Google

This is a digital copy of a book that was preserved for generations on Hbrary shelves before it was carefully scanned by Google as part of a project

to make the world's books discoverable online.

It has survived long enough for the copyright to expire and the book to enter the public domain. A public domain book is one that was never subject

to copyright or whose legal copyright term has expired. Whether a book is in the public domain may vary country to country. Public domain books

are our gateways to the past, representing a wealth of history, culture and knowledge that's often difficult to discover.

Marks, notations and other maiginalia present in the original volume will appear in this file - a reminder of this book's long journey from the

publisher to a library and finally to you.

Usage guidelines

Google is proud to partner with libraries to digitize public domain materials and make them widely accessible. Public domain books belong to the public and we are merely their custodians. Nevertheless, this work is expensive, so in order to keep providing this resource, we liave taken steps to prevent abuse by commercial parties, including placing technical restrictions on automated querying. We also ask that you:

+ Make non-commercial use of the files We designed Google Book Search for use by individuals, and we request that you use these files for personal, non-commercial purposes.

+ Refrain fivm automated querying Do not send automated queries of any sort to Google's system: If you are conducting research on machine translation, optical character recognition or other areas where access to a large amount of text is helpful, please contact us. We encourage the use of public domain materials for these purposes and may be able to help.

+ Maintain attributionTht GoogXt "watermark" you see on each file is essential for informing people about this project and helping them find additional materials through Google Book Search. Please do not remove it.

+ Keep it legal Whatever your use, remember that you are responsible for ensuring that what you are doing is legal. Do not assume that just because we believe a book is in the public domain for users in the United States, that the work is also in the public domain for users in other countries. Whether a book is still in copyright varies from country to country, and we can't offer guidance on whether any specific use of any specific book is allowed. Please do not assume that a book's appearance in Google Book Search means it can be used in any manner anywhere in the world. Copyright infringement liabili^ can be quite severe.

About Google Book Search

Google's mission is to organize the world's information and to make it universally accessible and useful. Google Book Search helps readers discover the world's books while helping authors and publishers reach new audiences. You can search through the full text of this book on the web

at|http : //books . google . com/|

I IKK \K\

op Till , ■'

University of CaLifori

Km-nrJ / .£k.t^ iSi,

6^i:i'/ (I \

iSgy.

^ ' \. .

^ ":

■I-	' ^i,>	<	^- '*'	,''-^''	7-"'
		'-r "";			(
		- r i	' V ,	.A	* '
T^>;.	:;rv ; '		~ a "
	« , -	K.	't'	---^'.	't-

•"'^>

« v.. V

' . '.'.

' V^

t

t

„, •^.^. -^^..^ ^ --'^^ \^..- -K ~ / V^-- ^...^\-- .'V^-'-i -' ''—--

- » X

■k ./■

■---<

^ '■•-:■:;

f

•- *-

'-■ -/<:

,-^^

"^ \

i "'

-S

•. 1 *

'>.

A :

. V

1 •*

■•'.^ V-^ V- ^ .:- -^'^ • J ■ .^^ ^ _ . _ .

A'

^V ■

' K^.. '■

. /"

V ^S'
		c

\

^ ..^-.j ^--v-^- -^V ^ -^'^.'-i ^f'^"^-/. ' -J - ••/' ^ / ^-T--: '^■^-.^ f '■" i,

I ! ..

i_

r

■ . v^.

-< :'.

/

TKUMBULL WHITE,

Silver arxd Gold

* *

A Bympofiinm of the views ^ ' *

of all parties on the ^ V ' Oy* '^

Gvirrencvj Q\jestior( "^ -^ ~ i

as expressed by their leading advocates

t #■

ThorOUg^hly •xpoundln^ th«

doctrlnea of f fCe SllVef^ .$J^

Mono-metallsm and Bl-metaliam, with all the arguments, pro. and con.

From the per\s of

John Sherman, Wm. M. Stewart. ^ Wm. B. Allison, W. J. Bryan,

John G. Carlisle, Wm. A. Peffer, Edward Atkinson, Wm. H. Harvey, Bei^j. B. TiUman, and others.

EDITED BY TRUMBULL WHITE.

Aflthov of **Thm Wovtd'B ColomblAa Xzpooltioii,** ** Wiff in th«

With portraits of leading Mateamen and Eoonomlata*

Copyrighted, 1893. h9

I

Trumbull wHiin.

PREPACB.

It 18 not often that any economic or political contro^ versy rouses discussion equal to that engendered by the gi'ave financial questions now at issue. A single gold standard of currency, an international agreement for bimetallism, the free coinage of silver by the United States, all sorts of solutions of the present com- plicated situation, find their advocates in the public prints. Tons of books and acres of newspaper pages have been filled with the arguments in favor of the ideas of their writeii^.r^Kuf ^ermore, to prove that all this is not entirely wasted effort, such books are bought and read in large numbers, and newspapers find no more popular subject for editorial and news columns than the financial questions. The growth of this senti- ment of interest has been gradual through the last few years, while other questions were holding paramount position in the minds of the people. But all at once there came a wave of awakening to the present impor- tance of currency systems and their relation to the everyday prosperity of the country, and discussion be- gan to multiply almost in geometrical ratio. It was necessary to feed the enormous demand for informa- tion, and tiie flood of books, pamphlets, and papers was the natural consequence.

In all this mass of literature there has been one lack. No single work has been available to the student who

(6)

f PREFACE.

■ought a fair presentation of both sides of the question at issue. With a recognition that this was an omission which ought to be filled, the present work was planned and brought into the form which it now takes. To give between one pair of covers the basic principles of each recognized school of currency economists, and the arguments in favor of them was one portion of the plan. To have these principles and arguments pre- sented by the most eminent advocates on either side, who should bring to their writings years of study and experience and fame sufficient to entitle their utter- ances to respect as the best interpretations of their views, was the remainder of the plan. It was believed that these eminent men, statesmen, economists, finan- ciers, would respond to such an idea ; that they would welcome such a proper means of placing needed infor- mation before an enquiring public seeking knowledge enabling them to form proper judgment ; that they would recognize the importance of a fair presentation of the questions at issue in the receptive and inquiring state of the public mind ; and that they would be glad to assume a portion of the labor of making such a dis- cussion accessible to many readers. There was no dis- appointment to follow. The most eminent men in the United States, famous in all walks of life which would bring them into familiarity with these financial ques- tions, responded with hearty interest. The result is the volume offered herewith. Its contents have been supplied by senators and representatives in congress, by governors, by economists in private life, by great editors, by college professors, by bankers, by theorists, and by practical men. Credit must be given for the courtesy of the Chicago Record which enabled the use

PBBFACEL 7

of certain articles included* in a discussioit earned on through the columns of that paper, by many eminent advocates on either side of the financial debate.

Every phase of the question is here presented, in fullness of detail, comprehensively, and clearly. The opinions of our great men are side by side and may be weighed one against another. The argumcLcs which they advance are presented in fair competition with one another, and each may stand or fall by its merits. The result is that every reader who seeks to know what is the right solution of the problem that meets him, rather than the mere fortifying of himself in an opinion previously formed, has here the material wherewith to form an opinion that he may defend, from full and careful study of all opposing views.

The whole object then, in the making of the book, has been to furnish a full exposition of the financial questions under discussion, giving the views and ar- guments of the leaders in the conflict, partisan and non-partisan. But in the selection and editing of mat* ter, in the compilation of the contributions, partiality, partisanship, the influence of editorial opinion have had no place. The result is that for the first time a thor* oughly disinterested presentation of the whole subject is made accessible. If it fills a portion of the need which it is intended to fill, enabling any inquirer to de- cide for himself what position he should take, as a man and a citizen, it will have fulfilled its object.

AtvvnA^^

WOtSL.

\

--;: -%

r ■ »

^-v.-.i^-IFCTv',:,

TABLE OF CONTENTS.

PAOI IlTTBODUCnOH ••••••• 13

CHAPTER I. Thb Habvet-Laughlin Debatb • • • . 23

CHAPTER II. By Sbbatob Joseph N. Dolph, of Oebqon • ,88

CHAPTER III. By Senatob Geobob G. Vest, of Missoubi . .124

CHAl^ER IV. . By Senatob Geobob F. Hoab, of Massachusetts • 166

CHAPTER V. By Senatob John Sherman, of Ohio • . .304

CHAPTER VI.

Thb Science of Money. — By Senatob Wm. M. Stewabt,

OF Nevada ....... 225

CHAPTER VII. By Sbnatob Wm. B. Allison, of Iowa . . .241

CHAPTER VIII. By Hon. J. Steeling Mobton, Secbetaby of Agbicultxtbe 267

CHAPTER IX. By Hon. John Dalzell, of Pennsylvania • . 269

CHAPTER X. Pbbsidbnt Cleveland's Lbtteb . • • • 280

CHAPTER XL William J. Bbyan's Reply . • • • 285

CHAPTEI? XII. By Senatob Julius C. Bubbows, of Michigan • • 201

CHAPTER XIII. By Hon. Elijah A. Mobse, Massachusetts • • 209

CHAPTER XIV.

Thb Fall of Pbicbb— The Cause and the Cure.— By Pbbsidbnt E. Benjamin Andbews, of Bbown Uni- VBB0ITY .•....• 301

chapter xv. Tmm Banking Pbivoiplb.^By Edwabd Atkinson • 331

W

10 CONTENTS.

CHAPTER XVI. PAGB

By Hon. CH1..8. Foster, of Ohio, Ex-Sbcbetaby of the

TBEABUBf ....••. 353

CHAPTER XVII. Bt Senatob Fbed. T. Dubois, of Idaho . • • 360

CHAPTER XVIII.

By Mubat Halstead, Editob of the Brooklyn Stand-

abd-Union ....... 365

CHAPTER XIX. By Ex-Govebnob Hobacb Boies, of Iowa « • 373

CHAPTER XX.

By Colonel A. K. McClube, Editob of the Philadel- phia Times ...... 375

.CHAPTER XXI. By Mobbis M. Estbb, of Califobnia . . . 3T7

CHAPTER XXII. By Jambs H. Eckels, Comptbolleb of the Tbeasuby • 399

CHAPTER XXIII.

National Cubbency and Bankino System.— By Wil- liam P. St. John. Pbesident of the Mbbcantilb National Bank, New Yobk . . . .409

CHAPl'ER XXIV,

A System op Cubbency. —By E. S. Lacey, Ex-U. S. Comp-

tbollbb ....«•. 429

CHAPTER XXV.

SlLYEH AND THE BANKS. — BY LYMAN J. GAOE, PbBSIDENT

of the Fibst National Bank, Chicago . • 437

CHAPTER XXVI. By Senatob W. A. Peffer, of Kansas . . .443

CHAPTER XXVII. By E. Rosewateb, Editob of the Omaha Bee • • 468

CHAPTER XXVIII. By John G. Cablislb, Secbbtaby of the Treasuby • 480

CHAPTER XXIX.

Cablislb's Speech Cbiticised.— By Benjamin R. Till- man, Ex-Goybbnob of South Carolina . . 516

CHAPTER XXX.

Siltbb in the Constitution.— By J. B. Cheadle, Ex-

Conobbbsman fbom Indiana . • • • 535

CHAPTER XXXI. Bt Hon. Joseph C. Sibley^ of Pennsylyanla . , 643

* ' I"

».- *

»■«.

LIST OF ILLUSTRATIONS.

TAQM

Trumbull White Frontispiece.

The Knights and the Shield • • • • .19

William H. Harvey 38

Henrt M. Teller .55

Joseph N. Dolph ••••••• 74

Riohard p. Bland 91

Oeorqe G. Vest 110

David B. Hill 127

Arthur P. Gorman •••••• 146

Charles F. Crisp • • • • • • • 163

John P. Jones ••••••• 182

John Sherman • • • . • • • .199

William M. Stewart 218

William B. Allison •••••• 235

J. Sterling Morton 254

Grover Cleveland • • 271

William J. Brtan 290

Julius C. Burrows 307

Fred. T. Dubois 326

Horace Boies 343

James H. Eckels 362

William A. Peffer 379

Benjamin Harrison 398

Thomas B. Reed ••••••• 415

12 LIBT OF ILLUSTBATIOirS.

William MoKinlbt «.••.• 434

Levi P. Morton 451

Robert T. Linoolm 470

Stephen B. Elkinb 487

Chaunoet M. Depew 506

John G. Carlisle 523

BBNJA1I0N B. TlLLHAN 530

Joseph C. Siblbt ••••••• 631

'>. .

AN INTRODUCTION AND A LEGEND.

A CHAPTER written to inti^oduce a discussion such as the one which fills this volume can have but an unim- portant function to perform, if it preserves the im«* partiality which is the measure of the real value of the work. It cannot elucidate the primary truths about the currency question, on which the adherents of all schools agree, for there are practically none such, even as primary as the definition of money itself. It can- not relate the history of money in the world, for the dispute begins with the beginnings of this history. It cannot even do much toward outlining the creation of our original monetary system, on the progress of legis* lation on financial questions in our own country, be* caus« it is on these very historical facts themselves that most pronounced difierences arise. Almost all that can be done is to indicate something of the present supreme interest which the subject has created, and something as to the form which the discussion here has taken. When that is done, the reader will very properly prefer to turn to the arguments that bear directly on the case in dispute.

The silver question has practically supplanted the tariff question in public interest and discussion. The financial stringency which began to make itself gener- ally felt in 1898, and from which the country was so slow in recovering, caused every thoughtful man to seek mn explanation of the condition^ and finding the reason

14 AK INTBODtTOTIOK AND A LEGBKB.

of the condition, to seek a remedy for future crises ot the same sort. The result was the wonderful spread of discussion on financial questions, the agitation for, and the oppposition to the free coinage of silver by the United States, at a ratio to gold of 16 to 1 in weight. Of course the same questions had aroused widespread interest for generations before. No one who knows the history of our country can suggest that interest in our financial system and the legislation which has created or changed it is a new thing. With the memory of warm discussions and prolonged ones in every session of con- gress for many years, over these or similar contro- versies; the introduction of new forms of legislative enactment, nearly as often; and the utterances in every political platform, state or national, on the currency question, it cannot be said that the matter has been left in abeyance, and not been brought to the attention of the public at large. The record of the last half century of United States history is full of the chronicles of widespreading waves of popular senti- ment on political and economic and moral questions, some of them having the dignity and strength of a concerted movement, enlisting in their ranks men of the highest character and ability; others failing to mani- fest such strength, and so losing their importance.

Some of these movements have been financial. The place to classify the present discussion of the silver question varies according to the point of view from which the observer looks. But few fair men fail to acknowledge that the causes of free coinage of silver, international bimetallism, and gold monometallism have each enlisted in their service men of worth and might iu learning, in statesmanship, in eloquence^ in

AK INTRODUCTION AND A LEGEND. 16

fiune, in honesty, and in genuine regard for the wel« fare of all people, in the future as well as in the present. This fact should make possible the freest and fullest discussion of the subject from every point of view, without rancor or any stronger feeling than desire to attain the right. Such discussion has indeed become full and free, but unfortunately there has aiisen that very feeling which is to be regretted, and sectional pride or sectional interest have been sought to array themselves under one or the other banner in unanimity. The discussion which has become so general, and which finds one of its expressions in the present volume, is of course but the successor of less general discussion main- tained for many years. But in its recent form it is really young, and so far as the explosive interest which has been awakened throughout the central, western, and southern states is concerned-, among people, hun- dreds of thousands, or even millions of them who are not alwtiys active to study the economic question at is- sue, its age is almost coincident with the present de- cade. Every year until 1896, the year of writing, has seen a multiplied increase in the territorial as well as the numerical extent of the agitation, and the larger public of the eastern and northeastern states are scarcely yet aroused to a realization that something of imperative importance is occurring.

One book written in popular style and sold id, a pop- ular price has so much impressed the people who are interested in the questions at issue, that not only have there been sold of it approximately one million copies within less than two years, but it has commanded tlie attention of writers on the opposing side to such an extent that at least half a dozen books have been

i6 jlS intboduotion akd a zjbgend.

written with the avowed object of rebutting its argu ments, and hundreds of newspaper editors devote space in their columns to controverting or sustaining the asser- tions made in it. There is no argument necessary to prove that public interest justifies, and the lack of such a work demands a book which shall within the limits of one volume give in convenient form the arguments on all sides of the controversy, as presented by the strongest and most eminent of the advocates.

The city of Chicago has become the center of the contest. This is partly because of its location, and partly because of its population. Standing as it does in the practical commercial center of the United States, the largest of the inland cities, its situation makes it easily accessible to the people of all parts. It is in touch with the west and south, as truly as with the east and northeast, and between these divisions, to some extent, have the lines of battle been fixed. Its popula- tion contains representatives of all sections. Its com* merce is quick to feel any movement which touches commercial interests. Its newspapers are enterprising and quick to give space to questions and discussions of rising interest. It is the publishing center for many books dealing with this and all other questions of great or small interest. These things must explain why in the discussions that are to follow, citizens of Chicago seem to have a peculiarly large share in the arguments. They have been peculiarly active and interested, to study and write, and their matter has but its just and proper proportion of space. The opening discussion of the volume is one of the most important verbal pres- entations of the whole subject that has been made at any time. Immediately following it, are placed several

AN INTBODUOTION AND A LEGEND. IT

speeches which were made in the United States b^nate during the discussion of one of the most importaut measures of recent years, in each case furnished directly for this volume by the senators whose names they bear, who selected them as in each case being the presenta- tion of the subject which the senator would now choose to make for public reading. From that point in this Tolume, the contributions are arranged in such a way as to make what seems the fairest presentation of both sides. Some of the writings are made directly in an- swer to others, while some are entirely independent of any matter adjoining. There is no alternate arrange- ment, placing first the views of an adherent of one school and then of the other, but each is here on its own merits, placed where seems most appropriate to the harmony of the whole. That the result may be the clarifying of the economic atmosphere through which many sincere, honest, and unsettled inquirers are look- ing for light, to enable them to make a proper decision as to their own course, seems not an unreasonable hope. It is necessary to concede honesty of intention and purity of motive to every writer here, or else to pass him by as unworthy of a place.

Once upon a time, so the legend runs, a shield hung at the side of a highway, along which knights were wont to journey as they rode to tourneys and to jous* ting-meets. It was so swung from its support that one side of the shield looked down the highway to the east, and the other side, as would naturally be the case, looked westward. On a certain fair morning in spring, as the sun was rising over the eastern hills, two knightv armed cap-^-pi^, with lances in rest and visors raised oarae near to one another down the road. One of the

IS AK INTRODrCTION AND A UBQBXIK

knights was dressed in chun armor of silver links, and was mounted on a beautiful white charger, which seemed to share his rider^s spirit and bravery The other kuiglit was clothed in gold mail, and proudly sat upon a fiery steed of ruddy chestnut hue, almost golden in its bright- ness. And the golden knight approached from the eastward, to meet his fellow, friend or foe as time would tell.

