Full text of The Money Question of the 51st Congress : Pro-Silver Policy of the United States : Remarks of Mr. Aldrich of Rhode Island, Debate in the Senate

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THE PRO-SILVER POLICY OF THE
UNITED STATES,

RE MARKS
OP

MR. ALDRICH,
OF RHODE

IS L A N D ,

IK THE

SENATE




OF

THE UNITED STATES,

F biday , J une

13, 1890.

W a s h i n g t o n .

18t>0.




TABLE

OF

CONTENTS.
Page.

I n t r o d u c t i o n . ........................................................................................................................................

5

I . —T h e S i l v e r P o l i c y A d o p t e d b y C o n g r e s s i n 1878.............................

6

I I . — T h e A n t i -S i l v e r M o v e m e n t ..................................................................................

8

I I I . —G e n e r a l P r i n c i p l e s o f M o n e t a r y L e g i s l a t i o n .................................

11

I V . — T h e ..N e c e s s i t y o f C o n c u r r e n t A c t io n o f N a t i o n s .........................

14

V . — T h e S e n a t e B i l l ...............................................................................................................

15

V I . — T h e S i l v e r M o v e m e n t i n E u r o p e ......................................... ..........................

17

V I I .— H o w t h e L e a d e r s h ip o f t h e U n it e d S t a t e s is to b e M a d e
E f f e c t i v e ...........................................................................................................................
V I I I .— U n l i m i t e d S i l v e r a n d t h e

Status Quo

19

H e f o r e 1873 ..........................

21

I X . — C h a r a c t e r a n d E f f e c t o f t h e M e a s u r e s P r o p o s e d .......................

24

X . — E r r o r s o f t h e i r A d v o c a t e s ...................................................................................

27

X I . — A p p e a l t o t h e E x a m p l e o f I n d i a a n d o f M e x i c o ............................

33

X I I . — T h e A r g u m e n t f r o m t h e E x p e r i e n c e o f F r a n c e ...........................

35

X I L I.— N a t i o n a l - B a n k N o t e s a n d

the

Cu r r e n c y A s p e c t s o f

thh

Q u e s t i o n ...............................................................................................................................




a

36




SPEECH
OP

MR. A L D R I C H .
T he Senate, as in C om m ittee o f th e W hole, h a v in g under consideration th e
bill (S. 2350) authorizing th e issu e o f Treasury notes on deposits o f silver bu llion—

Mr. ALDRICH said:
Mr. P r e s i d e n t : There can be no clearer indication of the inherent
weakness of a cause than is disclosed when its chosen advocates find it
necessary to appeal for support to passion and prejudice rather than to
reason and intelligence.
One without previous knowledge of the facts, and unfamiliar with
the methods of American politics, who should hear the echoes of the
silver debate in Congress, would suppose that the people of this coun­
try were really in arms, and divided into two great hostile camps
over this question, each determined upon the financial if not the phys­
ical extermination of the other.
I can not believe that fables of this nature either amuse or deceive
the American people. If there is one place in the world where a great
monetary problem, affecting interests the magnitude of which no man
can measure, should be discussed in a dispassionate manner and with
sole reference to its intelligent solution, that; place is this Chamber.
Mere declamation for the purpose of exciting class antagonisms and
inflaming sectional feelings is not worthy of this forum.
I propose to show that those who indulge in such appeals and decla­
mation do not represent the true interests of' silver restoration, and
that this great cause is entitled to be relieved from the discredit thus
placed upon it.
The progressive retirement of national-bank notes has imposed upon
Congress the duty of undertaking some readj ustment of our currency sys­
tem. A plan for this readjustment is suggested by the bill now under
consideration reported from the Committee on Finance. Among the
5




The Pro-silver Policy of the United States.

6

issues involved in the consideration of this bill and the various sub­
stitutes proposed, the most important from every standpoint is to de­
termine the effect which these several measures would have upon the
future status of silver as a money metal. What has been the position
o f the United States on this subject?
I.
The decision of the United States to promote the restoration of silver
was made by the act of Congress of February 28, 1878, and reaffirmed
by the formal declaration of its official representatives at the Monetary
Conferences of 1878 and 1881. The act of February, 1878, in addition
to the provisions for the purchase and coinage of silver, provided, in
section 2, “ that the President should invite European Governments to
join the United States in a Conference to adopt a common ratio between
gold and silver.”
The Commissioners of the United States at the Conference called in
Paris in accordance with this requirement submitted to it the follow­
ing propositions:
I. It is th e opinion o f this assem bly th at it is not to be desired th at silver should
be excluded from free coinage in Europe and th e U nited States o f A m erica.
On th e contrary, th e assem bly believes that it is desirable that th e unrestricted
coinage o f silv er and its use as m on ey o f un lim ited leg al tend er should be re­
tain ed w here th ey ex ist, and, as far as practicable, restored w h ere th ey have
ceased to exist.
II. T he use o f both g o ld and silv er as un lim ited legal-tender m on ey m ay b e
safely adopted.
First. B y eq u alizin g th em a t a relation to be fixed b y international agree­
m en t; and
Secondly. B y grantin g to each m etal, at th e relation fixed, equal term s o f
coinage, m a k in g n o discrim ination betw een them .
T he fo llo w in g third proposition w as prepared and held in reserve, a w aitin g
th e d ev elo p m en t of th e v ie w s o f the C onference:
III. “ T he delegation s here present agree to recom m end to th eir respective Gov­
ernm ents that, b y th e free coinage o f silv er at a relation to be agreed upon, or
p rovisionally, through ex ten d ed coinage upon G overnm ent account and th e ac­
cum ulation o f silver bullion in public treasuries, th ey m a k e a concerted effort
to restore silver to its function as m on ey o f full pow er.”

As adequate assurances of active co-operation by European nations
were not secured, a second Conference was called in 1881 by joint action
of France and the United States. At this Conference the following dec­
larations were made with others in behalf of the two Governments:
1. T he depreciation and great fluctuations in th e v a lu e o f silver rela tiv ely to
g o ld w hich of late years h a v e sh ow n th em selv es and w h ich contin ue to e x ist
ALD




The International Monetary Conferences.

7

have b een and are injurious to com m erce and to th e general prosperity, and
th e establishm ent and m aintenance o f a fixed ratio o f value b etw een silver and
gold w o u ld produce m ost im portant benefits to th e com m erce 01 th e w orld.
2. A convention entered into b y an im portant group o f states b y w h ich th ey
should agree to open th eir m in ts to free and un lim ited coinage o f both silver and
gold at a fixed proportion o f w e ig h t b etw een th e g o ld and th e silver contain ed
in th e m onetary u n it o f each m etal and w ith fu ll le ^ a l-te n d e r faculty to th e
m on ey thus issu ed w ou ld cause a nd m aintain a stability o f th e relative v alu e o f
th e tw o m etals suitable to th e interests a nd requirem ents o f th e com m erce o f
th e w orld.

This Conference adjourned July 8,1881, to meet again in Paris April
12, 1882, but a change having taken place in the Ministry of France
and in the Chief Executive of the United States in this interval, which
rendered it impracticable to adopt measures in concert looking to future
action, a further postponement was notified to the various Governments
by the French and American Executives in the following terms:
P a r is,

March 3 1 ,1 8 8 2 .

T he International M onetary C onference w h ich w as convened at P aris last
year, upon th e invitation o f France and o f th e U nited States, and in w hich th e
G overnm ent o f ——— w as represented, adjourned to m eet th e 12th o f April,
1882.
In m a k in g th is decision at th e session o f J u ly 8,1881, th e d elegates anticipated
that, before the date thus fixed, th e G overnm ents represented in th e conference
w ould be able to prepare solution s o f th e qu estion s in volved , w ith a v ie w to
th e conclusion o f an international convention , th e term s o f w h ich shou ld be
discussed and determ ined b y th e conference.
T his anticipation has been, in part, realized. F rom all th e inform ation w h ich
has been received it appears that in a large num ber o f States th e question has
contin ued to be the subject o f earnest consideration, and th at various plans h ave
been under discussion w ith th e object eith er o f re-establishing the free coinage
o f silver m on ey, or o f restoring to th e m etal silver its proper international valu e
.b y en largin g its u se as coin. U p to th e present tim e, h ow ever, th ese in vestiga­
tio n s d o not appear to h a v e produced conclusions sufficiently p ositive to serve
as a basis for form al deliberations o f th e conference.
H ence, in th e opin ion o f th e G overnm ent o f th e U nited States (and o f France),
in conform ity w ith th e v ie w entertained b y various other G overnm ents, notably
b y th ose o f G erm any, H olland, and Italy, there w o u ld be no sufficient ad van tage
in reop en ing th e discussions o f th e conference a t present.
In th is situation th e G overnm ents o f th e U nited States and o f France are o f
th e opinion th at it w ould be desirable to defer th e convocation o f th e conference,
subject to a determ ination o n th e part o f th e states interested o f th e date for
its reassem bling, th e sam e to ta k e place w ith in th e present year.

It is apparent that the convocation o f another Monetary Conference
is within easy reach should an occasion arise. Indeed, this view of the
situation has been represented in discussions on the subject in the
French Chambers and in the German Keichstag and in the English
Parliament.
ALD




8

The Pro-silver Policy of the United States.

By these several declarations the adhesion of the Government of the
United States to the proposition that silver should vas soon as possible
be restored to its full monetary function was explicit and unequivocal.
They also recognized the fact that the silver question was essentially
international in its character, and could only be adjusted by concurrent
action. The policy outlined in these statements has been adhered to by
our Government with more or less fidelity from the time of its adop­
tion. To-day all agree that it is extremely desirable to rehabilitate
silver, and the official utterances which I have recited simply formulate
the deliberate opinion of the great mass of the people of the country.
There exists a universal belief that the action taken by various coun­
tries in 1871-1878, resulting in the partial demonetization of silver, was
unwise, unfortunate, and injurious to the public interests.

