View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

THE

SILVER

BILL.

SPEECH
OF

HON. FRANK E. BELTZHOOVER,
O F

P E N N S Y L V A N I A ,

DELIVERED IN THE

HOUSE OF REPRESENTATIVES,
ON

WEDNESDAY, MARCH 23, 1892.

" T h e overwhelming: preponderance of the educated financial opinion of the
world inclines to the beliet that the proposed measure would simply result in
stripping us of our gold, in upsetting our exchanges with the great trading and
producing nations of the world, in bringing us down to the level of second rate
financial powers only, such as China, India, and South America, and in involving
our trade and production in all the inexpressible evils of a depreciated and fluctuating currency.*'—Gen. Francis A. WaIker.




WASHINGTON,

1892.




S P E E C H
or

HON. E R A N K E. B E L T Z H O O V E R .
The House having under consideration the bill (H, R. 4426) for the free
coinage of gold and silver, and f o r the issue of coin notes, and f o r other purposes-

Mr. B E L T Z H O O V E R said:
Mr. SPEAKER: There is nothing in which the people of the
world are so deeply interested and ofwhieh they know so little
as money. There is no subject on which the wisest have differed
so widely and, on both sides of the contention, been so madly
.wrong. There is no topic of discussion therefore on which all
men ought to temper their most confident views with so much
considerate regard for the opinions of those who differ from them.
THE HISTORY OF MONEY.

T h e word money is supposed to be derived from Moneta, a surname of Juno, in whose temple at Rome money was coined. In
the language of Aristotle, " Money exists not by nature, but by
law," as an invention of human society for its own convenience.
I t is not necessarily of any particular form or substance, but Consists of anything which jpasses freely in exchange for the various objects of human desire. I t is as important to all the operations of commerce as steamships, railways, and telegraphs, and
is the marvelous instrument to which the world is largely indebted for its progress and civilization.
In the earliest periods that lie along the dawn of history, when
the chase was the chief pursuit of men, skins were the money
and medium of exchange, as they are of the Alaskan Indians today. W h e n the pastoral age set in sheep and oxen took the
place of skins and became the money of commerce—ten sheep
being equal to one ox. In the Iliad, when Glaucus exchanged
his golden armor for that of Diomed, which was of brass, Homer
says he gave an hundred oxen's worth for that of nine, and,
therefore must have been " of judgment Jove bereft." The triod, the first prize for wrestlers in the twenty-third book of the

Eliad, was valued at twelve oxen, and a woman captive skilled in

industry at four. In that day, gold and silver and other metals
were well known and used, but the money and unit of value was
an ox. Pecunia, the Roman word for money, was derived directly
from pecus, a herd, and the old English word fee comes from the
same root.
From the Agamemnon of iEschylus we learn that the figure of
an ox was the sign first impressed upon coins and the same is
said to have been the case with the earliest issues of the Roman




3

4
as. T h e live stock thus used to facilitate exchanges being
counted by the head was called eapitale whence our term capital
and the law term chattel and the common name cattle. T h e
earliest record of values among the ancients is contained in
Genesis, in the brief inventory of the estate of Abraham, when
he returned from E g y p t " very rich in cattle, in silver, and in
gold," which were regarded as money in the order in which they
were named. There were no coins then, but all metallic money
was estimated by weight, so that when Abraham bought the
field in Macpelah he " w e i g h e d unto Ephron the silver, which he
had named in the audience of the sons of Heth, four hundred
shekels of silver current money with the merchant." A shekel
was worth about half a dollar, so that this famous field cost about
$200. In Job we are told that " wisdom can not be gotten for
gold, neither shall silver be weighed for the price thereof."
T h e Roman unit or standard of money value was the libra, which
was a pound of copper or brass, and was shaped at first like a
brick, but was subsequently made round.' T h e whole Roman
coinage was of copper down to two hundred and sixty-nine years
before the Christian era, when they began the coinage of silver,
and half a century later that of gold.
T h e Chinese used copper largely in their early general coinage, but also employed cubes of gold as their most valuable
money. T h e Greeks coined copper, silver, and gold in the various stages of their history. T h e very earliest of their coins consisted of silver spikes, and an obolus or spike was the unit. A
handful or drachm of these spikes was the next higher measure of
value, but as there were some men in those days with very large
hands, it became necessary to limit the handful to 6 spikes, which
thereafter became the legal drachm. T h e Carthagenians made
money out of leather, and Nurna, K i n g of Rome* made it out of
wood. In the thirteenth century, Kublai Kahn, the greatest of
all the Mogul kings, made the currency of his Kingdom out of
the bark of the mulberry tree, and during his reign of thirty
years issued to his subjects more than $600,000,000 of this bark
money. I t was stamped with the mark of the sovereign, and it
was death to counterfeit or refuse to take it anywhere in the
Empire. T h e Spartans used iron for money, and Dionysius, the
tyrant of Syracuse, made it out of tin. In innumerable cabinets may be found tin coins issued by the Roman Emperors.
T h e K i n g s of England also coined tin, and in 1680 Charles I I had
struck tin farthings with a copper stud in the center to prevent
counterfeiting. Tin halfpence and farthings were also issued in
considerable quantities in the reign of William and Mary. Russia for a number of years coined platinum. In 1618 the governor
of V i r g i n i a ordered that tobacco should be received as money,
at the rate of three shillings per pound; and we are told that
when the V i r g i n i a company imported young women as wives for
the settlers, the price per head was 150 pounds of tobacco. A s
late as 1732 the Legislature of Maryland made tobacco and Indian corn legal tenders, and in 1641 Massachusetts made similar
laws concerning corn. In Burmah the unit of value is lead; in
the South Sea Islands, an ax; in India, cakes of tea; in Abyssinia,
salt; and in Iceland, codfish. In 1694 straw money circulated in
the Portuguese possessions in Angola,which consisted of small
mats, called libongos, woven out of rice straw, and worth about 3
cents each.
BEL




5
THE EVOLUTION OF GOLD,

T h e history of money shows a plain and unmistakable evolution from the ancient commodities of barter down through skins,
sheep, and oxen as money to tin, iron, copper, silver, and gold.
This evolution has kept step with the march Of civilization, and
its inevitable and inexorable trend is to the ultimate and exclusive use of gold, which is the most valuable, the most compact,
the most enduring, and the most convenient of all the products
of nature. T h e hunter age, the pastoral age, the military acp,
and the mediaeval age have dawned into the great commercial
age, in which there can only be in money, as in all other things,
the survival of the fittest. In his exhaustive report on the establishment of a mint, Mr. Hamilton, in 1791, set the pace for this
consummation in this country when, among other things, he
says:
As long as gold, either from its intrinsic superiority as a metal, from its
greater rarity, or from the prejudices of mankind, retains so considerable
a preeminence in value over silver as it has heretofore had, a natural consequence of this seems to be that its condition will be more stationary. The
revolutions therefore w&ieh. may take place in the relative values of gold and
silver will be changes in the state of the latter rather than of the former.

