Rensselaer Republican, Volume 27, Number 49, Rensselaer, Jasper County, 13 August 1896 — Page 9

SUPPLEMENT TO THE RENSSELAER REPUBLICAN.

THURSDAY,, AUGUST 13, 189 C.

THE SILVER QUESTION.

' An Address Delivered at Fort Wayne, Ind., Before the Soldiers’ Sons and Citizens’ Republican Club, Aug. 6, 1896, by Robert S. Taylor, Although' I am a republican find speak to-night to a republican club the •subject which I shall discuss is a matter of business rather than politics, and of "business which concerns us all exactly alike under whatever party flag we have been accustomed to march. The Republican platform adopted at St. Louis contains this declaration on the subject of money: The Republican party Is unreservedly for sound money. It caused the enactment of the law providing for the roßnmptlou of specie payments in 1878; since then every dollar has been as good as gold. We are unalterably opposed to every measure ctflcidated to debase our currency or impair the credit of our oouutry. We are therefore opposed to the free coinage of silver except bf_Jnternatlonal agreement with the leading commercial nations of the World, which we pledge ourselves to promote, and agreement can be obtained, the existing gold standard must be preserved. All our silver and paper currency must bo maintained at parity whh gold, and we •favor ail moasures designed to maintain Inviolably the obligations of the United State* —and all our money, whether oolu or-paper, at tlio present Btaudard, the standard of the most enlightened nations of the earth. A convention assembled at Chicago in the name of the democratic party adopted a platform which contains this ou the subject of money: We demand the free and unlimited coinage of both gold and silver at the present legal ratio of 10 to 1, without waiting for the aid or consent of any other nation. We demand “-that the standard sliver dollar shall be a full legal tender, oqnnlly with gold, for ail debts, public and private, and we favor such legislation as win prevent for the future the demonetization of any kind of legal tender money by private contract. The platform of the populist party adopted at its convention at St. Louis echoes the same demand. I prefer not to take the delicate responsibility of deciding whether the men who met nt Chicago constituted a democratic convention or not, or whether we are really confronted by one free silver ticket or two. Looked at from the Trout it appears to bo-one, but looked nt from behind there appear to be two. And in order to dodge those questions I shall speak only of the Chieago convention and of its utterance as the Chicago platform.

It would be impossible to frame a sharper Issue than the one here presented. For ouee. political platforms say something aud mean what they r*' ' i say. The question comes to us with the directness of a -referendum. “Shall it be free silver at 1(5 to 1? All in favor say Aye; all opposed, No.” Aud it is well that it should be so. Nothing we can do—no tariff legislation we can enact, whether it be, as I would have It, in the direction of more efficient protection, or as my democratic neighbor would have-It, In the direction of freer trade, can give us solid prosperity until we know what a dollar Is and Is to be. lam glad, therefore, that the question has come up just ns it has. I run to meet the flglit. Let’s settle it; think it out, talk it out, vote it out nud be done with it. Then we can turn to other things— tariffs, trusts, monopolies, labor questions—all Important to the public welfare, but all awaiting the decision of the money question. Let me explain first the precise question which is to be decided. We have nt the present time about $1,773,000,000 of money In the United Stares, made up approximately as follows: Gold coin $5(17,000.000 Sliver dollars 480,000,000 Sliver fractional....*.... 75,000,000 Treasury Notes—greenbacks ..., a~. .... 34(5,000,000 Treasury Notes coin notes 129,000,000 National Bnnk notes 226,000,000 $1,773,000,001 Of the silver dollars $342,000,000 are represented by silver certificates and of the gold $42,000,000 are represented by gold certificates, both of which clrcu late In place of the coin. In stating the amount of money we have It would be inaccurate to Include both, and so I omit the certificates. This gives us as a classification of our total currency sl,072,000,000 In coin and $701,000,000 in pa.per. Tffe gold coin, stiver dollars, and U. 8. treasury notes, amounting to $1,472,000,000 are all legal tender In unlimited amounts; the fractional silver Is legal tender for amounts not exceeding $lO, and the bank notes are