II.
The unfortunate movement against silver at its inception had for its
sole object the international unification of coins and monetary stand­
ards. It received the support of the learned men of all countries, and
was analogous in character to the agitation which led to the adoption
of the General Postal Union. There is no evidence that any motive or
influences other than those affecting the convenience and uniformity of
international currency were at any time potential in directing its coun­
sels. The attention of scientific men throughout the world had been
attracted to the desirability of adopting an uniform coinage which
would facilitate exchanges between nations. So strongly had the
merits of this policy been felt in this country that as early as 1857 a
joint resolution was passed by Congress looking to important changes
in our monetary system in this direction. This purpose was evinced
in the formation of the Latin Monetary Union in 1865 and led to the callins; and controlled the action of the Monetary Conference held in Paris
in 1867. This Conference formally declared, by a unanimous vote of
the twenty-two countries represented, including the United States, in
favor of an international monetary unit and the adoption of the gold
standard. Following this conference the first important step in the
process of silver demonetization was taken by the newly created Ger­
man Empire December 4, 1871. By this act the gold standard was
established, and by the law of July 15, 1873, it was decreed that the
ALD




Measures for Demonetizing tiilver.

D

imperial gold coinage established by the act of 1871 should take the
place of the existing silver currencies of the various German States.
A portion of the silver thus displaced was sold by Germany from time
to time, as follows:

Year.

1873..................................................................................................
1874..................................................................................................
1875..................................................................................................
1876..................................................................................................

A verage
price (in
Proceed8 of pence)
per
sales.
ounce
standard.

1878..................................................................................................
1879..................................................................................................

$2,324,170
15,283,915
4,552,110
23,484,120
57,606,055
34,550,960
6,983,600

T o ta l.....................................................................................

141,784,930

59*
58£
57*
52£
54*
52*
50

The Scandinavian states, Norway, Sweden, and Denmark, by a
treaty signed at Stockholm, December 8, 3872, adopted the gold stand­
ard and discarded silver. Holland suspended the coinage of silver and
adopted gold June 6,1875. France, by the order of September 6,1873,
limited the mintage of silver for private account, and her coinage of fivefranc pieces ceased in 1876. In January, 1874, the states of the Latin
Union—France, Belgium, Italy, Switzerland, and Greece—agreed that
the aggregate coinage of the several states should not exceed 120,000,000 francs per annum, and this limitation continued until the final sus­
pension of legal-tender silver coinage by the Union in November, 1878.
In the United States, then using paper money chiefly, action was
taken in keeping with the general views which had in principle, as
early as 1857, been sanctioned by Congress. The invitation of France
in 1866 that we should join the Latin Union was taken into consider­
ation by Mr. Seward, then Secretary of State, and it was no doubt an­
ticipated that the Conference of 1867, in which this Government had
taken an active part, would eventuate in serious measures to be adopted
by Congress.
It was in accordance with this idea that, upon the report of Mr. Ruggles, bills to discontinue the silver dollar and to assimilate our gold
coin to European units were introduced early in 1868. At the next
Congress the bill prepared at the Treasury Department was presented,
ALD




The Pro-silver Policy of the United States.

10

debated, and passed by the Senate, which in a modified form afterward
became the Coinage Act of 1873.
The act of 1873 was, however, the least important of the series of
legislative acts which discredited the position of silver as one of the
principal money metals of the world. In 1873 silver formed nearly
one-half of the general stock of the world’s money, but the United
States held but a handful of it in comparison with other nations, and
in the form of full legal-tender coin it had not been in use in this country
for more than a q uarter of a century. Few legal-tender dollars had been
coined at our mints at any time subsequent to 1804, the lesser silver coins
had been cut down to tokens in 1853, and the Spanish dollar had been
d emonetized in 1857. The little metallic money that the use of paper had
left in the country was gold, and gold had been our principal money
at all times, for forty years prior to 1874.
In order that we may better understand the effect of these various
legislative acts upon silver it should be remembered that exclusive of
the absorption by Oriental countries and the small amounts held in
America, the world’s employment of silver for monetary uses was prac­
tically limited to the European countries, in which, with the exception
of the states of the Latin Union, silver was the sole standard of value.
The extent of the current demand for silver from these states for coin­
age purposes may be inferred from the statement that the coinage of 5franc pieces by the Latin Union for 1872, the year preceding the par­
tial suspension of coinage, amounted to 308,6*27,000 francs.
In 1878, however, when the United States commenc ed the compulsory
coinage of standard silver dollars, other demands for silver, outside of
Asia, for monetary purposes, had substantially ceased. To accentuate
the change in the relative demands for silver, the net Indian imports of
that metal fell from an average of 100,000,000 rupees per annum for
the period of 1855-1870 to an annual average of 30,000,000 rupees for
the years 1870-1875. Concurrently with the legislative destruction of
the demand for silver there was a marked increase in the silver pro­
duction of the world. The average annual production had more than
doubled. For the ten years, 1866-1875, it was 71,000,000 fine ounces,
while prior to 1866 the highest annual production had not exceeded
25,000,000 fine ounces.
This radical change in conditions, effecting a discontinuance of deald




The Basis of Our Pro-silver Policy.

11

mand in the face of an increasing supply, naturally produced a marked
divergence in the relative values of silver and gold. This divergence
was emphasized by an augmenting industrial use of gold and a coinci­
dent decrease in its production, the aggregate production for the ten
years following 1870 having been $112,000,000 less than for the ten
preceding years. While this revolution was taking place in the rela­
tive. values and uses ol the money metals, the paper-money circulation
of the world was reduced according to Neumann-Spallart from 7,914,000,000 reichsmarks in 1873 to 4,856,000,000 in 1879.

III.
The pro-silver policy of the United States rests upon the belief that
this disuse of that metal as money in some of the more important
commercial countries and the lessening of its monetary use in others,
causing the destruction of a long-established parity and leading to a
contraction of the world’s money, produced an appreciation in the
value of gold, or, in other words, a decline in the general level of prices
of commodities when measured by gold. Inasmuch as a certain sum is
actually in use as the monetary basis for the transactions of the world,
composed of about equal parts of the two precious metals, it is evident
that if over large areas one of these is discarded or its monetary use is
largely restricted, and the other metal is left to do the work alone, to
that extent a disarrangement of values and general disturbance of busi­
ness relations must occur.
It is not necessary for me to enlarge upon the disadvantages of a mon­
etary standard which is constantly appreciating in value. Any cause
that destroys the stability of money as a standard of deferred payments,
which is its most essential attribute, imposes obstacles to the growth
and development of the business interests of a community which can
not be readily measured. Any considerable contraction of the volume
of money causes inconveniences and imposes hardships upon all. If
long continued it enforces constantly diminishing profits in industrial
enterprises, produces irregularity of employment to all engaged in pro­
ductive labor, and impairs the free development of the producing power
of the world.
It is believed that a considerable share of the marked decline in
prices which have taken place is primarily due to improved and cheapALD




The Pro-silver Policy of the United States.

12

ened methods in production and distribution and to the lessened cost
of transportation, and that in so far as the fall has been attributable to
these causes the advantage to mankind has more than compensated for
any loss. While it is fairly established by weight of opinion that a
portion of the decline is traceable to an appreciation in the value of
money owing to inadequacy of volume, it must also be conceded that
this consequence has resulted from general causes affecting alike the
money and prices of every civilized country. The changes which have
taken place in the currency of the United States have had no appreci­
able or specific effect upon these results, for as a matter of fact our mone­
tary supply has increased at very nearly even pace with the growth of
our population and business. While we have not suffered lrom any con­
traction of the volume of our own currency, the United States in com­
mon with other countries has felt the influence of the evils which have
arisen lrom this general monetary disturbance throughout the world.
The divergence of the relative value of the precious metals has im­
posed upon us losses of a peculiar character, having stimulated exports
from silver-using countries of competing agricultural products, notably
of wheat and cotton, and at the same time tended to diminish the value
of our own exports to those couutries. It is further recognized that
unless silver is fully restored to the monetary position which it occu­
pied for centuries, a further and more disastrous fall in prices will in
time be inevitable, while on the other hand, with the restoration of
that metal to its full use as legal-tender money, the general level of
prices will be more steady, greater stability in value of money be se­
cured, more substantial equity maintained between different interests,
and greater prosperity attained.
There is no substantial difference of opinion among Senators as to
the nature of the evils which have arisen from the outlawry of silver.
The diversity of opinion does not relate to the general question of the
importance and the right of having silver restored to equality with
gold, but merely as to the nature of the remedy which would be found
effective and to the method of its application.
Senators forget in their enthusiasm over generalities that we are
simply engaged in a controversy over the ways and means of accom­
plishing a result which has for many years been recognized as desirable.
Such amazing effusiveness of argument as we have heard upon this
ALD




The Cry of u More Money.”

