Rensselaer Republican, Volume 27, Number 46, Rensselaer, Jasper County, 23 July 1896 — FACTS [ARTICLE]

FACTS

tlxe Silyex and. ZTOZT-Z=’^X.Z3 , Z?ZSufX.ZT 'VIEW ■i: . z Silver CoiXLagr® ©f tixe United. States ,as Shown by tire Official Reports. By. John B. Conner, of the Indiana Farmer, Indianapolis,

Whkt Are the . About Silver and j Low Prices? Whether this party or that one shall be voted up, or down, Is not half so important as that we shall be sure of the effect of this or that public policy upon the prosperity of the people and the nation. No fair man wants to be wrong about the questions effecting the general good. No one can afford to be wrong. A careful reading of the historical facts and official reports in Regard to the coinage of silver, and the results under such coinage, have impelled the writer to present these facts to the public. Let it be said at the outset, that this is not intended for those who are under the fury of such prejudice as has entirely destroyed their confidence in their fellows, and who do not believe the official reports as they have come to us in thq past 60 years. It is for those who honestly want to learn the facts, but have not had access to the great piles of records through which they are scattered during 60 years of the history of the nation. Let it be said, furthermore, that this is a compilation of the facts, rather than an argument. It is assumed that the reader is intelligent, and can apply the facts, and make such deductions from them as will enable him to detect the wrong statements, harangues, and the the arts of the demagogue wherever he sees or hears them. Vvtiy the Ratio Was Fixed at lb to 1. As the ratio of the present silver dollar to gold was adjusted by the act of congress in 183-1-7, it is hardly necessary to an understanding of this question to go back of that date. The first question is, why was the ratio of silver to gpld by the act of 1884 fixed at, 16 grains of silver to 1 of gold? The reasons given wore that this was the ratio of the value of the two metals in the market before coinage. It seemed to be an honest adjustment of the ratio for coinage, and for this reason alone it was so fixed. But as the purpose of this article is chiefly that of quoting the facts of history, the statement of President Thomas Jefferson is hero given. He said: “The proportion between the values of gold and silver is a mercantile problem altogether. Just principles -will lead us to disregard legal proportions altogether and inquire into the market price of g<sld in the several countries with which we shall principally be connected in commerce and take the average of them.” —■ Here Mr. Jefferson lays down the doctrine of international agreement for bimetallism, in his allusion to the fact that the price, or ratio, must be considered in connection with “the several countries with which we shall principally be connected in commerce.” The inexorable law of supply and demand furnished the reason for the ratio of 16 to lin 1834. Both metals from the mines were in demand in the markets then at these relative prices. Naturally congress said by the coinage act of that year, as commerce and traf- : lie in the open markets of the world had fixed the relative value of the two metals, it was fair to make that the coinage value. And so the coinage act of 1834 was passed. But it was soon found that at this ratio silver was under-valued, and it went out of circulation. Is it asked why? The history of the times show that the 412>£ grain silver dollar was worth 8M cents more than the gold dollar at the ratio fixed.and as millions of dollars worth of silver was constantly being used in manufacturing silver plate, and other goods, it was cheaper to melt up the silver coin and use it than to buy the silver bullion, which for the same number of pounds was higher in the market. And so the silver dollar wont out of circulation. Down to 1853 all dollars and subsidiary silver coinage was a legal tender in any amount. But the act of 1853 limited the legal tender power of subsidiary silver in payment of obligations to $5.00, and also reduced the weight in the half dollar, quarter dollar, and dime, in order to keep it in circulation at homo, and prevent its being melted up for commerical use. The under-valuation of silver in the coinage act of 1834 had put the country on the gold basis, and only gold and paper dollars wore in circulation, though for convenience of change in trade silver in five cent coins, ■ dimes and quarters and halves wore 1 still in use. Ute Production of Silver. I The average yearly production of silver from 1860 to 1873 was 9,730,245 fine ounces. During this same period wo coined, including dollars (which had again been restored to coinage) and subsidiary silver, $24,640,184. The silver production from our mines in 1893 had jumped up to 60,000,000 fine ounces per year, and from 1878 to 1893 we coined $538,219,363 of silver. During this period of the largest coinage, silver bullion from the mines went down about 40 per cent in the markets of the world. Thus It is seen that the tremendous increase of the mines, and the discontinued coinage of 10 commercial nations, was what put silver down in the markets, just as a jump in the production of wheat one year from 300,000,000 bushels to a little over 600,000,000 bushels put wheat down in price. It was the law of supply and demand that controlled the prices of

