F R E E COINAGE OF S I L V E R .

SPEECH
DELIVERED BY

HON. J. W . BAILEY
AT SHERMAN,
JUNE

AND

11,

TEXAS,
1895,

PRINTED

BY

HON. GEO. C. PENDLETON,
IN

THE

CONGRESSIONAL RECORD,
F e b r u a r y 5, 1 8 9 6 ,

WASHINGTON, D. C.
1896.

SPEECH
t^-f

OF

r

HON.

J . W.

BAILEY.

The House as in Committee of the Whole, having under consideration the bill (H. R. 2904) to
maintain and protect the coin redemption fund, and to authorize the issue of certificates of
Indebtedness to meet temporary deficiencies in the r e v e n u e -

Mr. PENDLETON said :
Mr. SPEAKER: I avail myself of the privilege accorded to members, to print in
t h e RECORD the following speech, delivered by Hon. J. W . BAILEY, at Sherman,
Vex., on the 11th day of last June :
FELLOW CITIZENS OF GRAYSON COUNTY : I have come, upon your invitation,

to speak to you upon one of the most important questions that can engage your
i ittention, or the attention of your Representative in Congress. I t appeals directly
to the personal interest of every citizen, whatever may be his station or pursuit in
] ife ; it concerns alike the accumulations of the rich and the daily wages of the
jooi; it affects the relation of every debtor and creditor in the land ; it largely
^ietermines the profits of our merchants and manufacturers; and upon it in a great
3 neasure depends the prosperity of our agricultural classes, the products of whose
toil constitute three-fourths of our annual exports.
Certainly no thoughtful man can approach the discussion of a question so
Important and so far-reaching as this without a sense of grave responsibility. H e
must feel that if, consciously or unconsciously, he aids in the dissemination of
false doctrines he does his countrymen an incalculable harm, while, on the other
land, if he can help them to a better understanding of it, he will render them a
Dermanent and valuable service. Deeply impressed with this view, I have exer­
cised the best faculties of m y mind in a long and patient study of the subject, and
though, of course, I do not hope that all of you will agree with me in my conclu­
sions, I am certain that those of you who know me will concede that I have sin­
cerely desired to ascertain the truth. Whether I have succeeded or not, is for you
lip judge ; and without intending to flatter you in the least I beg to say that I con­
sider you entirely competent to form a correct judgment. I am not one of those
>vho believe that the money question is beyond the comprehension of the people.
I belong neither to that class who seem to think that anybody can understand it
without any study at all, nor to that other class who seem to think it so hopelessly
.abstruse that no ordinary man can understand it with any amount of study. The
t r u t h in this case, as in all others, lies between the two extremes. No man, how­
ever gifted he may be, can understand it without studying it, but any man of
Common sense who will study it can understand it.
Before entering upon the reasons which have induced me to favor the immediate
restoration of silver to the position which it occupied in our financial system prior
to the act of February 12, 1873, I desire briefly to remind you of the origin, t h e
Uses and the qualities of money. To some of you it may seem unnecessary to
occupy your time in restating such elementary ideas, but it is especially true of
the science of money that unless we keep constantly before our minds a clear and
definite conception of its first principles, we can never hope to comprehend it.
T H E ORIGIN OF MONEY.

"

1u

- ^ a t economists agree that money originates in the necessities of com­
mon, and tba+ without it neither could advance beyond a very
"
as much or more erlort than

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of occupation which enables labor to acquire skill and to obtain its best reward,
To make m y meaning plain by illustration, let us suppose that a tailor should nee|d
a pair of shoes; it might take him longer to find a shoemaker who needed a cosit
than it would to make the coat after he had found him. He might find
shoemakers who wanted hats, or bread or meat, but he might not find one who
desired a coat. The shoemaker himself, m his turn, might go hungry before he
could find a baker who needed his shoes. To secure themselves against such mis­
chances the tailor would be his own shoemaker and the shoemaker, his own
baker. But under such a system neither commerce nor the mechanic arts could
flourish, and agriculture would be subjected to even greater inconveniences. Sup­
pose a farmer desired to exchange one of his surplus cows for cloth. His fir&t
difficulty would be at home in finding a cow of the size to fetch exactly thje
amount of cloth he needed, and he would perhaps find it necessary to take onle
which was worth a little more or a little less. That difficulty would be a trouble­
some one, but it would not be the most troublesome one which the farmer wouljd
^encounter. When he had selected the cow which would most nearly bring him
the cloth he wanted his next and greatest difficulty would be to find somebody
who had the cloth he wanted and who wanted his cow. He would not be apt to
find a butcher who kept cloth. Indeed, there would be no such business as that
as that of a butcher in a community where all transactions were conducted by
barter and exchange, because butchers could not maintain shops where the hard­
ware merchant could only take meat of them when they were willing to take
nails of the hardware merchant or where the lumber dealer could only patronize
them when they wanted lumber, and it would be a little awkward, to say t h e
least of it, to exchange steaks for shingles every morning. What is true of t h e
farmers cow is true of his cotton and wheat, and the only way to overcome such
difficulties was to find some one thing that would be accepted in exchange for ail
things. This one thing is called " money/ and it has enabled society to sub­
divide its labors so that each man, by devoting himself to gome one employment,
can become an expert. Thus, and thus only, was it possible for mankind t o
achieve material progress.
T H E USES OF MONEY.

The uses of money flow naturally from the origin of it and therefore it is pre­
cisely as we might expect, that its first or primary use is as a medium of exchange—
as the one thing which will be accepted in return for all things. But after we
have agreed to receive money for goods we still cannot execute the agreement
until we have also agreed upon the relative values ; that is, how much money for
how many goods.
The gradation from this point to the next is easy. Nothing can be more natun d
than that this one thing w hich is given and taken, for all other things should
become the one thing according to which the value of all other things should be
estimated; and hence money becomes in its second use, what is generally bnt
loosely called a "standard of value. ' Eminent scholars have affirmed that society
could better dispense with money as a medium of exchange than as a measure of
value. They reason that, if there were no money, business could still be con­
ducted by barter ; but if there were no measure of value, each commodity woul d
have to be compared with every other commodity, and, as between any hundred
articles there are four thousand nine hundred and fifty possible ratios of exchangve,
the price list would be an endless document. Under such a condition, nobody woul d
ever attempt to deal in anything except the commonest necessaries of life.
As commerce expands and industries multiply men tnter into contracts for pay­
ments to be made at future times, and in such instance money serves a third u^e
as " a standard of deferred payments. Among a progressive and highly com­
mercial people this third function of money is perhaps more important than either
of the other two, and it grows more important with each succeeding year ; because
as a nation grows older and richer it increases the number and length of its time
contracts.
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11

QUALITIES OF MONEY.

