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TRUMBULL WHITE, 
 
Silver ^d Qold 
 
 OR 
 
 QotK Sides of the 
 
 A symposium of the views 
 of all parties on the 
 
 Currency 
 
 as expressed by their leading 
 advocates 
 
 Thoroughly expounding the 
 
 doctrines of f re e Silver, 
 
 Mono-metallsm and Bi-metalism, with 
 all the arguments, pro. and con. 
 
 
 . 
 
 1 
 
 ' 
 
 From tKe per\s of 
 
 John Sherman, Wm. M. Stewart, 
 Wm. B. Allison, W. J. Bryan, 
 John GK Carlisle, Wm. A. Peffer, 
 Edward Atkinson, Wm. H. Harvey, 
 Benj. R. Tillman, and others. 
 
 EDITED BY TRUMBULL WHITE. 
 
 Amthor of "The World's Columbian Exposition," "War in tfce EaBt, 
 
 With portraits of leading 
 Statesmen and Economists. 
 
Copyrighted, 1893, 
 
PREFACE. 
 
 IT is not often that any economic or political contro- 
 versy rouses discussion equal to that engendered by 
 the grave financial questions now at issue. A single 
 gold standard of currency, an international agreement 
 for bimetallism, the free coinage of silver by the 
 United States, all sorts of solutions of the present com- 
 plicated situation, find their advocates in the public 
 prints. Tons of books and acres of newspaper pages 
 have been filled with the arguments in favor of the 
 ideas of their writer^. r^Eur&ermore, to prove that all 
 this is not entirely wasted effort, such books are bought 
 and read in large numbers, and newspapers find no 
 more popular subject for editorial and news columns 
 than the financial questions. The growth of this senti- 
 ment of interest has been gradual through the last few 
 years, while other questions were holding paramount 
 position in the minds of the people. But all at once 
 there came a wave of awakening to the present impor- 
 tance of currency systems and their relation to the 
 everyday prosperity of the country, and discussion be- 
 gan to multiply almost in geometrical ratio. It was 
 necessary to feed the enormous demand for informa- 
 tion, and t!:e flood of books, pamphlets, and papers was 
 the natural consequence. 
 
 In all this mass of literature there has been one lack. 
 No single work has been available to the student who 
 
 (5) 
 
f PREFACE. 
 
 sought a fair presentation of both sides of the question 
 at issue. With a recognition that this was an omission 
 which ought to be filled, the present work was planned 
 and brought into the form which it now takes. To 
 give between one pair of covers the basic principles of 
 each recognized school of currency economists, and the 
 arguments in favor of them was one portion of the 
 plan. To have these principles and arguments pre- 
 sented by the most eminent advocates on either side, 
 who should bring to their writings years of study and 
 experience and fame sufficient to entitle their utter- 
 ances to respect as the best interpretations of their 
 views, was the remainder of the plan. It was believed 
 that these eminent men, statesmen, economists, finan- 
 ciers, would respond to such an idea ; that they would 
 welcome such a proper means of placing needed infor- 
 mation before an enquiring public seeking knowledge 
 enabling them to form proper judgment ; that they 
 would recognize the importance of a fair presentation 
 of the questions at issue in the receptive and inquiring 
 state of the public mind ; and that they would be glad 
 to assume a portion of the labor of making such a dis- 
 cussion accessible to many readers. There was no dis- 
 appointment to follow. The most eminent men in the 
 United States, famous in all walks of life which would 
 bring them into familiarity with these financial ques- 
 tions, responded with hearty interest. The result is 
 the volume offered herewith. Its contents have been 
 supplied by senators and representatives in congress, 
 by governors, by economists in private life, by great 
 editors, by college professors, by bankers, by theorists, 
 and by practical men. Credit must be given for the 
 courtesy of the Chicago Record which enabled the use 
 
 
PREFACE. f 
 
 of certain articles included in a discussion carried on 
 through the columns of that paper, by many eminent 
 advocates on either side of the financial debate. 
 
 Every phase of the question is here presented, in 
 fullness of detail, comprehensively, and clearly. The 
 opinions of our great men are side by side and may be 
 weighed one against another. The argumeucs which 
 they advance are presented in fair competition with 
 one another, and each may stand or fall by its merits. 
 The result is that every reader who seeks to know what 
 is the right solution of the problem that meets him, 
 rather than the mere fortifying of himself in an opinion 
 previously formed, has here the material wherewith to 
 form an opinion that he may defend, from full and 
 careful study of all opposing views. 
 
 The whole object then, in the making of the book, 
 has been to furnish a full exposition of the financial 
 questions under discussion, giving the views and ar- 
 guments of the leaders in the conflict, partisan and 
 non-partisan. But in the selection and editing of mat- 
 ter, in the compilation of the contributions, partiality, 
 partisanship, the influence of editorial opinion have had 
 no place. The result is that for the first time a thor- 
 oughly disinterested presentation of the whole subject 
 is made accessible. If it fills a portion of the need 
 which it is intended to fill, enabling any inquirer to de- 
 cide for himself what position he should take, as a man 
 and a citizen, it will have fulfilled its object. 
 

 TABLE OF CONTENTS. 
 
 PAGE 
 
 INTRODUCTION ....... 13 
 
 CHAPTER I. 
 THE HARVEY-LAUGHLIN DEBATE ... 23 
 
 CHAPTER II. 
 BY SENATOR JOSEPH N. DOLPH, OF OREGON . . 86 
 
 CHAPTER III. 
 BY SENATOR GEORGE G. VEST, OF MISSOURI . . 124 
 
 CHAPTER IV. . 
 BY SENATOR GEORGE F. HOAB, OF MASSACHUSETTS . 166 
 
 CHAPTER V. 
 BY SENATOR JOHN SHERMAN, OF OHIO . . . 204 
 
 CHAPTER VI. 
 THE SCIENCE OF MONEY. BY SENATOR WM. M. STEWART, 
 
 OF NEVADA ....... 225 
 
 CHAPTER VII. 
 BY SENATOR WM. B. ALLISON, OF IOWA . . .241 
 
 CHAPTER VIII. 
 BY HON. J. STERLING MORTON, SECRETARY OF AGRICULTURE 267 
 
 CHAPTER IX. 
 BY HON. JOHN DALZELL, OF PENNSYLVANIA . . 269 
 
 CHAPTER X. 
 PRESIDENT CLEVELAND'S LETTER .... 280 
 
 CHAPTER XL 
 WILLIAM J. BRYAN'S REPLY . . .285 
 
 CHAPTER XII. 
 BY SENATOR JULIUS C. BURROWS, OF MICHIGAN . . 291 
 
 CHAPTER XIII. 
 BY HON. ELIJAH A. MORSE, MASSACHUSETTS . . 299 
 
 CHAPTER XIV. 
 
 THE FALL OF PRICES THE CAUSE AND THE CURE. BY 
 PRESIDENT E. BENJAMIN ANDREWS, OF BROWN UNI- 
 VERSITY ....... 301 
 
 CHAPTER XV. 
 THE BANKING PRINCIPLE. BY EDWARD ATKINSON . 331 
 
10 CONTENTS. 
 
 CHAPTER XVI. 
 BY HON. CH^S. FOSTER, OF OHIO, EX-SECRETARY OF THE 
 
 TREASURE . . . . . , .353 
 
 CHAPTER XVII. 
 BY SENATOR FRED. T. DUBOIS, OF IDAHO . . .359 
 
 CHAPTER XVIII. 
 
 BY MURAT HALSTEAD, EDITOR OF THE BROOKLYN STAND- 
 ARD-UNION ....... 365 
 
 CHAPTER XIX. 
 BY EX-GOVERNOR HORACE BOIES, OF IOWA c . 372 
 
 CHAPTER XX. 
 
 BY COLONEL A. K. MCCLURE, EDITOR OF THE PHILADEL- 
 PHIA TIMES ...... 375 
 
 .CHAPTER XXI. 
 BY MORRIS M. ESTEE, OF CALIFORNIA . . .377 
 
 CHAPTER XXII. 
 BY JAMES H. ECKELS, COMPTROLLER OF THE TREASURY . 399 
 
 CHAPTER XXIII. 
 
 NATIONAL CURRENCY AND BANKING SYSTEM. BY WIL- 
 LIAM P. ST. JOHN, PRESIDENT OF THE MERCANTILE 
 NATIONAL BANK, NEW YORK . . . .409 
 
 CHAPTER XXIV, 
 
 A SYSTEM OF CURRENCY. BY E. S. LACEY, Ex-U. S, COMP- 
 TROLLER ..... . 429 
 
 CHAPTER XXV. 
 SlLVEfc AND THE BANKS, BY L.YMAN J. GAGE, PRESIDENT 
 
 OF THE FIRST NATIONAL BANK, CHICAGO . . 437 
 
 CHAPTER XXVI. 
 BY SENATOR W. A. PEFFER, OF KANSAS . . . 442 
 
 CHAPTER XXVII. 
 BY E. ROSEWATER, EDITOR OF THE OMAHA BEE . . 468 
 
 CHAPTER XXVIII. 
 BY JOHN G. CARLISLE, SECRETARY OF THE TREASURY . 480 
 
 CHAPTER XXIX. 
 CARLISLE'S SPEECH CRITICISED. BY BENJAMIN R. TILL- 
 
 MAN, EX-GOVERNOR OF SOUTH CAROLINA . 515 
 
 CHAPTER XXX. 
 
 SlLTER IN THE CONSTITUTION. BY J. B. CHEADLE, EX- 
 
 CONGRESSMAN FROM INDIANA .... 535 
 
 CHAPTER XXXI. 
 BY HON. JOSEPH C. SIBLEY, OF PENNSYLVANIA . , 543 
 
LIST OF ILLUSTRATIONS. 
 
 PAftl 
 
 TRUMBULL WHITE Frontispiece. 
 
 THE KNIGHTS AND THE SHIELD . . . . .19 
 
 WILLIAM H. HARVEY 38 
 
 HENRY M. TELLER 55 
 
 JOSEPH N. DOLPH 74 
 
 RICHARD P. BLAND 91 
 
 GEORGE G. VEST 110 
 
 DAVID B. HILL 127 
 
 ARTHUR P. GORMAN . . . . 146 
 
 CHARLES F. CRISP 163 
 
 JOHN P. JONES 182 
 
 JOHN SHERMAN ........ 199 
 
 WILLIAM M. STEWART 218 
 
 WILLIAM B. ALLISON 235 
 
 J. STERLING MORTON 254 
 
 GROVER CLEVELAND 271 
 
 WILLIAM J. BRYAN 290 
 
 JULIUS C. BURROWS . .... 307 
 
 FRED. T. DUBOIS 326 
 
 HORACE BOIES 343 
 
 JAMES H. ECKELS 362 
 
 WILLIAM A. PEFFER 379 
 
 BENJAMIN HARRISON 398 
 
 THOMAS B. REED 415 
 
12 LIST OF ILLUSTRATIONS. 
 
 WILLIAM McKiNLEY ...... 434 
 
 LEVI P. MORTON ....... 451 
 
 ROBERT T. LINCOLN 470 
 
 STEPHEN B. ELKINS 487 
 
 CHAUNCEY M. DEPEW 506 
 
 JOHN G. CARLISLE 523 
 
 BENJAMIN K. TILLMAN 530 
 
 JOSEPH C. SIBLEY . . . 539 
 
AN INTRODUCTION AND A LEGEND. 
 
 A CHAPTER written to introduce a discussion such as 
 the one which fills this volume can have but an unim- 
 portant function to perform, if it preserves the im- 
 partiality which is the measure of the real value of the 
 work. It cannot elucidate the primary truths about 
 the currency question, on which the adherents of all 
 schools agree, for there are practically none such, even 
 as primary as the definition of money itself. It can- 
 not relate the history of money in the world, for the 
 dispute begins with the beginnings of this history. It 
 cannot even do much toward outlining the creation of 
 our original monetary system, on the progress of legis- 
 lation on financial questions in our own country, be- 
 causo it is on these very historical facts themselves that 
 most pronounced differences arise. Almost all that 
 can be done is to indicate something of the present 
 supreme interest which the subject has created, and 
 something as to the form which the discussion here 
 has taken. When that is done, the reader will very 
 properly prefer to turn to the arguments that bear 
 directly on the case in dispute. 
 
 The silver question has practically supplanted the 
 tariff question in public interest and discussion. The 
 financial stringency which began to make itself gener- 
 ally felt in 1893, and from which the country was so 
 slow in recovering, caused every thoughtful man to seek 
 An explanation of the condition, and finding the reason 
 
14 AN INTRODUCTION AND A LEGEND. 
 
 of the condition, to seek a remedy for future crises ot 
 the same sort. The result was the wonderful spread 
 of discussion on financial questions, the agitation for, 
 and the oppposition to the free coinage of silver by the 
 United States, at a ratio to gold of 16 to 1 in weight. 
 Of course the same questions had aroused widespread 
 interest for generations before. No one who knows the 
 history of our country can suggest that interest in oar 
 financial system and the legislation which has created or 
 changed it is a new thing. With the memory of warm 
 discussions and prolonged ones in every session of con- 
 gress for many years, over these or similar contro- 
 versies; the introduction of new forms of legislative 
 enactment, nearly as often; and the utterances in every 
 political platform, state or national, on the currency 
 question, it cannot be said that the matter has been left 
 in abeyance, and not been brought to the attention of 
 the public at large. The record of the last half 
 century of United States history is full of the 
 chronicles of widespreading waves of popular senti- 
 ment on political and economic and moral questions, 
 some of them having the dignity and strength of a 
 concerted movement, enlisting in their ranks men of the 
 highest character and ability; others failing to mani- 
 fest such strength, and so losing their importance. 
 
 Some of these movements have been financial. The 
 place to classify the present discussion of the silver 
 question varies according to the point of view from 
 which the observer looks. But few fair men fail to 
 acknowledge that the causes of free coinage of silver, 
 international bimetallism, and gold monometallism 
 have each enlisted in their service men of worth and 
 might in learning, in statesmanship, in eloquence, in 
 
AN INTRODUCTION AND A LEGEND. 15 
 
 fame, in honesty, and in genuine regard for the wel- 
 fare of all people, in the future as well as in the present. 
 This fact should make possible the freest and fullest 
 discussion of the subject from every point of view, 
 without rancor or any stronger feeling than desire to 
 attain the right. Such discussion has indeed become 
 full and free, but unfortunately there has arisen that 
 very feeling which is to be regretted, and sectional 
 pride or sectional interest have been sought to array 
 themselves under one or the other banner in unanimity. 
 The discussion which has become so general, and which 
 finds one of its expressions in the present volume, is of 
 course but the successor of less general discussion main- 
 tained for many years. But in its recent form it is 
 really young, and so far as the explosive interest which 
 has been awakened throughout the central, western, 
 and southern states is concerned-, among people, hun- 
 dreds of thousands, or even millions of them who are 
 not always active to study the economic question at is- 
 sue, its age is almost coincident with the present de- 
 cade. Every year until 1895, the year of writing, has 
 seen a multiplied increase in the territorial as well as 
 the numerical extent of the agitation, and the larger 
 public of the eastern and northeastern states are 
 scarcely yet aroused to a realization that something of 
 imperative importance is occurring. 
 
 One book written in popular style and sold &t a pop- 
 ular price has so much impressed the people who are 
 interested in the questions at issue, that not otily have 
 there been sold of it approximately one million copies 
 within less than two years, but it has commanded the 
 attention of writers on the opposing side to such an 
 extent that at least half a dozen books have been 
 
16 AS INTRODUCTION AND A LEGEND. 
 
 written with the avowed object of rebutting its argu 
 ments, and hundreds of newspaper editors devote space 
 in their columns to controverting or sustaining the asser- 
 tions made in it. There is no argument necessary to 
 prove that public interest justifies, and the lack of such 
 a work demands a book which shall within the limits 
 of one volume give in convenient form the arguments 
 on all sides of the controversy, as presented by the 
 strongest and most eminent of the advocates. 
 
 The city of Chicago has become the center of the 
 contest. This is partly because of its location, and 
 partly because of its population. Standing as it does 
 in the practical commercial center of the United States, 
 the largest of the inland cities, its situation makes it 
 easily accessible to the people of all parts. It is in 
 touch with the west and south, as truly as with the 
 east and northeast, and between these divisions, to some 
 extent, have the lines of battle been fixed. Its popula- 
 tion contains representatives of all sections. Its com- 
 merce is quick to feel any movement which touches 
 commercial interests. Its newspapers are enterprising 
 and quick to give space to questions and discussions of 
 rising interest. It is the publishing center for many 
 books dealing with this and all other questions of great 
 or small interest. These things must explain why in 
 the discussions that are to follow, citizens of Chicago 
 seem to have a peculiarly large share in the arguments. 
 They have been peculiarly active and interested, to 
 study and write, and their matter has but its just and 
 proper proportion of space. The opening discussion 
 of the volume is one of the most important verbal pres- 
 entations of the whole subject that has been made at 
 any time. Immediately following it, are placed several 
 
AN INTRODUCTION AND A LEGEND. 
 
 speeches which were made in the United States 
 during the discussion of one of the most important 
 measures of recent years, in each case furnished directly 
 for this volume by the senators whose names they bear, 
 who selected them as in each case being the presenta- 
 tion of the subject which the senator would now choose 
 to make for public reading. From that point in this 
 volume, the contributions are arranged in such a way 
 ae to make what seems the fairest presentation of both 
 sides. Some of the writings are made directly in an- 
 swer to others, while some are entirely independent of 
 any matter adjoining. There is no alternate arrange- 
 ment, placing first the views of an adherent of one 
 school and then of the other, but each is here on its 
 own merits, placed where seems most appropriate to the 
 harmony of the whole. That the result may be the 
 clarifying of the economic atmosphere through which 
 many sincere, honest, and unsettled inquirers are look- 
 ing for light, to enable them to make a proper decision 
 as to their own course, seems not an unreasonable hope. 
 It is necessary to concede honesty of intention and 
 purity of motive to every writer here, or else to pass 
 him by as unworthy of a place. 
 
 Once upon a time, so the legend runs, a shield hung 
 at the side of a highway, along which knights were 
 wont to journey as they rode to tourneys and to jous 
 ting-meets. It was so swung from its support that one 
 side of the shield looked down the highway to the east, 
 and the other side, as would naturally be the case, 
 looked westward. On a certain fair morning in spring, 
 as the sun was rising over the eastern hills, two knights 
 armed cap-a-pie, with lances in rest and visors raised 
 came near to one another down the road. One of the 
 
18 AN INTRODUCTION AND A LEGEND. 
 
 knights was dressed in chain armor of silver links, and 
 was mounted on a beautiful white charger, which seemed 
 to share his rider's spirit and bravery The other knight 
 was clothed in gold mail, and proudly sat upon a fiery 
 steed of ruddy chestnut hue, almost golden in its bright- 
 ness. And the golden knight approached from the 
 eastward, to meet his fellow, friend or foe as time would 
 tell. 
 
 " Good morrow, sir knight," said the one of gold, " it 
 is a fair and bright morning while we ride. When ye 
 pass to this side of the swinging shield, fail not to turn 
 and look how yonder sun reflects from its golden face, 
 and dazzles the inquisitive eye that would read its 
 scription and admire its skilful carving. A stranger 
 knight am I to this highway. Can ye tell to me the 
 reason why the shield hangs here ? " 
 
 " By my halidome," quoth the other, " I cannot tell, 
 most courteous knight, why hangs the shield. But 
 sure am I your eyes do play you treason in the sunlight's 
 glare. For silver is it, silver as my armor here, and ex- 
 quisitely bossed and graven. Come where I stand, and 
 see the silver shine." 
 
 "Now do you mock me, sirrah," said the first. 
 " Know I not gold from silver in the gun ? Do I not see 
 with eyes that, never failed ? Is not the sun itself in 
 thine, and but reflected rays, not half so strong, in 
 mine? Is it the part of stranger courtesy to thus 
 dispute, when meeting other strangers on the way ? I 
 close my visor to a face so false I " 
 
 And saying thus, the golden knight, with scornful 
 mien, moved forward to pass on. 
 
 "Hold!" cried the silver one, with face aflame. 
 " No man shall call me false I A knight I am, of honor 
 
AN INTRODUCTION AND A LEGEND. 21 
 
 proven well, in many a tourney, fought in many lands 
 Raise now your lance atilt, and ride ye hard, or you 
 shall roll, full-armored, in the dust." 
 
 Then rode they fast together, and the shock, when 
 under that fair shield they met, was fierce. Again 
 they turned and rode, again they met. They fought 
 until their lances broke in twain. They fought with 
 swords, when lances failed them both, till chargers 
 tired and faltered in the meeting. They fought on 
 foot with sword and then with mace. They fought till 
 morning passed, and noon, with raging heat, exhausted 
 them the more. They fought throughout the quiet 
 afternoon, beneath that swinging shield above their 
 heads. And when the sun was sinking in the west, 
 illuming now the other shining side, both fell there in 
 the highway where they fought, wounded, exhausted, 
 spent of blood, and dying. As these two knights had 
 met in battle shock, they wavered forward now and 
 then drew back, crossing the line that marked the 
 shield's position, and shifting often each his own at- 
 tack- So when they fell, it happened that the knight 
 of gold was lying farther to the west, and he of silver 
 on the eastern side. And each knight raised his eyes 
 to see the shield whose metal face had forced him to a 
 fight. Then he of silver cried aloud, amazed, " What 
 do I see ? A shield of gold it is." And he of gold in 
 wonderment replied, " Now silver is it, or I am de- 
 ceived." 
 
 Then struggled they from where they fallen were, 
 despite their wounds, their weakness, and their pride, 
 each to his former point of view again. And when 
 they realized what was the truth, they lifted up their 
 voices loud and wept, that such a fight should be, and 
 2 
 
22 AN INTRODUCTION AND A LEGENIX 
 
 such a fate, for gallant knights to face when both were 
 right in part and both were wrong. Then talked they 
 of their early lives, and found by strange adventure 
 that they two were brothers. One mother had they, 
 but their lives had been apart from early childhood, 
 and their paths had spread until they met again on this 
 sad day. 
 
 The shield that hung above their knightly heads, as 
 hand in hand they waited thus, and died, was golden 
 on the side that faced the east. The western side was 
 silver. 
 
SILVEE AND GOLD 
 
 CHAPTER I. 
 
 THE HARVEY-LAUGHLIN DEBATE. 
 
 OF all the spoken arguments on opposing sides of 
 the currency question during the early months of 1895, 
 the one which it seems proper to name as the most im- 
 portant was the Harvey-Laughlin debate of May 17. 
 For three hours during that evening these eminent 
 advocates disputed before an audience composed of the 
 most prominent men of Chicago, and many of national 
 fame from other cities. Leading business men, bank- 
 ers, economists, clergymen, and educators were there, 
 readjr to hear the views which they approved, or be 
 convinced if facts of sufficient weight to controvert 
 previously formed opinions were presented to them. 
 For more than a week challenges, counter challenges, 
 and preliminary negotiations were in progress, and 
 when at last it was announced that the Illinois club 
 had completed arrangements for the debate, public in- 
 terest was thoroughly aroused, and applications for 
 seats poured in by the thousand. 
 
 The personality and prominence of the two dispu- 
 tants were the cause of much of the interest which 
 arose. William Hope Harvey, who championed the 
 cause of the free coinage of silver, is the author of 
 
 (28) 
 
24 SILVER AND GOLD. 
 
 " Coin's Financial School," the little book which has 
 set the west on fire with interest in the fight. From 
 him was to be expected the most convincing presenta- 
 tion of the arguments in favor of his position that 
 could be found anywhere, ifcs unpretentious little 
 volume, but one out of several which he had written 
 in the same service, has roused attention in the columns 
 of almost every paper in the land, and editorials sus- 
 taining or controverting it are constantly offered to the 
 public. Prof. J. Laurence Laughlin holds the chair of 
 political economy in the great University of Chicago, 
 and commands attention whenever he speaks on econo- 
 mic questions. To this educational work he brought 
 practical experience gained in a business career before 
 be began his professional life. His works on the cur- 
 rency question are known wherever the question arises, 
 and he is recognized as a leading authority for the 
 views of those who maintain opposition to the free 
 coinage of silver. At the time of this debate, Prof. 
 Laughlin was contributing to one of the leading daily 
 newspapers of Chicago, an editorial article each day, in 
 which he was taking up the chapters in " Coin's Finan- 
 cial School," seriatim, and answering them in turn. 
 The disputants were therefore well matched. 
 
 The question to be discussed was put in the follow- 
 ing form: 
 
 Resolved, that the United States should at once 
 enter upon the free coinage of silver, at the ratio of 16 
 to 1, independently of the action of any other nation. 
 
 Of course Mr. Harvey maintained the affirmative of 
 this proposition, which was negatived by Prof. Laugh> 
 lin. It was a feast of logic and a flow of statistics. 
 The wall behind the platform was covered with charts 
 
THE HARVEY-LAUGHLIN DEBATE. 25 
 
 and diagrams used by Professor Laughlin in illustra- 
 ting his arguments relating to the relative production 
 and quantity of gold and silver in the world, the prices 
 of cereals and cotton and wages at various periods, and 
 other statistical information relating to the subject 
 under discussion. 
 
 It was 8:15 o'clock when a vigorous clapping of 
 hands announced the entrance of the two distinguished 
 disputants, Messers. Laughlin and Harvey, escorted by 
 President H. M. Thomas. As they ascended the plat- 
 form there was a renewal of applause. President 
 Thomas seated the speakers, Mr. Harvey on his right 
 and Professor Laughlin on his left. President Thomas 
 at once stated the object of the meeting, and introduced 
 Mr. Harvey in the following brief manner : 
 
 " There is probably no question at the present day in 
 which there is such widespread interest, such general 
 study and thought as that of the financial problem. 
 Among the many conflicting views and statements 
 which are presented for our consideration there appears 
 to the uninitiated an almost hopeless mass of statement 
 of facts and of theories. In this dilemma the Illinois 
 Club is pleased to welcome to its rooms two distin- 
 guished students of finance, Professor Laughlin, on my 
 left, of the Chicago University, and William H. Har- 
 vey, on my right, well known as a writer. Mr. Harvey 
 will open and will have one hour, if he so desires. Pro* 
 fessor Laughlin will follow with one hour, if desired. 
 Mr. Harvey's rejoinder will be limited to fifteen min- 
 utes, Professor Laughlin's rejoinder to fifteen minutes, 
 and the closing remarks by Mr. Harvey be limited to 
 five minutes. It is my pleasure and privilege to pre- 
 sent to you William H. Harvey, who will discuss the 
 
*0 SILVER AND GOLD. 
 
 affirmative of this question." In his addres/s Mr. Har 
 vey said : 
 
 " Mr. President, Members of the Illinois Club and 
 Gentlemen : When accepting the invitation of your 
 committee I had hoped that this discussion would be 
 on fundamental principles and facts, thus educational 
 in its character, and later on, when better informed as 
 to these, we would reach the remedy. I felt also a 
 keen desire to get at Professor Laughlin on the unit of 
 value existing prior to 1873 and the "crime" of that 
 year, two points on which he has been misleading the 
 readers of The Times-Herald. But he has seen fit to 
 decline a discussion of those two questions, and we are 
 to-night to take up the remedy the last question cov- 
 ered by this controversy. 
 
 " The first reason why I am in favor of independent 
 action by this country is that we should riot be sub- 
 jected to the influences of the governments of Europe. 
 When our forefathers declared their political independ- 
 ence from Europe it was to free themselves from the 
 class legislation of those governments, justly termed 
 plutocracies. If the people can be reduced to poverty 
 and the prosperity of the United States can be ruined 
 by hanging to the financial policy of Europe, then we 
 can be reduced to the same condition by financial legis- 
 lation as a war of conquest would reduce us. 
 
 " Our friends the monometallists say : We admit bi- 
 metallism would be good if we could get international 
 bimetallism. In other words, they agree that there is 
 something radically wrong, but claim that we are tied 
 to the financial policy of Europe. So that, if a war of 
 conquest in this country by the monarchies of Europe, 
 whose form of government is different from ours, 
 
THE HARVEY-LAUGHLIN DEBATE, 27 
 
 would reduce us to the condition that the people of 
 those governments are in, and they can accomplish the 
 same purpose by financial legislation, then there is a 
 necessity for independent action. 
 
 " Where there is a necessity there is a remedy. Sup- 
 pose you were to say to a man of common sense, ' We 
 are compelled to adopt the financial policy of Europe ; f 
 and he replied, 4 The country is going to wast and 
 ruin, and desolation is spreading from ocean to ocean/ 
 and demonstrates that the cause of it is our adoption 
 of the financial policy of Europe and we say back to 
 him: 'It makes no difference, we are compelled to 
 adopt the financial policy of Europe.' This answer 
 would not be acceptable to the hard-headed citizen of 
 this country. The governments of Europe are plutoc- 
 racies. They squeeze the lemon for the people about 
 every so often. The few control class legislation and 
 the masses are hewers of woods and drawers of water 
 for the titled few. Like the farmer who goes out and 
 robs the bees' nests, they rob the people and then give 
 them time to fill the nest again before going out to rob 
 it again. 
 
 "We have certainly sot forgotten the history giv- 
 ing the reasons why our forefathers established this 
 government and that was the reason. Now, if finan- 
 cial legislation is one of the classes of class legislation 
 by which the many are robbed and the few are en- 
 riched, by which the lemon is squeezed, then it is one 
 of the institutions of the European governments that 
 we, as a nation of people, republican in form, should 
 declare our independence of. That is the first reason 
 why independent financial action should be taken by 
 the United States. 
 
28 SILVER AND GOLD. 
 
 "If they say, * We must have the same money that 
 they have in order to carry on business with them,' 
 my reply is, * That the biggest business we ever did 
 carry on with the balance of the world, and particu- 
 larly Europe, was the time when they had gold and sil- 
 ver as money and we had neither.' It is one of those 
 peculiar arguments that wears its way into a man's 
 brain when reiterated and monotonously given out by 
 the daily press that we must have the same money 
 that the other great commercial nations have. We 
 never stop to investigate. It belongs to that catalogue 
 of arguments that existed prior to 1492, when a ma- 
 jority of the people of the world said that the world 
 was flat and a few men, including Columbus, contended 
 that it was round. 
 
 " Those interested in purposely cultivating through 
 ages an international money on lines marked out by 
 them have the same possession of the public mind as 
 the critics of Columbus had, and those who contend 
 for financial independence from Europe can be classed 
 with the followers of that great navigator, whose minds 
 were in advance of the age in which they lived. 
 
 " This nation can have an independent financial 
 system without any reference whatever to the balance 
 of the world, and can carry on its own commerce by 
 ocean and by land with the other governments of the 
 world notwithstanding. We do not now settle our 
 balances with Europe in coin except on its commercial 
 value and by weight. Our coinage has nothing to do 
 with it. Primarily balances of trade are settled with 
 trade. We give them our wheat and we take their 
 silks, and the balance that we may owe them or they 
 may owe us will be settled just as merchants between 
 
THE HARVEY-LAUGHLIN DEBATE. 29 
 
 the importing points may agree to settle it. They can 
 settle it in gold for so much a pennyweight as measured 
 in the money of their country or our country, or in so 
 much silver or in so much copper, or so much of any 
 other merchandise as may be agreed upon between 
 them in their trade relations. 
 
 " There is no such thing as an international money. 
 So that when a merchant in London who has goods, 
 and vice versa with a merchant in New York, finds at 
 the end of six months that the merchant in New York 
 owes the merchant in London $50,000 as measured in 
 the American coin, whatever it is, and they have an 
 understanding by which the New York merchant is to 
 settle those balances, and it may be in wheat or it may 
 be in cotton that the contract would be settled, any- 
 thing that would be in a general way agreed upon : but 
 gold or silver, irrespective of how much we were coin- 
 ing of it as money, could be agreed upon. So that in 
 the beginning of a study of this question that point 
 can be made clear to the mind of any man who does his 
 own thinking. 
 
 " You cannot meet arguments that are purely theo- 
 retical, such as a man proving to another that a cat has 
 three tails. He proves it this way : No cat has two 
 tails and one cat has one more tail than no cat, there- 
 fore one cat has three tails. Profound theorists on the 
 other side of this question are not especially fond of 
 this class of reasoning. Growing out of a long-accus- 
 tomed habit, the men who have studiously cultivated 
 class legislation for their benefit have impressed the 
 common masses with certain apparent fixed principles, 
 which they are not to be controlled by, and one of 
 them is necessity of international money, just as they 
 
SO SILVER AND GOLD. 
 
 have made you believe that national bank money was 
 necessary. 
 
 " Now, the reason behind that is this : They can go 
 to Washington and hypothecate their bonds, draw their 
 interest thereon ; get a loan on these bonds to 90 
 per cent, of their face value, without paying any in- 
 terest, to loan it to you at from 7 to 12 per cent. 
 That is a special privilege. And we have learned not 
 to blame people for doing these things. But we should. 
 It should be a common country, conducted for the 
 benefit of all the people. 
 
 " What we are contending for is the opening of the 
 mints to the free coinage of silver (they are now open 
 to the free and unlimited coinage of gold, and have 
 never been closed to that metal), and the establishment 
 of bimetallism on those simple and fixed principles that 
 were adopted by those statesmen who had in view the 
 interest of no class, but of all the people. 
 
 44 What we want is bimetallism, and scientific bimet- 
 allism is this : 
 
 44 1. Free and unlimited coinage of both gold and sil- 
 ver; these two metals to constitute the primary or re- 
 demption money of the government. 
 
 44 2. The silver dollar of 371J grains of pure silver to 
 be the unit of value, and gold to b coined into money 
 at a ratio to be changed if necessary from time to time 
 if the commercial parity to the legal ratio shall be 
 affected by the action of foreign countries. 
 
 44 3. The money coined from both metals to be legal 
 tender in the payment of all debts. 
 
 "4. The option as to which of the moneys 'is to 
 be paid in the liquidation of a debt to rest with the 
 debtor, and the government also to exercise that 
 
THE HARVEY-LA UGHLIN DEBATE. 81 
 
 option when desirable when paying out redemption 
 money. 
 
 " The mints are now open to the unlimited coinage 
 of gold. Such portion of the product of that metal as 
 does not find an immediate demand to be used in the 
 arts and manufactures is taken to the mints and coined 
 into money into money and becomes at once the 
 object for which all other products seek the market. 
 It thus has an unlimited market, as the mints are open 
 to all of it that comes. 
 
 "This was true also as to silver prior to 1873, but 
 by operation of section 21 of the act of that year the 
 mints were closed to the unlimited coinage of that 
 metal. Hence, when silver now seeks the market and 
 exhausts the demand supplied by the arts and manu- 
 factures and the small purchases of the government to 
 coin it into token money, the demand for it ceases. 
 Gold has an unlimited demand. Silver has a limited 
 demand. Silver is now a commodity to be measured 
 in gold. It is an object to be gored and kicked by 
 bulls and bears. It is shut out from the United States 
 mint. It is token money. It has been deprived of 
 that unlimited demand it enjoyed prior to 1873. 
 
 "We would restore to it that unlimited demand. 
 We would open the mints to it again. We would 
 leave the mints open to gold as they are now. We 
 would give silver the same privileges as gold. Restor- 
 ing to it this unlimited demand would cause the value 
 of silver to rise as compared with gold. This is what 
 we want. This is what we would do. 
 
 " We would again make the standard silver dollar 
 the unit of value, as it was before 1873. It would 
 thus be a dollar, and the bullion in it would be worth 
 
32 tflLVEB, AND CfOLD. 
 
 a dollar, as the number of grains of bullion in a dollar 
 would have the right to walk into the mint and be 
 coined into a dollar. No man would take less for it 
 when he could have it coined at pleasure into a dollar. 
 We would make gold coins of the value of so many 
 silver units or dollars, as the law existed prior to 1873. 
 
 " Silver is the people's money. It was so regarded 
 by our forefathers, and was the favored metal of the 
 two. It was given the position of honor in the coinage 
 of our two metals by having the unit of value made 
 from it, and gold, its companion metal, measured in it. 
 Gold was and is the money of the rich. This was to 
 be a government of the people, and the people's money 
 was to be the most favored. Twice when the commer- 
 cial ratio between the two metals made it advisable to 
 change the legal ratio, the change was made by recoin- 
 ing the gold coins. This was in 1834 and 1837. The 
 spirit of our forefathers then lived in their sons. The 
 gold coins were changed in weight and size. In 1834 
 the gold eagle had twelve grains taken out of it. In 
 1837 the gold eagle had two-tenths of a grain added to 
 it. No change was ever made in the quantity of pure 
 silver in the silver unit. There were to be no two 
 yardsticks. The rich man's money, gold, was recoined 
 when the commercial ratio changed to interfere with 
 the legal ratio. This is the law we would re-enact. 
 
 " We would make both legal tender in the payment 
 of all debts. We would repeal the law of 1873 and 
 the Sherman law of 1890 authorizing contracts (bonds, 
 notes and mortgages) to be taken payable in gold only. 
 We would allow no discrimination to be made between 
 the legal tender character of the two metals. We 
 would allow no private individual to dictate to the 
 
THE HARVEY-LAUGHLIN DEBATE. 33 
 
 government what its legal tender money should be. 
 We would place the white metal on an equal footing 
 with the colored metal without regard to previous con- 
 dition of race or servitude. 
 
 " We would give the option to the debtor, if there 
 was any preference as to which of the two he would 
 use in the payment of a debt. A break in the com- 
 mercial parity causes the cheaper metal to be used. 
 This increases the demand for the cheaper metal. 
 This increased demand restores the value of the metal 
 that had thus fallen below a parity and brings it back 
 to parity. To give the option to the creditors causes 
 the dearer metal to be demanded, and it thus grows 
 dearer and dearer, and a parity is permanently broken 
 and the gap grows wider and wider. When the debtor 
 has the option the two metals will oscillate close to a 
 parity and substantially at a parity. This oscillation 
 is the elasticity that bimetallism gives to primary 
 money. If one becomes scarce the other is used. If 
 one is cornered the other takes its place. Either an* 
 s \vers for money. 
 
 " A true knowledge of bimetallism and the simplic- 
 ity of that system died with our ancestors. Selfishness 
 stalked into the American congress at a time when 
 neither metal was being used as a primary money 
 our primary money was then paper money. At a time 
 when corruption was rife in our national legislature, 
 followed by articles of impeachment against Vice- 
 President Colfax for complicity in the Oakes Ames 
 affair, the resignation of Secretary of War Belknap 
 for bribery, the charge of corruption against numerous 
 congressmen in connection with the Credit Mobilier 
 scandal and land grant swindles. 
 
84 SILVER AND GOLD. 
 
 " At a time when statesmanship was dwarfed in per- 
 sonal selfishness men who knew what the effect of such 
 a change in our financial policy meant organized sue. 
 cessfully the first trust to be benefited by national leg- 
 islation in this country. It was a money trust. It 
 was the demonetization of silver. The money of the 
 people was destroyed. Silver at that time was at a 
 slight premium over gold. 
 
 " By this act the mints were closed to the unlimited 
 coinage of silver, except the trade dollar, which was 
 overvalued by eight grains and intended only for ex- 
 port to China, and it was shut off by the act of 1876, 
 except as the secretary of the treasury might permit it 
 to be coined. 
 
 "Silver had then begun to fall, as measured in gold, 
 and the breach in the commercial parity of the two 
 metals, as was natural, gradually widened. With re- 
 sumption gold asserted its importance and silver corre- 
 spondingly declined. Under the Bland-Allison act of 
 1876 creditors began to make their notes, bonds and 
 mortgages payable in gold to the exclusion of all other 
 forms of legal tender money. This increased the de- 
 mand for gold. Silver had ceased to be primary 
 money. It had taken a place with nickel and copper 
 as token money, all redeemable directly and indirectly 
 in gold. That elasticity which the alternate use of 
 silver with gold, that true bimetallism, gave to our pri- 
 mary money was now absent. If the demand for gold 
 became too great to supply the normal needs of pri- 
 mary or redemption money, there was nothing to take 
 its place as such. Creditors would demand the dearest 
 metal and the law had given them the right to do so. 
 
 " There was but the one metal to which the mints 
 
THE HARVEY-LAUGHLIN DEBATE. 36 
 
 were open the commercial value of the other metal 
 had been lowered by legal discrimination against it. 
 Gold was carrying the silver just as it is carrying paper 
 money. Silver was not permitted to take the place of 
 gold. 
 
 "If gold was cornered neither the United States 
 treasury nor debtors could put silver in competition with 
 it. They must go to the men who have the gold and 
 get it, and submit to their terms. A corner on beef 
 cannot seriously threaten the health of the people of 
 this nation so long as mutton and pork are in compe- 
 tition with it. A corner on gold could not, as it does 
 now, seriously threaten the credit of this nation if sil- 
 ver was in competition with gold as primary money. 
 
 44 What is the remedy? Shall we follow Mr, Cleve- 
 land and Mr. Sherman and such party leaders any 
 farther ? They have led us into a swamp, and the mire 
 is getting deeper and deeper ; we are sinking in the 
 mud and slush more and more, with an abyss and 
 oblivion beyond. Speaking of these two party leaders 
 reminds me of the good old Methodist woman who was 
 invited by a Presbyterian woman friend to go to her 
 Presbyterian church to hear a Presbyterian preacher. 
 Well, when they got there, they took seats up in the 
 Amen corner, and, to the surprise of the good old 
 Methodist woman, she found that the Presbyterian 
 preacher could preach a real soul-stirring sermon, and 
 she expressed her satisfaction by saying * Amen ! ' 
 This attracted the attention of the Presbyterian dea- 
 cons, and they commenced looking cross-eyed at her. 
 But the sermon grew better and better, and the Metho- 
 dist woman was soon crying 'Hallelujah ! ' The dignity 
 of the Presbyterian deacons was shocked. From cry- 
 
<6 SILVER AND GOLD. 
 
 ing 'Hallelujah' the good old Methodist woman soon 
 got to clapping her hands and shouting. This was too 
 much for the deacons, and two of them took hold of 
 her and, picking her up, carried her out of the church. 
 As they passed clown the aisle with her, she exclaimed. 
 * I cannot stand the honor,' and repeated this state- 
 ment several times, 'I cannot stand the honor/ The 
 curiosity of the old deacons was excited to know what 
 she meant, and, when they put her down in the vesti- 
 bule of the church, they asked her why she had said 
 what she did. She replied : * Christ rode out of Jeru- 
 salem on one donkey, and I have ridden out of this 
 church on two.' 
 
 " Let us have nothing more to do with the men who 
 have assisted in tying the hands of this great nation 
 and delivering its financial policy over to the gold gam- 
 blers of the world. The bank of the Eothschilds in En- 
 gland is now behind the United States treasury. They 
 are our financial agents ; our financial managers. We 
 are paying them the princely salary of $8,000,000 for 
 each six months of their valuable services. It requires 
 special pleading to defend this transaction and the cir- 
 cumstances which have led up to it. You will hear 
 some of that special pleading to-night from the gentle- 
 man who is to follow me. We are now in the hands of 
 the pawnbrokers of Europe. They will take the same 
 care of us that the spider did with the fly. 
 
 " We have very little gold left in this country. We 
 are a debtor nation and our people and corporations 
 are heavily in debt to the people in England, and the 
 interest on what we owe them amounts to, annually, 
 about $250,000,000, payable in gold. They demand 
 gold. The contracts call for it in gold. To pay this 
 
WILLIAM H. HARVEY, 
 
THE HARVEY-LA UGHLIN DEBATE. 39 
 
 we have a balance due us in trade with Europe of about 
 $100,000,000. That leaves $150,000,000 still left to 
 pay them. How do we pay it ? We produce about 
 $40,000,000 in gold yearly. We give them that. This 
 leaves about $100.000,000 still due them. How do we 
 pay it ? Out of the reserve stock of gold. With 
 them getti.ig all our money represented by the bal- 
 ance due us on exports and all our annual production 
 of gold, and $100,000,000 annually from our reserve 
 stock of gold, how long is our reserve stock of gold to 
 last? 
 
 "How are we to replenish it? There is only one 
 way. That is to borrow it from those who have it, and 
 that means England. And that is what we are doing. 
 That means more interest, more gold annually to be 
 paid to England. Where will it end? It means the 
 'dismal swamp ' and 'hell's half acre ' beyond. 
 
 " This is what having a gold standard means. A 
 primary money without the elasticity that two metals 
 give. The rich man's money. A money that is easily 
 cornered ; that can be physically cornered ; cornered in 
 this room all of it all there is in the world. A dol- 
 lar from it is the size of a drop of water, so small that 
 by act of congress of Sept. 26, 1869, its further coin- 
 age has been prohibited. We now have a unit of value 
 so small as to be impracticable for use ; that cannot be 
 coined into money the size of a poor man's transaction. 
 This is not now a poor man's government. 
 
 " How are we to pay these debts to England ? Re- 
 pudiate them ? No ! Robbers' dollars as they are, let 
 us pay them. Result of a conspiracy played on us 
 while we slept, yet let us pay them. If we don't, 
 Lyrnan J. Gage or Russell Sage will say we are dis- 
 8 
 
40 SILVEE AND GOLD. 
 
 honest. They will never say the other fellow ia 
 dishonest. He wears good clothes, looks impor- 
 tant and owns a newspaper. But how are we to pay 
 these debts to England ? It is this way : Restore sil- 
 ver ; put it in competition with gold on a legal ratio of 
 16 to 1. Repeal all laws allowing a discrimination be- 
 tween the two metals ; stop gold notes from being 
 taken. Put silver in competition with gold as quickly 
 as possible. Where gold contracts do not exist silver 
 will go at once into competition with gold and this will 
 take some of the demand off of gold. To that extent 
 it will lower the value of gold. The extra demand for 
 silver will raise its value. Everything will advance in 
 value at once. The Tribune admits that. 
 
 "As silver advances, the silver England is now 
 buying from us to ship to India ($15,000,000 last year), 
 to buy wheat and cotton, will cost her more. India 
 wheat and cotton that she buys with silver will cost her 
 that much more. A farmer in India wants an ounce 
 of silver for a bushel of wheat. At free coinage that 
 ounce of silver is $1.29. That means that if England 
 pays us $ 1.29 for an ounce of silver, wheat from India 
 will cost her 1.29 per bushel. Then she will pay us 
 $1.29 per bushel for our wheat. * She now buys silver 
 from us at 65 cents per ounce and buys wheat and cot- 
 ton with it in India, and we must compete with that 
 price. 
 
 " When our silver advances and the price of all our 
 products advance and wheat and cotton go back to 
 their old price, we will be more than able to pay our 
 debts. Our balance in trade wOl be $200,000,000 in- 
 stead of $100,000,000, and this will only leave us $50- 
 000,000 to pay the balance we owe England annually. 
 
THE HAKVEY-LAUGHLIN DEBATE. 41 
 
 The only way to pay England is to advance prices per- 
 manently, not spasmodically, as is now being done on a 
 few articles. 
 
 " We are now getting drunk on more money bor- 
 rowed from England. Fifty million dollars on railroad 
 bonds last week. The relapse will be worse than the 
 last attack. But they say gold will leave us, and will 
 go out of sight, and how are we to get it to pay our 
 gold debts ? We are now paying 100 per cent, pre- 
 mium for it with our silver and about the same pre- 
 mium on it in wheat, cotton and other products. 
 When we have put silver in competition with gold, 
 the premium cannot possibly be that much. If when 
 our mints are open to silver, gold is held at 25 per 
 cent, premium, it will mean that we have taken 75 per 
 cent, of the present premium out of it, as it now takes 
 the silver in two silver dollars to buy one of them. It 
 will then only take one and a quarter of one of our sil- 
 ver dollars to buy one gold dollar, and it will take less of 
 any of our other property to buy gold than it does now. 
 
 " It is foolish to say that when silver is in competi- 
 tion with gold that gold will cost no more. As in the 
 former illustration, as well say that beef will go higher 
 by putting pork and mutton in competition with it. 
 As we get these gold debts paid off we will be more in- 
 dependent. We can show gold that we do not depend 
 on it for money. It will then be our slave. It is now 
 our tyrant. It will then come back and beg us to take 
 it as in 1873, when it one of these gold dollars was 
 worth two cents less than a silver dollar. The more im- 
 portance we place on it, the more we will have to pay 
 for it ; the less importance we attach to it the less we 
 will have to give for it. 
 
42 SILVER AND GOLD. 
 
 " If a man suddenly finds himself floundering in the 
 middle of a stream the quickest way out is to strike 
 out for the nearest shore. The quickest way out of the 
 present situation is to leave the mints as they are, open 
 to the free and unlimited coinage of gold and throw 
 them open to the free and unlimited coinage of silver 
 at the ratio of 1 to 16 as full primary redemption 
 money. And why the ratio of 1 to 16 ? Because that 
 was the ratio when the trick was played. A great 
 wrong has been committed and to right that wrong is 
 the first thing to do. 
 
 " With the mints of tins great nation open to the 
 free and unlimited coinage of silver a demand has been 
 created sufficient to absorb all the surplus silver in the 
 world if it wishes to unload upon us. How much sil- 
 ver is there in the world ? As expressed in dollars 
 there is $4,000,000,000 of it available for use as money. 
 As expressed in bulk it is the cube of sixty -six feet. 
 It will all j^o in the room of the First National Bank of 
 this city and the basement thereunder. 
 
 " Now, we will pull the throttle valve ; we pass the 
 act of remonetization. The mints are thrown open as 
 they were prior to 1873. Now, what is the result? It 
 would be like an engine starting off on a rough track 
 to start with, probably. Here would come the silver of 
 the world, we will say, to take our gold away : 4 You 
 fellows, have overturned silver. We are willing to 
 swap with you ; we will give you our silver and take 
 your gold.' Well, here they come with it. How are 
 they going to give us their silver ? They give us silver 
 for our gold. How much would they get and how 
 much would they give us ? At the present time there 
 is probably about 1400,000 000 of gold in the United 
 
THE HARVEY-LAUGHLIN DEBATE. 43 
 
 States. It is only a very small sum compared with the 
 necessities of the country. Now, suppose they got all 
 of our gold ? What would they do with it ? Would 
 they eat it ? Is there anything sacred about gold, or 
 silver, either, except for the use of the arts and manu- 
 factories and for their desirability to use as money ? 
 Now, they want to bring us the balance of their 
 silver. 
 
 44 What do we give them for it ? We give them our 
 products. Ships are coming into our harbors from all 
 portions of the world bringing us the silver of the 
 world this 66 feet. (I am taking an extreme view of 
 it a rnonometallist's view of it.) And they are go- 
 ing back with the products of our spindles and looms 
 and of our fields. They have got our products and we 
 have got their silver. 
 
 " We can go to work and raise the same products 
 next year over again and tell them to bring some more 
 of it if they have got it. They bring us all their sil- 
 ver and they have found out that we have got enough 
 to give them for it. In other words, the United States 
 is big enough when she throws her mints open to the 
 free coinage of silver to take all the silver in the world, 
 and give up her products in payment for it ; and such 
 a nation can fix the ratio between gold and silver. 
 They could find ships enough to bring it to us. Two 
 ships 'would carry it all. The products for this country 
 for a single year would take it all. And we could still 
 say : 4 Come on. We have more to sell you.' 
 
 "Such a thing would put our manufactories at work. 
 There would be no idle labor in the United States in 
 ninety days after the monometallists tried that game 
 on us. There is only $1,400,000,000 of silver in the 
 
44 SILVER AND GOLD. 
 
 world that is not in the coins of the established govern- 
 ments. 
 
 " It would be the very best thing that could happen 
 to this country if we could trade what is claimed to be 
 $600,000,000 of gold in this country (but in truth less 
 than $400,000,000) for all the silver in the world. It 
 is just as good as money. It is an erroneous idea to 
 stand gold up and worship it as a great god. There is 
 nothing in it except its use in the arts and its use as 
 money, and you have been impressed with its use of 
 money simply because it has been impressed upon you. 
 
 u You don't have to carry silver around with you. 
 You don't carry gold around with you. We carry 
 more silver than we do gold. You carry a paper sub- 
 stitute to represent it. Gold would immediately come 
 back arid knock at our door. (I mean if this happened. 
 I don't admit it will happen, because I won't say that 
 the balance of the world are fools enough to give us 
 their silver.) 
 
 " What I say will happen will be this: When a great 
 government like the United States says: 'Here is 
 equal exchange, 16 for 1, gold for silver,' a man in 
 France is not going to part with his silver or gold un- 
 less he gets that much for it ; unless he gets as much 
 for it as the United States will pay for it, less the cost 
 of exchange. 
 
 " So that when a government that is big enough to 
 take all the silver in the world, if it wants to test its 
 capacity, a demand is created by an influence that is 
 able to sustain that demand, so that a man nowhere in 
 the world is going to sell his silver for gold for any less 
 than he can get for it in the United States. But we 
 will not have to go to it alone. Mexico, Central and 
 
THE HAKVEY LAtJGHLIN DEBATE. 45 
 
 South America are already with us when we start. We 
 start with one-half of the world geographically ; all 
 bonded together in sympathy. The reason why Mexico 
 and the South American governments cannot go it 
 alone is because they are small commercial govern- 
 ments. Europe and the United States are too much 
 for them. The enormous demand made for gold by the 
 enormous commercial transactions of Europe and the 
 United States makes a demand for gold that the gov- 
 ernments of Mexico, South America and China and 
 Japan are not equal to overcome. So that the United 
 States, when she would start, would have the assistance 
 of these weaker governments with her. 
 
 " France said to the United States at the inter- 
 national conference in 1876, 'we come here to hear 
 your proposition and to follow you ; all you have got 
 to do is to start.' 
 
 " France has been enforcing the bimetallic system 
 and refusing to pay out except half and half, saying to 
 us: * We are waiting on you, open your mints and we 
 will follow.' So we would start with the western hemi- 
 sphere, with China and Japan on the eastern hemi- 
 sphere, and with France with the United States, two 
 of the greatest governments in the world. When the 
 nations of the world that give importance to silver 
 have a commercial influence as great as those nations 
 which give importance to gold, the commercial parity 
 between the two metals will settle itself. England de- 
 monetized silver in 1816, and yet there was a commer- 
 cial parity maintained at rates fixed from that time to 
 1873. The United States, France and the Latin union 
 had their mints all open to silver, and England, stop- 
 ping the free coinage of silver, had no effect upon it. 
 
46, SILVER AND GOLD. 
 
 So, if we begin, we begin strong enough to do it 
 * The way to resume is to resume.' 
 
 " The wa}' to remonetize is to throw our mints open 
 and we have got it. We will have higher prices once 
 more. Everybody can make some money. There isn't 
 that paralyzed and deadly feeling that comes with the 
 destruction of prices and the hoarding of money. 
 Now, suppose that the gold does still leave us and you 
 want to stop it. You don't need it in settling with a 
 foreign country. We demonstrated that during the 
 war. Because a man can go and buy it at whatever it 
 will cost in order to pay it in settlement of his balance 
 of trade. Our trade with foreign nations is only 4 per 
 cent, of our business, and our domestic business is 96 
 per cent, of all our business. Which do you want 
 legislated in the interest of, the 96 per cent, or the 4 
 per cent. ? 
 
 " But suppose you keep the gold and have gold and 
 silver both circulating among us. Gold doesn't circu- 
 late now ; but suppose we wanted to keep them on a 
 commercial parity and found that the conditions that I 
 have described didn't do it, how would you do it? The 
 first thing would be, how can we increase the demand 
 for silver ? 
 
 " Well, it might be done two or three ways. In the 
 first place we would send a commission or several com- 
 missions to Germnriy and say to those people, ' Here, 
 we, the great United States, have begun the work of 
 declaring emancipation for the human race from these 
 burdens that are upon them, and ^ve want to add our 
 argument to the arguments of your able bimetallists 
 here in Berlin ; we want you to come in with 
 
 Would it not 
 
: ,, V M ** 
 
 ,- 
 THE HARVEY-LAUGHLIN DEBA 
 
 have more effect than to lay back like dogs in the 
 manger as we are doing now? She could be per- 
 suaded possibly, with the influence of her other bimet- 
 allists, so that we could go on in that missionary work, 
 launched on a gigantic scale as it would be, until we 
 had back all of the governments of the world where 
 we were prior to 1873, except England. We don't 
 want her at all. You are not going to get her either. 
 I would just as soon go to England, to the men who 
 mold legislation in England, and ask them to give us 
 bimetallism as I would to go to the rankest gold-bug 
 in Wall street as ask him to go down and persuade 
 Mr. Cleveland to turn over to us. 
 
 " Why? Man is moved by selfish motive, unless he 
 has freed himself from those base instincts, and large 
 money makers, who have long since gotten more than 
 they needed in this world, and are still piling up more 
 for the purpose of saying that 4 1 am the richest man 
 in the world,' or that ' I am richer than my neighbor, 
 and so my wife can say that she is richer than Mrs. 
 Smith.' When you strike a man like that, and that is 
 the kind of man you strike when you go to England, 
 who control legislation there, there is a selfish motive 
 for their monometallism, and it is because they are the 
 creditor nation of the world. 
 
 " All the world owes them money, and what is the 
 use of commerce ? It is the exchange of property ; 
 property for property, property for money, and money 
 for property, and England can exchange her gold that 
 you owe her, and all the world owes her, for twice as 
 much of your property as she could if we had bimet- 
 allism. In round numbers, there are so many silver 
 dollars in the world as gold dollars. The statistics will 
 
48 SILVER AND GOLD. 
 
 show you that there is a very slight difference, an 
 equal amount of each, dollar for dollar, free coinage 
 prices ; and when you add silver to gold as primary 
 money prices advance, and England's gold would then 
 have its value taken out of it, and it would have to pay 
 twice as much for our property. Now, that is the 
 reason she don't want to do it. 
 
 " If an undue and unrighteous influence by schemers 
 and tricksters abnormally enhance the value of gold 
 so that a commercial parity at 16 to 1 cannnot be 
 maintained, then do as our forefathers did change the 
 ratio and make the change in the weight and size of 
 the gold coins. Monroe and Jackson, did it. They 
 were not called dishonest for doing so. They were 
 legislating in the interest of the people, and not in the 
 interest of the favored few. We are not compelled to 
 keep the legal ratio at 16 to 1 ; we can change it to 20 
 to 1 if necessary to fix the legal ratio to correspond 
 with the commercial ratio, but if the change is made 
 let us make it in the rich man's money and not in the 
 poor man's money. . To lessen the size of the gold 
 coins makes more dollars. To increase the size of the 
 silver coins makes less dollars. 
 
 " Let us have more dollars rather than less dollars. 
 A parity at the same ratio is practicable, as admitted 
 by the experience of ages. This is what we ask. 
 
 " This is a question of capital on one side and hu- 
 manity on the other. Of sound money the sound of 
 the clod on the coffin on one side, and sound money 
 - the sound that has the honest ring of the people's 
 money in it on the other side. It is a question of an 
 English policy or an Amercian policy. Which shall it 
 be? 
 
THE HAKVEY-LAUGHLIN DEBATE. 49 
 
 PROFESSOR LAUGHLIN'S ARGUMENT. 
 
 When Mr. Harvey had finished, the moderator in a 
 few words presented Professor Laughlin as the advo- 
 cate of the negative of the question. The teacher of 
 political economy said : 
 
 "I supposed, gentlemen, that we should discuss here 
 to-night the question whether the United States should 
 adopt the free coinage of silver at the ratio of 16 to 1, 
 independently of other countries. I have not heard to- 
 night any argument directed to that point. An 
 attempt lias been made to lead the discussion far off on 
 the question of what the unit was from 1793 to 1873, 
 but, to borrow an expression from our friend Tom Reed, 
 'that fly was embalmed in the rhetoric of Judge Vin- 
 . cent.' It is not necessary for us to go into that ques- 
 tion. 
 
 " The persistence with which that point is referred 
 to reminds me of the backwoodsman who pointed out 
 the bear to his friend the bear being up the tree and 
 aimed his gun at it. And the other fellow could not 
 see the bear, and his friend was pointing at it and say- 
 ing, 'don't you see, it?' And it finally became neces- 
 sary .to do something and he said again, 4 Why, don't 
 you see it? ' His friend said, ' Why, no.' And then he 
 went over to his friend who thought he saw a bear, and 
 it was a flee on his eyebrow. 
 
 " I should like for a moment or two to free ourselves 
 from the obscuration of that mighty animal directly 
 before our eyes, and get at some of the especial points 
 of the question. Before commencing on those subjects, 
 I should like to speak briefly of three or four points in 
 correction of the argument of the gentleman preceding. 
 
50 SILVER AND GOLD. 
 
 " He spoke of the fact that there was greater trade 
 with Europe during the times when there was a freer 
 coinage of gold and silver than since 1873. I have 
 turned to the statistical abstract of the United States 
 for 1894, and find that in 1872 the gross sum of both 
 exports and imports of the United States was $1,164,- 
 000,000; in 1894, 11,547,000,000. Certainly that 
 statement is not accurate. Also the statement was 
 made that we paid for our foreign goods by constant 
 drain on our resources of gold. 
 
 " I happen to have here at my hand a chart, which 
 possibly you can see, which shows a comparison of the 
 ratio, representing in the green squares the total amount 
 of exports and imports in our foreign trade from 1850 
 to the present time, and the yellow square indicates the 
 relative amount of gold and silver both that passed out 
 and in to settle all those balances. That, gentlemen, 
 is the way in which the payment for our goods is made 
 in foreign trades not by the shipment of money, ex- 
 cept in small sums, at particular times. 
 
 " Another point I should like to call attention to, 
 which has occurred before, is in reference to the fact that 
 the Bland act of 1878 and the Sherman act were sup- 
 posed to require certain obligations in securities to be 
 paid in coin. What seems to be that statement in the 
 act of 1878 is that silver dollars shall be a legal tender 
 for all debts, public and private, except where other- 
 wise expressly stipulated in the contract. It is possi- 
 ble that people who demand the free coinage in the 
 ratio of 16 to 1 would naturally prevent you or any 
 other business man in this city from making an express 
 stipulation for gold or any other article. It seems al- 
 v most inconceivable to one that the law of 1878 would 
 
THE HARVEY-LAUGHLIN DEBATE. 51 
 
 bear any such interpretation, and that is the only quo- 
 tation that could possibly be so construed. 
 
 "It seems to me unnecessary to go further on this 
 question, except to point out here one thing more be- 
 fore I begin that we are supposed to be people who 
 maintained gold and. silver at a parity previous to 1873, 
 and that this was done by the free coinage of both gold 
 and silver. Reference has been made to France. Now, 
 we know that in 1803 the French law established silver 
 as the unit of measure. It was supposed that they had 
 concurrent circulation of both gold and silver in France 
 from 1803 down to the time of the discover} 7 of gold in 
 1850. That is absolutely untrue. 
 
 "I quote from an official document issued by the 
 French government in 1872 on page 562, in volume 2. 
 This document says that in 1808 the circulation in 
 France was only about 8,000,000 of gold that is 
 francs and 2,000,000 of silver. In 1838 the whole of 
 the French circulation did not include over 5 per cent, 
 out of the total circulation of 40,000,000 that is, that 
 silver had driven out gold, because they were not at a 
 parity. 
 
 "Again, the same document says that since the law 
 of 1803 France has had no gold monetary circulation 
 during the period before 1850. Up to that time silver 
 was our sole monetary circulation, but after the gold 
 discoveries of California and Australia gold took the 
 place of silver in the general monetary circulation of 
 the country. You will find that in volume 2 page 32, 
 of the same official document. 
 
 " Again, you will find in a report issued by the min- 
 ister of finance in 1869 that France had had one-third of 
 its circulation in gold. In 1843 almost all this gold had 
 
52 SILVER AND GOLD. 
 
 disappeared. Out of 53,000,000 francs then possessed 
 by the bank only 1,000,000 francs was gold. This 
 metal had disappeared from 1803 to 1848 because it had 
 enjoyed a premium which reached at that time 1| per 
 cent. 
 
 " And so I have twenty references of the same kind 
 to show that not in France was there a concurrent cir- 
 culation of gold and silver, for the reason that the two 
 were not kept at parity ; that every student of our own 
 monetary system knows perfectly well was true of 
 the United States. We had silver only in circulation 
 up to 1834 and shortly after 1834, when the ratio was 
 1 to 15.19. So gold drove out silver, and we had 
 only gold in circulation, and nobody in this audience 
 ever saw a silver dollar in circulation after about the 
 year 1840, and up to 1873 no silver dollars were in cir- 
 culation, and consequently when the act of 1873 was 
 passed there was not any silver, and had not been since 
 1840, in circulation, and at the time the act of 1873 
 was passed there was not even any gold or silver in cir- 
 culation. 
 
 " But I would like now to pass, if you please, to the 
 main points. I would like to discuss, in connection 
 with the principal topic of the evening, money as a 
 measure of value, or as redemption money is like a 
 common denominator, to which other things are re- 
 ferred for comparison. 
 
 " In order to compare goods with money, there is no 
 more need of as many pieces of money as there are ar- 
 ticles to be compared than there is of having a quart 
 cup for every quart of milk in existence or having a 
 yard stick in a dry goods, store for every yard on the 
 shelf. The idea that to multiply the measurements of 
 
THE HARVEY-LAUGHLIN DEBATE. 53 
 
 value is necessary is absurd, but it is of the foremost 
 importance that the measure of values should not be 
 tan>pered with, and should not be changed by legislation 
 to the damage of all transactions based upon it. 
 
 " Right here is the whole secret of the opposition to 
 silver as money. Silver has lost its stability of value. 
 It is no better than any ordinary metal for stability. 
 The action of India sends it down 20 per cent. The 
 mere rumor of the Chinese indemnity sends it up 10 per 
 cent. 
 
 " The more money there is roaming about in circula 
 tion is no reason why anyone gets more of it. Money, 
 like property , is parted with for a consideration. No 
 matter how many more coins there are coming from the 
 mint under free coinage and going into the vaults of 
 the banks through the credit of the mine owners who 
 own the bullion, there are no more coins in the pockets 
 of Weary Waggles, who is cooling his heels on the 
 sidewalk outside the bank. The increased number of 
 handsome horses and carriages on Michigan avenue 
 does not imply that I can get them if I have not the 
 money to purchase them with. I must produce work, 
 turn out goods and labor. I must get gold or silver or 
 something to the value of the goods, and in that way I 
 will get them, and in no other way. 
 
 " There is no way of getting rich by short cuts, or by 
 legislation, or by merely increasing the means of ex- 
 changing goods, when goods themselves are the princi- 
 pal thing. 
 
 " Money is only the machine by which goods are ex- 
 changed against one another. No matter how valu- 
 able, it is not wanted for itself. It is only a means to 
 an end, like a bridge over a river. Do you suppose that 
 
54 SILVER AND GOLD. 
 
 the farmers of this country really believe that with 
 each ton of silver taken out of the mines by the silver 
 lawmakers in the senate that there are created bushels 
 of wheat and bushels of corn and barrels of mess pork. 
 The silver belongs to the mine owners. How will it 
 get into our pockets or the pockets of anyone else ? Do 
 we insult anyone's penetration by supposing that the 
 congressional kings are going coaching about the 
 country distributing their money for nothing, 
 
 "Our farmers are no fools. They know they can 
 get more money by producing more commodities to be 
 exchanged for it, and for those commodities they want 
 as good money as any other men in the country have 
 got. 
 
 " I want to call your attention to the fact that goods 
 in these days after being expressed in the common de- 
 nominators of value are exchanged practically without 
 the use of money. I will explain that very briefly, be- 
 cause the facts must be familiar to every business man 
 in the City of Chicago. A sells a carload of wheat and 
 draws a bill on the Chicago purchaser for the same. A 
 discounts this bill and has a credit in his deposit ac- 
 count in a bank representing his wheat expressed in 
 terms of money. But another person, B, may have 
 sold to A woolen goods for the same amount. B draws 
 on A for the sum and B also gets a credit to his bank 
 account through the banks ; then these two bits of 
 paper meet and offset each other that is the wheat and 
 woolen goods expressed in the common denominator of 
 value are exchanged against each other by a medium of 
 exchange known as deposit currency. 
 
 " If you will permit me I will point to that chart on 
 the other side of the room which represents the relative 
 
HENRY M. TELLEK, 
 
THE HAKVEY-LAUGHLIN DEBATE. b7 
 
 amount of that kind of currency in the United States 
 as compared to the other kind. I refer to that large 
 gray square at the right, which represents the total 
 amount of credit deposits in the banks. Now, what 
 does it do ? Why, it does the work which we know 
 exactly in quantitive form is performed by the clear- 
 ings of the United States. That function, or that kind 
 of money, the most welcome of all our kinds of money, 
 amounts at the present time to $2,963,000,000 in our 
 deposit accounts. 
 
 " But what work does it do?" I( does the work of 
 our clearing houses. You can verify those figures any 
 week if you wish to" know the way in which transac- 
 tions are actually performed, goods actually exchanged 
 without the use of money to the amount of $60,000,- 
 000,000 a year. And when you contrast the size of 
 that with the square representing our gold, our silver 
 certificates, our national bank notes and our greenbacks 
 and subsidiary currency, which are the other blocks 
 on the same sheet, you can see what an immense influ- 
 ence that has on our business. 
 
 44 It is not necessary for me to expand further on 
 that point because those are commercial facts apparent 
 to any business man in the union. I can only say that 
 from 92 to 95 per cent, of all our transactions are per- 
 formed in this way, practically without the use of 
 money, and that under recent investigations by the 
 comptroller of the currency about 54 per cent, are per- 
 formed in the same way. But it will be said by some 
 one : " This vast system of credit" but it is not 
 credit, it is a system of exchange but they would say: 
 "This vast system of credit must be liquidated in 
 actual coin or money." And so our business system 
 4 
 
58 SILVER AND GOLD. 
 
 rests like an inverted pyramid upon the apex of the 
 small reserve of coin. Now, how true is that ? 
 
 " If I have explored rightly, and I took but a very 
 short time to refer to that matter, it would seem to me 
 that is just the means by which goods expressed in the 
 term of the common measure of value are exchanged 
 against each other without the intervention of money, 
 and by this means, which is independent of the passing 
 of coin from hand to hand. These transactions ex- 
 pressed in terms of money are not based upon coin, but 
 upon goods that are bought and sold. 
 
 "No business man waits until checks and money 
 have reached such a volume before he thinks that the 
 medium is sufficiently large for the needs of trade, be- 
 fore he sells his car load of wheat or his bushel of corn 
 or woolen goods. He first sells his grain and cotton 
 and draws a check or bill afterward. The deposit cur- 
 rency I have spoken of is the consequence and result 
 of the transactions. This system I have been describ- 
 ing is as broad as the transactions. It is ultimately re- 
 solved into goods and based on goods. 
 
 " It is not true, therefore, that this system I have 
 been describing is unstable like an inverted pyramid. 
 The transactions are the reason for the existence of the 
 checks and deposits. The checks and the deposits are 
 not the reason for the existence of the transactions. 
 To talk then about redemption money being scarce or 
 being cut off by the act of 1873 is about as futile as 
 talking about hearses being scarce because there is not 
 a hearse to every man. If people die rapidly the 
 hearses do not stand so long in the undertaker's yard. 
 If many transactions take place the money becomes 
 nimble and a little goes a long way. One hearse may 
 
THE HAK VTEY-LAUGHLItf DEBATE. 59 
 
 bury many people, one at a time, and so a little money 
 will exchange a great many goods, but you say, there 
 must be mon^y enough to liquidate every transaction 
 necessary, and you point to a panic, and when there is 
 a money famine. You point to when there is a money 
 panic, that is io say, when properties and securities are 
 thrown on tb* market at once to be sold to get the 
 legal means of paying obligations. 
 
 " Very truu, but in ordinary times all goods are not 
 at once offered any more than all people are dying at 
 once. Wheu n cholera epidemic comes people die, and 
 dio rapidly, r,nd hearses are in exceptional demand, like 
 money in a panic. But note this : Even if every 
 corpse is no* lucky enough to be carried in a hearse it 
 yet can be buried some way or other. It may not be 
 so stylish, tut it gets there all the same. It may go to 
 ita grave in a cart or an express wagon. So the goods 
 aud money, if they cannot all be exchanged in cur- 
 rency for coin, they may yet be exchanged by other 
 means, by clearing-house certificates, or, last of all, 
 even by barter. All goods are not offered for exchange 
 at once any more than a million men crossing a bridge 
 are all on the bridge at the same time. A million men 
 can all cross a bridge comfortably 100 at a time, but if 
 they all cross at once there is a panic and some one is 
 hurt. 
 
 " Now, I want to suggest in connection with the act 
 of 1873 and with the general question very briefly one 
 or two facts. Prices since 1873 have not fallen be- 
 cause of any lack of money, and I think I have shown 
 you on general principles there has been no reason why 
 there should be an increasing amount of money, and 1 
 iutend to show you now by facts that prices have not 
 
60 SILVER AND GOLD. 
 
 fallen since 1873 because of any lack in the quantity 
 of money. 
 
 " I have prepared on that chart the facts showing 
 the most extensive movement of prices, the most ex- 
 haustive study of prices ever made in this country or 
 any other. If the gentlemen can see across the room 
 you will find that there is a straight black line crossing 
 the middle chart and that that represents the figure 
 100, or the basis from which the figures move. Now, 
 there is a line that starts from the beginning there in 
 1860 representing the movements of 223 articles 
 quoted solely in the American market. That line rises 
 up as you see it. It is marked 4 C.' It rises up from 
 that base line to 1865 and then it starts downward. 
 It moves down and in 1879 strikes the base line again, 
 so that the movement of prices shows that in 1879 we 
 were exactly on the same level to prices before the 
 civil war. Then the line moves slightly above the base 
 line, showing that prices were higher than 1860. Then 
 it drops a little under again to the figure 4 C,' just un- 
 der the line, and, compared with 1860, the prices of 
 223 articles averaged together in the American mar- 
 kets showed a decrease as compared with 1860. 
 
 " Now, let us compare with that the circulation. 
 There is a line marked ' D ' across it. Soon after the 
 civil war it moved a little above the line, and then in 
 1879 the circulation of the United States advanced 
 rapidly and moves to the right. There was a greater 
 demand put upon the money with the increasing circu- 
 lation, but I point to the chart to show you what the 
 transactions were which you would appeal to as show- 
 ing how much trade had increased. That might indi- 
 cate the amount of demand put upon the circulation 
 
0?HB HAKVEY-LAUGHLIH DEBATE. 61 
 
 of the country. That line up there in red is the line 
 of the coloring which I just explained to you was the 
 amount of transactions in the United States practically 
 without the use of money, consequently the very thing 
 that you will refer to as indicating an increased de- 
 mand upon money is the very thing which explains 
 just to what extent we have economized the use oi 
 money. 
 
 " Lastly on that chart there is a dotted line and red, 
 which begins some distance from the base line. That 
 represents the value of silver compared with gold. It 
 travels along the '70s about the same ratio, 15J to 1. 
 Then it goes down and up. In 1879 it was just cross- 
 ing the line of circulation at ' D.' It keeps on pretty 
 steadily until after 1885, and then it drops below the 
 line, then rises, and now it is again down ; you can 
 just see it faintly at the lower edge of the chart, like a 
 star in the winter just passing over the horizon. That 
 is a significant story. That shows the relation of silver 
 to gold, while the line 4 C ' indicates the relation of all 
 the commodities in the United States to gold. 
 
 " Now I ask you whether there is any parallel show- 
 ing of silver relative to gold and commodities relativN 
 to gold 1 The price of commodities is 8 per cent, be* 
 low what it was in 1860. Silver is 50 per cent, below. 
 Isn't it perfectly clear then, gentlemen, that silver did 
 not have the same purchasing power in 1894 as it had 
 in 1873 ? 
 
 " There is absolutely no correspondence. The pur- 
 chasing price of silver is infinitely below the price of 
 the purchasing power which it had in 1873. Therefore, 
 it is not to day, in 1894, a just means of paying debts. 
 But more than that, why should there have been any 
 
62 SILVER AND GOLD. 
 
 change in prices in the United States after 1873 ? 
 There was no more gold in circulation than in 1873, 
 yet, May 1, 1895, there was gold in circulation in the 
 United States $568,000,000, and silver $524,000,000, 
 making a total of $1,092,000,000. More redemption 
 money has been coined by the mint by 11,092,000,000 
 and yet prices fall. That is due, without the shadow 
 of a doubt to any investigator, to. the cheapened cost 
 of production. 
 
 " Moreover, if it be associated with a fall of prices 
 since 1873, with the demonetization of silver, I point 
 to the fact that there is more silver in circulation in 
 the very countries concerned to-day than in 1873. 
 Germany has still 110,000,000 thalers of her old silver 
 and the five franc pieces of France are more in circu- 
 lation than in 1873, and they are all legal tender. 
 
 " The United States, after the Latin union ceased to 
 coin silver in 1878, tried this experiment, and now the 
 United States has added to the circulation of the world 
 something over 1600,000,000. That is, there is more to- 
 day, in 1896, than there was in 1873. Therefore, why 
 the use of talking about the fall of prices having been 
 due to the subtraction of the money of the woild 
 when there is more silver in circulation and more gold 
 in circulation by hundreds of millions. 
 
 " Moreover, it may be said that commodities had 
 fallen because of the subtraction of silver from the cir- 
 culation. In 1873, compared with earlier years, the ex- 
 ertion of the average laborer had risen 8 per cent. Tbe 
 laborer to-day commands more gold than he ever coai- 
 manded in the industrial history of the world. Not 
 only have wages risen all this time, but because of this 
 great cheapening in the cost of production of commod- 
 
THE HARVEY-LAUGHLIN DEBATE. 63 
 
 ities, which has caused the falling of the prices of 
 commodities in general, wages have risen in money, in 
 gold, and his purchasing power has increased double. 
 Not only has money risen but commodities have fallen. 
 The laborer has got double since 1873. For heaven's 
 sake let us have more of 1873 for the laborer. 
 
 " This persistence in saying that the fall of prices is 
 due to silver is like the story of the grandmother, who 
 said there was something good in everything, and the 
 daughter said: 'I really believe you would say some- 
 thing good about the prince of evil.' * Well, my dear, 
 I am sure we must all admit he has great persever- 
 ance.' 
 
 " Now the free coinage of silver at 16 to 1 let us 
 get the record to the point ; when the market ratio was 
 about 32 to 34 it skipped about so much you can't be 
 really certain. It has been 34 to 1 5 somewhere between 
 32 and 34 now. If the market ratio be that in the mint 
 ratio you propose 16 to 1 there is a premium of sixteen 
 ounces of silver profit on withdrawing every ounce of 
 gold in circulation. Free coinage of silver at 16 to 1 
 means single silver monometallism ; 16 to 1 is a single 
 silver standard, and, in the language of my opponent, 
 we will start with all the South American countries 
 and Mexico. Free coinage of silver, then, is absolutely 
 certain to drive all gold out of circulation. The mere 
 hint of it did that in the panic of 1893. May 1, 1895, 
 the first of this month, there were 1568,000,000 of gold 
 in circulation. Since gold must be inevitably driven 
 out if free coinage of silver is had, there will be no in- 
 crease in the quantity of money. 
 
 " If the people who support free coinage hope to in- 
 crease the quantity of money it is perfectly evident oi 
 
64 SILVEK AND GOLD. 
 
 the face of it that it will contract the currency by the 
 total amount of $568,000,000. It could not change 
 prices, therefore, by increasing the amount of the me- 
 dium of the exchange. That is plain. ( The only waj 
 it would act would be to increase the price of every* 
 thing because reckoned in a cheaper medium than that 
 of gold. This my friend admitted this evening. 
 
 " If prices would rise we would have a glow of satis- 
 faction. It is the kind of glow of satisfaction which 
 conies to the inebriate after he has been supplied with 
 drink after he has been thirsty a long while. For ex. 
 ample, take a pair of gloves worth 100 cents in gold, 
 It would exchange for about 210 cents in silver. A 
 dozen of eggs now selling at 15 cents would sell for 
 about 30 cents, and everything we buy would rise in 
 proportion, since the intrinsic value of the pure dollar 
 is worth but 51 cents. 
 
 " As free coinage of silver would inevitably result in 
 a rise of prices it would immediately result in the fall 
 of wages. Its first effect would be to diminish the pur- 
 chase power of all our wages. The man who gets $500 
 or $1,000 a year as a fixed rate of wages or salary will 
 find he can buy just half as much as now. Yes, but 
 some one said the employer will raise his wages. Now, 
 will he ? The facts on that are clear and indisputable. 
 It has been one of the undisputed facts of history 
 that when prices rise the wages of labor are the last to 
 advance, and when prices fall the wages of labor are the 
 first to decline. Free coinage of silver would make all 
 the articles of the laborer's consumption cost him 100 
 per centc more unless he can get a rise in his wages by 
 dint of strike and quarrels and all the consequent dis- 
 satisfaction arising from friction between the employer 
 
THE HAKVEY-LAUGHLIN DEBATE. 65 
 
 and employee. He would be able to buy only half as 
 many articles of consumption as he had before. 
 
 " In short, a rise of prices necessarily results in a 
 diminution of the enjoyments of the laboring class un- 
 til they can force the employers through a long process 
 of agitation -to make an increase in their wages. Are 
 we willing to sacrifice the interests of the laboring 
 class to the demands of certain owners of silver mines 
 who hoodwink people with the cry of more money ? 
 
 " This is a very distinct and serious damage. The 
 damage runs in other directions, however. But the 
 proposition to adopt a depreciated standard of value is 
 simply an attempt to transfer from the great mass of 
 the community, who have been provident, industrious 
 and successful, a portion of their savings and gains into 
 the pockets of those who have been idle, extravagant 
 or unfortunate. The provision which has been made 
 for old age, for sickness, for death, for widows and or- 
 phans or by insurance will be depreciated in the same 
 ratio. 
 
 " No invasion of hostile armies burning and destroy- 
 ing as they advance could by any possibility equal the 
 desolation and ruin which would thus be forced upon 
 the great mass of the American people. Such a deso- 
 lation, moreover, does not fall alike upon the shrewd 
 and unsophisticated. The shrewd ones, the bankers 
 and the like, will be easily able to take care of them- 
 selves, while we plain people will be robbed of our 
 hard earnings without any hope of compensation. 
 
 " Moreover, free coinage of silver would injure those 
 who wish to borrow. I should like to4ouch upon the 
 question of debtor and indebtedness. The justice of 
 to-day permitting mortgages and obligations to be paid 
 
66 SILVER AND GOLD. 
 
 off in money 50 per cent, less than that in which they 
 were contracted shows its own dishonesty on its face 
 without further remark. When you think that since 
 1873 there has been only this standard, their offer to 
 pay them in a money worth half of the present value 
 is simply repudiation and dishonesty. 
 
 u Let me explain that. If I have attempted to save 
 painfully $1,000 by many years of sacrifice, and loan it 
 to B on a mortgage, then if B urges legislation by 
 which he can pay me back in a cheaper money, worth 
 one-half of what he got from me, do you suppose I 
 Would ever lend to B again or renew my mortgage ? If 
 I had pinched and saved, gone without a new overcoat 
 or used a shabby parlor carpet in order to save some- 
 thing and invest it for my child, and if then I gave it 
 over to B, who has the spending of it, is it not fair and 
 square that I should have back again what I gave him ? 
 If B spent it and enjoyed it he is not thereby absolved 
 from paying it back, 
 
 " I appeal to the sense of fair-mindness in every 
 American in this land. No trick or sophistry can make 
 the scaling of this debt to me anything but dishon- 
 esty and cheating. Any state that enacts laws whereby 
 debts can be scaled signs its own commercial doom. 
 Cheating is a bad business policy for man and state. I 
 say that the passage of the bill, free coinage of silver 
 at 16 to 1, would injure the borrower. 
 
 " The savings banks of the United States in the 
 years 1893 and 1894 had deposits from 4,777,000 de- 
 positors, with a total amount deposited of $1,748,- 
 000,000, or an average to each depositor of $365.86. 
 Pass a free coinage measure, 16 to 1, and you hurt 
 the purchasing power of the deposits of the small 
 
THE HAKVEY-LAUGHLIN DEBATE. 
 
 saviDgs in this country, affecting nearly 5,000,000 of 
 people. 
 
 " The building and loan associations in this country 
 are indebted to their members to the amount of $450,- 
 000,000. Pass a free coinage measure and you scale 
 that indebtedness one-half, and whom do you touch ? 
 The life insurance outstanding Dec. 31, 1889, was $618,- 
 000,000. Scale that indebtedness one-half and leave a 
 desolate widow or the children with one-half, and in 
 recent years, too, under the present standard. 
 
 " Take the pensions to nearly the amount of $140, 
 000,000 that are paid annually. Pass a free coinage 
 measure and reduce those. You would thus affect 11,- 
 000,000 of persons. The case that I have described, 
 therefore, is not a limited or special one. 
 
 " The bonded debt of the railways in the United 
 States is about 16,000,000,000. If free coinage of sil- 
 ver were introduced it would enable these railways to 
 pay off their debts with what is now equivalent to 
 about $3,000,000,000. They would thus be relieved of 
 the necessity of paying the small investors who have 
 taken their bonds one-half of what these corporations 
 now owe them, and it is only a few of such corpora- 
 tions and railways that have outstanding indebtedness 
 that has run a long time, and which could have been 
 paid before the period of 1873. 
 
 " The Sherman act of July 4, 1890, unless it had 
 been repealed, would have brought us to the silver 
 standard as it was. The mere suspicion of it struck a 
 blow at our measure of value, brought on a panic, made 
 prices uncertain and caused doubts as to future plans 
 in every factory and shop in the land. Those who 
 have silver mines, and who can, by their wealth, con* 
 
SILVER AND GOLD. 
 
 trol political parties and legislatures, wlio make the 
 very seat of our national government their prided of- 
 fices and actually turn the national senate into a bureau 
 for bullying the prices of their product, to those men 
 we say beware. 
 
 " Those of us who belong to the rank of plain citi- 
 zens, who are thinking only of the country as a whole, 
 who believe in honesty and intelligence, hold that 
 when a question of right or wrong is presented in a 
 campaign of education the people will decide for 
 right and for justice. We cannot believe that a 
 special interest led by millionaires can go on unchecked 
 in their plan of sacrificing the taxpayers in order to 
 heap up riches, especially when this is done on the most 
 fallacious of economic grounds grounds which have 
 been proved wrong by the experience of every country 
 of modern times. How long will it take to convince 
 every man in the land that conditions of prosperity are 
 those in which the honest men can best meet and pay 
 his obligations. 
 
 " Unless the debtor can get employment or find a 
 market for his goods, how can he pay interest or prin- 
 cipal ? Now, if tampering with the standard in terms 
 of which all transactions are drawn, all contracts made, 
 all goods bought and sold, brings industrial paralysis, 
 because no one knows what will happen ten days hence, 
 and no one will go on making goods for a changing 
 market, it is to the interest of every laborer, every 
 debtor, every honest man, is it not, to keep and main- 
 tain the value of the standard so far as that may be 
 done? 
 
 " The debtor will be no better off by free coinage 
 even if we had it, which we never will. Every lender 
 
THE HARVEY-LAUGHLIN DEBATE. 69 
 
 would insert the gold clause in the contract on our 
 present basis of contracts and prices. The very hint of 
 possibility of a change to a depreciated single standard 
 would precipitate a panic just as it did in 1893, and 
 when the gentleman who spoke before me charged me 
 with being certain to engage in special pleadings I ask 
 him to consider the condition of the country to-day, 
 what it is to-day with the great iron industries of Penn- 
 sylvania keeping up prices since there has been a steady 
 recovery of industry from the very moment when Mr. 
 Cleveland put his foot down and said, 4 We should and 
 shall maintain our standard of value inviolate.' 
 
 " Is it true, that, even laying aside all honor and 
 justice, resorting to a single silver standard depreciated 
 48 per cent., the debtor will sell his goods at 100 per 
 cent, more, and the more easily pay off his debts ? By 
 no means. That is the most superficial of all ideas. 
 Trickery is always sure to injure those who resort to it. 
 And I do not myself feel it necessary to do any more 
 than appeal to the selfish motives of the American peo- 
 ple. I for one am ready to appeal to that integrity, 
 that sense of honor, and that uprightness in the American 
 people, which, whenever it has been appealed to, has de- 
 cided rightly upon these great questions of justice. 
 
 "In conclusion, gentlemen, extraordinary as is the 
 proposal for free coinage, it is in truth only a huge de- 
 ceit. It was born in the private offices of the silver 
 kings, nursed at the hands of the speculators, clothed 
 in economic error, fed on boodle, exercised in the lobby 
 of congress, and as sure as there is honesty and truth in 
 the American heart it will die young and be buried in 
 the same ignominious grave wherein lies the now for- 
 gotten infant once famous as the rag baby. 
 
70 SILVER AND GOLD. 
 
 " Free coinage is greenbackism galvanized into life. 
 That heresy in its old form of a demand for more money 
 has already been laid low. It will not long deceive us 
 in its new form of a demand for more silver, for silver 
 fiatism, nor in any other respect in what it presumes to 
 be. It is not a predecessor for bimetallism. It is a 
 wild leap in the dark for silver monometallism. Under 
 the cry for more money are veiled the plans of a giant 
 syndieate of mine owners and speculators, who have 
 hoodwinked the people in certain parts of the country 
 and who are still deluding them with a specious 
 argument for more money, and are laughing in their 
 sleeves at a constituency so easily gulled.' 
 
 REJOINDERS OF CONTESTANTS. 
 
 The applause following Professor Laughlin's ad- 
 dress having subsided the chairman announced that 
 Mr. Harvey would be given fifteen minutes for rejoin- 
 der to his opponent. Promising to cover in that time 
 all the ground Professor Laughlin had gone over Mr. 
 Harvey said : 
 
 "He says that exports in 1872 were $1,100,000,000, 
 and in 1894 $1,500,000,000 as an argument that be- 
 fore gold and silver came back we were running on 
 paper money. I would only say that the population 
 has increased faster than the increase as shown by 
 those figures. He says both the gold and silver ex- 
 ports and imports during the years from 1860 to 1870 
 were paid for in gold and silver, as an evidence that 
 gold and silver were international money. Now, we 
 did not have gold and silver as money then, and yet it 
 
THE HARVEY-LAUGHLIN DEBATE. 71 
 
 was used in the settlement of balances. But as what? 
 Not as money, but as merchandise, and it is so used to- 
 day not as coined money, but as merchandise. We 
 had paper for money and they had gold and silver, and 
 yet it was used as merchandise then as it is used now. 
 And if all the gold went out of circulation with us and 
 we had silver or paper temporarily we could buy the 
 world's merchandise now as we did then and as we did 
 all the time. 
 
 " He says that the clause 'in the Bland-Allison act 
 that stipulates that silver is legal tender money except 
 where otherwise provided in the contract is just and 
 proper. Now, gentlemen, that clause meant this, ex- 
 cept where otherwise provided in the contract we will 
 provide for gold. Now, you silver men shoot your 
 guns. You silver men can pass any law you want, 
 we have got you sewed up in a contract which called 
 directly for gold. Never before in the history of the 
 world, nowhere in the records of the United States, 
 can you find where we enacted any law authorizing a 
 creditor to take a note discriminating between our 
 legal tender money. 
 
 " It is statutory treason to disrupt and discredit our 
 money, and a statute which permits it which was the 
 Bland-Allison act is the first of the kind in the stat- 
 utes of the United States, and it did just what it was 
 intended to do fasten a gold standard, by putting it in 
 the contract. Such a thing was never done before, 
 and is unjust, if monometallism is unjust. 
 
 " He says silver drove out gold in France. Silver 
 also drove out gold in this country, he says, for the first 
 fifty years of the century, and then gold drove out silver. 
 Now that is just what we want the business men of 
 
72 SILVER AND GOLD. 
 
 Chicago to understand. That is bimetallism ; bimetal- 
 lism, which makes either gold or silver primary money, 
 because when one metal gives out and gets dearer or be- 
 comes scarce the other comes in. How can silver come 
 in now. There is no such law authorizing it to be 
 primary money or redemption money. It cannot come 
 in now. Gold has got the crack to itself, but under 
 bimetallism for centuries, as long as we have statistical 
 record of it, when one metal came in and drove the other 
 out, it was because it was cheaper by a small percent- 
 age, which drove it partially out or for a short time. Or 
 it drove it substantially all out, and then came the 
 other, but it was the very fact that either metal an- 
 swered for use as money and that if one was not 
 enough or if the business of the country would have 
 its back broken by reason of insisting on one metal 
 there was the other to take its place, and that is what 
 bimetallism means. 
 
 "Now, it does not mean when one of the metals goes 
 out of circulation temporarily that is not a measure of 
 value, because it is a measure of value. This question 
 is world-wide in the sense of commercial parity. If 
 silver left us in 1873, because it was at 2 per cent, 
 premium over gold, at 16 to 1, why was it ? Because 
 there was a market in Europe ; the mines in France 
 were open to it at the ratio of 15J to 1, and it went 
 there, and took the place of so much gold, which came 
 back to us, but it is not so now. Silver, when it leaves 
 us, does not take the place of money, because silver is 
 demonetized. With both the metals remonetized, one 
 of the metals going out of use, and leaving us, we 
 have still a measure of value, because it is holding up 
 the measures of values for the world. It is holding up 
 
JOSEPH N. DOLPH, 
 
THE HARVEY-LAUGHLIN DEBATE. 75 
 
 the value of wheat in London, where it makes them 
 pay $1.30 for Indian wheat, and makes them pay us 
 $1.30 for our wheat. Gold and silver alternately are 
 the strength of bimetallism, and it is not this one or 
 the other one used as a measure of value when both 
 are conjointly repudiated before the law. 
 