I both silver and wheat, and the farmer has the same right to demand of the nation a law to keep up the price of his wheat as the silver mine owner has to keep up the price of his products. It would simply be ruin to do this verylong for either. The natural law of sup? ply and demand cannot bo suspended. Prices must and will find a level according to the supply and use, as water finds a level according to its quantity, and if a flood of it comes damage ensues somewhere. 4 The Act of 1873. Let us look dispassionately and candidly at the coinage act of 1873, sometimes denounced as the “crime of 1873.” The official reports of the superintendent of the United States mint show that from the foundation of the government down to 1873 only about 8,000,000 dollars of silver had been coined and, including subsidiary silver, something over $140,000,000 altogether. Down to J 873 silver had never been much of a factor as a money in this country. Now turn to the act of 1873, in the general acts of congress, so be found in all leading law offices and public libraries. (Statutes at large, vol. 17, p. 424). Here is the section relating to silver coinage in the act of 1873: Sec. 15. That the silver coins of the United States shall ba a trade dollar, a half-dollar, or fifty-cent piece, a quarterdollar, or twenty-nve cent piece, a dime or ten-cent piece; and.the weight of the trade dollar shall be 420 grams troy; the weight of the half-dollar shall be 12 grams and one-half of a grain; the quarter-dollar and the dime shall be, respectively, one-half and one-fifth of the weight of said halfdollar; and said coins shall be a legal tender at their nominal value for any amount not exceeding $5 in any.one payment. Bear in mind that the grain silver dollar, by the act of 1834, had a little too much silver in it, as compared with the ratio to gold, and, it being more valuable, fled from circulation as the dearer dollar always does. By this abt of 1873, the trade dollar was ordered to be coined with more silver in it than the old dollar had, for the reason that it was desirable to compete in some of the foreigh markets with the Mexican silver dollar of 418 grains, especially those of Japan and China. The records of congress show that every member of congress from the silver states in both houses voted for the new act, "The crimp of 1873,” as it is sometimes called, including the prosen t noted silver senator of Nevada, Senator Stewart. Now, what happened under the five years’ operations of that act. It has been said that silver coinage was dropped, when in fact it was the very beginning of large silver coinage by this nation. Here are the facts as to silver coinage under it, including the dollars, taken from the .report of the superintendent of the United States mint, showing the coinage of silver from 1873 to 1878, during the five years the act was in existence. Amt. Silver Years. ■ — —ft Coined. 1874 $6,851,776 1876 15,347,803 ,1876 24,503,807 1877 28,303,045 1878 28,518,850 That does not look much like the coinage of silver was dropped, or that a “great crime,” as it is charged, was done. Indeed, this was by far the greatest period of silver coinage, up to that date which had evpr been known in this country. It is time that the law limited the legal tender of this trade dollar in payment of Obligations to $5 in any one payment. But there are thousands of men today who remember how it went into circulation, and how it paid debts of thousands of dollars without question, and was at a parity with gold .n all business transactions. Now, carefully note Section 15, as quoted from the act of 1873: It did net demonetize nor limit any previous coinage in this respect. The last clause simply says: “And said coins shall bo a legal tender,” etc. Of course congress could not make a law to reach back and demonetize any already coined, for the legal tender quality of all that was fixed by the law of 1834, and was a contract with the holder of the silver, which could not be impaired. And so tho charge that silver was demonetized by the act of 1873 is not true. But on the contrary, more silver was coined under tho act of 1873, during each of the last four years, than during 60 years of tho previous history of the nation. 'then the Bland-Allison act of 1878 i was passed, leaving tho original act in | force and making the silver dollar of 1 412)$ grains u full legal tender, 16 to 1 of gold. The table given further on, showing the silver coinage from 1879 to 1890, points out the enormous coinage, finally reaching $39,202,908 in 1890, and during which period prices of all products, went down rapidly as silver coinage* increased. If those facts will not show most conclusively how mistaken many people are on this silver question, It would be hard to see what would. But if anything is lacking on this point take tho period of 1890, under the Sherman act of that year, to 1893, when the , law directed the purchase and consump--1 tion of 54,000,000 ounces of silver per year. This enormous consumption of silver by the nation was the final folly. Under its operations silver went down rapidly in price because of the tremendously increased production of tho mines, and other products fell rapidly in price ! for reasons stated further on. Silver Coinage Under the Act of 1878. Now, keeping in mind this tremend-