^^Good morrow, sir knight,** said the one of gold, ^^it is a fair and bright morning wliile we ride. When ye pass to this side of the swinging shield, fail not to turn and look how yonder sun reflects from its golden face, and dazzles the inquisitive eye that would read its scription and admire its skilful carving. A stranger knight am I to this highway. Can ye tell to me the reason why the shield bangs here ? "

" By my halidome," quoth the other, " I cannot tell, most courteous knight, why hangs the shield. But sure am I your eyes do play you treason in the sunlight's glare. For silver is it, silver as my armor here, and ex- quisitely bossed and graven. Come where I stand, and see the silver shine."

"Now do you mock me, sirrah,** said the first. ** Know I not gold from silver in the eun ? Do I not see with eyes that, never failed ? Is not the sun itself in thine, and but reflected rays, not half s:o strong, in mine? Is it the part of stranger courtesy to thus dispute, when meeting other strangers on the May ? I close my visor to a face so false I "

And saying thus, the golden knight, with scornful mien, moved forward to pass on.

"Hold!" cried the silver one, with face aflame. ** No man shall call me false I A knight I am, of honox

AN INTRODUCTION AND A LEGEND. 21

■

proven well, in many a tourney, fought in many lands Raise now your lance atilt, and lide ye hard, or you shall roll, full-armored, in the dust."

Then rode they fast together, and the shock, when under that fair shield they met, was fierce. Again they turned and rode, again they met. They fought until their lances broke in twain. They fought with swords, when lances failed them both, till chargers tired and faltered in the meeting. They fought on foot with sword and then with mace. They fought till morning passed, and nooQ, with raging heat, eichausted them the more. They fought throughout the quiet afternoon, beneath that swinging shield above their heads. And when the sun was sinking in the west, illuming now the other shining side, both fell there in the highway where they fought, wounded, exhausted, spent of blood, and dying. As these two knights had met in battle shock, they wavered forward now and then drew back, crossing the line that marked the shield's position, and shifting often each his own at- tack. So when they fell, it happened that the knight of gold was lying farther to the west, and he of silver on the eastern side. And each knight raised his eyes to see the shield whose metal face had forced him to a fight. Then he of silver cried aloud, amazed, " What do I see ? A shield of gold it is." And he of gold in wonderment replied, " Now silver is it, or I am de- ceived."

Then struggled they from where they fallen were, despite their wounds, their weakness, and their pride, each to his former point of view again. And when they realized what was the truth, they lifted up their voices loud and wept, that such a fight should be, and S

S2 AK INT£ODUCTION AND A LBGBNIX

such a fate, for gallaut knights to face when both were right in part and both were wrong. Then talked they of their early lives, and found by strange adventure that they two were brothers. One mother had they, but their lives had been apart from early childhood, and their paths had spread until they met again on this dad day.

The shield that hung above their knightly heads, as hai^d in hand they waited thus, and died, was golden on the side that faced the east The western side WM 8ilv«r.

SILYER AND GOLD.

CHAPTER I.

THB HABYET-LAUOHLIN DEBATE.

Of all the spoken arguments on opposing sides of the curiency question during the early months of 1895, the one which it seems proper to name as the most im« portant was the Harvey-Laughlin debate of May 17. For three hours during that evening these eminent advocates disputed before an audience composed of the most prominent men of Chicago, and many of national fame from other cities. Leading business men, bank' ers, economists, clergymen, and educators were there, ready to hear the views which they approved, or be convinced if facts of sufficient weight to controvert previously formed opinions were presented to them. For more than a week challenges, counter challenges, and preliminary negotiations were in progress, and when at last it was atmounced that the Illinois club had completed arrangements for the debate, public in- terest was thoroughly aroused, and applications for seats poured in by the thousand.

The personality and prominence of the two dispu* tants were the cause of much of the interest which arose. William Hope Harvey, who championed the cause of the free coinage of silver, is the author of

Ca8>

21 SILVER AND GOLD.

^ Coiirs Financial School/* the little book which has set the west on fire with interest in the fight. From him was to be expected the most conyincing presenta- tion of the arguments in favor of his position that could be found anywhere. ISs unpretentious little volume, but one out of several which he had written in the same service, has roused attention in the columns of almost every paper in the land, and editorials sus- taining or controverting it are constantly offered to the public. Prof. J. Laurence Laughlin holds the chair of political economy in the great University of Chicago, and commands attention whenever he speaks on econo- mic questions. To this educational work he brought practical experience gained in a business career before be began his professional life. His works on the cur- rency question are known wherever the question arises, and he is recognized as a leading authority for the views of those who maintain opposition to the free coinage of silver. At the time of this debate, Prof. Laughlin was contributing to one of the leading daily newspapers of Chicago, an editorial article each day, in which he was taking up the chapters in "Coin's Finan- cial School," seriatim^ and answering them in turn. The disputants were therefore well matched.

The question to be discussed was put in the follow- ing form :

Resolved, that the United States should at once enter upon the free coinage of silver, at the ratio of 16 to 1, independently of the action of any other nation.

Of course Mr. Harvey maintained the affirmative of this proposition, which was negatived by Prof. Laugh-* lin. It was a feast of logic and a flow of statistics. The wall behind the platform was covered with charts

IHB HABVEY-LAUGHLIN DEBATE. 2S5

and diagrams used by Professor Laughlin in illustra- ting his arguments relating to the relative production and quantity of gold and silver in the world, the prices of cereals and cotton and wages at various periods, and other statistical information relating to the subject under discussion.

It was 8:16 o*clock when a vigorous clapping of hands announced the entrance of the two distinguished disputants, Messers. Laughlin and Harvey, escorted by President H. M. Thomas. As they ascended the plat- form there was a renewal of applause. President Thomas seated the speakers, Mr. Harvey on his right and Professor Laughlin on his left. President Thomas at once stated the object of the meeting, and introduced Mr. Harvey in the following brief manner :

'^ There is probably no question at the present day in which there is such widespread interest, such general study and thought as that of the financial problem. Among the many conflicting views and statements which are presented for our consideration there appears to the uninitiated an almost hopeless mass of statement of facts and of theories. In this dilemma the Illinois Club is pleased to welcome to its rooms two distin- guished students of finance. Professor Laughlin, on my left, of the Chicago University, and William H. Har- vey, on my right, well known as a writer. Mr. Harvey will open and will have one hour, if he so desires. Pro* fessor Laughlin will follow with one hour, if desired. Mr. Harvey's rejoinder will be limited to fifteen min- utes, Professor Laughlin's rejoinder to fifteen minutes, and the closing remarks by Mr. Harvey be limited to five minutes. It is my pleasure and privilege to pre- sent to you William H. Harvey, who will discuss the

M SILVER AND GOLD.

affirmative of this question/' In his addresa Mr. Har- vey said :

^^Mr. President, Members of the Illinois Club and Gentlemen : — When accepting the invitation of your committee I had hoped that this discussion would be on fundamental principles and facts, thus educational in its character, and later on, when better informed as to these, we would reach the remedy. I felt also a keen desire to get at Professor Laughlin on the unit of value existing prior to 1878 and the ^* crime" of that year, two points on which he has been misleading the readers of The Times-fferaliL But he has seen fit to decline a discussion of those two questions, and we are to-night to take up the remedy — the last question cov- ered by this controvei*sy.

*^ The first reason why I am in favor of independent action by this country is that we should not be sub- jected to the influences of the governments of Europe. When our forefathers declared their political independ- ence from Europe it was to free themselves from the class legislation of those governments, justly termed plutocracies. If the people can be reduced to poverty and the prosperity of the United States can be ruined by hanging to the financial policy of Europe, then we can be reduced to the same condition by financial legis« lation as a war of conquest would reduce us.

" Our friends the monometallists say : We admit bi- metallism would be good if we could get international bimetallism. In other words, they agree that there is something radically wrong, but claim that we are tied to the financial policy of Europe. So that, if a war of conquest in this country by the monarchies of Europe, whose form of government is different from ours,

THB HABYET-LAUGHLIN DBBATS» 27

would reduce us to the condition that the people of those governments are in, and they can accomplish the same purpose by financial legislation, then there is a necessity for independent action.

*^ Where there is a necessity there is a remedy. Sup- pose you were to say to a man of common sense, ^ We are compelled to adopt the financial policy of Europe ; * and he replied, ^ The country is going to waste and ruin, and desolation is spreading from ocean to ocean,' and demonstrates that the cause of it is our adoption of the financial policy of Europe and we say back to him : * It makes no difference, we are compelled to adopt the financial policy of Europe.' This answer would not be acceptable to the hard-headed citizen of this country. The governments of Europe are plutoc- racies. They squeeze the lemon for the people about every so often. The few control class legislation and the masses are hewers of woods and drawers of water for the titled few. Like the farmer who goes out and robs the bees' nests, they rob the people and then give them time to fill the nest again before going out to rob it again.

^^We have certainly act forgotten the history giv- ing the reasons why our forefathers established this government — and that was the reason. Now, if finan- cial legislation is one of the classes of class legislation by which the many are robbed and the few are en- riched, by which the lemon is squeezed, then it is one of the institutions of the European governments that we, as a nation of people, republican in form, should declare our independence of. That is the first reason why independent financial action should be taken by tile United States.

28 SILVER AND GOLD.

"If they say, *We must have the same money that they have in order to carry on business with them/ my reply is, * That the biggest business we ever did carry on with the balance of the world, and particu- larly Europe, was the time when they had gold and sil- ver as money and we had neither/ It is one of those peculiar arguments that wears its way into a man's brain when reiterated and monotonously given out by the daily press that we must have the same money that the other great commercial nations have. We never stop to investigate. It belongs to that catalogue of arguments that existed prior to 1492, when a ma- jority of the people of the world said that the world was flat and a few men, including Columbus, contended that it was round.

*' Those interested in purposely cultivating through ages an international money on lines marked out by them have the same possession of the public mind as the critics of Columbus had, and those who coutend for financial independence from Europe can be classed with the followers of that great navigator, whose minds were in advance of the age in which they lived.

" This nation can have an independent financial system without any reference whatever to the balance of the world, and can carry on its own commerce by ocean and by land with the other governments of the world notwithstanding. We do not now settle our balances with Europe in coin except on its commercical value and by weight. Our coinage has nothing to do with it. Primarily balances of trade are settled with trade. We give them our wheat and we take their silks, anil the balance that we may owe them or they may owe us will be settled just as merchants between

THE HABVEY-LAUGHLIN DEBATE. 29

the importing points may agree to settle it. Thej can settle it in gold for so much a pennyweight as measured in the money of their country or our country, or in so much silver or in so much copper, or so much of any other merchandise as may be agreed upon between them in their trade relations.

^^ There is no such thing as an international money. So that when a merchant in London who has goods, and vice versa with a merchant in New York, finds at the end of six months that the merchant in New York owes the merchant in London $50,000 as measured in the American coin, whatever it is, and they have an understanding by which the New York merchant is to settle those balances, and it may be in wheat or it may be in cotton that the contract would be settled, any- thing that would be in a general way agreed upon : but gold or silver, irrespective of how much we were coin- ing of it as money, could be agreed upon. So that in the beginning of a study of this question that point can be made clear to the mind of any man who does his own thinking.

^^ You cannot meet arguments that are purely theo« retical, such as a man proving to another that a cat has three tails. He proves it this way : No cat has two tails and one cat has one more tail than no cat, there- fore one cat has three tails. Profound theorists on the other side of this question are not especially fond of this class of reasoning. Growing out of a long-accus- tomed habit, the men who have studiously cultivated class legislation for their benefit have impressed the common masses with certain apparent fixed principles, which they are not to be controlled by, and one of them is necessity of international money, just as they

80 SILVER AND GOLD.

have made you believe that national bank money was necessary.

** Now, the reason behind that is this : They can go to Washington and hypothecate their bonds, draw their interest thereon; get a loan on these bonds to 90 per cent, of their face value, without paying any in- terest, to loan it to you at from 7 to 12 per cent. That is a special privilege. And we have learned not to blame people for doing these things. But we should. It should be a common countrv, conducted for the benefit of all the people.

" What we are contending for is the opening of the mints to the free coinage of silver (they are now open to the free and unlimited coinage of gold, and have never been closed to that metal), and the establishment of bimetallism on those simple and fixed principles that were adopted by those statesmen who had in view the interest of no class, but of all the people.

^^ What we want is bimetallism, and scientific bimet- allism is this :

** 1. Free and unlimited coinage of both gold and sil- ver ; these two metals to constitute the primary or re- demption money of the government.

" 2. The silver dollar of 871 J grains of pure silver to be the unit of value, and gold to be coined into money at a ratio to be changed if necessary from time to time if the commercial parity to the legal ratio shall be affected by the action of foreign countries.

^^ 8. The money coined from both metals to be legal tender in the payment of all debts.

" 4. The option as to which of the moneys is to be paid in the liquidation of a debt to rest with the debtor, and the government also to exercise thftt

THE HABVEY LAUQHLrN DEBATE. 81

option when desirable when paying out redemption money.

^* The mints are now open to the unlimited coinage of gold. Such portion of the product of that metal as does not find an immediate demand to be used in the arts and manufactures is taken to the mints and coined into money — into money — and becomes at once the object for which all other products seek the market. It thus has an unlimited market, as the mints are open to all of it that comes.

** This was true also as to silver prior to 1878, but by operation of section 21 of the act of that year the mints were closed to the unlimited coinage of that metal. Hence, when silver now seeks the market and exhausts the demand supplied by the arts and manu- factures and the small purchases of the government to coin it into token money, the demand for it ceases. Gold has an unlimited demand. Silver has a limited demand. Silver is now a commodity to be measured in gold. It is an object to be gored and kicked by bulls and bears. It is shut out from the United States mint. It is token money. It has been deprived of that unlimited demand it enjoyed prior to 1878.

"We would restore to it that unlimited demand. We would open the mints to it again. We would leave the mints open to gold as they are now. We would give silver the same privileges as gold. Restor- ing to it tills unlimited demand would cause the value of silver to rise as compared with gold. This is what we want. This is what we would do.

" We would again make the standard silver dollar the unit of value, as it was before 1873. It would thus be a dollar, and the bullion in it would be wortk

82 iftlLVER AND GOLD.

a dollar, as the number of grains of bullion in a dollar would liave the right to walk into the mint and be coined into a dollar. No man would take less for it when he could have it coined at pleasure into a dollar. We would make gold coins of the value of so many silver units or dollars, as the law existed prior to 1873.

" Silver is the people's money. It was so regarded by our forefathers, and was the favored metal of the two. It was given the position of honor in the coinage of our two metals by having the unit of value made from it, and gold, its companion metal, measured in it. Gold was and is the money of the rich. This was to be a government of the people, and the people's money was to be the most favored. Twice when the commer- cial ratio between the two metals made it advisable to change the legal ratio, the change was made by reeoin- ing the gold coins. This was in 1834 and 1837. The spirit of our forefathers then lived in their sons. The gold coins were changed in weight and size. In 1834 the gold eagle had twelve grains taken out of it. In 1837 the gold eagle had two-tenths of a grain added to it. No change was ever made in the quantity of pure silver in the silver unit. There were to be no two yardsticks. The rich man's money, gold, was recoined when the commercial ratio changed to interfere with the legal ratio. This is the law we would re-enact.

" We would make both legal tender in the payment of all debts. We would repeal the law of 1873 and the Sherman law of 1890 authorizing contracts (bonds, notes and mortgages) to be taken payable in gold only. We would allow no discrimination to be made between the legal tender character of the two metals. We would allow no private individual to dictate to the

THB QABVEY-LAUGHLIN DEBATE. 88

government what its legal tender money should be. We would place the white metal on an equal footing with the colored metal without regard to previous con- dition of race or servitude.

" We would give the option to the debtor, if there was any preference as to which of the two he would use in the payment of a debt. A break in the com- mercial parity causes the cheaper metal to be used. This increases the demand for the cheaper metal. This increased demand restores the value of the metal that had thus fallen below a parity and brings it back to parity. To give the option to the creditors causes the dearer metal to be demanded, and it thns grows dearer and dearer, and a parity is permanently broken and the gap grows wider and wider. When the debtor has the option the two metals will oscillate close to a parity and substantially at a parity. This oscillation is the elasticity that bimetallism gives to primary money. If dhe becomes scarce the other is used. If one is cornered the other takes its place. Either an*' swers for money.

^^ A true knowledge of bimetallism and the simplic-' ity of that system died with our ancestors. Selfishness titalked into the American congress at a time when neither metal was being used as a primary money — our primary money was then paper money. At a time when corruption was rife in our national legislature, followed by articles of impeachment against Vice- President Colfax fur complicity in the Oakes Ames aJBfair, the resignation of Secretary of War Belknap for bribery, the charge of corruption against numerous congressmen in connection with the Credit MobUier scandal and land grant swindles.

84 SILVER AND GOLD.

^ At a time when statesmanship was dwarfed in per- sonal selfishness men who knew what the effect of such a change in our financial policy meant organized sue. cessfully the first trust to be benefited by national leg- islation in this country. It was a money trust. It was the demonetization of silver. The money of the people was destroyed. Silver at that time was at a slight premium over gold.

^^ By this act the mints were closed to the unlimited coinage of silver, except the trade dollar, which was overvalued by eight grains and intended only for ex- port to China, and it was shut off by the act of 1876, except as the secretary of the treasury might permit it to be coined.

^^ Silver had then begun to fall, as measured in gold* and the breach in the commercial parity of the two metals, as was natural, gradually widened. With re- sumption gold asserted its importance and silver corre- spondingly declined. Under the Bland-Allison act of 1876 creditors began to make their notes, bonds and mortgages payable in gold to the exclusion of all other forms of legal tender money. This increased the de- mand for gold. Silver had ceased to be primary money. It had taken a place with nickel and copper as token money, all redeemable directly and indirectly in gold. That elasticity which the alternate use of silver with gold, that true bimetallism, gave to our pri- mary money was now absent. If the demand for gold became too great to supply the normal needs of pri- mary or redemption money, there was nothing to take its place as such. Creditors would demand the dearest metal and the law had given them the right to do so.

^^ There was but the one metal to which the mints

THE HAEVEY-LAUOHLIK DEBATE. 86

were open — the commercial value of the other metal had been lowered by legal discrimination against it Gold was carrying the silver just as it is carrying paper money. Silver was not permitted to take the place of gold.

"If gold was cornered neither the United States treasury nor debtors could put silver in competition with it. They must go to the men who have the gold and get it, and submit to their terms. A corner on beef cannot seriously threaten the health of the people of this nation so long as mutton and pork are in compe- tition with it. A corner on gold could not, as it does now, seriously threaten the credit of this nation if sil* ver was in competition with gold as primary money.

** What is the remedy? Shall we follow Mr. Cleve- land and Mr. Sherman and such party leaders any farther? They have led us into a swamp, and the miro is getting deeper and deeper ; we are sinking in the mud and slush more and more, with an abyss and oblivion beyond. Speaking of these two party leaders reminds me of the good old Methodist woman who was invited by a Presbyterian woman friend to go to her Presbyterian church to hear a Presbyterian preacher. Well, when they got there, they took seats up in the Amen corner, and, to the surprise of the good old Methodist woman, she found that the Presbyterian preacher could preach a real soul-stirring sermon, and she expressed her satisfaction by saying * Amen ! ' This attracted the attention of the Presbyterian dea- cons, and they commenced looking cross-eyed at her. But the sermon grew better and better, and the Metho* dist woman was soon crying ^Hallelujah I ^ The dignity of the Presbyterian deacons was shocked. From cry-

«6 SILVER AND GOLD.

ing * Hallelujah ' the good old Methodist woman soon got to clapping her hands and shouting. This was too much for the deacons, and two of them took hold of her and, picking her up, carried her out of the church. As they passed down the aisle with her, she exclaimed. * I cannot stand the honor,' and repeated this state- ment several times, ^I cannot stand the honor.' The curiosity of the old deacons was excited to know what she meant, and, when they put her down in the vesti- bule of the church, they asked her why she had said what she did. She replied : * Christ rode out of Jeru- salem on one donkey, and I have ridden out of this church on two.'