 " 4 No silver in circulation from 1850 to 1873,' he 
 says. Now, silver was in circulation at that time. I 
 know it as a fact. I was a boy 10 years old in 1861, 9 
 years old in 1860 and I know silver was in circulation. 
 There are instances in my life that implanted it on my 
 mind that makes me know that, and you know it, if 
 you were living at that time. 
 
 " He says the measure of value should not be 
 tampered with. I agree with him. The measure of 
 value from 1792, also during the continental days and 
 up to 1873, were gold and silver, and it should not 
 have been tampered with. You people are tampering 
 with the measure of values. You tampered with it in 
 1873, and the gold standard is an experiment. Show 
 me, in the history of the world, where it ever existed 
 before, except since 1873, and except since 1816 in 
 England only. The ages have had bimetallism at a 
 legal ratio between gold and silver, and monometal- 
 lism, the gold standard, was attempted to be fastened 
 upon the world by the simultaneous action of the finan- 
 ciers of the world, beginning with 1873. 
 
 " He says that silver now bobs up and down. Of 
 course it bobs up and down now. It did not bob up 
 and down before 1873. Professor, take the table of 
 ratios comparative ratios between gold and silver 
 for 200 years in the book before you, and you will find 
 they stayed together for those 200 years, and that silver 
 
76 SILVER AND GOLD. 
 
 did not bob up and down, except the slight difference 
 of exchange in the different countries and the slight 
 difference in ratio between France and the United 
 States. It did not bob up and down. We want you 
 to give them equal rights before the law, and then sil- 
 ver will not bob up and down. Of course it bobs up 
 and down now, and the monometallists are the cause of 
 it the act of 1873 is the cause of it. You say people 
 should work and turn out property, and they will get 
 their money. They are working, but they can't get 
 the money. They produce the property, and find the 
 property costs them what they get for it ; that they 
 get what it costs them to produce. 
 
 " The farmer finds himself in the same fix, and that 
 is why he can't pay his mortgages. Mortgages are in- 
 creasing. Would they increase, as they are now, like 
 a cloud threatening the prosperity of the country, if it 
 were true that such industry as the American citizens 
 can display would produce property that they could 
 not go and get money with ? The trouble is, when 
 they have produced the property, you have destroyed 
 the price. 
 
 " The professor tells a good story. I have heard him 
 tell the same story before. Now, I want to tell a story. 
 It is true that if there is a bridge across the stream and 
 everybody wants to go over it at the same time, there is 
 a busy day such as we would like to see in this country 
 again, and they could not get over the bridge at the 
 same time. If there were two bridges, professor, they 
 could get over. Also, if they should charge too much 
 toll over one bridge we might get over the other bridge 
 cheaper. 
 
 " He says silver is the property of the bullion owner 
 
THE HARVEY-LAUGHLIN DEBATE. 77 
 
 only. Whose property is gold ? No matter who owns 
 it ; whether it is owned by the citizens of Illinois or 
 owned by the citizens of Colorado. It is a question of 
 wisdom and intelligence as to what property, if we are 
 going to have property money, is best to be coined into 
 money, and when that question is intelligently settled 
 no special argument and no criticism can be made upon 
 it by pointing to American citizens as owning it. If 
 they owned our silver in England, and England had 
 her hand in the Rocky Mountains, we would not hear of 
 who owns the silver. It is a lack of Americanism in 
 not standing up for our own product that I object to, 
 when the intelligence of centuries has determined that 
 silver is a proper metal for use as money. 
 
 "He says goods are exchanged practically without 
 money. He ought to go down to Washington and tell 
 Mr. Cleveland how to do without money. He says 
 business is done without the use of money. Well, if 
 he can drive these gold standard fellows to the position 
 of the fiatists, why, we may reason with them. If 
 business can be done without money then there is 
 no reason why we should discuss the question of 
 redemption money at all. He says a man buys 
 goods on one day, using the money to get other 
 property on the same day, and that it is the exchange 
 of property. 
 
 44 The country merchant comes to Chicago and buys 
 goods, and in the course of sixty or ninety days he pays 
 for them, and has his goods on his shelf for a year. He 
 must carry them with money ; he must have money to 
 pay for them. 4 
 
 44 The only appropriate illustration that the professor 
 used were such words as 4 hearses,' 4 brains," etc. And 
 
78 SILVER AND GOLD. 
 
 such reflections which are in sympathy with the posi- 
 tion of the country. 
 
 " He is not an international bimetallist. He says 
 prices have not fallen since 1873. 
 
 Professor Laughlin I didn't say that. I said that 
 prices had not fallen since 1873 because of lack of money. 
 
 Mr. Harvey Well, that is too tough for rne. He 
 says prices have not fallen since 1873 for lack of money. 
 Why have they fallen ? Is not property measured in 
 money when everything else is equal? I don't think he 
 told us why property had fallen. He points to a map 
 on the wall representing the amount of clearances in a 
 day going through the clearing-house. I thought he 
 was going on with the illustration of the map and point 
 out the gold in the country that it all rested upon, but 
 he didn't do so, and I don't understand the object of 
 the illustration. But the point we make, gentlemen, is 
 that credit money and credits all are piled upon redemp- 
 tion or primary money. When you run under such a 
 standard as that it is a part of the statutory law of this 
 country, it is regulating us with reference to our 
 finances, and which we are reminded of, as to what that 
 standard is, every time we look at one of our gold notes, 
 our gold mortgages, etc. ; and when you pile up all 
 those methods and transactions of the nation upon a 
 primary money you must consider the quantity and 
 quality of that primary money, and that is the essential 
 question and issue that is between us here to-night. 
 My fifteen minutes are up. I will finish this next time." 
 
 "Professor Laughlin will now have fifteen minutes," 
 said the chairman, agam presenting that speaker, who 
 said : 
 
 " With regard to the figures of exports and imports 
 
THE HARVEY-LAUGHLIN DEBATE. 70 
 
 from 1850 down to the present time, I gave the figures 
 for the total exports and imports combined in the year 
 1872 as $1,164,000,000, and in 1894 as $1,547,000,000, 
 because the gentleman had stated that there had been 
 a greater trade with Europe in the time when gold and 
 silver had free coinage, and I used the year 1872 to 
 show that there was a certain amount of trade, $1,164,- 
 000,000, and that to-day we had a greater trade, and 
 that we do not have free coinage of silver. 
 
 " The gentleman referred to a most extraordinary 
 proposition, which struck me at the time as so incon- 
 ceivable that I thought I must be mistaken. It was in 
 regard to the act of 1878. Now it happens that I was 
 brought up in a lawyer's office, and I studied the old 
 common law, and when he makes this statement that 
 there never had existed anywhere in previous history 
 any such statement as that a citizen of the United 
 States was affected by such a statement as this in law, 
 4 except where otherwise expressly stipulated in the 
 contract,' ' that citizens in the United States were not 
 permitted to make a contract of any kind for the de- 
 livery of a specific kind of goods,' I am amazed. I 
 suppose it is one of the common law fundamentals, as 
 old as any legal history. The statement, therefore, 
 that a statement like that, recognizing the common law 
 of the country, appeared in the act of 1878, merely as 
 an expression, and never had been heard of before, is 
 the most extraordinary exhibition of ignorance of the 
 fundamental principle of -law, as we understand it in 
 this Anglo-Saxon age. 
 
 " Now, he made the statement in rebuttal concerning 
 something I stated that the law of 1873 prevented silver 
 from coming in and gaining its relative position again. 
 
80 SILVER AND GOLD. . 
 
 If it would that alone would raise its value. Now, the 
 fact is that before 1873 the facts are indisputable the 
 relative market value of gold and silver so varied that 
 they did not remain in circulation then. I challenge 
 any student of economic or financial history to find an 
 authenticated case of the concurrent circulation of gold 
 and silver under a so-called bimetallic system for any 
 length of time. I say that this is a fact indisputable 
 that it was either gold in circulation or it was silver 
 in circulation. 
 
 " I have furnished here absolute, indisputable proof 
 from the French financial documents to show that in 
 France itself, where they attempted to establish what 
 was supposed to be a bimetallic system, they did not 
 have the concurrent circulation, the silver went out. 
 They did not keep their parity. In 1860 the value of 
 a silver dollar in gold was 104.58. The gentleman, 
 then, must have been living in the plutocratic regions 
 of those people who always paid about $1.04 when 
 they need only have paid $1. Or he may have been 
 keeper of a museum where they had those things on 
 exhibition. 
 
 " The gentleman suggests that we have been tamper- 
 ing with' the standard. Now, what do you mean by 
 the standard? Why, the standard by which prices are 
 estimated, by which transactions are made. Now, there 
 was not any silver in circulation ; there was not any 
 gold in circulation. The only standard we had been 
 tampering with was the greenback. There was no 
 change made, for there was no gold and silver in the 
 country. 
 
 " Tampering with the standard is when we try to 
 get that metal of the most unstable kind ; and right be- 
 
THE HARVEY-LAUGHLIN DEBATE. 81 
 
 hind the gentleman is a chart representing the gira- 
 tions of silver when it really has a chance. In 1876^ 
 irrespective of commodities or anything else, it 
 changed its value 25 per cent. That is a pretty stand- 
 ard. That is the kind of standard to tamper with. In 
 1890, under a stimulation connected very closely with 
 the passage of the Sherman act of 1890, silver went up 
 and then it came down again like a rocket. 
 
 " Now he spoke of my chart over there and sug- 
 gested that silver was bobbing. Yet, it has been bob- 
 bing, and has gone to the bottom, and it is like the old 
 story of the man in the boat. When he dropped out 
 of the boat he swore it was the boat that had gone up. 
 He then says that we have spoiled the market because 
 men, if they have produced goods, cannot sell, and in 
 the next sentence he says a man sells for what it cost 
 him to produce, and yet he says he cannot sell. Now, 
 what is selling except getting what it cost to pro- 
 duce ? 
 
 " Then he speaks to the point of the bridge illus- 
 tration. I could not expect to be understood, even on 
 a second reading. The bridge illustration was simply 
 meant to show that in a time of great panic or great ex- 
 citement, when a great amount of work has got to be 
 done in a small space, that disorder sometimes arises. 
 It is perfectly clear that, with order and with a proper 
 medium of exchange, it does not make any difference 
 which of the two bridges a man goes over, but if he 
 goes on to the second bridge and it is a shaky one, and 
 it bobs up and down like that, he had better not get on 
 it. 
 
 "He also added that it was very un-American to 
 talk about gold. Now, we produce gold as well as 
 
82 SILVER AND GOLD. 
 
 silver, and he asks who owns the gold. I answer ex- 
 actly the same in regard to the matter of silver. The 
 bullion owners, the mine owners, own the gold bullion 
 just as much as the silver mine owners own the silver 
 bullion, and when you put it into the mint it does not 
 get into your pocket and mine. I tell you there is an- 
 other process entirely beyond all that. The mint does 
 not create any unlimited demand for gold. The mint 
 does not buy gold. It is simply, and nothing more, 
 than it merely changes its form into a round disk and 
 puts a stamp on it to indicate an authority, that it is a 
 certain fineness and weight. That is all the mint does. 
 It does not create any demand for gold, and gold mine 
 owners own their gold just as the silver mine owners 
 own their silver. And if it is un-American, I say, to 
 say the truth, then I am an un-American. 
 
 " He objected to my funereal illustration. I suppose 
 that he considered that if we were not going to have 
 free coinage of silver that was quite too funereal a 
 thing to think of, and I haven't any doubt if you will 
 examine into my illustration very closely you will see a 
 very much despised thing called a rag silver baby be- 
 ing carried out. 
 
 " He lastly says that the fall of prices since 1873 
 has not been accounted for by me. I did not say that 
 prices had not fallen since 1873, because I called your 
 attention to the movement of prices of 223 articles in 
 coin. Since 1860 they had fallen 8 per cent, and it 
 gives me an opportunity to call attention to something 
 which I did not have time to before, and that is that 
 the fall of prices began in 1865. It was at the time 
 when prices were highest and from 1864 and 1865 the 
 movement was steadily down. 
 
THE HARVEY-LAUGHLIN DEBATE. 83 
 
 et Now, if they are going to talk about 1873, why 
 don't they talk about 1875 ? They were both under a 
 paper money period. The high prices were in 1865, 
 arid when resumption of specie payment took place 
 Jan. 1, 1879, prices were exactly on the same level as 
 they were in 1860. But you start with silver in 1879, 
 and compare its price with what prices were in 1879 
 after the resumption of specie payment, and you can 
 see the difference and the change in the purchasing 
 price of silver as compared with the money. 
 
 " Now, what was the cause of the fall in the values 
 of the commodities ? It seems to me that before an 
 audience of men engaged in industrial operations, men 
 who know something about manufacturing, who know 
 something about the way in which industrial improve- 
 ments have been introduced into every factory, in 
 every furnace, in every cotton and woolen mill in this 
 , country in the last ten or fifteen years, that the 
 change produced in the cheaper cost of productions, 
 in improvements and inventions in the last fifteen or 
 twenty-five years is the striking marvel of this century. 
 Many a man and owner of a mill I have heard say 
 that it made him tired to keep up in this race of im- 
 provements. The moment that he has his mills ad- 
 justed somebody else had got something new and he 
 had to change his mill and his men all over again. 
 
 " One man in the iron industry in Pittsburg wrote 
 to me that since 1873 he could mention no less than 
 500 different inventions all united together to change 
 the price of production of iron. You all know how 
 the price has gone down How about the price of 
 steel rails, which has gone down until steel is really 
 no more valuable than iron was then ? I need not go 
 
B4 SILVER AND GOLD. 
 
 over this fcc, a body of men who know the movements 
 of commercial prices ; the reduction of prices from the 
 change of cost has been phenomenal. It has been one 
 of the most difficult things of my life to understand why 
 prices have not fallen more than 8 per cent, since 1860. 
 The only possible excuse for it that I can see is the 
 enormous production of gold. In 1893 the annual pro- 
 duction of gold was larger than any time in the history 
 of the world, over $155,000,000. And the directors of 
 the mints show us that the reports of 1894 will show a 
 still larger production of gold." 
 
 "Mr. Harvey will now have five minutes for the 
 close of the discussion," said the chairman, announcing 
 the author, who said : 
 
 " Professor Laughlin refers again to the bridge story. 
 I want to do the saute thing. If one bridge is rickety 
 ye use the other while we put the bad one in order. 
 If we have only one and that is out of order, we have 
 to wade or swim. That is the trouble now. We have 
 only one bridge, and the administration and Mr. Cleve- 
 land have hold of one end and the Rothschilds have 
 the other and they have drawn our end away from us. 
 
 " Professor Laughlin refers to the purchase price of 
 wages, etc. There is contention on between the labor 
 unions of the country and the financial and other 
 trusts of the country, and it is a deadly struggle, as 
 we know, and one of the worst things of that struggle 
 is the 4,000,000 of idle laborers in this country. In 
 order to hold up the wages of the country it is produc- 
 ing idle labor. It is . better to all have vages and all 
 have work and something to buy than it is to have 
 wages forced up by unions and not enough people have 
 work to do-. That is our reply to that. 
 
THE SA&VEY-LAtTGHLIN DEBATE. 85 
 
 " Professor Laughlin tried in his first speech to scare 
 the savings, depositors. That is one of the special ar- 
 guments that is made on the other side. They will 
 stop scaring them when they have no depositors left, 
 and that is what their policy will come to. 
 
 " Professor Laughlin says debtors would not be ben- 
 efited by remonetization of silver, but, later on, he 
 says the debtors are trying to benefit themselves by 
 cheating somebody that they are going to cheat peo- 
 ple by adopting a silver standard. Now, we cannot 
 follow that kind of logic. We get lost if we do." 
 
 This was the end of the arguments and the formal 
 gathering became an informal one after the chairman's 
 expression of thanks to the speakers. 
 
56 SILVER AND GOLD. 
 
 CHAPTER II. 
 
 BY SENATOE J. N. DOLPH OF OREGON. 
 
 IT was in the summer of 1893 that President Cleve- 
 land called an extra session of Congress, to secure the 
 repeal of the purchasing clause of the Sherman act. 
 In the discussions which followed this proposal, both 
 in the Senate and in the House of Representatives, the 
 leading economists in Congress took active part, Some 
 of them have selected the speeches delivered on those 
 occasions as the most satisfactory and careful interpre- 
 tation of their views, and portions of them are there- 
 fore included here. 
 
 Tuesday, August 8, when the Senate had under con- 
 sideration the President's message, Senator J. N. 
 Dolph of Oregon spoke in part as follows : 
 
 The President of the United States, moved thereto 
 by the business depression and financial disturbances 
 everywhere prevailing, and assuming that the present 
 condition of the country is the result of the operation 
 of the so-called Sherman law, has convened congress 
 in extraordinary session and urged upon it in his mes- 
 sage of to-day the immediate repeal of that law. 
 Whether or not it would be wise under existing cir- 
 cumstances to repeal this law, the claim or the assump- 
 tion that it is the principal cause of the prevailing 
 business and financial condition of the country should 
 not be permitted to go unchallenged. 
 
 The present financial and industrial condition of 
 
SENATOR J. N. DOLPH. ^ 87 
 
 this country should surprise no one. It has been pre- 
 dicted for years by those who believe the prosperity of 
 the country can only be maintained by the protection 
 of American industries. The present condition is the 
 logical result of the success at the presidential election 
 of November last of the party which declares that pro- 
 tection of American industries is robbery, and stands 
 pledged to reverse the policy which for more than 
 thirty years has given us an era of prosperity such as 
 this or no other country has ever before enjoyed. 
 
 Over all this great industrial system hangs a dark 
 cloud of uncertainty and fear, an impending blow 
 threatening its destruction. And so the wheels of 
 progress are stopped. The fires are suffered to go out 
 in furnaces, the machinery in great establishments is 
 idle, and idle men seek employment. The importer 
 will not import dutiable goods when he fears that soon 
 his competitors can import them free of duty. The 
 manufacturer will not produce his products in excess 
 of the present demand when he fears that his surplus 
 product may be compelled to compete with free foreign 
 products. He will buy raw materials for present needs 
 only while the prospect is before him of soon being 
 able to supply himself with raw materials of foreign 
 production free of duty ; and so the importer, the mer- 
 chant, the manufacturer to avoid disaster curtail their 
 operations. 
 
 The wholesale merchants, the bankers, and all classes 
 of creditors press collections, settlements are forced, 
 and financial losses, business failures, and bankruptcies 
 are the result. The Sherman law is not the sole or 
 even the principal cause of the present financial depres- 
 sion, and its repeal will not cure our financial and in- 
 
88 SILVER AND GOLD. 
 
 dustrial ills. No permanent improvement in the indus- 
 trial situation need be expected while the destruction 
 of the protective system is threatened or feared. No 
 legislation by which domestic industries will be injured 
 or destroyed, by which the products of foreign labor 
 will be admitted to free or to greater competition with 
 domestic products, which will result in transferring do- 
 mestic industries to foreign countries, and giving labor 
 now performed by American citizens to foreigners, will 
 help to restore confidence or bring business prosperity. 
 
 After the Democratic majority in congress shall have 
 settled upon a tariff policy, and formulated and enacted 
 its tariff revision, whether such revision shall be gen- 
 eral or be destructive only with a few American indus- 
 tries, such as the wool and tin-plate industries, the 
 business of the country will adjust itself to the changes, 
 and we may enjoy a halting, intermittent prosperity 
 with lower wages to laborers, but a sound, permanent 
 prosperity in this country will not, in my judgment, be 
 again enjoyed until we are assured of the success of the 
 Republican party and its control of both Houses of 
 Congress, and that a policy is to be adopted and main- 
 tained by which the industries, the capital, and the la- 
 bor of this country are to be preferred to those of for- 
 eign countries. 
 
 Necessity for the repeal of the Sherman law, if such 
 a necessity exists, has been created by the success of 
 the Democratic party, the threat of free trade and the 
 predictions by the Democratic press and Democratic 
 politicians of disaster to follow from the operation of 
 the Sherman law, made in a systematic effort to secure 
 the repeal of that law at the last session of congress 
 under a Republican Administration. 
 
SENATOR J. N. DOLPH. 89 
 
 There are so many widely differing views upon the 
 silver question, so many diverse financial plans pro- 
 posed, so many erroneous opinions concerning our coin- 
 age laws, our financial system, and the character and 
 functions of money, that it may be useful to refer 
 briefly to some of the elementary principles of political 
 economy which can not be disregarded by congress if 
 it would provide the country with a sound, safe, and 
 honest currency. 
 
 Labor employed in the creation of useful articles is 
 the source of all wealth. A useful product of labor is 
 a thing of value. It may be a product of agriculture, 
 for which the farmer plows and sows and reaps, avail- 
 ing himself of what nature has furnished him at hand ; 
 the fertile soil, the warmth of the sun, the early and 
 later rains, or it may be the gold and silver for which 
 the miner patiently delves in the great treasure vaults 
 of nature, or the more useful products of iron and coal 
 which require the labor of men to extract them from 
 the earth and fit them for use, or it may be a coat, a 
 hat, a watch, or a steam engine. All the things by 
 which we are fed, clothed, and sheltered, which add to 
 our convenience, comfort, and pleasure are the products 
 of labor. They are valuable because they are adapted 
 to the* use of man. But one man can not make all the 
 things he needs, or at least he does not. Hence we 
 have diversity of labor, and one man mines gold and 
 silver, another cultivates the soil, another raises sheep 
 and grows wool, another manufactures cloth, another 
 manufactures clothing, and so on. 
 
 Now, the man who works the mine or grows wool 
 must have food and clothing and many other things. 
 If there were no money or medium of exchange the 
 
90 SILVER AND GOLD. 
 
 manufacturer of cloth might buy wool of the wool- 
 grower and give him cloth in exchange, but the wool- 
 grower might not need the cloth. He would need pro- 
 visions and clothing. He might take cloth and find a 
 manufacturer of clothing who would exchange clothing 
 for it, and he might possibly exchange cloth for gro- 
 ceries, and the grocerytnan might in turn exchange 
 cloth for something that he needed ; but this would be a 
 very tedious and unsatisfactory manner of conducting 
 commercial exchanges. Hence the necessity of a me- 
 dium of exchange a tool of exchange so that when 
 the wool-grower carries his wool to the manufacturer 
 of cloth or to some middleman and sells it, instead of 
 taking cloth in exchange for it, he can receive this me- 
 dium of exchange to the amount of the value of his 
 wool, and this medium can in turn be exchanged for 
 any other commodity which he may need. 
 
 This medium we call money. If we could conceive 
 of the first community which invented money assem- 
 bling together to choose such a medium we could prob- 
 ably obtain a pretty good idea of why gold and silver 
 came to be selected. Such a .medium should possess 
 considerable intrinsic value ; that is, be capable of be- 
 ing used for a great many useful purposes. It should 
 be tolerably scarce, and hard to obtain, so as to be pro- 
 portionately valuable, easily transported, and pass cur- 
 rently from hand to hand. It should be plenty enough, 
 however, to answer the requirements of commerce, and 
 it should be capable of being easily subdivided and 
 changed in form Grold seems to possess all the essen- 
 tial requirements for money, and it is undoubtedly for 
 ;his reason that it was selected. Silver partakes in 
 some degree of the same quality, although it is more 
 
RICHARD P. BLAND, 
 
SENATOR J. N. DOLPH. 93 
 
 abundant and more easily obtained. Therefore it has 
 been selected and used for money and made a legal 
 tender for the payment of debts, in some countries for 
 all sums and in others for limited sums only. 
 
 Sometimes in the exigencies of commerce the pur- 
 chaser may not have this medium of exchange, money, 
 in sufficient quantities to pay for his purchases, and 
 hence he buys on credit. 
 
 When the war of the rebellion broke out it required 
 a great deal of money to carry it on, and there were 
 many reasons which rendered it difficult for the govern- 
 ment to obtain money, that is, gold and silver. In its 
 extremity the United States, to enable itself to meet 
 its engagements, to pay the soldiers, to furnish arms, 
 transportation, arid supplies, not having gold and silver 
 enough, issued its promise to pay money in the future. 
 Some of these were promises to pay certain amounts 
 of money at the expiration of a fixed period with in- 
 terest semi-annually at fixed rates. These were the 
 government bonds. Then it issued treasury notes or 
 greenbacks of various denominations, so as to pass from 
 hand to hand as money, which were nothing but ac- 
 knowledgments of indebtedness, without any time be- 
 ing fixed for their payment or any agreement to pay 
 interest. Congress made these notes legal tender for 
 the payment of private debts- 
 
 As the legal tenders possessed no intrinsic value and 
 were debts payable only at the pleasure of the United 
 States, and as the war progressed portions o* the peo- 
 ple began to fear that the South would prevail and that 
 the States remaining in the Union would be either un- 
 willing or unable to redeem these promises, the^ mp- 
 idly depreciated in value until they were worth r*f 
 6 
 
94 SILVER AND GOLD. 
 
 more than 35 cents on a dollar ; but as the prospects of 
 subduing the rebellion and maintaining the Union in- 
 creased they gradually appreciated in value, and after 
 the war was closed continued to appreciate until they 
 reached about the value of 90 cents on the dollar; 
 that is, a dollar in greenbacks was worth 90 cents in 
 gold. 
 
 Congress after a while passed the resumption act 
 that is, fixed a day when the government would pay 
 its notes in coin if presented to the Secretary of the 
 Treasury, and provided one hundred millions of gold in 
 the vaults of the treasury to pay them. But all at 
 once the legal tender notes became worth their face in 
 gold and the gold in the treasury was not needed. 
 The people preferred to keep the promises of the gov* 
 ernment to pay the money when the government was 
 ready to redeem them. 
 
 The legal tenders and all treasury notes are evi- 
 dences of debt of the government possess no intrinsic 
 value. They are made by law to perform some of the 
 functions of money. They are made legal tender for 
 the payment of private debts and public dues, and 
 their value depends entirely upon the provisions made 
 by law for their redemption in coin that is to say 
 upon the fact that they ar^ convertible into that which 
 has intrinsic value. 
 
 We have several kinds of currency in circulation, 
 performing the functions or some of the functions of 
 money. There is the gold coin double eagle, eagles, 
 half eagles, quarter eagles, etc. These gold coins are 
 legal currency that is, they have been declared by 
 law to be, a legal tender for the payment of private 
 debts and public dues, but they also possess such in- 
 
SENATOR J. N. DOLPH. 95 
 
 trinsic value that if you should melt them Ul / into bul- 
 lion the bullion would be just as valuable as the coin. 
 In fact, when they are exported, the fact that they are 
 coined with the devices provided by our laws upon 
 them adds nothing to their value ; their value depends 
 entirely upon their weight. 
 
 Then we have the silver coin, which is also by law 
 made a legal tender for the payment of private debts, 
 and is receivable for public dues. The intrinsic value 
 of the silver dollar, like the intrinsic value of the gold 
 dollar, is the value of the bullion it contains, which at 
 ^resent is about 60 cents in gold. 
 
 The silver dollar in the payment of debts and public 
 lues is required by law to pass for one hundred cents. 
 Forty cents of the value of every silver dollar is based 
 upon the credit of the government. It is true that the 
 government has not agreed to redeem the silver cur- 
 rency in gold upon presentation to the treasury, but it 
 has promised to receive it as the equivalent of gold for 
 public dues, of which we collect about $500,000,000 an- 
 nually. This is a qualified redemption in gold, and- 
 this provision, with the general expectation that the 
 government will maintain this currency upon a parity 
 with gold, has so far kept the silver dollar at par with 
 the gold dollar. 
 
 There are also the gold and silver certificates, which 
 perform the functions of money. They are receipts for 
 gold and silver deposited in the treasury. They are 
 redeemable upon presentation at the treasury in gold 
 or silver coin as the case may require. They are like 
 wheat receipts issued by warehousemen, which call for 
 a given number of bushels of wheat upon presentation. 
 and pass from hand to hand instead of the wheat, unt ;7 . 
 
96 SILVER AND GOLD. 
 
 some holder is ready to present them to the warehouse- 
 man and exchange them for the wheat. 
 
 Any person may take gold not less than $10 in 
 amount to the treasury and deposit it and receive a 
 gold certificate, and the gold is kept in the treasury, 
 to be returned to the holder of the receipt when it is 
 presented. The same thing is true of silver certifi- 
 cates. 
 
 Then there are the legal tender notes, possessing, as 
 I have said, no intrinsic value, but redeemable in gold 
 on presentation to the treasury. They are, therefore, 
 worth their face in gold. There are about $346,000,- 
 000 of this currency. 
 
 We have also another kind of national currency, the 
 treasury notes issued under act of 1890. They were 
 issued for the purchase of silver bullion at the market 
 price at the time of purchase. The silver bullion is 
 stored in the treasury vaults theoretically, if not le- 
 gally, as security for the payment of the notes, and the 
 law provides that the notes shall be redeemed upon 
 presentation in coin gold or silver coin at the option 
 of the Secretary of the Treasury. The gold coin and 
 the gold certificates constitute an absolutely safe cur- 
 rency, for the coin is intrinsically worth its face, and 
 the certificates can be exchanged for gold upon presen- 
 tation at the treasury. 
 
 The legal tender notes are equally safe, for they are 
 redeemable upon presentation at the treasury in gold. 
 A hundred millions of dollars in gold is kept in the 
 treasury as a reserve for the payment of these notes, 
 and the Secretary of the Treasury is authorized to sell 
 bonds for gold, if necessary, for their redemption. The 
 silver coin and silver certificates and treasury notes 
 
SENATOR J. N. DOLPH. 
 
 stand on a different footing. The intrinsic value of the 
 silver coin in gold, as I have said, is about 60 cents on 
 the dollar. The silver certificates are redeemable in 
 silver. The treasury notes may be paid in silver coin. 
 There is no provision of law for redeeming this silver 
 coin and currency in gold, except the provision for the 
 receipt of it as the equivalent of gold in payment of 
 public dues. 
 
 If congress should repeal the law requiring silver 
 coin and silver currency to be received for public dues, 
 the value of the silver coin, the silver certificate, and 
 the treasury notes would at once depreciate until they 
 would be worth no more on the dollar than the value 
 of the silver bullion in a silver dollar. To repeat, the 
 gold and silver coin possess intrinsic value. The gold 
 coin is intrinsically worth its face ; the silver coins are 
 intrinsically worth about 60 per cent, of their face. The 
 gold certificates and the silver certificates are the obli- 
 gations of the government, and are valuable because 
 they are convertible on demand into gold and silver. 
 The legal tender and treasury notes are evidences of 
 debt of the government, but possess no intrinsic value 
 and are valuable only because the legal tender notes can 
 be converted into gold upon presentation to the treas- 
 ury, and the Treasury notes can be converted into 
 coin, gold or silver coin, at the option of the treasury, 
 upon presentation for payment. 
 
 While silver and gold possess intrinsic value, and 
 for that reason, in part, are adapted to use as money, it 
 must not be supposed they have a fixed relative value ; 
 that is to say, that a certain amount of silver is always 
 worth a certain amount of gold. Considered as bullion, 
 they are but products of labor, just as wheat, potatoes. 
 
98 SILVER AND GOLD. 
 
 cotton, and wool are products of labor, and it would be 
 no more absurd to suppose that the relative value be- 
 tween potatoes and wheat, or cotton and wool is fixed, 
 so that 2 or 4 bushels of potatoes are always equal in 
 value to the value of a bushel of wheat, or that 5 pounds 
 of cotton is always equal in value to a pound of wool, 
 than to suppose that a given number of ounces of sil- 
 ver, say 16 or 20, is always equal in value to an ounce 
 of gold. 
 
 The value of each metal, like the value of every 
 other product of human labor, is fixed by the supply 
 and the demand. This is the reason why the use of 
 the two metals as money under free coinage of both is 
 impossible without the concurrent use of the two met- 
 als as money, at an agreed ratio, by a sufficient number 
 of commercial nations to maintain the ratio of their in- 
 trinsic value at the legal ratio agreed upon. 
 
 Some persons who demand free coinage of silver in 
 the United States at the ratio of 16 to 1 appear to be- 
 lieve that gold and silver have naturally a fixed value 
 relatively one to the other, and that the United States 
 adopted that natural relative value by the coinage acts 
 of 1834 and 1837. The relative intrinsic value of the 
 two metals, as I have said, is fixed by the universal and 
 imperative law which fixes the price of every product 
 of human industry in the world's market. 
 
 The value of silver as compared with gold has been, 
 with the exception of a comparatively brief period, con- 
 stantly fluctuating since authentic history began. Five 
 hundred years before the Christian era an ounce of 
 gold was worth 13 ounces of silver. At the beginning 
 of the Christian era an ounce of gold was worth 9 
 ounces of silver. Three hundred and fifty years later it 
 
SENATOR J. N, DOLPH. 99 
 
 required 15 ounces of silver to buy 1 ounce of gold. 
 Two hundred and fifty years later still an ounce of 
 gold was worth 18 ounces of silver. About the close 
 of the fifteenth century the ratio was about 1 to 10 ; by 
 1688 the value of gold had again increased until an 
 ounce of gold was worth 16 ounces of silver. For 
 nearly two centuries this ratio was substantially main- 
 tained by the use of both metals as money by the prin- 
 cipal commercial countries of Europe. When silver 
 was demonetized by Germany and its coinage suspended 
 by France and the Latin Union this ratio was no longer 
 maintained, and the relative value of silver to gold has 
 since greatly fallen and has been constantly fluctua- 
 ting. 
 
 Until an international argreement can be secured 
 between the principal commercial countries of the world 
 for the free coinage of silver at an agreed ratio so that 
 the intrinsic value of the silver product of the world 
 as measured in gold can be maintained at the legal ratio 
 agreed upon, each nation must determine for itself 
 whether it will have a gold or a silver standard. A 
 double standard is impossible. The two metals will 
 hot circulate together unless the parity of their value 
 'jan be maintained. To-day the following foreign 
 countries have the silver standard : India, China, Mex- 
 ico, Japan, and most of the Central and South American 
 States. The following have gold standards : Brazil, 
 British possessions in North America, Denmark, Egypt, 
 Finland, German Empire, Great Britain, Liberia, Nor- 
 way, Portugal, Sweden, Turkey. The following have 
 legally a gold and silver standard, but in fact a gold 
 standard. They have no free coinage of silver, and 
 silver coin is maintained in domestic circulation on a 
 
100 SILVER AND GOLD. 
 
 parity with gold by some provision for its redemption 
 in gold or by its receipt for public dues : Argentine 
 Republic, Belgium, Chile, Cuba, France, Greece, Haiti, 
 Italy, Netherlands, Spain, and S witzerland. Those people 
 who propose free coinage for the United States propose 
 that we shall change our measure of value from gold 
 to silver and join India, Mexico, China, and other coun- 
 tries having a silver standard, and that silver shall be 
 the basis upon which all the transactions in this country 
 shall be conducted. 
 
 Our own experience is sufficient to show that it is 
 impossible under free coinage to maintain in circulation 
 both gold and silver when either is undervalued by the 
 legal ratio. The coinage law of 1792 established the 
 ratio of 1 to 15 between gold and silver. The intention 
 of congress was to adopt the commercial ratio between 
 the two metals in the markets of the world. But gold 
 was undervalued and could not be kept in the country, 
 and, its place was supplied with Spanish milled dollars 
 and small, abraded silver coins. The ratio of France 
 being at the same time 1 to 15J, France took all our 
 gold under a law that is universal and inevitable. To 
 secure the retention and circulation of gold in this 
 country the acts of 1834 and 1837 were passed. The 
 ratio under those laws was 1 to 16. Gold was over- 
 valued and silver left the country under the operation 
 of the same law. To enable us to retain in this country 
 silver subsidiary coins the act of 1853 was passed, re- 
 ducing the amount of silver in half dollars and other 
 fractions of a dollar, discontinuing free coinage of sub- 
 sidiary coin and providing for its coinage by the govern- 
 ment from silver purchased by it, upon which it re* 
 ceived the profit. 
 
17 1 r 
 
 . 
 
 SENATOR J. N. DOLPH. 
 
 Docs anyone suppose for a moment that when con- 
 gress established a mint and fixed a ratio between gold 
 and silver at 15 to 1 on the advice of Hamilton, or 
 when in 1834 the ratio of 16 to 1 was adopted for sil- 
 ver and gold, if silver and gold had been of the value 
 relatively to each other they are to-day the ratio of 15 
 to 1 or 16 to 1 would have been adopted ? It is famil- 
 iar history that Hamilton endeavored to adopt as the 
 legal ratio the then commercial ratio between the two 
 metals in the markets of the world, and that congress 
 in 1834 designed to make the ratio such that gold would 
 remain in this country, whether under it we could keep 
 silver or not. 
 
 Some persons have proposed that a new legal ratio 
 between gold and silver should be established by law, 
 say a ratio of 20 to 1, and the mints be opened for the 
 free coinage of silver at this ratio ; but this proposition 
 is impracticable, would surely give us a silver standard 
 and drive gold out of circulation, would not increase 
 the price of silver bullion or benefit silver producers, 
 and would be no better for the country than free coin- 
 age at the present legal ratio. If we are to abandon 
 gold as the standard, and to adopt the silver standard, 
 it is not material whether a silver dollar is worth 50 per 
 cent, or 90 per cent, of the gold dollar. If we could 
 maintain in the world's markets the actual commercial 
 and intrinsic ratio of value between gold and silver at 
 spme legal ratio we could adopt, then the question 
 would be solved ; but we can not. 
 
 This can only be done by the united action of the 
 principal commercial nations of the world. If we should 
 adopt by law a legal ratio, which at the time was the 
 same as the commercial ratio of value of the two metals, 
 
102 SILVER AND GOLD. 
 
 before a dollar could be coined under it, silver, which 
 fluctuates every day in price, might fall until the legal 
 ratio and the ratio of the intrinsic value of the two 
 metals would be widely different ; and under free coin- 
 age at the ratio adopted only one metal would be coined 
 or remain in circulation. Such a proposition shows a 
 failure upon the part of those who make it to compre- 
 hend the first principles of the silver question. 
 
 Others have advocated free coinage of both gold 
 fcnd silver without an attempt to make the silver dollar 
 the equivalent of the gold dollar, but letting the in- 
 trinsic value of gold and silver fix the current money 
 value of gold and silver coin ; in other words, that we 
 should have two standards, a gold standard and a silver 
 standard; but this is impracticable. In such a case 
 one or the other of the two metals would have to be 
 measured by the other, or we would require a third 
 standard to measure them both. 
 
 Gold being the standard of value of all the great 
 commercial countries, and the medium in which public 
 dues must be paid and foreign debts settled, the silver 
 coin under such circumstances would be but a commod- 
 ity in foreign countries. Gold would disappear, and 
 the depreciated silver currency be our standard of value, 
 and the measure of commercial transactions or our ex- 
 changes conducted on the silver standard would be mere 
 barter. 
 
 The government stamp can not create good money. 
 All money must possess intrinsic value or be convertible 
 into that which has intrinsic value. After the dis- 
 covery of gold on the Pacific coast, gold dust was 
 largely used as a medium of exchange, and before the 
 establishment of the branch mint at San Francisco 
 
SENATOR J. N. DOLPH. 103 
 
 private parties manufactured gold coins of the weight 
 and fineness of the United States gold coins, and in sub- 
 divisions as low as 25 cents. They were not made in im- 
 itation of the United States coin and were not legal ten- 
 der, but they were worth as much, and passed as currency 
 everywhere, as the gold coins of the United States. 
 
 When the branch mint was established the govern- 
 ment did that for the public convenience which private 
 parties before had done. This incident shows that 
 while the stamp of the government, and legal tender 
 enactments are necessary, to make legal tender money, 
 it requires neither the government stamp nor statutes 
 to make a convenient medium of exchange when that 
 medium possesses the necessary intrinsic value, while, 
 on the other hand, the depreciation of the legal tender 
 notes during the war shows that neither the govern- 
 ment stamp nor legislative enactments making a cur- 
 rency legal tender can always make good money. 
 Neither the government stamp nor their legal tender 
 qualities gave the legal tender notes the value they did 
 possess as a medium of exchange, but this was imparted 
 to them by the promise of the government to redeem 
 them in money, and when the day of payment was 
 fixed and provision was made for their payment they 
 became good for their face, because they were con- 
 vertible into gold at par. 
 
 If private parties were to coin silver bullion into 
 coin of the weight and fineness of the standard silver 
 dollars, such coin would be worth no more than its mar- 
 ket value as bullion and would not circulate anywhere 
 as a medium of exchange. 
 
 The silver rupee of India, the Mexican dollar, and 
 the silver coins of Chin , and of every other country hav- 
 
104 SILVER AND GOLD. 
 
 ing free coinage of silver, are worth no more even in the 
 countries where they are coined than the value of the sil- 
 ver they contain. The reason that the standard silver dol- 
 lar of the United States is worth 100 cents in the United 
 States and even in Mexico, although it contains less sil- 
 ver than the Mexican dollar, is because the United States 
 has put the standard silver dollar into circulation, vir- 
 tually saying this coin, though intrinsically worth only 
 what the silver it contains is worth as bullion in the 
 markets of the world, is issued upon the pledge of the 
 government that it shall be accepted as the equivalent 
 of a gold dollar in payment of all government dues. 
 
 If congress were to provide that all public dues 
 should be paid in gold, and substitute no provision for 
 the redemption of silver currency in gold, the standard 
 silver dollar would become immediately worth less in 
 the United States arid everywhere than the Mexican 
 silver dollar. 
 
 By the free coinage of silver it is proposed that 
 anyone shall be permitted to take to the mints of the 
 United States 371J grains of pure silver, now worth, 
 say, 60 cents, and receive for it a standard silver dollar, 
 which is to be a legal tender in payment for private 
 debts at its face and receivable as the equivalent of a 
 gold dollar for public dues, or, as provided in the Stew- 
 art bill of last congress, which passed the senate, re- 
 ceive for his 60 cents' worth of silver bullion a treasury 
 note which is a legal tender in payment of private 
 debts and receivable in payment of public dues at its 
 face. The whole object of the Stewart bill was to make 
 the government the purchaser of all silver bullion of- 
 fered at the mints at the rate of 100 cents for 60 cents' 
 worth of bullion. 
 
SENATOR J. N. DOLPH. 106 
 
 If there are now premonitions of the depreciation 
 of the silver dollar when it is coined only by the gov- 
 ernment, and its coinage is limited, and its cost to the 
 government is only its intrinsic value, what would hap- 
 pen if the mints were thrown open for the coinage of 
 silver on private account and private parties presenting 
 the bullion to the mints were to receive a profit equal 
 to the difference between the value of the bullion of- 
 fered and the face value of the coin or treasury notes 
 received in exchange for it and the government were to 
 lose an amount equal to the profit of individuals ? 
 
 It seems impossible that anyone should suppose for 
 a moment that the silver dollar or treasury notes re- 
 3eived in exchange for silver bullion under such a law 
 could be maintained equal to a gold dollar. It could 
 not be. Before the first dollar under a free coinage 
 law could be coined, the silver dollar could be worth no 
 more than the value of the bullion it contained. 
 
 The merits or demerits of any measure for the use 
 of silver as money to-day must be determined by exist- 
 ing conditions. The question whether previous financial 
 legislation has been wise or unwise is immaterial. The 
 ratio of the value of silver to gold to-day, and not the 
 ratio in 1873, is the important matter for consideration. 
 Since 1873 silver has depreciated in value about 40 per 
 cent. The product of silver increased from 63,000,000 
 ounces in 1873 to 140,000,000 ounces in 1891. The 
 coinage of silver has been discontinued for many years 
 by the principal countries of Europe. Many persons 
 believe that with free coinage of silver we would be 
 flooded with the world's silver. 
 
 The stock of full legal tender silver coin in the prin- 
 cipal countries of Europe approximates $1,100,000,000, 
 
106 SILVER AND GOLD. 
 
 of which 1430,000,000 are stored in the vaults of five 
 banks, and could be thrown upon our markets without 
 delay. I have never feared that free coinage of silver 
 in the United States would cause the world's silver to 
 be dumped upon us, because I have never believed that 
 with free coinage the silver dollar would possess any 
 greater value than the bullion it contained. 
 
 Of course, if under free coinage the silver dollar 
 could be maintained the equivalent in value of a gold 
 dollar we would speedily get all the silver of the world, 
 and citizens of the United States and subjects of foreign 
 countries and foreign governments themselves would 
 undoubtedly avail themselves of the privilege of pre- 
 senting at our mints 60 cents' worth of silver, receiving 
 for it a legal tender note, and converting that into gold. 
 The United States would become the purchaser of all 
 the silver in the world bullion, coin, and old silver- 
 ware paying a dollar in gold for 60 cents' worth. 
 
 But it is absurd to suppose that if everyone was 
 permitted to carry silver bullion to the mints to be 
 coined there would be any alchemy in the process that 
 would double the value of silver bullion. It is as abso- 
 lutely certain as anything can be that under free coin- 
 age the value of the silver dollar would depreciate un- 
 til it was worth no more as money than the value of 
 the bullion contained in it. As soon as this occurred, 
 the profits to silver owners in exchanging silver bullion 
 for silver coin would cease and there would be no 
 longer any inducer }i)t to take silver bullion to the 
 mint to be coined. Silver, like every product of hu- 
 man labor, would be sold in the markets for what it 
 would bring for use in the arts or for money. 
 
 The amount of silver coined under free coinage 
 
SENATOR J. N. DOLPH. 107 
 
 would be variable, and would depend upon a variety 
 of circumstances. But little over eight million silver 
 dollars were coined from the establishment of the mint 
 until 1873, and it is not likely any great amount would 
 now be coined under free coinage. With free coinage 
 of silver, silver would be the standard for all our busi- 
 ness transactions. Our $700,000,000 of gold would be 
 withdrawn from circulation ; the circulating medium 
 would be greatly contracted, and the products of in- 
 dustry greatly diminished. Free coinage would not in- 
 crease the price in gold of any commodity. The price 
 of everything we import would still necessarily be paid 
 in gold. If more silver dollars were received by the 
 producer for his products, more silver dollars would be 
 required to purchase everything which he consumes. 
 
 For instance, if the farmer should receive $1 in 
 silver for a bushel of wheat, that silver dollar would 
 go no further than 60 cents in gold or so much gold as 
 in the world's markets would buy a silver dollar. The 
 value of property measured in silver would be at once 
 advanced to offset the depreciation in the standard of 
 value. The last thing to be advanced would be the 
 price of labor. Although the price of everything con- 
 sumed by the laborer would be nearly doubled in 
 value, it would be a long time, and after many a 
 struggle, before the laborer would succeed in getting 
 two silver dollars in lieu of the one gold dollar he now 
 receives for his labor. 
 
 All producers and laborers would lose by the 
 change in our standard of value, and only bankers, 
 brokers, money-changers, and middlemen would profit 
 by it. All salaries and pensions would be paid in silver 
 and all appropriations of the government expanded in 
 
108 
 
 SILVER AND GOLD. 
 
 silver. The disturbance of our financial condition 
 which would result from adopting a silver standard 
 would produce great financial stringency, force the im- 
 mediate collection of debts, increase the rate of interest, 
 demoralize business, throw labor out of employment, 
 impair the credit of the government, bring home for 
 collection our State, municipal, and corporation bonds 
 held abroad, impair confidence, bring upon us ruin and 
 bankruptcy. 
 
 If existing debts were paid in depreciated silver it 
 would be robbing the creditor, because they have all 
 been contracted with reference to the present standard, 
 and 95 per cent, of them since the great depreciation 
 in silver. 
 
 India, one of the countries until recently having 
 free coinage of silver or coining silver on private ac- 
 count, has hitherto been a great consumer of silver 
 bullion for ornaments and coinage, and has been pointed 
 to by the advocates of free coinage as an example of 
 prosperity with free coinage of silver. The amount 
 coined has been large, but not uniform, some years be- 
 ing a hundred per cent, more than others. The follow- 
 ing table shows the amount, expressed in dollars, of 
 silver annually minted during the period of sixteen 
 years, and shows the consumption of silver in India 
 for coin : 
 
 1875 $23,830,686 
 
 1876 1 12,410,636 
 
 1877 30,518,415 
 
 1878 78,741,556 
 
 1879 28,122,004 
 
 1880 40,002.173 
 
 1881 20,682,625 
 
 1882 29,386,322 
 
 1883 24,927,400 
 
 1884 17,353,531 
 
 1885 048,487114 
 
 1886 27.121,414 
 
 1887 44,142,013 
 
 1888 36,297,132 
 
 1889 37,927,814 
 
 1890 .... 57,931,323 
 
 1891 32,670,498 
 
 Total 17 years... 590,562,659 
 
 Annual average. 34,150,744 
 
GEORGE G. VEST. 
 
SENATOR J. N. DOLPH. Ill 
 
 The amount coined in 1890 is estimated at $30,000,- 
 000. The silver rupee of India contains 186 grains of 
 pure silver ; the half, quarter, and eighth rupees are of 
 corresponding weights. The coinage of both metals 
 until the recent action of the India government was 
 practically free, provided the amount presented was 
 equal to 50 tolos of gold or a thousand tolos in silver. 
 There was a duty of 1 per cent, upon all gold and sil- 
 ver brought to the mints. Gold was not coined in any 
 considerable amount, and the business of the country 
 was conducted upon a silver standard. The stoppage 
 of the coinage of silver on private account in India is 
 not an abandonment of the silver standard. Silver is 
 still the standard, and will continue to be whether the 
 government coins silver on its own account or not. 
 
 It is said this action of the government of India is 
 intended to have the effect to prevent the further de- 
 cline of the value of the rupee, but upon what this ex- 
 pectation is based is not stated. The value of the 
 rupee will be fixed hereafter, as heretofore, by its value 
 as silver bullion in the London Market. It will still 
 be measured in all London and in all foreign trans- 
 actions by gold, and the discontinuance of free coinage 
 by throwing the silver bullion heretofore coined in 
 India on private account on the world's markets has 
 depreciated, and will continue to depreciate, the in- 
 trinsic value of the rupee. 
 
 The claim sometimes made that silver has not 
 fallen in value in India, and that the silver rupee in 
 the interior of India will purchase as much wheat or as 
 much of the other products of labor is absurd ; it is 
 incredible. The price of wheat in London is fixed in 
 gold by the world's supply and demand. It is impos- 
 T 
 
112 SILVER AND GOLD. 
 
 sible that there could be to the exporter of wheat 
 from India a profit equal to the fall in the price of sil- 
 ver since 1873. Such a state of things could not exist 
 ten days in any country under the sun. Competition 
 among English wheat-buyers would speedily raise the 
 price of wheat in India to an approximation of its 
 gold price in London. 
 
 I am informed that the price of wheat is fixed in the 
 export cities of India by the price in London and the 
 cost of transportation, insurance, etc. The statement 
 is undoubtedly an invention intended to make farmers 
 believe that in some way the price of their commodities 
 is affected by the depression of silver. Not every 
 country which uses silver as money has a silver stand- 
 ard. In the United States we have about $500,000,000 
 of silver currency, but our standard is gold, and the 
 difference between our gold and the intrinsic value o^ 
 our silver currency rests upon the obligation of tha 
 government to redeem it in gold. 
 
 England, although having a gold standard sincr 
 1816, has about $100,000,000 of silver, subsidiary coin 
 used in small transactions. France has $700,000,006 
 of silver and $900,000,000 of gold, but has a gold 
 standard, and her silver passes at par upon the faith 01 
 its redemption, and an actual redemption in gold, and 
 this is the case in every country which maintains in 
 circulation silver upon a parity with gold. In all these 
 countries silver is redeemable in some manner in gold ; 
 free coinage of silver has been discontinued, and the 
 stock of silver is not increased. On the contrary, in 
 every country where there is free coinage of silver the 
 purchasing power of silver coin is precisely the market 
 yalue of the bullion it contains. 
 
SENATOR J. N. DOLPH. 113 
 
 "There is persistent and gross misrepresentation 
 concerning the manner in which the act of 1873 dis- 
 continuing the free coinage of the silver dollar was 
 enacted. The recent article by ex- Secretary Boutwell 
 in the Boston Herald giving the facts concerning the 
 manner in which the law of 1873 was passed should 
 set the question at rest, but it will not. I quote the 
 following from ex-Secretary Boutwell's article : 
 
 44 The act known as the act for the demonetization 
 of silver was passed in 1873, and upon a distinct rec- 
 ommendation made in my annual report to congress 
 in December, 1872. The statement so often made and 
 so generally believed, that the provision was introduced 
 and passed surreptitiously, was without any foundation, 
 as will appear from quotations from my report, which 
 I shall incorporate in this article. 
 
 44 The country had due and full notice of the policy 
 proposed, and, if the friends of a silver currency were 
 ignorant of the movement, the fault was their own. 
 Not only was there no concealment, but, on the other 
 hand, the change proposed was announced early and 
 definitely. For myself, I earn say that I never hesitated 
 to avow the authorship of the measure, and I have 
 been ready always to assign the reasons by which I was 
 influenced. 
 
 44 In 1860 the American silver dollar was more val- 
 uable than the gold dollar, according to the statute 
 ratio between the metals, in the sum of about 4 cents. 
 From that time onward the difference in favor of silver 
 diminished graduaWy, and in 1872 the difference had 
 disappeared. 
 
 "At that time the power drill had been invented 
 and its value established. The use of dynamite was 
 well understood, and the number and richness of the 
 silver mines in the Rocky Mountains justified the con- 
 clusion that silver would deteriorate in value with each 
 succeeding year. 
 
114 SILVER AND GOLD. 
 
 " On this theory of the then future my policy was 
 based. We were then on a gold basis as far as the use 
 of the metals had a part in our financial affairs; we 
 were a principal producer of gold, and the most import- 
 ant steps had been taken in the work of bringing the 
 treasury note to the standard of gold coin. 
 
 " In the same report I advised the coinage of a sil- 
 ver dollar, known as the trade dollar, in value superior 
 to the Mexican dollar, which was then in use almost 
 exclusively in the commerce of China and the East 
 Indies. This coin, which was not current in the United 
 States, became the means of a very considerable export 
 of silver to the East. 
 
 " These two measures were designed to maintain a 
 gold basis, in competition with England, our principal 
 rival, and to substitute American silver for Mexican 
 silver in our dealings with the countries using that 
 metal." 
 
 The operation of the Bland act and the Sherman 
 law was recently stated in an authorized interview 
 with Secretary Carlisle. He said : 
 
 " The operations of the United States Mint com- 
 menced in 1792, and from that time to 1873, a period 
 of eighty-one years, the total amount of silver dollars 
 coined was $8,045,838. In 1873 the coinage was 
 stopped by act of Congress, but in 1878 it was resumed 
 under the so-called Bland -Allison act, by the terms of 
 which the Secretary of the Treasury was directed to 
 purchase and coin into standard silver dollars of 41 2 J 
 grains each, not less than $2,000,000 worth nor more 
 than $4,000,000 worth of silver bullion each month, 
 and between the date of the act and the 14th of July, 
 1890, a period of twelve years, there was coined $378,- 
 166,793. 
 
 "In addition to this there has been coined from 
 trade dollars $5,088,472, and from the seigniorage of 
 bullion purchased and coined under the act July 14, 
 1890, the sum of $6,641,109, making in the aggregate 
 
SEtf ATOH J. K. DOLtB. 115 
 
 $389,886,374 in full legal-tender silver money issued 
 by the government since 1878. Of this amount only 
 $58,016,000 was in actual circulation on the first day 
 of the present month, the remainder being held in the 
 treasury as part of the assets of the government, or 
 being represented by outstanding certificates. 
 
 "The act of July 14, 1890, requires the Secretary 
 of the Treasury to purchase 4,500,000 fine ounces of 
 silver bullion each month, and it provided that he 
 should continue the coinage of silver dollars, at the 
 rate of $2,000,000 per month, till the 1st' day of July, 
 1891, and under this act there has been coined $29,- 
 408,461, which makes a total coinage of silver dollars 
 under all acts since 1878, $419,294,835, or more than 
 fifty times as much as was coined during a previous 
 period of eighty-one years. In addition to the silver 
 bullion purchased by the government since 1878 and 
 coined as above stated, the Secretary of the Treasury 
 has purchased under the act of July 14, 1890, and now 
 holds in the vaults of the treasury uncoined, 124,292,- 
 532 fine ounces of silver bullion, which cost the people 
 of the United States $114,229,920, and is worth to-day 
 at the market price of silver $103,411,386, thus show- 
 ing a loss of $10,888,530. 
 
 " By the terms of the act the Secretary was required 
 to pay for all silver bullion purchased by the issue of 
 new United States Treasury notes, pa}^able in coin, 
 and it provided that upon demand of the holder of any 
 such notes they should be redeemable in gold or silver 
 coin, at the discretion of the Secretary, it being in the 
 language of the act the established policy of the 
 United States to maintain the two metals on a parity 
 with each other upon the present legal ratio, or such 
 ratio as may be provided by law. In the execution of 
 this policy of Congress it is the duty of the Secretary 
 when the necessity arises to exercise all the powers 
 conferred upon him by law in order to keep the gov- 
 ernment in a condition to redeem its obligations in 
 such coin as may be demanded, and to prevent the de- 
 preciation of either as compared with the other. 
 
116 SILVER AND COLD. 
 
 "The records of the treasury department show that 
 during the eleven months beginning May 31, 1892, and 
 ending May 1, 1893, the coin treasury notes issued for 
 the purchase of silver bullion under the act of July 14, 
 1890, amounted to $49,861,184, and that during the 
 same period the amount of such notes paid in gold was 
 $47,745,173. It thus appears that all silver bullion 
 purchased during that time, except $2,216,011 worth, 
 was paid for in gold, while the bullion itself is stored 
 in the vaults of the treasury, and can neither be sold 
 nor used for the payment of any kind of obligation. 
 How long the government shall thus be compelled to 
 purchase silver bullion and increase the public debt by 
 issuing coin obligations in payment for it is a question 
 that congress alone can answer. It is evident that if 
 the policy is continued and the Secretary of the Treas- 
 ury be compelled to issue bonds or otherwise increase 
 the interest-bearing debt, it will be done for the pur- 
 pose of procuring gold with which to pay for silver 
 bullion purchased under the act referred to." 
 
 There is to be added to our stock of silver bullion 
 the purchases made since this interview was had. The 
 intrinsic value of the silver dollar is to-day $0.56 ; 
 present value of an ounce of silver, $0.726. Under the 
 Bland and Sherman acts we have purchased 460,000,000 
 ounces of silver at a loss, at the present prices of silver 
 bullion, of $134,957,000. 
 
 One of the causes that sends gold abroad is a bal- 
 ance of trade against us. Gold is the standard of all 
 the commercial countries of Europe, and all our im- 
 ports from there must be paid for in gold. 
 
 A tariff that causes what we consume to be made 
 at home tends to increase our exports and diminish our 
 imports, and to bring gold to us instead of sending it 
 out of the country. Then American travelers must 
 
3. N. DOLPH. Il7 
 
 provide gold for their expenses in Europe, and they 
 carry a great deal of gold abroad annually, but the 
 principal cause of the drain of gold from this country 
 is the fact that we are debtors to the people of foreign 
 countries, and when they demand payment we must 
 send the gold abroad to liquidate our indebtedness. 
 
 During our recent financial disturbances there was 
 a large exportation of gold. The stock of free gold in 
 the treasury, that is, the amount of gold over and above 
 the $100,000,000 reserved for the redemption of legal 
 treasury notes, was exhausted and the reserve was en- 
 croached upon. This condition, in my judgment, was 
 largely caused by the fear of our European creditors 
 that we would go to the silver standard in the United 
 States, and the consequent disposition on their part to 
 recall their investments in this country. If we should 
 adopt free coinage of silver and go to a silver basis, 
 whenever an American citizen should go abroad he 
 would be compelled to exchange the silver currency of 
 the United States for gold, paying a premium equal to 
 the difference between the intrinsic value of the two 
 metals, and the same thing would be true concerning 
 the payment of any balance of trade against us, and of 
 the payment of our foreign creditors. 
 
 There is a great deal of absurd talk about the 
 friends of silver and the enemies of silver. I am 
 neither a friend of gold or an enemy of silver. I am 
 in favor of the use of the two metals as money when- 
 ever possible. The advocates of free coinage denounce 
 those who oppose free coinage of silver as the enemies 
 of silver, and as gold bugs, etc. Nothing could be 
 more unjust. No legislation favored by those who 
 believe that the gold standard should be maintained 
 
118 SILVER AND GOLD. 
 
 is for the purpose of discriminating against eithei 
 metal. 
 
 I have no doubt but that the repeal of the Sherman 
 law, the cessation of the purchase of silver by the gov- 
 ernment, and the throwing of the 4,500,000 ounces of 
 silver monthly now purchased by the United States 
 upon the markets of the world, would still further de- 
 preciate the price of silver ; but the Sherman law has 
 failed to keep up the price of silver bullion, and threat- 
 ens under existing conditions, for which the law is not 
 responsible, to force us to a silver standard. 
 
 I do not believe that the free coinage of silver 
 would maintain the price of silver bullion or benefit 
 silver f r xlucers, while it would bring disaster upon the 
 country I claim to have been a better friend to the 
 producers of silver than those who have favored free 
 coinage. I have never thought that the purchase of 
 silver by the government and coining it into silver 
 standard dollars required to be received at their face 
 for public arid private dues, or storing it in the vaults 
 of the treasury, was in accordance with sound financial 
 principles ; in other words, that such a course could be 
 continued indefinitely, and the parity between the gold 
 and silver dollar be maintained. 
 
 I believe, however, with the continuance in power 
 of the Republican party, the Sherman law might have 
 continued in force for some time to come without any 
 disastrous effects. The repeal of the Sherman law 
 without any substitute by throwing upon the markets 
 of the world monthly 4,500,000 ounces of silver bullion 
 now purchased monthly by the government, should the 
 present production of silver continue, will necessarily 
 greatly depreciate the price of silver bullion. 
 
SENATOR J. N. DOLPH. 119 
 
 It will stop the increase of our circulating medium 
 by the issue of treasury notes. It will not, in my judg- 
 ment, restore confidence or greatly improve the busi- 
 ness situation. I fear, on the contrary, that it will 
 make it worse. It may, however, prevent what is 
 threatened, viz, the parting company of the silver and 
 gold dollar, and enable the government to float its load 
 of silver currency upon our present stock of gold. 
 This will only be the case, however, by the repeal of 
 the law unaccompanied by any measure calculated to 
 shake confidence in the financial ability of the govern- 
 ment, and by such a decided action of congress as to 
 make it certain that there is no further danger of free 
 coinage of silver, and that it is the policy of the govern- 
 ment to maintain the gold standard, and to redeem and 
 retire the silver currency by substituting treasury notes 
 redeemable in gold on presentation, or to maintain our 
 present circulation of silver currency at par with gold 
 under the present or additional provisions for its re- 
 demption in gold. 
 
 Some persons talk about the redemption of our sil- 
 ver currency in gold as if it were, like our legal tender 
 currency, redeemable on presentation. Others ignore 
 entirely the provision which has been made by law for 
 the redemption of silver currency in gold, and point to 
 the fact that standard silver dollars pass current at 
 their face in this country as evidence that free coinage 
 of silver would make the legal ratio in the United 
 States between gold and silver 16 to 1, the actual ratio 
 of the intrinsic value of the two metals. 
 
 I do not believe that the Secretary of the Treasury 
 is authorized under the Sherman act to redeem the 
 treasury notes issued under it in gold when the gold re- 
 
120 6iLVER A&D GOLD. 
 
 serve is encroached upon, or to sell bonds to obtain 
 gold to redeem them. They should, under the law, 
 have been paid in silver coin when there was no longer 
 gold with which to redeem them without encroaching 
 upon the gold reserve, but the course pursued by the 
 Secretary of the Treasury no doubt helped to maintain 
 the parity between gold and silver. 
 
 In several of the States and Territories one of the 
 principal industries is silver mining. The owners of 
 silver mines and those engaged in dependent industries 
 are interested in having a market for the products of 
 the mines at prices for silver bullion which will make 
 mining profitable and the mining regions prosperous. 
 Their reasonable demands upon the general govern- 
 ment, in this regard, have heretofore been more than 
 complied with. 
 
 Under the Bland act the government became a 
 forced purchaser of silver to the value of 12,000,000 per 
 month, and under the Sherman act of 4,500,000 ounces 
 of silver bullion per month, all in a vain endeavor to 
 prevent the further depression of silver bullion. I 
 greatly sympathize with these people, and if some one 
 can devise a scheme by which silver mining can be pro- 
 tected without injustice to other interests quite as de- 
 serving and without danger to our finances and our 
 credit, I should be very glad to support it. 
 
 It is evident that the Sherman law, even if it could 
 be safely continued, will not be sufficient to keep up 
 the price of silver bullion, and owing to its deprecia- 
 tion, silver mines are already closing down. Undoubt- 
 edly the law has helped to sustain the price of silver by 
 withdrawing from the world's market so large an 
 amount of silver bullion. 
 
SENATOR J. tf. 
 
 121 
 
 While I have reluctantly concluded, notwithstand- 
 ing the disastrous effect of the repeal on the price of 
 silver bullion and the silver-mining industry, that the 
 Sherman law should be repealed to prevent greater dis- 
 aster, I am not willing to admit that that law is re- 
 sponsible for existing financial and business conditions, 
 and I do not expect its repeal will greatly relieve us 
 from such conditions. The proposition to repeal the 
 provision of the Sherman law, authorizing the purchase 
 of silver bullion, to receive my support, must not be 
 connected with any other measure which would be 
 equally or more injurious to the credit of the govern- 
 ment and the finances of the country, such as the re- 
 moval of the tax upon State-bank issues or free coinage 
 of silver 
 
122 SILVER AND GOLD. 
 
 CHAPTER III. 
 
 BY SENATOR GEORGE G. VEST OF MISSOURI. 
 
 To quote from the Republican platform adopted at 
 Minneapolis, June, 1892: "The American people, 
 from tradition and interest, favor bimetallism, and the 
 Republican party demands the use of both gold and 
 silver as standard money, with restrictions and under 
 such provisions, to be determined by legislation, as will 
 secure the maintenance of the parity of values of the 
 two metals, so that the purchasing and debt-paying 
 power of the dollar, whether of silver, gold, or paper, 
 shall be at all times equal. The interests of the pro- 
 ducers of the country, its farmers and its workingmen, 
 demand that every dollar, paper or coin, issued by the 
 government, shall be as good as any other. We com- 
 mend the wise and patriotic steps already taken by our 
 government to secure an international conference to 
 adopt such measures as will insure a parity of value be- 
 tween golc r*l silver for use as money throughout the 
 world." 
 
 The Democratic convention at Chicago, June, 1892 ; 
 " We hold to the use of both gold and silver as the 
 standard money of the country, and to the coinage of 
 both gold and silver without discriminating against 
 either metal or charge for mintage, but the dollar unit 
 of coinage of both metals must be of equal intrinsic 
 and exchangeable value, or be adjusted through inter- 
 national agreement, or by such safeguards of legislation 
 as shall insure the maintenance of the parity of the twc 
 metals, and the equal power of every dollar at all times 
 in the markets, and in payment of debt; and we de- 
 mand that all paper currency shall be kept at par with 
 and redeemable in such coin. We insist upon thi 
 
SENATOR GEORGE G. VEST. 
 
 policy *s especially necessary for the protection of the 
 farmers and laboring classes, the first and most defense- 
 less, victims of unstable money and a fluctuating cur- 
 rency." 
 
 I assume that after reading the platforms of the two 
 great political organizations of the country, no one can 
 intimate that there is anything partisan in the joint res- 
 olution which I have offered. To vote against this 
 resolution, whether that vote come from one side of the 
 Chamber or the other, is to declare to the people of the 
 United States what is believed already by many of 
 diem, that the platforms of political parties are mere 
 traps to catch votes, without sincerity and without 
 honesty. It is time that the people should know 
 whether politics is a juggle and fraud, or whether, 
 when the great political parties which seek to control 
 the destinies of a free people meet in council and make 
 solemn declaration of policy and principle, they are 
 worthy of confidence. 
 
 We are told that the repeal of the so-called Sherman 
 act, or the purchasing clause of it, is all that is necessary 
 at the present conjuncture, and that the clouds will be 
 immediately lifted from the business and financial hori- 
 zon, and the sun of prosperity again beam ipon every 
 portion of our land. 
 
 I was never the friend of the so-called Sherman act. 
 I voted against it, spoke against it, denounced it as a 
 makeshift, and declared it to be the worst measure for 
 silver and for bimetallism that could be invented and 
 placed upon the statute book. I am in no sense re- 
 sponsible for its enactment. To-day its malign and 
 distorted features look out upon a land staggering and 
 reeling upon the verge of bankruptcy. Its putative 
 
124 SILVER AND GOLD. 
 
 fathers have bastardized it, and are falling over each 
 other now in a vigorous attempt to prove that they 
 never favored it, and are not responsible for its exist- 
 ence. 
 
 In the report of the Herschell committee, appointed 
 by the British House of Commons to investigate the 
 question of mintage in India, the principal reason given 
 for stopping the coinage of silver by private persons in 
 the Indian mints is that the Sherman act might at any 
 time precipitate upon the world a mass of silver that 
 would probably cause a decline of its value to such an 
 extent as to make free coinage in India absolutely 
 ruinous. So this measure, introduced here ostensibly 
 in the interest of silver, has come home to roost like a 
 young chicken as a curse to silver. That act to-day is 
 like a houseless and homeless legislative dog. There 
 is no one to give it. even a bone, and it can not find a 
 kennel in which to hide its dishonored head. 
 
 If the issue presented now to the congress of the 
 United States and the American people was simply the 
 repeal of the Sherman act, I take it there would be very 
 little debate and singular unanimity in our action ; but 
 the issue has gone beyond the repeal of the Sherman 
 act. It is no longer a question of eliminating that 
 statute, but it has grown into a question so grave and 
 momentous that the congress of the United States 
 must of necessity earnestly consider it before going 
 any further in the direction which has been indicated 
 to us. 
 
 The question now before congress and the American 
 people is one of bimetallism. Every intelligent man 
 knows it. There is no citizen of the United States to- 
 day, who has given any attention to public affairs, who 
 
SENATOR GEORGE G. VEST. 125 
 
 read the message of the President of the United 
 States ; who has seen the utterances of those who en- 
 joy his especial confidence, who does not know that we 
 stand now face to face with the great question of bimet- 
 allism or a single gold standard. 
 
 The time for makeshifts and evasions and subter- 
 fuges has passed. No man in this country is so igno- 
 rant that he does not know that under the circumstances 
 and with the declarations made by its advocates, the 
 unconditional repeal of the Sherman act stamps forever 
 upon our financial policy the single gold standard. 
 Not one silver dollfcr will ever be coined in this country 
 again if we permit the purchasing clause of the Sher- 
 man act to be repealed without a guarantee as solemn 
 as the great necessities of the people, that silver shall 
 continue to exist in the United States as a money 
 metal. 
 
 I have been known as a steadfast and unflinching 
 friend of the president. I defended him when assailed 
 in the canvass for nomination ; I defended him in the 
 campaign, and in every speech I made to the people of 
 Missouri I declared that Mr. Cleveland, like myself, 
 was a bimetallist, and that we only differed in regard 
 to the ratio at which the coinage of silver should be 
 had. I had the right to make that statement, because 
 he had accepted the nomination upon a platform that 
 pledged the Democratic party to bimetallism. It was 
 as well known that the Democratic party stood upon 
 the doctrine of bimetallism as that it met in Chicago 
 and nominated Grover Cleveland for president of the 
 United States. 
 
 I do not undertake to say now that the president 
 fe opposed to bimetallism. I do not undertake to say 
 
126 SILVER AND GOLD. 
 
 that he would not give his executive sanction to a 
 measure that coined silver at the commercial ratio with 
 gold, but I do undertake to say that his message is most 
 significant from what it fails to say. I undertake to 
 say now, with the greatest respect for him and with 
 not the slightest doubt as to the honesty of his inten- 
 tions, when he fails in this great state paper at such a 
 contingency to say one word in regard to bimetallism, 
 it certainly means that he considers the free coinage of 
 silver at any ratio so impracticable that it does not need 
 executive notice. If a bimetallist at all, it would be an 
 insult to the intelligence of the president to believe that 
 under the circumstances he would have deliberately 
 sent this paper to us and to the world without having 
 indicated in some way that he was willing to bring 
 about and maintain bimetallism on some terms in the 
 United States. 
 
 When during the last congress it was proposed to 
 pass a free coinage bill at the ratio of 16 to 1, although I 
 had repeatedly voted for such a bill, although I had in- 
 troduced a bill which passed the senate and went to 
 the house of representatives identical in its provisions 
 with that which was offered here, I moved to postpone 
 the consideration of that measure until after the No- 
 vember election because our party had met and declared 
 its platform and nominated its candidate, and I believed 
 that in simple justice and in the spirit of fair play, Mr, 
 Cleveland should be permitted to go before the Ameri- 
 can people upon our platform and that the silver ques- 
 tion, as it had been disposed of in that platform, should 
 become an issue and be submitted to the American peo- 
 ple ; but I did not mean to indicate for an instant that 
 in voting for the postponement of the question at that 
 
DAVID B. HILL, 
 
SENATOR GEOKGE G. VEST. 129 
 
 time I gave up the great doctrine of bimetallism as es- 
 tablished by the traditions and policies of our people 
 and enshrined in their hearts to-day. In that sessior, 
 of congress I took occasion in discussing the financial 
 question to make the declaration, by which I stand 
 now: 
 
 " I have supported the free coinage of silver princi- 
 pally upon the ground that I oppose all class legislation. 
 I have never been (perhaps it has been my obtuseness) 
 able to see the justice of permitting a man who owns a 
 gold mine to go to the mints, the common property of 
 the people, and coin his gold without expense, and deny 
 the same privilege to the owner of a silver mine, who 
 is an equal owner in the mints of this country, and who 
 possesses a product which under the constitution is a 
 money metal. If it is proposed now, and we are rapidly 
 nearing that issue, to strike down silver as a money 
 metal in this country, I distinctly state that I shall be 
 found in favor of bimetallism as established by the con- 
 stitution of the United States and by the traditions of 
 the American people." 
 
 I am anxious to avoid the slightest misstatement or 
 to make any unjust criticism upon the present adminis- 
 tration of my own party, but I do not feel myself at 
 liberty, in view of the responsibilities imposed upon me, 
 to refrain from stating emphatically my conviction that 
 we must determine now the question of bimetallism or 
 the gold standard. 
 
 In addition to what I have said in regard to his 
 message, what intelligent man believes that, without 
 the knowledge that the sentiments expressed therein 
 were in consonance with the opinions of the chief exe- 
 cutive, the head of the great banking department of 
 this government would have come out in a magazine 
 
180 SILVER AND GOLD. 
 
 article, which I have before me, declaring for the single 
 gold standard and announcing to the American people 
 that silver was doomed and must cease to be a money 
 metal in the United States? 
 
 I have the right as a public man and as a private 
 citizen to assume that when an officer of this govern- 
 ment, in control of its banks, near to the secretary of 
 the treasury and in daily intercourse with him, ap- 
 pointed by the president of the United States and con- 
 firmed by the senate when the president himself knew 
 that there was a difference of opinion in regard to that 
 appointment, and that the Democratic party by a large 
 majority and many Republicans deferred to his opinion 
 in voting for that confirmation I say that I have a 
 right to assume that with these relations the comptroller 
 of the currency does not antagonize the opinion of the 
 president upon this great issue. 
 
 I do not conceal from myself the desperate char- 
 acter of the contest which has come upon us. I recog- 
 nize the fact that the money power of the civilized 
 world through its authorized exponents is against silver 
 to-day as a standard metal. I do not attempt to delude 
 myself into the opinion or impression that we are not 
 entering upon a doubtful conflict. It has been the his- 
 tory of finance in all ages of the world that centraliza- 
 tion and consolidation managed in one way or another 
 to impress itself upon the destinies of all peoples. It 
 is known as well as the names of the different countries 
 upon the map of the globe that a few men, not exceed- 
 ing perhaps one dozen, can to-day influence the finances 
 of the whole world and can make and unmake even 
 kings and emperors, obliterate frontiers, and change the 
 destinies of the human race. 
 
fiENRTOR GEORGE G. VEST. 131 
 
 England in 181.5 overthrew Napoleon I., and to do 
 this the younger Pitt plunged the English people into a 
 vortex, as was supposed then by intelligent men, of 
 absolute bankruptcy. Scarcely had the battle smoke 
 cleared from the field of Waterloo and the shattered 
 columns of the old guard had been broken in flight, 
 when England, in 1816, went to the gold standard. 
 An enormous debt had been created. To-day the con- 
 sols of Great Britain govern the empire ; all invest- 
 ment, all trust money, all the financial interests of the 
 country are represented by the consols, and the blood 
 of the body politic ebbs and flows with the rise and fall 
 of its consolidated debt. 
 
 England went to the gold basis because deeply in- 
 debted to the Rothschilds and others for money which 
 had been employed against the great emperor. In 
 order to float that debt, in order to consolidate it, in 
 order to keep in" hand the finances of that country, a 
 great commercial people, dependent not upon agricul- 
 ture, but upon trade and commerce and finance, it be- 
 came absolutely necessary that they should go to the 
 gold standard in order to please the money-changers of 
 the world. 
 
 The policy of the English Empire, aggressive and 
 distinct in all its features, can be easily understood by 
 the ordinary student of history, not to say of finance. 
 It is the policy of Great Britain to centralize. Her 
 vast colonial system consists of tributaries that pour 
 their wealth into the great lake of England. The home 
 country is first to be considered, and the colonies held 
 by British arms are made tributary to the commercial 
 and financial interests of the English people proper at 
 home. 
 
132 SILVER AND GOLD. 
 
 This is the policy of the English government. All its 
 colonies are simply provinces, and the great salient and 
 objective point of all its legislation and policy is to con- 
 centrate wealth and power in the home government and 
 with the home people. Is it any wonder, then, that 
 England is to day and has been since 1816 for the gold 
 standard ? It enables her to command the commerce 
 of the world because gold is the money of commerce 
 Mr. Jefferson declared as the result of his wonderful 
 researches that the money of the American people 
 should be gold and silver. Gold, he said, is the money 
 of commerce, foreign commerce, intercourse between 
 nations and bankers. 
 
 The fact that a large value can be put in a small 
 compass, the facility of transportation, the ease of stor- 
 age, all give to gold attributes which no other metal can 
 possibly have ; but is it to be said that silver has not its 
 uses? Silver has always been the money of the people, 
 not of the bankers and capitalists and usurers, but of 
 the common, plain people, as Lincoln termed them, 
 who, in their domestic barter and everyday business at 
 home, do not need this red despot of gold, but silver, 
 with which they and their fathers have always been 
 familiar. 
 
 We are told . that overproduction is the cause 
 of the fall of silver in price, that it has not been 
 legislation, but that natural causes, the law of supply 
 and demand have brought silver to its present value in 
 the markets of the world. 
 
 Let me ask my friends, the monometallists, one ques- 
 tion. Was there an overproduction of silver in 1873, 
 when it was demonetized in this country by striking the 
 silver dollar from the coinage of -the United States ? 
 
SENATOR GEOEGE G. VEST. 133 
 
 Had there been overcoinage of silver 'so as to glut the 
 markets and bring down its price under natural rules? 
 We have the authority of the distinguished senator from 
 Ohio [Mr. SHERMAN], of the secretary of the treasury 
 to-day, Mr. Carlisle, and of the reports of the treasury 
 department that but eight million of the standard dol- 
 lars had been coined in the United States from 1792 to 
 1873 : we put but $8,000,000 in circulation, and not so 
 many, because the reports of the director of the mint 
 from year to year show that the coin of the country 
 goes into industrial pursuits and is used by the jewelers 
 and artificers in precious metals, and a portion of that 
 18,000,000 must have been so used. Yet with this in- 
 considerable amount coined by this government from 
 1792 to 1873, it was deemed necessary in the latter 
 year to strike out the silver dollar from the coinage of 
 the United States. 
 
 It makes no difference who demonetized silver in 
 1873. We have had many explanations. The most 
 plausible was that the standard dollar as it then ex- 
 isted was inconvenient. No other reason which has 
 ever been given, in my opinion, afforded one shadow of 
 excuse for that action. 
 
 My point made here now to be answered is, if over- 
 production and overcoinage of silver has caused its 
 present depreciated value, how did the coinage of 
 8,000,000 standard dollars in 1873 justify or cause the 
 action of congress at that time ? 
 
 The two precious metals have fluctuated, as they 
 necessarily must, in all ages of the world ; first silver 
 being produced in excess of gold and then gold in ex- 
 cess of silver. How is it possible that it could be 
 otherwise ? What intelligent man for a moment could 
 
134 SILVER AND GOLD. 
 
 advance the idea that two metals, dependent upon the 
 quantity discovered in the bowels of the earth, should 
 be mathematically or logically equal at all times in 
 quantity or ratio ? 
 
 After Cortez had conquered Mexico and had sent 
 back to Spain the gold which he had taken from 
 Monteznma and his successors, and from the provinces 
 of Mexico, even robbing their temple in order to satisfy 
 Spanish greed, all this treasure which we are accus- 
 tomed to look upon as fabulous, but which in reality 
 amounted to about $30,000,000 a year, failed to affect 
 the markets of the precious metals in the Old World. 
 It was not until a peasant who was hearding a flock of 
 llamas at Potosi, in upper Peru, happened to discover a 
 silver mine of fabulous richness that the price of the 
 two metals was seriously disturbed in the markets of 
 Europe. For many years, as shown by this table, gold 
 was produced in the most insignificant amounts, while 
 silver was produced twenty, thirty, and thirty-two 
 times in excess annually of the production of gold ; yet 
 the price of silver was not affected and it maintained 
 its place as a money metal. 
 
 In order to show that my statement is absolutely cor- 
 rect, I have taken the trouble to make a calculation, 
 based upon the Soetbeer table. From 1833 to 1840 
 there was produced thirty-two times as much silver as 
 gold in the world ; from 1841 to 1850, fifteen times as 
 much; from 1851 to 1855, five times as much; 
 from 1855 to 1860, four times as much ; from 
 1861 to 1865, six times as much ; from 1866 to 1871, 
 three times as much ; from 1871 to 1875, twelve times 
 as much; from 1876 to 1880, sixteen times as much; 
 from 1881 to 1885, twenty times as much ; and from 
 
SENATOR GEORGE G. VEST. 135 
 
 1886 to 1892, from eighteen to twenty-five times as 
 much. 
 
 Now, I assert that these tables show, if they are 
 worth the paper upon which they are printed, that the 
 relative proportion of silver to gold has never been as 
 great as it was in the eras I have named here, from 
 1833 to 1844 and from 1844 to 1850. 
 
 We hear upon every side the assertion that the pro- 
 duction of silver which amounted to $74,000,000, ac- 
 cording to the report of the director of the mint, in 1892 
 in the United States has caused its decline. There were 
 $33,000,000 of gold produced in this country for 1892, 
 the production of silver being about 2 to 1, and it is 
 said that this accounts for the attack upon silver as a 
 money metal and the attempt now to destroy it through- 
 out the world. From 1832 to 1840, thirty-two times as 
 much of silver was produced as of gold. If it be a 
 logical proposition that the overproduction now has 
 destroyed silver, why was it then not blotted out from 
 the face of the earth as a medium of exchange and of 
 standard value ? 
 
 I call attention to the price of silver, which it ib said 
 is affected by overproduction. From 1833 to 1840, 
 when there was thirty-two times as much silver as gold 
 produced in the world, silver was worth in this country 
 $1.29 and $1.32 an ounce. From 1841 to 1850, when 
 there was fifteen times as much silver as gold produced, 
 silver was still worth $1.29 to $1.31 an ounce. I quote 
 from the report of the director of the mint. From 
 1851 to 1855, when there were five times as much silver 
 produced as gold, silver sold in the United States from 
 $1.32 to $1.35 an ounce, being an increase of from 3 to 
 f cents on the ounce. From 1855 to 1860, when there 
 
186 SILVER AND GOLD. 
 
 were four times as much produced, it sold from $ 1.34 to 
 $1.36 an ounce. 
 
 The decrease in the production of silver, as it would 
 appear from this table, in 1850-'51, was not really a de- 
 crease in the mining production, but there was a vast 
 increase from 1850 to 1855 in the production of gold on 
 account of its discovery in California and Australia and 
 the reworking of the mines in Siberia. It is absolutely 
 impossible under the rules of logic, if our friends be 
 correct that overproduction is the cause of the present 
 condition of silver, that this enormous overproduction 
 should have existed in the eras I have named and yet 
 not have brought about the same result. 
 
 I have said, that it was impossible that these metals 
 should remain logically and mathematically at the same 
 ratio. Many circumstances and facts affect this ratio. 
 Who will undertake to say now, unless he has the gift 
 of prophecy, when the gold mines will cease to produce ? 
 There have been times in history and we have them 
 upon such proof that no doubt can exist when the 
 production of gold absolutely ceased, at other times 
 when the production of silver absolutely ceased. Is it 
 wise statesmanship for the representatives of the people 
 to put themselves absolutely in the power of any one 
 metal uncertain and precarious in the supply? Sup- 
 pose to-morrow the gold production of this country 
 should fall off one-half and of the world one-third, what 
 would be the result ? The United States, if it had 
 eliminated silver, would be found absolutely at the 
 commercial mercy of the vast hoards of gold which for 
 war purposes have been piled up in the treasuries of 
 continental nations and of England. Should we not 
 tatber rsly upon both metals in whose production na- 
 
SENATOR GEOKGE G. VEST. 137 
 
 ture preserves an equilibrium? I can produce authority 
 much higher than mine in regard to the precarious na- 
 ture of these metals. The present Secretaiy of the 
 Treasury said in 1878, when discussing the question 
 upon which I have the honor now to address the sen- 
 ate: 
 
 " I know that the world's stock of precious metals is 
 none too large, and I see no reason to apprehend that it 
 will ever become so. 
 
 "Mankind will be fortunate indeed if the annual pro- 
 d action of gold and silver coin shall keep pace with the 
 annual increase of population, commerce, and industry. 
 According to my view of the subject, the conspiracy 
 which seems to have been formed here and in Europe to 
 destroy by legislation and otherwise from three-sevenths 
 to one-half of the metallic money of the world is the 
 most gigantic crime of this or any other age. The con- 
 summation of such a scheme would ultimately entail 
 more misery upon the human race than all the wars, 
 pestilence, and famine that ever occurred in the history 
 of the world. The absolute and instantaneous destruc- 
 tion of half the entire movable property of the world, 
 including houses, ships, railroads, and all other appli- 
 ances for carrying on commerce, while it would be felt 
 more sensibly at the moment, would not produce any- 
 thing like the prolonged distress and disorganization of 
 society that must inevitably result from the permanent 
 annihilation of one -half of the metallic money of the 
 world." 
 
 Why, for sane men in a country that stands upon the 
 bed rock of independence to put themselves in the hands 
 of the monarchies of Europe, in the hands of the gold 
 manipulators, who at any time can fix the price of the 
 property of the world if they see proper to do so, is not 
 only a crime, as the Secretary of the Treasury has de 
 
188 
 
 SILVER AND 
 
 clared it, but a crime so monstrous that no punishment 
 could be adequately inflicted for its commission. 
 Thomas Jefferson dreamed of an ideal republic, and 
 what was it ? He said : 
 
 " Let us found a government where there shall be no 
 extremely rich men and no abjectly poor ones. Let us 
 found a government upon the intelligence of the people 
 and the equitable distribution of property. Let us 
 make laws where there shall be no governmental part- 
 nership with favored classes. Let us protect all in 
 life, liberty and property, and then say to every Ameri- 
 can citizen, with the gifts that God has given you, your 
 brain and brawn and energy, work out your own for- 
 tunes under a just government and equal laws." 
 
 If Jefferson could to-day revisit the earth, or if the 
 dead can take notice of the affairs of the living, what 
 would he think of this countiy which he helped to es- 
 tablish and whose independence he put in letters of liv- 
 ing fire upon the pages of history, if he should find 
 sixty-seven million of freemen, with a continent for an 
 inheritance, with the rain and sunshine and dew, the 
 mountains and rivers, with almost illimitable resources, 
 in the hands financially of a dozen men in New York, 
 who make and unmake, and who can in an hour so 
 hoard the currency of the whole country as to produce 
 a money famine, and then exact from the people their 
 own terms? 
 
 I desire to enter into no philosophical nor sentimen- 
 tal essay. I am an American, and I trust practical in 
 the consideration of every question ; but the genius of 
 our institutions and of our people, the fundamental 
 doctrines upon which we exist as a nation, the instinc- 
 tive feeling of every true American, no matter of what 
 
SEKATOR GEORGE G. VEST. 139 
 
 political belief he may be, must be naturally against the 
 policy that centralizes and consolidates the fearful 
 power of money in the hands of the few against the 
 many. For myself, I would give up every doctrine 
 of my life and every feeling of my nature if I did not 
 stand now to the last against legislation that would 
 further extend this centralization. 
 
 But we are told that silver must be demonetized 
 because it fluctuates in value ; that gold is stable and 
 silver is the changing child of caprice and circum- 
 stance. John Monteath Douglas, a business man in 
 the city of London, who has unquestionably studied 
 this question, says : 
 
 "Silver has really fluctuated much less than gold. 
 Till December, 1888, and on to end of 1891, it con- 
 tinued to rise in value as compared with the average of 
 commodities, just as gold did, but much less, and keep- 
 ing a much closer and more uniform relation to the 
 prices of commodities than gold did. See list of prices 
 next page. The gold price of silver was 'lower 1 in 
 1888 and 1889 than it had been at any time within 
 memory, but the gold prices of commodities were on 
 the average lower still, as explained below in detail, so 
 that silver had maintained its price, or rather risen in 
 comparison with the average of commodities." 
 
 I can not resist saying parenthetically that the fal- 
 lacy and the delusion of the argument made by the 
 monometallists in regard to the fall of silver is based 
 upon the idea, not of its purchase of commodities, but 
 the value of silver in gold. All the statisticians and 
 financiers of the world whose declarations are worth 
 anything put the criterion as to the value of the pre- 
 cious metals upon their ability to purchase the neces- 
 
140 SILVER AND GOLD. 
 
 Baries of life. Any other criterion is false. When you 
 can take so much silver and buy so much meat and so 
 much bread, although gold may go up and silver still 
 continues to buy the same quantity of meat and bread, 
 it has not fallen. Silver, as this writer says, has not 
 fluctuated under this great criterion of its power to 
 purchase the necessaries of life, and the tables of the 
 most eminent statisticians show it. 
 
 As a matter of course, it was absolutely impossible 
 that these commodities and silver should be mathemat- 
 ically equal. That would be unnatural and impossible, 
 but I make the statement here now and invite my 
 friends the monometallists to disprove it, that the pur- 
 chasing quality of silver has remained more stable than 
 that of gold. Gold has fluctuated. Gold has gone up 
 and gold has gone down, but silver has remained more 
 nearly equal in its purchasing power from age to age, 
 notwithstanding all the mutations of mining and of 
 commerce, than has the gold metal. 
 
 As a matter of course, articles of necessity have 
 fluctuated. It goes without saying that the failure of 
 a crop and other vicissitudes, the law of supply and 
 demand, which is invoked so often, will cause fluctua- 
 tions in these articles. It would be just as absurd to 
 say that they always remain the same at any standard 
 as to say that gold and silver could always remain ex- 
 actly equal. But the fact still remains that in the 
 eras which are used by these statisticians the fluctua- 
 tions in silver have not been so sudden or violent as 
 the fluctuations in gold. 
 
 It is true that in the long period from 1803 to 1873 
 both silver and 1 gold fluctuated in value, and it is true 
 that during that period gold went to a premium of 1J 
 
JENATOR GEORGE G. VEST. 141 
 
 per cent, in France, and virtually went out of circula- 
 tion, as is always the case ; but it is also true, as shown 
 by Chevalier, that with the exception of this era, 
 which lasted but a few years, silver was the ruling 
 metal in France. Silver was the standard of value 
 really, although gold was also used. When the great 
 Australian and Californian discoveries were made, gold 
 poured into France and into Europe at such a rate 
 that this whole book, Chevalier on Gold, is devoted to 
 the discussion of the question how to make gold keep 
 its parity with silver. The dread in Europe then was 
 that gold would cease to be a money metal and that all 
 the continental people would be relegated to the use 
 of silver alone for all the purposes of exchange and as 
 a standard. 
 
 Even if the monometallists could reach their ely- 
 sium financially of a gold standard there would still be 
 fluctuation in prices of commodities in this and every 
 other country, and, as a matter of course, as gold in- 
 creased in value, or, to speak more properly, as gold 
 became scarcer prices would go down. Any discussion 
 is imperfect, incorrect, and unsatisfactory that does not 
 admit upon both sides what is known to the whole 
 world, and must be always known to every intelligent 
 human being, that if you increase the volume of money 
 you put up prices, and if you decrease the volume of 
 money you put them down. 
 
