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Jones. + </title> + <style type="text/css"> + + p { margin-top: .75em; + text-align: justify; + text-indent: 1.25em; + margin-bottom: .75em; + } + h1,h2,h3,h4,h5 { + text-align: center; /* all headings centered */ + clear: both; + } + hr { width: 10%; + margin-top: 2em; + margin-bottom: 2em; + margin-left: auto; + margin-right: auto; + clear: both; + } + + table {margin-left: auto; margin-right: auto;} + + body{margin-left: 10%; + margin-right: 10%; + } + + .pagenum { /* uncomment the next line for invisible page numbers */ + /* visibility: hidden; */ + position: absolute; + left: 92%; + font-size: smaller; + text-align: right; + } /* page numbers */ + + .blockquot{ font-size: 85%; margin-top: 2em; margin-bottom: 2em;} + .pblockquot{ font-size: 85%; margin-left: 20%; margin-right: 20%;} + + .bb {border-bottom: solid 1px;} + .bl {border-left: solid 1px;} + .bt {border-top: solid 1px;} + .br {border-right: solid 1px;} + .bbox {border: solid 1px;} + .bbrace {border-top: solid 2px; border-bottom: solid 2px; border-right: solid 2px; } + + .center {text-align: center; text-indent: 0em;} + .ralign {text-align: right;} + .noidt {text-indent: 0em;} + + .smcap {font-variant: small-caps;} + .u {text-decoration: underline;} + + .caption {font-weight: bold; text-align: center; text-indent: 0em;} + + .notebox {border: solid 2px; padding: 1em; margin-left: 20%; margin-right: 20%; background: #CCCCB2;} + + .poem {margin-left:10%; margin-right:10%; text-align: left; text-indent: 0em;} + + </style> + </head> +<body> + + +<pre> + +The Project Gutenberg EBook of Money, by John P. Jones + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: Money + Speech of Hon. John P. Jones, of Nevada, On the Free Coinage + of Silver; in the United States Senate, May 12 and 13, 1890 + +Author: John P. Jones + +Release Date: February 28, 2012 [EBook #39003] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK MONEY *** + + + + +Produced by K Nordquist, Dave Morgan and the Online +Distributed Proofreading Team at https://www.pgdp.net (This +file was produced from images generously made available +by The Internet Archive/American Libraries.) + + + + + + +</pre> + + + + + +<h2>MONEY.</h2> + +<hr /> + +<div class="pblockquot"><p>"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 Macedon refuted by it all the wisdom of Athens, confounded their statesmen, +struck their orators dumb, and at length argued them out of their liberties."</p> + +<p class="ralign">—<span class="smcap">Addison.</span></p> +</div> + +<hr /> + +<h2>SPEECH</h2> +<h5>OF</h5> +<h1>HON. JOHN P. JONES,</h1> +<h5>OF NEVADA,</h5> +<h4>ON THE FREE COINAGE OF SILVER;</h4> +<h5>IN THE</h5> +<h3>UNITED STATES SENATE,</h3> +<h4><span class="smcap">May 12 and 13, 1890.</span></h4> + +<hr /> +<h5>WASHINGTON.<br /> +1890.</h5> + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_p003" id="Page_p003">[3]</a></span></p> +<h3>SPEECH</h3> + +<h4>OF</h4> + +<h2>HON. JOHN P. JONES,</h2> + +<h4>OF NEVADA.</h4> + +<p class="center">On the bill (S. 2350) authorizing the issue of Treasury notes on deposits of silver +bullion.</p> + + +<p>Mr. JONES, of Nevada, said:</p> + +<p>Mr. <span class="smcap">President</span>: The question now about to be discussed by this +body is in my judgment the most important that has attracted the +attention of Congress or the country since the formation of the Constitution. +It affects every interest, great and small, from the slightest +concern of the individual to the largest and most comprehensive +interest of the nation.</p> + +<p>The measure under consideration was reported by me from the +Committee on Finance. It is hardly necessary for me to say, however, +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 honorable +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.</p> + +<p>In view, however, of the great divergency of views prevailing on +the subject, the length of time which it was believed might be consumed +in the endeavor to secure that full and rightful measure of legislation +to which the people are entitled, and the possibility that +this session of Congress might terminate without affording the country +some measure of substantial relief, I was willing, rather than +have the country longer subjected to the baleful and benumbing influences +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.</p> + +<p>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 relief, +and that may be more in consonance with my individual views.</p> + + +<p class="caption">THE CONDITION OF THE COUNTRY.</p> + +<p>The condition of this country to-day, Mr. President, is well calculated +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, enjoying +the same degree of personal and political liberty, and sharing, in +<span class='pagenum'><a name="Page_p004" id="Page_p004">[4]</a></span>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; favored by nature with a +domain of imperial expanse, with soil and climate of unequaled variety +and beneficence, with every natural condition that can conduce +to individual prosperity and national glory, it might well be expected +that among such a people industry, agriculture, commerce, art, and +science would reach an extent and perfection of development surpassing +anything ever known in the history of mankind.</p> + +<p>In some respects this expectation would appear to have been well +founded. For several years past our farmers have produced an +annual average of 400,000,000 bushels of wheat. Our oat crop for +1888 was 700,000,000 bushels, our corn crop 2,000,000,000 bushels, +our cotton crop 7,000,000 bales. In that year our coal mines yielded +170,000,000 tons of coal, our furnaces produced 6,500,000 tons 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 metals. +We print 16,000 newspapers and 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 census was +$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, +our houses at $14,000,000,000. It is not too much to say that +there has been an increase of fully 50 per cent. in those values since +the taking of the census of 1880. Our national wealth to-day is +reasonably estimated at over $60,000,000,000.</p> + +<p>Figures and facts such as these in the history of a young nation +bespeak the presence not merely of great natural opportunities, but +of a people marvelously apt and forceful. From such results should +be anticipated the highest attainable prosperity and happiness. +Our population is alert, aspiring, and buoyant, not given to needless +repining or aimless endeavor, but, with fixity of purpose, presses +ever eagerly on, utilizing every conception of the brain to supplement +and multiply the possibilities of the hand, and at every turn +subordinating the subtle forces of nature to the best and wisest purposes +of man. No equal number of persons on the globe better deserve +success, or are better adapted for its enjoyment.</p> + +<p>But instead of finding, as we should find, happiness and contentment +broadcast throughout our great domain, there are heard from +all directions, even in this Republic, resounding cries of distress and +dissatisfaction. Every trade and occupation exhibits symptoms of +uneasiness and distrust. The farmer, the artisan, the merchant,—all +share in the general complaint that times are hard, that business +is "dull." The farmer is in debt, and is not realizing, on the +products of his labor, the wherewithal to meet either his deferred +or his current obligations; the artisan, when at work, finds himself +compelled to share his earnings with some relative or friend who is +out of employment; the merchant who buys his goods on time finds +little profit in sales, and difficulty in making his payments.</p> + + +<p class="caption">WHAT IS THE DIFFICULTY?</p> + +<p>What can it be, Mr. President, that has thus brought to naught +all the careful estimates and painstaking computations, not of thousands, +nor of hundreds of thousands, but of millions, of keen, shrewd, +and far-seeing men? Our people take an intelligent interest in their +business; they look ahead; they endeavor, as far as possible, to estimate +correctly their assets and liabilities, so that on the day of reckoning +they may be found ready. Why this universal failure of all +classes to compute correctly in advance their situation on the com<span class='pagenum'><a name="Page_p005" id="Page_p005">[5]</a></span>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 industrial +world?</p> + +<p>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 sufficiently high." Some think it +due to trusts and combinations, others to improved methods of production, +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 recognition +of a difficulty whose cause without close inquiry is likely +to elude detection. But the evil is of such magnitude, it is so widespread +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.</p> + +<p>It behooves us, therefore, as we value the prosperity and happiness +of our people, to set ourselves diligently to the inquiry: What +is the cause of the unrest and discontent now universally prevailing?</p> + + +<p class="caption">ONE SYMPTOM COMMON TO ALL INDUSTRIES.</p> + +<p>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 unfailing +characteristic; the prices of all commodities and of all property, +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.</p> + +<p>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.</p> + +<p>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 genesis +and development in some principle of universal application.</p> + + +<p class="caption">WHAT PRODUCES A GENERAL FALL OF PRICES?</p> + +<p>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 exchanged. +If the volume of money in circulation be made to bear a direct +and steady ratio to population and business, prices will be maintained +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 unchanging +in value through time.</p> +<p><span class='pagenum'><a name="Page_p006" id="Page_p006">[6]</a></span></p> + +<p class="caption">EFFECT OF A REDUCTION IN THE MONEY-VOLUME.</p> + +<p>A reduction 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 increasing, +has the effect of increasing the value of each unit of money, by +increasing its purchasing power.</p> + +<p>It is only within a comparatively recent period that an increasing +value in the money unit could produce such widespread disturbance +of industry as it produces to-day. In the rude periods of society +commerce was by barter; and even for thousands of years after the +introduction of money, credit, where known at all, was 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 affect any one individual. +An increase of 25 per cent. in one year in the value of the money +unit—a change which now, by reason of existing contracts or +debts, would entail universal bankruptcy and ruin—would not be +seriously felt by a community in which no such contracts or debts +existed, in which payments were immediate or at short intervals, +and each individual parted with his money almost as soon as he +received it.</p> + +<p>Such proportion of the annual increase in the value of the money +unit 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 community, +making it the veriest trifle upon any individual. But how +is it in our day?</p> + + +<p class="caption">THAT EFFECT INTENSIFIED AS CIVILIZATION ADVANCES.</p> + +<p>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 anything +known in the former experience of mankind. Under the operation +of the new system, the rapidity and intensity with which, +within that period, civilization has developed, is due in great part +to an economic feature unknown to ancient civilization and practically +unknown even to civilized society until the present century. +That feature is the time-contract, by which alone leading minds are +enabled to project in advance enterprises of magnitude and moment. +It is only through intelligent and far-seeing plans and projections +that in a complex and minutely classified system of industry great +bodies of men can be kept in uninterrupted employment.</p> + +<p>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 obligations be made long in advance. +Accordingly, we read almost daily of the inception of industrial undertakings +requiring years to fulfill. It is not too much to say that +the suspension for one season of the making of time-contracts would +close the factories, furnaces, and machine shops of all civilized +countries.</p> + +<p>The natural concomitant of such a system of industry is the elaborate +system of debt and credit which has grown up with it, and is +indispensable to it. Any serious enhancement in the value of the +unit of money between the time of making a contract or incurring a +debt and the date of fulfillment or maturity always works hardship +and frequently ruin to the contractor or debtor.<span class='pagenum'><a name="Page_p007" id="Page_p007">[7]</a></span></p> + +<p>Three-fourths of the business enterprises of this country are conducted +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.</p> + +<p>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, returning +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 unsuspected, +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 disaster. +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.</p> + + +<p class="caption">CONTRAST OF EFFECTS PRODUCED BY AN INCREASING AND A DECREASING MONEY-VOLUME.</p> + +<p>The difference in the effects produced by an increasing and a +decreasing money-volume has not escaped the attention of observant +writers.</p> + +<p>David Hume, in his Essay on Money, says:</p> + +<div class="blockquot"><p>It is certain that since the discovery of the mines in America industry has increased +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 gain 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 of the magistrate consists only 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 miserable +than another nation which possesses no more money, but is on the increasing +hand.</p></div> + +<p>William H. Crawford, Secretary of the Treasury, in a report to +Congress, dated 12th February, 1820, says:</p> + +<div class="blockquot"><p>All intelligent writers on currency agree that when it is decreasing in amount +poverty and misery must prevail.</p></div> + +<p>Mr. R. M. T. Hunter, in a report to the United States Senate +in 1852, says:</p> + +<div class="blockquot"><p>Of all the great 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 appreciating +standard of values; human ingenuity grew dull under the paralyzing influences +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 machinery +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 +its real value.</p> + +<p>The mischief would be great, indeed, if all the world were to adopt but one of<span class='pagenum'><a name="Page_p008" id="Page_p008">[8]</a></span> +the precious metals as the standard of value. To adopt gold alone would diminish +the specie currency more than one-half; and the reduction the other way, should +silver be taken as the only standard, would be large enough to prove highly disastrous +to the human race.</p></div> + +<p>The Encyclopædia Britannica, 1859 (article Precious Metals, by J. +R. McCulloch), says:</p> + +<div class="blockquot"><p>A fall in the value of the precious metals, caused by the greater facility of +their production, or by the discovery of new sources of supply, depends in no degree +on theories of philosophers or the decision of statesmen or legislators, +but is the result of circumstances beyond human control; and although, like a fall +of rain after a long course of dry weather, it may be prejudicial to certain classes, +it is beneficial to an incomparably greater number, including all who are engaged +in industrial pursuits, and is, speaking generally, of great public or national advantage.</p></div> + +<p>Ernest Seyd, 1868 (Bullion, page 613), says:</p> + +<div class="blockquot"><p>Upon this one point all authorities on the subject are agreed, to wit, that the +large increase in the supply of gold has given a universal impetus to trade, commerce, +and industry, and to general social development and progress.</p></div> + +<p>The American Review (1876) says:</p> + +<div class="blockquot"><p>Diminishing money and falling prices are not only oppressive upon debtors, of +whom, in modern times, states are the greatest, but they cause stagnation in business, +reduced production, and enforced idleness. Falling markets annihilate profits, +and as it is only the expectation of gain which stimulates the investment of +capital in operations, inadequate employment is found for labor, and those who are +employed can only be so upon the condition of diminished wages. 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 general +activity and buoyancy insure to capital a wider demand and higher remuneration.</p></div> + + +<p class="caption">PRICE THE INDEX OF THE VALUE OF MONEY.</p> + +<p>There can be no truer index of the value of money than the general +range of prices. Price is the mercury by the rise and fall of +which the heat and struggle of industrial and business life are daily +measured and made plain. Where the tendency of this indicator +continues downward, there is no more certain sign that money is increasing +in value.</p> + +<p>During a period of falling prices the fear of impending calamity +hangs like a pall over the business of the country. Notwithstanding +unremitting efforts, men feel themselves constantly on the edge +of disaster. Gloomy foreboding and timidity take the place of confidence +and courage.</p> + +<p>A shrinking volume of money is the most insidious foe with which +civilization has to contend.</p> + +<p>It is my firm conviction that the inexpressible miseries inflicted +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 the decline +of prices comes stagnation of industry, and the relegation to idleness +of thousands of willing workmen. Capitalists become unwilling +to 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 is withdrawn +from active industry and seeks investment in bonds and other forms +of money-futures yielding fixed incomes. For although the rate of +interest in many such cases may be low, the capitalist is compensated +for this by the enhancement in the purchasing power of each +dollar of the principal and by the necessarily greater command it +secures over the products of labor.<span class='pagenum'><a name="Page_p009" id="Page_p009">[9]</a></span></p> + +<p>Avoiding the very purpose for which it was devised, money at +such times seeks 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 investing +it in business on a constantly falling market. Thus, contrary +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.</p> + +<p>Under such conditions it is impossible for a community to reach +that degree of material progress which, under proper circumstances, +it would readily attain. At every turn distress and discouragement +stare the people in the face. In every town and village +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 competition +for the little work that offers, tends to reduce the compensation +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 aggregate +of wealth augments, it is unjustly distributed, and consequently +barren of beneficent results.</p> + + +<p class="caption">A GLANCE AT THE HISTORY OF MONEY.</p> + +<p>The system of relying upon the precious metals as money has long +been known as the Automatic system. Accurately, it should be +called the <i>Accidental</i> system. It has been called "automatic" because, +so long as money was made to depend solely upon the yield +of the mines, the supply regulated itself by what was believed to be +a natural method, namely, by the expenditure of labor in its production, +and was limited only by the rude obstacles which nature +opposes to the production of the metals. The necessity of expending +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 undoubtedly +better for the people of those early times to risk the +accidents of production than the follies and sinister designs of rulers.</p> + +<p>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.</p> + +<p>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.</p> + +<p>It may be not uninteresting in this connection to have a general +view of the materials which, at different epochs of the world's history, +have been used as money. I therefore present a tabular statement +giving those particulars in chronological order.</p> + + +<p><span class='pagenum'><a name="Page_p010" id="Page_p010">[10]</a></span></p> + +<p class="caption"><i>Table showing some of the substances which have, at various periods and in +various countries, been used as money.</i></p> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols" width="100%"> +<colgroup><col width="10%" /><col width="20%" /><col width="50%" /><col width="20%" /></colgroup> +<tr><th class='bbox'>Period.</th><th class='bbox'>Country.</th><th class='bbox'>Substance used as money.</th><th class='bbox'>Authority.</th></tr> +<tr><td align='right'> B. C. 1900</td><td align='left'>Palestine.</td><td align='left'>Cattle, and gold and sliver, by weight.</td><td align='left'>The Scriptures.</td></tr> +<tr><td align='right'></td><td align='left'>Arabia.</td><td align='left'>Gold and silver coins.</td><td align='left'>Jacob.</td></tr> +<tr><td align='left'></td><td align='left'>Phœnicia.</td><td align='left'>Gold, silver, and copper coins.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='left'></td><td align='left'>Phœnician colony in Spain.</td><td align='left'>Same (some still extant).</td><td align='left'>Carter.</td></tr> +<tr><td align='right'> 1200</td><td align='left'>Phrygia.</td><td align='left'>Coins, by Queen of Pelops.</td><td align='left'>Julius Pollux.</td></tr> +<tr><td align='right'> 1184</td><td align='left'>Greece.</td><td align='left'>Brass coins.</td><td align='left'>Homer.</td></tr> +<tr><td align='right'> 862</td><td align='left'>Argos.</td><td align='left'>Gold and silver coins, by Phidon.</td><td align='left'>Dictionary of Dates.</td></tr> +<tr><td align='right'> 70-500</td><td align='left'>Rome.</td><td align='left'>Brass, by weight.</td><td align='left'>Jacob.</td></tr> +<tr><td align='right'> 578</td><td align='left'>Rome.</td><td align='left'>Copper coins.</td><td align='left'>Ibid.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Carthage.</td><td align='left'>Leather or parchment money, first "paper bills" known.</td><td align='left'>Socrates, Dial. on Riches, Journal des Economistes, 1874, p. 354.</td></tr> +<tr><td align='right'>B. C. 491</td><td align='left'>Sicily.</td><td align='left'>Gold coins, by Gelo some still extant).</td><td align='left'>Jacob.</td></tr> +<tr><td align='right'> 480</td><td align='left'>Persia.</td><td align='left'>Gold coin, by Darius (two still extant).</td><td align='left'>Ibid.</td></tr> +<tr><td align='right'> 478</td><td align='left'>Sicily.</td><td align='left'>Gold coin, by Hiero (some still extant).</td><td align='left'>Ibid.</td></tr> +<tr><td align='right'> 407</td><td align='left'>Athena.</td><td align='left'>Debased gold coins, foreign.</td><td align='left'>MacLeod, 476.</td></tr> +<tr><td align='right'> 400</td><td align='left'>Sparta.</td><td align='left'>Iron, overvalued.</td><td align='left'>Bœckh.</td></tr> +<tr><td align='right'> 360</td><td align='left'>Macedonia.</td><td align='left'>First gold coins coined in Greece, by Philip.</td><td align='left'>Jacob.</td></tr> +<tr><td align='right'> 266</td><td align='left'>Rome.</td><td align='left'>First silver coins coined in Rome.</td><td align='left'>Ibid.</td></tr> +<tr><td align='right'> 54</td><td align='left'>Britain.</td><td align='left'>Pieces of iron.</td><td align='left'>Ibid.</td></tr> +<tr><td align='right'> 50</td><td align='left'>Rome.</td><td align='left'>Tin and brass coin.</td><td align='left'>Dic. of Dates.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Arabia.</td><td align='left'>Glass coins.</td><td align='left'>N. Y. Tribune. July 2, 1872.</td></tr> +<tr><td class="bb"></td><td class="bb"></td><td class="bb"></td><td class="bb"></td></tr> +</table></div> + + +<p class="caption"><i>Period following the failure of the ancient mines.</i></p> + + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols" width="100%"> +<colgroup><col width="10%" /><col width="20%" /><col width="50%" /><col width="20%" /></colgroup> +<tr><th class='bbox'>Period.</th><th class='bbox'>Country.</th><th class='bbox'>Substance used as money.</th><th class='bbox'>Authority.</th></tr> +<tr><td class="bt"></td><td class="bt"></td><td class="bt"></td><td class="bt"></td></tr> +<tr><td align='right'> A.D. 212</td><td align='left'>Rome. (Caracalla.)</td><td align='left'>Lead coins silvered, and copper coins gilded.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'> 1066</td><td align='left'>Britain.</td><td align='left'>Living money, or human being made a legal tender for debts at about £2 16<i>s.</i> 3<i>d.</i>, per capita.</td><td align='left'>Henry's History of Great Britain, vol. iv, p. 243.</td></tr> +<tr><td align='right'> 1160</td><td align='left'>Italy.</td><td align='left'>Paper invented; bills of exchange introduced by the Jews.</td><td align='left'>Anderson.</td></tr> +<tr><td align='right'> 1240</td><td align='left'>Milan, Italy.</td><td align='left'>Paper bills a legal tender.</td><td align='left'>Arthur Young.</td></tr> +<tr><td align='right'> 1275</td><td align='left'>China.</td><td align='left'>Paper bills a legal tender.</td><td align='left'>Marco Polo.</td></tr> +<tr><td align='right'></td><td align='left'>Africa, part of.</td><td align='left'>"Machutes" (ideal money; this view doubted.)</td><td align='left'>Montesquieu.</td></tr> +<tr><td align='right'> 1470</td><td align='left'>Granada, Spain.</td><td align='left'>Paper bills a legal tender.</td><td align='left'>Irving.</td></tr> +<tr><td align='right'> 1574</td><td align='left'>Holland.</td><td align='left'>Pasteboard bills, representative.</td><td align='left'> Dic. of Dates.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Iceland.</td><td align='left'>Dried fish.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Newfoundland.</td><td align='left'>Codfish, dried.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Norway and Greenland.</td><td align='left'>Seal skins and blubber.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Hindostan and parts of Africa.</td><td align='left'>Cowry shells.</td><td align='left'>Jacob, 372.<span class='pagenum'><a name="Page_p011" id="Page_p011">[11]</a></span></td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>North America Indian tribes.</td><td align='left'>Agate, carnelian, jasper, lead, copper, gold, silver, terra-cotta, mica, pearl, lignite, coal, bone, shells, chalcedony, wampumpeag, etc.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Oriental pastoral tribes.</td><td align='left'>Cattle, grain, etc.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Abyssinia.</td><td align='left'>Salt.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>China and India.</td><td align='left'>Rice.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>India.</td><td align='left'>Paper bills.</td><td align='left'>Patterson, p. 13.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>China.</td><td align='left'>Pieces of silk cloth.</td><td align='left'>Ibid.</td></tr> +<tr><td align='right'>Uncertain</td><td align='left'>Africa.</td><td align='left'>Strips of cotton cloth.</td><td align='left'>Ibid.</td></tr> +<tr><td align='left'></td><td align='left'>Not stated.</td><td align='left'>Wooden tallies or checks.</td><td align='left'>Ibid.</td></tr> +<tr><td class="bb"></td><td class="bb"></td><td class="bb"></td><td class="bb"></td></tr> +</table></div> + +<p class="caption"><i>Period following the discovery of the American mines.</i></p> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols" width="100%"> +<colgroup><col width="10%" /><col width="20%" /><col width="50%" /><col width="20%" /></colgroup> +<tr><th class='bbox'>Period.</th><th class='bbox'>Country.</th><th class='bbox'>Substance used as money.</th><th class='bbox'>Authority.</th></tr> +<tr><td class="bt"></td><td class="bt"></td><td class="bt"></td><td class="bt"></td></tr> +<tr><td align='right'> A.D. 1631</td><td align='left'>Massachusetts.</td><td align='left'>Corn a legal-tender at market prices.</td><td align='left'>Macgreggor.</td></tr> +<tr><td align='right'> 1635</td><td align='left'>Massachusetts.</td><td align='left'>Musket-balls.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'> 1690</td><td align='left'>Massachusetts.</td><td align='left'>Paper bills, colonial notes.</td><td align='left'>Macgreggor.</td></tr> +<tr><td align='right'> 1694</td><td align='left'>England.</td><td align='left'>Bank-notes.</td><td align='left'>McCulloch.</td></tr> +<tr><td align='right'> 1700</td><td align='left'>Sweden.</td><td align='left'>Copper and iron coins.</td><td align='left'>Voltaire's Charles XII.</td></tr> +<tr><td align='right'> 1702</td><td align='left'>South Carolina.</td><td align='left'>Colonial notes.</td><td align='left'>Macgreggor.</td></tr> +<tr><td align='right'> 1712</td><td align='left'>South Carolina.</td><td align='left'>Bank notes.</td><td align='left'>Ibid.</td></tr> +<tr><td align='right'> 1716</td><td align='left'>France.</td><td align='left'>Interconvertible paper bills a legal-tender.</td><td align='left'>Murray.</td></tr> +<tr><td align='right'> 1723</td><td align='left'>Pennsylvania.</td><td align='left'>Paper bills, colonial notes.</td><td align='left'>Macgreggor.</td></tr> +<tr><td align='right'> 1732</td><td align='left'>Maryland.</td><td align='left'>Indian corn a legal-tender at 23<i>d.</i> per bushel.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'> 1732</td><td align='left'>Maryland.</td><td align='left'>Tobacco a legal-tender at 1<i>d.</i> per pound.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'> 1776</td><td align='left'>Scotland.</td><td align='left'>Tenpenny nails for small change.</td><td align='left'>Adam Smith.</td></tr> +<tr><td align='right'> 1785</td><td align='left'>Frankland, State of (now part of North Carolina).</td><td align='left'>Linen at 3<i>s.</i> 6<i>d.</i> per yard, whisky at 2<i>s.</i> 6<i>d.</i> per gallon, and peltry as legal-tender.</td><td align='left'>Wheeler's History of North Carolina, 94.</td></tr> +<tr><td align='right'>1810-1840</td><td align='left'>All commercial countries.</td><td align='left'>Great era of bank-paper bills.</td><td></td></tr> +<tr><td align='right'> 1826</td><td align='left'>Russia.</td><td align='left'>Platinum coins (discontinued in 1845).</td><td align='left'>App. Encyc.</td></tr> +<tr><td align='right'> 1847</td><td align='left'>Mexico, parts of.</td><td align='left'>Cocoa beans; and at Castle of Perote, soap.</td><td align='left'>Anonymous.</td></tr> +<tr><td class="bb"></td><td class="bb"></td><td class="bb"></td><td class="bb"></td></tr> +</table></div> + +<p class="caption"><i>Period following the openings of California and Australia.</i></p> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols" width="100%"> +<colgroup><col width="10%" /><col width="20%" /><col width="50%" /><col width="20%" /></colgroup> +<tr><th class='bbox'>Period.</th><th class='bbox'>Country.</th><th class='bbox'>Substance used as money.</th><th class='bbox'>Authority.</th></tr> +<tr><td class="bt"></td><td class="bt"></td><td class="bt"></td><td class="bt"></td></tr> +<tr><td align='right'> 1849</td><td align='left'>California.</td><td align='left'>Gold dust by weight, also minute gold coins for small change, coined in private mints.</td><td></td></tr> +<tr><td align='right'> 1855</td><td align='left'>Australia.</td><td align='left'>Gold dust by weight.</td><td></td></tr> +<tr><td align='right'> 185-</td><td align='left'>Communist settlement in Ohio, called "Utopia."</td><td align='left'>Paper bills, each representing "one hour's labor."</td><td align='left'>Private information.<span class='pagenum'><a name="Page_p012" id="Page_p012">[12]</a></span></td></tr> +<tr><td align='right'>1862</td><td align='left'>United States.</td><td align='left'>Paper bills a legal tender.</td><td align='left'>Act of Feb. 25.</td></tr> +<tr><td align='right'>1863</td><td align='left'>North Carolina.</td><td align='left'>Tenpenny nails, at 5 cents each, for small change.</td><td align='left'>Anonymous.</td></tr> +<tr><td align='right'>1863</td><td align='left'>Camp at Florence, S. C.</td><td align='left'>Potatoes for small change.</td><td align='left'>Yorkville Enquirer.</td></tr> +<tr><td align='right'>1863</td><td align='left'>United States.</td><td align='left'>Postage-stamps for small change, temporary.</td><td></td></tr> +<tr><td align='right'>1865</td><td align='left'>Philadelphia, Pa.</td><td align='left'>Turnips for small change, temporary and local.</td><td align='left'>Philadelphia Ledger, April.</td></tr> +<tr><td align='right'>1865</td><td align='left'>United States.</td><td align='left'>Nickel coins for small change, overvalued.</td><td align='left'>Act of March 3.</td></tr> +<tr><td class="bb"></td><td class="bb"></td><td class="bb"></td><td class="bb"></td></tr> +</table></div> + + +<p>An analysis of this table will show how carefully even the most +primitive communities guarded against a too restricted money volume.</p> + +<p>The materials chosen to serve the purpose of money in each country +during the early history of society were, it will be observed, such +as at the time and place would be of sufficient quantity or volume to +insure against any sudden deprivation of supply. In countries where +the chase was common, the skins of wild animals were used as money; +in maritime communities, shells; in pastoral countries, cattle; in the +early history of agriculture, grain; in early mining periods, base +metal; in primitive manufacturing ages, nails, glass, musket-balls, +strips of cotton, etc.</p> + +<p>As communities developed, and commerce between them began, +substances somewhat common to all countries, portable and indestructible, +such as the precious metals, came to be more, and other +substances less, resorted to. By reason of their great beauty those +metals were always in demand, even among barbarous peoples, for +purposes of ornament and decoration. Because of their universal +use for such purposes they came to be recognized as things for which +anything else could with safety be exchanged, and as society advanced, +and it came to be recognized that some medium should be +adopted in which to make all exchanges, those metals were naturally +selected for the purpose, so that, together, they became, as it were, +a common denominator of value. Their selection proved a convenient +method of storing away wealth in a form that commanded at all +times every other form of wealth. They had always passed by weight +wherever used, but as society became better organized, and its methods +more complex, it became necessary, in order to insure against +fraud, to form them into pieces convenient for handling, and to invest +them distinctly with the function of money, so that, by law, +they became a universal solvent for debts and demands, the stamp +of the government placed on the coin testifying to its weight and +fineness.</p> + +<p>Both metals, as shown by the table, have been concurrently used +as money for thousands of years—not only since the dawn of history, +but from a period anterior to any historical records. The oldest +annals show that they had already been employed as circulating +media and that their relative values, or the ratio of their exchange +for one another, had already been established. Gold and silver<span class='pagenum'><a name="Page_p013" id="Page_p013">[13]</a></span> +were used as money in Palestine as early as the year 1900 B. C. We +read in the Bible that Abraham weighed to Ephron the Hittite 400 +shekels of silver, "current money with the merchant." An inscription +on the temple of Karnak, of the date of 1600 B. C. mentions +those metals as materials in which tribute was paid.</p> + +<p>But long anterior even to these dates, both metals had been used, +as, among the relics of the bronze age of the prehistoric era, ornaments +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.</p> + +<p class="caption"><i>Table showing the ratio of gold and silver in various countries of the +world up to the Christian era.</i></p> + +<div class='center'> +<table border="0" cellpadding="6" cellspacing="0" summary="" rules="groups" width="100%"> +<colgroup><col width="10%" /></colgroup> +<colgroup><col width="8%" /><col width="1%" /><col width="1%" /></colgroup> +<colgroup><col width="80%" /></colgroup> +<tr><th class='bbox'>B. C.</th><th class='bbox' colspan='3'>Ratio.</th><th class='bbox'>Authorities.</th></tr> +<tr><td align='right'> 1600</td><td align='left' colspan='3'> 1 to 13.33</td><td align='left'> Inscriptions at Karnak; tribute lists of Thutmosis. (Brandis.)</td></tr> +<tr><td align='right'> 708</td><td align='left' colspan='3'> 1 to 13.33</td><td align='left'> Cuneiform inscriptions on plates found in foundation of Khorsabad.</td></tr> +<tr><td align='left'></td><td align='left' colspan='3'> 1 to 13.33</td><td align='left'> Ancient Persian coins; gold darics at 8.3 grams = 20 silver siglos, at 5.5 grams.</td></tr> +<tr><td align='right'> 500</td><td align='left' colspan='3'> 1 to 13.00</td><td align='left'> Persia. Darius. Egyptian tribute. Herod. III,.95. (Bœckh, page 12.)</td></tr> +<tr><td align='right'> 490</td><td align='left' colspan='3'> 1 to 12.50</td><td align='left'> Sicily. Time of Gelon. "At least" 12.50. (Bœckh, page 44.)</td></tr> +<tr><td align='right'> 470</td><td align='left' colspan='3'> 1 to 10.00</td><td align='left'> Doubtful. Asia Minor. Xerxes's treasure. (Bœckh, page 11.)</td></tr> +<tr><td align='right'> 440</td><td align='left' colspan='3'> 1 to 13.00</td><td align='left'> Herodotus's account of Indian tributes. 360 gold talents = 4,680 silver.</td></tr> +<tr><td align='right'> 420</td><td align='left' colspan='3'> 1 to 10.00</td><td align='left'> Asia Minor. Pay of Xenophon's troops in silver darics. (Anab.; Bœckh, page 34.)</td></tr> +<tr><td align='right'> 407</td><td align='left' colspan='3'> 1 to ——</td><td align='left'> Spurious and debased gold coins at Athens. (MacLeod, Polit. Econ., page 476; Bœckh, page 35.)</td></tr> +<tr><td align='right'> 400</td><td align='left' colspan='3'> 1 to 13.33</td><td align='left'> Standard in Asia, according to Xenophon.</td></tr> +<tr><td align='right'> 400</td><td align='left' colspan='3'> 1 to 12.00</td><td align='left'> Standard in Greece according to "Hipparchus"; attributed to Plato.</td></tr> +<tr><td align='right'> 400<br />400</td><td align='left'> 1 to 12.00<br />1 to 13.50 </td><td class="bbrace"> </td><td></td><td align='left'> Various authorities adduced by Bœckh.</td></tr> +<tr><td></td><td align='left' colspan='3'></td><td align='left'></td></tr> +<tr><td align='right'>404-336</td><td align='left'> 12.00<br /> 1 to 13.00<br /> 13.33 </td><td class="bbrace"> </td><td></td><td align='left'> Values in Greece from the Peloponnesian war to the time of Alexander, according to hints in Greek writers. +There were variations under special contracts—unit, the silver drachma.</td></tr> +<tr><td align='right'> 340</td><td align='left' colspan='3'> 1 to 14.00</td><td align='left'> Greece. Time of Demosthenese. (Bœckh, page 44.)</td></tr> +<tr><td align='right'> 338-326</td><td align='left' colspan='3'> 1 to 11.50</td><td align='left'> Special contracts in Greece.</td></tr> +<tr><td align='right'> 343-323</td><td align='left' colspan='3'> 1 to 12.50</td><td align='left'> Egypt under the Ptolemies.</td></tr> +<tr><td align='right'> 300</td><td align='left' colspan='3'> 1 to 10.00</td><td align='left'> Greece. Continued depression of gold, caused by great influx under Alexander.</td></tr> +<tr><td align='right'> 207</td><td align='left' colspan='3'> 1 to 13.70</td><td align='left'> Rome. (Bœckh, page 44.) Gold scriptulum arbitrarily fixed at 17.143 for 1.</td></tr> +<tr><td align='right'> 100</td><td align='left' colspan='3'> 1 to 11.91</td><td align='left'> Rome. General rate of gold pound to silver sesterces to date.</td></tr> +<tr><td align='right'> 58-49</td><td align='left' colspan='3'> 1 to 8.93</td><td align='left'> Rome. Continued depression of gold, caused by influx of Cæsar's spoil from Gaul. [N. B.—Cæsar'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.]</td></tr> +<tr><td align='right'> 50</td><td align='left' colspan='3'> 1 to 11.90</td><td align='left'> Rome. "About the year U. C. 700," the rate was 11 19-21. (Bœckh, page 44.)</td></tr> +<tr><td align='right'> 29</td><td align='left' colspan='3'> 1 to 12.00</td><td align='left'> Rome. Normal rate in the last days of the republic.</td></tr> +<tr><td class="bb"></td><td class="bb" colspan='3'></td><td class="bb"></td></tr> +</table></div> + +<p><span class='pagenum'><a name="Page_p014" id="Page_p014">[14]</a></span></p> + +<p>By reference to the foregoing table it will be observed that the increase +in the supply of gold in Europe, consisting of the spoils of the +Orient, gathered by Alexander the Great, and brought by him to +Greece, had the effect of decreasing the value of that metal so that +instead of being exchangeable at the ratio of 1 to about 13½ of silver, +as formerly, gold became depressed, 1 ounce of it exchanging +for only 10 ounces of silver. Later, when Julius Cæsar extended his +conquering arms into Gaul, and sent to Rome the accumulations of +treasure amassed by him, the value of gold by reason of 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.</p> + +<p>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:</p> + +<p>Table showing the ratio of gold and silver in various countries of +the world from the opening of the Christian era to the discovery of +America:</p> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="groups" width="100%"> +<colgroup><col width="9%" /></colgroup> +<colgroup><col width="9%" /><col width="1%" /><col width="1%" /></colgroup> +<colgroup><col width="20%" /><col width="1%" /><col width="59%" /></colgroup> +<tr><th class='bbox'>A. D.</th><th class='bbox' colspan='3'>Ratio.</th><th class='bbox' colspan='3'>Authorities.</th></tr> +<tr><td align='right'> 1-37</td><td align='left' colspan='3'> 1 to 10.97</td><td align='left' colspan='3'> Rome. Rate under Augustus and Tiberius.</td></tr> +<tr><td align='right'> 37-41</td><td align='left' colspan='3'> 1 to 12.17</td><td align='left'> Rome. Reign of Caligula. </td><td class="bbrace" rowspan='5'> </td><td align='left' rowspan='5'>The silver coinage much debased, consequently the ratio of the metals pure was about 1 to 11.</td></tr> +<tr><td align='right'> 54-68</td><td align='left' colspan='3'> 1 to 11.80</td><td align='left'> Rome. Reign of Nero. </td></tr> +<tr><td align='right'> 69-79</td><td align='left' colspan='3'> 1 to 11.54</td><td align='left'> Rome. Reign of Vespasian. </td></tr> +<tr><td align='right'> 81-96</td><td align='left' colspan='3'> 1 to 11.30</td><td align='left'> Rome. Reign of Domitian. </td></tr> +<tr><td align='right'> 138-161</td><td align='left' colspan='3'> 1 to 11.98</td><td align='left'> Rome. Reign of Antoninus. </td></tr> +<tr><td align='right'> 312</td><td align='left' colspan='3'> 1 to 14.40</td><td align='left' colspan='3'> Byzantium. Reign of Constantine. Arbitrary.</td></tr> +<tr><td align='right'> 438</td><td align='left' colspan='3'> 1 to 14.40</td><td align='left' colspan='3'> Byzantium and Rome. Theodosian code. Arbitrary.</td></tr> +<tr><td align='right'> 864</td><td align='left' colspan='3'> 1 to 12.00</td><td align='left' colspan='3'> Probable ratio, as shown by the Edictum Pistense, under the Carlovingian dynasty.</td></tr> +<tr><td align='right'> 1260</td><td align='left' colspan='3'> 1 to 10.50</td><td align='left' colspan='3'> Average ratio in the commercial cities of Italy. Local or doubtful.</td></tr> +<tr><td align='right'>1344-1660</td><td align='left' colspan='3'> 1 to ——</td><td align='left' colspan='3'> England. Numerous mint indentures given in McLeod's +Political Economy, page 475. The ratio, except when +fixed arbitrarily and in violation of market price, varied +between about 1.12 and 1.14 during the two hundred +and fifty-seven years included in this period. +</td></tr> +<tr><td align='right'> 1351</td><td align='left'> 1 to 12.30</td><td align='left' rowspan='6' class="bbrace"> </td><td align='left' rowspan='6'> </td><td align='left' rowspan='6' colspan='3'> +Ratio in North Germany as shown by the very accurate +rules of the Lubeck mint, corroborated in the main by +the accounts of the Teutonic Order of Knights, averaged +in periods of forty years.</td></tr> +<tr><td align='right'> 1375</td><td align='left'> 1 to 12.40</td></tr> +<tr><td align='right'> 1403</td><td align='left'> 1 to 12.80</td></tr> +<tr><td align='right'> 1411</td><td align='left'> 1 to 12.00</td></tr> +<tr><td align='right'> 1451</td><td align='left'> 1 to 11.70</td></tr> +<tr><td align='right'> 1463</td><td align='left'> 1 to 11.60</td></tr> +<tr><td align='right'>1453-1494</td><td align='left' colspan='3'> 1 to 10.50</td><td align='left' colspan='3'> Ratio according to the accounts of the Teutonic knights. +As the ratio fixed in England by numerous mint indentures +from 1465 to 1509 was about 1.12 this German ratio is considered local or doubtful. +</td></tr> +<tr><td class="bb"></td><td class="bb"></td><td class="bb"></td><td class="bb"></td><td class="bb"></td><td class="bb"></td><td class="bb"></td></tr> +</table></div> + + +<p>It will thus be observed that during the one thousand four hundred +and ninety-two years from the coming of Christ to the discovery +of America, silver never went below the ratio of 14.40 to one of +gold.</p> + +<p>The relations which the metals have borne to each other since the +discovery of the New World will appear from the following:<span class='pagenum'><a name="Page_p015" id="Page_p015">[15]</a></span></p> + +<p class="caption"><i>Table showing the relative values of gold and silver in the various countries +of the world from the discovery of America to 1680.</i></p> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="groups" width="100%"> +<colgroup><col width="10%" /></colgroup> +<colgroup><col width="8%" /><col width="1%" /><col width="1%" /></colgroup> +<colgroup><col width="80%" /></colgroup> +<tr><th class='bbox'>A. D.</th><th class='bbox' colspan='3'>Ratio.</th><th class='bbox'>Authorities.</th></tr> +<tr><td align='left'>1497</td><td align='left' colspan='3'> 1 to 10.70</td><td align='left'> Spain. Reign of Isabella. Edict of Medina. Local.</td></tr> +<tr><td align='left'>1500</td><td align='left' colspan='3'> 1 to 10.50</td><td align='left'> Germany. Adam Riese's Arithmetic. Local or doubtful.</td></tr> +<tr><td align='left'>1551</td><td align='left' colspan='3'> 1 to 11.17</td><td align='left'> Germany. Imperial mint regulations. Arbitrary or local.</td></tr> +<tr><td align='left'>1559</td><td align='left' colspan='3'> 1 to 11.44</td><td align='left'> German Imperial mint regulations.</td></tr> +<tr><td align='left'>1561</td><td align='left'> 1 to 11.70</td><td class="bbrace" rowspan='2'> </td><td rowspan='2'></td><td align='left' rowspan='2'> France. Mint regulations.</td></tr> +<tr><td align='left'>1575</td><td align='left'> 1 to 11.68</td></tr> +<tr><td align='left'>1623</td><td align='left' colspan='3'> 1 to 11.74</td><td align='left'> Upper Germany. Mint regulations.</td></tr> +<tr><td align='left'>1640</td><td align='left' colspan='3'> 1 to 13.51</td><td align='left'> France. Mint regulations. Transition period.</td></tr> +<tr><td align='left'>1665</td><td align='left' colspan='3'> 1 to 15.10</td><td align='left'> France. Mint regulations.</td></tr> +<tr><td align='left'>1667</td><td align='left' colspan='3'> 1 to 14.15</td><td align='left'> Upper Germany. Mint regulations. Doubtful.</td></tr> +<tr><td align='left'>1669</td><td align='left' colspan='3'> 1 to 15.11</td><td align='left'> Upper Germany. Mint regulations.</td></tr> +<tr><td align='left'>1679</td><td align='left'> 1 to 15.00</td><td class="bbrace" rowspan='2'> </td><td rowspan='2'></td><td align='left' rowspan='2'> France. Mint regulations.</td></tr> +<tr><td align='left'>1680</td><td align='left'> 1 to 15.40</td></tr> +<tr><td class="bb"></td><td class="bb" colspan='3'></td><td class="bb"></td></tr> +</table></div> + +<p>Table showing the ratio of silver to 1 of gold from 1687 to the demonetization +of silver by Germany and the United States and the +closing of the Mints to its free coinage.</p> + +<div class="blockquot"> +<p class="center">[From the Report (1890) of the Director of the U. S. Mint on the Production of the +Precious Metals in the United States.]</p> + +<p>[<span class="smcap">Note.