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 • MONEY AND PROSPERITY 
 
 BY 
 
 C. II. S. LITTLETON 
 
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 PUBLISHED ISY 
 
 THE EASTERN BIMETALLIC LEAGUE 
 
 1831 Chestnut Street, Philadelphia 
 1898 
 
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 Copyright, 1898, 
 
 BY 
 
 C. H. S. Littleton. 
 
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 f L-7^ ..,-, 
 
 g TO THOSE WHO ARE IN WANT 
 
 -'' OF THE NECESSARIES OF LIFE; 
 
 TO THOSE WHO HAVE ACQUIRED 
 5* WEALTH AND LOST IT; TO THE 
 
 ^ PRODUCING AND INDUSTRIAL 
 
 p CLASSES GENERALLY, THIS BOOK 
 
 IS DEDICATED. 
 
 38925
 
 CONTENTS 
 
 CHAPTER I 
 
 PAGE 
 
 Value of Money ii 
 
 CHAPTER n 
 
 The Cost of Production of the Material from which 
 Money is made does not determine its Value ... 24 
 
 CHAPTER HI 
 Importance of Stability of Value 28 
 
 CHAPTER IV 
 The Functions of Money 32 
 
 CHAPTER V 
 Demonetization of Silver .35 
 
 CHAPTER VI 
 The Gold Standard 54 
 
 CHAPTER VII 
 Honest Money 71 
 
 CHAPTER VIII 
 Falling Prices 81 
 
 CHAPTER IX 
 
 The Free and Unlimited Coinage of both Gold and Sil- 
 ver at the Present Legal Ratio of Sixteen to One 
 BY THE Independent Action of the United States . 94 
 
 5
 
 INTRODUCTORY 
 
 Since the demonetization of silver in 1873, no 
 political issue has been so frequently and thoroughly- 
 discussed as the money question. Having its origin 
 in the West and South, the rising tide of debate 
 swept eastward, until it culminated in the fiercely 
 contested campaign of 1896. In this test of strength 
 the advocates of the gold standard were accorded 
 the honors of an apparent victory ; but when it is 
 remembered that no less than six million five hundred 
 thousand voters registered at the polls their approval 
 of bimetallism, it will be readily seen that the so- 
 called victory cannot in any sense be regarded as a 
 popular one. Moreover, it must be admitted that 
 this primary trial of strength has in no degree abated 
 the vigor which at the time of the candidacy of 
 Hon. William J. Bryan characterized the efforts of 
 the champions of bimetallism to restore silver to 
 the legal ratio of sixteen to one. 
 
 It is generally admitted that our present monetary 
 system must speedily be corrected. The advocates of 
 
 7
 
 8 INTRODUCTORY 
 
 the gold standard have numerous plans to offer, but 
 not one that will increase the supply of full redemption 
 money. Bankers demand bank issues of paper money. 
 Such currency, however, would be only credit money. 
 What the people of the United States need and must 
 have before general prosperity is again established, is 
 an increase in the full legal-tender metallic money. 
 In order to secure this increase bimetallists propose 
 that our mints shall again be opened to the free, 
 unlimited, and independent coinage of both gold and 
 silver at the constitutional ratio of sixteen to one, 
 without waiting for the consent or co-operation of 
 other nations. 
 
 Money is a common medium of exchange and a 
 measure of values. Increasing the circulating supply 
 of a country, the demand for money remaining the 
 same, necessarily decreases the value of money by 
 lessening its purchasing power, and thus increases 
 the price of goods and property. If the supply is 
 not increased, in proportion to the requirements of 
 the people and the increase of population, money will 
 rise in value, — that is to say, its purchasing power 
 will be increased, and all goods and property will 
 correspondingly fall in price. 
 
 Between 1850 and 1870 the American people en- 
 joyed great prosperity, and during this period we
 
 INTRODUCTORY 9 
 
 find a reduction in the cost of many commodities, — a 
 reduction as great, or greater, generally speaking, than 
 that witnessed in subsequent years. Despite this fact, 
 however, we had rising prices during that time; while 
 since 1873 general prices have fallen fifty per cent. 
 
 The creditor classes are benefited by an increase in 
 the value of money, and the producing and business 
 classes generally are benefited by an increase in the 
 value of the things for which money exchanges. 
 Lowering the cost of production implies an increase 
 of industrial undertakings, more employment, better 
 wages, and a greater demand for commodities. Our 
 merchants and tradesmen in every branch of business 
 should feel its happy effects ; but a constant fall in 
 prices is disastrous to every branch of industry, and 
 to the debtor class in particular. 
 
 Until rightly settled, the money question is, and will 
 continue to be, paramount to all other political issues. 
 
 There must be something wrong with the laws of 
 this republic, else there would not be men, women, 
 and children starving for the necessaries of life ; there 
 would not be honest and willing hands seeking em- 
 ployment without finding it ; there would be no cry 
 of distress in this great land of ours if laws had been 
 enacted protecting the interests of all alike, rather 
 than the interests of the few.
 
 MONEY AND PROSPERITY 
 
 CHAPTER I 
 
 VALUE OF MONEY 
 
 Man in supplying most of his needs can exercise 
 some choice in selection. If an article desired be 
 too scarce or dear he can choose something else, but 
 there is no substitute for money. No matter how 
 high the value of money may be, the people must 
 have it to procure food, clothing, and shelter. 
 
 From time immemorial mankind has recognized 
 
 the necessity of accepting some common medium 
 
 of general exchange. Among the barbarians of the 
 
 ancient world this medium consisted of horses, cattle, 
 
 skins, and weapons of warfare ; and a similar method 
 
 of exchange still prevails among savage races to-day. 
 
 We learn in the Homeric poems that the arms of 
 
 Diomed were worth nine oxen; and in the ancient 
 
 German codes law penalties are defined as representing 
 
 specified numbers of live-stock. Leather circulated as 
 
 money in Russia during the time of Peter the Great. 
 
 II
 
 2 MONEY AND PROSPERITY 
 
 We also find that articles of adornment, as jewels and 
 the like, have circulated as money. Wampumpeag, 
 consisting of beads made of black and white shells 
 formed into necklaces and belts, was not only used as 
 currency by the North American Indians, but for 
 many years was used for the same purpose by early 
 white settlers. 
 
 The governor of the plantations of Virginia, in 1618, 
 ordered that tobacco should be received at the rate of 
 three shillings for the pound weight, and prescribed 
 for those who did not comply with this order a penalty 
 of three years at hard labor. In 1732 the Legislature, 
 of Maryland declared Indian corn and tobacco legal 
 tender. Platinum, tin, lead, and iron have also been 
 used as currency. There are, however, several ob- 
 jections to the use of platinum for money. In appear- 
 ance it is inferior to silver, and the cost of making it 
 into coins is very great, owing to the difficulty of 
 melting it. Tin and lead are too soft; and coins 
 made from iron would soon lose their impressions 
 by rusting. Copper and nickel are largely used for 
 minor coins. Gold and silver are spoken of as the 
 precious metals because they are beautiful in appear- 
 ance, susceptible of good impressions by mintage, 
 easily worked, and can readily be detected when coun- 
 terfeited; they are not found in unlimited quantities
 
 VALUE OF MONEY 13 
 
 like iron, and all civilized nations have become familiar 
 with their use as currency. Money is a creation of 
 law. Congress has the power to " coin money and 
 regulate the value thereof," which means that when 
 money becomes too dear or scarce Congress should 
 coin more dollars, and if too cheap or plentiful should 
 coin fewer. 
 
 Man can satisfy all his wants only by his own labor 
 or skill in making articles or parts of articles, or by 
 rendering a specified service which he exchanges for 
 money. With the money thus received he buys such 
 things as he desires. The desire to possess is ever 
 increasing, and, as population increases, the demand 
 for money necessarily becomes greater each year. 
 John Stuart Mill, in his well known work on Political 
 Economy, says, " The value of money is, to appear- 
 ance, an expression as precise, as free from possibility 
 of misunderstanding, as any in science. The value of a 
 thing is what it will exchange for ; the value of money 
 is what money will exchange for; the purchasing 
 power of money. If prices are low, money will buy 
 much of other things, and is of high value ; if prices 
 are high, it will buy little of other things, and is of 
 low value. The value of money is inversely as general 
 prices; falling as they rise, and rising as they fall." 
 Vol. ii., page 25.
 
 14 MONEY AND PROSPERITY 
 
 Again, he says, " If the whole money in circulation 
 were doubled, prices would be doubled. If it were 
 only increased one-fourth, prices would rise one- 
 fourth. There would be one-fourth more money, all 
 of which would be used to purchase goods of some 
 description. When there had been time for the in- 
 creased supply of money to reach all markets, or, 
 according to the conventional metaphor, to permeate 
 all the channels of circulation, all prices would have 
 risen one-fourth. But the general rise of price is 
 independent of this diffusing and equalizing process. 
 Even if some prices were raised more and others less, 
 the average rise would be one-fourth. This is a 
 necessary consequence of the fact, that a fourth 
 more money would have been given for only the same 
 quantity of goods. General prices, therefore, would 
 in any case be a fourth higher." Vol. ii., page 29. 
 
 A nation cannot exist without money, and the 
 supply should be adequate at all times ; to the extent 
 of the insufficiency of the supply all industry and 
 labor must suffer. Money is valuable not by virtue 
 of being redeemable in a specified thing, but because 
 it has the power to command. If gold should be 
 demonetized by all nations, there would be at least 
 fifty or sixty years' supply on hand for use in the 
 arts. What, then, would become of its value ?
 
 VALUE OF MONEY 15 
 
 All great wars have been fought on a paper money 
 currency. During and after the Rebellion, until the 
 resumption of specie payments, paper money was the 
 only money in circulation in this country. Nations 
 have preferred metallic money, based on the auto- 
 matic * supply of the mines, though it leaves them 
 when war breaks out. Creditors desire money based 
 on a material which has commodity value, regardless 
 of the fact that such value is given it by the fiat of the 
 government commanding it to be coined into money. 
 
 It is frequently said " law cannot create value," 
 This is true, for value is that for which a thing will 
 exchange, — a mere relation. But law can create a 
 demand for money by endowing it with legal tender 
 functions, and commanding it to be received for dues 
 and debts, both public and private. 
 
 After the Rebellion the question as to whether or 
 not the government had the power to create money 
 
 * What is known as the automatic system, or rule, limits the volume 
 of coin put into circulation by the quantity of the metals taken from 
 the mines. The system is not scientific or perfect. When the mines 
 are abundantly productive more bullion finds its way to the mints, 
 and when the output materially falls off the annual supply of coin 
 necessarily decreases. No nation has ever had too much full legal 
 tender gold and silver money, and, judging from the past, never will 
 have.
 
 1 6 MONEY AND PROSPERITY 
 
 was fully discussed, and it was decided by the Supreme 
 Court in the legal tender cases that the United States 
 government had the power, according to the Consti- 
 tution, to make full legal tender money of paper or 
 any other material, and that the courts could not 
 question monetary laws enacted by Congress. 
 
 Money should not be confounded with wealth, the 
 product of labor, for money is essentially a general 
 medium of exchange, a means for the transmutation 
 of wealth from one form to another. Cheapening or 
 increasing the value of money, the demand remaining 
 the same, means increasing or decreasing the amount 
 in circulation; it means increasing or decreasing the 
 price of all goods and property. If prices are high, 
 money will not buy much property or products of 
 labor. If prices are low, it will command much more 
 of them. The amount of money in circulation, other 
 things remaining the same, fixes prices. More money 
 raises prices, less lowers them. 
 
 Distinction must be made between exchange value 
 and value in use. The air we breathe is valuable in 
 use, but it has no exchange value. Most commodities 
 have exchange value and value in use. A coat and 
 a gold watch have exchange value as well as value in 
 use, for they may be exchanged for other objects or 
 money; the coat is useful as an article of wearing
 
 VALUE OF MONEY 17 
 
 apparel, and the watch to keep the time of day. 
 When the function of money is correctly understood 
 it will be seen that money cannot possibly have in- 
 trinsic value. For instance, let us consider a gold 
 brick in the form in which it finds its way to the mint. 
 Viewed merely as a piece of metal it possesses nothing 
 in itself. It cannot be used as a necessary of life, for 
 we can neither eat nor drink it, nor will it of itself 
 clothe or shelter us ; as a medium of exchange, how- 
 ever, it will procure articles which will administer to 
 our physical and mental requirements. Bullion, of 
 course, can also be made to possess a certain amount 
 of value in use by the labor of man. Thus, suppose 
 the gold brick to be cut into two equal parts, one to 
 be coined into money and the other to be used in the 
 arts. The pieces of money coined would be valuable 
 only by reason of their power of exchange, while the 
 gold used in the making of watches, rings, and other 
 articles of jewelry would, by being of practical utility, 
 possess a value in use. In other words, commodities 
 and property have both price and value, — exchange 
 value and value in use; but money has exchange 
 value only. 
 
 The value of gold and silver bullion depends upon 
 the demand for the metals for use as coin and in the 
 arts. There are about four billion dollars of gold in
 
 1 8 MONEY AND PROSPERITY 
 
 the world coined into money, and to discontinue its 
 use for currency and throw the whole amount on the 
 market for use in the arts would deprive it of almost 
 its entire value. 
 
 David Barbour, in " The Theory of Bimetalhsm," 
 says, " Gold and silver owe almost the whole of their 
 value to the fact that they can be converted into and 
 used as money. If gold and silver were absolutely 
 excluded from the currency of the world, their value 
 would be greatly reduced, if it did not almost entirely 
 cease to exist ; and if either gold or silver were largely 
 excluded from the currency of the world, the value of 
 the metal so excluded would experience a very great 
 fall." — T]ie Theory of Bimetallism, chapter ii. 
 
 Mr. Macleod, in speaking of intrinsic value in his 
 " Theory and Practice of Banking," says, " This un- 
 happy phrase meets us at every turn in economics, 
 and yet the slightest reflection will show that to define 
 value to be something external, and then to be con- 
 stantly speaking of intrinsic value, are utterly self- 
 contradictory and inconsistent ideas. Thus over and 
 over again it is repeated in economical treatises that 
 money has intrinsic value, but that a bill of exchange 
 or bank-note is only the representative of value. 
 Money, no doubt, is the produce of labor, but, as 
 Adam Smith observed, if it would exchange for
 
 VALUE OF MONEY 19 
 
 nothing it would have no value ; so, M. Say says, that 
 the value of gold and silver consists only in what 
 they will buy. How, then, can its value be intrinsic ? 
 How can anything have intrinsic value unless it has 
 inside itself the things it will exchange for? ' Money 
 has intrinsic value !' Has a piece of money got the 
 merchandise, and all the other things it will purchase, 
 inside itself? Money will exchange for anything, 
 corn, houses, horses, carriages, books, etc., and each 
 of these is the value of money with respect to that 
 commodity. But which of these is its intrinsic value ? 
 The incongruity of these ideas is so glaring that it is 
 only necessary to call attention to it for it to be per- 
 ceived at once. Yet from the very beginning of the 
 science this phrase has infested it." — TJieory and 
 Practice of Banking, page 48. 
 
 Again, Mr. Macleod says, " Moreover, we see on 
 considering the term value that it is nonsense to speak 
 of the representative of value. Value is a ratio — an 
 external relation. What can be the representative of 
 a ratio or of an external relation ? To say that 
 money, because it is material and the produce of 
 labor, has intrinsic value, and that a bank-note is only 
 the representative of value, is just as absurd as to say 
 that a wooden yard measure is intrinsic distance, and 
 that the space of thirty-six inches between two points
 
 2 MONEY AND PROSPERITY 
 
 is representative distance. It is of the first importance 
 to economic science to exterminate this unhappy 
 phrase ' intrinsic value,' which is clearly shown to be 
 a contradiction in terms." — TJicory and Practice of 
 Banking. 
 
 Bailey, in his work on " The Nature of Value," 
 says, " In the examination of the present subject, as 
 discussed by those writers on whose doctrines I have 
 ventured to animadvert, I have been forcibly struck 
 with the vagueness, the inconsistencies, and the errors 
 which have arisen from speaking of value as a sort of 
 general and independent property ; and I cannot too 
 strongly recommend the student of political economy 
 never to let the word value pass before him without 
 putting the question, ' Value in what ? or in relation 
 to what ?' The value of a commodity must be its 
 value in something, and whenever the term is used 
 with any definite meaning, that something may be 
 assigned. If it cannot be assigned, the reader may 
 rest assured that the author, whoever he be, is writing 
 without any determinate ideas." — TJie Nature of Valne, 
 pages 34 and 35. 
 
 Professor Jevons, in " The Theory of Political Econ- 
 omy," says, "Value implies, in fact, a relation; but if 
 so, it cannot possibly be some other tiling. A student 
 of economy has no hope of ever being clear and
 
 VALUE OF MONEY 21 
 
 correct in his ideas of the science if he thinks of 
 value as at all a tJiiiig or object, or even as anything 
 which lies in a thing or object. '' — The Theory of Political 
 Economy, page 82. 
 
 The same author, in his well-known work on 
 " Money and the Mechanism of Exchange," very 
 tersely remarks, " Value, like utility, is no intrinsic 
 quality of a thing ; it is an extrinsic accident or 
 relation." 
 
 The amount of labor expended in producing gold 
 and silver bullion does not determine the value of 
 money. To illustrate, suppose two artists each de- 
 vote a month's labor in producing an oil-painting. 
 One of them may command a thousand or more 
 dollars, and the other possibly not more than ten 
 dollars, though each might have spent an equal num- 
 ber of hours' labor on his picture. The demand for 
 the pictures would determine their value, and not the 
 amount of labor expended in producing them. 
 