13

floor in favor of silver is a work of supererogation. The real question
before Congress is one as to the method of reinstatement, and this I pro­
pose to discuss.
But before proceeding with this, it may be profitable to refer very
briefly to some of the underlying principles which should control our
action in monetary legislation.
I have alluded to the disastrous effects resulting Irom a contracting
currency, yet a rise in prices secured solely by an abnormal increase in
the amount of money in circulation is equally unjust, if not equally
deleterious. An excess of currency is only less mischievous than a
scarcity. Growth of population and expansion in business should be
adequately provided for, but to change the value of money in order to
allow debtors to pay in a currency less valuable than the money ot
the contract is to legalize repudiation in its most dangerous form. Sena­
tors confuse the argument in favor of such a wise increase of the money
supply as w ill maintain equitable relations, with the popular demand
which is said to exist in some portions of the country for inflation. The
cry for “ more money,7’ without regard to its quality, is indulged in
mainly by unthinking people who expect that by some magical process
their debts w ill be paid and their permanent prosperity and wealth
secured by a large increase of the money supply. The difference be­
tween the natural expansion of the volume of money to meet increasing
demands and to preserve an equitable standard of deferred payments
on one hand, and an abnormal inflation undertaken for the avowed
purpose of ameliorating the condition of the debtor class on the other,
is as great as the contrast between justice and injustice. It is the dif­
ference between the healthy nourishment which gives growth, strength,
and vigor to the human system, and intoxication, which exhilarates
only to weaken and destroy.
The truth is that professional agitators and speculators in Wall street
and elsewhere are the parties who are to-day most anxiously watching
Congressional proceedings with a hope that they may profit by some
scheme to be adopted which shall degrade our monetary standard and
set the business of the country afloat upon a sea of uncertainty. There
is no evidence that a proposition of this kind would command the sup­
port of the intelligent people of the country. It is true that a large
number of petitions have been presented to the Senate in favor of the
ALD




The Pro-silver Policy of the United States.

14

free coinage of silver, but they are largely of the machine class, such as
are prepared by committees in Washington and sent out with appeals for
signatures, to reappear here with the pretense that they embody the will
of the people. Taken at their best, they represent, as I have indicated,
but the vague ideas of that order of dissatisfied or speculative people
who in all ages of the world have been attracted by visionary schemes
for increasing prosperity by cheapening money, and by the belief that
through some legislative legerdemain they can secure a competence for
themselves without an exercise of the virtues of industry and economy.
These vain hopes which so constantly reappear in human experience
furnish the springs of action which give force to this movement for
“ more money. ’’ I f monejr is to be cheapened and issued in unlimited
quantities upon the plea that debasement and inflation alone w ill fur­
nish a panacea for the dreadful ills that are now afflicting the people
of the United States, and which, by the way, exist only in the imagi­
nations of Congressional orators, then the unlimited p urchase of silver,
as proposed in the amendment of the Senator from Colorado, is the most
extravagant and expensive remedy.
The plan of coining land proposed by the Senator from California [Mr.
S tanford ], or the warehouse system for issuing notes on farm prod­
ucts, supported by agitators in the Farmers’ Alliance, have great ad­
vantages in economy and in elasticity in volume of issue over the plan
of our silver-inflation friends. Those who argue for cheapness and for
quantity are logically bound to admit that inconvertible paper money,
involving simply the cost of paper and printing, is in these respects in­
comparably superior to silver.

IY.
We have seen that the mischief from which all are suffering was
caused by the arbitrary abridgment of the demand for silver in every
part of the commercial world outside of the United States. It is ob­
vious, then, that to restore silver, or to take any effective step in that
direction, we must by some means secure a much greater aggregate
employment of that metal as money in the countries where the diminu­
tion in use has taken place. It would be of no avail if one country
should increase its holdings or uses and others should diminish theirs
to an equal or greater extent. I f from $300,000,000 to $500,000,000
ALiD




The Sole Method of Restoring Silver.

15

of silver should be transferred from the stock of other nations to the
United States to take the place of our gold, no benefit, but only injury,
•would result to the cause of silver by the transfer. As the disturbance
covers the area of the world, the remedy must also be world-wide.
International restoration must be coextensive with international de­
struction.
Outside of this Chamber there exists, as I have indicated, a remark­
able unanimity of opinion that the attempt of any single country, how­
ever powerful, to accomplish this work of restoration would necessarily
result in failure. For example, the report of that portion of the British
Royal Commission on Gold and Silver who were most friendly to silver
contained the following emphatic statement:
N o settlem ent o f th is difficulty is, in our opinion, possible w ith ou t interna- .
tio n a l action.

Indeed, I know of no leading political economist or student of mone­
tary questions who has any claims to be considered an authority upon
this subject who does not concur in this opinion. A complete remedy,
then, can only be found in such action as shall secure the opening of the
mints of the leading commercial nations to the fiee monetary use of
silver at a common ratio. This action would successfully fix the rela­
tive value of the two metals, which would thus become interchange­
able in use. and silver would again be added to and become a perma­
nent part of the common mass of the world’s money.
Partial and temporary remedy may be afforded by a concurrent agree­
ment on the part of various nations to increase their holdings and em­
ployment of silver for monetary purposes.

v.
The measure reported from the Finance Committee, if adopted, would
be simply a more determined and aggressive effort in the direction of
the policy which was adopted by the United States in 1878.
This bill authorizes the purchase of $4,500,000 worth of silver bullion
monthly, to be paid for in Treasury notes of the United States, redeem­
able on demand in coin. The amount of these notes is never to be greater
or less than the cost of the bullion held in the Treasury as security for
their redemption. It was believed by the majority of the committee
AU>




The Pro silver Policy of the United States.

16

who reported this bill, in view of the necessary retirement of nationalbank notes, to which I have alluded., that the addition of $54,000,000
a year to the amount of our paper money circulation would not be ex­
cessive. They believe that the Treasury would have no difficulty, at
least none in the near future, in maintaining this issue at par with
gold and silver coin, and they, of course, regard the maintenance of
this equivalence as of the first importance. The notes are to be issued
against an amount of bullion equal in value, to be held in the Treas­
ury as a guaranty of their security.
Some of the overzealous friends of silver have characterized the pro­
vision that bullion is to be held by the Treasury instead of coin as a
“ demonetization of silver, and the treatment of that metal as a com­
modity. ” It is difficult to understand the force of this objection. As
the bill requires the issue of notes in all cases for the purchase of bull­
ion, and that the amount of notes outstanding shall never be less than
the cost of the bullion in the Treasury, it is evident that the silver pur­
chased must be at all times in active monetary use through its paper
representatives.
The bill also requires the coinage of such number of standard dollars
as may be necessary for redemption purposes; and why should any one
care for further coinage ? The mintage of silver destined to lie in Gov­
ernment vaults is an expensive process. It would cost the people of
the United States fully a half a million dollars every year to coin the
bullion proposed to be purchased by this bill.
We have to-day in the Treasury about $20,000,000 of silver, not in­
cluding subsidiary coins, uncovered by notes. What justification can
there be found for incurring the expense of coinage for other than the
redemption purposes provided for in this bill ? Instead of demonetizing
silver the system we propose will in fact more effectually ‘‘monetize ’’
it than that now in force. In 1886 there were, as I shall show, ninetysix millions of silver dollars in the Treasury uncovered by certificates.
This could not happen under the provisions of the bill of the commit­
tee, as every dollar’s worth of bullion bought is vitalized into money
from the day of its purchase. In fact, the proposal of the Finance Com­
mittee seeks to introduce for the first time in our monetary legislation
the principle of the mandatory monetization of silver.
ALD




The Change of Sentiment in Europe.

17

VI.
The effect of the Conferences of 1878 and 1881 and of the work done
in connection with them was to bring to the attention of the European
nations that had partially demonetized silver the fact that it was for their
interest to join us in an attempt to re-establish the legal equality of the
metals. In looking at the result it must be recognized that it requires
a prolonged effort to induce nations to undertake a new monetary policy,
and that it requires special effort to secure their consent to act in concert
upon a question of this kind. If the proposal for a general demonetization
of silver should be started as an original proposition to-day, no one w ill
venture to say that it would command favorable consideration in any
quarter. But we are called upon to deal with accomplished facts and
to devise a remedy for harm already done. While the European world
are not likely to continue their attack upon silver, they are slow to
move in the direction of reparation. The United States have tried,
with uneven zeal it is true, to arouse them to action.
I f the people in each nation of Europe had been fully alive to their
own interests the whole matter would have been settled within a short
time after 1878. Unfortunately neither of two leading nations, Eng­
land and Germany, was then ready to do her share. But the Confer­
ence of 1878 operated to call a halt in Germany’s demonetization. The
sales of thalers were suspended in 1879. Germany, who had refused
our invitation in 1878, sent delegates to Paris in 1881, and she, as well
as England, was then, sufficiently alive to the situation to offer sub­
stantial aid in the work of joint interest. The declarations of these
countries at that Conference formed a basis for further action. By mak­
ing them, they conceded the main point at issue and admitted the force
of the fundamental reasoning upon which the project of an alliance
for parity is based. No doubt they thought that France and the United
States, with the allies which those countries could have secured, were
sufficient to establish the parity of the metals, and they evidently hoped
that with the co-operation they offered the work would be undertaken.
But it was not done. France was waiting, presumably for the United
States, and in the United States there was an indisposition to act. Noth­
ing was done by legislatures or executives, but it can not be said that
the time has been entirely lost. The work of education and agitation
ALD—

2




The Pro silver Policy of the United States.

