Democratic Sentinel, Volume 1, Number 30, Rensselaer, Jasper County, 7 September 1877 — SILVER. [ARTICLE]

SILVER.

Letter from Thurlow Weed in Favor of Its Remonetization. Paper Money as Indispensable as Gold or Silver. To the Editor of the New York Tribune .- The law of 1873 demonetizing silver was quietly but skillfully worked through Congress. The purpose and effect were not understood by ope out of five of the members who voted for it. Nor, intil this discussion commenced, was the existence of such a law known to any considerable number of our citizens. It was passed simply to promote the interests of the bondholders, usurers and speculators in gold. Its effect has been to cripple industry and oppress labcr. There seems in the minds of the advocates of the gold standard but one interest entitled to public consideration. Everything must yield to the bondholders. No matter what amount of loss or suffering reaches other interests and other classes, the bondholder must be protected. The bondholders are not only wards of the Government, but enjoy the sympathy of the press. Every other department and branch of business may suffer. Labor may seek in vain for employment, but the bondholder must have his interest in gold, which he immediately converts into greenbacks at a premium. The vigilance of the Government and the press in the defense of the bondholders suggests an inquiry which is certainly pertinent, and may possibly prove useful. Foreign capitalists naturally took advantage of our necessities during the Rebellion to purchase our bonds at a low figure.

In November, 1862, gold sold at 131 In December, 1862, sold sold at 131 In January, 1863, gold brought.... 148 In February, 1863, gold brought 165 In March, 1863., goldbrought .160 In April, 1863, gold brought 153 In May, 1863, gold brought ..147 In June, 1863, gold brought 146 In July, 1863, gold brought - , 135 In August, 1863, goldbrought 126 In September, 1863, gold brought ....135 In October. 1863, gold brought 148 In November, 1863, gold brought 148 In December, 1863, gold brought .150 In January, 1864, gold brought 155 In February, 1864. gold brought 158 In March, 1864, goldbrought 164 In April, 1864, gold brought 174 In May, 1864, gold brought, 182 In June, 1864, gold brought. 220 In July, 1864, gold brought 240 In August, 1864, gold brought 2">4 In September, 1864, gold brought 220 In October, 1864, gold brought 210 In November, 1864, gold brought 240 In December, 1864, gold brought 230 In 1865, 1866, 1867, and 1868 the premium on gold averaged 170. It was during these years of depression, when the fabulous premiums on gold opened the purse-strings of usurers, that American securities found purchasers in Europe. Our bonds, therefore, were purchased in Europe during those years at prices alternating between 30 and 50 c .nts on the dollar. Simultaneously our own citizens were subscribing for the 5-20 loan at par. paying for their bonds in greenbacks. Subsequently these bonds, the interest and principal payable in coin, rose in value to the coin standard, changing in value as the premium on gold changed ; never, however, until recently, falling below 12 per cent. For twelve or more years, therefore, the foreign bondholder has been receiving 6 per cent, annually in gold on every SI,OOO bond, for which he paid somewhere between S3OO and $500; while the American bondholders, receiving their 6 per cent, interest semi-annually in gold, immediately converted their gold into greenbacks at a premium of from 12 to 20 per cent. In a season of financial embarrassment Government stocks fell considerably below par. Our banks, trust companies, savings institutions, and capitalists availed themselves of that opportunity to invest largely—realizing, a year or two afterward, besides their gold interest, from 25 to 30 per cent, profit. The stock of one of our city banks rose a full 100 per cent, in consequence of the money made by that institution by its large and lucky purchases of Government 6s. So far, therefore, both the foreign and American bondholders have been munificently rewarded.

