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" Ideas are no respecters of persons. They will sap the power of rank, of wealth,
of number, and of authority."—Macleod.
" There is no such thing as intrinsic value."—Prof, Jevons.
^ tl

The value of money, other things being the same, varies inversely as its quantity; every increase of quantity lowering the value and every diminution raising
it in a ratio exactly equivalent."—John Stuart Mill.
" That commodities would rise or fall in price in proportion to the increase or
diminution of money I assume as a fact that is incontrovertible."—liicardo.



N E V A D A ,



O C T O B E R 1 4 , 1 6 , 2 1 , 2 3 , 2 4 , 2 5 , 2 7 , AND 3 0 , 1 8 9 3 ,




Kemonetization of Silver.

H O N . J O H N P. J O F E S ,
OF N E V A D A ,



October U, 16, 21, 23, 2k, 27, and 30, 1893.
The Senate having under consideration the bill (H. R. 1) to repeal a part of
an act approved July 14, 1890, entitled "An act directing the purchase of silver bullion and the issue of Treasury notes thereon, and for other purposes1'—

Mr. J O N E S of Nevada said:
Mr. PRESIDENT: T h e question before the Senate, broadly considered , involves all the varied interests of this Republic.


concern of our people, financial and industrial, religious and
moral, political and social, come within its all-embracing scope.
Upon a proper solution of the problem of money in a country
depends the decision of the question whether there shall be in
that country more poverty or less, more crime or less, more insanity or less; whether among its people there shall be more employment or more idleness ; more happiness or m o r e misery—
indeed more liberty or more slavery—for it must be borne in
mind that men may be as thoroughly enslaved by unfavorable
industrial conditions as by positive legal enactment.
N o matter under what f o r m of government a people may live,
whether the irresponsible despotism of a military autocrat or a
constitution carefully framed to permit the widest play of political action, the table f r o m which H u n g e r rises unsatisfied will
have no seat reserved for Freedom.

Surely a subject that affects

so vast a range of topics deserves serious consideration.


we have been told that upon assembling here in response to the
call of the Executive we had nothing to do but to vote, or, at most,
to vote first and deliberate afterward.

W h a t a travesty upon a,


republican form of government!

W h a t a plain confession of

preference for the methods of despotism!

" Vote first and delib-

erate afterward!" It is the echo of the command given by the first
Napoleon to the representatives of the Allied Powers assembled
in Italy.

That was a command worthy of a tyrant; but the bound-

aries of this vast Republic are not broad enough to give it place.
If a lawmaking body has but to act first and deliberate afterward, there is no necessity for



W h a t is needed is a Man on Horseback.
A grave subject, sir, needs grave deliberation.

In the Senate

of France, upon a discussion of monetary standards, Senator
Dumas well said:
Those who approach these questions for the first time decide them at once:
those who study them with care hesitate; those who are obliged practically
to decide, doubt and stop, overwhelmed with the weight of the enormous

T h e very essence of deliberation is—time.

This debate, we

Know, has been most impatiently borne by a small but powerful
coterie of men who meet in bank parlors in the great money
centers in all the countries of the world, and who, whether residing in the United States or elsewhere, have a profound distrust of popular government and an admiration for Napoleonic

T h e discussion here has been conducted under great


The speeches of Senators who favor the gold

standard demonstrate that the necessity for protracted sittings
in a close atmosphere every working day and many nights during the most enervating season of the year is not conducive to
the careful study or painstaking analysis of a great question.
Neither is it conducive to clearness of thought or accuracy of expression, without which no complex subject can be intelligently
or logically discussed.

T h e total disregard of economic truths

and of correct definitions on the part of those Senators demonstrates that they have not had the leisure—for it is not to be conceived that they did not have the desire—to bring to bear upon
the subject the learning and ability of which they are in an eminent degree possessed.
T o discuss this question in all its broad aspects and implications would require a treatise on political and social economy.
T h e subject must be examined with the laborious methods of
the student, and every proposition subjected to the test of reason.


L e t us be candid, Mr. President, with reference to the question before the Senate.
it is one of principle.

It is not a question of mere expediency;
It is not merely the repealing of a clause

of a law already on the statute books, with a view of providing
a substitute for that clause.

W e r e that the intention no man

can justify a departure in this instance from the unvarying and
immemorial custom of legislative bodies, to embrace in the repealing measure the remedy for the evil sought to be corrected.
Y e t the gold standard press protests that the object is not to
place the country upon that standard.

The very vehemence

with which this statement is made is of itself suspicious.

" The

lady doth protest too much methinks."
No impartial mind can fail to see that in its way the proposition before the Senate is a repetition of the tactics of 1873. The
attempt is to place the country on the single gold standard before the people have opportunity to speak.

Deeming the ques-

tion in all its implications the most momentous which has ever
come before the American people, I shall ask the indulgence of
the Senate while I attempt, to the best of my ability, to present
the subject somewhat broadly.


In all attempts at fundamental discussion it is necessary first
to clear the ground of such obstacles as tradition or ignorance
may have placed in the pathway of progress.

W e know that

before men came to understand the forces by which the earth is
held in its orbit it was to them inconceivable that a body could
exist in space without physical support.

Hence in the most an-

cient of cosmologies the earth—which was supposed to be fiat—
was conceived to be held in position by pillars, upon which it

For, as was argued by the primitive mind, it must rest

on something!
W h i l e such a belief existed it was in vain to expect any direct
progress to be made toward a true science of astronomy.


phenomenon observed was attributed to a cause wholly removed
from the real one; every inference drawn was distorted to fit
into the framework of the preconceived theory and to accord
with the established opinion.
effects and effects for causes.

Thus causes were mistaken for
In the slow course of ages, as as-


tronomicai phenomena multiplied and each newly discovered
fact came to be compared with the facts already accumulated,
certain anomalies, inconsistencies, and incongruities were revealed, and it was in the effort to reconcile those that it began
by degrees to dawn upon mankind that the discrepancies may
have had a common origin in some fundamental misconception
affecting the entire hypothesis by which the phenomena had
been interpreted.
Now, it is not too much to say that the world is to-day more
instructed in at least the rudiments of astronomy than in those
of monetary science.

So far as concerns the ordinary facts of

every-day observation those affecting astronomy are much better understood than those affecting money.

People will give an

intelligible and uniform explanation of the causes even of an
eclipse, but a hundred differing and contradictory accounts of
the genesis of a panic.

Every school boy knows that the appar-

ent movement of the sun and stars around the earth as a central
body is a mere optical illusion; and that, contrary to the ancient
belief, the earth is not a flat surface.

Yet, with reference to

money, fallacies equally gross command the unquestioning faith,
not of the masses merely, but of men of the highest intelligence in
other departments of human knowledge.

W h i l e those fallacies

are accepted as fundamental truths, it is in my opinion impossible
t o arrive at correct conclusions concerning any question arising
in any department of monetary science.
But in the nature of things the errors must have been plausible or they would not have so long survived.

Hence their dis-

lodgment can not be effected by mere denial of their truth.
T h e denial must be accompanied by proofs, and those can be derived only from an analysis that shall go to the root of the questions involved, by an appeal to reason in the effort to arouse
thought and awaken reflection.
T h e silver question can not be intelligently discussed without
entering upon the entire subject of money, and inasmuch as one
of the contentions of the gold-standard advocates is that silver
is losing its " i n t r i n s i c value," it is necessary for us to investigate the subject of value and ascertain if we may how value,
especially the value of money, arises; from what source or sources


it is derived, how far the value of money is dependent upon the
cost of production of the material of which it is composed, and
whether in fact there is really any such thing as " i n t r i n s i c

So also it is necessary to investigate the essential nature

of money, the function it performs, and the phenomena connected with the increase and the decrease of its quantity.
W e are told that silver is no longer fitted for the full money
use because it has less "intrinsic v a l u e " than formerly—because the standard dollar of that metal is no longer, in " i n t r i n sic value," the equivalent of the gold dollar at the ratio of 16
to 1.

This is regarded by the advocates of the gold standard as

an argument of unanswerable force.
it they deem the discussion closed.

W h e n they have stated
Y e t , like the pillars which

were believed to support the earth, this intrinsic value whether
of gold or silver is purely imaginary.

Notwithstanding the re-

jection of the theory by all well-informed economists, it continues
to be a refuge for ignorance and sciolism.
In the whole history of time there has been no error in any
department of thought that, in the degree of contribution to
the martyrdom of man, can compare with this notion of " intrinsic value."

Fully refuted and rejected by science, the the-

ory had well nigh disappeared from economic literature until
the discovery was made that the hold which, like a blighting
superstition, it had obtained on the ignorance of men could be
utilized to discredit silver and to plume the single gold standard.

Immediately the teachings of science are set at naught,

and " intrinsic value " is declared to be the determinative factor in the discussion.
I wholly deny the existence of intrinsic value, whether in gold
or any other object.

I base the claims of silver, as I have always

based them, on the indispensable necessity for some money material acceptable to our people and especially adapted to the
money use—a material which shall exist in quantity sufficient
to furnish to a rapidly increasing population such number of
monetary units (dollars) as shall keep pace with the constantly growing demands of a country whose development has hardly
yet begun.



In o r d e r intelligently to determine h o w far it m a y b e incorrect
t o say that m o n e y o r any o t h e r o b j e c t should possess " intrinsic
v a l u e , " w e m u s t h a v e a c o r r e c t c o n c e p t i o n of t h e m e a n i n g of
the term



T h e r e is n o w o r d i n t h e e n t i r e v o c a b u l a r y of p o l i t i c a l e c o n o m y
t h a t i s so m u c h , a n d s o v a r i o u s l y , m i s u n d e r s t o o d , y e t of w h i c h
i t is so essential to h a v e an e x a c t a p p r e h e n s i o n .
B a i l e y , i n h i s c e l e b r a t e d w o r k o n T h e N a t u r e of V a l u e , s a y s :
In the examination of the present subject, as discussed by those writers
on whose doctrines I have ventured to animadvert, I have been forcibly
struck with the vagueness, the inconsistencies, and the errors which have
arisen from speaking of value as a sort of general and independent property ; and I can not too strongly recomm end the student of political economy never to let the word value pass before him without putting the question, "value in what?" or " i n relation to what? " The value of a commodity must be its value in something, and whenever the te rm is used with
any definite meaning, that something may be assigned. If it can not be assigned, the reader may rest assured that the author, whoever he be, is
writing without any determinate ideas.—Nature of Value, pages 34 and 35.
A n d b y w a y of e m p h a s i z i n g t h e i m p o r t a n c e of c o r r e c t d e f i n i t i o n s i n e c o n o m i c a r g u m e n t , J3ailey, q u o t i n g a n o t h e r


v e r y a p p r o p r i a t e l y says:
To discover error in axioms, or in first principles grounded on facts, is
like the breaking of a charm. The enchanted castle, the steep rock, the
burning lake disappear; and the paths that lead to truth, which we imagined
to be so long, so em barrassed, and so difficult, show as they are, short, open,
and easy.
A p o i n t a l w a y s t o b e b o r n e i n m i n d a b o u t v a l u e is t h a t i t i s
n o t an independent entity, nor quality i n h e r i n g in an o b j e c t .


i s n o t a m a t e r i a l t h i n g , n o r c a n i t e v e n e x i s t i n t h e s u b s t a n c e of
a material thing.
I n h i s E s s a y o n t h e V a l u e of G o l d P r o f . J e v o n s c a l l s


" a n impalpable r e l a t i o n ; " and in his celebrated w o r k on M o n e y
a n d t h e M e c h a n i s m of E x c h a n g e , h e s a y s of i t :
Value, like utility, is no intrinsic quality of a thing; it is an extrinsic accident or relation.
T h e same a u t h o r , in his w o r k u p o n P o l i t i c a l E c o n o m y , says:
Value implies, in fact, a relation: but if so, it can not possibly be some other
thing. A student of economy has no hope of ever being clear and correct in
his ideas of the science if he thinks of value as at all a thing or object, or
even as anything which lies IN a thing or object—The Theory of Political Economy, page 82.

A n d a g a i n , in t h e s a m e w o r k , P r o f . J e v o n s s a y s :
Value in exchange expresses nothing but a ratio, and the term should not
be used in any other sense/ To speak simply of the value of an ounce of gold
is as absurd as to speak of the ratio of the number 17. What is the ratio of
the number 17? The question admits no answer, for there must be another
number named in order to make a ratio.—The Theory of Political Economy,
page 83.
J o h n Stuart Mill, in defining " value," says:
The word " v a l u e , " when used without adjunct, always means, in political
economy, value in exchange—Political Economy, Book 3, chapter 1.
P r o f . Francis A . W a l k e r says:
Value is not a property of any thing. It arises wholly out of relations which
exist between things.—Money in its Relations zo Trade and Industry, page 32.
P r o f . A . L . P e r r y , of W i l l i a m s C o l l e g e , i n h i s w o r k o n P o l i t i c a l
E c o n o m y , s p e a k i n g of v a l u e , s a y s :
Value, then, is not a quality of single things, belonging to them as if by
nature, as hardness is a quality of a rock or gravity is an attribute of gold;
because all physical qualities in physical things, all that which makes or
helps to make anything such as it is, maybe learned by a study of the things
themselves, by themselves. A careful examination and analysis of the mechanical and chemical properties of any physical thing will discover all its
distinguishing characteristics, all that makes it that particular thing in distinction from all other things; but it is plain already that the value of anything (if it have value) can not be found out by studying that particular
thing by itself alone; the questioning of the senses, however minute, the
test of the laboratory, however delicate, can never determine how much anything is worth, because that always implies a comparison between two
things or more strictly a comparison between two renderings in exchange.
Value is not an attribute of single things; not even if the things be physical and tangible.—Principles of Political Economy, page 34.
N u m b e r l e s s o t h e r c i t a t i o n s c o u l d b e m a d e f r o m w r i t e r s of t h e
first r a n k t o p r o v e t h a t v a l u e is n o t a p r o p e r t y r e s i d i n g i n a n y
object, and that therefore it can not b y any possibility be " intrinsic."
A c o r r e c t d e f i n i t i o n of v a l u e I c o n c e i v e t o b e : H u m a n e s t i m a t i o n p l a c e d u p o n d e s i r a b l e o b j e c t s w h o s e q u a n t i t y is l i m i t e d .
T h e r e are then

two factors, and two only, w h i c h constitute

v a l u e — t w o e l e m e n t s e n t e r i n g i n t o i t s s t r u c t u r e ; first, h u m a n d e s i r e f o r an o b j e c t , a n d s e c o n d l y , l i m i t a t i o n of t h e n u m b e r of o b j e c t s of t h e c l a s s t o w h i c h t h e d e s i r e d o b j e c t b e l o n g s .
h a v e n o desire to obtain an article, n o value will attach to it.

If m e n
If, on

the other hand, m e n esteem an article h i g h l y , then value will
b e p r e d i c a t e d of i t i n p r o p o r t i o n t o t h e d e g r e e of s c a r c i t y o f
a r t i c l e s of i t s c l a s s , m o d i f i e d , o r , as t h e e c o n o m i s t s s a y , " c o r 785


rected," by the degree of estimation which, on the average, men
place upon articles of that class.
In order that value may exist, there must be not only an object, but a subject; there must, on the one hand, be a human
being, and on the other something of which he desires the possession, and of a class the quantity of which is limited.


therefore is subjective, not objective; and not being objective it
can not be " intrinsic."
Limitation of quantity implies greater or less sacrifice to reduce to possession.

Hence every expression of value is an ex-

pression of degree.

It is a quantitative expression of the degree

of desire for an object, corrected by the average degree of sacrifice necessary to obtain it.
in response to desire.

This sacrifice will not be made except

Hence value can exist only by reason of

The reason why demand exists is not important.

It is of no

consequence to know why men esteem an object or invest it with
value; nor does it matter whether the esteem grows out of a use
which men find for qualities that inhere or exist in the object
itself, or whether, in aid of the ordinary evolution of society,
and the development of institutions, they see fit to confer upon
an object a use or function the exercise of which they
indispensable to their

progress, prosperity,



and happiness.


Qualities may be said to be inherent or intrinsic in objects,
but value, being a conception of the mind, cannot be intrinsic
or inherent.

This can not be difficult to perceive when we bear

in mind the teaching o'f science, that color does not reside in the
object in which we appear to see it, but is an attribute of the
eye itself, and that sound is not a quality of bodies, but a property of the human ear.
If value were intrinsic, if it resided in the article, it could not
be taken from it, and it could not be changed by changes in the
number of the objects of which value is asserted, or with modifications in the desire of men to become possessed of such articles.

Qualities that are inherent do not vary with the shifting

degrees of estimation in which they may be held by mankind.
Hardness in a stone, gravity in lead, do not suffer either aug785


mentation or diminution by reason of any increase or reduction
of the appreciation of men.

If value were intrinsic in articles

it would remain intrinsic whether people wanted them or not.
But things can have no economic properties by and of themselves; those properties exist only because there are people.


thing can have no use unless some one wants to use it; it can
have no value unless, in addition io being wanted, some one is
willing to incur sacrifice to obtain it.
Suppose a metal to have more value at one time than at another.

W e know that at both times it has the same specific

gravity, the same density, the same ductility, the same tensile

These qualities being intrinsic, can not be removed

without destroying the object.
If an article had intrinsic value, such value in its entirety
would at any given time be 100 per cent.

The intrinsic value of

gold in 1873 was therefore 100 per cent; it is still, and must always be, 100 percent.

But we know that in comparison with all

other things—and value, as already shown, is a matter of comparison—gold to day has a value 50 per cent greater than it had in

Has it to-day, then, 150 p e r c e n t of intrinsic value, or 50

per cent more than it is possible for it to have?
Suppose a new and extensive use to be discovered for silver,
and a larg-e demand to spring up in consequence, resulting in an
increased price (stated in terms of gold) for silver bullion.
would then be said that anew value had arisen for silver.
that new value be intrinsic?



W h e n silver fell 20 cents an ounce

in one day, on the issue of the Indian order in council, was that
a loss of 20 cents' worth of intrinsic value?

And when it rose

again, was that rise a recovery of so many cents' worth of intrinsic value?
If all the world should remonetize silver it is admitted by all
the advocates of the gold standard that silver would have a much
higher value than it now has.

Would this added value be " in-




OE R E A S O N — T H A T




On this subject of intrinsic value what do the leading authorities say?

" T h e r e is n o s u c h t h i n g , " says P r o f . J e v o n s , " a s


( E s s a y o n v a l u e of g o l d . )

J o h n Stuart Mill says:
There can not, in short, he intrinsically a more insignificant thing in the
economy of society than money.—{Principles of Political Economy, volume
II, page 23.
Prof. Perry,




ardent champion




s t a n d a r d , i s c o m p e l l e d t o a d m i t t h e a b s u r d i t y of t h e e x p r e s s i o n
" i n t r i n s i c v a l u e , " a n d t o d e n y s u c h v a l u e t o g o l d as w e l l as t o
e v e r y t h i n g else.

I n r e v i e w i n g t h e s t a t e m e n t s of a n o t h e r w r i t e r

o n t h e s u b j e c t of m o n e y , w h o h a d u s e d t h a t t e r m , P r o f . P e r r y
This author is led astray by the worse than useless adjective " intrinsic,"
having never yet learned that there is only one kind of value i i economics,
namely, purchasing power .—Principles of Political Economy, page 341.
M r . M a c l e o d , in his elaborate treatise u p o n t h e " T h e o r y and
P r a c t i c e of

B a n k i n g , " s p e a k i n g of

the expression


v a l u e , " says:
This unhappy phrase meets us at every turn in economics, and yet the
slightest reflection will show that to define value to be something external,
and then to be constantly speaking of intrinsic value are utterly self-contradictory and inconsistent ideas. Thus over and over again it is repeated
in economical treatises that money has intrinsic value, but that a bill of exchange or bank note is only the representative of value.
Money no doubt is the produce of labor, but, as Adam Smith observed, if
it would exchange for nothing it would have no value; so, M. Say says, that
the value of gold and silver consists only in what they will buy. How then
can its value be intrinsic? How can anything have intrinsic value unless it
has the things it will exchange for insiae itselft " M o n e y has intrinsic v a l u e ! "
Has a piece of money got the merchandise, and all the other things it will purchase, inside itself? Money will exchange for anything—corn, houses, horses,
carriages, books, etc., and each of these is the value of vthe money with respect to that commodity. But which of these is its intrinsic value? The incongruity of these ideas is so glaring that it is only necessary to call attention to it for it to be perceived at once. Yet from the very beginning of the
science this phrase has infested U—Theory and Practice of Banking, page 48.
In e x t e n d i n g the discussion Mr. M a c l e o d says:
Moreover, we see on considering the term value that it is nonsense to
speak of the representative of value. Value is a ratio—an external relation.
What can be the representative of a ratio, or of an external relation? To say
that money, because it is material and the produce of labor, has intrinsic
value, and that a bank note is only the representative of value, is just as
absurd as to say that a wooden yard measure is intrinsic distance, and that
the space of 36 inches between two points is representative distance. It is of
the first importance to economic science to exterminate this unhappy phrase
"intrinsic value," which is clearly shown to be a contradiction in terms.—
Macleod, Theory and Practice of Banking, 1, 50.


Ricardo (than whom no financial authority stands higher) lays
down the principle that even paper money, having not a shred
of what the gold-standard advocates call "intrinsic value," will
have real value equal to that of gold money, provided the number of the notes be sufficiently limited in quantity.
Speaking of uncovered paper money, he says:
By limiting its quantity its value in exchange is as great as an equal denomination of coin, or of bullion in that coin —Political Economy and Taxation, chapter 27.

After further discussion of the subject he continues:
On these principles it will be seen that it is not necessary that paper
money should be payable in specie to secure its value; it is only necessary
that its quantity be regulated according to the value of the metal which is
declared to be the standard. (Same work and chapter.)

In other words, Ricarao's statement here is, that if the amount
of irredeemable paper money in a country were just equal to
the amount of gold which would form that country's distributive share of the gold money of the world, the paper money would
have precisely the same value, dollar for dollar, as would an
equal amount of gold in that country.
A l l these writers and many others declare that the value of
money—other things being equal—depends on its quantity and
not on its material.

It is therefore absurd to claim that silver

has ceased to be adaptable for the money use because it is said
to have lost some supposed attribute that neither silver nor gold
nor anything else ever possessed, namely, intrinsic value.
But we have an authority outside the line of writers on political economy, whose words, nevertheless, will attract the attention, if not of the bankers and champions of the gold standard,
certainly the attention of the plain people of the United States—
the words of one of whom it is written:

" A n d they sent unto

him certain of the Pharisees and Herodians, that they might
catch him in his talk."

Clearly, he was not a believer in the

theory that money must have "intrinsic value."
quiry as to coin was:

His simple in-

" W h o s e image and superscription hath it V

That was nearly two thousand years ago, yet we find the Pharr
isees and Herodians of the present time attempting to confuse
the public mind with demands for intrinsic value—something
that has never existed.

W h a t b e c o m e s of

the argument for




m o n e y w h e n w e s e e s i l v e r m o n e y d o i n g a l a r g e p o r t i o n of


b u s i n e s s of t h e w e s t e r n w o r l d a t a v a l u a t i o n 40 p e r c e n t h i g h e r
than its so-called v a l u e m e a s u r e d in g o l d ?
O n e w o u l d s u p p o s e t h a t t h e u n i v e r s a l a c c e p t a n c e of


c o i n s as g o o d m o n e y b y all t h e p e o p l e w i t h i n t h e b o u n d a r i e s o f
t h e l a r g e s t c o u n t r i e s — c o i n s n o t o r i o u s l y w a n t i n g in so-called intrinsic value—would have long since exposed the entire fallacy
of t h e i d e a t h a t i t is t h e b u l l i o n v a l u e t h a t c o n s t i t u t e s t h e m o n e y
value o f the metals.

T h e m o n e y f o r t h e m a s s e s of t h e p e o p l e ,

i t a p p e a r s , d o e s n o t n e e d t o h a v e t h e f u l l q u o t a of " i n t r i n s i c "
v a l u e — i t m a y b e " s h o r t " in w e i g h t , b u t f o r b a n k e r s and b o n d h o l d e r s m o n e y m u s t b e of f u l l w e i g h t .

On this point Gen. F. A .

W a l k e r , i n h i s w o r k on M o n e y , s a y s :
A laborer who is paid on Saturday 22 coined shillings for his week's work,
in reality gets less than a sovereign's (20 shillings) worth of silver: the girl
who is nominally paid 10 pence for her day's work in the mill, gets only about 3
pence worth of copper. Here, it is said, is a manifest injustice. The wealthy
and well-to-do receive their incomes in the principal coin of the country,
which is of full weight and fineness; th* poor are paid in coins which contain only a part, and perhaps only a small part, of the metal which would
be worth the sum for which they are made a tender by law. This complaint,
sometimes heard among laborers, was recently given a wider hearing through
Col. Tomline, a member of the British Parliament.
The answer of Mr. Hubbard appears to be conclusive, so long as such billon or token money is not issued in excess. It is quite true, says Mr. Hubbard, that silver, rather than gold, is the medium through which the wages of
the laboring classes are paid; but to show that the laboring classes are
injured by the mint regulations it must be demonstrated that the shilling
they now receive commands a smaller quantity of the necessaries of life than
would a shilling coined as an integral measure of value. The shilling now
circulating derives its purchasing power, not from the silver it contains, but
from its being by law a twentieth part of a pound—the golden standard. All
prices, wholesale or retail, whether of a bullock or a beefsteak, of a quarter
of wheat or a loaf of bread, are computed upon a gold valuation. The artisan's shilling is intrinsically the twenty-second [instead of the twentieth]
part of a pound, his penny but the four hundred and eightieth [instead of
the two hundred and fortieth] part of a pound, but how do these facts affect
his interest if he can always, with 20 shillings, or 240 pence, secure the value
of a pound?—Money, pages 219 and 220.
S o l o n g , M r . H u b b a r d t h i n k s , as a l a b o r i n g m a n c a n




of a p o u n d w i t h h i s t o k e n c o i n a g e , m a t t e r s axe all.

W h y should the laborer demand intrinsic value?


c o u r s e , t h e p r o p o s i t i o n c h a n g e s w h e n i t is n o t a l a b o r e r , b u t ,
s a y , a l o r d , w h o is t o r e c e i v e m o n e y .
have "intrinsic value."


the money



From the fallacy lurking in the idea of " intrinsic value " i s
derived the further fallacy that the value of money depends on
the cost of production of the material of which the money may
be composed.
This is an attempt to apply to money the principle of cost of
production (or, as some economists have it, of reproduction),
admitted to govern the prices of commodities.
are not parallel.

But the cases

Money, properly considered, is not a commod-

On the very contrary, it is the polar opposite of commodAdmitting that gold and silver, when not coined, are

commodities, yet their value as money is affected by issues of
uncovered paper money, so that the law of cost of production,
if it is to be applied to the metals as money, must be corrected
by allowing for the influence of such paper issues.

Tn countries

having a " m i x e d currency," composed of either or both of the
metals in conjunction with paper, the value of the metallic
money is diminished—population and demand remaining unchanged—by every increased issue of paper, and, conversely, is
increased {ceteris paribus) by every withdrawal of the paper from
If it be sought to avoid the force of this contention by denying
that anything can be money except the metals (as, from and after
the passage of the bill now before the Senate, it will doubtless
be insisted that nothing can be money except gold), I reply that
it is too late in the century for that.

The leading writers on po-

litical economy unite in the declaration that when duly limited in
quantity paper money has all the value of gold money, and if
sufficiently limited may even have much more value than gold
and rise to a premium above it.

Our leading American writer

on money, a writer recognized in every gold-standard country,
and among the leading economists of the gold-standard school m
all countries, as one of the most distinguished authorities on
monetary science, Gen. Francis A . Walker, whom I have just
quoted, defines money as follows:
Money is to be known by its doing a certain work. Money is not gold,
though gold may be money; sometimes gold is money and sometimes it is
not. Money is no one thing, no group of many things having any material

property in common. On the contrary, anything n<ay be money; and anything,
in a given time and. place, is money which then and there performs a certain
function. Always and everywhere, that which does the money work is the money
thing.—Money Trade and Industry, chapter 1.

And in order to show that he means precisely what he says,
Gen. W a l k e r says:
The claim that greenbacks are not money in the fullest sense of that term;
that they can not do all in the way of measuring values, so called, which
gold t>r silver may do is untenable, and it can be of no advantage to any
really sound cause to seek to maintain it.—Money in its Relations to Trade and
Industry, preface.

Gen. W a l k e r does not approye of Government paper money,
because of the danger of overissues of such money, but neither
he nor any other leading writer on the subject of money denies
that with proper limitation of quantity so-called irredeemable
paper money maintains itself, and when so limited in quantity
has historically maintained itself, without the slightest difficulty
at a par with gold.

W i t h more than 25 per cent of all the money

of the world uncovered paper money, costing nothing to produce—though costing each man who possesses it as much to acquire as if it were so much gold—how absurd it is for anyone
to claim that the value of money is determined, as in the case of
commodities, by the cost of production of the material.


value of money, no matter of what material made, is determined\ by
the cost of obtaining it after such material has been made into money;
and this value is expressed in the general range of prices of commodities.
But leaving paper money wholly out of view, and looking even
at gold and silver merely as commodities, we shall see that they
constitute a category wholly by themselves, and that so far as
the law of cost of production applies to them, it applies under
circumstances totally different from those under which it applies
to commodities in general.
A s to all other commodities, the supply is each year consumed
by the time the next year's production becomes available; that
is to say, at the expiration of a year from the date of production
practically little or none of a particular commodity remains to
lap over o n the new supply.

Owing to the indestructibility of

the precious metals, however, there is an enormous stock of them
always in existence; so that the new supply of each year, whether


costing little or much, is so slight in proportion to the quantity
already existing that it can exercise but an infinitesimal influence on the value of the total supply in the market.
It is not like the case of a thing of which there may be a surplus.

A surplus of anything is such portion of it as is left over

after the satisfaction of all demands. Of a metal transmutable into
money at will there can never be a surplus.

There is demand,

and instant demand, for the entire production.

T h e influence

of accumulation in steadying the value of the monetary metals
has been likened to the effect of an enormous balance wheel in
modifying the action of machinery—protecting it from those
extreme variations of speed which would otherwise be the instant effect of varying degrees of steam pressure.
L e t us suppose, as to any ordinary commodity, say wheat, that
there were six months' supply of it in the world at a given time.
It is readily conceivable that in a single year that supply m i g h t
be doubled.

But to double in one year the amount of gold and

silver w h i c h is already in use as money throughout the world
would require the production in that year of the enormous sum of
over $7,500,000,000.

The largest amount ever hitherto produced

in one year of both metals combined is only $325,000,000, so that,
in comparison with the stock coming over from the past, the
new supply of each year is trifling.

W i t h all other things the

case is reversed; it is the stock coming over that is trifling in
comparison with the new supply.
Taking into account the rapid and enormous yield of gold in
Califcrnia and Australia in the middle of the century, if the valile
of the product had been governed, as in the case of ordinary
commodities, simply by the cost of production at the time the
discoveries were made, the value of the metal would have fallen
enormously and at once; whereas the change that did occur was
slight and gradual, the value of money not falling, according to
the best authorities, more than 18 or 20 per cent, and that fall
spread out over a period of twenty years.
But there is another reason why the precious metals as commodities constitute a category by themselves, namely, that the
pursuit of mining is one into which the speculative element enters in a degree wholly unknown in other fields of production.



In all other departments of production the result of effort can
be measurably, foreseen.

That result will usually bear some

approximate degree of relation to the amount of labor exerted
and capital employed.

Even in agricultural production, the re-

sult of which depends in large measure on contingencies of
weather, if there be planted an increased acreage there will be
expected an increased crop.

In fact, crops may, according to

demand, be increased practically without limit: soil is always

Not so the precious metals.

There is an impassa-

ble barrier opposed by nature to the unlimited production of
Unlike the products of agriculture, men can not at will deposit
in the soil seeds of gold and silver to multiply many fold, and
bring forth a great crop.
Unlike the products of manufacture, gold and silver c a n n o t be
made to order.

Mines are discovered, not made; and at this

stage of the world's progress can be discovered only after long,
tedious, and, on the whole, very expensive search. W h e n so discovered in nine cases out of ten, after absorbing large amounts
of capital they have to be abandoned, as of not sufficient fertility
to defray running expenses.

In the occupation of mining, there-

fore, the question of what quantity of shall result from a
given quantity of labor and a given expenditure of money, counting the long enduring search and the profitless exploitation, is
so much a matter of mere chance that no intelligent calculations
or predictions can be made on the subject.
In the manufacture of ordinary commodities, on the contrary,
while there is always the question of what price can be obtained
for the products when made, there is at least assurance that by
the application of a certain amount of capital and the employment of a certain number of men something approaching definite computations can be made in advance as to the number of
articles of a given character which may be expected to result.
The larger the amount of labor and capital applied the greater
on the average is the result expected.
gether different.

W i t h mining it is alto-

The hazard is so great as to 99 per cent of

the " p r o s p e c t s " that men who succeed in realizing any considerable sum of money in the occupation almost always put the


money back into the ground—that is to say, invest it in " p r o m ising " ventures which never become anything but promises.
In discussing the cost of production of silver, the operations
of the most successful and productive mines only are taken into

No note is taken of the fact that mining is a lottery

and that thousands of ventures are total failures.

Many millions

of dollars have been expended in sinking shafts, boring and
blasting tunnels, erecting hoisting works, creating plants, and
constructing mills that have never returned to their projectors
the value of one dollar.

Y e t so-called statisticians and states-

men who know absolutely nothing of the subject, and many of
whom have never even seen a mine in their lives, treat us t o
long disquisitions upon the cost of mining silver.

My word will

be sustained by that of every experienced miner in this country,
as well as in the world, when I assert that taking as a whole the
business of silver-mining, for every dollar produced more than a
dollar has been actually expended.
For reasons which must be satisfactory to themselves the statisticians and statesmen who are careful to give us their abortive
and absurd computations as to the cost of producing silver, do not
appear to be equally solicitious to instruct the world as to the
cost of producing gold.

Perhaps they entertain some fear that

investigation as to the cost of gold would show that in proportion to coining value it has, in the main, cost very much less than
It is the belief of well-informed scientists that in the case of
gold, the element of cost of production bears much smaller proportion to the money value of the metal than is the case with

After an exhaustive investigation covering a series of

years, Prof. Suess, of the University of Vienna, perhaps the
most distinguished of living geologists, declares in his work on
the Future of Gold that nine-tenths of the gold of the world
has been obtained from the gravel deposits of old river beds
( " p l a c e r s " ) , in which work, as a matter of course, the labor cost
was the veriest trifle in comparison with the money value of the
I will illustrate this by reading a brief extract from a letter
written in 1848 by the late distinguished General of the A r m y ,


Gen. William T. Sherman, then a captain, stationed at Monterey,

This letter appeared in the New Y o r k Tribune of April 7,

1892, as having been read in public by the honorable Senator
from Ohio [Mr. SHERMAN] to whom it had been written.


referring to the inconvenience to which the officers of the A r m y
had been subjected by reason of the excited rush of the people,
including the private soldiers of his command, to the newly-discovered gold fields, Capt. Sherman said:
This gold, is found in the beds of streams, in dry quarries, in fact mingled
with the earth over a large extent of country. * * * Men are n o w getting f r o m their individual labor f r o m $5,000 to $8,000 a month. This is not
fiction. It is the truth. I went with Governor Mason and saw the evidence
of it myself.

W h e n an ordinary unskilled laborer, without capital, could
make $8,000 a month, an amount sufficient to buy a good house
in any city in the United States, the argument from cost of production can not be very strong.
The influence of these discoveries began to be felt only by
slow degrees as the new money came to be distributed over the
world, and it was because of the increase of the quantity of
money, and not from any consideration arising from cost of production of its material, that its value fell—not the value of gold
alone, though it was gold alone that increased in quantity.


value of silver money also fell, for the metals being freely interchangeable in one country or another at a ratio established by
law, both felt the depreciating effects of the increased quantity.
Even now, when the placers seem to be exhausted, and gold is
to be obtained only from veins, involving the use of capital and
machinery, there is far greater steadiness in the cost of production of silver than of gold, and the gold mines are relatively much
the less expensive to work.

A plant that will crush 100 tons a

day of gold ore can be built for $25,000; whereas one that will
crush 100 tons a day of silver ore instead of costing less will cost
approximately $100,000.

It is the experience of all miners that,

once found, gold mines can be worked at a relation of profit over
silver mines much greater than a ratio of 1 to 16; but the difficulty is that the mines are not to be found.
Owing then to the special category in which gold and silver
must be placed by reason of the special circumstances affecting

t h e m t h e i n f l u e n c e of t h e c o s t of p r o d u c t i o n o n t h e v a l u e of t h o s e
m e t a l s is v e r y g r e a t l y o v e r r a t e d .

T h i s is f u l l y r e c o g n i z e d b y t h e

e c o n o m i s t s w h o a d m i t t h a t t h i s i n f l u e n c e is n o t d i r e c t i n a n y
s e n s e as i n t h e c a s e of c o m m o d i t i e s , a n d t h a t i t is o n l y o v e r l o n g
p e r i o d s of t i m e t h a t i t t e n d s t o a f f e c t t h e v a l u e of m o n e y , b y a f fecting the quantity produced.






this point

Mr. Henry


p r o f e s s o r of


e c o n o m y i n t h e U n i v e r s i t y of C a m b r i d g e , E n g l a n d , s a y s :
In consequence of the great durability of gold, together with the fact that
nearly all the gold used as money is practically in the market at any given
time, any change in the cost of production is likely to take a long time to
produce its full effect on value. Hence the effects of all changes in the conditions of production of the precious metals are at first, and continue to be
for many years, questions or quantity only, with little reference to cost of production.-—Principles of Political Economy, by H. Sidgwick, page 250.
O n t h e s a m e p o i n t , P r o f . F r a n c i s A . W a l k e r , in h i s w o r k


M o n e y , says:
Again, it is said, it is the cost of production which determines value.
But it is ahcays and everywhere the relation of the supply to demand that determines value. Cost of production only affects value by affecting the actual or
potential supply—Money, page 245.
A n d P r o f . Jevons says:
Labor once spent has no influence on the future value of an article.—
Theory of Political Economy, page 159.
I n a f u r t h e r d i s c u s s i o n of t h i s s u b j e c t . P r o f . J e v o n s s a y s :
The great principle of cost of production fails us, because in the case of
such durable commodities as gold and silver the accumulated stock on hand
is immensely greater than the annual production or consumption.—Contemporary Review, May, 1881.

r e f e r e n c e t o t h e i n f l u e n c e of c o s t of p r o d u c t i o n o n t h e

v a l u e of t h e m e t a l s , J o h n S t u a r t M i l l s a y s :
F r o m their durability, the total quantity in existence is at all times so
great in proportion to the annual supply that the effect on value even of a
change in the cost of production is not sudden; a very long time being required to diminish materially the quantity in existence, and even to increase it very greatly not being a rapid process —Political Economy, Book
III, chapter 7.
A n d he adds:
Alterations, therefore, in the cost of production of the precious metals do not
act upon the value of money except just in proportion as they increase or diminish its quantity, which can not be said of any other commodity.—Same,
Book III, ix, 3.


Ail acute writer, F. W . Bain, M. A . , of Oxford, England, says:
Cost of production, so important and decisive as to the value of commodities bought with money, is, in the case of money itself, of no account whatever. For, any particular commodity we can do without; and so if it costs
too much to produce no one will buy it, but money must be had at all costs,
for without it no commodities can be procured at all. And be it observed,
money is comparatively permanent. It is not, like commodities in general,
consumed in the use. Consequently there is a great and even enormous difference between it and things produced to be consumed. It is, as a rule, the
rapidly perishing commodity whose value depends mainly on its cost of
production. Each time it is wanted it must be made again. But money,
once made, is there for almost any length of time, for though it wastes a
little, yet not much; its value, therefore, can be hardly, if at all, appreciably
dependent on its cost of production.—The Principle of Wealth-Creation, page

In a more elaborate discussion of this question of cost of production, Prof. Francis A . W a l k e r quotes the dictum of Prof.
P r i c e to the effect that exchanges are effected by comparing
" t h e cost price of the goods with the cost price of the g o l d "
for which they are exchanged.
author wholly dissents.

