Democratic Sentinel, Volume 10, Number 1, Rensselaer, Jasper County, 5 February 1886 — SILVER COINAGE. [ARTICLE]

SILVER COINAGE.

Speech of Hon. James L. Pugh, of Alabama, Delfrered in the Senate of the United States Jan. 11, 1886. The Senate having nnder consideration the resolution submitted by Mr. Beck, Dec. 18, 1885, relative to the i avinent of customs dues in coin and the execution of the laws relating thereto, Mr. Pugh said: In the examination and discussion of the troublesome questions of finance the opinions, arguments, and conclusions of others should be weighed according to their real merit; and to ascertain how much they are worth we should scrutinize the moiiv'es, capacity, experience, practical knowledge, integrity, and disinterestedness of the authors. Is it a fact that those who take part m the discussion of financial questions and make arguments and express opinions to influence legislation belong to the creditor or the debtor class, or are they producers or capitalists ? The people understand that ■£aoß6 who supply money and those who use it are widely separated in intere'st. Capitalists and creditors own United States bonds and national banks, and these banks issue paper money on these bonds and aid iu making the volume of our circulating medium. Capitalists and creditors mostly own the deposits and use the checks on banks and clearing houses. Farmers, laborers, mechanics, artisans, and manufacturers own commodities made up of cotton, wool, and other raw material, and wheat, com, meat, animals, muscle, and brain. These commodities and humap agencies bring money, and the amount depends upon the supply and the demand for them and very largely upon the quantity of money in circulation. If there is a sufficient suj)ply of money, the demand for commodities will ho greater and the price highor. Too little money will always buy more commodities, whether the sujjply be great or small. It is manifestly to the interest of those who have idle money, or money to invest, to make its purchasing power as great as possible. The smallest volume of money will buy more labor, productions, and property than a larger volume. Hence money-holders generally favor contraction of the currency, and commod-ity-holders favor a volume of circulation that comes up to the point where equality is found between the supply of money and commodities. “The quantity ot necessary, useful, or gratifying products is the nfeasure of wealth, and money is the first measure of commerce and exchange and the standard by which, contracts are fulfilled.” And what has become of Gresham’s law that the cheaper would drive out the better dollar, that Bilver would supplant all the par currency and occupy the whole field cf circulation, when the fact reported by the Treasury officials is that the people do not want silver, will not take it, and the Treasury is overloaded with unused and idle silver dollars ? But how gratifying the admission in the last Treasury reports that the 1215,000,000 of silver, the frqit of the Bland bill, that was to spread poison in every direction and produce such dire consequences, can be made as good as gold and absorbed by the peojile in our circulating medium if we will be so good as to suspend further coinage. What a grim satire upon the financial sagacity of our present Instructors in the science of political economy 1 Is it not a great triumph of the'Bland bill that its enemies are compelled to admit that our silver currency has been increased 5215,000,000 without driving out a dollar of gold or depreciating Federal bonds, and that all this silver can be utilized in circulation if we will he wise enough to stop the silver mint. As these financiers have shown themselves mistaken seven years ago, it is not impossible that they are now mistaken in their opiilions and predictions. One request I make, and that is for the Federal Treasury and national banks to stand aside and allow Gresham’s law to have full and free operation on silver currency. There is a most important difference between gold and silver coin and paper currency that is hoarded by individuals or lying in the vaults of banks, and gold and silver and paper currency that is in actual active circulation among the people. It is very material that we approximate as near as practicable what amount of coin and paper is required by our people for active use among themselves to make our trade and commerce prosperous on a reasonably permanent basis. We should never lose sight of tha important fact that our entire volume of currency, whether gold, silver, or paper, circulates only among ourselves in the United States. Not a dollar of our gold, silver, or paper circulates or has any purchasing power as maney in any other country in the world. All our gold and silver coin is nothing but Million whan it leaves this country, and is marketable by the pound, just as beef and iron. Remember, then, when we talk about gold and silver and paper as money we only me am and must necessarily mean, that which is Hade money by a law of Congress and the si amp of the Government. Where is the necessity for legislation? President Cleveland and Secretary Manning have communicated to Congress the information that our volume of circulation is made up of an incongruous, contlicting, and irreconcilable mass of paper and coin—national-bank notes, legaltender greenbacks, gold and silver coin. These high officials, in discharging their solemn duty according to their honest convictions, have recommended to Congress in substance that the legal-tender greenbacks be redeemed and retired from circulation, that no more coin certificates he issued, and that the coinage of silver he suspended. The same information and the same recommendations were made by President Arthur and his Secretary of the Treasury in two annual messages to Congress, and I remember no Republican in either house who was bold enough to introduce a bill to carry out either of theae recommendations.