T h e struggle for the supremacy of gold may be the great civic
battle of the century; but there can be no doubt about the result.
T h e opposing armies may be inspired equally by selfishness or
worse; but the motives that actuate the contestants can not
change the vital, progressive principle involved. T h e large
creditor class, who have money to lend, are interested in making
it valuable and limited in amount, because it promotes their fortunes. The still larger debtor class, who must borrow, believe
they will unload their burdens easier by making money out of
anything and in unlimited quantities. T h e vast proportion of
those who are now shouting for free coinage of silver w i t h all
the fervor of patriotism, were just as enthusiastic for the unlimited issue of greenbacks. W h a t they manifestly want is something to shut their creditors' mouths,whether it is paper or silver.
THE CLIPPING OF COINS,

This is no new thing under the sun. In every age of the world
those whose debts embarrassed them, from kings down to peasants, have striven by every means in their power to clip and
cheapen the money of their country so as to make it as plenty as
possible. T h e Greeks did* it under Solon and later when the
strain of the P e l o ponnesian war was upon them. T h e Romans
began i t early in their career and continued it on down to the
expiring days of the empire. T h e as was at first equal in weight
to a Roman pound, but it was rapidly lessened so that at the
epoch of the first Punic war it did not exceed 2 ounces, and by
the time of the second Punic war it had sunk to 1 ounce. Augustus fixed t^e aureus, the unit of gold coin, at forty to the pound.
Nero reduced it to forty-five. Trajan still further debased it
until under Seyerus it was more than half alloy. Caraealla introduced a new silver coin called the argenteus as a unit and
fixed its value at sixty to the pound. T h i s also was alloyed from
time to time until under Gallienus it contained no silver at all.
In this state of the money of the empire in the reign of Heliogabalus all the taxes were required to be paid in gold, while the
government paid out nothing but this depreciated silver, w h i c h
had to be used by the taxpayers to buy gold.
BEL




6
T h e English followed the example in almost every period of
their history, for in. the year 1066 a pound of silver made 20 shillings, while in 1600 it made 62, and since then i t has been still
further stretched until now it makes 66.
From the standard pound of silver the following number of shillings and pence were coined at successive periods:
From the Conquest, 1066 to 1300, 20s.; from 1300 to 1349, 20s. 3
d.\ from 1349 to 1356, 22s. M.; from 1356 to 1421, 25s.; from 1421
to 1464, 30s.; from 1464 to 1527, 37s. 6d.; from 1527 to 1530, 40s.;
from 1530 to 1543, 45s.; from 1543 to 1549,48s.; from 1549to 1551,
72s.; from 1551 to 1600, 60s.; from 1600 to 1717, 62s.; from 1717 to
1792,66s.
From this we see that the amount of money coined from a standard pound of silver was at every change increased, until 66s. was
coined in 1792 from the identical standard nound that made 20s.
in 3066.
T h e history of gold coinage is the same. T h e coinage from
the standard pound of gold 23 carats 3£ grains fine, which was at
times reduced to 22 carats, of £13 3s. 43., continued to increase
until at the beginning of the present century £46 14s. was coined
from the same pound, as will bo seen from the following:
From 1344 to 1349, £13 3s. 4cZ.; from 1349 to 1356, £14; from
1356 to 1421, £15; from 1421 to 1464, £16 13s. 4c7.; from 1464 to
1465, £20,16s. Set; from 1465 to 1527, £22 10s.; from 1527 to 1530,
£24; from 1530 to 1543, £27, £25; from 1543 to 1546, £28 16s.; from
1546 to 1549, £30; from 1549 to 1552, £34; from 1552 to 1604, £36;
from 1604 to 1626, £37 4s.; from 1626 to 1666, £41; from 1666 to
1717, £44 10s.; from 1717 to 1800, £46 14s.
There is a natural tendency among ail people to depreciate the
currency. T h e y always try to g e t the best of everything which
they are going to keep and use, but money is made to go and they
want it, not to keep as a rule, but to pass off on their neighbors,
and the cheapest and worst money they can compel their neighbors to accept, the greater the profit to themselves.
T h e effort in behalf of the unlimited coinage of cheap silver
dollars in this country is only a continuation of the same enduring contest. It is not a whit more honest in the people who advocate i t than it was in the Roman Emperors and English Kings.
If cheap money is the best, then the cheaper it is the better, and
while a 70-cents silver dollar on this principle is better than a
100-cents gold one, a paper dollar that costs practically nothing
is for the same reason better than asUver one, and Kublai Khan's
mulberry money was, on the same principle, better than either.
T h e idea that clipping the coins and cheapening the currency
of a country can help the people is founded on an utter fallacy
as to what money is and what are its functions. T h e error probably arises largely from the general belief among the masses
that gold and silver alone constitute money, while money in fact
includes everything that does the work of money, coin, bank
notes, checks, drafts, bills of exchange, etc.
THE UNIT OF VALUE.

