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Title: Money: Speech of Hon. John P. Jones, of Nevada, On the Free Coinage of Silver; in the United States Senate, May 12 and 13, 1890
Author: Jones, John P. (John Percival), 1829-1912
Language: English
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Copyright Status: Not copyrighted in the United States. If you live elsewhere check the laws of your country before downloading this ebook. See comments about copyright issues at end of book.

*** Start of this Doctrine Publishing Corporation Digital Book "Money: Speech of Hon. John P. Jones, of Nevada, On the Free Coinage of Silver; in the United States Senate, May 12 and 13, 1890" ***

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    "Gold is a wonderful clearer of the understanding; it dissipates
    every doubt and scruple in an instant, accommodates itself to the
    meanest capacities, silences the loud and clamorous and brings
    over the most obstinate and inflexible. Philip of Macedon refuted
    by it all the wisdom of Athens, confounded their statesmen, struck
    their orators dumb, and at length argued them out of their

  MAY 12 AND 13, 1890.



  On the bill (S. 2350) authorizing the issue of Treasury notes on
  deposits of silver bullion.

Mr. JONES, of Nevada, said:

Mr. PRESIDENT: The question now about to be discussed by this body is in
my judgment the most important that has attracted the attention of
Congress or the country since the formation of the Constitution. It
affects every interest, great and small, from the slightest concern of
the individual to the largest and most comprehensive interest of the

The measure under consideration was reported by me from the Committee on
Finance. It is hardly necessary for me to say, however, that it does not
fully reflect my individual views regarding the relation which silver
should bear to the monetary circulation of the country or of the world.
I am, at all times and in all places, a firm and unwavering advocate of
the free and unlimited coinage of silver, not merely for the reason that
silver is as ancient and honorable a money metal as gold, and equally
well adapted for the money use, but for the further reason that, looking
at the annual yield from the mines, the entire supply that can come to
the mints will at no time be more than is needed to maintain at a steady
level the prices of commodities among a constantly increasing

In view, however, of the great divergency of views prevailing on the
subject, the length of time which it was believed might be consumed in
the endeavor to secure that full and rightful measure of legislation to
which the people are entitled, and the possibility that this session of
Congress might terminate without affording the country some measure of
substantial relief, I was willing, rather than have the country longer
subjected to the baleful and benumbing influences set in motion by the
demonetization act of 1873, to join with other members of the Finance
Committee in reporting the bill now under consideration.

Under the circumstances I wish at the outset of the discussion to say
that I hold myself free to vote for any amendment that may be offered
that may tend to make the bill a more perfect measure of relief, and
that may be more in consonance with my individual views.


The condition of this country to-day, Mr. President, is well calculated
to awaken the interest and arouse the attention of thinking men. It can
be safely asserted that no period of the world's history can exhibit a
people at once so numerous and homogeneous, living under one form of
government, speaking a common language, enjoying the same degree of
personal and political liberty, and sharing, in so equal a degree, the
same civilization as the population of the United States. Eminently
practical and ingenious, of indomitable will, untiring energy, and
unfailing hope; favored by nature with a domain of imperial expanse,
with soil and climate of unequaled variety and beneficence, with every
natural condition that can conduce to individual prosperity and national
glory, it might well be expected that among such a people industry,
agriculture, commerce, art, and science would reach an extent and
perfection of development surpassing anything ever known in the history
of mankind.

In some respects this expectation would appear to have been well
founded. For several years past our farmers have produced an annual
average of 400,000,000 bushels of wheat. Our oat crop for 1888 was
700,000,000 bushels, our corn crop 2,000,000,000 bushels, our cotton
crop 7,000,000 bales. In that year our coal mines yielded 170,000,000
tons of coal, our furnaces produced 6,500,000 tons of pig iron and
3,000,000 tons of steel. Our gold and silver mines add more than
$100,000,000 a year to the world's stock of the precious metals. We
print 16,000 newspapers and periodicals, have in operation 154,000 miles
of railroad and 250,000 miles of telegraph. The value of our
manufactured products at the date of the last census was $5,400,000,000.
Our farm lands at the same time were estimated at $10,000,000,000, our
cattle at $2,000,000,000, our railroads at $6,000,000,000, our houses at
$14,000,000,000. It is not too much to say that there has been an
increase of fully 50 per cent. in those values since the taking of the
census of 1880. Our national wealth to-day is reasonably estimated at
over $60,000,000,000.

Figures and facts such as these in the history of a young nation bespeak
the presence not merely of great natural opportunities, but of a people
marvelously apt and forceful. From such results should be anticipated
the highest attainable prosperity and happiness. Our population is
alert, aspiring, and buoyant, not given to needless repining or aimless
endeavor, but, with fixity of purpose, presses ever eagerly on,
utilizing every conception of the brain to supplement and multiply the
possibilities of the hand, and at every turn subordinating the subtle
forces of nature to the best and wisest purposes of man. No equal number
of persons on the globe better deserve success, or are better adapted
for its enjoyment.

But instead of finding, as we should find, happiness and contentment
broadcast throughout our great domain, there are heard from all
directions, even in this Republic, resounding cries of distress and
dissatisfaction. Every trade and occupation exhibits symptoms of
uneasiness and distrust. The farmer, the artisan, the merchant,--all
share in the general complaint that times are hard, that business is
"dull." The farmer is in debt, and is not realizing, on the products of
his labor, the wherewithal to meet either his deferred or his current
obligations; the artisan, when at work, finds himself compelled to share
his earnings with some relative or friend who is out of employment; the
merchant who buys his goods on time finds little profit in sales, and
difficulty in making his payments.


What can it be, Mr. President, that has thus brought to naught all the
careful estimates and painstaking computations, not of thousands, nor of
hundreds of thousands, but of millions, of keen, shrewd, and far-seeing
men? Our people take an intelligent interest in their business; they
look ahead; they endeavor, as far as possible, to estimate correctly
their assets and liabilities, so that on the day of reckoning they may
be found ready. Why this universal failure of all classes to compute
correctly in advance their situation on the coming pay-day? What potent
and sinister drug has been secretly introduced into the veins of
commerce that has caused the blood to flow so sluggishly--that has
narcotized the commercial and industrial world?

All have been looking for the cause, and many think they have discovered
it. With some it is "over-production," with others either a "high
tariff" or a "tariff not sufficiently high." Some think it due to trusts
and combinations, others to improved methods of production, or because
the crops are overabundant or not abundant enough. Some ascribe the
difficulty to speculation; others, to "strikes." All sorts of
insufficient and contradictory causes are assigned for the same general
and universal complaint. However inadequate in themselves, they serve to
emphasize the universal recognition of a difficulty whose cause without
close inquiry is likely to elude detection. But the evil is of such
magnitude, it is so widespread and pervasive, that, without a knowledge
of its cause, all effort at mitigation of its effects can but add to the
confusion and intensify the difficulty.

It behooves us, therefore, as we value the prosperity and happiness of
our people, to set ourselves diligently to the inquiry: What is the
cause of the unrest and discontent now universally prevailing?


In surveying the question broadly, to discover whether there is anything
that affects the situation in common from the standpoint of varying
occupations, we find one, and only one, uniform and unfailing
characteristic; the prices of all commodities and of all property,
except in money centers, have fallen, and continue falling. Such a
phenomenon as a constant and progressive fall in the general range of
prices has always exercised so baleful an influence on the prosperity of
mankind that it never fails to arrest attention.

History gives evidence of no more prolific source of human misery than a
persistent and long continued fall in the general range of prices. But,
although exercising so pernicious an influence, it is not itself a
cause, but an effect.

When a fall of prices is found operating, not on one article or class of
articles alone, but on the products of all industries; when found to be
not confined to any one climate, country, or race of people, but to
diffuse itself over the civilized world; when it is found not to be a
characteristic of any one year, but to go on progressively for a series
of years, it becomes manifest that it does not and can not arise from
local, temporary or subordinate causes, but must have its genesis and
development in some principle of universal application.


What, then, is it that produces a general decline of prices in any
country? It is produced by a shrinkage in the volume of money relatively
to population and business, which has never yet failed to cause an
increase in the value of the money unit, and a consequent decrease in
the price of the commodities for which such unit is exchanged. If the
volume of money in circulation be made to bear a direct and steady ratio
to population and business, prices will be maintained at a steady level,
and, what is of supreme importance, money will be kept of unchanging
value. With an advancing civilization, in which a large volume of
business is conducted on a basis of credit extending over long periods,
it is of the uttermost importance that money, which is the measure of
all equities, should be kept unchanging in value through time.


A reduction in the volume of money relatively to population and
business, or, (to state the proposition in another form) a volume which
remains stationary while population and business are increasing, has the
effect of increasing the value of each unit of money, by increasing its
purchasing power.

It is only within a comparatively recent period that an increasing value
in the money unit could produce such widespread disturbance of industry
as it produces to-day. In the rude periods of society commerce was by
barter; and even for thousands of years after the introduction of money,
credit, where known at all, was extremely limited. Under such
circumstances changes in the volume and in the value of money, while
operating to the disadvantage of society as a whole, could not instantly
or seriously affect any one individual. An increase of 25 per cent. in
one year in the value of the money unit--a change which now, by reason
of existing contracts or debts, would entail universal bankruptcy and
ruin--would not be seriously felt by a community in which no such
contracts or debts existed, in which payments were immediate or at short
intervals, and each individual parted with his money almost as soon as
he received it.

Such proportion of the annual increase in the value of the money unit as
could attach to any one month, week, or day would be wholly
insignificant, and as most transactions were closed on the spot, no
appreciable loss could accrue to any individual. Such loss as did accrue
was shared in and averaged among the whole community, making it the
veriest trifle upon any individual. But how is it in our day?


The inventions of the past one hundred years have established a new
order of the ages. The revolution of industry and commerce, effected by
the adaptation of steam and other forces of nature to the uses of man,
have given to civilization an impetus exceeding anything known in the
former experience of mankind. Under the operation of the new system, the
rapidity and intensity with which, within that period, civilization has
developed, is due in great part to an economic feature unknown to
ancient civilization and practically unknown even to civilized society
until the present century. That feature is the time-contract, by which
alone leading minds are enabled to project in advance enterprises of
magnitude and moment. It is only through intelligent and far-seeing
plans and projections that in a complex and minutely classified system
of industry great bodies of men can be kept in uninterrupted employment.

We have 22,000,000 workmen in this country. In order that they may be
kept uninterruptedly employed it is absolutely necessary that business
contracts and obligations be made long in advance. Accordingly, we read
almost daily of the inception of industrial undertakings requiring years
to fulfill. It is not too much to say that the suspension for one season
of the making of time-contracts would close the factories, furnaces, and
machine shops of all civilized countries.

The natural concomitant of such a system of industry is the elaborate
system of debt and credit which has grown up with it, and is
indispensable to it. Any serious enhancement in the value of the unit of
money between the time of making a contract or incurring a debt and the
date of fulfillment or maturity always works hardship and frequently
ruin to the contractor or debtor.

Three-fourths of the business enterprises of this country are conducted
on borrowed capital. Three-fourths of the homes and farms that stand in
the name of the actual occupants have been bought on time, and a very
large proportion of them are mortgaged for the payment of some part of
the purchase-money.

Under the operation of a shrinkage in the volume of money this enormous
mass of borrowers, at the maturity of their respective debts, though
nominally paying no more than the amount borrowed, with interest, are,
in reality, in the amount of the principal alone, returning a percentage
of value greater than they received--more than in equity they contracted
to pay and oftentimes more, in substance, than they profited by the
loan. To the man of business this percentage in many cases constitutes
the difference between success and failure. Thus a shrinkage in the
volume of money is the prolific source of bankruptcy and ruin. It is the
canker that, unperceived and unsuspected, is eating out the prosperity
of our people. By reason of the almost universal inattention to the
nature and functions of money this evil is permitted, unobserved, to
work widespread ruin and disaster. So subtle is it in its operations
that it eludes the vigilance of the most acute. It baffles all foresight
and calculation; it sets at naught all industry, all energy, all


The difference in the effects produced by an increasing and a
decreasing money-volume has not escaped the attention of observant

David Hume, in his Essay on Money, says:

    It is certain that since the discovery of the mines in America
    industry has increased in all the nations of Europe. * * We find
    that in every kingdom into which money begins to flow in greater
    abundance than formerly, everything takes a new face; labor and
    industry gain life; the merchant becomes more enterprising, the
    manufacturer more diligent and skillful, and even the farmer
    follows his plow with greater alacrity and attention. * * * It is
    of no manner of consequence with regard to the domestic happiness
    of a state whether money be in a greater or less quantity. The
    good policy of the magistrate consists only in keeping it, if
    possible, still increasing; because by that means he keeps alive
    a spirit of industry in the nation and increases the stock of
    labor, in which consists all real power and riches. A nation
    whose money decreases is actually at that time weaker and more
    miserable than another nation which possesses no more money, but
    is on the increasing hand.

William H. Crawford, Secretary of the Treasury, in a report to Congress,
dated 12th February, 1820, says:

    All intelligent writers on currency agree that when it is
    decreasing in amount poverty and misery must prevail.

Mr. R. M. T. Hunter, in a report to the United States Senate in 1852,

    Of all the great effects produced upon human society by the
    discovery of America, there were probably none so marked as those
    brought about by the great influx of the precious metals from the
    New World to the Old. European industry had been declining under
    the decreasing stock of the precious metals and an appreciating
    standard of values; human ingenuity grew dull under the
    paralyzing influences of declining profits, and capital absorbed
    nearly all that should have been divided between it and labor.
    But an increase of the precious metals, in such quantity as to
    check this tendency, operated as a new motive power to the
    machinery of commerce. Production was stimulated by finding the
    advantages of a change in the standard on its side. Instead of
    being repressed by having to pay more than it had stipulated for
    the use of capital, it was stimulated by paying less. Capital,
    too, was benefited, for new demands were created for it by the
    new uses which a general movement in industrial pursuits had
    developed; so that if it lost a little by a change in the
    standard, it gained much more in the greater demand for its use,
    which added to its capacity for reproduction, and to its real

    The mischief would be great, indeed, if all the world were to
    adopt but one of the precious metals as the standard of value.
    To adopt gold alone would diminish the specie currency more than
    one-half; and the reduction the other way, should silver be taken
    as the only standard, would be large enough to prove highly
    disastrous to the human race.

The Encyclopædia Britannica, 1859 (article Precious Metals, by J. R.
McCulloch), says:

    A fall in the value of the precious metals, caused by the greater
    facility of their production, or by the discovery of new sources
    of supply, depends in no degree on theories of philosophers or
    the decision of statesmen or legislators, but is the result of
    circumstances beyond human control; and although, like a fall of
    rain after a long course of dry weather, it may be prejudicial to
    certain classes, it is beneficial to an incomparably greater
    number, including all who are engaged in industrial pursuits, and
    is, speaking generally, of great public or national advantage.

Ernest Seyd, 1868 (Bullion, page 613), says:

    Upon this one point all authorities on the subject are agreed, to
    wit, that the large increase in the supply of gold has given a
    universal impetus to trade, commerce, and industry, and to
    general social development and progress.

The American Review (1876) says:

    Diminishing money and falling prices are not only oppressive upon
    debtors, of whom, in modern times, states are the greatest, but
    they cause stagnation in business, reduced production, and
    enforced idleness. Falling markets annihilate profits, and as it
    is only the expectation of gain which stimulates the investment
    of capital in operations, inadequate employment is found for
    labor, and those who are employed can only be so upon the
    condition of diminished wages. An increasing amount of money, and
    consequently augmenting prices, are attended by results precisely
    the contrary. Production is stimulated by the profits resulting
    from advancing prices; labor is consequently in demand and better
    paid, and the general activity and buoyancy insure to capital a
    wider demand and higher remuneration.


There can be no truer index of the value of money than the general range
of prices. Price is the mercury by the rise and fall of which the heat
and struggle of industrial and business life are daily measured and made
plain. Where the tendency of this indicator continues downward, there is
no more certain sign that money is increasing in value.

During a period of falling prices the fear of impending calamity hangs
like a pall over the business of the country. Notwithstanding
unremitting efforts, men feel themselves constantly on the edge of
disaster. Gloomy foreboding and timidity take the place of confidence
and courage.

A shrinking volume of money is the most insidious foe with which
civilization has to contend.

It is my firm conviction that the inexpressible miseries inflicted upon
mankind by war, pestilence, and famine have been less cruel, unpitying,
and unrelenting than the persistent and remorseless exactions which this
inexorable enemy has made upon society. As the volume of money contracts
prices decline, and with the decline of prices comes stagnation of
industry, and the relegation to idleness of thousands of willing
workmen. Capitalists become unwilling to invest their money in
enterprises that employ labor while the products of that labor are
constantly decreasing in price. During all periods of falling prices
therefore money capital is withdrawn from active industry and seeks
investment in bonds and other forms of money-futures yielding fixed
incomes. For although the rate of interest in many such cases may be
low, the capitalist is compensated for this by the enhancement in the
purchasing power of each dollar of the principal and by the necessarily
greater command it secures over the products of labor.

Avoiding the very purpose for which it was devised, money at such times
seeks seclusion and declines to circulate. Its owner finds that he can
better afford to leave it idle in a vault or bury it in the earth, than
subject it to the probability of diminution by investing it in business
on a constantly falling market. Thus, contrary to all principles of
progress and of natural justice, the man who keeps his money idle, and
deprives society of its use, is rewarded by an unearned increment, while
he who puts his money into active business, where industry and labor may
profit by it is punished by unmerited loss.

Under such conditions it is impossible for a community to reach that
degree of material progress which, under proper circumstances, it would
readily attain. At every turn distress and discouragement stare the
people in the face. In every town and village men, willing to work,
stand idle. Even their misfortune does not end with themselves, for not
only are they a tax upon their friends, lessening to some extent the
meager income of those who give them temporary assistance, but their
necessary and eager competition for the little work that offers, tends
to reduce the compensation of those to whom they are thus indebted.
Stores, workshops, and factories, unoccupied and unused, are found in
every direction. Crime increases, bankruptcies multiply, and even though
the aggregate of wealth augments, it is unjustly distributed, and
consequently barren of beneficent results.


The system of relying upon the precious metals as money has long been
known as the Automatic system. Accurately, it should be called the
_Accidental_ system. It has been called "automatic" because, so long as
money was made to depend solely upon the yield of the mines, the supply
regulated itself by what was believed to be a natural method, namely, by
the expenditure of labor in its production, and was limited only by the
rude obstacles which nature opposes to the production of the metals. The
necessity of expending this labor placed the money volume of any country
beyond the control of the kings and conquerors who, in the primitive
periods of society, exercised despotic sway over their subjects. It was
undoubtedly better for the people of those early times to risk the
accidents of production than the follies and sinister designs of rulers.

This automatic system grew out of barter. It is a survival from the
period when articles were exchanged directly, not for gold and silver as
money, but for gold and silver as commodities--on the basis of their
cost of production--as in the case of the articles for which they were

There have been the same evolutions of progress in money as in all other
things. In the rude original of society no kind of money was possible.
The first trade was by barter, after which, some one or more commodities
attainable in the vicinage, and in general use and demand were selected
as the common media through which all exchanges were filtered. The use
for that purpose of various metals by weight followed next, and, at a
succeeding stage, gold, silver, and copper by weight, and after this
their use in the form of coins, the value of which coincided with the
bullion-value, which must necessarily be the case when free coinage is

It may be not uninteresting in this connection to have a general view of
the materials which, at different epochs of the world's history, have
been used as money. I therefore present a tabular statement giving those
particulars in chronological order.

  _Table showing some of the substances which have, at various periods
  and in various countries, been used as money._

   Period. |    Country.     | Substance used as money. |  Authority.
    B. C.  |                 |                          |
      1900 |Palestine        |Cattle, and gold and      |The Scriptures.
           |                 |  sliver, by weight.      |
           |Arabia           |Gold and silver coins     |Jacob.
           |Phoenicia        |Gold, silver, and copper  |Anonymous.
           |                 | coins                    |
           |Phoenician colony|Same (some still extant)  |Carter.
           |  in Spain.      |                          |
      1200 |Phrygia          |Coins, by Queen of Pelops |Julius Pollux.
      1184 |Greece           |Brass coins               |Homer.
       862 |Argos            |Gold and silver coins, by |Dictionary of
           |                 |  Phidon.                 |  Dates.
    70-500 |Rome             |Brass, by weight          |Jacob.
       578 |Rome             |Copper coins              |Ibid.
  Uncertain|Carthage         |Leather or parchment      |Socrates, Dial.
           |                 |  money, first "paper     |  on Riches,
           |                 |  bills" known.           |  Journal des
           |                 |                          | Economistes,
           |                 |                          |  1874, p. 354.
  B. C. 491|Sicily           |Gold coins, by Gelo (some |Jacob.
           |                 |  still extant).          |
       480 |Persia           |Gold coin, by Darius (two |Ibid.
           |                 |  still extant).          |
       478 |Sicily           |Gold coin, by Hiero (some |Ibid.
           |                 |  still extant).          |
       407 |Athena.          |Debased gold coins,       |MacLeod, 476.
           |                 | foreign                  |
       400 |Sparta.          |Iron, overvalued          |Boeckh.
       360 |Macedonia        |First gold coins coined   |Jacob.
           |                 |  in Greece, by Philip.   |
       266 |Rome             |First silver coins coined |Ibid.
           |                 |  in Rome.                |
        54 |Britain          |Pieces of iron            |Ibid.
        50 |Rome             |Tin and brass coin        |Dic. of Dates.
  Uncertain|Arabia.          |Glass coins               |N. Y. Tribune.
           |                 |                          |  July 2, 1872.

  _Period following the failure of the ancient mines._

     A.D.  |Rome.            |Lead coins silvered, and  |Anonymous.
       212 |  (Caracalla.)   |  copper coins gilded.    |
      1066 |Britain          |Living money, or human    |Henry's History
           |                 |  being made a legal      |  of Great
           |                 |  tender for debts at     |  Britain, vol.
           |                 |  about £2 16_s._ 3_d._,  |  iv, p. 243.
           |                 |  per capita.             |
      1160 |Italy            |Paper invented; bills of  |Anderson.
           |                 |  exchange introduced by  |
           |                 |  the Jews.               |
      1240 |Milan, Italy     |Paper bills a legal tender|Arthur Young.
      1275 |China            |Paper bills a legal tender|Marco Polo.
           |Africa, part of  |"Machutes" (ideal money;  |Montesquieu.
           |                 |  this view doubted.)     |
      1470 |Granada, Spain   |Paper bills a legal tender|Irving.
      1574 |Holland          |Pasteboard bills,         |Dic. of Dates.
           |                 |  representative.         |
  Uncertain|Iceland          |Dried fish                |Anonymous.
  Uncertain|Newfoundland     |Codfish, dried            |Anonymous.
  Uncertain|Norway and       |Seal skins and blubber    |Anonymous.
           |  Greenland.     |                          |
  Uncertain|Hindostan and    |Cowry shells              |Jacob, 372.
           |  parts of       |                          |
           |  Africa.        |                          |
  Uncertain|North America    |Agate, carnelian, jasper, |Anonymous.
           | Indian tribes   |  lead, copper, gold,     |
           |                 |  silver, terra-cotta,    |
           |                 |  mica, pearl, lignite,   |
           |                 |  coal, bone, shells,     |
           |                 |  chalcedony, wampumpeag, |
           |                 |  etc.                    |
  Uncertain|Oriental pastoral|Cattle, grain, etc.       |Anonymous.
           | tribes          |                          |
  Uncertain|Abyssinia        |Salt                      |Anonymous.
  Uncertain|China and India  |Rice                      |Anonymous.
  Uncertain|India            |Paper bills               |Patterson,
           |                 |                          |  p. 13.
  Uncertain|China            |Pieces of silk cloth      |Ibid.
  Uncertain|Africa           |Strips of cotton cloth    |Ibid.
           |Not stated       |Wooden tallies or checks  |Ibid.

  _Period following the discovery of the American mines._

     A.D.  |                 |                          |
       1631|Massachusetts    |Corn a legal-tender at    |Macgreggor.
           |                 |  market prices           |
       1635|Massachusetts    |Musket-balls              |Anonymous.
       1690|Massachusetts    |Paper bills, colonial     |Macgreggor.
           |                 |  notes                   |
       1694|England          |Bank-notes                |McCulloch.
       1700|Sweden           |Copper and iron coins     |Voltaire's
           |                 |                          |  Charles XII.
       1702|South Carolina   |Colonial notes            |Macgreggor.
       1712|South Carolina   |Bank notes                |Ibid.
       1716|France           |Interconvertible paper    |Murray.
           |                 |  bills a legal-tender    |
       1723|Pennsylvania     |Paper bills, colonial     |Macgreggor.
           |                 |  notes                   |
       1732|Maryland         |Indian corn a legal-tender|Anonymous.
           |                 |  at 23d. per bushel      |
       1732|Maryland         |Tobacco a legal-tender at |Anonymous.
           |                 |  1d. per pound           |
       1776|Scotland         |Tenpenny nails for small  |Adam Smith.
           |                 |  change                  |
       1785|Frankland, State |Linen at 3s. 6d. per yard,|Wheeler's
           |  of (now part of|  whisky at 2s. 6d. per   |  History of
           |  North Carolina)|  gallon, and peltry as   |  North
           |                 |  legal-tender            |  Carolina, 94.
  1810-1840|All commercial   |Great era of bank-paper   |
           |  countries      |  bills                   |
       1826|Russia           |Platinum coins            |App. Encyc.
           |                 |  (discontinued in 1845)  |
       1847|Mexico, parts of |Cocoa beans; and at Castle|Anonymous.
           |                 |  of Perote, soap.        |

  _Period following the openings of California and Australia._

      1849 |California       |Gold dust by weight, also |
           |                 |  minute gold coins for   |
           |                 |  small change, coined in |
           |                 |  private mints.          |
      1855 |Australia        |Gold dust by weight       |
      185- |Communist        |Paper bills, each         |Private
           |  settlement in  |  representing "one       | information.
           |  Ohio, called   |  hour's labor."          |
           |  "Utopia."      |                          |
      1862 |United States    |Paper bills a legal tender|Act of Feb. 25.
      1863 |North Carolina   |Tenpenny nails, at 5 cents|Anonymous.
           |                 |  each, for small change. |
      1863 |Camp at Florence,|Potatoes for small change |Yorkville
           |  S. C.          |                          | Enquirer.
      1863 |United States    |Postage-stamps for small  |
           |                 |  change, temporary.      |
      1865 |Philadelphia, Pa.|Turnips for small change, |Philadelphia
           |                 |  temporary and local.    | Ledger, April.
      1865 |United States    |Nickel coins for small    |Act of March 3.
           |                 |  change, overvalued.     |

An analysis of this table will show how carefully even the most
primitive communities guarded against a too restricted money volume.

The materials chosen to serve the purpose of money in each country
during the early history of society were, it will be observed, such as
at the time and place would be of sufficient quantity or volume to
insure against any sudden deprivation of supply. In countries where the
chase was common, the skins of wild animals were used as money; in
maritime communities, shells; in pastoral countries, cattle; in the
early history of agriculture, grain; in early mining periods, base
metal; in primitive manufacturing ages, nails, glass, musket-balls,
strips of cotton, etc.

As communities developed, and commerce between them began, substances
somewhat common to all countries, portable and indestructible, such as
the precious metals, came to be more, and other substances less,
resorted to. By reason of their great beauty those metals were always in
demand, even among barbarous peoples, for purposes of ornament and
decoration. Because of their universal use for such purposes they came
to be recognized as things for which anything else could with safety be
exchanged, and as society advanced, and it came to be recognized that
some medium should be adopted in which to make all exchanges, those
metals were naturally selected for the purpose, so that, together, they
became, as it were, a common denominator of value. Their selection
proved a convenient method of storing away wealth in a form that
commanded at all times every other form of wealth. They had always
passed by weight wherever used, but as society became better organized,
and its methods more complex, it became necessary, in order to insure
against fraud, to form them into pieces convenient for handling, and to
invest them distinctly with the function of money, so that, by law, they
became a universal solvent for debts and demands, the stamp of the
government placed on the coin testifying to its weight and fineness.

Both metals, as shown by the table, have been concurrently used as money
for thousands of years--not only since the dawn of history, but from a
period anterior to any historical records. The oldest annals show that
they had already been employed as circulating media and that their
relative values, or the ratio of their exchange for one another, had
already been established. Gold and silver were used as money in
Palestine as early as the year 1900 B. C. We read in the Bible that
Abraham weighed to Ephron the Hittite 400 shekels of silver, "current
money with the merchant." An inscription on the temple of Karnak, of the
date of 1600 B. C. mentions those metals as materials in which tribute
was paid.

But long anterior even to these dates, both metals had been used, as,
among the relics of the bronze age of the prehistoric era, ornaments of
both gold and silver have been found. Gold, being the less abundant of
the two metals, has had the higher value; but the ratio between the two
has been marvelously steady, taking into account the great sweep of
ages during which they have been used as money. This will be seen by
reference to the following tables of ratios. I will first take their
relative values during ancient times.

  _Table showing the ratio of gold and silver in various countries of
  the world up to the Christian era._

    B. C. | Ratio.      | Authorities.
     1600 | 1 to 13.33  | Inscriptions at Karnak; tribute lists of
          |             |   Thutmosis. (Brandis.)
      708 | 1 to 13.33  | Cuneiform inscriptions on plates found in
          |             |   foundation of Khorsabad.
          | 1 to 13.33  | Ancient Persian coins; gold darics at
          |             |   8.3 grams = 20 silver siglos, at 5.5 grams.
      500 | 1 to 13.00  | Persia. Darius. Egyptian tribute. Herod.
          |             |   III,.95. (Boeckh, page 12.)
      490 | 1 to 12.50  | Sicily. Time of Gelon. "At least" 12.50.
          |             |   (Boeckh, page 44.)
      470 | 1 to 10.00  | Doubtful. Asia Minor. Xerxes's treasure.
          |             |   (Boeckh, page 11.)
      440 | 1 to 13.00  | Herodotus's account of Indian tributes.
          |             |   360 gold talents = 4,680 silver.
      420 | 1 to 10.00  | Asia Minor. Pay of Xenophon's troops in silver
          |             |   darics. (Anab.; Boeckh, page 34.)
      407 | 1 to ----   | Spurious and debased gold coins at Athens.
          |             |   (MacLeod, Polit. Econ., page 476; Boeckh,
          |             |   page 35.)
      400 | 1 to 13.33  | Standard in Asia, according to Xenophon.
      400 | 1 to 12.00  | Standard in Greece according to "Hipparchus";
          |             |   attributed to Plato.
      400 | 1 to 12.00} | Various authorities adduced by Boeckh.
      400 | 1 to 13.50} |
          |             |
          |      {12.00}| Values in Greece from the Peloponnesian war to
  404-336 | 1 to {13.00}|   the time of Alexander, according to hints in
          |      {13.33}|   Greek writers. There were variations under
          |             |   special contracts--unit, the silver drachma.
          |             |
      340 | 1 to 14.00  | Greece. Time of Demosthenese. (Boeckh,
          |             |   page 44.)
  338-326 | 1 to 11.50  | Special contracts in Greece.
  343-323 | 1 to 12.50  | Egypt under the Ptolemies.
      300 | 1 to 10.00  | Greece. Continued depression of gold, caused
          |             |   by great influx under Alexander.
      207 | 1 to 13.70  | Rome. (Boeckh, page 44.) Gold scriptulum
          |             |   arbitrarily fixed at 17.143 for 1.
      100 | 1 to 11.91  | Rome. General rate of gold pound to silver
          |             |   sesterces to date.
    58-49 | 1 to 8.93   | Rome. Continued depression of gold, caused
          |             |   by influx of Cæsar's spoil from Gaul.
          |             |   [N. B.--Cæsar's headquarters were at
          |             |   Aquileia, at the head of the Adriatic,
          |             |   where there was also a gold mine, which
          |             |   at this period became very prolific.]
       50 | 1 to 11.90  | Rome. "About the year U. C. 700," the rate
          |             |   was 11 19-21. (Boeckh, page 44.)
       29 | 1 to 12.00  | Rome. Normal rate in the last days of the
          |             |   republic.

By reference to the foregoing table it will be observed that the
increase in the supply of gold in Europe, consisting of the spoils of
the Orient, gathered by Alexander the Great, and brought by him to
Greece, had the effect of decreasing the value of that metal so that
instead of being exchangeable at the ratio of 1 to about 13-1/2 of
silver, as formerly, gold became depressed, 1 ounce of it exchanging for
only 10 ounces of silver. Later, when Julius Cæsar extended his
conquering arms into Gaul, and sent to Rome the accumulations of
treasure amassed by him, the value of gold by reason of the increased
supply was again depressed, so that an ounce of it was exchangeable for
only 8.93 ounces of silver. With these exceptions it may be said that
the relation of silver to gold for sixteen hundred years before the time
of Christ had varied only from the ratio of 1 to 12 to that of 1 to
13.33. Silver at no time during all this period fell below 13.50 to 1 of

Looking, now, at the relative values of gold and silver from the time of
Christ to the discovery of America, we find the ratio between the two
metals to be as follows:

Table showing the ratio of gold and silver in various countries of the
world from the opening of the Christian era to the discovery of America:

    A. D.   | Ratio.       | Authorities.
       1-37 | 1 to 10.97   | Rome. Rate under Augustus and Tiberius.
      37-41 | 1 to 12.17   | Rome. Reign of         }
            |              |   Caligula.            } The silver coinage
      54-68 | 1 to 11.80   | Rome. Reign of Nero.   } much debased,
      69-79 | 1 to 11.54   | Rome. Reign of         } consequently the
            |              |   Vespasian.           } ratio of the
      81-96 | 1 to 11.30   | Rome. Reign of         } metals pure was
            |              |   Domitian.            } about 1 to 11.
    138-161 | 1 to 11.98   | Rome. Reign of         }
            |              |   Antoninus.           }
        312 | 1 to 14.40   | Byzantium. Reign of Constantine. Arbitrary.
        438 | 1 to 14.40   | Byzantium and Rome. Theodosian code.
            |              |   Arbitrary.
        864 | 1 to 12.00   | Probable ratio, as shown by the Edictum
            |              |   Pistense, under the Carlovingian dynasty.
       1260 | 1 to 10.50   | Average ratio in the commercial cities of
            |              |   Italy. Local or doubtful.
  1344-1660 | 1 to ----    | England. Numerous mint indentures given in
            |              |   McLeod's Political Economy, page 475. The
            |              |   ratio, except when fixed arbitrarily and
            |              |   in violation of market price, varied
            |              |   between about 1.12 and 1.14 during the
            |              |   two hundred and fifty-seven years
            |              |   included in this period.
       1351 | 1 to 12.30 } |
       1375 | 1 to 12.40 } | Ratio in North Germany as shown by the
       1403 | 1 to 12.80 } |   very accurate rules of the Lubeck mint,
       1411 | 1 to 12.00 } |   corroborated in the main by the accounts
       1451 | 1 to 11.70 } |   of the Teutonic Order of Knights,
       1463 | 1 to 11.60 } |   averaged in periods of forty years.
  1453-1494 | 1 to 10.50   | Ratio according to the accounts of the
            |              |   Teutonic knights. As the ratio fixed in
            |              |   England by numerous mint indentures from
            |              |   1465 to 1509 was about 1.12 this German
            |              |   ratio is considered local or doubtful.

It will thus be observed that during the one thousand four hundred and
ninety-two years from the coming of Christ to the discovery of America,
silver never went below the ratio of 14.40 to one of gold.

The relations which the metals have borne to each other since the
discovery of the New World will appear from the following:

  _Table showing the relative values of gold and silver in the various
  countries of the world from the discovery of America to 1680._

  A. D.|    Ratio.   |            Authorities.
       |             |
  1497 | 1 to 10.70  | Spain. Reign of Isabella. Edict of Medina. Local.
  1500 | 1 to 10.50  | Germany. Adam Riese's Arithmetic. Local or
       |             |   doubtful.
  1551 | 1 to 11.17  | Germany. Imperial mint regulations. Arbitrary or
       |             |   local.
  1559 | 1 to 11.44  | German Imperial mint regulations.
  1561 | 1 to 11.70} | France. Mint regulations.
  1575 | 1 to 11.68} |
  1623 | 1 to 11.74  | Upper Germany. Mint regulations.
  1640 | 1 to 13.51  | France. Mint regulations. Transition period.
  1665 | 1 to 15.10  | France. Mint regulations.
  1667 | 1 to 14.15  | Upper Germany. Mint regulations. Doubtful.
  1669 | 1 to 15.11  | Upper Germany. Mint regulations.
  1679 | 1 to 15.00} | France. Mint regulations.
  1680 | 1 to 15.40} |
       |             |

Table showing the ratio of silver to 1 of gold from 1687 to the
demonetization of silver by Germany and the United States and the
closing of the Mints to its free coinage.

[From the Report (1890) of the Director of the U. S. Mint on the
Production of the Precious Metals in the United States.]

[NOTE.--From 1687 to 1832 the ratios are taken from Dr. A. Soetbeer;
from 1833 to 1878 from Pixley and Abell's tables; and from 1879 to 1889
from daily cable-grams from London to the Bureau of the Mint.]

   Year. | Ratio.|| Year.  | Ratio.|| Year.  | Ratio.|| Year.  | Ratio.
  1687   | 14.94 || 1721   | 15.05 || 1755   | 14.68 || 1789   | 14.75
  1688   | 14.94 || 1722   | 15.17 || 1756   | 14.94 || 1790   | 15.04
  1689   | 15.02 || 1723   | 15.20 || 1757   | 14.87 || 1791   | 15.05
  1690   | 15.02 || 1724   | 15.11 || 1758   | 14.85 || 1792   | 15.17
  1691   | 14.98 || 1725   | 15.11 || 1759   | 14.15 || 1793   | 15.00
  1692   | 14.92 || 1726   | 15.15 || 1760   | 14.14 || 1794   | 15.37
  1693   | 14.83 || 1727   | 15.24 || 1761   | 14.54 || 1795   | 15.55
  1694   | 14.87 || 1728   | 15.11 || 1762   | 15.27 || 1796   | 15.65
  1695   | 15.02 || 1729   | 14.92 || 1763   | 14.99 || 1797   | 15.41
  1696   | 15.00 || 1730   | 14.81 || 1764   | 14.70 || 1798   | 15.59
  1697   | 15.20 || 1731   | 14.94 || 1765   | 14.83 || 1799   | 15.74
  1698   | 15.07 || 1732   | 15.09 || 1766   | 14.80 || 1800   | 15.68
  1699   | 14.94 || 1733   | 15.18 || 1767   | 14.85 || 1801   | 15.46
  1700   | 14.81 || 1734   | 15.39 || 1768   | 14.80 || 1802   | 15.26
  1701   | 15.07 || 1735   | 15.41 || 1769   | 14.72 || 1803   | 15.41
  1702   | 15.52 || 1736   | 15.18 || 1770   | 14.62 || 1804   | 15.41
  1703   | 15.17 || 1737   | 15.02 || 1771   | 14.66 || 1805   | 15.79
  1704   | 15.22 || 1738   | 14.91 || 1772   | 14.52 || 1806   | 15.52
  1705   | 15.11 || 1739   | 14.91 || 1773   | 14.62 || 1807   | 15.43
  1706   | 15.27 || 1740   | 14.94 || 1774   | 14.62 || 1808   | 16.08
  1707   | 15.44 || 1741   | 14.92 || 1775   | 14.72 || 1809   | 15.96
  1708   | 15.41 || 1742   | 14.85 || 1776   | 14.55 || 1810   | 15.77
  1709   | 15.31 || 1743   | 14.85 || 1777   | 14.54 || 1811   | 15.53
  1710   | 15.22 || 1744   | 14.87 || 1778   | 14.68 || 1812   | 16.11
  1711   | 15.29 || 1745   | 14.98 || 1779   | 14.80 || 1813   | 16.25
  1712   | 15.31 || 1746   | 15.13 || 1780   | 14.72 || 1814   | 15.04
  1713   | 15.24 || 1747   | 15.26 || 1781   | 14.78 || 1815   | 15.26
  1714   | 15.13 || 1748   | 15.11 || 1782   | 14.42 || 1816   | 15.28
  1715   | 15.11 || 1749   | 14.80 || 1783   | 14.48 || 1817   | 15.11
  1716   | 15.09 || 1750   | 14.55 || 1784   | 14.70 || 1818   | 15.35
  1717   | 15.13 || 1751   | 14.39 || 1785   | 14.92 || 1819   | 15.33
  1718   | 15.11 || 1752   | 14.54 || 1786   | 14.96 || 1820   | 15.62
  1719   | 15.09 || 1753   | 14.54 || 1787   | 14.92 || 1821   | 15.95
  1720   | 15.04 || 1754   | 14.48 || 1788   | 14.65 || 1822   | 15.80
   Year. | Ratio. || Year. | Ratio. || Year. | Ratio. || Year. | Ratio.
   1823  | 15.84  || 1836  | 15.72  || 1849  | 15.78  || 1861  | 15.50
   1824  | 15.82  || 1837  | 15.83  || 1850  | 15.70  || 1862  | 15.35
   1825  | 15.70  || 1838  | 15.85  || 1851  | 15.46  || 1863  | 15.37
   1826  | 15.76  || 1839  | 15.62  || 1852  | 15.59  || 1864  | 15.37
   1827  | 15.74  || 1840  | 15.62  || 1853  | 15.33  || 1865  | 15.44
   1828  | 15.78  || 1841  | 15.70  || 1854  | 15.33  || 1866  | 15.43
   1829  | 15.78  || 1842  | 15.87  || 1855  | 15.38  || 1867  | 15.57
   1830  | 15.82  || 1843  | 15.93  || 1856  | 15.38  || 1868  | 15.59
   1831  | 15.72  || 1844  | 15.85  || 1857  | 15.27  || 1869  | 15.60
   1832  | 15.73  || 1845  | 15.92  || 1858  | 15.38  || 1870  | 15.57
   1833  | 15.93  || 1846  | 15.90  || 1859  | 15.19  || 1871  | 15.57
   1834  | 15.73  || 1847  | 15.80  || 1860  | 15.29  || 1872  | 15.63
   1835  | 15.80  || 1848  | 15.85  ||       |        ||       |

By the foregoing table it will be seen that in the three hundred and
seventy-five years from 1497 to 1872 the maximum separation of the
metals was only as 1 to 16.25--notwithstanding the widest divergencies
during that long period in the yield of the two metals from the mines.
It will be observed that all the later quotations are from the London
market, but it is a significant fact that in France, where, by the law
of 7 Germinal, _An_ XI, (1803,) free coinage was permitted to both
metals, at the ratio of 15-1/2 of silver to 1 of gold, for a period of
seventy years, and until the coinage of silver was limited, there was at
no time the slightest variance from that relation.

