>f California Regional Facility 1890 UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY "Gold is a wonderful clearer of the understanding; it dissipates every doubt and scruple in an instant, accommodates itself to the meanest capacities, silences the loud and clamorous and brings over the most obstinate and inflexible. Philip of Macedoii refuted by it all the wisdom of Athens, confounded their statesmen, track their orators dumb, and at length argued them out of their liberties." ADDJSOJT. SPEECH OF HON. JOHN P. JONES, OF NEVADA, ON THE FREE COINAGE OF SILVER; UNITED STATES SENATE, MAY 12 AND J3, 1800. WASHINGTON. 1890. ': I - SPEECH or HON. JOHN P. JONES, OF NEVADA, On the bill (S. 2350) authorizing the issue of Treasury notes on deposits of silver bullion. Mr. JONES, of Nevada, said : Mr. PRESIDENT : The question now about to be discussed by thia body is in my judgment the most important that has attracted the attention of Congress or the country since the formation of the Con- stitution. It affects every interest, great and small, from the slightest concern of the individual to the largest and most comprehensive interest of the nation. The measure under consideration was reported by me from the Committee on Finance. It is hardly necessary for me to say, how- ever, that it does not fully reflect my individual views regarding the relation which silver should bear to the monetary circulation of the country or of the world. I am, at all times and in all places, a firm and unwavering advocate of the free and unlimited coinage of silver, not merely for the reason that silver is as ancient and honor- able a money metal as gold, and equally well adapted for the money use, but for* the further reason that, looking at the annual yield from the mines, the entire supply that can come to the mints will at no time be more than is needed to maintain at a steady level the prices of commodities among a constantly increasing population. In view, however, of the great divergency of views prevailing on the subject, the length of time which it was believed might be con- sumed in the endeavor to secure that full and rightful measure of leg- islation to which the people are entitled, and the possibility that this session of Congress might terminate without affording the coun- try some measure of substantial relief, I was willing, rather than have the country longer subjected to the baleful and benumbing in- fluences set in motion by the demonetization act of 1873, to join with other members of the Finance Committee in reporting the bill now under consideration. Under the circumstances I wish at the outset of the discussion to say that I hold myself free to vote for any amendment that may be offered that may tend to make the bill a more perfect measure of re- lief, and that may be more in consonance with my individual views. THE CONDITION OF THI COUNTRY. The condition of this country to-day, Mr. President, is well cal- culated to awaken the interest and arouse the attention of thinking men. It can be safely asserted that no period of the world's history can exhibit a people at once so numerous and homogeneous, living under one form of government, speaking a common language, enjoy- ing the same degree of personal and political liberty, and sharing, in so equal a degree, the same civilization as the population of the United States. Eminently practical and ingenious, of indomitable will, untiring energy, and unfailing hope; lavoied 1>\ natuie \vithu domain of iin pi-rial expanse, with soil and climate of uiu-qualed vari- ety and beneficence, with every natural condition that can conduce to individual prosperity and national glory, it might well that among such a people industry, agriculture, commerce, an. ami science would reach an extent and perfection of development sur- passing anything ever known in the history of mankind. In some respects this expectation would appear to have been well founded. For several years past our farmers have produced au annual average of 400,000,000 bushels of wheat. Our oat crop t'r 1888 was 700,000,000 bushels, our corn crop 2,000,000,000 bushel*. our cotton crop 7,000,000 bales. In that year our coal mines yielded 170,000,000 tons of coal, our furnaces produced r,,;,00,000 tous of pig iron and 3,000,000 tons of steel. Our gold and silver mines add more than $100,000,000 a year to the world's stock of the precious n We print 16,000 newspapers ami periodicals, have in operation 154,000 miles of railroad and 250,000 miles of telegraph. The value of our manufactured products at the date of the last ceusr. - $5.400,000,000. Our farm lands at the same time were estimated at $10,000,000,000, our cattle at $2,000,000,000, our railroads at $6,000,- 000,000, of r houses at $14,000,000,000. It is not too much to say that there has been an increase of folly 50 per cent, in those values since the taking of the census of 1--H). Our national wealth to-day is reasonably estimated at over $60,000,000,000. Figures and facts such as these in the history of a young nation k the presence not merely of great natural opportunities, but oi a people marvelously apt and forceful. From such results should be anticipated the highest attainable prosperity and hapi Our population is alert, aspiring, and buoyant, not given t. >ining or aim less endeavor, but, with fixity of purp ever eagerly on, ulili/ing every conception of the brain to supple- ment and multiply the possibilities of the hand, and at every turn .;i,ating the subtle forces of nature to the best and wisest pur- poses of man. No equal numl>< T of persons on the globe better de- serve success, or are better adapted for its en jo\ m< nt. But instead of lindini:. a.s we should find, happiness and content- ment broadcast throughout our -jreat domain, there are heard from n in this Kepnlilic, resoimdir. -faction. Kvery trade ami occupation exhibits sympt' ne-vs and distrust. The farmer, t! all share in the general complaint that time-, are hard, that InV.- DM is "dull." Tin- farmer is in debt, and is not realizing. products of his labor, the wherewithal to meet either : or his current obligations; the arti-.an, when at \\oik, finds 1 B ivlativ or friend who is Hit who hi] \ -. Ills _; 1> n: little pr.'tit in .,a'ies, and difiicnlty in making i uts. WHAT IB THE KIFFICL'LTr f I'residen: thus brought to naught ttea and p , :' hiiiidredsof thon- i ..!!, shrewd. :iU men / .head; tin : assets am lie found : le correct - 5 ing pay-day? What potent and sinister drug has been secretly introduced into the veins of commerce that has caused the blood to flow so sluggishly that has narcotized the commercial and indus- trial world ? All have been looking for the cause, and many think they have discovered it. With some it is " over-production," with others either a "high tariff" or a "tariff not sufficieatly high." Some think it due to trusts and combinations, others to improved methods of pro- duction, or because the crops are overabundant or not abundant enough. Some ascribe the difficulty to speculation; others, to "strikes." All sorts of insufficient and contradictory causes are assigned for the same general and universal complaint. However inadequate in themselves, they serve to emphasize the universal rec- ognition of a difficulty whose cause without close inquiry is likely to elude detection. But the evil is of such magnitude, it is so wide- spread and pervasive, that, without a knowledge of its cause, all effort at mitigation of its effects can but add to the confusion and intensify the difficulty. It behooves us, therefore, as we value the prosperity and happi- ness of our people, to set ourselves diligently to the inquiry : What is the cause of the unrest and discontent now universally prevailing! ONE SYMPTOM COMMON TO ALL INDUSTRIES. In surveying the question broadly, to discover whether there is anything that affects the situation in common from the standpoint of varying occupations, we find one, and only one, uniform and un- failing characteristic ; the prices of all commodities and of all prop- erty, except in money centers, have fallen, and continue falling. Such a phenomenon as a constant and progressive fall in the general range of prices has always exercised so baleful an influence on the prosperity of mankind that it never fails to arrest attention. History gives evidence of no more prolific source of human misery than a persistent and long continued fall in the general range of prices. But, although exercising so pernicious an influence, it is not itself a cause, but an effect. When a fall of prices is found operating, not on one article or class of articles alone, but on the products of all industries;, when found to be not confined to any one climate, country, or race of people, but to diffuse itself over the civilized world ; when it is found not to .be a characteristic of any one year, but to go on progressively for a series of years, it becomes manifest that it does not and can not arise from local, temporary or subordinate causes, but must have its gen- esis and development in some principle of universal application. WHAT PRODUCES A GENERAL FALL OF PRICES t What, then, is it that produces a general decline of prices in any country? It is produced by a shrinkage in the volume of money . relatively to population and business, which has never yet failed to cause an increase in the value of the money unit, and a consequent decrease in the price of the commodities for which such unit is ex- changed. If the volume of money in circulation be made to bear a di- rect and steady ratio to population and business, prices will be main- tained at a steady level, and, what is of supreme importance, money will be kept of unchanging value. With an advancing civilization, in which a large volume of business is conducted on a basis of credit extending over long periods, it is of the uttermost importance that money, which is the measure of all equities, should be kept unchang- ing in value through time. 6 BKFECT OF A BKDUCTIO5 TBI MOXKY VOl.UMK. A redaction in the volume of money relatively to population and business, or, (to state the proposition in another form) a volume which remains stationary while population and business are increas- ing, has the effect of increasing tne value of each unit of mouc\ , I > increasing its purchasing power. It is only within a comparatively recent period that an increasing value in the money unit could produce such widespread disturbance of industy as it produces to-day. In the rude periods of society commerce was by barter ; ami even for thousands of years after the introduction of money, credit, where known at all. Wl extremely limited. Under such circumstances changes in the volume and in the value of money, while operating to the disadvantage of society as a whole, could not instantly or seriously atl'ei t any one individual. An increase of 25 per cent, in one year in the value of the moi.ey unit a change which now, by reason of existing contracts and debts, would entail universal bankruptcy and ruin would not lie eriously felt by a community in which no such contract* or debts existed, in which payments were immediate or at short intervals. and each individual parted with his money almost as sou: received it. Such proportion of the annual increase in the value of the money nnit as could attach to any one month, week, or day would be wholly insignificant, and as most transactions were closed on the. spot, no appreciable loss could accrue to any individual. Such loss as did accrue was shared in and averaged among the whole com- munity, making it the veriest trifle upon any individual, lint how is it in our day f THAT KKFECT 1XTK38IF1KD AS CIVILIZATION ADVANCES. The inventions of the past one hundred years have established a new order of the ages. The revolution of industry and commerce. effected by the adaptation of steam and other forces of nature to the uses of man, have given to civilization an impetus exceeding any- thing known in the former experience of mankind. I'nder the opera- tion of the new system, the rapidity and intensity with winch, within that period, civilization has developed, is due in great part to an economic feature unknown to ancient c.ivili/.ation and pi.n t.- cally unknown even to civilized society until the iiury. That feature is the time-contract, l.\ \\ )m h alone leading minds ax- enabled to project in advance enterprise ot 'magnitude and moment. It is only through intelligent and far-seeing plans and projections that in a complex and minutely classified -\-t.-m of inunstiy great bodies of men can be kept in uninterrupted emplo\ meut. We have 22,000,000 workmen in this country. In order that they may be kept uninterruptedly employed it is absolutely necessary that business contracts and obligation- he made long in a it. Any serious enhancement in the value o| the y between the time < if making a conn act or incurring a :d the date of fulfillment or maturity al\\ a\ H works h.,; and frequently ruin to the contractor or debtor. Three-fourths of the business enterprises of this country are con- ducted on borrowed capital. Three-fourths of the homes and farms that stand in the name of the actual occupants have been bought on time, and a very large proportion of them are mortgaged for the payment of some part of the purchase- money. Under the operation of a shrinkage in the volume of money this enormous mass of borrowers, at the maturity of their respective debts, though nominally paying no more than the amount borrowed, with interest, are, in reality, in the amount of the principal alone, return- ing a percentage of value greater than they received more than in equity they contracted to pay and oftentimes more, in substance, than they profited by the loan. To the man of business this percentage in many cases constitutes the difference between success and failure. Thus a shrinkage in the volume of money is the prolific source of bankruptcy and ruin. It is the canker that, unperceived and unsus- pected, is eating out the prosperity of our people. By reason of the almost universal inattention to the nature and functions of money this evil is permitted, unobserved, to work widespread ruin and dis- aster. So subtle is it in its operations that it eludes the vigilance of the most acute. It baffles all foresight and calculation ; it sets at naught all industry, all energy, all enterprise. CONTRAST OF EFFECTS PRODUCED BY AN INCREASING AXD A DECREASING MONET- VOLUME. The difference in the effects produced by an increasing and a d^ creasing money-volume has not escaped the attention of observant writers. David Hume, in his Essay on Money, says : It is certain that since the discovery of the mines in America industry has in- creased in all the nations of Europe. * * We find that in every kingdom into which money begins to flow in greater abundance than formerly, everything takes a new face ; labor and industry "ain life ; the merchant becomes more enterprising, the manufacturer more diligent and skillful, and even the farmer follows his plow with greater alacrity and attention. * * * It is of no manner of consequence with regard to the domestic happiness of a state whether money be in a greater or less quantity. The good policy ot the magistrate consistsonly in keeping it, if possible, still increasing; because by that means he keeps alive a spirit of industry in the nation and increases the stock of labor, in which consists all real power and riches. A nation whose money decreases is actually at that time weaker and more misera- ble than another nation which possesses no more money, but is on the increasing hand. William H. Crawford, Secretary of the Treasury, in a report to Congress, dated 12th February, 1820, says: All intelligent writers on currency agree that when it is decreasing in amount poverty and misery must prevail. Mr. R. M. T. Hunter, in a report to the United States Senate in 1852, says: Of all the ereat effects produced upon human society by the discovery of America, there were probably none so marked as those brought about by the great influx of the precious metals from the New World to the Old. European industry had been declining under the decreasing stock of 'the precious metals- and an appre- ciating standard of values ; human injieuuity grew dull under the paralyzing in- fluences of declining profits, and capital absorbed nearly all that should have been divided between it and labor. But an increase of the precious metals, in such quantity as to check this tendency, operated as a new motive power to the machin- ery of commerce. Production was stimulated by finding the advantages of a change in the standard on its side. Instead of being repressed by having to pay more than it had stipulated for the use of capital, it was stimulated by paying less. Capital, too, was benefited, for new demands were created for it by the new uses which a general movement in industrial pursuits had developed ; so that if it lost a little by a change in the standard, it gained much more in the greater demand for its use, which added to its capacity for reproduction, and to to its real value. The mischief would be great, indeed, if all th:<>:' its, and as it is only the expectation of gain which stimulates the investment <>f capital in operations, inadequate employment is found for labor, and those who are employed can only be so upon tin- condition of diminished w;i_-. s. An increasing amount of money, and consequently augmenting prices, are attended by results precisely the contrary. Production is stimulated by the profits resulting from advancing prices ; labor is consequently in demand and better paid, and the gen- eral activity and buoyancy insure to capital a wider demand and higher remunera- tion. PRICE THE IXDEX OF THE VALUE OF HO.XET. There can be no truer index of the value of money than the gen- eral range of prices. Price is the mercury by tin- rine and fall of vrbich-the heat and struggle f industrial and business lilt- *r daily measured and made plain. Where the tendency of iliis indicator continue* downward, there is no more certain sign that money is in- -injj in value. During a period of falling prices the fear of impending calamity hangs like a pall over the business of the ounti\ . Notwithstand- ing unremitting efforts, men feel themselves constantly on the edge of disaster. Gloomy foreboding and timidity take the place of con- fidence and courage. A shrinking volume of money is the most insidious foe with which civilization has to contend. It is my firm conviction that the inexpressible mivries in:, upon mankind by war, pestilence, and famine have been less cruel, unpitying, and unrelenting than the persistent and remorseless exactions which this inexorable enemy has made upon society. As the volume of money contracts prices decline, and with tin- decline of prices comes stagnation of industry, and tin- relegation t<> idle- ness of thousands otwilling workmen. Capitalists In-come nnwill- < invest their money in enterprises that employ labor while the products of that labor are constantly decreasing in price. During all periods of falling prices therefore money capital i* withdrawn < industry and seeks investment in IMHMN ami othet of money-futures yielding fixed incomes. For although the ; interest in many xuch cases may be low, the mpcn- sated for this by the enhancement in the pnn-haning pov dollar of the principal and l>y the necessarily greater command it secure- <>ver the products of labor. 9 Avoiding the very purpose for which it was devised, money at each times weeks seclusion and declines to circulate. Its owner finds that he can better afford to leave it idle in a vault or bury it in, the earth, than subject it to the probability of diminution by in- vesting it in business on a constantly falling market. Thus, con- trary to all principles of progress and of natural justice, the man who keeps .his money idle, and deprives society of its use, is rewarded by an unearned increment, while he who puts his money into active business, where industry and labor may profit by it is punished by unmerited loss. Under such conditions it is impossible for a community to reach that degree of material progress which, under proper circum- stances, it would readily attain. At every turn distress and dis- couragement stare the people in the face. In every town and vil- lage men, willing to work, stand idle. Even their misfortune does not end with themselves, for not only are they a tax upon their friends, lessening to some extent the meager income of those who give them temporary assistance, but their necessary and eager com- petition for the little work that offers, tends to reduce the compensa- tion of those to whom they are thus indebted. Stores, workshops, and factories, unoccupied and unused, are found in every direction. Crime increases, bankruptcies multiply, and even though the ag- gregate of wealth augments, it is unjustly distributed, and conse- quently barren of beneficent results. A GLANCE AT THE HISTORY OF MONET. The system of relying upon the precious metals as money has long been known as the Automatic system. Accurately, it should be called the Accidental system. It has been called "automatic" be- cause, so long as money was made to depend solely upon the yield of the niines, the supply regulated itself by what was believed to be a natural method, namely, by the expenditure of labor in its pro- duction, and was limited only by the rude obstacles which nature opposes to the production of the metals. The necessity of expend- ing this labor placed the money volume of any country beyond the control of the kings and conquerors who, in the primitive periods of society, exercised despotic sway over their subjects. It was un- doubtedly better for the people of those early times to risk the accidents of production than the follies and sinister designs of rulers. This automatic system grew out of barter. It is a survival from the period when articles were exchanged directly, not for gold and silver as money, but for gold and silver as commodities on the basis of their cost of production as in the case of the articles for which they were exchanged. There have been the same evolutions of progress in money as in all other things. In the rude original of society no kind of money was possible. The first trade was by barter, after which, some one or more commodities attainable in the vicinage, and in general use and demand were selected as the common media through which all exchanges were filtered. The use for that purpose of various metals by weight followed next, and, at a succeeding stage, gold, silver, and copper by weight, and after this their use in the form of coins, the value of which coincided with the bullion-value, which must necessarily be the case when free coinage is permitted. It may be not uninteresting in this connection to have a general view of the materials which, at different epochs of the world's his- tory, have been used as money. I therefore present a tabular state- ment giving those particulars in chronological order. 10 Table showing tome of the substances tchich hare, at various periods and in carious countries, been used as monry. Period. Country. Substance oaed aa money. Authority. B.C. 1900 Palestine Cattle, and cold and silver, bv The Scriptures. Arabia weight. Gold and silver coin*. Jacob. I'liit-iiic-ia Gold, silver, and copper coins A nun vinous. Phoenician col- Same (some still extant) 1200 tiny in Spain. Phrygia ....... Coins, by Queen of Pelops... Julius Pollux. 1181 662 'Gteece Argos .......... Brass coins Gold and silver coins, by Phi- lloim-r. onary of 700-500 Rome ......... don. Brasa, by weight Dai Jacob. 578 Uncertain. Home Carthage Copper coins Leather or parch tin-lit money, I hid. Socrates, Dial, on B.C. 491 Sicily tirot " paper bills " known. Gold coins by Gelo (some still Kirlie-o. Journal (ll'S Kl Oil' 1874, p. 3.'4. Jacob. 480 Persia extant). Gold coin by Darius (two still Ibid. 478 Sicilv extant). Gold coin, by Hiero (some Ibid. 407 Athens still extant i. Debased gold coins foreign MacLeod, 470. 400 Ml Ml Sparta Macedonia Rome lmn, overvalued . . First gold coins coined in Greece, by Philip. -il\i r cmim coined in Hii-.-kh. Jacob. Ibid. 64 Britain Rome. - !' iron Iliid. 50 Koine Tin and brass coin. ........... DfttM. Uncertain. . Arabia.......... Glass coins N V 'I lilnini-. July 2, 1- Period follouint] thefailurt of Uu ancient minei. A.D. 212 it)" K..IIH-. (Cam calla.) Britain Lead coins silvered, and cop- . iili-il. Living money, or human be- i made alegal ii-ml' d.Ms HI about 2 16*. 3d., Anonymous. - 11 >tory of Cn-at llrit.iin. vol. IV. |. 1100 Italy \ nil i| bills of ex- An lerson. DM 1574 Milan, Italy .. China Africa, pan of.. Granada, Spain . cnan^i- inirmlui i-i! 1 Jew*. PajM-i inlNalrjrnl tender I'.ii>i-r lnlU a lt-i;iil ti-n "Machine*" (i>i< tins vii-w iloalid-d.l I'.ipi-r bill* a leiral tend, ixiard liilln. rt'prewiita- Arthur Young. ,iiit-ii. Irving. Die. of Dates. Uowttain. : .,1 A ni'iii iin-ii". Uncertain. Seal iikui* .11, .1 1. lubber Uncertain Jacob, 373. parts of Af- rica. 11 Table showing some of the substances used as money continued. Period following the failure of the ancient mine* continued. Uncertain. Uncertain. Uncertain. Uncertain. Uncertain. Salt Anonymous. Anonymous. Patterson, p. 13. Ibid. Ibid. Ibid. China and India. India China Paper bills , Pieces of silk cloth . .... Africa Not stated ... Wooden tallies or checks Period following the discovery of the American mines. A.D. 1631 1635 1690 1694 1700 1702 1712 1716 1723 1732 1732 1776 1785 1810-1840 1826 1847 Massachusetts . . Massachusetts . . Massachusetts . . England SwBden . . . . .". . . Corn a legal-tender at market prices. Musket-balls Paper bills, colonial notea Bank-notes Copper and iron coins 4 Macgregffor. Anonymous. Maegreggor. McCulloch. Voltaire's Charles XII. Macgreggor. Ibid. Murray. Macgreggor. Anonymous. Anonymous. Adam Smith. Wheel.-r's History of North Caro- lina, 94. App. En eye. Anonymous. South Carolina.. South Carolina.. France ....... Colonial notes................ Bank notes Interconvertible paper bills a legal tender. Paper bills, colonial notes Indian corn a legal-tender at 23d. per bushel. Tobacco a legal-tender at lei. per pound. Teupenny nails for small change. Linen at 3. 6d. per yard, whisky at 2. 6d. per gallon, and peltry as legal -tender. Great era of bank-paper bills. Platinum coins (discontinued in 1845). Cocoa beans ; and at Castle of Perote, soap. Pennsylvania . . . Maryland. ...... Scotland Frankland, State of (now part of North Caro- All commercial countries. Russia .......... Mexico, parts of Period following the openings of California and Australia. 1849 1855 185- California Gold dust by weight, also mi- nute gold coins for small change, coined in private mint*. Private informa- tion. Communist set- tlement in Ohio, called "Utopia." Paper bills, each represent- ing " one hour's labor." JON&S 12 Table thawing some of Ike tubstancet used at money Continued. Period following the opening* qf California and Australia Continued. Period. Country. Substance used as money. Authority. 1862 ua United State* .. North Carolina . Paper bills a Wai tender Tenpenny nails, at 5 cents Act of Feb. 25. Anonymous. each, for small change. 1863 Gump at Flor- Potatoes for small change Yorkville Enquir- ence. S. C. er. 1863 United States... Postage-stamps for small change, temporary. 1865 Philadelphia, Pa. Turnips for small change, Philadelphia Led- temporary and local. in distinctly with the function of money, no that, hy law, they became a universal solvent for debts and demands, the stamp of tin* government placed on the coin testifying to its weight and Both metals, as shown by the table, have been concurrently nsed as money for thousands of years not only since the dawn of his- tory, hut from a jx-riod anterior to any historical records. The old- est annalsshow that they had already K.-en employed a- circulating media and that their relative values, or the rat : ot t he:i .-\, hange for one another, bad already been established. Gold and stiver am 13 were used as money in Palestine as early as the year 1900 B. C. We read in the Bible that Abraham weighed to fiphron the Hittitfc 400 shekels of silver, "current money with the merchant." An inscrip- tion on the temple of Karnak, of the date of 1600 B. C. mentions those metals as materials in which tribute was paid. But long anterior even to these dates, both metals had been used, as, among the relics of the bronze age of the prehistoric era, orna- ments of both gold and silver have been found. Gold, being the. less abundant of the two metals, has had the higher value ; but the ratio between the two has been marvelously steady, taking into account the great sweep of ages during which they have been used as money. This will be seen by reference to the following tables of ratios. I will first take their relative values during ancient times. Table showing the ratio of gold and silver in various countries of the world up to the Christian era. B.C. Ratio. Authorities. 1600 1 to 13. 33 iDScriptions at Karnak; tribute lists of Thutmosis. (Bran- dis.) 708 1 to 13. 33 Cuneiform inscriptions on plates found in foundation of Khorsabad. 1 to 13. 33 Ancient Persian coins; gold darics at 8.3 grams = 20 silver siglos, at 5.5 grams. 500 1 to 13. 00 Persia. Darius. Egyptian tribute. Herod. III,. 95. (Boeckh, page 12.) 490 1 to 12. 50 Sicily. Time of Gelon. "At least" 12.50. (Bceckb, page 44.') 470 1 to 10. 00 Doubtful. Asia Minor. Xerxes's treasure. (Boeckh, page 11.) 440 1 to 13.00 Herodotus's account of Indian tributes. 360 gold talents = 4,680 silver. 420 1 to 10. 00 Asia Minor. Pay of Xenophon's troops in silver darics. (Anab.; Boeckh. page 34.) 407 1 to Spurious and debased gold coins at Athens. (MacLeod, Polit. Econ., page 47B; Boeckh, page 35.) 400 1 to 13. 33 Standard in Asia, according to Xenophon. 400 1 to 12.00 Standard in Greece according to " Hipparchus " ; attributed to Plato. 400 400 1 to 12.00* 1 to 13.50$ Various authorities adduced by Boeckh. (19 fiftl Values in Greece from the Peloponnesian war to the time of 404-336 ii. UU I j. w,13.00 J13.33J Alexander, according to hints in Greek -writers. There were' variations under special contracts unit, the silver drachma. 310 I to 14. 00 Greece. Time of Demosthenese. (Boeckh, page 44.) 338-326 1 to 11.50 Special contracts in Greece. 343-323 1 to 12.50 Egypt under the Ptolemies. 300 1 to 10. 00 Greece. Continued depression of gold, caused by great in- flux under Alexander. 207 1 to 13. 70 Rome. (Boeckh, page44.) Gold scriptulnm arbitrarily fixed at 17.143 for 1. 100 1 to 11. 91 Rome. General rate of gold pound to silver sesterces to date._ 58-49 1 to 8.93 Rome. Continued depression of gold, caused by influx or' Caesar's spoil from Gaul. [N. B. Casar's headquarters were at Aquileia, at the head of the Adriatic, where there was also a gold mine, which at this period became very prolific.] 50 1 to 11. 90 Rome. -'About the year U. C. 700," the rate was 11 19-21. (Boeckh, page 44.) 29 1 to 12.00 Rome. Normal rate in the last days of the republic. It By reference to the foregoing table it will be observed that the in- crease in the supply of gold in Europe, consisting of thespoils of the Orient, gathered by Alexander the Great, and brought by him to (.1 v. TO, had the effect of decreasing the valne of that metal so that instead of being exchangeable at the ratio of 1 to about 13} of sil- ver, as formerly, gold became depressed, 1 ounce of it exchanging for only lOouncesof silver. Later, when Julius Ciusar extended his fi'iium-riiii: arms into Gaul, and sent to Rome the accumulations of treasure amassed by him, the value of gold by reason ot the increased supply was again depressed, so that an ounce of it was exchangeable for only 8.93 ounces of silver. With these exceptions it may be said that the relation of silver to gold for sixteen hundred years before the time of Christ had varied only from the ratio of 1 to 12 to that of 1 to 13.33. Silver at no time during all this period fell below 13.50 to 1 of gold. Looking, now, at the relative values of gold and silver from the time of Christ to the discovery of America, we find the ratio between the two metals to be as follows : Table showing the ratio of g^old and silver in various countries of the world from the opening of the Christian era to the discovery of America: A.D. Ratio. Authorities. 1-37 1 to 10.97 Rome. Rate under Augustus and Tiberius. 37-41 1 to 12. 17 Rome. Reign of Caligula ) ~ ,._ , ._-u 64-68 1 to 11.80 . v - ! The silver coinage much Home, ittM^ii ot > ero. i . ^ Mntiu 69-79 to 11.54 Rome. Reign of Vespasian. J- "," ^T,; ' of ,u . 81-96 to 11.30 Rome. Reign of Domitian. nurewa* about I il I 138-161 to 11.98 Rome. Reign of Antoninua. I " ::rj to 14.40 Byzantium Reign of Countantine Arbitrary. 438 864 to 14.40 to 12.00 Byzantium and Rome. Theodosian code. Arbitrary. Probable ratio, as shown by the Kdlctnm Pist^nse, under 1260 1 to 10.50 the Carlovingian dynasty Average ratio in theoommercialcitiesof Italy. Local or doubtful. 1'i't I'iCi 1 1 to KnJ ui.i. N'umerons mint indonturvs given in McLeod's I'nlitiral Kconomy, page 475. The ratio, except when Itxed arbitnn ily ami in violation of market price, varied between about 1.12 and 1.14 during the two hundred and fifty-seven yean included in this period. 1351 1 to 12. 30 1 1 to !: 4U Ratio in North Germany as shown by tbe very accurate 11"! 1 to 12.80 i rules of the Lubeck mint, corroborated in the main by 1411 1 to 12.001 the accounts of the Teutonic Order of Knights, aver- 14.M 1 to 11.70 ; aged in periods of lorty years. 14:t 1 to 11.80 ) 1455-1494 1 to 10.60 Ratio according to the accounts of the Teutonic knight*. An the ratio tixed in KnitUnt ( 'luist tn tin- America, silver never wont ltel<>\\ the ratio of 14.40 to one of gold. Tin- - liirli tin- metals have horn.- !< each other Hince the t tlie New World will appear from the following: 15 Table showing the relative values of gold and silver in the various coun- tridt of the world from the discovery of America to 1680. A. D. Ratio. Authorities. 1497 1 to 10.70 Spain. Reign of Isabella. Edict of Medina. Local. 1500 1 to 10. 50 Germany. Adam Riese's Arithmetic. Local or doubtful. l. r .51 1559 1 to 11.17 1 to 11.44 Germany. Imperial mint regulations. German Imperial mint regulations. Arbitrary or local. 1561 1575 1 to 11. 70 ) 1 to 11.685 France. Mint regulations. 1623 1 to 11.74 Upper Germany. Mint regulations. 1640 1 to J3. 51 France. Mint regulations. Transition period. 1665 1 to 15. 10 France. Mint regulations. 1667 j 1 to 14.15 Upper Germany. Mint regulations. Doubtful. 1669 ! 1 to 15 11 Upper Germany. Mint regulations. 179 1680 1 to 15. 00 ? 1 to 15. 40 J France. Mint regulations. Table showing thfc ratio of silver to 1 of gold from 1687 to the de- monetization of silver by Germany an 1831 15.72 1844. 15.85 1857 . 15.27 ].-<;. . 15.60 1K12 15.73 1845 . 15.92 1858. 15.38 1870. 16 57 1833 15.03 1846 . 15.90 llvVJ . 15.19 1871 . 15.57 1834 15.73 1847 . 15.80 1860 . 15.29 1872 . 15.63 1835 15.80 1848. 15.85 \ By the foregoing table it will be seen that in the three hundred and seventy-live years from 1497 to 1872 the maximum separation of the metals was only as 1 to 16.25 notwithstanding tin- \\ni.--i di- vergencies doling that long period in the yield ot' tin- two nn-tals from the mines. It will be observed that all f ho later quotations are from the London market, but it is a .signliii'ant fart that in Franco, where, by the law of 7 Germinal, ^n XI, ( I .-(:;. i fr.-r < oina^i- was per- mii tfd to both metals, at the ratio of 15^ of silver to 1 of gold, fur a period of seventy years, and until the coinage of silver w;. ited. there was at no time the slightest variance from that relation. When silver was deprived of the full money fnnetion, anl all the money-\vi>rk.of society wa plue.nl on gold, the inetuls began arate. The following table shows the degree of that separation from year to year: Table showing the ratio of silver to 1 of gold since the domonet i/.a- tion of nilver by Germany and the United Stairs, and the closing of all mints of the western world to its free coinage: 1R73 x 15.92 Ifl. 17 16.59 17. cH . 17.L-.' 18.19 18.64 18K4.... . 18.57 1885 19.41 1887 -Jl.n SI.M UN... 17.94 IK. in 1S80 1*. US 1801 18.10 Tbe foregoing figures show that it in only since tlm legislative pro- 8cripti.ni ot silver by Germany and the I'mtr.i ing of all .tile European mints to its eoinagi-, that an> mateiial changf took place in tho ratio ln-tween tin- two im-talx, whii h i-on- clu^ively demonstrates that tin- pn-sent d'\.- In- ndat i\ r valut^ .Inetothr i'-^.ii outlaw i \ 1 nor to natural i a uses. oh" has the coin-in rent line of the 1 wo metals a.s moiirv lind tln< n of ail time, Imt the approval of tin- [ .ml. wln-n not Idindrd 1- I he appn.'. tical .. .need tinaiicial mn . /< d is this "iily cite a few instances of sm-h approval. "ii said : il.lt I Al. To annul f on i.- k-- joxia ur of i-it lir of the metals - al.li' tn all tin- olijcc(if.ii4 -A j /uii u.-iA (A piii ne stroke of the pen at least three milliards to the twelve milliards of the public debt. In a debate in the French Senate on January 23, 1870, Senator Du- mas eloquently pleaded for caution in dealing with a subject of such fat-reaching importance as the demonetization of one of the money metals. He said: Those who approach these questions for the first tima decide them at onoe. ^Fhose who study them witti care hesitate. Those who are obliged practically to decide doubt and stop, overwhelmed with the weight of the enormous responsi- bility. The quantities of the precious metals which are now sufficient may become in- sufficient, and we should proceed with great prudence before we diminish that which constitutes a part of the riches of the human race. Sometimes gold takes the place of silver. Sometimes silver takes the place of gold. This keeps up tlir. general equilibrium. Xobody can guaranty that the present vast production of old will continue. The placers are found on tne surface of the eaith, and may e exhausted by the very facility of working them. Silver presents itself in the form of subterranean veins. Science mav contribute to accelerate its extraction. In presence of the unknown, which dominates the future, we should practice a prudent reserve. Before a French monetary convention in 1869 testimony was given by M. Wolowski, by Baron Rothschild, and by M. Rouland, governor of the Bank of France. M. Wolowski said : The sum total of the precious metals is reckonedat fifty milliards, one-half gold and one-half silver. If, by a stroke of the pen, they suppress one of these metals in the monetary service, they double the demand for the other metal, to the ruin of all debtors. * * M. Rouland, governor of the Bank of France, said : We have not to do with ideal theories. The two moneys have actually co-ex- isted since the origin of human society. They co-exist because the two together are necessary, by their quantity, to meet the needs of circulation. This necessity of the two metals, has it ceased to exist? Is it established that the quantity of actual and prospective gold is such that we can now renounce the use of silver without disaster? Baron Rothschild said : The simultaneous employment of the two precious metals is satisfactory and gives rise to no complaint. "Whether gold or silver dominates for the time being, it is always true that the two metals concur together in forming the monetary cir- culation of the world, and it is the general mass of the two metals combined which serves as the measure of the value of things. The suppression of silver would amount to a veritable destruction of values without any compensation. JONES 2 At the session (October 30, 1-7. i) of the IMyian MonetaiA Ci>mmis- sion. Trot'cN,!,] 1. ac of ilie mo.st luminous writers on eco- nomic subject.*, said : IPS, and among them the state- 'at to ).ny in gold or sil .t can not ' iv witnmit disturbing tin.- rabuuHi of debu ciediturs, to tin prejudice of debtors, to the extt-ut of ; of one-third. To incr-a*e all debt* at a blow dr hut, mi n-vuliitionary. ili.it I c-.m uot believe that the Cor.-iniuent will pi. (.r that the Chamber* will vote it. WHY WAS THE AUTOMATIC BTHTF.M I.S 1 KIU KKEI> WITH T Some thirte.-n yi-ars ago, as Chairman of the Monetary Commis- sion appointed ! -Njjatc tin- can>e.sot the chan.i;i- in tin- relative values of i!ie precious m-ral>, I submitted to this liody a report, in which I tt in-r. anii smur adopted lintli. TlnMt- that adopt'vl lx>th iiirtalu served a-* a balance- wheel to steady with >-\a ctnexs t!'