Rensselaer Semi-Weekly Republican, Volume 22, Number 12, Rensselaer, Jasper County, 30 October 1900 — NOT A GENUINE ISSUE [ARTICLE+ILLUSTRATION]

NOT A GENUINE ISSUE

Secretary Gage Exposes the Pretense of Imperialism. IT IS ONLY A WOODEN HORSE Concealed In Which the Bryanites Hope to Enter the City. Value* WUI Not Respond to the Bryan Reasoning—A Convincing Presentation of the Fallacy of the 16 to 1 Argument—Secrotary of the Treasury Cage Talks to Young Men On the Real Issue Which Most Vitally Concerns the Araerjcan People. Following Is the text of an address delivered by the Hon. Lyman J. Gage, secretary of the treasury, to the Young Republican club of Brooklyn, whose 20-mlnute talk upon the question of opening the mints of the nation for the free and unlimited coinage of silver at the ratio of 10 to 1 is a remarkably concise statement of the meaning and possibilities of such a movement. This

address coming from Secretary Gage presents the issue in an authoritative convincing as it is intelligible to any reader. Secretary Gage said: a Gentelemen of the Young Republican Club: It is my purpose to speak to you for 20 minutes. My subject may be stated after this fashion: What is the interest of tho wage-earner and stipendiaries of every class in the proposition to open the mints for the free and unlimited colaage of silver at the ratio of JG to 1? It is the declared purpose of the Democratic party, so called, to do that thing. If done, it will have an enormous effect for word or woe upon the welfare of every man, woman and child in the United StateSC No question is of deeper moment than this question, and you cannot act intelligently on it unless you understand it. Do you reallly understand it? I thought until lately that by this time the merits or demerits of that proposition must be understood by every one. but I know better' now. A gentleman —a business man of considerable lute!" ligence—only a week since, called on a member of congress and asked him this question: “What does 16 so 1 mean? I am ignorant and I want to knqw.” Now, let uie ask that question right here and now. is 16 to 1? What does the term nffan? 1 have a little granddaughter 11 years old. She visited me a few weeks ago, uud while with me asked me that very question. I said to her: “Tell me what you understand it to mean.” “Weil,” she said, “I think it is this wav: GoJd is worth about 32 times as much as silver, but the Democrats want to pass a law to make 16 ouncos of silver worth the same as one ounce of gold. I don’t know if that is right though.” “Well, my child,” I said, “you have it light down fine, and I won't disturb your mind by further explanac'on.” Wliut Is 16 t«i 1? But we grown up folks can profitably enlarge the point a little here. What Is 1G to 1? It is the ratio which congress Med many yetrs ago between gold and silver when coined at the mint—that is to say, U 13 a relation, in weight of metal, between silver dollars and gold dollars. TJuuei the law, a given quantity of gold was stamped a dollar, and 16 times that weight in silver was stamped a dollar. You perceive it is a relation of weight, not a relation of value. You will ask, then, why w<s the weight ratio fixed at 10 to 1? The answer is obvious and plain. It was because that relation of weight recognized in the coins minted the then commercial value of the two metals In the markctsfcf the world. Because the commercial value of gold was 10 times, or thereabout, greater than silver, congress recognized the fact and established the coins lit the same ratio of weight. Make no mistake on tills point. The mint ratio never established the value of efther gold or silver, nor did it establish the relative value of one to the other. The commercial exchanges of tho' world fix the value of all things, Including fold and silver. The only way on eartn to determine the value of gold, either'as coin or bullion, is to find what it will bring In flour, or cloth! ig, or la bor,' or other things. The value of gold is measured by the quantity of things for which It Will exchange. The same Is exactly true as to silver. Now, goltrand silver are no more related to each other In any fixed ratio than are wheat and corn. Wheat and corn are good for food, and there >s a sort of lelatloo between the two !n value, tut it Is a fluctuating, not a fltod, relation. The same Is true of gold and silver. They are both metals used as money, but their relation to cacti ota a - lu ex-