When silver was deprived of the full money function, and all the
money-work of society was placed on gold, the metals began to separate.
The following table shows the degree of that separation from year to

Table showing the ratio of silver to 1 of gold since the demonetization
of silver by Germany and the United States, and the closing of all mints
of the western world to its free coinage:

  1873   15.92  |  1882   18.19
  1874   16.17  |  1883   18.64
  1875   16.59  |  1884   18.57
  1876   17.88  |  1885   19.41
  1877   17.22  |  1886   20.78
  1878   17.94  |  1887   21.13
  1879   18.40  |  1888   21.99
  1880   18.05  |  1889   22.10
  1881   18.16  |

The foregoing figures show that it is only since the legislative
proscription of silver by Germany and the United States, and the closing
of all the European mints to its coinage, that any material change took
place in the ratio between the two metals, which conclusively
demonstrates that the present divergence in the relative values of the
two metals is directly due to the legal outlawry of silver and not to
natural causes.

Not only has the concurrent use of the two metals as money had the
sanction of all time, but the approval of the greatest minds of history,
and, when not blinded by self-interest, the approval of practical and
experienced financial minds. So well recognized is this fact that I need
only cite a few instances of such approval.

Alexander Hamilton said:

    To annul the use of either of the metals as money is _to abridge
    the quantity of circulating medium_, and is liable to all the
    objections which arise from a comparison of the _benefits of a
    full with the evils of a scanty circulation_. (Report to
    Congress, 1791.)

Thomas Jefferson, in a letter to Hamilton, indorsed this view, saying:

    I return you the report on the mint. I concur with you that the
    unit _must stand on both metals_. (Letter to Hamilton, February,

In his "Recherches sur l'or et sur l'argent," 1843, Léon Fanchet said:

    If all the nations of Europe adopted the system of Great Britain,
    the price of gold would be raised beyond measure, and we should
    see produced in Europe a most lamentable result. The Government
    can not decree that legal tender shall be only gold, in place of
    silver, for that would be to decree a revolution, and the most
    dangerous of all, because it would be a revolution leading to
    unknown results (_qui marcherait vers l'inconnu_).

In a memoir read before the French Institute in 1868, M. Wolowski said:

    The suppression of silver would bring on a veritable revolution.
    Gold would augment in value with a rapid and constant progress,
    which would break the faith of contracts and aggravate the
    situation of all debtors, including the nation. It would add at
    one stroke of the pen at least three milliards to the twelve
    milliards of the public debt.

In a debate in the French Senate on January 28, 1870, Senator Dumas
eloquently pleaded for caution in dealing with a subject of such
farreaching importance as the demonetization of one of the money metals.
He said:

    Those who approach these questions for the first time decide them
    at once. Those who study them with care hesitate. Those who are
    obliged practically to decide doubt and stop, overwhelmed with
    the weight of the enormous responsibility.

    The quantities of the precious metals which are now sufficient
    may become insufficient, and we should proceed with great
    prudence before we diminish that which constitutes a part of the
    riches of the human race. Sometimes gold takes the place of
    silver. Sometimes silver takes the place of gold. _This keeps up
    the general equilibrium._ Nobody can guaranty that the present
    vast production of gold will continue. The _placers_ are found on
    the surface of the earth, and may be exhausted by the very
    facility of working them. Silver presents itself in the form of
    subterranean veins. Science may contribute to accelerate its
    extraction. In presence of the unknown, which dominates the
    future, we should practice a prudent reserve.

Before a French monetary convention in 1869 testimony was given by M.
Wolowski, by Baron Rothschild, and by M. Rouland, governor of the Bank
of France.

M. Wolowski said:

    The sum total of the precious metals is reckoned at fifty
    milliards, one-half gold and one-half silver. If, by a stroke of
    the pen, they suppress one of these metals in the monetary
    service, they double the demand for the other metal, to the ruin
    of all debtors.

M. Rouland, governor of the Bank of France, said:

    We have not to do with ideal theories. The two moneys have
    actually co-existed since the origin of human society. They
    co-exist because the two together are necessary, by their
    quantity, to meet the needs of circulation. This necessity of the
    two metals, has it ceased to exist? Is it established that the
    quantity of actual and prospective gold is such that we can now
    renounce the use of silver without disaster?

Baron Rothschild said:

    The simultaneous employment of the two precious metals is
    satisfactory and gives rise to no complaint. Whether gold or
    silver dominates for the time being, it is always true that the
    two metals concur together in forming the monetary circulation of
    the world, and it is the general mass of the two metals combined
    which serves as the measure of the value of things. The
    suppression of silver would amount to a veritable destruction of
    values without any compensation.

At the session (October 30, 1873) of the Belgian Monetary Commission,
Professor Laveleye, one of the most luminous writers on economic
subjects, said:

    Debtors, and among them the state, have the right to pay in gold
    or silver, and this right can not be taken away without
    disturbing the relation of debtors and creditors, to the
    prejudice of debtors, to the extent of perhaps one-half,
    certainly of one-third. To increase all debts at a blow
    (_brusquement_) is a measure so violent, so revolutionary, that I
    can not believe that the Government will propose it or that the
    Chambers will vote it.


Some thirteen years ago, as Chairman of the Monetary Commission
appointed by Congress to investigate the causes of the changes in the
relative values of the precious metals, I submitted to this body a
report, in which I took occasion to refer to the motives which evidently
influenced the creditor classes of the western world in destroying the
automatic system of money. From that Report I quote as follows:

    The world has generally favored, theoretically if not
    practically, the automatic metallic system, and adjusted its
    business to it. Some nations adopted one metal as their standard,
    and some the other, and some adopted both. Those that adopted
    both metals served as a balance-wheel to steady with exactness
    their relative value. The practical effect of all of this was the
    same as if all nations had adopted both, because it secured the
    entire stock of both at a fixed equivalency for the transaction
    of the business of the world. While some nations have changed
    their money metal, or, having had paper money, have resumed
    specie payments in one metal, the policy of a general
    demonetization of one of the metals was first broached only about
    twenty years ago. About ten years later a formidable propaganda
    was organized to fasten that policy upon the commercial world.

    This new school of financial theorists advocate the retention of
    metal as the material of money, but favor its subjection to
    governmental interference in every respect. Whenever new mines
    are discovered, or old ones yield or promise to yield more
    abundantly, instead of freely accepting their product in
    accordance with the automatic theory, they advocate its rejection
    through the restriction or the absolute prohibition of the
    coinage of either or both metals, or through the limitation or
    the abolition of the legal-tender function of one of them.
    Whenever the interests of the creditor and income classes seem to
    be in danger of being impaired by an increase in the volume and
    decrease in the value of money, or in other words, by a general
    rise in prices, these modern theorists are clamorous in
    double-standard countries for the demonetization of one of the
    money metals, and in single-standard countries for the shifting
    of the money function from the metal which promises the most to
    the one that promises the least abundant supply. They are
    extremely anxious for the retention of the _material_ of which
    the money-standard is composed when such material is rising in
    value and prices are falling, and exceedingly apprehensive of the
    evil and inconvenience which they predict as sure to result from
    changing it.

    Whenever a fall in prices occurs, through either a natural or
    artificial contraction in the volume of money, they maintain that
    it is due to antecedent inflation and extravagance, or to
    overproduction through persistent and reckless industry; if the
    contraction be natural, that it can not be helped, and if
    artificial, that though it may inflict great temporary losses on
    the masses of the people, it will be sure to result in their
    ultimate benefit, and they console the sufferers with the
    comforting assurance that such contraction is necessary in order
    to reach the lowest depths of that "_hard pan_" whose foundations
    they have previously undermined by demonetizing one of the
    metals, and upon which alone they claim that money, capital, and
    labor can securely and harmoniously rest. But when the material
    composing the standard is falling in value and prices are rising,
    they immediately discover that the maintenance of the value of
    the standard is the all-important consideration, and that its
    material is of no importance whatever and should be at once
    changed to "_redress the situation_." After having reduced one of
    the metals to a commodity by depriving it of the money function,
    these theorists complacently point to the resulting fluctuations
    in the value as a justification of the act producing them, and as
    a conclusive proof of the unfitness for money of the demonetized
    metal. * * *

    Metallic money, on this theory, is no longer automatic, but is as
    completely subjected to governmental control for all injurious
    purposes as paper money. But, unlike paper money, the control
    over this kind of metallic money can only be exercised in the
    baneful direction of decreasing its volume, and thereby making
    property cheaper and money scarcer and dearer.

    This is a one-sided system, which can operate only in the
    interest of the security creditor, the usurer, and pawnbroker,
    whom it enables, through the falling prices which itself
    occasions, to swallow up the shrunken resources of the debtor,
    but is impotent to protect the interests of the unsecured
    business creditor, the debtor, or society, when, from any cause,
    the supply of the money metals becomes deficient.

    The world has expended a vast amount of labor in the production
    of the precious metals, and has made great sacrifices in
    upholding the automatic metallic system of money, and has a right
    to insist that it shall be consistently let alone to work out its
    own conclusions, or that it be abandoned.

The history of the subsequent struggle to remonetize silver only serves
to illustrate and emphasize the correctness of that statement of the

Between 1810 and 1849, according to Tooke and Newmarch (recognized
authorities on the subject), gold increased in value 145 per cent. which
is equivalent to a fall in the general range of prices of 59 per cent.
No movement was then made or suggestion offered by the debtors, or by
any class of the community, to add any new money-metal to the metals
already in use, with the view of increasing the volume of money, so that
the equity of time contracts might be maintained, and the value of the
unit of money kept at a steady and unchanging level.

But as soon as the discoveries of gold were made in the alluvial
deposits of California and Australia, or rather as soon as it was
suspected that money would thereby become considerably increased in
volume, the annuitants and income classes, the creditors everywhere,
took steps to avert what they characterized as a great calamity. They
openly declared their purpose, by every means in their power, to prevent
a decline in the value of money, so that the purchasing power of their
incomes might not be reduced. They determined to go to any length in
order to prevent the rise of prices which their aggressive instincts led
them to fear would follow the additions to the money volume of the world
by the natural and much needed yield of the mines.

The fiat therefore went forth that one of the metals must be discarded.


If anything were needed to demonstrate that the reason for the
demonetization of silver was the cupidity of the creditor classes--the
money-lenders, annuitants, and those in receipt of fixed incomes--and
that it was not any defect inhering in the metal silver, nor any change
in its adaptability to subserve the purposes of money, it is to be found
in the significant fact that the metal first selected for demonetization
was not silver but gold--that metal which has since become the idol of
the money-changers, and which is now declared to be the only "natural"
money. The openly-avowed determination was to increase the value of
money, and in order to accomplish that purpose the metal which promised
the largest yield was to be condemned and stripped of its ancient
monetary function. So strongly was this determination set forth, so
earnestly was it presented, and so urgently pressed on the ground of
duty that its achievement came to be regarded as the fulfillment of a
high moral purpose.

It was with gold then as it came to be with silver afterward, and as it
always is with whatever interferes with the interests of privileged
classes, intrenched in power and prerogative,--the determination to
destroy it being arrived at, measures were taken to prove that the
public good required its destruction. While the purpose was to discard
the metal, whether gold or silver, which threatened most immediately and
seriously to reduce the purchasing power of money, the argument was
that a decrease in the purchasing power of money was a calamity against
the happening of which every energy should be directed.

The privileged classes found then, as they find now, able and ingenious
advocates and defenders among the literary and educated guilds of the
period. The celebrated De Quincy, in England, attempted to prove, and to
his own satisfaction did prove upon figures drawn from his fears and a
brilliant imagination, that the least yield of gold to be expected from
the mines of California and Australia for an indefinite period in the
future, was the yearly sum of $350,000,000.

M. Chevalier, in France, vehemently proclaimed the necessity of
discarding one of the money metals, and that one not silver but gold. In
his work upon the "Fall of Gold" M. Chevalier, in 1856, said:

    The quantity of gold annually thrown on the general market
    approaches in round numbers a milliard of francs ($200,000,000).
    Those two countries (California and Australia) must yet for a
    long series of years produce gold in such quantities and on such
    conditions as to render a marked decline in its value inevitable.

    It is absolutely certain that so vast a production should be
    accompanied with a great reduction in value.

    In no direction can a new outlet be seen sufficiently large to
    absorb the extraordinary production of gold which we are now
    witnessing, so as to prevent a fall in its value.

    Unless, then, we possess a very robust faith in the immobility of
    human affairs, we must regard the fall in the value of gold as an
    event for which we should prepare without loss of time.

The "preparation" which Chevalier advocated was the discarding of that
metal which gave promise of the greatest abundance. He did not attempt
to hide his purpose. He boldly stated that his object was to enhance the
value of money. This object was also clearly expressed on a later
occasion by another distinguished advocate of dear money, Mr. Victor
Bonnet, of France, in the Journal des Economistes. He said:

    The world is now saturated with the precious metals, and if there
    is any danger against which it is necessary to guard, it is that
    this saturation should become greater. * * *

    If the annual production of gold is now reduced to 500,000,000
    francs, let us thank Heaven for it, and let us wish that it may
    not be too rapidly increased, whereby we should be embarrassed.
    It is the too great abundance and not the scarcity of metallic
    money which is to be apprehended.


In 1857 the German states and Austria demonetized gold; and had it not
been for the opposition of France, which insisted on retaining the
double standard, the movement might have become general on the
continent. With England, however, nothing could be done. More than a
generation had passed since it had declared for the single standard of
gold, and its creditors and income classes--the shrewdest, most adept,
and watchful of financiers--did not believe that the large yields of
gold would long continue.

The creditor classes of the continent, finding England immovable and
realizing that the object sought by the English creditors was identical
with their own, namely, the increase in the value of money and the
depression of prices, concluded that the common purpose could be as well
served by the demonetization of one as by that of the other. This
conclusion was emphasized by developments on the Comstock lode whose
bountiful and beneficent yield of silver was the fitting supplement to
the great discoveries of gold on the Pacific coast. The danger of a
decline in the value of money was more imminent than ever. The
annuitants became alarmed. Commissions were sent from Europe to the
Pacific coast to investigate the subject. The United States, too, sent
a commissioner to examine into the condition and prospects of the
Comstock, and, imbued with many of the characteristics of De Quincey and
Chevalier, the United States commissioner, in 1868, reported that if all
other mines were worked with the machinery used on the Comstock "their
yield would flood the world."

Like many of the present opponents of silver he was endowed with the
gift of prophecy, and accordingly we find him confidently predicting
that other and innumerable rich lodes of silver would be found on the
Pacific coast which would be worked with great profit. The attack on
gold was immediately changed to a combined attack on silver. From that
period till the present no means have been left untried to belittle and
degrade that metal, and also to disparage those who are in favor of
continuing it as one of the money metals of the world.

It was then announced with all the dogmatism of authority that silver
was unfit to be used as money. Defects were suddenly discovered in it
that the scrutiny of three thousand years had failed to disclose. Its
weight and bulk were found to be insuperable obstacles to its use as
money. Yet the specific gravity of silver is no greater now than it has
been for all the ages during which it has been used as money by all
mankind, nor is it any heavier or more bulky than it was in 1851 or
1857, when Belgium, Germany, and Austria demonetized gold and made the
"heavy," "bulky," and "inconvenient" metal, silver, their only money
metal. Silver can now be transported from place to place with less risk
and at no greater expense than gold, and at much less cost than at any
previous period in the history of the world.

The objection that silver is too heavy for the pocket is an objection
common to all metallic money. We see hardly any gold in circulation in
this country--infinitely less than of silver. When our people have a
choice as to the form in which they will take money they prefer paper
representatives as being the most convenient. The extraordinary
perfection to which the arts of the engraver and paper maker have been
brought gives paper money a security against counterfeiting and
imitation far superior to any immunity which can be claimed for the
metals. The marvellous inventions of modern times in the form of safes
and vault-locks render it a matter of practically no risk to store the
metals, both silver and gold, so that paper representatives of them may
be issued. These representatives are preferred by the general mass of
the people, and have almost entirely occupied the channels of
circulation to the exclusion of both metals. A silver certificate for
$1,000 weighs no more than a gold certificate for the same amount.


The motive for the demonetization of silver was precisely the same that
had previously inspired the demonetization of gold. The object was to
demonetize one of the metals--that metal which promised the greatest
abundance, and which would contribute most largely to maintaining at an
equitable level the general range of prices. The motive in both cases
was to aggrandize the privileged classes--the income and the creditor
classes of the world--and by means of a subtle and sinister manipulation
of the money volume, whose effects it is not always easy to trace to
their true cause, to practically confiscate the reward of the hard toil
of the masses. To all intent and purpose the design was to establish a
new system of slavery for the western world, of which the debtor
classes among the white races should be the victims.

When demonetization was determined on there was no pretense that there
was any difficulty in maintaining a parity between the two metals at the
established ratio.

In the official résumé of the doings of the French monetary commission
of 1869 the arguments upon both sides were summed up.

In behalf of the gold standard it was said:

    The rise in price which has taken place within twenty years in a
    great number of articles of merchandise is evidently due to many
    causes, such as war, bad harvests, and increase in consumption;
    but it is very probable that the depreciation of the precious
    metals has contributed to it, since there has been a striking
    coincidence between the rise of prices and the production of the
    new mines of gold and silver. The annual production of the two
    metals, which was only $80,000,000 in 1847, exceeds now
    $200,000,000. It has nearly tripled, and it is easy to see that
    the real value of the metals has diminished. It is difficult to
    estimate exactly what the diminution is, but whatever it may be
    it demands the attention of governments, because it affects
    unfavorably all that portion of the population whose income,
    remaining nominally the same, undergoes a yearly diminution of
    purchasing power. As governments control the weight and standard
    of money, they ought so far as possible to assure its value. And
    as it is admitted that the tendency of the metals is to
    depreciate, this tendency should be arrested by demonetizing one
    of them.

In behalf of the double standard it was replied as follows:

    Many economists argue that the precious metals, having become
    very abundant, have lost 10 or 15 per cent. of their value, and
    that the situation must be redressed by making money scarcer by
    demonetizing silver. To this it may be answered that the great
    discoveries of gold of the last twenty years have injured nobody.
    The new mass of gold, spreading over the whole world, has found
    employment in stimulating all forms of business, and, as a
    consequence, the value of gold has fallen very little. According
    to Mr. Newmarch, the mass of gold and silver has augmented 3 per
    cent. per annum, while the mass of exchanges has augmented more
    than 3 per cent. per annum, so that the equilibrium has been
    maintained. And the present is an especially inopportune time to
    demonetize silver, because the annual production of gold has been
    falling off for several years. It was $200,000,000 in 1853, and
    it is now not more than $140,000,000. What will happen to the
    civilized world if silver is demonetized and if gold shall then


England did not adopt the gold standard until she was in a position to
become the principal creditor nation. When her forges, furnaces,
spindles, and looms were ready to supply manufactured goods to all the
world, she saw that all countries and peoples would be compelled to pour
their treasures into her lap. Her insular position and great navy
guarantied her against external assault. Released from the anxieties and
labors incident to the Napoleonic wars, with a sturdy population of
trained mechanics, and with fields of coal and iron in abundance, she
was well adapted to become the "workshop of the world." With colonial
possessions in every sea, and with Continental Europe in ceaseless
unrest, England could rely on customers who could themselves produce
nothing but raw material and would be obliged to buy her finished

The field of industry had been recently broadened by basic inventions of
unparalleled importance--the steam-engine, the power loom, the
spinning-jenny, and a multiplicity of other devices that increased a
hundred fold the efficiency of artisan labor. England knew that her
trade would in the main be a foreign trade and her financial dealings
largely with foreign governments. She knew that from the people of the
continent, impoverished by years of struggle for existence against the
attacks of Napoleon, she could not expect immediate payments in cash, or
in commodities. Time bonds and other deferred obligations were the media
in which for the most part she received pay, she made interest and
principal payable in gold alone, and if before the date of payment the
value of money should increase it would not be to the disadvantage of
the creditor. Whatever we may think of the _ethics_ of this policy, we
can have no difficulty in understanding its _motive_.


As to the object which England had in view in demonetizing silver we are
left in no sort of doubt. It has been candidly admitted by many of her
financiers and publicists. The reason for her stolid adherence to the
gold standard now is the same for which she originally demonetized
silver. Her income and creditor classes are daily in receipt of an
unearned increment to their wealth by reason of that demonetization.
More candid than the advocates in this country of the single gold
standard, the writers and press of Great Britain openly avow the object.
No better testimony to the fact can be adduced than that supplied by the
royal commission appointed in 1886 to inquire into the changes in the
relative values of the precious metals.

At page 90, Part II, of the final report of that body, section 128, the
commission say:

    It must be remembered, too, that this country is largely a
    creditor country, of debts payable in gold, and any change which
    entails a rise in the price of commodities generally; that is to
    say, a diminution of the purchasing power of gold would be to our

Before the British Royal Commission of 1868 on International Coinage,
Mr. Jacob Behren, an eminent British merchant and member of the
Associated Chambers of Commerce, after answering special and technical
questions, was asked, in conclusion, "if there was anything else he
wished to state." His reply was (p. 13):

    I would only state that, in my opinion, the general introduction
    of gold all over the world has been one of the greatest possible
    blessings to England. I believe that England would be now the
    very poorest country in the world if the silver standard abroad
    had been kept up, and gold had not been generally introduced.
    Gold would otherwise have been very much reduced in value, and we
    should have had all the gold poured into England. All the debts
    owing to us would have been paid in the depreciated currency;
    and, therefore, I believe that England ought to have taken the
    lead in the introduction of a gold currency abroad. We ought to
    be very thankful that it has been introduced, and we ought to
    give every facility to its circulation.

Sir Lyon Playfair, in a speech delivered in the English Parliament on
April 18, 1890, according to the report in the London Times of the day
following, said that--

    The true policy of England as the chief creditor nation of
    the world was to keep perfect independence, and to refuse
    participation in any entangling conference on our monetary

And, according to the same report, Sir Lyon Playfair, referring to the
holding of the metals together by law, said that--

    It was quite true that, if you yoked a cart-horse to a racer, the
    strength of both would be increased but the speed of the racer
    would be sacrificed.

Gold is the "racer" whose "speed" must not be sacrificed, no matter how
much injury may be effected by its tendency to greater and greater gain.

The weight of the enormous burden which is imposed on gold can not be
better illustrated than by a statement of this same Sir Lyon Playfair,
made in the same speech. According to the London Times of April 19, he
said that--

    The liabilities of the banks of Great Britain to the public
    amounted to £621,000,000, or about the amount of the national
    debt of England; but the amount of coin or bullion to meet this
    liability was only £35,000,000; or, deducting from each side of
    the account £8,000,000 locked up in the Notes Department of the
    Bank of England, it was £27,000,000; or only 4-1/2 per cent. of

On the same occasion Mr. Goschen, Chancellor of the Exchequer, delivered
an able speech, in which he gave his facts, his eloquence, and his logic
to the struggling masses of his countrymen by maintaining the wisdom of
remonetization of silver, but gave his conclusions and his policy to the
creditor classes by recommending no disturbance of present conditions.

    I have  contended--

said the Chancellor of the Exchequer--

    and am prepared still to contend, that I should prefer the
    currency of the world to depend upon two metals rather than upon
    one metal. To those views I gave expression in 1878. * * * I have
    always looked upon silver and gold not as antagonistic to each
    other; not as being metals the price of one of which would
    necessarily fall when the other rose, but I have looked upon them
    as partners who together were doing the work of the currency of
    the world.

The English creditor classes have not been without able coadjutors in
this country. We have noticed for the last twelve or fourteen years that
zealous advocates of the gold standard, the advantages of which are not
confined to Great Britain, are to be found among the creditor classes of
the United States.

If the toilers of this country, from the proceeds of whose labor these
exactions have to be paid, had as little influence on the legislation of
the United States as the toilers of England have on the legislation of
that country, the creditor classes and financiers of the United States
might be as frank as those of Great Britain in admitting the object of
maintaining the single gold standard.

How graphically, though unintentionally, does the English poet, Waller,
in the following verse, express the advantage which the gold standard
gives to creditors everywhere, and the self-satisfaction with which they
contemplate life:

  The taste of hot Arabia's spice we know,
  Free from the scorching sun that makes it grow.
  Without the worm, in Persia's silk we shine,
  And, without planting, drink of every vine.
  To dig for wealth we weary not our limbs,
  Gold, though the heaviest metal, hither swims.
  Ours is the harvest where the Indians mow.
  We plow the deep, and reap what others sow.


When Germany, intoxicated by her victory over France, and in order to
further cripple a fallen foe from whom she had exacted $1,000,000,000 in
gold, demonetized silver, she inflicted on her people by the fall of
prices consequent on the increase in the value of money, more misery
than all her armies of horse and foot had been able to inflict on
France. France, on the contrary, notwithstanding this unprecedented war
tribute, by keeping a sufficient volume of money in circulation to
maintain, and even advance, her range of prices, emerged in a few years
from the consequences of the greatest disaster in her history, conscious
of a triumph more complete than Germany had achieved by all the military
splendor of the war. The ransom exacted of France was received back by
her almost as soon as paid, in exchange for the products of her
industry. It is not a sign of prosperity, Mr. President, when hundreds
of thousands of people, the best bone and sinew of a nation, are found
annually emigrating; and it is a coincidence which I merely mention, in
passing, that as soon as the effects of demonetization of silver had had
time to make themselves felt in Germany, a veritable hegira of its
people took place.

From 1873 to 1889, the emigration from Germany numbered 1,546,000

Students of social science everywhere recognize the statistics of
illegitimacy and of suicides as among the most powerful evidences of
monetary distress. By reference to those statistics we find that
notwithstanding the large emigration during that period the number of
illegitimate births in Germany increased from 161,294 in 1883 to 169,645
in 1888. The suicides in Prussia, Bavaria, Saxony, and Baden--the
leading states of the German Empire--increased from 179 for each million
of population in 1868 to 196 for each million of the population in 1876
and to 218 for each million of the population in 1882. In Prussia alone
the number of suicides in 1876 was 151 per million, while in 1882 it was
191 per million.

This is part of the price which the toiling masses of Germany are paying
for the gold standard experiment, which, without their consent their
imperial government foisted upon them.

Bismarck made the mistake that many able men in all countries of the
western world have made and continue to make, namely, that of
attributing the commanding position of Great Britain in the commercial
and industrial world to her adoption of the gold standard. Bismarck
mistook for cause and effect what was a mere coincidence, the result of
exceptional conditions, as did those of our legislators in 1873, who
happened to know anything whatever of the nature of the act demonetizing
silver. The belief of some of the most far-sighted statesmen of Great
Britain has been that she secured her position, not by reason of the
gold standard, but in spite of it.

In a speech delivered at Glasgow, in November, 1873, after the
alteration by Germany in her monetary standard, Mr. Disraeli said:

    The monetary disturbance which has occurred, and is now to a
    certain extent acting very injuriously upon trade, I attribute to
    the great changes which the Governments of Europe are making in
    reference to their standard of value. Our gold standard is not
    the cause of our commercial prosperity, but the consequence of
    that prosperity. It is quite evident that we must prepare
    ourselves for great convulsions in the money market, not
    occasioned by speculation or any of the old causes which have
    been alleged, but by a new cause with which we are not
    sufficiently acquainted.

And again in March, 1879, when the effects of the decreasing volume of
money were making themselves more and more felt, Mr. Disraeli, then Lord
Beaconsfield, said:

    All this time the produce of the gold mines of Australia and
    California has been regularly diminishing, and the consequence is
    that, while these great alterations on the continent in favor of
    a gold currency have been made, notwithstanding that increase of
    population which alone requires a considerable increase of
    currency to carry on its transactions, the amount of the currency
    itself is yearly diminishing, until a state of affairs has been
    brought about by gold production exactly the reverse of that
    which it produced at first. Gold is every day appreciating in
    value, and as it appreciates the lower become prices. It is not
    impossible that, as affairs develop, the country may require that
    some formal investigation should be made of the causes which are
    affecting the value of the precious metals, and the effect which
    the change in the value of the precious metals has upon the
    industries of the country, and upon the continual fall of prices.

In reaching their conclusions, Bismarck and others ignored the
fundamental principle that a gold supply that might be sufficient for
one country with a gold standard, and might even result in a measure of
prosperity to that country, would be wholly insufficient if other
countries should adopt the same standard and should enter upon a keen
competition and rivalry for the acquisition of gold.

The adoption of that standard by Germany and France was therefore not
only destructive of their own prosperity, but was a stunning blow at the
prosperity of England and all other gold-using countries. In taking
England for his model, Bismarck had not the condition of the toiling
masses before his mind, but the glamour of prosperity which surrounded
the creditor-barons.

The unprejudiced observer can not fail to perceive that the $370,000,000
coined under the Limited Coinage Act of the United States of 1878,
supplementing the gold stock of the western world, postponed great
industrial and financial crises. But the elements of these crises are
gathering, and, unless relief be soon forthcoming, will burst upon the
world with crushing severity.


If we are surprised that the sordid selfishness of the privileged
classes of Europe should have induced them to perpetrate so gross an act
of injustice, we are reminded that the legislation of monarchical
countries has usually been controlled in the interest of the privileged
classes. But what shall be said in defense of the demonetization of
silver by the United States? No such stupendous act of folly and
injustice was ever before perpetrated by the representatives of a free

Our position differed materially from that of Great Britain. This was
not a creditor nation. Our people did not, and do not, own thousands of
millions of dollars of foreign bonds, on which to receive semi-annual
interest in a constantly appreciating money, which would have to be paid
from the current earnings of foreign labor. Instead, therefore, of our
demonetization unjustly enriching our creditor-classes at the expense of
foreigners, it enabled the creditors at home here to rob and despoil the
debtors among their own countrymen. Instead of despoiling the Canadian,
the Australian, the East Indian, the Egyptian, or the Turk, the
spoliation arranged for by our adoption of the gold standard was a
spoliation of the debtors in our own communities. In so far, however, as
our debt was held abroad, it provided for a spoliation of our citizens
by the foreign bondholders also. And as nearly all our public debt was
so held, we had presented to us in 1873 the extraordinary spectacle of
representatives, sent here to enact laws for the welfare and advancement
of our own people, devoting all their energies, whether aware of it or
not, to the upbuilding of the fortunes of the moneyed aristocracies of
other countries, at the expense of the producers of the United States.


Consider for a moment the condition of this country at the time when
this amazing piece of legislation was enacted.

The Republic was but just recovering from an exhausting war, which
loaded it with a national debt approaching $3,000,000,000. There were
also State, county, city, and town debts aggregating many more thousands
of millions, with railroad and other corporate bonds and debts
aggregating yet other thousands of millions and private debts of
indefinite and unascertainable amount, represented largely by mortgages
on real estate. This constituted an aggregate whose burden might
naturally be presumed to be sufficient to tax all the resources of the
people. Although some portion of those debts has been liquidated and the
national bonds have been refunded at lower rates of interest, yet we all
know that in this age all municipal and corporate debts, if not national
debts, are practically perpetual. No sooner is one form of bond
liquidated than another takes its place; no sooner is one public
improvement completed than another is begun.

At the time silver was demonetized it might well have been supposed
that a sufficiently large unearned increment had already been realized
by the foreign and domestic holders of United States bonds. The greater
portion of the debt of the Government was, when incurred, made payable
simply in "lawful money"--the interest alone being payable in coin. Yet
in March, 1869, the bond-holders secured the passage of an act of
Congress, entitled "An act to strengthen the public credit," containing
a pledge to pay in coin or its equivalent not merely the interest, but
the principal of all national obligations not specially provided to be
paid otherwise.


And again, when in 1870 Congress was about to provide for a refunding of
the public debt, these clamorous creditors, not satisfied with having
got the bonds at rates much below their face value, and not satisfied
with the pledge to pay in coin--a pledge made long after the contract
was made and the debt incurred--insisted that not only should the new
bonds be payable in coin, but in order to guard against any possible
interpretation which might work to their detriment they did what has
rarely been done in the history of monetary legislation, insisted that
even the very _standard_ of that coin should be fixed and nominated in
the bond. They were willing to take no chances. They were not willing to
place confidence in the sense of equity and fair dealing of the people
of the United States. They held before Congress the covert threat that
if the new issue of bonds did not provide for payment in "coin," instead
of "lawful money," and did not prescribe the precise standard of coin in
which they were to be payable, it would be difficult if not impossible
to place the bonds on the market.

So, by the refunding act of July 14, 1870, Congress provided for the
payment in "coin of the present standard value," that is to say, in
either gold dollars of 25.8 grains of gold, nine-tenths fine, or in
silver dollars of 412-1/2 grains of silver, nine-tenths fine, at the
option of the United States. But even this extreme advantage to the
creditors over payment in "lawful money" of the United States, in which
the bonds were bought, and in which they were legally payable, was
insufficient. All but the most ingenious would imagine that having thus
provided for payment in coin then bearing a considerable premium over
the current money of the Republic, and having the very standard of that
coin fixed in the act, the highest point of vantage had been reached.
One device, however, and only one, remained by which the money of the
payment could be still further increased in value, and this device did
not escape the watchful eye or cunning hand of the public creditors.

They clearly saw that if by legislative enactment they could secure the
rejection of one of the money-metals they would succeed in enormously
increasing the value of the metal retained. This they accomplished by
the demonetization of silver, and thus by striking down one-half the
automatic money of the world and devolving the money function
exclusively on the other half, added thousands of millions of dollars to
the burden of the debt.


It will be observed that this anxiety to strengthen the public credit
was evinced by the bondholders _after_ and not before the bonds were in
their possession. No anxiety for the public credit was manifested by
them at a time when the Government might be able to reap advantage from
it. The Government having parted with the bonds at a heavy discount,
their selling price in the market became a matter of no direct pecuniary
importance to the people of the United States.

The "strengthening of the public credit" that was to be effected by the
act of March 16, 1869, consisted of a rise in the price of the bonds for
the benefit of the holder, at a time when they were no longer the
property of the Government but of private individuals. The real effect
of the act, therefore, was not in any way to benefit the Government but
greatly to enrich, by an increment unearned and unbargained for, a few
men who had already been greatly enriched by their dealings with the
United States. The title of the act should have read "An act to
strengthen the bank account and credit of the holders of United States

The excuse and apology for the act was that by its passage the refunding
process then contemplated, and afterward provided for by the refunding
act of 1870 might be rendered more certain of success; but if any
advantage accrued from that cause, it was lost, and much more with it,
by the increase which the act of 1869 effected in the burden of the
bonded obligation, by pledging the nation to a payment in a medium much
more valuable than the medium provided for in the contract. And, again,
in 1873 when all the bonds provided for by the refunding act of 1870 had
been sold and had passed out of the hands of the Government, another act
was passed, intended by the money-lenders again to strengthen the public
credit, and again to the disadvantage of the people and to the exclusive
and enormous advantage of the bondholders. It bore the innocent title of
"An act revising and amending the laws relative to the mints, assay
offices, and coinage of the United States." This act, bearing on its
face no suggestion of any change more serious than that of regulating
the petty details of mint management, has proved to be an act of
momentous consequence to the people of this country. This is the act
that demonetized the silver dollar, which it did by merely omitting that
coin from the enumeration of the coins of the United States.


Among all the explanations that have been made to account for that
demonetization by a Congress of the United States, I have never heard
any reason advanced which constituted a justification for it. To my
mind, in view of all the circumstances--in the face of the herculean
difficulties by which the nation was surrounded, in the face of the
sacrifices which our citizens had made to preserve the Republic, and in
the face of all that had already been done by an over-generous people,
proud of their national strength, and jealous of their national honor,
to satisfy the rapacious demands of the money-lenders--in view, I say,
of all these facts, the demonetization of silver by the United States
must be regarded as one of those historic blunders that are worse than
crimes. It was the child of Ignorance and Avarice, and is already the
prolific parent of enforced idleness, poverty, and misery.

It is to undo as far as possible the effects of the blunder of 1873 that
new legislation is now imperatively demanded by the people. While the
past can not be recalled, the present is ours, and the pressing duty of
to-day is to provide for the future. The demand comes from all sections
of the country that a remedy for the depressed industrial conditions
caused by the legislation of 1873, be applied at the earliest moment.
And what better remedy could be applied than absolutely to reverse that
legislation and to put the monetary position of this country back to
exactly where it was when that wrong was committed?

Some twelve years ago an attempt was made to apply a remedy, but the
attempt was only partially successful. Instead of resulting in free
coinage, it resulted in the passage of the bill which authorized the
coinage of not less than two nor more than four million dollars' worth
of silver per month. On that occasion a financial debate of great
interest and importance was had in this Chamber and in the other House
of Congress. The proposition to remonetize silver or to increase the
silver coinage was vigorously opposed, but the arguments then presented
by the advocates of remonetization never have been, and never can be,

In fact, but rarely has there been any attempt made to answer those
arguments. Puerile attempts at wit, and diatribes of abuse are all that
the silver men have heard in sixteen years in answer to the contentions
they have made in favor of the remonetization of silver.


With that debate, Mr. President, long pending and eagerly maintained on
both sides, there began in this country an educational movement among
the masses, that is destined to have far-reaching consequence. The
public attention was fastened, as it had never been fastened before, on
the subject of money, and on the forces which govern its value, and up
to this time that attention has never flagged. As a result we find the
great body of our people to-day--the farmers and artisans of the
country--after years of reflection and discussion in their lyceums and
trade organizations, adopting to a large extent the views then presented
by the advocates of an increased money volume--views which at the time
were contemptuously derided by the advocates of contraction and of gold.

The cry for relief appropriately now comes from the farmers, the
artisans, and the laboring classes, as well as from the young, the
enterprising, the thoughtful, of all classes, who have not inherited
wealth, but are hewing out for themselves the rugged path to success. It
is they who have had to bear the exactions of the system which has
prevailed. It is from the proceeds of their labor that the extortions
have been paid. If objection be made that the character of relief
proposed is not indorsed in financial circles, or by the literary guild
or professional political economists that surround them, the sufficient
reply is that the world can not wait for the correction of abuses by
those who are profiting by them. In the nature of things, all movements
for reform must be initiated by those who can not lose by the
installation of justice.

But there are others besides the laboring masses who are working in the
cause of humanity. There are noble, unselfish, and altruistic men in all
the countries of civilization, who see the wrong and are indefatigable
in their efforts to set it right.

