Crawfordsville Weekly Journal, Crawfordsville, Montgomery County, 11 February 1898 — Page 7

SUPPLEMENT TO THE

Crawfordsville Journal

fc'ill I) A y, FEBRUARY 4, 1S0S-

Aji Address Hefore Hie Columbia Glut

•t Indianapolis, Ind., Jan. 24, 1S98, by

Kobcrt S. Tuylor. My theme is "The Money Question."

I shall speak of it as a Republican speaking to Republicans upon a subject of patriotic and party duty.

There is imperative necessity that some-thing shall be done in relation to the currency which can be done onily by Republicans. The Bryan Democrats have given notice to the country tha-f the Chicago platform is still good enough for them, while tlie Populists have (old us in a late manifesto by their general committee that it is too good for them. The gold Democrats are remnant of Israel destined, perhaps, to be the seed of a great party to come, Iiut too few in number now to be effective as a separate organization. There is a large body of independent citizens ready to lend aid to the cause Of sound money but they can do nothing except through the Republican party. The crisis is imminent the responsibility is upon us we are summoned to the consideration of great and difficult questions.

I have said that something must be done. Let me make that plain.

We have outstanding, in round numbers. *310.000,000 of Government notes, •which we call greenbacks, and $107,000,(W0, which were issued under the law of 1

SIX) to pay for silver bullion foi

coinage into silver dollars, and are sometimes called Sherman notes, making a tola! of about 150,000,000 of paper payable on demand at the United States treasury. -But this is not all. Wo have -150,000,000 silver dollars which the Government lias promised to keep at par with gold, but which have an actual value of less than fifty cents on the dollar.

We have thus $900,000,000 In round numbers of money In circulation, all put out by the Government under a solemn obligation to preserve its paritj .•with goid. In addition to this we have about .$'.200,000,000 of national ban! notes but as they are redeemable ID greenbacks, or silver dollars, they constitute only an additional superstructure on the same foundation.

The legal standard of value in the United States is gold. The word "dollar" means 25.S grains of standard gold coined at. the mint, or other money oi equal lawful value. All contracts between individuals to pay money mean money which the Government lias issued or authorized with its guaranty of equality in value with gold. Tlie Government can keep that guaranty only by actual payment of Its own obligations in gold on demand. If It does not maintain the gold standard in its transactions the people can not maintain it In theirs. We have thus made the Government the keeper of our consciences and sponsor for our honesty. What means have we placed in its hands for the discharge of that duty?

When our greenbacks were issued they were not payable on demand. The fact of their Issue was a pledge to pay them some time, and the people took them on the faith of that pledge. Provision was made for its performance by the resumption law of 1S75, which directed that on and after Jan. 1, 1S79, they should be paid In coin on demand, and that the Secretary of the Treasury should make such preparation for that payment as he should deem sufficient, giving him authority to Issue and sell bonds if necessary. In order to create a gold reserve for that purpose he sold bonds to the amount of $95,000,000. When the day came the treasury contained $117,000,000 in gold. With the usual inconsistency of human nature, •when the Government was ready to pay gold, few people wanted it. During the following six months less than $8,000,000 in greenbacks was presented for payment and at the end of thai time the gold reserve had risen to $119,000,000. From that time until March, 1893, It was never less than $100,000,000. There is not, and never was, anj express provision of law requiring the keeping of any specified sum in reserve for the redemption of the greenbacks. A section of the law relating to the Is sue of gold certificates directs thai whenever the gold in the treasury falls below $100,000,000 no more gold certify cates shall be issued. Partly from this indirect recognition of that sum as a minimum safe reserve and partly fr«u the views of the treasury officials, an unwritten rule grew up in tlie department t'ha.t the reserve should be maintained at $100,000,000. And for the $34.(5,000,000 of greenbacks which hare been in circulation since 1879 th»

amount was enough, so far as that goes. But we have added to the greenbacks the treasury notes of 1890, amounting now to $107,000,000, and all the silver dollars, swelling the amount resting on the credit of the Government, as stated, to $900,000,000, with no additional reserve, or provision for any.

Meantime the free silver agitation arose, and with it a doubt as to whether the Government would pay its obligations in gold or in silver. Some of those obligations contained no statement as to the kind of money in which they were to be paid, being simply payable In "dollars" and some contained the word "coin." The silver dollars are coin, and they are legal tender, and it would have been within the letter of the law, and would be now, to pay everything with them. The weakened confidence which this situation was found to produce reached an acute and perilous stage in the spring of 1S93.