-n : The prac lical i-lln l of all of this was the name a-t if all nations had adoptrd ii .r : , because it aecureil the em nh at a lix. .1 i-.| ui\ al< m-\ tir - the n ii-ntion of metal a the material nf nioiu-y, but favor it* MihpTtion ' nini"* .Hi- di-ooveied, or old nei \i-ld or jii yii-ld more abundantly, instead 1 fn-i -Iy acn-p: iin: th.-:r product in an.. with th- the\ advi'. i tin- I et i . 'lutr ]irohibi(ion of the i-oin.i. through the limitalioii or the abolition ol the togM-tender fiiin-tion of one of the:n. \\ ; . -rrditor am: ns,-s M-euj to be in danger of lx paired b\ an IIH-II.I-.- in (he volum.- and di-cieu.se in tin- \.ilne of mon> otlii-r word*, by a KI-IM-I so modern theorist** ar> .iitrif-i I'm !' I i!i. mom \ im-tals, and in Min^li- ntand.ird count! irs foi ilu- - lion from (he m<-t-il which proiniMeit the nm-t to th ! that proiuis-.-< t;,.- h-a-t abundant -upp:\ .uixioim foi d ia composed when m 'h m.tti-rial i rising in TjJoeand price* at* falling, ami flreedinjjlv tip|pn-ln-niv(. of the evil ami in. predict ax Mure to rr a natural or artificial . In. n in llic \i. limn- 1. 1 UK *. It will I. lr, (1.- . -I.- nl 111.- I, of of the UlltitnvM tor money of the ib-m. property cheaper ii: .1 .M - 19 This is aone-sidi>d system, which can operate only in the interest of the security creditor, the usurer, aud pawnbroker, whom it enables, through the falling prices which itself occasions, to swallow up the shrunken resources of the debtor, but is impotent to protect the interests of the unsecured business creditor, the debtor, or society, when, from any cause, the supply of the money metals becomes deficient. The world has expended a vast amount of labor in the production of the pre- cious metals, and has made great sacrifices in upholding the automatic metallic system of money, and has a right to insist that it shall be consistently let alone to work out its own conclusions, or. that it be abandoned. The history of the subsequent struggle to reiuonetize silver only serves to illustrate and emphasize the correctness of that statement of the case. Between 1810 and 1849, according to Tooke and Newruarch (Tec- oguized authorities on the subject), gold increased in value 145 per / cent, which is equivalent to a fall in the general range of prices of 59 per cent. No movement was then made or suggestion offered by the debtors, or by any class of the community, to add any new money-metal to the metals already in use, with the view of increas- ing the volume of money, so that the equity of time contracts might be maintained, and the value of the unit of money kept at a steady and unchanging level. But as soon as the discoveries of gold were made in the alluvial deposits of California and Australia, or rather as soon as it was sus- pected that money would thereby become considerably increased in volume, the annuitants and income classes, the creditors every- where, took steps to avert what they characterized as a great calam- ity. They openly declared their purpose, by every means in their power, to prevent a decline in the value of money, so that the pur- chasing power of their incomes might not be reduced. They de- termined to go to any length in order to prevent the rise of prices which their aggressive instincts led them to fear would follow the additions to the money volume of the world by the natural aud much needed yield of the mines. The fiat therefore went fortk that one of the metals must be dis- carded. THE PROPOSITION FIRST MADE TO DEMONETIZE GOLD. If anything were needed to demonstrate that the reason for the de- monetization of silver was the cupidity of the creditor classes the money-lenders, annuitants, and those in receipt of fixed incomes and that it was not any defect inhering in the metal silver, nor any change in its adaptability to subserve the purposes of money, it is to be found in the significant fact that the metal first selected for de- monetization was not silver but gold that metal which has since become the idol of the money-changers, and which is now declared to be the only "natural" money. The openly-avowed determination was to increase the value of money, and in order to accomplish that purpose the metal which promised the largest yield was to be con- demned and stripped of its ancient monetary function. So strongly was this determination set forth, so earnestly was it presented, and so urgently pressed on the ground of duty that its achievement came to be regarded as the fulfillment of a high moral purpose, It was with gold then as it came to be with silver afterward, and as it always is with whatever interferes with the interests of privileged classes, intrenched in power and prerogative, the deter- mination to destroy it being arrived at, measures were taken to prove that the public good required its destruction. While the purpose was to discard the metal, whether gold or silver, which threatened most immediately and seriously to reduce the purchasing power of 28 money, the argument was that a decrease in tlif purchasing power of ~ a calami;;. L6 happening of which ev< should be directed. Tin- privilege*, -.ml then, as they find now. able and in- .1 defenders aiii-in^ tin- literary and edu guilds tit' the p'-riod. Tin iehrated I>e < t > liuey, in Kn^laiul, at- tempted to prove, and to his o\vn satisfaction did prove upon fig- ures drawn from hi.s fears and a brilliant imagination, that tin- least \ ii-!d of gold to In- e\p .<;.(! fnun the mines of Cal ifornia and Anstra lia for an indefinite ncriod iu the futiirv. . ie yearly sum of 00. iievalier, in France, vehemently proclaimed the necessity of : the mo, iey metals, and that one not silver hut i^old. In his work upon the " Fall of Cold' 1 M. Chevalier, in 1 .*;"*, waid : The quantity of cold annually thrown on the c*>ii<-ral maiki-t appi-n.-- rtiiinrl i !i.iril.>r tr u twoooantritMi (Cftlifornin and Au-tr.ili.u inu-' in >irh <|ii:intitU-M ami on su< h rninlitiii!t an to r.-inl,-i u in.irkiMl iln-l.iii- ni its v.ilim im-vil:ilili-. 1 1 nia tliat so v:i.t :i }in>ilui'tii>ii MlnuiUl hi- MXXH&pOi*d "illi DdactloDia value. In n< itin-ciion can a new outlet b seen mittirii-ntly Ur^i< t<> nUsoi i tlin.irv jirixliic timi of K"i'l which we are now witiu'it.siug. as t4 pruvont :i lue. . wi- p.>.teM .1 vi-ry rnlxint faith in tin- Immobility <>f huniiin : .1 thr fall iu the value of gold as an event for which we nhuul<> clearly cxp rested on a lat. r occ-asion Ity another distinguished advo- c-iteof dear money, Mr. Victor Hoiiarl, of France, in the .Journal de.s i I,- -aid: th the precioiM m-t.ils. anil if tin-re i any ilan- in t which it i.i nt-cciuutry t-i -uanl, it i.t that tin.* saturation rtlioulil !... i.n..- greater. * * If tbeaDnaal production of gold ! now reduced to 500 - let nstbank 1 >r it. ami !! il.s wish that it iniv mi! li" to" r .quill V liiiM--;nil, whiTi'tiv r.iNi-EMOXETIZEU. In 1- : 'nan states and Austria denioneti/'d ^oM ; ami had it in>t Keen for the opposition of France. \\ lu.-li loiUtaa on retaining the doiiMe standard, the movement miyht have lieconie general on the continent. With F.nu'land, however, nothing could !> dom-. Mor.- t h.in a L"'ncration had passed sim-e it had declared for the Kindle standard of ijold, and its creditors and income clauses the hhrewde-t. most ad.-pt, and watchful of financiers did not believe that the large yield* of gold would loaf oontiooe^ The ei edit or classes of the contiiieat, li ml i in,' Filmland i m nn i and reali/in^ that the object .sought by the Kn^'lish creditors wa> identical with their own, namely, the increase in the value of i ami the depression of prices, concluded that the common p could be JIM well erred by the di-moneti/ation of one as by that :' d by developments on the Mile \\ hose bountiful and bem lir. -lit yield of nil ver \\ :i< the littilltf supplement to I M on the 1 .1- more im- :i- anii'ii: ; C'omm . e sub- 21 ject. The United States, too, sent a commissioner to examine into the condition and prospects of the Couistock, and, imbued with many of the characteristics of De Quincey and Chevalier, the United States commissioner, in 1868, reported that if all other mines were worked with the machinery used on the Comstock "their yield would flood the world." Like many of the present opponents of silver he was endowed with the gift of prophecy, and accordingly we find him confidently pre- dicting that ether and innumerable rich lodes of silver would be found on the Pacific coast which would be worked with great profit. The attack on gold was immediately changed to a combined attack on silver. From that period till the present no means have been left untried to belittle and degrade that metal, and also to dis- parage those who are in favor of continuing it as one of the money metals of the world. It was then announced with all the dogmatism of authority that silver was unfit to be used as money. Defects were suddenly dis- covered in it that the scrutiny of three thousand years had Tailed to disclose. Its weight and bulk were found to be insuperable obsta- cles to its use as money. Yet the specific gravity of silver is no greater now than it has been for all the ages during which it has been used as money by all mankind, nor is it any heavier or more bulky than it was in 1851 or 1857, when Belgium, Germany, and Austria demonetized gold and made the " heavy," " bulky," and " in- convenient" metal, silver, their only money metal. Silver can now be transported from place to place with less risk and at no greater expense than gold, and at much less cost than at any previous period in the history of the world. The objection that silver is too heavy for the pocket is an ob- jection common to all metallic money. We see hardly any gold in circulation in this country infinitely less than of silver. When our people have a choice as to the form in which they will take money fhey prefer paper representatives as being the most convenient. The extraordinary perfection to which the arts of the engraver and pa- per maker have been brought gives paper money a security against counterfeiting and imitation far superior to any immunity which can be claimed for the metals. The marvellous inventions of modern times in the form of safes and vault-locks render it a matter of practically no risk to store the metals, both silver and gold, so that paper representatives of them may be issued. These represen- tatives are preferred by the general mass of the people, and have almost entirely occupied the channels of circulation to the exclu- sion of both metals. A silver certificate for $1,000 weighs no more than a gold certificate for the same amount. THE MOTIVE FOE DEMONETIZING SILVEH. The motive for the demonetization of silver was precisely the same that had previously inspired the demonetization of gold. The object was to demonetize one of the metals that metal which prom- ised the greatest abundance, and which would contribute most largely to maintaining at an equitable level the general range of prices. The motive in both cases was to aggran dize the privileged classes the income and the creditor classes of the world and by means of a subtle and sinister manipulation of the money volume, whose effects it is not always easy to trace to their true cause, to practically confiscate the reward of the hard toil of the masses. To all intent and purpose the design was to establish a new system of JOXES 22 slavery for the western world, of \vliicb the debtor classes anion^ tin- white races should be the victims. When demoiii'ti/atioii was determined . which wan only $80,000,000 in 1- ; la now $_'l'O.Ui>0,000. It has nearly tripled, and r ..lit the real value of the nietals has dim ini-lu-d. It is dilticiilt toestim.ite exactly what the diminution is. but whatever it in;.\ be it demands the alien. tion of governments, i,,., ;,iix, it atb-cts iinthvorubly all that portion of the popu- lation whose income. remaining ni>iiunally the same, undergo, s it \earh dim, nil tion of purchasing power A-i govei nments rontiol the weight :n money, they ought so tar as possible to assure its value. And as It is admitted thai tl - il th<- in. -t Us is to depreciate, this tendency .should be a: by demonetizing one of them In behalf of the double standard it was replied as follow i : Many economists argue that the precious metals, h.ix ing liecnme M rv abundant, ^t 10 or 15 per eent. of their value, and that the situation must b.- rcdic-s. d by making mom-v se.irrer by demonetizing silver. To this it ma\ In- ai that llo i-ries of gold of the. hist twenty \fant have injund noUxlv. Tin- new mass of gold, -pleading over the whole World, has found einplov inenl in stimulating all forms of business, and. iii a consr<|iieiice. the vain. fallen very little According to Mr. N cwmaich. the mass ,,t gold augmented :i per cent, per annum, while, the mass ol exi-liange-* ha- .lu^nu nii-d .per annum, MI that the iMiilihi iiim has bet-n HIM : And the present is nn especially inoi'li'ii limn time to deinoneti/r l! : i.il product ii f jrolil ha \wen tailing oil' lor i -viral \.iii- ll \\.i- 92M.OOo.uni> in I.-L:I. and it is now not more than .* Ud.Oou.* 0. What ill hap|.. n to the civilised world if silver is demonetized and if gold shall then fail I THE MOTIVE OF KX(il.A.M>. Kn^lanil diil not adopt the old standard until she was in a posi- tion to become the principal creditor nation. When her ! furnaces, spindles, and looms were read\ to supply manufactured goods to all the world, she saw that all conntrie-and peoples would be compelled to pour their treasures into her lap. Her insular position and jjreat navy guarantied her a-a,n-t external as-.;H.]t. Released from the anxi<-;i-> and labors incident to the Napoleonic -\ith n sturdy popnlat ion of trained mechanics, and with helds of coal and iron in iibnndan'-c. she was w ell adajiteil to !> the " work-ho]) of the world." With colonial jio-scs-ions in c\ct\ Sen, and with Continental Kutope in rea-e. . Kn^land could -:omers who cmld themselves produce nothing but raw material and would be obliged to buy her !:ni-licd pnxl 'I lie t'n-ld of industry ha<: utly bioad.-ncd by ba-ic inven- tions ol im pat a lie led impoi t.nn t be steam -engine, the power loom, the opininn^ jenny, and a mult ijilicity of other dities. Time bond- and other ib-- Hi were the media in which for the mo-t p;irt -ho received pay , she made int< n-st and principal pa\ able in pdd alone, and if before the date of payment the value of money should in- crease it would not be to the disadvantage of the creditor. What- ever we may think of the ethics of this policy, we can have no dif- ficulty in understanding its motive. ACKNOWLEDGMENT OF THE MOTIVE. As to the object which England had in view in demonetizing silver we are left in no sort of doubt. It has been candidly admitted by many of her financiers and publicists. The reason for her stolid ad- herence to the gold standard now is the same for which she origi- nally demonetized silver. Her income and creditor classes are daily in receipt of an unearned increment to their wealth by reason of that demonetization. More candid than the advocates in this country of the single gold standard, the writers and press of Great Britain openly avow the object. No better testimony to the fact can be adduced than that supplied by the royal commfssion appointed in 1836 to in- quire into the changes in the relative values of the precious metals. At page 90, Part II, of the final report of that body, section 128, the commission say : It must be remembered, too, that this country is 1 argely a creditor country, of debts payable in gold, and any change which entails a rise in the price of corn- modities'g^nerally ; that is to say, a diminution of the purchasing power of gold would be to our disadvantage. Before the British Royal Commission of 1863 on International Coinage, Mr. Jacob Behreu, an eminent British merchant aud mem- ber of the Associated Chambers of Commerce, after answering special aud technical questions, was asked, in conclusion, "if there was anything else he wished to state." His reply was (p. 13) : I would only state that, in my opinion, the general introduction of gold all over the world has been one of the greatest possible blessings to England. I believe that England would bo now the very poorest, country in the world if the silver standard abroad bad been kept up, and gold had wot been generally introduced. Gold would otherwise have been verj' much red uc.efl in value, and we should have had all the gold poured into England. All the debts owing to us would have linen paid in the depreciated currency: and, therefore. I believe that England ought to have taken the lead in the introduction of a gold currency abroad. We ought to be very thankful that it has been introduced, and we ought to'give every facility to its circulation. Sir Lyon Playfair, in a speech delivered in the English Parliament on April 18, 1890, according to the report in the London Times of the day following, said that The true policy of England as the chief creditor nation of the world was to keep perfect independence, aud to refuse participation in any entangling conference on our monetary system. And, according to the same report, Sir Lyon Playfair, referring to the holding of the metals together by law, said that It was quite true that, if you yoked a cart-horse to a racer, the strength of roth would be increased but the speed of the racer would be sacrificed. Gold is the " racer" whose " speed " must not be sacrificed, no mat- ter how much injury may be effected by its tendency to greater and greater gain. The weight of the enormous burden which is imposed ou gold can not be better illustrated than by a statement of this same Sir Lyon Playfair, made in the same speech. According to the,London Times of April 19, he said that The liabilities of the banks of Great Britain to the public amounted to 621,- 000,000, or about the amount of the national debt of England ; but the amount of coin or bullion to meet this liability was only 35,0. '0.000; or, deducting from each side of the account 8,000,01)0 locked up in the Xotes Department of the Bank of England, it was 27,000,000; or only 4J per cent, of liabilities. On the same occasion Mr ncellor of the i :vd an able speech, in which he jjave his facts, his clou and his loojc to tin- stni^^lin-. 1 mntryinen by main- taining the wicdom of remonetiaatios of eilver. but t;ave liis conclu- .ind his policy to the creditor cla->-e-> by recommending no disturbance of present conditions. I hare contended said the Chancellor of the Exchequer ami am prepared utill to contei;.. ild prvf-r the currency of the wor'd ml upon two nji'taU rathiT t!; nn-ta!. 'l tliiwi* vi.-w - I havt- always looked up : aut icmiUtic U> eOb Other ; Dot M lx -'..i- jirii.-fni' . i would neoesaanly fall when tluM>th.-t ruse. Inn I bftYe looked ujiou them as partueis who Lii^.-tber were dninj: the work of tlu- currency of tho world. The English creditor classes hav-- not l-.-n without able coadjutors in this country. \V- have noticed for tin- last twelve or lu : hat zealous advocates of the jjold .standard, the advaii! \vliich ar? not confined to Great Britain, ;vre to be found among the creditor classes of the United Si If the toilers of this country, from the proceeds of whose lab.r th-si- exactions have to l>e paid, hail as little influence on the legislation of the United States as the toilers of England havr on the l.-u-Nbiiion of that country, the creditor classes and financiers of tin- I'nited - mi^ht be :w frank as those of (Jreat Britain in admitting; the object of maintaining the single ^old standard. Hnw yraphieally. though unintentionally, ii' : . in the following verse, expre.vs tile advanla^.- \\ h standard j^ivrs to cn-ditor.sev.-n \\ here, ami th. ..'tiou with which they contemplate lit'.- : Tin- taste of hot Anilii.i - liiiX sun thai in..'. Without th>- worm, iii ! An. .iiitin;. iir'.-. On - We ; THE MOT I When Germany, into\icat.-d liy h. ;,d in - by tin- fall of pn< i. nt mi the incp-a.se than all her armies of horse and I'MO; hail In-.-n .ilb- t.i .-. I'rance, on the . iinpn-cc.lentrd war tribute, by '. ,.-nt voluiih ilatio.'i to maintain, and even advance, h.-i : the ^reai . ::illph Ilioi'i' coiil]ile!c thall (iellliaiiy d by ail tin- military >plMi>!nr of the war. The laiisoui ind nst ry. Ii prosptrity. Mr. P when hniulteds ( >!' i lion-iinds oi i 1 annual ing ; a M'-'ii ion. rliat as MMHI as tip- i-;)ei ;> n< d-Ti.im-t :/.it i-m of silver Ind had t';n.- to ma.. From 1873 to 1869, the emigration from Germany numbered 1,546,- 000 persons. Students of social science everywhere recognize the statistics of ille- gitimacy and of suicides as among the most powerful evidences of monetary distress. By reference to those statistics we fiud that not- withstanding the large emigration during that period the number of illegitimate births in Germany increased from 161,294 in 1833 'to 169,- 645 in 188d , The suicides in Prussia, Bavaria, Saxony, and Baden the leading states of the German Empire increased from 179 for each million of population in 1868 to 196 for each million of the population in 1876 and to 218 for each million of the population in 1662. Jn Prussia alone the number of suicides in 1876 was 151 per million, while in 1882 it was 191 per million. This is part of th=5 price which the toiling masses of German} 7 are paying for the gold standard experiment, which, without their con- sent their imperial government foisted upon them. Bismarck made the mistake that many able men in all countries of the western world have made and continue to make, namely, that of attributing the commanding position of Great Britain in the com- mercial and industrial world to her adoption of the gold standard. Bismarck mistook for cause and effect what was a mere coincidence, the result of exceptional conditions, as did those of our legislators in 1873, who happened to know anything whatever of the nature of the act demonetizing silver. The belief of some of the most far- lighted statesmen of Great Britain has been that she secured her position, not by reason of the gold standard, but in spite of it. In a speech 'delivered at Glasgow, in November, 1873, after the alteration by Germany in her monetary standard, Mr. Disraeli said: The monetary disturbance which has occurred, and is now to a certain extent actiug very injuriously upon trade, I attribute to the great changes which the Governments of Europe are making in reference to their standard of value. Our gold standard is not the cause of our commercial prosperity, but the consequence of that prosperity. It is quite evident that we must prepare ourselves for great convulsions in the money market, not occasioned by speculation or any of the old causes which have been alleged, but by a new cause with which we are not suffi- ciently acquainted. And again in March, 1879, when the effects of the decreasing vol- ume of money were making themselves more and more felt, Mr. Dis- raeli, then Lord Beaconsfield, said : All this time the produce of the gold mines of Australia and California has been regularly diminishing, and the consequence is that, while these great alterations on the continent in favor of a gold currency have been made, notwithstanding .that increase of population which alone requires a considerable increase of currency to carry on its transactions, the amount of the currency itself is yearly diminishing, until a stat-e of affairs has been brought about by gold production exactly the re- verse of that which it produced at first. Gold is every day appreciating in value, and as it appreciates the lower become prices. It is not impossible that, as affairs develop, the country may require that some formal investigation should be made of the causes which are affecting the value of the precious metals, and the effect which the change in the value of the precious metals has upon the industries of the country, and upon the continual fall of prices. In reaching their conclusions, Bismarck and others ignored the fundamental principle that a gold supply that might be sufficient for one country with a gold standard, and might even result in a measure of prosperity to that country, would be wholly insufficient if other countries should adopt the same standard and should enter upon a keen competition and rivalry for the acquisition of gold. The adoption of that standard by Germany and France was there- fore not only destructive of their own prosperity, but was a stun- ning blow at the prosperity of England and all other gold-using L'O countries. In taking England for bis model, Hismarck had uot the condition of the toiling masses before his mind, but the glamour of prosperity which surrounded tin' creditor-barons. Tin- unprejudiced observer can not fail to perceive that the $370,- coinril miller tin- Limited ComaiM- Act of the I'nited - of 1-?-, supplementing tin- gold .stock of tho western world . poned great industrial and financial crises. I'.nt tin- clenx these. ^.-ithcriug, and, unless relief be soon forthcoming, will burst. upon the world with crushing severity. DEMONETIZATION IN TliK IA1TKD STATES. If we are surprised that the .sordid selfishness of tlie privileged classes of Ktirope should haveindneed tin-nit.) perpct rate tso gross an \ e are retninded that the legislation if monaichical count : ..illy been controlled in the interest of the pri\ classes. Hut what shall be said in defense of the demoncti/atinn of silver by the United Status! No such stupendous act of lolly and injustice was ever before perpetrated by the representatives of a free people. Our position differed materially from that of CJreat Britain. This was not a creditor nation. Our people did not, and do not, own thous- ands of millions of dollars of foreign bonds, on whicl y tin- act <'l March ! .;isisted of a rise in tin- price of the tortlie benefit of tin- holder, at a tiim- when they \vtTt> no longer i he nropTty of tin- (Jovernmeiit lint of private individuals. .ii etVcct of the act, therefore, was not in any way to hem-tit the Government tmt greatly to enrich, by an increment unearned and unbargained for, a few nu>n \vhobail already been greatly en- rich, -d by their dealings with the United States. ' The title of the art >houhl have read ' An act to strenghten the bank account and credit of the holders of United States bond*." The excuse and apology for the act was that by i;s passage the re- funding process then contemplated, and afterward provided for by the refunding act of 1-70 might be rendered more certain of success; but if any advantage accrued from that cause, it was lost, and nun h more with it, by the inerea.se which the act of IBo'J eilecicd in the burden of the bonded obligation, by pledging rhe nation to a pay- ment in a medium much more valuable than the medium provided for in the contract. And, again, in Ir73 when all the bond* provided for by the refunding act of 1-70 had beeu sold and had passed on' of the hands of the Government, another act \\ a* passed, intended by the money-lenders again to strengthen the public credit, anl again to the disadvantage of the people and to the exclusive and enormous advantage of the bondholders. It bore the innocent title of "An act revising ami amending the laws relative to the mints, assay of- fice*, and coinage of the United States." This act. hearing on It no suggestion of any change more serious than that of regulating tip- is of mint management, has proved to be an act of mo. nientous consequence to the people of this country. Th.- tliat demoneti/ed the silver dollar, which it did by merely omitting in from the enumeration ot the coins of the Uni: DEMONETIZATION WHOLLY fNJUSTIFIARLK. Among all the explanations that li made to account tot- that denioiii-ti/ation by .1 of the United States. I have i any reason advanced which constituted a Justin. for it. To my mind, in view of all lh<> circumstances in tin- ; the herculean uiiiiculties by \\hich the : - MM round' d. in tbe face of the .sacrifices which our eiti/.ens had made to p; :ild:c. :iiid in the fac of all that had already b. en don-- IS I'foplr, Jiroud of tin-it liation:ii sl|. ngtll, and : of their national honor, to satisfy the i of the --ay, of all these la. is. the demon, -t I he Unit- -ne of tip. at are worse than . -.vus tin- cliil.l . I ice. ami .lit of en * far as possible the the blunder of l-?:t that new legislation d.-mamled by the people. While tho pasi ..ins. ;i:nl tlm pressing du ;,, i.;;m.-. The demand cotuefl from all ' .it a i. !..- toi t!i>- >le- preMed iml u of 14 applied at tin- . -. And what bett.-r \,-<- .ied than absolutely to reverse that legislation .t ..i to put th.- 20 monetary position of this country back to exactly w here it was when that wrung was committed? Some twelve years ago an attempt was made to apply a remedy, but the attempt was only partially successful. Instead of resulting in free coinage, it resulted in the passage of the bill which author- ized the coinage of not less than two nor more than four million dol- lars' worth of silver per month. On that occasion a financial debate of great interest and importance was had in this Chamber and in the other House of Congress. The proposition to reraonetize silver or to increase the silver coinage was vigorously opposed, but the argu- ments then presented by the advocates of reuionetization never have been, and never can be, refuted. In fact, but rarely has there been any attempt made to answer those-arguments. Puerile attempts at wit, and diatribes of abuse are all that the silver men have heard iu sixteen years in answer to the contentions they have made in favor of the remouetization of silver, EDUCATIONAL EFFECT OF DISCUSSION. With that debate, Mr. President, long pending and eagerly main- tained on both sides, there began in this country an educational movement among the masses, that is destined to have far-reaching consequence. The public attention was fastened, as it had never been fastened before, on the subject of money, and on the forces which govern its value, and up to this time that attention has never flagged. As a result we find the great body of ourpeople to-day the farmers and artisans of the country after years of reflection and dis- cussion in their lyceums and trade organizations, adopting to a large extent the views then presented by the advocates of an increased money volume views which at the time were contemptuously de- rided by the advocates of contraction and of gold. The cry for relief appropriately now comes from the farmers, the artisans, and the laboring classes, as well as from the young, the enterprising, the thoughtful, of all classes, who have not inherited wealth, but are hewing out for themselves the rugged path to suc- cess. It is they who have had to bear the' exactions of the system which has prevailed. It is from the proceeds of their labor that the extortions have been paid. If objection be made that the character of relief proposed is not indorsed in financial circles, or by the liter- ary guild or professional political economists that surround them, the sufficient reply is that the world can not wait for the correction of abuses by those who are profiting by them. In the nature of things, all movements for reform must be initiated by those who can not lose by the installation of justice. But there are others besides the laboring masses who are working in the cause of humanity. There are noble, unselfish, and altruistic men in all the countries of civilization, who see the wrong and are indefatigable in their efforts to set it right. I will read a cable dispatch recently addressed to me by Mr. Henry H. Gibbs, formerly governor of the Bank of England, and now pres- ident of the Bimetallic League of Great Britain : LONDON, May 6. The friends of silver deeply regret the death of Senator Bpck, whose services in the cause of monetary reform are most warmly appreciated on this side of the Atlantic. The bimetallist party of tte United Kingdom, now including over one hundred members of the House of Commons, attach the greatest value to the debate about to commence in your illustrious chamber. Vv~e fully recognize not only that the support afforded to silver by your legislation during the last twelve years has helped to protect the industrial world from an acute mon- etary crisis, but also that the debates in Congress have served more than all _else to educate our people to recognition of the important issues involved. We believe JONES 30 also that th- increase and coinage of silver rout ernpl.i'ed l>y < wholly r c"iiMderably, your i ^ ill thus inaki- nit Mr. Moreton Frewen, of London, an able writer on economic subjects, whose recent work on the "The Economic Crisis" I com- mend to the- careful perusal of Senator-, says: It may. indeed, be affirmed, without fear of contradiction. that 'lesUlat ion ar- ranged iu the intei. .in class. tirat by Lord I Ibil country. auil ajcain by Sir Robert IVelat theinsti-an.inot M i. I one* I.UM! apd other wealiliy - MipplemcnUMi recently by simultaneous antisih . IL I'.t-ilin and Washington ut the instance <-t the 1:1 cat rir.anci.i. :uu ban about doubled tin- burden of all national debts by an artificial i iih.iiicenient of the value of money. Tin- fall of all prices induced by this cause bns been on sucb a Rele that while in twenty years the National debt of the I'nited St:it, s , pi ted in dollars d by nearly t o-thirds. yet the value of the remaining on.- -third, measured in wheat, in bar iron, or bales of cotton, U en: demand draft on the labor and industry of tlie nation tlnin w- tlie whole di-lit at /ranted. The aggravation of the burdens <>i taxation induced tppreeUtionofeold," which is no natural a]i|iri-ciation. but has I'l-eri brought about by class legiaUtlOfl to inclease tin* value <.t" the ^old .v Hiires but to be explained to an enfranchised den-. which will know bow to protect Itself again*! t'unli.i .uti-miits io conir.u-t the ncy and to force down prices to the cont'mion of <-\ r\ i-\iit:n^ c-.n; claasea of middle-men, banker- have b.-i-n by t'.n- the most successful in unl appropriating an undue shar- of pi-mluced wealth \Vlii'.- ih.- :, ot banktnic and credit may be said to be even \et in ltd i - of the community which is to-day in the ntron_ 15 would, if declared, be an'nstoiindin^ revelution of ih. jiarticular Imsiness; and not onlv has he bu.siiiesi Itw inntioiiiily. but it-* inli-r.'sts in a very few hands are uiametncally lal interests of the mniority. -n intends: tra- r the currency and force down all prices, including vvaces. th- \n :< paid for IUT has been able to increase the p i sov- diminution of the price of every kind of pro] . rt \ nu-nsured in i: tWFUI.KILI.EI) 1-KDfHECIE*. l>;irinjj the debate on the limited eniii:i^i- liill, not content with abuse (if the al with llun>\ criti. i-.rn of it M iU-Kiiinents arjait^t it. its opponent* in and out of Con - . divi-rs jirophi-cies and predictions. They pirtnn <1 forth the laiiieiitalil.- n-.nl :s that would follow it.s pa>.-.ai:'. and the din-fill riinse|in-nre.s that would ensue from an increase of tin ni'-dinm of th<- fonntry Amonn the n--ults nmlidfiit \\ere the follow in<; : that the silver would not Hrm tin that it would circulate to t In -\i hiMoli of ^old, whirh ntMi-iiied, would tlo\v rint rs a dollar worth only \Ve \v of the bill would postpone the refunding of the ]nil.l:i debt, nild WiHlld mil linpHi: 6 of otir 11:1 1 uni.i 1 sei-nritu diutry tl atuiti; targed with nttving : with 31 lowering the standard of American credit; with tarnishing the integrity and honor of our country before foreign nations, and with unprecedented moral turpitude insetting au example of flagrant and shameless national dishonesty. The men of the far West, and of the Pacific slope especially, were the particular targets of this abuse. They were denounced by some as " lunatics," by others as dangerous and unworthy demagogues, be- canse, as was charged, their constituents, if not themselves, were di- rectly interested in the restoration of the ancientright of silver to fall recognition as one of the money metals. For their benefit resort was had to every epithet which the English language afforded. In holding them up to public scorn the rich and varied vocabulary of odium and opprobrium was exhausted. These prophecies of disaster were united in by the professors of po- litical economy in all the Eastern colleges, by the President of the United States, by the Secretary of the Treasury, by the leading Amer- ican newspapers, by the principal public men and journals of Great Britain, if not of all Europe; and, of course, by all bankers, money- lenders, and professional financiers the world over. And now, Mi. President, how many of all those alarming prognos- tications by all these distinguished prophets have been fulfilled ? Not one! On the contrary, it is not too much to say that the pub- lic credit of the United States is to-day the highest in the world. It does not stand merely in line with that of other first-rate powers ; it stands at the head. Our gold, silver, and paper money stand at a parity with each other. If a full measure of relief was not realized by the passage of that bill it is because the coinage of $4,000,000 a month was left optional with the Secretary of the Treasury, instead of being made mandatory on him. But it is hardly necessary to assert that the predicted inflation of prices has not been observed as a consequence of thecoinage of $2,000,- 000 a month. While the issuance of that amount has not, with our rapidly increasing population and wealth, been sufficient to arrest the downward tendency of prices, it has undoubtedly prevented them from falling much lower. Without that coinage, we should have had industrial depression, chronic and somber, with consequences of un- told disaster. But the result which gave most apprehension to those who advo- cated the gold standard, the evil which they regarded as on tue whole the most threatening and direful of all the evils that were to result from even so small an increase in the money volume as that bill pro- vided for, was the outflow of gold. They ridiculously under-esti- mated the tremendous money-absorbing power of this great country. And as if to emphasize to all the world the complete absurdity of their alleged fears this apprehension has been conspicuously and no- toriously set at naught by the constant inflow of gold. On the 30th of June, 1878, the amount of gold coin and bullion in the Treasury and in monetary circulation in this country is officially reported to have beeu $>'Ji:?, 199,977, and this amount is probably much over- estimated. On November 1, 1889, we had more than three times as much the amount of gold in circulatioa and in the Treasury being reported as $1^89,000,000. " Experience," says Dr. Johnson, "is the great test of truth, and is perpetually contradicting the theories of men," and the last ex- perience, Mr. President, is the best. If the professors of political economy, the Eastern newspaper ed- itors, and tue professional financiers were then so seriously mistaken ought they not to be a little m>' .redictioi. .ally in renewing predictions tl Ij di-credi: They can not point To a \!iich their prophesy ha-. - tied iy the event. So hutoilvtting a failure on. tln> part of tht> professors. i;i a realm of wliich tln-y boastfully claimed to be m. i- i .ivvrthrosv o!" the>.- -" by men who were ridiculed and derided as rural financier, an 1 cra/.y theoi ought to put the advoca'e, of the gold standard on their guard against a like defeat on thi- . They are pressed for reasons to account for tin- utter in -if th'-ir prophecies. They arc left without .1 shadow of consolation except that the eoina^ rth of silver bullion each month has not succeed. -d in placing silvi-r at a par withhold. They affect to believe that the advocates of silver in 1-7-* expected that th-it meial, mnler the very limited demand of $,000,000 a month, would lie brought to a level with gold, which, owing to the demonet i/.ation of silver, had i abnormally and ruinously in value. ;eh belief was ever entertained or cxpres.