Rensselaer Semi-Weekly Republican, Volume 21, Number 25, Rensselaer, Jasper County, 19 December 1899 — FINANCIAL BILL [ARTICLE]

FINANCIAL BILL

Representative Overstreet Opens the Debate In * the House. THE GOLD STANDARD Shown to Be the Only True Measure of Value. ______________ History of Former Monetary Legislation Fully Reviewed Silver Given Due Credit For Its Use as Money, In Fact, Under the Proposed Law It Would Hold an Honorable Posi* tion—Passage of the Measure Would Place the United States In Accord With Other Nations. Washington, Dec. 11.—Mr. OverStreet, of Indiana!, opened the debatfl on the financial bill in the House today. He said : “Mr .Speaker—This country presents the anomalous situation of being the 1 absolute and unchallenged leader In almost every field of advanced thought, whether to science or litera ture; certainly the most advanced to material development and the control •f trade; by far the superior to manufactures and growth of markets; and yet It is the field of greatest controversy upon the subject of the standard of value, and the proper media of exchange **No nation has devoted: more time to public discussion and legislative consideration of the question of finance than the United States. The past twenty-five years has witnessed the greatest interest in the subject of •ay similar period to the history of the Nation, and during the past four years every possible phase of the subject has been presented. Continued discussion very naturally develops various proposals for remedy of actual and fancied evils, and the time seems ripe foi an honest and careful effort at a fair solution of the problem, free from unnecessary criticism end attack upon the propositions of others. “Notwithstanding the fact that the so-called money question continues In great interest among our people, and notwithstanding there have been occasions when serious doubt clouded the situation and produced gra.re fears lest the entire fabric of our monetary aye tern might be seriously shaken, yet it Is to the great credit of the government that every dollar of our money In circulation is absolutely sound and unquestioned. Throughout the entire time of troublous discussion and debate. In periods when public confidence had well-nigh disappeared, and panics produced serious dangers ae well asithe periods of our greatest prosperity, every dollar of American money nas been at a parity with the . best dollar in circulation. This condition lias led many people Into the erroneoue belief that there was no need for legislation, and that the best that the government could do would be to let the subject alone. Sueh people are not familiar with the frequent pledges of the government to maintain the parity of our money, declaring, by congressional acts, the honest purpose of the government to faithfully and surely guarantee the full parity of all money In circulation. The present parity depends entirely upon such declarations and guarantees, but Its maintenance and enforcement rests with the judgment or caprice of the secretary of the treasury, who, by a single order directing the use of silver In the discharge of our obligations, may completely destroy the parity, and shift the standard to the metal so used. It seems far better to attempt a proper regulation of the question by a clear and permanent statute, rather than depend upon occasional declarations by the government of its intention. It Is far better to end the matter by a public law. ■which shall be plain and unequivocal, rather than rely upon proposals of what may or shall be done at some future date, or leatve so dangerous an option within the control of one man, whether he be the President or his financial adwiser. FORMS OF MONEY. “All of our money in the United States is under federal control, and th« laws authorize ten (10) different kinds, viz.: Gold coins, gold certificates, standard silver dollars, silver certificates, treasury notes issued under the act of July 14, 1890, subsidiary silver, United States notes (greenbacks), national bank notes, nickles and coppers. Each kind is in circulation to-day. all at parity, every dollar equal in purchasing and debt-paying power. Gold coins, starffiiard silver dollars and treasury notes issued under the act of July 14, 1890, are full legal tender. United States notes (greenbacks) are full legal tender, except for duties on imports and interest on the public debt. Subsidiary silver Is legal tender for amounts not exceeding ten dollars, and nickels and coppers are legal tender to thp extent of twenty-five cents. Gold certificates, silver certificates and national bank notes are not legal tender. “The legal tender quality add« no value to the money, but merely makes provision whereby debts may be discharged by the tender of specific kinds of money, which being good, the creditor is bound to accept. • •••*** THE STANDARD. “Money fa a medium of exchange, and where there are different varieties there must be a common measuremsnt left exehiaivflfly to the there fa, and «lw«y» b*» been in every community daallng to trade, a com"