The uses of money very clearly indicate the qualities which it ought to possess.
Being intended as something which all men will accept for their property it ouglit
to be something which, like their property, has a value—an intrinsic value, if yo u
please. And as it must perform so many different exchanges it o ' ^ ' - *
y
susceptible of division into parts suitable for sir^H tr^naactK,
able that its bulk will not P ~ '
"
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+

1

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property is to be fixed by comparison with money, it ought to be as steady as pos
sible in its value, because its variations cannot fail to introduce uncertainty and
confusion in all business. If the variations should happen to be rapid or violent
merchandising would become a mere gamble or else the storekeeper would be
compelled to mark new prices on his goods with the beginning of each new week.
Important as stability in the value of money is in reference to our daily pur­
chases and sales, it is incomparably more important when considered as a 'stand­
ard of deferred payments. Here alterations not only confuse the trader, but
they work an inevitable injustice—an injustice against which no caution and no
wisdom can provide. If the value rises, the debtor sutlers a hardship; and if it
falls, the creditor sutlers a loss. Of course, I know^, and every other thinking
man knows, that absolute fixity in its value is unattainable so long as the great
law of supply and demand continues in operation, and therefore in choosing a
substance out of which to coin money we do not strive to find something invari­
able; because we know that it cannot be found, but we choose that which varies
the least, both in frequency and extent. The earlier economists took corn as their
measure of value, but it does not require very long nor very profound thinking to
perceive their error. The annual production of corn is intended to meet the an­
nual consumption, carrying only a small surplus from year to year, and conse­
quently a short or an abundant crop must produce an immediate and great effect
on its value. If a drouth one year cuts the yield one-half, the price will double
in six months, while if favorable seasons the next year produce more than a
usual crop, another twelve months will witness another sharp movement in its
price. No perishable commodity of which the annual production is intended to
meet the annual consumption can be safely established as "a measure of value,
or as "a standard of deferred payments. If a bushel of wheat were now our unit
of value instead of the gold dollar, the man who promised on the first day of Jan­
uary to pay a thousand units on the first day of June would have found it nec­
essary to part with twice a much property to have procured the thousand units
when the debt matured as when it was contracted. To guard against an injustice
like this we must adopt as a unit of value something which is not consumed in
its use, and which will go on accumulating through the ages until the annual
supply will bear but a small proportion to the existing stock and will for this
reason but slightly affect its value. The precious metals alone answer this re­
quirement together with the requirements of intrinsic value and divisibility.
Gold and silver, each and both, possess the qualities which fit them for use as
money in such a degree as almost to persuade us that they were designed by an
Ail wise Creator for this special service of man. The question, then, presents it­
self, if both metals possess all of the attributes essential for their use as money,
why shall we not use them both as such?
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77

^ ^

OBJECT OP DEMONETIZATION.

In the beginning of this controversy between the advocates and the opponents
* of a single standard there was no attempt to conceal the fact that the only object
in demonetizing one of the metals was to increase the value of the other. The
. struggle began almost immediately after the gold discoveries in California and
i Australia, which were followed by a fall in the value of money and a rise in the
price of property. During the ten years succeeding those discoveries as com­
pared with the ten years preceding them, the price of agricultural products and
all other property rose 25 per cent. Pew men in this day would be willing pub'„.., fhcly to avow that this was a condition calling for the interposition of the lawtaiakers. But it was different then. The monometallists of that time openly
proclaimed it to be an evil and without perplexing the public mind over ratios
^ and parities they boldly declared that inasmuch as the fall in the value of money
;1 had resulted from the enormous yield of the newly discovered mines, it ought to
be counteracted by demonitizing one of the metals. But our friends on the other
side disclaim all responsibility for the argument of their predecessors and bitterly
/ \ resenting the assertion that they favor increasing the value of money, they retort
1 with the counter assertion that we are endeavoring to debase the currency.
^Uither it is true, as we charge against them, that they advocate a policy which
t.flhas constantly appreciated the value of our monetary unit or else it is true, as they
^ c h a r g e against us, that we advocate a policy which will depreciate it, because if
i.; our dollar is an honest one their dollar is too dear, while if their dollar is an hon'est one our dollar is too cheap. The core of this whole question is bound up in
; this statement, and I hope you will hear me attentively while I carefully con­
sider it.
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Perhaps we can obtain a clearer view of it, if, instead of thinking about dollars,
we will think of the bullion which composes the dollar. I t has become such a
settled mental habit to regard the dollar as fixed and unchangeable in its value
that, although we all know that it is not fixed and that it does change, yet it is '
not always easy to avoid a confusion of thought when we undertake to point out
its changes. Not only will it be conducive to clearness on our part to consider
the bullion rather than the coin value, but our opponents can hardly object to
this method of argument, because it is their principal insistence that the coin value
and thebullion value ought to be identical. I do not disagree with them on this
point; and furthermore, it will not be amiss for me to say, in this connection,
that I subscribe fully to the doctrine that the law can add nothing to the value
of any article, except by affecting the supply of it, or the demand for it. But it
is precisely this qualification, so indispensible to a correct statement of the econ­
omic principle, that our opponents always omit.
HOW LAW AFFECTS VALUE.