From this view the American

Gen. W a l k e r says:

What is in fact the method by which the ratios of exchange between the
piece of metal and equal quantities of [commodities] A, B, and C are determined?
Let us bring the matter down to its pure elements by supposing that in a
given community where gold has been and still is of such universal acceptability as to become the general medium of exchange, there exist a million
pennyweights of this metal; that the country itself yields no gold; that
intercourse with foreign countries is, for the time, cut off so that none can
be imported; and lastly, that gold is used solely as money and not at all in
the arts. Under such c o n d i t i o n s -

Prof. W a l k e r says—
articles will be exchanged for pennyweights of gold without the slightest reference to the cost of producing the metal. It is literally true, without the
smallest qualification, that, in the words of Prof. Jevons, ''Labor once spent
has no influence on the future value of any article." How, then, can the
gold measure the value of the commodities produced within the community v

Here Gen. Walker enters upon an analysis of the process:
The answer is, it does so in the only way in which money ever measures
values. Each producer will strive to bring to market that commodity which
will command for him the greatest number of pennyweights of gold for a
certain exertion and sacrifice on his part: and through the operation of this
principle and of this principle alone, the relative worth of all commodities
will be determined; not through a comparison of the amount of labor required
for the production of each by turns, with the amount of labor required for the
production of the gold, out through a comparison of the amounts of labor severally required to renew and keep up the stock of the different commodities themselves.—Money, Trade, and Industry, page 33.


And he adds:
It is in this way that products are diff erentiated in exchange according to
the cost of renewing the stock.

Not the stock of money, but the stock of products to be exchanged,

Hence, this author styles money " a c o m m o n denom-

inator in exchange," in terms of which denominator the mutual
relations of all commodities and services are expressed, and by
means of which, as he says, " a l l commodities are placed, one
above another, on a scale of prices."

It was for this reason that

Sir James Stewart long ago called money " a scale of equal
If, therefore, there were no money except money of gold and
silver, these authorities show that the theory of cost of production, which is made so much of in discussing the silver question,
is for the purposes of discussion of no avail whatever.
All our gold monometallists admit that if Great Britain and
Germany should re monetize silver the United States could go
to free coinage with entire safety and propriety.
becomes of the theory of cost of production'?

W h a t , then,

The cost of pro-

duction of silver would be precisely the same whether those
countries declared for its free coinage or not.
There is a feature of this cjuestion which the economists never
touch, but which, it appears to me, must be one of the first considerations to occur to a practical man.

That feature is this: If

the cost of producing silver has been so slight as to make the
profits of silver-mining higher than the average return to capital, why is it that so few have engaged in the business?
not open to all the world?

Is it

Do we not know that, from all the

countries of Europe, capital in large amounts has sought investment here?

Do we not perceive the keenness with which all

men of capital and energy search for profitable investments?
Can we, therefore, help inquiring why this field, which many
appear to think so profitable, is so neglected?
Do not their acts, Mr. President, belie their words?

If they

were not satisfied that raining investments were on the whole
and on the average unprofitable investments, should we not find
millions upon millions of dollars from Wall street and Lombard
street rushing to the mining regions for investment? But we


must do credit to the acumen of the investors of capital.
well know how and where to invest.


Instead of putting- money

into mining enterprises, they put large sums into hank stocks,
because they have observed that no matter what other industry
may languish, banks pay high dividends.

Investors also put

large sums into gilt-edged railroad bonds, because they know
that such bonds are obligations to pay fixed sums of money at a
future time, and that those sums will be paid in dollars of increasing value.
Besides, if they really believed as they pretend to believe, in
the theory that the cost of production is the element that determines the value of money, how is it possible that they can at
the same time believe, as they profess to do, that gold never
varies in value?

Do they suppose that during a period extend-

ing over hundreds of years the cost of mining gold has remained
to the fraction of a cent absolutely the same?
The separation between gold and silver does not result from
any change in the cost of production of silver, nor does it result
from any change in the purchasing power of silver money.
Neither does the enormous increase which has taken place in
the value of gold during the last twenty years, an increase of
which there is no denial, arise in the slightest degree from any
increase in the cost of production of gold.

Every man who knows

anything on the subject knows that there has been no such increase.
IS M O N E Y T H E C O M M O D I T Y - E Q U I V A L E N T




It is the pernicious theory of intrinsic value that has led to
the equally absurd idea very generally entertained that money
is the equivalent as a commodity of the other commodities f o r
w h i c h it is exchanged.

W i t h the destruction of the idea of in-

trinsic value must go also this idea of commodity equivalence.
It is persistently asserted that gold bullion does not derive its
value from the money use to which the metal is put, but from
the value of the bullion as a commodity.
This claim, though held throughout the ages, will not stand
the investigation of reason.
W e r e gold demonetized to-morrow, so enormous is the amount
of it in existence compared with the demand for commodity pur785

poses, that an ounce of it, instead of being worth $20.67, as at
present, would not be worth perhaps the one-hundredth part of
that sum.
In order to ascertain what the commodity value of gold would
be were the metal confined to commodity uses, we must suppose
it to be made entirely dependent for its value upon the demand
for it in th e arts—that is to say, we must conceive i t to be demonetized and relegated to a commodity.

In other words, let us

judge of the commodity value by the commodity use, and of the
money value by the money use.
Let us inquire what would be the quantity of gold which would
be suddenly thrown on the market as a commodity in case that
metal were deprived of the money function.
Our Treasury Department reports that the amount of gold
money in existence in the world is $3,600,000,000.
A s to the

amount which is annually withdrawn from the

money-use for the purposes of the arts and manufactures, there
are no figures which can be absolutely relied upon.

Mr. Giffen,

the statistician of the London Board of Trade, has stated that
in his belief, practically, the annual yield from the mines was absorbed for nonmonetary purposes; and in this estimate I believe
he is right.

Sir Lyon Playfair estimated the amount consumed

in the arts at not less than 75 per cent of the total annual yield.
A s long ago as 1873, Mr. W . L . Fawcett, in his interesting work
on " G o l d and Debt," made a careful estimate based on the researches of Mr. J. R . McCulloch, the distinguished English
economist, and states the then annual consumption of gold in the
arts and manufactures at $110,000,000, and the amount must have
annually increased rather than decreased.
But casuistical statisticians, who wish to show that some of the
annual yield is available as money, profess to believe that the
amount consumed in the arts is only $60,000,000 per annum.


my estimate be correct, then in case of the demonetization of gold
and its relegation to commodity purposes exclusively, there would
be on hand in the market at the time of demonetization, available
for the purposes of the arts, not less than thirty-six years' supply
of the metal.
W i t h the competition between its owners for the disposition


and sale of so enormous a sum, for commodity purposes, what
would be its value?

W h a t price would an ounce of gold bring in

the market, if there were available for purchase at any given
moment a supply sufficient to carry the world along for thirtysix years?
No one being any longer obliged to have gold in any country
of the world in order to pay debt or otherwise utilize it as
money, who can suppose that an ounce of such discarded metal
would bring $20.67?
If, however, we accept the figures of the statisticians—and
they are all devoted admirers and adherents of the gold standard—the quantity of gold used annually in the arts is about 3,000,000 ounces.

W h a t would be the value of gold per ounce for

use in the arts when there were available for that purpose at
any given moment the enormous amount of 180,000,000 ounces,
or a supply sufficient to meet all demands for the metal as a
commodity, not for two years or ten years, but for sixty years?
W e know that of wheat and other commodities there is never
more than a few months' surplus on hand at a time.

Y e t the

slightest addition to that surplus produces a lowering of the
price altogether out of proportion to the quantity of the surplus.
How trifling would not the value of wheat be, if, after taking
out the quantity needed for the current year's consumption, there
remained on the market enough to meet all demands for even
two years additional!

And even supposing that science and in-

vention should furnish a method of preserving wheat indefinitely in all its original efficiency and purity as an article of
human consumption, to what an utterly insignificant price would
it not descend if instead of two years or five years' additional
supply there were enough to meat all demands for sixty years?
But in our estimate of the amount of the metals that would be
thus available, we should be warranted in going beyond even
the figures indicated.

The estimation in which gold is held in

at least that department of the arts which contributes to decoration, and for purposes of ornament, is derived almost wholly
from the awe with which it is regarded by the great body of
mankind from the fact of its extended use as money.
what Ruskin very appositely describes as


This is

the effect upon the

Deprived of tne imperial money-use and rele-


gated to commodity-uses only, there can not be a doubt that much
of the metal now existing in the shape of trinkets would find its
way to the secondhand shop.
W h i c h e v e r of these estimates we adopt, even the least of them,
in my humble judgment, constitutes a perfect mathematical demonstration, " s t r o n g as proof of Holy W r i t , " that, deprived of
the money function, there would be practically no value whatever in gold bullion.
It surpasses my comprehension, therefore, how men can argue
otherwise—especially men who profess to be political economists with, as is supposed, a faculty for exact reasoning.
L e t us apply to the question the definition I have given of
value: " H u m a n estimation placed on desirable objects whose
quantity is limited."
There are in this definition, as I have said, two factors: Human desire for the object, and limitation of the quantity of like
W i t h gold as at present in full and universal use as money,
these two factors have full play.

As money men esteem gold,

and, considering the universal demand for money, the quantity
of the metal is limited—so limited, indeed, that no Senator asserts that there is enough of it.
Both conditions, therefore, unite to establish the present
But with gold demonetized—with gold deprived of the imperial prerogative of money—one of these factors of value would
be wanting to it.

I\o matter how highly esteemed for com-

modity purposes, it could no longer be said that its quantity
was limited.

Limitation of quantity can not be predicted of an

article the stock of which in the market at a given moment is
sufficient to supply all demands for half a century to come.




W i t h reference to the share of value which is contributed to
gold by the money use, as distinguished from the commodity use,
Mr. Macleod says:
It is in fact the peculiar qualities which render gold so useful as a currency
that give it the greater portion of its value.—Elements of Banking, ed. 1858,
page 133.

S a y s T h o r o l d R o g e r s , p r o f e s s o r of p o l i t i c a l ' e c o n o m y

at O x -

ford University, England:
The fundamental cause of value in the precious metals is their use as currency. This conclusion is not so obvious as it might appear. Up to recently
ordinary political economists have been accustomed to accept Mr. Senior's
dictum, that the measure of value in the precious metals is their use in the
arts. It is very possible that this view is still accepted, notwithstanding the
experience of the last fifteen years, during which events have occurred which
would, one might think, induce these people to reconsider their conclusion.—
Industrial and Commercial History of England,^age 324.

e x p e r i e n c e of t h e l a s t f i f t e e n y e a r s , " t o w h i c h

R o g e r s h e r e a l l u d e s , is t h e e x p e r i e n c e u n d e r t h e



tion laws by w h i c h silver ceased to have free access to the mints.
H e p e r c e i v e d c l e a r l y t h a t t h e f a l l i n t h e g o l d p r i c e of s i l v e r w a s
d u e t o t h e d e n i a l of u n r e s t r i c t e d c o i n a g e of s i l v e r , a n d n o t t o a n y
q u e s t i o n of c o s t of p r o d u c t i o n o r of s o - c a l l e d i n t r i n s i c v a l u e .


D a v i d B a r b o u r , i n h i s T h e o r y of B i m e t a l l i s m , s a y s :
Gold and silver owe almost the whole of their value to the fact that they
can be converted into and used as money If gold and silver were absolutely
excluded from the currency of the world their value would be greatly reduced, if it did not almost entirely cease to exist; and if either gold or silver were largely excluded from the currency of the world the value of the
metal so excluded would experience a very great fall. — The Theory of Bimetallism., chapter 2.
I n the same w o r k , Sir David B a r b o u r , dealing with this p o i n t
m o r e at l e n g t h , says:
The value of gold and silver is almost entirely due to their use as money
and consequently the relative value of gold and silver depends upon the extent to which the different nations of the world use these metals as currency.
If one nation after another decided to demonetize silver and to sell the silver contained in its currency, the value of silver relatively to commodities
and still more so in comparison to gold, could be made to fall to a very
small fraction of its present value.
On the other hand, if the nations of the world demonetized gold and sold
their gold, the value of gold in relation to silver would experience a very
great fall.
In short, we see that the demand for gold or silver is due mainly to the extent to which the legislatures of the different countries decide to use these
metals as money, and therefore their relative value is and must continue to
be regulated by legislation.—Theory of Bimetallism, page 34.
I n a l e t t e r t o t h e L o n d o n T i m e s M a y 7, 1881, L o r d B r a m w e l l ,
s p e a k i n g of t h e m o n e y v a l u e a n d t h e s o - c a l l e d i n t r i n s i c v a l u e of
g o l d a n d s i l v e r , said: #
Gold and silver have real and artificial values—real and natnral, as for
gilding, for use in surgical appliances.forks, spoons, and other things; artificial, for money for circulating mediums. * * *
This artificial value is much greater than the real [value]. If some sub*

stitute for gold and silver were found which could he used more advantageously as money and displace them, their exchangeable values would be
vastly less than at present. That is, if an ounce of gold exchanges for 2
quarters of wheat now anywThere, it would, if it ceased to be used as money,
exchange for much less—how much is beyond speculation.
J o h n R u s k i n , w h o t h o u g h t d e e p l y and acutely o n all q u e s t i o n s
with w h i c h h e dealt, says:
In so far as it (gold) has legal exchangeable value its worth as a commodity
is increased. We want no gold in the form of dust or crystal; but we seek
for it coined, because in that form it will pay baker and butcher. And this
worth in exchange not only absorbs a large quantity in that use, but greatly
increases the effect on the imagination of the quantity used in the arts.—
Munera Pulveris, page 83.
I n s t a t i n g t h a t t h e e x c h a n g e v a l u e , o r m o n e y v a l u e , of


" g r e a t l y i n c r e a s e s t h e e f f e c t o n t h e i m a g i n a t i o n of t h e q u a n t i t y
used in the arts," R u s k i n means that the estimation in w h i c h
g o l d is h e l d f o r t h e p u r p o s e s of d e c o r a t i o n is h e i g h t e n e d b y t h e
f a c t t h a t i t is in u s e as m o n e y , and t h a t w h i l e in s u c h u s e i t is a
universal order for goods.
In a very recent French publication on political economy, by
a p r o f e s s o r of h i g h s t a n d i n g , P r o f . G i d e , I f i n d t h e


unequivocal and outspoken declaration on this subject:
No doubt, if gold and silver were demonetized in every country, metallic
money would lose the greatest part of its value. We must not deceive ourselves as to this matter, and the present fall in silver, caused by its demonetization in some countries, only too fully proves the fact. Yet many authors do harbor this illusion, or at any rate do not put their readers on their
guard against it. Most of them seem to say that the government seal stamped
upon gold and silver coins merely states their actual value, just as the tickets tradesmen put on their goods. But the declaration that the six-gramme
gold piece is worth 20 francs is not only declaratory, but is also determinative of value. It is because the will of the legislator or, if it is preferred,
the agreement of men, has chosen gold and silver as money, that these metals have acquired the larger part of their value, and they would lose it as
soon as this agreement or this law happened to cease to exist. Aristotle,
too, had perceived this very clearly. Says he in the Ethics, book V: " I t was
through a voluntary agreement that money became the instrument of exchange. It is called nomisma (from nomos, law) because money is not a natural product, but exists only through law, and it lies with us to change it
and rob it of its utility as we will."—Political Economy, page 216.
F r o m a n y p o i n t of v i e w i t is a b s u r d t o s u p p o s e t h a t t h e m o n e y
v a l u e of g o l d i s d e r i v e d f r o m t h e v a l u e of b u l l i o n .
has been mistaken f o r the cause.

T h e effect

T h e bullion gets its value f r o m

t h e f a c t t h a t g o l d f r o m t h e m o m e n t i t l e a v e s t h e m i n e is p o t e n tially money.

G o l d b u l l i o n d e p r i v e d of a c c e s s i b i l i t y t o t h e m i n t s

m i g h t d r o p t o t h e v a l u e of c o p p e r , w i t h w h i c h , f o r u t i l i t y ( u n 785


less some new uses shall be discovered for gold; it is not for a moment to be compared.
The statement that it is not from bullion that gold money derives its value receives support from considerations growing out
of the very nature of the case.
From the earliest ages gold and silver were held in high esteem even among savag*e tribes, because of their adaptability for
purposes of ornament.

A t first, and doubtless for a long period,

exchanged as mere commodities, against other commodities,
they came by degrees, as their quantity increased, to be used as
common media of exchange.
But one of the most important functions of money came to be
the function of registering or recording* values for the purpose
of permitting men to enter into time contracts—what some economists call a "standard for deferred payments."

This was a

function which could not be fulfilled by a small supply of the
money material.

For this exceedingly important purpose not

until a vast stock had been accumulated were the metals fitted
to be clothed, in the interest of society, with the function and
office of money.

Should transactions and values be based on them

as money while yet the stock of the metals was extremely
limited, it is obvious that a slight increase of yield from the
mines in any one year would create ruinous variation in the unit
of value, so that it would be unsafe for men to enter into obligations except those for immediate fulfillment.
It was, therefore, only by very slow degrees that the system
of barter, having the precious metals on one side of the equation, gave way to the commercial system in which, from those
metals as commodities, by gradual and insensible degrees, was
evolved the system of money.

Before this evolution could be

made perfect, before the metals could have



for the money function, there would be needed, and there must
have been in existence a stock so enormous as, by its quantity,
to insure society against violent and sudden jars in the value of
the monetary unit.

This stock must have been equivalent to

the yield of the mines for a great stretch of time, probably
hundreds if not thousands of years.
It must in any case have been such a stock as, in comparison,


to have reduced to a point of utter insignificance the mere commodity demand for the metals in any one year.
Testing gold and silver, then, as commodities by the same law
of supply and demand that is applied to other commodities we
find that neither of the metals was wholly fitted to be vested
with the money function until by the enormous accumulation of
its quantity it was stripped of almost every vestige of commodity

This was the condition-precedent to the crowning of the

metals for the higher and nobler function of money, the imperial
If it be the bullion or commodity use that gives gold its value,
why do people expect the variations of gold to be less than those
to be seen in the value of other things?
It is no unusual thing to see a variation of 10 per cent, for example, in the value of wheat in the course of two seasons, 10 per
cent in the value of brass, and similar variations in the value
of other things.

W h y is it that gold should be expected to

remain steady in value if the legal-tender function has no influence?

Is it possible that throughout all the years of its pro-

duction, with the wages of labor and the price of machinery constantly changing, the cost of mining gold has remained absolutely
stationary—neither increasing nor decreasing in the slightest


W h e n the silver question is not under discussion the bankers
and their allies are only too ready to acknowledge that it is the
function and not the material that creates the value of the dollar.

Indeed, the very impalpability and intangibility of the

dollar is then set up as its principal recommendation to favor,
because it is supposed to establish the peculiar merit of the
banking system.

W h e n engaged in lauding the advantages of

that system they maintain that bank deposits are money, although having no more material existence than the ink with
which the entries are made on the books.
Bank deposits are not concrete things.

If anything can be

called intangible and immaterial, it is surely an entry in a book.
W e know that the bank deposits of the country exceed several
times over the money in the country, especially if we regard as


money only the things having what the bankers c a l l ' ' intrinsic
value." Y e t there are some books on political economy by writers of respectable position that treat such deposits as money.
Prof. Sidgwick says of them:
In such a country as England, where deposit hanking is fully developed
and payment hy checks customary, the greater part of such money must
consist of what has been called " m o n e y of account," that is, of bankers'
liabilities or obligations to pay in coin on demand, not " embodied " or represented otherwise than by rows of figures in their books.—Principles of
Political Economy, page 233.

Hence it appears that when the bankers can make a profit on
dollars, they are willing that the dollars may be immaterial and
intangible; but the dollars on which they can not make profit,
the dollars in the hands of the people, must have


No matter how numerous the dollars on the books of

the banks; no matter how intangible or immaterial, so long as
the banker is receiving interest oil them and they yield him a
revenue,although their so-called "intrinsic v a l u e " b e no greater
than the little speck of ink necessary to make the entry and the
equally little speck of paper on which the entry is made, they
are lauded as equal to the best dollars.

They are even declared

to be better dollars than the dollars of so-called intrinsic value.
Sycophantic writers and so-called statisticians fill the columns
of the press with articles to show how near perfection our money
system is, because, as they declare, it is no longer necessary for
it to have an existence outside the pages of bank ledgers.


the moment the silver question is under discussion all these admissions are ignored, even wholly denied, and intrinsic value in
dollars is insisted on as an absolutely essential factor of money.
Consistency is not a jewel for which the bankers and their
friends have any special regard, except in so far as it ministers
to the pecuniary profit of the banks.
The theory of intrinsic value comes to us from the dim ages
of the past, and is indebted for its survival to that blind and unquestioning regard for dogmatic authority which characterized
the childhood of our race.

Science has discarded some of the

errors of those times; reflection has compelled the rejection of

But so slowly do the forces of truth operate through

time that we find the President of the United States, adopting


this solecism, taking up his position as a student of political
economy with those who lived and wrote in the period when
men believed the universe to be confined to the planets constituting our solar system, and that of those t h » earth was the
The geocentric theory made as hard a fight for existence as
the theory of intrinsic value has made, but in the light of advancing civilization it was forever discarded.

Perhaps I go

too far in this statement, as we have lately had a pronunciamento
from Brother Jaspar reviving it in the somewhat celebrated
declaration that " t h e sun do move."

I would commend to the

attention of the President the following statement of one of the
most distinguished of economists, one who has distinctly declared that there is no such thing as intrinsic value.

He says:

In tlie physical sciences—authority has greatly lost its noxious influence. Chemistry, in its brief existence of a centurj^, has undergone
three or four complete revolutions of theory, In the science of light, Newton's own authority has been decisively set aside, after it had retarded for
nearly a century the progress of inquiry. Astronomers have not hesitated,
within the last few years, to alter their estimate of all the dimensions of
the planetary system and the universe, because good reasons have been
shown for calling in question the real coincidence of previous measurements. In science and philosophy nothing must be held sacred — The Theory
of Political Economy, by W, S. Jevons, page 266.

Nothing is sacred, Mr. President, but truth.

It is the mission

and the merit ot civilization to discover truth in all departments
of human endeavor, and when discovered to maintain and perpetuate it.

In none is this more imperative than in the depart-

ment of money, the department which has to do with the measurement of human sacrifice, with the adjustment of the equity
that forms the basis of all equities.
The fundamental idea at the bottom of the theory of intrinsic
value is that money is not a societary instrumentality, but an instrumentality appertaining to man as an individual, standing
single and alone, without knowledge of or participation in society or civilization.

In accordance with this idea it is said that

in exchanging a commodity for money men must get as money
another commodity which, in and of itself, shall be the equivalent of the commodity given in exchange.

In other words, it

is contended that the process is precisely as if the money and



the commodity were simply the commodity equivalents of each
This implies that society as an aggregation, society as contradistinguished from the individuals or separate units composing
it, is no factor in civilization, and that a thing which subserves
an indispensable societary function, a thing without which it
would be impossible for civilization to exist or for the powers of
man to develop and expand, becomes the object of no greater
esteem by reason of performing the societary function than it
would be if it were the possession of solitary man; of man as the
wild and imbruted denizen of the primeval forest.
In a word, the theory of intrinsic value is based on the idea
that a thing without which it would be impossible for men to
dwell together in unity—the very crown and symbol of their
progress from barbarism to civilization —can have no value
which the individual man is bound to respect.
This is contrary to the whole spirit of institutional existence.
It is contrary to all the facts on which our civilization is based
and all the inferences derivable from that civilization.
Let us examine for a few moments the process

by which

money came to exist.


The idea of money arose insensibly out of the custom of barter.
A s commodities came to be exchanged for one another some
were naturally designed for immediate consumption; others to
be retained until necessity should compel their use.

Of the two

classes of commodities indicated, those which should eventually
become general media against which all other commodities might
be exchanged would naturally be such as could be longest retained without deterioration.
A long list of materials have at various times in the history of
the world been used as money.

It has always been a question

for separate nations or peoples according to the exigencies of their
own situation to decide for themselves as to what material would
most advantageously serve them for the purposes of money. That
which was suitable for the people of one country might not necessarily be suitable for those of other countries.

In primitive

times it is noticeable that the materials selected by each people


were always such as were not only plentiful when and where selected, so as to guard against present deprivation of money, but
being natural products of the country, either indigenous to the
soil or resulting from the prevailing occupations of the people,
insured them against a prospective deprivation of money through
tribal onslaughts or the sinister machinations of enemies.
This is a point of great importance in the history of money as
indicating an intuition among the masses of mankind, in all ages
and countries since the origin of civilization, that the material
of money should be not only abundant, but continue through
time to be abundant in the place or country in which it was thus
selected to fulfill the monetary function.

In this intuition we

perceive indications that for the purpose of knitting themselves
together in the great web called society, men were thus early
reaching out after something more than a mere temporary medium of exchange—that they were aspiring to the discovery of
some method of estimating or computing, and as it were recording. in terms of this common denominator the mutual sacrifices
involved in their exchanges, so that they might no longer be
confined to the transactions of a day—no longer restrained by
the limitations of b a r t e r - so that they might dispense with those
limitations and restraints and avail themselves of the benefits
of time contracts, without at the same time parting company
with equity and justice.
The desire to make preparation for the future constituted the
first definite aspiration toward civilization.

T o enable this as-

piration to be realized, it was necessary for men to provide some
method by which they could arr nge for an exchange to take
place, as it were, by installments, so that a transaction begun today might remain in abeyance, to be completed next week or
next year, as might be agreed upon, without involving loss to
either of the parties to the exchange by reason of its division
into two or more transactions instead of being completed in one.
W h i l e mankind was still occupied in hunting, it is manifest
that the flesh of animals captured in the chase would serve for
immediate consumption, while the hides, dried and retained in
the form of fur or leather, would serve for a future exchange.
W h e n hunting ceased to be the principal occupation, and men


came to settle into the pastoral condition, in which they tended
ilocks, the most convenient media of exchange came naturally to
be live sheep and cattle—those being then the most numerous
and most readily transferable, and not so liable as other commodities to deterioration of quality.
In the poems of Homor oxen are repeatedly referred to as
something against which other commodities were exchanged,
and also as an expression or estimate of value—what has come to
be denominated a measure of value.

Thus the value of the arms

of different warriors were estimated in oxen—those of Diomed
being held worth nine oxen those of Glaucus one hundred.
In the agricultural stage of civilization which succeeded the
pastoral, different products of the soil fand, in maritime countries, of the sea) were used as money.

In India, rice: in China,

tea; in various parts of Europe, wheat, barley, and oats; in Iceland, dried fish; in Norway and Greenland, seal skins and blubber; in the countries surrounding the Mediterranean, olive oil—
an article very plentiful in production and consumption in those
parts, and having the advantages of durability and divisibility.
In Central America different kinds of nuts were used as money;
in Mexico, coca beans.
In the Colonial period of North America various products of
agriculture were not only used as general media of exchange,
but in time came to be legal tender.

In several colonies tobacco,

corn, and a variety of other articles, including the sjdns of
beavers, were lawful tender in payment of debts.

In Newfound-

land dried codfish was used.
T h e benefits to be derived from a circulating medium in aiding the civilization of man was illustrated even in the earliest
period of the Colonial settlements.

The new settlers, in their

dealings with the aborigines, found a tribe on Long Island
which proved to be far more civilized than those of other parts
of the country.

Investigation as to the source of their superi-

ority developed the fact that while other tribes had no money,
and relied on barter for the satisfaction of their wants, these
Long Islanders had certain small cylindrical shells which they
polished to a high degree of luster, and, by drilling


lengthwise, formed them into beads, which they used as money,


T h e beads they strung upon threads and made into belts.


form of money was what was known as wampum, of which there
were two qualities, black beads and white—one of the- black
being held to be equal to two of the white.

The colonists, who

had brought with them very little gold or silver from Europe,
utilized this wampum as money in their dealings with the savages; and in Massachusetts it finally became legal tender even
for the planters.

" It was good money," says Gen. W a l k e r .


was better money than articles of food or fur, because, by not
having such immediate utility as a commodity, it was not so
likely to be suddenly withdrawn from the money use.
In all instances the articles selected to perform the function
of money were such as had at first been exchanged by barter, as
commodities, against other commodities, and by degrees came
to be used as articles against which all others were exchanged.
Commodities that were not readily perishable, thus insensibly
developed into money.

But while infinitely better than bar-

ter, such commodities could never be relied upon to serve in
the most efficient manner all the purposes of money, owing to
the fact that notwithstanding their comparatively nonperishable
character they were so useful as to render society constantly exposed to the danger of being deprived of money by reason of the
consumption (and consequent destruction) as commodities of the
very material constituting the money of the community.
Thus, where articles of food were used as money, it was impossible to say how long they would be permitted to play the
monetary role.

In severe climates, in which furs were money,

there was no surety how long they would be allowed to remain
in the monetary condition.

No complicated chemical or me-

chanical process being necessary to turn them to commodityuse, a piece of fur which in the morning was money, might before evening be an article of apparel.

Hence with the develop-

ment of the art of mining it was perceived that the metals offered better media than any that had been theretofore used as
materials of money.
While other commodities answered sufficiently the purposes
of exchange in the primitive condition of society, whether as
instruments of barter destined to immediate consumption or even


us media of exchange when both sides of a transaction were to
be made on the spot, they were not so well adapted as the metals
to be instruments of so-called measurement or expressions of
value, when on one side nothing was immediately needed for
consumption, and when, therefore, one-half of the exchange
was necessarily relegated to a future period.

The more useful

and necessary an article was as a commodity, that is to say, the
more important it was as an article of food or clothing for the
comfort and sustenance of man, the greater the probability that
it would shortly be consumed, and thus be removed altogether
from the monetary use.
As society advanced, although still restricted to primitive labor,
people came to have a larger variety of occupations.


a greater number of exchanges became necessary, the disposition
to accumulate—to provide for a rainy day—became more and
more developed; and men did not at once consume all the products of their labor.

A s wealth grew and exchanges multiplied,

it became more and more difficult to retain without deterioration the articles exchanged.

Hence a great increase took place

in that class of transactions which, on one side at least, did not
demand the immediate consumption of the articles forming the
subject of exchange. W i t h a constantly gro wing division of labor
those who were producers were making more of one class of articles than they ccVuld themselves either consume or dispose, of;
other men therefore became traders, whose business it was to
lay in a stock of articles for future exchange.
Some instrumentality was then needed by which the degree
of mutual sacrifice incurred by the parties to an exchange could
be estimated, or, as it is usually called, measured, and a definite
expression or record of such measurement secured.

How should

such an instrumentality be secured?
A l l classes of objects or materials that before the birth of
mining could be accumulated in sufficient quantity to serve for
money were in the nature of the case more or less perishable.
I t was only with the discovery of the art of mining that it was
possible to effect any great degree of accumulation of material
adopted for the money use.
T h e indestructibility of the metals and their universal accept785


ability for purposes of ornament pointed to them as the best materials for accumulation.

Gold and silver, by their ready divis-

ibility, noncorrosiveness, and susceptibility to luster, naturally
lent themselves to the process.

Their high esteem constituted

them in all parts of the world the prime articles of barter, against
which any other articles at any time could be exchanged.
In the slow process of the ages the metals were being gradually withdrawn from the commodity use and applied to use as

During this period the demand for them for purposes

of ornamentation and as commodities became insensibly merged
in the demand for them as money.

Notwithstanding the uni-

versality of the desire for ornament there is a desire more universal and more urgent—the desire for articles of absolute necessity, for such as will sustain life.

In the form of commodities

the utility of the metals was limited to the satisfaction of one
want and that not an indispensable want, but a want likely to be
experienced only after indispensable wants were supplied, a want
felt most among the rich or the well to do.
W h e n they became money instead of supplying one want they
would supply all wants.

Their use instead of being confined to the

rich would extend to every class of the community.

He who

should possess them would possess not merely an ornament, he
would possess all thinqs; not merely a ring to adorn his finger
(a trifling want at the best), but clothing to protect him from
the inclemencies of the weather, a bed in which to rest, a house
in which to find shelter (wants of the most material character);
above all, food to sustain life 4 and what will not a man give for
his life!
A s the quantity of the metals, then, increased, the very act of which by degrees was rendering them of less and ever
lessening value as commodities, was at the same time, and by
the same process, rendering them valuable as money.

So that

the demand for the metals for purposes of ornamentation became
insensibly and by degrees merged and absorbed in the greater
and more exigent demand for them as money.

And although

the process was a gradual one, the time finally arrived when,
owing to the prodigious stock on hand, they no longer owed to
the commodity demand any portion of their value.

But this


took no value from the metals.

It was a mere transference, by

slow and imperceptible degrees, of the cause or source of their
By this transference the metals lost no dignity; on the contrary. they enormously gained dignity.

It would be an impeach-

ment of the judgment and penetration of mankind to suppose
that it could more highly esteem or value an article for the degree of utility which it may be supposed to possess in the tawdry
trappings of apparel—a function of mere ostentation, in which
the king may be emulated and outdone by the clown in the circus—than for the immeasurably greater degree of utility which
it must possess for mankind as money—as the great instrumentality which delivers men from savagery, admits of their aggregation in communities, renders possible a division of labor suited
to the aptitudes of each and the needs of all, develops skill of
hand and brain, feeds the hungry, clothes the naked, shelters
the homeless, educates the ignorant, uplifts the humble, refines
the gross, and gives heart and hope and happiness to all who
are weary and heavy laden.
In all of these capacities money not only possesses value, but
value so inestimable that civilization could not exist without it.
Is not this the test of the highest value?

W h a t difference does

it make what the reason of its value is, if we only recognize that
it has value, and that changes in its value are fraught with most
serious consequences, whether for good or ill, to the human
T h e service which money performs is one wholly of a societary

W i t h o u t a group, without an aggregation of people y

there is no office which it could


T o a man in isolation it

would be utterly useless; in fact for him it could not exist.
Having no one with whom to exchange anything there would be
no necessity for any instrumentality of exchange.

Having no

one to whom to give, or from whom to receive, he would have
no need to compute or record the degree of sacrifice involved in
any of his labors.


Money is not, therefore, a natural production, but a creation of
society, and can be created only by society.

The metals are


natural substances, that is, they are products of physical nature.
Money is not such; not an emanation of the earth, but of the
mind of man, not the work of his hands, but of his brain.


sentially money is a function rather than a material, an intangible yet most palpable and mighty power, as superior to the
material which clothes it, the agent endowed with the money
function, as the spiritual nature of man is superior to his physical nature.

The relations are more nearly parallel indeed than

upon a cursory glance would appear.
In its essence money can not be a material thing any more
than a function of the brain can be so.

As civilization develops

functions are differentiated from the things with which, in the
rude original of society, they have been identified.


better illustrates this than a glance at the origin of civil society.
A s men emerged from savagery, the strongest among them,
w h o in personal combat subjugated all others in his environment, became ruler or governor of the community.

He ruled

by r i g h t of animal strength.
Thus in physical force had government its origin.

But as civ-

ilization advanced and the tribe of twenty or fifty developed into
the nation of millions, one man could no longer cope with his

One was not equal to all.

W h y , then, did society

tolerate him; why did it retain him as governor?
for his physical qualities?

By no means.

W a s it still

Society had made a

great discovery—namely, that the function was more important
than the person. However unwelcome might be the individual,
even though despotic, he fulfilled an indispensable function,
and as society became stronger, and the ruler, as an individual,
relatively weaker, the function did not lose, but on the contrary
gained strength.
N o country in the world better exemplifies this than the
United States, in which the person who presides over the Government is only the principal servant of the people, and (except
when the silver question is under discussion) is recognized to
be merely a servant.

From age to age, through unbroken cen-

turies of time, the function

has been recognized as indispensa-

ble to the existence of society.

Whatever the name, nation, or

title of the person, he takes his place at the appointed time, in


the interest of society, and although, looking to the traditions
of a distant past, he may ascribe his elevation to inherent qualities of his own, yet the philosophy of history should admonish
him that he is mistaken.

And when, in time, the inevitable call

comes, and the final accounting is made, he passes away and his
place is filled by another.
never dies.

The individual is dead; the function

" The king is dead; long live the k i n g . "

A s men began to reason it was seen that without the existence
and exercise of this function of what in monarchies is called the
k i n g , and in republics the chief magistrate, the social relations
could not endure; men could not, so to speak, cohere in communities, and would again be relegated to primitive individualism—
in other words to barbarism.

W i t h o u t this function society

would be separated into its component elements—to individual
and fragmentary existence, to isolation and impotence.
hazards this was to be avoided.
to be fulfilled.

A t ail

Not thus was the destiny of man

So the institution of government, which, in the

crude beginning, was created by an individual from motives altogether personal, and by no better right than that of the strong
over the weak—was continued by society as the very quintessence of its own existence.
But what a transformation in the agency by which this is accomplished'

The work of the bludgeon, even of the bullet, is

performed by the ballot—how much better it is not necessary
to suggest.

The material of the bludgeon may be stronger than

the material of the ballot, but the function of the ballot is as
strong as that of the bludgeon.
It is, after all, for their functions that all things are esteemed,
f o r their services to mankind that all things are valuable.
Indian gets a bright new rifle from a passing trader.
most beautiful thing the Indian ever saw.


It is the

He understands fire-

arms, and can use them well, but he has never seen anything so
beautiful as this.

He prizes it beyond anything he ever pos-

Not only has it great beauty, but the trader informs him

that it has great " intrinsic value."

It is of the utmost service

to the Indian in procuring food and for self-defense.
gets out of order.

He can not use it.

o u t food and without defense.

One day it

He is obliged to go with

It has lost none of its weight, its


polish, its material.

Its so-called " intrinsic value " still exists.

It is simply incapable of performing its function, and it is
wholly valueless.
In a few months, the trader, repassing that way and finding no
serious derangement in the parts of the rifle, is able in five minutes to restore its function.

Immediately it is as valuable as be-

fore, yet there has been no addition to its " intrinsic value."
T h e only change is that its function has been restored.


factor was it that contributed most to the value of the rifle, the
material of which it was composed or the function which it

W h i l e it was out of order—while deprived of its func-

tion—the rifle was no better than so much old iron, worth perhaps a cent a pound.

W h e n the function was restored I suppose

it will be said that again it had great " intrinsic value."
Let us take another illustration:
Suppose a great painter to produce a picture which extorts
favor from the critics and commands the admiration of the world
of art.

The multitude flocks to see it.

the picture has been sold.

Shortly it is stated that

It has been bought by the governors

of the academy, to adorn one of the beautiful galleries of that
beautiful structure.
for the picture.

The question is asked how much was paid

No one knows; but it must be a great sum.

W h a t are the elements that determine the value of a picture?
Is it the labor involved or the length of time taken to produce

Some men, good artists, might work hard for a lifetime

without rivaling it.

Is it the value of the pigments consumed

or the brushes used in its production?
first cost of the canvas?
of its value?

Not at all.

Surely not.

Is it the

W h a t , then, is the source

T o answer this question we must ask, " W h a t is

the function of a picture? W h a t office does it fulfill? W h a t service does it render?"

Is it not to gratify the artistic taste?


whatever degree it serves that purpose the picture will have
value without reference to the labor bestowed upon it, the
length of time taken to produce it, the cost of the colors used in
the embellishment of the canvas, or the cost of the canvas itself.
W o u l d anyone say that the perfect performance of the function is not sufficient to give value to the picture?

It can be

nothing else, inasmuch as the purchaser does not expect to put


it to any use except the gratification of the sense of sight.

Is it

not enough that by its beauty it contributes to the delight of the

W h a t other function could a picture perform?

If i t

did not perform that function to the degree that it does would
its value have been so great, even had the painter expended on
it twenty times the labor and had the materials cost a thousand
times as much?
Everything, then, in its place; everything to its use.
beauty of this picture is not a concrete thing.


It can not be han-

dled. The canvas may be handled, the pigments may be touched,
but the beauty is an immaterial and intangible quality.

Y e t the

beauty—the intangible and immaterial factor—not the concrete
object on which, nor the concrete instrumentality by which the
embellishment is effected, determines the value of the picture.
So it will be found, as I have said, as to all things that aid the
advancement and progress of man.

For him, whatever the ma-

terial composition may be, the essence of the article, and the
source of its value, is and must always be the use it subserves, the
service it performs, the function it fulfills.
One further illustration as to the importance of the function
in contradistinction from the material by and through which it
may be exercised.

Suppose we bring together in a large recep-

tacle 96 pounds, by weight, of water, 10 pounds of pure glue, 3
pounds of white of egg, 34 pounds of fat,

pounds phosphate of

lime, 1 pound carbonate of lime, 3 ounces of sugar and starch, 7
ounces fluoride of calcium, 6 ounces phosphate of magnesia, and
a little ordinary table salt.

Now, what have we?

and fifty-three pounds of chemical ingredients.

W h a t is their " market value "?

One hundred
W h a t are they

Excluding the water,

which may cost nothing, they can be bought in a village store
(combined drug store and grocery) for $2 or $3.
In this list we have all the constituent elements that, taken together, constitute the average physical man; weight 153 pounds
From a material point of view the man is complete.
he not arise and walk?

W h y does

W h a t is it that constitutes the differ-

ence between this body of matter and the man of whom it is the
corporeal equivalent?