</span>—From 1687 to 1832 the ratios are taken from Dr. A. Soetbeer; from 1833 +to 1878 from Pixley and Abell's tables; and from 1879 to 1889 from daily cable-grams +from London to the Bureau of the Mint.]</p> +</div> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox'>Year.</th><th class='bbox'>Ratio.</th><th class='bbox'></th><th class='bbox'>Year.</th><th class='bbox'>Ratio.</th><th class='bbox'></th><th class='bbox'>Year.</th><th class='bbox'>Ratio.</th><th class='bbox'></th><th class='bbox'>Year.</th><th class='bbox'>Ratio.</th></tr> +<tr><td align='center'> 1687 </td><td align='center'> 14.94</td><td align='center'></td><td align='center'> 1721</td><td align='center'> 15.05</td><td align='center'></td><td align='center'> 1755</td><td align='center'> 14.68</td><td align='center'></td><td align='center'> 1789</td><td align='center'> 14.75</td></tr> +<tr><td align='center'>1688</td><td align='center'> 14.94 </td><td align='center'></td><td align='center'> 1722</td><td align='center'> 15.17</td><td align='center'></td><td align='center'> 1756</td><td align='center'> 14.94</td><td align='center'></td><td align='center'> 1790</td><td align='center'> 15.04</td></tr> +<tr><td align='center'>1689</td><td align='center'> 15.02</td><td align='center'></td><td align='center'> 1723</td><td align='center'> 15.20</td><td align='center'></td><td align='center'> 1757</td><td align='center'> 14.87</td><td align='center'></td><td align='center'> 1791</td><td align='center'> 15.05</td></tr> +<tr><td align='center'>1690</td><td align='center'> 15.02</td><td align='center'></td><td align='center'> 1724</td><td align='center'> 15.11</td><td align='center'></td><td align='center'> 1758</td><td align='center'> 14.85</td><td align='center'></td><td align='center'> 1792</td><td align='center'> 15.17</td></tr> +<tr><td align='center'>1691</td><td align='center'> 14.98</td><td align='center'></td><td align='center'> 1725 </td><td align='center'> 15.11</td><td align='center'></td><td align='center'> 1759</td><td align='center'> 14.15</td><td align='center'></td><td align='center'> 1793</td><td align='center'> 15.00</td></tr> +<tr><td align='center'>1692</td><td align='center'> 14.92</td><td align='center'></td><td align='center'> 1726</td><td align='center'> 15.15 </td><td align='center'></td><td align='center'> 1760</td><td align='center'> 14.14</td><td align='center'></td><td align='center'> 1794</td><td align='center'> 15.37</td></tr> +<tr><td align='center'>1693</td><td align='center'> 14.83</td><td align='center'></td><td align='center'> 1727</td><td align='center'> 15.24</td><td align='center'></td><td align='center'> 1761</td><td align='center'> 14.54</td><td align='center'></td><td align='center'> 1795</td><td align='center'> 15.55</td></tr> +<tr><td align='center'>1694</td><td align='center'> 14.87</td><td align='center'></td><td align='center'> 1728</td><td align='center'> 15.11</td><td align='center'></td><td align='center'> 1762</td><td align='center'> 15.27</td><td align='center'></td><td align='center'> 1796</td><td align='center'> 15.65</td></tr> +<tr><td align='center'>1695</td><td align='center'> 15.02</td><td align='center'></td><td align='center'> 1729</td><td align='center'> 14.92</td><td align='center'></td><td align='center'> 1763</td><td align='center'> 14.99</td><td align='center'></td><td align='center'> 1797 </td><td align='center'> 15.41 </td></tr> +<tr><td align='center'>1696</td><td align='center'> 15.00</td><td align='center'></td><td align='center'> 1730</td><td align='center'> 14.81</td><td align='center'></td><td align='center'> 1764 </td><td align='center'> 14.70 </td><td align='center'></td><td align='center'> 1798</td><td align='center'> 15.59</td></tr> +<tr><td align='center'>1697</td><td align='center'> 15.20</td><td align='center'></td><td align='center'> 1731</td><td align='center'> 14.94</td><td align='center'></td><td align='center'> 1765</td><td align='center'> 14.83</td><td align='center'></td><td align='center'> 1799</td><td align='center'> 15.74</td></tr> +<tr><td align='center'>1698</td><td align='center'> 15.07</td><td align='center'></td><td align='center'> 1732</td><td align='center'> 15.09</td><td align='center'></td><td align='center'> 1766</td><td align='center'> 14.80</td><td align='center'></td><td align='center'> 1800</td><td align='center'> 15.68</td></tr> +<tr><td align='center'>1699</td><td align='center'> 14.94</td><td align='center'></td><td align='center'> 1733</td><td align='center'> 15.18</td><td align='center'></td><td align='center'> 1767</td><td align='center'> 14.85</td><td align='center'></td><td align='center'> 1801</td><td align='center'> 15.46</td></tr> +<tr><td align='center'>1700</td><td align='center'> 14.81</td><td align='center'></td><td align='center'> 1734</td><td align='center'> 15.39</td><td align='center'></td><td align='center'> 1768</td><td align='center'> 14.80</td><td align='center'></td><td align='center'> 1802</td><td align='center'> 15.26</td></tr> +<tr><td align='center'>1701</td><td align='center'> 15.07</td><td align='center'></td><td align='center'> 1735</td><td align='center'> 15.41</td><td align='center'></td><td align='center'> 1769</td><td align='center'> 14.72</td><td align='center'></td><td align='center'> 1803</td><td align='center'> 15.41</td></tr> +<tr><td align='center'>1702</td><td align='center'> 15.52</td><td align='center'></td><td align='center'> 1736</td><td align='center'> 15.18</td><td align='center'></td><td align='center'> 1770</td><td align='center'> 14.62</td><td align='center'></td><td align='center'> 1804</td><td align='center'> 15.41</td></tr> +<tr><td align='center'>1703</td><td align='center'> 15.17</td><td align='center'></td><td align='center'> 1737</td><td align='center'> 15.02</td><td align='center'></td><td align='center'> 1771</td><td align='center'> 14.66</td><td align='center'></td><td align='center'> 1805</td><td align='center'> 15.79</td></tr> +<tr><td align='center'>1704</td><td align='center'> 15.22</td><td align='center'></td><td align='center'> 1738</td><td align='center'> 14.91</td><td align='center'></td><td align='center'> 1772</td><td align='center'> 14.52</td><td align='center'></td><td align='center'> 1806</td><td align='center'> 15.52</td></tr> +<tr><td align='center'>1705</td><td align='center'> 15.11</td><td align='center'></td><td align='center'> 1739</td><td align='center'> 14.91</td><td align='center'></td><td align='center'> 1773</td><td align='center'> 14.62</td><td align='center'></td><td align='center'> 1807</td><td align='center'> 15.43</td></tr> +<tr><td align='center'>1706</td><td align='center'> 15.27</td><td align='center'></td><td align='center'> 1740</td><td align='center'> 14.94</td><td align='center'></td><td align='center'> 1774</td><td align='center'> 14.62</td><td align='center'></td><td align='center'> 1808</td><td align='center'> 16.08</td></tr> +<tr><td align='center'>1707</td><td align='center'> 15.44</td><td align='center'></td><td align='center'> 1741</td><td align='center'> 14.92</td><td align='center'></td><td align='center'> 1775</td><td align='center'> 14.72</td><td align='center'></td><td align='center'> 1809</td><td align='center'> 15.96</td></tr> +<tr><td align='center'>1708</td><td align='center'> 15.41</td><td align='center'></td><td align='center'> 1742</td><td align='center'> 14.85</td><td align='center'></td><td align='center'> 1776</td><td align='center'> 14.55</td><td align='center'></td><td align='center'> 1810</td><td align='center'> 15.77</td></tr> +<tr><td align='center'>1709</td><td align='center'> 15.31</td><td align='center'></td><td align='center'> 1743</td><td align='center'> 14.85</td><td align='center'></td><td align='center'> 1777</td><td align='center'> 14.54</td><td align='center'></td><td align='center'> 1811</td><td align='center'> 15.53</td></tr> +<tr><td align='center'>1710</td><td align='center'> 15.22</td><td align='center'></td><td align='center'> 1744</td><td align='center'> 14.87</td><td align='center'></td><td align='center'> 1778</td><td align='center'> 14.68</td><td align='center'></td><td align='center'> 1812</td><td align='center'> 16.11</td></tr> +<tr><td align='center'>1711</td><td align='center'> 15.29</td><td align='center'></td><td align='center'> 1745</td><td align='center'> 14.98</td><td align='center'></td><td align='center'> 1779</td><td align='center'> 14.80</td><td align='center'></td><td align='center'> 1813</td><td align='center'> 16.25</td></tr> +<tr><td align='center'>1712</td><td align='center'> 15.31</td><td align='center'></td><td align='center'> 1746</td><td align='center'> 15.13</td><td align='center'></td><td align='center'> 1780</td><td align='center'> 14.72</td><td align='center'></td><td align='center'> 1814</td><td align='center'> 15.04</td></tr> +<tr><td align='center'>1713</td><td align='center'> 15.24</td><td align='center'></td><td align='center'> 1747</td><td align='center'> 15.26</td><td align='center'></td><td align='center'> 1781</td><td align='center'> 14.78</td><td align='center'></td><td align='center'> 1815</td><td align='center'> 15.26</td></tr> +<tr><td align='center'>1714</td><td align='center'> 15.13</td><td align='center'></td><td align='center'> 1748</td><td align='center'> 15.11</td><td align='center'></td><td align='center'> 1782</td><td align='center'> 14.42</td><td align='center'></td><td align='center'> 1816</td><td align='center'> 15.28</td></tr> +<tr><td align='center'>1715</td><td align='center'> 15.11</td><td align='center'></td><td align='center'> 1749</td><td align='center'> 14.80</td><td align='center'></td><td align='center'> 1783</td><td align='center'> 14.48</td><td align='center'></td><td align='center'> 1817</td><td align='center'> 15.11</td></tr> +<tr><td align='center'>1716</td><td align='center'> 15.09</td><td align='center'></td><td align='center'> 1750</td><td align='center'> 14.55</td><td align='center'></td><td align='center'> 1784</td><td align='center'> 14.70</td><td align='center'></td><td align='center'> 1818</td><td align='center'> 15.35</td></tr> +<tr><td align='center'>1717</td><td align='center'> 15.13</td><td align='center'></td><td align='center'> 1751</td><td align='center'> 14.39</td><td align='center'></td><td align='center'> 1785</td><td align='center'> 14.92</td><td align='center'></td><td align='center'> 1819</td><td align='center'> 15.33</td></tr> +<tr><td align='center'>1718</td><td align='center'> 15.11</td><td align='center'></td><td align='center'> 1752</td><td align='center'> 14.54</td><td align='center'></td><td align='center'> 1786</td><td align='center'> 14.96</td><td align='center'></td><td align='center'> 1820</td><td align='center'> 15.62</td></tr> +<tr><td align='center'>1719</td><td align='center'> 15.09</td><td align='center'></td><td align='center'> 1753</td><td align='center'> 14.54</td><td align='center'></td><td align='center'> 1787</td><td align='center'> 14.92</td><td align='center'></td><td align='center'> 1821</td><td align='center'> 15.95</td></tr> +<tr><td align='center'>1720</td><td align='center'> 15.04</td><td align='center'></td><td align='center'> 1754</td><td align='center'> 14.48</td><td align='center'></td><td align='center'> 1788</td><td align='center'> 14.65</td><td align='center'></td><td align='center'> 1822</td><td align='center'> 15.80</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p><span class='pagenum'><a name="Page_p016" id="Page_p016">[16]</a></span></p> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox'>Year.</th><th class='bbox'>Ratio.</th><th class='bbox'></th><th class='bbox'>Year.</th><th class='bbox'>Ratio.</th><th class='bbox'></th><th class='bbox'>Year.</th><th class='bbox'>Ratio.</th><th class='bbox'></th><th class='bbox'>Year.</th><th class='bbox'>Ratio.</th></tr> +<tr><td align='center'> 1823 </td><td align='center'> 15.84</td><td align='center'></td><td align='center'> 1836</td><td align='center'> 15.72</td><td align='center'></td><td align='center'> 1849</td><td align='center'> 15.78</td><td align='center'></td><td align='center'> 1861</td><td align='center'> 15.50</td></tr> +<tr><td align='center'> 1824</td><td align='center'> 15.82 </td><td align='center'></td><td align='center'> 1837</td><td align='center'> 15.83</td><td align='center'></td><td align='center'> 1850</td><td align='center'> 15.70</td><td align='center'></td><td align='center'> 1862</td><td align='center'> 15.35</td></tr> +<tr><td align='center'> 1825</td><td align='center'> 15.70</td><td align='center'></td><td align='center'> 1838 </td><td align='center'> 15.85</td><td align='center'></td><td align='center'> 1851</td><td align='center'> 15.46</td><td align='center'></td><td align='center'> 1863</td><td align='center'> 15.37</td></tr> +<tr><td align='center'> 1826</td><td align='center'> 15.76</td><td align='center'></td><td align='center'> 1839</td><td align='center'> 15.62 </td><td align='center'></td><td align='center'> 1852</td><td align='center'> 15.59</td><td align='center'></td><td align='center'> 1864</td><td align='center'> 15.37</td></tr> +<tr><td align='center'> 1827</td><td align='center'> 15.74</td><td align='center'></td><td align='center'> 1840</td><td align='center'> 15.62</td><td align='center'></td><td align='center'> 1853 </td><td align='center'> 15.33</td><td align='center'></td><td align='center'> 1865</td><td align='center'> 15.44</td></tr> +<tr><td align='center'> 1828</td><td align='center'> 15.78</td><td align='center'></td><td align='center'> 1841</td><td align='center'> 15.70</td><td align='center'></td><td align='center'> 1854</td><td align='center'> 15.33 </td><td align='center'></td><td align='center'> 1866</td><td align='center'> 15.43</td></tr> +<tr><td align='center'> 1829</td><td align='center'> 15.78</td><td align='center'></td><td align='center'> 1842</td><td align='center'> 15.87</td><td align='center'></td><td align='center'> 1855</td><td align='center'> 15.38</td><td align='center'></td><td align='center'> 1867</td><td align='center'> 15.57</td></tr> +<tr><td align='center'> 1830</td><td align='center'> 15.82</td><td align='center'></td><td align='center'> 1843</td><td align='center'> 15.93</td><td align='center'></td><td align='center'> 1856</td><td align='center'> 15.38</td><td align='center'></td><td align='center'> 1868 </td><td align='center'> 15.59</td></tr> +<tr><td align='center'> 1831</td><td align='center'> 15.72</td><td align='center'></td><td align='center'> 1844</td><td align='center'> 15.85</td><td align='center'></td><td align='center'> 1857</td><td align='center'> 15.27</td><td align='center'></td><td align='center'> 1869</td><td align='center'> 15.60 </td></tr> +<tr><td align='center'> 1832</td><td align='center'> 15.73</td><td align='center'></td><td align='center'> 1845</td><td align='center'> 15.92</td><td align='center'></td><td align='center'> 1858</td><td align='center'> 15.38</td><td align='center'></td><td align='center'> 1870</td><td align='center'> 15.57</td></tr> +<tr><td align='center'> 1833</td><td align='center'> 15.93</td><td align='center'></td><td align='center'> 1846</td><td align='center'> 15.90</td><td align='center'></td><td align='center'> 1859</td><td align='center'> 15.19</td><td align='center'></td><td align='center'> 1871</td><td align='center'> 15.57</td></tr> +<tr><td align='center'> 1834</td><td align='center'> 15.73</td><td align='center'></td><td align='center'> 1847</td><td align='center'> 15.80</td><td align='center'></td><td align='center'> 1860</td><td align='center'> 15.29</td><td align='center'></td><td align='center'> 1872</td><td align='center'> 15.63</td></tr> +<tr><td align='center'> 1835</td><td align='center'> 15.80</td><td align='center'></td><td align='center'> 1848</td><td align='center'> 15.85</td><td align='center'></td><td align='center'></td><td align='center'></td><td align='center'></td><td align='center'></td><td align='center'></td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p>By the foregoing table it will be seen that in the three hundred +and seventy-five years from 1497 to 1872 the maximum separation of +the metals was only as 1 to 16.25—notwithstanding the widest divergencies +during that long period in the yield of the two metals +from the mines. It will be observed that all the later quotations are +from the London market, but it is a significant fact that in France, +where, by the law of 7 Germinal, <i>An</i> XI, (1803,) free coinage was permitted +to both metals, at the ratio of 15½ of silver to 1 of gold, for a +period of seventy years, and until the coinage of silver was limited, +there was at no time the slightest variance from that relation.</p> + +<p>When silver was deprived of the full money function, and all the +money-work of society was placed on gold, the metals began to separate. +The following table shows the degree of that separation from +year to year:</p> + +<p>Table showing the ratio of silver to 1 of gold since the demonetization +of silver by Germany and the United States, and the closing of +all mints of the western world to its free coinage:</p> + + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols" width="50%"> +<tr><td align='center'>1873 15.92</td><td align='center'> 1882 18.19</td></tr> +<tr><td align='center'>1874 16.17</td><td align='center'> 1883 18.64</td></tr> +<tr><td align='center'>1875 16.59</td><td align='center'> 1884 18.57</td></tr> +<tr><td align='center'>1876 17.88</td><td align='center'> 1885 19.41</td></tr> +<tr><td align='center'>1877 17.22</td><td align='center'> 1886 20.78</td></tr> +<tr><td align='center'>1878 17.94</td><td align='center'> 1887 21.13</td></tr> +<tr><td align='center'>1879 18.40</td><td align='center'> 1888 21.99</td></tr> +<tr><td align='center'>1880 18.05</td><td align='center'> 1889 22.10</td></tr> +<tr><td align='center'>1881 18.16</td><td align='center'></td></tr> +</table></div> + +<p>The foregoing figures show that it is only since the legislative proscription +of silver by Germany and the United States, and the closing +of all the European mints to its coinage, that any material +change took place in the ratio between the two metals, which conclusively +demonstrates that the present divergence in the relative +values of the two metals is directly due to the legal outlawry of silver +and not to natural causes.</p> + +<p>Not only has the concurrent use of the two metals as money had the +sanction of all time, but the approval of the greatest minds of history, +and, when not blinded by self-interest, the approval of practical +and experienced financial minds. So well recognized is this +fact that I need only cite a few instances of such approval.</p> + +<p>Alexander Hamilton said:</p> + +<div class="blockquot"><p>To annul the use of either of the metals as money is <i>to abridge the quantity of +circulating medium</i>, and is liable to all the objections which arise from a comparison +of the <i>benefits of a full with the evils of a scanty circulation</i>. (Report to Congress, +1791.)</p></div><p><span class='pagenum'><a name="Page_p017" id="Page_p017">[17]</a></span></p> + +<p>Thomas Jefferson, in a letter to Hamilton, indorsed this view, +saying:</p> + +<div class="blockquot"><p>I return you the report on the mint. I concur with you that the unit <i>must stand +on both metals</i>. (Letter to Hamilton, February, 1792.)</p></div> + +<p>In his "Recherches sur l'or et sur l'argent," 1843, Léon Fanchet +said:</p> + +<div class="blockquot"><p>If all the nations of Europe adopted the system of Great Britain, the price of +gold would be raised beyond measure, and we should see produced in Europe a +most lamentable result. The Government can not decree that legal tender shall +be only gold, in place of silver, for that would be to decree a revolution, and the +most dangerous of all, because it would be a revolution leading to unknown results +(<i>qui marcherait vers l'inconnu</i>).</p></div> + +<p>In a memoir read before the French Institute in 1868, M. Wolowski +said:</p> + +<div class="blockquot"><p>The suppression of silver would bring on a veritable revolution. Gold would +augment in value with a rapid and constant progress, which would break the faith +of contracts and aggravate the situation of all debtors, including the nation. It +would add at one stroke of the pen at least three milliards to the twelve milliards +of the public debt.</p></div> + +<p>In a debate in the French Senate on January 28, 1870, Senator Dumas +eloquently pleaded for caution in dealing with a subject of such +farreaching importance as the demonetization of one of the money +metals. He said:</p> + +<div class="blockquot"><p>Those who approach these questions for the first time decide them at once. +Those who study them with care hesitate. Those who are obliged practically to +decide doubt and stop, overwhelmed with the weight of the enormous responsibility.</p> + +<p>The quantities of the precious metals which are now sufficient may become insufficient, +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. <i>This keeps up the +general equilibrium.</i> Nobody can guaranty that the present vast production of +gold will continue. The <i>placers</i> are found on the surface of the earth, and may +be exhausted by the very facility of working them. Silver presents itself in the +form of subterranean veins. Science may contribute to accelerate its extraction. +In presence of the unknown, which dominates the future, we should practice a +prudent reserve.</p></div> + +<p>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.</p> + +<p>M. Wolowski said:</p> + +<div class="blockquot"><p>The sum total of the precious metals is reckoned at 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.</p></div> + +<p>M. Rouland, governor of the Bank of France, said:</p> + +<div class="blockquot"><p>We have not to do with ideal theories. The two moneys have actually co-existed +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?</p></div> + +<p>Baron Rothschild said:</p> + +<div class="blockquot"><p>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 circulation +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.</p></div> + +<p><span class='pagenum'><a name="Page_p018" id="Page_p018">[18]</a></span></p> + +<p>At the session (October 30, 1873) of the Belgian Monetary Commission, +Professor Laveleye, one of the most luminous writers on economic +subjects, said:</p> + +<div class="blockquot"><p>Debtors, and among them the state, have the right to pay in gold or silver, and +this right can not be taken away without disturbing the relation of debtors and +creditors, to the prejudice of debtors, to the extent of perhaps one-half, certainly +of one-third. To increase all debts at a blow (<i>brusquement</i>) is a measure so violent, +so revolutionary, that I can not believe that the Government will propose it +or that the Chambers will vote it.</p></div> + + +<p class="caption">WHY WAS THE AUTOMATIC SYSTEM INTERFERED WITH?</p> + +<p>Some thirteen years ago, as Chairman of the Monetary Commission +appointed by Congress to investigate the causes of the changes +in the relative values of the precious metals, I submitted to this +body a report, in which I took occasion to refer to the motives which +evidently influenced the creditor classes of the western world in destroying +the automatic system of money. From that Report I quote +as follows:</p> + +<div class="blockquot"><p>The world has generally favored, theoretically if not practically, the automatic +metallic system, and adjusted its business to it. Some nations adopted one metal +as their standard, and some the other, and some adopted both. Those that adopted +both metals served as a balance-wheel to steady with exactness their relative value. +The practical effect of all of this was the same as if all nations had adopted both, +because it secured the entire stock of both at a fixed equivalency for the transaction +of the business of the world. While some nations have changed their money +metal, or, having had paper money, have resumed specie payments in one metal, +the policy of a general demonetization of one of the metals was first broached only +about twenty years ago. About ten years later a formidable propaganda was organized +to fasten that policy upon the commercial world.</p> + +<p>This new school of financial theorists advocate the retention of metal as the +material of money, but favor its subjection to governmental interference in every +respect. Whenever new mines are discovered, or old ones yield or promise to +yield more abundantly, instead of freely accepting their product in accordance +with the automatic theory, they advocate its rejection through the restriction or +the absolute prohibition of the coinage of either or both metals, or through the +limitation or the abolition of the legal-tender function of one of them. Whenever +the interests of the creditor and income classes seem to be in danger of being impaired +by an increase in the volume and decrease in the value of money, or in +other words, by a general rise in prices, these modern theorists are clamorous in +double-standard countries for the demonetization of one of the money metals, and +in single-standard countries for the shifting of the money function from the metal +which promises the most to the one that promises the least abundant supply. +They are extremely anxious for the retention of the <i>material</i> of which the money-standard +is composed when such material is rising in value and prices are falling, +and exceedingly apprehensive of the evil and inconvenience which they predict +as sure to result from changing it.</p> + +<p>Whenever a fall in prices occurs, through either a natural or artificial contraction +in the volume of money, they maintain that it is due to antecedent inflation +and extravagance, or to overproduction through persistent and reckless industry; +if the contraction be natural, that it can not be helped, and if artificial, that though +it may inflict great temporary losses on the masses of the people, it will be sure to +result in their ultimate benefit, and they console the sufferers with the comforting +assurance that such contraction is necessary in order to reach the lowest depths +of that "<i>hard pan</i>" whose foundations they have previously undermined by demonetizing +one of the metals, and upon which alone they claim that money, capital, +and labor can securely and harmoniously rest. But when the material composing +the standard is falling in value and prices are rising, they immediately +discover that the maintenance of the value of the standard is the all-important +consideration, and that its material is of no importance whatever and should be at +once changed to "<i>redress the situation</i>." After having reduced one of the metals to +a commodity by depriving it of the money function, these theorists complacently +point to the resulting fluctuations in the value as a justification of the act producing +them, and as a conclusive proof of the unfitness for money of the demonetized +metal. * * *</p> + +<p>Metallic money, on this theory, is no longer automatic, but is as completely subjected +to governmental control for all injurious purposes as paper money. But, +unlike paper money, the control over this kind of metallic money can only be exercised +in the baneful direction of decreasing its volume, and thereby making +property cheaper and money scarcer and dearer.</p></div> +<p><span class='pagenum'><a name="Page_p019" id="Page_p019">[19]</a></span></p> + +<div class="blockquot"><p>This is a one-sided system, which can operate only in the interest of the security +creditor, the usurer, and 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.</p> + +<p>The world has expended a vast amount of labor in the production of the precious +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.</p> +</div> + +<p>The history of the subsequent struggle to remonetize silver only +serves to illustrate and emphasize the correctness of that statement +of the case.</p> + +<p>Between 1810 and 1849, according to Tooke and Newmarch (recognized +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 increasing +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.</p> + +<p>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 suspected +that money would thereby become considerably increased +in volume, the annuitants and income classes, the creditors everywhere, +took steps to avert what they characterized as a great calamity. +They openly declared their purpose, by every means in their +power, to prevent a decline in the value of money, so that the purchasing +power of their incomes might not be reduced. They determined +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 and much +needed yield of the mines.</p> + +<p>The fiat therefore went forth that one of the metals must be discarded.</p> + + +<p class="caption">THE PROPOSITION FIRST MADE TO DEMONETIZE GOLD.</p> + +<p>If anything were needed to demonstrate that the reason for the demonetization +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 demonetization +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 condemned +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.</p> + +<p>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 determination +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<span class='pagenum'><a name="Page_p020" id="Page_p020">[20]</a></span> +money, the argument was that a decrease in the purchasing power of +money was a calamity against the happening of which every energy +should be directed.</p> + +<p>The privileged classes found then, as they find now, able and ingenious +advocates and defenders among the literary and educated +guilds of the period. The celebrated De Quincy, in England, attempted +to prove, and to his own satisfaction did prove upon figures +drawn from his fears and a brilliant imagination, that the least +yield of gold to be expected from the mines of California and Australia +for an indefinite period in the future, was the yearly sum of +$350,000,000.</p> + +<p>M. Chevalier, in France, vehemently proclaimed the necessity of +discarding one of the money metals, and that one not silver but gold. +In his work upon the "Fall of Gold" M. Chevalier, in 1856, said:</p> + +<div class="blockquot"><p>The quantity of gold annually thrown on the general market approaches in +round numbers a milliard of francs ($200,000,000). Those two countries (California +and Australia) must yet for a long series of years produce gold in such quantities +and on such conditions as to render a marked decline in its value inevitable.</p> + +<p>It is absolutely certain that so vast a production should be accompanied with a +great reduction in value.</p> + +<p>In no direction can a new outlet be seen sufficiently large to absorb the extraordinary +production of gold which we are now witnessing, so as to prevent a fall in +its value.</p> + +<p>Unless, then, we possess a very robust faith in the immobility of human affairs, +we must regard the fall in the value of gold as an event for which we should prepare +without loss of time.</p></div> + +<p>The "preparation" which Chevalier advocated was the discarding +of that metal which gave promise of the greatest abundance. +He did not attempt to hide his purpose. He boldly stated that his +object was to enhance the value of money. This object was also +clearly expressed on a later occasion by another distinguished advocate +of dear money, Mr. Victor Bonnet, of France, in the Journal des +Economistes. He said:</p> + +<div class="blockquot"><p>The world is now saturated with the precious metals, and if there is any danger +against which it is necessary to guard, it is that this saturation should become +greater. * * *</p> + +<p>If the annual production of gold is now reduced to 500,000,000 francs, let us thank +Heaven for it, and let us wish that it may not be too rapidly increased, whereby +we should be embarrassed. It is the too great abundance and not the scarcity of +metallic money which is to be apprehended.</p></div> + + +<p class="caption">GOLD DEMONETIZED.</p> + +<p>In 1857 the German states and Austria demonetized gold; and had +it not been for the opposition of France, which insisted on retaining +the double standard, the movement might have become general on +the continent. With England, however, nothing could be done. +More than a generation had passed since it had declared for the +single standard of gold, and its creditors and income classes—the +shrewdest, most adept, and watchful of financiers—did not believe +that the large yields of gold would long continue.</p> + +<p>The creditor classes of the continent, finding England immovable +and realizing that the object sought by the English creditors was +identical with their own, namely, the increase in the value of money +and the depression of prices, concluded that the common purpose +could be as well served by the demonetization of one as by that of +the other. This conclusion was emphasized by developments on the +Comstock lode whose bountiful and beneficent yield of silver was +the fitting supplement to the great discoveries of gold on the Pacific +coast. The danger of a decline in the value of money was more imminent +than ever. The annuitants became alarmed. Commissions +were sent from Europe to the Pacific coast to investigate the sub<span class='pagenum'><a name="Page_p021" id="Page_p021">[21]</a></span>ject. +The United States, too, sent a commissioner to examine into +the condition and prospects of the Comstock, 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."</p> + +<p>Like many of the present opponents of silver he was endowed with +the gift of prophecy, and accordingly we find him confidently predicting +that other 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 disparage +those who are in favor of continuing it as one of the money +metals of the world.</p> + +<p>It was then announced with all the dogmatism of authority that +silver was unfit to be used as money. Defects were suddenly discovered +in it that the scrutiny of three thousand years had failed to +disclose. Its weight and bulk were found to be insuperable obstacles +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 "inconvenient" +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.</p> + +<p>The objection that silver is too heavy for the pocket is an objection +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 +they prefer paper representatives as being the most convenient. The +extraordinary perfection to which the arts of the engraver and paper +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 representatives +are preferred by the general mass of the people, and have +almost entirely occupied the channels of circulation to the exclusion +of both metals. A silver certificate for $1,000 weighs no more +than a gold certificate for the same amount.</p> + + +<p class="caption">THE MOTIVE FOR DEMONETIZING SILVER.</p> + +<p>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 promised +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 aggrandize 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<span class='pagenum'><a name="Page_p022" id="Page_p022">[22]</a></span> +slavery for the western world, of which the debtor classes among the +white races should be the victims.</p> + +<p>When demonetization was determined on there was no pretense +that there was any difficulty in maintaining a parity between the two +metals at the established ratio.</p> + +<p>In the official résumé of the doings of the French monetary commission +of 1869 the arguments upon both sides were summed up.</p> + +<p>In behalf of the gold standard it was said:</p> + +<div class="blockquot"><p>The rise in price which has taken place within twenty years in a great number +of articles of merchandise is evidently due to many causes, such as war, bad +harvests, and increase in consumption; but it is very probable that the depreciation +of the precious metals has contributed to it, since there has been a striking +coincidence between the rise of prices and the production of the new mines of +gold and silver. The annual production of the two metals, which was only +$80,000,000 in 1847, exceeds now $200,000,000. It has nearly tripled, and it is easy +to see that the real value of the metals has diminished. It is difficult to estimate +exactly what the diminution is, but whatever it may be it demands the attention +of governments, because it affects unfavorably all that portion of the population +whose income, remaining nominally the same, undergoes a yearly diminution +of purchasing power. As governments control the weight and standard of +money, they ought so far as possible to assure its value. And as it is admitted +that the tendency of the metals is to depreciate, this tendency should be arrested +by demonetizing one of them.</p></div> + +<p>In behalf of the double standard it was replied as follows:</p> + +<div class="blockquot"><p>Many economists argue that the precious metals, having become very abundant, +have lost 10 or 15 per cent. of their value, and that the situation must be redressed +by making money scarcer by demonetizing silver. To this it may be answered +that the great discoveries of gold of the last twenty years have injured nobody. +The new mass of gold, spreading over the whole world, has found employment in +stimulating all forms of business, and, as a consequence, the value of gold has +fallen very little. According to Mr. Newmarch, the mass of gold and silver has +augmented 3 per cent. per annum, while the mass of exchanges has augmented +more than 3 per cent. per annum, so that the equilibrium has been maintained. +And the present is an especially inopportune time to demonetize silver, because +the annual production of gold has been falling off for several years. It was +$200,000,000 in 1853, and it is now not more than $140,000,000. What will happen +to the civilized world if silver is demonetized and if gold shall then fail?</p></div> + + +<p class="caption">THE MOTIVE OF ENGLAND.</p> + +<p>England did not adopt the gold standard until she was in a position +to become the principal creditor nation. When her forges, +furnaces, spindles, and looms were ready to supply manufactured +goods to all the world, she saw that all countries and peoples would +be compelled to pour their treasures into her lap. Her insular +position and great navy guarantied her against external assault. +Released from the anxieties and labors incident to the Napoleonic +wars, with a sturdy population of trained mechanics, and with +fields of coal and iron in abundance, she was well adapted to become +the "workshop of the world." With colonial possessions in every +sea, and with Continental Europe in ceaseless unrest, England could +rely on customers who could themselves produce nothing but raw +material and would be obliged to buy her finished products.</p> + +<p>The field of industry had been recently broadened by basic inventions +of unparalleled importance—the steam-engine, the power loom, +the spinning-jenny, and a multiplicity of other devices that increased +a hundred fold the efficiency of artisan labor. England knew that +her trade would in the main be a foreign trade and her financial +dealings largely with foreign governments. She knew that from the +people of the continent, impoverished by years of struggle for existence +against the attacks of Napoleon, she could not expect immediate +payments in cash, or in commodities. Time bonds and other deferred +obligations were the media in which for the most part she +received pay, she made interest and principal payable in gold alone,<span class='pagenum'><a name="Page_p023" id="Page_p023">[23]</a></span> +and if before the date of payment the value of money should increase +it would not be to the disadvantage of the creditor. Whatever +we may think of the <i>ethics</i> of this policy, we can have no difficulty +in understanding its <i>motive</i>.</p> + + +<p class="caption">ACKNOWLEDGMENT OF THE MOTIVE.</p> + +<p>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 adherence +to the gold standard now is the same for which she originally +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 commission appointed in 1886 to inquire +into the changes in the relative values of the precious metals.</p> + +<p>At page 90, Part II, of the final report of that body, section 128, +the commission say:</p> + +<div class="blockquot"><p>It must be remembered, too, that this country is largely a creditor country, of +debts payable in gold, and any change which entails a rise in the price of commodities +generally; that is to say, a diminution of the purchasing power of gold +would be to our disadvantage.</p></div> + +<p>Before the British Royal Commission of 1868 on International +Coinage, Mr. Jacob Behren, an eminent British merchant and member +of the Associated Chambers of Commerce, after answering special +and technical questions, was asked, in conclusion, "if there was +anything else he wished to state." His reply was (p. 13):</p> + +<div class="blockquot"><p>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 be now the very poorest country in the world if the silver +standard abroad had been kept up, and gold had not been generally introduced. +Gold would otherwise have been very much reduced in value, and we should have +had all the gold poured into England. All the debts owing to us would have been +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.</p></div> + +<p>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—</p> + +<div class="blockquot"><p>The true policy of England as the chief creditor nation of the world was to keep +perfect independence, and to refuse participation in any entangling conference +on our monetary system.</p></div> + +<p>And, according to the same report, Sir Lyon Playfair, referring to +the holding of the metals together by law, said that—</p> + +<div class="blockquot"><p>It was quite true that, if you yoked a cart-horse to a racer, the strength of both +would be increased but the speed of the racer would be sacrificed.</p></div> + +<p>Gold is the "racer" whose "speed" must not be sacrificed, no matter +how much injury may be effected by its tendency to greater and +greater gain.</p> + +<p>The weight of the enormous burden which is imposed on 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—</p> + +<div class="blockquot"><p>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 £35,000,000; or, deducting from +each side of the account £8,000,000 locked up in the Notes Department of the +Bank of England, it was £27,000,000; or only 4½ per cent. of liabilities.</p></div><p><span class='pagenum'><a name="Page_p024" id="Page_p024">[24]</a></span></p> + +<p>On the same occasion Mr. Goschen, Chancellor of the Exchequer, +delivered an able speech, in which he gave his facts, his eloquence, +and his logic to the struggling masses of his countrymen by maintaining +the wisdom of remonetization of silver, but gave his conclusions +and his policy to the creditor classes by recommending no +disturbance of present conditions.</p> + +<div class="blockquot"><p>I have contended—</p></div> + +<p class="noidt">said the Chancellor of the Exchequer—</p> + +<div class="blockquot"> +<p class="noidt">and am prepared still to contend, that I should prefer the currency of the world +to depend upon two metals rather than upon one metal. To those views I gave +expression in 1878. * * * I have always looked upon silver and gold not as +antagonistic to each other; not as being metals the price of one of which would +necessarily fall when the other rose, but I have looked upon them as partners who +together were doing the work of the currency of the world.</p></div> + +<p>The English creditor classes have not been without able coadjutors +in this country. We have noticed for the last twelve or fourteen +years that zealous advocates of the gold standard, the advantages of +which are not confined to Great Britain, are to be found among the +creditor classes of the United States.</p> + +<p>If the toilers of this country, from the proceeds of whose labor these +exactions have to be paid, had as little influence on the legislation of +the United States as the toilers of England have on the legislation of +that country, the creditor classes and financiers of the United States +might be as frank as those of Great Britain in admitting the object of +maintaining the single gold standard.</p> + +<p>How graphically, though unintentionally, does the English poet, +Waller, in the following verse, express the advantage which the gold +standard gives to creditors everywhere, and the self-satisfaction with +which they contemplate life:</p> + +<p class="poem"> +The taste of hot Arabia's spice we know,<br /> +Free from the scorching sun that makes it grow.<br /> +Without the worm, in Persia's silk we shine,<br /> +And, without planting, drink of every vine.<br /> +To dig for wealth we weary not our limbs,<br /> +Gold, though the heaviest metal, hither swims.<br /> +Ours is the harvest where the Indians mow.<br /> +We plow the deep, and reap what others sow.<br /> +</p> + + +<p class="caption">THE MOTIVE OF GERMANY.</p> + +<p>When Germany, intoxicated by her victory over France, and in +order to further cripple a fallen foe from whom she had exacted +$1,000,000,000 in gold, demonetized silver, she inflicted on her people +by the fall of prices consequent on the increase in the value of money, +more misery than all her armies of horse and foot had been able to +inflict on France. France, on the contrary, notwithstanding this +unprecedented war tribute, by keeping a sufficient volume of money +in circulation to maintain, and even advance, her range of prices, +emerged in a few years from the consequences of the greatest disaster +in her history, conscious of a triumph more complete than Germany +had achieved by all the military splendor of the war. The ransom +exacted of France was received back by her almost as soon as paid, +in exchange for the products of her industry. It is not a sign of +prosperity, Mr. President, when hundreds of thousands of people, +the best bone and sinew of a nation, are found annually emigrating; +and it is a coincidence which I merely mention, in passing, +that as soon as the effects of demonetization of silver had had time +to make themselves felt in Germany, a veritable hegira of its people +took place.<span class='pagenum'><a name="Page_p025" id="Page_p025">[25]</a></span></p> + +<p>From 1873 to 1889, the emigration from Germany numbered 1,546,000 +persons.</p> + +<p>Students of social science everywhere recognize the statistics of illegitimacy +and of suicides as among the most powerful evidences of +monetary distress. By reference to those statistics we find that notwithstanding +the large emigration during that period the number of +illegitimate births in Germany increased from 161,294 in 1883 to 169,645 +in 1888. 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 1882. In +Prussia alone the number of suicides in 1876 was 151 per million, +while in 1882 it was 191 per million.</p> + +<p>This is part of the price which the toiling masses of Germany are +paying for the gold standard experiment, which, without their consent +their imperial government foisted upon them.</p> + +<p>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 commercial +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-sighted +statesmen of Great Britain has been that she secured her +position, not by reason of the gold standard, but in spite of it.</p> + +<p>In a speech delivered at Glasgow, in November, 1873, after the +alteration by Germany in her monetary standard, Mr. Disraeli said:</p> + +<div class="blockquot"><p>The monetary disturbance which has occurred, and is now to a certain extent +acting 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 sufficiently +acquainted.</p></div> + +<p>And again in March, 1879, when the effects of the decreasing volume +of money were making themselves more and more felt, Mr. Disraeli, +then Lord Beaconsfield, said:</p> + +<div class="blockquot"><p>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 state of affairs has been brought about by gold production exactly the reverse +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.</p></div> + +<p>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.</p> + +<p>The adoption of that standard by Germany and France was therefore +not only destructive of their own prosperity, but was a stunning +blow at the prosperity of England and all other gold-using +<span class='pagenum'><a name="Page_p026" id="Page_p026">[26]</a></span>countries. In taking England for his model, Bismarck had not the +condition of the toiling masses before his mind, but the glamour of +prosperity which surrounded the creditor-barons.</p> + +<p>The unprejudiced observer can not fail to perceive that the $370,000,000 +coined under the Limited Coinage Act of the United States +of 1878, supplementing the gold stock of the western world, postponed +great industrial and financial crises. But the elements of +these crises are gathering, and, unless relief be soon forthcoming, +will burst upon the world with crushing severity.