I will read a cable dispatch recently addressed to me by Mr. Henry H.
Gibbs, formerly governor of the Bank of England, and now president of
the Bimetallic League of Great Britain:

    LONDON, _May 6_.--The friends of silver deeply regret the death
    of Senator Beck, whose services in the cause of monetary reform
    are warmly appreciated on this side of the Atlantic. The
    bimetallist party of the United Kingdom, now including over one
    hundred members of the House of Commons, attach the greatest
    value to the debate about to commence in your illustrious
    chamber. We fully recognize not only that the support afforded to
    silver by your legislation during the last twelve years has
    helped the protect the industrial world from an acute monetary
    crisis, but also that the debates in Congress have served more
    than all else to educate our people to recognition of the
    important issues involved. We believe also that the increase and
    coinage of silver contemplated by Congress will restore, wholly
    or considerably, your coinage rates, and will thus make
    international settlement of this complex question comparatively
    easy. We anticipate further and with much confidence, that the
    advance in the price of silver which must follow your action will
    stimulate both the export and the other trades of your country,
    and, while tending to the prosperity of your agricultural
    classes, will also assist the manufacturing industries of the
    United Kingdom and the whole body of our wage-earners.

Mr. Moreton Frewen, of London, an able writer on economic subjects,
whose recent work on the "The Economic Crisis" I commend to the careful
perusal of Senators, says:

    It may, indeed, be affirmed, without fear of contradiction, that
    legislation arranged in the interest of a certain class, first by
    Lord Liverpool in this country, and again by Sir Robert Peel at
    the instigation of Mr. Jones Loyd and other wealthy bankers,
    which was supplemented recently by simultaneous anti-silver
    legislation in Berlin and Washington at the instance of the great
    financial houses--this legislation has about doubled the burden
    of all national debts by an artificial enhancement of the value
    of money.

    The fall of all prices induced by this cause has been on such a
    scale that while in twenty years the National debt of the United
    States quoted in dollars has been reduced by nearly two-thirds,
    yet the value of the remaining one-third, measured in wheat, in
    bar iron, or bales of cotton, is considerably greater--is a
    greater demand draft on the labor and industry of the nation than
    was the whole debt at the time it was contracted. The aggravation
    of the burdens of taxation induced by this so-called
    "appreciation of gold," which is no natural appreciation, but has
    been brought about by class legislation to increase the value of
    the gold which is in a few hands, requires but to be explained to
    an enfranchised democracy, which will know how to protect itself
    against further attempts to contract the currency and to force
    down prices to the confusion of every existing contract.

    Of all classes of middle-men, bankers have been by far the most
    successful in intercepting and appropriating an undue share of
    produced wealth. While the modern system of banking and credit
    may be said to be even yet in its infancy, that portion of the
    assets of the community which is to-day in the strong boxes of
    the bankers would, if declared, be an astounding revelation of
    the recent profits of this particular business; and not only has
    the business itself become a most profitable monopoly, but its
    interests in a very few hands are diametrically opposed to the
    general interests of the majority. By legislation intended to
    contract the currency and force down all prices, including wages,
    the price paid for labor, the money owner has been able to
    increase the purchase power of his sovereign or dollar by the
    direct diminution of the price of every kind of property measured
    in money.


During the debate on the limited coinage bill, not content with abuse of
the advocates of the measure; with flimsy criticism of it and specious
arguments against it, its opponents in and out of Congress indulged in
diverse prophecies and predictions. They pictured forth the lamentable
results that would follow its passage, and the direful consequences that
would ensue from an increase of the circulating medium of the country.
Among the results confidently predicted were the following: that the
silver would not circulate at all, and again that it would circulate to
the exclusion of gold, which metal, we were informed, would flow out of
this country with a velocity and in a volume theretofore unknown; that
we should be unable to redeem our paper money in gold; that we should be
precipitated into a silver vortex; that an inflation of the currency
would follow, which would ruinously raise prices of all commodities and
that this inflation would result in an unprecedented contraction. We
were charged with forcing upon the public creditors a dollar worth only
ninety cents. We were warned that the passage of the bill would
indefinitely postpone the refunding of the public debt, and would lower
the price and impair the value of our national securities. It was
charged that we were setting on foot a new and irrepressible conflict
between two great sections of the country--the East and the West. We
were charged with uttering a debased coin; with lowering the standard
of American credit; with tarnishing the integrity and honor of our
country before foreign nations, and with unprecedented moral turpitude
in setting an example of flagrant and shameless national dishonesty.

The men of the far West, and of the Pacific slope especially, were the
particular targets of this abuse. They were denounced by some as
"lunatics," by others as dangerous and unworthy demagogues, because, as
was charged, their constituents, if not themselves, were directly
interested in the restoration of the ancient right of silver to full
recognition as one of the money metals. For their benefit resort was had
to every epithet which the English language afforded. In holding them up
to public scorn the rich and varied vocabulary of odium and opprobrium
was exhausted.

These prophecies of disaster were united in by the professors of
political economy in all the Eastern colleges, by the President of the
United States, by the Secretary of the Treasury, by the leading American
newspapers, by the principal public men and journals of Great Britain,
if not of all Europe; and, of course, by all bankers, money-lenders, and
professional financiers the world over.

And now, Mr. President, how many of all those alarming prognostications
by all these distinguished prophets have been fulfilled? Not one! On the
contrary, it is not too much to say that the public credit of the United
States is to-day the highest in the world. It does not stand merely in
line with that of other first-rate powers; it stands at the head. Our
gold, silver, and paper money stand at a parity with each other. If a
full measure of relief was not realized by the passage of that bill it
is because the coinage of $4,000,000 a month was left optional with the
Secretary of the Treasury, instead of being made mandatory on him.

But it is hardly necessary to assert that the predicted inflation of
prices has not been observed as a consequence of the coinage of
$2,000,000 a month. While the issuance of that amount has not, with our
rapidly increasing population and wealth, been sufficient to arrest the
downward tendency of prices, it has undoubtedly prevented them from
falling much lower. Without that coinage, we should have had industrial
depression, chronic and somber, with consequences of untold disaster.

But the result which gave most apprehension to those who advocated the
gold standard, the evil which they regarded as on the whole the most
threatening and direful of all the evils that were to result from even
so small an increase in the money volume as that bill provided for, was
the outflow of gold. They ridiculously under-estimated the tremendous
money-absorbing power of this great country. And as if to emphasize to
all the world the complete absurdity of their alleged fears--this
apprehension has been conspicuously and notoriously set at naught by the
constant inflow of gold. On the 30th of June, 1878, the amount of gold
coin and bullion in the Treasury and in monetary circulation in this
country is officially reported to have been $213,199,977, and this
amount is probably much over-estimated. On November 1, 1889, we had more
than three times as much--the amount of gold in circulation and in the
Treasury being reported as $689,000,000.

"Experience," says Dr. Johnson, "is the great test of truth, and is
perpetually contradicting the theories of men," and the last experience,
Mr. President, is the best.

If the professors of political economy, the Eastern newspaper editors,
and the professional financiers were then so seriously mistaken ought
they not to be a little modest now in making predictions, especially in
renewing predictions that have been already discredited? They can not
point to a single instance in which their prophesy has not been
falsified by the event. So humiliating a failure on the part of the
professors, in a realm of which they boastfully claimed to be masters,
so complete an overthrow of these "experts" by men who were ridiculed
and derided as rural financiers and crazy theorists, ought to put the
advocates of the gold standard on their guard against a like defeat on
this occasion. They are pressed for reasons to account for the utter
miscarriage of their prophecies. They are left without a shadow of
consolation except that the coinage of $2,000,000 worth of silver
bullion each month has not succeeded in placing silver at a par with
gold. They affect to believe that the advocates of silver in 1878
expected that that metal, under the very limited demand of $2,000,000 a
month, would be brought to a level with gold, which, owing to the
demonetization of silver, had risen abnormally and ruinously in value.

No such belief was ever entertained or expressed. On the contrary it was
repeatedly asserted by the advocates of silver that so long as the
entire yield of gold from all the mines of the world (in 1878,
$119,000,000) was invested with the full money function and had free
access to all mints to be transmuted into coin, it could not be expected
that the conferring of the legal-tender function upon a sum so
comparatively trifling as one-fourth the yield of silver (the yield in
1878 being $99,000,000) would have the effect of placing it on a level
with gold.

It is, however, a significant fact that every silver dollar that has
been coined under that act is at a parity with gold, and will to-day buy
as much of all the objects of human desire as will the gold dollar. Nay,
more, silver bullion--disparaged and discredited as it is by being shorn
of the money function, and denied access to the mints, instead of
decreasing in purchasing power, has maintained so steady a relation to
commodities that 412-1/2 grains of uncoined silver will exchange for as
much to-day as would the coined dollar, whether of silver or gold, in
1873, when the full money function attached equally to both metals. If
this be true--and I shall presently demonstrate it beyond
refutation--what an utter perversion of terms it is to say that silver
has fallen in value!


We are solemnly warned that the full remonetization of silver in the
United States would place us alongside India and the other barbarous
countries of the world. This brilliant piece of reasoning is advanced
with great confidence, and is intended to be conclusive of the argument
against silver. But, Mr. President, India is no more barbarous now than
it was in 1873--before our silver dollar was demonetized. India is no
more barbarous now than it was in 1857, when Germany demonetized gold
and placed herself "alongside" India. Neither is Germany any more
civilized now than then. We did not at that time hear any complaint,
either in the United States or Europe, that the use of silver as money
placed any one nation more than any other in dangerous affiliation with
the civilization of India. We have never heard it charged against France
that its civilization was brought any nearer that of India by the
immense quantity of silver money in France. Neither did we hear it
charged against the United States up to 1873 that we were "alongside,"
or dangerously close to the barbarous nations by our use of silver as

Up to 1834 we had no metallic money other than silver in our
circulation, and up to 1850 we had much more silver in circulation than
gold. Were we "alongside" India then? Where were the wise and patriotic
men of our country at those periods? History fails to record any protest
on their part that we were placing ourselves "alongside" India or any
other of the barbarous nations of the world by our use of silver and our
recognition of its full money power. All the nations of the earth used
silver and accorded it full recognition as money equally with gold up to
1819. Was all Christendom at that time "alongside" India? When, in that
year, Great Britain sundered the silver link that from time immemorial
had kept her "alongside" India and the other barbarous nations and, for
selfish reasons of her own, arising from her position as a creditor of
all other nations, decided to recognize gold only as money, was any
evidence afforded of a sudden advance in the civilization of Great
Britain? Was the emergence of that nation from the benumbing
companionship of India and the other barbaric countries into the
glittering and refulgent light of the gold dispensation signalized, as
would be expected, by a corresponding improvement in the condition of
the people?

On the contrary, the history of the time informs us that as a
consequence of the passage of the bill by Parliament in 1819, compelling
payments in gold, prices rapidly fell, cotton in particular sinking in
the short space of three months to one-half its former level. Within six
months all prices had fallen one-half, and showed no signs of
improvement for the next three years. By reason of the contraction of
the currency the industry of the nation was congealed, as is a flowing
stream by the severity of an arctic winter. Alarm became universal;
confidence and activity ceased. Bankruptcies increased in 1819 more than
50 per cent. over the number of the previous year. Meetings were held
throughout England in which the people called on the government to
devise some means of redressing the situation. So universal was the
distress that the owners of land in England, who in 1819 numbered
160,000 were in seven years, by forced sales and foreclosure of
mortgages on the smaller farms, reduced to 30,000, and one in every
seven of the population lived on organized charity. All this was but a
part of the price which the people of England paid for a policy imposed
on them by the creditor classes among their own number. The condition of
industry and disorganization of labor led to frequent and serious
conflicts between the people and the military. They also led to
commercial crises without number, and England, by demonetizing silver
and thus ceasing to be "alongside" India, became the seat of panics, as
Egypt had long been of the plague and India of the cholera.

As a contrast to this I will merely cite the change in the condition of
India within the past seventeen years. When the Western world discarded
silver as money and, as a consequence, India received a larger supply of
it than ever before, that barbarous nation, as is universally admitted,
made progress by leaps and bounds. No country on earth has in the same
time made such advances in material prosperity and in all the elements
that conduce to the comfort and happiness of a people. Notwithstanding
the alleged debasement of silver, no sooner had its increased inflow
into India begun than the industries of a vast continent were
established and set in motion, and a substantial part of the activity
and prosperity that were wont to pervade some of the industries of the
United States has, by that demonetization, been transferred to fields
of wheat, and fields and factories of cotton 10,000 miles distant.

What really placed us alongside such barbarous countries as India was
the demonetization of silver. It was by that demonetization that the
people of Europe were enabled, with gold, to buy silver at 30 per cent.
discount, which, when shipped to India and coined into rupees, would buy
as much wheat as could ever have been bought with that coin. There has
been no decrease whatever in the purchasing power of the rupee in India.
This was equivalent to buying wheat at 30 per cent. below the price
theretofore paid for it, and thus the farmers of the United States were
by demonetization placed "alongside" the barbarous people of India.
Their wheat had to compete in the European markets with the wheat of
India, and it is this competition that placed them "alongside" India.
The farmer of this country, therefore, by demonetization of silver, was
compelled to compete with under-paid and half-starved ryots. And so it
was that our cotton planters, by the demonetization of silver, were
placed alongside the barbarous people of India. It is this degrading
competition that places a highly civilized people alongside a barbarous

The advocates of the single gold standard deem even silver money much
better money than greenbacks. Does it then follow that when greenbacks
were our only money--good enough money to carry the nation through the
greatest war in all history--we were "alongside" or underneath the
barbarous nations of the world? It is not the form, or the material of a
nation's money that fixes its status relatively to other nations. That
is accomplished by the vitality, the energy, the intellectuality and
effective force of its people. The United States can never be placed
"alongside" any barbarous nation, except by compelling our people to
compete with barbarous peoples--compelling them to sell the products of
American labor at prices regulated by the cost of labor and manner of
living in barbarous countries. As well might it be said that we are
alongside the barbarous people of India because we continue to produce
wheat and cotton.

The distinguishing feature of all barbarous nations is the squalor of
their working classes. The reward of their hard toil is barely enough to
maintain animal existence. A civilized people are placed alongside a
barbarous one when, in their means of livelihood, the foundation of
their civilization, they are made to compete with the barbarians. That
was the result accomplished for the farmers and planters of the United
States when silver was demonetized.


All movements for the increase of the monetary circulation are ascribed
by the money-lenders and creditor classes to the unworthy desire on the
part of the debtors to escape their just obligations. But if motives are
to be brought in question, the rule should work both ways. No note is
taken of the motive of the creditor classes in securing a contraction of
the circulation. Whatever the apparent purpose of contraction, and
however specious the arguments advanced in its justification, the real
object has always been to increase the purchasing power of money. In all
countries, and throughout all time, it is the cupidity of the creditor
classes and annuitants, and their desire to increase the value of the
money unit that has brought about a shrinkage in the money volume.
Unlike the great masses of the people, who were ignorant of the effects
to be naturally expected from such a shrinkage, the annuitants and
moneyed men very well understood that the value of every pound or dollar
depended on the number of pounds or dollars that were in circulation;
the larger the total number out, the smaller the purchasing power of
each; the smaller the total number out, the greater the purchasing power
of each.

Loaners of capital are not usually those who entertain further hope of
personal achievement. When men realize fortunes it is rarely that they
conserve the faculty of initiative; they find no special delight in
novelty; they look so carefully to security in the use of money that the
spirit of adventure is restrained. The realization of a fortune is
usually the labor of a life-time, and few men who reach the goal care to
retrace their steps to enter again upon a struggle that demands all the
strength, the momentum, and the intrepidity of youth. Men of assured
incomes therefore are disposed to take their ease, and society must
look, for its material progress and development, to those who have a
career to make, with the ambition and the power to make it.

It is a remarkable circumstance, Mr. President, that throughout the
entire range of economic discussion in gold-standard circles, it seems
to be taken for granted that a change in the value of the money unit is
a matter of no significance, and imports no mischief to society, so long
as the change is in one direction. Who has ever heard from an Eastern
journal any complaint against a contraction of our money volume; any
admonition that in a shrinking volume of money lurk evils of the utmost
magnitude? On the other hand we have been treated to lengthy homilies on
the evils of "inflation," whenever the slightest prospect presented
itself of a decrease in the value of money--not with the view of giving
the debtor an advantage over the lender of money, but of preventing the
unconscionable injustice of a further increasing value in the dollars
which the debtor contracted to pay. Loud and resounding protests have
been entered against the "dishonesty" of making payments in "depreciated
dollars." The debtors are characterized as dishonest for desiring to
keep money at a steady and unwavering value. If that object could be
secured, it would undoubtedly be to the interest of the debtor, and
could not possibly work any injustice to the creditor. It would simply
assure to both debtor and creditor the exact measure for which they
bargained. It would enable the debtor to pay his debt with exactly the
amount of sacrifice to which, on the making of the debt, he undertook to
submit, in order to pay it.


In all discussions of the subject the creditors attempt to brush aside
the equities involved by sneering at the debtors. But, Mr. President,
debt is the distinguishing characteristic of modern society. It is
through debt that the marvelous developments of nineteenth century
civilization have been effected. Who are the debtors in this country?
Who are the borrowers of money? The men of enterprise, of energy, of
skill, the men of industry, of foresight, of calculation, of daring. In
the ranks of the debtors will be found a large preponderance of the
constructive energy of every country. The debtors are the upbuilders of
the national wealth and prosperity; they are the men of initiative, the
men who conceive plans and set on foot enterprises. They are those who
by borrowing money enrich the community. They are the dynamic force
among the people. They are the busy, restless, moving throng whom you
find in all walks of life in this country--the active, the vigorous, the
strong, the undaunted.

These men are sustained in their efforts by the hope and belief that
their labors will be crowned with success. Destroy that hope and you
take away from society the most powerful of all the incentives to
material development; you place in the pathway of progress an obstacle
which it is impossible to surmount.

The men of whom I have spoken are undoubtedly the first who are likely
to be affected by a shrinkage in the volume of money.

The highest prosperity of a nation is attained only when all its people
are employed in avocations suited to their individual aptitudes, and
when a just money system insures an equitable distribution of the
products of their industry. With our present complex civilization, in
order that men may have constant employment, it is indispensable that
work be planned and undertakings projected years in advance. Without an
intelligent forecast of enterprises large numbers of workmen must
periodically be relegated to idleness. Enterprises that take years to
complete must be contracted for in advance, and payments provided for.

A constant but unperceived rise in the value of the dollar with which
those payments must be made, baffles all plans, thwarts all calculation,
and destroys all equities between debtor and creditor. If we can not
intelligently regulate our money volume so as to maintain unchanging the
value of the money unit, if we can not preserve our people from the
blighting effects which an increase in the measuring power of the money
unit entails upon all industry, to what purpose is our boasted

By the increase of that measuring power all hopes are disappointed, all
purposes baffled, all efforts thwarted, all calculations defied. This
subtle enlargement in the measuring power of the unit of money (the
dollar) affects every class of the working community. Like a poisonous
drug in the human body, it permeates every vein, every artery, every
fiber and filament of the industrial structure. The debtor is fighting
for his life against an enemy he does not see, against an influence he
does not understand. For, while his calculations were well and
intelligently made, and the amount of his debts and the terms of his
contracts remain the same, the weight of all his obligations has been
increased by an insidious increase in the value of the money unit.


As to the benumbing consequences following a shrinkage in the volume of
money, the testimony of history is briefly reviewed in the report of the
Monetary Commission to which I have already referred, and from which I
read the following:

    At the Christian era the metallic money of the Roman Empire
    amounted to $1,800,000,000. By the end of the fifteenth century
    it had shrunk to less than $200,000,000. During this period a
    most extraordinary and baleful change took place in the condition
    of the world. Population dwindled and commerce, arts, wealth, and
    freedom all disappeared. The people were reduced by poverty and
    misery to the most degraded conditions of serfdom and slavery.
    The disintegration of society was almost complete. The conditions
    of life were so hard that individual selfishness was the only
    thing consistent with the instinct of self-preservation. All
    public spirit, all generous emotions, all the noble aspirations
    of man shriveled and disappeared as the volume of money shrunk
    and as prices fell.

    History records no such disastrous transition as that from the
    Roman Empire to the Dark Ages. Various explanations have been
    given of this entire breaking down of the frame-work of society,
    but it was certainly coincident with a shrinkage in the volume of
    money, which was also without historical parallel. The crumbling
    of institutions kept even step and pace with the shrinkage in the
    stock of money and the falling of prices. All other attendant
    circumstances than these last have occurred in other historical
    periods unaccompanied and unfollowed by any such mighty
    disasters. It is a suggestive coincidence that the first glimmer
    of light only came with the invention of bills of exchange and
    paper substitutes, through which the scanty stock of the precious
    metals was increased in efficiency. But not less than the
    energizing influence of Potosi and all the argosies of treasure
    from the New World were needed to arouse the Old World from its
    comatose sleep, to quicken the torpid limbs of industry, and to
    plume the leaden wings of commerce. It needed the heroic
    treatment of rising prices to enable society to reunite its
    shattered links, to shake off the shackles of feudalism, to
    relight and uplift the almost extinguished torch of civilization.
    That the disasters of the Dark Ages were caused by decreasing
    money and falling prices, and that the recovery therefrom and the
    comparative prosperity which followed the discovery of America
    were due to an increasing supply of the precious metals and
    rising prices, will not seem surprising or unreasonable when the
    noble functions of money are considered. Money is the great
    instrument of association, the very fiber of social organism, the
    vitalizing force of industry, the protoplasm of civilization, and
    as essential to its existence as oxygen is to animal life.
    Without money civilization could not have had a beginning; with a
    diminishing supply it must languish, and, unless relieved,
    finally perish.

    Symptoms of disasters similar to those which befell society
    during the Dark Ages were observable on every hand during the
    first half of this century. In 1809 the revolutionary troubles
    between Spain and her American colonies broke out. These troubles
    resulted in a great diminution in the production of the precious
    metals, which was quickly indicated by a fall in general prices.
    As already stated in this report, it is estimated that the
    purchasing power of the precious metals increased between 1809
    and 1848 fully 145 per cent., or, in other words, that the
    general range of prices was 60 per cent. lower in 1848 than it
    was in 1809. During this period there was no general
    demonetization of either metal and no important fluctuation in
    the relative value of the metals, and the supply was sufficient
    to keep their stock good against losses by accident and abrasion.
    But it was insufficient to keep the stock up to the proper
    correspondence with the increasing demand of advancing

    The world has rarely passed through a more gloomy period than
    this one. Again do we find falling prices and misery and
    destitution inseparable companions. The poverty and distress of
    the industrial masses were intense and universal, and, since the
    discovery of the mines of America, without a parallel. In England
    the suffering of the people found expression in demands upon
    Parliament for relief, in bread riots, and in immense Chartist
    demonstrations. The military arm of the nation had to be
    strengthened to prevent the all-pervading discontent from
    ripening into open revolt. On the Continent the fires of
    revolution smoldered everywhere, and blazed out at many points,
    threatening the overthrow of states and the subversion of social

    Whenever and wherever the mutterings of discontent were hushed by
    the fear of increased standing armies, the foundations of society
    were honey-combed by powerful secret political associations. The
    cause at work to produce this state of things was so subtle, and
    its advance so silent, that the masses were entirely ignorant of
    its nature. They had come to regard money as an institution fixed
    and immovable in value, and when the price of property and the
    wages of labor fell, they charged the fault, not to the money,
    but to the property and the employer. They were taught that the
    mischief was the result of overproduction. Never having observed
    that overproduction was complained of only when the money stock
    was decreasing, their prejudices were aroused against
    labor-saving machinery. They were angered at capital, because it
    either declined altogether to embark in industrial enterprises or
    would only embark in them upon the condition of employing labor
    at the most scanty remuneration. They forgot that falling prices
    compelled capital to avoid such enterprises on any other
    condition, and for the most part to avoid them entirely. They did
    not comprehend that money in shrinking volume was the prolific
    parent of enforced idleness and poverty, and that falling prices
    divorced money capital, from labor, but they none the less felt
    the paralyzing pressure of the shrinking metallic shroud that was
    closing around industry.

    The increased yield of the Russian gold fields in 1846 gave some
    relief and served as a parachute to the fall in prices, which
    might otherwise have resulted in a great catastrophe. But the
    enormous metallic supplies of California and Australia were all
    needed to give substantial and adequate relief. Great as these
    supplies were, their influence in raising prices was moderate and
    soon entirely arrested by the increasing populations and commerce
    which followed them. In the twenty-five years between 1850 and
    1876 the money stock of the world was more than doubled, and yet
    at no time during this period was the general level of prices
    raised more than 18 per cent. above the general level of 1848.

    A comparison of this effect of an increasing volume of money
    after 1848 with the effect of a decreasing volume between 1809
    and 1848 strikingly illustrates how largely different in degree
    is the influence upon prices of an increasing or decreasing
    volume of money. The decrease of the yield of the mines since
    about 1865, while population and commerce have been advancing,
    has already produced unmistakable symptoms of the same general
    distrust, non-employment of labor, and political and social
    disquiet, which have characterized all former periods of
    shrinking money.

The time that has elapsed since that report was written has but served
to verify and emphasize its statements.


It is a fact not disputed anywhere but universally admitted, that for
many years past the prices of all articles entering into general
consumption among the people have been steadily falling. It is obvious
that the industrial conditions prevailing since 1873 are but a
repetition of those above described as following 1809--with falling
prices, constant unrest, and universal discontent.

The following table, compiled from figures published by the Bureau of
Statistics of the Treasury Department, shows the average range of export
prices of the articles named for each year since 1873:

  _Annual average export prices of commodities of domestic production
  for each year from 1873 to 1889, inclusive._

   Year |   Corn   |  Wheat   |  Wheat   | Cotton | Leather| Illumi-
  ending|    per   |   per    |  flour   |(upland)|  per   | nating
   June,|  bushel. | bushel.  |   per    |  per   | pound. |  oils,
   30-- |          |          | barrel.  | pound. |        |refined,
        |          |          |          |        |        |   per
        |          |          |          |        |        | gallon.
   1873 |   .618   |  1.312   |  7.565   |  18.8  |  25.3  |  23.5
   1874 |   .719   |  1.428   |  7.144   |  15.4  |  25.2  |  17.3
   1875 |   .848   |  1.124   |  5.968   |  15.0  |  26.0  |  14.1
   1876 |   .672   |  1.242   |  6.216   |  12.9  |  26.2  |  14.0
   1877 |   .587   |  1.169   |  6.488   |  11.8  |  23.9  |  21.1
   1878 |   .562   |  1.338   |  6.358   |  11.1  |  21.8  |  14.4
   1879 |   .471   |  1.068   |  5.252   |   9.9  |  20.4  |  10.8
   1880 |   .543   |  1.245   |  5.878   |  11.5  |  23.3  |   8.6
   1881 |   .552   |  1.114   |  5.668   |  11.4  |  22.6  |  10.3
   1882 |   .668   |  1.185   |  6.149   |  11.4  |  20.9  |   9.1
   1883 |   .684   |  1.127   |  5.955   |  10.8  |  21.1  |   8.8
   1884 |   .611   |  1.066   |  5.588   |  10.5  |  20.6  |   9.2
   1885 |   .540   |   .862   |  4.897   |  10.6  |  19.8  |   8.7
   1886 |   .498   |   .870   |  4.699   |   9.9  |  19.9  |   8.7
   1887 |   .479   |   .890   |  4.510   |   9.5  |  18.7  |   7.8
   1888 |   .550   |   .853   |  4.579   |   9.8  |  17.3  |   7.9
   1889 |   .474   |   .897   |  4.832   |   9.9  |  16.6  |   7.8
   Year |  Bacon   |   Lard   |   Pork,  |   Beef,  |  Butter
  ending| and hams |   per    |  salted, |  salted, |   per
   June,|   per    |  pound.  |   per    |   per    |  pound.
   30-- |  pound.  |          |  pound.  |  pound.  |
        | _Cents._ | _Cents._ | _Cents._ | _Cents._ | _Cents._
   1873 |    8.8   |    9.2   |    7.8   |    7.7   |   21.1
   1874 |    9.6   |    9.4   |    8.2   |    8.2   |   25.0
   1875 |   11.4   |   13.8   |   10.1   |    8.7   |   23.7
   1876 |   12.1   |   13.3   |   10.6   |    8.7   |   23.9
   1877 |   10.8   |   10.9   |    9.0   |    7.5   |   20.6
   1878 |    8.7   |    8.8   |    6.8   |    7.7   |   18.0
   1879 |    6.9   |    7.0   |    5.7   |    6.3   |   14.2
   1880 |    6.7   |    7.4   |    6.1   |    6.4   |   17.1
   1881 |    8.2   |    9.3   |    7.7   |    6.5   |   19.8
   1882 |    9.9   |   11.6   |    9.0   |    8.5   |   19.3
   1883 |   11.2   |   11.9   |    9.9   |    8.9   |   18.6
   1884 |   10.2   |    9.5   |    7.9   |    7.6   |   18.2
   1885 |    9.2   |    7.9   |    7.2   |    7.5   |   16.8
   1886 |    7.5   |    6.9   |    5.9   |    6.0   |   15.6
   1887 |    7.9   |    7.1   |    6.6   |    5.4   |   15.8
   1888 |    8.6   |    7.7   |    7.4   |    5.3   |   18.3
   1889 |    8.6   |    8.6   |    7.4   |    5.5   |   16.5
   Year |  Cheese  |   Eggs   |  Starch  |  Sugar,  | Tobacco,
  ending|   per    |   per    |   per    | refined, |  leaf,
   June,|  pound.  |  dozen.  |  pound.  |   per    |   per
   30-- |          |          |          |  pound.  |  pound.
        | _Cents._ | _Cents._ | _Cents._ | _Cents._ | _Cents._
   1873 |   13.1   |   26.6   |    5.3   |   11.6   |   10.7
   1874 |   13.1   |   22.1   |    5.7   |   10.5   |    9.6
   1875 |   13.5   |   25.6   |    6.0   |   10.8   |   11.3
   1876 |   12.6   |   28.0   |    5.4   |   10.7   |   10.4
   1877 |   11.8   |   25.9   |    5.2   |   11.6   |   10.2
   1878 |   11.4   |   15.8   |    4.7   |   10.2   |    8.7
   1879 |    8.9   |   15.5   |    4.2   |    8.5   |    7.8
   1880 |    9.5   |   16.5   |    4.3   |    9.0   |    7.7
   1881 |   11.1   |   17.2   |    4.7   |    9.2   |    8.3
   1882 |   11.0   |   19.2   |    4.8   |    9.7   |    8.5
   1883 |   11.2   |   20.9   |    4.6   |    9.2   |    8.6
   1884 |   10.3   |   21.2   |    4.5   |    7.1   |    9.1
   1885 |    9.3   |   21.5   |    4.0   |    6.4   |    9.9
   1886 |    8.2   |   18.3   |    4.1   |    6.7   |    7.8
   1887 |    9.3   |   16.3   |    3.8   |    6.0   |    8.7
   1888 |    9.9   |   15.9   |    3.5   |    6.3   |    8.3
   1889 |    9.3   |   13.9   |    3.8   |    7.6   |    8.8

To show from another source the same general fact of the decline of
prices, I quote from an article published in the New York Tribune early
in 1886.

The New York Tribune is pretty good authority. These figures are
undoubtedly from the calculations and from the pen of Mr. Grosvenor, of
the editorial staff of that able journal, formerly editor and proprietor
of the "Public," whose estimates of prices have, in my judgment, been
more correctly made than those of any other statistician in the world.
The article is as follows:

    Quotations of about two hundred articles are compared since 1860,
    and the amount of money is ascertained which would purchase,
    at different dates, of these various articles, quantities
    corresponding as closely as possible to their ascertained
    consumption in 1880, the date of the last census. Among the
    articles compared are wheat, corn, oats, rye, barley, beans and
    pease, mess pork, bacon, ham, live hogs, lard, fresh beef, tallow,
    live sheep, poultry, butter, cheese, eggs, milk, hay, potatoes,
    turnips, cabbage, onions, apples, raisins, sugar, brown and
    crushed; molasses, coffee, tea, tobacco, whisky, malt and hops,
    mackerel, codfish, salt, rice, nutmegs, cloves, pepper, cotton,
    print-cloths and standard sheeting, wool of different qualities,
    blankets, carpets, flannels, leather, boots, shoes, hides, silk,
    India rubber, iron (pig and bar), nails, steel rails, coal, oil
    (crude and refined), tin and tin plates, copper, lead, hemp,
    lumber, spruce and pine, oak, ash, walnut, and white wood, lath,
    brick, lime, turpentine, linseed oil, soap, glass, paper, white
    lead, and twelve other kinds of paints, fertilizers, and over
    fifty kinds of drugs and chemicals.

      _Cost of products at different dates._

            Dates.         |  Cost in  | Price of | Cost in
                           | currency. |  gold.   |  gold.
      1860, May 1          |  $100.00  |  $100.00 | $100.00
      1865, November 1     |   174.77  |   145.87 |  119.81
      1866, May 1          |   157.60  |   125.12 |  126.04
      1866, November 1     |   170.31  |   146.25 |  117.82
      1871, November 1     |   122.03  |   112.00 |  108.95
      1872, May 1          |   137.13  |   112.50 |  121.81
      1873, November 1     |   115.14  |   108.50 |  106.01
      1874, May 1          |   122.77  |   112.87 |  108.77
      1875, January 1      |   113.01  |   112.37 |  100.37
      1876, October 1      |    97.30  |   110.00 |   88.45
      1877, May 1          |    99.29  |   106.75 |   93.01
      1878, May 1          |    82.09  |   100.37 |   81.81
      1878, October 18     |    77.94  |   100.37 |   77.65
      1879, November 1     |    93.48  |     --   |    --
      1880, January 1      |   103.42  |     --   |    --
      1881, January 1      |    95.98  |     --   |    --
      1882, May 16         |   106.59  |     --   |    --
      1883, March 13       |    97.82  |     --   |    --
      1883, November 1     |    88.71  |     --   |    --
      1884, January 1      |    88.37  |     --   |    --
      1884, November 21    |    78.47  |     --   |    --
      1885, January 1      |    79.66  |     --   |    --
      1885, May 9          |    80.22  |     --   |    --
      1885, August 22      |    74.56  |     --   |    --
      1885, November 1     |    75.35  |     --   |    --
      1885, Close          |    78.53  |     --   |    --

    It is not only clear from this comparison that the prices of 1885
    have been the lowest in our history for twenty-five years, but
    that there has been a general tendency toward lower prices. From
    1866 to 1871, and again from 1872 until 1885, prices fell quite
    steadily. Indeed, had not the short crop of 1881 caused a
    temporary advance in the spring of 1882, the range of January,
    1880, would have been the highest of the later period, and it
    might have been said that the present era of declining prices had
    continued with little intermission for six years. None will fail
    to observe how swift and sharp the advances have been--about 12
    per cent. from November, 1871, to May, 1872, and 25-1/2 per cent.
    from October, 1878, to January, 1880. But these spasmodic
    advances, by which the general tendency downward is interrupted,
    only serve to make it more clear that prices have been tending
    irresistibly toward a lower level than that of 1860, not only
    during the period of paper depreciation, but since gold has been
    the measure of value.

In order to show that the United States are not alone in their complaint
of falling prices, but that the complaint is universal, and in order
that we may have before us a broad view of the field of general prices,
I submit a table showing the relation to each other of the range of
prices from 1809 to 1849, by decades, based on the prices of fifty
leading articles of commerce, prepared by the distinguished Professor
Jevons and published in the London Economist for May 8, 1869.

Taking the range of prices of 1849 as a datum line (the range for that
year being the lowest of the century) Mr. Jevons works backward to 1809,
when the revolt of the South American colonies against the authority of
Spain shut off at a blow the supplies of the precious metals, and set on
foot a money famine from which the world knew no relief till the
discovery of the mines of California and Australia.

Professor Jevons's figures are as follows, the prices of 1849 being
represented by 100:

  _Relation of prices, 1809 to 1849, by decades, those for 1849 being
  rated at 100._

  1809      245
  1819      175
  1829      124
  1839      144
  1849      100

From these figures it will be observed that the fall from 1809 to 1849,
a period of forty years, was as 245 to 100, or 59 per cent.

By the next table which I submit, that of Dr. Soetbeer, it will be seen
that the general range of prices rose gradually from 1849 to 1873, in
the last of which years the figures bore to those of 1849 the relation
of 138 to 100. It has never been denied that this rise was due to the
increase in the world's money supply by the yield of the precious metals
from the mines of California and Australia, the effects of which,
however, as will be seen by the table, were not felt on prices till
1853--five years after John Marshall's discovery of the yellow metal in
the tail-race at Sutter's mills. Yet, because it interferes with the
pecuniary interests of a large and influential class, it is vehemently
denied that the fall of prices since 1873 is due to a decrease in the
volume of the money caused by the demonetization of silver in that year
throughout the western world.

From and after that year, as will be perceived by an examination of the
figures; in other words, from the year when one-half the world's money
supply was deprived of the money function, we find an almost
uninterrupted decline of prices. The figures of 1873 and 1885 will be
seen to bear to one another the relation of 138 to 108, or a fall of 22
per cent. in twelve years. Should the fall continue at that rate without
interruption--and there is no reason apparent why it should not, we
shall in forty years have witnessed a decline of 72 per cent. in the
general range of prices--a decline considerably greater than that from
1809 to 1849. And these are not the figures of bimetallists or silver
"theorists," but of pronounced advocates of the single standard of gold.
Where, I would inquire, is the fall of prices to stop?

Dr. Soetbeer's table represents the general average price of one-hundred
leading articles of commerce each year for a period of nearly forty
years. He takes as a basis the general range of gold prices prevailing
between 1847 and 1850, and calling that range 100, shows the relative
standing toward it of the general range of prices for subsequent years,
up to 1885.

  _Relation of prices by years from 1849 to 1885, the general range of
  prices of 1849 being rated at 100._

  1849  100.00
  1851  100.21
  1852  101.69
  1853  113.69
  1854  121.25
  1855  124.23
  1856  123.27
  1857  130.11
  1858  113.52
  1859  116.34
  1860  120.98
  1861  118.10
  1862  122.65
  1863  125.49
  1864  129.28
  1865  122.63
  1866  125.85
  1867  124.44
  1868  121.99
  1869  123.38
  1870  122.87
  1871  127.03
  1872  135.62

  1873  138.28

  1874  136.20
  1875  129.85
  1876  128.33
  1877  127.70
  1878  120.60
  1879  117.10
  1880  121.89
  1881  121.07
  1882  122.14
  1883  122.24
  1884  114.25
  1885  108.27

Mr. Sauerbeck, also an advocate of the gold standard, and whose work has
the approval of the Statistical Society, takes as a datum line the
prices ruling from 1867 to 1870. Rating those at 100 he finds that by
1873 prices had risen to 111, by 1886 they had fallen to 69, and by
September, 1887, to 68.7. He declares the average prices for the first
nine months of 1887 to have been the lowest reached for a hundred years.


The fact that the metals have separated considerably since 1873, and
that silver bullion now sells at less than par value of $1.29 per ounce,
is taken to signify that silver has fallen--not that gold has risen.
This proceeds from the assumption that whenever a change takes place in
the relation between gold and any other article the change must
necessarily be in the other article. This assumption, in turn, is based
on the absurd idea that calling gold a "standard" will insure it against

Among political economists it is a well-recognized principle that
neither gold or silver is exempt from the universal application of the
law of supply and demand. That law governs gold and silver, not only as
commodities, but as money, and governs as well all other kinds of money
that may be used. And while the advocate of the single gold standard is
at all times ready to concede the truth of this assertion as to silver,
he is confident that it does not and can not apply to gold; that the
economic law which makes supply and demand a regulator of value is
suspended as to gold.

That a metallic money, whether of gold or silver, is very far from being
stable is admitted by innumerable authorities, of whom I will cite only
a few.

Dr. Adam Smith, in his "Wealth of Nations," book 1, chapter 5, says:

    Gold and silver, like every other commodity, vary in their value.
    The discovery of the abundant mines of America reduced in the
    sixteenth century the value of gold and silver in Europe to about
    a third of what it had been before. This revolution in their
    value, though perhaps the greatest, is by no means the only one
    of which history gives some account.

And again:

    Increase the scarcity of gold to a certain degree and the
    smallest bit of it may be more precious than a diamond.

John Locke, "Considerations, etc., in relation to money" (published in
1691), says:

    The greater scarcity of money enhances its price and increases
    the scramble; there being nothing that does supply the want of
    it; the lessening of its quantity, therefore, always increases
    its price and makes an equal portion of it exchange for a greater
    of any other thing.

