • • * ftft *•«••• .J> ei INTRODUCTORY NOTE TO THE FIFTH EDITION. In this revised edition the statistical tables in the Appendix have been brought down to July i, 1896, and additional tables, etc., have been introduced. The Appendix occupies pages 77 to 118 as in previous editions. Pages 207 to 233, containing Extracts from Saratoga Free-Coinage Debate, Proposed Currency- Plank, Letters to the Springfield Republican, and After the Election, What ? are added new matter. New York, November, i8g6. 389162 CONTENTS. PAGE Introductory Note to Fifth Edition . Advertisement of Fourth Edition . . v Preface to Third Edition . . . vii Preface to Second Edition . . . xi Preface to First Edition .... xxi PART I. First Letter on Joint-Metallism . . 3 To Make Times Prosperous. The Plan. The Economic Ratio. From the Evening Post . . . • 13 The New Silver Movement. Silver Lunatics. Second Letter on Joint-Metallism . 17 Criticisms. When the Ratio Becomes Settled. To Promote Clear Thinking. How to Remonetize Silver. The Constitutional Standard. " A Vein for Silver and a Place for Gold." From the Evening Post . . . . -29 Mr. Stokes's Basal Proposition. The Boston Brethren. Ammunition of the Most Deadly Kind. 11 Contents. PAGB Third Letter on Joint-Metallism . . 37 The Plan does Not Affect Present Debts. The Parliamentary Commission. The Only Final Basis of All Sound Currency. From the Evening Post as "The Goddess Argentum." The Historical and Just Position. Fourth Letter on Joint-Metallism . . 53 A Goddess with so Unfeminine a Name. What Lincoln Said about the Common People. Is the Production of Gold Increasing ? From the Evening Post . . . . 6i Popular Delusions. Aggravating Popular Errors. Fifth Letter on Joint-Metallism . . 65 The Danger does Not Come from Discussion. The Highland Minister. Some Dangers of the Present Situation. The Last Legal-Tender Opinion. The Difficulty of Maintaining the Treasury Reserve. Potatoes and Point. Appendix y^ Co7itents. iii PART II. PAGE Joint-Metallism versus Bimetallism and Monometallism . , . . .121 These Terms Defined, How Joint-Metallism would Work and Result. Unscientific Bimetallism with Empirical Ratio. Why Wheat, Cotton, and Wages Decline with Silver. David A. Wells and Edward Atkinson Answered. The Impending Crisis. A Commission of Judges and Experts Necessary. Joint-Metallism a Merit System. PART III. History of the Science of Money : a Study OF Great Philosophical Works on Money and Coinage . . . . Nicole Oresme, the Fourteenth-Century Political Economist, Author of Traictie de la Premiere Invention des Alonnoies, Nicholas Copernicus, the Astronomer and Re- former of Coinage, Author of Moneie Cudende Ratio, Wolowski's Admirable Annotated Edition of These Great Treatises. Paris, 1864. Views of Bacon, Locke, Newton, etc., etc. Macleod's Bimelalisni. London, 1894. The Difficulty with Bimetallism in 1873. 151 iv Contejtts. PAGE Quotations from Oresme and Copernicus Showing Their Wonderful Grasp'Df Monetary Principles .... i68 That They Saw that Gold and Silver Coins should Always Bear Substantially the Same Ratio to Each Other as Their Eullion Values. That They Tried to Accomplish This by Re- coinages when Market Values Changed. Conclusion 172 That This Ratio can be Maintained Conveniently by Having a Standard Silver Coin of the Same Weight as a Standard Gold Coin, and Simply Changing, when Necessary, the Number of These Silver Coins to be the Just and Legal Equivalent of the Gold Coin. That Thus Silver can be Used Equally with Gold. PART IV. The Apotheosis of Credit . . . 187 Objections Answfred and Honest Legis- lation Demanded ..... 197 PAR r V. Saratoga Debate 209 Letters to Springfield Republican . .218 After the Election, What ? . . . 229 Index 235 ADVERTISEMENT OF THE FOURTH EDITION. The favor with which this book has been re- ceived indicates that, notwithstanding the uncom- promising attitude of parties who are striving to use the currency question for political advantage, the people are studying it, and are seeking some fair and reasonable solution. This work is based upon original research, and contains pertinent historical and statistical matter, with references to and quotations from the principal authorities on the science of money ; also a com- plete Index. The statistical tables have been brought down to date of latest report of the Director of the Mint, etc. The author believes that most of the present de- pression in trade, agriculture, and other industries is traceable to ignorance of the history and science of money, and to attempts to retry unscientific ex- periments ; and he opposes both Monometallism and Bimetallism at any fixed empirical ratio. He proposes that the mints be opened to both the precious metals at their market values when they are presented together in quantities of equal value, and that joint certificates, payable half in gold and half in silver, be issued by the Treasury, to be legal tender for all debts contracted after a fixed future V vi A dvertisemeiit. date. He claims that the true economic ratio would thus soon be determined, and would then very seldom change, and that debtors and creditors Avould not be affected by such change, as the actual transactions would be made in Legal-Tender Joint Certificates ; and that any possible loss to the Gov- ernment could be provided against by a small mintage charge. The treatise presents a convenient plan for coin- age and currency on the above basis, with standard silver coins of the same weight as standard gold coins, but takes the ground that details as to the coin to be chosen as the gold standard, the time when and the official by whom the declarations of the Government ratios shall be made, and the periods to be considered in fixing the ratio, are not essential. The present work shows that the author is a bullionist and opposed to credit money, while be- lieving that credit can attain its greatest just development on a bullionist basis, as it does sub- stantially in England. New York, March, 1895. PREFACE TO THE THIRD EDITION. The second edition was published on the fifth of this month, and I am informed that it is out of print. I had planned in the third edition to discuss credit and paper currency at some length. I have not time to do so now, and if I ever undertake this, it will be in a separate volume. Since the second edition of Joint- Metallism went to press, the Government gold reserve has again been reduced be- low the minimum of one hundred million dollars, as it was evident it would be ; and the President's Message and the Report of the Secretary of the Treasury have been published. I am glad to note that they do not contain any recommendation vu viii Preface to the Third Edition. f of "coinage on Government account," / which was suggested in the Secretary's / letter quoted on page 171. But these I state papers and the Bill reported by the \ Committee on Banking and Currency pro- \ pose what is, in my opinion, a dangerous and unconstitutional system of paper cur- rency, based on general assets, etc. It is evident that the modern exagger- ated theory of credit, of which that very clever barrister and economist, Henry Dunning Macleod, is the most prominent promoter, is threatening the world with general disaster. Adam Smith has well pointed out how a mistaken theory of wealth caused many European wars during the seventeenth and eiofhteenth centuries. Macleod says that Adam Smith, John Stuart Mill, J. B. Say, etc., "had not the faintest conception of the great juridical principles of credit," and that this depart- ment of economics he has made his own. He writes: "The true function of credit is to bring into commerce the present values of future profits," and that " Ri- Preface to the Third Edition, ix vaj:ol_^well said, ' Man conquers space by commerce, and time by credit.' " — I regret I have neither time nor space to quote further or to comment fully on this theory, but some of the results of its workings are evident on all sides in bank- rupt states, railroads, and speculative com- panies, and further developments are fast approaching. 'It is a remarkable thing in economic literature that Macleod, the apostle of credit money, should now claim to derive support from the writings of Oresme and Copernicus, who were the great champions of sound metallic money, based on the market values of the two precious metals. If "credit is as good as money," as Macleod says it is, and if Government credit is the best credit, then fiat money is the best money, and the name of Mac- leod should be exalted in the gate of the Greenbackers. ^ ^eTTeving there is great danger to the community in the seductive theory of credit which Macleod so elaborately and so ably advocates, and which is admittedly X Preface to the Third Edition. an attempt to discount future profits, or, as he expresses it, " to bring into com- merce the present values of future profits," I have added in Part IV. of this edition a short chapter on " The Apotheosis of Credit." May I ask all readers of Part II. and Part III. to first read the Preface to the Second Edition. A. P. S. Stokes Building, New York, December 22, 1894. PREFACE TO THE SECOND EDITION. The first edition of yoint-Metallism consisted largely of letters hurriedly written for the newspapers. A second edition being called for now, I add, in Part II., commencing page 119, a more thorough presentation of the plan of joint-metallism, with some considera- tions intended to refute objections, and references to further weighty authorities on the science of money, whose opinions are entitled to especial attention. On page 5 I suggested some details which might facilitate the establishment of the system here. But these details as to the coin to be selected as the gold standard, the times when and the official by whom the declaration of the Govern- XI xii Preface to the Second Edition. ment ratio shall be made, and the periods to be considered in fixing this ratio, are, of course, not essential. In reading very many books on money and coinage, I find : First. That some of the older writers on this subject far surpass almost all the modern ones in genius, reasoning, force, and clearness. Second. That, as compared with other sciences, there appears a strange general ignorance of the history of monetary science. Oresme, the great master of this science in the fourteenth century, was acquainted with the writings on this subject of Justin, Saint Augustine, Cassiodorus, etc. But Copernicus, the great astronomer and economist of the sixteenth century, was ignorant of Oresme's work in this field, and Bacon, Locke, and Newton, in the seventeenth century, did not know of these writings of Oresme and Copernicus, and the English economic writers of the eighteenth century generally ignored the earlier continental monetary experiences. Preface to the Second Edition. xiii Roscher, Professor of Political Econo- my at Leipsic, when he found a copy of Oresme's work in 1862, supposed that "this diamond of the first water hidden in the dust " had been entirely unknown for many years. Its existence, was, how- ever, known to several French writers, but its importance not appreciated. That this treatise had caused the reform of the French coinage in the fourteenth century was generally forgotten until the publica- tion, in 1864, of Wolowski's^ Etitde sur le Traite de la Monnaie de Nicole Oresnie, and most recent writers show little knowl- edge of any of these great authorities, and total ignorance of their most import- ant works. It appears that at a critical period when it became necessary to reform the coinage, in order to save the country from ruin, some philosopher would adequately study up the matter, and prepare a plan which met the emergency, and then his work was soon forgotten. Old vicious coinage plans would then again be resorted to in order to cheat the people. Again there ' Read before the Institute nf France August 14, 1862. xiv Preface to the Second Edition. would be a crisis in affairs, then another philosopher would save society by mone- tary reform ; and then his work would, in turn, soon be forgotten. In Oresme's time the coin had been so debased that it contained only one eighty- sixth part of its nominal quantity of sil- ver ; the late King John, strangely called " The Good," having ordered the masters of the mint to exactly imitate the old coins in base metal, charging them under the most extreme penalty of treason ta keep this fraud secret. Oresme discov- ered and explained why bad money drove out good money.' One hundred and sixty years later Co- pernicus rediscovered how bad money was driving good money out of the great king- dom of Poland, which then embraced Prussia, etc. Similar conditions of affairs were after- wards repeatedly discovered in England and elsewhere. Some of the men who brouorht about great reforms of the coinage were the very greatest philosophers of their time. ' See note, page 154. Preface to the Second lidition. xv But, although they convinced those then in authority, their work in monetary re- form was not generally understood or appreciated. The hidden but momentous workings of changes in the basis of money are among the things no people have as yet shown an aptitude to under- stand. Even to-day the importance of the fol- lowing simple facts appears difficult of common comprehension, viz. : That gcnei'-al prospci'ity in our cotintry depends largely on the prices obtainable abroad for our chief exportable staples ; and that the fall in these is directly caused by the de- monetization of silver, because for every pound sterling which a planter in India, etc., receives for cotton or ivheat sold in England, he can now employ twice as many native laborers as lie could a few years ago, for their wages remain the same in silver coin. In a country where monetary questions must be decided finally by popular vote, the importance of a right understanding of the science of money cannot be over- estimated ; and its thorough study ought xvi Preface to the Second Edition. to appeal to those who have the neces- sary time and training. As most of the present depression In trade, agriculture, and other industries is clearly traceable to legislative ignorance of the history of money, and to attempts to retry unscientific experiments, the duty of the hour Is to encourage and to facilitate real study of the money problem, which is again about to be discussed In Congress and In the newspapers, and ought not to be decided by Ignorance, party spirit, and ad captanditm appeals. Anarcharsis criticised the constitution of Athens because the Athenians had wise men to debate and fools to decide. happy Athenians ! if you had always wise men to debate ! 1 do not claim to be learned or wise ; I desire, like Oresme, " to submit what I have written to the correction of wise and prudent men, for, as Aristotle says, the civil needs are often doubtful and uncertain." But I do claim to have made some little study of the currency question, and I desire to study it more, and to see Preface to the Second Edition. xvii more general and scientific study of it in our colleges, newspapers, and legislatures, amone those who are called upon to lead public opinion. I am sure I will not dis- oblige these by expressing my humble judgment that the best and most impor- tant foundation for this study is Oresme's treatise on the " Origin, Nature, Law, and Mutations of Money y Professor Roscher well says of this great work : "In order to rightly comprehend the present state of all science and from this to grasp its future, it is indispensable to know the past, so when we come to climb hicrher near the unseen sources of some truth, we experience a satisfaction, etc." His expression loses something in my feeble translation. In Part III., in this edition, I give some account of Oresme and his work written about 1 366, and some notice of the treatise on money written by Copernicus in 1526. The opening sentence of this latter work I beg permission to translate here : " However innumerable are the ills xviii Preface to the Second Edition. which lead to the fall of kingdoms, princi- palities, and republics, these four, in my judgment, are the most formidable : dis- cord, mortality, sterility of land, and bad- ness of money. For the first three, the evidence is so apparent that no one can be ignorant of it. But the fourth, con- cerning money, excepting some men of great ability, very few persons consider or understand it, because it is not by a single blow, but little by little, in an occult manner, that it overthrows the state." Our country does not suffer from the first three of the above named causes. We are a united people, our death rate is comparatively low, and our land fertile, but we are in danger of bad money. Of all bad money Jiat paper money is the worst. In our legislation we have forgotten the maxims of our Constitution, which made gold and silver the legal tender. We have forgotten the teachings of Oresme, Co- pernicus, Bacon, Locke, Newton, and a host of other philosophers, that the only honest measure of the value of money is Preface to the Seco7id Edition. xix the value of the buHion in the coin. We have forgotten that all experience has shown that the only way to keep our government currency always safe and good is to permit none to be issued that does not have an equal amount of coin behind it, and that this coin must be always convertible into bullion at a trifling cost. In the old times the bad money was usually money fraudulently alloyed, be- cause that was the easiest way to take advantage of the popular ignorance of the hidden effects of the money-stamping power. But at times when the govern- ments had large sums to receive, they would cheat by suddenly increasing the amount of silver in the coins, and insist- ing on being paid in the new coinage. As Macleod expresses it : " When they had debts to pay they cried the coin up. When they had debts to receive they cried the coin down." The mint rates in France were often changed more than a dozen times in a year. In our times it has been found easier XX Preface to the Second Edition. and more profitable to take advantage of this popular ignorance by reducing the total metallic basis of the currency. Both these schemes produce bad and dangerous money and cause great injustice and loss to the people. Five-cent cotton, fifty-cent wheat, low and diminishing gold reserve, the issuing of Government bonds in time of peace, falling wages and decreased employment, these things are making the people think on the currency question. Now is the time for enlightened discussion to find the principles upon which monetary science is bottomed, and to establish our currency on the best and most solid, safe, honest, and permanent basis. Believing that joint-metallism con- veniently provides this basis, I ask for it the candid consideration of competent critics. A. P. S. Stokes Building, New York. 23 November, 1894. PREFACE TO FIRST EDITION. The first of the following Letters on Joint-Metallism appeared in xki^New Yo7'k Times February i8, 1894. It was printed also in the New York Trihtne on the following day, and in the New York World February 24, 1894. The second Letter on Joint-Metallism appeared in the New York Times March 26, 1894, and in the New York Tribune April 17, 1894. Editorial articles in the New York Evening Post March 30th and April 5th caused the third and fourth Letters on Joint-Metallism to be addressed to that paper. Extracts from these Letters, not always fairly representing them, have appeared in various parts of the country, where among the typographical errors may be noted the word "vetoes" being printed "votes," "ratio" printed "ration," "eco- nomic" printed "economical," etc. XXI xxii Preface to the First Edition. Numerous inquiries, some of them from those who have seen only part of the correspondence, and the request of Messrs. G. P. Putnam's Sons have led to the present publication. The fifth Letter on Joint-Metallism was not addressed to any newspaper, as it has to be read in connection with the many facts, figures, and statements given in the Appendix. In the Appendix, among other matters, it may be seen how the admissions of leading monometallists strongly favor Joint-Metallism. President Cleveland said in his Message March, 29, 1894 : " I hope a way will present itself in the near future for the adjustment of our monetary affairs in such a comprehensive and conservative manner as will afford to silver its proper place in our currency." The design of these Letters is to point out such a way. A. P. S. Stokes Building, New York Apr it 26, i8g4 FIRST LETTER ON JOINT- METALLISM. JOINT-METALLISM. FIRST LETTER. To the Editor of the ''New York Tivies^* : Sir : To make business generally pros- perous, it is necessary to find a safe and honest plan by which both gold and silver, permanently and at their relative market values, may be made available as the metallic basis of currency. For a long period of years the money of the world has been, in total value, about half gold and half silver. Recently some nations have demonetized silver, and other countries have attempted to main- tain it at a ratio that did not regard the relative values of the two precious metals. This, at a time when the world's indebtedness has increased to a danger- 3 4 y oint- Metallism. ous point, has naturally caused distrust and depression of trade. The known debts of the world amount to more than ei^ht times the total amount of gold in the world. To incur a debt that must be paid on a gold basis is to sell gold short when the short interest is known to be eight times as great as the total amount of the stock in existence. Large owners of money prefer to keep it in banks or trust companies at 2 per cent, or less interest rather than to use it in the pro- duction or purchase of goods or property which must decline in value as the pur- chasing power of money, based on gold alone, increases. Money is hoarded and enterprise halts, trade languishes, laborers are unemployed, incomes are reduced, and times are hard. The following plan' for joint-metallism would enable both the precious metals to be safely used together, without frequent recoinings and without danger of one metal driving out the other, and would afford an honest, adequate, self-regulating, and permanent basis of currency ; * See page 121. The Plan. 5 Let there be silver coins containing the same weight of silver as there is weight of gold in the present $5 gold-piece.