Rensselaer Republican, Volume 27, Number 41, Rensselaer, Jasper County, 18 June 1896 — SOME HARD FACTS. [ARTICLE]

SOME HARD FACTS.

PHEY hit telling blows against “ FREE COINAGE AT 16 TO 1. The people of this country make their contracts payable iu dollars. They do business in dollars. Uncertainty as to the meaning of the word dollar must create doubt as to the effect of contracts and general distrust iu business. The dollar of the United States at present has a distinct (meaning. It is equivalent to 23.22 grains of pure gold. ' Paper dollars are’ mere promises to pay lin coin. Silver dollars, while they contain bullion worth only about 50 cents each, haye been surrounded by safeguards of legislation limiting the number coined and supporting them by the credit of the government, so that they have been kept on a parity with gold dollars. Twenty-three-twenty-two-one-hundredths grains of gold therefore measure the value of what is meant by a dollar, when the term is used for trade here, and this has been true for about 50 years, with the exception of the period during which paper dollars were depreciated. Upoirthe floor of the house of representatives in 1853, when the bill was pending which made fractional currency subsidiary, Cyrus L. Dunham of Indiana, who had charge of the bill, said: » “An objection urged against this proposed change is that it gives us a gold standard only. * *- * Gentlemen talk about a double standard of gold and silver as a thing that exists, and that we propose to change. We have had but a single standard for the last three or four years; this has been and now is gold; we propose to let it remain so and adaptsilve# to and regulate it by gold. ” After this long experience in the use of dollars based upon 23.22 grains of gold the advocates of silver demand its ■ free, unlimited and independent coinage at the present ratio. This is really a proposition to remove from silver dollars the safeguards of legislation which surround them, to withdraw the limit and to take from them the support of the government., It is an effort to reach a bimetallic currency by the free and unlimited coinage of two metals at a fixed ratio which places 100 cents’ worth of bullion in the gold dollar and 50 cents’ worth of buillion in the silver dollar.

The experience of every country which has attempted the free and unlimited coinage of two metals at a ratio disregarding the commercial value of the bullion of each metal put into a dollar has been the coinage and use of the cheaper metal and the loss as money of the more valuable metal. The principle is thus expressed by Sir Isaac Gresham: “If debased coin is attempted to be circulated with full valued coin, all of ..the . latter-.will. disappear from circulation, and the overvalued and debased coin will alone remain, to the ruin of our commerce and business. ” This indisputable doctrine was taught in the fourteenth century by Nicholas Oresme and again in the sixteenth century by Nicholas Copernicus. Coming down to 1717, Sir Isaac Newton, at that time director of the mint of England, declared: ‘ ‘lf silver Jeaves the shores of England in crowns or in ingots, the produce of coins remelted, and gives place to gold,, it is because the value which the monetary legislation assigns to it, in relation to gold, is not correct. ’ ’ Apply the lesson practically to our own money. With free and unlimited coinage of gold and silver at the ratio of 16 to 1 silver monometallism would result, and the measure of the value of our dollar would be 371)4 grains of silver, worth about 13 grains of gold. But the advocates of silver coinage insist that with 371 grains of silver admitted in unlimited quantities to the mints for coinage, free of charge, the bullion value of this number of grains would necessarily be equal, before coinage, to the coined dollar. This is true, and it would be equally true of 100 grains, or of 1 grain, if admitted free and in unlimited quantities to coinage. Indeed, if chips were admitted free and in unlimited quantities to the privilege of being stamped into dollars, the chips, before they were stamped, would be worth as much as the dollars after they were stamped, but unfortunately the dollars would be worth no more than chips.