ous flood of silver production from 1873 to 1898, let us look at the progress of the fall in the price of silver during this period. In 1878 congress passed a new" coinage act which required the coinage of at least $2,000,000 worth of silver each month, at the ratio of 16 to 1, which was done with a view of keeping up the price of silver. During that year the value of the silver in a dollar went up to 93 cents, and the flood gates of silver production in the mines were opened. In 1879 the silver in a dollar had fallen to 87 cents. The production at the mines had so increased that in 1885 the value of the’ silver in a dollar was only 84 cents. In 1886 the silver in a dollar was worth only a fraction over 79 cents. Continually dropping each year, by 1889 the value of silver in a dollar was only 72 cents. The people of commercial nations abroad, who held not only American bonds but millions of railway and other securities, and who would not have silver, began to get alarmed lest we should go to a silver basis, as Mexico and other countries had, and fearing they would lose by our debased currency, began to send our bonds and other securities back, and throwing them on the market. The Silver Act of 1890. So congress tried by another heroic act to bring silver up in price again, and passed the act of 1890, requiring the government to buy 4,500,000 fine ounces of silver per month, about the entire American production not used in the arts. During 1890, under this act, the average value of the silver in the dollar went up to a fraction over. 74 cents. In the first part of 1891 it went up to 84 cents to the dollar, but fell during the year. In 1892 the value of the silver in the dollar fell to a fraction over 72 cents, and in 1893 the value of silver in the dollar fell to 65 cents. And so it was now found, after a trial of 15 years, that this country alone could not keep up the price of silver, and that the nation had gone to the verge of great danger of a debased currency, and in 1893, nearly all parties in congress, except the representatives and senators from the silver mining states, voted to repeal the silver law. What Other Natious Were Doing. It should be kept in mind that, beginning with 1871, 10 commercial nations ceased the coinage of silver and demonetized it. Thus the products not only of our own mines, but the flood of debased silver from the world was pouring in upon us, so that continued silver coinage alone by us would have sent us to silver monometallism, and thus brought on great contraction and disaster. France, Germany and Belgium and seven other nations, from 1871 to 1880, ceased silver coinage. Great Britian did so in 1816. The world’s’ average yearly production of silver from 1851 to 1875 was $51,000,000. But from 1876 to 1890 the average yearly production of silver was $116,000,000, an increase of 27 per cent. The law of supply and demand and its effect in the regulation of prices could not be repealed. It is as fixed as the law of gravitation. The Use of Our Present Silver Coinage. We can use our coined silver in our domestic trade. The government receives and pays out great sums of money here at home, and thus by the use of the silver and silver certificates, which represents our vast sums of coined silver, can keep' it at a parity with all other forms of money. But it was seen that this government alone could not go beyond its $600,000,000 of silver and silver certificates without bringing op the distress and ruin that has overtaken Mexico and other silver basis countries.