 The supporters of the gold standard persistently 
 assert that the true test of money is " fire ;" that if 
 you melt down a gold dollar the metal will be worth 
 as much as the dollar before it was melted ; but if 
 you melt down a silver dollar, the value of the metal 
 will be less than one-half the value of the silver 
 dollar. Such nonsense enters into the arguments
 
 2 2 MONEY AND PROSPERITY 
 
 addressed to those who do but Httle thinking for 
 themselves. Of course, if you melt down a gold 
 dollar the metal will be worth as much as before it 
 was melted, because, the mints being opened to the 
 free and unlimited coinage of gold, you can take the 
 metal to the mints and have it coined into another 
 gold dollar; but since 1873, when our mints were 
 closed to the free coinage of silver, and with no great 
 civilized nation giving free and unlimited coinage to 
 the metal, it is absurd to expect it to maintain its for- 
 mer commercial value ; besides, if silver were equal 
 in value to gold, at the ratio of sixteen to one, and 
 the silver dollar should be melted down, the mints 
 would refuse to recoin it. 
 
 The beneficiaries and champions of the gold stand- 
 ard are constantly speaking of intrinsic value in the 
 gold dollar, and it is one of their stock arguments 
 that gold is preferable to silver, inasmuch as the so- 
 called intrinsic value in the gold dollar is much 
 greater at present than it is in the silver dollar. They 
 contend that it is not the fiat of the government that 
 gives the gold and the silver dollars value, but that 
 their worth is owing to their intrinsic value, — that the 
 value is inherent. Let us see how this idea will bear 
 analysis. The gold dollar contains 23.2 grains of 
 pure gold; the silver dollar 3/1/4^ grains of pure
 
 VALUE OF MONEY 23 
 
 silver; a certain amount of alloy is added to give to 
 each the requisite hardness and durability. It is 
 obvious that the alloy in them is not considered in 
 estimating their intrinsic value. If these dollars pos- 
 sess intrinsic value, and as the metals on which they 
 are based are not of different degrees of purity, but 
 pure, such value in its entirety at any given time 
 would be 100 per cent. When silver was demone- 
 tized in 1873, the intrinsic value of gold and silver 
 was 100 per cent.; they are now, and will remain, 
 100 per cent. The value of gold to-day, as measured 
 in silver, is more than twice what it was in 1873. 
 
 The fallacious theory of intrinsic value in money 
 has led many people to lose sight of the fact that 
 gold and silver bullion derive their principal value 
 from the use of the metal as money. Value is a 
 mere relation of a thing as regards other things and 
 the people in need of them. There are two factors 
 which constitute value, human desire, with ability to 
 reduce an object to possession, and limitation of the 
 number of objects desired. The commercial value of 
 gold, like other commodities, depends upon supply 
 and demand. If the demand is continually increas- 
 ing, the supply must be increased, or the value will 
 constantly rise.
 
 CHAPTER II 
 
 THE COST OF PRODUCTION OF THE MATERIAL FROM 
 WHICH MONEY IS MADE DOES NOT DETERMINE ITS 
 VALUE 
 
 Money, properly understood, is not a commodity. 
 Gold and silver, when not coined, are commodities. 
 The value of money depends principally upon supply 
 and demand, and not upon cost of production of the 
 material from which money is made. 
 
 General Walker, who is opposed to paper money, 
 says, "The claim that greenbacks are not money in 
 the fullest sense of that term, that they cannot do all 
 in the way of measuring values, so called, which gold 
 or silver may do, is untenable, and it can be of no 
 advantage to any really sound cause to seek to main- 
 tain it." — Money in its Relations to Trade and Industry, 
 
 preface. 
 
 Again, he says, " Money is to be known by its doing 
 a certain work. Money is not gold, though gold 
 may be money ; sometimes gold is money and some- 
 times it is not. Money is no one thing, no group of 
 many things having any material property in com- 
 24
 
 THE COST OF PRODUCTION, ETC. 25 
 
 mon. On the contrary, anything may be money ; and 
 anything, in a given time and place, is money which 
 then and there performs a certain function. Always 
 and everywhere that which docs the money work is 
 the money thing." 
 
 John Stuart Mill, in his " Political Economy," says, 
 " From their durability, the total quantity in existence 
 is at all times so great in proportion to the annual 
 supply that the effect on value, even of a change in 
 the cost of production, is not sudden ; a very long 
 time being required to diminish materially the quan- 
 tity in existence, and even to increase it very greatly 
 not being a rapid process." — Political Ecojiomy, Book 
 III., chapter vii. 
 
 The value of gold and silver does not, for many 
 reasons, depend upon the cost of production to the 
 extent of other commodities. The cost of produc- 
 tion has not been a factor in lowering their value. 
 The demand for money has always been greater than 
 the supply, and it is not conceivable that more of the 
 metals can in the future be mined than will be needed 
 for use as money and in the arts. 
 
 So-called statisticians and advocates of the gold 
 standard have attempted to show that silver can be 
 mined for fifty cents an ounce. No note is taken of 
 the millions of dollars expended in unsuccessful at-
 
 2 6 MONEY AND PROSPERITY 
 
 tempts to locate and develop mines. Expert miners 
 claim that for every silver or gold dollar produced 
 probably two have been expended. In mining coal, 
 iron, or other metals, mining experts can form reliable 
 opinions as to quantity and quality. Machinery and 
 buildings can be erected and a safe and comparatively 
 permanent paying business established. The mining 
 of gold and silver, however, is more speculative. 
 
 The State Geologist of Colorado, Mr. T. A. Rick- 
 ard, says, " Ore deposits are not inexhaustible. The 
 average life of a productive mine can be measured on 
 the fingers of one hand ; and, therefore, any region to 
 maintain its output must be sustained by fresh dis- 
 coveries to keep pace with the exhaustion which 
 creeps upon old producers. Such is no longer the 
 case in silver-mining. The yield of Leadville is 
 maintained because some of its ores carry a heavy 
 percentage of lead as a by-product, and others con- 
 tain iron in such proportion as to render the out- 
 put of certain mines valuable as a flux in the smelt- 
 ing of silicious gold ores. The big veins of Creede 
 are receiving only a half-hearted development. The 
 wonderful bonanzas of Aspen have been sadly im- 
 poverished, and the mines of Rico are crippled by an 
 insufficiency of exploratory work." — North American 
 Review for April, 1896.
 
 THE COST OF PRODUCTION, ETC. 27 
 
 The cost of gold- and silver-mining cannot be de- 
 termined from the output of one or two mines. An 
 enormous amount of money is spent in prospecting, 
 tunnelling mountains, and developing mines that never 
 yield any return. Gold and silver are found in un- 
 even veins and pockets. One blast has been known 
 to blow out the last remnant of the " pay streak" in a 
 mine, and reduce to poverty owners who, a moment 
 before, thought themselves rich. The money spent 
 in both gold- and silver-mines that do not pay is 
 much greater than that spent in those that do pay.
 
 CHAPTER III 
 
 IMPORTANCE OF STABILITY OF VALUE 
 
 Money, besides being a medium of exchange and 
 a measure of values, is a standard for deferred pay- 
 ments ; therefore, to be ideal, it should be absolutely- 
 invariable in character. Gold and silver are produced 
 in limited quantities, and it is obvious that if we 
 abandon the use of one as currency, while the de- 
 mand remains the same, we necessarily double the 
 value of the other. It is impossible to have a money 
 standard absolutely invariable in value ; but variations 
 of a few cents in one metal, as measured by the other, 
 are infinitely less harmful than for one to double in 
 value and then continue to rise. Constantly increasing 
 the value of money enormously benefits the creditor 
 class at the expense of the debtor, who has to give up 
 more to discharge an obligation. 
 
 Let us suppose that a man borrows five thousand 
 dollars to-day, agreeing to pay it back at the expira- 
 tion of ten years. The five thousand dollars at this 
 time will buy a certain amount of goods and property 
 at a certain price. When the obligation falls due, if 
 
 prices should be higher, the borrower would pay back 
 28
 
 IMPORTANCE OF STABILITY OF VALUE 29 
 
 the same number of dollars he originally received, 
 but they would have less purchasing power, and the 
 creditor would be the loser. If prices should be 
 lower their purchasing power would be greater and 
 the debtor would suffer. 
 
 Gold monometallists say they prefer the gold stand- 
 ard because it insures " stable" money. The gold dollar 
 having doubled in value — that is to say , doubled in 
 purchasing power — in the last twenty-five years estab- 
 lishes the fact that it is not a stable dollar. Those 
 who possess money, or securities payable in money, 
 know that when prices are falling they can obtain an 
 increasing amount of the products of labor for each 
 dollar; then, in the opinion of the creditor class, 
 money is " stable," " sound," and " honest." 
 
 The ratio in which money exchanges for other 
 commodities should be as nearly invariable as pos- 
 sible. As every change in the value of money up- 
 sets the prices of all kinds of property and causes 
 more or less damage, according to the extent of the 
 change, legislation should tend towards maintaining a 
 uniform value of money. 
 
 All political economists and authorities on the 
 money question admit the quantitative theory of 
 money. Money commands all human needs. These 
 needs are constantly increasing with increased popu-
 
 30 MONEY AND PROSPERITY 
 
 lation and production, and the amount of money in 
 circulation should be enlarged to meet the increased 
 demands. The amount of money in circulation meas- 
 ures values ; and if the amount is large the total value 
 of all property, as expressed in dollars, will be cor- 
 respondingly large. The amount of money in circu- 
 lation, other things remaining the same, regulates the 
 value of each dollar. 
 
 Ex-Secretary of the Treasury Fairchild, in address- 
 ing the Monetary Convention at Indianapolis, January 
 26, 1898, said, "A fact of civilization is, that men 
 measure value by gold, and, whatever the standard 
 named in law, men will continue to measure value by 
 gold while the present civilized order endures." 
 
 The following statement of the Treasury shows the 
 amount of money which the present Secretary claims 
 was in circulation in the United States March i, 1898 : 
 
 Gold coin $553,884,882 
 
 Standard silver dollars 59,020,904 
 
 Subsidiary silver 64,270,811 
 
 Gold certificates 36,440,789 
 
 Silver certificates 380,287,427 
 
 Treasury notes, Act July 14, 1890 . . . 98,464,430 
 
 United States notes 264,164,186 
 
 Currency certificates, Act June 8, 1872 . 48,430,000 
 
 National bank notes 221,413,230 
 
 Total $1,726,376,659
 
 IMPORTANCE OF STABILITY OF VALUE 31 
 
 According- to Mr. Fairchild's claim, the value of 
 all our products and property of every kind must 
 be measured by ;S5 5 3,884,882 of gold, instead of 
 the total amount of all kinds of money, — namely, 
 ;^ 1, 726,376,659. 
 
 When we reflect that nearly all the gold that is now 
 being mined is used in the arts, it will be seen, by 
 continuing to measure the value of all our property 
 and commodities by the gold standard, that a failure 
 to increase the supply of gold must result in a con- 
 tinued fall of prices. 
 
 The report of the Secretary of the Treasury makes 
 it appear that the per capita circulation of money in 
 the United States March i, 1898, was ;^23.42, This is 
 manifestly a false statement, for when we eliminate 
 from our calculation the hoardings of banks and the 
 amount of money destroyed, we will find the actual 
 per capita to be less than ^10. During the time of 
 our Civil War the per capita circulation of the country 
 amounted to about ^65, and the people enjoyed general 
 prosperity.
 
 CHAPTER IV 
 
 ■ THE FUNCTIONS OF MONEY 
 
 Money remedies the inconveniences of barter, and 
 performs two distinct functions, acting as a medium of 
 exchange and a measure of values. The baker having 
 more bread than he needs would exchange some of it 
 for meat ; to save himself the trouble of hunting up 
 some one who would give meat for bread, he ex- 
 changes his bread for money, and with the money 
 buys meat ; thus money acts as a medium of ex- 
 change and a common measure of value. When 
 people began to borrow and lend, a third function of 
 money developed, — a standard of value. Since all con- 
 tracts and debts are based on the standard of value 
 existing at the time, it is obvious that the standard 
 should be as nearly invariable as possible. If it re- 
 quires more of the products of labor to obtain the 
 money necessary to discharge a debt, other condi- 
 tions remaining the same, than it did when the debt 
 was contracted, the debtor is the sufferer. If it re- 
 quires less labor, the creditor is the loser. 
 
 Even in the time of Aristotle the function of money 
 32
 
 THE FUNCTIONS OF MONEY 33 
 
 was well understood. He says, " Intercourse takes 
 place between people having different objects of de- 
 sire. In order that they may be exchanged with each 
 other it is necessary that they should be compared ; 
 for which purpose money came forward, and is, as it 
 were, a medium, for it measures everything, both the 
 excess and the defect ; as, for instance, how many 
 pairs of shoes will be equal to a house or to food; for 
 if this is not done there will be no exchange or inter- 
 course. All things, therefore, must be measured ; but 
 it is, in truth, want ' — or demand — "which holds all 
 things together, for if persons wanted nothing from 
 each other, or not equally, there would be no ex- 
 change. Money, then, has been made, by agreement 
 as it were, a substitute for demand, and is so called 
 because it exists not by nature but by lazv, and it is in 
 07ir power to change it and make it useless for tJie pur- 
 pose. If it were not possible to exchange, there would 
 be no commerce. If a man requires nothing at the 
 present time, money is, as it were, a surety to him 
 for a future exchange that it shall be made when 
 he wants it. But money itself is not always of the 
 same value, yet it has more tendency to remain fixed, 
 wherefore everything ought to be appraised, for so 
 there will be exchange. Money, like a measure, 
 makes things equal ; for if there were no exchange
 
 34 MONEY AND PROSPERITY 
 
 there would be no intercourse, nor any exchange if 
 there were no equality, nor any equality if there were 
 no common measure. In truth, it is impossible that 
 things differing so much should be commensurate, 
 but for practical use it is sufficiently possible. Money 
 makes all things commensurable, fo7' all things are 
 measured by money T 
 
 It is the function that gives most of the value to 
 the material from which money is made, and not the 
 material that gives value to the function. If every 
 nation in the world should demonetize gold and silver, 
 the metals would lose almost their entire value, and 
 it is, therefore, absurd to claim that it is the material 
 that gives them their value when used as money. 
 
 Money is a function rather than a material, — a crea- 
 tion of society, and without it society could not exist ; 
 it renders the exchange of each fractional part of an 
 article as easy as the exchange of the whole. What 
 blood is to the human body money is to the industrial 
 body.
 
 CHAPTER V 
 
 DEMONETIZATION OF SILVER 
 
 Bimetallism may be defined to be the free and 
 unlimited coinage of both gold and silver into coins 
 of full legal tender money of final payment and re- 
 demption, at a fixed ratio prescribed by Congress, 
 with the value of each coin stamped thereon. 
 
 In the days of Washington and Jefferson, in 1792, 
 Congress passed the first coinage law. The dollar was 
 made the unit of value and the money of account. 
 The silver dollar was to consist of three hundred and 
 seventy-one and a quarter grains of pure silver, or 
 four hundred and sixteen grains of standard silver. 
 The gold dollar contained 24.75 grains of pure gold, 
 or 27 grains of standard gold. A ratio was fi.xed 
 between silver and gold at fifteen to one. 
 
 In 1834 the amount of gold in the gold dollar was 
 decreased from 24.75 grains to 23.20 grains of pure 
 gold, or 25.8 grains of standard gold, the ratio be- 
 tween gold and silver being changed from fifteen to 
 one to 15.988, or sixteen, to one. In 1837 the gold in 
 the gold dollar was changed from 23.20 to 23.22 
 
 35
 
 36 MONEY AND PROSPERITY 
 
 grains. The standard weight of the gold dollar was 
 left unchanged at 25.8. The same year, 1837, the 
 standard weight of the silver dollar was reduced from 
 four hundred and sixteen to four hundred and twelve 
 and a half grains ; but the amount of pure silver in 
 the silver dollar was never changed from three hun- 
 dred and seventy-one and a quarter grains of pure 
 silver. In view of the fact that there appears to exist 
 on the part of a few people a misapprehension of the 
 term sixteen to one, it may be well to say that by 
 it we are to understand that the silver in the silver 
 dollar is sixteen times as heavy as the gold in the 
 gold dollar. 
 
 The mints were open to the free coinage of both 
 gold and silver until 1873, and both were full legal 
 tender for all debts, both public and private. In 1873 
 silver was demonetized, and the following table, giving 
 the ratio of silver to gold from 1792 to 1896, will 
 show that there was in 1873 no fear of cheap silver 
 dollars or of over-production of the metal.
 
 DEMONETIZATION OF SILVER 
 
 37 
 
 Commercial Ratio of Silver to Gold from 1792 to 1896 Inclusive. 
 
 (From the United States Statistical Abstract, 1896.) 
 
 Year. 
 
 Ratio. 
 
 Year. 
 
 Ratio. 
 
 Year. 
 
 Ratio. 
 
 Year. 
 
 Ratio. 
 