Prof. Francis A. Walker, "Money," etc., page 210, says:

    Gold and silver do, over long periods, undergo great changes of
    value and become in a high degree deceptive as a measure of the
    obligation of the debtor of the claim of the creditor. Thus
    Professor Jevons estimates that the value of gold fell between
    1789 and 1809, 46 per cent., that from 1809 to 1849 it rose 145
    per cent., while in twenty years after 1849 it fell again at
    least 20 per cent.

Jevons, "Money and Exchange," chapter 6, says:

    In respect to steadiness of value the metals are probably less
    satisfactory, regarded as a standard of value, than many other
    commodities, such as corn.

And again, in chapter 24 of the same work, he says:

    We are too much accustomed to look upon the value of gold as
    a fixed datum line in commerce; but in reality it is a very
    variable thing.

Sir Archibald Alison (England, in 1815 and 1845), says:

    The coining of gold and silver, which is universal in all
    civilised nations, and affixing to them one definite and
    permanent value by authority of law, has no effect whatever in
    preventing the fluctuations in the real value of the current coin
    of the realm.

Professor Laughlin, of Harvard, in his work on Political Economy (page
72), says:

    It is quite evident that the name dollar does not always have the
    same value, although people often think it does. We get into the
    habit of using names without thinking what they really mean. The
    23.22 grains in a gold dollar may be exchanged sometimes for
    more, sometimes for less, of other commodities. When it is
    exchanged for less, its value has fallen relatively to all other
    commodities, and, even if the name dollar remains the same, its
    value has fallen. One must then offer more dollars than before
    for the same commodities. That is, when money falls in value,
    prices rise; when money rises in value, prices fall.

    Now, we shall say a few words in regard to another function, a
    means of paying long contracts, or debts which run over a long
    term of years.

    Suppose that I loaned you in 1880, $1,000 for twenty years. In
    that year the $1,000 bought a certain quantity of corn, wheat,
    sugar, salt, wood, hats, and shoes. In 1900, when you are to pay
    me back the $1,000 in money, if prices have changed, you may give
    me back the same amount of money, but you will not return to me
    the same purchasing power over other things. If for some reason
    prices have fallen between 1880 and 1900, it will take less money
    to buy the same quantity as before of corn, wheat, etc. If so,
    the $1,000 you return me in 1900 will be of more value than the
    $1,000 I gave you, and it would be unjust to oblige you to give
    me more than you borrowed. If, on the other hand, prices have
    risen, then the $1,000 in money would buy me less than before, so
    that I should lose. * * * Hence, the value of money (gold or
    silver) does not remain the same for any length of time; and the
    precious metals, while they are very satisfactory for exchanges
    which do not take very long to complete, can not serve as a
    proper measure of value during a long term or years.

Ricardo, the greatest authority on the gold standard, the financial
writer, more highly regarded throughout the world than any other that
has ever appeared in Great Britain, whose logical utterances have never
failed to attract the attention of mankind, stated the true condition of
things in 1810, and advocated the true policy for Great Britain.

In his "Proposals for an Economical and Secure Currency," Ricardo makes
the following statement, which I commend to the careful attention of the
advocates of the single gold standard:

    While a standard is used, we are subject to only such a variation
    in the value of money as the standard itself is subject to; but
    against such variation there is no possible remedy, and late
    events have proved that, during periods of war, when gold and
    silver are used for the payment of large armies distant from
    home, those variations are much more considerable than has been
    generally allowed. This admission only proves that gold and
    silver are not so good a standard as they have been hitherto
    supposed--that they are themselves subject to greater variations
    than it is desirable a standard should be subject to. They are,
    however, the best with which we acquainted.

    If any other commodity less variable could be found, it might
    very properly be adopted as the future standard of our money,
    provided it had all the other qualities which fitted it for that
    purpose; but while these metals are the standard the currency
    should conform in value to them, and whenever it does not, and
    the market price of bullion is above the mint price, the currency
    is depreciated. This proposition is unanswered and is
    unanswerable. Much inconvenience arises from using two metals as
    a standard of our money; and it has long been a disputed point
    whether gold or silver should by law be made the principal or
    sole standard of money. In favor of gold it may be said, that its
    greater value under a small bulk eminently qualifies for a
    standard in an opulent country.

And I may here remark that it requires an opulent country to maintain
the single gold standard, and the country does maintain it at very great
expense. I do not wonder that he thought an opulent country, a creditor
country, the only one that ought to adopt it, for no other country can
afford to adopt it. But, like many people who in attempting to improve
their condition in society attempt luxuries and extravagances which they
can not maintain and which force them back into the ranks from which
they came, so nations in attempting to establish the gold standard may
find themselves reduced from opulence to poverty.

Ricardo continues:

    But this very quality subjects to greater variations of value
    during periods of war or extensive commercial discredit, when it
    is often collected and hoarded, and may be urged as an argument
    against its use. The only objection to the use of silver as the
    standard is its bulk, which renders it unfit for the large
    payments required in a wealthy country; but this objection is
    entirely removed by the substituting of paper money as the
    general circulation medium of the country. Silver, too, is much
    more steady in its value in consequence of its demand and supply
    being more regular; and, as all foreign countries regulate the
    value of their money by the value of silver, there can be no
    doubt that on the whole silver is preferable to gold as a
    standard, and should be permanently adopted for that purpose.

Innumerable additional citations from authors of repute could be adduced
to fortify this position.

It will thus be seen that the fluctuations in the value or purchasing
power of both gold and silver have always been admitted by scientific
writers. They were so well understood three centuries ago that in Queen
Elizabeth's reign (1576) the British Parliament directed that the rents
reserved in the long leases of certain college lands should be payable,
not in money, but in wheat. And at various times during the past seventy
years propositions have been formulated to substitute for gold and
silver as a standard of value for deferred payments, a tabular statement
of the prices of the principal articles of commerce, to be made by
official authority and published from time to time, by the average of
which the fluctuations of gold could be ascertained and proper allowance
made for them in the settlement of time transactions. Professor Jevons,
Prof. Francis A. Walker, and other political economists of note have
expressed approval of such a tabular standard for long-time contracts,
as securing greater equity than would gold as a measure of values.

Those who now assert that silver has fallen and that gold has not risen
in value arrive at this conclusion by a very safe process of reasoning.
First, to show that silver has fallen they measure it by gold alone,
without reference to the general range of prices; and then to prove that
gold has not risen they make it the measure of itself. An increase or
decrease of the value of either can not be ascertained by reference to
the other, and certainly not by constituting either of them a standard
by which to judge itself. It would of course be forever impossible to
show any change in the value of gold or silver, or of anything else,
measuring it by itself. It is only by looking at the relations which
both metals bear respectively to a considerable range of commodities
generally dealt in as well as to each other, that it can be ascertained
with certainty what has happened.

Not only upon consideration of all the facts I have given, but upon the
logic of the situation, it must be obvious that gold has risen and will
continue to rise in value as long as its volume decreases and the demand
for it increases. Since 1860, when 77 per cent. of the combined yield of
the two metals, it has diminished not only in relative proportion to the
yield of silver, but it has diminished absolutely. For the five years
ending with 1860 the yield of gold throughout the world was $137,000,000
a year; for the five years ending 1889 the yield was but $110,000,000 a
year. If, as claimed by the advocates of the single gold standard, an
increase in the yield of silver decreases the value of silver, by what
system of logic can they deny that a decrease in the supply of gold
increases the value of gold?

In a late issue of the London Economist, that of April 26, 1890, I find
an editorial article relating to the recent discussion on bimetallism in
the British House of Commons. That article comments somewhat sharply on
Mr. Smith's assertion that "a conspiracy had been formed among the
financial class in Europe and America to get rid of silver as
full-valued money in order to increase the value of gold, in which their
revenues are paid." In the course of his comments the editor, by
"confession and avoidance," admits our whole contention as to the rise
of gold and the fall, as a natural consequence, of the prices of
commodities. He says:

    It may not be amiss, however, to point out that the increase in
    the exchangeable value of gold has been by no means such a gain
    to the financial class as he in common with many others suppose;
    for advantage has been very largely taken of it to cut down the
    return upon the capital which the financial classes have
    invested. It has favored debt conversion schemes, and it has been
    one of the influences that have caused the rate of interest in
    general to decline so decidedly, that, all round, the yield of
    investments is now very appreciably lower than it was fifteen
    years ago. The idea that the creditor class have realized unmixed
    gains and the debtor class have suffered unmitigated losses by
    the alteration in the purchasing power of gold is thus altogether
    fallacious. There has in their case, as in all others, been a
    species of compulsory give and take. Each has gained and each has
    lost something, and now that the process of readjustment has been
    carried so far it would be unwise to the last degree to unsettle
    everything again by such legislation as the bimetallists propose.

The editor of the Economist is to be commended for at least one thing.
He does not quibble as to the most important point in the bimetallic
controversy. He frankly admits that gold has risen, and does not, as
some others do, attribute the fall of prices to improvements in methods
of production.

He also admits that coincidently with and caused by the rise in gold
there has been a great decline in the rates of interest, and, strangely,
claims that the debtor is compensated for the rise in the value of money
by the ability to convert the debt into one bearing a lower rate of
interest, or, as he calls it, resorting to "debt-conversion schemes."

He does not inform us how any compensation can be made to the the debtor
for the time the debt has been running, as to which it can not be
converted, nor for the enhanced amount exacted from the current earnings
of labor by the rise in the value of money to pay taxes and the expenses
of Government, nor for the loss entailed on the debtor whose property is
mortgaged on long time, where the holder of the mortgage refuses to
convert it into an obligation bearing a lower rate of interest than
originally contracted for. He suggests no method by which to make whole
those who have lost their property through sheriff's sale by reason of
falling prices and the rise in the value of money. Neither does he state
how long it will be before the next confiscation is to take place, by
reason of the continued operation of the cause that produced the first.
But he has been frank enough to concede (what is never disputed except
when the money question is under discussion) that there has been a rise
in the exchangeable value of gold, and conceded its natural sequence, a
fall in the rates of interest.


In order to justify their position it becomes necessary for the
advocates of continued demonetization of silver to insist that the fall
of prices is not due to the rise in the value of gold but to improved
methods of production.

Whatever the cause to which it is to be ascribed, the undoubted fact is
that a fall of prices throughout the western world set in concurrently
with the reduction of the world's money volume by the demonetization of
silver. It was well understood at the time by those who had given
consideration to the subject that demonetization alone would effect that
result. This is manifest from an article in the London Daily News, a
paper of exceedingly large circulation, quoted in the Journal of the
Statistical Society of England for 1873, page 395. Referring to the
adoption of the single gold standard by Germany the Daily News said:

    As the annual new supply of gold throughout the world is reckoned
    at little more than £20,000,000 ($100,000,000), and the usual
    demand for miscellaneous purposes is very large, it follows that,
    if the German Government perseveres in its policy, the strain upon
    the existing stocks and currencies of gold will be most severe.
    For a time, at least, unless the annual production of gold should
    suddenly increase, the money markets of the world are likely to be
    perturbed by this bullion scarcity, and the fall in the value of

which means the rise in prices that for some time had prevailed;

    of which so much has been heard, will be checked or reversed.

The yield of gold did not "suddenly increase," and the intelligent
prophecy of the Daily News was fully realized, not merely to the extent
of a check to the rising prices; (or, as it is styled by the Daily News,
a check to the "fall in the value of gold,") but to the extent of an
immediate rise in the value of that metal, and a persistent and
deplorable fall in the general range of prices.

This prophecy that the "fall in the value of gold" would be checked by
the demonetization of silver; or, better, reversed by it, was welcome
reading to the creditor and income classes of England and of the world.

That it was "reversed," and the value of gold appreciated, is as plain
as that; one being subtracted from two, there is but one for a

The immediate fall in prices of commodities was the natural, the
anticipated, and the deliberately intended result of that movement.

But we are now assured that this fall is not due to any monetary cause,
but to the greater efficiency of machinery in the production of

No advocate of an increased volume of money denies that in a few
departments of manufacture there have since 1873 been improvements
tending to economize labor and cheapen products; but they emphatically
deny and challenge proof that improvements of mere detail in the
manufacture of some articles will account for the extraordinary fall of
price since that time in almost every product of industry. We are also
told that the development of the system of transportation, both by land
and sea, have tended to lower the price of commodities to the consumers.
I grant it. But we had those improvements before 1873.

The inventions made between 1873 and 1890, the period of falling prices,
were no more important or radical in their effect on industry,--tended
no more to cheapen commodities, than did those from 1850 to 1873, the
period of rising prices. Indeed the inventions which preceded 1873 were
as a whole much greater in scope, more far-reaching in result, and more
revolutionary in their effects on industry, than those of the later
period. All the great basic improvements had been invented, and had been
incorporated with the industrial system of all civilized countries long
before 1873, if we except the electric light and the telephone. We have
had the steam engine, the cotton gin, and the spinning-jenny since the
last century; the railroad and the steam-ship since the '30's; the
telegraph, the mechanical reaper, steam-plow, and other agricultural
labor-saving devices since the '40's; the sewing machine since 1854, and
the Bessemer process and steel rail since 1857.

The forced construction into which their position drives the advocates
of the gold standard is well illustrated in a recent number of a
magazine of high standing in this country, in which I find the

    But if it be demurred, does not a debt incurred, say, ten years
    ago require to-day more wheat or iron for its satisfaction than
    the sum could have bought when first borrowed? Certainly, but the
    wheat or iron represents no more labor now then it did ten years
    ago, and its increase in quantity stands for the new efficiency
    which applied science has bestowed on toil.

Observe how deftly the writer places iron, in the manufacture of which
there have admittedly been some improvements, in the same category with
wheat, in the production of which the improvements within any recent
period have been of the most trifling character. It will be exceedingly
difficult to convince the farmers of this country, whose mortgages are
eating up the proceeds of their labor, that the enormous decrease in the
debt-paying power of their products is made up to them in "the new
efficiency which applied science has bestowed on toil."

As well might it be maintained that the rise of prices and the
concurrent wave of universal prosperity, experienced after 1849, was not
due to the increase of the world's money stock from the mines of
California and Australia, but to some sudden, unaccountable, and
complete loss of all improvements theretofore attained in the arts and
industries of the world.


But it is said that checks, notes, drafts, bills of exchange, and the
facilities afforded by clearing-houses effect such economy in the use of
money that it goes farther now than formerly, and that therefore so
large a volume of money as was formerly needed is not needed at present.
It is sought thus to escape the conclusion that the fall of prices is
the result of a shrinkage of the volume of money, or at least to imply
that if the money volume has been shrinking the agencies mentioned have
served to mitigate, if not entirely to counteract, the effects of such
shrinkage. This is in substance to claim that however contracted the
money volume of a country may become, the system of checks and
clearing-houses--on the principle of the compensating balance--will
expand in a proportion directly corresponding to the contraction of the
currency; that the greater the reduction of the volume of money in the
country the greater the increase in the transactions of the

Nothing more absurd could be conceived. If this view were correct, it
would make no difference whether the amount of money in circulation were
large or small; a million dollars would be as efficacious as
$100,000,000, and even one dollar as effective as a million dollars; and
if we suppose the last dollar to have disappeared from circulation,
then, according to the sweeping and pretentious claims set up for the
clearing-house system, we could dispense altogether with the use of
money and rely exclusively on checks, drafts, and bills of exchange.

That checks and clearing-houses are a great convenience to commerce is
not denied. They serve to a certain extent to make more effective the
money volume of a country. By the clearing house system of off-setting
the demands of the several banks, one against the other, and requiring
payment in cash of the balances only, large amounts of loans may remain
undisturbed and greater stability of industrial conditions be secured.

Clearing-houses, however, were not established primarily for the
convenience of commerce, but for the profit of bankers. Whatever amounts
of money are economized by means of those institutions bring
compensation, by way of interest, to the banks. We may, therefore, rely
upon their being utilized to the utmost under all circumstances.

But, however much checks and clearing-houses may economize the use of
money, they are no novel devices. They are not some untried and
newly-invented instrumentalities. Checks have been in use ever since the
invention of banks. The clearing-house system was established in this
country in 1853. Contributing, as it does contribute, to the pecuniary
profit of the banks by making possible an economy in the use of invested
money, which the banks have loaned out, and on which they are drawing
interest, the system has grown with the growth of the business of the
country. It will undoubtedly continue to grow, but with no greater
acceleration than population and business will warrant.

As it has been a part of the banking machinery of the country for nearly
forty years, and during that period has been utilized to the utmost, the
conditions of its existence and utilization have long since become
static conditions. The demands for currency have borne relation to the
needs of business, with clearing-house facilities in full sight and
operation; and at all seasons, in the adjustment of prices, those
facilities have had full force and effect. Assuming that at any given
period the business of the country were conducted with a given volume of
money, _plus_ a certain volume of clearing house exchanges, then, at a
later period, an increase of business would demand an increase in the
volume of money, _plus_ a proportionate increase in the volume of
clearing-house exchanges; having had this system in full and effective
use for forty years, it is as absurd to ascribe the _fall_ of prices in
the last half of that period to any economy in the use of money
effected by the clearing-house system as it would be to ascribe to the
same cause the directly opposite effect--the _rise_ of prices--that took
place in the first half of the same period.


If further proof were needed that gold has risen in value, it is, as I
maintain, to be found in the coincident fact of a decrease of rates of
interest on first-class securities. That decrease has kept even step and
pace with the rise in the value of money.

The rise in the value of gold, as shown by comparison with large numbers
of articles of commerce, has been between 35 and 40 per cent. The rate
of interest on gilt-edged securities shows a corresponding decline. But
unfortunately for the struggling people of the country, the fall in the
rate of interest on farm mortgages and on property remote from money
centers has been nothing like so great, nor has it been so great as the
fall in the price of agricultural lands, and in the products of labor.

I hold, therefore, that a new axiom should be added to the science of
political economy; namely, that as the purchasing power of money
increases, its income producing power decreases, and in about the same
ratio; and conversely, when the purchasing power of money decreases, its
income-producing power increases. In other words, when prices rise
interest rises; when prices fall interest falls. When money is
increasing in volume and decreasing in value, prices rise, and its
investment in productive enterprises becomes more profitable, and as a
consequence interest rises. When it is decreasing in volume and
consequently increasing in value, prices fall, investment in property
and productive enterprises become precarious and unprofitable, and, as a
consequence, it avoids them, and seeks investment in bonds and
gilt-edged securities, aptly termed "money-futures," which for years
have been increasing and continue to increase.

Some thirteen years ago I indulged in a little prophecy concerning the
rates of interest. I take no great credit to myself for it, but in
1877--four years after the demonetization of silver--before the rates of
interest had materially fallen, and when the same contention was made
that is made now, namely, that money was cheap because interest was low,
and that the policies of the country were wise because our credit stood
on such a high plane, I submitted to Congress the report of the Monetary
Commission, from which I quote:

    Money can be borrowed readily only upon such securities as bonds
    which are based on the unlimited tax-levying power of the
    Government, or upon the bonds and stocks of first-class
    trunk-lines of railroad corporations, whose freight and fare rates
    are practically a tax upon the entire population and resources of
    the regions which they traverse and supply. The competition among
    capitalists to loan money on these more ample securities has
    become very keen, and such securities command money at
    unprecedentedly low rates. These low and lowering rates of
    interest, instead of denoting financial strength and industrial
    prosperity, are a gauge of increasing prostration. Large
    accumulations of money in financial centers, instead of being
    caused by the overflow of a healthful circulation, or even a proof
    of a sufficient circulation, are unmistakable evidence of a
    congested condition caused by a decreasing and insufficient
    circulation. The readiness with which Government bonds bearing a
    very low rate of interest are taken, instead of showing that the
    credit of the Government has improved, is melancholy evidence of
    the prostrated condition to which industry and trade have been

    There need be no haste in refunding the public debt at the rates
    now proposed and considered low. Unless the progress of the
    commercial world in the policy of contracting money by
    demonetizing silver is checked, bonds bearing a much lower rate of
    interest than any yet offered will be gladly accepted by
    capitalists here and in Europe. When the money stock is
    diminishing and prices are falling, the lender not only receives
    interest, but finds a profit in the greatly increased value of the
    principal when it is returned to him. A loan of money made in
    1809, if repaid in 1848, would have been repaid with an addition
    of 145 per cent. in the purchasing power of principal and
    interest, besides all the interest paid. Those who have loaned
    money to this Government since 1861 have already received nearly
    as much in the increased value of their principal as in interest,
    and all the probabilities are, in respect to the four per cent.
    thirty-year national bonds now being negotiated, if they are
    redeemed in gold, that more profit will be made by the
    augmentation in the value of principal through interest. Indeed
    the signs of the times are, that the bonds of a country possessing
    the unbounded resources and stable institutions of the United
    States, payable in gold at the end of thirty years without any
    interest whatever, would, through the increase of the value of
    that metal, prove a most profitable investment.

All the facts of the situation to-day fully bear out the statements I
then made.

So determined are the advocates of the single gold standard in defending
the wisdom of its maintenance that facts whose existence would at
ordinary times be readily admitted, are, during a discussion of the
money question, pointedly denied. For example, within the past few weeks
we have seen in various eastern newspaper contributions from prominent
writers taking direct issue with the advocates of silver as to the
prevalence of general distress throughout the country. They declare that
there is no such distress, assert that they have looked for it in vain,
and derisively inquire where it is.

Perhaps the best authority I can cite in response to this inquiry is the
principal commercial daily journal of the east, the New York Journal of
Commerce, itself one of the most ardent and uncompromising advocates of
the gold standard. In an editorial article in its issue of January 11,
1890, that journal said:


    The public have been startled by the announcement that during the
    year 1889 there were 11,719 business failures in the United
    States, against 10,587 in 1888 and 9,740 in 1887. The estimated
    liabilities of last year's insolvents were $140,359,000 and the
    assets were $70,599,000, against $120,242,000 liabilities and
    $61,999,000 assets for the failures of the previous year. Thus the
    failures in 1889 were more in number and far greater in
    liabilities than for 1888, and the proportion of assets to the
    obligations shows that the total insolvency was more disastrous.
    Why in a season of profound peace, with no blighting frosts or
    withering droughts, and the most abundant yield from the field,
    forest, and mine so many in business have gone to the wall, no one
    seems able to answer. Many have tried their hand at a solution of
    the problem, and not one, as far as we can discover, has satisfied
    even himself with the result of his investigations.


In order to ascertain whether silver really has or has not fallen in
value, it is necessary that all the facts be taken into account and the
situation looked at from a correct point of view. If a person be seated
in a boat that is headed to the stream and wishes to test whether or not
he is making headway he must keep in view not the stream, but the shore.
The occupant of a railroad car who observes a moving train on a
contiguous and parallel track, frequently thinks his own train at a
stand-still, when in fact it may be in motion.

Whenever a rise or fall appears to take place in the price of any one
article or commodity, that is to say whenever a difference takes place
in the relation which that article bears to money--all other commodities
remaining unchanged--such difference must naturally and properly be
attributed to changed conditions affecting the commodity, and not to a
change in the value of money. But wherever there is a fall in prices
throughout the whole range of commodities then it is clear that this
change is mainly due to a change in the value of money. Such however is
the force of education and habit that the masses of the people are slow
to suspect any change in the standard by which they have been accustomed
to gauge or measure all values. Indeed they find it difficult to
understand how under any circumstances any change can take place in it.
Having their eyes fixed on the standard, and on that alone, they
naturally attribute to the articles measured, and not to the standard,
any difference that may seem to arise in the relation they bear to each

But the apparent is not always the real. Nothing seems more warranted by
the evidence of our senses than that the earth is a stationary object,
while the sun revolves around it. For thousands of years the world was
convinced of the truth of the geocentric theory of the universe, and
millions of men have lived and died in the confident belief that this
planet was immovably fixed in space, while the sun was a rolling and
ever-shifting body. Even yet, among the mass of mankind, so ever-present
is this impression, derived from ocular demonstration, that in spite of
the declarations of science, the world continues in common use the
phrases which originally described the process that took place, as men
understood it; hence we speak of the "rising" and the "setting" of the
sun. In the same way we speak of the rise or fall in the value of
commodities, without being particular to note whether the change that
has taken place is strictly a change in the value of the article itself
or a change in the money with which its value is measured. Perhaps I can
best illustrate my meaning by an allegory:


In an ancient village there once stood a gold clock, which, ever since
the invention of clocks had been the measure of time for the people of
that village. They were proud of its beauty, its workmanship, its
musical stroke, and the unfailing regularity with which it heralded the
passing hours. This clock had been endeared to all the inhabitants of
the village by the hallowed associations with which it was identified.
Generation after generation it had called the children from far and wide
to attend the village school, its fresh morning peal had set the honest
villagers to labor; its noon-day notes had called them to refreshment;
its welcome evening chime had summoned them to rest. From time
immemorial, on all festive occasions, it had rung out its merry tones to
assemble the young people on the green; and on the Sabbath it had
advertised to all the countryside the hour of worship in the village
church. So perfect was its mechanism that it never needed repair. So
proud were the people of this wonderful clock that it became the
standard for all the country round about, and the time which it kept
came to be known as the gold standard of time, which was universally
admitted to be correct and unchanging.

In the course of time there wandered that way a queer character, a
clockmaker, who being fully instructed in the inner workings of
time-tellers, and not having inherited the traditions of that village,
did not regard this clock with the veneration accorded to it by the
natives. To their astonishment he denied that there was really any such
thing as a gold standard of time; and in order to prove that the
material, gold, did not monopolize all the qualities characteristic of
clocks, he placed alongside the gold clock, another clock, of silver,
and set both clocks at 12 noon. For a long time the clocks ran along in
almost perfect accord, their only disagreement being that of an
occasional second or two, and even that disagreement only at rare
intervals, such as might naturally occur with the best of clocks. But
the Council of the village, in their admiration for the gold clock,
passed an ordinance requiring that all the weights (the motive power) of
the silver clock, except one, be removed from it, and attached to those
of the gold clock. Instantly the clocks began to fall apart, and one
day, as the sun was passing the meridian, the hands of the gold clock
were observed to indicate the hour of 1, while those of the silver clock
indicated 12.15. At this everybody in the village ridiculed the silver
clock, derided the silver standard, and hurled epithets at the
individual who had had the temerity to doubt the infallibility of the
gold standard.

Finally, the divergence between the clocks went so far that it was noon
by the gold standard when it was only 6 a. m. by the silver standard, so
that those who were guided by the gold standard, not withstanding that
it was yet the gray of the morning, insisted on eating their mid-day
meal, because the gold standard indicated that it must be noon. And when
the sun was high in the heavens, and its light was shining warm and
refulgent on the dusty streets of the village, those who observed the
gold standard had already eaten supper and were preparing for bed.

But this state of things could not last. It was clear that the
difference between the standards must be reconciled, or all industry
would be disarranged and the village ruined.

Discussion was rife among the villagers as to the cause of the
difference. Some said the silver clock had lost time; others that both
clocks had lost time, but the silver clock more than the gold; while
others again asserted that both clocks had gained time, but that the
gold clock had gained more than the silver clock.

While this discussion was at its height a philosopher came along and
observing the excitement on the subject remarked, "By measuring two
things, one against the other, you can never arrive at any determination
as to which has changed. Instead of disputing as to whether one clock
has lost or another gained would it not be well to consult the sun and
the stars and ascertain exactly what has happened."

Some demurred to this because, as they asserted, the gold standard was
unchanging and was always right no matter how much it might seem to be
wrong; others agreed that the philosopher's advice should be taken. Upon
consulting the sun and the stars it was discovered that what had
happened was that both clocks had gained in time but that the gain of
the silver clock had been very slight, while that of the gold clock had
been so great as to disturb all industry and destroy all correct sense
of time.

Notwithstanding this demonstration, there were many who adhered to the
belief that the gold standard was correct and unchanging, and insisted
that what appeared to be its aberrations were not in reality due to any
fault of the gold clock, but to some convulsion of nature by which the
solar system had been disarranged and the planets made to move
irregularly in their orbits.

Some of the people also remembered having heard at the village inn, from
travellers returning from the East, that silver clocks were the standard
of time in India and other barbarous countries, while in countries of a
more advanced civilization gold clocks were the standard. They therefore
feared that the use of the silver clock might have the effect of
degrading the civilization of the village by placing it alongside India
and other barbarous countries. And although the great mass of the people
really believed, from the demonstration made, that the silver standard
of time was the better one, yet this objection was so momentous that
they were puzzled what course to pursue, and at last advices were
consulting the manufacturers of gold clocks as to what was best to be

Now our gold standard men are in the position of those who first refuse
to look at anything beyond the two things, gold and silver, to see what
has happened, and who, when it is finally demonstrated that all other
things retain their former relations to silver, still persist that the
law which makes gold an unchanging standard of measure is more immutable
than that which holds the stars in their courses. If they will compare
gold and silver with commodities in general, to see how the metals have
maintained their relations, not to one another but to all other things,
they will find that instead of a fall having taken place in the value of
silver, the change that has really taken place is a rise in the value of
both gold and silver, the rise in silver being relatively slight while
that of gold has been ruinously great. And those who do not shut their
eyes to the truth must see that the change of relation between the
metals has been effected by depriving silver of its legal-tender
function, as the want of accord between the clocks was brought about by
depriving the silver clock of a portion of its motive power--the
weights. The only thing that has prevented a greater divergency between
the metals is the limited coinage by the United States--the single
weight that, withheld from the gold clock, prevented its more ruinous


If I can show that for a period of seventeen years, since its
demonetization in 1873, silver has lost none of its purchasing power,
none of its command over commodities; that is to say, if I can show
that 412-1/2 grains of silver to-day, uncoined, and shorn by hostile
legislation of its principal element of value--the money use--will buy
as much as would 412-1/2 grains of silver in 1873 (when our silver
dollar bore a premium over gold) of all the articles that enter into the
daily consumption of the people, it must be manifest that silver has not
fallen in value.

I present a table which I shall ask to have inserted in the RECORD as
part of my remarks, showing the purchasing power of 412-1/2 grains of
silver, nine-tenths fine, in 1873 and 1890, respectively, so far as
concerns several leading articles of daily consumption.

The table is as follows:

  _Comparative purchasing power of 412-1/2 grains silver,
  nine-tenths fine, in 1873 and 1890, respectively._

   412-1/2 grains silver would buy-- | 1873. | 1890.
   Wheat                    bushels  |  0.87 |  0.88
   Corn                        do    |  1.84 |  1.97
   Cotton                    pounds  |  5.32 |  6.71
   Beef, mess               barrels  |  0.05 |  0.05
   Pork, mess                  do    |  0.07 |  0.06
   Lard                      pounds  | 12.89 | 11.75
   Butter                      do    |  5.40 |  4.63
   Cheese                      do    |  8.69 |  6.94
   Sugar                       do    |  9.80 | 10.34
   Eggs                      dozen   |  4.27 |  5.38

From this table it conclusively appears that while in 1873 the standard
silver dollar of 412-1/2 grains, which then bore a premium over the gold
dollar, would purchase four-fifths of a bushel of wheat; to-day the same
quantity of silver, without the advantage of coinage and merely as
bullion, will also buy four-fifths of a bushel of wheat--the only
difference between the figures for the two years being that at the
present time 412-1/2 grains of silver bullion, as will be seen by the
table, will buy a fraction of a bushel more than would 412-1/2 grains of
coined silver in 1873.

If, then, silver has fallen, it is manifestly not in its relation to

By the same table it is shown that the silver dollar of 1873, containing
412-1/2 grains of silver, nine-tenths fine, would purchase one and
eight-tenths bushels of corn; in 1890, a like number of grains of
silver, uncoined and estimated at its gold value, will purchase one and
nine-tenths bushels of corn. Here again the advantage is slightly in
favor of the 412-1/2 grains of silver bullion of 1890. This shows
conclusively that silver has not fallen in its relation to corn.

The figures of the same table show that in 1873 a coined silver dollar
of 412-1/2 grains would buy 5-1/3 pounds of cotton; to-day 412-1/2
grains of uncoined silver will buy 6-3/4 pounds of cotton. From this it
appears that silver has not fallen relatively to cotton, the great
staple of universal use, but that, on the contrary, it has advanced
somewhat in its purchasing power when compared with that article.

In order to present the question from another point of view I submit
another table showing the number of grains of silver that are required
in 1890 and the number which were required in 1873 to buy a bushel of
wheat, a bushel of corn, &c., by which it will even more clearly appear
that silver has not fallen in value in respect to commodities.

  _Comparative purchasing power of silver bullion, in grains nine-tenths
  fine, in 1873 and 1890, respectively._

                              |   1873.   |   1890.
           Articles.          |   Legal   | Commodity.
                              |  tender.  |
                              | _Grains   | _Grains
                              |  silver._ |  silver._
  Wheat            per bushel |    474.3  |   468
  Corn                   do   |    223.9  |   209.25
  Cotton            per pound |     77.55 |    61.42
  Beef, mess       per barrel |  8,662.5  | 7,560
  Pork, mess             do   |  5,465.62 | 6,750
  Lard              per pound |     31.97 |    35.1
  Butter                 do   |     76.31 |    89.1
  Cheese                 do   |     47.44 |    59.4
  Sugar, refined         do   |     42.07 |    39.82
  Eggs              per dozen |     96.52 |    76.68

From this table it will be seen that in 1873 it required 474 grains of
standard silver, in the form of coined dollars, to buy one bushel of
wheat; in 1890, only 468 grains of standard silver (and that merely in
bullion form, or in other words, at its market value) are required to
buy a bushel of wheat. This does not show that silver has fallen in
value, in its relation to wheat, but, on the contrary, that it has risen
in value.

In 1873 it required 224 grains of silver to buy a bushel of corn; to-day
only 209 grains of silver are required to buy the same quantity. These
figures fail to prove that silver has fallen in value, in its relation
to corn. On the contrary, again, it has risen.

In 1873 a pound of cotton could not be had for less than 77-1/2 grains
of silver; to-day the same pound of cotton can be bought for 61 grains
of silver. Silver, therefore, has not fallen, but risen in value in its
relation to cotton.

In 1873 96 grains of silver were required to buy one dozen eggs; to-day
only 76 grains of silver are required to buy the same quantity of eggs.
Silver therefore has not fallen but risen in value, in its relation to

These comparisons might be continued with the same results as to a great
majority of the articles entering into general use.

These figures demonstrate that in its relation to all commodities that
enter into the daily consumption, silver has not fallen in value, but,
as is clearly seen, while holding a remarkably steady ratio to
commodities, has slightly increased in value, as is shown by the fact
that a less number of grains of the metal are to-day required to
purchase the same quantity of the commodities mentioned than were
required in 1873.

In relation to what, then, is it that silver has fallen? As it has not
fallen in relation to commodities, there remains but one thing in
relation to which it can be said to have fallen, and that one thing is
gold. The phrase "the fall of silver" is the ingenious and cunning
invention by which it is sought to cast on that metal the discredit of
depreciation rather than subject gold to the suspicion of any change
whatever. The term to correctly describe what has taken place would be
"the rise of gold;" but that term is scrupulously avoided, as implying
that gold does not remain immovably fixed. That gold has risen, however,
admits of no doubt, except to those who willfully shut their eyes to
facts of common observation. The true test of the increasing or
decreasing value of any one thing is not to compare it with any other
one thing, but with a large range of commodities generally dealt in. It
is not of so much importance to know how much gold can be bought with a
given amount of silver, as it is to know how much bread, how much meat,
and how much clothing can be bought, and how much of all the things that
are necessary to the comfort and well-being of the people can be bought
with that amount of silver.


In order to demonstrate that gold has risen, I will bring side by side
the gold prices of a number of leading commodities of commerce in 1873
and 1889, respectively, and the amount in silver bullion that in 1889
would purchase an equal quantity of the same commodities, by a table
prepared at my request by the Bureau of Statistics of the Treasury

  _Average export prices of the following named domestic commodities
  for the years ending June 30, 1873 and 1889._

                     |          |   Average price of the year ending
                     |          |              June 30--
                     |          +--------------------+------------------
      Commodities.   |  Unit of |        1873.       |      1889.
                     | quantity.+-----------+--------+--------+---------
                     |          |           |        |        |   In
                     |          |    In     |   In   |   In   | silver
                     |          | currency. |  gold. |  gold. | bullion.
  Bacon and hams     |  Pounds  |  $0.088   | $0.077 | $0.084 | $0.108
  Butter             |   do     |    .211   |   .184 |   .166 |   .212
  Cheese             |   do     |    .130   |   .113 |   .092 |   .118
  Corn               |  Bushels |    .617   |   .539 |   .508 |   .650
  Cotton:            |          |           |        |        |
    Unmanufactured,  |  Pounds  |    .188   |   .164 |   .099 |   .127
      not sea Island |          |           |        |        |
    Cloth, colored   |  Yards   |    .166   |   .145 |   .065 |   .083
    Cloth, uncolored |   do     |    .162   |   .142 |   .068 |   .087
  Iron and steel:    |          |           |        |        |
    Bar-iron         |  Cwt     |   5.480   |  4.784 |  3.183 |  4.074
    Pig-iron         |   do     |   2.498   |  2.181 |   .953 |  1.220
    Railroad-bars    |   do     |   4.114   |  3.592 |  2.169 |  2.776
  Lard               |  Pounds  |    .092   |   .080 |   .076 |   .097
  Leather            |   do     |    .253   |   .221 |   .185 |   .237
  Rice               |   do     |    .071   |   .062 |   .055 |   .070
  Sugar:             |          |           |        |        |
    Brown            |  Pounds  |    .092   |   .080 |   .056 |   .072
    Refined          |   do     |    .116   |   .101 |   .066 |   .084
  Wheat              |  Bushels |   1.312   |  1.145 |   .874 |  1.119
  Wheat-flour        |  Barrels |   7.565   |  6.604 |  4.703 |  6.020

What does an examination of this table show? It shows beyond dispute
that gold has risen in value.

A bushel of wheat that, according to the figures of the Bureau of
Statistics cost $1.14 in gold or silver in 1873, and which, as will be
seen by the table, still commands $1.12 in silver bullion, will to-day
bring only 87 cents in gold.

A pound of cotton that in 1873 cost the purchaser, in gold or silver, 16
cents, and which still commands 13 cents in silver bullion, will bring
only 10 cents in gold.

A pound of cheese that in 1873 cost the purchaser 11-1/3 cents in gold
or silver, and which now brings 12 cents in silver bullion, will bring
only 9 cents in gold.

A barrel of flour which in 1873 cost the purchaser $6.60 in gold or
silver, and which to-day commands $6.02 in silver bullion, will bring
but $4.70 in gold.

A pound of butter that in 1873 brought 18.4 cents in gold or silver, and
now commands 20.8 cents in silver bullion, will bring but 16.6 cents in

Notwithstanding that 412-1/2 grains of uncoined silver will to-day buy
as much of the leading articles of commerce as the coined gold dollar
would buy in 1873, yet the advocates of the gold standard characterize
it as a 72-cent dollar. Then the gold dollar of 1873 was a 72-cent
dollar. If the gold dollar of to-day be an honest and equitable dollar,
that of 1873, which was worth much less, was a swindling and dishonest
one; and if gold continues to advance as it has been advancing, and with
the declining output of that metal there is no reason why it should
not, it will be but a short time before any other kind of dollar whose
value may be equal to that of the present gold dollar will be
stigmatized as a swindling 72-cent dollar. There never was a dollar
coined that did not legally and practically contain 100 cents. But the
creditors stigmatize a dollar of the value of the gold and silver dollar
of 1873 as a 72-cent dollar. May not the debtors, with much more
propriety, denounce the gold dollar of to-day as a 140-cent dollar?

According to the admissions of the royal commission of England, the gold
dollar of to-day is to the producers of this country, measured by their
products, already at a premium of between 30 and 40 per cent. over the
gold dollar of 1873. The advocates of the gold standard have no sympathy
with our farmers and manufacturers who have to pay, in commodities, a
premium of 30 to 40 per cent. on gold, to meet their engagements, but
express extreme anxiety at the bare possibility that a few importers
might have to pay even a small premium in any form. They insist that the
money system of a population of 65,000,000, shall, like an inverted
pyramid, be made to rest upon its apex in order to enable a few
importers, most of whom are residents of foreign countries, to make
their payments abroad in gold.

Verily, Mr. President, the single gold standard is an expensive luxury
for our people to maintain.

Those who deride silver as a money-metal indulge in feeble attempts at
sarcasm by inquiring why we do not advocate the use of tin and brass as
money. They speak and write as though the idea of using silver as money
were a recent discovery or invention of people engaged in silver mining.
They also ignore the fact that the standard silver dollar of the United
States, which, with much satisfaction, they stigmatize as a 72-cent
dollar, requires a gold dollar to obtain it. It is worth a gold dollar
in London, in Berlin, in Vienna, in Saint Petersburg, in Madrid, in
Havana, and in all countries having commercial relations with the United
States. It can at once be exchanged into the money of any country with
only the slight deduction of cost of shipment to this country--as is the
case in the United States with notes of the Bank of England, which are
redeemable in gold.