'^ Let us have nothing more to do with the men who have assisted in tying the hands of this great nation and delivering its financial policy over to the gold gam- blers of the world. The bank of the Rothschilds in En- gland is now behind the United States treasury. They are our financial agents ; our financial managers. We are paying them the princely salary of f 8,000,000 for each six months of their valuable services. It requires special pleading to defend this transaction and the cir- cumstances which have led up to it. You will hear some of that special pleading to-night from the gentle- man who is to follow me. We are now in the hands of the pawnbrokers of Europe. They will take the same care of us that the spider did with the fiy.

" We have very little gold left in this countiy. We are a debtor nation and our people and corporations are heavily in debt to the people in England, and the interest on what we owe them amounts to, annually, about $250,000,000, payable in gold. They demand gold. The contracts call for it in gold. To pay this

WILLIAM H. HAKVliy.

THE HABVEY-LAUGHLIN DEBATE. 89

ire have a balance due us in trade with Europe of about 1100,000,000. That leaves 1150,000,000 still left to pay them. How do we pay it ? We produce about $40,000,000 in gold yeaily. We give them that. This leaves about $100,000,000 still due them. How do we pay it? Out of the reserve stock of gold. With them getti.ig all our money represented by the bal- ance due us on exports and all our annual production of gold, and $100,000,000 annually from our reserve stock of gold, how long is our reserve stock of gold to last?

"How are we to replenish it? There is only one way. That is to borrow it from those who have it, and that means England. And that is what we are doing. That means more interest, more gold annually to be paid to England. Where will it end? It means the 'dismal swamp ' and * hell's half acre ' beyond.

" This is what having a gold standard means. A primary money without the elasticity that two metals give. The rich man's money. A money that is easily cornered ; that cau be physically cornered ; cornered in this room — all of it — all there is in the world. A dol- lar from it is the size of a drop of water, so small that by act of congress of Sept. 26, 1869, its further coin- age has been prohibited. We now have a unit of value so small as to be impracticable for use ; that cannot be coined into money the size of a poor man's transaction. This is not now a poor man's government.

" How are we to pay these debts to England ? Re- pudiate them ? No I Robbers' dollars as they are, let us pay them. Result of a conspiracy played on us while we slept, yet let us pay them. If we don't, Lyman J. Gage or Russell Sage will say we are die- 8

40 SILVER AND GOLD.

honest. They will never say the other fellow ia dishonest. He wears good clothes, looks impor- tant and owns a newspaper. But how are we to pay these debts to England ? It is this way : Restore sil- ver ; put it in competition with gold on a legal ratio of 16 to 1. Repeal all laws allowing a discrimination be- tween the two metals ; stop gold notes from being taken. Put silver in competition with gold as quickly as possible. Where gold contracts do not exist silver will go at once into competition with gold and this will take some of the demand off of gold. To that extent it will lower the value of gold. The extra demand for silver will raise its value. Everything will advance in value at once. The Tribune admits that.

"As silver advances, the silver England is now buying from us to ship to India ($15,000,000 last year), to buy wheat and cotton, will cost her more. India wheat and cotton that she buys with silver will cost her that much more. A farmer in India wants an ounce of silver for a bushel of wheat. At free coinage that ounce of silver is $1.29. That means that if England pays us $1.29 for an ounce of silver, wheat from India will cost her $1.29 per bushel. Then she will pay us S1.29 per bushel for our wheat. She now buys silver from us at 65 cents per ounce and buys wheat and coin ton with it in India, and we must compete with that price.

" When our silver advances and the price of all our products advance and wheat and cotton go back to their old price, we will be more than able to pay our debts. Our balance in trade wUl be $200,000,000 in- stead of $100,000,000, and this will only leave us $50- 000,000 to pay the balance we owe England annually.

THE HAEVEY-LAUGHLIN DEBATE. 41

The only way to pay England is to advance prices per- manently, not spasmodically, as is now being done on a few articles.

" We are now getting drunk on more money bor- rowed from England. Fifty million dollars on railroad bonds last week. The relapse will be worse than the lasir attack. But Ihcy say gold will leave us, and will go out of sight, and how are we to get it to pay our gold debts ? We are now paying 100 per cent, pre- mium for it with our silver and about the same pre- mium on it in wheat, cotton and other products. When we have put silver in competition with gold, the premium cannot possibly be that much. If when our mints are open to silver, gold is held at 25 per cent, premium^ it will mean that we have taken 75 per cent, of the present premium out of it, as it now takes the silver in two silver dollars to buy one of them. It will then only take one and a quarter of one of our sil- ver dollars to buy one gold dollar, and it will take less of any of our other property to buy gold than it does now.

" It is foolish to say that when silver is in competi- tion with gold that gold will cost no more. As in the former illustration, as well say that beef will go higher by putting pork and mutton in competition with it. As we get these gold debts paid oflf we will be more in- dependent. We can show gold that we do not depend on it for money. It will then be our slave. It is now our tyrant. It will then come back and beg us to take it as in 1878, when it — one of these gold dollars — ^was worth two cents less than a silver dollar. The more im- portance we place on it, the more we will have to pay for it ; the less importance we attach to it the less we will have to give for it.

42 SILVER AND GOLD.

'^ If a man suddenly finds himself floundering in the middle of a stream the quickest way out is to strike out for the nearest shore. The quickest way out of the present situation is to leave the mints as they are, open to the free and unlimited coinage of gold and throw them open to the free and unlimited coinage of silver at the ratio of 1 to 16 as full primary redemption money. And why the ratio of 1 to 16? Because that was the ratio when the trick was played. A great wrong has been committed and to right that wrong is the first thing to do.

" With the mints of this great nation open to the free and unlimited coinage of silver a demand has been created sufficient to absorb all the surplus silver in the world if it wishes to unload upon us. How much sil- ver is there in the world ? As expressed in dollars there is $4,000,000,000 of it available for use as money. ' As expressed in bulk it is the cube of sixty six feet. It will all_go in the room of the First National Bank of this city and the basement thereunder.

" Now, we will pull the throttle valve ; we pass the act of remonetization. The mints are thrown open as they were prior to 1873. Now, what is the result? It would be like an engine starting oflP on a rough track to start with, probably. Here would come the silver of the world, we will say, to take our gold away : * You fellows, have overturned silver. We are willing to swap with you ; we will give you our silver and take your gold.' Well, here they come with it. How are they going to give us their silver ? They give us silver toT our gold. How much would they get and how much would they give us ? At the present time there is probably about $400,000 000 of gold in the United

N

THB HARVEY-LAUGHLIN DEBATE, 48

States. It is only a very small sum compared with the necessities of the country. Now, suppose they got all of our gold ? What would they do with it ? Would they eat it ? Is there anything sacred about gold, or silver, either, except for the use of the arts and manu- factories and for their desirability to use as money ? Now, they want to bring us the balance of their silver.

" What do we give them for it? We give them our products. Sliips are coming into our harbors from all portions of the world bringing us the silver of the world — this 66 feet. (I am taking an extreme view of it — a monometallist's view of it.) And they are go- ing back with the products of our spindles and looms and of our fields. They have got our products and we have got their silver.

" We can go to work and raise the same products nex't year over again and tell them to bring some more of it if they have got it. They bring us all their sil- ver and they have found out that we have got enough to give them for it. In other words, the United States is big enough when she throws her mints open to the free coinage of silver to take all the silver in the world, and give up her products in payment for it ; and such a nation can fix the ratio between gold and silver. They could find ships enough to bring it to us. Two ships would carry it all. The products for this country for a single year would take it all. And we could still say : ' Come on. We have more to sell you.*

"Such a thhig would put our manufactories at work. There would be no idle labor in the United States in ninety days after the monometallists tried that game on us. There is only *1,400,000,000 of silver in the

44 SILVER AND GOLD.

world that is not in the coins of the established govern* ments.

" It would be the very best thing that could happen to this country if we could trade what is claimed to be $600,000,000 of gold in this country (but in truth less than 1400,000,000) for all the silver in the world. It is just as good as money. It is an erroneous idea to stand gold up and worship it as a great god. There is nothing in it except its use in the arts and its use as money, and you have been impressed with its use of money simply because it has been impressed upon you.

"• You don't have to carry silver around with you. You don't carry gold around with you. We carry more silver than we do gold. You carry a paper sub- stitute to represent it. Gold would immediately come back and knock at our door. (I mean if this happened. I don't admit it will happen, because I won't say that the balance of the world are fools enough to give us their silver.)

" What I say will happen will be this: When a great government like the United States says: 'Here is equal exchange, 16 for 1, gold for silver,' a man in France is not going to part with his silver or gold un- less he gets that much for it ; unless he gets as much for it as the United States will pay for it, less the cost of exchange.

" So that when a government that is big enough to take all the silver in the world, if it wants to test its capacity, a demand is created by an influence that is able to sustain that demand, so that a man nowhere in the world is gtang to sell his silver for gold for any less than he can get for it in the United States. But we will not have to go to it alone. Mexico, Central and

THE HABV£Y LAtJGHLIK DEBATB. 45

South America are already w ith us when we start. We start with one-half of the world geographically ; all bonded together in sympathy. The reason why Mexico and the South American governments cannot go it alone is because they are small commercial guvern- nients. Europe and the United States are too much for them. The enormous demand made for gold by the enormous commercial transactions of Europe and the United States makes a demand for gold that the gov- ernments of Mexico, South America and China and Japan are not equal to overcome. So that the United States, when she would start, would have the assistance of these weaker governments with her.

" France said to the United States at the inter- national conference in 1876, *we come here to hear your proposition and to follow you ; all you have got to do is to start.'

" France has been enforcing the bimetallic system and refusing to pay out except half and half, saying to us: * We are waiting on you, open your mints and we will follow.' So we would start with the western hemi- sphere, with China and Japan on the eastern hemi- sphere, and with France with the United States, two of the greatest governments in the world. When the nations of the world that give importance to silver have a commercial influence as great as those nations which give importance to gold, the commercial parity between the two metals will settle itself. England de- monetized silver in 1816, and yet there was a commer- cial parity maintained at rates fixed from that time to 1873. The United States, France and the Latin union had their mints all open to silver, and England, stop- ping the free coinage of silver, had no effect upon it.

46. SILVER AND GOLD.

So, if we begin, we begin strong enough to do it * The way to resume is to resume.'

" The way to remonetize is to throw our mints open and we have got it. We will have higher prices once more. Everybody can ixiake some money. There isn't that paralyzed and deadly feeling that comes with tbe destruction of prices and tlie hoarding of money. Now, suppose that the gold does still leave us and you want to stop it. You don't need it in settling with a foreign country. We demonstrated that during the war. because a man can go and buy it at whatever it will cost in order to pay it in settlement of liis balance of trade. Our trade with foreign nations is only 4 per cent, of our business, and our domestic business is 96 per cent, of all our business. Which do you want legislated in the interest of, the 96 per cent, or the 4 per cent. ?

" But suppose you keep the gold and have gold and silver both circulating among us. Gold doesn't circu- late now ; but suppose we wanted to keep them on a commercial parity and found that the conditions that I have described didn't do il, how would you do it? The first thing would be, how can we increase the demand for silver ?

" Well, it might be done two or three ways. In the first place we would send a commission or several com* missions to Germnny and say to those people, ' Here, we, the great United States, have begun the work of declaring emancipation for the human race from these burdens that are upon them, and we want to add our argument to the arguments of your able bimetallists here in Berlin ; we want you to come in with us/ Wouldn't it have some effect? Would it not

THE H AR VEY-LAUGHLIN DEBAT^ ' r r > -f?

have more e£Fect than to lay back like dogs in the manger as we are doing now? She could be per- suaded possibly, with the influence of her other biniet- allists, so that we could go on in that missionary work, launched on a gigantic scale as it would be, until we had back ail of the governments of the world where we were prior to 1873, except England. We don't want her at all. You are not going to get her either. I would just as soon go to England, to the men who mold legislation in England, and ask them to give us bimetallism as I would to go to the rankest gold-bug in Wall street as ask him to go down and persuade Mr. Cleveland to turn over to us.

" Why? Man is moved by selfish motive, unless he has freed himself from those base instincts, and large money makers, who have long since gotten more than they needed in this world, and are still piling up more for the purpose of saying that ^ I am the richest man in the world,' or that * I am richer than my neighbor, and so my wife can say that she is richer than Mrs. Smith/ When you strike a man like that, and that is the kind of man you strike when you go to England, who control legislation there, there is a selfish motive for their ncionometallism, and it is because they are the creditor nation of the world.

" All the world owes them money, and what is the use of commerce ? It is the exchange of property ; property for property, property for money, and money for property, and England can exchange her gold that you owe her, and all the world owes her, for twice as much of your property as she could if we had bimet- allism. In round numbers, there are so many silver dollars in the world as gold dollars. The statistics will

48 BILVEB AKD QOLD.

show you that there is a very slight difference, an equal amouut of each, dollar for dollar, free coinage prices ; and when you add silver to gold as primary money prices advance, and England's gold would then have its value taken out of it, and it would have to pay twice as much for our property. Now, that is the reason she don't want to do it.

*^ If an undue and unrighteous influence by schemers and tricksters abnormally enhance the value of gold so that a commercial parity at 16 to 1 cannnot be maintained, then do as our forefathers did— change the ratio and make the change in the weight and size of the gold coins. Monroe and Jackson, did it. They were not called dishonest for doing so. They were legislating in the interest of the people, and not in the interest of the favored few. We are not compelled to keep the legal ratio at 16 to 1 ; we can change it to 20 to 1 if necessary to fix the legal ratio to correspond with the commercial r^tio, but if the change is made let us make it in the rich man's money and not in the poor man's money. . To lessen the size of the gold coins makes more dollars. To increase the size of the silver coins makes less dollars.

'^ Let us have more dollars rather than less dollars. A parity at the same ratio is practicable, as admitted by the experience of ages. This is what we ask.

^* This is a question of capital on one side and hu- manity on the other. Of sound money — the sound of the clod of^ the coffin — on one side, and sound money — ^the sound that has the honest ring of the people's money in it — on the other side. It is a question of an English policy or an Amercian policy. Which shall it be?

THE HABVEY-LAUGULIN DEBATE. 49

PROFESSOR LAUGHLINS ARGUMENT.

When Mr. Harvey had finished, the moderator in a few words presented Professor Laughlin as the advo- cate of the negative of the question. The teacher of political economy said :

^^I supposed, gentlemen, that we should discuss here to-night the question whether the United States should adopt the free coinage of silver at the ratio of 16 to 1, independently of other countries. I have not heard to- night any argument directed to that point. An attempt has been made to lead the discussion far off on the question of what the unit was from 1793 to 1873, but, to borrow an expression from our friend Tom Reed, *that fly was embalmed in the rhetoric of Judge Vin- . cent.' It is not necessary for us to go into that ques- tion.

" The persistence with which that point is referred to reminds me of the backwoodsman who pointed out the bear to his friend — the bear being up the tree — and aimed his gun at it. And the other fellow could not see the bear, and his friend was pointing at it and say- ing, * don't you se^it?' And it finally became neces- sary jto do something and he said again, ^ Why, don't you see it? * His friend said, * Why, no.' And then he went over to his friend who thought he saw a bear, and it was a flee on his eyebrow.

'^ I should like for a moment or two to free ourselves from the obscuration of that mighty animal directly before our eyes, and get at some of the especial points of the question. Before commencing on those subjects, I should like to speak briefly of three or four points in correction of the argument of the gentleman preceding.

60 SILVER AND GOLD.

" He spoke of the fact that there was greater trade with Europe during the times when there was a freer coinage of gold and silver than since 1878. I have turned to the statistical abstract of the United States for 1894, and find that in 1872 the gross sum of both exports and imports of the United States was $1,164,- 000,000; .in 1894, $1,547,000,000. Certainly that statement is not accurate. Also the statement was made that we paid for our foreign goods by constant drain on our resources of gold.

" I happen to have here at my hand a chart, which possibly you can see, which shows a comparison of the ratio, representing in the green squares the total amount of exports and imports in our foreign trade from 1850 to the present time, and the ytellow square indicates the relative amount of gold and silver both that passed out and in to settle all those balances. That, gentlemen, is the way in which the payment for our goods is made in foreign trades — not by the shipment of money, ex- cept in small sums, at particular times.

" Another point I should like to call attention to, which has occurred before,is in reference to the fact that the Bland act of 1878 and the Sherman act were sup- posed to require certain obligations in securities to be paid in coin. What seems to be that statement in the act of 1878 is that silver dollars shall be a legal tender for all debts, public and private, except where other- wise expressly stipulated in the contract. It is possi- ble that people who demand the free coinage in the ratio of 16 to 1 would naturally prevent you or any other business man in this city from making an express stipulation for gold or any other article. It seems al- S most inconceivable to one that the law of 1878 would

TUE HARVEY-LAUGHLIN DEBATE. 61

bear any such interpretation, and that is the only quo- tation that could possibly be so construed.

*^It seems to me unnecessary to go further on this question, except to point out here one thing more be- fore I begin — that we are supposed to be people who maintained gold and silver at a parity previous to 1873, and that this was done by the free coinage of both gold and silver. Reference has been made to France. Now, we know that in 1803 the French law established silver as the unit of measure. It was supposed that tliey had concurrent circulation of both gold and silver in France from 1803 down to the time of the discovery of gold in 1860. That is absolutely untrue.

" I quote from an oflScial docuiucnt issued by the French government in 1872 on page 662, in volume 2. This document says that in 1808 the circulation in France was only about 8,000,000 of gold— that is francs— and 2,000,000 of silver. In 1838 the whole of the French circulation did not include over 6 per cent, out of the total circulation of 40,000,000 — that is, that silver had driven out gold, because they were not at a parity.

^^ Again, the same document says that since the law of 1803 France has had no gold monetary circulation during the period before 1850. Up to that time silver was our sole monetary circulation, but after the gold discoveries of California and Australia gold took the place of silver in the general monetary circulation of the country. You will find that in volume 2 page 82, of the same oiBcial document.

"Again, ypu will find in a report issued by the min- ister of finance in 1869 that France had had one-third of its circulation in gold. In 1843 almost all this gold bad

52 SILVBB AND GOLD.

disappeared. Out of 53,000,000 francs then possessed by the bank only 1,000,000 francs was gold. This metal had disappeared from 1803 to 1848 because it had enjoyed a premium which reached at that time 1| per cent.