-ed. On the contrary it was rejieatedly asserted by the ad . silver that so lonji :he entire yield of ^old from all the mines of the world (in i $119,000,000) WM inve>[xl with the full ney function and had tree access to all mints to be transmuted into coin, it could not be expected that the conferring of the legal-tender function upon a sum so com- paratively trilling as one- fou rth the yield of silver (the yield in 1-7- being $119,000,000) would have the effect of placing it on a level with fold, It is, however, a significant fact that every silver dollar that has been coined under that act is at a parity with gold, and will to-day buy as much of all the objects of human desire as will the gold dollar. , more, silver bullion disparaged and discredited as it is by being shorn of the money function, and denied ai <- to the mints, instead of decreasing in purchasing power, has maintained so steady a rela- tion to commodities that I1'J : grains of uncoined si Ivi-r will exchange for as much to-day as would the coined dollar, whether of silver or gold, in 1-7:*, when the full money function altached equally to both metal*. If this be true and I shall present ly demonstrate it beyond refutation what an utter p. -rveision of terms it is to say that oilvcr Las falleu^n value! WILL BKMO*KT1ZAT!O.X PLACE US ALOM58IHE IXI'IA. . We are solemnly warned that the full remoneti/atioii of silver in the I'i. - would place us alongside India and the other barbaroiiH lie world. This brilliant i .^ is advanced with ^reat confidence, and is intended to be conclusive of the argn- ni'-nt ;i gainst silrer, lint. Mr. Piestdent, India \u no more harb.i now than it was [i ..ur silver dollar \\asdemoiielix.ed. India is no more barbarous now than it was in ]-,")?. when (iermany :ion-ti/ed gold and placed herself "alongside" India. Neither is HOW than then. We did not at that time hi i >:iipl.iint, either in the I'mte-d States or Ku: that the iiM- of sil VIM a- ni'jney p! . nc nation more than any othr in da: iatii:i with the ci vili/aiion of India. We have never }> vili/atii>i; ! niia by the imni'-n^- i|iiantity ol silver icr did We hear it el: :i-t t he I 'lilted State, up to ] -;.: that we \\ i>arliaroiiH nations by our use of silver as ui" 33 Up to 1834 we bad no metallic money other than silver in our cir- culation, and up to 1850 we had much more silver in circulation than gold. Were we "alongside" India then? Where were the wise and patriotic men of our country at those periods ? History fails to record any protest on their part that we were placing ourselves " alongside " India or any other of the barbarous nations of the world by our use of silver and onr recognition of its full money power. All the nations of the earth used silver and accorded it full recognition as money equally with gold up to 1819. Was a'l Christendom at that time "alongside" India? When, in that year, Great Britain sundered the silver link that from time immemorial had kept her " alongside" India and the other barbarous nations and, for selfish reasons of her own, arising from her position as a creditor of all other nations, decided to recognize gold only as money, was any evidence afforded of a sudden advance in the civilization of Great Britain ? Was the emergence of that nation from the benumbing companionship of India and the other barbaric countries into the glittering and refulgent light of the gold dispensation signalized, as would be expected, by a corresponding improvement in the condi- tion of the people ? On the contrary, the history of the time informs ns that as a con- sequence of the passage of the bill by Parliament in 1819, compell- ing payments in gold, prices rapidly fell, cotton in particular sinking in the short space of three months to one-half its former level. With- in six months all prices had fallen one-half, and showed no signs of improvement for the next three years. By reason of the contraction of the currency the industry of the nation was congealed, as is a flowing stream bv the severity of an arctic winter. Alarm became universal; confidence and activity ceased. Bankruptcies increased in 1819 more than 50 per cent, over the number of the previous year. Meetings were held throughout England in which the people called on the government to devise some means of redressing the situation So universal was the distress that the owners of laud in England, who in 1819 numbered 160,000 were in seven years, by forced s ties and foreclosure of mortgages on the smaller farms, reduced to 30,000, and one in every seven of the population lived on organized charity. All this was but a part of the price which the people of England paid for a policy imposed on them by the creditor classes among their own unmber. The condition of industry and disorganization of labor led to frequent and serious conflicts between the people and the mili- tary. They also led to commercial crises without number, and Eng- land, by demonetizing silver and thus ceasing to be "alongside" India, became the seat of panics, as Egypt had long been of the plague and India of the cholera. As a contrast to this I will merely cite the change in the condition of India within the past seventeen years. When the Western world discarded silver as money and, as a consequence, India received a larger supply of it than ever before, that barbarous nation, as is uni- versally admitted, made progress by leaps and bounds. No country on earth has in the same time made such advances in material pros- perity and in all the elements that conduce to the comfort and hap- piness of a people. Notwithstanding the alleged debasement of silver, no sooner had its increased inflow into India begun than the industries of a vast continent were established and set in motion, and a substantial part of the activity and prosperity that were wont to pervade some of the industries of the United States has, by that JONES 3 34 demonetization, been transferred to fields of wheat, and fields and factories of cotton 10,000 miles distant. \Vh:it really placed as alongside such barbarous countries as India was the demonetization of silver. It was by that demonetization that the people of Europe were enabled, with gold, to buy silver at 'Jo per trni. discount, which, when shipped to India and coined into rupees, would buy as much wheat as could ever have been bought with that coin. There has been no decrease whatever in the pur- chasing power of the rupee in India. This was equivalent to buy- ing wheat at 30 per cent, below the price theretofore paid for it, and thin the farmers of the United States were by demonetization placed "alongside" the barbarous people of India. Their wheat had to compete in the European markets with the wheat of India, and it ompetition that placed them "alongside " India. The farmer of this country, then-fore, by demonetization of silver, was compelled i>ete with under-paid and half starved ryots. And so it was that our cotton planters, by the demonetisation of silver, were placed alongside the barbaro'us people of India. It is this degrading competition that places a highly civilized people alongside a barbar- ous one. The advocates of the single gold stand ml deem even silver money much better money than greenbacks. Does it then follow that when greenbacks were our only money good enough money to c;ury the nation through the greatest war in all history we were "along- side" or underneath the barbarous nations of the world T It is not the form, or the material of a nation's money that fixesitsstatns relatively to other nations. That is accomplished by the vitality, the energy, the intellectuality and effective force of its people. The United States can never be placed " alongside " any barbarous nation, ex- cept by compelling our people to com pete with barbarous peoples compelling them to sell the products of American labor at prices reg- ulated by the cost of labor and manner of living in barbarous conn- trie*. An well might it be s id that we are alongside the barbarous people of India because we continue to produce wheat and cotton. The distinguishing feature of all barbarous nations is the squalor of their working classes. The reward of their hard toil is barely enough to maintain animal existence. A civilized people are plact -d alongside a barbarous one when, in their means of livelihood, the foundation of their civilization, they *re made to compete with the barbarians. That was the result accomplished for the farmers and planters of the United States when silver was demonetized. CKKPITOHB AXI) DE1ITOIIA. A COMPARISON OF MOTIVE*. All movements for the increase of the monetary < n dilation are ascribed by the money-lender* and creditor elates to the unworthy desire on the part of the debtors to escape their just obligations. But if motives are to be brought in question, tin- rule should work note is taken of the motive ,,f the creditor < lasses In securing a contraction of the circulation. Whatever the nppar. nt purpose of contrail ion, and 1. i the arguments ad- vanced MI :. teal object has always be-n to i: the purchasing ;, In all count i ,, -. ami throughout all npid.tv oi the creditor classes and annnitair crease the value of the in.. ne\ unit that has brought about a shrinkage in the moi.ey volume. Cnlike the great masses of the people, who were ignorant of the effects to be natum from such a shrinkage, the annuitants and moneyed men v. ; understood that the value of every pound or dollar depended on tin- 35 * number of pounds or dollars that were in circulation ; the larger the total number out, the smaller the purchasing power of each ; the smaller the total number out, the greater the purchasing power of each. Loaners of capital are not usually those who entertain further hope of personal achievement. When it: en realize fortunes it is rarely that they conserve the faculty of initiative; they find no special delight in novelty ; they look so carefully to security in the use of money that the spirit of adventnre is restrained. The realization of a fortune \s usually the labor of a life- time, and few men who reach the goal care to retrace their steps to enter again upon a struggle that demands all the strength, the momentum, and the intrepidity of youth. Men of assured incomes therefore are disposed to take their e,ase, and society must look, for its material progress and development, to those %vho have a career to make, with the ambition and the power to make it. It is a remarkable circumstance, Mr. President, that throughout the entire range of economic discussion in gold-standard circles, it seems to be taken for granted that a change in the value of the money unit is a matter of no significance, and imports no mischief to so- ciety, so long as the change is in one direction. Who has ever heard from an Eastern journal any complaint against a contraction of our money volume; any admonition that in a shrinking volume of money lurk evils of the utmost magnitude? On the other hand we have been treated to lengthy homilies on the evils of " inflation," whenever the slightest prospect presented itself of a decrease in the value of money not with the view of giving the debtor an ad- vantage over the lender of money, but of preventing the uncon- scionable injustice of a further increasing value in the dollars which the debtor contracted to pay. Loud and resounding pro- tests have been entered against the " dishonesty " of making pay- ments in " depreciated dollars." The debtors are characterized as dishonest for desiring to keep money at a steady and unwavering value. If that object conld be secured, it would undoubtedly be to the interest of the debtor, and could not possibly work any in- justice to the creditor. It would simply assure to both debtor and creditor the exact measure for which they bargained. It would en- able the debtor to pay his debt with exactly the amount of sacrifice to which, on the mak'ing of the debt, he undertook to submit, in. order to pay it. WHO ABE THE DEBTORS? In all discussions of the subject the creditors attempt to brush aside the equities involved by sneering at the debtors. But, Mr. President, debt is the distinguishing characteristic of modern society. It is through debt that the marvelous developments of nineteenth cen- tury civilization have been effected. Who are the debtors in this country ? Who are the borrowers of money ? The men of enterprise, of energy, of skill, the men of industry, of foresight, of calcula- tion, of daring. In the ranks of the debtors will be found a large preponderance of the constructive energy of every country. The debtors are the upbuilders of the national wealth and prosperity; they are the men of initiative, the men who conceive plans and set on foot enterprises. They are those who by borrowing money enrich the community. They are the dynamic force among the people. They are the busy, restless, moving throng whom you find in all walks of life in this country the active, the vigorous, the strong, the undaunted. These men are sustained in their efforts by the hope and belief that their labors will be crowned with success. Destroy that hope and 30 yon take away from society the most powerful of all the i: material development ; yon place in the pathway of progress an ob- \vhich it is impossible to surmount. The men of whom I have spoken arc undoubtedly the first who are likely f be atl'ected by a *hr,;iKage in the volume id" money. The highest prosperity of a nation is attained only when all its people are employed in avocations suited to their individual apti- and when a just money system insures an equitable distribu- '. the product* of their industry. With our mplex civilization, in order that men may have constant emplo\ ment, it is usable that work be planned and undertakings pi. ;n advance. Without an intelligent forecast 01 enterprises t" workmen nr .illy be relegated to idle- Dntcrprises that take years to complete must becont: for in advance, and payments provided for. A constant but unperccived rise in the value of the dollar with which those payments must be made, bailie-* all plans, thwa calculation, and destroys all e< : .ecu debtor a: If we can not intelligently regulate, our money voln:i.. maintain unchanging the value of the money unit, if we can not :-om the hlighti- \vhich an incr. the measiirii.g power of the money unit entails upon all imln- what purpose is our boaste I civilization t ]'.y the increase of that measuring power all i !i*ap- d, all purposes batiled. ail etlbrts thwarted, all calculations ] '.'die enlargement in the measuring power of the unit of money ithe dollar) ath munity. Like a poisonous drug in the human body. : i;ber and filament of the ind structure. The debtor is lighting for h: - -isf an enemy he .aiiist an inlln.-nee In- >'.< anil. For. while his calculations were \\ell and intelligently made, and the amount of -:;s of hi* con! racts remain th- the weight of all his obligations has been increased by an insidious increase in the \alm- of the money unit. EFFECTS OF A SHKINKIM! VOLUMK OF MOXKT. benumb: , following a shrinkage in the volume of money. I In- testimony of history is l.riell \ in the of t lie Mi in tai \ ( 'on i m is, ion to which 1 has e alrea.. and from which I read the fidlowii Ml in ' ami ftvedon all ilmappMiriMl. Tne pooplft were reduced i M- Kni|itrn - K in ' -u lUno w 37 ure from the New World were needed to arouse the Old World from its comatose sleep, to quickeu the torpid limbs of industry, and to plume the leaden wings of commerce. It needed the heroic treatment of rising prices to enable society to reunite its shattered link.*, to shake off the shackles of feudalism, to relight and uplift the almost extinguished torch of civilization. That the disasters of the Dark Ages were caused by decreasing money and falling prices, and that the re- covery therefrom and the comparative prosperity which followed the discovery of America were due to an increasing supply of the precious metals and rising prices, will not seem surprising or unreasonable when the noble functions of money are considered. Money is the great instrument of association, the very fiber of social organism, the vitalizing force of industry, the protoplasm of civiliza- tion, and as essential to its existence as oxygen is to animal life. Without money civilization could not have had a beginning ; with a diminishing supply it must languish, and, unless relieved, finally perish. Symptoms of disasters similar to those which befell society during the Dark Ages were observable on every hand during the first half of this century. In 1809 the revolutionary troubles between Spain and her American colonies 'broke put These troubles resulted in a great diminution in the production of the precious metals, which was quickly indicated by a fall in general prices. As already stated in this report, it is estimated that the purchasing power of the precious metals in- creased between 1809 and 1848 fully 145 per cent., or, in other words, that the gen- eral range of prices was 60 per cent, lower in 1848 than it was in 1809. During this period there was no general demonetization of either metal and no important fluc- tuation in the relative value of the metals, and the supply was sufficient to keep their stock good against losses by accident and abrasion. But it was insufficient to keep the stock up to the proper correspondence with the increasing demand of advancing populations. The world has rarely passed through a more gloomy period than this one. Again do we find falling puces and misery and destitution inseparable companions. The poverty and distressof the industrial masses were intense and universal, and, since the discovery of the mines of America, without a parallel. In England the suffer- ing of the people found expression in demands upon Parliament for relief, in bread-riot*, ami in immense Chartist demonstrations. The military arm of the nation had to be strengthened to prevent the all-pervading discontent from ripen- ing into open revolt. On the Continent the fires of revolution smoldered every- where, and blazed out at many points, threatening the overthrow of states and the subversion of social institutions. Whenever and wherever the mutterings of discontent were hushed by the fear of increased standing armies, the foundations ot society were honey-combed by powerful secret political associations. The cause at work to produce this state of things was so subtile, and its advance so silent, that the masses were entirely ignorant of its nature. They had come to regard money as an institution fixed and immovable in value, and when the price of property and the wages of labor fell, they charged the fault, not to the money, but to the property and the em- ployer. They were taught that the mischief was the result of overproduction. Never having observed that overproduction was complained of only when the money stock was decreasing, their prejudices were aroused against labor-saving machinery. They were angered at capital, because it either declined altogether to embark in industrial enterprises or would only embark in them upon the con- dition of employing labor at the most scanty remuneration. They forgot that falling prices compelled capital to avoid such enterprises on any other condition, and for the most part to avoid them entirely. Thev did not comprehend that money in shrinking volume was the prolific parent of" enforced idleness and pov- erty, and that falling prices divorced money-capital, from labor, but they none the less felt the paralyzing pressure of the shrinking metallic shroud that was closing around industry. The increased yield of the Russian gold fields in 1846 gave some relief and served as a parachute to the fall in prices, which might otherwise have resulted in a great catastrophe. But the enormous metallic supplies of California and Australia were all needed to give substantial and adequate relief. Great as these supplies were, their influence in raising prices was moderate and soon entirely arrested by the increasing populations and commerce which followed them. In the twenty- five years between 1850 and 1876 the money stock of the world was more than doubled, and yet at no time during this period was the general level of prices raised more than 18 per cent, above the general level in 1848. A comparison of this effect of an increasing volume of money after 1848 with the effect of a decreasing volume between 1809 and 1848 strikingly illustrates how largely different in degree is the influence upon prices of an increasing or decreas- ing volume of money. The decrease of the yield of the mines since about 1865, while population and commerce have been advancing, has already produced unmis- takable symptoms of the same general distrust, non-employment of labor, and political and social disquiet, which have characterized all former periods of shrink- ing money. JONES 38 The time that has elapsed since that report was written has but erved to verify ami emphasize its statements. THE FALL OF 1'HICEfi B1XCK 1873. It is a fact not ilisputi'tl anywhere but nni\ e:-.i!ly admitted, that for many years past the jiriee.s of all artiele-, entering into general fonsiiiiiption union;; the ptopl- liuvo IU>M> steadily falling. It is obvious that the industrial conditions pn-\ ailing Miiee l-?;i ate Init a repetition of thoce above described a following l>u9 \\ith fall- inn prift', coiiKtunt nmvM. and universal discontent. !ollo\vin-.- - .. ., 9 9 20.4 10.8 6.9 7.0 .543 1.245 11.5 23.3 8.6 6.7 7 4 .552 1 114 " Hi 11 4 22 6 10 3 v | 9 3 , i> 6. 149 11 4 20 9 9.1 9.9 11 6 lp8a.... 1884 .684 .611 1.U06 5.955 :, IH lu.6 10.5 11.1 20.6 8.8 11. -J in L 1 11.9 9.5 .540 882 4 897 10 6 19 8 8.7 2 7 9 .498 .870 4 699 9 9 19 9 8.7 6 9 1887 .479 .890 4 510 9 6 7 8 7.9 7.1 .560 n 4.679 9.8 7.9 K 7 7 18e9. .474 .897 4. KG 9 9 16.6 7 8 8 6 8.6 Y*r rndlng June 30 Pork. nalf-,1. ' ' ; :: t Hull, r IKT '! . i ii. Starch ,.,r JlOtlllll. Sugar. Toliac- ro. li-af, CfnU. 82 10 6 7. 7 8.2 8.7 Omu. 2-X9 Ota* 18.6 12 6 < : 7, > 26.6 2.V6 28,0 OtnU 6.0 / . ," 11.6 10 7 / 1 ', 96 11.8 10 4 9.0 7 5 11 8 S.V9 | ll n 6.8 4 7 4.7 6.3 8 II 4 2 7 8 6 1 0.4 17 1 9 6 ; 4 3 0.5 19.8 4 7 K.8 9 8.5 19 S 4 X 8 5 9. 9 K.9 18.6 11 "i 2u 9 4.6 8 6 ".It 7.6 21.2 4 f, 7 j 7.2 21 6 4. 4 9 9 ., 6.9 6.0 15.6 8 :i 4 ] 6 7 7 8 : 6.6 7 ( 5.5 l.VK 16.6 .> 9.9 9.S It. 9 13.9 3.8 3.6 3 8 6.0 6. 8 7 6 8.7 83 8-8> 39 To show from another source the same general fact of the decline of prices, I quote from an article published in the New York Tri- bune early in 1886. The New York Tribune is pretty good authority. These figures are undoubtedly from the calculations and from the pen of Mr. Grosvenor, of the editorial staff of that able journal, formerly editor and proprietor of the "Public," whose estimates of prices have, iu my judgment, been more correctly made than those of any other statis- tician in the world. The article is as follows: Quotations of about two hundred articles are compared since 1860, and the amount of money is ascertained which would purchase, at different dates, of these various articles, quantities sorreeponding as closely as possible to their ascer- tained consumption in 1880, the date of the last census. Amog the articles com- pared are wheat, corn, oats, rye, barley, beans and pease, tuesspWk, bacon, ham, live hogs, lard, fresh beef, tallow, live sheep, poultry, butter, cheese, eggs, milk, hay, Eotatoes, turnips, cabbage, onions, apples, raisins, sugar, brown and crushed ; mo- isses, coffee, tea, tobacco, whisky, malt and hops, mackerel, codfish, salt, rice, nutmegs, cloves, pepper, cotton, print-cloths and standard sheeting, wool of differ- ent qualities, blankets, carpets, n nnels, leather, boots, shoes, hides, silk, India rub- ber, iron (pig and bar), nails, steel rails, coal, oil (crude and refined), tin and tin plates, copper, lead, hemp, lumber, spruce and pine, oak, ash, walnut, and white wood, lath, brick, lime, turpentine, linseed oil, so ip, glass, paper, white lead, and twelve other kinds of paints, fertilizers, and over fifty kinds of drugs and chemi- cals. * * * * * * * Cost of products at different dates. Dates. Cost in currency. Price of gold. Cost in gold. 1860, May 1 $100. 00 $100. 00 $100. 00 1865 November 1 174. 77 145. 87 119.81 1866 May 1 157.60 125.12 126. 04 1866 November 1 170.31 146. 25 117. 82 1871, November 1 122. 03 112. 00 108. 95 1872, May 1 137. 13 112.50 121.81 1873 November 1 115.14 108 50 106. 01 1874, Mayl 122.77 112. 87 108. 77 1875, January 1 ... 113.01 1 L2. 37 100. 37 1876, October 1 97.30 110. 00 88.45 1877 May 1 99.29 106. 75 93.01 1878 May 1 82.09 100. 37 81.81 1878, October 18 77. 94 100. 37 77.65 1879 November 1 93.48 1880 January 1 . . . 103.42 95 98 188' May 16' 100 59 1883 March 13 97 8 188 !, November 1 .. 88.71 1884 January 1 . 88.37 1884 November 21 78 47 1885, January 1 1885, Mav 9 79.66 80 22 1885 Au"ust, y> 74 56 1885 November 1 75 35 18d5,Close" 78.53 It is not only clear from this comparison that the pi-ices of 1885 have been the lowest in our history for twenty-five years, but that there has been a general ten- dency toward lower prices. From 1866 to 1871, and again from 1872 until 1885 prices fell quite steadily. Indeed, had not the short crop of 188t caused a temporal", ad- vance in the spring of 188-, the ranf>v, 1871, to May, 1872, aud25 percent, from October, 1878, to January, 1880. 40 But thee paamodic advance*, by which the general tendency downward in inter- rupted, only terre to make it nior~eclr.it that |tiu-e* have been tending irresistibly toward a lower level than that of I860, not onlv during the period of paper depre- ciation, but ainc gold baa been the moaaure of value. In order to show that the United States are not alone in their com- plaint of falling prices, but that tin- complaint is universal, and in order that we may have before us a broad view of the lioUl of general prices, I submit a table showing the relation to each other ot the range of prices from 1809 to 1849, by decades, baaed on tin- prices of lifty leading articles of commerce, prepared by the distinguished -sor Jerons and published in the London 'Econom ist for Muv 8, !> Taking the raflfee of prices of 1849 as a datum line (the range for that year being the lowest of the century) Mr. Jevons works back- ward to 1HC.I, when tin- revolt >t tin- South American colonies against the aiitlioiity of Spain shut off at a blow tin- supplies of the pi metals, and set on toot a money famiu from which the world knew no relief till the discovery of the mines of California and Australia. l'r.i, s>,,r Jevons's figures are as follows, the prices of Ib49 being represented I -y 100: Relation ofpricet, 1809 to 1849, b f which yean* the figures bore to tin--,, ot l-i;i the 101). It has never been denied that this rise was due to tin- increase in the world's money supply by the yield of the pre- uietalsfrom the mines of Californiaaiid Australia, the ctibcts of wliich, however, as will be seen by the table, were not felt on prices till 1853 live yearn after John Marshall's discovery of the yellow metal in the tnil-rac^at Suiter's mills. Yet, because it interfere* with the pecuniary interests of a large and influential class, it is vehe- . denied that the fall of prices since 187:1 is duo to a decrease in the volume of the money caused by the demonetization of silver in that year throughout the western world. ' and after that year, aa will In- perceived by an examination of the figure*; in other words, from the year when one-half the world's ;>!y wan deprived of the immcy function, we find an almost i mptod decline of prices. The figures of 1873 and 1885 will be een to boar to one another the relation of l:H to in-. or a fall of -"J percent, in twelve yean. Should the fall continue at that rate with- "'t !'' and there is no reason apparent why it should not, wesUall in forty years hare witnessed a decline of'T;> per cent, in of prices a decline considerably greater t ban t hat Irom l-enod of nearly forty years. He takes as a basis the general range of gold prices pro- 41 vailing between 1847 and 1850, and calling that range 100, shows the relative standing toward it of the general range of prices for subse- quent years, up to 1885. Relation of prices by years from 1849 to 1885, the general range of prices of 1849 being rated at 100. 1849 100.00 ! 1869 123 38 1&51 100.21 j 1870 122 87 1852 101.69i 1871 127 03 1853 113 69 1872 135 62 1854 . 121.25 lfr-55 l->4 23 1873 . 138 28 1856 123.27 1857 130.11 1874 136 20 1858 113 52 1875 1''9 85 1859 116.34 1876 128.33 I860 r_'t>. * 1877 . 1<>7 70 1861 11^.10 1878 VO 60 1862 122.65 1879 117.10 1863 12."). 49 1SSO . I'Ji 89 1864 129.28 1881 1?1 07 1865 122.6.1 1882 !->'>. 14 1866 125.85 1883 122.24 1867 ]24 44 1884 . 114 ->5 1868... . 121.99 1885... . 108. 27 Mr. Sauerbeck, also an advocate of the gold standard, and whose work has the approval of the Statistical Society, takes as a datum line the prices ruling from 1867 to 1870. Rating those at 100 he finds that by 1873 prices had risen to 111, by 1886 they had fallen to 69, and by September, 1887, to 68.7. He declares the average prices for the first nine months of 1887 to have been the lowest reached for a hundred years. BOTH GOLD AND SILVER VAKIABLK D? VALUE. The fact that the inetals have separated considerably since 1873, and that silver bullion now sells at less than par value of $1.29 per ounce, is taken to signify that silver has fallen not that gold has risen. This proceeds from the assumption that whenever a change takes place in the relation between gold and any other article the change must necessarily be in the other article. This assumption, in turn, is based on the absurd idea that calling gold a " standard " will insure it against change. Among political economists it is a well-recognized principle that neither gold or silver is exempt from the universal application of the law of supply and demand. That law governs gold and silver, not only as commodities, but as money, and governs as well all other kinds of money that may be used. And while the advocate of the single gold standard is at all times ready to concede the truth of this assertion as to silver, he is confident that it does not and can not apply to gold; that the economic law which makes supply and demand a regulator of value is suspended as to gold. That a metallic money, whether of gold or silver, is very far from being stable is admitted by innumerable authorities, of whom I will cite only a few. Dr. Adam Smith, in his "Wealth of Nations," book 1, chapter 5, says: Gold and silver, like every other commodity, vary in their value. The discov- ery of the abundant mines of America reduced in the sixteenth century the value of eold and silver in Europe to about a third of what it had been before. This revolution in their value, though perhaps the greatest, is by no means the only one of which history gives some account. JONES 42 And again : Increase th scarcity of c'J to certain degree and the smallest bit of it may be more precious than a diamond. John Locke, "Considerations, etc., in relation to money" (pub- lished in 1691), says: The greater ACArcitv of money enhances its price and increases ' then being nothing that does supply the want of it ; t! ..intity, s its price and make* an equal portion of it exchange for a greater of any other thiiu'- Prof. Francis A. Walker, " Money," etc., page 210, says : Gold and silvr do, over 1 >nz periods, undergo great change* of value and be- come in a high degree deceptive M a measure of the obligation of the debtor of i of the rr.-ditor. Tim* I'rot' twor Jevons estimate* th.it tin- value of between 1788 an I ISO i, 40 per rent., that from 1S09 to 1819 it ruse 145 per cent, while in twenty yearn alter 1MO it Ml again at leaat 20 per cent. Jevons, "Money and Exchange," chapter 6, says: In respect to steadiness ef value the metal* are probably leas satUfactory, re- garded aa a standard of value, than many other comnioditiea, such ai curu. And again, in chapter 24 of the same work, he says: We are too much accustomed to look upon the value of gold as a fixed datum line in commerce; but in reality it is a very variable thing Sir Archibald Alison (England, in 1-<1.~> and 1- J.">\ says: The coining of gold and silver, which is universal in all civil z<- 1 nation*, and af- lo them one drfluiu* and perm me-nt valu* by authority ofl.iw. ha* no effect whau-ver in preventing the fluctuations In the real value of the current coin of the realm. Professor Langhlin, of Harvard, in his. work on Political Econ- omy (page 72), says: lite evident that the name dollar doe not alwavs have the same value, although jvc- :.k it does. We get into the habit of using nan. out thinking what they really m.-an. The 23.?.! gr.im in a gold dollar m:t i !. an _: -.iin'tiriiri !,,r r:i..ri- ..uif! iimw tor liv%, of ntliet OOSBBOfHtiM, \V': n ; A fallen n-lativelv to all otln r commodities, and, ereo if the name dollar i< Mine roiiiin-.i That U, when mooey i value, price* riae; when mon.-y ri*- 1 ; ricen full. we ahall aay a few words in r<-gar \. .4:-. In . |\.0"0 bousht a c.-rtin quantity of rom, wheat, sugar, salt, wood, hata, ui In 1900, when you are to pay me back the $1,000 in moiit . langed. yon may give me b*ck toe mi> amount of moor ^ the same purchasing power ovrr oti fallen b*iwB 1880 and 1900. it will tk- 1. -. ,,,,;, ,- Mime qtiu. before of eoru, wheat. tc. If M>, t h<> $1 000 you r raltt" than the 91, 000 I gan- \ou. an unjust to o i borrowed !,.-n th- *I 000 In moti-\ w..iil.! buy in.- !. tli i ^l.oiil.l :<. * * ' the vain.- of money (gold or niivrri de not remain the name for any 1 : TI.. .1 !..'.:. i : . :inge which do not take very long to aa a proper meaaur* of rain* during long tana of years. In- n<>ll *t:intli.-r that ban ever appearnd ii hare nevrr i .-. P . 43 In his "Proposals for an Economical and Secure Currency," Ri- cardo makes the following statement, which I commend to the care- ful attention of the advocates of the single gold standard : "While a standard is used, we are subject to only such a variation in the value of money as the standard itself is subject to; but against such variation there is no possible remedy, and late events have proved that, during periods of war, when gold arid silver are used for the payment of Lirge armies distant from home, those variations are much more considerable than has been generally allowed. This admission only proves that gold and silver are not so good a standard as they have bi'.-ii hitherto supposed that they are themselves subject to greater variations than it is desirable a standard should be subject to. They are, however, the best with which we are acquainted. If any other commodity less variable could be found, it might very properly be adopted as the future standard of our money, provided it had all the other quali- ties which fitted it for that purpose ; but while these metals are the standard the currency should conform in value to them, and whenever it does not, and the mar- ket price of bullion is above the mint price, the currency is depreciated. This propositionis unanswered and is unanswerable. Much inconvenience arises from using two metals as a standard of our money ; and it has long been a disputed point whether gold or silver should by law be made the principal or sole standard of money. In favor of gold it may be said, that its greater value under a small* bulk eminently qualifies for a standard in an opulent country. And I may here remark that it requires an opulent country to maintain the single gold standard, and the country does maintain it at very great expense. I do not wonder that he thought an opulent country, a creditor country, the only one that ought to adopt it, for no other country can afford to adopt it. But, like many people who in attempting to improve their condition in society attempt luxuries and extravagances which they can not maintain and which force them back into the ranks from which they came, so nations in at- tempting to establish the gold standard may find themselves reduced from opulence to poverty. Ricardo continues : But this very quality subjects to greater variations of value during periods of war or extensive commercial discredit, when it is often collected and hoarded, and may be urged as an argument against its use. The only objection to the use of silver as the standard is its bulk, which renders it unfit for the large payments required in a wealthy country ; but this objection is entirely removed by the sub- stituting of paper money as the general circulation medium of the country. Silver, too, is much more steady in its value in consequence of its demand and supply being more regular ; and, as all foreign countries regulate the value of their money by the value of silver, there can be no doubt that on the whole silver is prefer- able to gold as a standard, and should be permanently adopted for that purpose. Innumerable additional citations from authors of repute could be adduced to fortify this position. It will thus be seen that the fluctuations in tbe value or purchas- ing power of both gold and silver have always been admitted by scientific writers. They were so well understood three centuries ago thai in Queen Elizabeth's reign (1576) the British Parliament directed that the rents reserved in the long leases of certain college lands should be payable, not in money, but in wheat. And at va- rious times during the past seventy years propositions have been formulated to substitute for gold and silver as a standard of value for deferred payments, a tabular statement of the prices of the prin- cipal articles of commerce, to be made by official authority and published from time to time, by the average of which the fluctua- tions of gold could be ascertained and proper allowance made for them in the settlement of time transactions. Professor Joyous, Prof. Francis A. Walker, and other political enconomists of note have ex- pressed approval of such a tabular standard for long-time contracts, as securing greater equity than would gold as a measure of values. Those who now assert that silver has fallen and that gold has not 44 risen in value arrive at this conclusion by a very safe process of reasoning. show that silver has fallen they measure it by gold alone, without reference to the general rauge of prices ; and then to prove that gold has not risen they make it the measure of itself. An increase or decrease of the value of either can not be as- ascertained by reference to the other, and certainly not by constitut- ing either of tin-in astainlanl I'.v which to judge itself. It would of coarse be forever impossible to show any change in the value of gold r. or of anything else, measuring it by itself. It is only by looking at the relations which both metals boar respectively to acon- :de range of commodities generally dealt in as well as to each other, that it can be ascertained with certainty what has happened. :pon consideration of all the facts I have given, but upon i he situation, it must be obvious that gold has risen and will continue to n>e in value as long as its volume decreases and the .d lor it increases. Sine.