People's Pilot, Volume 4, Number 3, Rensselaer, Jasper County, 6 July 1894 — FINANCE AND SENSE. [ARTICLE]

FINANCE AND SENSE.

Ex-Senator Norwood, of Georpis, Discusses the Dollar Unit of Coinage—What Parity Means. The money ‘"unit” is the integer established by any government for measuring values and solving debts; as the dollar with us, the franc in France, the pound in England, the mark in Germany, etc. It is for all commodities what the yardstick is for cloth, the pound for weighing, the bushel for measuring. Money “standard” is the number of grains of pure metal with the alloyadded that constitutes the “unit,” as 412.’4 grains make our-standard silver dollar and 25.8 malre our standard gold dollar. “Parity” means equality, or at par. That word, as used in the Chicago platform, “parity of the two metals,” means equality in value between gold and silver, not as coin or dollars, but as bullion. This construction is made clear by the next words, to-wit: “And the equal power of every dollar at all times and in payment of all debts. ” If the words “two metals” do not mean gold and silver or bullion, then the words “the parity of the two metals” are worse than redundant —they are a snare and a cheat—-the words “intrinsic value applied to gold or silver, or any metal or thing, are a myth. An intrinsic value would be unchangeable. Value depends on desire or demand for an object and on the quantity to supply the demand. Values of gold and silver are constantly changing. When gold is in excess of silver it is less desired, therefore less valuable. But this could never be if gold possessed intrinsic value. Every writer on finance of acknowledged authority has given up the booby superstitions of “intrinsic value.” With the foregoing definitions of financial words and terms before us let us turn the light on that marvelons achievment in verbal jugglery or that inexcusable ignorance of eastern financiers—the silver plank of the Chicago platform. It reads; We hold to the use of both gold and silver as the standard of money of the country and to the coinage of both gold and silver without discriminating against either metal or charge for mintage; but the dollar unit of coinage of both metals must be of equal intrinsic and exchangeable value, or to be adjusted through international agreement or by such safeguards of legislation as shall insure the maintenance of the parity of the two metals and the equal power of every dollar at all times in the markets and in payment of debts; and we demand that all paper currency shall be kept at par with and redeemed in such coin. I will now analyze that language to see how much craft or ignorance it exhibits. Bear in mind that it was settled before the convention met that either Mr. Cleveland or Mr. Hill would be the nominee for president. Both were eastern men—of New York. To carry the eleven statesit was necessary “to talk gold.” To carry the south and a few western states it was necessary “to talk silver.” Therefore it was decided by the gold men to juggle with words, and hence we have the above “concatination of self-existences proceeding in a reciprocal duplicate ratio,” etc. What sense is there in the words, “the use of gold and silver as the standard of money?” There is but one standard of money, and that is the quantity of metal in it. For instance, our standard silver dollar contains 412)< grains, including alloy, and our standard gold dollar contains 20.8 grains, including alloy. If they knew what they insolently claim to know all about and what they say the south knows nothing about, and had been honest, they would have said “unit of money” and not the “standard of money.” The unit would not have committed the east to advocacy of any specific standard; that is, any given number of grains in our silver dollar, whereas the word standard used by them implies committal to our present standard dollar. Was it ignorance or craft?

Did those eastern men mean that they “hold to the use of both gold and silver,” one at the standard of 25.8 grains and the other at the standard of grains as “the money of the country,” when they are hourly proclaiming to Europe the dishonesty of their own government in coining and retiring 412 X grains, or a dollar, which they say is not worth 70 cents? If they did not so mean were they juggling or were they ignorant in speaking of “the standard of money.” Let us examine another part of the silver plank. They say: “But the dollar unit of coinage of both metals must be of equal intrinsic and exchangeable value,” etc. Who can intelligently explain “the dollar unit of coinage?” No metal is money until coined; that is, until the government or ruler issuing it declares it to be money. When coined (if metal) or issued (if paper) it becomes the “unit.” When our government declares a piece of silver or gold to be a dollar it is then our money “unit.” The number of grains of gold or silver in the dollar has nothing to do with the unit. Twenty or thirty grains of gold, 400 or 500, or any number of grains of silver, would be a dollar when so declared, and that dollar would be our (the American) “unit.” And if each be of legal tender functions they would be of equal value. It is not the kind nor the quantity of metal in a dollar or franc or mark or rupee that constitutes its value. Its value depends on its functions —its legal tender or debtpaying quality and on demand and piyThe “unit” is the integer, the one, the starting point, whether to be used for measurement, for weight, for money, or what not. We took as our unit the dollar, just as we adopted the twelve-inch foot and the thirty-six-inch yard for measurement. The standard of that unit has been changed by an increase of grains in the silver dollar from fifteen to sixteen, but the dollar was and is still our unit. It still remains our “one” in money notation. Had the framers of that plank said “the silver dollar and the gold dollar hereafter coined must be of equal and exchangeable value,” all men could have understood what they meant, but the language they used is just as inexplicable as that of an old ante-bellum

