:*:< 
 
 1<10<»' 
 
 
 
 ,<i«>:<:<: 
 
 
 - r.
 
 A 
 
 i 
 
 UNIVERSITY OF CALIFORNIA 
 AT LOS ANGELES 
 
 J 
 
 T^i^'z^^^ 
 
 'i^^^%h-^^^
 
 9^
 
 ANALYSIS 
 
 OF THB 
 
 Fanction5 of noncy 
 
 BY 
 
 WM. M. STEWART 
 
 U. S. SENflTOK FROfl NEVADA. 
 
 Washihgtom, D. C: 
 
 WM. BALLANTYNE A SONg, 
 
 428 Sbvbnth St. N. W., 
 
 1898.
 
 OorTRioHT, 1898, bt 
 Wm. M. Stbwabt.
 
 ^■pm 
 
 I^H 
 
 ^^^^^^r 
 
 '^^^H 
 
 ^^^^^^^^^^H 
 
 ^^^1 
 
 
 
 ^^m ^' 
 
 ^^^^H 
 
 ^^^ 
 
 -^^^^^H 
 
 ^^^^ 
 
 M 
 
 ^^B^^ 
 
 •^^^^^^^^1 
 
 ^^^H^^^ 
 
 1^ ^1 
 
 ^^^^^^^^^^ 
 
 m-i' m 
 
 ^^^^Bl 
 
 i- V 
 
 ^^^^■^iiib 
 
 .m
 
 
 ,v 
 
 DEDICATION. 
 
 This little volume is dedicated to the young 
 men and women of the United States who are 
 contemplating matrimony with its inevitable 
 responsibilities. The comforts of life with 
 which the young women of this country have 
 been surrounded in the homes of their fathers, 
 built in the better days of the Republic, cannot 
 be provided by the young men of the present 
 da}' on account of the hard conditions which 
 environ them. The families and friends of 
 young women opi^ose their marriage with 
 young men otherwise worthy, on account of 
 the fear that it will be impossible for the 
 united efforts of both to save them from pov- 
 p erty and want. 
 
 The author believes that a careful study of 
 
 this book will enable the people, through the 
 
 intelligent exercise of the elective franchise, to 
 
 restore the conditions enjoj^ed by former gen- 
 
 -j erations, when happy homes were established 
 
 V- throughout our vast domain. If this can be 
 
 5^ accomplished, the barrier which fear of pov- 
 
 ^^ erty has erected between the young men and 
 
 women of the country will be removed and 
 
 the sacrament of marriage will again promise 
 
 happiness, prosperity and progress. 
 
 WM. M. STEWART. 
 
 Washington, D. C, April 12, 1898. 
 
 slJOO
 
 
 CONTENTS. 
 
 PAGE. 
 
 MONEY 7 
 
 VALUE 19 
 
 PRICE 23 
 
 BIMETALLISM 31 
 
 RATIO '. .-. 41 
 
 MOTIVE FOR DEMONETIZATION 51 
 
 MONEY IS NATIONAL 57 
 
 PARITY 69 
 
 FOREIGN COMMERCE 75 
 
 LABOR INTERESTS 81 
 
 BANK CURRENCY 8S
 
 f ( K c e 
 
 (• c T
 
 MONEY. 
 
 Money is a fundamental condition of the ex- 
 istence of society. Men must live in society or 
 perish. No human being was ever able to pro- 
 long his existence for any considerable time 
 without the use of what others produce. All 
 the authors on political economy agree that 
 mere barter without money involves isolation 
 and extermination, which the most primitive 
 savages avert by the invention of some kind 
 of money. If ever a tribe of savages existed 
 without using sticks, shells or some kind 
 of tokens as money, the fact has not been re- 
 corded and the possibility of such existence is 
 denied. 
 
 As life is the potential principle or force by 
 which the organs of animals and plants are 
 started and continued in the performance of 
 their several and co-operative functions, so 
 money is the potential principle or force 
 through the workings of which men associate 
 their efforts and produce industrial society.
 
 8 
 
 A» law i« "a rule or method of action or or- 
 der of sequence," which has not been fully de- 
 scribed in the thousands of law books pub- 
 lished for that purpose, and can never be de- 
 scribed in detail, so the infinite variety of uses 
 to which money may be applied will never be 
 written in books. Every attempt to define 
 law by enumerating the various laws of na- 
 ture and of man, and describing their func- 
 tions, has been a total failure, and the at- 
 tempts to define money by a full description 
 of its uses have been equally unsuccessful. 
 "Aristotle comprehended the money question 
 and pointed out in a simple statement the 
 difference between commodities produced by 
 labor, and money created by law. In his 
 "Ethics and Politics," 3rd London edition, 
 1813, vol. 1, page 375, he says: 
 
 'The comforts of life require an interchange 
 "of different works and exertions. The brick- 
 flayer, for example, must exchange the pro- 
 eduction of his labor with the shoemaker; and 
 "the bargain will be just when the works ex- 
 "changed bear the same proportion to each 
 "other as do the exertions of the artisans by 
 "whom they were produced. Tf the exertions
 
 ^*of the bricklayer be more valuable for their 
 ''duration or their difficulty than those of the 
 "shoemaker, the works produced by the latter 
 "must, to render the bargain equal, bear the 
 "same proportion numerically to those pro- 
 educed by the former; thus, if the bricklayer 
 "has consumed a thousand times as much labor 
 "in making a house as the shoemaker has done 
 "in making a pair of shoes, a thousand pairs of 
 "shoes must be given for one house. The same 
 "thing happens with respect to all other acts 
 "which derive their whole utility from the mu- 
 "tual exchange of different sorts of labor, and 
 "which could not long be maintained unless 
 "the exertions of one artisan in one way were 
 "nearly balanced and compensated by those 
 "of another artisan in another. A community 
 "could not subsist composed wholly of physi 
 "cians or wholly of husbandmen; it must con- 
 "sist of physicians and husbandmen; and other 
 "classes of individuals employed in different 
 "trades and different professions. But that 
 "operations and works of such different kinds 
 "should be fairly exchanged for each other, it is 
 "necessary that they should be nearly commen- 
 "surate; that is, that all of them should be
 
 10 
 
 ''capable of being estimated with tolerable ac- 
 ''ourac^' bj comparison with one common 
 "measure. Hence the introduction of money; 
 '*hy means of which all those operations and 
 "works are compared in value with each other, 
 "and their relative excesses or deficiencies as- 
 "certained with sufficient correctness for all 
 "practical purposes. In reality, value depends 
 "on the mutual wants of men, which form the 
 "great bond of society; for unless their wants 
 "were mutual, exchange could not be effected; 
 "but money is used by convention as the repre- 
 "sentative of all things wanted; since it serves 
 "as a pledge and surety, that whenever those 
 "wants occur they will be speedily gratified; 
 "and its name is derived from the word signi- 
 "fying law, which indicates that it is founded, 
 "not on nature, but on convention; and that 
 "human laws, which have thought fit to em- 
 "ploy it as a measure of value, may, at pleas- 
 "ure, set this use of it aside, and employ some 
 "other measure in its stead. Money, which 
 "represents the value of all other things, va- 
 "ries in its own; but its variations are less 
 "considerable than those of most other sub- 
 "stances. It serves, therefore, to fix their
 
 11 
 
 "price, and to render them commensurate with 
 "each other, thus performing a function essen- 
 "tial to the existence of civil society; for com- 
 "munities could not subsist without exchange, 
 "nor exchange without equality, nor equality 
 "without a common measure. The various 
 "kinds of labor, and the works thereby ef- 
 "fected, cannot, indeed, be accurately com- 
 "pared and exactly measured, either by each 
 "other or even by money; but they may, by 
 "means of the latter, be estimated with suffi- 
 "cient correctness for maintaining that com- 
 "mercial intercourse which is essential to the 
 "supply of our numerous exigencies." 
 
 The great variety of things which have been 
 used as money, at different times in different 
 countries, has associated money with commod- 
 ities and misled many of the so-called econo- 
 mists. The number of men in high official 
 station, and of professors of political economy 
 in American colleges, who regard money as a 
 commodity and not a function created by law, 
 seems to be constantly increasing. The 
 number and variety of commodities that 
 were once used as money, and by law or cus- 
 tom would pay debts and buy property.
 
 12 
 
 which now possess no money function, ought 
 to suggest to political economists that such 
 commodities were never money in themselves, 
 but that the money function connected with 
 them, while it existed, was created and main- 
 tained by force of some law which the people 
 obeyed. The highest courts of England and 
 America agree with Aristotle, and hold that 
 money is the creation of law, and that every 
 sovereign power may create money without re- 
 gard to the material which is used for that 
 purpose. 
 
 The leading case in England is known as 
 the Mixed Money case. It arose in the reign 
 of Elizabeth, and is reported in Davis' Reports 
 of Decisions of that period, page 48. It was 
 decided in that case that the power to create 
 money, make it a full legal-tender, and to use 
 any material whatever suitable for that pur- 
 pose was inherent in every independent state, 
 and that the money current by law at the date 
 of payment was the money of the contract, be- 
 cause all contracts were made with a view to 
 the sovereign power of the government to cre- 
 ate full legal-tender money in payment of 
 debts.
 
 13 
 
 During the Civil War the greenbacks were 
 made legal tender for all debts, public and 
 private, except duties on imports and interest 
 on the public debt. It was contended after 
 the war that, although money was the creation 
 of law and the power to create it was an at- 
 tribute of sovereignty in every independ- 
 ent State, yet the Constitution of the 
 United States did not confer that sovereign 
 power upon our Government. The question 
 was most elaborately discussed and decided 
 by the Supreme Court of the United States in 
 the legal-tender cases, and the doctrine of the 
 Mixed Money case was not only approved, but 
 it was declared that the United States could 
 make full legal-tender money of paper or of 
 any other material in peace or war; that the 
 whole matter rested in the discretion of Con- 
 gress, and that no law which Congress might 
 pass creating legal-tender money could be 
 questioned by the courts. Similar decisions 
 have been made by nearly every civilized coun- 
 try in the world. The power to create legal- 
 tender money by law, without regard to the 
 material used, is fully settled and established
 
 14 
 
 by the concurrence of the highest tribunals of 
 all civilized nations, ancient and modem. 
 
 The contention maintained by the fading in- 
 tellectual capacity of economists, or by the 
 selfish cunning of money getters, that gold is 
 money, must be regarded in the same light as 
 the contention that the world was flat; or that 
 witchcraft was a well known device of the 
 devil. The worship of gold, and the spolia- 
 tion of the masses by the classes, are kindred 
 illustrations of the afflictions through which 
 struggling humanity is compelled to pass in 
 establishing justice, liberty and equality. 
 