legal tender at all. It has been the policy of the government to keep all this mftne. at an equality of current value —gold, silver and paper, all circulating everywhere, and all equally good everywhere. As a result we have had.for twenty-five years past the best money we have ever had, and as good, in my opinion, as we possibly could have, barring the relaxation in recent years of some precautions necessary to keep It good.' STANDARDS AND RATIOS. It is impossible to carry on modern business without a money •standard fixed by law. The law must define what a dollar is by reference to a fixed quantity of gold, or silver, or both, or somea? thing else. • Under our, present law our gold coins are made of an alloy containing nine parts of pure gold to one part of base metal. This is called standard gold. The silver dollars have the shme proportion of alloy. Our legal unit and standard of value is a gold dollar containing 255-10 grains of standard gold; 'and our silver dollar, which is declared by law to be equal to the gold foliar in value and is equal to it in legal tender power, contains grains of standard silver. If you divide the latter of these numbers by the former you will get a quotient of 15.988-)-. That is, the silver dollar is fifteen and nine hundred ana ninetyeight thousandths times as heavy as the gold dollar. That figure is so close to 10 that in our common speech we call it 10, and we say that one silver dollar is sixteen times as heavy as one gold dollar. That is what we mean by 10 to 1.

It is impossible for the government to coin gold and Silver without fixing the weight and fineness of each kind ot ■ coin; and this, as I have shown, establishes a ratio of weight, which is called the coinage ratio, or legal ratio. We did not always have a coinage ratio of Ui tu 1. Under our first coinage law the ratio was 15 to 1; that is, 15 ounces of silver were taken to equal in value 1 ounce of gold. In France, and a number of other European countries tbe coinage ratio is 1514 to 1. __ There is also a market ratio, or, as it is sometimes called, a commercial ratio. Tills depends on the relative values of the two metals in the market; that is, on the rate at which one can be exchanged for tbe other in tbe form of bullion. At tbe present time 'silver is Very cheap. You can exchange one ounce ,of gold for about 31 ounces of silver. You would express that relation by saying that silver is 31 to 1. Copper is cheaper stilL You can get r.bout 3,000 ounces of copper for 1 ounce of gold. Hence you would say that copper is 3,000 to L

The legal, or coinage ratio being fixed by laic, remains until c hanged by law. But the market ratio varies. It has been found impossible to keep the two ratios the same for any length of time. As will be seen later, many attempts have been made to conform the legal ratio to the market ratio, but however exactly they may coincide at the start the fluctuations of the market soon separate them. All the silver dollars we have were coined on government account; that is, the government bought the silver bullion in the market aud coined the dollars In, Its mints as its own. The coinage of our present stock of silver dollars began in 1878. Silver was then worth on the market about 18 to 1. It has been falling gradually since that time, with occasional fluctuations, until it is now worth, as I said, only 31 to 1. It being the policy of the government to keep all the money* in circulation equal In value, It Is manifest that the continued fall in the price of silver, and the continued accumulation of silver dollars were making that task more and more difficult and dangerous. And 60, since November, 1893, comparatively few of them have been coined. At the present time the Intrinsic value of the silver in a silver dollar is about 52 cents. I shall speak of it for short as CO cents.

The free silver advocates propose now to begin the coinage of silver dollars again, and this time, not as heretofore, on government account, and with some limitation of amount, but with the doors of the mints open and an Invitation to everybody to bring his sliver and have It coined at the ratio of 16 to 1 without limit. And the dollars so coined are to be placed by law on the same footing with gold dollnrs, ahd the people are to be compelled to take them as good dollars, no matter what they may be worth In fact THE ISSUE. This, therefore, is the issue: Shall we stand by our present system, keep our gold, silver, and paper as we have them now, and make it a first object to maintain the equal and stable value, of all alike, as the Republican party proposes; or shall we make It a first