Mr. President, I have thus presented to the Senate and the country the controlling influence of banks and bankers in deciding the most intricate and far-re: ch ng question of modern times. The new factors of checks and clearings as substitutes for money had their origin in the war on silver in Europe and America, and these bank implements are and have been the most formidable and destructive with which the friends of silver have had to contend. Checks and clearing-houses have concentrated in banks and bankers, irresistible power in interstate and international trade and commerce, and their mighty influence and agencies in all industrial pursuits connect them necessarily and inseparably with any financial system in any country and make them potential in deciding the volume, character, and regulation of all currency. See what mighty power banks and bankers possess in determining what amount of money the people shall have in their trade and commerce ; when and to what extent the volume of oireulat on shall be expanded or contracted ; Whether coin or paper money shall circulate, and in what proportion. Look at the facts and figures I have furnished to prove how this vast power has been exercised. It is useless to tell the people that the banks and bankers will not use their power to promote their own interest. The people fully understand that checks and clearing-houses dispense with the use of money by banks and bankers in their dealings with •each other, and make tho volume of coin or paper currency in actual circulation a matter of comparatively indifferent interest to them. But it is not eo with the people in their trade and commerce with each other. The peoplo have no clearing-houses and but few deposits, and with thorn checks are a useless substitute for money.

President Cleveland and Secretary Manning *nd those who urge Congress to repeal and amend our coinage and currency laws have failed to state a single fact or a single cause originating, existing, and operating anywhere in the United States that has produced or can produce any unsoundness or disarrangement in our currency, or justify any change in our financial legislation in accordance with their recommendations. Every fact and every cause upon which they base their predictions of trouble and express the opinion that serious disorder in our currency and ruinous effects upon our trade and industrial pursuits are impending and threatening are foreign in their origin and existence. Congress is confronted with the highest •official announcement that the United States have reached a crisis in their marvelous development and in their industrial growth and commercial relations that can be met and relieved ■only by concurrent action between our Government and the governments of England, Prance, and Germany, resulting in an agreement by which there shall be but one standard of value in each and all these countries, and that when such an international standard is thus established our entire home currency must be made to conform to it in equivalency and convertibility.