 Emphasis is placed on the all-important 
 truth which the Supreme Court of the United 
 States has settled by repeated decisions, 
 namely, that it is the law of the land that 
 whatever Congress declares to be money is 
 such to all intents and purposes, without re- 
 gard to the question as to what material is 
 used, whether it be gold, silver, paper, parch- 
 ment, or any other substance, upon which 
 the edict of sovereignty can be manifested 
 by the stamp of the Government. Those who 
 teach otherwise not only exhibit their igno- 
 rance or evil design, but sow the seeds of anar*
 
 15 
 
 chy and discord to overthrow and subvert the 
 law of the land, which every good citizen is 
 bound to obey. The cunning few, generally 
 calling themselves bankers, who deny the 
 right of the Supreme Court to declare what 
 the law is, contend that the United States 
 has no power to create legal-tender money. 
 This they do in order to exercise the power 
 of the Government to issue money for private 
 gain at the expense of the public weal. These 
 are the real anarchists who threaten the sta- 
 bility of our Government. 
 
 The power which creates money and com- 
 pels all creditors to receive it in payment of 
 debts is the same power which creates many 
 other intangible functions of vast importance 
 to the human race. It is the same power 
 which creates municipal law, commanding 
 what is right and forbidding what is wrong. 
 The law which inflicts the penalty of death 
 for murder is not a material thing, but a func 
 tion. The same is true of the great body of 
 the laws of any country, both civil and crim- 
 inal. There is no material whatever, whether 
 gold, silver, paper or anything else, which a 
 creditor might not be compelled to take in dis-
 
 16 
 
 charge of an obligation due him if the law so 
 commanded. The confusion arises because the 
 money function has been conferred upon a 
 great variety of commodities, such as gold, 
 s-ilver, copper, lead, paper, cattle, slaves, shells, 
 fish, and the like. But the subject is made 
 plain when we reflect that it was not the 
 commodities which were money, but the force 
 of law, or custom amounting to law, which 
 these commodities were selected to represent, 
 that did the work of money. 
 
 The function of money in interchanging 
 commodities is an intermediate service which 
 is a double transaction. Commodities are 
 bought with money, which constitutes one-half 
 of the exchange. The commodities so bought 
 are then sold for money, and thus the ex- 
 change is complete. Before there can be a 
 demand for property money must be demanded 
 and procured. Consequently, there is no de- 
 mand for property without a preceding de- 
 mand for money, and, therefore, the demand 
 for money is equal to the demand for all other 
 things. Every intelligent human being is 
 striving to get money, not for the purpose of 
 consuming it, but for the purpose of using it
 
 17 
 
 to supply his various wants. Nothing can be 
 done without money. Money is necessary to 
 buy the comforts of life, to conduct commerce, 
 to carry on war, to maintain government, and, 
 in short, to do anything and everything need- 
 ful to enjoy what others produce, and supply 
 the innumerable wants of a person in organ- 
 ized society. 
 
 This great intermediate power which makes 
 associated effort possible has no more analogy 
 to commodities than the vitality which ani- 
 mates material forms and gives them life hai 
 to the ashes of the dead after life baa A^- 
 parted.
 
 19 
 
 VALUE. 
 
 Commercial value is the only value to be 
 considered in economic science, and in this 
 treatise the numerous misleading uses to 
 which the term is applied, will be disregarded. 
 Value, in a commercial and economic sense, is 
 the mutual estimation of persons in making 
 an exchange of commodities. In other words, 
 the concurrent estimation of the parties mak- 
 ing an exchange of commodities is the value 
 of each commodity exchanged expressed in the 
 other. 
 
 Great confusion exists in the public mind 
 on account of the improper application of the 
 word "value." It is frequently said, ignorantly 
 or for the purpose of deception, that good 
 money must be composed of some material 
 having intrinsic value. Many well-disposed 
 people, not knowing that value is extrinsic 
 and not intrinsic, are misled by the use of the 
 term as applied to value. If they would re- 
 flect they would readily see that value, in au 
 economic sense, can only relate to propertj 
 which is limited in quantity and for whioh
 
 20 
 
 there is a demand that cannot be supplied 
 without sacrifice. If value were intrinsic it 
 would hardly be contended that air does not 
 contain more intrinsic value than gold. 
 Should any one doubt this, let him consider 
 which one he could dispense with with the 
 least injury to himself. 
 
 The fact that there is a large class of per- 
 sons in the United States who believe or pro- 
 fess to believe that value is intrinsic would be 
 incomprehensible if the history of every age 
 did not exhibit similar folly which subsequent 
 ages have treated with ridicule and con- 
 tempt. The people who promulgate this 
 belief speak as fluently of the regulation of 
 value by the law of supply and demand as do 
 those who believe that value is extrinsic and 
 not an inherent quality. The consideration 
 that if value were intrinsic in gold it would 
 be unchangeable, and that if all the mountains 
 were gold an ounce of it would buy the same 
 amount of wheat or any other commodity as 
 it now does, makes no impression whatever 
 Mpon Buch empirics as the Clevelands and 
 HarriBODB, or the Sumuers of our colleges,
 
 21 
 
 or their followers, who maintain the absurd 
 doctrine of intrinsic value. 
 
 The intrinsic quality of a glass of water at a 
 mountain spring is equally as great as the in- 
 trinsic quality of a glass of water on the Colo- 
 rado desert. A glass of water is free at the 
 spring and commands nothing in exchange. 
 But a glass of water on the desert may com- 
 mand an exorbitant price when the traveler 
 is perishing with thirst and has plenty of 
 money to buy it. 
 
 In an economic sense, it is as impossible to 
 express value as existing in a single object as 
 it is to express distance in a single point. In 
 value more than one thing is necessary. 
 There can be no estimation of the relation of 
 objects where only one object exists, and there 
 can be no distance without extension. The 
 argument attempting to show that value 
 is intrinsic and unvarying in gold, when re- 
 duced to its last analysis, is only the assertion 
 that an ounce of pure gold is always worth an 
 ounce of pure gold. A moment's reflection 
 will show that every commodity measured by 
 itself will always be equal to itself.
 
 22 
 
 The function of money is not to act as a 
 measure of itself, but to be a common denomi- 
 nator of all other valuable things. Why are 
 the market reports published and universally 
 read by the business community if such re- 
 ports do not show the value of commodities 
 expressed in money? If value were intrinsic 
 and existed in the things bought and sold, 
 and was not fixed by the estimation of the 
 buyers and sellers, why publish market re- 
 ports? If value is intrinsic, why not learn 
 from an examination of the commodities 
 themselves how much they will fetch in the 
 market, instead of followiHg the price of things 
 bought and sold as shown by the daily re- 
 ports?
 
 23 
 
 PRICE. 
 
 Price is the relation between money and 
 property, expressed in terms of money. The 
 demand for money is equal to the demand for 
 all other things offered for sale, because noth- 
 ing can be bought until the purchaser has ac- 
 quired the means of payment, either in cash or 
 in obligations which are money futures. Con- 
 sequently every demand for property follows 
 a previous demand for money. All the prop- 
 erty for sale and all the money in circulation 
 are reciprocally the supply of and demand for 
 each other. The paramount consideration in 
 economic and monetary science is to maintain 
 at all times as nearly as possible the same re- 
 lation between the property for sale and the 
 money in circulation, because if the volume of 
 money is increased or decreased in the same 
 proportion that property for sale is increased 
 or decreased the general range of prices will 
 remain substantially stationary. Prices of 
 particular articles will rise and fall according 
 to the demand for and supply of such articles; 
 but when all the property for sale taken to-
 
 24 
 
 gether is considered, the general level of prices 
 is controlled by the volume of money in circu- 
 lation. 
 
 John Stuart Mill, in the second volume of 
 ''Mill on Political Economy," page 2, says: 
 
 "As the whole of the goods in the market 
 "compose the demand for money, so the whole 
 "of the money constitutes the demand for 
 "goods. The money and the goods are seeking 
 "each other for the purpose of being ex- 
 "changed. They are reciprocally supply and 
 "demand to one another. It is indifferent 
 "whether, in characterizing the phenomena, 
 "we speak of the demand and the supply of 
 "goods or the supply and the demand of 
 "money. They are equivalent expressions." 
 
 And, again, on page 18, he says: 
 
 "That an increase of the quantity of money 
 "raises prices and a diminution lowers them is 
 ^'the most elementary proposition in the the- 
 "ory of currency, and without it we should 
 "have no key to any of the others." 
 
 Some writers criticise this doctrine, but 
 nothing which they say militates against the 
 general principle that an increase in the vol- 
 ume of money tends to raise prices and a de-
 
 25 
 
 crease to lower them. They suggest, for ex- 
 ample, that the volume of metallic money in 
 the world was more than doubled between 
 1850 and 1873 by the gold from California 
 and Australia, and that general prices rose 
 only about twenty per cent. They do not make 
 proper allowance for the change in conditions 
 which is made by every increase in the vol- 
 ume of money. General prices fell between 1810 
 and 1850 about fifty per cent, by reason of 
 the Spanish-American wars, which greatly 
 diminished the output of the precious metals, 
 and at the time of the new discoveries general 
 prices were rapidly declining. The new gold 
 not only checked the decline, but actually pro- 
 duced rising prices for nearly a quarter of a 
 century. The reason why the new gold did 
 not double general prices was because the new 
 money enabled the people at large to buy more 
 of the products of labor, and thereby greatly 
 increased the market for such products. The 
 opportunity thus afforded to sell, stimulated 
 production enormously and increased the sup- 
 ply of property nearly as rapidly as the new 
 gold added to the volume of coin. Thus, new 
 productions fed a growing market, and nearly
 
 20 
 
 balanced the increase of the volume of money 
 which the new gold produced. General prices 
 were not inflated, but were substantially sta- 
 ble, with an upward tendency. 
 
 Since the mints have been closed to silver 
 and one-half of the supply of the metallic 
 money cut off, there has been a general decline 
 of prices of more than fifty per cent., show- 
 ing that general prices conform to the volume 
 of money, whether it be increasing or decreas- 
 ing. An increasing volume of money may so 
 stimulate production as to prevent a rise in 
 prices corresponding with such increase, but 
 every diminution of the volume of money oper- 
 ates with full force in depressing general 
 prices, because a shrinking volume of money 
 reduces the aggregate amount of money avail- 
 able for the purchase of property and injures 
 or destroys the market, and thereby discour- 
 ages enterprise and limits production. This 
 principle is graphically illustrated in our prog- 
 ress toward the gold standard, which has pro- 
 duced a fall in general prices in twenty years 
 of at least fifty per cent., and caused a corres- 
 ponding paralysis in the productive forces of 
 the country. More than one-half of the produc-
 
 27 
 
 tive forces of the United States are dormant on 
 account of the stagnation caused by contrac- 
 tion of the money supply to reach the gold 
 standard. 
 
