529 T71s ^HIBRARYp^ " "^ciAHvaani;^ ,^WE•UNIVR?S•//i ^lOSANCfl^f^ o ^ "^^^ONVSOl^ %aiAINfUWV ^ 4A ^ .^lOSANCElfJV. o , ^ V# f ^ > %iiVHaiH^ >>:lOSANCElfx>, "^/SilJAINn-JUV o ^lUBRARYQ^ ^lUBRARYQ^ A\^EUNIVERSyA. o ^OFCAUFOi?^ ^OF-CAUFOfti^ ^^WE UNIVERS/^ >- 5 T" c cr < -n <_ • SILVER Its True_ Place in the Circulation A LECTURK Delivered on 6tli May. 18Q2 AT I Jlli ACADEMY OF SCIENCES Market Street, San Francisco. y BEFORK THK TECHNICAL SOCIETY OF THE PACIFIC COAST BY J. W. TREADWELL Editor of the California Bankers' Magazine ■10 Mont^ntinry lUoik, Suit Ft uithisci', Cal. ILLUSTRATED BY GEOMETRICAL DIAGRAMS l\, ,.,, /'I' r. Btnch^ Bookseller, 107 Montgom-'v And all Booksellers (.'ofviiiiiiiT, 18'j2- .1. W. Tkkai>wki.i. TELEPHONE No. 858 Cunningham, Curtiss & Welch Wholesale and Importing STATIONERS PRINTERS AND Blank Book Manufacturers BLANK BOOKS FROM CRANE BROS.' GOLD MEDAL LINEN LEDGER PAPERS 327, 329 & 331 SANSOME ST. SAN FRANCISCO, CAL. le adjoiniug diagram shows the volume of silver produced from 1873 to 1890, inclusive. 51,500,OO0.OOU. beginuing with |C2.000,000 in 187tt, o J132,0(10,O0O ill 1800, and the whole large square shows the voIuiul' of silver to be produced e coiitiug twenty years— to lOHl A. D., tlie first I81II. bciug ♦Ul,W«,onO, and the total $3,000,000,000. The obliquely-crossed columns show creankcrs' Magazine C'O ^Ii^nlgomery J link, Siin J-'r,incisct>, Cul, ILLUSTRATED BY GEOMETRICAL DIAGRAMS HK 1 CI : , u n c 1^: x 'i^cs For ^ale by C. Utac/t, Vookselltr, 107 Montgoviery Street^ San J-'ranciseo Anii all booksellers CopvRiouT, 1892- J. W, Tbkaowkll SYNOPSIS LECTURE ON SILVER, The subject matter of this lecture may be considered under 7 headings : 1. Debased silver coins at 65 cents O'a the 100. 2. The proKpective yield of silver and free coinage. 3. The false foundation of the Bank of England, and its corrupt- ing effect upon the human race. i. The European and other foreign paper issues. 5. The enormous paper issues of the U. S. A., which are uncon- stitutional. 6. The driving out of silver by these credit papers, and th^t i3 the real reason of its fall. 7. A True Silver Bank note, like that of the Bank of France, which gains gold all the time, and keeps §700,000,000 silver in full circula- tion at par. With these demonstrations drawn from the premisses: A. All credit paper to be abolished in the U. S. A. B. Banks to be federated in Clearing Houses. C. The Clearing Houses to be federated into a Central Bank of Issue. D. A silver United States note, to be issued through the Central Bank. E. In Europe the same plans to follow. F. The European armies to be put to work upon canals, roads, irriga- tion and transport roads. And so the value to bo raised to redeem tho credit paper. G. Fund all tho floating credit paper. J. W. TEE AD WELL,. oc est C3 SILVER ITS TRIJR PI^ACE IX THE CIRCTJTLA.XION ^ Ltctu-f liili-'tieii on Oth Miiy, IS'J.3, nl the Academy of ScUnctm. San Francisco, before the Technical Society of the Pacific Coast BY J. W. TREADWELL CO Editor California Bankers^ Magazine ILLUSTRATED BY GEOMETRICAL DIAGRAMS (Jol'YRKiHT, 1892 .1. W. TkKAPWKI.L This is not a political lecture, because the (luestion is not an American question, but a question as wide as the world, embracing all people ; nor is it a debate for arguiiiL^ the question, but it is sim- ply a review of the production of silver in the past eighteen years, and of its probable production in the next twenty years, and of the present position of such nations as use credit paper. If a survey were to be taken of all the nations of the earth, then the subject would be too vast for one lecture. Such a view has been taken as to show you those nations who are guilty of using credit pa|x;r which is not properly backed by coin (as shown in the diagram). Many severe truths will have to be told, but simply in the best interest of the nations concerned. Any person wishing to dispute the statements made can write to the California Bankers' Magazine where the lectiu'c will be published. The diagram shows, on a geo- metrical scale, the relative bulk of the credit paper, and the sound bank paper. ■ The size of a twenty-dollar gold piece is given with the twenty pieces for which it exchanges, but the thirty pieces of silver which it can buy ( equal to $30 ) are also shown. The volume of silver produced by the world in 1873 is shown as 03,000,000 ounces, and the volume produced in 1890 as 132,000,000. The total bulk produced in those eighteen years being 1,500,000- 000 of silver, as shown ; while the bulk of the world's probable production from now to 1910 A. D. is shown as a volume of 3,000,000,000 at the same ratio. This is the bulk of silver for which the world has to provide a use, and if the nations have found it so hard to deal with 1,500,000,000 in the last eighteen years, how will they deal with 3,000,000,000 ounces of silver in the next twenty years ? During the month of April 1892 repeated finds of a very heavy value have been made, the largest and most valuable being at the Broken Hills, in Australia, where a deposit of unknown size has been found, running 6,000 ounces of silver to the ton, besides lumps of pure silver. These mines have already' given $22,000,000 silver in two years, and may be expected to give 20,000,000 a year to supply all India, China and Japan. The reasons why such a great, steadily-growing yield of silver has arisen are : (1) The silver is found in three wildernesses. The Rocky Mountain chain stretching from the north of British Columbia, down through Mexico, and in the Andes from Colombia to Tierra del Fuego. (2) In the interior wilderness of Australia. (3) In the newly-opened center of Africa. (4) The people of the United States did not find the silver at first, because they only looked for it in the shape of galena or lead ore, 70 per cent, lead, and about to of one ounce silver to the ton, and did not know that the richest silver ore is found in quite difierent shape, such as chloride of silver, light brown, ( Here are samples lent to this lecture by the Academy of Sciences ) sulphide of silver, black. It is a positive fact that during the overland imniigration to Cal- ifornia, in tlie forties and fifties, tlie wheels of the i^ioucer's wagons were passing along over the finest metal ores in Colorado. Had they stopped there, instead of going forward to die in the wilderness, they would have been rich. There are yet 1,000,000,000 acres of wilderness, to be searched in the districts alcove named, and the wealth of sih-er to be found is beyond count. (5) There are new processes, such as the cyanide process and others, by which gold is !iow taken out of various kinds of ores, this gold was lost before; and no doubt the scientific men will repeat that in the refining of silver ores, as they already have so improved their processes, that the yield of silver from ore is getting steadily larger. (G) The spread of population in the wildernesses of this world has increased the findings, and will still more do so. *For instance, the enormous colony of British Columbia ( stretching from 49 degrees latitude to GO degrees, and covering meridians from 115 degrees west to 140 degrees, larger than California, Washington, Oregon, Idaho and Nevada ) is destined to be a mighty empire, and its mountains ( when settled by people ) will be found full of money metals for them. (7) The last and greatest reason is the new means of cheap car- riage by electricity, the railways of the 19th century' are already obsolete, and the rivers of the Rockies turned into electricity will carry the ores to market in single carloads more cheaply than ever before, on light and cheap roads and bridges. In the face of this wonderful bringing forth of silver from the world.' s wastes, a proposal is brought before the nations that the United vStates shall coin silver freel}' for all the world at 50 per cent, more than its market value, that is, that a silver dollar co.sting G5 cents (see diagram) i»hall be stamped and passed at 100 cents ; also that the nations of the earth shall be invited at Chicago to do the same. Mr. S. Dana Horton has even gone farther and has proposed that all the banks in the world shall be forced to u.se silver at 50 per cent, more than its market value, that is, bankers are to be forced to give 129 cents for 8G cents' worth of silver, or an advance of 4.') cents per ounce upon its selling price today. This proposal was even submitted in the American Bankers As.so- ciation, and is strongly pleaded for by liini in a book of his called " Silver in Europe," under the chapter " Parity of moneys." When we reflect that this same Profe.