object to coin all the silver dollars we can and let gold and paper take their chances, as the Chicago platform proposes? To one who has never looked into the subject this may seem at first blush to be a small question to make so much ado about. “Certainly,” you say, “why not coin all the silver we can? If one silver dollar Is good, two are better; let’s have all. we can get.” And If it were a mere question of having few or many, I might say so too. But suppose the fact to be tha*t our present three-legged system of gold, silver and paper Is so organized that it Ts essential to its stability that there shall be a limit to the proportion of silver in it, and that It is reasonably certain that unlimited silver coinage .•_.. . j, ■ - would destroy ther balance of its parts, drive out the gold, break down the stiver, upset values, derange business and . precipitate a financial crash as Impossible to forecast as the devastation of an earthquake;,then the question becomes a serious one. And that is the view* of It which we have to consider. TIIE PRACTICAL USE OF SILVER. Before taking up the more difficult and important aspects of the subject there are two points which may tie touched ifi passing. The first is that the free coinage program takes no account of the real demand for sUwr money , but proposes to force it on the people against their wishes. The kind of money which people like best, and which is best adapted to their use is a matter of national habits, tastes and degree of civilization. Barbarous tribes have used shells, teeth, stones, and many things which we would consider of no value at all. The 383 millions of people In China use ordinary transactions a coin mode from an alloy of oopper, iron and tin worth about ono-teuth of a cent of our money. At the trading posts and in large transactions silver is used and the government lias lately authorized the issue of a silver dollar. But few of the people ever see any kind of money except the coins which I have described, and which go by tho name of "copper cash.” That would be poor money for Americans, but it meets the wants of the Chinese. When a eopj>er coin or two represents a day's work, it is a better money for ordinary purposes than gold or silver. In the United States a week’s wages In copper would be more than a man could carry home. A little higher In the scale of civilization we find India, Mexico and parts of -South Amorica, where silver Is the standard money, with copper for small transactions. At the top of the scale. In the United States, Great Britain and most of Europe, we find gold, silver and copper—gold as the standard money, the basis of paper and medium of international exchange, -with silver for small transactions, and copper, nickel or Tirooiae for the smallest ones. This classification is not tho result of chance. It Is a process of natural selection. Each nation of the earth as it works its way upward in wealth, intelligence, commerce, and the arts, wants better and better forms of money. The people of tlie vUnited States want silver for daily use In small transactions Just os they want nickels and copper cents for still smaller ones. But they do not waut silver as the sole or principal money of tne country.

As proof of that fact soo where the silver dollars are now. There are about 378,000,000 dollars in the vaults of the U. S. Treasury and about 52,000,000 in the hands of the people; while of gold there are about $100,000,000 in the treasury uml $467,000,000 in circulation. And this, although tho government has for years used its best efforts to get the silver dollars into circulation. The people simply will not havo them. I do not mean to say that all the silver dollars in the treasury are serving no function ns money. Thera arc outstanding $312,000,000 of silver certificates which represent that much silver In the treasury and circulate os money. But the fact remains all the same that the people will not take out and use more than about 60,000,000 silver dollars, and never have.

The people are willing, to be sure, to take the paper certificates which represent the sliver In the treasury and uso them as money. And if we adopt the free coinage policy we shall find that It is no part of the plan to take the unlimited quantities of silver dollars which will be coined away from the mint and circulate them among the people. That would be Impossible. Their owners will want silver certificates In place of them and want those made legal tender money by law. But what Is the sense In making Illimitable quantities of money which the people do not want and will not use? If the dollars are never to be taken out of the U. 8. treasury, why coin them? Why not simply, deposit the silver bricks and

Issue the certificates? And if the treasury is to be turned Into a for sllTer, coined or uncoined, which is never to be used directly as money, but only as the basis of certificates, ’why limit the deposits to silver? Why not take In Iron, copper, nickel and lead, and Issue certificates on them? And If the metals, why not other property as well—wheat, corn, cotton, whiskey, lumber?.— ’’... In fact that is, or has been, the monetary scheme of the populists. It, has been proposed by that party that the government shall establish warehouses all over the country and buy up staple commodities and issue notes for them as legal tender money. The only real difference between that and the free silver program is one of degree. And in one respect the free .silver program is more objectionable than the other. It starts in by fixing double the market price on the commodity to be purchased.

THE FAVORITISM OF IT. * » * This brings me to the second of the two points I mentioned a moment ago. It is that the free coinage proposal involves an unfair partiality toward the silver mine owners. As I have said, it is not proposed that the government shall buy the silver and coin it, as heretofore, but that the private owner shall have the right to deposit his silver and have it coined for him in unlimited amounts. And as be will not in practice take the dollars away, but paper dollars in place of them, the real transaction will be a sale of the silver to the government; and at a ratio of 1C to 1* it will be a sale at nearly twice the market value. This will be a fat,'deal for the mine owner, but how about the rest of us out of whom he will make his profits? When the government buys the silver and makes the dollars, as it has done’ heretofore, the profit, if I there be any, accrues to tbe treasury, and so to us all. But by this scheme the mine owner will get the profit. He will get a legal dollar for 52 cents’ worth of silver. And that will be no small sum. The average production of silver In the United States for three years past at its commercial value has been about $40,000,000 per annum. I suppose it has paid to work the mines at the market price of silver, or they would have boon stopped. If so, a sale of the whole output to tbe government—at- double price would mean $40,000,000 per annum more profit. Is there any justice In the purchase by the government of the product of the silver mines at this exorbitant price while the product of the farms is left to find a market the best way It cau?