18

has proceeded bravely in England and Germany. The gilver leagues
formed at Berlin and London in 1881 and 1882 have been constantly at
work leavening public opinion in those countries.
England is a country of which Englishmen say the public opinion of
one year is the law of the next, and public opinion is clearly moving
in our direction. The bitter experience which the fall in silver has
brought to many great industrial and property interests in that coun­
try has strongly re-enforced the friends of sil ver. I shall not attempt
to give in detail the various notable steps in the progress of the work
which have been taken in Europe. These have been well set forth by
Mr. Horton in his recent work on “ Silver in Europe.” I will simply
refer to one or two salient facts.
The report made in November, 1888, by the British Royal Commis­
sion on Gold and' Silver was a notable event in monetary history.
This body of twelve eminent men had given two years of close inves­
tigation to this great and perplexing subject. Their report is a model
o f comprehensive and exhaustive treatment. The Commission was
ably presided over by Lord Herschell and numbered among its mem­
bers such men as Mr. Barbour, then financial secretary of India, well
known for his intelligent zeal in advocacy of the cause of silver, and Mr.
Balfour, whose great abilities are universally recognized.
Their report has been represented as a case of divided counsels and
inconclusive results. This statement conveys an incorrect idea of what
was actually accomplished. Six of the members adopted without re­
serve the platform of the friends of silver. The other six looked with
approval upon the possibility of future arrangements between nations
to reduce fluctuations in the standards of value, but they were not ready
to commit England to what they regarded as a radical change in her mone­
tary policy. They suggested, however, an increase of silver uses through
the purchases of bullion upon which to base the issue of small notes.
The silver men have now a hundred votes in the House of Commons
and have many influential friends in the House of Lords. Two mem­
bers of the cabinet, Mr. Balfour, and Mr. Chaplin, the new minister
o f agriculture, are arrayed upon their side, and the rising leaders of
economic thought in England, including such men as Professors Nich­
olson, of Edinburgh, and Foxwell, of London, ably sustain their cause.
ALD




The Effect in Europe of Measures Adopted Here.

19

In other European states the interest in silver is maintained, though
all look inquiringly to England.

VII.
For us, then, the true question is in what way our leadership in this
movement can be maintained and made most effective.
There are, it seems to me, three alternatives open to us within the
limits of safety: First, we can place before European countries an ulti­
matum making the further purchases of bullion by us dependent upon
their favorable action in aid of silver; second, we can maintain the
status qmt or, third, we can adopt a safe measure which w ill largely
increase our purchases and the use of silver.
Many reasons have existed in the past in favor of the first proposi­
tion. It has been strenuously objected to as dangerous by the extreme
mends of silver, but I believe that if the United States had adopted it
years ago the whole question would have been settled before this.
The agitation which would have resulted from the mere prospect of
a. more radical fall in the price of silver would have stirred European
public opinion into action Iona: ago. The best friends of silver believe
that Englishmen would soon come to see their interests if agencies
were adopted to enforce their serious attention to the subject. These
agencies could certainly have been found in a threat of the suspension
o f coinage by the United States. Our coinage law has operated to q uiet
English solicitude as to the state of the money metals. But this can
not now be considered a practical measure.
The second alternative, judging from our experience, does not give
promise of satisfactory results, and we are left to consider the probable
effect of the third.
The recent rise in the price of silver caused by the mere antici pation of action by Congress in this direction has stirred the whole world
to see its interest in silver in a new light, and it has largely stimu­
lated that agitation which alone can secure governmental action. As
Mr. Chaplin said in a recent speech in England, people are getting a
chance to realize what a rise in silver means, and that they can not afford
to have it fall again.
The chief obstacle in our path in 1878 and in subsequent years was
ALD




The Pro-silver Policy of the United States.

20

the prejudice of inherited traditions which misled European legislators
and officials as to the true policy and interest of their respective na­
tions. This prej udice formed a great array of dogma behind which the
inertia of nations was intrenched. We understand from our own some­
times tedious experience what the inertia of nations means. Taking
Washington as an example we can realize what the cause of silver has
had to encounter at other capitals. But as I have said, the work of
conversion has been carried on all these years, aided by the constant
pressure which the outstanding proposition for an alliance from the
United States has exerted, and a breach has been made in this barrier
of European prejudice. The opposition of 1890 is not the,same that
our Commissioners met in Paris in 1878, npr even that which the silver
wing of the Royal Commission encountered in 1888.
It is in the light of this changed state of affairs that the bill under
consideration is to be discussed. The question is, w ill it have the effect
to stimulate the action of the friends of silver on the other side of the
Atlantic? It will certainly prevent a continued fall in the price of
silver, which otherwise might occur with the increase in its produc­
tion. It will undoubtedly bring about a rise in price beyond the rate
of to-day. It will in a practical form bring to the attention of every
thinking man in the countries of Europe and Asia the peculiar interest
which these countries severally have in the ratio of the precious metals
to each other. I trust it w ill more clearly demonstrate to all, whether
specially attached to silver or to gold, or to paper money based upon
one or both, that the true interests of all is in a settlement. Such a
settlement is practicable. As I have said, the prop osition of the United
States in this regard is yet outstanding. It is in view of the known
purpose of the United States to promote the cause of silver that the
perturbations, whether beneficial or injurious, which this act shall
cause will be regarded in Europe and Asia.
I, for one, am willing that the expe riment shall be tried. I say ex­
periment advisedly, for it is an experiment whether the Senators who
may give it their support think so or not. This Congress can not pass
an act which w ill be a finality upon this great question. It must be
tentative and experimental; a measure liable to repeal or modification
in a wider sense than is usual with such acts. The final object of our
policy is to establish a legal equality between gold and silver. Gold
ALD




Counter-Propositions.

21

is universal, international money to-day, silver is not; it will not be
international money should this bill be passed. It remains for the
Legislatures which have given gold the privilege by virtue of which it
holds its rank as universal money to give a similar privilege to silver.
Until this is done there can be no equality as money between the two
metals. This is the fact of all facts, and it is useless for Senators to
endeavor to persuade themselves or to attempt to persuade others to
the contrary. This fact defines in advance the limitations upon the
policy of Congress. It is well we should all fully understand that the
expectant attitude of the past must be maintained. The bill reported
irom the Finance Committee was prepared with a view of keeping
within these limitations.

VIII.
To this distinctively pro-silver measure, which I believe to be wise and
conservative, are opposed propositions for free coinage and for the un­
limited purchase of silver bullion.
There is a radical difference between the position taken by the friends
of the movement for the international restoration of silver and that of
Senators who support these extreme measures. The latter base their
proposals on the illogical theory that the cause of silver is a local issue.
They treat it as if it were confined to the limits of the United States.
They attribute all the ills from which our people, or any portion of
them, have suffered in the past twenty years to the adoption of the mint
act of February, 1873. They assume that this act alone, which is flip­
pantly characterized as a crime against civilization, has produced dis­
astrous results upon the business and prosperity of the country beyond
computation. Because we had a much higher range of prices prior to
1873 it is assumed that the people of the country were vastly more
prosperous in that period, and as this condition of higher prices and
greater prosperity was coincident with a law permitting the unlimited
•coinage of standard silver dollars, therefore that both higher prices and
prosperity must necessarily return with the re-enactment of legislation
permitting the free coinage of silver.
This argument is hardly worthy of serious consideration. A mere
statement of the facts discredits it. The permission to coin silver ex­
isted, but no one cared to take advantage of it. What influence could
ALD




22

The Pro-silver Policy of the United States.

this mere shadow of a fact exert ? There had been but a trivial amount
of legal-tender silver money in circulation in the United States from
1834 to 1853 and none between 1853 and 1873. As there was no legaltender silver money in existence, it could not have exerted any prac­
tical influence upon the prices of commodities or upon the prosperity of:
the country.
Indeed, if the period referred to was one of high prices and unexam­
pled prosperity the friends of the gold standard might with much more
force claim that this thriving condition of affairs was owing to the fact
that gold alone was used as the metallic money of the United States.
The argument for gold would rest on something that actually hap­
pened, while that in favor of silver would depend on something which
did not take place. If the intentional exclusion of silver from use
in this country as legal-tender money is held to be criminal or evil in
its results, we must find as the guilty parties President Jackson, Mr.
Benton, and the other leaders of the hard-money Democracy of 1834.
The authors and promoters of the coinage acts of 1834 and 1837, by the
adoption and retention of the ratio of 16 to 1, deliberately excluded
from the Mint of the United States its own silver product and that
of Mexico and the other American states. The law nominally provided
for a double standard, but in effect it establish ed gold as the sole
standard.
If it should be said, on the other hand, that it was legislation, and
not the actual use of silver money, that induced prosperity, our course
now would be simplified. It would be much more economical for us
to follow the precedent of 1834 and pass a bill which would nominally
permit the free coinage of silver, but actually prevent its use.
It is further maintained in the same interest that the act of 1873 wasa wicked and deliberate disturbance of the equitable relations then ex­
isting between the debtor and creditor classes of the country, which
should be corrected; that by its operations an appreciation in the value
or purchasing power of money took place to the extent of 40 per cent.;
and it is proposed now, after the lapse of nearly a score of years, lor
the purpose of enabling the debtors of to-day to discharge the enormous
amount of their indebtedness by some easy method, to depreciate the
value of money to the same extent, thus to establish what they call au
equilibrium. It is difficult to conceive of a more illogical argument
ALD




A Revolutionary Scheme.