.AIM': ‘ ;■ ■ • ". J •my when effort fa made to control by statute such measurement of value, different from the method pursued tn common trade, that confusion arises. • •*•••* “There can be but one standard of measurement at a given time. Amy attempt to couple two standards differing in any degree in essential characteristics will shift the standard to the weaker Link. If the basis of a standard of value should be two metaite, each possessing characteristics essential to true measurement, there would still be, in effect, but one standard. Value is determined 'by such a multitude of circumstances, bearing such complex relations to each other, influenced by supply and demand, utility, adaptability, human desire and: other causes without number, that exchanges of property can easily be effected only by the common use of a variety of the media of exchange, each representing accurately the units of value as measured by the standard into which It can be converted on demand. • ♦ ♦ • THE HISTORY OF OUR STANDARD. “The first effort In this country toward establishing a monetary standard was in 1786, when the Congress of the confederation Chose as the unit of value the ‘Spanish milled dollar,’ containing 375.64 grains of pure silver. There was then no mint in the United States and the ‘milled dollar’ was never coined to America. “The first coinage law under the Republic was enacted April 2, 1792, and sought to establish a double standard of gold and silver at a ratio of 1 to 15. Whatever the result of the operation of the law and the failure of the two metals to maintain the relative values fixed by statute, nevertheless it is quite clear that it was tfhe intent and purpose of the law-making power to provide and legalize a double (standard of value. The subsequent act of June 28, 1834, changing the ratio from 1 to 15 to 1 to 16 by reducing the weight of the eagle from 270 grains to 258 grains was in the hope of maintaining the double standard by regulating the ratio to conform to the commercial values of the metals. “Less than three years thereafter, by the act of January 18, 1837, which changed the ratio from 1 to 16 to 1 to 15.988 by again modifying the quantity of metal in the coins, the effort to maintain the double standard was apparent. The remarkable discovery of gold in California in 1347 and 1848 and to Australia to 1851 'had a. material influence upon the relative value of gold and silver, and the bullion to the silver coins in the United States increased in value beyond the value noted by their face. This condition bqre fruit in the act of February 21, 1853, which provided for the reduction of the amount of metal in the silver half dollar, quarter and dime and prohibited the further coinage of the subsidiary silver coins except upon government account. The bullion value of a silver dollar prior to 1853, and indeed prior to 1878, was the great proportion of the time fa excess of the face value, and comparatively few were cefaed. “The difference between the bullion and face value of silver coin accounted for their withdrawal from the channels of trade as a medium of exchange and their conversion into commodities regulated in value by the laws governing trade and commerce, irrespective of the statute making provision for their circulation as money at fixed valuations. The necessity for small change created the demand for the half dollars, quarters and dimes, which remained in circulation because the bullion was reduced and circulated at par because of the guarantee of the government. By the provision of the law these subdivisions of the dollar were ‘paid out at the mint in exchange for gold coins at par,’ and there has never been a doubt but that their redemption would be equally at par. The struggle of the government to maintain the double standard by law continued for nearly sixty years. The shifting of the ratio between the two metals was met by the change of statute. The universal experience In business transactions marked the withdrawal from circulation of the undervalued coin. “The debates in Congress just prior to the passage of the act of Feb. 21, 1858. clearly mark the change of sentiment against the further effort to maintain a double standard. It was plainly claimed upon the floor of the House that in practice the gold standard was in force, and that It was the clear purpose of the government to accept the single gold standard. While no statute was made to this end. the operations of the lawn of trade gave recognition to this basis of values. No effort was made to change this sentiment, and for twenty years the question of coinage commanded but little attention by the American people. The struggle of the government through the civil war crippled the credit of the Republic, and for a time specie payments were suspended and the vovernment degenerated to a paner basis. DAWN OF A NEW DAY. “The act of March 18. 1869. ‘To strengthen the public credit’ pledged the government to the payment of Its demand notes and obligations In coin. This was the dawn of a new day io American finance, and marked the resurrection of government credit from the fallen. The only coin in circulation ait the time of the passage of the act of March 18, 1869. was gold. The subsequent provision for the redemption of the demand notes and the universal policy of the government to make i'edemption in tire best cein known at the time of the redemption, demonstrates beyond doubt, that this pledge of the government has been faithfully kept. It was but a short ston. in principle as well as in time, to the provision fa the act of July 14. 1870. *To authorize the refunding of the ne Penal debt,’ which made the bends of that fawje ‘redeemable fa coin at the present standard of value.’ “The steps approaching the adoption off the gold standard became short and rapid. For five years prior to 1873. the question of legalizing the gold standard was under discussion in flnnncfal riivtos. As early a« the winter of 1869 a bill was prepared In th* Treasury nonartment eomtaHing prorMon to-•''scor-tlruance of the coinage of th® silver dollar, and the adoption of the