What are the foreign facts stated by Secretary Manning as being so potential and disastrous in their effects upon American conditions and welfare ? 1. That, except for petty domestic nses, silver coinage has been suspended and silver disused as a legal-tender currency in England, Germany, and all the nations composing the Latin Union, and gold made the only standard of value. 2. That each suspension and disuse of silver as money of account and contract by leading European nations with whom we carry on nearly all our foreign commerce “ha 9 made that metal of unstable and falling value," and reduced the price of silver in our 'standard .dollar from 100 cents to 80 cent s in the bullion market of London. From the existence of these two facts in Europe the conclusion is drawn that their necessary and unavoidable effect on American currency and commerce will be destructive mor.ally, politically, materially, and generally. It is not stated ’ with any confidence by the President, the Secretary, or any who agree with them that there is any ground for hope that the Government of the United States will be joined or aided by any leading Government in Europe in preserving silver as an equal with gold in the monetary unit of value to be employed by the parties to such union in their trade and commerce with each other. It is, therefore, useless to blink the issue. The question for Congress to decide is whether the silver-coinage act of 1878 shall be repealed and the coinage of silver thereby forever terminated in the United States. It is a reflection on the common sense of the people and those who represent them in Congress in opposing such repeal to attempt to delude them by the use of terms. Suspension of silver coinage means and is intended deliberately to havo the effect of putting an end to silver except for pocket change and petty home uses on the same basis it occupies in Europe. Is this Senate ready for such action, involving as it does the most momentous consequences ? It may be presumption in me to say it, but I am too full of the conviction to retain it, that if the coinage of silver is suspended it will be a step that never can be retrieved, and will lead directly and speedily to the consummation of a thoroughly organized conspiracy of the capitalists who own Federal bonds and national banks and two-thirds of the gold in this country to secure absolute control of all the currency in use by the people, as a measure of value, the regulation of its volume, and its consequent purchasing power over labor, property, and all commodities. To the capitalists who are parties to this conspiracy no such prize ever enlisted the energies of man. No wonder those who stand in the track of their endeavor are denounced as fools, fanatics, demagogues, unworthy of public attention and confidence. “The bankers, bondholders, and business clasßes,”we are told, possess all the ability, learning, and experience on money questions, and they alone are qualified to decide what shall be money, how much of it the people need, and what shall be the price of labor, productions, and property. Secretary Manning informs us that what he has recommended as “currency reform” “is much more than the deliberate judgment of the Secretary of the Treasury. * * * It is attested to him from the centers of trade in all parts of the country, as much from the South as the North, as much from the West as the East. * * * Not alone our able statesmen and instructed economists and financiers advise the stopping of the silver coinage now, but whereever our fellow-citizens are concentrated in commercial cities and towns the business classes engaged in the trade, the enterprises, and manufactures of those centers, and the still larger classes of workingmen employed by them urge the stopping of the silver coinage now.” The Secretary further “respectfully submits that there is no compensation for the risk of a continued coinage of silver, and that a judgment so accordant of the great business classes who carry on the exchanges of the country must be accepted as a final estimate of that risk.” Who are “the great business classes who carry on the exchanges of the country ?” The report of the Comptroller of the Treasury, from which I have quoted, proves that they are the hankers and bondholders who carry on the exchanges of 97 per cent, of the entire trade and commerce of this country, and that three-fifths of the whole passes through the bauks and clearing houses of New York. The Comptroller’s report further shows that most of the banks in the United States, numbering 2,727 national banks and over 4,000 other banks, and most of the other “great business classes who carry on exchanges" in all the great business centers in Northern, Southern, Eastern, and Western cities and towns, are bound to New York and her banks and clearing house with hooks of steel. These are the great business classes who are the final arbiters and whose decision of the question whether the coinage of silver shall be suspended “must be accepted as final” without appeal or question. There is but one fact the enemies of silver parade conspicuously to the front, and, like Day & Martin’s blacking, it is always on hand, and that is, that the 41212 grains of silver that the Government makes a legal tender for a dollar is worth only 80 cents ; that as American coin in American markets it is made a compulsory dollar, and in the London market (England) the same amount of silver is really worth only 80 cents or less. Banks and hankers, their directors and stockholders, and their subsidized press and other representatives, all able and experienced financiers (?), are greatly distressed that the poor farmer has to sell the fruits of his toil for 100 cents in a dollar’s worth, and is compelled to accept only 