SUPPüY
I
and
demand
THE
Only Source of Value.
À Discussion of the Money Question
—BY—
WIÜÜIAM H. BERRY, |
I
Chester, Pa. i
I Sint^le Copies, i ç cents ; two for 2Ç cents, postpaid,
i Lots of loo for free distribution, at cost.
COPYRI(3HT, i8()8.
MOKMNG RHPUBLICAN PRINT.
CHESTER, PA.
rafUbrary j
SUPPLY
and
DElWAflD
THE
Only Source of Value.
A Discussion of the Money Question
—BY—
WlüüIñiVI H. BERRY,
Chester, Pa.
Single Copies, ^ cents; two for 2^ cents, postpaid.
Lots of 100 for free distribution, at cost.
COPYRIGHT, 1898.
MORNING REPUBLICAN PRINT,
CHESTER, PA.
Ë> 5^3
Introduction.
During tliêiâSt Presidential campaign I handed to a friend
a work on " Bimetalism " by Wharton Barker, with a request
that he read it carefully. Some weeks afterward I asked him
what he thought of it. He answered with a smile that " life
was too short " for him to read a book like that.
I knew that he was straining every nerve to make a living
and to pay the interest on a mortgage which, if foreclosed,
would absorb every shred of his property and rob him of the
hard earned savings of a lifetime, and I hoped to show him the
cause of his trouble and the remedy for it. He voted against
independent Bimetalism, as I believe, in ignorance of the facts
in the controversy.
I have centered this discussion upon what seem to me to
be the critical points in the cas'e, and have made it as brief as
possible, though I trust not too brief for clearness, in the hope
that ray friend and other victims of the present system may
find time to read it.
The argument endeavors to show that a short supply of
money has increased its value and reduced the price or debt-
paying power of property and products.
This insolvency of property deters men from producing it
and enforces idleness, thus causing an irreparable loss to those
who can least afford it.
In the struggle to maintain prices trusts and combines are
formed, strikes, lockouts, riots and bloodshed ensue, and an
intensifying alignment of our people into "classes " results.
Free competition in th-i production of money will remedy
this evil by giving to every man who wants to work a chance
to do so, and the free and independent coinage of silver at i6
to I with gold in the United States, is a just, safe and patriotic
method of effecting this result.
The facts which have compelled me to the conclusions
reached, are set forth in the tables appended. They are taken
from the latest publications (Feb. 1898) of the United States
Treasury, and from no other source. They are therefore reli¬
able. The facts as to the fall in prices as shown in Table I
are confirmed in the experience of every citizen.
I have arranged the statistical facts as to the Production,
Coinage and Movement of Gold and Silver so as to emphasize
the points of my argument- I believe that this set of tables
will be found of great value to students of the question.
Whatever of original thought may be expressed in this
book, together with the compilation of the rest, I dedicate to
the cause of humanity
May God speed the right.
WIUDIAM H. BERRY.
CONTENTS.
CHAPTKR I
VALUE.
Intrinsic Value—What Is Value?—Supply and Demand—The
Source of Value—Utility is not Value—Demand—Demand Resisted—
Value may rise Indefluitely—Fall in Value Limited by cost of Pro-
duetlon—Skill and Advantage In Production—Automatic Regulation
of Values—Artificial Control of Values by Trusts—All Trusts and
Combines Condemned—Improved Methods of Production—The Value
of Labor. 1-6
CHAPTER II.
A MEASURE OF VALUE.
What Is It to Measure Value?—An Average Standard—A Com¬
modity Standard—Stability Required—Methods of Regulating the
Standard—Labor not a Suitable Standard—Labor: Its Value and
Debt-paying Power—Units Established by Law. - . - 7-10
CHAPTER III.
THE AMERICAN DOLLAR OUR STANDARD.
The Demand for Dollars—The Supply of Dollars—The Produc¬
tion of Dollars—The Dollar the Standard—Value and Price Contrast¬
ed—Per capita Circulation not a Test of Value—Oae Dollar as good
as another—Discrimination destroys Parity. - - - 11-15
CHAPTER IV.
SUBSTITUTES.
Gold and Silver Coin Insufficient—Substitutes for Dollars—Bank
Notes—Character and Cost of Producing Substitutes—Substitutes
Unreliable—Not Enough of Dollars—Enormous use of Substitutes—
The Limit of Substitution—A Difference in Substitutes. - 16-20
CHAPTER V.
THE VALUE OF GOLD AND SILVER.
Recapitulation—The Value of Gold—The Value of Silver Prior to
1873—Parity under Free Coinage—Foreign Exchange as Aflfectlng
Parity—Dlffei-ent Coinage Ratios as Affecting Parity—Theory of Bi-
metalism—Experience of Blmetallsm—Importance of this Country
? fo\
IV
CONTENTS.
in the Past—Importance of thi-» Country Now—No Reason for De¬
monetizing Silver in 1873—Demand for and Supply of Gold—Tiie
Present Value of Silver—Silver at par with other Commodities —
The Effect of Free Coinage of Silver. ... - 21-80
CHAPTER VI.
THE TEST QUESTION.
The Arithmetic of Facts—Production of ßilver—Present Produ t
all Consumed—Increased Production—Probable Supply of Silver—
The Demand for Jlooey—The Immediate Demand for Silver—The
Current Demand for Money—Demand Unlimiied—Our Debts Abroad
—Our Present Needs—What of the Future?—Hon. A. J. Bdfour on
Standards—Trusts and Combines born of Falling Prices—Tiie Present
Inquiry. -, 31-41
CHAPTER VII.
THE EFFECT OF FALLING PKICES.
Government vs. Private Regulation—Senator Hoar and Shylock—
The Owners of fixed debts in Go'd—The Agents of these gold Own¬
ers—Officials who are hired—European Cereal Consumers-Europe
vs. United States—Our Doss their Gain—Loss to Farmers—Wheat
and Sliver—Prices have not fallen in silver using Countries—Mexican
vs. American—Disadvantage of Americans—England's use of Aihe i-
can silver in India—Who wants Bimetalism?—Standard of Pros¬
perity. 42-51
CHAPTER VIII.
OBJECTIONS ANSWERED.
50-cent Dollars—Building Associations, etc.—Parity as Measured
in Property—Maintaining Parity of Silver with Gold Money—Dis¬
crimination (Legal)—The Law—Discrimination in Defiance of Law—
A False Pretense—The Pledge of Government—Why not Change the
Ratio?—There has been mere Silver Coined since 1873 than Before—
We want "Honest Money"—We want "Sound Money". 52 59
inNTZDEX: TO -A-T'.PEITIDIX:.
TABbE I.—Prices of Leading Articles Produced and Matiufactured in the
United States as given in the Statistical Abstract of the United States
for 1S97. published in February, 1Ö98. .... I
TABLE IL—Movement of Silver Coin and Bullion. ... II
TABLE III.—Gold and Silver Coined in France Converted at per 25 francs. II
TABLE IV,—Production, Coinage and Relative Value of Gold and Silver in
the world since 1792. . . . . . .Ill
TABLE V.—Production and Coinage of Gold and Silver in the United States IV
CHAPTER I.
Value.
Intrinsic Valne What is Valae?—Supply and Demand—The Source
of Value—ITtility is not Value—Demand—Demand Resisted—Value
may rise indefiuitely—Fail in value limited by cost of Froduc
tlon—Skill and Advantage in Production—Automatic Regulation
of Values—Artlflcial ContrpI of Values by Trusts—All Trusts and
Combines Condemned—Improved Methods of Production—The
value of I.abor.
A confased and often erroneous conception of the phe¬
nomena of value is current in the minds of many intelligent
men, and since clear thinking on fundamental principles is
necessary to an intelligent conclusion we propose - to discuss-
this question briefly, first :
The persistent chatter of the newsp'apers, and other would-
be teachers, about the
" Intrinsic Value "
of a gold dollar, and the universal habit of comparing all'
other values to that of gold leads many to suppose that the
value of gold is inherent and cannot change, and in order to-
free our minds of this error let us first enquire
What is Value ?
We answer that the value of an article is what it will
bring in the open market, or in other words, its " purchasing
power" or " power in exchange," and thus understood it is
not and cannot be " intrinsic " or inherent in gold or in any
other substance.
As the altitude of a balloon is fixed at a point where the-
force of gravity is balanced by the buoyancy of the atmos¬
phere, so the value of everything in the world is fixed by the-
contending forces of
Supply and Demand
and at a point where these forces balance each other,-
The fooljishness of referring to the ' ' intrinsic ' ' height of
a balloon is at once apparent, and to speak of the " intrinsic "
■2
VALUE.
value of anything is equally absurd. Value refers to the po¬
sition of a thing andSIŒto any quality it may possess.
The Source of Value.
Value, or "Power in Exchange" is not only fixed or
regulated by the contention of Supply and Demand, but it is
actually created by it, and does not and cannot exist in the
absence of it.
Utility is not Value.
It is an error to suppose that because of certain intrinsic
qualities an object is useful or desirab'e, and is therefore valu¬
able.' Nothing could be more misleading. As an illustration,
take the air we breathe. Its intrinsic qualities render it use¬
ful, desirable and even necessar> to every human being, and
yet it is absolutely valueless. One cannot get anything in ex¬
change for a bushel or for a ton of it. Here, then, is the spec¬
tacle of an exceedingly useful thing entirely without value.
While on the other hand there are some things that one might
mention which are quite valuable and are not only useless but
are positively harmful and destructive in their effects. The
victims of the alcohol or opium habit will give anything they
possess on earth in exchange for these drugs, while it is clearly
seen that they are rapidly destroying those who use them.
And so we see value where there is no utility, as well as utility
where there is no value.
" Demand
The qualities, inherent or otherwise, (they may be and
often are purely imaginary) in an object, tend to make it de¬
sirable and to create a demand for it, and it is important to
notice that, the more uses to which an article can be put, and
the more imperative the necessities which these uses supply,
the greater and the more imperative will be the demand for it.
But however broad and imperative the demand may be, there
will be no value whatever unless the demand is resisted by a
short supply, and the contention is set up between tho^e who
Jiave it and those who want it. The life-sustaining qualities
VALTO.
J
of air, for whicli there is no substitute, render it absolutely
necessary to every man and an imperative demand arises from
every quarter, and yet it h^s no value because the demand is
not resisted. The supply is everywhere abundant.
Demand Resisted.
Take the case of water, and for the same reasons the de¬
mand is universal and imperative, but in certain sections the
supply is limited, and the demand is resisted to a degree that
gives tise to value, and water is "sold" or exchanged for other
things.
Values May Rise Indefinitely.
As the resistance of short supply in the presence of im¬
perative demand increases, the value (of water for instance)
rises until in many places it is considerable, while to the fam¬
ishing survivor of shipwreck or the bewildered traveler in an
arid desert it may become infinite,
Any ciTcumstance, providential or man-made, which af¬
fects the supply whilf the demand remains the same will af¬
fect the value of anything, and any circumstance that affects
the demand while the supply remains the same will affect the
value with equal certainty.
The rise in values due to a short supply is not controlled
or limited by the effoi t or sacrifice necessary to produce or
distribute the article valued (cost of production.) It is-easy
to conceive that one might be willing to give all his earthly
possessions for a quart of water which may have cost its
owner nothing.
The Fall in Values is Limited
by the cost of production. In the presence of a constant de¬
mand an over-supply of an article would reduce its value to
nothing (as in the case of air) or, if labor or sacrifice were re¬
quired in its production, to a point where its producers would
cease to find a profit, at which point production would neces¬
sarily cease until the supply was reduced and the value raised.
4
VALUE.
Skill and Advantage in Production.
Under the stimulus of demand for a new article, or the
enlarged use of an old one, the value may rise so far above the
cost of production as to enable persons without skill and with
crude implements and unfavorably located to engage in its
production, but as soon as the demand is fully met the value
will begin to fall and those who are producing under the
greatest disadvantage will be first compelled to cease and
each in turn until finally only those of consummate skill and
perfect equipment can continue.
In the struggle for existence as between these (the fittest)
the value may temporarily fall below the cost of production,
but ultimately enough and only enough of producers will sur¬
vive to supply the demand at a reasonable profit.
Automatic Regulation of Values.
The foregoing, briefly stated, are the universal laws of
commerce, and may be depended upon through all time to
govern and regulate all the phenomena of value. The cost of
production will mark the lowest permanent range of values,
and competition, if left free, will be a guarantee against con¬
tinued extortion.
Artificial Control of Values
by means of trusts and combines is in the nature of a con¬
spiracy and works an inj ustice to all producers outside of the
pool. Such effort can only be successful on the assumption
that the producers who combine to restrict production will also
conspire to deter others from entering their field with new
capital and equipment. This is done by temporarily lower¬
ing prices when the new enterprise is started, thus forcing it
. to cease or sell out to the combine. When the competition is
destroyed, prices may be again advanced.
The manipulators of certain trusts or combines which are
incorporated and whose stocks are listed in the market, are
able by speculative trading in their own stock, to make money
for themselves whilé selling their product at less than cost.
6ome of the most notorious combines of the present are
YALUE.
5
able by controlling the raw materials and the means of tr:iiis-
portation to so discriminate against their competitors as to
make their business unprofitaijle.
All Trusts and Combines Condemned.
Nothing is more certain than that all such combinations
ate prejudicial to the general welfare, because in the nature
of the case they restrict production and encourage ,or enforce
idleness, and if practiced by all would result in the ultimate
stagnation of all enterprise.
Improved Methods of Production.
The cost of producing anything includes all the materials
of every kind that are used in its construction as well as all
th eeffort, time and sacrifice that are involved in its creation
and distribution to the point of consumption or ultimate stor¬
age, and since civilized man is progressive and is continually
adding to his experience and improving the direction and char¬
acter of his eSorts, as well as the tools and appliances with
which he works, a corresponding reduction in the cost of pro-
-ducing commodities, as measured in human toil, occurs.
In order to encourage the improveifaent of methods and
machinery of production the government justly gives to those
who make the improvements an exclusive privilege to use them
for a period of years (17 in this country), after which it is
thr(?wn open to the public and in competition all may inherit
the benefits of the march of improvement.