 I have seen the day in the vicissitudes of rny life, 
 when $20 in paper would not buy a loaf of bread, and 
 a five-dollar gold piece would buy a house and lot. I 
 want to read now, the statement of the rule, which is 
 inflexible, as to the precious metals. I read from Chev- 
 alier, who is quoted approvingly as a great authority : 
 
142 SILVER AND GOLD. 
 
 " The effects of a rise or fall in the precious metals 
 are displayed in a manner peculiar to themselves, ow- 
 ing to the attribute of money with which they are in- 
 vested. When it is said that a commodity falls in 
 value, it means that we must give a larger proportion 
 of it than previously to procure in exchange the same 
 quantity of any other article of commerce. The price 
 of that article, whether it be iron, lead, corn, wine, or 
 any other product, excepting the metal or metals of 
 which money is made, falls accordingly ; for the price 
 of a thing is its value specially compared with those 
 metals, or, to express differently the same idea, it is the 
 number of monetary units which it is necessary to give 
 in exchange for a certain weight or volume of another 
 commodity. A diminution in the value of the metal 
 from which money is essentially coined is shown differ- 
 ently in this respect, that its price remains the same ; 
 but then the price of all other commodities, without 
 exception, rises if its value compared with itself has 
 fallen, and falls if it has risen. 
 
 " I say that its price as measured by itself remains 
 the same, since for this metal, specially and exclusively, 
 the price is its value compared with itself. If, for ex- 
 ample, the value of silver falls one-half as the mon- 
 etary unit, the franc consists in France of four grains 
 and a half of silver, a kilogram in weight of fine metal 
 will still be worth 222 francs 22 cents, because one kil- 
 ogram contains four grams and a half, 222 times and a 
 small fraction ; but in this case the price of lead, iron, 
 wheat, wine, and all other commodities will be doubled, 
 because, to obtain the same quantity of these articles, 
 it is necessary to give double the quantity of silver." 
 
 There is the inflexible monetary rule. There is no 
 sort of rhetoric or declamation that can do away with 
 it. We had just as well confront this proposition now, 
 and there is no escape from it. If for any cause (and 
 I will leave the causes now to inject this remark) we 
 
SENATOR GEORGE G. VEST. 148 
 
 strike down one-half the metallic basis of value in the 
 world we double the burdens that are resting upon all 
 who owe money ; and we beyond computation almost, 
 for no man can foresee the future, put down the price 
 of commodities. 
 
 Mr. Horace White says in an article which I have 
 before me that he hopes the day will come, and he 
 wants to see it, when everything will be cheapened be- 
 cause it is to the interest of everybody that everything 
 should be cheap. He disagrees with some of his own 
 party, for it has been but a few years ago, in 1890, I 
 believe, when we were told that the words " cheap " 
 and " nasty" went together, and that cheap clothes 
 made a cheap man. Now we are told by Mr. White 
 that he wants to see the era come when commodities 
 will be reduced in price, when the wheat-growers of 
 the West instead of getting for their wheat delivered 
 at a country depot 35 and 40 cents a bushel will re- 
 ceive 15 and 20 cents, when the mortgaged indebted- 
 ness of this country will be doubled, and the man who 
 can to-day pay off his mortgage with a thousand 
 bushels of wheat must add the labor, and the priva- 
 tion, and the mental anxiety necessary to raise 2,000 
 b'ishels in order to discharge the same indebtedness. 
 
 Now let me read another extract from this paper. 
 In regard to the effect of the increase in the value of 
 gold upon prices, this gentleman, (Mr. Giffen), who is 
 now an extreme monometallist, makes the following 
 statement, as given in the essay from which I am read- 
 ing: 
 
 " He then deals with the effects of this appreciation 
 of gold on the distribution of wealth, and says: 'It 
 
144 SILVER AND GOLD. 
 
 is obvious beyond all question that these errects may 
 be important. The debtors pay more than they would 
 otherwise pay, and the creditors receive more. The 
 matter is thus not unimportant to the two large classes 
 of people who make up the community. Appreciation 
 is a most serious matter to those who have debts to pay. 
 It prevents them gaining by the development of in- 
 dustry aa they would otherwise gain.' 
 
 " As to the landowners, he shows how appreciation 
 of gold and consequent fall of prices has swept away 
 the surplus value of many estates, especially of land, 
 and also estates of other sorts, and made them insuffi- 
 cient even to pay the mortgages on them ; also, he 
 illustrates the same kind of effect on stocks of va- 
 rious sorts." 
 
 But I suppose it is not necessary to read authori- 
 ties to show that the increase in the value of gold 
 which would follow from the elimination of silver as a 
 money metal would increase the burdens of indebted- 
 ness imm&nsely all over the world, and would put 
 down the price of products, thereby taking away from 
 the debtor the ability to pay with the same amount of 
 property a debt which he had contracted upon a differ- 
 ent ratio and under a different standard. Even the 
 Herschell committee, in justifying the closing of the 
 mints in India to the private coinage of silver, makes 
 a statement to this effect, to which I ask the attention 
 of our monometallic friends. 
 
 I am not in the habit of appealing to the prejudices 
 of the poor against the rich. I know but one rule in 
 my legislative conduct, to protect all alike and treat 
 all alike, and it is not just to the debtor who has con- 
 tracted his indebtedness under silver and gold to strike 
 silver out of the currency and take more than one-half 
 fo excess c? his property to pay a debt so contracted. 
 
ARTHUR P. GORMAN, 
 
SENATOR GEORGE G. VEST. 147 
 
 No living man can justify legislation like that. If 
 we had the power now to put this country, all obliga- 
 tions being obliterated, to the test whether we should 
 have gold or silver, one standard or the other, it would 
 be a fair issue. But as we are now, with debts con- 
 tracted to the amount of $8,000,000,000 in the United 
 States, to strike down the ability by one-half of the 
 debtor to pay his obligation is not only unjust and 
 ruinous, but absolutely wicked. 
 
 Another argument is made daily and hourly by the 
 metropolitan journals. It is said we can not maintain 
 a different standard from Europe. We must not put 
 this country in a position of isolation. We must not, 
 to use a much-abused term, put a wall around the 
 people of the United States. I am not disposed to be 
 prejudiced against England. The English are a great 
 people. They understand the chief end of commercial 
 life better than any people who have ever existed, even 
 than the Venetians. I am not here to array the people 
 of the United States against those of Great Britian. 
 We come from the same lineage, and they simply exer- 
 cise the right that we exercise to take care of them- 
 selves. I can understand how an Englishman would 
 be for the gold standard. The gold standard makes 
 England financially the mistress of the world. 
 
 In 1844, after they had demonetized silver in 1816, 
 the British Parliament passed the bank act, in which 
 they made it mandatory on the Bank of England to 
 buy every ounce of gold that came from any portion 
 of the world for all time to come,' at the fixed valuation 
 of 3 17s. Sd. an ounce, a fraction over 20. 
 
 What was the inevitable result? All the world 
 except England was on a silver or a bimetallic stand- 
 9 
 
148 SILVER AND GOLD. 
 
 ard. Germany was on the exclusive silver standard 
 The Latin Union was on the silver standard. Even 
 country of any importance in the world was champion 
 ing silver ; and yet our ancestors deliberately took uj 
 the gauge of battle and said to the whole world, " You 
 shall have gold," as my predecessor here, Mr. Benton 
 said, red gold, and although their first step was chal 
 lenged to the death, they said, " Every ounce of gold 
 produced anywhere in the world shall be bought by 
 the Bank of England at the price we have named," 
 and that fixed the price of gold in the remotest parts 
 of Asia. 
 
 Every man who had an ounce of gold knew what 
 it was worth, taking off the cost of transportation. He 
 knew that the Bank of England was bound to pay that 
 or give up its charter. Their object was to make 
 England a gold emporium and chain the gold standard 
 upon the people of the whole world, and they have al- 
 most succeeded in that gigantic endeavor. By fixing 
 the price of gold they enhanced its value and forced 
 the world to take their standard. 
 
 If this country should now surrender silver it be- 
 comes like iron or lead or any other metallic commodity, 
 and its qualities as money are destroyed forever. I re- 
 peat, if I looked at this subject from the English stand- 
 point I would unquestionably advocate gold. Gold 
 represents the genius of financial centrality. If En- 
 gland can bring the whole world to a gold standard, 
 with her vast carrying trade, with her large colonial 
 system, she is mistress of commerce and finance. 
 
 Who could have stated the matter more succinctly 
 and distinctly than Mr. Gladstone did in the debate in 
 the House of Commons three months ago on the con- 
 
SENATOR GEORGE G. VEST. 149 
 
 tinuation of the Brussels conference ? Mr. Gladstone 
 said, " Why continue the conference ? What necessity 
 is there for England to send any more commissioners ? 
 We do not intend to go to anything else but the gold 
 standard. We are the creditor people of the world, 
 and we want money to have the highest purchasing 
 capacity, the largest quantity of which can be put in 
 the smallest bulk." 
 
 That is an honest statement. He said, " We do 
 not propose to negotiate." Germany has joined En- 
 gland. After Germany had wrested with iron hand 
 from France $1,000,000,000, principally in gold, she 
 looked across the channel and saw England the mis- 
 tress of the seas, and Bismarck, looking to the splendid 
 future of a consolidated empire, whose commerce 
 should rival that of Great Britian as her armies had 
 conquered France, said, " We will go to the same basis 
 financially ; we will adopt gold." Then they took their 
 silver, melted it into bars, carried it over to France 
 across the frontier, and added insult to injury by ask- 
 ing the French, after paying them 11,000,000,000 of 
 war indemnity, to coin their silver in order to help 
 them to get more gold in their rivalry with Great 
 Britain. 
 
 I have said that I believe the principal object of the 
 English government is to concentrate, as far as they 
 can, their commerce, wealth, or the products of it, in 
 the merchants of England, the commercial classes. As 
 to their nobility and the landed aristocracy, their 
 autonomy provides for them ; but in the carrying trade, 
 in the extension of commerce and the use of the in- 
 strumentalities that are most valuable to commerce, and 
 gold is one of them, they hope by constant accretions 
 
150 SILVER AND GOLD. 
 
 to make the British Empire the most magnificent the 
 world has ever seen. 
 
 Whenever one of their colonies comes in contact 
 with this system of home accretion the British Parlia- 
 ment immediately takes the province in hand and cor- 
 rects that mistake. While England ostensibly allows 
 everyone of her colonies to fix its own tariff, she man- 
 ages most decidedly and absolutely to make that tariff, 
 whatever it is, subordinate to the interest of the Eng- 
 lish manufacturer at home. 
 
 Now, there is a significant fact in regard to the de- 
 monetization or attempted demonetization of silver in 
 India, and I read again from Miis pamphlet : 
 
 " Soon after the rise of gold began in 1873 a large 
 cotton-spinning trade, begun previously in India, with 
 English machinery, to supply India itself, felt at once 
 the stimulus supplied by the difference in exchange. 
 It prospered rapidty, grew, and continues growing fast 
 and steadily, and exports to China and other silver 
 countries. Here are comparisons of the English and 
 Indian exports of cotton yarn, in pounds, to China, 
 Hongkong, and Japan, which have for some time been 
 supplied annually to the Economist by Mr. Abraham 
 Haworth, of Manchester. They show how the product 
 of silver wages beats the product of gold wages, and 
 beats them more as the divergence between the metals 
 widens. 
 
 " The quantities are given in pounds weight. The 
 contrast between the stationary quantities from En- 
 gland and the rapid expansion of the Indian export in- 
 dicates plainly a sad future for Lancashire trade if gold 
 wages there must continue competing with silver wages 
 in foreign markets. India will on the present footing 
 beat Lancashire everywhere, meanwhile in the large 
 class of goods made of Indian cottons, but ultimately in 
 any material." 
 
SENATOR GEORGE G. VEST. 151 
 
 Then follow statistics showing that from 1876 to 
 1881, England exported to China and Japan yearly 
 $38,560,000 in these cotton goods. India then exported 
 only $19,641,000. From 1882 to 1887 England had 
 dropped off to $33,682,000, India having increased from 
 $19,641,000 to $71,319,000. In 1888, one year, En- 
 gland sent to China and Japan $44,642,600 worth, and 
 India went from $71,319,000, the preceding year, to 
 $114,707,300. In 1889 England sent to China and Ja- 
 pan $35,720,200 of these cotton goods, and India $126,- 
 766,800 against $114,707,300 the preceding year. 
 
 In 1890 England exported to China and Japan $38,- 
 057,400. In the meantime, in the same year, the Indian 
 export increased from $126,766,800 to $145,112,800 
 worth of cotton manufactures, and it was time for the 
 English merchants to stop this rivalry. The child had 
 outgrown the parent. The colonial manufacturers had 
 taken away the market in Japan and China, and it was 
 necessary to do away with silver in order that the 
 monopoly of this eastern trade might go back where it 
 had originally been, in th? English manufacturer and 
 the English merchant. 
 
 We are told that the Ba/ 4 k of England controls the 
 finances of *he world. It is a poor argument, it seems 
 to me, to a people who in twenty-five years have paid 
 off two-thirds of a war debt of $3,000,000,000, to tell 
 us that England has more financial ability and is a 
 stronger country in a monetary sense than the United 
 States. The Bank of England is not the mistress, 
 financially, of the world ; it is not the largest bank in 
 the world. If our friends the monometalists would be 
 more accurate and go to the resources of the large 
 banks of the world, they would find this to be so. The 
 
152 SILVER AND GOLD. 
 
 Bank of Germany has $185,000,000 of gold and $ 100,- 
 000,000 of silver. 
 
 I call the attention of the senate to the fact that we 
 are constantly told that Germany is on a gold basis. 
 Germany has 1100,000,000 in silver thalers of full legal 
 tender quality to-day, perfectly equal with gold, and at 
 the ratio of 15J to 1. Every dollar of it is in cir- 
 culation, answering all the purposes of gold. 
 
 I see in a New York paper, carried away by the 
 enthusiasm of the gold standard, a statement that Ger- 
 many would hail with acclaim, quoting some Amster- 
 dam merchant, if we should go now to the bimetallic 
 standard and continue to coin silver, because Germany 
 would immediately unload her waste silver on the 
 United States. Has not Germany had an opportunity 
 to do that under the Bland act and under the Sherman 
 act ? If silver is a drug in the market and they want 
 to sell it at any price, why have they not brought it 
 here ? If they are so sick of it they would take any- 
 thing for it If it is the drug that they say is now creat- 
 ing financial dyspepsia in Germany, why do they not 
 throw it out, even if it takes lobelia and ipecac ? They 
 have $100,000,000 full legal tender silver, and yet Ger- 
 many is on the exclusive gold standard. The Bank 
 of Germany has $185,000,000 in gold and $100,000,- 
 000 in silver. The Bank of England, the boasted 
 mistress of the finances of the whole world, before 
 whose fetish we are to bow down now or we shall cease to 
 exist as one of the first nations of the world, has 
 $135,000,000 of gold and no silver, except subsidiary 
 coin. It is true under the law of England now mark 
 it that any man from any part of the world can 
 draw gold out of that bank ; yet whenever they find 
 
SENATOR GEORGE G. VEST. 153 
 
 that the export of gold is too large, they put up the 
 rate of interest and stop the exportation. Ostensibly 
 they say to the whole world : " We are on the gold 
 standard ; come and get all the gold you want, and we 
 will pay you ^3 17s. Sd. for every ounce you bring us." 
 Yet, the minute they find there is too much gold going 
 out, they put up the rate of interest and prevent its ex- 
 portation and contradict absolutely their pretense. 
 
 Spain has $35,000,000 in gold and $20,000,000 in sil- 
 ver. Austria- Hungary has $55,000,000 in gold, and 
 $85,000,000 in silver. The Bank of France has $330,- 
 000,000 in gold and $225,000,000 in silver, and Mr. 
 Horace White says in an article which attracted my 
 attention in the last forum, that the man who says 
 that France is on a bimetallic basis is an idiot, and 
 ought not to be listened to in any part of this country. 
 He says the poor creatures actually believe it when 
 they say it ; but they are ignorant, they do not know, 
 they are not numbered with the financial four hun- 
 dred who understand this question. France not a 
 bimetallic country with two hundred and twenty-five 
 millions of legal tender silver in the reserve of the 
 Bank of France to-day ! 
 
 And seven hundred millions of standard silver dol- 
 lars in the whole country, and yet it is not a bimetallic 
 country ! Mr. White says in this article that as soon 
 as you refuse coining a metal it is demonetized. I be- 
 long to those poor, benighted, and ignorant creatures 
 who think that when you demonetize a metal it ceases 
 to be money. Is not silver money in France to-day, in 
 Germany, in Austria-Hungary, in Holland, and in 
 Russia ? Yet he says that denying it free coinage de- 
 monetized silver ; in other words, that silver is not 
 
154 SILVER AND GOLD. 
 
 money to-day in the United States. I must conies 
 that I am benighted if his definition is correct ; but I 
 am not surprised at it. Listen to what Mr. White says 
 about this question and about India. Here is the spirit 
 of monometallism. I am not caviling about words, but 
 It shows the genius of this centralizing scheme, to use 
 no other word, which is now being urged upon ou* 
 people. He says : 
 
 " It would be rash for anybody to predict the future 
 course of events in India. We may be pretty sure, 
 however, that the men who have directed it and who 
 are responsible for its consequences have not acted 
 without careful circumspection. If they are censurable 
 at all it is for too great delay rather than for undue 
 haste. But before anybody censures them for too great 
 delay let him put himself in their place. Let him 
 charge himself with the destinies and fortunes of 250,- 
 000,000 of people, for the most part very poor and too 
 ignorant to know what is good or bad for them in a fi- 
 nancial way. 
 
 "In this last particular they are not alone among 
 the nations of the earth, but the peculiarity. in India is 
 that a handful of men have to decide the most impor- 
 tant questions without much, if any, aid from public 
 opinion, and without ever referring them to the hust- 
 ings. When it comes to questions of high finance this 
 may be an advantage to the governed, but it adds enor- 
 mously to the responsibilities of the governors and will 
 surely give them pause when such a momentous step is 
 to be taken as a change in the monetary standard." 
 
 It is a blessing to have the favored few to determine 
 these questions for you ; it is a great boon of Provi- 
 dence that a few gentlemen in New York are to deter- 
 mine this question for the American people, and all of 
 us who decline to follow them and abandon the tradi- 
 
SENATOR GEORGE G. VEST. / 
 
 ' .... 
 
 tions and policy of the government and the manifes 
 dictates of common justice are either guilty of a crime 
 intentionally, or else we are put in the role of lunatics. 
 It is a favorite expression now to talk of the "silver 
 lunacy." 
 
 I am ready to follow that great lunatic, Thomas 
 Jefferson, on this question. I am willing to follow the 
 men who made the Constitution of 1789, and said that 
 no State should make anything but gold and silver a 
 legal tender for the payment of debts. If they did not 
 mean that silver was a money metal, then the English 
 language has become so nebulous as to be useless. 
 
 The Bank of France has three hundred and thirty 
 millions of gold and $225,000,000 of silver. The Rus* 
 sian State Bank has $480,000,000 of gold. 
 
 We are told that it is impossible to sustain silver 
 in this country unless we have a conference with other 
 nations of the world and all will agree to it. France 
 sustained the bimetallic standard for eighty years be- 
 fore 1873, with Germany on one side on an exclusive 
 silver basis and England on the other with a gold basis ; 
 and to-day the French people are financially the first 
 people in existence. England, the so-called mistress of 
 finance, when the Baring failure took place and the 
 world was racked and tortured with doubt and uncer- 
 tainty, borrowed $15,000,000 in gold from the Bank of 
 France in order to sustain her credit $15,000,000 in 
 gold from a country which had $700,000,000 of legal 
 tender silver and $225,000,000 of it a bank reserve ! 
 
 Now, look at the South. There are 4,000,000 ne- 
 gro peasants, anxious to get silver. All of us who 
 know them know that they prefer silver to any metal 
 in the world. Why can we not float $500,000,000 of 
 
156 SILVER AND GOLD. 
 
 silver in this country, instead of being told that we 
 are shipwrecked if we continue the process another 
 day ? Why are we to demonetize it ? 
 
 Why, if I have heard anything, it was that to go on 
 with the increase of silve? metal, even to buy the bul- 
 lion and issue the bullion notes under the Sherman 
 act, would bring us to bankruptcy. 
 
 Why, I ask now, can we not go to silver coinage 
 with a country increasing in population as no country 
 in the world has ever increased, when we are standing 
 almost sword in hand to keep immigration from our 
 soil ? France is a finished country accompli, to use 
 their own tongue with her population fixed, and yet 
 she maintains this enormous amount of silver, and is 
 to-day the strongest nation, financially, in the world. 
 The Director of the Mint said recently, as to the finan- 
 cial power of France, and it is also valuable as show- 
 ing the effect of legislation on the price of silver : 
 
 "The French ratio of 1 to 15 J was a fixed point 
 about which the price of silver moved. The London 
 price fixed the relative value of silver and gold for the 
 commercial world, but the commercial value could 
 never vary very widely from the coinage value as long 
 as the mints of the Latin Union stood ready to trans- 
 form gold and silver into coin at the ratio of 1 to 15|." 
 
 I say that it is not the overproduction of silver 
 which has brought down its value. The reports of our 
 Director of the Mint show that the legislation of 1873 
 of this country and Germany caused the phenomenal 
 and abnormal fall in the price of silver. How could 
 we expect this metal to hold its own with gold when 
 we had taken away from it its chief value, that of 
 money ? 
 
SENATOR GEORGE G. VEST. 157 
 
 The report of the director of the mint for the last 
 year, 1892, shows that we produced in this country 
 $33,000,000 in gold, and $11,376,037 was taken for the 
 arts, leaving a little over 120,000,000 in the United 
 States of gold production and $74,000,000 in silver, out 
 of which $7,209,362 was taken for the arts $74,000,000 
 of silver, with a population of 67,000,000, increasing at 
 the rate of from 500,000 to 600,000 each year, and with 
 enormous resources and this increasing population and 
 the negro population of the South anxious to take sil- 
 ver, and preferring it, we are told that we can not float 
 silver if we have free coinage. 
 
 In the Brussels Conference I was struck with this 
 statement coming from Mr. Boissevain, the delegate 
 from the Netherlands. He said : 
 
 "In my opinion the chief cause of the fall in the 
 gold price of silver has been the enormous decrease ir 
 the monetary use of silver during the last twenty years 
 in consequence of the legislative measures which datt 
 from the new monetary law enacted in Germany." 
 
 How could we expect silver to maintain its value 
 when the two largest nations in the world, the two 
 most important nations, Germany and the United 
 States, struck it down and took away from it its money 
 value and reduced it to the basis of silver spoons and 
 forks and plate ? We give free coinage to gold, and it 
 goes up and up, and we say to it " lo triumphed Here 
 is the idol financially of the whole world ! Take away 
 the monetary value of silver, and then say, " Here is a 
 metal that is debased and depreciated." What has 
 done it ? I have read the tables to show that overpro- 
 duction did not do it. It was legislation that did it ; 
 
158 SILVER AND GOLD. 
 
 the settled determination by adverse laws for the bene 
 fit of the capitalists and the financial centralizationista 
 of the world to bring us to a gold basis for their own 
 purposes. 
 
 But there is another consideration. Argument would 
 be so potential as to amount to demonstration before I 
 would ever agree to strike down one section of this 
 country and prostrate it for all time to come. If we 
 are to destroy silver, there are a million people in the 
 Western silver-producing States whose principal pro- 
 duct is destroyed. 
 
 It was said the other day, rather dramatically, by an 
 ex-member of this body, that in the extreme West the 
 people are crying for bread and in New York they are 
 crying for gold. I have letters now in my committee 
 room from friends who went from my State to Colorado, 
 stating that they had given all they could give to the 
 houseless and homeless and hungry, and they could 
 give no longer. Suppose we to-day were called upon 
 to pass a law stopping the factories of New England. 
 Sir, language fails to describe the torrents of eloquence 
 we would hear from that section in protest. 
 
 Suppose we were called upon to strike down the 
 wheat product of the Dakotas and the Red River of 
 the North, would we not expect to hear fro me very man 
 in that section who was able to utter a sentence in pro- 
 test against this destruction of property and even of 
 life? I know how a senator feels in fighting against 
 a proposed law that he honestly believes will destroy 
 all the prosperity of his section. When the force bill 
 was here, with my convictions I would have sacrificed 
 life to defeat it ; and if I were here from one of those 
 silver-producing States in the West I would fight the 
 
SENATOR GEORGE G. VEST. 159 
 
 demonetization of silver as I fought the force bill, for 
 it involves all that those people can hold dear in the 
 way of property rights and the comforts of life. 
 
 I say arguments must be brought here " stronger 
 than proofs of Holy Writ ". to make me do this. If I 
 can, by any possibility, by legislation, tentative or 
 otherwise, keep this great disaster from those people, 
 citizens of this Republic, of the same blood and lineage 
 with ourselves, I will take the responsibility of even a 
 mistake on my part rather than perpetrate what I con- 
 sider such an outrage. I know those Western States, 
 not from description, but experience ; I know what 
 their people have endured in leaving the comforts of 
 what was then civilization in the Eastern and Middle 
 States, and going, with rifle in one hand and pick in the 
 Jther, to blaze the pathway of civilization in the canons 
 )f the Rocky Mountains. They have built up this in- 
 iustry upon the faith pledged to them by the people of 
 (he United States in its Constitution and laws that the 
 product of those mines should be considered as a money 
 metal ; and we are now asked, because the financial 
 four hundred in New York and the commercial classes 
 in England think they alone intellectually can dispose 
 of this question, to beggar these people and say to 
 them, " Find something else to do ; we wapt gold, gold, 
 gold." 
 
 A single word about the necessity for an interna- 
 tional agreement. I have endeavored as best I could 
 to study this question and I have come to this conclu- 
 sion : Every civilized country in the world has consulted 
 its own self-interest and established its own basis of 
 money. Take the report of the Herschell committee, 
 that examined into this whole question in order to aa- 
 
160 SILVER AND GOLD. 
 
 certain what were the financial systems of the different 
 countries of the world before they would make a re- 
 commendation as to India to the English Parliament. 
 
 I am told that we are to come under a regular rule and 
 that this is a scientific process, which insures unanimity 
 and international agreement. There is Russia, with 
 paper money payable in roubles, which are never seen, 
 and there is neither gold nor silver in circulation, al- 
 though they have an enormous war chest of $480,000,- 
 000 in gold. There is France, as I have shown, on the 
 gold standard, with $700,000,000 of legal tender silver. 
 There is Austria-Hungary, with gold and silver. There 
 is Holland, with a large silver circulation, though on a 
 gold standard, and so on. But I will read the synop- 
 sis, though I can not refrain from giving a crumb of 
 comfort to my friends the Populists. Here is a pros- 
 perous country, that has neither gold nor silver, but en- 
 tirely irredeemable paper. The Herschell commission 
 says in the case of Brazil : 
 
 " The case of Brazil is perhaps the most remarkable of 
 all as showing that a paper currency without a metal- 
 lic basis may, if the credit of the country is good, be 
 maintained at a high and fairly steady exchange, al- 
 though it is absolutely inconvertible and has been in- 
 creased by the act of the government out of all propor- 
 tion to the growth of the population of its foreign trade. 
 The case, it need hardly be said, is not quoted as a prec- 
 edent which it is desirable to follow. 
 
 "The Brazilian standard coin is the milreis, the par 
 gold value of which is 27 d. A certain nu in tier were 
 coined, but have long since left the country, and the cur- 
 rency is and has since 1864 been inconvertible paper. 
 The inconvertible paper was more than doubled be- 
 tween 1865 and 1888, but the exchange was about the 
 same at the two periods, and very little below the par 
 
SENATOR GEOKGE G. VEST. 161 
 
 of 27c?. It had gone down to 14d, in 1868, the date of 
 the war with Paraguay, but had risen again, and was, 
 in 1875, as high as 28|d. In 1869, when the quantity 
 of paper money was increased from 12,468,000 to 
 18,322,000, the mean rates of exchange showed an ad- 
 vance of about 11} per cent. Since the revolution which 
 displaced the empire and established the republic the 
 paper issues of the banks were increased by more than 
 30,000,000 in less than three years, so that the paper 
 issue in 1892 amounted to 51,872,700, and as the re- 
 sult of this and of diminished credit the exchange in that 
 year ranged from 10|c?, to 15fd." 
 
 It is a remarkable fact that Brazil to-day has neither 
 gold nor silver as a basis, but has simply fiat and in- 
 convertible money. 
 
 But I come now to the synopsis and conclusion of 
 the commission after examining all the financial sys- 
 tems of the world : 
 
 " It is impossible thus 'o review foreign systems of 
 currency without feeling tLat, however admirable may 
 be the precautions of our own currency system, other 
 nations have adopted different systems which appear to 
 have worked without difficulty, and have enabled then. 
 to maintain for their respective currencies a gold stand- 
 ard and a substantial parity of exchange with the gold- 
 using countries of the world, which has, unfortunately, 
 not been the case with India. This has been effected 
 under all the following conditions, viz " 
 
 I ask attention to this extraordinary condition of 
 financial affairs, when it is demanded of us that all the 
 world shall come to one ratio and standard of value 
 
 " (a) With little or no gold coin, as in Scandinavia, 
 Holland, and Canada ; 
 
 " (6) Without d, mint or gold coinage, as in Canada 
 the Dutch East Indies ; 
 
162 SILVER AND GOLD. 
 
 " (c) With a circulation consisting partly of gold, partly 
 of overvalued and inconvertible silver, which is legal ten- 
 der to an unlimited amount, as in France and other 
 countries of the Latin Union, in the United States, and 
 also in Germany, though there the proportion of over- 
 valued silver is more limited, the mints in all these 
 countries being freely open to gold, but not to silver, 
 and in some of them the silver coinage having ceased ; 
 
 " (d) With a system under which the banks part with 
 gold freely for export, as in Holland, or refuse it for 
 export, as in France ; 
 
 " (e) With mints closed against private coinage of both 
 silver and gold, and with a currency of inconvertible 
 paper, as has been temporarily the case in Austria; 
 
 " (/) With a circulation based on gold, but consisting 
 of token silver, which, however, is legal tender to an 
 unlimited extent as in the West Indies. The case of 
 Holland and Java is very remarkable, since in that 
 case the gold standard has been maintained without 
 difficulty in both countries, although there is no mint in 
 the Dutch East Indies, no stock of gold there, and a 
 moderate stock of gold in Holland ; whilst the currency 
 consists of silver and paper legally and practically incon- 
 vertible into gold, except for purposes of export. The 
 case of Canada, which maintains a gold standard with- 
 out a gold coinage, is also very remarkable. 
 
 "The case of Austria-Hungary is also interesting, and 
 presents a remarkable contrast to that of India. 
 
 "It will be seen that a country with a silver standard, 
 and a currency consisting partly of overvalued silver but 
 chiefly of inconvertible paper, has been able, by closing 
 its mints against private coinage for a series of years, 
 and whilst still continuing to coin silver on govern- 
 ment account, to maintain a fairly steady rate of ex- 
 change with gold using countries for a considerable 
 period preparatory to adopting a gold standard." 
 
 In the face of this statement, what becomes of the 
 argument that we can not maintain exchange with the 
 
CHARLES F. CRISP, 
 
SENATOR GEORGE G. VEST. 165 
 
 gold countries of Europe if we have silver coinages in 
 the United States? Here I have read the absolute 
 proof that these countries maintain their exchanges, 
 and yet some of them have silver and gold, some have 
 silver alone, others have paper inconvertible into either 
 silver or gold. 
 
 I repeat my statement, that this financial question, 
 instead of being one of a great national brotherhood, of 
 which we have heard so much lately, is simply a matter 
 of adjustment according to the self-interest of the coun- 
 tries which are called upon to act for themselves. If, 
 with our resources, we can not maintain any system, I 
 am mistaken in the American people and their history. 
 
 We have come to the parting of the ways. We are 
 now at that point when one road leads to the gold 
 standard and the other to the bimetallism which our 
 fathers established, and which the policy and traditions 
 of this country have always favored. That we may 
 consider it with a deep sense of the responsibility rest- 
 ing upon us for ourselves and our posterity is the duty 
 of every legislator. If a Democrat can not be a Demo- 
 crat in the larger sense of the term, he should not ap- 
 proach it ; if a Republican can not be a Republican 
 without looking to his party standard and the narrow 
 signification of nomenclature, let him not approach it; 
 if our friends, the Populists, can not consider this ques- 
 tion without antagonism to both the old parties, they 
 have forgotten the meaning of the name of their party, 
 the People's party of the country. 
 10 
 
SILVEB AND GOLD. 
 
 CHAPTER IV. 
 
 BT 0ffATOR GEORGE F. HOAR OF MASSACHUSETTS. 
 
 THE American people have no reason to be ashamed 
 of their legislative history. Our American constitu- 
 tions, as well as the great measures which crowd and 
 adorn our statute book, have very often been the prod- 
 uct of times of excitement, of depression, and almost 
 of despair. They have been enacted amid predictions 
 of failure, amid taunts and expressions of contempt 
 from foreign critics, and against powerful and angry 
 opposition at home. 
 
 It has been the good fortune, as it has been the 
 glory of the American people, that it has ever plucked 
 the flower Safety from the nettle Danger ; that it has 
 made times of distress and commotion and evil its 
 great opportunity. From the gloom of the Revolution, 
 from the sorry story of the years which followed the 
 peace of 1783 of feeble government, of disaster, of 
 discontent, of broken faith, of depreciated currency, of 
 stay laws, of suffering debtors, of cheated creditors, of 
 lawlessness, of Shay's rebellion, and popular commo- 
 tions north and south came the state constitutions, 
 the ordinance of 1787, the Constitution of the United 
 States, the judiciary act, and the great legislation, 
 State and National, which is at the foundation of all our 
 institutions. 
 
 From the abject history of the Jefferson administra- 
 tion came the acquisition of Louisiana, the establish- 
 
SENATOR GEOKGE F. HOAR. 167 
 
 ment of sailors' rights, and the great naval glories of 
 the war of 1812. From the unutterable woe of the re- 
 bellion came the abolition of slavery, the permanent es- 
 tablishment of national authority, and the legislative 
 achievements of the past thirty years. 
 
 I believe that from the present panic, if we will but 
 rise to the occasion, we may yet get an equal blessing, 
 a sound, secure, and stable currency. 
 
 In one respect the condition of the United States 
 is peculiar. We settle our financial policy in accord- 
 ance with the popular vote. The great mercantile na- 
 tions of the world, in fact, and commonly in form, re- 
 fer such things to experts. The administration in 
 Great Britain consults the governors of the Bank of 
 England, the representatives of the chief mercantile 
 houses, a few men who have become recognized 
 authorities in financial circles, and acts upon their ad- 
 vice. Very few members of Parliament would think 
 of thrusting their own judgment into a debate on a 
 financial question against that of the men of their 
 own party who are their recognized leaders on such 
 subjects. I suppose this is still more true of France, 
 of Germany, of Belgium, and of Holland. 
 
 But with us the finances of the country have been 
 for a good while the football of parties and of factions. 
 Every demagogue in public office, or seeking public of- 
 fice, every theorist desiring to get notoriety by ex- 
 travagance, every anonymous and reckless scribbler who 
 escapes contempt only by concealing his personality, 
 every agitator who would marshal class against class, 
 every anarchist who seeks to overthrow all social order, 
 every brawler who would stir the passion of section 
 against section, of labor against capital, of debtor 
 
168 SILVER AND GOLD 
 
 against creditor, of the poor against the rich, prates 
 glibly about the currency, and uses some misrepresenta- 
 tion or sophistry about the currency as his weapon of 
 mischief. 
 
 Yet nothing is more certain than that a disturbance 
 of the currency is an advantage only to the classes who 
 s,re so attacked, and brings nothing but evil and dis- 
 aster to the classes to whom the appeal is made. As 
 Daniel Webster said nearly sixty years ago : 
 
 " He who tampers with Jie currency robs labor of its 
 bread. He panders, indeed, to greedy capital, which is 
 keen sighted and may shift for itself; but he beggars 
 labor, which is honest, unsuspecting, arid too busy with 
 the present to calculate for the future. The prosperity 
 of the working class lives, moves, and has its being in 
 established credit, and a steady medium of payment. 
 All sudden changes destroy it. Honest industry never 
 comes in for any part of the spoils in that scramble 
 which takes place when the currency of the country is 
 disordered. Did wild schemes or projects ever benefit 
 the industrious? Did irredeemable bank paper ever 
 enrich the laborious ? Did violent fluctuations ever do 
 good to him who depends on his daily labor for his daily 
 bread? Certainly never. 
 
 " All these things may gratify the greediness for 
 sudden gain or the rashness of daring speculation ; but 
 they can bring nothing but injury and distress to the 
 homes of patient industry and honest labor. Who are 
 they that profit by the present state of things? They 
 are not the many, but the few. They are the speculat- 
 ors, brokers, dealers in money, and lenders of money at 
 exorbitant interest. Small capitalists are crushed, and 
 their means being dispersed, as usual, in various parts 
 of the country, and this miserable policy having de- 
 stroyed exchanges, they have no longer either money or 
 credit. And all classes of labor partake, and must par- 
 take, in the same calamity." 
 
SENATOR GEORGE F. HOAR. 169 
 
 There aie subtleties in these financial questions sur- 
 passing the subtleties of metaphysics. No theologian, 
 no schoolman, no doctor of the civil law, no writer on 
 contingent remainders or resulting trusts or executory 
 devises was ever called upon to deal with more hair- 
 splitting distinctions and profound speculations, more 
 logical puzzles baffling the human intelligence than can 
 be found in the works of writers on finance in this or 
 other generations. And yet it is not too much to say 
 that there is no subject of legislation which so demands 
 wise and dispassionate consideration, and whose clear 
 understanding and correct resolution is. ^o vital to all 
 the best interests of society. As Alexanu'r Hamilton 
 declared in his famous report : 
 
 " The general state of debtor and of crtditor ; of the 
 relations and consequences of price ; the essential in- 
 terests of trade and industry; the value of all property ; 
 the whole income, both of the state and of individuals, 
 are liable to be sensibly influenced, beneficially or other- 
 wise, by the judicious or injudici^vis regulation on this 
 interesting object." 
 
 Credit is the life-blood of tracL. A sound currency 
 is to the affairs of this life what a pure religion and a 
 sound system of morals are to the affairs of the spiritual 
 life. And we should beware of the men who seek to 
 make of this great interest an instrument of personal 
 or party advantage, or of exciting hatred or discontent, 
 or disturbing social order, wherever such men may be 
 found, whether in high , places or low, as we would be- 
 ware of those men who have used the religious feelings 
 of mankind as instruments for like purposes. 
 
 And, as, in dealing with the great religious problems 
 which concern mankind a few strong instincts and a 
 
170 SILVER AND GOLD. 
 
 few plain rules the lessons of experience the 
 authority of a few safe guides, are found by the masses 
 of mankind sufficient unto salvation ; as all the law and 
 the prophets are summed up in two simple command- 
 ments, easily to be understood, and easy to be practiced, 
 BO, I believe, the path of safety through the financial 
 difficulties which surround us is in like manner to be 
 discerned. 
 
 No man whom the American people have trusted 
 with any share of political power is entitled to be re- 
 spected who approaches the duty of this hour in any 
 partisan or sectional spirit or inspired by the desire to 
 reap partisan advantage from the public calamity. Our 
 task is to discover and to remedy the great evil under 
 which all class and all parts of the country suffer. The 
 workshops are closing, the banks are stopping payment, 
 workmen are idle, the homes of the poor are threatened 
 with want, and the property of the rich is in peril. 
 
 I can conceive of no better evidence of the pros- 
 perity of a nation than that its people are universally 
 well employed at a rate of wages, or other form of com- 
 pensation, which yields to them the necessaries and 
 comforts of life. Indeed, it is not so proper to speak 
 of this state of things as an evidence of prosperity as 
 to speak of it as the definition of prosperity. That 
 was the condition of the American people, beyond any 
 other known, in the autumn of 1892, and for a long 
 period before. The president himself, in his late mes' 
 sage, describes the situation : . 
 
 " With plenteous crops, with abundant promise oi 
 remunerative production and manufacture, with un- 
 usual invitation to safe investment, and with satis- 
 factory assurance to business enterprise." 
 
SENATOR GEORGE F. HOAR. 171 
 
 Not only did this condition of things exist, but by 
 the confession of our eminent statisticians, free trad- 
 ers, and monometallists, as well as protectionists and 
 bimetallists, it was a condition of things which had been 
 improving year by year. The purchasing power of 
 wages had been increasing for twenty years, although 
 the tendency at the same time had been to diminish the 
 length of the day's work. The problem before us is to 
 restore that condition of things. If there is any law on 
 the statute book which has had the effect to disturb it, 
 or if there be any threat or fear of new legislation 
 which is to affect or disturb it, it is for us to change 
 that law and to make that legislation impossible. 
 
 This misfortune of the American people, in regard 
 to this currency question, is the spirit and temper in 
 which it has been debated. It is difficult to find upon 
 either side an honest statement of the other's position 
 or an honest answer to the other's argument. What 
 bimetallist, what advocate of the free coinage of silver 
 at the old rate can recognize himself, or his opinion, or 
 anything he believes in and stands for, in the portrait- 
 ure drawn by his antagonist ? What man who believes 
 either that we must submit to the standard of value 
 established by the consent of the commercial world, or 
 who even believes that the world's supply of gold is 
 enough to meet its demands for a standard, or a cur- 
 rency, without sensible fluctuation or change of value, 
 entertains any of the opinions or desires that are im 
 puted to him by the press or by public speakers in cer- 
 tain sections of the country ? 
 
 Any man or party in the Eastern States who should 
 desire to have the value or the purchasing power of 
 the dollar increased in order that the value of debts> 
 
172 SILVER AND GOLD. 
 
 or that assured and permanent incomes might be in- 
 creased, or in order that speculation in gold or in cred- 
 its might be rendered more profitable, would be hurled 
 from power and buried in infamy by the swift and 
 righteous indignation of the whole people of those 
 States. The prosperity, the power, the happiness, the 
 rapid growth of the Northwest and the South are as 
 dear to the people of New England as their own. 
 What they want, what they desire and strive for, is not 
 an appreciating standard of value but an unchanging 
 standard of value, so far as the lot of humanity will 
 admit. The merchant, the manufacturer, the builder of 
 railroads in the Eastern States is a constant and per- 
 petual debtor. The wage-earner, the depositor in 
 savings banks, the holder of the policy of life insur- 
 ances, the widow and orphan who are living on the 
 spare savings of the husband and father in his lifetime 
 are constant and perpetual creditors. They are alike 
 interested that the obligation contracted to-day shall 
 be precisely the same obligation, no greater and no 
 less, when it is to be discharged, five or ten or twenty 
 years hence, or whenever its annual or semi-annual in- 
 terest is to be paid throughout that period. The pres- 
 ent value of the dollar as a mediun of present ex- 
 change can be ascertained with reasonable accuracy by 
 the parties to any contract. 
 
 Appreciation and depreciation can be ascertained and 
 provided for. But, to use the expressive phrase of 
 Mr. Belfour, " money is the record of obligations ex- 
 tending over long periods of time." And it is an in- 
 jury, it is destruction to any community which has 
 risen in civilization above the pirate stage, when that 
 record is liable to uncertainty or is the subject of specu- 
 
SENATOR GEORGE F. HOAR. 178 
 
 lation or gambling. If the people of the Northeast 
 seem to the people of another part of the country to 
 be contending for anything likely to bear hardly upon 
 them, it is because they do not see or anticipate such a 
 result, and not because they desire it or are indifferent 
 to it. 
 
 So, on the other hand, I do not believe that any 
 large number of the people of the Northwest desire the 
 destruction- of property, impairment of credit, or any 
 injury whatever to the people of the Northeast. Theib 
 ambition is to acquire property, their hope is in the es- 
 tablishment and maintenance of credit. They always 
 have depended, and for a long time in the future they 
 must depend, for these things on a close alliance and 
 an interchange of advantages with the people whose 
 children they are, with the States whence they came, 
 and with communities from whose institutions they 
 have modeled their own, and with whom in the great 
 and glorious future .they must live or bear no life. 
 Chief among the resources of the West is its alliance 
 with a wealthy and prosperous East. The wealth of 
 the East must perish but for its alliance with a wealthy 
 and prosperous West. 
 
 There are wild utterances, everywhere. They are 
 heard from Boston and New York and Chicago as often 
 as from San Francisco or Denver. But they do not 
 come chiefly from Americans, and they do not repre- 
 sent the prevalent spirit of any American community. 
 
 The people of the United States are divided on this 
 question. The two sides are, in my judgment, equally 
 honest and equally intelligent. One believes that the 
 policy of the other leads to an increase of the burden 
 of debt, to the contraction of the world's supply of 
 
174 SILVER AND GOLD. 
 
 currency, and to that worst form of fluctuation in the 
 standard of value, the constant increase of the pur- 
 chasing power of money, with its consequent fall of 
 price and strangulation of business. Another portion 
 of the people believe, with equal sincerity, that the 
 free use of silver, at its old rate, by a single nation 
 alone leads to the destruction of the obligation of ex- 
 isting debts, the impossibility of any secure credit for 
 the future, and turns all fixed business into speculation 
 and gambling. 
 
 Each party is equally honest and sincere, and the 
 two parties desire, in my opinion, the same thing a 
 currency which shall be sufficiently abundant for all 
 exchanges, domestic and foreign, and a standard of 
 value which shall be as unchangeable through the years 
 and generations as the wit of man can devise. The 
 proprietors of silver mines not unnaturally desire tc 
 sell their product to the best advantage. But I do not 
 think they or their advocates on this floor will claim 
 that we shall adopt any policy with regard to the cur- 
 rency merely that they may sell their product at a 
 profit. What they would say, I suppose, is that, be- 
 lieving as they do, the disuse of silver for the purpose 
 of currency to be attended by consequences disastrous 
 not only to the people of this country, but to all man- 
 kind, the fact that laborers and capitalists who are en- 
 gaged in their special industries are likewise to be 
 ruined by it, does not render it any more acceptable to 
 them. 
 
 The great and fundamental difference between these 
 two parties is the difference as to two questions of fact. 
 
 First. Is the existing stock of gold available for 
 currency sufficient, with the yearly addition to that 
 
SENATOR GEORGE F. HOAR. 175 
 
 stock, to maintain prices at their present level and 
 keep the burden of debt from growing heavier year by 
 year in the future ? 
 
 If it be, then the advocates of silver have no right 
 to demand its consideration when we are regulating 
 the currency, but must, like other producers, stand or 
 fall by the general policies by which we encourage 
 American industries. 
 
 But if it be not sufficient, if the cord of indebted- 
 ness is to tighten year by year around the neck of the 
 debtor by the rapidly increasing value of the gold dol- 
 lar, then the advocates of bimetallism are justified in de- 
 manding that every lawful resource of the Government 
 shall be exhausted and every energy of the American 
 people taxed to its utmost to prevent such a result. 
 
 Now, I can not find that the researches of our statis- 
 ticians enable us as yet to decide this question to our 
 reasonable satisfaction. The tables which are used by 
 the bimetallists show a constant increase in the value 
 of gold since 1873. As compared with the forty-five 
 principal commodities selected by Mr. Sauerbach, .they 
 show a constant increase in the purchasing power of 
 gold as measured in those commodities, and show, on 
 the other hand, a comparatively small falling off in the 
 value of silver. On the other side, the monometallists 
 point out that if you strike out from the list the arti- 
 cles whose production has been greatly cheapened by 
 increased labor-saving appliances, or whose price in the 
 market has been lessened by the vast recent saving in 
 the cost of transportation, there has been very little 
 fluctuation in gold. 
 
 I can not myself escape the apprehension that the 
 bimetallists are at least partially in the right. It may 
 
176 SILVER AND GOLD. 
 
 be that the appreciation of gold has not yet taken 
 place to the extent of their belief. But there is a large 
 stock of silver still in use in the United States and on 
 the Continent. What has been done as to India, and 
 what is to be done by us, have not yet had an effect 
 which can be measured. 
 
 The second question is not so difficult. Is it possible 
 for the United States to maintain a standard of value 
 in separation or isolation from the rest of the civilized 
 world ? 
 
 I have been, ever since I was old enough to have an 
 opinion on the subject, a bimetallist. I think that is 
 true of all the American people down to 1873, with a 
 Very few exceptions. But it has been the bimetallism 
 of Alexander Hamilton, ' of Washington and his Cab- 
 inet, of the framers of the Constitution, of the mem- 
 bers of the First Congress, and of the Constitution of 
 the United States. It always recognized and took for 
 granted that the money standard of the world's deal- 
 ings must be settled by the usage of commercial na- 
 tions. It recognized also that if there were a change 
 in the relative value of the two metals the more valu- 
 able metal must, in the end, prevail. I do not under- 
 stand that there is any purpose anywhere to discard 
 the use of silver. It is still, and always must be, a 
 large instrument in the commerce of daily life in all 
 countries. Even when the use of silver is directly con- 
 fined to that of subsidiary coinage, it is not insignificant 
 or unimportant. We have about $50,000,000 of sub- 
 sidiary coinage, but every dime of that coinage passes 
 from hand to hand a hundred times where the gold 
 dollar would so pass once. 
 
 The lesson of all experience points to the use of gold 
 
SENATOR GEORGE F. HOAR. 177 
 
 and silver to effect exchanges and to measure values 
 for the commerce of mankind. From the foundation 
 of the world they have performed this great office. 
 They are known as the precious metals in the universal 
 language of civilized men. They are adapted and they 
 alone are adapted, by permanence, by their capacity 
 for being coined and stamped, for the convenience with 
 which they may be kept and transported, to perform 
 this service for mankind. They are the only comple- 
 ments of each other. If the weight and size of silver, 
 in proportion to its value, be too great for use in large 
 transactions, the size of gold, in proportion to its value, 
 is too small for safety and convenience in the smaller 
 and commoner transactions of life. 
 
 Silver circulates everywhere to-day, and will circu- 
 late everywhere until time shi 11 be no more, as the 
 money of the common people, whatever may be the ac- 
 tion of the government. 
 
 In the countries where gold is the only recognized 
 lawful standard. of value, silver is still the instrument 
 of the commerce of man's daily life. Sometimes one 
 has risen for a few years, perhaps for a generation, in 
 value as compared with its companion, and sometimes 
 the other. Sometimes mistaken financial policies, some- 
 times popular excitement, sometimes the schemes of 
 designing speculators, may have depreciated or exalted 
 one at the expense of the other. But this august and 
 regal pair the queenly silver and the royal gold 
 have maintained throughout all ages, and through all 
 time will maintain their companionship and their su- 
 premacy. If you undertake to settle this question by 
 driving either from the country, you will have no peace 
 until it is restored. The principle which recognizes 
 
178 SILVER AND GOLD. 
 
 both has its foundation m nature, and in the experience 
 of man. 
 
 That the words " money " and " gold and silver " 
 were regarded as equivalents in constitutional meaning 
 is shown by the fact that the Constitution makes a sep- 
 arate provision as to bills of credit and does not in- 
 clude them in the sentence which applies to money. It 
 is not gold or silver that a State may make a legal 
 tender, but gold and silver, the legal value of which, 
 by another clause of the Constitution, is to be deter- 
 mined by Congress. 
 
 Chief Justice Ellsworth and his associate, who rep- 
 resented Connecticut in the constitutional convention, 
 in their report to their constituents of the proceedings 
 of the convention, say that the new Constitution pro- 
 vides that no State " shall make anything but money a 
 legal tender for the payment of debts," showing that, 
 in their judgment, the word "money" and the words 
 "gold and silver " are identical or equivalents. 
 
 Alexander Hamilton considered this question in his 
 great report on the mint and the coinage. He gave 
 fullest weight to the arguments of the monometallists. 
 He admitted that the money unit had up to that time 
 virtually attached to gold rather than to silver. But 
 with the fullest concurrence of President Washington 
 and the statesmen of his time, he declared for the prin- 
 ciple of bimetallism. His arguments have not lost 
 their original force. They have not been answered in 
 any discussion. The people of the United States, 
 when the tempest has passed, will settle down and be 
 reconciled to the solution of this great problem in 
 which Washington and his Cabinet joined. They 
 never will be permanently reconciled to any other. 
 
SENATOR GEOEGE F. HOAR. 17P 
 
 Daniel Webster declared more than once, and with 
 great emphasis, that the Constitution requires the coin- 
 age of both metals ; and it would be a disobedience 
 to our constitutional duty were congress to discard 
 either. 
 
 All our great financial authorities of both parties, 
 from the framers of the Constitution, from Alexander 
 Hamilton, and Jefferson, and Webster, and Calhoun, 
 and Benton, and Chase, and Fessenden, Federalists and 
 Republicans, Whigs and Democrats, down to the dis- 
 turbed period which followed the war, have agreed 
 upon this policy. There were differences which divided 
 political parties. Whether congress should authorize a 
 paper currency, under careful safeguards, redeemable 
 in coin, or should leave that to State discretion, or to 
 private enterprise, was a question which divided parties 
 and made and unmade presidents and administrations. 
 But down to the year 1863 it never was heard in this 
 country that the legal tender and the standard of value 
 should be anything but gold and silver ; nor was it ever 
 claimed until 1873 that both gold and 4'lver could not 
 be relied upon to perform this service. 
 
 I have no doubt that the Committee oi> Coinage, who 
 reported and enacted the statute of 1873, \v*re actuated 
 solely by a conscientious desire for the pubftc good. I 
 would give no countenance to the miserable slander 
 that they were acting in the interest of capitalists or 
 monopolists or of creditm-s ; or that they desireo to con- 
 ceal what they were doing from the American people, 
 or from anybody. They selected for their single stand- 
 ard what was then the cheaper metal, a metal not ->nly 
 then the cheaper, but of which a large and constaptly 
 Increasing supply was confidently expected. P' % 
 
180 SILVER AND GOLD. 
 
 scheme was proposed in the report of the Director of 
 the Mint,, was recommended by the Secretary of the 
 Treasury in his report, was printed in the House of 
 Representatives thirteen times; was called to the atten- 
 tion of chambers of commerce, was the subject of de- 
 liberate discussion in some of them, and was well 
 known to leading financiers. 
 
 The senate first voted to request the president to 
 open a correspondence with other countries in relation 
 to the unit of value. That correspondence took place. 
 Then the Director of the Mint proposed, in his report, 
 to adopt a single gold standard. Then the Secretary 
 of the Treasury urged the measure in his report to con- 
 gress. Then the matter was referred by Mr. Hooper of 
 the house, to public bodies for their opinions. 
 
 Mr. Ernest Seyd was an authority on all practical 
 mechanical measures connected with coin. Mr. Hooper 
 wrote to England asking his assistance in the matter. 
 Mr. Seyd wrote him quite a long letter early in the 
 year 1872, and he then came here. I have his letter to 
 Mr. Hooper, making the final discussion upon the bill 
 which Mr. Hooper submitted ; and after suggesting in 
 that letter various practical reforms, which are of little 
 or no importance in this connection, Mr. Seyd goes on 
 with an able and elaborate argument against monomet- 
 allism, and says the great fault he finds with Hooper's 
 bill is that he undertakes to bring this country to the 
 gold standard, which he thinks would be destructive, 
 and against which he had written a book at home ; and 
 he urges upon him the free coinage of silver at the rate 
 of 400 grains to the dollar. Mr. Seyd wrote it to Mr. 
 Hooper after the bill was framed, most earnestly and 
 laboriously urging him not to adopt monometallism and 
 
UFI7IP.JITT 
 
JOHN P. JONES. 
 
SENATOR GEORGE F. HOAR. 183 
 
 recommending that the standard of silver be ^00 grains 
 instead of 415. 
 
 We were not having specie at all and had not any 
 specie circulation for three or four years after that 
 time, and in 1878 in came the Bland act restoring silver 
 and providing for a larger coinage of silver every year 
 than we had had before in the whole seventy-three 
 years of the century put together. 
 
 Now, to return, both the great political parties in 
 this country were of this way of thinking down to the 
 last national election. 
 
 But the great question, of course, is the question of 
 ratio. Here, too, we must follow whoever may be 
 disappointed and whatever the cost 
 
 First, the principle laid down by our earlier authori- 
 ties ; 
 
 Second, the precedents of our legislation. 
 
 Alexander Hamilton declared that if the two metals, 
 at any time, were separated, the more valuable metal 
 must be the standard for the reason that the fluctua- 
 tions would be the more likely to attach to the inferior 
 metal. No respectable American authority, until the 
 recent discussions, can be found to the contrary. We 
 can not establish a contrary policy to-day without en- 
 tailing upon the country infinite mischief, and disre- 
 garding the opinion of the whole commercial world and 
 without a separation from all the leading nations of the 
 world in this matter of the standard. I hold that this 
 is a thing almost as impossible as attempting to exempt 
 our portion of the planet from the operation of the law 
 of gravitation itself. 
 
 Everything points to an enlargement of intercourse 
 and to closer relation in the future. The ocean voyage 
 11 
 
184 SILVER AND GOLD. 
 
 between the two hemispheres has been reduced from an 
 average of thirty days to less than six days, and the time 
 is at hand, in the opinion of the best naval architects, 
 when ocean lines will make their ordinary voyage 
 within a hundred hours. One-half of the population 
 of the United States are within speaking distance of 
 Washington by telephone. The time is undoubtedly 
 at hand when the Atlantic will be no impediment to 
 audible communication between the two continents. 
 
 Besides, the precedents of our own legislation, down 
 to the time when the opinion of this country was 
 divided upon this question, all point to the same result. 
 If silver were queen, gold was king. 
 
 There is nothing which points to any considerable 
 rise in silver in the near future, unless there may be 
 some brief and temporary diminution of the product. 
 If it come, however difficult, there must be a new re- 
 vision of the relation between the two metals. That 
 can only take place by the common consent of com- 
 mercial nations, and it will be idle and hopeless to ex- 
 pect it otherwise. 
 
 Believing, therefore, with Hamilton, that the bime- 
 tallic standard is that upon which alone this country 
 can permanently and safely rest, and believing also, 
 with Hamilton, that whenever the two metals separate 
 the standard must be conformed to the more valuable, 
 I am in favor of at once putting a stop to the purchase 
 of silver for coinage. Otherwise it seems to me clear 
 that our gold will take its departure, and we shall be 
 left in that most wretched of conditions, a nation 
 with a single monometallic standard composed of an 
 inferior metal, constantly fluctuating and rapidly de- 
 generating a condition from which every wealthy 
 
SENATOR GEORGE F. HOAR. 185 
 
 commercial nation in the world, now including India, 
 has escaped. 
 
 Another course may be suggested which might, under 
 circumstances different from those which now surround 
 us, prove practicable and desirable. That is, to coin a 
 legal tender silver dollar of a weight sufficient to make 
 it equal in value to the gold dollar ; make the gold and 
 silver dollars receivable for all debts, public and pri- 
 vate ; make them interchangeable at the treasury at 
 the will of the holder ; pledge the credil of the gov- 
 ernment to maintain this relation, and provide that if 
 at anytime the bullion value of the silver dollar should 
 fall to a point more than 2 or 3 per cent, below the 
 gold dollar the coinage of silver shall cease until the 
 ratio be restored. This plan will go far to answer the 
 arguments of those persons who think the stock of 
 gold in the world insufficient to supply the world's need 
 of a currency and dread falling prices, increased bur- 
 den of debts, and strangulated business. But I fear 
 we can not adopt it now. 
 
 First, it would not be accepted by the special repre- 
 sentatives of the producers of silver, without whose 
 concurrence it can not be adopted. 
 
 But, second and chiefly, because we have on our 
 hands four hundred and twenty million of standard 
 silver dollars of which three hundred and eighty mil- 
 lion are in circulation, either as coin or b}' the certifi- 
 cates which represent them, not now taking into ac- 
 count upward of fifty million of subsidiary coin. If 
 this policy were to be adopted now, we must either at- 
 tempt to maintain, side by side, two standard silver 
 dollars of different weight or we must call in and re- 
 coin our existing silver currency at a cost to the treas- 
 
186 SILVER AND GOLD. 
 
 ury of a sum which might not improbably equal 50 per 
 cent, of the entire value of our silver coinage. We 
 must, therefore, abandon for the time being an attempt 
 to make our present silver product useful for currency 
 and remit that question to the future. It will be all 
 we can do to support our present stock of silver coin 
 without depreciation. 
 
 No man can regret more than I do any temporary 
 distress which may fall upon those young communities 
 which have lately taken their places in the sisterhood 
 of American States. I would go, as I have heretofore 
 gone, to the very limit of public safety, in my regard 
 for their special condition. But they must not expect 
 1 do not believe that their representatives here will 
 seriously claim that we should be affected, in regula- 
 ting the currency, by a desire to promote the sale of a 
 particular product. 
 
 I do not think such a policy would, in the end, be of 
 advantage to the silver-producing States themselves. I 
 believe that if this country should be put on what is 
 called a silver basis, and our home supply of coinage 
 could be furnished by Colorado and the other silver 
 States I believe if the whole world could be put on 
 a silver basis, and these silver States could furnish all 
 the silver, it would be an unmixed evil to them. No 
 nation, no State ever got permanent strength or pros- 
 perity from its wealth of the precious metals. There al- 
 ways has been, and there always will be, an element of 
 chance, not to say gambling, in that product. Spain 
 and Mexico and Peru tell their own story. The true 
 prosperity of California began when the great profits 
 of her yield of gold ceased and other industries ap- 
 peared. I was specially gratified by the note of cour- 
 
SENATOR GEORGE F. HOAR. 
 
 age in an utterance attributed to the senior Senator 
 from Colorado, in which he told his people not to be 
 down-hearted they could be a powerful State with- 
 out silver. I am not sure that it would not have 
 been better, both for Nevada and for the country, if 
 there were not a mine within her borders. 
 
 I am told that Colorado produced in 1892, fifty -five 
 millions of coal, sixty millions of farm products, thirty- 
 four millions' worth of cattle, and that her manufac- 
 tures were seventy-five millions, while her silver prod- 
 uct was about twenty-three millions. Two hundred 
 and twenty-four millions of these products, the demand 
 for which no legislation can affect, is a pretty good 
 showing for a State not yet twenty years old. Of the 
 wealth she produces even now, her silver product is nob 
 a tenth. 
 
 I do not think we shall gain much by discussing here 
 the responsibility for the condition of things that exist 
 in this country. It is our duty to agree, if we can, 
 upon a remedy. We shall probably, all of us, have 
 something to say to the people when they are asked to 
 determine to what leaders they shall give their confi- 
 dence hereafter. But I voted, after the best considera- 
 tion of the subject of which I was capable, for the 
 much-abused statute of 1890. I have seen no reason 
 to change my opinion of the wisdom of that vote in the 
 light of subsequent experience. That law has been 
 most bitterly attacked. I desire to leave on record 
 somewhere, and the records of the senate seem to 
 me the fittest place, the reason which governed my 
 action. 
 
 The law of February 28, 1878, commonly known as 
 the Bland bill, as it passed the house of representatives, 
 
SILVER ANt> GOLfr. 
 
 provided for the free coinage of silver without limit, at 
 the rate of 412J grains to the dollar. The owner of 
 the silver bullion, under the operation of that bill as it 
 passed the house, could have taken it to the mint and 
 received a legal tender dollar, coined and stamped, for 
 everj 41 2 1 grains of silver. This not only would have 
 enabled the owner of the silver to make a large profit, 
 as the process of its degeneration went on, but it would 
 have been an issue of fiat money, pure and simple, so 
 far as the difference went between the bullion value of 
 the silver dollar and of the gold dollar. 
 
 The senate amended the house bill by limiting the 
 amount to be purchased to a sum which was not to be 
 less than two million and not more than four million 
 dollars' worth a month, at the discretion of the secre- 
 tary. The secretary was to purchase the bullion at its 
 market value and coin from it all the 412j-grain dollars 
 it would make. The bill so amended passed both 
 houses over the veto of President Hayes. But the fiat 
 money remained, and for twelve years had been accu- 
 mulating in the treasury. 
 
 For that issue of fiat money the act of 1890 substi- 
 tuted the purchase of silver at the rate of 4,500,000 
 ounces a month. But it declared it the duty of the 
 Secretary of the Treasury to maintain its parity with 
 gold, to do which it would become his duty 'to use all 
 the powers committed to him by the resumption act of 
 1875. 
 
 In other words, instead of the fiat money of the Bland 
 bill, every dollar of the property and the utmost limit 
 of the credit of the people of this country were pledged 
 to the maintenance of our silver currency on an equal- 
 ly with gold, 
 
SENATOR GEORGE F. HOAR. 
 
 It is true that the amount of silver to be purchased 
 was increased by the act of 1890 from the limit of from 
 two to four million dollars' worth a month at the dis- 
 cretion of the Secretary of the Treasury to a fixed 
 amount of 4,500,000 ounces a month, without discre- 
 tion ; to be purchased, however, at its market value, so 
 that the profit of the transaction inured to the treasury* 
 
 It is true also that since the Bland bill was enacted 
 but two millions' worth a month had been in fact pur- 
 chased. But that condition of things could only con- 
 tinue so long as there should be a Republican Secretary 
 of the Treasury, or a Democratic Secretary differing 
 wholly from his party. In the not unlikely accession 
 of the Democratic party to power we had every reason 
 to expect that silver would be purchased to the largest 
 monthly limit permitted by law. 
 
 This was not only the opinion of Democrats who 
 might be termed extremists, but of the leaders of the 
 party in congress, with perhaps, half a dozen excep- 
 tions. Certainly no man represented, then or now, 
 what would be called the moderate and conservative 
 opinion of his political associates more than the pres- 
 ent Secretary of the Treasury. He had, and deserved, 
 their full confidence, and he had and deserved the 
 friendly regard of all who have been his associates in 
 the public service. If the personal inclination of his 
 party had been followed, without considerations of 
 special availability in one or two States, he would have 
 been preferred to Mr. Cleveland as a candidate for the 
 Presidency itself. It was natural and almost inevitable 
 that, in the case of Democratic success, Mr. Carlisle 
 should be called to the treasury, and should be clothed 
 the discretion given by the Bland bill. 
 
190 SILVER AND GOLD. 
 
 Now Mr. Carlisle had voted for the free coinage of 
 silver, of which he was an avowed advocate, although 
 he desired that the profit should go to the government 
 and not to the owner of the bullion. In his very able 
 speech in favor of the Bland bill, as it finally passed 
 the house, delivered in the house of representatives 
 February 21, 1878, he gives his opinion on this subject, 
 and especially his opinion as to the proper exercise of 
 this discretion by the Secretary of the Treasury. He 
 says : 
 
 " My position upon the subject is briefly this : I am 
 opposed to free coinage of either gold or silver, but in 
 favor of unlimited coinage of both metals upon terms of 
 exact equality. No discrimination should be made in 
 favor of one metal and against the other; nor should 
 any discrimination be made in favor of the holders of 
 either gold or silver bullion and against the great body 
 of the people who own other kinds of property." 
 
 He goes on to denounce Mr. Sherman, then Secre- 
 tary of the Treasury, as well known to be hostile to the 
 purposes of the Bland bill, and to denounce the resump- 
 tion act of 1875 as a destructive scheme. He says : 
 
 " The senate has declared by a large vote that the 
 coinage should be limited to a sum not less than $2,- 
 000,000 per month. If the execution of this measure 
 could be intrusted to a public officer whose opinions 
 upon the subject were in accord with those of the 
 great majority of the American people, and whose sym- 
 pathies were with the struggling masses who produce 
 the wealth and pay the taxes of the country, rather 
 than with the idle holders of idle capital, the provis- 
 ions alluded to would be of little consequence, because 
 he would coin the maximum instead of the minimum 
 amount allowed by the amendment." 
 
SENATOR GEORGE F. HOAR. 191 
 
 Lew me not be understood for a moment as desiring 
 to cast any imputation either upon the integrity or the 
 wisdom of the present Secretary of the Treasury. I 
 suppose that he has changed his opinion as to what 
 would be a wise exercise of his discretion under the 
 Bland bill, even if he were vested with it. But I sup- 
 pose that, in common with a large number of his coun- 
 trymen, his change of opinion has been brought about 
 naturally and honestly, as well as inevitably, by a 
 change of situation. The argument which might have 
 convinced as honest a public officer as Mr. Carlisle in 
 1878, appears very differently in 1893. In 1878 all 
 parties in the United States expected to continue the 
 coinage of silver. The question was whether it should 
 be limited or unlimited. There was no reason to doubt 
 that if the consent t of Great Britain could be had, 
 every other European government would gladly open 
 its mints again to silver. Many great and conservative 
 British financiers then thought that the way to protect 
 India was not to put her on a gold basis, but that En- 
 gland herself should resume the coinage of silver at a 
 proper ratio. 
 
 It is no secret that some ot che cabinet of Lord Salis- 
 bury and that Mr. Goschen himself inclined to this 
 view and were ready to adopt it as the policy of the 
 government, if the consent of the business men of 
 London, with anything near unanimity, could have 
 been had. This opinion has within a few days been 
 reaffirmed by Mr. Balfour. I have never agreed with 
 the opinions expressed in favor of the free coinage of 
 silver by Mr. Carlisle, and those who then thought 
 with him ; but justice to them requires it to be admitted 
 that the question was a very different one when the 
 
SILVER AND GOL&. 
 
 policy of the commercial world, outside of this cortntty, 
 was still undecided, from what it is now when that pol- 
 icy is settled. 
 
 This then was the condition of things under the bill 
 for which the Sherman bill was a substitute. The 
 Bland bill of 1878 required the addition to our silver 
 coinage of $2,000,000 worth a month, not redeemable 
 in gold, and legal tender for all obligations, public or 
 private. The Secretary of the Treasury was bound to 
 the purchase of at least $2,000,000 worth a month, and 
 to coin from it all the dollars it would make. But he 
 was at liberty in his discretion to purchase and coin 
 $4,000,000 worth a month. 
 
 If we had a secretary entertaining the then opinion 
 of Mr. Carlisle, who favored and voted for free coin- 
 age of silver, and who favored the passage of the Bland 
 bill over the veto of President Hayes, we were to have 
 $4,000,000 worth a month, of $48,000,000 worth a year. 
 Now this, so far as the difference between gold and 
 silver was concerned, was fiat money pure and simple. 
 
 What would have come if this law had been contin- 
 ued ? If we had had a Democratic Administration if 
 that administration represented the opinion of nine- 
 tenths of the Democratic party we were to have 
 forty-eight million dollars' worth of fiat money a year. 
 To what condition would this have brought us, inevi- 
 tably and swiftly, even if the smaller quantity alone 
 were coined ? I will let Mr. Cleveland himself answer 
 this question. 
 
 He declares in his message, December 8, 1885 : 
 
 " This operation will result in the substitution of silver 
 for all the gold the government owns applicable to its 
 general purposes ; " 
 
SENATOR 6EORDE F. HOAR. "V98 
 
 That the 
 
 " hoarding of gold has already begun ; " 
 That 
 
 " the two coins will part company ; * * * then will 
 be apparent the difference between the real value of the 
 silver dollar and a dollar in gold "'*'* gold, still 
 the standard of value, and necessary in our dealings 
 with other countries, will be at a premium over silver ; 
 
 * * * rich speculators will sell their hoarded gold 
 to their neighbors who need it to liquidate their foreign 
 debts, at a ruinous premium over silver, and the labor- 
 ing men and women of the land, most defenseless of all, 
 will find that the dollar received for the wage of their 
 toil has shrunk in its purchasing power. 
 
 " That disaster has not already overtaken us furnishes 
 no proof that danger does not wait upon a continuation 
 of the present silver coinage. We have been saved by 
 the most careful management and unusual expedients, 
 by a combination of fortunate conditions, and by a con- 
 fident expectation that the course of the government 
 in regard to silver coinage would be speedily changed 
 by the action of congress." 
 
 In his letter to A. J. Warner and others, members of 
 the Forty-eighth Congress, February 24, 1885, Mr. 
 Cleveland says : 
 
 " Gold would be withdrawn to its hoarding places, and 
 an unprecedented contraction in the actual volume of 
 our currency would speedily take place. Saddest of 
 all, in every workshop, mill, factory, store, and on 
 every railroad and farm, the w r ages of labor, already de- 
 pressed, would suffer still further depression by a scal- 
 ing down of the purchasing power of every so-called 
 dollar paid into the hand of toil. From these impend- 
 ing calamities it is surely a most patriotic and grateful 
 duty of the representatives of the people to deliver 
 them." 
 
194 SILVER AND GOLD. 
 
 The representatives of the people did deliver them. 
 With no help from Mr. Cleveland or his political sup- 
 porters, the Republican, party arrested the swift prog- 
 ress of the danger which threatened us, and removed 
 a large part, though not the whole, of the evil of the 
 Bland bill. The act of July 14, 1890, while it for a 
 short time increased the amount of silver which the 
 Secretary of the Treasury might purchase and coin, de- 
 clared the " established policy of the United States to 
 maintain the two metals at a parity with each other." 
 
 By the statute approved January 14, 1875, the act 
 to provide for the resumption of specie payments, the 
 Secretary of the Treasury is authorized to use any sur- 
 plus revenues not otherwise appropriated, and to issue, 
 sell, and dispose of, at not less than par, any bonds of 
 the United States described in the act of congress of 
 July 14, 1870. Those bonds were : A bond bearing 4 
 per cent, interest, running for thirty years ; a bond 
 bearing 4| per cent, interest, running fifteen years ; a 
 bond bearing 5 per cent, interests, running ten years. 
 
 So that the act of 1890 substituted for the issue of 
 twenty-four million gold dollars' worth of fiat-silver 
 monejr yearly the present purchase of silver, with the 
 whole faith and resources of the government pledged 
 to maintain its equality with gold. 
 
 It is said that we had in the treasury June 30, 1893, 
 1362,000,000 of silver in coin and $118,000,000 in bars ; 
 and this is true. But of this four hundred and eighty 
 millions, three hundred and forty millions, or there 
 abouts, is in practical circulation in the form of silvei 
 certificates. 
 
 We had, at the same time, in the treasury, $110,- 
 000,000 of gold in coin, and seventy-eight millions in 
 
SENATOR GEORGE F. HOAR. 195 
 
 bare. Of this one hundred and eighty-eight millions, 
 ninety- four millions, or about 50 per cent, was in 
 practical circulation in the form of gold certificates. 
 
 While the gold certificates in circulation amount to 
 only one-half or thereabouts of the gold in the treasury, 
 the silver certificates in circulation are about two- 
 thirds of the silver in the treasury. We have one hun- 
 dred and fifty millions of silver certificates in circula- 
 tion against ninety-four millions in circulation of gold 
 certificates. 
 
 I suppose it will not be claimed that, so far as the 
 silver is in practical circulation, the most convenient 
 form of that circulation is not the deposit of the bullion, 
 or coin, in the treasury, and the transfer from hand to 
 hand of its paper representative. I suppose that if all 
 the silver now in the treasury should be replaced by an 
 equal value in gold dollars, and the silver destroyed or 
 sent out of the country, as large a proportion of the 
 .gold as the amount of the silver certificates bear to the 
 entire mass of silver would circulate in the form of 
 gold certificates. 
 
 Under the statute of the bnited States, which dif- 
 fers in that respect from that of some States, the re- 
 peal of an act which itself repeals a former act does not 
 revive such former act. So in voting to .repeal the act 
 of 1890, or any part of it, we do not revive the legisla- 
 tion from which Mr. Cleveland anticipated such mis- 
 chievous consequences in the near future. Were the 
 Bland bill now to be revived I, for one, should not con- 
 sent to repeal the law of 1890, and to vest in Mr. Car- 
 lisle the discretion which he is so solemnly pledged to 
 exercise, of purchasing silver and issuing fiat dollars" 
 of 412J grains at the rate of 4,000,000 gold dollars 1 
 
196 SILVER AND GOLD. 
 
 worth, or at present rate 7,371,428 silver dollars a 
 month. 
 
 This discretion, it will be remembered, was vested 
 by law wholly in the secretary and is beyond the con- 
 trol of the president himself. 
 
 One party, the Democratic party, almost unanimously 
 aided by Republicans enough to make a majority of 
 both houses of congress were well known to be in 
 favor of the free, unlimited coinage of silver at the 
 rate of 412J grains to the dollar. There were a few ex- 
 ceptions in the Democratic party. But that the friends 
 of free coinage of silver represented its settled opinion 
 and its deliberate purpose is shown by the fact that at 
 its advent to power the Secretary of the Treasury and 
 every Democratic member of the committee on finance 
 of the senate, with a single exception, is a person whf 
 was then of that way of thinking. 
 
 Now it is notorious no honest man who remembeiv 
 the history of that time will deny that the alternative 
 presented to us was the passage through both houses of 
 congress of a bill for the free coinage of silver or tht 
 adoption of the measure of 1890 a measure far better 
 than the existing law which it repealed, on the one 
 hand, and infinitely better than the new law with which 
 we were menaced, on the other. It is true that Presi- 
 dent Harrison undoubtedly would have vetoed a bill 
 for the free coinage of silver. But it is also true that 
 the passage of such a measure through both houses of 
 congress arrested only by the opinion of the executive 
 would have caused infinite mischief in its effect upon 
 the public credit, both abroad and at home. 
 
 Now, you tell us that the main cause^ of the present 
 difficulty is that foreigners will not keep our securities 
 
SENATOR GEORGE F. HOAR. 197 
 
 so long as they are afraid they will be paid in depreci- 
 ated silver, although the whole credit of the govern- 
 ment of the United States is pledged to make every 
 silver coin as good as gold coin anywhere. What do 
 you think would have been the effect on our credit of 
 the continuance of the coinage of silver dollars under 
 the Bland bill, there being neither obligation nor au- 
 thority resting upon the government to exchange these 
 silver dollars for gold dollars, and the purpose of the 
 American people being learned only from the fact that 
 under its existing law it was coining $24,000,000 worth 
 of fiat money annually, to grow to 148,000,000 worth 
 whenever a Secretary of the Treasury agreeing with 
 Mr. Carlisle should come into power ; and that there 
 was a congress, both of whose houses were purposing to 
 substitute for that an unlimited coinage of depreciated 
 silver whenever they could get rid of the constitutional 
 restraint imposed only by an individual will ? 
 
 There has never been a day since the resumption of 
 specie payments until long since the present adminis- 
 tration came into power when, if you had taken a thou- 
 sand dollars in gold and a thousand dollars in silver 
 into any national bank in the country, the bank would 
 have given a dollar for its choice between the two as a 
 deposit. It may be that a bank one of whose cus- 
 tomers was paying a large body of workmen their wages 
 on a pay day might have given something for the sil- 
 ver for convenience of making change. The silver 
 currency of the country was maintained practically on 
 an equality with gold. 
 
 I believe that if President Cleveland in his inaugural 
 address had declared that every authority vested in 
 him, or in the treasury department, would be used to 
 
198 SILVER AND GOLD. 
 
 keep every dollar of our currency as good as every 
 other, and had been left at liberty by the pledges of the 
 platform on which he was elected to add assurances 
 that there should be no change made in the protective 
 system which should not take effect far enough ahead 
 to allow existing industries to adapt themselves to the 
 new condition of things, the calamity which is upon us 
 would not have come. 
 
 The purchase of silver under the act of 1890, in my 
 judgment, is a wasteful and extravagant expenditure 
 of the public money. It never could have been ex- 
 cused, but as an escape from the fiat money of the 
 Bland bill, and from the threat of an absolute free coin- 
 age of silver. But we could have maintained our na- 
 tional credit and the integrity of our national currency 
 in spite of it, without disaster or panic, but for the ad- 
 vent of President Cleveland to power. 
 
 No candid advocate of silver currency can affirm that 
 the people of the United States have not gone to the 
 extreme limit of public safety in the struggle to main- 
 tain silver in connection with gold as the monetary 
 standard. We have purchased this metal and coined it 
 and given it a legal tender power beyond its value for 
 fifteen years. We have, at the expense of the people, 
 purchased it in large quantities beyond any public ne- 
 cessity and beyond any desire of the people to use it as 
 money. During all this time it has been constantly on 
 the decline. Even India has abandoned it. Certainly 
 the experiment has been fully tried and the government 
 has gone to the extent of it" resources in obedience to 
 their desire. 
 
 I suppose that with the coinage of the silver dollar 
 stopped, this country could maintain without difficulty 
 
JOHN SHERMAN, 
 
SENATOK GEORGK F. HOAK. 201 
 
 our present volume of silver currency on an equality, 
 with gold. Some of our friends are apt to point with 
 dismay to the mass of silver coin in the treasury. But 
 every coin in the treasury that is represented by a sil- 
 ver certificate is in practical circulation in the most 
 convenient way. I do not believe that the great com- 
 mercial nations of the world will long submit to be de- 
 prived of the great advantage which seems to me to 
 come from the use of both the precious metals. I look 
 still for an international agreement upon this subject. 
 If that shall come, the relation of the two metals to 
 each other will be carefully reconsidered. 
 
 But I believe one can be I will not say established 
 by law, but I will say ascertained by experience 
 which, when recognized by law and by the common 
 consent of mankind, can be maintained without sub- 
 stantial change for generations to come. From such a 
 condition of tilings the communities upon whom the 
 present crisis bears the hardest will reap, in my opinion, 
 the most abundant harvest. They will cease to depend 
 on a single product, fluctuating in price, with its ever- 
 present temptation to gambling and speculation. 
 
 I am not unmindful of the opinion of some of tha 
 wisest and best financiers that the supply of gold is 
 sufficient for the world's wants for a metallic currency 
 and a standard of value. I do not agree with the ; 
 but it may be that the product of gold will increase, at 
 least, to the world's needs in that respect, if not suffi- 
 cient now. This opinion may, in the end, prevail I 
 do not think anybody who can be trusted has settled 
 yet what are the wants of the world's business, or has 
 any very clear idea on the subject or knows very accu- 
 rately what is likely to be the world's product of gold. 
 12 
 
202 SILVER AND GOLt>. 
 
 Within twenty years silver has been discarded as a 
 measure of value in every country of importance but 
 Mexico. It is not a measure of value in the United 
 States, and has not been since 1834. There is no hu- 
 man probability that it will ever be restored to that 
 function unless some time in the future the supply of 
 gold shall become subject to great fluctuation and the 
 supply of silver become steady. We can not provide 
 for such contingencies and it is needless to speculate 
 about them. But I am utterly opposed to a declaration 
 that we will never use silver again as currency, or will 
 never again coin it for a legal tender. 
 
 To make such a declaration by congress, or to adopt 
 such a policy, would, in my opinion, arm every agitator 
 and anarchist and socialist with an almost irresistible 
 weapon. They would say that by the perpetual adop- 
 tion of a single standard the world's burden of debt 
 would be constantly growing heavier, and that the 
 prices of the world's product would gradually and con- 
 stantly be falling. In support of their contention they 
 would point, not only to the opinions of the fathers, 
 . but to the recent utterances of nearly every public man 
 of all parties; of candidates for the presidency; of 
 nominating conventions ; and, with scarcely an excep- 
 tion, of every person clothed, or likely soon to be 
 clothed with legislative authority. They would point 
 to the fact that even in England the representatives of 
 the last Tory administration inclined more and more to 
 the bimetallic standard, properly adjusted, and to the 
 policy of giving silver a share in the function assigned 
 to the precious metals. I suppose they adhere to that 
 view now. I do not believe that a policy of eternal 
 monometallism, adopted in a time of panio, could stand. 
 
SENATOR GEORGE F. HOAR. 203 
 
 It is enough for the present occasion to say that there 
 should be no further coinage of silver, except by the 
 unanimous consent of commercial nations. Upon that 
 policy, if we adopt it voluntarily, we can stand. If we 
 decline to adopt it voluntarily, we shall be compelled 
 to it, alike by the loss of trade and by the necessities 
 of all classes ; chiefly, however, of the laboring men of 
 the county, who can not live without a stable currency 
 and a steady credit. 
 
204 SILVER AND GOLD. 
 
 CHAPTER V. 
 
 BY SENATOR JOHN SHERMAN OP OHIO. 
 
 IF we adopt the single standard of gold without aid 
 from silver, we will greatly increase the burden of 
 national and individual debts, disturb the relation be- 
 tween capital and labor, cripple the industries of the 
 country, still further reduce the value of silver, of which 
 we now have in the treasury and among our people 
 over 1593,000,000, and of which we are the chief pro- 
 ducer, and invite a struggle with the great commercial 
 nations for the possession of the gold of the world. 
 
 On the other hand, if we continue the purchase of 
 silver, we will eventually bring the United States to 
 the single standard of silver a constantly depreciating 
 commodity, now rejected by the great commercial na- 
 tions as a standard of value ; a commodity confessedly 
 inconvenient by its weight, bulk, and value for the 
 large transactions of foreign and domestic commerce* 
 and detach us from the money standard now adopted 
 by all European nations, with which we now have our 
 chief commercial and social relations. In dealing with 
 such a question we surely ought to dismiss from our 
 minds all party affinities or prejudices ; all local and 
 sectional interests, and all preconceived opinions not 
 justified by existing facts and conditions. 
 
 Upon one thing I believe that all agree : That both 
 these extreme positions shall be rejected ; i-L^t both sil- 
 ver and gold should be continued in use as money a 
 
SENATOR JOHN SHERMAN. 205 
 
 measure of value ; that neither can be dispensed with. 
 Monometallism, pure and simple, has never gained a 
 foothold in the United States, We are all bimetallists. 
 But there are many kinds of bimetallists. One kind 
 favors the adoption of the cheaper metal for the time 
 being as the standard of value. Silver being now the 
 cheaper metal, they favor its free coinage at the present 
 ratio, with the absolute certainty that silver alone will 
 be coined at our mints as money ; that gold will be de- 
 monetized, hoarded at a premium, or exported where it 
 is maintained as standard money. The result would be 
 monometallism of silver. 
 
 Another kind of bimetallist, recognizing that 16 ounces 
 of silver are not worth in the market 1 ounce of gold, 
 proposes the free coinage of 20 ounces of silver as the 
 equivalent of 1 ounce of gold. But this is only a dif- 
 ference in degree, because 1 ounce of gold is worth from 
 27 to 29 ounces of silver. Gold being undervalued, the 
 hoarding or exportation of gold will inevitably follow, 
 and silver will be the only standard. Another kind of 
 biraetallist is one who believes that the essential quality 
 of bimetallism requires that the coins of the two metals 
 shall be maintained of equal purchasing power. The 
 only way in which this can be done, in case the two 
 metals are not on a parity of value at the legal ratio, is 
 by freely coining the more valuable metal and coining 
 the cheaper metal at the legal ratio, and maintaining 
 by the fiat of the government coins of the two metals 
 at parity with each other. 
 
 The two metals, as metals, never have been, are net 
 now, and never can be kept at par with each other fat 
 any considerable time at any fixed ratio. This neces- 
 sarily imposes upon the government the duty of buying 
 
206 SILVER AND GOLD. 
 
 the cheaper metal and coming it into money. The gov- 
 ernment should only pay for the bullion its market 
 value, for it has the burden of maintaining it at par with 
 the dearer metal. If the bullion falls in price the gov- 
 ernment must make it good ; if it rises in value the 
 government gains. 
 
 The government is thus always interested in advanc 
 ing the value of the cheaper metal. This is the kind 
 of bimetallism I believe in. It is the only way in which 
 two commodities of unequal value can be maintained ut 
 parity with each other. The free coinage of silver and 
 gold at any ratio you may fix means the use of the 
 cheaper metal only. This is founded on the universal 
 law of humanity, the law of selfishness. No man will 
 carry to the mint 1 ounce of gold to be coined into 
 dollars when he can carry 16 ounces of silver, worth but 
 little more in the market than half an ounce of gold, 
 and get the same number of dollars. 
 
 The free coinage of silver means the single standard 
 of silver. It means a cheaper dollar, with less purchas- 
 ing power. It means a reduction in the wages of labor ; 
 not in the number of dollars, but in the quantity of 
 bread, meat, clothes, comforts he can purchase with his 
 daily wage. It means a repudiation of a portion of all 
 debts, public and private. It means a bounty to all the 
 banks, savings institutions, trust companies that are in 
 debt more than their credits. It means a nominal ad- 
 vance in prices of the produce of the farmer, but a de- 
 crease in the purchasing power of his money. Its chief 
 attraction is that it enables a debtor to pay his debt 
 contracted upon the existing standard with money of 
 less value. If we want cheap money and to advance 
 , free coinage is the way to do it ; but do not call 
 
JOHN SHERMAN. 207 
 
 it bimetallism. The problem we have to solve is how 
 to secure to our people the largest use of both gold and 
 silver without demonetizing either. 
 
 It so happens that while our country is vast and rich, 
 and full of wealth in the past and in its promises for the 
 future, yet, from its peculiar position, it may be made 
 the base from which gold, silver, or anything else may 
 be drawn. 
 
 There is among the nations of the world one great 
 creditor nation, which holds bonds and: securities in 
 various forms to the amount of thousands of millions of 
 dollars. It is a country which has not been invaded by 
 a foreign foe for five hundred years. Its insular posi- 
 tion is its safety and its fortress. It is a nation of in- 
 telligent people, who command the commerce of the 
 world, whose flag floats on every sea. We ought not 
 to be ashamed of them, or to hate them or dislike them, 
 because we are their children and possess very many of 
 the qualities of the parent stock. 
 
 England is the great creditor nation, but in her vast 
 enterprises she became involved in difficulties since the 
 passage of the act of 1890. Large investments were 
 made by her capitalists in the Argentine Confederacy, 
 amounting to hundreds of millions of dollars. They, 
 by some sudden collapse, were entirely lost ; the Bank 
 of England was threatened, and was compelled to 
 make good those losses, at least to the extent of the 
 drafts made upon England, in order to maintain the 
 banking houses of England, which might have other- 
 wise toppled to their fall, perhaps carrying with them 
 the old mother of them all, the Bank of England. 
 
 These difficulties suddenly grew up and England 
 was compelled to obtain money from France and other 
 
208 SILVER AND GOLD. 
 
 parts of Europe. The immediate result was that our 
 securities were sent home here to our market. They 
 held our securities abroad, and now hold them, to the 
 amount of billions of dollars. They were sent here for 
 sale, and the proceeds in gold were shipped back to pay 
 the losses of Great Britain in the Argentine Confed- 
 eration. 
 
 As I say, our country is great, rich, and powerful ; 
 but we have this difficulty, it is a new country. Our 
 wealth is not in gold and in silver, not in money, not 
 even in bonds and mortgages to send abroad. Our 
 wealth is in our mines, our farms, our workshops, and our 
 railroads the most wonderful development of modern 
 times, because we have in this great agency of com- 
 merce more miles of railroad than all the nations of the 
 world. 
 
 These are our sources of wealth, but they are also 
 causes of danger, because they could not have been de- 
 veloped in the last few years without going into debt, 
 and that debt may be demanded at any time and will 
 draw from us gold, silver, or anything else. 
 
 Following the Argentine trouble, the banks of 
 Australia failed, and the same process went on thci v 
 with the same result. They drew upon our gold. 
 
 Not only that, but other causes combined to produce 
 this trouble. At the very time when we were carrying 
 on this experiment under the act of 1890, Austria- 
 Hungary, Roumania, and several other countries of 
 Europe were changing from a paper or a silver standard 
 to gold, and they made demands upon us. They did 
 it through the English bankers, who were compelled to 
 sell American securities in order to draw our gold 
 away, and then, after the decline of these securities, 
 
SENATOR JOHN SHERMAN. 
 
 by their sudden sale, recouped their losses in the 
 market by buying them at an advance in a short period. 
 That was an additional trouble. 
 
 There was still another trouble. For the fiust time 
 in many years, the balance of trade turned against us. 
 Hitherto we have boasted of from fifty to one hundred 
 million and sometimes two hundred million dollars bal- 
 ance in our favor, which helped us to pay our debts and 
 the debts of our people ; yet during the fiscal year, 
 ending on the 30th of June, 1893, the balance of trade 
 against us was $18,735,728. 
 
 The act of 1890 demonstrated the inevitable result 
 of free coinage in our country. If the purchase of 
 54,000,000 ounces of silver a year did not prevent the 
 further decline of that metal, what would have been 
 the result if we received and coined all the silver that 
 would be brought into the United States ^rom any 
 region of the world at the fixed price of $1.29 per 
 ounce, worth in the market 73 cents an ounce? This 
 is a proposition the logic of which it is impossible to 
 avoid. It is a lesson necessarily to be, taught. With- 
 out it many honest people could not be persuaded that 
 the fiat of the government was not sufficient to lift the 
 price of silver or to prevent its fall. 
 
 There is no doubt that the act of 1890 is made the 
 imaginary pretext for many evils it did not produce. 
 It is made to bear the results of wild speculation, of 
 fears well or ill founded as to future legislation, of fail- 
 ures and disturbances with which it has no connection. 
 It is made the scapegoat for extravagance and folly. 
 The fears of business men that the tariff policy of the 
 Democratic party will disturb all domestic industries 
 and open our markets at cheap rates to the productions 
 
210 SILVER AND GOLD. 
 
 of every country in the world, and the cautionary 
 measures taken by them to guard against this competi- 
 tion is a far more potent cause for distrust, stopping of 
 factories and workshops, than the purchase of 4,500,000 
 ounces of silver a month. 
 
 Certain it is that the act of 1890 did not produce a 
 scarcity of currency. The evil which our people have 
 been suffering was not the volume of money but the 
 hoarding of it. It was a currency famine caused by 
 the hoarding of money taken from its ordinary channels 
 and hidden away in secret places by reason of the fears 
 of millions of people in all ranks and conditions of life. 
 
 Now, I wish to make a few observations in regard to 
 what ought to be done for the future. 
 
 I take it the first object we all have in view is to pre- 
 serve intact the parity of all our money. We have now 
 seven or ^ight hundred million dollars of paper money 
 outstanding for which we are responsible. We have 
 undertaken to maintain that at a parity. How can it 
 be done ? Ordinarily a small reserve would be suffi- 
 cient to give security to everyone and prevent any fear ; 
 but in times like these, in my judgment, it is the duty 
 of the prevailing party, who have the power of the gov- 
 ernment in their hands and can exercise that power at 
 any moment, to strengthen the reserve, so that nobody 
 will fear we will not maintain the parity of all. forms of 
 money in our country. 
 