There has been much discussion as to the cause of the panic which began at that time and as is usually the case when two political parties are trying to put the responsibility for a public disaster on each other, i' has not been entirely fair on either side. It was claimed by the Cleveland Democrats that it was due entirely to the silver legislation of recent years and the continued coinage of silver dollars under the Sherman law and the first effort of 1'resident Cleveland was to secure the repeal, of so much of that law as required the purchase of silver by the Government. On the other hand, it was claimed by some Republicans that the trouble was due wholly to the falling off of revenue resulting from apprehended tariff legislation.

The truth, as usual, was between these extremes. The fundamental trouble was the threatened slump to the silver standard. Silver was continually falling In value, and we were continually coining more and more of It. The Democratic party was plainly drifting toward free silver. The vice-president was on that side. At the same time the diminishing revenue, the probability of radical tariff changes, and the general uncertainty of the situation aggravated the trouble—in fact, constituted the Immediate occasion of it. With a full treasury, an abundant revenue, and no apprehension of unfavorable tariff legislation there would probably have been no break-down at that time.

On the other band, If there had been no money question In the air no threat of a change of standard, or degradation of the quality of our money, a mere deficit of revenue would have produced no panic. No one ever doubted the ability of the Government to pay its debts, or that it would do so in some kind of money. But when it began to look as though the people might become so infatuated with the idea of cheap money as to go to free silver, the foundation of confidence broke down. The deficit of revenue precipitated the crisis because it was rapidly bringing the treasury to the point where it would be unable to continue redemption in gold of the Government's notes. But it was only a question of time. We could not have gone on in that course long without a crash with ever so much revenue.

The repeal of the compulsory purchasing clause of the Sherman law, the repulse of the free silver assault, the election of President McKinley, the passage of the Dingley tariff and the good crops and prices of 1S97 have restored a measure of confidence and prosperity. But so far as the law and the powers of the Government in reference to its obligations and our money are concerned, we are exactly where we were in 1893. save only that we have repealed that part of the law of 1890 which peremptorily directed the purchase of silver.

There Is nothing in the law to compel the Secretary of the Treasury to stop coining silver dollars. There Is nothing to compel htm to pay the greenbacks or bonds in gold. He may pay silver if he chooses. There is no law requiring any one to pay gold into the treasury, or any gold reserve to be maintained. Tlie general expenses of the Government and the redemption of its demand notes all come out of the same general balance In the treasury. If there happens to be enough for both, well and good if not, the greenbacks ^ave to take the chances. We are in the situation of a man running a store and a bank at the same time, with no provision for payment of his circulating uoles except the contents of his cash drawer from day to day.

More than all, the law still requires that the redeemed greenbacks shall not be cancelled, but paid out again, to come back for redemption over and over, as often as the holders see fit to bring them. We have In fact, since 1S79, redeemed our whole greenback circulation once, and almost half of it

twice. We have paid $507,000,000 of our notes in gold, and they are all outstanding yet, except the few that happen to be in the treasury from day to day.

Such a situation is dangerous. Our ship of state floats to-day with her priceless freightage of human life and interests as though she were staunch and strong from stem to stern and all seems to go well. But under the water line she has a great hole in her hull covered only with canvas. If it should give way, what?

THE ST. LOUIS PLATFORM.

The Republican party in convention at St. Louis in 189(5 gave two great pledges to the country. One of these was to pass a tariff law which would afford adequate protection to American industry, and adequate revenue for the needs of the Government. The enactment of the Dingley bill was a prompt performance of that pledge. Its sufficiency in the matter of revenue is yet to pass a final test but we have reason to believe that it will be as successful in that respect as it has been in kindling anew the dead fires of industry.

The other was in these words: "The Republican party is unreservedly for sound money. It caused the enactment of the law providing for the resumption of specie payments In 1S79. Since then every dollar has been as good as gold. We are unalterably opposed to every measure calculated to debase our currency or impair the credit of our country. We are therefore opposed to the free coinage of silver, except by international agreement with the leading commercial nations of the world, which we pledge ourselves to promote and until such agreement can be obtained the existing gold standard must be preserved. All our silver and paper currency must be maintained at parity with gold, and we favor all measures designed to maintain inviolably the obligations of the United States and all our money, whether coin or paper, at the present standard, the standard of the most enlightened nations of the earth."

It was wise to take up these subjects separately for legislation, and to deal with the tariff first. But the subject of the currency Is no less Important, and our duty to act in regard to It, now that the tariff has been disposed of, Is no less imperative. A party that is too cowardly or indifferent to put Its platform on the statute book when the people have placed it in power, or use its best efforts to do so, does not deserve to stay in power and will not stay very long.

