People's Pilot, Volume 4, Number 15, Rensselaer, Jasper County, 28 September 1894 — PLEA FOR SILVER. [ARTICLE]

PLEA FOR SILVER.

An International Bimetallist Upsets His Own Arguments—America Should Act for Herself. f*rof. E. Benjamin Andrews, though himself high priest of the sect which has gone off after the false and faraway god£ of international bimetallism, has furnished the current number of the Review of Reviews with an article which, the Chicago Times believes, contains some of the most powerful arguments for the remonetization of silver which has yet been presented. Prof. Andrews’ article is a translation of the report of the bimetallists who served on a commission recently appointed by the German government to inquire into certain economic problems which Germany, in common with the United States, now finds demanding serious attention. The report, which has not heretofore found its way into any English or American publication, embodies the results of an exhaustive and careful investigation into the coinage question by the most eminent authorities and scholars of the German empire. It is not surprising to the student of financial science to find that the same dire results followed the demonetization of silver in Germany that have attended it in America, although it may be to others who have only given the subject cursory attention. Every line of the report, save a few referring directly to military and official features peculiar to Germany, might well have been inspired by an investigation conducted in the United States for the information of congress. The German commissioners begin with this declaration: “We consider it proved by science and experience, and partly, in fact, by the admissions of prominent adherents of the sole-gold standard, that the power of gold to purchase goods has risen since the general extension of the gold standard (1873), is still rising to-day, and must continue to rise.” After quoting the prophecies made by eminent writers on the money question as early as 1868 that dangerous appreciation of gold and depreciation of commodities would follow the demonetization of silver, the report denies the claim of the monometallists that such a lowering in the general level of prices is due to causes entirely outside of the coinage system, notably to to the cheapening and improvement of means of communication and the perfection of manufacturing machinery and processes. These claims, says the report, connot be allowed, because “the same causes were present in the same strength during the twenty-year period before 1873, though at that time there was observable a gradual elevation in the prices of goods in general; while, since 1873 —that is, since the beginning of the fall of the gold price of silver through the introduction of the gold standard in Germany—a sharp and permanent lowering in general prices has come in. Moreover the industrial development referred to is at present specially strong in the lands having the silver standard, yet without reducing any fall of prices there, This is a direct proof that silver has not lost in value, but merely gone down in its gold price, and that, therefore, the fact which confronts us is simply an elevation in the value of gold.”

The greatest evil which the German commissioners see in the advancing value of gold, or rather in the advancing purchasing power of gold, is that “an incessantly heavier and heavier burden is falling on the debtor in favor of the creditor,” and, say they, in all justice and propriety: “It cannot be admitted that the creditor has any natural right permanently to receive at the debtor’s cost, in consequence of the steady rise in the purchase power of gold, a value continually more in excess of what would fall to him were there no such appreciation of gold.” The steady fall in the prices of farm produce and the consequent depreciation in value and earning and life-sup-porting ability of farming lands are shown by the arguments of the German economists to be due entirely to the steadily increasing purchasing power of gold, while the depreciation in wages and the paralysis of copper, lead and zinc mining industries —which latter, by reason of the combinations in which ores are usually found, depend very largely upon the silver industry for profit—are clearly shown to be due to the demonetization of the white metal. Each of these conclusions applies as well to conditions in the United States as in Germany. The commissioners, like Prof. Andrews, would advise international bimetallism as the best remedy for the distress which the demonetization of silver has brought upon every country that has adopted the gold standard. They would have Germany take the initiative and are confident that all the great powers, even including England, would join in a general movement looking to a restoration of the dual standard. In this the Times thinks that they are perhaps too sanguine, and, as Germany does not seem disposed to act upon the best advice ever given her rulers, it will continue to urge that the United States take the lead in the return to good sense and bimetallism, coining silver and gold jointly upon the rational basis of 16 to 1.

It is evident, by the way, that the argument as to the proper basis upon which silver might be restored to its legitimate function as money is as sharp in Germany as in this country, for, in reply to foreseen critics, the able reasoners who prepared this masterly plea in support of bimetallism for Germany include the following logical defense of the ratio in their report: “If it be said that the restitution of silver as a monetary metal is possible only by rating silver to gold at its present market value in gold, we reply that the market price of silver to-day is abnormal, resulting from a series of panics evoked by legislation and from a limitation in the demand for silver having no other cause than the artificial one of closing mints to this metal. In reply to the objection, resting on misunderstood theories, that the relation in value between two “wares,” gold and silver, cannot be “fixed’ ’ by

statute we appeal to actual experiences t.’ith bimetallic mintage in France, where, between 1803 and 1873, it maintained for the whole world the relation of 15% to 1, thus persistently continuing the relative value of gold and silver, with slight variations corresponding to the usual movements of exchange, in spite of the greatest fluctuations in their relative production that have ever been known.”