Rensselaer Republican, Volume 17, Number 26, Rensselaer, Jasper County, 5 March 1885 — THE SILVER QUESTION. [ARTICLE]

THE SILVER QUESTION.

President Cleveland’s Recent Letter Elieits a Reply from the Friends of Silver Coinage. 1 ( ; An Earnest Protest Against the Position Assumed by Mr. Arthur's _ . Successor. | - —6 fAssociated Press dispatch from Washington.! The friends of sßver In the House, while at first inclined to make a formal reply to the letter of President-elect Cleveland, since it has been given to the 1 public, decided at a conference held this evening to reply openly to those parts wjth which they do not agree. They say they did hot Invite a controversy, but. on the contrary, .were anxious to avoid it. They also say it was not until It had become known that a determined effort was being made to induce the President elect to commit himself and his administration in advance to the gold side ttt the currency question that they decidedmerely to ask him not to commit himself until his Cabinet had been formed, and both sides of the question could be considered. They believe, however, in the independence of the legislative branch of the Government, and assert they will at all times maintain it.. They, fnrnish the following as a statement of their views: In the letter no distinction is made between silver coinage and silver bullion. While it is true that the silver bullion, which is excluded from coinage and consequently from monetary use, is worth less (in the ratio of 1C to 1) than 85 per cent, of the gold dollar, silver coins, which are admitted to monetary nse the same as gold, are equal In value to gold coin. The silver dollar will exchange for as much as a gold dollar. It will even buy the gold with which gold dollars may be made. France, with a population of 36,000.000 and territory not' as large as Texas, has in circulation $600,000,000 silver with $850,000,000 gold, while we have bnt $200,000,000 full-tender silver to over $600,000,000 in gold. Altogether $1,300,000,000 silver coins, at a ratio of 15.1 to 1, are held in circulation in Edrope, side by side with $ >,600,000.000 gold. Of paper and silver together, including silver certificates, we have ■ less than $750,000,000, which shows that in this country there Is more' gold than paper, and nearly three times as much gold as silver. With this proportion in our currency, and with gold and silver equally full tender for everytning, it is difficult to understand why the Secretary of the Treasury mighLnot, if he chose to do so, pay ontmore silver and lees gold. Of course. If while receiving into the Treasury United States notes, silver and siver certificates, gold, or gold certificates, he pays out only gold, his stock of gold would diminish. If, on the other hand, he should pay.ont more silver and paper and less gold, the character of the reserve in the Treasury would conttol the Secretary. There would be no need, for a legal tender if one who receives money be permitted to choose the kind he will have. That stver and silver certificates displace gold is true, but only as Treasury or bank notes displace it. The with-. drawal of a hundred m llions of bank notes, or the issuance of a hundred millions, has the same effect on gold as so much in silver or silver certificates. Why.has It never been proposed to withdraw the national bank notes as a means of preventing the expulsion of gold? To the proposition that there now exist, or ever have existed under our Constitution, obligations specifically payable in gold, the silver men feel it their solemn duty to enter their most emphatic dissent at the very outset of a discussion of the question. No such obligations exist or ever did exist. Webster said r "Gold and silver at rates fixed by Congress constitute a legal standard of value in this conntry, and neither Congress nor any State has authority to establish any other standard or to displace this.” One act to strengthen the public credit, approved March 18, 1869, solemnly pledged the United States to thApayment of bonds in coin. The refunding act of July 14, 1670, provided for the payment of all refunding bonds in coin, of their present standard value, which is the same as the present va ue. The resumption act of Jan. 14, 1875, provides that from and after Jan. 1,1879, the Secretary of the Treasury should redeem in coin the outstanding legal-tender notes. By the act of Feb. 28, 1878, providing for the resumption of the coinage of the standard dollar, the silver dollars were made legal tender for all debts and dues, public and private, unless otherwise expressly stipulated in the contract; and there is not a public obligation outstanding, and never was, containing astipulation of payment in gold. In January, 1878, Congress adopted the following concurrent resolution, offered by Stanley Matthews, then Senator, riow on the Supreme bench: !