The function of life!

In comparison with

the distance between that mass of inert material and the living;


man of the same weight, it is not too much to say that the distance from the earth on which we dwell to the farthest of the
fixed stars is but as the elemental point—which geometry declares to have neither length, breadth, nor thickness.
However necessary then a material may be as the bearer of a
function—the instrumentality by which it is given effect—it is
not the material

that gives value to the function, but the func-

tion that gives value to the material.

Considering the function

which money subserves, can it be necessary to supplement with
commodity value (a value derived from a trilling and frivolous
use) the far nobler value, which, in the nature of the case, must
be conferred on the material by the imperial and unapproachable money function?
For men in the societary condition this function is well described by Hobbes in his Nutrition of a Commonwealth.


characterizes it as a measure—
by means of which m e a s u r e -

he says—
all commodities, movable and immovable, are made to accompany a man to
all places of resort, within and without the place of his ordinary residence,
and the same passeth from man to man within the Commonwealth, and goes
round about, nourishing as it passeth every part thereof, insomuch as this
concoction is as it were the sanguinification of the Commonwealth. * * *
By concoction I understand the reducing of all commodities which are not
presently consumed, but reserved for nourishment in time to come, to something of equal value.

W o u l d time permit, a further consideration of the essential nature of money would but strengthen the demonstration that the
intricate relations of society, which, at every turn, cross and interlace and superimpose, can only be maintained in all their
vigor and efficiency—in all their harmony and beauty—in all
their strength and complexity—by means of money.

W h a t heat

is to the physical universe money is to the universe of industry
and commerce.
of human effort.

It is the great resolvent and analyzing agency
A sufficiency of it maintains the warm glow of

life in all parts of the system; an insufficiency chills the business
currents, and if the insufficiency be progressive, results in the
congelation of all energy.
In rendering possible a division of labor, by means of which
men become skilled in the separate departments of industry and
even in special lines of each department, money divides and sub785


divides all things into infinitesimal fractions and renders the
exchange of each fraction as practical and as advantageous as
the exchange of the integral articles of which these fractions
form a part.
Aristotle well understood this function of money and well expressed it in the following paragraph in the Ethics:
Intercourse takes place between people having different objects of desire.
In order that they may be exchanged with each other it is necessary that
they should be compared, for which purpose money came forward, and is as
it were a medium, for it measures everything, both the excess and the defect; as, for instance, how many pairs of shoes will be equal to a house or to
food; for if this is not done there will be no exchange or intercourse. All
things, therefore, must be measured; but it is, in truth, want—

That is to say, demand—
which holds all things together, for if persons wanted nothing from each
other, or not equally, there would be no exchange. Money, then, has been
made, by agreement as it were, a substitute for demand, and is so called
because it exists not by nature but by law. and it is in our power to change
it and make it useless for the purpose. If it were not possible to exchange
there would be no commerce. If a man requires nothing at the present
time money is, as it were, a surety to him for a future exchange that it shall
be made when he wants it. But money itself is not always of the same value,
but yet it has more tendency to remain fixed, wherefore everything ought
to be appraised, for so there will be exchange. Money, like a measure,
makes things equal; for if there were no exchange there would be no intercourse, nor any exchange if there were no equality, nor any equality if there
were no common measure. In truth, it is impossible that things differing
so much should be commensurate, but for practical use it is sufficiently possible. Money makes all things commensurable, for all things are measured
by money.

T h e frequent references of Aristotle to money as a " measure,"
his saying that it 'k measures" everything, and that it makes
t h i n g s " equal, "show that even in his time money was well understood to be rather a measure of value than a mere medium of exchange, and that its greatest function was as such measure.
However useful as a commodity might be the material of which
it was composed, it was impossible for it to be so valuable for any
commodity-use as for that supreme use which consists in measuring and adjusting the mutual relations of men in the work of
producing and distributing wealth, by which not only is life sustained but by which the physical, intellectual, and moral development and elevation of man is made possible.


In the ninth chapter of his history of the Decline and Fall of
the Roman Empire the historian Gibbon compares the invention


of money with that of letters, and adds that both of these institutions, b y g i v i n g a more active energy to the powers of human nature, " have contributed to multiply the objects they were designed to express."
Nothing can be more correct than this statement.

No inven-

tion of man, with perhaps the single exception of the invention
of letters, is to be compared with that of money—if money may
be called an invention.
The indications of history are that money preceded the invention of letters; for in all the oldest writings that have been discovered money is mentioned.

It is certain that letters could

have b en of but very limited utility to men until they had learnt
to use some article for money.

Next after spoken language,

money is the great instrument of association.

Without it, men

would have found difficulty in achieving such a degree of association as to invite or demand the invention of letters.
A s without some considerable development of language men
must have remained savages, so without the invention or evolution of money they could have lifted themselves but little above
the savage condition.

As Gibbon says, both money and letters

have contributed to multiply the objects they were designed to

A l l thinkers agree that language is not a mere instru-

ment for giving expression to thought; much more than that, it
is also an instrument for the development—the creation—of
W i t h o u t the faculty of " thinking out " a subject by the differentiation or modification of old words, or the invention of
new, the powers of the human mind would be torpid and inert,
The function of language, therefore, in the advance of manhas been to supply the tools with which to analyze and synthesize thought, to subdivide it into its component elements—its
separate ideas—and to arrange or rearrange thosa ideas in orderly sequence and juxtaposition.

Thus only could the great

chasm between concrete things and abstract conceptions have
been bridged.
But the work of money even in these respects was hardly inferior to that of language.
of man have been extending.

Since the dawn of creation the wants
The satisfaction of physical wants


begets mental wants, which in turn operate as incentives to the
further increase of the range of wants both physical and mental.

Man may be distinguished from the remainder of creation

by describing him as the unsatisfied animal.

His wants are in-

That which was yesterday the goal of his ambition is

to-day but the starting point for some new want.

It is the para-

dox of his many-sided nature that it finds repose only in eternal activity.
T h e tools which language has supplied to man for the development and multiplication of thought, money has supplied to him
for the development and multiplication of things—without which
thought could not be.
T h e absence of all means of specialization, and of the power
of training and developing aptitudes among men, would constitute society a gathering of languid, dronish,and unaspiring people, scattered in isolated hamlets, remote from each other, and
incapable of any high degree of civilization.
In contradis tinction from a society conceivably without money,
we may point to the marvels of the nineteenth century.


marvels, however, in my opinion, fall very far short of the
achievements with which mankind could now be credited had our
philosophers, statesmen, journalists, and so-called financiers devoted to the subject of money a tithe of the attention that they
have devoted to some of the minor considerations of social progress.
W i t h the advancement of man in the subordination of the
forces of nature, it must, to the reflective mind, seem amazing
that every few years—and those years recurring with remarkable regularity of periodicity—there should be a crash in which
the entire body of the arts and industries of mankind is brought
to the ground, as if we were still in the initial stages of civilization and knew not how to preserve that which we had gained.
T h e r e can not be a doubt that this results from the total insufficiency of the money supply to transact the enormously increasing business of the world, yet we find the demand for gold
constantly increasing; Austria, for instance, with its population
of forty-one millions having, by the act of August 2, 1892, gone
to the gold standard, and even Russia, which does not intend


to g o to it, taking out of the monetary circulation of the world
and locking up in its war chest nearly $500,000,000 of that metal.
Y e t notwithstanding the rapid increase of population and commerce and industry all over the world and especially in the
United States, we are told that we must enter into a contest for
gold with the countries of the Old W o r l d , and that without
having made any agreement to do so, we must pay out gold
upon demand to every Austrian broker and speculator who can
make a little commission by gathering up the money of our country and sending it away; and that at the same time that we are
thus losing one form of our money, we should not be permitted
to have an equal quantity of any other form of money to take its

The gold-standard men tell us that if there should be a

premium of even 1 per cent on gold the silver money of the country—notwithstanding that it is legal tender for all debts, public
and private—would fall, or as they call it would " slop " to the
bullion value of the silver that is not coined—that portion of the
metal that is denied the imperial and all-important function of
money; and this they call the natural or " m a r k e t " value of


Here is a piece of silver bullion (exhibiting it)—a piece of
metal not coined, and therefore not having the legal-tender
function conferred on it by law.

Suppose I should offer it for

sale, what would be the demand for it?

Inasmuch as it could be

used only as an ordinary commodity, I might travel over the
entire city without finding anyone who would want it.

Y e t the

price it would thus bring, the price arising from a demand for
only one purpose—and by only three or four persons in an entire
city—is the value which the gold-standard Senators say that silver would have if the demand were increased to so enormous an
extent as to make it a demand for all purposes—to make it a demand not by a few hundred men in the entire country, but by
every one of the 67,000,000 inhabitants of the United States.
Suppose the Government should put its stamp on this piece of
metal that I have exhibited and make of it a piece of legal-tender money, would not a transformation be effected?

W o u l d it

not be transmuted from an inconsequential thing—a thing that



hardly any one would need—into a thing of supreme importance
which no one in the country, however independent and selfsustaining, could do without; yet these economists around me
tell me that the value of that piece when it represents a demand
for all things, an exigent and inexorable demand upon which life
itself depends, should be measured by its value when it represents a demand for only one thing—a single commodity—which
like any other commodity could be readily dispensed with.
Mr. G R A Y .

It does not make any difference as to the quan-

Mr. JONPJS of Nevada.

T h e quantity of money, other things

being equal, as I shall show in the course of my remarks,
the value of money.


Nobody has ever successfully controverted

that, and the authorities all admit it.

No Senator on either

side of the Chamber denies the proposition that it is the number
of units of money (dollars, francs, or pounds sterling, as the
may be) in circulation in a country that fixes the value of each
unit in that country.
T h e demand for money is universal. W h e n people want money
it is not particularly gold that they want; they want something
that has general purchasing power, something that is a ticket of
command for all things.
Mr. G R A Y .

Could it not be done with copper?

Mr. JONES of Nevada.

Undoubtedly; but there is too much

copper; that metal has never been admitted to unrestricted
coinage because there is too much of it; while silver has from
time immemorial had unrestricted access to the mint, and there
is not, and never has been, too much of it.

The world has be-

c o m e accustomed to the coinage of all the gold and all the silver
yielded by the mines and there is no necessity for the abandonment of that plan.

It has been followed for thousands of years,

and of both together there has never been too much.
Mr. H O A R .

W i l l it disturb the Senator from Nevada if I ask

h i m a question?
Mr. JONES of Nevada.
Mr. H O A R .

Not at all.

I should like to ask the Senator, if his theory be

true, then why he asks Congress to incur the expense of using
several hundred million dollars' worth of silver coinage, what785


ever the cost may he, by taking- a material which costs 65 cents
for every dollar instead of making our dollars out of a material
like copper or leather or brass, or something of that kind, which
does not cost one-tenth the amount?

W h y are we to expend so

many hundred million dollars for silver when we can get something cheaper that will answer the same purpose?

Mr. JONES of Nevada.

Because the belief of a majority of

the people of this country has been in what has been called the
automatic system, a system not regulated by legislation; and the
creditors of the world, the holders of the bonds of the world r
including of course the creditor classes of the United States,,
are always vehemently against government interference with
money, except when it is getting cheaper.
objection is to silver.

A t this time their

Forty years ago their objection was to

If by any chance gold should again become plentiful, they

would again insist on its demonetization.
In 1848 a great discovery of gold was made, and the most
learned of scientists, in the interest of the bondholding classes
(those who are now, in my judgment, attempting insidiously
to enslave the world), wrote endless essays bewailing the disadvantages to result to the bondholders and owners of public
debts by reason of the beneficent discoveries in California and

They advocated as to gold then what they advocate

as to silver now, that it should be eliminated from the category
of the automatic theory, which from the earliest period meant
the coinage of both gold and silver at a relation established by
law or mint regulation.

In the interest of this class, Germany

actually demonetized gold in 1857.

In no instance in the his-

tory of the world, when one or both of the metals has been
getting dearer, have the creditor classes l^pen heard to favor
governmental interference with the automatic system; but on
the contrary, they have denounced all such interference as an
interference with natural law.
But no sooner did they find one of the metals—whether gold
or silver—becoming a little cheaper by reason of increased production, no sooner did they see a prospect of losing the unearned


increment which by reason of the almost constant increase in
the value of the monetary unit they had been receiving, than
they reversed the entire policy of history and—for example, before the French monetary commission of 1869—declared in favor
of governmental interference with the automatic theory, with
what they had theretofore c a l l e d ' ' natural law "—even going so far
as to declare that as governments control the standard of money
they ought, so far as possible, to assure its value—by value meaning of course purchasing power.

But without reference to the

interested contentions of the creditors, the people of this country
are, I believe, in favor of the automatic theory 3 provided it is to
be consistently and impartially carried out.
Mr. S T E W A R T .

W i l l my colleague a little more fully ex-

plain what is meant by the automatic system?

A good many

people who may read his remarks when in print may not know
the precise meaning of the term.
Mr. JONES of Nevada.

The theory is that by depending on

the yield of the mines for the supply of the material from which
money should be made there would be secured what has been
called an automatic or self-regulating method of determining the
quantity of money.

Under that system by which, when carried

out in its integrity, both metals were used, creditors and debtors alike took their chances of a greater or less increase in the
money volume and of their being affected injuriously by one
change or the other,

By confining the money used to a single

metal the creditor is eliminated from the risks of the partnership and that which in the case of the debtor was but half a share
in a risk is by the change turned into an entire certainty of loss,
while the creditor is sure to gain.
I t is quite probable that if the yield of both metals should be
fully availed o f for money purposes all classes in this country
will be willing until such time as the mines shall fail to yield a
sufficient supply of both for the purposes of the world's money,
to continue to trust the regulations of the money volume to the
limitations which the rude obstacles of nature oppose to the production of the metals, rather than confide that function to the
action of legislation.
Senators have stated here that they are bimetallists.

The dis-


tinguished Senator from Massachusetts [Mr. HOAR] in a most
eloquent speech said that those who agreed with him were bimetallists and wished both metals to be in circulation at one
time, while we on our side, he said, were silver monometallists.
But, Mr. President, if there be enough of one metal, why have

If both can not be made to circulate at the same time on

account of the scarcity and therefore the increasing value of
one, in consequence of which increase it leaves the country, I
am in favor of having the one of which there may be a sufficient
The question is not whether we shall have a white or a yellow
metal upon which to put the stamp of the Government; the question really is, shall we have a quantity of money that will maintain justice between debtor and creditor in the matter of deferred
payments—a feature not only of great but of surpassing importance.

Mr. President, justice is in my estimation much more

sacred than gold.

W h e n it is said that we should have a dollar

that will be at a parity with gold, I reply that we might better
have a dollar that will be at a parity with the products of the
labor of our people—at a parity with a bushel of wheat and with
a pound of cotton.

W h a t I wish to see in this country is a dollar

that will be, and will stay, at a parity with justice.

Gold is at a

parity with nothing, but on the contrary is at a disparity with
Mr. A L D R I C H .

W i l l it disturb the Senator

Mr. JONES of Nevada.
Mr. A L D R I C H .

Oh, no.

I will not interrupt the Senator if it is not

agreeable to him.
Mr. JONES of Nevada.

I have not the slightest objection.


Mr. A L D R I C H .


I understand the Senator from Nevada to

say that the value of money depends upon a limitation of the
units of quantity, in one part of his argument, and in another
part of his argument he says that it depends upon the legislative
legal-tender function which is given to it.
Now, I ask the Senator is it not necessary in order to maintain
the value of money that both these qualities should coexist?
Otherwise is it not true that the coin will only represent the


market value of the bullion that is in it? Take the case of Mexico,
for instance, where the silver dollar is an unlimited legal tender
and where the purchasing power of the silver dollar coined by
the Government is no greater than the number of grains of silver
bullion that it contains.
Mr. JONES of Nevada.

I have frequently stated in the Senate

that silver bullion everywhere, on account of that metal being
used by Mexico as money, is worth somewhat more than it would
be if Mexico did not so use it; but so slight is the capacity of
that country for producing commodities that will command the
products or money of other countries that it fails to raise the
bullion value to any material degree.

Of course, with unre-

stricted coinage in any country, the bullion value and the mint
value will in that country be coincident.
A s the Senator says, I have stated again and again thatmoney
is a creation of law, and that the value of the unit depends upon
the number of units > but he is aware that I have also frequently
stated that no matter how many or how few may be the monetary units in a country they will represent all the value that is
possible to exist in the shape of money in that country at that

If the business of a country were being performed by

$50,000,000, no value would be added by making the number of
dollars one hundred million, other things remaining unchanged;
because unless population and business should have increased
that one hundred million would have no more work to do than
had been done by the fifty million.
Mr. A L D R I C H .

A s I understand the Senator's argument

now it is this, that the reason the coinage value and the bullion
value in Mexico is the same is because of the greater number of
units in circulation in Mexico as compared with the business of
that country and the demand.
Mr. JONES of Nevada.
Mr. A L D R I C H .


W o u l d not that same thing be true in the

United States if the number of silver dollars in circulation here
had the same relation to business that it has in Mexico?
Mr. JONES of Nevada.

Undoubtedly, if this country had as

much money in proportion to its business as Mexico has, it
would result in the same range of prices as results in Mexico.


It is impossible for this country, whose business is infinitely
greater than that of Mexico, to obtain the amount of silver
which would be necessary to constitute as many dollars in proportion to its business as the people of Mexico have in circulation.

So vast a quantity of silver is nowhere to be found.

It is

not that the people of Mexico have much money per capita, but
that they are not a money-absorbing people.

That country is

one of small population—not one-sixth that of the United States,
and with a foreign trade hardly more than one-twentieth that
of the United States; besides which almost all of its exports
comprise articles which the countries of Europe could without
material inconvenience altogether dispense with.

Its domestic

trade can hardly be one-hundredth part that of the United States,
and much of it is conducted by barter.

The demand of the Mex-

icans for money of any kind is so insignificant that it can not be
expected to materially raise the gold price of silver bullion.
W e know that the value of such bullion as is not transmuted
into money necessarily changes with every new demand; and our
contention is that with unrestricted coinage the demand which
the United States would make for silver would put the uncoined
metal to a parity with the coined metal all over the world, because the price established here would become the price everywhere.

Every holder of silver bullion in any country would de-

mand for it per ounce in that country the very price that he
could get for it in this, minus only the cost of shipment.


point to the fact that France, when it had less than half the population of this country, kept the metals at a parity without the
slightest difficulty for three-quarters of a century; and to the
fact that when in 1890 there appeared for a time to be a prospect
that our mints might be opened to the unrestricted coinage of
silver the price of bullion rose to $1.20 an ounce, and as it rose
here it rose correspondingly all over the world, as the official
figures will prove.
But there has been no depreciation in the value, that is to say,
in the purchasing power, of the silver money of Mexico.


a Mexican dollar would buy in Mexico in 1873 it will buy in Mexico to-day.

Had there been a depreciation it would have evinced

itself through a rise of commodities.

There has been no such


rise in the prices of commodities, measured in silver, in M e x i c o
o r any other silver-using country.


T h e Senator f r o m R h o d e Island seems to assume that if we
should decide on g o l d as the money standard of this country we
should obtain an u n c h a n g i n g standard of value.

T h e v e r y pith

of our contention is that g o l d is constantly rising, and that by
adding silver to g o l d in this country we should arrest this rise.
T h e gold-standard advocates argue as if by d e p r i v i n g silver of
its r i g h t of unrestricted access to the mint the value of g o l d had
not been augmented.

W h y , Mr. P r e s i d e n t , by d e v o l v i n g the

entire demand f o r money upon g o l d alone an enormous increase
has taken place in the value of that metal.

In the v e r y nature

of the case i t is impossible that such a result' could have been
T o use a h o m e l y illustration, suppose that in any given country there were a certain number of white, and a certain n u m b e r
of yellow horses, and that a law were passed f o r b i d d i n g the harnessing of the w h i t e horses, so that all the work would necessarily d e v o l v e upon the yellow.

On the one hand the increased

demand f o r yellow horses must naturally increase their value,
w h i l e on the o t h e r hand the demand f o r white horses, b e i n g
proportionately reduced, the value of such horses would naturally fall.

Suppose that afterward a law were passed restoring

t o w h i t e horses the r i g h t to be harnessed, is it n o t obvious that
then the demand, instead of b e i n g all concentrated on one class,
w o u l d again be divided between the two classes, and that as a
consequence the value of yellow horses would diminish, while
that of w h i t e horses would increase?
Mr. G R A Y .

M a y I ask the Senator, in c o n n e c t i o n with his

v e r y interesting illustration of the t w o metals, w h e t h e r if a man
had a y e l l o w horse w h i c h was capable of d o i n g all his w o r k i t
would be e c o n o m y to buy also a w h i t e horse, w h i c h would have
to be fed, and to divide the w o r k between the two.
M r . J O N E S of Nevada.

T h e condition on w h i c h the Senator

bases his inquiry is of course hypothetical.

T h e v e r y conten-

tion w e make is that there are not enough in number of the yell o w horses.

T o d r o p metaphor, the reason w h y , to the eyes of



many persons, there appears to be enough money is because
money is something that in its nature is wholly unlike anything

W h a t e v e r quantity of it may at any time be in use will ab

that time appear to be enough, becau se as the quantity of money
(in proportion to population and demand) becomes less and less,
the prices of commodities and property necessarily become less
and less; so that a quantity of money which at, say, the present
range of prices might be wholly insufficient to effect the present
volume of exchanges, might, when property and commodities
had fallen to a lower range, be ample to exchange at the lower
range of prices all the commodities and property in the market.
T o illustrate, we have to-day a certain quantity of money in
this country.

That quantity results in the establishment of a

certain range or level of prices of commodities and property.
Now, there would be no trouble whatever in transacting the business of the country with one-half or one-fourth that quantity of
money, provided we were content to let the prices of commodities
and property fall to a level sufficiently low to be compatible with
the reduced amount of money.

The objection is not, therefore, to

low prices, of themselves, but to the persistence of the lowering

constant and unending fall—which renders it im-

possible for industry and commerce to find a steady level from
which prosperity m i g h t begin.


Even an unceasing fall of prices would be a matter of no consequence if all transactions were for " s p o t cash"—if no debts
had been contracted or deferred payments bargained for.


will admit that under conditions as they are at the present
time if the money unit were to double its purchasing power in,,
say, one year, so enormous is the volume of debt and of deferred
payments that the entire business world would be overwhelmed
with bankruptcy.

But were all payments cash payments—were

there no debts or time obligations to be provided for—the value
of the dollar might e ven in that brief period double with impunity.
This will be plain on a short analysis.
A year is composed of three hundred and sixty-five days.
Suppose the dollar in that time to take on an additional 100 per
cent of value, yet in a contract requiring but five minutes from


the instant of inception to that of consummation, the proportion
of the increase attaching to so brief a period would be infinitesimal.

Neither party to the contract could be injured.

T h e value which the dollar would have when the contract was
entered into would be its value when the contract was executed.
N o greater degree of sacrifice would be required to fulfill it than
the degree that was bargained for.
H o w different are present conditions!

T h e very essence of

modern industrial life is the time contract.

No enterprise is

now undertaken except upon a foundation of debt—a foundation
o f t e n wide and deep.

T h e feature which above all other fea-

tures distinguishes our age from all the ages of the past is the
deferred payment.

Obligations involving future settlements

amounting not merely to thousands of millions, but to scores of
thousands of millions of dollars have been incurred.

With a

just monetary system these obligations are entirely consistent
with prosperity.

Under such a system those enormous obliga-

tions could be met with entire equity, and to the great benefit
of society; but under the operation of a money volume shrinking relatively to demand, time obligations, by a subtle and furtive process, operate as a withering blight upon industry.
Y e a r by year the equities involved become more and more distorted; the payments demand for their satisfaction more and
more of the products of labor.

Against this secret and clandes-

tine progress no degree of intelligence or foresight can protect
the man of enterprise or of projective mind, who, with capital,
energy, and skill, undertakes to employ laborers.

It is in vain

that he has thoroughly learned his business and understands its
varied processes and possibilities—in vain that he looks ahead
and bases his operations upon carefully worked-out plans and estimates.

All foresight and calculation are thwarted and set at

naught by the influence of this silent but baleful increase in the
value of the monetary unit—an increase which expresses itself
in a fall of the prices of the commodities in whose production
the investor employs laborers and to which he devotes his capital and his skill.
I have said that the objection is not against low prices per se,
but against the persistency of the fall.

W e r e the downward


trend to be arrested at any given stage, prosperity would set in
as soon as it became evident that prices were to continue firm.
By failing to keep the quantity of money in the country increasing according to population and demand, this downward
trend might continue until wheat should reach 20 cents, 10
cents, or even 5 cents a bushel, and cotton 1 cent a pound, without any other evidence of an insufficient money supply except
the fact of the fall of prices, the bankruptcies which it creates
and the idleness to which it relegates laborers.
those evidences enough?

But are not

If debts are contracted while wheat is

a dollar a bushel, cotton 12 cents a pound, and all other commodities in proportion, does the Senator from Delaware think
that prices should be permitted continually to fall by reason of
a diminution in the quantity of money?

Mr. G R A Y .


No; but I was referring to the illustration which

the Senator used, which was amusing, and illustrations often
help argument.

I merely asked whether, if a yellow horse were

capable of doing efficiently all the work of his owner, it would
be economy to buy a white horse and feed him in order to divide
the work between the two?

As to whether it is a good thing

that gold or any or all the metals shall appreciate, so that the
prices of commodities shall g o down, I wish to say that the argument regarding appreciation rests, to my mind, upon an assumption.

There is no evidence—none has been adduced which

appeals to my judgment—to show that there has been an appreciation of gold so as to produce this decline in prices.


argument, I think, is one that has to be met in the discussion of
the subject.
Mr. JONES of Nevada.

W h e n we talk with business men,

while the silver question is not under discussion, no denial is
made of the fact that for the past fifteen years there has been
hardly any profit in business.

I had a conversation the other

day with the Senator from New Jersey [Mr. SMITH], who so ably
addressed the Senate on this subject, and he admitted to me that
business men in general have bad a difficult task to make ends
meet for the past fifteen years.

Occasionally somebody, under


exceptional conditions, makes a little money, but the large majority of business men have had uphill work.
This is because the margin of profit is narrow, and in the greater
number of instances there has been no profit at all.

T h e prices of

the products of labor have been persistently falling for twenty

The Government of Great Britain has been obliged to ap-

point commissions to inquire into matters of depression of trade.
T h e London Economist and other papers have called attention
to the depression; the French and other continental papers
admit it; and it was admitted by all the delegates who attended
the Brussels conference.

The general and long-continued de-

pression is everywhere and always admitted in Congress, except
when silver is under discussion.
Mr. G R A Y .

W i l l the Senator allow me?

Mr. JONES of Nevada.
Mr. G R A Y .


I admit, and stated the other day, that prices in

the last twenty years have declined in a most notable way; but
the question at issue—and if I am wrong I shall be glad to have
the Senator correct me—the question at issue, and w h i c h we are
called upon to consider here as the most important involved in
this controversy, seems to me to be whether that decline in prices
is due to the appreciation of gold or to other causes w h i c h affect
the production and labor cost of commodities.
Mr. JONES of Nevada.

If the fall of prices resulted f r o m im-

proved methods of production, business would be prosperous and
there would be no need of royal commissions to inquire into the
long-continued depression. " I m p r o v e d m e t h o d s " could not make
business unprofitable.

T h e very reason why manufacturers have

recourse to new and improved methods is because they can make
more profit by adopting them.


But a convincing, and, indeed, an overwhelming argument,
one which it seems to me can not upon mature
be resisted, is the fall in the rate of interest.


I have not reached

that subject in its order yet, but now that it has been broached,
I lay down this as a fundamental proposition, that in a new and
undeveloped country, among a people energetic and aspiring,
when the rates of interest constantly fall it is an unerring sign


that the purchasing power of the money unit is constantly increasing from causes having their origin in an insufficient moneyvolume.

In a country whose development has hardly more

than begun, if those of our people who have the genius to project great enterprises were not thwarted by some subtle, unseen,
and unsuspected force, you would not find money in si*eh light

During the past twenty years interest has fallen in

just about the same proportion that the British royal commission said the value of gold had advanced.

I assert that as the

purchasing power of money increases its interest-bearing power
decreases, and for a very plain reason, as the Senator will see
when I state it.
Mr. G R A Y .

The Senator from Kansas [Mr. PEFFER] has told

us at very great length that the interest on money is too h i g h .
M r . JONES of Nevada.

Interest on money is always too high

when the prices of commodities and property are falling.


good can it do a man to borrow money even at 1 per cent if on
his property investment he loses 6 or 8 per cent?

W h e n prices

are falling, any rate of interest is too high; it confiscates the
property of the enterprising man, which property is confiscated
into the possession of the man who sits in his bank parlor eng a g e d in merely juggling with the counters by which the transaction is effected.
Mr. W H I T E of Louisiana.

May I ask the Senator if his ar-

gument is that the effect of the remonetization of silver will be
to increase the rate of interest the people of the country will
have to pay?
Mr. JONES of Nevada.

There is not a particle of doubt about

Men pay interest ungrudgingly when enterprises yield a

percentage of return higher than the rate of interest.
T h e r e is at present no profit anywhere in business.

If the

Senator from Louisiana [Mr. WHITE] can g o before the sugarproducers of his State, and the cotton-producers of the entire
South, and tell them that there is going to be a sufficiency of
money, and that the prices of the sugar and cotton and of everything else produced in Louisiana are going to be held firm they
will not be particular about the rates of interest.

W h e n all

prices are falling men are compelled to conform to the fall.


Business is then conducted on a plane

inclining downward*

After men have produced goods at one level they find themselves
compelled to market them at a lower level.
handicaps the producers.

This enormously

For twenty years men have been pay-

ing more interest than under the conditions of business they
could afford to pay.

Although the rate may have been low, the

amount paid was more than the profit they could make by the use
of the money they borrowed.

I deal with that subject in its order

later, and must content myself for the present with this brief
reference in reply to the suggestions of Senators.
By the passage of the bill before the Senate you continue and
intensify that process.

Business will continue to be unprofita-

Y o u g o absolutely to the gold standard when, as is admitted

by Mr. Giffen, the statistician of the London Board of Trade,
and others, nearly all the gold produced is consumed in the arts
and manufactures, and hardly any is left for circulation as money.
This, too, when the population of this country, unlike that of any
other country upon earth, is increasing at the rate of 21 per cent
per annum, and the demand of the entire population for eve^y
want of daily life is made upon money.
increase of population means a

Two and one-half per ce n t

per cent increase of demand for

money, and yet it is proposed to cut off all increase—to cure what?
T o cure a disease which every reflecting man not jaundiced by
the color of gold admits is not a surplus, but a scarcity of money.
I do not see how anyone can reconcile it with his conscience,
knowing that there can be hardly any addition to the gold money
of the world.
W i t h o u t impugning the motives of any person, I say it is a
crime against mankind; it is an act of treason against the human

W e must make a choice; if the proposition is to keep a

standard of gold at the expense of justice, give me, Mr. President,
a standard of justice at the expense of gold.

Mr. V I L A S .


If it would not interrupt the Senator, I should

like to ask him one question.
Mr. JONES of Nevada.

It will not interrupt me a particle.

I want all the light possible thrown on this question.
Mr. Y I L A S .

I understand the Senator's position to be that


the remonetization of silver by free coinage would enhance its

Now, does the Senator not recognize that at any of the

ratios proposed for that purpose there would be a great risk, at
all events, of a monetary derangement in such a scheme?
Mr. JONES of Nevada.

I will answer.

In the first place, all

the silver that we have remonetized, every dollar that has been
struck off at the mints, weighing 371i grains of pure silver, or
4121 grains of standard silver, has been right up to parity.
is indisputable,


Only the portion that has not had the supreme

prerogative of coinage conferred upon it has depreciated. Every
silver dollar that has been coined is as good as a dollar of gold
or of anything else.
Can the Senator point out any country from which there is
any great amount of silver to come here?

Does the Senator

doubt that if there were only one dollar more of silver to be
coined it would go right up to a parity with the gold dollar, as
all the other silver dollars have gone?

And if he does not doubt

that, does he know where any extraordinary number of dollars
are to come from?
Mr. V I L A S .

I do not suppose that the Senator can make the

answer he is making now without knowing that the reason why
the silver dollars have been held at par is because the Government has done it by force of its pledge of parity, and by the practice of the Treasury in maintaining it.
Mr. JONES of Nevada.

I can say to the Senator that I was on

the conference committee which made what he calls a " p l e d g e of
parity," and there was no " p l e d g e of p a r i t y " given.

There is

not, in my judgment, a lawyer in this body who will tell me that
under any rule for the interpretation of statutes a stray expression, such as the Senator calls a " p l e d g e of parity," without any
provision for its enforcement, is more binding than a provision
distinctly and expressly mandatory, specifying with precision
what, under certain circumstances, the executive officers should
There was never any promise made that the silver dollars should
be exchanged for gold.

And as every man knows, during the

very period in which the gold standard press was stating that
the people of this country feared the silver dollars would go to


a discount, those very dollars were going to a premium over gold.
There was never a more impertinent declaration put before a
people than that the recent panic was occasioned by any fear on
the part of the people of this country that their silver money
might not retain all its value.

W h a t better proof can be cited

of this than that silver dollars went to a premium of 3 per cent
over gold?
During all the period of the panic I never heard of a man
taking any portion of the money of the United States, whether
a silver dollar, a greenback dollar, a Treasury note, or note of
any other kind, to the Treasury to be exchanged for gold.


all the " r u n s " that were made upon the banks and all the money
that was taken out of the Treasury no effort was made by our
people to get gold.

The fear entertained by the people was not

of the kind of money in which they would be paid.

W h a t they

feared—and subsequent events proved their fears to be wellfounded—was that the banks did not have any form of money in
which to pay.
Mr. Y I L A S .

Then do I understand the Senator to mean to

answer that, in his judgment, there would be no risk of serious
monetary disturbance if at once unlimited and free coinage were
given to silver at the ratio of 16 to 1?
Mr. JONES of Nevada.

W h y , Mr. President, if the Senator

f r o m Wisconsin would only tell me what he fears—for. from the
way he argues, it seems to me that he must fear something—if
he would describe to me the character of his fear, I might argue
with him about it.

I have not the slightest doubt that in ten

minutes after a free coinage bill became a law silver would be at
a parity with gold.
I can say another thing to the Senator, that, with a decreasing
quantity of gold in the world, silver, if endowed with legal-tender functions, would keep on a parity with gold without the
slightest difficulty, and I will give the reason for it.

I hope I

shall be excused by the Senate for anticipating at this time a
point which I shall reach in its natural order later on.
How could silver, when once made full legal tender in this
country, fail to maintain a parity with gold? Let us see how that
would be. According to the admissions of the Treasury Depart785


ment we have $600,000,000 of gold in the United States to-day.
Our total money supply is given as $.1,600,000,000.

On the basis

of that money stock the prices of commodities hold their present

Does anybody suppose that if we should come to have less

than one billion six hundred millions of money in circulation we
could have a rise of prices?

W i l l a contraction of the money

volume result in an increase of prices?

Is that possible under

any theory of finance of which anybody ever heard?
Mr. V I L A S .

If the Senator desires an answer

Mr. JONES of Nevada.

Yes; I desire to know if we can have

an inflation with a smaller quantity of money?
Mr. V I L A S .

I will ask the Senator this question: If that con-

dition of things took place, would not the owners of silver in Europe and Mexico and other parts of the world bring their silver
here to be coined into dollars with which they would buy our
gold and transport it to where it was worth more than the silver?
Mr. JONES of Nevada.

I will admit all that, just for the pur-

pose of the argument, but I have never been able to find these
owners of silver; I have never known where they lived or where
they are to be found; and nobody has ever pointed them out; but
I will take it for granted the Senator knows about it and that
they are a great menace to this country—threatening every day
to come here and pour their money into this country.
Mr. V I L A S .

Has the Senator never heard of the fact that

the Bank of France has some $700,000,000 of silver in its vaults?
Mr. JONES of Nevada.

I will take all the facts.

The Bank

of France has $250,000,000 of its reserve in silver and that silver
can not be sold without legislation changing the money system
of the country.

It is held there at a ratio of 15i to 1.

If they

did sell it they would have to bring it here at the ratio of 16 to 1
and lose 3 per cent on every dollar they brought.

If the Bank

of France or any individuals in France wanted to send here any
French silver which does not form part of the bank reserve they
would have to gather it in from all the nooks and corners of the
country at great expense for brokers' commissions.
pense would be in addition to the loss on the ratio.

That e x -

There would

be another loss in melting it up and eliminating the alloy preparatory to presenting it at our Mint.


The French people


have never been particularly anxious to lose money.

They are

among the ablest financiers in Europe, and have maintained
greater financial stability than any country of that continent.
Mr. V I L A S .

By stopping the coinage of silver.


Mr. JONES of Nevada.


I will answer that suggestion at once.

In the first place, as a scientific principle, a stationary population needs no increase in the volume of its money, and France
has a population that is stationary.

In the second place, at the

time of the suspension of the silver coinage, the legions of Germany had trampled into the dust the ensign of France, and in
the pride of conquest had extorted a thousand million of dollars
from a humiliated people.

Germany at the same time demon-

etized silver and adopted a gold standard, expecting and intending to send the discarded silver to France and get French gold.
France had no objection to silver, which has always been the
money of her people; but France wanted nothing that was German, whether good or bad.

The reason for the action of France,

therefore, was a political and not an economic reason.
people were actuated by motives of national pride.



with bitterness the humiliation to which the armies of Germany
had subjected them, they were prepared to resent with equal
bitterness any attempt of Germany to make the monetary laws
of France a means of contributing toward the carrying out of
any policy which Germany might decide to be for her own welfare.
Mr. S T E W A R T .

If my colleague will allow me, France has

not given the one year's notice required under the agreement
of the Latin Union; and if she went to an exclusive gold standard she would have to pay $1.33 an ounce in gold for more than
one hundred millions of silver.
Mr. JONES of Nevada.
will do it.

That she refused to do.

She never has done it, and she never

She sees that silver is doing all the work of gold.

The Senator from Wisconsin [Mr. VILAS] talks as though, if
a people have a white token which performs exactly the same
service as a yellow token, and of whicli nobody complains, but
with which everyone is satisfied, and which, in fact, everyone
must have for use in the everyday business of life, men will


eagerly grasp at an opportunity to lose 4, or 5, or 6 per cent in
exchanging it for something that will do no more service and
perform no better service.

That, I suppose, is what the Sena-

tor means.
But I will take him at his word and suppose that the Bank of
France should send its $250,000,000 over here and buy so much

T h e prices of commodities here could not increase on

that account.

W e should have no greater number of dollars

than before the gold went out, so we should still have the gold
range of prices.

The Senator does not, I presume, mean to say

that we could have an inflation of prices in a country when the
quantity of money did not increase.

Having at present $1,600,-

000,000 of money, if two hundred and fifty millions of gold went
out and no more than two hundred and fifty millions of silver
came in, we should have the same amount of money that we had

There could, therefore, be no inflation.

W h e a t and

cotton would bring as much as before, and so would all other
products of labor.
Mr. G R A Y .

W h a t , then, would be the harm?

May I ask the Senator why it was that in the

era of h i g h prices prior to 1873 the per capita circulation in this
country was less than it is now, if we are to believe the statistics
we have from the Treasury Department?
Mr. JONES of Nevada.

The statistics are not correct.


student of the subject knows them to be incorrect.
Mr. V I L A S .

I should like, if I do not interrupt the Senator

too much, to again ask him a question.
Mr. JONES of Nevada.
Mr. V I L A S .

I shall be glad to hear the Senator.

The Senator assumes that I am saying some-

thing or making some argument, when I only addressed him a

I asked him whether there was not danger of a mon-

etary disturbance in the event of our going to the free coinage
of silver.

I suggest that the price of silver in the world is

not to exceed 60 per cent of the price which would probably be
fixed upon it by such action on our part.

Now, I ask the Sena-

tor if the two hundred and fifty millions of gold which he just
mentioned would not g o up proportionately?
Mr. JONES of Nevada.

I presume that an artificial panic


m i g h t be created, the same as the last one was, if you could get
the Government and the bankers generally to engage in it.
Mr. V I L A S .

I should like right there to say that if it be true

that a panic would follow, w h i c h the Senator chooses to designate as an artificial panic
Mr. JONES of Nevada.

That would be a correct designation

for it.
Mr V I L A S .

I want to ask, then, if the true remedy, to meet

what the Senator contends is an evil, is not to demonetize gold,
to withdraw its legal-tender quality, and leave both metals stand
upon the same plane?
Mr. JONES of Nevada.

W h y , Mr. President, the Senator

argues as though I had said there would really be a panic on account of the exchange of gold for silver.