 The fall in general prices is admitted, but it 
 is sometimes denied that such fall was pro- 
 duced by the demonetization of silver. The 
 recent exhaustive report of the Royal Commis- 
 sion of England on the Subject of Agricul- 
 tural Depression was unanimous in attrib- 
 uting the distress in that industry to the de- 
 cline in prices of agricultural products, but 
 the Commission was not unanimous as to the 
 cause of such decline. Some of them attrib- 
 uted it to improved appliances in agriculture. 
 Sir Robert Giffen, the acknowledged leader of 
 the gold monometallists, deprecated the sug- 
 gestion that the fall of prices in the last 
 twenty years is not mainly attributable to the 
 demonetization of silver. He called attention 
 to the fact that the methods of production in 
 agricultural pursuits were improved more rap- 
 idly between 1850 and 1873 than they have 
 been since, and that notwithstanding such 
 rapid improvement in agricultural implements 
 prices constantly rose from 18.50 to 1873, since
 
 28 
 
 which time, although the improvements in 
 agricultural implements have been less im- 
 portant than previously, prices have fallen 
 fully fifty per cent., which must be attributed 
 to the demonetization of silver. It is, he con- 
 tends, a delusion to attribute the decline of 
 general prices to improved methods of produc- 
 tion. 
 
 It is true that many articles that were 
 costly and regarded as luxuries a few years 
 ago are now cheap, and rank among the neces- 
 saries of life. Skill and enterprise are con- 
 stantly reducing the cost of articles in use and 
 making them cheap, while inventive genius 
 and enterprise are constantly creating new 
 and costly luxuries which contribute to the 
 comfort and gratify the taste of those who can 
 afford to have them. The costly articles in- 
 vented and put upon the market every year 
 fully balance, by the high prices they com- 
 mand, the reduction in prices of other things. 
 
 Justice between debtor and creditor, and 
 equal opportunities for all, are only attainable 
 by a volume of money which will always be 
 sufficient in quantity to bear a constant or 
 stable relation between all the property for
 
 29 
 
 sale and all the money in circulation. The 
 stability of general prices, which the proper 
 volume of money alone can maintain, puts in 
 operation the entire productive forces of the 
 country, furnishes labor for all willing hands, 
 and secures prosperity and progress. The im- 
 portance of furnishing opportunities to honest 
 labor cannot be over-estimated, because pro- 
 duction reproduces and consumption absorbs 
 the wealth of a country several times in each 
 decade; and if production is not checked by 
 contraction, the surplus over consumption will 
 add enormously to the general wealth of a. 
 nation.
 
 31 
 
 BIMETALLISM. 
 
 The indisciiminate use of gold and silver 
 for coinage into standard money is the use of 
 the two metals for the single purpose of cre- 
 ating money, and not for the purpose of creat- 
 ing a double standard of money. The money 
 ^f one metal has precisely the same functions 
 in its debt-paying and purchasing power as 
 the money of the other. It is a mistake to 
 suppose that the exclusive use of one metal for 
 the time being, because the other is not equally 
 available, creates a single standard of gold or 
 of silver. The right to coin and use the metal 
 which is cheapest, at the option of the debtor, 
 is the cardinal result of bimetallism. There is 
 no more difference in the functions of the 
 money that different metals produce than there 
 would be in the functions of steam, whether 
 generated by wood or coal. In the former 
 case it is one money; in the latter it is one 
 steam. 
 
 Parity between the two metals has nothing 
 to do with bimetallism, but parity between 
 the volume of money in circulation and the
 
 32 
 
 property for sale is of paramount importance. 
 As long as the supply of money and the prop- 
 erty for sale bear the same ratio to each other, 
 the parity which equity and justice require is 
 preserved. The coincidence of parity between 
 the two metals during all the ages previous to 
 1873, when both had unlimited coinage, has led 
 people to suppose that parity is a condition 
 precedent to bimetallism and not a condition 
 subsequent, produced by equal coinage laws 
 for both metals. The reason why bimetallism 
 produces parity is very plain. If a certain 
 amount of money can be coined out of a given 
 quantity of silver, and a like amount can be 
 coined out of a given quantity of gold, such 
 given quantity of silver and such given quan- 
 tity of gold each represents the same amount 
 of coin, and there can be no difference what- 
 ever in their value. 
 
 If it is more convenient to obtain a dollar 
 by the coinage of 25.8 grains of standard gold 
 than by the coinage of 412| grains of standard 
 silver, gold will be used for that purpose; and 
 if a dollar can be more readily obtained by the 
 coinage of silver, then silver will be used for 
 that purpose. When either of the two metals
 
 33 
 
 becomes dearer than the other, the entire de- 
 mand falls on the cheaper metal until the in- 
 creased demand raises the value of that metal 
 equal to or in excess of the value of the other, 
 the cheaper metal being always in de 
 mand in preference to the dearer. Their rela 
 tive value is thereby automatically equalized. 
 
 The relative production of the two metals 
 for the last four hundreds years illustrates the 
 fact that under the equal coinage of both their 
 relative quantities have nothing to do with 
 their parity. From the discovery of America 
 to 1803, according to Von Humboldt, there 
 were forty-four ounces of silver produced to 
 every ounce of gold, and at no time during that 
 v»^hole period would an ounce of gold buy more 
 than 15^ ounces of silver. From 1803 to 1850 
 there were about thirty-five ounces of silver 
 to one ounce of gold produced, and still an 
 ounce of gold would buy just 15| ounces of 
 silver, no more, no less. From 1850 to 1873 
 there were only six ounces of silver to one 
 ounce of gold produced; and yet an ounce of 
 gold continued to buy 15^ ounces of silver. 
 At the last named date the United States and 
 various European countries commenced clo»-
 
 34 
 
 ing their mints to sUver, until the right of the 
 depositors of silver bullion to have it coined 
 into money was denied by the entire western 
 world. 
 
 Since 187.3 the production of silver bullion 
 has been a little less than sixteen ounces to 
 one ounce of gold, while an ounce of gold will 
 now buy between thirty-two and thirty-three 
 ounces of silver. It will be observed that it 
 was the option of the debtor to have either 
 metal coined for his use in payment of debts 
 which maintained the parity. It will also be 
 observed that it was the closing of the mints 
 which took away that option and transferred 
 the coinage demand, which both metals had 
 supplied, to gold alone which has created the 
 present disparity. 
 
 The only parity which interests mankind is 
 that parity which exists between money and 
 commodities. The parity between silver and 
 commodities has remained substantially sta- 
 tionary. Four hundred and twelve-and-a-half 
 grains of standard silver will buy very nearly 
 as much of all things in general to-day as 412^ 
 grains of standard silver or 25.8 grains of 
 standard gold would have bought twenty-five
 
 35 
 
 years ago, but 25.8 grains of standard gold 
 to-day will buy more than twice as much prop- 
 erty in general as they would have bought a 
 quarter of a century ago. The disparity be- 
 tween money and property, created by the dis- 
 use of silver, has depreciated all kinds of prop- 
 erty, caused stagnation in business, and pro- 
 duced universal distress. It is the greatest 
 calamity that has afflicted the human race for 
 more than five hundred years. The bondhold- 
 ers, annuitants and others enjoying fixed in- 
 comes are being unjustly benefited by this 
 monetary revolution at the expense of all 
 other classes of society. 
 
 Thus it is shown that open mints for the un- 
 limited coinage of all the gold and all the sil- 
 ver brought to them to be converted into 
 money without limitation or discrimination 
 against either, and the right of the debtor to 
 pay his debts and taxes in the coin of either 
 metal at his option, is bimetallism. 
 
 In preceding pages it was shown that 
 money is the creation of law, and that every 
 sovereign state may create full legal-tender 
 money by the use of metal, paper, or any other 
 suitable material upon which to stamp or print
 
 36 
 
 the sovereign mandate. It may be asked, if 
 paper will answer the same purpose as the 
 precious metals, why not use paper and avoid 
 the cost of mining for gold and silver? The 
 reply is, that the precious metals, so long as 
 the mines are reasonably productive, furnish a 
 more reliable, stable and certain method of 
 regulating the volume of money than any rule 
 or theory advanced for limiting or regulating 
 such volume bj^ legislative enactment. Gold 
 and silver have been used as money metals 
 since prehistoric times. When the mines were 
 productive, ancient civilization developed; ai'il 
 when the mines v/ere exhausted barbarism fol- 
 lowed the shrinking volume of money with as 
 much certainty as night followed day. 
 
 In the zenith of her power Rome had, ac- 
 cording to the estimate of W. Jacob, F. R. S., 
 and the historian Gibbon, about .|1,800,000,000 
 of gold and silver coin in actual circulation. 
 The mines became exhausted, and the produc- 
 tion of the precious metals for about fourteen 
 hundred years was very limited. The supply of 
 gold and silver in the country which had com- 
 prised the Roman Empire v;as reduced during 
 that long money famine from eig-teen hnndred
 
 37 
 
 millions to less than one hundred and fifty 
 millions, and the descendants of the warriors 
 and statesmen of the great and glorious civili- 
 zation which was strangled by fourteen hun- 
 dred years of contraction became feudal slaves 
 and were sold with the land. 
 
 Modern civilization had its origin m tue 
 discoveries of gold and silver in Mexico and 
 South America. The supply of the two met- 
 als was continuous for about three hundred 
 years, and a new civilization was created. At 
 the beginning of the present century the Span- 
 ish-American wars created a money famine by 
 interrupting mining in Mexico and South 
 America. From 1810 to 1850 all Europe was 
 disturbed by anarchy and civil war, and af- 
 flicted by poverty and want. The United 
 States was relieved to a great extent from the 
 horrors of the money famine, in the first half 
 of the present century, by the great Missis- 
 sippi Valley, in which our generous Govern- 
 ment gave a farm to every man who would 
 take, occupy, and improve it. Millions of 
 hardy pioneers from Europe sought homes in 
 the marvelous valley of the West, bringing 
 with them their money and their belongings, 
 
 *>.
 
 38 
 
 and by their labor and enterprise added enor- 
 mously to the prosperity of the United States, 
 and mitigated in this country the miseries of 
 the money famine which sorely afflicted the 
 people of the Old World. 
 
 The gold from California and xVustralia 
 marked a new era in the progress of civiliza- 
 tion, set in motion the productive agencies of 
 the human race, revived commerce, stimulated 
 learning and science, inspired invention, and 
 was the means of accumulating greater wealth 
 in twenty-five years than in any preceding 
 century. The automatic rule of allowing the 
 volume of the circulating medium to be regu- 
 lated by the supply of the two metals worked 
 to perfection. When there v>as a slight de- 
 crease in the output of gold, the discovery of 
 the great Comstock lode revived silver mining 
 throughout the world, and if the product of 
 both metals had been used according to the 
 laws of the better days of the Republic and 
 the universal custom for thousands of years, 
 there would have been no shrinkage of the vol- 
 ume of money, no increase in the purchasing 
 power of dollars, or decrease in the value of 
 property, and the progress and prosperity of
 
 39 
 
 the wonderful period of humau advancement 
 between 1850 and 1873 would have been in- 
 definitely continued. 
 