 1792 
 
 1517 
 
 1819 
 
 15-33 
 
 1846 
 
 15.90 
 
 1873 
 
 15-92 
 
 1793 
 
 15.00 
 
 1820 
 
 15.62 
 
 1847 
 
 15.80 
 
 1874 
 
 16.17 
 
 1794 
 
 15-37 
 
 182I 
 
 15-95 
 
 1848 
 
 15-85 
 
 1875 
 
 16.59 
 
 1795 
 
 15-55 
 
 1822 
 
 15.80 
 
 1849 
 
 15-78 
 
 1876 
 
 17.88 
 
 1796 
 
 15-65 
 
 1823 
 
 15.84 
 
 1850 
 
 15-70 
 
 1877 
 
 17.22 
 
 1797 
 
 15-41 
 
 1824 
 
 15.82 
 
 1851 
 
 15.46 
 
 1878 
 
 17.94 
 
 1798 
 
 15-59 
 
 1825 
 
 15-70 
 
 1852 
 
 15-59 
 
 1879 
 
 18.40 
 
 1799 
 
 15-74 
 
 1826 
 
 15.76 
 
 1853 
 
 1533 
 
 1880 
 
 18.05 
 
 1800 
 
 15.68 
 
 1827 
 
 15-74 
 
 1854 
 
 15-33 
 
 1881 
 
 18.16 
 
 i8oi 
 
 15.46 
 
 1828 
 
 15-78 
 
 1855 
 
 15-38 
 
 1882 
 
 18.19 
 
 1802 
 
 15.26 
 
 1829 
 
 15-78 
 
 1856 
 
 15-38 
 
 1883 
 
 18.64 
 
 1803 
 
 15.41 
 
 1830 
 
 15.82 
 
 1857 
 
 15-27 
 
 1884 
 
 18.57 
 
 1804 
 
 15-41 
 
 183I 
 
 15-72 
 
 1858 
 
 15-38 
 
 1885 
 
 19.41 
 
 1805 
 
 15-79 
 
 1832 
 
 15-73 
 
 1859 
 
 15.19 
 
 1886 
 
 20.78 
 
 1806 
 
 15-52 
 
 1833 
 
 15-93 
 
 i860 
 
 15.29 
 
 1887 
 
 21.13 
 
 1807 
 
 15-43 
 
 1834 
 
 15-73 
 
 I 1861 
 
 15-50 
 
 1888 
 
 21.99 
 
 1808 
 
 16.08 
 
 1835 
 
 15.80 
 
 1862 
 
 15-35 
 
 1889 
 
 22.10 
 
 1809 
 
 15.96 
 
 1836 
 
 15.72 
 
 1863 
 
 15-37 
 
 1890 
 
 19.76 
 
 1810 
 
 15-77 
 
 1837 
 
 15-83 
 
 1864 
 
 15-37 
 
 189I 
 
 20.92 
 
 1811 
 
 15-53 
 
 1838 
 
 15-85 
 
 1865 
 
 15-44 
 
 1892 
 
 23.72 
 
 1812 
 
 16.11 
 
 1839 
 
 15.62 
 
 1 1866 
 
 15-43 
 
 1893 
 
 26.49 
 
 1813 
 
 16.25 
 
 1840 
 
 15.62 
 
 1867 
 
 15-57 
 
 1894 
 
 32-56 
 
 1814 
 
 15.04 
 
 184I 
 
 15-70 
 
 1868 
 
 15-59 
 
 1895 
 
 31.60 
 
 1815 
 
 15.26 
 
 1842 
 
 15-87 
 
 1S69 
 
 15.60 
 
 1S96 
 
 30.32 
 
 1816 
 
 15.28 
 
 1843 
 
 1593 
 
 1870 
 
 15-57 
 
 
 
 1817 
 
 15.11 
 
 1844 
 
 15-85 
 
 187I 
 
 15-57 
 
 
 
 1818 
 
 15-35 
 
 1845 
 
 15-92 
 
 1872 
 
 15-63 
 

 
 38 MONEY AND PROSPERITY 
 
 When considering the money question, one should 
 adhere to sah'ent and decisive facts. The creditor 
 class, and the gold standard press in particular, sel- 
 dom refer to the past history of money and monetary 
 laws, except either by generalities or misrepresenta- 
 tions. They have so often declared that there is a 
 great over-production of silver that many quite honest 
 and unsuspecting people actually believe it. 
 
 The following table from the Statistical Abstract of 
 the United States, 1896, shows the amount of gold 
 and silver produced in the world from 185 1 to 1896 
 inclusive. By this it will be seen that during that 
 time the production of gold exceeded that of silver 
 by ^1,484,872,600.
 
 DEMONETIZATION OK SILVER 
 
 39 
 
 Productiou of Gold and Silver in the World from 1851 to 1896 
 
 Inclusive. 
 
 Calendar Years. Gold. Silver. 
 
 185I-1855 $662,566,000 $184,169,000 
 
 1856-I860 670,415,000 188,092,000 
 
 1861-1865 614,944,000 228,861,000 
 
 1866-1870 648,071,000 278,313,000 
 
 187I-1S75 577,883,000 ^ 409,322,000 
 
 1876-18S0 572,931,000 509,256,000 
 
 188I-1S85 495,582,000 594-773.000 
 
 1886 106,163,900 120,626,800 
 
 1887 105.774,900 124,281,000 
 
 1888 110,196,900 140,706,400 
 
 1889 123,489,200 155,427,700 
 
 1890 118,848,700 163,032,000 
 
 189I 130,650,000 177,352,300 
 
 1892 146,815,100 198,014,400 
 
 1893 157,287,600 214,745,300 
 
 1894 180,626,100 216,892,200 
 
 1895 203,000,000 226,000,000 
 
 1896* 202,956,000 213,463,700 
 
 Total $5,828,200,400 $4,343,327,800 
 
 * From the United States Mint Report for 1S97.
 
 40 MONEY AND PROSPERITY 
 
 When, in 1873, the United States closed the mints 
 to the free and unlimited coinage of silver, the value 
 of gold and silver had, for more than one hundred 
 years, never varied more than three cents. At the 
 time of this demonetization the value of silver bullion, 
 as measured in gold at the ratio of sixteen to one, was 
 actually about three per cent, higher than gold. The 
 demonetization act was engineered slyly through Con- 
 gress under the title, " An Act revising and amending 
 the Laws Relative to Mints, Assay Offices, and Coinage 
 of the United States." As neither gold nor silver was 
 in circulation as currency at that time, it was compara- 
 tively easy for a few representatives of the money- 
 changers to adroitly incorporate in the act a clause 
 which cut off one-half of our money supply. This 
 reads as follows : " The gold coins of the United States 
 shall be a o)ic dollar piece, which, at the standard 
 weight of twenty-five and eight-tenths grains, shall be 
 the unit of value." This is the act that demonetized 
 silver. 
 
 Prior to this demonetization act, silver was ad- 
 mitted to the mints as freely as gold ; but since gold 
 became the itnit of value, silver has been denied free 
 coinage. 
 
 When the people learned that silver had been de- 
 monetized, and that when specie payments should be
 
 DEMONETIZATION OF SILVER 41 
 
 resumed they would be practically on the single gold 
 standard basis, they perceived that by unfair means 
 they had been victimized by the creditor class, and 
 resolved that silver should and must be restored to its 
 proper place as currency. For twenty years bimetal- 
 lists have shown how the producing and business 
 classes have suffered and been defrauded by the 
 demonetization of silver. 
 
 Mr. John G. Carlisle, of Kentucky, though now a 
 gold standard advocate, in speaking of what is called 
 "The crime of 1873," said, " According to my view of 
 the subject, the conspiracy which seems to have been 
 formed here and in Europe to destroy, by legislation 
 and otherwise, from three-sevenths to one-half the 
 metallic money in the world, is the most gigantic 
 crime of this or any other age." 
 
 There is no doubt but that silver was surreptitiously 
 demonetized by a few wily politicians who successfully 
 deceived their colleagues in Congress, for most of the 
 leading men in both the Senate and the House did not 
 know that the bill would stop the free and unlimited 
 coinage of the metal. 
 
 In January, 1868, Senator John Sherman, of Ohio, 
 introduced in the Senate of the United States a bill 
 which had for its object the demonetization of silver. 
 This bill was never called up for action. Again, in
 
 42 MONEY AND PROSPERITY 
 
 April, 1870, Senator Sherman introduced another bill 
 which provided for the demonetization of silver. This 
 passed the Senate, but when it reached the lower house 
 it was killed by an amendment in the nature of a sub- 
 stitute. 
 
 Mr. Sherman, and a few others, undoubtedly knew 
 the nature of the bill which demonetized silver in 1873. 
 They engineered it so skilfully through Congress, 
 however, that General Grant, who was then President, 
 said afterwards that he did not realize until it was too 
 late that silver was being demonetized by the act, and 
 that if he had, he would not have signed the bill. 
 
 In a speech delivered in the Senate, January 10, 
 1878, Senator Beck said, "It — the bill demonetizing 
 silver — never was understood by either House of Con- 
 gress. I say that with full knowledge of the facts. 
 No newspaper reporter — and they are the most vigi- 
 lant men I ever saw in obtaining information — dis- 
 covered that it had been done." 
 
 Senator Thurman, referring to the passage of this 
 bill, said, " I cannot say what took place in the House, 
 but know when the bill was pending in the Senate we 
 thought it was simply a bill to reform the mint, 
 regulate coinage, and fix up one thing and another, 
 and there is not a single man in the Senate, I think, 
 unless a member of the committee from which the
 
 DEMONETIZATION OF SILVER 43 
 
 bill came, who had the slightest idea that it was 
 even a squint towards demonetization." — Congressional 
 Record, February 15, 1878. 
 
 The same day, February 15, 1S78, the following 
 discussion took place between Senators Voorhees and 
 Blaine : 
 
 Mr. Voorhees : " I want to ask my friend from 
 Maine, whom I am glad to designate in that way, 
 whether I may call him as one more witness to the 
 fact that it was not generally known whether silver 
 was demonetized ? Did he know, as Speaker of the 
 House presiding at that time, that the silver dollar 
 was demonetized in the bill to which he alludes ?" 
 
 Mr. Blaine : " I did not know anything that was in 
 the bill at all. As I have before said, little was known 
 or cared on the subject. And now I should like to ex- 
 change questions with the Senator from Indiana, who 
 was then on the floor, and whose business it was, far 
 more than mine, to know, because by the designation 
 of the House I was to put questions ; the Senator 
 from Indiana, then on the floor of the House, with his 
 power as a debater, was to unfold them to the House. 
 Did he know ?" 
 
 Mr. Voorhees : " I very frankly say that I did not." 
 
 Mr. W. D. Kelley, of Pennsylvania, on March 9, 
 1878, in a speech made in the House of Representa-
 
 44 MONEY AND PROSPERITY 
 
 tives, said, " In connection with the charge that I 
 advocated the bill which demonetized the standard 
 silver dollar, I say that, though the chairman of the 
 Committee on Coinage, I was ignorant of the fact that 
 it would demonetize the silver dollar or of its dropping 
 the silver dollar from our system of coins, as were 
 those distinguished Senators, Messrs. Blaine and 
 Voorhees, who were then members of the House, and 
 each of whom a few days since interrogated the other, 
 ' Did you know it was dropped when the bill passed ?' 
 ' No,' said Mr. Blaine ; ' did you ?' ' No,' said Mr. 
 Voorhees. * I do not think that there were three 
 members in the House that knew it. I doubt whether 
 Mr. Hooper, who in my absence from the Committee 
 on Coinage and attendance on the Committee on Ways 
 and Means managed the bill, knew it. I say this in 
 justice to him.' " — Congressional Record, Forty-fifth 
 Congress, second session, page 1605. 
 
 Again, on May 10, 1879, Mr. Kelley said, "All 
 I can say is that the Committee on Coinage, Weights, 
 and Measures, who reported the original bill, were 
 faithful and able and scanned its provisions closely ; 
 that as their organ I reported it ; that it contained 
 provision for both the standard silver dollar and the 
 trade dollar. Never having heard until a long time 
 after its enactment into law of the substitution in the
 
 DEMONETIZATION OF SILVER 45 
 
 Senate of the section which ch-opped the standard 
 dollar, I profess to know nothing of its history ; but I 
 am prepared to say that /;/ all tJic legislation of this 
 country there is no mystery equal to the demonetization 
 of the standard silver dollar of the United States. I 
 have never found a man who could tell just how it 
 came about or why." — Cojigressional Record, Forty- 
 sixth Congress, first session, page 1231, 
 
 In a speech made at Springfield, Ohio, in the autumn 
 of 1877, General Garfield said, "Perhaps I ought to 
 be ashamed to say so, but it is the truth to say that, 
 at that time being chairman of the Committee on Ap- 
 propriations and having my hands overfull during all 
 that time with work, I never read the bill. I took it 
 upon the faith of a prominent Democrat and a promi- 
 nent Republican, and I do not know that I voted at all. 
 There was no call of the yeas and nays, and nobody 
 opposed that bill that I know of It was put through, 
 as dozens of bills are, as my friend and I know, in 
 Congress, on the faith of the report of the chairman 
 of the committee ; therefore, I tell you, because it is 
 the truth, that I have no knowledge about it." 
 
 The cutting off by illegal legislation of practically 
 one-half the money supply has caused more idleness, 
 more suffering, more almshouses, and greater loss to 
 the people of this nation than our Civil War.
 
 46 MONEY AND PROSPERITY 
 
 The student of political economy has only to turn 
 back the pages of history to the decadence of the 
 Roman empire in order to find that one of the pri- 
 mary causes of the fall of Rome, and the subsequent 
 waning of civilization during the Dark Ages, was a 
 shrinkage in the volume of money. During the early 
 years of the Christian era the metallic money of the 
 Roman empire amounted to no less than one billion 
 eight hundred million dollars ; but by the end of the 
 fifteenth century there was only a comparatively small 
 amount of metaUic money in Europe, and most of this 
 was hoarded in the caskets of princes and bankers, there 
 being but little actual money in circulation. In view 
 of this fact, the contention of some historians that the 
 fall of the Roman empire was due to moral depravity 
 and slavery appears to be not entirely correct. It 
 cannot be maintained that the rapid disappearance of 
 the money supply was not without a serious effect 
 upon the civil and military resources of the empire. 
 
 Creditors, money-owners, and holders of fixed in- 
 vestments are, for a time, immensely benefited by the 
 gold standard, which increases the purchasing power 
 of a dollar, while the debtors and wealth-producing 
 classes are injured. If the gold standard is main- 
 tained, there will come a time, however, when the 
 creditor class must suffer, as a final effect of falling
 
 DEMONETIZATION OF SILVER 47 
 
 prices. When business depression is carried beyond 
 a certain point general dissolution sets in, as it did 
 during the Dark Ages. 
 
 In a speech delivered in 1839, Abraham Lincoln 
 said, "When one hundred millions, or more, of the 
 circulation we now have shall be withdrawn, who can 
 contemplate without terror the distress, ruin, bank- 
 ruptcy, and beggary that must follow. The man who 
 has purchased an article — say a horse — on credit, at 
 one hundred dollars, when there are two hundred 
 millions circulating in the country, if the quantity be 
 reduced to one hundred millions by the arrival of pay 
 day, will, other conditions remaining the same, find 
 the horse but sufficient to pay half the debt ; and the 
 other half must either be paid out of his other means, 
 and thereby become a clear loss to him, or go un- 
 paid, and thereby become a clear loss to his creditor. 
 What I have here said of a single case of the purchase 
 of a horse will hold good in every case of debt existing 
 at the time a reduction in the quantity of money occurs, 
 by whomsoever and for whatsoever it may have been 
 contracted. It may be said that what the debtor loses 
 the creditor gains by this operation ; but on exami- 
 nation this will be found true only to a very limited 
 extent. It is more generally true that all lose by it, — 
 the creditor by losing more of his debts than he gains
 
 48 MONEY AND PROSPERITY 
 
 by the increased value of those he collects; the debtor 
 by either parting with more of his property to pay his 
 debts than he received in contracting them, or by 
 entirely breaking up his business, and thereby being 
 thrown upon the world in idleness." 
 
 It is not to be denied that since the demonetization 
 of silver the American people have enjoyed at inter- 
 vals a certain amount of prosperity. This fact, how- 
 ever, cannot be said to constitute a sound argument 
 in favor of the single gold standard, for the reason 
 that we find in the history of almost every monetary 
 system which has been tested in modern times that 
 short-lived periods of apparent prosperity oftentimes 
 succeed corresponding periods of depression. At no 
 time do we find in the history of the United States 
 a period of prosperity so long and so unmistakable as 
 that which extended from 1850 to the demonetization 
 of silver in 1873. Since this demonetization many 
 men have become millionaires, and a few have ac- 
 quired considerable wealth in the ordinary industries 
 of trade ; but we cannot be considered wealthy as 
 a nation when nearly all the wealth is concentrated in 
 the hands of a few. More than half the wealth of the 
 United States is owned by fewer than three per cent, 
 of the people of this country. This centralization of 
 enormous amounts of wealth under the control of the
 
 DEMONETIZATION OF SILVER 49 
 
 few has been made possible largely by the demonetiza- 
 tion of silver, which has enabled the creditor class to 
 legally confiscate the property of the debtor. 
 
 If this country had enjoyed the free coinage of 
 both gold and silver, we would not have had the 
 panics of 1884 and 1893, and all our people would 
 have been constantly employed in the production of 
 wealth. We would probably have been almost, if not 
 quite, twice as wealthy as a nation, and all our private 
 holdings would have been immensely increased. Our 
 public debt, too, might have been entirely wiped out, 
 much to the chagrin of the money-lending class. 
 
 It is repeatedly said that the large amount of money 
 lying idle in banking institutions, together with the 
 low rate of interest, are evidences that our country's 
 long lost prosperity is being restored. Many honest- 
 meaning people accept these statements as tending to 
 show that labor is again fully employed, and that 
 industries in general are in full working order; but 
 these fallacious arguments are disproved by the fact 
 that millions of men are out of employment to-day. 
 These idle men, if employed, would engage all the 
 surplus money and many hundred millions more at 
 a higher rate of interest than money now com- 
 mands. 
 