-sor S. Dana Horton has been .selected by cur U. S. Government to travel through all the nations of 3 luiropc, for the past three years, in order to push into their notice the above piece of tyranny upon bankers, surely it is time that we began to ask : " What is the true place of sihxr in the circulation?" The free coinage of silver at 50 per cent, more than its market value may be shown to be folly on th.re^ grounds : (1) Free coinage without the lazv cf parity ( parity means redemp- tion of silver in gold) has been tried and is now in practice in India, and in Mexico, and China. It lowers the value of the coins to bul- lion p ice at once, and drives gold out of those countries. In Indii the silver rupee, formerly worth 24 pence, is now only worth 15 pence ; and because the debts of India are due to foreigners in gold the Hindoos are forced to pay 24 pence in gold for each rupee of debt, that is a premium of about GO per cent, on all the principal and interest of their debt. They are forced to take silver rupees for their crops, and so lose forty per cent, of the value of all their pro- duce, while that also lowers the price paid for our American wheat in the central market in England. The Hindoos have addressed a remonstrance, in April 1892, to the Imperial Government asking them to take up the silver question. In Mexico the silver dollar only buys its bullion value, and all prices and wages are lower than in the United States, see the excel- lent articles by the Mexican Minister in that admirable magazine the North American Review. In China the Government mints stamp bars of silver, from which the buyer of goods cuts off a piece by the Haikwan (customs) tael weight, which piece passes for goods at its daily bullion value. This is the same in effect as free coinage without the law of parity. As manj'- of the contracts in the United States of America are silver contracts, it follows that because the passing of an open free coinage law would drive down the value of silver to market price, therefore such a law would be declared void by the U. S. Supreme Court on the ground that it impaired the obligation of existing con- tracts, and so was unconstitutional. 2. Free coinage of silver with the law of parity has nowhere been tried, because if it were tried it stands to reason that everj' body who had silver would at once exchange it for gold, and that all the silver in the world would come to the United States of America, even the Hindoos would gladly sell their 15 pence rupees of silver for '24 penny gold rupees, and put an end to their troubles, but where could the gold be got to redeem all the silver in the world ? That is the problem. 4 In the states of the Latin Union, where silver is legal tender, the moment that silver fell below par, the free coinage of silver was forced to stop. The notes of the Bank of France are silver notes, payable in silver, and only paid in gold at the option of the bank, and then at a premium of 2]4 per thousand. It is that fact which forces the silver into circulation in France, because people must use silver, whether they like it or not ; at the same time the forcing out of the silver by that great bank causes the gold stock to be always increasing, because the use of silver gains the gold. The Bank of France is even able to take and hold 500,000,000 francs of other Latin L'f^nion silver, because the other members of the Latin Union use legal tender pnper, and so drive their own silver out of their own countries, having replaced it with fiat paper, or credit. 3. Free coinage of silver, if enforced by legal tender, would be declared unconstitutional also, becau.se it is against Article I, Clause 10, of the Constitution, which forbids the impairing of con- tracts. If free coinage with or without the law of parity be impossi- b.e, liow then can we use silver at all ? Before answering that question, we must first ask another ; Is there any cause for the fall of silver other than over production ? Yes ! There are four great causes, which are : (1) The use of false credit paper by many nations. (2) The paternal system of political baiiking. (3) The abandonment of silver by European politicians. (4) The utter absence of all control by the bankers. These statements of fact refer to all the nations of the world, not to the United States alone, and you will please to so read them. They will be proved by the diagram attached, which shows at a glance who are the nations guilty of using credit paper. The first statement proved b}' the diagram is : " The use of false paper by many nations," and in the consideration of the immense volume of about 3, GOO millions of credit paper, it is as well to begin with the smallest of the issues, and to rise steadily to the largest user of paper, that is, the United vStates of America. The leading example of credit paper, which has had such a power to make other nations follow in its track, is the Bank of I'jig- land. It may seem to some minds an invidious thing to attack the financial laws upon which llie Bank of l-'ngland is founded, but banking truth is the one thing that we are here to find, no matter what the cost may be. 5 'i'hc Bank of Ivngland is fouiided upon credit paper instead of upon tangible .securities, or upon convertible assets. A bargain was made between the Bank and the British Government, that in con- sideration of the Bank lending /:iG,450,000 ($83,000,000) to the British Government, at 3 per cent, interest, the bank should receive the privilege of issuing notes upon nothing but credit. There was no banking necessity for any such arrangement. It would have been better and safer if the Bank of lingland had taken the $83,000,000 in gold, and had lent it to bankers only on securities deposited, thus gaining a live two-fold security (viz., that of the borrowing bank, and that of the tangible securities deposited), instead of burying all that gold in a public debt, and taxing the people of Kngland 3 per cent, per annum, in order to pay interest on the gold spent by the government. There would also be this verj^ great difference, that the $83,000,000 of gold would be continually used b)^ all the bankers of London to promote trade and industrj', instead of being abso- lutely KO where; at all, having been spent by the government, which owes now $3,500,000,000, while the gross amoimt of the annual value of property and profits assessed for income tax is only $3,100,000,000, or $400,000,000 less than its debt. The practical value of this great national credit was tested the other daj^, when in the Baring failure it became necessarj^ to get at once $25,000,000 in gold in order to keep the Bank's gold reser\'e to its legal height. The whole power and wealth of the British Empire of 360,000,000 souls were not able to furnish that gold when it was wanted ; but England was forced to go to France and to Russia for the mone}'. What was the worth to the Bank of England of that great debt of $83,000,000 due by the British Government? In gold, absohitely nothing at all! Whereas, if that gold were loaned on tangible securities, as explained, there would be a visible and realizable value in hand. The Bank of England then is founded on false financial laws, and should be chartered upon a wiser and safer basis. But observe the world wide effect of the bad example of founding notes upon a debt, and issuing credit paper. The nations one after another were led bj^ the politicians to believe that there was nothing equal to the s5-stem of the Bank oi England, and they set to work to see how they could cop}^ it and improve upon it. Sturdy Holland, generally called Netherlands, G issued $7,500,000 credit paper straight, and following the diagram, we make this list. Credit Paper. I'opulation. India fS,000,000 1'1'(),000,000 Netherlands 7,o(t(),000 4.500,000 Canada 10,000,000 5,000,000 Greece 2-5,000,000 2,200,000 Japan SO,C30,000 39,0(X),000 Turkey 30,000,000 22,000,000 South Am., Chili, (27); Col. (4); Bol. (12) 40,000,000 8,000,00(J Belgium 80,000,000 t),000,000 German ICmpire, R. K. vS oO,000,000 40,000,000 Brazil 100,000,000 14,000,000 Italy, (70-125) 105,000,0110 40,500,000 Austria-Hungary o.S5,000,000 40,000,000 Argentine 800,000,000 4,000,000 Russia 040,000,000 ll;'.,000,000 $2,758,O0O,(J00 United States 1,000,000,0;)0 04,000,000 f3, 758, 000,000 Time will not allow a history and analysis of each of these items, but a few instances will suffice to show the folly, from a banking point of view, of these credit papers. In the earlier part of this lecture India was seen as very sorely troubled with $900,000,000 bad silver, by the fall in the value of silver, making a loss of 60 per cent, in the payment of yearly tribute and interest to ICurope. Vet by the issuing of credit paper, $8,000,000, (for which there is no necessity whatever), the Indian Government displaces that amount of silver with paper, and so helps to create the verj- financial disease under which she suffers. The proposition which is to be proved is: "That the use of credit paper by the nations drives silver out and destroys its value." Then take the little countr>' of Greece, just struggling into exist- ence with a population of 2,200,000 onlj^, the public debt is $125,000,000, and is due in gold, so that in order to remit