TIIE MILK IN THE COCOANUT. Tills exposes to view one of the mainsprings of the free silver movement. On the part of the mine owners it is simply a huge speculation. That is why the senators and representatives from the silver producing states stand together on that issue to a man, aud are ready, as” the republican senators from those states were, to break faitli with their party, boycott the government and bankrupt the treasury in order to force a concession to their demands. Do they know the truth so much better than any one else? Has Wisdom established her sole habitation In tho Rocky Mountains? Nonsense. So far as these men are concerned, t,hey are simply on the make. To what extent they may think that they have convinced themselves that they are right I will not undertake to say. Selfinterest will do wonders in that kind of conversion. But the fact remains too plain to be disguised that the impelling force of the free silver movement in the silver producing states is to make a market for their product at tho expense of the rest of the people.

THE CHEAP MONEY DELUSION. But this Interest, powerful as It Is, would got have been able of itself to set In motion the free silver cyclone which has blown down the Democratic party. Ever since the close of the war there has been a considerable sprinkling of men In the United States who believe in cheap money. The fundamental points of this philosophy are (1) the Hj.ore money the better; and (2) the cheaper the material you make It of, the more you can have of 1L This idea found Its culmination In the proposition of the greenback party that the government should supply the people with money by the issue of fiat paper; that Is, paper In .the similitude of bank notes but not carrying any promise of paying anything to anybody* Thus, there was to be printed on one piece of paper ‘This Is a dollar,” and on another, "This Is ten dollars.” These were to be made legal tender by law, and taken out and used by the people as money. THE FOLLY OF THIS IDEA. The kindest thing which can be Mid of a man who believes In snub a scheme is, that he baa lost his head on the sub-

Ject of money.- Much abstract speculation has made him mad. This Is the way he reasons; “Money is a measure of relative values; we say a horse is wy-tli a hundred dollars and a cow twenty-five; that means only that a* horse Is worth four times as much as a cow. It is also a medium of exchange. A man sells his horse for a hundred dollars, not because be wants the hundred dollars, which he can neither eat, nor drink, nor wear, but because he wants a cow, which be buys for twen-ty-five dollars, and a suit of clothes, which he buys for twenty dollars, and so on. In order to perform these functions it is not necessary that the money shall have any value. A golden yardstick will measure doth no better than a wooden ope.” And so by this sort of philosophizing a man works himself around by and by to. the idea that all the uses of money are conventional and artificial, and that therefore any kind of token authenticated- by the stamp of the government as the common authority S ill d‘o Jnet as w< T as gold or silver, or promises to pay in those metals. * MONEY IS PROPERTY. It is quite true that money is a measure of value and a medium of exchange, but it is also something more than these; it Is property. And it is as property that It attracts human desire and stimulates human effort. It is as property that men think of it, covet it, and struggle for IV It is for this that they toil without ceasing, brave all dangers and take all chances, not for imaginary units of value or Instruments of exchange. The fact that money is exchangeable for other things adds to its value—may be said, indeed, to impart to it its chief value. It Is all kinds of property in one—food, drink, clothes, travel and amusement Nevertheless it is as property In the true and concrete sense of that word that men think of it and desire It It Is property first and a standard of value and medium of exchange next Hence It is that there Is no such thing as good money that is not good property. And to be good property money must be something which men value In and of and for itself, or to which they attach a value because of some promise or assurance which it carries of something behind or beyond Itself. Tbe value of a thing is the estimate of Its desirability In the minds of men. The measure of its value Is the intensity of human desire to possess it. What nobody wants to possess as his own has no value as property; what all people or some people want a little has some value; what all people want very much has great value. It was decided by the foremost nations of the world centuries ago that gold and silver are the best forms of property for use as money. From that decision there Is no appeal. It was in ignoring that fact tlmt the green backers made their fundamental mistake. They thought the question was open to argument. They supposed that If they

could prove by reasoning that Irredeemable greenbacks ought to serve the purpose of money os well as coin they would have good right to expect that they would be adopted by the people. And their party came to grief because It collided with the rocky fact that the world has made up Its mind that It will not extend its confidence to any kind of money which does not consist of gold or silver, or some reliable promise to pay in those metals. TIIE MAIN QUESTION. All that I have said so fay touches only the engff parte of the subject. The objections to free silverism which I have stated are valid ones, but not the most Important ones. Of those which I regard os more Important the first is that the thing which the free silverists propose is impossible- They talk about gold and silver as the money of the constitution. They call those of us who stand by tho present system gold monometallists, and call themselves bimetallists. They give the people to understand that by placing gold and silver on on equal footing at the mint we shall have the fullest possible benefit of the circulation of both of them as money. That, I say, is impossible. I say that with free coinage of both gold and silver at suoh a ratio that the gold in a gold dollar is worth more than the silver in a silver dollar the two metals cannot both stay in circulation. You might as well try to circulate two kinds of gold dollars, one having more gold in R than the other. In such a case every bank, every‘ticket agent, every merchant, every person through whose hands money flows becomes a strainer to strain out the more valuable coins for speculation and pass the others on for circulation. Hence the- free silver plan la a delusion and a snare. It cannot accomplish what U promises. * It cannot give us