 When prices are falling, manufacturers cannot bor- 
 
 4
 
 50 MONEY AND PROSPERITY 
 
 row money at any rate of interest and make it profit- 
 able ; neither can the holder of the idle capital afford 
 to lend it at such times, for he fears the inability of 
 the borrower to pay back even the principal, to say 
 nothing of interest at any rate. But these " idle 
 holders of idle capital" will not suffer so long as 
 prices continue falling, for their money will com- 
 mand more each year. 
 
 General prices have fallen in the last five years 
 twenty per cent. ; this means an unearned increment 
 of money at the rate of five per cent, per annum, and 
 all holders of money or securities payable in money 
 are benefited to this extent at the expense of the 
 producing and industrial classes. So long as labor 
 in many branches of trade remains employed on half 
 time at cut-rate wages, and so long as the unemployed 
 can be counted by the millions, business will remain 
 stagnant. 
 
 By the demonetization act one-half of the full legal 
 tender money supply of the country was stopped. 
 The result has been financial disaster to our people, 
 Remonetize silver and new life-blood will be infused 
 into every form of human industry. This country is 
 capable of supporting many hundred times its present 
 population, and, if given a fair opportunity, it is and 
 will continue to be the greatest nation on earth. An
 
 DEMONETIZATION OF SILVER 51 
 
 insufficient amount of money retards progress, while 
 a more adequate supply pushes it forward by leaps 
 and bounds. We have had almost continuous falling 
 prices since silver was demonetized. Rising or stable 
 prices zvilL not be restored until more fnll legal tender 
 money is pjit into circidation. 
 
 The breach between gold and silver was not the 
 result of a change in the cost of production or the 
 over-supply of either metal, and, as there is not nearly 
 enough gold mined to meet the demand for metallic 
 money, both gold and silver, at a fixed ratio, should 
 be received at our mints, without discrimination as to 
 either metal, and coined into money. 
 
 Those who oppose the remonetization of silver 
 must be content with the gold range of prices. If 
 the producing and business classes are reduced to 
 the condition of tlie people during the Dark Ages, 
 or even to the level of the working-classes of Great 
 Britain of to-day, the gold standard will most likely 
 be the cause. 
 
 Silver was denied free and unlimited coinage because 
 the bondholders, owners of money, and others with 
 fixed incomes wanted to increase the value of money 
 by driving down the prices of all kinds of property 
 and goods. They knew that by cutting off the annual 
 money supply all their holdings of money and money
 
 52 MONEY AND PROSPERITY 
 
 securities would each year command more of the 
 products of labor. 
 
 Prices have been unjustly forced down fifty per cent., 
 which means an increase of fifty per cent, in the value 
 of money, and when the people demand simply that 
 which was given to them by our Constitution, — viz., 
 the right to keep our mints open to the free and 
 unlimited coinage of silver, as well as of gold, at the 
 legal ratio of sixteen to one, without asking per- 
 mission of European countries, — these money manip- 
 ulators cry fraud and repudiation. 
 
 The total debts of the world, both public and pri- 
 vate, are estimated to be about one hundred and fifty 
 billion dollars. Think of the tremendous loss to the 
 debtor and gain to the creditor when several of the 
 leading nations, in 1873-74, cut off the annual money 
 supply of their people by the demonetization of silver ! 
 It is said that many of the debts owing at that time 
 have been paid off, and that the creditor of to-day 
 should not be obliged to suffer loss by materially 
 increasing the annual supply of money. It is true 
 that some of the debts have been paid since silver was 
 demonetized, but others have been increased and new 
 ones made in order to retain possession of goods and 
 property which are constantly falling in price. If the 
 people had any assurance that prices would remain
 
 DEMONETIZATION OF SILVER 53 
 
 stable, even at the present low level, their ardent de- 
 sire for the remonetization of silver might, to some 
 extent, be checked. 
 
 Owing to the scarcity of gold and the impossibility 
 of producing it in sufficient quantities to meet the 
 increasing demand for full redemption money, bi- 
 metallists know that still further falls of prices in the 
 future are inevitable if our present monetary system 
 is maintained. Have all the capitalists suddenly 
 ceased to grasp for money, or to plan to increase their 
 own fortunes ? Have all the bankers and creditors of 
 the country concluded to devote their spare time to 
 the perfection of a monetary system wholly in the 
 interest of the producing and business classes ? If 
 we are to believe their statements, they object to the 
 remonetization of silver, not for the reason that it 
 would injure them, but because it would be injurious 
 to the working and business classes. Those who 
 favor the double standard say they want the free and 
 unlimited coinage of silver because it will not only 
 benefit them, but others as well. 
 
 The motive of those who were instrumental in 
 demonetizing silver, and of those who now so stren- 
 uously object to the United States government re- 
 opening the mints to the free coinage of the metal 
 was, and is, a selfish one.
 
 CHAPTER VI 
 
 THE GOLD STANDARD 
 
 The issue between those who favor bimetallism and 
 the advocates of the gold standard is, that since the 
 demonetization of silver in 1873 the annual supply of 
 gold, including the standard silver dollars coined since 
 that time, has not been sufficient to prevent general 
 prices from falling, and that there is not now enough 
 gold mined, or will be in the future, to prevent a still 
 further fall of prices. 
 
 The total value of all the property in the world is 
 estimated to be about three hundred and fifty billion 
 dollars. The total debts of the world, both public and 
 private, are estimated to be about one hundred and 
 fifty billion dollars. This estimate does not include 
 the enormous indebtedness arising from modern com- 
 mercial transactions. Seventy-five per cent, of the 
 world's business is based on some sort of credit or 
 deferred payment. The value of all property, as 
 measured in money, has been shrinking, while the 
 debts have been increasing. According to the report 
 of the United States Mint, the amount of gold coin in 
 54
 
 THE GOLD STANDARD 55 
 
 the world is about four billion dollars ; and there is 
 about the same amount of silver coin. Estimates have 
 been made by Mr. W. H. Harvey, showing that all 
 the gold in the world could be put into a space equal 
 to a cube of twenty-two feet. 
 
 The population of the world in 1890 was estimated 
 to be about one billion four hundred million. This 
 estimate shows a per capita of less than three dollars 
 in gold. Nearly all the gold coin in the world is with- 
 drawn from circulation either for state hoards, bank 
 reserves, or for private hoarding. In 1893-94 it is 
 estimated that more than three hundred million dollars 
 was withdrawn for state hoards. When we consider 
 the large amount of gold held by the Banks of Eng- 
 land, France, Germany, Austria, and Italy, the large 
 sums Russia has locked up for war purposes, the 
 amount held in reserve in the United States Treasury, 
 the gold coin in the vaults of banking institutions, and 
 what is hoarded by private individuals, it will be seen 
 that but little gold is in circulation. 
 
 With the increase of population and of production 
 in these countries comes an increased demand for 
 gold. Now that Japan, Spain, Greece, Portugal, Rou- 
 mania, Brazil, Argentina, Chili, and other countries are 
 all scrambling for this metal, what little there is in 
 circulation will soon be entirely withdrawn.
 
 56 MONEY AND PROSPERITY 
 
 It is claimed that two hundred milHon dollars' worth 
 of new gold is produced annually, and that the money 
 supply will be enlarged by the coinage of this new gold. 
 There is not more than one hundred and fifty million 
 dollars' worth of new gold produced each year in the 
 entire world, and the mint reports show only a slight 
 annual increase in the gold coin of the world, most 
 of the new gold being used in the arts. 
 
 The advocates of the gold standard insist that as 
 most of the business of the country is transacted with 
 bank credits, checks, bills of exchange, and drafts, 
 when " confidence is restored" no material increase in 
 our money supply will be necessary. Checks, drafts, 
 and bills of exchange could not exist without money; 
 they call for a specific sum in money, and a certain 
 amount of full legal tender is indispensable as a basis 
 of credit. Therefore, if this amount of full money is 
 increased, credit can be increased and more business 
 transacted. Credit is usually extended to its utmost 
 limit. In any country, clearing houses and instru- 
 ments of credit, instead of being independent of 
 money, are limited in their use to the amount of 
 money in circulation in that country, and can only be 
 increased as the volume of money increases. Since 
 silver was demonetized in 1873 the commercial value 
 of gold has doubled, — that is to say, general prices
 
 THE GOLD STANDARD 57 
 
 have fallen fifty per cent,, which indicates that the 
 value of gold has risen fifty per cent. If the gold 
 standard is permanently established in the United 
 States no legislation or power on earth can prevent 
 the continuation of falling prices. 
 
 According to the monthly statements of the Treas- 
 ury Department at Washington, there is about seven 
 hundred million dollars of gold coin in the United 
 States, Other authorities who are not interested in 
 making the amount appear as large as possible, place 
 the total at five hundred million or six hundred million 
 dollars. 
 
 If, according to the rulings and opinions of some of 
 our recent Secretaries of the Treasury, most of our 
 paper money, and even the standard silver dollars, are 
 redeemable in gold, and if we have but five or six 
 hundred millions of full redemption money, — that is 
 to say, gold money, — or seven hundred millions, if 
 the Treasurer's report be accepted, the gold standard 
 advocates should instruct their subservient newspapers 
 not to publish the amount of gold held in the United 
 States Treasury, nor the amount hoarded by the bank- 
 ing institutions of the country. 
 
 On April 5, 1898, the New York Herald, in an 
 article " How Sinews of War would be obtained," said, 
 " The Treasury has an available cash balance of two
 
 58 MONEY AND PROSPERITY 
 
 hundred and twenty-six million dollars, of which one 
 hundred and seventy-four million dollars is gold. . . . 
 Last Saturday's Clearing House statement showed that 
 the banks of this city hold about one hundred and 
 forty-one millions specie, presumably nearly all gold." 
 With three hundred and fifteen million dollars of this 
 full and only redemption money located in the United 
 States Treasury, and in one city, if the amount in 
 hoarding in the banking institutions of other cities, 
 and in private hands, could be ascertained, there would 
 be found'to be practically none in circulation. 
 
 Alexander Hamilton in his report in 1791, on the 
 establishment of a mint, declared that to "annul the 
 use of either gold or silver as money is to abridge the 
 quantity of circulating medium, and is liable to all the 
 objections which arise from a comparison of the bene- 
 fits of a full circulation — rising and stable prices — 
 with the evils of a scanty circulation — falling prices." 
 
 The Republican party, in the platform adopted at 
 St. Louis in 1896, declared that the gold standard 
 should be maintained until international bimetallism 
 could be established, but knowing this to be impos- 
 sible to accomplish, it was a virtual declaration in 
 favor of continuing the single gold standard. Senator 
 Teller, an ardent Republican, in a speech delivered at 
 this convention, said, " I believe that the adoption of
 
 THE GOLD STANDARD 59 
 
 the gold resolution will produce hardships ; it will in- 
 crease the distress, and that no legislation touching 
 the tariff can remove the difficulties that now all ad- 
 mit prevail in this land. I believe that the whole 
 welfare of my race is dependent upon a rightful so- 
 lution of this question ; that the morality, the civiliza- 
 tion, nay, the very religion of my country is at stake 
 in this contest. . . . 
 
 " I say to you now that, with the solemn conviction 
 upon me that this gold plank means ultimate disaster 
 and distress to my followers, I cannot subscribe to it, 
 and, if adopted, I must, as an honest man, sever my 
 connection with the political organization which makes 
 this one of the main articles of its principles. . . . I 
 cannot, before my country and viy God, agree to that 
 provision that shall put upon this country a gold 
 standard, and I will not.'' 
 
 The Republican party is committed to the gold 
 standard, which the majority of the members of that 
 party condemned in 1896 in the St. Louis Convention, 
 by declaring their intention to abandon it for inter- 
 national bimetallism as soon as the consent of other 
 nations could be obtained. Nine-tenths of the people 
 of the United States favor the double standard, and 
 would welcome international agreement, but believe 
 it impossible of attainment, and, as a consequence, the
 
 6o MONEY AND PROSPERITY 
 
 majority favor the re-opening of our mints to the free 
 and unhmited coinage of silver, without waiting for 
 the co-operation of other nations. There are, how- 
 ever, prominent pohticians who prefer the single gold 
 standard. 
 
 After the St. Louis Convention, Senator Lodge, of 
 Massachusetts, said, " The victory won by the Eastern 
 States in forcing the word gold in the platform, is one 
 that every business man and financier in the United 
 States will appreciate fully." * 
 
 Senator Tom Piatt, of New York, said, " Our 
 friends are satisfied with the results of their efforts 
 in compelling the adoption of a gold standard plat- 
 form." t The present administration has formulated 
 and sent to Congress a bill the purpose of which is, 
 the Secretary says, " to commit the country more 
 thoroughly to the gold standard." 
 
 At a banquet of the Merchants' and Manufacturers' 
 Association in Baltimore, February 3, 1898, Mr. Gage, 
 in responding to the toast, " The Relation of Business 
 to Government Finances," said, " I desire to point out 
 the fact that our own legal tender notes, dear as they 
 are to the patriotic heart, serviceable as they are in a 
 
 * St. Louis Post-Dispatch, June i8, 1896. 
 f Chicago Record, June 19, 1896.
 
 THE GOLD STANDARD 6i 
 
 great crisis, are yet out of accord with the true eco- 
 nomic laws. The value for which they were origi- 
 nally issued was immediately consumed or destroyed. 
 As now reissued they are evidences of a value already 
 consumed by the issuer or of service already past. 
 These notes operating in the commercial field, thus 
 differentiated from the time credit instruments which 
 commerce can create, must somewhere work injury, 
 even if we cannot distinctly point it out." 
 
 It is a great pity, sir, that " our own legal tender 
 notes" have, in such an obscure way, worked so much 
 injury to our people, and that the eminent financier 
 of the Treasury is unable to point it out. The rise 
 and fall of the value of money, the rise and fall of 
 prices, is so manifest that any one with only a super- 
 ficial knowledge of finances could, if these notes had 
 worked any injury, "point it out." The truth is, 
 Mr, Gage knows that if these notes could be " de- 
 stroyed" the creditor class would be benefited by an 
 appreciation of the value of the remaining amount of 
 currency in the country. The amount being reduced, 
 general prices would fall to meet the increased demand 
 for money. Moreover, Mr. Gage and other bankers of 
 the country would like to destroy as much of our paper 
 currency as possible, and thus clear the way for the gold 
 standard and for issues of paper money by the banks.
 
 62 MONEY AND PROSPERITY 
 
 Compare the above with what James G. Blaine 
 said : " I beHeve the struggle now going on in this 
 country and in other countries for a single gold 
 standard would, if successful, produce disaster in and 
 throughout the commercial world. The destruction 
 of silver as money and the establishment of gold as 
 the sole unit of value must have a ruinous effect on 
 all forms of property except those investments which 
 yield a fixed return in money. These would be enor- 
 mously enhanced in value, and would gain a dispro- 
 portionate, and therefore unfair, advantage over every 
 other species of property. If, as the most reliable 
 statistics affirm, there are nearly seven thousand 
 million of coin or bullion in the world not very 
 unequally divided betweeen gold and silver, it is 
 impossible to strike silver out of existence as money 
 without results which will prove distressing to mil- 
 lions and utterly disastrous to tens of thousands." 
 
 Between 1850 and 1857, owing to the great increase 
 in the output from the mines, gold fell in value to 
 such an extent that Chevalier, the French economist, 
 in his work " On the Probable Fall in the Value of 
 Gold," said, " Those two countries — California and 
 Australia — must have yet a long series of years to 
 produce gold in such quantities and on such condi- 
 tions as to render a marked decline in its 7ialne inevi-
 
 THE GOLD STANDARD 63 
 
 tabic. . . . We must regard the fall in the value of 
 gold as an event for which we should prepare without 
 loss of time." 
 
 Chevalier and other writers on the subject of money 
 about that time advocated the demonetization of gold. 
 The moneyed class actually induced Germany to 
 demonetize gold. The moneyed interests and their 
 representatives who expected to be benefited by the 
 demonetization of one of the metals said, " As gov- 
 erments control the weight and standard of money, 
 they ought, so far as possible, to assure its value." 
 They, therefore, insisted that gold should be demon- 
 etized because the output of new gold was being so 
 largely increased each year.* 
 
 The annual output of gold for the year 1856 was 
 one hundred and forty-seven million six hundred thou- 
 sand dollars ; in 1869 it had decreased to one hundred 
 and six million two hundred and twenty-five thousand 
 dollars. The attempts towards the demonetization of 
 gold ceased, and the moneyed interests turned their 
 attention towards the demonetization of silver, which 
 was accomplished in 1873. If gold had been demon- 
 etized instead of silver, we would not now have any 
 advocates of the gold standard, for these same men 
 
 * Arguments presented to the French Monetary Commission of 1869.
 
 64 MONEY AND PROSPERITY 
 
 would favor a single silver standard, and we would 
 hear much about a cheap gold dollar, — a fifty-cent 
 gold dollar. 
 
 Those who now favor the double standard are 
 called anarchists. If they are, many of the leading 
 gold standard men at present were, until very re- 
 cently, also anarchists. When the Sherman law was 
 being discussed in Congress, in 1890, as a substitute 
 for the Bland-AUison Act,* Major McKinley, speaking 
 in support of the bill, said, " I will not vote against 
 this bill, and thus deprive the people of my country 
 and the laborers and the producers and the industries 
 of my country of thirty million dollars annually of 
 additional circulating medium." 
 