</p> + + +<p class="caption">DEMONETIZATION IN THE UNITED STATES.</p> + +<p>If we are surprised that the sordid selfishness of the privileged +classes of Europe should have induced them to perpetrate so gross an +act of injustice, we are reminded that the legislation of monarchical +countries has usually been controlled in the interest of the privileged +classes. But what shall be said in defense of the demonetization of +silver by the United States? No such stupendous act of folly and +injustice was ever before perpetrated by the representatives of a +free people.</p> + +<p>Our position differed materially from that of Great Britain. This +was not a creditor nation. Our people did not, and do not, own thousands +of millions of dollars of foreign bonds, on which to receive semi-annual +interest in a constantly appreciating money, which would +have to be paid from the current earnings of foreign labor. Instead, +therefore, of our demonetization unjustly enriching our creditor-classes +at the expense of foreigners, it enabled the creditors at home +here to rob and despoil the debtors among their own countrymen. +Instead of despoiling the Canadian, the Australian, the East Indian, +the Egyptian, or the Turk, the spoliation arranged for by our adoption +of the gold standard was a spoliation of the debtors in our own +communities. In so far, however, as our debt was held abroad, it +provided for a spoliation of our citizens by the foreign bondholders +also. And as nearly all our public debt was so held, we had presented +to us in 1873 the extraordinary spectacle of representatives, +sent here to enact laws for the welfare and advancement of our own +people, devoting all their energies, whether aware of it or not, to +the upbuilding of the fortunes of the moneyed aristocracies of other +countries, at the expense of the producers of the United States.</p> + + +<p class="caption">CONDITION OF THE COUNTRY AT THE TIME.</p> + +<p>Consider for a moment the condition of this country at the time +when this amazing piece of legislation was enacted.</p> + +<p>The Republic was but just recovering from an exhausting war, +which loaded it with a national debt approaching $3,000,000,000. +There were also State, county, city, and town debts aggregating +many more thousands of millions, with railroad and other corporate +bonds and debts aggregating yet other thousands of millions and +private debts of indefinite and unascertainable amount, represented +largely by mortgages on real estate. This constituted an aggregate +whose burden might naturally be presumed to be sufficient to tax +all the resources of the people. Although some portion of those +debts has been liquidated and the national bonds have been refunded +at lower rates of interest, yet we all know that in this age all municipal +and corporate debts, if not national debts, are practically perpetual. +No sooner is one form of bond liquidated than another takes +its place; no sooner is one public improvement completed than another +is begun.</p> + +<p>At the time silver was demonetized it might well have been sup<span class='pagenum'><a name="Page_p027" id="Page_p027">[27]</a></span>posed +that a sufficiently large unearned increment had already been +realized by the foreign and domestic holders of United States bonds. +The greater portion of the debt of the Government was, when incurred, +made payable simply in "lawful money"—the interest alone +being payable in coin. Yet in March, 1869, the bond-holders secured +the passage of an act of Congress, entitled "An act to strengthen the +public credit," containing a pledge to pay in coin or its equivalent +not merely the interest, but the principal of all national obligations +not specially provided to be paid otherwise.</p> + + +<p class="caption">THE COURSE OF THE CREDITORS.</p> + +<p>And again, when in 1870 Congress was about to provide for a refunding +of the public debt, these clamorous creditors, not satisfied +with having got the bonds at rates much below their face value, and +not satisfied with the pledge to pay in coin—a pledge made long +after the contract was made and the debt incurred—insisted that +not only should the new bonds be payable in coin, but in order to +guard against any possible interpretation which might work to their +detriment they did what has rarely been done in the history of monetary +legislation, insisted that even the very <i>standard</i> of that coin +should be fixed and nominated in the bond. They were willing to take +no chances. They were not willing to place confidence in the sense +of equity and fair dealing of the people of the United States. They +held before Congress the covert threat that if the new issue of bonds +did not provide for payment in "coin," instead of "lawful money," +and did not prescribe the precise standard of coin in which they +were to be payable, it would be difficult if not impossible to place +the bonds on the market.</p> + +<p>So, by the refunding act of July 14, 1870, Congress provided for +the payment in "coin of the present standard value," that is to say, +in either gold dollars of 25.8 grains of gold, nine-tenths fine, or in +silver dollars of 412½ grains of silver, nine-tenths fine, at the option +of the United States. But even this extreme advantage to the creditors +over payment in "lawful money" of the United States, in which +the bonds were bought, and in which they were legally payable, was +insufficient. All but the most ingenious would imagine that having +thus provided for payment in coin then bearing a considerable premium +over the current money of the Republic, and having the very +standard of that coin fixed in the act, the highest point of vantage +had been reached. One device, however, and only one, remained by +which the money of the payment could be still further increased in +value, and this device did not escape the watchful eye or cunning +hand of the public creditors.</p> + +<p>They clearly saw that if by legislative enactment they could secure +the rejection of one of the money-metals they would succeed +in enormously increasing the value of the metal retained. This they +accomplished by the demonetization of silver, and thus by striking +down one-half the automatic money of the world and devolving the +money function exclusively on the other half, added thousands of +millions of dollars to the burden of the debt.</p> + + +<p class="caption">THE PRETENSE TO "STRENGTHEN THE PUBLIC CREDIT."</p> + +<p>It will be observed that this anxiety to strengthen the public +credit was evinced by the bondholders <i>after</i> and not before the +bonds were in their possession. No anxiety for the public credit +was manifested by them at a time when the Government might be +able to reap advantage from it. The Government having parted<span class='pagenum'><a name="Page_p028" id="Page_p028">[28]</a></span> +with the bonds at a heavy discount, their selling price in the market +became a matter of no direct pecuniary importance to the people of +the United States.</p> + +<p>The "strengthening of the public credit" that was to be effected +by the act of March 16, 1869, consisted of a rise in the price of the +bonds for the benefit of the holder, at a time when they were no +longer the property of the Government but of private individuals. +The real effect of the act, therefore, was not in any way to benefit +the Government but greatly to enrich, by an increment unearned +and unbargained for, a few men who had already been greatly enriched +by their dealings with the United States. The title of the +act should have read "An act to strengthen the bank account and +credit of the holders of United States bonds."</p> + +<p>The excuse and apology for the act was that by its passage the refunding +process then contemplated, and afterward provided for by +the refunding act of 1870 might be rendered more certain of success; +but if any advantage accrued from that cause, it was lost, and much +more with it, by the increase which the act of 1869 effected in the +burden of the bonded obligation, by pledging the nation to a payment +in a medium much more valuable than the medium provided +for in the contract. And, again, in 1873 when all the bonds provided +for by the refunding act of 1870 had been sold and had passed out of +the hands of the Government, another act was passed, intended by the +money-lenders again to strengthen the public credit, and 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 and amending the laws relative to the mints, assay offices, +and coinage of the United States." This act, bearing on its face +no suggestion of any change more serious than that of regulating the +petty details of mint management, has proved to be an act of momentous +consequence to the people of this country. This is the act +that demonetized the silver dollar, which it did by merely omitting +that coin from the enumeration of the coins of the United States.</p> + + +<p class="caption">DEMONETIZATION WHOLLY UNJUSTIFIABLE.</p> + +<p>Among all the explanations that have been made to account for +that demonetization by a Congress of the United States, I have +never heard any reason advanced which constituted a justification +for it. To my mind, in view of all the circumstances—in the face of +the herculean difficulties by which the nation was surrounded, in +the face of the sacrifices which our citizens had made to preserve +the Republic, and in the face of all that had already been done by an +over-generous people, proud of their national strength, and jealous +of their national honor, to satisfy the rapacious demands of the +money-lenders—in view, I say, of all these facts, the demonetization +of silver by the United States must be regarded as one of those historic +blunders that are worse than crimes. It was the child of Ignorance +and Avarice, and is already the prolific parent of enforced +idleness, poverty, and misery.</p> + +<p>It is to undo as far as possible the effects of the blunder of 1873 +that new legislation is now imperatively demanded by the people. +While the past can not be recalled, the present is ours, and the +pressing duty of to-day is to provide for the future. The demand +comes from all sections of the country that a remedy for the depressed +industrial conditions caused by the legislation of 1873, be +applied at the earliest moment. And what better remedy could +be applied than absolutely to reverse that legislation and to put the<span class='pagenum'><a name="Page_p029" id="Page_p029">[29]</a></span> +monetary position of this country back to exactly where it was when +that wrong was committed?</p> + +<p>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 authorized +the coinage of not less than two nor more than four million dollars' +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 remonetize silver or +to increase the silver coinage was vigorously opposed, but the arguments +then presented by the advocates of remonetization never have +been, and never can be, refuted.</p> + +<p>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 in sixteen years in answer to the +contentions they have made in favor of the remonetization of silver.</p> + + +<p class="caption">EDUCATIONAL EFFECT OF DISCUSSION.</p> + +<p>With that debate, Mr. President, long pending and eagerly maintained +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 our people to-day—the +farmers and artisans of the country—after years of reflection and discussion +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 derided +by the advocates of contraction and of gold.</p> + +<p>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 success. +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 literary +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.</p> + +<p>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.</p> + +<p>I will read a cable dispatch recently addressed to me by Mr. Henry +H. Gibbs, formerly governor of the Bank of England, and now president +of the Bimetallic League of Great Britain:</p> + +<div class="blockquot"><p><span class="smcap">London</span>, <i>May</i> 6.—The friends of silver deeply regret the death of Senator Beck, +whose services in the cause of monetary reform are warmly appreciated on +this side of the Atlantic. The bimetallist party of the 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. We fully +recognize not only that the support afforded to silver by your legislation during +the last twelve years has helped the protect the industrial world from an acute monetary +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<span class='pagenum'><a name="Page_p030" id="Page_p030">[30]</a></span> +also that the increase and coinage of silver contemplated by Congress will restore, +wholly or considerably, your coinage rates, and will thus make international settlement +of this complex question comparatively easy. We anticipate further and +with much confidence, that the advance in the price of silver which must follow +your action will stimulate both the export and the other trades of your country, +and, while tending to the prosperity of your agricultural classes, will also assist +the manufacturing industries of the United Kingdom and the whole body of our +wage-earners.</p></div> + +<p>Mr. Moreton Frewen, of London, an able writer on economic +subjects, whose recent work on the "The Economic Crisis" I commend +to the careful perusal of Senators, says:</p> + +<div class="blockquot"><p>It may, indeed, be affirmed, without fear of contradiction, that legislation arranged +in the interest of a certain class, first by Lord Liverpool in this country, +and again by Sir Robert Peel at the instigation of Mr. Jones Loyd and other wealthy +bankers, which was supplemented recently by simultaneous anti-silver legislation +in Berlin and Washington at the instance of the great financial houses—this +legislation has about doubled the burden of all national debts by an artificial +enhancement of the value of money.</p> + +<p>The fall of all prices induced by this cause has been on such a scale that while +in twenty years the National debt of the United States quoted in dollars has been +reduced by nearly two-thirds, yet the value of the remaining one-third, measured +in wheat, in bar iron, or bales of cotton, is considerably greater—is a greater +demand draft on the labor and industry of the nation than was the whole debt at +the time it was contracted. The aggravation of the burdens of taxation induced +by this so-called "appreciation of gold," which is no natural appreciation, but has +been brought about by class legislation to increase the value of the gold which is +in a few hands, requires but to be explained to an enfranchised democracy, +which will know how to protect itself against further attempts to contract the +currency and to force down prices to the confusion of every existing contract.</p> + +<p>Of all classes of middle-men, bankers have been by far the most successful in +intercepting and appropriating an undue share of produced wealth. While the +modern system of banking and credit may be said to be even yet in its infancy, +that portion of the assets of the community which is to-day in the strong boxes +of the bankers would, if declared, be an astounding revelation of the recent +profits of this particular business; and not only has the business itself become a +most profitable monopoly, but its interests in a very few hands are diametrically +opposed to the general interests of the majority. By legislation intended to contract +the currency and force down all prices, including wages, the price paid for +labor, the money owner has been able to increase the purchase power of his sovereign +or dollar by the direct diminution of the price of every kind of property +measured in money.</p></div> + + +<p class="caption">UNFULFILLED PROPHECIES.</p> + +<p>During the debate on the limited coinage bill, not content with +abuse of the advocates of the measure; with flimsy criticism of it +and specious arguments against it, its opponents in and out of Congress +indulged in diverse prophecies and predictions. They pictured +forth the lamentable results that would follow its passage, and the +direful consequences that would ensue from an increase of the circulating +medium of the country. Among the results confidently predicted +were the following: that the silver would not circulate at +all, and again that it would circulate to the exclusion of gold, which +metal, we were informed, would flow out of this country with a velocity +and in a volume theretofore unknown; that we should be unable +to redeem our paper money in gold; that we should be precipitated +into a silver vortex; that an inflation of the currency would follow, +which would ruinously raise prices of all commodities and that this +inflation would result in an unprecedented contraction. We were +charged with forcing upon the public creditors a dollar worth only +ninety cents. We were warned that the passage of the bill would +indefinitely postpone the refunding of the public debt, and would +lower the price and impair the value of our national securities. It +was charged that we were setting on foot a new and irrepressible +conflict between two great sections of the country—the East and +the West. We were charged with uttering a debased coin; with<span class='pagenum'><a name="Page_p031" id="Page_p031">[31]</a></span> +lowering the standard of American credit; with tarnishing the +integrity and honor of our country before foreign nations, and with +unprecedented moral turpitude in setting an example of flagrant and +shameless national dishonesty.</p> + +<p>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, because, +as was charged, their constituents, if not themselves, were directly +interested in the restoration of the ancient right of silver to full +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.</p> + +<p>These prophecies of disaster were united in by the professors of political +economy in all the Eastern colleges, by the President of the +United States, by the Secretary of the Treasury, by the leading American +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.</p> + +<p>And now, Mr. President, how many of all those alarming prognostications +by all these distinguished prophets have been fulfilled? +Not one! On the contrary, it is not too much to say that the public +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.</p> + +<p>But it is hardly necessary to assert that the predicted inflation of +prices has not been observed as a consequence of the coinage 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 untold +disaster.</p> + +<p>But the result which gave most apprehension to those who advocated +the gold standard, the evil which they regarded as on the 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 provided +for, was the outflow of gold. They ridiculously under-estimated +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 notoriously +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 been $213,199,977, 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 circulation and in the Treasury being +reported as $689,000,000.</p> + +<p>"Experience," says Dr. Johnson, "is the great test of truth, and +is perpetually contradicting the theories of men," and the last experience, +Mr. President, is the best.</p> + +<p>If the professors of political economy, the Eastern newspaper editors, +and the professional financiers were then so seriously mistaken<span class='pagenum'><a name="Page_p032" id="Page_p032">[32]</a></span> +ought they not to be a little modest now in making predictions, especially +in renewing predictions that have been already discredited? +They can not point to a single instance in which their prophesy has +not been falsified by the event. So humiliating a failure on the part +of the professors, in a realm of which they boastfully claimed to be +masters, so complete an overthrow of these "experts" by men who +were ridiculed and derided as rural financiers and crazy theorists, +ought to put the advocates of the gold standard on their guard +against a like defeat on this occasion. They are pressed for reasons +to account for the utter miscarriage of their prophecies. They are +left without a shadow of consolation except that the coinage of +$2,000,000 worth of silver bullion each month has not succeeded in +placing silver at a par with gold. They affect to believe that the +advocates of silver in 1878 expected that that metal, under the very +limited demand of $2,000,000 a month, would be brought to a level +with gold, which, owing to the demonetization of silver, had risen +abnormally and ruinously in value.</p> + +<p>No such belief was ever entertained or expressed. On the contrary +it was repeatedly asserted by the advocates of silver that so long +as the entire yield of gold from all the mines of the world (in 1878, +$119,000,000) was invested with the full money function and had free +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 comparatively +trifling as one-fourth the yield of silver (the yield in 1878 +being $99,000,000) would have the effect of placing it on a level with +gold.</p> + +<p>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. +Nay, more, silver bullion—disparaged and discredited as it is by being +shorn of the money function, and denied access to the mints, instead +of decreasing in purchasing power, has maintained so steady a relation +to commodities that 412½ grains of uncoined silver will exchange +for as much to-day as would the coined dollar, whether of silver or +gold, in 1873, when the full money function attached equally to both +metals. If this be true—and I shall presently demonstrate it beyond +refutation—what an utter perversion of terms it is to say that silver +has fallen in value!</p> + + +<p class="caption">WILL REMONETIZATION PLACE US ALONGSIDE INDIA.</p> + +<p>We are solemnly warned that the full remonetization of silver in the +United States would place us alongside India and the other barbarous +countries of the world. This brilliant piece of reasoning is advanced +with great confidence, and is intended to be conclusive of the argument +against silver. But, Mr. President, India is no more barbarous +now than it was in 1873—before our silver dollar was demonetized. +India is no more barbarous now than it was in 1857, when Germany +demonetized gold and placed herself "alongside" India. Neither is +Germany any more civilized now than then. We did not at that +time hear any complaint, either in the United States or Europe, +that the use of silver as money placed any one nation more than any +other in dangerous affiliation with the civilization of India. We +have never heard it charged against France that its civilization was +brought any nearer that of India by the immense quantity of silver +money in France. Neither did we hear it charged against the United +States up to 1873 that we were "alongside," or dangerously close to +the barbarous nations by our use of silver as money.<span class='pagenum'><a name="Page_p033" id="Page_p033">[33]</a></span></p> + +<p>Up to 1834 we had no metallic money other than silver in our circulation, +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 our 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 all 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 condition +of the people?</p> + +<p>On the contrary, the history of the time informs us that as a consequence +of the passage of the bill by Parliament in 1819, compelling +payments in gold, prices rapidly fell, cotton in particular sinking +in the short space of three months to one-half its former level. Within +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 by 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 land in England, +who in 1819 numbered 160,000 were in seven years, by forced sales +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 +number. The condition of industry and disorganization of labor led +to frequent and serious conflicts between the people and the military. +They also led to commercial crises without number, and England, +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.</p> + +<p>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 universally +admitted, made progress by leaps and bounds. No country +on earth has in the same time made such advances in material prosperity +and in all the elements that conduce to the comfort and happiness +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<span class='pagenum'><a name="Page_p034" id="Page_p034">[34]</a></span> +demonetization, been transferred to fields of wheat, and fields and +factories of cotton 10,000 miles distant.</p> + +<p>What really placed us 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 +30 per cent. 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 purchasing +power of the rupee in India. This was equivalent to buying +wheat at 30 per cent. below the price theretofore paid for it, and +thus 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 +is this competition that placed them "alongside" India. The farmer +of this country, therefore, by demonetization of silver, was compelled +to compete with under-paid and half-starved ryots. And so it was +that our cotton planters, by the demonetization of silver, were +placed alongside the barbarous people of India. It is this degrading +competition that places a highly civilized people alongside a barbarous +one.</p> + +<p>The advocates of the single gold standard deem even silver money +much better money than greenbacks. Does it then follow that when +greenbacks were our only money—good enough money to carry the +nation through the greatest war in all history—we were "alongside" +or underneath the barbarous nations of the world? It is not the +form, or the material of a nation's money that fixes its status 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, except +by compelling our people to compete with barbarous peoples—compelling +them to sell the products of American labor at prices regulated +by the cost of labor and manner of living in barbarous countries. +As well might it be said that we are alongside the barbarous +people of India because we continue to produce wheat and cotton.</p> + +<p>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 placed +alongside a barbarous one when, in their means of livelihood, the +foundation of their civilization, they are made to compete with the +barbarians. That was the result accomplished for the farmers and +planters of the United States when silver was demonetized.</p> + + +<p class="caption">CREDITORS AND DEBTORS.—A COMPARISON OF MOTIVES.</p> + +<p>All movements for the increase of the monetary circulation are +ascribed by the money-lenders and creditor classes to the unworthy +desire on the part of the debtors to escape their just obligations. +But if motives are to be brought in question, the rule should work +both ways. No note is taken of the motive of the creditor classes in +securing a contraction of the circulation. Whatever the apparent +purpose of contraction, and however specious the arguments advanced +in its justification, the real object has always been to increase +the purchasing power of money. In all countries, and throughout all +time, it is the cupidity of the creditor classes and annuitants, and +their desire to increase the value of the money unit that has brought +about a shrinkage in the money volume. Unlike the great masses of +the people, who were ignorant of the effects to be naturally expected +from such a shrinkage, the annuitants and moneyed men very well +understood that the value of every pound or dollar depended on the<span class='pagenum'><a name="Page_p035" id="Page_p035">[35]</a></span> +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.</p> + +<p>Loaners of capital are not usually those who entertain further hope +of personal achievement. When men 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 adventure is restrained. The realization of a fortune is +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 ease, and society +must look, for its material progress and development, to those who +have a career to make, with the ambition and the power to make it.</p> + +<p>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 society, +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 advantage +over the lender of money, but of preventing the unconscionable +injustice of a further increasing value in the dollars +which the debtor contracted to pay. Loud and resounding protests +have been entered against the "dishonesty" of making payments +in "depreciated dollars." The debtors are characterized as +dishonest for desiring to keep money at a steady and unwavering +value. If that object could be secured, it would undoubtedly be +to the interest of the debtor, and could not possibly work any injustice +to the creditor. It would simply assure to both debtor and +creditor the exact measure for which they bargained. It would enable +the debtor to pay his debt with exactly the amount of sacrifice +to which, on the making of the debt, he undertook to submit, in +order to pay it.</p> + + +<p class="caption">WHO ARE THE DEBTORS?</p> + +<p>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 century +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 calculation, +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.</p> + +<p>These men are sustained in their efforts by the hope and belief that +their labors will be crowned with success. Destroy that hope and<span class='pagenum'><a name="Page_p036" id="Page_p036">[36]</a></span> +you take away from society the most powerful of all the incentives to +material development; you place in the pathway of progress an obstacle +which it is impossible to surmount.</p> + +<p>The men of whom I have spoken are undoubtedly the first who are +likely to be affected by a shrinkage in the volume of money.</p> + +<p>The highest prosperity of a nation is attained only when all its +people are employed in avocations suited to their individual aptitudes, +and when a just money system insures an equitable distribution +of the products of their industry. With our present complex +civilization, in order that men may have constant employment, it is +indispensable that work be planned and undertakings projected +years in advance. Without an intelligent forecast of enterprises +large numbers of workmen must periodically be relegated to idleness. +Enterprises that take years to complete must be contracted +for in advance, and payments provided for.</p> + +<p>A constant but unperceived rise in the value of the dollar with +which those payments must be made, baffles all plans, thwarts all +calculation, and destroys all equities between debtor and creditor. +If we can not intelligently regulate our money volume so as to +maintain unchanging the value of the money unit, if we can not +preserve our people from the blighting effects which an increase in +the measuring power of the money unit entails upon all industry, to +what purpose is our boasted civilization?</p> + +<p>By the increase of that measuring power all hopes are disappointed, +all purposes baffled, all efforts thwarted, all calculations +defied. This subtle enlargement in the measuring power of the +unit of money (the dollar) affects every class of the working community. +Like a poisonous drug in the human body, it permeates +every vein, every artery, every fiber and filament of the industrial +structure. The debtor is fighting for his life against an enemy he +does not see, against an influence he does not understand. For, +while his calculations were well and intelligently made, and the +amount of his debts and the terms of his contracts remain the same, +the weight of all his obligations has been increased by an insidious +increase in the value of the money unit.</p> + + +<p class="caption">EFFECTS OF A SHRINKING VOLUME OF MONEY.</p> + +<p>As to the benumbing consequences following a shrinkage in the +volume of money, the testimony of history is briefly reviewed in the +report of the Monetary Commission to which I have already referred, +and from which I read the following:</p> + +<div class="blockquot"><p>At the Christian era the metallic money of the Roman Empire amounted to +$1,800,000,000. By the end of the fifteenth century it had shrunk to less than +$200,000,000. During this period a most extraordinary and baleful change took +place in the condition of the world. Population dwindled and commerce, arts, +wealth, and freedom all disappeared. The people were reduced by poverty and +misery to the most degraded conditions of serfdom and slavery. The disintegration +of society was almost complete. The conditions of life were so hard that +individual selfishness was the only thing consistent with the instinct of self-preservation. +All public spirit, all generous emotions, all the noble aspirations of +man shriveled and disappeared as the volume of money shrunk and as prices +fell.</p> + +<p>History records no such disastrous transition as that from the Roman Empire +to the Dark Ages. Various explanations have been given of this entire breaking +down of the frame-work of society, but it was certainly coincident with a shrinkage +in the volume of money, which was also without historical parallel. The +crumbling of institutions kept even step and pace with the shrinkage in the stock +of money and the falling of prices. All other attendant circumstances than these +last have occurred in other historical periods unaccompanied and unfollowed by +any such mighty disasters. It is a suggestive coincidence that the first glimmer +of light only came with the invention of bills of exchange and paper substitutes, +through which the scanty stock of the precious metals was increased in efficiency. +But not less than the energizing influence of Potosi and all the argosies of +treas<span class='pagenum'><a name="Page_p037" id="Page_p037">[37]</a></span>ure from the New World were needed to arouse the Old World from its comatose +sleep, to quicken 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 links, 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 recovery +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 civilization, +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.</p> + +<p>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 out. +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 increased +between 1809 and 1848 fully 145 per cent., or, in other words, that the general +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 fluctuation +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.</p> + +<p>The world has rarely passed through a more gloomy period than this one. Again +do we find falling prices and misery and destitution inseparable companions. The +poverty and distress of the industrial masses were intense and universal, and, since +the discovery of the mines of America, without a parallel. In England the suffering +of the people found expression in demands upon Parliament for relief, in +bread riots, and in immense Chartist demonstrations. The military arm of the +nation had to be strengthened to prevent the all-pervading discontent from ripening +into open revolt. On the Continent the fires of revolution smoldered everywhere, +and blazed out at many points, threatening the overthrow of states and +the subversion of social institutions.</p> + +<p>Whenever and wherever the mutterings of discontent were hushed by the fear +of increased standing armies, the foundations of society were honey-combed by +powerful secret political associations. The cause at work to produce this state +of things was so subtle, 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 employer. +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 condition +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. They did not comprehend that +money in shrinking volume was the prolific parent of enforced idleness and poverty, +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.</p> + +<p>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 of 1848.</p> + +<p>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 decreasing +volume of money. The decrease of the yield of the mines since about 1865, +while population and commerce have been advancing, has already produced unmistakable +symptoms of the same general distrust, non-employment of labor, and +political and social disquiet, which have characterized all former periods of shrinking +money.</p></div> +<p><span class='pagenum'><a name="Page_p038" id="Page_p038">[38]</a></span></p> + +<p>The time that has elapsed since that report was written has but +served to verify and emphasize its statements.</p> + + +<p class="caption">THE FALL OF PRICES SINCE 1873.</p> + +<p>It is a fact not disputed anywhere but universally admitted, that +for many years past the prices of all articles entering into general +consumption among the people have been steadily falling. It is +obvious that the industrial conditions prevailing since 1873 are but +a repetition of those above described as following 1809—with falling +prices, constant unrest, and universal discontent.</p> + +<p>The following table, compiled from figures published by the Bureau +of Statistics of the Treasury Department, shows the average +range of export prices of the articles named for each year since 1873:</p> + +<p class="caption"><i>Annual average export prices of commodities of domestic production for +each year from 1873 to 1889, inclusive.</i></p> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr> +<th class='bbox'>Year ending<br />June, 30—</th> +<th class='bbox'>Corn per<br />bushel.</th> +<th class='bbox'>Wheat per<br />bushel.</th> +<th class='bbox'>Wheat flour<br />per barrel.</th> +<th class='bbox'>Cotton<br />(upland)<br />per pound.</th> +<th class='bbox'>Leather<br />per pound.</th> +<th class='bbox'>Illuminating<br />oils, refined,<br />per gallon.</th> +<th class='bbox'>Bacon<br />and hams<br />per pound.</th> +<th class='bbox'>Lard<br />per pound.</th> +</tr> +<tr><td align='center'></td><td align='center'><i>Dollars.</i></td><td align='center'><i>Dollars.</i></td><td align='center'><i>Dollars.</i></td><td align='center'><i>Cents.</i></td><td align='center'><i>Cents.</i></td><td align='center'><i>Cents.</i></td><td align='center'><i>Cents.</i></td><td align='center'><i>Cents.</i></td></tr> +<tr><td align='left'>1873</td><td align='right'> .618</td><td align='right'> 1.312</td><td align='right'> 7.565</td><td align='right'> 18.8</td><td align='right'> 25.3</td><td align='right'> 23.5</td><td align='right'> 8.8</td><td align='right'> 9.2</td></tr> +<tr><td align='left'>1874</td><td align='right'> .719</td><td align='right'> 1.428</td><td align='right'> 7.144</td><td align='right'> 15.4</td><td align='right'> 25.2</td><td align='right'> 17.3</td><td align='right'> 9.6</td><td align='right'> 9.4</td></tr> +<tr><td align='left'>1875</td><td align='right'> .848</td><td align='right'> 1.124</td><td align='right'> 5.968</td><td align='right'> 15.0</td><td align='right'> 26.0</td><td align='right'> 14.1</td><td align='right'> 11.4</td><td align='right'> 13.8</td></tr> +<tr><td align='left'>1876</td><td align='right'> .672</td><td align='right'> 1.242</td><td align='right'> 6.216</td><td align='right'> 12.9</td><td align='right'> 26.2</td><td align='right'> 14.0</td><td align='right'> 12.1</td><td align='right'> 13.3</td></tr> +<tr><td align='left'>1877</td><td align='right'> .587</td><td align='right'> 1.169</td><td align='right'> 6.488</td><td align='right'> 11.8</td><td align='right'> 23.9</td><td align='right'> 21.1</td><td align='right'> 10.8</td><td align='right'> 10.9</td></tr> +<tr><td align='left'>1878</td><td align='right'> .562</td><td align='right'> 1.338</td><td align='right'> 6.358</td><td align='right'> 11.1</td><td align='right'> 21.8</td><td align='right'> 14.4</td><td align='right'> 8.7</td><td align='right'> 8.8</td></tr> +<tr><td align='left'>1879</td><td align='right'> .471</td><td align='right'> 1.068</td><td align='right'> 5.252</td><td align='right'> 9.9</td><td align='right'> 20.4</td><td align='right'> 10.8</td><td align='right'> 6.9</td><td align='right'> 7.0</td></tr> +<tr><td align='left'>1880</td><td align='right'> .543</td><td align='right'> 1.245</td><td align='right'> 5.878</td><td align='right'> 11.5</td><td align='right'> 23.3</td><td align='right'> 8.6</td><td align='right'> 6.7</td><td align='right'> 7.4</td></tr> +<tr><td align='left'>1881</td><td align='right'> .552</td><td align='right'> 1.114</td><td align='right'> 5.668</td><td align='right'> 11.4</td><td align='right'> 22.6</td><td align='right'> 10.3</td><td align='right'> 8.2</td><td align='right'> 9.3</td></tr> +<tr><td align='left'>1882</td><td align='right'> .668</td><td align='right'> 1.185</td><td align='right'> 6.149</td><td align='right'> 11.4</td><td align='right'> 20.9</td><td align='right'> 9.1</td><td align='right'> 9.9</td><td align='right'> 11.6</td></tr> +<tr><td align='left'>1883</td><td align='right'> .684</td><td align='right'> 1.127</td><td align='right'> 5.955</td><td align='right'> 10.8</td><td align='right'> 21.1</td><td align='right'> 8.8</td><td align='right'> 11.2</td><td align='right'> 11.9</td></tr> +<tr><td align='left'>1884</td><td align='right'> .611</td><td align='right'> 1.066</td><td align='right'> 5.588</td><td align='right'> 10.5</td><td align='right'> 20.6</td><td align='right'> 9.2</td><td align='right'> 10.2</td><td align='right'> 9.5</td></tr> +<tr><td align='left'>1885</td><td align='right'> .540</td><td align='right'> .862</td><td align='right'> 4.897</td><td align='right'> 10.6</td><td align='right'> 19.8</td><td align='right'> 8.7</td><td align='right'> 9.2</td><td align='right'> 7.9</td></tr> +<tr><td align='left'>1886</td><td align='right'> .498</td><td align='right'> .870</td><td align='right'> 4.699</td><td align='right'> 9.9</td><td align='right'> 19.9</td><td align='right'> 8.7</td><td align='right'> 7.5</td><td align='right'> 6.9</td></tr> +<tr><td align='left'>1887</td><td align='right'> .479</td><td align='right'> .890</td><td align='right'> 4.510</td><td align='right'> 9.5</td><td align='right'> 18.7</td><td align='right'> 7.8</td><td align='right'> 7.9</td><td align='right'> 7.1</td></tr> +<tr><td align='left'>1888</td><td align='right'> .550</td><td align='right'> .853</td><td align='right'> 4.579</td><td align='right'> 9.8</td><td align='right'> 17.3</td><td align='right'> 7.9</td><td align='right'> 8.6</td><td align='right'> 7.7</td></tr> +<tr><td align='left'>1889</td><td align='right'> .474</td><td align='right'> .897</td><td align='right'> 4.832</td><td align='right'> 9.9</td><td align='right'> 16.6</td><td align='right'> 7.8</td><td align='right'> 8.6</td><td align='right'> 8.6</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> + +<tr> +<th class='bbox'>Year ending<br />June 30—</th> +<th class='bbox'>Pork, salted,<br />per pound.</th> +<th class='bbox'>Beef, salted,<br />per pound.</th> +<th class='bbox'>Butter<br />per pound.</th> +<th class='bbox'>Cheese<br />per pound.</th> +<th class='bbox'>Eggs per<br />dozen.</th> +<th class='bbox'>Starch<br />per pound.</th> +<th class='bbox'>Sugar, refined,<br />per pound.</th> +<th class='bbox'>Tobacco, leaf,<br />per pound.</th> +</tr> +<tr><td align='center'></td><td align='center'> <i>Cents.</i></td><td align='center'> <i>Cents.</i></td><td align='center'> <i>Cents.</i></td><td align='center'><i>Cents.</i></td><td align='center'><i>Cents.</i></td><td align='center'><i>Cents.</i></td><td align='center'><i>Cents.</i></td><td align='center'><i>Cents.</i></td></tr> +<tr><td align='left'>1873</td><td align='right'> 7.8</td><td align='right'> 7.7</td><td align='right'> 21.1</td><td align='right'> 13.1</td><td align='right'> 26.6</td><td align='right'> 5.3</td><td align='right'> 11.6</td><td align='right'> 10.7</td></tr> +<tr><td align='left'>1874</td><td align='right'> 8.2</td><td align='right'> 8.2</td><td align='right'> 25.0</td><td align='right'> 13.1</td><td align='right'> 22.1</td><td align='right'> 5.7</td><td align='right'> 10.5</td><td align='right'> 9.6</td></tr> +<tr><td align='left'>1875</td><td align='right'> 10.1</td><td align='right'> 8.7</td><td align='right'> 23.7</td><td align='right'> 13.5</td><td align='right'> 25.6</td><td align='right'> 6.0</td><td align='right'> 10.8</td><td align='right'> 11.3</td></tr> +<tr><td align='left'>1876</td><td align='right'> 10.6</td><td align='right'> 8.7</td><td align='right'> 23.9</td><td align='right'> 12.6</td><td align='right'> 28.0</td><td align='right'> 5.4</td><td align='right'> 10.7</td><td align='right'> 10.4</td></tr> +<tr><td align='left'>1877</td><td align='right'> 9.0</td><td align='right'> 7.5</td><td align='right'> 20.6</td><td align='right'> 11.8</td><td align='right'> 25.9</td><td align='right'> 5.2</td><td align='right'> 11.6</td><td align='right'> 10.2</td></tr> +<tr><td align='left'>1878</td><td align='right'> 6.8</td><td align='right'> 7.7</td><td align='right'> 18.0</td><td align='right'> 11.4</td><td align='right'> 15.8</td><td align='right'> 4.7</td><td align='right'> 10.2</td><td align='right'> 8.7</td></tr> +<tr><td align='left'>1879</td><td align='right'> 5.7</td><td align='right'> 6.3</td><td align='right'> 14.2</td><td align='right'> 8.9</td><td align='right'> 15.5</td><td align='right'> 4.2</td><td align='right'> 8.5</td><td align='right'> 7.8</td></tr> +<tr><td align='left'>1880</td><td align='right'> 6.1</td><td align='right'> 6.4</td><td align='right'> 17.1</td><td align='right'> 9.5</td><td align='right'> 16.5</td><td align='right'> 4.3</td><td align='right'> 9.0</td><td align='right'> 7.7</td></tr> +<tr><td align='left'>1881</td><td align='right'> 7.7</td><td align='right'> 6.5</td><td align='right'> 19.8</td><td align='right'> 11.1</td><td align='right'> 17.2</td><td align='right'> 4.7</td><td align='right'> 9.2</td><td align='right'> 8.3</td></tr> +<tr><td align='left'>1882</td><td align='right'> 9.0</td><td align='right'> 8.5</td><td align='right'> 19.3</td><td align='right'> 11.0</td><td align='right'> 19.2</td><td align='right'> 4.8</td><td align='right'> 9.7</td><td align='right'> 8.5</td></tr> +<tr><td align='left'>1883</td><td align='right'> 9.9</td><td align='right'> 8.9</td><td align='right'> 18.6</td><td align='right'> 11.2</td><td align='right'> 20.9</td><td align='right'> 4.6</td><td align='right'> 9.2</td><td align='right'> 8.6</td></tr> +<tr><td align='left'>1884</td><td align='right'> 7.9</td><td align='right'> 7.6</td><td align='right'> 18.2</td><td align='right'> 10.3</td><td align='right'> 21.2</td><td align='right'> 4.5</td><td align='right'> 7.1</td><td align='right'> 9.1</td></tr> +<tr><td align='left'>1885</td><td align='right'> 7.2</td><td align='right'> 7.5</td><td align='right'> 16.8</td><td align='right'> 9.3</td><td align='right'> 21.5</td><td align='right'> 4.0</td><td align='right'> 6.4</td><td align='right'> 9.9</td></tr> +<tr><td align='left'>1886</td><td align='right'> 5.9</td><td align='right'> 6.0</td><td align='right'> 15.6</td><td align='right'> 8.2</td><td align='right'> 18.3</td><td align='right'> 4.1</td><td align='right'> 6.7</td><td align='right'> 7.8</td></tr> +<tr><td align='left'>1887</td><td align='right'> 6.6</td><td align='right'> 5.4</td><td align='right'> 15.8</td><td align='right'> 9.3</td><td align='right'> 16.3</td><td align='right'> 3.8</td><td align='right'> 6.0</td><td align='right'> 8.7</td></tr> +<tr><td align='left'>1888</td><td align='right'> 7.4</td><td align='right'> 5.3</td><td align='right'> 18.3</td><td align='right'> 9.9</td><td align='right'> 15.9</td><td align='right'> 3.5</td><td align='right'> 6.3</td><td align='right'> 8.3</td></tr> +<tr><td align='left'>1889</td><td align='right'> 7.4</td><td align='right'> 5.5</td><td align='right'> 16.5</td><td align='right'> 9.3</td><td align='right'> 13.9</td><td align='right'> 3.8</td><td align='right'> 7.6</td><td align='right'> 8.8</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p><span class='pagenum'><a name="Page_p039" id="Page_p039">[39]</a></span></p> + +<p>To show from another source the same general fact of the decline +of prices, I quote from an article published in the New York Tribune +early in 1886.</p> + +<p>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, in my +judgment, been more correctly made than those of any other statistician +in the world. The article is as follows:</p> + +<div class="blockquot"><p>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 corresponding as closely as possible to their ascertained +consumption in 1880, the date of the last census. Among the articles compared +are wheat, corn, oats, rye, barley, beans and pease, mess pork, bacon, ham, live +hogs, lard, fresh beef, tallow, live sheep, poultry, butter, cheese, eggs, milk, hay, +potatoes, turnips, cabbage, onions, apples, raisins, sugar, brown and crushed; molasses, +coffee, tea, tobacco, whisky, malt and hops, mackerel, codfish, salt, rice, +nutmegs, cloves, pepper, cotton, print-cloths and standard sheeting, wool of different +qualities, blankets, carpets, flannels, leather, boots, shoes, hides, silk, India rubber, +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, soap, glass, paper, white lead, and +twelve other kinds of paints, fertilizers, and over fifty kinds of drugs and chemicals.