That all bonds of the United States issued or authorized to be issued under the acts of Congress hereinbefore recited are payable, principal and interest., at the option of the Government of the United States, in silver dollars of the coinage of the United States, containing 41216 grains each of standard silver, and that to restore to its coinage such silver coins as legal tender, in payment of said bonds, principal and interest, is not in violation of the puolic faith, hor in derogation of the rights of the public creditor. The opinions of Secretaries of the Treasury from 1878 down are rc ferred to as authority. The opinions are valuable when supported by facts and sound reasons, bnt ought not to control unless they are. It cannot bo forgotten, however, that these same Secretaries have steadily predicted, what has not taken place. The xriendß of silver concur in the opinion that it is most desirable to maintain and continue in use the mass of our gold coin, as we 1 as the mass of silver already coined. They agree, too, that it is of momentous importance to prevent the two metals from parting company. But the two metals have already parted com i any, under the influence of sliver demonetization in other countries, and the hostility of the Treasury and banks to silver in this, bnt that the continued coinage of silver at the rate of $28,000,000 a year will drive gold out of circulation in the near future, or force it to a premium, does not to them seem to be sustained by facts or sound reasoning. - The total volume of currency in the United States, outside of gold, is less than $750,000,000. Jt is believed to be a principle of economic science, perfectly well settled, that if a volume of $750,000,000 is not sufficient in Itself to maintain prices in this country at the level of international prices, then gold will come here and stay here in sufficient amount to make, with the volume already in circulation, what will constitute our distributive share of the world’s money as determined by our international trade. That $750,000,000 is not a sufficient volume to maintain prices at the world's level of prices is evidenced by the fact that $6'«,000,000 in gold, a considerable part of which is in circulation, either in the form of coin or certificates, now stays here, and it will go away only when £ rices become lower elsewhere than they are ere. It is believed, therefore, that no such crisis as has been foreboded can overtake us under the existing conditions. It itrnot believed'to be In the power of all ihe banks in the country, even if i hey wereteo disposed, to take the gold out of circulation and hold it for any length of time at a premium. They must first lock up the world’s moni y and arrest the world’s commerce. Nor can paper or silver certificates now in circulation side by side with gold expel gold. The gold can be expelled only by forcing into circulation, in addition to $750,e00,000, either silver or paper eqnai to the entire volume of gold now in circulation. In that manner, under Gresham’s law, gold might be expelled, and probably would be. It is doubtless true. too. that if the population and wealth of this country were at a stand, then the. continued coinage of siver in sufficient volume would in time expel gold from circulation, but as long as the population and wealth go on increasing, then the conditions of the problem are changed. In fact, in order .to preserve a stable ratio between the money volume and the population and wealth in annual increase, not less than sio,<joo,ooo currency of some kind is now r quired. In other words, the increase of th population and wealth calls for an addition to our circulation of at Fast $10,000,0.0 a year. If, while these condi ions continue, silver is coined at the rate only of $28,0h0,0u0 a year, there is left still a considerable void to bo filled with gold, This is the reason why gold has increased In the country steadily since the act of 1878 was passed, and why gold has increased by nearly $14.000,0u0 during the last y. ar, and is now increasing at tne rate of nearly $1,500,000 a month, notwithstanding the depression of business in the conntry, and as a matter of fact there is to-day more gold in this conntry than there ever was before in its whole history. Another fact is that $80,000,i OQ of gold in the treasury was putthere in exchange for silver certificates. The immediate effect of stopping the coinage of silver must necessarily be to lower the price of silver bullion and gradually to appreciate the value of gold the world over. The difficulties in the way of establishing an internatonal ratio, so mnch desired, or of the readjustment of the relative vslue to gold here would thereby be increased. How it is possible for Such things to take place as are predicted in the last paragraph of the letter it is difficult to see. Gold is to be withdrawn to its hoarding places, followed by an unprecedented contraction in the actual volume of out currency'. Such a contraction, it has been shown, must be followed by a great fall of prices. What then? Wonld not gold flow here as tides flow? Surely it would come as f st as sbtps could bring it. What would those who have been boarding gold do with it th n Labor, the letter says, already great y depressed, wonld suffer still fnrther depression by the scaling down of tne purchasing power of every so-called foliar l aid into the hand of toll. Here in one sen- > <.«se we have gold hoarded, unprecedented con-

when these impending calamities opme. prieea are to fall, everything becomes cheaper, and money becomes less valuable at the same time. That is, both sides of the balance go down to- , getber. Usually one side goes .up as the other goes down; usually as commodities become cheaper money becomes relatively dearei an#’’ vice versa; usually a contraction of the money volume results in a rise in the value of money, and not in a fall. The contradictions involved in this paragraph of the letter are hardly calculated to carry conviction to those who have ever studied the money questions at all, or to awaken in them any sense of alarm at our approaching calamities from such causes. In one thing all will agree, and that is in the importance to the whole country, and especially to the laboring classes now struggling with want, of the revival of business and the reaction of prosper!! y. The one condition essential to this is to stop the contraction of currency. No conntry ever did thrive, and never rmt_ while its money was undergoing contraction. Business can not be seenre when its foundation is constantly giving way. Stability in the volume of money is the one essential to safe and prosperous business. What is the monetary condition of the world to-day? Are we not brought face to fi.ee with .the startling fact that the gold production of the world has fallen below its consumption ini' the arts, and that there is no probability of any new gold for the money supply for centuries to come? With this condition of things as to gold, shut off silver, as is now proposed, and where is the money supply, even for keeping np the stock of coin now in the hands of the world, to come •Arom? As aggravating to this state of affairs in this country, the paper currency is undergoing contraction by the surrender of ban t notes. If this state of things is to last, upon what is there to build the hope of returning prosperity? In the la-1 three years, according to the London Economist, prices have fallen more th n 20 per cent, —that is, money has appreciated in that ratio. In the Quarter century following the gold discoveries of California and Australia, the stock of precious metal in nse as money was increased by nearly 40 per cent. The trade and commerce of Great Britain and the Ignited States dnring the same period increased more than four fold, and wealth proportionately. Reverse these conditions, shut off all money supply, and what room fSr hope is there for mankind, except for those whose incomes are sure? With the appreciation of money all debts appreciate. When it is remembered that such debts run into tens of billions—-more than the entire present wealth of the United States—the vast consequences of the appreciation of money are seen. The control of feudal lords over tne earth m the middle ages wa3 insignificant compared with the control the modern creditor kings and lords, who, through legislation, can secure an; increase in the value] of money, it can be shown tuat it will take more labor, or more of the produce of labor, to pay what remains of our own national debt now than it would have taken to pay it all at the close of the war. Eighteen million bales of cotton were equivalent in value to the entire interest-bearing debt in 1865, but it will take 33,0u0,000 bales at the price of cotton now to pay the remainder of the debt. Twentyfive million tons of bar iron would have paid the wnole debt in 1865. It will take 35,000,000 tons to pay what remains, after all that has been paid as principal and interest. In view of the vast interests involved the friendl of silver did not think it too mnch to ask that the question of stopping the coinage of silver should not be separated from its relation to the whole currency question and acted upon by itself. The currency question, it is believed, at the present time overshadows all other questions, and all the friends of silver have asked is that the President elect should’give it full consideration and hear both sides before committing his administration to any particular view respecting it. - r - '4-