^ Let those silver coins be called standards.^ Let it be enacted that for all debts, public or private, of $10 and upward, contracted after six months from the passage of the act, it shall be lawful to pay half in gold coins and half in such number of standards^ as shall be approximately equal thereto, according to the Government ratio to be fixed as follows : On the first lawful day of each month,^ after six months from the passage of the act, the Secretary of the Treasury shall declare what number of standards ^ most nearly represent a $5 gold-piece, accord- ing to the average relative market values of gold and silver, from the first day of the third month after the passage of the act and based on the average market values of all the intervening months. This number is to be the ratio for that current month. A $5 gold-piece, plus said number of standards,' will constitute $]0 in lawful money during said month. ' See page xi. ^ Or silver standards. ^ See page 198. 6 yoint- Metallism. Let the mints be open to the coinage of standards, double standards, triple standards, and pieces containing looo standards, when the silver is presented accompanied by an equal value of gold, at the current Government ratio, to be coined into $5, $10, and $20 gold pieces. Let the Treasury receive deposits of gold coin together with silver standards, the proportion of gold and silver in such deposits being according to the Govern- ment ratio current at the time, and issue therefor legal-tender joint certificates in denominations of $10, $20, $100, $500, and $1000, these certificates to be redeem- able at the Treasury half in gold and half in standards, the number of standards to be according to the Government ratio in force at the time certificates are presented for redemption. Changes in the Government ratio would become very infrequent, could always be calculated in advance, and would never exceed one standard at any one time. At present value of silver, this would make a difference of 1 5 cents on $ i o lawful money, or i^ per cent. The Economic Ratio. 7 This plan would be a suitable basis for negfotiatinpf an international agreement for joint-metallism, with an international committee to make any changes in the ratio ; but, as the plan is to maintain the full use of silver with gold on the basis of their relative market values, the United States, which is most interested, could safely undertake it alone. The only possible loss would come from a decline in silver, and this is not probable when, under a system permanently bind- ing the two metals together, silver would have substantially the same access as gold to the mints, even in this country alone. A small uniform minting charge of so much per ounce on both gold and silver might provide a fund to meet any possible loss ; and, until an international agreement should be obtained, standards might be coined exclusively of silver mined in the United States after the passage of the act, the market price of all silver to be still used in fixing the ratio. The Government ratio would soon come to be substantially the economic ratio which is the relative costs of produc- 8 yoint-Metallisin, tion of gold and silver in the poorest mines that could be worked at a profit, when both metals had equal access to the mints. And the cost of production of the two precious metals tegether would natu- rally constitute the just and safe limit to the expansion of the currency and be the proper measure of its value. Owing to some exceptionally rich finds of limited extent, and to enormous ex- penditures for tunnels, plants, etc., not counted in the present cost of production, a small quantity of silver can be produced below even the present price, but this is equally true of gold and does not fix the cost of production of quantities sufficient to meet the requirements of the currency on a joint-metallic basis. So long as credits throughout the world were expanding, a limited amount of coin would support a large amount of credit. But when there is danger of one money metal driving out the other, and credits are contracted, a larger quantity of coin is required or panic will result. Then pool- ing of credits and clearing-house certifi- The Only Possible Final Basis. 9 cates, etc., may save banks and delay or distribute disaster, but will not produce prosperity. The sobered sense of the people will make them long refuse to develop busi- ness until they are assured of an adequate and permanent supply of currency based on the only possible final basis of a sound and sufficient currency — the two precious metals together, limited by the quantities in existence and the cost of production. This can be obtained by the plan I have called joint-metallism. Anson Phelps Stokes. New York, Feb. 13, 1894. EDITORIAL FROM "EVENING POST." II Editorial Article in the Evenmcr Post OF March 22, 1894. • The most unfortunate feature of the new silver movement started by Gen. Francis A. Walker in Boston is the fact that it gives the rest of the country a false impression as to public sentiment in the East. The silver lunatics of the South and West are not given to fine distinc- tions, and do not take the trouble to read with discrimination long papers on finan- cial topics. They jump to the conclusion that Walker and some other men whose names are known to them are in favor of silver coinage like themselves, and by another jump decide that this must be the sentiment of New Eng-land, This im- pression is now being given to the people of the South and West by many of the newspapers which publish and comment 13 14 yoint-Metallism. upon the Boston out givings, and it natur- ally has a marked effect in reviving the financial craze which had begun to abate after the repeal of the silver-purchase act. There is really no ground for the belief that public sentiment in Massachusetts on the silver question is any less sound to-day than it has always been, but it is not strange that the recent developments should deceive people at a distance. This is the most deplorable aspect of the matter. SECOND LETTER ON JOINT METALLISM. 15 JOINT-METALLISM. SECOND LETTER. To the Editor of the ''New York Times": The publication of my letter on joint- metalHsm, which appeared in your issue of February i8th, has brought me numerous criticisms, some entirely favorable, others that think me right, but inopportune, and others that appear not to fully under- stand the results of the plan I have proposed. Now that Congress has passed the Seigniorage bill, I again trespass upon your kind hospitality for a few further lines regarding this plan of joint-metal- lism, by which gold and silver together, at ratios always based on their relative mar- ket values, may be made the metallic 2 17 1 8 Joint-AIetallism. basis of currency and afford a sound, honest, self-regulating, and permanent currency on the only possible safe and adequate final basis, the two precious metals together, limited by the quantities in existence and by the costs of produc- tion. The new silver coins I have proposed, especially those containing looo standards each, would, for the most part, at first, be deposited in the Treasury, together with an equal amount in value of gold coins, the two together forming the appropriate basis for the Government currency issued against them. Whenever more currency should be required, gold and silver to- gether would be taken to the mint and the coined proceeds deposited in the Treasury. Whenever less currency should be re- quired, gold and silver would be together withdrawn from the Treasury and used in the arts, and less would be mined. As to the present silver dollars and other silver tokens, when the ratio becomes settled and remains unchanged for a con- siderable period, if the silver dollars and When the Ratio Beco77zes Settled. 19 the smaller silver coins be found then to differ very much from the ratio, they should be recoined, so as to be made of nearly full intrinsic value. Prior to 1873 (under "free coinage") for each 500 ounces of pure silver the mint delivered 646 silver dollars, less a charge of \ cent on each piece. .$3.23 and for copper alloy about 1. 1 1 $4.34, or about two thirds of i per cent. The coin- age of much larger pieces would cost the mint a much smaller fraction of i per cent. That the question of joint-metallism is an intricate one is no reason why it should not be studied, and discussed in the news- papers. That the ratio can only be ap- proximately exact might be urged with equal force against navigation and other sciences. Until the general public, by special study, is better able to understand ques- tions regarding the basis of currency, it may be injurious to have bimetallism 20 yoint-Metallism. made a party issue. The debate on bi- metallism is becoming so envenomed that, like the slavery question, it may make dangerous sectional trouble. Many at the East think the West is dishonest on this subject. Many at the West think the East is dishonest on this subject. The duty of patriotism is to try to find a just and honest way to permanently settle a question which cannot be finally settled by narrow and fluctuating majori- ties nor by vetoes. It will go far to promote clear thinking regarding this question if it is generally understood — First, that money is a certain poten- tiality or stored-up and readily-available energy representing the cost of the pro- duction of the precious metals. Secondly, that the real function of the mint regarding the precious metals is to stamp pieces of metal so as to indicate the weight of the gold or silver they contain. Thirdly, that Government paper money should be only certificates of the deposit of such pieces of metal. Injurious Results. 2 1 Fourthly, that for centuries the metallic money of the world has been in total value about half gold and half silver, a leofal ratio having commonlv existed be- tween the precious metals, being for a long period 15^^ to i or 16 to i, the legal sanction of the ratio being powerful enough to overcome slight differences in the relative costs of producing the two metals or their market values. Fifthly, that silver, having now become generally demonetized, and its chief use in Europe and in the United States being thus abolished, and its market value dimin- ished below the reduction in value caused by the lessening of the cost of production, certain results have necessarih' followed, ver\- injurious to our countn,- and to the world, amonor these results beinsf a o-eneral decline in values and an insufficient metallic basis of currency, makino- manu- facture and trade" both uncertain and dano^erous. The question before us is how to remonetize silver. First — Shall the United States alone ' And agricnltnre. 2 2 Joint-Metallism. attempt to fix and maintain a permanent ratio under present conditions of a demone- tized silver market ? This is impossible. Second — Shall we wait until other nations can be induced to join in fixing a ratio ? This is dangerous and unnecessary, and the ratio, if so fixed, would soon have to be changed. Third — Shall the United States decide to use gold and silver together at ratios always based on their relative market values ? This is safe and honest, and it can be accomplished by the plan I have called joint-metallism. Instead of waiting to make a law or a treaty every time a change in ratio is required to conform approximately to the market values, my contention is that we ought to establish a law now and a treaty, if possible, later, that will provide for necessary changes in ratio, although it is probable that after both metals shall have had about equal access to the mint, even in our country alone, for a period of a year or more, on the joint basis I have proposed, changes in ratio will thereafter Gemnajiy. 23 become very infrequent, and perhaps many years may pass without such a change. A few years ago it became evident to some students of economics and to the Government of Germany that the falHng off in gold production and the cheapening of silver production by improved metal- lurgy, etc., and the increase of the world's business and credits, would make inevi- table a change in the ratio, which from the beginning of the century had varied but very little.' Germany^ took advantage of her knowledge, her financial position, and her governmental methods, which enabled her to act promptly, and sold her silver for gold, and in 1871 and 1873 demonetized silver, and other nations followed her lead. Now that the market value of silver has fallen far below the cost ot its production in quantities suffi- cient for its general use as a money metal, Germany may probably be glad to follow us in joint-metallism on the plan I have proposed, and to congratulate herself on her astute operations in silver. ' See page 132. ^ M. Rochussen opposes this view. 24 Joint-Mctallisfn. It may not be necessary to have more money than we now have, but it is neces- sary to have more security as to the future value of our currency. Business cannot prosper and labor cannot be fully employed if there is danger that a few months hence a dollar, which is the term we use in con- tracts, may be worth much less or that it may be worth much more, as measured by the market values or cost of production of the precious metals together, which, in view of our Constitution and of all history, is our only fair standard. Daniel Webster said : " 1 am certainly of opinion that gold and silver, at rates fixed by Congress, constitute the legal standard of values in this country, and that neither Congress nor any State has authority to establish any other standard or to displace this standard." It is necessary to the security of the creditor that no Government money should be issued, except based on the market value of the precious metals as contem- plated in the Constitution, and it is neces- sary for the security of the debtor that he A Vein for Silver ajtda Place for Gold. 25 shall not be subject to the risk of money being made artificially scarce or dear, by laws which may restrict the metallic basis of currency to a single precious metal, the hoarding of which may be promoted by such laws, gold being a metal the produc- tion of which cannot be greatly and promptly increased by labor. The Bible says : " Surely there is a vein for the silver and a place for gold." From the earliest historic times there have been known veins where the supply of silver could be at any time largely and promptly increased. It has been always a question of cost of mining, milling, and smelting. But all great increases in the production of o-old have come from new finds, which were generally soon worked out and are less to be expected now that the world has been more explored. The great difficulty in solving the ques- tion of the safe, honest, and proper metallic basis of our currency comes from the want of general, adequate, and impar- tial study. The newspapers are best able to promote this study, and this alone can 26 yoiJit-Metallism. save us from fiat money and from money panics. It is unfortunately true that in this country of peace and freedom, of abundant land, and unrivalled resources, among a people of general education and unex- ampled energy, there is to-day much suf- fering on the part of many able and willing to labor for their daily bread. This suf- fering is directly traceable to unwise legislation caused by the want of adequate study of economic science. Anson Phelps Stokes. New York, March 22, 1894. EDITORIALS FROM "EVENING POST." 27 Editorial Articles in the Evening Post, OF March 30, 1894. Mr. Anson Phelps Stokes has a cur- rency plan called " joint-metallism," by which "gold and silver together at ratios always based on their relative market values may be made the metallic basis of currency." The reason why Mr. Stokes proposes this plan is, he says, that the general de- monetization of silver, and the great re- duction in its purchasing power, "have caused a general decline in values, and an insufficient metallic basis of currency, makinpf manufacture and trade both un- certain and dangerous." Now, this central or basal proposition of Mr. Stokes's is totally denied by the monometallists,^and that is why they will ' See Appendix pages 90, 91, 94, 95. 