In illustration of this theory there are a t least two hundred
thousand millions of dollars' worth of commodities that change
hands in the world's Commerce every year. In the transfer of
this enormous ag*gregato of values, less than 1 per cent is paid
in coin, less than 5 per cent in bank notes, and more than 95 per
BEL




7
cent in checks, drafts, etc. The overwhelming preponderence
of the world's useful money is not, therefore, gold or silver. W h a t ,
then, is the proper function of gold and silver in the monetary
world? Incontestably to fix the standard and unit of value.
The absolute weight or magnitude of the unit of money is a matter of little or no importance, provided that all people agree upon the same unit,
and that it "be permanently and exactly defined and afterwards adhered to.—
Jevons.

In every age and nation there has always been something,
some chattel or some one of the coins, that was the measure of
all the rest as well as of all values in their commerce and business. W h e n Homer wanted to tell posterity of the foolish trade
of Glaucus in exchanging golden armor for brass, he estimated
it, as all his countrymen did, by the ox. In the same way the
gold dollar is that which measures the two hundred thousand
millions of the world's commerce, although it does not actually
enter otherwise into more than 1 per cent of i t .
W h a t are the essential characteristics of standards and measures? Of bushels and pecks, of pounds and ounces, of yards-and
feet, of all kinds of measures? Uniformity, certainty, durability, convenience. The whole business world would be thrown
into chaotic confusion if a bushel sometimes contained 4 pecks
and sometimes 3; if a pound sometimes weighed 12 ounces and
sometimes 11; if a yard was sometimes 3 and sometimes only 2
feet in length and if all were equally lawful.
B u t the measures of quantity, weight, and distance do not
differ in these respects from the measures of value. If there is
any difference the measures of value dominate all other measures in importance, and must, of an inexorable necessity, have
all.these qualities of certainty, uniformity, durability, etc., and
must have them all in the highest attainable degree.
In a note to his edition of Adam Smith's " W e a l t h of Nations"
(page 502), Mr. J. R . McCulloch says:
Money is not a mere commodity, it is also the standard or the measure by
which to estimate and compare the value of everything else that is bought
and sold, and if it be, as it undoubtedly is, the duty of Government to
adopt every practical means for rendering all foot-rules of the same length,
and all bushels of the same capacity, it is still more incumbent upon it to
omit nothing that may serve to render money, or the measure of value—a
measure which is undoubtedly of the greatest importance—uniform or steady
in its value.

Skins and sheep hnd oxen gave way, as money, to tin and iron
and copper, and these in their turn to silver and gold, because
these precious metals met all the requirements of the money
unit and measure of value better than anything that had preceded them.
Must the progress of the world stop and stand still on this subject while it goes forward with the stride of a giant in everything else? Must the inflexible law, which decrees the survival
of the fittest in all things, and which has thus far solved the
problem of the measure of value satisfactorily, cease henceforth
to operate?
T h e farmers of tho country would greet with indignant derision the demagogue who would propose two standards of the bushel
measure, one of which would contain four pecks and the other
three, i h e proposition, however, would not be more unreasonable and absurd than to have two standard dollars current in our
business to-day, one of which is worth one hundred cents and the
other only seventy.
BEL




8
THERE CAN BE ONLY ONE UNIT.

There cannot, consistently and honestly, be two such standards.
T h e universal testimony of the experience, intelligence and common sense of mankind has shown that the attempt to establish
and maintain two such hostile umpires must lead to a war of extermination, in w h i c h one must g o down. Robert Morris, the
great financier of the Revolution, advocated the use of silver
alone, because as he said, gold and silver could not be used as a
standard on account of the variation of the ratio between the
two metals. In all civilized countries the genius and industry
of statesmen and scholars have been exhausted in years of futile
efforts to establish the equality of gold and silver in the currency
of the world. In all the discussions in Congress and elsewhere
in this country, from the report of Mr. Hamilton, to which we
have referred, and in which he hoped to succeed in the attempt,
down to this time, the great object has been to obtain the equality of these metals, but all the most earnest and laborious and
persistent efforts have signally failed. From the first coinage
act, in 1792, down to 1834, the nation was upon a silver basis, because the ratio fixed by law subordinated gold. In 1834 there
was another desperate effort made by legislation to correct the
inequality, but it only succeeded in putting us on a gold basis,
because the ratio established subordinated silver.
In 1831 Mr. Campbell P . W h i t e made the following sound
statement:

There are inherent and incurable defects in the system which regulates
the standard of value in both gold and silver. Its instability as a measure
of contracts and mutability as the practical currency of a nation, are serious
imperfections; whilst the Impossibility of maintaining both metals in concurrent, simultaneous, or promiscuous circulation appears to be clearly ascertained.

In a report made the following year he writes:
The committee can not ascertain that both metals have ever circulated
simultaneously, concurrently, and indiscriminately In any country where
there are ,>auks or money dealers, and they entertain the conviction that the
nearest approach to an invariable standard is its establishment in one metal,
which metal shall compose exclusively the currency for large payments.

T h e first experiment of the United States with the free and
unlimited coinage of gold and silver closed in 1834. In that year,
what is known as the act of 1834, changing the ratio, was enacted. In a speech, delivered on the floor of the Senate in 1834,
Thomas H . Benton said:
The false valuation put upon gold has rendered the Mint of the United
States, so far as the gold coinage is concerned, a most ridiculous and absurd
institution. It has coined, and that at a large expense to the United States,
2,262,177 pieces of gold, worth 811,852.890, and where are the pieces now? Not
one of them to be seen, all sold,^nd exported, and so regular is the operation
that the Director of the Mint, in his latest report to Congress says that the
new-coined gold frequently remains in the Mint uncalled for, though ready
for delivery, until the day arrives for a packet to sail to Europe. He calculates that two millions of native gold will be coined annually hereafter, the
whole of which, without a reform of the gold standard, will be conducted
like exiles from the national Mint to the seashore and transported to foreign
regions.

In another part of the same speech he says that he must bring
out certain facts—
To enable the friends of gold to go to work at the right place to effect the
recovery of that precious metal which their fathers once possessed, which
the subjects of European kings now possess. Which the citizens of the young
republics to the South all possess, which even the free negroes of San Domingo possess, but which the yeomanry of this America have been deprived
of for more than twenty years, and will be deprived of forever, unless they
discover the cause of the evil, and apply the remedy to its root.

Far.