the in.erest, it becomes necessary to buy gold at a very heav>- discount, giving D 200 for D 100. Thus, by discrediting silver, Greece has to pay a hcav}- tax yearly, but if she taxed herself, once for all, to redeem the credit paper, the Greeks could have a bank on the principle of the Bank of France, and by using silver would at once raise paper to par. Take Turkey, where $.".0,000,000 of credit paper was issued, and in the impccimious state of the Turkish Treasury liic paper was simply abniuloned to the holders ; that is, those who were foolish enough to take it, were robbed to tliat anount, just as has already hap- pened in the United Stated in early days with the Continental notes, when 5is20O,O0O,O0O were stolen from the people by the politicians. In the case of Belgium, which has a population of G, 000, 000, they hold only $21,000,000 against an issue of $107,000,000, and by such an over issue have driven 320,000,000 francs of their own silver out of circulation, and 200 millions of this silver is now in the Bank of France waiting to find a purchaser, and causing a depreciation of the whole volume of silver in both Belgium and in France and in the world, while if a war arose between Germany and France, and the theatre of war should shift to Belgium, then her $86,000,000 of credit paper, would show their worthlessness, and to the ruin of wai would be added commercial and industrial destruction. Brazil is another instance of a country, which produces a large amount of gold 3'early, yet all that gold is driven out of the country by a false paper issue of $100,000,000, which is the cause of endless poverty and distress to the people of the country, while if they used their own gold as a currenc}', or to buy silver in order to back their paper through a properly founded bank, the profit would arise not only in the use of the silver, but in the raising of all the money to par, and so making great savings at the exchanges. The other South American countries w^hich discredit silver are all silver-producing countries, and they do their utmost to debase the value of their own produce by using credit paper. Thus Bolivia has produced 30 millions of silver in three years, and complains that all that silver leaves the country, though the cause is plain enough in the $5,000,000 of false credit paper which is thrust upon the peo- ple as legal tender. Colombia, which is a heav}- producer of gold and of silver, has forced legal paper of $12,000,000 circulating at a discount of 50 per cent., which really causes them to paj' double interest and double the amount of the debt, while the driving out of the silver produced in the country causes a dead loss to the miners of half the value of their labor. Chili, a silver-producing countrj- to a very large amount, has also issued $23,000,000 of credit paper, which displaces silver from the circulation, is an element of weakness, and kills the product of the silver mines. "\'enezuela follou's the same plan, with the same results in a small way. These countries are only the little .^^inuers, we must now tuni to the S greater countries. Italy, troubled with repeated deficits, (through the ambition of her politicians) helps to increase her own deficits, and to further impoverish her people by an issue of $70,000,000 credit paper, and $125,000,000 of surplus bad issue through the banks. The effect has been to drive her silver five franc pieces out of Italy into France. Although bound to redeem that silver in gold by the Latin Union, yet Itah' is unable to fulfill her contract. Austria- Hungar}' has issued $385,000,000 of forced paper, and instead of copying France bj^ founding a silver note, is discrediting silver by proposing to sell it and to go upon a gold basis, the prod- uce of her own mines being about $7,000,000 in three years, and the loss thus falling upon the unfortunate people in three waj'S : (1) The depreciated paper florins. (2) The cost of the new loan in order to buy the gold needed. (3) The permanent loss of revenue to the silver miners, and to all commerce. Argentine is the greatest of all the enemies of silver, although also a producer of the metal. Paper debt has been issued on the land to the value of $534,000,000, and a large issue of credit paper, based upon paper bonds and not redeemable in gold, has been issued to the unfortunate people to the amount of $380,000,000. The whole population only number 4,000,000, and it is quite hope- less to think that they can ever redeem about $1,000,000,000 of debt. The purchase of a large piece of territory by the Jews, and its colonization under Baron Hirsch, will probably lead to a new monetary system being adopted eventually. The house of Barings were criminally responsible for assisting to create such a load of debt to foreigners upon the shoulders of a poor people robbed by politicians. The effect of raising silver to par would be to help their mines, and if (as was reported) they have bought silver to liack their notes, that would be the road toward redemption. It would need very heavy taxation to supply enough silver to pay their liabilities, but a great increase of population would lighten that taxation, and sales of the lands to the new .settlers would also form a redemption fund. Russia is the next upon the list with $940,000,000 of legal tender paper, which, like the U. S. greenbacks, is forbidden to be redeemed by law, and which could not be redeemed if desired, and the Czar has just ordered 100 millions more to be i.ssued. The notes, of course, are utterly useless outside of Russia except at a very heavy discount, and in Russia itself they only pa.ss at 60 per cent, of their 9 face value, .so that a roulile's \v(jrUi (-f work (july Ijuys al)out Iialf its value of bread. These paper roubles are the counterpart of our American Continental currency, and will most probabl}'- share the same fate: viz., repudiation and robbery. How do the Russians keep their loans afloat in foreign countries? Just as our U. S. Treasury does, that is '^'' by manipidating a central gold balance.'''' Thus the wretched people are forbidden to bring silver or paper roubles to the Treasury, and they have to buy gold at a heavy pre- mium to pay taxes. The gold mines belong to the Czar, and their pro- duce is hidden from public knowledge. The Czar raises gold loans in Europe and converts them when they become due, leaving large gold balances in the banks of the capitals of Europe to liquidate the interest. It was in that way that the Bank of England was enabled to borrow gold from Russia by being allowed the use of some of Russia's borrowed gold for a few months. It was reported in the papers that Alphonse de Rothschild, in Paris, had his vaults full of millions of Russian bonds. If so, he is very unwise, for let us imagine that the misery and nihilism, which are the result of legal tender, debased paper, should so far succeed in revolt as to kill the imperial family in a day and deliver the Imperial Bank of Russia (which is only a name for the Imperial Treasury) to the people; then, when the $209,000,000 of the central gold balance are gone, and the coun- try has nothing but 1,000 millions of legal tender paper, what sort of a revolution would arise ? Bonds, loans, paper, people involved in one common anarchy would sweep all civilization to destruction. Russia has absolutely no money at all, and Alphonse de Rothschild w^ould soon find it out to his lasting sorrow\ Argentine was bad enough. Russia will be worse. The German Empire is not without fault. The Reich has been guilty of issuing $30,000,000 of faith and credit paper, legal tender, called Reichs Kassen Scheine. There is no necessity for it, it dis- places just that volume of silver, and so helps to drive down the price of the thaler and the mark, and to punish the Germans. The sooner they repent of their folly, tax themselves, and pay it in silver, the better. So we have pas.sed through $2,4:58,000,000 of false paper, and before entering ovir own country-, the United States of America, it will be well to ask a few plain questions. First. Of what use would it be for all these wretched nations to try to back that paper with gold ? The problem is : "Wanted, $2,000,000,000 gold at once," where 10 is it ? How long will it take to mine it ? Yet the politicians in all these European lands, forgetting all the results of their past stupid- ity, utterly ignorant of all the laws of finance or banking, propose to enter upon a fight for the world's gold. I^ed into the snare by Eng- land, the voices echo across the world from Eondon, as from Rome, from Amsterdam or Brussels, from Wieu or Buda Pesth, as from Ber- lin or Athens, " Eet us buy gold ? " Suppose they bought the gold, where would they get the cash to pa)' for that 2,000 millions ? It must be bought with taxes. It is not so much the lack of gold as the superabundance of debased paper that is the disease, and in any case much of that must be extinguished