- 1-iiO, when gold constitued 7? per cent, of the combined yield of the two metals, it has diminished not only in relative proportion to the yield of silver, but it has dimi: absolutely. For the live years ending with I'M) the yield of gold throughout the world was $137,000,000 a year ; for the live ' 1889 the yield was but sllO,000,000 a year. If. as claimed advocates of the single gold standard, an increase in tin of si Ivei decreases the value of silver, by what system of lo- they deny that a decrease in the supply of gold increases the value of gold! In a late issue of the London Economist, that of April iJfi, 1490, I find an editorial article relating to the recent discii--ii>n on allism in the British House ot Commons. That article comments somewhat sharply on Mr. Smith's assertion that "a conspirac been formed among tin- financial class in Europe and America to get rid of silver as full-valued money in order to increase the value of gold, in which their revenues are paid." In the course of his com- litor. by "confession and avoidance." admits our whole contention as to the rise of gold and the fall, as a natural couse- - of commodities. He sa; It may not be amis*, however, to point out that the increase in the exchange- able ralne of cold ha* been by no means such a gain to the financial clam aa he in common with many others supponn ; for advantage has been very largely taken of it t. cut .liiwn tin- retain uimii tln< capital which the flnano al clasfle* 1 vetted. It hi* favored debt convention scheme*, and it has been one of t)i in- flnenoes that have caused the rate of uterest in general to > that, all round, th yi-lo commended for at least oe thing. He doen not quibble as to the most important point in the . frankly admit* that gold has risen, and does not, as some others do, attribute the fall of price* to imp menu in method* of product ion. iiso admit* tha; ily with and caused by tin- i gold there has been a great decline in the mtes of interest, and, strangely, < ,| f,, r the rise in the ability t -lie debt into one tearing a lower rate of interest, or. as : 4 to "debt" " 45 He does not inform us how any compensation can be made to the the debtor for the time the debt has been running, as to which it can not be converted, nor for the enhanced amount exacted from the cur- rent earnings of labor by the rise in the value of money to pay taxes and the expenses of Government, nor for the loss entailed "on the debtor whose property is mortgaged on long time, where the holder of the mortgage refuses to convert it into an obligation bearing a lower rate of interest than originally contracted for. He suggests no method by which to make whole those who have lost their property through sheriff's sale by reason of falling prices and the rise in the value of money. Neither does he state how long it will be before the next confiscation is to take place, by reason of the continued operation of the cause that produced the first. But he has been frank enough to concede (what is never disputed except when the money ques- tion is under discussion) that there has been a rise in the exchange- able value of gold, and conceded its natural sequence, a fall in the rates of interest. IMPROVED METHODS OF PRODUCTION. In order to justify their position it becomes necessary for the ad- vocates of continued demonetization of" silver to insist that the fall of prices is not due to the rise in the value of gold but to improved methods of production. Whatever the cause to which it is to be ascribed, the undoubted fact is that a fall of prices throughout the western world set in concurrently with the reduction of the world's money volume by the demonetization of silver. It was well understood at the time by those who had given consideration to the subject that demonetiza- tion alone would effect that result. This is manifest from an article in the London Daily News, a paper of exceedingly large circulation, quoted in the Journal of the Statistical Society of England for 1873, page 395. Referring to the adoption of the single gold standard by Germany t,h Daily News said : As the annual new supply of gold throughout the world is reckon*- d at little more than 20,000,000 ($100,000,000), and the usual demand for miscellaneous pur- poses is very large, it follows that, if the German Government perseveres in its policy, the strain upon existing stocks and currencies of gold will be most severe, for a time, at least, unless the annual production of gold should suddenly increase, the money ma: kets of the world are likely to be perturbed by this bullion scarcity, and the fall in the value of gold which means the rise in prices that for some time had prevailed ; of which so much has been heard, will be checked or reversed. The yield of gold did not " suddenly increase," and the intelligent prophecy of the Daily News was fully realized, not merely to the extent of a check to the rising prices ; (or, as it is styled by the Daily News, a check to the "fall in the value of gold,") but to the extent of an immediate rise in the value of that metal, and a persistent and deplorable fall in the general range of prices. This prophecy that the "fall in the value of gold" would be checked by the demonetization of silver ; or, better, reversed by it, was welcome reading to the creditor and income classes of England and of the world. That it was "reversed," and the value of gold appreciated, is as plain as that, one being subtracted from two, there is but one for a remainder. The immediate fall in prices of commodities was the natural, the anticipated, and the deliberately intended result of that movement. But we are now assured that this fall is not due to any monetary 46 cause, but to the greater efficiency of machinery iu the production of commodities. No advocate of an increased volume of money denies that in a few departments of manut'ai -tare there have since 1H73 been improve- ments tending to economize labor and cheapen products ; but they emphatically deny ami challenge proof that improvements of mere detail in the manufacture of some articles will account for the cxtra- ordiuary fall of price since that time in almost every product of indus- try. We arc also told that the development of the system of tran.s- II, both by land and sea, have tended to lower the price of com- modities to the consumers. I grant it. But we had those improve- ments before 1873. The inventions made between 1873 and 1890, the period of falling . were no more important or radical in their effect on iu- ili-tl no more to cheapen commodities, than did those from! .. the period of rising prices. Indeed the inventions which preceded 1873 were as a whole much greater in scope, more far-reaching in result, and more revolutionary in their effects on in- dustry, than those of the later period. All the great basic improve- ments had been invented, and had been incorporated with the in- dustrial system of ail civih/.ed countries long before 1H73, if we except the electric light and the telephone. We have had the steam engine, the cot ton gin, and the spinning-jenny since the last century; the railroad and the steam-ship since the '30's; the telegraph, the mechanical reaper, Hteam-plow, and other agricultural labor-saving s since the '40's; the sewing machine since 1854, and the Bes- semer process and steel rail since 1857. The forced construction into which their position drives the advo- cates of the gold standard is well illustrated in a went number of a magazine of high standing in this country, in which I find the ' ing: But if It be demurred, doen not a debt incurred. My, ten year* ago iron ire to- day more wheat or iron fur it* untiafiwtion than the sum could have bought wbn Drat borrowed I Certainly, but the wheat or iron represents no more laUir now then it did ten yean ago. ind it* increano in quantity stands for the new efficiency which applied science has bestowed on toil. Observe how deftly the writer places iron, in the manufacture of which there have admittedly been some Improvement*, in the same category with wheat, in the production of which the improvement* i any recent period have been of the most trifling chai It will be exceedingly difficult to convince the farmers of this coun- try, whose mortgages are eating up the- proceeds of their labor, that the enormous decrease iu the debt-paying power of their prod- acts is made up to them iu "the new elncuncy which applied science has bestowed on toil." As well might it be maintained that the rise of prices and the con- current way of uni vernal i experienced after 1849, was not 1*0 of the world's money stock from the minesof Cali- . and Australia, but to some sudden, unaccountable, and com- iss of all improvements theretofore attained in the arts and industries of the world. KmtCT Or CHECKS A!tD CUtAHPO HOUSES. Bat it is said that checks, notes, draft*, bills of exchange, and the facilities afforded by clearing- houses effect such economy in the use of money that it goes fart he i now than formerly, and that th. so large a volume of money a was formerly needed i* not needed at present. It is sought thus to escape the conclusion that the fall of 47 prices is the result of a shrinkage of the volume of money, or at least to imply that if the money volume has been shrinking the agencies mentioned have served to mitigate, if not entirely to counteract, the effects of such shrinkage. This is in substance to claim that how- ever contracted the money volume of a country may become, the system of checks and clearing-houses on the principle of the com- pensating balance will expand in a proportion directly correspond- ing to the contraction of the currency; that the greater the reduction of the volume of money in the country the greater the increase in the transactions of the clearing-house. Nothing more absurd could be conceived. If this view were cor- rect, it would make no difference whether the amount of money in circulation were large or small ; a million dollars would be as effica- cious as $100,000,000, and even one dollar as effective as a million dol- lars ; and if we suppose the last dollar to have disappeared from cir- culation, then, according to the sweeping and pretentious claims set up for the clearing-house system, we could dispense altogether with the use of money and rely exclusively on checks, drafts, and bills of exchange. That checks and clearing-houses are a great convenience to com- merce is not denied. They serve to a certain extent to make more effective the money volume of a country. By the clearing house sys- tem of off-setting the demands of the several banks, one against the other, and requiring payment in cash of the balances only, large amounts of loans may remain undisturbed and greater stability of industrial conditions be secured. Clearing-houses, however, were not established primarily for the convenience of commerce, but for the profit of bankers. Whatever amounts of money are economized by means of those institutions bring compensation, by way of interest, to the banks. We may, therefore, rely upon their being utilized to the utmost under all cir- cumstances. But, however much checks and clearing-houses may economize the use of money, they are no novel devices. They are not some untried and newly-invented instrumentalities. Checks have been, in use ever since the invention of banks. The clearing-house system was established in this country in 1853. Contributing, as it does contribute, to the pecuniary profit of the banks by making possi- ble an economy in the use of invested money, which the banks have loaned out, and on which they are drawing interest, the system has grown with the growth of the business of the country. It will undoubtedly continue to grow, but with no greater acceleration than population and business will warrant. As it has been a part of the banking machinery of the country for nearly forty years, and during that period has been utilized to the utmost, the conditions of its existence and utilization have long since hecome static conditions. The demands for currency have borne re- lation to the needs of business, with clearing-house facilities in full sight and operation; and at all seasons, in the adjustment of prices, those facilities have had full force and effect. Assuming that at any given period the business of the country were conducted with a given volume of money, plus a certain volume of clearing-house exchanges, then, at a later period, an increase of business would demand an in- crease in the volume of money, plus a proportionate increase in the volume of clearing-house exchanges; having had this system in full and effective use for forty years, it is as absurd to ascribe the fall of prices in the last half of that period to any economy in 48 the use of mom by the clearing-house s\ - -.vonld be to a i't the ;(-< 'nut took place in tin- tirst lialf of tin- same period. THK PROOF AFFORDED BT THE PALL OK If further piont were needed that gold has risen in \alue, it is. as lain, to In- fouinl in the coincident fact >! a deoreaSQ " t iiiti-rcst <>n lirst-class securities. That decrease has kep- step and pace with the rise in tin- value of in \v. The rise in the value of gold, as shown by comparison will, iiuinlierH of articles of commerce, h and 10 per rate of interest on gilt-edged scouritii - eorre- :>g decline. Hut unfortunately for the struggling people of the country, the fall in the rate of interest on farm mortgages and on from money centers has been nothing li. nor has it been so great as the fall in the price of agricultural lands, and in th- "t" labor. at a new axiom should be added to of political ecoii" !y. that as the purchasing pow< increases, i: -iroducing power decreases, ami in aliout the same r . when the purchasing pou. : decreases, it producirj: j)<\\ -<-s. In other \\ords. - rise inte: prices fall interest tails. When :i volume and decreasing in value. ]iri>-. and it- Todnctive cnterprisrs iu-comes mor< IT.. til able, and a- ;ice interest rises. When it isile< Ti-a.-inu' in \olnme .'iisequently increasing in value, prices fall, investment in d productive enter;' ;is and unprofit- able, and, as a consequence, it avoids t!:' :ment Is and gi ' ;u>tly termed " money-1'ii; Whii :.d contilli. Some thirteen > in a little prop 'ining the rates of interest. -at credit to i. t, but ir years after the ! before tin- rates of intTest Iiad materially fallen, and when the Maine conten- tion was made that in rnad u-ly. that money was cheap be- cause interest was low, and that the policies ni th-- country wen- wise because onr credit stood on such a high jtlane. 1 submit led to ens the report of the Monetary Commission, from which I quote: Money o*n be borrowed TCA>\. oecnrities aa lxnd whloh nt<> buwsl on the uicnt, or \\\>\\ i: Mtd itockt of tirnt cla.iB t * arc practically a tax upon the en Nfioni MM !.! I "!.' :it ttmfmt l.-m.-.lh ], ratt-s. TbeM i"" niicl ..:.: : r.it.-s I- r -:]'.. ..!.. .1,.: ..i<;-. : 1,, ' . .,-,.. i !,,,,:. ,':!".., il.il u.n .,r .'Vi-n !i proof of a ufflelent clrooUtion, are anmisUkabln eridenoeof a c. in- it by the t. Toth.-ir astonishment he denied that there was really any ling a* f gold standard of time : and in order to prove that the material, gold, did not nionopoli/o all the qualities cbaract< of clocks, be placed alongside the -..hi n!\ disagreement being that of an occasional second or two, and even that disagreement only at rare intervals, such as might naturally occur with the I.. -; of clocks. But the Council of the village, in their admiration for the gold clock, passed an in requiring that all the weights (the motive power) of the silver clock, except one, be removed from 51 it, and attached to those of the gold clock. Instantly the clocks be- gan to fall apart, and one day, -as the sun was passing the meridian, the hands of the gold clock were observed to indicate the hour of 1, while those of the silver clock indicated 12.15. At this everybody in the village ridiculed the silver clock, derided the silver standard, and hurled epithets at the individual who had had the temerity to doubt the infallibility of the gold standard. Finally, the divergence between the clocks went so far that it was noon by the gold standard when it was only 6 a. m. by the silver standard, so that those who were guided by the gold stand- ard, notwithstanding that it was yet the gray of the morning, in- sisted on eating their mid-day meal, because the gold standard in- dicated that it must be noon. Aud when the sun was high in the heavens, and its light was shining warm and refulgent on the dusty streets of the village, those who observed the gold standard had al- ready eaten supper and were preparing for bed. But this state of things could not last. It was clear that the dif- ference between the standards must be reconciled, or all industry would be disarranged and the village ruined. Discussion was rife among the villagers as to the cause of the dif- ference. Some said the silver clock had lost time ; others that both clocks had lost time, but the silver clock more than the gold ; while others again asserted that both clocks had gained time, but that the gold clock had gained more than the silver clock. While this discussion was at its height a philosopher came ajong and observing the excitement on the subject remarked, " By meas- uring two things, one against the other, yon can never arrive at any determination as to which has changed. Instead of disputing as to whether one clock has lost or another gained would it not be well to consult the sun and the stars and ascertain exactly what has hap- pened." Some demurred to this because, as they asserted, the gold standard was unchanging and was always right no matter how much it might seem to be wrong ; others agreed that the philosopher's advice should be taken. Upon consulting the sun and the stars it was discovered that what had happened was that both clocks had gained in time but that the gain of the silver clock had been very slight, while that of the gold clock had been so great as to disturb all industry and destroy all correct sense of time. Notwithstanding this demonstration, there were many who ad- hered to the belief that the gold standard was correct and unchang- ing, and insisted that what appeared to be its aberrations were not in reality due to any fault of the gold clock, but to some convulsion of nature by which the solar system had been disarranged and the planets made to move irregularly in their orbits. Some of the people also remembered .having heard at the village inn, from travellers returning from the East, that silver clocks were the standard of time in India and other barbarous countries, while in countries of a more advanced civilization gold clacks were the standard. They therefore feared that the use of the silver clock might have the effect of degrading the civilization of the village by placing it alongside India and other barbarous countries. And al- though the great mass of the people really believed, from the dem- onstration made, that the silver standard of time was the better one, yet this objection was so momentous that they were puzzled what course to pursue, and at last advices were consulting the manufac- turers of gold clocks as to what was best to be done. JOJTBS 52 Now oar gold standard men are in the position of those who first refuse to look at anything beyond the two things, gold and silver, to see what has happened, and who, when it is finally demonstrated that all other things retain their former relations to silver, still per- sist that the law which makes gold an unchanging standard of measure is more immutable than that which holds the stars in tli<-ir courses. If they will compare gold and silver with commodities in general, to see how the metals have maintained their n-hn in- to one another but to all other things, they will find that instead of a fall having taken place in the value of silver, the change that has really taken place is a rise in the value of both gold and silver, the rise in silver being relatively slight while that of gold has been ruinously great. And those who do not shut their eyes to the truth must see that the change of relation between the metal* has been effected by depriving nilver of its legal-tender function, as the want of accord between the clocks was brought about by depriving tin- silver clock of a portion of its motive power the weights. The only thing that has prevented a greater divergency betweeu the metals is the limited coinage by the United States the single weigh t that, withheld from the gold clock, prevented its more ruinous gain. TBK PURCHABISO I'OWEB OF 8ILVKB IK 1873 AND 1889. If I can show that for a period of seventeen years, since its demon- etization in 1 .-?:;, silver has lost none of its purchasing power, none of its command over commodities; that is to Hay, if I can show that ll-Jj grains of silver to-day, uncoined, and shorn by hostile legislation of its principal element of value the money use will buy as much as would 41*^ grains of silver in 1873 (when our silver dollar bore a pre- mium over gold) of all the articles that enter into the daily consump- tion of the people, it must be manifest that silver has not fallen in valne. I present a table which I shall aak to have inserted in the RECORD as part of my remarks, showing the purchasing power of 412} grain* of Mlver, nine-tenths fine, in 1873 and 1890, respectively, so far as concerns several leading articles of daily consumption. The table is as follows: Comparative purchasing pover of 412$ grains nlvrr, nine-tenths fine, in 1873 and 1890, respectively. 412J grata Uver woul.l buy 1873. 1890. Wheat... . 0.87 LM :. M 0.06 0.07 12.89 | V r, ;:! 4.Z7 I.M 1.97 B. 71 0.05 O.OC 11.75 4.63 0.94 10.34 Corn do Cotton Bet BOM i. . . do Lrd ( *' i- %c- do .Su -*r .. ..do ES From this tabl* it conclusively appears that while in 1873 thestand- VT dollar of 412$ grains, which then bure a ini-niiiim over the gold dollar, would pnrcham'ftir-n ftha of a bushel of wheat ; to- day the satoe quantity of silver, without the advantage of coinage 53 and merely as bullion, will also buy fonr-fifths of a bushel of wheat the only difference between the figures for the two years being that at the present time 412^ grains of silver bullion, as will be seen by the table, will buy a fraction of a bushel more than would 412^ grains of coined silver in 1873. If, then, silver has fallen, it is manifestly not. in its relation to wheat. By the same table it is shown that the silver dollar of 1873, con- taining 412^ grains of silver, nine-tenths fine, would purchase one and eight-tenths bushels of corn ; in 1890, a like number of grains of silver, uncoined and estimated at its gold value, will purchase one and nine-tenths bushels of corn. Here again the advantage is slightly in favor of the 412^ grains of silver bullion of 1890. This shows conclusively that silver has not fallen in its relation to corn. The figures of the same table show that in 1873 a coined silver dol- lar of 412 grains would buy 5 pounds of cotton ; to-day 412 grains of uncoined silver will buy 6f pounds of cotton. From this it ap- pears that silver has not fallen relatively to cotton, the great staple of universal use, but that, ou the contrary, it has advanced some- what in its purchasing power when compared with that article. In order to present the question from another point of view I sub- mit another table showing the number of grains of silver that are required in 1890 and the number which were required in 1873 to buy a bushel of wheat, a bushel of corn, &c., by which it will even more clearly appear that silver has not fallen in value in respect to com- modities. Comparative purchasing power of silver bullion, in grains nine-tenths fine, in 1873 and 1890, respectively. Articles. 1873. Legal tender. 1890. Commodity. Wheat Qraing silver. 474.3 Grains silver. 468 do 223.9 209.25 Cotton ....... per pound.. 77.55 61.42 Beef, iness pt-r barrel.. 8, 662. 5 7,560 Pork, mess .. ..do. 5, 465. 62 6,750 Lard . .. ....... ........per pound. 31.97 35.1 Butter do 76.31 89.1 Cheese do.... 47.44 59.4 Sugar, refined. do , 42. 07 39.82 Eggs per dozen . . 96.52 76.68 From this table it will be seen that in 1873 it required 474 grains of standard silver, in the form of coined dollars, to buy one bushel of wheat ; in 1890, only 468 grains of standard silver (and that merely in bullion form, or in other words, at its market value) are required to buy a bushel of wheat. This does not show that silver has fallen in value, in its relation to wheat, but, on the contrary, that it haa risen in value. In 1873 it required 224 grains of silver to buy a bushel of corn ; to-day only 209 grains of silver are required to buy the same quan- tity. These figures fail to prove that silver has fallen in value, in its relation to corn. On the contrary, again, it has risen. In 1873 a pound of cotton could not be had for less than 77 grains of silver; to-day the same pound of cotton can be bought for 61 54 grains of silver. Silver, therefore, has not fallen, bat risen in value in ita relation to cotton. In 1873 96 grains of silver were required to buy one dozen eggs; to-day only 76 grains of silver are required to buy the same-quant ity of eggs. Silver therefore has not fallen bat risen in value, in its re- lation to eggs. These comparisons might be continued with the same results as to a great majority of the articles entering into general use. These figures demonstrate that in its relation to all commodities that enter into the daily consumption, silver lias uot fallen in value, but, as is clearly seen, while holding a remarkably steady ratio to commodities, has slightly increased in value, as is shown by the fact that a less number of grains of the metal are to-day required to purchase the same quantity of the commodities tioned than were required in 1873. In relation to what, then, is it that silver has fallen T As it has not fallen in relation to commodities, there remains but one thiiu; in relation to which it can be said to have tall.-n, ami that one thing is gold. The phrase "the fall ot silver" is the ingenious and cun- ning invention by which it is sought to cast on that metal the dis- credit of depreciation rather than subject gold to the suspicion of any change whatever. The term to correctly describe what has taken place would be " the rise of gold;" but that term is scrupu- lously avoided, as implying that gold does not remain immovably fixed. That gold has risen, however, admits of no doubt, except to those who willfully shut their eyes to facts of common observation, ue test of the increasing or decreasing value of any one thing is not to compare it with any other one thing, but with a large range of commodities generally dealt in. It i> not of. so much important-t- ic know how much gold cau be bought with a given amount of sil- ver, as it is to know how much bread, how much meat, and how much clothing cau be bought, and how much of all the things that *>re neoewtary to the comfort and well-being of the people can be bought with that amount of silver. PKOOP THAT GOLD HAS K1HF.R. In ord-r t<> demonstrate that gold has ri.-i-n, I will bring side by side the gold prices of a number of leading commo; notwithstanding that the money in which the debtor h.i- paid the in: . come I .tillable than it wan at the tune lie com rat-ted to pav it. The cotton manufacturer >f the l'.a-t \\!M. in 1-7:! owed $10,000 could then have naid it with 7' red cotton cloth; to-day owing to tin- riHcin tin- value' t.f gold it would require 1 . .' debt, wil hot:- ..nut theamoiint lost by the dcb'or in the greater sacri tie.- he had \ ear by year to make to farmer of the North and West who in 1*73 owed $10,000 could 57 then have paid it with 8,733 bushels of wheat; to-day it would require 11,446 bushels of wheat to liquidate that debt, though he, too, has year by year been " cinched " through the progressive increase in the value of the money in which the interest has been paid. Or he could, in 1873, have paid bis debt with 1,514 barrels of flour; to-day it would take 2,126 barrels of flour to pay the same debt. The property of the country is fast passing into the hands of the creditors, and if the iniquitous system is not reversed the condition of our American farmers will be that of the farmers of gold-stand- ard countries. Instead of owning their farms they will be tenants and rent-payers a condition but little in advance of that which prevailed in feudal days. Machiavelli, describing a turbulent period in the history of Flor- ence, said: The people perished, but the brigands throve. The brigandage of the Middle Ages, whether in Italy or elsewhere, was a criminal defiance of law, but it was pursued at some risk, and under manifest disadvantages. The brigand took his life in his hands. He knew that his calling was unlawful ; and, although ruthless in his work, the method by which he exacted ransom of his occasional vic- tim was less destructive to the prosperity of the community than the legalized brigandage of to-day by which, through a vicious sys- tem of money, the great mass of the people are despoiled of their property. The distinguishing characteristic of the brigandage of the nineteenth century is that it scrupulously observes all legal forms, and is conducted in the name of honor, honesty, good morals and " sound finance." Mortgages are foreclosed only in accordance with law, and the unearned increment which results from the in- creased and increasing value of the money is transferred from the debtor to the creditor, with punctilious regard for the statutes. The demands of the brigand were enforced with guns and pistols ; those of the creditor are enforced with bonds and mortgages ; both exactions cruel and unjust, one by violence, the other by law. But, in the latter case, so indirect is the method of operation that many of those who are benefited by it are unaware of the perpetration of any wrong. So subtle is the process that the change seems to be only a change in the price of commodities, and thousands of men who would scorn consciously to exact from any one more than a just return for money loaned are beneficiaries of this vicious and ruinous system. With regard to the great body of the working masses it is some- times said they have no cause for complaint, that their condition now is better than ever before. But, Mr. President, it is not enough that men are better off than they have been. When we reflect that nine-tenths of the inventions and improvements constituting all the material features of the civ- ilization of this century have been made by working men, it is man- ifest that they are entitled to much more of the comforts and conven- ience of life than are now accessible to them. By watchful, re- peated, and aggressive efforts through their trade organizations, the workinginen in many branches have been enabled to keep wages from sinking, and occasionally to secure an advance; but, during a period of falling prices, what is gained in this way by those who are kept at work is lost to the working class as a whole by the remission to idleness of part of their number. The statisticians who seem to be employed by some propaganda to 58 prove by figures that prosperity prevails, point exultantly to the fact that the wages of the working people seem constantly to have increased while prices are falling, and they cite this to prove that low prices are consistent with prosperity. They leave entirely out of the account the large numbers of workmen who of necessity are relegated to idleness on account of the lack of profit in business. If you go into the workshops of any large manufacturing enter- prise, while prices are low and lowering, and ask the managers wbat they now do when a strike occurs among the workmen, they will tell yon they find it impossible to shut down, because they have contracts extending through time that they must fill, but, they add, " We pay the wages demanded and we reduce the nnmber of the employed." If there are a thousand workmen employed, getting $2 each per day, that would be a wage fund of $2,000 a day. If, when prices fall and business becomes dull, the employers should want to reduce tii.- pay of each workman to $1.50 a day, and if the workmen, by striking, should prevent that decrease, and if, then, 25 per cent. n. Silver, equally with gold, had been consecrated by all the ages t<> tip money use, and was dedicated to such use by the : the I nited States. n the Constitution declared that Congress should have i> " to cola money and regulate the value thereof " ami that " no State 1 shall ' I and silver coin a tender in paj- 1 mentof debts," it warrant.-,! the h. ]>.< I on th<- p.-.tt of .-ill who adopted j the calling mud undertook the business of mining, that old an J..M 59 would continue to be money metals in the sense in which they had been for thousands of years in the past. The silver miners were war- ranted in presuming that when the Constitution esteemed so highly the legal-tender function in the two metals, gold and silver, as that it prohibited the States from making anything a legal tender except coin of those two metals, it would not warrant the Congress of the United States in taking from one of those metals the power of legal tender and conferring that imperial function exclusively on the other. Silver mining is a business requiring for its successful prosecution skill, experience, and energy, while nine-tenths of the gold of the world has come from placers; requiring neither organization, capi- ital, nor skilled labor. The production of gold is much more a matter of accident and much more liable to fluctuation than is the case with silver. The silver miners therefore had a right to believe that so long as 23.22 grains of pure gold should be entitled to recognition as one dollar, 371.25 grains of pure silver would continue to be entitled to like recognition as one dollar, and would possess the legal-tender function as such, for the liquidation of all debts, public and private. On the strength of this warranty of the Constitution, and of the unbroken experience of the ages, large sums of money were invested in mining property and in the employment of labor to develop the mines of the country. On the strength of this belief and conviction, shared in by all the people of the United States, that gold and silver would both remain the money metals of the world, debts to an enormous extent were incurred, and it was confidently believed that both metals would for all time be available for the pavment of those debts. The silver-miners had learned from the history of mining, as well as from hard and bitter experience, that the mines might at any moment cease to yield, in which case their occupation would be gone and the capital invested would be a total loss. But they did not suppose that the verdict of all time would be reversed, or that the implied warranty of the Constitution of the United States would be disregarded. They did not believe that either one of the money metals would ever be demonetized. And if a doubt had entered their minds on that sub- ject, they would naturally suppose that gold rather than silver would be demonetized, gold being too limited in quantity to answer alone the purposes of money in a rapidly advancing civilization; its yield being uncertain and capricious and the prospect of a continued and sufficient supply becoming less from year to year. But, Mr. President, the degree of special interest which the min- ing States have in this measure is not to be compared with that of the other States of the Union. According to the report of the Director of the Mint, the total quan- tity of silver produced in the United States in the eleven years from 1878 to 1888 inclusive was 41)6,210,0/0 tine ounces. According to the same authority the commercial value of that silver was $436,260, 000, and the coinage value $525,145,000. A very simple process of arith- metic shows that the difference between the commercial and the coinage value of that silver was $88,885,000, oran average of $8,080,544 each year. Assuming that amount to have been the annual differ- ence between the coinage and commercial value of silver for the five years preceding 1878, we must add to the $38,885,000 the sum of $40,402,220, making a total of $129,287,220 as the amount which the silver miners, not of Nevada but of the whole United States in the seventeen years ending 1889, lost by the demonetization of silver. Having thus demonstrated in dollars and cents the degree of self- 60 ishness which, as is charged, is the motive of the miners in advocating the remonetization of silver, let us glance at the degree of selfishness which may be said to impel other classes of the community to advo- cate the same can-o. THR IMT*KE8T OF TUB XON-MIXIXG STATES UC RKMOXKT1ZATIO5. The price of cotton for the year 1873, in gold or silver (then of equal power), was 16.4 cents per pound. The price in 18rD was <>.'. cento. The yield of cotton for Iridl) was 7,000,000 bales, or 3,500,000,000 pounds. Had not silver been demonetised that cotton would have brought as good a price to-day as it did in 1873. At the price of 1-?:! the ac- count would have nt'u '100,000 pounds, at 16.4 cents. 000.000. At the pt:,euil--.i the account stands 3.."i()H.ini ..oon pounds. at 9.9 cents, $345,50<>,i)iM), showing a loss in debt-paying and ta ver on cotton alone (only one article of merchandised in the i-^on of the fall in prices caused by the demoneti- /at'i.m'of silver, Of $937,500,000. Having shown that the Ions to the silver miners by the discount on silver for the seventeen years from 1-7:5 to H-ty was less than '.nun. it will be seen that the loss in one single year to the cotton planters of the United States is greater by $90,000,000 than the total loss for the entire seventeen years to the silver miners of the cuiintry. Hut inasmuch as the cotton crop of 1889 was exceptionally large, I will, for the purpose of my computation, discard it. and assume i that an average yield for the year> between 1873 and 1889 would be 5,000,000 hales per annum which is a fair average and by no treans high .">, 000,000 hales, of 500 pounds each, are equal to 2,500,000,000 pounds. At the pr the result of each year would be 2,500,000,000 I, at !; J cents, $410,000,000. :-d ing to the figures gi\ en by the l?iircau of Statistics theaver- coeived each year of *the seventeen was 1:5.1 cents per pound: 2,600,000,000 pounds, al i:?.i rents per pound, equal $387,000.- ..wing a difference of $83,000,000; that being the avera- separate year for seventeen .total sum tor the entire period of $1,411,000,000, which represents the loss in debt- and tax- paying power suffered by the cotton planters by reason of the demo? turn uf Hilver. This is the enormous tribute which has been exacted of the industry of this country in behalf of the gold "standard." and of thoee who, for their own pecuniary advantage, cunnmglv induced M gre Of the United States to demon et i/e si I , is t lie mini \\ Inch the planters of this country have lust m dcht-pa\ i; \ing power by that mad act of tolly. As will !> R- u loos vastly in excess uf that su tiered by the silver 8 i the discount on the price uf silver bullion. i the silver miners are taunted with having a p. : . ceK*uf the movement for the full remoliell/atlon ot silver, the cotton planter must be placed in thesai ategui\, A like computation with \vhcat \\uishu dcbt- : nut less than - ear to >y reason of the muueti/ation of $1,700,000,000 iii tin- article of wheat alone in Mm 61 Thus a loss, wholly unnecessary, of more than $3,000,000,000 in debt-paying and tax-paying power is shown to have been inflicted on the farmers and cotton planters of this country. In comparison with this enormous loss to farmers and planters, how paltry is the loss of $8,000,000 a year suffered by the silver miners. But, however large the direct loss to the debtors and to the coun- try by reason of falling prices, the losses that are indirect are of in- finitely greater magnitude, and stand out like a great mountain of wrong superimposed upon the most deserving class in the commu- nity, whose interests it should be the paramount duty of Govern- ment to protect, a wrong more calamitous in its consequences than any of the multitudinous wrongs which a shrinking volume of money inflicts upon society. THE ENORMOUS LOSS OF POTENTIAL, WKALTH THROUGH INVOLUNTARY IDLENESS. The political economist, Mr. President, deals with property in esse, and producers employed. I propose for a moment to deal with prop- erty in posse and producers unemployed. The wealth which the po- litical economist discusses is realized wealth ; that to which I now briefly invite your serious consideration is the wealth that might be, and would be, brought into existence were the energies of all the people utilized. For, while it has attracted but little attention^ from writers on economic science, it will be found upon examination that the non-employment of its members is incomparably the greatest loss which an increase in the value of money and the consequent dis- organization of industry inflicts on society. The great writers and thinkers on economic subjects discuss with care the elements that enter into the production and distribution of wealth. They follow in detail the manufactured article through all its stages, from the crude material to the finished product ; and, when completed, they conduct it through the intricate channels by which it reaches the hands of the consumer. The greatest considera- tion is bestowed upon the labor employed and the wealth resulting therefrom, but scarcely any thought is given to the immeasurable mass of potential wealth not produced, but lying latent in the brains and hands of the millions who are condemned to involuntary idle- ness. While no mere sum in arithmetic can represent the enormous loss suffered by a nation through this cause, let us see whether we can arrive by figures at an approximate conception, at least, of the loss of wages which it entails upon the working masses, and the corre- sponding loss of wealth to the country. The most thorough and painstaking investigation into the condi- tions of labor in this country has been that which for many years has been conducted by the Massachusetts Bureau of Labor. Its work has been universally admitted to be free from bias, and devoid of all attempt to establish any special hobby, or to force, by figures, the proof of any preconceived theory. SOME STATISTICS OF THE UNEMPLOYED. An examination of the work of that bureau shows that, in 1837, there were 816,470 persons engaged in wage earning in the State of Massachusetts. Of those, 241,589, or nearly 30 per cent., were idle during some part of the year ranging from one to six or more months. The average of their unemployed time was about four months, or one-third of the year. Now, 240,000 people idle for one- third of their whole time is equiv- alent, in money loss, to the total idleness of one-third of that num- 62 her, or 80,000 people, for the entire year. The whole number of persons enrolled for labor in the State being 816,470, tlii> is equiv- alent to the total idleness of one-tenth of the people engaged in all occupations. If a number equivalent to one-tenth of the people in all occupa- tions are idle twelve months in the year in a State like Massachu.set ; -, where labor is better organ! zed, better classified, and more etliciently ordered than elsewhere in this country, it can not he presumed that any other State of the Union will exhibit a smaller proportion of unemployed laborers. The Census Report of 1880 states the number of persons em] in all occupations as 17,392,099, out of a population of 50, 1 .".:..: percentage of 34.68 of the entire population. Our present popula- tion being not leas than 65,000,000, if \\ assume, as we are warranted in doing, that alike proportion of the population is engaged in occu- pations of all s<>rts. it is clear that we have to-day a workii ulation of ^J,-2r>4,000 persons. Accepting as correct the careful deductions from the Reports of the Massachusetts Bureau of Labor that a number equivalent to t< n percent, of the people are always out of employment we find that at the present time there are 2, 250,000 penona in voluntarily idle in this country. How faintly does the term "the army of the unemployed" describe this vast number of eager and willing men seeking in vain :-portumty to earn a livelihood tor themselves and families. \Vere the business of the country in the active condition in which it could not avoid being if our money system were perfectly ad- i to industry, and if employers were competing for laborers with the same degree of eagerness that laborers are competing for employment, the average wage of a day for a working man would not be less : I his would make but tlie moderate sum of $50 a month for each \\orkman. which, under the most thritty system of iiold economy, can not lie considered more than euon. the support of an Anier:r:m family. WAGE L<- I -K..M I.NVOIA-NTAKY 1M.KXE88. By multiplying the number of persons thus shown to be idle, by this moderate average wage, we arrive at the amount of $4,500,000 a the daily sum which is .