9
I t is rather amusing-, in the face of the present cry for the " silver dollar of the daddies," to listen to thife cry of 1834 for the gold
dollar of their daddies.
T h e coinage act of June, 1834, fixed the legal ratio of gold to
silver as 1:16. T h e commercial ratio was nearly 1:15|. B y the
act of 1792 silver was overvalued. B y the act of 3834 gold was
overvalued. T h e framers of the act of 1792 thought that they
were bimetallists, but they were, in fact, silver monometallists.
T h e framers of the aet of 1834 thought that they were bimetallists, but they were, in fact, gold monometallists.
T h e learned gentlemen who are supporting the measure now
under consideration, for the purpose of securing the parity of
gold and silver in the commerce of the country and the success
of bimetallism, would become the most complete silver monometallists if their views should ever be enacted into law.
. T h e report of the minority of the Coinage Committee of the
House on the free-coinage bill of 1891 and the report of the majority of the same committee in'1892 put the whole issue in a single sentence when they say: u T h e whole theory of bimetallism
is, that it links the two metals together, and holds them there."
B u t this is absolutely untrue in fact, for all the efforts of the bimetallists by legislation and otherwise, for more than a century,
have not held the two metals together. T h e exact ratio between
gold and silver can not be maintained by legislation, unless you
change the coinage laws every twenty-four hours. T h e race between gold and silver has been from the earliest period a progessive triumph for gold. A t the dawn of the Christian era it stood
as 1 to 9. In 1500 it was 1 to 11. In 1700 S i r Isaac Newton, who
thoroughly examined the question, reported to the English
Government that " b y the course of trade and exchange between
nation and nation in all Europe fine gold is to fine silver 1 to 15."
In 1892 it is about 1 to 23,
T h e relative values of gold and silver have, therefore, varied
in every age, and vary now, and will continue to do so until the
commerce and progress and wealth of the world, paralyzed bysome mysterious power, shall stand still like the marvelous petrifications of the ancient Ishmonie.
It is an idle and delusive dream, or worse, to hope to establish
a certain, unvarying and inflexible standard by linking together
gold and silver. T h e laws of nature and trade and common sense
are against it. T h e constant irritation of these efforts arid failures destroys the security and stability of the business world.
W h y not then patriotically settle the question once and forever
in conformity with the great preponderance of the opinions of
intelligent business people who have studied the subject in our
day, and in obedience to the uniform teachings of the past? A l l
these are in favor of gold.
(a) It is the most concentrated, the most certain, the most uniform, the most durable, the most convenient, and the most universally acceptable form of intrinsic value in the world.
(b) It is the sole measure of value in those markets of the world
where the great bulk of our surplus wheat, corn, pork, and cotton are sold, and it therefore not only pays for them, but also fixes
the prices of our enormous product of the same staples retained
at home. I t is a bold robbery of the farmers of this country to
value their products on a gold basis and make them take depreciated silver in payment.
BEL




10
W i t h gold as the unit of value, silver may be freely coined and
kept substantially on a parity with gold, under a statute which
shall provide that a dollar's worth of silver shall g o into every
dollar so coined, and whenever a disparity above a certain per
cent occurs, free coinage shall be suspended until a new adjustment of the ratio is made. W e should do everything in our
power to promote the usefulness and value of silver as one of our
principal products, but the demand that the Government shall
by its stamp and fiat declare that 70 cents are 100 cents embodies
sufficient heresy to defeat what m i g h t otherwise be just requests
of the free silver advocate.
WHO WILL SUFFER?

The pending bill is for this reason an assault on the business
stability and prosperity of the country, and its enactment into
law would unsettle all values, wreck all commercial calculations,
and sow a more disastrous crop of discord and distrust in the business world than ever grew from the fabled teeth of dragons. I t
would stop the flow of the millions of capital to this country from
Europe, w h i c h for the last twenty years have been seeking investment here in railroads, mills, mines, furnaces, ranches, breweries,
and hundreds of other enterprises which tend to swell the currency and expand the industries of the nation. It will drive
abroad the other millions of conservative capital which is in our
savings banks, and among our people and which otherwise seeks
employment here. T h e great creditor class which the free-coinage advocates are so anxious to mulct into a loss of one-fourth of
their property, consists largely of wage-earners, widows, orphans,
trustees, and the humble masses of our population.
T h e thousands of investors in building associations, life insurance policies, and other rewards of frugality and industry would
suffer to a great extent. Pensioners would find their allowances
docked by 20 to 30 percent; the laborers to whom, throughout our
country, $100,000,000in arrears of wages are always due, would suffer a dead loss in equal proportions; their employers would be able
moreover to hold them to the same nominal figures on their rolls
long after those figures had lost a quarter of their real significance; and the injury that must be suffered by these classes
would transcend, a hundredfold, all that could be visited on the
richer creditors. Can any Democrat, glorying in his party's
mission, as a friend of the common people, contemplate such an
act without shame?
These will be the ones to suffer from the clipping of our coins
and the depreciation of our currency, and not the bloated bondholders and money magnates, who will all get from under in
time to avoid the storm. T h e capital of the world, which is
justly timid and cautious, will shrink from all the channels of
trade and business everywhere before the menace to their interests by this bill.
W h e t h e r silver was fraudulently demonetized by the act of 1873
or whether that law only crystallized the inexorable logio of
events is wholly immaterial in this discussion. W h a t e v e r baneful consequences, if any, may have ensued from silver demonetization, are long since irrevocable and irremediable. T h e patience,
industry and energy of almost a score of years have brought us
out again into the open seaof business, confidence and prosperity.
W e were ground for years between the millstones of inflation and
BED—-2




11
contraction when, like the unfortunate victims in Mohammed's
hell, we passed from the lurid heat and glare of war times to the
frigid times of peace, and none should want to repeat that experience. W e have more money now than we had in the most prosperous days, for while our population has only increased twofold
since 1860, our money has increased fourfold.
T h e existing legislation, with amendments which can readily be
devised, will give us a large, steady, and expanding currency.
T h i s increase is sure to keep pace with our growth in population and property, and this is all intelligent and honest people
should ask, and all that prudent policy could provide. T h e
safest rule of human conduct is to let well enough alone, and the
status in quo, if reasonably satisfactory, is always wiser and better
than wild experiment.
HONEST DOLLARS OF SILVER.