29 30 yoint-Meiallism. never consider his plan. They say, with one of the British delegates to the Mone- tary Conference, that the whole silver movement is simply a preposterous at- tempt to keep prices up when science, art, invention, discovery are knocking them down ; that the fall in silver has had no more to do with the decline in prices than the fall in wheat, and that nobody has complained or is complaining of any actual scarcity in the supply of gold. It has not shown itself anywhere. Many dozens of gentlemen in various parts of the world keep telling us that it is going to show itself by and by, and that they are lying awake at night thinking anxiously about it. But there is no sign of it. The supply of gold is increasing rapidly in answer to the increased de- mand for it,^ and we believe It may be said with safety, that nobody in any country has ever yet maintained that he was unable to get gold when he had some- thing to exchange for it or good security to borrow it on. In fact, nothing is ever ' See Appendix, p. 104. The Boston Brcthrc7i. 31 heard of the scarcity of gold in business circles. All we know about it we get from bimetallic pamphlets and speeches. The great demand for some other and cheaper kind of currency comes from gentlemen with debts to pay, but if we begin tinkering the currency in order to accommodate these gentlemen, the tink- ering will last for ever. The " debtor class" is the oldest class in history, and the hardest to satisfy, and the least inter- esting. The class which most demands the care of the legislature is the creditor class — that is, the class which has wages to receive, and savings in the bank, and Government bonds in its boxes. Apropos of this it may be said to the Boston brethren who are sounding the trumpet of alarm over silver, that it is absurd of them to stay in the bimetallic camp. Their central proposition, that Governments by laying their heads to- gether can keep two commodities at equal value, in spite of difference in quantity, in cost of production, and in market 32 Joi7it'Mctallis7ii. price, applies, though they do not seem to see it, to other commodities than gold and silver. It would apply just as well to copper and gold or copper and leather as silver and gold, and is ample support for the greenback theory. There is no reason in the world, on this theory, why the Government should not discard metallic money altogether, and agree that certain stamped paper should in their dominions have a certain value in exchange. In old times, when a Government adulterated its coinatre — that is, ordered it to pass at a fictitious value — it acknowledged it was cheating, and locked up anybody who said anything about it. The curious feature of the bi- metallic and silver craze is that its victims want the civilized Governments to do this cheating in unison, by common consent, and in the licrht of dav. The prospect opened to the modern world by this confession of ordinarily sensible and educated men that the Gov- ernment has this power over currency, it is no exaggeration to call appalling. It Aimnunition of the Most Deadly Kind. '^■}^ is ammunition of the most deadly kind for the sociaHst, communist, popuHst, and anarchist, and has the promise and po- tency of such monetary confusion as has never been seen in any age. THIRD LETTER ON JOINT- METALLISM. 35 JOINT-METALLISM. THIRD LETTER. To the Editor of the " Evenmg Post " : Sir : A leading article in last Friday's Evening Post beginning "Mr. Anson Phelps Stokes has a currency plan called * joint-metallism,' " and your following article commencing " Apropos of this," might, I fear, cause some who had not seen my letters on joint-metallism to sup- pose, mistakenly, that you intended to associate what I have written with the writings of those who desire a dishonest currency, or who you say furnish " ammu- nition of the most deadly kind for the socialist, communist, populist, and anar- chist." You do not quote the particulars of my plan for "joint-metallism," nor the pro- 37 .iiH.qi f^2 38 Joint-Metallism. vision in it that it shall not affect any debts except those contracted six months after it becomes law. No one can point out any line that I have written that in any way favors dishonesty or anarchy. What I am contending for is " an honest, adequate, self-regulating and per- manent basis of currency," to prevent fiat money, and to find, as I have said, "a just and honest way to permanently settle a question which cannot be finally settled by narrow and fluctuating majorities nor by vetoes." You say that monometallists totally deny that the demonetization of silver and the great reduction in its purchasing power, etc., have caused a general decline in values, etc., and you refer to British authority. The Parliamentary Commission on gold and silver which considered substantially this question were equally divided in their report, six members holding to one side and six to the other. Their final report was made in 1888. Since then a distin- guished member, among those who then Precious Metal the Final Basis. 39 held that the general demonetization of silver, and the great reduction of its pur- chasing power, or, in other words, the appreciation of gold, had not caused the general decline in values, has since publicly declared, in 1893, that further study has convinced him that he was in error on this point when he signed the report five years before.^ I do not object to that reduction in values which comes from science, art, in- vention, and discovery, but I do object to the unjust enhancement of the value of gold caused by making it the sole money metal and the sole final basis of currency. The only final basis of all sound cur- rency is precious metal. For centuries the money of the world has been in total value about half gold and half silver. If this final basis be now limited to gold alone, then the final basis is diminished by about one half. Money may then be plenty in banks because enterprise fears to use it, and trade languishes and labor- ers are unemployed. ' See Appendix, page 104. 40 yoint-Metallism. Even where only one of the precious metals has been in actual oreneral use as money, the fact that both were legally available has been the important fact. In your issue of March 2 2d you depre- cate the present revival of the silver ques- tion in the East, as giving encouragement to " silver lunatics at the South and West." ^ But so long as our Government is based on popular suffrage, free and full discussion of this question is as necessary as it is inevitable. If there had been more thorough, fair, and impartial discussion of the silver problem, the absurd Sherman act would never have been enacted, and instead of it I think we might have had a law for the use of " gold and silver together at ratios always based on their relative market values." I do not want dishonest currency, nor have I any favorable regard for anarchy ; but, in company with many more compe- tent students of economics, abroad and here, I hold that an honest and practica- ' See page 13. Tue Discussion Timely and Important, 4 1 ble way can be found to permanently restore silver to its historic^ and just posi- tion as a money metal, and that this will be of inestimable benefit to the world, and especially to our country. Therefore, with all becoming trepida- tion, standing, as I feel I am, face to face with that greatest of American mono- metallists, the distinguished author of the World's Fair address on "The Gold Standard," I venture the opinion that the full and temperate discussion of the silver question in the press is most timely and important, and that many who are not monometallists are neither dishonest per- sons nor lunatics. Anson Phelps Stokes. New York, April 4, 1894. ' See Appendix, page 80. EDITORIAL FROM THE "EVEN- ING POST." 43 Editorial Article in the Evening Post, OF April 5TH, 1894. THE GODDESS ARGENTUM. We print elsewhere a letter from Mr. Anson Phelps Stokes on his system of " joint-metallism," in reply to some re- marks of ours the other day. Far be it from us to accuse Mr. Stokes of sympathy with dishonesty or anar- chism, or of any desire or intention to aid or abet them, Of course it would be silly to do so. But a strict regard for truth compels us to express, as often as the opportunity offers, our solemn con. viction that all attempts, whether made in Boston or New York, to persuade the world that the use of silver as full money of account, whether jointly with gold or not, is in any sense a duty of the Govern- 45 46 Joint-Metallism, ment, or is called for as a protection for the poor man against "gold-bugs" or " Wall Street sharks," promote popu- lism, communism, anarchism, greenback- ism, and simple silverism, and do threaten this country with unnumbered woes. Nearly all the trouble has arisen out of the personification of silver as a moral being which began in 1 877-1 878, and of which we find a trace in Mr. Stokes's let- ter where he speaks of the " historical and just position " of silver.^ This, if it means anything, means that there is some position in the currency or financial ar- rangements of the nation, which is due to silver as a matter of right and by prescrip- tion, that it can, as an individual or a cor- poration can, claim a place in our medium of exchange, of which we cannot deprive it without a breach of the moral law. To our minds there has been nothino- more extraordinary than this since Moses, on coming down from the mountain, found the Israelities, in spite of the most patent proofs of divine sovereignty, worshipping ' See Appendix, page 80. Historical and Coiistitutional Positio7i. 47 a golden calf of their own making. It il- lustrates admirably what to many people now seems incomprehensible, the tend- ency of the whole ancient world to mytho- logical explanations of the universe. The notion that silver has rights and virtues, that it is courageous and faithful to its friends, and loves the poor, and has made itself an historical place, and is entitled to justice — all of which propositions have been maintained during the last fifteen years by American orators and writers — shows how near we are, in spite of Chris- tianity and science, to the state of mind in which men deified the moon and sun, the mountains, the streams, and even wild beasts and oxen. To us silver has the same historical position, and has the same rights under the moral law and the United States Con- stitution,^ as wheat or leather, wampum or cowries, or coal. There was a time when wheat was twice as dear as it is now, but did it acquire an historic right to be kept at that price, and do we insult it by ' See Appendix, page 80. 48 yoint-Metallism. selling it at 64 to 66 cents a bushel ? It has played a more prominent part in the world's history by far than either silver or gold, and ought to have a far higher place in our affections than either. And yet it is bought and sold on margins by Chicago and other speculators, with an indiffer- ence to its peace and comfort which is well calculated to excite the indignation of an honest worshipper. Most other commodities which have played a prominent part in the growth of our civilization have the same story to tell. The march of science has cheapened them, by lessening their value to mankind, but if they are to be worshipped as silver is — that is, treated as moral beings instead of simply brute instruments of human com- fort and convenience, we must go back to barbarism. All who know India acknowl- edge that the sanctity of the cow is in that region a serious hindrance to prog- ress. It cuts the Hindu population off from both beef and a good quality of lea- ther. It sometimes leads, as the other day in Bombay, to riots and murders. It Whai is the Remedy f 49 is, of course, difficult for those who look on the cow as simply an animal which furnishes milk and hides, to avoid occa- sional displays of irreverence or levity in her presence, and this wounds the Hindu, as our silver-men are wounded by want of respect for silver, in their tenderest part. But what is the remedy? None that we know of except the growth of knowledge and more scientific conceptions of the universe. Silver is a metal which mankind has found useful as currency in times past, when its value, like the value of nearly all commodities, was pretty steady.^ Various circumstances, concerning which there is more or less dispute, have deprived it of a good deal of its usefulness as currency, and there is a general disposition among the nations which can afford gold, to dis- card it. The one way to meet this tendency is to show that the value of silver is likely to be again steady. To claim for it divine honors or moral rights is simple paganism ' See Appendix, pages 94, no. 4 50 Joint'Metallism. and immensely ridiculous. Hides were once wonderfully useful as clothing. In- deed, they were, in northern climates at least, probably the first clothing man put on after his own hide became too tender for exposure. Did this give hides an historic position ? Did it give them a claim to justice ? Did it make the use of broad- cloth a wrong to them over which the human conscience should reproach itself ? FOURTH LETTER ON JOINT- METALLISM. 51 JOINT-METALLISM. FOURTH LETTER. To the Editor of the " Evenmg Post " .• Sir : I have read with much interest your courteous and interesting article in yesterday's Evening Post on "The Goddess Argentum." To worship a goddess with so unfemi- nine a name would be indeed shocking. I am opposed to idolatry, monometallism, and inflation. You say that the mono- metallists will never consider my plan be- cause they totally deny that the demoneti- zation of silver and the great reduction in its purchasing power have caused a gen- eral decline in values, etc. The following clause in my plan makes it entirely unpalatable to all who want cheap currency to pay their debts with : 53 54 Joint-Metallism. " Let it be enacted that for all debts, public or private, of $io and upward, con- tracted after six vionths front the passage of the act," etc. But between the monometallistsand the inflationists there is a large class that will finally decide this question — the thrifty common people, who are pretty sure, in time, to get at the right of any ethical question and any ordinary business ques- tion. These plain people, the mass of the voters in our country, have no sympathy with dishonest debtors, nor have they any desire to allow creditors any unfair ad- vantage. They do not quickly grasp financial problems that require special study, but they would sooner understand these prob- lems if an independent press would furnish facts and arguments in a non-partisan and non-sectional spirit, allowing both sides to be fairly heard. Your fairness in printing views of corre- spondents that honestly differ from your own, is worthy of all commendation. It is of these common people that Abra- What Lincoln Said, 55 ham Lincoln said : " Those whom the Lord prefers, because He has made so many of them " ; and to quote again from Lincoln : " You can fool all of the people some of the time and some of the people all of the time, but you can't fool all of the people all of the time." They will come to see that it is not for their advantage to have a debased cur- rency, and at the same time they will see that if the final basis of currency be re- stricted to one kind of article alone, as, for example, city lots or eight-carat dia- monds, or ocean steamers, or gold, then capitalists are given an unfair opportunity to monopolize such final basis, and that values of farms and products, wares and merchandise will decline, and business and employment become uncertain. You say the supply of gold is increasing. For what considerable period of late years has there been any important increase ? Has it increased in proportion to the in- crease in national debts or the increase in the world's trade and population ?^ ' See Appendix, page 90. 56 Joint-Mctallism. A report issued by the Treasury about January i, 1894, gives the per-capita stocks of money as follows : France $36 . 81 United vStates 26.02 Great Britain 20.40 Germany 18 . 56 China 1.80 Will not the 400,000,000 of China require more than this now that they are getting railways ? You and other eminent Ameri- can monometallists, as Messrs. Sperry, Bourne, Wells, Laughlin, Atkinson, etc., etc., quote often the statements regarding the production of gold, as compiled by Dr. Soetbeer for the years 1493 to 1885, ^^d as estimated for the years 1886 to 1892 by the Bureau of the Mint. These and other instructive tables are conveniently found at the back of the most orthodox mono- metallist speech of Hon. Lewis Sperry in the House of Representatives, August 21, 1893.^ In 1688 the debt of Great Britain was /664,ooo. It is now ^685, 000,000. That is, it is more than one thousand times as large as it was in 1688. ' See Appendix, page 105, etc. Production of Gold. 5 7 PRODUCTION OF GOLD IN THE WORLD." Period. Annual average of Period Annual average of period, in fine ounces. period, in fine ounces. 185I-1855 6,4io,32d 1886 5,127,750 1856-1S60 6.486,262 1887 5,093,984 1861-1S65 5,949,582 1S88 5,316,412 1866-1870 6,270,086 1889 5,746,950 1871-1875 5.501,014 1890 5.473,631 1876-1880 5,543,110 1891 5,830.107 1881-1885 4,794,755 1892 6,328,272 ■ In 1688 the production of gold was about 346,000 ounces. It was, in 1892, 6,328,272 ounces. That is, it was in 1892 eighteen times as large as it was in 1688. I think the sober sense of the people will decide that they don't want inflation and that they don't want monometallism, but that they do want to return to a larger use of silver, if it can be arranged for con- veniently and honestly, and that this can be accomplished by making the basis of our currency both gold and silver in equal parts, based on market values, and to be legal tender for future debts. Anson Phelps Stokes. New York, April 6, 1894. ' See Appendix, page 106. 58 yoint-MetallisTn. [To make the above table of the gold increase thoroughly comprehensible and pertinent, the diminishing part played by gold in the transactions of life should also be set forth/ Less than 5 per cent, of the work of exchange in London and here is now done by gold. Checks were un- known in 1688. If the Chinese or any other people want more money they will get it in the usual way. Bimetallists need not lie awake about it. — Ed. Evenmg Post.l • See page 68. EDITORIAL FROM THE ''EVEN- ING POST." 59 Editorial Article in the Eventing Post OF April 17th, 1894. It was most unfortunate that so many- people here at the North beHeved that the victory of sound currency was completely won when the Sherman law was repealed. The truth was that it left untouched in a large part of the country the great delu- sions out of which the Sherman law sprang and which it was intended to satisfy. Its repeal was simply a surrender to stern ne- cessity. There was no money in the Treas- ury to continue the purchases for which it provided. Foremost among these delu- sions was the belief that the Government can raise or lower the standard of value ; that it is its duty to supply money to the people, and that the bankers and others who refuse to lend it without security are selfish and designing persons, who ought to be taxed into good behavior. 61 62 Joint'Metallism. The first duty of intelligent men, when the struggle of last fall was over, was, it seems to us, to engage heart and soul in the great work of public instruction as to the nature and functions of money, and to abstain rigidly, for a while at least, from any words or acts which would be likely to aggravate the prevailing popular errors on this subject — errors more threatening probably to the immediate economical future of the country than any with which we have ever had to contend since the foundation of the government. The ap- pearance of the currency in the political arena was the greatest misfortune which has befallen the nation except the civil war. FIFTH LETTER ON JOINT- METALLISM. 63 JOINT-METALLISM. FIFTH LETTER. To the Ptiblic : Referring to my previous letters on Joint-Metallism and to the newspaper criticisms thereon and the suggestions that such discussion of the silver question is injurious at this time, I desire to say, that the danger of the situation does not come from discussion but from the facts and from the want of more thorough, im- partial and general discussion. A Scotch Highland minister, preaching from the text " Can the Ethiopian change his skin, or a leopard his spots ? " explained that an Ethiopian was a black man and that a leopard was a spotted man suffer- ing from leprosy. After the service an English clergyman 5 65 66 Joint-Metallism. tried to kindly explain to the Highlander that he had confused the words leopard and leper. The reply was : " Avoid criticism. It will lead you into all kinds of infidelity." Some dangers of the pi^esent situation} The national debts of the world are now so enormous and increasing so rap- idly that if they continue to be extended payable in gold alone, the base will be found insufficient to support the super- structure. Another danofer is the enormous amount of railway bonds^ coming due about the beginning of the next century, while one fifth of the total mileage of railways in this country is already being run by re- ceivers under directions of courts which are looking to the interests of the com- munities and the laborers and refuse to allow wages and some other expenses to be reduced on bankrupt roads. Another danger, and one that shows the need of promptly settling the currency ' See I'age 141. ^ And other bonds. Dangers of Present Situation. 