</p> + +<p class="caption"><i>Cost of products at different dates.</i></p> + + +<div class='center'> +<table border="0" cellpadding="2" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox'>Dates.</th><th class='bbox'>Cost in currency.</th><th class='bbox'>Price of gold.</th><th class='bbox'>Cost in gold.</th></tr> +<tr><td align='left'>1860, May 1</td><td align='right'> $100.00</td><td align='right'> $100.00</td><td align='right'> $100.00</td></tr> +<tr><td align='left'>1865, November 1</td><td align='right'> 174.77</td><td align='right'> 145.87</td><td align='right'> 119.81</td></tr> +<tr><td align='left'>1866, May 1</td><td align='right'> 157.60</td><td align='right'> 125.12</td><td align='right'> 126.04</td></tr> +<tr><td align='left'>1866, November 1</td><td align='right'> 170.31</td><td align='right'> 146.25</td><td align='right'> 117.82</td></tr> +<tr><td align='left'>1871, November 1</td><td align='right'> 122.03</td><td align='right'> 112.00</td><td align='right'> 108.95</td></tr> +<tr><td align='left'>1872, May 1</td><td align='right'> 137.13</td><td align='right'> 112.50</td><td align='right'> 121.81</td></tr> +<tr><td align='left'>1873, November 1</td><td align='right'> 115.14</td><td align='right'> 108.50</td><td align='right'> 106.01</td></tr> +<tr><td align='left'>1874, May 1</td><td align='right'> 122.77</td><td align='right'> 112.87</td><td align='right'> 108.77</td></tr> +<tr><td align='left'>1875, January 1</td><td align='right'> 113.01</td><td align='right'> 112.37</td><td align='right'> 100.37</td></tr> +<tr><td align='left'>1876, October 1</td><td align='right'> 97.30</td><td align='right'> 110.00</td><td align='right'> 88.45</td></tr> +<tr><td align='left'>1877, May 1</td><td align='right'> 99.29</td><td align='right'> 106.75</td><td align='right'> 93.01</td></tr> +<tr><td align='left'>1878, May 1</td><td align='right'> 82.09</td><td align='right'> 100.37</td><td align='right'> 81.81</td></tr> +<tr><td align='left'>1878, October 18</td><td align='right'> 77.94</td><td align='right'> 100.37</td><td align='right'> 77.65</td></tr> +<tr><td align='left'>1879, November 1</td><td align='right'> 93.48</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1880, January 1</td><td align='right'> 103.42</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1881, January 1</td><td align='right'> 95.98</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1882, May 16</td><td align='right'> 106.59</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1883, March 13</td><td align='right'> 97.82</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1883, November 1</td><td align='right'> 88.71</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1884, January 1</td><td align='right'> 88.37</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1884, November 21</td><td align='right'> 78.47</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1885, January 1</td><td align='right'> 79.66</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1885, May 9</td><td align='right'> 80.22</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1885, August 22</td><td align='right'> 74.56</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1885, November 1</td><td align='right'> 75.35</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td align='left'>1885, Close</td><td align='right'> 78.53</td><td align='right'> —</td><td align='right'> —</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p>It is not only clear from this comparison that the prices of 1885 have been the +lowest in our history for twenty-five years, but that there has been a general tendency +toward lower prices. From 1866 to 1871, and again from 1872 until 1885, prices +fell quite steadily. Indeed, had not the short crop of 1881 caused a temporary advance +in the spring of 1882, the range of January, 1880, would have been the highest +of the later period, and it might have been said that the present era of declining +prices had continued with little intermission for six years. None will fail to +observe how swift and sharp the advances have been—about 12 per cent. from +November, 1871, to May, 1872, and 25½ per cent. from October, 1878, to January, 1880. +<span class='pagenum'><a name="Page_p040" id="Page_p040">[40]</a></span> +But these spasmodic advances, by which the general tendency downward is interrupted, +only serve to make it more clear that prices have been tending irresistibly +toward a lower level than that of 1860, not only during the period of paper depreciation, +but since gold has been the measure of value.</p></div> + +<p>In order to show that the United States are not alone in their complaint +of falling prices, but that the complaint is universal, and in +order that we may have before us a broad view of the field of general +prices, I submit a table showing the relation to each other of the +range of prices from 1809 to 1849, by decades, based on the prices of +fifty leading articles of commerce, prepared by the distinguished +Professor Jevons and published in the London Economist for May +8, 1869.</p> + +<p>Taking the range of prices of 1849 as a datum line (the range for +that year being the lowest of the century) Mr. Jevons works backward +to 1809, when the revolt of the South American colonies against +the authority of Spain shut off at a blow the supplies of the precious +metals, and set on foot a money famine from which the world knew +no relief till the discovery of the mines of California and Australia.</p> + +<p>Professor Jevons's figures are as follows, the prices of 1849 being +represented by 100:</p> + +<p class="caption"><i>Relation of prices, 1809 to 1849, by decades, those for 1849 being rated at +100.</i></p> + +<div class='center'> +<table border="0" cellpadding="2" cellspacing="0" summary="" width="40%"> +<tr><td align='center'>1809</td><td align='center'>245</td></tr> +<tr><td align='center'>1819</td><td align='center'>175</td></tr> +<tr><td align='center'>1829</td><td align='center'>124</td></tr> +<tr><td align='center'>1839</td><td align='center'>144</td></tr> +<tr><td align='center'>1849</td><td align='center'>100</td></tr> +</table></div> + +<p>From these figures it will be observed that the fall from 1809 to 1849, +a period of forty years, was as 245 to 100, or 59 per cent.</p> + +<p>By the next table which I submit, that of Dr. Soetbeer, it will be +seen that the general range of prices rose gradually from 1849 to +1873, in the last of which years the figures bore to those of 1849 the +relation of 138 to 100. It has never been denied that this rise was due +to the increase in the world's money supply by the yield of the precious +metals from the mines of California and Australia, the effects of +which, however, as will be seen by the table, were not felt on prices +till 1853—five years after John Marshall's discovery of the yellow +metal in the tail-race at Sutter's mills. Yet, because it interferes with +the pecuniary interests of a large and influential class, it is vehemently +denied that the fall of prices since 1873 is due to a decrease in +the volume of the money caused by the demonetization of silver in +that year throughout the western world.</p> + +<p>From and after that year, as will be perceived by an examination of +the figures; in other words, from the year when one-half the world's +money supply was deprived of the money function, we find an almost +uninterrupted decline of prices. The figures of 1873 and 1885 will be +seen to bear to one another the relation of 138 to 108, or a fall of 22 +per cent. in twelve years. Should the fall continue at that rate without +interruption—and there is no reason apparent why it should not, +we shall in forty years have witnessed a decline of 72 per cent. in +the general range of prices—a decline considerably greater than that +from 1809 to 1849. And these are not the figures of bimetallists or +silver "theorists," but of pronounced advocates of the single standard +of gold. Where, I would inquire, is the fall of prices to stop?</p> + +<p>Dr. Soetbeer's table represents the general average price of one-hundred +leading articles of commerce each year for a period of nearly +forty years. He takes as a basis the general range of gold prices pre<span class='pagenum'><a name="Page_p041" id="Page_p041">[41]</a></span>vailing +between 1847 and 1850, and calling that range 100, shows the +relative standing toward it of the general range of prices for subsequent +years, up to 1885.</p> + +<p class="caption"><i>Relation of prices by years from 1849 to 1885, the general range of +prices of 1849 being rated at 100.</i></p> + + +<div class='center'> +<table border="0" cellpadding="2" cellspacing="0" summary="" width="40%"> +<tr><td align='center'>1849</td><td align='center'>100.00</td></tr> +<tr><td align='center'>1851</td><td align='center'>100.21</td></tr> +<tr><td align='center'>1852</td><td align='center'>101.69</td></tr> +<tr><td align='center'>1853</td><td align='center'>113.69</td></tr> +<tr><td align='center'>1854</td><td align='center'>121.25</td></tr> +<tr><td align='center'>1855</td><td align='center'>124.23</td></tr> +<tr><td align='center'>1856</td><td align='center'>123.27</td></tr> +<tr><td align='center'>1857</td><td align='center'>130.11</td></tr> +<tr><td align='center'>1858</td><td align='center'>113.52</td></tr> +<tr><td align='center'>1859</td><td align='center'>116.34</td></tr> +<tr><td align='center'>1860</td><td align='center'>120.98</td></tr> +<tr><td align='center'>1861</td><td align='center'>118.10</td></tr> +<tr><td align='center'>1862</td><td align='center'>122.65</td></tr> +<tr><td align='center'>1863</td><td align='center'>125.49</td></tr> +<tr><td align='center'>1864</td><td align='center'>129.28</td></tr> +<tr><td align='center'>1865</td><td align='center'>122.63</td></tr> +<tr><td align='center'>1866</td><td align='center'>125.85</td></tr> +<tr><td align='center'>1867</td><td align='center'>124.44</td></tr> +<tr><td align='center'>1868</td><td align='center'>121.99</td></tr> +<tr><td align='center'>1869</td><td align='center'>123.38</td></tr> +<tr><td align='center'>1870</td><td align='center'>122.87</td></tr> +<tr><td align='center'>1871</td><td align='center'>127.03</td></tr> +<tr><td align='center'>1872</td><td align='center'>135.62</td></tr> +<tr><td align='center'><b>1873</b></td><td align='center'><b>138.28</b></td></tr> +<tr><td align='center'>1874</td><td align='center'>136.20</td></tr> +<tr><td align='center'>1875</td><td align='center'>129.85</td></tr> +<tr><td align='center'>1876</td><td align='center'>128.33</td></tr> +<tr><td align='center'>1877</td><td align='center'>127.70</td></tr> +<tr><td align='center'>1878</td><td align='center'>120.60</td></tr> +<tr><td align='center'>1879</td><td align='center'>117.10</td></tr> +<tr><td align='center'>1880</td><td align='center'>121.89</td></tr> +<tr><td align='center'>1881</td><td align='center'>121.07</td></tr> +<tr><td align='center'>1882</td><td align='center'>122.14</td></tr> +<tr><td align='center'>1883</td><td align='center'>122.24</td></tr> +<tr><td align='center'>1884</td><td align='center'>114.25</td></tr> +<tr><td align='center'>1885</td><td align='center'>108.27</td></tr> +</table></div> +<p>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.</p> + + +<p class="caption">BOTH GOLD AND SILVER VARIABLE IN VALUE.</p> + +<p>The fact that the metals 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.</p> + +<p>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.</p> + +<p>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.</p> + +<p>Dr. Adam Smith, in his "Wealth of Nations," book 1, chapter 5, +says:</p> + +<div class="blockquot"><p>Gold and silver, like every other commodity, vary in their value. The discovery +of the abundant mines of America reduced in the sixteenth century the +value of gold 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.</p></div><p><span class='pagenum'><a name="Page_p042" id="Page_p042">[42]</a></span></p> + +<p>And again:</p> + +<div class="blockquot"><p>Increase the scarcity of gold to a certain degree and the smallest bit of it may +be more precious than a diamond.</p></div> + +<p>John Locke, "Considerations, etc., in relation to money" (published +in 1691), says:</p> + +<div class="blockquot"><p>The greater scarcity of money enhances its price and increases the scramble; +there being nothing that does supply the want of it; the lessening of its quantity, +therefore, always increases its price and makes an equal portion of it exchange +for a greater of any other thing.</p></div> + +<p>Prof. Francis A. Walker, "Money," etc., page 210, says:</p> + +<div class="blockquot"><p>Gold and silver do, over long periods, undergo great changes of value and become +in a high degree deceptive as a measure of the obligation of the debtor of +the claim of the creditor. Thus Professor Jevons estimates that the value of +gold fell between 1789 and 1809, 46 per cent., that from 1809 to 1849 it rose 145 per +cent., while in twenty years after 1849 it fell again at least 20 per cent.</p></div> + +<p>Jevons, "Money and Exchange," chapter 6, says:</p> + +<div class="blockquot"><p>In respect to steadiness of value the metals are probably less satisfactory, regarded +as a standard of value, than many other commodities, such as corn.</p></div> + +<p>And again, in chapter 24 of the same work, he says:</p> + +<div class="blockquot"><p>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.</p></div> + +<p>Sir Archibald Alison (England, in 1815 and 1845), says:</p> + +<div class="blockquot"><p>The coining of gold and silver, which is universal in all civilised nations, and affixing +to them one definite and permanent value by authority of law, has no effect +whatever in preventing the fluctuations in the real value of the current coin of +the realm.</p></div> + +<p>Professor Laughlin, of Harvard, in his work on Political Economy +(page 72), says:</p> + +<div class="blockquot"><p>It is quite evident that the name dollar does not always have the same value, +although people often think it does. We get into the habit of using names without +thinking what they really mean. The 23.22 grains in a gold dollar may be exchanged +sometimes for more, sometimes for less, of other commodities. When it +is exchanged for less, its value has fallen relatively to all other commodities, and, +even if the name dollar remains the same, its value has fallen. One must then +offer more dollars than before for the same commodities. That is, when money +falls in value, prices rise; when money rises in value, prices fall.</p> + +<p>Now, we shall say a few words in regard to another function, a means of paying +long contracts, or debts which run over a long term of years.</p> + +<p>Suppose that I loaned you in 1880, $1,000 for twenty years. In that year the +$1,000 bought a certain quantity of corn, wheat, sugar, salt, wood, hats, and shoes. +In 1900, when you are to pay me back the $1,000 in money, if prices have changed, +you may give me back the same amount of money, but you will not return to me +the same purchasing power over other things. If for some reason prices have +fallen between 1880 and 1900, it will take less money to buy the same quantity as +before of corn, wheat, etc. If so, the $1,000 you return me in 1900 will be of more +value than the $1,000 I gave you, and it would be unjust to oblige you to give me +more than you borrowed. If, on the other hand, prices have risen, then the $1,000 +in money would buy me less than before, so that I should lose. * * * Hence, +the value of money (gold or silver) does not remain the same for any length of +time; and the precious metals, while they are very satisfactory for exchanges +which do not take very long to complete, can not serve as a proper measure of +value during a long term or years.</p></div> + +<p>Ricardo, the greatest authority on the gold standard, the financial +writer, more highly regarded throughout the world than any other +that has ever appeared in Great Britain, whose logical utterances +have never failed to attract the attention of mankind, stated the true +condition of things in 1810, and advocated the true policy for Great +Britain.<span class='pagenum'><a name="Page_p043" id="Page_p043">[43]</a></span></p> + +<p>In his "Proposals for an Economical and Secure Currency," Ricardo +makes the following statement, which I commend to the careful +attention of the advocates of the single gold standard:</p> + +<div class="blockquot"><p>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 and silver are used for the payment of large 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 +been 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 acquainted.</p> + +<p>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 qualities +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 market +price of bullion is above the mint price, the currency is depreciated. This +proposition is 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.</p></div> + +<p>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 attempting +to establish the gold standard may find themselves reduced +from opulence to poverty.</p> + +<p>Ricardo continues:</p> + +<div class="blockquot"><p>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 substituting +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 preferable +to gold as a standard, and should be permanently adopted for that purpose.</p></div> + +<p>Innumerable additional citations from authors of repute could be +adduced to fortify this position.</p> + +<p>It will thus be seen that the fluctuations in the value or purchasing +power of both gold and silver have always been admitted by +scientific writers. They were so well understood three centuries +ago that 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 various +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 principal +articles of commerce, to be made by official authority and +published from time to time, by the average of which the fluctuations +of gold could be ascertained and proper allowance made for +them in the settlement of time transactions. Professor Jevons, Prof. +Francis A. Walker, and other political economists of note have expressed +approval of such a tabular standard for long-time contracts, +as securing greater equity than would gold as a measure of values.</p> + +<p>Those who now assert that silver has fallen and that gold has not<span class='pagenum'><a name="Page_p044" id="Page_p044">[44]</a></span> +risen in value arrive at this conclusion by a very safe process of +reasoning. First, to show that silver has fallen they measure it by +gold alone, without reference to the general range 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 ascertained +by reference to the other, and certainly not by constituting +either of them a standard by which to judge itself. It would of +course be forever impossible to show any change in the value of gold +or silver, or of anything else, measuring it by itself. It is only by +looking at the relations which both metals bear respectively to a considerable +range of commodities generally dealt in as well as to each +other, that it can be ascertained with certainty what has happened.</p> + +<p>Not only upon consideration of all the facts I have given, but upon +the logic of the situation, it must be obvious that gold has risen and +will continue to rise in value as long as its volume decreases and the +demand for it increases. Since 1860, when 77 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 diminished +absolutely. For the five years ending with 1860 the yield of gold +throughout the world was $137,000,000 a year; for the five years +ending 1889 the yield was but $110,000,000 a year. If, as claimed +by the advocates of the single gold standard, an increase in the yield +of silver decreases the value of silver, by what system of logic can +they deny that a decrease in the supply of gold increases the value of +gold?</p> + +<p>In a late issue of the London Economist, that of April 26, 1890, I +find an editorial article relating to the recent discussion on bimetallism +in the British House of Commons. That article comments +somewhat sharply on Mr. Smith's assertion that "a conspiracy had +been formed among the 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 comments +the editor, by "confession and avoidance," admits our whole +contention as to the rise of gold and the fall, as a natural consequence, +of the prices of commodities. He says:</p> + +<div class="blockquot"><p>It may not be amiss, however, to point out that the increase in the exchangeable +value of gold has been by no means such a gain to the financial class as he +in common with many others suppose; for advantage has been very largely taken +of it to cut down the return upon the capital which the financial classes have invested. +It has favored debt conversion schemes, and it has been one of the influences +that have caused the rate of interest in general to decline so decidedly, +that, all round, the yield of investments is now very appreciably lower than it was +fifteen years ago. The idea that the creditor class have realized unmixed gains +and the debtor class have suffered unmitigated losses by the alteration in the purchasing +power of gold is thus altogether fallacious. There has in their case, as +in all others, been a species of compulsory give and take. Each has gained and +each has lost something, and now that the process of readjustment has been carried +so far it would be unwise to the last degree to unsettle everything again by +such legislation as the bimetallists propose.</p></div> + +<p>The editor of the Economist is to be commended for at least one +thing. He does not quibble as to the most important point in the +bimetallic controversy. He frankly admits that gold has risen, and +does not, as some others do, attribute the fall of prices to improvements +in methods of production.</p> + +<p>He also admits that coincidently with and caused by the rise in +gold there has been a great decline in the rates of interest, and, +strangely, claims that the debtor is compensated for the rise in the +value of money by the ability to convert the debt into one bearing a +lower rate of interest, or, as he calls it, resorting to "debt-conversion +schemes."<span class='pagenum'><a name="Page_p045" id="Page_p045">[45]</a></span></p> + +<p>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 current +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 question +is under discussion) that there has been a rise in the exchangeable +value of gold, and conceded its natural sequence, a fall in the +rates of interest.</p> + + +<p class="caption">IMPROVED METHODS OF PRODUCTION.</p> + +<p>In order to justify their position it becomes necessary for the advocates +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.</p> + +<p>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 demonetization +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 the Daily News said:</p> + +<div class="blockquot"><p>As the annual new supply of gold throughout the world is reckoned at little +more than £20,000,000 ($100,000,000), and the usual demand for miscellaneous purposes +is very large, it follows that, if the German Government perseveres in its +policy, the strain upon the 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 markets of the world are likely to be perturbed by this bullion scarcity, +and the fall in the value of gold——</p></div> + +<p class="noidt">which means the rise in prices that for some time had prevailed;</p> + +<div class="blockquot"><p class="noidt">of which so much has been heard, will be checked or reversed.</p></div> + +<p>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.</p> + +<p>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.</p> + +<p>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.</p> + +<p>The immediate fall in prices of commodities was the natural, the +anticipated, and the deliberately intended result of that movement.</p> + +<p>But we are now assured that this fall is not due to any monetary<span class='pagenum'><a name="Page_p046" id="Page_p046">[46]</a></span> +cause, but to the greater efficiency of machinery in the production +of commodities.</p> + +<p>No advocate of an increased volume of money denies that in a few +departments of manufacture there have since 1873 been improvements +tending to economize labor and cheapen products; but they +emphatically deny and challenge proof that improvements of mere +detail in the manufacture of some articles will account for the extraordinary +fall of price since that time in almost every product of industry. +We are also told that the development of the system of transportation, +both by land and sea, have tended to lower the price of commodities +to the consumers. I grant it. But we had those improvements +before 1873.</p> + +<p>The inventions made between 1873 and 1890, the period of falling +prices, were no more important or radical in their effect on industry,—tended +no more to cheapen commodities, than did those +from 1850 to 1873, 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 industry, +than those of the later period. All the great basic improvements +had been invented, and had been incorporated with the industrial +system of all civilized countries long before 1873, if we +except the electric light and the telephone. We have had the steam +engine, the cotton gin, and the spinning-jenny since the last century; +the railroad and the steam-ship since the '30's; the telegraph, the +mechanical reaper, steam-plow, and other agricultural labor-saving +devices since the '40's; the sewing machine since 1854, and the Bessemer +process and steel rail since 1857.</p> + +<p>The forced construction into which their position drives the advocates +of the gold standard is well illustrated in a recent number of +a magazine of high standing in this country, in which I find the +following:</p> + +<div class="blockquot"><p>But if it be demurred, does not a debt incurred, say, ten years ago require to-day +more wheat or iron for its satisfaction than the sum could have bought when +first borrowed? Certainly, but the wheat or iron represents no more labor now +then it did ten years ago, and its increase in quantity stands for the new efficiency +which applied science has bestowed on toil.</p></div> + +<p>Observe how deftly the writer places iron, in the manufacture of +which there have admittedly been some improvements, in the same +category with wheat, in the production of which the improvements +within any recent period have been of the most trifling character. +It will be exceedingly difficult to convince the farmers of this country, +whose mortgages are eating up the proceeds of their labor, +that the enormous decrease in the debt-paying power of their products +is made up to them in "the new efficiency which applied +science has bestowed on toil."</p> + +<p>As well might it be maintained that the rise of prices and the concurrent +wave of universal prosperity, experienced after 1849, was not +due to the increase of the world's money stock from the mines of California +and Australia, but to some sudden, unaccountable, and complete +loss of all improvements theretofore attained in the arts and +industries of the world.</p> + + +<p class="caption">EFFECT OF CHECKS AND CLEARING-HOUSES.</p> + +<p>But it is said that checks, notes, drafts, bills of exchange, and the +facilities afforded by clearing-houses effect such economy in the use +of money that it goes farther now than formerly, and that therefore +so large a volume of money as was formerly needed is not needed at +present. It is sought thus to escape the conclusion that the fall of<span class='pagenum'><a name="Page_p047" id="Page_p047">[47]</a></span> +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 however +contracted the money volume of a country may become, the +system of checks and clearing-houses—on the principle of the compensating +balance—will expand in a proportion directly corresponding +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.</p> + +<p>Nothing more absurd could be conceived. If this view were correct, +it would make no difference whether the amount of money in +circulation were large or small; a million dollars would be as efficacious +as $100,000,000, and even one dollar as effective as a million dollars; +and if we suppose the last dollar to have disappeared from circulation, +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.</p> + +<p>That checks and clearing-houses are a great convenience to commerce +is not denied. They serve to a certain extent to make more +effective the money volume of a country. By the clearing house system +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.</p> + +<p>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 circumstances.</p> + +<p>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 possible +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.</p> + +<p>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 +become static conditions. The demands for currency have borne relation +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, <i>plus</i> a certain volume of clearing house exchanges, +then, at a later period, an increase of business would demand an increase +in the volume of money, <i>plus</i> 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 <i>fall</i> of prices in the last half of that period to any economy in<span class='pagenum'><a name="Page_p048" id="Page_p048">[48]</a></span> +the use of money effected by the clearing-house system as it would +be to ascribe to the same cause the directly opposite effect—the <i>rise</i> +of prices—that took place in the first half of the same period.</p> + + +<p class="caption">THE PROOF AFFORDED BY THE FALL OF INTEREST.</p> + +<p>If further proof were needed that gold has risen in value, it is, as +I maintain, to be found in the coincident fact of a decrease of rates +of interest on first-class securities. That decrease has kept even +step and pace with the rise in the value of money.</p> + +<p>The rise in the value of gold, as shown by comparison with large +numbers of articles of commerce, has been between 35 and 40 per +cent. The rate of interest on gilt-edged securities shows a corresponding +decline. But unfortunately for the struggling people of the +country, the fall in the rate of interest on farm mortgages and on +property remote from money centers has been nothing like so great, +nor has it been so great as the fall in the price of agricultural lands, +and in the products of labor.</p> + +<p>I hold, therefore, that a new axiom should be added to the science +of political economy; namely, that as the purchasing power of money +increases, its income producing power decreases, and in about the +same ratio; and conversely, when the purchasing power of money +decreases, its income-producing power increases. In other words, +when prices rise interest rises; when prices fall interest falls. When +money is increasing in volume and decreasing in value, prices rise, +and its investment in productive enterprises becomes more profitable, +and as a consequence interest rises. When it is decreasing in volume +and consequently increasing in value, prices fall, investment in +property and productive enterprises become precarious and unprofitable, +and, as a consequence, it avoids them, and seeks investment +in bonds and gilt-edged securities, aptly termed "money-futures," +which for years have been increasing and continue to increase.</p> + +<p>Some thirteen years ago I indulged in a little prophecy concerning +the rates of interest. I take no great credit to myself for it, but +in 1877—four years after the demonetization of silver—before the +rates of interest had materially fallen, and when the same contention +was made that is made now, namely, that money was cheap because +interest was low, and that the policies of the country were +wise because our credit stood on such a high plane, I submitted to +Congress the report of the Monetary Commission, from which I +quote:</p> + +<div class="blockquot"><p>Money can be borrowed readily only upon such securities as bonds which are +based on the unlimited tax-levying power of the Government, or upon the bonds +and stocks of first-class trunk-lines of railroad corporations, whose freight and +fare rates are practically a tax upon the entire population and resources of the +regions which they traverse and supply. The competition among capitalists to +loan money on these more ample securities has become very keen, and such securities +command money at unprecedentedly low rates. These low and lowering rates +of interest, instead of denoting financial strength and industrial prosperity, are a +gauge of increasing prostration. Large accumulations of money in financial centers, +instead of being caused by the overflow of a healthful circulation, or even a +proof of a sufficient circulation, are unmistakable evidence of a congested condition +caused by a decreasing and insufficient circulation. The readiness with +which Government bonds bearing a very low rate of interest are taken, instead of +showing that the credit of the Government has improved, is melancholy evidence +of the prostrated condition to which industry and trade have been reduced.</p> + +<p>There need be no haste in refunding the public debt at the rates now proposed +and considered low. Unless the progress of the commercial world in the policy of +contracting money by demonetizing silver is checked, bonds bearing a much lower +rate of interest than any yet offered will be gladly accepted by capitalists here and +in Europe. When the money stock is diminishing and prices are falling, the lender +not only receives interest, but finds a profit in the greatly increased value of the +principal when it is returned to him. A loan of money made in 1809, if repaid in 1848,<span class='pagenum'><a name="Page_p049" id="Page_p049">[49]</a></span> +would have been repaid with an addition of 145 per cent. in the purchasing power +of principal and interest, besides all the interest paid. Those who have loaned +money to this Government since 1861 have already received nearly as much in the +increased value of their principal as in interest, and all the probabilities are, in +respect to the four per cent. thirty-year national bonds now being negotiated, if +they are redeemed in gold, that more profit will be made by the augmentation in +the value of principal through interest. Indeed the signs of the times are, that +the bonds of a country possessing the unbounded resources and stable institutions +of the United States, payable in gold at the end of thirty years without any interest +whatever, would, through the increase of the value of that metal, prove a most +profitable investment.</p></div> + +<p>All the facts of the situation to-day fully bear out the statements +I then made.</p> + +<p>So determined are the advocates of the single gold standard in +defending the wisdom of its maintenance that facts whose existence +would at ordinary times be readily admitted, are, during a discussion +of the money question, pointedly denied. For example, within +the past few weeks we have seen in various eastern newspaper contributions +from prominent writers taking direct issue with the advocates +of silver as to the prevalence of general distress throughout +the country. They declare that there is no such distress, assert that +they have looked for it in vain, and derisively inquire where it is.</p> + +<p>Perhaps the best authority I can cite in response to this inquiry +is the principal commercial daily journal of the east, the New York +Journal of Commerce, itself one of the most ardent and uncompromising +advocates of the gold standard. In an editorial article in +its issue of January 11, 1890, that journal said:</p> + +<p class="caption">FAILURES IN BUSINESS.</p> +<div class="blockquot"> +<p>The public have been startled by the announcement that during the year 1889 +there were 11,719 business failures in the United States, against 10,587 in 1888 and +9,740 in 1887. The estimated liabilities of last year's insolvents were $140,359,000 +and the assets were $70,599,000, against $120,242,000 liabilities and $61,999,000 assets +for the failures of the previous year. Thus the failures in 1889 were more in number +and far greater in liabilities than for 1888, and the proportion of assets to the +obligations shows that the total insolvency was more disastrous. Why in a season +of profound peace, with no blighting frosts or withering droughts, and the +most abundant yield from the field, forest, and mine so many in business have +gone to the wall, no one seems able to answer. Many have tried their hand at a +solution of the problem, and not one, as far as we can discover, has satisfied even +himself with the result of his investigations.</p></div> + + +<p class="caption">HAS SILVER FALLEN?</p> + +<p>In order to ascertain whether silver really has or has not fallen +in value, it is necessary that all the facts be taken into account +and the situation looked at from a correct point of view. If a person +be seated in a boat that is headed to the stream and wishes to test +whether or not he is making headway he must keep in view not the +stream, but the shore. The occupant of a railroad car who observes +a moving train on a contiguous and parallel track, frequently thinks +his own train at a stand-still, when in fact it may be in motion.</p> + +<p>Whenever a rise or fall appears to take place in the price of any +one article or commodity, that is to say whenever a difference takes +place in the relation which that article bears to money—all other +commodities remaining unchanged—such difference must naturally +and properly be attributed to changed conditions affecting the commodity, +and not to a change in the value of money. But wherever +there is a fall in prices throughout the whole range of commodities +then it is clear that this change is mainly due to a change in the value +of money. Such however is the force of education and habit that +the masses of the people are slow to suspect any change in the +standard by which they have been accustomed to gauge or measure +all values. Indeed they find it difficult to understand how un<span class='pagenum'><a name="Page_p050" id="Page_p050">[50]</a></span>der +any circumstances any change can take place in it. Having +their eyes fixed on the standard, and on that alone, they naturally +attribute to the articles measured, and not to the standard, any +difference that may seem to arise in the relation they bear to each +other.</p> + +<p>But the apparent is not always the real. Nothing seems more +warranted by the evidence of our senses than that the earth is a +stationary object, while the sun revolves around it. For thousands +of years the world was convinced of the truth of the geocentric +theory of the universe, and millions of men have lived and died in +the confident belief that this planet was immovably fixed in space, +while the sun was a rolling and ever-shifting body. Even yet, +among the mass of mankind, so ever-present is this impression, +derived from ocular demonstration, that in spite of the declarations +of science, the world continues in common use the phrases +which originally described the process that took place, as men understood +it; hence we speak of the "rising" and the "setting" +of the sun. In the same way we speak of the rise or fall in the +value of commodities, without being particular to note whether the +change that has taken place is strictly a change in the value of the +article itself or a change in the money with which its value is measured. +Perhaps I can best illustrate my meaning by an allegory:</p> + + +<p class="caption">THE BATTLE OF THE STANDARDS. THE ALLEGORY OF THE CLOCKS.</p> + +<p>In an ancient village there once stood a gold clock, which, ever +since the invention of clocks had been the measure of time for the +people of that village. They were proud of its beauty, its workmanship, +its musical stroke, and the unfailing regularity with which it +heralded the passing hours. This clock had been endeared to all +the inhabitants of the village by the hallowed associations +with which it was identified. Generation after generation it had +called the children from far and wide to attend the village school, +its fresh morning peal had set the honest villagers to labor; its noon-day +notes had called them to refreshment; its welcome evening +chime had summoned them to rest. From time immemorial, on all +festive occasions, it had rung out its merry tones to assemble the +young people on the green; and on the Sabbath it had advertised +to all the countryside the hour of worship in the village church. +So perfect was its mechanism that it never needed repair. So +proud were the people of this wonderful clock that it became the +standard for all the country round about, and the time which it +kept came to be known as the gold standard of time, which was universally +admitted to be correct and unchanging.</p> + +<p>In the course of time there wandered that way a queer character, +a clockmaker, who being fully instructed in the inner workings of +time-tellers, and not having inherited the traditions of that village, +did not regard this clock with the veneration accorded to it by the +natives. To their astonishment he denied that there was really any +such thing as a gold standard of time; and in order to prove that the +material, gold, did not monopolize all the qualities characteristic +of clocks, he placed alongside the gold clock, another clock, of silver, +and set both clocks at 12 noon. For a long time the clocks +ran along in almost perfect accord, their only disagreement being +that of an occasional second or two, and even that disagreement +only at rare intervals, such as might naturally occur with the best +of clocks. But the Council of the village, in their admiration for +the gold clock, passed an ordinance requiring that all the weights +(the motive power) of the silver clock, except one, be removed from<span class='pagenum'><a name="Page_p051" id="Page_p051">[51]</a></span> +it, and attached to those of the gold clock. Instantly the clocks began +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.</p> + +<p>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 standard, +not withstanding that it was yet the gray of the morning, insisted +on eating their mid-day meal, because the gold standard indicated +that it must be noon. And 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 already +eaten supper and were preparing for bed.</p> + +<p>But this state of things could not last. It was clear that the difference +between the standards must be reconciled, or all industry +would be disarranged and the village ruined.</p> + +<p>Discussion was rife among the villagers as to the cause of the difference. +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.</p> + +<p>While this discussion was at its height a philosopher came along +and observing the excitement on the subject remarked, "By measuring +two things, one against the other, you 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 happened."</p> + +<p>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.</p> + +<p>Notwithstanding this demonstration, there were many who adhered +to the belief that the gold standard was correct and unchanging, +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.</p> + +<p>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 clocks 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 although +the great mass of the people really believed, from the demonstration +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 manufacturers +of gold clocks as to what was best to be done.<span class='pagenum'><a name="Page_p052" id="Page_p052">[52]</a></span></p> + +<p>Now our 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 persist +that the law which makes gold an unchanging standard of +measure is more immutable than that which holds the stars in their +courses. If they will compare gold and silver with commodities in +general, to see how the metals have maintained their relations, not +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 metals has been +effected by depriving silver of its legal-tender function, as the want +of accord between the clocks was brought about by depriving the +silver clock of a portion of its motive power—the weights. The +only thing that has prevented a greater divergency between the +metals is the limited coinage by the United States—the single weight +that, withheld from the gold clock, prevented its more ruinous +gain.</p> + + +<p class="caption">THE PURCHASING POWER OF SILVER IN 1873 AND 1889.</p> + +<p>If I can show that for a period of seventeen years, since its demonetization +in 1873, silver has lost none of its purchasing power, none of +its command over commodities; that is to say, if I can show that 412½ +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 412½ grains of silver in 1873 (when our silver dollar bore a premium +over gold) of all the articles that enter into the daily consumption +of the people, it must be manifest that silver has not fallen in +value.</p> + +<p>I present a table which I shall ask to have inserted in the <span class="smcap">Record</span> +as part of my remarks, showing the purchasing power of 412½ grains +of silver, nine-tenths fine, in 1873 and 1890, respectively, so far as +concerns several leading articles of daily consumption.</p> + +<p>The table is as follows:</p> + +<p class="caption"><i>Comparative purchasing power of 412½ grains silver, nine-tenths fine, +in 1873 and 1890, respectively.</i></p> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class="bbox">412½ grains silver would buy—</th><th class="bbox">1873.</th><th class="bbox">1890.</th></tr> +<tr><td align='left'> Wheat bushels</td><td align='center'> 0.87</td><td align='center'> 0.88</td></tr> +<tr><td align='left'> Corn do</td><td align='center'> 1.84</td><td align='center'> 1.97</td></tr> +<tr><td align='left'> Cotton pounds</td><td align='center'> 5.32</td><td align='center'> 6.71</td></tr> +<tr><td align='left'> Beef, mess barrels</td><td align='center'> 0.05</td><td align='center'> 0.05</td></tr> +<tr><td align='left'> Pork, mess do</td><td align='center'> 0.07</td><td align='center'> 0.06</td></tr> +<tr><td align='left'> Lard pounds</td><td align='center'> 12.89</td><td align='center'> 11.75</td></tr> +<tr><td align='left'> Butter do</td><td align='center'> 5.40</td><td align='center'> 4.63</td></tr> +<tr><td align='left'> Cheese do</td><td align='center'> 8.69</td><td align='center'> 6.94</td></tr> +<tr><td align='left'> Sugar do</td><td align='center'> 9.80</td><td align='center'> 10.34</td></tr> +<tr><td align='left'> Eggs dozen</td><td align='center'> 4.27</td><td align='center'> 5.38</td></tr> +<tr><td class="bb"></td><td class="bb"></td><td class="bb"></td></tr> +</table></div> + +<p>From this table it conclusively appears that while in 1873 the standard +silver dollar of 412½ grains, which then bore a premium over +the gold dollar, would purchase four-fifths of a bushel of wheat; to-day +the same quantity of silver, without the advantage of coinage<span class='pagenum'><a name="Page_p053" id="Page_p053">[53]</a></span> +and merely as bullion, will also buy four-fifths of a bushel of wheat—the +only difference between the figures for the two years being that +at the present time 412½ grains of silver bullion, as will be seen by the +table, will buy a fraction of a bushel more than would 412½ grains of +coined silver in 1873.</p> + +<p>If, then, silver has fallen, it is manifestly not in its relation to wheat.</p> + +<p>By the same table it is shown that the silver dollar of 1873, containing +412½ 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 412½ grains of silver bullion of 1890. This +shows conclusively that silver has not fallen in its relation to corn.</p> + +<p>The figures of the same table show that in 1873 a coined silver dollar +of 412½ grains would buy 5<small><sup>1</sup>⁄<sub>3</sub></small> pounds of cotton; to-day 412½ grains +of uncoined silver will buy 6¾ pounds of cotton. From this it appears +that silver has not fallen relatively to cotton, the great staple +of universal use, but that, on the contrary, it has advanced somewhat +in its purchasing power when compared with that article.</p> + +<p>In order to present the question from another point of view I submit +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 commodities.</p> + +<p class="caption"><i>Comparative purchasing power of silver bullion, in grains nine-tenths +fine, in 1873 and 1890, respectively.