That part of the money plank of our platform which relates to international free coinage of silver has been performed promptly and faithfully, as President McKinley performs every duty which the people lay upon him. Among the first acts of his administration was the appointment of three distinguished citizens—Senator E. O. Wolcott of Colorado, ex-Vice President Stevenson of Illinois, and Gen. C. J. Paine of Boston, commissioners to go abroad and confer with the governments of the European nations and ascertain whether th^y would unite with us in an international conference having for Its purpose the establishment of a system of free silver coinage upon a common and agreed ratio. No abler men could have been found for that mission. They accepted it, went to Europe, used their best endeavors, but failed to accomplish anything.

Not only this, but the situation has changed so rapidly since the date of the St. Louis convention that the establishment of a double standard by international agroment has become, as I believe, Impossible. In the few months that have elapsed since that time silver lias fallen over fifteen per cent. The real value of our silver dollars was then about 52 cents now It Is about 44. And yet it pays to mine silver. The course of price and production since 1890 has been as follows:

World'6 pro-

Market value, duction,

Year. per ounce. ounces. 189 0 $1 04 120,000.000 1891 98 137,000,000 1892 87 153,000,000 1893 78 106,000.000 1894 63 107,000,000 1895 65 174,000,000

The price has fallen and the output has Increased. I have no exact data of production since 1805 but the price Is still falling and the production still Increasing.

In view of this maintenance of production, notwithstanding the decline In price, how much do you think would be mined If all the nations of the earth should agree to give it free coinage at 111 to 1, which Is equivalent to $1.29 per ounce? IIow much wheat do you think would be raised if there were a guaranteed market for It without limit at $2.50 a bushel?

Of course, it is not to be said that things would work in just that way. No one knows exactly how they would

work. There would be such an upsetting ot ralues tjhat It Is beyond human ken to foresee how they would finally re-arrange themselves. But we do know that It would give a great stimulus to the production of silver and Increase the quantity of it enormously. For a hundred years prior to the middle of the present century the relative values of silver and gold were rarely exactly 10 to 1 by weight, but never very far from It. If that were the situation now, and wfe had good reason to believe that the quantities of these metals stored In the earth and tlie cost of getting them out would continue to be such that we could regard that approximate relation of value as a permanent one, there would be reasonable safety in international free coinage. But the contrary Is the fact, not only In regard to the present ratio of value, but In regard to the future, so far as we can forecast it. There is every reason to believe that the ratio of real value between silver and gold never will be 16 to 1 again, or anything like It. The world's governments are very powerful, but they cannot work miracles, either singly or combined. They cannot create an equality of valuo which does not exist In fact. They could adopt an International double standard upon any ratio they might agree on, but they ought not to do It unless It would bo a good one. And It would not be a good one unless It rested upon a relation of value between the two metals composing It which was substantially true and substantially stable. An attempt to found such a standard now upon silver and gold at 10 to 1 would be a simple defiance of all the laws of trade and would be bound to fail in the end.

Of course, there might be international free coinage at some other ratio —one which would approximate the truth for the time being but the difficulties In that direction are scarcely less than in the other. One of these Is, that the selection of any such ratio would be a leap In the dark. So many discoveries are being made of silver aud gold deposits and so many Improvements in machinery and processes for treating them, that it Is Impossible to foresee the future relation of the metals with any assurance of certainty whatever.

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If it should be proposed to act upon the only certain knowledge we have, and adopt the present market ratio we would meet several serious difficulties. In the first place, It would outrage the sensibilities of our free silver friends more violently than the crime of '73. Sixteen to one Is the sacred symbol of tneir sect. Senator Wolcott did, Indeed, give It out abroad that, for the sake of harmony, he might accept 15V6 to 1 but 35 to 1 would be spurned at the mention.

In the next place, to call In and recoin the world's silver at 35 to 1, or thereabouts, would Involve a sacrifice of more than $2,000,000,000 besides the expense of recolnage, with no assurance when It had been done that the new ratio would hold good for twenty years. No one would agree to that.