80 cents in payment, and that the brown-fisted laborer afid weeping widow and needy orphan have to take for their hard earnings and small incomes 80 cents when their employers and debtors honestly owe them 100 cents. I undertake to say that the poor farmers and laborers and widows and orphans never had any idea how they were being robbed or how much they had been wronged by the use of this vile thing called silver until they read a description of their sufferings by their guardians in the official reports and the New York and Boston newspapers or other newspapers established, edited, and supported by the officials and stockholders in national banks or by caintalists interested in destroying silver as a part of our coin currency. The President and Secretary admit that the fate of silver, beyond its use by our own people as pocket change to the extent of its present amount in this country, depends entirely upon the action of foreign governments. The Secretary says “Bimetallism is essentially an international affair;” that “international bimetallism does not exist since it was upset by Germany; and the international agreement, twice attempted, has failed. ” Then the sole question for Congress to decide is: Are we to have no more silver than the present supply (say 8215,000,000), and is that amount to be accepted as the limit of the silver coin employed by our own peoplo in their trade and commerce among themselves ? And shall we now decide that it is now settled that no more of our silver coin will be exported for use abroad? Are we ready to decide these questions on speculative theories and solemn predictions of what may or will happen, against authoritative and indisputable facts found in Treasury records, and against what we know is trus, and in favor of what we know to be false? Are we to accept the mere dictum of the President in his message that the coinage of silver has already gone “beyond the amount noeded for a circulating medium?” Where are the facts to support that assertion ? The President himself states them, and what are they? He says : “The necessity for such an addition to the silver currency of the nation as is compelled by the silver-coinage act is negatived by the fact that up to the present time only about fifty millions of the silver dollars so coined have actually found their way into circulation, leaving more than one hundred and sixty-five millions in possession of the Government. Against this amount there are outstanding silver certificates amounting to about 593,000,000. ” Was ever a conclusion more unsatisfactory? After stating that only about 850,000,000 had found their way into actual circulation among the pec pie, the admission follows that 893,000,000 had found their way among the people, who had deposited them where they had the legal right and obtained silver certificates for their convenience. Do these facts discredit silver with the people and prove that no men is wanted or neeoed by them in our circulation? What other reason for his opinion that the people do not want bilver even to the extent of its present amount is given by the President? He says : “A special effort has been made by the Secretary of the Treasury to increase the amount of our siher coin in circulation ; hut the fact that a la: go share of the limited amount thus put out has been returned to the public Treasury in payment of duties leads to the belief that the people do not now desire to keep it in hand ; and this, with the evident disposition to hoard gold, gives rise to the suspicion that there alr< ady exists a lock of confidence among the people touching our financial processes. ” Poor silver i What can be done to get a little fair play from its enemies 8 When its friends

pass a compulsory law that it shall be received in payment of duties, as soon as it is done the fact is paraded to show that the people are enemies of the money the law gave them the right to pay for duties. But who paid those duties in silver, and where were they paid ? More than three-fifths of these duties on imports were paid in New Y’ork, and a large part in Boston and Philadelphia. Who made these payments? Were any payments made by importers through national banks and the clearing-house ? Did the “great business classes who carry on exchanges" have anything to do with making these paym.nts? If so, the explanation is easy where and how the President got the information and used it as a fact supposed to be prejudicial to silver. But the President and Secretary and all the subordinates in the Treasury uuite in the statement that “if silver coinage is continued long enough it will result in the substitution of silver for all the gold the Government owns applicable to its general purposes." How does the President say this result is to be produced? He answers : “Every month two millions of gold in the public Treasury are paid out for two millions or more of silver dollars, to be added to the idle mass already accumulated." What public law, duty, policy, or obligation requires that silver bullion shall be paid for in gold? Have bullion owners refused to accept silver? Has silver been offered iu payment? Has the Secretary allowed the owners of silver bullion to refuse silver dollars when silver dollars are a legal tender inpayment? Is it not singular that silver bullion owners would thus discredit the coin from their own mines ? If the owners of silver bullion refuse silver dollars and demand gold, thin amend the law with a proviso that the Secrets #y shall not make the monthly purchase unless silver dollars are received when offered in payment. But I apprehend the payment made in gold for silver bullion has been the voluntary act of tho Secretary. If so, then the ruinous drain of gold from the Treasury in payment for silver bullion