</i></p> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox'>Articles.</th><th class='bbox'>1873.<br />Legal tender.</th><th class='bbox'>1890.<br />Commodity.</th></tr> +<tr><td></td><td align='center'><i>Grains silver.</i></td><td align='center'><i>Grains silver.</i></td></tr> +<tr><td align='left'>Wheat per bushel</td><td align='center'> 474.3</td><td align='center'> 468</td></tr> +<tr><td align='left'>Corn do</td><td align='center'> 223.9</td><td align='center'> 209.25</td></tr> +<tr><td align='left'>Cotton per pound</td><td align='center'> 77.55</td><td align='center'> 61.42</td></tr> +<tr><td align='left'>Beef, mess per barrel</td><td align='center'> 8,662.5</td><td align='center'> 7,560</td></tr> +<tr><td align='left'>Pork, mess do</td><td align='center'> 5,465.62</td><td align='center'> 6,750</td></tr> +<tr><td align='left'>Lard per pound</td><td align='center'> 31.97</td><td align='center'> 35.1</td></tr> +<tr><td align='left'>Butter do</td><td align='center'> 76.31</td><td align='center'> 89.1</td></tr> +<tr><td align='left'>Cheese do</td><td align='center'> 47.44</td><td align='center'> 59.4</td></tr> +<tr><td align='left'>Sugar, refined do</td><td align='center'> 42.07</td><td align='center'> 39.82</td></tr> +<tr><td align='left'>Eggs per dozen</td><td align='center'> 96.52</td><td align='center'> 76.68</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p>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 has +risen in value.</p> + +<p>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 quantity. +These figures fail to prove that silver has fallen in value, in +its relation to corn. On the contrary, again, it has risen.</p> + +<p>In 1873 a pound of cotton could not be had for less than 77½ grains +of silver; to-day the same pound of cotton can be bought for 61<span class='pagenum'><a name="Page_p054" id="Page_p054">[54]</a></span> +grains of silver. Silver, therefore, has not fallen, but risen in value +in its relation to cotton.</p> + +<p>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 quantity +of eggs. Silver therefore has not fallen but risen in value, in its relation +to eggs.</p> + +<p>These comparisons might be continued with the same results as to +a great majority of the articles entering into general use.</p> + +<p>These figures demonstrate that in its relation to all commodities +that enter into the daily consumption, silver has not 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 mentioned +than were required in 1873.</p> + +<p>In relation to what, then, is it that silver has fallen? As it has +not fallen in relation to commodities, there remains but one thing +in relation to which it can be said to have fallen, and that one thing +is gold. The phrase "the fall of silver" is the ingenious and cunning +invention by which it is sought to cast on that metal the discredit +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 scrupulously +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. +The true 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 is not of so much importance +to know how much gold can be bought with a given amount of silver, +as it is to know how much bread, how much meat, and how +much clothing can be bought, and how much of all the things that +are necessary to the comfort and well-being of the people can be +bought with that amount of silver.</p> + + +<p class="caption">PROOF THAT GOLD HAS RISEN.</p> + +<p>In order to demonstrate that gold has risen, I will bring side by +side the gold prices of a number of leading commodities of commerce +in 1873 and 1889, respectively, and the amount in silver bullion +that in 1889 would purchase an equal quantity of the same commodities, +by a table prepared at my request by the Bureau of Statistics +of the Treasury Department.<span class='pagenum'><a name="Page_p055" id="Page_p055">[55]</a></span></p> + +<p class="caption"><i>Average export prices of the following named domestic commodities for the +years ending June 30, 1873 and 1889.</i></p> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox' rowspan='3'>Commodities.</th><th class='bbox' rowspan='3'>Unit of<br />quantity.</th><th class='bbox' colspan='4'>Average price of the year ending June 30 —</th></tr> +<tr><th class='bbox' colspan='2'>1873.</th><th class='bbox' colspan='2'>1889.</th></tr> +<tr><th class='bbox'>In currency.</th><th class='bbox'>In gold.</th><th class='bbox'>In gold.</th><th class='bbox'>In silver bullion.</th></tr> +<tr><td align='left'>Bacon and hams</td><td align='center'> Pounds</td><td align='right'> $0.088</td><td align='right'> $0.077</td><td align='right'> $0.084</td><td align='right'> $0.108</td></tr> +<tr><td align='left'>Butter</td><td align='center'> do</td><td align='right'> .211</td><td align='right'> .184</td><td align='right'> .166</td><td align='right'> .212</td></tr> +<tr><td align='left'>Cheese</td><td align='center'> do</td><td align='right'> .130</td><td align='right'> .113</td><td align='right'> .092</td><td align='right'> .118</td></tr> +<tr><td align='left'>Corn</td><td align='center'> Bushels</td><td align='right'> .617</td><td align='right'> .539</td><td align='right'> .508</td><td align='right'> .650</td></tr> +<tr><td align='left'>Cotton:</td><td align='center'></td><td align='right'></td><td align='right'></td><td align='right'></td><td align='right'></td></tr> +<tr><td align='left'> Unmanufactured, not sea Island</td><td align='center'> Pounds</td><td align='right'> .188</td><td align='right'> .164</td><td align='right'> .099</td><td align='right'> .127</td></tr> +<tr><td align='left'> Cloth, colored</td><td align='center'> Yards</td><td align='right'> .166</td><td align='right'> .145</td><td align='right'> .065</td><td align='right'> .083</td></tr> +<tr><td align='left'> Cloth, uncolored</td><td align='center'> do</td><td align='right'> .162</td><td align='right'> .142</td><td align='right'> .068</td><td align='right'> .087</td></tr> +<tr><td align='left'>Iron and steel:</td><td align='right'></td><td align='right'></td><td align='right'></td><td align='right'></td><td align='right'></td></tr> +<tr><td align='left'> Bar-iron</td><td align='center'> Cwt</td><td align='right'> 5.480</td><td align='right'> 4.784</td><td align='right'> 3.183</td><td align='right'> 4.074</td></tr> +<tr><td align='left'> Pig-iron</td><td align='center'> do</td><td align='right'> 2.498</td><td align='right'> 2.181</td><td align='right'> .953</td><td align='right'> 1.220</td></tr> +<tr><td align='left'> Railroad-bars</td><td align='center'> do</td><td align='right'> 4.114</td><td align='right'> 3.592</td><td align='right'> 2.169</td><td align='right'> 2.776</td></tr> +<tr><td align='left'>Lard</td><td align='center'> Pounds</td><td align='right'> .092</td><td align='right'> .080</td><td align='right'> .076</td><td align='right'> .097</td></tr> +<tr><td align='left'>Leather</td><td align='center'> do</td><td align='right'> .253</td><td align='right'> .221</td><td align='right'> .185</td><td align='right'> .237</td></tr> +<tr><td align='left'>Rice</td><td align='center'> do</td><td align='right'> .071</td><td align='right'> .062</td><td align='right'> .055</td><td align='right'> .070</td></tr> +<tr><td align='left'>Sugar:</td><td align='right'></td><td align='right'></td><td align='right'></td><td align='right'></td><td align='right'></td></tr> +<tr><td align='left'> Brown</td><td align='center'> Pounds</td><td align='right'> .092</td><td align='right'> .080</td><td align='right'> .056</td><td align='right'> .072</td></tr> +<tr><td align='left'> Refined</td><td align='center'> do</td><td align='right'> .116</td><td align='right'> .101</td><td align='right'> .066</td><td align='right'> .084</td></tr> +<tr><td align='left'>Wheat</td><td align='center'> Bushels</td><td align='right'> 1.312</td><td align='right'> 1.145</td><td align='right'> .874</td><td align='right'> 1.119</td></tr> +<tr><td align='left'>Wheat-flour</td><td align='center'> Barrels</td><td align='right'> 7.565</td><td align='right'> 6.604</td><td align='right'> 4.703</td><td align='right'> 6.020</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p>What does an examination of this table show? It shows beyond +dispute that gold has risen in value.</p> + +<p>A bushel of wheat that, according to the figures of the Bureau of +Statistics cost $1.14 in gold or silver in 1873, and which, as will be +seen by the table, still commands $1.12 in silver bullion, will to-day +bring only 87 cents in gold.</p> + +<p>A pound of cotton that in 1873 cost the purchaser, in gold or silver, +16 cents, and which still commands 13 cents in silver bullion, will +bring only 10 cents in gold.</p> + +<p>A pound of cheese that in 1873 cost the purchaser 11<small><sup>1</sup>⁄<sub>3</sub></small> cents in +gold or silver, and which now brings 12 cents in silver bullion, will +bring only 9 cents in gold.</p> + +<p>A barrel of flour which in 1873 cost the purchaser $6.60 in gold or +silver, and which to-day commands $6.02 in silver bullion, will bring +but $4.70 in gold.</p> + +<p>A pound of butter that in 1873 brought 18.4 cents in gold or silver, +and now commands 20.8 cents in silver bullion, will bring but 16.6 +cents in gold.</p> + +<p>Notwithstanding that 412½ grains of uncoined silver will to-day buy +as much of the leading articles of commerce as the coined gold dollar +would buy in 1873, yet the advocates of the gold standard characterize +it as a 72-cent dollar. Then the gold dollar of 1873 was a 72-cent dollar. +If the gold dollar of to-day be an honest and equitable dollar, that of +1873, which was worth much less, was a swindling and dishonest one; +and if gold continues to advance as it has been advancing, and with +the declining output of that metal there is no reason why it should<span class='pagenum'><a name="Page_p056" id="Page_p056">[56]</a></span> +not, it will be but a short time before any other kind of dollar whose +value may be equal to that of the present gold dollar will be stigmatized +as a swindling 72-cent dollar. There never was a dollar +coined that did not legally and practically contain 100 cents. But +the creditors stigmatize a dollar of the value of the gold and silver +dollar of 1873 as a 72-cent dollar. May not the debtors, with much +more propriety, denounce the gold dollar of to-day as a 140-cent +dollar?</p> + +<p>According to the admissions of the royal commission of England, +the gold dollar of to-day is to the producers of this country, measured +by their products, already at a premium of between 30 and 40 per cent. +over the gold dollar of 1873. The advocates of the gold standard have +no sympathy with our farmers and manufacturers who have to pay, in +commodities, a premium of 30 to 40 per cent. on gold, to meet their engagements, +but express extreme anxiety at the bare possibility that a +few importers might have to pay even a small premium in any form. +They insist that the money system of a population of 65,000,000, shall, +like an inverted pyramid, be made to rest upon its apex in order to enable +a few importers, most of whom are residents of foreign countries, +to make their payments abroad in gold.</p> + +<p>Verily, Mr. President, the single gold standard is an expensive +luxury for our people to maintain.</p> + +<p>Those who deride silver as a money-metal indulge in feeble attempts +at sarcasm by inquiring why we do not advocate the use of tin and +brass as money. They speak and write as though the idea of using +silver as money were a recent discovery or invention of people engaged +in silver mining. They also ignore the fact that the standard +silver dollar of the United States, which, with much satisfaction, they +stigmatize as a 72-cent dollar, requires a gold dollar to obtain it. It +is worth a gold dollar in London, in Berlin, in Vienna, in Saint Petersburg, +in Madrid, in Havana, and in all countries having commercial +relations with the United States. It can at once be exchanged into +the money of any country with only the slight deduction of cost of +shipment to this country—as is the case in the United States with +notes of the Bank of England, which are redeemable in gold.</p> + +<p>Our silver dollar is not money in foreign countries—and it is to our +advantage that it is not—for were it money anywhere else than in +this country, we could not rely on its remaining here to maintain that +steadiness of prices indispensable to prosperity. But if any of our +silver dollars are found abroad, let no one suppose he can get them +by tendering 412½ grains of silver bullion for each dollar. He will find +it will cost him precisely as much gold as it passes for in the United +States.</p> + + +<p class="caption">SOME EFFECTS OF THE RISE OF GOLD.</p> + +<p>If a cotton planter in 1873 owed $10,000 he could then have paid it +with 60,975 pounds of cotton. To-day, by reason of the increased +command which gold has over commodities, it would take 101,010 +pounds of cotton to pay that $10,000; not withstanding that the +money in which the debtor has paid the interest has each year become +more valuable than it was at the time he contracted to pay it.</p> + +<p>The cotton manufacturer of the East who in 1873 owed $10,000 +could then have paid it with 70,422 yards of uncolored cotton cloth; +to-day owing to the rise in the value of gold it would require 147,059 +yards to pay that debt, without taking into account the amount lost +by the debtor in the greater sacrifice he had year by year to make to +pay the interest.</p> + +<p>The farmer of the North and West who in 1873 owed $10,000 could<span class='pagenum'><a name="Page_p057" id="Page_p057">[57]</a></span> +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 his debt with 1,514 barrels of flour; to-day it would +take 2,126 barrels of flour to pay the same debt.</p> + +<p>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-standard +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.</p> + +<p>Machiavelli, describing a turbulent period in the history of Florence, +said:</p> + +<div class="poem"><p>The people perished, but the brigands throve.</p></div> + +<p>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 victim +was less destructive to the prosperity of the community than +the legalized brigandage of to-day by which, through a vicious system +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 increased +and increasing value of the money is transferred from the +debtor to the creditor, with punctilious regard for the statutes.</p> + +<p>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.</p> + +<p>With regard to the great body of the working masses it is sometimes +said they have no cause for complaint, that their condition now +is better than ever before.</p> + +<p>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 civilization +of this century have been made by working men, it is manifest +that they are entitled to much more of the comforts and convenience +of life than are now accessible to them. By watchful, repeated, +and aggressive efforts through their trade organizations, the +working men 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.</p> + +<p>The statisticians who seem to be employed by some propaganda to<span class='pagenum'><a name="Page_p058" id="Page_p058">[58]</a></span> +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.</p> + +<p>If you go into the workshops of any large manufacturing enterprise, +while prices are low and lowering, and ask the managers what +they now do when a strike occurs among the workmen, they will tell +you 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 number of the employed."</p> + +<p>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 employer should want to reduce +the 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. of +their number should be discharged, the loss to the working class, as +a body, and to the community at large, would be the same as though +the wages were reduced to $1.50 a day. Until these people who present +statistics can show us how many laborers are left out of employment +there is no possibility of arriving at any correct conclusion as to +what the wage fund is and how much wages are paid.</p> + +<p>The loss to society is much greater when 25 per cent. of the people +are unemployed than if all continued at work upon a 25 per cent. reduction +of wages, because the relegation to idleness of 25 per cent. +of the workmen reduces the producing force, and lessens correspondingly +the aggregate annual production.</p> + + +<p class="caption">THE INTEREST OF THE MINING STATES IN THE REMONETIZATION OF SILVER.</p> + +<p>Those who in the Senate and in the other House of Congress, represent +mining constituencies are taunted with the selfish purpose +of advancing the interests of their own States at the expense of those +of the country. It is sought to discredit the State which I have the +honor in part to represent on this floor, on the ground that the people, +being largely silver miners, have a personal interest in the remonetization +of silver.</p> + +<p>The silver miners, Mr. President, need no defense here or elsewhere. +They have asked no favors from the Government, and ask none now. +They are bold, adventurous, and self-reliant men, who have wandered +across alkaline deserts, and over pathless mountains, braved +the assaults of hostile savages, the miasma of the Isthmus and the +storms of the Cape, and have planted the flag of a high civilization +on the western confines of this Republic. No more patriotic or public-spirited +class of citizens can be found within the borders of the +Union. Their business is an honorable one. When they entered +upon it they, in common with other citizens, had the warrant of +time, and the authority of all writers and thinkers on political economy, +for the belief that silver was, and would ever be, a money metal, +entitled to that full credit which from time immemorial had been +accorded to it. Silver, equally with gold, had been consecrated by +all the ages to the money use, and was dedicated to such use by the +Constitution of the United States.</p> + +<p>When the Constitution declared that Congress should have power +"to coin money and regulate the value thereof" and that "no State +shall * * * make anything but gold and silver coin a tender in payment +of debts," it warranted the belief on the part of all who adopted +the calling and undertook the business of mining, that gold and silver<span class='pagenum'><a name="Page_p059" id="Page_p059">[59]</a></span> +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 warranted +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, capital, +nor skilled labor.</p> + +<p>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 payment of those debts.</p> + +<p>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 subject, +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.</p> + +<p>But, Mr. President, the degree of special interest which the mining +States have in this measure is not to be compared with that of +the other States of the Union.</p> + +<p>According to the report of the Director of the Mint, the total quantity +of silver produced in the United States in the eleven years from +1878 to 1888 inclusive was 406,210,000 fine 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 arithmetic +shows that the difference between the commercial and the +coinage value of that silver was $88,885,000, or an average of $8,080,544 +each year. Assuming that amount to have been the annual difference +between the coinage and commercial value of silver for the five +years preceding 1878, we must add to the $88,885,000 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.</p> + +<p>Having thus demonstrated in dollars and cents the degree of self<span class='pagenum'><a name="Page_p060" id="Page_p060">[60]</a></span>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 advocate +the same cause.</p> + + +<p class="caption">THE INTEREST OF THE NON-MINING STATES IN REMONETIZATION.</p> + +<p>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 1889 was 9.9 +cents.</p> + +<p>The yield of cotton for 1889 was 7,000,000 bales, or 3,500,000,000 +pounds.</p> + +<p>Had not silver been demonetized that cotton would have brought +as good a price to-day as it did in 1873. At the price of 1873 the account +would have stood 3,500,000,000 pounds, at 16.4 cents, $574,000,000. +At the price of 1889 the account stands 3,500,000,000 pounds, +at 9.9 cents, $345,500,000, showing a loss in debt-paying and tax-paying +power on cotton alone (only one article of merchandise) in the +single year 1889, by reason of the fall in prices caused by the demonetization +of silver, of $227,500,000.</p> + +<p>Having shown that the loss to the silver miners by the discount +on silver for the seventeen years from 1873 to 1889 was less than +$130,000,000, 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 country.</p> + +<p>But inasmuch as the cotton crop of 1889 was exceptionally large, +I will, for the purpose of my computation, discard it, and assume +instead that an average yield for the years between 1873 and 1889 +would be 5,000,000 bales per annum—which is a fair average and by +no means high—5,000,000 bales, of 500 pounds each, are equal to +2,500,000,000 pounds.</p> + +<p>At the price of 1873 the result of each year would be 2,500,000,000 +pounds, at 16.4 cents, $410,000,000.</p> + +<p>According to the figures given by the Bureau of Statistics the average +price received each year of the seventeen was 13.1 cents per +pound; 2,500,000,000 pounds, at 13.1 cents per pound, equal $327,000,000, +showing a difference of $83,000,000; that being the average each +separate year for seventeen years, or a total sum for 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 demonetization +of silver.</p> + +<p>This is the enormous tribute which has been exacted of the cotton +industry of this country in behalf of the gold "standard," and of +those who, for their own pecuniary advantage, cunningly induced +the Congress of the United States to demonetize silver. This is the +sum which the planters of this country have lost in debt-paying and +tax-paying power by that mad act of folly. As will be seen at a +glance, it is a loss vastly in excess of that suffered by the silver States +in the discount on the price of silver bullion.</p> + +<p>So that, if the silver miners are taunted with having a personal +interest in the success of the movement for the full remonetization +of silver, the cotton planter must be placed in the same category, +and with ten-fold more reason.</p> + +<p>A like computation with regard to wheat will show a loss in debt-paying +and tax-paying power of not less than $100,000,000 a year to +the farmers of the North and West, by reason of the demonetization +of silver—a total of $1,700,000,000 in the article of wheat alone in +seventeen years.<span class='pagenum'><a name="Page_p061" id="Page_p061">[61]</a></span></p> + +<p>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.</p> + +<p>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.</p> + +<p>But, however large the direct loss to the debtors and to the country +by reason of falling prices, the losses that are indirect are of infinitely +greater magnitude, and stand out like a great mountain of +wrong superimposed upon the most deserving class in the community, +whose interests it should be the paramount duty of Government +to protect, a wrong more calamitous in its consequences than +any of the multitudinous wrongs which a shrinking volume of money +inflicts upon society.</p> + + +<p class="caption">THE ENORMOUS LOSS OF POTENTIAL WEALTH THROUGH INVOLUNTARY IDLENESS.</p> + +<p>The political economist, Mr. President, deals with property <i>in esse</i>, +and producers employed. I propose for a moment to deal with property +<i>in posse</i> and producers unemployed. The wealth which the political +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 disorganization +of industry inflicts on society.</p> + +<p>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 consideration +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 idleness.</p> + +<p>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 corresponding +loss of wealth to the country.</p> + +<p>The most thorough and painstaking investigation into the conditions +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.</p> + + +<p class="caption">SOME STATISTICS OF THE UNEMPLOYED.</p> + +<p>An examination of the work of that bureau shows that, in 1887, +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.</p> + +<p>Now, 240,000 people idle for one-third of their whole time is equivalent, +in money loss, to the total idleness of one-third of that num<span class='pagenum'><a name="Page_p062" id="Page_p062">[62]</a></span>ber, +or 80,000 people, for the entire year. The whole number of +persons enrolled for labor in the State being 816,470, this is equivalent +to the total idleness of one-tenth of the people engaged in all +occupations.</p> + +<p>If a number equivalent to one-tenth of the people in all occupations +are idle twelve months in the year in a State like Massachusetts, +where labor is better organized, better classified, and more efficiently +ordered than elsewhere in this country, it can not be presumed that +any other State of the Union will exhibit a smaller proportion of +unemployed laborers.</p> + +<p>The Census Report of 1880 states the number of persons employed +in all occupations as 17,392,099, out of a population of 50,155,783, or +a percentage of 34.68 of the entire population. Our present population +being not less than 65,000,000, if we assume, as we are warranted +in doing, that a like proportion of the population is engaged in occupations +of all sorts, it is clear that we have to-day a working population +of 22,254,000 persons.</p> + +<p>Accepting as correct the careful deductions from the Reports of +the Massachusetts Bureau of Labor that a number equivalent to ten +per cent. of the people are always out of employment we find that at +the present time there are 2,250,000 persons involuntarily 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 +the opportunity to earn a livelihood for themselves and families.</p> + +<p>Were the business of the country in the active condition in which +it could not avoid being if our money system were perfectly adjusted +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 than $2. This would make but the moderate sum of $50 a +month for each workman, which, under the most thrifty system of +household economy, can not be considered more than enough for +the support of an American family.</p> + + +<p class="caption">THE WAGE LOSS FROM INVOLUNTARY IDLENESS.</p> + +<p>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 +as the daily sum which is lost to the wage earners of the United +States by the non-employment of labor. This is a money loss of +$27,000,000 a week, $117,000,000 a month, or the amazing sum of +$1,404,000,000 a year. A saving of this sum for a year and three +months would pay our entire national debt. This being the loss in +a single year, we can imagine (making due allowance for difference +in the numbers of the population) how stupendous has been the loss +to the nation during the past seventeen years, a loss exceeding incomparably +all other losses whatsoever.</p> + +<p>If a crop of wheat be lost, it is appropriately noted as a public misfortune; +if a city be burned down, or swept away by flood, it is +properly regarded as a great national calamity, and the sympathies +of all the people go out in unstinted measure to the sufferers. But +here is a loss as real and as deplorable as any ever caused by flood +or fire—a loss whose consequences, while not so apparent, are as destructive +to national prosperity as the burning of ten cities, or the +occurrence of one hundred and forty Johnstown disasters every year, +and always to the people who can least afford it. Yet it passes +almost wholly unheeded except by the sufferers.</p> + +<p>A war that would take a million of men from industry and deprive +the country of the production which would result from their<span class='pagenum'><a name="Page_p063" id="Page_p063">[63]</a></span> +labors, would be regarded as a calamity of unsurpassable magnitude, +yet a shrinkage in the volume of money relatively to population +withdraws much more than that number from productive +pursuits, and without the salutary discipline and restraints of military +life, subjects them to conditions of which the unavoidable results +are poverty and crime.</p> + +<p>Imagine, Mr. President, the unhappiness, discontent, and even despair +implied in the mere statement that 2,000,000 men are constantly +out of employment; (or, what amounts to the same thing, that three +times that number are idle for four months in the year!) Imagine, +what it means to the working people of this country to be deprived +of the enormous sum of $1,400,000,000 a year.</p> + +<p>But, aside from the effect on the individual, what benumbing consequences +are entailed upon the nation by the idleness of so large a +number of its people. The loss of the wealth which the labor of those +men might have created is a loss never to be retrieved. When the +money volume of a country is sufficient to keep prices from falling, +and thus to encourage capital to seek productive enterprises, in +which labor is employed, every willing man is kept at work, and no +country can enjoy any higher degree of prosperity than when all its +people are employed, and the products of their labor equitably distributed.</p> + +<p>Much, I believe, of the prejudice against silver money arises from +an idea, conscientiously entertained, by many, that gold money has +the greater "intrinsic value." I shall, therefore, Mr. President, at +the risk of being a little abstruse, discuss that point.</p> + + +<p class="caption">THE MEANING OF VALUE.</p> + +<p>No discussion of the subject of money can be intelligently conducted +without a correct conception of the meanings attaching to the +terms employed. For a misconception of those meanings is the root +of much of the confusion and difficulty by which the subject is surrounded.</p> + +<p>"Value" is a word which, of necessity, is more frequently used—and, +I will add, more frequently misused and misunderstood—than +any other employed in the discussion of economic science. Volumes +have been written upon it, and yet, from the daily misapplication of +the word in leading magazines and newspapers, it is evident that its +meaning is very imperfectly understood.</p> + +<p>The idea involved in the word "Value" is so broad and pervasive +that within the limits of a speech it would be impossible to discuss +it in all its bearings. I shall not, therefore, at this time, do more +than present what I conceive to be a basic definition of it.</p> + +<p>Value is human estimation placed upon desirable objects whose +quantity is limited, and whose acquisition involves sacrifice. In +order that an object may have value it must not only be the subject +of human desire, but there must be a limitation of its quantity, and +its acquisition must demand a sacrifice from him who would obtain +it. The term "intrinsic value" is used by many writers with a total +disregard of the idea involved in the word <i>value</i>. An article may +have estimable qualities that are intrinsic, but no article whatever +can have intrinsic value. Its "value" is the mental estimation of +its qualities, as modified by the limitations of its quantity and the +amount of sacrifice necessary to obtain it. In other words, value is +subjective, not objective. In economic discussion, however, value +is treated as though it resided in the object, rather than in the mind, +and while, for convenience, I may occasionally use it in that sense, +it is important to bear in mind the distinction.<span class='pagenum'><a name="Page_p064" id="Page_p064">[64]</a></span></p> + +<p>In that acceptation, value is usually divided into value-in-use, +and value-in-exchange. Certain esteemed qualities of an object +may make it of great value-in-use; but unless its acquisition demand +sacrifice, it can have no value-in-exchange. It is only with +this class of value that economists deal. No matter how important +the intrinsic qualities of any article may be, if there be no limitation +of its quantity and its acquisition requires no sacrifice, it can have no +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 quantity. By reason of its universality and accessibility, air +requires no sacrifice to get it. If, however, circumstances should +render air limited in quantity it is conceivable that it might become +of surpassing value. A man confined in the "Black Hole" of Calcutta +would give a fortune for free access to air. So water, where +freely obtainable, without sacrifice, although indispensable to life, +has no value in the economic sense—no value in exchange. But +when not so obtainable, as in populous cities, where sacrifice of time +and labor would be necessary to obtain it from river, lake, or spring, +people pay for the convenience of having it in their homes. The indispensable +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.</p> + +<p>But 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.</p> + +<p>To illustrate: A generation ago the cradle with which wheat was +harvested was said to possess intrinsic value. It was undoubtedly +one of the most useful of all the articles needed by man. All that +was then in that machine is in it still, yet the value is gone. Had +the value been something that was intrinsic, had it resided in the +object, and not in the mind, that cradle would still be worth all that +it ever was. So, on the other hand, an article may possess most +estimable qualities, but if those qualities are not known or recognized +by the human mind the article will have no value.</p> + +<p>A few years ago cotton seed had no value as an article of general +commerce. To-day it is exceedingly valuable, because it has been +found to possess estimable qualities not before suspected.</p> + +<p>Indeed so strongly does the idea of value rest upon the estimation +of the mind that it is not even necessary for an article to possess in +reality any desirable quality whatever in order to have value. It +will be sufficient if such quality is popularly attributed to it. Numbers +of instances could be cited in which there was present no element +of value except limitation of quantity, added to a mere belief, +or conception of the mind, that the article had desirable qualities. +Many will remember that a few years ago a herb called "Cundurango" +was introduced into this country from Central America. It +was generally believed to possess healing qualities in cases of cancer, +and so came to have great value. As soon as this popular illusion +was dispelled the article ceased to have even the slightest +value.</p> + +<p>Land being indestructible and irremovable, is believed to be the +embodiment of the idea of intrinsic value. Take, then, a lot on +Madison Avenue, New York; it is worth perhaps a thousand times +as much as a lot of equal size in a village remote from the city. +What proportion of its high price is derived from what is called its<span class='pagenum'><a name="Page_p065" id="Page_p065">[65]</a></span> +greater "intrinsic" value? A lot on that fashionable thoroughfare +has no intrinsic attribute, or quality, that is not equally the attribute +or quality of the village lot. The difference in its value, or, +more correctly, the difference in the estimation in which it is held, +as compared with that attaching to the village lot, is derived wholly +from circumstances that are extrinsic, not from qualities that are +intrinsic.</p> + +<p>The action of society in utilizing land in the neighborhood of the +city lot by building up around it gives that lot a value greater than +one of equal size elsewhere.</p> + +<p>But in order that a thing may subserve a useful or beneficent purpose +it is not necessary that the quality which enables it to subserve +that purpose should be intrinsic or inherent in the thing itself.</p> + +<p>To apply this reasoning to the subject under discussion—whatever +intrinsic qualities the metal, gold, may possess, they confer no force +whatever on gold-money.</p> + + +<p class="caption">WHAT IS MONEY?</p> + +<p>The money of a country is that thing, whatever it may be, which +is commonly accepted in exchange for labor or property and in payment +of debts, whether so accepted by force of law, or by universal +consent. Its value does not arise from the intrinsic qualities which +the material of which it is made may possess, but depends entirely +on the extrinsic qualities which law, or general consent, may +confer.</p> + +<p>Money is of transcendent importance to civilization. It is the +physical agency to which society has assigned the function of measuring +all equities, and it is the sole agency upon which that incomparable +function has been conferred. It is in terms of money that +society computes the material value of all human sacrifice, alike the +highest effort of genius and the daily toil and sweat of the millions +who labor.</p> + +<p>In order to measure equitably the natural and inevitable mutations +in the value of other things, money should itself be of unchanging +value. That is to say, any given amount of money should, so far as +human foresight can regulate it, require at all times an equal amount +of sacrifice for its acquisition. Thus, in the case of a contract +made to-day, requiring the payment of a dollar twelve months hence, +that dollar when due should exact from the debtor precisely that +amount of sacrifice, and no more, which would be required had he +paid the debt the day after contracting it.</p> + +<p>No one will deny that the most important quality that money +can possess is that it shall truthfully measure and state equities.</p> + +<p>As I have shown by the figures heretofore cited, gold has risen in +value between 30 and 40 per cent. since the demonetization of silver. +It is not therefore so faithful a measure of value as is silver, which +as illustrated by a variety of examples, has maintained almost undisturbed +its relation to commodities.</p> + + +<p class="caption">THE VALUE OF MONEY, AS SUCH, NOT IN THE MATERIAL BUT IN THE STAMP. MONEY +IS AN ORDER FOR PROPERTY AND SERVICES.</p> + +<p>The logic of the situation, and the reasoning of all the leading authorities +on money, lead irresistibly to the conclusion that its value +does not reside in the material, but in the stamp; in other words, +on the legal-tender function impressed on that material. It is an +order for property and services.<span class='pagenum'><a name="Page_p066" id="Page_p066">[66]</a></span></p> + +<p>Aristotle, writing of money, says:</p> + +<div class="blockquot"><p>Money by itself * * * has value only by law, and not by nature; so that a +change of convention between those who use it is sufficient to deprive it of all its +value and power to satisfy all our wants.</p></div> + +<p>And again he says:</p> + +<div class="blockquot"><p>But with regard to a future exchange (if we want nothing at present) money +is, as it were, our security that it may take place when we do want something.</p></div> + +<p>John Locke, in "Considerations," etc., regarding money, published in 1691, says:</p> + +<div class="blockquot"><p>Mankind, having covenanted to put an imaginary value upon gold and silver, by +reason of their durableness scarcity, and not being very liable to be counterfeited, +have made them, by general consent, the common pledges, whereby men are assured, +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 metals, made the common barter, is nothing +but the quantity which men give or receive of them; they having, as money, +no other value but as pledges to procure what one wants or desires.</p></div> + +<p>Baudeau, reputed one of the most eminent of an early school of +French economists, says:</p> + +<div class="blockquot"><p>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 human race.</p> + +<p>It is a kind of a bill of exchange, or order payable at the will of the bearer.</p></div> + +<p>Adam Smith says:</p> + +<div class="blockquot"><p>A guinea may be considered as a bill for a certain quantity of necessaries and +conveniences upon all the tradesmen in the neighborhood.</p></div> + +<p>Jevons's "Money and Exchanges," chapter 8, says:</p> + +<div class="blockquot"><p>Those who use coins in ordinary business need never inquire how much metal +they contain. Probably not one person in two thousand in this kingdom knows, +or need know, that a sovereign should contain 123.27447 grains of standard gold.</p> + +<p>Money is made to go. People want coin, not to keep in their own pockets, but +to pass it off into their neighbors' pockets.</p></div> + +<p>Henry Thornton, in his work on Paper Credit, says:</p> + +<div class="blockquot"><p>Money of every kind is 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 is +merely in instrument by which the purchasable stock of the country is distributed +with convenience and advantage among the several members of the community.</p></div> + +<p>John Stuart Mill says:</p> + +<div class="blockquot"><p>The pounds or shillings which a person receives are a sort of ticket or order +which he can present for payment at any shop he pleases, and which entitle him +to receive a certain value of any commodity that he makes choice.</p></div> + +<p>McLeod, Elements of Banking, Chapter I, says:</p> + +<div class="blockquot"><p>When persons take a piece of money in exchange for services, or products, they +can neither eat it, nor drink it, nor clothe themselves with it. The only reason +why they take it is, because they believe they can exchange it away whenever +they please for other things which they require.</p></div> + +<p>On that view of money McLeod feels justified in styling it credit, +and he quotes in support of such a use of the term credit, Burke's +description of gold and silver as "the two great recognized species +that represent the lasting conventional credit of mankind."</p> + +<p>Prof. Francis A. Walker, Money, Trade, etc., page 25, speaking +of carved pebbles, glass beads, shells and red feathers, used as money +in certain countries at certain times, says:</p> + +<div class="blockquot"><p>They were good money, though serving no purpose but ornament and decoration. +They were desired by the community in general; men would give for +<span class='pagenum'><a name="Page_p067" id="Page_p067">[67]</a></span>them the fruits of their labor, knowing that with them they could obtain most +conveniently in time, in form, and in amount, the fruits of the labor of others.</p></div> + +<p>On page 30 he says:</p> + +<div class="blockquot"><p>Men take money with the expectation of parting with it; this is the use to +which they mean to put it.</p></div> + +<p>Again, Mr. Walker says:</p> + +<div class="blockquot"><p>Money is that which passes freely from hand to hand throughout the community, +in final discharge of debts and full 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 turn, to tender it to others in discharge of +debts or payment for commodities.</p></div> + +<p>Even Bonamy Price, who is wedded to the gold standard, in his +Principles of Currency, says:</p> + +<div class="blockquot"><p>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 valuable except for the work it +performs, so long as it remains in the state of coin. It can be converted at pleasure +into an end, into an article of consumption, by being sold; till then it is a +mere tool.</p></div> + +<p>How many people ever so "convert" it that earn it?</p> + +<p>The great philosopher, Bishop Berkeley, one of the most acute reasoners, +in my judgment, that modern times have produced, in the +"Querist," published in 1710, propounds the following pertinent and +suggestive questions:</p> + +<div class="blockquot"><p>Whether the terms "crown," "livre," "pound sterling," etc., are not to be considered +as exponents, or denominations? And whether gold, silver, and paper are +not tickets or counters for reckoning, recording, or transferring such denominations? +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?</p></div> + +<p>Dugald Stewart, professor of moral philosophy in the University +of Edinburgh, in his Lectures on Political Economy (Part I, Book +II), said:</p> + +<div class="blockquot"><p>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 functions +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.</p> + +<p>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 now in existence +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 disposed +to think, with Bishop Berkeley, whether the true idea of money, as such, be +not altogether that of a ticket or counter.</p></div> + +<p>Appleton's Cyclopedia, defining money, says:</p> + +<div class="blockquot"><p>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.</p></div> +<p><span class='pagenum'><a name="Page_p068" id="Page_p068">[68]</a></span></p> + + +<p class="caption">BASTIAT'S DESCRIPTION OF THE CROWN PIECE.</p> + +<p>Bastiat, in his "Harmonies Economiques," describing money, used +the following illustration:</p> + +<div class="blockquot"><p>You have a crown piece. What does it mean in your hands? If you can read +with the eye of the mind the inscription it bears, you can distinctly see these +words: Pay to the bearer a service equivalent to that which he has rendered to +society. Value received and stated, proved and measured by that which in on +me.</p></div> + +<p>No words could more correctly describe the unit in a properly +regulated system of money. And notwithstanding the attempt to +discredit silver coinage, no piece of money, as I have already shown, +would better answer, by its steadiness of value, this description of +Bastiat's than would the American silver dollar if silver were remonetized.</p> + +<p>So far as it applied to gold Bastiat'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 constantly +narrowing by being limited to the yield of a single metal +whose annual output would hardly more than meet the demand for +the arts.</p> + +<p>Were Bastiat alive at this time he would reform his description so +as to make it read as follows: "You have an American gold piece. +You have had it hoarded in a bank vault for fifteen years. What +does it mean in your hands? If you can read with the eye of the +mind the inscription it bears, you can distinctly see these words: +'Pay to the bearer 50 per cent. more service than he has rendered to +society; value not received or stated on me, but resulting from a cunning +manipulation of the law of legal tender, through the influence +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 depriving +society of its use for seventeen years.'"</p> + +<p>When people are found everywhere working for money and not +for the things which they really need, it is clear that they are working +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 by parting with the money. To modify and elaborate Bastiat's +description of the crown piece, it might be said of the Money +Unit of the United States under a properly regulated system:</p> + +<p>"You have a dollar. What does it mean in your hands? If you +can read with the eye of the mind the inscription it bears, you can +distinctly see these words: To all to whom this may come: Greeting. +This is a dollar—a unit of money—part of the great instrumentality +created by society to effect the multitudinous exchanges +of property and services among men. The amount of its command +is constant, because the increase in the volume of money is regulated +by the sovereign authority of the nation, with strict regard to +the increase of population and demand—hence the value of this unit +remains unchanging through time. It is an order for all property +on sale, and all services for hire; the proportionate amount of such +property and service to which its possessor is entitled being fixed +by the universal competition to get it."</p> + + +<p class="caption">GRESHAM'S LAW.</p> + +<p>Many persons fear an outflow of gold from the operation of what +is known as "Gresham's law," namely, that "bad money will expel +good." Sir Thomas Gresham, a financier of Elizabeth's time, stated<span class='pagenum'><a name="Page_p069" id="Page_p069">[69]</a></span> +that if a number of the gold or silver coins of any given denomination +were deprived of part of their pure metal, and so made cheaper +than the remainder, a successful circulation of the coins thus deprived +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:</p> + +<div class="blockquot"><p>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—</p></div> + +<p class="noidt">and avoid the light or abraded coins.</p> + +<p>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.</p> + +<p>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.