Part 10
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 States.
SOME EFFECTS OF THE RISE OF GOLD.
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, said:
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.
THE INTEREST OF THE MINING STATES IN THE REMONETIZATION OF SILVER.
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 silver.
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 INTEREST OF THE NON-MINING STATES IN REMONETIZATION.
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 pounds.
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 country.
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 silver.
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 years.
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 ENORMOUS LOSS OF POTENTIAL WEALTH THROUGH INVOLUNTARY IDLENESS.
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.
SOME STATISTICS OF THE UNEMPLOYED.
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 laborers.
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.
THE WAGE LOSS FROM INVOLUNTARY IDLENESS.
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.