There would not be

the slightest panic unless, as I said, the banks and the Government, acting together, were determined to make one.
can make one*under any circumstances.


But when the Senator

talks about ail the silver in the world coming here, I ask him
how the silver of India is to come?

Does he suppose the people

of that country will sell their silver for our gold?

Up to the time

of the demonetization of silver by Germany and the United
States, did India send forth her silver to buy gold?

Did Mex-

Did any silver-using or silver-producing country?

Mr. V I L A S .

Not then.

Mr. JONES of Nevada.

W h y not?

It could have been done

Silver was money then in Germany, in Prance, in the

United States, and in many other countries.
W h y should the East Indian, however, part with his silver?
The disparity between silver and gold has not arisen from a fall
in the purchasing power of silver.

Silver bullion in Liverpool

or London to-day will buy as much of the products of labor—as
much of the products of the farmers of Wisconsin and the planters of the South—as either silver money or gold money would
buy twenty years ago.
Silver is performing the same beneficent function now in India
that it performed then.

Y e t Senators are unable to see that the

change which has taken place is an advance in the value of gold.
T o the eyes of people generally in gold-standard countries silver


appears to have fallen, while to the eyes of the East Indian, who
sees silver buying as much as it ever bought, the change that
has taken place is that gold has risen.

Should silver and gold

now reach a parity, that fact would, to the East Indian, be an unerring indication, not that silver had risen, but that gold had
suddenly fallen.
difference to him.

In neither case would it make the slightest
A s he had refused to buy gold when it was

rising in value, so he would naturally refuse to buy it if the process should be reversed and it should fall in value.
W H Y D I D N O T T H E D A W O F 1890 R E S T O R E T H E


Mr. JONES of Nevada.


W i l l the Senator yield to me?

I understood the Senator, in reply to the

Senator from Wisconsin a few minutes ago, to ask where would
the silver come from to depress the value and the price of it if we
went to free coinage.

Now, I ask the Senator, in turn, why

was it when we undertook to buy, and did buy, 4,500,000 ounces
of silver bullion a month—54,000,000 ounces a year—under the
Sherman law, that it did not put up and keep the price of silver at a parity with gold, but that the supply of silver in the
world was such that even our purchase of the American product
did not bring it to a parity?
One other question, which is in keeping" with the one I have
just propounded: If the Senator's theories are true, how is it that
India found that, under the free coinage of silver there, the
value of the rupee went down to the bullion value of the silver, and
exchanges there so fluctuated that India has had to abandon the
free coinage of silver and undertake to establish an artificial
value at Is. 4d. an ounce?
Mr. JONES of Nevada.

The Senator from Delaware [Mr.

HIGGINS] has heretofore stated that at the time of the passage
of the Sherman law the opinion was expressed that the purchase of 4,500,000 ounces of silver bullion a month would bring
silver to a parity with gold.

Even had that opinion been ex-

pressed, Mr. President, it would naturally have been based
upon the value of gold at that time; that is to say, it would have
been expressed with reference 'to the level at which gold in its
upward trend had at that time arrived.

But without regard to


silver, the value of gold has continued to rise.

If I may use

an illustration, the case is somewhat analogous to one in which
a person contracted to erect a dam across a river with a view to
bringing the level of the water to a height corresponding with
that of a pillar whose summit was a given number of feet above
the level of the stream.

All the calculations of the engineers

showed that in order to accomplish the desired result, the proposed dam would need to be a structure rising a certain number of feet f r o m the bed of the river, and incidentally, it was
noted, that when finished it would be on a level with a considerable number of objects, such as rocks, etc., near the bank
of the stream, and houses, fences, etc., farther in shore.


when the dam was finished to the height proposed, it was observed with surprise that the leve] of the inclosed water was
farther from the summit of the pillar than it had been before
the dam was constructed.

So the computations of the engineers

were again carefully revised, and it was found that no error
of calculation had been made.

The height of the dam was then

compared with that of the numerous objects on shore, with which,
as had originally been observed, its height when completed,
should correspond; and it was found, as to all those objects,
that it fully complied with the conditions.

It then became

manifest that what had happened was that during the progress
of the work of construction the pillar was rising faster than the

This was evidenced by the fact that the summit of the

pillar was now plainly higher in its relation to all the surrounding objects than it had been when the dam was commenced.
Notwithstanding this, there were large numbers of persons who
insisted that what had happened was that the water had fallen
below the original level of the stream.
Metaphor apart, it is, as I have said, not silver that has fallen,
but gold that has risen.

Prices of commodities measured by

silver have remained firm; measured by gold they have fallen
more disastrously during the past three years than at any previous period, and more rapidly in foreign countries than in this

By reason of this greater fall abroad than here even

the operations of the McKinley law have to a great degree been
neutralized, and, as a consequence, the importations of com785


modities into this country have been enormously increasing-.


that gold was for a season taken from here to pay for those excessive importations, although that was not the only reason for
the outflow of the metal.

There were imperative needs of Euro-

peans for gold to meet obligations of their own, arising largely
out of a great panic in gold-standard Australia, and a panicky
condition all over gold-standard Europe; besides the demands of
Austria in its ill-advised attempt to g o from the silver to the
gold standard.

But all this outgo of gold from this country has

been ascribed to the Sherman law.
W h e n the Senator says that in India the value of the rupee
fell to the bullion value, I will say to him that with unrestricted
coinage the coin value and the bullion value were always coincident; so they were in India, and so they always will be wherever coinage is unrestricted and there is no charge for coining.
There never was, consequently, any variance between the market and the mint value of silver in India.

A s to the statement

that India had to abandon free coinage, the Senator may not be
aware that great protests have been sent from the East Indian
people to the government against this monstrous violation of
every equity, this monstrous invasion of the rights of the 280,000,000 people of India.
In manufactures and general development the people of India,
in the past twenty years, have made marvelous and unprecedented

The cotton mills of Bombay are now supplying to

China and Japan six times the quantity of cotton yarns which
Great Britain,supplies, and all this with a money metal that they
say is '' falling."

The Senator seems not capable of seeing move-

ment except in one direction.

It is impossible for him to see

a rise; he can only see a fall.

W e assert that in purchasing

power silver did not fall in India; that measured by labor, and
by the products of labor measured by the wheat and the cotton
that the ryot produces, and by the yarn he spins, in short, measured by everything that he makes, or that he does, there has
been no change in the value of silver in India.

I repeat, it is not

silver that has fallen, but gold that has risen.
All political economists agree that while a number of things
may change their relations to each other, yet, when all appear
" 785

to change in relation to one particular thing it is not in reality
all things that have changed, but the one thing that has changed.
A l l things appearing to have changed with relation to gold, it
is absurd to suppose that all things have really changed and that
gold is unchangeable.

It is gold that has changed.



A m o n g the 280,000,000 people of India there has been no change
of value in the rupee; there has been practically no change in
the rates of wages.

Statisticians have attempted to show a

change by showing some increase for personal services in the
seaboard cities of servants of the English resident officials, but
there has been practically no change.
Mr. S T E W A R T .

And that is why the rupee is called the

" p e r v e r s e rupee."
Mr. JONES of Nevada.

Yes; Mr. Goschen, in England, char-

acterized it as the " p e r v e r s e r u p e e " because it did not change
in value at all, notwithstanding that from the English point of
view it ought to change.
Mr. H A W L E Y .

I am somewhat troubled by what the Sena-

tor is saying in respect to India, where there is a vast multitude
of employes of various sorts, and officers in the military and civil
service, whose salaries have been and are now paid in rupees.
The Senator is perfectly familiar with all of these questions, of
course, as to India, and knows that one of the difficulties of the
situation there was that these officials appealed to the mercy of
the British Government, saying that those living on fixed salaries could not support themselves.

W h a t occasioned that con-

dition of things in India.
Mr. JONES of Nevada.
the matter.

I will tell the Senator what was really

T h e cupidity of the Englishman is a good deal like

the cupidity of the American?

W h e n the contingent of English

officials stationed in India and drawing their salaries in rupees
saw that in England the newspapers and bankers were constantly talking of the " f a l l " of silver, although these Indian
officials g o t as much for that silver as before, they said: " Whatever may happen to the Hindoo we shall be much better off if
we can secure the adoption of the gold standard in India." W h a t
is true of officials in India is true of officials everywhere, when785


ever a man thinks he can get an increase of salary he will apply
for it.
Mr. S T E W A R T .

From the President down.

Mr. JONES of Nevada.


Yes, from the President down.

is inherent in human nature.


Those men could then buy with

their silver as much as they could buy at any previous period,
but they wanted to have their salaries doubled.
The East Indians have universally complained of the action of
the British Government.

They find that it takes 2 pounds of

cotton and 2 bushels of wheat to pay the same amount of interest on the enormous gold debt due to Great Britain that 1 pound
or 1 bushel would pay before.

This means that it now takes two

days' work in India to pay the same amount of interest on a
sterling debt that one day's work would pay before.

Great Brit-

ain has her great dependency in a practically helpless condition.
Bitter as are the assaults of the English writers against " f i a t "
money, the British Government has by its order of June 28,
1893, established fiat money throughout India, for no stickler for
" intrinsic value," so called, can for a moment suppose that with
the limitation upon its coinage, the rupee is any longer anything
more than if the stamp of the government were placed upon so
much paper.
Mr. T E L L E R .

W i l l the Senator from Nevada allow me to

make a suggestion

to the

Senator from Connecticut



Mr. JONES of Nevada.
Mr. T E L L E R .


If the Senator from Connecticut will examine

the report of the English commission of 1888, he will find the
question which troubles him thoroughly discussed and solved.
The complaint of the Indian officials was that they had to expend a portion of their income in England; for instance, they
had to send their children to school in England, as they could
not be educated in India, and purchases had to be made in England
which could not very well be made in India. The English commission thoroughly discussed that question.

The hardship on an

English officer in India was that probably one-half of his income
was spent in England and he had to transmute his rupees into

That commission directly stated that, so far as the pur-



chasing power of the rupee in India was concerned, it had not


Mr. JONES of Nevada. Now, I want to return to my friend from
Wisconsin [Mr. VILAS].

He fears that the silver reserve of the

Bank of France, $250,000,000, may come over here.
should come.

Suppose it

W e have $600,000,000 of gold in this country.


ducting $250,000,000 from that, we are left with $350,000,000 of

W e have, then, no more money than before, f o r a dollar

of silver can perform no more monetary function or service than
a dollar of gold.

There is, therefore, no inflation; no cheating of

the creditor; he gets as much as he did before for every dollar
he lent.
Suppose Austria sends in $20,000,000 more, that makes $270,000,000, and we have $330,000,000 left.
sends in $80,000,000.

Now, suppose Germany

W e have still left $250,000,000—but not a

dollar of increase of money, &nd consequently no change of the
general range of prices.

How can you have inflation or any va-

riation between silver and gold until you first have enough silver by itself to do all the business that both gold and silver did

So that you would need to have more than $600,000,000

of Silver brought in before all the gold could g o out, or before
there could be any rise in prices of commodities, for no one will
pretend that there could be a condition of inflation without an
increase of the volume of money. W e must remember that when
our gold got to Europe it would raise prices there, and so help
all the sooner to establish an international equilibrium, rendering it less necessary for gold to leave here.
Mr. V I L A S . Does the Senator not see that $360,000,000 of silver, 60 per cent of $600,000,000 of gold, would be coined into
$600,000,000 of silver dollars with which the $600,000,000 of gold
could be obtained?

W e assume that silver is worth 60 cents

upon the dollar of gold.

Y o u propose at that ratio to adopt free

and unlimited coinage.

Then, what hinders $360,000,000 worth

of silver being brought in here and coined into $600,000,000 of
silver to be exchanged for $600,000,000 of gold?
Mr. JONES of Nevada.

I think the Senator ought to show

where the silver would come from.


Mr. V I L A S .

Is it not more than $360,000,000?

Mr. JONES of Nevada.

I do not know where the Senator

<»uld get the silver.
Mr. V I L A S .

Silver is for sale.

Mr. JONES of Nevada.
Mr. V I L A S .

Mr. JONES of Nevada.
is not $3,000,000.

In what market?

There is $360,000,000 worth of silver bullion.
The visible stock in the United States

W h e n Senators speak of the immense amount

of silver that would come here, I should like them to point out
where it is.

I am trying to find out where it is, and the Sena-

tor can not point it out.
Mr. V I L A S .

If there is no silver to be coined, what advan-

tage is there in free and unlimited coinage?
Mr. JONES of Nevada.

The small amount coming annually

from the mines would be coined.

I deny the Senator's state-

I assert—and I challenge authoritative contradiction—

that there is not $20,000,000of silver bullion for sale in the world.
Mr. V I L A S .

I was going to ask the Senator if there were not

almost $200,000,000 worth of silver produced from the mines last

I do not mean from our mines, but from the mines of the

Mr. JONES of Nevada.

Not quite so much; but even were it

so, what then?
Mr. V I L A S .

W e have it yet.

If the Senator takes the

Mr. JONES of Nevada.

I will take these figures just to ac-

commodate the Senator.

Does he mean to tell me that there

is $200,000,000 of silver for sale at 60 cents for 371 grains?


silver of last year is not on the market now.
Mr. V I L A S .

1 will ask the Senator if he does not understand

that there are nearly four thousand millions of silver in the
Mr. JONES of Nevada.

Between $3,800,000,000 and $4,000,-

Mr. S T E W A R T .
Mr. V I L A S .

W h a t can it be bought for?

About 68 cents on the dollar in gold.

Mr. JONES of Nevada. Oh, no. Only the uncoined surplusage that is denied access to the mint could be had at that price,


and the moment that surplusage were taken up silver would rapidly g o to its old relation.

The free coinage of silver in this

country would take up at once the entire surplus—which is but
a small surplus—that is left on the market uncoined.

Even to-

day, however, no larger amount of silver could be bought f o r
gold in India than enough to meet the current gold liabilities of
the Indian Government.
Mr. V I L A S .

I think the Senator's difficulty is apparent

Mr. JONES of Nevada.

The Senator says the difficulty is ap-

I say to him that only twenty years ago when silver

was at a premium over gold, and the East Indians could get the
benefit of that premium in the sale of silver, they did not sell it
for gold, because they did not want the gold.

Gold does not cir-

culate in India, and in the nature of things can not circulate

W a g e s at 10 cents a day can not be paid in gold.


must remember that about the time of the passage of the
Sherman law silver bullion rose to $1.20 an ounce, but it rose
not in this country alone.

It rose to that figure all over the

Silver bullion could not then be purchased in India, in

England, or anywhere else in the world at a less figure than it
could be purchased here, and everybody knew the reason for the
rise was the prospect of favorable legislation in the United

No one can point to any instance in which silver could

be bought any cheaper in one country than another, considering
transportation charges, etc.

W h a t e v e r the price of silver is

here it will be in India, in England, in Germany, and wherever
else telegraph cables reach.
Mr. B U T L E R .

T h e Senator from Wisconsin [Mr. VILAS] has

stated to the Senator from Nevada that the annual product of
silver was about $200,000,000, and left the inference to be drawn
that that $200,000,000 would be dumped into this country if we
went to the free coinage of silver.

As an offset in part to that

inference, I desire to ask the Senator from Nevada if he can
give us an approximate statement of what proportion of that
$200,000,000 of silver is used in the arts and industries?
Mr. JONES of Nevada.

I suppose about 30,000,000 ounces

would be used in the arts.

But the Senator from Wisconsin has

failed to answer as to where this silver would come from to take


the place of gold so as to have inflation in this country. I should
like to have the Senator from Ohio [Mr. SHERMAN] or the Senator from Rhode Island [Mr. ALDRICH] tell me where the inflation could come from and where the silver could come from that
would change the parity, or would make a disparity between silver and gold in this country?
Mr. S H E R M A N .

I have been appealed to by the Senator,

and I will say that this same argument was one which largely
led the Senate of the United States over three years ago to
adopt what is known as the act of July 14, 1890.

The truth is

silver would be brought here from all the markets of the world,
and a vast mass of $3,800,000,000, amounting to many million
ounces, from all parts of the world, would come here and be saddled
upon us at its market value.
T h e same argument now so earnestly and ingeniously put, and
always put by the Senator from Nevada, was proved to be fallacious four years ago.
Mr. JONES of Nevada.

I made no argument that was falla-

I stated the exact facts which existed at that time.

Senator refers to market value.


W h a t is it that makes market

I supposed that the market value was the result of the

supply as correlated to the demand; these two forces operating
upon each other.

Does the Senator mean to tell me, with a de-

mand constant, incessant, and always at a maximum, for money,
by seventy million of the greatest money-absorbing people on
the face of the earth, that with unrestricted coinage any other
market price than the money-price or mint-price could exist?
Is it possible that the market price takes no cognizance of the
fact that seventy million people, night and day, are demanding
that which is money?

W h y , Mr. President, the Senator's con-

tention, I say with all respect, is perfectly absurd.
Senator where the silver could come from.

I ask the

Did the Senator

ever know of a dollar of silver coming out of India?

Silver in

France is selling to-day for a dollar and thirty-two cents an
Mr- A L D R I C H .

In gold?

Mr. JONES of Nevada. Of course it is—exchanging for commodities at the same rate that gold exchanges for the same com785



I should be glad to be informed how France could sell

Mr. A L D R I C H .

Silver bullion sells there relatively at the

price it sells in the United States.
Mr. JONES of Nevada.

But there is no bullion in France.


am talking about the only silver there is in France, which is in
the shape of francs.
Mr. A L D R I C H .

W e have a coin, for instance, the


piece, in the United States, made of nickel and other combinations of metal, which sells for one hundred times its market value
in the same way the Senator speaks of silver being sold.
Mr. JONES of Nevada.

Y o u can coin gold so that the ten-dollar

piece will sell for a hundred times its market value.
Mr. A L D R I C H .

That is not selling at all.

It is used with cer-

tain alloys as money in limited quantity and maintains a certain
value on account of the limited quantity.
Mr. JONES of Nevada.

It is precisely because you do not

limit the quantity of gold you coin that the coin value and the
market value are coincident.
Mr. H O A R .

W h y does not the Senator favor the free coinage

of nickel?
Mr. JONES of Nevada.

Because there is too much of it.


am trying to have somebody point out where there is too much

Besides, nickel has never had unrestricted coinage, and

silver always has had, until 1873.

I have asked the Senator from

Wisconsin to tell me where all the flood of silver is to come from,
and he showed that he did not know anything about it.

I want

somebody else to point out where silver bullion is coming from.
Mr. HAWKEY rose.
Mr. JONES of Nevada.

I will hear the Senator from Connec-

Mr. H A W L E ^ .
came from.

I will state within a few million where it

Here is a list showing the August supply [reading]:

" B o s t o n and Colorado Smelting Company:" later, " Boston and
Colorado Smelting


later, Boston and


Smelting Company;" and so on, giving the various mines and
smelting companies that supply silver.
Mr. S T E W A R T .

If my colleague will allow me I will state


that that bullion was offered from time to time, probably the
same bullion.

That was after the market price had been abol-

ished by the Treasury Department.
Mr. H A W L E Y .

I am reading the offers, and opposite each

one is " a c c e p t e d . "
Mr. S T E W A R T .

There was very little accepted in the mon th

of August.
Mr. JONES of Nevada.
Mr. H A W L E Y .

How much was the August supply?

T h e total of the August supply?

It was not-

a great deal.
Mr. JONES of Nevada.

I am asking where these millions are

to come from?
Mr. H A W L E Y .

I wish the Senator would tell me—probably

he knows the figures better than I do—have we not bought
something like 150,000,000 ounces in the last three years?
Mr. JONES of Nevada.

In three years?

W h y , that amount

did not begin to be enough to keep pace with the increasing demand, owing to increase of population and business.
Mr. H A W L E Y .

That is another question.

Mr. JONES of Nevada.

No, I deny that silver enough can be

got anywhere to make an inflation in this country.

I say that

from the day the Sherman law was passed the general level of
prices of commodities fell, and I assert that a dollar issued under
that law last spring, not speaking of the panic period, was worth
more than the first dollar issued under that same law.

That fact

was made plain by the report of the subcommittee on tariff of
the Senate Committee on Finance, of which subcommittee the
Senator from Rhode Island [Mr. ALDRICH] was chairman.


subcommittee attempted to show that the fall of prices was
brought about by the operations of the McKinley law, while I
maintain that it was really produced by an insufficient quantity
of money—by a quantity of money whose increase was not keeping pace with the increase of population and business.

It was

attempted to show that the reduction was effected by the tariff
law, without any time having been allowed for the genius of the
American people to operate by invention upon machinery, a result which the tariff is supposed to effect by putting millions of


workmen into well-equipped shops, and giving them ample opportunity to develop their genius.
Singular to say those " i m p r o v e d processes" began their effects as early as two months after the passage of the McKinley

The fall in prices, it was said, was the beneficent result of

that tariff, when in fact that fall had its genesis long prior, in
the increasing scarcity of gold as compared with the demand for

So that, as I have said, every dollar issued under the Sher-

man law was more valuable than any prior dollar issued under
the same law, and the last one was much more valuable than the
Is that inflation?
dollars out?

Does that show that there were too many

Is that the reason why the supply of those dollars

should be cut off by repealing the purchasing clause of the socalled Sherman bill?

W h a t good reason in morals or philoso-

phy, or political economy can be advanced for cutting off the supply of money from the country when notwithstanding the supply
the unit of money has been and is constantly increasing in value
and looting the debtor in the interest of the idle creditor?


do Senators defend themselves in this body for cutting off the supply of money, when it has been shown that the supply instead
of inflating prices has not been sufficient to keep them from constantly falling and the load upon the already overburdened
back of the debtor has been increasing from day to day?
That, Mr. President, is the reason why we oppose this bill.
W e are threatened here with a deluge of silver, but no Senator
can point out the source of the deluge.

W e have for


years heard of this deluge, but only when some silver law has
been under discussion.

W h e n the Bland act was being debated

in 1878 the New Y o r k papers had a statement to the effect that
a new process of cupellation had been discovered by which an
enormous quantity of silver could be obtained by melting up old
lead pipes, and that that was one of the sources from which we
might expect a " deluge " of silver.

Then they said that there

had been mines of fabulous riches discovered in the unexplored
mountains of Peru, and all that was needed was simply to run a
tunnel and take out all that you wanted.
not materialize.

These mountains did


Mr. V I L A S .

W i l l the Senator allow me?

Mr. JONES of Nevada.
Mr. V I L A S .

With pleasure.

I remember reading some time ago of a coun-

tryman who listened to the Latin debates at Oxford.
asked him if he understood the tongue.

ways knew who was wrong in the argument.


He said no, but he al" A n d how? " was

He replied, " b y seeing which one got angry



Now, I regretted that my learned friend, a very

able Senator, who is the special champion of silver, should for a
moment have made a retort that calls upon me to observe that
we do not pretend to know all the laws of finance and all the
courses of nature and all the effects which will be produced by
experimental efforts in the interest of some special problem;
but I do wish to ask his attention to the fact that when he began
to answer the question which I addressed to him he assumed
that silver would come to this country, and proceeded to argue
that there would be no harm produced by the inflation, because
$250,000,000 of silver would come, upon the supposition he made,
to take out the $250,000,000 of gold.
I called his attention to the fact then that for the $800,000,000
of gold but $360,000,000 of value of foreign silver would be necessary to take the place of it; and he answers me then, " W h e r e is
the silver to come from? " forgetting that he had assumed that
the silver was to come, as everybody must know would be the
fact with $4,000,000,000 worth of it in the world, and a demand
here tot $360,000,000 to take $600,000,000 worth of gold.
Mr. JONES of Nevada.

For the sake of the argument I as-

sumed it to come, and I showed that if it came it could do no

But if the Senator continues to assert that $360,000,000

worth of foreign silver would come, it is incumbent on him to
show where it is to come from.

I have already stated that there

was silver coin in France that was selling at a higher price than
even our free coinage would give.

It is already exchanging in

France at a higher rate than it is exchanging here.

Nobody is

going to gather up the silver of France and send it here and
lose 3, 4, 5, or 6 per cent on it.
other country.

Nobody would do that in any

In discussing the supposititious available stock


I had reference to silver that is not permitted coinage, that has
not access to the mint.

W h e r e is that?

No man can point it out.

Then I called the Senator's attention to another thing.


this country should adopt free coinage at the ratio of 16 to 1 (and
at the present relation of silver to gold it would be about 25 to
1) does he imagine that when the Government advertises that it
will take silver at 16 to 1 any man anywhere will take any less
than $1.29 an ounce for it?
is going to do that?

Does the Senator imagine anybody

T h e moment a free-coinage bill is passed,

that instant silver goes to $1.29.

Is not that in accordance with

our knowledge of human nature?
Does any business man in this body suppose that if silver were
$1.29 an ounce here he could get an ounce of it anywhere for
less than the amount at which this Government says it will take

I again inquire: W h o has any?

men to point out where it is.
Britain has none.

I have asked tbese gentle-

They can not point it out.


All that is in France is selling at a h i g h e r

rate and as to all that is in India, none has ever left India that
went into it.

W i l l France gather up pieces of money that are

already full legal tender, performing every service that could be
performed by gold, and send them here at a loss?
Mr. G R A Y .


Mr. JONES of Nevada.
not point to it.

W h e r e is the bullion?

Senators can

I have asked where it is because I wish to strip

the mask off this entire pretense.
of bullion can not be found.

Twenty-five million dollars

No Senator can point it out.


are for ever being told about the great flood that will come upon

This " flood " is a myth.

Mr. H I L L .

It will not stand examination.

W i l l the Senator from Nevada allow me a mo-

Mr. JONES of Nevada.
Mr. H I L L .


I rise not for the purpose of asking a question but

to appeal to him that he will not allow interruptions, but continue his speech in the order he set out for himself.

I for one

would like to listen to his connected speech.
Mr. JONES of Nevada.

That course is entirely agreeable to

The digressions I made were with the view of answering

such questions as were put to me.

Much that I have said in this


way will be dealt with in its proper order in the course of my
remarks, and therefore if I shall seem to repeat the substance
of something that I have stated in these colloquies with Senators, I hope I may not be regarded as boring the Senate.
Mr. H I L L .

It will bear repetition.

Mr. JONES of Nevada.
Mr. A L D R I C H .

I thank the Senator.

Before the Senator leaves this part of his

argument I wish to say a single word, not for the purpose of interfering with his speech or to divert his attention, but in answer to a statement he made some time ago.
The Senator challenged the friends of the pending measure to*
show where the silver was coming from, that is to be brought
here and coined under free coinage, and I understood him to say
that we could not point out more than $50,000,000 of uncoined
silver in the world, and perhaps more than $25,000,000.
Mr. JONES of Nevada.

Put it at $25,000,000 of bullion un-

Mr. A L D R I C H .

That this statement may not g o out unchal-

lenged, I quote from an address made by Mr. Balfour at the
Egyptian Hall, Mansion House, London, August 3,1893, in which
he estimates the amount of uncoined silver in India to be
" b e t w e e n one hundred and thirty and two hundred million
pounds sterling;" in other words, from $650,000,000 to $1,000,000,000.
Mr. Balfour makes the further statement, which is undoubtedly
true, that this silver has been retained in India heretofore from the
fact that the people of India had the right to take it to the mints
amd have it coined at any time into money; in other words, that
this uncoined silver was in their hands practically a legal tender
for all the uses of money in the payment of debts and other uses.
The Indian Government having taken away the right of coinage,
this silver bullion is in the hands of the people of India, and can
not be used except to be sold as silver bullion at 60 or 70 cents an
ounce, or whatever the price may be.

If the United States fixed

the price at $1.29 an ounce in gold, I ask if any one holds that that
bullion would not be likely to come to the United States?
This estimate of between £130,000,000 and £200,000,000 sterling is made by Mr. Balfour. Mr. David Barbour, of the Indian


finance committee, whom I regard, and I believe the Senator
will agree with me, as the ablest and clearest writer upon the
theory of bimetallism, estimates the amount of uncoined silver
in India at a larger sum than this.

It seems to me that this

statement alone is a sufficient answer to the Senator.
I do not intend to interfere with the argument the Senator is
making, but I might supplement these authorities by many
others as to the extent of the stores of silver in the world both
coined and uncoined.
Mr. JONES of Nevada.

I wish the Senator would do it now

I do not know where that silver is.
Mr. A L D R I C H .

I have called the Senator's attention to es-

timates made by friends of bimetallism that it now amounts in
India alone to between $650,000,000 and $1,000,000,000.
Mr. JONES of Nevada.

W h y , Mr. President, the East In-

dians have this silver laid away in the shape of idols and religious charms, which they hold in far higher esteem than

Even were Mr. Balfour correct, which I doubt, I ask

the Senator whether in case the price of silver rose in some foreign country those idols and charms would be sold?

If so, I

should like to know what the East Indians would get in return
f o r them?
Mr. A L D R I C H .

They would get gold.

Mr. JONES of Nevada.


There is not a single thing in

the Western W o r l d that the ryots of India use or want.
do not want gold.
g o t it?


W h a t would they do with gold after they

W h y should they sell their silver even if they knew

they could get $1.29 an ounce in gold for it?

During all the ages

when tney could get $1.29 for it they did not sell, but constantly
increased their hoards of it.

W h y should they sell it now for

$1.29 in order to get a thing for which they have no use?
Mr. A L D R I C H .

There was a very good reason why they did

not sell it then to America.
Mr. JONES of Nevada.
Mr. A L D R I C H .


Because they had a market at their own

Mr. JONES of Nevada.
Mr. A L D R I C H .

But they never sold it.

They did sell it, I beg the Senator's pardon.


The statistics of the Indian mint show that in very many years,
and I think in a majority of years—it is not so in all the years, but
it is so in a great many years—the coinage of the silver rupee in
India was very m c c h greater than the total importation of silver,
showing that this great mass of silver bullion was put into coinage
according to the wants and demands of the Indian people.


had a market at that time at their very door in the Indian mint.
That market, which was the only market they had, has now been
closed to them; and to say. as the Senator does, that the people
of India are unlike the people of any other country in the world
and have no demand or use for money
Mr. JONES of Nevada.
" money."

I did not say they had no use for

I said they had no use for gold.

Mr. A L D R I C H .

I so understood the Senator.

Mr. JONES of Nevada.

I said they do not want anything sup-

plied by the western world.
Mr. A L D R I C H .

Does the Senator mean to say that any peo-

ple on this wide earth have no use for gold?
Mr. JONES of Nevada.
Mr. A L D R I C E .

I say so.

I do not know of any,

Mr. JONES of Nevada.

I never heard of the East Indians

having any use for gold, except for ornaments or charms.


have no use for it as money.
Mr! A L D R I C H .

Gold is the measure of everything, and can

be converted into everything.
Mr. JONES of Nevada.

Gold is the measure of nothing in

silver-standard countries.

Gold-standard countries use gold for

their measure; silver-standard countries use silver.


the 280,000,000 people of India there is hardly one in a million
who, in any bargain or transaction relating to labor or its products, knows anything whatever of gold.
If there is no demand among the East Indians for anything
produced in the western world they would not dispose of their
silver for gold.

The Senator's statement about what was coined

at the Indian mint proves nothing.

It simply proves that by

reason of abrasion recoinages took place.

There has always

been a proportion of recoinages in India every year.
ment does not prove that the charms are coined.

The state-


Mr. A L D R I C H .

I will bring proof of my statement from the

testimony taken before the Indian commission at a recent date—
Mr. JONES of Nevada.

Does the Senator g o so far as to say

that the charms, etc., to which I have referred, were coined?
Mr. A L D R I C H .

I do.

A large number of witnesses stated

that this uncoined silver in India was taken to the mint and
coined whenever the wants of the people who held the silver required that it should be done.
Mr. JONES of Nevada.

There is no more danger of that sil-

ver coming out of India than there is that the silver money in
circulation in India would flow out.
Mr. A L D R I C H .

I will suggest to the Senator from Nevada

that the statement which he originally made was not that the
silver would not under any circumstances come to the United
States, but that there was no such stock of silver in existence.
Mr. JONES of Nevada.

Every one knows there has always

been a large stock of silver in existence in India, but what I assert is that there is not any stock of silver there that would
leave India, and therefore it is not in existence for that purpose.
I am quite sure that the Senator will find upon examination
that the annual recoinages of the old rupees fully account for
the difference between the net imports of silver to India and
the amount of coinages shown by the mint returns.
Mr. A L D R I C H .

But suppose the price of silver here should

be sent up by our action?
Mr. JONES of Nevada.

They could sell it for its market

price in London, which would then be the same as here, less only
the cost of transportation to this country.

They could sell it at

that price wherever silver is bought and sold.

But does the

Senator suppose if an East Indian has a charm which he almost
worships, and which cost him $1.16 in the products of India, he
will sell it as soon as the metal in it becomes worth $1.17 in
Mr. A L D R I C H .

I think he would.

If he sends that silver

to London at the present time he gets no more than the rupee
is worth in India, and he gets no better market than the bullion
is wortn at home.


Mr. JONES of Nevada.

There is no market in India for the

If they can not coin it, what will they do with it?

Mr. A L D R I C H .

The Senator from Colorado [Mr. TELLER]

and several other Senators have called attention to the fact that
the importation of silver has been going on in India since the
suspension of silver coinage.
sending it?

If there is no market why are they

There certainly is a market, but it is a market for

the bullion itself at its present market price.

If you increase

that market price here from 70 cents to $1.29 an ounce, you could
not stop the silver flow to the United States.
Mr. JONES of Nevada.

If I may suppose a somewhat parallel

case, it is hardly to be presumed that because of an increase in
the price of silver bullion the Christian people of the United
States would propose to sell the Communion service of their

Now, the Hindoo is not merely religious; he is in-

tensely superstitious.

He attaches great virtue to these idols

and religious charms, and would as soon think of selling them
as our people would think of ordering a sale of the Communion
service of their churches because of a rise in the price of silver
Mr. A L D R I C H .

I hardly think that is an answer.

Mr. JONES of Nevada.
Mr. A L D R I C H .

It is a complete answer.

T h t Senator knows as well as I, and very

much better, that from 1834, or whenever the silver production
of the United States was commenced, up to 1873, practically the
silver bullion of the United States went to the French and other
European mints, because they paid 3 per cent more for it than
could be obtained for it in the United States.
Mr. JONES of Nevada.
Mr. A L D R I C H .


If the Senator supposes that with a differ-

ence of between 70 cents and $1.29 the people of India would not
take advantage of this market he gives them credit for very
much less intelligence than I think they have.
Mr. JONES of Nevada.

The Senator does not state the propo-

sition at all.

W h e n silver becomes $1.29 here it becomes $1.29


To show that it is law that governs absolutely the

value of silver and the value of gold relatively we have but to
look at our own history.

Between 1792 and 1834we had no gold


in this country.

All our business was done with silver.


Because silver was overvalued here, 15 pounds of it being a legal
tender equal to a pound of gold; while by the law of France 151
pounds of silver were required in that country to be given for a
pound of gold.

Y e t we have been told here in a great number

of speeches on this floor that the relation we made was not the
'' m a r k e t " relation. W h y , Mr. President, there was no '' market
relation" about it.

It was law that fixed the relation.

T h e re-

lation established by our law overvalued silver as compared with
the relation established by the law of France. The French having
made 15i pounds of silver the equivalent of 1 pound of gold,
while in this country we made only 15 pounds of silver the
equivalent of a pound of gold, who was going to send a pound of
gold here to exchange it for 15 pounds of silver, when he could
send his gold to France and get 15i pounds of silver for it?
W h a t was the result?

Although there was only one-half of 1

per cent difference, and that in a metal most precarious in its
supply, involving greater degrees of difference in cost of production than almost any other copcimodity known to man; we all
know that the law of France operated to take all the gold out of
this country and leave all the silver here.

Then in 1834, when

the mines of North Carolina and other portions of the South
were discovered, we changed our relation: instead of 15 to 1, we
made it 16 to 1.

That meant an overvaluation by law of gold

as compared with silver.
N o ; ' m a r k e t " had anything to do with fixing that price.
the law.

It was

Clear up to 1834, for forty years in the history of the-

Republic, all the gold went out, owing to the figure at which
the law of our country had fixed the relation of the metals, and
for the same reason all the silver at a later period went out.
W h e n we made the ratio of 16 to 1, only one-half of 1 per cent
over the former valuation, from that time on gold came and silver went.

That was entirely due to the laws establishing the

ratios in the two countries respectively, making the two metals
interchangeably legal tender at a ratio in one country different
from that at which they were legal tender in the other.
Mr. A L D R I C H .

I invoke in behalf of the statement which I

make the very law which the Senator has been stating with


such clearness.

I believe from £834 to 1873 the United States

paid $1.29 an ounce for silver bullion for coinage purposes, and
practically th e French people paid $1.33 an ounce for silver.


a law as invariable and as irresistible as the law of gravity the
silver went to the Fr ench mints to be coined.
3 per cent more was paid f o r it there.



That will be true in India,

and it has always been true everywhere.
The Senator says it is the law of legal tender that fixes the
value of silver.

Take the example of India, which has had her

mints for a generation open to the free coinage of silver at the
ratio of 15 to 1, and with the silver rupee at the par value of 2
shillings, we have seen the purchasing power of that rupee g o
down, down, down to 1 shilling and 3 pence, although there are
270,000,000 of people who were using silver as currency.
Mr. JONES of Nevada.
Mr. A L D R I C H .

I must deny the Senator's statement.

T h e people of India who hold this silver can

not get to-day in any country in the world any more than its
market price in India and its bullion price in London for their

I say that there is no country on the face of the globe,

civilized or uncivilized, which would pay any more for this Indian coin than its bullion market price in London; but if we say
in the United States that this great Government, that this great
people, with our vast resources, will make an open offer of $1.29
an ounce for something that is not worth over 70 cents in the
other markets of the world, if the Senator asserts that that silver will not flow to the United States for a market, then he does
not believe in any of the natural laws which govern this and all
other questions.
Mr. JONES of Nevada.

Mr. President, the proposition of the

Senator borders on absurdity, if I may say so without meaning
offense to the Senator.

The idea that the people of India are

g o i n g to trade off that which is essential to the peculiar civilization which they have for something that they do not need and
never use, will not stand for a moment.
The Senator talks as if the people of India were hungering
and thirsting for grold.

They do not want it.

W e have nothing

that they could buy with it, since we produce nothing whatever
that they use.


W h e n the Senator states that silver has been continually declining in value we deny it, and have denied it, and supported
our denials with proofs over and over again.

He produces no

proof of any such decline.
T h e silver rupee buys as much for the East Indian to-day as
it ever did, and yet Senators insist that it has fallen.
do not prove it.

But they

By reference to no range of prices anywhere,

by reference to no products of labor anywhere, do they prove
that it has fallen.

The Senator does not see that it is gold that

is rising and not silver that is falling.
Mr. A L D R I C H .

The Senator says we can give the East In-

dians nothing in exchange.

W e have gold which the Senator

himself says represents everything and purchases everything.
Mr. JONES of Nevada.
standard countries.
money is silver.

It represents everything in gold-

But the Hindoos do not want gold.


To them silver represents everything and pur-

chases everything.
Mr. A L D R I C H .

Let us look for a moment and see.

T h e In-

dian ryot has the rupee, with which he purchases clothing or
whatever it may be.

He might get a certain quantity to-day at

a certain price of silver.

Whatever might be the relation be-

tween the price of wheat and the price of silver in India, he
certainly would get twice as much if he could change that rupee
into twice as much gold, whatever the article to be purchased.
Mr. JONES of Nevada.

He gets wheat and rice, and such

very few other things as suit his limited needs, in his own country.
Mr. A L D R I C H .

He wants to purchase something, or else he

would have no use for the rupees.
Mr. JONES of Nevada.

Millions upon millions of Hindoos do

not even know that ther6 is such a country as the United States.
A r e they going to send rupees here to be exchanged for gold so
that they can buy some rice and wheat, which are growing r i g h t
around them?
Mr. A L D R I C H .

I do not think that is a fair answer.

Mr. JONES of Nevada.

I think it is.

Mr. A L D R I C H . The real argument reduced to its last analysis is simply this, that there are people in the world to whom


it would make no difference whether the purchasing power of
their money should be doubled.
Mr. JONES of Nevada.

But the purchasing power does not

depend upon the relation between it and gold as is shown by the
fact that twenty years ago the relation between that silver and
gold was 33 per cent different from what it is to-day, and yet the
purchasing power of silver was as great then as that of gold.
Does the Senator deny that fact?
Mr. A L D R I C H .

I do indeed.

Mr. JONES of Nevada.

I made a speech in this Chamber in

1890, in which I demonstrated in detail by figures of actual market prices of commodities and of silver bullion that a given number of ounces of that bullion would then buy or command as
much of commodities in the market as would either silver money
or gold money in 1873.