cun be easily avoided. Again, the President says: “We have now on hand all the silver dollars necessary to supply tho present needs of the people, and to satisfy thoso who from sentiment wish to see them in circulation.” It is the sentiment of a large majority of the American people tfiat the interest accruing on Federal bonds and the principal of called bonds should be paid in silver dollars, as authorized by express law uni the contract recit 'd in tho face of the bonds tin mselves. Why is “the idle mass of silver dollars already accumulate! in the Treasury” permitted to remain there by the voluntary act of the Secretary of the Treasury in failing to offer or tender payment in silver dollars in accordance with the positive law of the contract by which the debt was created and on which the bonds were issued? The following is tho law and the contract: “This bond is issued in accordance with tho provisions of an act of Congress entitled ‘An act to authorize the refunding of the national debt, approved July 14, 1870, amended by an act approved Jan. 20, 1871,’ and is redeemable at tho pleasure of tho Unitod States after the Ist day of May, 1881, in coin of the standard value of the United States on said July 14, 1870, with interest in such coin from the day of the date hereof at the rate of 5 per cent, per annum, payable quarterly, etc. Tho principal and Interest are exempt from the payment of all taxes and duties of the United States as well as from taxation in any form by any State or municipality.” In the teeth of this solemn act of Congress, passed by a two-thirds vote of the representatives of the peoplo, who have repeatedly indorsed such law by their re-election, and the election of others who have permitted it to remain unrepealed and unamended to this day, the Comptroller of the Treasury has the temerity to use the following language in his report, page 15: “The credit and standing of tho country is deservedly high, and it is not believed that the people desire either that the principal or interest on the bouded debt of this country be paid in anything but gold coin or its equivalent. This matter was discussed at the time the bonds were issued, etc., and the conviction is general that the faith and credit of this Government is pledged for the payment of its securities in gold coin or its equivalent." Tho law and the contract which govern in every forum in Christe'hdoin and the obligation of the Government aud the rights of the bondholders expressly declare that the gold and silver coin now lying idle in the public Treasury are equivalents in value and a legal tender in payment of the principal and interest of the bonds through all coming time and under all circumstances and conditions. And yet the Comptroller declaros that “if we continue to add these silver dollars to our circulating mediun, and they continue to accumulate In the Treasury, the Government must of necessity jiay some portion of its obligations in that coin ; and if the Government should pay its interest and other obligations and redeem its bonds in standard dollars the business of the country would immediately go to a silver basis. ” The President follows in the same strain. He sayE: “The condition in which our Treasury may be placed by a persistence in our present course is a matter of concern to every patriotic citizen who does not desire his Government to pay in silver such of its obligations as should be paid in gold. Nor should our condition ho such as to oblige us, in a prudent management of our affairs, to discontinue the calling in and payment of interest-bearing obligations which we have the right now to discharge, and thus avoid the payment of further interest thereon. The socalled debtor class, for whose benefit the continued compulsory coinage of silver is insisted upon, are not dishonest because they are in debt, and they should not be suspected of a desire to jeopardize the financial safety of tho country in order that they may cancel their present debts by paying the same in depreciated dollars.” The foregoing is a burlesque upon Congressional enactments, which define the obligations of the Government as recited in its bonds, and especiallv is it promising of the faithful execution by the executive officers of the Treasury of the law contained in section 3694 of the Revised Statutes, requiring that “The coin paid for duties on imported goods shall be set apart as a special fund, and shall bo applied as follows*: First, to the payment, in coin, of tho interest on the bonds and notes of the United States; second, to the purchase or payment of 1 per cent, of the entire debt of the United States, to be made within each' fiscal year, which is to be set apart as a sinking fund, and the interest of which shall in like manner be applied to the purchase or payment of the public debt, as the Secretary of the Treasury shall from time to time direct; third, the residue to be paid ihto the Treasury.” Why have the foregoing laws of Congress now on the statute-books been persistently treated as a dead letter every hour of their existence by every President and Treasury official? Can any other reason be assigned than that the wisdom of these laws has been condemned by the “accordant judgment of the great business classes who carry on the exchanges of tho country, and whose iudgment must be aocepted as a final estimate of tho risk of obeying the laws of Congress?” Shall Congress abdicate and surrender the financial government of the country to this new tribunal, self-constituted, with no responsibility to the people, and from whose decisions there is to be no appeal? What other powerful motive of self-interest do we find for this life-long, persistent, and unfair warfare upon silver and national banks as a part of our standard currency?