gold and silver. It will mke the circtt latlon of gold impossible, and leave os only silver. It is not bimetallism, bnt silver monometallism-. This Is such an important fact In tnis discussion that I am not content merely to state It. I must prove it. And I can do that only by the facts of history. The recital of them will be somewhat ■ & . . ■-—* tedious and I cannot promise that they will be Interesting except as your own Interest in the subject shall make them —; j.. , j ; j. _ so. But if you want the bottdto facts there Is no> other way to get them. GRESHAM’S LAW. For a good many centuries after gold and silver came into fashion as money little attention \t-as paid to the laws affecting their circulation. So far as 1 i know, it was In England, and aboul \ three hundred years ago. that the subI ject was first studied. Her wide eom--1 mcrcial relations brought her both gold and silver from ail parts of the world, i but she experienced much difficulty in keeping them both, iu circulation. The cause of the trouble was .first pointed out by Sir Thomas Gresham, a financier of tbe time o< Henry tbe Eighth, in the statement that “if debased coin j is attempted to be circulated with full ! valued coin all of the latter will disapJ pear from circulation and debased coin | alone will remain, to tbe ruiij of com- | merce and business”; or, as it is sometimes put, “bad money drives out good.” This principle is known as Gresham’s law. The first attempt to conform legislation to it, so far as I Know, was in 1717. At that time silver was being exported from England, leaving only gold In circulation, to the great inconvenience of the people. Sir Isaac Newton- (the astronomer), who was then director Of the royal mint, made a report to Parliament pointing out that the reason why silver was leaving tbe country was, that it was over valued by tbe law as compared with golfl. In his report he said this: The demand for exportation (of silver) arises from the higher price of silver in other places than in England In proportion to gold * * » and may therefore be diminished by

lowering the value of gold in proportion to silver. If gold In England, or sliver In East India, could be brought down so low as to bear the same proportion to one another la both places, there would be here no greater demand for sliver than for gold to be exported to India. And if gold were towered onto so as to hone the same proportion to the Biker money in England which it hath to silver in the rest of Europe there would be no temptation to export silver rattier' than gold to any other part of Europe. At the time this was written the English guinea passed by law at 21s 6d in sliver, whereas the actual value at market rates for silver was only 20s Bd. That is, silver was over valued in Its legal ratio nearly a shilling to the pound, and was In consequence leaving the country to make room for the cheapet gold. 81r Isaac Newton’s proposal, which was atlopted, was, to try as an experimental measure, a reduction of the legal value of the guinea from 21s 6d to 21s. But it proved that he did not carry his equalizing process far enough. Sliver was still overvalued and still continued to leave the country, until England' came to have a gold currency. From that time until 1816 the English monetary system was based theoretically on the double standard. That Is, gold and silver were entitled to coinage on equal terms, and both were legal tender without limit at a ratio of 21 shillings of silver to one sovereign of gold. But as this was an overvaluation of silver the only silver coins in circulation were those which liad been worn or clipped to such extent that the real value, of the silver In them was less than the gold value of a shilling. As Sir Isaac Newton had pointed out, there was no temptation to export such coins, and they remained In the country; aud they were too scarce to drive out the gold. But they formed a very scanty and Inferior money for ordinary trans* actions. PRESENT ENGLISH SYSTEM. In 1805 a discussion of the subject begun which led the way to a law enacted In 1816, which forms the foundation <rfrthe present English system. Under tnat system the standard coin is the gold Sovereign, which, with the half-sovereign, Is legal tender without limit a m to amount The unit of silver coinage is the shilling, equal In value by law to the twentieth part of a sovereign, and to about twenty-five cents of our money. There are several other silver coins, some larger, some smaller. The silver coins were all made originally of less Intrinsic value than their sacs value—a difference which has been very much Increased since by the fall In sliver. They are legal tender to the amount of forty shillings—about ten dollars In our money. All the silver money Is coined by the government on Its own account from silver purchased In the market. The amount of It Is limited te the practical wants of the peo-