Under fair economic conditions this should and would re¬
sult in a constant increase in the rewards of toil, and the value
of labor would constantly rise as measured in any and all of
its products.
The Value of Labor
is just as certainly due to the law of supply and demand as
are other values, but since every laborer is a consumer and
can furnish a demand for the product of his own toil, or its
equivalent in the product of his neighbor, there cannot pos¬
sibly be an over-supply of labor if the opportunitj' to labor
6
VALUE,
and to exchange products is not restricted, and therefore the
statement that the value of labor should constantly rise as
compared to the value of its products is certainly true, and
that the value of all products as compared to labor should con¬
stantly fall is equally true.
If there be a product to which the improved methods and
skill in production has not been and cannot be applied, and
the demand for which continues, its value will range above
that of its fellows and tend to keep pace with the value of
labor, but such instances are extremely rare if, indeed, any
exist, so that we have every reason to expect that the wages
of the laborer will continually rise as measured by his pro¬
ducts and in proportion to his increased ability with improved
tools to produce them.
CHAPTER II.
A rieasure of Value.
What Is it to mrasiir)* Value?—An Av<>ra;;e Standard—A Commodity
Standard—Stability Required-Methods of Regulating the Stand¬
ard—liUbor not a suitable Standard—Labor : lis value and debt-
paying Power—Units Established by Law.
In the' exigencies of commerce it becomes necessary to
have some means of comparing or measuring values, just as in
the mechanic arts it becomes necessary to compare weights
and extensions, and as we establish the "pound", which is
the force with which a certain quantity of metal is attracted
toward the earth under certain conditions, and the '' yard ",
which is the length of a pendulum which will vibrate in a cer¬
tain length of time under certain conditions, as the basis of
our physical comparisons or as " units ' ' in the terms of which
our statements of weight and extension may be expressed and
our records kept, so also must we establish a unit of value in
the terms of which our records of value may be made and kept.
What is It to Measure Value?
In measuring or re.cording the value of an article we do
not undertake to say how far above or below the cost of pro¬
duction it may be, but our purpose is to state its position as
related or compared to other things, and in order to do this we
mnst by common consent select or create a certain thing as a
standard and state that the thing to be located or valued is
above or below the staudard as the case may be.
An Average Standard.
. It is urged by some that a line should be drawn striking
an average of the values of all the leading articles of commerce
and that our records should refer to this and our units be based
upon it, and there is no doubt that a fairly just measure could
be thus obtained ; but we think that the difficulty of artificially
fixing and regulating such a standard would be greater than
the advantäge gained, for the necessity of a circulating medium
8
A MÖASURE OF VALUE.
to be used as money and represent the unit quantity of average
commodity would still remain, and unless redemption on de¬
mand was provided this form of currency would " fluctuate "
in value under the stress of supply and demand the same as
any other kind of money.
A Commodity Standard.
We think that the present method of selecting or creating
a tangible commodity to which all other commodities shall re¬
fer for comparison will be found most satisfactory, for the
reason that it would be produced by labor under free compe¬
tition and if the value rose, production would be stimulated
and the rise checked ; if it fell, the cost of production would
check producers who were poorly equipped and restore equi¬
librium.
Stability Required.
The standard however established should be as stable as
possible, and the difficulty of creating a just standard is not
small ; in fact it is impossible, and we must be content with
a reasonable approach to exact justice. The difficulty grows
out-of the fact we haVe stated, that whatever we may create
or select as our standard will itself be subject to a varying
influence of supply und demand and will rise and fall in value.
Slight and temporary changes iti the value of the standard,
like the element of friction in mechanics, may and in the na¬
ture of the case must be endured.
Methods of Regulating the Standard.
To regulate the standard and prevent a wide and perma¬
nent divergence from the average of values two methods are
proposed : First, the artificial control of the supply by the
creating authority ; and second, the automatic regulation of
the supply by free competition in production under the gen¬
eral laws of trade. The first contemplates a comparatively
costless creation like paper money produced by the creating
authority as its judgment may dictate. We think this method
quite possible, but not the best for reasons that will appear as
we proceed.
A MEASURE OF VALUE.
Labor not a Suitable Standard.
It is contended by some that labor or " humán toil" is
the only true measure of value, and if the concrete result of
toil is meant, such as a ton of iron or a yard of cloth, we will
not dissent, but nothing is more certain than the impossibility
of establishing a just standard directly from labor, such as a
•'day's work" or a "month's service". No two persons
will give the same result from the same hours of service.
Differences in capacity make it impossible, and differences in
disposition as to industry make it unlikely, even if possible.
If, however, we take a given amount of commodity of stand¬
ard perfection, such as a ton of iron, then he of the greater
capacity and industry will justly reap a corresponding reward
in its production, so that at the last analysis the commodity
standard finally and justly rests on labor.
But again, one of the prime uses of a standard unit of value
is to keep a record of debts to be paid in future, and if a debt
was made payable twenty-five years from dale, in, say " looo-
hours of service", the march of improvement in skill and
appliances would give to the creditor at the end of ilie time a-
larger return than was his due, for the service " due him is
the service of a period twenty-five years ]'ast, which was less
valuable than is the service of the present. The creditor is
entitled to the increment in the efficiency of his own efforts
during that time, but not to that of his debtor.
The commodity standard gives to the creditor his just
due, and to both debtor and creditor the just reward of their
efforts to improve the effectiveness of their labor, and also
discriminates justly in favor of the able and industrious
workman.
Labor : Its Value and Debt-paying Power.
We digress a little from the line of our argument at this'
point to expose a sophistry that has misled many persons im
considering this question. It is affirmed thit the wage«-- of
labor as stated in money, " are as high now as ever they were,
and that the mone> earned will buy twice as much as formerly
and therefore the wages of labor have been doubled and
lo
A U'EASUfeE OE VAttTK.
without stopping to investigate âtid test" the first part of this
questionable statement, but admitting for the sake of argument
that the whole statement is true, we call attention to the fact^
that although the value of labor as measured in its products
may have increased twofold, its debt-paying power has not in¬
creased at all, and the d'ebt-o\Vning class has been able to reap
all the benefits of the march of improvement at the expense
of the laborer who, at the last analysis, must pay all the debts
and interest charges, and with twice as mUch of the fruit of
his toil as was contemplated in the contract.
This of course is not true of diebts of recent Contraction,
but as the great body of our debt is of several years' standing"
it is generally speaking true, and will be true entirely if the
present condition continues.
Units Established by Law.
In every civilized country the various units of mteasnre-
ment are of necessity established by law, and with sole regard'
fo the convenience of its own people.
The unit of weight in this country î's authoritatively fixed'
and called a ' ' pound ' ', and is carefully defined as the force
of gravity upon' a certain quantity of mtetal under certain in--
femal and external conditions.
The unit of value in this country is the American dollar.-
CHAPTER m.
The American Dollar our Standard.
The Demand for Dollars—The Supply of Dollars—The Produetl«m
of Dollars—The Dollar the Standard—Value and Price Contrast»
ed—Per capita Circulation not a Test of Value—One Dollar as
Oood as Another—Discrimination Destroys Parity.
The unit of value in this country was created and fixed
iin 1792, and was called, a "Dollar"., Its.value or purchasing
Ipower was fixed by the Law of Supply and Demand,, as are all
■other values.
The Demand for Dollars
•grows out of the fact that they are made by law a legal tender
for; all debts public and private in this country. Because of
thi^ quality they perform all the functions of money in i the
fip^d of commerce and are in universal, imperative and' ,per-.
ipetual demand.
The Supply df Dollars
»was left open to competitive production under the law which
iprovided for the free and unlimited coinage of silver on private
account at the rate of 371)^ grains of pure silver to the dollar.
• The law distinctlyjstated that the dollar or unit should
consist of 371^^ grains of pure silver and has never beerr
chanted in this particular. It also provided for the free coin¬
age of gold into multiples of the dollar at the rate of 24%
grains of ppre gold to the dollar. The amount of gold in a
dolLr has been changed twice since, and the fr.ee coi nage, of
silver was suspended in ,187^..
The Production of Dollars.
The production of one or the other of thesé Commodities
is the only way in which an individual has ever been permit¬
ted to manufacture money, and since 1873 it has only been-
ipossible by producing gold ; but the government from time to
.time has exercised its constitutional right to " coin money "
THE AMERICAN HOETAR
of other substances such as nickel and copper, and to print it
on paper. In i86r, $60,000,000 of paper money was issued,
"which was a full legal tender redeemable in coin, and many
millions more of partial legal tender quality has been issued
since. Under the Constitution the States are restrained from
making anything but gold and silver a legal tender, so that
the only source of legal tender paper money is ihe general
government. National" Bank notes are issued under the super¬
vision of the general government and are receivable for public
dues, but are not a legal tender as between individuals.
It must be carefully noted that neither gold or silver or
paper is or can be " money " until it is stamped by the gov¬
ernment into a "dollar" or some fraction or multiple of a
dollar, and we repeat with all possible emphasis that the value
of a dollar is due simply and only to the fact that the laws of
this country give it the exclusive power to pay debts public
and private in this country and thereby creates an imperative
demand for it which is resisted by a more or less limited sup¬
ply, and hence it has value. If the supply of dollars is in¬
creased or diminished in the presence of a fixed demand by
any means whatever, the value or purchasing power will fall
or rise in response, and if the demand should vary in the pres¬
ence of a fixed supply a like result would follow.
The Dollar the Standard.
I
Let us clearly understand then that it is the "dollar",
considered as a manufactured commodity, and not the raw ma¬
terial of which it may be made that is our standard of value,
and that the demand for ' ' dollars ' ' and not the demand for
the materials of which they are made gives value to our
money.
We now have some $500,00(^,000 of silver dollars which
are as valuable as our gold coins, and yet the silver in them is
worth less than half as much as the dollar. The gold in our
coins is of course worth as much as the coin because gold may
.be coined into money free of charge to the holder. The state¬
ment that our silver dollars are " redeemable " in gold dollars
;and are therefore as valuable is not true. The law states, and
the official declarations of the Secretary of the Treasury also,
«ÖTTR STANDARD.
iTial " silver dollars are standard coins and are not redeem¬
able
We will discuss the value of gold and silver bullion later.
Value and Price Contrasted.
It is necessary to make a broad distinction between the
value and the debt-paying power of a dollar or anything else.
The debt-paying power of a dollar is áxed by law and is
tirely independent of the number inexistence, the demand for
them or for the material of which they are made, and it can¬
not change as long as the government that makes it i.s in force ;
but its value or "purchasing power" will depend upon the
number of dollars ofifced in exchange as compared to the de¬
mand for them.
The value of a commodity is its purchasing power as com¬
pared to all other commodities ; its "price" is its value as
compared to money alone. The price of a commodity is there¬
fore its debt-paying power, and it is quite clear that a com¬
modity might maintain its "value" and lose its debt-paying
power, and vice versa. This is in fact always the case when
the value of money, changes. If the value of money rise, or
its power to purchase commodities increase, the power of com-
tnodities to pay debts must decrease in the same proportion ;
nnd if the power of money to purchase decreases the debt--
pa3dng power of property mast increase.
This is the most important consideratioa in the money
■question and will be discussed later.
Per Capita Circulation
is not an index of the value of money in any sense, for it sim¬
ply shows the possible supply and does not indicate the de¬
mand. It is clear that as an individual may require more
money at one time than at another, so the community may
also. The per capita supply of horses in Chicago was prac¬
tically the same the day before the great fire as it was during
the conflagration, and yet the demand for horses became so
great that their value rose enormously in a single day, and
Jthe fact that the value of horses rose is proof conclusive that
14
THE AMERICAN IXJELAK
there were too few horses in the city ; and if it appears that
the value or purchasing power of a dollar is rising it is proof
conclusive that there are too few dollars, even though at the
same time it may be true that there are twice as mzny dollars
per capita in circulation as formerly.
One Dollar as Good as Another.
So long as the service th^t dollars of different materials
will perform for their owners is identical, their value will re¬
main the same ; but if for any reason dollars of one kind be¬
come more desirable than those of another and the supply is
not increased, they will become more valuable.
The demand for dollars as we have seen is due entirely toi
ihe fact that the fiat of this government has made them the
instruments with which debts may be paid in this country.,
just as post Ige staihp- are in demind because they are the in-
strumcfnts witli which postal -ervice may be secured.
Men need "dolíate" with which to pay debts, either
prospective, of immediate contraction, as in effecting current
exchanges, or for deferred payments,, and/pr npplherpurpose.
One may wish to make a ring or other ornament of gold, but
¡he does not need a " dollar" forthat purpose,; a piece of gold
that has never been in the mint will do as well, and if he has
a "dollar" and decides to make a ring of it he will in so
doing destroy the dollar the moment h^ effaces the government
stamp, and cannot compel his creditor 11 receive it He may
wish to make a silver spoon, but he does not need a " dollar "
for that purpose ; other silver will do as well, and if he use a
dollar for the purp>ose he will destroy the dollar and cannot
conrpeî his creditor to receive it. although the labor upon it
may have trebled or quadrupled its cost.
A man may wish to purchase goods or to pay a debt (settle
a balance]» in a foreign country., but he does not need ^'dollars"
for this purpose. American dollars are not money outside of
our own boundaries. ■ It is irue, that our dollars of different
kinds () aper as well as coin) are received at par with each,
other in limited quantities by our foreign neighbors, but it is
i nly because the}^ can be returned to ns at par. Their debt-;
pay i g power in this country and this alone, gives them value
OUR S-TANUARI). T5
ÎU other coiinlries. Tliere is no international money, nor can
there be, for there is no irternaticnal government to create it,
and if one wishes to settle a balance In a foreign country he
must purchase the money of that country with his pr perty or
his American money.
For a|l the pirrposes of mon^-y, therefore, any American
dollar of full legal tender quality, is as good as any other
Amefican dollar of the same legal quality, and one would be
foolish to give more of his property tor one than for the other
If one wanted gold of silver for any purpose it might be more
convenient to buy dollars made of either mt-tal than to seek
for other bullion, but this demand would not be for " dollars,"
but for the metal of which the dollars were made- This dis-
tmction is important and should not be forgotten.