67 on a just and permanent basis, is found in the last legal-tender opinion of the United States Supreme Court, 1884. " Under the power to coin money and regulate its value, Congress may issue coins of the same denomination as those already current by law, but of less intrin- sic value than those (as in 1834) by reason of containing a less weight of the precious metals, and thus enable debtors to discharge their debts by the payment of coins of the less real value." It is admitted by monometallists that if the Secretary of the Treasury had made a different use of his discretion as to pay- ing out gold and silver, or if the Presi- dent had made a different use of his veto power, we would now be on a silver basis or rapidly approaching it ; and the news- papers daily refer to the great difficulty which the Secretary of the Treasury now experiences in his efforts to maintain even the very small gold reserve of $100,000,000. Single capitalists or either one of the largest insurance companies in the city of 68 yoint-Mctallism. New York have more assets than all the gold in the United States Treasury. It would be easy for speculators to draw all the gold out of the Treasury. A combination to lock up gold might cause serious trouble. As to the claim of monometallists in every country that gold can always be got from abroad, the statistics show that there is not nearly enough gold on any sound banking basis for any time of general liquidation in several great countries at once. In some parts of Ireland a small piece of pork used to be suspended by a string from the roof of the hut and the poor peasants sitting around in a circle on the earth floor would eat their potatoes and point at the pork, so that a whole family were supposed to derive satisfaction from a piece of pork sufficient for one indi- vidual. The fact that the business of the world is done now so largely by checks and credits is an element of danger making it more necessary that there should be no Mr. Gladstone s Frank Statement. 69 uncertainty as to the adequacy of the final basis of the currency. The above are only some of the many dangers of the present situation showing the necessity for a thorough study and complete understanding of the question of the final basis of currency, and for prompt and efficient efforts to place our currency on a sound, adequate, permanent, and self-regulating basis. It is neither necessary nor wise for us to wait for England to act. Her great banks, bankers, promoters, and holders of mortgages have a special interest in desiring a single gold standard as frankly owned by Gladstone. But the mercantile, manufacturing, and agricultural classes and masses there are beginning to under- stand the position, and are daily increas- ing their active work against monometal- lism. There is one circumstance which would make my plan for Joint-Metallism more easily understood in England. The commutation of tithes in England is based upon the average market values Jo yoznt-Mctallzsm. of wheat, oats, and barley jointly. This may be called yoiiit-Cerealism. The Evening Post is right in urging " intellio^ent men" "to enpfaee heart and soul in the great work of public instruc- tion as to the nature and functions of money." One of the most important of such teachings is that all sound currency must have a sufficient basis of precious metals so as to be always convertible into coin. The people of the United States prefer to use sound convertible paper money instead of coin. Probably not 5 per cent., perhaps not I per cent., of the present population, outside of the great cities, have ever seen a gold-piece. The total amount of silver dollars No- vember I, 1893, was: In circulation 58,725,818 ' In the Treasury 360,606,732" Total coinage 419-332, 550 Pieces of looo "Standards" would be more suitable than silver dollars to be 'July I, 1S96, 52,175,998. =July I, 1S96, 371,303,176 Standard vs. Medhiin. 71 deposited in the Treasury for silver certifi- cates, and, when deposited together with gold, would comply with the requirements of the Constitution of the United States/ In discussions regarding monometal- lism and bimetallism, the terms Standard and Medium are sometimes confused. A Standard may be purely ideal or in- tangible. But to be of practical use it must be expressed by, in, or through a Medium. A certain portion of the arc of a great circle is an ideal or an intangible standard of length. When this is expressed by or in a metal measure, as a yard or a meter, the metal is the medium, and is longer when warm and shorter when cold. If the metal be of zinc, it will be too frail ; if copper, too soft. Brass, which is a mix- ture of these two metals, is more suitable. Labor is an ideal standard of value. When it is stored up or expressed in gold, gold is the medium. As gold can- not be increased in proportion to com- ' See pages 24 and 80. 72 Joint-Metallism, modities generally, it is not a just medium by which to express the standard of value. Silver has increased more than most other commodities, and it is, therefore, not a just medium for this purpose. The excessive increase has been caused largely by the legal ratio between silver and gold having been pei'manently fixed, and be- low the relative costs of production. But gold and silver together, half of each, at values always based on market prices, make the best medium for express- ing the standard of value, the most suitable medium for measuring and stor- ing up energy. The history of civilization shows that they have been used about equally as the money of the world. Burke perhaps furnishes an illustration of a compound standard when he says : "A disposition to preserve, and an ability to improve, taken together, would be my standard oi a Statesman." Believing that facts and plain state- ments are more needed than rhetoric, I have thrown together in the Appendix a Prominent Monometallists. I o number of facts and statistics with the declarations of those whom American monometalhsts claim as their best friends, and the admissions of such leading mono- metallists as Dr. Robert Giffen, author of Essays in Finance, The Case against Bimetallism, The American Silver Bubble, etc. ; Hon. David A. Wells, LL.D., D.C.L., etc., etc., the most distinguished of all our political economists and a champion of monometallism ; The London Statist, that stalwart mono- metallist ; And I claim that these prove the neces- sity of using both gold and silver together as the basis of our currency. If the people have a right to demand that all money shall be a just and true measure of value, or the representation of a just and true measure of value, accord- ing to Secretary Carlisle,^ And if labor itself is the real standard of value, as stated by Doctor David A. Wells,^ . ' ' See Appendix, page 84. - See Appendix, page 85. 74 y oint-M ctallisni. And if labor is continually increasing its power of producing all products except gold, as shown by Doctor Robert Giffen/ Then it is obviously unfair and danger- ous to make gold alone the metallic basis of our currency. If President Cleveland was right when he said,' " I hope a way will present itself in the near future for the adjustment of our monetary affairs in such a comprehen- sive and conservative manner as will afford to silver its proper place in our currency," then I may reasonably ask all reasonable monometallists and all reasonable bi- metallists fairly to consider the plan I have proposed, for I claim that it is precisely what the President hoped for. I am not now debating any question regarding debts already contracted. My plan refers only to providing a currency on a just and safe basis for contracts to be made after the passage of the act. Safety and equity lie in wedding the two metals tocrether as in that clever ar- ■ See Appendix, page 88. * See Appendix, page yg. JV/iat the President Hoped For. 75 rangement of the brass pendulum sup- porting glass tubes containing quicksilver. Increase of heat lengthens the brass arm, and at the same time raises the quick- silver so that the centre of weight in the pendulum is maintained at a constant dis- tance from the point of suspension. Both our great political parties at their conventions have declared, in the most distinct manner, in favor of preserving the parity of gold and silver, and using both metals together in our currency. The President and the Secretary of the Treasury and both Houses of Congress have all most distinctly committed them- selves to this policy.^ The only difficulty is to find some plan to accomplish this in an honest, safe, and permanent way. Such a plan I have endeavored to set forth in my first Letter on Joint-Metallism.^ Anson Phelps Stokes. New York, April 26, 1894. ' See Appendix, page 84. ^ See page 5. See also page 121. APPENDIX. 77 APPENDIX. President Cleveland's Message, March 29, 1894. " If both gold and silver are to serve us as money, and if they together are to supply our people a safe and stable cur- rency, the necessity of preserving this parity is obvious. " I hope a way will present itself in the near future for the adjustment of our monetary affairs in such a comprehensive and conservative manner as will afford to silyerjts-proper place in our currency." 8o yoiiit-Metallism. Constitution of the United States, Article i. Section viii. Paragraph i. — " The Con- gress shall have power . . . Paragraph 5. To coin money, regulate the value there- of, and of foreign coin, and fix the stand- ard of weights and measures." Section x. Paragraph i. — " No State shall . . . make anything but gold and silver coin a tender in payment of debts." The above shows the "historic and just position " of silver as a money metal under our Constitution. See page 24. Appendix. 8 1 Democratic Platform. " 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 exchange- able value, or be adjusted through inter- national agreement, or by such safeguards of legislation as shall inszire the mainten- ance of the parity of the two metals, and the equal power of every dollar at all times in the markets and in the payment of debts ; and we demand that all paper currency shall be kept at par with and redeemable in such coin."- — Democratic National Con- vention held in Chicago, 21st June, 1892. 82 yoint-Metallism. Republican Platform. " 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 such restrictions and under such pro- visions, 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.'' — Republican National Convention, June 7, 1892. "Every dollar put into the hands of the people should be of the same intrinsic value or purchasing power. With this condition absolutely guaranteed, both gold and silver can be utilized upon equal terms in the adjustment of our currency." — Hon. Grover Cleveland's letter, Sep- tember 26, 1 892, accepting the Democratic nomination. "The Republican party is friendly to a restitution of silver to a place of honor Appendix. ^2> among the money metals of the world. (Applause.) Some of my friends in the West thought I was uttering new doc- trines when I declared that I believed the free use of silver upon an international agreement that would assure its continued equality with gold, would do more than anything that I know of, save the estab- lishment of the protection principle, to bring again prosperity into our commerce. (Applause.) The trouble upon this ques- tion has been that some of our Western friends would not receive any man as the friend of silver who believed that we could not coin it freely and maintain its parity with crold without coming- into an arrange- ment with the other orreat commercial nations of the world. " They should have been more liberal. I believe to-day that we can see in Eng- land, the nation that has stood most strongly against the larger use of silver, and in Germany, a nation that has fol- lowed Enorland, the clear indications of the growth of a sentiment for an inter- national agreement upon this question. 84 yoint-Metallism. It is increasing in power ; and I believe, if rightly and wisely encouraged and directed from America, it will finally bring other nations, by the compulsion of their own necessities, into accord with us upon this subject." (Applause.) — Ex- President Harrison — Speech at Indian- apolis, April 25, 1894. "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 pro- vided by law." — Act of Congress, Novem- ber I; 1893. " Whether it [money] be gold or silver or both, or paper based upon the coins of the two metals, the people have a right to demand that it shall be in fact what it purports to be — a just and true measure of value, or the representative of a just and true measure of value." — Hon, John G. Carlisle, Secretary of the Treasury. — Speech at Chamber of Commerce Ban- quet, November 21, 1893. Appendix, 85 " There can hardly be a better rule in any country for the legal than the market proportion, if this can be supposed to have been produced by the free and steady course of commercial principles." — Alex- ander Hamilton, " Report on the Estab- lishment of a Mint." " The proportion between the values of o-old and silver is a mercantile problem altogether." — Thomas J efferson," On the Establishment of a Money Unit and of a Coinage for the United States." " Labor' itself is the real standard of value to which the prices of all the pro- ducts of labor must adjust themselves." — D. A. Wells, Practical Economics, p. 35. " Viewing a long period dynamically, it is beyond all question that commodities are comparatively steady and only the money changes."^RoBERT Giffen. " I venture to ask your publication of this short letter, because it is the great depreciation of the currencies of silver- ^ " Labor is the universal and accurate measure of value."— Adam Smith. 86 yoint-Metallism. using nations which is destroying Eng- land's exports to 700,000,000 of those who were formerly her best customers, and it is for this reason, and this only, that the terrible fall in the Eastern rates of exchange since last July has converted London by wholesale to bimetallism, grudgingly and unwillingly, I admit. . . . Yours faithfully, Moreton Frewen, New York, April 24, 1894." — From a letter to the New York Tribune. The Tabular Standard in Massachusetts. "Boston, January i, 1780. — In behalf of the State of Massachusetts Bay, I, the subscriber, do hereby promise and oblige myself and successors in the office of Treasurer of said State, to pay unto Asa Kider or to his order, the sum of £2^(^.- 11.3 on or before the first day of March, in the year of our Lord 1781, with inter- est at 6 per cent, per annum ; both princi- pal and interest to be paid in the then current money of said State in a greater or less sum, according as fiv^e bushels of corn, sixty-eight pounds and four-sevenths parts Appendix. 87 of a pound of beef, ten pounds of sheep's wool, and sixteen pounds of sole leather, shall then cost more or less than one hun- dred and thirty pounds current money, at the then current prices of said articles. This sum being thirty-two times and a half what the same quantities of the same arti- cles would cost at the prices affixed to them in a law of this State made in i ']^'] entitled, * An act to prevent monopoly and op- pression.'" — A. Gardner, Treasurer of the State of Massachusetts Bay. "Between 1851 and 1870 the new supply of gold available for currency averaged $92,000,000. Between 1871 and 1 88 1 it had fallen to $24,000,000." — A. SOETBEER. " About two thirds of the gold annually produced is taken for the arts ; and if the consumption of India is included, as being <^ither for simple hoarding or for the arts, and in no case for the purpose of circu- lating money, then the demand for gold for non-monetary purposes appears almost equal to the entire annual production." — Robert Giffen. 88 Joint-Metallism. Since the discovery of America the world's total production of the precious metals has been in weight about five per cent, gold and ninety-five per cent, silver. The extremes have been : 1581-1600, average 1.7 % gold, 98.3 % silver i85[-i855 " 18.4 " 81.6 In 1892 it was 4. " 96. " It is instructive to note how very much more these proportions have varied than have the relative market prices of gold and silver. For one hundred and eighty-six years (1687 to 1873) the commercial ratio of gold to silver was never less than 14.14, and never more than 15.95, except^ In 1808, when it was 16.08 " 1S12, " " " 16.11 " 1813, " " " 16.25 See Soetbeer's tables, and Pixley & Abell's tables. " It is quite conceivable that if gold were to increase in quantity and its cost of pro- duction to diminish, as other commodities ' ."^ce iioie, page 132. Appendix. 89 increase in quantity and have their cost of production diminished, there would be no change of any kind in gold prices. Com- modities would be more abundant, but the abundance would make itself felt in a rise of money wages, salaries, rents, and profits, and not in lower prices. That it is felt in lower prices now appears to be absolute proof that the relation between gold and commodities has changed, that they have not increased in quantity and had their cost of production diminished pari passu. In addition, however, while not denying that there has been a change on the commodities side of the balance, I would go farther and maintain that what has happened to gold in the way of diminished production and increased de- mands upon it, arising from other causes than the multiplication of commodities, must have had great effect." — Robert GiFFEN. " But the result of carrying on larger and larger transactions on a narrow basis of coin or bullion is to magnify the rela- 90 Joint-Metallisvi. tive importance of changes on that article. It may still be true, and I believe it is true, that the bullion in a country under a given set of conditions is the final meas- ure of prices in that country."- — Robert GiFFEN. " Population and production are con- stantly being increased, and the gold used for reserves and small chanee must be increased in proportion." — Robert Gif- FEN. " I should say also that, allowing for almost any progress in the modes of working the precious metals, and for further discoveries like those of Australia and California, the probabilities now are that on the whole this insufficiency of the supply of the precious metals is likely to be permanent." — Robert Giffen. " A large and sudden abstraction from the money of a country, if that were con- ceivable, would be equally potent for mis- chief. The rich would become enormously richer, and the poor enormously poorer." — Robert Giffen. Appendix. 9 1 " Prices are the expression of a relation of quality between commodities and gold of course what is said of gold would be true of any other metal used as money." — Robert Giffen, " If we are rio-ht in holdinor the view which we unquestionably entertain, that the increase of the gold out-put of the world will soon bringr about a rise of prices." — London Statist, February 3, ]894.^ The Banks of Venice and of Amster- dam issued certificates of deposit and promissory notes long before the Bank of England was established. " At the commencement of the reign of Hian-Tsoung, of the Thang dynasty, in the year 807 of the Christian era, and on the occasion of a great famine, the Em- peror decreed that all merchants and wealthy persons should deposit the whole of their gold and silver in the public ' This IS a very important and late admission as to the effect upon prices of any reduction in the total supply of money metals whether caused by demonitization or by lessened pro- duction. 92 Joint-Mctallisin. treasury, and in return there were de- livered to them notes called ' fey thsian,' or ' flying money.' Three years after- ward this paper money was called in at Pekin, but its circulation continued to be authorized in the provinces. In a. d. 906 the paper currency was revised by another Emperor, merchants being permitted to deposit their bullion in the exchequer, and to receive in exchange notes called ' running money.' In 102 1 this currency represented a value of nearly three million ounces of silver." — Klaproth Asiatic Jour- nal, for 1822. paper currency Marco Polo found money in China. From Report of the Director of the Mint for iSg/f.