Silver Coinage and Dower Prices. Now what is the chief claim in behalf of the policy for the free coinage of silver. Senator Henry M. Teller and its other able advocates give it thus:. “The prices of all products have gone down because there is not free coinage of silver.” Let us see whether these are facts. The office of money is to effect the ex changes of products. "We don’t eat it nor wear it, but we buy with it what we want to eat, wear and use. Mr. A wants a barrel of flour, and in property of his own has only lumber to pay for it. He offers lumber for the flour to Mr. B, but B tells him he has no use for the lumber, and so A sells his lumber, receiving for it a $5 bank note, gives that to Mr. B for the barrel of flour, and the sale is completed and the exchange is made in paper money, at the same price it was held in gold. Similar exchanges are made thousands of times every day. Sometimes in greenbacks, sometimes in bank notes, sometimes in silver, sometimes in gold, and sometimes in silver certificates. But always at the same price for the article sold. Every one knows that is true. It makes no difference whether a bushel of wheat is measuredin a wooden or a metal measure, or weighed on iron or goldplated scales, the price is the same if it is exactly 60 pounds. It makes no difference whether the 50 yards of muslin is measured by a wooden or goldlined yardstick, it sells for the same price if the yard stick is exactly three feet long The price of all products are the same, no odds what tho bushel, or the yardstick, or the dollar is made of; that’is, if the bushel is 60 pounds, and the yardstick just three feet long, and tho dollar is as good as tho best dollar in tho world. No man in his right mind will deny such plain propositions. But if wheat is very scare it will bo highor, and if very plenty it will bo lower in price. If the supply of muslin is leas than the demands of the market, it will raise in price, and if greater the price will go down. If tho supply of dollars of all kinds, equal in purchasing power, is loss than is needed to effect tho exchanges of products and property, then the purchasing power of the dollar will go up, but if tfio supply of dollars of all kinds, of equal purchasing power, is equal to the demand then their power to purchase remains the same. Now let us see how it has boon as to the supply of dollars of equal purchasing power during tho many years of falling prices of products, both of the farm and factory. Here are tho facts and figures taken from the official reports of the superintendent of the mint and from the official reports of other government officers. Products did not go down to low prices until after 1879, and w’o will quote from these officialreports, beginning with that year: Amt. of money in Money in circuYeara. U. 8. per capita. lation per capita 1879 $21.52 916.75 1880 24.04 19.41 1881 27.41 21.71 1882 28.20 23.37 1888 80.61 , 22.91 1884 BLO6 * 22.65 1885 32.87 28.08 - 1886 31.51 21.82 *. 1887 32.89 22.45 1888 84.40 22.88 1889 83.86 22.52 1890 34.24 22.82 Thus it is seen that in proportion to population money steadily increased from 1879 to 1800, from $21.52 for each person to $34.24. This consisted of gold and silver coinage, treasury notes, silver certificates aifd bank notes, the dollar of each kintUboing exactly equal in purchasing power.’ And so these facts from the records show that nothing has gone down in price because there