• Si Iver is the only money that circul ates among the pedple that is beyond the control of national banks. Silver is the only lion in the track of the absolute dominion of national banks over the volume of currency that circulates among the people. We have 5346,000,030 of greenbacks that cannot be diminished or increased under existing law. Stop the coinage of silver, and nothing in the future is more certain than that it is a mere question of time when the national banks will become not only the money-kings, but the absolute “monarchs of all they survey.” In the languago of General Hamilton, "the general state of debtor and creditor, all the relations and consequences of price, the essential interests of trade and industry, the value of all property, the wholo income, both of the state and of individuals” will become subject “to the judicious or injudicious regulation” of tho currency by national banks. If silver is demonetized how can there be any increase in the amount of our coin or paper money exoept at the will and dictation of national banks ? Is Congress prepared to delegate this stupendous power over tho price of labor, property, and productions in this country to these private corporations? Everybody agrees that the price of everything depends largely upon the quantity of money in circulation. Does silver add to our volume of currency? Would the amount of money in circulation be diminished if silver were dropped out of our currency? These crusaders against silver come and tell ns “our returns show how small an amount of money enters Into our transactions, and how much its use has been superseded by our machinery of banking, with its modem system of checks, bills of exchange, and clearing-houses. The ooinnge of silver has increased the currenoy

of the oountry to the extent of 8215,000,0C0, with out any necessity or demand for it whatever Silver certificates are an inexpedient additioi to the paper'Currency. They are made a lega tender, and yet have for their basis only about eighty cents in the dollar. There need" be n< apprehension of a too limited paper circulation The national banks are ready to issue their note: in such quantity as they think the laws of trade demand. The embarrassments which are cen tain to follow the endeavor to maintain several standards of value out of high gold and low silver, and high gold certificates and low silver certificates, are too obvious to need discussion. And then the greenbacks are in our way and fill a place in our circulation that we could supply, anil they ought to bo redeemed and retired. Lei silver and silver certificates go, have no more gold certificates, and sweep away the greenbacks, and the Congress that secures these results will have a monument erected to its wis. dom aud statesmanship.” Then the gold image will rise in full view of an admiring world. Then, indeed, we shall have but one god to worship. What a millennium! Gold the only god and the national banks the only king!" One standard, of no use but to worsliip, and one cummcy, all paper, issued alone by the king and iu such quautities us ho may decree. Mr. President, silver is invincible because it has the confidence of the people. If its enemies will turn it loose among its friends there will b« no depreciation, no degradation. Let gold stay where it has always been, and where it will always be found and nursed aud kept free from hard usage, in tho vaults of the national hanks and tho money chests of the rich ; but give the people—the friends of silvor—a show at it and it will have a hearty welcome and find a warm place in their hearts. When silver has tho same treatment as gold from the Government and from bunks and bankers and clearing-houses, and a fair trial with gold on the natural laws of supply and demand, and the same chance with gold to get into circulation, aud the same recognition as gold under the existing laws of Congress, then if silver fails the failure will be unavoidable and irremediable. When that trial is thus made and the results verify tho predictions of its enemies, I will meet tho emergency as best T can with the lights then before me. Until that time comes I shall “let well enough alone” on the double coinage of gold and Bilver. I have no fear of a loss of our gold ho long as the balance of trade is iu our favor, and the danger of our imports exceeding our exports is a contingency not likely to happen. Such a result is too improbable to r< quire the perilous experiment of th® suspension if silver coinage to remedy. And if we were to suspend silver coinage and the balance of trade were to turn against us how would that balance be paid? Should there be a balance how would our gold ho any safer on a Binglo than on a double standard ?