changeable value has, ns history proves, been a variable, not a fixed, relation. The Mint and tbe Real Ratio'. Now, when bur coinage laws were passed in 1792 and amended in 1834, 15, >5% or 16 ounces of silver had about the same power to purchase things In the world as had one ounce of gold, and for that reason, and 1 that reason solely, the mint ratio, a'ratio of weight, was established in a way that was supposed to correspond to their commercial values *n their respective powers to buy things. J 1 cannot stop to recite history. Suffi- 1 dent to say that never in our did both metals come to the mmt for coinage in any appreciable volume at tbe same period of time. That metal came for coinage whien had at the time the least relative buying jwwer abroad, while the oae which enjoyed the greater purchasing power abroad did not come to the mint, but wei t abroad, where it could make better bargains for the owner of it. But since the years 1792 and 1834 the rela tive value between gold and silver has radically changed. In the former periods one ounce of gold would exchange for about 16 ounces of silver. For some years past one ounce of gold has exchanged fpr 32 or 34 ounces of silver. It will now exchange In the same ratio, and there is no reason to doubt' that it will so continue to exchange sot an indefinite time. These are fifPts. I suall not stop to discuss how this came about. Whether it was the alleged “crime of ’73,” or whether it was because silver has beeome relatively more plentiful than gold, or because the desires of men have changed—whatever theory you may adopt, the fact remains unchanged, viz, one ounce of gold is equal in exchangeable power to 32 ounces of silver. Yet it is in full view of these facts that a political party, or, rather, a combination of at least three political parties, proposes, if It gets control of the government, to reopen the mints to the free coinage of silver at the old ratio of 16 to 1. Why? Why? If it was desirable to open the mints for the free coinage of silver, why not do as our fathers did, to-wit, make the ratio as near as possible to the commercial-value ratio? They say it was a crime to close the mints to free coinage of silver in 1873. I deny it; but if it were true, would it cure that crime to commit an egregious folly in 1900? Democratic Sophistications. Tlie Democratic champion still avers that on this question the party stands where it did in 1896. He does not talk about it so much, but when he does talk about it, he uses the same misleading phrases as of old. For instance, he lias repeatedly said: “The Republican administration under McKinley is coining silver every day in the month and every month in the year at the ratio of 16 to 1. If that is not the correct ratio, why do they do it?”

Mr. Bryan knows why, but he conceals the reason and allows his hearers to draw erroneous conclusions. The statement, so far as it goes, is true. In 1878 a measure passed congress directing the secretary of the treasury to buy 2,000,000 ounces per month and coin into “standard dollars.” But mark this: The coinage was to be for the government and on government account, and not on private account for the benefit of holders of bullion. In 1890 the Sherman' law was passed, which directed the secretary to buy not less than four and one-half million ounces of silver and coin not less than two million ounces a month. That act also declared it to be the policy of the government to maintain these dollars on a parity with gold. In 1893 the purchasing elayse of the Sherman law was repealed. Since that time the mints have in truth been engaged In coining lip the purchased bullion. But mark this: Through the law and by the operation of the treasury, the dollars have been kept equal to gold. They are paid out only y>y the government, and against the receipt by the government of an equal amount in gold, or in service rendered, or goods bought. With the government’s guarantee of parity, and the quantity limited, It is manifestly an indifferent circumstance whether the ratio Were 10 to 1, 20 to 1. or sto 1. And yet Mr. Bryan deftly insinuates that this practice justifies free coinage for everybody at that ratio without auy guarantee of equality with gold from anybody. Let me tell you a* story. It illustrates tills matter and makes It more clear. Four or five years, ago I listened t«#a conversation between a certain judge and a banker. The judge said:' “I constantly hear that our silver dollar is Worth only 00 cents, and yet you bankers (and all dealers are glad to take them for a dollar each. How is that? Are they really worth a dollar, or do you all give 40 cents more for each of them than they aro worth \ My question Is an honest one; I want to know.” The banker replied: “WeJI, I will answer you by the kindergarten method.” He held up a nickel and asked the judge. “What Is that?” Answer: “A nickel—s cents.” “What is the metal in the coin worth?” Judge: “I don’t know.” Banker: "I will tell you. It is worth about six-tenths of 1 cent. Now, with so small vnlue in itself, how does it come to he worth 5 cents?” Judge: “Why, the government having issued it for 5 cents, and having received 5 cents for It, will redeem it for 5 cents in gold, won’t it?” Banker: “Yes, you have It exactly. You have described what is perfectly analogous to the truth regarding the silver dollar The government buys the silver at the market price, now abotft 60 cents, stamps a certain quantity of it a dollar, gets a dollar for IV when It pays one out and redeems It when presented for redemption.” Judge; "Does the government redeem