 In order to carry that out it may ^e necessary to is- 
 sue the securities of our country to buy gold. They 
 will command gold in any market. They would draw 
 it from the Bank of England. A demand note, a 
 note payable at the pleasure of the United States, 
 drawing, say, not to exceed 4 per cent, interest, would 
 
SENATOR JOHN SHERMAN. 21X 
 
 command gold everywhere ; and it is the only way by 
 which the government can summarily acquire th<$ pos- 
 session of gold to maintain its reserve. 
 
 I wish now to call attention to the coinage act of 
 1873, which has been the subject of so much misrep- 
 resentation and falsehood in this debate. I propose 
 to show, in the most unequivocal manner, the decep- 
 tion and falsehood, largely the resu.it of cowardice, 
 that has been uttered in respect to the act I refer to. 
 
 When the coinage ratio was fixed by Alexander 
 Hamilton of 15 ounces of silver as the equivalent of 1 
 ounce of gold, it was substantially equivalent to the 
 market ratio, but the constant tendency of silver to de- 
 cline in relative value had been going on for years and 
 continued in an almost imperceptible degree, so that 
 tvhen the French standard was fixed at 15J to 1, the 
 little gold then in the United States was exported, 
 *,nd silver alone was the coin in circulation. At 
 tfiat time, and for nsatiy years, foreign silver coins 
 tvere largely cimilated as money in the United States, 
 mostly in worn and depreciated coin worth less than its 
 nominal value* This caused the silver dollar, then 
 coined in smaJi quantities, to be melted, as more valu- 
 able than the coin then in circulation. 
 
 Mr. Jefferson, in 1805, discontinued the coinage of 
 the silver dollar, and for thirty years not a dollar was 
 issued. Our currency was either the paper of State 
 banks, fractional coins, or depreciated foreign silver 
 coins. The Spanish milled dollar and the Mexican silver 
 dollar still continued to be the legal standard of money 
 in this country until 1873, some of it at least. So the 
 only dollars then in circulation in this country were 
 dollars of foreign manufacture. After the action in 
 
21 SILVER AND GOLD. 
 
 1835, etc., they were beginning to be coined more 01 
 less, but almost entirely for the Chinese trade. They 
 were exported there during and since our civil war, at 
 the time when specie payments were suspended in all 
 parts of our country except in California. Practically 
 no gold coin was then in circulation. This continued 
 until June 28, 1834, when, in order to secure gold in 
 circulation, the ratio was changed to 16 of silver to 1 
 of gold. The object of this change was distinctly 
 stated, especially by Mr. Benton, who said : 
 
 " To enable the friends of gold to go to work at the 
 right place to effect the recovery of that precious metal 
 which their fathers once possessed ; which the subjects 
 of European kings now possess ; which the citizens of 
 the young republics to the south all possess ; which 
 even the free negroes of San Domingo possess ; but 
 which the yeomanry of this America have been de- 
 prived for more than twenty years, and will be de- 
 prived forever unless they discover tho cause of the 
 evil and apply the remedy to its root." 
 
 By the act of 1834, superadded to by iLe act of 1837, 
 the ratio of 16 to 1 instead of 15 to 1 was adopted. 
 The result was that gold coins were largely introduced 
 and circulated ; but as 16 ounces of silver were worth 
 more than 1 ounce of gold, the silver coins disappeared, 
 except the depreciated silver coin of other countries, 
 then a legal tender. To correct this evil congress, 
 February 21, 1853, provided for the purchase of silver 
 bullion. That was the first time the government had 
 ever undertaken to buy bullion for coinage purposes, so 
 far as I now remember. It provided for the purchase 
 of silver bullion and the coinage of subsidiary silver 
 coins at the ratio of less than 15 to 1. 
 
SENATOR JOHN SHERMAN. 213 
 
 As the value of these coins was less than gold at the 
 coinage ratio, they were limited as a legal tender to $5 
 in any one payment. They were, in fact, a subsidiary 
 coin made on government account, and, from their con- 
 venience and necessity, maintained in circulation. They 
 are the very coins now in use, revived and reenacted by 
 the resumption act of 1875. 
 
 It was not the intention of the framers of this law 
 to demonetize silver, because they were openly avowed 
 bimetallists, but it limited coinage to silver bought by 
 the government. They aaw in this expedient a way in 
 which silver could be more generally utilized than in 
 any other. 
 
 After the passage of the act of February 21, 1853, 
 gold in great quantities, the product of the mines in 
 California, was freely coined at the ratio of 16 to 1, 
 ai>d was in general circulation. If, then, the purchase 
 of silver instead of the free coinage of silver is the de- 
 monetization of silver, it was demonetized practically 
 in 1835, and certainly in 1853, when the purchase of 
 silver and its use as money increased enormously. In 
 1852 the coinage of silver was less than $1,000,000. In 
 the next year the coinage of silver rose to over $9,000,- 
 000, and reached the aggregate of nearly 150,000,000 
 before the beginning of the civil war. Then, as now, 
 the purchase of silver bullion led to a greater coinage 
 than free coinage. 
 
 This was the condition of our coinage until the war, 
 like all other great wars in history, drove all coins into 
 hoarding or exportation, and paper promises, great and 
 small, from five cents to a thousand dollars, supplanted 
 both silver and gold. 
 
 New we ooine to the aet of 1873, which dropped 
 
SILVER AND GOLD. 
 
 from the coin the silver dollar. The charge has been 
 made over and over again that this was surreptitiously 
 done ; that it was done under cover in some way. That 
 has been clearly disproved by the exhibition of the 
 public records, and it seems to me that every intelligent 
 man ought now to have seen that fact. But there has 
 been a repetition of that imputation. It was an impu- 
 tation against the whole mass of the forty-second con- 
 gress-, and yet in conventions no doubt of honest and 
 good people I do not in the least disparage them 
 they denounced the act of 1873 as a fraud and as a 
 crime ; yes, it was the crime of 1873. 
 
 What is the history of that bill ? It was a bill 
 framed in the treasury department. It did not come 
 into congress in the ordinary way, but it was framed in 
 the treasury department by a distinguished body of ex- 
 perts, every one of whose names is now borne with 
 honor wherever it is mentioned. Most of them are 
 dead, but some of them are living. Mr. Pollock, long 
 a Director of the Mint; Mr. Secretary Boutwell, who 
 claims to be the author of the bill, and properly so, be- 
 cause he was at the head of the department ; Mr. John 
 Jay Knox, who held the office of Deputy Comptroller 
 of the Currency ; Mr. Linderman, who was Director of 
 the Mint ; Mr. Patterson, who was Superintendent of 
 the Mint at Philadelphia, and a whole host of other ex- 
 perts, framed that bill after a most elaborate corres- 
 pondence, which is contained in the official documents 
 communicated to congress at the time. 
 
 So the whole matter was open. They circulated 
 thousands of copies of the bill to everybody who de- 
 sired to read it or could be prevailed upon to read it, in 
 order to get the sense and judgment f the experts of 
 
SENATOR JOHN SHERMAN. 215 
 
 our country in respect to the coinage, and those an- 
 swers are printed in a public document communicated 
 to congress upon the call of the house of representa- 
 tives before a single step was taken on the bill. 
 
 These were men of untarnished character. It was a 
 scientific bill, a bill that members of congress do not 
 care much about handling, because if we are lawyers 
 we are not metallists , if we are business men we do 
 not know anything about the mystery of coinage, one 
 of the most subtle and careful sciences. These were 
 men who would rather pore over a table of logarithms 
 or study a problem in geometry or do something of that 
 kind than do anything to tarnish their name and their 
 fame. They prepared this bill at the request of the 
 Secretary of the Treasury, and it was communicated to 
 congress. 
 
 The bill contains seventy-one sections. Sections 15 
 and 18 of the bill are the only ones to which this impu- 
 tation has ever been made. I have here sections 15 
 and 18 as originally introduced by the Secretary of the 
 Treasury and sent to the Committee on Finance. Here 
 are the original sections: 
 
 " SEC. 15. And be it further enacted, That of the sil- 
 ver coin, the weight of the half-dollar, or piece of 50 
 cents, shall be 192 grains ; and that of the quarter- 
 dollar and dime shall be, respectively, one-half and one- 
 fifth of the weight of said half-dollar. That the silver 
 coin issued in conformity with the above section shall 
 be a legal tender in any ^ne payment of debts for all 
 sums less than $1. 
 
 " SEC. 18. And be it further enacted, That no coins, 
 either gold, silver, or minor coinage, shall hereafter be 
 issued from the mint other than those of the denomina- 
 tions, standards, and weights herein set forth." 
 
216 SILVER AND GOLD. 
 
 Under that section the dollar was dropped from the 
 coinage, a dollar that had scarcely been used for nearly 
 seventy years except to put silver in form for exporta- 
 tion. But I will allude to that more hereafter. 
 
 These sections in the three years that the bill was 
 pending in congress were changed either in the house 
 or senate in only one or two unimportant particulars. 
 The house of representatives thought it was necessary 
 to provide a dollar. They knew that the dollar was 
 dropped out, as everybody else must have known, be- 
 cause the gentleman who framed the original bill give 
 the history of the act, and this matter was pointed out 
 by them. It was discussed and the reasons given. 
 
 I have the form which these two sections assumed 
 when the bill was finally passed. Here is the differ- 
 ence: 
 
 " That the silver coins of the United States shall be 
 a trade dollar." 
 
 Instead of a trade dollar, and omitting the dollar of 
 412J grains nobody proposed such a dollar the 
 house of representatives put on a dollar of 384 grains, 
 and that was to be, like the half-dollar, a subsidiary 
 coin. It was to be of the exact weight of two half- 
 dollars. That was put on by the house of representa- 
 tives, because they wished to keep the form of a dollar, 
 and it continued 384 grains. 
 
 The bill was pending during three different sessions 
 of congress. The dollar of 384 grains was inserted 
 when it came to us from the house. The bill of 1870 
 having passed the senate, failed in the house of repre- 
 sentatives for want of time. In the following congress 
 the same bill was taken up in the house, there consid- 
 

 WILLIAM M. STEWART, 
 
SENATOR JOHN SHERMAN. 219 
 
 ered, passed, and sent to the senate. The senate then, 
 upon the demand of the people of the Pacific coast and 
 the petition of the State of California, inserted, instead 
 of the 384-grain dollar, the trade dollar containing 420 
 grains. The senate also dropped out the word " grains," 
 which had been introduced in the house, and in that 
 form it finally passed. Throughout all these changes 
 this provision remained : 
 
 " SEC. 17. That no coins, either of gold, silver, or 
 minor coinage, shall hereafter be issued from the mint 
 other than those of the denominations, standards, and 
 weights herein set forth." 
 
 It is thus shown that from the first introduction of 
 the bill, April 25, 1870, until its final passage into a 
 law, February, 1873, the silver dollar of 412J grains 
 was dropped from the silver coins, and by section 17 
 was prohibited. 
 
 The finance committee carefully examined that bill. 
 We were not in any hurry about it. It was sent to us 
 in April, 1870. In December, 1870, the Committee on 
 Finance, after a careful examination, after having the 
 bill printed and sent by the order of the senate to 
 everyone who desired to read it or look over it, re- 
 ported it unanimously. 
 
 The bill was reported to the senate December 19, 
 1870, after lying in our committee room for eight 
 months. The nature of the bill I have already d$- 
 scribed. The dollar was dropped from the coinage in 
 the bill framed in the treasury department. It was 
 then an unknown coin. Although I was quite active 
 in business which brought under my eye different forma 
 of money, I do not remember at that time ever to hard 
 IS 
 
220 SILVER AND GOLD. 
 
 eeen a silver dollar. It was an unknown quantity. 
 Probably if it had been mentioned to the committee 
 and discussed it would have be^n thought, as a matter 
 of course, scarcely worthy of inquiry . If it was known 
 at all, it was known as a coin for the foreign market. 
 
 No one proposed to reissue it. The Pacific coast had 
 six intelligent, able, and competent senators on this 
 floor, representing a population then of not more than 
 a million, if that much. They would have carefully 
 looked out for the interests of silver, if the bill affected 
 them injuriously. But the silver dollar at that time 
 was worth more than the gold dollar. California and 
 Nevada were on the gold standard. 
 
 As I said, the bill was printed over and over again, 
 finally reported, and brought before the senate It 
 w^s debated for three days. The senator from Nevada, 
 Mr. Stewart, took a leading part in that debate, and 
 every senator from the Pacific coast spoke upon the 
 measure. Representing the committee, I presented the 
 questions as they occurred from time to time, until 
 finally we differed quite seriously upon the question of 
 a charge for the coinage of gold. The only yea and- 
 nay vote in the senate on the passage of that bill, after 
 two days debate, occurred on the 10th, day of January, 
 1871. " 
 
 Every one of the six members from the Pacific coast 
 Voted for the bill after full debate. 
 
 The continuation of the history of that bill through 
 the house of representatives and through all of its 
 stages until it finally passed into the hands of the Com- 
 mittee of Conference is clearly and distinctly stated by 
 the report of Mr. Knox, which has been published. 
 
 The bill went to the house of representatives. The 
 
SENATOR JOHN SHERMAN. 221 
 
 official record shows that it was carefully considered 
 there, especially section 16, dropping the old dollar. It 
 is sometimes said that nobody explained that the dollar 
 was demonetized. Here is the statement made by Mr. 
 Hooper, who had charge of the bill, one of the most 
 eminent men who has been furnished the house of 
 representatives from the State of Massachusetts. 
 
 " Section 16 reenacts the provisions of existing laws 
 defining the silver coins and their weights, respectively, 
 except in relation to the silver dollar, which is reduced 
 in weight from 412 to 384 grains ; thus making it a 
 subsidiary coin in harmony with the silver coins of less 
 denomination to secure its concurrent circulation with 
 them. The silver doilar of 412J grains, by reason of 
 its bullion and intrinsic value being greater than its 
 nominal value, long since ceased to be a coin of circu- 
 lation, and is melted by manufacturers of silverware, 
 It does not circulate now in commercial transactions 
 with any country, and the convenience of those manu- 
 facturers in this respect can better be met by supplying 
 small stamped bars of the same standard, avoiding the 
 useless expense of coining the dollar for that purpose. 
 The coinage of the half dime is discontinued for the 
 reason that its place is supplied by the copper nickel 
 five cent piece, of which a large issue has been made 
 and which, by the provisions of the act authorizing its 
 issue, is redeemable in United States currency." 
 
 That shows that it was done openly and fairly, that 
 attention was called to it, and that it was debated. The 
 bill finally passed the house of representatives on the 
 27th of May, 1872. It came to the senate, was referred 
 to the committee on finance, and not reported until 
 December 16, 1872. We were not in a hurry about it-, 
 It was a great measure, a heavy measure. It was 
 finally brought before the senate, and the senate, La* 
 
222 SILVEE AND GOLD. 
 
 stead of providing for a dollar of 384 grains, struck 
 that out and inserted the trade dollar. That trade dol- 
 lar was only a legal tender for $5. It was not until 
 years after, when that trade dollar came into general 
 circulation here, that finally the legal tender quality 
 was given to it. 
 
 The bill was brought up again before the senate for 
 final consideration. No doubt the senate was some- 
 what weary of it. It had already passed the senate in 
 the previous congress, had been read in full in all its 
 copious length, and was then taken up and considered 
 as such a bill is very apt to be which has once passed 
 the senate of the United States. Finally, after debate 
 upon several amendments, it was passed unanimously, 
 and then, at last, I was charged with the responsibil- 
 ity for it, when I merely voted with all others for the 
 bill. 
 
 The action of the senate was unanimous. The only 
 important amendment made, I think, to this section, or 
 to any section of the bill, was the substitution of the 
 trade dollar for what was called the franc dollar. I be- 
 lieve the dollar provided for by the house was precisely 
 the equivalent of 5 francs, or two half dollars of our 
 subsidiary coin. Then it was made a legal tender for 
 only $5. 
 
 There never was a bill proposed in the congress of 
 the United States which was so publicly and openly 
 presented and agitated. I know of no bill in my ex- 
 perience, which was printed, as this was, sixteen times, 
 in order to invite attention to it. I know no bill which 
 was freer from any immoral or wrong influence than 
 this act of 1873. Not one single word of that act has 
 been impugned, but there has been the false allega- 
 
SENATOR JOHN SHERMAN. 223 
 
 tion made that the silver dollar was surreptitiously 
 omitted from the coinage. No fact can be proved more 
 clearly and fully than that is a falsehood and a lie by 
 whomsoever uttered. 
 
 Now, to resume for a moment the history of the act 
 of 1873 : It was framed in the treasury department 
 after a thorough examination by experts, transmitted 
 to both houses of congress, thoroughly examined and 
 debated during four consecutive sessions, the informa- 
 tion called for by the house of representatives and 
 printed six times by order broadly circulated, and many 
 amendments were proposed, but no material changes 
 were made in the coinage clause from the beginning to 
 the end of the controversy. It added the French dol- 
 lar for a time, but that was superseded by the trade 
 dollar, and neither was made a legal tender but for $5. 
 It passed the senate on the 10th of January, 1871 36 
 yeas and 14 nays every senator from the Pacific coast 
 voting for it. 
 
 It was introduced in the house of representatives by 
 Mr. Hooper at the next session. It was debated, 
 scrutinized, and passed unanimously, dropping the sil- 
 ver dollar as directly stated by Mr. Hooper. It was 
 reported, debated, amended, arid passed by the senate 
 unanimously. In every stage of the bill and every print 
 the dollar of 412J grains was prohibited, and the single 
 gold standard recognized, proclaimed, and understood. 
 It was not until silver was a cheaper dollar that any* 
 one demanded it, and then it was to take advantage of 
 a creditor. 
 
 Now, it has always been within the power of con- 
 gress to correct this error, if error was made ; but con- 
 gress has refused over and over again to do it. When 
 
224 SILVER AND GOLD. 
 
 the controversy arose about the Bland bill and the 
 house of representatives proposed the free coinage of 
 silver, the senate rejected it after a deliberate contest 
 and substituted in place of it what is called the Bland- 
 Allison act, which required the purchase of silver bul- 
 lion at its market value and its coinage to a limited 
 amount. Every effort has been made from that time 
 to this to have the congress of the United States pass 
 a free coinage act. 
 
 As I said before, shortly after the passage of the 
 Bland -Allison act, and from that time on there was a 
 constant debate going on in congress, and finally con- 
 gress raised the amount of silver bullion to be pur- 
 chased to four mil] ion and a half ounces by the act of 
 1890. The question then was between the free coin^ 
 age of silver and the purchase of silver in a limited 
 amount to be coined at the pleasure of the government 
 as it. was needed. The same question is upon us now 
 in the difficulties which surround us, and it is time that 
 the question should be definitely and finally settled. 
 
 ^^vflu-w^. * 
 
SENATOR WILLIAM M. STEWART. 225 
 
 CHAPTER VI. 
 
 THE SCIENCE OF MONEY BY SENATOR WILLIAM M. 
 STEWART OP NEVADA. 
 
 CIVILIZATION is created by making common to all 
 what is known or produced by each. There are two 
 inventions of man which are essential to civilization, 
 namely language and money. Neither is useful in iso- 
 lation while there is but one individual to learn or to 
 produce. 
 
 Spoken and written language make acquired knowl- 
 edge accessible to all. Money commands services and 
 all the products of labor, and makes the efforts of the 
 whole human race contribute to the wants of each 
 member of society. Equally with language, it is an 
 essential factor of civilization, without which man 
 would soon descend to the lowest condition of barbar- 
 ism. 
 
 I am not aware that even a single tribe of men has 
 been discovered which did not possess some kind of 
 money. The efforts of barbarians to create money, 
 which would enable them to enjoy the fruits of each 
 other's labor, are very instructive. Cowrie shells, to 
 this day, answer all the purposes of local currency 
 among certain African tribes; Wampum, made from 
 shells, fully possessed the money function among the 
 American Indians; cattle were used as currency in an- 
 cient Greece ; the money of Iceland in former times 
 was codfish, and our Anglo-Saxon ancestors used slaves 
 as money. 
 
226 SILVER AND GOI& 
 
 With Jie advance of civilization these various de- 
 vices are abandoned, either on account of their incon- 
 venience, or because they are too abundant. The 
 more civilized nations have used gold and silver from 
 earliest history. The reasons why their use has been so 
 long continued may be found in their indestructibility 
 and limited quantity. Throughout history the almost 
 universal use of the precious metals as money, has 
 educated the world to the idea that the precious metals 
 possess some intrinsic quality which makes them 
 money, and to overlook the fact that their money 
 function was given to them by Man and not by Nature. 
 They do not consider the fact that if, in the beginning, 
 there had been discovered some other material more 
 easily obtained, more conveniently transportable, equally 
 indestructible and limited in quantity, gold and silver 
 might have remained commodities without any detri- 
 ment to civilization. 
 
 It must be borne in mind that, at the time the pre- 
 cious metals were first used as money, and for a long 
 time afterward, the arts of making, engraving and 
 printing paper were unknown, and also that the means 
 of limiting the quantity of money by law were very im- 
 perfect, on account of the frail and unstable character 
 of government. Every civilized government of modern 
 times has given numerous practical illustrations of the 
 possibility of producing paper money possessing dura- 
 bility, more convenient in use, and more cheaply trans- 
 portable than either gold or silver. 
 
 No fixed system or rule for limiting quantity by law 
 has yet been established. This is the important ques- 
 tion to be determined before the limitation, which na- 
 ture placed on the quantity of gold and silver, can be 
 
SENATOR WILLIAM M. STEWART. 227 
 
 abandoned. Before discussing the importance of limi- 
 tation of the quantity of money, I will consider the 
 function which money performs. 
 
 Money is a medium of exchange, an expression of 
 price, and a measure of deferred payments. In the 
 early stages of civilization the function of facilitating 
 the exchange of the property of one man for the prop, 
 erty of another, and designating the price of property 
 exchanged, were the most important uses of money. 
 But, at the present time, the measurement of time con- 
 tracts, so as to do equity between debtor and creditor, 
 is the paramount consideration. 
 
 When, by custom, agreement, or law, a common re- 
 presentative of things useful has been selected, such 
 common representative may be exchanged for any 
 property ; because, by such custom, agreement or law, 
 it is made representative of all property. The repre- 
 sentative of all property may, or may not, be composed 
 of material useful in itself, without regard to the 
 function of representing other useful things ; but it 
 cannot be money, unless it is made an order for all 
 things for sale, by some law, custom or understanding, 
 which the people observe, either voluntarily, or by force 
 of sovereign authority. It must be an unquestioned 
 order or warrant of attorney, in the hands of its owner, 
 for everything offered for sale, and for the discharge of 
 all obligations payable in money. 
 
 The power conferred by this warrant of attorne} 7 -, ir\ 
 modern times, is called legal tender ; because the law 
 requires creditors to receive it in payment for debts 
 The use of the precious metals as money, and the use,, 
 at the same time, of stamped paper of no appreciably 
 value, have led to much confusion. The fact that tho 
 
228 SILVER AND GULD. 
 
 precious metals have uses, other than those incident to 
 the representative value conferred by the money func- 
 tion, tends to complicate the subject, and leads many 
 to suppose that it is the material in these metals, and 
 not the money function, which makes them valuable as 
 money. 
 
 Neither gold nor silver can be used as a commodity, 
 and at the same time in its representative character, as 
 an order for all things for sale, and a legal tender for 
 the payment of debts. Anything which is clothed 
 with the money function of a dollar, will pay a debt 
 amounting to a dollar, and buy a dollar's worth of prop- 
 erty no more and no less no matter of what material 
 it may be made. It is the money function which makes 
 it a dollar, not the paper, the gold or the stiver. If there 
 were no law, custom or understanding, by which the 
 money function could be conferred upon anything but 
 gold and silver, and gold and silver only could be con- 
 verted into money without loss or charge, the amount of 
 gold required to make a dollar, would be worth a dollar, 
 and the amount of silver necessaiy to make a dollar, 
 would also be worth a dollar. And if the money func- 
 tion could only be conferred upon a certain kind of 
 yellow paper, and another certain kind of white paper, 
 and all such paper, both the yellow and the white, 
 could be converted into money without loss or charge, 
 the amount of yellow paper required to make a dollar, 
 would be worth a dollar ; and the amount of white 
 paper required to make the same amount of money, 
 would also be worth a dollar, but the value of each 
 dollar in commodities, would depend on the number of 
 such dollars. 
 
 Rude nature, never has, and there is no probability 
 
SENATOR WILLIAM M. STEWART. 229 
 
 that she 'ever will, yield from the mines too much of 
 either gold or silver, or both, for use as money ; conse- 
 quently, it has always been, and still is, safe and expe- 
 dient to confer the money function upon all the pre- 
 cious metals, offered for that purpose, by coming them 
 into money. 
 
 This limitation of nature is called the automatic 
 theory of money. From time immemorial, previous to 
 1873, with few exceptions, the great commercial na- 
 tions have furnished their people with full legal tender 
 money, by coining all the gold and silver deposited 
 at their mints for that purpose. But the case is very 
 different where paper or any other material, which 
 may be obtained in unlimited quantities, is endowed 
 with the money function. While the precious metals 
 were both used, a law providing how much of each 
 should be required for a dollar, or other unit of money, 
 and with a provision for the unlimited coinage of both, 
 was all that was required. But where paper or other 
 material of unlimited quantity is used, the law must 
 not only provide how paper shall be converted into 
 money, but must also determine what quantity of 
 money shall be created from paper. In the former case 
 nature determines the quantity of money ; in the latter 
 the quantity must be determined by law. In other 
 words, in using paper in the place of gold and silver, 
 the law of Man must be substituted for the law of Na- 
 ture. 
 
 The automatic theory, of limiting the volume of 
 coin, by the quantity of the precious metals, is not a 
 perfect system. When the mines are productive, coin 
 is more plentiful than when the output is diminished 
 from exhaustion of the mines or other causes. In 
 
230 SILVER AND GOLD. 
 
 every age of the world, when there has been an abun- 
 dance of coin, there has been prosperity as well ; and, 
 when there has been a scarcity of coin there has been 
 adversity. Thus the automatic theory works well 
 when the precious metals are abundant, and badly 
 when they are scarce. It is not a scientific system, be- 
 cause such a system would furnish an adequate supply 
 of money a all times, without regard to the accidents 
 fof aiming. 
 
 For 1,400 years previous to the commencement of 
 the 16th century it worked badly, because very little 
 gold or silver was produced. For 300 years previous 
 to 1810 the automatic system worked well, because 
 during that period mines were reasonably productive. 
 Between 1810 and 1850, on account of the Spanish- 
 American wars, which nearly destroyed mining, the 
 system produced ruinous contraction and hard times. 
 From 1850 to 1873 there was a copious yield of the 
 precious metals, and the progress of civilization was 
 marvelous. In 1873 the automatic system was aban- 
 doned, and a scheme was inaugurated to regulate the 
 volume of the standard money of the world by gold 
 alone. 
 
 This undertaking has not been fully accomplished, 
 but, in its approach to consummation, it has produced 
 disaster. It was the most radical financial revolution 
 ever undertaken in the history of the world, and one 
 which, if finally consummated, must end in ruin. If 
 the automatic theory had not been abandoned in 1873, 
 the prosperity of the preceding twenty-three years 
 would have continued, because the output of the two 
 metals would have maintained a reasonable supply of 
 money. The restoration of the automatic system, by 
 
SENATOR WILLIAM M. STEWART. 231 
 
 the remonetization of silver, would secure filture pros- 
 perity indefinitely, if the discovery and development of 
 gold and silver mines should furnish an adequate pro- 
 duction of the precious metals. 
 
 If modern civilization is to be maintained, the 
 automatic system must be restored, or a more scientific 
 system devised and established in its stead. Education 
 and habit of thought favor the automatic system, 
 which, as we have seen, consists in the use of both 
 gold and silver, without discrimination against either. 
 The abandonment of the automatic system has forced 
 the inquiry as to what necessary functions gold and 
 silver perform as money, which might not as well be 
 performed by some other substance. 
 
 Since the arts of making, engraving and printing 
 paper have been invented, a material has been pro- 
 duced, having every essential quality of gold and sil- 
 ver, for use as money, except limitation of quantity. 
 Paper is sufficiently durable, cheaper as to cost of 
 transportation, and more convenient than coin, except 
 for small change. The only question remaining is, can 
 any sure and safe rule be ascertained and established 
 by law for the limitation of quantity. 
 
 General prices furnish a rule or gauge by which to 
 determine whether the supply of money is sufficient, or 
 otherwise. The volume of money in circulation, and 
 all the property for sale, are reciprocally a supply and 
 demand as to each other. If the average price of com- 
 modities is stable, the proper volume of money is in cir- 
 culation. All authorities agree that stability in general 
 prices is the end and aim of monetary science. Any in- 
 crease or diminution in the supply of money, produces 
 a corresponding rise or fall in general prices. At the 
 
232 SILVEB AND GOLD. 
 
 beginning ^2 the sixteenth century, when mere was 
 only about $150,000,000 of coin in circulation in all 
 Europe, general prices reached the lowest level in his- 
 tory. A hundred years after the discovery of gold and 
 silver in Mexico and South America, the volume of 
 metallic money was more than quadruple, and prices 
 greatly advanced. Between the years 1810 and 1850, 
 the cutting off of the supply of the precious metals, 
 due to the Spanish-American wars, largely reduced 
 the supply of money, as compared with property for 
 sale, and prices fell over 50 per cent. The new supply 
 of gold from California and Australia advanced prices, 
 between 1850 and 1873, from 18 to 25 per cent. Since 
 1873, the reduction of the supply of standard money, 
 by the demonetization of silver, has produced a fall in 
 general prices amounting to fully 50 per cent. 
 
 These practical examples are in harmony with the 
 law of supply and demand. A supply of money, in 
 excess of the legitimate demands of business, is not 
 desirable, because it disturbs the equity of time con- 
 tracts, and enables the debtor to discharge his obliga- 
 tions in money less valuable than the money in circula- 
 tion at the time the contract was made. 
 
 A constantly increasing volume of money is neces- 
 sary to supply the increased demand, arising from the 
 growth of population and business. A decreasing vol- 
 ume of money, as compared with the demand, is dis- 
 astrous* It compels the debtor to pay in dearer 
 money than he undertook to pay when he entered 
 into the contract It discourages enterprise, because 
 property produced or acquired by the investment of 
 money, declines in price, and thus the probability of 
 profit upon any venture is diminished. When money 
 
SENATOR WILLIAM M. STEWART. 233 
 
 is advancing in value, or, what is the same thing, is in- 
 creasing in purchasing power, the human instinct of 
 gain induces investments in money. Such investments 
 are made by exchanging property for money, with a 
 purpose to hoard it, or for bonds and other credits, 
 which are investments in money futures. Investments 
 of this character do not create wealth, but absorb 
 wealth already produced. 
 
 When prices are rising, the same instinct leads to 
 the acquisition of property. Property is acquired by 
 purchase, and by production which results from the 
 employment of labor. The employment of labor 
 in production is the source of all wealth and 
 prosperity. Speculators of every description, includ- 
 ing dealers in money, in the language of Wall 
 street, " go long " on those things, whether prop- 
 erty or money, which are rising in price or value, and 
 "go short " on those things which they believe to be on 
 the decline. Since the demonetization of silver, money 
 has been appreciating in value, and the competition to 
 acquire reliable money futures has been so great as to 
 induce people to accept very low interest, in view of the 
 prospect of an increase in the purchasing power of 
 money invested. The decline of prices has been so 
 serious, as to induce prudent men to go short on prop- 
 erty, by declining to engage in new enterprises, and by 
 converting their property into money futures. En- 
 forced idleness, produced by the enhancement of the 
 value of gold, or what is the same thing, the fall of 
 prices, has withdrawn the progressive and the ambi- 
 tious from productive undertakings, arid has led them to 
 seek wealth by investment in money futures. 
 
 An infinite variety of causes affect progress and 
 
234 SILVER AND GOLD. 
 
 prosperity. Wars, pestilence, famine and bad govern- 
 ment, are common afflictions of the human race. But, 
 in the absence of a known and great calamity, contrac- 
 tion of the circulating medium is the only instrument 
 of universal misery. No form of civilization or govern- 
 ment has been able to withstand its blighting influ- 
 ence, or to survive its long continuance. The unlimited 
 use of gold and silver, under present conditions, would 
 rescue the country from pending disaster, and, if the 
 mines should continue productive, would secure a pros- 
 perous future. If, ignoring well known facts, such as, 
 that the quantity of gold coin in existence is constantly 
 being reduced, through abrasion and loss, and, that 
 there is not any reasonable prospect of a future pro- 
 duction of gold more than sufficient to supply the arts, 
 the money powers shall continue to resist the restora- 
 tion of the automatic system, and to insist that the 
 volume of money of ultimate payment shall be re- 
 duced to the narrow basis of existing gold, an effort 
 must be made to secure a more scientific money system, 
 which would dispense with the use of the precious 
 metals altogether. 
 
 A paper money, representative of all property for sale, 
 clothed with unlimited legal tender quality, redeem- 
 able in debts and taxes, and of a proper volume, would 
 be an ideal money. If such paper money were estab- 
 lished, and the Secretary of the Treasury were required 
 to pay it out in lieu of all other money now in the 
 treasury, or hereafter to be received ; if he were further 
 required to destroy all other paper money of whatever 
 description, in, or to be in, the treasury ; and to sell, as 
 bullion, all gold and silver in, or to be paid into, the 
 treasury, and to replace it all with the newly- estab- 
 
WILLIAM B. ALLISON, 
 
SENATOR WILLIAM M, STEWART. 237 
 
 lished paper money, the volume of circulation in the 
 country would, thereby, be neither increased nor 
 diminished ; but it would consist of a single circulating 
 medium, which, to the exclusion of all other money, 
 would be clothed with the money function and legal 
 tender power. 
 
 Does anybody doubt that the only money which would 
 pay debts and taxes, in the richest country in the 
 world, would be the best money ? Every resident, and 
 every foreigner, desiring to buy property, pay debts or 
 taxes in this country, would be compelled to have it. 
 Would not such a demand be sufficient ? If it be con- 
 tended that the present supply of money is adequate, 
 it cannot be maintained that it will continue to be so. 
 The growth of population and business constantly in- 
 creases the demand for money ; and the supply must 
 also be increased to prevent contraction. The percent- 
 age of increase of population is known, and a like per 
 cent, of money could be added, by covering into the 
 treasury a further amount of representative paper 
 money, in lieu of taxes, and the paying out of the same 
 for current expenses. The increase of business might 
 require a greater percentage of increase in the volume 
 of money, than the growth of the population would in- 
 dicate. In that case it would be necessary to resort to 
 that certain and reliable gauge of the volume of money, 
 which is found in the general range of prices. Com- 
 petent and reliable statisticians might be employed to 
 investigate prices, and ascertain whether general prices 
 were rising or falling. If rising, the amount of money 
 covered into the treasury, from time to time, might be 
 diminished, and, if falling, an increased supply must be 
 found, until stability in general prices should be re- 
 14 
 
238 SILVER AND GOLD. 
 
 stored and maintained. It is the volume of money 
 which regulates general prices, and, by the rise and 
 fall of general prices, any excess or deficieney in the 
 volume of loaoney in circulation, is shown. 
 
 The reason why general prices, and the volume of 
 money, respond and correspond to each other, is be- 
 cause the money in circulation, and all the property 
 for sale, are reciprocally the supply and demand for 
 each other. The confusion which exists with regard 
 to the relation between money and prices, arises from 
 a comparison of isolated articles or commodities, with 
 money. The demand for money is equal to the demand 
 for all other things ; because it is the universal order 
 for property ; but the demand for each kind of prop- 
 erty is limited. Its value, as compared with other 
 property, and its price in money, depend upon the sup- 
 ply and demand of the particular kind of property. 
 The fluctuations, in price or value, of every description 
 of property in obedience to the law of supply and de- 
 mand, have no effect upon the aggregate value of all 
 property offered for sale ; for that value is dependent, 
 solely, upon the total supply of money. 
 
 Whatever credit devices may be invented, whether 
 government or bank currency, redeemable in gold, or 
 private checks, bills of exchange or other promises to 
 pay, the volume of the circulating medium must ulti- 
 mately depend upon the volume of money clothed with 
 every money function. Money redeemable in other 
 money is simply a form of credit. Credit is limited by 
 the means of payment or redemption. Since prehistoric 
 times and up to the year 1873, the fabric of credit, in- 
 cluding currency redeemable in coin, rested on both 
 gold and silver. That part of the foundation which 
 
SENATOR WILLIAM M. STEWART. 239 
 
 consisted of silver, has been removed, and the silver 
 coin, which formed at least one-half of the base, has 
 been converted into credit money, to be redeemed in 
 gold. In round numbers, the gold coin, silver coin and 
 paper money of the world, are about equal to each 
 other. The pyramid was firm and substantial while 
 gold and silver were the base, and constituted two-thirds 
 of the fabric ; and while paper, the apex, represented 
 only about one third. It now stands: gold coin, one - 
 third, for the apex ; and silver and paper, two-thirds, 
 for the base ; but the pyramid is reversed, witli the apex 
 at the bottom. 
 
 The load of credit resting on gold must be greatly 
 reduced to correspond with the gold standard, and that 
 is the process now going on, which has produced the 
 current financial " squeeze," and to which the authors 
 of the ruin point as an "object lesson." 
 
 The hope of relief by increasing debts, or issuing more 
 currency redeemable in gold, is vain. The inflation of 
 prices, by issuing paper redeemable in gold, without 
 gold for redemption, must end in panic and collapse. 
 It would be like attempting a permanent cure of 
 delirium tremens by an increased indulgence in strong 
 drink. The grasp of gold contraction can only be tem- 
 porarily relieved by credit devices, as a patient is some- 
 times revived when suffering from the effects of alcohol- 
 ism, by a cocktail in the morning, only to be sunk to a 
 still lower depth of depression by the inevitable reaction 
 later in the day. Banks are the storm center of panics. 
 The squeeze of 1893, to force the gold standard, pumped 
 the wind out of $4,500,000,000 of bank credits, based 
 on $500,000,000 of reserves. But the " object lesson " 
 
240 SILVER AND GOLD. 
 
 has not silenced the demand of the gold trust for more 
 credit and less money. 
 
 The alternative of scientific mone} r , of material other 
 than gold and silver, or the restoration of the automatic 
 theory, is presented to the creditor class. The revolu- 
 tion which they have inaugurated to destroy the auto- 
 matic theory, must either be arrested by the restoration 
 of silver, or by the invention and establishment of a 
 better system. 
 
 The prelimr ary effects of the gold standard con- 
 traction, have paralyzed enterprise and destroyed the 
 the prospect of future credits. It is now destroying 
 existing obligations, and, when its deadly work shall 
 have been fully accomplished, all bonded debts will 
 have been liquidated by repudiation and bankruptcy. 
 If blind greed is to be the only guide of the money 
 powers in the future, as it has been in the past, the hor- 
 rors of universal ruin and the disorganization of society 
 may be realized before the work of reconstruction can 
 be begun. The hope still exists that there is sufficient 
 intelligence in the masses, to direct their dormant ener- 
 gies in a mighty effort to break the chains of contrac- 
 tion, with which fraud and avarice have bound the 
 limbs of enterprise. If this hope may be realized, the 
 civilization of the Nineteenth Century will escape the 
 abyss of degradation and want in which all preceding 
 civilizations have perished. 
 
SENATOR WILLIAM B. ALLISON. 241 
 
 CHAPTER VII. 
 
 BY SENATOR WM. B. ALLISON, OF IOWA. 
 
 IT has been disclosed to us that between 1860 and 
 1890 our population had more than doubled, notwith- 
 standing in the mean time we had a most desolating 
 and devastating civil war. I was gratified to learn 
 that between 1860 and 1890, the wealth of this coun- 
 try had grown, not in proportion to its population, but 
 had grown fourfold in wealth from 9 16,000,000,000 to 
 $64,000,000,000. 
 
 I was also gratified to learn that during all this 
 progress of development and growth, the West and 
 the Northwest have been specially favored in that 
 progress ; that the growth of wheat from 1871 to 1892, 
 a period of twenty-one years, had increased from 240,- 
 000,000 bushels to 611,000,000 bushels; that the South- 
 ern States, which had been overrun, as it were, by 
 vour armiesj with devastation in their pathway, have 
 K> far recovered that from 1870 to 1892 they had in- 
 creased the growth of the great staple crop of cotton 
 from nearly 4,000,000 bales to more than 9,000,000 
 bales, and that nearly all other agricultural products 
 'liad increased in the same proportion. I was also grati- 
 fied to see that during that time the exchanges in fifty- 
 &even cities of our country had disclosed the enormous 
 growth of $62,000,000,000 per annum. 
 
 It occurred to me that the question which we ara 
 now debating is, in some of its aspects, if not in all, 
 
242 SILVER AND GOLT?. 
 
 the most important question which can engage the con- 
 sideration of the American people. This great produc- 
 tion, this great population, energetic and active as it is, 
 all receiving either wages or the result of its products, 
 oan not engage in the ancient methods of barter. We 
 must have some measure whereby we can value these 
 exchanges and products, and the question in which we 
 are engaged is whether we shall at this time, by direct 
 or indirect legislation, change the measure of value in 
 which all these products are exchanged, and by which 
 all these wages are measured and have been exchanged 
 and measured since 1879, and under which all this 
 prosperity, or practically all of it, has grown up. 
 
 It seems to me that, in the discussion of this ques- 
 tion, it is our duty, first, to ascertain exactly what is 
 our condition as respects coinage and what we should 
 propose to meet it. 
 
 We have had since 1792 in the United States laws 
 respecting the coinage of money and the regulation of 
 its value, and also regulating the values of foreign 
 coins. It is due to the men who framed those laws 
 that we should say that when they framed them they 
 undertook believing as we believe, that it is better to 
 rest the measure of value upon both metals than upon 
 one they undertook with the utmost care to ascertain 
 what ? To ascertain the relative value of the two 
 metals, if they were to use them both in measuring the 
 values, and the products and the labor of our country* 
 This could be done by one of two methods, either to 
 fix a ratio between them, with free mintage at the com- 
 mercial ratio, or make one of them the standard of 
 value and coin the other in limited quantity for domes* 
 tic circulation only. They chose the first as the only 
 
SEKATOR WILLIAM B. ALLISON. 243 
 
 true method. So careful, history tells us, were they in 
 that measurement to ascertain the true ratio, that Alex- 
 ander Hamilton, the then Secretary of the Treasury, 
 took 1,000 minted Spanish-milled dollars and weighed 
 them in the scale to determine the amount of the abra- 
 sion which they had undergone by means of circulation, 
 so as to ascertain the average value of these abraded 
 dollars in our own circulation, because it is notorious 
 that our circulation at that time was principally silver, 
 and the silver was chiefly what were known as the 
 Spanish-milled dollars, those coined in Spain and those 
 coined in the Spanish possessions on our own continent. 
 After weighing these dollars the average was found to 
 be 371 grains of fine silver. 
 
 In order to determine the exact ratio between silver 
 and gold because it was intended to use gold as well 
 as silver a further examination was had to ascertain 
 what other nations had taken as the relative ratio be- 
 tween the' two metals, silver and gold, and in order to 
 make that ratio what they believed to be the exact 
 commercial ratio they added a quarter of a grain to the 
 average of the Spanish-milled dollar and fixed the sil- 
 ver dollar at 371J grains of fine silver. Upon that 
 principle, thus based, they authorized the mintage of 
 both gold and silver. 
 
 All the nations of Europe were then using either 
 gold or silver, with free mintage of the standard metal, 
 or using both metals as a standard, with free mintage. 
 They did not all have exactly the same ratio, but the 
 variations were slight, and there was then a universal 
 demand for both metals at the mints. Therefore, away 
 back in 1792, we started out upon the idea of a double 
 coinage and a double measure. Whether that was wise 
 
244 SILVER AND GOLt>. 
 
 or otherwise, I shall not now stop to discuss. That 
 double measure and standard, modified in a way I shall 
 presently speak of, continued until 1873, when by the 
 act which has been so often alluded to, we changed our 
 standard to the single standard of gold. 
 
 Because the relation in Europe, as developed a few 
 years afterwards, disclosed that we had fixed a wrong 
 ratio, overvaluing silver, our gold left the country un- 
 til, as is stated in the reports made to the house of rep- 
 resentatives and to the senate in 1834, there were 
 scarcely a half million dollars of gold in the United 
 States. 
 
 It is stated by Albert Gallatin in his testimony be- 
 fore the committee having that matter in charge in 
 1833, that our gold appreciatively departed beginning 
 in 1821. But a further examination of that subject 
 discloses that our gold commenced departing long be- 
 fore that ; and although Europe, during the period 
 from 1803 to 1815, was desolated by the allied armies 
 and by the armies of Napoleon, although we ourselves 
 had passed through a war with Great Britain, it was 
 disclosed that gold went from us so rapidly that in 1821 
 the attention of congress was called to the subject. In- 
 deed I believe the attention of congress was called to 
 it as early as 1818. 
 
 A resolution was introduced in one branch of con- 
 gress for the purpose of remedying the defect in the 
 ratio adopted in 1792, and Mr. Gallatin, in his testi- 
 mony, stated the fact that Great Britain had then es- 
 tablished the gold standard and started upon the path- 
 way of specie resumption upon the gold standard. He 
 stated that this demand went on and on long after 
 Great Britain had filled her coffers and her banks from 
 
SENATOR WILLIAM B. ALLISON. 245 
 
 the surrounding nations with all the gold that -she 
 needed, and up to the time of his statement made in 
 1833. 
 
 The discussion of the failure in 1792 to make the 
 correct ratio led to a long discussion for a change of 
 ratio. That change of ratio was discussed in these 
 Houses, and resolutions of inquiry were adopted ad- 
 dressed to the Secretaries of the Treasury. In 1829 
 Samuel D. Ingham, then Secretary of the Treasury, 
 made an able report upon the subject to the two houses 
 of congress, and, judging from that report aid from 
 his administration of the treasury, Mr. Ingham was a 
 man of competence in that high place. He made a re- 
 port in which he stated the fact that our gold coins had 
 been swept away from us, that our people desired gold, 
 and that it was important, if we were to have gold as a 
 part of our circulation, that we should change the ratio. 
 A large amount of testimony of experts, of men of the 
 highest character and learning respecting the true ratio, 
 was taken at that time and in subsequent years. It 
 was shown that from 1803 France had had the ratio of 
 15 J to 1 and that other nations had different ratios ; but 
 that the French ratio was the prevailing one because of 
 her central and pivotal position in the trade of Europe. 
 
 Whilst Albert Gallatin, who had given great -atten- 
 tion to the question, insisted that the true ratio should 
 be 15J to 1, in accord with the French ratio, I beJieve 
 that Mr. Ingham insisted the ratio should be 15.625 to 
 1 mark it, 15.625 to 1, not 16, not 15.80, but 15.G25 
 in order that there might be no mistake as to the deli- 
 cate and careful fractions which should disclose the true 
 commercial and mint ratio between the two metals. 
 
 Others insisted that 15.80 was the true ratio. Then 
 
246 SILVER AND GOLD. 
 
 it was said that, owing to the methods of communica- 
 tion between one country and another, and especially 
 because we were in one continent and Europe was in 
 another, we could afford to make a little variation from 
 the exact, truthful ratio which science had disclosed to 
 be the equilibrium between these great metallic forces 
 in the mintage of the world. 
 
 So I have no doubt the idea prevailed that we could 
 make the ratio 16 to 1, and that the shade of difference 
 between 15.625 or 15.80 would not enable other na- 
 tions to gather from us our gold or our silver, and we 
 could still hold them both at a parity in value in the 
 metallic circulation of our country. We then made 
 the ratio 16 to 1 upon the idea that, taking all things 
 into consideration, we could safely do so, and that we 
 should be certain to retain all the gold and all the 
 silver to which we were entitled in making the ex- 
 changes of the world and for our internal exchanges as 
 well. 
 
 What was the result of that slight difference between 
 15.625, and 16? It was that our silver which is the 
 money of the people went out of circulation, and we 
 were relegated to what we have been too much rele- 
 gated recently, the substitution of one-dollar bills for 
 the silver of our country. The silver oozed out in the 
 course of commerce, and people were obliged to sub- 
 stitute something in the place of the silver dollars, and 
 one-dollar bills took their place. So it is true that in 
 1853 there was practically no silver money in the 
 United States. 
 
 I pause here to say that I have heard it frequently 
 stated that, notwithstanding our mints were open from 
 1792 to 1853, or 1873, if you please, to the coinage of 
 
SENATOR WILLIAM B. ALLISON. 247 
 
 silver, during all that period we only coined 8,000,000 
 silver dollars. All our fractional coins, half-dollars, 
 quarter-dollars, and dimes, were a legal tender for any 
 sum until 1853. One could have gathered up the dimes, 
 the quarters, and the half-dollars and have made a pay- 
 ment in those from 1792 to 1853 ; and of those coins 
 there were nearly $130,000,000. 
 
 It may be truthfully said, therefore, that during all 
 this period it was the aim and purpose and effort of our 
 people to utilize both silver and gold, without discrim- 
 ination against either. But in 1853, instead of chang- 
 ing our relation to that of the commercial nations of 
 the world, as in my belief we ought to have done, and 
 yielding, as we ought to have yielded, to what was 
 known as the bimetallic relation of France and of 
 Europe generally, we undertook to bridge over the 
 situation by coining fractional dollars, "depreciated 8 
 per cent., in order that we might keep them here. That 
 was in 1853. That was the time to have established 
 silver permanently in our circulation. Surely to the 
 Republican party can not be imputed that mistake, be- 
 cause both houses of congress were wholly Demo- 
 cratic. 
 
 Our foreign coins were also a legal tender up to 1857. 
 For the encouragement of our mints they were then 
 declared to be no longer a legal tender. Eighteen hun- 
 dred and sixty came, and with it came the war, which 
 lasted four years ; and with that war came a depreciated 
 paper currency. 
 
 So, although both gold and silver were our legal 
 standards of money, as they had been since 1792, by 
 the exigencies and misfortunes of war, both those met- 
 als disappeared from our circulation, the one being held 
 
248 SILVER AND GOLD. 
 
 here to some extent, and the least valuable, for the 
 purpose of paying duties, because under our law we 
 had required the duties upon imports to be paid in 
 gold, or in coin, which was then gold. We did not use 
 the words " gold coin," but we used the word " coin." 
 
 Gold being the cheaper metal, of course remained 
 here during the period of the war to execute the func- 
 tions imposed upon it by the statute the payment of 
 duties and the counter payment by the government of 
 interest upon the public debt. 
 
 Now, I have gone over this history to show that the 
 people of the United States during all this period fa- 
 vored both gold and silver ; that they sought to estab- 
 lish a ratio which would retain both ; that they did this 
 with the utmost care, dealing in the minutest fractions 
 to accomplish the purpose, and which they believed to 
 be essential for its accomplishment. This brings us to 
 the year 1873, which seems to be a sort of era in this 
 great question. I agree that it is so, because, although 
 our depreciated paper was the only money in circula- 
 tion, except, as I have already stated, for the payment 
 of duties and for the payment of interest on the public 
 debt, we dealt with the coinage law, and whilst we 
 were dealing with it, contemporary almost with that 
 dealing, all Europe dealt with it as well. 
 
 To Europe this action was of the utmost present im- 
 portance. In the United States we were on a debased 
 currency, in 1873 still far removed from specie pay- 
 ments, and our people were absorbed in other questions 
 and failed to realize the ultimate effect of a change of 
 standard. But it is not believed that it was even then 
 known in Germany that her action and the action that 
 followed in the Latin Union would lead to such mo- 
 
SENATOR WILLIAM B. ALLISON. 249 
 
 mentous changes in the future. Germany had wrested 
 from France a thousand millions of dollars as a condi- 
 tion of peace. She had consolidated the German Em- 
 pire and made it one instead of many states. All of 
 these states were on the silver standard. It was 
 thought then to be a great stroke as respects German 
 unity if they could not only have a common ruler, a 
 common Reichstag, but a common currency, and that 
 they should make that currency as distinguished as pos- 
 sible from every kind of currency they had hitherto 
 held. Therefore, they started out with the mark, mak- 
 ing it the unit of value, and making gold the only 
 standard where silver had been the only standard be- 
 fore. 
 
 Germany, as we know, lies geographically in the 
 neighborhood of surrounding millions of industrious 
 and active people. Her enemy, France, lies upon one 
 side and Belgium and Italy lie in between. France, 
 Belgium, and Italy, the Latin Union states, had the 
 double standard, and they had millions upon millions 
 of silver under that double standard. Germany said, 
 " This is our time to get rid of our $500,000,000 of sil- 
 ver and allow the mints of the Latin Union states to 
 absorb it, and we will take their gold." The Latin 
 Union states, alert as they were, saw that it was no 
 part of their policy to pull the chestnuts out of the fire 
 for Germany, and therefore they immediately agreed 
 that they would coin only a limited quantity of silver 
 instead of having their mints open as they had been 
 open before ; and that limit of quantity, extending for 
 a few years, developed itself into the absolute closing 
 of the mints of Europe to the coinage of silver. So it 
 is at this day and hour, and for fifteen years there has 
 
250 SILVER AND GOLD. 
 
 not been a mint open to the coinage of full legal tender 
 silver in all the European states. 
 
 Now, I want to go into this history a little. It so 
 happened that at the same time we changed our unit 
 of value from gold and silver to gold. The year 1873 
 is a starting point, I agree, in all these debates and in 
 the question in our country. It may be that it was not 
 known in 1873 in the country generally that that 
 change was made. It is not strange that it was not 
 known, because at that time we were wholly upon a 
 paper basis ; but it is true that later on, and very soon, 
 it was thoroughly known in our country. It can not 
 be assumed that the men who studied these questions 
 and were familiar with them should have been ignorant 
 of that action in 1875. It is not true that they were 
 ignorant of it in 1876 ? In 1876, with a presidential 
 election impending and with a full knowledge by the 
 people of the United States that this great wrong had 
 been committed, if it was a wrong, the members of the 
 two houses of congress then in session (and it was my 
 fortune then to be a member of the senate) discussed 
 these questions over and over again, and many bills 
 were introduced and many amendments were proposed 
 on the subject. 
 
 Now, then, 1876 came, and with it came a growing 
 disparity between the two metals. The trade dollar* 
 became somewhat plentiful on the Pacific coast, and at 
 the instance of the Pacific coast and its representatives 
 then in congress, the power or quality of carrying sil- 
 ver to the mint was taken away by our statutes, and 
 the question of the quantity of dollars to be coined wa 
 remitted to the Secretary of the Treasury, and thep 
 they could only be coined for export. 
 
SENATOR WILLIAM B. ALLISON. 251 
 
 So one essential quality of free mintage was taken 
 away in 1876 and not in 1873, and at that time fortu- 
 nately, or unfortunately, as the case may be, one branch 
 of congress was Democratic and the other branch, the 
 senate, Republican. 
 
 I do not believe in the policy of piling up bullion in 
 the treasury of the United States ar,d holding it there 
 uncoined. I believe that that is a most dangerous pol- 
 icy to silver itself. It is a menace to the price of sil- 
 ver, and it has something to do> in my judgment, with 
 the depreciation of that metal. 
 
 When a bill for the free coinage of silver was intro- 
 duced, Wall street was frightened and stocks went down 
 a point or two. In Europe, when it is suggested that 
 we are going to sell the silver in the treasury, what is 
 the effect on the price of silver ? What is the effect of 
 a mere suggestion by a prominent man in this country, 
 whether he be in congress or not, that the silver bullion 
 held in the treasury of the United States should be sold 
 for gold? We have there now 122,000,000 ounces of 
 it. That would carry down silver as rapidly as it could 
 b carried taking into account the cost of its produc- 
 tion, as rapidly as did the action of India. The more 
 we put there the more dangerous it is to silver, unless 
 we follow it up by coining that silver and strengthen- 
 ing our gold reserve. 
 
 For myself I am in favor of coining every dollar of 
 the silver that is . in the treasury. It ought to be 
 coined. When I say that I do not mean now, pres- 
 ently, but it should be understood as the policy of the 
 government that we will not have in the treasury stored 
 away there silver bullion for sale. 
 
 I should be in favor of coining it as soon as practica- 
 
252 SILVEB AND GOLD. 
 
 ble. It might be wise to leave it for a short time for 
 other reasons pending action in concurrence with other 
 countries. But I am for coining it and going on with 
 its coinage. That must be done. Not one dollar of 
 that silver can ever be sold without the sanction of 
 congress, and that sanction I am sure will never be 
 given. Therefore as we pile the silver up in the form 
 of bullion we put in menace the price of silver every- 
 where, and it should be coined. 
 
 There is another thing to be noticed. By the policy 
 of 1878, which has not yet been changed, we practically 
 agreed to maintain silver at par with gold coin. That 
 was a good pledge to put into it, but it was a pledge 
 already involved in the policy and in the law itself. 
 We have put into the treasury under the coinage act 
 of 1878 $70,000,000 in round numbers, not raised by 
 taxation, but in the form of seigniorage or profit, and 
 with that money we have purchased 4 or 4J per cent, 
 bonds for every dollar of it, and thereby released to 
 that extent so much of the interest-paying debt. 
 
 Are we to take that great surplus fund called seign- 
 iorage from the men who have our silver certificates 
 and our silver dollars and not use it to maintain its 
 parity with gold ? It is said that there is in the treas- 
 ury a seigniorage of 860,000,000 over and above the 
 coinage that is necessary to redeem the treasury notes 
 outstanding. If there is, does not the same equity re- 
 quire that that seigniorage shall be utilized and used 
 to maintain the parity in value between the two metals 
 which we declared positively in 1892 we would main- 
 tain? 
 
 What I have said, I think, tends to show first, that 
 all history discloses when a small divergence is made 
 
J. STERLING MORTON, 
 
SENATOR WILLIAM B. A 1.7 T SW. 255 
 
 from the true commercial ratio, the result is, whatever 
 your established ratio by statute, you are upon the 
 ratio which represents the overvalued money. We 
 must not forget that the commercial ratio is fixed by 
 the demand for silver as money, that demand having 
 been greatly diminished by legislation in Europe. It 
 must be restored by the same method and through the 
 same processes, 
 
 I undertake to say that it is absolutely impossible 
 for us to deal with the question of ratio at this time 
 on any bill. A ratio of 27 to 1 or 28 to 1 would be mi 
 unwise ratio ; for, with silver fluctuating 20 cents in ,-r 
 single day, how can you make a ratio that will be a 
 just ratio ? 
 
 The moment the resolution of the Indian council 
 stopping the free coinage of silver was adopted away 
 up on the mountain slope of the Himalayas, and was 
 telegraphed to London and to New York, silver bullion 
 went down 25 per cent. Then it went up 15 per cent, 
 in the next week. Can we make a ratio which will 
 measure all values and all debts and all credits on the 
 basis of a fluctuating value like that? To merely 
 state the proposition is to show its impossibility. 
 
 In 1876, when the price of silver bullion went down, 
 it was noted as one of the reasons why it went down 
 that England was selling council bills at the rate 
 of $75,000,000 per annum upon India, payable in 
 rupees. 
 
 Here is India, which is the entrepot to the Orient, so 
 far as its trade is concerned. Here is the trade be- 
 tween India and China and the strait Settlements, and 
 the region round about without going over them all 
 which amounts to #, 000,000,000 per annum. I do 
 16 
 
SILVEB AND GOLI>. 
 
 not mean their internal trade, but I mean foreign trade, 
 of purchase and sale between countries who trade with 
 each other to the extent of $1,000,000,000^ computed 
 in gold at the present price of silver. 
 
 Here is this $1,000,000,000 of external trade com- 
 puted at the present depreciated prices, all of it sold in 
 countries on a silver basis, and all of it sold since 2877 
 upon a fluctuating exchange bearing upon the price of 
 silver. 
 
 England, in addition to that, demanded from India 
 15,<000,000 in exchange in the form of council bills, 
 and by that means she prevented India from absorbing 
 the silver v/hich she would naturally absorb, and which 
 she did absorb prior to 1873 when the par was dislo- 
 cated. So these council bills came in, and while we 
 bought 4,500,000 ounces of silver a month England 
 practically sold 9,000,000 ounces per month. During 
 all these years while we bought silver she sold silver, 
 or its equivalent, in the form of council bills, and al^ 
 goes into the markets of London with these council 
 bills in competition with silver bullion, and thereby 
 bears it clown if she chooses, and reduces the exchange 
 by selling the council bills at a lower rate than the 
 bullion price of silver. She can do that. ^Then the 
 bullion price ; goes down, because the silver bullion 
 gathered at London is the silver bullion that goes 
 chiefly to China and to India. 
 
 The stocks of gold in the banks of Europe and in 
 the United States aggregate 309,000,000, or f 1,500,- 
 000,000. 
 
 I do not know how much of that is held for war re- 
 serve, bat it is well known that France, Germany, and 
 Russia have -large reserves of gold, the two former an 
 
SENATOR WILLIAM B. ALLISON. 25T 
 
 ia& beyond any necessity of maintaining at par 
 their paper money. It is well understood that they 
 have strengthened these reserves preparatory to the 
 contingency of war, and that Russia, although wholly 
 on a paper basis, has lately added very largely to her 
 holdings of gold, and I have no doubt a large sum is 
 held in the countries I have named, not to maintain the 
 par of paper money, but for war purposes. 
 
 That all the great interests of this world can be 
 carried on by the use of gold alone as standard money 
 is, to my mind, impossible. I believe that the $3,500,- 
 000,000 of full legal tender silver money in the world 
 will continue to be legal tender money, and I believe 
 that the 1165,000,000, or whatever may be the amount 
 which we have now in the United States of full legal 
 tender silver money, will so continue. We have in the 
 United States to-day one-sixth of the coin legal tender 
 silver money of the world, and yet it is said that we 
 are in favor of the single standard of gold. The single 
 standard of gold is impossible, whether we favor it or 
 object to it. This $3,500,000,000 of full legal tender 
 silver money will, in my belief, remain as legal tender 
 money. 
 
 It may be true that the business of the world can be 
 carried on with units, whether silver, gold, paper. But 
 I am speaking now of the general situation as it is now, 
 with debts as they are, obligations as they are, property 
 as it is, currency as it is, and all the relations of civil- 
 ized countries as they are. With these conditions re- 
 maining, both gold and silver must be used. 
 
 I wish to say a few words regarding my belief as to 
 the best way of dealing with the present situation. I 
 believe the way to deal with it is to deal with it as wa 
 
258 SILVER AND GOLD. 
 
 deal with other things; that is, to deal with the peoples 
 who, like ourselves, are interested in the subject. Here 
 are $3,500,000,000 of full legal tender silver money in 
 the world. I will not say every dollar of it is full 
 legal tender, but most of it is full legal tender money 
 with less bullion in it than the bullion in the coins of 
 the United States. This money is scattered through- 
 out the whole of Europe. It permeates every bank 
 and every business relation of Europe; it leads into all 
 their debts, into all their credits, into all their transac- 
 tions. Are not these people interested with us in the 
 rehabilitation of silver? 
 
 We have heard it said that this country of ours is big 
 enough and strong enough to deal with all these ques- 
 tions independently and without the concurrence of 
 other nations. 
 
 It is said we should not engage in agreements respect- 
 ing this subject. Why not? There is not to-day a 
 civilized nation on the face of the globe with which we 
 have not agreements about every conceivable thing re- 
 lating to commerce. We have made treaties over and 
 over again about matters related to our commerce and 
 our trade. 
 
 We were persuaded to engage in a convention with 
 European powers respecting the situation of Congo in 
 Central Africa, and we followed to the early recogni- 
 tion of the flag of a private association, which associa- 
 tion was afterwards turned into the State of Congo and 
 following this we have made most valuable treaties with 
 all the European nations with respect to the trade of 
 Central Africa. We have made over and over again 
 treaties whereby we agree that certain articles should 
 come into the United States at certain rates of duty 
 
WILLIAM B. 
 
 ttpon the condition that certain other articles 
 country should go into those countries at certain other 
 rates of duty, and yet there is in the congress of the 
 Unite'd States, under the Constitution, power only to 
 levy and collect taxes and imports. That was done 
 long before any provision concerning reciprocity was 
 inserted in what is known as the McKinley tariff 
 act. 
 
 We made a few years ago a most important treaty 
 with Groat Britain, submitting to arbitration a single 
 question relating to the seal fisheries in Bering Sea, and 
 selected two of the most eminent men of our country, 
 Senator Morgan, of Alabama and Associate Justice 
 Harlan, of the Supreme Court, as arbitrators on the 
 part of the United States. 
 
 This great tribunal reached a wise solution of this 
 difficult question. But this solution involved not only 
 arrangements between the two countries but with other 
 commercial countries. 
 
 Our statutes and our treaties are full of illustrations, 
 and yet it is said the dignity of this country is im- 
 perilled if we treat with other nations as respects the 
 common measure of value which shall make all inter- 
 national exchanges of products and fix a ratio between 
 the precious metals which shall utilize both metals in 
 making these exchanges. We have seen the fluctua- 
 tions which have made unstable all exchanges with 
 silver-using countries, and have only lately seen that 
 by the action of India, a foreign country, our silver 
 producers have had their product fall in a single day 
 20 cents per ounce, to recover again 12 cents per ounce 
 in a few days, when that would have been impossible if 
 we had had i iternatioual action on the subject 
 
50 SILVER AND GOLD. 
 
 No more important commercial arrangement can be 
 made than that which will secure the common use by 
 commercial nations of both gold and silver as interna- 
 tional money. 
 
 Is it of no importance to the State of Colorado and 
 the surrounding mineral States to say that the Indian 
 council on the Himalayan Mountains can affect the value 
 of their property to the extent of 20 cents upon each 
 dollar of production ? Is not that worth dealing with 
 foreign nations about, if thereby these great changes 
 can be avoided ? 
 
 But it is now stated that because we propose to deal 
 with this question internationally, we are belittling the 
 American Republic. There is no greater question for" 
 the people of this world than the question of money ; 
 there is no question which affects more deeply all the 
 trade of all the nations than the question of money 
 Therefore there is nothing that should so engage thr 
 attention of commercial and civilized nations as that 
 question. 
 
 A statement made by the Secretary of the Treasury 
 in 1830, 1 think clearly presents the importance of this 
 question, showing that this is not a new suggestion. 
 
 It is House of Representatives Executive Document 
 No. 117, Twenty-first Congress, first session, dated 
 May 4, 1830. The then Secretary of the Treasury 
 said: 
 
 "A conventional agreement among the principal 
 commercial nations of the world which desire to use 
 both gold and silver as standards of value, fixing the 
 lame relative values, might avert such consequences." 
 
 That is the consequence of one or the other metal 
 
K WILLIAM B. ALLISON 
 
 goiug out. The Secretary was showing that gold was 
 going out. 
 
 " But the regulation of the coins of a country is 
 regarded as a high attribute of sovereignty ; and nntil 
 higher objects of ambition shall overcome the folly of 
 maintaining mere dignity at the expense of public good 
 it is not to be hoped that such a measure would be 
 favorably considered." 
 
 What he stated as wise for the nations had been prac- 
 tically adopted by the European states centuries be- 
 fore ; namely, to adjust the ratio between the two 
 metals in each state, so as to conform as nearly as pos- 
 sible to the commercial ratio prevailing in the sur- 
 rounding states. This was done by Locke m 1666, and 
 fifty years later by Sir Isaac Newton, although both 
 these great men believed that the unit of value should 
 be based on silver, that metal being least liable to fluc- 
 tuation as compared with gold. 
 
 Now, in this year, with these perturbations in the 
 price of silver, with one set of nations in the Orient 
 with their thousand millions of commerce witli each 
 other and with the nations of Europe and the United 
 States, and with their exchanges now at a discount of 
 from 40 to 50 per cent measured in gold and fluctuating 
 every day in the markets and exchanges of the world, 
 dealing in products which we are bound to use, arid 
 which we see upon our tables every day, with no house 
 so humble that it does not have daily upon its table 
 some of their productions dealing with those people, 
 as we are, upon these great commercial questions, why 
 is it that there should not be between us and them a 
 common measure of value? Yet that proposition is 
 whistled down the wind by statesmen in congress. 
 
262 SILVER AND GOLD. 
 
 A suggestion has been made respecting the confer- 
 ence at Brussels. I wish to say that in 1878 we put 
 into a statute a provision that there should be a con- 
 ference of nations with a view to a common ratio with 
 free mintage at such rates. The conference failed, al- 
 though the principle was agreed to. An examination 
 of the text of the resolutions adopted by the confer- 
 ence of 1878 will show that they declared it was a de 
 sirable tiling for the nations of the world to use both 
 gold and silver as money measures of value. 
 
 It is my belief that if this government will under- 
 take the policy of international arrangement regarding 
 silver and gold, that policy will be accomplished, and 
 within a reasonable period we will be able to restore 
 the parity between the two metals, and practically re- 
 habilitate silver. This is my belief, and that is the 
 permanent and wise solution of this question. In the 
 meantime, it seems to me, we shall have to drift along 
 as best we may, purchasing from time to time and coin- 
 ing all the silver that we can use in our domestic cir- 
 culation maintaining the parity, and I have no doubt 
 we can absorb a considerable amount beyond that 
 which we now have. My belief is that if we are to 
 have an international agreement, we must make it ap- 
 pear to the nations of the world that we alone do not 
 mean to take care of silver. That is the salient point. 
 There are men in Europe of the highest character who 
 read every speech which is made in congress, and who 
 gather their opinions from our public documents, who 
 believe that sooner or later the government of the 
 United States will go to free coinage and thus relieve 
 them from their situation, and relieve us of our gold 
 as well, and this is a constant, hindrance to an agree- 
 
SENATOR WILLIAM B. ALLISON. 263 
 
 ment. The recent action of India will only hasten th 
 consideration of the subject by all the nations, whethc : 
 they use gold alone, or both gold and silver. 
 
 I am not thoroughly familiar with public opinion in 
 Europe upon this question ; but I have no doubt that 
 the public opinion of Europe is that a conference of 
 nations should assemble and deal with this question. 
 and when I say that I do not exclude Great Britain 
 All these nations are deeply interested in the subject. 
 They can not afford any more than can we to have 
 silver obliterated. There are more than $1,200,000,000 
 of full legal tender silver in circulation in Europe, and 
 they are interested, as we are, in placing this silver on 
 a par with gold in international exchanges. 
 
 It has been said that England is against us because 
 she is a creditor nation. Those who have studied the 
 tendency of public opinion know that many of the 
 most influential Englishmen in public life and in the 
 universities believe in what we call bimetallism ; that 
 is, the fixing of a ratio between the two metals whereby 
 there shall be free mintage in concurrence by the 
 commercial nations. There is a silver party in En- 
 gland, and it is a strong party and a growing party, 
 and in my belief, when opportunity is given, will b 
 a triumphant party, favoring the utilization of silver 
 as well as gold, 
 
 It may be that those enjoying annuities, those hay- 
 ing long investments, will cling to the opinions and 
 views as expressed by Mr. Gladstone, but it is cer- 
 tain that nearly all the men engaged in commerce 
 and in the manufacturing industries of Great Britain, 
 and all the great agricultural interests of Great 
 Britain these three great productive classes of Great 
 
864 SILVER AND GOLD. 
 
 Britain are to-day in favor of utilizing silver and 
 gold. 
 
 It has been demonstrated over and over again by 
 Mr. Balfour, by Prof. Foxhall, by Mr. Grenfell, and by 
 other writers, many in number, that the creditor in- 
 terests of England are not to be damaged by the union 
 of the two metals, that it will so revive the trade of 
 the world and the business of the world as to overcome 
 and overbalance all that may come to a few annuitants 
 or interest-receiving people as respects the great credits 
 of England, and in addition their investments will be 
 made more secure. 
 
 So I state here as my belief that if we will have 
 patience upon this question and deal with it in a states- 
 manlike way, as was proclaimed by Mr. Ingham more 
 than fifty years ago ; if we will dismiss from our minds 
 our prejudices and our party leanings and deal with it 
 as a great question involving our country in its in- 
 tegrity and in its interests, we shall soon see the time 
 when silver and gold will travel side by side. I have 
 no idea that the accidental production of $100,000,000 
 of silver now as against $50,000,000 of gold, or $100,- 
 000,000 of gold hereafter against $50,000,000 of silver 
 weighs as a thread in the balance. It is not the over- 
 production or underproduction of these metals that af- 
 fects them. There is lying behind the silver in its path- 
 way now nearly $4,000,000,000, of silver that is only a 
 local currency, and that in a sense drags down the 
 annual production of our mines. 
 
 Thus believing, I know of no interest in the United 
 States that can possibly favor the suggestions which 
 have been made which lead to a silver standard and 
 which will bring a silver standard. Surely, it is not 
 
SENATOR WILLIAM B. ALLISON. 265 
 
 the purpose of those who want a silver standard, or 
 nrfco want to rehabilitate silver, to change the measure of 
 Value of all the things we consume, of all the wages of 
 labor, of all production, of the relations of debtor and 
 creditor, whatever they may be, since 1880, if you 
 please, when the large debts were incurred. Shall it 
 be said that we favor the scaling down of debts? 
 Shall it be said that the $6,500,000,000 of railroad 
 bonds shall be scaled down? 
 
 When you come to the question of debts of twenty 
 3'ears ago they are very few indeed. It is stated by 
 those who have examined the subject that debts on 
 the average are only nine months old. I appeal to the 
 experience of any business man. How does he manage 
 to continue to have the same creditor for a period of 
 twenty years? These changes come and go as the tides 
 come and go. The railroads that have borrowed $6,- 
 500,000,000, it is said, and mortgaged their railways, 
 never expect to pay a dollar of it, except in the form 
 of a renewal of those mortgages. 
 
 Those mortgages are as much a part of the system 
 of railways in every country on the face of the globe aa 
 are the cars or the engines. As their 6 per cent, invest- 
 ments mature, if the rate of interest is lower they re- 
 fund the loans ; and so it goes on and on forever, with 
 increasing celerity and activity as respects railroads. 
 So with the business men of our country, our savings 
 banks, our manufacturers, our farmers, our producers. 
 Debts created this year or five years ago are paid to- 
 day. They are paid by a new loan at a reduced rate of 
 interest or in some other form by accumulation of earn- 
 ings. If you go back thousands of years it is found 
 that the reason originally or one of the great reasons, 
 
266 SILVKR AND GOLD. 
 
 why silver and gold are stable relatively as respects the 
 quantity, that whatever fluctuations or changes there 
 might be, or depreciation or appreciation in value of 
 the metals, would be such an appreciation or deprecia- 
 tion as would spread itself over a series of years and 
 thus do no harm to anybody. 
 
 You may take silver and gold outside of their use as 
 money and they are worth very little in comparison, al- 
 though it is said now that one-half of the current pro- 
 duction of gold is used in the arts; but for this pur- 
 pose alone there is an accumulated supply which would 
 last for fifty years. I have no doubt that more than 
 that is so used, and it is for that reason, among others, 
 that I believe it will be only a short period before there 
 will be a full rehabilitation of both metals. 
 
 So believing, and believing that the industrial inter, 
 ests of this country, its wage -earners, its farmers, its 
 producers in every section and every State of the Union 
 will be injured by transferring ourselves suddenly from 
 the standard of money upon which all our obligations 
 have been made and all their arrangements are being 
 perfected is a mistake, and a mistake greatly to their 
 injury. 
 
HON. J. STEELING MORTON. 267 
 
 CHAPTER VIII. 
 
 BY HON. J. STERLING MORTON, SECRETARY OP AGRI- 
 CULTURE. 
 
 WHEN one declares : " I am in favor of the free coin- 
 age of silver at the ratio of sixteen to one," does he 
 not admit that he is a gold monometallist ? Is not the 
 "one " spoken of in his declaration a gold unit? 
 
 The farmers of the United States evolve from the 
 earth by hard labor all cereals, fruits and other food. 
 The prices of these products are determined by the re- 
 lation of the supply to the demand for them. Fanners 
 have never called upon the legislative power of the 
 government to establish remunerative prices for the re- 
 sults of their labor. The miner and smelter, by the 
 same sort of exertion, evolves from the earth silver bul- 
 lion ; and why should the people evoke for him the au- 
 thority of law to establish for his product an artificial 
 price ? Conscientiously a:,d consistently, for many 
 years, many citizens have antagonized a protective 
 tariff, because /t, by law, puts an artificial price on the 
 things they have to buy ; and it seems now as though 
 tlie same citizens ought to oppose the free coinage of 
 silver at the ratio of 16 to 1, because, by law, it puts an 
 artificial price on silver. When silver bullion is selling 
 at less than 70 cents per ounce on the market, its free 
 coinage info 41 2 J grain dollars, which are made a legal 
 tender for all debts public and private, forces it upon 
 the people at the rate of $ 1.29 per ounce. Therefore, 
 
268 SILVER AND GOLD. 
 
 is not the free coinage of silver at the ratio of Itf to 1 
 the application of the protective tariff principle to do- 
 mestic affairs? Ought not all those who heretofore an- 
 tagonized the protective system also, by the same rea- 
 soning, to antagonize the free coinage of silver ? 
 
 Why should any good citizen advocate a monetary 
 system which will compel the gold miner to dig until 
 he has secured 100 cents' worth o that metal, at its 
 bullion value, before he can demand a dollar for the 
 same ; and will at the same time allow the silver miner 
 a dollar for every 50 cents' worth of silver bullion that 
 he gets out ? The farmer never gets a dollar for 50 
 cents' worth of wheat. Why then should he advocate 
 the free coinage theories by which the miner or owner 
 of silver bullion is to receive more than a dollar for 
 every 50 cents' worth of that metal ? Is not the free 
 coinage of silver, as proposed to-day, a scheme for plac- 
 ing a premium upon mine labor and mine products, 
 whkh farm labor and farm products must pay? 
 
 ^Vrcrv'W 
 
BON. JOHN DALZELL. 209 
 
 CHAPTER IX. 
 
 BY AON. JOrfN DALZELL OF PENNSYLVANIA. 
 
 I ASSUME in the first place that almost every one, ex- 
 cept the free silver men, who are really monometallists, 
 is desirous of seeing both gold and silver the standard 
 money of the commercial nations of the world; that 
 almost all are in favor, in other words, of international 
 bimetallism. But as we can not now ai this time have 
 that, it is material to be borne in mind that the Ameri- 
 can congress may not legislate internationally ; but may 
 legislate simply for the United States of America. And 
 it is material to be borne in mind also that our existing 
 monetary system does not conform to the monetary 
 system of any other commercial nation at the present 
 time. 
 
 The year 1873, when silver was demonetized, marked 
 a revolution in monetary history. In the results of 
 that revolution all the commercial nations of Europe 
 acquiesce. We alone dissent. Except in silver stand- 
 ard countries, ours are the only mints that are open to 
 the coinage of silver. 
 
 Now, whether it was wise to demonetize silver, how 
 silver was - demonetized, whether surreptitiously or 
 openly, are questions which have no pertinence in this 
 discussion except for the purposes of declamation. " It 
 is a condition, and not a theory, that confronts us." 
 The question is, can the United States, single-handed 
 and alone, remonetize silver under existing conditions? 
 
270 SILVER AND GOLD 
 
 I shall not stop to discuss ratios for this reason t If 
 you can fix the commercial ratio of that which is a 
 commodity in the world in relation to gold by law you 
 can fix it at anything you please. If you can not by 
 law fix its real relation because it is a commodity, then 
 it does not make any difference what ratio yoa put in 
 your law. Now, what is this proposition for free and 
 unlimited coinage of silver? Reduced to terms of plain 
 English it is this: That every man who has 56 cents' 
 worth of standard silver may go to the United States 
 mint and have it marked a dollar. " Resolved," it is 
 proposed we shall say, " that 56 is equal to 100 ; that 
 1 is equal to 28.52." 
 
 It is declared that the gold dollar is a " dishonest 
 dollar;" and not an absolute measure of value. No- 
 body claims that gold is an absolute stable measure of 
 value. What we do claim and what is true is that it is 
 the most stable measure of value. It is the measure of 
 value all over the world. It fixes the value even ii 
 silver-standard countries. Now, on what basis is it as- 
 sumed that gold hp,s gone up and that silver remains 
 stationary? Because there are so many commodities 
 that have fallen in price and silver has fallen in price 
 with them, an.d, therefore, gold has gone up and silver 
 has not moved. Was there ever a more patent nan 
 sequitur f 
 
 We do not need to imagine a scarcity of gold to ac- 
 count for falling prices. New processes, improved ma- 
 chinery, inventive genius, new facilities for intercom- 
 munication these, and not the scarcity of gold, are the 
 causes of falling prices. The records of the Patent 
 Office, the roll of the great captains of industry \i hose 
 genius has weaded usefulness and beauty and che<,p- 
 
GROVER CLEVELAND 
 
HON. JOHN DALZELL. 273 
 
 ness, and made the luxury of the past the convenience 
 of the present, refute your silly claim that gold is the 
 only factor in fixirg price. 
 
 Raw materials, food products, have fallen in price 
 upon the same principle. New fields have been 
 opened, their soil put under the plow. Civilization has 
 pushed its resistless march into new territory, discov- 
 ered new secrets of nature, opened new mines to the 
 sunlight, bridged new streams, built highways to the 
 hitherto inaccessible ; introduced electricity and steam ; 
 annihilated time and space. 
 
 The history of our trunk-line railroads furnishes the 
 key to falling prices. In 1865 the Pennsylvania Rail- 
 road Company and its lines wesc of Pittsburg, the New 
 York Central and Hudson Rn r er Railroad, the Lake 
 Shore and Michigan Southern^ the Michigan Central, 
 Boston and Albany, the New York, Lake Erie and 
 Western, carried 11,151,701 tons of freight, or to ex- 
 press it in another way, moved of tons 1 mile 1,654,- 
 324,000. And how much did each ton cost for car- 
 riage ? It cost 2.9 cents per mile. In 1885, twenty 
 years afterwards, this same system of railroads moved 
 of tons at the rate of 1 mile 11,331,306,000, at a cost of 
 six- tenths of a cent a mile. 
 
 Now, these railway lines carried somewhat less than 
 one-fourth of the tons moved 1 mile in 1885 ; yet they 
 saved on the difference between cost of carriage in 1885 
 and the cost of carriage in 1865,1256,500,000. I might 
 pursue this line of argument, to show the same results, 
 with other roads, but it is not necessary. And yet, in 
 the face of incontrovertible facts like these, people get 
 up ingenious schedules to prove that silver has re- 
 mained stationarv and that gold has gone up, 
 16 
 
274 SILVER AND GOLD. 
 
 Why, the characteristic feature of this day is low 
 price of necessaries and high wages. If the low pr ?e 
 of necessaries is due to the scarcity of gold, why hf ve 
 not wages gone down also ? 
 
 The fall in the price of silver is easily accounted for 
 on the very simplest of economic principles. Increase 
 the supply of any commodity, decrease the denial, d, 
 and prices go down. Now, since 1873, when silver was 
 demonetized, the production of silver 'has increased 150 
 per cent., and the demand has decreased by the amount 
 theretofore called for by the mints of Europe, since 
 that time closed against it like our own, except since 
 1878. Since 1873, when silver was demonetized, gold 
 production has constantly increased, and is increasing 
 to-day. The probabilities are that it will continue to 
 increase to a much greater extent in the future. 
 
 In 1887 the Queen of England appointed a royal 
 commission to inquire into the recent changes in the 
 relation of the precious metals to each other. In the 
 same year President Cleveland appointed Edward At- 
 kinson, a distinguished statistician, to inquire as to the 
 feasibility of bimetallism by international agreement. 
 Mr. Atkinson states the results of the investigation of 
 that royal commission as follows. He says ? 
 
 ** I find in it abundant evidence sustaining the posi- 
 tions which I have taken to wit : 
 
 1. The mass of gold in existence has been sufficient 
 to enable Germany to adopt the gold standard of legal 
 tender, the United States and Italy to resume specie 
 payment substantially on a gold standard, the Latin 
 Union to cease silver coinage and to maintain their ex- 
 isting stock of legal tender silver at par in gold, with- 
 out creating any apparent scarcity of gold and without 
 
HON. JOHN DALZELL. 275 
 
 any special influence in depressing the prices of com- 
 modities or services. 
 
 " 2. The reduction in the price of commodities has 
 been no greater than would be warranted by and might 
 have been expected from the improvements in the 
 processes of production and distribution. This reduc- 
 tion, having been accompanied by a general mainte- 
 nance or rise in the price or rate of wages, has been al- 
 most wholly beneficial, temporary hardship to special 
 classes being admitted." 
 
 Our friends on the other side say, "discontinue the 
 use of silver ; take it out of the world's money, and 
 you necessarily appreciate gold to that extent." 
 
 What 1 have already said refutes the assertion. We 
 have seen that the gold supply has kept pace with the 
 gold demand, and promises to continue to do so in the 
 future. This has been proven by the statistics of gold 
 production,and by the evidence taken before the Royal 
 Commission. 
 
 But in addition to this the free coinage argument 
 wholly ignores the function of credit in our modern 
 business life. The volume of money consists not 
 simply of gold and silver and authorized issues of notes, 
 but of credit also. This is an expanding and contract- 
 ing instrument as the necessities of trade and commerce 
 demand. It serves to conduct from 90 to 95 per cent. 
 of the world's business. It has been well said, the 
 progress of civilization is toward diminishing instead of 
 increasing the requirement of large amounts of bullion. 
 
 Much stress has been laid by our friends on the other 
 side on the injustice of making the debtor pa} 7 in clearer 
 money than that which he borrowed. If I have proven 
 anything so far I have demonstrated that the only 
 method to prevent such injustice, so far as it can be 
 
276 SILVER AND GOLD. 
 
 prevented, is to abide by the most stable of all meas- 
 ures of value, gold. And mark you the injustice to the 
 debtor of paying his debt in dearer money than he bor- 
 rowed is no greater than the injustice of making the 
 lender take his loan in money which is less valuable 
 than that which he loaned. 
 
 That aspect of the question seems not to have pre* 
 sented itself to our friends on the other side at all. 
 They assume that all lenders are rich, millionaires, 
 goldbugs, corporations, and that all the borrowers are 
 poor farmers, and that such being the case it is no harm 
 for the latter to cheat the former. Is there one rule of 
 honesty for the rich man and another rule of honesty 
 for the poor man ? 
 
 I have been amused in listening to the self-styled 
 champions of the poor man, advocates of the million- 
 aire mine owners of the west, denouncing millionaires; 
 in one breath denouncing all moneyed institutions, ag 
 gregations of wealth, and corporations the indices of 
 national prosperity and in the next demanding a mar- 
 ket for the product of the western mines and for the 
 surplus silver of the world. Why not the same kind 
 of legislation for the steel billetc from the mills of 
 Pennsylvania, for the pig iron from the furnaces of 
 Tennessee, or the wheat from the fields of Dakota ? It 
 seems to me that this indiscriminate denunciation of 
 wealth, this arraying of the rich against the poor, is 
 nothing more or less than incipient anarchy. Whence 
 can it lead but to a war of classes and the eventual 
 overthrow of the State ? And is not he an incendiary, 
 against whom society has a right to protect itself, who 
 raises the banner of rule or ruin and appeals to the 
 basest passions of mankind ? 
 
HON. JOHS vJALZELL. 277 
 
 The silver men pretending to be bimetallists are 
 monometallists. What they would have is not a double, 
 but a silver instead of a gold standard. This is plainly 
 to be gathered from the address of a well-known advo- 
 cate of free coinage, whom I quote : 
 
 " If a single standard were really more desirable than 
 a double standard, we are not free to choose gold and 
 would be compelled to select silver. * * * If bimetal- 
 lism is impossible, then we must make up our minds to 
 a silver standard." 
 
 And then he paints the glories of a silver standard. 
 He says : 
 
 " A silver standard, too, would make us the trading 
 center of all the silver-using countries of the world, 
 and these countries contain far more than one-half of 
 the world's population. What an impetus would be 
 
 iven to our western and southern seaports, such as 
 an Francisco, Galveston, New Orleans, Mobile, Savan- 
 nah and Charleston." 
 
 That is to say, let us cut loose from England and 
 France and Germany from European civilization 
 and cast in our lot with India, China, the Straits, Japan, 
 Mexico, and South and Central America. 
 
 Truly a suggestion worthy the mind that conceives 
 it to be in the power of legislation to reverse the rules 
 of arithmetic. 
 
 I want to say that the moment you declare that 56 
 cents' worth of silver is equal to a gold dollar, that mo- 
 ment you open your mints to all the silver of the world. 
 You bid it welcome to come, and it will come ; and 
 when it comes gold will go, go into silver purchases, go 
 
278 SILVER AND GOLD. 
 
 into hiding, go abroad. With what result ? With the 
 result to defeat the very purpose for which free and 
 unlimited silver coinage is urged ; with the result sud- 
 denly and violently to contract instead of increase the 
 circulation. The American dollar will buy in foreign 
 exchange just as much as and no more than the bullion 
 in it is worth. The United States will be on a silver 
 basis. 
 
 Two things, I grant, the free and unlimited coinage 
 of silver will accomplish. First, debtors will be enabled 
 to scale their debts to the extent of from 40 to 50 per 
 cent, and cheat their creditors to that extent; and, 
 secondly, you will furnish a market for the silver mines 
 of the west. But these results will be accomplished at 
 the price of justice and to the eternal disgrace of the 
 American name. 
 
 I believe in bimetallism, the use of both gold and sil- 
 ver as the standard money of the world, and I expect 
 to see that system come in time. I believe that bimet- 
 allism is possible, however, only by international agree- 
 ment, and I am in favor of every honest effort to bring 
 about that agreement. The United States having been 
 on a gold basis substantially for sixty years past, debts 
 have been contracted on that basis, and prices fixed all 
 over the world on that basis. I am opposed to any 
 measure that would either suddenly or gradually put 
 us on a silver basis. I am in favor of any needed 
 measure for the expansion of the currency that will 
 put behind every dollar issued the guaranty that it 
 shall be equal in purchasing and in debt-paying power 
 to every other dollar. 
 
 I believe that this is a question which rises above the 
 plane of party politics. This question can be settled, 
 
JOHN DALZEKL. 2?9 
 
 but it must be settled by each man in the domain of 
 conscience enlightened by patriotism. The interests at 
 stake involve the financial future of this great people ; 
 they are the interests of country, and country is above 
 all. 
 
280 SILVER AND GOLD. 
 
 CHAPTER X. 
 PEESIDENT CLEVELAND'S LETTEB. 
 
 EARLI in the month of April, 1895, a committee o\ 
 Chicago gentlemen invited President Cleveland to be 
 present and take part in a meeting " in the interest of 
 sound money and wholesome financial doctrine." In 
 his letter declining the invitation, the President said : 
 
 " My attachment to this cause is so great and I know 
 so well the hospitality and kindness of the people 
 of Chicago that my personal inclination is strongly in 
 favor of accepting your flattering invitation, but my 
 judgment and my estimate of the proprieties of my 
 official place oblige me to forego the enjoyment of par- 
 ticipating in the occasion you contemplate. 
 
 (i I hope, however, the event will mark the beginning 
 of an earnest and aggressive effort to disseminate 
 among the people safe and prudent financial ideas. 
 Nothing more important can engage the attention of 
 patriotic citizens, because nothing is so vital to the wel- 
 fare of our fellow-countrymen and to the strength, 
 prosperity and honor of our nation. 
 
 u The situation we are confronting demands that 
 those who appreciate the importance of this subject and 
 those who ought to be the first to see impending dan- 
 ger should no longer remain indifferent or over-confi- 
 dent. 
 
 " If the sound-money sentiment abroad in the land is 
 to save us from mischief and disaster it must be crys- 
 
PRESIDENT CLEVELAND'S LETTER. 281 
 
 tallized And combined and made immediately active. It 
 is dangerous to overlook the fact that a vast number of 
 our people, with scant opportunity thus far to examine 
 the question in all its aspects, have nevertheless been 
 ingeniously pressed with specious suggestions which in 
 this time of misfortune and depression find willing lis- 
 teners, prepared to give credence to any scheme which 
 is plausibly presented as a remedy for their unfortunate 
 condition. 
 
 " What is now needed more than anything else, is a 
 plain and simple presentation of the argument in favor 
 of sound money. In other words it is a time for the 
 American people to reason together as members of a 
 great nation which can promise them a continuance of 
 protection and safety only so long as its solvency is un- 
 suspected, its honor unsullied and the soundness of its 
 money unquestioned. These things are ill exchanged 
 for the illusions of a debased currency and groundless 
 hope of advantages to be gained by a disregard of fi- 
 nancial credit and commercial standing among the na- 
 tions of the world. 
 
 " If our people were isolated from all others and if 
 the question of our currency could be treated without 
 regard to our relations to other countries its character 
 would be a matter of comparatively little importance. 
 If the American people were only concerned in the 
 maintenance of their life among themselves they might 
 return to the old days of barter and in this primitive 
 manner acquire from each other the materials to supply 
 the wants of their existence. But if American civili- 
 zation were satisfied with this it would abjectly fail in 
 its high and noble mission. 
 