gold dollar piece, at the standard weight of 25.8 grains, as the unit of value. • • • I “On April 25, 1870, this bill, as ‘S. , 818,’ was introduced, and on Dec. 19, following, was favorably reported. Brom the date of its preparation, in all of its forms, and throughout its discussions. covering several sessions, the provisions before mentioned remained intact Not only that, but these I two provisions were the only provis--Ims relative to the standard of value, ■ and the sliver dollar, ever contained in the bill, either as it was originally drawn, or throughout its entire consideration. ♦ ♦ • The bill became a law Feb. 12, 1873. For more then a quarter of a century preceding that date, the commercial world had treated gold as the standard of measurement of values. The ‘act of 1873’ was merely the policy and practice of our people, crystallized into statute law. • * • “If there had been no further legislation concerning the coinage es silver, there would exist today no single doubt of the money standard of the United States. The Jaw of Feib. 12, 1873, clearly adopts the gold: one-dol-lar piece, at the standard weight of 25.8 grains of golds as the unit of value. That statute has never been repealed. nor directly amended, aind by legal construction Is In force to-day. Yet subsequent acts have so affected It that there is some doubt as to whether gold is fully recognized as our monetary standard. The act of Feb. 28, 1878, authorizing the coinage of the standard sliver dollar, and: the act of July 14, 1890. directing the purchase of silver bullion and the Issue of treasury notes thereon, brought Into circulation such a tremendous quantity of silver guaranteed by the government to circulate at par that the burden of the government was so increased as to make doubtful the strength and stability of the standtard. “The fall in the price of silver gave courage to the advocates of cheap money, who, sought, by restoring the silver dollar to circulation at less than its Intrinsic value, to accomplish what they had failed to aceompUsh In their battle for cheap paper money at am earlier period. Public sentiment so suddenly changed upon this question that a free coinage bill passed the House of Representatives on the 13th of December, 1876, by a vote of 167 to 53. Fortunately, it was not acted upon by the Senate. A similar measure passed the House on November 3, 1877, by a vote of 163 to 34. THE BLAND-ALLISON ACT. “Early fa the year 1878 this bill was considered by the Senate and a compromise effected, resulting in the passage «f the so-called ‘Bland-Allison’ act on the 15th day of February, 1878. With all of the Ills which this measure brought upon the country k was far to be preferred to an absolute freecoinage bill, which threatened the country at that date. • •••••• “The rapidity with which the stiver dollars were coined and issued into circulation greatly stimulated the advocates of cheap money, wbo became restless at the delay oeqasfaued by the mints, which <ere not able to turn out the money as rapidly as the people desired, and the law of July 14, 1890, providing for the immediate Issue of treasury notes based upon the bullion purchased to be redeemed by the dollars as coined, enabled the Issue at the money more rapidly than was provided by the capacity of the mints. “By the act of Sept. 26, 1890, Congress discontinued the coinage of the one-dollar gold pieces, which the law of Feb- 12, 1878, bad declared to ‘be the unit of value.’. r , ’Phis* act further confused the legal rtatus of the standard. White the actual existence of the gold one-dollar piece is not essential, yet It halving been declared by law to be the ‘unit of value* Its discontinuance cast doubt upon the character of the standard. “The purchasing clause of the law of July 14, 1890, wag repealed November 1, 1893. So grievous had grown the burden on the government because of the vast Issue of a depreointad coin that confidence in .the government’s ability to maintain it was stakes. The same law which repealed ther purchasing danse of the act of July 14, 1890, contained the provision declaring It to be tfhe fixed purpose of the government to maintain its gold and silver ‘of equal Intrinsic and exchangeable value. • • * * || I‘UBLIO CONFIDENCE SHAKEN.! “The tremendous Increase of stiver! coin under the operation of the laws! of 1878 and 1890 created a doubt as! to the ability of the government to! nialntajfa .the parity of all of its money.■ Prior to 1873, when the gold standardH was adopted, there had been lesuedß by the government only 8,081.288 silverl] dollars. From February 12, 1878, whenll the recolnage of tta silver dollar wasll authorized, to November 1. 1893, whenll such coinage was discontinued, thereM were coined by the government 482,4 367.376 silver dollars. Upon this lastM date there was not a silver dollar irjl circulation whose face value equaledl its intrinsic value. The difference bell tween the intrinsic and face value waal a government obligation, eo establl llshed by congressional act. No otheal method of maintenance of .the parit’ll of silver with gold, other than tliril pledge of the government, wa s known I to the law. The ability of the govern! ■ ment to bear this burden was nevell questioned. The mere money obllgaf! tion hnimsed by the law created ul| serious embarrassment. It was thll principle involved, coupled with thf! repeated efforts by very considerabll! number of the people of the countr|K to estalblisfli absolute free coinage «■ silver, which shook pulflic confld«fa»! and produced a fear that a change a K the monetary standard would result. 11? “if the legal standard to-day Is tilß gold 'Standard, under the act of 1871 W a }x>sitive statute to that effect crip do no harm. If, on the other haul ■ there is any reasonable doubt, ft shouft J bo di smelled by a statute plalp auIB clear in its terms, and absolute to d|l effect The Amerioen government !|j too great for it to hesitate to make a||| solutely certain any of its policies; mW