 Mr. McKinley wanted the double standard at that 
 time, for he said, " I am for the largest use of silver in 
 the currency of the country. I would not dishonor it. 
 / tvould give it equal credit with gold. I would make 
 no discrimination. I would utilize both metals as money 
 and discredit neither. I zvant the double standard." 
 
 He wanted the double standard in 1890. In 1896 
 no eeneral change in the laws of finance had taken 
 
 * The Bland-Allison Act put into circulation each year silver to the 
 amount of twenty-four million dollars, and the Sherman law increased 
 that amount to fifty-four million dollars.
 
 THE GOLD STANDARD 65 
 
 place, yet Mr. McKinley was induced to support the 
 gold plank of the St. Louis platform. He wanted to 
 be President, and could receive the support and en- 
 dorsement of the moneyed interests only by pledging 
 himself to maintain the gold standard. 
 
 Mr. Bynum, a prominent member of the Indian- 
 apolis Monetary Commission, in a speech on silver, 
 delivered in Congress in 1886, said, " Again the ad- 
 vocates of gold approach us with open hands and 
 smiling countenances, but I fear with a dagger con- 
 cealed beneath their cloaks." In the same speech in 
 opposing the gold standard Mr. Bynum quoted from 
 Senator Ingalls as follows : " No enduring fabric of 
 national prosperity can be builded on gold. Gold is 
 the money of monarchs ; kings covet it, the exchanges 
 are affected by it; its tendency is to accumulate in 
 vast masses in the commercial centres, and to move 
 from kingdom to kingdom in such volumes as to 
 unsettle values and disturb the finances of the world ; 
 it is the instrument of gamblers and speculators, and 
 the idol of the miser and thief; being the object of so 
 much adoration, it becomes haughty and sensitive, 
 and shrinks at the approach of danger ; and whenever 
 it is most needed, it always disappears ; at the slightest 
 alarm it begins to look for refuge; it flies from the 
 nation at war to the nation at peace ; war makes it a 
 
 5
 
 66 MONEY AND PROSPERITY 
 
 fugitive ; no people in a great emergency ever found 
 a faithful ally in gold ; it is the most cowardly and 
 treacherous of all metals ; it makes no treaty that it 
 does not break, it has no friend whom it does not 
 sooner or later betray. Armies and navies are not 
 maintained by gold ; in times of panic and calamity, 
 shipwreck and disaster, it becomes the chief agent 
 and minister of ruin ; no nation ever fought a great 
 war by the aid of gold ; on the contrary, in the crises 
 of greatest peril it becomes an enemy more potent 
 than the foe in the field ; but when the battle is won 
 and peace has been secured, gold reappears and claims 
 the fruits of victory." 
 
 The moneyed interests, by controlling the money 
 supply, reap where they have not sown. The estab- 
 lishment of the gold standard has increased, and if 
 maintained will continue to increase, the value of each 
 dollar. This increase in the value of gold will be 
 shown by the decrease in the price of all property 
 and commodities, business depression, inability to pay 
 debts, and an increased number of idle laborers and 
 men in all branches of business. 
 
 People generally in gold standard countries, who 
 have given but little thought to the money question, 
 while speaking of silver as declining in value, never 
 seem to think that gold has risen in value.
 
 THE GOLD STANDARD 67 
 
 In silver-using countries like Mexico, silver instead 
 of gold is the. measure of value, and the people, 
 realizing that silver has remained practically stable, 
 know that gold has risen in value. The Mexican 
 silver dollar will buy as much in Mexico to-day as it 
 would twenty or more years ago. We know that 
 the value of silver bullion as measured in gold is less 
 than half what it was in 1873. To ascertain which of 
 the metals has changed in value, we must compare 
 the value of each metal with a list of general prices 
 of commodities in 1873 and of to-day. It will be 
 found that silver has practically as much purchasing 
 power now as it had then, and gold twice as much. 
 Of course there must necessarily be a few temporary 
 exceptions. If, for instance, a commodity like wheat 
 becomes scarce, the demand will force up the price 
 temporarily. When the supply is increased the price 
 will fall. If an article is produced in quantities which 
 exceed the demand, the price must fall, and such fall 
 will retard production until the demand is increased, 
 when the price will rise. The rise and the fall in the 
 value of gold and silver cannot be determined by 
 comparing them with each other, or by the rise and 
 the fall in price of a few commodities. If we take the 
 average price in 1873 of, say, one hundred commod- 
 ities, and find that the bullion value of silver to-day
 
 68 MONEY AND PROSPERITY 
 
 will purchase as much of those commodities as in 
 1873, and that the bullion value of gold to-day will 
 purchase twice as much as it would at that time, it is 
 conclusive evidence that gold has risen in value, while 
 the value of silver has remained practically stable. 
 
 Since the commencement of the great political con- 
 test of 1896, the publishers of most of the large daily 
 newspapers in the East, as well as many in the West 
 and South, finding themselves unable to produce argu- 
 ments based on facts in support of the single gold 
 standard, have filled their papers with abuse of the 
 advocates of bimetallism. No imputation has been 
 too unjust and no language too violent to use against 
 those who favor the restoration of silver by admitting 
 it to the mints in free and unlimited quantities the 
 same as gold. The policies and business management 
 of these great modern journals are dictated either by 
 members of big syndicates or by wealthy proprietors, 
 who in some instances live and spend their money in 
 Europe. As a rule, the able men engaged on a 
 newspaper have little to do in determining its policy. 
 The proprietors of the great city dailies necessarily 
 being rich men, naturally run their papers in the 
 interest of the moneyed class. Thousands of well- 
 educated men in this country, because of business 
 pressure and lack of time to study the money ques-
 
 THE GOLD STANDARD 69 
 
 tion, have but little knowledge of the subject, except 
 what they have learned by reading the newpapers. 
 They are naturally led to suppose that journalists, 
 being in constant touch with exchanges and great 
 banking institutions, whose transactions they publish 
 from day to day, must be correctly informed on the 
 money question, and should, therefore, be reliable. 
 These misinformed people should seek to ascertain 
 whether or not the monetary laws that benefit the 
 rich proprietor of their favorite daily are also good 
 for them. The great body of the press, however, of 
 this country, with the exception of these gold standard 
 journals, is coming over to the support of the people 
 in their battle for bimetallism. 
 
 The moneyed interests of Europe and this country 
 are organized for the maintenance of the single gold 
 standard in the United States, and ever since the de- 
 monetization of silver in 1873, they have been lavish 
 in the use of their money and influence in controlling 
 primaries and conventions, and dictating political plat- 
 forms. Universities are endowed for the purpose of 
 controlling economic teachings. Statesmen, so called, 
 have been induced or coerced into upholding the gold 
 standard, either by direct bribes or promises of polit- 
 ical preferment. Aspirants for the presidency of the 
 United States have been compelled to submit to their
 
 70 MONEY AND PROSPERITY 
 
 will and allow them to dictate and promulgate all 
 financial legislation. 
 
 Well may the members of this organization of the 
 moneyed interests be called " Napoleons of finance," 
 for they boldly entered their enemy's bimetallic camp, 
 and finding an ambitious " major" on the fence, carried 
 him off on a golden litter. They set up before the 
 captive a presidential throne, all glittering with gold, 
 and induced him to repudiate his previous declarations 
 in support of the double standard, and to abandon the 
 cause of the producing and industrial classes.
 
 CHAPTER VII 
 
 HONEST MONEY 
 
 The only honest money is that which maintains 
 stabihty of prices. All who defend the interests of an 
 oppressed people, by advocating the remonetization of 
 silver, arc constantly called cranks, repudiators, and 
 anarchists. Those who make these assertions and 
 who have so often been accused of the crime of 1873 
 and of dishonest acts in manipulating legislation 
 favorable to money contraction, have now turned 
 about, and the robbers accuse the robbed, calling 
 them all kinds of hard names because they refuse 
 to be further fleeced. 
 
 The money-changers would dry up the arteries 
 of commerce and gain still further control of the 
 products of labor, if permitted, by " more thoroughly 
 committing the country to the gold standard." Was 
 it honest in 1873, when the business classes were 
 depending upon the free coinage of both gold and 
 silver to regulate the value of money, to surrep- 
 titiously demonetize one of these metals without the 
 
 71
 
 72 MONEY AND PROSPERITY 
 
 knowledge or consent of the voters of this country ? 
 A matter of enough importance to double the entire 
 debts of a country should have been voted on at the 
 polls. If it were wrong to demonetize silver it should 
 be remonetized, and the wrong, so far as is possible, 
 should be righted. Those who prate so much about 
 injuring credit — meaning creditors — have no sym- 
 pathy for the injured debtor. The gold in the gold 
 dollar, though it has doubled in value since 1873, is 
 still called a dollar, and will be so called as long as it 
 is the unit of value. It might continue to increase in 
 value until it would be worth ten times as much as it 
 is at present, and though it would command ten times 
 as much property it would still be a dollar, — neither 
 more nor less. 
 
 Senator John P. Jones, on October 24, 1893, in 
 addressing the United States Senate, said, " The gold 
 standard men tell us that all they ask for is good 
 money — honest money. If that is so, then there 
 must be some monstrous juggling with words; for 
 the very pith and marrow of our contention in de- 
 manding the restoration of the privilege of full coinage 
 to silver is for good money, honest money, — a money 
 more honest than gold, a money that shall be honest 
 not merely to-day, but in perpetuity. The acute 
 among the gold men very well know that gold
 
 HONEST MONEY 73 
 
 money, under existing conditions, is not an honest 
 money, but an unjust and essentially dishonest money. 
 
 " What, then, is an honest dollar ? Is it not a 
 dollar which demands at all times the same degree of 
 sacrifice to obtain it ? 
 
 " Is a dollar ' honest' only when it is increasing in 
 purchasing power, — when it is enlarging its grasp 
 over the products of labor ? Is it an ' honest' dollar 
 only when it is exacting more from the debtor than 
 he contracted to pay, and giving more to the creditor 
 than he agreed to receive ?" 
 
 The " honorable" and " patriotic" gold standard 
 advocates profess to have great fear that if free coin- 
 age of silver is again adopted the laboring men will 
 be paid in depreciated money, — " fifty-cent dollars." 
 In relation to what would silver be depreciated ? It 
 could be only in relation to gold, which is rising in 
 value, for silver when compared with commodities 
 has remained practically stable. It could not be in 
 relation to the products of labor, for an enlarged 
 supply of currency raises general prices, stinmlates 
 production, and gives more and better employment to 
 labor. 
 
 It is asked, how can the free and unlimited coinage 
 of silver put money into the pockets of the laboring 
 man ? When silver is remonetized every branch of
 
 74 MONEY AND PROSPERITY 
 
 business will be benefited by rising prices, until the 
 steady level of the bimetallic standard is reached ; 
 and, as all classes of industry prosper when prices are 
 rising or continue steady, the working-man will not only 
 be immediately benefited, but will continue to pros- 
 per and receive a greater share of the products of his 
 labor. The moneyed interests, however, would have 
 to be content with less. Wages are low because the 
 supply is much greater than the demand. When all 
 the laboring men are at work, the ruinous competition 
 for employment ceases ; they can demand, and their 
 employers can afford to pay, better wages. 
 
 The people were told, in 1893, that all that was 
 necessary to restore prosperity was to repeal the 
 so-called Sherman law ; that prices would be better, 
 and the wheels of progress would again move on. 
 The coinage of fifty-four million dollars of silver, 
 yearly, was discontinued, and prices have fallen since 
 that time twenty per cent. Now this same class of 
 "honorable" and "patriotic" men would destroy all 
 our money except gold, which is too scarce and dear 
 to circulate, and permit the banks to control our cur- 
 rency in their interest to the great detriment of the 
 people. They say " the government should go out of 
 the banking business." Some one has said that " the 
 banks should go out of the governing business."
 
 HONEST MONEY 75 
 
 Debtors suffer loss in proportion to the increase in 
 the value of money. They are obliged to settle their 
 debts in dollars having greater value than at the time 
 the debts were contracted. A rise in general prices — 
 a fall in the value of money — is the loadstone that 
 brings out the hoarded gold and uninvested funds. 
 Money cannot, other things remaining the same, fall 
 in value except by an increase of the amount in cir- 
 culation. When money is falling in value it becomes 
 more profitable for the holders of it to invest in goods 
 and property which are rising in value. When money 
 is falling or stable in value it is not hoarded and does 
 not accumulate in the banks. All want to get rid of 
 it for things that are rising or stable in value. If 
 prices of commodities are rising in value the investor 
 is benefited as well as the producer, for what he buys 
 one month will have more value the next month and 
 the next year. 
 
 We have been hearing much about " maintaining 
 the parity of all our money," an " honest" dollar, 
 " good" money, and " sound" money. Parity with 
 what? Parity with the dollar that is constantly 
 rising in value, — the gold dollar? What the pro- 
 ducing classes want is a dollar that will be at a 
 parity with commodities. When the advocates of 
 the gold standard speak of an " honest" dollar.
 
 76 MONEY AND PROSPERITY 
 
 " good" money, and " sound" money, they have in 
 mind gold money. If our country should become 
 involved in a war of much magnitude all these 
 " honorable" and " patriotic" men would call in 
 what little of this " good" and " sound" money might 
 be in circulation and lock it safely up, and paper 
 money and the plain people would have to fight the 
 battles as in the past. All this talk about " sound" 
 money, " good" money, etc., simply means gold 
 money. Why are not the gold advocates honest 
 enough to speak of it as gold ? They want a financial 
 system based upon gold, and fail to show where the 
 gold is coming from. They tell us confidence must 
 be restored and plenty of " good," " sound" money will 
 be in evidence. Confidence is not a thing to be called 
 into existence simply by the exercise of the will of 
 man. It must be based on something more tangible. 
 It is inconceivable that men with ordinary intelli- 
 gence cannot understand that the gold dollar is valu- 
 able only for what it will obtain in exchange ; that 
 money is the creation of law, and that if the demand 
 for money is greater than the supply, the value of 
 the dollar will rise, — will have greater purchasing 
 power; that if you have more dollars than are ne- 
 cessary to meet the demand for money, they will fall 
 in value, — will possess less purchasing power; that
 
 HONEST MONEY 77 
 
 the producing classes — those engaged in general 
 industries — and the distributors of wealth are bene- 
 fited by an ample supply of full legal tender money, 
 and that it is the aim and in the interest of the 
 creditor class to keep the number of dollars in cir- 
 culation down to the smallest amount possible. 
 
 President Cleveland, his banker friends, and the 
 holders of money and bonds, claimed that the fifty- 
 four millions of standard silver dollars which the 
 government put into circulation by the Sherman 
 law of 1890 produced the panic of 1893, and that 
 if the government would stop the purchase of silver, 
 prosperity would be restored. The law was repealed, 
 and instead of restoring prosperity, two hundred and 
 sixty-two million dollars of bonds were issued in 
 order to maintain the gold reserve in the Treasury. 
 It must be remembered that the sale of these bonds 
 for gold was not made until some time after the repeal 
 of the law which, it was claimed, produced the panic. 
 Bondholders, and the moneyed interests generally, 
 knew they had nothing to fear from the further out- 
 put of the standard silver dollars. Yet this assur- 
 ance did not prevent the raid on the United States 
 Treasury. The increase in the bonded debt of the 
 United States in 1894-95, during profound peace, 
 was entirely without excuse. If the Secretary had
 
 78 MONEY AND PROSPERITY 
 
 insisted upon maintaining the legal right of the gov- 
 ernment to redeem its coin obligations in either silver 
 or gold instead of surrendering the option to the 
 holder of the obligation, no necessity for the issue of 
 interest-bearing bonds to obtain gold in time of peace 
 would have arisen. 
 
 Must our government depend upon the dealers in 
 money and securities for its supply of redemption 
 money? Shall the government be at the mercy of 
 those who are pecuniarily benefited by bond issues ? 
 In 1893 the moneyed interests and their subsidized 
 newspapers attempted to show that no more silver 
 money would circulate, yet bankers and merchants, 
 in order to obtain it, actually paid a premium for it, 
 ranging from one-half to three per cent. 
 
 On August 5, 1893, the following advertisement 
 
 appeared in the New York Times and the New York 
 
 Herald : 
 
 " WANTED— SILVER DOLLARS. 
 
 We desire to purchase at a premium of 3^ per cent., or 
 57.50 per thousand, standard silver dollars, in sums of ^looo 
 or more, in return for our certified checks payable through 
 the clearing house. 
 
 Zimmerman & Forshay, Bankers, 
 
 II Wall Street." 
 
 It is not necessary that silver dollars should circu- 
 late except for use as change, as silver certificates in
 
 HONEST MONEY 79 
 
 any denomination, from one dollar up to any amount, 
 can be issued and put into circulation to take the place 
 of silver dollars. 
 
 President Harrison, in one of his messages to Con- 
 gress, after the law of 1890 was passed, said that 
 the fifty-four millions put into circulation annually 
 equalled only one per cent, of the increase of popu- 
 lation and business, and that this new money, going 
 out into all kinds of business enterprises, saved the 
 country from a money stringency at the time of the 
 Baring failure. If this comparatively small amount 
 of new money, equal to only one per cent, of the in- 
 crease of population and business, could prevent a 
 stringency of money at the time of the Baring failure, 
 a money stringency, — falling prices, — resulting in busi- 
 ness depression, might reasonably have been expected 
 if the supply were discontinued. 
 
 The fact that after a lapse of five years prosperity 
 is not yet restored, except to a limited number, mostly 
 importers, is conclusive evidence that the panic of 
 1893 was not caused by the purchase of silver prior 
 to the repeal of the purchasing clause of the Sherman 
 law. The absurd and false theory that the new money 
 put into circulation, by the law of 1890, produced the 
 panic, has therefore to be abandoned. 
 
