People's Pilot, Volume 3, Number 16, Rensselaer, Jasper County, 6 October 1893 — COINED AND UNCOINED SILVER. [ARTICLE]

COINED AND UNCOINED SILVER.

What Would Be the Mint Value Under Free Coinage. The New York Weekly Tribune of August 9 contains an article contributed by Hon. William H. West, of Bellefontaine, Q, which the Tribune commends to its readers as a singularly clear presentation of the essential facts involved in the “silver free-coinage question.” The question propounded by the writer of the article, and which he endeavors to answer is: “Ought the mints of the United States to be opened to the free and unrestricted coinage of both gold and silver into standard dollars at their present coinage ratio or difference in weight of 1 to 16, when the commercial ratio or difference in market value between the two metals is 1 to 34?” The argument of Judge West proceeds throughout upon the assumption that silver has a commercial or market value “which exists anterior to and independent of all legislation,” and that this value should control its monetary relation to gold and fix the ratio upon which two metals Should he coined and used as money; in other words, that the market value of silver while it is in, the situation of a depreciated commodity should control its mint or legal valuation. Our mints are now open to the free and unrestricted coinage of gold, consequently coined and uncoined gold have precisely the same value. If they should be open to the free and unrestricted coinage of silver a person who should have a given quantity of uncoined silver would not sell it for a less number of dollars in the market than the mint would pay for it; and a purchaser, rather than pay any more for it, would put the coins struck from this quantity of silver into the melting pot In that case coined and uncoined silver would have precisely the same value. It follows that the mint valuation of a money metal fixes and controls its market value and that what one of them will sell for in the market while in the situation of merchandise will not in the slightest degree assist us in determining what should be its legal relation to the other metal which is already in the situation of a money metal, that is, what quantity of one metal should be treated as the legal equivalent of a given quantity of the other; in other words, upon what ratio the two metals should be coined. This can be only ascertained by first making money metals of both gold and silver upon a given ratio, say 1 to 16, and if this does not practically bring them together then we can change the ratio as we did in 1884. The history of the monetary movement of the metals demonstrates that they are governed by a law as inexorable as that of gravitation, which impels each to the place or country where it will exchange for the larger quantity of the other. Our first ratio of 15 to l«one-half a point on one side of the French or European ratio of 15X to 1, gave us silver down to 1884. It was then- changed to 16 to 1, one-half a point on the other side of the European ratio, and in consequence of this change gold came to this country, and silver, exchanging for about 8 per cent more gold in Europe than in this country, went abroad, and so continued down to 1878. During that time the gold dollar was worth only about 97 cents in terms of silver. The change of our ratio from 1 to 15 to 1 to 16 in 1834 was not, as Judge West assumes, in consequence of any change that had taken place in the commercial or market value of the two metals. One ounce of gold was not, at that time, worth sixteen ounces of silver, nor at any time down to 1878 was one ounce of gold worth sixteen ounces of silver. It was not because of the excessive inflow of gold into the world’s money stock from the mines of California and Australia that one ounce of gold exchanged for only fifteen and one-half ounces of silver, but because the mints of France were open to the unrestricted coinage of both metals upon the ratio of 1 to 15X> giving both the full legal tender power, that the market value of fifteen and one-half ounces of equal to one ounce of gold the world over during this period, notwithstanding their relative quantity in the world’s money stock during this time, changed from 8 to 1 of silver to 4 to 8 of gold. It is true that there was a slight disparity in their value upon this ratio in the London market, sufficient to cause gold to take the place of silver to some extent in the currency of France, but so firmly were the metals united under the French law that this disparity was not regarded in commercial transactions. M. Cerrauchi, most competent to speak upon this subject, says that- during this period the money accounts between England and India were uniformly reckoned on the basis of the equivalency of ten rupees silver and one pound sterling gold. The same authority attributes the widening of the ratio from 10 to 1 to 15X to 1 during the last six centuries to successive changes in the mint regulations of the commercial nations of Europe, always in favor of gold, for the convenience of foreign remittances Thus the market relation of the two metals, when used as money metals, was always eonincident, or very nearly coincident, with their mint or legal re- 1 lation, and demonstrates that when used as money metals, upon a proper ratio, a change in their relative quantity in the money stock does not materially affect their relative value. — Henry G. Miller, in Chicago Inter Ocean.