negro preacher who defined the word firmament as used in the first chapter of Genesis to be “a species of selfrighteousn ess. ’' “The dollar unit of coinage of both metals,” coming from Wall street, is bad enough to be a species of selfrightousness, but when the words “must be of equal intrinsic value” is added it is enough to make not only Ricardo Say, Walker Macleod, John Stuart Mills and all others of the “judicious” weep, but it is enough “to make even the groundlings laugh.” That our congress, as an international congress, must first give “intrinsic” value to two metals —a thing that God has not done—and then make those two metals of equal intrinsic value (which implies, of course, that their intrinsic values must always continue equal), is a proposition that could only be made by men who are pitiably ignorant or wickedly designing. If the south and west wait for free coinage of silver until those conditions oome in conjunction they will wait until there is “a new Heaven and a new earth.” As already said, nothing has intrinsic value. Nearly everything has one or more qualities that make it desirable. Gold and silver have more qualities that fit them to serve as money than any other known metals. Those qualities create a demand more or less great in different nations and in successive ages. That demand imparts commercial value, and the value varies with the demand. Gold bullion is more valuable in England, Germany, Austria and the United States than silver only because it is in greater de- ! mand. If gold or silver had intrinsic I value that value would be the same in every quarter of the globe and in all times. .Much confusion of thought arises from the misapplication of the word “value.” Value as applied to gold und silver or any commodity is strictly rel- ; ative. A dollar has more or less value Jas its purchasing power varies. Hence intrinsic value is impossible. Demonetize gold and silver and their values would instantly drop, and also vary in every country. The eastern financiers further say that the dollar unit of coinage of both metals must be of equal intrinsic value or be adjusted through international agreement or by such safeguards of legislation as shall insure the maintenance of the parity of the two metals and the equal power of every dollar at all times in the market and in payment of debts. All that is delightful reading. It has a flash of determination in the eye and a swell of the boson heaving with virtue absolutely fiery, if not molten, at the suspicion that any poor American citizen should ever have palmed off on him or her by any rascal any dollar that is not the equal of any other man’s dollar. It has a martial air and sound, a gleam and glimmer of drawn swords and bayonets fixed to protect the innocent and honest against fraud and imposition. “The dollar unit of coinage of both metals must be of equal intrinsic value.” “Parity shall be insured.” “The two dollars shall be of equal powers at all times.” “Paper currency shall be kept at par with coin.” If the dollar unit of coinage or of both metals means anything that is intelligible, it means that the number of grains in a silver dollar and also in a gold dollar must be of equal (intrinsic?) value to be adjusted (or not to be adjusted), either through international agreements or by such safeguards of legislation “as shall the maintenance of the parity of the two metals, and the equal power of every dollar at all times,” etc. The words “the dollar unit of coinage” in financial technology are meaningless, and what the writer or author of them intended can only be inferred by what follows. Interpreted as above, and all down to and including “at all times,” insist in one absurdity and one impossibility—conditions precedent to free coinage of silver.

The absurdity is that the two metals must be of intrinsic value —a quality that neither has nor can possess—and the impossibility is “the insurance of the maintenance of the parity of the two metals.” The equal power of the two dollars can be maintained. It is maintained now. Every silver dollar is the equal of a gold dollar in the markets, but to maintain parity, which is equal in value, between silver and gold as metals is something bevond the control of international, national, legislative or any other power. As coin, as money, as the unit to measure all values, as legal tender, their parity is easily maintained, but their values as metals, as bullion, are as variable as the winds, as human desires, as the demand for them to-day or the supply tomorrow. As bullion commerce controls their values. The author of that treacherous verbiage might as well have fixed the time for free coinage when corn and wheat, or rye and oats, or cotton and corn can be maintained at parity. The entire paragraph of 112 words is a burlesque on the technical terms used in the science of finance. It is a vulgar exhibition of contempt for grammar. In ignorance it is a national disgrace, while in cruelty of deception it is a national crime. It is a confession of imbecility and an appeal to enemies for help. It is a resort to redundancy to conceal a falsehood. It is the rich man’s—the millionaire’s persuasive promise and the poor man’s apple of Sodom. It is a disastrous attempt to reverse the eternal law of supply and demand and to engraft on nature a law not established by the Creator. It has strengthened our enemy, and the east, when we are sinking still lower and ask for relief, turns upon us and calls us knaves and fools because we favor the silver dollar.—T. M. Norwood, in Savannah (Ga.) Press.