 The power of the Government to create 
 money by the upe of paper is undoubted, but 
 the experiment of a proper limitation of the 
 volume of money by human laws, without the 
 automatic rule of regulating that volume by 
 Nature's supply of the two metals, is yet un- 
 tried. The apprehension that an undertaking 
 by the Government to substitute legislation for 
 the automatic rule of regulating the volume of 
 money might result in ruinous inflation or de- 
 Btructive contraction, is at present an insur- 
 mountable obstacle to dispensing with the use 
 of gold and silver. The abandonment of the 
 automatic rule by the demonetization of silver 
 has created a necessity for further action. If 
 only gold is to be used, the certainty in such 
 case of re-establishing feudal slavery in Eu- 
 rope and America and destroying every ves- 
 tige of free institutions, ought to induce all 
 intelligent and patriotic citizens to make a 
 desperate effort to free themselves from the 
 chains of financial bondage. If silver is de- 
 prived of its money functions, gold must share
 
 40 
 
 the same fate, and paper must be substituted 
 for both to rescue civilization from decay. 
 
 The experiment of abandoning the precioua 
 metals for use as money is so full of doubt and 
 danger, and the gold standard is such an omi- 
 nous precursor of ruin and destruction, that an 
 intelligent people fear to adopt either alterna- 
 tive. This momentous question is brought to 
 the attention of the people by the grinding 
 effect of continually falling prices. They com- 
 pare the prosperity their ancestors enjoyed 
 while the mints were open to both metals, and 
 the opportunities which then existed for ac- 
 quiring comfort and independence, with the 
 bankruptcy, want, and poverty of all who are 
 now so unfortunate as to depend upon produc- 
 tive enterprises for a livelihood. They are 
 certain of relief if they reverse the legislation 
 which caused their calamities, and re-enact the 
 coinage laws of Jefferson and Hamilton. They 
 must take the Constitution and the uniform 
 custom for thousands of years for their guide 
 if they would find the way to relief.
 
 41 
 
 RATIO. 
 
 The qnantity of gold compared with the 
 quantity of silver used to make a given amount 
 of money is called the ratio between the two 
 metals. This ratio is purely arbitrary and de- 
 pends entirely upon the discretion of the law- 
 makers. It is to be remembered that the ag- 
 gregate weight of the silver in the world is 
 about 15^ times as much as the aggregate 
 weight of the gold in the world. This singular 
 coincidence has led many to suppose that the 
 prevailing ratios of the various nations of the 
 civilized world are ordained by nature. Bi- 
 metallists do not base their insistence that the 
 mints of the United States ought to be open 
 to the coinage of gold and silver at the ratio 
 of 16 to 1 upon any natural phenomena. They 
 are in favor of 16 to 1 because it is the estab- 
 lished ratio now in existence under the laws 
 of this country, and upon the faith of which 
 ratio the obligations of the Government are 
 predicated. The act of July 14, 1870, under 
 which every bond now outstanding has been 
 issued, provides that the public debt incurred
 
 42 
 
 under the act shall be paid in coin of the 
 standard value of that date. A change of ra- 
 tio would be in derogation of every contract 
 now outstanding between the Government 
 and its creditors. 
 
 No good reason earn be given for a change 
 which would require more silver to be put in 
 the silver dollar than it now contains. The 
 fact that there are about $4,000,000,000 of 
 silver coin now doing duty as money at a 
 ratio approximating 15^ to 1 must be duly 
 considered. If the commercial value of silver 
 bullion, which is now denied the right of mint- 
 age, should be made the basis of a ratio, it 
 would require all the silver coin in the world 
 to be recoined to correspond with the new ra- 
 tio, which would contract the world's money 
 not less than two thousand millions. Such 
 contraction would be of the same vicious char- 
 acter as the original demonetization of silver. 
 It would rob the debtor for the benefit of the 
 creditor, further paralyze enterprise, and in- 
 crease the existing poverty and distress in the 
 world. 
 
 It is constantly objected by the gold mono- 
 metallists that the United States alone cannot
 
 43 
 
 maintain the parity between the two 
 metals at the ratio of 16 to 1, and 
 that, therefore, that ratio must be aban- 
 doned. The Government has nothing to 
 do with parity other than to make equal 
 laws. Parity between the different kinds of 
 money in circulation does not depend upon the 
 cost of the material of which they are made, 
 but depends exclusively upon tlieir relative 
 functions. Every full legal-tender dollar will 
 perform the same service, and is just as val- 
 uable as every other full legal-tender dollar in 
 circulation. Nothing can make a difference in 
 the value of full legal-tender money but a dis- 
 crimination in favor of the coin of one metal 
 and against the coin of the other. If one kind of 
 money has useful functions v/hich another kind 
 of money does not possess, its value might, and 
 almost certainly would, be greater than the 
 money less favored by law. 
 
 The suggestion that the silver dollar would 
 be a 50-cent dollar under free coinage at the 
 ratio of 16 to 1 is erroneous. The United 
 States has issued Treasury notes from time to 
 time since 1813 and made them receivable for 
 all public dues. Every one of such notes,
 
 44 
 
 which was receivable for Government dues, 
 has at all times been at par with coin. Coin 
 and Government notes receivable for Govern- 
 ment dues never parted company until a pro- 
 vision was inserted in the legal-tender act 
 repudiating the greenbacks to the extent of re- 
 fusing to receive them for duties on imports 
 and interest on the public debt. 
 
 There are nearly five hundred million stand- 
 ard silver dollars doing duty as money on a 
 par with gold, either in actual circulation or in 
 circulation by their representatives, silver cer- 
 tificates. It is stated that this is because the 
 amount of such dollars does not exceed five 
 hundred millions. Attention is called to what 
 Secretary of the Treasury Sherman, the father 
 of the gold standard, said on this subject in 
 his report of 1879, page 14: 
 
 'The total amount of silver dollars coined 
 to November 1, 1S79, under the act of Febru- 
 ary 28, 1878, was |45,206,200, of which |13,- 
 002,842 was in circulation, and the remainder, 
 $32,203,358, in the Treasury at that time. No 
 effort has been spared to put this coin in cir- 
 culation. Owing to its limited coinage it has 
 been kept at par; but its free coinage would 
 soon reduce its current value to its bullion 
 value, and thus establish a single silver stand- 
 ard."
 
 45 
 
 The purchase and coinage of silver bullion 
 into standard dollars continued for about four- 
 teen years after this declaration of Secretary 
 Sherman, and the amount of silver coin was 
 increased more than ten-fold without the 
 slightest depreciation in the purchasing power 
 of the silver dollar. This statement of Secre- 
 tary Sherman is cited because it is one of the 
 stock arguments of the advocates of the gold 
 standard, which, like all their other conten- 
 tions, is in direct opposition to existing facts. 
 
 Mr. Cleveland, after his election and before 
 his inauguration, on February 24, 1885, ad- 
 dressed a letter to Hon. A. J. Warner and 
 others, then Representatives in Congress, re- 
 questing an immediate repeal of the Bland- 
 Allison act providing for the purchase of not 
 less than two million nor more than four mill- 
 ion dollars' worth of silver bullion per month 
 to be coined into standard dollars. In that 
 letter, among other things, he said: 
 
 "I hope that you concur with me and with 
 the great majority of our fellow-citizens in 
 deeming it most desirable at the present junc- 
 ture to maintain and continue in use the mass 
 of our gold coin ns well as the mass of silver 
 already coined. This is possible by a present
 
 46 
 
 suspension of the purchase and coinage of sil- 
 ver. I am not aware that by any other method 
 it is possible." 
 
 The Bland-Allison act remained on the stat- 
 ute book, and the purchase and coinage of sil- 
 ver continued under it for more than five years 
 before it was repealed, and the so-called Sher- 
 man act which provided for the purchase and 
 use for the purpose of money of not less than 
 four and a half million ounces of silver bullion 
 each month was substituted therefor. The 
 amount of silver coin was much more than 
 doubled after Mr. Cleveland declared that 
 there was no possible way of maintaining and 
 continuing in use our gold coin except by sus- 
 pending the purchase and coinage of silver. 
 Predictions of all the leading goldites in the 
 land to the same effect might be cited. They 
 told the people every day while the United 
 States was purchasing and coining silver that 
 the limit had been reached, and that if any 
 more silver were coined the value of the silver 
 dollar would fall to the current price of silver 
 bullion. The fact that they have made these 
 false predictions for more than twenty years, 
 and continue to make them, must be attributed
 
 47 
 
 to their ignorance or to their desire to deceive 
 the public. 
 
 There is another grossly absurd dogma which 
 goldites constantly preach and teach. This 
 also appears in the Cleveland letter, which 
 is said to have been the first financial docu- 
 ment ever written for Mr. Cleveland to sign. 
 Mr. Cleveland argued in that letter that the 
 Bland act must be repealed, or gold would be 
 withdrawn, the volume of money unprecedent- 
 edly contracted, and the wages of labor scaled 
 down by their payment in depreciated money. 
 To avoid doing him an injustice the precise 
 language he used in predicting the results of 
 the refusal to repeal the Bland act will be 
 quoted. He said: 
 
 "Gold would be withdrawn to its hoarding 
 places, and an unprecedented contraction in 
 the actual volume of our currency would speed- 
 ily take place. Saddest of all, in every work- 
 shop, mill, factory, store, and on every rail- 
 road and farm, the wages of labor, already 
 depressed, would suffer still further depression 
 by a scaling down of the purchasing power 
 of every so-called dollar paid into the hands 
 of toil." 
 
 "Unprecedented contraction in the actual 
 volume of our currency" would hardly scale
 
 48 
 
 down the purchasing power of the dollar. If 
 contraction does not increase the purchasing 
 power of the dollar, what does? 
 
 The hallucination which would induce a 
 President of the United States to believe that 
 unprecedented contraction, creating dear 
 money, and the robbery of thc^ laborer by 
 cheap money in circulation, could occur at one 
 and the same time, accounts for many of the 
 absurd vagaries of the advocates of so-called 
 "sound money." But strange as it may ap- 
 pear, this absurd paradox has been iterated 
 and reiterated by the so-called economists of 
 our colleges, the financial mountebanks of the 
 commercial press, and the controllable politi- 
 cians for the last twenty years. 
 
 These examples of the false predictions of 
 the goldites have been cited to show how little 
 reliance can be placed upon their arguments 
 against the unlimited coinage of silver at the 
 ratio of 16 to 1, because the stock argument 
 they always use, when driven to the wall by 
 the force of well-known facts, is that the coin- 
 age ratio must be changed to correspond with 
 the commercial ratio of the two metals. They 
 Beem entirelv oblivious of the fact that under
 
 49 
 
 equal coinage the commercial ratio followed 
 the coinage ratio without material variation 
 for thousands of years previous to 1873. 
 While the mints were open no one would sell 
 silver bullion or gold bullion for a less 
 amount of money than it would produce at the 
 mint. It was impossible for either silver or 
 gold to decline in price below the coinage 
 value, because there was an unlimited market 
 for it at that price. Nor could the commercial 
 price of either of the metals rise to any appre- 
 ciable extent above the coinage value, because 
 in that case its excessive price would be pro- 
 hibitory and the demand would fall on the 
 cheaper metal until the differing commercial 
 prices of the two metals became equalized. 
 