^^ And so I have twenty references of the same kind to show that not in France was there a concurrent cir- culation of gold and silver, for the reason that the two

4

were not kept at parity ; that every student of our own monetary system knows perfectly well was true of the United States. We had silver only in circulation up to 1834 and shortly after 1834, when the ratio was

1 to 16.19. So gold drove out silver, and we had only gold in circulation, and nobody in this audience ever saw a silver dollar in circulation after about the year 1840, and up to 1873 no silver dollars were in cir- culation, and consequently when the act of 1873 was passed there was not any silver, and had not been since 1840, in circulation, and at the time the act of 1873 was passed there was not even any gold or silver in cir- culation.

" But I would like now to pass, if you please, to the main points. I would like to discuss, in connection with the principal topic of the evening, money as a measure of value, or as redemption money is like a common denominator, to which other things are re- ferred for comparison.

" In order to compare goods with money, there is no more need of as many pieces of money as there are ar* tides to be compared than there is of having a quart cup for every quart of milk in existence or having a yard stick in a dry goods, store for every yard on the shelf. The idea that to multiply the measurements of

THE HABVEY-LAUGHLIN DEBATE. 58

value is necessary is absurd, but it is of the foremost importance that the measure of values should not be' tan)pered with, and should not be changed by legislation to the damage of all transactions based upon it.

" Right here is the whole secret of the opposition to silver as money. Silver has lost its stability of value. It is no better than any ordinary metal for stability. The action of India sends it down 20 per cent. The mere rumor of the Chinese indemnity sends it up 10 per cent.

" The more money there is roaming about in circula tion is no reason why anyone gets more of it. Money, like property, is parted with for a consideration. No matter how many more coins there are coming from the mint under free coinage and going into the vaults of the banks through the credit of the mine owners who own the bullion, there are no more coins in the pockets of Weary Waggles, who is cooling his heels on the sidewalk outside the bank. The increased number of Iiandsome hoi*ses and carriages on Michigan avenue does not imply that I can get them if I have not the money to purchase them with. I must produce work, turn out goods and labor. I must get gold or silver or something to the value of the goods, and in that way I will get them, and in no other way.

" There is no way of getting rich by short cuts, or by legislation, or by merely increasing the means of ex- changing goods, when goods themselves are the princi- pal thing.

" Money is only the machine by which goods are ex- changed against one another. No matter how valu- able, it is not wanted for itself. It is only a means to an end, like a bridge over a river. Do you suppose that

64 SILV2R AND GOLD.

the farmers of this country really believe that wiA each ton of silver taken out of the mines by tlie silver lawmakers in the senate that there are created bushels of wheat and bushels of corn and barrels of mess pork. The silver belongs to the mine owners. How will it get into our pockets or the pockets of anyone else ? Do we insult anyone's penetration by supposing that the congressional kings are going coaching about the country distributing their money for nothing,

"Our farmers are no fools. They know they can get more money by producing more commodities to be exchanged for it, and for those commodities they want as good money as any other men in the country have got.

" I want to call your attention to the fact that goods in these days after being expressed in the common de- nominators of value are exciianged practically without the use of money. I will explain that very briefly, be- cause the facts must be familiar to ever}' business man in the City of Chicago. A sells a car load of wheat and draws a bill on the Cliicago purchaser for the same. A discounts this bill and has a credit in his deposit ac- count in a bank representing his wheat expressed in terms of money. But another person, B, may have sold to A woolen goods for the same amount. B draws on A for the sum and B also gets a credit to his bank account through the banks ; then these two bits of paper meet and offset each other — that is the wheat and woolen goods expressed in the common denominator of value are exchanged against each other by a medium of exchange known as deposit currency.

" If you will permit me I will point to that chart on the other side of the room which represents tha relative

BENBY M. TELUili.

V C, . . •■■■

THE HAEVEY-LAUGHLIN DEBATE. 57

amount of that kind of currency in the United States as compared to the other kind. I refer Id that large gray square at the right, which represents the total amount of credit deposits in the banks. Now, what does it do ? Why, it does the work which we know exactly in quantitive form is performed by the clear- ings of the United States. That function, or that kind of money, the most welcome of all our kinds of money, amounts at the present time to $2,963,000,000 in our deposit accounts.

** But what work does it do ? " I( Joes the work of our clearing houses. You can verify those figures any week if you wish td know the way in which transac- tions are actually performed, goods actually exchanged without the use of money to the amount of $60,000,« 000,000 a year. And when you contrast the size of that with the square representing our gold, our silver certificates, our national bank notes and our greenbacks and subsidiary currency, which are the other blocks on the same sheet, you can see what an immense influ- ence that has on our business.

^* It is not necessary for me to expand further on that point because those are commercial facts apparent to any business man in the union. I can only say that from 92 to 95 per cent, of all our transactions are per- formed in this way, practically without the use of money, and that under recent investigations by the comptroller of the currency about 54 per cent, are per- formed in the same way. But it will be said by some one: "This vast system of credit" — but it is not credit, it is a system of exchange — but they would say: **This vast system of credit must be liquidated iu actual coin or money." And so our business s^sten;!

4

58 SILV£B AND GOLD.

rests like an inverted pyramid upon the apex of the small reserve of coin. Now, how true is that ?

** If I have explored rightly, and I took but a very short time to refer to that matter, it would seem to me that is just the means by which goods expressed in the term of the common measure of value are exchanged against each other without the intervention of money, and by this means, which is independent of the passing of coin from hand to hand. These transactions ex- pressed in terms of money are not based upon coin, but upon goods that are bought and sold.

"No business man waits until checks and money have reached such a volume before he thinks that the medium is suflBciently large for the needs of trade, be- fore he sells his car load of wheat or his bushel of corn or woolen goods. He first sells his grain and cotton and draws a check or bill afterward. The deposit cur- rency I have spoken of is the consequence and result of the transactions. This system I have been describ- ing is as broad as the transactions. It is ultimately re- solved into goods and based on goods.

" It is not true, therefore, that this system I have been describing is unstable like an inverted pyramid. The transactions are the reason for the existence of the checks and deposits. The checks and the deposits are not the reason for the existence of the transactions. To talk then about redemption money being scarce or being cut off by the act of 1873 is about as futUe as talking about hearses being scarce because there is not a hearse to every man. If people die rapidly the hearses do not stand so long in the undertaker's yard. If many transactions take place the money becomes nimble and a little goes a long way. One hearse may

THE HABVEY-LAUGHLIN DEBATE. 69

bury many people, one at a time, and so a little money will exchange a great many goods, but you say, there must be money enough to liquidate every transaction necessary, and you point to a panic, and when there is a money famii^e. You point to when there is a money panic, that is i^^ say, when properties and securities are thrown on tb^ market at once to be sold to get the legal means oT paying obligations.

'* Very truo« but in ordinary times all goods are not at once offered any more than all people are dying at once. Wheii a cholera epidemic comes people die, and dio rapidly, nnd hearses are in exceptional demand, like money in a panic. But note this : Even if every corpse is no^ lucky enough to be carried in a hearse it yet can be buried some way or other. It may not be so stylishf kut it gets there all the same. It may go to its grave in a cart or an express wagon. So the goods aiid mouay, if they cannot all be exchanged in cur- rency for coin, they may yet be exchanged by other means, by clearing-house certificates, or, last of all, even bj barter. All goods are not offered for exchange at once any more than a million men crossing a bridge are all on the bridge at the same time. A million men can all cross a bridge comfortably 100 at a time, but if they all cross at once there is a panic and some one is hurt.

*' Now, I want to suggest in connection with the act of 1878 and with the general question very briefly one or two facts. Prices since 1873 have not fallen be- cause of any lack of money, and I think I have shown you on general principles there has been no reason why there should be an increasing amount of money, and 1 iutend to show you now by facts that prices have not

60 SILVER AND GOLD.

fallen since 1873 because of any lack in the quantity of money.

" I have prepared on that chart the facts showing the most extensive movement of prices, the most ex- haustive study of prices ever made in this country or

«

any other. If the gentlemen can see across the room you will find that there is a straight black line crossing the middle chart and that that represents the figure 100, or the basis from which the figures move. Now, there is a line that starts from the beginning there in 1860 representing the movements of 223 articles quoted solely in the American market. That line rises up as you see it. It is marked ' C* It rises up from that base line to 1865 and then it starts downward. It moves down and in 1879 strikes the base line again, so that the movement of prices shows that in 1879 we were exactly on the same level to prices before the civil war. Then the line moves slightly above the base line, showing that prices were higher than 1860. Then it drops a little under again to the figure 'C,' just un- der the line, and, compared with 1860, the prices of 223 articles averaged together in the American mar- kets showed a decrease as compared with 1860.

" Now, let us compare with that the circulation. There is a line marked * D * across it. Soon after the civil war it moved a little above the line, and then in 1879 the circulation of the United States advanced rapidly and moves to the right. There was a greater demand put upon the money with the increasing circu- lation, but I point to the chart to show you what the transactions were which you would appeal to as show- mg how much trade had increased. That might indi- cate the amount of demand put upon the circulation

THE HABVET-LAUGHUK DEBATE. 61

of the country. That line np there in red is the line of the coloring which I just explained to you was the amount of transactions in the United States practicalljr without the use of money, consequently the very thing that you will refer to as indicating an increased de- mand upon money is the very thing which explains just to what extent we have economized the use ol money.

** Lastly on that chart there is a dotted line and red, which begins some distance from the base line. That represents the value of silver compared with gold. It travels along the '70s about the same ratio, 15^ to 1. Then it goes down and up. In 1879 it was just cross* ing the line of circulation at ' D.' It keeps on pretty steadily until after 1885, and then it drops below the line, then rises, and now it is again down ; you can just see it faintly at the lower edge of the chart, like a star in the winter just passing over the horizon. That is a significant story. That shows the relation of silver to gold, while the line ^ C ' indicates the relation of all the commodities in the United States to gold.

" Now I ask you whether there is any parallel show ing of silver relative to gold and commodities relative to gold ? The price of commodities is 8 per cent, be* low what it was in 1860. Silver is 60 per cent, below. Isn't it perfectly clear then, gentlemen, that silver did not have the same purchasing power in 1894 as it had in 1878 ?

" There is absolutely no correspondence. The pur- chasing price of silver is infinitely below the price of the purchasing power which it had in 1878. Therefore, it is not to day, in 1894, a just means of paying debts. But more than that, why should there have been any

62 8ILVEB AND GOLD.

change in prices in the United States after 1873? There was no more gold in circulation than in 1873, yet, May 1, 1895, there was gold in circulation in the United States $568,000,000, and silver $524,000,000, making a total of $1,092,000,000. More redemption money has been coined by the mint by $1,092,000,000 and yet prices fall. That is due, without the shadow of a doubt to any investigator, to. the cheapened cost of production.

" Moreover, if it be associated with a fall of prices since 1873, with the demonetization of silver, I point to the fact that there is more silver in circulation in the very countries concerned to-day than in 1878. Germany has still 110,000,000 thalers of her old silver and the five franc pieces of France are more in circu- lation than in 1873, and they are all legal tender.

" The United States, after the Latin union ceased to coin silver in 1878, tried this experiment, and now the United States has added to the circulation of the world something over $600,000,000. That is, there is more to- day, in 1896, than there was in 1873. Therefore, why the use of talking about the fall of prices having been due to the subtraction of the money of the woild when there is more silver in circulation and more gold in circulation by hundreds of millions.

" Moreover, it may be said that commodities had fallen because of the subtraction of silver from the cir- culation. In 1873, compared with earlier years, the ex- ertion of the average laborer had risen 8 per cent. The laborer to-day commands more gold than he ever coaa- manded in the industrial history of the world. Not only have wages risen all this time, but because of this great cheapening in the cost of production of commod-

THE HABVEY-LAUGHLIK DEBATE. 63

ities, which has caased the falling of the prices of commodities in general, wages have risen in money, in gold, and his purchasing power has increased double. Not only has money risen but commodities have fallen. The laborer has got double since 1873. For heaven's sake let us have more of 1873 for the laborer.

^' This persistence in saying that the fall of prices is due to silver is like the story of the grandmother, who said there was something good in everything, and the daughter said : ' I really believe you would say some- thing good about the prince of evil.' * Well, my dear, I am sure we must all admit he has great persever- ance.'

" Now the free coinage of silver at 16 to 1 — ^let us get the record to the point ; when the market ratio was about 32 to 34 — ^it skipped about so much you can't be really certain. It has been 34 to 1 ; somewhere between 32 and 34 now. If the market ratio be that in the mint ratio you propose 16 to 1 there is a premium of sixteen ounces of silver profit on withdrawing every ounce of gold in circulation. Free coinage of silver at 16 to 1 means single silver monometallism i 16 to 1 is a single silver standard, and, in the language of my opponent, we will start with all the South American countries and Mexico. Free coinage of silver, then, is absolutely certain to drive all gold out of circulation. The mere hint of it did that in the panic of 1893. May 1, 1895, the first of this month, there were $568,000,000 of gold in circulation. Since gold must be inevitably driven out if free coinage of silver is had, there will be no in- erease in the quantity of money.

" If the people who support free coinage hope to in- Qrease the quantity of money it is perfectly evident oj;

64 8ILVEB AND GOLD.

the face of it that it will contract the currency by the total amount of $568,000,000. It could not change prices, therefore, by increasing the amount of the me- dium of the exchange. That is plain. • The only way it would act would be to increase the price of every* thing because reckoned in a cheaper medium than that of gold. This my friend admitted this evening.

" If prices would rise we would have a glow of satis- faction. It is the kind of glow of satisfaction which comes to the inebriate after he has been supplied with drink after he has been thirsty a long while. For ex« ample, take a pair of gloves worth 100 cents in gold. It would exchange for about 210 cents in silver. A dozen of eggs now selling at 15 cents would sell for about 80 cents, and everything we buy would rise in proportion, since the intrinsic value of the pure dollar is worth but 51 cents.

" As free coinage of silver would inevitably result in a rise of prices it would immediately result in the fall of wages. Its first effect would be to diminish the pur- chase power of all our wages. The man who gets $500 or $1,000 a year as a fixed rate of wages or salary will find he can buy just half as much as now. Yes, but some one said the employer will raise his wages. Now, will he ? The facts on that are clear and indisputable. It has been one of the undisputed facts of history that when prices rise the wages of labor are the last to advance, and when prices fall the wages of labor are the first to decline. Free coinage of silver would make all the articles of the laborer's consumption cost him 100 per cent, more unless he can get a rise in his wages by dint of strike and quarrels and all the consequent dis- Mtisfaction arising from friction between the employer

THE HAEVEY-LAUGHLlN DEBATE. 65

and employee. He would be able to buy only half as many articles of consumption as he had before.

^*In short, a rise of prices necessarily results in a diminution of the enjoyments of the laboring class un- til they can force the employers through a long process of agitation -to make an increase in their wages. Are we willing to sacrifice the interests of the laboring class to the demands of certain owners of silver mines who hoodwink people with the cry of more money ?

^* This is a very distinct and serious damage. The damage runs in other directions, however. But the proposition to adopt a depreciated standard of value is simply an attempt to transfer from the great mass of the community, who have been provident, industrious and successful, a portion of their savings and gains into the pockets of those who have been idle, extravagant or unfortunate. The provision which has been made for old age, for sickness, for death, for widows and or- phans or by insurance will be depreciated in the same ratio.

" No invasion of hostile armies burning and destroy- ing as they advance could by any possibility equal the desolation and ruin which would thus be forced upon the great mass of the American people. Such a deso- lation, moreover, does not fall alike upon the shrewd and unsophisticated. The shrewd ones, the bankers and the like, will be easily able to take care of them- selves, while we plain people will be ■ robbed of our hard earnings without any hope of compensation.

" Moreover, free coinage of silver would injure those who wish to borrow. I should like to -touch upon the question of debtor and indebtedness. The justice of to-day permitting mortgages and obligations to be paid

66 SILYBB AND GOLD.

off in money 50 per cent. less than that in which they were contracted shows its own dishonesty on its face without further remark. When you think that since 1873 there has been only this standard, their offer to pay them in a money worth half of the present value is simply repudiation and dishonesty.

'^ Let me explain that. If I have attempted to save painfully $1,000 by many years of sacrifice, and loan it to B on a mortgage, then if B urges legislation by Which he can pay me back in a cheaper money, worth one-half of what he got from me, do you suppose I would ever lend to B again or renew my mortgage? If I had pinched and saved, gone without a new overcoat or used a shabby parlor carpet in order to save some* thing and invest it for my child, and if then I gave it over to B, who has the spending of it, is it not fair and square that I should have back again what I gave him ? If B spent it and enjoyed it he is not thereby absolved from paying it back.

"I appeal to the sense of fair-mindness in every American in this land. No trick or sophistry can make the scaling of this debt to me anything but dishon- esty and cheating. Any state that enacts laws whereby debts can be scaled signs its own commercial doom. Cheating is a bad business policy for man and state. I say that the passage of the bill, free coinage of silver at 16 to 1, would injure the borrower.

" The savings banks of the United States in the years 1893 and 1894 had deposits from 4,777,000 de- positors, with a total amount deposited of $1,748,- 000,000, or an average to each depositor of $865.86. Pass a free coinage measure, 16 to 1, and you hurt the purchasing power of the deposits of the small

• / THB HAByBT-LAUGHLIN DEBATSV- ^ . 67

savings in this country, affecting nearly 5,000,000 of people. . '^ The building and loan associations in this country are indebted to their members to the amount of $450,- 000,000. Pass a free coinage measure and you scale that indebtedness one-half, and whom do you touch ? The life insurance outstanding Dec. 31, 1889, was $618,- 000,000. Scale that indebtedness one -half and leave a desolate widow or the children with one-half, and in recent years, too, under the present standard.

** Take the pensions to nearly the amount of $140,* 000,000 that are paid annually. Pass a free coinage measure and reduce those. You would thus affect 11,- 000,000 of persons. The case that I have described, therefore, is not a limited or special one.

" The bonded debt of the railways in the United States is about $6,000,000,000. If free coinage of sil- ver were introduced it would enable these railways to pay off their debts with what is now equivalent to about $3,000,000,000. They would thus be relieved of the necessity of paying the small investors who have taken their bonds one-half of what these corporations now owe them, and it is only a few of such corpora- tions and railways that have outstanding indebtedness that has run a long time, and which could have been paid before the period of 1873.

" The Slierman act of July 4, 1890, unless it had been repealed, would have brought us to the silver standard as it was. The mere suspicion of it struck a blow at our measure of value, brought on a panic, made prices uncertain and caused doubts as to future plans in every factory and shop in the land. Those who have silver mines, and who can, by their wealth, coo*

08 8ILVBB AKD GOLD.

trol political parties aud legislatures, wlio make the very seat of our national government their prided of- fices and actually turn the national senate into a bureau for bullying the prices of their product, to those men we say beware.

" Those of us who belong to the rank of plain citi- zens, who are thinking only of the countrj'^ as a whole, who believe in honesty and intelligence, hold that when a question of right or wrong is presented in a campaign of education the people will decide for right and for justice. We cannot believe that a special interest led by millionaires can go on unchecked in their plan of sacrificing the taxpayers in order to heap up riches, especially when this is done on the most fallacious of economic grounds — grounds which have been proved wrong by the experience of every country of modern times. How long will it take to convince every man in the land that conditions of prosperity are those in which the honest men can best meet and pay his obligations.