It with a gold dollar?” Banker: “No; but It does substantially the same thing. It receives It as the-equivalent of a gold dollar in the payment of customs dues. Being as efficient as gold for that purpose, it is now the equal of gold for all purposes. At the same time it does this,- it pays gold to every one that wants It and has a claim or demand on the treasury. Thus the parity Is maintained.” I have been obliged to say so much by way of explanation or preface to my main question. The Real Interest of Wage- Karners. How would the interest of wageearners and salary paid people be affected if the Democratic Bryan proposition should be realized? In the year 1895 I had a conversation with one of the brightest and most capable business men of the west. He was engaged in large affairs—an employer of . labor, a bank president, and a man of reputed wealth. He said to me: “I j am persuaded that It is for the interest of the people of the United States to open the mints for the free coinage of silver at the ratlq of i 6 to 1, and to get on to the silver standard as soon as possible.” I said to him: “It is surprising to hear such a statement from you. You must have thought it well over; you can, I know make your thought and reasoning perfectly clear. Explain to me how It will be for the interest of our people to go Into this thing, and if I can see it ns you do I will drop all objection and espouse the cause at once.” This was his explanation: “We have come to a time,” lie said; “when a protective tariff no longer protects. Under the Wilson bill, which, though a Democratic measure, is still protective, our factor- , ies are idle, labor is out of employment, and general business languishes. The truth is, we cannot compete in manufacturing with the older countries, where labor Is cheap. Wages and salaries are too high here. The labor cost of what we manufacture is too great. We must reduce the labor cost. To undertake to ‘ reduce wages directly would simply breed strikes, lockouts, disorder and riots; but can not you see,” he continued, “that if we adopt silver as standard money for our domestic use we will, while nominally paying the same wages, pay them in a kind of money which will be obtained at a cost, measured In finished products, of not more than onehau the present cost in gold?” “Yes,” I replied, “I see this clearly. It is strictly true, but you said it was for the interests of the people. Don’t you recognize the wage-worker and the salaried man as the people? Your proposition is a proposition to blindfold tlieir eyes while you 'pick their pockets. - I cannot agree to your plan. Better strikes, lockouts and riots than this kind of juggling and cheating through the medium of payment. If protection will not protect (which time will show), if our labor cost be too high, if wages must, as you claim, be finally reduced, the grind of competition will determine when and how much. Against such a result, reasonable and just resistance should be offered, while you would surrender the whole question at once without a struggle.” Wages Reduced One-Half. Was the gentleman right? Would the free coinage of silver and the consequent adoption of the silver standard' in our domestic affairs have the effect predicted? Would It deprive the wageearner of one-half his present reward? I have no more doubt of the truth of it than I have doubt that grapes grow grapes or that thistles grow thistles. You can see it for yourself if you will really try. Give attention now. It is not difficult. It is simple. You work for pay. In what are you paid? You will say, “In money.” That Is true, but the money is only an intermediary, to that in which you are really paid, viz, things that you use and consume. The value of your work *.s measured finally by what your work will procure, xou are paid two dollars per day, in gold or its equivalent. Two dollars will buy a sack of flour, a pair of shoes, or a thousand pounds of coal, and so on. The value of.your laoor is therefore, equal to the value of a sack of flour, a pair of shoes, a thousand pounds of coal, or what not. Now, among other things your labor pay will buy is silver. With two dollars of the money in which you are now paid you can buy 1,600 grains of silver bullion. That quantity of silver bullion lias its exchangeable Value all over the world. In our market 1,600 grains of silver are equal in value to a sack of flour, a pair of shoes, or a thousand pounds of coal. In other words, your labor pay andT,GOO grains of silver are equivalent to each other In their power to command those things that minister to the comfort and happiness of yourselves and your families. Let us now examine the free silver proposition. It is simply this: Open the mints to everybody. Termit the owners of silver to bring in 371% grains of silver. ,stnmp it one dollar and give it back to them. Clothe that dollar with legal tender quality, so that it may bo lawfully used to pay debts. That is all. It Is simple enough, Isn’t it? But we know that one dollar of our present kind of money—the money in which you are paid your salaries and your wages—ls worth, not 371% grains, but more than 800 grains. Would you not rather have the equivalent of 800 grains for your pay than the equivalent of 371% grains? And yet, If you consent to the free silver programme,, if Bryan and his Democratic-Popullstic-Siiverlstic supporters come Into power, that programme will be adopted, and you Inevitably get yonr pay in the new dollars containing 871% grains of fine silver. Before you vote for this sort of business be wise enough to get a‘stipulation from your employers that you