 The mode adopted by the goldites for the 
 (wetensible purpose of restoring the parity be- 
 tween the two metals is like going down a 
 mountain to reach the summit. It was the 
 Don-use of silver which reduced the demand 
 and created the disparity between the bullion 
 value of the two metals. The argument that 
 the non-use of silver and the unlimited use of 
 gold sustains paiity is a transparent fallacy 
 and ought not to mislead the people.
 
 50 
 
 The slightest reflection will show that the 
 non-use of a commodity destroys the demand 
 and reduces the price. Would the price of 
 wheat be advanced if everybody should stop 
 eating wheat bread? Yet the goldites say 
 that the way to raise the price of silver to a 
 parity with gold is by the utter disuse of silver 
 and the use of gold alone. 
 
 The Harrison-Cleveland combination ex- 
 cused the breach of trust of which they were 
 guilty in refusing to pay out silver according 
 to law and the contract with the bondholders, 
 by contending that such use of silver would de- 
 stroy the parity, and that the only way to main- 
 tain the parity is to buy gold at any price and 
 pay it to the Government creditor, and keep 
 the silver in the vaults of the Treasury. They 
 claim to have discovered that the unlimited 
 use of gold and the non-use of silver will make 
 an equal demand for both and maintain the 
 parity. If they were indicted as private par- 
 ties would be for breach of trust in surrender- 
 ing the option of their employers, as the Gov- 
 ernment's option was surrendered to the bond- 
 holders, would a jury acquit them on such an 
 absurd pretext?
 
 51 
 
 MOTIVE FOR DEMONETIZATION. 
 
 The motive for the monetary revolution of 
 1873 was the greed of the owners of bonds and 
 other sources of fixed incomes. The space 
 allotted in this little volume does not permit a 
 detailed account of the various expedients 
 adopted to secure the demonetization of silver. 
 It is sufficient for the present purpose to state 
 (and it cannot be successfully contradicted), 
 that the coinage of silver was suspended with- 
 out the knowledge or consent of the American 
 people, and without the knowledge of the peo- 
 ple of any other civilized country. The scheme 
 was devised and the legislation procured exclu- 
 sively in the interest of those who were to be 
 benefited b}- increasing the purchasing power 
 of money and reducing the price of property. 
 The disaster to productive enterprises and the 
 injustice to the debtor were not considered. 
 Blind greed kept from the view of the inter- 
 ested parties everything but the advantages 
 they would gain by the measure. 
 
 An increase in the purchasing power of 
 money in cash transactions is comparatively
 
 52 
 
 unimportant; but when payment is deferred, 
 or money is borrowed to be returned at a fu- 
 ture time, injustice will be done unless the 
 money in circulation bears the same relation 
 to the property for sale at the time of payment 
 as it did at the time the obligation was cre- 
 ated. More injustice is done by dishonest 
 changes in the measurement of time contracts 
 than by all other methods by which the earn- 
 ings of the masses are transferred to the 
 classes without consideration. Every other 
 contrivance whereby the cunning of the few 
 takes advantage of the many sinks into insig- 
 nificance when compared with the wholesale 
 spoliation which is practised through the ma- 
 nipulation of the volume of money in order to 
 change the value of debts. 
 
 The manipulators who make war on the peo- 
 ple by contraction may be likened to the in- 
 vaders of the ancient empires where cultiva- 
 tion could only be prosecuted by irrigation. 
 As the legions of Greece and Rome, each in 
 turn, desolated the empires of the East by de- 
 stroying the reservoirs, canals and aqueducts 
 which watered and fertilized their fields, while 
 pillaging and robbing the people, so they des-
 
 53 
 
 troy the instrument of future production who 
 reduce the volume of money to increase the 
 obligation of contracts. 
 
 In 1873 the supply of legal-tender money in 
 the world consisted of all the gold and silver 
 brought to the mints for coinage, and more 
 than $100,000,000,000 of obligations were 
 then in existence predicated upon such 
 supply. The demonetization of silver cut 
 off half the supply, while the demand, 
 by the growth of population and busi- 
 ness, was constantly increasing. The de- 
 mand is now more than double that of twenty- 
 five years ago, as compared with the supply of 
 coin, and consequently the purchasing power 
 of each dollar has been enhanced more than 
 100 per cent. Much the larger part of the 
 world's indebtedness existing when silver was 
 demonetiezd is still unpaid. While some of it 
 may have been liquidated, the aggregate has 
 been largely increased by adding interest to 
 principal. The national debts of the world 
 which, twenty-five years ago, were about f22,- 
 000,000,000, now aggregate about |30,000,000,- 
 000. It cannot be denied that the national 
 debts and all other indebtedness which existed
 
 54 
 
 at the time silver was demonetized were predi- 
 cated upon the quantity of money furnished by 
 gold and silver, and that the debtor had the 
 option to pay in money of either metal. 
 
 The suggestion that a large amount of the 
 present indebtedness of the civilized world was 
 contracted on a gold basis is a mistake. We 
 have not reached a gold basis, and will not 
 until the $3,600,000,000 of full legal-tender sil- 
 ver shall have been deprived of its money 
 functions and the business of the world re- 
 duced to the narrow basis of gold alone. While 
 the approach to the single gold standard con- 
 tinues, the so-called gold basis will be con- 
 stantly changing and always in the same direc- 
 tion. The conversion of Austrian silver bonds 
 into gold bonds during Cleveland's adminis- 
 tration greatly enhanced the purchasing f)0wer 
 of gold by increasing the demand. The adop- 
 tion of the gold standard by Japan had the 
 jane effect. It is now seriously proposed to 
 feuy gold enough to put India on a gold basis. 
 India has about |1,000,000,000 of full legal- 
 tender silver. The amount of gold which 
 would be required to make the change in India 
 alone would consume the entire output of gold
 
 55 
 
 available for coinage for more than a decade. 
 The grinding process of requiring one nation 
 after another to sell its silver coin and buy 
 gold coin keeps the purchasing power of gold 
 constantly increasing and the price of prop- 
 erty constantly falling. 
 
 When we consider the world's indebtedness 
 of every kind, public and private, now esti- 
 mated at about $150,000,000,000, the tremen- 
 dous loss to the debtor and gain to the creditor 
 by the constant increase of the purchasing 
 power of money, surpasses the wildest imagi- 
 nation. It is difficult to distinguish the moral 
 culpability of tampering with the volume of 
 money, by which time contracts are measured, 
 from the guilt of forgery by changing the fig- 
 ures on bank checks. Why should the former 
 offence be called honest while the latter is de- 
 nounced as a felony? 
 
 If the dealers in gold are utterly oblivious 
 of their own wrong-doing, or so thoroughly ab- 
 sorbed by avarice that the suffering of the 
 masses are wholly immaterial to them, they 
 will do well to reflect upon the possible retribu- 
 tion in store for them and their posterity. Se- 
 curity for property rests on justice and equal-
 
 56 
 
 itj. The injustice of changing the measure of 
 time contracts by a change in the money 
 standard is so flagrant, so far-reaching, so de- 
 structive of the peace and happiness of the 
 great mass of the human race that it weakens 
 confidence, creates envy and distrust, embit- 
 ters the masses against the classes, disturbs 
 the foundations of society, and threatens the 
 stability of governmental authority.
 
 57 
 
 MONEY IS NATIONAL. 
 
 The expressions "money good all over the 
 world," "the best money of the world," and the 
 like, emanating from leading statesmen and 
 financiers, are misleading. There is no money 
 good all over the world. No money can pos- 
 sess money functions outside of the country of 
 its creation, unless they are conferred upon it 
 by the local law of the country to which it is 
 taken. We recall but a single instance where 
 an attempt has been made to create interna- 
 tional money. The so-called Latin Union, 
 consisting of France, Greece, Italy, Belgium, 
 and Switzerland, entered into a treaty in 1865 
 whereby each of these governments was bound 
 to treat the coinage of all the others as full 
 legal-tender within its jurisdiction. It re- 
 quired the law of each of these governments, 
 or a treaty having the force of local law, to 
 make creditors receive this money outside of 
 the country in which it was coined. 
 
 ' It is not unusual, however, for a government 
 to create money out of the coins of other na- 
 tions by making thf m legal-tender. This was
 
 58 
 
 done by the United States in 1793, by the act 
 which made all the foreign gold and silver 
 coins legal-tender in this country, according to 
 their weight and fineness. In consequence of 
 that act the great mass of the silver coin cur- 
 rent in the United States previous to 1857 was 
 foreign coin. Spanish-American countries 
 from which we obtained our silver charged an 
 export duty on silver bullion and made it an 
 inducement for the owners of it to take it to 
 their mints before exporting it to the United 
 States; consequently, most of the silver re- 
 ceived in the United States was in the shape of 
 coin. The coinage of the United States was 
 principally confined to the recoinage of worn- 
 out or mutilated foreign coins. In February, 
 1857, Congress passed an act declaring that 
 foreign coins should no longer be a legal- 
 tender in this country. This deprived the 
 banks of coin for the redemption of their 
 notes, and was the principal cause of the panio 
 of 1857. 
 
 It is seen that the foreign coins which were 
 once current in this country obtained their 
 money function from the laws of the United 
 States, and not from the laws of any foreign
 
 59 
 
 country. The suggestion that one country 
 can, by its laws, make money which will be 
 good, as money, in any other country, ought 
 not to require contradiction, and would not be 
 noticed if the assertion that we must have 
 "money good all over the world" did not imply- 
 that our financial legislation must be in con- 
 formity with the legislation of other countries, 
 which, if desirable, would be impracticable be- 
 cause the laws of nations are as diverse and 
 conflicting on the money question as on any 
 other matter of municipal legislation. Neither 
 the gold coin nor the silver coin of the United 
 States is money outside of the jurisdiction of 
 this country. 
 
 It is a mistake to suppose that trade and 
 commerce are carried on between countries by 
 the use of money as such. Money outside of 
 the jurisdiction creating it is as much a com- 
 modity as wheat, pork, or beef. Gold and 
 silver, whether coined or uncoined, are sold in 
 foreign countries by weight. The value of 
 money, as such, all over the world is regulated 
 by its purchasing power in the country cre- 
 ating it, less the difference of exchange. If it 
 is stamped or printed on a material in great
 
 60 
 
 demand in other countries for coinage into 
 money, such coinage demand may affect the 
 price of the bullion in foreign markets as a 
 commodity. The mints of the commercial 
 world being generally open to convert gold 
 into coin without charge for mintage, the price 
 of gold bullion in foreign markets is the same 
 as its coinage value. Money made of silver 
 or paper must be sent back to the country 
 creating it, where it will pay debts and taxes, 
 and, consequently, such money is always at a 
 discount equal to the difference of exchange. 
 It is the business of exchange to convert the 
 money of one country into the money of an- 
 other country. Every banking institution do- 
 ing an exchange business will inform a cus- 
 tomer without delay how much American 
 money it will take to buy a thousand rubles 
 in Russia, a thousand rupees in India, or a 
 thousand yens in Japan,and the banks engaged 
 in the business of exchange in those countries 
 will as readily inform their customers how 
 much of their money it will take to buy a thou- 
 sand American dollars in the United States. 
 