Our silver dollar is not money in foreign countries--and it is to our
advantage that it is not--for were it money anywhere else than in this
country, we could not rely on its remaining here to maintain that
steadiness of prices indispensable to prosperity. But if any of our
silver dollars are found abroad, let no one suppose he can get them by
tendering 412-1/2 grains of silver bullion for each dollar. He will find
it will cost him precisely as much gold as it passes for in the United


If a cotton planter in 1873 owed $10,000 he could then have paid it with
60,975 pounds of cotton. To-day, by reason of the increased command
which gold has over commodities, it would take 101,010 pounds of cotton
to pay that $10,000; not withstanding that the money in which the debtor
has paid the interest has each year become more valuable than it was at
the time he contracted to pay it.

The cotton manufacturer of the East who in 1873 owed $10,000 could then
have paid it with 70,422 yards of uncolored cotton cloth; to-day owing
to the rise in the value of gold it would require 147,059 yards to pay
that debt, without taking into account the amount lost by the debtor in
the greater sacrifice he had year by year to make to pay the interest.

The farmer of the North and West who in 1873 owed $10,000 could then
have paid it with 8,733 bushels of wheat; to-day it would require 11,446
bushels of wheat to liquidate that debt, though he, too, has year by
year been "cinched" through the progressive increase in the value of the
money in which the interest has been paid. Or he could, in 1873, have
paid his debt with 1,514 barrels of flour; to-day it would take 2,126
barrels of flour to pay the same debt.

The property of the country is fast passing into the hands of the
creditors, and if the iniquitous system is not reversed the condition
of our American farmers will be that of the farmers of gold-standard
countries. Instead of owning their farms they will be tenants and
rent-payers--a condition but little in advance of that which prevailed
in feudal days.

Machiavelli, describing a turbulent period in the history of Florence,

    The people perished, but the brigands throve.

The brigandage of the Middle Ages, whether in Italy or elsewhere, was a
criminal defiance of law, but it was pursued at some risk, and under
manifest disadvantages. The brigand took his life in his hands. He knew
that his calling was unlawful; and, although ruthless in his work, the
method by which he exacted ransom of his occasional victim was less
destructive to the prosperity of the community than the legalized
brigandage of to-day by which, through a vicious system of money, the
great mass of the people are despoiled of their property. The
distinguishing characteristic of the brigandage of the nineteenth
century is that it scrupulously observes all legal forms, and is
conducted in the name of honor, honesty, good morals and "sound
finance." Mortgages are foreclosed only in accordance with law, and the
unearned increment which results from the increased and increasing value
of the money is transferred from the debtor to the creditor, with
punctilious regard for the statutes.

The demands of the brigand were enforced with guns and pistols; those of
the creditor are enforced with bonds and mortgages; both exactions cruel
and unjust, one by violence, the other by law. But, in the latter case,
so indirect is the method of operation that many of those who are
benefited by it are unaware of the perpetration of any wrong. So subtle
is the process that the change seems to be only a change in the price of
commodities, and thousands of men who would scorn consciously to exact
from any one more than a just return for money loaned are beneficiaries
of this vicious and ruinous system.

With regard to the great body of the working masses it is sometimes said
they have no cause for complaint, that their condition now is better
than ever before.

But, Mr. President, it is not enough that men are better off than they
have been. When we reflect that nine-tenths of the inventions and
improvements constituting all the material features of the civilization
of this century have been made by working men, it is manifest that they
are entitled to much more of the comforts and convenience of life than
are now accessible to them. By watchful, repeated, and aggressive
efforts through their trade organizations, the working men in many
branches have been enabled to keep wages from sinking, and occasionally
to secure an advance; but, during a period of falling prices, what is
gained in this way by those who are kept at work is lost to the working
class as a whole by the remission to idleness of part of their number.

The statisticians who seem to be employed by some propaganda to prove
by figures that prosperity prevails, point exultantly to the fact that
the wages of the working people seem constantly to have increased while
prices are falling, and they cite this to prove that low prices are
consistent with prosperity. They leave entirely out of the account the
large numbers of workmen who of necessity are relegated to idleness on
account of the lack of profit in business.

If you go into the workshops of any large manufacturing enterprise,
while prices are low and lowering, and ask the managers what they now do
when a strike occurs among the workmen, they will tell you they find it
impossible to shut down, because they have contracts extending through
time that they must fill, but, they add, "We pay the wages demanded and
we reduce the number of the employed."

If there are a thousand workmen employed, getting $2 each per day, that
would be a wage fund of $2,000 a day. If, when prices fall and business
becomes dull, the employer should want to reduce the pay of each workman
to $1.50 a day, and if the workmen, by striking, should prevent that
decrease, and if, then, 25 per cent. of their number should be
discharged, the loss to the working class, as a body, and to the
community at large, would be the same as though the wages were reduced
to $1.50 a day. Until these people who present statistics can show us
how many laborers are left out of employment there is no possibility of
arriving at any correct conclusion as to what the wage fund is and how
much wages are paid.

The loss to society is much greater when 25 per cent. of the people are
unemployed than if all continued at work upon a 25 per cent. reduction
of wages, because the relegation to idleness of 25 per cent. of the
workmen reduces the producing force, and lessens correspondingly the
aggregate annual production.


Those who in the Senate and in the other House of Congress, represent
mining constituencies are taunted with the selfish purpose of advancing
the interests of their own States at the expense of those of the
country. It is sought to discredit the State which I have the honor in
part to represent on this floor, on the ground that the people, being
largely silver miners, have a personal interest in the remonetization of

The silver miners, Mr. President, need no defense here or elsewhere.
They have asked no favors from the Government, and ask none now. They
are bold, adventurous, and self-reliant men, who have wandered across
alkaline deserts, and over pathless mountains, braved the assaults of
hostile savages, the miasma of the Isthmus and the storms of the Cape,
and have planted the flag of a high civilization on the western confines
of this Republic. No more patriotic or public-spirited class of citizens
can be found within the borders of the Union. Their business is an
honorable one. When they entered upon it they, in common with other
citizens, had the warrant of time, and the authority of all writers and
thinkers on political economy, for the belief that silver was, and would
ever be, a money metal, entitled to that full credit which from time
immemorial had been accorded to it. Silver, equally with gold, had been
consecrated by all the ages to the money use, and was dedicated to such
use by the Constitution of the United States.

When the Constitution declared that Congress should have power "to coin
money and regulate the value thereof" and that "no State shall * * *
make anything but gold and silver coin a tender in payment of debts," it
warranted the belief on the part of all who adopted the calling and
undertook the business of mining, that gold and silver would continue
to be money metals in the sense in which they had been for thousands of
years in the past. The silver miners were warranted in presuming that
when the Constitution esteemed so highly the legal-tender function in
the two metals, gold and silver, as that it prohibited the States from
making anything a legal tender except coin of those two metals, it would
not warrant the Congress of the United States in taking from one of
those metals the power of legal tender and conferring that imperial
function exclusively on the other. Silver mining is a business requiring
for its successful prosecution skill, experience, and energy, while
nine-tenths of the gold of the world has come from placers; requiring
neither organization, capital, nor skilled labor.

The production of gold is much more a matter of accident and much more
liable to fluctuation than is the case with silver. The silver miners
therefore had a right to believe that so long as 23.22 grains of pure
gold should be entitled to recognition as one dollar, 371.25 grains of
pure silver would continue to be entitled to like recognition as one
dollar, and would possess the legal-tender function as such, for the
liquidation of all debts, public and private. On the strength of this
warranty of the Constitution, and of the unbroken experience of the
ages, large sums of money were invested in mining property and in the
employment of labor to develop the mines of the country. On the strength
of this belief and conviction, shared in by all the people of the United
States, that gold and silver would both remain the money metals of the
world, debts to an enormous extent were incurred, and it was confidently
believed that both metals would for all time be available for the
payment of those debts.

The silver-miners had learned from the history of mining, as well as
from hard and bitter experience, that the mines might at any moment
cease to yield, in which case their occupation would be gone and the
capital invested would be a total loss. But they did not suppose that
the verdict of all time would be reversed, or that the implied warranty
of the Constitution of the United States would be disregarded. They did
not believe that either one of the money metals would ever be
demonetized. And if a doubt had entered their minds on that subject,
they would naturally suppose that gold rather than silver would be
demonetized, gold being too limited in quantity to answer alone the
purposes of money in a rapidly advancing civilization; its yield being
uncertain and capricious and the prospect of a continued and sufficient
supply becoming less from year to year.

But, Mr. President, the degree of special interest which the mining
States have in this measure is not to be compared with that of the other
States of the Union.

According to the report of the Director of the Mint, the total quantity
of silver produced in the United States in the eleven years from 1878 to
1888 inclusive was 406,210,000 fine ounces. According to the same
authority the commercial value of that silver was $436,260,000, and the
coinage value $525,145,000. A very simple process of arithmetic shows
that the difference between the commercial and the coinage value of that
silver was $88,885,000, or an average of $8,080,544 each year. Assuming
that amount to have been the annual difference between the coinage and
commercial value of silver for the five years preceding 1878, we must
add to the $88,885,000 the sum of $40,402,220, making a total of
$129,287,220 as the amount which the silver miners, not of Nevada but of
the whole United States in the seventeen years ending 1889, lost by the
demonetization of silver.

Having thus demonstrated in dollars and cents the degree of selfishness
which, as is charged, is the motive of the miners in advocating the
remonetization of silver, let us glance at the degree of selfishness
which may be said to impel other classes of the community to advocate
the same cause.


The price of cotton for the year 1873, in gold or silver (then of equal
power), was 16.4 cents per pound. The price in 1889 was 9.9 cents.

The yield of cotton for 1889 was 7,000,000 bales, or 3,500,000,000

Had not silver been demonetized that cotton would have brought as good a
price to-day as it did in 1873. At the price of 1873 the account would
have stood 3,500,000,000 pounds, at 16.4 cents, $574,000,000. At the
price of 1889 the account stands 3,500,000,000 pounds, at 9.9 cents,
$345,500,000, showing a loss in debt-paying and tax-paying power on
cotton alone (only one article of merchandise) in the single year 1889,
by reason of the fall in prices caused by the demonetization of silver,
of $227,500,000.

Having shown that the loss to the silver miners by the discount on
silver for the seventeen years from 1873 to 1889 was less than
$130,000,000, it will be seen that the loss in one single year to the
cotton planters of the United States is greater by $90,000,000 than the
total loss for the entire seventeen years to the silver miners of the

But inasmuch as the cotton crop of 1889 was exceptionally large, I will,
for the purpose of my computation, discard it, and assume instead that
an average yield for the years between 1873 and 1889 would be 5,000,000
bales per annum--which is a fair average and by no means high--5,000,000
bales, of 500 pounds each, are equal to 2,500,000,000 pounds.

At the price of 1873 the result of each year would be 2,500,000,000
pounds, at 16.4 cents, $410,000,000.

According to the figures given by the Bureau of Statistics the average
price received each year of the seventeen was 13.1 cents per pound;
2,500,000,000 pounds, at 13.1 cents per pound, equal $327,000,000,
showing a difference of $83,000,000; that being the average each
separate year for seventeen years, or a total sum for the entire period
of $1,411,000,000, which represents the loss in debt- and tax-paying
power suffered by the cotton planters by reason of the demonetization of

This is the enormous tribute which has been exacted of the cotton
industry of this country in behalf of the gold "standard," and of those
who, for their own pecuniary advantage, cunningly induced the Congress
of the United States to demonetize silver. This is the sum which the
planters of this country have lost in debt-paying and tax-paying power
by that mad act of folly. As will be seen at a glance, it is a loss
vastly in excess of that suffered by the silver States in the discount
on the price of silver bullion.

So that, if the silver miners are taunted with having a personal
interest in the success of the movement for the full remonetization of
silver, the cotton planter must be placed in the same category, and with
ten-fold more reason.

A like computation with regard to wheat will show a loss in debt-paying
and tax-paying power of not less than $100,000,000 a year to the farmers
of the North and West, by reason of the demonetization of silver--a
total of $1,700,000,000 in the article of wheat alone in seventeen

Thus a loss, wholly unnecessary, of more than $3,000,000,000 in
debt-paying and tax-paying power is shown to have been inflicted on the
farmers and cotton planters of this country.

In comparison with this enormous loss to farmers and planters, how
paltry is the loss of $8,000,000 a year suffered by the silver miners.

But, however large the direct loss to the debtors and to the country by
reason of falling prices, the losses that are indirect are of infinitely
greater magnitude, and stand out like a great mountain of wrong
superimposed upon the most deserving class in the community, whose
interests it should be the paramount duty of Government to protect, a
wrong more calamitous in its consequences than any of the multitudinous
wrongs which a shrinking volume of money inflicts upon society.


The political economist, Mr. President, deals with property _in esse_,
and producers employed. I propose for a moment to deal with property _in
posse_ and producers unemployed. The wealth which the political
economist discusses is realized wealth; that to which I now briefly
invite your serious consideration is the wealth that might be, and would
be, brought into existence were the energies of all the people utilized.
For, while it has attracted but little attention from writers on
economic science, it will be found upon examination that the
non-employment of its members is incomparably the greatest loss which an
increase in the value of money and the consequent disorganization of
industry inflicts on society.

The great writers and thinkers on economic subjects discuss with care
the elements that enter into the production and distribution of wealth.
They follow in detail the manufactured article through all its stages,
from the crude material to the finished product; and, when completed,
they conduct it through the intricate channels by which it reaches the
hands of the consumer. The greatest consideration is bestowed upon the
labor employed and the wealth resulting therefrom, but scarcely any
thought is given to the immeasurable mass of potential wealth not
produced, but lying latent in the brains and hands of the millions who
are condemned to involuntary idleness.

While no mere sum in arithmetic can represent the enormous loss suffered
by a nation through this cause, let us see whether we can arrive by
figures at an approximate conception, at least, of the loss of wages
which it entails upon the working masses, and the corresponding loss of
wealth to the country.

The most thorough and painstaking investigation into the conditions of
labor in this country has been that which for many years has been
conducted by the Massachusetts Bureau of Labor. Its work has been
universally admitted to be free from bias, and devoid of all attempt to
establish any special hobby, or to force, by figures, the proof of any
preconceived theory.


An examination of the work of that bureau shows that, in 1887, there
were 816,470 persons engaged in wage earning in the State of
Massachusetts. Of those, 241,589, or nearly 30 per cent., were idle
during some part of the year--ranging from one to six or more months.
The average of their unemployed time was about four months, or one-third
of the year.

Now, 240,000 people idle for one-third of their whole time is
equivalent, in money loss, to the total idleness of one-third of that
number, or 80,000 people, for the entire year. The whole number of
persons enrolled for labor in the State being 816,470, this is
equivalent to the total idleness of one-tenth of the people engaged in
all occupations.

If a number equivalent to one-tenth of the people in all occupations are
idle twelve months in the year in a State like Massachusetts, where
labor is better organized, better classified, and more efficiently
ordered than elsewhere in this country, it can not be presumed that any
other State of the Union will exhibit a smaller proportion of unemployed

The Census Report of 1880 states the number of persons employed in all
occupations as 17,392,099, out of a population of 50,155,783, or a
percentage of 34.68 of the entire population. Our present population
being not less than 65,000,000, if we assume, as we are warranted in
doing, that a like proportion of the population is engaged in
occupations of all sorts, it is clear that we have to-day a working
population of 22,254,000 persons.

Accepting as correct the careful deductions from the Reports of the
Massachusetts Bureau of Labor that a number equivalent to ten per cent.
of the people are always out of employment we find that at the present
time there are 2,250,000 persons involuntarily idle in this country. How
faintly does the term "the army of the unemployed" describe this vast
number of eager and willing men seeking in vain the opportunity to earn
a livelihood for themselves and families.

Were the business of the country in the active condition in which it
could not avoid being if our money system were perfectly adjusted to
industry, and if employers were competing for laborers with the same
degree of eagerness that laborers are competing for employment, the
average wage of a day for a working man would not be less than $2. This
would make but the moderate sum of $50 a month for each workman, which,
under the most thrifty system of household economy, can not be
considered more than enough for the support of an American family.


By multiplying the number of persons thus shown to be idle, by this
moderate average wage, we arrive at the amount of $4,500,000 as the
daily sum which is lost to the wage earners of the United States by the
non-employment of labor. This is a money loss of $27,000,000 a week,
$117,000,000 a month, or the amazing sum of $1,404,000,000 a year. A
saving of this sum for a year and three months would pay our entire
national debt. This being the loss in a single year, we can imagine
(making due allowance for difference in the numbers of the population)
how stupendous has been the loss to the nation during the past seventeen
years, a loss exceeding incomparably all other losses whatsoever.

If a crop of wheat be lost, it is appropriately noted as a public
misfortune; if a city be burned down, or swept away by flood, it is
properly regarded as a great national calamity, and the sympathies of
all the people go out in unstinted measure to the sufferers. But here is
a loss as real and as deplorable as any ever caused by flood or fire--a
loss whose consequences, while not so apparent, are as destructive to
national prosperity as the burning of ten cities, or the occurrence of
one hundred and forty Johnstown disasters every year, and always to the
people who can least afford it. Yet it passes almost wholly unheeded
except by the sufferers.

A war that would take a million of men from industry and deprive the
country of the production which would result from their labors, would
be regarded as a calamity of unsurpassable magnitude, yet a shrinkage in
the volume of money relatively to population withdraws much more than
that number from productive pursuits, and without the salutary
discipline and restraints of military life, subjects them to conditions
of which the unavoidable results are poverty and crime.

Imagine, Mr. President, the unhappiness, discontent, and even despair
implied in the mere statement that 2,000,000 men are constantly out of
employment; (or, what amounts to the same thing, that three times that
number are idle for four months in the year!) Imagine, what it means to
the working people of this country to be deprived of the enormous sum of
$1,400,000,000 a year.

But, aside from the effect on the individual, what benumbing
consequences are entailed upon the nation by the idleness of so large a
number of its people. The loss of the wealth which the labor of those
men might have created is a loss never to be retrieved. When the money
volume of a country is sufficient to keep prices from falling, and thus
to encourage capital to seek productive enterprises, in which labor is
employed, every willing man is kept at work, and no country can enjoy
any higher degree of prosperity than when all its people are employed,
and the products of their labor equitably distributed.

Much, I believe, of the prejudice against silver money arises from an
idea, conscientiously entertained, by many, that gold money has the
greater "intrinsic value." I shall, therefore, Mr. President, at the
risk of being a little abstruse, discuss that point.


No discussion of the subject of money can be intelligently conducted
without a correct conception of the meanings attaching to the terms
employed. For a misconception of those meanings is the root of much of
the confusion and difficulty by which the subject is surrounded.

"Value" is a word which, of necessity, is more frequently used--and, I
will add, more frequently misused and misunderstood--than any other
employed in the discussion of economic science. Volumes have been
written upon it, and yet, from the daily misapplication of the word in
leading magazines and newspapers, it is evident that its meaning is very
imperfectly understood.

The idea involved in the word "Value" is so broad and pervasive that
within the limits of a speech it would be impossible to discuss it in
all its bearings. I shall not, therefore, at this time, do more than
present what I conceive to be a basic definition of it.

Value is human estimation placed upon desirable objects whose quantity
is limited, and whose acquisition involves sacrifice. In order that an
object may have value it must not only be the subject of human desire,
but there must be a limitation of its quantity, and its acquisition must
demand a sacrifice from him who would obtain it. The term "intrinsic
value" is used by many writers with a total disregard of the idea
involved in the word _value_. An article may have estimable qualities
that are intrinsic, but no article whatever can have intrinsic value.
Its "value" is the mental estimation of its qualities, as modified by
the limitations of its quantity and the amount of sacrifice necessary to
obtain it. In other words, value is subjective, not objective. In
economic discussion, however, value is treated as though it resided in
the object, rather than in the mind, and while, for convenience, I may
occasionally use it in that sense, it is important to bear in mind the

In that acceptation, value is usually divided into value-in-use, and
value-in-exchange. Certain esteemed qualities of an object may make it
of great value-in-use; but unless its acquisition demand sacrifice, it
can have no value-in-exchange. It is only with this class of value that
economists deal. No matter how important the intrinsic qualities of any
article may be, if there be no limitation of its quantity and its
acquisition requires no sacrifice, it can have no value in the sense in
which the word "value" is used in political economy. The air has
qualities inestimable to mankind; it must be regarded as incomparably
the most useful of all the objects of human desire; yet it has no value
because there is no limitation of its quantity. By reason of its
universality and accessibility, air requires no sacrifice to get it. If,
however, circumstances should render air limited in quantity it is
conceivable that it might become of surpassing value. A man confined in
the "Black Hole" of Calcutta would give a fortune for free access to
air. So water, where freely obtainable, without sacrifice, although
indispensable to life, has no value in the economic sense--no value in
exchange. But when not so obtainable, as in populous cities, where
sacrifice of time and labor would be necessary to obtain it from river,
lake, or spring, people pay for the convenience of having it in their
homes. The indispensable prerequisites of value in all objects are
utility--either actual or attributed--combined with limitation of
quantity and the sacrifice necessary to be made in order to obtain it.

But value is not a property inhering in any article itself. It is not
intrinsic. If the value were inherent or intrinsic it could not be taken

To illustrate: A generation ago the cradle with which wheat was
harvested was said to possess intrinsic value. It was undoubtedly one of
the most useful of all the articles needed by man. All that was then in
that machine is in it still, yet the value is gone. Had the value been
something that was intrinsic, had it resided in the object, and not in
the mind, that cradle would still be worth all that it ever was. So, on
the other hand, an article may possess most estimable qualities, but if
those qualities are not known or recognized by the human mind the
article will have no value.

A few years ago cotton seed had no value as an article of general
commerce. To-day it is exceedingly valuable, because it has been found
to possess estimable qualities not before suspected.

Indeed so strongly does the idea of value rest upon the estimation of
the mind that it is not even necessary for an article to possess in
reality any desirable quality whatever in order to have value. It will
be sufficient if such quality is popularly attributed to it. Numbers of
instances could be cited in which there was present no element of value
except limitation of quantity, added to a mere belief, or conception of
the mind, that the article had desirable qualities. Many will remember
that a few years ago a herb called "Cundurango" was introduced into this
country from Central America. It was generally believed to possess
healing qualities in cases of cancer, and so came to have great value.
As soon as this popular illusion was dispelled the article ceased to
have even the slightest value.

Land being indestructible and irremovable, is believed to be the
embodiment of the idea of intrinsic value. Take, then, a lot on Madison
Avenue, New York; it is worth perhaps a thousand times as much as a lot
of equal size in a village remote from the city. What proportion of its
high price is derived from what is called its greater "intrinsic"
value? A lot on that fashionable thoroughfare has no intrinsic
attribute, or quality, that is not equally the attribute or quality of
the village lot. The difference in its value, or, more correctly, the
difference in the estimation in which it is held, as compared with that
attaching to the village lot, is derived wholly from circumstances that
are extrinsic, not from qualities that are intrinsic.

The action of society in utilizing land in the neighborhood of the city
lot by building up around it gives that lot a value greater than one of
equal size elsewhere.

But in order that a thing may subserve a useful or beneficent purpose it
is not necessary that the quality which enables it to subserve that
purpose should be intrinsic or inherent in the thing itself.

To apply this reasoning to the subject under discussion--whatever
intrinsic qualities the metal, gold, may possess, they confer no force
whatever on gold-money.


The money of a country is that thing, whatever it may be, which is
commonly accepted in exchange for labor or property and in payment of
debts, whether so accepted by force of law, or by universal consent. Its
value does not arise from the intrinsic qualities which the material of
which it is made may possess, but depends entirely on the extrinsic
qualities which law, or general consent, may confer.

Money is of transcendent importance to civilization. It is the physical
agency to which society has assigned the function of measuring all
equities, and it is the sole agency upon which that incomparable
function has been conferred. It is in terms of money that society
computes the material value of all human sacrifice, alike the highest
effort of genius and the daily toil and sweat of the millions who labor.

In order to measure equitably the natural and inevitable mutations in
the value of other things, money should itself be of unchanging value.
That is to say, any given amount of money should, so far as human
foresight can regulate it, require at all times an equal amount of
sacrifice for its acquisition. Thus, in the case of a contract made
to-day, requiring the payment of a dollar twelve months hence, that
dollar when due should exact from the debtor precisely that amount of
sacrifice, and no more, which would be required had he paid the debt the
day after contracting it.

No one will deny that the most important quality that money can possess
is that it shall truthfully measure and state equities.

As I have shown by the figures heretofore cited, gold has risen in value
between 30 and 40 per cent. since the demonetization of silver. It is
not therefore so faithful a measure of value as is silver, which as
illustrated by a variety of examples, has maintained almost undisturbed
its relation to commodities.


The logic of the situation, and the reasoning of all the leading
authorities on money, lead irresistibly to the conclusion that its value
does not reside in the material, but in the stamp; in other words, on
the legal-tender function impressed on that material. It is an order for
property and services.

Aristotle, writing of money, says:

    Money by itself * * * has value only by law, and not by nature;
    so that a change of convention between those who use it is
    sufficient to deprive it of all its value and power to satisfy
    all our wants.

And again he says:

    But with regard to a future exchange (if we want nothing at
    present) money is, as it were, our security that it may take
    place when we do want something.

John Locke, in "Considerations," etc., regarding money, published in
1691, says:

    Mankind, having covenanted to put an imaginary value upon gold
    and silver, by reason of their durableness scarcity, and not
    being very liable to be counterfeited, have made them, by general
    consent, the common pledges, whereby men are assured, in exchange
    for them, to receive equally valuable things to those they parted
    with, for any quantity of those metals; by which means it comes
    to pass that the intrinsic value regard in those metals, made the
    common barter, is nothing but the quantity which men give or
    receive of them; they having, as money, no other value but as
    pledges to procure what one wants or desires.

Baudeau, reputed one of the most eminent of an early school of French
economists, says:

    Coined money in circulation is nothing, as I have said elsewhere,
    but effective titles on the general mass of useful and agreeable
    enjoyment which cause the well-being and propagation of the human

    It is a kind of a bill of exchange, or order payable at the will
    of the bearer.

Adam Smith says:

    A guinea may be considered as a bill for a certain quantity
    of necessaries and conveniences upon all the tradesmen in the

Jevons's "Money and Exchanges," chapter 8, says:

    Those who use coins in ordinary business need never inquire how
    much metal they contain. Probably not one person in two thousand
    in this kingdom knows, or need know, that a sovereign should
    contain 123.27447 grains of standard gold.

    Money is made to go. People want coin, not to keep in their own
    pockets, but to pass it off into their neighbors' pockets.

Henry Thornton, in his work on Paper Credit, says:

    Money of every kind is an order for goods. It is so considered by
    the laborer, when he receives it, and it is almost instantly
    turned into money's worth. It is merely in instrument by which
    the purchasable stock of the country is distributed with
    convenience and advantage among the several members of the

John Stuart Mill says:

    The pounds or shillings which a person receives are a sort of
    ticket or order which he can present for payment at any shop he
    pleases, and which entitle him to receive a certain value of any
    commodity that he makes choice.

McLeod, Elements of Banking, Chapter I, says:

    When persons take a piece of money in exchange for services, or
    products, they can neither eat it, nor drink it, nor clothe
    themselves with it. The only reason why they take it is, because
    they believe they can exchange it away whenever they please for
    other things which they require.

On that view of money McLeod feels justified in styling it credit, and
he quotes in support of such a use of the term credit, Burke's
description of gold and silver as "the two great recognized species that
represent the lasting conventional credit of mankind."

Prof. Francis A. Walker, Money, Trade, etc., page 25, speaking of carved
pebbles, glass beads, shells and red feathers, used as money in certain
countries at certain times, says:

    They were good money, though serving no purpose but ornament and
    decoration. They were desired by the community in general; men
    would give for them the fruits of their labor, knowing that with
    them they could obtain most conveniently in time, in form, and in
    amount, the fruits of the labor of others.

On page 30 he says:

    Men take money with the expectation of parting with it; this is
    the use to which they mean to put it.

Again, Mr. Walker says:

    Money is that which passes freely from hand to hand throughout
    the community, in final discharge of debts and full payment for
    commodities, being accepted equally without reference to the
    character or credit of the person who offers it, and without the
    intention of the person who receives it to consume it, or enjoy
    it, or apply it to any other use than, in turn, to tender it to
    others in discharge of debts or payment for commodities.

Even Bonamy Price, who is wedded to the gold standard, in his Principles
of Currency, says:

    Gold, in the form of money or coin, is not sought for its own
    sake, as an article of consumption. It must never be regarded as
    valuable except for the work it performs, so long as it remains
    in the state of coin. It can be converted at pleasure into an
    end, into an article of consumption, by being sold; till then it
    is a mere tool.

How many people ever so "convert" it that earn it?

The great philosopher, Bishop Berkeley, one of the most acute reasoners,
in my judgment, that modern times have produced, in the "Querist,"
published in 1710, propounds the following pertinent and suggestive

    Whether the terms "crown," "livre," "pound sterling," etc., are
    not to be considered as exponents, or denominations? And whether
    gold, silver, and paper are not tickets or counters for
    reckoning, recording, or transferring such denominations?
    Whether, the denominations being retained, although the bullion
    were gone, things might not nevertheless be rated, bought, and
    sold, industry promoted and a circulation of commerce obtained?

Dugald Stewart, professor of moral philosophy in the University of
Edinburgh, in his Lectures on Political Economy (Part I, Book II), said:

    When gold is converted into coin, its possessor never thinks of
    anything but its exchangeable value, or supposes a coffer of
    guineas to be more valuable because they are capable of being
    transferred into a service of plate for his own use. Why then
    should we suppose that, if the intrinsic value of gold and silver
    were completely annihilated, they might not still perform, as
    well as now, all the functions of money, supposing them to retain
    all those recommendations (durability, divisibility, etc.)
    formerly stated, which give them so decided a superiority over
    everything else which could be employed for the same purpose.

    Supposing the supply of the precious metals at present afforded
    by the mines to fail entirely the world over, there can be little
    doubt that all the plate now in existence would be gradually
    converted into money, and gold and silver would soon cease to be
    employed in the ornamental arts. In this case a few years would
    obliterate entirely all trace of the intrinsic value of these
    metals, while their value would be understood to arise from those
    characteristical qualities (divisibility, durability, etc.) which
    recommend them as media of exchange. I see no reason why gold and
    silver should not have maintained their value as money, if they
    had been applicable to no other purposes than to serve as money.
    I am therefore disposed to think, with Bishop Berkeley, whether
    the true idea of money, as such, be not altogether that of a
    ticket or counter.

Appleton's Cyclopedia, defining money, says:

    Anything which freely circulates from hand to hand, as a common
    acceptable medium of exchange in any country, is in such country
    money, even though it ceases to be such, or to possess any value
    in passing into another country. In a word, an article is
    determined to be money by reason of the performance by it of
    certain functions, without regard to its form or substance.


Bastiat, in his "Harmonies Economiques," describing money, used the
following illustration:

    You have a crown piece. What does it mean in your hands? If you
    can read with the eye of the mind the inscription it bears, you
    can distinctly see these words: Pay to the bearer a service
    equivalent to that which he has rendered to society. Value
    received and stated, proved and measured by that which in on me.

No words could more correctly describe the unit in a properly regulated
system of money. And notwithstanding the attempt to discredit silver
coinage, no piece of money, as I have already shown, would better
answer, by its steadiness of value, this description of Bastiat's than
would the American silver dollar if silver were remonetized.

So far as it applied to gold Bastiat's description was much nearer
accuracy in his day than it is in ours. In his life-time the mints of
France and of the Continent were open for the coinage of silver equally
with gold, and the money supply of the world was not constantly
narrowing by being limited to the yield of a single metal whose annual
output would hardly more than meet the demand for the arts.

Were Bastiat alive at this time he would reform his description so as to
make it read as follows: "You have an American gold piece. You have had
it hoarded in a bank vault for fifteen years. What does it mean in your
hands? If you can read with the eye of the mind the inscription it
bears, you can distinctly see these words: 'Pay to the bearer 50 per
cent. more service than he has rendered to society; value not received
or stated on me, but resulting from a cunning manipulation of the law of
legal tender, through the influence of the holders of gold and of
obligations payable therein, and as a reward to the bearer for having
had this money hid away and for depriving society of its use for
seventeen years.'"

When people are found everywhere working for money and not for the
things which they really need, it is clear that they are working for
money, not because of the material of which it is composed, but because
it is an order for property which they can at any time obtain by parting
with the money. To modify and elaborate Bastiat's description of the
crown piece, it might be said of the Money Unit of the United States
under a properly regulated system:

"You have a dollar. What does it mean in your hands? If you can read
with the eye of the mind the inscription it bears, you can distinctly
see these words: To all to whom this may come: Greeting. This is a
dollar--a unit of money--part of the great instrumentality created by
society to effect the multitudinous exchanges of property and services
among men. The amount of its command is constant, because the increase
in the volume of money is regulated by the sovereign authority of the
nation, with strict regard to the increase of population and
demand--hence the value of this unit remains unchanging through time. It
is an order for all property on sale, and all services for hire; the
proportionate amount of such property and service to which its possessor
is entitled being fixed by the universal competition to get it."


Many persons fear an outflow of gold from the operation of what is known
as "Gresham's law," namely, that "bad money will expel good." Sir Thomas
Gresham, a financier of Elizabeth's time, stated that if a number of
the gold or silver coins of any given denomination were deprived of part
of their pure metal, and so made cheaper than the remainder, a
successful circulation of the coins thus deprived would result in the
melting up or exportation of the coins of standard weight. Writing of
this, Mr. Jevons ("Money and the Mechanism of Exchange," American
edition, page 84) says:

    Gresham's remarks concerning the inability of good money to drive
    out bad only referred to moneys of one kind of metal. * * * The
    people, as a general rule, do not reject the better, but pass from
    hand to hand indifferently the heavy and the light coins, because
    their only use for the coin is as a medium of exchange. It is
    those who are going to melt, export, hoard, or dissolve the coins
    of the realm, or convert them into jewelry and gold leaf, who
    carefully select for their purposes the new heavy coins--

and avoid the light or abraded coins.

There is, however, a theorem which applies to all money, but which was
recognized long before Gresham's time--although it has been erroneously
called an "extension" of the law or theorem of Gresham.

That theorem is this: If, in any country, there are two forms of money,
each of which is a full legal tender, and one of which can be obtained
with less sacrifice than the other, the one requiring the least
sacrifice will be the cheaper, and if the unit of that cheaper money
will perform in every respect the same function in the payment of debts
and settlement of all obligations that can be performed by the dearer
money, then, for obvious reasons, the cheaper money will come into
universal use, and the dearer money will disappear. But it does not
follow that the cheaper money is bad money nor the dearer money good

The best money is always the money of the contract, that is to say a
money whose dollar, whatever it may be made of, is equal in value to the
dollar of the contract. If the money of the contract is the cheapest
money, then that is the best money, that is the honest money, and that
is the only tolerable money.

If that be the sort of "cheap" money that drives out the dear money,
then manifestly the dear money is bad money.

A distinguished official of the Government, who was before a committee
of this body the other day, insisted that the proposed Treasury notes
should be redeemed in the "best money." I asked him what was the "best
money." "Why," he said, "the money that is worth the most." Now, it
strikes me, Mr. President, that if you have borrowed a dollar, and,
through a badly regulated money-system, are made to pay a dollar worth
25 per cent. more than the dollar you borrowed, you are not paying the
best money, but the worst money; not an honest dollar, but a swindling
and dishonest dollar.


The creditors tell us that all they want is "good money." They and their
friends glibly insist that all obligations must be paid in "the best
money." This is the delicate and plausible euphemism resorted to in
order to gloss over and, if possible, hide from the world the odious and
repulsive fact that what the creditors always want is the _dearest_
money--the money that costs the people the most sweat and toil to obtain
and which, as time passes, grows dearer and dearer.

This cry for "the best money" is at last beginning to be recognized for
what it is--the cunning device of creditors to "catch the conscience" of
the people and play upon the sense of fairness that characterizes the
great mass of mankind. These interested parties affect to believe that
gold is, by nature, the only money metal, ignoring the fact that until
silver was displaced by hostile legislation it was, and for four
thousand years had been, the principal money metal of the world. But
they will no longer be permitted to hide their sinister purpose under
the cloak of a demand for the "best money." The masses of the people are
aroused on this subject and are beginning to understand it.

According to all fair canons of construction the best money should be
and is a money of unchanging value, a money that exacts from the debtor
the same amount of sacrifice that he bargained for, and which is all
that the creditor is equitably entitled to receive. In other words, the
money of the contract, not a money whose exactions are increasing at the
rate of 2 per cent. per annum. As McCulloch says, debts being stated in
dollars and cents, it is not possible for the creditor openly to augment
his debtor's obligation by changing the figures of the debt.

But, Mr. President, while they can not change the figures of the debt,
they are enabled, by a crafty manipulation of the money-volume, to do
that which, to the debtor, means the same thing; as the following story
will illustrate:

A usurer of the coarser type had lent $10,000 on a neighboring farm, for
which amount he took the farmer's note, secured by a mortgage on the
property. He coveted the farm, and in his anxiety to secure it took his
banker into his confidence. He informed the banker that he wanted to get
possession of this farm, but it would bring $15,000 under the hammer,
and he did not care to pay so much for it. "I have a subtle chemical,"
said he, "by which I can obliterate from the note and mortgage all trace
of the rightful amount ($10,000), and that done, I can insert $15,000.
Then, with the genuine signatures on the note and mortgage I can bring
suit, and as the farm will not bring more than the face of the note, I
shall succeed to the property."

His friend, the banker, however, advised against this course, which he
characterized as not only dishonest, but vulgar, and as subjecting the
perpetrator of the act to serious penalties. "Honesty" said the banker,
"is the best policy." "But," he continued, "I can suggest a plan by
which you may accomplish the same end without running counter to law, or
the views of society. Why not join our propaganda in advocacy of 'honest
money.' Gold is decreasing in quantity, and as the world has been
ransacked for it in vain, it is likely to continue decreasing. If we can
strike down the twin metal, silver, and devolve the entire money
function on gold, it will double the purchasing power of money. Then the
foreclosure of your mortgage will be sure to take your neighbor's farm,
and probably leave him in your debt besides. Instead of being punished
for this, you will receive the plaudits of the 'best society' for the
_finesse_ you have displayed and the firm stand you have taken in favor
of honest money, and you will take high rank among 'the wisest and most
conservative of our financiers.' If your neighbor makes any objection to
your action, you may be able to secure his incarceration as a lunatic,
but if not, he will come to be regarded in the community as a dishonest
'crank' who wishes to pay his debts in a depreciated money; for it is
the constant and assiduous care of our guild to teach that only the
dearest money, that which is the most difficult for the laborer, the
farmer, and the mechanic to get, is honest money, and the dearer it is
the more honest it is."


To be of the fullest service to civilization whatever medium is used to
do the work of money should have full money power; that is to say, it
should be a legal tender. It is not sufficient that it will satisfy the
demands of the Government for taxes.

Whatever is given out by the Government in payment for services rendered
(and there is no other way by which payments can be made from the
Treasury) should carry with it to him who has rendered the service and
receives the payment, the absolute assurance that in any need, or in any
contingency, it will serve him as money. There is no other means by
which society can be saved from the effects of panics and monetary

With a watchful and intelligent regulation of the money volume, and with
the legal tender function attached to everything that is in use as
money, and doing the money work, so that it will serve as a universal
solvent, panics will be impossible. Under present conditions when panics
come, credit money--money not endowed with the legal-tender function,
which, under ordinary circumstances, has always been accepted, is
refused, and thousands of millions of dollars' worth of property have
been confiscated by creditors, because of the scarcity of legal-tender
money. As time advances and the method of doing business on credit
becomes more and more extended, the more palpable it becomes that
society can preserve itself from these periodical convulsions only by
broadening, under proper regulation, the legal-tender basis on which, in
the ultimate analysis, all business rests.


There is nothing upon which the prosperity and happiness of a people so
much depend as on the integrity of their measure of values.