That demonstration has not been criti-

cized or shown to be incorrect in any particular, and can not be.
The figures were based upon quotations of prices furnished by
the Bureau of Statistics of the Treasury Department.

I assert

now that the silver rupee will purchase as much to-day as it
would in 1873, when at our relation silver was 3 per cent premium over gold.
Mr. A L D R I C H .

I think I can illustrate what I mean by

making this statement: A thousand rupees represent say 165,000
grains of silver.

That silver could be sent to London to-day and

exchanged for a certain amount of gold.

If the United States

bids double the present price of silver it could be exchanged
then for twice that amount of gold.
Mr. JONES of Nevada.

Does the Senator suppose, when the

Government of the United States gives $1.29 an ounce for silver
that anybody can get an ounce of the metal for any less than that
amount anywhere in the world?

Does he not suppose that it

will be $1.29 every where?
Mr. A L D R I C H .

If we bid $1.29 it will all come here.

Mr. JONES of Nevada.
to exchange it.

Suppose it comes; all we can do is

It can be exchanged as well where it is.

W h e n this subject comes to be carefully examined it will be
found thatremonetization will simply put silver back to where it
was before it was demonetized.

It had run along for nearly a cen-


tury with practically no change.

W h y should it have changed

since 1873 any more than before, except for that one legislative

There is not the slightest reason why a trifling increase of

the quantity produced should affect the relation between the

During the infinitely greater increase in the yield of

gold after 1848 the metals did not separate, but were held together by the law of France.

This country is now infinitely

stronger than France was then, and has an absorbing power for
money greater than all Europe combined.

It consumes per

capita three times as much of all the products of labor as does
the population of Europe.

The money-absorbing capacity of

this country is unequaled by that of any country in the world.
(At this point the honorable Senator yielded to Mr. VOORHEES
for a motion to adjourn.)
Monday, October 16, 1893.

Mr. JONES of Nevada.

Mr. President, the remarks of the

junior Senator from Massachusetts [Mr. LODGE] a few moments
ago in support of his resolution to forbid the reading here of
written speeches demonstrate that the adherents of the gold
standard do not believe it to be worth while to make careful
preparation for the discussion of this great economic question.
Y e t I call the attention of the Senate to the fact that scarcely a
single contention of those who oppose the pending bill has been
answered in any speech on the gold-standard side.

W h e n there-

fore the junior Senator from Massachusetts tells us that he wants
no written speeches delivered in the Senate, it means that he
and those who agree with him are willing to discuss this great,
all-absorbing, and far-reaching question either as I have said
wholly without preparation or with such preparation only as
may be involved in committing to memory a Fourth of July
The preparation to be made for a discussion of this subject
consists not in schoolboy attempts to commit speeches to memory f
but in a serious and careful study of the reasons for and against
the passage of the proposed measure.

So far as I am concerned

I have no desire to commit speeches to memory, but I do wish


that any speech of mine to which the Senate may do me the
honor to listen shall bear evidence at least that some " midnight
oil' had been expended in its preparation.
I have attempted to demonstrate that there is not in money
any such thing as intrinsic value; that, essentially, money is not
a material thing, but a function, which function vitalizes and
gives value to the piece of material which serves as the bearer
of the function.


But while money is a function rather than a material, yet it is
correct enough by a species of metonymy to designate by the
name " m o n e y , " the material on which is impressed the symbol of the supreme authority of the nation, by right of which
alone any object may exercise the money function.

For, as we

say that a man has a clear head when we mean that his judgment
is good, or that he is a brilliant man when we mean that he has
a superior mind, so the name " m o n e y " may with propriety attach to the thing upon which the money function is impressed.
The word has a peculiar derivation—one that should invite reflection.

It comes to us from the Latin word which signifies a


The coining operations of the Romans were long

carried on in a temple dedicated to Juno, under the appellation
of Juno Moneta, because on the occasion of an important battle
the goddess had given to the Romans a warning or admonition,
by taking advantage of which they were successful.

Thus the

origin of the word has a significance far beyond that which the
Romans intended—a significance which has continued to the present time, and will continue while man inhabits the planet. This
warning, correctly interpreted, signifies that no institution of
civilization is of greater importance than money.

T o a free

people especially it signifies that none should be more sedulously
studied, none so carefully regulated, none so vigilantly guarded,
if they would preserve not alone their prosperity, but their liberties.
Money being useless to man in a condition of isolation, and
therefore entirely a societary instrumentality, it must be the
creation of society (that is to say, in so far of governments), and
can not be that of an individual, except as he may derive power


from the supreme authority—the authority which represents the
people in their collective capacity.
Money may be composed of anything capable of division and

division in order that the pieces may be con-

venient for handling, and identification that all men may know
these pieces to be duly authorized units of money.
So long as those pieces are capable of complete identification,,
and can, regardless of the credit of the persons using them, be
passed and received from hand to hand in the community, in
final payment for commodities and services, and in full legal discharge and liquidation of debts, they constitute money, without
reference to the material of which the pieces may be composed.
This is the teaching of history, and the unavoidable deduction
from the reasoning of the leading economists—a deduction f r o m
which there is no more escape than from the principles of human
But while, abstractly considered, the material is of no importance, yet from the point of view of the habits and customs of a
people the material is of much importance, provided there be
enough of it to maintain the general range of prices of commodities at a steady level.

A people's habits and customs are not to

be ignored with reference to the material of the money which
they shall use any more than with reference to anything else
which has been hallowed by time.

A material that has been in

use among a people from time immemorial can more readily be
continued in use than can a new material find acceptance.


inasmuch as it is not for its own sake that money is needed, but
in order to effect exchanges and maintain the equities of time
contracts, if there be not enough of such material to maintain
the general range of prices at a steady level, there should be no
hesitation in adding to it a sufficient quantity of some other fitting materia] to accomplish that purpose.


W h i l e , in discussing the question of money, some of the minor
authorities have exhibited much confusion of thought, the great
authorities—the dominating minds—give us a body of principles
which compel the mind in search of truth to accept the principle that whatever society decrees to be money is money. As


Prof. Francis A . W a l k e r says: Whatever does the work of
money is money—whatever performs the money work is the money
The value of the unit of money, so far as human wisdom and
prescience can provide, should be unchanging.

The expression

" value of m o n e y " does not mean the commodity value of the material, but the money value of the unit.

Money is valuable, not for

the power of being transformed into one thing, or, as is said, of
being "redeemed" in one thing, but the infinitely greater power—
the power which the alchemists sought, and which Aladdin
foreshadowed—the matchless and magical power of commanding, as by the wave of the enchanter's wand, the transformation and transmutation of all things into one another at will.
This is the power which constitutes money the greatest instrumentality of an advancing civilization.

In comparison with

this all-embracing power how insignificant the power which
commends the material thing on which money function may be
placed to the admiration of savages for the trivial purpose of
decoration—whether the decoration be as with the more civilized
people for the wrist and the neck or, as among less civilized,
for the ankle and the nose.

Money has value for the reason de-

scribed by the prophet—because it "answereth all things."
Money not being essentially a material thing, but an office o r
purpose served by a material thing, its value does not, as I have
stated, depend on the cost of production, or the cost of reproduction, of the material which may be selected to bear the evidence
of monetary authority.


T h e sole constituents of its value are supply and demand; that
is to say, the supply of money and the demand for money.
In a system of civilization such as ours, based upon a division of
labor by which men no longer make complete articles, but only
parts of articles, no man can by his own efforts supply directly
anything but the merest fraction of his own wants.

He can

only secure the satisfaction of all his wants by exercising his
skill in his own vocation, and by disposing for money of the articles or parts of articles which he has made, demanding, through
money, such other articles as he needs.

Inasmuch, then, as it


is through money that men seek the satisfaction of their wants,
it is on money that the first demand for all things presses.
In modern civilization none but mendicants make demand
directly for coats, hats, shoes, or other things.

W h e n men want

hats, shoes, or clothes they do not offer to exchange labor directly with the hatter, the shoemaker, or the clothier.


offers his labor to employers of his own trade, and with the resultant money makes an effective demand upon the hatter, shoemaker, or clothier.

All objects that are useful to man and de-

sired by him are thus obtained by means of money.

Hence the

demand for money is equivalent to the demand for all other
things, and must always be infinitely greater than the demand
for any one thing.

As to any other article or object, the de-

mand is merely for one article or class of articles; as to money,
the demand is a demand not for one article, but for all articles.
The competition for money, therefore, is not only incessant
but instant, urgent, importunate, and universal.
have needs it will be ceaseless and unremitting.

So long as men
Each worker

gives his services not for goods to be obtained from the maker
of such g'oods, but for money to be obtained from his own employer.

Each employer, in turn, parts with the goods made by

the workman, not directly for other goods but for money.


all men are engaged, each in his own vocation, in unceasing
competition w~ith every other man, for units of money—each hatter in competition with every other hatter, each shoemaker with
every other shoemaker, and so the process continues through
the long round and procession of occupations.
The competition for money is therefore equal to the competition for all other things combined.

The demand for it is equal

to the sum of the demand for all other things.
A s to the supply of money, upon which that demand is made,
it does not consist of any special hind of money or material of

The demand is for any or all kinds or materials that

may be in use as legal tender and which may be decreed by society to be money.

The supply of money in a country, therefore,

is not the supply of a particular kind but the total supply of all
kinds—the number of monetary units either at the time in ac785


tual circulation or susceptible of being at any moment placed in
Here we have an equation in which, on one side, stands a total
demand for money and on the other a total supply of money.
The force of demand operating upon supply determines the value
of money.

The important feature of this value is not the total

value of all the money in a country, but simply the value of the

A s already stated, money has not a value distinct and

apart from purchasing power.
Y e t there is no fallacy so universally accepted and adhered
to in the popular mind as that the value of money means the cost
of production of the material of money.

It especially suits the

purpose of the champions of the gold standard that the masses
of the people shall be led to believe that the value of money depends on the value for commodity uses of the piece or material
on which the money stamp is placed, because inasmuch as gold
has now free access to all the European mints, and there is no
charge for coinage, the mint price will naturally be and remain,
invariably, the commodity price, while the portion of silver that
has no access to the mint may, for commodity purposes, be of
less value or price, stated in terms of gold, than the ratio established by law for such portion of that metal as may be made into
One of the metals being potentially money as soon as smelted
from the ore or dug from the sand, while a portion of the other
is left uncrowned and devoid of the money function, no comparison can be instituted between the uncrowned portion of one
and the crowned portion (which is the entire portion) of the other.
It must be observed that all the silver that in any country of
the world is in full use as money of final payment—such portion as has been crowned (as all gold has been crowned)—has the
full power and value of gold money at the relation established
by law.

No man can show any difference between them in their

power to purchase commodities or property.

W h a t sense, then,

is there in these statements about a 60-cent dollar?

If the men

in high station, selected by the people for their supposed fitness
for the places to which they were chosen, would give to a subject of the importance of this one-half the time they devote to



matters of trifling consequence, they would nob mislead the people who have reposed confidence in them.


Any one who will note what the economists say as to the meaning of the term " v a l u e of money " will have no difficulty in arriving at a clear comprehension of it.

John Stuart Mill says:

The value of money is, to appearance, an expression as precise, as free
from possibility of misunderstanding as any in science. The value of a
thing is what it will exchange for; the value of money is what money will
exchange for—the purchasing power of money. If prices are low, money
will buy much of other things, and is of high value; if prices are high, it
will buy little of other things, and is of low value. The value of money is
inversely as general prices, falling as they rise, and rising as they fall.—
Political Economy, Book III, chapter 8.

This statement of the great economist can hardly be misunderstood.

He applies the term " v a l u e of money " wholly to the

relation which money bears to commodities, not to the cost of
production of the material of which money is composed.


saying that " the value of money is what money will exchange
f o r , " he adds that the value of money is " i n v e r s e l y as general
prices—falling as they rise and rising as they fall "—showing
that he regards the value of money as wholly a question of its
purchasing power.
On the same subject Prof. P. A . W a l k e r says:
When we speak of the value of either gold or silver we mean the power ithas to purchase other commodities, including the one element of money besides itself.—Money, page 230.

A n d again Prof. W a l k e r says:
Economists have been wont to make this distinction between value and
price: Value is purchasing power—power in exchange; price is the power
to purchase money—it is the money value of commodities. Money itself,
then, while it has value (the value of a given amount of money being measured by the quantity of commodities it will purchase) has not price.— Money,
page 229

Prof. Sidgwick emphasizes the signification of the term by
stating that in economic discussion there is no method of avoiding confusion except by always and everywhere insisting that
the only correct interpretation of the term "value of money," is—
The purchasing power of money, or its exchange value measured in commodities
other than money.

Prof. Fawcett, once a cabinet minister of Great Britain and
a distinguished professor of political economy in the University


of Cambridge, is equally emphatic as to the meaning of the
term " v a l u e " when applied to money.

He says:

When, therefore, in political economy the precious metals or the value of
money is spoken of, the pur chasing power of money is referred to; or in other
words the power of money to obtain other commodities in exchange for it.

He continues:
It must, therefore, he distinctly borne in mind that although men of business consider the value of money to be represented by the rate of interest,
yet the signification which is here—

that is, in political economy—
attached to the money, is such as to describe the value of money to be great
when prices are low, and to be small when prices are high —Political Economy, page 364.

So that Prof. Fawcett sees no value in money except through
prices, that is in its command over commodities.
useless to multiply authorities.

But it is

A l l that are worth quoting are

to the same effect.
Inasmuch, then, as the term " v a l u e of m o n e y " signifies
simply purchasing power, the total value of all the money in a
country would, at any given amount, be the same, whatever the
number of units into which it might be divided.

If a country

has $1,000,000,000 in circulation, the total value of that entire
sum would be as great as if the number of dollars were at that
time two thousand millions.

The only difference would be that

the unit—the dollar—would in the first instance have twice as
much purchasing power as in the second.
The money unit being the unit by which human effort or sacrifice is measured, the consideration with respect to it that outweighs all other considerations is that of stability of value.



societary condition


is indispensable to the

civilization and progress of man, and money the dominating institution by which aggregation and association are possible,
without which progress would be unattainable, if there be one
object that, more than another, demands the attention and
thoughtful consideration of mankind, it is to maintain unchanging through time the value of the monetary unit.




Money differs from all other things in the fact that there is no
substitute or alternative for it, and in the nature of things never
can be.

In the utilization of all other things that tends to the



comfort or convenience of man advantage is taken of a law of

If a thing which has been in general use becomes

for any reason very scarce, and as a consequence very dear, a
proportion of the people abandon its use, and adopt something
which serves the same purpose.

Thus, if, owing to the preva-

lence of distemper which carries off considerable cattle, beef rises
in price far beyond its ordinary limit, large numbers of the population will abandon its use, and substitute for it mutton or some
other form of animal food.
If a certain brand of flour becomes much dearer than ordinary
people substitute for it another brand; or if, owing to a failure
of the wheat crop, all flour becomes much dearer, great numbers
of the people will wholly relinquish its use for the time being.
So if one description of wood, say oak, becomes scarce and dear
another wood, as ash or maple, is utilized instead.

This serves

as the defense of the great mass of mankind against the selfishness and cupidity of a few who would without hesitation establish a corner in any single article of universal demand if they
believed that, no matter how high its value rose, the people
would be compelled to obtain it.
If a man be regarded as a public enemy who merely corners
wheat what would be thought of those who combine to corner all
articles of food without discrimination?
money that is precisely what they do.

But when men corner
W h e n they deprive the

world, or, which is enough for our purpose, when they deprive their own countrymen of a sufficiency of money they are
cornering not only wheat, but every other article of food as well
as every article of clothing.

Notwithstanding the fact that gold

is growing more valuable every day, they have so used their
power that the people are deprived of a full and free resort to a

W e l l aware that owing to the very nature of money,

owing to the transcendent importance of the function which
money performs, there can be no substitute for it, and knowing
that the less there is of money in proportion to the demand the
more valuable will become the debts of which they are the
owners, they deliberately deprive mankind by law of the immemorial right to supplement the deficiencies in the supply of
one metal by a resort to the supply of the other.


Mr. President, no matter how high the value of money may
rise the people must have it.

Hence, when it becomes insuffi-

cient for the demand—the monetary obligations of the people
being imperative—the products of labor must be sold for less
money than before.

The value of the unit might increase to such

an extent that the price of a bushel of wheat might fall to onetenth or one-hundredth part of its present figure, yet would the
demand for money be as exigent as ever.

Instead of finding a

substitute for it, as could be done in the case of anything else
that became scarce and dear, people would be compelled to attach to fractional parts of the dollar the value which now they
attach to the dollar itself.
For everything, then, except money, there is some substitute
to which, in case of necessity—in case of a corner—men may resort.

For money, there is none.

The fact of its scarcity and

dearness will not only not lessen the urgency of the need for it,
but will increase that urgency and need.

Inasmuch as nothing

else will pay debt or keep the sheriff flag from the window,
legal-tender money must be obtained at any sacrifice.

This is

clearly recognized by Prof. Sidgwick, who says:
It appears, then, that coin forms an exception to the general rule that the
scarcity of any commodity extends the demand for its substitute.—Political
Economy, page 252.


W i l l the Senator yield for a question?

Mr. JONES of Nevada.


I do not know whether the Senator confines

his proposition to coin, as Prof. Sidgwick put it, or to money
generally, but is not paper a substitute for gold or other coin g
Mr. JONES of Nevada.

I have already stated that anything

which is full legal tender is money.

Then the proposition of the Senator is that

gold can not be increased; but he ignores the fact that the volume of money can be increased outside of gold by the issue of
paper, money of account, and other such devices.
Mr. JONES of Nevada.

My proposition is precisely what I

stated it to be—that there is no substitute for money.


when people refer to " m o n e y of account" they mean money of no

They refer to money that is not legal tender.




fer to devices that will enable a man to get into debt, but when
trouble comes will not enable him to get out.

Nothing is or can

be money in the full or in the proper sense that needs to be redeemable in anything else before it can pay a debt.

Money is

not money if it be confined to redemption in one thing; it must
be redeemable in all things.

The very essence of money is re

deemability in all things that are for sale and all services that
are for hire.

That is the character of money to which I refer.


I suppose the Senator means what is known

as fiat money.
Mr. JONES of Nevada.

A l l money, whether of gold, silver,

o r paper, is " fiat." Money is created by law, and derives its
value from limitation of quantity.

Gold money is as much

" f i a t " money as is paper money, for the reason that for any
other use than the money use there is conceded to be sixty years'
.supply of gold on hand, which, were gold demonetized, would be
available in the market for all the purposes to which gold is
adapted in the various arts and manufactures.

In other words,

gold money is " fiat " money because it has not " intrinsic value."
Owing to the fears of the money-lending classes that legislators
would issue too much paper money, they have preferred that
mankind should adhere to the automatic system—the system of
relying upon the mines for the material of money.
The creditor classes are now, however, departing f r o m that

They are determined to have a system of money in

which the unit shall from year to year acquire greater and
greater control over property, including the products of labor.
Hence in order to restrict to a minimum the quantity of money,
and increase to a maximum the value of the money which they
have already reduced to possession, one of the metals that from
immemorial time had been used as money is denied the right of
access to the mints, and the other metal established as the only
metal of unrestricted coinage.

In other words, while it had

long been their contention that the world should always rely on
the mines for the material of money, they now announce their
determination that the world must be content with such frag-'
ment of the automatic system as is certain to work an advantage
for the creditors.


Mr. H O A R .

W i l l the Senator please state why France demon-

etized silver?
Mr. JONES of Nevada.

France ceased the coinage of silver

because Germany, having gone to a gold standard, had three or
four hundred millions of silver to sell.

France was determined

not to accommodate Germany by admitting her silver to the
French mints.
Mr. H O A R .

Is it not true, then, that France, which I think

the Senator stated in his speech of yesterday is the ablest financial nation in the world, demonetized silver for precisely the
reason, in the first instance, that we are asked to repeal the
Sherman law, to wit, that if she did not do it, the silver of other
countries would be put on to her and flood her at once?
Mr. JONES of Nevada.

It was a political, not an economic

reason that actuated France.
tional pride.

It was a reason founded upon na-

It was hatred of Germany, not any fear of silver—

which had always been and continues to be the popular money
of France.

The French people would not at that time take the

silver of Germany nor anything that was German under any conditions, no matter how pecuniarily advantageous it might be for

But without reference to the motive of France, there

is one good and sufficient reason why this country can not afford
to follow her example.

A s I have already remarked, it is pop-

ulation that makes a demand for money.
there would be no demand for it.
there is increasing demand.

Without population

W i t h increasing population

W i t h a stationary population the

demand for money is stationary.

In respect to increase of pop-

ulation this country is in a wholly different category from ail
other nations of the world.

The population of France practi-

cally is stationary, while ours is increasing at the rate of


cent a year—a percentage unprecedented in the history qf nations.

T h e population of France has not increased as much in

ten years as ours has in four months.

France is an old and fin-

ished country, while our country is new and unfinished.
Mr. H O A R . W h a t I wish to ask the Senator is, if, in his judgment, it was good finance in France, the ablest financial country


in the world, as he stated, to demonetize silver, whether it would
not be good for us?
Mr. B U T L E R .

Do I understand France has demonetized sil-

Mr. JONES of Nevada.


France simply ceased to coin

Mr. H O A R .

That is all the Sherman law provides for.

Mr. B U T L E R .

I am not talking about the Sherman law.

Mr. JONES of Nevada.

Does the Senator from Massachusetts

think that the condition in France, with a stationary population
would apply to this country, where we are increasing in population at the rate of 2,000,000 per annum?
Mr. H O A R .

I will answer the question with great pleasure,

if the Senator would like to have me do so.
Mr. JONES of Nevada.

I should like to have the Senator

do so.
Mr. H O A R .

I think the rule for a stationary population and

for an increasing population would be the same in this respect,
that if the flood of the inferior metal was likely to be so great
as not only to provide a legitimate increase of currency for the
wants of the population, but to drive out the gold of the world,
so that the country would have left for its own use nothing with
which it could pay its debts to foreign nations, exactly the same
doctrine would apply.

I think that is one fallacy in the Sena-

tor's proposition.
Mr. JONES of Nevada.

If there were a flood, if it would

bring in one thing, and if it would drive out another—and I do
not - know how many more " ifs "—certain results would follow.
Mr. H O A R .

I answered the Senator's question exactly.


question was preceded by an " i f . "
Mr. JONES of Nevada.
Mr. H O A R .

I do not remember that it was.

The Senator asked me if it was proper for a na-

tion, with a population increasing two or three millions per annum, to do the same thing which a nation wonld do whose population was not increasing, and I replied that if the circumstances were such that the proportion of the cheap metal and
the demands of the nation increased more largely than the increase of population, such would be the case.
a hypothetical case to me, and I said " yes."

The Senator put


Mr. JONES of Nevada.
is any such increase.

The Senator fails to show that there

I understood the Senator to say in his

speech some days ago that he was a bimetallist, and that his vote
in favor of the pending measure would not be a vote against silver.

H e knows that our population is increasing at the rate of

nearly two millions every year, and yet he proposes to cut off
such little supply of money as we have been getting through the
operation of the Sherman law.

Nobody pretends that there is

a flood, or any danger of a flood, by reason of the four and a half
millions of silver purchased per month.
Everybody w ho has examined the question knows that a Treasury note issued last month, or any month within the past year,
was worth more than the first note issued under the Sherman

Each month has seen each note more valuable.


then, I should like to ask the Senator, does he excuse himself to
his conscience for cutting off this money, increasing the burdens
of debt, and increasing the number of people relegated to
involuntary idleness by reason of falling prices?

W h y does he

propose to cut off the present supply when it is proved not to be
Mr. H O A R .

Because we have got now a larger amount of

currency per capita than that of any other nation on earth.
Mr. JONES of Nevada.
Mr. H O A R .

That will not do.

That is the Senator's opinion.

W e have a sup-

ply which is to increase for a number of years to come by the
coining of the existing bullion in the Treasury, and by the increase of whatever comes in of the new product of gold.


shall also have, in my opinion, ail the paper instrumentalities
wThich are to be added for the next five or ten years, until there
can be a reconstruction of our financial policy on a theory which
will use both gold and silver, as I conceive they should be used,
for the purpose of national coinage.

I hold that we ought to

have not only an abundance, but an increasing supply of curency for the people of this country.
Mr. JONES of Nevada.

The Senator does not answer the

proposition I have made.
Mr. H O A R .

I think I have answered it.

Mr. JONES of Nevada.

I alluded to the fact that the sub-


committee of the Committee on Finance, of which, I think, the
Senator from Rhode Island [Mr. ALDRICH] was chairman, made
an examination of the range of prices, and found there had been
a fall everywhere.

Did the Senator ever hear of inflation sim-

ultaneously with a fall of prices?
Mr. H O A R .

Not in labor.

Mr. JONES of Nevada.
Mr. H O A R .

Labor is not like a bushel of wheat.

Will the Senator pardon me?

W h e n he states

a fact will he permit me to say, in all respect, he should state a
Mr. JONES of Nevada.
Mr. H O A R .

I spoke of commodities.

The Senator said there had been a fall of prices
His argument about labor is another question.

L e t us finish the other first.
Mr. JONES of Nevada.

There is a fall in the price of labor

also, if you take into account the number relegated to compulsory idleness.
Mr. H O A R .

That is not what the committee finds.

Mr. JONES of Nevada.

I do not care what they find. I am

stating the fact that millions are out of employment.
Mr. H O A R .

Does the Senator think it is quite the way to

conduct this debate, which he is conducting so much to our instruction, for him to affirm that the committee said something
as a fact, and when I pointed out that they did not include labor,
he says he does not care whether tney did or not?

Then he

says that they found labor was relegated to enforced idleness;
and when I say in reply, " Yes, they include labor," the Senator


do not care whether they include labor or not."

Mr. JONES of Nevada.

That committee had two objects in

T h e Senator from Rhode Island took the position that

the fall of prices was due to the operation of the tariff.


then Senator from Kentucky, Mr. Carlisle, wished to show that
the fall was not due to that cause, and the Senator from Tennessee [Mr. HARRIS] agreed with him.

I will say to the Sena-

tor from Massachusetts that in gold-standard countries all over
the world the price of labor is falling, as is evidenced by the
unprecedented strikes now on in Great Britain and elsewhere.
But when we say that a shrinkage in the volume of money


causes a fall in prices, we do not mean to say that the fall takes
place coincidently with the shrinkage in that volume, or that
when it does take place, it is necessarily of the same percentage as that of the fall of prices, because, as I have already remarked, every power of society is exerted to keep prices from
Every man who has anything to sell does everything in his
power to hold prices up.

This determination to keep prices

steady at a time when the volume of money is not keeping pace
with demand finally results in a collapse.

That is the real gen-

esis of the recent panic, as I shall show later.

The range of prices

which prevailed was becoming daily more and more incompatible with a quantity of money that was diminishing relatively to

The increase of population and business was greater

than the increase of money.
Mr. H O A R .

W e were trying to get at what the committee

said, and I think the Senator stated it erroneously.
Mr. JONES of Nevada.
a general fall in prices.
of labor.

The committee said there had been
But they could not separate the prices

Labor that is idle is getting no " p r i c e " whatever.

The attempt to maintain the gold standard in this growing country reminds me of the story of a man who went into a clothing
store to buy a coat.

In response to his demand the proprietor

of the establishment promptly took down a coat.

The man man-

aged by great effort to get his arms into it, and by the aid of the
clothier and two or three of his clerks the coat was finally buttoned.
T o the eye of the looker-on it then appeared as if it had grown on

Said the clothier: " T h a t is the nicest coat that any man

ever put on."

The customer replied: " It is a nice enough coat;

there is only one difficulty with it; I can't move in it, or take a
full breath; my blood won't even circulate."

To this the ever-

ready clothier replied: " M i n e frient, when a man has a chance
to get such a coat as that, he ought to be willing to train down
toit\" [Laughter.] So it is with our gold-standard friends. They
are determined that the country shall " train d o w n " to the gold
standard. They will find our people hardly ready to ' t train down "
quite so much.

The people of this country prefer to have clothes


large enough to admit of natural and unrestrained breathing and
I will now resume the thread of my argument at the point at
which I was interrupted.

I was discussing the importance of

stability of value in the monetary-unit.

It being impossible, then, to provide a substitute for money,
and the demand for it being always at a maximum, it is the only
thing the demand for which can be measured and ascertained in

It is the only thing the very nature of which gives

absolute assurance that it can not be dispensed with, or that the
demand for it will in the slightest degree fall away.

That de-

mand is always in a direct ratio to the demands of all the people
for all the things that satisfy human wants.

Those wants do not

decrease with time; they are certain to increase with population.
The struggle for money being always at a maximum, the
value of the unit can not be increased except by decreasing the
number of units while the population remains stationary, or increasing the numbers of the population while the number of the
units of money remain stationary.
Money is as indispensable to men in society as the air they
breathe is to their individual existence, and as necessary to their
industrial advancement as liberty is to their political development.

If the air which is necessary to our physical being should

at times be found sufficient and at times insufficient for the sustenance of life, would it not be deemed a defect in the order and
arrangement of the universe and of the adaptation of means to
ends?—or at least would not men exhaust the resources of
chemistry and natural philosophy to devise means by which a
sufficient quantity of it might be evolved from other gases or
other forms of matter to sustain the lives of all who m i g h t be





B y slow and painful toil man has emerged from barbarism,
advancing step by step in the different departments of science
and art.

In astronomy, in chemistry, in every walk of science,

the human mind has been on the alert, the theories of ages have


been overthrown and entire revolutions effected.
ress in the arts.

Take the art of locomotion.

Note the prog-

First, the weari-

some journey on foot, pack on back; next, the subjugation of
the brute creation in order to lessen the drudgery of man; next,
the invention of the wheel for land carriage, an invention of
prime importance; next, the utilization of one of the forces of
nature—water—in its natural bed, to sustain the load, while
with paddle or oar men propelled raft or boat; next, still availing of the use of this agent in its natural place to float the burden, calling in the assistance of another force s the wind, to
propel it.
Later, and only after long ages, men learnt the secret of taking the water from its place and transporting it with the burden,
invoking the assistance of another natural force, heat, to subdivide that water into minute particles which by expansion provided an irresistible power, by means of which ships may "sail"
against the wind and by which trains have reduced the toilsome
and exhausting land journey of months to the pleasant and exhilarating trip of as many days.

A n d now comes the electric

force, the unit of which constitutes a subdivision of matter infinitely more attenuated than the most minute atom of water.


this progression of discoveries and achievements in but one single
department of human effort!

And who can say that the end is

In every department of science and art, of literature and

philosophy, we see eager and intensely active minds ever on the
alert for the discovery of new truths which may enable mankind
with infinite and unappeasable curiosity to peer one step farther
into the great unknown.
But with reference to money, the thought of mankind appears
to be still in the paleozoic age.

Notwithstanding the enlightened

civilization of our time, men sufficiently scientific and clever to
calculate the distance from the earth to the sun—to compute
the periodicity of comets, and, by the aid of the spectrum, to analyze and subdivide the solar ray, are found to be as children in
the domain of monetary science.

Even the economists them-

selves—dimly seeing the " kindly l i g h t , " and fearing to follow,
are content to argue in a circle and grope in a darkness compared with which midnight may be called noon.

Students of


books rather than of men—of theories rather than of life—struck
with awe at the power of wealth and the glamour of privilege—
they either pause at the very threshold of discovery and retrace
their steps, or, seeing the truth, prefer to appear ignorant lest
they g i v e offense to the mighty.
Many of the most able economists, aware of the serious injustice effected by changes in the value of money, especially changes
by which the value of the unit becomes greater—acknowledging
its existence to be an evil of enormous proportions, are content
to stammer falteringly forth the truth as it is, and permit the
evil to continue without protest and without effort at a remedy.
A s for that class of so-called statesmen and writers, who regard the value of gold as fixed and immutable, their ignorance
or conceit, or both, entitle them either to commiseration, or to
contempt; and were it not for the injury which results to society
from the persistence with which the assertion of this error continues it would not be wortn noticing.

But we find men in ex-

alted places who take up this subject of an afternoon in an easy
chair, giving forth solemn and ponderous opinions upon the gold
standard in order that we may have " t h e money of the world,"
as if justice were not more to be desired than gold, and as if the
United States did not form an important part of " the w o r l d " —
for us here by far the most important part.

Stability of power in this important factor in human affairs
is of precisely the same importance that stability of power is in
the factors of our numerical notation.

In that system all de-

pends upon the immutability of the power of the single unit—the
figure 1—the same yesterday, to-day, and forever.

W h a t would

be thought of a system of computation in which that figure, which
now stands for our conception of a unit, and which forms the
basis of all calculations, should, a year hence, stand for the conception which we now entertain of a unit and a half, and should
keep progressively adding to its mathematical power, so that
two years hence it would represent what we now conceive to be
the power of one and three-quarters, or two, or any other sum
that m a y b e imagined, without rule or precept, without guiding

I l l

or governing- principle—the creature of accident and contingency?

Such a system would result in the destruction of all

mathematical accuracy in transactions extending beyond the
present moment, and would require, every few years, a reconstruction of all equations and calculations.
If it bo important to maintain unchanging the power of the

unit, which is the basis of all measurement and

account, it is no less important to maintain as undeviating and
invariable as human wisdom can devise the enormously important power of the unit of money—that instrumentality by which
the mutations in value, of all other things, may be correctly ascertained and determined.

It will be at once conceded as t o

mathematics that were a system of accidental or fortuitously
shifting notation to exist side by side with what in other respects might be a high civilization, it would be wholly unworthy
of the genius and achievement of the human mind.

Y e t , the

monetary system of the world, and especially the gold standard,
is a close parallel to this.

T h e value of money is permitted to

become greater or to become less—to increase or to diminish—
from year to year, not, as alone should be the case, according to
changes in the relations of supply and demand affecting the articles which it is the function of money to exchange and to measure, but most momentous changes occur in the value of money,
from considerations arising from irregularity in the supply of
money itself.
The only changes in the value of money that can occur from
causes affecting itself must be from causes affecting supply alone.
There is never any cessation in the demand for money.


human wants remain insatiable that demand must always be at
a maximum.

Money exercises control over all human needs... Those needs
are not accidental or sporadic; they are regular, continuous,
unceasing, and exigent.
were yesterday.

They are not less to-day than they

They do not depend on contingencies.

urgency is not momentary or transitory.


The need for food is

as regular and inevitable as the flow of time: the need for


clothing as periodical and imperative as the recurrence
the seasons.


Inasmuch as, with division of labor, it is only

through money that these needs can be satisfied—that supplies
of food and clothing must be obtained—as well as all other material things that pertain to the comfort and happiness of man,
upon what principle of reason, I ask, should the supply of money
be permitted to vary according to accident?
This being the teaching of all the great authorities on political economy, how do Senators explain the paradox which they
set up, namely, that although gold might be suddenly withdrawn from the country, all the other money of the country,
which did not go, would buy less than before—in other words,
a reduction in the volume of money—the making of dollars
scarce—would make each dollar less valuable instead of, as political economy teaches, making each more valuable.


theory is that the silver dollar would fall to its bullion value;
that there would be a great rise in the prices of commodities, for
that is the meaning of a fall in the value of money.
W e know that among 70,000,000 people every guild and occupation is in daily and incessant competition with every other
guild and occupation for units of money—that every man is in
unceasing competition with every other man—all for units of

Hence, prices can neither rise nor fall all along the

line, unless some change takes place in the demand for money.
How, then (population and demand continuing the same), is it
possible for any one man, or set of men, to change the value of

It is absurd to suppose that the value of money among

70,000,000 active and alert people is determined by Mr. Ickelheimer, or Mr. Ochelhausen, or Mr. Anybody-else.

If the de-

mand for money remains the same, and the supply be decreased
by the withdrawal of the gold, no Senator can explain how it is
possible for the silver dollar, or any other legal-tender dollar, to
fall even in the most infinitesimal fraction of a cent.
T h e life of money is the legal-tender function.

That function

is the all-sufficient guaranty of the money value.

A s I have

said, if I take a piece of silver bullion not having the potentiality of money and search all Washington, I m i g h t not find
one man in ten thousand who would make a demand for it.


W h i l e in that form, the demand for it is a demand for but one
thing—silver bullion.

But put the stamp of the Government

on it and endow it with the function of legal tender,—which, so
far as money is concerned, is the function of life,—and the same
piece of silver becomes a demand for all things, and is capable
of supplying all things, so far as its value may extend.

It is an

order on society for everything on sale and for all services that
are for hire.
Should I fare any better with gold?

If a man took a nugget

of gold, supposing that metal also to be deprived of the potentiality of money, and with it a certificate from the assay office
of the Government, or from the Director of the Mint, or from
the Secretary of the Treasury, to the effect that this piece of
gold is exactly equal in weight and fineness to a five-dollar gold
piece, he would find not one person in ten thousand demanding it,
and such demand as should be discovered would be a demand for
but one thing—gold bullion—a trifling thing in the economy of
civilized life.

But impress it with the stamp of the Government,

making it also subject to the law of legal tender, and instantly
it becomes transmuted into an order for all saleable goods or
If before coinage the piece of gold were round and flat, and
weighed exactly 25.8 grains of standard metal, would that be
a dollar?

A l l agree that it would not.

Y e t it is precisely the

same in every respect with the dollar turned out from the mint,
except that it has not the stamp of the Government.

The in-

stant that stamp has pressed upon it the " image and superscription " provided by law, it is then a dollar.

The word " dollar,"

therefore, is a denomination; it is simply a name for the money
unit of the United States, whether the proof of the fact be
stamped on metal or on paper.

The value that it has is derived

from the law of legal tender, when it becomes an order for all
things on sale in the country issuing it.

Its value, after becom-

ing such ticket of command, is determined by the competition
of all men to get it.

This competition becomes more keen as the

number of dollars decrease in relation to population; it becomes
less keen as the number of dollars increase in proportion to population.

T h e thing that decides, therefore, how much the dol8


lar shall b e worth is not any so-called intrinsic value in the dollar, but the competition of all the people to g e t dollars, that is
to say, demand operating against supply.
N o w , w i t h reference to all o t h e r things than money it is
n e v e r possible to foretell the demand, nor to f o r e t e l l the supply.
T h e adaptability of many things to be called into requisition as
substitutes f o r any one thing, and the consequent variability of
demand, renders it impossible to estimate in advance the demand that will be made on any c o m m o d i t y .

Inasmuch, also, as

the supply of all commodities usually comes f r o m a great variety of sources, and is subject to the widest variations and mutations, it is not within the bounds of possibility f o r human j u d g ment to estimate the probable or approximate supply.
W i t h reference to money, h o w e v e r , were its principles fully
understood, and the factors of supply and demand entering into
its value properly appreciated, it would be a most simple process
f o r society, that is for each country or g o v e r n m e n t , to regulate
its value so that industry would be conducted on a basis of app r o x i m a t e steadiness; and so that any alterations in value w o u l d
be, as they should be, due w h o l l y to causes affecting the relations of supply and demand bearing on the articles or commodities whose value it was desired to measure; and not at all f r o m
considerations affecting the value of money independently and
of itself.
But, it is said, law can not make value.

Do the advocates of

the g o l d standard deny that demand makes value?


edly, law can not make value, because value resides in the human

But when the law creates a demand f o r something and

keeps that demand constant, and unceasing, and unwavering,
then, the quantity of the article being limited, does anybody
doubt that the law w h i c h creates this demand g i v e s to the material a value w h i c h , without the demand, would not attach to it?
P e o p l e want g o l d and silver f o r some purposes in the arts, say
f o r adornment.

But they also want gold and silver f o r the

greatest concerns of life—for the mutual e x c h a n g e s of p r o p e r t y
and to liquidate obligations, that if not liquidated will involve

H e n c e there is a universal struggle to g e t units


of money, to get the things that are made the ultimates of payment.
Their value is automatically fixed by this universal struggle
to get them.

Consequently their value will be determined by

the quantity of them that is out, as compared with the demand
for them.

If this be denied, where would be the danger or t h e

injury of inflation?
It is rendered possible to regulate the value of money f o r t h e
following reasons:
1. The demand for money is not a variable quantity, but is always as great as it is possible to be, depending on all the wants,
of all the people, which are always at a maximum.
2. The supply is the creation solely of the Government, as;
nothing is money until the stamp of the Government is placed
on it, under authority of the great law of legal tender.
Legal-tender money can never decrease in value so long as there
is no increase in its quantity in proportion to population; and it
can never increase in value so long as it does not decrease in quantity in proportion to population.

Inasmuch as it is population that

makes a demand for money, and without population there would
be no such demand, the least increase that should be made to the
volume of money would be an increase pari passu with the increase of population.
These considerations render it entirely practicable for society,
that is to say, for civilized governments, with a fair degree of
approximation, to regulate and prescribe the value of the money
No greater boon since the invention of the art of writing
could be vouchsafed to man than the securing of a perfectly
steady and unchanging value in the unit of money.