Discrimination Destroys Parity.
The first $60,000,000 of paper money issued during the
war was full legal tender money and would do anyfhing for
its owner thfat any other money would do, and although the
government was no more able to redeem it in coin on demand
than it was to redeem its other issues, it remained at par with
Coin all through the war.
The subsequent issues of paper money paid the soldiers
and all other debts b tween individuals, but would not pay
-duties on imports or interest on the public debt. These cjbli-
gâtions being payable only in coin or in demand notes of the
first issue, a special and imperative demand for these forms of
money was created which enabled their owners to demand a
premium for them.
This is the only reason for the premium on coin during
the war, for there never was a moment during the war when
there was a shadow of a doubt as to the solvency of the North.
The complete success of the Southern arms would not have
affected it, for their secession would npt have led to the repu»
diation of a single dollar of our national debt
Discriraination alone was the cause of it and a frightful
injustice was by this rrieans perpetrated upon the soldiers and
every other citizen of this country which haS'never beirn popu¬
larly understood, but it "S not 01 í purpose to discuss it here ;
it is simply mentioned to show how the law by discriminating
in favor of one kind of dollars made them more valuable than
another kind of dollars.
CHAPTER IV.
Substitutes.
Clold and Silver Coin InNnflicient—Snbstitntcs for Dollar«—Banfc
Note«—Character and Cost of Prodncing^ Substitute»—Substitute»
ITnreliable—Not Enongrh of Dollars—Enormous I se Of Snbsti»
tutes—The Eimit of Substitution—A Dilference in Substitutes.
Gold and Silver Coin insufficient.
There has never been a time since the adoption of the
" dollar " as the standard of value in the United States when
there has been enough of silver and gold presented for coinage
to supply the people with a sufficient number of dollars with
which to conduct their business. If all the gold and silver
that has been coined in all the mints in the world since the
United States mint w is established had come into and re¬
mained in this country to be coined into dollars we should not
have had enough to meet the necessities of our people.
All the nations of the world use silver and gold as money,
but if the money-using people of the world were confined to
the use of such money to the exclusion of all other forms or
substitutes, the demand would be so great as to raise its value
or purchasing power far above its prestnt position.
Substitutes for Dollars.
It is not only true that the demand for dollars has been
sufficient to keep paper dollars of full legal tender power at
par with coin, but numerous "substitutes for dollars" in
various forms have been resorted to to supply the necessities
of trade.
Bank Notes.
Treasury notes, checks, drafts, clearing house certificat^
and numerous other credit instruments pass fVom hand to
hand, and while none of them are money in the true sense of
the term but are rather promises to pay money, by pi ribrming
the principal functions'of money, they are in. demand and as
SUBSTITUTTES.
long as the faith of the local public-in the solvency of those-
who utter them is maintained, they remain at par with real
money and to the extent to which they are able to perform the
work of money they relieve the demand for money and thus
reduce its value. Horses were for many years the principal
source of power for local transportation and locomotion, and
the value of horses was fixed by the available supply as meas¬
ured against the demand. Electricity and the bicycle have
recently entered the field as substitutes for horses, performing
some of the services for which horses were used as well or
better than the horse itself. This relieved the demand for
horses and their value declined. A recent statement of Comp
troller Eckles declares that 90 per cent, of our business trans¬
actions are effected with these substitutes for money and only
10 per cent, with actual money, and still the supply of money
has been so short that its value or purchasing power has
doubled in the last twenty-five years.
Character and Cost of Producing Substitutes.
The production of electric railways and bicycles involves
the expenditure of labor and sacrifice, and while their intro¬
duction as a substitute for horses has worked a hardship to
the owners and producers of horses labor has been largely em¬
ployed in this new field, and great benefits have been derived
by those engaged therein—benefits which equal or surpass the
evils suffered by the horse producers, and the great body of
the people who are engaged in neither of these pursuits are
benefited by the general advance of improvement and the vol¬
ume of business created.
The production of Bank Notes and other substitutes for
money costs practically nothing in labor and sacrifice. No
one is employed in their manufacture and none are benefited
by their issue except the few favored ones who are permitted
to issue them as with a breath. These are able to collect in¬
terest upon most if not all of them while the general public is'
compelled to pay for their use.
48
SttBSTTTXnïlS.
Substitutes Unreliable.
No storm, epidemic, or other disturbance can drive tlie
trolley or the bicycle out of existence ; they are as real or
more real and substantial than the horse they substitute.
The credit instruments which are used for money arc fictitious,
unsubstantial and fugitive, in the hour of financial storm and
business distuibance. In the hour in which they are most
needed they are least available. At the first breath of panic
they fade into nothingness and leave our business stranded.
Not Enough of Dollars.
If we consider all of our paper money of every kind and
all our subsidiary coin as true money, there is not enough of
it with all the standard gold and silver coins to represent the
savings of our people. Comptroller Eckles recently stated
that OUT people had on deposit in the various banks and sav¬
ings institutions 5,000,000,000 of dollars, while at the same
time the total volume of money of all kinds in the country
•outside of the treasury was $1,400,000,000 (it is now $1,600,-
000,000^ This is a remarkable fact since it shows that the
'titleto every dollar is vested in at least three difíerent persons.
ïf we conclttde that nothing but standard gold and silver
coins are money and all our paper money a debt, payable in
-money, then the title to everj' dollar in this country is vested
■in at least five diflerent persons ; or if as some assert, nothing
but gold coin is money, then is every single dollar owned in
fee simple b3' at least ten different pecóle.*
Enormous Use of Substitutes.
Again, The law requires certain National banks to hold
a reserve in their vaults of 25 per cent, of their deposits in
♦There is somethirig " rotten " in this system, and it must be corrected. The
right of any one to lend a dollar and collect rent or interest for it. is as clear as the
right to lend a horse or a house, a«d is based £rst. apon the assumption that his labor
and sacrifice have been given m producing it or in its purchase from the pi-oducer ;
and second, •that while the borrower uses it and pays rent for it the owner <îeni« to
use H. And there is no more warrant for aliowing a man to sell or loan a " dollar "
that docs not exist than there is for allowing him to sell or rent a house that does
,10t exist ; and it is clear from the above that in one way and another, at least three
doilafs have been sold or rented to our people for every dollar in existence. The
method by which this " Aim flam " or " bunco " game is worked is " another story "
upon which we may write in future.
SUBSTITUTES. I?'
lawful money. This is simply prudence based upon expe¬
rience in the past, and if the other banks and savings institu¬
tions were equally prudent, $1,250,000,000 would be thus
impounded, leaviug only $150,000,000, about $2.00 per capita
with which to effect our exchanges. When we consider that
vast sums in the aggregate are represented in call obligations
among our people which do not appear in our bank records,
this becomes an astounding revelation of the scarcity of real
money and of the extent to which subs^tutes have been in¬
jected into our financial system.
The Limit of Substitution.
If we conclude that many of the substitutes for money
are more convenient and therefore more desirable than the
money itself, we must bear in mind that there is a distinct
limit to the extent to which substitutes may be used. It is
clear that they cannot be safely held as reserves in our redemp¬
tion funds which are kept to insure the prompt payment of
current demands, since they are themselves evidences of debt,
and if 25 per cent, of our call obligations in ultimate money is
necessary for this purpose, then is the limit obviously reached
and long since passed in this countrj'.
A Difference in Substitutes.
The convenience of a substitute is not the only thing to
be considered and we wish to point out what seems to us a
most important distinction between different kinds of substi¬
tutes. The silver (or gold) certificates are substitutes which
possess all the elements of convenience, yet each and every
dollar of them represents directly a commodity dollar which
has the cost of production behind it and which is out of use
while the certificate circulates, so that, it maybe justly said
that Labor has been employed to its full value in the produc¬
tion of this substitute.
A bank note, however, while equally convenient and per¬
haps equally safe, has no cost of production behind it, for the
commodity dollar which it is supposed to represent is still in
circulation, having been loaned to the goverment at interest
and paid out to the public for services rendered.
■20
SaJBSTlTUTES.
When a silver or gold certificate is issued thére is a guar¬
antee that some one has actually made the sacrifice necessary
to produce the commodity represented and is entitled to credit
from the country, to the extent of that sacrifice, the actual
-commodity being surrendered.
When a bank note is issued no such guarantee is given.
On the contrary we are simply assured that some one has
loaned the government an equivalent sum of money, in order
to possess which he must indeed be presumed to have made an
equivalent sacrifice, but which he does not surrender to disuse,
but keeps in circulation at interest, so that the bank note is a
clear gratuity to the bank which issues it and employs no
labor in its production.
As between these two forms of substitutes, as long as
there is a surplus of idle workmen in the country, and natural
resources from which the money commodities may be pro¬
duced, it ought not to be difficult for a workingman competing
with idleness to choose.
Nor is the distinction much less marked as between our
other government issues of paper money and the National
Bank notes. For while it is true that no labor is employed to
produce a greenback, yet every one that is in circulation is a
guarantee that some one has rendered an equivalent service to
the government and that the benefit of that service (the per¬
petuation of the Union) was reaped by all the people, while
the service rendered to start a bank note into circulation was
rendered to the bank and for its sole benefit. To choose
between these two forms of substitutes for money is an im¬
pending duty upon every citizen, and it ought to be easily
[performed.
CHAPTER V.
The Value of Gold and Silver,
Recapltnlatlon—The Value of Gol<i—The Value of Sliver Prior to
1S73—Parity under Free Coinage—Foreig^n Exchange as Affecting
Parity—Dilferent Coinage Ratios as Affecting Parity—Theory of
Bimetalism—Experience of Bimetalisin—Importance of this
Country in the Past—Importance of this Country BTow-9io Beason
for Demonetizing Silver in 1873—Demand for and Supply of Gold
—The Present Value of Silver—The Etlect of Free Coinage of
Silver.
Recapitulation.
We shall now conclude that as far as the limited scope of
this discussion will permit the following points have been
demonstrated ;
Fikst. Value wherever found is the result of the con¬
tending forces of supply and demand, and varies with the vari¬
ation of these forces.
Second. That as a standard or measure of weight must
have weight and be subject to the natural forces which pro¬
duce and govern weight, so also a standard or measure of value
must have value and be subject to the varying forces of supply
and demand which create and govern value.
Third. That the American Dolla? is the standard of
value in this country, and not the material of which the dollar
is made.
Fourth. That the demand for dollars is due entirely to
the fact that they are made by law the debt-paying instrument
in this country and is not dependent upon the material oi
which they may be made.
Fifth. That the use of substitutes as far as they per¬
form the functions of dollars relieves the demand and tends to
reduce their value.
Sixth. That the value of a dollar is fixed by the num¬
ber of dollars in existence as compared to the demand for
them, and not by the value of one or all of the materials of
which they may be made.
■22 THE VALUE OE GOLÏ) AND SILVER.
The Value of Qold.
We now propose to show that the ra'ue of gold is fixed
by the value of the money into which it may be freely coined,
and that the contrary notion that the value of money is fixed
by the value of the gold of which it is made is as false as it i5
popular.
The value of gold is fixed by the contention of supply
and demand. The total production of gold in the world for
the last 400 years was $8,781,858,700, and the total stock of
gold money in the world in 1895 was $4,143,700,000.
The total production of gold in the world since 1873 is
given as $2,728,226,200, and during the same period the mints
of the world coined into money $3,635 790,822, or $900,000,-
OQO more than was mined. Some of this was of course old
coin recoined. The proportion of foreign recoinage is not
given, but the United States coined $1,044,130.051, or nearly
one-third of the entire amount in the same period, of which
$45,354,422 was recoined ; so that if we allow the foreign re-
coinage to have been four times as great in proportion, it seems
safe to say that the entire production was coined into money.
Assuming then as certain that at leaslt/ta/f of the supply goes
into money we see that the principal demand for gold is for
the manufacture of money, and if this demand should cease
entirely, or even considerably, the other demands could not
sustain the value.
/
Nothing is more certain than that the flow of any raw
material of which there is a limited supply will be into the
most profitable channel, and its use in this channel will fix its
value and compel all other users either to substitute it with
something cheaper or raise the value of their product, if the
demand for it is imperative.
The manufacture of money in civilized countries is now
restricted to the single commodity, gold, and as the value of
money has risen the value of the raw material has risen, be¬
cause the supply has not been sufficient to meet the demand
for money and such other imperative demands in the arts as
have persisted.
THE TAXTJE OE GOLD AKT) STETEE,
23
The Value of Silver Prior to I873.
Prior to 1873 same was true of silver, for the saiae
general relations of sufSply and money use existed with refer¬
ence to silver. The total production of silver in the world to
Since 1873, the world''.s production has been $2,967,200,200
•- " coinage ■" $2,878,033,234
Parity under Free Coinage,
Under the laws which permitted the free coinage of both
gold and silver at a fixed ratio in the principal mpney using
countries, the demand for moDe> being in excess of the supply
of either metal and constituting the principal demand for both,
maintained them at a substantial parity because a short supply
of one and a tendency to rise in value would transfer the entire
money demand from it to the other and prevent a separation.
Money, like everything else, flows from one country to
au'dher in obedience to varying demand. Even gold itself is
alternating above and ! below par as indicated by the rate of
exchange, if the demand for money is greater in Germany
than in France, French coins of given weight as well as bul¬
lion, would flow to Germany to be coined into German coins
<of equal weight, aad vice versa.
If the demand for American dollars exceeded the demand
for coins of equal weight in any foreign country, the coins and
bullion of that country would flow to our mists for coinage.
Sut notMherwise.
Different Coinage Ratios as Affecting Parity,
When the free coinage of silver and gold was first estab¬
lished in this country the ratio was fixed at 15 of silver to i of
gold by weight, while the ratio in Europe was 155^ to i, and
in the ebb and flow of coin and the corresponding course of
bullion we got all the silver and the Europeans all the gold,
for tbe^bvious reason that when money was flowing to Europe
■date is '
Coinage to date.
