People's Pilot, Volume 3, Number 19, Rensselaer, Jasper County, 27 October 1893 — TRUE BIMETALLISM. [ARTICLE]

TRUE BIMETALLISM.

How to Maintain Gold and Silver on a Parity—View* of the President of the American Bimetallic League. Secretary Carlisle, in an interview last June, quoted the following from the act of July 14, 1890: “It being the established policy of the United States to maintain the two metals on a parity, etc.and says: “In the execution of this declared policy of congress, it is the duty of the secretary of the treasury, when the necessity arises, to exercise all the powers conferred upon him by law, in order to keep the government in a condition to redeem its obligations in such coin as may be demanded.” What law confers on the Secretary the power to provide “such coin as maybe demanded” by the holder of the notes issued under the act of 1890? There is no such law and no such duty rests on the secretary. Section 3, of the act of 1890, says: “The secretary of the treasury shall each month coin 3,000,000 ounces of silver bullion purchased under the provisions of this act into standard silver dollars until the first day of July, 1891, and after that time he shall coin of the silver bullion purchased under the provisions of this act as much as may be necessary to provide for the redemption of the treasury notes herein provided for.” This provision is mandatory and not discretionary. How the secretary •hall—not may—provide for the re-

demptioa of the notes feraed under th« act of 1890 i» dearly Mated in the act itself. The secretary can provide for the redemption of these in no other way than that in whieh the act itself provides. He may, in bis discretion, if he has gokl (but not on the de* mand of the holder as a right), redeem the notes in gold, bat he can provide for the redemption of these notes only by coining the bullion purchased with the notes. He may use any gold in the treasury derived from the revenues* for redemption of these notes, but he cannog buy gold with bond* to redeem them, nor can he use the* gold reserve accumulated under the act of 1875 by the sale of bonds. One naturally asks why the secretary in his interview should quote the clause declaring it to be the policy of the government to maintain the parity of the two metals, which is a mere declaration of policy, and neglect to quote the provisions of the same act commanding the secretary to provide for the redemption of the notes by coining so much of the silver bullion as may be necessary. If done by anyone else it would be construed as indicating a bias against silver which it is believed Mr. Carlisle did hot entertain. And even if the law had clothed the secretary with discretionary power to maintain the parity of the metals in* such manner as he might think best, he must in the end fail if he undertook to redeem the notes “in such coin as may be demanded.” Such a policy must necessarily result in the disparity of the two metals, even if there was a parity to begin with. Such a policy isin violation of the fundamental principles of bimetallism. Bimetallism rests upon the right of the payor to make use of the more abundant metal, or the metal that tends to become cheaper, and by thus increasing the nse of this metal to lessen the use* of the other, and through this compensating principle, like the two metals in the pendulum of a clock, maintain the parity of both. No one ever claimed that bimetallism could exist if the taker, and not the payor, had the option. Bimetallism, without the power of legal tender behind it, giving the option to the payor, could not be permanently maintained even if all the nations of the earth would unite on a common ratio. Bimetallism falls to the ground if the power of legal tender is taken from either metal, or if the option, which amounts to the annulment of legal tender is given to the payee. Could France maintain the parity of her 1600,000,000 of silver coin, coined on the ratio of to 1, with her gold coins, if the payee were given the option to take either kind of coin? No more can the secretary of the treasury of the United States maintain the parity of the two metals, if he gives the option* as a right to the taker. The option, under legal tender, necessarily lies with the one who pays, whether it be a private person or a government; and the parity of the metals, or bimetallism, can be maintained in no other way. The declared policy of the secretary, therefore, must operate, and does operate, to create a disparity. This policy curried out generally would necessarily lead to monometallism for the world. The two metals, can be maintained at a parity only by admitting both to coinage on exactly equal terms, and the coins of the two metals can be kept at a parity only by conforming to the fundamental principles of bimetallism, and legal tender, and by paying out that metal which, for the time being, is most convenient or most abundant. The secretary of the treasury, therefore, if he would carry out that provision of the law to which he has given greatest prominence, must change his policy and pay out the metal which> it is most convenient for him to pay.—A. J. Warner.