23

than this, and yet, by consent of all its eloquent advocates, this is the
chief of all arguments in favor of the unlimited coinage or purchases of
silver.
It is evident that but a very small proportion of the present indebt­
edness ot the country of any kind was contracted prior to 1873, and it
is further evident that of that portion which has continued for seveneen years without mo dificationof contract almost the entire sum must
be owing by large railroad and other corporations, who are not the most
worthy objects of our solicitude. The great mass of indebtedness has
been contracted within a few years and is therefore payable in money
equal in value to that now in circulation. If certain persons suffered
from the legislation of 1873, we can not redress their grievances by au­
thorizing an entirely different class in 1890 to repudiate one-third of
their indebtedness.
When we look closely into the matter, we shall find that the great
creditor class, great in number and in the total of credits due them,
are the intelligent and thrifty workingmen and working-women of the
country. The legalized robbery now proposed is directed mainly
against them. They are the depositors and stockholders in our sav­
ings-banks and other moneyed institutions. Their deposits and in­
vestments of this and other kinds and the vast sum due to them con­
stantly for wages constitute an enormous credit fund, upon which rests
the business of the country. It is proposed to abstract a large portion
of the savings or the earnings of these for the benefit of speculators and
railroads or other large corporations, and large employers of labor, who
would be the principal beneficiaries of the legislation proposed.
In strange contrast with these frantic appeals for a restoration of the
status which existed before 1873 is the fact that the advocates of un­
limited silver actually desire to establish something quite different from
the monetary condition which then existed. By the terms of the mint
act of 1853 depositors of silver bullion were entitled to receive standard
silver dollars for each 412J grains of silver nine-tenths fine deposited,
subject, however, to a coinage charge of one-half of 1 percent, to cover
the cost of mintage. The revival of this privilege would be far from
satisfactory to silver inflationists, for obvious reasons. What could th?
depositors do with the coin they would receive ? It could not be kept
in circulation as money to any considerable extent. With the most
ALD




24

The Pro-silver Policy of the United States.

strenuous exertions of the Department to promote the circulation o f
silver dollars by paying the expense of their transportation from the
Treasury to any part of the country the amount in circulation has
never reached $1 per capita. Experience has thus conclusively shown
what the habits of our people are. Can any Senator point out any
means by which their habits can be changed in this regard ? By the ex­
traordinary efforts of Secretary Manning to enforce their monetary use
by withdrawal of ones and twos of United States notes and nationalbank notes a maximum circulation of $61,000,000 was reached in 1886,
but this amount was reduced to $56,000,000 in 1890 by natural causes.
Public protests against the action of the Treasury Department were so
vigorous and universal that it is safe to say that the experiment of Mr.
Manning w ill not be repeated, and it seems unlikely that silver dollars
w ill ever secure a much wider place in the circulating medium of the
country than they now have.
The friends of unlimited silver are conscious of these facts. They
use the appeals in behalf of the status quo before 1873 simply as a rally­
ing cry. When obliged to reduce their ideas to the form of a bill we
find that it is not the silver dollar of the fathers that reappears, but a
new paper certificate or note of some kind, and in all cases silver is re­
manded to the position of monetary merchandise consigned to Treasury
vaults, with no expectation that it will ever circulate from hand to
hand.

IX.
It is further to be observed that all the extreme propositions pend­
ing agree in extending either to silver coin without lim it or to silver
bullion without lim it the ratio of legal equivalence to gold of 16 to 1,
or rather 15.98-f- to 1, established in 1834. Even if the3e schemes were
tolerable on other grounds, they would require radical amendment in
this. The thousand millions of European silver is coined at the ratio of
15} to 1, and if an agreement is reached with other nations it w ill
probably be upon that basis.
With our mints open, if France or any other European country should
attempt to extend the use of silver by opening its mints, silver would
flow to them from the United States as it did in the years prior to 1873.
So the ratio of 16 to 1 here would interdict the coinage of legal-tender
AT,T>




Unlimited Purchases of Bullion.

25

silver outside of Asia, Mexico, and the United States. With any prob­
able enlargement of the silver output the concurrent action of nations
on the lines heretofore proposed by Congress would readily maintain
a fixed ratio. But the selection of a ratio is a matter to be agreed upon
by concert of action between independent nations. To attempt in the
face of the facts I have set forth to impose a ratio of 16 to 1 upon Eu­
rope is simply to put an obstacle in the way of international agreement.
The Senator from Colorado recognizes the fact that the American
people will not consent to the direct use of silver do liars as money,
and for this reason proposes, instead of free coinage, the unlimited pur­
chase of bullion at the ratio of 16, that is to say, at a fixed price of
$1,298 per ounce. For each 412J grains of silver bullion nine-tenths
fine deposited in its mints and assay offices he proposes that the United
States shall issue its obligation to the amount of $1 in the form of a
Treasury note which is made a legal tender 1or all debts, public and
private.
This, in a word, is the enforced compulsory purchase, without lim it
as to quantity, of the silver bullion of the world, at a price 30 percent,
in excess of its present market value. In the absence of any action
guarantying the general status of silver as a money metal, and estab­
lishing its value relatively to gold, this proposal is unique; it is safe
to say it has no parallel in the monetary history of the world.
If, pending the effort to secure this complete restoration, it is desira­
ble—and I agree that it is—to increase our purchases of silver bullion as
a basis of circulating notes, then these purchases should be made in
fixed sums at stated periods; and if they are to be made for the public
benefit, they should certainly be made at the market price.
If the silver now in the Treasury had been purchased at the price
fixed in the amendment of the Senator from Colorado—that is, $1,298
per fine ounce—the cost to the people of the United States would have
been $112,000,000 greater than if purchased at the price current for
the year 1889.
The evils which would arise from the adoption of this proposal for
unlimited silver purchases may be summarized as follows:
First. It would inevitably create distrust and alarm in conservative
business circles. While the inflation sure to follow would raise prices
and induce an era of wild speculation, legitimate industrial and busiALD




26

The Pro-silver Policy of the United States.

ness activities would all the time suffer from the doubt and u n c e r t a i n t y *
necessarily arising as to what would be the ultimate consequence of
a change in monetary standards.
Second. We should be overwhelmed with an influx of silver from
every part of the world, which would by its effects drive out gold, and
place the country upon a silver basis.
Silver would flow to the United States by virtue of a law as irresist­
ible as the law of gravitation. It would come here because the United
States would effectively pay a higher price for it than could be ob­
tained elsewhere, and the inflow would continue as long as the price
was higher here than in any other part of the world. It would come
here by operation of the same law that for years sent silver from Ne­
vada and from the ancient mines of Mexico past the open doors of the
mints of the United States to Paris, because the min t value of silver
bullion in that city was 3} per cent, higher than in Philadelphia or
New Orleans. Now, if it be the desire of the Congress of the United
States to attract the silver stock of the world to our shores it would
not be necessary to bid 30 per cent, above current market values. Any
appreciable percentage of excess over the cost of transportation would
be sufficient, as has been shown by the experience I have referred to.
It is important that the people of the United States should under­
stand the exact character and practical effect of the legislation proposed
by advocates of unlimited purchases of silver. Having taken steps to
force out of existence the national-bank notes, a perfectly safe and sat­
isfactory form of credit currency, whose issue imposes no responsibility
or expense upon the United States, but is an actual source of annual rev­
enue, the silver extremists make this enforced retirement the excuse for
enforcing an unlimited increase in the obligations of the United States,
in the form of Treasury notes issued for purchases of silver bullion.
The issue of these notes would impose upon the people of the United
States, first, an obligation to provide for their redemption and to main­
tain their parity with other forms of money; second, the expense which
would be involved in the purchase of the bullion at a price greatly
above its present market value; third, the cost of coining the silver and
of engraving, distributing, and redeeming the notes. As a net result,
we should have, therefore, an extra cost to the public for each hundred
million of dollars issued of possibly twenty-five to thirty millions of
ALD




False Data and Erroneous Arguments.

27

dollars for the bonus paid to the holders of silver bullion, and $1,000,000 for unnecessary mintage. This would be enhanced annually by a
million dollars for extra expense of maintaining these notes as compared
with national-bank notes.
There are, however, considerations of more importance to this pow­
erful and progressive people than the additional expense, great as it is,
involved in the currency changes proposed. In the midst of an era of
unexampled progress and prosperity, with a sound currency, every
portion of which has an established parity with the chief money of the
civilized world, with the Treasury holding a sufficient stock of gold to
guaranty a continuance of this parity, we are startled by a proposition
which will disturb confidence, destroy commercial activity, throw sus­
picion upon public and private contracts, and establish confusion in
place of order.
x
The effects of this proposed monetary revolution would be equally
disastrous to the cause of silver. There exists, as I have observed, a
universal willingness and anxiety to restore silver to its ancient place
as money, and this is taken advantage of and made the excuse for meas­
ures which promise irreparable injury to that cause, and which would
place in peril every material interest of 65,000,000 people. So illadvised are the silver extremists in Congress that in the legislation they
propose every safeguard suggested by the conservative judgment of
men who have given monetary subjects intelligent study and every
limitation which the experience of nations have shown to be indispen­
sable against disaster are wantonly disregarded.
It is true these advocates of unlimited purchases propose an answer
to the objection that we should be flooded with silver if their proposal
were adopted. They assert—
1. That there is no surplus stock of silver in the world beyond that
in use for coinage purposes.
2. That to send the silver in use as coin to the United States for sale
would entail a great loss on exporting countries.
It is apparent from careful examination that neither of these points
is well taken. Dr. Soetbeer estimates the silver production of the world
from the discovery of America in 1492 to the present time, roughly, at
ALD




The Pro-silver Policy of the United States.