$10,344,561,140
$4,235,900,000-
Foreign Exchange as Affecting Parity,
¡24
THE VALUE OE GOLD AND SILVEK.
an American gold coin could be converted into more European
money than could a silver coin of equal value, and therefore
gold Tuent out instead of silver ; and when money was flowing
to us, a foreign silver piece could be converted into more of
our money than could a gold piece of equal value, and there¬
fore silver came in instead of gold.
This was our experience from 1792 to 1834, but in 1834
the weight of our gold coin was altered and the ratio changed
from 15 to I to 16 to i, and the foreign ratio remaining at 15)^
to I the position was reversed and silver went out and gold
came into this country.
From 1834 to 1873, 8,031,238 standard silver dollars and
$77,734,964.50 of full weight and full legal tender fractional
pieces were coined in our mints, nearly all of which was
shipped abroad and recoined into European money. In 1853,
the weight of our fractional coins was reduced and $59,047,406
of them were coined, most of which remained in this country
because it did not pay to export them.
About $1,000,000,000 of gold was coined in our mints
during this period (62,000,000 in a single year), and silver was
coined in correspondingly large quantities in foreign countries.
The foreign coinage for each of these years is not given by
our official reports, but the world's production of silver for the
period was $2,000,000,000, more than half of which was coined
in the French mint. (See table III).
It is clear that with two different ratios established in
countries where the demand for money was practically equal
there would be room for a divergence of the values of the two
metals to the extent of this difference plus the cost of trans¬
portation to and frpm the mints. For, since an American sil¬
ver dollar could be coined into 3 per cent, more of European
money than could a gold dollar, the value of gold must rise
more than 3 per cent, before the American demand would leave
it for silver, or silver must fall more than 3 per cent, before
the American demand would fall upon it ; but if the change
should exceed 3 per cent, sufficiently to pay transportation
and show a profit, the entire demand both European and
American would leave the one and fall upon the other and pre¬
vent a further divergence.
'l'ÎÏE VALÜE OF GOEt) ANÜ SIEVES.
25
Theory of Bimetalism.
This is the theory of Bimetalism and the practical test of
all time down to 1873, and especially this experience of the
two ratios from 1^34 to 1873, confirms its correctness.
With the mints open to the free coinage of both metals,
at a fixed ratio, and the option with the debtor to pay in
either, there can be no serious divergence unless the entire'
money demand can be ficlly met by one of the metals, or the de¬
mand in the arts is sufficient to absorb one of them entirely from
the money use.
A glance at the figures will show that there is no reason¬
able probability that the latter will ever occur on account of
the enormous quantity of each already coined. The total out¬
put in 1896 is given as of gold $202,956,000, and of silver
$213,463,700, of which $59,251,640 gold and $38,580,184 sil¬
ver, or about 24 per cent, was used in the arts, and the stock
of coin is over $4,000,003,000 of each, or enough to supply
the world's present consumption in the arts for forty years if
none were mined.
That the world can ever bo fully supplied with money
from either of the metals alone is even more unlikely, for after
having absorbed all the gold that could possibly be diverted
from the arts, and an equal quantity of silver, together with
fabulous sums of paper money, the value of money in civilized
countries has steadily risen for the last twenty-five years, not¬
withstanding the fact that substitutes for money in the shape
of our modern credit instruments are used in 90 per cent, of
our current exchanges, thus lessening the natural demand for
money.
Experience of Bimetalism.
Under the conditions existing prior to 1873, when the
principal mints of the world were open to the free coinage of
both metals, the recorded experience of the world was as
follows ;
PERIOD. GOLD. SILVER.
1792 to 1840. World's annual product, $ lo.ooo.ooo ^>26,000,000
1840 to 1873. '* * " 111,861,000 48,000,000
25
THE VALUE OF GOLD AND SILVER.
varying from 2.6 times as much silver as gold to 2.3 times hs
much gold as silver, and yet the parity was maintained within
the limits pointed out.
Importance of this Country in the Past.
The importance of the United States as contributing to
that result is significant, and we wish to emphasize it here,
for during the period from 1840 to 1S73, when the production
of gold was enormously in excess of any recorded precedent
and frequently four times as great as that of silver, the United
States had '^' overvalued gold^' or had established a higher
mint rate for it than that of Europe, and the burden of main¬
taining Its value fell first upon this country, for while the
annual output increased from $33,393,000 to $132,513,000, or
mearly fourfold in four years, and Germany, Austria and Bel¬
gium, at the behest of the money lenders, completely, and
Holland and Portugal, partially demonetized it, the United
•States absorbed the entire output of the mines in California
and elsewbere in this country from 1847 to 1865, and imported
some millions from abroad, thus maintaining its value within
the limits of the difference inooinqige ratio plus the cost of
Transpoitation. Only a few times during the entire period did
the value of silvernrise to a point that would check its flow to
the European mints, and then only for brief periods. The
'United State« coined $62,6i4,49í2 of gold in 1851, $56,846,187
in Í852, and $83,395,530 in 1861, while in 1895, (forty years
laater), we coined but $ü9,616,357, ^896 but $47.053,060.
importance of this Country Now.
This was an exhibition of the demand for money in the
United States as compared to that of the world, and if any
ihave doubts as to the ability of *iiiis country to remoaetize
-silver and maintain its parity at 16 to i with gold, let him
rremember this experience in which our country was but an
infant-(23,000,000) among the nalioas, and the disproportion,
in (dte production of the two metals infinitdy greater than it
is now, and greater than it is ever likely to be again, and per¬
haps his appreciation of the present importance of this country
in determining the financial policies of the world will expand
THÇ VAtÜK Olf GOLD AND SILVER.
27
to a ■reali^ation of the fact that with 75,000,0. 0 of people
whose appreicatioii of the value of money is second to none on
earth, and with our relative numerical and financial import¬
ance many times as great as in the former strujigle, we can dic¬
tate the gold price of our silver product to the world, as we
then dictated the silver price of our gold product,
The United States was then one of the greatest and is
now the greatest money using country in the world, and when
in 1873 we ceased the coinage of standard silver money and
the coinage of "Trade Dollars" was substituted, the" pace
was set for the world and in a few years all the civilized nations
had followed suit.
No Reason for Demonetizing Silver in 1873.
No intelligent reason has ever been given for this change,
but lest any suppose that a serious change in the relative sup¬
ply of silver or gold had occurred to induce it, we append the
following table showing he world's production by years :
GOLD. SILVER,
Coining
Value.
Commercial
Value.
1870—j
5129,614,000
155.663,000
$57.173.000
1871 —
115.577.00.
81,864,000
83.958,000
1872—
115.577.000
• 81,864,000
83,706,000
1873—
96,200,000
81,800,000
82,120,800
1874—
90 750,000
71,000,000
70.674,000
1875—
97,500,000
80,000,000
77,578,000
1876—
103,700,000
87,600,000
78,322,600
1877—
113.947.000
81,040,700
75,278,600
1878—
119,092,000
94,882,200
?<4,540,000
1879—
108,778,800
96,172,600
83.532,700
No change either in quantity or value is here disclosed
that could warrant such legislation, but it was done and the
entire demand of thè civilized world for money fell upon and
Was restricted to gold. The production of gold had fallen
from $123,000,000 in 1863 to $96,000,000 in 1873, while the per
capita demand for money had increased with the march of civil¬
ization and the inevitable result was a rise in the value of
money. An enormous increase in the use of substitutes and
an abnormal inflation of credits has served to check this rise
128
THE VALUE OF GOLD AND SILVER.
and modify its consequences, but the limit of the safe use of
•credits and substitutes has been reached and long since passed
and still the vtilue of money has risen lo > per cent.
Demand for and Supply of Gold.
The demand for gold in the money channel has been in
excess of the supply and since gold may be converted into
money without cost its value has risen with the value of money.
The production of gold in the twenty jears from 1853 to
1873 was $2,559,253,000, or $410,495,600 more than was pro
duced in the twenty years following from 1873 to 1893 ($2,-
168,757,400), showing a decreased supply meeting an increased
demand, so that an increased value was inevitable. In short,
its value has become so great that it can be, and is now being
mined in the most inhospitable and inaccessible regions of the
world and in nearby districts, from ores so poor that notwith¬
standing the enormous improvements in methods they could
not be worked with proht at its normal value. Under the
stimulus of this abnormal demand the production rose in
1891-2 to the highest figure reached in the fifties, and is now
far in excess of it and still the value is rising.
The Present Value of SHver
like that of gold is fixed by the value of the money into which
it may be freely coined. The production of silver since 1873
has been normal and has increased in about the same propor¬
tion as that of gold. The demand for it has consisted of that
used in the arts, and for the coinage of civilized na¬
tions, an'd the unlimited coinage of Mexico, China and untä
very recently India and Japan.
The demand for money in these countries whose mints
are still open to coinage on private account, which is compar¬
atively small on account of thek semi-civilized and unpro¬
ductive condition, U fully met by the silver supply, and there
.'-ihas been no rise in its value.
As we descend in the scale of civilization the demand for
; -money as well as for all other modern conveniences decreases
• until in savage districts it ceases altogether, and a string oJ
beads or a glittering toy will buy more of their vrude producl|
THE VAEUE OE GOLD AND SILVER.
29
fhan will a bag of money. China with her three hundred and
sixty millions of inhabitants has but $2.08 per capita of money
and has all she wants. Vast districts in the Empire have
none at all and n\ake their few exchanges by direct barter,
The penetration of English civilization into India is eflfecting
a change in that country and a growing demand for money is
apparent. They now have $3.33 per capita, and since the
Indian mints were, closed to silver the value of their -money
has risen considerably. The Central American States have
$3.66 and Mexico has S8.41, while in the heart of Africa they
have none and want none.
India and China with 656,003,000 of people have ,700,-
000,000, while the United States with but 72,000,000 has an
«quai sum, and our money is twice as valuable as is theirs.
If the movement which is now on foot to place this vast popu¬
lation with the rest of the world on a gold basis, should suc¬
ceed and compel them to use only gold for money, the de-truc-
Aion of their presen^ stock and their growing demand for future
tsupply will raise the value of money beyond anything we have
imagined possible.
The value of money, however, in these countries has not
arisen because the demand is fully met by the supply of silver,
.and the value of silver has not risen because the supply has
been equal to all the demands upon it.
Silver at par with other Commodities.
The value of silver has not fallen materially because the
cost of production has been a check upon producers ; very
jmany of the miners have been compelled to cease operations
.and only those most favorably located and best equipped can
continue. Much of the silver that is now produced is a by¬
product of copper or gold mines. The demand for copper has
"been greatly stimulated by thé applications of electricity, and
many of the copper ores carry a heavy percentage of silver.
Tf //lis supply continues aud the demand for silver decreases
greatly as by the substitution of gold or paper in the money
use, silver may fall much lower than it now is, but as long as
it must be mined directly t,he cost of production will prevent
its fall much farther than it now is.
fflE V\LÜE OE ÔOLÎ) A^fO SÏEVEK.
The fact as shown by Table I that silver bnllion has maiil-
tained its place with other commodities and has lost none of
its purchasing power, is proof conclusive to any fair mind that
no injustice would flow from its remonetization.
The Effect of Free Coinage of Silver.
If the United States mints are opened to silver at i6 to i,
the value of 371^ grains of silver will rise to the value of an
American dollar and stay there as long as the mints are open.
The value of any and every American dollar of fulblegal
tender quality will be equal and stay equal to every other
American dollar.
The value of silver will be and remain at par with gold
until the demand for American money is fully met by the supply
of silver.
If the demand for European money is in excess of the de¬
mand for American money, gold will flow to Europe since gold
is the cheapest commodity that can be convested into European
money.
If the demand for American money is met by silver and
the demand for European money cannot be met by the present
stock of American coin ($750,000,0.^0), plus the annu il output
of the mines of the world ($240,000,000) estimate for 1897,
the value of European money will rise above the value of
American money and gold will go to a premium as measured
in our money.
In any event the increased supply of European money
coming from all the gold instead of a part of it, and the in¬
creased supply of American money coming from all the silver
instead of a part of the gold, will decrease the value of both,
and a rising scale of prices will ensue all over the civilized
world.
In those countries which now are fully supplied with
money from silver the total loss of supply through its diver¬
sion to the American mints and the probable diminution of
their present stock by its conversion into American money will
experience a rapid if not an instantaneous rise in the value of
their money and a corresponding fall in their prices
The final tendency of which joint influences will be to
restore the par of exchange and pârtially at least the scale of
prices as they existed throughout the world prior to 1873.
CHAPTER VI.
The Test Question.
'Ttae Arlttametlc of Faets—Production of Silver—Present Product all
Consnmed—Increased Production—Probable Supply of Silver—
Tbe Demand for Money—Ttae Immediate Demand for Silver—Ttae
Current Demand for Money—Demand Unlimited—Our Debts
Abroad—Our Present BTeeds—Wtaat of ttae FutnreT—Hon. A. J.
Balfour on Standards—Trusts and Combines born of Falling
Prices-Ttae Present Inquiry.
The test question in the minds of those who think it
mecessary thst gold should not go to a premium, is as to
whether the United States can furnish a demand for money
that will absorb the world's surplus product of sil ver and still
maintain the value of our money at par with the gold monéy
■of Europe.
The Arithmetic of Facts
as.sures us that we can and we now review it as a conclusion
to this part of our argument.
Production of Silver.
The annual product of silv^ in the world has remained
about the same for the last four years. For the last two years
it has been as follows j
1895. ««96.
World's product, , $216,292,500 $213,463,700
TJ"ited States, ... , 72,051.000 76,069,000
Mexico, .... 60,719,000 59017,600
Soliida, .... 28,444,400 Î9,393,900
■Chile, .... "6,505,900 6,505,900
Peru, . . . - . 4,089,500 2,914,300
"Columbia, . . . 2,182,400 2,182,400
Central American States, . 2,000,000 2,000,000
North and South America, . ^75,992,200 168,<83,175
From this we learn that four-fifths of the entire product
.comes from this hemisphere, three-fifths from the United States
and Mexico, and one-third of it from the United States alone.