-t t<> the wage earners of the 1'mtcd by the non-vmploym.-nt of labor. This is a money loss of $-J7,000,000 a week, $117,000,000 a month, or the ama/ing sum of |>00,000 a year. Asav ;i^ of this MIIU for a year and three months would pay our entire national debt. This being the '. '. year, we can imagine (making due allowance l\.r dinVrenee numbers of the i>opi. ipemlous has been tl to the nation during the past sevent. .a loss exceeding in- irably all \ <-r. at ! loii. it IN appropriately noted as a pu I.I: a city be burned down. propri -,mpathie> of all t lie t. iit in unstinted measure to tip But here is a loss an real and a* deplorable a^ an> -.1 by tlood or flro a IOM whoae consequence*, while not MO apparent, are as de- an the biiriiiii. ' ICH, or tin? ranee of one hundred and fa disasters every year, and always to t lie |.eph- \\h<> passes almost wholl\ nnh'-e.le.l tr that would taku a mil' i from industry and de- he country of the pr value in the sense in which the word "value" is used in political economy. The air has qualities inestimable to mankind ; it must be regarded as incomparably the most useful of all the objects of human desire; yet it has no value because there is no limitation of its qu.-uitity." By reason of its universality and accessibility, air requires no sacrifice to get it. If, however, circumstances should render air limited in qnautity it is conceivable tliat it might become of surpassing value. A man confined in the " Black Hole" of Cal- cutta would give a fortune for free access to air. .So water, where freely obtainable, without sacrifice, although indispensable to life, haa no value in the economic sense no value in exchange. But when not so obtainable, a in populous cities, where sacrifice of timo and labor would be necessary to obtain it from river, lake, or spring, people pay for the convenience of having it in their homes. Tin- in- -ahle prerequisites of value in all objects are utility either actual or attributed combined with limitation of quantity and the sacrifice necessary to be made in order to obtain it. Hut value is not a property inhering in any article itself. It is not intrinsic. If the value were inherent or intrinsic it could not be taken away. To illustrate: A generation ago the cradle with which wheat -A an harvested was sui ledges, whereby men are as- sured, in exchange for them, to receive equally valuable things to those they parted with, for any quantity of those metals; by which means it comes to pass that the intrinsic value regard in those metal?, made the common barter, is noth- ing but the quantity which men give or receive of them : they having, as money, no other value but aa pledges to procure what one wants or desires. Bandeau, reputed one of the most eminent of an early school of French economists, says: Coined money in circulation is nothing, as I have said elsewhere, but effective titles on the general mass of useful and agreeable enjoyment which cause the well-being and propagation of the bumun race. It is a kind of a bill of exc change, or order payable at the will of the bearer. Adam Smith says : A guinea may be considered as a bill for a certain quantity of necessaries and conveniences upon all the tradesmen in the neighborhood. Jevons's " Money and Exchanges," chapter 8, says: Those who use coins in ordinary business need never inquire how much nn-t.il they contain. Probably not one person in two tlmu*iuid in this kingdom know*. or need know, that a sovereign should contain rj:i.-.'7417 grains of standard gold. Money is mad<> to go. People wsut coin, not to keep iu their own pock> to pass It off into their neighbors' pockets. Henry Thorn ton, in his work on Paper Credit, says: Honey of every kind in an order for goods. It is so considered by the laborer, when he receives it, and it is almost instantly turned into money's worth It :-< the instrument by which the purchasable stock of the country indistnli nU-d with convenience and advantage among the several members of the commu- nity. John Stnart Mill says : The pounds or shillings which a person receives are a sort of ticket or order which lie can present for paym< >1 which entitle him to receive a certain value of at lie wakes choice. McLeod, Elements of Banking, Chapter I, says : When persons Uke a piece of money in exchange for services, or products, they can neither eat it, nor drink it. nor clothe themselves with it. Th- only reason why they Uke it is, because they believe they can exchange it away whenever they please for other things which they require. On that view of inom-y MrLeod f. : in styling it credit, aiil he quotes in sii]>|>oit nfmirli a UNI- of flit- t.'i inYrcilit, Itnrkc's description .if gold and silver as "th-- t raODgniMd species that represent the lasting conventional credit of mankind." Prof. Francis A. Walker, Money, Trade, etc., page 25, speaking of carved pebbles, glass beads, she 1 Is and red feathers, used as money in certain countries at certain times, says: They were good money, though serving no purpose but ornament and deoo- ration. They were desired by the community in general ; men would give for JOMJJ 67 them the fruits of their labor, knowing that with them they conld obtain most conveniently in time, in form, and in amount, the fruits of the labor of others. ' On page 30 he says : Men take money with the expectation of parting with it; this is the use to which they mean to put it. Again, Mr. Walker says : Money is that which passes freely from hand to hand throughout the commu- nity, in final discharge of debts and fall payment for commodities, being accepted equally without reference to the character or credit of the person who offers it, and without the intention of the person who receives it to consume it, or enjoy it, or apply it to any other use than, in tarn, to tender it to others in discharge of debts or payment for commodities. Even Bonaray Price, who is wedded to the gold standard, in his Principles of Currency, says: Gold, in the form of money or coin, is not sought for its own sake, as an article of consumption. It must never be regarded as valnable exofcpt for the work it performs, so long as it remains in the state of coin. It can be converted at pleas- ure into an end, into an article of consumption, by being sold ; till then it is a mere tool. How many people ever so " convert " it that earn it? The great philosopher, Bishop Berkeley, one of the most acute rea- soners, in my judgment, that modern times have produced, in the " Querist," published in 1710, propounds the following pertinent and suggestive questions : "Whether the terms " crown," "livre," "pound sterling," etc., are not to be con- sidered as exponents, or denominations 1 And whether gold, silver, and paper are not tickets or counters for reckoning, recording, or transferring such denomina- tionB 1 "Whether, the denominations being retained, although the bullion were gone, things might not nevertheless be rated, bought, and sold, industry promoted and a circulation of commerce obtained? Dugald Stewart, professor of moral philosophy in the University of Edinburgh, in his Lectures on Political Economy (Part I, Book II), said : "When gold is converted into coin, its possessor never thinks of anything but its exchangeable value, or supposes a coffer of guineas to be more valuable because they are capable of being transferred into a service of plate for his own use. "Why then should we suppose that, if the intrinsic value of gold and silver were completely annihilated, they might not still perform, as well as now. all the func- tions of money, supposing them to retain all those recommendations (durability, divisibility, etc.) formerly stated, which give them so decided a superiority over everything else which could be employed for the same purpose. Supposing the supply of the precious metals at present afforded by the mines to fail entirely the world over, there can be little doubt that all the plate i.ow in ex- istence would be gradually converted into money, and gold and silver would soon cease to be employed in the ornamental arts. In this case a few years would obliterate entirely all trace of the intrinsic value of these metals, while their value would be understood to arise from those characteristical qualities (divisibility, durability, etc.) which recommend them as media of exchange. I see no reason why gold and silver should not have maintained their value as money, if they had been applicable to no other purposes than to serve as money. I am therefore dis- posed to think, with Bishop Berkeley, whether the true idea of money, as such, be not altogether that of a ticket or counter. Appleton's Cyclopedia, defining money, says : Anything which freely circulates from hand to hand, as a common acceptable medium of exchange in any country, is in such country money, even though it ceases to be such, or to possess any value in passing into another country. In a word, an article is determined to be money by reason of the performance by it of certain functions, without regard to its form or substance. JONES 68 BABTIAT 8 DE8CKIIT1OK OF THE CROWX 1'IKCR. Bastiat, in bis Harmonies Ecououiiques," describing money, usep the following illustration: Ton hare a crown piece. What does it mean in yunr hands f If you can read with the eye of tin- wind the inscription it bears, you can distinctly "> these words: Par to the bearer a sorvicc equivalent t.i th.it which he has rendered to society, value received and stated, proved and measured by that which is on me. No words could more correctly describe the unit in a properly regulated system of money. And notwithstanding the attempt to discredit silver coinage, no pieceof money, as I have already shown. would better answer, by its steadiness of value, this descrip; Ba&tiat's than would the American silver dollar if silver were re- moneti/<-d. So far as it applied to gold Baatiat's description was much nearer accuracy in his day than it is in ours. In his life-time the mints of France and of the Continent were open for the coinage of silver equally with gold, and the money supply of the world was not r. in- stantly narrowing by being limited to the yield of a single in.-t.il whose annual output would hardly more than meet the demand lor the arts. Were Bastiat alive at this time he wonld reform his description so as to make it read as follows: '* You have an American gold piece. You have had it boarded in a bank vault for fifteen years. What does it mean in your hands f If you can read with the eye oi tin- mind the inscription it bears, you can distinctly .see these words: ' Pay to the bearer 50 percent, more service than he has rendered to society; value not received or stated on me, but resulting from a run- ning manipulation of the law of legal tender, through the inilucnce of the holders of gold and of obligations payable therein, and as a reward to the bearer for having had this money hid away and for de- priving society of its use for seventeen years.'" When people are found everywhere working for money and not for the things which they really need, it is clear that they are \\ oi k- ing for money, not because of the material of which it is composed, but because it is an order for property which they can at any time obtain liy parting with the money. To modify and elaborate Bas- tiat's description of the crown piece, it might he said of the Money Unit of the United States under a properly regulated system : ii have a dollar. What does it mean in your hands T If \ou can read with the eye of the mind the inscription it bears, yon can distinctly see these words: To all to whom this may come: Greet- ing. This is a dollar a unit of money part of the great in.-tru- mentality created by society to effect the multitudinous exr! of property and services among men. The amount of its command i* OOUtant, because the increase in the volume of money i> regu- lated by the sovereign authority <>! the nation, \\itl: ird to the increase of population and demand hence the value of this unit remain* unchanging through time. It is an order for all pi- on sale, and all nervices for hire: the proportionate amount of such property and service to which its possessor is entitled being fixed by the universal competition to get OUSHAM'B LAW. Many persons foar an outflow of gold from the operation of what is known M "Gresham'- li\\," namolv. that "Nad money will expel good." Sir Thomas Gresham, a financier of Elizabeth's time, stated 69 that if a number of the gold or silver coins of any given denomina- tion were deprived of part of their pure metal, and so made cheaper than the remainder, a successful circulation of the coins thus de- prived would result in the melting up or exportation of the coins of standard weight. Writing of this, Mr. Jevons ("Money and the Mechanism of Exchange," American edition, page 84) says : Gresham's remarks concerning the inability of good money to drive out bad only referred to moneys of one kind of metal. * * * The people, as a general rule, do not reject the better, but pass from hand to hand indifferently the heavy and the light coins, because their only use for the coin is as a medium of exchange. It is those who are going to melt, export, hoard, or dissolve the coins of the realm, or convert them into jewelry and gold leaf, who carefully select for their purposes the new heavy coins and avoid the light or abraded coins. There is, however, a theorem which applies to all money, but which was recognized long before Gresham's time although it has been erroneously called an "extension" of the law or theorem of Gresham. That theorem is this: If, in any country, there are two forms of money, each of which is a full legal tender, and one of which can be obtained with less sacrifice than the other, the one requiring the least sacrifice will be the cheaper, and if the unit of that cheaper money will perform in every respect the same function in the payment of debts and settlement of all obligations that can be performed by the dearer money, then, for obvious reasons, the cheaper money will come into universal use, and the dearer money will disappear. But it does not follow that the cheaper money is bad money nor the dearer money good money. The best money is always the money of the contract, that is to say a money whose dollar, whatever it may be made of, is equal in value to the dollar of the contract. If the money of the courtract is the cheapest money, then that is the best money, that is the honest money, and that is the only tolerable money. If that be the sort of ;< cheap " money that drives out the dear money, then manifestly the dear money is bad money. A distinguished official of the Government, who was before a com- mittee of this body the other day, insisted that the proposed Treasury notes should be redeemed in the "best money." I asked him what was the "best money." "Why," he said, "the money that is worth the most." Now, it strikes me, Mr. President, that if you have bor- rowed a dollar, and, through a badly regulated money-system, are made to pay a dollar worth 25 per cent, more than the dollar you bor- rowed, you are not paying the best money, but the worst money; not an honest dollar, but a swindling and dishonest dollar. THE CREDITORS' DEMAND FOR THE "BEST MONEY." The creditors tell us that all they want is "good money." They and their friends glibly insist that all obligations must be paid in "the best money." This is the delicate and plausible euphemism re- sorted to in order to gloss over and, if possible, hide from the world the odious and repulsive fact that what the creditors always want is the dearest money the money that costs the people the mpst sweat and toil to obtain and which, as time passes, grows dearer and dearer. This cry for "the best money" is at last beginning to be recog- nized for what it is the cunning device of creditors to "catch the conscience" of the people and play upon the sense of fairness that characterizes the great mass of mankind. These interested parties 70 affect to believe that gold is, by nature, the only money metal, ignor- ing the fact that until silver was displaced by hostile legislation it was, and for four thousand years bad been, the principal money metal of the world. But they will no longer be permitted to hide their sin- ister purpose under the cloak of a demand for the " bent money.'' The. manses of the people are aroused on this subject and are beginning to understand it. According to all fair canons of construction the best money should be and is a money of unchanging value, a money that exacts from the debtor the same amount of sacrifice that lie liargained for, and which is all that the creditor is equitably entitled to receive. In other words, the money of the con tract, not a money whose exact ions are increasing at the rate of 2 per cent, per annum. As MeCnlloch says, debts being stated in dollars and cents, it is not possible for the creditor openly to augment his debtor's obligation by changing the figures of the debt. Hut, Mr. President, while they can not change the figures of the debt, they are enabled, by a crafty manipulation of the money- volume, to do that which, to the debtor, means the same thing; as the following story will illustrate: A usurer of the coarser type had lent $10,000 on a neighboring farm, tor which amount he took the farmer's note, secured by a mortgage on the property. He coveted the farm, and in his anxiety to secure it took his hanker into his confidence. He informed the banker that he wanted to get possession of this farm, bnt it would bring $15,000 under the hammer, and he did not care to pay so much for it. "I have a subtle chemical," said he, by which 1 can oblit- erate from the note and mortgage all trace of the rightful amount ($10,000), and that done, I can insert $15,000. Then, with the gen- nine signatures on the note and mortgage I can bring suit, and as the farm will not bring more than the face of Jhe note, I shall suc- ceed to the property." His friend, the banker, however, advised against thteoOUMkirhieb he characterized as not only dishonest, hut vulgar, and as subjecting the perpetrator of the net to serious penalties. Monoty " vml tin- banker, "is the best policy." "Hut." he continued, "lean stii: plan by which you may accomplish the same end without running counter to law, or the views of society. Why not join our propag- anda in advocacy of 'honest money.' Gold is !< r. -a-iug in quan- tity, and as the world has been ransacked for it in \ain. it is likely to continue decreasing. If we can strike down the twin metal, sil- ver, and devolve the entire money function on gold, it will doul.li> the purchasing power of money. Tln-n the foreclosure of your mortgage will be sure to take your neighbor's farm, and probably leave him in your
  • t, he will come t > re L; aided in the community as aditbonwt 'crank ' w ho \\i-hes to pay his delits in a depreciated money ; for it m the con- taut ami aNsiduou- care of our nikl t" that only tin' -i.-an-st money, that \\ ! most difficult for the h.ini. t-i get, is honest money, and the dearer it it> the more imnc.-t it in." jflm 71 ALL MONEY SHOULD BE LEGAL TENDER. To be of the fullest service to civilization whatever medium is used to do the work of money should have full money power; that is to say, it should be a legal tender. It is not sufficient that it will satisfy the demands of the Government for taxes. Whatever is given out by the Government in payment for services rendered (and there is no other way by which payments can be made from the Treasury) should carry with it to him who has rendered the service and receives the payment, the absolute assurance that in any need, or in any contingency, it will serve him as money. There is no other means by which society can be saved from the effects of panics and monetary crises. With a watchful and intelligent regulation of the money volume, and with the legal tender function attached to everything that is in use as money, and doing the money work, so that it will serve as a universal solvent, panics will be impossible. Under present condi- tions when panics come, credit money money not endowed with the legal-tender function, which, under ordinary circumstances, has always been accepted, is refused, and thousands of millions of dol- lars' worth of property have been confiscated by creditors, because of the scarcity of legal-tender money. As time advances and the method of doing business on credit becomes more and more extended, the more palpable it becomes that society can preserve itself from these periodical convulsions only by broadening, under proper regu- lation, the legal-tender basis on which, in the ultimate analysis, all business rests. MONEY A MEASURE OF VALUE. There is nothing upon which the prosperity and happiness of a people so much depend as on the integrity of their measure of values. It is universally admitted that alter the making of a contract re- quiring future delivery of a specified number of pounds, bushels, or yards of any commodity, it would be subversive of all equity and justice to change the capacity of the measure constituting the founda- tion of the contract. These measures, to be just, must remain un- changed. But how infinitely more important is it that money, which is the measurer of all other measures, should itself be unchanged ? Of what avail is it that the subordinate measures remain intact while this, the supreme measure, into which all others are finally re- solved, is constantly changing ? Its " value " is but another name for its purchasing or measuring power. In the case of all time con- tracts, therefore, any change in the value of money works a destruc- tion of equity, and one of the first objects of society should be to maintain and enforce equities at all times and in all places. This, so far as money can effect it, can only be done by an intelligent regu- lation of the volume in circulation. In a note to his edition of Adam Smith's "Wealth of Nations," (page 502) Mr. J. R. McCulloch says : Money is not a mere commodity, it is also the standard or the measure by which to estimate and compare the value of everything else that is bought and sold, and if it be, as it undoubtedly is, the duty of G-overnment to adopt every practicable means for rendering all foot-rules of the same length, and ail bushels of the same capacity, it is still more incumbent upon it to omit notbiug that may serve to render money, or the measure of value a measure which is undoubtedly of the greatest importance uniform or steady in its value. Though a measure of value, money is a much more complicated instrument than a yard-stick, pound weight, or bushel. Were it not so, a child could fix value with the same precision as an adult. As value resides inhuman estimation, it will frequently vary as to the same object. An intending purchaser may have one notion of the value of an article, an intending seller another. Money, therefore, is a measure >f value in the sense that it is a meav the average huniun judgment from which results price. As Mr. McCulloch says, no means known to science or art should be left un- tried to keep the value of money unchanging. When a man promises to deliver money or makes any time con lie makes a mental calculation us to what amount of property, or of the product of his labor, will enable him to meet his engagement. If he be a farmer, raising wheat, there pa--. -s through his mind the Kicrihce and toil necessary to raise it, and the quantity he can raise; if a cotton manufacturer the cost of spindles, of looms, and steam- engines; the wages of labor and inter, st on plant. 1 knew a cotton manufacturer who wanted $10,00(\ His business was good. He was sober, honest, and industrious; had a thorough .edge of his trade; managed his employe's himself, and took pains to conduct his business on the strictest br. principles. He wanted the money to make some improvements in his factory. lie knew how many spindles and looms he had; how much could be done with a pound of cotton, how much it co>t, and how much each spindle and loom would do. He said to a capitalist, 'I know all about cotton spinning and weaving, and do not know anything about this thing called money, but I want $10,000 of it." San! he, My cloth is worth ID cent* a yard ; it sells at that i unlimited quantit ies by wholesale ; n.-lmdy can make it any cheaper; but I am not working a gold mine ; 1 am not manufacturing legal- tender paper money, and the, only way 1 can get money is to swap ton cloth for it. I will give \ou n 100,000 ya- rot ton cloth, which will be equal to 10,000, and will pay 'J inches a each year a- interest." This was -<.ili-.la.tniy to the capitalist, and the note was made, signed, and delivered accordingly, and the improvements were made i:i the factory. l>uring the year every thing went smoothly; the npindlesand looms worked well, repair-* to machinery \\ere Ii^'ht: cotton had Keen i rates; and no improx ed pioeesses had been . or applied in tin- production of cotton-cloth. There was no . in any diieetimi. At the appointed lime, the creditor called for his cloth. "lam .1 tin- delitot, " t. pay the him 'red thousand yards ..f <>t- "th. with interest." When lie came to measure it olV, however, be was astounded to fm.l he was short. Some, painful suspicion* crowed his mind, it teemed M though lomebodj had either robbed him of cloth, or else he had no; Mired as much of it as be pp..-. il. There did not seem to be so many yards of the cloth re ougiit to be. He knew he had lined the same numliei of pound* of cotton that it hud i.een liiscnstom to nee far 100,000 yard* of cloth and for 200,000 inches of cloth in addition ; still, there was :.ying tin- fact of the shoi: He DMM .11. and hail tinally to admit that he was unable to keep his engagement. This was a source of diatrees to him. He could not sleep that ni-ht. Hut. the creditor being Importunate, the cotton manufacturer next morning borrow ed enough clot li from tl . :i neighboring factory and paid cation. I'.nt. not n: rig how his carefully made plans had failed, and in order to avoid similar mistakes in the future, be MM 73 had an examination made of the yard-stick and found that instead of being 36 inches long the yard-stick he had used was 40 inches. In talking the matter over with his neighbor, the cotton manu- facturer said : " I have been swindled ; they "rung in' on me a length- ened yard-stick, by the measurement of which I have paid my debt, and I have therefore paid in reality more than I contracted to pay." " Well, " said the friend, " I do not see that you are any worse off than I am. I borrowed as much as you did, and at the same time ; but I agreed to pay my debt in money, and gave my note for $10,000 with interest. The increased command over cloth acquired by the dollars I have had to pay, caused by the demonetization of silver, has juggled me out of as much cloth as you have been juggled out of by the lengthened yard-stick. But you have one recourse; you can put into the penitentiary the man who ' rung in' the lengthened yard-stick on you, while the increase in the value of the dollar which I have paid has been effected in the name of the gold standard and honest money, and leaves me without recourse. " In its ultimate analysis, money is the yard-stick, the bushel and the pound weight of commerce. When you shrink the volume of money, and so increase the meas- uring power of the dollar, you lengthen the yard-stick, enlarge the specific gravity of the pound and the cubical content of the bushel, in violation of all equities. It is utterly impossible to secure a proper regulation of the money volume with gold alone, the yield of which has declined from an average of $130,000,000 a year between 1851 and 1873 to $105,000,000 a year between 1873 and 1889. THE VALUE OF MONEY FIXED BT THE COMPETITION TO GET IT, Everbody admits that the value of all other things is regulated by the play against each other of the forces of supply and demand. No reason has been or can be given why the value of the unit of money is not subject to this law. WHAT IS THE DEMAND FOB MONEY? The demand for money is equivalent to the sum of the demands for all other things whatsoever, for it is through a demand first made on money that all the wants of man are satisfied. The demand for money is instant, constant, and unceasing and is always at a maxi- mum. If any man wants a pair of shoes, or a suit of clothes, he does not make his demand first on the shoemaker, or clothier. No man except a beggar makes a demand directly for food, clothes, or any other article. Whether it be to obtain clothing, food, or shelter whether the simplest necessity or the greatest luxury of life it is on money that the demand is first made. As this rule operates through- out the entire range of commodities it is manifest that the demand for money equals at least the united demands for all other things. While population remains stationary, the demand for money will remain the same. As the demand for one article becomes less, the demand for some other which shall take its place becomes greater. The demand for money therefore must ever be as pressing and urgent as the needs of man are varied, incessant, and importunate. WHAT IS TIIE SUPPLY OF MONEY? Such being the demand for money, what is the supply T It is the total number of units of money in circulation (actual or potential) in any country. The force of the demand for money operating against the supply 74 is represented by the earnest, incessant struggle to obtain it. All HUM), in all trades and occupations, are offering either property or services tor money. Each shoemaker in each locality is in com- pel it ion with every other shoemaker in the same locality, each hatter is in competition with every other hatter, each clothier with cvi-ry other clothier, all offering their wares for units of money. In this universal and perpetual competition for money, that number of shoemakers that can supply the demand for shoes at the smallest price (excellence of quality being taken into account) will fix the market value of shoes m money ; and conversely, will fix the value of money in shoes. So with the hatters as to huts, so with the tailors as to clothes, and so with those engaged in all other occupa- tions as to the products respectively of their labor. HO ALTERNATIVE FOB MOXKT. The transcendant importance of money, and the constant pressure of the demand for it may be realized by comparing its utility with that of any other force that contributes to human welfare. In all the broad range of articles that, in a state of civilization, are needed by man, the only absolutely indispensable thing is money. For everything else there is some substitute some alternative; for money there is none. Among articles or food, if beef rise in price, the demand for it will diminish, as a certain proportion of the people will resort to other forms of food. If, by reason of its con tinned scar- city, beef continue to rise, the demand will further diminish, until finally it may altogether cease and center on something eh*!. So iu the mutter ot clothing. If anyone fabric become scarce, and conse- quently dear, the demand will diminish, and, if the price continue rising, it is only a question ot time for the demand to cease and be rred to some alternative. Hut this can not be the case with money. It can never be driven out of use. There is not, and there never can be, any substitute for 11 . It may become so scarce that one dollar at the end of u decade may buy ten times as much as ;i: the beginning; that is to say, it may cost in labor or eommoditie* ten times as much to gi-t it, but at whatever cost, tin- people must have it. Without money the de- mands of civili/.ation could not be supplied. .Money was the most potent instrumentality in the evolution of society from a low to a high plane of civili/ation. It is valueless to man in isolation. It is indispensable to man in organized so- ciety. It is as necessary for the proprietary distribution of wealth M railroads and st.-am-.inp. are to Us physical distribution. The aggregate force of tin- demand for money in any country depends i he numbers of the population; with a stationary popula- te demand is steady, with an int-n-.-i^ni-.,' population the de- mand increases, and in ord> r to maintain undi-tuihi d the equation of supply and demand the volume of money should In- incrr.-ised in at least a ratio corresponding to that of tin- increase of population. :e ate certain eir.-umstances that to s-.me extent disturb the relation* between population and mon.-> supply, such as the broadening of the areas ot population, and tin- multipliration of money centers. These circumstances might i. n.i.-i n.-ei-*-;u \ a larger tag of increase in the money volume than would 1 catd by the increase of tin population. i'!.-M money-increase that will suffice t<> maintain tin- equity of time < outtt*ot is an increase corresponding to the increase of numbers of MOB 9 75 Under conditions of unvarying demand and unvarying supply the value of the unit of money would be unvarying. If as population and demand increase the supply of money be proportionately in- creased, there is no possibility of a change in the value of the unit of money. The constant and unceasing effort to exchange services and all forms of property, which have but limited command over the objects of human desire, for money, that sole instrumentality that has un- limited command over such objects, is, and ever will be, eager, intense, and unwavering. With population and consequent demand rapidly increasing how do the advocates of the gold standard expect to increase the money volume of the country in this proportion, while the yield of gold, in- stead of increasing in proportion to demand, is every day becoming less and less capable of meeting the requirements of the arts alone ? THE QUANTITY OF MONEY IN CIRCULATION SHOULD INCREASE IN A BATIO NOT LESS THAN THE RATIO OF INCREASE OF POPULATION. It will be admitted that if the population of a country be increased by any given percentage there will be a proportionate increase in the demand for all articles that supply human needs. If the population increases by 3 per cent., there will be needed 3 percent, more house- room, 3 per cent, more furniture, 3 per cent, more food, 3 per cent, more of all things that enter into consumption. These things can only be got by a demand first made on money. Then why not 3 per cent, more money? The present monetary circulation of this country, including gold, silver, and paper, is represented to be $1,700,000,000. As our popu- lation doubles in thirty years, the rate of increase is 3 per cent. If the money volume be not increased by a proportion at least as great as this, the true relation between the supply of money and the demand for it will not be maintained. The demand increasing as the population increases, while the supply either does not increase at all or increases in a degree incommensurate with the demand, the money volume shrinks and the purchasing power of the unit be- comes greater by reason of the increased keenness of competition to get it. This is but another mode of stating that the prices of all products of human labor decline. Prices falling, business ceases to be profitable, stores and work-shops close, and men are relegated to idleness. THE QUANTITATIVE THEORY OP MONEY THE VALUE OF EACH DOLLAR DEPENDS ON THE NUMBER OF. DOLLARS OUT. Thus by the universal competition to get it the value of the dol- lar is made to depend upon the number of dollars that are out. This is a principle that lies at the very foundation of the science of money. The law, stated broadly, is that the value of each unit of money in any country at any given time depends on the whole number of units in circulation in that country. The larger the number of units out, population remaining the same, the less must be the value of each unit ; the smaller the number of units out, population remaining the same, the greater the value of each. Notwithstanding the variance sometimes found between the prem- ises and the conclusions of economic writers, there is no economist of repute who does not admit this to be a fundamental principle. On the theory I have propounded therefore 3J- per cent, of $1,700,000,000, or $56,000,000, is the minimum amount of money that should be added to the currency of this country during the present year. 7C Assuming the population of to-day to bo 65,000,000 and the ratio :niii:il increase :ty percent., the population of next year will be 67,166,600. The percentage of monetary increase to be provided lor that year should therefore be baaed on the increased number. And soon for each succeeding year. I have thought best to collate a variety of citations from the most distinguished authorities on financial economy to support my con- tention that, ' hris paribus, the value of each dollar depends on the number of dollars in circulation. John Locke, in his "Considerations," etc., published in It'.DO, said: Money, while the same quantity of it is pausing up and down the kingdom in . really a standing im-asurc of tin- falling and rinin<: value ot other things in reference to out- another, and the alteration in )>i ic.- if triilv in them only. I'.ut it' Mm increase or leMfii the quantity of money current iu tiatlie in any pl.i the alteration of value U in the money. Locke further said : The value of money in any on* conntry, is the present quantity of the current money In that country, in proportion to the present trade. The historian, Hume, says: It is not difficult to perceive that it is the total quantity of the money in circu- lation, in any country, which determines what portion of that quantity .shall ex- Mr * ci-rtain portion of" the goods or com modi: i.