 Foreign commerce consists of the exchange 
 of commodities. Everything that goes from
 
 61 
 
 one country to another through the channels 
 of commerce goes for the purpose of exchang- 
 ing the commodities of one country for the 
 commodities of another. It requires two 
 transactions to make a foreign exchange, the 
 same as it does to exchange commodities at 
 home. Our goods are sent to France, for ex- 
 ample, and sold for French money. It makes 
 ho difference whether we send gold, silver, cot- 
 ton, or pork. When we have acquired French 
 money the transaction of exchange is only half 
 consummated. We then buy French goods 
 with the French money which we have thus 
 acquired. This double transaction completes 
 the exchange of our commodities for the com- 
 modities of France. The only interest we have 
 in French money is to know that it will buy 
 French goods and how much, and the only 
 interest the French people have in our money 
 is to know that it will buy American goods and 
 how much. 
 
 There can be no doubt that gold as a com- 
 modity is a convenient export on account of 
 the extensive demand for it in foreign coun- 
 tries for coinage into money. Besides, we know 
 in advance how mucli mouey our gold bullion
 
 62 
 
 will fetch in foreign markets because its price 
 is already fixed b}' their mint laws. This was 
 equally true of silver for thousands of years 
 previous to 1873. The price of all other kinds 
 of money must be determined by market con- 
 ditions independent of local laws. The price 
 of silver was substantially the same in all 
 countries, while enough mints were open to 
 the unlimited coinage of both metals to main- 
 tain the bimetallic tie and make the coin of 
 the two metals practically one money. 
 
 The mint privileges of gold in foreign coun- 
 tries, which make gold bullion equivalent to 
 coin in their markets, does not add to its de- 
 sirability as a circulating medium in the coun- 
 tries where it is coined. When paper and sil- 
 ver are endowed with the money function they 
 are more reliable and safer for use as money 
 than gold. Take, for example, the silver coins 
 and silver certificates of the United States. 
 They perform all the functions of money at 
 home which gold can perform, and we have 
 seen that our gold coin has no money functions 
 abroad. The habits of silver and paper money 
 -are much better than the habits of gold money. 
 They are domestic in their nature and are
 
 63 
 
 found at home when required for use. They 
 do not run away and get locked up by the 
 financial poundmasters on the other side of the 
 Atlantic. All the people know how faithfully 
 silver certificates stay at home and circulate 
 from hand to hand. No raids on the Treasury 
 are made with them. They are the best pos- 
 sible money for every purpose, except manipu- 
 lating the market and stock jobbing. 
 
 The dealers in gold are very much opposed 
 to silver certificates, or any other kind of 
 money which they cannot impound in foreign 
 countries, and then compel the United States 
 to issue gold bonds with which to buy it back 
 and bring it home. When our gold goes to 
 England it is converted into English coin 
 without charge, and becomes English for both 
 commercial and war purposes. The same is 
 true when it goes to France and Germany; it 
 becomes French or German coin as readily 
 as it becomes English coin, through the natu- 
 ralization laws of the mints of those countries. 
 All other kinds of money except gold must 
 necessarily have a home and a country. No 
 kind of money but gold can be naturalized in 
 foreign mints and made an enemy of the
 
 64 
 
 United States. Our laws creating mou(*j are 
 known and recognized all over the world, and 
 any money current in the United States will 
 sell in any foreign country for its value iu this 
 country, less the difference of exchange. No 
 money except gold will desert the flag and stay 
 abroad and fight the battles of other countries. 
 Gold will never be the best money that can 
 be made until there is some law to punish it 
 for desertion. 
 
 Various countries have at different times 
 put an export duty on their gold coin to keep 
 it at home. Others have charged seigniorage 
 on coining, thereby making gold coin more 
 valuable for home use than for export. Gold 
 is such a confirmed traitor that every civil- 
 ized nation in the world has been compelled to 
 banish it in times of great emergency. Every 
 modern state has been compelled in time of 
 war to use its sovereign power to create money 
 which would stay at home and fight its bat- 
 tles. No great war involving the existence of 
 a nation has ever been fought with gold or 
 on a gold basis. Silver, while the mints were 
 open, might be exported to the injury of the 
 country coining it, but not to the same extent
 
 65 
 
 as gold could be exported. It was a very 
 much better money than gold in time of war, 
 on account of its bulk, its denomination, and 
 the distribution of its coins. It could not be 
 easily gathered up into great hoards or trans- 
 ported. Gold was always the money of the 
 speculative class, who seldom fight the bat- 
 tles of their country. While the mints were 
 open, silver was the money of those who 
 created the wealth of a nation in time of peace 
 and fought its battles in time of war. 
 
 It is almost impossible to exaggerate the 
 injuries done to a country by the wholesale ex- 
 port of its money. The export from this country 
 of about a hundred millions of gold to Austria 
 in 1892-3, to form a reserve to enable that 
 country, through the Rothschilds syndicate, 
 to convert |2,400,000,000 of Austrian silver 
 bonds into $2,800,000,000 of gold bonds, was 
 most disastrous. The panic which it pro- 
 duced injured the people of the United States 
 thousands of millions, and its baneful effects 
 are still everywhere visible. If our Govern- 
 ment had exercised its stipulated option to 
 redeem its notes either in silver or gold, by 
 refusing gold for export, no gold would have
 
 66 
 
 been exported, and the panic of 1893 would 
 not have occurred. What stronger argument 
 can be made against an exclusively gold 
 "money good all over the world," or, which 
 amounts to the same thing, money made of a 
 material convenient for export and which can 
 be converted into the money of all countries 
 without loss, than the object lesson of the 
 panic of 1893 caused by the export of our 
 gold? 
 
 The contention that gold is necessary to 
 carry on foreign commerce is one of the false 
 and deceptive dogmas of the gold monometal- 
 Tists. While gold was at a premium, and the 
 Indian mints were open to the coinage of sil- 
 ver, Indian commerce with foreign countries in- 
 creased without a parallel. The year preced- 
 ing the suspension of coinage in India that 
 country exported sixty million bushels of 
 wheat, fifty-three million dollars' worth of raw 
 cotton, fifty million dollars' worth of textile, 
 fabrics, and vastly more jute and opium than 
 ever before. She paid eighty million dollars 
 of gold interest in London without increasing 
 taxation. Since the suspension of silver coin- 
 age her exports have declined, her foreign debt
 
 67 
 
 has been greatly augmented, and millions of 
 her people have starved to death for want of 
 money to buy food, although there was abun- 
 dance of rice to be had for a cent a pound and 
 plenty of wheat in the market at a less price 
 than the cost of production in this country. 
 Chile and Japan are to-day suffering all the 
 miseries of financial depression on account of 
 the suspension of the coinage of silver and the 
 adoption of the gold standard, while Mexico, 
 with her mints open to the coinage of both 
 metals, presents an object lesson of prosperity 
 surpassing the success of any other country in 
 the nineteenth century, when her condition 
 twenty years ago is taken into consideration. 
 
 A foreign demand for the wheat, cotton and 
 other products of the farm enhances the 
 price of such commodities, stimulates their 
 production, increases the demand for labor, 
 brings money into the country, and furnishes 
 a market for the products of the mills, facto- 
 ries, foundries, and all other industrial estab- 
 lishments; whereas a foreign demand for 
 gold, which takes away our money, reduces 
 the price of all our commodities, bankrupts the 
 debtor, and produces stagnation, misery and 
 want.
 
 68 
 
 The pathetic appeal of our ex-Presidents in 
 behalf of the laboring masses of this country 
 for "money good all over the world" seems to 
 assume that laboring men do their marketing 
 in Europe. These monometallists would do 
 themselves more credit if they would frankly 
 tell the people that gold for export would 
 create a scarcity of money at home and make 
 it more ditficult for them to obtain any kind 
 of money with which to pay their bills at the 
 grocery. 
 
 The historian of the future will be bewil- 
 dered when he compares the financial teach- 
 ings of Aristotle with the dogmas of the gold 
 monometallists of our time, who contend that 
 the commodity gold is money in and of itself, 
 and that good money cannot be created by the 
 use of any other material. If he should attempt 
 to make dates correspond with the condition 
 of civilization, he would probably assign the 
 teachings of the gold monometallists to a pe- 
 riod long anterior to the building of the pyra- 
 mids, and the teachings of Aristotle to the 
 age of railroads, telegraphs, telephones, and 
 other marvelous inventions which now con- 
 trol the forces of nature.
 
 69 
 
 PARITY. 
 
 All the commercial nations of the world con- 
 ducted their commerce on the bimetallic stand- 
 ard previous to 1873, although some of them 
 did not coin both metals; but the nations 
 which did coin both metals maintained the 
 parity between gold and silver at the ratio of 
 about 15| to 1 throughout the world. In the 
 language of the Royal Commission of Eng- 
 land, the coins of the two metals for commer- 
 cial purposes were regarded as one money. 
 The fact that England and Portugal did not 
 coin silver, and that India and other Asiatic 
 countries did not coin gold, did not destroy the 
 bimetallic tie so long as the United States and 
 France and other European countries coined 
 both gold and silver without limitation or dis- 
 crimination against either metal. France, es- 
 pecially, acted as the great clearing-house of 
 the world for gold and silver for more than 
 eeventy years previous to 1873. No one in 
 any part of the world having either gold or 
 silver bullion would part with it for a less 
 amount of money than it would produce at the 
 French mint.
 
 70 
 
 After the United States and France and the 
 other nations of Europe closed their mints 
 against silver there was no commercial na- 
 tion where both gold and silver bullion could 
 be converted into coin for the benefit of the 
 owner. The bimetallic tie which made gold 
 and silver one money for commercial purposes 
 was broken and the value of each metal was 
 regulated by the demand for coinage in the 
 countries which accorded it the privilege of 
 mintage. The demand of the United States 
 and Europe for the purpose of coinage fell on 
 gold alone, while the demand for coinage pur- 
 poses of Asia, Mexico and South America 
 nearly all fell upon the white metal. There 
 was a greater demand for gold in the gold- 
 standard countries in proportion to the supply 
 of gold than there was for silver in the silver- 
 standard countries in proportion to the sup- 
 ply of silver. There was no great national 
 clearing-house to maintain the bimetallic tie 
 and the bullion value of the two metals was 
 reguJated by the demand for each in proportion 
 to the supply. The inadequate supply of gold 
 in the gold-standard countries has raised the 
 price of that metal fully one hundred per cent.
 
 71 
 
 above the level of prices for commodities, but 
 the demand for silver in the silver-standard 
 countries has not exceeded the supply as 
 shown by the stability of general prices in 
 those countries. 
 