 The only honest dollar is one that will keep at a
 
 8o MONEY AND PROSPERITY 
 
 parity with the products of labor, and not the dollar 
 that is constantly advancing in value. The coinage 
 of the standard silver dollar between 1890 and 1893 
 partially retarded the rising value of the gold dollar, 
 but now the gold dollar will continue to rise in value 
 until more full legal tender money is put into circu- 
 lation, and, as a consequence, the gold dollar will as 
 time passes become a more dishonest dollar.
 
 CHAPTER VIII 
 
 FALLING PRICES 
 
 Since the demonetization of silver, gold has been 
 so steadily appreciating in value that its purchasing 
 power is now double what it was in 1873. The gold 
 dollar being the unit of value, we cannot speak of gold 
 as being at a premium of one hundred per cent. ; but 
 this is practically true, for its piircJiasing pozvcr has 
 been so increased that, when compared with its com- 
 mand over commodities in 1873, it is actually at a 
 premium of one hundred per cent. The only way to 
 determine the rise in the value of gold is by ascertain- 
 ing the extent of the fall of general prices. When it 
 is clearly understood that money measures values, it 
 will be seen at a glance that when general prices fall, 
 other things remaining the same, the value of money 
 rises, and that when general prices rise the value of 
 money falls. The claim of the single gold standard 
 advocates, that the fall in general prices has been 
 caused by cheapening the cost of production, cannot 
 be substantiated. 
 
 6 81
 
 82 MONEY AND PROSPERITY 
 
 By reference to the Statistical Abstract of the United 
 States, prepared by the Bureau of Statistics, under the 
 direction of the Secretary of the Treasury, it will be 
 seen that a great fall in general prices has occurred 
 since 1873, and that the beginning of the downward 
 tendency was coincident with the demonetization of 
 silver. Silver was at that time worth one dollar and 
 thirty-two cents per ounce; its value now is about sixty 
 cents per ounce, as measured in gold. Take the five 
 leading staples — wheat, corn, oats, cotton, and wool — 
 and note the rise and fall of prices of these commodi- 
 ties as related to the increase and decrease of our 
 money supply. The prices given by the Statistical 
 Abstract are for these products delivered in New York 
 and Eastern markets. The amount received by the 
 producers for these staples was much less. 
 
 In 1872 wheat was worth one dollar and forty-seven 
 cents per bushel ; in 1895 the price had fallen to fifty- 
 eight cents per bushel. Of course it is to be expected 
 that at times one or more of the hundreds of com- 
 modities will materially rise or fall in price from va- 
 rious causes. The gold price of wheat was recently 
 — owing to scarce crops and Chicago manipulation — 
 forced up to one dollar and eighty-five cents per 
 bushel. The price is now about seventy cents per 
 bushel. With good crops in this country and abroad
 
 FALLING PRICES 83 
 
 wheat will, under the gold standard, resume its former 
 price of fifty-eight cents per bushel, and will continue 
 falling if the present monetary system is maintained. 
 For one or two commodities to rise materially in price, 
 while the general trend of the whole is downward, 
 does not in any way destroy the claims made by bi- 
 metallists, that the constant fall in general prices since 
 silver was demonetized has been due to an insufficient 
 money supply. 
 
 In 1872 the price of corn in the New York market 
 was seventy cents per bushel; in 1896 it had fallen to 
 thirty-eight cents per bushel. In 1873 the value of 
 the yield per acre of oats was ten dollars and thirty- 
 eight cents; in 1895 it had fallen to five dollars and 
 eighty-seven cents per acre. 
 
 Prior to the great gold discoveries in California and 
 Australia, in 1848, when general business depression 
 prevailed all over the land, the price of middling cotton 
 per pound in the New York market was eight cents. 
 In 1864, when the per capita of the United States 
 was about sixty-five dollars, it sold for one dollar 
 per pound; in 1873 it was worth twenty cents per 
 pound, and the price has recently fallen to less than 
 seven cents per pound. In 1865 fine Ohio fleece wool 
 sold in the Eastern markets for one dollar per pound ; 
 in 1873 it was worth seventy cents; and in 1895 the
 
 84 MONEY AND PROSPERITY 
 
 price had fallen to sixteen and one-half cents per 
 pound. 
 
 It costs as much now to grow the wool on the 
 sheep's back as it did in 1873, and hundreds of other 
 articles could be named which cost as much to pro- 
 duce now as then, yet prices have fallen one-half since 
 that time. The cost of production of many com- 
 modities has undoubtedly fallen, but the lowering of 
 such cost of certain products does not account for the 
 great fall of general prices. Lessening the cost of 
 production of any given number of articles should not 
 necessarily lower the price of the same. If it costs 
 less to produce, profits should be greater and wages 
 higher. There should be a greater and constantly 
 increasing demand for labor ; and when the laboring 
 classes are engaged in the production of wealth, the 
 distributors of wealth should find employment. No 
 panic has ever been produced by lowering the cost of 
 production of commodities. 
 
 The gold standard men are compelled to admit that 
 the fall of general prices began the year silver was 
 demonetized. They claim that the fall of prices is 
 not due to the demonetization of silver, but to im- 
 proved methods of production. One would conclude, 
 if not otherwise informed, that the only new inven- 
 tions and improvements in the various arts have been
 
 FALLING PRICES 85 
 
 inaugurated since silver was demonetized. There has 
 been no period in our history as a nation that has 
 given birth to more great inventions, improved ma- 
 chinery, and means to reduce the cost of commodities 
 than that between 1850 and 1873, yet general prices 
 were steadily rising during that time. Increasing 
 or steady prices are a most powerful incentive to 
 induce men to work and to produce an abundance 
 of wealth. Fewer than three per cent, of the 
 people of the United States are benefited by falling 
 prices. 
 
 Since silver was demonetized all of the principal 
 agricultural staples have been declining in price. At 
 times, owing to scarcity, some few have been higher ; 
 but the trend of the whole has been persistently 
 downward. The mower, the self-binder, the gang- 
 plough, hay-tedder and hay-loader, and many other 
 improvements in agricultural machinery, were in use 
 prior to 1878, therefore the theory that improved 
 methods of production have materially lowered the 
 cost of production of farm products is not in accord 
 with known facts. The prices of many of the tools 
 and implements that the farmer uses have fallen ; but 
 his annual outlay for such articles is small compared 
 with the total price of all his products. Statistics 
 show that the value of the average yield per acre of
 
 86 MONEY AND PROSPERITY 
 
 wheat, corn, oats, and cotton has, since 1873, fallen 
 more than fifty per cent. The price of these staples, 
 with the exception of the temporary price of wheat, 
 is much below the cost of production, therefore the 
 farmer is not only without the means to obtain 
 money with which to purchase farming implements 
 and household necessities, but is rapidly losing his 
 honest and hard-earned possessions. Thousands of 
 farmers, who formerly cultivated their own farms and 
 reared contented and independent families, have been 
 reduced to the position of day-laborers through no 
 fault of their own. When nearly half the population 
 of the United States is deprived of its power to pur- 
 chase manufactured articles, those engaged in manu- 
 facturing industries must suffer. Mills and furnaces 
 must close, business failures ensue, and operatives 
 and the distributors of wealth must be thrown out of 
 employment and deprived of the ability to purchase 
 anything except the veriest necessaries. Deprive the 
 producers of our farm products of practically all 
 purchasing power, and the disastrous effects will be 
 felt in every branch of business. Unprofitable prices 
 force the farmer to mortgage his farm, which sooner 
 or later is sold for debt, and, finding it impossible to 
 make a living by farming, he goes to the towns and 
 cities and swells the ranks of the unemployed. If
 
 FALLING PRICES 87 
 
 prices were at this time equal to those which pre- 
 vailed at the time silver was demonetized, the farmers 
 would this year be able to spend nearly two billion 
 dollars more than is possible for them to spend at the 
 present prices of their products. 
 
 The following from the Farm, Field, and Fireside, 
 February 2, 1895, is in point: "Is the sturdy, self- 
 respecting, independent American farmer decreasing 
 in number and being replaced by the poor starveling 
 renter ? A careful student of the conditions here and 
 abroad, Mr. F, P. Powers, says that he is. Mr. 
 Powers quotes figures. Between 1880 and 1890 the 
 number of land-owning farmers decreased in every 
 New England State and the number of tenant-farmers 
 increased. In each of these States there was a marked 
 increase in the percentage of farmers who ploughed 
 the fields of another man, and in the sweat of whose 
 brow somebody in Boston ate cake. In the six 
 States, in the ten years, the land-owning farmers dimin- 
 ished twenty-four thousand one hundred and seven- 
 teen, and the tenant-farmers increased seven thousand 
 two hundred and forty-six. The percentage of tenant- 
 farmers in Massachusetts, though not large in 1890, 
 was nearly double what it was in 1880. Over seven- 
 teen per cent, of the farmers in Vermont and Con- 
 necticut and twenty-five per cent, of the farmers in
 
 88 MONEY AND PROSPERITY 
 
 Rhode Island were tenants in 1890. In the Western 
 States the same process is going on." 
 
 For centuries the precious metals continued to waste 
 away by abrasion, by the result of war, as hidden 
 treasure, and by accidents of shipwreck. This con- 
 stant decrease of the metals went on unchecked, with 
 the result that the immense amount possessed by the 
 world at the beginning of the Christian era dwindled 
 away until at length it was reduced to only a small 
 fraction of its original quantity. After Columbus dis- 
 covered the New Continent the annual supply of the 
 metals was trebled by the output from the new mines 
 of America ; a new period of rising prices set in, result- 
 ing in general prosperity, which enabled the people to 
 throw off the weight of feudalism and oppression. The 
 annual supply of gold and silver from 1802 to 1848 
 was greatly reduced, and resulted in a very great fall 
 in general prices. Neither of the precious metals was 
 demonetized during that time, and both were mined 
 more or less and coined into money, but the supply 
 was not sufficient to meet the increasing demand 
 arising from the growth of population and business. 
 In 1809 war broke out between Spain and her Ameri- 
 can colonies, and the people, being engaged most of 
 the time in warfare, neglected the mining of the 
 precious metals, and as a consequence the supply fell
 
 FALLING PRICES 89 
 
 off. General prices fell more than fifty per cent, be- 
 tween 1802 and 1848. When prices began to fall 
 general depression set in, and then as now the cause 
 was said to be over-production. Capital avoided 
 business enterprises because so many were constantly 
 failing. Manufacturers in trying to make profits from 
 the investment of capital resorted to every possible 
 means that ingenuity could suggest to reduce the cost 
 of production. Improved methods, longer hours for 
 the workmen, and starvation wages for employees were 
 of no avail against a constant fall in general prices. 
 The relief came soon after the great discoveries of 
 gold in California and Australia in 1850. 
 
 Mr. Robert Giffen, statistician to the London Board 
 of Trade, though a gold monometallist, is honest 
 enough to admit some of the bimetallists' claims, 
 which is more than can be said of most of those of 
 his belief in this country. Mr. Giffen clearly recog- 
 nizes that when money is scarce more commodities 
 must be given to obtain it than when it is plentiful. 
 In his work " The Case against Bimetallism," he 
 says, " If we were told that copper or iron or wheat 
 were rising because there was a deficiency of the sup- 
 ply of them to meet all the demands, we should ac- 
 cept the statement as a matter of course. But what 
 is true of copper or iron or wheat must equally be
 
 90 MONEY AND PROSPERITY 
 
 true of any commodity which happens to be the 
 standard monetary substance. If gold or silver is 
 that substance, and gold or silver is increasingly in 
 demand without any corresponding increase in supply, 
 then people who want gold or silver for any purpose 
 must give more for them. 
 
 " We see, then, how widely mistaken those mono- 
 metallists have been who, in their dislike of bimetal- 
 lism, have denied that the recent great demands for gold 
 in proportion to its supply were likely to have caused a 
 rise in its exchange value for other things. Looked 
 at in this way, the fall of prices is itself a proof that 
 gold, in relation to all the demands for it, has been 
 relatively scarcer than it was. Everybody who has 
 wanted it has had to give more for it. If everybody 
 who wanted coal or pig-iron was giving more for it 
 than before, we should not hesitate to say that coal or 
 pig-iron were relatively more in demand than they had 
 been ; and what we should say of coal and pig-iron 
 we must also say of gold or silver in a like case." 
 
 Mr. Giffen read a paper before the Statistical So- 
 ciety of London in 1879, in which he said, "There is 
 a general agreement that during the last few years 
 there has been a heavy fall in prices. ... It is usually 
 a fall in price which cripples the weaker borrowers 
 and causes bad debts, and this is a beginning of losses
 
 FALLING PRICES 91 
 
 by which stronger borrowers are in turn crippled, 
 further falls in prices ensue, and more bad debts and 
 losses are produced. When we see so many failures 
 as are now declared, therefore, we may be sure that 
 they are preceded and accompanied by a heavy fall in 
 prices." 
 
 It has been said that wages are nearly as high now 
 as they were when silver was demonetized ; and that 
 in some cases they are higher. Wages for skilled 
 labor in or near great manufacturing centres have in- 
 creased to some extent; but in all the outlying dis- 
 tricts, especially in the South and West, wages have 
 decreased. When we consider the number of laborers 
 who are unable to obtain employment and are, in con- 
 sequence, more or less of the time not receiving any 
 wages at all, it will be found that the total amount 
 paid the wage-earning class, in proportion to the total 
 number of laborers, will have decreased since silver was 
 demonetized. Suppose that skilled labor is receiving 
 more wages at the present time, it is no argument 
 that it is due to the gold standard. Since wage- 
 earners began to organize they have constantly in- 
 creased their demands for more wages, and when not 
 successful they often prevent a reduction in their 
 wages. Besides, as a nation increases in wealth and 
 productive power wages should increase, even with a
 
 92 MONEY AND PROSPERITY 
 
 monetary standard worse, if possible, than the present 
 gold standard of this country. 
 
 A rise in general prices signifies that money is fall- 
 ing in value because of an increase in its volume. At 
 such times manufacturers are not afraid to invest capi- 
 tal in mills and raw material, for they know that the 
 finished products will sell for more than the cost of 
 production. Wages are not cut down, and laborers 
 are sure of constant employment. 
 
 Appreciation of money induces holders of it to 
 hoard and invest only in bonds, instead of industries. 
 Large amounts of capital accumulate in the banking 
 institutions. Bonds paying four, three, and even two 
 per cent, are in great demand. The money-lenders 
 avoid new undertakings and business enterprises, and 
 their bond-holding instinct and greed to clutch gold 
 increases as the value of money increases. The farm- 
 ers, owing to their small capital and inability to com- 
 bine or stop producing, are the first to be affected by 
 faUing prices. So long as this condition of things 
 lasts we will have hard times and our streets will con- 
 tinue to be filled with hungry and insufficiently clothed 
 men, women, and children. 
 
 Our farmers, mechanics, laborers, manufacturers, 
 and distributors of wealth are beginning to realize 
 that the cause of falling prices is currency contraction.
 
 FALLING PRICES 93 
 
 They know that each year they have to give up more 
 of the products of labor to obtain the dollar, and that 
 all kinds of property, except centrally located real 
 estate in large cities and public and private bonds pay- 
 able in money, must, if sold, be disposed of at re- 
 duced prices. The trusts, monopolies, and advocates 
 of the gold standard must be made to understand that 
 they are not the sole law-makers of this republic; 
 that Congress has the power " to coin money and 
 regulate the value thereof;" that, as gold is too scarce 
 and dear. Congress must regulate its value by giving 
 the people more money by the free coinage of silver, — 
 the money of our Constitution. The monometallists 
 must be compelled to remove the corroding shackles 
 from the feet of industry. Labor shall not be en- 
 slaved, as during the decadence of the Roman empire, 
 and civilization shall not be extinguished, as was 
 nearly done during the Dark Ages.
 
 CHAPTER IX 
 
 THE FREE AND UNLIMITED COINAGE OF BOTH GOLD 
 AND SILVER AT THE PRESENT LEGAL RATIO OF 
 SIXTEEN TO ONE BY THE INDEPENDENT ACTION OF 
 THE UNITED STATES 
 
 When a physician is called in to treat a patient, 
 the first and most difficult thing he encounters is the 
 making of a correct diagnosis of the case. When 
 the cause of the malady is ascertained the remedy 
 may be quickly and effectively applied. This country 
 is afflicted with an insufficient metallic money supply. 
 Many have urged that international bimetallism 
 should be accepted as a remedy. This, however, is 
 not practical, for the reason that other nations refuse 
 to adopt the double standard. But why will not in- 
 dependent bimetallism effect the desired cure ? Bi- 
 metallists believe it will. One thing is certain : if 
 the gold standard is not abandoned it will further 
 impoverish our people by continuing to force prices 
 down, stop production, retard industry and progress, 
 and deprive the people of purchasing power. 
 
 Owing to the fact that the population of the United 
 94
 
 INDEPENDENT ACTION 95 
 
 States has more than doubled in the last thirty years, 
 the demand for money has enormously increased. 
 Large sums are constantly in demand for the develop- 
 ment of our unimproved lands and new industrial 
 enterprises. It is, therefore, absurd to maintain that 
 a material increase in our annual money supply would 
 not immediately be absorbed by our industrious and 
 enterprising population. 
 
 Any nation that can absorb into its coinage, at a 
 fixed ratio, all the surplus silver or gold bullion 
 produced, can maintain the free, unlimited, and in- 
 dependent coinage of both metals and keep them at 
 a practical parity all the time. 
 