It is an ob-

ject well worthy the most enlightened thought of an advanced
age, for, when secured, there will be introduced a new order of
the ages, a new impetus to human aspiration and effort.


nearly as may be it will be the realization in the concrete of
man's ideal of abstract and eternal justice.
The annual gold yield, whether coined or uncoined, being
practically all absorbed in the arts and manufactures, where is
our money now to come from?

No greater injustice was ever

perpetrated upon a people than the cutting-oil ol tne only source
of i n c r e a s e of t h e m o n e y s u p p l y , s o t h a t , w i t h o u t c o m p e l l i n g a f a l l
i n t h e p r i c e s of a l l p r o p e r t y a n d c o m m o d i t i e s , t h e y c a n n o t m e e t
t h e i n c r e a s e of 2,000,000 of p o p u l a t i o n e a c h y e a r .

The Sherman

l a w h a s s u p p l i e d a b o u t $800,000 a w e e k of n e w m o n e y t o m e e t t h e
i n c r e a s e of 40,000 p e r s o n s a d d e d

weekly to our population, o r

o n l y $20 f o r e a c h p e r s o n a d d e d , w h i c h i s a b o u t $5 l e s s t h a n
T r e a s u r y r e p o r t s s h o w t o b e o u r a v e r a g e per



Sir A r c h i b a l d





A l i s o n i n h i s h i s t o r y of E u r o p e p o r t r a y s


e l o q u e n t w o r d s t h e e f f e c t s of a n i n c r e a s i n g a n d a d e c r e a s i n g v o l u m e of m o n e y u p o n t h e p r o g r e s s of s o c i e t y .

H e says:

The two greatest events that have occurred in the history of mankind
have been directly brought about by a contraction and on the other hand
an expansion of the circulating medium of society. The fall of the Roman
Empire, so long ascribed in ignorance to slavery, egotism, and moral corruption, was in reality brought about by a decline in the silver and gold
mines of Spain and Greece. And, as if Providence had intended to reveal
in the clearest manner the influence of this mighty agent on human alfairs,
the resurrection of mankind f r o m the ruin which those causes had produced was owing to a directly opposite set of agencies being put in operation. Columbus led the way in the career of renovation; when he spread
his sails across the Atlantic, he bore mankind and its fortunes in his bark.
The annual supply of the precious metals for the use of the globe was
tripled; before a century had expired the prices of every species of produce
were quadrupled. The weight of debt and taxes insensibly wore off under
the influence of that prodigious increase.
In the renovation of the industry the relations of society were changed,
the weight of feudalism cast off, the rights of man established. Among the
many concurring causes which conspired to bring about this mighty consummation, the most important, though hitherto the least observed, was
the discovery of Mexico and Peru. If the circulating medium of the globe
had remained stationary, or declining, as it was from 1815 to 1849, f r o m the
effects of the South American revolution and from English legislation, the
necessary result must have been that it would have become altogether inadequate to the wants of man, and not only would industry have been everywhere cramped but the price of produce would have universally and constantly fallen. Money would have every day become more valuable; all other
articles measured in money less so; debt and taxes would have been constantly increasing in weight and oppression. The fate which crushed Rome
in ancient, and has* all but crushed Great Britain in modern times, would
have been that of the whole family of mankind. All these evils have been
entirely obviated, and the opposite set of blessings introduced by the opening of the great treasures of nature in California and Australia.
T h e c l o s i n g r e m a r k of t h i s a c u t e o b s e r v e r a n d e m i n e n t h i s t o r i a n c o r r e c t l y states t h a t t h e b l e s s i n g s t o w h i c h h e r e f e r r e d
had been " i n t r o d u c e d , " but unfortunately they had hardly time
to be m o r e than introduced before they vanished.

The supply


of gold began to decline.

Had not the cupidity of the creditor

classes been aroused, the blessings which the increased supply
of gold brought to the world would have been continued to
humanity through the gradual and beneficent increase in the
supply of silver which followed the decline of gold.
Every dollar of gold—the " c h e a p " money of the period, became equal to a silver dollar, then the " dear " dollar.

W h e n in

its turn gold declined in quantity and silver became more plentiful, every dollar of silver would have had precisely the same
effect as a dollar of gold.

It would have continued in operation

the manifold factors of prosparity set in motion by the gold discoveries.

W h e r e v e r silver has been used as full legal tender

money it has proved a blessing, as has been abundantly seen
in India, whose prosperity has never known such rapid advance
as since silver was demonetized in Europe.


In the report of the Monetary Commission of 1876, of which I
had the honor to be chairman, I discussed the effects of a scarcity
as contradistinguished from a sufficiency of money, and with the
permission of the Senate I will make a few quotations from that

The statements fit the situation to-day with the same

exactness that they fitted it then:
" W h e n e v e r gold and silver prices have become adjusted to a
given stock of those metals, an increase of that stock, other things
remaining unchanged, will cause a rise and a decrease will cause
a fall in prices.

But under such conditions other things never

do remain unchanged.

There are powerful causes, moral and

material, which invariably operate, when money is increasing
in volume, to moderate the rise in prices and to intensify their
fall when it is decreasing.

Hence the fall in prices caused by a

decreasing volume of money would be much graater in degree
than would the rise caused by a proportionately


" W h e n e v e r it becomes apparent that prices are rising and
money falling in value in consequence of an increase of its volume, the greatest activity takes place in exchanges and productive enterprises.

Every one becomes anxious to share in the

advantages of rising markets.

The inducement to hoard money


is taken away, and consequently the disposition to hoard it

Its circulation becomes exceedingly active, and for the

very plain reason that there could be no motive for holding- or
hoarding money when it is falling in value, while there would
be the strongest possible motive for exchanging it for property,
or for the labor which creates property, when prices are rising.
Under these circumstances labor comes into great demand and
at remunerative wages.

This results in not only increased pro-

duction, but increased consumption.

The wants and expendi-

tures of laborers increase with their earnings.



prises, safe and unsafe, are at such times inaugurated by eager
adventurers, and as frequently as otherwise upon insufficient

If, however, the volume of money should increase in undue

proportion to the new demands for it so as to cause a continuous
and persistent rise in prices, it would encourage gambling in
prices instead of encouraging production, and would end in the
destruction of that industry which it at first stimulated.


would be the haste to convert money into property that the price
of all forms of property would advance more rapidly than the
wages of labor.

T h e laborer, excited by the apparent increase

in the value of everything, would soon become discontented with
the slow accumulations of his increased wages.

Using his sur-

plus earnings as a basis of credit, which is readily extended
upon small margins when prices are rising, he would leave the
field of productive industry for the illusory but more inviting
field of speculative venture.
" I t may, however, be possible that when industry has been
dwarfed, commerce paralyzed, and the spirit of


crushed out by long-continued shrinkage in the volume of money
and falling prices, the stimulus of rising prices would be a necessary temporary treatment."
That is what is needed now, a stimulus to prices—in other
words, more money and not less.

Does anyone suppose that

money would remain hoarded one day in this country if it were
known to the people who are hoarding it that more money were
going to be put in circulation, and that, therefore, by a gentle
rise of prices, business all over the country would experience


the utmost activity?

W o u l d not the hoarded money leave its

hiding places on account of the return to be realized from its
use in productive enterprises—in enterprises that would call
from idleness to labor every man who may be out of employment—
and what greater boon could be conferred on a country than
that all its people should be at work?



" A t the Christian era the metallic money of the Roman Empire amounted to $1,800,000,000.

By the end of the fifteenth cen-

tury it had shrank to less than $200,000,000.

During this period

a most extraordinary and baleful change took place in the condition of the world.

Population dwindled, and commerce, arts,

wealth, and freedom disappeared.

The people were reduced by

poverty and misery to the most degraded conditions of serfdom
and slavery.

The disintegration of society was almost complete.

T h e conditions of *life were so hard that individual selfishness
was the only thing consistent with the instinct of self-preservation.

All public spirit, all generous emotions, all the noble as-

pirations of man shriveled and disappeared as the volume of
money shrunk and as prices fell.
" History records no such disastrous transition as that from
the Roman Empire to the Dark Ages.

Various explanations

have been given of this entire breaking down of the framework
of society, but it was certainly coincident with a shrinkage in
the volume of money, which was also without historical parallel.
T h e crumbling of institutions kept even pace and step with the
shrinkage in the stock of money and the falling of prices.


other attendant circumstances than these last have occurred in
other historical periods unaccompanied and unfollowed by any
such mighty disasters.

It is a suggestive coincidence that the

first glimmer of light only came with the invention of bills of
exchange and paper substitutes through which the scanty stock
of the precious metals was increased in efficiency.
" But not less than the energizing influence of Potosi and all
the argosies of treasure from the New W o r l d were needed to
arouse the Old W o r l d from its comatose sleep, to quicken the
torpid limbs of industry, and to plume the leaden wings of com785



It needed the heroic treatment of rising prices to enable

society to reunite its shattered links, to shake off the shackles
of feudalism, to relight and uplift the almost extinguished torch
of civilization.

That the disasters of the Dark A g e s were caused

by decreasing money and falling prices, and that the recovery
therefrom and the comparative prosperity which followed the
discovery of America were due to an increasing supply of the
precious metals and rising prices, will not seem surprising or unreasonable when the noble functions of money are considered.
Money is the great instrument of industry, the protoplasm of
civilization, and as essential to its existence as oxygen is to animal life.

W i t h o u t money civilization could not have had a be-

ginning; with a diminishing supply it must languish and unless
relieved finally perish.






" S y m p t o m s of disasters similar to those which befell society
during the Dark Ages were observable on every hand during the
first half of this century.

In 1809 the revolutionary troubles be-

tween Spain and her American colonies broke out.

These trou-

bles resulted in a great diminution in the production of the
precious metals, which was quickly indicated by a fall in general

As already stated, it is estimated that the purchasing

power of the precious metals increased between 1809 and 1848
fully 145 per cent, or, in other words, that the general range of
prices was 60 per cent lower in 1848 than it was in 1809.


ing this period there was no general demonetization of either
metal and no important fluctuation in the relative value of the
metals, and the supply was sufficient to keep their stock good
against losses by accident and abrasion.

But it was insufficient

to keep the stock up to the proper correspondence with the increasing demand of advancing populations.
" T h e world has rarely passed through a more gloomy period
than this one.

Again do we find falling prices and misery and

destitution inseparable companions.

The poverty and distress

of the industrial masses were intense and universal, and, since the
discovery of the mines in America, without a parallel.

In Eng-

land the sufferings of the people found expression in demands


upon Parliament for relief, in bread riots, and in immense Chartist demonstrations.

The military arm of the nation had to be

strengthened to prevent the all-pervading discontent from ripening into open revolt.

On the Continent the fires of revolution

smoldered everywhere and blazed out at many points, threatening the overthrow of states and the subversion of social institutions.
" W h e n e v e r and wherever the mutterings of discontent were
hushed by the fear of increased standing armies the foundations
of society were honeycombed by powerful secret political associations.

The cause at work to produce this state of things was

so subtle, and its advance so silent, that the masses were entirely ignorant of its nature.

They had come to regard money

as an institution fixed and immovable in value, and when the price
of property and the wages of labor fell they charged the fault
not to the money, but to the property and the employer.


were taught that the mischief was the result of overproduction.
Never having observed that overproduction was complained of
only when the money stock was decreasing, their prejudices
were aroused against labor-saving machinery.

They were an-

gered at capital, because it either decline d altogether to embark
in industrial enterprises or would only embark in them upon the
condition of employing labor at the most scanty remuneration.
They forgot that falling prices compelled capital to avoid such
enterprises on any other condition and for the most part to avoid
them entirely.

They did not comprehend that money in shrink-

ing volume was the prolific parent of enforced idleness and poverty, and that falling prices divorced money, capital, and labor,
but they none the less felt the paralyzing pressure of the shrinking metallic shroud that was closing around industry.

T h e increased yield of the Russian gold fields in 1846 gave some

relief, and served as a parachute to the fall in prices which m i g h t
otherwise have resulted in a great catastrophe.

But the enor-

mous metallic supplies of California and Australia were all needed
to give substantial and adequate relief.

Great as these supplies

were their influence in raising prices was moderated and soon
entirely arrested by the increasing populations and commerce
which followed them.

In the twenty-five years between 1850


and 1876 the money stock of the world was more than doubled,
and yet at no time during this period was the general level of
prices raised more than 18 per cent above the general level in

A comparison of this effect of an increasing volume of

money after 1818 with the effect of a decreasing volume between
1809 and 1848 strikingly illustrates how largely different in degree is the influence upon prices of an increasing or decreasing
volume of money.

The decrease of the yield of the mines since

about 1865, while population and commerce have been advancing, has already produced unmistakable symptoms of the same
general distrust, nonemployment of labor and political and social disquiet, which have characterized all former periods of
shrinking money.


" It is in a volume of money keeping even pace with advancing
population and commerce, and in the resulting steadiness of
prices, that the wholesome nutriment of a healthy vitality is to
be found.

The highest moral, intellectual, and material devel-

opment of nations is promoted by the use of money unchanging
in its value.

That kind of money, instead of being the oppres-

sor, is one of the great instrumentalities of commerce and industry.

It is as profitless as idle machinery when it is idle; dif-

fering from all other useful agencies, it can not benefit its owner
-except when he parts with it.

It is onlv under steady prices

that the production of wealth can reach its permanent maximum,
and that its equitable distribution is possible.
" Steadiness in prices insures labor to all and exacts labor from

It gives security to credit and stability and prosperity to


It encourages large enterprises, requiring time for

their development, and crowns with success well matured and
carefully executed plans.

It discourages purely speculative ven-

tures, and especially those based upon disaster.

It encourages

actual transactions, rather than gambling on future prices.


metes out justice to both debtor and creditor and secures credit
t o those who deserve it.

It prevents capital from oppressing

labor and labor from oppressing capital, and secures to each its
just share of the fruits of industry and enterprise.

It secures a

reasonable interest for ite use to the lenders of money, and a


just share in the profits of production to the borrower.
up the distinction betwe3n a mortgage and a deed.

It keeps

It insures a

moderate competence to the many rather than colossal fortunes
to the few at the expense of the many.

If it be admitted that the

volume of money should increase pari passu with either wealth,
commerce, or population, the least measure of increase would be
that based on population, as in commercial countries both wealth
and exchanges are multiplied more rapidly than population.
T h e narrower measure of increase would probably be the more
accurate one, as the thing to be measured and which it is important should have an unvarying value is human effort, and as
that can neither be increased nor diminished except through an
increase or diminution of the population it would seem that the
volume of money should only vary with population.
" A s steadiness in prices, which depends on steadiness in the
relation between money and all other things, is essential to prosperity, it follows that in any change in money systems, the volume of the new money—that is to say, the number of units of the
n e w money issued—should if possible be neither greater nor less
than the number of units in circulation at the time of the change.
A strict observance of this rule, whatever be the material of
money, will prevent any general rise or fall in prices.
" T h e quantity of metallic money, or of paper money constantly
convertible into metallic money, which can be maintained in the
circulation of any particular country can not be controlled arbitrarily.

It can not be greater than such an amount as may be

requisite to maintain the prices of such country at a substantial
parity with the prices of all other countries using the same kind
of money.

Any change from this amount must be temporary,

and will be soon automatically corrected by the course of exchange."
No country, Mr. President, can keep more than its distributive share of what may be called international money.


might issue bonds until doomsday, and even if you got with
them hundreds of millions of gold for your Treasury, yet if you
do not lock up that gold and keep it under guard it would not
remain. The vacuum created in the money volume abroad
would lead to a fall of prices abroad, while the increase of the


money volume here by the inflow of the gold would create a rise
here, and the moment you unlocked your Treasury it would flow
out again.

It would be as futile to keep gold under such cir-

cumstances as to attempt to pump water out of the harbor of
Liverpool into the harbor of New Y o r k and expect to maintain
two separate levels of the ocean by the operation.
utterly impossible.

It would be

If you have the gold standard you must con-

tent yourself with the gold range of prices and must be prepared
to see the condition of the working and producing masses of this
country brought down to the level of the like masses of Great
Britain and Germany.
" T h e volume of inconvertible paper money, on the contrary,
is local to and subject to the control of the country issuing it,
and should be regulated solely with reference to existing prices,
and consequently should be neither increased nor diminished,
except in correspondence with changes in population and commerce.
" T h e proposition often made that the quantity of money in this
country should amount now to as much per capita as it did at
some anterior period, or to as much per capita as in England or
Prance, rests on no philosophical basis whatever.


of time contracts, it is of no consequence what the volume of
money may be, provided it be subdivided into such number of
units, or fractions of units, as would meet physical requirements,
while the equity of such contracts can be met only by maintaining the relation between money and other things undisturbed."






" Equally fanciful and erroneous is the proposition that the
rates of interest depend upon the volume of money.

The rates

for the use of loanable capital depend upon entirely different
factors, such as the current rates of business profits, productiveness of the soil, the security of property, the stability of government, pressure of taxation, and the fiscal policies of governments,
such as the maintenance of public debts, which necessarily increase the rate of interest.

In truth increasing the amount of

money tends indirectly to increase the rate of interest by stimulating business activity, while decreasing the amount of money
reduces the rate of interest by checking enterprises and thereby


curtailing- the demand for loans.

This is signally illustrated by

the present condition of things in every part of the commercial

The rate of interest should be, and under a correct

money system would be, merely an expression of the rate of profit
which could be made through the use of borrowed capital."
Under a proper monetary system investments in productive
enterprises would be as profitable now as at any time heretofore.
This country is not half built up, and money should find increased
use, and at least undiminished profit, in enterprises that employ

Surely in a country like this, whose development has

hardly more than begun, it must be considered extraordinary
that interest on first-class securities is so low.
interest is always higher than in old.

In new countries

Interest will on the aver-

age represent what men can make by the use of money, else there
would be no reward for the enterprise or energy which induces
men to borrow and invest in industrial enterprises.

Indeed, it

is probable that interest rates represent rather more than, on
the average, can be realized from the use of money in business,
as the hopes of those who have the activity of temperament and
the disposition to invest in industrial enterprises are usually sufficient to lead them to expect too much.
The rates of interest are not fixed by individual borrowers or
by individual lenders, but by the general consensus of experience among men as to the amount of profit which can be made
by the use of money.

This profit is limited and controlled by the

prices of the commodities in whose manufacture the capitalist

W h e n money is shrinking in quantity and its value—

that is its purchasing power—increasing, the fall of prices—
which under the gold standard knows no end—renders impossible the rate of profit on which men of enterprise had calculated
when they entered into business.
T h e fact that rates of interest are constantly growing less is
a sign that the borrower can not afford to pay higher rates.


know that the lender would take no low rate if he could get a
higher; no one will for a moment suspect that the money-lender
would lend his money at less than he can exact from the borrower.

But he must be contented with what he can get.

does not take that rate, his money will lie idle altogether.

If he


m e n of enterprise find no profit in industrial undertakings—when,
they discover that the persistent fall of prices renders impossible a reasonable degree of profit, they either decline to b o r r o w ,
in which case they reduce expenses by d i s c h a r g i n g a portion of
their w o r k m e n , o r if they b o r r o w and utilize the money in their
business, the lender must take such interest as they can afford
to pay.
W h a t e v e r may be t h o u g h t of the causes f o r a fall of prices, it
must be conceded that if money is diminishing in quantity in.
comparison with the demand f o r it, the prices of commodities
can not avoid falling.

It is also impossible to escape the conclu-

sion that a persistent and protracted fall of prices f r o m whatever
cause must result in making the rates of profit f o r the use of
money in industrial enterprises less and less.

A n d if profits re-

cede nothing is m o r e certain than that interest also must recede.
H e n c e men w h o have means and do not wish to risk t h e m in
business on a constantly failing market, invest t h e m in g i l t e d g e d securities—securities that are sure to m a k e no default i n
the payment of interest.

T h i s is a necessary concomitant of a

g o l d standard, by reason of which—business tending m o r e and
m o r e to lack of profit—men are relegated to idleness.
W h e n I l o o k around me among Senators h e r e I w o n d e r w h e t h e r
t h e y can really mean that it is important to adopt f o r this country the g o l d standard in order that we may be able t o g e t British
money-lenders to lend us more money f o r investment in bonds and
similar securities?

Have the A m e r i c a n people c o m e so close as

this to the end of their resources?

If I t h o u g h t so I should con-

sider it a pitiful exhibition of the p o w e r of a republican f o r m of
g o v e r n m e n t to secure prosperity f o r those w h o live under it.
If all our g o l d should g o to f o r e i g n c o u n t r i e s we should have a
more equitable money in its place if w e had silver m o n e y . W h a t
m o r e beneficent t h i n g could happen to us than that the $600,000,000 of g o l d in this country should g o to replenish the m o n e y
volume of those countries to w h i c h we sell our surplus products?
W h a t folly could we c o m m i t by letting this g o l d g o to countries
in w h i c h wheat and cotton and meat products would b r i n g 20,
30, or 40 per cent m o r e than they now do?

So far even as we


may have gold contracts, it is, after all, through the sale of the
products of labor that we must g e t gold with w h i c h to pay.

Mr. M C P H E R S O N .

W i l l the Senator yield to me a moment?

M r . J O N E S of Nevada.
Mr. M c P H E R S O N .


Suppose we opened our mints while the

mints of the world are closed, and all the accumulated silver o f
the world and the current silver should flow to us, what would
become of this country?
Mr. J O N E S of Nevada.

In the first place, this is not a cred-

itor country.

But how are we to suppose that the silver should

flood in here?

T h e r e are at least seven or e i g h t hundred mil-

lions of people in the world who use nothing but silver.
can not demonetize it.


That is utterly out of the question.

A c c o r d i n g to the idea of the Senator f r o m R h o d e Island, as
expressed on Saturday, the 280,000,000 of ignorant and superstitious people constituting the population of India would send
here the little silver charms and idols w h i c h they use in their
religious worship, and w h i c h they revere more than they do

? There

is no l o g i c in such a proposition.

A trifle of

bullion m i g h t come out f r o m such a country, but it would be
impossible for any considerable amount to come. So this "flood"'
of silver can not come.

w h y not?

Mr. J O N E S of Nevada.

F o r the reason I have stated, and for

the further reason that the East Indian would want something
in e x c h a n g e for his money.

W e have not anything he wants.

I know of nothing in the world that he wants that we could
Mr. M c P H E R S O N .

T h e British Government or the Indian

Government wants gold in exchange f o r silver.

T h e y are build-

ing up the gold standard.
Mr. J O N E S of Nevada.

T h e y will take gold for silver, but

will not give gold for silver.

I t is a one-sided operation in its

T h e British Government agrees that it will not sell coun-

cil bills f o r less than Is. 4d.
Mr. M c P H E R S O N .

T h e y fix the value.

Mr. J O N E S of Nevada.

T h e y fix the gold value.


Mr. M c P H E R S O N .

The Senator declared in his speech on

Saturday, and he reiterates the statement to-day, that there are
not more than twenty millions of silver anywhere in the stocks
of the world that could afford to come to the United States and
become a part of the circulation of the United States.

1 think

it must be very evident to the Senator that the five hundred millions of gold reported to have been in this country a short time
ago has all retired somewhere, either into the reserves of the
banks or into the hoards of the people.

If a l a r g e r value should

be given to silver by allowing it to be brought to the mints and
to be sold at $1.29 an ounce, instead of selling it, as is now done,
at 75 cents an ounce
Mr. JONES of Nevada.

They do not sell it at all.

Oh, yes, they do.

Mr. JONES of Nevada.

They do not sell it at all.

I dispute

the Senator's proposition.
Mr. M c P H E R S O N

V e r y well.

Mr. JONES of Nevada.
Mr. M c P H E R S O N .

Let me g o on with my state-

I will assump then that we are going on a silver basis.
That is purely an assumption.

In my opinion it is absolutely unavoid-

The gold will not be in circulation, and what is coming in

to take the place of the departed gold?

The Senator can not for

one moment deny the fact that it would be for the interest of
France and Germany and the states of the Latin Union, as far
as they had silver on hand, to exchange it for the gold of the
United States, or resort to some process by which gold could
be obtained for silver.
Mr. JONES of Nevada.

Does the Senator say they will do

Mr. M c P H E R S O N .

I do; and the Senator must admit the

Mr. JONES of Nevada.

I do not for a moment admit it as a

Mr. M c P H E R S O N .

France is situated in the heart of Europe,

surrounded on all sides by gold countries that use scarcely any
silver except as subsidiary coin or whose mints are closed to the
coinage of silver. A t all events she could not, with the goldusing countries, use her hoard of $700,000,000 of silver to buy


even ammunition for war or an ounce of food to feed her army or
supply her people.

Therefore if France could con vert her silver

into gold, to wit, the gold of the United States, by the exchange
of silver in lieu of gold, does the Senator say that France would
not avail herself of that advantage?
The Senator may possibly ask me how France could convert
her silver into gold.

I would not say that she could exchange

it for American gold which has gone out of circulation, because
the banks would not release their gold except at a high premium.
T h e hoards in the hands of the people, who are not debtors
usually, would not be released, but they would hold it for a
higher premium.

How then would she do it?

silver here and exchanging it for commodities.

By sending ner
As a matter of

course the moment your $500,000,000 of gold ceases to circulate it
leaves your $1,600,000,000 of circulation now in this country
brought down to $1,100,000,000. W h a t is the result? Silver must
rush in to take its place,because you have opened your mint to supply it. W h a t then takes place? Silver will rise. Commodities will
necessarily fall. It enables France to exchange her silver through
the medium of our commodities into gold, our commodities to
be transferred to Europe and sold in Europe for gold.
has she done?

So what

She has taken her $500,000,000 of silver and put

it in our circulation in place of the $500,000,000 of gold that has
gone into hers.
The P R E S I D I N G O F F I C E R (Mr. CULLOM in the chair).
The Chair must remind the Senator from New Jersey that the
Senator from Nevada has the floor.
Mr. M c P H E R S O N .

I know, but he has been so courteous as

to yield to everybody, and I thought he would permit me to explain how gold will escape and silver come in.
Mr. JONES of Nevada.
Mr. M c P H E R S O N .


I want to hear the Senator on this ques-

tion, and would like the Senator to bear with me a moment
Mr. JONES of Nevada.

W i t h pleasure.

Mr. M c P H E R S O N . I have listened with great interest and with
greatprofit to his learned address, but let me submit to the Senator that we are confronted here now with a measure of legisla785



tion. W e are e n g a g i n g in the practical thing, in applying in
practice the theories he has advanced here.

Now, let us apply

Mr. JONES of Nevada.
Mr. M c P H E R S O N .

The Senator is reversing them.

Let me hear from the Senator, with our

mints open and offering $1.29 an ounce,when all the world outside
is not a bidder for silver and offering nothing how we can prevent that great flood of silver from coming in upon our circulation
Then, to apply the Senator's other principle, which he used
with great force and effect and in which I agree with him, he says
that in proportion as you increase the volume of the circulation
you to that extent affect the value of the unit of measure.


result of it would be this: Until we get in our circulation as
much silver as we have driven out of the circulation in the
character of gold money, there will be, as a matter of course, a

W h e n we reach the $1,600,000,000 again then we

have got back to our normal condition.
to stop the flood .beyond that?

Now, how are you going

Y o u are the only bidder, yours

is the only mint open to silver; the world has $3,500,000,0 0 of
silver that we have not yet received, and the mines in 1892 sent
us $195,000,000 of silver (coinage value), for which there is n o
market except through our mints.
Mr. JONES of Nevada.

I may be excused if I did not exactly

understand how the process was to g o on by which Prance was
to send us her $700,000,000, as the Senator said.
place there is not half that available.

In the first

There are not more

than $250,000,000 in the Bank of France.

T h e remainder is

circulating among the people all over France; that is to say,
largely among the peasantry, who know practically no money
bub silver money.

There is 3 per cent difference between the

French ratio and ours, which would be so much loss to the Frenchman, and to that must be added the brokers' commissions f o r
gathering the silver pieces together from all the corners of
France and sending them over here to buy something the people of France do not want.

And if we conceive them to part

with their silver to get gold, we know that the gold will not
pass in France for a particle of value more than silver did be785


fore; and as the gold money consists of pieces of large value it
would not serve the purpose of the people nearly so well as
silver does now.

Is it possible to suppose the French people

would do such a thing, when a very large amount of money
would be lost in the exchange?

W e have seen Germany do the same

Mr. JONES of Nevada.

Yes, at a time when she was to re-

ceive a thousand million dollars of gold as a result of the war.
A n d even then Germany had to pass a law before making the
change; and now the masses of the people of Germany, especially the agricultural classes, are intensely opposed to that
law and are urging the restoration of the bimetallic standard.
France has never shown the slightest inclination to part with
her silver; and in a conversation which I had with M. Tirard,
w b o was minister of finance in France and a delegate to the conference at Brussels, he said France was perfectly contented with
her system.

Much better is the silver in France for the good

of the people of France than if it were so much gold, even if
they could exchange it to-morrow without any loss whatever.
That silver money stays in France and performs the beneficent
function which money is intended to perform.

It is not con-

stantly drawn out and drawn in, to the great disarrangement and
detriment of the people's business, as would be the case were it
internationally acceptable as money.
I assert that the prosperity of business in a country depends
upon the stability of the quantity of money in that country with
which to do the internal business of the country.
a money that can not be drawn out.

France has

It is there and remains there

to perform the great functions that money was intended to perform.

It is a wholly chimerical idea that the peasants of France

are going to discard silver and take gold which can not be subdivided to meet their daily wants, and to which, whether it
could be subdivided or not, they have never been accustomed,
and in dealing with money, the habits and customs of a people—
their immemorial usages—are of the utmost importance.
Mr. M c P H E R S O N .

The Senator does not understand me as

saying that France will ever drive out of her circulation that


portion of silver that is needed for small transactions to pay the
butcher and the baker, no more than our country would drive
out silver coinage altogether.
Mr. JONES of Nevada.

W h y should she send out any more

of it than we send out of what we coin?
Mr. M c P H E R S O N .

Simply for this reason: France can con-

vert $300,000,000 or $400,000,000 of silver into gold; and the position the other nations of Europe occupy maintaining a gold standard could send all their surplus silver.
Mr. JONES of Nevada.

She occupies an infinitely stronger

position than any of the other nations of Europe.
Mr. M c P H E R S O N .
to her silver.

France to-day gives a forced circulation

The charter of the Bank of France requires that

the bank shall receive from the people the silver franc on deposit, and it requires also that the bank shall pay it out again
to parties who deposit it; that is, the public.
Mr. JONES of Nevada.

The Senator talks about a " f o r c e d "

W h y , Mr. President, all circulation is by force.

Whatever is legal tender is forced circulation anywhere.


have been told a great deal about the " e n f o r c e d " coinage of

If people would give attention to

the meanings of

words, they would understand that all legal-tender money, of
whatever material it is composed, is given " e n f o r c e d " circulation.

The circulation of gold is as much " enforced " as that of

Mr. M c P H E R S O N .

I have heard the Senator state upon

this floor that France charges a premium upon gold.

Now, I

wish to know if that would not be a forced circulation of silver,
if a premium were charged upon gold?
Mr. JONES of Nevada.

Not at all, except in the sense that

it would force the man who wants to speculate on the treasure
of France to pay the market price for it, instead of allowing
speculators, as our Government wrongfully does, to come in and
take gold out of the Treasury in order that they may be enabled
to make a pitiful commis ion of a quarter of 1 per cent or a half
of 1 per cent upon it by selling it to Austria.
Mr. M c P H E R S O N .
effect of it would be.

It is not what they have, but what the
Is it not a fact that if vou charge a pre-


mium on gold you do force silver into circulation, because silver
takes the place of gold?
Mr. JONES of Nevada.
Mr. M c P H E R S O N .

I agree to that.

Then there is the admission of a fact.


The Chair must remind Sena-

tors that before they interrupt the Senator entitled to the floor
they must address the Chair so that the Chair may ascertain
whether the Senator on the floor yields.
Mr. S T E W A R T .

I should like to ask the Senator from New

Jersey a question.
Mr. M c P H E R S O N .

I am speaking in the time of the Sena-

tor's colleague, who has kindly yielded to me, because I want to
bring out something on this particular point.
Mr. S T E W A R T .

I want to bring it out.

W i l l the Senator

allow me to ask him a question?

Does the Senator from Nevada

[Mr. JONES] yield to his colleague?
Mr. JONES of Nevada.
Mr. S T E W A R T .


Is the Senator from New Jersey aware of

the fact that in 1885 the Latin Union passed a resolution dissolving the union at the end of five years, provided any member of
the union would give a year's notice; and upon the giving of such
notice and such dissolution it was resolved that each of the nations belonging to that union should redeem the silver coins that
the other had in gold at the rate of 15£ to 1, $1.33 an ounce?


the Senator aware of the fact that France holds of the other nations about $200,000,000 of their silver coin, which by giving the
notice she could make them take at the rate of $1.33 an ounce,
and that France has refused to give that notice?

Is the Senator

aware that there has been a struggle all the time on the part of
the gold monometallists to make France give the notice, urging
as a reason that those countries had joined her enemies and she
ought to do it as a matter of revenge, and that the French Government has refused to do it on the ground that it would not give
up its silver coinage and disturb its present financial condition?
Is the Senator aware that a transaction of that kind has been
going on?


Mr. M c P H E R S O N .

If the Senator wants to ask me a ques-

Mr. S T E W A R T .

If the Senator agrees with the fact I have

stated, let me ask him why, when France will not sell that silver coin at $1.33 in gold, she would send it here and sell it at
Mr. M c P H E R S O N .

In the first place, the question the Sen-

ator asks me is the worst blow that could have been struck upon
the argument which has been made all the time by his colleague.
In the next place, it does not matter a particle to me or to the
question which the Senator from Nevada is discussing whether
three or four nations shall get together and decide as to a certain monetary policy between themselves, because it is one that
is terminable at the end of the period of time for which it was

It can not have any lasting effect, and as a universal

principle affecting money, it is of no consequence whatever.


I do not think I need to spend any more time in answering it.
Mr. JONES of Nevada.

As I understand the Senator f r o m

N e w Jersey, first the gold would all g o out.
Mr. M c P H E R S O N .

It has gone.

Mr. JONES of Nevada.

I understand the Treasury reports to

state that there are $500,000,000 or $600,000,000 in this country.
Mr. M c P H E R S O N .

It is out of circulation.

Mr. JONES of Nevada.

It has not been in circulation.

not think anybody has seen any for years.

I have not.

I do

It is no

more out of circulation now than it has been all the time.
Mr. M c P H E R S O N .

T h e panic dropped it out.

Mr. JONES of Nevada.
did anybody else.

I did not see it before the panic, nor

No man in the country has seen any gold in

circulation in this country for many years, except a little on the
It has always been in hiding.

It is no more out

of circulation now than it has always been.

Pacific coast.

Y e t by reason of

going out of circulation the Senator tells us there would be a
great contraction!

H e tells us that in this country there would

be a premium on gold, and the silver money of this country
would buy 15 or 20 per cent more than the money upon which
there was a premium.
Mr. M c P H E R S O N .

Not at all.


Mr. JONES of Nevada.
whether I state it aright.

I want to state it again, to see
He says the gold money would go out

and leave only $1,000,GOO,000 or $1,100,000,000 in this country,
and that the purchasing power of that $1,000,000,000 or $1,100,000,000 must increase largely; in other words, prices must fall.
Mr. M c P H E R S O N .


Mr. JONES of Nevada.

They must fall very greatly, and

at the same time there would be a premium on gold, which
would buy much less of commodities than the dollar of this silver money!

That is such a contradictory statement, never con-

firmed in the history of the world, that I am willing the Senator shall have the full benefit of it.
Mr. M c P H E R S O N .

NOW, let me say to the Senator, as I have

described to him the operation by which it would be done, I
understand that, except by the purchase of gold at a premium
by French or German silver, it could only be obtained through
an exchange of their silver for our commodities.

Our gold to

the extent of $500,000,000 goes out of circulation the moment we
pass a bill providing for the free and unlimited coinage of silver.

If the French and Germans are disposed to get rid of their

silver, as they are, they may bring it here.

That being silver

money, as a matter of course it would rise in value and commodities would fall.

The German silver and the French silver

would be invested in commodities at low prices, which would be
sold in European States at gold prices.
W h y would not 100,000,000 bushels of wheat or a million bales
of cotton sell for just as high price in French hands as it would
sell in American hands?

Therefore, they have converted their

three or four or five hundred million dollars of silver into commodities at their gold value and exchanged them for gold in
gold-using countries.

W e have lost our gold; they have gained

W e have got their silver, and we are upon a silver basis,

and we can not get off of it.
Mr. JONES of Nevada.

The Senator from New Jersey talks

as though a dozen different ranges of prices could prevail simultaneously in a dozen different countries.
international range of prices.

There can be but one

There can not be for the same ar-

ticle one price in France, another price in England, and a third


price in this country.

Prices of international commodities al-

ways find a common level.
Mr. M c P H E R S O N . W i l l the Senator yield a moment further?
Mr. JONES of Nevada.
Mr. M c P H E R S O N .


I g o on this proposition broadly, that if

France to-day could sell her silver at 90 per cent of its value in
bulk, bodily exchange it for gold, she would be glad to do it.
If there is a slight deviation or a slight loss, I do not think
France would care about it.
Mr. JONES of Nevada.

Does the Senator speak by any au-

thority from France?
Mr. M c P H E R S O N .

I do not, but I speak from the general

condition of things, and assume that the French people are wise
in financial matters.
Mr. JONES of Nevada.

The French minister of finance told

the Brussels conference, and he told me personally, that France
was entirely contented with her position, wanted no change,
was all right, and was seeking nothing of the kind.
Now, I should like to ask the Senator from New Jersey another
question, as he is so fearful that the people of France and other
countries will come over here with their silver.

Is he in favor,

and will he be in favor, of the coinage of the American product,
keeping out the foreign product?
Mr. M c P H E R S O N .

I know of no line of demarcation e x c e p t

this one
Mr. JONES of Nevada.

I ask the Senator whether he is really

opposed to the foreign product coming in?
Mr. M c P H E R S O N .

The opening of our mints to-day drives

us within the next six months to a silver basis, from which you
can not escape.

The coinage of the American supply will drive

us there a little more slowly, but no less surely.
Mr. JONES of Nevada.

That is, the Senator thinks that 50,-

000,000 ounces a year of addition to our currency to meet an annual increase of population of 2,000,000 will drive us to a silver
Mr. M c P H E R S O N .

Let me ask the Senator a question. W i l l

he yield to me?
Mr. JONES of Nevada.



Mr. M c P H E R S O N .

There was produced in the year 1892

$195,000,000, our coinage value, of silver in the world.


is not a market for it on the earth, and if offered to-day in a
block it would not bring 40 cents an ounce in any market in the

Now, what do you propose to do?

Y o u propose to

add to the value of that store, which you transfer direct from
your mine to the mints, an additional 54 cents per ounce upon
every single ounce of it.

Your silver to-day is bringing 75 cents

an ounce in the market.

Y o u r silver at its mint price would

bring $1.29 an ounce, or a difference of 54 cents per ounce, which
is infinitely more than the cost of producing the ounce of silver.
Here you have stimulated production.

The mines of to-day pro-

duce $195,000,000 per year, which would be stimulated to such
an extent that they would produce perhaps twice that amount
of silver.
Mr. JONES of Nevada.
000,000 of silver.

T h e Senator is talking about $195,-

I am talking about the production of this

Mr. M c P H E R S O N .

I am speaking of the production of the

Mr. JONES of Nevada.

I am speaking of the production of

this country, and I ask the Senator whether he supposes the
French people are so lacking in financial acumen that they are
going to send us their silver at a great expense and lose a large
amount by it?

Every man in public life in France is against it.

But the Senator from New Jersey seems to know exactly what
they are going to do.

I care nothing for the argument that it

is against their interest.

It is surely for their interest to sell it

to us to-day for high prices and buy it back later at low prices.
Mr. JONES of Nevada.

I ask the Senator if he is willing to

take the American product to meet the demands for money of
an increasing population?

Then he wanders.

I can not under-

stand exactly the point he is trying to make.
Mr. M c P H E R S O N .

Now, apply, if you please, the very prin-

ciple that I have been adapting here to the $65,000,000 of American product. I care not whether you apply it to the world's
product or the American product, if you intend by any legisla785


tion which you propose here to limit the amount of silver that
can possibly come to our mints to the American product, that
makes the process a little slower but no less sure.
Mr. JONES of Nevada.
Mr. M c P H E R S O N .

W h a t process?

The process of transferring us from a

gold standard, where we now stand, to a silver standard.
Mr. JONES of Nevada.

W e have not any gold standard.


have a standard of numbers, so many dollars, and we want to
keep up that number of dollars and keep it proportioned to the
increase of population.