^ page 161. COINAGES OF NATIONS. Countries' 1892. 1893. 1S94.' Gold. Silver. Gold. Silver. Gold. Silver. Japan. . . . China. . . . $1,319,525 $12,307,062 3,500,000 $1,306,070 $12,300,705 4,249,960 $1,576,440 $24,131,363 6,000,000 ' From Report for 1895. Appendix. 93 " The Republican party is in favor of the use of both gold and silver as money, and condemns the policy of the Demo- cratic administration in its efforts to de- monetize silver." — Republican National Platform plank of 1888, reported by Wil- liam McKiNLEY, Chairman of the Com- mittee on Resolutions. " We know we cannot have free coin- age now, except in the manner as provided in the bill. ... I say that to defeat this bill means to defeat all silver leo-islation and to leave us with two millions a month only, when by passing this bill we would have four and a half millions a month of Treasury notes as good as gold. For one, Mr. Speaker, I will not vote against this bill and thus deprive my people, and my country, and the laborers, and the produ- cers, and the industries of my country of thirty millions annually of additional cir- culating medium." [Great applause on the Republican side.] — William McKinley, in his speech as Chairman of the Ways and Means Committee and leader of the House of Representatives, June 7, 1890. 94 yoint-Metallism. " The value of money in general is the quantity of all the money in the world in proportion to all the trade." — John Locke. " That commodities rise and fall in price in proportion to the increase or dim- inution of money, I assume as a fact that is uncontrovertible." — Ricardo. Extracts from the Fuial Report of the Royal Cominission on gold and Silver, 1888. Part I (signed by all the members of the Commission). Sec. 189 — "Looking then to the vast changes which occurred prior to 1873 in the relative production of the two metals without any corresponding disturbance in their market value, it appears to us diffi- cult to resist the conclusion that some in- fluence was then at work tendincr to steady the price of silver, and to keep the ratio which it bore to gold approximately stable." Sec. 190— "Prior to 1873 the fluctua- Appendix. 95 tions in the price of silver were gradual in their character, and ranged within very narrow limits. The maximum variation in 1872 was |d. and the average not quite y^'gd., while in 1886 the maximum was 23\d., and the average nearly i-^d. It has not been, and indeed hardly could be, sug- gested that the difference can be ac- counted for by changes in the relative production or actual use of the two metals." Sec. 193 — " Nor does it appear to us rt;/rz'^rz' unreasonable to suppose that the existence in The Latin Union of a bi- metallic system, with a ratio of 15!^ to i fixed between the two metals, should have been capable of keeping the market price of silver steady at approximately that ratio. " The view that it could only affect the market price to the extent to which there was a demand for it for currency purposes in The Latin Union, or to which it was actually taken to the mints of those coun- tries, is, we think, fallacious. g6 yoint-Metallism. Part II. Signed by six Members of the Commission : Lord Herschell, G.C.B.; Sir C. \V. Freemantle, K.C.B.; Rt. Hon. Sir John Lubbock, Bart., M. P.; Lord Farrer ; Mr. J. W. Birch ; Rt. Hon. Leonard H. Courtney, M.P.' Sec. 99. — We may summarize our con- clusions upon this part of the case as follows : We think that the fall in the price of commodities may be in part due to an appreciation of gold, but to what extent this has affected prices we think it impossible to determine, with any ap- proach to accuracy. We think, too, that the fall in the gold price of silver has had a tendency opera- ting in the same direction upon prices ; but whether this has been effective to any, and if so to what extent, we think equally incapable of determination. We believe the fall to be mainly due, at all events, to circumstances independent of changes in the production of, or de- mand for, the precious metals, or the altered relation of silver to eold. As regards the fall in the gold price of silver, we think that, though it may be ' Mr. Courtney changed his opinion later on the question of the appreciation of gold, etc. See Appendix page 103. Appendix. 97 due in part to the appreciation of gold, it is mainly due to the depreciation of silver. Sec. III. We may point also to an advantage of a different character which might perhaps arise from the adoption of bimetallism. There seems reason to believe that the production of gold has been diminishing, and it is uncertain whether this diminution has reached its lowest point. On the other hand, there is some reason to suppose that the use of that metal in the arts is likely in the future to increase. There can be no doubt too that the popu- lation and commerce of nations having a gold standard may be expected to increase largely. Under these circumstances it may be open to argument that the vast superstruc- ture of credit, which rests upon the gold basis, would run the risk of being dis- turbed if the standard were found to be appreciating. If, on the other hand, credit were founded on a bimetallic instead of a gold standard, the base upon which 98 Joint-Metallism. the fabric rests might be enlarged, and the danofer to which we have alluded might be diminished. Sec. 119. Apprehensions have been expressed that if the bimetallic system were adopted gold would gradually dis- appear from circulation. If, however, the arrangement included all the principal commercial nations, we do not think there would be any serious danger of such a result. Such a danger, if it existed at all must be remote. It is said, indeed, by some that if it were to happen, and all nations were to be driven to a system of silver monometallism, the result might be re- garded without dissatisfaction. We are not prepared to go this length, but, at the same time, we are fully sensible of the benefits which would accrue from the adoption of a common monetary standard by all the commercial nations of the world, and we are quite alive to the advantage of the adoption by these na- tions of an uniform bimetallic standard as a step in that direction. Appendix. 99 Part III. Signed by the other six Members of the Com- mission : Rt. Hon. Sir Louis Mallet, C.B.; Rt. Hon. A. J. Balfour, M.P.; Rt. Hon. Henry Chaplin, M.P.; Sir D. Barbour', K.C.S.L; Sir W. H. Houldesworth, Bart., M. P.; Mr. Samuel Montagu, M.P. Sec. II. In Sec. 47 of Part II., our colleagues express the view that "the greater part of the fall has resulted from causes touching the commodities rather than from an appreciation of the standard ; and again in Section 99, " we believe the fall to be mainly due, at all events, to circumstances independent of changes in the production of or demand for the precious metals, or the altered relation of silver to gold." From this view we feel bound to dissent. The importance of the question whether the incapacity of the existing stock of gold to meet the currency requirements of the world arises from the fact that those currency requirements are increasing through the growth of commerce and of population, or through the monetary policy of particular nations, may easily be exaggerated. In our opinion it is almost impossible to distinguish between these two sets of causes. A great increase in I oo Joijit-Mctallism. the production of commodities means a great increase in wealth, and would ordi- narily be attended with an increased de- mand for the standard metal. The prices of some commodities would fall because they were produced in increasing quan- tities ; the prices of commodities generally would tend to fall because there was an increased demand for the standard metal, and there are no means of saying how much of the alteration in price in any par- ticular case is due to increased production, and how much to increased demand for the standard. In any case, however, we differ from the view taken by our colleagues, to which we have above referred, for the following reasons : In the first place we find no proof that the supply of commodities generally has increased, or that the cost of production has diminished at a Q^reater rate in the years which have elapsed since the rup- ture of the bimetallic par than was the case in periods of like duration, antece- dent to that date. ... Appendix. lOi Sec. 12. — There appears to us to be sufficient evidence (to which we shall refer later on when we deal in detail with the several questions contained in our order of reference) to show that the fall of prices and its resulting evils have affected all classes of the population (with the excep- tion of those in the enjoyment of fixed incomes payable in gold), from the manu- facturers and producers down to the wage-earners; but, in our opinion, it is the" latter class which have the most direct and immediate interest in the adoption of any measure which will re-establish the comparative stability of the standard of value, such as it was before the recent divero-ence in the relative value of the precious metals. Sec. 28.— ... We are strongly of opinion that both metals must continue to be used as standard money ; the result of using them separately and indepen- dently since 1873 have been most unsatis- factory, and may be positively disastrous in the future. I02 Joint-Metallism. It cannot be questioned that until 1873 gold and silver were always effectively linked by a legal ratio in one or more countries. It is equally indisputable that the rela- tive value of the two metals has been sub- ject to greater divergence since 1874 than during the whole of the two hundred years preceding that date, notwithstanding the occurrence of variations in their relative production more intense and more pro- longed than those which have been experienced in recent years. Sec. 29. — In 1873 ^"d 1874 the con- necting link disappeared, and for the first time the system of rating the two metals ceased to form a subject of legislation in any country in the world. The law of supply and demand was for the first time left to operate independently upon the value of each metal ; and simul- taneously the ratio which had been main- tained, with scarcely any perceptible variation, for two hundred years, gave place to a marked and rapid divergence in the relative value of gold and silver. Appendix. 103 which has culminated in a change from 15! to I to 22 to I. From the " Nineteenth Century Review^' April, iSgj. I was one of the six members of the Gold and Silver Commission who could not see their way to recommend bimetal- lism, and reported: "When we look at the character and times of the fall in the prices of commodities . . . we think the sounder view is that the greater part of the fall has resulted from causes touch- ing the commodities, rather than from an appreciation of the standard." In the same paragraph we had said : "We are far from denying that there may have been, and probably has been, some ap- preciation of gold," though we held it impossible to determine its extent. Let me make a confession. I hesitated a little about this paragraph. I thought there was, perhaps, more in the suggestion of an appreciation of gold than my colleagues believed ; but whilst I thus doubted I did I04 yoint-Metallism. not dissent. I am now satisfied that there has been an appreciation of gold greater than I suspected when I signed the Report, and I should not be able to concur in the same paragraph again. I have no doubt as to the fact of ap- preciation ; I believe it to have been serious ; . . . • With the rupture of the bimetallic tie, the ratio has changed enormously, though there has been nothing like the same alteration in the relative production of the two metals. Five years ago I joined with my friends in deprecating any attempt to establish an international agreement for the free coinag-e of both orold and silver as stand- ard money. I have advanced with further experience and reflection to the belief that such an agreement is to be desired, and that it could be accomplished with the minimum of change and with great advantage to the empire and the world on the conditions I have suofofested. Leonard Courtney. Appendix. \o- Product of Gold and Silver in the United States from 1792-1844, and A nniially since. [The estimate for 17Q2-1873 is by R. W. Raymond, Commissioner, and since by the Director of the Mint.] See page 112. Years. April 2, 1792-July 31, 1834 July 31, 1834-Decem- ber 31, 1844 1845 1846 1847 1848 1849 •• 1850 1851 1852 1853 1854 1855 1856 1857 1858 .1859 .i860 i86r 1862 1863 1864. 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 • 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1S93 1894 1S95 Gold. Silver. ^14,000,000 7,500,000 1,008,327 1*139,357! 889,085 10,000,000 40,000,000 50,000,000 55,000,000 60,000,000 65,000,000 60,000,000 55,000,000 55,000,000 55,000,000 50,000,000 50,000,000 46,000,000 43,000,000 39,200,000 40,000,000 46,100,000 53,225,000 53,500,000 51,725,0001 48,000,000, 49,500,000' 50,000,000 43,500,000 36,000,000; 36,000,000 33,500,000 33,400,000 39,900,000, 46,900,000 51,200,000 38,900,000 36,000,0.00 34,7oo,ooo| 32,500,000' 30,000,000] 30,800,000, 31,800,000' 35,ooo,ooOi 33,000,000' 33,i75,ooo| 32,800,000 32,845,000 33,175,000 33,000,000 35,955,000 39,500,000 46,610,000 Total. Total 2,059,946,769 Coinage value insignificant. , $250,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 500,000 ioo,ooo| 150,000' 2,000,000 4,500,000 8,500,000 11,000,000 11,250,000 10,000,000 13,500,000 12,000,000 12,000,000 16,000,000 23,000,000 28,750,000 35,750,000 37,300,000 31,700,000 38,800,000 39,800,000 45,200,000 40,800,000 39,200,000 43,000,000 46,800,000 46,200,000 48,800,000 51,600,000 51,000,000 53,350,000 59,195,000 64,646,000 70,465,000! 75,417,000 82,101,000 77,576,ooo| 64,000,000 72,051,000 P4, 000,000 7,750,000 1,058,327 1,189,357 939,085 10,050,000 40,050,000 50,050,000 55,050,000 60,050,000 65,050,000 60,050,000 55,050,000 55,050,000 55,050,000 50,500,000 50,100,000 46,150,000 45,000,000 43,700,000 48,500,000 57,100,000 64,475,000 63,500,000 65,225,000 60,000,000 61,500,000 66,000,000 66,500,000 64,750,000 71,750,000 70,800,000 65,100,000 78,700,000 86,700,000 96,400,000 79,700,000 75,200,000 77,700,000 79,300,000 76,200,000 79,600,000 83,400,000 86,000,000 86,350,000 92,370,000 97,446,000 103,309,000 108,592,000 115,101,000 113,531,000 103,500,000 118,661,000 1,368,901,000 3,428,847,769 io6 Jo in t-Mctallisin. 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Monetary Systems and Approximate Stocks of Money in the I 2 3 4 5 6 7 8 9 lO II 12 13 14 IS 16 17 i: 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Countries. United States a United Kingdom France Germany Belgium Italy Switzerland Greece Spain Portugal Roumania Servia Austria-Hungary Netherlands Norway Sweden Denmark Russia Turkey Australia Egypt Mexico Central American States. South American States . . Japan India China Straits Settlements Canada Cuba Haiti Bulgaria Monetary system. Ratio be- tween gold and full legal-tender silver. Ratio be- tween gold and limited- tender silver. Total Gold and silver- Gold Gold and silver- Gold Gold and silver- ....do ....do ....do ....do Gold Gold and silver- ....do Gold Gold and silver- Gold ....do ....do Silver Gold and silver- Gold ....do Silver ....do . . . .do.<- Gold and silver- ....do Silver ....do Gold Gold and silver- ....do ...-do I to 15.9! I to isi I to is^ I to \$\ I to 15* I to 15^ I to 15^ I to 15I I to 15^ I to 15I I to i6i I to isi I to 15A I to i6"i8 I to 15 I to 155 1 to 155 I to 15^ I to 14.95 I to 14.28 I to 14.38 I to 13.957 I to 14.38 I to 14.38 I to 14,38 I to 14.38 I to 14.38 I to 14.08 I to 13.69 I to 15 I to 14.88 I to 14.88 I to 14.88 I to 12.90 I to 15^ I to 14.28 I to 15.68 I to 14.28 I to 14.38 Population. 71,390,000 38,900,000 38,300,000 51,200,000 6,300,000 30,700,000 3, 000, coo 2,200,000 17,500,000 5,100,000 5,800,000 2,300,000 43,500,000 4,700,000 2,000,000 4,800,000 2,300,000 126,000,000 22,000,000 4,700,000 6,800,000 12,100,000 5,600,000 36,000,000 41,100.000 296,000,000 360,000,000 3,800,000 4,800,000 1,800,000 1,000,000 4.300,000 Stock of gold. $600,100,000 b 580,000,000 b 850,000,000 b 625,000,000 b 55,000,00c c 98,200,000 c 14,900,000 (i 500,000 b 40,000,000 b 38,000,000 c 38,600,000 c 3,000,000 b 140,000,000 c 29,200,000 b 7,500,000 c 8,000,000 c 14,500,000 b 480,000,000 b 50,000,000 b 115,000,000 b 120,000,000 b 5,000,000 b 500,000 b 40,000,00c c 80,000,000 b 14,000,000 b 18,000,000 b 3,000,000 b 800,000 4,068,800,000 Bentkovvski published the Monete Cudende Ratio in 1816 Cossas Introduction, Etc. 177 Macleod continued to claim it as Gres- ham's great discovery. Thus in his Elements of Baulking, pub- lished in 1876, Macleod says: " Sir Thomas Gresham explained the cause, whence we have called it Gresham Law." And even in the last edition of his Theory of Credit, vol. ii., published in 1 890, Macleod says: "Sir Thomas Gresham first explained the reason to Queen Eliza- beth, and therefore we have called it ' Gresham Law of the Coinage,' and this name is now universally recognized." But in the Enorlish edition of Cossa's great standard work, published in 1893, Introduction to tlie Study of Political Econ- ornyl the facts as stated by Wolowski are plainly set forth in English, and now in Macleod's book, published in July, 1894, and in his magazine article, published this November, Macleod says that "it ought to be called the law of Oresme, Copernicus, and Gresham," but he does not mention Wolowski's name, although he is plainly much indebted to Wolowski's very able work, and to the important notices it con- ^ This work contains a valuable liibliology. 1 7 8 Joint- Metallism. tains on Oresme, by Roscher and Wo- lowski. I cannot recollect that Macleod has ever mentioned Wolowski, and as Mac- leod's voluminous works are mostly pub- lished without indexes, it is difficult to ascertain. But Macleod's statement in this month's Nineteenth Century, that the great treatise of Oresme, " in twenty-six chapters, has only recently been brought to the notice of economists," requires to be modified by stating the fact that this treatise was most elaborately published thirty years ago by W. L. Wolowski with very valuable notes. Authors of great repute among the gold monometallists formerly found much fault with Macleod's "peculiar views," "oppo- sition to Say and Mill on credit, and to Ricardo on rent," etc. He was said to be " at issue with the recognized authorities, and that, too, on points of the first im- portance." ^ Luigi Cossa said : " Macleod is a ' See The Readers Guide in Econojnics, etc., edited by Bowker and lies. Macleod's Dangerous Theory. 179 learned, acute, but paradoxical writer, combining good observations on special questions with dangerous errors and old sophisms." And in another place Cossa says : " Macleod has repeated his errors in voluminous productions and then sum- marized them in Economics for Beginners!' There have been many such criticisms. None in America know better than the editors of the Evening Post the dangerous character of much of the teachines of Macleod and the justness of Cossa's criticisms. Macleod's favorite theory is that " credit is as good as money." He says : " If a bank can maintain in circulation a quan- tity of credit in excess of the cash it holds, that is, for all practical purposes, an augmentation of the capital of the country." Mr. Horace White, one of the editors of the Post and also of the Nation, once wrote, Macleod " confounds capital and credit.'!