But this is not all. The bondholders have had a “good thing’ , in the way of “usance.” I have not been able to learn what proportion of our national debt is held by Americans. If we assume the amount thus held to be $1,000,000,000, and that the gold interest has, during the last twelve years, averaged 9 per cent., the bondholders who promptly convert their gold interest into greenbacks have pocketed the handsome sum of $5,400,000 annually, making, in twelve years, $64,800,000. The foreign bondholder who reinvested his gold interest in American securities was correspondingly benefited. In view of these facts, will it be said that we are dealing dishonestly, inequitably or illiberally with the Government bondholders by maintaining that they should be paid in exact accordance with the terms upon which they loaned the Government their money? Nor should it be forgotten that, during these weary twelve years of financial derangement, capital, which “toils not,” has been Squeezing these gold premiums out of labor. lies, while capital “fares sumptuously every day,” millions of laborers have sweat upon land and sea to appease a class whose ceaseless cry is, Give ! give ! These onerous and remorseless gold premiums, in the memorable language of President Jackson, make the rich richer and the poor poorer. Until 1840 the United States produced little or no silver. In 1846, in the infancy of our mines, their product was estimated at X 1,864 sterling. Thenceforward the developments were rapid and rich; so much so, that in 1873 the United States was the largest silver-producing country in the world, as will be seen by the following estimates : United Statess36,soo,ooo Mexico. 25,000,000 Central an I South America.. ..i 8,ii00,000 German empire 3,000,000 France 2,000.000 SpainX. 2.000,000 Austro-Huugarian monarchy...'. 1,600,000 Great Britain and colonies 1,000,000 Canada 900,000 Italy (Sardinia) 500,000 Prussia 500,000 Sweden ard Norway 250,000 Total. $76,250,000 And then the one-standard agitation commenced. While for two centuries neither silver nor gold was produced in our country, we gratefully accepted both from abroad. The mineral wealth of California was developed immediately after that Territory was ceded to the United States. The acquisition of that Territory with the immediate discovery of its treasures, was alike seasonable and auspicious. It seemed as if this vast deposit of gold and silver had been providentially reserved until it was most needed, and then so dispensed as to promote the prosperity and happiness of the American people. But now, because Latin Governments have discovered that a double standard is inconvenient, shall we voluntarily impoverish ourselves by rejecting a boon which has been so long held precious throughout the world? The idea that silver should cease'to be a standard because our mines are too productive, is unsound. Silver has various other uses. There is an unlimited demand for it. It enters largely into the domestic requirements of civilized society. It constitutes a large proportion of the decorative habits and tastes of the world. In ancient times it was so abundant that Polybius says the tiles upon the roof of the temple at Ecbatana were of solid silver, and the beams and pillars of the temple were covered with plates of silver and gold. Not then, or in the days of King Solomon, when it is said to have been still more plentiful, did silver c ease to be a standard. It was reserved for an American Congress to pass a law demonetizing silver, and for the American press to maintain that the payment of our national debt upon the terms agreed to between the borrower an<J lender is “repudiation.” I alluded in a former letter to the fact that gold as a medium of currency has no international character; that even between England and France, divided only by a narrow channel, there is no oommon gold standard. The English and the French gold coins bear the “superscription” of their respective sovereigns, and are restricted in their circulation to their respective countries. English gold coins that come to New York when the balance of trade is in our favor go not into circulation, but remain temporarily, or go to the mint for recoinage. Nor do any of the American gold eagles or half-eagles, exported to England or France, enter into the circulation of those countries. Until the Latin Governments capriciously demanded a single standard, silver coin enjoyed an international character. The Spanjsh and Mexican dollars formed ?•

part of the circulating medium of England, Europe and America, and were almost exclusively the currency of India, China and Japan. But now, without any public necessity or for any reason affecting the rights of nations or the welfare of peoples, we are arbitrarily required to discard a monetary standard with which the whole world is familiar, and which has furnished facilities for conducting the various business intere-ts of all the nations of the earth with conven enc* and safety for more than twenty centuries. And, as I have before stated, the grounds upon which thi < demand is made, shipped of verbiage, are: First, that a double standard is inconvenient; and, second, that America is too rich in silver. Will it be seriously urged that these objections are sufficient to beguile us into a betrayal of vital interests—interests protected by our constitution and laws? The embarrassing and mortifying circumstance is, that the pressure comes not so much from abroad as from ourselves. In 1873, Congress, with a very imperfect understanding of the question, passed a law demonetizing silver. And now, with a better kn aw ledge of our duty and interests,/ when th'* repeal of that law is demanded. veheJ ment and denunciatory opposition is made by the leading and most influential journals of our city! The advocates of a constitutional currency incur the same reproaches and epithets applied to those who are avowedly in favor of an irredeemable paper currency. For insisting upon the payinc nt of the public debt in the precise currency ‘’nominated in th* bond,” wo are flippantly stigmatized repudiators. This gratuitous imputation will lose its power as soon as silver is restored to its proper use. Both gold and silver were valueless as money until thev were made “ precious ”by Governments. The mints, under the direction of Congress, can make the gold and silver dollar of equal intrinsic value. With all the artificial disadvantages under which silver labors, its relative value to gold is constantly approximating. The immediate effect of its remonetization will be to restore the equilibrium that had existed for centuries. Among other devices against silver, it is said that its remonetization will so seriously affect our credit abroad that foreigners will .end our bonds home. It i- to b hoped they will do so. We shall be ready to take all they will send. American capital now seeking investment at 3. 4 and 5 per cent, would gladly invest their millions in Government 6’s at par. We have lived through sixteen eventful years. The magnitude of our civil war is without a parallel. * * * Paper money is as indispensable as gold or silver. Indeed, we are far more largely indebted to “rags,” as it is now the fashion to characterize bank notes, for our national prosperity, than silver or gold. In its most depreciated condition, paper money subsisted our forefathers during the Revolutionary war. Paper money carried our country through the war with England in 1812. Paper money preserved our Government and Union. Without paper money from 1776 to 1876 we should have made a poor show at the Philadelphia Centennial. With a metallic currency our progress would have been very tardy. The forests would not have disappeared, nor would the villages and cities have grown up with unprecedented rapidity. All our own interests, all our industries, and all our institutions have been cherished, sustained and protected by the use of paper money. With nothing but “hard money” from the landing of the Pilgrims, we should have had nothing but hard times. Paper, as the representative of silver and gold, was enabled to work out enlightened and munificent enterprises and object* conferring wealth and happiness on our people, and imparting strength to our Government! While, therefore, paper is convertible at all times and places into coin, bank notes are just as valuable as the precious metals. The great purpose and object of resumption is not so much to bring gold into circulation as to restore to the bank notes their convertible character. Gold is passive ; paper active. Gold works out its mission in vaults and coffers ; paper courses like blood through the veins and arteries of business, from the extremities to the heart of the nation, imparting strength, vigor, and health to the, whole

body.

T. W.