 None of the great nations of Europe are com- 
 parable in greatness to the United States. You can 
 spread out on a part of this country Great Britain, 
 France, Germany, Austria, Italy, Spain, Greece, Den- 
 mark, and Switzerland and have two-thirds of our 
 territory left. If our entire seventy-three million 
 people were located in the great State of Texas, the 
 population per acre would not be so great as that of 
 Germany. Our soil and climate are such that we 
 can produce every article necessary to man. The 
 productive energy of the United States is greater than 
 that of England, Germany, and France combined. 
 
 Gold and silver are not found in unlimited quan-
 
 96 MONEY AND PROSPERITY 
 
 titles. They cannot be produced like iron and lead. 
 All gold- and silver-mining districts are soon ex- 
 hausted, like those of Ophir, Spain, and the placer 
 mines of California, and new ones have to be dis- 
 covered, with much loss of time, labor, and capital. 
 
 The probabilities now are that for the next few 
 years much more gold than silver will be mined in 
 this country, as well as in other parts of the world. 
 The world's production of gold between 1801 and 
 
 1840 inclusive was only ;$423, 535,000. The world's 
 production of silver during that period was ;^ 1,062,- 
 837,000. The world's production of gold between 
 
 1841 and 1873 inclusive was ;^ 3, 05 8,069,000, while the 
 world's production of silver during that time was only 
 ;^ 1, 448, 5 45, 000.* Yet, with this wide fluctuation in 
 the production of the precious metals, the commer- 
 cial parity of the two metals was maintained during 
 that entire time. 
 
 For many years France maintained for all Europe 
 the virtual commercial parity of gold and silver at the 
 ratio of fifteen and a half to one. The ratio of the 
 United States being sixteen to one, the world's price 
 for silver was naturally fixed in France, where the 
 highest market prevailed. 
 
 * Treasury Department, Bureau of the Mint.
 
 INDEPENDENT ACTION 97 
 
 When our constitutional bimetallic system, the free, 
 unlimited, and independent coinage of both gold and 
 silver at the legal ratio of sixteen to one, is again 
 established, the price of silver bullion will be fixed by 
 the United States government, and no holder of silver 
 bullion in any country will sell it for less than that 
 fixed price, less insurance and transportation charges. 
 Gold would not then have the monopoly it now 
 enjoys, and it would not be so difficult to obtain. 
 The gold dollar would decline in value and the silver 
 dollar would rise in value. 
 
 The time is past for deceiving the people with 
 promises of international bimetallism. They demand 
 action that will put into circulation a greater volume 
 of full redemption money. The question to be settled 
 is, how shall it be done ? The money-power interests 
 would prefer to contract the annual supply rather than 
 to increase it. The bankers are urging the government 
 to permit bank issues of paper money, which would 
 be merely credit money, subject to inflation or con- 
 traction at the will of the bankers. The paper and ink 
 necessary to print several hundred thousand dollars' 
 worth of bank-notes would cost only a few cents. 
 How can such money be more desirable or valuable 
 than silver coin or silver certificates, redeemable in 
 silver coin ? If the bank issues of paper money are to 
 
 7
 
 98 MONEY AND PROSPERITY 
 
 be made "good" and "sound" by the stamp of the 
 government, why is it that silver cannot be made good 
 money in Hke manner? It must be remembered that 
 bank issues of paper money would not in any way in- 
 crease the supply of full redemption money, money of 
 final payment, which, according to Mr. Fairchild, ex- 
 Secretary Carlisle, and other gold standard authorities, 
 is gold money. These authorities claim that all our 
 present paper money and the silver dollars as well are 
 redeemable in gold ; if this is so, then there are now, ac- 
 cording to the report of the Secretary of the Treasury, 
 about one billion dollars of such money redeemable 
 in gold, a sum equal to nearly twice the amount of 
 gold in the whole country. If bank issues of paper 
 money are permitted instead of opening our mints to 
 the free coinage of silver, panics will ensue, and the 
 government will be obliged to continue the borrowing 
 process in order to maintain the gold reserve in the 
 Treasury. 
 
 Bimetallists have long since ceased to hope for 
 international bimetallism. They know that our gov- 
 ernment is already under the control of Lombard 
 Street and Wall Street, and therefore they do not 
 favor committing the country more thoroughly into 
 the hands of the money-changers by allow'ing the 
 bankers to control our annual money supply.
 
 INDEPENDENT ACTION 99 
 
 It is said if we adopt the free coinage of silver our 
 foreign credit would be affected. We pay as interest 
 to foreign nations nearly two hundred million dollars 
 annually, and when our mints are again opened to 
 the free and unlimited coinage of silver, the creditor 
 nations of Europe will by self-interest be coerced into 
 aiding us to maintain the double standard. When 
 the holders of gold money learn that the double 
 standard is again to be adopted, that gold, in conse- 
 quence, will fall in value, and that the value of all 
 property will rise, they will hasten to exchange their 
 gold for goods and property. 
 
 The monetary commission which assembled in In- 
 dianapolis formulated plans to more securely estab- 
 lish the gold standard in the United States. These 
 plans proposed that bank-notes should supersede 
 greenbacks and silver certificates ; that no more sil- 
 ver dollars should be coined, and that all standard 
 silver dollars should be redeemed in gold. They 
 advised that silver dollars should be melted down 
 and sold as bullion, and also that all silver bullion 
 on hand should be disposed of 
 
 Secretary Gage, in his plan advocating the retire- 
 ment of the government paper money, admits that the 
 contraction of the currency would probably be more 
 pernicious in two or three years than the interest on
 
 loo MONEY AND PROSPERITY 
 
 an equal amount of bonds would be for forty years. 
 But he thinks the national banks would issue enough 
 money to prevent much contraction. The people 
 would have to depend upon the honor of the national 
 banks. In giving this great power to the banks, the 
 government is not to require them to redeem their 
 notes in gold ; but the United States government is 
 to do so on demand, and the national banks can settle 
 with the government in " any kind of legal tender 
 money at the option of the banks." It was said in 
 1893 that the panic was produced by the fear that the 
 government could not maintain gold payments if the 
 Sherman law remained longer in force. If all this 
 several hundred millions of money to be issued by 
 the national banks is to be redeemable by the United 
 States government in gold in order to make it "good" 
 and " sound" money, by what force of reasoning does 
 any one conclude that the government is now capable 
 of redeeming such bank issues of paper money in 
 gold and could not, in 1893, keep in circulation fifty- 
 four million dollars of silver annually ? 
 
 We have heard much about the sugar trust, the 
 oil trust, and numerous other big trusts ; but should 
 the banks secure any greater control of the money 
 supply of this nation, all of these trusts put into one 
 gigantic whole would not compare with such a bank
 
 INDEPENDENT ACTION loi 
 
 trust in the disastrous effects it would have upon the 
 people. 
 
 In 1893, when the bill to repeal the Sherman law 
 was being discussed in the United States Senate, 
 Senator John P. Jones, of Nevada, called attention to 
 the fact that bankers and the moneyed interests, after 
 entirely stopping the coinage of silver, would insist 
 that the government should cease to issue paper 
 money and turn over the prerogative to the banks. 
 He said, " The repeal of the Sherman law, if accom- 
 plished, will be but one-half of the scheme of the 
 banks. They desire to get silver first out of the way. 
 The project is, and the determination of the banks is, 
 that they niust be permitted to have a monopoly of 
 the issue of money. They insist that the government 
 shall cease the issuance of money and hand over the 
 prerogative to them. By the Constitution the right 
 to coin money was given to Congress. The bankers 
 do not believe that was a wise provision on the part 
 of the framers of the Constitution, who should have 
 devolved this duty upon the banks. 
 
 "When silver is out of the way, they will acquiesce 
 in the views of the producers of the country that 
 more money is necessary, and will demand an issue 
 of several hundred million dollars of bonds in order 
 that the country may be enabled to have a sufficient
 
 I02 MONEY AND PROSPERITY 
 
 volume of money to do its business and maintain 
 some degree of prosperity. They hope and expect 
 that by the time they are ready to push this demand 
 the distress of the country will be so great for the 
 want of money that their wishes will be complied 
 with. 
 
 " There is no doubt that the distress of the country 
 will be great for the want of money. Distress will 
 continue until relief is obtained by a sufficient supply 
 of money, not, however, bank money, but full legal 
 tender money. It is useless to hope for permanent 
 improvement of industrial conditions — useless to ex- 
 pect that the great masses of idle men will find per- 
 manent employment — until a volume of money shall 
 be issued sufficient to arrest the pernicious fall of 
 prices, and give to employers of labor and projectors 
 of great enterprises the reasonable assurance that by 
 employing workmen they will not be losing money. 
 This new money cannot be gold. We already have 
 our distributive share of the gold of the world, and if 
 we temporarily get more we cannot keep it. Silver 
 must therefore be remonetized, unless we are to resort 
 altogether to paper money. The country must have 
 money, and there appears to be no alternative for 
 quartz-mills except paper-mills. This may be an 
 unwelcome dilemma to the national banks and the
 
 INDEPENDENT ACTION 103 
 
 creditor classes in general, but if industry is to be re- 
 vived and maintained in this country it is a dilemma 
 of which those classes must accept either the one 
 horn or the other. 
 
 " If the government must issue bonds, — for which, 
 in my opinion, there is no necessity, — why should it 
 not take the bonds into its own possession and deposit 
 them in the Treasury of the United States as security 
 for Treasury notes to be issued by the government 
 without expense to the people ? In that case the 
 government would have the advantage of saving the 
 interest on the bonds while they were locked u[) in 
 the Treasury, which could not be saved if the bonds 
 were placed there as the property of the banks. 
 
 " We do not need to issue bonds for gold. We do 
 not need to sacrifice our people for gold. This country 
 does not need to depend upon any other country for 
 money. By reliance upon ourselves, our own re- 
 sources, and our own people, any development that is 
 necessary in our country will be made without diffi- 
 culty. We do not need to borrow from other 
 countries for the purpose. 
 
 " For, after all, what is it that is necessary for de- 
 velopment? Nothing but labor and the products of 
 labor. We have enough men and enough material 
 for all rational and natural development. All that is
 
 104 MONEY AND PROSPERITY 
 
 necessary in addition is to have a well-regulated sys- 
 tem of money of our own." 
 
 Gold monometallists contend that we want " money 
 good in any part of the world." There is no such 
 thing as international money. The fact that leading 
 commercial nations admit gold to the mints in un- 
 limited quantities does not prove that gold is prefer- 
 able to silver as a circulating medium. The demand 
 for gold is so great that it is constantly moving from 
 one country to another, upsetting prices, while silver, 
 the money of the people, remains at home. The 
 gold coin and the silver coin of the United States 
 is not money outside of the jurisdiction of this 
 country ; they are as much a commodity as cotton 
 and wheat. 
 
 There are a few people who favor the free coinage 
 of silver by changing the ratio from sixteen to one 
 to twenty to one or thirty-two to one. To thus 
 change the present legal ratio of sixteen to one would 
 interfere with existing contracts and would unjustly 
 decrease our small volume of metallic money. The 
 ratio of the leading nations of the world, except the 
 United States, is fifteen and one-half to one, and the 
 proportion of silver to gold in the world is about 
 sixteen to one. Sixteen to one was the legal ratio 
 from 1834 to 1873, and it is the ratio which now
 
 INDEPENDKN'l" AC'l'ION 105 
 
 exists between the gold and the silver coins in circu- 
 lation in this country. Should all nations establish 
 a ratio of thirty-two to one it would be necessary to 
 to recoin four billion dollars of silver coin, and the 
 metallic money of the world would be reduced one- 
 fourth. 
 
 The remedy for the gold standard is the free and 
 unlimited coinage of both gold and silver at the 
 present legal ratio of sixteen to one by the inde- 
 pendent action of the United States. 
 
 In an article to the New YovV: Journal, February 6, 
 1898, William J. Bryan points out the remedy as fol- 
 lows : "In 1896 independent bimetallism was pointed 
 out as the only remedy for the gold standard, and the 
 failure of our Monetary Commission to secure inter- 
 national bimetallism strengthens our contention. The 
 Senate has recently put itself upon record in favor of 
 that plank of our platform which declares that the 
 silver dollar shall have a debt-paying power equal to 
 the gold dollar, and that the government shall not 
 surrender its right to redeem coin obligations in either 
 gold or silver, and the House has declared against 
 the proposition. The effort of the Secretary of the 
 Treasury to secure authority to issue more bonds and 
 his demand for the retirement of greenbacks are in 
 direct opposition to the position above stated. Thus
 
 io6 MONEY AND PROSPERITY 
 
 it will be seen that events, not free silver agitators, are 
 keeping the money question before the country. 
 
 " The evil effects of the gold standard are so ap- 
 parent that the Republican party refuses to become 
 sponsor for the system ; it is so indefensible that even 
 Secretary Gage, in his recent speech at Philadelphia, 
 took occasion to say that the President is in favor of 
 international bimetallism, and has the support of all 
 his cabinet in his effort to secure the co-operation of 
 other nations in getting rid of the gold standard, 
 
 " But while the Republican party, through the chief 
 executive, still holds out the hope of international 
 bimetallism, none of the party leaders say a word in 
 defence of the double standard, independent or inter- 
 national. Why not ? Because international bimetal- 
 lism can only be defended on the theory that the 
 existing gold standard is unsatisfactory, and the Re- 
 publican leaders know that the Republican party has 
 no real intention of abandoning the present gold stand- 
 ard, and they cannot, therefore, afford to say anything 
 which would make the people dissatisfied with it. 
 Neither do they, as a rule, say anything in favor of 
 the gold standard, because to do so would at once 
 raise the question. Why, then, is international bi- 
 metallism desirable? Occasionally a speaker will be 
 found who will take both sides of the question, as did
 
 INDEPENDENT ACTION 107 
 
 Mr. Gage at Philadelphia. After trying to show that 
 the gold standard had been a great blessing to the 
 laboring man, he declared it to be the intention of the 
 Republicans to substitute another system. The ques- 
 tion at once arises, If the gold standard has been a 
 blessing to the laboring man, why does not the Re- 
 publican party advocate its retention rather than its 
 abandonment ? International bimetallism will have 
 exactly the same effect as independent bimetallism in 
 raising prices. If a fall in prices is an advantage, then 
 a rise in prices cannot be desirable; and if, on the 
 other hand, a rise in prices, whether obtained through 
 independent bimetallism or through an international 
 agreement, is good, then the fall in prices caused by 
 the gold standard must be admitted to have worked 
 an injury. The fall in prices, extending over the last 
 twenty-five years, has, in fact, been disastrous to the 
 producers of wealth in every gold standard country 
 in the world. . . . 
 
 "The stand taken by the Republicans raises the 
 most important question that can confront a nation, 
 namely, the right of the people to legislate for them- 
 selves. The Republican platform is the first platform 
 which ever declared in favor of repealing the Decla- 
 ration of Independence. That platform expressly 
 transfers from America to Europe the right to de-
 
 loS MONEY AND PROSPERITY 
 
 termine the financial policy of the United States. 
 According to that platform, the American people 
 should seek international co-operation in restoring 
 bimetallism, but must maintain the gold standard until 
 that co-operation is secured. The Republican plan 
 is to invite foreign assistance, but while we may in- 
 vite, European nations are at liberty to refuse the invi- 
 tation, and they have thus far done so. The Repub- 
 lican platform, therefore, means that we must have the 
 gold standard as long as European nations favor the 
 gold standard, and can have bimetallism only when 
 they consent to it. 
 
 " Recent events have demonstrated that Europe has 
 turned the money question over to England, and 
 England seems to have turned it over to the English 
 financiers, who, on the 22d of last September, met at 
 the Clearing House, pledged themselves to secrecy, 
 decided upon the gold standard, and thus determined 
 our financial policy as long as the Republican plan 
 prevails. 
 
 " No one believes that bimetallism will prove a 
 panacea for all political ills, but the money question 
 must be settled before other questions can be reached. 
 Financial independence is a condition precedent to 
 reform along other lines. The power that controls 
 our financial policy can control the policy of our gov-
 
 INDEPENDENT ACTION 109 
 
 eniment on every other subject whenever occasion 
 arises for the exercise of that control. Suppose, for 
 instance, that the money question were dropped and 
 the fight against the trusts made the main issue. 
 Mucli foreign capital is invested in trusts, and foreign 
 financiers could announce that any legislation hostile 
 to trusts would be followed by the withdrawal of 
 foreign capital and a panic. If they can threaten the 
 withdrawal of foreign capital to prevent a change of 
 our financial policy, they can threaten such withdrawal 
 to prevent the annihilation of trusts or the regulation 
 of other corporations. Not only can this threat be 
 made in regard to our domestic policy, but it can be 
 made to prevent the adoption of any foreign policy 
 which does not meet with favor in Europe. We can- 
 not protect the rights of our citizens, avenge an insult 
 to the flag, enforce the Monroe doctrine, or express 
 our sympathy with those who are struggling to be 
 free, if we are to be deterred by the threats of foreign 
 investors. The right to legislate for our people on 
 the money question involves the right to legislate on 
 all questions, and until this right is secured the dis- 
 cussion of other questions will avail nothing. When 
 we have released ourselves from the dictation of 
 foreign financiers and overthrown the local money 
 trust which cc^ntrols our financial policy, we shall be
 
 no MONEY AND PROSPERITY 
 
 in a position to undertake the extermination of other 
 trusts and the protection of our people from all forms 
 of monopolistic oppression. . . . 
 