B u t if free silver coinage must come, and if we are bound to
float all the immeasurable stock and product of the world, why
not demand that one hundred cents' worth of the metal shall be
required per dollar, and thereby give us a respectable dollar of
the daddies, which can stand on its own legs, and be the equal
in dignity and power with the gold dollar? W h y should this
great Government, like the barbarous kings of the olden time,
clip 30 per cent from everjr silver dollar which it issues and cover
this penalty for their existence into the Treasury as a sort of
conscience fund? W h y not give the people a dollar's worth of
silver for a dollar? W h y not emancipate our poor cropped silver
coins, so that they can go abroad like their golden brothers and
enter the commerce of the world?
T h e people are r i g h t in their demand for an abundance of
money for all the legitimate demands of trade and that thero
shall be a steady increase in the volume of the currency in exact
ratio with the growth of the country. W i t h this demand, however, should be inexorably linked the requirement that all our
money should always be equal to the best, so that there can be
no discrimination between classes, the h i g h and the low, the
rich and the poor. T h e Government should see that in the
matter of money the dollar which the laborer gets for his toil
should be equal in all respects to that which the millionaire gets
for his dividends.
THE POWER TO REGULATE.

T h e power of the Government on this subject is a h i g h and
equitable one, and consists beyond all doubt solely in the r i g h t to
regulate the value of all coins which it issues. T o regulate means
to adjust by rule, and it is a gross absurdity to talk of establishing
by rule that 70 cents worth of silver shall be worth 100 cents of
gold. This is exactly what is contended for, however, by the most
distinguished of the advocates of free coinage in this country
when ho declares that, " it is the legal-tender function that constitutes money." This is not true in law or in fact under our
Constitution. T h e Government by its fiat can make a worthless
piece of paper, or 70 cents worth of silver, a legal-tender for the
payment of a dollar, but it does not thereby make it a dollar in
the sense on w h i c h the whole commercial world understands it.
I t is a mere arbitrary exercise of power in defiance of reason and
justice and the public welfare. It is not such a regulation of the
value of the coins of the country as was contemplated by the
founders of the Government.
SEX.




12
T h e power of the Government back of its fiat can make its citizens take these alleged dollars just as Kublai K h a n compelled
his submissive subjects to accept his chips of mulberry bark.
T h e whole operation is based on the same principles and made
effective in the same way, but when the old arbitrary Mogul king
closed his eyes his bark money went up in smoke and his people
were rid of it, but behind the stamp and guaranty on these short
dollars stands the solemn pledge of honor of the nation for their
redemption in gold dollars or their equivalent. These dollars
do not pass by any intrinsic merit in themselves or by virtue of
the fiat of the Republic, but because of the sacred promise that
the sovereign people, out of their pockets and property, will see
that they are each made worth one hundred cents.
WILL SILVER GO TO 16?

This promise is a mortgage as irrefragable as the national debt
itself upon every dollar of wealth and capital in the nation. T h e
promoters of this measure tell us, however, that upon its passage
silver will rise to par with gold; but we have seen the utter futility of such promises,which were made the bases of the acts of
1878 and 1890. W h e n the act of 1878 was passed silver was under
18; when the act of 1890 was passed it had risen to 22, and now,
with both acts, under which almost all the silver in the country
is absorbed, we have the ratio over 23. W h y should silver increase in price?
T h e silver output of this country is growing steadily greater—
it was more than $70,000,000 last year—and it is realized that the
argentiferous regions of the W e s t have but begun to be drawn
upon. Bonanzas of fabulous treasure remain y e t to be discovered,
of which a mere suggestion is afforded by the recent finds of gigantic ore masses at Creede and Aspen. One of these, called the
"Molly Gibson Mine," has yielded rock worth $12,000 a ton. A
single carload produced $75,000. Silver composed one-half of the
mass, mixed with arsenic and antimony, a rare combination.
W o r k i n g in this kind of stuff is almost like digging for wealth
in the vaults of the Treasury at Washington. A pocket in the
" P a r k Regent," at Aspen, as big as a good-sized room, struck nine
week ago, held $100,000.
T h e European nations saw many years ago that silver must depreciate, and therefore they began to demonetize it as far back
as 1869, and fully completed it in 1873. There i s not a nation of
Europe to-day who coins silver for legal tender, and even in the
countries which have nominally a silver standard they coin no
new silver and are very anxious to dispose of what they have.
T h e trade of the commercial world is carried on on a gold basis
everywhere. T h e bushel of wheat which we export to England governs the price of every bushel consumed at home, and so
through all the list, and hence these European and other nations,
who are practical, try all in their power to get to a gold basis,
and for that reason they dispose of all the silver they can as fast
as possible.
T h e report of the Director of the Mint shows that the world's
coinage of silver during the year 1888 was $149,000,000, and that
Europe coined less than $14,000,000 of that amount. T h e balance
was coined by such nations as India, some $51,000,000; the United
States, some $31,000,000; Mexico, some $27,000,000; Japan, $10,000,000, etc., indicating plainly that Europe has got through with
BEL




13
silver as money. The question of a double standard was brought
up in the Reichstag at Berlin some time ago, but it was promptly
squelched. Since the demonetization of silver by these nations,
and since we have passed the acts of 18T8 and 1890, our Government has bought about $500,000,000 of silver, and y e t i t has depreciated in the world's market as metal 30 per cent, and were
i t not for the continuous agitation, and the hope that it will become money again in our country, and by the continuous boosting and booming it gets from our silver producers and speculators, it would to-day be worth below 80 cents an ounce.
T h e whole effort for free coinage is a bold and dangerous experiment, in defiance of the judgment and practice of the civilized countries of the world. T h e marvelous resources of the Republic have withstood without disaster thus far the strain of
carrying by mere force our own entire silver stock and product,
but who can predict the peril of loading the thirty-five hundred
millions of silver unwillingly held by other nations that may be
dumped upon us?
T h e bill, according to the statement of its distinguished author, who laughs at all predictions of danger, will only add 30
cents per capita to the circulating medium of the country, and
the leaders of the Farmers' Alliance, among those who ought to
know, declare that this will afford no relief to the people. If its
results do not go beyond this and do not afford the relief its promoters hope for, then it is clear the uncertainty and doubt it will
cause in all the channels of business will far outweigh its usefulness. If it should flood the country with all the surplus silver
of the world, and stimulate its production enormously here and
elsewhere, and drive out our gold and unsettle the foundations
of our national credit, the measure would be the monumental
blunder of our history, beside which the demonetization of silver
would sink into insignificance.
A MISCARRIAGE IN STATESMANSHIP.