To exemplify the importance of this qualification let us imagine that tomorrow
the law should forbid every person to eat bread made of wheat. The price of
w heat would immediately fall, and why? Not because the law said that men
should not eat wheat-bread; but because the law having said that, the demand
for wheat would diminish and its price would fall in consequence of the dimin­
ished demand. To prove that this is not a distinction without a difference, if the
day after the use of wheat as bread had been prohibited a new use for it could be
found equal in value and extent to its b ead use, its price would remain the same,
although the law discriminating against it would still be on the statute books;
because the diminution in the demand for it for one purpose would be neutralized
by an increased demand for another purpose. There is another and unanswera­
ble proof of the soundness of this distinction in the fact that the price of corn
would necessarily rise though corn would not even be mentioned in the law
against wheat; but there would be an increased demand for it to supply the want
formerly supplied by wheat, and this increased demand would increase its price.
I t is as true of gold and silver as it is of wheat and corn that the law can affect
their value by aflecting the supply of them or the demand for them. The intelli­
gent friends of silver do not expect that free coinage will add anything to the
value of silver bullion or take anything from the value of gold bullion except in
so far as it may affect the conditions of their supply and demand.
I am sometimes asked if the law can add 50 per cent, to the value of silver why
can it not add 100 per cent, to the value of paper, as the populists claim it can.
I could answer that an increase in the demand for one article might be able to
raise its price 50 per cent, and still be utterly unable to raise the price of another
article 100 per cent. But the true and better answer is, that it is not incumbent
upon us to prove that free coinage will make the silver bullion in the present sil­
ver dollar equal in value to the gold bullion in the present gold dollar; provided
we can prove that the silver in the silver dollar is worth as much today as it was
in 1873, when the present unit of value was established, and that the gold in the
gold dollar is worth double as much now as it was then. Can we prove this?
Let us see.
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W H I C H IS T H E HONEST DOLLAR?

I n 1873 the 412J grains of standard silver in the silver dollar were worth a frac­
tion more than the 25.8 grains of standard gold in the gold dollar. I n the next
year the 25.8 grains of gold became a fraction more valuable than the 412J grains
of silver and the divergence has grown wider with the years. This far we all
agree. No man disputes their relative value in 1873, or their relative value in
1895.
Our disagreement begins when we attempt; to account for the great difference
which has occurred between these two dates. Our adversaries insist that this
difference is attributable entirely to a fall in the value of silver; and we insist that
it is due to a rise in the value of gold. This is purely an issue of fact and a dis­
passionate investigation of it ought to bring reasonable and disinterested men t<j
a somewhat similar conclusion. Comparing gold with silver and silver with gol<|
will not aid us in our inquiry. Such a comparison will simply show that a great
difference exists, but will still leave one side to ascribe it to a fall in the value of
silver, and the other side to a rise in the value of gold. This method of argument

7
could be continued until the end of time without leading us any nearer to the
truth.
MEXICAN DOLLAR ARGUMENT.

- This is the vice of the Mexican dollar argument which some gentlemen seem
to think so conclusive, and over which they exhibit such a peculiar satisfaction.
A very warm friend of mine, a few days ago, asked me how it was that twenty
years ago a Mexican silver dollar would buy as much as our silver dollar, and that
now our dollar will buy as much as two Mexican silver dollars. I told him that
it was simply because the Mexican dollar passed at the bullion value while our
silver dollar passed at the value of a gold dollar—gold being our unit of value,
and the Government receiving the silver dollar the same as the gold dollar. He
replied that he understood that, but what he wanted to know was, if the Mexi­
can dollar, which passes at its bullion value, is only worth half as much as our
dollar, did that not prove that the value of silver had fallen? I answered that
the only thing which his comparison proved was that there is a difference be­
tween our dollar and the Mexican now that did not exist twenty years ago, but
this difference might be due either to a fall in value of the Mexican dollar or a
rise in the value of ours; and to prove which it is, it was necessary to introduce
another element in the comparison. I said to him: "Suppose we state the
proposition in this way: Twenty years ago a Mexican dollar would buy as much
as our dollar, now our dollar will buy twice as much as a Mexican dollar, but the
Mexican dollar will still buy as much as it would then, and our dollar will buy
twice as m u c h , ' I asked him if he did not think that the trouble was in our
dollar rather than in the Mexican dollar? My answer satisfied him and I believe
that will satisfy all who weigh it.
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T H E TRUE TEST.

Instead of comparing gold and silver with each other, we must compare both
of them with other things, if we expect to demonstrate a rise in the value of one
or a fall in the value of the other. In this comparison we must take 1872 as the
initial point, because, our purpose being to ascertain whether the ratio between
gold and silver has been dislocated by the upward movement of gold, or the
downward movement of silver, we must base our comparison upon conditions
which existed before this dislocation began. Beginning with 1872, we must first
ascertain the relation which gold and silver bore to the various kinds of property
at that time. I have here a book published by the Treasury Department, which
gives the price of our principal agricultural products. On page 408 it gives the
New York price of cotton from 1848 to 1894, and the price for 1872 is given as
22.19 cents per pound. According to this table 25.8 grains of standard gold in
1873 would buy four and one-half pounds of cotton; and 412J grains of standard
silver, being worth three cents more than 25.8 grains of standard gold, would
have brought a fraction more than four and one-half pounds of cotton.
Now, let us compare gold and silver with cotton since 1872. I will not take a
single year to suit my purpose in the argument, but I will take the average price
for the twenty-two years from 1872 to 1894, and I will show that during all
these years 25.8 grains of gold would buy double as much as it would in 1872,
while 412J grains of uncoined silver would buy more than it would have bought
then. During these twenty-two years the average price of cotton was slightly
less than eleven and onet-half cents per pound, and therefore 25.8 grains of gold
would buy nearly nine pounds of cotton. Since 1872 the average price of 412J
grains of silver, measured in gold, has been slightly over 80 cents, and, therefore,
during this time 412J grains would buy nearly seven pounds of cotton, showing
that gold has doubled its purchasing power over cotton, and that silver has not
lost, but has actually increased its purchasing power. What is true of cotton is
also true of wheat. In 1872 the farm price of wheat was $1.24 per bushel, and
412} of silver would buy a fraction more than eight-tenths of a bushel of wheat.
The average price of wheat for the twenty-two years from 1872 to 1894 has been
eighty-five cents per bushel, and the average price of 412} grains of silver, meas­
ured gold, has been slightly over 80 cents, therefore 412} grains of silver would
purchase during all this time over nine-tenths of a bushel of wheat, or ten per cent,
more than it would in 1872.
If we go from the farm to the factory, or the store house, we shall find the
same story repeated. I can take the silver dollar, and, passing it at its bullion
value, I can buy across any dry goods counter in Sherman to-night more calico,
more linen, and more domestic than I could have bought twenty-two years ago.