■J2
„I -.5'
thí: test question.
•■•vTlî.e total production in the United States for the last fouf
years, i®93-94-95 and '96 was $289,696,000
Of this sum we coined $ 46,791,202
Exported . . . 138,924,761
Consumed in arts . . ' 103,980,037 $289,696,000
The world's production in the same period was $854,000,000
Of this the world
Coined, $326,000,000
Recoined, 70,000,000
Net coinage,
*Used in the Arts,
United States, $103,000.000
$456,000,000
India,
Russia,
France,
England,
Italy,
Other Nations,
140,000,000
40.000,000
25,000,000
20,000,000
12,000,000
20,000,000
$360,000,000 $816,000,000
To be accounted for $38,000,000
Statistics as to China are not at hand, but judging by the
exports of England to China it is probable that she imported
as much as $50,000,000 more than she coined in the period,
and if so, it shows that the entire product has been consumed.
Present Product all Consumed.
The latest report of the director of the mint does not
show that any considerable stock of silver bullion has accumu¬
lated anywhere in the world, and we therefore conclude that
the experience of the last four years, in which the production
of silver has been greater, and its opportunity for free conver
sion into money less, than in any similar period of the world's
history, has demonstrated that the demand for it is persistent
and to a degree imperative.
*.No reliable statistics are obtainable as to the amount of silver consumed in the
arts m foreign countries and our own are not complete, but the net i nports are given
and the coinage for each year, and the amount above given is the difference between
the net imports and the coinage.
THE TEST QUESTION.
33'
Increased Production.
Under an increased value it is certain that some of these-
demands would be decreased, just how much no one can tell,,
but we will assume as a basis for our calculation that under a
value double that of the present only bue-half of this demand
would persist, and that the remainder ($100,000,000) of the-
present production would come to the United States mint.
Under an increased value it is certain that the production
would be stimulated, but to what extent no one can say ; but
the greatest recorded increase in the production of gold under
a similar stimulus was,5o,per cent, in five years. We think
it altogether probable that this ratio would be equaled by sil¬
ver, and so vye assume that the production would rise to $300,-
000,000.. per year> and that $?oo,ooo,ooo of it would come to-
our mints.
' Probable Supply of Silver.
We consider this the largest quantity that could ever
come in a single year, for as the volume of money was in¬
creased its value would be decreased and ultimately, to the
present bullion value of silver (cost of production), at which
time its production would have shrunk to its present propor¬
tions.
The coined silver of Europe could not flow to us, for it is
now worth 3 per cent, more in gold than it would be then, nor
could the manufactured silver come to the mint for it is also
more valuable than our coin , so that with as much certainty
as we can predict anything with regard to either gold or sil¬
ver, we can say that the supply cannot be expected to exceed
$200,000,000 per year, and may not reach half that sum. This
would be eight times as much as was coined under the Bland
Act. The-quantity of Mexican or Indian money that can be
spared from their present circulation would be comparatively
small, but large or small it could come but once, and then only
in exchange'for our products.
With this estimate of the possible supply of silver we
now consider
34
THE TEST QUESTION,
The Demand for Money
which is to absoib the silver product, and it may be summed
«P as follows ^
By the last statement of the Treasury department (July
31, 1897), we have outstanding $346,000,000 of greenbacks
and $230,000,000 of National Bank notes. The greenbacks
are objected to by our gold standard friends ostensibly because
ibey are redeemable in gold and cannot be maintained at par
without forcing the government to borrow gold with which to
redeem them cjn demand.
We think, however, that the real reasons why the small
percentage of the gold men who really understand the ques¬
tion want them retired are, First, that they are a legal tender
for all debts between individuals and cannot be discriminated
against by gold payment clauses in private contracts ; second,
that they are not redeemable,in gold, but in coin at the option
of the government ; and third, that their retirement with
bonds will furnish a permanent investment for the banks and
make room for more bank notes which will be under the con¬
trol of the banks.
We with other bimetalists object to the bank notes as
being a special privilege to a favored class, and therefore let
us retire both of these objectionable forms of substitutes and
create an immediate ánd imperative demand for silver which
will restore its parity with gold.
We can thus make róóqt for $576,0001,000 of silver without
affecting the present volume of our currency or its purchasing
power in the least. This demand can be made immediate and
imperative to the extent of the cash in the treasury ($250,000,-
000) and the volume of bank notes ($230i,ocki,0O0), and this
being three times as great as the possible immediate supply
the value of silver will immediately rise to a par with gold at
16 te I.
Agaid; we have been told that under-free coinage of-silver
our gold would immediátéfy lea^e Us. This is, of course, a
-mere conjecture withóút a single fact or argument to sustain
it, but if it does leávé us altogether of in part the volume of
our money Would be decreased and its value increased in pro¬
portion, so. that gold would fall kelow ;par. .(This is among
THE TEST ÔHKSTIOH.
35
tíie most foolish of the fool statements of the gold standard
advocates). If we admit however that our gold will leave us
and flow to Europe, which is possible in the course of ex¬
change, it would make room for $7oo,ooo',ooo of silver with¬
out increasing our stóck ' of money at all or decreasing its
value in the least. On the contrary, if our $700,000^0, to¬
gether with the annual output, ($240,000,000) of gold should
flow to Europe it would inevitably increase the suppl)' and
decrease the value of European money, and our money would
go to a premium unless our stock was proportionately in¬
creased. It is therefore probable that more than $1,009,000,-
000 of silver would be required to replace the gold and keep
our money from rising above that of Europe.
Again. The Comptroller of the Currency reports that
our people have on deposit in our banks and savings institu¬
tions $5,000,000,000, and the law requires certain of the Na¬
tional banks to hold 25 per cent, of their deposits in reserve.
If all the banks were required to do the same, and common
prudence would seem to indicate that they should be, $1,250,-
000,000 would be thus impounded as against $850,000,000
which .is now so held, making room for $400,000,000 without
increasing the circulation and simply furnishing a safe basis
for our present bank deposits.
t
The Immediate Demand for Silver.
From the ^regoing it is clear that $2,0 0,000,000 of sil¬
ver can be absorbed without affecting the value of our money
as measured in gold, but it is also clear that the predicted flow
of $700,000,000. of gold to Europe and its replacement with
that amount of silver in this country would add that much to
the world's stock and tl;nd to a general increase of prices.
The parity of the metals once restored it is likely that
European countries would reopen their mints to silver, but
presuming that they do not do so, and that the burden of
maintaining the parity of silver will rest entirely upon the
United States, we now consider
The Current Demand for Money
in this country as compared to that of Europe, for it is to be
remenibered that while we must absorl) all the silver. Eut ope
35
THE TEST QUESTION.
^i7tst absorb all the f;old, and as the production of the two
metals is now about equal the difficulty is not so great as it
would seem, and not nearly as great as that of maintaining
the parity of gold in the fifties, when there was more than
twice as much gold as silver produced and our comparative
importance far less than now^
Demand Unlimited.
"What is the demand for money in the United States? It
comes from seventy millions of the most industrious, enter¬
prising, wealth-producing and comfort-consuming people oh
the earth, equal in number and double in consuming power to
England, Ireland, Scotland, Wales, Spain, Belgium, Holland,
Portugal and Switeerland combined. This vast army of work¬
ers inhabit a territory that stretches from the Atlantic to the
Pacific Ocean, and includes three million square miles of the
most productive land in the world.
In point of development the vast resources of thiscountry
are practically untouched, although of the 1,400,000,000 tons
of freight per loo miles, we carry 800,000,000, or 57 percent.,
and notwithstanding the loss we have sustained through the
gold standard, our total wealth is $§4,00 ,000,000, or 36 per
cent, greater than that erf Great Britain. Our manufactures
in 1888 were $7,200,000,000, or 75 percent ¿greater than those
of the United Riugdom,
©ur agricultural products are $3,800,000,000 mere than
- double those of Great Britain, and $500,000,000 more than
those of Russia <Cincluding Poland), ^ut time would fail us to
write farther in this line. Suffice it to say that this is the
mightiest nation tíiat the world has ever seen, full of inherent
;:power and untold possihilkies, and yet die seems to be gradu¬
ally losing headway. Like a mighty steamer in mid-ocean,
with every other equipment to ,per.fection and a scaití; supply
of oil, with smoking boxes and abraded bearings, the machinery
groans and labors as if in the throes of death. She gradually
loses way and finally stops for want of oil. So this great ua-
rtion in the forefiont of the race of civilization, freighted with
-the deanest hopes of the common people of the world,, backed
THE TEST QUESTION. 37
by TesouTces "beyond computation aad invited forward by in¬
comparable opportunities, is hampered and restrained by lack
of money. With brains and labor to spare, with enterprise
and intelligence and untold resources to develop, we are idle
for lack of money.
With am area capable of sustaining the population of the
globe, a form of government that should command the love
and patriotic service of every man, and a traditional reputa¬
tion as the land where the oppressed of every clime might find
a refuge, we find ourselves so hampered and depressed that it
is œrkaisly profxised to restrict immigration and
■* ' Shut the gates of mercy on mankind '
For years we have borrowed money firom abroad for every
rising need in our development until our indebtedness is appal¬
ling, and when we propose to coin the product of our own
labor into the constitutional money of the laúd, we are met
with the assertion that we will ''over produce"' it and impair
our credit so that we can borrow no more.
It is Grange that men do not see that when we shall sup¬
ply our own demand by employing our own labor in manufac¬
turing our own money, we shall not need to borrow, but can
■begin to pay what we already owe abroad, But let us see.
We need money—First, to lubricate the machinery of
trade, and to loosen the abradçd bearings of our industry. We
áire said to have a ckrculatioa, when it is not hoarded in banks
and stockings, of fr, 600,000,000 at the highest estimate, and
yet 9© per cent, of our business is done with bank and other
credits, i© percent, of "oil"' and 9© percent of "wind".,
with which to lubricate our machinery. What money we have
bas been bsurr©wed from England three times over, and we owe
her now $5,000,00a,ooq. Every time we gid: stuck for " oil "
•iwe borrow from England until we are now in a position where
,(with normal crop conditions abroad) we cannot pay our inter¬
est without herrewing money to do it with.
^ur Debt Abroad.
"The steady and persistent growth of our debt abroad is
■one of the most serious facts with which we have t© deal. We
bave not space to go into detail to show how our debt abroad
38
THE TEÍíT ÔÛESTÏOÎf.
began and reached its present magnitude. Sufficient to say
that in i860 it was insignificant, and we were carrying 65.2
per cent, of our foreign commerce in American bottoms. In
1869 American shipping had fallen to 27*5 per cent-i and had
netted an annual loss of $25,coo,00 3 in freights to us. This
and other items together With the balance of trade against us
^ad created a debt of $1,500,000,006 in 1889. The fall in
prices since 1873 has served todecreasé tbfe debt paying power
of our balances of merchandise, and the debt has steadily
grown until it now amounts to $5,000,000,000. To see how,
take the year 1894, which though Mr Cleveland and the Wil¬
son bill were in full force, showed a larger balance in our favor
of merchandise than any year since 1881.
Ï894. United States. . DR. CR.
To interest on debt, $200,000,000 . ,
To excess of freights on Eng¬
lish shipsy 31,400,000
To excess of bills drawn by
American travelers abroad, 75,000,000
Èy net exports, merchandise,
By net exports, gold.
By net exports, silver.
Total.
Net balance against us.
$306,400,000
Í895. United States. 'DR.
To interest on debt, $200,000.000
To excess for foreign freight, 39,760,000
To excess of bills by travelers
in Europe, 75,000,000
By net exports merchandise.
By net export gold.
By net export silver,
Í237.145.950
4,528,94^
37,164,715
$278,837,005
27,600,39^
,->1
$306 400,000
CR.
^ 73.568,200
31,948,449
27.037,901
Total,
Balance against us,
$314,760,000
Í134.590,550
180.169,450
Thus we see that in two years we have
Europe to the extent of $207,769,845, of over
$314.760,00
gone in debt to
$100,000,000 per
THE TEST QUESTION.
39
year, to balance which interest-bearing obligations of one kind
or another have been sold in Europe. We need therefore
f 100,000,000 per year with which to pay our interest charges
to Europe before any can be had for the development of our
own resources. If we add to this an equal, sum per year to
apply on the principal we can see a demand that will absorb
all the silver we can hope to get during the next century.
Our Present Needs.
Again. If the last generation found a legitîmaté use for
the $5,000,000,000 of foreign money which it borrowed, and
the marvellous growth of the wealth-producing enterprises
which it was used to capitalize and develop is proof that they
did, w^at shall we say of the,present and future needs of our
people? Will they be less? Impossible J , Will they be
i;reater ? Undoubtedly, and many fold. There is no dissent
from this conclusion, for evei}, the most radicfd goldites admit
it in their strenuous contention for "strengthened credit."
Hon Thomas B. Reed, in all his public utterances during the
last campaign, insisted that we should " maintain our credit "
so as to " invite foreign capital to come to us for investment,"
and we submit it to the candid judgment of patriotic Ameri¬
cans if these facts do not prove that our demand for money is
in excess of the possible supply from silver. And also ask
them to consider whether it would not have been better for us
in the past to have employed our army of idle and hopeless
working people in producing this money from our silver mines,
than to have followed the advice of Mr, Reed and borrowed
it from abroad ?
This home industry " would have employed every idle
man in the United States at remunerative wages, without ad
ding one iota t© the stock of manufactured goods competing
in the markets oí our country or the world. The money we
Jborrowed would have remaiáed in "Europe to maintain the
price of commodities there, the debts of the world would have
been reduced., the " trámp"''and~ the "anarchist" would
iiave been unknown in this fair ^nhd, and the star of hope
would have shed its blessed lustre, in the homes and hearts of
the poor.
The paët is gone.
40
THE TEST fiSÛESTÏCW^
But What of the Future ?