Another favorite argument of the free silver advocates refers to the experience of France, and they have claimed all over the country that France, from 1808 to 1874, by fixing a legal ratio for the coinage of silver and gold (at 15X to 1), kept the commercial ratio between the two metals at the same figures. This inaccurate statement has been one of their principal arguments. If they will really examine the history of France, they will find that before 1820 the difference between the commercial value of gold and silver exceeded 15% to 1, and France became silver monometallic. Later on, between 1840 and 1850 the commercial difference was less than to 1, and France became gold monomotallio. FrOm 1792 to 1860 the subject of coin- , age of gold and silver was frequently discussed by American statesmen, and no suggestion can be found, from any of them, that the government could overcome even a small difference in the commercial value of metals by free and unlimited coinage at a fixed ratio. This country failed to add 8 per cent to the value of silver and make it equal to a ratio of 15 to 1 with gold prior to 1834, and it failed to add 6 per cent to gold and make it equal to a ratio of 1 to 16 with silver subsequent to 1840. No limit can be placed upon the mass of silver still unmined. Good authority indicates that the present annual volume can be produced for about 60 oents an ounce. It is impossible to place and maintain a price upon such a commodity which would give it a profit entirely disproportioned to that earned by the average enterprise. Yet the advocates of free coinage of silver now propose to undertake the experiment at a local ratio of 16 to 1, although the commercial ratio is 81 to 1. We are therefore confronted with a proposition to change the meaning of the dollar from 23.22 grains of gold to 371J£ grains of silver. As 371J£ grains of silver are Worth only about 13 grains of gold, it is practically a proposition, at a single blow, to reduce the value of a dollar ope-hulf. _

is a movement more radical than one to reduce openly the; bullion in a gold dollar to 13 grains. This would be a step dangerous, but definite. No one knows what grains of silver would be worth under free and unlimited coinage. It is impossible to say whether the increased demand for silver wquld carry 371 X grains of Silver somewhat above 13 grains of gold, or whether this increased demand would shortly produce a disproportioned increased supply and cany the value of grains of silver somewhat below 13 grains of gold. I am aware that the of free coinage of silver object to estimating the value of silver hi gold, but all international trade js measured by grains of gold. No matter what system we adopt, unless our international commerce is abandoned, our dollars will be actually measured by gold, even though we fix them upon a silver standard. The movement for the free and unlimited coinage of silver is therefore an effort not only to reduce the value of a dollar about one-half, but to leave it in a state of uncertainty. It threatens a complete change in the meaning of the term dollar to some meaning in the neighborhood of one-half its present meaning. It threatens an entire change of the value of the term by which contracts and credits are estimated and by which business is conducted. In every country where progress and prosperity are found the great bulk of business must depend upon credits. The credits are estimated in dollars, and whatever creates a doubt as to the meaning of a dollar must tend to suppress business. The mere threat involves uncertainty, and this uncertainty must be removed to bring back to business normal prosperity. " To appreciate the importance of removing doubt upon this -subject, contemplate briefly the process of reaching the proposed silver standard. We saw in 1893 a paralysis of business, in large part produced by the threat of a silver standard.

If a president and congress were elected in November committed to the free and unlimited coinage of 37grains of silver into dollars, nearly six months would pass before they could be inaugurated and six months more before the proposed legislation could become law. During that time creditors would seek to protect themselves against being paid in dollars worth only about 13 grains of gold, and they would endeavor to make collections before the unlimited coinage of depreciated dollars began. The debtors would not be allowed to remain debtors until they could get the advantage of paying off what they owed at 50 cents oh the dollar; they would be forced to immediate settlements. Sheriffs and constables would call upon them without delay. Depositors in banks would withdraw their money. The large merchants, forced to settle their foreign indebtedness, would insist upon immediate payment of debts due from smaller merchants. The smaller merchants in turn would be compelled to force-collections from their-customers. The great volume of business conducted upon, credits would cease. Manufacturing enterprises could not afford to continue business or make contracts until the value of the new dollar could be settled by the determination of just what grains of silver would prove to be worth. Manufactories would close. Business houses would fait Banks would be raided. The unemployed would be numbered by millions. The farmers would find few purchasers for their products. Want and - famine would pervade the land. At the end of a few years, when business settled down to the new meaning of a dollar, fluctuations in the commercial price of silver would still keep our dollars of uncertain value and hinder domestic trade. Business interests, reaching from the richest banker to the poorest paid laborer, require the removal of all doubt about the meaning of a dollar. No man should bo trusted even with an important nomination who does notrecognize that the value of a dollar is now measured by 23.22 grains of gold, and who is not willing to openly declare his purpose to help keep it there.