 The rupee in India, from 1873 to 1893, when 
 its coinage was suspended, was as stable in its 
 value or purchasing power as any money 
 which ever circulated. It upset the theories 
 of the empirics of the gold-standard school 
 because it refused to fluctuate, and the general 
 level of prices, expressed in rupees, remained 
 substantially stationary. They called it the 
 "perverse rupee," because its purchasing 
 power was substantially the same while the 
 mints of India were open to the unlimited coin- 
 age of silver. But the rise in the purchasing 
 power of gold in the gold-standard countries, 
 while the purchasing power of silver remained 
 stationary in the silver-standard countries, 
 produced a difference of exchange. This dif- 
 ference of exchange has been constantly in- 
 creasing as one country after another demone- 
 tized silver and joined the gold standard coun- 
 tries, thereby enlarging the demand for gold 
 and decreasing the demand for silver. If :i
 
 72 
 
 sufiQcient number of the commercial nations 
 now on the gold standard would open their 
 mints to silver and abandon gold to equalize 
 the demand for the two metals in proportion 
 to the supply of each, parity would be restored, 
 but it would probably be impossible to main, 
 tain such parity without the bimetallic tie 
 which some great commercial country would 
 afford if its mints were open to the unlimited 
 coinage of both metals. 
 
 Without a bimetallic nation to act as a 
 clearing-house of exchange the relative value 
 of the two metals would fluctuate with every 
 increase of demand for or supply of either. 
 France performed the function of a clearing- 
 house between the gold-standard countries and 
 the silver-standard countries for seventy-five 
 years, because, as already remarked, no one 
 would part with either silver or gold bul- 
 lion for a less amount of money than could be 
 procured at the French Mint. It is very prob- 
 able that the United States, with double the 
 population and resources of France, by adopt- 
 ing free coinage at the ratio of 16 to 1, could 
 restore the bimetallic tie and maintain sub- 
 stantial parity between the coins of the two
 
 73 
 
 metals. Free coinage of silver in the United 
 States would not only enormously increase the 
 demand for silver and diminish the demand for 
 gold, but it would restore the parity so long as 
 no person would sell his silver bullion or his 
 gold bullion for a less amount of coin than it 
 would produce at the United States Mint. If 
 the parity should not be restored by unlimited 
 coinage of the two metals in the United States, 
 the effect of independent actfon by this coun- 
 try would force enough European countries to 
 open their mints to silver and restore the 
 bimetallic tie to again make the coins of gold 
 and silver one money for commercial purposes 
 throughout the world.
 
 75 
 
 FOREIGN COMMERCE. 
 
 The increase of the supply of money which 
 would result from the unlimited coinage of sil- 
 ver at the established ratio would so stimulate 
 the productions of the farms and workshops 
 of this country as to enormously enhance the 
 demand for the products of labor at home by 
 furnishing money to enable the people to buy 
 and satisfy their wants, now unsupplied. It 
 would at the same time vastly increase our 
 exports, because the natural resources of the 
 United States and the skill and energy of the 
 American people, with a proper volume of 
 money, would enable this country to pay 
 higher wages and advantageously undersell 
 any other country in the world in many, if not 
 all, of the staple products of industry. If, 
 happily, we could obtain a sufficient supply of 
 silver to dispense for the time being with the 
 use of gold for speculative purposes (for we 
 use it for no other), and increase the volume 
 of money sufficiently to raise the level of prices 
 above the European level, we know by the ob- 
 ject lesson furnished by other countries that
 
 7G 
 
 Europe would be forced to open her mints to 
 the coinage of silver or sufifer bankruptcy, 
 while we would be more prosperous than ever 
 before. 
 
 Attention is again called to India, Japan, 
 Chile and Mexico to show the marvelous ad- 
 vantage which silver-standard countries en- 
 joy over those bound down to a shrinking sup- 
 ply of gold coin. Free coinage of silver in 
 India enabled her to develop her industries 
 and prosper, while gold-standard England was 
 closing her factories because she was unable to 
 compete in the Oriental market with the Hin- 
 doos. The advantages which silver-standard 
 India had over gold-standard England are 
 shown by the proceedings of the Industrial As- 
 sociations of the British Isles and the debates 
 in Parliament in favor of legislation to equalize 
 the difference of exchange. The difference of 
 exchange between India and England on ac- 
 count of the enhanced purchasing power of 
 gold was the evil complained of by the busi- 
 ness men and manufacturers of the home gov- 
 ernment, as shown by their petitions to Par- 
 liament. The reason for the suspension by 
 Great Britain of the coinage of silver in India,
 
 77 
 
 and for the futile attempts which are still be- 
 ing made to put India on a gold basis, is the 
 alleged necessity of removing the advantages 
 in trade, commerce and manufacture which 
 the free coinage of silver gave India over the 
 inhabitants of the British Isles. Chile was 
 the most prosperous and progressive of the 
 countries of South America while gold and 
 silver could be coined at her mints on equal 
 terms. In an hour of folly she demonetized 
 silver and has since fallen into depression and 
 commercial decay. Japan was aroused from 
 her sleep of centuries by the stimulus which 
 the free coinage of silver gave her after the' 
 United States and Europe were forced into 
 stagnation by the single gold standard. The 
 difference of exchange which Japan enjoyed in 
 trading with foreign countries, and the impetus 
 which the increasing volume of money gave her 
 home industries, enabled her with marvelous 
 speed to advance to a first-class power. She, 
 like Chile, has fallen by the wayside and 
 adopted the gold standard, and her glory is 
 departing through the agonies of depression 
 and bankruptcy. Mexico, by the free coinage 
 of silver, has risen in twenty years from the
 
 78 
 
 lowest depths of depression and poverty of 
 industries to the enjoyment of a degree of 
 prosperity unknown in the land of the Monte- 
 zumas. 
 
 The contention that an adequate supply of 
 money promotes internal trade and stimulates 
 business at home has never been successfully 
 questioned. A volume of money which will 
 sustain the stability of general prices is just 
 as necessary in foreign commerce as in domes- 
 tic trade. An inadequate supply of money 
 means disaster in trade and commerce, wheth- 
 er foreign or domestic. It means stagnation, 
 enforced idleness and poverty. Successful pro- 
 duction without sufficient money is an 
 impossibility. Want of money is the 
 primary cause of failure. The reason is 
 that money is the instrument of production. 
 Production is conducted through the agency of 
 money. Money buys everything which enters 
 into the production of commodities, including 
 the wages of labor. Money, therefore, must 
 precede the production of commodities both 
 for consumption at home and for export to 
 foreign countries. When the volume of 
 money is sufficient to maintain stabilitv of
 
 79 
 
 prices at home, production will be stimulated 
 and the resources of the country will be de- 
 veloped and made available for foreign mar- 
 kets as well as for domestic use. An inade- 
 quate supply of money retards production and 
 adds to its cost, while an adequate supply of 
 money adds to production and reduces the ex- 
 pense. This is why the Textile Fabric Asso- 
 ciations of England could not compete with 
 the manufacturers of India while the Indian 
 mints were open, and this is why Europe could 
 not successfully compete with the United 
 States under free coinage by independent ac- 
 tion if gold should go to a premium. It is a 
 common saying among the financiers of Eu- 
 rope that the difference of exchange betweeen 
 gold-standard countries and silver-standard 
 countries amounts, in effect, to a bounty on 
 the exports of the silver-standard countries 
 and a tax on their imports.
 
 81 
 
 LABOE INTERESTS. 
 
 Gold monometallists assure the laboring 
 men that it is to their advantage to enhance 
 the purchasing power of money, because it will 
 make property of every kind cheaper. It is 
 true that the dearer money is the cheaper 
 property will be, and that the greater the pur- 
 chasing power of money the more a given 
 amount of money will buy of the necessaries of 
 life. There can be no doubt that people who 
 have fixed incomes — whether derived from in- 
 terest on money, from annuities, or from per- 
 manent employment at fixed salaries — are ben- 
 efited by dear money and cheap property, but 
 cheap labor must be the result of cheap prop- 
 erty. The fact that a laborer, while he has em- 
 ployment, can buy more of the necessaries 
 of life with his wages does not mean that 
 dear money and cheap property are bless- 
 ings to the laboring man. The efforts 
 of labor organizations may for a time 
 keep up the price of day wages, and those who 
 can find work may enjoy a temporary benefit, 
 but the struggle of the employer against
 
 82 
 
 his employes to force down the wages of la- 
 bor to correspond with the general range of 
 prices will never cease until the wages of labor 
 and the prices of property find a common level. 
 The laborers in the United States as a whole 
 are not now receiving within a given length of 
 time fifty per cent, as much in the aggregate 
 as they would if the volume of money in circu- 
 lation were sufficient to develop the resources 
 of the country and create general prosperity. 
 Very few wage-earners are receiving the same 
 wages which they formerly did, and those that 
 have employment are seldom allowed to work 
 full time. There are millions out of employ- 
 ment entirely, and hundreds of thousands, if 
 not millions, of those who find work are 
 forced to be idle a large part of the time. 
 
 The more important consideration, however, 
 affecting the conditions of the laboring masses 
 is the opportunity which an adequate supply 
 of money and stable prices afford to escape 
 from the condition of wage-earners by success- 
 fully entering into industrial pursuits on their 
 own account. A shrinking volume of money 
 cuts off all opportunities for advance- 
 ment among the laboring classes, because, if
 
 83 
 
 the property they produce by their industry 
 and enterprise is constantly growing less and 
 less in value, profits which good prices would 
 afford and without which accumulations are 
 impossible are converted into loss. Falling 
 prices under the gold standard compel consoli- 
 dations and combinations of persons engaged 
 in the same pursuit. Self-preservation com- 
 pels them to combine their efforts and monopo- 
 lize the business, which destroys individual 
 opportunities. Nearly every line of business 
 in the United States has been consolidated 
 into combinations or trusts under the baneful 
 influence of the gold standard, as a means of 
 self-preservation. This has cut off the oppor- 
 tunities which were once open to all to ac- 
 quire wealth and independence. The privi- 
 leges which the people of this country enjoyed 
 to better their conditions and increase their 
 comforts are passing away, and the conditions 
 of the Old World, where the rule is: *'Once a 
 laborer always a laborer, to the remotest gen- 
 eration," are becoming insurmountable obsta- 
 cles to advancement in this boasted land ol 
 equal opportunities.
 
 84 
 
 The condition of the wage-earner does not 
 depend so much upon the rate of wages as 
 upon constant employment for himself and all 
 other wage-earners. Above all, it is of para- 
 mount importance that he shall have an oppor- 
 tunity of acquiring property and becoming a 
 proprietor instead of a mere drudge. 
 
 From every point of view the equal and un- 
 limited coinage of both metals would be bene- 
 ficial. It would increase the volume of legal- 
 tender money, stop falling prices, furnish op- 
 portunities for honest industry, and add to the 
 comfort and happiness of the American people. 
 Under it the United States could maintain a 
 higher level of wages and undersell in foreign 
 markets all the gold-standard countries in the 
 world, because our industries would be freed 
 from the grinding process of a shrinking vol- 
 ume of money. Our productions and our ex- 
 ports would be vastly increased, the demand 
 for labor would furnish employment for every 
 w'illing hand at higher wages, the money which 
 would be paid for labor would be abundant to 
 secure the comforts of life, and the laudable 
 ambition of laboring men to rise above the 
 hard condition of the day laborers of the Old 
 World would be gratified.
 