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I can take one hundred silver dollars and drop them into the melting pot, and
after the stamp and superscription of the Government have been burned oft
them I can take the metal to any hardware establishment in Texas and buy more
nails, saws, hammers, axes, plows, and more of all other implements of labor
than I could have bought in 1872. Not only this; but every man, woman and
child in the audience to-night knows that 25.8 grains of gold will buy twice a&
much from the dry goods merchant, twice as much from the druggist, and
twice as much from the hardware dealer as it would twenty-two years ago.
With these undisputed and indisputable facts before us, it is no wonder that
even the most extreme advocates of the single standard have been compelled to
admit that, as compared with these great commodities the value of silver has not
fallen and the value of gold has risen. But to avoid the force of this admission, it is
alleged that silver has actually fallen and that gold has not actually risen, and that
the appearance to the contrary is due to the fact that there has been an improvement
in the method of producing manufactured goods and an enormous increase in
agricultural production. That the cheaper production of goods will culminate in
a lower scale of prices no sensible man can doubt; nor will any candid man deny
that an increase in the production of cotton and wheat will lower their price,
unless there is a corresponding in crease m the demand for them. I think it unques­
tionable that these agencies account for a per cent of the decline in prices, but
that they account for all of it, or for the greater part of it, I believe to be sus
sceptible of overwhelming disproof.
My judgment is that the fall in the price of goods resulting from improved
methods of production has not been greater than the increase in the purchasing
power of silver. I am confirmed in this belief because if new and cheaper pro­
cesses of production had caused the present prices, these prices would have fol­
lowed close upon the introduction of the new and cheaper processes of produc­
tion, but such has not been the case. The decline has been gradual and constant
and must have been produced by some cause like the constant and gradual ap­
preciation in the value of money. Moreover I know that there were great im­
provements in making goods from 1848 to 1873, and yet the scale of prioes from
1848 to 1873 was a rising one, notwithstanding the improvements in production,
owing, as everyone admits, to the increased supply of money. From 1873 to 1895
the processes of manufacturing goods have been improved, but not at a greater
rate than from 1848 to 1873, and yet the scale of prices from 1873 to 1895 has been
a falling one, because the demand for money has increased more rapidly than its
supply.
But even if I should be wrong in this supposition, and if improved methods of
production have exerted a more powerful influence over prices than I think they
have, it does not follow that I am wrong in my complaint against the increase in
the purchasing power of the dollar. The position that the merchant has no right
to complain about the lower price of his goods if they will procure him the same
quantity of other commodities, is equivalent to saying that no improvement in
the methods of production shall inure to his advantage. If you tell the farmer
that he must be satisfied so long as his produce will buy as much cloth as formerly,
and you tell the manufacturer that he must not complain so long as his cloth will
buy as much produce as ever, you deny both of them the benefits accruing from
the inventions of genius, and reserve their blessings for the money lender, half of
whose dollars will buy as much of the farmer's produce and as much of the man­
ufacturer's cloth, while it will take twice as much of the farmer's produce and
twice as much of the manufacturer's cloth to buy the same number of the money
lender's dollars. If the exchangeable value of all property falls together, no man
will be able to procure more of what he wants witn what he produces than before,
and the producers will not be benefitted. The only man who will find his pur­
chasing power increased will be the man who owns dollars.
COTTON AND WHEAT.

In his Memphis speech Mr. Carlisle attempted to account for the fall in the
price of wheat and cotton on the theory of their increased production. This is
what he said:
The production of cotton in this country in 1872-73 was 2,974,351 hales, containing an average
of 439 pounds net weight, while the production in 1893-94 was 7,549,817 hales, containing an aver­
age of 474 pounds net weight, or an increase of nearly 200 percent, in this country alone, besides
the great increase that has taken place in competing countries; and in 1894-95 the production
here was much larger, being nearly 10,000,000 bales. According to the statistics of the Agricul­
tural Department the production of wheat in this country in 1872 was 249,997,100 bushels, and in

9
1894 460,267,416 bushels, or nearly twice as much, and there has also been an enormous increase
of production in competing countries.

You will observe that he gives the cotton crop of the United States for 1872-73
as 2,974,351 bales. If he intended to give the crop of that year he understated
it mearly a million bales, but as the figures he gives are exactly the crop for
1871-72, I assume that the date was an inadvertence. But giving him the benefit
of this presumption, he is still amenable to the charge of unfairness in taking
for his comparison the crop of 1871-72, which was 1,377,966 bales less than the
crop of the preceding year, and 956,157 bales less than the crop the following year.
Mr. Carlisle knows as*well as any man how unsafe it is to generalize from partic­
ulars which are too narrow. He knows that the conditions of supply and de­
mand with reference to a single article in any single year might be such as en­
tirely to mislead us. I t is only by taking a series of years or a number of articles
that any general rule can be safely deduced. But, ignoring this plain principle,
Mr. Carlisle takes the cotton crop of 1871-72 and comparing it with the cotton
crop of 1893-94, declares that there has been an increase in the production of near­
ly 200 per cent.; whereas if he had taken the crop of 1870-71 he would have found
the increase to be less than 75 per cent., and if he had taken the crop of 1872-73
he would have found it to be less than 95 per cent. This is not the only fair crit­
icism of his speech on this score. He gives the increase in the production with­
out intimating in the remotest way that there had been any increase in the con­
sumption, and yet Mr. Carlisle must have known that the increase in our popu­
lation exceeds the increase in the production of cotton in 1894 as compared with
1870-71 and nearly equals it as compared with 1872-73. Nor is this all. Every
man who is familiar with the history of cotton culture and cotton manufacture
knows that the increase in population does not fully measure the increase in the
consumption of cotton, because it is now used in making many of the finer fabrics
for which it was once supposed to be unfit.
PRICE AND PRODUCTION OF COTTON.