 " Bimetallists contend that gold and silver have 
 been driven apart by hostile legislation, and that 
 they can be brought together by friendly legislation. 
 They contend that legislation favorable to gold has 
 increased the purchasing power of an ounce of gold 
 throughout the world and lowered the general level 
 of prices, while the same legislation has lessened the 
 demand for silver and lowered the gold price of that 
 metal. They contend that the restoration of the free 
 and unlimited coinage by a great nation like the 
 United States will increase the demand for silver to 
 a point where the mints will require all the surplus 
 silver of the world, and thus, by raising the gold 
 price of silver and lowering the purchasing power 
 of an ounce of gold, will restore the parity at sixteen 
 to one, and thereafter maintain the parity at that 
 ratio." 
 
 " I know no way of judging the future," said 
 Patrick Henry, "but by the past." Our first coinage 
 law was passed in 1792, and bimetallism was a success 
 from that time until silver was demonetized in 1873. 
 We also know that the gold standard is a failure. 
 As the future can only be judged by the past, we
 
 INDEPENDENT ACTION in 
 
 must insist that our people would be better served 
 by the readoption of our constitutional bimetallic 
 system, the free, unlimited, and independent coinage 
 of both gold and silver at the ratio of sixteen to one, 
 without further solicitation of foreign support. 
 
 The opponents of bimetallism contend that if the 
 free and unlimited coinage of silver is again adopted 
 we would be deluged with the silver of the world. 
 An important point in this contention is always lack- 
 ing; they fail to show where this great flood of silver 
 is coming from. It is reported by the director of the 
 United States Mint that there is about four billion dol- 
 lars of gold in the world and about the same amount 
 of silver money. About three billion four hundred 
 million dollars of this silver is full legal tender. 
 How absurd it is to say that other nations would 
 send their full legal tender money to the United 
 States, when it is performing all the functions of gold 
 in the payments for commodities, property, and debts 
 in the countries where it is coined ! The limited legal 
 tender contains from five to ten cents less silver to the 
 dollar than our dollar, and who can be insane enough 
 to believe that "private individuals" will go to the 
 expense of gathering up this silver, pay express 
 charges and insurance, and ship it to this country? 
 Many people believe the Treasury vaults at Washing-
 
 112 MONEY AND PROSPERITY 
 
 ton are " groaning" with silver bullion, and that 
 various nations have enormous amounts of silver 
 bullion stored away ; while the fact is, there is not 
 twenty-five million ounces of silver bullion anywhere 
 in the world for sale to-day. 
 
 We are told that the silver in the arts would be 
 melted down and sent to our mints to be coined into 
 money. This claim virtually admits that there would 
 be a large increase in the value of silver. When the 
 cost of the manufacture of silver and the demand for 
 it in the arts is considered, it is folly to talk of much 
 silver bullion coming from this source; on the other 
 hand, there will continue to be each year a constant 
 demand for more silver in the arts. It has been said 
 that the silver in India would be gathered up and 
 " dumped" into this country. Whatever monetary 
 standard Great Britain may force upon India, silver 
 will continue to be in that country the principal 
 redemption money, and will constantly be in demand 
 in large quantities by the government and people. 
 It is true that India has for centuries drawn from all 
 parts of the world large quantities of silver which 
 was coined into rupees and used in the architectural 
 decorations of numerous beautiful temples. Millions 
 of the inhabitants of India invest their savings in 
 silver, which thev have made into ornaments and
 
 INDEPENDENT ACTION ii 
 
 o 
 
 sacred charms that are never disposed of except in 
 extreme cases. Lord Herschel's Indian commission 
 reported that during the great famine in 1877-79, 
 when more than five hundred thousand deaths by 
 starvation were recorded, only about twenty-two mil- 
 lion dollars' worth of silver ornaments and charms 
 found their way to the mints during the three years' 
 famine. 
 
 When bimetallists refute all of these arguments by 
 incontestable facts, they are met by the assertion that 
 the over-production from the mines would deluge us 
 with silver until we would be forced to a silver basis. 
 This is another admission that silver bullion would 
 rise in value, otherwise there would be no inducement 
 for extra exertion in producing the metal. The 
 world's mint records from 1473 to 1873 show great 
 fluctuations in the production of gold and silver, — 
 greater than since silver was demonetized, — and yet 
 practically a steady ratio was maintained between the 
 two metals for that entire time. 
 
 When several of the leading nations in 1873-74 
 demonetized silver, its commercial value as measured 
 in gold was depreciated, and it has continued to fall in 
 value ever since. Silver cannot rise in value until 
 some great nation gives the metal free coinage. Ac- 
 cording to the mint reports, the world's production of 
 
 8
 
 114 MONEY AND PROSPERITY 
 
 silver, from 1873 to 1892 inclusive was ^2,246,519,000, 
 and that of gold for the same period, ^2,157,097,000. 
 The average production of silver over that of gold for 
 this period was, therefore, less than five million dollars 
 a year, an amount equal to only one-tenth the number 
 of standard silver dollars put into circulation by the 
 law of 1890. It is estimated that at least one-fourth 
 of the world's production of silver is used in the arts, 
 and many place the estimate at one-half. 
 
 The Sherman law was enacted in 1890, and repealed 
 in 1893; during that time there was purchased 
 annually fifty-four million dollars' worth of silver, yet 
 the amount was not large enough to even prevent the 
 fall of general prices, much less to increase them. 
 Since the beginning of history no nation has ever 
 been deluged with more silver than the people needed 
 for use as money and in the arts. Silver never has 
 been and never will be produced in unlimited quantities. 
 
 By the law of 1890 the government is required to 
 maintain the parity of gold and silver. In order to do 
 this the Secretary of the Treasury paid out gold in- 
 stead of silver. He permitted the creditor to name 
 the kind of money wanted instead of reserving the 
 legal right to pay in gold or silver, but this did not 
 maintain the commercial parity of the two metals. 
 
 The value of the bullion in the silver dollar in
 
 INDEPENDENT ACTION 115 
 
 1891 was about sixty-five cents; in 1895 it was down 
 to about fifty-two cents. That part of the law of 1 890 
 requiring the maintenance of the parity of the two 
 metals reads as follows : " It being the established 
 policy of the United States to maintain the two metals 
 on a parity with each other upon the present legal 
 ratio." The parity cannot be maintained by discrim- 
 inating against silver in favor of gold. The free and 
 unlimited coinage of both gold and silver at a fixed 
 ratio creates an unlimited demand for the metals at a 
 fixed price. When silver was denied free and un- 
 limited coinage at the mints its commercial value was 
 lowered, because its principal value, like that of gold, 
 is almost entirely due to its use as money. If all the 
 nations of the world were to discontinue the use of 
 silver as money, its commercial value would probably 
 fall to a few cents an ounce, as measured in gold. 
 
 The class of men who want to fasten the gold 
 standard on this country are the money-changers, — 
 the Rothschilds, the Morgans, and those whom they 
 can coerce or control by money, influence, and false 
 representation. The conspiracy to demonetize silver 
 was hatched in London, and the British have had a 
 hand in every move since which has had for its object 
 the forcing of this government to a permanent gold 
 standard basis.
 
 ii6 MONEY AND PROSPERITY 
 
 No argument, based on facts, has been advanced 
 which proves that the free and unHmited coinage of 
 silver by the United States alone would not be suc- 
 cessful. All arguments against bimetallism are based 
 on fear, apprehension, and prediction. On the other 
 hand, we know that the single gold standard is a fail- 
 ure, and that the advocates of the restoration of the 
 standard silver dollar can cite indisputable facts in 
 support of their contention. 
 
 In 1878 the bimetallists gave due warning as to 
 what the result of the demonetization of silver would 
 be. They showed that as the country reached a more 
 thoroughly gold basis an insufficient money supply 
 would produce falls in general prices, causing thou- 
 sands of business failures, great reduction in the em- 
 ployment of labor, and financial panics. It is folly to 
 expect silver, degraded as it is, to rise in commercial 
 value until at least one of the great nations again gives 
 it free and unlimited coinage, and thus creates an un- 
 limited demand for the metal. Whence cometh the 
 cry, so often heard, of fifty-cent dollars ? It is not 
 from the farmer or the laborer, or the debtor class. 
 These constitute the great majority of our seventy- 
 three million population. For the sake of argument, 
 let us suppose, after the United States shall have re- 
 stored silver to its constitutional legal ratio of sixteen
 
 INDEPENDENT ACTION 117 
 
 to one, that its commercial value, as measured in gold, 
 does not rise above its present price ; with our mints 
 opened to the free and unlimited coinage of silver, and 
 each dollar coined made a full legal tender for all debts, 
 both public and private, every standard silver dollar in 
 this country would pay as much of debts and taxes 
 as any gold dollar would. Then what becomes of 
 the fifty-cent dollar idea ? Ah, we are told our 
 trouble would arise in the settlement of international 
 balances ! Only about five per cent, of our people 
 have international balances to settle, and these are 
 principally importers. In international trade com- 
 modities are exchanged for commodities and settle- 
 ment is made by bills of exchange. Gold and silver 
 are used only to settle final balances, and they are 
 not considered as money, but as bullion. The sub- 
 sidized press and the advocates of gold monometal- 
 lism try to frighten the toiling classes who have 
 deposits in the savings-banks, by telling them that 
 the free coinage of silver means the cutting down of 
 one-half their deposits. These monometallists would 
 better employ their time in trying to explain why, 
 under the present monetary system, so many of the 
 laboring men, for whom they profess so much sym- 
 pathy, are hungry and out of employment; and why 
 so much of this money is drawn from the savings-
 
 ii8 MONEY AND PROSPERITY 
 
 banks each year to be given to labor unions to sup- 
 port the families of laborers out on strike for living 
 wages. 
 
 When money is rising in value it is withdrawn 
 from productive and industrial enterprises, producing 
 hard times. More laborers are thrown out of steady 
 employment and the number of those retaining their 
 places is not increased, as would be the case if money 
 were falling, or stable in value, but instead many are 
 reduced to half-time or a diminution of their pay. 
 When laborers cannot find employment wages de- 
 crease, owing to the supply being greater than the 
 demand. Thus the laborer who has money on de- 
 posit in the savings-bank, sooner or later is obliged to 
 withdraw his hard-earned savings to meet pressing 
 demands. While, on the other hand, our people could 
 enjoy continuous prosperity if an ample supply of 
 full redemption money were put into circulation. 
 This would stop hoarding and the accumulation of 
 unemployed capital in the banks, relieve productive 
 and business stagnation, and insure constant and re- 
 munerative employment to the laborer. 
 
 The advocates of the gold standard tell us that if 
 you give free and unlimited coinage to the standard 
 silver dollar, all our gold would be driven out of the 
 country, Bimetallists contend that our gold would
 
 INDEPENDENT ACTION 119 
 
 not leave us to any great extent, because the free and 
 unlimited coinage of silver would increase the value 
 of silver and reduce the value of gold; and even if 
 some of the gold should at first go out of the country, 
 or be hoarded, it would only be for a short time, for 
 with silver remonetized new energy would be infused 
 into every class of business and an era of rising prices 
 would set in, and gold and every other kind of money 
 would be in great demand and freely offered. The 
 holders of gold would know that no further unearned 
 increment of money would be possible, and hoarding 
 would cease. But suppose that gold should leave us 
 and go to Europe. According to the report of the 
 Treasury Department, Europe has about three billion 
 dollars of gold. Our six hundred million dollars 
 would, therefore, increase their stock twenty per cent., 
 and the value of gold there would fall. This would be 
 indicated by a rise in general prices. As prices rise 
 there, they would have to bring back the gold here to 
 purchase our products of cotton, wheat, meat, pe- 
 troleum, iron, and many of our other home products. 
 This money would of necessity be mostly if not en- 
 tirely gold that would be sent back to purchase our 
 products, for there is no available silver bullion, or 
 silver coin that could be turned into silver bullion, 
 anywhere in Europe. When we consider these facts.
 
 I20 MONEY AND PROSPERITY 
 
 and that the United States produces a large portion 
 of the gold of the world, we must conclude that our 
 gold standard friends are in error in claiming that our 
 gold would, to any extent, leave the country if the 
 United States should open the mints to the free and 
 unlimited coinage of silver at the legal ratio of sixteen 
 to one. 
 
 It has been persistently urged by the bond-holding 
 class that if our mints were opened to the free coinage 
 of silver, the silver dollar would fall in value — fall in 
 purchasing power — equal to that of Mexico. There 
 has been no depreciation in the value of the Mexican 
 silver dollar. It will purchase as much in that coun- 
 try now as it would in 1873. The population of 
 Mexico is less than one-sixth that of the United 
 States, with a foreign trade of one-twentieth, and a 
 domestic trade of less than one-hundredth part that 
 of the United States, and, with no such demand for 
 money as in this country, Mexico cannot be ex- 
 pected to materially raise the gold price of silver 
 bullion. 
 
 It is said by the gold standard clique that silver 
 has been abandoned by nearly all the civilized na- 
 tions. The masses of the people have never in any 
 country evinced a desire to discard silver. Silver has 
 been struck down by the plutocrats in Europe and
 
 INDEPENDENT ACTION 121 
 
 the money-changers and their chosen representatives 
 in this country. The producing classes in every 
 country in the world to-day demand the free coinage 
 of silver. In England, the farmers, mechanics, and 
 producers of wealth generally are opposed to the 
 gold standard. In 1895 the German Reichstag de- 
 clared for international bimetallism, and France has 
 for years desired to abandon the gold standard and to 
 open her mints to the free, and unlimited coinage of 
 silver the same as gold. 
 
 We have had enough experiments in " trying to do 
 something for silver." Limited coinage of silver since 
 1873 succeeded only in making the fall in the price 
 of silver buUion more gradual. Neither the Bland- 
 Allison act nor the Sherman law could restore the 
 parity of the metal, although in 1890, when there was 
 a mere prospect that our mints might be opened to 
 the free coinage of silver, the bullion price rose to one 
 dollar and twenty cents an ounce not only in the United 
 States, but in every country in the world. When the 
 United States was purchasing a limited amount of sil- 
 ver, we were only a factor in fixing the price. 
 
 So long as the demand for money remains the same, 
 if our gold were withdrawn the silver dollars in taking 
 the place of the gold would be increased in value 
 in proportion to the amount of gold withdrawn, less
 
 122 MONEY AND PROSPERITY 
 
 the depreciation of the gold when it reached the 
 countries receiving it. 
 
 Many people fail to understand why prominent men 
 in Congress, who should be familiar with the money 
 question, favor the gold standard, if it is maintained 
 in the interest of the moneyed class. Most of these 
 men are either planning for the presidency or for posi- 
 tions of distinction in the political arena. Until the 
 closely contested campaign of 1896, many of them 
 avowed more or less openly a preference for the double 
 standard. They know that bimetallists are right in 
 demanding the free coinage of silver, regardless of 
 international agreement. They believe, however, that 
 the power of bankers, creditors, and the moneyed In- 
 terests generally, by the free use of money, coercion, 
 and political influence will continue to block all finan- 
 cial legislation that tends to stop the increase in the 
 value of money. They are, therefore, desirous of be- 
 ing on good terms with the side which they believe 
 will win the victory at the polls. Besides, they know 
 that the money power interests stand ready to pay 
 their campaign expenses, and to advance their political 
 fortunes in every way that money and their influence 
 can operate. 
 
 It is said that we have been on a gold basis 
 since 1873; if so, twenty-five years has been quite
 
 INDEPENDENT ACTION 123 
 
 long enouf^h to give it a fair trial. That it has been 
 so far a failure cannot be successfully controverted. 
 Those who uphold the gold standard promise to dis- 
 card it as soon as possible for international bimet- 
 allism. This is not American in spirit. The life — 
 the very existence of our republic depends on an ade- 
 quate volume of money. If the gold standard ought 
 to be abandoned for international bimetallism, and 
 as we have been on our knees to England and other 
 European nations quite long enough for our national 
 sense of pride, it would seem a sensible thing for us 
 to make our own financial legislation and to cast out 
 the great Rothschild-Morgan gold octopus, and to 
 stop so far as it is in our power to do so this death- 
 struggle for the ever-appreciating gold dollar. We 
 demand of Great Britain the recognition of our Mon- 
 roe Doctrine, and yet allow her to dictate our financial 
 policy. 
 
 If this nation cannot establish a financial system 
 of its own, independent of other nations, those who 
 framed our Constitution were in error when they gave 
 the power to Congress " to coin money and regulate 
 the value thereof" Our national independence, de- 
 clared in 1776, no longer exists if we must submit to 
 the dictation of the European autocrats. If we must 
 follow a policy dictated by creditor nations, then the
 
 124 MONEY AND PROSPERITY 
 
 work of Hamilton in framing the first mint act of 
 1792, which was approved by Jefferson and Washing- 
 ton, was a mistake. We are richer in natural re- 
 sources than any nation of the world. We are a 
 great debtor nation, and we produce nearly one-half 
 the silver bullion of the world ; therefore, why should 
 we continue to conspire with Great Britain, the creditor 
 nation of the world, in discriminating against the free, 
 unlimited and independent coinage of silver, the money 
 of our Constitution, and persist in helping her main- 
 tain the single gold standard when it is known that 
 we could not pay one-tenth of our debts in gold if 
 called upon to do so ? 
 
 National and individual prosperity, liberty, honesty, 
 reason, humanity, and civilization demand the restora- 
 tion of the standard silver dollar to an equality with 
 the gold dollar at the legal ratio of sixteen to one, 
 without waiting for the consent or co-operation of 
 any other nation. 
 
 THE END
 
 UNIVERSITY OF CALIFORNIA AT LOS ANGELES 
 
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