 85 
 
 BANK CURRENCY. 
 
 The issuance of paper money is the most lu- 
 crative business invented bj the genius of man. 
 When the Government issues a million dollars 
 of full legal-tender money, puts it in the Treas- 
 ury of the United States^ and adds it to the 
 circulation by paying it out for current ex- 
 penses, it saves the tax-payers just one million 
 dollars. When a bank issues a million of 
 currency it puts a million of currency into its 
 vaults and loans it out on good security for as 
 high a rate of interest as possible. This trans- 
 action creates a million of wealth for the bank 
 so long as it remains a bank, because if any 
 portion of the issue should be sent back for 
 redemption, other currency of an equal amount 
 would be immediately issued. The only event 
 in which the assets of the bank can be drawn 
 upon on account of its circulating notes is a 
 failure of the bank. When the bank fails the 
 holders of the notes have a right to find what 
 property they can which belongs to the bank. 
 If they find nothing the entire issue of the
 
 86 
 
 bank will be a dead loss in the hands of inno- 
 cent holders of the notes. 
 
 All the financial plans which the banks have 
 pressed upon the attention of the country for 
 the last few years have had for their object the 
 substitution of bank money for Government 
 money, to give the banks the privilege of is- 
 suing a thousand millions or more of currency 
 and thus add to the wealth they have already 
 accumulated under the national banking law. 
 When they propose to issue gold bonds and 
 buy up the greenbacks, Treasury notes, cur- 
 rency certificates and silver certificates, and 
 sell the silver in the Treasury for what it will 
 fetch, they do not tell the people that their 
 object is to issue bank money to themselves on 
 which to conduct the banking business to the 
 full extent of the Government money retired. 
 The difficulty about the success of such a 
 scheme consists in devising means to conceal 
 the real purpose of the banks. The elaborate, 
 conflicting and ambiguous plan of the experts 
 of the Indianapolis conference, the voluminous 
 speeches, interviews, bills and recommenda- 
 tions of the Secretary of the Treas- 
 ury, and the various other plans de-
 
 87 
 
 vised by the bank party are contrivances 
 to confuse and bewilder the uninitiated, 
 but when reduced to their last analysis two 
 objects will appear: 1. To more thoroughly 
 commit the United States to the single gold 
 standard. 2. To retire Government money by 
 the issuance of gold bonds and to put out in 
 lieu thereof bank money. They are opposed to 
 bimetallism because if both metals were used 
 the volume of coin would interfere with the 
 profits of the banks in issuing money and 
 would deprive them of the power to expand 
 and contract the circulating medium for the 
 benefit of speculation. It must be remembered 
 that when the banks issue money the people 
 get none of it, it all goes into the banks for 
 their own benefit; but when the Government 
 issues paper money it goes into the Treasury 
 and is paid out in lieu of taxes, reducing to 
 that extent the burdens of the people. The 
 contention that bank money is so much better 
 than Government money that the people can 
 afford to make almost any conceivable sacri- 
 fice to secure bank issues in preference to Gov- 
 ernment money, ought not to deceive anyone. 
 It must constantly be borne in mind that
 
 88 
 
 money is the creation of law, and that it is 
 stamped or printed on gold, silver, or paper, 
 the same as municipal laws are printed on pa- 
 per and bound in books. It must also be re- 
 membered that the quality of money depends 
 upon its quantity. Too much inflates prices 
 and injures the creditor; too little forces down 
 prices, paralyzes industries and does injustice 
 to the debtor; just enough is that volume 
 which will maintain the stability of general 
 prices, do justice between debtor and creditor, 
 and secure equality before the law in the busi- 
 ness transactions of the country. 
 
 The contention that bank money is better 
 than Government money will now be exam- 
 ined. Government money is the mandate of 
 lav/ which compels creditors to receive it in 
 payment of debts. It does not depend upon 
 the wealth of the nation any more than does 
 the law inflicting punishment for crime or the 
 law giving a right of action for breach of a 
 contract. Government money is absolutely 
 good money as long as the Government exists 
 and has power to enforce its municipal laws. 
 Bank money cannot be clothed with all the 
 functions of money, and its value depends
 
 89 
 
 upon the solvency of the bank issuing it. The 
 only legal-tender function which bank money 
 has is in the payment of debts due to the 
 bank issuing it. People may be compelled to 
 use bank money when the Government money 
 is withdrawn, but the holders of bank notes 
 must take the risk of the failure of the bank. 
 Some banks remain solvent for a long time, 
 but nearly all of them fail sooner or later and 
 the note-holders sufifer. There was so much 
 distrust of bank issues under the old State 
 bank system that a traveler rarely escaped 
 suffering a discount on his money every time 
 he passed a State line. 
 
 The present so-called bank issues are in fact 
 Government issues, because, if the banks do 
 not redeem them the Government must. They 
 circulate all over the Union, not on the credit 
 of the banks, but on the credit of the Govern- 
 ment. Thus the bankers succeed in drawing 
 the Government into the banking business; 
 but unfortunately the Government owes all 
 the debts while the bankers enjoy all the as- 
 sets in the form of the bank circulation. 
 The banks are under obligations to re- 
 deem their circulation in greenbacks, the same
 
 90 
 
 money which they tell us is not good money. 
 In practice, however, the national banks never 
 redeem their circulation, but send it to remote 
 parts of the country, whence it seldom finds its 
 wav back. The Government alone redeems 
 national bank circulation, which it is com- 
 pelled to do when the bank fails. 
 
 There is another bad feature about the na- 
 tional banking law : The Government does not 
 undertake to protect depositors, but, by allow- 
 ing banks to be incorporated under Federal 
 law, it greatly strengthens their credit and 
 enables them to expand and draw interest on 
 what they owe, to such an extent that when a 
 stringency comes they are compelled to call in 
 their loans and break their customers, if they 
 do not fail themselves. The reserves which the 
 law requires are of very little use. The banks 
 are permitted to send, and do send, nearly all 
 their reserves to banks in a few cities named 
 as reserve cities to be loaned out at a profit. 
 When the country banks call for the reserves 
 they can seldom get them in times of trouble. 
 In the great crash of 1893 all the leading banks 
 of the United States where the reserves were 
 held fonned a combination and refused to
 
 91 
 
 pay the drafts of the country banks or the 
 checks of their own customers. In defiance 
 of law they actually issued over $40,000,000 
 of their own notes, and called them "clearing- 
 house certificates" in which they offered to 
 pay and refused to pay in anything else. 
 
 The evidence that these banking institu- 
 tions co-operated with the Cleveland ad- 
 ministration to bring on the panic of 
 1893 was once abundant and has not 
 been fully suppressed, and their sus- 
 pension of cash payments without objection 
 from the Executive disclosed the dangerous 
 character of the national banking system. If 
 the Comptroller of the Currency had forced 
 the banks in the clearing-house combination 
 to pay their depositors or close their doors, it 
 would have bankrupted the entire country, 
 and the banks themselves would have been 
 destroyed. Notwithstanding the object lesson 
 thus furnished they try to make the people be- 
 lieve that the banks are safer than the Govern- 
 ment. At the time of the collapse of 1893 
 there were outstanding over forty-five hun- 
 dred millions of bank credits, on only five 
 hundred millions of nominal reserves. What
 
 92 
 
 amount of cash the banks held of their de- 
 positors' money to meet this enormous volume 
 of bank credit the country will never know. 
 In other words, how much of the four thousand 
 millions which remained after deducting the 
 legal reserves was purely fictitious, and 
 how much was secured by actual cash, must 
 forever remain a mystery. The habit of loan- 
 ing depositors' money over and over again as 
 it is re-deposited in the bank enormously 
 swells bank indebtedness upon which the bank 
 draws interest. When the crash came the 
 banks, as usual, drew in their loans and ruined 
 their customers. Many of the banks were un- 
 able to save themselves and went down with 
 their customers in one common ruin. 
 
 But because banks are the storm center of 
 panics, and when unrestrained by law are the 
 most dangerous institutions ever organized, 
 they cannot be abolished, as they are a great 
 convenience. They are, in fact, absolutely 
 necessary under our modern methods of doing 
 business. They ought not, however, to be al- 
 lowed to usurp the functions of Government 
 by the issue of money, nor ought they to be 
 allowed to loan more of their depositors'
 
 93 
 
 money than can be done with absolutely safe- 
 ty. The great trouble is that there are too 
 many banks. This makes it necessary for 
 them, in order to make money, to lend their 
 depositors' money over and over again, so as 
 to swell their indebtedness upon which ta 
 draw interest. 
 
 The remedy for scarcity of money sug- 
 gested by President McKinley in his mes- 
 sage was the creation of more banks 
 on smaller capital. This might, and 
 undoubtedly would, create more bank 
 credit, but it would hasten the coming 
 panic of ruin, bankruptcy and liquidation. If 
 there were fewer banks, with larger reserves, 
 the community would be just as well accommo- 
 dated, the depositors better protected, and the 
 calamities of panic less frequent. The banks 
 are entitled to reasonable compensation for 
 the convenience they furnish the business com- 
 munity, but that compensation ought to be con- 
 sistent with safety and fair dealing. The 
 swelling of bank credits to draw interest on 
 what they owe is a great temptation to banks, 
 and it ought to be restrained within reason- 
 able limits by law rigidly enforced. Such re-
 
 94 
 
 strictions on the methods of doing business as 
 would make the banks safe institutions would 
 remove the temptation for the establishment 
 of purely speculative banks and banks on in- 
 sufficient capital, and would enable the really 
 sound institutions to furnish the people all the 
 accommodations required, and at the same 
 time retain in their vaults fifty per cent, of the 
 money of the depositors. 
 
 The organization of banks on conservative 
 ^nd safe principles, with strict Governmental 
 supervision, and the exclusive issuance by the 
 Oovernment of the circulating medium, 
 whether it be gold or silv:;r or paper, required 
 to maintain the stability of prices, would pre- 
 vent panics and secuf 3 prosperity and tran- 
 quility. 
 
 <:iO
 
 UNIVERSITY OF CALIFORNIA AT LOS ANGELES 
 
 THE UNIVERSITY LIBRARY 
 This book is DUE on the last date stamped below 
 
 m^ 4 
 
 tSSS! 
 
 Form I.-9 
 20m-l, '42(8519) 
 
 UNIVERSITY OFCAUFOmiA 
 
 AT 
 
 LOS ANGELES 
 
 T T T"* TT. * -v-kw*
 
 UC SOUTHERN REGIONAL LIBRARY FACILITY 
 
 AA 000 593 790 9 
 
 t 
 
 PLEA«5F DO NOT REMOVE 
 THIS BOOK CARD_j 
 
 
 %0J|]V3JO>' 
 
 University Research Library 
 
 I 
 
 o 
 
 I 
 
 '.ji 
 ■.ji 
 
 GD
 
 ! 
 I