Tkere is still another and a conclusive answer to Mr. Carlisle as to cotton. If,
instead of taking a single year, as he did, we take a period of years, we can com­
pletely refute his argument. I have here a table giving our production of cotton
for each year since 1838. In that year the crop was 1,363,000 bales, and it incieased each year until the average annual production for the ten years from 1838
to 1848 was in round numbers 2,000,000 bales. The average crop for ten years
from 1849 to 1859 was 3,000,000, an increase of 50 per cent. But notwithstanding
this increase of 50 per cent, in production, the price rose from an average of 9J
cents per pound for the first period to 12 cents per pound for the second. Now
let us compare the series of years immediately before and immediately after 1873
—we cannot take a period of ten years, for that would carry us back into the war
—but taking five years each way we find that the average production for the five
vears from 1867-68 to 1871-72 inclusive was 3,085,000, while the average production
for the five years from 1873-74 to 1877-78 was 4,390,000 bales, an increase of 40 per
cent. The average price for the five years from 1867-68 to 1872-73 was 28 cents per
pound, and for the five years from 1873-74 to 1877-78 it was 14 cents per pound, a
decrease of 50 per cent. And so it is, that for the decade from 1848 to 1858 we find
an increased production of 50 per cent, with an increase, price of 25 per cent.,
while, for the five years from 1873 to 1878, with an increased production of only
40 per cent., we find a decrease in price of 50 per cent. How will our friends ex­
plain that during one period there was a rise of 25 per cent, in price, notwith­
standing an increase of 50 per cent, in production, and in the other, with only 40
per cent, increase in production, there was a fall of 50 per cent, in price. There
is but one explanation. It is simply because the first period coincides with the
gold discoveries which began in 1848, and which, by increasing the supply of
money, reduced its value, while the five years from 1873 coincides with the adop­
tion of the single gold standard, which created an additional demand for gold
greater than the additional supply, and this increased its value.
PRICE AND PRODUCTION OF WHEAT.

In the extract from the Memphis speech which I have read, Mr. Carlisle says:
The production of wheat in this country in 1872 was 249,997,100 bushels, and in 1894 it was 460,267,416 bushels, or nearly twice as much.

Here, again, Mr. Carlisle takes a single year and compares it with another sin­
gle year, giving the increase in production without a single word about the in­
crease in consumption. Fair-minded men who earnestly desire to know the truth

10
might well distrust a teacher who states one element of value and suppresses the
other, which is just as important. I t appears from Mr. Carlisle's own figures,
however, that the increase in our production of wheat in 1894, as compared with
1872, was 83 per cent., and this increase in the production of wheat was met and
nearly counterbalanced by an increase of nearly 80 per cent, in our population;
and the growth of population has been much less than the increase in the con­
sumption of wheat; for it is within m y memory when many industrious families
only used flour once a week, while now they use it daily.
If we accept Mr. Carlisle's explanation that the difference in production ex­
plains the difference in the price of wheat in 1872 and 1894, how will he explain
that the wheat crop of 1890, which was only 399,262,000 bushels, was worth less
per bushel than the crop of 1882, which was 504,188,470 bushels, or why the crop
of 1893, which was 396,131,725 bushels, was worth 40 per cent, less per bushel than
the crop of 1891, which was 611,878,000 bushels. I t ; will not suffice to answer
that the production of other countries made this difference, because the world's
crop in 1882 was larger than it was in 1890 and the world's crop in 1891 was larger
than it was in 1893.
A comparison of these four years might be misleading, and so let us subject the
world's crop for a period|of years to this test of over-production. Beginning with
1882, when the crop was 2,258,982,485 bushels, and taking thf ten years up to and
including the unprecedented crop of 1891, we find that-only three out of the ten
crops exceeded the crop of 1882, and the average was in round numbers 2,180,000,000 bushels, or nearly 80,000,000 bushels less than the crop of 1882. But in the
face of this lower average production, and in spite of the fact that the world was
increasing its population and its consumption of wheat, the price steadily de­
clined. No reasonable man can believe that the difference in production has
made the difference in price, for there is practically no difference in production.
The conflict between the secretary's theory and the cold matter of fact is irrecon­
cilable, and his theory must be rejected. There being no difference in the con­
ditions of supply and demand, nothing can explain the difference in price except
the increase in the value of money.
T H E PRECIOUS METALS.

I now desire to invite your consideration to some facts which must have af­
fected the value of money. I t must be remembered that gold and silver are arti­
cles of commerce and are bought and sold like everything else; and that like
everything else, their value is determined by their supply and demand. This
being true, it could not be otherwise than that the value of gold has enormously
increased since 1873, because the demand for it since that time has increased out
of all proportion to the increase in its supply. Since then Germany, Holland and
Austria-Hungary, which had been silver standard countries, have adopted the
exclusive use of gold, and the United States, France, Italy, Belgium and several
smaller nations, whose mints had stood open to gold and silver alike, have passed
to a single gold standard.
I n order that you may form some idea how this increased demand has been
proportioned to the increased supply and how it must therefore, have affected its
value, I will call your attention to three tables which appear in this book pub­
lished by the Treasury Department. On page 95 you will find a table giving the
world's production of gold and silver from 1792 to 1892. If you will make the
addition you will find that the world's production of gold from 1879, the year we
resumed specie payments, up to and including 1892, when the table concludes,
was $1,535,000,000. On page 106 is another table exhibiting the amount of gold
and silver in the United States on the first day of each July from July, 1870 to
1893. By reference to this table you will see that in 1878 we had only 125,000,000
of gold, and even this amount included the subsidiary silver coin then in circula­
tion. Beginning the fiscal year 1879 with only 125,000,000 in gold, we increased
our stock to $664,000,000 in 1892. On page 149 of this same publication is a table
which shows that the United States consumed $192,000,000 of gold in the arts and
manufactures from 1880 to 1892. Subtracting the $25,000,000 with which we began
the fiscal year of 1879 from the $664,000,000 with which we closed the fiscal year
of 1892, we have $639,000,000 absorbed in our monetary uses; and adding to this
the sum of $192,000,000 consumed in manufactures and in the arts, we have $831,000,000 as the total increased demand of the United States for gold from 1879 to
1892, while the increased supply of the whole world was only $1,535,000,000 With
this increased demand on the part of this one country, equal to more than 55 per

11
cent, of the increased supply of all the world, and with an increasing demand
on the part of other nations to meet the needs of their expanding commerce
and population, I submit to your common sense, my countrymen,'if there is any
escape from the conclusion that the value of gold has been vastly augmented. If
there is still a doubt in your minds, that doubt must be dispelled when I show
you from this same Treasury publication that while the gold production of the
world from 1873 to 1892 has been $2,210,961,206, the gold coinage for the same
time has been $2,787,714,679, an excess in the coinage over the production of
$576,043,469. Some part of this excess represents recoinage, but after making
proper allowance for that, the world has been compelled to lay its plate and jew­
elry under contribution to meet its increasing demand for money.
SILVER SUPPLY AND DEMAND.