shall then be paid, as you are now paid, in something equivalent to 800 grains of silver. If you do not do so, you will get the equivalent of only 371% grains for evesy dollar paid you. Can you affordjlt? But they will tell you that these new dollars, containing 371% grains, will be as valuable then as 800 grains are now. Tney will tell you that a dollar Is a dollar, and that free coinage will bring tbe value of the bullion up to Its coinage value. So that then 371% grains will be worth a dollar. That is true in one sense, but It is not true In essence or In fact. Three hundred and seventy-one and one-fonrth grains In silver bullion will be Indeed worth one of tbe new silver dollars, because with that number of grains you can get one of the new dollars, and one of the new dollars will be worth 371% grains of silver, because there are ! Just 371% grains in it; but tbe question . —the question In which you arts interested—ls this: What will be the value of that dollar when paid to me lu wages, compared with the dollar in which I am now paid? You, know the value of your present dollars. • Are you prepared to guarantee to ypurselves and to your families that these new proposed dollars Will be of equal or even of approximate value? No, gentlemen, you cannot afford to do so. Take the risk of such an empty chance if you will, but when the hour of your grief and disappointment shall come, as come it surely will, then blame yourselves, but absolve the Republican party from any responsibility for the adversities you will suffer. The Hankins' and Business Interest. But the Democratic orators will tell I you that what lam saying is the voice of the hanker, and that the banker has a special interest in the gold standard; that gold is the rich man’s money and silver is the poor man’s, and other rot of that kind. I want to show yon, as I readily can, that the banker, if he had regard only for an immediate and ill-gotten profit, would himself advocate the free coinage measure of the Democrats. * Let’s see how he could make It serve his profit. Assume that the free coinage law would be operative in two years. Knowing this, the banker, having, say, $500,000 in deposits, could buy at the present market price, say, one million Mexican dollars, or an amount of silver equal thereto in bullion, each one a little heavier and a little finer than the proposed silver dollars. The mint being opened, he could take his one million Mexicans to the mint and receive in return one million and fourteen thousand of the new American dollars. With these in hand, and they being legal tender, he could pay off his deposits with 500,000 of the coins and keep 514,000 of them as the reward of his shrewdness. His real profit would not be $514,000. They would be cheap dollars, and compared with'gold dollars, would possess but half their purchasing power, so we must divide the $514,000 by two, which gives him a net profit of $257,000 on the transaction. You will ask, then, why with such possibilities before them, the bankers oppose the measure. I will tell you, and tell you truly. It is because thej\£oresee, as everyone, who understands the matter must foresee, that with the adoption of the measure gold would disappear into private hoards; the reserves of the banks, now largely in gold, would be drawn out; they would be forced to contract their loans; a general and exhausting liquidation would take place; merchants and manufacturers would fail, and in the general wreck and ruin the banker would not escape. But do not flatter yourselves that you would be exempt from the general disaster. Shops and factories would he closed; a sharp halt would be called on all en- • terprises; labor would go into idleness; wages would be reduced, and general misery realized. There would be a resurrection, no doubt. Our country is too great, its resources too manifold, to long remain in bankruptcy and idleness. With the old wrecks, cleared away, we would begin again. The new silver money would be the money standard and the common medium of exchange, and after inconceivable disaster we would have the chronic condition of a fluctuating currency now enjoyed! in our neighboring republic, Mexico. Value of the New Coins. Mexico has her mints open to the free coinage of both gold and silver at the ratio of 10% to 1; but all of her gold goes ?broad. She is hopelessly on the silver standard, and her dollars, heavier in weight and finer In quality than ours, have a value always rising or falling as the price of silver bullion rises and falls In the world's market. Tho average value of the Mexican dollar Is about 50 cents in gold. It sometimes falls to 48; it some times rises to 52 or 53. Compared to gold, the extreme fluctuations in value within the limits of a single year are as much as 10 per cent. Our free silver coinage advocates, notably Mr. Bryan, assure us that It will be different here; they tell us that Mexico ,Is' a small country, while we aro a great people, 50,000,000 In number, and that the demand here will bring the new silver dollars up to par. They forget that t lie Mexican dollar Is current money in all of China, the Straits Settlements, the Philippines, and all the islands of tho Faciflc. Not less than 400,000,000 of people use Mexican dollars in preference even to gold, and yet the power of those dollars the world over is substantially 50 cents In gold. No, my friends, values will not respond to the Bryan reasoning. Neither parliaments nor congresses, kings nor president, can change or annul the natural laws of economic relationship. Effect of’Present Silver Stook. There Is another point, not yet noticed, of the weightiest consideration.