 " In these restless days the farmer is tempted by the 
 
282 SILVER AND GOLD, 
 
 assurance that, though our currency may be debased, 
 redundant and uncertain, such a situation will improve 
 the price of his products. Let us remind him that he 
 must buy as well as sell ; that his dreams of plenty are 
 shaded by the uncertainty that if the price of the 
 things he has to sell is nominally enhanced, the cost of 
 the things he must buy will not remain stationary ; 
 that the best prices, which cheap money proclaims, are 
 unsubstantial and elusive, and that even if they were 
 real and palpable he must necessarily be left far behind 
 in the race for their enjoyment. 
 
 " It ought not to be difficult to convince the wage- 
 earner that if there were benefits arising from a degen- 
 erated currency they would reach him least of all and 
 last of all. In an unhealthy stimulation of prices an 
 increased cost of all the needs of his home must long 
 be his portion, while he is at the same time vexed with 
 vanishing visions of increased wages and an easier lot. 
 The pages of history and experience are full of this les- 
 son. 
 
 " An insidious attempt is made to create a prejudice 
 against the advocates of a safe and sound currency by 
 the insinuation, more or less directly made, that they 
 belong to financial and business classes and are there- 
 fore not only out of sympathy with the common people 
 of the land, but for selfish and wicked purposes are 
 willing to sacrifice the interests of those outside their 
 circle. 
 
 " I believe that capital and wealth, through combina- 
 tion and other means, sometimes gain an undue advan- 
 tage ; and it must be conceded that the maintenance of 
 a sound currency may, in a sense, be invested with a 
 greater or less importance to individuals according to 
 
PRESIDENT CLEVELAND Sf LETTER. 288 
 
 their condition and circumstances. It is, however, only 
 ii difference in degree, since it is utterly impossible that 
 any one in our broad land, rich or poor, whatever may 
 be his occupation, and whether dwelling in a center of 
 finance and commerce or in a remote corner of our do- 
 main, oan be really benefited by a financial scheme not 
 alike beneficial to all our people, or that any one should 
 be excluded from a common and universal interest in 
 the safe character and stable value of the currency of 
 the country. 
 
 " In our relation to this question we are all in busi- 
 ness, for we all buy and sell, so we all have to do with 
 financial operations, for we all earn money and spend 
 it. We cannot escape our interdependence. Merchants 
 and dealers are in every neighborhood, and each has its 
 shops and manufactories. Wherever the wants of man 
 exist business and finance in some degree are found, re- 
 lated in one direction to those whose wants they supply 
 and in another to the more extensive business and fi- 
 nance to which they are tributary. A fluctuation in 
 prices at the seaboard is known the same day or hour 
 in the remotest hamlet. The discredit or depreciation 
 in the financial centers of any form of money in the 
 hands of the people is a signal of immediate loss every- 
 where. 
 
 " If reckless discontent and wild experiment should 
 sweep our currency from its safe support the most de* 
 fenseless of all who suffer in that time of distress and 
 national discredit will be the poor as they reckon the 
 loss in their scanty support, and the laborer and work- 
 ingman as he sees the money he has received for his 
 toil shrink and shrivel in his hand when he tenders it 
 for the necessaries to supply his humble home.? 
 
284 SILVER AND GOLB. 
 
 "Disguise it as we may, the line of battle is drawn 
 between the forces of safe currency and those of silver 
 monometallism. I will not believe that if our people 
 are afforded an intelligent opportunity for sober second 
 thought they will sanction schemes that, however 
 cloaked, mean disaster and confusion, nor that they 
 will consent, by undermining the foundation of a safe 
 currency, to endanger the beneficent character and 
 purposes of their government. Yours very truly, 
 
 CLEVELAND.** 
 
WILLIAM j. BRYAN'S REPLY. 285 
 
 CHAPTER XL 
 WILLIAM J. BRYAN'S REPLY. 
 
 THE President's letter drew forth a storm of protests 
 from the silver men, and Hon. William J. Bryan, of 
 Nebraska, promptly addressed the following letter to 
 the President: 
 
 " The Hon. Grover Cleveland, President. DEAR SIR : 
 In your recent letter declining an invitation to attend 
 the Chicago * gathering in the interest of sound money, 1 
 you say: 'What is now needed more than anything 
 else is a plain and simple presentation of the argument 
 in favor of sound money.' 
 
 "To 'a vast number of our people ' * Coin's Finan- 
 cial School ' seems to be * a plain and simple presenta- 
 tion of the argument in favor of sound money,' but 
 some of your friends have not been pleased with the 
 argument. Since you secured the unconditional repeal 
 of the Sherman law you have very properly taken the 
 place so long held b~ the author of that law, Senator 
 Sherman, and are now the acknowledged leader of the 
 gold-standard advocates of the United States, both 
 Democratic and Republican, and to you, therefore, as 
 the leader of that element, the people naturally look 
 for 4 a plain and simple presentation of the argument in 
 favor of sound money,' according to your understand- 
 ing of sound money, or at least for an intelligent defi- 
 nition of it. 
 
 " What do you mean by the phrase 'sound money '? 
 
286 SILVER AND GOLD. 
 
 Ill your letter you make frequent use of that and kin, 
 dred phrases. In fact, in the course of your letter you 
 speak three times of 4 sound money/ twice of a 4 safe 
 currency,' once of a sound currency, 7 once of a * safe 
 and sound currency,' once of 4 safe and prudent finan- 
 cial ideas,' and once of ' wholesome financial doctrine.' 
 You also speak once of a 'debased currency,' once of a 
 'degenerated currency,' and once of 'cheap money.' In 
 one place you describe your opponents as 4 the forces 
 of silver monometallism,' but you nowhere explain 
 what you mean by 4 sound money,' or what you con- 
 sider ' cheap money.' 
 
 44 Now, everybody favors 4 sound money ' and 4 a safe 
 currency,' and a plain and simple statement of what 
 you mean by those euphonious and universally admired 
 phrases might dispel the war clouds and make a ; line 
 of battle ' unnecessary. If by 4 sound money ' you 
 mean a gold standard why did you avoid the use of the 
 word 4 gold ' in your letter ? If by a 4 safe currency ' 
 you mean bimetallism why did you avoid the use of the 
 word of 4 bimetallism ' in your letter? Your letter no- 
 where contains a direct reference either to the gold 
 standard or to bimetallism, but is quite replete with ex- 
 pressions which may mean a great deal or nothing, ac- 
 cording to the interpretation placed upon them. 
 
 44 Your opponents have always given you credit for 
 courageously defining your position on public ques- 
 tions. Will you prove their confidence well founded 
 by stating frankly what kind of a financial system we 
 shall enjoy if the sound-money sentiment abroad in the 
 land 4 succeeds in saving us from mischief and disaster.' 
 Your opponents candidly avow their purpose and clearly 
 outline the legislation which they desire. Is it not fair 
 
WILLIAM j. BRYAN'S REPLY. 287 
 
 to ask that you define your policy with as much frank- 
 ness ? 
 
 " Your opponents favor the free and unlimited coin- 
 age of gold bullion into dollars, each containing 25.8 
 grains of standard gold. Are you in favor of this? 
 Your opponents are in favor of the free and unlimited 
 coinage of silver bullion into dollars, each containing 
 412.5 grains of standard silver. Are you in favor of 
 this ? If not, are you in favor of the coinage of silver 
 bullion into dollars of any size ? If not in favor of the 
 free coinage of silver, what charge, if any, would you 
 make for coinage ? If you are not in favor of the un- 
 limited coinage of silver, what limit would you sug- 
 gest ? 
 
 " Your opponents not only believe in the restoration 
 of the free and unlimited coinage of both gold and sil- 
 ver at the present rate of sixteen to one, but they are 
 in favor of taking this action at ouce without waiting 
 for the aid or consent of any other nation on earth. 
 Do you agree with them ? If not, do you favor the 
 restoration of bimetallism by international agreement? 
 If you are in favor of an international agreement, what 
 ratio would you advise and what nations are in your 
 opinion necessary to such an agreement? If you favor 
 an international agreement, how long are you willing 
 to wait for it ? Your opponents are in favor of making 
 standard gold coin and standard silver coin equally a 
 legal tender for all debts, public and private, and are 
 opposed to making a silver dollar a promise to pay a 
 gold dollar or a gold dollar a promise to pay a silver 
 dollar ; do you agree with them ? 
 
 " Your opponents believe that the free and unlimited 
 coinage of gold and silver at the present ratio of 16 to 
 
288 SILVER AND GOLD. 
 
 1 by the United States, regardless of the action of other 
 nations, will give us sound money and a 'safe cur- 
 rency.' They not only believe this, but they support 
 their position by arguments so plausibly presented that 
 even you are frightened into the belief that 4 the sound 
 money sentiment must be crystallized and combined 
 and made immediately active ' in order to prevent 
 their success at the polls. Can you define 3^0 ar posi- 
 tion so clearly and defend it so plausibly as to scare 
 your opponents as badly as they have scared you ? Is 
 the fail ure of the gold-standard advocates to define 
 their purposes and defend their financial system due to 
 lack of knowledge of the subject or to an unwilling- 
 ness to let the people know what they intend ? If v the 
 proprieties ' of your ' official place oblige ' you 4 to 
 forego the enjoyment ' which you would derive from 
 the wilting of another letter explaining your last letter 
 and defining your position on the financial question 
 please designate some one who has authority to speak 
 for you so that the people may be ' afforded an intelli- 
 gent opportunity/ as you suggest, to study and decide 
 this now paramount public question. 
 
 " Yours very truly, 
 
WILLIAM J. BRYAN, 
 
HON. JULIUS C. BUFKOWS. 291 
 
 CHAPTER XII. 
 
 BY HON. JULIUS C. BUBROWS, OF MICHIGAH. 
 
 COIN silver dollars at the ratio of 16 to 1 or 20 to 1 
 and you have a dollar intrinsically worth less than the 
 gold dollar, and coin such a dollar as that permit the 
 owners of silver bullion to bring to the mints of the 
 United States, and have manufactured into dollars, a 
 certain number of grains, worth in bullion much less 
 than after they are coined, is a proposition to which I 
 cannot give my assent. 
 
 But it has been stated and repeatedly asserted that 
 the present silver dollar is the " dollar of the fathers." 
 That statement is not true. It is not the " dollar of 
 the fathers," and the fathers if living would repudiate 
 such an assumption as a reflection upon their integrity 
 and sagacity. The silver dollar of the fathers was in- 
 tended to be and was in fact practically equal to the 
 gold dollar in intrinsic value. 
 
 When Hamilton and the men of his time were con- 
 sidering the establishment of the United States mint, in 
 1792, the question presented was whether we should 
 coin silver or gold, or both, and having determined to 
 utilize and coin both gold and silver the only remain- 
 ing question was just how much silver should be put in. 
 the silver dollar and how much gold in the gold dollar, 
 and it was agreed on all hands there must be just such 
 an amount put into the silver dollar and the gold 
 dollar as wou^d make them exactly equal in com- 
 17 
 
292 SILVER AND GOLD. 
 
 mercial value, fur there was no man living at that time 
 outside a mad house who entertained the idea that you 
 could coin dollars of unequal intrinsic value and make 
 them circulate side by side in any monetary system. 
 For it is a law as old as monetary science and as inex- 
 crable as the moving of the spheres that if you have 
 two dollars of unequal value the cheaper will be the 
 only one that will circulate and the more valuable will 
 be driven out of circulation. 
 
 Mr. Baring said upon this subject : " A very slight 
 difference of one tenth or one quarter of 1 per cent, 
 would determine the use of one metal or the other*" 
 
 Our own history demonstrates the truth of this law. 
 Under the ratio of 15 to 1, established in 1792, the two 
 coins separated in a few years, because it was found 
 that the commercial value and the monetary value did 
 not correspond, and gold went out of circulation and 
 our coined silver was the only money remaining in cir- 
 culation. In 1834 the ratio was changed to 16 to 1, 
 but. it was soon discovered that the commercial ratio 
 did not then correspond with the monetary ratio and 
 the result was that silver was more valuable than gold, 
 and went out of circulation, while gold became our 
 only circulating metallic mone} r . When the owner of 
 371J grains of pure silver could get more for that silver 
 uncoined than he could by having it coined into a silver 
 dollar, certainly he would not take it to the mint of the 
 United States to have its value lessened by being 
 coined into money. So silver dollars went out of cir- 
 culation. 
 
 In 1861 we were flooded with a depreciated paper 
 currency less valuable than either gold or silver, and 
 the result was that it drove both gold and silver out of 
 
HON. JULIUS C. BURROWS. 293 
 
 circulation, and they remained out of circulation until 
 we resumed specie payments in 1879. 
 
 This people have not forgotten the battle for the re- 
 sumption of specie payments, and they do not care to 
 repeat that experience. It was a long journey, fraught 
 with hardship and disaster to many individuals, and 
 had to be pursued in the face not only of Democratic 
 opposition demanding the repeal of the resumption act 
 and the continued non-payment of our unredeemed 
 promises, but parties sprang up in favor of fiat money 
 and the wildest financial vagaries which, for the time 
 being, threatened the credit and financial integrity of 
 this nation. Must we fight that battle over again ? 
 
 This contest for the free coinage of silver began in 
 1874, and it has been prosecuted with unceasing vigor 
 ever since. Why ? Up to that time the silver dollar 
 was worth more, intrinsically, than the gold dollar, be' 
 ing worth in 1873 f 1.03 as compared with gold. 
 
 Up to that time the coinage of silver dollars in this 
 country had been very limited. One would think from 
 the tenor of this discussion that all at once a great out- 
 rage had been perpetrated upon silver, that it had been 
 stricken from our monetary system at a blow, by the 
 force of law, when the fact is that from 1793 to 1805, a 
 period of twelve years, we coined but 1,439,517 silver 
 dollars. From 1806 to 1836, a period of thirty years, 
 we did not coin a single silver dollar. From 1836 to 
 1873, a period of thirty-seven years, we coined only 
 6,606,321 silver dollars. In eighty years we only 
 coined a total of 8,045,838 silver dollars. So long as 
 silver remained more valuable than gold there was no 
 clamor for the free coinage of silver, but in 1878, when 
 resumption was an assured fact, and the people had de- 
 
294 SILVER AND GOLD. 
 
 creed that they would keep faith with their creditors 
 and pay their unredeemed promises, then the cham- 
 pions of cheap money turned their attention to silver, 
 finding it had declined in value from $1.03 in 1873 to 
 $0.89 in 1878. 
 
 Then the cry went up for the free and unlimited 
 coinage of silver dollars, of 371J grains, worth 89 
 cents, and we entered upon the course of coining silver 
 and continued it for twelve years, and during that 
 period coined 419,000,000 silver dollars, while in the 
 eighty years previous we had coined only 8,000,000. 
 After continuing this for twelve years the silver in the 
 silver dollar declined from 0.89 to 10.72, and we found 
 ourselves with 419,000,000 silver dollars worth, intrin- 
 sically, but 72 cents each. In 1890 when it was be- 
 lieved that our volume of silver then in circulation was 
 as great as could be maintained at a parity with gold 
 and avoid the danger of a silver basis, then the Demo- 
 cratic party again clamored for the free and unlimited 
 coinage of silver. The battle is now renewed under 
 the plea of bimetallism, and the advocates of the free 
 coinage of silver seek to delude the people by asserting 
 that they are in favor of bimetallism while its oppo- 
 nents are not. We have bimetallism to-day. 
 
 We have not only the 419,000,000 silver dollars 
 coined, the 151,000,000 treasury notes given for silver 
 bullion, but we have 5,558 tons of silver bullion un- 
 coined, and let it be remembered that the repeal of the 
 purchase clause of the Sherman act does not demone- 
 tize a single dollar of this nearly 600,000,000 of silver. 
 On the Contrary, in the interests of bimetallism we pro- 
 pose to maintain the whole volume of this silver coin 
 and paper at a parity with gold. We who favor tija 
 
HON. JULIUS C. BUKROWS. 295 
 
 repeal of the act of 1890 are the only real bimetallists, 
 and we are pursuing the only course in my judgment 
 by which bimetallism can be maintained. The free 
 'and unlimited coinage of silver at any of the ratios 
 named will destroy bimetallism and will reduce this 
 country to a single standard, that of silver, and that 
 depreciated, and I am suspicious that for this very 
 reason some gentlemen are anxious for its triumph. 
 The opening of the mints of the United States to the 
 unrestricted minting for individuals of silver into legal 
 dollars at any ratio to gold less than the commercial 
 value of both metals, under the pretense of aiding the 
 cause of bimetallism or for the purpose of establishing 
 or maintaining bimetallism in the United States, is 
 simply playing upon the sentiment and credulity of the 
 American people. 
 
 Bimetallism means the joint use of gold and silver 
 as money and the history of our country prior to 1873 
 has shown, what is admitted by all the great authori- 
 ties on bimetallism, that so long as there is a variation 
 of even one -half of one per cent, between the com-, 
 mercial value of the pure metal contained in the stand- 
 ard coins and their face value the one which has the 
 commercial value in excess of the other will not circu- 
 late side by side with that other. For this reason, 
 prior to 1834 gold coins did not circulate in this coun' 
 try, and after the change of ratio in 1834 and 1837, 
 silver did not circulate. Of course the silver dollar 
 now is practically credit money, sustained at par with 
 the more valuable dollar by government redemption in 
 gold ; but with the free and unlimited coinage this 
 would necessarily disappear. There would be no gold 
 redemption, so that free coinage of silver at this time 
 
296 ATT.VER AND GOLD. 
 
 really means the adoption of silver monometallism. 
 The real issue, then, is not between bimetallism and 
 gold monometallism, but between bimetallism and sil- 
 ver monometallism. 
 
 Let the people but once understand that all this talk 
 about bimetallism is simply a cover to hide the obnox- 
 ious fact that it is silver monometallism that is the real 
 purpose, or at least the certain result, and they will 
 have none of it. There is no considerable portion of 
 our people who would vote to place this country on a 
 silver basis. The argument between the advantages of 
 the two systems is a real, living one. Turn your eyes 
 to the countries having the silver standard alone 
 Mexico, South America, Asia and those having the 
 gold standard with a silver circulation maintained on a 
 parity with it, like England and all Europe, and there 
 is no room for argument. The latter countries are 
 prosperous, intelligent, and progressive; the former 
 embarrassed, poor, and ignorant. 
 
 As was once said by another, " I think I see clearly 
 through this day's business." It is the old fight for 
 cheap money, and the people are deluded with the idea 
 that if money is cheap they will be prosperous. A 
 farmer is in debt $200 ;' he can sell his horse for $100 
 in the money of to-day, which, applied to his indebted- 
 ness, would discharge one-half of it. Now, if by some 
 process he can cheapen these dollars until they are 
 worth but 50 cents, he can then sell his horse for 200 
 of these 50-cent dollars and then discharge his indebt- 
 edness of |200. This is the milk in the cocoanut of 
 this whole business. 
 
 But let me say that elveap money is a delusion, and 
 ft depreciating, fluct^atir^ currency cheats every man 
 
WON. JULIUS C. BURROWS. 297 
 
 who touches it. It cheats both ways when it is de- 
 clining and when it is appreciating. In war times the 
 man who loaned $1,000 in gold was obliged to take his 
 pay in paper worth 33 cents. The farmer who gave a 
 mortgage for $ 1,000 on his farm when we were on a 
 paper basis 'of 33-cent dollars felt it to be a hardship 
 when he was obliged to pay that mortgage in paper 
 dollars worth 100 cents. But that is the inevitable 
 effect of an unstable currency. I affirm that whenever 
 we have a vacillating, depreciated currency it injures 
 all classes and all conditions. 
 
 But labor is sought to be deluded with the idea that 
 it is in their Interest, somehow, to have cheaper money. 
 Labor does not want cheaper money, but good money 
 money that will be good to-day and to-morrow, for 
 maney is not only the measure o value, but it is the 
 storehouse of values; and whei>. a laboring man has 
 completed his day's work he warM to be paid in a coin 
 that will be not only the full 2ri?;isure of the value of 
 that day's work, but in a dollar that will preserve the 
 value of that day's work. The laboring people of this 
 country having to-day $1,700,000,000 in the savings 
 banks, every dollar of which ia worth its face in gold, 
 do not want to be paid in a cheap currency worth one- 
 half that amount ; and yet the appeal is made here 
 and elsewhere that all this struggle for cheap money is 
 in the interest of labor I 
 
 It was once said " Liberty, how many crimes are 
 committed in thy name ! " and it might be as truthfully 
 said to-day, how many crimes are committed in the 
 name of labor. 
 
 At one time a practice prevailed in England of clip- 
 ping the coins and thereby depreciating their value. 
 
298 SILVER AND GOLD. 
 
 The English government made that practice a felony 
 punishable by death. Women were burned at the 
 stake and men were dragged to the scaffold for clipping 
 the coins of the realm. But it is now seriously pro- 
 posed to legalize an unlimited issue of debased cur- 
 rency. It is proposed that this great government, 
 which through all its perilous history of the last thirty 
 years kept faith with all its creditors and stands to-day 
 with a credit matchless and unimpaired, shall now 
 enter upon the shoreless and fathomless sea of depre- 
 ciated coinage, whose only harbor is national repudia- 
 tion and individual bankruptcy, to the utter destruction 
 of the nation's credit and the prosperity of the citizen. 
 Rather than do this, you might better at once invoke 
 the policy of a Solon, and scale all public and private 
 debts, and have done with it at once. 
 
HON. ELIJAH A. MOESE. 
 
 CHAPTER XIII. 
 
 BY ELIJAH A. MORSE, M. C., 12TH DISTRICT OF MASS- 
 ACHUSETTS. 
 
 THE question is, " What is sound money? " In brief 
 any form of money which is interchangeable with gold, 
 and is recognized as worth its value in gold in the great 
 commercial nations of the world, England, France, 
 Germany, Austria, Russia and the United States. The 
 enemies of sound money and those who favor the free 
 coinage of silver, while professing to be bimetallists are 
 really monometallists, in favor of a single standard, 
 and that standard silver, and could they succeed in 
 getting congress to vote for the free coinage of silver 
 in the ratio of 16 to 1, and in the absence of any inter- 
 national agreement as to the ratio they would immedi- 
 ately degrade our financial system from the high posi- 
 tion which it now occupies to the level of that of Mex- 
 ico, the Central American and South American repub- 
 lics. " From which, good Lord, deliver us! " At pres- 
 ent, under the financial policy inaugurated by the Re- 
 publican party, and indorsed and continued by Presi- 
 dent Cleveland, all forms of United States paper money, 
 and silver money as well, are interchangeable with 
 gold. Perhaps an illustration of Mexican finance and 
 the effect of the single standard may be in place here, 
 A gentleman visiting Mexico paid for his dinner, foi 
 which the charge was 50 cents, with an American silver 
 dollar, and received in change a Mexican silver dollar, 
 worth 50 cents in gold. Our consuls in China, a silver 
 
300 SILVER AND GOLD* 
 
 country, are able to double their salaries by exchanging 
 $1 of United States money for $2 in silver in that 
 country. 
 
 The precious metals always have been and always 
 will be the standards of value, since Abraham bought 
 the cave of Macpela to bury Sarah in. I am a bimetal- 
 list, I believe in both silver and gold as money, but I in- 
 sist that they must be maintained at a parity and inter' 
 changeable the one for the other. What this country 
 ought to do, and what every friend of sound finance 
 ought to endeavor to promote is, to join in an interna- 
 tional agreement as to the ratio between gold and sil' 
 ver. And there are at present, fortunately, indications 
 that such an international agreement may be reached. 
 When that becomes an accomplished fact, free coinage 
 of silver will be safe, legitimate and proper, and the 
 financial question will be eliminated from politics as it 
 ought to be. 
 
 I regard the present national banking system of the 
 United States as the finest banking system this country 
 or the world has ever seen. A national bank bill of 
 the United States is not only interchangeable for gold 
 in any section of our own country, but in any country 
 of Europe, or Asia and Africa as well. I regard the 
 national banking system as a national blessing, and 
 would favor its indefinite continuance, having United 
 States bonds deposited with the United States treasury 
 for a basis, supplemented by the deposit of state and 
 municipal bonds as security for circulation. Nothing 
 can be more important to the perpetuity and stability 
 of our government than to continue the present sound 
 financial system. 
 
B. BENJAMIN ANDREWS. 801 
 
 CHAPTER XIV. 
 
 THE FALL OF PEICES THE CAUSE AND THE CURE BY 
 PRESIDENT E. BENJAMIN ANDREWS OF BROWN 
 UNIVERSITY. 
 
 THAT a very great fall in general prices has occurred 
 since 1873 is trncontested ; but the baneful effect of 
 that fall is not so widely seen. Some, indeed, deny 
 that fall in prices is an evil, and deem it an advantage 
 instead. Such people confuse falling prices with fall- 
 ing costs, two things which are perfectly distinct. The 
 amount of labor necessary to produce the great commod- 
 ities of life may be lessening from year to year, and 
 yet the prices, the money values of those things, be in- 
 creasing. Costs and prices may rise or fall together, or 
 one may rise as the other falls. The costs of things 
 were falling in the sixteenth century, when American 
 silver was first getting distributed in Europe : but 
 prices were then rapidly rising. Likewise between 
 1850 and 1873 costs were falling more rapidly than 
 now; but prices were not falling; they were rising. 
 Even when the two movements coincide, as at the pres- 
 ent time, they are not to be identified. A lowering of 
 the costs of things is always advantageous, meaning an 
 easier living for mankind. A fall of general prices is 
 always a curse. 
 
 I desire also to emphasize the fact that it is the fall 
 in prices which is mischievous, and not the lowness of 
 the prices after they have fallen. While, during its 
 progress, a general fall of prices, however caused, is al- 
 
302 SILVER AND GOLD. 
 
 ways unfortunate, and while the effects of such a fal\ 
 may be grievous and continue long, yet a low range of 
 prices when attained, considered apart from all the 
 causes which made it low, may be as desirable as a 
 high range of prices. 
 
 In what I shall say, therefore I have in mind falling 
 prices, not falling costs, and falling prices, instead of 
 low prices; and my immediate purpose is to set forth 
 ho\v unfortunately, in many ways, a fall in general 
 prices works. 
 
 I say, first, that falling prices, such as are now occur- 
 ring throughout the gold-using world, work outrageous 
 injustice. 
 
 Appalling is the moral wrong which the fall of prices 
 since 1873 has wrought. Think of all those time con- 
 tracts, which form so prominent a feature of modern 
 business. Probably 70 per cent, of the world's com- 
 mercial transactions are based on some sort of deferred 
 payment or credit. It is estimated that a trillion and 
 a half dollars' worth of these deferred payments are 
 outstanding at this time. Appreciating money is oc- 
 casioning injustice in case of every one of these obliga- 
 tions. The business friction proceeding from this 
 source I mention presently ; here I hold up to view the 
 fraud of the system ; how increase in the value of 
 money robs debtors. It forces every one of them to 
 pay more than he covenanted to pay, not more dollars 
 but more value, the given number of dollars embody- 
 ing greater value at the date of payment than at date 
 of contract. In these days debtors must struggle hard 
 to be able to pay what they honestly owe. A money 
 system which forces them to pay from 10 to 50 per cent, 
 blood money is devilish indeed. 
 
E. BENJAMIN ANDREWS. 303 
 
 On September 1, 1865, oar national debt was about 
 $^,750,000,000. It could then have been paid off with 
 18,000,000 bales of cotton or 25,000,000 tons of bar 
 iron. When it had been reduced to a billion and a 
 quarter of dollars, 30,000,000 bales of cotton or 32,000,- 
 000 tons of iron would have been required to pay it, 
 In other words, while a nominal shrinkage of about 
 65 per cent, had taken place in the debt, it had, as meas- 
 ured in either of these two world staples, actually been 
 enlarged by some 50 per cent., all this unearned pur- 
 chasing power going to the holders of bonds. 
 
 Between 1870 and 1884 the public debt decreased not 
 far from three-quarters of a billion dollars, yet if we 
 take wheat, corn, beef, oats, coal, cotton, and bar iron 
 together as the standard, and they make not a bad 
 standard, the debt did not decrease, but increased not 
 less than 50 per cent. 
 
 In the Westminster Review for October, 1880, Mr. 
 Burr Rubertson computes that, the British national 
 debt at ,775,000,000 was in 1880 represented by a 
 volume of staples which in 1873 or 1874 would prob- 
 ably have cost 890,000,000, so that the fall in prices 
 between 1874 and 1880 affected a gratuitous distribu- 
 tion among consol holders of about 115,000,000 at the 
 expense of the tax -pay ing public. 
 
 He says: 
 
 "The whole amount of the British Government's ex- 
 penditure in the financial year 1878-79, being 85,- 
 000,000, represented a purchasing power of at least 
 12,000,000 more than the same amount of money 
 would have done 1873-74, when the the total expendi- 
 ture was 77,000,000, so that between 1873-74 and 
 1877-78 the burden of taxation in the United Kingdom 
 
304 SILVER AND GOLD. 
 
 increased by a purchasing power of < 20,700, 000, 
 though the nominal increase was but 8,000,000." 
 
 Say, if you please what in now and then a case may 
 be true, though it is not true generally that the larger 
 batch of commodities now needed to pay a given debt 
 cost no more labor than the smaller batches which 
 would have sufficed to pay it long ago. But where is 
 the justice of a money arrangement which throws all 
 the benefits of improved facilities in industry into 
 creditor's hands and utterly forbids debtors to share in 
 the improvement ? 
 
 I declare next that a fall in general prices places a 
 fatal clog, handicap, or brake upon the creation of 
 wealth. Making all due allowance for subsidiary dif- 
 ficulties, the radical business trouble from which this 
 and other countries on the gold standard are now suf- 
 fering is, I believe, that, owing to the increasing scarcity 
 of full money, goods of nearly all sorts are having to be 
 sold at smaller and smaller prices. The blight upon 
 our business originates in that scarcity of full or ex- 
 portable money, leading to a continuous and discourag- 
 ing fall in general prices, which first made production 
 and credit business less and less profitable, and now at 
 Hast makes them less and less possible. 
 
 Every business is affected more or less with certain 
 fixed charges, levying upon it the burden of an abso- 
 lute number of dollars. Taxes and mortgages illus- 
 trate this. These burdens can not be lightened when 
 assets and profits fall. You continue liable to pay 
 them dollar for dollar ; that is, immensely to overpay 
 them so far as value is concerned, no matter how much 
 your income may have shrunk. Your assets little by 
 
E. BENJAMIN ANDREWS. 806 
 
 little dwindle away, while your liabilities remain what 
 they were. This circumstance infinitely aggravates the 
 load which great bonded industries like railways have 
 to carry, and vastly aids to multiply receivership. 
 
 A manufacturer usually considers it safe, if neces- 
 sary, to borrow, say, 50 per cent, on the security of his 
 plant. The decline of prices which began in 1873 
 caught many who had done so. In a multitude of cases 
 the decline has swept away the owner's portion of the 
 capital, leaving only enough to pay the loans. Suppose 
 a ship or a factory built at a cost of $100,000, of which 
 ),000 were borrowed. It is now worth not over 
 1,000, or 40 per cent, less than cost. The mortgage, 
 therefore, represents five-sixths of the value instead of 
 half, the owner's interests having sunk to 110,000 in- 
 stead of $50,000. As trade is unprofitable, many a man 
 so burdened fails to pay the interest. Then the mort- 
 gage is foreclosed, the property is forced off at just 
 sufficient to cover the loan, and he is ruined. This 
 process exactly describes the condition of innumerable 
 business men in this and other countries having a gold 
 standard. A great portion of the country's capital has 
 thus silently passed into the hands of mortgagees and 
 and bondholders. The discouragement which this state 
 of things produces is intense. After it has gone on for 
 years a kind of hopelessness oppresses the commercial 
 community. Nearty all advance enterprises come to a 
 standstill, many works are closed, labor is paid less 
 or thrown out of employment altogether, strikes are 
 frequent, and the utmost distress prevails. It is out of 
 order to rejoin that the vicissitude described merely 
 transfers wealth from one possessor to another, and does 
 not change the nation's aggregate welfare. Were this 
 
306 SILVER AND GOLD. 
 
 all it would be bad enough. The craft of the pick- 
 pocket or card sharper is in no wise innocuous because 
 it only transfers wealth from one pocket to another. 
 The prosperity of the nation depends upon the security 
 men may feel in retaining the products of their industry. 
 Nothing affects it more vitally than unjust alienation. 
 But the process set forth is much more than a mere 
 transfer of goods from owner to owner ; it prevents pro- 
 duction, and that on a truely colossal scale. 
 
 Falling prices (appreciating money) set up a special, 
 positive motive for abstaining from productive industry. 
 This is the impulse to hoard. Appreciation of money 
 tempts holders of money and of titles certain to be paid 
 iff; money to cling to these and not invest in industry. 
 It intensifies the demand for bonds and depresses that 
 for stocks. The present is the age of bondholders. 
 That all are so anxious to invest in bonds is, from an 
 industrial point of view, an alarming symptom. If there 
 is anywhere to be had a mortgage on wealth already 
 realized or practically certain to be realized, everyone 
 rinhes for it, while new undertakings which would once 
 have been thought full of promise, and would be so still 
 but for the money difficulty, responsible capitalists 
 avoid unless they can engage in them under some special 
 shelter or guaranty, like a trust or a very high tariff. 
 Irresponsible, feeble, and ignorant industrialists, to be 
 sure, go on trying to produce unsheltered. Some of 
 them, by sweating their wage workers, have some suc- 
 cess, their winnings, however, speedily falling into 
 bondholders' pockets. One set of weak producers fails, 
 another rises and runs the same course. Always some 
 are making the endeavor. The bondholder never fails 
 of supporters. For my part I pity the class of brave, 
 
JULIUS C. BURROWS, 
 
UI1TIE3ITY 
 
E. BENJAMIN ANDREWS. 309 
 
 small industrialists quite as much as I do the men who 
 toil for wages. They are a sort of serfs. A business 
 situation which thus coddles the bondholder and snubs 
 the stockholder can not be healthy. 
 
 In this risk to industry from having to produce 
 against a falling market, this bondholder instinct, ana 
 this hoarding motive or impulse to clutch at gold-paying 
 paper and not let go save when return in kind is sure, 
 we see the reason why our banks overflow with funds 
 which they can not loan, and our streets with hungry 
 men willing to work, but unable to find strong em- 
 ployees who have heart for productive enterprises. 
 
 The first victims to falling prices are producers of 
 the weakest class. These are the farmers weakest be- 
 cause possessing the least capital and unable either to 
 combine or to stop producing. Hence the agrarian dis- 
 tress in every farming country and section of the gold- 
 using world. Hence the efforts of the farmers every- 
 where to better their condition through various politi- 
 cal devices. 
 
 The staple of Australia is wool, whose exportation, so 
 profitable until 1873, made that continent very prosper- 
 ous. A large British debt was contracted. But be- 
 tween 1873 and 1888 wool fell from 33 to 16 cents. 
 The whole clip for a year is now insufficient to pay the 
 annual interest on Australia's British-held debt. Panic 
 rose in 1888, but was lulled for a time by reborrowing 
 at high rates. But it came. In January, 1893, 40,000 
 houses were to rent in Melbourne, the population hav- 
 ing decreased in 1892 by over 17,000. The exodus con- 
 tinued and even increased in 1893. 
 
 Now it is our turn. The United States pays, mainly 
 in farm produce, at least $ 100,000,000 a year in foreign 
 
310 SILVER AND GOLD. 
 
 interest. This was a light burden in 1873, when wheat 
 brought $1.85 a bushel in London and $1.15 on the 
 farm. In 1889 it had fallen to .$1.03 in London and 69 
 cents on the farm. The yield for 1889 was about 340,- 
 000,000 bushels, which came to some $115,000,000 less 
 than it would have brought sixteen years earlier, to say 
 nothing of the lower income in freights, which had to 
 be suffered in order to get it marketed at all. For the 
 year 1893 our wheat brought the farmers only 54 cents, 
 the lowest price ever known till then. In 1894 it was 
 lower still. The New York price of wheat, No. 2, red, 
 for 1894, averaging the fifty -two weekly averages, was 
 60.4 cents. The price on the farm can not have been 
 far from 40 cents. The London price was 22s. IQd. a 
 quarter, a fall of 3s. 6d. from 1893. In 1881, 383,000,- 
 000 bushels sold for $456,000,000. In 1893, 396,000,- 
 000 bushels sold for but $213,000,000, a shrinkage of 
 $243,000,000. 
 
 The money yield per acre of wheat has fallen in 
 twenty years from $13.16 to $6, or about 54 per cent. 
 Cotton priees have fallen very much like wheat prices. 
 The cotton crop of 1893, 6,600,000 bales of about 470 
 pounds each, brought the producer not over 6 cents a 
 pound, or about '$186,000,000. By the price of 1873, 
 viz, 16 cents, it would have brought over $310,000,000 
 more, viz, $496,333,000. The money yield per acre of 
 cotton has in twenty years fallen from $28 to $10.65, or 
 about 62 per cent. The money yield per acre of wheat, 
 corn, oats, hay, and cotton, taken together, has fallen 
 in twenty years from $15.65 to $8.15, or about 48 per 
 cent. 
 
 From 1873 to 1889 the nation's paying power was re- 
 duced at least one-third. We could no longer liq-iidt? 
 
E. BENJAMIN ANDKEWS. 811 
 
 our foreign interest in wheat and cotton, and had to 
 begin sending gold abroad, a movement intensified in 
 that England has been drawing in the principal of her 
 loans; her net imports of gold having been for 1887 
 ,600,000; for 1888, 800,000; for 1889, 3,000,000; 
 for 1890, 9,000,000. 
 
 The agricultural classes, sections, and nations im- 
 poverished, lose power to purchase of the manufactur- 
 ing classes, sections, or nations, and so these, with the 
 middle men, carriers, and merchants, also grow poor. 
 Adversity comes over the entire world of producers. 
 The only people able to prosper are the very small 
 class who create nothing but live upon income from 
 loans. Even these, though they may profit for a time, 
 can not escape loss if money continues to grow pre- 
 cious. Failures and repudiation must ensue. Portugal, 
 Spain, Greece, and Argentina have already defaulted 
 on their bonds. Mexico has virtually threatened to do 
 the same. It is believed that Italy was kept from 
 repudiation only by the use of British gold to bribe 
 legislators to vote new taxes. The richest money 
 lenders on earth, the Rothschilds, appear to have con- 
 cluded that their surest way to realize satisfactorily 
 upon their loans is to check the rise of gold by increas- 
 ing the world's stock of silver money. At the Brus- 
 sels Conference Alfred Rothschild earnestly argued for 
 such a policy. 
 
 I maintain, thirdly, that falling prices in any country, 
 at the very same time that they lessen such country's 
 ability to compete with others, invite against it disas- 
 trous competition from lands differently situated. In 
 Europe agriculture is at the lowest ebb ever seen by 
 living men. All silver countries can send their pro- 
 
312 SILVER AND GOLD. 
 
 duce there. As silver has not with them lost in pur- 
 chasing power, and as they receive the same amount 
 of it for one sovereign, mark, or franc, as once they 
 did for two, they can prosper themselves while starving 
 European farmers. Europe's other productive indus- 
 tries suffer from the same cause. European merchants 
 trading with silver countries, find on the one hand their 
 capital invested there reduced by one-half, and on the 
 other that, the par of exchange being destroyed, their 
 present trade with those countries is, if not destroyed, 
 a mere matter of gambling chance. 
 
 Sir Thomas Sutherland, presiding at the last annual 
 meeting of the Peninsular and Oriental Company, after 
 calling attention to the extraordinary advantages 
 which silver countries now possess in manufacturing - 
 noticing Bombay as a rival to Manchester, Japan, with 
 its splendid supply of coal, as making enormous strides 
 in cotton and other maufactures, and Shanghai as hav- 
 ing entered upon similar enterprises on a large scale, 
 said : 
 
 " There can not be the slightest doubt that this low 
 value of silver, if it continues, must tend to check ex- 
 ports from Europe to those countries, and must stimu- 
 late industrial and manufacturing activity in the far 
 East. It is impossible to foresee to what this may 
 eventually tend ; but there may possibly be in this 
 room at the present moment some gentleman young 
 enough to live to see the Peninsular and Oriental ships 
 built on the banks of the Yang-tse-Kiang instead of 
 the banks of the Clyde, or the Tees, or the Tyne." 
 
 The first spinning mill in Japan was built in 1863, 
 "with 5,456 spindles. 
 
 At the end of 1883 there were 16 mills with 43,700 
 spindles ; 1888, 24 mills with 88,140 spindles ; 1892, 
 
E. BENJAMIN ANDREWS. 311 
 
 39 mills with 403,314 spindles ; 1893, 46 mills will* 
 about 600,000 spindles. . 
 
 From 5,000 spindles to 600,000 in thirty years ia 
 rapid progress. 
 
 The bimetallist members of the late German silver 
 commission placed on the record of the twenty -first 
 session the following solemn declarations : 
 
 " A setback to German agriculture is manifest, refer, 
 able, on the one hand, to the necessity of selling a con< 
 stantly increasing amount of depreciated agricultural 
 products in order to pay wages, interest, rent, leases, 
 taxes ; and on the other hand, to the increased power 
 of competition on the part of other countries, silver 
 countries, that is, and countries on a money basis of 
 depreciated paper. In proportion as their silver or 
 paper loses in power to buy gold, these countries, en- 
 joying in effect a high export premium, are able to 
 throw their native products upon the world's markets 
 at prices far beneath what it costs German farmers to 
 produce them, so plunging these latter in deep distress. 
 
 " The demonetization of silver is also working a more 
 and more visible injury to German manufacturing in- 
 dustry : 
 
 " (a) On account of the ever-lessening ability of the 
 farmer class to purchase manufactured products. 
 
 " (b) On account of the decrease in exports to silver 
 lands and of the consequent recoil upon the home 
 market of the articles hitherto exported thither. 
 . " ((?) On account of the competition offered by the 
 rapidly developed manufacturing plants of silver lands, 
 favored by the low cost of production there and by the 
 premium upon exportation therefrom produced by the 
 fall in the gold price of silver. 
 
 " Unless means are taken to prevent, it will not be long 
 before the manufactured products of the silver coun- 
 tries will find the German market. To import Indian 
 yarn into Germany is already a paying operation." 
 
814 SILVER AND GOLD. 
 
 I could recite innumerable testimonies of the same 
 tenor with these did time permit and occasion demand. 
 It is facts like these which have led the Reichstag to 
 vc e for an international monetary conference. 
 
 Stupidly as the ignorant may overlook it, and per- 
 siremtly as those interested in maintaining the sole 
 go I standard may deny it, the United States is a 
 victim of this same silver land competition. That it is 
 which so lowers the price of wheat and cotton, or nar- 
 rows the market for them. The acreage under these 
 staples, to be sure, keeps up fairly well, though the 
 price falls. Certain writers therefore allege that 
 cheaper production accounts for the fall. If farmers 
 could not afford to sell at these low prices, it is argued, 
 they would stop raising. That is, I believe, a total 
 misconception. The farmers continue these crops, not 
 because they can, in the sense that the crops pay, but 
 because, being tied to their farms, usually mortgaged, 
 they must continue, however petty their income, and 
 try to make up by the quantity raised the lost suffered 
 in fall of price. 
 
 The dependence of prices in America upon the gold 
 price of silver, in the case of articles whose surplus com- 
 petes in London with the produce of silver countries, 
 is very direct. One might suppose that the larger market 
 would rule, and that the London (gold) price would 
 remain steady instead of being itself fixed by the silver 
 price. But it is not so, and this for a reason which 
 Mr. G. Jamieson, British consul-general at Shanghai, 
 gives in an article in the Journal of the Royal Statisti- 
 cal Society, London, for December, 1893. He says : 
 
 "It is a well-known fact in the commercial world 
 that it is much easier to lower prices than to raise them. 
 
E. BENJAMIN ANDREWS. 315 
 
 If you can afford to go down a half-penny, a bargain is 
 much more easily struck than if you are bound to stand 
 out for a rise of a half-penny. It would seem, then, to 
 be a general rule that the adjustments following on a 
 fall of exchange are always made along the line of least 
 resistance, and that, therefore, it is not the China (or 
 India) price that rises, but the London prices that fall. 
 Merchants find it easier to buy Asiatic produce at the 
 old prices and sell it in London at a concession than to 
 stand out for old prices at home in order to pay more 
 to the producer. 
 
 "From this point of view it is really silver that rules 
 the world. It is the purchasing power of the cheaper 
 metal that determines the prices all over. Just as in a 
 bimetallic country the cheaper metal will drive out the 
 dearer toward her monometallic neighbor, so, as between 
 countries of different standards, will the prices prevail- 
 ing in the countries of the cheaper metal drag down 
 prices all over to their own level. And, reasoning for- 
 ward from the experiences of the past, it would not, 
 perhaps, be too rash to suppose that the prices of com- 
 modities in Europe, so far as they can be drawn in any 
 fair quantities from silver-using countries, must continue 
 to decline with every further fall in (the gold price of) 
 silver." 
 
 It is not silver countries alone whose exports crowd 
 those of gold lands. Worse pressure, if possible, pro- 
 ceeds from countries like Greece, Spain, Portugal, and 
 Argentina, whose crushing gold debts have driven them 
 to a paper-money basis. The depreciation of their 
 paper acts as a premium on exportation from these 
 countries to gold -standard countries, depressing in 
 these latter, first the prices of international commodi- 
 ties, and indirectly the prices of many other commodi- 
 ties. 
 
 Jf in Spain, say, gold rises from paper par to 125 
 
816 SILVER AND GOLD. 
 
 above, a Parisian wine merchant can buy with a given 
 number of napoleons 25 per cent, more Spanish ex- 
 change than before. As it will take a long time for 
 Spanish paper money to lose any of its purchasing 
 power in the rural districts, and as, therefore, each 
 paper peseta will practically buy as much wine after the 
 rise of gold as it would before, the Frenchman's gold 
 laid out in Spain brings him a quarter more wine than 
 before. Therefore any ^rt of the demand on him that 
 he can supply with Spanish wine he is sure to cover in 
 this way instead of purchasing in France itself. The 
 French raisers of brands previously competing with 
 Spanish are driven from the market, while all French 
 wine producers suffer more or less. The same is true 
 in case of several other commodities. Paper-money 
 countries having this advantage are doubtless laying 
 up wrath against the day of wrath unless, indeed, as 
 many of them will certainly do if the craze for gold 
 continues, they give up all idea of returning to specie; 
 but in the meantime they immensely gain at the ex- 
 pense of neighboring States whose money is at gold par. 
 Precisely this is the explanation of the Argentine wheat 
 shipments, which have of late become so enormous as 
 to alarm United States and Russian farmers. In 1892 
 Argentina exported only about 25,000,000 bushels. 
 In 1893 the shipments rose to 45,000,000 bushels ; in 
 1894, it is said, to 75,000,000. The export for this 
 year will probably show an even greater advance. 
 
 Who are our chief competitors for the tin industry ? 
 Not Cornwall or Australia, but the Straits and Bolivia 
 both silver countries. Bolivia sent to Liverpool 224 
 tons of tin in 1895; in 1894, 3,482 tons. In 1873 the 
 Straits Settlement shipped 6,963 tons; in 1894 it 
 
07 T 
 
 E. BENJAMIN ANDREWS. 
 
 shipped 46,640 tons. Australia, a gold country, ex- 
 ported 11,121 tons in 1893; in 1894 only 5,824 tons. 
 Cornwall used to produce annually 10,000 tons; last 
 year its product was but 8,000. Moreover, while the 
 tin industry of the Straits is most flourishing, that of 
 Cornwall is the despair of everybody connected with 
 it. 
 
 Manufacturing in general is interested in this ques- 
 tion. All parties agree with Governor McKinley's re- 
 mark at Rochester on Lincoln's birthday, that " We 
 want a foreign market for our surplus products of 
 manufacture and agriculture." Some would promote 
 foreign trade by reciprocity and by subsidies upon 
 steamship lines to foreign countries. Others prefer the 
 method of reducing duties. But no intelligent Amer- 
 ican will deny that in some way or other exports from 
 the United States of America must be increased if the 
 prosperity of our country is to go on. A very great 
 part of the new exports must go to lands on the silver 
 basis, as China, Japan, Mexico, Central and South 
 America. We ought to be the principal manufacturers 
 for all those regions. No other great manufacturing 
 nation is so near them. 
 
 But to utilize this gigantic possibility we must be 
 quick, or those parts of the world will have supplied 
 themselves. At many a point in India and China, as. 
 well as in Mexico and further south, the tall chimneys 
 already smoke and the clatter of machinery is heard. 
 Soon, unless the currency problem is settled, the teem- 
 ing millions there will cease to buy of the English or of 
 ourselves. 
 
 It is in this fact that the patriotic advocates of do- 
 mestic free silver find their inspiration. Aware of the 
 
318 SILVER AND GOLD. 
 
 absolute necessity resting upon this country to extend 
 its foreign markets, they would take advantage of 
 England's folly in continuing the regime of falling 
 prices. They would place the United States at the 
 head of the silver-using nations to do their manufac- 
 turing. " Let us break off commercial relations with 
 Europe," they say, " if only we can establish such re- 
 lations with that vast world where manufacturing is 
 either nonexistent or inchoate, and must grow, if at all, 
 with difficulty ; arid let us create for those populations 
 all their manufactured articles, taking in return those 
 things which they can produce so much more easily 
 than we." 
 
 Much as this proposal has been ridiculed it has great 
 force. The thought in itself is magnificent. We no 
 doubt have an opportunity by the means suggested to 
 " dish " England in the markets of the world. If this 
 could be accomplished without involving other difficul- 
 ties it would be the finest commercial coup d'etat ever 
 effected. So much reason attends the notion that it 
 seems to me sheer madness to oppose to it a policy like 
 England's present one, of stubbornly adhering to money 
 based on gold alone. 
 
 Fourthly, we see in the fall of prices and the accom- 
 panying danger to business the true cause of the world- 
 wide movement, so astounding to free traders, for trusts 
 and what we should once have called inordinate tariffs. 
 This phenomenon marks the precise period, since 1873, 
 during which money has been swelling in value and 
 goods losing in value. New South Wales, till 1891 
 ever the free trader's welcome standby, succumbs to 
 this drift. The reason of it is perfectly obvious. Owing 
 to the down-grade prices, production is extra hazardous 
 
E. BENJAMIN ANDEEWS. 819 
 
 and needs shelter. When prices threaten or begin to 
 fall, when stock depreciates upon manufacturers' hands, 
 they inevitably struggle to avert these results, welcom- 
 ing any resource that can aid. Unable to compass 
 their ends otherwise they agitate for high tariffs. I 
 unhesitatingly avow the conviction that had prices since 
 the war been stationary or only slowly advancing, the 
 rise in United States tariff rates culminating in the Mc- 
 Kinley law would never have been so much as thought 
 of. 
 
 These rates have been lowered somewhat, and if the 
 change had been preceded by proper monetary reform 
 the reduction might be permanent, and, perhaps, in a 
 little time, with the approval of all, made greater still. 
 But I fear that it can not be permanent. I would say 
 to my Democratic friends, begging them note well the 
 prophesy, that, unless monetary reform comes soon, the 
 tariff which they have been at such great pains to give 
 us will speedily be ripped in pieces and rates of duty 
 be imposed higher than those of the McKinley act. I 
 believe this inevitable. Mark my words : Alow tariff 
 policy can never be established in these United States so 
 long as gold alone continues the basis of our currency. 
 
 By no means all those crying for highest protection, 
 whether here or in Europe, are addicted to protection 
 as a general policy. Many such are, in theory, free 
 traders, i. e., they would advocate free trade were prices 
 stable or rising. Willingness to subject your country's 
 industries to normal foreign competition is one thing ; 
 quite another is it to do so when your competitors are 
 helped to beat you by a home bonus on exportation, as 
 is the case with 'all exporters from silver and paper 
 lands to-day. In France these " opportunist " protec- 
 
320 SILVER AND GOLD. 
 
 tionists are a powerful and growing party. Their logK, 
 is as yet imperfectly understood in this country ; but 
 men are mastering it more and more, and it will insure 
 to the protectionist ranks armies of recruits in every 
 congress and presidential election till general prices 
 cease falling. 
 
 Such is my diagnosis of our present industrial disease. 
 In my belief a true cause of morbid conditions in the 
 body industrial has been laid bare. The extrusion of 
 silver from service as full money greatly reduced the 
 amount of the world's money available for ultimate 
 liquidation reduced it absolutely and reduced it far 
 more relatively to those needs for fundamental money 
 which rise from the growth of population and business. 
 A distressing appreciation of money per unit has en- 
 sued, meaning a tremendous drop in prices. This dis- 
 astrously handicaps all production. It does not en- 
 tirely prevent production. Nothing short of killing off 
 the race could do that. But it renders production in- 
 definitely feeble compared with what it would be but 
 for the handicap. The world needs an addition to its 
 fundamental money ; not more bank notes, not more 
 token coinage; not more full legal tender tokens like 
 our silver dollars and the French ecus, but money that 
 can do everything that any money can do. We need, I 
 say, a greater bulk of money that is exportable, good 
 in ultimate settlements, suitable for bank and govern- 
 ment reserves. A stop must be put to this ubiquitous 
 rush and clutch for gold ; the passion for hoarding 
 must be cured. It can only be done by abolishing the 
 legal primacy of gold. This is the proper prescription 
 for our patient. The only question is whether he can 
 be induced to try the remedy. My belief is that the 
 
E. BENJAMIN ANDREWS. 321 
 
 rehabilitation of silver as full money by a few of the 
 great commercial States of the world would furnish it. 
 If so, that course is most desirable. 
 
 In saying this I am not forgetting the gratifying new 
 output of gold of late in South Africa, Australia, and 
 the United States. This does not lessen in the slight- 
 est our need to make silver again full money. 
 
 It is interesting to notice the joy with which the new 
 gold is hailed by men who have been assuring us for 
 years that no more money is needed ; that the quantity 
 theory of money is exploded ; that prices are not fixed 
 by money but by credit, and that every fall in prices 
 ought to be hailed with hallelujahs. Their welcome to 
 this increase of the world's monetary stock justifies 
 their good sense at the expense of their consistency. 
 The veteran French economist M. Leroy-Beaulieu is 
 one convert. So recently as 1889 he held, as many 
 Americans hold, that the fall of prices, which he de- 
 clared a blessing, proceeded not from a diminution in 
 the supply of money, but solely from progress in the 
 industrial arts, cheaper transportation, and overproduc- 
 tion. He has now changed his view. He believes that 
 the new gold will cause each grain of gold in the world 
 to lose its value, to wit, will provoke a rise in general 
 prices ; and that " all the countries on a basis of depre- 
 ciated money and suffering from low exchanges will be 
 able to better their monetary situation and come back 
 to a solid monetary standard." 
 
 So Mr. Henry Binns, in the London Economist for 
 last December 29, anticipates a " considerable rise " in 
 prices from the increasing supplies of gold, and views 
 the rise as a ground not of " alarm, but of congratula- 
 tion." Our American monetary theorists of the gold 
 
322 SILVER AND GOLD. 
 
 school must admonish M. Leroy-Beaulieu. From their 
 point of view his allegations are fatally heretical. To 
 me, however, they are most welcome, only I can not 
 agree with M. Leroy-Beaulieu in the expectation that 
 gold alone will stay the fall of prices or heal the dis- 
 ordered exchanges now prevailing between gold coun- 
 tries and silver or paper countries. Thus, though 1893 
 brought forth 14,250,000 more gold than 1892, prices 
 during 1894 did not rise, but fell 10 per cent. The 
 prophecies of a future annual output of gold very much 
 exceeding that of 1893 $155,522,000 rest on no solid 
 foundation. They are made largely in the interest of 
 speculation. Eight South African mines of which I 
 have read, possessing a capital of only $75,500,000, 
 though they have as yet paid no dividend at all, are 
 floating stock which, at the rates at which it is quot 3d, 
 foots up $215,430,000. 
 
 In his last report the Director of our Mint presents 
 some very interesting figures touching the gold out- 
 look ; but I do not think all his deductions from them 
 quite sound. He concludes that the value of the gold 
 alone which in 1873 was available for coinage purposes 
 in the western nations exceeded by $7,000,000 the tot.il 
 value of gold and silver both available for coinage, on 
 the average, in the years 1866-1873. Were this true, 
 the fact would but serve to illustrate how insignificant 
 so slight an increase is in view of the advance that has 
 meantime occurred in population and business ; be- 
 cause, as just stated, prices fell in 1884 instead of ris- 
 ing. 
 
 But I believe Mr. Preston mistaken in his conclusion 
 and in a number of data which help him to it. 
 
 (1) While from the world's gold yield for 1893 he 
 
E. BENJAMIN ANDREWS. 323 
 
 properly deducts Russia's product of 37,325 kilograms 
 as now serving no monetary end, he does not deduct 
 India's product of 5,738 kilograms ($3,813,600). 
 
 (2) While in estimating the industrial use of gold 
 and silver in 1871-1873, which he naturally wishes to 
 make as large as possible, that the monetary gold and 
 silver of those years may seem the smaller, he unhesi- 
 tatingly uses Soetbeer's estimate ; on the other hand t 
 in estimating the corresponding figure for gold in 1893 
 he first scales Soetbeer's outside estimate by 10,000 
 kilograms, then averaging this result with three less 
 trustworthy estimates, one of which, Ottomar Haupt's, 
 I consider of little value. Haupt's data, the poorest of 
 all, Mr. Preston, in case of three important countries, 
 duplicates in the United States estimate, thus weighing 
 them twice in the result arrived at, and doubling the 
 power of whatever error they may contain. Suess's 
 estimate, which agrees with Soetbeer's outside figure of 
 120,000 kilograms, is ignored altogether. Thus, in- 
 stead of Soetbeer's outside estimate of 120,000 kilo- 
 grams of gold as used industrially, etc., in each recent 
 year, he places the figure at 91,125 kilograms. 
 
 (3) Except as to three countries, Mr. Preston makes 
 no allowance for any increase in the industrial con 
 sumption of gold in 1893 over that of preceding years. 
 But it is probable that this was very considerable, 
 since consumers of gold were mainly people who little 
 felt the hard times, which indeed began only when the 
 year was half over, and since the appreciation of gold,, 
 by making the possession of gold ware a badge of 
 wealth, probably increases rather than decreases 'the 
 per capita number of grains of it yearly purchased fei 
 such purposes. 
 
S24 SILVEE AND GOLD. 
 
 My belief is that the gold used up yearly for art, in- 
 dustry, and boarding considerably exceeds Dr. Soet- 
 beer's extreme estimate of 120,000 kilograms. I so 
 judge because of a general habit overlooked, I think, 
 even by Soetbeer, far the most careful statistician who 
 has examined the subject which small jewelers have 
 of using up gold coins coming to them in trade or 
 bought at banks. Such coins must aggregate a vast 
 sum, of which the big jewelers, whom alone statisti- 
 cians consult, would be quite ignorant. Soetbeer, the 
 ablest authority on the subject, among the last words 
 he ever wrote said, in 1891 or 1892 : 
 
 "Although it can not -be demonstrated that the use of 
 gold in arts, hoards, and export to the East consumes 
 the entire output from the mines each year, yet, on the 
 other hand it can not be demonstrated that it does not 
 do so." 
 
 Allowing for the jeweler's habit, which I have re- 
 ferred to, and for some increase of consumption in 1893 
 beyond that of preceding years, I should place the 
 gold going to arts, industry, and hoards in 1893 at least 
 so high as 125,000 kilograms. "Not insisting on this, 
 however, let us simply take Soetbeer's figures for 1891, 
 viz, 120,000 kilograms, equaling 179,752,000. Adding 
 to this the Russian and Indian product for 1893, we 
 have, as the sum of gold put in that year to nonmone- 
 tary service, and therefore to be deducted from the 
 total product of the world, $108,565,600, instead of 
 $88,000,000, the amount deducted by Mr. Preston. 
 The monetary part of the 1893 gold product of $155,- 
 522,000 was therefore only $46,956,400, and not $67,- 
 522,000, as concluded by the Director of the Mint. The 
 
FRED T. DUBOIS, 
 
E. BENJAMIN ANDREWS. 327 
 
 Increment to the western world's money stock for 1893, 
 instead of being $7,000,000 more than that of one of the 
 years just preceding the demonetization of silver, was 
 less by $13,605,575 than the average of those years. 
 When we consider with this the world's increase in 
 population and wealth since 1873, England, a repre- 
 sentative country, having gained 7,000,000 souls and 
 increased her commerce, spite of the fall in prices, from 
 470,000,000 sterling to 681,000,000, it is not strange 
 that prices fell 10 per cent in 1894. 
 
 I am happy to join the Director of the Mint in his 
 belief that the yearly output of gold is likely to in- 
 crease for a number of years ; and though nonmone- 
 tary consumption will increase, too, I presume that the 
 part going to replenish the monetary supply will be not 
 a little augmented. But there are three colossal and 
 obdurate reasons why one can not expect our business 
 distress to be relieved by gold alone. 
 
 Suppose the new gold to succeed in stoppi ng for a single 
 year the fall in prices. No one can imagine the immense 
 spur and enlargement to industry which M o\ild immedi- 
 ately ensue. Let prices cease to fall, let investments in 
 enterprises for producing wealth again become safe, aa 
 before 1870, let the stockholder again have a chance to 
 make something as well as the bondholder, let the 
 loaning of European and United States capital in 
 China, Japan, India, and Mexico cease to be a form of 
 gambling, and a volume of new industry would spring 
 up to which the slight increment of gold money that 
 started it, enlarged by all the credit that could be 
 based upon this, would be utterly inadequate, making a 
 renewed fall of prices the quick and sure sequel. So 
 *st aa amount of business would be called into life by 
 19 
 
328 SILVER AND GOLD. 
 
 an arrest in the fall of prices that the utmost a 
 of money which the coinage of gold and silver both 
 could furnish would be necessary to sustain it. No in- 
 flation, I am persuaded, could result from the free 
 coinage of both metals, could it be made general. Both 
 together would perhaps be able to sustain prices, but 
 would not sensibly raise prices. 
 
 A second reason why gold alone can not check the 
 fall of prices is that the moment the metal obviously 
 becomes at all plentiful, Austria and India will purchase 
 vast sums that they may place themselves completely 
 on a gold platform. Japan also would probably at- 
 tempt to change from silver to gold. If this did not 
 turn the gold plenty to penury again, other silver 
 nations would do the same. You can not permanently 
 maintain the gold standard anywhere unless you can 
 do it everywhere. The world of commerce will not 
 brook division into monetary hemispheres. It will not 
 tolerate the chaos of one basal money for the West and 
 another for the East, one for wealthy centers and one 
 for cruder communities, one for the motherland, the 
 other for colonies. In kind, all the griefs which are 
 moving India to try and place her feet upon gold press 
 Mexico, all Central and South America, Ceylon, Mau- 
 ritius, the Straits, Japan, and China to do the same ; 
 and no possible increase to the world's stock of gold 
 will enable it to be so spread out The conflict for 
 gold, if it is not paired with silver, must be not only 
 irrepressible, but more and more bitter without end. 
 
 A third reason for denying that gold alone can heal 
 the world's monetary lesion is as follows : Prof. Shield 
 Nickerson makes it extremely probable that when silver 
 falls in value, as it probably did to some extent during 
 
E. BENJAMIN ANDREWS. 329 
 
 1893 and 1894, and falls, too, in consequence of causes 
 directly affecting itself and not in the first instance 
 reaching gold at all, still the gold prices of interna- 
 tional commodities are determined by their silver prices. 
 That is, suppose some cause in the gold-price world to 
 be so affecting the relation of gold to commodities at 
 large that, if you could annul all influence from the 
 silver price world, gold would cease to rise in value ; 
 yet, since you can not annul that influence, if silver 
 goes on falling in relation to gold, gold will, in fact, not 
 cease to rise in value, but the gold prices, in gold lands, 
 of all commodities in which gold and silver lands com- 
 pete, will continue to fall. 
 
 Were silver again standard money everywhere, the 
 demand for it would be so great that its marginal cost, 
 and so its value in the world's trade, would not fall but 
 probably rise, prices in silver falling to correspond ; 
 but if silver remain full money in the silver lands 
 only, excluding India, the demands for it can all 
 be met at such a marginal cost as will permit the 
 gold price of silver to fall and prices in silver lands to 
 rise, slowly, for an indefinite time, if not forever ; this 
 fall, through the whole of its extent, pulling down gen- 
 eral prices in gold lands. 
 
 Facing the three considerations thus presented, I can 
 not but think the hope of monetary relief from gold 
 alone wild and visionary in the extreme. 
 
 But while the new gold does not modify in the 
 slightest the need of restoring silver to its old role as 
 full money, it triumphantly answers the only argument 
 which, with me, ever had any weight against trying to 
 restore silver. Hans Forssel, of Sweden, following 
 Professor Lexis, argued in the Monetary Conference of 
 
830 kJLVEl* AND GOLD. 
 
 1892 that however large any international pool of gold 
 and silver might be, making it perfectly impossible for 
 its gold to leak out of it, its gold might become so 
 scarce as to be lost in it. This objection to bimetallist 
 effort then had some force, but the output of new gold 
 now deprives it of all validity whatever. 
 
EDWARD ATKINSON. 331 
 
 CHAPTER XV. 
 
 THE BANKING PRINCIPLE BY EDWARD ATKINSON. 
 
 BEFORE dealing with my main subject certain exist- 
 ing conditions will be stated. 
 
 It is becoming evident that the great body of think- 
 ing people in this country are realizing the necessity 
 for an adjustment of our banking system to the present 
 conditions of our trade and commerce. It is also be- 
 coming evident that both the bankers, business men 
 and students of every kind who try to master details 
 and principles as well as the mass of the people who 
 have not time to master details but are governed by 
 common sense (of course omitting populist and cur- 
 rency cranks), have reached the conclusion that there 
 must be a unit or standard of value, either monometal- 
 lic or bimetallic, which shall be the lawful money in 
 which all notes and subsidiary or undervalued coins 
 which bear the semblance of money, whether of the na- 
 tion or of the banks, shall be promptly redeemed on de- 
 mand. 
 
 There is a difference in judgment between what are 
 called " monometallists " and " bimetallists " as to 
 whether that standard and unit of value shall consist 
 simply and singly of a fixed weight of gold converted 
 into coin, or of gold and silver held together at a fixed 
 ratio of weight by an international treaty or agreement. 
 That discussion holds no necessary part in the consid- 
 eration of the system of banking or of the banking 
 
332 SILVER Attb GOL>. 
 
 principle, it being a separate and distinct issue. Neither 
 monometallists nor bimetallists give any support to the 
 suggestion for the free coinage of silver at the present 
 ratio of sixteen to one without the co-operation of 
 other nations, nor do they give any support to the ad- 
 vocates of fiat or legal tender paper money to be sup- 
 plied by the nation. 
 
 Those who might and may soon unite in the support 
 of a sound system of banking under which all notes of 
 every kind shall be subject to prompt redemption on 
 demand in the lawful standard or unit of value, are at 
 present unable to act together for certain reasons. 
 Many of the elder men who have a thorough knowl- 
 edge of the practice of banking are affected in their 
 judgment of the course which should now be taken by 
 their recollection of the difficulties and dangers of what 
 has become known as the " wild-cat banking and bank 
 notes " of the ante-war period. Many other men of 
 sound judgment are governed by the sense of the bene- 
 fit which was gained by the establishment of the Na- 
 tional bank system and through the circulation of the 
 National bank notes secured b}' United States bonds. 
 Great masses of people who possess votes, and there- 
 fore influence, are affected by the delusion that it is 
 necessary that there should be a very large supply of 
 the small instruments of exchange (notes and specie) 
 which pass from hand to hand. With many persons 
 the only conception of money is limited to such small 
 notes, National or bank, as the case may be, and to the 
 coins which pass from hand to hand. 
 
 In dealing with the reform of our banking system all 
 these variations in judgment or in imagination must of 
 necessity be considered. It therefore follows that any 
 
ATKINSON. 833 
 
 plan thac can be suggested with any prospect of its be- 
 ing considered and passed by congress must be prepared 
 so as to meet these existing conditions. 
 
 In the subsequent treatise I have endeavored to pro- 
 vide a way for the adoption of a true banking principle 
 in the issue and circulation of bank notes. I have also 
 endeavored to provide for such an extension of banking 
 in remote districts through the establishment of 
 branches as may overcome the prejudice of ignorant or 
 uninformed people against banks and bankers by ena- 
 bling them to learn for themselves that the bank or 
 banker who conducts the business under safe conditions 
 is the next friend of the farmer, the manufacturer and 
 the mechanic alike ; rendering to all a most valuable 
 service in consideration of a reasonable profit which 
 such banks and bankers may secure in the conduct of 
 their work, either as banks of deposit or by the issue 
 of notes. Consistently with these motives and consid- 
 erations I have endeavored to make what I believe to 
 be the true banking principle as plain as it may be 
 made, by pointing out what I believe to be errors or 
 delusions and thus removing much of the complexity 
 with which the subject has been obscured. 
 
 The object of this paper is therefore to bring four 
 main points into conspicuous notice. 
 
 1st. How impossible it is for the government to 
 provide or supply money for the transaction of busi- 
 ness. 
 
 2d. How safely, surely and simply the community 
 will supply itself with all the money that it can use, 
 provided it is left as free from legal restrictions as pos- 
 sible. 
 
 3d. That the safest custodians of the business of the 
 
C3<4 SILVER AND GOLD. 
 
 country, including banks, are the men who conduct the 
 commerce of the country. 
 
 4th. How surely a safe supervision will be exerted 
 over bank note issues by banks and bankers themselves, 
 since upon /hem must fall the greater part of the losses 
 which would ensue from bad methods of banking and 
 from the issue of bank notes of an unsafe kind. 
 
 Bank notes issued consistently with the true prin- 
 ciple of banking must rest whol!}' upon the general as- 
 sets commonly called the business or commercial paper 
 which is discounted by banks. Bank notes secured by 
 a deposit of bonds or mortgages require that the cap- 
 ital of the bank which might otherwise be used for dis- 
 counting business paper shall have been invested in 
 such bonds, thus limiting the ability of the bank to dis- 
 count commercial paper by the amount of capital thus 
 invested. 
 
 Since the enactment of the National Bank Act all 
 the conditions of the country have profoundly changed. 
 Capital has increased enormously, and by means of the 
 railway express and telegraph services the whole coun- 
 try may be said to have become a unit for banking pur- 
 poses. 
 
 The present quick and ready communication through- 
 out the country would now render the issue of bank 
 notes, redeemable under what was known as the old 
 Suffolk Bank system of redemption in New England, 
 as safe and sure as that system then was prior to 1861 
 and as the Canadian system, which is analogous to it, is 
 at the present time. 
 
 It is an axiom in banking that the consumption of 
 the goods or commodities of which bankable paper is 
 the transferable title, is the source of the power for 
 
EDWARD ATKINSON 335 
 
 paying cL^ representative note, draft or bill of exchange 
 which the bank has discounted. About one-half the 
 business of this country consists in the production, 
 conversion and final sale for consumption of articles of 
 food. This consumption of food cannot stop even in 
 the hardest of hard times, because the most productive 
 country is always within about one year of starvation 
 hence it follows that bank notes issued and circulated 
 in farming districts, i. e., notes, drafts and bills of ex- 
 change which are representative of the production and 
 distribution of the products of the farm, as well as 
 credits granted to market men, grocers and other deal- 
 ers in food material, may or must be sure of prompt re- 
 demption if due care is exercised in granting such 
 credits. The very prompt payment of this class of 
 paper was very noticeable during the recent panic. A 
 large part of the food cannot be kept long and each 
 year's product must be almost wholly consumed in any 
 given period if not exceeding twelve months. On the 
 other hand, notes or drafts representative of whiskey 
 might be slower of redemption because the liquor im- 
 proves by age. If a separate series of bank notes 
 were issued year by year specifically secured on each 
 year's product of whiskey, redeemable at its market 
 value equivalent to and proportionate with age, such 
 notes would gradually become worth a premium as each 
 series became of older date. Whiskey notes thus re- 
 deemable would be in marked contrast to silver notes 
 issued on a bullion purchase or deposit. Had United 
 States notes been redeemable only at the market value 
 of the silver bought by the government since 1878 
 they would now be 4p><uated one -half. The fear of 
 
336 SILVER AND GOLD. 
 
 this loss has lately promoted a most wholesome demand 
 for the redemption or funding of these notes. 
 
 No private banker or incorporated bank woulv ever 
 have issued its notes upon such a poor security as 
 silver. Neither would any private banker or incorpo- 
 rated bank have ever placed itself in the grotesquely 
 absurd position in which a series of incapable con- 
 gresses have put the treasury of the United States. 
 The government has issued its promises to pay on de- 
 mand for a little less than $500,000,000 for the pur- 
 chase of silver bullion and for the conversion of "trade 
 dollars," which it now holds in its vaults under condi- 
 tions which forbid its use or sale. The only resource 
 of the government for the redemption of these notes is 
 therefore through the exercise of its power of taxation. 
 When for a time the revenue from taxes becomes in- 
 sufficient for such redemption it must borrow on inter- 
 est-bearing bonds in order to defer payment for a time 
 without recourse to the silver, as it has done. 
 
 In support of the theory that a true and safe banking 
 system for supplying small notes for circulation from 
 hand to hand, based on general assets consistently with 
 the "banking principle," certain very close estimates 
 of possible loss will now be submitted. From the best 
 analysis, tested in many ways, that I have been able to 
 make, I have become satisfied that the average annual 
 product of the people of this country per capita is now 
 in excess of what $200 in gold will buy at retail prices 
 in one year. That was my conclusion in 1880. This 
 per capita estimate would make the total annual prod- 
 uct of 1894 nearly $14,000,000,000 worth of food, 
 fuel, fibres and fabrics of every kind. Substantially 
 one in three of the population is occupied in gainful 
 
EDWAfcD ATKINSON. 337 
 
 pursuits, each one sustaining two dependents OB We 
 average. At the estimate of $200 worth peL capita, 
 the average proportion of our annual product falling to 
 each person occupied for gain would come to $600 
 worth if it were distributed uniformly per capita at 
 retail prices. 
 
 Out of this product the National, State and municipal 
 taxes take substantially $12 per head, or 6 per cent, of 
 the product on which share those who do government 
 work are sustained. The additions to the wealth of 
 the country on the very careful estimates of the Census 
 Department in the last decade were in ten years $130 
 per capita, of which probably more than $30 repre- 
 sented the rise in the value of land. The remainder 
 was the share of the product added to capital at the 
 average rate of $10 a year per capita, or 5 per cent, of 
 the computed product. 
 
 This estimate does not cover the entire gain in 
 wealth, which is made apparent by the computations. 
 It is the measure of the gain in the average capital per 
 head, upon the basis of the census figures, which are 
 doubtless as near the mark as it is possible for such ap- 
 proximate estimates to be. The population of 1890 
 computed at 62,622,250 shows a gain of 12,466,467 over 
 the population of 1880, which was 50,155,783. The 
 population added in the decade had, therefore, attained 
 property to the average amount of 1880, to wit, $870 
 per head. In addition to this, the whole population of 
 1890 possessed an average valuation of $1,000 per head 
 a gain of $130 each, including the whole number enu- 
 merated in 1890. It is this gain in wealth which I 
 have divided by estimate, as laud valuation $30, rail- 
 roads, canals, buildings, public and private, furniture, 
 
338 SILVKfc ANl> GOLD. 
 
 mines, machinery, tools, implements and products on 
 the way from producer to consumer $100 on the average 
 to each person. It is this addition to capital which 
 comes to $10 a year and which represents a daily con- 
 tribution of each person to the capital added in the decade 
 of 2.74 cents a day to this increase. What the bearing 
 of this is upon the question of the distribution of the 
 annual product will presently appear. 
 
 In view of the rise in the rate of wages between 1880 
 and 1890, the lessening margin of profit and the reduc- 
 tion in the rate of interest, it is plain that the average 
 product increased arid probably amounted in 1890 to 
 what $225 a year would buy at retail prices, or $200 
 free of taxes and of contributions to capital. These 
 problems become more easily comprehended when re- 
 duced to terms per day. 
 
 If this computation of $225 is approximately correct 
 the annual product of 70,000,000 people would possess 
 a valuation at retail prices of $15,750,000,000. This 
 product is the subject of trade and commerce less what 
 is consumed directly by those who produce it. It is 
 our provision for shelter, food, fuel, clothing and other 
 material wants. 
 
 This product which is the subject of commerce be- 
 comes more comprehensible when reduced to terms of 
 daily demand and supply. Two hundred and twenty- 
 five dollars' worth divided by 365 days comes per day 
 to 6191c 
 
 $12 assigned to taxation comes to . . 3.29 
 
 $10 added to capital comes to . . . .2.74 
 
 .603c 
 
 Remainder . . 5588c 
 
EDWARD ATKINSON. 339 
 
 This remainder may be held to represent the average 
 expenditure of the mass of the people for other pur- 
 poses than taxation and additions to capital, as for 
 shelter, food, fuel, clothing and sundries. 
 
 Assuming a basis of one in three occupied for gain 
 this sum of .5588 cents per day represents an income 
 and expenditure of $1.676 per day, which sum multi- 
 plied by 365 days comes to $611.77 per year, to each 
 person occupied for gain and two dependents. A com- 
 parison of this estimate with the average earnings dis- 
 closed by the census and by Commissioner Wright's re- 
 ports goes far to sustain the very close approximation 
 of these figures to the facts. 
 
 It is a startling fact that great as the product of this 
 country is far greater ratably than that of any other, 
 yet the average person must be sheltered, warmed, 
 fed and clothed from what 55 to 60 cents a day will buy 
 at retail prices. Yet that is the measure of all there is 
 produced at my estimates, which are very much higher 
 than those of most students. When I have endeavored 
 to prove that adult men and women can secure com- 
 fortable rooms, well warmed and lighted, adequate 
 clothing and full nutrition in the city of Boston on an 
 expenditure of not over $200 a year, my statements 
 have been received with incredulity or derision, and 
 sometimes with obloquy and personal abuse, yet there 
 is a vastly greater number of people in the United 
 States that have less than that sum to spend than there 
 are who have more. 
 
 Whether these computations are exact or not thny 
 are sufficiently near to serve as a good working hypoth- 
 esis in the subsequent analysis of the trade of the 
 country and its connection with banking. 
 
840 SILVER AND GOLD. 
 
 Assuming, as I think we safely may, that the prod- 
 net is now sufficiently in excess of $200 worth per 
 head to meet taxation and additions to capital, there 
 would remain $200 worth per head on the average to 
 be expended or consumed by each person. This ex- 
 penditure would be in about the following proportions: 
 $90 to $100 for food, fuel and light; $25 to $40 for 
 clothing, carpets and other textiles; $25 to $40 for 
 rent, and the remainder for sundries; each person shar- 
 ing this product by the measure of his earnings, wages, 
 profits or other modes of distribution. 
 
 A part of the food supply is consumed where it is 
 produced. We may estimate that at $30 worth per 
 head, which would be a very large average proportion of 
 the food which is not bought and sold. There remains 
 $170 worth of food, fuel, fibres and fabrics, which are 
 the subjects of commerce that is to say, of purchase 
 and sale. 
 
 Let any one consider the known facts as to the deal- 
 ings in these materials. For instance, a credit is 
 granted by a storekeeper to the grower of cotton in 
 the South at very exorbitant charges ; the storekeeper 
 really being the banker of the community, where banks 
 and bankers are subjected to prejudice and suspicion, 
 and therefore cannot safely serve the community. The 
 storekeeper having granted a credit to the grower sells 
 the bale of cotton to the dealer, he then buys his goods 
 on credit, longer or shorter, the dealer sells the cotton 
 tr the factory, the manufacturer sells the cloth directly 
 or through a commission merchant to the converter or 
 to the jobber, finally it is sold again in the form of 
 clothing. All these transfers or conversions are worked 
 by separate bargains and sales, each one of which is 
 
EDWARD ATKINSON, 341 
 
 transacted on credit or by passing cash. Western 
 grain is sold by the farmer to the miller or his agent, 
 the flour is sold by the miller to the merchant, by the 
 merchant to the baker; finally the bread passes mostly 
 through shops before it reaches the consumer. The 
 great number of conversions of timber and metal into 
 buildings, machinery, etc., are to be considered. So it 
 is in every branch. Every trade, bargain or conversion 
 from the crude to the finished product involves a pur- 
 chase and sale ; it is therefore worked by the use of 
 instruments of credit or transferable titles, such as 
 notes, drafts, bank credits and bills of exchange. It is 
 conducted in least proportion by the passing of cash in 
 some for.n or lawful money. 
 
 There is another set of monetary transactions in the 
 work of transportation. During the last year which I 
 analyzed, I think it was 1892, 22,000 pounds of food, 
 fuel, fabrics and fibres were moved 110 miles by steam 
 railways only, for every man, woman and child of our 
 population, taking no account of transportation by 
 rivers and canals. Retail transportation by wagons 
 costs more than wholesale transportation by railway. 
 It costs more to distribute loaves of bread through 
 shops and by bakers' carts than any other element in 
 the cost of bread. Here again are bargains and sales 
 in almost infinite number. 
 
 Now, if we estimate only three transactions on only 
 $170 worth of food, fuel, fibres and fabrics to each per- 
 son, the trade of the country, which is worked in great- 
 est measure by instruments of credit or negotiable 
 titles, and in least proportion by the passing of cash, 
 comes to over $500 per head each year. We now 
 number 70,000,000 people. At three conversions only 
 
342 SILVER AND GOLD. 
 
 from producer to consumer, the volume of our mercan- 
 tile transactions would come to 135,000,000,000 a year. 
 It is probably much more. 
 
 All the wholesale transactions and a large part of the 
 retail trade are conducted by instruments of credit or 
 negotiable titles, Lnown as notes, drafts, bills of ex- 
 change and checks, or on book accounts or credits 
 granted by retail dealers ; a part of the retail trade only 
 is conducted by what is called cash, i, e. by the use of 
 small notes and small change, 
 
 The demand for more money in legal tender notes or 
 silver dollars is made by persons who have no concep- 
 tion of the true conditions of trade. In their mis- 
 directed efforts to provide by legislation for the issue 
 of fiat money or by the free coinage of silver, they have 
 created distrust and have thereby brought on a panic 
 accompanied by a partial paralysis of trade, thus reduc- 
 ing prices by their very effort to increase them. 
 
 It is the function of banks and bankers to deal with 
 these transferable titles or representative instruments 
 of the exchange of property. Banks do not deal in 
 money. The notes, drafts, bills of exchange and bank 
 deposits are representative of the property passing by 
 title in money from the producers to the consumers. 
 These instruments of credit are adjusted in amount to 
 the quantity and value of the property of which the 
 titles in terms of money a**~ in process of exchange. 
 This process is automatic. A. small proportion, esti- 
 mated variously at from 5 to 10 per cent, of these 
 transactions, is conducted by the use of bank notes, 
 legal tender notes, or small bills of various kinds and 
 specie or small change, ninety to ninety-five per cent 
 without the passing of any money from hand to hand. 
 
5 
 
 HORACE BOIES, 
 
EDWARD ATKINSON. 345 
 
 Keeping in mind the magnitude of these transactions, 
 the figures of mercantile losses of the last three years 
 give a clue to the proportion of losses by mercantile 
 failures on all discounts of business paper incurred by 
 banks and bankers, merchants and traders. Of course 
 we have no clue in these figures to the losses of retail 
 dealers from default of payment by their customers, 
 when the dealers do not fail themselves, but we have a 
 very close measure of the losses on the larger transac- 
 tions in which banks and bankers are concerned. 
 
 On the " Bradstreet's " figures lately published, the 
 losses in 1894 by mercantile failures were $80,000,000, 
 a very large sum when considered as a unit, but a 
 very small fraction when considered in proportion to 
 the total transactions. This loss computed on a trade 
 of 135,000,000,000 comes to only 22 86-100 per $100, or 
 less than a quarter of 1 per cent. The losses in the panic 
 year were $163,000,000, double those of 1894, but yet 
 less than a half of 1 per cent, on the total trade. In 
 1892 the losses were $60,000,000, or less than a fifth of 
 1 per cent, on the trade of that year, which was con- 
 ducted under normal and safe conditions before the 
 danger of national discredit had become apparent to the 
 multitude. 
 
 From these figures one can judge of the absolute se- 
 curity of a banking system in which prudent bankers 
 deal with transferable titles to this great volume of the 
 necessaries, comforts and luxuries of life in monetary 
 terms established on a stable unit of redemption. The 
 losses by bad debts in the wholesale traffic in a very 
 large number'of establishments with which I happen to 
 be personally familiar, have not been a tenth of 1 per 
 cent, per annum during the last ten years. Hence it 
 
 20 - 
 
 0? TiDS 
 
846 SILVER AND GOLD. 
 
 follows that no well managed bank loses a quarter of 1 
 Der cent, per annum under a sound monetary system, 
 or 25 cents per $100 on its discounts of mercantile 
 paper. The government attempts to exert no super- 
 vision over these titles to property in the form of notes, 
 drafts and bills of exchange which are discounted by 
 banks ; if the government attempted any such super- 
 vision it would be a futile waste of effort. 
 
 Such being the facts, what bond or security of any 
 kind can be equal to this great volume of bankable 
 paper, which constitutes the chief elemenfof bank as- 
 sets, representative of commodities of which the con- 
 sumption assures the redemption of such small notes as 
 may be needed for the conduct of a part of the final re- 
 tail traffic of the country ? Yet, because these notes 
 have the semblance of money some additional protec- 
 tion may be given to holders by rendering stockholders 
 liable and by making these notes which possess a sem- 
 blance of money the first lien on the assets of the 
 banks ; but that redemption must be in true money. 
 
 The best definition of true money is that of Henri 
 Cernuschi. the most prominent advocate of what ia 
 called bimetallism. " It is by the ordeal of fire that 
 money may be tried. The coins which, being melted 
 down, retain the entire value for which they were legal 
 tender before being melted down, are good money. 
 Those which do not retain it are not good money." 
 
 Little more can be needed to secure redemption in 
 these days of clearing-house? end telegraphs than the 
 quick and close supervision rf one bank over another 
 through the clearing-house. No " wild cat " bank 
 could possibly put " wild cat ' notes into circulation 
 under present conditions. 
 
EDWARD ATKINSON. 84T 
 
 Measures would at once be taken by bank associa- 
 tions or clearing-houses by which the prompt redemp- 
 tion of bank notes could be as absolutely assured as it 
 was formerly in New England under the Suffolk sys- 
 tem in Boston, and is now in Canada. Under this sys- 
 tem the government would soon be rapidly divested of 
 any connection with the supply of the currency, except 
 the supervision of the clearing-houses by the Comp- 
 troller. 
 
 It has become evident that whenever a safe and suit- 
 able bank note currency is permitted to be supplied by 
 banks, which will adjust itself automatically to the 
 business of the country, the demand notes of the United 
 States now circulating by force will be presented for 
 redemption or funding, thus divesting the government 
 of any connection with the issue of notes and taking it 
 out of the business of banking for which it is unfit. 
 
 The Administration now holds complete power for 
 the redemption of these notes by the issue of 5 per 
 cent, bonds under the resumption act. Public opinion 
 is becoming so rapidly concentrated on the lines of 
 sound banking and sound money as to make it very 
 certain that the next congress, whenever it meets, will 
 obey the public mandate on these lines without much 
 regard to mere party lines. 
 
 There are many matters of detail which net, I not be 
 treated at length. The writer is profoundly convinced 
 that he has underestimated the sum total of the bar- 
 gains and sales or mercantile transactions which are 
 necessary to the distribution of our annual product. 
 The volume of trade, aside from real estate, stocks and 
 bonds, doubtless comes to over $100,000,000 a day for 
 every day in the year, including holidays and Sundays. 
 
348 SILVER AND GOLD. 
 
 In such case the proportion of losses from bad debts on 
 mercantile transactions in the necessaries, comforts and 
 luxuries of life comes to less than the proportion which 
 has been indicated. If it be true that even in a panic 
 year the losses by mercantile failures have been less 
 than a half of 1 per cent, on the total volume of 
 transactions, then a tax of one-half of 1 per cent., im- 
 posed through the clearing-houses and held by the 
 Comptroller of the Currency for their protection, would 
 be far more than ample for the ultimate redemption of 
 all notes issued by all banks authorized to issue them. 
 An additional tax of one -half of 1 per cent., making a 
 total tax on circulating notes of one per cent., would 
 be equitable in consideration of the supervision of the 
 government through the clearing-houses. If the reve- 
 nue and redemption tax on bank note circulation were 
 thus limited to 1 per cent., without other restrictive 
 provisions, like the deposit of bonds or legal tender 
 notes or other unnecessary security, the whole capital 
 of the banks would be available for business purposes, 
 and the profit on the circulation in excess of 1 per 
 cent, would be quite sufficient to induce the creation 
 of a volume of bank note currency which would auto- 
 matically adjust itself to the conditions of business year 
 by year ; such a currency would also adjust itself to 
 the variation in trade season by season in each year. 
 Under the present conditions of compulsory reserve on 
 deposits and investment of capital in bonds, the bank- 
 ing community is legally forbidden either to extend 
 support to merchants or its note circulation at the very 
 time when both are most needed. On the other hand, 
 banks may be, and often are, oppressed by the accu- 
 mulation of government notes which cannot be used 
 
EDWARD ATKINSON. 849 
 
 except in unwholesome speculation at the period when 
 there is little or no call for small note circulation. 
 
 A single very superficial objection to the State bank 
 issue of notes is that travelers might be forced to take 
 bank notes in change which could not be used when 
 outside of the section in which that bank happened to 
 be situated. A simple reference to the very extensive 
 system and use of travelers' checks and money orders 
 issued by the American Express Company and others, 
 gives the clue to the ready method in which all these 
 petty objections can be met. The American Express 
 Company and others which issue checks have some- 
 thing like 6,000 branches. Their travelers' checks are 
 convertible into cash that is in customary use in every 
 part of this country, and in nearly every part of Eu- 
 rope at these branch offices. Other express companies, 
 such as the Wells Fargo Co., the Adams Express Com- 
 pany, and many others, issue money orders. The total 
 number of branches at which these checks and orders 
 can be cashed number over 20,000. 
 
 In fact, these travelers' checks, issued by express 
 companies payable not only in all parts of this country 
 but in many parts of Europe, are also convertible into 
 the cash of other countries, not only at regularly estab- 
 lished agencies, but at hotels, railroad stations, etc., in 
 many parts of the world. The printed supplement to 
 the United States' list of the correspondents of the 
 American Express Company, where their checks may 
 be converted into the cash of the country, includes 
 niany places in Asia, Africa, Mexico, South and Cen- 
 tral America and the West Indies even in Jerusalem. 
 
 Vny change in our banking methods might be rightly 
 accompanied by permission to the great city banks to 
 
350 SILVER AND GOLD. 
 
 establish branches all over the country, wherever they 
 might please, or in specific clearing-house districts. 
 This would tend not only to equalize the rate of inter- 
 est and to carry capital from the congested centers in 
 the cities to the very confines of the country, as this 
 system does in Scotland. It would tend to remove all 
 objection that can be raised in respect to the circula- 
 tion and ready redemption of State bank notes. If ex- 
 press corporations find it for their interest to issue 
 checks and money orders and conduct their business 
 with safety in the service of those who choose to avail 
 themselves of it, the question may well be asked why 
 banks should be deprived of the same privilege which 
 would work a service in the distribution of their more 
 ample capital as much greater as their functions and 
 capital are greater than those of an express company. 
 
 The eleven great banks in Scotland have, I believe, 
 over 1,000 branches in that small State of a little over 
 4,000,000 people. The thirty-eight Canadian banks 
 have 460 branches, extending from Halifax on the east 
 to Vancouver Island on the west coast. 
 
 What but profound ignorance and jealousy of banks 
 and bankers prevents the people of this country secur- 
 ing the same service with the corresponding benefits 
 in the wide distribution of capital and in equalizing 
 the rates of interest thereon ? 
 
 The deductions which must ensue from these prem- 
 ises, if they are approximately correct, may be stated 
 in the following terms : 
 
 1st. There must be a lawful unit of value which 
 will serve as the standard of all transactions, bargains, 
 sales and exchanges. 
 
 2d. Duality in a unit is unthinkable. 
 
feDWAKD ATKINSON. 85i 
 
 Sd. The present lawful single standard or unit of 
 value of the United States is a dollar made of gold. 
 
 4th. Legal tender acts work by forcing a substitute 
 for the lawful unit of value into circulation which 
 when not instantly convertible or redeemable at the 
 standard of the lawful unit become distrusted and pres- 
 ently depreciated. 
 
 5th. As wealth and intelligence increase, the ex- 
 change of services and products in which commerce 
 consists is augumented much more rapidly than ih? j 
 growth of population. 
 
 6th. With this growth of commerce the use of in- 
 struments of credit in place of coin is also greatly in- 
 creased, while the circulation of the coin, which is the 
 unit of value, is reduced. 
 
 7th. The right of place for the coin which is the 
 unit of value is in the reserves of banks and bankers, by 
 whom the titles to exchangeable products are discounted 
 and by whom credits are granted. 
 
 8th. It would be impossible for the government of 
 the richest nation to supply coined money sufficient for 
 the whole work of commerce. A much less sum may 
 always be available in ample measure for prompt re- 
 demption. A rich nation will always supply itself with 
 all the coin of the highest standard that it can possibly 
 use in sustaining its instruments of credit. 
 
 9th. There is no international legal tender, therefore 
 foreign exchanges are now adjusted to the pound ster- 
 ling, which is the name or title given to one hundred 
 and thirteen grams of gold, the equivalent coin being 
 named sovereign. 
 