The defenders of a gold standard point to the greatly increased production of
silver as an evidence that its value must have declined. I would be the last man
here or elsewhere to deny that an increase in its production, unless accompanied
by an increase in the demand for it, would produce a fall in its value. If, how­
ever, the increase in demand has kept pace with increase in its supply, its value
must have remained stable, for it is not supply aione nor demand alone, but supply
and demand together which regulates value.
With this criterion in our minds w e can pursue our investigations with a rea
sonable hope of arriving at the truth. Our starting point, of course, must be 1873,
because whatever may be the change in the value of silver growing out of its pro­
duction, it must be explained by the difference between its production then and
its production now. From 1873 to 1892 the entire silver production of the world
was $2,400,000,000, and during that time silver constituted the ouly money of over
800,000,000 people, to say nothing of the amount required by gold standard coun­
tries for subsidiary coinage. If every dollar of silver produced in the world had
been employed by countries which use it exclusively as their money it would have
provided an increase of less than $3 per capita in twenty years. Fortunately we
are not left to guess about the demand for as related to its supply. The mint
reports of the various countries show that the world's silver coinage from 1873 to
1892 was $2,322,000,000, leaving only $78,000,000 for use in manufacture and in the
arts. , That this amount was grossly inadequate will appear from the report of the
Director of our Mint, which shows that from 1880 to 1892 this country alone con­
sumed in manufactures and in the arts $91,000,000 worth of silver or $23,000,000
more than the entire world's surplus. And, moreover, though we have been a
gold standard country since 1873, from 1879 to 1892 we have absorbed over $700,000,000 worth of silver, w l e the entire world's production was only about $1,800,000,000, showing an " leased demand on the part of this one gold standard
country equal to o\cr 40 per cent, of all the silver produced in the world. It is
certain that the consumption of silver since 1873 has exceeded its production, and
that to supply the coinage demand, together with the demand for manufacturers
and the arts, we have encroached upon the accumulations of former years.
There have been so many and such inexcusable misrepresentations as to the out­
put of the silver mines in the last twenty years that many intelligent men believe
that the production of silver has been three or four times as much as the produc­
tion of gold, and that it will admit of indefinite extension ; and yet, the Treasury
statistics show that while the production of silver since 1873 has been $2,400,760,533, the production of gold for the same time has been $2,210,961,206, or a differ­
ence of less than $191,000,000 in twenty years. A successful business man said to
me a few days ago that the increased production of the silver mines of the United
8tates alone since 1873 was enough to overstock the world, and he was astounded
when I presented him with a Treasury report showing that our increase silver pro­
duction has been but slightly greater than our increase in population. The world's
highest production of silver in any one year from 1792 to 1892 was $196,000,000,
which was less than 2J per cent, of the stock on hand. I t is incredible that an
increase of 2J per cent, in any one year could seriously impair the value of a great
mass of any article. An increase of 2J per cent, in the annual production of corn
or cotton or any perishable commodity would not seriously affect its price.
But, fellow citizens, I must not detain you longer on this branch of the
question. Nine-tenths of the men on the other side are estopped from deny­
ing that monometallism has depreciated the price of property and appreciated
the value of money, because they profess themselves intensely desirous of re­
storing bimetallism through an international agreement, and they cannot be
so anxious to restore the double standard unless the single standard is an
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12
evil. But when driven to acknowledge the insufficiency and injustice of mono­
metallism they resist the restoration of bimetallism upon reasons which will be
interesting for us to examine. The three principal objections which they offer
are:
First, that silver is cheap money; second, that the free coinage of silver will
derange our foreign commerce because our dollar will not be worth 100 cents in all
the markets of the world; and third, that free coinage does not mean bimet­
allism, but simply means a substitution of silver monometallism for gold mono­
metallism. I have already disposed of the first objection in considering another
aspect of the question, and I trust that I have made it plain, that instead of the ob­
jection being against the cheapness of silver it is properly against the dearness of
gold.
INTERNATIONAL COMMERCE.

The objection that free coinage will derange our foreign commerce because our
dollar will not be worth 100 cents in the markets of the world, is based upon a
misconception of the nature of international trade and of the function which the
precious metals perform in such trade. Two years ago when I declared in a
public speech that money is not used in the settlement of international balances
but that they are settled with bullion, and even if coin is used at all, it is used as
bullion and at its bullion value, I was viciously assailed. I did not reply. Know­
ing perfectly well that I was right, I was content to abide my vindication, but I
hardly expected my critics to be rebuked by having my statement repeated by
the Secretary of the Treasury in so short a time; and yet, this is exactly what has
come to pass. I n his Memphis speech Mr. Carlisle lays down the doctrine in
these words:
There is no legal tender in international trade. Whether payments are made in gold or sil­
ver coins, or in gold or silver bullion, actual intrinsic value determines the amount or quan­
tity to be delivered, no matter what m a y be the legal tender laws of the different countries,
and no matter though they may have the same or different ratios of value between the metals
within their respective limits.

It is true that he made this statement for the purpose of enforcing his opinion
that the coin value and the bullion value of the metals ought to be the same—a
proposition from which I do not dissent—but whatever may have been his pur­
pose in stating the fact, that does not alter or qualify the fact itself, and hereafter
when gentlemen talk about wanting a dollar worth 100 cents in all the markets of
the world they must be reminded that Mr. Carlisle himself has said that there is
no such thing as a dollar in the markets of the world, and that when you take a
dollar into the markets of the world it ceases to be a dollar and becomes a mere
commodity, to be sold according to its weight and fineness With this fact
admitted, the catch phrase of a dollar worth 100 cents in all the markets of the
world, becomes utterly meaningless and cannot be imposed upon intelligent men
much longer. It is difficult to see how any sensible man can deceive himself or
be deceived about this matter. The least reflection upon it must convince him
that nothing but our domestic trade can be effected by the legal value of a dollar,
because in our trade with other countries we do not use dollars. We give and re­
ceive goods in exchange for goods and the balance of trade, whatever it may be
and w hoever must pay it, is as Mr. Carlisle himself affirms, paid in the metals at
their bullion value. So far from hindering our commerce with foreign nations,
nothing could be better calculated to promote it than a return to the coinage sys­
tem under which we could trade with all nations without those disturbances in
the par of exchange which embarrass trade between countries using different
metals. If we could resume the use of both metals, we could say to the gold-using
countries that we would trade with them, buying what we wanted of them and
selling what they wanted of us, the balance to be paid or received in gold. We
could also say to the silver-using nations that we would buy their goods and sell
them ours, receiving or making payment of the balance in silver. Under a sys­
tem line that, this Republic could carry her commerce into all the regions of the
earth and drive the merchantmen of Great Britain from the high seas of the world.
r

SILVER MONOMETALLISM.