That oar.money must increase in quantity, as we incfeáSC
our store of property, or a fall in price, or debt-paying power
ensue, is as certain as that God reigns or that $ Hanna fepured
a $eat in the feoate.,
Money is one of the modern agencies in the production of
property or commodity wealth. If one desires to build ä house
or manufacture any other product he must, in the advanced
stage of our civilization whére the division of labor is so
great, take money^ which is imperishable and of fixed debt-
paying power, and exchange it for a commodity which is not
only perishable, but certain to vary in debt-paying power with
the rise and fall of the value of money. If, therefore, the
supply of money is not increased so as to prevent its rise in
value, no man can safely undertake to produce or improve
property. Speculative enterprises, which depend upon spo¬
radic development from local causes, alone can thrive under
such conditions.
Hon. A. J. Etaffour on Standards.
The Right Honorable A.J. Balfour, of Manchester, Eng¬
land, said in a speech on October 27, 1892 ;
"Of all conceivable systems of currency, that system is
assuredly the worst, which gives you a standard steadily ap¬
preciating, and which by that very fact throws a burden upon
every man of enterprise, upon every man who desires to pro¬
mote the agricultural or industrial resources of the country,
and benefits no human being whatever, but the owner of fixed
debts in gold." •
No truer words were ever spoken, and in the new century
that is about to dawn the world will go forward in the produc¬
tion and improvement of property, just in proportion to the
speed with which we increase our stock of money. The im¬
proved methods of production, communication and transpor¬
tation, which are but the concrete results of increased skill
and intelligence, have multiplied our productive capacity many
fold, and unless the production of money is proportionally
multiplied some of our people must of necessity remain idle
THE TEST QUESTION.
all the time, or all of us a part of the time, or else a continued
loss of the debt-paying power,of ^property and-a constant ^àïn
in the power and burden of debts result,
Trustsand Combines born of Falling Prices.
The limitation of the production of money to gold in the
last twenty-five years has resulted in a short supply followed
by its rise in value, aud a corresponding loss in the price or
debt-paying power of property, to resist which " trusts " and
combinations of capital invested in productive enterprises have
been formed, and, employers,.pinched by the increasing bur¬
dens of falling prices have reduced or endeavored to reduce
wages, to resist which Labor Unions and Federations of
Workmen have been formed, strikes, lockouts, riots and blood¬
shed have ensued from the clash of contending efforts, all
aiming at the- last analysis to maintain prices 'by restricting
production, through voluntary or enforced idleness •
. The God-given and constittitionally guaranteed rights of
meii to buy and sell in the most advantagëou's markets have
been-denied by law to merchants and producers-and the in¬
dustrious and ambitious laborer, with the brawn and muscle
of youth as the only means of providing for his helpless and
decrepit age, is restrained from using it by the threats of his
fellows and compelled to see it perish, with his hopes as the
hours pass by, and all in well-meant but fruitless endeavors to
maintain prices while adjusting ourselves to the short supply
of money from the single gold source.
The Present .Inquiry.
Shall the selfish outcry of the owners of '' fixed debts in
gold" deter us from applying the remedy to the root of the
evil ? Shall the slavish fear of " depreciating " their money
induce us to continue the suicidal policy of destroying the
debt-paying power of all other property, together with the
hopes and aspirations of our people ? We answer No! a thous¬
and times NO ! and as long as the God of heaven gives us
breath we will protest against the present system.
CHAPTER Vn.
The Effect of Falling Prices.
Vwernment vs. Prlvnte Regnlatlon—Senator Hoar and Sbylock—
The-Owners of flxed debts In Gold—The Agents of these gold Own¬
ers—Offlctals who are hired—Enropean Cereal Consnmers-Europe
vs. Enited States—Onr Eoss their Oaln—Eoss to Farmers—Wheat
wnd 'Silver—Prices have not fallen in Silver-nslng Countries—
Mexican vs. American—Disadvantage of Americans—England's
'use of American silver in India—Who wants Bimetalism ?—Stand-
<ard of Prosperity-
Government VS. Private Regulation.
As iong as the " Dollar" is maintained as the standard
unit of value, the government which created it and is author¬
ized by the Constitution to "regulate the value thereof" is
in a position to protect itself and'its citizens from extortion.
To correct a rising tendency, free coinage may be extended or
paper money issued, while a fall in the value of money beyond
an equitable average may be checked by withdrawing paper
substitutes or restricting the coinage of commodity money.
For the unequivocal assertion and strict maintenance of
this financial policy we strenuously contend, for if it be con¬
ceded that the commodity gold is the standard and that all
money shall refer to gold for valuation, then will the regula¬
tion of the value of money pass into the hands of those who
own the gold, and by a concerted withholding of gold from
circulation they can enhance its value, and with it the value
©f all our money, and correspondingly decrease the value of all
other property. Having thus wrecked unfortunate debtors
and absorbed their property at ruinous prices they can loosen
the strings, send out their gold, reduce its value, boom the
price of property and sell at the advanced valuation.
Having unloaded their holdings they can begin again the
hoarding process, withdraw their gold, reduce inrices and shear
the world libitum ai inßniium.
Senator Hoar and Shylock.
In a discussion of this question in the U. S. Senate, on
January 25th, 1898, Senator Hoar, of Massachusetts, compared
THE EFFECT OF FAILING PHICES.
43
those who wçre contending for the rights of the debtor under
existing law, to Shylock, demanding his " pound of flesh"
because it was " nominated in the bond,"
Mr. Teller, of Colorado, who was speaking (on the Teller
resolution which was an affirmation of the rights of the gor-
ernment) declined to belittle the discussion by following Mr.
Hoar into such a comparison, but we shall insist that if the
figure is used at all the celebrated " Fourth Act " shall be set
with the characters rightly placed.
The United States government in the role of " Portia ",
the righteous judge, who is to determine the issue as between
" Antonio ", the hapless debtor, who represents the producing
classes whose blistered hands and quivering flesh must pay
the bond with all its increment and interest, and " Shylock ",
the money lender, who, with merciless purpose, demands not
justice, but the consummation of a scheme which in its execu¬
tion ^ill destroy the merchant's life. We shall not attribute
the malice of Shylock to the modern creditor, but rather thank
God that the metaphor fails in this as in some other particu¬
lars ; but we shall insist that the consummation of the gold
standard scheme as it is now boldly advocated by its promoters
would not only be a travesty upon justice, but would invoke
increased intensity in the struggle to maintain prices which
has already resulted in the loss of life, and which must, event-
iially, result in conflicts beside which the Pittsburg and
Chicago riots, to say nothing of the deadly work of Martin's
deputies at Wilkesbarre, would pale into insignificance.
We expect, nay, we demand tbat " Portia" shall rendir
the judgment of " a Daniel," giving to the creditor the ut¬
most farthing of his bond, not only in the letter but in the
spirit of the law. But since in the case before us there is no
forfeiture, we shall expect a decision that will say to the mis
taken advocates of gold monometalism, " No, gentlemen,
sña// not bind the protecting hand of government, nor endanger
the peace of the nation by the consummation of j'our sense¬
less scheme. You shall have your ' pound of flesh,' but ' not
one drop of christian blood ' shall flow to gratify the avarice
of one, or condone the ignorance of another of those who would
pursue this suit."
44
THE EFFECT OF FALEING PRICES.
The merchant then, as we are now, was willing to pay
"three times the value of the bond," and it häd been well
for Shylock to have taken the ducats, and it will be wiser for
those who hold our bonds to-day to be content with the dollar
named in the contract than to invite a discussion of the meth¬
ods by which a bond, purchased with paper money worth only
half as much as gold, when gold was worth only half as much
as now, has come to be payable in money worth four times as
much as the original cost in products. "
When we shall b ing " a 3'oung and learned doctor to our
courts," it may go hard with Shylock.
The Owners of Fixed Debts in Gold-
When we consider that the Rothchilds alone own one-
third and that less than fifty men own two-thirds of the free
gold in the world, it is easy to see how this fieecing of the
world may be done, and to locate the prime movers in the gold
standard agitation. The further thought that ihe world's pro
duction of 'gold above, tha demanded in the arts is not more than
sufficient to pay the anriual interest upon the debts owned by these
people, should reveal the gravity of the situation to every
patriot.
The Agents of these gold Owners
in every civilized country and a horde of hangers on, who
thrive by assisting these men to despoil and enslave the race,
are also interested in the success of their pLns, and also
certain
Officials who are hired
to serve their purposes in legislating and interpreting the law
in their interest.
After these the debt-owning and money-lending classes
generally see in the appreciation of money an added power
over their fellows, and unless restrained by humanitarian or
patriotic motives ally themselves to the gold standard forces.
THE EFFECT OF FALLING PRICES.
45
European Cereal Consumers
also find in the appreciation .of gold a decided advantage.
The fall in the price of commodities is a loss to them on their
exports, but since they import more than they,export the net
¡result is a general gain.
Europe vs. United States.
The balance of trade in merchandise is uniformly in favor
of this codntry ; that is, we have since 1880 exported an an¬
nual average of $100,000,000 worth of merchandise more than
we have imported, and it is clear that if the general range of
prices were twice as high as at present {about what they should
be as to farm products) the money value of this balance would
be $200,000,000 instead of $100,000,000. If we add to this
•the annual net export of silver which during the last four
5'ears has been worth over $30,000,000, and at normal value
would have been worth $60,000,000, we see that the sum of
45260,000,000 would have stood to our credit yearly, almost if
not quite enough to pay our. interest charges and leave a com¬
fortable balance.
Our Loss their Gain.
The loss to the country at large on its export trade by
•virtue of appreciated money has been enormous, but since the
farmers furnish about 75 per cent, of all our exports the loss
falls most heavily upon them.
There are some notable exceptions to the general slump
in prices, some things seem to have had peculiar power to re-
!sist the downward trend.
Wages are said to have maintained their average rate,
and while we are loth to dispute official reports, we find it
hard to believe this statement. It is contrary to our observa-
,tion and is certainly not true of the men and women workers
that we personally know ; but if for the sake of argument we
admit it, we have already observed that the debt-paying power
of the laborer has not increased with his increased skill ; and
his hoarded savings, if in money, are only half what they
would have been had his wages increased in money as they
46
THE EFFECT OF FALLING PRICES.
have in products, and if inve.'^tcd in a home or other property,
are only worth half the money he Las paid for them.
Organized labor, no doubt, has also been potent to resist
the reductions in wages.
Loss to Farmers.
The farmers contributed to the exports of merchandise,
as follows ;
Pork, hams, lard, etc., in 1873, , . $$4,000,000
Pork, hams, lard, etc., in 1895, . , , 90,000,000
At 1873 prices this would have amounted to 87,000,000
Net gain in one year, . . . . , $3,000,002
Cotton export in 1873, .... $202,000,000
Cotton export in 1895, .... 205.000,000
This would -have been worth at 1873 prices, 591,000 000
Net loss in one year, $386,000,000
Flour exported in 1873, .... $ 17,000,000
Flour exported in 1895, .... 52,000,1. 00
This would have been worth at 1873 prices, 103,000,000
Net loss in one year, ..... $51,000,000
Wheat export in 1873, .... $46,000,000
Wheat export in 1895, .... 44,000,000
This would have been worth at 1873 prices, 89,000,000-
Net loss in one year $45,000,000
Exports 10 principal products, 1873, $372,000,000
Exports 10 principal products, 1895, . 453,000,000
This would have been worth at 1873 prices, 932,000,000
Net loss in one year, $479,000,000
The experience in 1896 was not materially different, and
with the exception of wheat 1897 was even worse.
Wheat and Silver.
Much emphasis has been laid upon the fact that silver-
using countries are in competition with us as exporters of
THE EFFECT OP FALEING PRICES.
47
■wheat and the peculiar advantage given them by the rise in
the value of gold over silver. And we here restate our argu¬
ment with the facts upon which it was based for the purpose
of showing that the recent rise in the value of wheat is a proof
of its correctness, rather than a refutation of it, as some affect
to believe.
Prices have not Fallen in Sliver-using Countries.
The debt-paying power of their property and products is
the same or a trifle greater than in 1873. In this and other
gold-using countries they have fallen to one-half their former
range. {See Table I). Let us note the effect of this diver¬
gence by a familiar illustration,
Mexican vs. American,
Two men in 1873 bought farms exacfy alike in every par¬
ticular, one on the north and the other on the south bank of
the Rio Grande river. Each invested f 10,000, one in Mexican
and the other in United States coin, which at that time were
of equal value. Each borrowed $5,000 with which to stock
and operate his farm, giving 6 percent, mortgages as security.
Now let us suppose every condition of climate and soil as well
as of ability and industry to have been exactly the same with
these two men, and what has. been the result of their respect¬
ive endeavors ? The Mexican has found that when he invested
his money in seed and machinery to put in a crop one year,
the same amount of crop next year would return him the
money invested, and that his interest charges ($900) and taxes
could be paid with the same amount of crop each year. The
American has found that with every succeeding year a larger
amount of crop has bfeeu required to pay his interest, taxes and
other fixed charges, until in 1896 twice as much is required
from him as from his Mexican neighbor. If the crop is wheat,
the Mexican receives $1.00 per bushel and can pay his interest
charge with 900 bushels, while the American gets but 50 cents
and must part with 1800 btishels to pay his interest. (As we
write wheat is $1.06 in Chicago and it is $2.25 in Mexico).
48
THE EFEECT OF FALLING PRICES.
The Disadvantage of the American
is seen at once in competition with the Mexican. Our conten^
tion is that the Mexican or other silver-using producer of
wheat gets as much for his product as formerly, and since his
cost of production is not increased in any way he can afford to
sell his wheat .at the old price and make a fair profit.
Mexico does not produce wheat for e.xport, but India,
which is a silver using country does, and can afford to sell it
at $i.oo per bushel (in their silver coin)
The United States and Mexico are the silver-producing
countries of the world, and as long as Europe can buy enough
of silver from us for 50 cents-(gold) to make $1.00 of Indian
coin, with which she can buy a bushel of wheat, she will never
give us more than 50 cents (gold) for a bushel of wheat.