was aJack of money But it is claimed that pricesnavo gone down because of a lack of silver coinage. Here are the facts from the* official government ■ records on this point, taking two of our, leading farm products for the comparison: ■■ .. Money i Silver coin- circulaWheat Corn age in ■ tion per Years per bu. per bu. United States, capita. 1870 21.01) F>.3B $ 1,378,255 217.50. 1871 1.26 .37 3,104,038 IB.ltr 1872 1.24 .39 2,594.488 18.19 1873 1.15 .48 ' 4,024,747 18.04 1874 .94 ,64 - 6,851,776 18.13 1875 1.00 .42 15,847,893 17.16 1876 .1.03 I .37 24,593.307 16.12 1877 1.08 . .85 28,893,045 15.68 - 1878 .77 .31 . 28,518,850 15.32 1879 I.l<> -37 27,569,776 16.75 1880 .95 139 27,411,693 19.41 1881 1.19 .63 27,940,163 21.71 1882 .88 .48 27,973,132 22.37 1883 .91 .42 "£9,246,968 22.91 1884 .64 .35 28,534,866 22.65 1885 ‘ .77 .32 28,962,176 23.02 1886 .68 .36 32,980,709 21.82 1887 .68 .44 35,191,1181 22.45 ■IBBB .92 .34 33.025,606 22.88 .1889 .69 .28 35,496,683 ' 22.52 1890 .83 .50 30,292,908 ~ 22.82 The circulation of money per capita in 1894 was $24.33, though the average price of wheat that year was oply 49 cents a bushel. Here it is seen that wheat was higher when there was tho smallest coinage of silver, and lowest when there was the greatest amount of silver coined. These facts thoroughly disprove the wheat went down because of small coinage. Lower Prices of Other Things. Here are the figures from the markets on the prices of other things for the 15 years named, showing how rapidly and greatly the prices of manufactured articles went down, .thus showing that agriculture and manufacturing 'are in the' same boat, descending the same stream of low prices: Articles. 188(1. 1885. 1890. 1995. Self Binders W ®225 glso 3125 Mowing Machines 99 60 55 45 Farm Wag0n5...,....... 96 .. .. 65 Carriages <--? .. .. 150 Buggies.... 1-5 .. .. 75 Steel Plows 28 20 18 17 Chilled Plows 17 15 12 10 Cultivators 28 25 22 ’ 18 In the same period bar iron went down more than one-half, nails from $4.50 to $2 per keg, and ’sheeting, shirting, calico, silks, worsteds and all woolen goods decreased in prices still greater. Thus every staple article of agriculture and manufacture' decreased’ in prices nearly alike in the past 15 to 20 years. Let it also be noted that under the law of supply and demand, interest on money during this period went down from 10 and 8 to 6 and 5 per cent. When the money in circulation per capita was only $lB the interest rate was 8 to 10 per cent, but when circulation increased to $24.38 per capita the interest rate went down to 5 and 6 per cent. The law of supply and demand is as fixed as the tides of the ocean, touching and governing all prices as well as interest rates. All of the kinds of money being equal with gold, here is the proof that gold has not advanced in price. The interest rate of gold is about one-half lower than it was 30 years ago. The True Reasons For Lower Prices. Of course there are causes which have tended to a decline in the prices of various products, but the facts given show conclusively that the lack of silver coinage was not one of them. Hon. B. F. Shively, in his speech accepting the nomination for governor (..of Indiana, said: Close your flouring mills to wheat and the price of wheat will go down; declare that coal shall not be burned as fuel and coal will go down, while the price of wood will go up. Thecloseof our mints to silver sent up the price of gold, and,, aent down silver. The official coinage reports show, as have been, quoted, that silver went down the most rapidly in price while the nation was coining it in greater quantity than had ever been known in the history of the world. The mints were not closed to silver during the period of its rapid fall in price, and so the mill and wneat illustration is not applicable; Mr. talker of Massachusetts, and all other noted writers on political economy, bold that scarcity or contraction of money does have a marked tendency in lowering prices. But decreasing prices of neither agricultural nor manufactured products can be charged to this' condition in the United States, for the circulation per capita has steadily been increasing since 1867, when it was $18.28, and reached its highest point in 1892, when it was $24.33. Thus the facts show that prices all commodities, including wheat and other farm products, were higher when the circulation of money per capita was smallest. So it is very plain that other reasons than the lack of money in circulation will have to be looked for.

the real causes of lower prices are found readily enough when we accept the law upon which, the world has always acted, that of supply and demand. The causes leading to larger supply are found in the invention and construction of improved machinery, by which one man does what it formerly required four to do. Putting the cause in a single sentence, it is the application of science to production, by which much manual abor is saved. This improved machintry is found everywhere, in the field and factory, but to a larger extent in the factory, where prices of products have decreased greater and more rapidly than elsewhere. Showing the trend of supply to demand, and consequently lower prices in agricultural production, consider the conditions in 1876, before selfbinding harvesters were invented, by which one man doos the work of three or four. That year we grew 289,000,000 bushels of wheat in the United States. The harvester and other improvements then came; the railway systems were extended into the great wheat growing regions of the northwest, and now our average yearly wheat crop is 450,000,000 to 500,000,000 bushels. Prior to 1870 Argentine and other South American countries imported wheat and flour to supply them. But in 1885 Argentine increased its wheat production to 100,000 tons, and has now become an important wheat exporting country. Australia, India and Russia have all greatly increased the production and export of wheat. The application of science to production has reached all countries, and hence the supply has in-' creased faster than population and demand, till now the world’s wheat crop is annually from 2,300,000,000 to 2,700,000,000 bushels. Russia alone increased her wheat production from 550,000,000 1895. c Those facts are ample in their exSlanation of the decrease of prices Own to 1892, when under the influence of two successive aifnual crops in this country, averaging nearly 600,000,000 bushels each, prices went down to 67 cents per bushel. But there was another cause entering into the extremely low prices of 48 to 55 centp a bushel tor wheat during the years 1893 to 1895. During this period several millions of people were out of work, by the shutting down of factories under the influences at work during that period.

Ferguson <fc Wilson have private funds to loan m any amount if security is acceptable. Call and see us before closing deeds with others; V *■ Fehgvson dtWILSOW.