The third objection that free coinage will simply substitute silver monometal­
lism for gold monometallism is as untenable as the first and second objections.
I n the first place, to give it even a semblance of correctness they are com­
pelled to reject the long established definition of bimetallism and to set up a
new one which has no sanction in reason or authority. Bimetallism, as
every student of the question knows, means no more than that the mints

13
of the country shall be open to the free and unlimited coinage of both metals into
standard money of legal tender quality; and it does not require the concurrent
circulation of both metals. The scientific truth which underlies and supports the
theory of bimetallism is that by allowing the people a choice between the two
metals, whenever one unduly increases its value they will abate their demand
for it, which will tend to counteract the increase in its value, and will increase
their demand for the other, which will tend to increase its value, thus preserving
their equilibrium.
The fear that if we resume the free coinage of silver our gold will all immedi­
ately leave the country is groundless. This same prediction was made with equal
confidence before the Bland law was passed in 1878. I t was freely asserted that
if we entered upon even the limited coinage of silver it would only be a few
months until our only metallic money would be a debased and mutilated silver
coin. I remember well that a great man whose fame is a part of the history of
my native state, was so certain of this result, that he refused to obey the instruc­
tion of the Mississippi legislature, and in a speech replete with evil prophecies,
not one of which was ever fulfilled, he worked out the problem just as his suc­
cessors do today. After estimating the gold in the country at between $150,000,000 and $200,000,000, he argued then, as Secretary Carlisle argues now, that the
coinage of silver was tedious and slow; that it would require many years to coin
as much silver as the gold we had, and that as the beginning of silver coinage
would immediately expel all of the gold there would be a great contraction of the
currency. Despite these predictions of disaster, the Bland bill became a law,
being passed by Democratic votes over the veto of a Republican President, and
instead of losing our gold the stock of it continued to accumulate until within ten
years after its enactment we had over $700,000,000. These gentlemen seem to
think that if we did not use silver we would have no trouble in keeping all the
gold which we produce. They forget that during the eleven vears from 1848 to
1859 we produced $595,000,000 worth of gold, and yet in 1859 we had only $250,000,000 in the country, which shows that during a time when the silver question was
not an issue we were able to keep only 45 per cent, of our gold. The only effect
which the legal ratio has on the exportation of the metals, where both are used
and one is undervalued, is that whenever it is necessary to send either abroad to
settle balances or make purchases the undervalued one, being worth more rela­
tively as bullion than as coin, will be sent, because in foreign markets it is treated
as bullion and not as coin. But aside from making purchases and paying balances
neither metal will ever be exported unless it becomes more valuable in other coun­
tries than in this; and whenever an ounce of gold is worth more elsewhere than
it is here and the difference in its value above the cost of transportation, will net
a fair profit to the exporter it will be exported, whether we use one metal or both.
Nothing obeys the law of attraction so certainly and so quickly as the precious
metals. They always go, and go speedily, to the markets where they sell for the
highest price; and it is the special virtue of bimetallism that when one of them is
in such demand as to greatly enhance its value it can be relinquished and the
other used. The delusion that gold must be kept at any price is a relic of what is
known in the history of political economy as the "mercantile theory," which
dominated the business and economic thought of Europe until exploded by Adam
Smith more than a century ago.
THE RATIO.

The gold expulsion argument proceeds upon the assumption that the ratio of 16
to 1 is not correct and that though it is incorrect, the friends of silver will not cor­
rect it. This is purely gratuitous and unwarranted. The intelligent advocates
of bimetallism insist as sincerely and as stremuously as anybody, that all dollars
in this country shall be of equal value, and we have over and again pledged our­
selves that if we can restore silver to its equal privilege with gold, both at the
mint and before the law, we will make the silver bullion in the silver dollar worth
the gold bullion in the gold dollar. What we protest against is the folly and in­
justice of judging the relative value of the tw o metals while one of them is money
and the other a commodity. We know that it is impossible to institute a true
comparison under such circumstances. If you desired to compare the height of
two men, you would not stand one on the roof of this opera house and the other on
the sidewalk, but you would take the man on the sidewalk up to the roof of the
opera house or you would bring the man on the roof of the opera house down to
the sidewalk, before you would undertake to tell exactly what was the difference
n their heigh t. If you were intelligent, after you had stood them side by side,
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the first thing you would do would be to look at their feet and see if they were on
a level, because you would perfectly understand t h a t the difference in their heads
might be produced by the difference of the levels on which they sto^d. But when
you had put the feet of both on the same level, you would know that the differ­
ence in their heads measured the difference in their height. That is precisely
our position on this question. Before we compare these two metals, we desire to
put them on the same plane, and this can only be done by resuming the free coin­
age of silver. Of course we cannot resume without a ratio, and as we must begin
somewhere, I prefer to begin where we left off. After we have done this, and
have ascertained what the difference is, it then becomes our duty to consider the
cause of that difference. If it has been caused by a fall in the value of silver, we
must put more silver in the silver dollar in order to preserve the stability of the
unit; if it has been caused by a rise in the value of gold, we must take some gold
out of the gold dollar in order to preserve the stability of the unit. This suggestion
is neither novel nor dangerous. We have a precedent for it, and a precedent, too,
established by the second founder of Democracy. Daring President Jackson's
administration the parity of our gold and silver corns was displaced, but the
statesmen of that generation did not pr opose to demonetize either metal on that
account. They simply recognized the necessity of readjusting the ratio, and care­
fully weighed the matter to see whether the displacement had been caused by the
depreciation of silver or the appreciation of gold. Their conclusion was that the
trouble lay in the appreciation of gold and they corrected it by taking some of the
gold out of the gold dollar, thus equalizing the value of the two coins and preserv­
ing the stability of the monetary unit. Why cannot we do the same thing?
There is nothing sacred either about the ratio between the two metals or about the
quantity of metal in either coin. The sacred thing, against which no Congress
ought to legislate, is the value of the coin.
T H E DOLLAR AND T H E YARD-STICK.