It is universally admitted that after the making of a contract requiring
future delivery of a specified number of pounds, bushels, or yards of
any commodity, it would be subversive of all equity and justice to
change the capacity of the measure constituting the foundation of the
contract. These measures, to be just, must remain unchanged. But how
infinitely more important is it that money, which is the measurer of all
other measures, should itself be unchanged? Of what avail is it that the
subordinate measures remain intact while this, the supreme measure, into
which all others are finally resolved, is constantly changing? Its
"value" is but another name for its purchasing or measuring power. In
the case of all time contracts, therefore, any change in the value of
money works a destruction of equity, and one of the first objects of
society should be to maintain and enforce equities at all times and in
all places. This, so far as money can effect it, can only be done by an
intelligent regulation of the volume in circulation.

In a note to his edition of Adam Smith's "Wealth of Nations," (page 502)
Mr. J. R. McCulloch says:

    Money is not a mere commodity, it is also the standard or the
    measure by which to estimate and compare the value of everything
    else that is bought and sold, and if it be, as it undoubtedly is,
    the duty of Government to adopt every practicable means for
    rendering all foot-rules of the same length, and all bushels of
    the same capacity, it is still more incumbent upon it to omit
    nothing that may serve to render money, or the measure of value--a
    measure which is undoubtedly of the greatest importance--uniform
    or steady in its value.

Though a measure of value, money is a much more complicated instrument
than a yard-stick, pound weight, or bushel. Were it not so, a child
could fix value with the same precision as an adult.

As value resides in human estimation, it will frequently vary as to the
same object. An intending purchaser may have one notion of the value of
an article, an intending seller another. Money, therefore, is a measure
of value in the sense that it is a measure of the average human
judgment--from which results price. As Mr. McCulloch says, no means
known to science or art should be left untried to keep the value of
money unchanging.

When a man promises to deliver money or makes any time contract, he
makes a mental calculation as to what amount of property, or of the
product of his labor, will enable him to meet his engagement. If he be a
farmer, raising wheat, there passes through his mind the sacrifice and
toil necessary to raise it, and the quantity he can raise; if a cotton
manufacturer the cost of spindles, of looms, and steam-engines; the
wages of labor and interest on plant.

I knew a cotton manufacturer who wanted $10,000. His business was good.
He was sober, honest, and industrious; had a thorough knowledge of his
trade; managed his employés himself, and took the greatest pains to
conduct his business on the strictest business principles. He wanted the
money to make some improvements in his factory. He knew how many
spindles and looms he had; how much could be done with a pound of
cotton, how much it cost, and how much each spindle and loom would do.
He said to a capitalist, "I know all about cotton spinning and weaving,
and do not know anything about this thing called money, but I want
$10,000 of it." Said he, "My cloth is worth 10 cents a yard; it sells at
that rate in unlimited quantities by wholesale; nobody can make it any
cheaper; but I am not working a gold mine; I am not manufacturing
legal-tender paper money, and the only way I can get money is to swap my
cotton cloth for it. I will give you my note for 100,000 yards of cotton
cloth, which will be equal to $10,000, and will pay 2 inches a yard each
year as interest."

This was satisfactory to the capitalist, and the note was made, signed,
and delivered accordingly, and the improvements were made in the

During the year everything went smoothly; the spindles and looms worked
well, repairs to machinery were light; cotton had been bought at proper
rates; and no improved processes had been discovered or applied in the
production of cotton-cloth. There was no hitch in any direction.

At the appointed time, the creditor called for his cloth. "I am ready,"
said the debtor, "to pay the hundred thousand yards of cotton cloth,
with interest." When he came to measure it off, however, he was
astounded to find he was short. Some painful suspicions crossed his
mind. It seemed as though somebody had either robbed him of cloth, or
else he had not manufactured as much of it as he had supposed. There did
not seem to be so many yards of the cloth as there ought to be. He knew
he had used the same number of pounds of cotton that it had been his
custom to use for 100,000 yards of cloth and for 200,000 inches of cloth
in addition; still, there was no denying the fact of the shortage.

He measured it again and again, and had finally to admit that he was
unable to keep his engagement. This was a source of great distress to
him. He could not sleep that night. But, the creditor being importunate,
the cotton manufacturer next morning borrowed enough cloth from the
proprietor of a neighboring factory and paid his obligation. But, not
understanding how his carefully made plans had failed, and in order to
avoid similar mistakes in the future, he had an examination made of the
yard-stick and found that instead of being 36 inches long the yard-stick
he had used was 40 inches.

In talking the matter over with his neighbor, the cotton manufacturer
said: "I have been swindled; they 'rung in' on me a lengthened
yard-stick, by the measurement of which I have paid my debt, and I have
therefore paid in reality more than I contracted to pay."

"Well," said the friend, "I do not see that you are any worse off than I
am. I borrowed as much as you did, and at the same time; but I agreed to
pay my debt in money, and gave my note for $10,000 with interest. The
increased command over cloth acquired by the dollars I have had to pay,
caused by the demonetization of silver, has juggled me out of as much
cloth as you have been juggled out of by the lengthened yard-stick. But
you have one recourse; you can put into the penitentiary the man who
'rung in' the lengthened yard-stick on you, while the increase in the
value of the dollar which I have paid has been effected in the name of
the gold standard and honest money, and leaves me without recourse."

In its ultimate analysis, money is the yard-stick, the bushel and the
pound weight of commerce.

When you shrink the volume of money, and so increase the measuring power
of the dollar, you lengthen the yard-stick, enlarge the specific gravity
of the pound and the cubical content of the bushel, in violation of all

It is utterly impossible to secure a proper regulation of the money
volume with gold alone, the yield of which has declined from an average
of $130,000,000 a year between 1851 and 1873 to $105,000,000 a year
between 1873 and 1889.


Everybody admits that the value of all other things is regulated by the
play against each other of the forces of supply and demand. No reason
has been or can be given why the value of the unit of money is not
subject to this law.


The demand for money is equivalent to the sum of the demands for all
other things whatsoever, for it is through a demand first made on money
that all the wants of man are satisfied. The demand for money is
instant, constant, and unceasing and is always at a maximum. If any man
wants a pair of shoes, or a suit of clothes, he does not make his demand
first on the shoemaker, or clothier. No man except a beggar makes a
demand directly for food, clothes, or any other article. Whether it be
to obtain clothing, food, or shelter--whether the simplest necessity or
the greatest luxury of life--it is on money that the demand is first
made. As this rule operates throughout the entire range of commodities
it is manifest that the demand for money equals at least the united
demands for all other things.

While population remains stationary, the demand for money will remain
the same. As the demand for one article becomes less, the demand for
some other which shall take its place becomes greater. The demand for
money therefore must ever be as pressing and urgent as the needs of man
are varied, incessant, and importunate.


Such being the demand for money, what is the supply? It is the total
number of units of money in circulation (actual or potential) in any

The force of the demand for money operating against the supply is
represented by the earnest, incessant struggle to obtain it. All men, in
all trades and occupations, are offering either property or services for
money. Each shoemaker in each locality is in competition with every
other shoemaker in the same locality, each hatter is in competition with
every other hatter, each clothier with every other clothier, all
offering their wares for units of money. In this universal and perpetual
competition for money, that number of shoemakers that can supply the
demand for shoes at the smallest average price (excellence of quality
being taken into account) will fix the market value of shoes in money;
and conversely, will fix the value of money in shoes. So with the
hatters as to hats, so with the tailors as to clothes, and so with those
engaged in all other occupations as to the products respectively of
their labor.


The transcendant importance of money, and the constant pressure of the
demand for it may be realized by comparing its utility with that of any
other force that contributes to human welfare.

In all the broad range of articles that, in a state of civilization, are
needed by man, the only absolutely indispensable thing is money. For
everything else there is some substitute--some alternative; for money
there is none. Among articles of food, if beef rise in price, the demand
for it will diminish, as a certain proportion of the people will resort
to other forms of food. If, by reason of its continued scarcity, beef
continue to rise, the demand will further diminish, until finally it may
altogether cease and center on something else. So in the matter of
clothing. If any one fabric become scarce, and consequently dear, the
demand will diminish, and, if the price continue rising, it is only a
question of time for the demand to cease and be transferred to some

But this can not be the case with money. It can never be driven out of
use. There is not, and there never can be, any substitute for it. It may
become so scarce that one dollar at the end of a decade may buy ten
times as much as at the beginning; that is to say, it may cost in labor
or commodities ten times as much to get it, but at whatever cost, the
people must have it. Without money the demands of civilization could not
be supplied.

Money was the most potent instrumentality in the evolution of society
from a low to a high plane of civilization. It is valueless to man in
isolation. It is indispensable to man in organized society. It is as
necessary for the proprietary distribution of wealth as railroads and
steamships are to its physical distribution. The aggregate force of the
demand for money in any country depends upon the numbers of the
population; with a stationary population the demand is steady, with an
increasing population the demand increases, and in order to maintain
undisturbed the equation of supply and demand the volume of money should
be increased in at least a ratio corresponding to that of the increase
of population.

There are certain circumstances that to some extent disturb the
relations between population and money supply, such as the broadening of
the areas of population, and the multiplication of money centers. These
circumstances might render necessary a larger percentage of increase in
the money volume than would be indicated by the increase of the

But under any circumstances the smallest money-increase that will
suffice to maintain the equity of time contracts is an increase
corresponding to the increase of numbers of the population.

Under conditions of unvarying demand and unvarying supply the value of
the unit of money would be unvarying. If as population and demand
increase the supply of money be proportionately increased, there is no
possibility of a change in the value of the unit of money.

The constant and unceasing effort to exchange services and all forms of
property, which have but limited command over the objects of human
desire, for money, that sole instrumentality that has unlimited command
over such objects, is, and ever will be, eager, intense, and unwavering.

With population and consequent demand rapidly increasing how do the
advocates of the gold standard expect to increase the money volume of
the country in this proportion, while the yield of gold, instead of
increasing in proportion to demand, is every day becoming less and less
capable of meeting the requirements of the arts alone?


It will be admitted that if the population of a country be increased by
any given percentage there will be a proportionate increase in the
demand for all articles that supply human needs. If the population
increases by 3 per cent., there will be needed 3 per cent. more
house-room, 3 per cent. more furniture, 3 per cent. more food, 3 per
cent. more of all things that enter into consumption. These things can
only be got by a demand first made on money. Then why not 3 per cent.
more money?

The present monetary circulation of this country including gold, silver,
and paper, is represented to be $1,700,000,000. As our population
doubles in thirty years, the rate of increase is 3-1/3 per cent.

If the money volume be not increased by a proportion at least as great
as this, the true relation between the supply of money and the demand
for it will not be maintained. The demand increasing as the population
increases, while the supply either does not increase at all or increases
in a degree incommensurate with the demand, the money volume shrinks and
the purchasing power of the unit becomes greater by reason of the
increased keenness of competition to get it. This is but another mode of
stating that the prices of all products of human labor decline. Prices
falling, business ceases to be profitable, stores and work-shops close,
and men are relegated to idleness.


Thus by the universal competition to get it the value of the dollar is
made to depend upon the number of dollars that are out. This is a
principle that lies at the very foundation of the science of money. The
law, stated broadly, is that the value of each unit of money in any
country at any given time depends on the whole number of units in
circulation in that country. The larger the number of units out,
population remaining the same, the less must be the value of each unit;
the smaller the number of units out, population remaining the same, the
greater the value of each.

Notwithstanding the variance sometimes found between the premises and
the conclusions of economic writers, there is no economist of repute who
does not admit this to be a fundamental principle.

On the theory I have propounded therefore 3-1/3 per cent. of
$1,700,000,000, or $56,000,000, is the minimum amount of money that
should be added to the currency of this country during the present

Assuming the population of to-day to be 65,000,000 and the ratio of its
annual increase 3-1/3 per cent., the population of next year will be
67,166,600. The percentage of monetary increase to be provided for that
year should therefore be baaed on the increased number. And so on for
each succeeding year.

I have thought best to collate a variety of citations from the most
distinguished authorities on financial economy to support my contention
that, _ceteris paribus_, the value of each dollar depends on the number
of dollars in circulation.

John Locke, in his "Considerations," etc., published in 1690, said:

    Money, while the same quantity of it is passing up and down the
    kingdom in trade, is really a standing measure of the falling and
    rising value of other things in reference to one another, and the
    alteration in price is truly in them only. But if you increase or
    lessen the quantity of money current in traffic in any place,
    then the alteration of value is in the money.

Locke further said:

    The value of money in any one country, is the present quantity of
    the current money in that country, in proportion to the present

The historian, Hume, says:

    It is not difficult to perceive that it is the total quantity of
    the money in circulation, in any country, which determines what
    portion of that quantity shall exchange for a certain portion of
    the goods or commodities of that country.

    It is the proportion between the circulating money and the
    commodities in the market which determines the price.

Fichte says:

    The amount of money current in a state represents everything that
    is purchasable on the surface of the state. If the quantity of
    purchasable articles increases while the quantity of money
    remains the same, the value of the money increases in the same
    ratio; if the quantity of money increases, while the quantity of
    purchasable articles remains the same, the value of money
    decreases in the same ratio.

James Mill, in his treatise on political economy, says:

    And again, in whatever degree, therefore, the quantity of money
    is increased or diminished, other things remaining the same, in
    that same proportion the value of the whole, and of every part,
    is reciprocally diminished or increased.

John Stuart Mill (Political Economy) says:

    The value of money, other things being the same, varies inversely
    as its quantity; every increase of quantity lowering the value,
    and every diminution raising it in a ratio exactly equivalent.

And again:

    Alterations in the cost of the production of the precious metals
    do not act upon the value of money, except just in proportion as
    they increase or diminish its quantity.

Ricardo (reply to Bosanquet) says:

    The value of money in any country is determined by the amount
    existing. * * *

    That commodities would rise or fall in price in proportion to the
    increase or diminution of money, I assume as a fact that is
    incontrovertible. * * *

Ricardo further says:

    There can exist no depreciation in money but from excess; however
    debased a coinage may become, it will preserve its mint value;
    that is to say, it will pass in circulation for the intrinsic
    value of the bullion which it ought to contain, provided it be
    not in too great abundance.

In this case Ricardo's illustration is the supposed case of a country
actually using one million gold pieces each containing 100 grains. He
maintains that they would be of the same purchasing power, if the
Government took out 1 grain, or even 50 grains, the quantity remaining
the same, but that if, from the grains so deducted, an additional
number of pieces were struck, a corresponding depreciation would result.

William Huskisson ("The Depreciation of the Currency," 1819), says:

    If the quantity of gold in a country whose currency consists of
    gold should be increased in any given proportion, the quantity of
    other articles and the demand for them remaining the same, the
    value of any given commodity measured in the coin of that country
    would be increased in the same proportion.

Sir James Graham says:

    The value of money is in the inverse ratio of its quantity; the
    supply of commodities remaining the same.

Torrens, in his work on Political Economy, says:

    Gold is a commodity governed, as all other commodities are
    governed, by the law of supply and demand. If the value of all
    other commodities, in relation to gold, rises and falls as their
    quantities diminish or increase, the value of gold in relation to
    commodities must rise and fall as its quantity is diminished or

Wolowski says:

    The sum total of the precious metals is reckoned at 50 milliards,
    one-half gold and one-half silver. If, by a stroke of the pen,
    they suppress one of these metals in the monetary service, they
    double the demand for the other metal, to the ruin of all

Cernuschi says:

    The purchasing power of money is in direct proportion to the
    volume of money existing.

Prof. Francis A. Walker, in his work on "Money" (page 57), says:

    The value of money in any country is determined by the amount

    Its [money's] power of acquisition depends not on its substance,
    but on its quantity. [Paulus, author of the Pandects, sixth

Professor De Colange, in the American Cyclopedia of Commerce, article on
"Money," says:

    The rate at which money exchanges for other things is determined
    by its quantity. * * *

    Supposing the amount of trade and mode of circulation to remain
    stationary, if the quantity of money be increased, its value will
    fall, and the price of other commodities will proportionally
    rise, as the latter will then exchange against a greater amount
    of money; if, on the other hand, the quantity of money be
    reduced, its value will be raised, and prices in a corresponding
    degree diminished, as commodities will then have to be exchanged
    for a less amount of money. * * *

    In whatever degree, therefore, the quantity of money is increased
    or diminished, other things remaining the same, in that same
    proportion the value of the whole and of every part is
    reciprocally diminished or increased.

A curtailment of the volume of money in a country will, _ceteris
paribus_, increase the value of the money of that country. All the
authorities agree that this law applies to all forms of money, whatever
the material; so that it applies to paper money with precisely the same
force that it applies to metallic money.

Mr. Stanley Jevons, in his work on "Money and the Mechanism of
Exchange," says:

    There is plenty of evidence to prove that an inconvertible paper
    money, if carefully limited in quantity, can retain its full
    value. Such was the case with the Bank of England notes for
    several years after the suspension of specie payments in 1797,
    and such is the case with the present notes of the Bank of

Mr. Gallatin said:

    If in a country which wants and possesses a metallic currency of
    seventy millions of dollars, a paper currency to the same amount
    should be substituted, the seventy millions in gold and silver,
    being no longer wanted for that purpose, will be exported, and
    the returns may be converted into a productive capital, and add
    an equal amount to the wealth of the country.

In his Proposal for an Economic and Secure Currency Ricardo says:

    A well regulated paper currency is so great an improvement in
    commerce, that I should greatly regret if prejudice should induce
    us to return to a system of less utility. The introduction of the
    precious metals for the purposes of money may with truth be
    considered as one or the most important steps toward the
    improvement of commerce and the arts of civilized life; but it is
    no less true, that with the advancement of knowledge and science,
    we discover that it would be another improvement to banish them
    again from the employment to which, during a less enlightened
    period, they had been so advantageously applied.

Mr. J. R. McCulloch, in commenting on the principles of money laid down
by Ricardo, says:

    He examined the circumstances which determine the value of money
    * * * and be showed that * * * its value will depend on the
    extent to which it may be issued compared with the demand. This
    is a principle of great importance; for, it shows that intrinsic
    worth is not necessary to a currency, and that provided the
    supply of paper notes, declared to be a legal tender, be
    sufficiently limited, their value may be maintained on a par with
    the value of gold, or raised to any higher level. If, therefore,
    it were practicable to devise a plan for preserving the value of
    paper on a level with that of gold, without making it convertible
    into coin at the pleasure of the holder, the heavy expense of a
    metallic currency would be saved.

    It appears, therefore, that if there were perfect security that
    the power of issuing paper money would not be abused; that is, if
    there were perfect security for its being issued in such
    quantities, as to preserve its value relatively to the mass of
    circulating commodities nearly equal, the precious metals might
    be entirely dispensed with, not only as a circulating medium, but
    also as a standard to which to refer the value of paper.

    In adopting a paper  circulation--

Says Lord Overstone--

    we must unavoidably depend for a maintenance of its due value
    upon the adoption of a strict and judicious rule for the
    regulation of its amount.

Lord Overstone further declared that:

    The value of the paper currency results from its being kept at
    the same amount the metallic currency would have been.

Alexander Baring, in his evidence before the secret committee of the
House of Lords in 1819, said:

    The reduction of paper would produce all those effects which
    arise from the reduction in the amount of money in any country.

Prof. F. A. Walker says:

    Let me repeat, money is to be known by its doing a certain work.
    Money is not gold, though gold may be money; sometimes gold is
    money, and sometimes it is not. Money is no one thing, no group
    of many things having any material property in common. On the
    contrary, anything may be money; and anything, in a given time
    and place, is money which then and there performs a certain
    function. Always and everywhere that which does the money-work
    is the money-thing.

Sir Archibald Alison says:

    The suspension of specie payment in 1797, making bank notes a
    legal tender receivable for taxes by providing Great Britain with
    an adequate internal currency, averted the catastrophe then so
    general upon the Continent, and gave it at the same time an
    extraordinary degree of prosperity. Such was the commencement of
    the paper system in Great Britain, which ultimately produced such
    astonishing effects, and brought the struggle [of the Napoleonic
    wars] to a triumphant close.


The true money standard of any country is not the material of which the
money is made. The standard is not a concrete object, but a numerical
relation. It is the relation between the number of units composing the
monetary circulation of the country and the numbers of the population.

It is the legal-tender function that constitutes money. It is the power
which the law imparts to any material to pay debts and liquidate
obligations. It can not for a moment be doubted that the money function,
being conferred by the supreme authority, is the all-sufficient
guarantee of the money value. There is no necessity for re-enforcing
that value with any inferior value that may attach to the material on
which the money stamp is placed. The money function is immeasurably the
most important that can be conferred by society upon any material, and
it is absurd to urge that that function is not of itself sufficient for
the maintenance of the value of money. All the value that money can
possibly have--the totality of value that can exist in the shape of
money in any country--will attach to anything upon which the sovereign
authority stamps it, whether the material on which the stamp is placed
be gold, silver, paper, or anything else. Legislators or executive
officers of the Government, by increasing or decreasing the volume of
money, correspondingly decrease or increase the value of each unit of
that money. For no matter how many or how few the units may be, the
total value of the money of the country will be comprised within the
total number of those units. A change in the number of the units effects
a proportionate change in the value of each unit, and whatever the value
of the unit may be, it is of the utmost importance that that value
should remain undisturbed.

It is absurd to maintain that a gold unit, which, as time goes on, is
constantly increasing in purchasing power; is a better unit than a unit
of any other material that maintains unchanging value through time.

Whenever the business of the country accommodates itself to a given
number of units, the only question for the Government to deal with is to
maintain that value as free from disturbance as possible; and according
to all authorities on political economy that can only be done by
increasing or decreasing the number of units in circulation in
accordance with the demands of increasing or decreasing population.

If it be admitted that one of the most important offices of government
is to see that the equities are preserved between its citizens (and if
this be not so, to what purpose are our courts of equity instituted?),
then it can not be denied that it is one of the highest offices of
government to see that money, which measures all equities, and which
must for all time continue to be the principal measure in the service of
civilized society, shall be of unchanging value. It is impossible to
secure this characteristic of uniformity in the value of money if we are
to select as the only material on which to stamp the money function a
substance whose yearly production is becoming more and more limited, and
the prospect of whose sufficient yield becomes less and less


If the distinguished authorities I have quoted are correct, that a
diminution of the volume of money increases the value of the money
unit--which is but another form of stating that it lowers prices and
produces stagnation, distress, and discontent,--what good reason can be
offered by the advocates of the gold standard for confining the business
of this rapidly growing country to a basis of gold, when it is well
known that the entire stocks of gold and silver together are now
insufficient to serve the purpose of the world's money, and have to be
supplemented and re-enforced by large issues of paper notes? Do they not
reflect that the production of gold is constantly diminishing and is
likely to continue to diminish? And do they not know that our population
is growing at the rate of over 3 per cent. per annum and will double in
thirty years? Do they mean that the money volume which serves a
population of 65,000,000, and is far below the needs of that population,
will suffice for the 130,000,000 of the next generation? To be sure, if
we are to take no note of prices, the question is a simple one.

But prices must be taken into account. The entire money question is one
of prices. When it is said that money is scarce, what is meant is that
business is depressed and that money is difficult to get, at the present
range of prices. Should prices fall 25 per cent. money would be found
plentiful enough to conduct exchange at the lower range. But when prices
fall, goods sell below cost, business is unprofitable, workshops are
closed, and men are thrown into idleness. If lowering prices do not
affect injuriously either the business or the prosperity of the country,
then it makes no difference what the volume of money may be; a small
amount will meet the requirements as well as a large amount. In that
case, the gold standard is as good as any.

But if gold alone is sufficient to bear all the enormous monetary
burdens of the Western world, why do the advocates of the gold standard
admit the necessity for any more circulation? To be logical, instead of
favoring an increase of credit money, which has always lurking within it
an element of danger to the business of the community, they should
demand the retirement of the $347,000,000 of greenbacks and the
$350,000,000 of coined silver, and base the business of the country
exclusively on what they call "honest money." If that should be done all
that could happen would be a fall in prices. Judging by the experience
of the past it would not be surprising if the next move of the
gold-standard men would be an agitation for the retirement and
cancellation of the greenbacks. Such a movement is fully in harmony with
the opinions of the gold-standard advocates for the past twenty years.
Indeed, the Secretary of the Treasury who took charge of the finances at
the opening of the last Administration, himself a banker, recommended
the demonetization of the greenbacks almost as vigorously as he opposed


Money is valuable rather for the service which it performs than for the
material of which it is composed.

When we consider the transcendantly important character of the service
which money performs--when we reflect that, without it, the achievement
of an advanced civilization would be impossible, we can not escape the
conclusion that, compared with the value of that service, the commodity
value of any material on which the money function may be stamped is too
trifling to merit serious attention.

This will be made clear by reflection on the necessities of the

So long as society chooses to maintain the automatic or metallic
money-system, it must be obvious that to escape the evils that would
result from a sudden and overwhelming increase in the supply of the
money-material as compared with the entire stock in existence, and the
infinitely more serious evils that would result from a wholly
insufficient yearly addition to that stock, it must have on hand an
enormous accumulation of the metals on which the stamp is placed. It
must be manifest that no material would be fit for universal acceptance
for so important a function as money unless there were available so
great a quantity of it that no sudden shock could be inflicted on
society by ordinary fluctuations in the current yield, or in the current
consumption in the arts.

But, in the nature of things, a supply sufficient to effect that result
would be so enormous as practically to destroy the market value of the
material as a mere commodity if the money function and use were
withdrawn from it.


Mr. Giffen the statistician of the London Board of Trade, in an article
recently published in an English magazine, berating and deriding the
bi-metallists, maintains that it is not the demand for gold as money,
but for gold as a commodity, to be used in the arts, that determines its

To prove his case, Mr. Giffen states that the supply of gold is about
$95,000,000 per annum, the annual demand for the arts $60,000,000, or
about two-thirds of the annual supply; while the demand for money is
only $35,000,000, or about one-third that supply. He therefore argues
that the art demand, being the greater of the two, contributes more
largely to the maintenance of the value of gold than does the demand for
that article as money. It is hardly necessary to point out the absurdity
of this claim.

The commodity demand in any one year is not made upon the current year's
supply, but upon the entire amount in existence, which, is estimated to
be about $4,000,000,000. If the demand for the arts entirely ceased,
would the addition, to the money volume, of the $60,000,000 now used in
the arts produce any appreciable effect on the value of the
$4,000,000,000 in existence?

On the other hand, what is the demand on gold for the money use? All the
labor and all the salable property of the western world are constantly
offered in exchange for it. It is a moderate estimate to assume that
each dollar is earned, demanded, and paid once a week, or fifty times in
each year. This constitutes a total annual money demand of
$200,000,000,000, compared with which colossal sum how inconsequential
is the commodity demand of $60,000,000 in maintaining the value of gold.

The amount of gold annually used in the arts is not very definitely
ascertained, but in 1886 it was estimated by the then Director of the
United States Mint to be $46,000,000 per annum. Mr. Giffen estimated it
at $60,000,000. It is my opinion that the arts forage on the money-stock
of gold to the extent of about the entire annual yield. The bullion or
commodity value of that metal being determined by its money value,
whoever desires to use it for any purpose other than money, takes the
bullion at its coinage value, or else melts up the coin.

Were gold demonetized and deprived of its money function, and its demand
confined solely to that arising from its adaptability for various other
purposes, the present stock of that metal on hand and in use as money
would, according to the estimates of the director of the mint, supply
the art demand for more than seventy-five years to come. But, assuming
that the estimate of the Director of the Mint is too low, and that my
own is nearer the truth, there is at least fifty years' supply on hand.
Were there fifty or seventy-five years' supply of any other commodity on
hand in the market, what would be the commercial value of that
commodity? What would be the value of copper, of brass, or of iron, if
there were fifty or seventy-five years' supply of either of those metals
in the market for disposal at one time? Nobody can pretend that any
commodity of which there is an available supply on hand equivalent to
the whole demand for fifty or seventy-five years can have any but the
most trifling value.

Contrary, therefore, to the generally received conviction that the
commodity demand is the dominating force in fixing the value of gold I
maintain and insist that the commodity demand, if entering into the
account at all, is insignificant. It is the supremely important
_money_-demand, as correlated to the supply, that fixes the value of all
money of every description whatsoever.

The demand for gold as a commodity is limited and fluctuating, but when
that metal is invested by law with the higher function of money, and
thus constituted a common denominator of all values, that limited and
fluctuating demand is changed to an unlimited and constant one, which
fixes its value for other and inferior uses. If the commodity-demand for
gold were, as many believe it to be, essential to its acceptance as
money, it would be a great misfortune to society. The happiness and
prosperity of the world, if not wholly dependent upon, are largely
influenced by, steadiness in the value of money, and this can not exist
without steadiness in its volume. Whatever demand exists for gold as a
commodity can only affect the volume of money injuriously--that is to
say, by decreasing it. The admonition of history is that a deficiency in
the money-supply is more probable, and infinitely more to be feared than
an excess, and this deficiency is, in great measure, caused by the
insidious and constant encroachment, upon the precious metals, of
demands for them for other than the money use. When we contrast the
magnitude of the world's interests and equities, which rest on
steadiness in the value of money, with the comparative unimportance of
the uses of the metals as commodities, it becomes apparent that the
subjection of the value of money to disturbance from the demands for
gilded signs, looking-glasses, bangles and breast-pins, is an evil for
which society is but poorly compensated by the benefits derived from
such uses.

Whatever other quality gold may posses than as the bearer of the money
function is inconsistent with the healthful and proper exercise of the
task assigned it as such. Whenever any portion of the metal is used for
any other purpose than money it destroys the money and thus changes the
value of every unit of money in circulation, for, at already
stated--other things remaining unchanged--the value of each dollar
depends on the number of dollars that are out. Without forewarning, and
with out knowledge on the part of the people, large amounts of the money
volume, on which so infinite a number of equities rest, and on the basis
of which all debts and time contracts have been entered into, are, as it
were, surreptitiously abstracted and appropriated to other and always
inferior uses, for by far the highest and noblest use of any material
upon which the money function has been conferred, is the money use. No
other use can possibly be so high or so noble as that of maintaining all
equities undisturbed.

It seems unworthy a highly developed civilization which, as to all
subjects other than money, regulates its affairs by the application of
intelligence, and bases its policies upon exact data, scientifically
ascertained and correctly applied, to depend for its money system upon
the accidents, make-shifts, and expedients to which primitive society,
by reason of the limitation of its powers and the undeveloped condition
of the human mind and hand, was compelled to resort. If the quantitative
theory of money be correct--if the money standard be, as I insist it is,
a steady and duly proportioned numerical relation existing between the
units of population and units of money--it is the duty of society and
government to see that as far as practicable that principle is put into

The history of the production of the precious metals from the remotest
ages demonstrates that under the automatic system of money this can only
be effected by the unrestricted coinage of, and conferring the full
legal-tender function on, both metals.


If a change in the whole number of money units in circulation relatively
to population and business do not affect the value of each unit, then no
objection can be found to the proposition recently presented in the
Senate by the distinguished Senator from California, which created some
surprise among Senators. The resolution of that Senator contemplates a
loan by the Government to holders of real estate based upon the security
of the property; and the issue of a large amount of Treasury notes for
that purpose. Certainly, if a dollar, in order to perform properly the
money function, must have in it or back of it a dollar's worth of
material, there can be no safer security found than that suggested by
the Senator from California, namely, the arable land of the United

It is the most absolutely secure of all securities; it can neither run
away nor be stolen, it can not be burnt up, lost, or destroyed.

Arable land is, in and of itself, capable of supplying all basic wants,
and must be always in demand, while gold, so far as concerns any use to
which it is, or can be applied, might be dispensed with altogether, with
scarcely any inconvenience to society.

Certainly money based on land would seem to be better than money based
on gold. Senators who are sticklers for so-called "intrinsic value"
money, and "full-value" money, should be found supporting that
proposition. But it must, on reflection, be obvious that, other things
remaining unchanged, whenever the total number of units of money (or
dollars) in the circulation of a country increases, the value of each
unit will decrease. It is an axiom of political economy that no amount
of increase in the number of units of money in a country increases the
aggregate value of the money of that country.

The aggregate value of the money in circulation in a country, can,
_ceteris paribus_, be increased only by an increase of population and
business, that is to say, by an increase in the demand for it.

If, without increase of population, the money of a country be increased
from, say, $1,000,000,000 to $2,000,000,000, the effect would be not to
add to the aggregate value of the money of the country, but to decrease
the value or purchasing power of each unit of the money, so that it
would take ten dollars to buy what had before cost but five.


The history of the world affords no example of a money system regulated
by human prescience and intelligent calculation. It is not too much to
say that the money system of the world--the most important associative
instrumentality of civilization, in so far as it is not controlled for
their own advantage by the creditor classes--is practically the result
of accident. We are even less logical than the ancients, for they
availed themselves of the entire supply of money possible to their
civilization and development. They used the full yield of both silver
and gold, while we, in order to line the pockets of a privileged caste
of money-lenders, reduce the money volume to the lowest possible minimum
by discarding one of those metals and making all debts payable in the

Gold has been erected into a fetich by methods familiar to the pagan
priesthood, who forbade investigation of the claims of their idol to the
superstitious veneration of their followers. The quality of a universal
standard claimed for gold has been set up by the classes which, like
that priesthood, had interests to be served by the superstition. All
things else may be subjected to the test of reason and argument, but the
slightest approach to a scrutiny of the claims of gold as a much-vaunted
universal standard of valuation has been repelled by interested casuists
and sophists who constitute the sacred guard of the temple of the idol.

The people of this country, Mr. President, begin very seriously to doubt
the sacredness of a so-called standard by which they have been robbed of
thousands of millions of dollars--a standard that despoils and
impoverishes the toiling masses, in order to swell the plethoric pockets
of the privileged few. From all parts of the Republic we learn that the
people have become aroused on this subject, that they have discovered
gold to be a standard, not of valuation, but of spoliation and

The world at large shares to a great extent in the doubts entertained by
the people of this country as to the orthodoxy of the continuing worship
of gold. Throughout all Europe the suspicion is beginning to make itself
felt, among those who have no personal interest at stake, that the
constantly appreciating value of this metal bodes no good to society,
however advantageous it may be to the moneyed classes, and especially
the money lenders. It begins to be feared that there may be too long a
persistence in this artificial standard, and that the pressure upon the
people, in the fall of prices and the increase of the burden of debt and
of taxes, which multiply with time, may have serious consequences upon
public order. The stock of gold, never half enough to meet the wants of
the people anywhere, is year by year being drawn upon more and more for
use in the arts, while the yield from the mines is decreasing, and
giving no promise of any material increase from any quarter.

The pressing need of the time, the standard for which the people are
calling, is a standard of equity, a standard of justice, a standard that
shall measure fairly and impartially the rights of both parties to a
contract, that will not wrongfully and stealthily add to the burden of
the obligation on either side, that will not, under the guise of fair
dealing, rob one of the parties for the benefit of the other. The first
indispensable step to a realization of that standard is the full
restoration of silver to its rightful position as a part of the money of
the world.

In any discussion of the question, it would be uncharitable not to make
allowance for the force, on many conscientious minds, of what, to the
free and unprejudiced inquirer, can only be regarded as an absurd and
meaningless superstition, which, notwithstanding the advance of thought
in other directions, still persists in disarranging the industries and
vexing the civilization of an enlightened age. It is to the strength of
this obdurate superstition that we must ascribe the horror with which
many minds contemplate the possible loss to the country of a part of its


Any prospect of the outflow of gold is regarded as the opening of a
veritable Pandora's box, from which must issue forth all the evils that
can afflict mankind.

It is to this fear, no doubt conscientiously entertained, that we must
attribute the declaration of the President of the United States that we
do not dare to tread on the edge of so dangerous a peril. It is not
difficult to make the statement, but it will be very difficult to prove
that we stand on the edge of any peril whatever, if most or even all our
gold should go.

We heard this same apprehension expressed, and with equal, if not
greater, force twelve years ago, when the silver question was before
this body. We were then assured by the ablest of our so-called
"financiers" that the country would be denuded of its gold and that all
manner of dreadful catastrophies would result. The prospect was
represented to be appalling, although I do not remember that any reasons
were given to show how or why gold should leave the country, nor that
any statement was made as to exactly how this country would suffer if it
did leave.

For my own part, Mr. President, I regard it as a matter of very little
consequence whether gold goes out or not. Certainly if, in order to
retain gold, we must sacrifice justice, then I say let gold go.

It is not of so much consequence that we should retain gold for the
benefit of a small coterie of importers as that we should preserve the
equity of time contracts between the millions of our own people who
import no foreign goods. It is monstrous to think of violating all
equities in time transactions--and nine out of every ten of our domestic
business transactions are of that character--for the absurd and
inconsequent purpose of keeping in this country some particular
commodity, whether it be designated as money or otherwise.

The hoarding or the outflow of gold is a hardship when, under the law,
somebody is obliged to have it, as was the case during the war, when
gold alone would pay duties on imports. Combinations to hoard gold at
that time frequently involved great loss to the importer. But thanks to
the silver legislation of 1878 and other legislation making our Treasury
notes receivable for customs dues, no damage could now result from any
attempted corner in gold.

The creditors of this country never can convince the enterprising and
energetic people who form the debtor class that it is to our interest
that a certain material shall be kept in the country as money, if the
expense of keeping it is that the debtors shall continue to be despoiled
as they have been for the past fifteen years.

If we can only retain gold at the expense of steady and unwavering
prices, and at the expense of a steady and unchanging value in money,
then the quicker gold goes out the better. The constantly increasing
value of gold by reason of its increasing scarcity means the constantly
increasing burden of all debt, and involves the final absorption of all
the property of the country by the creditor classes. Under the operation
of the present system, by which prices are constantly falling and money
is constantly increasing in value, the surplus earnings of the people
are flowing in a steady stream into the vaults of money-lending
institutions, and into the pockets of creditors.

In a very intelligent article published in a late number of an
influential magazine--the Political Science Quarterly--there is the
significant statement, apparently derived from the best sources, that
in the year 1879-'80, one-half of all the mortgages in the State of
Indiana were foreclosed.

It were better for society that property should at once be confiscated
than that the great masses of the people in every community should have
to struggle through years of painful and exhausting effort in the face
of constantly falling prices and then in a large percentage of cases to
lose their property at last. But this can not be avoided so long as we
attempt to keep up what is called the gold standard. It is a necessary
consequence of the gold standard that we shall have the scale of prices
that obtains in gold standard countries If the presence of gold in this
country is to destroy our people, who doubts that it should go? If its
presence is to result in the destruction of equity and justice, who
doubts that it should go?

Nearly every witness who testified before the secret committee of the
House of Commons in 1857 agreed that gold could only be held by
paralysing the business of the country. It is estimated by witnesses who
testified before that committee, that in the panic of 1847, in Great
Britain, the property of the country, by reason of the measures rendered
necessary to maintain the single gold standard, was depreciated
$1,500,000,000. I commend that report to the careful and serious perusal
of the advocates of the single gold standard in this country.

Among the witnesses before the committee were John Stuart Mill, Lord
Overstone, and many other men distinguished in the world of letters and
finance. I am informed by the Librarian of Congress that there is but
one copy of the work in the United States. It would be well worth while
for Congress to order a number of copies of it printed, for there is no
work with which I am acquainted that contains so much practical
information as to the working of the single gold standard. According to
the testimony taken before that committee, the experience of Great
Britain since 1819 shows that gold alone, even when re-enforced by paper
money convertible exclusively into gold, instead of being a beneficent
instrument of valuation, has proved a cruel instrument of injustice.

A brief consideration of the causes which affect the movement of gold
will not be out of place in this connection.


Why is it that gold leaves country and goes to another? For one reason
only--the advantage of its owner. Whenever he can make a profit by
sending it out, the gold goes; and the period when that profit can be
made is indicated when the prices of goods that are internationally
dealt in are either rising in the country which it leaves or falling in
the country to which it goes. It is only to pay for importable goods
that gold ever leaves the country in which the owner resides. Being an
international money, and receivable everywhere at its full face value,
gold loses nothing by transfer; hence it is sent wherever it will for
the time being have the greatest purchasing power.

Whenever the general range of prices in this country of commodities
internationally dealt in becomes than higher than the general range of
the same commodities abroad, it is manifest that then gold can used to
advantage by purchasing those articles abroad and selling them here. If
the gold that goes out goes from stock that has been hoarded here, the
outflow has no immediate or direct effect upon prices in this country,
although, by increasing or "inflating" the volume of money abroad it
assists in raising prices there, and thus tends to secure for our
exported products a better price in the foreign market. But if the gold
goes from the amount that is in active circulation here, and if the void
created by this outflow is not filled with other forms of money, such as
silver, or paper, it results in a reduction of the volume of money in
actual use in this country, while at the same time increasing the volume
of money abroad.

This increase in the foreign money stock causes a rise of prices abroad,
while the corresponding reduction of our currency causes a proportionate
fall of prices here, hence there is a constant tendency to an
equilibrium of prices of all articles of international commerce.