28

$9,500,000,000, and that of this amount from three thousand five hun­
dred to four thousand millions are represented in the silver coinage of the
world. I f we estimate that one-fourth of the total amount has been de­
stroyed we should then have, say, $3,750,000,000 worth of silver now in
existence in other forms. In- view of these estimates it is quite as incor­
rect to say that there is no surplus stock in the world, as it would be
impossible to determine just what the portion of the silver hoard exist­
ing in the form of ornaments or otherwise would be offered for sale if
the price of bullion should be augmented.
It is quite possible, however, that the United States might be del­
uged with silver from sources quite independent of this general stock
o f the world, if the policy of unlimited purchases should be adopted
by this country alone. Current production would be greatly stimu­
lated by the bid of the United States to purchase at an exaggerated
price, and the total amount of such increment would be poured into
our vaults. The advocates of free coinage in 1876-’77 confidently pre­
dicted that the silver production of the world had reached its maxi­
mum, and that a gradual return to the normal average of the century
prior to 1860, or about 20,000,000 of fine ounces per annum, was in­
evitable. In place of this, however, we have had a constant increase
in production, until in 1889 the product of the world as estimated by
the Director of the Mint, reaches the aggregate of 125,830,000 fine
ounces, or mo:e than six times the annual average for the century re­
ferred to.
The table which I w ill append to my remarks, marked Exhibit
A*, shows the silver production of the United States for the years from
1873 to 1889 inclusive, according to the estimate of the Director of the
Mint and of Mr. Valentine, to which is annexed a table (see Exhibit
B) containing Mr. Valentine’s estimate of the silver product of Mexico
for the past twelve years. The first table discloses that an increase in
the annual production of the United States has taken place, by Mr.
Valentine’s estimate, from 21,000,000 fine ounces in 1873 to 69,000,000
fine ounces in 1889, and by the estimate of the Director of the Mint an
increase from 27,000,000 fine ounces in 1873 to 50,000,000 fine ounces
in 1889. And this took place in the face of a decline in the average
value from $1,298 per fine ounce in 1873 to $0,935 per fine ounce in
1889. The increase in Mexico is equally significant. The silver pro* T he tab le referred to m ay be see n in th e printed proceedings o f Congress
for th e date m entioned.
ALD




Replacement of Our Gold by Silver.

29

duction of that country rose from $25,000,000 in value in 1877 to
$41,000,000 in 1889.
If this remarkable increase has taken place simultaneously with a
constantly decreasing price for silver, we may anticipate—with an
enhanced value and with improved methods, with the opening of new
fields and the discovery of new mines—a more rapid i ncrease in the
near future. It is understood that a considerable number of mines in
Montana and in other sections of the country which are not profitable
to work at the present low price of silver would be at once put in op­
eration if a considerable advance should take place. In 1875 the value
of the silver product of Montana was $650,000, while in 1889 it was
over $20,000,000. In 1887 200,000 fine ounces of silver were produced
in Australia, and in 1889 8,600,000 fine ounces. The gold product of
Australia has for a number of years been equal to that of the United
States, and it is quite possible that this country may be an equally for­
midable rival in the production of the white metal, as some of the mines
recently opened in the Broken Hills district are said to be the richest
in the world.
But, in any case, if either of the extreme measures proposed should
become a law we should have established a market for the surplus silver
coins of European states. It is with strange confidence assumed by the
silver extremists that the European countries which hold large amounts
of silver coin at a nominal rate greatly in excess of its bullion value could
not sell their silver for shipment to the United States without a loss
equal to the difference between such nominal value and the sum re­
ceived for the bullion. It w ill appear, however, upon investigation,
that this claim has no foundation whatever. The value of its silver or
other coins to a Government is simply the market value of the bullion
contained therein plus the cost of coinage. It must also be remem­
bered that the European countries who hold this $1,000,000,000 in silver
coin have no pecuniary interest in the production of silver. We may
safely assume that they w ill be ready to exchange a considerable por­
tion of their silver holdings for gold if an opportunity should be given
them to do so without an actual loss. We can easily illustrate the
situation of European Govern men ts in this matter by reference to the
position of our own Government in a case directly under our eyes.
There is now in the Treasury of the United States, borne on the books
ALD




The Pro-silver Policy of the United States.

30

as an unavailable asset, subsidiary silver coin to the.nominal value of
$25,000,000. Its bullion value at the present morket rate is, say,
$17,000,000. If this coin should be destroyed the loss to the United
States would be $17,000,000 and not $25,000,000. If it should be sold
at its bullion value ($17,000,000), and we should afterwards desire to
coin $25,000,000 in nominal value of subsidiary coins, the requisite
bullion—the market remaining unchanged—could still be bought for
$17,000,000, and the only loss we should suffer would be the cost of
mintage.
We might take a more pertinent illustration in the case of the
Belgian five-franc pieces now held by the Ba nk of France, which are
liable to be returned to Belgium at the close of the present year under
the stipulation of the convention by which the Latin Monetary Union
has been continued from year to ^ear. The nom inal value of these coins
is, say, 200,000,000 francs, which would have a bu llion value at the pres­
ent prices of, say, 150,000,000 francs. I f Belgium has, as I believe, no
use for these coins for monetary purposes and the price of silver bullion
should remain constant, she could sell them witho ut loss for 150,000,000
francs. As a matter of fact, however, under existing conditions, no
unlimited-purchase act having been passed in the United States, they
•could not be sold at the present marke.t pri ce, for to throw this large
amount of bullion upon the market would cause a serious break in
prices. If, however, the United States sh ould make an offer, through
•Congress, to buy this coin for 194,000,000 francs in gold, equivalent to
59 pence per ounce, does any one suppose th a t Belgium, as a prudent
Government, would neglect to make the sale? If the price of silver
bullion should remain at the price of 59 pe nee per ounce, the equiv­
alent of the United States Mint price, and Belgium should decide to re­
place her coinage, the only expense she would be subjected to by the
entire transaction would be the cost of transforming the bullion into
coin. If, on the other hand, the United States should not be able to
maintain the price of bullion at 59 penc e per ounce and it should fall
back to the present price, and then B elgium should see fit to replace
her coinage, she would make an actual profit of 44,000,000 francs by the
transaction. In any event the only possible loss to the Belgian Govern­
ment would take place in the case of a subsequ ent advance of silver
abovethe American mint price, which would be altogether improbable.
ALD




Further Demonetization in Europe.

31

I f Belgium should require bullion or coin for monetary use, for in­
stance, as a basis for bank-note circulation, the gold obtained by the sale
of silver would have equal if not greater value for this purpose.
The same reasoning applies to all the silver stocks of Europe. In fact,
no man can safely lim it his predictions as to the amount of silver which
would be discarded by European governments and would find its way
into the American Mint if the policy advocated by the Senator from
•Colorado should be adopted. It is quite certain that we should enable
Germany to sell her 150,000,000 silver thalers if she were so disposed.
This view is enforced by an article in the Hamburg Exchange news­
paper (Borsenhalle), of the 20th of March, 1890, written by Professor
Adolph Soetbeer, in which he uses the following language:
T here can be no doubt that th e present position o f G erm any is in all respects
. a favorable one as compared w ith other countries, and inspires confidence in th e
future. G erm any can therefore contin ue calm ly to w ait and observe th e in­
fluence w hich th e silver crisis apparently im p en d in g in th e U nited States w ill
ex ert on th e price o f silver. B ut if th e expectations should be realized o f th ose
w h o expect that the policy th us adopted sh all, through enlarged purchases of
silver for th e treasury and speculations connected w ith them , raise th e price
o f silver to a great h eig h t for a tim e—m erely to bring it dow n and k eep it dow n
afterwards—then certainly the im perial G overnm ent shou ld prom ptly tak e ad­
vantage o f the opportunity (wiirde die R eichsregierung diese K onjunktur
rasch zu benutzen haben) and bring about th e desired com pletion o f our coin­
a ge reform b y sellin g o ff large sum s o f silv er out o f our thalers to be m elted.

No Senator, I suppose, w ill question the authority of Dr. Soetbeer.
Mr. TELLER. I should like to ask the Senator if he means to say
that Dr. Soetbeer speaks officially?
Mr. ALDRICH.
Mr. TELLER.

Mr. President, he does not, of course.
He is not an officer of the Government ?

Mr. ALDRICH. I suppose the Senator from Colorado undertands
that as well as I do.
Mr. TELLER. I should like to say that he does not state in that
article (for I have the article on my table at home) that the Govern­
ment will do this. He says very likely the Government will do this.
His letter appeared in the French Economist, perhaps ten days or two
weeks ago. He only makes the suggestion.
Mr. ALDRICH. I quote from his exact words, translated with as
literal accuracy as it is possible to translate them. That is all I can
•say about it.
ALD




32

The Pro-silver Policy of the United States.

Mr. TELLER. I have a copy of it, and I am capable of translating
it, and I know he does not make the assertion. It is hypothetical; he
says possibly, very likely, or something to that effect, the Government
may take advantage of that.
Mr. ALDRICH. It does not make the slightest difference to my
argument in which form the statement was put. I am only suggesting
to the Senate the fact that if we should agree to purchase an unlimited
amount of silver bullion we should furnish a market for Germany if
she should be disposed to sell her stock.
Since the commencement of the debate upon this bill the long-ex­
pected demonetization of the silver stock of Roumania, formerly a mem­
ber of the Latin Union, has been made possible by the prospect of silver
legislation here. It is said that a syndicate has already bought a part
and taken an option on the rest of her silver. This is but a sample of
what might occur all over Europe.
The proposition made by the professed friends of silver interests
therefore amounts to this:
That the United States shall enable Europeans to exchange for gold
such portions of their thousand of millions of dollars in silver as we
could pay for before the final collapse in the gold price of silver should
come. And the collapse might come very soon, for the transfer of half
their silver to the United States, independently of what we should re­
ceive from other sources, would send our gold abroad and leave us
with a paper circulation and on a silver basis.
It is perhaps possible that silver inflation would take effect gradually.
At first the notes issued for the purchase of bullion would have an
equal purchasing power with gold, but as the issue became inflated
through the rapid inflow of silver, prices of commodities would be
artificially advanced and the value of the notes diminished until a note
representing 412} grains of silver coined into a dollar would have no
greater purchasing power than 412} grains of silver bullion. Gold
would sell at a premium or be driven from circulation, and from the
country. The silver dollar would become the standard of value, and
the people of the United States be once more forced to suffer from the
manifold evils of a depreciating and fluctuating currency.
AT.T>




Appeal to the Examples of India or of Mexico.