** Unless the debtor can get employment or find a market for his goods, how can he pay interest or prin- cipal ? Now, if tampering with the standard in terms of which all transactions are drawn, all contracts made, all goods bought and sold, brings industrial paralysis, because no one knows what will happen ten days hence, and no one will go on making goods for a changing market, it is to the interest of every laborer, every debtor, every honest man, is it not, to keep and main- tain the value of the standard so far as that may be done?

" The debtor will be no better off by free coinage even if we had it, which we never will. Every lender

THE HABVET-LAUGHLIN DEBATE. 69

would insert the gold clause in the contract on our present basis of contracts and prices. The very hint of possibility of a change to a depreciated single standard would precipitate a panic just as it did in 1893, and when the gentleman who spoke before me charged me with being certain to engage in special pleadings I ask him to consider the condition of the country to-day, what it is to-day with the great iron industries of Penn- sylvania keeping up prices since there has been a steady recovery of industry from the very moment when Mr. Cleveland put his foot down and said, ' We should and shall maintain our standard of value inviolate.' j

^*Is it true, that, even laying aside all honor and justice, resorting to a single silver standard depreciated 48 per cent., the debtor will sell his goods at 100 per cent, more, and the more easily pay off his debts ? By no means. That is the most superficial of all ideas. Trickery is always sure to injure those who resort to it. And I do not myself feel it necessary to do any more than appeal to the selfish motives of the American peo- pie. I for one am ready to appeal to that integrity, that sense of honor, and that uprightness in the American people, which, whenever it has been appealed to, has de- cided rightly upon these great questions of justice.

*^In conclusion, gentlemen, extraordinary as is the proposal for free coinage, it is in truth only a huge de- ceit. It was born in the private offices of the silver kings, nursed at the hands of the speculators, clothed in economic error, fed on boodle, exercised in the lobby of congress, and as sure as there is honesty and truth in the American heart it will die young and be buried in the same ignominious grave wherein lies the now for- gotten infant once famous as the rag baby.

70 SILVEB AND GOLD.

*' Free coinage is greenbackism galvanized into life. That heresy in its old form of a demand for more money has already been laid low. It will not long deceive us in its new form of a demand for more silver, for silver fiatism, nor in any other respect in what it presumes to be. It is not a predecessor for bimetallism. It is a wild leap in the dark for silver monometallism. Under the cry for more money are veiled the plans of a giant syndicate of mine owners and speculators, who have hoodwinked the people in certain parts of the country and who are still deluding them with a specious argument for more money, and are laughing in their sleeves at a constituency so easily gulled.*

REJOINDERS OF CONTESTANTS.

The applause following Professor Laughlin^s ad- dress having subsided the chairman announced that Mr. Harvey would be given fifteen minutes for rejoin- der to bis opponent. Promising to cover in that tmie all the ground Professor Laughlin had gone over Mr. Harvey said :

"He says that exports in 1872 were $1,100,000,000, and in 1894 $1,500,000,000 as an argument that be- fore gold and silver came back we were running on paper money. I would only say that the population has increased faster than the increase as shown by those figures. He says both the gold and silver ex- ports and imports during the years from 1860 to 1870 were paid for in gold and silver, as an evidence that gold and silver were international money. Now, we did not have gold and silver as money then, and yet it

THB HABYET-LAUGHUN DBBATE. 71

was ased in the settlement of balances. But as what? Not as money, but as merchandise, and it is so used to- day— not as coined money, but as merchandise. We had paper for money and they had gold and silver, and yet it was used as merchandise then as it is used now. And if all the gold went out of circulation with us and we had silver or paper temporarily we could buy the world's merchandise now as we did then and as we did all the time.

*^ He says that the clause *in the Bland-Allison act that stipulates that silver is legal tender money except where otherwise provided in the contract is just and proper. Now, gentlemen, that clause meant this, ex- cept where otherwise provided in the contract we will provide for gold. Now, you silver men shoot your guns. You silver men can pass any law you want, we have got you sewed up in a contract which called directly for gold. Never before in the history of the world, nowhere in the records of the United States, can you find where we enacted any law authorizing a creditor to take a note discriminating between our legal tender money.

'* It is statutory treason to disrupt and discredit our money, and a statute which permits it — which was the Bland- Allison act — is the first of the kind in the stat- utes of the United States, and it did just what it was intended to do — fasten a gold standard, by putting it in the contract. Such a thing was never done before, and is unjust, if monometallism is unjust.

" He says silver drove out gold in France. Silver also drove out gold in this country, he says, for the first fifty years of the century, and then gold drove out silver. Now that is just what we want the business men of

72 SILVER AND GOLD.

Chicago to understand. That is bimetallism ; bimetal- lism, which makes either gold or silver primary money, because when one metal gives out and gets dearer or be- comes scarce the other comes in. How can silver come in now. There is no such law authorizing it to be primary money or redemption money. It cannot come in now. Gold has got the crack to itself, but under bimetallism for centuries, as long as we have statistical record of it, when one metal came in and drove the other out, it was because it was cheaper by a small percent- age, which drove it partially out or for a short time. Or it drove it substantially all out, and tlien came the other, but it was the very fact that either metal an- swered for use as money and that if one was not enough or if the business of the country would have its back broken by reason of insisting on one metal — there was the other to take its place, and that is what bimetallism means.

*'Now, it does not mean when one of the metals goes out of circulation temporarily that is not a measure of value, because it is a measure of value. This question is world-wide in the sense of commercial parity. If silver left us in 1873, because it was at 2 per cent, premium over gold, at 16 to 1, why was it ? Because there was a market in Europe ; the mines in France were open to it at the ratio of 15j^ to 1, and it went there, and took the place of so much gold, which came back to us, but it is not so now. Silver, when it leaves us, does not take the place of money, because silver i? demonetized. With both the metals remonetized, one of the metals going out of use, and leaving us, we have still a measure of value, because it is holding up the measures of values for the world. It is holding up

JOSEPH N. DOLPH,

THE HABVEY-LAUGHLIN DEBATE. 75

the value of wheat in LoDdon, where it makes them pay f 1.30 for Indian wheat, and makes them pay us $1.30 for our wheat. Gold and silver alternately are the strength of bimetallism, and it is not this one or the other one used as a measure of value when both are conjointly repudiated before the law.

" ' No silver in circulation from 1860 to 1873/ he says. Now, silver was in circulation at that time. I know it as a fact. I was a boy 10 years old in 1861, 9 years old in 1860 and I know silver was in circulation. There, are instances in my life that implanted it on my mind that makes me know that, and you know it, if you were living at that time.

"He says the measure of value should not be tampered with. I agree with him. The measure of value from 1792, also during the continental days and up to 1873, were gold and silver, and it should not have been tampered with. You people are tampering with the measure of values. You tampered with it in 1873, and the gold standard is an experiment. Show me, in the history of the world, where it ever existed before, except since 1873, and except since 1816 in England only. The ages have had bimetallism at a legal ratio between gold and silver, and monometal- lism, the gold standard, was attempted to be fastened upon the world by the simultaneous action of the finan- ciers of the world, beginning with 1873.

" He says that silver now bobs up and down. Of course it bobs up and down now. It did not bob up and down before 1873. Professor, take the table of ratios — comparative ratios between gold and silver— r for 200 years in the book before you, and you will find they stayed together for those 200 years, and that silver 6

76 SILVER AND GOLD.

did not bob up and down, except the slight difference of exchange in the different countries and the slight difference in ratio between France and the United States. It did not bob up and down. We wait you to give them equal rights before the law, and then sil- ver will not bob up and down. Of course it bobs up and down now, and the monometallists are the cause of it — the act of 1873 is the cause of it. You say people should work and turn out property, and they will get their money. They are working, but they can't get the money. They produce the property, aud find the property costs them what they get for it ; that they get what it costs them to produce.

^' The farmer finds himself in the same fix, and that is why he can't pay his mortgages. Mortgages are in- creasing. Would they increase, as they are now, like a cloud threatening the prosperity of the country, if it were true that such industry as the American citizens can display would produce property that they could not go and get money with ? The trouble is, when they have produced the property, you have destroyed the price.

" The professor tells a good story. I have heard him tell the same story before. Now, I want to tell a story. It is true that if there is a bridge across the stream and everybody wants to go over it at the same time, there is a busy day such as we would like to see in this country again, and they could not get over the bridge at the same time. If there were two bridges, professor, they could get over. Also, if they should charge too much toll over one bridge we might get over the other bridge cheaper.

^^ He says silver is the property of the bullion owner

THE HABVBY-LAUGHLIN DEBATE. 77

only. Whose property is gold ? No matter who owns it ; whether it is owned by the citizens of Illinois or owned by the citizens of Colorado. It is a question of wisdom and intelligence as to what property, if we are going to have property money, is best to be coined into money, and when that question is intelligently settled no special argument and no criticism can be made upon it by pointing to American citizens as owning it. If they owned our silver in England, and England had her hand in the Rocky Mountains, we would not hear of who owns the silver. It is a lack of Americanism in not standing up for our own product that I object to, when the intelligence of centuries has determined that silver is a proper metal for use as money.

" He says goods are exchanged practically without money. He ought to go down to Washington and tell Mr. Cleveland how to do without money. He says business is done without the use of money. Well, if he can drive these gold standard fellows to the position of the fiatists, why, we may reason with them. If business can be done without money then there is no reason why we should discuss the question of redemption money at all. He says a man buys goods on one day, using the money to get other property on the same day, and that it is the exchange of property.

" The country merchant comes to Chicago and buys goods, and in the course of sixty or ninety days he pays for them, and has his goods on his shelf for a year. He must carry them with money ; he must have money to pay for them. '*

" The only appropriate illustration that the professoi used were such words as * hearses,' * brains,' etc. And

78 SILVER AND GOLD.

such reflections which are in sympathy with the posi- tion of the country.

" He is not an international bimetallist. He says prices have not fallen since 1873.

Professor Laughlin — I didn't say that. I said that prices had not fallen since 1873 because of lack of money.

Mr. Harvey — Well, that is too tough for me. He says prices have not fallen since 1873 for lack of money. Why have they fallen ? Is not property measured in money when everything else is equal? I don't think be told us why property had fallen. He points to a map on the wall representing the amount of clearances in a day going through the clearing-house. I thought he was going on with the illustration of the map and point out the gold in the country that it all rested upon, but he didn't do so, and I don't understand the object of the illustration. But the point we make, gentlemen, is that credit money and credits all are piled upon redemp- tion or primary money. When you run Knder such a standard as that it is a part of the statutory law of this country, it is regulating us with reference to our finances, and which we are reminded of, as to what that standard is, every time we look at one of our gold notes, our gold mortgages, etc.; and when you pile up all those methods and transactions of the nation upon a primary money you must consider the quantity and quality of that primary money, and that is the essential question and issue that is between us here to-night. My fifteen minutes are up. I will finish this next time."

"Professor Laughlin will now have fifteen minutes," said the chairman, aga^ii presenting that speaker, who said;

" With regard to the figures of exports and imports

THE EABVBY-LAtJGHLIN DEBATE. T8

from 1850 down to the present time, I gave the figures for the total exports and imports combined in the year 1872 as $1,164,000,000, and in 1894 as $1,547,000,000, because the gentleman had stated that there had been a greater trade with Europe in the time when gold and silver had free coinage, and I used the year 1872 to show that there was a certain amount of trade, $1,164,- 000,000, and that to-day we had a greater trade, and that we do not have free coinage of silver.

"The gentleman referred to a most extraordinary proposition, which struck me at the time as so incon- ceivable that I thought I must be mistaken. It was in regard to the act of 1878. Now it happens that I was brought up in a lawyer's office, and I studied the old common law, and when he makes this statement that there never had existed anywhere in previous history any such statement as that a citizen of the United States was affected by such a statement as this in law, ^except where otherwise expressly stipulated in the contract,' ^ that citizens in the United States were not permitted to make a contract of any kind for the de- livery of a specific kind of goods,' I am amazed. I suppose it is one of the common law fundamentals, as old as any legal history. The statement, therefore, that a statement like that, recognizing the common law of the country, appeared in the act of 1878, merely as an expression, and never had been heard of before, is the most extraordinary exhibition of ignorance of the fundamental principle of law, as we understand it in this Anglo-Saxon age.

" Now, he made the statement in rebuttal concerning something I stated that the law of 1878 prevented silver from coming in and gaining its relative position again.

80 SILVER AND GOLD. .

If it would that alone would raise its value. Now, the fact is that before 1873 — the facts are indisputable — ^the relative market value of gold and silver so varied that they did not remain in circulation then. I challenge any student of economic or financial history to find an authenticated case of the concurrent circulation of gold and silver under a so-called bimetallic system for any length of time. I say that this is a fact indisputable — that it was either gold in circulation or it was silver in circulation.

" I have furnished here absolute, indisputable proof from the French financial documents to show that in France itself, where they attempted to establish what was supposed to be a bimetallic system, they did not have the concurrent circulation, the silver went out. They did not keep their parity. In 1860 the value of a silver dollar in gold was 104.58. The gentleman, then, must have been living in the plutocratic regions of those people who always paid about $1.04 when they need only have paid $1. Or he may have been keeper of a museum where they had those things on exhibition.

" The gentleman suggests that we have been tamper- ing with* the standard. Now, what do you mean by the standard? Why, the standard by which prices are estimated, by which transactions are made. Now, there was not any silver in circulation ; there was not any gold in circulation. The only standard we had been tampering with was the greenback. There was no change made, for there was no gold and silver in the country.

" Tampering with the standard is when we try to get that metal of the most unstable kind ; and right be-

THE HARVEY-LA UGHLIN DEBATB. 81

hind the gentleman is a chart representing the gira^ tions of silver when it really has a chance. In 1876^ irrespective of commodities or anything else, it changed its value 25 per cent. That is a pretty stand- ard. That is the kind of standard to tamper with. In 1890, under a stimulation connected very closely with the passage of the Sherman act of 1890, silver went up and then it came down again like a rocket.

" Now he spoke of my chart over there and sug- gested that silver was bobbing. Yet, it has been bob- bing, and has gone to the bottom, and it is like the old story of the man in the boat. When he dropped out of the boat he swore it was the boat that had gone up. He then says that we have spoiled the market because men, if they have produced goods, cannot sell, and in the next sentence he says a man sells for what it cost him to produce, and yet he says he cannot sell. Now, what is selling except getting what it cost to pro- duce?

*^ Then he speaks to the point of the bridge illus- tration. I could not expect to be understood, even on a second reading. The bridge illustration was simply meant to show that in a time of great panic or great ex- citement, when a great amount of work has got to be done in a small space, that disorder sometimes arises. It is perfectly clear that, with order and with a proper medium of exchange, it does not make any difference which of the two bridges a man goes over, but if he goes on to the second bridge and it is a shaky one, and it bobs up and down like that, he had better not get on it.

"He also added that it was very un-American to talk about gold. Now, we produce gold as well aa

82 SILVER AND GOLD.

silver, and he asks who owns the gold. I answer ex- actly the same in regard to the matter of silver. The bullion owners, the mine owners, own the gold bullion just as much as the silver mine owners own the silver bullion, and when you put it into the mint it does not get into your pocket and mine. I tell you there is an- other process entirely beyond all that. The mint does not create any unlimited demand for gold. The mint does not buy gold. It is simply, and nothing more, than it merely changes its form into a round disk and puts a stamp on it to indicate an authority, that it is a certain fineness and weight. That is all the mint does. It does not create any demand for gold, and gold mine owners own their gold just as the silver mine owners own their silver. And if it is un-American, I say, to say the truth, then I am an un-American.

" He objected to my funereal illustration. I suppose that he considered that if we were not going to have free coinage of silver that was quite too funereal a thing to think of, and I haven't any doubt if you will examine into my illustration very closely you will see a very much despised thing called a rag silver baby be- ing carried out.

" He lastly says that the fall of prices since 1878 has not been accounted for by me. I did not say that prices had not fallen since 1873, because I called your attention to the movement of prices of 223 articles in coin. Since 1860 they had fallen 8 per cent, and it gives me an opportunity to call attention to something which I did not have time to before, and that is that the fall of prices began in 1865. It was at the time when prices were highest and from 1864 and 1865 the movement was steadily down.

• THE HABVEY-LAUGHLIN DEBATB. 88

••Now, if they are going to talk about 1873, why don't they talk about 1875 ? They were both under a paper money period. The high prices were in 1865, and when resumption of specie payment took place Jan. 1, 1879, prices were exactly on the same level as they were in I860. But you start with silver in 1879, and compare its price with what prices were in 1879 after the resumption of specie payment, and you can see the difference and the change in the purchasing price of silver as compared with the money.

" Now, what was the cause of the fall in the values of the commodities ? It seems to me that before an audience of men engaged in industrial operations, men who know something about manufacturing, who know something about the way in which industrial improve- ments have been introduced into every factory, in every furnace, in every cotton and woolen mill in this country in the last ten or fifteen years, that the change produced in the cheaper cost of productions, in improvements and inventions in the last fifteen or twenty-five years is the striking marvel of this century. Many a man and owner of a mill I have heard say that it made him tired to keep up in this race of im- provements. The moment that he has his mills ad- justed somebody else had got something new and he had to change his mill and his men all over again.

" One man in the iron industry in Pittsburg wrote to me that since 1873 he could mention no less than 500 different inventions all united together to change the price of production of iron. You all know how the price has gone down How about the price of steel rails, which has gone down until steel is really no more valuable than iron was then ? I need not go

84 SILVER AND GOLD.

over this te a body of men who know the movements of commercial prices ; the reduction of prices from the change of cost has been phenomenal. It has been one of the most diflScult things of my life to understand why prices have not fallen more than 8 per cent, since 1860. The only possible excuse for it that I can see is the enormous production of gold. In 1893 the annual pro- duction of gold was larger than any time in the history of the world, over $155,000,000. And the directors of the mints show us that the reports of 1894 will show a still larger production of gold."

"Mr. Harvey will now have five minutes for the close of the discussion," said the chairman, announcing the author, who said :

•' Professor Laughlin refers again to the bridge story. I want to do the sam'fe thing. If one bridge is rickety ve use the other while we put the bad one in order. If we have only one and that is out of order, we have to wade or swim. That is the trouble now. We have only one bridge, and the administration and Mr. Cleve- land have hold of one end and the Rothschilds have the other and they have drawn our end away from us.

" Professor Laughlin refers to the purchase price of wages, etc. There is contention on between the labor unions of the country and the financial and other trusts of the country, and it is a deadly struggle, as we know, and one of the worst things of that struggle is the 4,000,000 of idle laborers in this country. In order to hold up the wages of the country it is produc- ing idle labor. It is better to all have v^ages and all have work and something to buy than it is to have wages forced up by unions and not enough people have work to dow That is our reply to that.

fBB BAftVlBT-LATiGHXIN DEBATB. «5

^"".enS That n: ,"• ^^1' ^« ^°« «^ *^« «P«-1 -

"Prnf T "■ P'^^'^y ^^" come to.