No outflow of gold would follow a rise of prices here except in so far
as that rise affected articles internationally dealt in. No rise of
prices of such articles as we do not import would tend in any way to
drive out gold. If, for example, raw cotton should increase in price in
this country, that fact would not tend to drive out gold, because we do
not import raw cotton. But should the prices of articles of manufactured
cotton rise here above what those same articles could be bought for in
any foreign country our merchants would send abroad for them, provided
that, after paying the freight charges and customs dues, they could make
a profit on them.

So, also, if crockery-ware were made in this country, and its price
should rise to, say, double the present price, then, instead of buying
the American, or home-made article, our crockery merchants, finding that
they could buy in England, France, or Germany cheaper than they could
buy in this country, would decline to buy the American crockery, and
would send abroad for any article, provided that, after paying freight
charges and customs dues, they could sell it here at a profit. That
would tend to increase the shipments of gold to foreign countries.

That an outflow of gold does not follow from a rise of general prices,
but only of prices of articles of international trade, is manifest from
the fact that if land becomes cheap in other countries, gold does not
leave this country to buy it. When real estate is cheap in Brazil, or
Australia, or in Germany, France, or even England, the owners of gold in
this country do not send it abroad to make purchases of real estate.

So wages of labor may rise in this country, or compensation for all
manner of services that must be performed here, and gold would not leave
as a consequence. But if cloth were cheaper--quality considered,--in
England, France, or Germany, or at the remotest ends of the earth,--than
in this country, our merchants would send gold for it in order to sell
it here at a profit.

Altogether too much importance is attached to the possession of a large
stock of gold, unless that stock form part of the active circulation of
the country. So long as it remains in circulation it sustains prices and
develops industry and internal commerce. But the tendency of gold being
to find the most profitable field for operation, its continued presence
in the country can never be relied upon.

When we take gold from other countries prices in those countries fall,
owing to the reduction of the volume of money there; and owing also to
the action of the foreign banks in immediately raising their rates of
discount on commercial paper and suddenly calling loans. As there is
less money left in such country with which to pay for commodities, we
are obliged to accept lower prices for the products we ship to it.

The larger the stock of gold, therefore, accumulated by us the lower,
necessarily, must be the price which we can receive for our surplus
agricultural products.

In order to maintain parity between the metals, it is not necessary for
us to have all the gold we now have; $200,000,000, or even $100,000,000
of gold, would maintain that parity. The parity between the metals can
never be broken until all the gold leaves, and provided we retain one or
two hundred million, the rest can not be placed more advantageously than
where our languishing surplus products must be sold.

When gold leaves this country it is because prices here are rising.
Prices are now lower than they have been since 1847. Must they continue
declining in order that we may be able to retain all our gold? It is
manifestly impossible for the people of this country to prosper with a
constantly lowering range of prices. It is equally impossible for the
present level of prices to be maintained with a constantly increasing
demand for, and as constantly diminishing a supply of, gold. It is
universally admitted that an increase in the money circulation of this
country at the present time is an exigent necessity. The advocates of
the single gold standard, while admitting that we must increase our
money volume, the effect of which must be to maintain, if it does not
raise, the level of prices here, insist that we shall let none of our
gold go in order that prices abroad may rise.

Mr. BLAIR. May I ask the Senator a question?

Mr. JONES, of Nevada. Certainly.

Mr. BLAIR. Does the Senator mean to be understood that the falling of
prices is an absolute demonstration of the increased value of the money
without limitation?

Mr. JONES, of Nevada. I have already, in the early portion of my
remarks, had occasion to state that when a fall in prices was brought
about by a larger subordination of the forces of nature to the uses of
man, as where the comforts and conveniences of life could be produced
with less sacrifice than before, it was not an injury to society, but in
advantage. In other words, if, by a certain amount of sacrifice
seventeen year ago, only one pair of shoes could be produced, and if by
the same sacrifice two pairs could be now produced, there would be a
lowering of the price of shoes to about one-half of what it was
seventeen years ago, which would be a very great benefaction to mankind.

But, as I then stated, there is one certain sign that that is not,
except to the slightest extent, the cause of the present universal fall
of prices. When prices fall owing to improvements in manufacture,
business revives, the masses of the people are at work, those who toil
find themselves possessed of more of the comforts, of the conveniences,
and even of the luxuries of life than before. They are better contented
with their condition, and more buoyant and hopeful than before. On such
occasions money becomes more and more in demand than it was before, and
instead of being hoarded is put into active and productive business
where it will make a profit. But when interest falls, pari passu, with
the fall of prices, it shows that the fall of prices is not due, except
in the smallest degree, to improved methods of production, but to the
increased value of money.

Mr. BLAIR. I was not controverting the Senator's theory as to the
existing facts in this country, but I understood him to be laying down
an absolute principle, applicable under all circumstances and in all
times, that the fall of prices is a demonstration of the increased value
of money. I supposed that the fall in prices resulting from a
protective tariff was beneficial, and not an indication of an increase
in the value of money, and that that fall of price was not owing to the
increased value of money, but was by improved machinery and all that. So
it is possible that some of the fall in prices in this country may be
owing to increased facility in the matter of production and to the
beneficial operations of the protective tariff.

Mr. JONES of Nevada. Mr. President----

Mr. REAGAN. If the Senator from Nevada will permit me, I wish to ask the
Senator from New Hampshire if he means to be understood as assuming that
a protective tariff reduces the value of the commodities produced?

Mr. BLAIR. I was simply asking for information of the Senator from
Nevada, and he can answer that question much better than I; but the
Senator from Texas understands very well that I do believe a protective
tariff reduces prices.

Mr. JONES, of Nevada. Mr. President, so far as a tariff has the effect
of reducing prices in any country, it is not by reason of the levying of
any certain percentage of duty on the imported goods. The first effect
of the tariff certainly always must be to raise prices. The fundamental
theory of the tariff is--whether it be correct or not I am not now
discussing--that by that tariff you place the price of manufactured
goods up to a range at which they can be produced in the country in
which the tariff is levied, and upon the level of the range of wages and
manner of living which obtain in that country. By so doing, if you have
a proper volume of money, you set all your people at work, and keep them
at work at a variety of occupations. In such case every forge, furnace,
and factory becomes a school, every machine-shop an academy, and every
cunning device and invention becomes a lesson, teaching the people how
to deal with the subtle forces of the universe. So far as this country
is concerned the theory of the tariff is that 65,000,000 people should
have a varied and complete system of manufactures, which should supply
practically all their own wants, instead of an abnormal proportion of
them being driven into the single occupation of farming and relying on
foreign manufacturers to supply such finished products as they need. To
draw out and develop the aptitudes of a people a large variety of
occupations is indispensable. When all men are employed at their
aptitudes new inventions multiply, progress is accelerated, and the
secrets of nature are more rapidly unfolded. Hence the McCormick reaper;
hence the sewing-machine, that great instrument which clothes the world,
because of the discovery that the eye of the needle should be at the
point; hence the air-brake, the telegraph, the electric light, and
thousands of other inventions that a protected people originate and
develop, which would perhaps not have been originated or might have been
long delayed if it had not been for the discouragement to imports caused
by the tariff, and the encouragement to our people to go into
manufactures by which their varied talents are drawn out and cultivated.

There is no doubt that eventually as our conditions improve, increasing
numbers of our people will by degrees emerge from agricultural and enter
manufacturing pursuits. A tariff, by stimulating the organization and
development of industries, trains men to greater skill and perfection of
workmanship in a variety of departments, and with greater skill comes
greater efficiency of labor, and so greater economy of time. In that way
the prices of certain products are in time reduced; but that is not a
reduction of which any one complains.

The true cause of the present discontent will not be found in the
protective tariff, but in the exactions of the single gold standard.

Fifteen years ago England was on the gold standard. It is on the gold
standard to-day; yet prices in England are 35 per cent. lower than they
were fifteen years ago. There being no reason why there should be any
change in the trend of prices, so long as a fierce contest for the
possession of gold shall be waged between England, France, Germany, and
the United States, we are justified in assuming that a proportionate
decline of prices will continue. That means a further decline of 30 or
35 per cent. in prices during the next fifteen years. Where is this
tendency to stop? and if it does not stop, how long will it be before
the masses of the people become the bond slaves of the creditors? It is
shocking to the moral sense of mankind that a few money-lenders and
bondholders should thus be able, silently and insidiously, to wreck the
business of every country in the world by constantly increasing the
value of the money unit.

While admitting the necessity of more monetary circulation, our gold
standard friends fail to show us how it is possible for an increase in
the volume of money to benefit our merchants, farmers, or mechanics if
the prices that prevail in gold standard countries are to prevail here;
for that is what the gold standard means for us, Mr. President. It means
that the prices that rule in gold standard countries are to rule here.

The extreme indefiniteness with which the term "gold standard" is used
has so befogged the relation which gold money bears to industry and
commerce that people lose sight of the essential feature of that
relation. It is impossible to have a clear conception of the gold
standard without keeping in view exactly what is implied by the term.
What men must mean in this country by "the gold standard" is not the
touch of the metal, for they never touch it, and rarely, if ever, see
it. The maintenance of the gold standard here simply means the
maintenance here of the range of prices that prevail in gold-using
countries; that is to say, that low and lowering range of prices
rendered necessary by the attempt to measure the value of the constantly
increasing mass of the products of industry in all the western world by
the constantly diminishing volume of gold. No relief can come to the
toiling masses of this country until we can lift our prices above those
that now prevail in gold-using countries.

Even if our prices remain as they are and do not increase, gold will
eventually leave the country if it continue to increase in value as it
has been increasing during the past fifteen years. We have been enabled
to maintain the gold standard here for the past twelve years
notwithstanding a considerable addition of money other than gold to our
currency, but we have been able to do so only because other countries
have been using an equal or greater amount of money other than gold. We
have been using no greater proportion of silver or paper money than
other countries having the gold standard are using, hence we have been
able to maintain their level of prices and still keep the metals
together. But whenever we shall attempt to prevent a further fall or
prices in this country, it will be impossible for us to retain our gold
so long as prices in gold-using countries continue to decline as they
have been declining. Gold will leave as quickly because of contraction
abroad as of inflation here, if by "inflation" is meant a coinage of
money sufficient to maintain prices at a steady level.

Should gold leave the country, then, in order to supply its place, in
order to maintain the _status quo_ in prices, and prevent a further fall
from the present low range, we should need to have as many dollars of
silver in circulation as there are now dollars of gold. Gold would go
out only because our prices were rising, and as it went prices would
cease to rise. That process might continue until three or four hundred
million dollars of gold had gone. In all this, where would be the
disadvantage to our people?

Considering the rapidly increasing population and wealth of this
country, all the silver that can be procured from the mines will be
necessary to maintain the level of prices and to keep pace with the
increasing demands for money. If, however, it slightly exceeds--and it
could not at the utmost more than slightly exceed--the amount actually
demanded by increasing population and business, the over-plus of each
year would take a great many years to drive gold out of the country,
dollar for dollar. For, when prices here, of things internationally
dealt in, are at an equilibrium with prices of the same articles abroad,
gold can not go any faster than silver comes in.


For twelve years past we have had a silver coinage of nearly $2,500,000
a month, yet no gold has been driven out. Having tested the capacity of
that quantity of silver to drive out gold, we find that instead of
driving it out its coinage has resulted rather in bringing gold in. For,
to whatever cause the influx of gold may be ascribed, it is
unquestionable that the gold has come, and it has needed all that gold,
and all the silver that we have coined, to maintain international prices

It is admitted by all that gold can not go out except by reason of a
rise in this country of the prices of articles of international commerce
beyond the prices of the same articles prevailing abroad. It is only
then that it becomes more profitable to send out gold in payment for our
foreign purchases than to send out commodities--the products of our own
country. Commodities will always be sent out in payment for other
commodities so long as it is more profitable to send them than gold, and
when, by reason of low prices prevailing abroad and high prices here, it
is no longer profitable to send out commodities, purchasers send out
gold, but only because it is to their advantage to do so.

Now, having seen that the coinage of $2,500,000 of silver each month was
insufficient to so raise prices in this country as to induce gold to go
abroad, but that on the contrary it resulted in an influx and
accumulation of a large amount of gold, we may safely assume that only
so much of the amount of silver which Congress shall now provide for as
exceeds $2,500,000 a month will have any influence in raising prices in
this country above international prices, and so providing a stimulus for
gold to go abroad in payment for commodities imported into this country.

If the amount of silver which shall be now provided should be, say,
$5,000,000 a month, the excess over the present coinage would be
$2,500,000 a month. This, then, would be the amount that would drive out
gold. As one dollar of silver would drive out no more than one dollar in
gold, no more than $2,500,000 could go out monthly. That would leave in
circulation the same amount of money that is in circulation now. There
would still be no increase in the money volume of the country, and, with
no increase in the volume of money, prices here would not rise above
international prices. At the rate of $2,500,000 a month, it would take
twenty years to drive out $600,000,000 of the $700,000,000 of gold now
in this country. It would take even longer than that, because the
$600,000,000 driven out would tend to raise international prices abroad,
and so check the outflow of gold from here.

Mr. McPHERSON. Will the Senator yield to me for a question, or does he
prefer to go on?

Mr. JONES, of Nevada. I am always ready to answer a question.

Mr. McPHERSON. I do not want to interfere with the Senator's line of
argument, or with his speech in any form, but it does seem to me that
there is something fallacious about the Senator's argument, or else my
judgment and the experience of the world is all wrong. I wanted to ask
the Senator this question: If it be known that the Government of the
United States, if you please, by such an increase of the silver coinage
in this country as will be produced by the free coinage of silver, to
which theory, as I understand, the Senator is fully committed--if that
be the theory of the Government hereafter by the command of Congress, I
want to ask the Senator if he broadly and boldly asserts that no gold
can be driven out of the country to a greater extent than dollar for
dollar for the silver that comes in?

Mr. JONES, of Nevada. Absolutely; I say so.

Mr. McPHERSON. Then I want to ask the Senator another question, which
seems to be pertinent. Does the Senator assert that if a 72-cent dollar,
the value in bullion of a silver dollar during the year 1889, as has
been furnished us by the Director of the Mint and the Secretary of the
Treasury, were coined without limit (I say without limit, the limit
being, of course, the amount of bullion that is brought to the Treasury
to coined), and the people of this country who have been in favor of a
safe and honest currency, a currency either gold or as good as gold,
which the Treasury has been able to maintain, having forced no silver
upon the people if they did not wish it, and in that way the silver
dollar having been maintained equal to the gold dollar, I want to know,
with the people of this country to-day the holders of $500,000,000 of
gold, how it is possible for the Senator to believe that with a 72-cent
dollar to take its place the gold coin would circulate for a single
week, or a single day, or a single hour? If they have the gold will they
not hold it?

Mr. JONES, of Nevada. The Senator has so involved his question with his
argument that I can scarcely get at what he wants me to answer.

Mr. McPHERSON. The question I want the Senator to answer is this: Will
the people of this country, the financiers of this country, the banks,
the moneyed men holding $500,000,000 of gold, with a certainty of the
free coinage of silver and going to a silver basis, for that is what it
means, put their gold in circulation, or will they hoard it? Will it

Mr. JONES, of Nevada. I scarcely know what the Senator means by a
"silver basis." He talks about a 72-cent dollar. We have never seen a
72-cent dollar. The papers in the East have told us that the silver
dollar was worth 72 cents. I recollect talking on that subject once with
some Senators in the cloak-room. During the conversation one of the
Senate pages brought me a telegram, on which he said the telegraph
messenger had told him there were 50 cents due. I give the page a silver
dollar and said to him: "I have been informed by some very respectable
and intellectual gentlemen in here, some of them now candidates for the
Presidency even, that this dollar is worth only 75 cents. I do not want
to cheat a little boy. Take this out, and if the boy thinks it worth
only 75 cents he can send me back 25 cents, and if he thinks it is worth
a dollar he can send me back 50 cents. I will leave it to him." The page
brought back 50 cents and said the telegraph boy told him he did not
know what those old "duffers" in there might say, but it was as good a
dollar as he wanted and was very hard to get. [Laughter.]

The Senator talks about the bullion value as though that had anything
whatever to do with the value of the dollar. I have attempted to
demonstrate that the material that was in the dollar has nothing
whatever to do with it. Let me illustrate. Suppose the entire supply of
silver of the world to-day were $60,000,000. Suppose the law limited the
coinage of it to $58,000,000, and every dollar coined was at par with
gold. Suppose there were a demand for half a million dollars of silver,
to be used in the arts, and that the remainder ($1,500,000) of uncoined
silver were barred from the imperial money use. That supposes a supply
of $2,000,000 left after satisfying the requirements for coinage, and
supposes only half a million dollars' demand for use in all the arts. In
that case there would be a $2,000,000 supply bearing down a half million
dollars' art demand, or a proportion between supply and demand of 4
to 1. Suppose that under those circumstances silver bullion went to 50
cents an ounce. Would the Senator then say that 50 cents an ounce was
the value of the $58,000,000, and all the rest of the coined silver of
the western world, while by coining another million and a half, which
would be nothing to a country like this, all the silver would be at par
with gold? Every ounce of silver coined in Europe and the United States
is at par with gold, a thousand or twelve hundred million dollars of it
to-day in France, $200,000,000 in Germany, $370,000,000 of it here. We
are not dealing with the price of silver bullion, that portion of silver
that is deprived of its immemorial use as money. We do not say what the
commodity demand for silver may make that worth. Such a consideration
has no bearing whatever on the value of money.

I will suppose that in some one county of the United States a law were
passed that the wheat grown in that particular county should have no
right to go through the grist-mill, and that that wheat, as it might
very naturally do, being deprived of use, fell to one-half the price of
the wheat grown elsewhere in the country. Would the price of the wheat
of that one county thus under interdiction and denied the grist be a
fair gauge by which to measure the value of the entire wheat crop of the
country? Manifestly not. All we have to do is to take up the little
"slack" of silver, and all of it will at once be at par with gold; then
we shall hear no more about the "commodity value" of silver. That is the
contention that the bimetallists make.

Mr. HEARST. It will be $1.29.

Mr. JONES, of Nevada. It will be $1.29 an ounce in one week--in three
days--in fact the very moment you give it back its ancient right of
coinage and restore to it its full money power. You coin of gold all
that is brought to the mint, and you deny to a certain portion of silver
that same long-established privilege, and then you measure the value of
the whole supply of silver by that of the little fraction that is not
coined, and which therefore has to find a market as a commodity.

Mr. McPHERSON. Then, if the Senator will permit me, he necessarily
proposes that the Government of the United States shall take up all this
"slack," as he calls it, in the surplus quantity of silver and shall
use it in the coinage. The mints of Europe being closed against the
coinage of silver, there is no other place where it will be coined. Now,
if the Government of the United States should use all the surplus silver
in the country, which has simply forced the price down since we
remonetized silver in 1878 more than 20 per cent.----

Mr. JONES, of Nevada. Gold has risen 35 per cent.

Mr. McPHERSON. Then I think the Senator's argument is upon this idea and
upon this plan, that after we are upon a silver basis, as we should be
most assuredly, there would be no inequality in the money, because it
would be all silver.

Mr. JONES, of Nevada. And no inequality between it and gold.

Mr. McPHERSON. Certainly not, because there would be no gold in
circulation. But let me ask the Senator another question. While he can
use his short-legged silver dollar for the payment of debts, when he
comes to make a new obligation would not the price of the goods assume a
price equal to the difference between gold and silver? In other words,
while you can use a debased currency for the payment of debts, if a
legislative decree requires that you shall accept it, you can not use it
for any other purpose.

Mr. JONES, of Nevada. I can not understand the Senator. We have not
provided any "short-legged" dollar. The Senator is assuming a good many
facts and attempting to adjust me to them. I ask the Senator to wait
until he has heard my argument, and I invite the Senator then to make
reply to it.

Mr. McPHERSON. I am sorry that I interfered with the Senator.

Mr. JONES, of Nevada. It was no interference on the part of the Senator,
except that I can not separate the Senator's questions from the argument
and assumptions that he makes. As to the outflow of gold, as I have
said, it would take a long time for even $400,000,000 of it go. The
amount of gold driven out would tend to raise prices abroad by making
money more plentiful there, and so check the outflow of gold from here.
When Senators speak about $600,000,000 of gold being withdrawn from
circulation here a question that is a little curious arises. What are
these people who own it going to do with that gold after they have
withdrawn it from circulation? Are they going to invest it in Great
Britain? Are they going to invest it in France? Are they going to the
Cape of Good Hope to invest it? If they are they will reverse the policy
that English capitalists are pursuing now and have been pursuing for
years--bringing their gold over here for investment. The Senator tells
us that gold is to disappear from circulation. What will the owners do
with it? Where and in what are they going to invest it?

Mr. McPHERSON. It will be held for a premium.

Mr. JONES, of Nevada. But who will buy it at a premium? Who needs it at
all? For what purpose is it needed? Who is going to pay any premium for
it? Nobody is "short" on it, and there is no law which forces anybody to
have it.

Mr. President, nobody wants it enough to give a premium for it. It is
only worth what is daily paid in the markets of the world and nobody is
going to pay a premium for it. It is a bogie with which to frighten the
people who demand reform in the currency of this country. Let them
withdraw their gold.

I tell the Senator it is not the men who hoard the gold in vaults who
maintain or promote the prosperity of this country, but the toilers in
the wheat-fields and on the farms of the country, the men who work in
the planing mills, the forges, the furnaces, the factories, and in all
our institutions of industry. It is they that bring us our prosperity,
and not these people who are gambling for premiums on gold.

Let them gamble among themselves; let who lose and let who win, the
people care nothing. The people of the United States are going to
institute a money that shall install and maintain justice as between the
citizens of this country, and they will not be impeded. I can tell the
Senator that neither his party nor the Republican party will ever impede
the march that this great country is about to make--the first in the
world, I am glad to say--in adjusting to the demands of industry and
commerce, that great instrument, money, the non-adjustment of which, as
I have already stated, has, in my belief, caused more misery than was
ever caused by war, pestilence, and famine.

But to resume at the point where I was interrupted:

The gold going out would tend constantly to restore the equilibrium
between our prices and those of the gold-using countries, making the
proportion of the gold outflow each year less than that of the year
before. If there be included in this computation the remaining
$100,000,000 of gold, which would remain after the outflow of the
$600,000,000, we shall be compelled to come to the conclusion that the
time when our stock of gold can be driven out will be almost
indefinitely postponed.

But even should all our gold go by reason of the remonetization of
silver, it will not be to the injury of the gold standard, but to its
great advantage, and to the equally great advantage of the masses of the
people, as well of this country, which the gold may leave, as of all
countries to which it may go. It will make the "gold standard"
consistent with the prosperity of the countries maintaining it. But
instead of preserving the gold standard of to-day, which is a standard
of wrong, it will inaugurate a gold standard that will approximate to a
standard of justice.

The new "gold standard" that would be established by the outflow of our
gold would be a standard of prices resulting from the influx into
England, France, and Germany, the principal gold-using countries of
Europe, of more than $600,000,000 of money.

So considerable an addition to their money-stock would raise prices in
those countries, and by remaining there, would, with the current
production, which we could spare to them, tend to maintain prices at a
steady level. Such a condition would be an inestimable boon to the
overburdened masses of Europe, and their prosperity would not be
attained at the expense of the people of the United States. We could
well afford to let gold go, since, by the coinage of silver, our own
money volume would not be reduced. The rise of prices which it would
effect in Europe would not only, as I have stated, secure better prices
for our exported goods, but would undoubtedly enable us to maintain
prices here at a substantial parity with those of Europe--that is to
say, with those of the new, more rational and more beneficent gold
standard which would be established by the full remonetization of silver
in this country.


But, aside altogether from this consideration, the gold that we already
have is really a surplus--it is practically a dead and useless article.
Gold, Mr. President, can not with entire truth be said at the present
time to form any part of the money of this country. Who but a bank clerk
ever sees a gold piece? With the exception of a few million dollars on
the Pacific coast, gold is not really in circulation in this country.
It is performing no useful function whatsoever. While I am engaged in
delivering these remarks I venture to say no Senator within the sound of
my voice has in his pocket a single gold coin of any denomination
whatever, or any paper representative of one.

This is the answer to the fear expressed by some Senators that when
those who hold gold shall observe the enlargement of the money
circulation by the issue of the proposed Treasury notes they will be
likely to hoard it. They are already hoarding it. Every body knows that
that is about all that gold is used for in this country. It is hardly
possible for it to be hoarded to any greater extent than it is at the
present time. So little is this metal in circulation that I do not deem
it any exaggeration to say that there are millions of people in the
United States, "native here, and to the manner born," who have never in
all their lives seen a gold coin.

How absurd, then, is the claim that any loss is to be suffered by the
alleged future hoarding of gold, or that any calamity can occur to
65,000,000 people by the disappearance of that which has long since


One of the staple arguments of the advocates of the single gold standard
is, that if our stock of gold were greatly reduced we should be unable
to make payments to foreign countries in case the balance of trade
turned against us. It is only through an excess of imports over exports
that gold could go, and this country now produces of nearly all articles
almost all that it consumes. With the exception of two years there has
not been a balance of trade against us for fourteen years, as the
following table will show:

  _Value of merchandise imported into, and exported from, the United
  States, from 1876 to 1889, inclusive; also annual excess of imports
  or of exports--specie values._

   Year |            |            |              | Excess of |Excess of
  ending|   Total    |   Total    |Total exports |  exports  | imports
   June |  exports.  |  imports.  | and imports. |    over   |   over
   30-- |            |            |              |  imports. | exports.
        | _Dollars._ | _Dollars._ |  _Dollars._  |_Dollars._ |_Dollars._
   1876 |540,384,671 |460,741,190 |1,001,125,861 | 79,643,481|   --
   1877 |602,475,220 |451,823,126 |1,053,798,346 |151,152,094|   --
   1878 |694,865,766 |437,051,532 |1,131,917,298 |257,814,234|   --
   1879 |710,439,441 |445,777,775 |1,156,217,216 |264,661,666|   --
   1880 |835,638,658 |667,954,746 |1,503,593,404 |167,683,912|   --
   1881 |903,377,346 |642,664,628 |1,545,041,974 |259,712,718|   --
   1882 |750,542,257 |724,639,574 |1,476,181.831 | 25,902,683|   --
   1883 |823,839,402 |723,180,914 |1,547,020,316 |100,658,488|   --
   1884 |740,513,609 |667,697,693 |1,408,211,302 | 72,815,916|   --
   1885 |742,189,755 |577,527,329 |1,319,717,084 |164,662,426|   --
   1886 |679,524,830 |635,436,136 |1,314,960,966 | 44,088,694|   --
   1887 |716,183,211 |692,319,768 |1,408,502,977 | 23,863,443|   --
   1888 |695,954,507 |723,957,114 |1,419,911,621 |    --     |28,002,607
   1890 |742,401,375 |745,131,652 |1,487,533,027 |    --     | 2,730,277

This table shows that while for last year there was a balance against us
of $2,730,277, and the year before of $28,002,607, for all former years
from 1887 back to 1874 the balances were in our favor--all the way from
$23,000,000 in 1887 to $265,000,000 in 1881. But the total want of
significance so far as the movement of gold is concerned attaching to
any figures showing a balance of trade against the United States will be
seen by an analysis of the figures for any one year. Let us take for
example the imports and exports for 1889 and analyze them by countries.

I now present a table in which I place in one group the gold-using
countries, and in another the silver and paper-using countries.

  _Exports and imports of the United States to and from the various
  gold-using and silver-using or paper-using countries of the world
  for the fiscal year ending June 30, 1889._

               Countries.             |    Exports.   |    Imports.
  Gold-using countries:               |               |
    Canada                            |  $42,141,156  |  $43,009,473
    Belgium                           |   23,345,219  |    9,816,435
    Denmark                           |    3,903,937  |      846,904
    France                            |   46,120,041  |   69,566,618
    Germany                           |   68,002,594  |   81,742,546
    Great Britain                     |  382,981,674  |  178,269,067
    Greece                            |      165,079  |      988,923
    Italy                             |   12,604,848  |   17,992,149
    Netherlands                       |   15,062,939  |   10,950,843
    Portugal and its possessions      |    3,266,814  |    1,282,556
    Spain                             |   11,946,348  |    4,636,661
    Sweden and Norway                 |    2,615,569  |    2,983,319
    Turkey                            |       --      |    4,687,731
    British possessions in Africa     |    2,936,213  |      895,344
    British possessions in Australia  |   12,321,980  |    5,998,211
                                      |               |
  Silver and paper using countries:   |               |
    Austria-Hungary                   |      726,156  |    7,642,297
    Russia                            |    8,364,545  |    2,985,631
    Mexico                            |   11,486,896  |   21,253,601
    Central America                   |    4,325,923  |    8,414,019
    Hawaii                            |    3,375,661  |   12,847,740
    Argentine Republic                |    9,293,856  |    5,454,618
    Brazil                            |    9,351,081  |   60,403,804
    Chili                             |    2,972,794  |    2,622,625
    Peru                              |      780,835  |      314,032
    Colombia                          |    3,821,017  |    4,263,519
    Uruguay                           |    2,192,848  |    2,986,964
    Venezuela                         |    3,738,961  |   10,392,569
    Cuba                              |   11,691,311  |   52,130,623
    Hayti                             |    5,340,270  |    5,211,704
    Porto Rico                        |    2,224,931  |    3,707,373
    British West Indies               |   10,453,973  |   20,723,268
    Dutch West Indies                 |      887,778  |      654,320
    China                             |     6,477,512 |   18,508,678
    India, British                    |     4,330,413 |   20,029,601
    India, Dutch                      |     2,249,604 |    5,207,254
    Japan                             |     4,619,985 |   16,687,992

By this table it is seen that the only gold-using countries having a
balance of trade against us are Canada, $868,317; France, $23,446,577;
Greece, $823,824; Germany, $13,739,952; Italy, $5,387,301; Sweden and
Norway, $367,850; Turkey, $4,687,731--making a total balance against us
in gold-using countries, $49,321,452--against which we have a balance in
our favor with Great Britain alone of over $200,000,000.

The balance against us in favor of all the silver using countries could
of course be readily settled in silver; and by carefully noting the
figures of the table last given it will be seen that it is in the last
degree improbable that there will ever be a balance of trade against us
in the gold using countries, taken as a whole.

Hence it is clear that if we had no gold at all we could readily settle
all foreign balances that might be against us.

Nations, however, ultimately, and on the whole, square their accounts
with commodities. Every nation must buy what it wants with its own
products. In this country especially have we nothing to fear, because
any temporary balance against us could always be met by the yield from
our own mines. No country has any difficulty by reason of my difference
in money systems in buying what any other nation has to sell.

This view is supported by all writers on political economy. I need
quote but one. Professor Cairnes, professor of political economy in
the University College of London, in his able work on "Some unsettled
questions in political economy" (1874), says:

    It appears to me that the influence attributed by many able
    writers in the United States to the depreciation of the paper
    currency as regards its effects on the foreign trade of the
    country is, in a great degree, purely imaginary. An advance in the
    scale of prices, _measured in gold_, in a country, if not shared
    by other countries, will at once affect its foreign trade, giving
    an impulse to importations and checking the exportation of all
    commodities other than gold. A similar effect is very generally
    attributed by American writers to the action on prices of the
    greenback inconvertible currency.

    But it may easily be shown that this is a complete illusion.
    Foreigners do not send their products to the United States to take
    back greenbacks in exchange. The return which they look for is
    either gold or the commodities of the country; and if these have
    risen in price in proportion as the paper money has been
    depreciated, how should the advance in paper prices constitute an
    inducement for them to send their goods thither? The nominal gain
    in greenbacks on the importation is exactly balanced by the
    nominal loss when those greenbacks came to be converted into gold
    or commodities. The gain may, in particular cases, exceed the
    loss, but, if it does, the loss will also, in other cases, exceed
    the gain. On the whole, and on an average, they can not but be the
    equivalents of each other.

Mr. President, the best place in the world where we can have gold is not
in the Treasury of the United States, not in any sub-treasury, but in
circulation, if not in our own country, then, in the foreign countries
where our surplus products are sold. That is where gold would do us the
most good by making money plentiful and prices correspondingly high. It
does us no good here whatever, locked up as it always is, and doing none
of the work of money, but simply reduces to the minimum the tax-paying
and debt-paying power of our wheat- and cotton-growing communities.

An unjust money should not be tolerated, whatever the material of which
it may be composed, and the people of this country will not tolerate it.
They do not fear the outflow of gold. If, in order to retain it, they
must continue to lose as they have been losing for the past fifteen
years, they will favor its going, and raise a shout of joy when it does
go. With a perfect money system in our own country the range of our
domestic prices would continue stable and equitable without regard to
the prices of foreign countries. Our foreign trade would take care of
itself, and whatever the balances might be, they would be much oftener
in our favor than against us, and in reality concern only the importing
merchant and not the Government or the people of the United States. The
difficulty of gold-using countries to get our money, in which to pay us
the balances they would owe us, would be much greater than our
difficulty in getting their money, in which to pay them the occasional
balances we might owe them.

Much the more serious question, (if it be a serious question at all,
which I deny) is how they shall get our money, not how we shall get
theirs. As the balances would be for the most part in our favor, it is
for them to take such steps as may be necessary in order to pay us. But
there is no just reason to apprehend difficulty in either case. A great
country like the United States will have no trouble in buying the money
of any other country at equitable rates--at rates regulated by the
purchasing powers of the moneys of the two countries, respectively.

No country in the history of the world, having a money local to itself,
has ever found the slightest difficulty in buying, upon ratios
determined by the relative purchasing powers of the two kinds of money,
a sufficient amount of foreign exchange (which simply means the money of
another country) to meet all adverse balances of trade.

While earnestly advocating the full remonetization of silver and the
maintenance in this country of a money volume sufficient to insure a
steady level of prices and an unchanging value in the money unit, I
entirely disclaim any desire for an inflation of the currency. My
contention is that without silver we can not keep prices from further
decline, and can not have enough money to serve the growing needs of
population, industry, and commerce.

At the same time I can not refrain from expressing the conviction that,
as between inflation and contraction, no careful student of history and
of economic science can for a moment hesitate in deciding that the evils
inflicted on society by contraction have been longer in duration and
infinitely greater in degree than any that have ever resulted from
inflation. During all periods in which there has been a generous
increase in the money-volume of a country or of the world, activity and
prosperity have been its accompaniment. I challenge the citation of an
instance to the contrary.

With a volume of money increasing at a rate sufficient to meet the
demands of a growing population, and especially if the money be such as
will not leave the country, but, under all circumstances, will remain in
it, to sustain prices, preserve equities, and reward labor, no country
with a proper coördination of its industries can be otherwise than

The property of mobility--of fluidity--which is so much lauded in gold,
is precisely the property least to be desired in the money of a country,
if that property of mobility or fluidity is to keep alternately bringing
money into and taking it out of the country, disturbing prices and
disarranging equities. When it comes, if it enters into circulation,
prices rise; when it goes, prices fall, and thus, instead of having a
steady and level platform of prices on which the trade and industry of
the Republic may rest, like the firm and level platform of liberty upon
which all our citizens stand, we whose business it is to "see that the
Republic take no harm," furnish our people with an "inclined plane" of
finance on which all their business must be conducted. Men buying this
month at the elevated end of the platform find themselves selling next
month at the depressed end.

Whenever in the history of a country there has been least reliance on
international money (gold) and more reliance on merely national money
(even of paper when reasonable limits were placed upon its quantity),
prosperity has been everywhere present. I need not recall to the minds
of Senators the wave of prosperity that swept over this country when it
was without any international money and resorted to the "greenback"

When, as a result of the Franco-German war, France was deprived of
international money, suspended specie payments, and resorted to a
properly limited paper currency, her progress was unbounded.

No period in the history of Great Britain can compare for activity,
prosperity, or achievement, with the twenty years preceding 1816, when
specie payments were suspended, and during which period, as testified to
by witnesses before the secret committee of Parliament, the discount
rate of the Bank of England did not buffer a single change; whereas from
that period to 1847 the rate was changed sixteen times, and from 1847 to
1874 as many as 274 times, the fluctuations being sometime of the most
violent character.

When gold threatens to leave Great Britain the rate of discount at the
Bank of England is raised, with the view of discouraging, if not
preventing, the outflow. Raising the rate of discount is like putting
the brakes on a railroad train; lowering the rate is like letting off
the brakes.

These changes were not due to any greater demand for money but to the
movements of gold. There was frequently, in the condition of business,
no warrant whatever for a rise in the rate of discount. The only reason
for it was to prevent gold from performing what "our most conservative
financiers" denominate its "noble" function of "mobility"--of
"fluidity"--namely, the function of going "where it was wanted." This
function of going "where it is wanted" is described as the great
"mission" of gold, and it is assumed that it will never be wanted at
more than one place at a time. Yet hear what the chancellor of the
exchequer of Great Britain said a few days ago in the House of Commons:

    I admit that, as interested in the commerce and monetary system
    of this country I feel a kind of shame that on the occasion of
    £2,000,000 or £3,000,000 of gold being taken from this country
    to Brazil, or any other country, it should immediately have the
    effect of causing a monetary alarm throughout the country. (Speech
    of the chancellor of the exchequer in the House of Commons, April
    18, 1890.)

This is a suggestive admission, from so well-informed a source, as to
the operation of the single gold standard. I commend it to those who
would circumscribe and hamper the prosperity of this country by making
gold alone the standard of all values.

I have thought it necessary, Mr. President, to state what I conceive to
be the true principles of the science of money, the principles that,
with the progress of time and growth of intelligence, must prevail the
world over; because, without a clear understanding of the relation which
the quantity of money in a country bears to the prosperity and happiness
of its people, there would be no justification for an addition of either
silver, gold, or any other form of money to the quantity already in
circulation. If the value of money depends on quantity, then, as long as
the world adheres to the automatic theory of money, my contention is
that all the silver produced from all the mines of the world should be
transmuted into coin; and even then, if the wants of the world continue
to increase as they have been increasing, it is only a question of time,
and that not far distant, when the combined supply of both metals will
be insufficient to maintain the equities in time transactions.

The world having decreed to stand by the automatic system we are now
dealing with the question as a practical one.

The only relief that can be had is to adhere strictly to that system,
and give it full scope. Remove all legislative restrictions and let the
world have the full benefit of all the precious metals that are yielded
by the mines.


Since for thousands of years the world recognized both silver and gold
as money, can anybody tell what has happened to render one of them
unfitted for the money use?

No argument based on fluctuations in the current supplies of either of
the metals can militate against the use of both as money. The
fluctuation in the annual yield of both, taken together, is much less
violent and less frequent than the fluctuation of either taken
separately. By the use of both, society has much greater security
against the evil of an insufficient money volume. While a large yield,
now of one, and again of the other, has taken place, there is no
instance in the history of the world of an extraordinary yield of both
occurring simultaneously, except in the single instance of the first
discovery of the mines of America. When the gold mines have been
yielding largely, there has been no special increase of silver, and
during the period when silver has been produced in comparatively large
quantities the gold mines have been less productive.

This will be illustrated by the following table showing the yield of
both gold and silver, from the discovery of America to the present time.

  _Annual average production of the precious metals throughout the
  world from the discovery of America to 1872._

  [From Director of United States Mint.]