</p> + +<p>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 contract is the +cheapest money, then that is the best money, that is the honest +money, and that is the only tolerable money.</p> + +<p>If that be the sort of "cheap" money that drives out the dear +money, then manifestly the dear money is bad money.</p> + +<p>A distinguished official of the Government, who was before a committee +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 borrowed +a dollar, and, through a badly regulated money-system, are +made to pay a dollar worth 25 per cent. more than the dollar you borrowed, +you are not paying the best money, but the worst money; not +an honest dollar, but a swindling and dishonest dollar.</p> + + +<p class="caption">THE CREDITORS' DEMAND FOR THE "BEST MONEY."</p> + +<p>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 resorted +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 <i>dearest</i> money—the money that costs the people the most sweat +and toil to obtain and which, as time passes, grows dearer and +dearer.</p> + +<p>This cry for "the best money" is at last beginning to be recognized +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<span class='pagenum'><a name="Page_p070" id="Page_p070">[70]</a></span> +affect to believe that gold is, by nature, the only money metal, ignoring +the fact that until silver was displaced by hostile legislation it +was, and for four thousand years had been, the principal money metal +of the world. But they will no longer be permitted to hide their sinister +purpose under the cloak of a demand for the "best money." The +masses of the people are aroused on this subject and are beginning to +understand it.</p> + +<p>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 he bargained for, and +which is all that the creditor is equitably entitled to receive. In +other words, the money of the contract, not a money whose exactions +are increasing at the rate of 2 per cent. per annum. As McCulloch +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.</p> + +<p>But, 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:</p> + +<p>A usurer of the coarser type had lent $10,000 on a neighboring +farm, for 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 banker into his confidence. He informed the +banker that he wanted to get possession of this farm, but 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 I can obliterate +from the note and mortgage all trace of the rightful amount +($10,000), and that done, I can insert $15,000. Then, with the genuine +signatures on the note and mortgage I can bring suit, and as +the farm will not bring more than the face of the note, I shall succeed +to the property."</p> + +<p>His friend, the banker, however, advised against this course, which +he characterized as not only dishonest, but vulgar, and as subjecting +the perpetrator of the act to serious penalties. "Honesty" said the +banker, "is the best policy." "But," he continued, "I can suggest a +plan by which you may accomplish the same end without running +counter to law, or the views of society. Why not join our propaganda +in advocacy of 'honest money.' Gold is decreasing in quantity, +and as the world has been ransacked for it in vain, it is likely +to continue decreasing. If we can strike down the twin metal, silver, +and devolve the entire money function on gold, it will double +the purchasing power of money. Then the foreclosure of your +mortgage will be sure to take your neighbor's farm, and probably +leave him in your debt besides. Instead of being punished for this, +you will receive the plaudits of the 'best society' for the <i>finesse</i> you +have displayed and the firm stand you have taken in favor of honest +money, and you will take high rank among 'the wisest and most +conservative of our financiers.' If your neighbor makes any objection +to your action, you may be able to secure his incarceration as a +lunatic, but if not, he will come to be regarded in the community as +a dishonest 'crank' who wishes to pay his debts in a depreciated +money; for it is the constant and assiduous care of our guild to teach +that only the dearest money, that which is the most difficult for the +laborer, the farmer, and the mechanic to get, is honest money, and +the dearer it is the more honest it is."</p> +<p><span class='pagenum'><a name="Page_p071" id="Page_p071">[71]</a></span></p> + +<p class="caption">ALL MONEY SHOULD BE LEGAL TENDER.</p> + +<p>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.</p> + +<p>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.</p> + +<p>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 conditions +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 dollars' +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 regulation, +the legal-tender basis on which, in the ultimate analysis, all +business rests.</p> + + +<p class="caption">MONEY A MEASURE OF VALUE.</p> + +<p>There is nothing upon which the prosperity and happiness of a +people so much depend as on the integrity of their measure of values.</p> + +<p>It is universally admitted that after the making of a contract requiring +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 foundation +of the contract. These measures, to be just, must remain unchanged. +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 resolved, +is constantly changing? Its "value" is but another name +for its purchasing or measuring power. In the case of all time contracts, +therefore, any change in the value of money works a destruction +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 regulation +of the volume in circulation.</p> + +<p>In a note to his edition of Adam Smith's "Wealth of Nations," +(page 502) Mr. J. R. McCulloch says:</p> + +<div class="blockquot"><p>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 Government to adopt every practicable +means for rendering all foot-rules of the same length, and all bushels of the same +capacity, it is still more incumbent upon it to omit nothing 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.</p></div> + +<p>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.<span class='pagenum'><a name="Page_p072" id="Page_p072">[72]</a></span></p> + +<p>As value resides in human 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 of value in the sense that it is a measure of +the average human judgment—from which results price. As Mr. +McCulloch says, no means known to science or art should be left untried +to keep the value of money unchanging.</p> + +<p>When a man promises to deliver money or makes any time contract, +he makes a mental calculation as 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 passes through his mind the +sacrifice 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 interest on plant.</p> + +<p>I knew a cotton manufacturer who wanted $10,000. His business +was good. He was sober, honest, and industrious; had a thorough +knowledge of his trade; managed his employés himself, and took +the greatest pains to conduct his business on the strictest business +principles. He wanted the money to make some improvements in +his factory. He knew how many spindles and looms he had; how +much could be done with a pound of cotton, how much it cost, 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." +Said he, "My cloth is worth 10 cents a yard; it sells at that rate in +unlimited quantities by wholesale; nobody can make it any cheaper; +but I am not working a gold mine; I am not manufacturing legal-tender +paper money, and the only way I can get money is to swap +my cotton cloth for it. I will give you my note for 100,000 yards of +cotton cloth, which will be equal to $10,000, and will pay 2 inches a +yard each year as interest."</p> + +<p>This was satisfactory to the capitalist, and the note was made, +signed, and delivered accordingly, and the improvements were made +in the factory.</p> + +<p>During the year everything went smoothly; the spindles and looms +worked well, repairs to machinery were light; cotton had been +bought at proper rates; and no improved processes had been discovered +or applied in the production of cotton-cloth. There was no +hitch in any direction.</p> + +<p>At the appointed time, the creditor called for his cloth. "I am +ready," said the debtor, "to pay the hundred thousand yards of cotton +cloth, with interest." When he came to measure it off, however, +he was astounded to find he was short. Some painful suspicions +crossed his mind. It seemed as though somebody had either robbed +him of cloth, or else he had not manufactured as much of it as he +had supposed. There did not seem to be so many yards of the cloth +as there ought to be. He knew he had used the same number of +pounds of cotton that it had been his custom to use for 100,000 yards +of cloth and for 200,000 inches of cloth in addition; still, there was +no denying the fact of the shortage.</p> + +<p>He measured it again and again, and had finally to admit that he +was unable to keep his engagement. This was a source of great +distress to him. He could not sleep that night. But, the creditor +being importunate, the cotton manufacturer next morning borrowed +enough cloth from the proprietor of a neighboring factory and paid +his obligation. But, not understanding how his carefully made plans +had failed, and in order to avoid similar mistakes in the future, he<span class='pagenum'><a name="Page_p073" id="Page_p073">[73]</a></span> +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.</p> + +<p>In talking the matter over with his neighbor, the cotton manufacturer +said: "I have been swindled; they 'rung in' on me a lengthened +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."</p> + +<p>"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."</p> + +<p>In its ultimate analysis, money is the yard-stick, the bushel and +the pound weight of commerce.</p> + +<p>When you shrink the volume of money, and so increase the measuring +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.</p> + +<p>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.</p> + + +<p class="caption">THE VALUE OF MONEY FIXED BY THE COMPETITION TO GET IT.</p> + +<p>Everybody 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.</p> + + +<p class="caption">WHAT IS THE DEMAND FOR MONEY?</p> + +<p>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 maximum. +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 throughout +the entire range of commodities it is manifest that the demand for +money equals at least the united demands for all other things.</p> + +<p>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.</p> + + +<p class="caption">WHAT IS THE SUPPLY OF MONEY?</p> + +<p>Such being the demand for money, what is the supply? It is the +total number of units of money in circulation (actual or potential) +in any country.</p> + +<p>The force of the demand for money operating against the supply<span class='pagenum'><a name="Page_p074" id="Page_p074">[74]</a></span> +is represented by the earnest, incessant struggle to obtain it. All +men, in all trades and occupations, are offering either property or +services for money. Each shoemaker in each locality is in competition +with every other shoemaker in the same locality, each hatter +is in competition with every other hatter, each clothier with every +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 +average price (excellence of quality being taken into account) will +fix the market value of shoes in money; and conversely, will fix the +value of money in shoes. So with the hatters as to hats, so with the +tailors as to clothes, and so with those engaged in all other occupations +as to the products respectively of their labor.</p> + + +<p class="caption">NO ALTERNATIVE FOR MONEY.</p> + +<p>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.</p> + +<p>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 of 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 continued scarcity, +beef continue to rise, the demand will further diminish, until +finally it may altogether cease and center on something else. So in +the matter of clothing. If any one fabric become scarce, and consequently +dear, the demand will diminish, and, if the price continue +rising, it is only a question of time for the demand to cease and be +transferred to some alternative.</p> + +<p>But 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 +it. It may become so scarce that one dollar at the end of a decade +may buy ten times as much as at the beginning; that is to say, it +may cost in labor or commodities ten times as much to get it, but at +whatever cost, the people must have it. Without money the demands +of civilization could not be supplied.</p> + +<p>Money was the most potent instrumentality in the evolution of +society from a low to a high plane of civilization. It is valueless +to man in isolation. It is indispensable to man in organized society. +It is as necessary for the proprietary distribution of wealth +as railroads and steamships are to its physical distribution. The +aggregate force of the demand for money in any country depends +upon the numbers of the population; with a stationary population +the demand is steady, with an increasing population the demand +increases, and in order to maintain undisturbed the equation +of supply and demand the volume of money should be increased in +at least a ratio corresponding to that of the increase of population.</p> + +<p>There are certain circumstances that to some extent disturb +the relations between population and money supply, such as the +broadening of the areas of population, and the multiplication of +money centers. These circumstances might render necessary a larger +percentage of increase in the money volume than would be indicated +by the increase of the population.</p> + +<p>But under any circumstances the smallest money-increase that +will suffice to maintain the equity of time contracts is an increase +corresponding to the increase of numbers of the population.<span class='pagenum'><a name="Page_p075" id="Page_p075">[75]</a></span></p> + +<p>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 increased, +there is no possibility of a change in the value of the unit +of money.</p> + +<p>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 unlimited +command over such objects, is, and ever will be, eager, intense, +and unwavering.</p> + +<p>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, instead +of increasing in proportion to demand, is every day becoming +less and less capable of meeting the requirements of the arts alone?</p> + + +<p class="caption">THE QUANTITY OF MONEY IN CIRCULATION SHOULD INCREASE IN A RATIO NOT LESS +THAN THE RATIO OF INCREASE OF POPULATION.</p> + +<p>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 per cent. 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?</p> + +<p>The present monetary circulation of this country including gold, +silver, and paper, is represented to be $1,700,000,000. As our population +doubles in thirty years, the rate of increase is 3<small><sup>1</sup>⁄<sub>3</sub></small> per cent.</p> + +<p>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 becomes +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.</p> + + +<p class="caption">THE QUANTITATIVE THEORY OF MONEY—THE VALUE OF EACH DOLLAR DEPENDS ON +THE NUMBER OF DOLLARS OUT.</p> + +<p>Thus by the universal competition to get it the value of the dollar +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.</p> + +<p>Notwithstanding the variance sometimes found between the premises +and the conclusions of economic writers, there is no economist +of repute who does not admit this to be a fundamental principle.</p> + +<p>On the theory I have propounded therefore 3<small><sup>1</sup>⁄<sub>3</sub></small> 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.<span class='pagenum'><a name="Page_p076" id="Page_p076">[76]</a></span></p> + +<p>Assuming the population of to-day to be 65,000,000 and the ratio +of its annual increase 3<small><sup>1</sup>⁄<sub>3</sub></small> per cent., the population of next year will +be 67,166,600. The percentage of monetary increase to be provided +for that year should therefore be baaed on the increased number. +And so on for each succeeding year.</p> + +<p>I have thought best to collate a variety of citations from the most +distinguished authorities on financial economy to support my contention +that, <i>ceteris paribus</i>, the value of each dollar depends on the +number of dollars in circulation.</p> + +<p>John Locke, in his "Considerations," etc., published in 1690, said:</p> + +<div class="blockquot"><p>Money, while the same quantity of it is passing up and down the kingdom in +trade, is really a standing measure of the falling and rising value of other things +in reference to one another, and the alteration in price is truly in them only. But +if you increase or lessen the quantity of money current in traffic in any place, then +the alteration of value is in the money.</p></div> + +<p>Locke further said:</p> + +<div class="blockquot"><p>The value of money in any one country, is the present quantity of the current +money in that country, in proportion to the present trade.</p></div> + +<p>The historian, Hume, says:</p> + +<div class="blockquot"><p>It is not difficult to perceive that it is the total quantity of the money in circulation, +in any country, which determines what portion of that quantity shall exchange +for a certain portion of the goods or commodities of that country.</p> + +<p>It is the proportion between the circulating money and the commodities in the +market which determines the price.</p></div> + +<p>Fichte says:</p> + +<div class="blockquot"><p>The amount of money current in a state represents everything that is purchasable +on the surface of the state. If the quantity of purchasable articles increases +while the quantity of money remains the same, the value of the money +increases in the same ratio; if the quantity of money increases, while the quantity +of purchasable articles remains the same, the value of money decreases in the +same ratio.</p></div> + +<p>James Mill, in his treatise on political economy, says:</p> + +<div class="blockquot"><p>And again, 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.</p></div> + +<p>John Stuart Mill (Political Economy) says:</p> + +<div class="blockquot"><p>The value of money, other things being the same, varies inversely as its quantity; +every increase of quantity lowering the value, and every diminution raising +it in a ratio exactly equivalent.</p></div> + +<p>And again:</p> + +<div class="blockquot"><p>Alterations in the cost of the production of the precious metals do not act upon +the value of money, except just in proportion as they increase or diminish its +quantity.</p></div> + +<p>Ricardo (reply to Bosanquet) says:</p> + +<div class="blockquot"><p>The value of money in any country is determined by the amount existing. * * *</p> + +<p>That commodities would rise or fall in price in proportion to the increase or diminution +of money, I assume as a fact that is incontrovertible. * * *</p></div> + +<p>Ricardo further says:</p> + +<div class="blockquot"><p>There can exist no depreciation in money but from excess; however debased a +coinage may become, it will preserve its mint value; that is to say, it will pass in +circulation for the intrinsic value of the bullion which it ought to contain, provided +it be not in too great abundance.</p></div> + +<p>In this case Ricardo's illustration is the supposed case of a country +actually using one million gold pieces each containing 100 grains. +He maintains that they would be of the same purchasing power, if +the Government took out 1 grain, or even 50 grains, the quantity remaining +the same, but that if, from the grains so deducted, an addi<span class='pagenum'><a name="Page_p077" id="Page_p077">[77]</a></span>tional +number of pieces were struck, a corresponding depreciation +would result.</p> + +<p>William Huskisson ("The Depreciation of the Currency," 1819), +says:</p> + +<div class="blockquot"><p>If the quantity of gold in a country whose currency consists 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.</p></div> + +<p>Sir James Graham says:</p> + +<div class="blockquot"><p>The value of money is in the inverse ratio of its quantity; the supply of commodities +remaining the same.</p></div> + +<p>Torrens, in his work on Political Economy, says:</p> + +<div class="blockquot"><p>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.</p></div> + +<p>Wolowski says:</p> + +<div class="blockquot"><p>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.</p></div> + +<p>Cernuschi says:</p> + +<div class="blockquot"><p>The purchasing power of money is in direct proportion to the volume of money +existing.</p></div> + +<p>Prof. Francis A. Walker, in his work on "Money" (page 57), +says:</p> + +<div class="blockquot"><p>The value of money in any country is determined by the amount existing.</p> + +<p>Its [money's] power of acquisition depends not on its substance, but on its +quantity. [Paulus, author of the Pandects, sixth century.]</p></div> + +<p>Professor De Colange, in the American Cyclopedia of Commerce, +article on "Money," says:</p> + +<div class="blockquot"><p>The rate at which money exchanges for other things is determined by its quantity. * * *</p> + +<p>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 commodities +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 commodities +will then have to be exchanged for a less amount of money. * * *</p> + +<p>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.</p></div> + +<p>A curtailment of the volume of money in a country will, <i>ceteris +paribus</i>, increase the value of the money of that country. All the +authorities agree that this law applies to all forms of money, whatever +the material; so that it applies to paper money with precisely +the same force that it applies to metallic money.</p> + +<p>Mr. Stanley Jevons, in his work on "Money and the Mechanism of +Exchange," says:</p> + +<div class="blockquot"><p>There is plenty of evidence to prove that an inconvertible paper money, if carefully +limited in quantity, can retain its full value. Such was the case 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.</p></div> + +<p>Mr. Gallatin said:</p> + +<div class="blockquot"><p>If in a country which wants and possesses a metallic currency of seventy millions +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.</p></div><p><span class='pagenum'><a name="Page_p078" id="Page_p078">[78]</a></span></p> + +<p>In his Proposal for an Economic and Secure Currency Ricardo +says:</p> + +<div class="blockquot"><p>A well regulated paper currency is 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 as one or the most important steps toward the improvement +of commerce and the arts of civilized life; but it is no less true, that with the +advancement of knowledge and science, we discover that it would be another improvement +to banish them again from the employment to which, during a less enlightened +period, they had been so advantageously applied.</p></div> + +<p>Mr. J. R. McCulloch, in commenting on the principles of money +laid down by Ricardo, says:</p> + +<div class="blockquot"><p>He examined the circumstances which determine the value of money * * * +and be showed that * * * its value will depend on the extent to which it may +be issued compared with the demand. This is a principle of great importance; +for, it shows that intrinsic worth is not necessary to a currency, and that provided +the supply of paper notes, declared to be a legal tender, be sufficiently limited, +their value may be maintained on a par with the value of gold, or raised 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 +coin at the pleasure of the holder, the heavy expense of a metallic currency would +be saved.</p> + +<p>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 quantities, as to preserve its value relatively to the +mass of circulating commodities nearly equal, the precious metals might be +entirely dispensed with, not only as a circulating medium, but also as a standard +to which to refer the value of paper.</p> + +<p>In adopting a paper circulation—</p></div> + +<p class="noidt">Says Lord Overstone—</p> + +<div class="blockquot"><p class="noidt">we must unavoidably depend for a maintenance of its due value upon the +adoption of a strict and judicious rule for the regulation of its amount.</p></div> + +<p>Lord Overstone further declared that:</p> + +<div class="blockquot"><p>The value of the paper currency results from its being kept at the same amount +the metallic currency would have been.</p></div> + +<p>Alexander Baring, in his evidence before the secret committee of +the House of Lords in 1819, said:</p> + +<div class="blockquot"><p>The reduction of paper would produce all those effects which arise from the reduction +in the amount of money in any country.</p></div> + +<p>Prof. F. A. Walker says:</p> + +<div class="blockquot"><p>Let me repeat, money is to be known by its doing a certain work. Money is +not gold, though gold may be money; sometimes gold is money, and sometimes it +is not. Money is no one thing, no group of many things having any material property +in common. On the contrary, anything may be money; and anything, in +a given time and place, is money which then and there performs a certain function. +Always and everywhere that which does the money-work is the money-thing.</p></div> + +<p>Sir Archibald Alison says:</p> + +<div class="blockquot"><p>The suspension of specie payment in 1797, making bank notes a legal tender +receivable for taxes by providing Great Britain with an adequate internal currency, +averted the catastrophe then so general upon the Continent, and gave it +at the same time an extraordinary degree of prosperity. Such was the commencement +of the paper system in Great Britain, which ultimately produced such astonishing +effects, and brought the struggle [of the Napoleonic wars] to a triumphant +close.</p></div> + + +<p class="caption">THE TRUE MONEY STANDARD.</p> + +<p>The true money standard of any country is not the material of +which the money is made. The standard is not a concrete object, +but a numerical relation. It is the relation between the number of<span class='pagenum'><a name="Page_p079" id="Page_p079">[79]</a></span> +units composing the monetary circulation of the country and the +numbers of the population.</p> + +<p>It is the legal-tender function that constitutes money. It is the +power which the law imparts to any material to pay debts and +liquidate obligations. It can not for a moment be doubted that the +money function, being conferred by the supreme authority, is the +all-sufficient guarantee of the money value. There is no necessity +for re-enforcing that value with any inferior value that may attach +to the material on which the money stamp is placed. The money +function is immeasurably the most important that can be conferred +by society upon any material, and it is absurd to urge that that +function is not of itself sufficient for the maintenance of the value +of money. All the value that money can possibly have—the totality +of value that can exist in the shape of money in any country—will +attach to anything upon which the sovereign authority stamps it, +whether the material on which the stamp is placed be gold, silver, +paper, or anything else. Legislators or executive officers of the +Government, by increasing or decreasing the volume of money, correspondingly +decrease or increase the value of each unit of that +money. For no matter how many or how few the units may be, the +total value of the money of the country will be comprised within +the total number of those units. A change in the number of the +units effects a proportionate change in the value of each unit, and +whatever the value of the unit may be, it is of the utmost importance +that that value should remain undisturbed.</p> + +<p>It is absurd to maintain that a gold unit, which, as time goes on, +is constantly increasing in purchasing power; is a better unit than +a unit of any other material that maintains unchanging value +through time.</p> + +<p>Whenever the business of the country accommodates itself to a +given number of units, the only question for the Government to +deal with is to maintain that value as free from disturbance as +possible; and according to all authorities on political economy that +can only be done by increasing or decreasing the number of units in +circulation in accordance with the demands of increasing or decreasing +population.</p> + +<p>If it be admitted that one of the most important offices of government +is to see that the equities are preserved between its citizens +(and if this be not so, to what purpose are our courts of equity +instituted?), then it can not be denied that it is one of the highest +offices of government to see that money, which measures all +equities, and which must for all time continue to be the principal +measure in the service of civilized society, shall be of unchanging +value. It is impossible to secure this characteristic of uniformity +in the value of money if we are to select as the only material on +which to stamp the money function a substance whose yearly production +is becoming more and more limited, and the prospect of +whose sufficient yield becomes less and less encouraging.</p> + + +<p class="caption">IF SILVER REMAIN DEMONETIZED AND GOLD CONTINUE DECREASING, WHERE IS THE +WORLD'S FUTURE MONEY SUPPLY TO COME FROM?</p> + +<p>If the distinguished authorities I have quoted are correct, that a +diminution of the volume of money increases the value of the +money unit—which is but another form of stating that it lowers +prices and produces stagnation, distress, and discontent,—what good +reason can be offered by the advocates of the gold standard for confining +the business of this rapidly growing country to a basis of +gold, when it is well known that the entire stocks of gold and silver<span class='pagenum'><a name="Page_p080" id="Page_p080">[80]</a></span> +together are now insufficient to serve the purpose of the world's +money, and have to be supplemented and re-enforced by large issues +of paper notes? Do they not reflect that the production of gold is +constantly diminishing and is likely to continue to diminish? And +do they not know that our population is growing at the rate of +over 3 per cent. per annum and will double in thirty years? Do +they mean that the money volume which serves a population of +65,000,000, and is far below the needs of that population, will suffice +for the 130,000,000 of the next generation? To be sure, if we are to +take no note of prices, the question is a simple one.</p> + +<p>But prices must be taken into account. The entire money question +is one of prices. When it is said that money is scarce, what is +meant is that business is depressed and that money is difficult to +get, at the present range of prices. Should prices fall 25 per cent. +money would be found plentiful enough to conduct exchange at the +lower range. But when prices fall, goods sell below cost, business +is unprofitable, workshops are closed, and men are thrown into idleness. +If lowering prices do not affect injuriously either the business +or the prosperity of the country, then it makes no difference what +the volume of money may be; a small amount will meet the requirements +as well as a large amount. In that case, the gold standard is +as good as any.</p> + +<p>But if gold alone is sufficient to bear all the enormous monetary +burdens of the Western world, why do the advocates of the gold +standard admit the necessity for any more circulation? To be logical, +instead of favoring an increase of credit money, which has always +lurking within it an element of danger to the business of the +community, they should demand the retirement of the $347,000,000 of +greenbacks and the $350,000,000 of coined silver, and base the business +of the country exclusively on what they call "honest money." +If that should be done all that could happen would be a fall in prices. +Judging by the experience of the past it would not be surprising if +the next move of the gold-standard men would be an agitation for +the retirement and cancellation of the greenbacks. Such a movement +is fully in harmony with the opinions of the gold-standard +advocates for the past twenty years. Indeed, the Secretary of the +Treasury who took charge of the finances at the opening of the last +Administration, himself a banker, recommended the demonetization +of the greenbacks almost as vigorously as he opposed silver.</p> + + +<p class="caption">MONEY VALUABLE ONLY FOR THE IMPORTANT SERVICE IT PERFORMS.</p> + +<p>Money is valuable rather for the service which it performs than +for the material of which it is composed.</p> + +<p>When we consider the transcendantly important character of the +service which money performs—when we reflect that, without it, +the achievement of an advanced civilization would be impossible, +we can not escape the conclusion that, compared with the value of +that service, the commodity value of any material on which the +money function may be stamped is too trifling to merit serious +attention.</p> + +<p>This will be made clear by reflection on the necessities of the situation.</p> + +<p>So long as society chooses to maintain the automatic or metallic +money-system, it must be obvious that to escape the evils that would +result from a sudden and overwhelming increase in the supply of the +money-material as compared with the entire stock in existence, and +the infinitely more serious evils that would result from a wholly insufficient +yearly addition to that stock, it must have on hand an enor<span class='pagenum'><a name="Page_p081" id="Page_p081">[81]</a></span>mous +accumulation of the metals on which the stamp is placed. It +must be manifest that no material would be fit for universal acceptance +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 current +consumption in the arts.</p> + +<p>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.</p> + + +<p class="caption">THE MONEY DEMAND, NOT THE COMMODITY DEMAND, THAT GIVES GOLD ITS VALUE.</p> + +<p>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 determines +its value.</p> + +<p>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.</p> + +<p>The commodity demand in any one year is not made upon the current +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 +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?</p> + +<p>On the other hand, what is the demand on 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 maintaining +the value of gold.</p> + +<p>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.</p> + +<p>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' supply +of any other commodity on hand in the market, what would be the<span class='pagenum'><a name="Page_p082" id="Page_p082">[82]</a></span> +commercial value of that commodity? What would be the value of +copper, of brass, or of iron, if there were fifty or seventy-five years' +supply of either of those metals in the market for disposal at one +time? Nobody can pretend that any commodity of which there is +an available supply on hand equivalent to the whole demand for +fifty or seventy-five years can have any but the most trifling value.</p> + +<p>Contrary, therefore, to the generally received conviction that the +commodity demand is the dominating force in fixing the value of +gold I maintain and insist that the commodity demand, if entering +into the account at all, is insignificant. It is the supremely important +<i>money</i>-demand, as correlated to the supply, that fixes the value +of all money of every description whatsoever.</p> + +<p>The demand for gold as a commodity is limited and fluctuating, +but when that metal is invested by law with the higher function of +money, and thus constituted a common denominator of all values, +that limited and fluctuating demand is changed to an unlimited and +constant one, which fixes its value for other and inferior uses. If +the commodity-demand for gold were, as many believe it to be, +essential to its acceptance as money, it would be a great misfortune +to society. The happiness and prosperity of the world, if not wholly +dependent upon, are largely influenced 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 affect 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 infinitely more to be feared than an excess, and +this deficiency is, in great measure, caused by the insidious and constant +encroachment, upon the precious metals, of demands for them +for other than the money use. When we contrast the magnitude of +the world's interests and equities, which rest on steadiness in the +value of money, with the comparative unimportance of the uses of +the metals as commodities, it becomes apparent that the subjection +of the value of money to disturbance from the demands for gilded +signs, looking-glasses, bangles and breast-pins, is an evil for which +society is but poorly compensated by the benefits derived from such +uses.</p> + +<p>Whatever other quality gold may posses than as the bearer of the +money function is inconsistent with the healthful and proper exercise +of the task assigned it as such. Whenever any portion of the metal +is used for any other purpose than money it destroys the money and +thus changes the value of every unit of money in circulation, for, +at already stated—other things remaining unchanged—the value +of each dollar depends on the number of dollars that are out. Without +forewarning, and with out knowledge on the part of the people, +large amounts of the money volume, on which so infinite a number of +equities rest, and on the basis of which all debts and time contracts +have been entered into, are, as it were, surreptitiously abstracted +and appropriated to other and always inferior uses, for by far the +highest and noblest use of any material upon which the money function +has been conferred, is the money use. No other use can possibly +be so high or so noble as that of maintaining all equities undisturbed.</p> + +<p>It seems unworthy a highly developed civilization which, as to +all subjects other than money, regulates its affairs by the application +of intelligence, and bases its policies upon exact data, scientifically +ascertained and correctly applied, to depend for its money system +upon the accidents, make-shifts, and expedients to which primitive +society, by reason of the limitation of its powers and the undeveloped<span class='pagenum'><a name="Page_p083" id="Page_p083">[83]</a></span> +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 relation +existing between the units of population and units of money—it +is the duty of society and government to see that as far as practicable +that principle is put into operation.</p> + +<p>The history of the production of the precious metals from the remotest +ages demonstrates that under the automatic system of money +this can only be effected by the unrestricted coinage of, and conferring +the full legal-tender function on, both metals.</p> + + +<p class="caption">THE PROPOSITION THAT THE GOVERNMENT SHOULD LEND MONEY ON THE SECURITY +OF REAL ESTATE.</p> + +<p>If a change in the whole number of money units in circulation +relatively to population and business do not affect the value of each +unit, then no objection can be found to the proposition recently presented +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 +real estate based upon the security of the property; and the issue +of a large amount of Treasury notes for that purpose. Certainly, if +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 California, +namely, the arable land of the United States.</p> + +<p>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.</p> + +<p>Arable land is, in and of itself, capable of supplying all basic wants, +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 altogether, +with scarcely any inconvenience to society.</p> + +<p>Certainly money based on land would seem to be better than +money based on gold. Senators who are sticklers for so-called "intrinsic +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 economy +that no amount of increase in the number of units of money in a +country increases the aggregate value of the money of that country.</p> + +<p>The aggregate value of the money in circulation in a country, can, +<i>ceteris paribus</i>, be increased only by an increase of population and +business, that is to say, by an increase in the demand for it.</p> + +<p>If, without increase of population, the money of a country be increased +from, say, $1,000,000,000 to $2,000,000,000, 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.</p> + + +<p class="caption">GOLD A FETICH—DEMAND FOR A STANDARD OF JUSTICE.</p> + +<p>The history of the world affords no example of a money system regulated +by human prescience and intelligent calculation. It is not too +much to say that the money system of the world—the most important +associative instrumentality of civilization, in so far as it is not +controlled for their own advantage by the creditor classes—is practically +the result of accident. We are even less logical than the ancients, +for they availed themselves of the entire supply of money<span class='pagenum'><a name="Page_p084" id="Page_p084">[84]</a></span> +possible to their civilization and development. They used the full +yield of both silver and gold, while we, in order to line the pockets +of a privileged caste of money-lenders, reduce the money volume to +the lowest possible minimum by discarding one of those metals and +making all debts payable in the other.</p> + +<p>Gold has been erected into a fetich by methods familiar to the +pagan 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 slightest approach to a scrutiny of +the claims of gold as a much-vaunted universal standard of valuation +has been repelled by interested casuists and sophists who constitute +the sacred guard of the temple of the idol.</p> + +<p>The people of this country, Mr. President, begin very seriously to +doubt the sacredness of a so-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 the privileged few. From all parts of the Republic we +learn that the people have become aroused on this subject, that they +have discovered gold to be a standard, not of valuation, but of spoliation +and confiscation.</p> + +<p>The world at large shares to a great extent in the doubts entertained +by the people of this country as to the orthodoxy of the continuing +worship of gold. Throughout all Europe the suspicion is +beginning to make itself felt, among those who have no personal +interest at stake, that the constantly appreciating value of this +metal bodes no good to society, however advantageous it may be to +the moneyed classes, and especially the money lenders. It begins +to be feared that there may be too long a persistence in this artificial +standard, and that the pressure upon the people, in the fall of prices +and the increase of the burden of debt and of taxes, which multiply +with time, may have serious consequences upon public order. The +stock of gold, never half enough to meet the wants of the people +anywhere, is year by year being drawn upon more and more for use +in the arts, while the yield from the mines is decreasing, and giving +no promise of any material increase from any quarter.</p> + +<p>The pressing need of the time, the standard for which the people +are calling, is a standard of equity, a standard of justice, a standard +that shall measure fairly and impartially the rights of both parties to +a contract, that will not wrongfully and stealthily add to the burden +of the obligation on either side, that will not, under the guise of fair +dealing, rob one of the parties for the benefit of the other. The first +indispensable step to a realization of that standard is the full restoration +of silver to its rightful position as a part of the money of the +world.</p> + +<p>In any discussion of the question, it would be uncharitable not +to make allowance for the force, on many conscientious minds, of +what, to the free and unprejudiced inquirer, can only be regarded +as an absurd and meaningless superstition, which, notwithstanding +the advance of thought in other directions, still persists in disarranging +the industries and vexing the civilization of an enlightened +age. It is to the strength of this obdurate superstition that we must +ascribe the horror with which many minds contemplate the possible +loss to the country of a part of its gold.</p> +<p><span class='pagenum'><a name="Page_p085" id="Page_p085">[85]</a></span></p> + +<p class="caption">FEAR OF THE OUTFLOW OF GOLD.</p> + +<p>Any prospect of the outflow of gold is regarded as the opening of +a veritable Pandora's box, from which must issue forth all the evils +that can afflict mankind.</p> + +<p>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.</p> + +<p>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 country, +nor that any statement was made as to exactly how this country +would suffer if it did leave.</p> + +<p>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.</p> + +<p>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.</p> + +<p>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 making +our Treasury notes receivable for customs dues, no damage could +now result from any attempted corner in gold.</p> + +<p>The creditors of this country never can convince the enterprising +and energetic people who form the debtor class that it is to our interest +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.</p> + +<p>If we can only retain gold at the expense of steady and unwavering +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 constantly +falling and money is constantly increasing in value, the +surplus earnings of the people are flowing in a steady stream into +the vaults of money-lending institutions, and into the pockets of +creditors.</p> + +<p>In a very intelligent article published in a late number of an influential +magazine—the Political Science Quarterly—there is the +significant statement, apparently derived from the best sources, that<span class='pagenum'><a name="Page_p086" id="Page_p086">[86]</a></span> +in the year 1879-'80, one-half of all the mortgages in the State of +Indiana were foreclosed.</p> + +<p>It were better for society that property should at once be confiscated +than that the great masses of the people in every community +should have to struggle through years of painful and exhausting effort +in the face of constantly falling prices and then in a large +percentage of cases to lose their property at last. But this can not +be avoided so long as we attempt to keep up what is called the gold +standard. It is a necessary consequence of the gold standard that we +shall have the scale of prices that obtains in gold standard countries +If the presence of gold in this country is to destroy our people, who +doubts that it should go? If its presence is to result in the destruction +of equity and justice, who doubts that it should go?</p> + +<p>Nearly every witness who testified before the secret committee of +the House of Commons in 1857 agreed that gold could only be held +by paralysing the business of the country. It is estimated by witnesses +who testified before that committee, that in the panic of 1847, +in Great Britain, the property of the country, by reason of the measures +rendered necessary to maintain the single gold standard, was depreciated +$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.</p> + +<p>Among the witnesses before the committee were John Stuart Mill, +Lord Overstone, and many other men distinguished in the world of +letters and finance. I am informed by the Librarian of Congress that +there is but one copy of the work in the United 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 contains +so much practical information as to the working of the single +gold standard. According to the testimony taken before that committee, +the experience of Great Britain since 1819 shows that gold +alone, even when re-enforced by paper money convertible exclusively +into gold, instead of being a beneficent instrument of valuation, has +proved a cruel instrument of injustice.</p> + +<p>A brief consideration of the causes which affect the movement of +gold will not be out of place in this connection.</p> + + +<p class="caption">RATIONALE OF THE MOVEMENT OF GOLD.</p> + +<p>Why is it that gold leaves country and goes to another? For +one reason only—the advantage of its owner. Whenever he can make +a profit by sending it out, the gold goes; and the period when that +profit can be made is indicated when the prices of goods that are internationally +dealt in are either rising in the country which it leaves +or falling in the country to which it goes. It is only to pay for importable +goods that gold ever leaves the country in which the owner +resides. Being an international money, and receivable everywhere +at its full face value, gold loses nothing by transfer; hence it is +sent wherever it will for the time being have the greatest purchasing +power.