Finally fre^ coinage on any such ratio as that of present market values would give us a silver coin so bulky and heavy that the people would not use it. They will not use the ones we have except to a limited extent. It is the practice of the Government to pay express charges on silver coin from the sub-treasuries to any part of the country where It is wanted. But even by that process it is impossible to force it Into circulation beyond a certain point. During the year ending June 30, 1S97, the Government paid out $72,500,000 In silver, of which $41,C00,000 was shipped by express, prepaid, at a cost to the Government of $81,500. During the same year $73,200,000 in silver coin came back to the treasury at the expense of the senders leaving $700,000 less In circulation at the end of the year than there was at the beginning. The Government has paid over a million dollars in express charges on silver sent out without any Increase In the amount In circulation for eleven years past. What then do you think the people would do with silver dollars twice as large as our present onus, and other coins in proportion?

For many years I hoped to see the vexed question of the standard settled by international free coinage. But I have given up that hope. If it was ever possible it is so no longer. Our Government has done all that It can for silver, both at home and abroad. We began buying and coining silver dollars under the Bland bill In 1878—twenty years ago—at the rate of $2,000,000 a mouth. Sliver bullion was then worth $1.15 ari ounce, making the real value of the silver dollar 89 cents. We hoped that by thus enlarging the use of

silver we could so increase Its market value as to bring It back to par with

gold at our legal ratio of 1(5 to 1 which Is equivalent to $1.29 per ounce. But the experiment failed. For twelve years we continued to coin $2,000,000 a month, and yet the decline went on, until the price stood at 93 cents per ounce In 188S-9. At that rate our sliver dollar was worth only 72 cents. But we did not give it up even then. On the contrary we determined to make a greater effort. By the Sherman bill the Secretary of the Treasury was directed to buy 4,500,000 ounces a month—an amount equal to the entire estimated output of our mines. Again the experiment failed. There was a little spurt of upward movement and then a steady and rapid decline, reaching 78 cents In 1S93 which gave us a silver dollar worth 60 cents. At that point we gave up the experiment, repealed the purchasing clause of the Sherman law and quit buying silver. And it Is well that we did, for it lias fallen way down since. The last quotation I have seen was 58 cents, which would give us a dollar worth 44 cents. Since 1878 we have spent $4(5-1,000.000 in the purchase of silver, whlcu would sell now for $2(56,000,000. We have thus sunk $198,000,000 In trying to hold up the price of silver, and have failed In the attempt.

In addition to this we have used our utmost efforts to induce other nations of the world to unite with us in some arrangement on the subject. An international conference ea'led by us was held In Paris In 1878, another at the same place In 1881, and another at Brussels In 1892. In all these we have used our utmost efforts to bring about some amicable International agreement upon which free coinage would be possible, but without success. And finally, within a few months past we have made a renewed effort to reopen the subject only to fail to receive encouragement enough to warrant even the calling of a couference.'

The time has come to put that dream behind us. The settled judgment of mankind Is against any double standard. The world's standard Is gold. If we wish to keep pace with the march of its civilization we must maintain that standard. And If we are to have the benefit of It to the full we must make It the real standard, remove all doubt of Its perpetuity and square our whole monetary system to it.

It Is only thus that we can keep the promise of our platform. It Is only thus that we can, In the language of that platform, "maintain Inviolably the obligations of the United States" and keep "all our money, whether coin or paper, at the present standard, the standard of the most enlightened nations of the earth."

Our monetary system, the defects in It and the best remedies therefor are subjects which have engaged the attention of many able men, and numerous schemes for Improvement have been proposed. It is possible to occupy only a small part of so great a field In a single address, and I shall confine myself chiefly to the plan which has come before tlie country In the report of the Monetary Commission promulgated under the auspices of the Indianapolis Monetary Convention. What I 6hall say further will be mainly In explanation of that plan, not as the only one that will serve, but as one following sound general principles, and practicable aud workable in Its details.

HISTORY OF THE MOVEMENT. The Indianapolis convention originated in an Invitation sent out by the Indianapolis Board of Trade shortly after the last election to members of similar bodies In a number of west era cities to meet in conference with reference to the financial situation of tlie country. The conference was held, and resulted In the calling of a general convention of delegates from commercial bodies throughout the United Suites, which assembled In Indianapolis on Jan. 12, 1897, and was In session two days. The convention adopted a brief statemerot of principles and appointed an executive committee, which It Instructed to proceed to Washington at the opening of the then anticipated special session of Congress, and endeavor to procure the passage of a law authorizing the appointment of a monetary commission by the President. The suggestion was favorably received by the President and the Republican Senators and Representatives, but it was considered best not to take up tho subject until after the passage of a tariff bill. As soon as that had been done a bill providing for the creation of a commission was passed In the House, It was not acted on in the Senate The I committee of the Indianapolis convention, In pursuance of the instructions under which it was proceeding, then appointed an unolliclal commission of eleven members. This commission met at Washington. Sept. 23, 1S97, and on

Dec. 17 following submitted Its report to the committee by whom it had been appointed. That report was given L« the public by the committee through the press and the plan set forth la

has been embodied In bill which has been Introduced by your own Representative, Mr. Overstreet, and Is now pending In Congress. The committee nas also issued a call to the convention to reassemble at Indianapolis to consider what further action should be taken In the premises.