^ — The author and the translator of Cossa's above-mentioned work acknowledged their obligation to the Nation, and Mr. White 1 80 yoint-Metallism. also had a translation made of Cossa's work on Taxation and wrote an introduc- tion and notes for it and copyrighted the book here. It is interesting to observe how gold monometallists now speak of Macleod's work with unqualified praise. A similar good fortune has attended Giffen, although many thoughtful readers must prefer Giffen, the philosophical writer who ex- pounded the dangers arising from the scarcity of gold, to Giffen, the Secretary^ of the Board of Trade, gold monometal- listic writer on the London Economist, and a chief clubber of the bimetallists. [■^ Giffen once wrote : " The fall in prices in such a general way as to amount to what is known as a rise in the purchasing power of gold is generally — I may say jjniversally — admitted." Again, in 1879: "An appreciation of the money of a country forced on by a government is simply a measure for dis- abling the productive powers of the peo- ple, and making them poorer than they would otherwise be." But this was before ' Head of the Stntistical TieDartment. Silverphobia. i S i he wrote The Case against Bimeiallism and The American Silver Bubble^ etc. Now I have had for many years the pleasure of working with my most es- teemed friends, the editors of the Evening Post, for Revenue Reform, Civil-Service Reform, and other good causes, and I well know they would not willingly permit their readers to mistake their real estimate of the general authority of Macleod, and I hope they will state plainly in their columns that this famous English cham- pion of gold monometallism, who is noted for his fierce attacks on many of the o-reatest economists, is usually to be read with caution. Macleod' s motto sometimes appears to be " Wherever you see a head, hit," and it is unfortunately a characteristic of silver- phobia that the patient will sometimes attack everything that comes in his way. The works of these two great writers, Macleod and Giffen, are very important and indispensable to every student of the money question. It would ill become an ' See pages 89, 90, and 91. 1 8 2 yoint-Metallisni. amateur like myself to claim to rival them in ability or research. Besides this I don't object when they overthrow those unscientific bimetallists who want a fixed empirical ratio. Neither do I object to the masterly manner in which A. J. Balfour and Archbishop Welsh belabor and over- throw the gold monometallists. I say, more power to their elbows, good luck to their club, golf stick, shil- lalah, and crosier. The more the mutually destructive fight wages between the gold and the silver champions, the more the way will be prepared for joint-metallism. In all this discussion, and in all the efforts put forth by our statesmen, capital- ists, and great financial newspapers to maintain the diminishing Government gold reserve, the one thing that stands out clearly is the fact that there is not enough gold to form a sufficient basis for the currency, commerce, and credits of the world ; and that if we don't want to see this country on a silver basis, it is necessary now to consider some way of ^/ Convenient and Sufficient Basis. 183 using both the precious metals together, and always at their market values/ I think joint-metallism presents a con- venient and sufficient basis, and until this view is shown to be erroneousby facts and fair arguments, I must continue so to think. ' See page 66, etc., for an account of some dangers of the present situation. * PART IV. THE APOTHEOSIS OF CREDIT. OBJECTIONS ANSWERED AND HONEST LEGISLATION DEMANDED. 185 THE APOTHEOSIS OF CREDIT. Macleod's favorite theory is that " credit is as good as money." He says : " If a bank can maintain in circulation a quan- tity of credit in excess of the cash it holds, that is, for all practical purposes, an aug- mentation of the capital of the country." And he expresses great admiration for a system of banking based on the use of only five per cent, of specie. His credit theory has just found a happy illustration in Newfoundland, where there is to-day general bankruptcy, be- cause they have little specie although they have much fish and plenty of notes based on general assets, etc., a kind of security highly appreciated by those who favor the Administration - Baltimore - Canadian system of currency (which may be called, for short, the A. B. C. system), and who will not admit that what is needed is more specie money and less credit money. 187 1 88 ' yoint-Metallism. The holder of a Newfoundland bank- note will be lucky if he can get fish for it, and then if he wants to buy a newspaper, he can take a codfish out of his pocket and put back three mackerels and two herrinofs received as chano-e. Some persons, hearing that rich people get their living by cutting coupons off Government bonds, come to think that a people can live upon the interest of what they owe, and that if the Apostle Paul were living now he would write, " Owe all men every^thing," instead of ''Qwfi-Jio'^nanrany But it will not be easy to convince thoughtful people that A. and B., by exchanging their prom- ises to pay, can augment the capital of the country. Gold and silver are suitable for money; fish and other kinds of merchandise are not. Paper currency based on gold and silver at their relative market values, is good currency. If based on fish or other kinds of merchandise, or on credits, it is generally bad currency. Credits based on sales of wheat, cotton, fish, etc., to re- Canadian Banks, 189 sponsible merchants, are more safe than credits based on sales of wild lands and mining stocks to speculators ; and the great New York banks will never agree to guarantee the notes of small Western banks,Jbas£d_largely-on general-assets. In Canada there are few banks. They know each other well and have numerous branches. But to try to introduce_ their currency system here, where we have 3756 National Banks,^ is unwise. If It were certainly known in what our Government bonds were to be paid, there would be no difficulty in disposing of them abroad. \, I t_is.,un reason able to give a creditor the , right to choose whether he will be paid in gold or in silver, at a ratio different from the market ratio. It is unreasonable to give a debtor the right to choose whether he will pay in gold or in silver, at a ratio different from the market ratio. But to say that all payments for contracts made after a certain fixed future date shall be payable half in one precious metal and half in the other precious metal, at the ' And as many other banks. 1 QO J oint-Metallism. market ratio, is just, and this is joint- metallism. I have shown elsewhere^ how joint- metallism presents a convenient, honest, safe, and permanent basis for currency. If it were established here, the exchanges of the world would come to be drawn in dollars, and the final banking reserves of the world held in New York. ]V^r._ Carlisle's monstrously ingenious currency plan combines the objectionable features of a National Banking Trust and an Assessment Insurance Company.' The terrible danger is that it may be forced through Congress by political methods and the plea of Treasury neces- sities, and without^ sufficient intelligent and thorouo"h discussion. o If, as in the English Parliament, our head of the Treasury Department had a seat in the National Leo^islature, and were obliged, risin g in h is place and in fair and real debate, to answer the attacks of educated economists upon his plan, he would soon_l3e out of office. If, in a time of peace, we establish a ' See page 121 ; also page 5. Secretary Carlisle s Flan. 191 permanent system of Government credit money, such as that proposed by the Secretary of the Treasury, it may tem- porarily benefit some banks and specu- lators, and facilitate some reorganization schemes, and enable promoters to dispose of their holdings, but it will make it im- possible for this country to attain the paramount position which our population and developed resources entitle us to as- sume in the near future. It is perhaps, too much to expect that all who take part in the legislation upon our currency should be great economists or learned historians. But it may reason- ably be expected that they should know the difference between Bullion and Billon, and at least be acquainted with past American monetary experiments. I see that the debate on the new Cur- rency Bill in the House of Representa- tives is to be adjourned over Thursday^ of this week, for the reception of the statue of Daniel Webster, etc. At that grand function it would be most 'Originally printed in the World of December iS, and the Tribune of December 2o, 1894. 192 Joint- Metallism. appropriate to read Webster's words of warning, as follows : f"! am certainly of opinion that gold an3~ silver, at rates fixed by Congress, constitute the lesfal standard of values in this country, and that neither Congress nor any State has authority to establish any other standard or to displace this standardTH No man ever expressed his appreci"S^tTon of the real use of credit more strongly than he. But Daniel Web- ster opposed legal-tender credit money. We are soon to have a ofreatcetebration of the 250th Anniversary of the Capture of Louisbourg. As our Society of the Colonial Wars has done me the honor to appoint me on the Committee for the memorial, I call to mind, among other thinofs, that this first grreat outside adven- ture of the American Colonies was the cause of our first large experiment in credit currency. It led Massachusetts to ^, issue two and a half million pounds of credit money which soon fell tojnne^^r -cgnt^of its nominal value, and the State was only saved from financial ruin by the Massachusetts, the ''Silver Colony.'' 193 English ransom of Louisbourg from the Colonies, and by the wisdom of Governor Hutchinson, who secured for his State, payment from England, mostly in silver dol- lars, so that Massachusetts became known as the "Silver Colony," while the neiirh- boring Colonies kept their depreciated currency, and lost their trade, which was transferred to Massachusetts. Newport then rapidly declined in importance, while the supremacy of Salem and Boston was established. Tf~~Gur people could only grasp the situation, they would see that we have the greatest opportunity ever offered to any country to control the finances of the world. It is not by locking up and per- manently maintaining thirty per cent, of our pernicious greenbacks, to promote the issue of three times as large an amount of paper currency, the volume of which would be more than eit^ht times as o^reat as the gold on which it would be based finally. It is not thus that we can solve our currency question and the world's ^old and silver question. But we can 1 94 J oint-Metallism. solve these problems by jolnt-metallism, a plan^ by which gold and silver together, at ratios always based on their relative market values, may be made the metallic basis of a sound,^ honest, self-regulating, and permanent currency, without frequent recoinings, and without danger of one metal driving out the other. ^ * See page 121. ■*^ '^ Daniel Webster said in tlie Senate, March 18, 1854 : " I \ hold the immediate convertibility of bank notes into specie to • be an indispensable security to their retaining their value." t OBJECTIONS ANSWERED, AND HONEST LEGISLATION DEMANDED. 195 OBJECTIONS ANSWERED, AND HONEST LEGISLATION DEMANDED. Criticisms of jolnt-metallism have been mostly favorable, but some objections have been raised. All the principal objections seem to be comprised in the following two : 1. That under joint-metallism the mint ratio might have to be changed often. 2. That under joint-metallism the final standard would still be gold. The reply to the first objection is that the ratio would not have to be chano-ed often, because the world's stocks of the precious metals being the accumulation of many centuries, any change in their rela- tive production for a few years, e. g. four times as much gold as silver in value, or four times as much silver as gold in value, makes little difference in the total pro- 197 198 Joint-Metallisfn. portion of gold to silver in the world's stocks.^ As Adam Smith pointed out 118 years aeo, their " durableness is the foundation of this extraordinary steadiness in price." When once joint-metallism has been established and the economic ratio has been determined, /. e. the relative costs of production in the poorest mines of gold and of silver that can be worked at a profit, then, so long as it is known that both precious metals will have substantially free access to a mint, in some great coun- try, the ratio of their market values is not likely to change for years,^ and may not change for centuries, and, as I have more fully explained on page 127, joint-metal- lism, in still other ways, promotes steadi- ness in the ratio, as, for example, by the provision that, at the mint, gold and silver must be presented together in quantities of equal value. But whenever it is found that, for a long period of time, the mint ratio is very ' See page S8. ' See pages 6, 131-133. The Principle of J oint-Metallism. 199 different from the relative costs of pro- duction, and if it be known that no provi- sion exists to correct this, and that one metal is in danger of being demonetized, and thus the chief demand for it abolished, then there will ensue great fluctuations in the value of that precious metal as com- pared with the other ; and speculation will come to deal with estimates and opinions and conjectures as to whether a mint will again be open to it, and when and at what ratio, etc. It is precisely this condition that has existed since 1873, and which could not exist under joint-metallism. In reply to the second objection : For the sake of convenient statement and illustration, I have commonly spoken of the ratio as being so many silver standard coins to equal one gold standard coin of same weight, and of changing, when necessary, the number of silver standard coins to equal the gold standard coin. But the principle of joint-metallism is to have all debts, contracted after a cer- 200 Joint-Mctamsm. tain fixed future date, payable half in gold and half in silver, /. e. in equal proportions of value of each precious metal, or in joint legal-tender certificates for such equal proportions ; and a joint-metallic system mio-ht be so arranged that the silver standard coin would be more exactly as much the final standard as the gold standard coin. But this would be com- plicated, and a discussion of anything like compound ratios would be difficult in a popular treatise, and the form of joint- metallism herein set forth is sufficient for practical purposes, for so long as the Gov- ernment ratio is kept at approximately the market ratio, and while there is an existing provision for changing the Gov- ernment ratio when necessary, it will not frequently have to be changed/ Supposing the principle of joint-metal- lism to be adopted this winter or next spring, to go into effect January i, 1896, the result would be as follows : Silver would advance in value until the true economic ratio would be reached as ' See page 127. Legal- Tender Joint Ccrtifcates. 20 r nearly as could be generally estimated with the knowledge that both precious metals were about to have substantially equal access to our mints. So by January I, 1S96, or soon thereafter, the relative market values of gold and silver would become settled, and the Government ratio would then probably not change for many years. It is also to be remembered that while the law would provide for payment in gold standards and silver standards jointly, the actual transactions would be in legal- tender joint certificates. The buyer or seller would not be affected to any con- siderable extent by any change in the ratio, except that the security pledged for the Government legal-tender joint certificates might possibly be affected to the extent of about one and one half per cent.^ at any time of altering ratio, but this is too remote to have any practical bearing on the question so far as the buyer and seller are concerned. The Gov- ernment would assume a small risk for ' See page 6. 202 y ohit-Metallism. which the minting charge (seigneurage) might be made to pay.^ It is also to be noted ^ that joint-metal- lism permits the continued use of dollars and cents as the terms to be used in con- tracts and in accounts, and permits the continued use of our present subsidiary coins. Silver standard coins need not be used at all as small change, although they might be so used conveniently, in some circum- stances, as, for example, in case the gold standard coin should be the $5 gold piece, and the ratio should become fixed at I to 20, the silver standard would be worth exactly 25 cents, or at i to 25, it would be 20 cents, at i to 30, one sixth of a dollar, or at 3 to 100, 15 cents, etc., etc. It is probable that by January i, 1896, or soon thereafter, other nations would follow our example and open their mints to silver on a similar basis. ^ See pages 7 and 123. In Australia the Government makes a profit out of permanently guaranteeing land titles for a charge of one eighth per cent. ^ See page 122. Faying off Government Debt. 203 I do not feel called upon to refute some objections which show plainly that the writers have not carefully considered what I have fully explained in preceding pages. As to those who object that joint-metal- lism is bimetallism, I must refer them to pages 118, 121, 125, 134, 147, etc. I do not attempt to deny that I am a bullionist in the sense of holdine that all Government money should be coin, or readily convertible into coin. The enormous business, finances, and credit of England are on a bullionist basis, for the uncovered Bank of England notes, limited to ;^i 5,000,000, are comparatively inconsiderable. The United States have set an example to the world in paying off a large part of a Government debt.^ This was a prepay- ment. If we paid off the greenbacks, which are a demand debt, we could place our finances in a position which no other nation could attain. Now that w^e can export largely iron and other manufactures, as well as grain, 1 See page 137. 204 y oini-Metallisf}i. cotton, and other produce, we have the opportunity to take the foremost financial position, with all the advantage and profit which this implies. But to accomplish this our national money must be based strictly on the only possible sound and sufficient basis, the two precious metals together, limited by the quantities in existence and the costs of production. Credit can then have its full legitimate development. But credit money cannot be suitable money with which to do the world's busi- ness. Joint-metallism would be most suitable for the world's business, aud contracts under it would be more safe as well as more just. Mr. Carlisle came to New York and declared for sound money — specie or paper based on specie, — a just and true measure of value, etc. His words are quoted on page 84. But as soon as he had induced New York bankers to take his bonds, he declares for credit money. Under the Honesty in Poll, ics and Legislation. 205 plea of war necessity, our people have acquiesced in Government credit money, as a temporary expedient. Mr. Carlisle's distinct purpose is, now, to make credit money a permanent institution. Momentous results now hang upon the decision of Congrress and of a President elected upon the distinct pledge contained in his letter of acceptance dated Septem- ber 28, 1892, as follows : " Every dollar put into the hands of the people should be of the same intrinsic value or purchasing power. With this condition absolutely guaranteed, both gold and silver caii be utilised upon equal terms in the adjustment of our currency." The last Democratic National Con- vention declared : " We hold to the use of botJi o-old and silver as the standard money of the country, and to the coiiiage of both without discriminatio7i against either metal" etc.