-s of t hat country. . .e proportion lict\ve n the circulating money aiid the commodities in the market which determines the price. lite says: The amount of money cnrrent in a stata represents overythinz that is pur- : on the surface of the state. If the quantity of purchanali' creases while the quantity of money n mains the name, the value of the money increase!* in the same ratio ; if the quant ity of money mereasi-H. while the quantity mains tlie same, the value of money decreases in the ante ratio. James Mill, in his treatise on political economy, says: And again, in whatever degree, then-fore, the quantity of money is increased or M-d. other things remaining the s;uiie. in that same proportion tho value whole, and of every p.u : .illy diminished or incteosed. John Stuart Mill (Political Keonomy) says: The value of money, other thin::* being the name, varies inversely as its qnan- i nig the value, and every diminution it in a ratio And again : Alterations in the cost of the production of the procions metalsdo not net upon the value of money, except junt in proportion a.s they un- reuse or dimini-li its qusn lei (reply to Hos:nn; I'ut- i if tii'.ney :n nuv country i iletermined tiy the amount e \mtif r oportion to the in. i e-ise m dim- .. liw-t that in iucontrovertilikv further nays: otiev lint from exr<< : howc' roiling.- mav JXM-OII.. Ain. jiim iili d it be not in too grai abnndanoe. In this caae Ricnrdn'M illustration in ih.< snppuseil cane of a conn try 'lion gold piece-* each containing 1UO grains. .iii.l lie of t In- h:iun- ]iiirchasing jio.v neni took out 1 grain, or even :,(i grain", the (|uantity re- maining the same, but that if, from the r .\ iucied, an uddi- JO.SIJI 77 tional number of pieces were struck, a corresponding depreciation would result. William Huskisson (" The Depreciation of the Currency," 1819), says: If the quantity of gold in a country whose currency consi sts of gold should be increased in any given proportion, the quantity of other articles and the demand for them remaining the same, the value of any given commodity measured in the coin of that country would be increased in the same proportion. Sir James Graham says : The value of money is in the inverse ratio of its quantity ; the supply of com- modities remaining the same. Torrens, in his work on Political Economy, says: Gold is a commodity governed, as all other commodities are governed, by the law of supply and demand. If the value of all other commodities, in relation to gold, rises and falls as their quantities diminish or increase, the value of gold in relation to commodities must rise and fall as its quantity is diminished or increased Wolowski says : The sum total of the precious metals is reckoned at 50 milliards, one-half gold and one-half silver. If, by a stroke of the pen, they suppress one of these metals in the monetary service, they double the demand for the other metal, to the ruin of all debtors. Cernuschi says : The purchasing power of money is in direct pro portion to the volume of money existing. Prof. Francis A. Walker, in his work on "Money" (page 57), The value of money in any country is determined by the amount existing. Its [money's] power of acquisition depends not on its substance, but on its quantity. [Faulus, author of the Pandects, sixth century.] Professor De Colange, in the American Cyclopedia of Commerce, * article on "Money," says: The rate at which money exchanges for other things is determined by its quan- tity. * * * St supposing the amount of trade and mode of circulation to remain stationary, if the quantity of money be increased, its value will fall, and the price of other com- modities will proportionally rise, as the latter will then exchange against a greater amount of money ; if, on the other hand, the quantity of money be reduced, its value will be raised, and prices in a corresponding degree diminished, as com- modities will then have to be exchanged for a less amount of money. * " * In whatever degree, therefore, the quantity of money is increased or diminished, other things remaining the same, in that same proportion the value of the whole and of every part is reciprocally diminished or increased. A curtailment of the volume of money in a country will, ceteris paribus, increase the value of the money of that country. All the authorities agree that this law applies to all forms of money, what- ever the material ; so that it applies to paper money with precisely the same force that it applies to metallic money. Mr. Stanley Jevons, in his work on "Money and the Mechanism of Exchange," says: There is plenty of evidence to prove that an inconvertible paper money, if care- fully limited in quantity, can retain its full value. Such was the rase with the Bank of England notes for several years after the suspension of specie payments in 1797, and such is the case with the present notes of the Bank of France. Mr. Gallatin said : If in a country which wants and possesses a metallic currency of seventy mill- ions of dollars, a paper currency to the same amount should be substituted, the seventy millions in gold and silver, being no longer wanted for that purpose, will be exported, and the returns may be converted into a productive capital, and add an equal amount to the wealth of the country. JOJfES 78 In his Proposal for an Economic and Secure Currency Eicardo Bays: A well regulated paper currency la so great an improvement in commerce, that I should greatly regret if prejudice should induce us to return to a system of less utility. The introduction of the precious metals for the purposes of money may with truth be considered M one or the most important steps toward the inrnovi-- nient of commerce and the arts of civilized life ; but it is no It-untrue, that with the advancement of knowledge and science, we discover that it would be another im- provement to banish them again from the employment to which, during a leas en- lightened period, they had been so advantageously applied. Mr. J. R. McCulloch, in commenting on the principles of money laid down by Ricardo, says: He examined the circumstances which determine the value of money * ami he showed that its value will depend on the extent to which it may be iitsued compared with the demand. This in a principle of great im] for. it shows that intrinsic worth is not necessary to u currency, and that ; the supply of paper notes, declared to be a legal tender, be mitliciently limited, ilue may be maintained on a par with the value of gold, or rained to any higher level. If, therefore, it were practicable to devise a plan for preserving the value of paper on a level with that of gold, without making it convertible into he pleasure of the holder, the heavy expense of a metallic currency would b saved. It appears, therefore, that if there were perfect security that the power of issuing paper money would not be abused ; that is, if there were perfect security for its being issued in such <]UHntities, as to preserve its value relatively to the jnass of circulating commodities nearly equal, the precious metals might be entirely dispensed with, not only as a circulating medium, but also aa a standard to which to refer the value of paper. IB adopting a paper circulation- Says Lord Overstone we must unavoidably depend for a maintenance of its due value upon the adoption of a strict and judicious rule for the regulation of iu amount. Lord Overatone further declared that : The value of the paper currency results from its being kept at the same amount the metallic currency would have been. Alexander Barini;, in his evidence before the secret committee of tin- House of Lord> in 1-1H, said : naper would produce all those effects which arise from the re Auction in the amount of money in any country. I'rnf. l-\ A. Walker says: repeat, money is to be known by Its doing a certain work. XL not gold, though gold may be money; somet Money is no on.- thing. many things bavingaoy matei : common. ng may be money ; and Always and everywhere that which doe* the money-work is the money-thing, liald Alison HH specie payment in 1707, making hank notes a legal !.:. as good as a 1 1 y . Hut if gold alone is sufficient to bear all the enormous monetary burdens of the Western world, why do the advocates of the gold ,;d admit the necessity for anymore circnlationT To be logi- cal, instead of favoring an increase of credit money, which has al- ways lurking within it an element of danger to the business of the community, they should demand the retirement of t !; .i><>(> of greenbacks and the $350,000,000 of coined silver, and base tin ness of the country exclusively on what they call "hone.-t money." If that should he done all that could happen would he a fall in prici s. Judging by the experience of the past it would not be surprising if \t move of the gold-standard men would be an agitation for the retirement and ramella* ion of the greenbacks. Such a move- is fully in harmony with the opinions of the gold-standard advocates for the paM twenty years. Indeed, the Secretary of the Treasury who took charge of the linances at the opening of i 1 Admim.-tration, himself a hanker, recommended the demonetix.ation of the greenbacks almost, as vigorously as he opposed silver. MO.XRT VALUAHI.K ONLY FOR TIIK IMPORTANT HBRVICK IT PERFORMS. Money is valuable rather tor the service which it performs than for the material of \\lu.-h it iseompo>..-d. \Vli- .der the transceudaiiily important character of the which money pei forms when we retleet that, without it, the achie\ emeiit of an ailvaii'- .:ion would he impo-sihle. we cn not escape the conclusion that, compared with the value <>t that er\ lee, thu commodity \. y material on wliich the money function may be stamped is too trilling to merit serious will be made clear by reflection on the necessities of the sit- on. '>ng aa ftociety chooaes to maintain the automatic or metallic 1 licohvio: Mint WOllld rrniilt ! . nd o\ ei \\ helming increase in the supply of the i- coni]iared With the entile stock in ex. that would iv-iilt from u wholly in- .on to that stock, it must ! 81 mons accumulation of the metals on which the stamp is placed. It must be manifest that no material would be fit for universal accept- ance for so important a function as money unless there were available so great a quantity of it that no sudden shock could be inflicted on society by ordinary fluctuations in the current yield, or in the cur- rent consumption in the arts. But, in the nature of things, a supply sufficient to effect that result would be so enormous as practically to destroy the market value of the material as a mere commodity if the money function and use were withdrawn from it. THE MONET DEMAND, NOT THE COMMODITY DEMAND, THAT GIVES GOLD ITS VALUE. Mr. Giffen the statistician of the London Board of Trade, in an article recently published in an English magazine, berating and deriding the bi-metallists, maintains that it is not the demand for gold as money, but for gold as a commodity, to be used in the arts, that de- termines its value. To prove his case, Mr. Giffen states that the supply of gold is about $95,000,000 per annum, the annual demand for the arts $60,000,000, or about two-thirds of the annual supply ; while the demand for money is only $35,000,000, or about one-third that supply. He therefore argues that the art demand, being the greater of the two, contributes more largely to the maintenance of the value of gold than does the demand for that article as money. It is hardly necessary to point out the absurdity of this claim. The commodity demand in any one year is not made upon the cur- rent year's supply, but upon the entire amount in existence, which, .. is- estimated to be about $4,000,000,000. If the demand for the arts ^4~s entirely ceased, would the addition, to the money volume, of the $60,000,000 now used in the arts produce any appreciable effect on the value of the $4,000,000,000 in existence? On the other hand, what is the demand ou gold for the money use? All the labor and all the salable property of the western world are constantly offered in exchange for it. It is a moderate estimate to assume that each dollar is earned, demanded, and paid once a week, or fifty times in each year. This constitutes a total annual money demand of $200,000,000,000, compared with which colossal sum how inconsequential is the commodity demand of $60,000,000 in maintain- ing the value of gold. The amount of gold annually used in the arts is not very definitely ascertained, but in 1886 it was estimated by the then Director of the United States Mint to be $46,000,000 per annum. Mr. Giffen estimated it at $60,000,000. It is my opinion that the arts forage on the money- stock of gold to the extent of about the entire annual yield. The bullion or commodity value of that metal being determined by its money value, whoever desires to use it for any purpose other than money, takes the bullion at its coinage value, or else melts up the coin. Were gold demonetized and deprived of its money function, and its demand confined solely to that arising from its adaptability for various other purposes, the present stock of that metal on hand and in use as money would, according to the estimates of the director of the mint, supply the art demand for more than seventy- five years to come. But, assuming that the estimate of the Director of the Mint is too low, and that my own is nearer the truth, there is at least fifty years' supply on hand. Were there fifty or seventy-five years' sup- ply of any other commodity on hand in the market, what would be the JONES -6 82 commercial value of that commodity f What would be the value <>f copper, of brass, or of iron, if t! lifty or seventy-tiv. supply of cither uf tln"-i- metals in the market for disposal at one timeT Nobody can pivteud that any commodity of which there is an available supply on hand equivalent to the whole dcm::: nty-livc years can have any but the most trilling value. :ary, therefore, to the generally received conviction that the commodity demand is the dominating force in fixing the value of gold I ma'intain and insist that the commodity demand, if en: I in to the account at all, is insignificant. It is the, supremely impor- tant ffloitfy-deinand, as correlated to the supply, that fixes the value of all money o'f every description w; The demand for gold as a commodity is limited and iluoii: but when that metal is invested by law with the higher func- . and thus constituted a common denominator of all \ tliat limited and fluctuating demand is changed to an unlimited and constant one, which fixes its value for other and inferior n.> iiiniodity-dcmand for gold were, as many believe it ; its acceptance as money, it would be a groat misfortune to society. The happiness and prosperity of the world, if not wholly dependent upon, are largely intluenced by, steadiness in the value of money, and this can not exist without steadiness in its volume. Whatever demand exists for gold as a commodity can only aftVct the volume of money injuriously that is to say, by decreasing it. The admonition of history is that a deficiency in the money-supply is more probable, and intinitvly more to be feared than an < this deficiency is, in great measure, caused by the insidious and of the value of money to disturbance from the demandH for gilded looking-glasse-i, handles and breast-pins, is an <-vil for \vhich is lut pooily roin[>en.sated by the be:n-iit dr-ivcd from such M -. Whatever Other quality gold may possess than as thelx>arer of the tion ia inconsistent \\ ith the healthful and proper .isk assigned it as such. Whenever any port ion of th< is used for any other purpOM than money it as already staled other things remaining nnchan^Ml th. f each dollar depends on the Dumber of dollars that are out. With- out forewarning, and without knowledge on the pan !' ih people. large amounts of the moin-.. .-nwhul.- i niiinl.i i of equities rrsf, and on the basis of which all debts and tin bare been entered is. i>titionsl\ ; to other and always infi-ri"- by far the hich the money func- . i, i the i>: No other n*e oan poaaibly be so- high or so u maintaining all oqnitiei nnt ml ><<'. It aeems unworthy a highh -.it:. :i \vh,ch, as to all (lubjerU other th:m money, legulate.s its :iil';iiis by the ]<]>'.: of int. .iiid bases :ia, scientilit ally ascertained aud corre.ily applied, to <:.-;>-nd lm its mone\ - \\ hich primitive aociety, by reason of the liuiitation of its powers aud the ondei 83 condition of the human mind and hand, was compelled to resort. If the quantitative theory of money be correct if the money standard be, as I insist it is, a steady and duly proportioned numerical rela- tion existing between the units of population and units of money it is the duty of society and government to see that as far as practica- ble that principle is put into operation. The history of the production of the precious metals from the re- motest ages demonstrates that under the automatic system of money this can only be ofiected by the unrestricted coinage of, and confer- ring the full legal-tender function on, both metals. THE PROPOSITION THAT THE GOVKRSMKNT SHOULD LEXD MONEY ON THE 6ECUUITT, OF 1LEAL ESTATE. If a change in the whole number of money units in circulation relatively to population and business.do not atfect the value of each unit, then no objection can be found to the proposition recently pre- sented in the Senate by the distinguished Senator from California, which created some surprise among Senators. The resolution of that Senator contemplates a loan by the Government to holders of -f real estate baned upon the security of the property ; and the issue of a large amount of Treasury notes for that purpose. Certainly, it r . a dollar, in order to perform properly the money function, must have , in it or back of it a dollar's worth of material, there can be no safer security found than that suggested by the Senator from Cali- fornia, namely, the arable land of the United States. It is the most absolutely secure of all securities ; it can neither run away nor be stolen, it can not be burnt up, lost, or destroyed. I Arable land is, in and of itself, capable of supplying all basic wants, L and must be always in demand, while gold, so far as concerns any ) use to which it is, or can be applied, might be dispensed with alto- I gether, with scarcely any inconvenience to society. Certainly money based on land would seetn to be better than money based on gold. Senators who are sticklers for so-called " in- trinsic value" money, and "full-value" money, should be found supporting that proposition. But it must, on reflection, be obvious that, other things remaining unchanged, whenever the total number of units of money (or dollars) in the circulation of a country increases, the value of each unit will decrease. It is an axiom of political econ- omy that no amountof increase in the number of units of money in a country increases the aggregate value of the money of that country. The aggregate value of the money in circulation in a country, can, ceteris paribus, be increased only by an increase of population and business, that is to say, by an increase in the demand for it. yl If. without increase of ponulatiou, the money of a country be in- * creased from, say, $],OlM,OUO,000 to $2,000,000j)00, the effect would be not to add to the aggregate value of the money of the country, but to decrease the value or purchasing power of each unit of the money, so that it would take ten dollars to buy what had before cost but five. GOLD A FETICH DEMAND FOR A STANDARD OF JUSTICE. The history of the world attbrds no example of a money system reg- ulate 1 by human prescience and intelligent calculation. It is not too much to say that the money system of the world the most impor- taut associative instrumentality of civilization, in so far as it is not | controlled for their own advantage by the creditor classes is prac- 1 tically the result of accident. We are even less logical than the an- cients, for they availed themselves of the entire supply of money JONES possible to their civilization ami development. They used t ho full yield of both silver ami gold, while we, in order to line tin- pockets of a privileged caste of money-lenders, reduce the money volume to the loweM po-Mhle minimum by discarding one of those metals and making all debts payable in the other. Gold has been erected into a fetich by methods familiar to the paean priesthood, who forbade investigation of the claims of their idol to the superstitious veneration of their followers. The quality of a universal standard claimed for gold has been set up by the classes which, like that priesthood, had interests to be served by the superstition. All things else may be subjected to the test of reason and argument, but the blightest approach to a scrutiny of the claims of gold ns a much-vaunted universal standard of valua- tion has been repelled by interested casuists and sophists who con- stitute the sacred guard of the temple of the idol. The people of this country, Mr. President, begin very seriously to doubt the sacredness of aso-called standard by which they have been robbed of thousands of millions of dollars a standard that despoils and impoverishes the toiling masses, in order to swell the plethoric pockets of tin- privileged few. From all parts of the Hepnblie we learn that the people have become aroused on this subject, that they ' ml gold to be a standard, not of valuation, but <>: at ion and confiscation. The world at large .shares to a great extent in the doubts enter- by tin- people of thi> country as to the orthodoxy of t i tinning worship of gold. Throughout all Europe the suspicion is lo make itself felt, among those who have no pi , that the constantly appreciating value of this metal bodes no good to society, however adva:.. : may be to the mone\ed classes, and especially the. money lenders. It begins to be feared that there :na\ be too In beDOfl in I hi> art itieial standard, and that tin- pressure upon tin* people, in the fall of prices and the increase of the burden of debt and of taxes, which multiply with time, may have -^sequences upon public order. The. "fgold, never half enough to meet the wants of tin- people anywl n by \ear being drawn upon more and more for use in the arts, while the \ ield from the mines is decreasing, and giving no promi-r nl any material increase from any qnai The . I the time, the standard for \\hich the people andard of equity, a standard of just ice. a standard that shall : i ly and impartially t lie rights of but li part ies to : hat will i My and stealthily add to the burden of the obligat tun uil either side, that will not, under the dealii of t lie part ies for t lie bencf: t of 1 he ot her. I ! step to a leali/ation of that standard is the fnl right fill pn-it mil as a rarl of the inonev of t he "ii of the question, it would be uncharitable not lions minds, of d llliplejlldieed iliqh ..ll'ded ipeistiti \\hidi, notwithstanding _;!it in ot I :ilightcned MI t hat we must .in;, minds contemplate the ] loSS to the i otr "Id. 85 FEAR OF THE OUTFLOW OF GOLD. Any prospect of the outflow of gold is regarded as the opening of r"- a veritable Pandora's box, from which must issue forth all the evils i that can afflict mankind. It is to this fear, no doubt conscientiously entertained, that we must attribute the declaration of the President of the United States that we do not dare to tread on the edge of so dangerous a peril. It is not difficult to make the statement, but it will be very difficult to prove that we stand on the edge of any peril whatever, if most or even all our gold should go. We heard this same apprehension expressed, and with equal, if not greater, force twelve years ago, when the silver question was before this body. We were then assured by the ablest of our so-called " financiers " that the country would be denuded of its gold and that all manner of dreadful catastrophies would result. The prospect was represented to be appalling, although I do not remember that any reasons were given to show how or why gold should leave the coun- try, nor that any statement was made as to exactly how this country woukl suffer if it did leave. For my own part, Mr. President, I regard it as a matter of very little consequence whether gold goes out or not. Certainly if, in order to retain gold, we must sacrifice justice, then I say let gold go. It is not of so much consequence that we should retain gold for the benefit of a small coterie of importers as that we should preserve the equity of time contracts between the millions of our own people who import no foreign goods. It is monstrous to think of violating all equities in time transactions and nine out of every ten of our domestic business transactions are of that character for the absurd and inconsequent purpose of keeping in this country some particular commodity, whether it be designated as money or otherwise. The hoarding or the outflow of gold is a hardship when, under the law, somebody is obliged to have it, as was the case during the war, when gold alone would pay duties on imports. Combinations to hoard gold at that time frequently involved great loss to the importer. But thanks to the silver legislation of 1878 and other legislation mak- ing our Treasury notes receivable for customs dues, no damage could now result from any attempted corner in gold. The creditors of this country never can convince the enterprising and energetic people who form the debtor class that it is to our in- terest that a certain material shall be kept in the country as money, if the expense of keeping it is that the debtors shall continue to be despoiled as they have been for the past fifteen years. If we can only retain gold at the expense of steady and unwaver- ing prices, and at the expense of a steady and unchanging value in money, then the quicker gold goes out the better. The constantly increasing value of gold by reason of its increasing scarcity means the constantly increasing burden of all debt, and involves the final absorption of all the property of the country by the creditor classes. Under the operation of the present system, by which prices are con- , stantly falling and money ia constantly increasing in value, the/ surplus earnings of the people are flowing in a steady stream intoj the vaults of money-lending institutions, and into the pockets of* creditors. In a very intelligent article published in a late number of an in- fluential magazine the Political Science Quarterly there is the significant statement, apparently derived from the best sources, that 88 in the year 1879-'80, one-half of all the mortgages iu the State of Indiana were foreclosed. It were better for society that property should at once be confis- cated than that the great masses of the people in every community should have to struggle through years of painful and exhausting ef- fort in the face of constantly falling prices and then iu a large Krcentage of cases to lose their property at last. But this can not avoided so long as we attempt to keep up what is called the gold 1 standard. It is a necessary consequence of the gold standard that we shall have the scale of prices that obtains in gold standard countriefj If the presence of gold in this country is to destroy our peopTeT u ho doubts that it should go T If its presence is to result in the destruc- tion of equity and justice, who doubts that it should go T Nearly every witness who testified before tbe secret committee of the House of Commons in 1857 agreed that gold could only he held by paralyzing the business of the country. It is estimated l>y wit- nesses who testified before that committee, that iu the panic of 1847, in Great Britain, the property of the country, by reason of the meas- ures rendered necessary to maintain the single gold standard, wajj de- \preciated $1,500,000,000. I commend that report to the careful and serious perusal of the advocates of the single gold standard in this country. Among tbe witnesses before the committee were John Stnart Mill, Lord Overstone, and many other men distinguished in the world of letters and finance. I am informed by the Librarian of Congress that re is hut one copy of the work in the U nit- d States. It would be well worth while for Congress to order a number of copies of it printed, for there is no work with which I am acquainted that con- tains BO much practical information as to the wor^in^ of the single gold standard. According to the testimony taken lf! . i:itry in which ng an international mou.-. . ibis every v MS full face value, gold loses nothing by trun-fcr; hence it is sent wherever it will for the time being nave the greatest pm. in* never tbe general range of prices in tins country <>f com modi- iy dealt in becomes higher than the general range I Of the SS M that then gold <;; I used to advantage b\ purchaning those nrtu les abroad and selling them here. If t behold that goes nut >>* Mom stock thai hoard) no immediate or direct effect upon prices i: the _ prices t ! : iius y tends to secure for our exported producUta betterprice in tin L.I. ;-n 87 market. But if the gold goes from the amount that is in active cir- culation here, and if the void created by this outflow is not tilled with other forms of money, such as silver, or paper, it results in a re- duction of the volume of money in actual use in this country, while at the same time increasing the volume of money abroad. This increase in the foreign money stock causes a rise of prices v abroad, while the corresponding reduction of our currency causes a proportionate fall of prices here, hence there is a constant ten- dency to an equilibrium of prices of all articles of international / commerce. No outflow of gold would follow a rise of prices here except in so far as that rise affected articles internationally dealt in. No rise of prices of such articles as we do not import would tend in any way to drive out gold. If, for example, raw cotton should increase in price m this country, that fact would not tend to drive out gold, be- cause we do not import raw cotton. But should the prices of articles I of manufactured cotton rise here above what those same articles could I be bought for in any foreign country our merchants would send abroad I for them, provided that, after paying the freight charges and cus- f toms dues, they could make a profit on them. So, also, if crockery- ware were made in this country, and its price should rise to, say, double the present price, then, instead of buying the American, or home-made article, our crockery merchants, finding that they could buy in England, France, or Germany cheaper than they could buy in this country, would decline to buy the American crockery, apd would send abroad for any article, provided that, after paying freight charges and customs dues, they could sell it here at a profit, 'i'hat would tend to increase the shipments of gold to foreign countries. That an outflow of gold does not follow from a rise of general prices, but only of prices of articles of international trade, is mani- fest from the fact that if land becomes cheap in other countries, gold does not leave this country to buy it. When real estate is cheap in ] Brazil, or Australia, or in Germany, France, or even England, the / owners of gold in this country do not send it abroad to make pur- chases of real estate. So wages of labor may rise in this country, or compensation for all manner of services that must be performed here, and gold woujd not leave as a consequence. But if cloth were cheaper quality consid- . ered, in England, France, or Germany, or at the remotest ends of i the earth, than in this country, our merchants would send gold for it 1 in order to sell it here at a profit. Altogether too much importance is attached to the possession of a large stock of gold, unless that stock form part of the active circu- lation of the country. So long as it remains in circulation it sus- tains prices and develops industry and internal commerce. But the tendency of gold being to find the most profitable field for operation, its continued presence in the country can never be relied upon. When we take gold from other countries prices in those countries fall, owing to the reduction of the volume of money there; and owing also to the action of the foreign banks in immediately raising their rates of discount on commercial paper and suddenly calling loans. As \ there is less money left in such country with which to pay for com- f modities, we are obliged to accept lower prices lor the products we ship to it. The larger the stock of gold, therefore, accumulated by UB the lower, 83 necessarily, mnst be the price which we can receive for onr surplus agricultural product*. * t In order to maintain purity between the metals, it is not necessary / for us to have all the gold we now have ; $00,000,000, or even $100,000,000 of gold, would maintain that parity. The parity be- tween the metals can never be broken until all the gold leaves, and provided we retain one or two hundred million, the rest can not be placed more advantageously than where our languishing surplus v product* must be sold. V> When gold leaves this country it is because prices here are rising. Prices are now lower than they have been since 1647. Mnst iln-y continue declining in order that we may be able to retain all our goldT It is manifestly impossible for the people of this country t<> prosper with a constantly lowering range of prices. It is equally impossible for the present level of prices to be maintained with u constantly increasing demand for, and as constantly diminishing a supply of, gold. It is universally admitted that an increase in the money circulation of this country at the present time is an exigent necessity. The advocates of the single gold standard, while udmit- ting that we mnst increase our money volume, the effect of which mnst be to maintain, if it does not raise, the level of prices here, insist that we shall let none of onr gold go in order that prices abroad may rise. Mr. BLAIR. May I ask the Senator a question T Mr. JONES, of Nevada. Certainly. Mr. BLAIR. Does the Senator mean to be understood that the falling of prices is an absolute demonstration of the increased value of the money without limitation T Mr. JONES, of Nevada. I have already, in the early portion of my remarks, had occasion to state that when a fall in prices was brought boat by a larger subordination of the forces of nature to the uses of man, as where the comforts and conveniences of life could be pro- duced with less sacrifice than before, it was not an injury to society, but an advantage. In other words, if, by a certain amount of sacri- fice seventeen yean ago, only one pair of shoes could be produced, and if by the same sacrifice two pairs could be now produced, there would be a lowering of the price of shoes to about one-half of what it was seventeen years ago, which would be a very great benefac- tion to mankind. Hut, as I then stated, there is one certain sign that that is not. ex- to (he slightest extent, the cause of the present universal fall of price*. When prices fallowing to improvements in manufacture, business revives, the masses of the people are at work, those who toil hud themselves possessed of more of tin- comfort*, of the con- veniei VCD nf t lie luxuries of life than In-fore. Th< better contented with their condition, and more buoyant and hope- ful than before. On such occasions money becomes more and nmre in demand than it was before, and instead of being hoarded is put into active and productive business where it will make a profit. Hut when interest falls, pan i>atu, with the fall of prices, it shows that the fall of prices is not one, except in the smallest degree, to im- proved methods of production, but to the increased value of money. Mr. HLMi; I wa-. not contro\er!ing the Senator's theory as to the exiiting fu< -IN in thi* country, but I understood him to be"l.< down an absolute principle, applicable under all ci re u instances ana in all times, that the fill of prices is a demonstration of the increased ralne of money. I supposed that the fall in prices resulting from a 89 protective tariff was beneficial, and not an indication of an increase in the value of money, and that that fall of price was not owing to the increased value of money, but was by improved machinery and all that. So it is possible that some of the fall in prices in this country may be owing to increased facility in the matter of produc- ion and to the beneficial operations of the protective tariff. Mr. JONES, of Nevada. Mr. President Mr. REAGAN. If the Senator from Nevada will permit me, I wish to ask the Senator from New Hampshire if he means to be under- stood as assuming that a protective tariff reduces the value of the commodities produced ? Mr. BLAIR. I was simply asking for information of the Senator from Nevada, and he can answer that question much better than I ; but the Senator from Texas understands very well that I do believe a protective tariff reduces prices. Mr. JONES, of Nevada. Mr. -President, so far as a tariff has the effect of reducing prices in any country, it is not by reason of the levying of any certain percentage of duty on the imported goods. The first effect of the tariff certainly always must be to raise prices. The fundamental theory of the tariff is whether it be correct or not I am not now discussing that by that tariff you place the price of manufactured goods up to a range at which they can be produced in the country in which the tariff is levied, and upon the level of the range of wages and manner of living which obtain in that country. By so doing, if you have a proper volume of money, you set all your people at work, and keep them at work at a variety of occupa- tions. In such case every forge, furnace, and factory becomes a school, every machine-shop an academy, and every cunning device and invention becomes a lesson, teaching the people how to deal with the subtle forces of the universe. So far as this country is concerned the theory of the tariff is that 65,000.000 people should have a varied and complete system of manufactures, which should supply practi- cally all their own wants, instead of an abnormal proportion of them being driven into the single occupation of farming and relying on foreign manufacturers to supply such finished products as they need. To draw out and develop the aptitudes of a people a large variety of occupations is indispensable. When all men are employed at their aptitudes new inventions multiply, progress is accelerated, and the secrets of nature are more rapidly unfolded. Hence the McCormick reaper; hence the sewing-machine, that great instrument which clothes the world, because of the discovery that the eye of the needle should be at the point ; hence the air-brake, the telegraph, the elec- tric light, and thousands of other inventions that a protected people originate and develop, which would perhaps not have been origi- nated or might have been long delayed if it had not been for the dis- couragement to imports caused by the tariff, and the encouragement to our people to go into manufactures by which their varied talents .are drawn out and cultivated. There is no doubt that eventually as our conditions improve, in- creasing numbers of our people will by degrees emerge from agricult- ural and enter manufacturing pursuits. A tariff, by stimulating the organization and development of industries, trains men to greaterskill and perfection of workmanship in a variety of depart uaents, and with greater skill comes greater efficiency of labor, and so greater economy of time. In that way the prices of certain products are in time re- duced ; but that is not a reduction of which any one complains. 90 The trne canse of the present discontent will not be found in the protective tariff, but in the exactions of the single gold standard. Fifteen years ago England was on the gold standard. It i- on the gold standard to-da\ ; yet prices in England are ;{."