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The subject is nw ripe for discussion. The limine (.'ommitte on Banking and Currency hus before it several bills prepared by its own members, alse a bill prepared in the office of the Secretary of the Treasury, and a bill covering the plan recommended by the Monetary Commission. I am not proposing to discuss the comparative merits of these various measures. The occasion will permit only a general view of the subject and I can present such a view more Intelligibly, I think, by reference to the plan proposed by th* Monetary Commission than in any other way.

THE PLAN.

Of this I may say, first, that the plan is Intended to be a complete one that Is, one which, If embodied In the law, would work out, step by step, a gradual reformation of our currency, and give us in the course of ten years a system as perfect as can be devised In the present state of our knowledge. And this it would do by a process so smooth and easy that no one, would discover from any Jar or disturlvauce In bust new affairs that any change was going on.

The first step proposed In this plan Is a simple declaration by law that all the obligations of the Government now existing or hereafter contracted shall be payable In gold unless otherwise expressed.

The reason for such a declaration Is this: By the law as It Is to-day the standard money of the United States Is gold. The Government lias solemnly pledged Its faith that all the money In circulation shall be equal to gold in value. The obligations of the Government (not Including gold certificates, silver certificates and currency certificates, all of which are mere deposit receipts, redeemable In kind) are payable simply In "dollars," as Is the case with the greenbacks, or In "coin," as Is tlie case with the treasury notes of 1890, and most of the bonds. At the same time the silver dollar Is by law a legal tender for all dues, public and private.

Hence, according to one part of the law the treasurer of the United State* would be entitled to pay the bonds, greenbacks and Sherman notes In sdlver while by another part of the law the Government has given Its promise that the silver dollars aud all other money Issued by it shall be kept at par with gold. The free silver advocates are Insisting that the Government shall take advantage of one part of the law aud pay Its debts In silver, and then disregard the other part of the law. Six million voters endorsed that policy at the last election. Such a course would be a flat repudiation of Its obligations by the Government. There Is neither moral nor legal difference between the repudiation of 56 per cent of a debt and the repudiation of all of it.

Inasmuch as the Government Issues all our money Itself except the bank notes, and they are redeemable in money Issued by the Government, the value of the money in which we must pay our Individual obligations Is conI trolled by the action of the Governmeut. A greenback Is worth what the treasurer of the United States will give me for It aud not a cent more. The rnoI nieut lie refuses to give me anything but sliver for It, it Is worth Its face

In silver, and no more. The moment he does that all the money in the UnitI ed States except the gold will drop to a silver value, and all business will be on a silver basis and we will all become repudiators whether we will or no. IJn-

der the law as It stands William McKinley and Lyman J. (iage could put us

In that hole to-niorrow b,v four words. All they would need to do would be to say to Assistant Treasurer Jordan at New York: "Pay greenbacks I in silver."

These contradictory provisions of the law are Impairing our credit, and costing us more money than we know. In February, 1895, the Government bought 3.500,000 ounces of gold coin—equivalent to $(2,315,400, for the protection of the gold reserve. By the terms of the purchase the Government had an option to make the bonds pa pa hie in "gold coin" at 3 per cent Interest or In "coin," simply, at 4 per cent Interest The President applied to Congress, which was then In session, for authority to make the bonds payable In gold coin, but that body declined to give the authority, and the bonds were Issued at 4 per cent. We made cash loss by I that transaction of $539,000 per annum

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In interest for thirty years, or a grand I total of over $16,000,000. At the same time the refusal of Congress to authorize the Issue of bonds specifically payable in gold was not altogether without reason. The outstanding bonds are mostly payable In "coin." The question whether they will be paid in gold coin or silver coin is a very serious one. Aud the Issue of a new set of bonds payable specifically in gold coin might be the foundation of an argument—though not a good one. in my opinion, that the bonds pay* able In "coin" might be paid In silver,

All this uiwertaittty would be remov-

ed by an explicit declaration in the law that all the obligations of the Government, past and future, are and shall be payable 1b gold, unless otherwise provided In the contract. The Government has treated them as so payable