forever. Paper that has not got behind it coin or visible assets, realizable in coin, is only a printed lie. That is why the $83,000,000 of Bank of England notes is really a false legal ten- der currency, and the first cause of all this trouble in the world. The second question is " Of what use would it be to give to each of these nations the privilege of free coinage at a false value of all the silver, which private individuals might offer to the mint?" Foreigners could then bring, to the mints, silver bought at 65 cents on the dollar, and receive it again from the mint stamped as worth 100 cents, and so plunder the unfortunate people of 50 per cent, profit upon all the silver so treated. \Vhat would happen to the silver? It also, as it has already been in Italy, Belgium, Greece, etc., would be driven out of each country by the legal tender paper under the Gresham Law. So the evil would be worse than before, because the people, after being robbed by foreigners of 50 per cent, value in the silver, would be left with the legal tender paper on hand, poorer still than before. The whole of the robber>', which goes on ever}- day through this debased paper, is chargeable to the fact that the politicians have appropriated the business of the bankers. What do the people know of the mysteries of finance ? Are our representatives in Congress better informed ? If so, why have the above facts not been shown forth ? I am the first man to do it. Turn to a banking countr>- now, where these great truths are put into practice. France, the silver country of the world, although .she produces no .silver to .speak of (?'. e. onlj- about $.3,000,000 jx^r year) )'et by good banking, she is able to ukc a bank note, which is nothing but a silver note, payable onh' in silver, ani by using that silver note she .steadil)- gains gold all the time. 11 Cast your eye l);ick\varugh all, and through the Orleani.st regime too; she goes through the change into a republic, and survives the Coup d'Etat, and even the lyittle Napoleon. Sedan, and the German indenniity of $1,000,000,000 roll over her head, as also docs the Conunune, and still the liank of France keeps on, while at the close of this passing Age see how her position contrasts with that of the British Fmpire. In the Indian empire they have free coinage there of $900,000,000 of silver rupees, which circulate at a discount of $400,000,000, repre- senting therefore only a value of $500,000,000 in actual purchasing power, because there is no central bank to make the circulation fit into gold values. In France, without free coinage of silver, there are $700,000,000 of silver in circulation, which circulates at its full value, because b}' the banking power of the Bank of France, with its 258 banking places, this silver is always convertible into gold at 2^2 per thousand (Moxon p. 50), although its face value shows a discount at market price of one third, or $235,000,000. Such is the immense power of .sound banking, and of a sound note issue, based on silver, paj^ablc in silver, and so forcing the silver into circulation. While in India, W'ith free coinage of silver, enormous losses have to be made in order to purchase gold with debased silver for remit- tance abroad, because there is no central bank, embracing the whole land in its arms, and keeping silver up to par ; in France no losses arise, and she, who has no free coinage of silver, and no silver cor- ner like the United States of America, is the only friend of silver in the world, and the onl}- countrj^ which keeps silver at par and in circulation. What is the only lawful judgment to be drawn from these two cases, where such utterly opposite law^s and such utterly opposite results prevail ? Is it not that free coinage is follj- ; that all man- kind should abolish the system of political banking, and should establish in each land a system of banking which will surely bring forth such work as that bf the Bank of France, and so will bring silver back to its old place, and to the value that it had in olden times ? 12 That free coinage of silver is an utter failure and brings ruin in its train is seen in India. That true banking, without free coinage of silver, can make and keep a nation prosperous, hold silver at par, and even pay a Genuan war indemnity without trouble is seen in France. That is the lesson of this Nineteenth Centur}'. Now let us turn to the worst enemy of silver in the world, that is, the United States of America ; the greatest example of the ''paternal system of political banking.''' First. I stand right here upon the constitution ot the United States ; and I declare, with Justice Field of the Supreme Court, that the issue of $346,000,000 of legal tender paper is a breach of all our liberties ; because under the Constitution the United States has no power to emit bills of credit, but only ' ' to coin money and to regulate the value thereof," (that is value of coin). Congress has no power to regulate the value of paper so as to make it legal tender, but only to regulate all the value of the money coined. It is true that in the comment (p. G) upon the Constitution, the following words are added, as from the case of Lick 7'^. Faulkner, 25 Cal., 40-4 : " The United States Constitution confers upon Congress the power " to issue Treasury' notes, or bills of credit, not in express terms, but " as a power necessarily implied, and also to make such notes or bills " a legal tender in payment of debts." The word imply, a Latin word, means to fill in or to tzcist in, and if lawj'ers are going to exercise their infenial arts to twist powers into Congress, that are not conferred in express ter?ns by the Constitu- tion ; then F'arewell Libert}' ! Welcome tyranny and destruction ! Hon. Jno. Jay Knox says, {V . S. Notes, p. 10): "At theclo.se " of the war with Great Britain the minds of all classes were imbued "with a wholesome antipathy to paper money, and as a consequence, "when the Federal Constitution was under consideration^ the jwwer "to emit bills, (which, in the original draft was given to the I'niled "vStates), was stricken out." Clause 10, Art. 1, forbids the individual states to emit " bills of " credit, or to make an^-thing Init gold and silver coin legal tender " in payment of debts, or to inij^air the obligation of contracts." If this clause had been strictly followed, then the States would have been forbidden to do by their deputies, the .state banks, tho.se things (viz : tlic issue of wild cat state notes) which they are not allowed h\ the Constitution to do tliemselves. Then all these rob- beries of hundreds of millions, taken by the wild cat and red dog note issues of the .state banks from the people of the United States, would have been prc\-cnted 13 The liistory of paper money in the Ilnitetl vStates is too long a snbject for this lecture ; but before the present Constitution was adopted in 17.S7, the Continental Congress in 1775 had already forced the issue of $242,000,000 bills of credit, called Continental notes, which ended in a robbery of the people of ,$190,000,000 (see J. J. Knox, p. 10), and the terrible ruin and loss brought upon the people by these notes, caused the founders of the Constitution in the twelfth year of the independence of America to forbid credit paper. That sin has been stereotyped into our life. If a man despises any- thing, he says " it is not worth a continental." Second. — The rule of construction for the United States Constitu- tion is found in Amendment X, thus : "The powers -not delegated to the United States by the Consti- *' tution, nor prohibited by the Constitution to the States are reserved " to the States, or to the people." Now as the power to emit bills of credit was not delegated to the Congress by the Constitution, but only the power to coin metal and to regulate metal values, it follows that all legal tender paper is illegal, unless the people amend to allow it. Leaving the law and turning to history, what do we find ? That the issue of the greenbacks robbed the soldiers in the field of two thirds of their pay. Yes, indeed, those verj- greenbacks that we ar& passing from hand to hand today have done this dirty work ; more still, they have ruined hundreds by their fluctuations, and hundreds have made fortunes by gambling in the paper bills, and in the gold premium which they caused. All these crimes and robberies are laid at the doors of the bankers b}' ignorant persons, who do not understand that it was the poli^ ticians, who by stealing the duties and privileges of bankers, under- took to issue sham bank notes without coin backing. Ever}' bank note has its whole value at its back, one part in coin, and the rest in visible and realizable securities. If it be not so provided, it is a .sham bank note. Most of these issues of the United States are sham bank notes, which no bank would dare to issue, because the}- have not their whole value behind them in coio and in assets. There are eight kinds