^ ; and the last Repub- lican National Convention demanded ''the use of both gold and silver as standard money." • See page 8i. 2o6 y oint-Metallism. So late as March 29, 1894, President Cleveland said in a Message to Con- gress : " I hope a way will present itself in the near future for the adjustment of our monetary affairs in such a comprehensive and conservative manner as will afford to silver" its proper place in our currency'' Honesty in politics and in legislation de- mands that the foregoing distinct, formal, and solemn pledges be carried out, and that a Bill be passed by Congress and signed by the President to 7Ltilize gold and silver tipon substatitially eqnal terms as standard money. If they cannot agree upon a Bill for this purpose it is their bounden duty to ap- point a commission of competent experts to investigate and to recommend a plan. PART V. SARATOGA FREE-COINAGE DEBATE. LETTERS TO "SPRINGFIELD REPUBLICAN." AFTER THE ELECTION, WHAT? 207 EXTRACTS FROM THE DEBATE ON FREE COINAGE OF SILVER, BE- FORE THE AMERICAN SOCIAL SCIENCE ASSOCIATION AT SARA- TOGA, SEPTEMBER 6, 1895. From the Introductory Remarks by the Secretary of the Finance Dcpai-tment, Professor y. W. Jenks. . . The silver question has become the im- portant topic of the day, and is likely to be the most important question of the next political campaign. It has been thought best, therefore, to have the mat- ter talked out to-day before the Association by some of the best authorities on both sides that the country affords ; and the debaters have agreed to let the question take the specific form : Resolved, That the United States should provide, by law, for free coinage of silver at the ratio of J 6 to i with gold. From Address of Hon. A. y . Warner. . . . Twenty-five years ago there were not forty millions of people out of the entire popula- tion of the world using gold exclusively as money : 20Q 2IO J oint- Metallism. to-day there are more than three hundred million such people. . . . In 1869 Mr. David A. Wells made a re- port for 1868, stating our debt abroad — I do not mean the government debt alone — at $1,500,000,- 000. Professor Cairnes, a few years later, put our debt to England alone at ;!^3oo, 000,000 (which was about the same thing), and the average interest, divi- dends, etc., including what was then spent abroad by travellers, at $175,000,000 a year. If we start with that, and add the annual interest that we are now to pay, and what has probably been expended by travellers abroad, and for the carrying trade, and deduct the balances in our favor from those against us, we should find that our debt to-day is more than $5,000,000,000. Upon that we have the authority of Professor Thorold Rogers. We have this statement direct from him, as well as from Mr. Gladstone, — that the investments of England alone in other countries are more than $10,000,000,000. Certainly 40 per cent, of that is invested in the United States. Mr. Heidelbach, one of the large exporters of gold from New York, in the February Forum placed our annual dues abroad at $350,- 000,000 — $75,000,000 as interest, $75,000,000 as dividends, $100,000,000 expended by travellers, and $100,000,000 in the carrying trade. . . . From Remarks of Hon. J^osia/i Patterson. . . . The silver dollar stands on a somewhat different footing. It is coined money. It is not Sa7'atoga Free- Co mage Debate. 2 1 1 the promise of the government to pay anything. But the coinage is limited. It is denied free and unlimited coinage, and is in no sense standard money. The government of the United Sates collects annually about ^350,000,000 in the way of revenue. These silver dollars are a full legal tender for all those revenues. Consequently, every silver dollar now coined can find its way into the Treasury of the United States at least once every year. As long as the government receives, there- fore, these silver dollars into its Treasury on an equality and on a parity with gold, and pays gold on its own obligations, it follows, as night follows the day, that the parity is maintained between gold and silver. . . From Remarks of J^oseph Sheldon, Esq. . . . Ours was originally a government of law, and not of arbitary power in the hands of any President or Secretary of the Treasury. Till very recent times parties dealing with the government have been subject to the wholesome rule that they must take notice of the limitation of the powers of those assuming to act in behalf of the government. That rule must be restored, and must be inflexibly maintained. The public faith has never been pledged to pay the obligations of the government in gold coin. Not a statute exists that by any possible legal con- struction supports that claim. Not a statute exists in regard to any form of the public debt or in re- 212 Joint-Metallism. gard to the coinage of silver dollars that does not positively show that this claim is utterly without foundation. . . From Address of Hoti. Ro swell G. Horr. . . . To-day gold is the money of the civi- lized world simply because it is the best substance known to the human race for the large transactions of the civilized world, and for no other reason. Of course, I dispute from begining to end the whole doctrine of the last speaker about the quan- tity of money governing prices. I cannot stop to argue such a proposition as that, but will simply say it is the worst humbug of this age of humbugs. What the people need is good money ; and, when you have good money, you cannot get too much of it. If you resort to poor money, you cannot have too little of it. . . . From Retnarks of A. B. Woodford, Esq. . . That then will produce the equilibrium. That movement of poor gold mines going out and poor silver mines coming in will produce it. Now the question arises, can an act of Congress achieve that ? One group of economists maintain that bimetallism is a scientific impossibility. They insist that the government cannot give value to a commodity. I submit that it can by giving a new market. . . . Saratoga Free-Coinage Debate. 213 From Remarks of Senator Higgins. . . . The disparity of the metals operates as a tariff against the silver-using countries' imports, and a bounty upon the India exports to gold- using countries. . . , I believe there is no solution of this question except by giving back to silver its imperial and royal function as a money metal of full debt-pay- ing power. But I want my friends to restrain their enthusiasm when I couple that proposition with the other one, which I lay down with equal emphasis, that never can be done until all the world comes into a bimetallic agreement ; and that is until Eng- land agrees. That is where I stand. I do not believe anything else is bimetallism. . . . I do not expect to see prosperity while the disparity of metals continues. . . . From Remarks of Anson F helps Stokes. I am opposed to the coinage of silver at 16 to i. I am opposed to it, not because I believe in gold monometallism. I am equally opposed to that. I believe there is a solution of this whole difficulty which reasonable men in time may come to ; and that is the free coinage, on substantially equal terms, of both gold and silver, in quantities of equal value, at the ratio of their market values. . . . This would work no injury to any just interest. I would have the silver in new silver standard 2 1 4 yoiiit-Metallism. coins to be equal in weight to the gold in the gold standard coins ; and I would open the mint to the free coinage of both gold and silver, when pre- sented together in quantities of equal value of each metal, according to the government ratio of the time, which should be based always on the market ratio, and change only when the market ratio changed as much as one integer, — e.g., from, say, 25 to I to 24 to i, or from 29 to i to 30 to i. The true economic ratio would thus soon be arrived at, and would very seldom change ; and any change would not make recoinage necessary. I would have a currency so based, half on gold and half on silver, legal tender for the payments of debts contracted after a date some months later than the passage of the act. . , . The officers of the Association were kind enough to invite me some time ago to take part in this debate, and I then felt that the controversy had got to go on for some time under conditions un- favorable to any attempt at arrangement between the gold and silver parties, and that the time for compromise must be deferred. To-day I am much encouraged to think that this time is more nearly approaching. I feel that those who have spoken here for gold monometallism are willing to have a larger use of silver, if it can be had safely and honestly, and those who have spoken for silver are willing that we should try 16 to I, and then, if it does not succeed, to have a different ratio. My proposition is that the United Saratoga Free- CoUiage Debate. 2 1 5 States should decide to begin at a fixed future date to coin both metals, when presented together in quantities of equal value, and at the market ratio of the time when this new coinage begins, and to change the ratio when necessary. The great thing that we have to consider now is the danger of the position in which we are at the present moment. That, it seems to me, has been lost sight of in this debate, except by the gentle- man who has just spoken, and whose remarks I have listened to with the greatest interest. It is that to which we should address ourselves,— that position, which is degrading to our gold-using countries, making it impossible for them to com- pete with silver-using countries. General prosperity in our country depends largely upon the prices obtainable for our chief exportable staples. The fall in these is directly caused by the demonetization of silver, because for every pound sterling which a planter in India, ■etc. receives for cotton or wheat sold in England, he can now employ twice as many native laborers as he could a few years ago, for their wages remain the same in silver coin. That is what we come to in the end. What is our position at the present moment ? We are hav- ing to pay abroad $1,000,000 per day, and we can- not go on doing it unless we can export much more surplus products. We are getting less into condi- tion to do this than we have been. The danger is that there is an appearance of prosperity which 2 1 6 yoint-Metallism. has been brought about during the last few months by the operations of speculation in sterling ex- change. The American people have got hold of some money, and think they are going to have a good time. In reply to his invitation, I wrote to our Secre- tary, July 27th : " The times are not propitious for moderate views or for efforts for accommodation between the partisans of gold and the partisans of silver. The artificial appearance of prosperity produced by the gold which government has borrowed at an exor- bitant rate has intoxicated the people, who now expect to be saved by getting deeper in debt, and are unwilling to be reminded of the day of reck- oning. " So I must wait to appeal to Philip sober, as he will be when gold exports commence again in earnest after the government's partnership in ex- change speculation comes to an end. In this part- nership the government put in its credit and the good-will of the business, and the other partners contributed experience." . . It is well known that the bonds sold abroad are for the most part coming back. It is well known that we can, if we are willing to remain in such a dependent condition, go on for some years in that way, with frequent issues of government bonds. But, unless we can get into a position to export more of our surplus products, we cannot reduce our foreign debt nor get out of danger. Saratoga Free- Coinage Debate. 2 1 7 Our greatest danger is our greenback currency, which is at least twice as dishonest as our silver currency, for there is more than half a dollar of real value behind each silver dollar or silver-dollar note. I have enjoyed this debate very much indeed, although I do not agree with either side. I do hope that we shall not think only of the simple proposition of 16 to i, but that we will think of the greater proposition of putting our currency on a safe basis. If credit money is good money, then fiat money is the best money, because the govern- ment's credit is the best credit. What we want is more real money and less credit money. What we want is that no dollar shall be issued that does not have a specie dollar behind it. As the human character is constituted, we shall never have any safety except on that basis. PROPOSED CURRENCY PLANK. To the Editor of the ''Springfield Republican " ' ; Sir : How would the following do for a Demo- cratic currency plank ? The Democratic party asserts again its historic belief in hard money — gold and silver freely coined at a ratio regulated by Congress — the only legal tender contemplated by the Constitution" — and de- mands that the greenbacks and paper money based on bonds and issued for the benefit of banks and speculators shall be replaced by coin and coin certificates of deposit, and that in this country nothing shall be money that does not honestly represent labor. The Democratic party, which has always opposed monopolies, denounces the gold monopoly as the most oppressive of all. Anson Phelps Stokes. Lenox, Mass., June 26, 1896. ' This letter and the following letters were printed in a number of newspapers. ^ Constitution of the United States, Article i, Section viii, Paragraph 5. See page 80. 218 THE BIRDS AND THE FARMERS. To the Editor of the ''Republican " : Most of the political platforms are claiming to favor bimetallism. Some demand it now, others want us to wait until European nations help us to attain it. This brinsjs to mind the old fable of the mother bird telling her young that they must leave soon their nest in the wheat fields, as it was time for harvest. The little birds said : " Mother, we over- heard the farmer tell his sons to go and ask his neighbors and friends to come and help him reap to-morrow." The mother bird replied : " There is no danger yet." The next day the little birds reported that the farmer had sent for his relations to come and help him cut the grain. But the mother bird would not take her little ones away. The following evening they heard the farmer say to his sons : " We will come ourselves to-morrow and reap this field." Then the birds left. " Who would be free, himself must strike the blow." AVhen you hear a man say that undoubtedly your claim is just, but that you had better wait and sell him some more produce on credit and wait until he can conveniently pay you and others all together, you will do well to look out for your own interest. As a Berkshire farmer I am considering whether we farmers had better now buy and pay for silver bricks to be delivered when England adopts bi- metallism. Anson Phelps Stokes. Lenox, June 29, 1896. 219 AS BETWEEN SILVER AND GOLD. AND AS BETWEEN WEST AND EAST. ANSON PHELPS STOKES OF NEW YORK AND LENOX ARGUES FOR A FAIR HEARING, IN GOOD TEMPER, AND ESPECIALLY SPEAKS FOR SILVER AND THE WEST. To the Editor of the ''Republican " : In these times of angry dispute over an old prob- lem in economics, it is pleasant to find a leading journal keeping its head, giving each party a fair hearing, promoting kindly feeling between the different sections of our common country and dis- daining all opportunity to gain popular applause by abetting partisan strife ; saying ever, respectfully and firmly : " Sirs, ye are brethren. The Union is more important than any question of money." I am glad that such a journal is published near my summer home, that my first reading of the news these lovely mornings is not colored and dis- torted by sensationalism, hatred, and violent ap- peals to partisan passions. One of the most serious of the dangers that threaten our national welfare is the temptation that 220 Letters to '' Sprnigjield Republican^ 221 presents itself to politicians to express extreme sectional views when selfishly seeking jjartisan votes. Many also find it easier to call names than to maintain their cause in fair debate. This spring I have visited most of the States, and I am ])ain- fidly impressed by the bitterness of feeling that abounds, and which, I regret to say, finds such violent expression in New York and in Massa- chusetts. I am convinced that our Western fellow-citizens have no more dishonest intent in their protest against the artificial legislative enhancement of the burden of their debts than have our Eastern citizens in their mistaken demand for gold mono- metallism. Is it fair to say that the debts have been con- tracted on the present gold basis when these debts have been generally continuous, because necessa- rily renewed from time to time in the currency provided by law ? Is it fair to say that the debtors knew of and consented to the demonetization of 1873 ? How many of the leading business men of the East can assert truthfully that they knew of and understood then the momentous meaning of that act, which was ostensibly an act of 71 sections to regulate de- tails " relative to the mint, assay offices, and coin- age, etc." I was a somewhat attentive student of political economics at that time, and I cannot rec- ollect that the importance of that act attracted my attention. 2 2 2 Joint- MetaUism. When the question was raised a few years later as to the effect of that act upon the debts of the country, both Senate and House of Representatives passed a concurrent resolution declaring that United States bonds were payable at the option of the government in silver dollars of 4124- grains, and the author of that concurrent resolution was later made a justice of the Supreme Court of the United States. And afterward Congress elected to accept a lower price for bonds, rather than give up this option to pay in silver.' Is it quite fair to call our western brethren dishonest for saying what Congress and our leading statesmen and greatest constitutional lawyers and other most emi- nent authorities have said ? The Bible denounces those who " make the shekel large," and who " make the poor to fail." Lincoln said : " To contract the volume of money before the debt is paid is the most heinous crime," etc. Blaine said : " The destruction of silver as money and establishing gold as the sole unit of value must have a ruinous effect on all forms of prop- erty except those investments which yield a fixed return in money. I believe gold and silver coin to be the money of the Constitution. No power ' As stated in the New York Evening Post of August 7, 1896 : " Yes, the syndicate of February, 1895, offered to lend $65,000,000 at 3| per cent, interest if it were payable in coin ; or at 3 per cent, if payable in 'gold.' The difference to the government during the time the bonds had to run was over $16,000,000." Letters to ''Springfield Republican'' 22 •> was conferred on Congress to declare either metal should not be money. Congress has, therefore, in my judgment, no power to demonetize either. If, therefore, silver has been demonetized, I am in favor of remonetizing it. If the coinage has been prohibited, I am in favor of having it resumed. I am in favor of having it increased." Webster said : " I am certainly of opinion that gold and silver at rates fixed by Congress consti- tute the legal standard of values in this country, and that neither Congress nor any State has authority to establish any other standard or to dis- place this standard." McKinley said : " I want the double standard. I would have gold and silver alike." Hill said : " I am indignant at the rapacity of the gold monometallists, so reckless of both science and of public opinion. The bimetallic coinage is the demand of a vast majority of the American peo- ple. No wonder it made us the party of the silver dollar for eight years. To restore it safely, finally, and wisely is the mission of the Democratic party.'' Hamilton and Jefferson agreed in saying that the money unit must rest on both metals. The Democratic National Convention of 1892 declared : "We hold to the use of both gold and silver as the standard money of this country, and to the coinage of both without discrimination against either metal." The Republican National Convention of 1892 demanded " the use of both gold and silver as standard money." 