33

XI.
For the purpose of proving that silver would not flow to the United
States in the manner I have indicated, if the policy of unlimited pur­
chases should be adopted, Senators have cited the experience of India
and Mexico. It is true that the mints of both these countries are open
to the unlimited coinage of gold and silver at the nominal ratio, in
the case of the former of 15 to 1, and in the latter of 16 J to 1. And
these countries do undoubtedly furnish a striking example of what
would be likely to occur in the United States with unlim ited coinage
here; but the precedent is a very unfortunate one for th e cause of our
free-silver friends. Both India and Mexico are on a silver basis, and in
both countries gold is a commodity sold at its commercial price, and
in their business centers the currency, in so far as it is responsive to
the influence of foreign trade and investment, fluctuates in value from
day to day and from hour to hour with the London price of silver
bullion. While in British India both gold and silver can be taken to
the mint and coined without lim it upon payment of a seigniorage of 1
per cent, in case of gold and 2 per cent, in case of silver, yet the silver
rupee is the sole standard of value and the only legal- tender money. In
other words, while the legal ratio of India is 15 to 1, this “ ratio” is
merely a nominal one. It does not mean that 15 ounces of coined silver
can be exchanged in the markets of India for 1 ounce of coined gold.
I f such a thing were possible the silver of the world would undoubtedly
flow to India at a very rapid rate until her gold holdings were exhausted,
and that, of course, would soon take place. It actually takes as
many ounces of coined silver to exchange for an ounce of coined gold in
Calcutta or Bombay as it does in London. A hundred and eighty grains
of standard silver coined into the rupee has no greater purchasing power
in India, as against commodities or gold—saving the cost of mintage—
than the same number of grains in the form of silver bullion would
have. It can therefore readily be seen that there would be no margin
of profit in shipments of silver bullion to India beyond the current de­
mands of business with that country.
It is significant that Senators who are demanding the unlimited coin­
age of silver should find in India and Mexico the only exemplification




The Pro-silver Policy of the United States.

34

of the policy which they seek to impose upon the people of the United
States. As we are asked to adopt this policy ostensibly for the benefit
o f the farmers of the country and to relieve the m from the burdens of
indebtedness, it may be instructive for us to consider the conditions of
that class in a country which has for centuries enjoyed the blessings (?)
of the free coinage of silver. In a paper read before the British Insti­
tute of Bankers last month by an Indian banker, the following state­
ment is found:
A lm ost every ry o t (or farmer) has an account w ith a m oney-lender and a bal­
ance a gainst him self. T his account often runs t h r o u g h tw o or three generations
and is rarely paid o ff entirely. It usually origin ates in a sm all advance by th e
m oney-lender, w h o probably g iv e s him 70 or 80 rupees, ta k in g a bond for a hun­
dred bearing interest at th e rate o f
per cent, per m onth. T he ryot in return
m a k es paym en t in grain or other products o f th e soil, w h ic h are a lw a y s valu ed
a gain st him . After g o in g on in th is w a y for a num ber o f years, th e ryot finds
o u t th at alth ough he is contin ually p ayin g h e is o n ly g ettin g deeper into debt.
T hese rem arks are applicable to all India.

Mr. REAGAN. Mr. President----The PRESIDING OFFICER (Mr. C o c k r e l l in the chair). W ill
the Senator from Rhode Island yield to the Senator from Texas?
Mr. ALDRICH. Certainly.
Mr. REAGAN. I inquire if the Senator is aware that there has been
a steady accumulation of gold in India for certain years past?
Mr. ALDRICH. I will reach that subject in a very few moments.
Mr. REAGAN. I merely wanted----Mr. ALDRICH. If the Senator w ill be patient with me I shall ex­
plain that.
Mr. REAGAN. I wished to know if the Senator was aware of that
fact.
Mr. ALDRICH. Yes, sir.
The most doleful imaginings of the Senator from Missouri [Mr. V e s t ]
in regard to the condition of the farmers of the Northwest can not
equal this picture taken from actual life in India. When we consider
the condition of the people of India I do not think the people of the
United States, proud of their achievements and progress in civiliza­
tion, are likely to adopt that country or Mexico as a model.
Now I come to the point referred to by the Senator from Texas [Mr.
R e a g a n ] . The fact that the gold imports of India have been very
large during the free-coinage period, with a so-called ratio more favor­
able to silver than ours, is construed as evidence that that metal would
continue to flow to the United States in case free coinage was adopted
ALD




Supposed Experience of France.

35

here. It is difficult to treat such arguments seriously. What are the
facts?
The total net importations of gold into India for the fifty years suc­
ceeding 1835 amounted in value to 1,276,000,000 rupees. Of this sum,
however, but 2,000,000 rupees in value were coined during the entire
period. The balance was, therefore, hoarded, made into ornaments,
or used in the arts. On the other hand, the total net imports of silver
into India for the same period amounted to 2,638,000,000 rupees, and
the total silver coinage to 2,992,000,000 rupees. As the circulating
silver coinage of India is now estimated at 2,000,000,000 rupees, it
would appear that the people of that country have absorbed, for use in
ornament or as a hoard in fifty years 1,275,000,000 rupees’ worth of
gold bullion, and nearly 1,000,000,000 coined rupees of silver. It does
not appear that any portion of the large shipments of gold to this coun­
try has at any time been in use as a circulating medium.
It is hardly necessary to add that the monetary experience of Asiatic
countries is not likely to furnish precedents which should control our
action.

XII.
The only serious attempt to answer the argument that the United
States would not be able to maintain, unaided, the fixed ratio between
gold and silver is by reference to the fact that her law of 1803 enabled
France alone to maintain for seventy years the ratio of 15i to 1. This
statement, however, is fallacious. France was not alone in the proper
sense of the word. It is true between 1803 and 1865 there was no
formal combination of nations agreeing to a common ratio between gold
and silver. Yet it was a condition of substantial equilibrium in the
demand for gold and silver for monetary uses in other countries which
enabled France to effectively maintain the ratio established by her mint
law from 1803 to 1865.
In most other countries silver was the principal money and the legal unit
of coinage. The rouble, gulden, florin, thaler, piaster, and real, which
make the circle around France from the Baltic and the Adriatic to the
Bay of Biscay, were all silver. There was little gold in use. It was
substantially a trade coin, sometimes taken at schedule rates at the
Government offices, and sometimes in accordance with what may be
called the parallel standard. The English laws of 1816-’19 excluding
silver from full legal tender made no substantial change in the locaALD




The Pro-silver Policy of the United States.

36

tion of existing silver. When resumption was reached in England
and she redeemed her bank notes in gold this action tended to raise the
price of that metal. Gold became the principal money in London,
the great center of exchanges, while silver was used as money every­
where else. In her central position, with her great metallic stock,
France was thus enabled to control tendencies to fluctuation in the
value of either metal.
This state of affairs continued until the gold discoveries changed the
relative quantities of the metals in Europe, and, coincident with the
great abundance of gold, largely increased importations of merchandise
from Asia took place, and these were met by large shipments of silver
to the East. Changing conditions of supply were thus met by equal­
izing changes in demand, and France was still enabled to balance the
two metals at the ratio she had established. But France in 1873, not­
withstanding the assistance which she had from her associates in the
Latin Union, was obliged to confess her inability to longer maintain the
ratio of a century, and, coincidently with the sales of German silver,
closed her mints to private coinage. The example of France, therefore,
furnishes no precedent which should lead the United States to seek
alone to establish a tixed ratio between the two money metals.
New conditions have arisen, and a much stronger alliance would now
be necessary to restore and maintain an equilibrium in the relative
value between silver and gold. Silver is now an outlaw, or at best
simply tolerated in the entire cordon of states which early in the cent­
ury so successfully maintained her cause. The merchants of all the
great financial capitals of the world have now joined London in ac­
knowledging the supremacy of gold. The conditions of production,
supply,' and demand have been reversed, and no thoughtful friend of
silver believes that the United States could successfully maintain the
position which the states of the Latin Union felt obliged to abandon
many years ago.

XIII.
I have already alluded to the retirement of national-bank notes. It ap­
pears upon examination that during the four years ending March 31,
1890, an aggregatecontraction had taken place in the volume of nationalbank note circulation of $125,443,131, or an average annual reduction
of $31,360,783. In addition to this large reduction, $62,334,584 of lawful
money had, at the date named, been deposited in the Treasury of the
ALD




The Issue of Bank Notes and Certificates.