«fited brrl ?''"" '"^^ ^^^'^'^ '^^"^'J "«t be ben- Bays the /r'" '''"'" °^ '"'''' ^"'' '"'" ""' ^' oheatina c u"". *^^ ^^J''"^ *o benefit themselves by

follow tl.»f V"? ! '"''*'^ standard. Now, we cannot

ThTs w 1 ''^ ^*'^^°' ^« S«* '°«' '^ ^« '^«-" gathering 1h *°** °^ ''^^ arguments and tlie formal exDre«;^ became an informal one after the chairman's

Pressioa of tianks to the speakers.

S6 SILVEB AND GOLD.

CHAPTER II.

BY 8ENAT0B J. N. DOLPH OF OREGON.

It was in the summer of 1893 that President Cleve- land called an extra session of Congress, to secure the repeal of the purchasing clause of the Sherman act. In the discussions which followed this proposal, both in the Senate and in the House of Representatives, the leading economists in Congress took active part. Some of them have selected the speeches delivered on those occasions as the most satisfactory and careful interpre- tation of their views, and portions of them are there- fore included here.

Tuesday, August 8, when the Senate had under con- sideration the President's message. Senator J. N. Dolph of Oregon spoke in part as follows :

The President of the United States, moved thereto by the business depression and financial disturbances everywhere prevailing, and assuming that the present condition of the country is the result of the operation of the so-called Sherman law, has convened congress in extraordinary session and urged upon it in his mes- sage of to-day the immediate repeal of that law. Whether or not it would be wise under existing cir- cumstances to repeal this law, the claim or the assump- tion that it is the principal cause of the prevailing business and financial condition of the country should not be permitted to go unchallenged.

The present financial and industrial condition of

8ENATOB J. N. DOLPH. 87

this country should surprise no one. It has been pre- dicted for years by those who believe the prosperity of the country can only be maintained by the protection of American industries. The present condition is the logical result of the success at the presidential election of November last of the party which declares that pro- tection of American industries is robbery, and stands pledged to reverse the policy which for more than thirty years has given us an era of prosperity such as this or no other country has ever before enjoyed.

Over all this great industrial system hangs a dark cloud of uncertainty and fear, an impending blow threatening its destruction. And so the wheels of progress are stopped. The fires are suffered to go out in furnaceSf the machinery in great establishments is idle, and idle men seek employment. The importer will not import dutiable goods when he fears that soon his competitors can import them free of duty. The manufacturer will not produce his products in excess of the present demand when he fears that his surplus product may be compelled to compete with free foreign products. He will buy raw materials for present needs only while the prospect is before him of soon being able to supply himself with raw materials of foreign production free of duty ; and so the importer, the mer- chant, the manufacturer to avoid disaster curtail their operations.

The wholesale merchants, the bankers, and all classes of creditors press collections, settlements are forced, and financial losses, business failures, and bankruptcies are the result. The Sherman law is not the sole or even the principal cause of the present financial depres- sion, and its repeal will not cure our financial and in-

88 SILYBB AND GOLD.

dustrial ills. No permanent improvement in the indus* trial situation need be expected while the destruction of the protective system is threatened or feared. No legislation by which domestic industries will be injured or destroyed, by which the products of foreign labor will be admitted to free or to greater competition with domestic products, which will result in transferring do- mestic industries to foreign countries, and giving labor now performed by American citizens to foreigners, will help to restore confidence or bring business prosperity.

After the Democratic majority in congress shall have settled upon a tariff policy, and formulated and enacted its tariff revision, whether such revision shall be gen- eral or be destructive only with a few American indus- tries, such as the wool and tin-plate industries, the business of the country will adjust itself to the changes, and we may enjoy a halting, intermittent prosperity with lower wages to laborers, but a sound, permanent prosperity in this country will not, in my judgment, be again enjoyed until we are assured of the success of the Republican party and its control of both Houses of Congress, and that a policy is to be adopted and main- tained by which the industries, the capital, and the la- bor of this country are to be preferred to those of for- eign countries.

Necessity for the repeal of the Sherman law, if such a necessity exists, has been created by the success of the Democratic party, the threat of free trade and the predictions by the Democratic press and Democratic politicians of disaster to follow from the operation of the Sherman law, made in a systematic effort to secure the repeal of that law at the last session of congress under a Republican Administration.

8EKATOB J. N. DOLPH. 89

There are so many widely differing views upon the silver question, so many diverse financial plans pro- posed, so many erroneous opinions concerning our coin- age laws, our financial system, and the character and functions of money, that it may be useful to refer briefly to some of the elementary principles of political economy which can not be disregarded by congress if it would provide the country with a sound, safe, and honest currency.

Labor employed in the creation of useful articles is the source of all wealth. A useful product of labor is a thing of value. It may be a product of agriculture^ for which the farmer plows and sows and reaps, avail- ing himself of what nature has furnished him at hand ; the fertile soil, the warmth of the sun, the early and later rains, or it may be the gold and silver for which the miner patiently delves in the great treasure vaults of nature, or the more useful products of iron and coal which require the labor of men to extract them from the earth and fit them for use, or it may be a coat, a hat, a watch, or a steam engine. All the things by which we are fed, clothed, and sheltered, which add to our convenience, comfort, and pleasure are the products of labor. They are valuable because they are adapted to the- use of man. But one man can not make all the things he needs, or at least he does not. Hence we have diversity of labor, and one man mines gold and silver, another cultivates the soil, another raises sheep and grows wool, another manufactures cloth, another manufactures clothing, and so on.

Now, the man who works the mine or grows wool must have food and clothing and many other things. If there were no money or medium of exchange the

90 glLVEB AND GOLD.

manufacturer of cloth might buy wool of the wool- grower and give him cloth in exchange, but the wool- grower might not need the cloth. He would need pro- visions and clothing. He might take cloth and find a manufacturer of clothing who would exchange clothing for it, and he might possibly exchange cloth for gro- ceries, and the groceryman might in turn exchange cloth for something that he needed ; but this would be a very tedious and unsatisfactory manner of conducting commercial exchanges. Hence the necessity of a me- dium of exchange — a tool of exchange — so that when the wool-grower carries his wool to the manufacturer of cloth or to some middleman and sells it, instead of taking cloth in exchange for it, he can receive this me- dium of exchange to the amount of the value of his wool, and this medium can in turn be exchanged for any other commodity which he may need.

This medium we call money. If we could conceive of the first community which invented money assem- bling together to choose such a medium we could prob- ably obtain a pretty good idea of why gold and silver came to be selected. Such a ^medium should possess considerable intrinsic value ; that is, be capable of be- ing used for a great many useful purposes. It should be tolerably scarce, and hard to obtain, so as to be pro- portionately valuable, easily transported, and pass cur- rently from hand to hand. It should be plenty enough, however, to answer the requirements of commerce, and it should be capable of being easily subdivided and changed in form Grold seems to possess all the essen- tial requirements for money, and it is undoubtedly for iihis reason that it was selected. Silver partakes in 8om« degree of the same quality, although it is more

RICHAKD P. BLAND,

I

X.-'. V-^-:^^. V'>^

SEKATOB J. K. DOLPH. 08

abundant and more easily obtained. Therefore it has been selected and used for money and made a legal tender for the payment of debts, in some countries for all sums and in others for limited sums only.

Sometimes in the exigencies of commerce the pur- chaser may not have this medium of exchangef money, in sufficient quantities to pay for his purchases, and hence he buys on credit.

When the war of the rebellion broke out it required a great deal of money to carry it on, and there were many reasons which rendered it difficult for the govern- ment to obtain money, that is, gold and silver. In its extremity the United States, to enable itself to meet its engagements, to pay the soldiers, to furnish arms, transportation, and supplies, not having gold and silver enough, issued its promise to pay money in the future. Some of these were promises to pay certain amounts of money at the expiration of a fixed period with in- terest semi-annually at fixed rates. These were the government bonds. Then it issued treasury notes or greenbacks of various denominations, so as to pass from hand to hand as money, which were nothing but ac- knowledgments of indebtedness, without any time be- ing fixed for their payment or any agreement to pay interest. Congress made these notes legal tender for the payment of private debts.

As the legal tenders possessed no intrMisic value and were debts payable only at the pleasure of the United States, and as the war progressed portions o^ the peo- ple began to fear that the South would prevail and that the States remaining in the Union would be either \in- willing or unable to redeem these promises, they rap- idly depreciated in value until they were worth xtp 6

94 SILVER AKD GOLD.

more than 85 cents on a dollar ; but as the prospects of subduing the rebellion and maintaining the Union in^ creased they gradually appreciated in value, and after the war was closed continued to appreciate until they reached about the value of 90 cents on the dollar; that is, a dollar in greenbacks was worth 90 cents in gold.

Congress after a while passed the resumption act — that is, fixed a day when the government would pay its notes in coin if presented to the Secretary of the Treasury, and provided one hundred millions of gold in the vaults of the treasury to pay them. But all at once the legal tender notes became worth their face in gold and the gold in the treasury was not needed. The people preferred to keep the promises of the gov* ernment to pay the money when the government was ready to redeem them.

The legal tenders and all treasury notes are evi- dences of debt of the government possess no intrinsic value. They are made by law to perform some of the functions of money. They are made legal tender for the payment of private debts and public dues, and their value depends entirely upon the provisions made by law for their redemption in coin — that is to say upon the fact that they ar<^ convertible into that which has intrinsic value.

We have several kinds of currency in circulation, performing the functions or some of the functions of money. There is the gold coin double eagle, eagles, half eagles, quarter eagles, etc. These gold coins are legal currency — that is, they have been declared by law to be. a legal tender for the payment of private d^bts and public dues, but they also possess such in*

SENATOR J. N. DOLPH. 95

trinslc value that if you should melt them u^ into bul- h'on the bullion would be just as valuable as the coin. In fact, when they are exported, the fact that they are coined with the devices provided by our laws upon them adds nothing to their value ; their value depends entirely upon their weight.

Then we have the silver coin, which is also by law made a legal tender for the payment of private debts, and is receivable for public dues. The intrinsic value of the silver dollar, like the intrinsic value of the gold dollar, is the value of the bullion it contains, which at ")reseut is about 60 cents in gold.

The silver dollar in the payment of debts and public iues is required by law to pass for one hundred cents. Forty cents of the value of every silver dollar is based upon the credit of the government. It is true that the government has not agreed to redeem the silver cur- rency in gold upon presentation to the treasury, but it has promised to receive it as the equivalent of gold for public dues, of which we collect about $600,000,000 an- nually. This is a qualified redemption in gold, and- this provision, with the general expectation that the government will maintain this currency upon a parity with gold, has so far kept the silver dollar at par with the gold dollar.

There are also the gold and silver certificates, which perform the functions of money. They are receipts for gold and silver deposited in the treasury. They are redeemable upon presentation at the treasury in gold or silver coin as the case may require. They are like wheat receipts issued by warehousemen, which call for a given number of bushels of wheat upon presentation, and pass from hand to hand instead of the wheat, unt-'.

96 SILVER AND GOLD.

some holder is ready to present them to the warehouse* man and exchange them for the wheat.

Any person may take gold not less than $10 in amount to the treasury and deposit it and receive a gold certificate, and the gold is kept in the treasury, to be returned to the holder of the receipt when it is presented. The same thing is true of silver certifi- cates.

Then there are the legal tender notes, possessing, as I have said, no intrinsic value, but redeemable in gold on presentation to the treasury. They are, therefore, worth their face in gold. There are about f 346,000,- 000 of this currency.

We have also another kind of national currency, the treasury notes issued under act of 1890. They were issued for the purchase of silver bullion at the market price at the time of purchase. The silver bullion is stored in the treasury vaults theoretically, if not le- gally, as security for the payment of the notes, and the law provides that the notes shall be redeemed upon presentation in coin — ^gold or silver coin — at the option of the Secretary of the Treasury. The gold coin and the gold certificates constitute an absolutely safe cur- rency, for the coin is intrinsically worth its face, and the certificates can be exchanged for gold upon presen- tation at the treasury.

The legal tender notes are equally safe, for they are redeemable upon presentation at the treasury in gold. A hundred millions of dollars in gold is kept in the treasury as a reserve for the payment of these notes, and the Secretary of the Treasury is authorized to sell bonds for gold, if necessary, for their redemption. The silver coin and silver certificates and treasury notes

(

SBNATOB J. N. DOLPH. 9*^

Stand on a different footing. The intrinsic value of the silver coin in gold, as I have said, is about 60 cents on the dollar. The silver certificates are redeemable in silver. The treasury notes may be paid in silver coin. There is no provision of law for redeeming this silver coin and currency in gold, except the provision for the receipt of it as the equivalent of gold in payment of public dues.

If congress should repeal the law requiring silver coin and silver currency to be received for public dues, the value of the silver coin, the silver certificate, and the treasury notes would at once depreciate until they would be worth no more on the dollar than the value of the silver bullion in a silver dollar. To repeat, the gold and silver coin possess intrinsic value. The gold coin is intrinsically worth its face ; the silver coins are intrinsically worth about 60 per cent, of their face. The gold certificates and the silver certificates are the obli- gations of the government, and are valuable because they are convertible on demand into gold and silver. The legal tender and treasury notes are evidences of debt of the government, but possess no intrinsic value and are valuable only because the legal tender notes can be converted into gold upon presentation to the treas- ury, and the Treasury notes can be converted into coin, gold or silver coin, at the option of the treasury, upon presentation for payment.

While silver and gold possess intrinsic value, and for that reason, in part, are adapted to use as money, it must not be supposed they have a fixed relative value ; that is to say, that a certain amount of silver is always worth a certain amount of gold. Considered as bullion, they are but products of labor, just aa wheat, potatoesi

96 SILYEB AKD GOLD.

cotton, and wool are products of labor, and it would be no more absurd to suppose that the relative value be- tween potatoes and wheat, or cotton and wool is fixed, so that 2 or 4 bushels of potatoes are always equal in value to the value of a bushel of wheat, or that 5 pounds of cotton is always equal in value to a pound of wool, than to suppose that a given number of ounces of sil- ver, say 16 or 20, is always equal in value to an ounce of gold.

The value of each metal, like the value of every other product of human labor, is fixed by the supply and the demand. This is the reason why the use of the two metals as money under free coinage of both is impossible without the concurrent use of the two met- als as money, at an agreed ratio, by a sufficient number of commercial nations to maintain the ratio of their in- trinsic value at the legal ratio agreed upon.

Some persons who demand free coinage of silver in the United States at the ratio of 16 to 1 appear to be- lieve that gold and silver have naturally a fixed value relatively one to the other, and that the United States adopted that natural relative value by the coinage acts of 1834 and 1837. The relative intrinsic value of the two metals, as I have said, is fixed by the universal and imperative law which fixes the price of every product of human industry in the world*s market.

The value of silver as compared with gold has been, with the exception of a comparatively brief period, con- stantly fluctuating since authentic history began. Five hundred years before the Christian era an ounce of gold was worth 13 ounces of silver. At the beginning of the Christian era an ounce of gold was worth 9 ounces of silver. Three hundred and fifty years later it

tequired 15 ounces of silver to buy 1 ounce of gold. Two hundred and fifty years later still an ounce of gold was worth 18 ounces of silver. About the close of the fifteenth century the ratio was about 1 to 10 ; by 1688 the value of gold had again increased until an ounce of gold was worth 16 ounces of silver. For nearly two centuries this ratio was substantially main- tained by the use of both metals as money by the prin- cipal commercial countries of Europe. When silver was demonetized by Germany and its coinage suspended by France and the Latin Union this ratio was no longer maintained, and the relative value of silver to gold has since greatly fallen and has been constantly fluctua- ting.

Until an international argreement can be secured between the principal commercial countries of the world for the free coinage of silver at an agreed ratio so that the intrinsic value of the silver product of the world as measured in gold can be maintained at the legal ratio agreed upon, each nation must determine for itself whether it will have a gold or a silver standard. A double standard is impossible. The two metals will mot circulate together unless the parity of their value ^an be maintained. To-day the following foreign countries have the silver standard : India, China, Mex- ico, Japan, and most of the Central and South American States. The following have gold standards: Brazil, British possessions in North America, Denmark, Egypt, Finland, German Empire, Great Britain, Liberia, Nor- way, Portugal, Sweden, Turkey. The followiug have legally a gold and silver standard, but in fact a gold standard. They have no free coinage of silver, and silver coin is maintained in domestic circulation on a

100 SILVER AND GOLD.

parity with gold by some provision for its redemption in gold or by its receipt for public dues : Argentine Republic, Belgium, Chile, Cuba, France, Greece, Haiti, Italy, Netherlands, Spain, and S witzerland. Those people who propose free coinage for the United States propose that we shall change our measure of value from gold to silver and join India, Mexico, China, and other coun- tries having a silver standard, and that silver shall be the basis upon which all the transactions in this country shall be conducted.

Our own experience is sufficient to show that it is impossible under free coinage to maintain in circulation both gold and silver when either is undervalued by the legal ratio. The coinage law of 1792 established the ratio of 1 to 15 between gold and silver. The intention of congress was to adopt the commercial ratio between the two metals in the markets of the world. But gold was undervalued and could not be kept in the country, and, its place was supplied with Spanish milled dollars and small, abraded silver coins. The ratio of France being at the same time 1 to 15|, France took all our gold under a law that is universal and inevitable. To secure the retention and circulation of gold in this country the acts of 1834 and 1837 were passed. The ratio under those laws was 1 to 16. Gold was over- valued and silver left the country under the operation of the same law. To enable us to retain in this countrj'^ silver subsidiary coins the act of 1853 was passed, re- ducing the amount of silver in half dollars and other fractions of a dollar, discontinuing free coinage of sub- sidiary coin and providing for its coinage by the govern- ment from silver purchased by it, upon which it ro* ceived the profit.

SENATOR J. N. DOLPfl. - .iSJt'

t>oe4 anyone suppose for a moment that when con- gress established a mint and fixed a ratio between gold and silver at 15 to 1 on the advice of Hamilton, or when in 1834 the ratio of 16 to 1 was adopted for sil- ver and gold, if silver and gold had been of the value relatively to each other they are to-day the ratio of 15 to 1 or 16 to 1 would have been adopted ? It is famil- iar history that Hamilton endeavored to adopt as the legal ratio the then commercial ratio between the two metals in the markets of the world, and that congress in 1834 designed to make the ratio such that gold would remain in this country, whether under it we could keep silver or not.

Some persons have proposed that a new legal ratio between gold and silver should be established by law, say a ratio of 20 to 1, and the mints be opened for the free coinage of silver at this ratio ; but this proposition is impracticable, would surely give us a silver standard and drive gold out of circulation, would not increase the price of silver bullion or benefit silver producers, and would be no better for the country than free coin- age at the present legal ratio. If we are to abandon gold as the standard, and to adopt the silver standard, it is not material whether a silver dollar is worth 50 per cent, or 90 per cent, of the gold dollar. If we could maintain in the world's markets the actual commercial and intrinsic ratio of value between gold and silver at SQme legal ratio we could adopt, then the question would be solved ; but we can not.

This can only be done by the united action of the principal commercial nations of the world. If we should adopt by law a legal ratio, which at the time was the same as the commercial ratio of value of the two metala.

l02 SILVER AKD GOLD.

before a dollar could be coined under it, silver, which Quctuates every day in price, might fall until the legal ratio and the ratio of the intrinsic value of the two metals would be widely different ; and under free coin- age at the ratio adopted only one metal would be coined or remain in circulation. Such a proposition shows a failure upon the part of those who make it to compre- hend the first principles of the silver question.