 10th. The effort of the advocates of the free coin- 
 age of silver, or of the issue of government legal ten- 
 
852 SILVER AND GOLD. 
 
 der paper and other devices for supplying money, may 
 be attributed to their ignorance of the function of 
 credit and of the necessity for an established unit of 
 value. Their efforts are usually accompanied by bitter 
 prejudice against banks and bankers. The invariable 
 result of any success on their part is a paralysis of in- 
 dustry by which prices are forced below cost and the 
 compulsory idleness of large numbers of workmen en- 
 sues. These results, long before predicted, were fully 
 realized in the purely financial panic of 1893, and will 
 be brought about again sooner or later unless the delu- 
 sion for " cheap money " is crushed out. Another re- 
 sult of this delusion is found in the condition of the 
 specific states from which these misrepresentatives are 
 sent to congress. They remain relatively poor and un- 
 progressive because the public credit of the state is dis- 
 trusted as well as the private credit of the citizens. 
 
HON. CHARLES FOSTE* 
 
 CHAPTER XVI. 
 
 BY CHABLES FOSTER, OF OHIO, EX-SECREt.lBY OF 
 TREASURY. 
 
 I DO not concede that there is any serious trouble 
 with our currency as it stands at present, every dol- 
 lar of which is the equal of every other dollar ; and 1 
 see no great difficulty in maintaining this condition, 
 simply at the cost of maintaining a sufficient gold re- 
 serve. But, in my opinion, the time has come when 
 legislation upon the currency question should be had 
 upon broad lines. The time has come when our float' 
 ing debt (I mean the treasury notes, both old and new) 
 should be funded and paid, and that all of the papef 
 currency of the country should consist of national bank 
 notes. 
 
 My suggestion is, that the government authorize the 
 issue of two and one-half per cent, bonds, in amount 
 sufficient to take up the five hundred millions of new 
 and old treasury notes ; that these bonds be available 
 to the banks upon which to base circulation ; that the 
 banks should be permitted to issue circulation up to 
 the par of the bonds, and in amount equal to their cap- 
 ital and surplus, and that only a small tax should be 
 placed upon the banks to pay the government for its 
 expenses for printing the notes, and its oversight of 
 them. 
 
 To give the elasticity that is so much desired, I think 
 it would be well to authorize all clearing-houses to ia- 
 
354 SILVER AND GOLD. 
 
 sue clearing-house certificates, in emergencies, at tha 
 discretion of the clearing-house committee, upon the 
 pledge of unquestioned collateral. I would also sug- 
 gest that the comptroller, with the approval of the Secre- 
 tary of the Treasury, be empowered, when ao emergency 
 arises, to issue to such banks as apply, what may be 
 called emergency circulation, to a limited extent of their 
 capital and surplus (say twenty five per cent ), upon 
 such pledge of collateral as shall be satisfactory to him. 
 
 A tax of 1 to 3 per cent, might be charged upon 
 such notes, to create a fund for the redemption of the 
 emergency notes of failed banks. No reserve to be 
 required for such emergency notes. The good assets so 
 named, to be held as security for the redemption of cer- 
 tificates so issued. If it should be found practicable, 
 which I doubt, for a clearing-house district to be so 
 formed as will enable it, within its own jurisdiction, to 
 engage in the business of authorizing the issue of cer- 
 tificates, I can see no objection to giving such authority. 
 When conditions change, the circulating notes are to 
 be paid off first, and, secondly, the clearing-house cer- 
 tificates. 
 
 The notes should be a first lien upon all the assets 
 of the bank. To avoid any question as to the ultimate 
 payment of any circulating note, the government itself 
 should guarantee their redemption. There can be but 
 little risk to the government in any event, and it is bet- 
 ter, even if the government should lose something by 
 this guarantee, than that there should be any question 
 as to the soundness of the notes themselves. These 
 emergency notes should have some distinguishing mark 
 printed upon them, to distinguish them from the regular 
 issues. 
 
HON. CHARLES FOSTER. 355 
 
 If this plan of finance should be adopted and con- 
 summated, the total amount of United States bonds 
 outstanding would be about 11,300,000,000. To cover 
 the bank note circulation now outstanding and make 
 good the withdrawal of $500,000,000 of treasury notes 
 by an equal increase of bank notes, would require 
 $700,000,000, leaving $600,000,000 for further use as a 
 basis for circulation. The increase of bank notes should 
 at all times practically keep pace with the retirement 
 of the treasury notes. 
 
 The $600,000,000 of bonds yet unused will, for the 
 time being, furnish a sufficient basis for the farther is- 
 sue of notes, so that the question of furnishing a sub- 
 stitute for bonds as security for bank notes is not at 
 present important. When the time comes that bonds 
 are no longer available for this purpose, there can be no 
 doubt that a practical substitute can be found. 
 
 I have suggested that the banks be authorized to is- 
 sue notes equal to their capital and surplus. This sug- 
 gestion is prompted by the fact that the total surplus 
 exceeds the capital, and in some banks the surplus ex- 
 ceeds many times their capital. The banks should be 
 required to keep at least one -third of their reserve in 
 gold. If this plan be adopted, the volume of emergency 
 notes and clearing-house certificates could be availed of 
 to so great an extent as to allay the fears of the most 
 timid as to any scarcity of money or even of credits 
 
 A gentleman holding high official position in the 
 present administration, has said that the government 
 has no more concern over the deposits in national 
 banks than it has over wheat stored in a public elevator. 
 If this be true, as the bank notes are amply secured, 
 why does the government exercise supervision over the 
 
356 SILVER AND GOLD. 
 
 
 
 banks } What is the object of this supervision, if it is 
 not to use the utmost efforts of the government to se- 
 cure sound banking, to keep the banks within safe, 
 prescribed lines ? If this is not protecting depositors, I 
 wholly misunderstand its object. 
 
 These banks having been authorized by congress, it is 
 the plain duty of the government to use its best efforts 
 to protect the public in all their dealings with institu- 
 tions so authorized. 
 
 If a system of currency legislation such as is here 
 briefly and imperfectly outlined, were adopted, then 
 the paper currency of the country would be only the 
 notes of the national banks. There would then be no 
 necessity for the government's maintaining a gold re- 
 serve of any amount. This being accomplished, it 
 seems to me that the government might then undertake 
 the purchase of all of the American product of silver, 
 and coin it, or permit the holders free coinage of the 
 American product, the seigniorage to go to the govern 
 ment. 
 
 As it will take, according to well-authenticated 
 figures $800,000,000 to transact the retail business of 
 the country, the present stock of silver can be utilized 
 for this purpose. If all this business is done with sil- 
 ver, $300,000,000 in addition will be required. It is 
 sought to do this by limiting the issue of bank notes t<? 
 denominations not less than $10 or $20. 
 
 The treasury would be relieved from the task of 
 maintaining a gold reserve. Silver being a legal tender, 
 the banks could not be denuded of their gold. When 
 gold was wanted for export, the exporter would then 
 get what he wanted by negotiating with those who 
 had it. In other words, our condition would not be 
 
HON. CHARLES FOSTER. 857 
 
 that of inviting gold exports, as is the case at pres- 
 ent. 
 
 It has been suggested that hereafter no bank notes or 
 circulating medium in the shape of paper, should be of 
 less denomination than ten dollars. The purpose of 
 this is to compel the circulation of silver for all of the 
 small transactions of the country, which it is estimated 
 would require $800,000,000. I doubt very much 
 whether the requirement would be so great, but that is 
 not a matter of importance. I no not see any special 
 benefit in compelling the circulation of silver dollars. 
 I would agree with the plan so far as to say that no 
 bank note should be issued of a denomination less than 
 ten or twenty dollars. But I can see no reason why 
 this inhibition should apply to silver certificates. The 
 certificates simply represent the silver in the vaults of 
 the treasury. It is much preferable, in the daily 
 transaction of business, to handle the notes, than it is 
 to handle the silver. And then, again, there would be 
 no abrasion or loss of silver. There are seasons of the 
 year when the West and South need small bills to move 
 the crops. If that suggestion prevails, then a large 
 additional cost is imposed upon the public for trans- 
 porting and handling the silver; and it must be re- 
 membered that when this currency has fulfilled its 
 mission, it is returned again. The end is practically the 
 same, viz : the compulsion of the use of silver for all 
 the small transactions of the country. 
 
 I would also modify the sub-treasury act so as to 
 permit the Secretary of the Treasury to deposit the 
 moneys of the government with the banks, taking gov- 
 ernment bonds as security, as is done now with re- 
 ceipts of internal revenue in many places. A small 
 
858 SILVER AND GOLD. 
 
 rate of interest might be charged the banks. If this 
 were done, the money of the government would be in 
 the hands of the people for daily use, and would add to 
 the present volume something like 150,000,000. If, 
 in addition to what is here suggested, a national clear- 
 ing house would be established, so that gold need not 
 be constantly carried back and forth across the Atlan- 
 tic, an enormous improvement in financial and cur- 
 rency conditions will have been achieved. 
 
 
SENATOR FRED, T. DUBOIS. 359 
 
 CHAPTER XVII. 
 
 B* SENATOR FRED. T. DUBOIS, OF IDAHO. 
 
 IT is very evident to the most easual and indifferent 
 observer that the cause of silver is gaining ground 
 every hoar. This is apparent in Germany, England 
 and all the gold-standard countries of Europe, as well 
 as in the United States. The most rapid progress and 
 the crystalization of sentiment is more marked in the 
 United States, to be sure. The reasons for the change 
 of sentiment are easily understood. Distress and hard 
 times are general throughout the world. There is a 
 prevailing opinion among producers and wage -earners 
 that the era of falling prices and consequent depres- 
 sion in all lines of trade has been brought about by the 
 adoption of the gold standard by the leading nations of 
 the world. Nothing is of stable value now save good 
 gold mines and gold money. There are not many of 
 the former, and the owners of gold money as a rule do 
 not live in the United States. 
 
 The great majority of the people of this country 
 understand, I think, that with gold as the sole standard 
 of money that metal is appreciated and all things 
 which it measures in value are depreciated. It is boy- 
 ish and unworthy of men who undertake to direct 
 public sentiment to say that silver has not been demon- 
 etized. To say that silver is still in use and in large 
 quantities in the United States and that it is maintained 
 on a parity with gold is a beggiug of the entire mone- 
 
360 SILVER AND GOLD. 
 
 tary question which is entirety unworthy of some dis- 
 tinguished gentlemen who have lately expressed them- 
 selves. There must be basic money. On this other 
 moneys rest. There must be a money of ultimate re- 
 demption in order to insure absolutely safe currency. 
 It is a serious question whether there is or can be 
 enough of both gold and silver to supply this basic 
 money. When both were used, prior to 1873, they 
 seemed to answer the purpose and remained at a ratio 
 of about 15| ounces of silver to 1 of gold. The 
 prices of labor, of wheat, cotton, corn and other prod- 
 ucts were maintained. 
 
 When silver (which comprised one-half of the basic 
 money) was demonetized, when it was no longer recog- 
 nized as the equal of gold at the mints, but was made 
 a commodity the same as coffee, it fell in value as com- 
 pared with gold, until now it is as about thirty-two 
 ounces of silver to one ounce of gold. The significant 
 fact, however, that wheat and corn and cotton and the 
 value of all other products, as well as the price of 
 labor, has fallen with silver is what creates the great 
 demand for the restoration of silver as basic money. 
 
 I have the greatest respect for many of the able sil- 
 ver advocates in the United States who do not see their 
 way clear to unlimited coinage by our country acting 
 alone. I myself cannot see how we are to secure bimet- 
 allism unless the United States takes the initiative. 
 England is a creditor nation. The gold standard makes 
 money scarce and dear. This is to the advantage of 
 England and she will rret consent to tbe addition of 
 silver as redemption money unless she is compelled to. 
 I have no hopes of any international agreement until 
 after this government adopts free coinage. England 
 
JAMES H. ECKELS, 
 
SENATOR FRED. T. DUBOIS. 868 
 
 aim the other great nations of Europe will then be 
 compelled to join us or lose their commercial suprem- 
 acy. 
 
 The minute the United States adopts free coinage at 
 the ratio 15J or 16 to 1 the price of silver will be regu- 
 lated throughout the world. No one who has given 
 the subject serious thought or who has any regard for 
 his reputation as a student of finance attempts to argue 
 any longer that the restoration of silver by the United 
 States acting independently would cause the country 
 to be flooded with silver from foreign nations. This 
 country could not be a " dumping ground " for silver for 
 the simple reason that there is no nation which does 
 not absolutely need all the silver which it has. There 
 is no loose silver anywhere to come here. There will 
 be no object in foreign countries sending silver here, 
 even if they had it to spare, because it would be worth 
 as much in each of the foreign countries as here and 
 they would lose by sending it here what the cost of 
 transportation would amount to. 
 
 Some claim that with free coinage all the gold will 
 leave this country. What if it does ? Where will it 
 go to? Admit for the sake of argument that it will go 
 to England. The volume of the money in England 
 will increase to that extent, with the result that the 
 price of our products which we sell in England will be 
 enhanced and England will find it impossible to retain 
 the gold. 
 
 It has been demonstrated clearly that gold cannot be 
 retained in this country under the present condition 
 of affairs. The government is absolutely at the mercy 
 of any syndicate of rich bankers who desire to take it 
 out of the treasury. All they have to do is to present 
 1 
 
364 SILVER AND GOLD. 
 
 the various forms of currency for redemption and our 
 gold reserve of 1100,000,000 melts away. The exper- 
 ience in this direction has been so recent that every 
 one can recall it. The government has issued over 
 $100,000,000 of new bonds bearing interest in its des- 
 perate effort to maintain the gold reserve of $100,000,- 
 000. It might continue this operation and in that way 
 supply the gold deficit, which is liable to occur at any 
 moment, but these bonds with interest must be paid at 
 some time. This process of borrowing gold with in- 
 terest-bearing obligations cannot continue indefinitely. 
 
 The silver men in the country are very much in 
 earnest. They number a great majority of the people 
 and will, I think, find a way to make their demands 
 effective. 
 
 It looks to me as though both of the great national 
 parties would declare for silver in 1896. In my judg- 
 ment no party can win which endeavors to keep our 
 government fastened to the single gold standard. If 
 both of the leading national parties should be con- 
 trolled by the gold standard advocates, neither of them 
 could elect their candidate. An advocate of silver 
 would then be nominated either in the electoral college 
 er by a separate national convention and elected. 
 
MURAT HALSTEAD. 365 
 
 CHAPTER XVIII. 
 
 BY MURAT HALSTEAD, OF BROOKLYN 
 
 How is the silver and gold question to be settled ? 
 First, we will state what will not occur. Our mints 
 will not be made free markets for silver until h great 
 deal happens that is not popularly contemplated. No 
 free silver bill will become a law ; at least until aftei 
 all the present champions of that radical measure have 
 abandoned its advocacy. 
 
 Nothing important will transpire in an international 
 conference. There will be no congress of nations that 
 Will proclaim unlimited coinage of silver into lawful 
 money without limit until the battle of the standards 
 is practically over, settled by commerce, not confer 
 ences. 
 
 Let us put down a few points to mark the way to a 
 clear comprehension : 
 
 First. No one has ever conspired against silver in 
 this country. The original " Criminal of the Century " 
 was Thomas Jefferson, who, through James Madison, 
 in 1806, ordered the Director of the Mint to cease coin- 
 ing silver dollars, an order that stood for a generation. 
 
 Second. This was not because silver was improper 
 or unsuitable, but for the reason the silver dollar was 
 more valuable under the ratio than the gold dollar, and 
 was exported accordingly. 
 
 Third. Thomas Benton had the same trouble that 
 Thomas Jefferson encountered with silver dollars. The 
 
SILVER AND GOLD. 
 
 coinage of silver dollars was not restrained because the 
 dollars were unpopular or useless, but were too good 
 to circulate. This fact cuts into the extremists on 
 both sides, and will stay and bear an edge. 
 
 Fourth. The silver dollar was still at a premium in 
 1873, when it was dropped by act of congress from 
 the list of coins. The act of congress amounted to 
 the same thing that the act of President Jefferson did, 
 though an act of omission not commission. 
 
 Fifth. Why, then, is not Jefferson the centennial 
 criminal ? Why did not his crime produce all the aw- 
 ful consequences we hear so much about out West and 
 down South ? 
 
 Sixth. The act omitting the silver dollar coinage 
 was not passed secretly. The facts were all fairly 
 stated on the floor of congress, but years passed before 
 the people knew that anything had happened. They 
 did not feel interested and actually their concern was 
 slight. 
 
 Seventh. The fall of silver was not expected, but 
 Germany adopted the gold standard, and the various 
 modern improvements in mining were rapidly increas- 
 ing the product of silver. We had not done anything 
 that influenced the market. 
 
 Eighth. We were approaching the resumption of 
 specie payments, and the popular instinct that it would 
 be well to be thoroughly equipped with both money 
 metals was correct. Specie meant both gold and silver 
 coin, and we could not resume with what we had not. 
 
 Ninth. There had been an immense increase of in- 
 debtedness issues of securities in the paper money 
 period, and of course there should not be removed one 
 of the metals constituting " coin " for the discharge of 
 
MUBAT HALSTEAD. 367 
 
 obligations when we attained the specie that is, the 
 gold and silver basis. 
 
 Tenth. Upon this argument and the belief that the 
 purchase of silver by the government would advance 
 its price, the policy of coining two millions a month, at 
 least, of silver dollars, was established, and its dises- 
 tablishment did not follow until we had broken all 
 records in coining silver, heaping it up by the hundred 
 millions, and had done it all the while on a falling 
 market. 
 
 Eleventh. The difficulty of the decline of silver 
 while the government was taking the bulk of the prod- 
 uct of the mines had not been anticipated. Nobody 
 "demonetized" silver, or wanted to do so, because he 
 thought it was down or would be put down. Our 
 experiences had been from the first that we under- 
 valued silver in comparison with Europe and put so 
 much of it in our coins that they were worth more 
 than their faces called for. 
 
 These are the plain truths of the silver question. 
 They are written in the laws of the land, and the his- 
 tory that gives the reasons for the laws. We have 
 stated the facts without fanciful decoration. There 
 was no secret, no conspiracy, no crime, no wrong done 
 in the silver matter. We reversed the Jeffersonian 
 policy by coining an amount of silver beyond all ex- 
 ample, and that is what is called demonetization. 
 
 If there was any great impolicy in our proceedings, 
 it was in resumption in not going on with paper in 
 not combining the greenbacks and the graybacks, as 
 " the Blue and Gray " were united. We might as 
 well, perhaps, have adopted the Confederate currency 
 at first, as the Confederate tariff at last. But it was 
 
368 SILVER AND GOLD. 
 
 just as natural to us, after the military overthrow of 
 the Southern Confederacy, to press on to fix high 
 credit for the republic among the nations, by paying 
 the national debt largely and making all our money as 
 good as gold as it was for Germany to adopt the gold 
 standard after defeating France, and getting for in- 
 demnity $1,000,000,000. 
 
 Perhaps it would have been better to have printed 
 enough greenbacks to pay the national debt, and to 
 have rushed along the lines of Populistic endeavor 
 and thus to have tried the cheap money patent medi- 
 cine to the full but that was not what the statesmen 
 who had charge of the country after the war thought 
 about it. They held that the Southern Confederacy 
 had experimented sufficiently with unlimited paper 
 money. They believed the southern soldiers were 
 brave the southern generals able for, indeed, there 
 were many things unaccountable on any other pre* 
 sumption but they did not think well of the southern 
 politicians as they appeared in the origin and conduct 
 of the war. 
 
 If we were going into the cheap money business at 
 all, we should have done it right away after the war 
 and to the full extent. The end, of course, would 
 have been the annihilation of credit the impoverish- 
 ment of the many the enrichment of the few. That's 
 the way with paper money inflation. 
 
 The silver controversy is unworthy the intelligence 
 and the integrity of the American people. This free 
 coinage of silver policy is a poor, shabby half-way prop- 
 osition. It is a 50 cent repudiating dodge, or it is 
 sheer craziness. If it does not mean to settle at 50 
 cents on the dollar, what is it fit for ? 
 
MURAT HALSTEAD. 869 
 
 It is said that the demon etization of silver has 
 caused the price of farm products to fall. Well, wheat 
 and cotton have been going up and down lately and 
 silver has not sympathized in the least with their 
 movements, and this is a demonstration of the falsity 
 of the assumption that silver pulls our farm products 
 up and down. 
 
 It is well to have plenty of money, the people say, 
 and so it is, truly ; but as for silver, we have $ 51 0,000,- 
 000 in the treasury, and if the people want a few hun- 
 dreds of millions of silver dollars to jingle in their 
 pockets there they are five silver dollars for each 
 man, woman and child in the United States not in cir- 
 culation. Why do not the people get them out of the 
 treasury and carry them around? Why should we 
 coin any more of them ? More than five hundred mil- 
 lions of silver dollars coined and in pigs in the vaults 
 and staying there from month to month and year to 
 year, ought to be sufficient for the most imaginative 
 silver crank, but they seem only to cause the inflamma- 
 tion of folly. 
 
 The situation is a simple one, and the best thing 
 that can be done with it is to let it alone. The course 
 of events will take care of it. The Director of the 
 Mint reports the output of gold in 1894 to be $172,- 
 000,000; in 1890, the output was $118,000,000; '91, 
 $130,650,000; '92, $146,297,000; '93, $157,228,000, 
 and in '94, a gain of $15,000,000 over '93 the great- 
 est production of gold ever known in the world, and 
 the evidence of continued increase goes on. The 
 Director of the Mint, a constant student of this mat- 
 ter, says the gold product will soon reach $225,000,000 
 
370 SILVER AND GOLD. 
 
 a year more than $18,000,000 a month over $4,000* 
 000 a week. 
 
 There are enormous banking reserves of gold in 
 Europe, and there is a prodigious sum unaccounted 
 for by the money in circulation and by the metal con- 
 sumed in the arts. The people have been hoarding it. 
 Gold has gone into the stockings in Europe and Amer- 
 ica, as silver slumps in Asia. There is no lack of it* 
 but there is no harm in plenty of silver also. 
 
 That the increased production of gold will be influ 
 ential in human affairs is unquestionable. It will favo" 
 particularly the prosperity of Labor. The "World" 
 has a cablegram from Europe that the Rothschilds are 
 in favor of international bimetallism, and the same 
 journal reports Senator Jones of Nevada as saying : 
 
 " The greatest bankers in Europe are in favor of .bi- 
 metallism because they have watched closely for a 
 number of years the increase in gold production, which 
 has been going on steadily for a decade, and have come 
 to the conclusion that a tremendous fall in the price 
 of gold, as measured in the general level of prices, 
 must inevitably take place. This fall they have fig- 
 ured as beginning probably within three years and ex- 
 tending indefinitely.'* 
 
 This is going too far, but it is in the nature of sug- 
 gestions that are of importance. The addition of at 
 least $200,000,000 of gold each year will cause a gold 
 inflation, but the bankers are not prepared to fall back 
 on silver as the more steady metal. That shift cannot 
 be turned, but it is true that the Rothschilds have been 
 interesting themselves in the African gold mines, and 
 willing to favor an increased use of silver, but outside 
 of this country in the gold countries no one advocates 
 
MTTRAT HALSTEAD. 371 
 
 what we call free coinage. Such madness of misinfor- 
 mation is not conceived elsewhere. With the con- 
 sumption of silver limited in coinage and the new sup- 
 ply of gold pouring in and free at all the mints, there 
 will be an approximation of the two metals in market 
 prices at the old ratios, and it will come pretty fast 
 when the movement is fairly under way. When this 
 happens there may be business in conferences, but not 
 until then. 
 
372 SILVER AND GOLD. 
 
 CHAPTER XIX. 
 
 BY EX-GOVERNOR HORACE BOIES, OF IOWA. 
 
 THE question to be answered, in my mind takes the 
 following form : " If the choice in fact lies between the 
 maintenance of our present money standard or its 
 abandonment for a standard of silver only, would you 
 recommend the change, or deem it wise to change our 
 monetary system to the silver basis ? " 
 
 Before answering this question, I desire to say : Our 
 present money standard is purely a gold standard in 
 which the unit of value, (one dollar) is fixed at twenty- 
 five and dight-tenths grains of gold. That tine was 
 substantially the standard of the gold dollar before as 
 well as since the demonetization of silver in 1873. 
 That the demonetization of silver reduced by nearly if 
 not quite one-half the primary money of the country, 
 and in obedience to the inexorable law of supply and 
 demand necessarily enhanced the value of the remain* 
 ing one-half which was not demonetized. 
 
 That the process of increasing the value of this half 
 was not an instantaneous process but a continuous one, 
 that has been constantly going on since the act of de- 
 monetization, and must continue to go on in the future 
 so long as the necessities of governments or the greed 
 of men induce them to hoard gold, and thereby dimin- 
 ish the volume of primary money in circulation, and i 
 this in an accelerated degree, if for any reason the ] 
 world's annual production of this one metal is hereafter 
 
EX-GOVERNOR HORACE BOIES. 373 
 
 diminished. That the experience of our own govern- 
 ment in the recent past demonstrates that under our 
 present system, this nation, one of the strongest and 
 wealthiest on the face of the earth, is absolutely at the 
 mercy of the money power of its own citizens, a limited 
 class of whom are capable of draining its treasury of 
 the last dollar of primary money it possesses, or send- 
 ing it into the markets of the world a suppliant at the 
 very feet of foreign money kings, to exchange its credit 
 for gold on any terms these gentlemen see fit to dic- 
 tate. 
 
 That the effect of enhancing the value of the primary 
 money of the country upon the debtor class is even 
 more disastrous because it increases the burden of their 
 obligations to the same extent that the value of the one 
 metal that constitutes the primary money of the coun- 
 try is enhanced, and to the same degree increases thr 
 wealth of the creditor class of this and other countries 
 who hold the immense aggregate of our obligations to 
 pay, national, state, municipal, corporate and individ- 
 ual, the entire weight of which must always be borne 
 by the producing classes. 
 
 That as the value of money is enhanced, the price at 
 least of the products of labor must necessarily diminish 
 as they have diminished since silver was demonetized, 
 and in the end the price of labor must inevitably seek 
 the same level comparatively that products produced 
 by it sell for in the markets. 
 
 The choice, therefore, that the question suggests to 
 my understanding, is simply a choice between our pres- 
 ent gold standard to remain a fixed and unalterable 
 principle in our currency system for all time to come, 
 and a silver basis that would by reason of a cheaper 
 
374 SILVER AND GOLD. 
 
 unit of value, exclude gold from circulation as money 
 among the masses of our people, but leave it equally 
 with silver ; legally at least, a part of our money of re- 
 demption. 
 
 With this explanation, I unhesitatingly answer that 
 I would exchange our present money standard for a 
 vtandard of silver only, if this is necessary to secure 
 ihe use of both gold and silver as legal money of re- 
 lemption. 
 
 I have reached this conclusion because I am now con- 
 vinced the contest in which the people of this country 
 fere now engaged is not one of ratio at all, but one that 
 involves the vastly more important question of whether 
 we are to reincorporate into our financial system the 
 principle of bimetallism on which the fathers of the re- 
 public anchored it, and which I am entirely willing 
 to affirm upon my own personal knowledge, was elim- 
 inated from it without any general understanding by 
 the masses of what was being done. 
 
 I want it understood, however, that I am as much 
 opposed to silver monometallism as I am to gold mono- 
 metallism, and when the country reaches the question 
 of what shall constitute an honest dollar in each metal, 
 if it does in my lifetime, whatever influence I possess 
 will be used to make both honest dollars, equally just 
 to all classes, and to provide safeguards if any are 
 found necessary to maintain the parity of the different 
 coins. 
 
COLONEL A. K. McCLURL. 
 
 CHAPTER XX. 
 
 *\ OL. A. K. MCCLUEB, EDITOR OF THE PHILADEL- 
 PHIA TIMES. 
 
 THE adoption of free silver coinage in this country 
 on the basis of 16 to 1, would at once precipitate silver 
 monometallism and a tempest of destruction to com- 
 merce, industry and trade would inevitably follow. 
 
 Such a step would degrade the United States that 
 has maintained its credit throughout the entire world 
 for more than a century, to the pagan nations and 
 semi civilized South American governments. Both 
 public and private credit would either be destroyed or 
 greatly impaired, and the severest blow would fall on 
 the industrial classes of the country. 
 
 The adoption of the silver standard in this country 
 would bring back upon us from the old world hundreds 
 of millions of securities in excess of the entire money 
 of the country, including gold, silver and paper. Our 
 securities would be discredited, and we would be com- 
 pelled to redeem them ; our great improvements, largely 
 maintained by foreign capital, would be summarily 
 ended, and the pall of death would fall upon American 
 enterprise. 
 
 International bimetallism is not possible unless on the 
 basis of the intrinsic value of gold and silver coin, and 
 how the parity of the two metals can be maintained 
 when silver is constantly varying in value, is not com- 
 prehended. The adoption of bimetal standard of 16 to 
 
376 
 
 SILVER AND GOLD. 
 
 1 would be a departure from the fundamental theory of 
 honest money, and it certainly must be rejected by the 
 leading governments of Europe for the reason that it 
 would at once double the value of the money of the 
 pagan and semi-civilized countries of the world which 
 have the silver standard. 
 
 The only safe rule for the United States to adopt is 
 to maintain the money standard that is accepted by all 
 the civilized countries of the world. We must do it 
 not only because it is right and 'honest and necessary to 
 the maintenance of public credit, but we must do it be- 
 cause we are the largest borrowing nation of the world, 
 and have developed for our people billions of wealth by 
 the aid given us from foreign capital. 
 
MORRIS M. ESTEE. 
 
 CHAPTER XXL 
 
 BY MORRIS M. ESTEE. OF CALIFORNIA. 
 
 THE modern way of increasing the interest on money 
 is to increase the purchasing power of the principal 
 sum, without changing the specified rate of interest. 
 For many years England has done this. The creditor 
 classes of America are now imitating her example. This 
 is dishonest. It benefits the creditors, but ruins the 
 debtors. 
 
 Nothing can be truer than that the financial re- 
 sources of this country are attacked when we attempt 
 to destroy one part of our metallic money, for by this 
 means the value of products are lowered, the amount 
 of our debts is increased (because the purchasing power 
 money is greater as the amount of money becomes less) 
 and hard times ensue. 
 
 Constitutional law, as well as th customs of our 
 country, marks out a financial policy which makes 
 necessary the full and free coinage of gold and silver 
 money. In this connection it may be stated as a gen- 
 eral proposition, there are but two international money 
 metals, gold and silver. Gold being the rarest and 
 most difficult to obtain, is the most valuable. Silver 
 has always been used as money, and is the most con- 
 venient for small transactions. It is the money of the 
 people, and is used alike by the beggar and the prince. 
 In our own country, thousands of transactions are 
 made in silver where one is made in gold. East of the 
 
578 SILVER AND &OLD. 
 
 Missouri river there is practically no gold in use. Sil- 
 ver, coin and paper are the only moneys in circulation. 
 
 The coin value of silver in the United States com- 
 pared with the coin value of gold is as sixteen to one ; 
 that is, the coin value of sixteen ounces of silver, 900 
 fine, is equal to one ounce of gold. 
 
 The Constitution of the United States provides, that : 
 
 " The congress shall have power * * * to coin 
 money and regulate the value thereof; " and further 
 "that no State * * * shall make anything but 
 gold and silver a tender in payment of debts." (Sec- 
 tiens 8 and 10, Article 1, Constitution.) 
 
 It is constitutional law, that no State can make any- 
 thing but gold and silver coin a tender in payment of 
 debts. Under this plain constitutional provision, a 
 State can make both gold and silver a legal tender. 
 But it cannot make one a legal tender and prohibit the 
 use of the other. Both metals were selected by the 
 builders of our government as the necessary money 
 metals of our country. 
 
 Congress has no powers except such as are conferred 
 upon it. The States retain all the powers not expressly 
 taken from them. The general government coins 
 money, and it coins the money that the Constitution 
 prescribes, but the States are authorized to make gold 
 and silver the only legal tender in payment of debts. 
 In a word, the States may indicate the purposes for 
 which the money so coined by congress can be used ; 
 but congress cannot, by refusing to coin gold and sil- 
 ver, prevent the States from establishing a legal tender 
 which the Constitution directs. 
 
 When congress is given power to coin money, it 
 only those kinds of money which the same in- 
 
WILLIAM A. PEFFER, 
 
MORRIS M. ESTEE. 381 
 
 strument says shall be a legal tender in payment of 
 debts. This clause of the Constitution clearly points 
 out to the States the duty which they have to perform. 
 The Supreme Court has decided that congress has the 
 power to make paper money a legal tender. The 
 States cannot do this. Congress has no power to de< 
 monetize any money which the States may declare a 
 legal tender ; nor is there anything in the Constitution 
 which directly or indirectly gives to congress the authority 
 to demonetize any constitutional coin. It may coin money ; 
 it may coin gold and silver, but nowhere is congress 
 given the authority to destroy gold or silver as money. 
 
 As a question of national policy, there are many rea 
 sons why this should not be done. The United States 
 produces more gold and silver than any other country, 
 and the largest possible use of both metals encourages 
 production and adds to the stable money power of the 
 people. 
 
 In 1893, it is claimed, the world produced in gold and 
 silver about 1363,892,800, and the same year the United 
 States produced $113,531,000, or about one-third of the 
 total product. During the first ten months of the year 
 1894, there was exported from the United States, in ex- 
 cess of our imports of gold, more than seventy-three 
 millions of dollars. This was necessary to sustain our 
 balances of trade and pay our indebtedness to foreign 
 countries. Hitherto, the policy of our government has 
 been to increase the exports of products, and decrease 
 the exports of gold so that our trade balances would be 
 sustained without the use of money, but the change in 
 our revenue laws, and the admission into our country 
 of free and cheap raw material and of more foreign 
 manufactured articles; has disturbed the courses of 
 22 
 
382 SILVER AND GOLD. 
 
 trade and thus caused a marked change in the amount 
 of our exports and imports. We are now compelled to 
 send out of the country more money to meet the de- 
 mands which these now conditions impose upon us, and 
 should we continue to export the same proportionate 
 amount of gold for the next five years as during the 
 last ten months, there will be very little, if any, gold 
 left in the country, because a large part of the gold in 
 the United States is not obtainable either for exporta- 
 tion or business purposes. The recent large shipment 
 of American gold to Europe has surprised the gold 
 people. It had been claimed that, when silver money 
 and silver certificates were out of the way, gold would 
 be abundant. But gold has not been abundant, nor 
 has it remained at home, nor have our foreign and do- 
 mestic markets improved. It matters not whether 
 gold goes abroad to pay our trade balances, or is sent 
 abroad for sale as a speculation, the result is the same 
 our favorite money is going away from us, and it leaves 
 only paper money to do business with here. In a word, 
 we have assisted England and Germany in making 
 gold so valuable to them that it has become useless to 
 us, for we cannot keep it at home. Silver has not 
 driven it away. Free coinage is not the reason for its 
 going, as we have not had free coinage. It is the re- 
 sult of ne\\ financial theories, the threatened and actual 
 change in our tariff laws, and our conspiring to build 
 up gold at the expense of silver, by driving it out of 
 common use in the business and commercial centers of 
 our country. 
 
 American credit must be sustained by Americans. 
 Our prosperity and our ability to pay is the crucial 
 test of our eredit. One thing is certain : when we are 
 
MORRIS M. ESTEE. 383 
 
 not prospering at home we have no credit abroad. 
 Being a debtor nation, we have no foreign balances in 
 our favor, and when our exports do not largely exceed 
 our imports, gold leaves, whether we have the free coin- 
 age of silver or not. The question resolves itself into 
 this : Shall we have two money metals or none ? We 
 may try to retain gold, but we cannot do so if we 
 demonetize silver. In times of prosperity we receive 
 from abroad more money than we pay out; in times of 
 business depression we pay abroad more money than we 
 receive from there. This is so because our foreign 
 creditors become alarmed and lose confidence in us, as 
 we lose confidence in our ability to pay. When the 
 value of our export products does not equal what we 
 must pay abroad, and, as we increase the amount and 
 value of our imported luxuries, we have to meet the 
 difference in money ; and when we join our foreign 
 creditors in declaring that silver is not good money for 
 home use, it will not be good money elsewhere. Thus 
 gold will go out of the country in the same ratio as the 
 excess of imports comes into it. 
 
 American mines in 1893 produced about $45,000,000 
 of gold. The arts, and losses in transportation and other 
 causes, took about $15,000,000, leaving last year's in- 
 creased gold supply of the country for coin purposes, 
 if all was retained here, about $30,000,000. When we 
 bear in mind that our increase of population and of 
 business demands a constant increase of money, it will 
 be noted that this increase of our gold supply will not 
 exceed the home demand, and should the present tariff 
 laws be continued and no change made in our coinage 
 acts, gold will leave the country in the future, to meet 
 
384 SILVER AND GOLD. 
 
 our foreign obligations as it has done in the past, and 
 the more gold we mine, the more will go abroad. 
 
 When we export money we take from our own peo- 
 ple the most potential instrument of trade and com- 
 merce, but when we export our surplus products, we 
 merely find a market for what we do not wish to use in 
 our own country, and thereby increase our profits. And 
 again : the interest on American securities held in 
 Europe payable in coin is enormous, and must be met; 
 and yet, in view of all these facts, we join hands with 
 England in making gold more and more valuable and 
 silver less and less valuable. 
 
 It is only within the past few years, and with a very 
 few nations, that silver has been demonetized, and yet 
 in those countries where gold is recognized as the only 
 money metal, paper is the money of commerce because 
 business cannot be done with gold alone. Bank bills, 
 checks and drafts are the customary means of trans 
 ferring values. 
 
 Mr. James Platt, the great English writer on finance, 
 says: 
 
 "Money is nothing else than a form of credit, a 
 thing, whatever its substance, which men by commor 
 consent have agreed to recognize as a symbol of wealth." 
 
 As money is a " symbol of wealth " it would seem 
 that the more money, the greater our wealth, unless the 
 increase of quantity decreases the quality or value, un- 
 til it ceases to symbolize wealth. In this connection, 
 some things are self-evident. 
 
 It is a fact that as there is not enough gold to per- 
 form all the functions of money or to transact the busi- 
 ness of the country, we must have seme may other 
 
MOEKIS M. ESTEE. 885 
 
 than gold ; that silver has intrinsic value and in that 
 respect it is better than paper money. Therefore we 
 must have some silver as a part of our "symbol of 
 wealth," for use as change. 
 
 When we increase the forms of credit in our coun- 
 try, we enlarge our business possibilities, and we ac- 
 complish this by increasing the amount and uses of 
 silver money. Silver is one of the conspicuous prod- 
 ucts of the United States, the output of our mines for 
 1893 being $77,000,000. Like gold, it is used in the 
 arts and as money. Millions and millions of dollars of 
 this metal is in daily use in gold countries as subsidiary 
 coin. England is compelled to use over $100,000,000 
 of silver subsidiary coin to make change. Is it busi- 
 ness wisdom for America to join England in making 
 one of our products, whatever the character of that 
 product, less valuable ? And what adds to the folly of 
 this act is, that we assume to do it in defence of Ameri- 
 can credit, and we commence by destroying the value 
 of millions of dollars of American silver. Every 
 thoughtful man knows that we could not sustain our 
 domestic or foreign credit an hour if such credit was 
 based upon the amount of gold in circulation. If the 
 people holding United States currency should demand 
 gold from the treasury of the United States, they could 
 not obtain it, nor could any bank in the country which 
 issues paper money redeem that paper in gold in any 
 monetary crisis. 
 
 It is clear that gold is not omnipotent as money, and 
 it is equally clear that there is not gold enough in the 
 world to stand behind and sustain the world's credit or 
 to transact the world's business. Nor is there gold 
 enough in the United States to stand behind and sus- 
 
886 SILVER AND GOLD. 
 
 tain American credit. Gold and silver combined can 
 come nearer accomplishing this purpose. If silver is 
 used at all as money it should be given full credit to 
 the extent of the amount required for circulation, and 
 the largest possible amount should be put in circula- 
 tion, because this would enlarge our credit. The name 
 of gold is used for big transactions, but the fact is gold 
 itself is not used. When great financial stress comes 
 gold is of little value to the business world, because 
 the business world cannot get it. It is then hidden 
 away by those who wish to save something from the 
 general wreck. 
 
 Hoarded money is non-earning money. The secret 
 of business success is to have every dollar earning 
 something and to have every man emplo} T ed and at fair 
 wages. Work is a source of wealth. We cannot have 
 labor without laborers, but we can increase wealth 
 without increasing the number of millionaires. This 
 should be the chief purpose of our financial legislation. 
 
 The value of money depends largely upon what is 
 done with it at home and not upon what it will bring 
 abroad. Money which circulates most, whether gold 
 or silver, is the best for the people using it. Money 
 that every one wishes to keep is of little benefit in 
 business, for, like jewels, it may be too valuable for 
 use. All money must have something in it or behind it. 
 The security standing behind money is in most case, 13 
 the wealth of the nation issuing it. Take England. 
 Its public debt is $3,277,888,000 payable in gold, and 
 yet the whole amount of gold which England has is 
 but $510,000,000. It is thus observed that it is not 
 English gold which maintains English credit ; it is her 
 
MORRIS M. ESTEE. ' 387 
 
 vast resoiuces, her honor and her custom of paying 
 what she owes. 
 
 Though gold is less bulky, it is no more convenient a 
 form of money than silver, and it never has been in 
 common use among the masses of the American people. 
 Silver is so used because it is the money of small trans- 
 actions. Infinitely more people use silver than gold, 
 and therefore when we demonetize that metal more 
 people will be injured than if we should demonetize 
 gold. Small transactions multiply as our population 
 increases, and it is these transactions which sustain the 
 home markets, the business enterprises and the credit 
 of the nation. It is the modest accumulations of the 
 many and not the vast fortunes of the few which most 
 benefit the country. Wall street could not exist an 
 hour but for the great Republic with its teeming wealth 
 and its 65,000,000 of people which stand behind it. It 
 is the fact that it is the clearing-house for the business 
 enterprises of the nation which makes it powerful. In 
 itself and of itself Wall street creates nothing, has no 
 power and no credit except such as the rest of the 
 country gives to it. 
 
 If it were possible to have an international coin, with 
 a fixed international value, it would doubtless be better 
 for the people of the world. This at present is impos- 
 sible, but when we have both gold and silver we have 
 a metallic money which will fit every transaction and 
 which will find its way into every man's pocket. The 
 tendency then is to distribute wealth more uniformly 
 among the people and thereby benefit the nation. 
 Hence the first duty of this country would seem to be 
 to build up its own industries by the wise use of its own 
 money, then its credit abroad will care for itself. 
 
388 SILVER AND GOLD. 
 
 A country like the United States, which is so busy 
 maintaining its foreign credit that it forgets to pay any 
 attention to its home industries, cannot long maintain 
 either its foreign or domestic credit. More of the 
 American people have been out of employment the past 
 two years than at any other period in thirty years. New 
 systems of revenue and of finance have been introduced 
 until we have but little revenue and even less knowl- 
 edge of finance. We have been trying to legislate con- 
 fidence into the country by driving money out of it. 
 True some of the financiers of New York and of En- 
 gland declare that free coinage of silver will disrupt our 
 financial system. When a financial system benefits 
 only those who have money to loan it is the wrong sys- 
 tem and should be disrupted. The present system is 
 un-American and it should be done away with. It is 
 also claimed that if we coin silver gold will leave the 
 country. Is this true? Gold is leaving the country 
 now faster than the government can borrow it, and, as 
 stated, it will continue to leave unless we have some- 
 thing else to send abroad to pay our debts. We should 
 coin American money for American circulation, because 
 all money is a commodity when it leaves the country 
 which issues it. What is of most interest to us is the 
 amount which the surplus products of our farms and 
 our factories will sell for, not what our money will bring. 
 We have but little money compared with the limitless 
 extent of our productions. There has not been three 
 months in the last two years during which the produc- 
 ing classes of America have not lost more money by the 
 depreciation in the value of labor and the productions 
 of labor than the full amount of all the gold in the 
 country. 
 
MORKIS M. ESTEE. 389 
 
 Our corporate, municipal, state and national bonded 
 indebtedness is more than twenty times the amount of 
 our gold, most of which is payable in coin, and of all 
 kinds of property we have about $66,000,000,000. It 
 would be ridiculous to say that 1500,000,000 of gold 
 could sustain the value of all this vast property. 
 
 American gold people cannot disassociate the value 
 of American gold and silver bullion in a foreign market 
 from the value and uses of American gold and silver 
 coin at home. They talk of gold money as though it 
 was the only evidence of wealth. It is our farms, the 
 products of our farms, our cities and towns, our rail- 
 roads and factories, our mines of gold and silver, of 
 coal and iron, the great extent of our territory and the 
 thrift and push and energy of our people, which consti- 
 tute our wealth and which are the source of our. credit. 
 
 If the War of 1861 were repeated there is not a bank 
 in the country which issues paper money redeemable in 
 gold that could, on demand, pay out gold in twent}'-four 
 hours after the war began. When our credit is attacked 
 gold does not sustain it. It is simply the old story that 
 when everybody wants gold there is none ; when no- 
 body wants it there is plenty. There never can be too 
 much metallic money. An abundance of gold and sil- 
 ver never caused an undue inflation in prices. Gold is 
 needed, silver is needed, and property of every kind, 
 and in vast amounts, is needed to sustain our business 
 credit and maintain our enterprises. You cannot attack 
 the value of one kind of property without materially 
 affecting the value of all property. 
 
 Credit is born of confidence and confidence come^ 
 from seeing the product of the farm selling for good 
 prices, from hearing the wheels of machinery in action, 
 
390 SILVEK 
 
 from knowing that commerce moves in its wonted 
 channels, from feeling the financial pulsation which an 
 increased output of our mines gives to the country. 
 
 It is a fact that the value and amount of silver money 
 in circulation largely fixes the value of commodities and 
 thtis builds up business confidence. Look at the rise 
 and fall of wheat and the rise and fall of silver bullion. 
 They parallel each other. The fact is, the producers 
 of raw material need more money to sustain their busi- 
 ness than any other class of people, and in a country 
 like ours the parity of the coin value of gold and silver 
 must be maintained or the prices of products will not 
 be sustained. No workingman ever refused a silver 
 dollar in payment for his labor. Why should the Wall- 
 street banker refuse to let that same dollar pass through 
 the clearing-house when he knows that four-fifths of the 
 American people gladly accept it as money? 
 
 American markets, American labor and American 
 money must be sustained at home. We cannot have 
 business prosperity when the products of the farm and 
 the factory sell at a loss. We can no more rely for our 
 success upon European theories of finance than upon 
 European; values of labor. This nation is a nation unto 
 itself. Our form of government, the variety and amount 
 of our productions, our vast territory, our isolation from 
 the older and more populous civilizations of the world, 
 and the marvel and mystery of our growth, show clearly 
 that our civilization is a creation of our own, and not 
 an imitation of others. 
 
 In the United States, the West and .south are the pro- 
 ducing portions. The majority of the people of these 
 sections are in favor of the free coinage of silver be- 
 cause it will make more money, safe money and cheap 
 
MORKIS M. ESTBB. 391 
 
 money. The silver producers are interested in the free 
 coinage of that metal, because it will increase the 
 amount of and the demand for the productions of their 
 mines and thus encourage their development, and en- 
 large their output. The debtor classes, those who owe 
 money to the capitalists of the East, are interested in the 
 free coinage of silver because the} T reason that gold arid 
 silver are the money metals of the Constitution ; that 
 when they borrowed the money they now owe, gold and 
 silver were in general circulation in the United States, 
 and that after the creation of these debts, any effort 
 made by the creditor classes to demonetize silver, 
 thereby decreasing the amount of money in circulation, 
 is dishonest because it makes mone} r dear and the debt- 
 greater. 
 
 The Sherman bill was a poor make-shift for free 
 coinage, but it was better than nothing. It provided 
 for the purchase in open market of $4,000,000 worth of 
 silver monthly, and the issuance of a like amount of 
 silver certificates as the representative of that metal. 
 This act is now repealed, and the plain, undeniable re- 
 sult of all this financial legislation is, that the value of 
 gold has increased and the value of commodities has 
 uniformly decreased. Hence it takes more of the prod* 
 ucts of labor or of capital to pay any given amount of 
 debt now than it did when silver was freely coined. 
 Tinkering with financial questions is dangerous. The 
 very uncertainty which it causes imperils business and 
 injures credit The remedies proposed are often worse 
 than the disease, for stability is the chief object to be 
 attained in monetary affairs. The fact that gold and 
 silver are practically indestructible, gives to both these 
 metals a monetary value in the business and financial 
 
392 SILVER AND GOLD. 
 
 world which the creditor classes cannot destroy, nor the 
 debtor classes unduly inflate. 
 
 There is a financial war in progress between the 
 creditor and the debtor classes, between those who have 
 money to sell and those who have products to sell, be- 
 tween the producers and the consumers. The question 
 is, shall we make money scarce and valuable and prod- 
 ucts cheap, or products valuable and money cheap? 
 The gold people declare that the increase of the pur- 
 chasing power of gold and the consequent lowering of 
 the values of property do not injure the producer, be- 
 cause the same amount of money will buy a like amount 
 of things now as before the exaltation of gold. 
 
 The argument is specious. There are $500,000,000 
 of gold in the United States and fully $66,000,000,000 
 of property. Themostof the American people own some 
 property ; but there are not to exceed 10,000 of the 
 American people who have any considerable amount of 
 gold. 
 
 Two objections are urged against the free coinage of 
 silver : one that it will drive gold out of the country ; 
 the other that it will create an undue inflation of prices. 
 It has been shown that the United States is a debtor 
 nation ; and, as we have to pay to foreign peoples a 
 large amount of money annually, the only way to keep 
 that money at home is to maintain prosperity at home. 
 It is axiomatic that a country is not prosperous, al- 
 though its securities may sell at a premium, if its prod- 
 ucts sell at a loss. There is something radically 
 wrong when national credit is good and private credit 
 bad. The American people are not prosperous, and the 
 best proof of the unfavorable condition of the business 
 of the country is that the government is running in 
 
MOBBIS M. ESTEE. 393 
 
 to meet its usual and ordinary expenses. Indeed 
 it is borrowing money to send out of the country and 
 coining no money which will stay at home. 
 
 It has been asserted that the free coinage of silver 
 will make it necessary to protect our country against 
 the undue importation of foreign silver bullion brought 
 for coinage to the mints of the United States. This 
 will not be the case because most of the foreign silver 
 money now in existence passes as such at par in the 
 countries coining it, and foreign silver bullion will not 
 seek American coinage unless it at the same time seeks 
 American investment, because while American coined 
 silver, like American coined gold, is money here, it is 
 only a commodity abroad, and will there sell as bullion. 
 And suppose all the United States mints should coin 
 silver only, they could not produce one dollar a year for 
 each inhabitant. The country can stand that much in- 
 flation. 
 
 On the 31st of December, 1893, there were 175,441 
 miles of completed railroad in the United States. 
 These roads were built at the nominal cost of $11,855,- 
 968,166 and their outstanding liabilities are $11,443,- 
 888,892. Of this vast amount $5,470,292,713 is bonded 
 indebtedness, most of it due in twenty years. A large 
 portion of this bonded indebtedness is held in Europe, 
 the principal and interest payable in coin. It is thus 
 inevitable that for this purpose alone, and for many 
 years to come, there wil] b& a large European demand 
 for American gold. In view of these facts, a necessity 
 for an increased coinage of silver seems apparent. The 
 fact is, gold cannot be obtained to meet our ever-ac- 
 cumulating foreign indebtedness unless our exports of 
 products are largely increased. A day of reckoning 
 
394 SILVER AND GOLD. 
 
 will come. Let a great war break out and note the re- 
 sult. Instead of one-sixth of all the railroads of the 
 country being in the hands of receivers, as is the case 
 now, five-sixths of them will be in that condition. This 
 would destroy public and private credit. It would do 
 more harm than to pay our debts in silver for a century. 
 The business world cannot pay its debts in gold ; and 
 that country which adopts both metals as the basis of 
 its monetary system will, in the long run, have more 
 money, better money, and will do more business at home 
 and a safer business abroad than under a single standard. 
 If foreign wars or foreign trade take the gold out of the 
 country, silver will remain ; if silver goes, gold will re- 
 main. 
 
 If asked to suggest a remedy for present conditions, 
 three present themselves. Neither one may fully meet 
 expectations. They are : 
 
 1. The full and unlimited coinage of silver. 
 
 2. The free coinage of silver produced in the United 
 States. 
 
 3. The equal coinage of both gold and silver. 
 
 No one man ever invented a perfect financial system ; 
 it can not be created alone by legislative enactment ; it 
 is a growth ; it comes with the varied teachings of suc- 
 cess and failure. 
 
 The position of the United States on the Western 
 Continent and in the financial world, demands that it 
 should have a distinctive financial policy. We cannot 
 imitate the English principles of revenue and finance 
 unless we do so at the expense of our own people. The 
 United States produce gold and silver in large quanti- 
 ties. We produce more raw material than any other 
 people, and if we protect our home markets and con- 
 
MORRIS M. ESTEE. 895 
 
 gume at home to the extent of our needs what we pro- 
 duce at home, our exports will exceed our imports and 
 gold will not leave the country. 
 
 The principle of protection and the free coinage of 
 silver are both necessary to the fullest and highest in- 
 dustrial development of America. 
 
 In conclusion, there is a selfish side to the money 
 question. The people who have gold want to make it 
 more valuable ; the people who have silver want to 
 make it more valuable. The gold people want to de- 
 monetize silver because it is cheap, and to do this they 
 would drive out of the world's money circulation $4,- 
 000,000,000 of silver. But the great masses of the en- 
 terprising people, the producers of wealth, those who 
 have their fortunes yet to make, want both money 
 metals, because this will create more metallic and 
 cheaper money and thus encourage and promote private 
 enterprises. 
 
 Hitherto the American producers have been num- 
 bered among the voiceless millions, but they will be 
 heard at the next presidential election. It is a happy 
 omen for the future of American politics that new is- 
 sues are being submitted to the people. As a result 
 past dissensions will be forgotten, different sectional 
 lines will be drawn as new principles are evolved, 
 parties will divide on the money question, and that 
 party which either evades the free coinage of silver or 
 is opposed to the same, will fail. 
 
 In the United States, as elsewhere, money is power, 
 and every year the rich are becoming more powerful. 
 Those who have little are naturally jealous of those 
 who have much. The responsibility resting upon the 
 rich is becoming greater. Money cannot safely corner 
 
396 SILVER AND GOLD. 
 
 the industrial pursuits of a great nation. A free people 
 may be deceived and misled for a time, but in the end 
 they will do the right thing. While the influence of 
 Wall street is great, as a factor in American politics 
 its very name is a source of weakness, and in the near 
 future American finance will figure in American poli- 
 tics. 
 
BENJAMIN HATCTCTSON, 
 
JAMES H. ECKELS. 399 
 
 CHAPTER XXII. 
 
 BY JAMBS H. ECKELS, COMPTROLLER OF THE CUR- 
 RENCY. 
 
 It must be evident to any one who will examine 
 into the present status of the agitation for the free 
 coinage of silver that no argument can be adduced by 
 those who are opposed to it which will in any wise af- 
 fect public opinion in the distinctively silver-producing 
 states. The business men of those states, not less than 
 the leaders of political parties, make their demand with 
 the end in view of securing a fixed and profitable mar- 
 ket for that which they consider their most valuable 
 product. The elements of harm to safe national 
 financiering and right principles in currency legislation 
 apparently do not enter into their view of the question, 
 and therefore many of the propositions which they pre- 
 sent are faulty in statement and wholly unstained by 
 either the basic elements of sound finance or the his- 
 torical facts of this and other countries. Fortunately 
 for the public good the group of states thus directly 
 interested in subjecting the American people to yield- 
 ing tribute to them is small, both in numbers and popu- 
 lation, as compared with the whole- The threats, there- 
 fore, of their political leaders, impartially made by 
 both republican and democrat, or party secession 
 ought not to have the effect of driving, for political 
 reasons, the great body of the people into taking such 
 action as must inevitably bring disaster upon all. 
 
400 SILVER AND GOLD. 
 
 Heretofore when called upon to deal with questions of 
 a similar character the great mass of opinion has at the 
 critical time always been found to be upon the right 
 side. There is reason to believe that in the present 
 instance no exception to the unvarying rule will be 
 had. 
 
 This result will be attained quite as much through 
 the manner of campaign of the advocates of free coinage 
 alluded to as by the educational method pursued by 
 those who combat them. The proponents of free coin- 
 age of silver may fairly be charged with having sys- 
 tematically withheld from those whose aid they have 
 sought a full and true statement of the historical and 
 other facts relative to this question, a knowledge of 
 which is necessary in order to form a proper judgment 
 of the merits of the controversy. This has been no- 
 where so manifest as in the manner in which the ques- 
 tion of the treatment of silver as a money metal by this 
 and other governments since 1873 has been presented 
 by them. Wherever the figures have not been actuall} r 
 perverted the matter has been so slurred over as to 
 create the impression that all gold-standard countries 
 have in their abandonment of the further coinage of 
 silver also abandoned the further use of that which 
 they then had. The figures are at hand to demon- 
 strate not only what little ground there is for this com- 
 plaint but to show as well how very much silver is held 
 by the particular countries of whicli the silver agitator 
 now most bitterly complains. The great part of this 
 total amount of legal tender silver coins was added 
 during the period of what they term " silver discrimi- 
 nation and falling prices." This is almost entirely the 
 case in this country. Prof. Lexis,, who is regarded a,s a 
 
JAMES H. ECKELS. 401 
 
 standard authority upon momentary statistics, has 
 recently called attention to this very significant fact, 
 and given figures which show Germany to have at 
 present 400,0 )0,000 marks in thalers besides 400,000,- 
 000 marks in fractional silver. France and the other 
 states of the Latin Union have not less than 3,000,000,- 
 000 marks, or $714,000,000 in silver 5-franc pieces. 
 Spain coined from 1876 to 1892, 641,000,000 peseta 
 pieces, while both the Netherlands and Austria-Hungary, 
 notwithstanding their introduction of the gold standard, 
 have kept all of their legal tender silver pieces. The 
 annual coinage of silver in India up to June 26, 1893, 
 was, at the ratio of 1 to 15, from $130,000,000 to $140,- 
 000,000, while in China and Japan the amount which 
 could be used for monetary purposes is not limited. 
 
 More significant than all this, however, was the coin- 
 age at our own mints during the period from 1878 to 
 January, 1895. The total coinage of silver in this 
 country prior to 1873, under conditions now reverted 
 to by the advocates of free coinage, was but $143,465,- 
 150.70, the greater part of which was in fractional coins. 
 In the years since 1873, the years when most has been 
 heard of silver not being accorded to its proper place in 
 our money issues, there have been put forth by the 
 government with full legal tender properties given 
 them $588,444,468.45 either in silver coin or the repre- 
 sentative thereof. This remarkable increase in our 
 legal tender silver currency has been the constant sub- 
 ject of remark on the part of those who have witnessed 
 unprejudiced the agitation carried on here for a larger 
 coinage of silver and analyzed the reasons assigned for 
 it. Nothing more philosophic nor more worthy of 
 study on the part of our citizens relative to the same 
 
402 SILVER AND GOLD. 
 
 has been suggested than the following query of the 
 author heretofore referred to : 
 
 " The question which I have repeatedly put to the 
 defenders of the opinion that there has been an in- 
 trinsic appreciation of gold has never yet been an- 
 swered. The question is this, and it has reference to 
 the United States : How has it been possible that the 
 .United States, which from 1878 to 1893 issued more 
 silver money or silver covered notes than all the 
 European states taken together had issued in a like 
 period previous to 1873 a'nd more than it would have 
 been called upon to coin under the sj'stem of universal 
 international bimetallism, I ask how has it been possible 
 that the United States, which produces annually $33,- 
 320,000 gold and coins in correspondingly large sums, 
 and which moreover has maintained in circulation 
 $346,000,000 of paper currency, with its defacto double 
 standard and the superabundance of media exchange, 
 has suffered from a perhaps still greater depression than 
 that assumed to have been produced in Europe by gold 
 monometallism, and that the prices of commodities of 
 the United States, notwithstanding the Chinese-like iso- 
 lation of its market by a protective tariff wall, have 
 shown the same downward movement that we find in 
 Europe? Is it not plain that the movement of prices 
 which in two regions, with the condition of the stand- 
 ard so entirely different, but which manifest the same 
 effects and the same course of things, must have other 
 causes than the demonetization of silver, which did 
 not begin in the United States until the repeal of the 
 purchasing clause of the Sherman act, but which has 
 left $567,000,000 in silver credit money in circulation 
 at its full nominal value ? " 
 
 A second criticism which may justly be passed upon 
 the advocates of the free coinage of silver is their re- 
 fusal to grant that the increase in this country of bank- 
 ing facilities during the years from 1873 have in any 
 
JAMES H. ECKELS. 403 
 
 wise made unnecessary a further extravagant enlarge- 
 ment of our silver metallic currency. 
 
 It must be evident to the student of financial prob- 
 lems that the continued improvement in banking 
 methods renders less necessary the employment of a 
 large metallic currrency. These banking refinements 
 of ours, imperfect as they are, have played no insig- 
 nificant part in the country's monetary history through- 
 out the last two decades. The statistics of the national 
 banks alone show their number to have increased from 
 1,968 with individual deposits of $641,121,775 in 1873 
 to 3,711 with individual deposits of $1,690,961,299 on 
 May 7, 1895. The increase has been correspondingly 
 great in state, savings, private banks and trust com- 
 panies. All this has added to the available capital of 
 the people, reduced rates of interest everywhere, less- 
 ened their need of a further expansion of our money 
 circulation and given to them a currency which is 
 sufficient. Every dollar deposited in a bank is so much 
 idle capital turned into a channel of usefulness and 
 made to bear instead of the weight of a single trans- 
 action, as is the case with cash instead of check pay- 
 ments, the weight of many different transactions. In 
 no other country, excepting possibly Scotland, is the 
 deposit feature of banking so prominent as it is here. 
 It is so much the principal thing in banking with us 
 that the circulation feature is but an incident to it. 
 It is almost unpracticed by the people of continental 
 Europe, and hence the benefit of credit instruments 
 which is arailable to us is wanting to them. They, 
 from force of habit and methods of business, can justify 
 a large volume of circulating media ; we cannot. The 
 number of depositors in the banks and kindred institu- 
 
404 SILVER AND GOLD. 
 
 tions in the United States, according to statistics care- 
 fully gathered, are 8,192,749, a power so great as to 
 cause the leading banking magazine of Great Britain 
 to say in its latest issue in commenting upon the fact : 
 
 " The tendency of deposits in banks working in 
 progressive districts is to increase, and we may feel 
 certain that this will be the case with the customers 
 of the banks of the United States. The 9,000,000 
 depositors in banks form a force unparalleled in any 
 other country. The inference we may draw from the 
 figures before us is that we must look for sharper com- 
 petition on the other side of the Atlantic, and while 
 with care and prudence we may hope to hold our own t 
 it is only by the most careful employment of our re- 
 sources that we may hope to retain our position." 
 
 The advocates of the free coinage of silver have 
 continually protested that the end sought by them is 
 the coinage of silver under the conditions which pre- 
 vailed prior to 1873. A casual investigation even 
 will prove that they do not desire any such thing. 
 The idea in the enactment in every coinage law from 
 the establishment of the government to 1873 was to 
 have the coins be approximately of the same com- 
 mercial value without the government's stamp affixed, 
 as they would do with it. A very small fractional 
 difference was to be made in favor of the coins simply 
 to prevent their being too readily sent to the melting 
 pot. Whatever increased value the stamped coin had 
 over the unstamped metal was the result of the con- 
 venience arising from its use in business transactions. 
 It never was seriously suggested by any advocate of the 
 free coinage of silver until the present agitation that 
 the commercial value of the metal should be disre- 
 
JAMES H. ECKELS. 405 
 
 garded and an artificial value fixed by law. It is 
 to be remembered that the ratio of 16 to 1 in 1895 is 
 a very different thing from the ratio of 16 to 1 in 1873. 
 The very fact that those who control this movement 
 object to adopting as a part of their silver creed any- 
 thing more from the coinage laws prior to 1873 than 
 the mere figures of ratio is sufficient to prove that 
 they are insincere in their demand for the enactment of 
 a law similar to the earlier coinage acts. If not, they 
 would accept the spirit and the reason of the law as 
 readily as the bare ratio which they desire to take from 
 it. The cause of their not so doing is to be found in 
 the change in the relative value of the bullion value of 
 a silver dollar then and now. In 1873 the average 
 value of the bullion in the silvar dollar was $ 1.004. 
 The first quarter of 1895 it was 10.469. A careful 
 calculation shows that pure silver was worth in 1876 
 only 89 per cent, of its value in 1872; in 1881 only 
 84 per cent.; in 1866 only 77 per cent.; in 1889 only 
 70.9 per cent., and in the first quarter of 1895 only 
 46 per cent. During the first five years it lost 11 per 
 cent, of its value; during the first ten, 16 per cent.; 
 during the first fifteen, 23 per cent., and during the 
 twenty-three years since 1872, 54 per cent. It must 
 be manifest that a metal so changeable in value is 
 wholly unsuited for the purposes of being a standard 
 of value. 
 
 Louis Wolowski, in his testimony before the French 
 commission of inquiry into the principles and facts 
 governing the monetary and fiduciary circulation of 
 1865, said : 
 
 44 The instrument of exchange should always be a 
 
406 SILVER AND GOLD. 
 
 measure, and at the same time an equivalent; it should 
 be constantly equal to itself (that is always have the 
 same value); it should be susceptible of conservation 
 without abration or loss, and circulate with facility ; it 
 should be divisible into fractious reunitable at will ; it 
 should be made of a substance not destined for de- 
 structive consumption, in order that the existent mass 
 thereof may be only slightly affected by new additions 
 thereto, for it cannot be too frequently repeated that 
 the first and fundamental condition of the measure of 
 value is its stability during the periods which em- 
 brace the habitual transactions among men." 
 
 The history of silver throughout these years when 
 the production of it has so far exceeded that which was 
 prior to 1873 only sufficient for the use and the waste 
 of it demonstrates that it neither meets the requisites 
 of a standard of value as given by Wolowski nor that 
 demanded by Leon Say, who stated that the most es- 
 sential quality of money is " that in the variations of 
 its value, that is of the metal of which it is composed, 
 there should be as few fluctuations as possible. These 
 fluctuations will be smaller in proportion as the metal 
 in question enters more extensively and regularly into 
 trade, has a constant production and one proportionate to 
 human wants, profits and efforts, a well-guaranteed manu- 
 facture, a conventional legal tender power in conform- 
 ity with that recognized by public opinion, and is 
 issued in the form of coin, scrupulously measured by 
 strict necessity." 
 
 It has long been held that the best theoretical 
 money would be of gold and silver coins stamped with 
 no other mark excepting those indicating their weight 
 and fineness, and no other value than their current 
 commercial value. Such was the system in vogue at a 
 
JAMES H. ECKELS. 407 
 
 time jfVtj^ gifcju5ercial transactions were few in number 
 and involving smnll amounts, but now that the number 
 of them is almost beyond calculation, and the sum total 
 of values affected by them correspondingly vast, the 
 world demands as his been well said "a money sys- 
 tem which requires of those who use it neither cal- 
 culation nor even reflection." Metal moneys having 
 in the first instance been based wholly upon com- 
 mercial values the friends of the free coinage of silver 
 in this country must, in ojder to prove their fairness 
 and unwillingness to be party to the issuing of a dol- 
 lar which does not have the value of a dollar, cease 
 insisting upon the coinage of silver at any other ratio 
 than its commercial ratio. 
 
 It is problematical whether o\ no silver can ever 
 again be accepted as a money nuetal of other than a 
 secondary class, even though all the jreat commercial 
 nations of the world should join in an international 
 agreement to maintain it on a footing With gold. It is 
 absolutely certain that the United Stateo is unable of 
 itself to force its so being accepted. Thvj position of 
 the people of this country is that of a debtor and not a 
 creditor nation. As long as we are compellod to bor- 
 row and to seek for investors in American enterprises 
 among the moneyed people of England and tho conti- 
 nent we are not in a position to maintain a defiant at- 
 titude on this silver question. It may be heroic w to 
 do, but it is none the less absurd. It will be time 
 enough to undertake to reverse the facts of all financial 
 history and monetary experience when we are free 
 from debt and are lending to our European neighbors. 
 Until that point is reached, however, we must recog- 
 nize that this whole question must be dealt with from 
 
408 
 
 3ILVEB AND GOLD. 
 
 a practical and not from a sentimental standpoint, and 
 we must deal with the facts as they are and not as we 
 wish they might be. 
 
WILLIAM P. ST. JOHN. 409 
 
 CHAPTER XXIII. 
 
 BY WM. P. ST. JOHN, PRESIDENT OF THE MERCANTILE 
 NATIONAL BANK OF NEW YORK. 
 
 UNDER official dictation, tutored by the one most 
 aggressive of all our handful of " goldites " in the 
 United States, congress fiddles with bank notes while 
 the burning issue is our primary money. 
 
 Identically tutored, our Chief Executive has required 
 his Secretary to abandon the option conferred by law 
 upon the United States and grant to holders of the 
 United States notes the right to exact gold always, 
 silver never, as their redeeming coin. Had the option 
 to redeem in silver dollars been exercised boldly at the 
 time when only 3,000,000 silver dollars were owned by 
 the United States, with an ownership of 1116,000,000 
 gold, any possible alarm could have been laughed to 
 scorn. To attempt to seize upon and exercise the op- 
 tion now, or under immediately prospective conditions 
 of our treasury, would be to- court all the perils of 
 disaster. 
 
 Identically tutored, the demand appears, "one step 
 at a time," to substitute bank promises of money for 
 $907,000,000 of the primary and secondary money 
 which they promise. Were the scheme adopted and 
 successful, the result achieved would be $907,000,000 
 of new bank promises, $207,000,000 of existing bank 
 promises, and $1,700,000,000 of promises called depos- 
 its, an aggregate of $2,854,000,000 of national-bank 
 
SILVER AND GOLD. 
 
 liabilities payable on demand, resting or wrangling on 
 our available supplies of gold. The pretense of the 
 tuition is that this is "sound finance." 
 
 Kedundant bank notes have invariably banished gold 
 and silver. They never were suspected of enticing 
 either into money. And national banks cannot hope 
 for popular consent to their redeeming their circulating 
 notes in officially discarded paper dollars. 
 
 Money is the creature of law. Money is all domestic. 
 Our $10 gold piece is accounted 258 grains of nine- 
 tenths fine gold when beyond the jurisdiction of the 
 United States. 
 
 Money and the yardstick have nothing in common. 
 The yardstick is an exact, unvarying measure of length. 
 Money is an uncertain, variable measure of varying 
 values. The yardstick is not bartered for commodities. 
 Money is the means of acquisition and momentarily the 
 measure of value of the thing acquired. The yard- 
 stick is a unit of length. The dollar as a " unit of 
 value" is preposterous. Our Hamilton-Jefferson stat- 
 ute, founding the mint, provided a dollar as our " unit 
 of account." That dollar of 1792 and the dollar of 
 1894 contain identically 371.25 grains of silver. 
 
 The aggregate of all money afloat and in bank in the 
 United States is our true measure of normal value of 
 commodities here. The aggregate of money of all na- 
 tions trading internationally is the measure of normal 
 value of all commodities consumed by all. Therefore, 
 to enlarge the aggregate of money in the trading world 
 is to raise normal prices of commodities everywhere. 
 To enlarge the aggregate of money in the United States 
 is to raise normal prices for home and internationally 
 consumed commodities here. Per contra, to diminish 
 
WILLIAM P. ST. JOHN. . 411 
 
 the aggregate of money in the United States is to lower 
 all normal prices here ; and to diminish the world's ag- 
 gregate of money is to lower all normal prices of inter- 
 nationally moving commodities in all the trading 
 world. 
 
 Omniscience and infinite integrity in law-making, but 
 nothing short of these, would yield perfection in money. 
 Perfection in money, thus provided, would involve the 
 use of neither gold nor silver, nor any other commodity. 
 
 Now, if my caution against it will be quoted along 
 with my description of it, I will describe perfect money, 
 to wit: 
 
 Any convenient substance of about the "intrinsic" 
 properties of silk-ribbed paper prepared to defy the 
 counterfeiter, issued by authority of the law of the 
 United States, and promising no redemption whatever, 
 except acceptance for all dues to the United States, 
 and also made receivable and payable for all dues and 
 debts, public and private, within the jurisdiction of the 
 United States. But my caution against any attempt at 
 such perfection in money of the United States is that 
 imperfect humanity has not been more safe to handle 
 any near approach to it, nor with any other than com- 
 modity money, than children are to toy with keen -edged 
 tools. 
 
 If United States notes of 1862 and treasury notes 
 of 1890, together $497,000,000 were retired, they might 
 all be replaced with logically perfect money as de- 
 scribed, provided silver dollars and certificates and bank 
 notes were also all retired. The success of the issue 
 would insure overissue, and then collapse. 
 
 Bank notes differ only in degree from treasury notes, 
 for this same peril is lurking in them. The wary can es- 
 
412 SILVER AND GOLD. 
 
 cape a degree of peril in the bank note, refusing it as 
 not a legal tender. But the peril is in the bank note, 
 nevertheless, as Jefferson and Andrew Jackson knew. 
 Nature's restrictions' upon the world's supplies of gold 
 and silver, and the burden of the art and industrial 
 uses for these commodities, make these safer than ir- 
 redeemable paper as our tool of trade. 
 
 Gold bullion and United States gold coin enter 
 Europe with one and the same right conferred by law, 
 the right of transition into English money at the price 
 of 3 17s. 10J<#. per Troy ounce, eleven-twelfths and 1 
 penny-weight fine. By law, France, Germany, and the 
 other important continental states similarly endow 
 gold. And, by virtue of our law. gold carries the right 
 of transition into the money of the United States at 
 the fixed price of 23.22 grains pure, or 25.8 grains nine- 
 tenths fine, for a dollar. 
 
 Thus, by law, the market price and mint price of gold 
 are one and the same, so long as there is gold produced 
 each year more than the arts and industries and India 
 absorb. For so long, gold in the lump, its weight and 
 fineness being known, is the equivalent of coin in 
 Europe and the United States, for the reason that the 
 possessors of gold will accept no lower price while the 
 mint price is offered in lawful money at the mint ; and 
 artisans will not pay more for gold because it is obtain- 
 able at the mint price by melting the coin. 
 
 Imagine all these mints of Europe and the United 
 States to deprive gold of all further right of transition 
 into money. Imagine the law of each of all these na- 
 tions to grant to silver exclusively the right of transi- 
 tion into the money of each, at one price, equivalent to 
 371.25 grains pure (412.5 grains nine-tenths fine) for a 
 
WILLIAM P. ST. JOHN. 413 
 
 dollar. Thenceforth the " price of silver " in Europe 
 and the United States would be this one mint price. 
 Silver in the lump then, as gold now, its weight and 
 fineness being known, would be the equivalent of coin. 
 Possessors of silver then would not accept less than 
 this one mint price for it, for the reason that lawful 
 money could be had for it, at this price, at the mint j 
 and the artisan would pay no more for silver because 
 he could obtain it at this mint price by melting silver 
 coin. 
 
 But, with the support of mints withdrawn from gold 
 and provided there is, as some economists aver, a yearly 
 production of gold, neighboring 825,000,000 more than 
 the arts, industries, and India absorb, the market price 
 of gold would fall rapidly until the price attained would 
 permit the lower arts, in utensils and the like, to absorb 
 the surplus gold. Exactly this result is evident in the 
 world's withdrawal of mint support from silver, but 
 much less rapidly attained. 
 
 Next, imagine all these mints of Europe and the 
 United States to grant alike to gold and silver the right 
 of transition into their money at the will of the pos- 
 sessor, at one price for gold, equivalent to 23.22 grains 
 for a dollar ; and at one price for silver, equivalent to 
 371.25 grains for a dollar, all the coins resulting to be 
 unlimited legal tender within the territory of the na- 
 tion coining them. If gold is produced each year more 
 than the arts, industries, and India absorb, the one only 
 use for the surplus is employment as money. If there 
 were silver produced each year other than is likewise 
 absorbed, and no one doubts it, the only use for such 
 surplus silver would be employment as mone} r . Hence, 
 for so long as there continued to be any surplus of goW 
 
414 SILVER AND GOLD. 
 
 and any surplus of silver over the said art absorption 
 of each, and provided the surplus of neither metal were 
 sufficient alone for the world's entire need of money, 
 for so long the mint price and market price would be 
 one for gold, and the mint price and market price would 
 be one for silver. Which would mean that the one 
 mint price for gold and the one mint price for silver 
 would be the universal market price for each ; and 
 would mean universal parity of the gold and silver coins 
 at the ratio established by these mints. 
 
 This is bimetallism by a concert of laws. It does 
 not seem akin to the attempts which our " goldites " 
 would thrust upon us ; as, for instance, the setting up 
 of a universal price for each of all commodities, or for 
 any one of them so abundant everywhere as iron. 
 
 Among other "silver lunatics" sanctioning the con- 
 fidence that bimetallism thus attempted could not fail, 
 are the learned professors of political economy in the 
 colleges of London, Oxford, Cambridge, and Edinburg, 
 anfl the late De Laveleye with others of the profession 
 on the continent, and a host of men of other callings 
 eminent throughout Europe and in the United States. 
 
 The aforesaid self-same tutor, to the contrary not j 
 withstanding, the abandonment of silver and substitu- 
 tion of gold alone as the primary money of unlimited 
 coinage is not the "natural selection of commerce," but 
 the ignorant or vicious achievement of statecraft. 
 
 The subjects of England were deprived of their right 
 to convert silver into money temporarily first in 1798 
 and finally in 1816 under conditions of little public 
 concern, for the reason that irredeemable bank notes 
 were England's full substitute for money. Pre- 
 cisely similarly the people of the United States 
 
THOMAS B. REED, 
 
 
WILLIAM P. ST. JOHN. 417 
 
 were deprived of their right to convert silver into 
 money, a right enjoyed for eighty years, while irredeem- 
 able paper of sundry kinds and excessive volume sup- 
 planted gold and silver money in the United States. 
 
 [Extract of note of Sir David Barbour (British finance 
 secretary to India) October 20, 1887.] 
 
 " In no portion of Lord Liverpool's 4 Treatise on the 
 coins of the realm ' is there any allusion to : (1) The 
 treasury order of 25th October. 1697, directing that 
 guineas should be taken at 22s. each ; (2) the council 
 order of 8th September, 1698, referring the question of 
 the high rate of the guinea to the council of trade ; (3) 
 the report of the council of trade, dated 22(1 September, 
 1698 ; (4) the resolution of the House of Commons on 
 that report; (5) the orders of the treasury to receive 
 the guineas on public account at 21s. Qd. each, 'and 
 not otherwise.' 
 
 " With the publication of these documents falls Lord 
 Liverpool's statement that the English people, by gen- 
 eral consent and without any interposition of public 
 authority, attached a higher value to the guinea after 
 the great recoinage than the market value would 
 justify ; and with the fall of the alleged fact must dis- 
 appear the conclusion drawn from it, namely, that with 
 the increase of wealth and commerce the English 
 people in 1698 had come to prefer gold to silver. And 
 with the disappearance of this hypothesis there disap- 
 pears the only evidence brought forward in support of 
 the theory regarding the progress of wealthy countries 
 from silver to gold, which Lord Liverpool invented in 
 order to overthrow Locke's opinion that ' gold is not 
 the money of the world, or measure of commerce, nor 
 fit to be so.' 
 
 "Lord Liverpool's theory may, of course, be sound, 
 though the facts on which he relied in 1805 were im- 
 aginary ; on the other hand, it may fairly be said that 
 it was the acceptance of the theory on the authority 
 24 
 
418 SILVER AMD GOLD. 
 
 of Lord Liverpool which brought about in the nine- 
 teenth century that state of affairs which is now held 
 to prove the soundness of the theory. * * * 
 
 " How Lord Liverpool, or those who acted under his 
 orders, came to overlook the existence of the documents 
 which I have quoted, arid which at that time would 
 have destroyed the basis of his argument, is unaccount- 
 able." 
 
 But if any attempt of ours to achieve bimetallism 
 independently is to yield silver as our only money, my 
 conviction is the conviction of Robert Morris, namely, 
 that silver is preferable to gold if either is to be the 
 only current money of the United States. The pres- 
 ent Secretary of the Treasury of the United States and 
 his associates of the President's Cabinet have lately 
 shared a well-advertised effort to heap posthumous 
 honors on Robert Morris. 
 
 The repeal of our " Sherman Act," November 1, 
 1893, following the closing of India's mints in June 
 against the further coining of silver on private account, 
 severed the last link that coupled silver to its crippled 
 right of transition into the money of the Western 
 world. Hence, just thirteen months ago, for the first 
 time in history, the commercial world began a free con- 
 cert of absolutely blind experiment in money. 
 
 The latest estimates of Soetbeer, in his almost post- 
 humous publication of 1892, accorded little, if any, new 
 gold from the mines each year to the world's increase 
 of money. Now observe that while the population of 
 the United States enlarges at a rate equivalent to add- 
 ing the population of Mexico to ours within seven 
 years, or of adding the population of Canada and all 
 other British possessions in North America within three 
 
WILLIAM P. ST. JOHN. 419 
 
 J-^JK Hiis absolutely blind experiment which the 
 UnitecX States shares demands that whoever would in- 
 crease the world's aggregate of money by the equiva- 
 lent of 11,000 must provide 4.03 pounds Troy of 
 gold. 
 
 Within jhe last half of the brief period succeeding 
 1873, 10 cents a pound was a sentimental price for cot- 
 ton and " dollar wheat " was a sentimental term. Re- 
 cently, 5 cents a pound in towns and 4J cents on the 
 plantation, 50 cents a pound and " hog feed " on the 
 farm were prices current. The dollar of the United 
 States, half an inch in width and a thirty-second thick, 
 is thus become $2 with which to buy the sweat and toil 
 and anxieties of a season, at the very head and font oi 
 prosperity in the United States. While thus the dollai 
 of the United States is worth 2 bushels of wheat or 20 
 pounds of cotton, it gauges the prosperity of the 
 United States at 1J cents a year, if invested for the 
 period of sixty days in strictly prime commercial paper 
 of New York. 
 
 The flood of our prosperity cannot rise higher than 
 its source. The font is where the nourished earth 
 yields her own increase and for toil returns a hundred- 
 fold. It follows that the conditions contemplated 
 must alter presently, or the want of a traveling public 
 and the lack of sufficiently liberal movements of freight, 
 at profitable rates, will shrink the earnings of certain of 
 our main trunk lines of railway into a deficiency of any 
 dividends and, latter, into default of interest on their 
 bonds. Unless relief of law ensues without delay, 
 choice parcels of real estate in New York city will 
 manifest declines in prices, exceeding 20 per cent., be- 
 tween sales in January, 1893, and December, 1896. 
 
420 SILVER AND GOLD. 
 
 I am well aware that moderate demand upon liberal 
 supplies of commodities produced at low cost and dis- 
 tributed cheaply will yield low prices. On these terms, 
 low prices stimulate moderate demand into a liberal 
 demand upon the same supplies, and so tend to recover 
 prices. On this basis low prices of our staple necessi- 
 ties are desirable. In such variations of demand re- 
 lative to such supplies, the producer ma} gather amid 
 the fluctuation of prices, his fair share of the advan- 
 tages conferred on all by his abundance. 
 
 But, for the reason that the producer does not share 
 the general advantage of the abundance of his supplies, 
 the United States at large is sufferer. Relief must be 
 provided, and for that achievement we propose that, at 
 all hazards, the United States shall abandon experi- 
 ment. 
 
 We ask the congress now sitting to restore our 
 Hamilton- Jefferson coinage system, founded with the 
 mint, maintained for eighty years without complaint, 
 and overthrown unobservedly at a time when neither 
 gold nor silver was our current money. 
 
 On December 6, I submitted to the Chamber of Com- 
 merce a developed plan to restore, or attempt, bimet- 
 allism independently, the plan providing the modern 
 convenience of paper substitutes for coin and provid- 
 ing ample means to stifle any possible money panic aris- 
 ing with the enactment. No moment could be more 
 propitious than the present for any such attempt. Idle 
 accumulations of money in our important money cen- 
 ters, like the present, are rare. 
 
 Our " goldites " antagonize every such proposal with 
 two objections, to wit : 
 
 (1) That such legislation is superfluous because " if 
 
WILLIAM P. ST. JOHN. 42l 
 
 there is not gold enough for all, there is gold enough 
 for us. * * * We can command gold in competi- 
 tion with all the nations. * * * The United States 
 is the largest and best source of supply of the commod- 
 ities that the world most needs cotton, wheat, pro- 
 visions, petroleum, and the like." 
 
 (2) That to reopen our mints to silver without limit 
 while offering coinage to gold without limit will merely 
 substitute silver monometallism for gold monometallism 
 in the United States. They mean that the proposed 
 enactment will yield silver dollars and paper redeem- 
 able in silver dollars as our only money, and for the 
 reason that it will banish gold money and expel it from 
 the United States. 
 
 We adopt, for argument's sake, both of their predic- 
 tions as the assurance of our safety in making the at- 
 tempt. 
 
 Our ability to command gold in competition with na- 
 tions striving for the meager supply of gold available to 
 money would depend upon the further sacrifice of our 
 producers of petroleum, provisions, wheat, cotton, and 
 the like. Lower and lower prices for these elementary 
 essentials of our prosperity must pursue a foreign 
 market, and every drain of Europe's gold to us as our 
 return for them would further lower Europe's prices 
 for all commodities, including any more of these she 
 buys. 
 
 By our proposal, on the contrary, the United States 
 provides itself the convenient ability to part with gold 
 composedly. Instead of our present restriction to gold 
 alone as our tremulous necessity, we propose to be able 
 to loan our gold to Europe for our own sakes, selfishly. 
 If, as our Mint Director estimates, we have $600,000,- 
 
422 SILVER AND GOLD. 
 
 000 of gold and $20,000,000 annually produced in ex- 
 cess of our needs in the arts and industries, to spare a 
 liberal portion to Europe, having a convenient abun- 
 dance of domestic money at home, is to loan Europe the 
 vehicle with which to carry our prosperity. To in- 
 crease thereby Europe's aggregate of money is to raise 
 normal prices of all commodities in Europe, including 
 those for which the United States is Europe's best 
 source of supply. Therefore, diametrically the op- 
 posite in achievement to what our "goldites" urge, we 
 would enlarge Europe's demand for our surplus petro- 
 leum, provisions, cotton, and wheat, and upon a higher 
 plane of prices for them as she buys. 
 
 Imagine, as the immediate achievement of our pro- 
 posed enactment silver dollars and paper redeemable in 
 silver dollars to be the only money of the United States. 
 The tendency first evident will be its restriction of our 
 importations of European products. This is evident 
 under India's silver monometallism in her relation to 
 the outside world. But a home experience may be re- 
 called : 
 
 During the period of plethoric State bank notes in 
 the United States, when a New York merchant had 
 sold to western and southern merchants and bills were 
 due, his collector obtaining local bank notes in a west- 
 ern city would invest in grain or flour, in a southern 
 city would invest in cotton. Shipping the flour and 
 cotton to New York, the sales would realize New York 
 bank notes. The operation was thus equivalent to 
 shipping New York bank notes from the western or 
 southern cities to New York. The like operation be- 
 tween the United States and Europe for our interna- 
 tional trade settlements would take the place of gold 
 
WILLIAM P. ST. JOHN. 423 
 
 shipments, if gold were hoarded for a high premium, as 
 feared. Each r.ui'h operation would swell the volume 
 of our exports Df commodities and benefit, primarily, 
 those for w V>m we must be most concerned, our pro- 
 ducers. 
 
 But the likelihood of any need of such an 'operation 
 as a par 4 of the contemplation of the New York mer- 
 chant in selling to the west and south tended to make 
 him undisposed to sell there. To such extent the south- 
 ed and western importations from New York were 
 lessened. To the like extent our foreign importations 
 will be lessened under our silver money regime, to the 
 advantage of our home manufacturers as against the 
 foreign manufacturers all the time. But in our ex- 
 perience, when the New York merchant or manufac- 
 turer found his home market not broad enough for all 
 his wares, as was frequently the case, his surplus was 
 sold west and south at as low price and sometimes even 
 lower prices than to customers at home. The home 
 market price, being for the greater portion of their mer- 
 chandise was maintained, at a sacrifice of profit on the 
 moderate surplus sold elsewhere. Similarly Manches- 
 ter, Lyons, and German manufacturers would exper- 
 ience the restriction of our silver money upon them. 
 Our importations of Europe's products are to some ex- 
 tent a surplus which she must sell. To that extent our 
 importations of foreign products will continue to for- 
 eign disadvantage and our gain. 
 
 But, because we are Europe's " best source of supply" 
 for our great surplus of staple commodities, Europe will 
 buy of us, even though we do not buy of her. AB, for 
 instance, we buy from Cuba $75,000,000 worth of goods 
 a year and sell to Cuba 112,000,000 to $25,000,000 only; 
 
424 SILVER AND GOLD. 
 
 or as Brazil finds a market here for 170,000,000 of her 
 commodities and buys 140,000,000 only of our commod- 
 ities in return ; and finally as England, on the con- 
 trary, is debtor to the United States for an excess of 
 $100,000,000 a year by average in our mutual barter of 
 commodities with her. 
 
 Therefore, with our silver money restriction upon im- 
 portations setting all our spindles turning, employing 
 operatives at full time and these operatives made 
 thereby to enlarge our aggregate of home consumers of 
 all home products ; with our trade settlements in mer- 
 chandise serving to enlarge the exportations of our 
 spare products ; with Europe's prices for our products 
 enchanced by our enlargement of Europe's aggregate of 
 money, our achievement next evident will be a credit 
 balance of trade established in Europe for the merchants 
 of the United States. At that point exchange on Lon- 
 don would sell in Wall street at a discount. This 
 means a drift on gold payable seven days from date 
 offered at a discount in standard silver dollars the de- 
 spised, stigmatized 50-cent silver piece in Wall street, 
 held at a premium over gold in London. It means our 
 silver dollars and our gold coin at par bimetallism a 
 reality in the United States. Our prosperity as her ex- 
 ample, and to such a degree at her expense, is likely to 
 enforce the influence of Manchester's opinion of Eng- 
 lish monometallism, the result of which may mean the 
 abandonment of her vicious monetary system by En- 
 gland. 
 
 Europe's only silver is her money. Europe's silver 
 coin is valued from 3.06 cents to over 13.33 cents per 
 dollar more than ours. Her "silver pots and spoons " 
 carry the additional price of labor in th-em. She will 
 
WILLIAM P. ST. JOHN. 425 
 
 ship us gold, therefore, rather than silver, at a minimum 
 preference of 3 per cent. 
 
 Our " goldites" would dismiss all this on the ground 
 of an over- abundance of silver. Had the most influen- 
 tial doctrinaire in money in Europe been as influential 
 with lawmakers in 1853 as our aforesaid tutor was in- 
 fluential with law dictators in 1893 France would have 
 closed her mints to gold. Silver monometallism would 
 have been the coinage system of the world. Chevalier 
 threatened France with an abundance of gold as cheap 
 and overwhelming as iron. Silver is the over-abundant 
 prediction of our influential doctrinaires. Note, how- 
 ever, that $5,000,000 worth of silver bullion is at this 
 moment an overestimate for the world's distributing 
 markets' supplies of silver. 
 
 Finally, our "goldites," and in particular our tutor 
 aforesaid, distort history for proof that bimetallism is a 
 failure ; and that independent bimetallism in the United 
 States during eighty years furnished the experience for 
 the certainty of failure if attempted now. The facts, 
 justly handled, refute both assertions flatly. 
 
 The world's great mints were never open to gold and 
 silver without limit on a single price among them for 
 each metal. In consequence every seeming divergence 
 between a market price and a mint price for either 
 metal was invariably a difference between mint prices. 
 Divergence between one mint price and another, or 
 other mint prices, hao to answer in history for every 
 annoying flight of gold or of silver internationally. By 
 undervaluing gold relative to silver, compared with the 
 French mint's valuation of gold relative to silver, our 
 coinage act of 1792 caused our merchants to choose gold 
 preferably to silver for their foreign settlements, follow* 
 
426 SILVER AND GOLD. 
 
 ing 1792. By undervaluing silver relative to gold, com- 
 pared with the French mint's relative valuation of the 
 two, in our coinage act of 1834 we made our merchants 
 choose silver preferably to gold for foreign settlements 
 thereafter. This divergence between mint prices not 
 divergence between our mint price and any market 
 price cost us gold in one period and cost us silver in 
 the other, for the reason only that during most of both 
 periods we were usually the debtors in balancing our 
 foreign trade. 
 
 Our " goldite " assertion that our said act of 1792 
 effectually demonetized gold by expelling it from the 
 country, and that our act of 1834 effectually demone- 
 tized silver by expelling it, are alike refuted by indis- 
 putable records, not made for argument, but reporting 
 facts. Thus for the twelve years ending 1805 our gold 
 coinage exceeded our silver coinage. In the eighteen 
 years following our gold coinage was half our silver 
 coinage. In the nine years ending 1833 our gold coin- 
 age was one-fourth our silver coinage. And in this 
 same period of "banished gold" (?) our trade move- 
 ments of both metals were usually in one direction, 
 usually export in excess of import of both until ending 
 1823. In 1824 the net movement of the two was im- 
 port in excess of export ; 1825 refutes this gold-banish- 
 ing theory flatly by a net import of gold and a net ex- 
 port of silver. In the five years following, both metals 
 moved together again, import in excess of export. In 
 1831 our "goldites " are again refuted flatly by the net 
 import of gold with a net export of silver. Thereafter 
 gold and silver both show import in excess of export 
 until 1884. 
 