</p> + +<p>Whenever the general range of prices in this country of commodities +internationally dealt in becomes than higher than the general range +of the same commodities abroad, it is manifest that then gold can +used to advantage by purchasing those articles abroad and selling +them here. If the gold that goes out goes from stock that has been +hoarded here, the outflow has no immediate or direct effect upon +prices in this country, although, by increasing or "inflating" the +volume of money abroad it assists in raising prices there, and thus +tends to secure for our exported products a better price in the foreign<span class='pagenum'><a name="Page_p087" id="Page_p087">[87]</a></span> +market. But if the gold goes from the amount that is in active circulation +here, and if the void created by this outflow is not filled +with other forms of money, such as silver, or paper, it results in a reduction +of the volume of money in actual use in this country, while +at the same time increasing the volume of money abroad.</p> + +<p>This increase in the foreign money stock causes a rise of prices +abroad, while the corresponding reduction of our currency causes +a proportionate fall of prices here, hence there is a constant tendency +to an equilibrium of prices of all articles of international +commerce.</p> + +<p>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 in this country, that fact would not tend to drive out gold, because +we do not import raw cotton. But should the prices of articles +of manufactured cotton rise here above what those same articles could +be bought for in any foreign country our merchants would send abroad +for them, provided that, after paying the freight charges and customs +dues, they could make a profit on them.</p> + +<p>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, and would send abroad for any article, provided that, after +paying freight charges and customs dues, they could sell it here at a +profit. That would tend to increase the shipments of gold to foreign +countries.</p> + +<p>That an outflow of gold does not follow from a rise of general +prices, but only of prices of articles of international trade, is manifest +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 purchases +of real estate.</p> + +<p>So wages of labor may rise in this country, or compensation for all +manner of services that must be performed here, and gold would not +leave as a consequence. But if cloth were cheaper—quality considered,—in +England, France, or Germany, or at the remotest ends of +the earth,—than in this country, our merchants would send gold for it +in order to sell it here at a profit.</p> + +<p>Altogether too much importance is attached to the possession of a +large stock of gold, unless that stock form part of the active circulation +of the country. So long as it remains in circulation it sustains +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.</p> + +<p>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 commodities, +we are obliged to accept lower prices for the products we +ship to it.</p> + +<p>The larger the stock of gold, therefore, accumulated by us the lower,<span class='pagenum'><a name="Page_p088" id="Page_p088">[88]</a></span> +necessarily, must be the price which we can receive for our surplus +agricultural products.</p> + +<p>In order to maintain parity between the metals, it is not necessary +for us to have all the gold we now have; $200,000,000, or even +$100,000,000 of gold, would maintain that parity. The parity between +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 +products must be sold.</p> + +<p>When gold leaves this country it is because prices here are rising. +Prices are now lower than they have been since 1847. Must they +continue declining in order that we may be able to retain all our +gold? It is manifestly impossible for the people of this country +to prosper with a constantly lowering range of prices. It is equally +impossible for the present level of prices to be maintained with a +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 admitting +that we must increase our money volume, the effect of which +must be to maintain, if it does not raise, the level of prices here, +insist that we shall let none of our gold go in order that prices abroad +may rise.</p> + +<p>Mr. BLAIR. May I ask the Senator a question?</p> + +<p>Mr. JONES, of Nevada. Certainly.</p> + +<p>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?</p> + +<p>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 +about by a larger subordination of the forces of nature to the uses of +man, as where the comforts and conveniences of life could be produced +with less sacrifice than before, it was not an injury to society, +but in advantage. In other words, if, by a certain amount of sacrifice +seventeen year 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 benefaction +to mankind.</p> + +<p>But, as I then stated, there is one certain sign that that is not, except +to the slightest extent, the cause of the present universal fall +of prices. When prices fall owing to improvements in manufacture, +business revives, the masses of the people are at work, those who +toil find themselves possessed of more of the comforts, of the conveniences, +and even of the luxuries of life than before. They are +better contented with their condition, and more buoyant and hopeful +than before. On such occasions money becomes more and more +in demand than it was before, and instead of being hoarded is put +into active and productive business where it will make a profit. But +when interest falls, pari passu, with the fall of prices, it shows that +the fall of prices is not due, except in the smallest degree, to improved +methods of production, but to the increased value of money.</p> + +<p>Mr. BLAIR. I was not controverting the Senator's theory as to +the existing facts in this country, but I understood him to be laying +down an absolute principle, applicable under all circumstances and +in all times, that the fall of prices is a demonstration of the increased +value of money. I supposed that the fall in prices resulting from a<span class='pagenum'><a name="Page_p089" id="Page_p089">[89]</a></span> +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 production +and to the beneficial operations of the protective tariff.</p> + +<p>Mr. JONES of Nevada. Mr. President——</p> + +<p>Mr. REAGAN. If the Senator from Nevada will permit me, I wish +to ask the Senator from New Hampshire if he means to be understood +as assuming that a protective tariff reduces the value of the +commodities produced?</p> + +<p>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.</p> + +<p>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 occupations. +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 practically +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 electric +light, and thousands of other inventions that a protected people +originate and develop, which would perhaps not have been originated +or might have been long delayed if it had not been for the discouragement +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.</p> + +<p>There is no doubt that eventually as our conditions improve, increasing +numbers of our people will by degrees emerge from agricultural +and enter manufacturing pursuits. A tariff, by stimulating the +organization and development of industries, trains men to greater skill +and perfection of workmanship in a variety of departments, 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 reduced; +but that is not a reduction of which any one complains.</p> +<p><span class='pagenum'><a name="Page_p090" id="Page_p090">[90]</a></span></p> +<p>The true cause of the present discontent will not be found in the +protective tariff, but in the exactions of the single gold standard.</p> + +<p>Fifteen years ago England was on the gold standard. It is on +the gold standard to-day; yet prices in England are 35 per cent. +lower than they were fifteen years ago. There being no reason why +there should be any change in the trend of prices, so long as a fierce +contest for the possession of gold shall be waged between England, +France, Germany, and the United States, we are justified in assuming +that a proportionate decline of prices will continue. That means +a further decline of 30 or 35 per cent. in prices during the next fifteen +years. Where is this tendency to stop? and if it does not stop, how +long will it be before the masses of the people become the bond slaves +of the creditors? It is shocking to the moral sense of mankind that a +few money-lenders and bondholders should thus be able, silently and +insidiously, to wreck the business of every country in the world by +constantly increasing the value of the money unit.</p> + +<p>While admitting the necessity of more monetary circulation, our +gold standard friends fail to show us how it is possible for an increase +in the volume of money to benefit our merchants, farmers, or mechanics +if the prices that prevail in gold standard countries are to prevail +here; for that is what the gold standard means for us, Mr. President. +It means that the prices that rule in gold standard countries are to +rule here.</p> + +<p>The extreme indefiniteness with which the term "gold standard" +is used has so befogged the relation which gold money bears to industry +and commerce that people lose sight of the essential feature +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 mean in this country by "the gold +standard" is not the touch of the metal, for they never touch it, +and rarely, if ever, see it. The maintenance of the gold standard +here simply means the maintenance here of the range of prices that +prevail in gold-using countries; that is to say, that low and lowering +range of prices rendered necessary by the attempt to measure the +value of the constantly increasing mass of the products of industry +in all the western world by the constantly diminishing volume of +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-using +countries.</p> + +<p>Even if our prices remain as they are and do not increase, gold +will eventually leave the country if it continue to increase in value +as it has been increasing during the past fifteen years. We have +been enabled to maintain the gold standard here for the past twelve +years notwithstanding a considerable addition of money other than +gold to our currency, but we have been able to do so only because +other countries have been using an equal or greater amount of money +other than gold. We have been using no greater proportion of silver +or paper money than other countries having the gold standard are +using, hence we have been able to maintain their level of prices and +still keep the metals together. But whenever we shall attempt to +prevent a further fall or prices in this country, it will be impossible +for us to retain our gold so long as prices in gold-using countries continue +to decline as they have been declining. Gold will leave as +quickly because of contraction abroad as of inflation here, if by "inflation" +is meant a coinage of money sufficient to maintain prices at +a steady level.</p> + +<p>Should gold leave the country, then, in order to supply its place,<span class='pagenum'><a name="Page_p091" id="Page_p091">[91]</a></span> +in order to maintain the <i>status quo</i> 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?</p> + +<p>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 comes in.</p> + + +<p class="caption">IF $2,500,000 SILVER PER MONTH HAS NOT DRIVEN OUT GOLD, HOW MUCH WILL DO SO?</p> + +<p>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 international +prices here.</p> + +<p>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 commerce +beyond the prices of the same articles prevailing abroad. It +is only then that it becomes more profitable to send out gold in payment +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.</p> + +<p>Now, having seen that the coinage of $2,500,000 of silver each +month was insufficient to so raise prices in this country as to induce +gold to go abroad, but that on the 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 commodities +imported into this country.</p> + +<p>If the amount of silver which shall be now provided should 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<span class='pagenum'><a name="Page_p092" id="Page_p092">[92]</a></span> +out $600,000,000 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 +the outflow of gold from here.</p> + +<p>Mr. McPHERSON. Will the Senator yield to me for a question, +or does he prefer to go on?</p> + +<p>Mr. JONES, of Nevada. I am always ready to answer a question.</p> + +<p>Mr. McPHERSON. I do not want to interfere with the Senator's +line of argument, or with his speech in any form, but it does seem +to me that there is something fallacious about the Senator's argument, +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 as will be produced by +the free coinage of silver, to which theory, as I understand, the Senator +is fully committed—if that be the theory of the Government +hereafter by the command of Congress, I want to ask the Senator if +he broadly and boldly asserts that no gold can be driven out of the +country to a greater extent than dollar for dollar for the silver that +comes in?</p> + +<p>Mr. JONES, of Nevada. Absolutely; I say so.</p> + +<p>Mr. McPHERSON. Then I want to ask the Senator another question, +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 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 maintain, +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 +to-day 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 week, or a single day, or a +single hour? If they have the gold will they not hold it?</p> + +<p>Mr. JONES, of Nevada. The Senator has so involved his question +with his argument that I can scarcely get at what he wants me to +answer.</p> + +<p>Mr. McPHERSON. The question I want the Senator to answer +is this: Will the people of this country, the financiers of this country, +the banks, the moneyed men holding $500,000,000 of gold, with a +certainty of the free coinage of silver and going to a silver basis, for +that is what it means, put their gold in circulation, or will they +hoard it? Will it disappear?</p> + +<p>Mr. JONES, of Nevada. I scarcely know what the Senator means +by a "silver basis." He talks about a 72-cent dollar. We have +never seen a 72-cent dollar. The papers in the East have told +us that the silver dollar was worth 72 cents. I recollect talking +on that subject once with some Senators in the cloak-room. During +the conversation one of the Senate pages brought me a telegram, on +which he said the telegraph messenger had told him there were 50 +cents due. I give the page a silver dollar and said to him: "I have +been informed by some very respectable and intellectual gentlemen +in here, some of them now candidates for the Presidency even, that this dollar +is worth only 75 cents. I do not want to cheat a little boy. Take<span class='pagenum'><a name="Page_p093" id="Page_p093">[93]</a></span> +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.]</p> + +<p>The Senator talks about the bullion value as though that had anything +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 supply +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 remainder +($1,500,000) of uncoined silver were barred from the imperial +money use. That supposes a supply of $2,000,000 left after satisfying +the requirements for coinage, and supposes only half a million +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 +ounce 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 Germany, +$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 immemorial +use as money. We do not say what the commodity demand +for silver may make that worth. Such a consideration has no bearing +whatever on the value of money.</p> + +<p>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 we shall hear no more about the "commodity +value" of silver. That is the contention that the bimetallists +make.</p> + +<p>Mr. HEARST. It will be $1.29.</p> + +<p>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.</p> + +<p>Mr. McPHERSON. Then, if the Senator will permit me, he necessarily +proposes that the Government of the United States shall take +up all this "slack," as he calls it, in the surplus quantity of silver<span class='pagenum'><a name="Page_p094" id="Page_p094">[94]</a></span> +and shall use it in the coinage. The mints of Europe being closed +against the coinage of silver, there is no other place where it will be +coined. Now, if the Government of the United States should use all +the surplus silver in the country, which has simply forced the price +down since we remonetized silver in 1878 more than 20 per cent.——</p> + +<p>Mr. JONES, of Nevada. Gold has risen 35 per cent.</p> + +<p>Mr. McPHERSON. Then I think the Senator's argument is upon +this idea and upon this plan, that after we are upon a silver basis, +as we should be most assuredly, there would be no inequality in the +money, because it would be all silver.</p> + +<p>Mr. JONES, of Nevada. And no inequality between it and gold.</p> + +<p>Mr. McPHERSON. Certainly not, because there would be no gold +in circulation. But let me ask the Senator another question. While +he can use his short-legged silver dollar for the payment of debts, +when he comes to make a new obligation would not the price of the +goods assume a price equal to the difference between gold and silver? +In other words, while you can use a debased currency for the payment +of debts, if a legislative decree requires that you shall accept +it, you can not use it for any other purpose.</p> + +<p>Mr. JONES, of Nevada. I can not understand the Senator. We +have not provided any "short-legged" dollar. The Senator is assuming +a good many facts and attempting to adjust me to them. I +ask the Senator to wait until he has heard my argument, and I +invite the Senator then to make reply to it.</p> + +<p>Mr. McPHERSON. I am sorry that I interfered with the Senator.</p> + +<p>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 even $400,000,000 +of it go. The amount of gold driven out would tend to raise prices +abroad by making money more plentiful there, and so check the outflow +of gold from here. When Senators speak about $600,000,000 of +gold being withdrawn from circulation here a question that is a little +curious arises. What are these people who own it going to do with +that gold after they have withdrawn it from circulation? Are they +going to invest it in Great Britain? Are they going to invest it in +France? Are they going to the Cape of Good Hope to invest it? If +they are they will reverse the policy that English capitalists are pursuing +now and have been pursuing for years—bringing their gold +over here for investment. The Senator tells us that gold is to disappear +from circulation. What will the owners do with it? Where +and in what are they going to invest it?</p> + +<p>Mr. McPHERSON. It will be held for a premium.</p> + +<p>Mr. JONES, of Nevada. But who will buy it at a premium? Who +needs it at all? For what purpose is it needed? Who is going to +pay any premium for it? Nobody is "short" on it, and there is no +law which forces anybody to have it.</p> + +<p>Mr. President, nobody wants it enough to give a premium for it. +It is only worth what is daily paid in the markets of the world and +nobody is going to pay a premium for it. It is a bogie with which +to frighten the people who demand reform in the currency of this +country. Let them withdraw their gold.</p> + +<p>I tell the Senator it is not the men who hoard the gold in vaults +who maintain or promote the prosperity of this country, but the +toilers in the wheat-fields and on the farms of the country, the men +who work in the planing mills, the forges, the furnaces, the factories, +and in all our institutions of industry. It is they that bring<span class='pagenum'><a name="Page_p095" id="Page_p095">[95]</a></span> +us our prosperity, and not these people who are gambling for premiums +on gold.</p> + +<p>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 of industry +and commerce, that great instrument, money, the non-adjustment +of which, as I have already stated, has, in my belief, +caused more misery than was ever caused by war, pestilence, and +famine.</p> + +<p>But to resume at the point where I was interrupted:</p> + +<p>The gold going out would tend constantly to restore the equilibrium +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 outflow +of the $600,000,000, we shall be compelled to come to the conclusion +that the time when our stock of gold can be driven out will +be almost indefinitely postponed.</p> + +<p>But 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 standard +that will approximate to a standard of justice.</p> + +<p>The new "gold standard" that would be established by the outflow +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.</p> + +<p>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 established +by the full remonetization of silver in this country.</p> + + +<p class="caption">PRACTICALLY NO GOLD MONEY IN THE UNITED STATES.</p> + +<p>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 gold piece? With the exception +of a few million dollars on the Pacific coast, gold is not really in cir<span class='pagenum'><a name="Page_p096" id="Page_p096">[96]</a></span>culation +in this country. It is performing no useful function whatsoever. +While I am engaged in delivering these remarks I venture +to say no Senator within the sound of my voice has in his pocket a +single gold coin of any denomination whatever, or any paper representative +of one.</p> + +<p>This is the answer to the fear expressed by some Senators that +when those who hold gold shall observe the enlargement of 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 is 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.</p> + +<p>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.</p> + + +<p class="caption">THE ARGUMENT BASED ON OUR BALANCE OF TRADE.</p> + +<p>One of the staple arguments of the advocates of the single gold +standard is, that if our stock of gold were greatly reduced we should +be unable to make payments to foreign countries in case the balance +of trade turned against us. It is only through an excess of imports +over exports that gold could go, and this country now produces of +nearly all articles almost all that it consumes. With the exception +of two years there has not been a balance of trade against us for +fourteen years, as the following table will show:</p> + +<p class="caption"><i>Value of merchandise imported into, and exported from, the United States, +from 1876 to 1889, inclusive; also annual excess of imports or of exports—specie +values.</i></p> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr> +<th class='bbox'>Year ending<br />June 30—</th> +<th class='bbox'>Total exports.</th> +<th class='bbox'>Total imports.</th> +<th class='bbox'>Total exports<br />and imports.</th> +<th class='bbox'>Excess of exports<br />over imports.</th> +<th class='bbox'>Excess of imports<br />over exports.</th> +</tr> +<tr><td align='right'></td><td align='center'> <i>Dollars.</i></td><td align='center'> <i>Dollars.</i></td><td align='center'> <i>Dollars.</i></td><td align='center'> <i>Dollars.</i></td><td align='center'> <i>Dollars.</i></td></tr> +<tr><td align='right'> 1876</td><td align='right'> 540,384,671</td><td align='right'> 460,741,190</td><td align='right'> 1,001,125,861</td><td align='right'> 79,643,481 </td><td align='right'> —</td></tr> +<tr><td align='right'> 1877</td><td align='right'> 602,475,220</td><td align='right'> 451,823,126</td><td align='right'> 1,053,798,346</td><td align='right'> 151,152,094</td><td align='right'> —</td></tr> +<tr><td align='right'> 1878</td><td align='right'> 694,865,766</td><td align='right'> 437,051,532</td><td align='right'> 1,131,917,298</td><td align='right'> 257,814,234 </td><td align='right'> —</td></tr> +<tr><td align='right'> 1879</td><td align='right'> 710,439,441</td><td align='right'> 445,777,775</td><td align='right'> 1,156,217,216</td><td align='right'> 264,661,666 </td><td align='right'> —</td></tr> +<tr><td align='right'> 1880</td><td align='right'> 835,638,658</td><td align='right'> 667,954,746</td><td align='right'> 1,503,593,404</td><td align='right'> 167,683,912 </td><td align='right'> —</td></tr> +<tr><td align='right'> 1881</td><td align='right'> 903,377,346</td><td align='right'> 642,664,628</td><td align='right'> 1,545,041,974</td><td align='right'> 259,712,718 </td><td align='right'> —</td></tr> +<tr><td align='right'> 1882</td><td align='right'> 750,542,257</td><td align='right'> 724,639,574</td><td align='right'> 1,476,181.831</td><td align='right'> 25,902,683 </td><td align='right'> —</td></tr> +<tr><td align='right'> 1883</td><td align='right'> 823,839,402</td><td align='right'> 723,180,914</td><td align='right'> 1,547,020,316</td><td align='right'> 100,658,488 </td><td align='right'> —</td></tr> +<tr><td align='right'> 1884</td><td align='right'> 740,513,609</td><td align='right'> 667,697,693</td><td align='right'> 1,408,211,302</td><td align='right'> 72,815,916 </td><td align='right'> —</td></tr> +<tr><td align='right'> 1885</td><td align='right'> 742,189,755</td><td align='right'> 577,527,329</td><td align='right'> 1,319,717,084</td><td align='right'> 164,662,426</td><td align='right'> —</td></tr> +<tr><td align='right'> 1886</td><td align='right'> 679,524,830</td><td align='right'> 635,436,136</td><td align='right'> 1,314,960,966</td><td align='right'> 44,088,694</td><td align='right'> —</td></tr> +<tr><td align='right'> 1887</td><td align='right'> 716,183,211</td><td align='right'> 692,319,768</td><td align='right'> 1,408,502,977</td><td align='right'> 23,863,443</td><td align='right'> —</td></tr> +<tr><td align='right'> 1888</td><td align='right'> 695,954,507</td><td align='right'> 723,957,114</td><td align='right'> 1,419,911,621</td><td align='right'> —</td><td align='right'> 28,002,607</td></tr> +<tr><td align='right'> 1890</td><td align='right'> 742,401,375</td><td align='right'> 745,131,652</td><td align='right'> 1,487,533,027</td><td align='right'> —</td><td align='right'> 2,730,277</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p>This table shows that while for last year there was a balance +against us of $2,730,277, and the year before of $28,002,607, for all +former years from 1887 back to 1874 the balances were in our favor—all +the way from $23,000,000 in 1887 to $265,000,000 in 1881. But the +total want of significance so far as the movement of gold is concerned<span class='pagenum'><a name="Page_p097" id="Page_p097">[97]</a></span> +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.</p> + +<p>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.</p> + +<p class="caption"><i>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.</i></p> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox'>Countries.</th><th class='bbox'>Exports.</th><th class='bbox'>Imports.</th></tr> +<tr><td align='left'><b>Gold-using countries:</b></td><td align='right'></td><td align='right'></td></tr> +<tr><td align='left'> Canada</td><td align='right'> $42,141,156</td><td align='right'> $43,009,473</td></tr> +<tr><td align='left'> Belgium</td><td align='right'> 23,345,219</td><td align='right'> 9,816,435</td></tr> +<tr><td align='left'> Denmark</td><td align='right'> 3,903,937</td><td align='right'> 846,904</td></tr> +<tr><td align='left'> France</td><td align='right'> 46,120,041</td><td align='right'> 69,566,618</td></tr> +<tr><td align='left'> Germany</td><td align='right'> 68,002,594</td><td align='right'> 81,742,546</td></tr> +<tr><td align='left'> Great Britain</td><td align='right'> 382,981,674</td><td align='right'> 178,269,067</td></tr> +<tr><td align='left'> Greece</td><td align='right'> 165,079</td><td align='right'> 988,923</td></tr> +<tr><td align='left'> Italy</td><td align='right'> 12,604,848</td><td align='right'> 17,992,149</td></tr> +<tr><td align='left'> Netherlands</td><td align='right'> 15,062,939</td><td align='right'> 10,950,843</td></tr> +<tr><td align='left'> Portugal and its possessions</td><td align='right'> 3,266,814</td><td align='right'> 1,282,556</td></tr> +<tr><td align='left'> Spain</td><td align='right'> 11,946,348</td><td align='right'> 4,636,661</td></tr> +<tr><td align='left'> Sweden and Norway</td><td align='right'> 2,615,569</td><td align='right'> 2,983,319</td></tr> +<tr><td align='left'> Turkey</td><td align='right'> —</td><td align='right'> 4,687,731</td></tr> +<tr><td align='left'> British possessions in Africa</td><td align='right'> 2,936,213</td><td align='right'> 895,344</td></tr> +<tr><td align='left'> British possessions in Australia</td><td align='right'> 12,321,980</td><td align='right'> 5,998,211</td></tr> +<tr><td align='left'><b>Silver and paper using countries:</b></td><td align='right'></td><td align='right'></td></tr> +<tr><td align='left'> Austria-Hungary</td><td align='right'> 726,156</td><td align='right'> 7,642,297</td></tr> +<tr><td align='left'> Russia</td><td align='right'> 8,364,545</td><td align='right'> 2,985,631</td></tr> +<tr><td align='left'> Mexico</td><td align='right'> 11,486,896</td><td align='right'> 21,253,601</td></tr> +<tr><td align='left'> Central America</td><td align='right'> 4,325,923</td><td align='right'> 8,414,019</td></tr> +<tr><td align='left'> Hawaii</td><td align='right'> 3,375,661</td><td align='right'> 12,847,740</td></tr> +<tr><td align='left'> Argentine Republic</td><td align='right'> 9,293,856</td><td align='right'> 5,454,618</td></tr> +<tr><td align='left'> Brazil</td><td align='right'> 9,351,081</td><td align='right'> 60,403,804</td></tr> +<tr><td align='left'> Chili</td><td align='right'> 2,972,794</td><td align='right'> 2,622,625</td></tr> +<tr><td align='left'> Peru</td><td align='right'> 780,835</td><td align='right'> 314,032</td></tr> +<tr><td align='left'> Colombia</td><td align='right'> 3,821,017</td><td align='right'> 4,263,519</td></tr> +<tr><td align='left'> Uruguay</td><td align='right'> 2,192,848</td><td align='right'> 2,986,964</td></tr> +<tr><td align='left'> Venezuela</td><td align='right'> 3,738,961</td><td align='right'> 10,392,569</td></tr> +<tr><td align='left'> Cuba</td><td align='right'> 11,691,311</td><td align='right'> 52,130,623</td></tr> +<tr><td align='left'> Hayti</td><td align='right'> 5,340,270</td><td align='right'> 5,211,704</td></tr> +<tr><td align='left'> Porto Rico</td><td align='right'> 2,224,931</td><td align='right'> 3,707,373</td></tr> +<tr><td align='left'> British West Indies</td><td align='right'> 10,453,973</td><td align='right'> 20,723,268</td></tr> +<tr><td align='left'> Dutch West Indies</td><td align='right'> 887,778</td><td align='right'> 654,320</td></tr> +<tr><td align='left'> China</td><td align='right'> 6,477,512</td><td align='right'> 18,508,678</td></tr> +<tr><td align='left'> India, British</td><td align='right'> 4,330,413</td><td align='right'> 20,029,601</td></tr> +<tr><td align='left'> India, Dutch</td><td align='right'> 2,249,604</td><td align='right'> 5,207,254</td></tr> +<tr><td align='left'> Japan</td><td align='right'> 4,619,985</td><td align='right'> 16,687,992</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p>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.</p> + +<p>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<span class='pagenum'><a name="Page_p098" id="Page_p098">[98]</a></span> +degree improbable that there will ever be a balance of trade against +us in the gold using countries, taken as a whole.</p> + +<p>Hence it is clear that if we had no gold at all we could readily +settle all foreign balances that might be against us.</p> + +<p>Nations, however, ultimately, and on the whole, square their accounts +with commodities. Every nation must buy what it wants +with its own products. In this country especially have we nothing +to fear, because any temporary balance against us could always be +met by the yield from our own mines. No country has any difficulty +by reason of my difference in money systems in buying what any +other nation has to sell.</p> + +<p>This 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 unsettled +questions in political economy" (1874), says:</p> + +<div class="blockquot"><p>It appears to me that the influence attributed by many able writers in the United +States to the depreciation of the paper currency as regards its effects on the foreign +trade of the country is, in a great degree, purely imaginary. An advance in +the scale of prices, <i>measured in gold</i>, in a country, if not shared by other countries, +will at once affect its foreign trade, giving an impulse to importations and checking +the exportation of all commodities other than gold. A similar effect is very +generally attributed by American writers to the action on prices of the greenback +inconvertible currency.</p> + +<p>But it may easily be shown that this is a complete illusion. Foreigners do not +send their products to the United States to take back greenbacks in exchange. +The return which they look for is either gold or the commodities of the country; and +if these have risen in price in proportion as the paper money has been depreciated, +how should the advance in paper prices constitute an inducement for them to send +their goods thither? The nominal gain in greenbacks on the importation is exactly +balanced by the nominal loss when those greenbacks came to be converted +into gold or commodities. The gain may, in particular cases, exceed the loss, but, +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.</p></div> + +<p>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 sub-treasury, +but in circulation, if not in our own country, then, in the foreign +countries where our surplus products are sold. That is where gold +would do us the most good by making money plentiful and prices +correspondingly high. It does us no good here whatever, locked up +as it always is, and doing none of the work of money, but simply reduces +to the minimum the tax-paying and debt-paying power of our +wheat- and cotton-growing communities.</p> + +<p>An unjust money should not be tolerated, whatever the material of +which it may be composed, and the people of this country will not +tolerate it. They do not fear the outflow of gold. If, in order to retain +it, they must continue to lose as they have been losing for the +past fifteen years, 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 stable and equitable +without regard to the prices of foreign countries. Our foreign trade +would take care of itself, and whatever the balances might be, they +would be much oftener in our favor than against us, and in reality +concern only the importing merchant and not the Government or +the people of the United States. The difficulty of gold-using countries +to get our money, in which to pay us the balances they would +owe us, would be much greater than our difficulty in getting their +money, in which to pay them the occasional balances we might owe +them.</p> + +<p>Much the more serious question, (if it be a serious question at +all, which I deny) is how they shall get our money, not how we<span class='pagenum'><a name="Page_p099" id="Page_p099">[99]</a></span> +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 difficulty 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.</p> + +<p>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.</p> + +<p>While earnestly advocating the full remonetization of silver and +the maintenance in this country of a money volume sufficient to insure +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 growing +needs of population, industry, and commerce.</p> + +<p>At the same time I can not refrain from expressing the conviction +that, as between inflation and contraction, no careful student of history +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. During 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.</p> + +<p>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 coördination of its industries can +be otherwise than prosperous.</p> + +<p>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 alternately +bringing money into and taking it out of the country, disturbing +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 Republic take no harm," furnish our people with an +"inclined plane" of finance on which all their business must be conducted. +Men buying this month at the elevated end of the platform +find themselves selling next month at the depressed end.</p> + +<p>Whenever in the history of a country there has been 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.</p> + +<p>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.<span class='pagenum'><a name="Page_p100" id="Page_p100">[100]</a></span></p> + +<p>No period in the history of Great Britain can compare for activity, +prosperity, or achievement, with the twenty years preceding 1816, +when specie payments were suspended, and during which period, as +testified to by witnesses before the secret committee of Parliament, +the discount rate of the Bank of England did not buffer a single +change; whereas from that period to 1847 the rate was changed +sixteen times, and from 1847 to 1874 as many as 274 times, the fluctuations +being sometime of the most violent character.</p> + +<p>When gold threatens to leave Great Britain the rate of discount +at the Bank of England is raised, with the view of discouraging, if +not preventing, the outflow. Raising the rate of discount is like +putting the brakes on a railroad train; lowering the rate is like +letting off the brakes.</p> + +<p>These changes were not due to any greater demand for money +but to the movements of gold. There was frequently, in the condition +of business, no warrant whatever for a rise in the rate of +discount. The only reason for it was to prevent gold from performing +what "our most conservative financiers" denominate its +"noble" function of "mobility"—of "fluidity"—namely, the +function of going "where it was wanted." This function of going +"where it is wanted" is described as the great "mission" of +gold, and it is assumed that it will never be wanted 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 Commons:</p> + +<div class="blockquot"><p>I admit that, as interested in the commerce and monetary system of this country +I feel a kind of shame that on the occasion of £2,000,000 or £3,000,000 of gold being +taken from this country to Brazil, or any other country, it should immediately +have the effect of causing a monetary alarm throughout the country. (Speech of +the chancellor of the exchequer in the House of Commons, April 18, 1890.)</p></div> + +<p>This is a suggestive admission, from so well-informed a source, as +to the operation of the single gold standard. I commend it to those +who would circumscribe and hamper the prosperity of this country +by making gold alone the standard of all values.</p> + +<p>I have thought it necessary, Mr. President, to state what I conceive +to be the true principles of the science of money, the principles that, +with the progress of time and growth of intelligence, must prevail +the world over; because, without a clear understanding of the relation +which the quantity of money in a country bears to the prosperity +and happiness of its people, there would be no justification for an +addition of either silver, gold, or any other form of money to the +quantity already in circulation. If the value of money depends on +quantity, then, as long as the world adheres to the automatic theory +of money, my contention is that all the silver produced from all the +mines of the world should be transmuted into coin; and even then, +if the wants of the world continue to increase as they have been increasing, +it is only a question of time, and that not far distant, when +the combined supply of both metals will be insufficient to maintain +the equities in time transactions.</p> + +<p>The world having decreed to stand by the automatic system we are +now dealing with the question as a practical one.</p> + +<p>The only relief that can be had is to adhere strictly to that system, +and give it full scope. Remove all legislative restrictions and let the +world have the full benefit of all the precious metals that are yielded +by the mines.</p> +<p><span class='pagenum'><a name="Page_p101" id="Page_p101">[101]</a></span></p> + +<p class="caption">THE WORLD'S SUPPLY OF GOLD AND SILVER.</p> + +<p>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?</p> + +<p>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 separately. +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 occurring +simultaneously, except in the single instance of the first discovery +of the mines of America. When the gold mines have been yielding +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.</p> + +<p>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.</p> + +<p class="caption"><i>Annual average production of the precious metals throughout the world +from the discovery of America to 1872.</i></p> + +<p class="center">[From Director of United States Mint.]</p> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox'>Periods.</th><th class='bbox'>Gold.</th><th class='bbox'>Silver.</th></tr> +<tr><td align='left'>1493-1520, average for each year</td><td align='right'> $3,855,000</td><td align='right'> $1,953,000</td></tr> +<tr><td align='left'>1521-1544 do</td><td align='right'> 4,759,000</td><td align='right'> 3,749,000</td></tr> +<tr><td align='left'>1545-1560 do</td><td align='right'> 5,657,000</td><td align='right'> 12,950,000</td></tr> +<tr><td align='left'>1561-1580 do</td><td align='right'> 4,546,000</td><td align='right'> 12,447,000</td></tr> +<tr><td align='left'>1581-1600 do</td><td align='right'> 4,905,000</td><td align='right'> 17,409,000</td></tr> +<tr><td align='left'>1601-1620 do</td><td align='right'> 5,662,000</td><td align='right'> 17,538,000</td></tr> +<tr><td align='left'>1621-1640 do</td><td align='right'> 5,516,000</td><td align='right'> 16,358,000</td></tr> +<tr><td align='left'>1641-1660 do</td><td align='right'> 5,829,000</td><td align='right'> 15,223,000</td></tr> +<tr><td align='left'>1661-1680 do</td><td align='right'> 6,154,000</td><td align='right'> 14,006,000</td></tr> +<tr><td align='left'>1681-1700 do</td><td align='right'> 7,154,000</td><td align='right'> 14,209,000</td></tr> +<tr><td align='left'>1701-1720, average for each year</td><td align='right'> 8,520,000</td><td align='right'> 14,779,000</td></tr> +<tr><td align='left'>1721-1740 do</td><td align='right'> 12,681,000</td><td align='right'> 17,921,000</td></tr> +<tr><td align='left'>1741-1760 do</td><td align='right'> 16,356,000</td><td align='right'> 22,158,000</td></tr> +<tr><td align='left'>1761-1780 do</td><td align='right'> 13,761,000</td><td align='right'> 27,128,000</td></tr> +<tr><td align='left'>1781-1800 do</td><td align='right'> 11,823,000</td><td align='right'> 36,534,000</td></tr> +<tr><td align='left'>1801-1810 do</td><td align='right'> 11,815,000</td><td align='right'> 37,161,000</td></tr> +<tr><td align='left'>1811-1820 do</td><td align='right'> 7,606,000</td><td align='right'> 22,474,000</td></tr> +<tr><td align='left'>1821-1830 do</td><td align='right'> 9,448,000</td><td align='right'> 19,141,000</td></tr> +<tr><td align='left'>1831-1840 do</td><td align='right'> 13,484,000</td><td align='right'> 24,788,000</td></tr> +<tr><td align='left'>1841-1850 do</td><td align='right'> 36,393,000</td><td align='right'> 32,434,000</td></tr> +<tr><td align='left'>1851-1855 do</td><td align='right'> 131,268,000</td><td align='right'> 36,827,000</td></tr> +<tr><td align='left'>1856-1860 do</td><td align='right'> 136,946,000</td><td align='right'> 37,611,000</td></tr> +<tr><td align='left'>1861-1865 do</td><td align='right'> 131,728,000</td><td align='right'> 45,764,000</td></tr> +<tr><td align='left'>1866-1870 do</td><td align='right'> 127,537,000</td><td align='right'> 55,652,000</td></tr> +<tr><td align='left'>1871-1872 do</td><td align='right'> 113,431,000</td><td align='right'> 81,849,000</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> +<p><span class='pagenum'><a name="Page_p102" id="Page_p102">[102]</a></span></p> + +<p class="caption"><i>World's production of gold and silver for the calendar years 1873 to +1889, inclusive.</i></p> + + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox' rowspan='2'>Calendar<br />years.</th><th class='bbox'>Gold.</th><th class='bbox' colspan='3'>Silver.</th></tr> +<tr><th class='bbox'>Value.</th><th class='bbox'>Fine ounces.</th><th class='bbox'>Market value.</th><th class='bbox'>Coining value.</th></tr> +<tr><td align='right'> 1873</td><td align='right'> $96,200,000</td><td align='right'> 63,267,000</td><td align='right'> $82,120,000</td><td align='right'> $81,800,000</td></tr> +<tr><td align='right'> 1874</td><td align='right'> 90,750,000</td><td align='right'> 55,300,000</td><td align='right'> 70,673,000</td><td align='right'> 71,500,000</td></tr> +<tr><td align='right'> 1875</td><td align='right'> 97,500,000</td><td align='right'> 62,263,000</td><td align='right'> 77,578,000</td><td align='right'> 80,500,000</td></tr> +<tr><td align='right'> 1876</td><td align='right'> 103,700 000</td><td align='right'> 67,753,000</td><td align='right'> 78,322,000</td><td align='right'> 87,600,000</td></tr> +<tr><td align='right'> 1877</td><td align='right'> 114,000,000</td><td align='right'> 62,648,000</td><td align='right'> 75,240,000</td><td align='right'> 81,000,000</td></tr> +<tr><td align='right'> 1878</td><td align='right'> 119,000,000</td><td align='right'> 73,476,000</td><td align='right'> 84,644,000</td><td align='right'> 95,000,000</td></tr> +<tr><td align='right'> 1879</td><td align='right'> 109,000,000</td><td align='right'> 74,250,000</td><td align='right'> 83,383,000</td><td align='right'> 96,000,000</td></tr> +<tr><td align='right'> 1880</td><td align='right'> 106,500,000</td><td align='right'> 74,791,000</td><td align='right'> 85,636,000</td><td align='right'> 96,700,000</td></tr> +<tr><td align='right'> 1881</td><td align='right'> 103,000,000</td><td align='right'> 78,890,000</td><td align='right'> 89,777,000</td><td align='right'> 102,000,000</td></tr> +<tr><td align='right'> 1882</td><td align='right'> 102,000,000</td><td align='right'> 86,470,000</td><td align='right'> 98,230,000</td><td align='right'> 111,800,000</td></tr> +<tr><td align='right'> 1883</td><td align='right'> 95,400,000</td><td align='right'> 89,177,000</td><td align='right'> 98,986,000</td><td align='right'> 115,300,000</td></tr> +<tr><td align='right'> 1884</td><td align='right'> 101,700,000</td><td align='right'> 81,597,000</td><td align='right'> 90,817,000</td><td align='right'> 105,500,000</td></tr> +<tr><td align='right'> 1885</td><td align='right'> 108,400,000</td><td align='right'> 91,652,000</td><td align='right'> 97,564,000</td><td align='right'> 118,500,000</td></tr> +<tr><td align='right'> 1886</td><td align='right'> 106,000,000</td><td align='right'> 93,276,000</td><td align='right'> 92,772,000</td><td align='right'> 120,600,000</td></tr> +<tr><td align='right'> 1887</td><td align='right'> 105,300,000</td><td align='right'> 96,189,000</td><td align='right'> 94,265,000</td><td align='right'> 124,366,000</td></tr> +<tr><td align='right'> 1888</td><td align='right'> 109,900,000</td><td align='right'> 109,911,000</td><td align='right'> 103,316,000</td><td align='right'> 142,107,000</td></tr> +<tr><td align='right'> 1889</td><td align='right'> 118,800,000</td><td align='right'> 125,830,000</td><td align='right'> 117,651,000</td><td align='right'> 162,690,000</td></tr> +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> +</table></div> + +<p>From this table it will be seen that from 1801 to 1820 the average +yearly yield of gold was $9,710,500; of silver, $36,847,500—four of +silver to one of gold.</p> + +<p>From 1821 to 1840 the average yearly yield of gold was $11,466,000; +of silver, $21,964,000—two of silver to one of gold.</p> + +<p>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.</p> + +<p>From 1861 to 1880 the yearly average yield of gold was $117,991,850; +of silver, $68,043,900—nearly two of gold for one of silver.</p> + +<p>From 1881 to 1889 the yearly average yield of gold was $105,500,000: +of silver, $122,540,388—one-sixth more silver than gold.</p> + +<p>From those figures it is plain that no continuous, extraordinary +yield of silver, such as might warrant the slightest fear of an unnecessary +addition to the money volume, is to be expected. On the other +hand the continuous drain of gold for use in the arts, as dentistry, +gold plate, jewelry, gilding, and articles of decoration generally, is +seriously encroaching upon the annual supply.