2 24 yoiitt- Metallism. Cleveland said in his letter of acceptance ; *' With this condition absolutely guaranteed, both gold and silver can be utilized upon equal terms in the adjustment of our currency." Carlisle said, in the House of Representatives, February 21, 1878':". . . Mankind will be fortunate indeed if the annual production of gold and silver coin shall keep pace with the annual in- crease of population, commerce, and industry. According to my view of the subject, the con- spiracy 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, pestilences, and famines 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 ' "On the Senate amendments to the bill (H. R., No. 1093) to authorize the free coinage of the standard silver dollar, and to restore its legal-tender character." The extracts as here presented have been carefully com- pared with the official report of this speech, as printed in the Congressional Record, Vol. 7., Part 5., Appendix, page 41. Second Session XLVth Congress. Letters to '' Spi ing field Republican" 225 like the prolonged distress and disorganization of society that must inevitably result from the per- manent annihilation of one half of the metallic money in the world. With an ample currency, an industrious and frugal people will speedily rebuild their works of internal improvement and repair losses of property, but no amount of industry or ■economy on the part of the people can create money. When the government creates it or au- thorizes it, the citizen may acquire it, but he can do nothing more. " I am in favor of every practicable and constitu- tional measure that will have a tendency to defeat or retard tlie perpetration of this great crime, and I am also in favor of every practicable and consti- tutional measure that will aid us in devising a just and permanent ratio of value between the two metals, so that they may circulate side by side and not alternately drive each other into exile from one country to another. . . . The struggle now going on cannot cease, and ought not to cease, until all the industrial interests of the country are fully and finally emancipated from the heartless •domination of syndicates, stock exchanges, and other great combinations of money grabbers in this country and in Europe. ..." It would be easy to multiply such quotations. Many of them have been published. I have steadily opposed the i6-to-i idea, and have always claimed that the ratio should be regu- lated by Congress at approximately the market ratio 2 26 yoi7it-Metallism. when both metals should have substantially equal access to the mint. But this question of ratio is quite distinct from the question of constitutional right to have both metals coined at rates regulated by Congress and available as money in payment of debts. Suppose it were found possible by some new test to distinguish the gold mined in Australia and Africa from all other gold, and that laws should be made in Europe and in America excluding from the mints all Australian and African gold, — would not this be an injustice to debtors on a gold basis? Would it not impair that obligation of the contract which had compelled creditors to accept any gold ? Would not Australian and African gold decline to half their former value ? Would not all other gold greatly increase in value ? The Constitutional Convention refused to give Congress the right to print paper money, but did give it the right to coin money, and the power to regulate the ratio. It is ultra vires for any political convention to attempt to fix the ratio. That duty belongs to Congress. The States agreed to leave the matter of rates or ratio to the arbitration of Congress when they adopted the Constitution. Our present trouble comes from the failure of Congress to alter the ratio on one of those very rare occa- sions when an alteration was necessarv to make the ratio approximately accord with the market ratio, while both metals had free access to our mints. Letters to ' ' Springfield Republicany 227 It would be unfair to take the market ratio for our government now while one of the precious metals is demonetized. But if a reasonable future date were fixed when both metals should be ad- mitted to free coinage at the then market ratio, no wrong would be done to any just interest. Massa- chusetts used to be proud of being called the silver colony, and strict bullionist views have been held by many of the most enlightened citizens of this commonwealth since it became a State in the Union. If we will now take the only real sound-money ground — opposition to all credit money, — and patiently and fairly contend for this great prin- ciple, that " money must be an equivalent as well as a measure," and that nothing should be money that does not honestly represent labor, the East may yet lead in carrying the country for this great reform of the currency as the East has led in other reform movements. While most of my interests are in the East, I have interests in the West, and go there every year, and I think I know something of the real feeling there. It is that the East has been more prosperous than the West, and that in so far as this inequality springs from adroit legislation in our favor they intend to have this changed, so that opportunities, so far as law is concerned, shall be made equal, that the government shall not give advantages to manufacturers and bankers that it does not give to farmers and miners. As I have long 2 28 Joint-Metallism. pointed out, we are in danger of silver monometal- lism because we would not listen to reasonable complaints. The East has pushed the pendulum so unfairly toward gold monometallism that it has swung too far the other way. Let us now do what we can to promote a cam- paign of education. Let us have a fair debate between the two champions, McKinley and Bryan. They are both thoroughly reputable men, while both the party platforms are faulty. I cannot vote for McKinley for I am opposed to monopoly, but I would claim for him a respectful hearing. Bryan is accused of being young. He may outgrow this fault. Some of us would like to have half his complaint. Anson Phelps Stokes. Lenox, July 6, 1896. AFTER THE ELECTION, WHAT? To the Editor of the ''New York Times " : Whatever the result, we will still have a goodly- heritage in the rich land and free institutions of an honest people devoted to the Union and with much real mutual respect between the different sections which are now ignorantly abusing each other. But the success of either party in the present election will not bring prosperity. If either of the platforms be enacted into law, the industries and business of the people must continue to suffer so long as either gold or silver monometallism is main- tained and until we come to use both the precious metals jointly and at about their relative market values, to be regulated when our mints shall be open to both. The total quantities of gold money and of silver money in the world have been for many years of about equal value at the coinage ratio of about iSi to I. Thus the last report of the Treasury Department, July I, 1896, estimates in the approximate stocks of money in the principal countries of the world : Gold, $4,068,800,000 ; silver, $4,070,500,000. Add- ing these together, we get a total of, say, $8,000,- 000,000 as the world's stock of real money. 229 230 Joint- Metallism. But if the value of the silver money be reduced to the present market ratio of the metals, the value of the silver money in the world would be reduced from, say, $4,000,000,000 to $2,000,000,000, and the value of the world's stock of real money would be reduced from $8,000,000,000 to $6,000,000,000. This gives some idea of the shock which the mone- tary affairs of the world have received from the demonetization and further threatened demonetiza- tion of silver. Even supposing that the population and trade of the world should cease to increase, and that the present production of gold and silver should be maintained, and that all of it should be coined, it would require seven years to make up this differ- ence of $2,000,000,000. The population, however, must increase, and much of the present production of gold is specu- lative, from mines that sell shares but cannot earn dividends, and a large portion of the product of the precious metals will continue to be used in the arts, so that many times seven years would be re- quired to make up the difference, which can be made up promptly only by the larger coinage use of silver, by which use its market value would be advanced. It is unfortunate that neither of the great parties in our country has declared for real honest hard money and against all credit money, and it is im- portant that the people should understand this question and know what hurts them when they After the Election, What ^ 231 find that the proposed Democratic or Republican panacea fails to give relief. I am opposed to the coinage of silver at 16 to i. I am opposed to it, not because I believe in gold monometallism. I am equally opposed to that. I believe there is a solution of this whole difficulty which reasonable men in time may come to ; and that is the free coinage, on substantially equal terms, of both gold and silver, in quantities of equal value, at the ratio of their market values. This would work no injury to any just interest. I would have the silver in new silver standard coins to be equal in weight to the gold in the gold standard coins ; and I would open the mint to the free coinage of both gold and silver when presented together in quantities of equal value of each metal, according to the government ratio of the time, which should be based always on the market ratio, and changed only when the market ratio changed as much as one integer, e. g., from, say, 25 to i to 24 to I, or from 29 to i to 30 to i. The true eco- nomic ratio would thus soon be arrived at, and would very seldom change ; and any change would not make recoinage necessary. I would have a currency so based, halt on gold and half on silver, legal tender for the payments of debts contracted after a date some months later than the passage of the act. The Constitution empowers Congress " to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and meas- 232 Joint-Metallism. ures." These words " coin," " regulate," and " fix "" are very significant. The total exchanges of the Clearing Houses of the United States average nearly ^1,000,000,000 per week ; for the year ending September 30, 1894, they were $45,028,496,746 ; for the year ending September 30, 1895, $51,111,591,928. When we add to this the total amount of trans- actions that do not go through the Clearing Houses, how ridiculous it appears that we should hesitate to replace with specie our $346,000,000 of fiat money (greenbacks), so dangerous a menace to all the interests of our country. The people of this great honest debtor country, when sufficiently educated by history and experi- ence, will find that their safety requires the aboli- tion of all credit money, and they will abolish it when they realize that credit money restricts credit, that every dollar of the miserable, dishonest greenbacks has cost the country an unnecessary loss of many dollars, and that every dollar of credit money destroys many dollars of credits. As human nature is constituted, no popular gov- ernment can afford to tamper at all with so insidi- ous and dangerous a stimulant as uncovered paper money. A Scotch doctor advised his patient to take a little whiskey in hot water. " But," said the pa- tient, " I am a temperance man, and would not like to have it known that I took liquor." " Well, have a bottle of whiskey in your room, and ring for After the Election, What? 233 shaving water." Some days later the doctor called again, and asked the servant how her master was. She replied : " He 's better physically, but he 's gone clean daft, and shaves himself seven times a day." Americans are shaving themselves more than seven times a day. Anson Phelps Stokes. New York, September 10, i8q6. INDEX. " Abram's BankeiS," 164. Accusation against bimetallism, 163. Act of Congress, November i, 1893, 84. Administration-Baltimore-Canadian system, 187. After the Election, what?— 229. Alison's History, 130. . Amenities of monometallistic argumentation, 162, 103, American monometallists, 56. American Social Science Association 209. Ammunition of the most deadly kind, 33- Anarch arsis, xvi. Andrews, President, 121, 142. Apotheosis of credit, x, 187. Appendix, 77. Appreciation of gold, 39, 103, Ibo. Aquinas, 153. Argentum, The Goddess, 45, 53- Aristotle, xvi, I53- Arts, use of gold in, 87. As between silver and gold, 220. Asiatic Journal, 92. Athenians, xvi. Atkinson, Edward, 56, I39. M2, I44- Attempts to persuade, 45-. Augmentation of capital, ix, 187, ib». Bacon, xii, I55. 164. Bad money in old times, xix. " " rnodern times, xix. Bagehot, Walter, I45- Balfour, Arthur James, 131, 182. Banking and Currency Committee, viii. Banks, 189, 203. Basal proposition. The, 29. 235 236 Lidex. Basis, honest, safe, self-regulating, permanent, 4, 18, 38, 183; 190, 1 04. Basis, insufficient, 21, 55, 140. " the only final, 39, 69. Bible, " a vein for the silver and a place for gold," 25. " can an Ethiopian change his skin? 65. " 222. Bibliology, 177, 178. Billon, igi. Bimetallic money, how formed, 121. Birds and Farmers, 219. Bitterness, 221. Blaine, 222. Bonds (government) 216. Bonds coming back, 216. Boston, 193. " brethren, 31. Bowker and lies, 178. Bryan, William J., 228. Bullion, 90. Bullionist views, vi. Business and currency, 9. " prosperity, 3 Cairnes, Prof., 210. Candid consideration of competent critics, xx. Capita, stocks of money (per capita), 108, 109. Carlisle, Secretary, 73, 84, 171, 224. Cassiodorus, xii, 171. Century, beginning of, 66. Cerealism, Joint-, 70. Changes in ratio, xix, 5, 6, 22, no, 198. Changing number instead of recoining, 124, 134, 199. Charles V, " The Wise," 151, 153. Checks, 58, 68. China, 92. " flying paper currency, 92. Marco Polo, 92. Churchmen and coinage, 153. Clear thinking, 20. Clearing-house certificates, 8. Clearing-house exchanges, 232. Cleveland, President, 74, 79, 224. hope, 74, 79. " letter of acceptance, 82, " message, 79. hidex. 237 Coinage, 19, 92, 93. English system, 163. " on Government account, viii, 137, 171, 172. Coke, 164. Colonial currency, 192. Commercial ratio of gold and silver, no. Commission, the royal, 94. " should be appointed, 141, 206. Commodities steady, money changes, 85 Concurrent resolution, 1 15, 222. Conference, monetary, 30, 86. Congress, act of, 84, 204, 205. Constitutional position of gold and silver, 24, 80. Constitution of the United States, xviii, 80, 124, 222, 223, 231. Continued use of dollars and cents, etc., 202. Continuous debts, 221. Contracts, future, 5, 38, 54, 118, 125. Conveniently adjusting changes in market ratio, 124, 183. Conventions, national, 81, 82. Copernicus, ix, xii, 151, 152, 154, I55, I57, 164, 168, 177. Cossa, Luigi, 159, 160, 177, 178, 179. 180. Cotton, why it declines with silver, xv, 138. Countries, money used in, 108, 109. Courtney, Leonard, 104. Cow in India, 48. Credit as good as money, ix, 179, 187. " money, 191, 192, 217. " cannot permanently supplant money, vii, 131. Credits, 8, 68, 140. Criticisms, 17, 66, 197, 217. Cross-roads politicians, 164. Cunningham's growth of English trade, etc., 159. Currency bill, viii, 191. plank, 218. must always be convertible, xix, 70, 203. proper limit of expansion, 8, 24. gold an insufficient basis, 4, 8, 21, 30, 56-58, 66. security as to value of, 18, 24, 39. question in politics, 20, 38, 62. Dangers of the situation, ix, 66, 68. Debate at Saratoga, 207. " envenomed, 20. Debtor class, 31. Debts, 4. " national, 66. 238 Index. Debts made to appear smaller, 137. Decimal system, 122. Decline in silver, 7, 21, 30, 38. " " values, 4, 21, 30, 38. » Defects of bimetallism as commonly advocated, 134. Definition of terms, 121. Depression in trade, causes of, xvi. Democratic platform, 81, 117, 205. Demonetization, 23. Details, ones that can be varied, vi. Director of the mint, g2. Discretion of the Secretary of the Treasury, f 7. Discussion necessary, 40, 41, 65. Dubois, 152. Economic ratio, 7, 198, 200. Economist, The, 180. Empirical ratio, 134, 182. Engineering and Alining yournal, 87, English Parliament, iqo. Equal parts of gold and silver, 5, 6, 57, 72, 198, " power of every dollar, 81, 82. Equilibrium established by joint-metallism, 127, 133. Equivalent as well as measure, 125. Establishment of the mint, 85. " " a money unit, 85. Ethiopian, 65. Etude sur le Traite de la Monnaie, xiii. Evening Post, 13, 29, 40, 45, 61, 70, 86, 175, 179. Fish, 188. Fifth letter on joint-metallism, 65. Final basis, 4, g, 18. 24, 39, 69, 70, 204. " report of royal commission, 94-103. " standard, 197, 200. First letter on joint-metallism, 3. Flexible ratio, 135. Flying paper, 92. Forum, The. 210. Four causes of the fall of nations, xviii. Fourth letter on joint-metallism, 53. Freight on bullion by value not weight, 131. French ratio fixed 1803, 128, 131. Frewen, Moreton, 86. Future contracts, 5, 38, 54. Index, 239 General assets, 187. " prosperity depends, xv« Germany, 23. o q, Giffen, Dr. Robert, 73, 74. 85, 87, 89, QO, 91, 180, l8l. Gladstone, W. E., his frank statement, 69, 210. Goddess Argentum, 45, 53- Gold more durable than silver, 131. " world's stock, 108, 109. " statistics, 1 05-1 10. " production, 57, 86-88, 106, 107. •'- per capita stocks, 108, no. " probability of increase, 55. " cost of production, 88. " standards, 5. " output and prices, or any other metal, 91. •' needed for reserve and change, 90. " supply of, 30, 86, 87, 90. 91. " and silver, half each, j, 6, 57, 72- " cannot always be got from abroad, 68. " reserve, vii, 182. •' Democrats, 116. Golden calf, 47- Goodly heritage, 229. Government bonds, xx, 173, 188, 189, 203, -lO. " paper-money should be only ccrtihcates, 20. " partnership, 216. " ratio, 7. Great Britain, 69. Greenbacks, 193, CI7, 232. Greer, Rev. David H., facing title-page. " Gresham Law " known to Oresme and Copernicus, 17O. Gresham, Sir Thomas, 154, I55, 1/6, I77- Hadley, Professor, 174- Hamilton's report, 85, 223. Hankinson, 155. Harris, W. T., U. S. Commissioner of Education, facing title- page, 155- Harrison, ex-President, 84. Heidelback, Mr. 210. Herries, 155. Hides as clothing, 50. Higgins, Senator, 213. Highlander, 65. Hill, David B., 223. 240 Index. Historical and just position, 41, 46, 47. History of money, 151. Honest legislation demanded, 197, 205, " money, 230. Horr, Hon. Roswell G. , 212. Houldesworth, Sir William H,, 136. Huet, 152. Hutchinson, Gov., 192. Illegitimate decline in prices, 136. Impending crisis, 141, Incomes reduced, 4. Index numbers, 131, 145. Insurance companies, assets of, 67. Interest in the West, 227. International agreement, 7, 81, 83, 128. Irish peasants, 68. Jefferson on money unit and coinage, 85, 223. Jenks, Prof. J. \V., 209. John, " The Good," xiv. Joint-cerealism^ 70. Joint legal-tender certificates, 6-122, 201. Joint-metallic money, how formed, 121. Joint-metallism a merit system, 145. " vs. bimetallism and monometallism, 121, 203. Klaproth, 92. Labor the real standard of value, 73, 85. Latin union, 132. Laughlin, Prof., 56. Law, 21. Leading position of the United States, 141. Legal tender, only gold and silver, 80. " joint certificates, 6, 122, 201. " " opinion, 67. " ratio, 21. Legislation, 81, 82. Letters on joint-metallism, 3, 17, 37, 53, 65. " to Springfield Republican, 218. Limit of currency expansion, 8, 9, 18. Lincoln, President, 55. Locke, xii, 94, 128, 155, 158, 164, 172, 175. Locking up gold, 68. Index • 241 London Statist, 73, Q^- Lord Liverpool, I55- Louisbourg, 192. Macleod, Henry Dunning, viii. ix, 155. I59, i&i. 162, 165. 166, 175. 17S, 179. iSi, 187. Market values, 5. 21. Massachusetts Tabular Standard, bO. McKinley, Q3, 223,^ 228. Measure of value. 8. Medium, 72. Merit system, I45- Mezarey, 152- ... , ^^o Mill, John Stuart, viu, 130, Idd, 17»- Mint, real function of, 20. " Director of, 56, 93- '« charges, 7, 19. 121, 123, 201. Monetary conference, 30, 86. " experiments, 191. Monete Cudende Ratio, 151- Money, a certain potentiality, 20. paper, preferred, 70. " half gold, half silver, 3. 2i, 39- 57- " result of large abstraction of, 90. :: S:e,„r"t "pi-l'A-i" b. »„., cer.Bca.« of eota. 20, 24, IQI- , , ^^ Monometallic money, how formed, 121. Monometallist creed, 176- Napoleon's wars, 132. ^^iS^Sof the United States. I4X.I9X Near the unseen sources, xvii. New bimetallism, m. Newfoundland, 1S8. Newport, I93- New silver discussion, I3- Newton, viii, I55. 1^4, 1/2. New York Times, 229. „a t^