 And in the period following 1884, while " banished 
 
WILLIAM P. ST. JOHN. 427 
 
 silver" (?) is the assumption of our "goldites," our 
 silver coinage in the first eight years equaled our silver 
 coinage of the eight years prior. Our silver coinage in 
 these first eight years exceeded by 13,000,000 our coin- 
 age of gold. In the second eight years ending 1850 we 
 coined 818,000,000 of silver, although we were not pro- 
 ducing silver, but were producing gold in amounts 
 more vast than the world had known. And in the first 
 four years of this " silver banished " (?) period our im- 
 ports of silver exceeded our exports of silver by $6,- 
 000,000 more than our imports exceeded our exports of 
 gold. For the three years ending 1842 the net move- 
 ment of both metals was together, export in excess of 
 import. And nine years after this act of 1834 our net 
 movement was import in excess of export for gold and 
 silver both. Our " goldites " are refuted notably and 
 finally in the fact that prior to our civil war no really 
 important movement of the one metal inward and the 
 other metal outward is the record of any year. 
 
 And note also in this connection and at this particular 
 moment, besides the considerable sum in coins of for- 
 eign nations, circulating as our legal tender until 1857, 
 and besides the unlimited legal tender functions of half 
 dollars, quarters, and dimes until 1853, and besides the 
 fact that 80 per cent, of all the silver dollars coined 
 were coined after 1834, this fact, namely, that redun- 
 dant bank notes which increased by more than $200,000,- 
 000 in a period of ten years, were tending all the time 
 to house both gold and silver in quiet bank reserves. 
 
 Finally, I regret profoundly that space forbids the 
 details of independent bimetallism in France and the 
 record of her mint dictation of the world's market price 
 for gold and silver during a period of seventy yearst 
 
428 
 
 8ILVET1 AND GOLD. 
 
 On the closing of her mints against silver in 1874 
 France had $900,000,000 of gold and $700,000,000 of 
 silver circulating side by side as money. Her popula- 
 tion barely exceeded 35,000,000. Our present popula- 
 tion exceeds 65,000,000, with a promise of exceeding 
 the aggregate population of Great Britain and France 
 within ten years ; and our use for gold and silver is for 
 a circulation over a territory seventeen times the area 
 of France. 
 
JC. S. LACEY. 429 
 
 CHAPTER XXIV. 
 
 i SYSTEM OF CURRENCY BY E. S. LACEY, EX-U. S* 
 COMPTROLLER. 
 
 THE prosperity of the people of this country can 
 never rest upon a solid foundation until the questions 
 relating to coinage and currency are settled perma- 
 nently and settled correctly. Money is the life-blood 
 of the commercial body, and the latter cannot enjoy 
 sound health unless the former meets all just require- 
 ments as to quantity, quality and activity. 
 
 Primary money constitutes the standard and meas- 
 ure of value, arid must consist of gold, or silver, or 
 gold and silver combined. Our present standard is 
 gold. Considered in the light of either history or 
 science, it seems quite impossible, under present condi- 
 tions, for the United States to undertake the free and 
 unlhr/\ted coinage of full legal tender silver without 
 its resulting in the expulsion of gold, and the adoption 
 of silver as the sole standard and measure of value. 
 The condition of the countries now using the silver 
 standard is not one of prosperity. Mexico, the states 
 of South and Central America, and the nations of Asia 
 are the countries now in this category. The unhappy 
 condition of the producers in these countries, and the 
 low state of civilization prevailing, form parts of a pic- 
 ture which cannot be inviting to the citizens of the 
 United States. All the great commercial nations of 
 Europe long ago adopted the gold standard. While 
 
430 SILVER AND GOLD. 
 
 depression has characterized the business activities of 
 all countries during the past two years, it is apparent 
 that the condition of the people in the silver standard 
 countries is by far the most deplorable. It seems de- 
 monstrable that our condition under a silver standard 
 would be far from satisfactory, but the period of transi- 
 tion from gold to silver as standard money would un- 
 doubtedly be the most disastrous known to any people. 
 
 It is of great importance that the battle of the 
 standards now in progress should be waged until a de- 
 cisive victory shall establish the right, for uncertainty 
 is fatal to every interest ; but whatever may be the de- 
 cision as to primary mone}', it is clear that radical re- 
 form as to our credit money is an absolute necessity. 
 It is imperative that we immediately proceed to supply 
 the people with credit money as a medium of exchange 
 amply secured, promptly redeemable in coin, and auto- 
 matically conforming in volume to the necessities of 
 business. To this end, the following propositions are 
 submitted : 
 
 1st. All gold coins and notes (except silver certifi- 
 cates) of a lower denomination than ten dollars to be 
 retired and reissued in notes of ten dollars and multi- 
 ples thereof. 
 
 2d. All silver certificates of a higher denomination 
 than five dollars to be retired, and reissued in denom- 
 inations of one, two and five dollars. 
 
 3d. The United States legal tender notes and the 
 treasury notes of 1890 to be funded into U. S. 3 per 
 cent. 50 year bonds, the government reserving the 
 right to call and pay, at the end of any fiscal year, 
 bonds equal in amount to the surplus revenue for that 
 period, the bonds so paid to be selected by lot. 
 
B. S. 
 
 4th. National banks to issue notes to the par of 
 United States bonds deposited to secure circulation, 
 and pay an annual tax of one-fourth of one per cent, 
 upon said notes. 
 
 5th. A redemption fund equal to 10 per cent, of said 
 note issues, to be maintained by said banks in the 
 United States Treasury for the purpose of redeeming 
 said notes at the office of every assistant treasurer of 
 the United States. 
 
 6th. One-third of that part of the lawful money re- 
 quired to be held by national banks in their own vaults 
 may consist of the notes of other national banks. 
 
 The first two propositions submitted are designed to 
 prevent the payment of custom duties in silver certifi- 
 cates or anything besides gold. If the government is 
 to meet its obligations in gold, all taxes and duties 
 should be paid in gold or its equivalent. In order to 
 accomplish this, we must use silver and silver certifi- 
 cates as domestic money. That is the use to which 
 silver is perfectly adapted, and it is important that this 
 sphere of activity be reserved therefor. There is in 
 circulation in the United States in gold coins, and in 
 paper notes below the denomination of ten dollars, be- 
 tween three and four hundred millions of dollars. If 
 these were retired, and silver certificates were issued 
 only in denominations of one, two and five dollars, 
 silver and silver certificates which have heretofore 
 caused us so much uneasiness would be absorbed in the 
 daily transactions of life ; they would be found in the 
 pockets of the people, in the till of the tradesman, and 
 not in the banks and custom houses of the country. 
 And so the first two propositions look to the utilizing 
 of silver, within its proper sphere. 
 
432 SILVER AND GOLD. 
 
 The third proposition is to fund the legal tender 
 notes, and the notes of 1890, into long 3 per cent, 
 lionds, for the purpose of getting the government out 
 of the business of issuing circulating notes, so that the 
 legal tender notes and the notes of 1890 cannot be 
 utilized for the purpose of exhausting the treasury oi 
 its gold supply. We have seen this process repeated 
 time and again, forcing the government to issue bonds 
 in order to provide a fund from which to redeem this 
 endless chain of legal tender notes. 
 
 The fourth proposition is to allow national banks to 
 issue notes to the par of United States bonds deposited 
 to secure circulation. This makes the issue of notes 
 perfectly secure, and there is no sound argument 
 against it. 
 
 Proposition No. 5 provides for increasing the bank 
 note redemption fund to ten per cent , and that bank 
 notes shall be redeemed at the office of every assistant 
 treasurer in the United States. Under the existing 
 system, the notes issued by a national bank are seldom 
 or never presented at its counter for redemption, and 
 so far as the redemption at Washington is concerned, 
 at least four-fifths of the notes redeemed are unfit for 
 circulation, so that it really amounts to nothing more 
 than the retirement of worn-out notes. This plan is 
 wholly inadequate. Redemption should proceed from 
 day to day precisely as does the redemption of drafts 
 and checks. There should be an active, every -day re- 
 demption of these notes in every prominent city, in 
 order that the volume may increase or diminish so as 
 to conform to the necessities of the business of the 
 country. It would be a hardship for national banks to 
 maintain a fund in every reserve city in the United 
 
WII.TJAM McKINLBY. 
 
B. S. LACEY. 435 
 
 States for the purpose of redeeming their notes. If 
 we incre'ase the deposit of the banks with the United 
 States government to 10 per cent., or, if necessary, to 
 15 per cent, of their circulation, and provide for the 
 redemption of their notes at every United States 
 Assistant Treasurer's office, our system would corre- 
 spond in some degree with the redemption of the notes 
 of the Canadian banks. The last named institutions 
 maintain branches in the leading cities of the Domin- 
 ion, and their notes are daily redeemed at all these 
 points.. 
 
 Such a system of redemption would produce the 
 elasticity absolutely essential in credit money. It is 
 impossible to have a greater or less volume of checks 
 and drafts than business requires, and under proper 
 methods of redemption, this would be equally true of 
 bank notes. 
 
 The last proposition, that one-third of that part of 
 the lawful reserve required to be held in the vaults of 
 the banks may consist of the notes of other banks, 
 grows out of the necessities of the case. If we fund 
 all the legal tender notes and the notes of 1890, noth- 
 ing would be available for the reserve of national 
 banks except gold, silver and silver certificates. Hence, 
 as silver would be employed as domestic money, there 
 might be a deficiency in the money available for bank 
 reserves. I can see no serious objection to counting, 
 as a part of the reserve (to the extent of one-third at 
 least), the notes of solvent banks, secured as those 
 notes will be in the plan proposed. This will not in- 
 terfere with the proper redemption of bank notes, be- 
 cause when the stock of gold and bank notes at a given 
 point is so small that it is only sufficient to supply the 
 25 
 
436 
 
 SILVER AND GOLD. 
 
 bank reserve, there will be no need of reducing the 
 volume of the currency by redemption. When the 
 stock is in excess of this amount then, of course, the 
 redemption will proceed as usual, and the necessary 
 contraction will result. 
 
 In my opinion, this plan would give us a sound cur- 
 rency, well secured, redeemable in coin at all the prin- 
 cipal cities, and so elastic as to conform to the neces- 
 sities of trade. Unless we can provide a paper cur- 
 rency possessing all these qualities, a proper solution 
 of the questions relating to the coinage of gold and 
 silver will not bring us the needed relief, and embar- 
 rassment and depression, panic and disaster, will peri- 
 odically afflict us. 
 
J. GAGE. 4ST 
 
 CHAPTER XXV. 
 
 SILVER AND THE BANKS BY LYMAN J. GAGE, PRES- 
 IDENT OF THE FIRST NATIONAL BANK, CHICAGO. 
 
 THE sliver question has been long under debate, 
 The issues involved have been affirmed, denied, and de- 
 clared to be unworthy of debate. Events now indicate 
 that these issues, whether good, bad, or indifferent, 
 must soon be met and forever settled. 
 
 My objections to silver do not lie in the fact that the 
 silver standard is peculiarly inimical to the interests of 
 banks. On the contrary, I affirm that aside from the 
 benefit conferred on silver mining interests, bankers 
 and money brokers are the only classes likely to reap 
 advantage therefrom. 
 
 How can this be ? The answer is not remote. It is 
 now generally admitted that what is called a double 
 standard is not a practical and endiuing possibility. 
 With gold and silver both current, one must be su- 
 perior and the other subordinate. At this hour such is 
 the fact with us. Gold is the recognized money of ac- 
 counts, and silver circulates in a reduced volume by 
 the sufferance of the commercial community, but in a 
 purely incidental and subordinate relation. The con- 
 tinued infiltration of silver coin and silver certificates 
 into the channels of circulation, supported and enforced 
 by the treasury department, threatens to soon reverse 
 the present relation of the two metals in our financial 
 system. When that shall be accomplished, silver will 
 
438 SILVER AND GOLD. 
 
 be the money of account, and our gold coin, possessed, 
 as it is, of a higher commercial value abroad, will 
 either be hoarded at home or seek its higher exchange- 
 ability in other countries. 
 
 I have said the banking class would find advantages 
 in this shifting of standards. It will occur in two ways 
 first, through the profit arising from exchanging with 
 the public the then absolute money, gold, for the new 
 medium, silver ; and second, with silver payments made 
 respectable, the banker will find as good protection as 
 he now enjoys against dangerous runs, with much 
 lower average reserves, and the difference he can lend 
 at a profit. 
 
 The bulky character of silver, also, will render the 
 banker's service to the public the more indispensable. 
 It is true that the purchasing power of his capital, 
 when counted in silver, will be much reduced ; but as 
 he is never a buyer always a lender this will not 
 consciously affect him, or, if it does, the conversion of 
 his present gold reserves, with their accompanying pre- 
 mium, into the lower silver standard, will nearly or 
 quite make good such loss. 
 
 Why, then, do I oppose a movement which promises 
 these benefits ? We oppose it, notwithstanding these 
 temporary and unworthy advantages, because, taught 
 by the nature of our relations to reason on these things, 
 we perceive, or honestly think we perceive, that the 
 adoption of silver as the money of account will be det- 
 rimental to our commercial and industrial interests, and 
 in the prosperity of these the nation's highest welfare 
 is closely bound. 
 
 How will our industrial and commercial interests be 
 adversely affected? We are a commercial people. 
 
LYMAN J. GAGE. 439 
 
 The extension of our trade and commerce over all seas 
 and with all people is recognized as a most desirable 
 object. At present the extent of this trade and com- 
 merce is limited. Older nations have naturally been in 
 advance of us in the world's markets, and we are met 
 by this embarrassment. 
 
 Another fact exists. It will not be disputed that for 
 all our commercial transactions with other people, set- 
 tlement must be made in the London money market. 
 If we buy sugar in Cuba, we pay for it in London. If 
 we sell goods in Brazil, we accept English funds there- 
 for, payable in London. So that, whether we buy or 
 sell in the course of our foreign trade, London is the 
 settling house for all this trade. At the present time 
 our financial system rests upon, and our commercial 
 values are measured by, the same metallic standard, 
 namely, gold coin. Our gold coin shipped to the Brit- 
 ish mint may be coined into sovereigns at a nominal 
 expense, and English sovereigns shipped to us may be 
 transmuted into our gold coins at no material cost. 
 Thus in the competitive struggle for a place in foreign 
 markets we enjoy a great advantage in using the same 
 metallic money standard. 
 
 The rise and fall of gold, or the rise and fall of com- 
 modities in their relation to gold, affect us in our great 
 competition in an exactly similar manner. We enter 
 the commercial contest with weapons equally matched. 
 It is now proposed voluntarily to surrender this impor- 
 tant position. With silver money of the present 
 weight and fineness the recognized and established 
 money account in our domestic affairs, we shall have 
 our industrial exchanges carried on under a money 
 standard many points removed from the settling house 
 
440 SILVER AND GOLD. 
 
 standard. Our domestic values will rise and fall in re- 
 lation to an entirely different standard. Can anyone 
 measure the deranging influence of this fact upon our 
 foreign trade ? But this indirect and ambiguous ad- 
 verse influence is not all. In every settlement abroad, 
 we shall be at the disadvantage of converting our do- 
 mestic money of account, silver, into the English 
 money of account, gold. And that this will always be 
 at a charge to us is plain, if we reflect a moment. 
 Thus, if in settling balances abroad specie shipments 
 are required, we must send either gold or silver. If we 
 shall send silver, it will be converted at our cost in the 
 English market into their money of account, gold. If, 
 then, we ship silver, it will disturb the previous equi- 
 librium of the market there and reduce the price. If 
 we shall send gold, its purchase in our own market will 
 disturb the previous equilibrium of our market and ad- 
 vance its price, and contrariwise, if in the settlement 
 of balances we receive money from abroad, it will be in 
 a like measure against us. 
 
 If we buy silver in the English market, it must en- 
 hance its purchase price. If we bring gold, it will find 
 a falling market here. Whether we pay or receive, 
 therefore, there will always be an unknown percentage 
 against us. Not only will this be so when actual bal- 
 ances are thus bodily transferred, but also in the ordi- 
 nary course of settlement through the medium of the 
 bills of exchange, which to a large extent meet and 
 cancel each other. The influences just described will 
 be taken into account by the exchange dealers, and a 
 larger margin of profit than is now required will of 
 necessity be exacted We all know that trade turns 
 upon small percentages, and the larger the transaction 
 
LYMAN J. GAGE. 441 
 
 the more influential is a fractional per cent. It follows, 
 then, that with silver the established money of account 
 at home, our foreign trade will be prejudiced and re- 
 stricted. It follows, also, that those who furnish prod- 
 ucts to go abroad must furnish them at a price some- 
 what less, and those who consume products brought 
 from abroad, must pay somewhat more, to make good 
 the increased margin for cost and risk in converting 
 the unrelated standards of the two countries. It will 
 give an increased profit to dealers in foreign exchange, 
 It will force the importer to add an extra per cent, tq 
 his selling price. It will make the exporter deduct a 
 percentage from his purchasing price. Who will suffer 
 therefrom ? The industrial classes who produce and 
 consume the exchangeable products. Why should this 
 wrong be perpetrated? Will it protect and advance 
 our silver interests ? If so, it will be a benefit to a class 
 aggregating in number about one hundred thousand. 
 Will it adversely affect the interests of our agricultural 
 and other industrial classes? If so, and it is this I 
 affirm, it will prejudice the welfare of the whole people, 
 for in these two classes our entire population is sub- 
 stantially included. 
 
442 SILVER AND GOLD. 
 
 CHAPTER XXVI. 
 
 Why unlimited Silver coinage should be restored at ike 
 ratio fixed by Congress in 1837 Sixteen to one of 
 
 BY SENATOR W. A. PEFFER. 
 
 THE " money question " covers a much wider field 
 than is presented in current discussions of the subject ; 
 and the " silver question " involves much more than is 
 commonly considered in the ordinary debates of the 
 day. 
 
 Silver coinage is desirable or necessary, if at all, 
 only because we use gold for money coins and there is 
 not gold enough in the country or the world to supply 
 the reasonable demands of the people for lawful tender 
 money in their daily business. 
 
 In order that we may proceed understandingly, let 
 us first consider 
 
 WHAT is MONEY? 
 
 Without dwelling on a discussion of definitions, it 
 may be said, in a general way, that money is any de- 
 vice used by common consent among men with which 
 to effect their cash exchanges and to pay their debts 
 and taxes. 
 
 Money is n cessary only because individual men and 
 women produce more of some kinds of property and 
 not as much of some other kinds as they need for their 
 
SENATOB W. A. PEFFEK. 443 
 
 own use, and they desire to exchange their surplus for 
 what they require of the surplus of other producers. 
 It often happens that the producer and the consumer 
 of an article are far apart, and it is therefore impracti- 
 cable for them to make an exchange of the particular 
 articles. This is the case with respect to the Kansas 
 farmer who raises wheat, and the planter of Brazil, 
 who raises coffee ; with the manufacturer of Chicago 
 who produces steel rails, and the farmer of China who 
 produces tea. Instances almost without number might 
 be cited to illustrate the proposition. It is mirrored 
 daily on the dinner table of any citizen. Note the 
 things resting there the viands of many kinds 
 where were they produced ? The vegetables and fruits 
 represent regions far apart ; the potatoes from Colorado, 
 celery from Michigan, cranberries from Wisconsin, and 
 strawberries from Florida. Bread made from California 
 wheat, rice grown in South Carolina, beef produced in 
 Wyoming, and mutton in Ohio. The porcelain and 
 glassware, and the cutlery where were they manufac- 
 tured? Some in the United States, some in France, 
 some in Austria. 
 
 These things are surplus productions of persons liv. 
 ing and working long distances from one another. One 
 produces enough for a thousand in some instances, and 
 he in turn is one of many that consume what some 
 other person made or raised many miles away. 
 
 Most of us are producers, all of us are consumers ; 
 and what we consume, besides what we ourselves have 
 produced, is part of the surplus that other persons 
 have produced. 
 
 It is this surplus of production that the producers 
 sell and that consumers buy. 
 
-U4 SILVER AND GOLD. 
 
 And because the two factors producer and con- 
 sumer live and work far apart, it is a great conveni- 
 ence to have home traders and merchants to collect the 
 surplus from those who produced it and distribute it 
 among those who wish to consume it. A very large 
 number of the people are engaged in this work of col- 
 lection and distribution as exporters, importers, car- 
 riers, commission men, brokers, bankers, merchants, 
 salesmen, etc. This is commerce. It would however, 
 be an impossible thing for men to carry on the traffic 
 of the world if they had no means of representing the 
 value of property dealt in, and some means of trans- 
 porting the values as well as for moving commodities. 
 Such means is found in what we call money, and in 
 certain forms of paper often used in place of money. 
 
 The amount of this surplus property which is being 
 moved from place to place in order to take it from the 
 persons who wish to sell it, and get it to those that 
 want to use it, is beyond our comprehension, and the 
 character and number of vehicles employed in trans- 
 portation are too many for enumeration. It is officially 
 stated that the property carried over American rail- 
 roads and canals and on our river boats and coasting 
 vessels, is greater in tonnage and value than that of 
 the combined foreign commerce oi all the great nations 
 of Europe. 
 
 It is to procure part of this enormous surplus that 
 most of the labor of the world is performed. The 
 greatest problem of life is to live to procure the 
 means of subsistence ; and what of our needs we can- 
 not supply from that which we ourselves produce, we 
 must supply out of what others have to spare. To 
 effect these exchanges, money is imperatively required. 
 
8ENATOH W. A. PEFFER. 145 
 
 ORIGIN OF MONEY. 
 
 Without stopping now to consider what other uses 
 there are for money, as, to pay for labor, to pay debts, 
 taxes and other demands upon our resources, let us 
 keep our minds closely on the subject of procuring 
 things we need for food, clothing, shelter things need- 
 ful to sustain life and to supply comforts and special 
 luxuries. It was in the development of commerce 
 that money was invented. Money is an invention-- 
 the fruit of discovery, just as machines are invented in 
 order to apply certain mechanical principles which 
 have been discovered. In the beginning of trade, there 
 was no money. All exchanges of property were made 
 for other property article for article. It was early dis- 
 covered that certain metals, because of their beauty in 
 the pure state, and because of their fineness of sub- 
 stance, their indestructibility, and their susceptibility to 
 high and brilliant polish, were peculiarly well adapted 
 to use in ornamenting the person, the home, the tem- 
 ple, the palace and all resorts of pleasure and passion. 
 Early it became common to adorn public building? 
 with articles made of gold and silver. Temples of 
 worship were, and still are, rich in golden ornaments 
 vases, statuary, and the like These metals were 
 articles of commerce exchanged A or other things ; and 
 because of their peculiar properties and uses, they 
 were universally sought after. They were special ob- 
 jects of prey on the part of invading armies. It is a 
 truth of history that " in the search for gold whole 
 races of people have been put to the sword, con- 
 tinents subjugated, religions and civilizations de- 
 stroyed." It is equally true that men and women of 
 
446 SILVER AND GOLD. 
 
 wealth and fashion have sacrificed honor and fame- 
 even life itself, for possession of the precious metals. 
 
 These considerations have made silver and gold ob- 
 jects greatly to be desired by all classes of people, and 
 we find that in the earliest periods of history, they were 
 sought by traders as articles of merchandise. History, 
 sacred and profane, is full of commercial transactions 
 showing that gold and silver were always in demand for 
 trade. Abraham " weighed " out four hundred shekels 
 of silver, " current money with the merchant," and 
 Joseph was sold for " twenty pieces of silver.'* 
 
 And in that way the precious metals became money 
 current money with the " merchant." They came to 
 have a commercial value, the same as other articles of 
 merchandise ; and because a small quantity of them by 
 weight, would exchange for much greater quantities, 
 by weight, of other articles, and because goods had to be 
 transported by caravans long distances between trading 
 points, these metals, when they could be procured, 
 served well as a sort of medium by m*ans whereof 
 trade in other things was always profitable. 
 
 In time, rulers of nations undertook to regulate trade 
 in the precious metals by impressing on them certain 
 marks to show officially their weight, so that in making 
 exchanges for other property all parties might be ap- 
 prised of the weight of the metal, and then they could 
 put their own value on it as measured by values of 
 other things. They were exchanged by weight in one 
 form or other and their value in relation to other 
 articles, and the value of other articles in relation to 
 the metals, came to be more and more distinct and 
 regular as commerce spread among the nations, 
 jit length, 
 
SENATOR W. A. PEFFER. 447 
 
 CERTAIN VALUES WERE ASSIGNED BY LAW 
 
 to certain weights of the metals. This legal value 
 varied from time to time and in different countries, not 
 only with respect to the values of other things, but 
 with respect to the metals themselves. 
 
 In the sands of the rivers of India and of the 
 regions north of the Himalaya mountains, as well as 
 those of Egypt and Arabia, were found great quantities 
 of fine gold, but there was no silver there ; hence, 
 until traders began to exchange silver from the mines 
 of Greece and Spain for gold in eastern countries, sil- 
 ver was the more costly metal in the gold regions, and 
 gold the more costly in the silver regions. During the 
 greater part of the second century B. C., one pound of 
 silver was worth ten pounds of gold in Arabia. In 
 earlier times the difference had been twice as great. 
 In ancient China and Japan the ratio between the two 
 metals was always low. In Egypt, in very early times, 
 the ratio was one of gold to two and a half of silver, by 
 weight. 
 
 RATIO BETWEEN SILVER AND GOLD. 
 
 The relative value of the precious metals compared 
 with one another or with the values of other property 
 cannot be ascertained by cost of production. War, 
 which was always in progress somewhere, was the great 
 disturber of prices. There were sudden changes of 
 ratio following the conquests of Alexander, Julius 
 Csesar, Cortez and Pizarro. And this was caused by 
 the movement of large quantities of the metals from 
 place to place by the conquering armies. 
 
 With the decline of the Roman Empire, gold went 
 east and trade with Europe fell off until revived by 
 
448 SILVER AND GOLD. 
 
 Arab merchants during the seventh century. After- 
 ward the Venetians opened trade with the Oriental na- 
 tions, taking to Asia " slaves, weapons of war, grain, 
 ship and other timber, and iron," and got in return 
 " gold, gold dust, silver, spices, drugs, sugar, and other 
 commodities." 
 
 Gradually, as commerce spread, and until the discov- 
 ery of America, the ratio between the values of silver 
 and gold grew to 12 to 1. The English mint ratio in 
 1482 was 11.16 to 1. In North Germany in 1403 it was 
 12.80 to 1. The commercial ratio in England in 1687, 
 is given at 14.94 to 1, and it did not reach 16 to 1 un- 
 til 1808, when it was 16.08 to 1. It never went be- 
 yond these last figures, except in 1813, when it reached 
 16.25 to 1, until 1875, when it was 16.59 to 1, and has 
 not been below that since. 
 
 UNIT OF VALUE. 
 
 Slowly, in the course of trade among people of one 
 locality, and in the development of commerce among 
 people of different places, men became familiar with 
 certain ideas or estimates of value attaching to partic- 
 ular articles when measured by the value of some one 
 or more other things ; they employed certain words, 
 names or signs to represent those ideas or estimates of 
 value ; and when they came to use some particular ar- 
 ticle or a certain weight of some particular article, as a 
 means of representing the idea or estimate of value and 
 also to use it as a medium of exchanging other prop- 
 erty, they gave to it the name or designation which 
 they used in expressing the idea of a unit of value. 
 
 Every nation has its own familiar names or words to 
 express values, and they use no other. In Great Brit- 
 
SENATOR W. A. PEFFEB. 449 
 
 ian, values are expressed in pounds, shillings, pence 
 and farthings. In France, the unit of value is ex- 
 pressed by the word " franc " ; in Germany it is 
 "mark"; in the United States it is "dollar." An 
 American, not accustomed to the use of any coins but 
 our own, does not know how to express value in francs 
 or marks; and Frenchmen and Germans, who are not 
 familiar with our coins, do not know how to estimate 
 or state value in dollars. Nor, could any of us, whether 
 American, Frenchman, German or Englishman, esti- 
 mate values by the weight of the metals of which our 
 coins are made. No man here or elsewhere would think 
 of stating the value of his horse or his farm in pounds 
 or ounces of gold or silver, and yet it is by weight of 
 metal that property is paid for when payment is made 
 with metallic coins. We do not express values by the 
 weight of some kind of property. We are accustomed 
 to use words for that purpose that do not express the 
 idea of weight at all words that express the idea of 
 value and nothing else. Tn truth, value is an idea and 
 cannot be precisely defined. It is a relation existing 
 between productions of labor with respect to their use- 
 fulness or desirability among people who use them or 
 desire their possession. 
 
 A bushel of wheat may be worth a dollar in money. 
 But what is its value in corn, or cotton, or cloth, or oil 
 or any one of a thousand other articles ? And what 
 is the value of a dollar when expressed in any of these 
 other things ? 
 
 Value is necessarily a relation, an idea or conception 
 of the mind. But after we have become familiar with 
 a certain word to express what we have learned to re- 
 gard as a unjt of value, we employ that word for the 
 
450 SILVER AND GOLD. 
 
 purpose and comprehend its application perfectly ; and 
 by the use of that term we express or estimate value 
 readily and understandingly. If I am asked the value 
 of my farm or of any other property which I own, I 
 would not think of answering in wheat, or bacon, or 
 flour, or in anything but dollars, and because we have 
 all become accustomed to express values by the use of 
 the word dollar. 
 
 And, as before stated, when we use some substance 
 or a certain quantity of some substance to represent a 
 dollar that is, the value of our unit, we call that thing 
 a dollar, and its multiple a certain number of dollars. 
 For example, when our government was organized, the 
 Spanish milled dollar was current in the country, the 
 people were familiar with its use, and it was taken as 
 the representative of our unit of value the dollar. An 
 American silver coin with American devices, but to con- 
 tain 371J grains of pure silver, and to be of the value 
 of a Spanish milled dollar, " as the same is now (then) 
 current," was authorized by our first mint act in 1792. 
 All multiples of the unit were made of gold ; divisions 
 of the dollar, down to five cents were made in silver ; 
 and one hundredth part of a dollar was represented by 
 a copper one-cent piece. 
 
 In 1873, our unit or dollar piece was changed from 
 silver to gold, and the silver dollar was dropped from 
 the list of coins to be thereafter minted. 
 
 From the beginning in 1793, to 1873, our total coin- 
 tge amounted to : 
 
 Gold $1,097,683,511.22 
 
 Silver 172,392,780.23 
 
 Total 11,270,076,291.45 
 
P. MORTON, 
 
SENATOR W. A. PEFFER. 453 
 
 Total amount from 1793 to June 30, 1894 
 
 Gold $1,771,880,288.00 
 
 Silver 675,954,221.30 
 
 Total $2,447,834,509.30 
 
 AMOUNT OF MONEY COIN IN CIRCULATION. 
 
 It appears from the treasury statement for May 1, 
 1895, that the amount of gold coin in the-United States 
 outside the national treasury at that time was estimated 
 
 to be $483,111,525 
 
 Amount in Treasury 89,954,140 
 
 Total stock $573,065,065 
 
 This amount is probably 50 per cent, too large ; for 
 aside from the fact that the figures are privately con- 
 ceded to be inaccurate, if the President and the Secre- 
 tary of the Treasury were satisfied there is more than 
 half that much gold in the country, they would hardly 
 have ignored our own people in the matter of bond 
 sales. 
 
 It is well known that Austria-Hungary, Italy and 
 Russia have been laying up gold for some time past ; 
 and it is a fact equally well understood that citizens 
 of the United States and others have taken large 
 amounts of gold from this country on tours of travel. 
 
 But, assuming the treasury figures to be substantially 
 correct, we have in the country : 
 
 Gold $573,065,665 
 
 Silver dollars 423,127,039 
 
 Total $996,192,704 
 
 Of this amount $330,914,504 silver is covered by 
 26 
 
454 SILVER AND GOLD. 
 
 certificates that Lave been issued against silver dollars, 
 and they are in circulation, but are not legal tender 
 money. The coins, which are good tender, are thus 
 tied up and cannot be used for money purposes unless 
 the certificates are returned to the treasury and sur- 
 rendered, something that nobody expects. Our stock 
 of coin, then, is properly subject to this reduction, 
 and that would leave us only 192,212,539 of silver 
 coin that can be called into use at any time. 
 
 However, let us assume that every silver dollar is free 
 and that we have at least 1250,000,000 in gold more 
 than we do have taking the treasury figures just as the 
 books show them, we have, as above stated, $996,192.- 
 704 full lawful tender money in the country. 
 
 According to the metallic theory of 'money -a 
 theory and a practice that has descended to us from re- 
 mote ages past, this $996,192,704 in metal coins, is 
 the equivalent of all the rest of the property in the 
 country, amounting five years ago to $65,000,000,000, 
 one dollar in money to 66 dollars in other property. 
 This would amount to about fourteen dollars to the 
 head of population, and we transact a yearly business 
 amounting to more than 100,000 million dollars. If we 
 divide the gold by two, as the actual facts warrant, we 
 should have but about $300,000,000 in gold, and $100,- 
 000,000, in silver to work with a total of but $400,- 
 000,000, a per capita of a little over six dollars, and 
 of this total of gold, the treasury aims to hold $100,- 
 000,000 as a reserve fund for the redemption of govern- 
 ment notes ; the rest is mostly held as bank reserveso 
 
 If the gold monometallists theory and practice is the 
 correct one, then, at best conceding all they claim, us- 
 ing the treasury figures, false and misleading as they 
 
SENATOR W. A. PEFFER. 455 
 
 are, still we would have only a little over $500,000,000, 
 with a reserve of $100,000,000 that cannot be touched 
 except for redemption purposes, leaving us at most 
 only $400,000,000 to handle a business of 100,000 mil- 
 lions one dollar in gold to be the equivalent of 
 $250 of other property in trade. 
 
 But this is not all. Our public and private debts 
 amount to about $25,000,000,000, a sum equal to the 
 assessed value of all our taxable property in 1890, and 
 this enormous indebtedness, according to the gold 
 party policy, must be paid finally out of our $400,000,- 
 000 gold coin. This, it appears to me is impossible. 
 We could pay only as Micawber paid with our notes, 
 renewed every pay day. 
 
 RESTORE THE LAW OF 1837. 
 
 Hence, I favor the immediate restoration of silver 
 to its ancient place as one of our money metals. Let 
 gold and silver be coined in unlimited amounts, on 
 exactly equal terms, as it was done under the act of 
 January 18, 1837, and at the weights and ratio therein 
 provided. I favor this policy 
 
 First. Because we have not lawful tender coin 
 enough for the legitimate demands of our trade. 
 
 Second. Because we shall require much more coin 
 than we now have to pay our coin obligations, and 
 more than we will ever have if we persist in main- 
 taining an exclusively gold basis. 
 
 Third. Because this policy would tend to revive 
 business, stimulate enterprise, employ labor and capital, 
 and encourage the people. 
 
 As to the first reason, if the fact were not self-evi- 
 dent that we have not now gold coin enough to 
 
456 SILVER A.ND GOLD. 
 
 transact our business with, it needs only be said that 
 from actual tests it appears that only about one per 
 cent, of the business done in and through our bank- 
 ing houses, is done with gold. A less amount is 
 done with silver. We are compelled to use various 
 forms of paper to make up the difference between two 
 per cent, and one hundred per cent. And, although 
 we use large amounts of greenbacks, treasury notes, 
 silver certificates, and national bank notes, still, even 
 with these added to the metal coins, we are able to 
 supply only eight per cent, of the demand, and we do 
 all the rest of our trade 92 per cent., with private 
 paper, notes, checks, bills, drafts, etc. 
 
 Only one per cent, of our business is done with our 
 present basic coin gold. Ninety-nine per cent, is 
 done with substitutes for gold. Silver is discredited 
 by the government, and a contract written payable in 
 gold, excludes the use of every other kind of money 
 in payment, notwithstanding the promises and pledges 
 of partisans that every dollar is as good as every other 
 dollar. 
 
 Second. Our national interest-bearing debt now 
 amounts to about $750,000,000, of which 825,000,000 
 is payable at the option of the government ; $ 559,000,- 
 000 is payable July 1, 1907; $100,000,000 payable 
 February 1, 1904 ; the rest payable in 1925. 
 
 All of this is to be paid in coin of the value of our 
 coin on the 14th day of July, 1870, the day the refund- 
 ing act was approved. All our bonds now out were 
 issued under, and in accordance with, the provisions of 
 that act, in so far as the matter of their redemption or 
 payment is concerned. The words of the statute are 
 " redeemable in coin of the present standard value." 
 
SENATOR W. A. PEFFER. 457 
 
 At that time, and for eighty years prior thereto, our 
 coin consisted of gold and silver. 
 
 It is clear that were any part of the bonds now due 
 and payable, and if we would pay them with gold, we 
 should have to borrow every dollar that we would pay ; 
 for we have lately been obliged to sell upward of 1162,- 
 000,000 in bonds to restore the $100,000,000 gold re< 
 serve, and that is about all the gold the government 
 has or will have without the sale of more bonds. And 
 if our present policy is to be continued, we shall never 
 be any better off, in this respect, than we are now ; for, 
 it must be remembered that according to our present 
 policy, the greenbacks and treasury notes nearly $500,- 
 000,000, in all, are redeemable in gold, though the law 
 says " coin ; " and if all the notes were presented at 
 once, or within a year, for redemption, there is not gold 
 enough in the country to pay them. The government 
 is the redeemer, and it has not one-fifth part enough 
 gold in the treasury to redeem all these notes at once. 
 What is still more, the act of May 31st, 1878, requires 
 that when these notes are redeemed, they shall not be 
 cancelled, but shall be paid out again and " kept in 
 circulation;" so that, if once paid, they may be pre- 
 sented again and again, and there is no end to the 
 process of redemption. We have recently seen such 
 an operation twice performed within thirteen months, 
 and it may be repeated any time that it suits the pleas- 
 ure of the money-changers to make another raid on 
 the treasury. Where is the gold to come from to keep 
 up this interminable redemption? It must be borrowed 
 on public credit. There is no other resource, unless 
 we change our policy and restore the old law and the 
 old policy of coining and using silver money. 
 
458 SILVER AND GOLD. 
 
 Third. It is a well settled fact in the history of 
 money, that a large supply in active circulation oper- 
 ates as a stimulus to business enterprise. Prices are 
 well maintained and the people prosper. Without 
 stopping now to discuss the question whether good 
 business makes money plenty, or whether plenty of 
 money makes business good, we all agree that with an 
 active circulation of money, business is always "good." 
 And in this connection there is an important element 
 of service in what we call 
 
 FREE COINAGE. 
 
 It puts money out at once among the people, while 
 if bullion is purchased for coinage and paid for with 
 paper, the coin is apt to be stored and may not get into 
 circulation at all. It would change the situation if 
 coinage value was paid for the bullion and the paper 
 made full legal tender. But none of our paper, under 
 the present practice and under existing laws, will pay 
 a gold debt; at any rate, not till after judgment is 
 taken and execution issued. The court could not en- 
 force payment in gold, even though the judgment be 
 for gold. The security would be sold for whatever it 
 would bring in dollars, and that wmld be the end of 
 the transaction. 
 
 Free coinage meaas that when a person takes bullion 
 to the mint it will be coined for him free of charge 
 He takes the coin when it is ready, and he, not the 
 government, puts it into circulation. He wants it to 
 circulate and for no other purpose. It is of no use to 
 him unless it does circulate. His first effort after get 4 
 ting the coin into his possession, is to find some profit^ 
 able way of getting rid of it. He immediately puts it 
 
SENATOR W. A. PEFFER. 459 
 
 where it will begin to perform its lawful functions as 
 money. Hence, free coinage of silver would at once 
 get fresh money full lawful tender money into active 
 circulation, leaving blessings in its wake. 
 
 OBJECTIONS CONSIDERED. 
 
 Concerning objections commonly urged against the 
 bimetallic basis, I have little to say here. If it be 
 true, as the Bullion Report of 1810 puts it, and we all 
 agree on the proposition, that there is gold enough in 
 the world to do the business of the world, the level of 
 prices rising and falling with the quantity of gold in 
 use as money, it follows that with an absolute or a re- 
 lative diminution of the quantity of money in use, the 
 level of prices will fall, and with an enlargement of 
 the money volume, the level of prices will rise. 
 Everybody concedes this ; and all but the gold specu- 
 lators concede that the deplorable condition of busi- 
 ness for some years past is due in some measure at 
 least to a diminution of the world's legal tender money 
 through the demonetization of silver. If they do not 
 concede this, their manifestation of desire for an inter- 
 national coinage ratio is hypocrisy. 
 
 It may be safely assumed, then, that ail the people, 
 save a very few, are of opinion that we ought to use 
 silver as well as gold, but many insist that it should be 
 done at a ratio different from the present legal limit of 
 16 to 1 by weight. They argue, notwithstanding the 
 assertion that legislation cannot impart value to any 
 commodity, that by international concurrence we can 
 do for the whole world what no one nation can do for 
 itself legislate value into silver and make it equal to 
 gold at any ratio we choose to adopt. That gives us 
 
460 SILVER AND GOLD. 
 
 the case without further argument. If by the concur* 
 rence of any number of nations, silver can be made 
 more valuable in international commerce, then, by the 
 same reasoning, any one nation can safely use it for 
 local purchases at any ratio the people agree upon. 
 
 In 1837 we adopted the ratio of 16 of silver to 1 of 
 gold, by weight. (The exact proportion is a fraction 
 less than 16). It has not been altered since. In 1870, 
 when our debt was refunded and new bonds authorized, 
 silver was more valuable than gold at the legal ratio ; 
 and in 1873, when the coinage laws were revised and 
 the silver dollar dropped from the list of coins, silver 
 stood 103, with gold at 100. 
 
 DEPRECIATION OF SILVER NOT CAUSED BY OVERPRO- 
 DUCTION. 
 
 The depreciation of silver since that time has come 
 about, not from overproduction, but from demonetiza- 
 tion. Germany and the United States, both the same 
 year, discrediting silver by discontinuing its coinage 
 except for subsidiary purposes, followed by France and 
 the other States of the Latin Union, and they followed 
 more recently by Austria and Italy, has greatly dimin- 
 ished the demand for silver for coinage purposes. 
 That, and not overproduction, occasioned the deprecia- 
 tion. If gold had been treated in that manner it, too, 
 would have fallen in price. "3 tit gold has been held 
 up by the laws of these great nations, while silver has 
 been thrown on the open market to seek its level among 
 corn, wheat, cotton and other commodities. Great 
 Britain pays Bank-of-England notes for all the gold 
 bullion offered at the rate of X3. 17s. 9d, per fine 
 ounce, and every note of that bank has behind it its 
 
SENATOR W. A. PEFFBB. 461 
 
 face value in gold at this rate of purchase. In the 
 United States we pay an eagle, or ten dollars, for every 
 232.2 grains of fine gold brought to the mint. So it is 
 in Germany and France, and in all gold-using countries; 
 they pay a fixed sum for all the gold bullion brought to 
 their mints, and that fixed sum is written in their laws ; 
 while, as to silver, that is purchased just as corn or 
 coal or pork is bought in the open market, as it is re- 
 quired. Gold is protected; its value is fixed by the 
 law and maintained by the law, while silver is left to 
 find its level with other articles in the wide world of 
 commerce. 
 
 FLUCTUATIONS IN THE PRODUCTION OF THE PRECIOUS 
 METALS. 
 
 The records of the world's production of the precious 
 metals show that it has not been uniform from year to 
 year, nor from decade to decade, nor for any periods put 
 in comparison. On the contrary, the output of the mines 
 has been very irregular ; some years and some periods 
 less, and some more in the aggregate, less or more of 
 one or the other of the metals ; at one time gold lead- 
 ing, at another time silver leading ; and this applies not 
 only to the quantity of product, but to its value as 
 well. Yet the commercial ratio of value between the 
 metals has varied but slightly from time to time dur- 
 ing five hundred years prior to 1876. 
 
 The United States Mint report for 1894 shows that 
 from 1493 to 1893 the total production of the precious 
 metals was : 
 
 Gold $8,391,101,000 
 
 Silver $9,909,041,000 
 
 During this 500-year period the excess of silver pro- 
 duction over that of gold was about 18 per cent. 
 
462 SILVER AND GOLD. 
 
 From 1493 to 1700, the production was: 
 
 Gold $1,107,955,000 
 
 Silver 12,496,904,000 
 
 For this period of more than 200 years the excess of 
 silver production over that of gold was 103 per cent. 
 From 1701 to 1800, the output was: 
 
 Gold $1,262,805,000 
 
 Silver $2,370,809,000 
 
 Excess of silver nearly one hundred per cent. 
 From 1801 to 1893 the figures are : 
 
 Gold $6,028,341,000 
 
 Silver $5,141,328,000 
 
 Excess of gold over silver, 17 per cent. 
 From 1851 to 1875: 
 
 Gold. v $3,161,060,500 
 
 Silver $1,288,527,500 
 
 Gold excess, 150 per cent. 
 
 From 1876 to 1893, the record shows : 
 
 Gold $2,066,999,000 
 
 Silver $2,392,334,000 
 
 Excess of silver nearly 16 per cent. 
 
 RATIO HAS NOT VARIED MUCH. 
 
 Notwithstanding the fluctuations in amount of pro- 
 duction in different years and different periods of years, 
 the commercial ratio played between 11 to 1 and 16 to 
 1 during a period of nearly 500 years, and no rapid or 
 great depreciation of either metal as compared with the 
 other began or continued until after demonetization. 
 
 The average of the mint ratios of England, France, 
 Germany and Spain in 1492, the year of the discovery 
 of America, was 11 to 1. Ninety years before that 
 
SENATOR W. A. PEFFER. 
 
 time, in North Germany the ratio had been as high as 
 12.80 to 1. 
 
 In 1687, according to the tables of Dr. Soetbeer, 
 copied in the United States Mint report for 18Q4, the 
 ratio was 14.94 to 1. It reached 15 to 1 twt years 
 later, and has never been as low as 14 to 1 since ; nor 
 did it ever reach 16 to 1 until 1808, when the figures 
 were 16.08 to 1 ; and, excepting two years, 1812 and 
 1813, when it was 16.25 to 1, the ratio was never again 
 above 16 to 1, until 1874, when it was 16.17 to 1, and 
 has never been that low since. The fall has been con- 
 tinuous from that time. In 1893 the ratio was 26.49 to 
 1 and is now lower. 
 
 SILVER HAS KEPT EVEN WITH THE GENERAL LEVEI 
 OF PRICES. 
 
 The price of silver bullion has not fallen more than 
 the general level of prices. Many different combina- 
 tions of useful commodities have been presented with 
 their index number 100 as the average price, and silver 
 has kept even in all of them with the downward trend 
 since 1873 the year of silver's demonetization in two 
 of the great countries of the world. 
 
 Here is Prof. Sauerbach's table : 
 
 Index numbers of forty-five principal commodities and silver bj 
 Professor Sauerbach : 
 
 Year. 45 Corns. Silver. Year. 45 Corns. Silver. 
 
 1874 102 95.8 1884 76 83.3 
 
 1875 96 93.3 1885 72 79.9 
 
 1876 95 86.7 1886 69 74.6 
 
 1877 94 90.2 1887 68 73.3 
 
 1878 87 86.4 1888 70 70.4 
 
 1879 83 84.2 1889 72 70.2 
 
 1880 88 85.9 1890 72 78.4 
 
 1881 85 85 1891 72 74.1 
 
 1882 84 84.9 1892 68 65.4 
 
 1883 82 83.1 
 
464 SILVER AND GOLD. 
 
 These 45 commodities comprise the principal articles 
 of grain, provisions, clothing, fuel, etc., articles com- 
 monly used and regarded as necessaries. 
 
 ABOUT HONEST MONEY. 
 
 As to the honesty of restoring silver, there is no 
 question pf honor involved. The coinage of money and 
 the regulation of the value thereof is within the exclu- 
 sive jurisdiction of congress. That body may make 
 money coins out of gold, silver, copper, nickel, paper, 
 or any other substance. The language of the Consti- 
 tution is : " Congress shall have power to coin money 
 and regulate the value thereof." " No State shall coin 
 money or make anything but gold and silver coin a 
 tender in payment of debts." But congress never has 
 guaranteed the market value of any of the materials out 
 of which it authorizes coins to be made. It once (1834) 
 took six per cent, of pure gold out of our coins, and the 
 lighter weight afterwards paid debts quite as well as 
 the heavier weight had done before. In 1853 we 
 reduced the weight of our smaller silver coins, but they 
 have always paid their way as the heavier coins had 
 previously done. Our minor coins now are not one 
 quarter full weight, yet the law has somehow put full 
 value into them. We have perfect legal and moral 
 right to make our coins of whatever material we choose 
 and give them the value that suits us. We never 
 promised to pay anything more than our lawful coins, 
 and if creditors do not wish to take these, let them take 
 our corn, or cotton, or whatever else we have that they 
 do want, and they can turn that into money that will 
 suit them. 
 
 Let the reader not forget that the laws do not pre- 
 
SENATOR W. A. PEFFER. 465 
 
 tend co regulate the value of bullion. It is coin that 
 the law imparts value to legal value, not value in the 
 abstract and as compared with the values of other 
 property. The law provides only that coins shall be 
 made of certain metals by weight, and that the coins 
 shall have a certain legal value, no matter what may be 
 the market price of bullion. The paper in a paper 
 dollar has no market value, but the paper dollar was 
 good when there was neither gold or silver money cir- 
 culating in the country. 
 
 Our lawful coin in 1870, when the refunding bonds 
 were authorized, consisted of dollar coins of 412J grains 
 of standard silver, and multiples of dollars in gold coins 
 at the rate of 25.8 grains of standard gold to the dollar. 
 The law obligates us to redeem the bonds in " coin of 
 the present standard value." The standard value of 
 the silver coin was one dollar; the value of the gold 
 coins was: the eagle, ten dollars; the half-eagle, five 
 dollars ; the quarter-eagle, two and one half dollars. 
 And their values have not been altered since. If, then, 
 we pay in these coins or either of them, we comply with 
 the terms of the contract. 
 
 I beg the reader to remember that our metallic cur- 
 rency consists of coin, not bullion. If we had promised 
 to pay in bullion, the language of the law would have 
 so provided, and we would have said so many ounces 
 of silver bullion or of gold bullion ; or, we would have 
 said bullion at a certain price per ounce. 
 
 But we said coin, and the laws had long ago fixed the 
 weight and value of our coin. 
 
 In the contract entered into last winter by the Secre- 
 tary of the Treasury with the Morgan-Rothschild syndi- 
 cate, the word "coin" does not appear; nor does 
 
466 SILVER AND GOLD. 
 
 "dollar," or "pound," or " franc," or " mark," or the 
 name of any other coin. The contract requires the de- 
 livery of a certain quantity of gold measured by ounces. 
 
 Our obligations are payable in coin, coin only, and 
 nothing but coin ; and there is nothing, absolutely 
 nothing, in the contract or in our laws providing that 
 our coins shall be measured by the market value of 
 bullion or of anything else. Our unit of value was and 
 is the dollar, and it was, when all our coin obligations 
 were contracted, to be represented by a coin weighing 
 412,| grains of standard silver silver nine-tenths fine, 
 without reference to the market value of silver bullion. 
 
 It would be nonsense to say " redeemable in coin 
 measured by the market value of bullion when the debt 
 matures." If that was to be the construction of the 
 contract, we would have so written it and the words 
 would be "redeemable in gold at its market value in 
 London, England." 
 
 Call silver coins fifty-cent dollars, if you choose * 
 they are quite as honest as 200 cent dollars, and that is 
 the value of gold dollars now measured by the value of 
 articles in general use among the people. These ar- 
 ticles, generally, that is to say, the general level of 
 prices, has fallen fifty per cent, since 1873 ; so that if 
 we should measure gold coins by the general level of 
 prices, as the gold party insists that we shall do with 
 respect to silver coins, we would find that the gold 
 dollar is a 200-cent dollar, and the silver dollar is a 100- 
 cent dollar an honest dollar. 
 
 This quibbling over the value of meid dollars proves 
 two assertions (1) that our financial affairs are con- 
 trolled by brokers and speculators; and (2) that we 
 shall never have a just, safe, sound and satisfactory 
 
SENATOR W. A. PEFFER. 467 
 
 monetary system until we discard metals, and thus get 
 rid of the men that prey on the people and rob them 
 through interest and rent. 
 
 Paper is the best material for money coins, but I 
 have undertaken only to show why, as we are at pres- 
 ent situated, with our gold monometallic system in full 
 operation, and with our coin obligations out, we ought 
 promptly to restore the old system of free coinage of 
 both gold and silver at the present ratio, to the end 
 that we may have coin on hand to redeem our promises 
 honestly and in good faith. 
 
 I pray that the government of the United States will 
 never again enter into any sort of a contract requiring 
 us to pay anything but dollars. With our immense ex- 
 port trade, we shall at all times be able to sell our 
 products and with the proceeds pay our debts. Our 
 dollars ought to represent our property, all that we 
 have, and not merely the little gold in our possession ; 
 and our money ought to be made of material which, in 
 small bits, would have no appreciable market value. 
 Then it would not be "cornered," and when war or 
 hard times should come it would not slink away and 
 hide. When the people need money they ought to 
 have it within easy reach. 
 
468 SILVER AND GOLtV. 
 
 CHAPTER XXVII. 
 
 BY E. KOSEWATER, EDITOR OF THE OMAHA BEE. 
 
 THE unprecedented disturbance and depression of 
 t ade, commerce and industry which first manifested 
 ir*elf in a marked degree in 1873 and has prevailed 
 ^ 1th fluctuations of intensity up to the present time, 
 h,<s been interpreted by many as the natural result of 
 the disuse of silver as a money metal by the leading 
 nations. Some of the most prominent public men in 
 America, notably members of congress from silver 
 producing states, have taken this view of the phenome- 
 nal and universal decline in prices. It can hardly be 
 said that these parties are disinterested, or in other 
 words that their conclusions have not been biased by 
 their anxiety to unduly stimulate the silver industry 
 and by the heavy profits which the bonanza mining 
 millionaires expect to reap from a restoration of un- 
 limited silver coinage. Those who have taken the 
 pains to look beneath the surface and study the prob- 
 lem in all its bearings ascribe the decline of prices to 
 multifarious causes. If a comet had appeared in the 
 sky in 1873 and remained in sight within our planetary 
 system for the past twenty-two years, there would 
 doubtless have been any number of scientific charlatans 
 who would ascribe to the presence and proximity of 
 the comet all the cyclones, the drouths, hailstorms, 
 floods and epidemic diseases that have occurred dining 
 that period. And there would have been millions of 
 
ROBERT T. LINCOLN, 
 
E. 110SEWATER. 4T1 
 
 people credulous enough to believe in the terrible 
 effects of the comet upon our system, and nobody 
 eould dissuade them from that belief. It is so with 
 the financial charlatans who charge every disaster that 
 has befallen the financial and commercial world within 
 the past twenty-two years to the divergence between 
 silver and gold and the disuse of silver as a money 
 metal. This decline in prices has been universal, 
 affecting nations that had been involved in war, as well 
 as those which have maintained peace, those which 
 have a stable currency based on gold, and those which 
 have an unstable currency based on promises which 
 have not been kept ; those who live under a system of 
 free exchange of commodities and those whose ex- 
 changes are restricted by protective duties. The de- 
 cline in prices has affected alike England, Germany, 
 Australia, South Africa, the East Indies and California. 
 The poverty in Australia was reported as more extreme 
 in 1885 than at any former period in the history of the 
 colonies. And Australia had $32 of money per capita. 
 Does it stand to reason that the restriction in the coin- 
 age of silver alone was responsible for this universal 
 depression ? Is not the true cause to be sought in the 
 grest industrial revolution that has been in progress all 
 over the world within the past quarter of a century ? 
 Take, for instance, the trade depression in Germany. 
 The war indemnity which had been exacted of France 
 in 1871 made Germany flush with money. Ready 
 sapital became so abundant that banking institutions 
 Almost begged for opportunities to place their loans, and 
 interest rates fell as low as 1 per cent. As a legitimate 
 result the whole country invested and engaged in all 
 manner of new industrial and financial enterprises. In 
 27 
 
47 i SILVER AND GOLD. 
 
 Prussia kiune 687 new joint stock companies were 
 founded during the year 1872, with an aggregate cap- 
 ital of $481,000,000. The sudden growth of indus- 
 tries, the temptations of cities and towns which as- 
 sumed a rapid and unhealthy growth, induced hundreds 
 and thousands of men and women to desert their farms 
 and seek employment in trades. Reaction and disaster 
 came with great suddenness. In the fall of 1873 great 
 fortunes rapidly melted away, industry became para- 
 lyzed and the whole of Germany passed at once from a 
 condition of great prosperity to a depth of financial 
 and industrial depression never before equalled. In 
 the United States the crash of 1873 was preceded by 
 several years of high prices, large profits, large impor- 
 tations, a railway-building mania, expanded credit, 
 over-trading, over-building and high living. The fail- 
 ure of Jay Cooke & Co., precipitated the crisis, 
 Within twenty-four hours after the collapse of tho 
 Northern Pacific balloon nineteen banking houses had 
 failed, and a succession of bankruptcies followed which, 
 within three years, aggregated $775,000,000, while the 
 railroad bonds in default on January 1, 1876, were 
 represented as aggregating $789,367,655. In Great 
 Britain the depression and decline in prices did not set 
 in until 1875, and they were largely due to the com- 
 mercial sympathy that prevails between England, Ger- 
 many and the United States. There is a very general 
 agreement that in England and on the continent of 
 Europe the year 1879, 1885 and 1886 were the worst 
 that have been experienced in the period commencing 
 with 1873. A subject of such transcendent impor- 
 tance and affecting so intimately the material interests 
 of nations and individuals naturally attracted great 
 
E. KOSEWATE.^, 473 
 
 and continually increasing attention though ont the 
 civilized world. Investigation undertaken by com- 
 mittees of congress and by royal British commissions 
 ascribe the general industrial depression : First, to 
 changes in the distribution of wealth ; second, a nat- 
 ural tendency to diminution in the rate of profit con- 
 sequent on the progressive accumulation of capital ; 
 third, industrial overproduction and impairment of 
 agricultural industry consequent on bad seasons and 
 the competition of the products of other soil which can 
 be cultivated under more favorable conditions. The 
 loss in British farming lands is computed at over $300.- 
 000,000. In France the principal causes assigned are 
 excessive speculation prior to 1873, followed by bad 
 crops, the great falling off in the production of wine 
 through the destruction of the vineyards, which is 
 estimated at over $2,000,000,000, a sum nearly double 
 the amount of the war indemnity of 1871, and general 
 overproduction of manufactured products. 
 
 The concensus of opinion among the ablest writers 
 and thinkers is, however, that the chief cause of the 
 depression within the past quarter of a century must 
 be traced to the marvelous changes that have taken 
 place through the introduction of machinery and the 
 appliances of steam, electricity and natural gas to the 
 production of articles in every branch of industry, the 
 consequent displacement of large numbers of workmen, 
 and last but not least, to the cheapening of transporta- 
 tion and increased facilities afforded for the conveyance 
 of products from one country to the other. The re- 
 motest parts of the earth have been brought near to 
 each other by the steamship and the railway, and 
 countries separated by great oceans and thousands of 
 
474 SILVER AND GOLD. 
 
 miles apart are now competing actively in the marts of 
 the world. 
 
 Let us take a glance at some of our own products. 
 It is to be noted that in very few branches or produc- 
 tions have greater improvements been made and adopted 
 in recent years than the growing of wheat. On many 
 large ranches in California steam plows are used and on 
 others gang plows which turn six furrows and are 
 drawn by from eight to fourteen mules. Not infre* 
 quently plows are run in straight lines a distance of 
 from six to eight miles. A patent machine for sowing 
 seed is employed by means of which it is claimed that 
 one man and a team can sow one hundred acres of 
 grain a day. Under such conditions wheat can be 
 raised in California at a cost of 70 cents per hundred 
 or 42 cents per bushel. In 1881 the two Dakotas with 
 150,000 square miles did not produce a single bushel 
 of wheat for export. In 1892 Dakota exported 30,704,- 
 000 bushels, or nearly as much as the annual exporf 
 from India since 18SO, which has been primarily re< 
 sponsible for the decline of recent years in the world's 
 average price of wheat. In 1887 Dakota's crop way 
 62,500,000 bushels, or one-seventh of the total wheat 
 product of the United States ; in 1890-91 Dakota crops 
 went down to 37,000,000 bushels, but this was owing 
 to a shortage in the crop. 
 
 Australia and New Zealand are becoming sharp 
 competitors in the wheat market, having changed their 
 sheep ranches to wheat lands. Previous to 1873 India 
 exported little or no wheat to Europe, owing to the 
 high cost of freight and the export duties ; in 1881 the 
 freight from Calcutta to London was 60 shillings per 
 ton ; in 1886 freight had declined to 30 shillings per 
 
E. ROSEWATER. 475 
 
 ton or 37J cents per hundred pounds. That brought 
 India's cereal into active competition with American 
 wheat in London. 
 
 Laws of supply and demand naturally are the prime 
 regulators of prices. From 250,000,000 bushels of 
 wheat raised in the United States in 1872 the crop 
 of wheat steadily advanced until it was 512,000,000 
 bushels in 1884 and 477,000,000 in 1886. In 1849 the 
 United States produced four and one -third bushels of 
 wheat per inhabitant; in 1859, five and one-twentieth 
 bushels, in 1869, seven and one-half bushels ; in 1876, 
 nine and one-tenth, and the same in 1884. In thirty- 
 four years, from 1849 to 1885, the increase of popula- 
 tion was 141 per cent. ; the increase of wheat produc- 
 tion 410 per cent. That explains why the price of 
 wheat has been gradually receding. The same applies 
 to the production and price of cotton. 
 
 If those who take a despondent view of the great in- 
 dustrial depression and marked decline in prices would 
 ponder and reflect they would discover a silver lining 
 behind the dark cloud. The general decline in prices 
 all over the world has placed the wage-worker within 
 the reach of articles and commodities that formerly 
 were luxuries within reach of the wealthy only. While 
 prices have gone down 30 per cent., wages have gone 
 down only from 5 to 10 per cent, since 1873, and the 
 laborer can save more on present wages than he did 
 during the inflation period after the war, and his money 
 will go further than it ever did before. The savings 
 banks in all our large cities attest the fact that the 
 wage-worker has not fared badly by the drop in prices, 
 and the laborer is vitally concerned in keeping the pur- 
 chasing price of the dollar as large as it is now, ui 
 
476 SILVER AND GOLD. 
 
 he can secure an advance of wages to correspond to any 
 lessening value. The cheapening of food, clothing, 
 furniture, fuel and rents have enabled the men of small 
 means to live comfortably, and their savings go a great 
 deal further than they ever did before. The decline in 
 prices enables men of moderate means to carry on busi- 
 ness with small capital. While the farmer has been 
 seriously affected by the decline in food product prices, 
 he also has had the benefit of cheaper sugar, cheaper 
 lumber, cheaper clothing, cheaper furniture and the 
 cheapening of all commodities he lias to buy. The fall 
 of 30 per cent, in the price of all commodities the world 
 over has enabled the commercial and industrial world 
 to do business with one-third less currency. In fact, 
 the rapid exchange that now takes place by rail, express 
 and the telegraph in the mercantile world has mater- 
 ially lessened the demand for ready money. Twenty- 
 five years ago it took a small fortune to stock a first- 
 class dry goods store. Now, with calico at four cents 
 a }'ard and all merchandise at one-fourth of war prices, 
 the dry goods merchant is in a position to make a 
 splendid display on a very moderate amount of capital, 
 and so with all the other classes of business. As a 
 natural consequence, a much smaller volume of money 
 is now needed for the transaction of business than when 
 prices were high. Abundance of the circulating medium 
 does not always represent prosperity. The Argentine 
 Republic, with 2,000,000 of people, had $6,000,000 of 
 metallic money and $379,000,000 of greenbacks in 1880, 
 or $ 189.70 per capita ; but at the end of nine years her 
 greenbacks became almost worthless and the country 
 was thrown into a state of general bankruptcy. 
 
 The advocates of free and unlimited coinage of silver 
 
E. ROSEWATER. 477 
 
 point to the panic of 1893 and the intensified commer- 
 cial and industrial disasters in the United States, as the 
 culmination of the so-called crime of 1873. As a mat- 
 ter of fact the disastrous collapse of 1893 is chiefly due 
 to the crimi^L 3ver-capitalization of corporate proper- 
 ties and the colossal frauds perpetrated upon investors. 
 While the total debt of the United States, including 
 bonds and greenbacks, aggregates a trifle more than 
 $1,000,000,000, and the bonded debt of all the states, 
 counties, cities and school districts is less than f 1,200,- 
 000,000, the bonded debt of the noways of the United 
 States is over $6,000,000,000. The bonded debt of the 
 various industrial corporations, including the telegraph, 
 telephone, electric lighting, electric motor, street rail- 
 ways, water companies, gas companies and the various 
 concerns that have been operated undar trusts, aggre- 
 gate $4,000,000,000 more, and these concerns are 
 stocked for about $12,000,000,000. The bulk of all 
 this capitalization represents fraud in Its mott glaring 
 form. Construction companies and Credit Mobilier 
 rings under the sanction of state and iiational legisla- 
 tion, exploited the investors and robbed each other un- 
 til the balloon collapsed and precipitated general disas- 
 ter upon the whole country. Some of the biggest 
 frauds have been perpetrated by the billionaires of the 
 mining states, who flooded the stock exchanges of New 
 York, London and Paris with billions of imaginary 
 wealth. These are the true causes of the terrible 
 shrinkage in values, and the remedy must be directed 
 to the prevention of the recurrence of such frauds. 
 The shrinkage in the price of silver is but a drop in 
 the ocean when compared to the destruction of credits. 
 The aggregate commerce of the United States is com- 
 
478 SILVER AND GOLD. 
 
 puted to represent $60,000,000,000 a year. Of these 
 exchanges, 98 per cent, are credits, and 2 per cent, pri- 
 mary money, gold and silver. For every dollar in sil- 
 ver circulated in our exchanges struck down by demon- 
 etization, $98 of credits were struck d. .,** by fictitious 
 and fraudulent capitalization. We have destroyed $58,- 
 000,000,000 of credit, and cannot hope to restore confi- 
 dence and prosperity by paying 100 cents for 51 cents' 
 worth of silver. We cannot talk of the crime of 1873 
 and ignore the crimes that preceded 1873. In 1492 the 
 relative value O A o^/er to gold was as 10J to 1. Jn 
 1760 the ratio stood 14 J to 1. Here was a shrinkage 
 of 08 per cent, in the value of silver. Who committed 
 that crime and why did silver shrink 38 per cent, in 
 spite of its free coinage by all the nations ? In 1793, 
 thirty-two years later, silver had depreciated further to 
 the ratio of 15 to 1, or a shrinkage in thirty-two years 
 of 5 per cent. more. In 1813 the ratio was 16J to 1, or 
 a further shrinkage of 8 per cent. The total shrinkage, 
 therefore, in the relative value of silver to gold between 
 1492 and 1813 was 51 per cent. Silver bullions worth 
 fl at the time of the discovery of America was worth 
 only 49 cents in 1813, and in the face of this tremen- 
 dous shrinkage the world prospered in its industrial and 
 commercial intercourse. Prices of commodities went 
 up and wages were higher than they had been at the 
 time of the discovery of America. It is charged that 
 silver was demonetized for the purpose of reducing the 
 value of the property of the land owner, and for the 
 purpose of reducing the value of wages of the labor* 
 ing man. Money has two qualities; purchasing powej 
 or exchangeability for other products, and the produc 
 tive power of earning an income for itself by use- 
 
E. KOSEWATER. 479 
 
 Making money dearer means raising the price for its 
 use, but money is cheaper in the United States now 
 than it ever has been. The purchasing power of money 
 is greater than it ever has been and the value of wages 
 is greater than it ever has been, because the laborer 
 can buy more of the necessaries of life with his wages 
 than he ever could before. The true standard of values 
 is labor, and measured by that standard our present 
 money has not changed materially from the standards 
 that prevailed up to the war. In fact, labor commands 
 higher wages in 1895, in spite of all depression, than it 
 did in the period of sixty years preceding the war. 
 Prior to 1861 the common laborer's wages was 75 cents 
 to $1 a day. To-day the common laborer earns from 
 $1.25 to $1.50 per day, and the best mechanic, who did 
 not earn over $2,50 per day prior to 1860, now earns 
 from $2.50 to $4 per day, and that for eight hours' 
 work, instead of ten to twelve hours' work as formerly. 
 
480 SILVER AND GOLD. 
 
 CHAPTER XXVIII. 
 
 BY JOHN G. CARLISLE, SECRETARY OF THE TREASURY. 
 
 THE proposition to revolutionize our monetary sys- 
 tem and thus destroy the credit of the government 
 and the people at home and abroad, violate the obliga- 
 tions of all contracts, unsettle all exchangeable values, 
 reduce the wages of labor, expel capital from our 
 country, and seriously obstruct the trade of our people 
 among themselves and with the peoples of other coun- 
 tries, is one which challenges the intelligence, patriot- 
 ism, and commercial honor of every man to whom it is 
 addressed. No matter what ma}' be the real purposes 
 and motives of those who make the proposition to 
 legalize the free and unlimited coinage of silver at 
 the ratio of 16 to 1, these are the consequences involved 
 in their scheme, and, in my opinion, they cannot be 
 avoided if it should be adopted. 
 
 I do not charge that our fellow-citizens who propose 
 to revolutionize our monetary system by a sudden 
 change in the standard of value really desire to see the 
 business of the country ruined, or even injured, or that 
 they believe an}^ injurious consequences would follow 
 the adoption of their policy, but, in my judgment, the 
 results would be most disastrous to the material inter- 
 ests of all the people in everj' part of the country, and, 
 therefore, I shall appeal to them carefully to review the 
 grounds upon which their opinions have been formed 
 before it is too late to correct a possible mistake upon 
 
JOHN G. CARLISLE. 481 
 
 a subject of such supreme importance to themselves and 
 to their posterity. It is not necessary to impeach their 
 motives in order to answer their arguments, nor would 
 it be wise or proper to underestimate the intellectual 
 and material forces behind this great popular move- 
 ment in the South and West, a movement which now 
 seriously threatens to disrupt existing political organi- 
 zations and reform party lines ; but, no matter what 
 may be the motives or the present numerical strength 
 of our opponents in this controversy, the merits of the 
 policy they propose to inaugurate must be subjected to 
 the tests of reason and experience, and if it is shown 
 to be impracticable, or fundamentally wrong in princi- 
 ple, we may be confident that it will not finally com- 
 mand the support of a majority of our people. 
 
 Before proceeding to the discussion of the main 
 question presented, it may be advantageous to state as 
 briefly as possible a few admitted or well-established 
 facts having an important bearing upon it. From the 
 earliest times gold and silver have been used as money, 
 not because there was at the beginning any law declar- 
 ing them to be money, but because, by reason of their 
 limited and regular supply, their great value as com- 
 pared with other things in proportion to weight and 
 bulk and their durability, they were more stable and 
 convenient than any other commodity as measures of 
 value in making exchanges. Consequently, these me- 
 tals were used as money by common consent of the 
 people for centuries before there was any law upon the 
 subject or any coins in existence ; they passed by 
 weight, and their values in effecting exchanges were de- 
 termined by the quantity of pure metal contained in 
 each piece. Each metal had a distinct value of its own 9 
 
482 SILVER AND GOLD. 
 
 and when it was used in trade neither the buyer nor 
 seller troubled himself about the ratio between it and 
 the other metal. The laws of trade fixed and regulated 
 the actual and relative values of both metals in the 
 purchase and sale of other commodities, just as they do 
 now. They had been used as money several centuries 
 before any government undertook, by royal proclama- 
 tion or statute la\v, to establish a ratio between them, 
 and, when this character of legislation was first begun, 
 the public authorities did not attempt to establish new 
 values or new ratios, but accepted those already fixed 
 by the laws of trade and the custom of merchants. 
 Coins were made, not for the purpose of attempting to 
 add anything to the intrinsic or exchangeable value of 
 the metal contained in them, but for the purpose of at- 
 testing, by public authority, its weight and purity, thus 
 avoiding the delay and uncertainty resulting from the 
 practice of weighing each piece as it passed from one to 
 another. That the coinage of the metals does not now 
 add anything to their actual value in the commercial 
 world, is conclusively proved by the facts that, in all 
 the great transactions between the people of different 
 countries, the coins are accepted only at their bullion 
 value, determined by their actual weight and fineness, 
 and that bullion itself is still used in making payments, 
 just as it was thousands of years ago. Whatever ef- 
 fect legislation upon the ratios, in connection with le- 
 gal tender laws, may have had upon the use of the two 
 metals in the payment of antecedent debts, it has never 
 had the slightest effect upon the actual or relative 
 values of the two metals in national or international 
 trade. For many centuries, even after the commerce 
 of the world had grown to enormous proportions, the 
 
JOHN G. CARLISLE. 483 
 
 propriety of making any given quantity of bullion, or 
 iny particular coin, a legal tender was not even sug- 
 gested, and up to the present time there is no legal 
 tender in international trade. Whether payments are 
 made in gold or silver coins, or in gold or silver bullion, 
 actual intrinsic value determines the amount or quantity 
 to be delivered, no matter what may be the legal ten- 
 der laws of the different countries, and no matter 
 though they may have the same or different ratios of 
 value between the metals within their respective 
 limits. The law of France, for instance, places a higher 
 value upon silver relatively to gold than is placed upon it 
 by the laws of the United States, the French ratio being 
 15 J to 1, and ours being 16 to 1 ; but if 16 pounds of our 
 silver, coined or uncoined, were sent to that country to 
 be used in the payment of a debt or in the purchase of 
 commodities, it would not be accepted at the ratio of 
 15| to 1, or at the ratio of 16 to 1 as compared to gold, 
 but only at the ratio of about 32 to 1, which shows that 
 neither our ratio nor the French ratio has any effect 
 whatever upon the value or purchasing power of the 
 metal itself. Coinage is free in Mexico, and the dollar, 
 which is full legal tender, contains 377.17 grains of 
 pure silver, while our dollar contains only 371. 25 grains 
 of pure silver; yet Mexican silver dollars are sent into 
 the United States and "other parts of the world and sold 
 at the price of the bullion contained in them, which i^ 
 about one-half their nominal or legal value in their own 
 country. The legal tender laws affect the debt-paying 
 power of the coin itself in the country where the laws 
 prevail, but the laws establishing ratio do not affect the 
 value of the metal contained in the coins either at home 
 or abroad, because it is the metal that fixes the value 
 
484 SILVER AND GOLD. 
 
 of the coin, and not the coin that fixes the value of the 
 metal. 
 
 For a long time, during the early history of the 
 world, and even during the mediaeval age, gold and 
 silver, in bullion or in the form of coins, constituted 
 almost the entire circulation among the people, even in 
 the nations most advanced in trade and civilization, 
 and, consequently, the quantity of these metals that 
 could be procured and kept in use was a question of 
 far greater importance then than it is now or ever can 
 be in the future. When life and property had been 
 made reasonably secure by the establishment of stable 
 governments, and regular processes were authorized 
 for the enforcement of pecuniary obligations, credit or 
 confidence largely took the places of bullion and coin 
 in the commercial transactions of the people, and a 
 much smaller amount of metallic money was required 
 in proportion to the whole volume of business dona 
 than had been required before. The use of credit in 
 the form of bank notes, checks, bills, and other evi- 
 dences of debt has so increased in modern times that 
 in all highly organized commercial communities the 
 use of coin, except in making change, has been almost 
 entirely dispensed with. The percentage of coin ac- 
 tively employed in conducting business in this country 
 is so small that it is almost inappreciable ; so small, in 
 fact, that its disuse in our transactions would not be 
 felt if we had a substitute for, or a paper representa- 
 tive of, the subsidiary pieces. In England, France, 
 and some other countries, a larger amount of coin is 
 used, because they have no very small notes. 
 
 Although we have the gold standard, or measure of 
 value, in this country, our actual stock of gold bullion 
 
JOHN G. CARLISLE. 485 
 
 and coin amounts to only about one-third of our actual 
 currency a condition of affairs which would have 
 been inconceivable a few centuries ago. We have 
 about 1625,000,000 in gold, 1397,652,873 in full legal 
 tender silver, 1346,681,000 in old United States notes, 
 $149,584,471 in treasury notes issed in the purchase of 
 silver bullion, $209,719,850 in national bank notes, and 
 $76,169,569 in subsidiary silver coin, making in all 
 $1,804,707,763, exclusive of the minor coins, and 
 every dollar of this vast volume of currency is kept 
 equal in value to the ^standard established by law, so 
 that every man who receives a silver dollar or paper 
 dollar in exchange for his products, or in satisfaction 
 of a debt, gets just as good a dollar as the man who 
 receives gold. This is the monetary system, and this is 
 the financial condition which the advocates of free 
 coinage at the ratio of 16 to 1 now propose to revolu- 
 tionize at once by a change in the standard of value, 
 so that the whole mass of circulation left for the use 
 of the people would be reduced to about one-half (he 
 purchasing power it has now ; or, in other words, so 
 that it would require about double the amount of cur- 
 rency that is required now to perform the same service 
 in the exchange of commodities. But the consumma- 
 tion of such a policy would produce results more far- 
 reaching and disastrous than the mere reduction of the 
 standard of value, because, for a long time, at least, 
 credit, which constitutes by far the most important 
 factor in our financial and commercial transactions, 
 would be substantially destroyed by the confusion and 
 uncertainty necessarily following such a great and sud- 
 den change in our monetary system. 
 But it is contended by a large number of the advo- 
 
486 SILVER AND GOLD. 
 
 cates ol free coinage perhaps a majority of them 
 that the effect of their policy would be, not to abolish 
 the present standard of value and substitute the single 
 silver standard in its place, but that it would establish 
 what they call bimetallism and a double standard. I 
 confess my inability to understand what is really 
 meant by a double standard or measure of value; the 
 idea is incomprehensible to my mind, because I cannot 
 conceive how it is possible to have two different legal 
 and authoritative measures of the same thing in use at 
 the same time, as, for instance, a pound weighing six- 
 teen ounces and a pound weighing eight ounces, or 
 only half *s much, and both declared by law to be 
 legal pounds. I agree entirely with Gen. Jackson's 
 Secretary of the Treasury, who said, " The proposition 
 that the'"} can be but one standard in fact is self-evi- 
 dent." The proposition to establish and maintain two 
 different measures of value to be in use at the same 
 time, and to be applied to the same things at the same 
 time, embodies a physical and metaphysical absurdity, 
 and this is so evident that the ablest thinkers and 
 writers upon the subject have been at last forced to 
 abandon it. Prof. Francis A. Walker, one of the most 
 distinguished bimetallists in the United States or in 
 the world, in a carefully prepared paper recently pub- 
 lished, says: 
 
 " But one thing more remains to be said in this con- 
 nection ; that is, in reply to the allegation of the mono- 
 metallist writers that the course of events in France 
 which has been recited did not constitute a genuine 
 case of bimetallism. If these writers may be permitted 
 to impose their own definition upon us, their conten- 
 tion can to a considerable extent be made good. What 
 
STEPHEN B. ELKINS, 
 
JOHN G. CAKLISLE. 489 
 
 they say is, that France from 1803 to 1873 did not en- 
 joy the concurrent circulation of the two metals, but 
 only an alternate circulation, now of one and now of 
 the other; and this, they declare, is not bimetallism at 
 all. Therefore, according to their view, there is no 
 great historical instance of the success of bimetallism. 
 "If, on the other hand, we may be permitted for our- 
 selves to say what we mean and propose by bimetallism, 
 the criticism in question does not touch our case at all. 
 We flatly deny that bimetallism necessarily involves 
 the concurrent circulation of the two metals. There 
 is some reason to believe that the French statesmen of 
 1803 really expected that concurrent circulation would 
 result ; but no bimetallic nowadays makes the concur- 
 rent circulation of the tovo metals in the same country 
 a necessity of that system, Jf it results only in estab- 
 lishing an alternating circulation, the chief results of 
 bimetallism will still be achieved, as they were by the 
 action of France." 
 
 This is intelligible, for we can all understand how it 
 is possible to have an alternating standard arid circula- 
 tion, sometimes gold and sometimes silver, and the 
 monetary history of the world, proves that this is just 
 what happens whenever the two metals are freel) 
 coined in any country and made .^ull legal tender. 
 Values will always be measured b^ the kind of rnone}> 
 in actual circulation, no matter whrt the law may de- 
 clare, and, therefore, if the free and unlimited coinage 
 of silver at the ratio of 16 to 1 should drive out gold 
 and substitute silver and paper redeemable in silver in 
 its place, we should have a single silver standard and 
 actual silver monometallism. Instead of using both 
 gold and silver as we do now in larger amounts than 
 ever before in our history, we should instantly expel 
 the more valuable metal from the country and make 
 28 
 
490 SILVER AND GOLD. 
 
 the other the sole basis of our currency. We have i2ty 
 practical bimetallism the use of both metals as moikey ; 
 we should have then practical monometallism the use 
 of only one metal as money. This is neither specula- 
 tion nor prophecy, but a conclusion based on facts es- 
 tablished by the experience of all nations in aW ages. 
 
 In order to eliminate all irrelevant matter and sim- 
 plify the argument, allow me to state exactly what the 
 proposition now pending before the people is: It is 
 proposed that the United States, without the co-opera- 
 tion or assistance of any other government, shall pro- 
 vide by law that all the silver bullion, or foreign silver 
 coins, that may be presented at the mints by individuals 
 or corporations, foreign or domestic, shall be coined, at 
 the public expense, into silver dollars, at the ratio of 
 16 to 1 with gold that is, that sixteen pounds of silver 
 shall be considered equal in value to one pound of gold, 
 and the weights of the coins shall be adjusted accord- 
 ingly and that the coins so made at the public ex- 
 pense shall be delivered to the owners of the bullion, 
 or foreign silver coins, as the case may be, and all the 
 people of the United States, but nobody else, shall be 
 compelled by law to receive them as dollars of full 
 value, in the payment of debts due to them from their 
 own fellow-citizens and from the citizens or subjects of 
 other countries. It is not proposed that the citizens or 
 subjects of other countries, with whom our people trade, 
 shall be compelled to receive these silver dollars in their 
 transactions with us, because that can be done only by 
 international agreement, and our impatient free-coinage 
 friends declare their determination to proceed at once 
 independently of all other governments. All who are 
 indebted to us are, therefore, to have the privilege of 
 
JOHN G. CARLISLE. 491 
 
 paying in silver, while all to whom we shall become in- 
 debted are to have the privilege of requiring us to pay 
 in gold. 
 
 Measured by their purchasing power in the markets 
 of the world, which is the only real test, the relative 
 value of silver bullion to gold bullion is about 82 to 1 ; 
 that is, it requires in all countries, silver standard 
 countries as well as gold-standard countries, about 32 
 pounds of silver bullion to procure the same quantity 
 of commodities that one pound of gold bullion will 
 procure, and, therefore, the proposition to authorize the 
 free and unlimited coinage of silver into full legal ten- 
 der money at the ratio of 16 to 1 means, under exist- 
 ing conditions, that the intrinsic value of the silver 
 dollar shall only be half, or about half, the intrinsic 
 value of the gold dollar. My own opinion is that after 
 we had passed a certain limit the more silver dollars we 
 coined the less they would be worth, because the infla- 
 tion itself would still further diminish their purchasing 
 power. Such legislation by the United States alone 
 would not reduce the value of the gold dollar to any 
 extent whatever, because, as already stated, the value 
 of that metal in commercial transactions all over the 
 world is estimated according to its weight and fineness, 
 and will continue to be so estimated, and consequently 
 the only way in which this country alone could dimin- 
 ish the value of its gold dollar would be to reduce the 
 weight of the pure metal contained in it. 
 
 The attempt to coin the two metals without limit as 
 to amount into full legal tender money and keep both 
 in circulation at the same time has been made by nearly 
 every civilized nation in the world and lias failed in 
 every one of them. It 1ms failed because in every in- 
 
492 SILVER AND GOLD. 
 
 stance it has been found impossible to establish arm 
 maintain a legal ratio corresponding at all times with 
 the intrinsic or commercial ratio between the two 
 metals contained in the coins, and because whenever 
 either of the metals was undervalued relatively to the 
 other in the coinage laws it was expelled from the 
 country. England persisted in the attempt for nearly 
 five hundred years and, notwithstanding the enactment 
 of most severe penal statutes against the exportation of 
 coins or bullion, was at last forced to abandon the effort 
 and adopt the single standard. France, in her efforts 
 to keep the coins of the two metals in circulation at 
 the same time, changed the legal ratio between them 
 more than one hundred and fifty times in a single cen- 
 tury, and finally, in 1876, finding that gold was leaving 
 her and that in ten years her net imports of silver had 
 amounted to $280,000,000, stopped the coinage of legal 
 tender silver, and for nineteen years the attempt has 
 been abandoned in that country. Many other nations 
 in Europe and other parts of the world have subjected 
 their people to great loss and expense by their adher- 
 ence to monetary systems based upon the theory that a 
 double standard could be maintained, but in no case 
 have they succeeded in keeping the coins of the two 
 metals in use at the same time, except for very short 
 periods. Our own country is not without experience 
 upon this subject, and the results here were just the 
 same as they have been everywhere else. By the act 
 of 1792, which was our first coinage law, the legal ratio 
 between gold and silver was fixed at 15 to 1, when in 
 fact the true commercial ratio was or soon became about 
 15J to 1, and the result of this very small overvalua- 
 tion of silver in the coinage was that gold went out of 
 
JOHN G. CARLISLE. 493 
 
 circulation and we had practically silver monometallism 
 until after the passage of the act of 1834. For the 
 purpose of restoring gold to the circulation, congress 
 in 1834 changed the ratio from 15 to 1, to 16 to 1, and 
 as this was an overvaluation of gold in the coinage, 
 silver left the country, and from that time on until 1878 
 we had practically gold monometallism, whenever we 
 had any metallic basis at all for our currency. 
 
 It would be a useless consumption of time to go into 
 a detailed account of the monetary legislation of this 
 and other countries, or to show at length how it affected 
 the movements and use of the two metals by its re- 
 peated failures to conform the legal ratio to the actual 
 commercial ratio between them. The great and im- 
 portant fact conclusively established by the history of 
 that legislation and its effects upon the circulation of 
 the coins of the two metals is, that whenever one of 
 them is overvalued relatively to the other in the coin- 
 age laws, with free coinage or coinage upon equal 
 terms, and both are made legal tender, the coins of the 
 undervalued metal will be driven out of circulation and 
 out of use as money in the country where the unequal 
 valuation is made. The reasons for this are perfectly 
 plain. Both being legal tenders, the least valuable 
 coins will always be used in making payments, and will 
 become the measures of value in the exchange of com- 
 modities, and consequently the more valuable coins will 
 be hoarded or sent out of the country into a market 
 where their real value will be recognized. Now, as this 
 is just what has always occurred at least in modern 
 times, when commercial relations between different 
 countries are so intimate and the means of transporta- 
 tion are so rapid and cheap even when the under- 
 
494 SILVER AND GOLD. 
 
 valuation or overvaluation amounted ^o only one or 
 two per cent., I think we are fully justified in con- 
 cluding that if the United States alone should adopt 
 the policy c f free and unlimited coinage of legal tender 
 silver at the ratio of 16 to 1, which would be an over- 
 valuation of that metal to the amount of 100 per cent., 
 all the gold in the country would be immediately 
 hoarded or exported or be held as a commodity by 
 speculators engaged in the business of buying and sell- 
 ing it at a premium. If this should be the result, the 
 free coinage of silver would not for a long time add 
 anything whatever, even nominally, to our stock of 
 money ; on the contrary, the immediate effect of such a 
 policy would be a contraction to the extent of fully 
 one-third of our present volume of currency by the ex- 
 pulsion of about $625,000,000 in gold, and it would re- 
 quire more than fifteen years to supply its place with 
 silver dollars, even if our mints coined nothing else. 
 
 All who have been or may be induced to give their 
 support to this revolutionary policy, upon the assurance 
 that it will give the country more money for use in the 
 transaction of business, will be greatly disappointed, fcr 
 they will find, when it is too late, that instead of hav> 
 ing more money they will have less, and that it will be 
 depreciated in value besides. The introduction into 
 the currency of a country of any kind of money about 
 which there is the least doubt will always operate to 
 drive out the same amount, or about the same amount, 
 of better money and thus leave the people with sub- 
 stantially the same volume of currency they had at the 
 beginning. The act providing for the purchase of sil- 
 ver bullion and the issue of legal tender treasury notes 
 in payment for it was passed on the 14th day of July p 
 
JOHN G. CARLISLE. 495 
 
 1890, and the purchasing clause of that act was repealed 
 November 1, 1893. While it remained in force, United 
 States treasury notes were issued to the amount of 
 1155,931,002, and there were many people who believed 
 that this was making a material and permanent addi- 
 tion to the volume of our currency ; but the official rec- 
 ords show that during the same time the net exports 
 of gold from this country amounted to $ 103,419,491, so 
 that the real addition to our circulation accomplished 
 by the issue of near $156,000,000 of new notes was 
 about fifty -two and a half million dollars during a pe- 
 riod of more than three years. The mere apprehension 
 that the government would not be able to maintain the 
 parity of the two metals under the policy inaugurated 
 by that act, not only discredited the new treasury notes 
 themselves, but the whole volume of our currency, and 
 gold went out about as fast as the new notes came in. 
 While, therefore, it is not at all certain that free coin- 
 age would ultimately make any considerable addition 
 to our circulation, it is absolutely certain that it would 
 give us a depreciated and fluctuating currency, and the 
 question is whether the producers of cotton, wheat, 
 corn, beef, pork, oil, lard, cheese, and other exportable 
 articles will be benefited or injured by such a result. 
 It is an axiom in trade that the prices of exportable 
 products are fixed in the foreign market where the sur- 
 plus is sold, and are fixed in the currency of that 
 country according to its nominal value there. If sold 
 in England, for illustration, the prices are fixed and 
 paid in pounds, shillings, and pence, and not in dollars 
 and cents, and, consequently, it makes no difference to 
 the foreign purchaser what kind of currency the pro- 
 ducer has at home. The character or value of the cur- 
 
496 SILVER AN, J OOLD. 
 
 rency in use in the producing country does not affect 
 the price of the article abroad to any extent whatever, 
 for the purchaser there trades in his own market and 
 uses his own currency in measuring values. The es- 
 tablishment of a silver standard here could not possibly 
 Increase the price of cotton or wheat or any other 
 American product in Liverpool, London, Paris, or Ber- 
 lin, whatever effect it might have upon the nominal 
 price in this country. If our monetary system were so 
 changed that it would require two dollars to purchase 
 here the same quantity of commodities that one dollar 
 will purchase now, it would not affect the value or pur- 
 chasing power of the English pound sterling, the French 
 franc, or German mark in the least. The only effect 
 would be that the exchange would be doubled, and the 
 pound sterling instead of being worth $4.866 in our 
 currency, as it is now, would be worth $9.732, and when 
 our people wanted to make a remittance to pay a debt 
 abroad they would have to pay twice as much in our 
 money for the same number of pounds as they pay 
 now, while the foreigner who wanted to make a remit- 
 tance to pay a debt here would pay only half as much 
 in his money for the same number of dollars as he pays 
 now. But the exchange would be in a constant state 
 of fluctuation, just as it has been between Great Britain 
 and India on account of the changes in the prices of 
 silver from day to day ; and the American producer 
 would be compelled to pay for the risk taken on ac- 
 count of the fluctuations by receiving a less price for 
 his cotton, wheat, beef, and other articles. The farm- 
 ers and planters do not export their own products but 
 they sell them at home to somebody else who sends 
 them abroad, and if the exchange is steady and the 
 
JOHN G. CARLISLE. 497 
 
 money in which he is to pay for the products has a fixed 
 value relatively to the money in use in the country 
 where he expects to sell them, the purchaser here can 
 afford to pay the highest price that would ler,ve him a 
 reasonable margin of profit in view of the conditions 
 existing in the market abroad. In other words, he has 
 to incur but one risk the possible fall in the price of 
 the products abroad ; but if the currency here is de- 
 preciated and fluctuating, if our money has no fixed 
 and certain value relatively to the money in use abroad 
 where he expects to sell the products, there is an addi- 
 tional risk to be incurred which will have great influ- 
 ence in determining the price he can afford to pay the 
 producer. In addition to the risk of a fall in the price 
 of the products abroad, he must incur the risk of a rise 
 in the price of silver between the time of his purchase 
 and the time when he receives the proceeds of his sale, 
 for if silver rises in the meantime he may not get back 
 as many dollars as he paid out. The producer must 
 pay for both of these risks by receiving a smaller 
 price for his commodities, and hence his prices will never 
 increase in proportion to the actual depreciation of the 
 money in which they are paid. To illustrate my mean- 
 ing, when silver is worth 60 cents per ounce, the 
 bullion contained in a silver dollar is worth 46.4 cents, 
 but if the price of silver should advance to 62 cents per 
 ounce, the value of the bullion contained in a silver 
 dollar would be 48 cents an increase of over 3 per 
 cent. Now, the price of cotton or wheat will not rise in 
 proportion to the depreciation of the dollar in which it 
 is to paid ; that is, the purchaser for export will not pay 
 for it at the rate of 46.4 cents for each dollar when sil- 
 ver is worth 60 cents an ounce, because he knows that 
 
498 SILVER AND GOLD. 
 
 silver may rise to 61 or 62 cents per ounce before he 
 can sell the product abroad and get his money for it, 
 and he knows that if this happens the gold he receives 
 abroad cannot be exchanged for as many silver dollars as 
 he paid the producer here. He will not take all this risk 
 upon himself, but will compel the producer to bear it 
 by receiving a less price for his cotton or wheat ; and 
 this argument applies with equal force to all other ar- 
 ticles. It is impossible to estimate accurately the 
 amount of loss which this would inflict upon the Ameri- 
 can producers of exportable products, but it would un- 
 doubtedly be very great, as the value of our exports of 
 domestic merchandise is nearly $870,000,000 per an- 
 num, and a small percentage upon this large sum would 
 very materially affect the incomes of our producers. 
 