               Periods.              |    Gold.    |    Silver.
  1493-1520, average for each year   |  $3,855,000 |  $1,953,000
  1521-1544      do                  |   4,759,000 |   3,749,000
  1545-1560      do                  |   5,657,000 |  12,950,000
  1561-1580      do                  |   4,546,000 |  12,447,000
  1581-1600      do                  |   4,905,000 |  17,409,000
  1601-1620      do                  |   5,662,000 |  17,538,000
  1621-1640      do                  |   5,516,000 |  16,358,000
  1641-1660      do                  |   5,829,000 |  15,223,000
  1661-1680      do                  |   6,154,000 |  14,006,000
  1681-1700      do                  |   7,154,000 |  14,209,000
  1701-1720, average for each year   |   8,520,000 |  14,779,000
  1721-1740      do                  |  12,681,000 |  17,921,000
  1741-1760      do                  |  16,356,000 |  22,158,000
  1761-1780      do                  |  13,761,000 |  27,128,000
  1781-1800      do                  |  11,823,000 |  36,534,000
  1801-1810      do                  |  11,815,000 |  37,161,000
  1811-1820      do                  |   7,606,000 |  22,474,000
  1821-1830      do                  |   9,448,000 |  19,141,000
  1831-1840      do                  |  13,484,000 |  24,788,000
  1841-1850      do                  |  36,393,000 |  32,434,000
  1851-1855      do                  | 131,268,000 |  36,827,000
  1856-1860      do                  | 136,946,000 |  37,611,000
  1861-1865      do                  | 131,728,000 |  45,764,000
  1866-1870      do                  | 127,537,000 |  55,652,000
  1871-1872      do                  | 113,431,000 |  81,849,000

  _World's production of gold and silver for the calendar years
  1873 to 1889, inclusive._

            |     Gold.     |                Silver.
   Calendar +---------------+--------------+--------------+-------------
    years.  |               |    Fine      |   Market     |  Coining
            |     Value.    |   ounces.    |   value.     |   value.
    1873    |  $96,200,000  |  63,267,000  | $82,120,000  | $81,800,000
    1874    |   90,750,000  |  55,300,000  |  70,673,000  |  71,500,000
    1875    |   97,500,000  |  62,263,000  |  77,578,000  |  80,500,000
    1876    |  103,700 000  |  67,753,000  |  78,322,000  |  87,600,000
    1877    |  114,000,000  |  62,648,000  |  75,240,000  |  81,000,000
    1878    |  119,000,000  |  73,476,000  |  84,644,000  |  95,000,000
    1879    |  109,000,000  |  74,250,000  |  83,383,000  |  96,000,000
    1880    |  106,500,000  |  74,791,000  |  85,636,000  |  96,700,000
    1881    |  103,000,000  |  78,890,000  |  89,777,000  | 102,000,000
    1882    |  102,000,000  |  86,470,000  |  98,230,000  | 111,800,000
    1883    |   95,400,000  |  89,177,000  |  98,986,000  | 115,300,000
    1884    |  101,700,000  |  81,597,000  |  90,817,000  | 105,500,000
    1885    |  108,400,000  |  91,652,000  |  97,564,000  | 118,500,000
    1886    |  106,000,000  |  93,276,000  |  92,772,000  | 120,600,000
    1887    |  105,300,000  |  96,189,000  |  94,265,000  | 124,366,000
    1888    |  109,900,000  | 109,911,000  | 103,316,000  | 142,107,000
    1889    |  118,800,000  | 125,830,000  | 117,651,000  | 162,690,000

From this table it will be seen that from 1801 to 1820 the average
yearly yield of gold was $9,710,500; of silver, $36,847,500--four of
silver to one of gold.

From 1821 to 1840 the average yearly yield of gold was $11,466,000; of
silver, $21,964,000--two of silver to one of gold.

From 1841 to 1860 the average yearly yield of gold was $85,150,000; of
silver, $34,826,500--two and a half of gold to one of silver.

From 1861 to 1880 the yearly average yield of gold was $117,991,850; of
silver, $68,043,900--nearly two of gold for one of silver.

From 1881 to 1889 the yearly average yield of gold was $105,500,000: of
silver, $122,540,388--one-sixth more silver than gold.

From those figures it is plain that no continuous, extraordinary yield
of silver, such as might warrant the slightest fear of an unnecessary
addition to the money volume, is to be expected. On the other hand the
continuous drain of gold for use in the arts, as dentistry, gold plate,
jewelry, gilding, and articles of decoration generally, is seriously
encroaching upon the annual supply.

Both metals possess in common, and neither in any different degree from
the other, all the qualities which are recognized as necessary in a
commodity money. Silver enjoys in an equal degree with gold the quality
of indestructibility, of divisibility, of malleability, and of
resistance to chemical changes. The stock of both existing in the world
(the product of all time) is estimated to be about equal, the production
of the past 500 years being set down as--

  Gold        $7,240,000,000
  Silver       7,435,000,000

That silver mining has not proved exceptionally profitable in this
country is proved by the comparatively small number that have engaged in
the business. This country has been thoroughly explored in the search
for additional mines without any of great value being discovered. The
allurements of the business lie in its uncertainty; and for the
occasional prize that is drawn thousands of blanks are found. There is
always enough hope of results to induce continued effort, but there is
also sufficient doubt and discouragement to deter an undue number from
engaging in the business.

The mines of Mexico have been worked for hundreds of years; and up to
1873 the business of silver mining in that country had all the stimulus
that a parity at 15-1/2 to 1 could give to it. It is not, therefore,
probable that any material increase of output can be expected from that

Conceding, for the sake of the argument, the eventual possibility of so
superabundant a yield of silver as to work injury and inequity to the
interests of creditors, is it not manifest that it is in the power of
society at all times to remedy the evil by a limitation of the coinage?
And on the other hand, is it not equally manifest that for an
insufficient supply there is no remedy?

If great mountains of silver should be discovered, does not Congress
meet constantly? If there should seem to be too much, could not the
coinage be readily limited to prevent depreciation? But, on the other
hand, when we dedicate the monetary function solely to one metal, of
which there is manifestly and admittedly the world over an insufficient
supply, where is the remedy? What can Congress do to enlarge that
supply? Absolutely nothing.


The Director of the United States Mint a few years ago estimated that of
the $100,000,000 gold annually produced from the mines of the world
$46,000,000 are consumed in the manufacture of jewelry, gold plate,
plated ware, gold-leaf, etc., and in various processes of dentistry.

The single standard of gold, therefore, is maintained by the creditor
nations in the face of the admitted fact that but $50,000,000 of that
metal are annually added to the money stocks.

Not only is this encroachment of the commodity demand on the money
supply becoming greater year by year, with the growth of population, but
the supply of gold from the mines is itself becoming less, having
declined from an average of $137,000,000 between 1856 and 1860 (the
period of greatest yield from California and Australia), to an average
of $107,000,000 for the past ten years. Of the entire gold supply of the
world, nine-tenths of it have come from placer mines, readily
discoverable and easily worked, because requiring little or no capital.
All known fields of those are practically exhausted, and there is no
reasonable prospect of the discovery of others. Hardy, adventurous, and
skillful miners from the United States, and capitalists from all
countries, have ransacked the world in vain for new fields of gold. Why,
then, with the knowledge of those facts before us, should we discard
from the full money use and function the only metal that gives to the
world any prospect of relief from the money famine from which
civilization is now suffering and from which, if silver be not speedily
restored to its ancient use and function, the world is destined to
suffer much more?

If it be conceivable that the demonetization of either metal were
necessary, why demonetize that which promises the greater and more
steady yield? If for any reason society should decide that one of the
metals should be discarded, should it not rather be that one which
promises the smaller future yield, than that which promises the larger?

Silver is the money-metal best suited to the mass of the people, and to
the variety and character of transactions that constitute the
interchanges of daily life. The supplies of both metals if united by
law, in the full money function, would have a steadiness of value which
can not be attained by either separately.


The proposition to redeem the proposed treasury notes in silver bullion
or in anything but lawful money of the United States will never meet the
approval of the people.

What the people of this country want is money, and what they should have
is money. These notes will represent full value received, the evidence
of which is the bullion in possession of the Government. When issued,
they will enter into circulation. They will have to do the work of money
among the people. They will go to make up the volume of the currency. On
the basis of that volume each dollar acquires a certain value, and
represents a given amount of sacrifice. On that volume, and on those
conditions, bargains will be made, prices established, debts contracted,
values adjusted, and equities created. If any portion of that money be
withdrawn from circulation (for that is what "redemption" means) without
an equivalent amount of money in some other form being issued to take
its place, the circulation will to that extent be contracted, every
dollar in circulation will increase in value, prices will fall,
property-values established on the basis of the larger circulation will
shrink, and equities will be destroyed.

The redemption of any number of those notes in silver bullion means the
withdrawal of many dollars of money from circulation and the destruction
of so much of the money of the country. Money is not a thing that can be
destroyed with impunity. It should be kept in use among the people. It
is to industry what the blood is to the human body; it is the
life-giving and life-sustaining medium. The money volume of a country
should not be subject to frequent and violent changes. In a new and
growing country, it should be characterized by that steady accretion
that characterizes the increase in the quantity of blood in the human
body as it progresses from infancy to maturity. It is no more
unreasoning, empirical, or unscientific to be alternately withdrawing
blood from, and injecting blood into, a human body than to be constantly
contracting and expanding the money volume of the country. And as
activity of circulation of the blood is essential to the health of the
body, so activity of circulation in money is indispensable to the
well-being of society. The possession of no mere commodity, whatever its
value, will compensate a country for the destruction of any considerable
portion of its money, upon the entire volume of which vast equities


Money should be redeemed in all things; not in one thing alone. The
peculiar characteristic of true money, that which distinguishes it from
all other things whatsoever and constitutes it a prime factor in
civilization, is that it is at all times redeemable in any thing that is
on sale. Being an order for property, it should be redeemed in any form
of disposable property which the holder may desire.

    A  guinea--

said Adam Smith--

    may be considered as a bill for a certain quantity of necessaries
    and conveniences upon all the tradesmen in the neighborhood.

Any form of money, the condition of whose existence depends on
redeemability in one thing alone, can not be money in the full sense,
and whenever an urgent demand for real money springs up the other ceases
altogether to be money.

The redemption of money should be reciprocal between the Government and
the people and between and among all individuals in the community. It
should not only be redeemable by the Government by acceptance for taxes
but also redeemable by and among the people for all property for sale
and services for hire. Its quantity should be so regulated as that its
unit (the dollar) should neither increase nor diminish in value, and it
should be kept constantly in circulation, and not be permitted to lie
uselessly in the Treasury. Any other money than this is to a certain
extent counterfeit; it is false money, because when most needed it fails
to be money and has to be "redeemed" in something else (gold) which can
not be got except at ruinous sacrifice.

It is of the very essence of money--its pith and marrow and
protoplasm--that it should be a legal tender, a universal solvent, the
ultimate of payment, and redeemable, at the prices ruling, in everything
that is on sale. If the volume of such money be properly regulated,
while there may from time to time be variations in the prices of
particular articles, the general range of prices will be maintained
practically undisturbed.

What an absurdity it is for the Government to put its stamp on one thing
in order to make it redeemable in another thing imprinted with the same
stamp, but which nobody wants except for the purpose of getting a third
thing that could have been got just as well without the intervention of
the second. As well might he who, wanting water, is given a silver cup
wherewith to get it, but on going to the spring is forbidden to drink
until he exchanges his silver cup for a gold one.

The real reason why it is insisted that all other things than gold shall
be exchangeable into gold is that gold is getting dearer by reason of
decreasing supply and increasing populations. The necessity for
convertibility into gold implies that, in ordinary times, a range of
prices higher than the gold range will prevail, and when, by reason
perhaps of increased activity of business, redemption comes to be
demanded prices are at once precipitated to those of the gold standard
and below, to the great advantage of the creditor classes, who, as
owners of bonds, may be considered in the language of the stock exchange
"long" on money, and to the equally great injury of the producing class,
who, being in debt, may be considered as having sold money "short."

The supreme consideration is that the money of a country shall be so
regulated as that prices may not fall from any cause inhering in the
money system. The value of money--in other words, the sacrifice
necessary to obtain it--should be no greater at one time than at
another. In order to effect that object of prime consequence, to
maintain the value of money unchanging, there should be no hesitancy
whatever in changing the material of which it is made.

Nobody who has reflected on the subject for a moment doubts that what
gave "value" or exchangeable power to the greenback was not the promise
made on its face, without date, to pay a dollar, but the inscription on
its back which declared it a legal tender for all dues and demands,
public and private, except duties on imports. It was a misfortune to
mankind that the words "promise to pay" were printed on it, because by
it millions were led to believe that the "value" or exchangeable power
resided in the promise instead of in the legal-tender power conferred
upon it.

There is no object in redeeming in gold, except to maintain gold prices,
that is to say, the range of prices prevailing in gold-using countries,
and as those prices are constantly trending downward, any country that
insists on maintaining the gold standard must accept the consequences in
a corresponding fall of prices. The advocates of the gold standard, in
effect, maintain that no matter to what extreme prices may fall, we must
be content--we must bow in humble submission to the inevitable, since,
in their view, it is more necessary to maintain the sacredness of the
gold standard than to establish justice, promote prosperity, or to
maintain equity in all time transactions.

It is in no way necessary, on account of any intrinsic or inherent
quality of gold, that should have that particular metal, and that alone,
for money.

It is boasted that gold is a universal measure. Why is it universal? Why
is gold accepted in every country of the world? Not because the gold is
wanted for any quality inherent in the metal, but because it is an order
for property in gold-using countries, such as England, France, and
Germany, whose trade is largely a foreign trade. At whatever rate gold
will exchange in England, it will exchange in all countries having trade
relations with England, because it is an order for goods in a country
with which they are dealing. Will not the money of this country equally,
and for like reasons, whether gold or silver, have acceptability in
every country with which the United States have trade relations? Not for
any quality inherent in the metal, but because it is an order for
property in the United States. Will it not be willingly accepted by
those who wish to buy in this country?


In order to see the effect of the redemption of these Treasury notes in
bullion, we have but to look at the possibilities of the situation.
Suppose there were in the Treasury $300,000,000 worth of that bullion,
which, by the taking up, little by little, and month by month, of the
amount not used in the arts, would be taken by the Treasury at or about
par. Then, suppose that for any reason, such as fear of approaching
panic or otherwise, $100,000,000 of the Treasury notes were suddenly
presented for redemption, and canceled, and the bullion as suddenly put
on the market, what would it be worth? What would gold bullion be worth
if it had not the privilege of coinage, and if $100,000,000 of it,
deprived of the money use, was suddenly put on the market? Can there be
a doubt that the abrupt output of so large a quantity would have the
effect of immediately and enormously depreciating its value? In the case
under consideration, the result would be that the silver remaining in
the Treasury would not bring one-fourth the sum necessary to redeem the
outstanding Treasury notes, so that not only would a heavy loss result
to the Government, but, by reason of the sudden and serious contraction
of the money volume, an infinitely greater loss would result to all the

But if it be deemed a remote contingency that any extraordinary amount
would in that manner be suddenly taken from the Treasury, there is
another danger which can not be put aside as improbable, but which, on
the contrary, is to be looked for with almost absolute certainty, and to
my mind, constitutes an irremovable and insurmountable objection to any
system of bullion redemption.

A large number of merchants in London need, monthly, millions of dollars
worth of silver to make payments in India. They will naturally want
to get it at the lowest price, and it is not to their advantage to
intensify the competition for it. On the contrary, it is to their
direct advantage to depress the price to the lowest possible point.

As the Treasury of the United States would buy silver at the lowest
price, the London merchants would refuse to enter the open market in
competition with our Government for its purchase. But no sooner could
the silver be stored in the vaults of the Treasury, than the agents of
the London merchants would appear, and before any opportunity had
offered for a favorable change in the price of the bullion, could
present as many millions of these notes as might suit their purpose, and
receive bullion therefor. A Secretary of the Treasury who
conscientiously believed that it was his duty to maintain the gold
standard at all hazards, would naturally feel compelled--certainly it
would be in his power--to put out whatever amount of bullion he might
deem necessary to accomplish that purpose, even if it all had to go.

Thus the United States Treasury would become the convenient and
capacious conduit through which silver should immediately flow from this
country to England, depriving our people, notwithstanding the
legislative measures for their relief, of practically all use of silver
as money, inasmuch as the four and a half-million dollars of Treasury
notes would be withdrawn and canceled about as soon as issued.

Thus would our Treasury Department be made practically the purchasing
agent in this country of any syndicate or combination of English
merchants who might desire silver for the East India trade.

If it be said that no Secretary of the Treasury would attempt thus to
defeat the will of the people as expressed in the law, the sufficient
reply is that a conscientious man who believes that the honor of the
United States is pledged to the maintenance of the gold standard, and
that it is indispensable to the prosperity of the people, will exercise
all the power vested in him by law to prevent a departure from that
standard, and will regard himself as for the time being the savior of
the Republic by keeping it from "the edge of so dangerous a peril" as
the execution of the people's will.

Certainly no man will deny to the present Secretary of the Treasury
entire rectitude of motive in all his conduct. From the well-known fact
that since the passage of the limited coinage act of 1878 all our
Secretaries have refrained from purchasing more silver than they were
compelled to do by the mandatory provision of that law, it is reasonable
to infer that none of them, if called upon to execute a law containing a
silver bullion redemption clause, such as is suggested, would feel
called upon to make a net purchase of more than $2,000,000 worth in each
month; and that none of them would hesitate to exchange for Treasury
notes all the monthly purchases of bullion in excess of that amount.


I must be pardoned for directing the attention of Senators on this
side of the Chamber to a short declaration of the last Republican
National Convention:

    The Republican party is in favor of the use of both gold and
    silver as money.

If party platforms mean anything that clause meant that the Republican
party went before the country pledged to the use and to the equal and
non-discriminating use of both silver and gold as money. It was well
known that throughout the entire West the question of the
remonetization of silver was deemed of vital importance, and party
orators and the party press, throughout that entire section were severe
in their denunciation of the prior administration of its unfriendly
attitude toward silver.

I wish in all solicitude and sincerity to advise my Republican friends
of the East that this plank in the party platform was construed by the
Republicans of the West to mean precisely what it says. They are looking
with confidence to this Congress for such action as will fittingly
embody in the statutes the principle laid down by the party now in the
responsible direction of the Government.


We are told that if silver is given free access to the mints we shall be
flooded with it from all parts of the world. Does anybody show where the
flood of silver is to come from? Where are the reservoirs that contain
it? Not in England, where it is difficult for the people even to get a
sufficiency of it for small change to transact the business of the
country: not in Germany, where the scarcity of money was so pressing
that the government had to abandon the idea of selling silver. Though
the stock in France is large her people will never give it up. Silver
has been the "shield and buckler" of the French Republic. All she has is
coined at the ratio of 15-1/2 ounces of silver to 1 of gold, and its
shipment to this country would involve a loss to France, not only of the
3 per cent. difference between the French relation (15-1/2 to 1) and
ours (which is 16 to 1), but of 3 per cent. additional in the cost of
gathering and shipping it. And after that could only exchange them for
Treasury notes. The silver stock in India and the Orient is performing
indispensable duty as money, and no "flood" of it can be expected from
that quarter. From time immemorial India has been absorbing all the
surplus silver of the world. She has never got so much as to appease her
appetite for more. So insatiable is her desire for that metal that she
has long been known as the "Sink of Silver." China has not a piece of
the metal that she can dispose of. Mexico has no stock whatever of
silver on hand, except the limited number of coined pieces forming her
moderate money circulation, and not a dollar of it can be spared. No
country of Central or South America has any surplus silver. Every piece
of coined silver in every country in the world is part of the monetary
circulation of that country, and even when of short weight and
classified as a mere "token" is passing at par as full valued money. No
gain could possibly accrue, therefore, to the owners of coined silver
anywhere by shipping it to this country for any purpose, and there is no
surplus stock of bullion anywhere.

If anybody doubts this statement let him make the attempt in all the
money centers of the world to buy from accumulated stock even $5,000,000
worth of it. He will fail to get it in London, Paris, Berlin, Calcutta,
New York, or San Francisco, or in all combined. There is no source from
which to get silver except the current supply from the mines, and
whatever that is now it is not likely ever greatly to increase. The
occupation of mining is not attractive to many, and in the nature of the
case the number who follow it will always be comparatively few. The
Argonauts of old were but a small band of hardy adventurers; those of
the new era are destined to bear no larger proportion to the population.
But even were this not so, nature herself draws the line. To the eye of
the experienced prospector silver mines are as discernible on the
surface of the earth as are mountains, and the world has been explored
in vain for further "finds." Those who talk, therefore, of "floods" of
silver coming here for coinage simply show their ignorance of existing

I may add that of all the shafts that have been sunk for silver mines in
the world where they have found silver croppings on top in ninety-nine
out of every hundred, and I think I am stating it moderately, the veins
have not penetrated the earth, mineralized, fertilized, to the depth of
50 feet, rarely have they penetrated the earth to a depth exceeding
1,200 feet, and the most prolific yield of silver mines has been from a
depth not exceeding 800 feet.

The very fact, Mr. President, that, with all the world searching for
gold and silver mines--a search that has continued throughout all
history--the amount of the two metals yielded by the mines is about
equal, shows that the historical relation existing between them is the
relation at which they can be profitably produced.

It is apparent that if there were a great advantage in the production of
silver over gold, at the relation of 15-1/2 to 1, that advantage would
be seen in the largely preponderant production of silver; but instead we
find that the result of thousands of years of mining has given us about
equal quantities of both metals.


We are told that the United States, unaided, can not, if it would,
restore silver to a parity with gold--that no one nation acting alone
can achieve so difficult a feat. But it is incapable of denial that
throughout all vicissitudes of production of gold and silver from 1803
to 1873 the law of France--one nation alone--accomplished it.

As I have shown in greater detail elsewhere, by reference to the table
of annual production of the metals, it will be observed that from 1803
to 1820, the production was in the proportion of four dollars of silver
to one of gold; from 1821 to 1840 two of silver to one of gold, from
1841 to 1850 one dollar of silver, to one of gold, from 1851 to 1860
four dollars of gold to one of silver, from 1861 to 1865 three of gold
to one of silver, from 1866 to 1870 two of gold to one of silver, in
1871 and 1872 one-and-a-half of gold to one of silver. Notwithstanding
these extreme variations in the relative annual production the law of
France constituted a ligature sufficient to hold the metals in line at
the ratio of 15-1/2 to 1, and this not for France alone but for the
whole world. If that period does not offer sufficient proof of the power
of law, under varying conditions of supply, to tie the metals together
and keep them so, no degree of proof will suffice, for the vacillations
of their relative production have been greater during this century than
at any former period in the history of the world.


If that could be done by a nation with a population of 25,000,000 to
35,000,000, what difficulty could be experienced by a nation of
65,000,000 in accomplishing the same result? Yet we are told that
international agreement is necessary to restore silver to its ancient
right as a full-money metal. Those who suggest such an agreement forget
that while this nation is a borrower of money, the first and principal
nation to demonetize silver is the greatest money lender known to
history. Is it for a moment to be supposed that the shrewd English
creditor classes will enter into any agreement which will deprive them
of the spoils of so delicate and ingenious a system of usury; a system
not only not banned by law, but, on the contrary, having the special
approval and protection of statutes, and the active support and approval
of all the complaisant moralists, philosophers, and financiers of the

While they are dilligently gathering in the proceeds of this operation a
diversion is kept up for the occupation and amusement of dilettant
financiers and economists, by invoking a discussion of the ratio that
should be maintained between the metals. The ratio is the pretext on
which conference after conference has been called.

The advocates of the single gold standard contend that hostile
legislation had no influence in effecting the separation of the metals,
and that the reversal of that legislation can not and will not restore
them to a parity unless the principal commercial nations of the western
world join in the work of rehabilitation. As illustrating the force of
law on the relation of the metals I will read a suggestive paragraph
from the report of the Royal Commission of England (1886), Part I,
section 192:

    Now, undoubtedly, the date which forms the dividing line between
    an epoch of approximate fixity in the relative value of gold and
    silver, and one of marked instability, is the year when the
    bimetallic system which had previously been in force in the Latin
    Union ceased to be in full operation, and we are irresistibly led
    to the conclusion that the operation of that system, established
    as it was in countries the population and commerce of which were
    considerable, exerted a material influence upon the relative value
    of the two metals.

    So long as that system was in force we think that, notwithstanding
    the changes in the production and use of the precious metals, it
    kept the market price of silver approximately steady at the ratio
    fixed by law between them, namely, 15-1/2 to 1. Nor does it appear
    to us _a priori_ unreasonable to suppose that the existence in the
    Latin Union of a bimetallic system with a ratio of 15-1/2 to 1
    fixed between the two metals should have been capable of keeping
    the market price of silver steady at approximately that ratio.

The paragraph quoted ascribes the effect thus produced to the bimetallic
treaty of the Latin Union, a combination of Italy, Belgium, Switzerland,
and France, entered into in 1865 for the purpose of maintaining similar
conditions of coinage. But it will be observed that, so far as the ratio
was concerned, precisely the same effect had been produced by France
alone during the sixty-two years from the passage of its law of 1803 to

Not only did the French law keep the metals together at a time when the
larger annual yield was of silver, but it kept them together when the
larger annual yield was of gold. Had not that law been in operation
during the '50's, when a flood of gold poured from the mines of
California and Australia, gold would have fallen, as in early times it
more than once fell, to the ratio of 1 to 10, at which but 10 ounces of
silver (instead of 15-1/2) would buy an ounce of gold. Thus the law of
one country alone, a country then of not one-half the present population
of the United States, held the metals together, so that to whatever
extent gold fell in relation to commodities from 1848 to 1865, by reason
of the large output of the mines, silver fell to the same extent,
notwithstanding the enormous decrease in its production relatively to
gold during that period.

What is claimed for law in this connection is not that it directly
controls the relative values of gold and silver any more than of
anything else, but that on the slightest separation of the metals there
instantly arises, under the law of the double standard, a demand for the
cheaper metal, while the demand for the dearer one is suspended. In this
way the double standard accommodates itself to the law of supply and
demand, which is admitted to be the governing factor in the
determination of value. It is not contended that a small or
insignificant country could keep the metals together, but all experience
goes to show that a great nation like the United States would have no
difficulty whatever in doing so.

So thoroughly are the advantages of the gold standard to the creditor
classes recognized in England that the English Commissioners, who, for
form's sake, have been sent to the several monetary conferences held on
the continent, have never been invested by their Government with any
power whatever. And it is but a few weeks since the House of Commons
overwhelmingly voted down a proposition made in good faith by Mr. Samuel
Smith, looking to the calling of a new conference, which was supported
by petitions to Parliament signed by 60,000 persons not merely as
individuals, but as representing large organizations of the toilers of

The ratio is not the difficulty. Those who wanted silver demonetized do
not want it added to the money volume of the world at any ratio. Why
then shall we wait? Macauley, commenting on the impregnability of
intrenched prerogative, observed that if the announcement of the
discovery of the law of gravitation had militated against the personal
interests of any vested or privileged class, its general acceptance
might have been long postponed. Shall we, then, postpone relief to the
suffering industries of this country till we can secure from the
privileged classes, from the money-lenders of the world, an agreement to
cease their exactions?

No, Mr. President, we need not wait, and we _will_ not wait. All that is
necessary is to _act_, and so far as the rules of order and of
parliamentary procedure will permit, we propose to act, promptly and
decisively. The world can not expect the initiatory movement for any
change to be taken by those whose interests are served by the
continuance of present conditions. Such conditions being consistent with
their own welfare, they find no difficulty in arriving at the conclusion
that they are for the welfare of society at large.

The dogma that cupidity is a synonym for virtue will never fail to find
ready converts among the beneficiaries.

  * * * Plate sin with gold.
  And the strong lance of Justice hurtless breaks.


I predict that the restoration of silver to its birthright, Mr.
President, will mark an epoch in the history of this country. It will
place in circulation an amount of money commensurate with our increasing
population. It will give assurance to our languishing industries that
the volume of our circulating medium is not to continue shrinking, and
that the tendency of prices shall no longer be downward. It will
increase the wages of labor and the prices of the products of labor; it
will reduce the price of bonds and other forms of money futures, it will
lighten, but not inequitably, the burden of mortgages; it will increase
largely, though not unjustly, the debt-paying and tax-paying power of
the people. It will loosen the grasp of the creditor from the throat of
the debtor.

By the remonetization of silver, money will cease to be the object of
commerce, and will again become its beneficent instrument. Activity will
replace stagnation, movement will supplant inertia, courage will banish
fear; confidence will dispel doubt; hope will supersede despair.

The lifting up of silver to its rightful plane by the side of gold will
set in motion all the latent energies of the people. It will banish
involuntary idleness, by putting every willing man to work. It will
revive business, and reanimate the heart and hope of the masses.
Capital, no longer fearing a fall in prices, will turn into productive
avenues. The hoards of money lying idle in the bank vaults will come out
to bless and enrich alike their owners and the community at large;
while the millions of dollars now invested at low interest in gilt-edged
securities will seek more profitable investment in the busy field of
industry, where they will be utilized in the payment of wages and the
consequent dissemination of comfort and happiness among the people.

And this it will accomplish not for the United States alone, but for
civilization. For it is not too much to say, Mr. President, that upon
the decision of this question depend consequences more momentous than
upon that of any other question of public policy within the memory of
this generation. In a broader sense than any other question attracting
the general attention of mankind it is a question of civilization. It
embodies the hopes and aspirations of our race.

The act of Congress which shall happily solve it will constitute a
decree of emancipation as veritable as any that ever freed serf from
thraldom, but more universal in its application. It will proclaim the
freedom of the white race the world over, it will lift the bowed head of
labor, it will hush the threnody of toil. It will inaugurate the true
renaissance--a renaissance of _prosperity_, without which industry,
learning, science, literature, art, are but as apples of Sodom.
(Applause in the galleries.)


  Alison, Sir Archibald, coinage has no effect in preventing
          fluctuations in value of coin, 42
    effect of suspension of specie payments in England in 1797, 78

  Allegory of the clocks, 50

  American Review, effect of increasing volume of money, 8

  Automatic system of money, gold and silver, 9
    why interfered with, 18

  Appleton's Cyclopedia, definition of money, 67

  Aristotle on Money, 66

  Balance of trade, the argument based on, 96

  Banker's advice to the Usurer, 70

  Baring, Alexander, a reduction of paper would have the same effect
          as of any other money, 78

  Bastiat, description of the crown piece, 68

  Baudeau, on Money, 66

  Behren, Jacob, opinion as to effect of gold standard in England, 23

  Berkeley, Bishop, queries as to Money, 67

  Best Money (truthfully so-called), a money of unchanging value in
          the unit, 70

  Cairnes, Prof. J. E., relations of paper currency to foreign
          exchange, 98

  Cattle, estimate of value in 1880, 4

  Cernuschi, the purchasing power of money is in direct proportion to
          the volume of money existing, 77

  Checks and clearing houses, their effects in economizing use of money,
          considered, 46

  Chevalier, in France, advocated demonetization of gold, 20

  Circulation, present monetary, 75

  Coal, yield for 1888, 4

  Condition of country at present, 3
    at period of demonetization of silver, 26

  Competition, the value of money fixed by the competition to get it,

  Cotton manufacturer, his loan of $10,000, payable, principal and
          interest, in cloth, contrasted with loan of same amount
          contracted by his neighbor, but payable in dollars, 72

  Cotton-planters, their loss by demonetization of silver, 60

  Crawford, William H., opinion as to effect of decreasing volume of
          money, 7

  Creditors, demand for the "Best Money," meaning a money of increasing
          value, 69
    their course in Europe to increase value of gold, 19
    their course in United States to increase value of gold, 27
    the pretense in the United States to "strengthen the public
          credit", 28

  Crops for 1888, corn, wheat, oats, and cotton, 4

  Debt, a distinguishing characteristic of civilization, 35
    a, of $10,000 contracted in 1873--how much wheat, cotton, etc.,
          would pay it then and how much now, 57

  Debtors, who are they, 35
    and creditors, their motives compared, 34

  De Colange, Professor, the rate at which money exchanges is determined
          by its quantity, 77

  Demand for money, what it is, 73

  Demonetization of silver, by England, 22
    by Germany, 16
    by United States, 26
    wholly unjustifiable, 28

  De Quincey, in England, advocated demonetization of gold, 20

  Difficulty, one symptom common to all industries, 5

  Discussion, educational effect of, 29

  Double standard, statement of, before French Commission, 22

  Dumas, a Senator of France, pleads for caution before demonetization,

  Economist (London) admits rise of gold, 44

  Effects of shrinking volume of money (extract from report of Monetary
          Commission), 36

  Encyclopedia Britannica, effect of fall in the value of money, 8

  England's position not due to gold standard, 25

  Failures in United States, 1887, 1888, and 1889, 49

  Fall of interest on gilt-edged securities, a proof of rise of gold, 48

  Farm, how it may be lost by an increasing value in the money unit, 70

  Farmers, their loss by demonetization of silver, 60

  Farms, estimate of value in 1880, 4
    proposition that the Government lend money on the security of the
          land, 83

  Fanchet, Léon, probable effect, should all European nations follow
          England in discarding silver, 17

  Fichte, the value of money depends on its quantity, 76

  Flood of silver, where is it to come from?, 108

  France, law of 1803 held metals at a parity till 1873, 16

  Frewen, Moreton, extract from his "Economic Crisis", 30

  Gallatin, Albert, a metallic currency not indispensable, 77

  Germany, emigration from, 25

  Gibbs, Henry H., cablegram relating to bimetallism, 29

  Giffen, Robert his reasoning erroneous that the commodity demand fixes
          the value of gold, 81

  Gold and silver, both variable in value, 41
    the world's supply of both, 101

  Gold, ratio of, to silver at various periods, 13-16
    fall of, during times of Alexander and Cæsar, 14
    fear of fall of, during California excitement, 19
    rise of from 1873 to 1889, 44
    proof that it has risen, 55
    some effects of its rise, 57
    proposition first made to demonetize it, 19
    demonetized in 1857 by German States and Austria, 20
    fear of an outflow of, 85
    rationale of the outflow of, 86
    value as money not derived from commodity use, 81

  Goschen, George J., chancellor of exchequer of England speaks for, but
          decides against, silver, 24

  Graham, Sir James, the value of money is in the inverse ratio to its
          quantity, 77

  "Greenback", the, what gave it value?, 105

  Gresham's law, and so-called "extension" of, 68

  Gold standard, what it implies, 90
    statement in behalf of, before French commission, 22
    of the future, 92

  Gold used in the arts, 103

  Gold money, practically none in the United States, 95

  Hamilton, Alexander, effect of annulling use of either metal, 16

  Houses in United States, estimated value in 1880, 4

  Hume, David, contrast of conditions under increasing and under
          deceasing volume of money, 7
    value of money depends on quantity, 76

  Huskisson, William, if the quantity of money is increased the value of
          commodities increase, 77

  Improved methods of production, their effects considered, 45

  India, will remonetization place us "alongside?", 32

  International agreement: is such agreement necessary to tie the metals
          together, 109

  Involuntary idleness, enormous loss of potential wealth, through, 61

  Iron, pig: Yield for 1888, 4

  Jefferson, Thomas, "the unit must stand on both metals", 17

  Jevons, Professor: The metals not so steady a standard as corn, 42
    inconvertible paper money, if limited in quantity, can retain its
          full value, 77

  Jevons, on Money, 66
    table of relation of general prices 1809 to 1849, 40

  Laughlin, Professor, "the name 'dollar' does not always have the same
          value", 42

  Laveleye, Professor, "Debtors have a right to pay in gold or
          silver", 18

  Law, what is claimed for it, in keeping the metals together, 110
    of France held the metals together from 1803 till
          demonetization, 110

  Legal-tender: All money should have this power, 71

  Locke, John, both gold and silver variable in value, 42
    on Money, 66, 76

  McCulloch, J. R., "Money is a measure of value", 71
    were there perfect security against over-issue of paper money, the
          metals might be dispensed with, 78

  McLeod, on Money, 66

  Materials used as Money at various epochs, 10

  Machiavelli's reference to the brigands, 57

  Massachusetts Bureau of Labor: Deductions from its reports as to
          numbers of the unemployed, 61

  Mill, James, the value of money depends on its quantity, 76

  Mill, John Stuart, on Money, 66
    the value varies inversely as its quantity, 76

  Mining States: Their interest in remonetization of silver, 58

  Monetary Commission Report: Quotations from, as to new school of
          financial theorists, 18

  Money demand, not commodity demand, gives gold its value, 81
    effect of reduction in volume of, 6
    effect intensified as civilization advances, 6
    a glance at the history of, 9
    substances used as, at various epochs, 10
    the money-function the all-sufficient guaranty of the money
          value, 79
    where is the future money to come from, if silver remains
          demonetized, 79
    --what is it? Its value not in the material but in the stamp--in
          the legal-tender power conferred, 65
    should be redeemable in all things, 104
    valuable rather for the important service it performs than for the
          material of which made, 80
    question a question of prices, 80
    what is the demand for it? what the supply?, 73
    no alternative for it, 74
    the most potent instrumentality in the evolution of society, 74

  National money, as distinguished from international money. Advantages
          of national money, 99

  Newspapers, number published in United States, 4

  Non-mining States, their interest in remonetization of silver, 60

  Overstone, Lord, "The value of a paper currency results from its
          being kept at the same amount the metallic currency would
          have been", 78

  Panics, impossible if all money were legal tender, 71

  Parity of the metals: Can the United States alone hold them
          together?, 109

  Paulus (author of Pandects): Power of money dependent not on substance
          but on quantity, 77

  Playfair, Sir Lyon, uses the argument that England is a creditor
          nation, 23

  Population, Money should increase in a ratio not less than the ratio
          of increase of, 75

  Price, the index of the value of Money, 8

  Price, Bonamy, on Money, 67

  Prices, what produces a general fall of, 5
    fall of, in United States since 1873, 38
    relation of general prices, 1809 to 1849, Jevon's tables, 40
    relation of general prices, 1849 to 1885, Soetbeer's tables, 41

  Progress, evolutions of, in Money, 9

  Prophecies of gold advocates unfulfilled, 30

  Protection, its effect on prices, 88

  Quantitative theory of Money, The value of each dollar depends on the
          number of dollars out, 75

  Railroads, number of miles in United States, 4
    value in 1880, 4

  Ratio of precious metals from earliest times to Christian Era, 13
    Christian Era to discovery of America, 14
    discovery of America to 1822, 15
    1823 to 1889, 16

  Ricardo, use of the metals as a standard, 43
    the value of money in a country depends on the amount existing, 76
    there can be no depreciation of money but from excess of
          quantity, 76
    his views as to a "well regulated paper currency", 78

  Rothschild, Baron, opinion of bimetallism, 17

  Rouland, M., governor of Bank of France, opposed to demonetization, 17

  Royal Commission of England, extracts from report of, 23, 110

  Sauerbeck on general price (those of 1887 the lowest for one hundred
          years), 41

  Seventy-two cent dollar, the, 92

  Seyd, Ernest, effect of increasing money volume, 8

  Silver, ratio of, to gold, at various periods, 13-16
    declared unfit to be used as money, 21
    objections to, considered, 21
    the motive for demonetizing, by England, 21
    the motive for demonetizing, by Germany, 24
    the motive acknowledged, 23
    and gold both variable in value, 41
    --has it fallen?, 49
    purchasing power in 1873 and 1889, 52
    prejudice against it as money arising from the idea that gold money
          has greater "intrinsic value." That question considered, 63
    shall we be flooded with it in case of remonetization?, 108
    the world's supply, 101
    If $2,500,000 a month for twelve years has not driven out gold, how
          much will do so?, 91

  Silver miners, their loss by demonetization contrasted with that of
          farmers and cotton-planters, 58

  Smith, Adam: Both gold and silver variable in value, 41
    Definition of a guinea, 66

  Soetbeer's table, showing relation of general prices 1849 to 1885, 41

  Standard: The true Money standard not the material of which money is
          made, 78

  Stewart, Dugald, on Money, 67

  Steel, yield for 1888, 4

  Suicides in Germany, 25

  Supply of money, what it is, 73

  Tabular standard suggested for time contracts as securing greater
          equity than gold, 43

  Thornton, Henry, on Money, 66

  Time contracts, their importance to industry, 6

  Torrens: The value of gold rises or falls as its quantity is
          diminished or increased, 77

  Treasury notes should not be redeemable in bullion, 104
    Possible effect of such redemption, 106

  Tribune (New York) quoted as to fall of prices, 39

  Unemployed, some statistics of the, 61

  United States, demonetization of silver effected in 1873, 26

  Usurer's loan on the farm, 70

  Waller's verse, 24

  Value, the meaning of, 63
    subjective, not objective, 63
    not "intrinsic", 64
    of money not in the material, but in the stamp--in the power of
          legal tender, 65
    money a measure of, 71

  Values, relative, of precious metals from earliest times, 13

  Wage-loss from involuntary idleness enormous, 62

  Walker, Prof. F. A., on Money, 66, 67
    gold and silver both variable in value, 42
    the value of money in a country determined by the amount
          existing, 77

  Wealth, national, estimated, 4

  Wolowski, M., effect of demonetization, 17

  Working masses entitled to better conditions, 57

  Yardstick, the lengthened, "rung in" on the cotton manufacturer, 73


1. Passages in italics are surrounded by _underscores_.

2. Certain words use "oe" ligature in the original.

3. Mixed fractions are represented using hyphen and forward slash. For
instance, five and a half is shown as 5-1/2.

4. Obvious misprints in spelling and punctuation have been silently

5. The original scanned images were not very clear, especially the
tables with numerical values. This may have caused some inadvertent
errors to creep in during the transcription process.

*** End of this Doctrine Publishing Corporation Digital Book "Money: Speech of Hon. John P. Jones, of Nevada, On the Free Coinage of Silver; in the United States Senate, May 12 and 13, 1890" ***

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