> p-r nt. lower than they were fifteen years ago. Then- being no reason \\ by there should be any change in the trend of prices, so long as a tieiee contest for the possession of gold shall be waged l>et \\e--n Kngland, France, Germany, and the United States, we are just i tied in u ing that a proportionate declineof prices will continue. That n a further decline of 30 or 35 per cent, in prices during the next tilt, en years. Where is this tendency to stop f and if it does not stop, how long will it be before the masses of the people become the boini of the creditors? It is shocking to the moral sense of mankind that a // few money-lenders and bondholders should thus be able, silently a. id insidiously, to wreck the business of every country in the world by v constantly increasing the value of the money unit. While admitting the necessity of more monetary circulation, our gold standard friends fail to show us how it i- possible for an iuc: m the volume of money to benefit our merchants, farmers, or mechan- ics if the prices that prevail in gold standard -omit i ie- are to )>i vail here ; for that is what the gold standard means for us, Mr. ! It means that the prices that rule in gold standard count rii > an- to rule here. The extreme indefiniteness with w hich the term "gold standard " is used baa so befogged the relation which gold money bears to in- dustry and commerce that people lose sight of the essential f< attire of that relation. It is impossible to have a clear conception of the gold standard without keeping in view exactly what is implied by the term. What men must nlean in this country by "the gold Standard " is not the touch of the im -tal. l'<>r tl:.\ M ver touch it, and rarelv, if ever, see it. The maintenance of the gold standard here simply means the maintenance here of the range ot pi ice- that prevail in gold -using countries; that is to say, that low and low* ring range of prices rendered necessary by the attempt to nn .: \ value of the constantly increasing mass of the piodiu-ts of industry \ in all the western world by the constantly diminishing volume uf J gold. No relief can come to the toiling masses of this country until | we can lift our prices above those that now prevail in gold-i countries. D if our prices remain as they are and do not increase, gold will eventually leave the country if it continue to increase in value Mil has been increasing during the past fifteen years. We ha\e been enabled to maintain the gold standard hen- for the past twelve years notwithstanding i:iblc addition of nnmes other than 'nt we have been aid-- to only because ntricH hav been using an equal or greater amount of niney other than gold. We have been using no greater ptopoi tion ot silver or p.ipi-r M .i.ney than other countries ha\ ing (lie gold standard are using, hence we have b n able to maintain I heir level of prn - and Still keep the mct.Js : llm \\ hene\ ei \\.- shall atten pt to prevent a further fall of prn. - in this country, it will i>e impossible 1 1 to i. 1. 1 1 n our gold so long as price* in gold n -ing conn trie- con- tinnc to decline ;m they have been d*M-limng. <.].! \\ill leave M 3' cause ofcontrae tion abroad as of inllation here, if by ' in- ation" is meant acoinag. -uihci.i,t to maintain prices at ] a steady level. Should gold leave the country, then, in order to supply its place, 91 in order to maintain the status quo in prices, and prevent a further fall from the present low range, we should need to have as many dollars of silver in circulation as there are now dollars of gold. Gold would go out only because our prices were rising, and as it went prices would cease to rise. That process might continue until three or four hundred million dollars of gold had gone. In all this, where would be the disadvantage to our people ? Considering the rapidly increasing population and wealth of this country, all the silver that can be procured from the mines will be necessary to maintain the level of prices and to keep pace with the increasing demands for money. If, however, it slightly exceeds and it could not at the utmost more than slightly exceed the amount actually demanded by increasing population and business, the over- plus of each year would take a great many years to drive gold out of the country, dollar for dollar. For, when prices here, of things internationally dealt in, are at an equilibrium with prices of the same articles abroad, gold can not go any faster than silver conies in. IF $2,500,000 SILVEB FEB MOXTH HAS NOT DRIVEN OUT GOLD, HOW MUCH WILL DO 60? For twelve years past we have had a silver coinage of nearly $2,500,000 a month, yet no gold has been driven out. Having tested the capacity of that quantity of silver to drive out gold, we find that instead of driving it out its coinage has resulted rather in bringing gold in. For, to whatever cause the influx of gold may be ascribed, it is unquestionable that the gold has come, and it has needed all that gold, and all the silver that we have coined, to maintain interna- tional prices hrre. It is admitted by all that gold can not go out except by reason of a rise in this country of the prices of articles of international com- merce beyond the prices of the same articles prevailing abroad. It is only then that it becomes more profitable to send out gold in pay- ment for our foreign purchases than to send out commodities the products of our own country. Commodities will always be sent out in payment for other commodities so long as it is more profitable to send them than gold, and when, by reason of low prices prevailing abroad and high prices here, it is no longer profitable to send out commodities, purchasers send out gold, but only because it is to their advantage to do so. Now, having seen that the coinage of $2,500,000 of silver each mouth was insufficient to so raise prices in this country as to induce gold to go abroad, but that on t'he contrary it resulted in an influx and accumulation of a large amount of gold, we may safely assume that only so much of the amount of silver which Congress shall now provide for as exceeds $2,500,000 a month will have any influence in raising prices in this country above international prices, and so providing a stimulus for gold to go abroad in payment for commod- j ities imported into this country. If the amount of silver which shall be now provided shonld be, say, $5,000,000 a month, the excess over the present coinage would be $2,500,000 a month. This, then, would be the amount that would drive out gold. As one dollar of silver would drive out no more than one dollar in gold, no more than $2,500,000 could go out monthly. That would leave in circulation the same amount of money that is in circulation now. There would still be no increase in the money volume of the country, and, with no increase in the volume of money, prices here would not rise above international prices. At the rate of $2,500,000 a month, it would take twenty years to drive out 1600,000,000 of the $700,000,000 of gold now in this country. It would take even longer than that, because the $600,000,000 driven out would tend to raise international prices abroad, and so check tin- outflow of gold from here. Mr. Mcl'HKKx >N. Will the Senator yield to me for a question, or does he prefer to go on T Mr. .)' >N ; ula. I am always ready to answer a question. Mr. Ilel'llKKSON. I do not want to interfere with the Senator's iii.t of argument, or with his speech in any form, hut it does seem to me that there is something fallacious about the Senator's argu- ment, or else my judgment and the experience of the world is all wrong. I wanted to ask the Senator this question : If it be known that the Government of the United States, if you please, by such an increase of the silver coinage in this country an will be produced by the tree coinage of silver, to which theory, as I understand, the Sen- ator is fully committed if that be the theory of the Government [hereafter by the command of Congress, I want to ask the Senator if I be broadly and boldly asserts that no gold can be driven out of the 1 country to a greater extent than dollar for dollar for the silver that jconies in ? Mr. JON KS, of Nevada. Absolutely ; I say so. Mr. Mcl'll KUSON. Then I want to ask the Senator another ques- tion, which seems to be pertinent. Does the Senator assert that if a 72-cent dollar, the value in bullion of a silver dollar during the year 1889, as has been furnished us by the Director of the Mint and the Secretary of the Treasury, were coined without limit ( I say without limit, the limit being, of course, the amount of bullion that is brought to the Treasury to be coined), and the people of this country who have been in favor of a safe and honest currency, a currency either gold or as good as gold, which the Treasury has been able to main- tain, having forced no silver upon the people if they did not wish it, and in that way the. silver dollar having been maintained equal to the gold dollar, I want to know, with the people of this country . the holders of $500,000,000 of gold, how it is possible for the Senator to believe that with a 72-cent dollar to take its place the gold coin would circulate for a single we. k. or u single day, or a ingle hourT If they have the gold will they not hold itf JONES, of Nevada. The Senator has so involved his un- .e btinkH, tin- moneyed men holding$500,000,000of gold, with a certainty >i tin- free coinage of silver and nomg to a silver basis, for . what it means, put their gold in circulation, or will they hoard it T Will it disappear! Mr. .)< >N KS. of Nevada. I scarcely know what the Senator means by a "silver basis." He talks about a Tv'-ccnt dollar. W have seen a 72-cent dollar. The papers in the Kant have told ns that th* silver dollar was worth 72 cento. I recollect talking on that subject once with Home Senators in the cloak-room. During one of the Senate pages brought me a telegram, on he tan! the Megraph mrMenger had told him there were 50 due. 1 gave the page a silver dollar and said to him: " I have been i >v some very respectable and intellectual gentlemen inhere, someof them candid ..i. - f..r the Presidency even, that ti lar Is worth only 76 cento. 1 do not want to cheat a little boy. Take 93 this out, and if the boy thinks it worth only 75 cents he can send me back 25 cents, and if he thinks it is worth a dollar he can send me back 50 cents. I will leave it to him." The page brought back 50 cents and said the telegraph boy told him he did not know what those old "duffers" in there might say. but it was as good a dollar as he wanted and was very hard to get. [Laughter.] The Senator talks about the bullion value as though that had any- thing whatever to do with the value of the dollar. I have attempted to demonstrate that the material that was in the dollar has nothing whatever to do with it. Let me illustrate. Suppose the entire sup- ply of silver of the world to-day were $60,000,000. Suppose the law limited the coinage of it to $58,000,000, and every dollar coined was at par with gold. Suppose there were a demand for half a million dollars of silver, to be used in the arts, and that the remain- der ($1,500.000) of uncoined silver were barred from the imperial money use. That supposes a supply of $2,000,000 left after satis- fying the requirements for coinage, and supposes only half a mil- lion dollars' demand for use in all the arts. In that case there would be a $2,000,000 supply bearing down a half million dollars' art demand, or a proportion between supply and demand of 4 to 1. Suppose that under those circumstances silver bullion went to 50 cents an ounce. Would the Senator then say that 50 cents an once was the value of the $58,000,000, and all the rest of the coined silver of the western world, while by coining another million and a half, which would be nothing to a country like this, all the silver would be at par with gold ? Every ounce of silver coined in Europe and the United States is at par with gold, a thousand or twelve * hundred million dollars of it to-day in France, $200,000,000 in Ger- many, $370,000,000 of it here. We are not dealing with the price of silver bullion, that portion of silver that is deprived of its imme- morial use as money. We do not say what the commodity demand for silver may make that worth. Such a consideration has no bear- ing whatever on the value of money. I will suppose that in some one county of the United States a law were passed that the wheat grown in that particular county should have no right to go through the grist-mill, and that that wheat, as it might very naturally do, being deprived of use, fell to one-half the price of the wheat grown elsewhere in the country. Would the price of the wheat of that one county thus under interdiction and denied the grist be a fair gauge by which to measure the value of the entire wheat crop of the country ? Manifestly not. All we have ; to do is to take up the little " slack" of silver, and all of it will at ' once be at par with gold ; then weshall hear no more about the " com- I modity value" of silver. That is the contention that the bimetal- I lists make. Mr. HEARST. It will be $1.29. Mr. JONES, of Nevada. It will be $1.29 an ounce in one week in three days in fact the very moment you give it back its ancient right of coinage and restore to it its full money power. You coin of gold all that is brought to the mint, and you deny to a certain portion of silver that same long-established privilege, and then you measure the value of the whole supply of silver by that of the little fraction that is not coined, and which therefore has to find a market as a commodity. Mr. McPHERSON. Then, if the Senator will permit me, he nec- essarily proposes that the Government of the United States shall take up all this " slack," as he calls it, in the surplus quantity of silver 94 ami shall use it in the coinage. The mints of Europe being closed the coinage of silver, there is no other place where it will be coined. Now, if tin- Government of the United States should use all .i-plus silver in the country, which lias simply forced the price down MHO- \\c leiiM'iieti/ed silver in If?.-! more than 'JO percent. Mr. JONKS. of Nevada. Gold has risen '> per cent. Mr. IfoPHEBdON. Then I think the Senator's argument is upon this idea and upon this plan, that after wo are upon a (silver I>;IMS. as we should be most assuredly, there would be no inequality in the ini:> M it would be all sil\ i" Nevada. And no inequality between it and gold. Mr. M 1'HEKSON. Certainly not, because there would be no gold in circulation. But let me ask the Senator another question. While D use his short-legged silver dollar for the payment of debts, when he conies to make a new obligation would not the price of the assume a price equal to the difference between gold and silve: t In other words, while you can use a debased currency for the pay- ment of debts, if a legislative decree requires that you shall accept a can not use it for any other purpose. Mr. JONES, of Nevada. I can not understand the Senator. We hav not provided any " short- legged " dollar. The Senator is as- suming a good many facto and attempting to adjust me to them. I ask the Senator to wait until he has heard my argument, and I iuvite the Senator then to make reply to it. r Mr. McPHERSON. I am sorry tha*t I interfered with the Senator. ' Mr. JONES, of Nevada. It was no interference on the part of the Senator, except that I can not separate the Senator's questions from the argument and assumptions that he makes. As to the outflow of gold, as I have said, it would take a long time for oven $400,000,000 of it go. The amount of gold driven out would tend t<> raise prices abroad by making money more plentiful there, and so check the ont- ilou of gold from hen-. 'When Senators speak about $4-00,000,000 of gold being withdrawn from circulation hero a question that in a little curious arises. What are these people who own it going to do with that gold after they have withdrawn it from circulation f Are they going to invest it in (ireat I'.ritain ? Are they going to invest it in T Are they going to the Cape of Good Hope, to invest it f If they are they will reverse the policy that English capitalists are pur- suing now and have been pursuing for years bringing their gold over here for investment. The Senator tells us that gold istodis- r from circulation. What will the owners do with itt Where and in what are they going to invest it t Mr. Mcl'HEKKON. It will be held fora premium. Mr. .!<>M nla. Hut who will buy it al a premium f Who . t at allf For what purpose is it nee-led ? Who is going to Giy any premium tor it \ Nobody is " shori " <>n it. and there is no an\ body to ha .cut, nobody wan;-, it enough i.. ^ive a premium for it. It is only worth what is daily paid in the mai i.et-, of the world ami 'i pay .1 premium for it. It - -\ith which Jiten the jeople who demand reform in the, currency of this coiiiitiN. I.- t them withdraw their gold. I tell the ."M-nator it is not the men who hoard the gold in \ who maintain or promote the pi..- :ln- country, but tin- - in the wheat-fluids and: mi the farms of the country, the men MI the planing mill-., the IOI^CH, the Inrnaees. the fao- toriec, and in all our institution* of industry. It is they that bring 95 us our prosperty, and not these people who are gambling for pre- miums ou gold. Let them gamble among themselves; let who lose and let who win, the people care nothing. The people of the United States are going to institute a money that shall install and maintain justice as between the citizens of this country, and they will not be impeded. I can tell the Senator that neither his party nor the Republican party will ever impede the march that this great country is about to make the first in the world, I am glad to say in adjusting to the demands ot in- dustry and commerce, that great instrument, money, the non-ad- justment of which, as I have already stated, has, in my belief, caused more misery than was ever caused by war, pestilence, and famine. But to resume at the point where I was interrupted: The gold going out would tend constantly to restore the equilib- rium between our prices and those of the gold-using countries, making the proportion of the gold outflow each year less than that of the year before. If there be included in this computation the remaining $100,000.000 of gold, which would remain after the out- flow of the $600,000,000, we shall be compelled to come to the con- clusion that the time when our stock of gold can be driven out will be almost indefinitely postponed. Bnt even should all our gold go by reason of the remonetization of silver, it will not be to the injury of the gold standard, but to its great advantage, and to the equally great advantage of the masses of the people, as well of this country, which the gold may leave, as of all countries to which it may go. It will make the "gold standard" consistent with the prosperity of the countries maintaining it. But instead of preserving the gold standard of to- day, which is a standard of wrong, it will inaugurate a gold stand- ard that will approximate to a standard of justice. The new " gold standard " that would be established by the out- flow of our gold would be a standard of prices resulting from the influx into England, France, and Germany, the principal gold-using countries of Europe, of more than $600,000,000 of money. So considerable an addition to their money-stock would raise prices in those countries, and by remaining there, would, with the current production, which we could spare to them, tend to maintain prices at a steady level. Such a condition would be an inestimable boon to the overburdened masses of Europe, and their prosperity would not be attained at the expense of the people of the United States. We could well afford to let gold go, since, by the coinage of silver, our own money volume would not be reduced. The rise of prices which it would effect in Europe would not only, as I have stated, secure better prices for our exported goods, but would undoubtedly enable us to maintain prices here at a substantial parity with those of Europe that is to say, with those of the new, more rational and more beneficent gold standard which would be estab- lished by the full remonetization of silver in this country. PBACTICALLY NO GOLD MOSEY IN THE UNITED STATES. But, aside altogether from this consideration, the gold that we already have is really a surplus it is practically a dead and useless article. Gold, Mr. President, can not with entire truth be said at the present time to form any part of the money of this country. Who but a bank clerk ever sees a go'd piece ? With the exception of a few million dollars on the Pacific coast, gold is not really in cir- JONES eolation in this country. It is performing no useful function what- soever. While I am engaged in delivering these remarks I venture to say no Senator within the sound of my voice has in his pi" single gold coin of any denomination whatever, or any paper repre- sentative of one. This is the answer to the fear expressed by some Senators that when those who hold gold shall observe the enlargementof the money circulation by the issue of the proposed Treasury notes they will be likely to hoard it. They are already hoarding it. Every body knows that that is about all that gold is used for in this country. It ia hardly possible for it to be hoarded to any greater extent than it is at the present time. So little is this metal in circulation that I do not deem it any exaggeration to say that there are millions of people in the United States, "native here, and to the manner born," who have never in all their lives seen a gold coin. How absurd, then, is the claim that any loss is to be suffered by the alleged future hoarding of gold, or that any calamity can occur to 65,000,000 people by the disappearance of that which has long since disappeared. THE ARGUMENT BASED OX OUR BALANCE OP TKAM . One of the staple arguments of the advocates of the singl< standard is, that if our stock of gold were greatly reduced we should be unable to make payments to foreign countries in case tin- balance of trade turned against us. It is only through an excess of imports over exports that gold could go, and this country now prodv nearly all article* almost all that it consumes. With the exception of i v. o years there has not been a balance of trade against us for fourteen years, as the following table will show: Value of mrn-litindite importnl into, and exported from, the l'i from 167(3 to 1889, inclusive; also annual wess of imports or of ex- port* specie values. tiding June 30 Total ex- port*. Total im- ports. Total export* and ini|M>rin. Kxrwn ot : * over imports. i:\. <.<. .it import* port*. 1878 ... Dollan. 540, 384, 071 Dollan. 460 741 190 Dollan. 1,001 125,861 Dollan. 70,643 481 Dollart. 1877 ... r, tj -i?-, :'j) 1, 053, 798, 846 1878 i.-ii -',-, 7'.-; lira 710 430 441 445 777 775 264,661 C06 IBM r ;:, i. ;- .:..- t.'. 7 '*.M 7l''i 1 503 1881 ... 902 877 846 01 f,.;| i;v- 1 545 041,974 750, 542. 267 7lM i,.;;t :,74 j . '.<> ..-.: r . -..' 411 ' -0 014 loo i; 71 : . ] r,, ; ITJ '-"7 ::" ' 1 319 104 602 4.' 1886 ... 670, 524, 830 1 .'. IM i::>. 1 314,960 966 !--: ... 716, I/- an -:i i TU* 18&8 ''.'' '.! | .7 28,002 607 18... 74J . .;:. | 7:i '77 This table shows that while for last year there was a balance agftinnt us of 12,730,277, andti : >ie ..t - :.,i al! former years from 1887 back t<> 1-71 the habiicc* \\-cn- in our favor- all the "way fn.m $23,000,0< ' In 1--7 to 0H6,< 00,000 in I I. Hut tho total want of significance so far as the movement of gold is concerned 97 attaching to any figures showing a balance of trade against the United States will be seen by an analysis of the figures for any one year. Let us take for example the imports and exports for 1889 and analyze them by countries. I now present a table in which I place in one group the gold-using countries, and in another the silver and paper-using countries. Exports and imports of the United States to and from the various gold- using and silver-using or paper-using countries of the world for the fiscal year ending June 30, 1889. Countries. Exports. Imports. Gold-using countries: $42 141 156 $43 009 473 23 345, 219 9 816 435 3, 903, 937 846 901 46 120 041 69 506 618 68 002 594 81 742 546 382 981 674 178 '69 067 165 079 988 923 Italy - 12 C04 848 17 992 149 15 062 939 10 950 843 3 266 814 1 282 556 11 946 348 4 636 661 2 615 569 2 983 319 Turkey 4 687 731 2 936 213 895 344 ' 12 321 980 5 998 211 Silver and paper using countries: Austi la-Hun gary 72t> 156 7 642 297 Russia. - 8, 364, 545 2 985 631 11 486 896 21 253 601 4 325 923 8 414 019 Hawaii 3 375 661 12 847 740 Argentine Republic 9 293 856 5 454 618 Brazil 9 351,081 60 403 804 Chili 2 972 794 2 622 65 780 835 314 032 Colombia 3, 821 017 4 263 519 Uruguay 2, 192, 848 2 986 964 3 738 961 10 39 569 11 691 311 52 130 623 Hay ti 5 340 270 5 211 704 Porto Rico 2, 224 931 3, 707 373 British West Indies 10, 4e3, 973 20, 723 268 Dutch West ludies , 887, 778 654, 320 China 6 477 512 18,508 678 India, British 4. 330, 413 20 029 601 India, Dutch 2, 249, 604 5,207 254 4 619 985 16 687 992 By this table it is seen that the only gold-using countries having a balance of trade against us are Canada, $868,317; France, $23,446,577; Greece, $823,824; Germany, $13,739,952; Italy, $5,387,301; Sweden and Norway, $367,850; Turkey, $4,687,731 making a total balance against us in gold-using countries, $49,321,452 against which we have a balance in our favor with Great Britain alone of over $200,000,000. The balance against us in favor of all the silver using countries could of course be readily settled in silver; and by carefully noting the figures of the table last given it will be seen that it is in the last 7 98 degree improbable that there will ever be a balance of trade against us in the gold using countries, taken as a whole. Hence it is clear that if we had no gold at all we could readily settle all foreign balances that might lie against us. Nations, however, ultimately, and on the whole, square their ac- l counts with commodities. Every nation must buy what it v I with its own products. In this country .especially have we nothing I to fear, because any temporary balance against us could alv. :i / met liy the yield from our own mines. No country has any difficulty by reason of any difference in money systems in buying what other nation has to sell. view is supported by all writers on political economy. I need quote but one. Professor Cairnes, professor of political economy in the University College of London, in his able work on " Some un- settled questions in political economy" (1674), says: It appears to me that the influence attribut eel by many able writers in tip States to the depreciation of the paper currency as regards its effect* on the im eign trade of the country is, in a 1:1 > at decree, purely imaginary. An advm the scale of prices. m*a*itred in gold, in a country, if not shared by other will at on -.ireign trade, giving an impulse to importation!* and . \]>oitittioii of all commodities other than gold. A similar efl'ect is very I by American writers to tho action < r.t, d by American writers to the action on prices of the greenback may racily be shown that this is a complete illusion. Foreigners how should the advance in paper prices constitute an inducement for them is thitherf The nominal gain in greenbacks on the importation is ex- . 1>\ the nominal loss when those greenbacks came to be cm into void or commodities. The gain may, in particular cases, exceed the lo- if it does, the loss will also, in other cases, exceed the gain. On the whole, and on an average, they can not but be the equivalents of each other. Mr. President, the best place in the world where we can have gold is not in the Treasury of the United States, not in any suh-ti. but in circulation, if not in our own country, then, in the ! countries where our .surplus products are sold. That is where gold would do us the most good by making money plentiful and pricf- ondin^ly high. It does us no good here whatever, locked up as it always is, and doing rone of the work of money, but simply re- duces to tiie minimum the tax-paying and debt-pay in^ power of our wheat- and cotton-growing communities. An unjust money should not be tolerated, whatever tin- material of which it may bi composed, and the people of this country will not They do not fear the outflow of gold. If, in order to r.-- taiu it, they must continue to lose as they have been losing for the past (itteen \ears, they will favor its going, and raise a shout of joy when it does go. With a perfect money system in our own country the range of our domestic prices would continue stalile and equitable _ard to the prii : n eoinit ries. Onrloreie,: would tak. -.!!, and whate\ er the balances might he,Ih--y would l>e much oltener in our favor than against us, ami in reality Concern only the importing merchant and not the . nt or the people of the i'ii B difficulty of gold-luring tries to get our money, in which to pay us the balances the\ owe ns, would lie much greater than our dim'culty in o. A Inch to pay them the occasional balances we them. more serious question, (if it be a seri on at all, which I deny) is hu\v our money, not how we 99 shall get theirs. As the balances would be for the most part in our favor, it is for them to take such steps as may be necessary in order to pay us. But there is no just reason to apprehend di fficulty in either case. A great country like the United States will have no trouble in buying the money of any other country at equitable rates at rates regulated by the purchasing powers of the moneys of the two countries, respectively. No country in the history of the world, having a money local to itself, has ever found the slightest difficulty in buying, upon ratios determined by the relative purchasing powers of the two kinds of money, a sufficient amount of foreign exchange (which simply means the money of another country) to meet all adverse balances of trade. While earnestly advocating the full remonetization of silver and the maintenance in this country of a money volume sufficient to in- sure a steady level of prices and an unchanging value in the money unit, I entirely disclaim any desire for an inflation of the currency. My contention is that without silver we can not keep prices from further decline, and can not have enough money to serve the grow- ing needs of population, industry, and commerce. At the same time I can not refrain from expressing the conviction that, as between inflation and contraction, no careful student of his- tory and of economic science can for a moment hesitate in deciding that the evils inflicted on society by contraction have been longer in duration and infinitely greater in degree than any that have ever resulted from inflation. Daring all periods in which there has been a generous increase in the money-volume of a country or of the world, activity and prosperity have been its accompaniment. I challenge the citation of an instance to the contrary. With a volume of money increasing at a rate sufficient to meet the demands of a growing population, and especially if the money be such as will not leave the country, but, under all circumstances, will remain in it, to sustain prices, preserve equities, and reward labor, no country with a proper coordination of its industries can be otherwise than prosperous. The property of mobility of fluidity which is so much lauded in gold, is precisely the property least to be desired in the money of a country, if that property of mobility or fluidity is to keep alter- nately bringing money into and taking it out of the country, disturb- ing prices and disarranging equities. When it comes, if it enters into circulation, prices rise ; when it goes, prices fall, and thus, instead of having a steady and level platform of prices on which the trade and industry of the Republic may rest, like the firm and level platform of liberty upon which all our citizens stand, we whose business it is to " see that the Eepublic take no harm," furnish our people with an " inclined plane " of finance on which all their business must be con- ducted. Men buying this month at the elevated end of the plat- form find themselves selling next month at the depressed end. Whenever in the history of a country there has ben least reliance on international money (gold) and more reliance on merely national money (even of paper when reasonable limits were placed upon its quantity), prosperity has been everywhere present. I need not recall to the minds of Senators the wave of prosperity that swept over this country when it was without any international money and resorted to the "greenback" currency. When, as a result of the Franco-German war, France was deprived of international money, suspended specie payments, and resorted to a properly limited paper currency, her progress was unbounded. 100 Xo period in the history of Great Britain can compare f..: -!>erity, or achievement, with the twenty years preceding l-li'.. whc: .ynicuts wen- suspended, and during which perioil, as testified to by witnesses beforo the si-eivt committee of Parliament, the discount 'rate of the Bank of England did not sutler change ; whereas from that period t<> 1.-17 the rate was ch:tn_ n times, and from 1*47 to Iei74 as many as -J7 i times, the ilno tnations being sometimes of the most violent 'character. When gold threatens to leave Great. Britain the rate of discount at the Hank of England is raised, with the view of disroui;. MtiiiL, r , the ontllow. Raising the rate of discount is like puttiug the brakes on a railroad train; lowering the rate is i: letting oil' the brakes. These changes were not due to any greater demand for in but to the movements of gold. There was frequently, in the condi- tion of business, no warrant whatever for a rise in the rate of discount. The only reason for it was to prevent gold from perform- ing what "our most conservative financiers" denominate, "noble" function of "mobility"' of " fluidity " namely. : function of gnin:; "where it was wanted." This Junction uf go. " wi \\anted" is described as ih.- i^reat "mission" {old, and it is assumed that it will never be \\..nied at more than one place at a time. Yet hear what the chancellor of the exchequer of Great Britain said a few days ago in the House of Comnic I admit that.au interested in the commerce an. v or Id having de, i.-ec I to ^taml by the automatic system wo are now . ;h tin- question as a practical one. The onlv relief that can be had i- to ad In -i e ,t i ictl y to that system. and give it full >eope. Heniove nil legislate n-striet ions and let : :itofull the precious metals tl... led mines. 101 THE WORLD'S SUPPLY OF GOLD AND SILVER. Since for thousands of years the world recognized both silver and gold as money, can anybody tell what has happened to render one of them unfitted for the money use ? No argument based on fluctuations in the current supplies of either of the metals can militate against the use of both as money. The fluctuation in the annual yield of both, taken together, is much less violent and less frequent than the fluctuation of either taken separ- ately. By the use of both, society has much greater security against the evil of an insufficient money volume. While a large yield, now of one, and again of the other, has taken place, there is no instance in the history of the world of an extraordinary yield of both occur- ring simultaneously, except in the single instance of the first discov- ery of the mines of America. When the gold mines have been yield- ing largely, there has been no special increase of silver, and during the period when silver has been produced in comparatively large quantities the gold mines have been less productive. This will be illustrated by the following table showing the yield of both gold and silver, from the discovery of America to the present time. Annual average production of the precious metals throughout the world from the discovery of America to 1872. [From Director of United States Mint.] Periods. Gold. Silver. 1493 -1520, average for each vear $3, 855, 000 4, 759. 000 5, 657, 000 4, 546, 000 4, 905, 000 5, 662, 000 5, 516, 000 5, 829, 000 6, 154, 000 7, 154, 000 8, 520, 000 12,681,000 16, 356; 000 , 13, 761, 000 11, 823, 000 11, 815, 000 7, 606, 000 9, 448, 000 13, 484, 000 36, 393, 000 131,268,000 136, 946, 000 131,728,000 127, 537, 000 113, 431, 000 $1, 953, COO 3, 749, 000 12, 950, 000 12, 447, 000 17, 409, 000 17, 538. 000 16, 358. 000 15, 223, 000 14, 006, 000 14, 209, 000 14, 779, 000 17, 921, 000 22,158,000 27, 128, 000 36, 534, 000 37, 161, 000 22, 474, 000 19, 141, 000 24, 788, 000 32, 434, 000 36, 827, 000 37,611,000 45, 764, 000 55, 652, 000 81, 849, 000 1521-1544 do 15-45-1560 do 15C1-1580 do 1581-1600 do 1601 1620 do .. 1621 1640 do 1641-1660 do 1661-1680 do 1681-1700 do 3701-1720, average for each year . ... ..... .. 1721-1740 do 1741-1760 do 1761-1780 do 1781-1800 do 1801-1810 do 1811-1820 do 1821-1830 do 1831-1840 do 1841-1850 do 1851-1855 do . 1856-1860 do 1861-1865 do 1866-1870 do 1871-1872 do 102 World's production of gold and tilrer for the calendar years 1873 to 1889, inclusive. Calendar years. Gold. Silver. Value. Fine ounce*. Maiket value. Coining value. 1FT3 $96,200,000 90, 750, 000 97,500.000 103, 700. 000 111,000,000 119, 000,000 109, 000, 000 100,500,000 103, 000, 000 102,000,000 95,400,000 101,700,000 108,400,000 106,000,000 105, 300, 000 109. 900, 000 118, 800, 000 63,267.000 55,300,000 r,j. _;_>. . 0" 67, 753, 000 62,648,000 73. 476, 000 74, 250, 000 74, 791, 000 78,890.000 86, 470, 000 89, 177, 000 81,597,000 91,652,000 93, 276, 000 96, 189, 000 109, 911, 000 125, 830, 000 $82,120,000 70, 673, 000 77. 578, 000 78, 32-.', ooo 75, '.'40, 000 84, 644. 000 83,383,000 85,636,000 89, 777, 000 98,230,000 !<8. :..,.! i 90, 817, 000 97,584,000 92,772,000 94,265.000 103,316.000 117,651,000 $81, MX), 000 71, 500, 000 80. 500. 000 81,000,000 95.000.000 96, 000, 000 96, 700, 000 in -2, 000.000 111.800.000 115. 800,000 10:,. 500,000 118. 