of paper now floating in the United States, as shown in the diagram, and it is easy to prove that this credit paper is the real cause for the depreciation of silver. (1) Gold certificates, $178,000,000. These are Treasury- receipts for gold, exempt from taxation, and consist of the last gold reserves 14 of the bankers, they are legal tender to the customs, but they are not legal tcfidcr bet\veen citizens, they are used illegally, that is without an}' lawful authority, hy the national banks as lawful reser\'es (see Treasurer Upton, p. 264). Bankers are partly driven to use these by the monstrous system of taxing the cash in the banks for State purposes, instead of taxing the income of the banks only ; in a right system of taxation and of banking the}- would not need them at all, but would use the gold reserve system of the Bank of England which is better. (2) Currency certificates, $31,000,000. These are created tinder the Act, 8 June 1873, and are Treasury receipts .for deposited greenbacks of small denominations (Upton 262), they are used r.t the clearing house in payment of balances. They are full legal tender. (3) Silver certificates. These are Treasury deposit receipts for silver dollars, $330,000,000, they are legal tender to the United States of America, but are not legal tender between citizens. The dollars have fallen to $220,000,000 in value. (4) Treasury notes of July 14, 1800, $95,000,000. These aie warehouse receipts for the bullion in the silver corner at Washington, and are an original invention of John Sherman, differing from all paper in the world, because, though based upon silver, they are paya- ble in gold, and they are gaining at the rate of $4,500,000 paper per month. TliC}' will soon be the overmastering element in the Treas- ury, because they are legal tender for all public and private dues. (5) Greenbacks, or United States notes, $346,000,000. These are the legal tender paper notes iipon which the great decision of the Supreme Court, referred to above, was given, and from which, with Justice Stephen J. Field, I take the freedom to dissent on the grounds already given. They were issued in the war, and are said to be a full legal tender for all debts, public and private. The Treasurer is forbidden by law to redeem any of tlie.se notes, and is ordered to pay them out as fast as he receives them, and to replace all woni notes with new notes of the same denominations. (6) National banknotes, $173,000,000. These are notes based upon paper bonds, deposited with the Comptroller of Currency, and are legal tender between citize::s but are vol legal tender to tlic customs. (7) Old .state bank notes, $100,000. Out of the wreck of the state wildcat banks and red dog banks there still remain sor.ie notes outstanding unpaid, but these it is needless to say are iiot legal in Icii'ler to anybody. The i^amblers in banking (after wrecking their banks) conkl buy up their own notes by the sackful and escape punishment for their crimes, such is the history of our credit paper iu the United States of America. (8) Fractional currency, $7,000,000. That is all that is out- standing of the paper issued to replace subsidiary silver, another of those insane experiments in banking with credit paper which brought loss to the United States of America. (9) The specific contract law, $1,840,000,000. No statistics can be compiled of this private currency which overrides and expels all the currencies of the United States of America, and demands that, whatever the money used by law may be, these papers shall only be redeemed in gold. It may be best to begin the description of the banking effect of these nine kinds of credit paper from the last to the first. Senator Stewart, being the greatest enemy of silver in the world, (that is the person who has done the most to depreciate its value) gives us a good example of the gold contract currency, by his hav- ing registered about twenty-six of these gold contracts in Alameda, Cal. On the diagram these credit papers are indicated. They are vicious credit paper, the reason for that may be shown thus : Suppose that the efforts to lower the standard silver dollar to bullion value by free coinage, as in India, be successful, then the debtors who signed this gold bug currency (as it is called) would have to get $200 worth of silver in order to pay their creditors $100 worth of gold under their contracts. The creditors would thus double the value of all their wealth. So the gold contract is really a very bad paper currency for the United States of America. There is no other part of the world where such a ctu-rency pre- vails, and it will be clear that its raison d' etre in the United States is because the whole body of legislation in this country^ is against silver through the crowding out of that metal by credit paper, as will now be proved. Sweep away the credit paper, the gold con- tract will die. The next item in credit paper is No. 8, $7,000,000 fractional cur- renc3\ This was issued during the war to raise mone}', and its effect was to drive out the subsidiary silver, mostly into Mexico and Canada, where our half dollars, quarters and dimes passed at their bullion vulue, being driven out by Gresham's Law, that the bad (paper) replaces the good (silver). Notice now, when redemp- tion came, the Canadians and Mexicans sent in these millions of sil- 16 ver and received their face value from the Treasur>-, making an enormous profit out of Americans by collecting the diiTerence between the bullion value at which they bought them and the face value at which they sold them. So again the politicians plundered the people of the United States of America of millions of dollars, because thej' had undertaken the banking business of which they were totallj- ignorant. The old state bank notes, Xo. 7, total $100,000. These have been already dealt with, all that is needed to say is : " Let the people of the United States of America be warned against the proposal of Con- gressman Harter, of Ohio, to repeal the ten per cent. Federal tax by which this vile credit paper was finally extinguished. If the ques- tion of the power of the states to charter institutions to emit bills of credit (which the states themselves are forbidden to do by the Con- stitution) should ever come before the judges then, most probably, some tricky lawj'er would gain a judgment against the Constitution of the United vStates of America upon the ground of powers viassa- tily implied, and so once more the lawyers \\o\\\i\. justify the xcicked/or a bribe, as the good book says. Let us put our foot down for nothing but a United States note backed by coin, redeemable ever\'where, and with three-fold security. Next in order comes No. (>. National bank notes, *^173,OO0,000. This is another fonn of bad credit paper, because they are based upon United vStates paper bonds, and although used as a war measure, thej'^ have no place in times of peace, for they should and could be based iipon silver and gold only. To show the weakness, let us suppose that a labor war should arise in the United States, and what would be the price of those $175,000,000 of bonds ? Probably as in the former Civil War, 35 per cent., or only $."}S,000,00(). Now according to the national bank law, our Comptroller of the Currency could call upon the national banks to deposit further security — $110,000,000. That would mean one of two things, either the national banks must at once surrender all their notes and all their bonds or go bankrupt, one and all. This .shows the folly of credit paper not based upon silver or gold ; and rememlx.'r that this $173,000,000 paper just drives out that volume of silver, or ])artly so, and really is one of the greatest causes of the present low i>rice of silver. If you use sih'cr it will rise ; throw it out of demand and silver falls. Obser\'e that is the law all the way through. 