37

United States for the purpose of retiring an equal amount of outstand­
ing notes. This indicates, unless amendatory legislation is adopted, that
■within the next three years a further reduction of the bank-note issues
w ill take place amounting to at least $100,000,000, and the amount of
this portion of our money w ill be reduced to the legal minimum.
This important diminution in the volume of our currency, taking place
concurrently with a large increase in our population and the rapid ex­
pansion of the business of the country, has caused the present demand
for a revision of our monetary legislation. The action on the part of
the national banks in contracting their issues is the necessary result of
the appreciation of United States bonds to such an extent as to render
the retention of their circulation unprofitable. When the act was
passed extending the bank charters, it was believed that these associa­
tions would continue to furnish an element in our circulating medium
which would expand or contract with the changing demands of trade.
It soon became evident, however, that unless important changes were
made in the laws regulating the issue of this form of currency it was
doomed to extinction. The adverse fate of the respective measures
which have been introduced in one House of Congress or the other
within the past three or four years has disclosed the purpose on the
part of a controlling majority to facilitate and render certain this de­
struction.
By an examination of the tables which I append to these remarks
(marked Exhibit C and Exhibit D*),and which have been carefully pre­
pared by the Treasurer of the United States, at my request, showing the
amount and denominations of paper money of all kinds in circulation
in the United States at stated periods from the 30th of June, 1878, to
the present time, it will appear that while the shrinkage to which I
have alluded has taken place in the volume of national-bank notes that
an increase had taken place during the four years ending March 31,
1890, in other forms of paper money, amounting to $268,015,404, or a
net increase, after deducting the loss of national-bank notes, of $142,579,273.
Of this increase much the larger portion was owing to the fact that
during the period named the amount of silver certificates in circulation
was augmented $200,000,000, or an average annual expansion of $50,000,000. This unusual enlargement in the volume of the outstand­
* T he tables referred to m ay be seen in the printed proceedings o f Congress
for th e date m entioned.
AL D




38

The Pro-silver Policy of the United States.

ing silver certificates was $72,000,000 in excess of the current coinage
of standard silver dollars. This sum represents the amount of certifi­
cates which were issued on account of silver dollars coined prior to 1886
and at that time held in the Treasury uncovered by notes to the amount
of $96,000,000. This expansion of the issue of silver certificates for the
years following 1886 was made possible by the act of August 4, 1886.
which provided for the issue of silver certificates in denominations of
one, two, and five dollars. Since that time silver certificates of these
denominations, as w ill appear from an examination of the table I have
referred to, have taken the place of national-bank notes and legal-ten­
der notes of like denominations. It is evident from the comparatively
small amount of uncovered silver dollars now held in the Treasury that
in the future the issue of certificates for notes based on silver coin or
bullion can not exceed the current purchases of silver.
As I have already stated, the advocates of an issue of paper notes
based upon unlimited silver purchases base their arguments upon the
I
theory that we are suffering from an insufficient and contracting volume
of money. To prove the inadequacy of our currency, statements have
been submitted showing the per capita amount of money in circulation
at various periods in the United States in comparison with that in
France and other nations. I am not willing to admit that the relative
prosperity of nations can be ascertain ed by such an elementary proc­
ess as by a comparison of their per ca pita circulation. Differences
in methods of doing business, in habits of hoarding, in the use of
various forms of credit and of banking facilities, and many other
disparities in condition, affect the qu estion of the quantity of money
required by different nations or by the same people at different periods.
Statistics of the amount of money in circulation in any country must
necessarily be defective. An estimate submitted to the Monetary Con­
gress held in Paris last year gives the per capita circulation in the year
1889 of the leading nations as follows:
France, $41.12; Belgium, $28.23; Holland, $26.48; Great Britain,
$18.87; Germany, $17.44; Austria, $7.92.
This table, in my opinion, simply illustrates differences in the habits
of the people of the countries referred to. If the average of the circu­
lation of these states should be held to furnish a conclusive rule for
ALD




Amounts of Money in use Per Capita.

39

our guidance, the circulation of the United States ($25 per capita) must
be excessive.
I understood the Senator from Nevada [Mr. J o n e s ] in his speech
opening the discussion upon the pending bill to state that the amount
per capita of circulation in any country was not of itself of special
consequence, that is, whether it was $1 or $50, but that it was of vital
importance, the volume having once been properly established and
other conditions remaining unchanged, that it should not be permitted
to diminish, but rather that it should increase pari passu with the en­
larged demands arising from the growth of population and business.
I f we assume this theory to be correct, for the purpose of ascertaining
the relative sufficiency of the money of the United States, at various
periods, I submit a table (see Exhibit E*) prepared by the Treasurer,
showing the various kinds of paper money and coin in circulation at
stated times during the period from 1878 to the present time, and the
amount of per capita circulation, taking the estimate of population by
the Bureau of Statistics as a basis for computation. This table shows
a total per capita paper money of all kinds in circulation on June 30 of
each year, as follows:
In 1886, $13.57; 1887, $13.71; 1888, $13.92; 1889, $13.94; March 31,
1890, $14.42.
I f we exclude from this calculation gold certificates, which are not in
general circulation, we have the following result:
In 1886, $12.26; 1887, $12.21; 1888, $12.02; 1889, $12.10; March 31,
1890, $12.37.
In the preparation of this table and the one heretofore submitted, I
have taken the period commencing in 1878 for the comparison partly
because the data available since that time are much more reliable, and
partly owing to the fact that the money in circulation prior to that
time was largely composed of depreciated paper. A careful examina­
tion of these two statements discloses a remarkably constant relation
between population and volume of money in circulation in the United
States for the whole period. I f it should be admitted that this volume
was sufficient at any time to answer the demands of our people,
it is difficult to resist the conclusion that the amount must have been
at all other times very nearly sufficient for that purpose. The only
*T he table referred to m ay be seen in th e printed proceedings of C ongress
for th e date m entioned.
ALD




The Pro-silver Policy of the United States.

40

diminishing element, as I have already stated, has been the nationalbank notes.
Had there been no forced contraction in the volume of these notes we
should have had on the 31st of March last a per capita paper money, in­
cluding gold certificates and excluding the amount held by the Treas­
ury, of $16.33; excluding gold certificates $14.28; and an aggregate of
paper and coin, including standard silver dollars, of nearly $25 per cap­
ita, which latter sum is a much larger per capita amount than has been
in circulation in this country at any time within its history, not ex­
cepting the periods of greatest inflation during the war.
It has been repeatedly stated by Senators during this discussion that
the reports of the Treasury Department in regard to the amount of
money actually in circulation are incorrect and misleading, and that a
large proportion of the sums reported as in monetary use were withheld
from circulation, and largely by the national banks. In the tables which
I have submitted the amounts of all coin and notes held in the Treas­
ury are excluded from the calculation, and the stated amounts in cir­
culation represent the amount of money in actual use outside of the
Treasury. The portions of these respective sums held by national banks
at the various periods from 1870 to 1889 are shown by the following
table prepared by the Comptroller of the Currency:
Statement of the amounts of gold certificates, silver certificates, legal-tender
notes, and national-bank notes held by the national banks, as shown by
their reports of condition, at the dates named, for the years 1880 to 1889,
inclusive.
D ates.

Ju n e 11, 1880.....
J un e 30,1881.....
J u ly 1,1882........
Ju n e 22,1883....
J u n e 20,1884.....
J u ly 1,1885........
Ju n e 3.1886........
A ugust 1,1887...
J u n e 30,1888.....
J u ly 12,1889......

G old
N o. o f
rtifi­
banks. c ecates.
2,076
2,115
2.239
2,417
2,625
2,689
2,809
3,014
3,120
3.239

Silver
certifi­
cates.

Legalt e n d er
notes.

N ationalbank
notes.

Totals.

68,439,560
$495,400 $64,470,717 $21,908,193 $95,313,870
5,137,500
945,590 58,728,713 21,631,923 86,443,726
4,440,400
854,040 64,019.518 21,405,758 90,719,716
32,791,590 3,121,130 73,832,458 20,278,856 130,025,034
26,637,110 2,861,000 76,917,212 23,386,695 129,802,017
74,816,920 3,139,070 79,701,352 23,465,388 181,122,730
41,446,430 1,812,290 70,656,788 25,129,938 139,045,446
54,274,940 3,535,479 74,477,342 22,962,737 155,250,498
68,761,930 7,094,854 81,995,643 21,343,405 179,195,832
69,517,790 12,452,057 97,456,832 24,761,487 204,188,166

It should be borne in mind that the sums held for this purpose are
doing as effective service as money as if actually held in the pockets
of the people.
ALD




Character of Paper to be Issued.

41

It will be noticed that while the aggregate money circulation of the
United States increased from 1878 to 1890 to the extent of $618,000,000, the currency holdings of national banks have increased but $109,000,000. Treasury statements do not, of course, take into account the
amount of money destroyed from time to time by fire or other casual­
ties, but careful investigation has shown that the amount of currency
lost in this way is not considerable in amount and would not affect the
substantial accuracy of the statistical statements I have submitted.
I f we assume, in view of the continued retirement of the nationalbank notes, that the natural growth of the business of the country w ill
require an addition to our circulating medium equal to the average is­
sue of silver certificates during the past four years, say about $50,000,000 per annum, the problem which we have in hand is to decide the
character of the notes to be issued.
If, as I infer, the policy is to be maintained of restricting the money
of the United States to purely national issues, it is important that these
issues should be invested with all the attributes which universal ex­
perience has shown to be necessary for stability and security. It is
our duty to supply the country with a currency which is not only ad­
equate in volume but every portion of which can be maintained at an
equivalence in value with every other portion. If it is to be of paper,
. and this is evidently to be the money of the future, it should always
be exchangeable with and convertible into coin of full value, acknowl­
edged by the commercial world as money, and there should be no room
to doubt its ultimate security. With the tendency in modern times to
make the money metals the basis of circulating notes rather than the
actual medium of exchange in transactions and with the conditions
which surround modern business, I believe that coin certificates or Treas­
ury notes based upon deposits of bullion of equal value constitute an
ideal money.
From the nature of things it is impossible to secure a currency of per­
fectly stable purchasing power, but for obvious reasons every legitimate
means should be taken to lessen the extent and rapidity of fluctuations.
The dislocation of parity between the metals has interrupted the auto­
matic flow of silver from country to country to answer changing condi­
tions. While silver remains in its present abnormal condition the healthy
enlargement of our currency, upon which so much depends, should not
ALD




42

The Pro silver Policy of the United States.

be left to the accidental or speculative condition of the silver-bullion
market or to the varying output of silver mines, but should at all times
be kept under control by providing for additions to the volume o f our
money in definite amounts at stated periods.
I believe that all these requirements of a sound currency are fully
met in the issue provided for in the bill reported from the Committee
on Finance.




o