-As long as we raise a surplus of wheat the foreign buyer
will fix our price , but when there is no wheat for sale in silver
countries he cannot use silver to depress our prices but must
supply his imperative demand'in the open market and the price
of silver is not a controlling factor. This has been the con¬
dition for the last year. • .
The failure of the wheat crop in ludia has served to show
us only more clearly what the effect of cheap silver is on our
wheat prices.
England's use of American silver in India.
A glance at-Table No. II is instructive, for it shows the
movement of silver to have been as follows :
, IMPORTS AND EXPORTS OF SILVER PER YEAR, SINCE 1880.
Net exports from
United States
and Mexico.
Gross imports
into England.
Gross exports
from England.
Net imports
into India.
$49,000,000 I $47,000,000 I $46,000,000 I $41,000,000
In view of this remarkable exhibit (of heads I win and
tails you lose) the reason for English adherence to the gold
standard is apparent, but these figures show but a tithe of the
evil, for they only exhibit the means used to beat down the
gold price and debt-paying power of all our products.
The effect of falling prices.
49
Who wants Bimetalism ?
The contention for the restoration of silver to free coinage
Comes not so much from the producers of silver, although
they are to be immediately benefited by it, but from the pro¬
ducers of all forms of commodity wealth who have come to
realize that money, the debt-paying instrument, is a necessary
factor in the present methods of producing property. In the
present condition of diversified and divided labor no one person
can build a modern house or construct a fabric, and he who
would produce either must use money to hire workmen and
purcha-e his materials, so that the completed structure neces¬
sarily becomes his debtor in a certain sum of money. Under
the operation of the gold standard the property gradually but
surely loses its money value, and becomes insolvent, or unable
to pay its debt to th^ producer. This leads to a general loss
of confidence in the solvency of property and sensible men
must refrain from producing it. The supply of money from
silver and gold will be greater than from gold alone, and will
tend to decrease its value and restore the debt-paying power
of property.
This will'certainly stimulate the production of property,
and the only way in which our money can possibly become
too cheap will be in that we fail to produce property with suf¬
ficient speed, and in view of modern appliances and the hordes
of idle workers in this country, those of us who grasp tfils
thought have no fear of such a result Property has become
cheap because we have produced it faster in proportion than
we have produced money. Thousands have been compelled
to cease producing it altogether, while to ever}' newly discov¬
ered .source of gold supply thousands of would-be money pro¬
ducers rush pell mell, braving even death itself, in the struggle
to be first.
Every man to whom a comprehension of the significance
of this situation has come, wants the free coinage of silver,
because for every dollar of silver produced many dollars' worth
of property nt ay be produced, and all may work who will.
When all are employed who wish to work, wages may
rise, and the degree of general pro.sperity we have a right to
expect may dawn upon us.
50
THE EFFECT OF FAEEING PRICES.
Standard of Prosperity.
When we speak of Prosperity we mean something difier-
mit from the so-called prosperity of the present, for no finan¬
cial policy, however vicious, can entirely extinguish the
enterprise of Americans, and we shall have more or less activity
always, but as a standard of value is necessary in estimating
value, so a Standard of Prosperity is necessary in estimating
Prosperity.
General Booth, in appealing to the English aristocracy for
the poor of London, set upas his standard for them "the
average comfort of a London cab horse " ; and while this no
doubt would be a great improvement upon the condition of
many in gold standard England, it does not suit us.
Nor does the prosperity recorded in our census of 1890
measure up to what we demand in free America, although as
we look back to it from our present misery, it seems bright in
comparison.
The census of 1890 shows as to agriculture :
No. of farms in the United States, . . 4,564,641
" acres in farms, .... 623,218,619
" "in average farm, . . . ' 137
Total value of farms and stock, . $15,982,267,689 00
Total value of farm products, sold, con¬
sumed, and on hand,. . . $2,460,107,454 09
Value of products of each farm, . . 5538 94
No. of persons depending on each farm, 5.74
Total yearly income each person, . . . $93.89
" daily " " " . . . 0.25.8
If the expenses for seed, taxes, insurance, interest, feed
of stock, repairs, depreciation, etc., be subtracted, the net
daily income per individual will be less than twenty cents.
It costs 28.5 cents per day to keep a pauper in the alms¬
houses of the country, so that this standard does not suit us.
The standard we set up is one in which any man who
wishes work may have it, and at such wages as to enable him
by industry and economy to marry the woman of his choice
and found an American home ; to raise a family of American
children, keep them out of the mills long enough to educate
THE EFFECT OF FALLING PRICES.
51
them in the American public schools, teach them an honest
occupation, and at the same time save enough money to keep
him and his wife in comfort during their declining years.
That misery, vice and crime are flowing from the impedi¬
ments to industry and hdnorable marriage among the young,
is clear to every observer. In competition with parents and
grand parents for work, compelled to face a hopeless poverty,
and restrain the strongest instincts of their nature, it is not
surprising that many go wrong, and it would be well if relig¬
ious teachers would study this question with a view of discern¬
ing one of the causes of increasing crime and decreasing:
religious interest.
We are not inspired to sacriflcial eflbrt in an endeavor tO'
conserve the value of one kind of property as against the ab¬
sorbing encroachments of another kind, but when the subtle
schemes of selfish men are thus disclosed, and the certain out¬
come of their success will be to check the forward movement
of the race, obscure the inspiring light of hope, extinguish-
the sacred fires of patriotism and circumscribe the liberties of
free born men, then swells the patriotic heart with courage.
Around the sacred shrine of liberty we draw the magic
circle of the brotherhood of man, and forbid the usurping tyrant
to set his foot within. Aye 1 and should he dare to invade its
hallowed precinct®, upon his head, though it should wear the
ermine, or a presidential crown, we'll hurl the potent wrath of
freemen, not only with the pointed shafts of speech invective,,
but if need be, with the mailed band of sovereign power 1
CHAPTER VIH.
Objections Answered.
OO-Cent Dollars—Bnildliig Associai ions, etc.—Parity as JHeasnred in
Property—ilaintainiiig Parity of Silver with Gold Money—Dis¬
crimination (Eicg^al)—The Taw—Discrimination in Defence of I.aw
—A False Pretense—The Pledge of Governonent-Why not Change
the Itatio?—There has been more Silver Coinetl since 1873 than
B. fore-We want " Honest Money "—We want " Sonnd Money "—A
Flood of Silver.
Among the objections offered to the free coinage of silver,
the statement that it will debase our currency is perhaps the
most frequent, and while many of the crude and contradictory
•statements of this objection are absurd and even amusing, the
• fear that is honestly entertained by many and which finds ex¬
pression in this
" SO-cent Dollar "
objection is entitled to consideration. To those who believe
that the higher priced dollar, or one that will buy the largest
amount of property is the best, for us all, and the only
honest" dollar, we have offered an argument in the preced¬
ing considerations to show that their contention is not true.
If we have not convinced them we despair of doing so except
by an experimental test, and join the issue squarely on this
point. We are certain that a dollar which appreciates is not
honest for anybody, and is profitable only to a comparatively
small class of citizens.
Building Associations, etc.
To their great concern lest the savings institutions, build¬
ing associations, employers, etc , shall pay in 50-cent dollars
(as measured in property) we oppose our concern for the ex¬
perience of thousands of our citizens who are in the position
of a certain hard working mechanic who joined a building
association about twelve years ago, bought a house and bor¬
rowed Í800 from the association on it. The association has
recently run out, and during the time this man paid in, in
OBJECTIONS ANSWERED.
53
actual cash, $1176; interest on his payments would have
brought them up to or liear $1500 : he has improved the place
to a considerable extent and to-day it will not sell for |6oo.
While our " Oest dollar " loving friends are prophesying
this 50-cent dollar plague, we ask them to rise and console the
men who are actually receiving 40-cent property right here in
Chester and all over the land for the loo-cent dollars they
have earned by their labor and paid into these institutions.
Parity as Measured in Property.
We believe that under the stimulus of prospective profit
and restored confidence in the solvency of property, its pro¬
duction would increase with sufficient rapidity to prevent its
rapid or serious rise in price due to the increased money sup¬
ply from silver, and it would be many years before a just parity
between money and property would be restored, if at all, so
that the fear of a " 5Q cent dollar", as measured in property,
is unfounded.
Our prediction of prosperity is based not upon cheap dol¬
lars, but upon the fact that all may work who will, and when
all are employed the wage earner can demand, and will be
cheerfully accorded by prosperous employers, a fair share of
the product of his toil.
Maintaining Parity of Silver with QoId'Money.
There are those who apprehend the need of an adequate
supply of money and would favor free coinage of silver, but
they fear that the United States alone cannot maintain the
parity of gold and silver coins at i6-to i, or, in other words,
that gold will go to a premium and our silver dollars will be¬
come " 50-cent dollars ", or at least be less than loo-cent
■dollars as measured in gold. To these we have already sub¬
mitted facts and arguments to show that their fears are ground¬
less, but we now call attention to the fact that it has been
twice declared to be the policy of this government to maintain
the paritj* between gold and silver, once as to the metals and
once as to the coins.
54
OBJECTIONS ANSWERED.
Discrimination (Lcg^ai).
The legislation of 1873 discriminating against silver de¬
stroyed the parity between the two metals, and the legislation
of 1878 failed to restore it because it did not remove the dis¬
crimination. The only possible way in which the government
can keep this pledge, as to the two metals, is to restore free
coinage to silver.
The legislation of 1878 restored the silver dollar to its
original position on an equality with gold dollars with the sin¬
gle exception that it might be stipulated against in a private
contract, and notwithstanding the fact that thousands of con¬
tracts have been written in which silver is stipulated against,
the demand for money has been so great that this discrimina¬
tion has not destroyed the parity. Under free coinage this
discrimination could, and doubtless would destroy the parity.
We therefore propose to remove this disability and make our
silver dollar a full legal tender.
But not only has the silver dollar overcome this legal dis¬
ability, but it has been able to survive a most infamous attempt
on the part of the executive officers of the government to
destro}' the parity by illegally discriminating against it.
The Law.
The Act'of March i8th, 1869, the first law ever signed by
President Grant, declared
"Tbat the faith of the (Jolted States Is solemnly pledged to the payment in
coin or its equivalent, of all the obligations of the United States not bearing
interest, known as United states notes, and of ail the intetest-bearlng obliga-
lioas of the United States except in cases where the law anthorizing the issue
of any snch obligation has expressly provided that the same may be paid in
lawful money or other currency than goid and silver."
The refunding Act of July 14th, 1870, provided for the
issue of bonds, payable principal and interest in coin of the
then standard value, and every bond extant to-day, even the
last Cleveland issue, carries the inscription that they are
payable
"in coin of the standard vaine of the United States on July 14th, 1870 "
The Matthews Resolution, passed in 1878, declared
"That all the bonds of the United States • • • are payab'e, principal
and interest, at the option of the government, in silver dollars of the coinag«
OBJECTIONS ANSWERED.
55
®r the United States containing 412>^ grains of standard si ver, and that to re¬
store to its coinage such silver coins as a legal tender in payment of such bonds,
principal and Interest, is not in violation of the public faith nor in derogation
of the rights of the public creditor."
Secretary of the Treasury Sherman; in 1878, in his report
stated that he would redeem United States notes in gold or
silver, but expressly
" reserving the legal option of the government"
to pay in either.
The Act of July 14, 1890, (Sherman Act) declared that
the Secretary maj' redeem
"in gold or silver coin at his discretion, it being the established policy of the
United States to maintain the two metals upon a parity with each other upon
the present ratio or upon such ratio as may be established by law."
Discrimination in Defiance of Law.
And yet, in spite of all these clearly stated laws Secretary
of the Treasury Foster, under President Harrison, on October
14th, 1891, surrendered the option of the government to pay
in silver and began the senseless policy of paying gold when
gold was demanded, thus transferring the option from the
debtor to the creditor and making it possible to throw the
entire demand for money fropi the less to the more desirable
coin, which under normal conditions of money supply would
be certain to destroy the parity.
The Cleveland administration pursued the same policy
even when it required an increase of $263.000,000 in the pub¬
lic debt to do so, and the present administration follows this
precedent to its only legitimate conclusion and declares that
these silver dollars are not dollars at all, but are simply prom¬
ises to pay dollars, and Secretary Gage is now trying to induce
Congress to make provision for redeeming them in guld
We chargf» that in the , presence of the solemn pledge of
the government to maintain the parity, this persis^tent effort
to destroy the parity is little less than, treasonable, and thank.
God that the United States Senate as now constituted will
prevent its consummation,
A False Pretense.
We perfectly understand that the pretense of those who
are actively pushing this plan is that gold redemption is neces¬
sary in order to keep the faith of the government and maintain
56
OBJECTIONS ANSWERED.
tbe parity ; and to fix this idea in the public mind they have
not hesitated to falsely assert that the past and present parity
of our silver dollars was due to the fact that they were ulti¬
mately redeemable in gold.
We charge that this is false, and that certain men in high
positions in the government who have the confidence of many
citizens, are talking and acting as if it were true while know¬
ing it to be false, and are purposely trying to deceive the
people.
If 500,000,000 of silver dollars, the material in which is
worth but half that sum, have maintained their parity with
gold in spile of the persistent effort to discredit them, and
without the support of gold or other redemption, then is every
visible or invisible support of the gold fallacy removed, and
the contention of those established who assert that any dollar
of full legal tender quality will remain at par with any other
dollar of the same quality. Nor can it be shown that any
number of dollars having the cost of producing 412}^ grains
of silver behind them can ever reduce the value of a dollar
below an equitable relation to other property.
The Hedge of Government
to maintain parity can only be kept by the government stand¬
ing reàdy to receive either silver or gold as its debtors of
every class mäy choose to pay it; and to compel its creditors
and all other creditors who live under its flag to do the sàme.
No other nation on earth attempts to maintain the parity of
its money in any other way, and if this way fail, it cannot be
done at all except by the surrender of all that'was Val hable in
the purchase of our revolutionary struggle.
The Declaration of Independence,
to sustain which the choicest blood on earth was shed, and
The Constitution
of the United States, the Magna Charta of human liberty,
have each for their foundation stone the purpose to
" Establish Justice,"
and if any policy whatever shall thwart this purpose it must
he abandoned.