17 Our national bunk system is an admirable system. It should embrace all the banks for commercial purposes in the United States of America ; and it can be made to do so if the principles of the Bank of France be followed, and a true silver note be issued, pay- able only in silver, which would cause the circulation of the great hoard of white metal now imprisoned by the political bankers in Washington. The next item is the United States note. No. 5, of $346,000,000. The nature of these notes has been explained, and by the laws of plain connnon sense, they have no right to exist, because they are a credit paper, expressly made forced legal tender by law, and expressly forbidden by law to be redeemed. The ruin and misery that these same notes ha\^e caused to the people of the United States of America, are well known to 3'ou, but as this lecture is to go to the nations of the world, it will be as well to sum the disasters brought o:i by these notes. (1.) They were issued to avoid raising gold loans, and it must be clear that if gold loans had been raised in their place, the cash would have been brought into the United States of America, and the people would have drawn upon foreigners for wealth, to be repaid bj' the prosperity of future years. Instead of gold, these credit papers were paid away to the poor soldiers, bleeding and wounded upon the field of battle, and the heroes were swindled by paper out of two thirds of their wages. Then the government in buying from traders the supplies needed for war, could only buj^ $100 of value b)- pay- ing $300 of paper for the goods, so that the permanent debt was made larger every time this acciuscd credit paper worked its mis- chief at the exchanges. The war thus was made to cost hundreds of millions more than it otherAvise would have done, and we sufier now the penalty- of issuing credit paper and of not raising gold by bonds. It also led to furious gambling. Gold boards were founded. There large sections of the nionej- gamblers spent their days specu- lating in greenbacks and in gold. At this present day there are to be found ignorant people who blame all this on the bankers. It is Congress that should bear the scanilal. The politicians who made these infamous greenbacks. The}' float around silently, breathing out their dreadful story of veterans robbed of their pa}^ citizens ruined in the gambling hells and plun- dered by speculators. If these greenbacks could but talk, what a tale of ruin, miser)-, horror, despair, suicide, and broken hearts they would tell. Such in all ages is the stor}', when politicians set them- 18 selves up as bankers, and issue credit paper unbacked b}- coin, instead of a true bank note. France, with her silver bank note, passed through worse stress than the United States of America, paid a worse indemnity, because she rvould not lei Ihe politicians do the bankiu}^. Are these bitter les- sons to be wasted ? lyook ahead ! If a civil war or any war should come, what will be the value of these greenbacks, these bills of credit emitted against our Constitution ? They would fall, and in fall- ing would carry down the millions of people, who hold them, into ruin and disgrace, into despair and death, as they did before. These notes drive out a volume of $350,000,000 of silver, which should and could take their place, for by the Gresham Law it nuist hz so. Everybody will pay away greenbacks (if he has a suspicion that they are going to be bad), and keep silver, but whether or no, the business, which these paper notes do, would be done by silver, or by silver notes, if a central bank issued them, through a federation of all the bankers, and the increased demand for silver again would raise its value, while the dollars would be forced out of the Treasury into the circulation, if the politicians were turned out of the banking busniess. The Treasury note comes next. No. 4, $95,000,000. This is a financial curiosity, a banking lusiis naturcr, the child of John vSher- man's brain, and Hon. R. P. Bland's pet, till silver fell. The Treasury does not buy silver at all, it issues warehouse receipts for six wagon loads of bar silver everj^ working day of the year, but the.se warehouse receipts are legal tender for all dues, public and private, and are redeemable in gold. If they were not redeemable in gold, they would only be worth bullion value, an 1 already the.se warehou.se receipts represent a larger value than the silver bought with them. The}' are a more dangerous currency than the greenbacks, and if allowed to grow to $000,000,000 in ten jears, with the immen.sel}' increasing yield of silver, they will throw the whole countr>' off the present standard, because the Treasury follows the Russian finance in keeping a .small gold balance, by which out- side exchanges can be made in gold, while all internal exchanges are mostly in credit paper. The very same silver, u.sed on banking principles by lianker.s, could float a much larger note issue .safely, because tlie paper would be backed by 100 per cent., one portion of which only would be coin, and the rest visible and convertible .securities, bearing interest. 10 This sliovvs liiat, wlicii politicians pla • at ]jank\n-/^ they cannot make the money go so far as a banker can, because he lifts profit and makes exchanges, promotes industry, and makes a larger use of the same volume of cash, wliile forcing silver into circulation. Silver certificates, No. 3, come next.— $330,000,000. This is really a savings bank, in which the depositors get no interest for their money. What a loss to the United vStates that such an immense quantity of standard silver dollars .should be oxidizing in the vaults of our Treasury and making no interest either for the depositors or for the holders, but costing the country a large sum for 3'early care, and for the cost of certificates and book keeping. What -will be said in London, Paris, Berlin, Rome, and all the capitals of Kurope, when they read in this lecture that the United States is so rich that it can afford to throw aside such an enormous amount of wealth for absolutely no purpose at all ? When they learn further, that the deposit receipts are voi /n^al tender between citizens at all, but are only legal tender to the Treasury for public dues ? This is the most complete destruction of all the rules of banking, that ever was seen in the world, and will be a lasting wonder to future generations. The law of banking has never been better stated than in the well known words : " Why did you not pay my silver into the bankers, that when I came home I might collect the deposit receipt with the interest ? " These dollars might as well be wrapt up in a napkin, as the fool did with his, and buried in a hole in the ground for all the good they do. If I had the power in this matter I would make a proposal, which, though it may .startle you, will not, I trust, be found fault with. It is a simple business proposition. I would tajce 100,000,000 of the.se idle silver dollars and build the Nicaragua Canal with them, charging 5 per cent, interest on the loan, and 5 per cent, com- mission for discounting the bonds. I would place the whole |;100,000,000 of Nicaragua Canal bonds in the Treasury-, and also the $70,000,000 of Canal stock offered b}- the companj^ as collateral. and thus having the canal built under the superv'ision of our engi- neers, and the stock, as fast as it was subscribed being paid off the bonds, I would make the loan secure and build the canal. Thus the idle dollars, which have fallen in value $110,000,000 since they were paid in, would be turned to safe and profitable use, and the United States would have the honor of building the canal, without breaking the Clayton-Bulwer Treaty in any shape or form. All that would be necessar\- would be a .->;:' >il j.nipoweriiig Bill and amendmeut to the Act of the Silver Certificates, in o:.lcr to enable the work to go through at once. vSo California would have the honor of having found the money to build the canal by simply using the hundreds of millions of idle dollars lying in the Treasury. That is the method by which bankers make money. They take deposits like these $330,000,000 and keep the reserve to pay the moving demands, they then put out the balance in loans on stocks, bonds, etc., and thus they earn the interest of which the Master spoke. It is the greatest of all follies for a state to undertake paternalism, and this leads to the second cause for the fall of silver, that is, "The paternal system of political banking." All these great bank- ing crimes arise just there, unscrupulous politicians in all the nations of Europe and in the United States of America want to finger the cash, to make places for their relatives and friends ; they then undertake to issue credit paper based upon nothing, persuading the unfortunate people that it will be for their good. When this credit paper is first issued it causes an enonnous pros- perity, then the politicians pick up the plunder. liye and bj-e tlie day of reckoning comes, it has to be paid and there is no cash, or only a small portion, to pay it, the paper falls, everybody is ruined, and they all damn the bankers, who have had nothing whatever to do with it. Reasoning with an American on the folly of i.ssuing greenbacks, lie said : " But we make interest on that $240,000,000." No, you do not ; a properly banked money earns interest and advances trade. Thus if these greenbacks were replaced with a true silver note, th.e Central Bank would be lending millions to trade and farmers, l!iro;igh the western banks ; but you stand exposed to be blown up by a financial cyclone by these very credit papers. If any great famine or war should come, you displace silver, $1,000,000,000, and damage all the miners. There is no money to lend to the farmer and to trade, because the monc}^ is a debt and not a capital. You cannot make money out of a debt, but only out of capital (or savings). It ma}' be hard for some people to see tlirongh tliat reasoning, but It is as .solidly true as the earth it.self. Thus the Bank of 1-Vancc with its silver note lends to trade and to farmers through 258 branches ; but with our credit paper we danui both .»