I often hear men say that the dollar ought to be as fixed and unchangeable as
the yard-stick, and though I thoroughly agree with'what they say, I doubt if I
agree with w hat they mean. The analogy between the yard-stick as a measure of
length and t h e dollar as a measure of value is imperfect, for the reason that the
-yard-stick is simply and only a measure of length, while the dollar is not only a
measure of value, but it is also a medium of exchange and a solvent Of debts, and
it is for these latter uses that it is sought. Nobody ever buys or sells a dollar to be
used as a measure of value. I n fact, though the law now decrees the gold dollar
to be the unit of value, the coinage of it is expressly forbidden, and all which have
been c oined have been called in to be recoined into pieces of other denominations.
If dollars were not needed to pay debts and perform exchanges there would be
nO demand for them, and their value would be inconsiderable. But they are
needed for these purposes, and in this fact lies the impossibility of making the
value of the dollar as invariable as the length of the yard-stick. You will instant­
ly perc eive the difference. The demand for yard-sticks can have no possible effect
upon their length. If there was but one in America tonight and every merchant
in the land was bidding for it, the price might be $1,000, but its measure would
still be the same; or if there were 100,000,000,000 yard-sticks in the country with ,
every merchant supplied and no man wanting to buy one, the price of the yard­
stick might be less than a hundredth of one cent, but every yard-stick of the 100,000,00 0,000 w ould measure exactly 36 inches. The dollar is altogether different in.
this re spect. If there was only one dollar in this country it would be difficult to
compute its value, and it is certain that if there were 100,000,000,000 here every
one of them would, be worth less than five per cent, of what they are today.
N o t h i n g can be surer than that the length of the yard-stick is not in the least
affected by the number of them in existence, and it is equally certain that the
value of each dollar is largely governed by the number of them in circulation.
If the yard-stick were made of a material that would extend and contract
its length as the demand for it increased or decreased, then we would have a
yard-stick analogous to the dollar. Suppose we had such a one, and suppose
the demand for it had been steadily increasing for twenty years, and that with
the increasing demand of each year it had been growing longer until it was
now 72 inches long instead of 36. Would any man venture to say that it would
be an honest measure of length? And yet it would be just as honest as a dol­
lar which has doubled its value. Perhaps the apologists of the lengthened
yard-stick would contend, as do the apologists of the more valuable dollar,
that the yard-stick had not grown longer, but that everything else had grown.
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15
n

^^&^rv^ ^v£fiough. we could show that it had formerly been the length of an
o^Jinary mail's arm, and that it was now twice that long, they would insist that
t i e yard-stick was all right, but that in consequence of the over-production of men
||eiriarms had grown shorter. ,
T H E BEST MONEY.

Qur; opponents tell us that they favor the gold standard because gold is the best
money.in the world. If they mean by this that gold is the dearest money in the
world, I grant it; and I will also grant that if the dearest money is the best, then
gold Is not only the best money now, but it is getting better all the time because
it i | constantly growing dearer. But, my countrymeii, we do not think that the
dearest money is necessarily the best money. We believe that the best money is
the money which is the most unchangeable in its value. We do not differ with
the advocates of the gold standard in our desire for the best money, but we differ
with them as to what constitutes the best money. They consider that the best
which possesses the highest value, while we consider fhat the best which possesses
•the: greatest stability of value.
• I am as much in favor of an honest dollar as any living man, but I am as much
opposed to one which is too dear as I am to one which is too cheap.. I want a
stable dollar, and a stable dollar neither goes up nor down. I am so much in
favor of stability in the value of the dollar that I would not hesitate to change
the metal in it in order to preserve its value. If a man who knows nothing
about the money question will listen to the superficial declaration about the dis­
honesty of changing the bullion in the coin he will conclude that the most import­
ant quality of our dollar is not its value, but its quantity. The absurdity of this
contention is palpable. We all affirm that the most desirable quality in a dollar
is. invariability. W h a t do we mean by invariability ? Do we mean invariability in
,the amount of the metal which it contains, or do we mean invariability in its value?
The question answers itself. The unit being one of value and not of quantity the
invariability wmich it ought to possess is the invariability of value and the metal in
it ought to be changed whenever a change is necessary to preserve its value.
Under the operation of a single gold standard our money has lacked the essential
quality for twenty years, and the lack will probably be intensified in the years to
come. Indeed, it must be, because after the demand for gold to be used in the
manufactures and the arts has been supplied the annual addition to the money
of all the world is less than $80,000,000, and this sum is scarcely sufficient to repair
the waste of existing stock. With a volume of trade enlarging faster than the
volume of money the value of the dollar must continue to increase. But what is
the harm, I have heard it asked, if the dollar does increase its value? If it takes
twice as much property to buy it, will it not buy twice as much when you get it?
This statement of the question is not broad enough. It presupposes only the buy­
ers and sellers of property and does not embrace the buyers and sellers of money.
A large majority of our people use borrowed capital, and from time to time are
compelled to buy money with which to discharge their obligations, and it is upon
them that the misery and injustice are inflicted.
DEBTS ABSORBS P R O P E R T Y .

To-day we pwn $70,000,000,000 worth of property and we owe $35,000,000,000—
the dollars which we owe being equal to one-half of the property which we own.
If the value of these dollars increases during the next twenty years as it has dur­
ing the past twenty years in 1915 the value of the dollars which we now owe will
equal three-fourths of the property which we now own; and if in another twenty
years a similar increase in the value of the dollar occurs in 1935 the value of the
dollars which we now owe will be equal to all of the property which we now own.
Thus the owners of our present indebtedness can sit idly down, and, living upon
their current interest, they will see the silent and pitiless accretion in the value
of their dollars absorb the property on which they hold their mortgages. No
business can survive this ceaseless grind. I n the end the active users of capital
will be crushed and all enterprise will be discouraged; the profits of merchandis­
ing will be absorbed by the growing burden of debt and merchants will be forced
Into bankruptcy; the progressive men who have borrowed money and built cities
will find their property eaten up by an unearned increment and their families im­
poverished ; mills will pass out of the hands of their owners into the hands of their
mortgagees, and we shall have a state of society into which no workingman pros­
pers" and, no prosperous man works. I t is this unspeakable calamity which I
entreat my, countrymen to avert.