T h e consideration of this measure at this time is a miscarriage
in statesmanship, which, if it results disastrously to the great
party which will be held responsible for it, will be reluctantly
forgiven. W h i l e we are figuring and scheming to make 70 cents
of silver into a dollar we are losing sight of a great crying issue
on which all the people of the nation are awake and informed
and ready for action, and through the neglect of which we are
losing millions. W e have more of everything to turn into money
in the markets of the world, more raw materials, more railroads,
more seacoasts, more harbors, more genius, and more enterprise than any other people on the earth, but we do nothing
toward getting the benefit of these great advantages.
W e ought to produce and export $1,000,000,000 worth of manufactured articles every year, instead of only a little over onetenth of that amount. W e manufacture for only 65,000,000 of
people and leave to a few nations the great field of supply for
1,400,000,000 of population outside of us. T h e result is that we
do not even pay for all the manufactured products which we must
have from foreign countries with our manufactures, but we pay
the balance with the products of our farms, were we raise wheat
in competition with the half-starved Indians, and Russians, and
the barbarous Hungarians.
Our farmers have behind them ages of inherited development
BEL




14
and intelligence, y e t they are p u t by our laws on a level w i t h
these barbarians in t h e g r e a t struggle of existence, instead of
being in the workshops and becoming inventors and skilled laborers and producers of those things w h i c h are far beyond the capaci t y of these downtrodden people w h o have been slaves for centuries.
W e squeeze the last dollar out of our consumers and pay debts
by t h e exactions w h i c h are not due for twenty years, and pay on
top of this twenty millions of premiums for the p r i v i l e g e of payi n g in advance. T h i s is a form of contraction w h i c h free silver
people do not r e g a r d . T h e y abuse t h e national bank3 for contracting the currency, but never t h i n k of our p a y i n g $75,000,000
a y e a r on a national debt w h i c h had not matured. T h e y declare
t h a t more people on e a r t h use silver than gold, but t h e y n e v e r
tell t h e i r followers that the 350,000,000 of people who use g o l d
had an e x p o r t and import trade last y e a r of $12,000,000,000, w h i l e
t h e 382,000,000 of people w h o use silver had only a similar trade
of $225,000,000.
T h i s is a g r o a t national question, w h i c h involves all the essential economical interests of t h e country, and its proper solution
demands intelligent, honest, manly discussion and consideration,
but this is not the proper time for its agitation and decision. I t
o u g h t not to have been permitted to oust or e v e n interfere w i t h
a g r e a t e r and more imperious c r y for reform in legislation w h i c h
is robbing our people and p a r a l y z i n g our industries and progress.
W e h a v e money enough, and its quality is good enough f o r
all our present wants. W h a t we should demand is t h a t our people shall be permitted to k e e p i t i n t h e i r pockets and use i t in
t h e i r business without unjust restraint or the onerous exactions
of the t a x g a t h e r e r . W h a t we should insist upon at e v e r y s t a g e
of the proceedings from the b e g i n n i n g of this Congress to its
close is t h e liberty to buy w h e r e we can do so cheapest and
thereby save our money, and sell w h e r e we can g e t the highest,
prices and t h e r e b y add to our accumulations the just rewards of
enterprise and t h r i f t and industry.
Increase our trade relations w i t h the world by s t r i k i n g down
t h e infamous tariff laws; w i p e t h e stupid shipping statutes f r o m
t h e books; place commercial agents in e v e r y city and port in t h e
world, and l e t us assume our r i g h t f u l station among the nations
of the e a r t h in commerce and manufactures, and our money matters will settle themselves without f u r t h e r t i n k e r i n g .
A.
Amount of gold and silver money in the world.
Countries.
United States,....
England
France
Germany
Belgium....
Italy.
Switzerland
Greece
Spain....
J..,
Portugal
.....
Austria-Hungary.




Gold.
$708,000,000
550,000,000
900,000,000
500,000,000
65,000,000
140,000,000
15,000,000

2,000,000

100,000,000
c40,000,000
40,000,000

Silver.
$482, o n , 346
100,000,000
700,000,000
205,000,000
55,000,000
60,000,000
15,000,000
4,000,000
125,000,000

10,000,000

90,000,000

15
Amount of gold and silver moner in the world—Continued.
Countries.

Gold.

Netherlands
Scandinavian Union
Russia
Turkey..
Australia

Egypt

Silver-

25, 000,000
32, 000,000
190, 000,000
50, 000,000
100, 000,000
100, 000,000
fv000,000

-

Mexico
Central American StatesSouth America
Japan
India
China..
The Straits
Canada
Cuba, Hayti, etc
,

65,000,000
10,000,000

60,000,000

45,000,000
7,000,000
15,000,000
50,000,000
500,000
25,000,000
50,000,000
900,000,000
700,000,000
100,000,000
5,000,000

45, 000,000
90, 000,000
16, 000,000
20, 000,000

Total

3,733,000,000

2,000,000

3,880,891,346

B.
Money in circulation in the United States January lf 1891.
Gold c o i n , .
$411,060,597
Standard silver dollars
67,547,023
Subsidiary silver
58,651,154
Gold certificates
144,047,279
Silver certificates
308,289,463
Treasury notes, act July 14,1890
21,896,783
United States notes
343,485,385
National-bank notes
173,938,259
Total
Net increase

1,528,935,943
24,199,340

C.
Money in circulation in the United Slates, March l, 1893.
General
stock, coined or issued.

In Treasury.