OBJECTIONS ANSWERED.
57
The ultimate question then is not whether we will main¬
tain parity, but whether we will surrender governmental pre¬
rogatives and our people to the mercy of Shylocks.
Why not Change the Ratio ?
Many think the ratio should be raised to a point nearer
the present commercial ratio and there are several reasons why
it should not.
ist. The stock of gold and silver in the world to-day is
about equal at i6 to i, and the present rate of production is
at a ratio of less than 14 to i. If these facts indicate any¬
thing they show that the present ratio should be lowered
instead of raised.
2d The French ratio is 15^^ to i and if an agreement
should be made between France and this country it would be
best to establish the French ratio for both, since our present
coinage could be then recoined at 15}^ to i without loss, while
the French coinage could not be changed to 16 to i without
loss.
3d. Assuming (what we do not admit) that free coinage
will not restore parity at 16 to i, we hold that no human being
can predict how much if any it will fall short of it, and that
thererore no other ratio can be intelligently selected until the
true conditions of supply and demand are established under
free coinage at its old ratio, and until this is done the question
of a change cannot be entertained.
4th. If the value of money should ultimately fall to the
present bullion value of silver only justice would be done, and
nothing but good would follow, for the purchasing power of
4I2}4 grains of silver is practically the same to-day as it was
in 1873, and the cost of production is a guarantee against a
further decline.
There has been more Silver Coined since 1873 than Before.
The point sought to be made by those who urge this ob¬
jection is, that the coinage of silver since 1873 having been
enormously greater than before, and the price continuing to
fall is proof that the cause of its fall in price is not to be
58
OBJECTIONS ANSWERED.
charged to demonetization. In support of this, the fact is cited
that in eighty-one years, from 1792 to .1873, only 8,000,000
silver dollars were coined, and in twenty years, from 1873 to
1893, nearly $500,000,000 were coined under the Bland Act.
This statement is true, but as they well know who make
it, it refers only to the United States mint, and ignores the
fact that while the United States mint was coining 8,000,000
silver dollars it also coined 136,000,000 of small coins, and the
French mint coined 1,053,000,000 in the same period, to say
, nothing of other European countries , so that any fair state¬
ment of the facts will show that in each period the demand
was about equal to the supply, and the value remained stable.
The price of silver fell as did the price of everything else, foi
the reason that the supply of gold plus $500,000,000 of silver
was not sufficient to meet the demand for money and the value
of tnotiey rose destroying the price or debt-paying power of all
property.
We want " Honest Money
Yes, and so say we all. Our contention is for an honest
dollar, but we shall insist that a dollar which has increased
and is increasing in purchasing power is not an honest dollar,
but on the contrary, is of all thieves the most detestable, for
it not only deprives his victim of his wealth but paralyzes his
efforts to earn more. We want a dollar that will be subject
to as free competition in its production as are the other forms
of material wealth it is used to measure, and which, will thus
be kept at par with them by the automatic operation of the
laws of trade and render an honest account to posterity of the
obligations we incur for them to pay.
We want "Sound Money".
Yes, and so do we. Our differences are not so much as to
what we want, as to what we have and are to have. We deny
that our currency is or can be ' ' sound ' ' when it is shown
that every dollar of it has been sold and resold until a vast
volume of credits and substitutes have become an absolute
necessity in our business. A vast balloon swayed and dis¬
torted by every passing breeze, and in constant danger of col¬
lapse. So much so that the dignity and honor of this country
objections answered.
59
cannot be asserted as against even an effete power like Spain
without danger of precipitating a panic. As we write (March
•14th, 1898) the Phila. Ledger afiBrms that the uncertainty as
to a war with Spain growing out of the ' ' Maine ' ' disaster
has destroyed the value of stocks to the extent of many mil¬
lions, as follows :
" Since the.l5th of February sixteen of the most active stocks have deciiuéd
18% @2614. Sugar has fallen 17!4 perceut., Burlington 15%, Consolidated Gas
18%, St. Paul 10, Rock Island 11, Lonisviiie 14, Manhattan 22, Metropolitan 26J4,
New York Central 10%, and Northwest 14%."
and that while nearly every one of the properties represented
are earning more than they have beeti for years on account, as
Mr. Depew says, of the recent movement of wheat to Europe.
We want " sound money " " commodity money ", with
the cost of production back of it, and in sufficient quantitiés
to place our business on at least a semblance of a cash basis,
nor will we be deterred from our purpose to secure it by the
selfish or senseless cry of those who wish to thrive by issuing
a lot of " wild cat " bank paper substitutes, instead of allowing
our working people to produce the honest, stable and reliable
inoney we need.
We propose to open the production of real money to a
wider and more adequate field of competition, and enable
the producing masses to coin their powers op brain and
'muscle into the debt-paying instrument of the nation, in¬
stead of allowing it to perish in idleness, and discharge
their obligations to the debt-owning classes, at least to
the full extent of their power and willingness to produce,
and thus to free themselves and posterity from a perpetual
slavery to a moneyed aristocracy, built upon a series of
debts that are ever increasing. in short, to enter upon a
debt-paying instead of, a debt-creating era.
The End.
l'AELE PRICESaf LEADING ARTICLES PRODUCED and MANUFACTURED in Ute UNITED STATES
as given in the STATISTICAL ABSTRACT of the UNITED STATES for mi, published in Feb. 1898.
PRODUCT.
1 1873
1883
¡ 1893
1 1896
1 1897
Cents
Cents
1
1 Cents
1
1 Cents
1
Cotton Middling, per lb
20.14
11.88
8.56
7.93
1
7.40
Standard Sheeting, per yd.i
13.31
8.32
5.90
5.45
Standard Drillings, per yd i
14.13
7.11
5.72
5.48
Bleached Shirtings, pdr yd
19.41
12.93
9.75
9.50
Standard Prints, per yd
11.37
6.00
5.25
4.66
64x64 Print Cloths, per yd s...
6.69
3.60
3.30
2.60
Wool, washed) Ohio Fleece, per lb
63.00
40.
24.
19.
29.
Wheat, No. 2, Red Winter, per bus
131.00
117.5
73.9
78.1
95.4
Corn, No. 2, mixed, per bds
63.5
65.1
49.9
34.0
31.9
Oats, No. 2, mixed, per btis....
50.
42.9
35.9
. 23.3
23.2
Lard, Prime Contract, per lb
9.2
9.82
10.34
4.67
4.42
Beef, Extra Mess, per bbl
1150.00
1284.00
817.00
751.00
771.00
Pork, Mess, per bbl
1400.00
1659.00
1835.00
895.00
885.00
Tallow, Prime, per lo
8.00
7.88
5.44
3.44
3.31
Sugar, Standard A, per lb
11.6
8.14
4.72
4.41
4.38
Goal, White Ash, Anthracite, per ton
427.00
454.00
390.00
350.00
350.00
Coal; Cumberland, Bituminous, per tön
484.00
290.00
240.00
228.00
180.00
Iron, No. 1, Foundry Pig, per ton
4275.00
2238.00
1452.00
1295.00
1210.00
Iron Ore, Gray Forge, Lake, per tön
3580.
1904.00
1177.00
1039.00
903.00
Iron Bar, Best Refined
8643.00
5030.00
3808.00
3136.00
2940.00
Iron Rails, Standard
7667.00
Steel Rails, Standard
3775.00
2812.00
2800.00
1958.00
Nails, cut, per keg
490.00
306.00
144.00
232.00
147.00
feaiierbeck's Average of 45 articles
111.
82.
68.
58.
50.
Silver Bullion, 412^ grains,«(one dollar)
100.04
85.8
60.3
52.2
46.80
A-PPENDIX.
II
Table II.—MOVEMENT of SILVER COIN and BULLION.
'Ù
Net Exports
Net Exports
Gross Importsl
Iross Exports
Net Imports
cw
u
from the
from
into
from
into India.
>
United States
Mexico.
Great Britain 1
Great Britain.
1879
738,775 -
21,835,872
52,494269
53,561,156
19,323,407
1880
1,227,980
22,388,576
33,087,441
34,360,804
38,298,391
1881
6,297,477
19,567,144
33,585,673
34,084,878
18,943,610
1882
8,743,263
17,337,024
44,980.695
43,630,382
26,177,337
1883
9,464,203
30,103,064
46,076,032
45,369,630
36,402,525
1884
11,456,481
34,008,568
46,881,403
48,598,733
31,170,935
1885
17,203,006
34,314,384
45,908,639
47,946,155
35,215,819
1886
11,660,912
30,384,496
36,360,73],
35,154,131
56,483,655
1887
9,036,313
34,097,976
37,853,295
37,994,732
34,823,511
1888
7,632,278
31,502,096
30,240,139
37,060,480
44,911,970
1889
12,034,403
39,405,560
44,700,749
51,907,607
44,998,963
1890
8,545,455
41,847,008
50,541,810
52,866,658
53,229,174
1891
1 • 2,745,365
1 20,912,328
I 63,663,246
64,993,889
67,147,619
1892
5,035,828
49,250,763
60,222,938
68,495,988
42,738,068
1893
] 7,653,813
51,769,745
72,912,463
68,219,827
60,934,726
1894
31,041,359
47,320,215
65,431,903
60,979,318
65,177,677
1895
27,631,789
56,781,075
60,428,333
52,209,705
30,381,745
1896
33,262,258
44,919,693
76,043209
74,182,191
31,179,988
1897 -
32,636,835
27,740,012
'''Impoited.
Table 111.—GOLD and SILVER COINED in FRANCE CON-
VERTED at £1 per 25 francs.
Period of Ave years. ^
Gold average
per annum. |
Silver
average per
annum.
1806-1810
1
£1,201,136
£1,884,737
1811-1815
3,299,503
5,208,029
1816-1820 -
1,951,604
993,111
1821-1825
465,748
3,526,432
1826-1830
293,976
5,032,004
1831-1835
826,149
6,576,120
1836-1840
589,857
3,048,189
1841-1845
159,326
3,033,286
1846-1850
1,294,337
4,311,276
1851-1855
12,669,263
1,431,755
1856-1860
21,605,465
666,651
1861-1865
7,667,357
175,088
1866-1870 -,
9,546,561
3,402,020
1871-1875
2,475,213
2,742,776
Total Gold
Total Silver
1803-1875
£322,993,410
£217,640,234
Keduced to United States money
11,563,288,104
11,053,378,732
III
APPENDIX.
TABEE IV—PEODUCIION, COINAGE <iiid fíELATlVE VALVE
of GOLD and SIL VE fi in. the. world .since 1792.
Year.
GOLD.
1862
1863
1864
.865
1866
1867
1868
1869
1870
1871
1872
1873
1874
1875
1876
1877
1878
1879
1880
1881
1882
1883
1884
1885
1886
1887
1888
1889
1890
1891
1892
1893
1894
1895
1896
1897
Coinage
SILVER.
I'rodiiol.
106,407,000 $
118,152,000
76,063,000
94,479,000
134,841,000
363,928,000
662,566,000
670,415,000
122,989,000
122,989,000
122,989,000
122,989,000
122,989,000
129,614,000
129,614,000
129,614,000
129,614,000
129,614,000
115,577,000
115.577,000
96,200,000
90,750,000
97,500,000
103,700,000
113,947,200
119,092,800
108,778,800
106,436,800
103,023,100
101,996,600
95,392,000
101,729,600
108,435,600
106,163,900
105,774,900
110,196,900
123,489,200
118,848,700
130,650,000
146,651,500
157,494,800
181,567,800'
199,304,100
202,956,000
240,000,000
not attainable
Product.
328,860,000)
3 71,677,0001
224.780.000
191.444.0001
i 247,930,0001
324,400,000]
164,169,0Ü0(
188,092,000
45,772,000
45,772,000
45,772,000
45,772,000
45,772,000
55,663,000
55,663,000
55,663,000
55,663,000
55,663,000
81,864,000
81,864,000
257,630,802 81,800,000
135,778,387 71,500,000
195,987,428 80,500,000
213,119,278 87,600,000
201,616,466 81,040,700
188,386,611 94,882,200
90,752,811 96,172,600
149,725,081 96,705,000
147,015,275 l02,168,400i
99,697,170 111,802,300
104,845,114 115,297,000
•99,432,795 105,461,400
95.757,582 118,445,200
94,642,070 120,626,800
124,992,465 124,281,000
134,828,855 140,706,400
168,901,519 155,427,700
149.244,965 163,032,000
119,534,122 177,325,300
172,473,124 198,014,400
232,420,517 213,944,400
227,921,032 212,829,600
231,087,438 216,292,500
195,899,517 213,463,700
• 212,000,000
prior to 1873.
Coinaije.
131,544,464
102,931,232
119,915,467
126,577,164
114,359,332
161,191,913
104,888,313
84,611,974
108,010,086
110,785,934
109,306,705
95,832,084
126,764,574
124,854,101
163,411,397
134,922,344
139,362,595
152,293,144
138,294,367
155,517,347
137,952,690
113,095,788
121,610,219
153,395,740
I Conim'l
I Ratio.
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The Economic Balance
between the VALUE or purchasing power
of Money, and the PRICE or debt paying
power of property, must be maintained or
the normal development of the race can
not proceed.
Under the present system of individ¬
ual ownership and competitive effort, if
the production of money is restricted,
WAR, with all its devastation, FLOODS
that sweep our garnered treasures in chaos
to the sea, HURRICANES that wreck on
every hand, together with the all consum¬
ing tongues of FIRE that obliterate a city
in an hour, all become the providential
friends of the idle masses, for they create
a void which their perishing energies may
be employed to fill.
With a short supply of money all can¬
not work without destroying the price of
existing wealth, and the poorly equipped
are forced into idleness. In recent years
ENFORCED IDLENESS has caused a
loss of potential wealth, equi valent to that
of the Chicago fire in every passing month,
all borne by those who can least afford it,
and all because of the insatiate greed of a
i few, and the ignorance of the many as to
the facts and principles in our system of
currency.
THE AUTHOR.