 It is argued that the existing standard of value ought 
 to be abandoned because since 1873 prices of commodi- 
 ties have fallen, and will continue to fall, if the stand- 
 ard is maintained, so that it has been, and will continue 
 to be, more and more difficult each succeeding year to 
 pay debts ; that this fall in the prices of all commodi- 
 ties is attributable to the appreciation of gold, and that 
 the appreciation in the value of gold has been caused 
 by the alleged demonetization of silver in Germany in 
 1871 and 1873, the omission of the standard silver 
 dollar from the coinage of the United States in 1873, 
 and the suspension of the coinage of silver by France 
 in 1876. It is true that the prices of many things have 
 fallen since 1873, but it is true, also, that the prices of 
 many things had fallen long before that date. The 
 assertion that the fall in prices since 1873 is due to the 
 appreciation of gold alone is based upon the assumption 
 that the relations between supply and demand have not 
 
JOHN G. CARLISLE. 499 
 
 changed, that there has been no diminution of the cost 
 of production and distribution, that the facilities for 
 affecting financial exchanges have not been improved, 
 and, in brief, that the world has made no progress in 
 the conduct of its industrial and commercial operations 
 For more than twenty years. This assumption is so in- 
 consistent with well-known economic and historical 
 facts that it seems scarcely worth while to give it a 
 serious consideration Reductions in the prices of com- 
 modities are generally due to so many different causes 
 that it is scarcely ever possible to ascertain the extent 
 of their .separate influences. I presume, however, that 
 even thv- most ardent advocate of free coinage would 
 be willing 1 to admit that the invention and use of labor- 
 saving machinery, the extension of our railroad systems, 
 the improv jmeiit of our water-ways and the great re- 
 ductions ik the rates for carrying freight, the employ- 
 ment of steamships, the use of the telegraph on the 
 land and under the sea, the application of electricity in 
 the production of light, heat, and power, the utilization 
 of by-products which were formerly wasted, the intro- 
 duction of more economical methods in the processes of 
 production, the wonderful advance made by our labor- 
 ers in skill and efficiency, the greatly reduced rates of 
 interest paid for the use of capital, and many other 
 things which it would require much time to enumerate 
 and explain, have affected prices in some measure, at 
 least, and yet they ignore all these great influences in 
 their argument upon the subject and attribute the lower 
 prices of commodities to a single alleged and inadequate 
 cause the appreciation of gold. I presume, also, that 
 our free coinage friends will admit that if the change 
 in prices has. been caused entirely by the appreciation 
 
500 SILVER AND GOLD. 
 
 of gold, the reduction would have affected all cninga 
 alike, because it cannot be denied that, in the absence 
 of other influences, gold must bear the same relation to 
 the price of one article that it bears to the price of an- 
 other. But we do not find that the prices of all things 
 have been reduced in the same proportion, nor do we 
 find that the prices of all things have in fact been re- 
 duced. A very few illustrations will serve to show the 
 weakness of the contention that the decline is due alone 
 to the appreciation of gold. 
 
 In 1891, 1892, and part of 1893 I had the honor to 
 serve on a sub-committee charged by the senate of the 
 United States with the duty of ascertaining the course 
 of prices and wages of labor for as long a period as au- 
 thentic records would enable us to embrace in our in- 
 vestigation, and, after a most thorough and impartial 
 examination of the subject, a report was made which 
 fills four large volumes and embodies a mass of infor- 
 mation upon these subjects which cannot be found in 
 any other official form. As to the course of prices and 
 wages the committee was unanimous, though there were 
 differences of opinion among the members as to the 
 causes that had from time to time produced the changes. 
 The prices of many articles and the wages of labor in 
 many occupations were ascertained during each year as 
 far back as 1840, and for the purposes of comparison 
 the prices of commodities and the wages of labor in the 
 year 1860 were adopted as the standard. The sufficiency 
 of the reasons for selecting that year rather than any 
 other will not, I think, be questioned. There were no 
 great financial or other disturbances during that } r ear, 
 business was in a normal condition in all parts of the 
 country, no changes had been made in the monetary 
 
JOHN G. CARLISLE. 501 
 
 systems of the world for many years, the United States 
 was using gold as the measure of value, just as it is now, 
 except that there was no legal tender silver in circula- 
 tion as there is now, the people were prosperous and 
 the prices of commodities and the wages of labor were 
 fairly adjusted with relation to each other. At the time 
 when this investigation was made all the legislation in 
 regard to silver now specifically complained of had been 
 accomplished, and if prices or wages had fallen there 
 was as much reason to attribute the reduction to that 
 legislation then as there is now. Ample time had been 
 afforded for its affects, if it had any, upon prices and 
 wages to be felt, and the fact that the investigation was 
 not made for the purpose of influencing legislation upon 
 the silver question adds to the value of its results. 
 
 In the first place, the committee unanimously se- 
 lected 232 articles in common use which it was agreed 
 constituted the great bulk of the consumption and ex- 
 penditures of the people, and these articles were sep- 
 arated into eight classes or groups ; that is, clothes and 
 clothing, fuel and lighting, metals and implements, 
 lumber and house-building materials, drugs and chem- 
 icals, house-furnishing goods, and miscellaneous com- 
 modities. It was found that the prices of articles used 
 for food, taking them altogether, had fallen less than 10 
 per cent, since 1873, while the prices of clothes and 
 clothing had fallen 32 per cent. ; fuel and light nearly 
 24 per cent. ; metals and implements, 35 per cent. ; 
 lumber and building materials, nearly 20 per cent. ; 
 drugs and chemicals, 31 per cent. ; house-furnishing 
 goods, 27 per cent., and miscellaneous articles, 10 per 
 cent. The prices for the year 1860 being taken as the 
 standard were represented by 100, and increases and 
 
02 SILVER AND GOLD. 
 
 decreases were shown by deviations from that number 
 up or down, as the case might be. The investigation 
 showed that at the time it was made articles of food 
 stood at 103.9, or nearly 4 per cent, higher than in 
 1860; clothes and clothing at 81.1; fuel and lighting 
 at 91 ; metals and implements at 74.9 ; lumber and 
 house-building materials at 122.3 ; drugs and chemicals 
 at 86.3 ; house-furnishing goods at 70.1, arid miscella- 
 neous articles at 95.1. These results of the investiga- 
 tion establish three facts which have an important bear- 
 ing upon the present controversy. The first fact estab- 
 lished is that the prices of articles of food which are 
 the products of the farms, gardens, orchards, and 
 dairies of the country, were about 4 per cent, higher 
 than they were in the year 1860, long before the silver 
 legislation now complained of ; the second is, that the 
 fall in the prices of these farm products since the year 
 1873 has been much less than the fall in the prices of 
 the commodities the farmers have to buy ; and the 
 third is, that the reductions in prices have not been 
 uniform, either as to particular articles or groups of ar- 
 ticles, and therefore cannot be attributed to one and 
 the same cause to the appreciation of gold, for in- 
 stance. The conclusion is inevitable that various influ- 
 ences have operated to produce these changes in prices, 
 some affecting one group of articles and some another 
 and doubtless some affecting all, but to no one influ- 
 ence can the whole result be attributed. Cotton and 
 wheat are the commodities most frequently referred to 
 by those who contend that the fall in prices is due to 
 the appreciation of gold, but there is nothing whatever 
 in the methods of producing those articles, or in trans- 
 porting or selling them, or in the character of the 
 
JOHN G. CARLISLE. 503 
 
 money received for them, which would make the appre- 
 ciation of gold affect their prices more than it would 
 affect the prices of other commodities produced by our 
 people. In addition to the various causes which have 
 more or less affected the prices of all articles, the prices 
 of these two products have been seriously affected by 
 the enormous increase in their production since the year 
 1872, which was the last crop year preceding the legis- 
 lation in regard to silver. The production of cotton in 
 this country in 1872-'3 was 2,974,351 bales, containing 
 au average of 439 pounds net weight, while the pro- 
 duction in 1893-'4 was 7,549,817 bales, containing an 
 average of 474 pounds net weight, or an increase of 
 nearly 200 per cent, in this country alone, besides the 
 great increase that has taken place in competing coun- 
 tries ; and in 1894-'5 the production here was much 
 larger, being nearly 10,000,000 bales. According to 
 the statistics of the agricultural department, the pro- 
 duction of wheat in this country in 1872 was 249,997,- 
 100 bushels, and in 1894, 460,267,416 bushels, or nearly 
 twice as much, and there has also been an enormous in- 
 crease of production in competing countries. But, 
 notwithstanding the great increase in the production 
 of cotton and wheat, here and in other countries, and 
 the consequent decline in their prices, a given quantity 
 of either of them will now purchase in our own mar- 
 kets and in the markets abroad a larger share of many 
 other Useful commodities than it would have purchased 
 in 1872 or 1873, so that, in fact, as compared with 
 many other things, the values of cotton and wheat have 
 appreciated. 
 
 The one thing which has been less affected by the 
 changes in the relation between supply and demand, by 
 
504 SILVER AND GOLD. 
 
 improvements in the methods of production and distri- 
 bution and by the other influences which produce fluc- 
 tuations in prices of commodities generally, is labor, 
 and it is by far the most important single source of in- 
 come possessed by our people, a much larger amount 
 being expended every year in the payment of wages 
 than for any other one purpose. The cost of labor in 
 the manufacturing and mechanical industries alone 
 during the census year 1889 was 82,283,216,529, which 
 was nearly two and one-half times the value of all the 
 wheat and cotton produced in this country ; and if we 
 add to this the amounts paid for farm labor, for clerical 
 and other work in mercantile establishments, for do- 
 mestic service and for work on railways of all kinds, on 
 water craft, on streets and other improvements in the 
 cities, and in the many other occupations which give 
 employment to our people, we would have a sum al- 
 most, if not quite, equal to the value of all our agricul- 
 tural products. It is evident, therefore, that if the al- 
 leged depreciation of gold alone has caused a reduction 
 of prices, the wages of labor, the greatest commodity 
 in the market, should have fallen since 1873 ; but ex- 
 actly the reverse is. true. The investigations of this 
 subject by the sub-committee covered a period of fifty- 
 two years and embraced all the occupations in which 
 our people were engaged, arid the fact, unanimously 
 found, was that, although eighteen years had elapsed 
 since the silver legislation, the wages of labor were 
 higher than in 1872 or 1873. Wages were found to be 
 nearly 61 per cent, higher than in 1860, which was 
 thirteen years before the silver legislation, and more 
 than eight per cent, higher than in 1873, when that 
 legislation was adopted. 
 

 CHAUNCEY M. DEPEW, 
 
JOHN G. CARLISLE. 507 
 
 The argument that the reduction of prices is due to 
 the appreciation of gold is necessarily based upon the 
 further assumptions that the legislation hi regard to 
 silver has produced a scarcity of redemption or metal- 
 lic money in the world, and that prices are fixed and 
 regulated by the amount of such money in circulation, 
 or available for circulation. Neither of these assump- 
 tions is justified by the facts. The most exhaustive 
 efforts have been made from time to time by the treas- 
 ury department, through the Director of the Mint, by 
 careful examinations of the monetary statistics of other 
 countries, by correspondence with our diplomatic and 
 consular representatives abroad and with foreign finan- 
 cial authorities, and otherwise, to ascertain the actual 
 amount of gold and silver used as money in the world, 
 and the result shows that there is now more gold and 
 silver in the aggregate, and more of each one of them, 
 in use as full legal tender money than there ever was 
 at any other time in the history of the world. The 
 gold in use AS money amounts to $3,965,900,000, the 
 full legal tender silver amounts to $3,435,800,000, and 
 the limited legal tender silver amounts to $619,900,000. 
 The policy of maintaining, or rather attempting to 
 maintain, the so-called double standard never succeeded 
 in keeping so large an amount of full legal tender sil- 
 ver in circulation in the world as there is at this time, 
 and one of the principal reasons for this is that the 
 effect of the policy was to drive first the coins of one 
 metal and then the coins of the other into the coffers 
 of the hoarders or into the melting-pots, because the} 
 were undervalued in the coinage laws and would not 
 remain in use a& money. 
 
 1 attach very little importance to the per capita 
 29 
 
508 SILVER AND GOLD. 
 
 argils *nt, because the amount of currency required in 
 a com try depends mainly upon the volume of business 
 to be t/ansacted and the customs of the people in con- 
 ducting' their exchanges, and not at all upon the num- 
 ber of men, women, and children residing in it, but, 
 as there are a great many who believe that the circula- 
 tion should be regulated by the census returns, it 
 maybe worth while to state that the production of gold 
 alon ^ in 1890 and it is much larger now was nearly 
 two and a half time greater than the average annual 
 production of gold and silver both during the decade 
 which closed with the year 1800. In 1800 the popula- 
 tion of all the countries in Europe and America was 
 197,505,895, and the production of both gold and silver 
 amounted to $24.49 for every hundred inhabitants, 
 while in 1890 the population of the same countries was 
 466,789,341, and the production of gold alone was 
 118,849,000, which amounted to $25.46 for every hun- 
 dred inhabitants, or ninety-five cents more for each 
 hundred people than was furnished by both metals dur- 
 ing each year in the former decade. In 1894 the 
 population of these countries was 485,180,841, and the 
 production of gold alone was $157,228,000, being 132.41 
 for each hundred inhabitants, or $7.92 more for each 
 hundred people than the total of both metals during 
 the last decade of the last century. If, therefore, the 
 people of Europe and America hau used as money all 
 the gold and all the silver annually produced in the 
 world one hundred years ago, they would not liave re- 
 ceived as large a per capita addition to their stock of 
 money as they would receive now by adding the gold 
 alone. In view of these facts, I submit that the silver 
 legislation of 1871, 1873, and 1876 has not diminished 
 
JOHN G. CARLISLE. 609 
 
 the worl(Ts supply of metallic money as compared with 
 former times and prevented the single gold-standard 
 countries from making as great an annual addition to 
 their stock of metallic currency. 
 
 Official monetary statistics show that in the gold- 
 standard countries of the world the stocks of money 
 are much larger per capita than in the silver-stand- 
 ard countries. Taking the large gold-standard 
 countries and the large silver-standard countries, it ap- 
 pears that in 1894 the stock of money in the United 
 States was over $25 per capita, in the United Kingdom 
 nearly 20, and in Germany nearly 19, while in Mexico 
 the per capita was 4.71, in Russia and Finland 8.32, 
 and in China $3 26. The gold-standard countries use 
 large amounts of silver as money, but the silver- 
 standard countries use no gold as money, and cannot do 
 so for the reasons I have already endeavored to ex- 
 plain. But for the reasons already stated, the com- 
 mercial nations of the world do not now require the 
 same proportion of metallic money in the transaction of 
 their business that they required a few centuries ago, 
 or even one century agr. Credit has been vastly ex- 
 tended and the use of paper in the form of notes, 
 checks, and bills has almost entirely displaced metal- 
 lic money in the daily business of the people, and as 
 long as these forms of credit are kept equal in value to 
 the metallic standard, the effect upon the prices of com- 
 modities is precisely the same as if the whole volume of 
 circulation consisted of standard coin, for, as long as , 
 equality in their value can be maintained, the paper 
 representatives of the dollar perform exactly the same 
 office in the exchange of commodities that gold dollars 
 themselves would perform ; but if this equality is de- 
 
510 SILVER AND GOLD. 
 
 stroyed, the paper is discredited, its purchasing power 
 is diminished, and the people have no longer a stable 
 measure of value. 
 
 One of the most effective arguments made by the 
 advocates of free coinage, in some parts. of the country 
 nt least, is that the people are in debt, and that it is the 
 duty of the government to relieve them by such legisla- 
 tion as will enable them to procure cheap money for the 
 purpose of discharging their obligations, and in support 
 of this argument the most exaggerated statements are 
 made as to the depressed and suffering condition of 
 our farmers, wage-earners, and other producing classes. 
 This argument concedes that under the proposed sys- 
 tem of free coinage at the ratio of 16 to 1 all the vari- 
 ous kinds of currency in use by the people, including 
 the silver dollar itself, would be worth less than it is 
 now, for, of course, if this is not to be the result 
 money would be no cheaper than it is now. To assert 
 that the people are in debt is simply to say that they 
 have traded with each other on credit, that one part of 
 our fellow-citizens, relying upon the integrity and 
 financial standing of their neighbors and acquaintances, 
 have lent them money on time and sold property to 
 them without demanding immediate payment in cash, 
 and that in this way they have enabled many people to 
 carry on a useful business and live in comfortable 
 homes who otherwise could not have done so. If it is 
 a crime to lend money to a man who wants t. borrow 
 it, or to sell property on credit to a man who wants to 
 purchase it, and has no ready money to pay for it, let 
 the perpetrators be properly punished, but let us not in- 
 volve the whole country in confusion and disaster and 
 immolate the innocent and guilty alike in order to pun- 
 
JOHN G. CARLISLE. 511 
 
 ish the real offenders. If our people are in debt they 
 owe each other, and, consequently, about as many 
 would be actually injured as would be apparently bene- 
 fited by scaling the obligations down to a silver stand- 
 ard. The indebtedness of the farmers, mechanics, and 
 other laboring classes of our people, although large in 
 the aggregate, is quite small in comparison with the 
 whole indebtedness of the great railroad and manu- 
 facturing corporations, the national and state banks, 
 savings institutions, trust companies, insurance com- 
 panies, building associations, and other organizations 
 engaged in financial and commercial enterprises. These 
 various organizations are indebted to the people to the 
 extent of many billions of dollars, and while it is true 
 that many of the people are also indebted to them, 
 their debtors and creditors are not the same persons, 
 and, therefore, the debts cannot be set off against each 
 other and extinguished in that way. I deny that there 
 is any such thing as a distinct " debtor class " in this 
 country, for, while nearly every one owes some debts, 
 large or small, nearly every one has also some debts 
 owing to him ; in other words, he is both debtor and 
 creditor The laboring people, as a general rule, owe 
 very little at any one time, while their employers are 
 always indebted to them, because wages are not paid in 
 advance ; and besides, many of them have small de- 
 posits in savings and other banks, in trust companies, 
 in building associations, and large numbers of them 
 have their lives insured for the benefit of their wives 
 and children, and consequently they ar creditors of 
 the banks and the insurance companies. The savings- 
 bank depositors in this country last year numbered 
 4,777,687, and the wives and children of the depositors 
 
512 SILVER AKt) GOLD. 
 
 who depend upon these accumulated earnings for 
 future support doubtless numbered 10,000,000 more. 
 There were 1,925,340 depositors in the national banks 
 last year, and 1,724,077 of them had deposits of less 
 than $ 1,000 each, while state and private banks and 
 loan and trust companies held deposits for 1,436,638 
 people. Our life insurance companies, to say nothing of 
 companies insuring property against loss by fire and 
 otherwise, had 7,505,870 policies outstanding last year, 
 upon which the premiums had been paid, or were being 
 paid, by the people, and the mutual benefit and assess- 
 ment companies had 3,478,000 members. The building 
 and loan associations had nearly 2,000,000 members, all 
 of whom had paid their money in as required by the 
 rules of the body to which they belonged. Here, then, 
 are about 21,000,000 of our people, generally poor, or 
 at least people of moderate means, who have given 
 credit to these great corporations and companies, and, 
 in my opinion, it would be a grievous wrong to adopt 
 any policy which would deprive them of the legal 
 right to demand and receive just as good money as 
 they parted with when they made the deposits in the 
 banks or paid the premiums on their insurance policies. 
 The hard-earned savings of the poor ought not to be 
 sacrificed to the avarice of the wealthy mine-owners 
 or the ambition of aspiring politicians, and if the peo- 
 ple who have a substantial interest in the welfare of the 
 country and a just appreciation of their responsibilities 
 as citizens will exert their proper influence in pubLr 
 affairs this great wrong can never be perpetrated. 
 
 It is not my purpose to discuss here the various 
 propositions which have been made from time to time 
 for the improvement of our banking system, or for the 
 
a. CARLISLE. 618 
 
 retirement of United States notes, because the questions 
 involved in them are so important and so large thafc 
 they cannot be properly considered in connection with 
 the subject to which I have addressed myself. We 
 have an abundance of money in this country for all the 
 purposes of trade, and the disturbances and hard times 
 of 1893 and 1894 were not caused by a scarcity or con- 
 traction of the currency, but by a contraction of credit 
 resulting from a loss of confidence in the stability and 
 value of our currency. So far as the mere volume of 
 our currency is concerned, we had then and have now 
 an ample supply for all necessary purposes, but under 
 the existing system it is not properly distributed and is 
 not sufficiently elastic to meet all the changing require- 
 ments of business at different periods of the year. The 
 Unite(J States should go entirely out of the banking 
 business by the withdrawal of its arbitrary and com- 
 pulsory issues of notes and afford the people an oppor- 
 tunity to supply their own currency based upon their 
 own means and credit, thus enabling every community 
 to utilize its own resources when necessary and adjust 
 the circulation from time to time to the actual demands 
 of legitimate commerce. In what way this shall be ac- 
 complished is a question which has already engaged the 
 serious attention of the people and public authorities, 
 and it will no doubt continue to be investigated and 
 discussed until a plan is formulated which, if not per- 
 fect, will at least have the merit of being a great im- 
 provement upon the existing system. In the meantime 
 our highest duty is to preserve the present standard of 
 value, maintain the parity of the two metals, and keep 
 all the money in circulation among the people, whether 
 it be gold and silver coins, or paper based upon them, 
 
514 SILVER AND GOLD. 
 
 equal in purchasing power, so that no discrimination 
 will or can be made between those who receive silver 
 or paper and those who receive gold. A great govern- 
 ment should do nothing to discredit its own obligations 
 or diminish the value of the money in the hands of its 
 citizens, nor should the people of a great country ever 
 consent to the adoption of a policy, through experi- 
 mental financial legislation or otherwise, which would 
 vitiate the obligations of their contracts, interrupt the 
 regular course of their business and destroy the founda- 
 tions upon which their industrial and commercial sys- 
 tems have been constructed. The spirit of conservatism 
 is still strong among our people, and, notwithstanding 
 the delusive promises and selfish appeals that are now 
 largely influencing their opinions in some parts of the 
 country, the truth will ultimately prevail and I have no 
 doubt of the result when the time for final action 
 comes. 
 
BENJAMIN B. TILLMAN. 
 
 CHAPTER XXIX. 
 
 CARLISLE'S SPEECH CRITICISED BY GOV. B. R. TILL- 
 MAN, OF SOUTH CAROLINA. 
 
 I SHALL in what follows offer some criticisms, and 
 arguments in answer to the speech made by Secretary 
 Carlisle at Memphis, Tenn., May 23, 1895. I do this 
 because that speech has been circulated throughout the 
 country, and stands as the accepted creed of the gold 
 monometallists, and the ablest defence of the policy 
 now pursued by our government. 
 
 The vital nature of the issue is clearly stated by Mr. 
 Carlisle, when he says : 
 
 " I do not think the importance of the question can 
 be overestimated or that the gravity of the situation 
 can be overstated. The proposition to revolutionize 
 our monetary system and thus destroy the credit of the 
 government and the people at home and abroad, violate 
 the obligations of all contracts, unsettle all exchange- 
 able values, reduce the wages of labor, expel 
 capital from our country and seriously obstruct the 
 trade of our people among themselves, and with the 
 peoples of other countries, is one which challenges the 
 intelligence, patriotism and commercial honor of every 
 man to whom it is addressed." 
 
 There are millions of our fellow Citizens who no 
 doubt honestly believe this indictment so strongly 
 drawn against the advocates of bimetallism to be true 
 in every particular. There are other millions, a great 
 
616 SILVER AND GOLJX 
 
 majority 01 nie American people, I firmly believe who 
 feel that instead of impending disasters, the bolts have 
 already fallen : and that our monetary system has al- 
 ready been " revolutionized " ; that the credit of the 
 government has been so far " destroyed " that 162,- 
 000,000 of bonds were deemed necessary in time of 
 peace to bolster it up and others must follow. That the 
 credit of the people at home has been so injured, the 
 obligations of contracts so violated, all values so unset- 
 tled, so much more of labor or of the products of labor 
 are necessary to buy a dollar with which to pay 
 debts, that bankruptcy stares all debtors in the face, 
 while millions have already been pauperized by this 
 " monetary revolution." That this struggle to lift 
 mortgages is hopeless under existing conditions, and 
 the savings of all previous years of labor must be lost. 
 
 We know there are millions of workers out of em 
 ployment. We know the farmers of our land are sell 
 ing their crops for export at less than the cost of pro- 
 duction. Can the condition of the country be made 
 more desperate ? Will the restoration of silver to its 
 constitutional place as a money of final redemption in- 
 crease our ills? 
 
 Is the country about to be ruined, or is it already 
 ruined ? Are we threatened with a " spring of wars 
 unnumbered " from a return to the bimetallic standard, 
 or will it give us relief from a well-nigh unbearable 
 situation ? 
 
 Mr. Carlisle contends that the country cannot and 
 ought not retrace its steps. Let us examine his 
 arguments. We will find some remarkable cases of 
 self-deception or contradictions. 
 
 He says : 
 
- 
 
 BENJAMIN R. flLLMAN. 617 
 
 44 From the earliest times gold and silver liave been 
 used as money, by common consent of the people for 
 centuries before there was any law upon the subject or 
 any coins in existence. The laws of trade fixed and 
 regulated the actual and relative val'ues of both metals 
 in the purchase and sale of other commodities just as 
 they do now. They had been used as money several 
 centuries before any government undertook to establish 
 a ratio between them, and when this character of legis- 
 lation was first begun the public authorities did not at- 
 tempt to establish new values or new ratios but ac- 
 cepted those already fixed by the laws of trade and the 
 custom of merchants. Coins were made not for the 
 purpose of attempting to add anything to the intrinsic 
 or exchangeable value of the metal contained in 
 them, but for the purpose of attesting by public 
 authority its weight and purity." 
 
 So far it is the statement of fact as attested by 
 history. But listen to the "lame and impotent con- 
 clusions *' deduced from it: 
 
 " That the coinage of the metals does not now add 
 anything to their actual value in the commercial world 
 is conclusively proved by the facts that, in all the great 
 transactions between the people of different countries, the 
 coins are acceptable only at their bullion value, deter- 
 mined by their actual weight and fineness, and that bullion 
 itself is still used in making payments, just as it was 
 thousands of years ago. Whatever effect legislation 
 upon the ratios, in connection with legal tender laws, 
 may have had upon the use of the two metals in the 
 payment of antecedent debts, it has never had the 
 slightest effect upon the actual or relative values of the 
 two metals in national or international trade. * * * * 
 
518 SILVER AND GOLD. 
 
 The legal tender laws affect the debt-paying power of 
 the coin itself in the country where the laws prevail, 
 but the laws establishing ratio do not affect the value 
 of the metal contained in the coins either at home or 
 abroad, because it is the metal that fixes the value of 
 the coin and not the coin that fixes the value of the 
 metal." 
 
 This statement is utterly at variance with the facts. 
 
 Only one of the metals gold is being coined now 
 in any of the great commercial countries, and when 
 we remember that for hundreds of years the coinage 
 of the two metals at the mints of Europe and Amer- 
 ica kept the ratio approximately at 15J to 1 it is 
 astounding to be told that the " coinage of the metals 
 does not add anything to their actual value in the com- 
 mercial world." Can any sane or honest man believe 
 that the free coinage of gold and the interdict against 
 silver being coined have had no effect on the relative 
 value of the two metals ? Is the experience of man- 
 kind for ages and the teachings of history to go for 
 naught against the dictum of a financial doctrinaire 
 who lias argued with equal ability on both sides of 
 this question, even in the speech we are considering? 
 If the coinage of one metal and the failure to coin the 
 other do not affect value, why do the advocates of the 
 gold standard object so strenuously to restoring to sil- 
 ver its right of coinage Till any one assert that if 
 gold and silver could swap places, making silver the 
 standard of value with free mintage, and gold the com- 
 modity, that present ratio of the metals would not 
 be reversed and a silver dollar be worth one-eighth 
 of a gold dollar instead of one-thirty-second part ? In 
 twenty-two years the coinage laws and nothing else 
 
BENJAMIN R. TILLMAN. 
 
 have raised the value of the gold dollar to double its 
 normal value ^oth as compared with silver and with 
 all other kinds of property. 
 
 The ratio between the metals will settle itself when 
 the mints of the world are opened to the two on equal 
 terms, and as experience and custom among men had 
 made the ratio about 15| to 1 for thousands of years. 
 We can justly claim that the interference of govern- 
 ments by their coinage laws for the advantage of gold 
 and to the discredit of silver has had everything to do 
 with the relative valua of the two at this time, and 
 Mr. Carlisle's assertion to the contrary is proved to be 
 untrue. In this connection I assert as an historical 
 fact that the ratk< between the metals as bullion in the 
 marts of trade ^ever deviated from the ratio fixed by 
 law for coin ago more than 1 per cent, until the mints 
 \vere closed to silver. 
 
 Mr. Carlisle next discusses the question of standards 
 and satisfies himself and his followers, no doubt, uhat 
 actual bimetallism is an impossible attainment except 
 by and through the single gold standard now existing. 
 In a word one metal must be redeemable in the other 
 and be denied further coinage to obtain bimetallism. 
 Bimetallism, honest, real bimetallism, means the un- 
 limited coinage of both metals on the same terms into 
 primary money at some fixed ratio, no matter what ; 
 though the experience of ages had settled on 15J to 1 
 as about the right proportion. Whether the two circu- 
 late at the same time in a given country or first one 
 and then the other shall be its metallic currency, makes 
 no difference. Honest bimetallism means the use by 
 the nations of the earth of $7,500,000,000 gold and 
 silver, the world's entire stock, as primary money with 
 
520 SILVER AND GOLD. 
 
 which business may be transacted and debts paid. 
 Dishonest bimetallism means the use of just half that 
 much of gold money and the shrinkage of values to 
 correspond to the change of standard, and the reduc- 
 tion in the volume of legal tender. 
 
 The struggle among the nations of the world to ob- 
 tain gold is what has doubled its price or value. The 
 demand has been great because it is the only standard 
 of value, and has the right of way to the mints is 
 actual money by law and the supply being limited and 
 inadequate, it has continued to rise, requiring an in- 
 creased amount of silver and all other commodities to 
 buy a given quantity of .it. Bimetallism the double 
 standard coinage into primary money on terms of 
 equality of both metals can alone restore to the world 
 its lost prosperity. The double standard the circula- 
 tion on terms of equality of both metals, as Mr. Car- 
 lisle contends, may be impossible of attainment in any 
 one country for long without international agreement, 
 but the business relations existing between the nations 
 of the earth are so close and sensitive, that the price 
 or value of both depends on the mintage of both. 
 Bimetallism does not mean the simultaneous circula- 
 tion of both in a given country, but the right to coin- 
 age of both. Whether gold or silver shall then circu- 
 late in a country will depend, as Mr. Carlisle himself 
 says, on its coinage laws. I quote from the Memphis 
 speech : 
 
 "With free coinage or coinage upon equal terms, 
 and both are made legal tender, the coins of the under- 
 valued metal will be drawn out of circulation and out 
 of use as money in the country where the unequal val- 
 uation is made. 
 
BENJAMIN R. TILLMAN. 521 
 
 In other words the. ratio between the metals in coin- 
 age determines which metal shall circulate. But both 
 will not circulate if either is undervalued unless one 
 is denied coinage. Our silver dollars derisively called 
 " fifty-cent dollars " now circulate side by side with 
 the hundred cents gold dollar "practical bimetallism" 
 Mr. Carlisle calls it. But one is the slave of the other. 
 They are both "fiat money " and it is the stamp of the 
 government which gives them a money value. The 
 greenback paper dollar also "fiat" circulates too. 
 It is worth one hundred cents because it is redeemable 
 in " coin," gold or silver. Melt the gold and silver 
 dollars into bullion the gold is still worth one hun- 
 dred cents but the silver is only worth fifty. The gold 
 may go to the mint and be recoined ; the silver be- 
 comes a commodity, and may not be coined now in the 
 United States, yet Mr. Carlisle tells us we have " prac- 
 tical bimetallism," and also the only bimetallism that 
 is possible ! 
 
 The difference between the two, the false and the 
 true bimetallism, as well as the sophistry which seeks 
 to prove that gold has not appreciated in value, which 
 is the reason for the fall in prices and hard times, can 
 need no clearer exposition. To illustrate more fully 
 however: The paper dollar is money because it is a 
 promise to pay a dollar on presentation "in coin." 
 The silver dollar is a dollar, a coined dollar, as is the 
 gold dollar, and neither represents anything but itself. 
 They are primary money. But the silver dollar is no 
 longer worth one hundred cents as bullion because sil- 
 ver has been demonetized in this country and Europe. 
 Demonetized how? "B^ the laws of trade and the 
 custom of merchants ? " ^o, by law or royal edict. 
 
522 SILVER AND GOLD. 
 
 The greenback dollar is a dollar legal tender for debt 
 whether it is worth one hundred cents in coin or not 
 by decision of our supreme court. The silver dollar 
 is not a promise to pay, but holds its value because of 
 its stamp. The gold dollar is a dollar at all times ancf 
 in all shapes because of its right to coinage under the 
 law, and yet Mr. Carlisle says that "Legislation hnn 
 never had the slightest effect upon the actual or rela- 
 tive values of the two metals in national and interna- 
 tional trade." How could an honest man make such a 
 statement ? 
 
 We are next told that should the United States re- 
 store the free coinage of silver without similar action 
 by other countries, all our dollars in circulation would 
 become fifty-cent dollars because that is the commercial 
 value now of the silver in a dollar. Our old greenback 
 friend the stay and prop of the Union during the civil 
 war must of course fall to the level predicted for his 
 white brother. u The laws of trade and the customs of 
 merchants " in spite of legislation, which I have shown 
 has such- a marked effect on the ratio or relative value 
 of the two metals will drive the price of the silver 
 dollar and the greenback both lower than greenbacks 
 ever fell except for a brief period during the darkest 
 hours of the war, when Confederate successes made the 
 preservation of the Union doubtful, though the popu- 
 lation of the dis-United States was then only 32,000,- 
 000 in sound members and 9,000,000 of these were in 
 the seceded states and the amount of greenbacks in cir- 
 culation was $1,640,000,000. The yellow dollar will 
 again disappear from among us as he did in 1861. We 
 are now a united people of 70,000,000; we are at peace. 
 Yet we are gravely told by the Secretary of the Treasury, 
 
JOHN G. CARLISLE, 
 
BENJAMIN R. TILLMAN. 525 
 
 the leading fiscal officer of the richest and greatest 
 nation on the earth, that we are at the mercy of the 
 "laws of the trade and the customs of merchants " in 
 other countries ; that our people are bound by the Shy- 
 locks of Europe and must submit, that we dare not act 
 independently and emancipate ourselves from the grind- 
 ing thraldom ! 
 
 Shade of Washington! who led 3,000,000 into the 
 light of liberty and independence ! Shade of Jefferson ! 
 author of the immortal declaration of the 4th of July, 
 and first of Democrats I Shade of Jackson ! hero of 
 New Orleans and destroyer of the plutocracy which 
 sought to enslave the peo^a of the republic in its 
 infancy ! Shade of Lincoln I typical American, who 
 sprung from common people, loved them with the 
 /earning love of a mother and warned them of this 
 very danger! have we sunk so low? Must this great 
 country await the nod and beck of the aristocracies of 
 Europe ? Must our idle millions continue to beg for 
 work and go hungry or join the army of tramps and 
 beg for bread. Must tens of millions of farmers con- 
 tinue to 
 
 * 4 Lower buckets into empty wells 
 And grow old in drawing nothing up," 
 
 receiving no reward for their labor because the " idle 
 owners of idle capital," here and in Europe, have de- 
 creed the destruction of one of the money metals of the 
 world and their own government is too cowardly to 
 strike off the shackles of foreign dictation and restore 
 the money of the constitution ? 
 
 Can any sane man be niade to believe that it is possi- 
 ble for Mr. Carlisle's prediction to come to pass? 
 80 
 
526 SILVER AND GOLD. 
 
 That with our increased population and wealth we are 
 so dependent on other peoples that we cannot, dare 
 not, act independently in a matter of such vital mo- 
 ment ? Are we indeed so insignificant a factor in the 
 world's affairs that we must pay tribute to British 
 greed and await the permission of Rothschild and his 
 guild of bankers to remonetize silver? Where were 
 Rothschild and his bankers during the civil war? Did 
 they come to the assistance of our government then ? 
 Of what use was the Declaration of Independence any 
 way? 
 
 One's indignation grows weary at the cowardly 
 truckling to British masters, but we are dealing with 
 argument and not invective and must return to this as- 
 tounding proposition from Mr. Carlisle's speech : 
 
 "All who are indebted to us are , therefore, to have the 
 privilege of paying in silver, while all to whom we shall 
 become indebted are to have the privilege of requiring 
 us to pay in gold." 
 
 Suppose silver restored to coinage and as a result 
 gold disappears or goes to a premium of two to one, 
 will the above statement or prediction come true ? Bear 
 in mind that nobody owes us but that we are the 
 debtors and that nearly all our exports are agricultural 
 products. In another place Mr. Carlisle says s 
 
 " It is an axiom in trade that the prices of exportable 
 products are fixed in the foreign market where the tmr. 
 plus is sold and are fixed in the currency of that coun- 
 try according to its nominal value there." 
 
 Well, it will follow as a matter of course that af 
 home or in the country where produced, these articlec 
 
BENJAMIN R, TILLMAN. 627 
 
 re to be priced in the home currency. Then if it 
 should happen as we are told that the remonetization 
 of silver by this great and rich country should have no 
 effect on its value in the markets of the world and all 
 our dollars really become fifty-cent dollars away from 
 home, then this would be the result. 
 
 The price of every thing we export would double in 
 the home market while remaining as at present in the 
 European or gold markets, while what we import would 
 cost the same it now does in the foreign markets and 
 would sell for double at home. Our silver dollars 
 would weigh as bullion and be fifty-cent dollars abroad 
 and at home. But we export more than we buy and 
 hence would send no money to pay but would exchange 
 products just as we do now. Wheat would be worth 
 one dollar a bushel in the United States and sell for 
 fifty cents in gold in Europe. Cotton ten cents in 
 New York and five cents in Liverpool and so on, 
 through the list of exports. 
 
 Would that hurt the American farmer? "But the 
 exchanges, the fluctuations ! " exclaims Mr. Carlisle. 
 "The producer must pay both these risks," and he at- 
 tempts to show that the farmer would not get as good 
 prices for his product as he does now when the gold 
 standard makes no difference among gold-standard 
 countries and exchange rises and falls only between 
 silver-standard countries as silver goes up or down. 
 The reply is the farmer can stand it and will thank God 
 for the chance. But silver will be constantly rising in- 
 stead of falling as it has been for twenty years and 
 would soon reach the old ratio. The argument can 
 have no weight with any farmer who owes a debt and 
 compares his ability to lift the mortgage with wheat at 
 
528 SILVER AND GOLD. 
 
 50 cents and wheat at fl a bushel. Mr. Carlisle 
 grieves, or seems to grieve, because the Englishman 
 eould then send over to us his 50 cents' worth of silver 
 equal to a dollar to pay a dollar debt with. While the 
 farmer grieves because he now has to a send a dollar's 
 worth of wheat and gets back only 50 cents in gold to 
 pay his debt. Let those who owe us pay the silver 
 dollar then, and let us pay our foreign creditors in gold 
 50 cents' worth of it or give two dollars f or one. 
 That is what we now do in effect on all we buy from 
 them. Our debts in Europe are not a hundredth part 
 of the debts we owe at home, and cannot pay at the 
 present prices of our products. International exchanges 
 are as nothing compared with our local and interstate 
 commerce. 
 
 But let us see. We owe Europe a large amount and 
 have to send the interest over annually. The balance 
 of trade in our favor pays most of this but the rest is 
 paid in money. Some of the bonds are gold bonds, 
 but most of them are " coin " bonds, and hence a dollar 
 in silver or gold is legal tender for either principal or 
 interest. This interest is now paid in gold only and is 
 in effect a double interest, and it is hard to understand 
 why the government of a debtor nation, and that nation 
 the greatest producer of silver, should pursue a policy 
 which lowers the price of silver and impoverishes its 
 agricultural classes. If that interest is paid in silver 
 instead of gold, the silver dollars under the " parity " 
 policy of our government are exchangeable for gold 
 and are worth only 50 cents otherwise, and the practi- 
 cal effect is to require $2 worth of products to pay $1 
 of interest. This will be clearly understood if we sup- 
 pose silver remonetized an^ coined at the ratio of 16 
 
BENJAMIN R. TILLMAN, 
 
BENJAMIN R. TILLMAN. 531 
 
 to 1. According to Mr. Carlisle the silver dollar would 
 then be worth only 50 cents, yet it would still pay the 
 same interest it pays now. It is clear then that under 
 the gold standard policy now pursued we are paying 
 double interest on all our bonds held in Europe, and 
 that is why England will never consent to remonetize 
 silver by international agreement. 
 
 But Mr. Carlisle calls this proposition " Repudia- 
 tion," " National dishonor ! " It is neither. The bonds 
 are "coin" bonds just as all United States bonds and 
 greenbacks are payable in coin. Silver and gold are 
 both coin when stamped as dollars. Where, then, is 
 the dishonesty in paying what we promised? "It is 
 so nominated in the bond," and no fair or honest man 
 can complain. When Shylock was offered his money 
 he demanded the pound of flesh also. He lost both in 
 consequence. The Shylocks of our day have learned 
 to bribe the rulers and judges so that they get both 
 money and flesh. The demonetization of silver gives 
 it to them. And the " Daniel come to judgment," at 
 Memphis, is now hailed by the tribe of Rothschild 
 with, 
 
 " O, noble judge ! O, wise and upright judge ! " 
 The demonetization of silver was once denounced as 
 the " Crime of 1873." Its remonetization now on the 
 same authority would be an " experiment " wrought 
 with disaster. The talk about " parity," " sound 
 money," and commercial honor are mere catch words 
 to deceive the people and keep them bound hand and 
 foot while the toiling millions of producers are robbed 
 annually of hundreds of millions. 
 
 The entrance to Dante's Hell had over it : 
 " Who enters here leaves hope behind." 
 
582 SILVER AND GOLD. 
 
 The peopio of the United States were led bv traitors 
 into that dark portal in 1873. They have tried in vain 
 ever since to retrace their steps and get out. Mr. Car- 
 lisle tells us it would be a most disastrous experiment 
 to return to the upper world where the sun of hope and 
 prosperity is shining. He last year proposed to lock 
 the door behind us by the issue of gold bonds and it 
 is still his purpose to aid the president in forcing 
 the country onward and downward in the path of 
 ruin. 
 
 " International agreement " was not deemed neces- 
 sary by those whc sneaked the demonetization act 
 through congress in 1873. The United States led off 
 in that " crime against humanity." This country dealt 
 the first blow and forged the first link in the chain 
 which binds her a captive to Mammon. It is cowardly 
 to do wrong alone and thep cry out for help to do 
 right. Our own people are the greatest sufferers. They 
 will be most benefited by the restoration of silver. En- 
 gland did not affect the price of silver or destroy the 
 ratio ;,f centuries till the United States led off in sup- 
 port of the British scheme of demonetization adopted 
 in 1816. France is the friend of the wh?te metal and 
 would act immediately if we set the example. It ia 
 idle to ask or expect English co-operation. Mr. Glad- 
 stone said in a speech in parliament two or three years 
 back (I quote the substance not the exact words) : " It 
 would be an inestimable blessing to the people of the 
 world if silver were restored as money, but England 
 cannot afford the specific. It means an annual gift to 
 the other nations of the world of $500,000,000 ! " 
 
 Does anybody expect England to surrender so large 
 a sum of her own free will ? It is useless, then, to talk 
 
BENJAMIN R. TILLMA^. 633 
 
 of international agreement ; and to wait for it means 
 to wait forever. We may turn our faces to the wall 
 and bid adieu to any hope of prosperity. We have ig- 
 nored the teachings of history and the experience of 
 mankind and entered on a dismal experiment. So far 
 from bimetallism a restoration of silver to coinage 
 being an experiment ; it was the fixed policy and cus- 
 tom among nations during all past ages. It required 
 all of both metals to supply the world with primary 
 money, and the policy of redeeming one or the other 
 has existed for twenty-two years only. 
 
 To sum up : It has been shown, 1, That legislation, 
 the laws governing coinage and refusing to silver the 
 right of mintage is alone responsible for the change 
 in the ratio between the metals and the fall of silver ; 
 2, that the destruction of silver as a standard or pri- 
 mary money has produced the shrinkage in values and 
 the fall in prices. Under the well-established rule that 
 supply and demand control prices money yields obedi- 
 ence to this law as well as products, and the world's 
 stock of money being reduced one-half by the demone- 
 tization of silver, and silver itself becoming a commod- 
 ity, values adapted themselves to the reduced supply. 
 Mr. Carlisle's major premises being false, all hi? argu- 
 ment falls to the ground. 
 
 I will close by recalling what he said about the rule 
 which obtained when legislation first began on the sub- 
 ject of coinage : 
 
 " The public authorities did not attempt to establish 
 values or new ratios but accepted those already fixed 
 by the laws of trade and the customs of merchants. 
 Coins were made not for the purpose of attempting to 
 add anything to the intrinsic or exchangeable value of 
 
684 SILVER AND GOLD. 
 
 the metal contained in them, but for the purpose of at- 
 testing by public authority its weight and purity." 
 
 All that is necessary is to return to this custom of 
 the ages. Give the two metals the right to be coined 
 into money the ratio will adjust itself and values rise 
 to their normal level. It is a matter of law, for coinage 
 depends on law alone. 
 
B. CHEADLE. 685 
 
 CHAPTER XXX. 
 
 BILVBB IN THE CONSTITUTION BY J. B. CHEADLE, 
 EX-CONGRESSMAN FROM INDIANA. 
 
 I DESIRE to present some phases of the legal ques- 
 tions involved in the discussion of the currency and 
 ask the gold men whether they propose to obey the law 
 and yield a cheerful obedience to the plain and manda- 
 tory provisions of the Constitution. Ours is a Consti- 
 tutional government, that Constitution being the su- 
 preme law of the land. It must be enforced in every 
 state and obeyed by all the people. To enforce it the 
 government was established and is maintained. The 
 Constitution is supreme not in one but in all things ; it 
 must, therefore, be obeyed in all things. 
 
 Only recently an act of congress that levied a tax 
 upon the incomes of the rich was declared null and 
 void by the Supreme court of the United States, for the 
 reason that it was enacted in violation of the constitu- 
 tion, notwithstanding the direct grant of authority to 
 congress "to lay and collect taxes, duties, imposts and 
 excises." This decision prohibits the laying and collec- 
 tion of taxes unless they are laid in compliance with 
 the provisions of the Constitution. There is no appeal 
 from that decision. The fact that there will be a def- 
 icit of not less than $45,000,000 in the revenues for 
 the fiscal year ending June 30 counts for naught. The 
 Constitution must be obeyed. That is the supreme fact 
 of the hour. 
 
SILVER AND GOLD. 
 
 Do not the bankers know that they are defying the 
 Constitution when they declare against silver and de- 
 nand that gold, and gold only, be made the legal stand- 
 ird of values in our money system ? Congress can pass 
 iaws, but if they are to be legal they must be enacted 
 by congress pursuant to the grant of authority in the 
 Constitution. There is no escape from this conclusion. 
 I lay down this proposition that on no other question 
 must the Constitution be more literally obeyed than in 
 the grant of authority "to coin money and regulate the 
 value thereof." The necessity of absolute honesty in 
 creating a money system and establishing the unit of 
 value in that system renders this duty imperative. 
 
 What is the command to congress in the Constitu- 
 tion : " To coin money, regulate the value thereof, and 
 of foreign coin, and fix the standard of \veights and 
 measures." This grant is in section 8, article 1, of the 
 Constitution, and is rendered still more explicit in sec- 
 tion 10 of the same article, where, in enumerating the 
 restrictions upon the states, they are prohibited from 
 making " anything but gold and silver coin a tender in 
 payment of debts." Thus it will be observed that con- 
 gress is commanded to coin money and regulate the 
 value thereof, and all other authorities are prohibited 
 from making "anything but gold and silver coin a ten- 
 der in payment of debts." Gold coin and silver coin 
 are thus made the constitutional and legal tender 
 money in payment of debts. Having been made legal 
 tender, how can either one of the metals be dethroned 
 as legal tender money? Certainly not by act of con- 
 gress, for the command to it is t^ coin money, that is, 
 create money not destroy it. 
 
 Daniel Webster, the greatest constitutional lawyer 
 
J. B. CHEADfil. 537 
 
 this nation has produced, said : " I am clearly of the 
 opinion that neither congress nor any other authority 
 can legally demonetize either silver or gold." If one 
 coin can be dethroned as money then the other one can 
 be, and thus the Constitution could be disregarded, yes, 
 overthrown. Mr. Webster made one other statement 
 at the same time that I commend to the most thought- 
 ful consideration of gold-standard men. These are his 
 words : " The command to congress is to coin money, 
 not destroy it ; to create legal tender money for the use 
 of the people, and the grant of authority to create 
 money cannot be construed to mean authority to de- 
 stroy money." 
 
 The Constitution having made silver coin a legal 
 tender in payment of debts it must retain thr* quality 
 until it is taken away by a constitutional amendment. 
 Therefore, when men demand the gold standard they 
 deliberately request that the supreme law of the land 
 be disregarded ; they are traitors to the spirit of oui 
 institutions. Certainly the wealth of the nation will 
 not invoke the aid of the supreme law of the land to 
 evade the payment of a tax because it was in violation 
 of that supreme law, and then, in the next breath, ad- 
 vocate the open and willful violation of one of its most 
 important provisions, the effect of which would be tc 
 destroy one half of the legal tender coin money of the 
 Country. 
 
 The plain mandate is to coin legal tender money out 
 of silver and out of gold, and when coined regulate the 
 value of each coin. 
 
 I want to emphasize, if possible, the fact that every 
 consideration demands that the Constitution be enforced 
 in all of its provisions in every section of our country, 
 
588 SILVER AND GOLD. 
 
 National iionor demands it, and national honor nevet 
 considers the question of cost. The permanency of our 
 liberties demands its enforcement, and these are above 
 all cost. The blood of all the heroes who died in the 
 establishment and preservation of the Constitution cries 
 aloud for its enforcement, and a loyal people dare not 
 disregard this appeal. 
 
 Thus it will be seen that in this contention the silver 
 men have the Constitution on their side. They demand 
 that it be enforced, and in this demand they will be- 
 come stronger in the confidence of the public the longer 
 this question is debated. 
 
 Upon the question of honest money T want to say 
 this: The act of congress of 1792 created the only 
 honest dollar, the only legal coin dollar known to our 
 money system. Tt was the silver dollar, and the same 
 section of the same act measured all other coin money 
 in and by this dollar. To illustrate : The act fixed 
 the value of the $10 gold piece as follows : " Of the 
 value of ten dollars or units," the same of the $5 and 
 $2 and 50-cent gold coins. So that the two metals were 
 tied together at fche legal ratio. The quantity of gold 
 in the gold coin has been changed, but the quantity of 
 silver remains the same now, after the lapse of more 
 than 100 years. This other fact remains : During the 
 first half of the present century the world's output of 
 silver exceeded that of gold $614,028,000, and yet free- 
 dom at the mints held it at par with gold at its legal 
 ratio, notwithstanding the increased silver output, and 
 it held it at par until 1873, when the tables were turned 
 and the world's output of gold exceeded that of silver. 
 In 1873 the mints were closed to silver, when it was 
 worth $ 1.03 in gold. No^ mark the result in 1895, 
 
JOSEPH C. SIBLEY, 
 
J. B. CHEADLB. 641 
 
 when the oucput of gold from 1852 to 1893, forty -one 
 years, exceeds that of silver in the enormous sum of 
 $1,142,975,000. Silver that was above par in gold 
 when free at the mints loses value when measured in 
 gold until it is only worth 67 cents instead of 100 cents. 
 It must be apparent to every candid mind that the hon- 
 est dollar is the creature of the law, and that where 
 both coins, gold and silver, are made legal tender in 
 payment of debts it is an imperative necessity that both 
 be treated alike at the money mints, in order that the 
 coins may be of equal value. The fact that freedom 
 at the mints kept silver at par regardless of the output 
 of the metals, and the further fact that, when denied 
 the freedom of the mints, it declined in value, in the 
 face of a largely increased output of gold, forever set- 
 tles the status of the honest dollar. It is yes, it must 
 be the creature of the law. 
 
 I will restate the proposition so that the children can 
 comprehend its meaning. The only constitutional 
 legal tender money consists of gold and silver coins, 
 authorized by act of congress pursuant to grant of 
 authority in the Constitution, which coins have an equal 
 value upon an established legal ratio. To maintain 
 these coins at the same value they must receive the 
 same protection at the money mints. The right is now 
 denied silver, with the result that its equal value is de- 
 stroyed. The silver men demand as of right that silver 
 be restored to its rightful place in our constitutional 
 money system. The bankers and gold men ask that 
 the Constitution be disobeyed that gold, and only gold, 
 be made the legal tender in payment of debts. 
 
 'Will the American people who freely gave their 
 loved ones to die in defence of the Constitution u ~*til 
 
642 SILVER AND GOLD. 
 
 the dead numbered 364,112, and expended thousands 
 of millions of money to save it, now obey it themselves, 
 or will they permit the greed for gold to annul one of 
 its plainest provisions ? Shall we be patriots or trai- 
 tors? 
 
HON. JOSEPH C. SIBLEY. 548 
 
 CHAPTER XXXI. 
 
 BY HON. JOSEPH C. SIBLEY OF PENNSYLVANIA. 
 
 SILVER is the only stable standard of values main 
 taining at all times its parity with every article of pro- 
 duction except gold. The ounce of silver, degraded by 
 infamous legislation from its normal mintage value of 
 1.2929 an ounce to about 60 cents, has kept its parity 
 with the ton of pig iron, the pound of nails, and all 
 the products of our iron mills. The ounce of silver has 
 maintained its parity with the barrel of petroleum, with 
 granite blocks, with kiln-burnt bricks. With lumber 
 growing scarcer year by year it still keeps its parity. 
 It is at parity with the ton of coal ; with the mower, 
 reaper, thresher, the grain drill, the hoe, and the spade. 
 Silver at 1.2929 and beef at 7 cents per pound in the 
 farmer's fields has kept its parity, and the ounce of sil- 
 ver at 60 oents buys to-day beef at 2 cents per pound 
 on foot. The pound of cotton and the ounce of silver 
 have never lost their level. No surer has the sun in- 
 dicated on the dial the hour of the day than has the 
 ounce of silver shown the value of the pound of cotton. 
 As surely as the moon has given high tide or low tide, 
 just so surely has the ounce of silver given the high 
 and low tide prices of wheat. The ounce of silver has 
 maintained its parity with your railway dividends, with 
 the earnings in your shops %nd factories, in all depart- 
 ments of effort. 
 
 If parity with gold is demanded, and the Secretary 
 
644 SILVER AND GOLD. 
 
 of the treasury construes the law to mean whenever 
 demanded to pay gold, then let us maintain the parity 
 by reducing the number of grains in the gold dollar 
 from 23.22 grains pure gold to 15 grains, or to such 
 number of grains as will keep it at parity. While we 
 may wrong by so doing the creditor class, through the 
 increased value of the products of human industry, we 
 must remember that foi every one creditor there are a 
 thousand debtors ; and we should remember that the 
 aim of the government is the greatest good to the 
 greatest number, and also the mininum amount of evil. 
 But no such drastic measure is necessary. Parity may 
 be maintained and evex-y declaration of governmental 
 policy fully met by accepting for all dues, public and 
 private, including duties upon imports, silver and 
 paper issues of the nation of every description what- 
 soever. 
 
 In all the gold-standard nations destitution and misery 
 prevail. With great standing armies in Europe out- 
 breaks are not of frequent occurrence, and yet one 
 rarely peruses his paper without reading of these out- 
 breaks. At Montreal, St. Johns, Newfoundland, in 
 Italy, in Spain and Portugal, Sunday gatherings in 
 Trafalgar Square, London, of the thousands of unem- 
 ployed, where rioting is prevented only by keeping the 
 crowds in motion. In Nebraska and Kansas, the land 
 of wheat and corn, we read of starving households; 
 even in Ohio appeals are sent out for the relief of thou- 
 sands of starving miners, and yet men have the tem- 
 erity to tell us that the evils arise from overproduc- 
 tion. 
 
 Succeeding the great Irish famine of 1840, writers 
 speciously commenting upon that great disaster, in 
 
HOK. JOSEPH C. S1BLEY. b45 
 
 which thousands of lives were pinched out by hunger, 
 held that Ireland was too densely populated ; that 
 people starved because of overproduction of men, 
 women and children. To-day thousands of men, 
 women and children are suffering the pangs of hunger, 
 and yet we are told that this comes from overproduc- 
 tion. Is it from overproduction of wheat? People 
 are freezing. Is it because of overproduction of coal ? 
 Multitudes are in rags and nakedness. Is it because of 
 overproduction of cotton and wool ? We were told 
 that we could not hold bimetallism because of the over- 
 production of silver. 
 
 Men tell u that there is an overproduction of silver, 
 and that its price had diminished in comparison with 
 gold because of its great relative increase. Such state- 
 ments are not only misleading, but absolutely false. 
 Figures show that in 1600 w produced 27 tons of sil- 
 ver to 1 ton of gold ; in 1700, 34 tons of silver to 1 ton 
 of gold ; in 1800, 32 tons of silver to 1 ton of gold ; in 
 1848, 31 tons of silver to 1 ton of gold ; while in 1880 
 the production of silver had declined until we pro- 
 duced 18 tons of silver to 1 ton of gold ; and in 1890 
 but 18 tons of silver to 1 ton of gold ; and that, instead 
 of the ratio of coinage being increased above 16 to 1, if 
 relative production of the two metals is to determine 
 the ratio, then the ratio should have been diminished 
 rather than increased, and confirms the fact that merely 
 the denial of mintage upon terms of equality with gold 
 is responsible for all depreciation in the value of silver 
 bullion. 
 
 All the silver in the world to-day can be put iu a 
 room 66 feet in each dimension, and all the gold can 
 be melted into a cube of 18 or 20 feet. There are to- 
 81 
 
646 SILVER AND GOLD. 
 
 day less than twenty-five millions of bar silver in all 
 Europe. Mr. St. John, the eminent banker of New 
 York, had stated that there was not over five millions 
 of silver that could be made available to send to our 
 mints. Begin to coin silver to the full capacity of our 
 mints, and we would have to coin it for twenty years 
 before giving to each inhabitant a per capita circulation 
 that France, the most prosperous nation in the world 
 to-day, possesses. 
 
 Men tell us that money must have intrinsic value, 
 forgetful of the fact that a paper bank was established 
 in Venice in the eleventh century whose bills of emis- 
 sion at no time failed to command a premium over and 
 above gold and silver. Historians inform us that the 
 premium upon the paper over gold in commercial trans- 
 actions rose as high as 32 per cent., until by law the 
 Republic declared that it should be illegal to demand in 
 excess of 20 per cent, premium on the paper money 
 over gold and silver coin of standard value. That 
 bank was founded, stood the shock of arms, the muta- 
 tions of time and governments, for five hundred years, 
 and until the day that Napoleon marched his conquer- 
 ing legions into Venice. The faith and the property of 
 the Venetian Republic stood as a sure foundation for 
 issue. 
 
 The struggle to-day is between the debtor and credi- 
 tor classes. With one-half the world's money of final 
 account destroyed, the creditor can demand twice as 
 much of the products of your field, your shop, and 
 your enterprise and labor for his dues. In this strug- 
 gle between debtor and creditor the latter has taken 
 undue advantage and by legislation doubled and trebled 
 tht volume of the debt. For example, suppose you had 
 
HON. JOSEPH C. SIBLET. 547 
 
 giyen a note to your neighbor promising to pay, one 
 year after date, 1,500 bushels of wheat. You thresh 
 the grain, measure it into the bin, and notify your 
 creditor that the wheat is at his disposal. He goes to 
 the granary, sacks the wheat, and then brings up your 
 note and states, " I have taken 500 bushels, which I 
 have endorsed on your note. I will call on you for the 
 balance when next year's crop is harvested." You say, 
 " Why did you not take all the wheat and let me make 
 full payment?" The note holder answers. "I did 
 take all the wheat, and there were only 500 bushels in 
 the bin instead of 1,500." 
 
 You fail to understand how that can be possible, 
 You know that you threshed out and measured into 
 that bin 1,500 bushels of wheat. You go to the gran- 
 ary and find that it is true. No wheat is there, but 
 there appears to be an enormous lot of wheat upon those 
 wagons for 500 bushels, and you ask the note holder, 
 " Who measured this wheat ? and let me see how you 
 measured it." You see something in the form of a 
 measure about as large as a washtub, and you ask him 
 what that is. He tells you that is the half-bushel meas- 
 ure which he measured your wheat; but you reply, 
 44 My dear sir, that holds more than half a bushel ; that 
 measure will hold 6 pecks." He answers, " Correct, it 
 does hold six pecks, but it now takes 12 pecks to make 
 a bushel, instead of 4 pecks. Together with other 
 friends who had wheat coming to us we went before the 
 Committee on Coinage, Weights, and Measures and 
 secured the passage of a legislative enactment, that it 
 should require 12 pecks instead of 4 pecks to make a 
 bushel. We have secured this legislation for the 
 proper protection of the holders of wheat obligations, 
 
548 SILVER AND GOLD. 
 
 for our own security, and for fear that we should be- 
 come timid and lose confidence in your ability to pay 
 unless we changed the standard of measure." But you 
 reply, "Sir, we who have obligations maturing, con- 
 tracts long outstanding, have never asked or consented 
 to the enactment of such legislation. Our representa- 
 tives in congress never permitted us to understand that 
 any such legislation was pending." He replies, " Sir, 
 you might have known it had you desired to do so, or 
 had you kept yourself as well posted in legislative af- 
 fairs as do the holders of obligations calling for prod- 
 ucts of the soil for payment. We have our represen- 
 tatives in congress. We reward them for their fidelity 
 to our interests ; we punish them for fidelity to yours. 
 You are not capable of comprehending problems of 
 such intricate nature as are involved in the system of 
 weights and measures. While you have been debating 
 the tariff we have been students of the financial school 
 taught by Rothschild and his American allies. You 
 should not produce so much wheat, or should devote 
 your attention to better tillage of the soil. You should 
 be gteadfast and loyal to our congressmen and to our 
 party. Vote the straight ticket and beware of the evils 
 of overproduction." 
 
 This, in my judgment, is not a far-fetched illustra- 
 tion, but depicts the exact condition against which pro- 
 duction to-day protests. The debtor's obligation, true, 
 does not call for wheat in specific terms. It calls for 
 dollars, but by legislation we have made the dollar 
 three times as large in purchasing power or in measur- 
 ing-values as it was before. We talk about gold being 
 the only money of intrinsic value, and attempt to 
 befog and mystify the masses by telling them that it 
 
HON. JOSEPH 0. S1BLE1 346 
 
 lias intrinsic value, when its value is merely the artifi- 
 cial product of legislation. 
 
 Enact a law, to be rigidly enforced, providing that no 
 meat of any kind, whether " fish, flesh or fowl," ex- 
 cept mutton, shall be used for food. What will be the 
 intrinsic value of your beef cattle, of your swine, your 
 poultry, and your fish to-morrow ? The mutton- 
 headed monometallists would tell you that the great 
 increase in the value of mutton was because of its in- 
 trinsic worth. Let this nation and the commercial na- 
 tions of the globe enact a law to-morrow, that neither 
 cotton, nor silk, nor fabric should be used for clothing 
 or covering, forbid the factories of the world to spin or 
 weave aught but wool, and what will be the intrinsic 
 value of cotton or silk thereafter? Wool will be king ; 
 its value will be enhanced, but cotton, hemp, and silk 
 will be as valueless as weeds or as gossamer webs. 
 
 With the mints open to free and unlimited coinage 
 of both gold and silver there has never been a moment 
 when silver has not maintained its parity with gold, 
 and at a ratio of 16 to 1 commanded a premium of 
 more than 3 per cent, over gold. And if, by some for- 
 tunate discoveries to-morrow, gold should be found in 
 great quantities sufficient to lessen the income of the 
 annuitant, the bondholding, or the fixed-income class, 
 there would arise a demand for the demonetization of 
 gold and the establishment of the pearl, ruby, or dia- 
 mond standard of values. Whatever standard can 
 bring to grasping hands and greedy hearts the most of 
 the toil, the sweat, and unrequited effort of his fellow- 
 man, this standard will be demanded by the represen- 
 tatives of greed, and must be resisted by those who re 
 present humanity and Christianity. 
 
6SO 6ILVE& AKt QOLfi. 
 
 We are not dependent upon the opinion of mono- 
 metallist or bhnetallist. There have been standards 
 erected whereby men can unerringly determine whether 
 values have appreciated or depreciated in comparison 
 with gold. In 1845 the London Economist sought to 
 ascertain the range of values which should determine 
 any increase or decline thereof. They took the values 
 of twenty -two leading articles of production and con- 
 sumption in Great Britain, from 1845 to 1850, taking 
 enough units to make 100 or one dollar. For instance, 
 one unit of wheat, one dollar ; ten units of cotton, one 
 dollar ; three units of wool, one dollar, and thus 
 through twenty-two leading articles of production and 
 consumption, with enough units of each of the given 
 articles at the average range of values during the five 
 years nr,med to establish a standard. Therefore, the 
 value of the twenty-two leading articles forming the 
 basis of computation would add 2,200. If prices 
 should vary so that one unit of wheat should be worth 
 1.25, ten units of cotton 1.10, three units of wool 90, 
 the average rise and fall would be indicated by the 
 total footings of the twenty-two leading articles thus 
 forming the index number. 
 
 The results of these tables are astonishing. The 
 average of values which from 1845 to 1850 had shown 
 2,200 as the index number, owing to the discoveries of 
 the gold mines of California, adding to the volume of 
 money of final account, steadily increased. The out- 
 put of Australia commencing to come into the chan- 
 nels of commerce in 1853, added still more to the foot- 
 ings of the index columns. Year by year values in- 
 creased, until in 1864 high-water mark was recorded, 
 and the index number was then 3,780. From 1866 to 
 
HO*. JOSEPH C. 8IBLEY. 561 
 
 1878 pnc.es declined, largely owing to the great con* 
 traction in the volume of American currency which 
 tended to reduce the value of American products. But 
 the real depreciation in the total footings did not set in 
 until the United States, following the lead of Germany, 
 demonetized silver. From that time to this the decline 
 has been rapid. 
 
 Prior to 1873 but two nations, Great Britain and 
 Portugal, were upon the gold basis. They had a popu- 
 lation of 42,000,000 of people. To-day the same, or 
 even a less amount of gold, is divided among the 320,- 
 000,000 of people who have adopted the gold standard. 
 The result has been a continuous struggle for gold and 
 a continuous shrinkage of values proportionate to the 
 enhancement of gold. On the 1st day of Januarys 
 1893, the index number was 2,121 showing a range of 
 values below those obtaining in 1845-1850. The 1st 
 day of January, 1894, the index number was 2,082 ; 
 and on the 1st of January, 1895, the index number is 
 1,923, or a decline of nearly 50 per cent, in values be- 
 low the year 1864, arid a decline in values of about 12 
 per cent, below those prevailing in the period embraced 
 between the year 1845 and 1850. 
 
 This decline must be checked, or we must return to 
 the condition of the middle ages, to its miseries, to its 
 woes, to a period when money was so valuable, during 
 reign of the Henrys, that seven cents measured as 
 much of the products of the field, the brawn, and the 
 muscle as are measured by one dollar of the present 
 day. 
 
 We have plucked the deadly Upas tree from an alien 
 soil and planted it in the free soil of this Union. What 
 are its fruits ? It has given the homesteads of thou- 
 
552 SILVER AND GOLD. 
 
 sand* of toilers to the creditor. It has given one-third 
 of our railway mileage to receivers. It has given re- 
 duced earnings to every one of the other two-thirds, 
 and dividends upon stock and interest upon bonds to 
 but few. It has given idleness to four millions of 
 would-be toilers in shop and field. It has given pro- 
 ductive capital no scope for use and little or no return 
 for risks assumed. It has given the silver miners ruin. 
 It has given the farmer 40 cents for wheat and the cot- 
 ton planter but little over 4 cents for his cotton. It 
 has produced a Republican majority of about 150 in 
 congress. It has given nakedness, hunger and cold to 
 millions of men, women, and helpless children. It has 
 produced a sea of tears, an avalanche of groans and 
 prayers for succor. It has blighted hope and paralyzed 
 aspiration in a million homes. It has produced a crop 
 of defaulters and criminals until the jails and prisons 
 overflow. It has produced mobs and riots and the call- 
 ing for armed forces of the nation to check and control. 
 It has produced $100,000,000 more of government 
 bonds, which are so many financial fetters to shackle 
 the feet of industry. 
 
 The cause at trial is that of creditor versus debtor ; 
 humanity versus selfishness ; truth versus error a free 
 government such as our fathers designed to found 
 versus the rule of an organized plutocracy. Every 
 great statesman and political economist of the last 
 three hundred years has laid down as a political axiom 
 that the values of property are determined by the 
 volume of money proportionate to the volume of trade 
 transactions. I shall quote in an appendix the declara- 
 tions of many great thinkers upon this topic from the 
 days of John Locke and Adam Smith down to the 
 
 _ -****:- - .- . ""* -^ 
 
HON. JOSEPH C. &IBLEY. 5S3 
 
 present moment, which, briefly condensed, may be sum- 
 marized as follows : 
 
 Double the volume of money, you double the. value 
 of products. 
 
 Divide the volume of money, and you divide the 
 value of products. 
 
 Divide the volume of money, you double the debt. 
 
 Double the volume of money and you divide the 
 debt. 
 
 Nothing more clearly illustrates the increasing value 
 of money than an example the force of which must be 
 apparent to the dullest intellect. If a man had sold 
 his farm for $30,000 in 1873 and buried his money deep 
 into the earth, or, as men do, placed it at interest at 6 
 per cent., in addition to his interest, with one-third of 
 his $30,000 he can to-day repurchase the same farm. If 
 this man has gained $20,000 and the interest on $30,- 
 000 for twenty years, then certainly the man who pur- 
 chased the farm has lost $20,000 of his purchase money 
 and the interest on $30,000. If a farmer had sold 
 $10,000 worth of horses in 1874 he could purchase 
 others, their equal to-day, for $2,000. If he had sold 
 his beef cattle from off his farm for $6,000, he could 
 buy back to-day an equal or greater weight of beef cat- 
 tie for $2,000. Money has been magnified; sources 
 and profits of industry have been minimized. If the 
 man who sold the farm for $30,000 in 1873 had placed 
 it at interest at 6 per cent, it would amount to more 
 than $100,000 in 1894 with interest annually added to 
 principal If the one man has gained through appreci- 
 ation of money and interest more than $90,000 net, the 
 man who purchased has certainly lost an equal sum. 
 By vicious legislation money has been made a monarch, 
 
$64 SILVER AND GOLD. 
 
 while industry and production have become beggars on 
 the faoe of the earth. 
 
 Men who work upon the farm, in the shop or in the 
 mine are prone to think that the volume of money in a 
 nation and matters of finance are subjects in which 
 necessarily they can have but passing interest, and 
 relegate the entire subject to the " masters of finance," 
 to those who loan money, deal in stocks, manage banks, 
 and operate trust companies. This indifference to such 
 subjects has led mainly to the condition which confronts 
 the nations of the world to day. The most careful 
 compilations of the last census indicate that in 1890 
 three-tenths of 1 per cent of the population of the 
 United States received more than 70 per cent of the 
 total increase of wealth, or that of the increase of na- 
 tional wealth in the last ten years, of every one hun- 
 dred dollars of increase 1 man out of every 300 men 
 took seventy dollars and the other 299 men had thirty 
 dollars to be divided among them, or about ten cents 
 apiece. 
 
 Now let us state the problem fairly and honestly. If 
 in any given community of 300 citizens one man was 
 taking seventy dollars out of each one hundred dollars 
 that was earned by the united efforts of all that com- 
 munity, how long would it be until you could make the 
 299 men see that they were called upon to take more 
 than a passing interest in financial questions so far as 
 they concerned that community ? What is the plain 
 duty of the 299 citizens ? Clearly not to despoil or 
 rob the man of his possessions, but by united effort to 
 assist one another in the securing of such legislators as 
 will enact laws BO beneficent in their operations as will 
 make such absorption a future impossibility. Let me 
 
fiQH. JOSKPji C. SIBLBY. 656 
 
 show you now how partyism works : This man who 
 gets the seventy dollars springs a great issue through 
 the columns of his newspaper as to whether A man 
 should wear boo* heels 3 inches high or no heels on his 
 boots. The strife waxes hotter and hotter, the 800 men 
 divide their forces, 150 for boot heels three inches high, 
 and 149 against any heels, and while the votes are being 
 counted he is secretly laying his plans to steal every 
 pair of boots and shoes in the whole community. The 
 old Roman maxim, " Divide and rule," is employed to- 
 day as much as ever in the palmiest days of Roman 
 power. The 299 men strive with no concert of action, 
 but pull this way and that, and their efforts redound in 
 the end not to the well-being of all, but to the further 
 aggrandizement of the one who upon false issues has 
 divided them. 
 
 The body politic, financial, social, and industrial, is 
 to-day afflicted with a thousand ills, and each ill has 
 developed a horde of specialists who have some specific 
 remedy for each separate malady. Apply the remedy 
 for the one great evil, arrest the pyaemia which, un- 
 checked, must destroy the whole system, and the thou- 
 sand wrongs and ills, which are but symptoms of the 
 universal disease, need no remedy, for with the purify- 
 ing of the lifeblood these excrescences and tumors, by 
 the natural process of absorption, will disappear ; the 
 receiverships, the bankruptcies, the closed factories, or 
 those operated at a loss, the profitless investments, the 
 mortgaged homes, the paralyzed aspirations, the idle 
 men, the tramps, the strikes, the lockouts, socialism, and 
 anarchy disappear as the summer clouds before the 
 noonday sun. 
 
 Arrest the decline of values of all forms of property 
 
656 
 
 SILVER AND GOLD. 
 
 arising through appreciation of gold, and 
 takes on new hopes and girds herself for conflicts, not 
 among its fellows but for conquests over the material 
 universe. Fix at some point through bimetallism sta- 
 bility of values, where investment shall unerringly 
 know that through appreciation of gold and debase- 
 ment in value of all products there shall be no longer 
 from year to year a continuous decline of the latter, 
 and at once you inspire courage and faith in every 
 legitimate enterprise and activity in every field of use- 
 fulness. But continue the dwarfing process, the crush- 
 ing, grinding, resistless, and relentless system of gold 
 monometallism, and with it you discourage enterprise, 
 dampen ardor, dispel hope, and destroy faith ; and then 
 the teachings of the Master will be reversed, and the 
 provident and faithful steward will be he who alone has 
 buried his talent in the napkin, while the man who had 
 the five talents and used them in the fields of human 
 activity will be the one who will return to his lord 
 empty handed to merit rebuke for having attempted to 
 use .his money for his own and society's betterment. 
 
THE PARTIES AND THE CANDIDATES. 557 
 
 CHAPTER XXXII. 
 
 ATTITUDE OF THE PARTIES AND CANDIDATES ON 
 THE SILVER QUESTION. 
 
 FINANCIAL PLANK IN THE PLATFORM ADOPTED BY 
 
 THE REPUBLICAN CONVENTION AT ST. LOUIS, 
 
 JUNE 17TH, 1896. 
 
 The Republican party is unreservedly for sound 
 money. It caused the enactment of the law pro- 
 viding for the resumption of specie payments in 
 1879. Since then every dollar has been as good 
 as gold. 
 
 We are unalterably opposed to every measure 
 calculated to debase our currency or impair the 
 credit of our country. We are, therefore, opposed 
 to the free coinage of silver except by inter- 
 national agreement with the leading commercial 
 nations of the world, which we pledge ourselves 
 to promote, and until such agreement can be ob- 
 tained the existing gold standard must be pre- 
 served. All our silver and piper currency must 
 be maintained at parity with gold, and we favor 
 all measures designed to maintain inviolable the 
 obligations of all our money, whether coin or 
 paper, at the present standard the standard of 
 the most enlightened nations of the earth. 
 
558 SILVER AND GOLD. 
 
 WILLIAM McKINLBY, 
 
 REPUBLICAN CANDIDATE FOR PRESIDENT OF THE 
 UNITED STATES, ON THE SILVER QUESTION. 
 
 The national credit, which has thus far fortunately 
 resisted every assault upon it, must and will be up- 
 held and strengthened. If sufficient revenues are 
 provided for the support of the government there will 
 be no necessity for borrowing money and increasing 
 the public debt. The complaint of the people is not 
 against the Administration for borrowing money and 
 issuing bonds to preserve the credit of the country, 
 but against the ruinous policy which has made this 
 necessary. It is but an incident, and a necessary 
 one, to the policy which has been inaugurated. The 
 inevitable effect of such a policy is seen in the de- 
 ficiency of the United States Treasury, except as it 
 is replenished by loans and in the distress of the peo- 
 ple, who are suffering because of the scant demand 
 for either their labor or the products of their labor. 
 Here is the fundamental trouble, the remedy for 
 which is Republican opportunity and duty. 
 
 During all the years of Republican control follow- 
 ing resumption there was a steady reduction of the 
 public debt, while the gold reserve was sacredly 
 maintained, and our currency and credit preserved 
 without depreciation, taint or suspicion. If we would 
 restore this policy that brought us unexampled pros- 
 perity for more than thirty years under the most try- 
 ing conditions ever known in this country, the policy 
 by which we made and bought more goods at home 
 and sold more abroad, the trade balance would be 
 quickly turned in our f avor, and gold would come to 
 
THE PARTIES AND THE CANDIDATES. 559 
 
 us and not go from us in the settlement of all such 
 balances in the future. 
 
 The party that supplied by legislation the vast 
 revenues for the conduct of our greatest war, and 
 promptly restored the credit of the; country at its 
 close, and that from its abundant revenues paid off a 
 large share of the debt incurred in this war, and that 
 resumed specie payments and placed our paper cur- 
 rency upon a sound and enduring basis, can be safely 
 trusted to preserve both our credit and currency with 
 honor, stability and inviolability. 
 
 The American people hold the financial honor of 
 our government as sacred as our flag, and can be re- 
 lied upon to guard it with the same sleepless vigil- 
 ance. They hold its preservation above party fealty, 
 and have often demonstrated that party ties avail 
 nothing when the spotless credit of our country is 
 threatened. The money of the United States, and 
 every kind or form of it, whether of paper, silver or 
 gold, must be as good as the best in the world. It 
 must not only be current at its full face value at 
 home, but it must be counted at par in any and every 
 commercial centre of the globe. 
 
 The sagacious and far-seeing policy of the great 
 men who founded our government, the teachings and 
 acts of the wisest financier at every stage in our 
 history, the steadfast faith and splendid achievements 
 of the great party to which we belong, and the genius 
 and integrity of our people have always demanded 
 this, and will ever maintain it. The dollar paid to 
 the farmer, the wage-earner and the pensioner must 
 continue forever equal in purchasing the debt-paying 
 power to the dollar paid to any government creditor. 
 
560 SILVER AND GOLD. 
 
 Recent events have imposed upon the patriotic 
 people of this country a responsibility and a duty 
 greater than that of any since the civil war. Then it 
 was a struggle to preserve the government of the 
 United States. Now it is a struggle to preserve the 
 financial honor of the government of the United 
 States. 
 
 Then it was a contest to save the Union. Now it 
 is a contest to save spotless credit. Then section was 
 arrayed against section. Now men of all sections 
 can unite, and will unite to rebuke the repudiation of 
 our obligations and the debasement of our currency. 
 
 In this contest patriotism is above party, and 
 national honor is dearer than any party name. The 
 currency and credit of the government are good now, 
 and must be kept good forever. Our trouble is not 
 with the character of the money we have, but with 
 the threat to debase it. We have the same currency 
 that we had in 1892 good the world over, and un- 
 questioned by any people. Then, too, we had unex- 
 ampled credit and prosperity. Our difficulty now is 
 to get that money in circulation and invested in pro- 
 ductive enterprises which furnish employment to 
 American labor. 
 
 This is impossible with the distrust that hangs 
 over the country at the present time, and every effort 
 to make our dollar?, or any one of them, worth less 
 than one hundred cents each, only serve to increase 
 that distrust. 
 
 What we want is a sound policy, financial and in- 
 dustrial, which will give courage and confidence to 
 all, for when that is done, the money now unem- 
 ployed because of fear for the future and lack of con- 
 
THE PARTIES AND THE CANDIDATES. 561 
 
 fidence in investment, will quickly appear in the 
 channels of trade. 
 
 The employment of our idle money, the idle money 
 that we already have, in gainful pursuits will put 
 every idle man in the country at work, and when 
 there is work and wages there are consumers who 
 constitute the best market for the products of our 
 soil. 
 
 Having destroyed business and confidence by a free 
 trade policy, it is now proposed to make things still 
 worse by entering upon an era of depreciated cur- 
 rency. Not content with the inauguration of the 
 ruinous policy which has brought down the wages of 
 the laborer and the price of farm products, its advo- 
 cates now offer a new policy which will diminish the 
 value of the money in which wages and products are 
 paid. 
 
 Against both of these we stand opposed. Our creed 
 embraces an honest dollar, an untarnished national 
 credit, adequate revenues for the uses of the govern- 
 ment, protection to labor and industry, preservation 
 of the home market and reciprocity which will ex- 
 tend our foreign markets. 
 
 Upon this platform we stand, and submit its decla- 
 rations to the sober and considerate judgment of the 
 American people. 
 
 We must have a sound dollar, as sound as the 
 Government and as untarnishable as its flag ; a dollar 
 that is good not only at home, but good wherever 
 trade goes ; a dollar that is as good in the farmers' 
 and workingm en's hands as in the hands of the 
 manufacturer or capitalist. 
 
562 SILVER AND GOLD. 
 
 GARRET A. HOBART, 
 
 REPUBLICAN CANDIDATE FOR VICE-PRESIDENT OF 
 THE UNITED STATES, ON THE SILVER QUESTION. 
 
 Uncertainty or instability as to the money question 
 involves most serious consequences to every interest 
 and to every citizen of the country. 
 
 The gravity of the question cannot be over- 
 estimated. There can be no financial security, no 
 business stability, no real prosperity where the policy 
 of the government as to that question is at all a 
 matter of doubt. 
 
 Gold is the one standard of value among all en- 
 lightened commercial nations. All financial trans- 
 actions of whatever character, all business enter- 
 prises, all individual or corporate investments are 
 adjusted to it. An honest dollar, worth 100 cents 
 everywhere, cannot be coined out of fifty- three cents 
 worth of silver, plus a legislative fiat. 
 
 Such a debasement of our currency would inevit- 
 ably produce incalculable loss, appalling disaster, and 
 national dishonor. It is a fundamental principle in 
 coinage, recognized and followed by all the statesmen 
 of America in the past and never yet safely departed 
 from, that there can be only one basis upon which 
 gold and silver may be concurrently coined as money, 
 and that basis is equality, not in weight, but in the 
 commercial value of the metal contained in the re- 
 spective coins. This commercial value is fixed by 
 the markets of the world, with which the greatest 
 interests of our country are necessarily connected by 
 innumerable business ties, which cannot be severed 
 or ignored. Great and self-reliant as our country is, 
 
PARTIES AND THE CANDIDATES. 663 
 
 it is great not alone within its own borders and upon 
 its own resources, but because it also reaches out to 
 the ends of the earth in all the manifold depart- 
 ments of business, exchange and commerce, and must 
 maintain with honor the standing and credit among 
 the nations of the earth. 
 
 The question admits of no compromise. It is a 
 vital principle at stake, but it is in no sense partisan 
 or sectional. It concerns all the people. Ours, as 
 one of the foremost nations, must have a monetary 
 standard equal to the best. 
 
 It is of vital consequence that this question should 
 be settled now in such a way as to restore public con- 
 fidence, here and everywhere, in the integrity of our 
 purpose. A doubt of that integrity among the other 
 great commercial countries of the world will not only 
 cost us millions of money, but that which, as patriots, 
 we should treasure still more highly our industrial 
 and commercial supremacy. 
 
 FINANCIAL PLANK IN THE PLATFORM ADOPTED BY 
 THE DEMOCRATIC CONVENTION AT CHICAGO, 
 
 JULY 8TH, 1896. 
 
 Recognizing that the money system is paramount 
 to all others at this time, we invite attention to 
 the fact that the Federal Constitution names sil- 
 ver and gold together as the money metals of the 
 United States, and that the first coinage law 
 passed by Congress under the Constitution made 
 the silver dollar the monetary unit and admitted 
 gold to free coinage at a ratio based upon the 
 silver dollar unit. 
 
 We declare that the act of 1873 demonetizing 
 silver without the knowledge or approval of the 
 
664 SILVER AND GOLD, 
 
 American people has resulted in the appreciation 
 of gold and a corresponding fall in the prices of 
 commodities produced by the people; a heavy 
 increase in the burden of taxation and of all 
 debts public and private; the enrichment of the 
 money lending class at home and abroad ; pro- 
 tection of industry and impoverishment of the 
 people. 
 
 We are unalterably opposed to monometallism, 
 which has locked fast the prosperity of an indus- 
 trial people in the paralysis of hard times. Gold 
 monometallism is a British policy and its adop- 
 tion has brought other nations into financial ser- 
 vitude to London. It is not only un-American but 
 anti-American, and it can be fastened on the 
 United States only by the stifling of that spirit 
 and love of liberty which proclaimed our political 
 independence in 1776 and won it in the War of 
 the Revolution. 
 
 We demand the free and unlimited coinage of 
 both gold and silver at the present legal ratio of 16 
 to 1, without waiting for the aid or consent of any 
 other nation. We demand that the standard sil- 
 ver dollar shall be a full legal tender, equally with 
 gold, for all debts, public and private, and we 
 favor such legislation as will prevent for the 
 future the demonetization of any kind of legal 
 tender money by private contract. 
 
 We are opposed to the policy and practice of 
 surrendering to the holders of obligations of the 
 United States the option reserved by law to the 
 government of redeeming such obligations in 
 either silver coin or gold coin. 
 
 We are opposed to the issuing of interest-bear- 
 ing bonds of the United States in time of peace, 
 and condemn the trafficking with banking syndi- 
 cates, which in exchange for bonds, and at an 
 enormous profit to themselves, supply the Federal 
 Treasury with gold to maintain the policy of gold 
 monometallism. 
 
 Congress alone has power to coin and^ issue 
 
THE PAETIES AND THE CANDIDATES, 665 
 
 money, and President Jackson declared that this 
 power could not be delegated to corporations or 
 to individuals. We, therefore, denounce the 
 issuance of notes as money for national banks 
 as in derogation of the Constitution and we de- 
 mand that all paper which is made legal tender 
 for public or private debts or which is receivable 
 for dues to the United States shall be issued by 
 the government of the United States and shall 
 be redeemable in coin. 
 
 WIUJAM JENNINGS BRYAN, 
 
 DEMOCRATIC CANDIDATE FOR PRESIDENT OF THE 
 
 UNITED STATES, ON THE SILVER QUESTION. 
 
 The humblest citizen in all the land when called 
 to armor in a righteous cause is stronger than all the 
 whole hosts of error that they can bring. I speak in de- 
 fense of a cause as holy as the cause of liberty, 
 the cause of humanity. 
 
 The miners who go a thousand feet into the earth 
 or climb two thousand feet upon the cliffs and bring 
 forth from their hiding places the precious metals to 
 be poured into the channels of trade are as much 
 business men as the few financial magnates who, in 
 a back room, corner the money of the world. 
 
 You come to us and tell us that the great cities are 
 in favor of the gold standard. I tell you that the 
 great cities reft upon these broad and fertile prairies. 
 Burn down your cities and leave our farms, and 
 your cities will spring up as if by magic. But, 
 destroy our farms, and the grass will grow in the 
 streets of every city in this country; 
 
 We shall declare that this nation is able to legislate 
 
666 BILVEB AND GOLD. 
 
 for its own people on every question, without waiting 
 for the aid or consent of any other nation on earth, 
 and upon that issue we expect to carry every single 
 State. 
 
 We go forth confident that we shall win. Why ? 
 Because upon the paramount issue in this campaign 
 there is not a spot of ground upon which the enemy 
 will dare to challenge battle. Why, if they tell us 
 that the gold standard is a good thing, we point to 
 their platform and tell them that their platform 
 pledges their party to get rid of a gold standard and 
 substitute bimetallism. If the gold standard is a 
 good thing, why try to get rid of it ? 
 
 The very people who tell you that we ought to 
 declare in favor of international bimetallism and 
 thereby declare that the gold standard is wrong, and 
 that the principals of bimetallism is better these very 
 people four months ago were open and avowed 
 advocates of the gold standard and telling us that 
 we could not legislate two metals together even with 
 all the world. 
 
 I want to suggest this truth, that if the gold stand- 
 ard is a good thing we ought to declare in favor of 
 its retention and not in favor of abandoning it ; and 
 if the gold standard is a bad thing, why should we 
 wait until some other nations are willing to help us 
 to let go ? Here is the line of battle. We care not 
 upon which issue they force the fight. We are pre- 
 pared to meet them on either issue or on both. If 
 they tell us that the gold standard is the standard of 
 civilization, we reply to them that this, the most 
 enlightened of all the nations of the earth, has never 
 declared for a gold standard, and both the parties this 
 
THE PARTIES AND THE CANDIDATES. 667 
 
 year are declaring against it. If the gold standard 
 is the standard of civilization, why should we not 
 have it ? So, if they come to meet us on that we 
 can present the history of our nation. More than 
 that, we can tell them this, that they will search the 
 pages of history in vain to find a single instance in 
 which the common people of any land have ever 
 declared themselves in favor of a gold standard. 
 
 They can find where the holders of fixed invest- 
 ments have. Mr. Carlisle said in 1878 that this was 
 a struggling between the idle holders of idle capital 
 and the struggling masses who produce the wealth 
 and pay the taxes of the country, and, it is simply a 
 question that we shall decide, upon which side shall 
 the Democratic party fight ? Upon the side of the 
 idle holders of idle capital, or upon the side of the 
 struggling masses? That is the question that the 
 party must answer first, and then it must be answered 
 by each individual hereafter. The sympathies of the 
 Democratic party, as described by the platform, are 
 on the side of the struggling masses who have been 
 the foundation of the Democratic party. 
 
 There are two ideas of government. There are 
 those who believe that if you just legislate to make 
 the well-to-do prosperous persons, their prosperity 
 will leak through on those below. The Democratic 
 ideas have been that if you legislate to make the 
 masses prosperous their prosperity will find its way 
 up and through every class for taxation. Mr. Jeffer- 
 son, who was once regarded as a good Democratic 
 authority, seems to have a different opinion from some. 
 Those who are opposed to the proposition tell us 
 that the issuance of paper money is a function of the 
 
568 SILVEB AND GOLD. 
 
 bank, and that the government ought to go out of 
 the banking business. I stand with Jefferson rather 
 than with them, and tell them as he did, that the 
 issue of money is a function of the government and 
 that the banks ought to go out of the government 
 business. They complain about that plank which 
 declares against the life tenure in office. They have 
 tried to strain it to mean that which it does not mean. 
 What we oppose in that plank is the life tenure 
 that is being built up at Washington, which excludes 
 from party representation and its benefits the humbler 
 members of our society. 
 
 We have grown to 70,000,000, and declare that we 
 are less independent than our forefathers? No. It 
 will never be the judgment of the people. Therefore, 
 we care not upon what lines the battle is fought. If 
 they say bimetallism is good but we cannot have it 
 till some nation helps us, we reply that instead of 
 having a gold standard because England has, we 
 shall restore bimetallism and then let England have 
 bimetallism because the United States has. 
 
 If they dare to come out and in the open defend 
 the gold standard as a good thing, we shall fight them 
 to the uttermost, having behind us the producing 
 masses of this nation and the world. Having behind 
 us the commercial interests and the laboring interests 
 and all the toiling masses, we shall answer their de- 
 mands for a gold standard by saying to them you 
 shall not press down upon the brow of labor this 
 crown of thorns. You shall not crucify man on a 
 cross of gold. 
 
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