f When the silver bullion now owned by the government shall be fully coined there will be outstanding fn the form of silver dollars or silver certificates the sum of nearly six hundred millions. With the free coinage of silver on private account It will he impossible for the treasury to maintain the parity now existing between all forms of our money. The sliver dollars we now have will Inevitably sink to a level with the new dollars—that Is to say, they will sink to their bullion value, or to 50 cents on the dollar. This means that the present or future holders of our silver money are to be defrauded of not less than three hundred mlllious in value. And who are these holders —not the banks, not tbe capitalists. The silver money Is scattered far end wide—ln tbe hands of hundreds of thousands of our people, most of whom live west of the Alleghanies. Don’t, let us worry about the alleged crime Of 1873. Let us look In the face the actual crime which is proposed that we commit in 1900. But Mr. Bryan waves this all a3ida. He says that sentiments are superior to finances and that man is above the dollar. His metaphor is a kind of misfit garment; but, accepting it, let us answer that If man Is above the dollar, he ought to be above,—infinitely above—this half-dollar fraud which tho Democratic party espouses. We are menaced by the opposition with an expressed determination to enter upon that foolish and destructive experiment. Every one of the three parties nominating Mr. Bryan has declared for that programme. The election of 1896 proved that a majority of our people were still sane and riglnminded. They then rejected these p -onosals b.v overwhelming vote.

Warned by ffiat experience, tne ie*» er of the joint alliance "Is reserved la his declamations on the hjoney question. He and his supporters have invented a phantom thing they call imperialism. j It is not a genuine Issue. It Is • ■ wooden horse, concealed In which the opposition hope to enter the city with a free silver captain at their head. Will you surrender the gates to tfcefr unrighteous Invasion and thus contribute to your own undoing, or will J <*» aid to bar them out? The sixth of November awaits your answer.

LYMAN J. GAGE.