Others have advocated free coinage of both gold und silver without an attempt to make the silver dollar the equivalent of the gold dollar, but letting the in- trinsic value of gold and silver fix the current money value of gold and silver coin ; in other words, that we should have two standards, a gold standard and a silver standard; but this is impracticable. In such a case one or the other of the two metals would have to be measured by the other, or we would require a third standard to measure them both.

Gold being the standard of value of all the great commercial countries, and the medium in which public dues must be paid and foreign debts settled, the silver coin under such circumstances would be but a commod- ity in foreign countries. Gold would disappear, and the depreciated silver currency be our standard of value, and the measure of commercial transactions or our ex- changes conducted on the silver standard would be mere barter.

The government stamp can not create good money. All money must possess intrinsic value or be convertible into that which has intrinsic value. After the dis- covery of gold on the Pacific coast, gold dust was largely used as a medium of exchange, and before the establishment of the branch mint at San FranciacQ

8EKATOB J. N. DOLPH. 108

private parties manufactured gold coins of the weight and fineness of the United States gold coins« and in sub- divisions as low as 25 cents. They were not made in im- itation of the United States coin and were not legal ten- der, but they were worth as much, and passed as currency everywhere, as the gold coins of the United States.

When the branch mint was established the govern- ment did that for the public convenience which private parties before had done. This incident shows that while the stamp of the government, and legal tender enactments are necessary, to make legal tender money, it requires neither the government stamp nor statutes to make a convenient medium of exchange when that medium possesses the necessary intrinsic value, while, on the other hand, the depreciation of the legal tender notes during the war shows that neither the govern- ment stamp nor legislative enactments making a cur- rency legal tender can always make good money. Neither the government stamp nor their legal tender qualities gave the legal tender notes the value they did possess as a medium of exchange, but this was imparted to them by the promise of the government to redeem them in money, and when the day of payment was fixed and provision was made for their payment they became good for their face, because they were con- vertible into gold at par.

If private parties were to coin silver bullion into eoin of the weight and fineness of the standard silver dollars, such coin would be worth no more than its mar- ket value as bullion and would not circulate anywhere as a medium of exchange.

The silver rupee of India, the Mexican dollar, and the silver coins of Chin , ahd of every other country hay-

104 SILVER AND GOLD,

ing free coiDage of silver, are worth no more even in the countries where they are coined than the value of the sil- ver they contain. The reason that the standard silver dol- lar of the United States is worth 100 cents in the United States and even in Mexico, although it contains less sil- ver than the Mexican dollar, is because the United States has put the standard silver dollar into circulation, vir- tually saying this coin, though intrinsically worth only what the silver it contains is worth as bullion in the markets of the world, is issued upon the pledge of the government that it shall be accepted as the equivalent of a gold dollar in payment of all government dues.

If congress were to provide that all public dues should be paid in gold, and substitute no provision for the redemption of silver currency in gold, the standard silver dollar would become immediately worth less in the United States and everywhere than the Mexican silver dollar.

By the free coinage of silver it is proposed that anyone shall be permitted to take to the mints of the United States 871J grains of pure silver, now worth, say, 60 cents, and receive for it a standard silver dollar, which is to be a legal tender in payment for private debts at its face and receivable as the equivalent of a gold dollar for public dues, or, as provided in the Stew- art bill of last congress, which passed the senate, re- ceive for his 60 cents' worth of silver bullion a treasury note which is a legal tender in payment of private debts and receivable in payment of public dues at its face. The whole object of the Stewart bill was to make the government the purchaser of all silver bullion of- fered at the mints at the rate of 100 cents for 60 cents' worth of bullion.

SENATOB J. N. DOLPH. 106

If there are now premonitions of the depreciation of the silver dollar when it is coined only by the gov- ernmenty and its coinage is limited, and its cost to the government is only its intrinsic value, what would hap- pen if the mints were thrown open for the coinage of silver on private account and private parties presenting the bullion to the mints were to receive a profit equal to the difference between the value of tHe bullion of- fered and the face value of the coin or treasury notes received in exchange for it and the government were to lose an amount equal to the profit of individuals ?

It seems impossible that anyone should suppose for a moment that the silver dollar or treasury notes re- 3eived in exchange for silver bullion under such a law could be maintained equal to a gold dollar. It could not be. Before the first dollar under a free coinage law could be coined, the silver dollar could be worth no more than the value of the bullion it contained.

The merits or demerits of any measure for the use of silver as money to-day must be determined by exist- ing conditions. The question whether previous financial legislation has been wise or unwise is immaterial. The ratio of the value of silver to gold to-day, and not tlie ratio in 1873, is the important matter for consideration. Since 1878 silver has depreciated in value about 40 per cent. The product of silver increased from 63,000,000 ounces in 1878 to 140,000,000 ounces in 1891. The coinage of silver has been discontinued for many years by the principal countries of Europe. Many persons believe that with free coinage of silver we would be flooded with the world's silver.

The stock of full legal tender silver coin in the prin- oipal countries of Europe approximates $1,100,000,000^

106 SILVER AND GOLD.

of which $430,000,000 are stored in the vaults of five banks, and could be thrown upon our markets without delay. I have never feared that free coinage of silver in the United States would cause the world^s silver to be dumped upon us, because I have never believed that with free coinage the silver dollar would possess any greater value than the bullion it contained.

Of. course, if under free coinage the silver dollar could be maintained the equivalent in value of a gold dollar we would speedily get all the silver of the world, and citizens of the United States and subjects of foreign countries and foreign governments themselves would undoubtedly avail themselves of the privilege of pre- senting at our mints 60 cents' worth of silver, receiving for it a legal tender note, and converting that into gold. The United States would become the purchaser of all the silver in the world — ^bullion, coin, and old silver- ware— paying a dollar in gold for 60 cents' worth.

But it is absurd to suppose that if everyone was permitted to carry silver bullion to the mints to be coined there woyld be any alchemy in the process that would double the value of silver bullion. It is as abso- lutely certain as anything caji be that under free coin- age the value of the silver dollar would depreciate un- til it was worth no more as money than the value of the bullion contained in it. As soon as this occurred, the profits to silver owners in exchanging silver bullion for silver coin would cease and there would be no longer any inducer ^)t to take silver bullion to the mint to be coined. Silver, like every product of hu- man labor, would be sold in the markets for what it would bring for use in the arts or for money.

The amount of silver coined under free coinage

8ENAT0E J. N. DOLPH. 107

would be variable, and would depend upon a variety of circumstances. But little over eight million silver dollars were coined from the establishment of the mint until 1873, and it is not likely any great amount would now be coined under free coinage. With free coinage of silver^ silver would be the standard for all our busi- ness transactions. Our $700,000,000 of gold would be withdrawn from circulation ; the circulating medium would be greatly contracted, and the products of in- dustry greatly diminished. Free coinage would not in- crease the price in gold of any commodity. The price of everything we import would still necessarily be paid in gold. If more silver dollars were received by the producer for his products, more silver dollars would be required to purchase everything which he consumes.

For instance, if the farmer should receive $1 in silver for a bushel of wheat, that silver dollar would go no further than 60 cents in gold or so much gold as in the world's markets would buy a silver dollar. The value of property measured in silver would be at once advanced to offset the depreciation in the standard of value. The last thing to be advanced would be the price of labor. Although the price of everything con- sumed by the laborer would be nearly doubled in value, it would be a long time, and after many a struggle, before the laborer would succeed in getting two silver dollars in lieu of the one gold dollar he now receives for his labor.

* All producers and laborers would lose by the change in our standard of value, and only bankers, brokers, money-changers, and middlemen would profit by it. All salaries and pensions would be paid in silver and all appropriations of the government expanded in

108

SILVER AND GOLD.

silver. The disturbance of our financial condition which would result from adopting a silver standard would produce great financial stringency, force the im- mediate collection of debts, increase the rate of interest, demoralize business, throw labor out of employment, impair the credit of the government, bring home for collection our State, municipal, and corporation bonds held abroad, impair confidence, bring upon us ruin and bankruptcy.

If existing debts were paid in depreciated silver it would be robbing the creditor, because they have all been contracted with reference to the present standard, and 95 per cent, of them since the great depreciation in silver.

India, one of the countries until recently having free coinage of silver or coining silver on private ac- count, has hiwherto been a great consumer of silver bullion for ornaments and coinage, and has been pointed to by the advocates of free coinage as an example of prosperity with free coinage of silver. The amount coined has been large, but not uniform, some years be- ing a hundred per cent, more than others. The follow- ing table shows the amount, expressed in dollars, of silver annually minted during the period of sixteen years, and shows the consumption of silver in India for coin :

1875 $23,830,686

1876.

1877. 1878. 1879.

12,410,636 30,r>18,415 78,741,556 28,122,004

1880 40,002173

1881 20,682,625

1883 29,386,322

1883 24,927,400

1884 17,363,531

1885 548,487,114

1886 27.121,414

1887 44,142,013

1888 36,297,132

1889 37,927,814

1890 57,931,323

1891 32,670,498

Total 17 years... 590,562,659

Aunnal average. 34,150,744

aEORGE G. vjai.

SBNATOB J. K. DOLPH. Ill

The amount coined in 1890 is estimated at $30,000,' 000. The silver rupee of India contains 186 grains of pure silver ; the half, quarter, and eighth rupees are of corresponding weights. The coinage of both metals until the recent action of the India government was practically free, provided the amount presented was equal to 50 tolos of gold or a thousand tolos in silver. There was a duty of 1 per cent, upon all gold and sil* ver brought to the mints. Gold was not coined in any considerable amount, and the business of the country was conducted upon a silver standard. The stoppage of the coinage of silver on private account in India is not an abandonment of the silver standard. Silver is still the standard, and will continue to be whether the government coins silver on its own account or not.

It is said this action of the government of India is intended to have the effect to prevent the further de- cline of the value of the rupee, but upon what this ex- pectation is based is not stated. The value of the rupee will be fixed hereafter, as heretofore, by its value as silver bullion in the London Market It will still be measured in all London and in all foreign trans- actions by gold, and the discontinuance of free coinage by throwing the silver bullion heretofore coined in India on private account on the world's markets has depreciated, and will continue to depreciate, the in- trinsic value of the rupee.

The claim sometimes made that silver has not fallen in value in India, and that the silver rupee in the interior of India will purchase as much wheat or as much of the other products of labor is absurd ; it is incredible. The price of wheat in London is fixed in gold by the world's supply and demand. It is impos- T

112 SniVBB AND GOLD.

sible that there could be to the exporter of wheat from India a profit equal to the fall in the price of sil- ver since 1878. Such a state of things could not exist ten days in any country under the sun. Competition among English wheat-buyers would speedily raise, the price of wheat in India to an approximation of its gold price in London.

I am informed that the price of wheat is fixed in the export cities of India by the price in London and the cost of transportation, insurance, etc. The statement is undoubtedly an invention intended to make farmers believe that in some way the price of their commodities is affected by the depression of silver. Not every country which uses silver as money has a silver stand- ard. In the United States we have about $500,000,000 of silver currency, but our standard is gold, and the difference between our gold and the intrinsic value o^ our silver currency rests upon the obligation of thd government to redeem it in gold.

England, although having a gold standard sincr 1816, has about f 100,000,000 of silver, subsidiary coin used in small transactions. France has $700,000,00ft of silver and $900,000,000 of gold, but has a gold standard, and her silver passes at par upon the faith oi its redemption, and an actual redemption in gold, and this is the case in every country which maintains in circulation silver upon a parity with gold. In all these countries silver is redeemable in some manner in gold ; free coinage of silver has been discontinued, and the stock of silver is not increased. On the contrary, in every country where there is free coinage of silver the purchasing power of silver coin is precisely the market value of the bullion it contains.

8KNATOB J. K. DOLPH. 118

*' There is persistent and gross misrepresentation concerning the manner in which the act of 1878 dis- continuing the free coinage of the silver dollar was enacted. The recent article by ex-Secretary Boutwell in the Boston Herald giving the facts concerning the manner in which the law of 1873 was passed should set the question at rest, but it will not. I quote the following from ex-Secretary Boutwell's article :

*' The act known as the act for the demonetization of silver was passed in 1878, and upon a distinct rec- ommendation made in my annual report to congress in December, 1872. The statement so often made and so generally believed, that the provision was introduced and passed surreptitiously, was without any foundation, as will appear from quotations from my report, which I shall incorporate in this article.

** The country had due and full notice of the policy proposed, and, if the friends of a silver currency were ignorant of the movement, the fault was their own. Not only was there no concealment, but, on the other hand, the change proposed was announced early and definitely. For myself, I can say that I never hesitated to avow the authorship of the measure, and I have been readv always to assign the reasons by which I was influenced.

" In 1860 the American silver dollar was more val- usible than the gold dollar, accordiug to the statute ratio between the metals, in the sum of about 4 cents. From that time onward the difference in favor of silver diminished graduaHy, and in 1872 the difference had disappeared.

**At that time the power drill had been invented and its value established. The use of dynamite was well understood, and the number and richness of the silver mines in the Rocky Mountains justified the con- clusion that silver would deteriorate in value with each succeeding year.

114 SILVEB AND GOLD.

" On this theory of the then future my policy was based. We were then on a gold basis as far as the use of the metals had a part in our financial affairs; we were a principal producer of gold, and the most import- ant steps had been taken in the work of bringing the treasury note to the standard of gold coin.

^^ In the same report I advised the coinage of a sil- ver dollar, known as the trade dollar, in value superior to the Mexican dollar, which was then in use almost exclusively in the commerce of China and the East Indies. This coin, which was not current in the United States, became the means of a very considerable export of silver to the East.

" These two measures were designed to maintain a gold basis, in competition with England, our principal rival, and to substitute American silver for Mexican silver in our dealings with the countiies using that metal."

The operation of the Bland act and the Sherman ktw was recently stated in an authorized interview with Secretary Carlisle. He said :

"The operations of the United States Mint com- menced in 1792, and from that time to 1873, a period of eighty-one years, the total amount of silver dollars coined was $8,045,838. In 1873 the coinage was stopped by act of Congress, but in 1878 it was resumed under the so-called Bland-Allison act, by the terms of which the Secretary of the Treasury was directed to purchase and coin into standard silver dollars of 412| grains each, not less than $2,000,000 worth nor more than $4,000,000 worth of silver bullion each month, and between the date of the act and the 14th of July, 1890, a period of twelve years, there was coined $378,- 166,793.

''In addition to this there has been coined from trade dollars $5,088,472, and from the seigniorage of bullion purchased and coined under the act July 14, 1890, the sum of $6,641,109, making in the aggregate

SENATOfi J. K. DOL^H. llS

$889,886,874 in full legal-tender silver money issued by the government since 1878. Of this amount only $58,016,000 was in actual circulation on the first day of the present month, the remainder being held in the treasury as part of the assets of the government, or being represented by outstanding certificates.

"The act of July 14, 1890, requires the Secretary of the Treasury to purchase 4,600,000 fine ounces of silver bullion each month, and it provided that he should continue the coinage of silver dollars, at the rate of $2,000,000 per month, till the 1st' day of July, 1891, and under this act there has been coined $29,- 408,461, which makes a total coinage of silver dollars under all acts since 1878, $419,294,835, or more than fifty times as much as was coined during a previous period of eighty-one years. In addition to the silver bullion purchased by the government since 1878 and coined as above stated, the Secretary of the Treasury has purchased under the act of July 14, 1890, and now holds in the vaults of the treasury uncoined, 124,292,- 582 fine ounces of silver bullion, which cost the people of the United States $114,229,920, and is worth to-day at the market price of silver $108,411,886, thus show- mg a loss of $10,888,580.

" By the terms of the act the Secretary was required to pay for all silver bullion purchased by the issue of new United States Treasury notes, payable in coin, and it provided that upon demand of the holder of any such notes they should be redeemable in gold or silver coin, at the discretion of the Secretary, it being in the language of the act the established policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law. In the execution of this policy of Congress it is the duty of the Secretary when the necessity arises to exercise all the powers conferred upon him by law in order to keep the gov- ernment in a condition to redeem its obligations in such coin as may be demanded, and to prevent the de- preciation of either as compared with the other.

116 dILVBB Am> OOIil).

"The records of the treasury department show that during the eleven months beginning May 31, 1892, and ending May 1, 1898, the coin treasury notes issued for the purchase of silver bullion under the act of July 14, 1890, amounted to 149,861,184, and that during the same period the amount of such notes paid in gold was $47,745,173. It thus appears that all silver bullion purchased during that time, except $2,216,011 worth, was paid for in gold, while the bullion itself is stored in the vaults of the treasury, and can neither be sold nor used for the payment of any kind of obligation. How long the government shall thus be compelled to purchase silver bullion and increase the public debt by issuing coin obligations in payment for it is a question that congress alone can answer. It is evident that if the policy is continued and the Secretary of the Treas- ury be compelled to issue bonds or otherwise increase the interest-bearing debt, it will be done for the pur-

Eose of procuring gold with which to pay for silver ullion purchased under the act referred to."

There is to be added to our stock of silver bullion the purchases made since this interview was had. The intrinsic value of the silver dollar is to-day $0.56; present value of an ounce of silver, $0,726. Under the Bland and Sherman acts we have purchased 460,000,000 ounces of silver at a loss, at the present prices of silver bullion, of $134,957,000.

One of the causes that sends gold abroad is a bal- ance of trade against us. Gold is the standard of all the commercial countries of Europe, and all our im- ports from there must be paid for in gold.

A tarifip that causes what we consume to be made at home tends to increase our exports and diminish our imports, and to bring gold to us instead of sending it out of the countrjT* Then American travelers must

dMl^Atott 3. K. iX>L^H. lit

provide gold for their expenses in Europe, and they carry a great deal of gold abroad annually, but the principal cause of the drain of gold from this country is the fact that we are debtors to the people of foreign countries, and when they demand payment we must send the gold abroad to liquidate our indebtedness.

During our recent financial disturbances there was a large exportation of gold. The stock of free gold in the treasury, that is, the amount of gold over and above the 9100,000,000 reserved for the redemption of legal treasury notes, was exhausted and the reserve was en- croached upon. This condition, in my judgment, was largely caused by the fear of our European creditors that we would go to the silver standard in the United States, and the consequent disposition on their part to recall their inyestments in this country. If we should adopt free coinage of silver and go to a silver basis, whenever an American citizen should go abroad he would be compelled to exchange the silver currency of the United States for gold, paying a premium equal to the difference between the intrinsic yalue of the two metals, and the same thing would be true concerning the payment of any balance of trade against us, and of the payment of our foreign creditors.

There is a great deal of absurd talk about the friends of silver and the enemies of silver. I am neither a friend of gold or an enemy of silver. I am in favor of the use of the two metals as money when- ever possible. The advocates of free coinage denounce those who oppose free coinage of silver as the enemies of silver, and as gold bugs, etc. Nothing could be more unjust. No legislation favored by those who believe that the gold standard should be maintained

118 SLLYEB AND GOLD.

is for the purpose of discriminating against eithei metal.