</p> + +<p>Both metals possess in common, and neither in any different degree +from the other, all the qualities which are recognized as necessary in +a commodity money. Silver enjoys in an equal degree with gold the +quality of indestructibility, of divisibility, of malleability, 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—</p> + + +<div class='center'> +<table border="0" cellpadding="2" cellspacing="0" summary=""> +<tr><td align='left'>Gold</td><td align='right'>$7,240,000,000</td></tr> +<tr><td align='left'>Silver</td><td align='right'>7,435,000,000</td></tr> +</table></div> + +<p>That silver mining has not proved exceptionally profitable in this +country is proved by the comparatively small number that have engaged +in the business. This country has been thoroughly explored in +the search for additional mines without any of great value being discovered. +The allurements of the business lie in its uncertainty; and +for the occasional prize that is drawn thousands of blanks are found. +There is always enough hope of results to induce continued effort,<span class='pagenum'><a name="Page_p103" id="Page_p103">[103]</a></span> +but there is also sufficient doubt and discouragement to deter an undue +number from engaging in the business.</p> + +<p>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 15½ to 1 could give to it. It is not, therefore, +probable that any material increase of output can be expected +from that quarter.</p> + +<p>Conceding, for the sake 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 coinage? +And on the other hand, is it not equally manifest that for an +insufficient supply there is no remedy?</p> + +<p>If great mountains of silver should be discovered, does not Congress +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 and admittedly the world +over an insufficient supply, where is the remedy? What can Congress +do to enlarge that supply? Absolutely nothing.</p> + + +<p class="caption">THE GOLD USED IN THE ARTS.</p> + +<p>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.</p> + +<p>The single standard of gold, therefore, is maintained by the creditor +nations in the face of the admitted fact that but $50,000,000 of +that metal are annually added to the money stocks.</p> + +<p>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 becoming +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 practically +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 relief +from the money famine from which civilization is now suffering +and from which, if silver be not speedily restored to its ancient +use and function, the world is destined to suffer much more?</p> + +<p>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 one +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?</p> + +<p>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<span class='pagenum'><a name="Page_p104" id="Page_p104">[104]</a></span> +law, in the full money function, would have a steadiness of value +which can not be attained by either separately.</p> + + +<p class="caption">TREASURY NOTES SHOULD NOT BE REDEEMED IN BULLION</p> + +<p>The proposition to redeem the proposed treasury notes in silver +bullion or in anything but lawful money of the United States will +never meet the approval of the people.</p> + +<p>What the people of this country want is money, and what they +should have is money. These notes will represent full value received, +the evidence of which is the bullion in possession of the +Government. When issued, they will enter into circulation. They +will have to do the work of money among the people. They will +go to make up 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 conditions, bargains +will be made, prices established, debts contracted, values adjusted, +and equities created. If any portion of that money be withdrawn +from circulation (for that is what "redemption" means) +without an equivalent amount of money in some other form being +issued 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 circulation +will shrink, and equities will be destroyed.</p> + +<p>The redemption of any number of those notes in silver bullion +means the withdrawal of many dollars of money from circulation +and the destruction of so much of the money of the country. Money +is not a thing that can be destroyed with impunity. It should be +kept in use among the people. It is to industry what the blood is +to the human 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 characterized +by that steady accretion that characterizes the increase in the +quantity of blood in the human body as it progresses from infancy to +maturity. It is no more unreasoning, empirical, or unscientific to be +alternately withdrawing blood from, and injecting blood into, a human +body than to be constantly contracting and expanding the money +volume of the country. And as activity of circulation of the blood +is essential to the health of the body, so activity of circulation in +money is indispensable to the well-being of society. The possession +of no mere commodity, whatever its value, will compensate a +country for the destruction of any considerable portion of its money, +upon the entire volume of which vast equities rest.</p> + + +<p class="caption">MONEY SHOULD BE REDEEMABLE IN ALL THINGS.</p> + +<p>Money should be redeemed in all things; not in one thing alone. +The peculiar characteristic of true money, that which distinguishes +it from all other things whatsoever and constitutes it a prime factor +in civilization, is that it is at all times redeemable in any thing that +is on sale. Being an order for property, it should be redeemed in any +form of disposable property which the holder may desire.</p> + +<div class="blockquot"><p>A guinea—</p></div> + +<p class="noidt">said Adam Smith—</p> + +<div class="blockquot"><p class="noidt">may be considered as a bill for a certain quantity of necessaries and conveniences +upon all the tradesmen in the neighborhood.</p></div> + +<p>Any form of money, the condition of whose existence depends on +redeemability in one thing alone, can not be money in the full sense,<span class='pagenum'><a name="Page_p105" id="Page_p105">[105]</a></span> +and whenever an urgent demand for real money springs up the other +ceases altogether to be money.</p> + +<p>The redemption of money should be reciprocal between the Government +and the people and between and among all individuals in +the community. It should not only be redeemable by the Government +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 ruinous sacrifice.</p> + +<p>It is of the very essence of money—its pith and marrow and protoplasm—that +it should be a legal tender, a universal solvent, the ultimate +of payment, and redeemable, at the prices ruling, in everything +that is on sale. If the volume of such money be properly regulated, +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.</p> + +<p>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 purpose +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 going +to the spring is forbidden to drink until he exchanges his silver +cup for a gold one.</p> + +<p>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 reason +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 reason +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, being in debt, may be considered as having +sold money "short."</p> + +<p>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 sacrifice +necessary to obtain it—should be no greater at one time than at +another. In order to effect that object of prime consequence, to maintain +the value of money unchanging, there should be no hesitancy +whatever in changing the material of which it is made.</p> + +<p>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, but +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.<span class='pagenum'><a name="Page_p106" id="Page_p106">[106]</a></span></p> + +<p>There is no object in redeeming in gold, except to maintain gold +prices, that is to say, the range of prices prevailing in gold-using +countries, and as those prices are constantly trending downward, any +country that insists on maintaining the gold standard must accept the +consequences in a corresponding fall of prices. The advocates of the +gold standard, in effect, maintain that no matter to what extreme +prices may fall, we must be content—we must bow in humble submission +to the inevitable, since, in their view, it is more necessary to +maintain the sacredness of the gold standard than to establish justice, +promote prosperity, or to maintain equity in all time transactions.</p> + +<p>It is in no way necessary, on account of any intrinsic or inherent +quality of gold, that should have that particular metal, and that +alone, for money.</p> + +<p>It is boasted that gold is a universal measure. Why is it universal? +Why is gold accepted in every country of the world? Not because +the gold is wanted for any quality inherent in the metal, but +because it is an order for property in gold-using countries, such as England, +France, and Germany, whose trade is largely a foreign trade. +At whatever rate gold will exchange in England, it will exchange in +all countries having trade relations with England, because it is an +order for goods in a country with which they are dealing. Will not +the money of this country equally, and for like reasons, whether gold +or silver, have acceptability in every country with which the United +States have trade relations? Not for any quality inherent in the +metal, but because it is an order for property in the United States. +Will it not be willingly accepted by those who wish to buy in this +country?</p> + + +<p class="caption">POSSIBLE EFFECT OF REDEMPTION IN BULLION.</p> + +<p>In order to see the effect of the redemption of these Treasury notes +in bullion, we have but to look at the possibilities of the situation. +Suppose there were in the Treasury $300,000,000 worth of that bullion, +which, by the taking up, little by little, and month by month, +of the amount not used in the arts, would be taken by the Treasury +at or about par. Then, suppose that for any reason, such as fear of +approaching panic or otherwise, $100,000,000 of the Treasury notes +were suddenly presented for redemption, and canceled, and the bullion +as suddenly put on the market, what would it be worth? What +would gold bullion be worth if it had not the privilege of coinage, +and if $100,000,000 of it, deprived of the money use, was suddenly put +on the market? Can there be a doubt that the abrupt output of so +large a quantity would have the effect of immediately and enormously +depreciating its value? In the case under consideration, the +result would 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 +Government, but, by reason of the sudden and serious contraction +of the money volume, an infinitely greater loss would result to all the +people.</p> + +<p>But if it be deemed a remote contingency that any extraordinary +amount would in that manner be suddenly taken from the Treasury, +there is another danger which can not be put aside as improbable, +but which, on the contrary, is to be looked for with almost absolute +certainty, and to my mind, constitutes an irremovable and insurmountable +objection to any system of bullion redemption.</p> + +<p>A large number of merchants in London need, monthly, millions +of dollars worth of silver to make payments in India. They will<span class='pagenum'><a name="Page_p107" id="Page_p107">[107]</a></span> +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 possible +point.</p> + +<p>As the Treasury of the United States would buy silver at the lowest +price, the London merchants would refuse to enter the open market +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 opportunity +had offered for a favorable change in the price of the bullion, +could present as many millions of these notes as might suit their purpose, +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.</p> + +<p>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, notwithstanding +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.</p> + +<p>Thus would our Treasury Department be made practically the purchasing +agent in this country of any syndicate or combination of +English merchants who might desire silver for the East India trade.</p> + +<p>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 exercise +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 dangerous +a peril" as the execution of the people's will.</p> + +<p>Certainly no man will deny to the present Secretary of the Treasury +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 suggested, +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 hesitate +to exchange for Treasury notes all the monthly purchases of +bullion in excess of that amount.</p> + + +<p class="caption">A PLANK FROM THE REPUBLICAN PLATFORM.</p> + +<p>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:</p> + +<div class="blockquot"><p>The Republican party is in favor of the use of both gold and silver as money.</p></div> + +<p>If party platforms mean anything that clause meant that the Republican +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<span class='pagenum'><a name="Page_p108" id="Page_p108">[108]</a></span> +of the remonetization of silver was deemed of vital importance, and +party orators and the party press, throughout that entire section +were severe in their denunciation of the prior administration of +its unfriendly attitude toward silver.</p> + +<p>I wish in all solicitude and sincerity to advise my Republican +friends of the East that this plank in the party platform was construed +by the Republicans of the West to mean precisely what it +says. They are looking with confidence to this Congress for such +action as will fittingly embody in the statutes the principle laid down +by the party now in the responsible direction of the Government.</p> + + +<p class="caption">SHALL WE BE FLOODED WITH SILVER?</p> + +<p>We are 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 +show where the flood of silver is to come from? Where are the reservoirs +that contain it? Not in England, where it is difficult for the +people even to get a sufficiency of it for small change to transact the +business of the country: not in Germany, where the scarcity of money +was so pressing that the government had to abandon the idea of selling +silver. Though the stock in France is large her people will never +give it up. Silver has been the "shield and buckler" of the French +Republic. All she has is coined at the ratio of 15½ ounces of silver to +1 of gold, and its shipment to this country would involve a loss to +France, not only of the 3 per cent. difference between the French relation +(15½ to 1) and ours (which is 16 to 1), but of 3 per cent. additional +in the cost of gathering and shipping it. And after that +could only exchange them for Treasury notes. The silver stock in +India and the Orient is performing indispensable duty as money, and +no "flood" of it can be expected from that quarter. From time immemorial +India has been absorbing all the surplus silver of the +world. She has never got so much as to appease her appetite for +more. So insatiable is her desire for that metal that she has long +been known as the "Sink of Silver." China has not a piece of the +metal that she can dispose of. Mexico has no stock whatever of silver +on hand, except the limited number of coined pieces forming her +moderate money circulation, and not a dollar of it can be spared. No +country of Central or South America has any surplus silver. Every +piece of coined silver in every country in the world is part of the monetary +circulation of that country, and even when of short weight and +classified as a mere "token" is passing at par as full valued money. +No gain could possibly accrue, therefore, to the owners of coined silver +anywhere by shipping it to this country for any purpose, and +there is no surplus stock of bullion anywhere.</p> + +<p>If anybody doubts this statement let him make the attempt in all +the money centers of the world to buy from accumulated stock even +$5,000,000 worth of it. He will fail to get it in London, Paris, Berlin, +Calcutta, New York, or San Francisco, or in all combined. There is +no source from which to get silver except the current supply from +the mines, and whatever that is now it is not likely ever greatly to +increase. The occupation of mining is not attractive to many, and +in the nature of the case the number who follow it will always be +comparatively few. The Argonauts of old were but a small band of +hardy adventurers; those of the new era are destined to bear no +larger proportion to the population. But even were this not so, nature +herself draws the line. To the eye of the experienced prospector +silver mines are as discernible on the surface of the earth as +are mountains, and the world has been explored in vain for further +"finds." Those who talk, therefore, of "floods" of silver coming +<span class='pagenum'><a name="Page_p109" id="Page_p109">[109]</a></span>here for coinage simply show their ignorance of existing conditions.</p> + +<p>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 ninety-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.</p> + +<p>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.</p> + +<p>It is apparent that if there were a great advantage in the production +of silver over gold, at the relation of 15½ 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.</p> + + +<p class="caption">CAN THE UNITED STATES ALONE HOLD THE METALS AT A PARITY?</p> + +<p>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 +1803 to 1873 the law of France—one nation alone—accomplished it.</p> + +<p>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 dollars +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. Notwithstanding +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 15½ 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.</p> + + +<p class="caption">IS AN INTERNATIONAL AGREEMENT NECESSARY?</p> + +<p>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?<span class='pagenum'><a name="Page_p110" id="Page_p110">[110]</a></span></p> + +<p>While they are dilligently gathering in the proceeds of this operation +a diversion is kept up for the occupation and amusement of +dilettant financiers and economists, by invoking a discussion of the +ratio that should be maintained between the metals. The ratio is +the pretext on which conference after conference has been called.</p> + +<p>The advocates of the single gold standard contend that hostile +legislation had no influence in effecting the separation of the metals, +and that the reversal of that legislation can not and will not restore +them to a parity unless the principal commercial nations of the +western world join in the work of rehabilitation. As illustrating +the force of law on the relation of the metals I will read a suggestive +paragraph from the report of the Royal Commission of England +(1886), Part I, section 192:</p> + +<div class="blockquot"><p>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 +instability, is the year when the bimetallic system which had previously been in +force in the Latin Union ceased to be in full operation, and we are irresistibly led +to the conclusion that the operation of that system, established as it was in countries +the population and commerce of which were considerable, exerted a material +influence upon the relative value of the two metals.</p> + +<p>So long as that system was in force we think that, notwithstanding the changes +in the production and use of the precious metals, it kept the market price of silver +approximately steady at the ratio fixed by law between them, namely, 15½ to +1. Nor does it appear to us <i>a priori</i> unreasonable to suppose that the existence +in the Latin Union of a bimetallic system with a ratio of 15½ to 1 fixed between +the two metals should have been capable of keeping the market price of silver +steady at approximately that ratio.</p></div> + +<p>The paragraph quoted ascribes the effect thus produced to the bimetallic +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 be observed +that, so far as the ratio was concerned, precisely the same effect had +been produced by France alone during the sixty-two years from the +passage of its law of 1803 to 1865.</p> + +<p>Not only did the French law keep the metals together at a time +when the larger annual yield was of silver, but it kept them together +when the larger annual yield was of gold. Had not that law +been in operation during the '50's, when a flood of gold poured from +the mines of California and Australia, gold would have fallen, as in +early times it more than once fell, to the ratio of 1 to 10, at which +but 10 ounces of silver (instead of 15½) would buy an ounce of gold. +Thus the law of one country alone, a country then of not one-half +the present population of the United States, held the metals together, +so that to whatever extent gold fell in relation to commodities +from 1848 to 1865, by reason of the large output of the mines, +silver fell to the same extent, notwithstanding the enormous decrease +in its production relatively to gold during that period.</p> + +<p>What is claimed for law in this connection is not that it directly +controls the relative values of gold and silver any more than of anything +else, but that on the slightest separation of the metals there +instantly arises, under the law of the double standard, a demand for +the cheaper metal, while the demand for the dearer one is suspended. +In this way the double standard accommodates itself to the law of +supply and demand, which is admitted to be the governing factor in +the determination of value. It is not contended that a small or insignificant +country could keep the metals together, but all experience +goes to show that a great nation like the United States would +have no difficulty whatever in doing so.</p> + +<p>So thoroughly are the advantages of the gold standard to the<span class='pagenum'><a name="Page_p111" id="Page_p111">[111]</a></span> +creditor classes recognized in England that the English Commissioners, +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 proposition +made in good faith by Mr. Samuel Smith, looking to the calling +of a new conference, which was supported by petitions to Parliament +signed by 60,000 persons not merely as individuals, but as representing +large organizations of the toilers of England.</p> + +<p>The ratio is not the difficulty. Those who wanted silver demonetized +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 militated +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-lenders of the world, an agreement to cease their exactions?</p> + +<p>No, Mr. President, we need not wait, and we <i>will</i> not wait. All +that is necessary is to <i>act</i>, and so far as the rules of order and of parliamentary +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 +continuance of present conditions. 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.</p> + +<p>The dogma that cupidity is a synonym for virtue will never fail to +find ready converts among the beneficiaries.</p> + +<p class="poem"> +* * * Plate sin with gold.<br /> +And the strong lance of Justice hurtless breaks.<br /> +</p> + + +<p class="caption">CONCLUSION.</p> + +<p>I predict that the restoration of silver to its birthright, Mr. President, +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 continue +shrinking, and 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.</p> + +<p>By the remonetization of silver, money will cease to be the object +of commerce, and will again become its beneficent instrument. Activity +will replace stagnation, movement will supplant inertia, courage +will banish fear; confidence will dispel doubt; hope will supersede +despair.</p> + +<p>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, no 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<span class='pagenum'><a name="Page_p112" id="Page_p112">[112]</a></span> +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 in the payment +of wages and the consequent dissemination of comfort and happiness +among the people.</p> + +<p>And this it will accomplish not for the United States alone, but +for civilization. For it is not too much to say, Mr. President, that +upon the decision of this question depend consequences more momentous +than upon that of any other question of public policy within +the memory of this generation. In a broader sense than any other +question attracting the general attention of mankind it is a question +of civilization. It embodies the hopes and aspirations of our +race.</p> + +<p>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 proclaim +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 inaugurate +the true renaissance—a renaissance of <i>prosperity</i>, without +which industry, learning, science, literature, art, are but as apples +of Sodom. (Applause in the galleries.)</p> + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_p113" id="Page_p113">[113]</a></span></p> +<h2><a name="INDEX" id="INDEX"></a>INDEX.</h2> + +<div class="pblockquot"> +<p class="noidt"> +Alison, Sir Archibald, coinage has no effect in preventing fluctuations in value of coin, <a href="#Page_p042">42</a><br /> +<span style="margin-left: 1em;">effect of suspension of specie payments in England in 1797, <a href="#Page_p078">78</a></span><br /> +<br /> +Allegory of the clocks, <a href="#Page_p050">50</a><br /> +<br /> +American Review, effect of increasing volume of money, <a href="#Page_p008">8</a><br /> +<br /> +Automatic system of money, gold and silver, <a href="#Page_p009">9</a><br /> +<span style="margin-left: 1em;">why interfered with, <a href="#Page_p018">18</a></span><br /> +<br /> +Appleton's Cyclopedia, definition of money, <a href="#Page_p067">67</a><br /> +<br /> +Aristotle on Money, <a href="#Page_p066">66</a><br /> +<br /> +<br /> +Balance of trade, the argument based on, <a href="#Page_p096">96</a><br /> +<br /> +Banker's advice to the Usurer, <a href="#Page_p070">70</a><br /> +<br /> +Baring, Alexander, a reduction of paper would have the same effect as of any other money, <a href="#Page_p078">78</a><br /> +<br /> +Bastiat, description of the crown piece, <a href="#Page_p068">68</a><br /> +<br /> +Baudeau, on Money, <a href="#Page_p066">66</a><br /> +<br /> +Behren, Jacob, opinion as to effect of gold standard in England, <a href="#Page_p023">23</a><br /> +<br /> +Berkeley, Bishop, queries as to Money, <a href="#Page_p067">67</a><br /> +<br /> +Best Money (truthfully so-called), a money of unchanging value in the unit, <a href="#Page_p070">70</a><br /> +<br /> +<br /> +Cairnes, Prof. J. E., relations of paper currency to foreign exchange, <a href="#Page_p098">98</a><br /> +<br /> +Cattle, estimate of value in 1880, <a href="#Page_p004">4</a><br /> +<br /> +Cernuschi, the purchasing power of money is in direct proportion to the volume of money existing, <a href="#Page_p077">77</a><br /> +<br /> +Checks and clearing houses, their effects in economizing use of money, considered, <a href="#Page_p046">46</a><br /> +<br /> +Chevalier, in France, advocated demonetization of gold, <a href="#Page_p020">20</a><br /> +<br /> +Circulation, present monetary, <a href="#Page_p075">75</a><br /> +<br /> +Coal, yield for 1888, <a href="#Page_p004">4</a><br /> +<br /> +Condition of country at present, <a href="#Page_p003">3</a><br /> +<span style="margin-left: 1em;">at period of demonetization of silver, <a href="#Page_p026">26</a></span><br /> +<br /> +Competition, the value of money fixed by the competition to get it, <a href="#Page_p073">73</a><br /> +<br /> +Cotton manufacturer, his loan of $10,000, payable, principal and interest, in cloth, contrasted with loan of same amount contracted by his neighbor, but payable in dollars, <a href="#Page_p072">72</a><br /> +<br /> +Cotton-planters, their loss by demonetization of silver, <a href="#Page_p060">60</a><br /> +<br /> +Crawford, William H., opinion as to effect of decreasing volume of money, <a href="#Page_p007">7</a><br /> +<br /> +Creditors, demand for the "Best Money," meaning a money of increasing value, <a href="#Page_p069">69</a><br /> +<span style="margin-left: 1em;">their course in Europe to increase value of gold, <a href="#Page_p019">19</a></span><br /> +<span style="margin-left: 1em;">their course in United States to increase value of gold, <a href="#Page_p027">27</a></span><br /> +<span style="margin-left: 1em;">the pretense in the United States to "strengthen the public credit", <a href="#Page_p028">28</a></span><br /> +<br /> +Crops for 1888, corn, wheat, oats, and cotton, <a href="#Page_p004">4</a><br /> +<br /> +<br /> +Debt, a distinguishing characteristic of civilization, <a href="#Page_p035">35</a><br /> +<span style="margin-left: 1em;">a, of $10,000 contracted in 1873—how much wheat, cotton, etc., would pay it then and how much now, <a href="#Page_p057">57</a></span><br /> +<br /> +Debtors, who are they, <a href="#Page_p035">35</a><br /> +<span style="margin-left: 1em;">and creditors, their motives compared, <a href="#Page_p034">34</a></span><br /> +<br /> +De Colange, Professor, the rate at which money exchanges is determined by its quantity, <a href="#Page_p077">77</a><br /> +<br /> +Demand for money, what it is, <a href="#Page_p073">73</a><br /> +<br /> +Demonetization of silver, by England, <a href="#Page_p022">22</a><br /> +<span style="margin-left: 1em;">by Germany, <a href="#Page_p016">16</a></span><br /> +<span style="margin-left: 1em;">by United States, <a href="#Page_p026">26</a></span><br /> +<span style="margin-left: 1em;">wholly unjustifiable, <a href="#Page_p028">28</a></span><br /> +<br /> +De Quincey, in England, advocated demonetization of gold, <a href="#Page_p020">20</a><br /> +<br /> +Difficulty, one symptom common to all industries, <a href="#Page_p005">5</a><br /> +<br /> +Discussion, educational effect of, <a href="#Page_p029">29</a><br /> +<br /> +Double standard, statement of, before French Commission, <a href="#Page_p022">22</a><br /> +<span class='pagenum'><a name="Page_p114" id="Page_p114">[114]</a></span><br /> +Dumas, a Senator of France, pleads for caution before demonetization, <a href="#Page_p017">17</a><br /> +<br /> +<br /> +Economist (London) admits rise of gold, <a href="#Page_p044">44</a><br /> +<br /> +Effects of shrinking volume of money (extract from report of Monetary Commission), <a href="#Page_p036">36</a><br /> +<br /> +Encyclopedia Britannica, effect of fall in the value of money, <a href="#Page_p008">8</a><br /> +<br /> +England's position not due to gold standard, <a href="#Page_p025">25</a><br /> +<br /> +<br /> +Failures in United States, 1887, 1888, and 1889, <a href="#Page_p049">49</a><br /> +<br /> +Fall of interest on gilt-edged securities, a proof of rise of gold, <a href="#Page_p048">48</a><br /> +<br /> +Farm, how it may be lost by an increasing value in the money unit, <a href="#Page_p070">70</a><br /> +<br /> +Farmers, their loss by demonetization of silver, <a href="#Page_p060">60</a><br /> +<br /> +Farms, estimate of value in 1880, <a href="#Page_p004">4</a><br /> +<span style="margin-left: 1em;">proposition that the Government lend money on the security of the land, <a href="#Page_p083">83</a></span><br /> +<br /> +Fanchet, Léon, probable effect, should all European nations follow England in discarding silver, <a href="#Page_p017">17</a><br /> +<br /> +Fichte, the value of money depends on its quantity, <a href="#Page_p076">76</a><br /> +<br /> +Flood of silver, where is it to come from?, <a href="#Page_p108">108</a><br /> +<br /> +France, law of 1803 held metals at a parity till 1873, <a href="#Page_p016">16</a><br /> +<br /> +Frewen, Moreton, extract from his "Economic Crisis", <a href="#Page_p030">30</a><br /> +<br /> +<br /> +Gallatin, Albert, a metallic currency not indispensable, <a href="#Page_p077">77</a><br /> +<br /> +Germany, emigration from, <a href="#Page_p025">25</a><br /> +<br /> +Gibbs, Henry H., cablegram relating to bimetallism, <a href="#Page_p029">29</a><br /> +<br /> +Giffen, Robert his reasoning erroneous that the commodity demand fixes the value of gold, <a href="#Page_p081">81</a><br /> +<br /> +Gold and silver, both variable in value, <a href="#Page_p041">41</a><br /> +<span style="margin-left: 1em;">the world's supply of both, <a href="#Page_p101">101</a></span><br /> +<br /> +Gold, ratio of, to silver at various periods, <a href="#Page_p013">13-16</a><br /> +<span style="margin-left: 1em;">fall of, during times of Alexander and Cæsar, <a href="#Page_p014">14</a></span><br /> +<span style="margin-left: 1em;">fear of fall of, during California excitement, <a href="#Page_p019">19</a></span><br /> +<span style="margin-left: 1em;">rise of from 1873 to 1889, <a href="#Page_p044">44</a></span><br /> +<span style="margin-left: 1em;">proof that it has risen, <a href="#Page_p055">55</a></span><br /> +<span style="margin-left: 1em;">some effects of its rise, <a href="#Page_p057">57</a></span><br /> +<span style="margin-left: 1em;">proposition first made to demonetize it, <a href="#Page_p019">19</a></span><br /> +<span style="margin-left: 1em;">demonetized in 1857 by German States and Austria, <a href="#Page_p020">20</a></span><br /> +<span style="margin-left: 1em;">fear of an outflow of, <a href="#Page_p085">85</a></span><br /> +<span style="margin-left: 1em;">rationale of the outflow of, <a href="#Page_p086">86</a></span><br /> +<span style="margin-left: 1em;">value as money not derived from commodity use, <a href="#Page_p081">81</a></span><br /> +<br /> +Goschen, George J., chancellor of exchequer of England speaks for, but decides against, silver, <a href="#Page_p024">24</a><br /> +<br /> +Graham, Sir James, the value of money is in the inverse ratio to its quantity, <a href="#Page_p077">77</a><br /> +<br /> +"Greenback", the, what gave it value?, <a href="#Page_p105">105</a><br /> +<br /> +Gresham's law, and so-called "extension" of, <a href="#Page_p068">68</a><br /> +<br /> +Gold standard, what it implies, <a href="#Page_p090">90</a><br /> +<span style="margin-left: 1em;">statement in behalf of, before French commission, <a href="#Page_p022">22</a></span><br /> +<span style="margin-left: 1em;">of the future, <a href="#Page_p092">92</a></span><br /> +<br /> +Gold used in the arts, <a href="#Page_p103">103</a><br /> +<br /> +Gold money, practically none in the United States, <a href="#Page_p095">95</a><br /> +<br /> +<br /> +Hamilton, Alexander, effect of annulling use of either metal, <a href="#Page_p016">16</a><br /> +<br /> +Houses in United States, estimated value in 1880, <a href="#Page_p004">4</a><br /> +<br /> +Hume, David, contrast of conditions under increasing and under deceasing volume of money, <a href="#Page_p007">7</a><br /> +<span style="margin-left: 1em;">value of money depends on quantity, <a href="#Page_p076">76</a></span><br /> +<br /> +Huskisson, William, if the quantity of money is increased the value of commodities increase, <a href="#Page_p077">77</a><br /> +<br /> +<br /> +Improved methods of production, their effects considered, <a href="#Page_p045">45</a><br /> +<br /> +India, will remonetization place us "alongside?", <a href="#Page_p032">32</a><br /> +<br /> +International agreement: is such agreement necessary to tie the metals together, <a href="#Page_p109">109</a><br /> +<br /> +Involuntary idleness, enormous loss of potential wealth, through, <a href="#Page_p061">61</a><br /> +<br /> +Iron, pig: Yield for 1888, <a href="#Page_p004">4</a><br /> +<br /> +<br /> +Jefferson, Thomas, "the unit must stand on both metals", <a href="#Page_p017">17</a><br /> +<br /> +Jevons, Professor: The metals not so steady a standard as corn, <a href="#Page_p042">42</a><br /> +<span style="margin-left: 1em;">inconvertible paper money, if limited in quantity, can retain its full value, <a href="#Page_p077">77</a></span><br /> +<br /> +Jevons, on Money, <a href="#Page_p066">66</a><br /> +<span style="margin-left: 1em;">table of relation of general prices 1809 to 1849, <a href="#Page_p040">40</a></span><br /> +<br /> +<br /> +Laughlin, Professor, "the name 'dollar' does not always have the same value", <a href="#Page_p042">42</a><br /> +<br /> +Laveleye, Professor, "Debtors have a right to pay in gold or silver", <a href="#Page_p018">18</a><br /> +<br /> +Law, what is claimed for it, in keeping the metals together, <a href="#Page_p110">110</a><br /> +<span style="margin-left: 1em;">of France held the metals together from 1803 till demonetization, <a href="#Page_p110">110</a></span><br /> +<span class='pagenum'><a name="Page_p115" id="Page_p115">[115]</a></span><br /> +Legal-tender: All money should have this power, <a href="#Page_p071">71</a><br /> +<br /> +Locke, John, both gold and silver variable in value, <a href="#Page_p042">42</a><br /> +<span style="margin-left: 1em;">on Money, <a href="#Page_p066">66</a>, <a href="#Page_p076">76</a></span><br /> +<br /> +<br /> +McCulloch, J. R., "Money is a measure of value", <a href="#Page_p071">71</a><br /> +<span style="margin-left: 1em;">were there perfect security against over-issue of paper money, the metals might be dispensed with, <a href="#Page_p078">78</a></span><br /> +<br /> +McLeod, on Money, <a href="#Page_p066">66</a><br /> +<br /> +Materials used as Money at various epochs, <a href="#Page_p010">10</a><br /> +<br /> +Machiavelli's reference to the brigands, <a href="#Page_p057">57</a><br /> +<br /> +Massachusetts Bureau of Labor: Deductions from its reports as to numbers of the unemployed, <a href="#Page_p061">61</a><br /> +<br /> +Mill, James, the value of money depends on its quantity, <a href="#Page_p076">76</a><br /> +<br /> +Mill, John Stuart, on Money, <a href="#Page_p066">66</a><br /> +<span style="margin-left: 1em;">the value varies inversely as its quantity, <a href="#Page_p076">76</a></span><br /> +<br /> +Mining States: Their interest in remonetization of silver, <a href="#Page_p058">58</a><br /> +<br /> +Monetary Commission Report: Quotations from, as to new school of financial theorists, <a href="#Page_p018">18</a><br /> +<br /> +Money demand, not commodity demand, gives gold its value, <a href="#Page_p081">81</a><br /> +<span style="margin-left: 1em;">effect of reduction in volume of, <a href="#Page_p006">6</a></span><br /> +<span style="margin-left: 1em;">effect intensified as civilization advances, <a href="#Page_p006">6</a></span><br /> +<span style="margin-left: 1em;">a glance at the history of, <a href="#Page_p009">9</a></span><br /> +<span style="margin-left: 1em;">substances used as, at various epochs, <a href="#Page_p010">10</a></span><br /> +<span style="margin-left: 1em;">the money-function the all-sufficient guaranty of the money value, <a href="#Page_p079">79</a></span><br /> +<span style="margin-left: 1em;">where is the future money to come from, if silver remains demonetized, <a href="#Page_p079">79</a></span><br /> +<span style="margin-left: 1em;">—what is it? Its value not in the material but in the stamp—in the legal-tender power conferred, <a href="#Page_p065">65</a></span><br /> +<span style="margin-left: 1em;">should be redeemable in all things, <a href="#Page_p104">104</a></span><br /> +<span style="margin-left: 1em;">valuable rather for the important service it performs than for the material of which made, <a href="#Page_p080">80</a></span><br /> +<span style="margin-left: 1em;">question a question of prices, <a href="#Page_p080">80</a></span><br /> +<span style="margin-left: 1em;">what is the demand for it? what the supply?, <a href="#Page_p073">73</a></span><br /> +<span style="margin-left: 1em;">no alternative for it, <a href="#Page_p074">74</a></span><br /> +<span style="margin-left: 1em;">the most potent instrumentality in the evolution of society, <a href="#Page_p074">74</a></span><br /> +<br /> +<br /> +National money, as distinguished from international money. Advantages of national money, <a href="#Page_p099">99</a><br /> +<br /> +Newspapers, number published in United States, <a href="#Page_p004">4</a><br /> +<br /> +Non-mining States, their interest in remonetization of silver, <a href="#Page_p060">60</a><br /> +<br /> +<br /> +Overstone, Lord, "The value of a paper currency results from its being kept at the same amount the metallic currency would have been", <a href="#Page_p078">78</a><br /> +<br /> +<br /> +Panics, impossible if all money were legal tender, <a href="#Page_p071">71</a><br /> +<br /> +Parity of the metals: Can the United States alone hold them together?, <a href="#Page_p109">109</a><br /> +<br /> +Paulus (author of Pandects): Power of money dependent not on substance but on quantity, <a href="#Page_p077">77</a><br /> +<br /> +Playfair, Sir Lyon, uses the argument that England is a creditor nation, <a href="#Page_p023">23</a><br /> +<br /> +Population, Money should increase in a ratio not less than the ratio of increase of, <a href="#Page_p075">75</a><br /> +<br /> +Price, the index of the value of Money, <a href="#Page_p008">8</a><br /> +<br /> +Price, Bonamy, on Money, <a href="#Page_p067">67</a><br /> +<br /> +Prices, what produces a general fall of, <a href="#Page_p005">5</a><br /> +<span style="margin-left: 1em;">fall of, in United States since 1873, <a href="#Page_p038">38</a></span><br /> +<span style="margin-left: 1em;">relation of general prices, 1809 to 1849, Jevon's tables, <a href="#Page_p040">40</a></span><br /> +<span style="margin-left: 1em;">relation of general prices, 1849 to 1885, Soetbeer's tables, <a href="#Page_p041">41</a></span><br /> +<br /> +Progress, evolutions of, in Money, <a href="#Page_p009">9</a><br /> +<br /> +Prophecies of gold advocates unfulfilled, <a href="#Page_p030">30</a><br /> +<br /> +Protection, its effect on prices, <a href="#Page_p088">88</a><br /> +<br /> +<br /> +Quantitative theory of Money, The value of each dollar depends on the number of dollars out, <a href="#Page_p075">75</a><br /> +<br /> +<br /> +Railroads, number of miles in United States, <a href="#Page_p004">4</a><br /> +<span style="margin-left: 1em;">value in 1880, <a href="#Page_p004">4</a></span><br /> +<br /> +Ratio of precious metals from earliest times to Christian Era, <a href="#Page_p013">13</a><br /> +<span style="margin-left: 1em;">Christian Era to discovery of America, <a href="#Page_p014">14</a></span><br /> +<span style="margin-left: 1em;">discovery of America to 1822, <a href="#Page_p015">15</a></span><br /> +<span style="margin-left: 1em;">1823 to 1889, <a href="#Page_p016">16</a></span><br /> +<br /> +Ricardo, use of the metals as a standard, <a href="#Page_p043">43</a><br /> +<span style="margin-left: 1em;">the value of money in a country depends on the amount existing, <a href="#Page_p076">76</a></span><br /> +<span style="margin-left: 1em;">there can be no depreciation of money but from excess of quantity, <a href="#Page_p076">76</a></span><br /> +<span style="margin-left: 1em;">his views as to a "well regulated paper currency", <a href="#Page_p078">78</a></span><br /> +<br /> +Rothschild, Baron, opinion of bimetallism, <a href="#Page_p017">17</a><br /> +<br /> +Rouland, M., governor of Bank of France, opposed to demonetization, <a href="#Page_p017">17</a><br /> +<span class='pagenum'><a name="Page_p116" id="Page_p116">[116]</a></span><br /> +Royal Commission of England, extracts from report of, <a href="#Page_p023">23</a>, <a href="#Page_p110">110</a><br /> +<br /> +<br /> +Sauerbeck on general price (those of 1887 the lowest for one hundred years), <a href="#Page_p041">41</a><br /> +<br /> +Seventy-two cent dollar, the, <a href="#Page_p092">92</a><br /> +<br /> +Seyd, Ernest, effect of increasing money volume, <a href="#Page_p008">8</a><br /> +<br /> +Silver, ratio of, to gold, at various periods, <a href="#Page_p013">13-16</a><br /> +<span style="margin-left: 1em;">declared unfit to be used as money, <a href="#Page_p021">21</a></span><br /> +<span style="margin-left: 1em;">objections to, considered, <a href="#Page_p021">21</a></span><br /> +<span style="margin-left: 1em;">the motive for demonetizing, by England, <a href="#Page_p021">21</a></span><br /> +<span style="margin-left: 1em;">the motive for demonetizing, by Germany, <a href="#Page_p024">24</a></span><br /> +<span style="margin-left: 1em;">the motive acknowledged, <a href="#Page_p023">23</a></span><br /> +<span style="margin-left: 1em;">and gold both variable in value, <a href="#Page_p041">41</a></span><br /> +<span style="margin-left: 1em;">—has it fallen?, <a href="#Page_p049">49</a></span><br /> +<span style="margin-left: 1em;">purchasing power in 1873 and 1889, <a href="#Page_p052">52</a></span><br /> +<span style="margin-left: 1em;">prejudice against it as money arising from the idea that gold money has greater "intrinsic value." That question considered, <a href="#Page_p063">63</a></span><br /> +<span style="margin-left: 1em;">shall we be flooded with it in case of remonetization?, <a href="#Page_p108">108</a></span><br /> +<span style="margin-left: 1em;">the world's supply, <a href="#Page_p101">101</a></span><br /> +<span style="margin-left: 1em;">If $2,500,000 a month for twelve years has not driven out gold, how much will do so?, <a href="#Page_p091">91</a></span><br /> +<br /> +Silver miners, their loss by demonetization contrasted with that of farmers and cotton-planters, <a href="#Page_p058">58</a><br /> +<br /> +Smith, Adam: Both gold and silver variable in value, <a href="#Page_p041">41</a><br /> +<span style="margin-left: 1em;">Definition of a guinea, <a href="#Page_p066">66</a></span><br /> +<br /> +Soetbeer's table, showing relation of general prices 1849 to 1885, <a href="#Page_p041">41</a><br /> +<br /> +Standard: The true Money standard not the material of which money is made, <a href="#Page_p078">78</a><br /> +<br /> +Stewart, Dugald, on Money, <a href="#Page_p067">67</a><br /> +<br /> +Steel, yield for 1888, <a href="#Page_p004">4</a><br /> +<br /> +Suicides in Germany, <a href="#Page_p025">25</a><br /> +<br /> +Supply of money, what it is, <a href="#Page_p073">73</a><br /> +<br /> +<br /> +Tabular standard suggested for time contracts as securing greater equity than gold, <a href="#Page_p043">43</a><br /> +<br /> +Thornton, Henry, on Money, <a href="#Page_p066">66</a><br /> +<br /> +Time contracts, their importance to industry, <a href="#Page_p006">6</a><br /> +<br /> +Torrens: The value of gold rises or falls as its quantity is diminished or increased, <a href="#Page_p077">77</a><br /> +<br /> +Treasury notes should not be redeemable in bullion, <a href="#Page_p104">104</a><br /> +<span style="margin-left: 1em;">Possible effect of such redemption, <a href="#Page_p106">106</a></span><br /> +<br /> +Tribune (New York) quoted as to fall of prices, <a href="#Page_p039">39</a><br /> +<br /> +<br /> +Unemployed, some statistics of the, <a href="#Page_p061">61</a><br /> +<br /> +United States, demonetization of silver effected in 1873, <a href="#Page_p026">26</a><br /> +<br /> +Usurer's loan on the farm, <a href="#Page_p070">70</a><br /> +<br /> +<br /> +Waller's verse, <a href="#Page_p024">24</a><br /> +<br /> +<br /> +Value, the meaning of, <a href="#Page_p063">63</a><br /> +<span style="margin-left: 1em;">subjective, not objective, <a href="#Page_p063">63</a></span><br /> +<span style="margin-left: 1em;">not "intrinsic", <a href="#Page_p064">64</a></span><br /> +<span style="margin-left: 1em;">of money not in the material, but in the stamp—in the power of legal tender, <a href="#Page_p065">65</a></span><br /> +<span style="margin-left: 1em;">money a measure of, <a href="#Page_p071">71</a></span><br /> +<br /> +Values, relative, of precious metals from earliest times, <a href="#Page_p013">13</a><br /> +<br /> +<br /> +Wage-loss from involuntary idleness enormous, <a href="#Page_p062">62</a><br /> +<br /> +Walker, Prof. F. A., on Money, <a href="#Page_p066">66</a>, <a href="#Page_p067">67</a><br /> +<span style="margin-left: 1em;">gold and silver both variable in value, <a href="#Page_p042">42</a></span><br /> +<span style="margin-left: 1em;">the value of money in a country determined by the amount existing, <a href="#Page_p077">77</a></span><br /> +<br /> +Wealth, national, estimated, <a href="#Page_p004">4</a><br /> +<br /> +Wolowski, M., effect of demonetization, <a href="#Page_p017">17</a><br /> +<br /> +Working masses entitled to better conditions, <a href="#Page_p057">57</a><br /> +<br /> +<br /> +Yardstick, the lengthened, "rung in" on the cotton manufacturer, <a href="#Page_p073">73</a><br /> +</p> +</div> + +<p> </p> + +<div class="notebox"> +<p class="noidt"><b>Transcriber's Note:</b> Obvious misprints in spelling and punctuation have been silently +corrected.</p> + +<p class="noidt">The original scanned images were not very clear, especially the tables with numerical values. +This may have caused some inadvertent errors to creep in during the transcription process.</p> +</div> + + + + + + + + +<pre> + + + + + +End of the Project Gutenberg EBook of Money, by John P. 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