$606,661,364 1198,847,863
Gold c o i n . . .
Standard silver dollars .. 412,184,740 352,920,220
77,096,549
14,787,832
Subsidiary silver
178,151,419
18,150,140
Gold certificates
328,421,343
3,280,157
Silver c e r t i f i c a t e s —
Treasury notes, act July
85,236,212
9,517,659
14, 1890
346,681,016
34,549,328
United St&teB notes
Currency certificates, act
29,440,000
90,000
June 8,1872
172,621,875
National* bank notes
4,792,427
Total

2,236,494,518

A m o unt in Amount In
circula tion circulation
March 1,
March 1,
1892.
1891.
1407,813,501
59,264,520
62,308,717
160,001,279
325,141,186
75,718,553
322,131,688
29,350,000
-167,829,448

$408,752,874
63,560,553
57,345,638
147,119,129
303,822,259
28,871,279
| 340,274,851
168,692,736

626,935,626 1,609,558,892 1,518,439.319

Population of the United States March 1,1892, estimated at
65,049,000; circulation per capita, $24.74.
Amount of money in circulation in the United States from i860 to 1892.
Year.

1885




Amount.
$435,000,000
723,000,000
1,292,000,000
1,609,558,882

Per
capita.
813.85
20.82
23.03
24.74

16
D.
Statement showing the changes in circulation during twenty years Jrorn October
i,1870, to October 1, 1890.
In circula- In circulation October tion October Decrease. Increase.
1, 1870.
1,1890.
Gold coin
Standard silver dollars
Subsidiary silver and fractional currency
Gold certificates
Silver certificates
Treasury notes, act July
14,1890
United States notes
National bank notes
Total

578,985,305 $386,939,723
62,132,454

1307,954,418
62,132,454

56,311,846
158,104,739
309,321,207

17,322,851
129,593,739
309,321,207

38,988,995
28,511,000
329,489,221
294,337,479

7,106,500
340,905,726
177,250,514 1117,086,965

770,312,000 1,498,072,709

7,106,500
11,416,505

117,086,965 844,847,674

Net Increase
Average net increase per month
Circulation per capita in 1870
Circulation per capita in 1890

_ _..

$727,760,709
3,032.336
19,978
23,969

E.
Statement showing the changes in circulation during ten years from October 1,1880,
to October l, 1890,
In circula- In circulation Octotion October 1, 1890.
ber 1,1880.

Decrease.

Increase.

$261,320,920 $386,939,723
$125,618,803
Gold coin
22,914,07ft
39,218,379
62,132,454
Standard silver d o l l a r s . . .
48,368,543
7,943,303
56,311 846
Subsidiary silver7,480,100 158,104,739
150,624,639
Gold certificates
12,203,191 309,321,207
297,118,016
Silver certificates
Treasury notes, act July
7,106,500
14, 1890
7,106,500
United States notes
329,417,403 340,905,726
11,488,323
National-bank notes
340,329,453 177,250,514 §163,078,939
Total

1,022,033,685 1,498,072,709

Net increase
Average net increase per month
Circulation per capita in 1880
Circulation per capita in 1890

_

163,078,939 639,117,963

__

$176,039,034
3,966,992
20.377
23.969

Tables D and E exhibit the comparative amounts of the various
kinds of money in actual circulation at several different periods.
T h e various sums stated in the tables are all exclusive of money
in the Treasury. T h e y represent, as nearly as is possible, the
exact amounts of the several kinds of money in actual circulation
among: the people at the periods named.
Table D shows that during the last twenty years the net aggregate increase of money in actual circulation among the people
was $727,760,709; average monthly increase during that period,
$3,032,336; per capita increase, $4,991.
Table E shows that for the last ten years the aggregate increase
has been $476,039,024; average monthly increase for the same
period, $3,966,992; per capita increase, $3,592.
BKL




17
F.
Money in actual circulation in England, France, Germany, antf United States.
France.

England.

United States.

Germany.

38.250,000

48,000,000

65,000,000

$550,000,000
100,000,000
60,000,000

$500,000,000
215,000,000
150,000,000

$567,814,780
384,405,706
657,338,406

1,701,000,000

Total

38,165,000

1900,000,000
700.000,000
104.000,000

Population
Gold
Silver
Notes

710,000,000

865,000,000

1,609,558,892

Per capita: France, $44.55; England, $18.60; Germany, $18.02; United States,
324.74.

G*

jTA« relative values of gold and silver in the various countries of the world from
the discovery of America to 1880.
Year.
1497
1500
1551
1559
1561
1575
1623
1640
1665
1667
1669
1679
1722
1723
1724
1725
1726..
1727
1728
1729
1730
1731
1732
1733
1734
1735..,.
me
1737
1738
1739
1740
1741
1742
1743
1744.
1745
1746
1747
1748
1749
1750
1751
1752
1753
1754
1755
1756
1757
1758
1759

Ratio.

Year.

Ratio.

10.70
10.50
11.17
11.44
11.70
11.68
11 74
13.51
15.10
14.15
15.11
15.00
15.17
15.20
15.11
15.11
15.15
15. 24
15.11
14. 92
14.81
14.91
15.09
15.18
15.39
15.41
15.18
15.02
14.91
14.91
14.94
44. 92
14, 85
14. 85
14.87
14.93
15.13
15.26
15.11
14.80
14.55
14.39
14.54
14.54
14.48
14.68
14.94
14.87
14.85
14.15

1680
...
1687
1688
168 9
169 0
1691.
1692
1693
1094
1695
1696
1697.
1764
1765
1766
1767
176S-—— .
1769
1770
1771
1772
1773
1774
1775
1776
1777
1778
1779
1780
1781
1782
1783
J1784
|1785
1786
1787
1788
1789
179017911792
1793
1794
1795
1796
1797
1798
1799
1800
1801

15.40
14.94
14.94
15.02
15.02
14.98
14.92
14.83
14.87
15.02
15.00
15.20
14.70
14. 83
14.18
14.85
14.*80
14.72
14.62
14.66
14.52
14. 62
14.62
14.72
14.55
14.54
14.68
14.80
14.72
14.78
14.42
14.48
14.70
14.92
14.96
14.92
14.65
14.75
15.04
15.05
15.17
15.00
15.37
15.55
J5.65
15.41
15.59
15.74
15.68
15.46

