Part 18

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 conditions.

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.

CAN THE UNITED STATES ALONE HOLD THE METALS AT A PARITY?

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.

IS AN INTERNATIONAL AGREEMENT NECESSARY?

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 age?

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 1865.

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 England.

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.

CONCLUSION.

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.)

INDEX.

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, 73

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, 17

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