^ilver and trade, and stand to be blown up financially in a war. So nuicli for p<:)liti- cal banking; it is tlie curse of the I'.Hh century. Sweep it away 1 21 Restore silver ! Destroy credit paper ! You will Lave to tax your- sslves of course, but you will have all the money in trade that you want. Ivondon money is now 1 per cent, per annum. In France about 3 per cent. Here it is 10 per cent., in the country. Russia would make 55^300,000,000 profit by founding a silver note, because she would raise $900,000,000 paper from GO per cent.,, present value, to 100 per cent. Yet the Czar has just ordered the issue of $100,000,000 more credit paper to be*paid to the people for connnodities. Such is the infatuation of European paternal politi- cians, that they cannot see they are only making matters worse ; for, like our greenbacks, this paper will really be taking their goods on. loan from them and giving them nothing but wind in return. Those who sow the wind shall reap the whirlwind. Take Italy; if she would set all her soldiers to manual labor and' employ the cash received in buying silver to back her credit paper, she would be able to redeem the hundreds of millions of silver that. France holds against her. She would lift the value of her credit paper to par, and make hundreds of millions profit, besides blessing her people with lighter taxes, for the same tax, collected in paper which is at par, would produce a greater revenue and cure the dread- ful deficits wdth which Italy is afflicted. Austria too is full of forced credit paper, and all her business suflfers in consequence ; instead of handing over the monetary currenc}' to a bank, she also follows paternalism and uses political banking. All these credit paper nations have at present got a bad attack of the gold fever, and are proposing to sell their silver in order to put their paper upon a gold basis. But this will only make the matter worse, because the actual money needed to back the^M; issues is some- thing over $1,500,000,000, and that amount of gold cannot be found. It is true that Mr. Ottomar Haupt, the banker of Berlin, declares that there is no gold famine because all the gold that is. wanted by Austria can be easily forced over from the United States. That is the effect of our credit paper; it flows out into the channels of commerce, growing ever>- day in hundreds of thousands ($150,000 in new silver notes every twenty-four hours), and these being everj-- where exchangeable for gold, it is only a question of time till the last gold dollar will be driven out. But even if all the gold in the United States of America should be taken away by Europe to back their credit paper, still that would not be half enough to supply them. What would be our condition with all cur gold gone ? To what premium would all the gold contracts arise ? What would the debtors do to liquidate their gold contracts ? Wuuld it not bring on a revolution? Is theie not a fear that the people, seeing how tl:e politicians had wrecked the country-, will revolt as they did against the Continental not^-s, and abandon the whole business by repudia- tion ? Despair is a drcadfnl master. W'heu the jieople abandoned the $200,000,000 of Continental rot.: , what ruin, suicide and des- peration followed the loss. How much greater would be that ruin, loss and desperation when the sum was $1,100,000,000 ? The statement of Mr. Ottomar Haupt shows you that ICurope can just throw us into that position whenever it pleases to do so. So we must take up our credit paper. I have just shown the abandon- pient of silver by the politicians, let us sum it up and .see what Europe has so far l^egun to abandon. Germany has abandoned .... Ci')7,."jOO,000 Germany wants to sell 1(»()',(MM),(KM) Russia has abandoned all silver !»l)(1,( KM ),()()() Austria wants to abandon SO,(HM),(l(K» Italy has driven out 7:2,(K)(),(MM) Italy wants to sell 10,(XK),(«X) Belgium has driven out and wants to sell G-"),(K)(),(MH) Greece has nothing but paper U.5,0(K),()(K> Roumania sold o, 000,000 France stands alone in the wild, stormy frenzj' against s.l\cr, quietly increasing her gold reser\^es week by wx^ek. Cause No. 4 is the utter absence of control by bankers. In all the nations the bankers seem stupidl}- helpless. Why do they allow this credit paper in their several lands? Why do they not form societies to protest against it ? The public abu.se them as if their profession was that of thieves, when they are or should be the safe- guards of trade and the rock of the state. Bankers lamely submit to abuse, and seem by this silence under abu.se as if they were con- tent to be classed, by the public, as thieves. The time has come when bankers must join and teach the people how wicked the pol- iticians are, and save the people from the follies of credit paper and from political Ixmking. The remed}', of course, is an International Treaty. That tre;:ly must embrace : (1) The foundation of banks to control the i.ssucs. (2) The abolition of credit paper and of political banking. (3) The use of a silver note like that of the Hank of I'rance, kept in constant redemption l^y the TV-derated banks, who liold Ib.e last gold and silver rc-ier^xs. Who shall negotiate tliis treaty? ];xpert ])iin\dng ambassadors nppoiiited by the Chief Ivxecutive ; these to confer with similar ambas.^adors appointed b}- tlie nations. The free coinage of silver need not be tonched at all ; it does and can only destroy the use of silver, nor need the question of ratio be brought into it. The true i)lace then of silver in the circulation of the whole world is to issue in each country a true silver bank note, like that of the Bank of l-Vance, through the federated banks of each countr}', and to sweep away forever all false credit paper, and all political banking ; to pay these bank notes only in silver, as the Bank of France does, and so force silver into use all over the world. There is no need to wait for England, though India must follow suit. Will the nations adopt that treaty ? They j>i2(sf. If they do* not, the financial dynamite bomb of Credit Paper (upon which we are all sitting, England included), will burst one day with frightful force and send down our boasted civilization in ruins. Suppose the nations adopted free coinage of silver ; then as fast as the silver coins went into circulation the credit paper would drive them out of the country, just as the fractional currency paper drove out our subsidiary silver in the United States of America into Can> ada and into Mexico, and robbed us of millions of dollars to redeem them again, so the credit paper will surely drive out free silver too. Thus the free coinage, of silver would tax the people 50 per cent, to undertake it, because the 65-cent dollars would collect ]00 ceiits worth of labor or goods from them in the exchange, and then would leave them worse off than before, with nothing but credit paper again. The nations musf adopt banking aiso, because of the great r^^'ofit they will make b}' raising all the credit paper to par, jmd all the silver in the world to par. The profit will be, first on the sum of ^3,000,000,000 credit paper placed upon a banking basis ; and then on $3,700,000,000 silver restored to 129 cents an ounce, besides on the $3,000,000,000 of silver which will be mined in the next 20 years, and which Vv'ill bring 129 cents per ounce instead of 85 cents per ounce. Plow will the nations pay the taxes ? Going back to old da5-s of heathen Rome, we see today those old Roman roads which have stood the storms and changes of 2,000 years. Those roads were made by the Roman soldiers. It was the practice of Romans, in order to keep their soldiers strong in bod}-, and in full discipline, to make the .soldiers do work in building roads, aqueducts and canals. Suppose the idle soldiers in the barracks of the Christian nations were put to work to make railroads and canals through all the countries of all the nations of the world, and the money earned by their labor being paid in silver to the several Christian Treasurers the bill would foot up in this way : 8,000,000 soldiers at $1.00 a* day, taking 300 working days in fhe year, would give a yearly receipt of $2,400,000,000 of silver to be received ever^' year, that would soon put the credit paper to rights ^ud raise silver to par without even asking England's permission. Then the canals and electric railroads, made by the.se strong men, would lift up tlie power and wealth of the countries many, many fold, increase the value of property, and lower taxation all over the world. While the soldiers (if you nmst have them) would be more healtli^' with 12 hours a day hardwork, more free from dis- ease, more noble in soul and body, useful, instead of hurtful, orna- mental to mankind instead of being a financial nuisance. Where there's a will, there's a way. Now that (for the first time in the history of mankind) the mask has been torn from the face of the politicians, it remains for the people of the earth to carrj- out this plan and to redeem themselves from the curse of credit paper, from the heavy war taxes and to begin the reign of that promised peace for which we hope, when mankind, redeemed from war with its armies shall sing : " Glory to God in the highest, peace on earth, good will to man." These are a few replies in answer to criticisms by bankers : Banker. — Tell me! How would you dispose of the greenbacks ? Answer. — Call them in and replace them witli a 2 '2 per cent, bond, as was done by Hon. Charles Fo.ster with the 4>j's in 1891. That would put an end to them without trouble, if you pas.sed a law repealing their legal tender power, and forbidding all credit paper. B.