500, 000 r.'4. :t68, ooo 14'J. 107,000 162, 690, 000 1J-74 1876 187 1878 1879 iKj.0 1(31 1882 1885 18P6 1B88 1869 From this table it will be seen that from 1801 to 1820 the average yearly yield of gold was $9, 7 10, 5 00; of silver, $36,847,500 four of silver to one of gold. From 1821 to 1840 the average yearly yield of gold was $11,466,000 ; of >ilver, $21,964,000 two of silver to one of gold. From 1841 to 1860 the average yearly yield of gold was $85, 150,000; of silver, $34,826,500 two and a half of gold to one of silver. From 1861 to 1880 the yearly average yield of gold \va $117 650; of silver, $68,043.900 nearly two of gold for one of si; . i 1881 to 1889 the yearly average yield of gold was $105,500,- 000; of silver, $122,540,388 one-sixth more silver than gold. From those figure* it i plain that no co nt IIHIOIIH, extraordinary ; silver, such as might warrant thefili ghteM ft-ar of an unnec- essary addition to the money volume, is to be expected. On the other hand the continuous drain of gold for ns>- in the arts, as dentistry. gold plat*', jewelry, gilding, and articles of decoration gem-rally, is -ly encroaching upon the annual supply. l'."t h metals possess in common, and neither in any different d from the other, all the qualities which are recognized as nee esv a commodity money. Silver enjoys in an equal degree with gold tin- quality of indestructibility, of divisibility, of malleabilit \ . and of resistance to chemical changes. The stock of both existing in the world (the product of all time) is estimated to be about equal, the production of the past 500 years being set down as Gold $7. '.'4 103 but there is also sufficient doubt and discouragement to deter an un due number from engaging in the business. The mines of Mexico have been worked for hundreds of years ; and up to 1873 the business of silver mining in that country had all the stimulus that a parity at 15^ to 1 could give to it. It is not, there- fore, probable that any material increase of output can be expected from that quarter. Conceding, forthesake of the argument, the eventual possibility of so superabundant a yield of silver as to work injury and inequity to the interests of creditors, is it not manifest that it is in the power of society at all times to remedy the evil by a limitation of the coin- age f And on the other hand, is it not equally manifest that for an insufficient supply there is no remedy ? If great mountains of silver should be discovered, does not Con- gress meet constantly ? If there should seem to be too much, could not the coinage be readily limited to prevent depreciation ? But, on the other hand, when we dedicate the monetary function solely to one metal, of which there is manifestly aud admittedly the world over an insufficient supply, where is the remedy f What can Con- gress do to enlarge that supply ? Absolutely nothing. THE GOLD USED IN THE ARTS. The Director of the United States Mint a few years ago estimated that of the $100,000,000 gold annually produced from the mines of the world $46,000,000 are consumed in the manufacture of jewelry, gold plate, plated ware, gold-leaf, etc., and in various processes of dentistry. The single standard of gold, therefore, is maintained by the cred- itor nations in the face of the admitted fact that but $50,000,000'of that metal are annually added to the money stocks. Not only is this encroachment of the commodity demand on the money supply becoming greater year by year, with the growth of population, but the supply of gold from the mines is itself becom- ing less, having declined from an average of $137,000,000 between 1856 and 1860 (the period of greatest yield from California and Australia), to an average of* $107,000,000 for the past ten years. Of the entire gold supply of the world, nine-tenths of it have come from placer mines, readily discoverable and easily worked, because requiring little or no capital. All known fields of those are practi- cally exhausted, and there is no reasonable prospect of the discovery of others. Hardy, adventurous, and skillful miners from the United States, and capitalists from all countries, have ransacked the world in vain for new fields of gold. Why, then, with the knowledge of those facts before us, should we discard from the full money use and function the only metal that gives to the world any prospect of re- lief from the money famine from which civilization is now suffer- ing and from which, if silver be not speedily restored to its ancient use and function, the world is destined to suffer much more ? If it be conceivable that the demonetization of either metal were necessary, why demonetize that which promises the greater and more steady yield ? If for any reason society should decide that ne of the metals should be discarded, should it not rather be that one which promises the smaller future yield, than that which promises the larger? Silver is the money-metal best suited to the mass of the people, and to the variety and character of transactions that constitute the interchanges of daily life. The supplies of both metals if united by 104 law, in the full money function, would have a steadiness of value which can not be attained by either separately. TBKASUBT NOTES SHOULD NOT BE REDEEMED IX BULLION. The proposition to redeem the proposed treasury notes in silver bullion or in anything bat lawful money of the United States will never meet the approval of the people. What the people of this country want is money, and what they should have is money. These notes will represent full value re- ceived, the evidence of which is the bullion in possession of the (rovemment. When issned, they will enter into circulation. They will have to do the work of money among the people. They prffl go to make np the volume of the currency. On the basis of that volume each dollar acquires a certain value, and represents a given amount of sacrifice. On that volume, and on those condition- gains will be made, prices established, debts contracted, values ad- josted, and equities created. If any portion of that money be with- drawn from circulation (for that is what "redemption" nieau- without an equivalent amount of money in some other form he- ing issned to take its place, the circulation will to that extent be contracted, every dollar in circulation will increase in value, prices will fall, property-values established on the basis of the larger Cir- culation will shrink, and equities will be destroyed. The redemption of any number of those notes in silver bullion means the withdrawal of so many dollars of money from circulation and the destruction of so much of the money of the country. Money .1 thing that can be destroyed with impunity. It should he kejit in use among the people. It is to industry what the M to tin- hnnian body ; it is the life-giving and life-sustaining medium. The money volume of a country should not be subject to frequent and violent changes. In a new and growing country, it should be charm - ; liy that steady accretion that characterizes the increase in the quantity of blood in the human body as it progresses from infamy to maturity. It is no morfe unreasoning, empirical, or unseient il'n- to he alternately wit hdra wing blood from, and injecting blood into, a human body Than to be constantly contracting and expanding the money volume ..:' the eountry. And a.s activity of circulation of the blood is essential to the health of the body, so activity of circulation in - indispensable to the well-being of society. The, possession of ii" :.... commodity, whai. alue, will compensate a country lor the destruction of any considerable portion of its n upon i in- entire volume of which vast equities rest. MO5KT SHOULD BE REDEEM AIH.E IX ALL THINGS. -honld be redeemed in all things; not in one thin;; i The peculiar characteristic of true money, that which dint hi- lt frm all other things whatsoever and constitutes it a prime t.i. !>: /.it inn, in that it is at all times redeemable in any tliii is on sale. Mej ti ^ an order for property, it should he redeemed it disposable property which the holder may desire. >! said Adam Smith onriderml M a hill for a certain quantity of necenuriM and convenience* upon all thr KMMOMB In th neighborhood. Any form i.tion of whose existence depends on radeemabilitv in one thing alone, can not be money in the full sense, 105 and whenever an urgent demand for real money springs up the other ceases altogether to be money. The redemption of money should be reciprocal between the Gov- ernment and the people and between and among all individuals in the community. It should not only be redeemable by the Govern- ment by acceptance for taxes but also redeemable by and among the people for all property for sale and services for hire. Its quantity should be so regulated as that its unit (the dollar) should neither increase nor diminish in value, and it should be kept constantly in circulation, and not be permitted to lie uselessly in the Treasury. Any other money than this is to a certain extent counterfeit ; it is false money, because when most needed it fails to be money and has to be "redeemed" in something else (gold) which can not be got except at ruinou's sacrifice. It is of the very essence of money its pith and marrow and proto- plasm that it should be a legal tender, a universal solvent, the ul- timate of payment, and redeemable, at the prices ruling, in every- thing that is on sale. If the volume of such money be properly regu- lated, while there may from time to time be variations in the prices of particular articles, the general range of prices will be maintained practically undisturbed. What an absurdity it is for the Government to put its stamp on one thing in order to make it redeemable in another thing imprinted with the same stamp, but which nobody wants except for the pur- pose of getting a third thing that could have been got just as well without the intervention of the second. As well might he who, wanting water, is given a silver cup wherewith to get it, but on go- ing to the spring is forbidden to drink until he exchanges his silver cup for a gold one. The real reason why it is insisted that all other things than gold shall be exchangeable into gold is that gold is getting dearer by rea- son of decreasing supply and increasing populations. The necessity for convertibility into gold implies that, in ordinary times, a range of prices higher than the gold range will prevail, and when, by rea- son perhaps of increased activity of business, redemption comes to be demanded prices are at once precipitated to those of the gold standard and below, to the great advantage of the creditor classes, who. as owners of bonds, may be considered in the language of the stock exchange "long" on money, and to the equally great injury of the producing class, who,beingin debt, may be considered as hav- ing sold money "short." The supreme consideration is that the money of a country shall be so regulated as that prices may not fall from any cause inhering in the money system. The value of money in other words, the sacri- fice necessary to obtain it should be no greater at onetime than at another. In order to effect that object of prime consequence, to main- tain the value of money unchanging, there should be no hesitancy whatever in changing the material of which it is made. Nobody who has reflected on the subject for a moment doubts that what gave "value" or exchangeable power to the greenback was not the promise made on its face, without date, to pay a. dollar, bnt the inscription on its back which declared it a legal tender for all dues and demands, public and private, except duties on imports. It was a misfortune to mankind that the words " promise to pay " were printed on it, because by it millions were led to believe that the " value" or exchangeable power resided in the promise instead of in the legal-tender power conferred upon it. 106 There is no object in redeeming in gold, except to maintain ^<>ld prices, that is to say, the range i>f prices prevailing in gold-using countries, and as those pricesare constantly trending downward, any country that insists on maintaining tin- gold standard mnstacrept the consequences in a corresponding fall of prices. The advocates of the gold standard, in eflert, maintain that no matter to what extreme may fall, we must be content we must bow in humble sub- mission to the inevitable, since, in their view, it is mote \ maintain the sacredness of the gold standard than to establish jus- tice, promote prosperity, or to maintain equity in all time transac- tions. It is in no way necessary, on account of any intrinsic or inherent quality of gold, that we should have that particular metal, and that alone, for money. .oa.sted that gold is a universal measure. Why is it univer- sal T Why is gold accepted in every country of the world T Not- be- cause the gold is wanted for any quality inherent in the metal, but because it is an order for property in gftid-asing countries, such ., laud, France, and Germany, whose trade is largely a foreign trade. At whatever rate gold will exchange in Knuland, it will exchange in all countries having trade relations with Kngland. because " i- an order for goods in a country with which they are dealing. Will not uey of this country equally, and for like reasons. \\ het her gold or silver, have acceptability in every country with which the Tinted States have trade relations f Not for any quality inherent in the metal, but because it is un order for property in the United States. Will it n6t be willingly accepted by these who \\ isli to buy in this country f POSSIBLE EFFECT OF REDBVPTIOX IS UULLIOK. In order to see the effect of the redemption of these Treasm , in bullion, we have but to look at the possibilities ,,f the situation. Snpp.se there were in the Treasury $300,000,000 worth of that bull- ion, which, by thu taking up, little by little, and UK. nth by month, of the amount nut used in the arts, would be taken by the Yieasury at or about par. Then, suppose that for any reason, such as fear of approaehiri, -, $100,000,000 of the Treasury notes were suddenly presented tor redemption, and canceled, and the bnll- >iiddenly put on the market, what would it be worth? What would gold bullion be worth if it had not the privilege and if $100,000,000 of it, deprived of the mone\ use, was suddenly put on the market f Can there be a doubt that the abrupt output 01 so i quantity would have the eticct of immediately a nd enor- mously depreciating its value T In the. case under OOOaiden tion. the M-uld be that the silver remaining in the Treasury would not bring one-fourth the sum necessary to redeem the outstanding Treasury notes, so that not only would a heavy loss result to the Miient, but, by ivason of the sudden and seiioiis conti ;me, an infinitely greater loss would result to all tho Hut if it be deemed a remote contingency that ai iinary t would in that manner he suddenly taken from (lie Treasury, - another danger whiih can not be put aside as improbable, l>f looked for with almost absolute certainty, and ! .m n n -movable and insiir- ^teni of bullion redemption. :u London need, monthly, millions of silver to make payments in India. 107 naturally want to get it at the lowest price, and it is not to their advantage to intensify the competition for it. On the contrary, it is to their direct advantage to depress the price to the lowest possi- ble point. As the Treasury of the United States would buy silver at the low- est price, the London merchants would refuse to enter the open mar- ket in competition with our Government for its purchase. But no sooner could the silver be stored in the vaults of the Treasury, than the agents of the London merchants would appear, and before any oppor- tunity had offered for a favorable change in the price of the bullion, could present as many millions of these notes as might suit their pur- pose, and receive bullion therefor. A Secretary of the Treasury who conscientiously believed that it was his duty to maintain the gold standard at all hazards, would naturally feel compelled certainly it would be in his power to put out whatever amount of bullion he might deem necessary to accomplish that purpose, even if it all had to go. Thus the United States Treasury would become the convenient and capacious conduit through which silver should immediately flow from this country to England, depriving our people, notwith- standing the legislative measures for their relief, of practically all use of silver as money, inasmuch as the four and a half-million dollars of Treasury notes would be withdrawn and canceled about as soon as issued. Thus would our Treasury Department be made practically the pur- chasing agent in this country of any syndicate or combination of English merchants who might desire silver for the East India trade. If it be said that no Secretary of the Treasury would attempt thus to defeat the will of the people as expressed in the law, the sufficient reply is that a conscientious man who believes that the honor of the United States is pledged to the maintenance of the gold standard, and that it is indispensable to the prosperity of the people, will ex- ercise all the power vested in him by law to prevent a departure from that standard, and will regard himself as for the time being the savior of the Republic by keeping it from " the edge of so dan- gerous a peril " as the execution of the people's will. Certainly no man will deny to the present Secretary of the Treas- ury entire rectitude of motive in all his conduct. From the well- known fact that since the passage of the limited coinage act of 1878 all our Secretaries have refrained from purchasing more silver than they were compelled to do by the mandatory provision of that law, it is reasonable to infer that none of them, if called upon to execute a law containing a silver bullion redemption clause, such as is sug- ested, would feel called upon to make a net purchase of more than 2,000,000 worth in each month ; and that none of them would hesi- tate to exchange for Treasury notes all the monthly purchases of bullion in excess of that amount. A PLANK FROM THE REPUBLICAN PLATFORM. I must be pardoned for directing the attention of Senators on this side of the Chamber to a short declaration of the last Republican National Convention : The Republican party is in favor of the use of both gold and silver as money. If party platforms mean anything that clause meant that the Re- publican party went before the country pledged to the use and to the equal and non-discriminating use of both silver and gold as money. It was well known that throughout the entire West the question 108 of the remoiietization of silver was deemed of vital importan . orators and tin* party press, throughout tlint enl were severe in their denunciation of the prior adn:ini>tr;i' its unfriendly attitude toward silver. I wi.-h in all solicitude and sincerity to advise my i; friends of tlie Hast tliat this plank in the party platform \\ as con- strued by the Republicans of the West to mean precisely what it They arc looking with confidence to this L'ongre- aetion as will fittingly embody in tin- statutes the principle laid down by the party uow in the responsible direotion of the Government. SHALL WK BR FLOODRI) WITH SILVER? We a:-.- told that if silver is given free access to the mints we shall be flooded with it from all parts of the world. Does anybody nhow where the llood of silver is to com.- from T Where are the res- ervoirs that contain itT Not in England, where it is diflictilt for thi people t a sufticicncy of it forsmall change to transact the business of the country : not in (Jermany. where tlie scarcity of money hat t he government had to abandon the idea . t-r. Though the stock in France is large her people will never give it up. Silver lias hetMithe "shield and buckler" of the French Kepnhlic. All she has is coined at the ratio of IfvJ ounces of silver to 1 of gold, and its sh pment to this country would involve a loss to France, not only oft lie 3 percent, difference between the French re- lation i l.">* to 1) and ours (which is 1(5 to 1), but of 3 per cent, ad- ditional in thi' cost of gathering and shipping it. And after that could only exchange them for Treasury notes. Tlie silver stock in md the ( )rient is performing indispensable duty as money, and no "tlood" of it can be expected 'from that ipiarter. From time im- memorial India has been absorbing all the surplus silver of the world. Sh : got so much as to appease her appetite for lire for that metal that she h .Mown as the "Sink of Silver." China has not a piece of the 'hat she can dispose of. Mexico has no stock whatevei MT on hand, except the limited number of coin CM! pieces forming her modera'e money circulation, and not a dollar of it can be span count: -onth America has any surplus silver. ! piece of coined silver in .-very country in the world is part of thcmon-- leulation of that country, and even when of short weight and classified as a mere "token" is passing at par as full valued money. :i could p.. rue. therefore, to the owners of col! .where liy shipping it t<> this country for any purpose, ami k of bullion anywhere. If anybody doiibt.H this statement let him make the a'tempt in all the !!: : s of the world to Imv from accumulated sto. I" it. lie will fail to get it in London. l'ari>. Uerlin, QOboOj or in all combined. 1 nun which to .jet silver except the current snppi the mines, and whatever that is now it is not likely ever ^n-atly to increajw. The occupation of mining is not at ti active to main . and in the natuie'of the case the number who follow it will alwaxs be ants of uld were but .1 small band of \v era are destined to 1" . to the population. HIM | not so, na- VN the line. TO the e\e of the cxpericnci-ii peotor -. i \-er minee are as disceruib:. he earth a-< : .rther Those who talk, tliei, 109 here for coinage simply show their ignorance of existing conditions. I may add that of all the shafts that have been sunk for silver mines in the world where they have found silver croppings on top in niuety-nine out of every hundred, and I think I am stating it moderately, the veins have not penetrated the earth, mineralized, fertilized, to the depth of 50 feet, rarely have they penetrated the earth to a depth exceeding 1,200 feet, and the most prolific yield of silver mines has been from a depth not exceeding 800 feet. The very fact, Mr. President, that, with all the world searching for gold and silver mines a search that has continued throughout all history the amount of the two metals yielded by the mines is about equal, shows that the historical relation existing between them is the relation at which they can be profitably produced. It is apparent that if therp were a great advantage in the produc- tion of silver over gold, at the relation of 15 to 1, that advantage would be seen in the largely preponderant production of silver; but instead we find that the result of thousands of years of mining has given us about equal quantities of both metals. CAN THE UNITED STATES ALOXE HOLD THE METALS AT A PARITY ? , We are told that the United States, unaided, can not, if it would, restore silver to a parity with gold that no one nation acting alone can achieve so difficult a feat. But it is incapable of denial that throughout all vicissitudes of production of gold and silver from Ie03 to 1873 the law of France one nation alone accomplished it. As I have shown in greater detail elsewhere, by reference to the table of annual production of the metals, it will be observed that from 1803 to 1820, the production was in the proportion of four dol- lars of silver to one of gold ; from 1821 to 1840 two of silver to one of gold, from 1841 to 1850 one dollar of silver, to one of gold, from 1851 to 1860 four dollars of gold to one of silver, from 1861 to 1865 three of gold to one of silver, from 1866 to 1870 two of gold to one of silver, in 1871 and 1872 one-and-a-half of gold to one of silver. Notwith- standing these extreme variations in the relative annual production the law of France constituted a ligature sufficient to hold the metals in line at the ratio of 15^ to 1, and this not for France alone but for the whole world. If that period does not offer sufficient proof of the power of law, under varying conditions of supply, to tie the metals together and keep them so, no degree of proof will suffice, for the vacillations of their relative production have been greater during this century than at any former period in the history of the world. IS AN INTERNATIONAL AGREEMENT NECESSARY? If that could be done by a nation with a population of 25,000,000 to 35,000,000, what difficulty could be experienced by a nation of 65,000,000 in accomplishing the same result ? Yet we are told that international agreement is necessary to restore silver to its ancient right as a full-money metal. Those who suggest such an agreement forget that while this nation is a borrower of money, the first and principal nation to demonetize silver is the greatest money lender known to history. Is it for a moment to be supposed that the shrewd English creditor classes will enter into any agreement which will deprive them of the spoils of so delicate and ingenious a system of usury, a system not only not banned by law, but, on the contrary, having the special approval and protection of statutes, and the active support and approval of all the complaisant moralists, philosophers, and financiers of the age ? 110 While they are dilligently gathering in the proceeds of this opera- tion a diversion is kept up for the occupation and amusement of dilcttant financiers and economists, by invoking a di.-scns.sion of the ratio that should be maintained between the metals. The ratio is the pretext on which conference after conference has been call.'. I. The advocates of the single gold standard contend that hostile legislation had no influence in effecting the separation of the : and that the reversal of that legislation can not and will not restore tin-in to a parity unless the principal commercial nations of the m world join in the work of rehabilitation. An illnstrathi^ the force of law on the relation of the metals I will r ..-stive :aph from the report of the Royal Commission of England (186), Part I, section 1U2 : Now, undoubtedly, the date which forms the dividing line between an epoch of approximate fixity in the relative value of gold and silver, and one of marked iuntability. is the y*>'ar when the bimetallic s\>t.-ni w Mrli had j>r vimish 1>< en in turcr in the Latin I'nion ceased to be in full operation, and vr ,uv in.-.siMilily i.-.l : tin- conclusion that the operation of that system, established as it watt in coun- tries tin- ]>pulai ion and commerce of which w ere considerable, exerted a n influence u|>on thi>, relative value of the two me taU. So '..iiij.- as that system was in force we think that. DOtwitiutendfau tin 1 changes in tin- |iioiliirtion and use of the preoioas met ids. it kept tin- market pi;. ver approximately steady at the ratio fixed by law between ili.-ri. namely, 15.4 to 1. Nor does it appear to us a priori unreason able to suppose that the . \ in the Latin Union of a bimetallic system with a ratio of 15J to 1 fixed i- metals should have been capable of keeping the market price of .silver at approximately that ratio. The paragraph quoted ascribes the effect thus produced to the hi- inrtallic treaty of the Latin Union, a combination of Italy, Belgium, Switzerland, and France, entered into in 1865 for the purpose of maintaining similar conditions of coinage. But it will he observed that, so far as the ratio was concerned, precisely the same i-fi. been produced by France alone during the sixty-two years from the passage of its law of 1H03 to 1865. Not only did the French law keep the metals together at n time when the larger annual yield was of silver, but it kept them to- gether when the larger annual yield wasof gold. Had not that law been in operation during the 'no's, when a ilood of gold poured from the mines of California and Australia, gold would have fall* ; early ti s it more than once fell, to the ratio of 1 to 10, at which Imt in ounces of silver (instead of 15^) would buy an ounce of gold. Tli us the law of one country alone, a country then of not one-half the present population of the United States, held the metals to- gether, s.i that to whatever extent gold fell in relation to commodi- ties from 1H48 to 1865, by reason of the larj;e output of the mines. :.-ll to the same extent, notwithstanding tin* enormous de- crease in its production relatively to gold during that p' Mimed for law in this connection is nut that it directly MS the relative values of gold ami silver any more than of any- thing else, but Ahut mi the Mlightesi i of the ni.-tal instantly Arises, under the law of 1 he double standard, a demand for the cheaper metal, while | he demand for t In- dearer on. is siis;. In this way the double standard accomi late* itself to tin supply and demand, which is adm it ted to IM- t In- governiiii: 1. 1. tor in nation <( \alne. It in not contended that a Minall or in- "ild keep the metals together, but oes to show that a great nation like the United States would have no difficulty w 1 i o. 80 thoroughly are the advantages of the gold standard Ill creditor classes recognized in England that the English Commis- sioners, who, for form's sake, have been sent to the several monetary conferences held on the continent, have never been invested by their Government with any power whatever. And it is but a few weeks since the House of Commons overwhelmingly voted down a proposi- tion made in good faith by Mr. Samuel Smith, looking to the calling of a new conference, which was supported by petitions to Parlia- ment signed by 60,000 persons not merely as individuals, but as rep- resenting large organizations of the toilers of England. The ratio is not the difficulty. Those who wanted silver demone- tized do not want it added to the money volume of the world at any ratio. Why then shall we wait? Macauley, commenting on the impregnability of intrenched prerogative, observed that if the announcement of the discovery of the law of gravitation had mili- tated against the personal interests of any vested or privileged class, its general acceptance might have been long postponed. Shall we, then, postpone relief to the suffering industries of this country till we can secure from the privileged classes, from the money-lender's of the world, an agreement to cease their exactions ? No, Mr. President, we need not wait, and we will not wait. All that is necessary is to act, and so far as the rules of order and of par- liamentary procedure will permit, we propose to act, promptly and decisively. The world can not expect the initiatory movement for any change to be taken by those whose interests are served by the continuauce of presentconditions. Such conditions being consistent with their own welfare, they find no difficulty in arriving at the conclusion that they are for the welfare of society at large. The dogma that cupidity is a synonym for virtue will never fail to find ready converts among the beneficiaries. * * * Plate sin with gold, And the strong lance of Justice hurtless breaks. CONCLUSION. I predict that the restoration of silver to its birthright, Mr. Pres- ident, will mark an epoch in the history of this country. It will place in circulation an amount of money commensurate with our increasing population. It will give assurance to our languishing industries that the volume of our circulating medium is not to con- tinue shrinking, an.d that the tendency of prices shall no longer be downward. It will increase the wages of labor and the prices of the products of labor ; it will reduce the price of bonds and other forms of money futures, it will lighten, but not inequitably, the burden of mortgages; it will increase largely, though not unjustly, the debt-paying and tax-paying power of the people. It will loosen the grasp of the creditor from the throat of the debtor. By the remonetization of silver, money will cease to be the object of commerce, and will again become its beneficent instrument. Ac- tivity will replace stagnation, movement will supplant inertia, cour- age will banish fear ; confidence will dispel doubt ; hope will super- sede despair. The lifting up of silver to its rightful plane by the side of gold will set in motion all the latent energies of the people. It will banish involuntary idleness, by putting every willing man to work. It will revive business, and reanimate the heart and hope of the masses. Capital, n& longer fearing a fall in prices, will turn into productive avenues. The hoards of money lying idle in the bank vaults will come out to bless and enrich alike their owners and the community 112 at large; while the millions of dollars now invested at low interest in gilt-edged securities will seek more profitable investment in the busy field of industry, where they will be utilized iu the payment of wages and the constituent dissemination of comfort and happi- ness aniMiig the people. And urn it will accomplish not for the United States alone, but for civilization. For it is not too much to say, Mr. President, i hat upon the decision of this question depend consequences more mo- mentous than upon that of any other question of public policy with- in the memory of this generation. In a broader sense than any other- question attracting the general attention of mankind it is a ques- tion of civilization. It embodies the hopes and aspirations oi our race. The act of Congress which shall happily solve it will constitute a decree of emancipation as veritable as any that ever freed serf from thraldom, but more universal in its application. It will pro- claim the freedom of the white race the world over, it will lift the bowed head of labor, it will hush the threnody of toil. It will in- augurate the true renaissance a renaissance of prosperity, without which industry, learning, science, literature, art, are but as apples of Sodom. (Applause in the galleries.) JONES N INDEX Pago. Alison, Sir Archibald, coinage has no effect in preventing fluctuations in value of coin 42 effect of suspension of specie payments in England in 1797 ". 78 Allegory of the clocks 50 American Review, effect of increasing volume of money 8 Automatic system of money, gold and silver 9 why interfered with 18 Appleton's Cyclopedia, definition of money 67 Aristotle onMoney. 66 Balance ot trade, the argument based on 96 Banker's advice to the Usurer 70 Baring, Alexander, a reduction of paper would have the same effect as of any other money 78 Bastiat, description of the crown piece 68 Bandeau, on Money 66 Behren, Jacob, opinion as to effect of gold standard in England 23 Berkeley, Bishop, queries as to Money 67 Best Money (truthfully so-called), a money of unchanging value in the unit. 70 Cairnes, Prof. J. E., relations of paper currency to foreign exchange 98 Cattle, estimate of value iu 1880 ' 4 Cernnschi, the purchasing power of money is in direct proportion to the volume of money existing 77 Checks and clearing houses, their effects in economizing use of money, con- sidered 46 Chevalier, in France, advocated demonetization of gold 20 Circulation, present monetary 75 Coal, yield for 1888 4 Condition of country at present 1 at period of demonetization of silver 26 Competition, the value of money fixed by the competition to get it 73 Cotton manufacturer, his loan 'of $10, OO'O, payable, principal and interest, in cloth, contrasted with loan of same amount c.ontracted by his neighbor, but payable in dollars , 72 Cotton-planters, their loss by demonetization of silver 60 Crawford, William H., opinion as to effect of decreasing volume of money. 7 Creditors, demand for the "Best Money," meaning a money of increasing value 69 their course in Europe to increase value of gold 19 their course in United States to increase value of gold 27 the pretense in the United States to "strengthen the public credit" 28 Crops for 1888, corn, wheat, oats, and cotton 4 Debt, a distinguishing characteristic of civilization 35 a, of $10, 000 contracted in 1873 how much wheat, cotton, etc., would pay it then and how much now 57 Debtors, who are they 35 and creditors, their motives compared 34 De Colange, Professor, the rate at which money exchanges is determined by its quantity 77 Demand for money, what it is 73 Demonetization of silver, by England 22 by Germany 16 by United States 28 wholly unjustifiable 28 De Qnincey, in England, advocated demonetization of gold 20 Difficulty, one symptom common to all industries 5 Discussion, educational effect of 29 Double standard, statement of, before French Commission 22 JONES 8 113 114 Dnmaa, a Senator of France, pleads for caution before demonetization ...... IT KI-I iiniiii iHt ( London) admits rie of told .................................. 44 Effects of shrinking volume of money (extract from repot t of Monetary ( '.mi in: is ion) ............................................................. 36 Kneyrloprdia Brilannica, effect of fall in the value of money ................ 8 BnfttM 8 position not due to gold standard ................ ". ............... 25 Fa-lure* in United Slates, 18X7. 1888. and 1889 ............................... -i'.i Fall of interest on gilt-edged securities, a proof of rise of gold ........... . . 4X Farm, how it may !> lost by an increasing value In the money unit ........ 70 Farmer*, their ls ly demonetization of silver ............................. 60 Farms, estimate of value in 1880 ...................................... ...... 4 proposition that the Government lend money on the security of the land .................................................... ... S3 Fanchet, Leon, probable effect, should all European nations follow F.n-lmd in discarding silver ....................................................... J7 Firlite, the value of money depends on Its quantity ......................... 76 Flood ofmlver. where \* it to come from f ................................. 108 France, law of 1903 held metals at a parity till 1873 ____ ................... 1<> Frewen. Moreton, extract from his "Economic Cri*i-" ..................... MO Gallatin, Albert, a metallic currency not indispensable ..................... German v. emigration from ................... .......................... 25 Gibbs, Henry II., cablegram relating to bimetallism .................... 29 Giften, Kobert. his reasoning erroneous that the commodity demand fixes the value of void ............. ............................. '. .................. 81 Gold and silver, both variable in value .................................... 41 the world's supply of both ................................ 101 Gold, ratio of, to silver at various periods ............................... 13-16 fall of, during timea of Alexander and Cirsar.. ......... . .............. 14 fear of fall of. during California excitement ........................... 19 rise of from 1873 to 1889. .............................................. 44 proof that it has rinen ......... . ....................................... 55 tome effect* of its rise ................................................. ,s" proposition first made to demonetize it .................. . ............. 19 demonetized in 1857 by German States aiil Austria ................... 20 fear of an outflow of .............. . ................................... 85 rationale of the outflow of ............................................ 86 value as money not derived from commodity use ..................... 81 Goschcn, George J., chancellor of exchequer of England speaks for, but de- cides against, silver ..................................................... 24 Graham, Sir Jimes, the value of moneyisin the inverse ratio toils quantity. 77 "Greenback", the, what tave it value f .................................. 105 Gresham's law, and so-called "extension" of .............................. 08 Gold standard, what it implies .......................................... 00 statement in behalf of, before Frein li OOmmJaatoa ........ of the future ................................................ 91 Gold nsed In the arts ..................................................... luS (Mild money, practically none in the I T nit<-d States ......................... 9ft Hamilton, Alexander, effect ot annulling UM f either metal ............... in 1 louses I n I niie.l State*, estimated value in 1880 ............................ 4 Hume, David, contract of conditions under increasing and under dccitasing volume of money ......................................... 7 ralue of monev depend* on quantity ..... ............... 70 Hnsklaaon. William, if the quantity of money is ini-reavd the value of com- uiodlttna Increase ...................................................... 77 Improved method* of product Ion, thrir nVcts considered .................. 45 India, will rr-nionetization place us "alnn :ii|i ' ...... ...... 82 Int'-itiatlonal agreement: Is such agreement necessary to tic tin- metals to- flbT ....................................... ............ 109 InrolwitarY MiMMn, enormous lou of potential wealth, through ........... 01 Iron, pig : VleW for 1888 .............. ............. 4 Jffferson, Thomas, "the unit nniot stand on lioth metsls " ................. 17 Jevona, Professor: The i i steady a standard st corn ........... 42 inconvertible paper money, if limited in quautity, can retain its full value ............................. ...... ~~ Jc vnna, on Money ...................................................... 06 Ublitof relation nf general r>ri 11 ted ;IM money objections to. eonsidi-ied 'Jl the m. live tor demon cluing, by Kn-_'land 21 the motive for demonetizing, by (Jut many 24 the mot i vi- at know led ged 23 and gold both variable in value 41 ban it fallen J. !> pun-basing power in 1873 nd 1839 02 prejudice against it as moiie\ arising from the idea thnt cold money hat great* r " intrinsic value," That <|ueiion considered hall we be il oded with it in case of ruuoneiizaiiouf lu.-i tin' world's supply lul If $2,500.000 a month for twelve years has not driven out gold. ' much will do HO I ". ' 91 Silver miners, their loss by demonetization contrasted with that of farmers i.; l on -planters Smith, Adam: Itoth gold and silver variable in value .. 41 Definition of a guinea 66 r's table, showing relation of gent ral ptio-H iHi'.i in 1>.~> 41 Standard: The tiue Money standard not the manual of which money is . .' 7* Stewart, Dugald.on Money 67 '. 4 Sun idea in Germany 25 Sii| jilv of money, what it is 73 : n standard suggested for time contracts as securing greater equity il an old .". 43 Tin niton, Henry, on Money 66 la, their importance to indnstry 5 -is: The value of gold linen or tails as its quantity is diminished or in- I 77 ild UCt be redeemable in bullion 104 -M, li led. -miiti-m 106 ;.. fall of prices 89 tile 61 ; inn of silver effected in 1873 -il 7n Wall, i ; Value, the meaning of 63 (>:( 04 ml in the inati ii.il. lmt in tin- stamp in the pov < t.lltlel 63 IHOIH-N a measure t- .. 71 >m earliest times 13 .m from m\ol!ir,ttir\ idleness enoi THUMB 62 Walker, 1'rof. F. A....II M..II.-\ ..66,7 gold and'silvi r Ix.ih variable in vab .. 42 the vain. H 77 Wealth, nalinnnl. e-i : i /.at inn . 17 i> Imgtheotd, " lung in " un ti .. 73 J i . M .1 University of California REGI ? NAL ""* FACIUTY tK? 6 ' ^ ^fl 6168 ' CA 90024-1388 Return this material to the library from which it was borrowed.