2




Year.
1698
1699
1700
1701
1702
1703
1704
1705
1706
1707
170 8
1709
1806
1807
1808
1809
1810
1811
1812
ttU3_„
1814
1815.
1816
1817
1818
1819
1820
1821
1822
1823
1824
1825
1826
1827__ . . .
1828
1829
1S30
1831
1832
1833
1834.„.
1835
1836
1837
1838
1839
1840
1841
1842
1813

Ratio.
15.07
14.94
14.81
15.07
15.52
1». 17
15.22
15.11
15.27
15.44
15.41
15.31
15. 52
15. 43
15. O
S
15.96
15.77
15.53
16.11
16.25
15.04
15.26
15.28
15.11
15.35
15.33
15.62
15.95
15.80
15.84
15.82
15.70
15.76
15.74
15.78
15.78
15.82
15.72
15.73
15.93
15.73
15.80
15.72
15.83
15.85
15. 62
15.62
15.70
15 87
15.93

Year.
1710
i7ii.:
1713
1714
1715
1716
1717
1718
1719 __ „
1720
1721 . . . __
1848
1849
1850
1851
1852
1853
1854
1855
1856.
1857
1858.
1859
1860
1861
1862
1863
1864
1865
IS 66
1867
1868
1869
1870
1871
1872
1873
1874...
1875
1876
1877.'.
1878
„
1879.:
1880
1881
1882
1883

Ratio.
15.22
15.29
15.31
15.24
15.13
15.11
15.09
15.13
15.11
15.09
15.04
15.05
15.85
15.78
15.70
15.46
15.59
15.33
15.33
15.33
15.33
15.27
15.33
15.19
15.29
15.50
15.35
15.37
15.37
15.44
15.43
15.57
15.59
15.60
15.57
15.57
15.63
15.92
16.17
16.59
17.83
17.22
17.94
13.40
13.05
18.16
18.19
18.64
18 57
19! 41

18
The relative values of gold and silver, etc.—Continued.
Year.

Ratio.

1760
1761 .
1762._____„
1763

14.14
14.54
' 15.27
14.99

Year.
1802
1803
1804
1805

Ratio.
15.26
15.41
15.41
15.79

Year.
1844
184 5
184 6
1847

Ratio.

Year.

15.85 1886
15.92 1887
15.90 | 1888
15.80 1889

Ratio.
20.78
21.13
21.99
22.10

The causes of the recent rapid decline of silver were stated as
follows by Mr. Leech, Director of the Mint, before the Coinage
Committee of the House, in January, 1891:

In December, 1865, a monetary treaty was entered into between France,
Switzerland, Italy, and Belgium, to which Greece subsequently became a
party. The convention prescribed the denomination, weight, and fitness of
the coins that should in the future be struck by each of the contractinparties. By the terms of this convention the coinage of gold was unlimited in
amount, and the coinage of 5-franc silver pieces of full legal-tender value was
permitted without limitation in all of the States comprising the union, at
the ratio of 15* ounces of silver to 1 ounce of gold. All other silver coins were
made subsidiary and to be coined only on Government account. The treaty
has been modified and renewed on several occasions, but the main objects
have been preserved.
In 1871 and 1873 laws were enacted by Germany by which gold was made
the sole standard of value and silver demonetized. All silver coins which
had previously been issued and received in the several states of the German
Empire were called in.
In order to procure the necessary gold for coinage purposes Germany was
forced to sell from time to time up to 1879 large quantities of silver from its
store of melted silver coins, including the lai'ge amount received after the
close of the Franco-Prussian war from France in payment of indemnity.
The effect of this legislation was the creation of a demand for gold in Germany and an increase of the supply of silver bullion or melted coins in other
countries, followed by a depreciation of the price of the latter metal. In the
mean time there was a large increase in the production of silver, which,with
other causes, tended to further depreciate the price.
Owing to the fact that it became profitable to brokers and exchange-dealers to purchase silver in Germany and send it to the states comprising the
Latin Union for coinage into silver 5-franc pieces, it wTas decided ny the contracting parties in 1874 to limit the amount of 5-franc pieces to be coined by
each. This, however, did not steady the price, and in 1878 the states of the
Latin Union decided to close their mints to the coinage of full legal-tender
silver, since which time this coinage has not been resumed.
The action of Germany in demonetizing silver was followed in December,
1872, by Norway, Sweden, and Denmark. These States entered into a monetary treaty, formally ratified by Denmark and Sweden in 1873 and by Norway in 1875, adopting the single gold standard and making silver subsidiary,
to be coined only by the states for change purposes.
In 1875 Holland, which had been oh a silver basis from 1847, adopted the
" double" standard nominally, at the anomalous ratio of 1 to 15 J, but in fact
prohibited the coinage of silver, thus practically going over to a gold basis.
By the law of September 9, 1876, Russia suspended the coinage of silver,
except such as was necessary for trade with China.
By the act of February 12,1873, the coinage of silver in the United States of
full legal-tender quality was not provided for. Gold was made the standard
of vaiue. Bui at me time this act was passed the United States was practically on a paper basis, so that the new law can not be said to have appreciably affected the price of silver. Moreover, silver was received from individuals for coinage into trade dollars up to 1878, and large purchases of silver
were made for subsidiary silver coinage under the acts of 1873 and 1875, to
take the place of fractional paper currency, which had been used for subsidiary purposes since 186&,
S y the act of February 28,1878, the coinage on Government account of the
silver dollar of full legal-tender quality was authorized. Silver for this purpose has been obtained by the purchase of some $24,000,000 worth each year.
Notwithstanding purchases of such magnitude the decline of price has not
been arrested
The annual" supply of silver from the mines of the world has largely increased in the last fourteen years—the period covered by the great decline
In the market price of silver—having doubled since 1872; that is,"from some
$62,000,000 in that year to about 3124,000,000 in 1886.
BEL




C


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102