\NKER. — How would >ou extingui.sh the National Bank credit paper, which you condemn ? Answer. — In the same way ; let the National banks redeem their notes and surrender the bonds as fast as the notes are redeemed. Banker. — How would you deal with the silver certificates ? Answer. — Hand them over as deposit receipts to the federated clearing houses and let the Central Clearing Hou.se Bank call them in for a true silver bank note ( Hke the Bank of France) ; that wouki enable the Central Clearing House to lend to the Nicaragua Canal $100,000,000, and to lend to farmers, and to trade (but only through IfK-al clcariiij^f houses aiul hanks,, on tlr.ec-fcjUl security) $100,000,000 more in silver. P>.\nki-:k. — How would you found the Central Clearing House Bank ? An.swi;r. — As alread}- .shown in the California Baiikcrs' Magazine. That is, join all the local clearing houses into a federation, electing 12 directors to form the board of the Central Bank, which should be placed centrally. Let all the loans of coin be made by notes issued to the local clearing houses, and by them to the several banks. Each bank to have its notes stamped with its own name, and to be paid two thirds of the net profit on the amount kept in circulation for 12 months, the remaining third to be the profit of the people of the United States. The Treasurer and Comptroller of the Currency and Director of the Mint to be ex-officio members of the central board of directors. All government funds to be banked in the local clearing houses. 26 CALIFORNIA Safe Deposit and Trust Company PAID UP CAPITAL, $1,000,000 Cor. Montgomery and California Sts., San Francisco. Cal. This Company is authorized to act as Executor, Administrator, Guardian, As- signee, Receiver or Trustee. It is a legal depository for Court nnd Trust Funds. Will take entire charge of Real and I'ersonal Estates, collecting the income and profits, and attending to all such details, as an individual in like capaci'.y could do. (All investments of trust funds amd the title thereto kept separate and apart from the assets of this Corporation.) $200,000 in securities, are deposited with the TREASURER OF STATE to secure the trust liabilities of this class, and the deposit is not liable for any other obligations of the Company until all such liabilities have been discharged. Acts as custodian of Wills, and consults as to trust matters, wiTHOUr charge. Receives Deposits subject to check, allowing interest on daily balances, and issues Certificates of Deposit bearing interest. Acts as Registrar and Transfer Agent of all Stocks and Bonds. , On Ordinary and Term Deposits in the Savings Department, the highest rates of interest paid consistent with prudent banking. Magnificent Burglar-proof Vaults with small safes to rent at moderate charges. Unsurpassed facilities for the storage of Plate, Jewels or valuable goods of merchants and others. OFFICERS J. D, FRY, Prcslilent HENJIY WILLIAMS. VicePres. J. M. HUOTWELL, 2a Vice I'res. J. D.\LZKLL BUOWX. Secn'tarj 8, I'. YOUNG. Trea.surer and Manager UIRECrORS J. I). Fry Urnry Williams .1. M. .Shotwell I G. Wjckorsham C. F. MacDcrinot Charles Main .las. Troadwell IIunuT i5. KiuK Robt. D. Fry Thos. K. Hayes J. C. Johnson The rate of interest ou Term Deposits for six months ending DcccnilHT 31, 1391, was at 5 40-10) per «ent. per annum, and on Ordinary Deposits at 4 50 100 per ce:it. i«r annum. the: STATE INVESTMENT AND INSURANCE COMPANY. ESTABLISHED 1871. CAPITAL STOCK, Paid Up $400,000 o^ PRINCIPAL OFFICE : 218 AND 220 SANSOME STREET, San Francisco, California. GEORGE L. BKANDER, CHAS. M. BLAIR, President. Secretary. Chicago Check Perforator CHEAPEST FASTEST] BEST' ~ $15 Used and endorsed by the New York Clearing House ^ SEND FOR ClRCri.AR AND SAMPLE OF WORK lO 213 Sansome Street ISCO. CAI, SCOTT & BAN NAN, ^l?^;^f° BEFORE BUYING A PIANO, # ORGAN Or A nything in the MUSICAL LINE BE SURF, TO CALL AND SEE KoHI,ER-& ChASE^ 26, 28, 30 O'Farrell St. they are known for low prices. thb leading agencies of THE WORLD FOR BRASS AND STRINGED INSTRU- MENTS AND SHEET MUSIC. KOHLER & CHASE 28-30 O'Farrell Street THE BANK OF CALIFORNIA, Agent for Pacific Coast. Tlic Hank will rccciv-.- subscriptions and make delivery of bonds as stated below. Prospectus, full information and subscription papers can be had on application to the bank. $5,000,000 NICARAGUA CANAL CONSTRUCTION CO.'S SIX PER CENT BONDS, DuK July ist, 1897. INTEREST PAYABLE JANUARY ist AND JULY 1st. COUPON BONDS OF $1000, $500 AND $100 EACH. Piincipxal and Interest payable at the Manhattan Trust Co., New York City and at the Bank of Cahfornia, San Francisco, CaL These bonds are secured by an assignment, in trust, to the Manhattan Trust Com- pany of Kew York, Truste « of a certificate of the Maritime Canal Company of Nicar- agua for $5,000,000 of its long term bonds, authorized to be issued by the said Maritime Canal Company under its charter by Act of Congress of the United States, approved February 20, 1889. They are redeemable within five years at par. or, at the option of the Construction Company, are convertible at maturity into the bonds of the Maritime Canal Company. Interest at six per cent per annum, till maturity, is provided by a special cash deposit therefor with the Manhattan Trust Company of New York, Trustee. A bonus of twenty per cent in stock of the Maritime Canal Company of Nicaragua is ofiered with ach subscription to these bonds. Offices of the Company: No. 44 Wall Street, New York. See page 20, The whole of the money found for finishing the Canal. Hall's Safbs ARE THE BEST IN THE WORLD. We have ilesigned and built the Vaults and Safes of the following BANKS IN SAN FRANCISCO: CROCKER-WOOLWORTII NAT. IJANK, THE IIIUERNIA SAVINGS BANK, GERMAN SAVINGS BANK, PEOPLE'S HOME SAVINGS AND UNITED STATES MINT, SAFE DEPOSIT, WELLS, EARGO & CO.'S BANK, LONDON, PARIS & AMER. BANK, BANK OF BRITISH COLUMBIA, AMERICAN BVNK & TRUST CO., SECURITY SAVINGS BANK, NEVADA BANK, AND OF ALL LEADING BANKS ON PACIFIC COAST. Hall's Sake and Lock Co., 609-611 Market Street, San Francisco. J. W. HUGHES Plans, IVTechLanical Drawings and Sections, and IVIaps BY THE CHEAPEST KNOWN PROCESS OF WAX ENGRAVING Real Estate Dealers, Bankers, Surveyors, and Periodicals of all Kinds Can get Better Work for less Money by this Engraving Process 408 CALIFORNIA STREET Nexi Door to Bank of C.\lifornia San Francisco, Cal. INCORPORATED 1863. K. H. McDoNAiD, I'lesident. I'KANK V, iMcDoNAi.n, Cashier. K. H. McDonald, Jr. Vice-President. PACIFIC BANK SAN FRANCISCO, CAL Oldest Chartered Commercial Bank on the Pacific Coast PAID-UP CAPITAL, IN GOLD SURPLUS .... AVERAGE RESOURCES YEARLY VOLUME OF BUSINESS $1,000,000 800,000 4,750,000 225,000,000 Depositors secured by the unlimited pro rata guarantee of all the shareholders. Banking Connections in all the important centers of the world. Letters of Credit for use of travelers, available in all parts of the world. Telegraphic Transfers in Cipher made in London, I'aris, Berlin and various places in the United States. Drafts issued on Australia and the Orient. Dividends and Coupons collected. Bullion bought and sold. Orders executed by all Investment Securities. State, County, City and Water Bonds negotiated. Approved Business Paper discounted or received as Security for Loans. Loans on Goods in Transit. Loans on Warehouse Receipts. Collections on the Pacific Coast, Mexico, Central and South America, New Zealand,^ India, China and Japan, handled at lowest rates, with promptness and dispatch. Bills drawn on Union Bank of London, Credit Lyonnais, Paris and DirectioQ der Disconto Gesellschaft, Berlin, and other important cities of Europe. UNIVEKSITY :}J ^^\\E•UNIVERS•/4 ^lOSANCFlfx^ o ^HIBRARYQa ^^^^l•llBRARYQ< %ii3AiN(i]\\v^ %oi\mi^'^ %0iimiQ'^ AMEUNIVERS"//, c A\^EUNIVERy//- A>;lOSANCElfj> o ^OFCAIIFO/?^ ^OFCAIIFO/?^ o ^tllBRARYQ<- %ji3AiNn]WV^ ^;,OFCAIIF0/?^> ^;lOSANCElfj> o ^ %ojnv3jo't^ A\^EUNIVERJ/, '^i'ilJONVSOl^ .\WEUNIVERS'//- v>;lOSANCEl% o 1—— . $^ vvlOSANCElfX> o ^OFCAIIFO/?^ y/).i Mv/wanaN^ UC SOUTHERN RfGIONAL LIBRARY CAClLf^ IJiilllJlll AA 001114 200 7