If gold will not do it, and we have not

enough to keep pace with the population, I am right in accord
with the Senator's theory.

He is afraid of his own theory.


does not live up to it.
Mr. M c P H E R S O N .
ator and myself.

There is this difference between the Sen-

I say that I am unalterably opposed to giving

up the standard of gold which we now have.

The Senator says

that he would be perfectly willing to take a standard of silver,
silver being the more stable.
Mr. JONES of Nevada.

The Senator from New Jersey pre-

fers a standard of gold to a standard of justice.

I prefer a stand-

ard of justice, a standard in which the dollar shall remain a true
measure of the sacrifice involved in the transactions whose equities it is used to register, a just and faithful measure of the obligations of time contracts and deferred payments in an age in
which such contracts and payments are essential to the uninterrupted employment of labor.

I understand that, according to

the view of the Senator, if prices should fall, wheat to 10 cents a
bushel and cotton to 3 cents a pound, on account of the decreasing supply of gold in the world, he would still be for the gold
standard; he would still be for the creditor classes; he would
still be for making this country an annex of Great Britain; he
vrould still be in favor of having the producing classes, the plain
people of this country, reduced by the fall in the prices of the
products of their labor to a condition in which they must live on
the bare necessaries of life, and when once there that they must
remain there.
Mr. M c P H E R S O N .

If the Senator will yield to me for a sin-

gle moment I will show him how unjust any such statement is.


Mr. JONES of Nevada.
Mr. M c P H E R S O N .

I do not think the Senator can.

I will tell you what we have to-cl ay.


have $500,000,000 of gold in the country and we have over $700,000,000 of silver circulation.
Mr. J ONES of Nevada.
in the country.

W e have not any gold in circulation

I deny that at once.

Mr. M c P H E R S O N .

I am willing to put just as many dollars

of silver in circulation in this country as we have gold and maintain the two on a parity.

How then does tne Senator say that

1 am unwilling to use silver in circulation?
Mr. JONES of Nevada.

Suppose that is not enough to keep a

parity with justice?
Mr. M c P H E R S O N .
crease the silver.

Then I would increase the gold and in-

There is no country in the world that can pro-

duce gold as fast as we can or absorb it faster.
Mr. JONES of Nevada.

T o talk about being able to procure

gold when it does not exist is idle.

It is impossible to procure

No country can have more than its distributive share, and

no country can maintain gold except at the gold range of prices,
at the range of prices prevailing in the countries which use

Gold can not be maintained in this country, the tariff

wall considered, above the range of prices obtaining in all other
countries that use gold.
T h e Senator says he is willing to have a dollar in silver for
a dollar in gold.

That does not answer the question.

that is not enough.


Suppose that in proportion to the demand

for gold the supply is constantly decreasing, and suppose that a
dollar in silver and a dollar in gold, taken together, do not make
enough to maintain the range of prices undisturbed—that they
do not make enough no prevent the enslavement of the debtor
classes to the creditor classes—is there to be no escape?
is the meaning of a fall of general prices?
ing of the debtor.


It means the loot-

It means a constant unearned increment in

.the pockets of the creditor.
A l l evidence goes to prove, and the British Royal Commission
practically admitted, that gold has advanced 50 per cent in valuein the last twenty years.

That means that to the $30,000,000,000

of debts estimated to be due by the people of this country in


their individual capacity, there is an average additional burden
imposed of 2£ per cent per annum.

It means that a like per-

centage is added to the burden of the $30,000,000,000 of the national bonded debts of the world, or on account of those debts
alone, an unjust and unearned capitalized increment of $15,000,000,000 in twenty years on which interest is p?,yable to the
creditor classes, a colossal sum for which the people have received not the slightest equivalent, and all of which is placed on
the already overburdened back of labor.
not ceased, but is still in operation.

A n d the process has

I am willing that gold

should stay here, but if we can not keep gold except at the expense of justice, then I say let gold g o and let us retain justice.
Let the dollar that we retain be a dollar that does not exact
from the debtor more sacrifice than he received.

L e t our money

unit, or dollar, be a unit that will bear a steady and unwavering
relation through time with the correlative units of the various
products of labor, whether yardstick, pound-weight or bushel

W h a t e v e r be the relation between the monetary unit

and the units of commodities and properties when a debt is incurred, that is the relation that should continue to exist till the
debt is paid.

It is far more important that our dollar, which is

the unit of our money, should be at a parity with the products
of labor than with gold.

Gold keeps at a parity with nothing.

I should like to see a monetary unit that will keep at a parity
with the unit of wheat, and the unit of cotton, the unit of beef,
and of pork, and the unit of all other things that we produce in
this country.

That would be much better than that our mone-

tary unit should be kept at a parity with gold.

If there is n o t

gold enough to maintain our monetary unit at a normal and unchanging relation with the units of these various commodities
that our people produce at the relation that they start with, t h e n
I repeat let gold go.
Mr. M c P H E R S O N .

I did not wish to interfere with the

Senator, but he was making statements which I believed to be
fallacious; and the Senator will pardon me for the use of the

I did not want to interfere with his speech.

Mr. JONES of Nevada.
Mr. M c P H E R S O N .

I have no objections to interruptions.

H e had suspended for the time being.,


and finding that he was perfectly willing to allow interruptions
I interposed my objections to his reasoning.
W h a t I want to get at is the fact, and I think the country
wants it more than it wants anything else just now.

I wanted

to call the attention of the Senator to existing conditions, and
apply his reasoning to those conditions.

Mr. JONES of Nevada.


I can not understand how the Sena-

tor expects to get at facts, or expects us to get at them.

I find

the Senator constantly votes to keep us here night and day.


find the Senator from Massachusetts [Mr. LODGE] objecting to
anybody carefully preparing what he wishes to say on a question
of the utmost magnitude.

He wants Senators to get up and

speak on this great subject extemporaneously, and without very
serious thought.

I find that many Senators on this side of the

Chamber tell us they want discussion to get out the facts, and
then keep us here eighteen or nineteen hours a day to get out
the facts.

But, Mr. President, the facts can not be found on the

desks here.
Mr. H O A R .

W i l l the Sentor from Nevada permit me to say

that, while I am one of the Senators who have expressed themselves most emphatically upon the question of using debate for
the purpose of obstruction, I do not myself believe there is a
member of this body, whatever opinion he may hold on the
silver question, who thinks the Senator's speech has been in
any way too long or an abuse of the privilege of the Senate,
or a speech which ought not to be made.

It has been full of

instruction and delight to those who differ with the Senator as
well as to those who agree with him. I think every Senator will
agree with me when I say that.
Mr. JONES of Nevada.

My criticism did not refer to the

senior Senator from Massachusetts but to the junior Senator.
Mr. H O A R .

I did not understand the Senator to refer to

me, but I refer to him.

Mr. A L D R I C H .


I think I ought to say a single word in

answer to an allusion made by the Senator from Nevada to an


inquiry made by the committee of which I was the chairman, i t
being an inquiry into the prices of wages from 1840 to 1892.


will state that the Senator from Nevada entirely misapprehends
the purposes which that committee had in view, and from his
idea of the results ascertained it is evident that in his wide
range of reading upon this and collateral questions he must
have overlooked the report of the committee.
Mr. JONES of Nevada.

Oh, no; I did not.

substantially as I understood it.

I think I stated it

I was upon the Committee on

Finance which created this committee, and I understood what
the object of it was.
Mr. A L D R I C H .

I think the Senator will agree with me that

in the making of the inquiry from 1840 to 1892 the purpose could
not have been in the nature of things to ascertain the result of
an act which was passed in 1890.
Mr. JONES of Nevada.

But it would be hardly possible t a

get at what took place after 1890 unless the information wa&
called for so as to embrace the period before as well as after.
Much information would naturally be obtained as to the period
prior to that time, but no committee would try to g e t the desired information for the prior period and fail to get it for the*
period subsequent to 1890.
I wish before sitting down to say one word upon what seems to
me a very flippant statement about the cost of producing silver.
Mr. M c P H E R S O N .

I should like to hear the Senator on that

Mr. JONES of Nevada.

I should like to know how the Sen-

ator gets at the cost of producing silver, and what he knows
about it.
Mr. M c P H E R S O N .

I will tell the Senator now.

Mr. JONES of Nevada.

I shall be glad to know how he gets

at it.

Mr. M c P H E R S O N .


I take the report of the Director of the

Mint in 1887, Dr. Kimball.

I take the reports of Prof. Austin,

of London, for the same year.

Coupled with that, and finding

that the cost of the production of silver as found in the mining
reports has been very much reduced in the past few years, I then,


take the mint reports.

I take the report of the Superintendent

of the Census, who in 1890 reported the cost of producing 41,000,000 ounces of silver in the United States out of the 51,000,000
ounces produced.

He gave a report of the actual cost of mining

and reducing 41,000,000 ounces of silver out of a possible production of 51,000,000 ounces.

A f t e r deducting the gold it contained,

the lead it contained, and selling it in the market for the market
price, it left the actual cost of producing an ounce of silver at 37!

Now, I know of no higher authority to g o to than those

gentlemen who have been employed by us to make investigation
and report.
Mr. JONES of Nevada.

I know a higher authority to g o to

than those gentlemen.
Mr. M c P H E R S O N .

W h o is it?

Mr. JONES of Nevada.
now addressing this body.

It is the Senator from Nevada, who is;
H e is a very much higher authority

than those gentlemen, and he does not claim to be a very h i g h
authority either.

The statement is absolutely absurd.

great cost is in finding the mine.


Years of time and hundreds

of thousands of dollars are spent in tapping the earth, in going
down and down until what gave promise of being a mine is found
to be af ailure.

The money spent in mines that never materialize

is infinitely greater than that spent in the mines that turn out
the metal.
As I had occasion to say on Saturday, if there were a profit of
50 per cent or more an ounce in mining silver, what an absurdity
it is that more of the people of the United States do not go into
the business.

There are railroads running into all those regions

and communities established there, and yet there has been no increase in the numbers either of the mining capitalists or of the
working miners of the country in the last ten years.
Mr. M c P H E R S O N .

W i l l the Senator answer me a question?

Mr. JONES of Nevada.
Mr. M c P H E R S O N .


A t a time when the price of silver has

fallen at a terrible ratio, year after year, you have increased
your production, and almost doubled it in the last few years,
selling the product at the lowest price silver has ever reached.
How do you account for that?


Mr. JONES of Nevada.

In the simplest possible way; and a

business man ought to know without asking.

I may, by pre-

lude, say that the yields of silver that have made the great supply of the world have not come from sporadic or occasional
mines, but from great deposits found in certain localities, as, for
instance, the Comstock lode, in Nevada, and the mines of Leadville, in Colorado.

Four or five camps in the United States have

given four-fifths of the silver of the United States.

A l l those

mines were opened and great machinery put in them before there
was any material decline in silver.
Enormous sums of money having been expended, great and
expensive shafts sunk, tunnels bored, and the mines open and at
work, men went on with their work after the gold price of silver

A n y man who knows anything of mining knows that it is

almost ruin to mining machinery to close a mine.

So that even

if the mining companies made nothing more than bare expenses—and not always those—they kept their men at work,
always hoping for an improvement.

The great silver fields have

been very few and have become world famous, such as the P o tosi in Bolivia and the Comstock in Nevada and the Leadville
mines of Colorado, besides the deposits found in Mexico and

Before any pronounced fall took place in the gold price

of silver bullion, the Nevada and Colorado mines had been furnished with expensive machinery.

W o r k s amounting to millions

of dollars were in operation on the Comstock lode before 1873
and at Leadville shortly afterward; railroads were built to the
mines and everything was in order for work.

Now the Com-

stock mines are about to close.
Mr. M c P H E R S O N .

If the Senator will allow me, I am willing

to rest this question upon the mines now open.

W e have any

number of mines in the United States producing silver and the
cost of production according to the census report is so much.
Now, in estimating what the elfect of that silver is to have upon
the silver market of the world, I am ready to take just the product of those mines now open, upon the increased production
and the benefits which will flow from the increased mint price
of silver.
Mr. JONES of Nevada.

No increase flows from that.



silver is found they dig out all of the metal possible to be dug.
Everything that the mine is capable of yielding is taken out, because the companies can not afford to fritter away a dollar's expense in running the mine.
There will therefore be no increased output on account of any
increased price of silver.

Everybody who thoroughly under-

stands the business will agree with me in that statement.
[ A t this point the honorable Senator yielded to Mr. PEFFER.]
Saturday, October 21, 1893.
Mr. JONES of Nevada.

Mr. President, I have been surprised

that in a question of such transcendent importance as the one
under discussion, the newspaper press of the country, and Senators who are in favor of the pending measure, should for one
moment think that there has been too much time occupied in its

W h y , Mr. President, there is not a business in the

United States that is not intimately affected by the proper solution of this question.
I confess, too, that I have been somewhat disappointed that
those who are so vehemently urging the gold standard for this
country have not seen fit to present to us their views in extenso.
I have not heard a single argument made on this floor, or a single
fact presented; I have heard no demonstration or attempt at
demonstration, that the Sherman act has had any relation whatever to the collapse in the prices of property which took place
two or three months ago.

On the contrary, I have heard Sen-

ator after Senator who favor repeal state to the Senate their
conviction that the Sherman act had in fact nothing whatever to
do with it.


The most that has been said against the Sherman law is that
possibly it might, as a result of the exercise of the emotional
side of the people's nature, have had something to do with the
difficulty; in other words, that the people thought the law responsible for the difficulty, and therefore, say our legislators, it
should be repealed.

I deny that the people thought so.

A few

interested persons, mostly the bankers of a few large cities and


their allies, pretended to think so, and with the aid of the leading city newspapers, proclaimed themselves to be the " p e o p l e . "
These city newspapers stated that the difficulty was caused by
the Sherman law, but evidently the Senators here on both sides
of the Chamber do not believe the city newspapers.

Y e t , even

were the people to suppose the difficulties to be caused by the
purchasing clause of the Sherman law, inasmuch as Senators
here do not believe it, why repeal it?
Suppose it were the case of a physician and his patient; if the
patient had taken a poison for which the physician prescribed
an antidote which the patient refused to take, and not only refused to take, but insisted upon taking more of the poison, what
would be thought of the physician if he should say: " I shall
give this patient the remedy he wants, no matter how injurious
it may be to him; if it destroys him the responsibility is not
with m e . "
Now, sir, in a matter of this sort the legislative body is the

If every man, woman, and child in the United States

thought that the remedy in this case were the disease, believing
as I believe about it I should resign my seat in this body before
I should vote for the pending measure.

But few of the* phases

of this question have been discussed so far by the friends of repeal; none of the basic reasons have been given why this country
should come to the gold standard.

Everybody throughout the

United States admits that never in the history of the country
was there at any time more property in the country, more assets,
more collateral.
Mr. A L D R I C H .

Will it interrupt the Senator if I ask him

a question?

Does the Senator from Nevada

yield to the Senator from Rhode Island?
Mr. JONES of Nevada.
Mr. A L D R I C H .


The Senator says that nobody has given any

of the basic reasons why this country should come to a gold

T h e inference from that would be that we are not

now on a gold standard, but upon some other standard.

I should

like the Senator to explain what standard we are on, and what


change is to take place in the standard by the passage of the
pending bill?
Mr. JONES of Nevada.

Mr. President, there is scarcely a

country in the world absolutely upon the gold standard.

If the

world were absolutely upon a gold standard prices would be 50 per
cent lower than they are.

W e have had under this law an ad-

dition of perhaps $30,000,000 or $35,000,000 a year to meet the increasing wants of a rapidly growing population.

W e have so

far remained on what is called the gold and silver standard, consistent with the issue of these Treasury notes.
posed to cut off all supply.

It is now pro-

It is proposed now that the business

of this country shall be done with such an amount of money as
we already have out, with no addition whatever to meet, as I
have said, the growing wants of a rapidly increasing population.
Does the Senator from Rhode Island deny that?

Has the

money that has been issued under the Sherman act produced a
rise in prices?

Does he maintain that the Treasury notes issued

under the Sherman act have produced what has usually been
termed inflation?

T h e very report that he brought to the Sen-

ate as chairman of the subcommittee of the Finance Committee
was that the dollars, instead of growing less valuable, had been
growing more valuable during the whole term of operation of
this law; that ever since the bill had passed prices had been falling.

Does he want now, by cutting off the supply of money, to

compel prices to fall still more rapidly?

Does he believe that

the best interests of the country are subserved by falling prices?


W h y , Mr. President, if I should be asked to state in a single
phrase what hard times meant, I should reply, " falling prices."
That phrase means the compulsory idleness of large numbers of
workingmen; it means an increasing number of patients in lunatic asylums, an increase in the occupants of the almshouses
and the prisons of the country.

No two words in the English

language cover so vast a field of misfortunes.

A condition of

failing prices means the payment of an unjust and unearned increment to the creditor; it means an unjust exaction from the

A condition of falling prices means a discouragement



to every business venture, a thwarting of all business foresight;
it means a juggling with mortgages by which they become deeds,
and the property of the borrower becomes vested, in fee simple,
in the lender.
Y e t , Mr. President, when we say that the value of the monetary unit in gold is rising—and when I say " unit " I mean for this
country the dollar, for France the franc, for Germany the mark,
for England the pound sterling—just as all know that the unit of
wheat-measure means a bushel of wheat, the unit of cloth-measure means a yard of cloth, or that the unit by which we measure
specific gravity is the pound weight—I say that when we claim
that the monetary unit is constantly increasing in value, we are
met by hair-splitting arguments that improved processes of production have produced that result.
T h e improvement in methods of production in the twenty
years after 1873 do not compare in importance or value with
those of the twenty years preceding 1873, yet while one period
has been a period of falling prices and business prostration, the
other was a period never excelled in the history of the world for
business prosperity.

It was a period of rising prices.

the red-letter period of history!

It was

The difference between the

periods is due to the difference in monetary circulation.


money has been well called the lifeblood of industry.


I had occasion to say the other day that besides the fall in
prices we have other reasons for saying that gold has advanced
in value.

W e have absolutely conclusive reasons that nobody

ever pretended to answer.

Heretofore the argument has been

used by the bankers—by some professed political economists and
many quacks in that profession—that instead of a scarcity of
money we had a superabundance, and they have shown us what
they have taken to be proof of this fact in the piling up of money
in city banks or great money centers, and that as another indication of plentiful supply the rates of interest on money have
been falling.
W i t h reference to the fall in the rate of interest I have
stated that instead of being an evidence of plentiful supply of


money the constant reductions in the rate of interest on giltedged securities, about which there could be no question, was an
unerring signal that the quantity of money was not keeping pace
with the demand.

Especially is this so in a country new and

unfinished, a country hardly more than touched by development,
a country filled with resources of every description—the finest
forests, the greatest water courses and mines, and the greatest
variety of soils and climates of any nation on earth, with the
most progressive, energetic, and aspiring population anywhere
to be found.

My statement is that when the rate of interest on

money falls in such a country it is conclusive proof that the exchange power of money is rising.
The British royal commission on gold and silver (1886) on this
subject says:
When gold is scarce and commercial activity is checked by the resulting
fall of prices the demand for permanent investments increases and the
price of such securities rises. Owing either to the actual or the apprehended
scarcity of gold there is a tendency to invest in securities hearing a fixed
interest, payable in gold, which raises their price and reduces the net return
obtainable from them. (Report, part 1 section 56.)

So, as the commission further says:
The rate of interest on permanent investments is also declining.
A P R O P H E C Y M A D E I N 1876.

Prior, however, to the report of the British royal commission
the report of the United States Monetary Commission, to which
I have referred, clearly pointed out that interest upon first-class
securities would continue to fall—the process having already
begun, although the demonetization of silver had taken place
but four years prior.

In that report I stated:

" There need be no haste in refunding the public debt at the
rate now proposed and considered low.

Unless the progress of

the commercial world in the policy of contraction by demonetizing silver is checked, bonds bearing a much lower rate of interest than any yet offered will be gladly accepted by capitalists
here and in Europe.

W h e n the money stock is diminishing and

prices are falling, the lender not only receives interest, but finds
a profit in the greatly increased value of the principal when it is
returned to him.

A loan of money made in 1809 if repaid in 1848


would have been repaid with an addition of 145 per cent in the
purchasing power of the principal, besides all the interest paid.
" T h o s e who have loaned money to this Government since 1861
have already received nearly as much in the increased value of
their principal as in interest, and all the probabilities are in re
epect to the 4 per cent thirty-year national bonds now being negotiated, if they are redeemed in gold, that more profit will be
made by the augmentation in the value of principal than through

Indeed, the signs of the times are that the bonds of a

country possessing the unbounded resources and stable institutions of the United States payable in gold at the end of thirty
years without any interest whatever would, through the increase
of the value of that metal, prove a most profitable investment."
A l t h o u g h sixteen years have elapsed since the writing of that
report it is perfectly clear that the diagnosis then presented has
been verified by the facts.

A n idea seems to exist in the minds of many that if interest or
the charge for the use of money is low, therefore money is cheap.
This is an entire misapprehension as to the nature of money and
as to the nature of cheapness.

The interest on money simply

represents the amount of profit that can be made by its use.


is altogether different from the purchasing power of money.


is plain that when the value of money is increasing by reason of
a dimunition in the quantity, there is adimunition in the profits
of business.

It does a man no good to borrow money even at 1

per cent if the business in which he invests it is losing instead
of making money.
Of what use is it for a man to put his money into property or
into industries for the manufacture of products, when he knows
that a constant fall is taking place in the prices of the products
which his money would help to create?

In that case he finds

that had he delayed his investment he could put his money to
better use, inasmuch as he could buy more with it each year
than he could the year before.

A t the same time he observes

that people who have invested their money in gilt-edged bonds
as, for example, the bonds of great trunk-line railroads, h a v e '


always an absolute guarantee of the rate of interest, whatever
it may be, which they bear, whereas it is questionable whether
anything could at such time be made upon the money if invested in industrial enterprises, where labor was employed in
The demand for that class of bonds therefore, such as railroad
bonds of the first order, has been very great, and they have risen
in value in about the same proportion that other property has

W h o would hesitate to pay even 10 per cent for money

if he knew that property was going to increase 20 per cent in

On the other hand, if a man knew that he could borrow

money for 2 per cent, but that property was falling in value by
3 per cent a year, how could he utilize the borrowed money at a

The rate of interest seems to be very small.

A few per-

sons might be willing to pay more, but they would be such as
were forced by circumstances to do so in order to protect themselves from serious loss.
Instead of interest becoming less as money becomes more
plentiful, interest rises, because more profit can be foreseen in
the use of it than when the value of the unit is increasing and
the quantity of money decreasing.

But the natural rate of in-

terest will never be known until society shall obtain a unit of
money that shall be unchanging in value.

W i t h a money in-

creasing in value and decreasing in quantity the rate of interest
will be lower than if money were unchanging.

If prices continue

falling interest will be lower.


W h y is it that interest is less now than it has been heretofore?
W h y has interest been falling in the United States?
country been finished?

Has the

Is its material development completed?

A r e there no great enterprises that would or should engage the
attention, the enterprise, and the energies of the people that
would be commercially profitable?
der natural monetary

One would suppose that un-

conditions-conditions adapted to the

means of the country—there would be no difficulty in finding
such enterprises in a new country such as this, especially with
a population rapidly increasing; but with a volume of money constantly shrinking there is an equally constant decline in prices.


P r i c e is the barometer that measures prosperity, and yet the
entire discussion in this Chamber on the part of the gold standard Senators has been carried on without relation to or even
mention of that one word " price," which is the pith and marrow
of the entire question before the Senate and of the entire science
of money.

W h e n prices fall the hopes of the producer of wealth

are taken away; he is deprived of all prospect of profit, which is
the only inducement to investment of capital—and nobody is
benefited but the lender of money—the man who juggles with
the counters by which profits are computed.
W h e n prices of commodities and property are falling moneyed
men will not part with money in order to acquire property
which in a month will be worth less than they paid for it, or to
employ labor, the prices of the products of which are constantly

They keep their money either in the form of gilt-

edged bonds or as deposits in banks, subject to their order.


other words, so far as all the purposes of money are concerned
it may be said to be hoarded.

People instinctively hoard and

hold that which is becoming more valuable.

If wheat is rising-

in price, those who deal in wheat and can afford to keep it on
hand will do so for the manifest purpose of making a better
profit at a later period.
W h e n money is rising in value, therefore, men instead of putting it to use take it practically out of use. Hence at such times
it refuses to perform the beneficent functions for which society
intended it.
W h e n , therefore, prices rise interest rises; with the fall of
prices of commodities interest falls.

W h e n money is increasing

in volume and decreasing in value, prices rise, and each investment in productive enterprises becomes more profitable.
consequence interest rises.

As a

W h e n it is decreasing in volume

and so increasing in value, it is because prices are falling.


such times investments in property and in industrial enterprises
become unprofitable.

As a natural consequence money avoids

them and seeks gilt-edged bonds, on which no default of interest
is to be expected.
Such bonds naturally increase in price.

On this subject thd


London Financial Times, of September 27 last, has the following
The difficulty of finding a trust investment to yield more than the smallest
fraction over 3 per cent is one which is ever before trustees, and as the tendency of first-class stocks is always to increase in price, this difficulty bids
fair to become in the course of a few more years an impossibility.

They must take less than 3 per cent if the money unit continues to increase in value.






W i t h reference to the decrease in the rate of interest on G o v ernment securities, it is sometimes said that this decrease shows
the degree of appreciation of the credit of the country, or in the
case of first-class trunk-line railroad bonds, the credit of the
railroad company.

But this is altogether an error.

If a man

could be moderately certain of making 4, or 5, or 6 per cent profit
in a business enterprise, he would not take a Government bond
at 3 per cent, no matter how g o o l the credit of the Government.
During a period of increasing value in the money unit, although
interest will be held up as far as possible, yet it must be reduced.

A time arrives when the borrower finds it impossible to

pay so much and the bond must be

11 converted

" o r " refunded "

at a lower rate of interest, but for a longer period of time.


other words, if the loan be one for twenty years at 4 per cent the
borrower may prefer to ' ' c o n v e r t " or " r e f u n d " it into a loan
paying 3 per cent for thirty years.

This makes the loan easier

for the borrower, and sometimes saves him from bankruptcy.
T h e most certain sign, therefore, that the value of the monetary unit is increasing and from reasons having their origin not
in improved processes of manufacture or in changes in the relations of supply and demand directly affecting commodities, but
from reasons having their origin in changing relations of the
money volume to the demands of population and business, is the
fact that interest on securities of the first class is decreasing.
E F F E C T S O F D E C R E A S E OF Q U A N T I T Y O F M O N E Y .

" W h i l e the volume of money is decreasing, even although
very slowly, the value of each unit of money is increasing in
corresponding ratio, and property is falling in price.


who have contracted to pay money find that it is constantly be785


coming more difficult to meet their engagements.

The margins

of securities melt rapidly away, and the confiscation by the
creditor of the property on which they are based becomes only
a question of time.

All productive enterprises are discouraged

and stagnate because the cost of producing commodities to-day
will not be covered by the prices obtainable for them to-morrow.
Exchanges become sluggish, because those who have money will
not part with it for either property or services beyond the requirements of actual current necessities, for the obvious reason
that money alone is increasing in value while everything else
i fdeclining in price.
" T h i s results in the withdrawal of money from the channels
of circulation and its deposit in great hoards, where it can exert
no influence on prices.

This hoarding of money from the na-

ture of things must continue and increase, not only until the
shrinkage of its volume has actually ceased, but until capitalists
are entirely satisfied that money lying idle on special deposit
will no longer afford them revenue, and that the lowest level of
prices has been reached.

It is this hoarding of money, when its

volume shrinks, which causes a fall in prices greater than would
be caused by the direct effect of a decrease in the stock of money.
Money in shrinking volume becomes the paramount object of
commerce instead of its beneficent instrument.

Instead of mo-

bilizing industry, it poisons and dries up its life currents.
the fruitful source of political and social disturbance.

It is

It foments

strife between labor and other forms of capital, while itself hidden away in security gorges on both.

It rewards close-fisted

lenders, and filches from and bankrupts enterprising borrowers.
I t circulates freely in the stock exchange, but avoids the labor

It has in all ages been the worst enemy with which

society has had to contend.
" T h e great and still continuing fall in prices in the United
States has proved most disastrous to nearly every industrial enterprise.

T h e bitter experience of the last few years has been

an expensive but most thorough teacher.

It has taught capi-

talists neither to invest in nor loan money on such enterprises,
and just as thoroughly it has taught business men not to borrow
f o r the purpose of inaugurating or prosecuting them.

Of the few


business enterprises now being successfully prosecuted,


larger part are based on a monopoly secured either by patents
or exceptional conditions.

The business man has discovered

that the less active and enterprising he is the better he is off.
T h e manufacturer avoids loss by damping down furnace fires
and slowing down machinery.




' T h e stockholders of railroads have suffered a vast shrinkage in the value of their property and in the volume of their
traffic in rates of transportation, while their debts have remained nominally the same, but really increasing.

In order to

make their decreased receipts meet the interest on their bonds,
they are forced to reduce their operating expenses to the lowest
possible point.

Their struggles seem to be in vain, and unless

that system can be changed, which is making each dollar which
they owe more valuable and at the same time causing a shrinkage in their business, and which is chaining labor and all other
forms of capital to the chariot wheels of money capital, they
will, one after another, be swallowed by the bondholders.


the end the stockholders will be entirely out of the account, and
the contest will be between different classes of bondholders, if
that can be called a contest where victory is assured in advance
to the liens which have priority.
" Farmers whose lands are not mortgaged, and their employes
who at least are insured against absolute want, best escape the
evils of the times, but the prices of agricultural products must
finally decline with the reduction in the number and means of
the consumers."
This prediction, made by me in 1877, sixteen years ago, is amply
verified by the enormous fall in the prices of wheat and cotton in
the intervening period.
" The tendency of falling prices is to break down the vast diversified interests of the country and to force a constantly increasing proportion of the population into the one single industry
of cultivating the soil.

The United States, instead of continuing

a highly commercial and manufacturing nation, will, until falling prices are checked, become more and more exclusively agricultural and pastoral.
" Securities have already become so impaired through falling


prices that loanable capital has fled affrighted from the newer
and more sparsely settled sections of the country and accumulated in large amounts in the great financial centers, whose securities are more ample.

The personal and property securities

of individuals have generally ceased to be available, except at
the highest rates of interest or at ruinously low valuations.
Money can be borrowed only upon such securities as bonds, which
are based on the unlimited tax-levying pow ;r of the Government, or upon the bonds and stocks of first-class trunk lines of
railroad corporations whose freight and fare rates are practically a tax upon the entire population and resources of the regions which they traverse and supply.

The competition among

capitalists to loan money on those more ample securities has become very keen, and such securities command money at unprecedentedly low rates.
" These low and lowering rates of interest, instead of denoting
financial strength and industrial prosperity, are a gauge of increasing prostration.

Large accumulations of money in finan-

cial centers, instead of being caused by the overflow of a healthful circulation, or even a proof of a sufficient circulation, are
unmistakable evidence of a congested condition caused by a decreasing and insufficient circulation.

T h e readiness with which

Government bonds bearing a very low rate of interest are taken,
instead of showing that the credit of the Government has improved, is melancholy evidence of the prostrated condition to
which industry and trade have been reduced."


" T h e worst effect, however, economically considered, of falling
prices is not upon existing property nor upon debtors, evil as it is,
but upon laborers whom it deprives of employment and consigns
to poverty, and upon society, which it deprives of that vast sum
of wealth which resides potentially in the vigorous arms of the
idle workman.

A shrinking volume of money transfers existing

property unjustly, and causes a concentration and diminution of

It also impairs the value of existing property by elimi-

nating from it that important element of value conferred upon
it by the skill, energy, and care of the debtors from whom it is

But it does not destroy any existing property, while



it does absolutely annihilate all the values producible by the
labor which it condemns to idleness.




" Money capital, labor, and other forms of capital are the warp
and woof of the economical system.

Labor, cooperating with

the forces of nature, is the source of all wealth, and to reach the
highest degree of effectiveness it must be classified through the
aid of capital and supported by capital during the process of production and be measured and paid in money, each unit of which
is a sight draft on all other forms of property, bearing a value in
proportion to the number of such drafts.

In order that any coun-

try may reach the maximum of material prosperity, certain conditions are indispensable.

All its labor, assisted by the most ap-

proved machinery and appliances, must be employed and the
fruits of industry must be justly distributed.
" T h e s e conditions are only possible when capital is absolutely
protected against violence and free from illegitimate legislative
interference, and when the laborer is protected in his natural
r i g h t to dispose of his labor in such manner as he may prefer.
They are utterly impossible when the money stock is shrinking
and the money value of property and services is declining.


soever great the natural resources of a country maybe, however
genial its climate, fertile its soil, ingenious, enterprising, and
industrious its inhabitants, or free its institutions, if the volume
of money is shrinking and prices are falling its merchants will
beoverwhelmed with bankruptcy, its industries will be paralyzed,
and destitution and distress will prevail.


" T h e instinct of self-interest is the mainspring of industrial and
commercial activity.

It is the animating motive alike of the

capitalist and of the laborer.

W i t h o u t it, no labor would be

performed nor would capital have

an existence.

If money

capital is withdrawn from productive enterprises, it is from the
apprehension of loss and from the same instinct of thrift through
which it was acquired.

It is natural that the money capitalist

should exact from labor all he can in exchange for his money,
and that the laborer should exact all the money he can in exchange for his labor.

W h a t is known as the conflict between

capital and labor is not so much a conflict between other forms

of capital and labor as it is between money and labor.

Indeed T

the conflict between money and other forms of capital is as distinctly marked and quite as severe as the conflict between
money and labor, and in that conflict other forms of capital
suffer fully as much as labor, the only difference being that they
are better able to endure losses.
" O t h e r forms of capital must be constantly converted intomoney in order to pay wages and to meet other demands incident to industrial enterprises.

W h e n the stock of money is

shrinking and prices are falling, this conversion can only be
made at rates continually growing more unfavorable, while at
the same time the products of the labor for whose wages sacrifices have been made are also undergoing a shrinkage of money

Thus loss and sacrifice are encountered at every turn,

and the owners of other capital than money shrink from the
friction of exchange, withdraw from productive enterprises,
and only exchange as much of their property for money as will
suffice to meet the necessary expenditures of living, which are
reduced to the most economical level, as it is principal and not
income which is being consumed.

Little more labor will be em-

ployed under these circumstances than is sufficient to support
the owners of capital on this parsimonious basis, and as a consequence the labor market will be overstocked and the competition between laborers will reduce wages to a starvation level.
" But during this period, when property is being sacrificed 'to
meet current necessities and laborers are being remitted to idleness and destitution, money fattens on the general disaster.
Under any money system whatever, labor, money, and other
forms of capital confront each other as opposing forces, each
seeking through a natural instinct to secure as much as possible,
of the other's in exchange.

These forces, although always op-

erating against, are not necessarily injurious to each other.


the contrary, under a just money system they are not simply
mutually corrective.

The conflict between them is essential to

the proper adjustment and harmonious working of all parts of
the economical machinery.

They are the centripetal and cen-

trifugal forces of the industrial system.

The equilibrium of all

things is maintained through counterbalances.

It is out of the


action and counteraction of antagonistic forces that the harmonies of the universe are evolved.

But under an unjust money

system, under a system which through law or accident fails to
regulate the quantity of money so as to preserve the equilibrium
between money and the other factors of production, the conflict
between money and labor and other forms of capital becomes
destructive and ruinous.


" It is in the shadow of a shrinking volume of money that disorders social and political gender and fester, that communism
organizes, that riots threaten and destroy, that labor starves,
that capitalists conspire and workmen combine, and that the
revenues of governments are dissipated in the employment of
laborers or in the maintenance of increased standing armies to
overawe them.

The peaceful conflict which under a just money

system is continually waged between money capital and labor,
and which tends only to secure the rights of each and is essential to the progress of society, is changed under a shrinking
volume of money to an unrelenting war, threatening the destruction of both.

Money, in either shrinking or unduly in-

creasing volume, like a dissolving chemical, separates capital
from labor.

It is not against capital, but against the false finan-

cial system that permits the volume of money to either shrink or
unduly increase that the hostility of society should be aroused.

Let labor and capital be put on equal terms, so that idle capital

will be as unfruitful as idle labor, and the conflict between them
will cease to be destructive.

A n unjust money system produces

an unnatural relation between labor, capital, and money, and
the resulting evils can not be remedied by special legislation on
particular cases, nor by general legislation abridging the natural
rights of either.

Such legislation would be futile and imperti-

nent, destructive of that freedom of individual action so essential
to progress, and subversive of the true interests of all classes of
society, and would powerfully tend to the overthrow of free institutions.

The equitable adjustment of the correlative demands

of capital and labor can not be made through violence, and is
utterly impossible through any legal or other contrivance, under

any system that permits contraction or undue expansion of that
great instrument which measures alike the property of the capitalist and the labor of the workman.

It is only through the

action and counteraction of the antagonistic forces of capital and
labor, automatically operating under a just money system, that
equity and harmony can be evolved.
" T h e very same reasons which make capitalists refuse to exchange money, whose command over property is increasing, for
property, whose command over money is decreasing, also make
them refuse to exchange it for labor for the production of property.

In a commercial sense, industrial enterprises are never

undertaken nor carried on except with the hope and expectation
of gain.

This expectation, unless under exceptional conditions,

falling markets destroy.

W h i l e capitalists for these reasons

can not afford to invest money in productive enterprises, still
less can anybody afford to borrow money for such investments
at any rate of interest, however low, and but little money is being now borrowed, except for purely speculatives ventures, or
to supply personal and family wants, or to renew old obligations.

Money withdrawn from circulation and hoarded in con-

sequence of falling prices, although neither paying wages nor
serving to exchange the fruits of industry, nor performing any
of the true functions of money, is nevertheless not unproductive.

It may not be earning interest, but it is enriching its

owner through an increase of its own value, and that, too, without risk and at the expense of society.


If this were not the case, and if m oney were, while idle, losing

a little in value instead of gaining, or if it simply held its own,
it would be constantly diminished to the extent of the necessary
expenditures of its owners, who, under such conditions, would
be impelled by every instinct of thrift to seek for revenue through
its employment in productive enterprises.

The peculiar effect

of a contraction in the volume of money is to give profit to the
owners of unemployed money, through the appreciation of its
purchasing power, by the mere lapse of time.

It is falling prices

that robs labor of employment and precipitates a conflict between


it and money capital, and it is the appreciating effect which a
shrinkage in the volume of money has on the value of money
that renders the contest an unequal one, and gives to money
capital decisive advantage over labor and over other forms of
capital invested in industrial enterprises.
" Idle machinery and industrial appliances of all kinds, instead
of being productive of profit, are a source of loss.
stantly deteriorate through rust and waste.

They con-

They can not es-

cape the assessor and tax-gatherer, as the bulk of money does,
and must pay extra insurance when idle.
can not be hoarded.

Labor, unlike money,

The day's labor unperformed is so much

capital lost forever to the laborer and to society.

It being his

only capital, his only means of existence, the laborer can not
wait on better times for better wages.

Absolute necessity forces

him to dispose of it on any terms which the owners of money
may dictate.

These are the conditions which surround the la-

borer throughout the commercial world to-day.
the past is enslaving the labor of the present.

The labor of

A t least that por-

tion of the labor of the past which has been crystallized into
money is enabled through a shrinkage of its volume and while
lying idle in the hands of its owners to increase its command
over present labor and over all forms of property, and to transform vast numbers of honest and industrious workmen into
tramps and beggars.


" T h e s e laborers must make their wants conform to their diminished earnings.

They must content themselves with such

things as are absolutely essential to their existence.


tion is therefore constantly shrinking toward such limits as urg e n t necessities require.

Production, which must be confined

to the limits indicated by consumption, is constantly tending
toward its minimum, whereas its appliances built up under
more favorable conditions, are sufficient to supply the maximum
of consumption.

Thus idle labor, idle money, idle machinery,

and idle capital stand facing each other and stagnation spreads
wider and wider.

The future affords no hope or prospect of im-

provement, except through a change in financial policies. Prices
have been persistently falling throughout the world since 1873,



and as fast and as far in specie-paying countries as elsewhere.
If the policy of chaining the industry and commerce of the world
to a single metal be persisted in by the United States, Germany,
and the other European countries acting in concert with them,,
money must still rise in value and prices must coQtinue to fall.
" T h e depression in productive industry will become more
deathly, and the number of idle laborers will indefinitely multiply.

T h e loss which this country sustains by reason of the

enforced idleness of laborers who, although idle, must still in
some scanty way be supplied with food, clothing, and shelter, is
in the aggregate very great.