I have no doubt but that the repeal of the Sherman law, the cessation of the purchase of silver by the gov- ernment, and the throwing of the 4,500,000 ounces of silver monthly now purchased by the United States upon the markets of the world, would still further de- preciate the price of silver ; but the Sherman law has failed to keep up the price of silver bullion, and threat- ens under existing conditions, for which the law is not responsible, to force us to a silver standard.

I do not believe that the free coinage of silver would maintain the price of silver bullion or benefit silver f<*>lucers, while it would bring disaster upon the countrj I claim to have been a better friend to the producers of silver than those who have favored free coinage. I have never thought that the purchase of silver by the government and coining it into silver standard dollars required to be received at their face for public and private dues, or storing it in the vaults of the treasury, was in accordance with sound financial principles ; in other words, that such a course could be continued indefinitely, and the parity between the gold and silver dollar be maintained.

I believe, however, with the continuance in power of the Republican party, the Sherman law might have continued in force for some time to come without any disastrous effects. The repeal of the Sherman law without any substitute by throwing upon the markets of the world monthly 4,500,000 ounces of silver bullion now purchased monthly by the government, should the present production of silver continue, will necessarily greatly depreciate the price of silver bullion*

8EKAT0B J. K. DOLPH. 119

It will stop the increase of our circulating medium by the issue of treasury notes. It will not, in my judg- ment, restore confidence or greatly improve the busi- ness situation. I fear, on the contrary, that it will make it worse. It may, however, prevent what is threatened, viz, the parting company of the silver and gold dollar, and enable the government to float its load of silver currency upon our present stock of gold. This will only be the case, however, by the repeal of the law unaccompanied by any measure calculated to shake confidence in the financial ability of the govern- ment, and by such a decided action of congress as to . make it certain that there is no further danger of free coinage of silver, and that it is the policy of the govern- ment to maintain the gold standard, and to redeem and retire the silver currency by substituting treasury notes redeemable in gold on presentation, or to maintain our present circulation of silver currency at par with gold under the present or additional provisions for its re- demption in gold.

Some persons talk about the redemption of our sil- ver currency in gold as if it were, like our legal tender currency, redeemable on presentation. Others ignore entirely the provision which has been made by law for the redemption of silver currency in gold, and point to the fact that standard silver dollars pass current at their face iu this country as evidence that free coinage of silver would make the legal ratio in the United States between gold and silver 16 to 1, the actual ratio of the intrinsic value of the two metals.

I do not believe that the Secretary of the Treasury is authorized under the Sherman act to redeem the treasury notes issued under it in gold when the gold

120 dlLVER AKb aoLt).

serve is encroached upon, or to sell bonds to obtain gold to redeem them. They should, under the law, have been paid in silver coin when there was no longer gold with which to redeem them without encroaching upon the gold reserve, but the course pursued by the Secretary of the Treasury no doubt helped to maintain the parity between gold and silver.

In several of the States and Territories one of the principal industries is silver mining. The owners of silver mines and those engaged in dependent industries are interested in having a market for the products of the mines at prices for silver bullion which will make mining profitable and the mining regions prosperous. Their reasonable demands upon the general govern- ment, in this regard, have heretofore been more than complied with.

Under the Bland act the government became a forced purchaser of silver to the value of $2,000,000 per month, and under the Sherman act of 4,500,000 ounces of silver bullion per month, all in a vain endeavor to prevent the further depression of silver bullion. I greatly sympathize with these people, and if some one can devise a scheme by which silver mining can be pro- tected without injustice to other interests quite as de- serving and without danger to our finances and our credit, I should be very glad to support it.

It is evident that the Sherman law, even if it could be safely continued, will not be sufficient to keep up the price of silver bullion, and owing to its deprecia- tion, silver mines are already closing down. Undoubt- edly the law has helped to sustain the price of silver by withdrawing from the world's market so large an amount of silver bullion.

BEirATOB J. K. t>OLPTL

121

While I have reluctantly concluded, notwithstand- ing the disastrous effect of the repeal on the price of silver bullion and the silver-mining industry, that the Sherman law should be repealed to prevent greater dis- aster, I am not willing to admit that that law is re- sponsible for existing financial and business conditions, and I do not expect its repeal will greatly relieve us from such conditions. The proposition to repeal the provision of the Sherman law, authorizing the purchase of silver bullion, to receive my support, must not be connected with any other measure which would be equally or more injurious to the credit of the govern- ment and the finances of the country, such as the re- moval of the tax upon State-bank issues or free coinage of silver

122 SILVER AND OOLD.

CHAPTER III.

BY SENATOR GEOBGB G. YBST OF MISSOUBL

To quote from the Republican platform adopted at Minneapolis, June, 1892: *^The American people, from tradition and interest, favor bimetallism, and the Republican party demands the use of both gold and silver as standard money, with restrictions and under such provisions, to be determined by legislation, as will secure the maintenance of the parity of values of the two metals, so that the purchasing ^nd debt^paying power of the dollar, whether of silver, gold, or paper, shall be at all times equal. The interests of the pro- ducers of the countrv, its farmers and its workingmen, demand that every dollar, paper or coin, issued by the government, shall be as good as any other. We com. mend the wise and patriotic steps already taken by oui government to secure an international conference to adopt such measures as will insure a parity of value be- tween golc' iK*^<\ silver for use as money throughout the world."

The Democratic convention at Chicago, June, 1892 ; *^ We hold to the use of both gold and silver as the standard money of the country, and to the coinage of both gold and silver without discriminating against either metal or charge for mintage, but the dollar unit of coinage of both metals must be of equal intrinsic and exchangeable value, or be adjusted through inter- national agreement, or by such safeguards of legislation as shall insure the maintenance of the parity of the two metals, and the equal power of every dollar at all times in the markets, and in payment of debt ; and we de- mand that all paper currency shall be kept at par with and redeemable in such coin. We insist upon thii

8BNATOB 080BGB G. VEST. . 128

policy «i8 especially necessary for the protection of the farmera and laboring classes, the first and most defense- less, victims of unstable money and a fluctuating cur- rency."

I assume that aft^r reading the platforms of the two great political organizations of the country, no one can intimate that there is anything partisan in the joint res- olution which I have offered. To vote against this resolution, whether that vote come from one side of the Chamber or the other, is to declare to the people of the United States what is believed already by many of chem, that the platforms of political parties are mere traps to catch votes, without sincerity and without honesty. It is time that the people should know whether politics is a juggle and fraud, or whether, when the great political parties which seek to control the destinies of a free people meet in council and make solemn declaration of policy and principle, they are worthy of confidence.

We are told that the repeal of the so-called Sherman act, or the purchasing clause of it, is all that is necessary at the present conjuncture, and that the clouds will be immediately lifted from the business and financial hori* f.ou, and the sun of prosperity again beam ^pon every portion of our land.

I was never the friend of the so-called Sherman act. I voted against it, spoke against it, denounced it as a makeshift, and declared it to be the worst measure for silver and for bimetallism that could be invented and placed upon the statute book. I am in no sense re- sponsible for its enactment. To-day its malign and distorted features look out upon a land staggering and reeling upon the verge of bankruptcy. Its putative

184 BILVEB AND GOLD.

fathers have bastardized it, and are falling over each other now in a vigorous attempt to prove that they never favored it, and are not responsible for its exist- ence.

In the report of the Herschell committee, appointed by the British House of Commons to investigate the question of mintage in India, the principal reason given for stopping the coinage of silver by private persons in the Indian mints is that the Sherman act might at any time precipitate upon the world a mass of silver that would probably cause a decline of its value to such an extent as to make free coinage in India absolutely ruinous. So this measure, introduced here ostensibly in the interest of silver, has come home to roost like a young chicken as a curse to silver. That act to-day is like a houseless and homeless legislative dog. There is no one to give it.even a bone, and it can not find a kennel in which to hide its dishonored head.

If the issue presented now to the congress of the United States and the American people was simply the repeal of the Sherman act, I take it there would be very little debate and singular unanimity in our action ; but the issue has gone beyond the repeal of the Sherman act. It is no longer a question of eliminating that statute, but it has grown into a question so grave and momentous that the congress of the United States roust of necessity earnestly consider it before going any further in the direction which has been indicated to us.

The question now before congress and the American people is one of bimetallism. Every intelligent man knows it. There is no citizen of the United States to- day, who has given any attention to public affairs* who

SBNATOB GBOBGE O. YBST. 126

ttatf read the message of the President of the United States ; who has seen the utterances of those who en- joy his especial confidence, who does not know that we stand now face to face with the great question of bimet^ allisin or a single gold standard.

The time for makeshifts and evasions and subter- fuges has passed.. No man in this country is so igno- rant that he does not know that under the circumstances and with the declarations made by its advocates, the unconditional repeal of the Sherman act stamps forever upon our financial policy the single gold standard. Not one silver dollur will ever be coined in this country again if we permit the purchasing clause of the Sher- man act to be repealed without a guarantee as solemn as the great necessities of the people, that silver shall continue to exist in the United States as a money metal.

I have been known as a steadfast and unflinching friend of the president. I defended him when assailed in the canvass for nomination ; I defended him in the campaign, and in every speech I made to the people of Missouri I declared that Mr. Cleveland, like myself, was a bimetallist, and that we only differed in regard to the ratio at which the coinage of silver should be had. I had the right to make that statement, because he had accepted the nomination upon a platform that pledged the Democratic party to bimetallism. It was as well known that the Democratic party stood upon the doctrine of bimetallism as that it met in Chicago and nominated Grover Cleveland for president of the United States.

I do not undertake to say now that the president b opposed to bimetallism. I do not undertake to sa^

126 SILVER AND GOLD.

that he would not give his executive sanction to a measure that coined silver at the commercial ratio with gold, but I do undertake to say that his message is most significant from what it £ftils to say. I undertake to say now, with the greatest respect for him and with not the slightest *doubt as to the honesty of his inten- tions, when he fails in this great state paper at such a contingency to say one word in regard to bimetallism, it certainly means that he considers the free coinage of silver at any ratio so impracticable that it does not need executive notice. If a bimetallist at all, it would be an insult to the intelligence of the president to believe that under the circumstances he would have deliberately sent this paper to us and to the world without having indicated in some way that he was willing to bring about and maintain bimetallism on some terms in the United States.

When during the last congress it was proposed to pass a free coinage bill at the ratio of 16 to 1, although I had repeatedly voted for such a bill, although I had in- troduced a bill which passed the senate and went to the house of representatives identical in its provisions with that which was offered here, I moved to postpone the consideration of that measure until after the No- vember election because our party had met and declared its platform and nominated its candidate, and I believed that in simple justice and in the spirit of fair play, Mr. Cleveland should be permitted to go before the Ameri- can people upon our platform and that the silver ques- tion, as it had been disposed of in that platform, should become an issue and be submitted to the American peo- ple ; but I did not mean to indicate for an instant that in voting for the postponement of the question at thafc

DA.TID B. HILL,

8BNAT0B GEORGE G. VEST. 129

time I gave up the great doctrine of bimetallism as es- tablished by the traditions and policies of our people and enshrined in their hearts to^ay. In that sessior. of congress I took occasion in discussing the financisi question to make the declaration, by which I stand now:

'* I have supported the free coinage of silver princi- pally upon the ground that I oppose all class legislation. I have never been (perhaps it has been my obtuseness) able to see the justice of permitting a man who owns a gold mine to go to the mints, the common property of the people, and coin his gold without expense, and deny the same privilege to the owner of a silver mine, who is au equal owner in the mints of this country, and who possesses a product which under the constitution is a money metal. If it is proposed now, and we are rapidly nearing that issue, to strike down silver as a money metal in this country, I distinctly state that I shall be found in favor of bimetallism as established by the con- stitution of the United States and by the traditions of the American people."

I am anxious to avoid the slightest misstatement or to make any unjust criticism upon the present adminis- tration of my own party, but I do not feel myself at liberty, in view of the responsibilities imposed upon me, to refrain from stating emphatically my conviction that we must determine now the question of bimetallism or the gold standard.

In addition to what I have said in regard to his message, what intelligent man believes that, without the knowledge that the sentiments expressed therein were in consonance with the opinions of the chief exe- cutive, the head of the great banking department of this government would have come ou t in a magazine

180 SILVER AND X^OLD.

article, which I have before me, declaring for the single gold standard and announcing to the American people that silver was doomed and must cease to be a money metal in the United States?

I have the right as a public man and as a private citizen to assume that when an officer of this govern^* ment, in control of its banks, near to the secretary of the treasury and in daily intercourse with him, ap- pointed by the president of the United States and con- firmed by the senate when the president himself knew that there was a difference of opinion in regard to that appointment, and that the Democratic party by a large majority and many Republicans deferred to his opinion in voting for that confirmation — I say that I have a right to assume that with these relations the comptroller of the currency does not antagonize the opinion of the president upon this great issue.

I do not conceal from myself the desperate char- acter of the contest which has come upon us. I recog- nize the fact that the money power of the civilized world through its authorized exponents is against silver to-day as a standard metal. I do not attempt to delude myself into the opinion or impression that we are not entering upon a doubtful conflict. It has been the his- tory of finance in all ages of the world that centraliza- tion and consolidation managed in one way or another to impress itself upon the destinies of all peoples. It is known as well as the names of the different countries upon the map of the globe that a few men, not exceed- ing perhaps one dozen, can to-day influence the finances of the whole world and can make and unmake even kings and emperors, obliterate frontierSi and change the destinies of the human race.

BIENBTOB OBOBOB 6. VEST. 181

Eilglana in 1815 overthrew Napoleon I., and to do this the younger Pitt plunged the English people into a vortex, as was supposed then by intelligent men, of absolute bankruptcy. Scarcely had the battle smoke cleared from the field of Waterloo and the shattered columns of the old ^uard had been broken in flight, when England, in 1816, went to the gold standard. An enormous debt had been created. To-day the con- sols of Great Britain govern the empire ; all invest- ment, all trust money, all the financial interests of the country are represented by the consols, and the blood of the body politic ebbs and flows with the rise and fall of its consolidated debt.

England went to the gold basis because deeply in- debted to the Rothschilds and others for money which had been employed against the great emperor. In order to float that debt, in order to consolidate it, in order to keep iif hand the finances of that country, a great commercial people, dependent not upon agricul- ture, but upon trade and commerce and finance, it be- came absolutely necessary that they should go to the gold standard in order to please the money-changers of the world.

The policy of the English Empire, aggressive and distinct in aU its features, can be easily understood by the ordinary student of history, not to say of finance. It is the policy of Great Britain to centralize. Her vast colonial system consists of tributaries that pour their wealth into the great lake of England. The home country is first to be considered, and the colonies held by British arms are made tributary to the commercial and financial interests of the English people proper at home.

182 SILVER AND GOLD.

This is the policy of the English government. All its colonies are simply provinces, and the great salient and objective point of all its legislation and policy is to con- centrate wealth and power in the home government and with the home people. Is it any wonder, then, that England is to day and has been since 1816 for the gold standard ? It enables her to command the commerce of the world because gold is the money of commerce Mr. Jefferson declared as the result of his wonderful researches that the money of the American people should be gold and silver. Gold, he said, is the money of commerce, foreign commerce, intercourse between nations and bankers.

The fact that a large value can be put in a small compass, the facility of transportation, the ease of stor- age, all give to gold attributes which no other metal can possibly have ; but is it to be said that silver has not its uses? Silver has always been the money of the people, not of the bankers and capitalists and usurers, but of the common, plain people, as Lincoln termed them, who, in their domestic barter and everyday business at home, do not need this red despot of gold, but silver, with which they and their fathers have always been familiar.

We are told, that overproduction is the cause of the fall of silver in price, that it has not been legislation, but that natural causes, the law of supply and demand have brought silver to its present value in the markets of the world.

Let me ask my friends, the monometallists, one ques- tion. Was there an overproduction of silver in 1873, when it was demonetized in this country by striking the silver dollar from the coinage of .the United States?

SENATOR GEORGE G. VEST. 188

Had there been overcoinage of silver'so as to glut the markets aud bring down its price undec natural rules? We have the authority of the distinguished senator from Ohio [Mr. Sherman], of the secretary of the treasury to-day, Mr. Carlisle, aud of the reports of the treasury department that but eight million of the standard dol- lars had been coined in the United States from 1792 to 1873 : we put but ^8,000,000 in circulation, and not so many, because the reports of the director of the mint from year to year show that the coin of the couutiy goes into industrial pursuits and is used by the jewelers and artificers in precious metals, and a portion of thut $8,000,000 must have been so used. Yet with this in- considerable amount coined by this government from 1792 to 1878, it was deemed necessary in the latter year to strike out the silver dollar from the coinage of the United States.

It makes no difference who demonetized silver in 1873. We have had many explanations. The most plausible was that the standard dollar as it then ex- isted was inconvenient. No other reason which has ever been given, in my opinion, afforded one shadow of excuse for that action.

My point made here now to be answered is, if over- production and overcoinage of silver has caused its present depreciated value, how did the coinage of 8,000,000 standard dollars in 1873 justify or cause the action of congress at that time ?

The two precious metals have fluctuated, as they necessarily must, in all ages of the world ; first silver being produced in excess of gold and then gold in ex* cess of silver. How is it possible that it could be otherwise ? What intelligent man for a moment could

184 BlLVBlt AKt> OOLt>.

advance the idea that two metals, dependent upon the quantity discovered in the bowels of the earth, ahould be mathematically or logically equal at all times in quantity or ratio ?

After Cortez had conquered Mexico and had sent back to Spain the gold which he had taken from Montezuma and his successors, and from the provinces of Mexico, even robbing their temple in order to satisfy Spanish greed, all this treasure which we are accus- tomed to look upon as fabulous, but which in reality amounted to about $80,000,000 a year, failed to affect the markets of the precious metals in the Old World. It was not until a peasant who was bearding a flock of llamas at Potosi, in upper Peru, happened to discover a silver mine of fabulous richness that the price of the two metals was seriously disturbed in the markets of Europe. For many years, as shown by this table, gold was produced in the most insignificant amounts, while silver was produced twenty, thirty, and thirty-two times in excess annually of the production of gold ; yet the price of silver was not affected and it maintained its place as a money metal.

In order to show that my statement is absolutely cor- rect, I have taken the trouble to make a calculation, based upon the Soetbeer table. From 1838 to 1840 there was produced thirty-two times as much silver as gold in the world ; from 1841 to 1850, fifteen times as much; from 1851 to 1855, five times as much: from 1855 to 1860, four times as much; from 1861 to 1865, six times as much ; from 1866 to 1871, three times as much ; from 1871 to 1875, twelve tunes as much; from 1876 to 1880, sixteen times as much ; from 1881 to 1885, twenty times as much ; and from

SfitTATOE 6EOBOE G. VSBT. 1&6

1886 to 1892, from eighteen to twenty-five times as much.

Now, I assert that these tables show, if they are worth the paper upon which they are printed, that the relative proportion of silver to gold has never been as great as it was in the eras I have named here, from 1888 to 1844 and from 1844 to 1850.

We hear upon every side the assertion that the pro- duction of silver which amounted to 974,000,000, ac- cording to the report of the director of the mint, in 1892 in the United States has caused its decline. There were f33,000,000 of gold produced in this country for 1892, the production of silver being about 2 to 1, and it is