Contrasted with


startling sum thus annually lost through the shrinkage of money
and falling prices, the amount which could by any possibility be
lost in a generation through fluctuations in the relative values
of gold, silver, and paper money would weigh as mere dust in
the balance.

If to this loss be added that caused by the nonem-

ployment of productive machinery and appliances, the aggregate becomes appalling.
" T h e average stocks of nearly all commodities are at no time
sufficient for more than a few months' consumption.


constant reproduction mankind would soon be stripped of all
their movable possessions.

No more fatal blow, therefore, could

be directed against the economical machinery of civilized life
than one against labor, and that blow can be most effectively delivered through a policy which strikes down prices.

If all debts

in this country had been doubled by an act of legislation, it
would have been a far less calamity to the debtor and to the
country than the increase in their real burden already caused by
a contraction in the volume of money, and infinitely more disastrous in every sense than an unjust increase in the burden of
debt in the universal stagnation of industry and commerce resulting from the same cause.

T h e doubling of debts would have

left the productive forces unimpaired, while falling prices are
sapping them insidiously and fatally.

Nations have often ex-

hibited an astonishing capacity for sustaining and repairing the
destruction of great and protracted wars.
'' The explanation of this will be found in the fact that their productive forces have at such times continued vigorous and active.


Armies in barracks and on parade are as essentially nonproducers
as when actively engaged, and a considerable proportion of the
additions made to armies in times of war are recruited from the
ranks of nonproducers.

England was never more prosperous

than during the Napoleonic wars.

The Northern and Western

States of this Union were never more prosperous than during
the civil war, and for some time afterward.

So long as all the

productive forces are active almost any burden can be borne.
The debts of the country, great as they are, would scarcely weigh
as a feather if all its labor, were employed.

Indeed, this country

could better afford, in an economical view, to support one million
of soldiers in the field than to support the army of men whom
falling prices have conscripted into the ranks of nonproducers.""

Does the Senator object to a question r i g h t

Mr. JONES of Nevada.

Not at all.

Does the Senator refer to the army of unem-

ployed that has appeared since the present panic or before?
Mr. JONES of Nevada.

I refer to it as a greater or a lesser

army, which, though of varyingnumbers.has always been large,
and has been in existence in this country ever since 1873.

If the Senator will allow me, I suppose that

beginning with the resumption of specie payments in 1879 and
continuing on until the present condition of things arose, under
the threat, as I think, of a continuance of the purchases of silver
under the silver-purchase law, there has never been any period
of the world or any part of the world that found labor so universally and so profitably employed, as has been the case in the
United States during that period, from 1879 to the beginning of
the present year.

Mr. JONES of Nevada.


That remark makes it desirable for

me to state more particularly the way in which a fall of prices operates.

In considering the causes which create general distress,

the advocates of the gold -standard appear to think that there is
no connection between cause and effect unless the effect operates
concurrently with the cause.

Y e t any impartial mind can trace

the great panic of 1873 to causes having their genesis in eon785


ditions whose operation began in 1865.

W h e n , in that year,

the country saw the two mi]lions of men constituting


armies of the North and South withdrawn from fields of destruction to enter fields of production, it was believed that universal
prosperity would bless this reunited people.
W e had not yet come to consider the tremendous influence
which money, that great instrumentality of production and exchange, exercises upon the fortunes of a people, and what infinite care should be exercised to see that its quantity increases
pari passu with population and demand.

W e had not come to

realize that such an increase is an indispensable necessity to

all the hours and moments of a people, and keeping

every man employed.

In April. 1865, ten millions of a popula-

tion that had not been using the money of the Union were added
to the 24,000,000 which formed the population of the Northern
States, without a dollar of money being added with which to do
their business.

That fact alone was equivalent to an enormous

contraction of the currency.
It was a demand made by 10,000,000 of people of the same race
and blood and of the same energetic and aspiring disposition as
those of the population to which they were added.

Those 10,-

000,000 found themselves without a dollar of money.

The money

volume that had been sufficient to do the business of only 24,000,000 people had to do the business of 34,000,000—a contraction of
33 per cent.

Instead of prices rising or even remaining firm—

instead of the country becoming more prosperous—as was to be
expected when these enormous armies were disbanded, times
began to grow harder, as every man now living who was then of
age can remember.
Now. as I have already stated, whenever prices show a tendency
to fall, all the forces of society are enlisted in holding them up.
Every man who has property says to himself, " I will not sell
my property for the prices ruling to-day.

A year ago I could

have got a better price for it, and things must improve."


moved by faith and hope, men hold on to their property, rather
than sell at a reduced figure.
A t the close of the war private debt among the people was
less per capita than at any other period in the history of the



By 1813 the whole framework of business was honey-

combed with debt.

Property in every direction was mortgaged.


A s if the contraction to which I have referred were not enough,
we find that in 1866, during the Administration of Andrew Johnson, the Secretary of the Treasury, Mr. McCulloch, commenced
destroying the money upon whose volume the prices of all commodities and property depended.

He entirely ignored the fact

that at the close of the war an enormous demand had arisen for
money, with no increase in the supply, and that by degrees the
10,000,000 people of the South were drawing on the North for
money to pay for cotton, tobacco, sugar, and everything else
which the South could sell to the North.

Thus the whole coun-

try, with its 34,000,000 people, was compelled to do all its business with the same volume of money that had formerly been sufficient for 24,000,000 only.

So when the crisis came the weakest

link in the chain broke and all fell to the ground.

Then we were

told that it was on account of the previous inflation.

W i l l my friend object to an interruption just

Mr. JONES of Nevada.

I have not quite got to the point of

my answer to the Senator's first question.

Everything collapsed.

The banks of New Y o r k and the other great money centers, not
caring to what extent the prices of property declined in the directions in which production was going on, gave no heed whatever to the complaints of the people and the cries of distress
f r o m ail sections of the country.

But the moment stocks began

to fall in the New Y o r k market there came a demand from the
banks upon the executive department of the Government to issue some $60,000,000 or $70,000,000 of greenbacks to relieve the

They never think the situation demands or deserves

redress until the prices of the gambling securities in which they
deal become affected.
Then followed for years a condition of protracted misery among
the producers of the country.

As I have already explained,

while the volume of money is contracting the fall of prices is
always greater than the percentage of the decrease in the vol785


ume of money would really warrant, for the very simple reason
that owing to the instinct of thrift, when people find the universal trend of prices of property and commodities to be downward
and that the money unit is rising in value the hoarding of money

Money, in other words, is withdrawn from use, its

owners occupying a watchful and expectant attitude.

But while

from this cause prices fall lower than they otherwise would, yet
at such periods almost any thing that will inspire hope may cause
a rise in prices.

W h e n e v e r people who have hoarded their

money believe that bottom prices have been reached and that it
is again safe to invest in business, they will do so.
I recollect very distinctly when, in the year 1878, a continuous fall of prices brought the greenback to a level with gold
and silver, and rendered really unnecessary a law for the resumption of specie payments.

All that was needed was to let

our population grow, as it was growing, at the rate of 3 per
cent per annum with the supply of money that we had.


increasing demand for money—the supply being stationary—
brought each paper dollar up to a level with a dollar in specie,
the more readily because of the Treasury order giving to the
greenbacks full legal-tender power by permitting the customs
authorities to accept them in payment of customs dues.
Mr. C A R E Y .

W i l l the Senator let me ask him a question

W a s it an injury to the country to have resumption at

that time?
Mr. J O N E S of Nevada.

It was an injury to the country not

to have supplied it with a volume of money sufficient to keep
pace with the increase of population.
Mr. C A R E Y .

On the Senator's own statement that would

have prevented resumption at that time.
Mr. JONES of Nevada.

Does the Senator think that equity

between debtor and creditor, the universal employment of labor,
and hope and happiness in the household are things of no possible account, and that the resumption of specie payments was
therefore more important than to have an equitable volume of
Mr. C A R E Y . The Senator has just described the sad condition we were in at the time resumption took place, because of the


fall of prices.

W a s there not immediately after resumption good

times in this country?
Mr. JONES of Nevada.

I was just stating when the Senator

interrupted me, that always when the volume of money is decreasing the instinct of thrift induces those who have money to
hoard their money, to withdraw it from the channels of circulation, and that for that reason the percentage of the fall in prices
is greater than the mere percentage of decrease of money.


therefore, for any reason all the people could he led to believe
that times were going to be good, such belief would have the
effect temporarily to draw out the hoarded money and this of
itself Would constitute an addition to the circulation.
The general belief that the resumption of specie payments
would bring prosperity had for a time that effect—an effect which
was aided by the completion of the elevated railroads through
the city of New Y o r k , so that the prices of property in the upper
part of the city and the outlying suburbs began to rise.


circumstances gave what was believed to be an assurance to men
of enterprise and capital everywhere that there were going to be
good times after resumption, *much of the hoarded money was
put in circulation, and for about two or three years we had some

But there has not been the degree of prosperity

that Senators suppose.
In 1890 I made an analysis of the official reports of the Massachusetts Labor Bureau, at a period when, as we were told, times
were at their very best, and I found from those nonpartisan
reports that an average of 10 per cent of the laborers were constantly out of employment.

As labor is well organized in Massa-

chusetts, what was true of that State must have been true of
all other States of the Union.

The Senator will find the actual

figures in a speech which I had the honor to deliver in this
Chamber in May, 1890.
But even were all the people at work it could not be said that
they were prosperous if they had to be content with the bare
necessaries of life.

Taking into consideration the inventions of

our mechanics and the wealth which they create, they ought to
be able to live much better than they do.

Senators point to some

time in the past and say that the people are living better than they


did then.

Of course they are.

It would be as logical to point to

the time when men lived in the savage state and assert that they
should not now complain, inasmuch as their condition is much
better than it was in that remote age.
Mr. C A R E Y .

Will the Senator please answer my question?

It is all very nice of course to theorize about the savage and civilized condition.

Please state at what time in the history of

this country the people were in a better condition, when p r o s perity was more general among all people, than the period immediately following the resumption of specie payments?
Mr. JONES of Nevada.

I have told the Senator that imme-

diately following the resumption of specie payments, by reason
of the liberation of money that had been hoarded, there was a
sufficient volume for a couple of years and prices rose a little,
but that spurt of comparative prosperity

did not last long.

Prices resumed the falling process and we have had generally
falling prices from that day to this.

A n accidental circum-

stance created for a couple of years what by comparison might
be called prosperous times.
Mr. P E F P E R .

W i l l the Senator from Nevada allow me to

make a suggestion at this point?
Mr. JONES of Nevada.
Mr. P E F F E R .


In addition to the increase of bank circula-

tion there were from $28,000,000 to $30,000,000 silver dollars put
in circulation and added along from year to year.

Mr. JONES of Nevada.

Yes, but that amount was wholly

insufficient for increasing wants.
which happened.

There was another thing

The Senator from W y o m i n g , I believe, is in

favor of that elastic currency which the banks furnish.


1873 and 1879, when prices were falling, and when the stringency
of the money market was as sharply defined as at any period in the
history of this country, when the distress was almost universal,
when Federal troops had to be called out to suppress hungry and
starving workmen, the banks then showed how elastic their currency could be—in the wrong direction.
It was then made to diminish instead of being increased. Although everybody knew that the people wanted more money,


because prices were falling, the banks withdrew their currency
at the very time when they ought to have increased it.


after 1879, when prices were rising, and it was manifest that there
was in circulation alarger volume of money, the banks commenced
enormously to increase their issues of notes. This sort of money,
issued by corporations for their own profit, is always issued when
it is not needed, and withdrawn when it is most needed.

It was

so then, and will always be so with bank notes. A f t e r the withdrawal came hard times.

Mr. C A R E Y .

W i l l the Senator permit me to call his atten-

tion to another fact?

He is a member of the Committee on

Last year that committee was composed of those in

favor of the unlimited coinage of silver, I think one member who
was in favor of the issue of greenbacks and some who were in
favor of discontinuing the coining of silver and the purchase of

Some were in favor of a tariff for revenue only and some

were in favor of a high protective tariff.

That committee sub-

mitted a report with no minority report to the effect that wages
had been generally rising in this country for a period of forty
years and that the same condition existed all over the world,
while the prices of the products of labor were going down.


is not that the best condition in a country, when wages g o up
and products go down?
Mr. JONES of Nevada.
a question.

It takes time to cover all features of

I have not yet reached in its order the question of

wages, which I deal with fully later on.

I will merely remark

now that nothing favorable can be inferred from the rates of
wages prevailing until one knows how many men are relegated
to idleness by reason of falling prices and consequent lack of
profit in business.

Wages, however, I will say, are falling, as

is illustrated by the unprecedented strikes at present existing
in England.

Wages are falling in all gold-standard countries.

Mr. C A R E Y .

The Senator says it is because of a shrinkage

of money?
Mr. JONES of Nevada.


No man can doubt it w h o

examines the situation and reflects upon it.


Mr. C A R E Y .

How brought about?

Mr. JONES of Nevada.

Brought about by a failure of the

quantity of money to increase in accordance with the increase
of population and business.
Mr. C A R E Y .

There is not one man in ten in the United

States of those who are discussing this question who believes
that the panic has been caused by a shrinkage of the money
Mr. JONES of Nevada.

Of those who discuss it there is not

one man in ten nor in twenty who investigates it.

Men are

prone to take for granted everything they read in the goldstandard newspapers and everything the^y hear from gold-standard orators, without making any investigation on their own
Mr. C A R E Y .

I understand from the Senator's own statement

that the wages of the laborer has gone up, but his prediction for
the future is that wages will go down.
Mr. JONES of Nevada.

T h e wages in all gold-standard coun-

tries are now falling; they are being cut down everywhere.
Mr. C A R E Y .

I say according to the last official report we

have, wages are rising and have been rising for forty years.
Mr. JONES of Nevada.

W e do not need official reports when

we see men starving all around us, and starving in Great Britain
and other gold-standard countries.

W e do not need official re-

ports when no laboring man can put his hand on bread for his
family at any hour of the day.
Mr. C A R E Y .

W e are not talking about the panic now, or the

unnatural condition of things existing in the country.
Mr. JONES of Nevada.

It is a perfectly natural condition of

things and prevails, so far as laborers are concerned, in other
countries also.

A volume of money that does not keep pace with

population and demand always ends in a panic.

It brought

the panic on here; it brought a panic on in Australia; it brought
on conditions amounting to a panic in England.

T h e condition

of the workingmen of Great Britain, as I shall show later, was
never so bad as to-day.
Mr. C A R E Y . Y e t the report of the Senator's committee, the
Finance Committee, made less than a year ago, went on to state


that the prices of the laborer were higher in England and elsewhere in the world than heretofore—only a short year ago.
Mr. JONES of Nevada.

For the number of men who have

been retained at work, wages have at least not fallen, and in occupations in which labor is well organized have risen, owing to the
immovable determination of the labor organizations that wages
should not be permitted to be reduced.

That process, as I have

said, could continue for a time, but with prices of products falling wages can not continue rising, nor can they maintain any
rise they may have secured.

W h e n the margin of profits is

wiped out, wages can go no farther.

So we see wages falling

to-day in every gold-standard country.

Falling prices simply

mean the adjustment of prices and the ultimate adjustment of
wages to the volume of money.

Mr. C A R E Y .

I wish to state to the Senator that the volume

of money in this country has not shrunk; that is, our per capita.

Ignorant men like myself, men who have no understand-

ing, must take the official reports of the Government as our
guide, and not set our theories up over and above the official

The official reports show there was a slight shrinkage

during Mr. Cleveland's first Administration—I think, 60 or 70

They show there was an increase during the last A d -

ministration of about $1.70.
Mr. JONES of Nevada.
Mr. C A R E Y .

W h e r e did it come from?

I am not talking about where it came from.

That is the official report.
Mr. JONES of Nevada.

I must have some knowledge of how

ib arises or where it comes from.

Let me say on this point,

taat we have had official reports and official reports.
made with various objects in view.

T h e y are

If we are talking about the

danger of gold leaving the country, and how necessary it is to
issue bonds to increase our gold reserve, then the gold stock in
the country is very small; but if we undertake to show that
there is not money enough to do the business of the country,
then the gold stock is very large—in fact, there is plenty of it.
It appears to depend entirely on the subject we are discussing as
tc how much money we have in the country.


Mr. C A R E Y .

Then I understand the Senator to say the offi-

cial reports are not reliable.
Mr. JONES of Nevada.

I do not depend upon them at all,

neither does any other student.

W e know they are incorrect.

I want to know where the money comes from.

W e know the

amount of greenbacks, the amount of bank notes, the amount of
Treasury notes issued; we know the amount of silver coined under the Bland law, and the amount of Treasury notes under the
Sherman law.

W e know what all those additions mean.


know it as well as anybody in the Treasury.
Mr. C A R E Y .

The Senator's information, then, is more relia-

ble than that of the Treasury Department.
Mr. JONES of Nevada.

The Senator may be willing to ac-

cept any statement that is official, even if it be contrary to wellknown facts, in order to carry out his theory, but I shall not do
Mr. T E L L E R .

For the benefit of the Senator from W y o m i n g

I should like to give a little illustration of the worthless character of the statistics we receive.

The Treasury report put the

amount of gold in England at $550,000,000, and has been putting
it so for several years, while the statisticians of England have
been consulting and debating and contesting the question whether
it is not less than $400,000,000, and the Herschell committee the
other day declared that it is $140,000,000.

Y e t the Government

of the United States has put it right along (although the Department has been criticized publicly for so doing) at $550,000,000, or
over $100,000,000 more than the estimate of any man who pretends to any kind of information on the subject.

A n y man who

has given any attention to the question knows that it has been
for years rated by the Department at over $100,000,000 more
than it really is.

And the same is the case with our own statis-

Mr. JONES of Nevada.

W e can never get at the proper solu-

tion of this money question so long as intelligent men accept
without investigation everything "official " that is told to them.
Neither can the question be understood in any of its relations so
long as men who are regarded by the country as authorities on
the subject entertain the belief that one unit of money, of what785


ever material composed, has any more effect upon prices of property and commodities in the country than a money unit of any
other material; nor so long as men continue to talk o%" intrinsic "
value in money of any kind.
I shall now proceed to speak of the quantitative theory of

I wish to say, preliminarily, that I have heard no Sen-

ator deny the scientific correctness of that theory; yet if it be
correct the so-called standard of gold is a standard of gross injustice.

Political economy, Mr. President, has been called " T h e dismal science."

The most dismal branch of it, if men are to en-

deavor to force conclusions to fit some preconceived theory without reference to principles, is that which relates to money


persistent determination to make the whole science subordinate
to the absurdities of the gold standard has operated like a Westinghouse brake on the progress of the civilized world.
But there is one principle of monetary science that, if held
steadfastly in view, will constitute an unerring guide through
what would otherwise be a path of inextricable difficulty.
That principle is that the value of the unit of money in any
country is determined by the number of units in circulation.


other words the value of every dollar depends on the number of
dollars out.
T h e greater the number of dollars out, other things being
equal, the less will be the value of each dollar; the fewer the
number out, other things remaining the same, the greater the
value of each—and this without any regard whatever to the material of which the dollars are composed.

This is the key to the

financial situation in the United States.

Much more; it is the

key to the financial situation in every land.

W i t h o u t this key

it is in vain that the student attempts to unlock the door leading
to the Arcanum of monetary knowledge.

Unlike many of the

locks made by man, the lock on that door is unpickable.


household of science is one that thieves can not break through
and steal.

He who would enter must first find the key.


this key in hand, the most secret recesses m a y b e explored with

W i t h o u t it, the student travels in a circle—return-


ing, after much labor, to the point from which he started upon
his journey.

Like one in a maze, when most confidently expect-

ing to find his way out, he but sees himself coming up against
impassable barriers.
T o the possessor of this theory and of an impartial mind, that
is to say, a mind in search of truth for truth's sake, there is no
phenomenon of industry, of commerce, or of finance that is not
accounted for.

W i t h it, all facts in the monetary world har-

A l l the teachings of history illustrate its force.

has therefore for support both reason and experience.


It re-

solves all doubts; unriddles all enigmas; makes clear that which,
without it, would be an insoluble problem of political economy.
But in order to receive all the benefits of truth, men must not
approach the investigation with a predetermination to prove
some special theory.

T h e truth is always its own justification.

N o Senator will rise in his place and deny that, other things
being equal, the value of each unit of money in a country depends on the total number of units forming the monetary circulation of that country.

No Senator will attempt to deny that, all

other things remaining the same, the prices of property and
commodities in a country are regulated by the number of units
constituting the monetary circulation of the country; and by the
" n u m b e r of units " I mean, of course, for this country the number of dollars, for France the number of francs, for Great Britain
the number of pounds sterling, etc.
T h e quantitative theory, Mr. President, is not new.

In the

third century of the Christian era the Roman jurisconsult Paulus
gave a description of money which indicates the acceptance at
that early period of the principle of quantity as that to which
the money unit owed its value.

I invite special attention to this

clear-cut statement:
The origin of buying and selling—

Says Paulus—
goes back to barter. Primitively, there was no money. One tiling was not
called "merchandise" and the other " p r i c e , " but every one. according to
his needs, and according to his circumstances, bartered things useless to
him for those which would be useful to him; for it often happens that what
one has too much of another lacks. But, as it would not always or easily
happen that you had what I should have wished for, and that, conversely, I
had wkat y o u wished to obtain, choice was made of a material which, being

declared forever legal value, would obviate the difficulties of barter by means
of a quantitative equation. And this material, stamped in the corner by the
State, circulates with a power which it derives not from the substance but from
the quantity. Since that time, of the things thus exchanged one is called merchandise, and the other is called price.
T h i s description was d e e m e d w o r t h y to be i n c o r p o r a t e d in the
P a n d e c t s of J u s t i n i a n , c o m p i l e d a n d p r o m u l g a t e d i n t h e s i x t h
century, thus demonstrating

t h a t t h e l a p s e of t h r e e h u n d r e d

years h a d not r e n d e r e d it obsolete.

I t i s as s o u n d t o - d a y as i t w a s

w h e n first w r i t t e n .
J o h n L o c k e , in his Considerations, relating to the value


m o n e y , said:
Money, while the same quantity of it is passing up and down the kingdom
in trade, is really a standing measure of the falling and rising value of other
things in reference to one another, and the alteration in price is truly in
them only But if you increase or lessen the quantity of money current in
traffic in any place, then the alteration of value is in the money.
L o c k e further said:
The value of money in any one country is the present quantity of the current money in that country in proportion to the present trade.
D a v i d H u m e , the historian, says:
It is not difficult to perceive that it is the total quantity of the money in
circulation in any country which determines what portion of that quantity
shall exchange for a certain portion of the goods or commodities of that
country. It is the proportion between the circulating money and the commodities in the market which determines the price.
F i c t h e says:
If the quantity of purchaseable articles increases, while the quantity of
money remains the same, the value of the money increases in the same ratio; if the quantity of money increases, while the quantity of purchaseable
articles remains the same, the value of the money decreases in the same
J a m e s M i l l , in his treatise o n P o l i t i c a l E c o n o m y , says:
And again, in whatever degree, therefore, the quantity of money is increased or diminished, other things remaining the same, in that same proportion the value of the whole and of every part is reciprocally diminished
or increased.
J o h n Stuart Mill ( P o l i t i c a l E c o n o m y ) says:
The value of money, other things being the same, varies inversely as its
quantity; every increase of quantity lowering the value, and every diminution raising it in a ratio exactly equivalent,
A n d a g a i n , as I h a v e a l r e a d y q u o t e d i n c o n n e c t i o n w i t h


r e m a r k s o n c o s t of p r o d u c t i o n , M r . M i l l s a y s :
Alterations in the cost of the production of the precious metals do not act
upon the value of money, except just in proportion as they increase or di«
minish its quantity.

R i c a r d o ( R e p l y to B o s a n q u e t ) says:
The value of money in any country is determined by the amount existing.
That commodities would rise or fall in price in proportion to the increase or
diminution of money I assume as a fact that is incontrovertible.
R i c a r d o f u r t h e r says:
There can exist no depreciation in money but f r o m excess; however debased a coinage may become, it will preserve its mint value; that is to say,
it will pass in circulation for the [so-called] intrinsic value of the bullion
which it ought to contain, provided it be not in too great abundance.
J o h n Stuart Mill again says:
W e have seen, however, that even in the case of metallic currency the
immediate agency in determining its value is its quantity.—Principles of
Political Economy, volume II, page 89.
W i l l i a m H u s k i s s o n ( T h e D e p r e c i a t i o n of t h e C u r r e n c y , 1819)
If the quantity of gold in a country whose currency consists of gold should
be increased in any given proportion, the quantity of other articles and the
demand for them remaining the same, the value of any given commodity
measured in the coin of that country would be increased in the same proportion.
S i r J a m e s G r a h a m says:
The value of money is in the inverse ratio of its quantity; the supply of
commodities remaining the same.
T o r r e n s , in his w o r k on P o l i t i c a l E c o n o m y , says:
If the value of all other commodities, in relation to gold, rises and falls as
their quantities diminish or increase, the value of gold in relation to commodities must rise and fall as its quantity is diminished or increased.
P r o f . D e C o l a n g e , i n t h e A m e r i c a n C y c l o p e d i a of


a r t i c l e " M o n e y , " says:
The rate at which money exchanges for other things is determined by its
quantity. * * * Supposing the amount of trade and mode of circulation
to remain stationary, if the quantity of money be increased its value will
fall and the price of other commodities will proportionately rise, as the latter will then exchange against a greater amount of money; if, on the other
hand, the quantity of money be reduced, its value will be raised, and prices in
corresponding degree diminished, as commodities will then have to be exchanged for a less amount of money. * * * In whatever degree, therefore,
the quantity of money is increased or diminished, other things remaining
the same, in that same proportion the value of the whole and of every partis
reciprocally diminished or increased.
S a y s P r o f . S i d g w i c k , of C a m b r i d g e U n i v e r s i t y :
The exchange value of any particular coin will vary in exactly inverse ratio to the variations in quantity of the aggregate.—Principles oj Political
Economy, page 251.
S o a b s o l u t e l y c l e a r a r e t h e l e a d i n g w r i t e r s t h a t t h e v a l u e of


money unit is, in every case, other things being equal, determined by the number of units out, and does not depend on the material of which the money may be composed, that they have not
the slightest hesitation in asserting that the rule applies even
to uncovered paper money, so that the value of every dollar of
gold and silver in circulation is diminished or increased, according as the quantity of paper money is increased or diminished;
and reciprocally as to all of these, the increase in the number of
dollars of either kind diminishing the value of each dollar of the
others, while the decrease in the number of either increases the
value of each of the others, without the slightest regard whatever to the material of which either of the dollars is composed.
If this be so, if the value of the unit of money depends not on
the material of the dollars but on their quantity, what becomes
of the gold standard?

If this be so, inasmuch as silver has been

utilized as money since the dawn of creation, why abandon it
now, unless Senators are prepared to abandon the automatic system altogether?

If we must, by legislation, compel a change in

the value of money (for that is what this measure means), why
legislate so that it can change in one direction only, and that
the direction which is always favorable to the classes that lend
money and live idly on their incomes—the direction most injurious to society, most fatal to industry, most narcotizing to energy?
Prof. Stanley Jevons, in his work on Money and Mechanism
of Exchange, says;
There is plenty of evidence to prove that an inconvertible paper money, if
carefully limited in quantity, can retain its full value. Such was the case
with the Bank of England notes for several years after the suspension of
specie payments in 1797, and such is the case with the present notes of the
Bank of France.

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


T h e distinguished economist and editor, M r . J. R . McCulloch,,
i n c o m m e n t i n g o n t h e p r i n c i p l e s of m o n e y l a i d d o w n b y R i c a r d o ,
He examined the circumstances which determine the value of money, * * *
and he showed that * * * its value will depend on the extent to ivhich
it may be issued compared with the demand. This is a principle of great importance, for it shows that intrinsic ivorth is not necessary to a currency, and
that, provided the supply of paper notes declared to be a legal tender be sufficiently limited, their value may be maintained on a par with the value of
gold, or raised to any higher level. If. therefore, it were practicable to devise a plan for preserving the value of paper on a level with that of gold,
without making it convertible into coin at the pleasure of the holder, the
heavy expense of a metallic currency would be saved.
It appears, therefore, that if there were security that the power of issuing
paper money would not be abused; that is, if there were perfect security for
its being issued in such quantities as to preserve its value relatively to the
mass of circulating commodities nearly equal, the precious metals might be
entirely dispensed with, not only as a circulating medium, but also as a
standard to which to refer the value of paper.
L o r d O v e r s t o n e also admits that irredeemable p a p e r m o n e y
c a n , b y a p r o p e r l i m i t a t i o n of i t s i s s u e s , b e k e p t a t p a r w i t h g o l d .
In adopting a paper c i r c u l a t i o n H e says—
W e must unavoidably depend for a maintenance of its due value upon the
adoption of a strict and judicious rule for the regulation of its amount.
S u p p o r t i n g t h i s v i e w w e find a l s o t h a t A l e x a n d e r B a r i n g , i n
h i s e v i d e n c e b e f o r e t h e s e c r e t c o m m i t t e e of t h e H o u s e of L o r d s
i n 1819, s a i d :
The reduction of paper would produce all those effects which arise from
the reduction in the amount of the money in any country.
A n early and distinguished authority in our o w n c o u n t r y , Mr.
Gallatin, said:
If in a country which wants and possesses a metallic currency of seventy
millions of dollars, a paper currency to the same amount should be substituted, the seventy millions in gold and silver, being no longer wanted for
that purpose, will be exported, and the returns may be converted into a productive capital and add an equal amount to the wealth of the country.
W h e n w e k n o w t h a t t h e s e a r e v i e w s of t h e l e a d i n g w r i t e r s —
all uniting in the assertion that that w h i c h d e t e r m i n e s the value
of m o n e y is t h e q u a n t i t y , n o t t h e m a t e r i a l — i t m u s t e x c i t e o u r
s p e c i a l w o n d e r t h a t S e n a t o r s p r o p o s e t o d e s t r o y s i l v e r as m o n e y
of final p a y m e n t , o r t o r e p e a l a l a w w h i c h b y i t s s l i g h t a d d i t i o n
t o t h e q u a n t i t y of m o n e y h a s a t l e a s t t e n d e d t o m a i n t a i n , i n s o m e
degree, among

us t h e e q u i t i e s of t i m e c o n t r a c t s a n d




W h e n Senators know that all great projects in this

country, on which the employment of labor depends, are based
upon the prices of commodities, and that when those prices are
constantly falling workingmen must be relegated to idleness,
that every debt must be paid in a dollar of increasing value, to
the ruin of merchants and of the projectors of industrial enterprises in which labor should be employed, it is incomprehensible
how they can advocate the establishment in this country of a
gold standard, or of any standard except such as will furnish a
sufficient volume of money for the business of the people.
W i t h reference to Ricardo, it is to be borne in mind that his
profession was that of stockbroker.

Hence we must make al-

lowance for bis desire to maintain the gold standard—knowing,
as he very well knew, that the gold standard meant a certain
level of prices for commodities—that is to say, that it did not
mean the possession of gold, but the ability of money-lenders,
creditors, and the idle aristocracy and income classes of Great
Britain to obtain all the comforts and luxuries of life at a level
of prices getting constantly lower, for, if by those means, workmen were relegated to idleness, those idlers felt themselves not
individually responsible. Their inquiry w a s : ' ' A m I my brother's
In a paragraph of the twenty-seventh chapter of his work on
Political Economy, Ricardo makes the broad statement that a
nation may be on the gold standard without having a solitary
dollar of gold within its entire territory, provided only that,
whatever may be the form of its money, the number of the units
of that money shall not exceed the number of gold units which,
if the country used gold money, would be its distributive portion of the gold of the world.

That proportion is, of course,

fixed by the general range of prices.

Ricardo's statement is:

A currency is in its most perfect state when it consists wholly of paper
money, but of paper money of an equal value with the gold which it professes to represent. The use of paper instead of g o l d -

He continues—
substitutes the cheapest in place of the most expensive medium, and enables the country, without loss to any individual, to exchange all the gold,
which before it used for this purpose for raw materials, utensils, and food—
by the use of which both its wealth and its enjoyments are increased.


It will be remembered that on Saturday I demonstrated, by
citations from the leading- writers that money has no value whatever except value in exchange—purchasing power—and that when
the term " value of m o n e y " is used, it means only purchasing
power and not any value, which, for commodity purposes, m i g h t
attach to the material of which it is composed.
By limiting its quantity—

Ricardo says—
its value in exchange—

W h i c h , as I have said, is the only value that money has—
is as great as an equal denomination of coin, or of bullion in that coin.

A n d he very properly adds:
There is no point more important in issuing paper money than to be fully
impressed with the effects which follow f r o m the principle of limitation of

Of course there is no point more important than that.


principle of limitation of quantity is of the very essence of the
value of money, of whatever material it may be composed.
If money were unlimited in quantity it would have no value
whatever. Nothing has value that is unlimited in quantity.


instead of sand, the ocean beach were strewn with gold dust, it
would have no value whatever as a commodity; yet if that gold
dust were taken up and coined into pieces of money, the number
of such pieces being limited, they would have value precisely as
gold pieces have value to-day.

And, on the other hand, as Adam

Smith says, if gold should reach a certain degree of scarcity, the
slightest bit of it might become as valuable as a diamond.
Ricardo, leaving no form of the statement untouched, recurs
to the subject by making the following remark:
On these principles it will be seen that it is not necessary that paper money
should be payable in specie to secure its value; it is only necessary that its
quantity should be regulated according to the value of the metal which is
declared to be the standard.

If it is not necessary for paper money, in order to be of equal
value with gold money, to be payable or "redeemable" in gold,
how can it be asserted that silver money, in order to maintain
its value in relation to gold,
metal ?

should be redeemable in that

P r o f . F a w c e t t , in his w o r k on P o l i t i c a l E c o n o m y , says:
In discussing- the laws of price, the principle was established that general
prices depend upon the quantity of money in circulation compared with the
wealth which is bought and sold with money, and also upon the frequency
with which this wealth is bought and sold before it is consumed. If more
wealth is produced and an increased quantity of wealth is bought and sold
for money, general prices must decline unless a larger quantity of money is
brought into circulation.
W h e n P r o f . F a w c e t t says that " g e n e r a l p r i c e s must
u n l e s s a l a r g e r q u a n t i t y of m o n e y is b r o u g h t i n t o



h e is b u t s t a t i n g i n a n o t h e r f o r m of p h r a s e t h a t t h e v a l u e of
m o n e y i n c r e a s e s as i t s q u a n t i t y d i m i n i s h e s .
titative theory.

T h i s is t h e q u a n -

P r o f . F a w c e t t f u r t h e r says:

The amount of money required to be kept in circulation depends upon the
amount of wealth which is exchanged for money. Hence, ceteris paribus,
the amount of money ought to increase as the population and wealth of a country
advance.—Political Economy, page 371.
If t h e a m o u n t s h o u l d b e i n c r e a s e d , s u r e l y t h e i n c r e a s e m u s t b e
a n i n c r e a s e of t h e q u a n t i t y .
M r . N . A . N i c h o l s o n , of O x f o r d , i n h i s S c i e n c e of E x c h a n g e s ,
Whatever substance may be used as currency, an excessive quantity of it
(more than is required by the wants of the community) necessarily causes a
diminution oi its purchasing power.
T o s h o w t h a t e v e n g o l d is s u b j e c t t o t h e s a m e l a w of q u a n t i t y ,
M r . N i c h o l s o n asks:
Could a currency, then, consisting entirely of the best gold coin only, be
T o w h i c h he replies:
Certainly, provided that the exportation of gold could be altogether prevented, the amount in use would soon become greater than what was required by the wants of the community, and its purchasing power would
diminish in the same proportion.
W h a t M r . N i c h o l s o n m e a n s b y t h e " w a n t s of t h e c o m m u n i t y "
i s t h e a m o u n t of m o n e y n e c e s s a r y t o s u s t a i n p r i c e s a t t h e i n t e r national level.
E a r l G r e y , w r i t i n g t o M r . G r e n f e l l , o n e of t h e g o v e r n o r s


t h e B a n k of E n g l a n d , a n d r e f e r r i n g t o R i c a r d o , s a y s :
I would remind you (though it is hardly necessary to do so) that in his
admirable pamphlet on this subject, he (Ricardo) has shown the value of
paper money issued by the authority of the state to depend upon its amount
as compared to the wants of the state in which it circulates. No one, I believe, now doubts this to be true, and experience has proved that incomert785

ible paper money will circulate not only without depreciation, but even at &
premium if the issues are sufficiently limited.—[Letter from Earl Grey,
dated May 31, 1881. Quoted in The Bimetallic Controversy, by Gibbs &
Grenfell, page 160.]

Prof. Shield

Nicholson, of Edinburgh, in an article in the

Nineteenth Century for December, 1889, states that every economist of repute since Ricardo's time has been an advocate of the
quantitative theory of money.
Even a so-called debased coinage—that is, a coinage, each
piece of which contains a smaller quantity of metal than the law
prescribes—will maintain itself at par provided the total number
of coins put in circulation be not too large.

On this point, as I

have shown, Ricardo says, that in circulation such coins will pass
for the quantity of metal they ought to contain, provided they
be " not in too great abundance."
W i t h reference to this relation of quantity, and to the absolute necessity of an increase of money pari passu with the demands for it, Prof. Perry, of Williams College, says:
When, however, enterprises are multiplying and exchanges are being permanently increased in number and variety, then there must be a larger volume of money.—Principles of Political Economy, page 409.

W i t h regard to the irredeemable paper notes of the Bank of
England, issued on the suspension of specie payments in 1797.
Prof. P e r r y says:
Cautiously issued at first, bank paper continued at par for several years
after the suspension, which proves that when Government possess the monopoly of issuing paper money, and carefully limits its quantity, and both
receives and pays it out at par, it may keep an inconvertible paper at par, or
even by sufficiently limiting its quantity carry it above par.

How do gold-standard Senators, who talk of a sixty-cent dollar, explain the fact of a one-cent paper pound-sterling being
at par with gold, or even at a premium over gold, without a
penny's worth of gold existing in the entire kingdom?

I sup-

pose they will say the notes were sustained by the '' credit of
the government."

Then, why did the credit of the government

allow the notes later on, when they were issued in larger


to depreciate in value?
A l l these great authorities agree, as I have shown, that the
quantitative theory of money is correct, and that, instead of
applying merely to gold, it applies to all money without discrimination or distinction of material.


Upon what principle or justice or wisdom, then I ask, can
Senators advocate the repeal of a law which permits the continued utilization of silver, w h i c h has been money throughout
all time?

W h y do they wish to repeal a bill whicl\ not only

does not give too much money, but which, as is shown by the
persistent fall of prices of commodities in the country, has not
supplied even enough money for the wants of our people?


value of the notes issued under that law, instead of becoming
less as time has elapsed, has become greater, showing, as I have
stated, that there have not been too many of them issued, but
too few.
I have heard no authorities cited by Senators on the other side.
T h e y prefer to be authorities themselves.

T h e y can not invoke

in behalf of their contentions either the facts of history, or the
works of leading political economists or philosophers in any country of the world.

The junior Senator from Massachusetts [Mr.

LODGE] by his resolution to prohibit the reading of speeches
wished us to understand that it is better to deliver speeches on this
question extemporaneously and without that thoughtful preparation to which so great a subject is entitled.

I have heard no at-

tempt to deny the propositions or postulates that we have laid

W e on our side are subject to the derision of all the gold-

standard newspapers; even the cranks of the country are encouraged to ''suppress" us; but, most remarkable circumstance,
neither in the press nor in the Senate do we read or hear any answer to our arguments.

W e stand here for the prosperity of our

country; for the welfare of all its people.

W e stand here advo-

cating the wisdom, the duty, and the policy of having a reasonable
increase in the volume of our money, an increase sufficient to
maintain undisturbed the range of prices of the products of industry.
Until this is accomplished we shall constantly see willing
workers relegated to idleness, owing to want of profit in business.

W e shall see the producers of the country looted by the

money-lenders, who will receive the unearned increment on every
contract, every bond, and every mortgage.

Until this is accom-

plished, and the quantity of money keeps pace with demand, the
real emancipation of man will not be achieved.

Then only will

the spiritual he fully enabled to take possession of the material.
Then only shall we see every department of society advancing
in intellectuality and in spirituality, for neither men nor women
can ever become truly spiritual while engaged in a feverish hunt
for the absolute necessaries of life.

Mr. C A R E Y .


W o u l d it interrupt the Senator if I should ask

him how he would regulate the quantity?
Mr. JONES of Nevada.

I will reply to the Senator.

In order

that I may do so intelligently let me very briefly recapitulate
the factors that enter into the question.

In a condition of civ-

ilization dependent, as ours is, upon a system of almost infinite
subdivision of labor, there is no human being who by his own
efforts can supply even one of his own wants—none who can contribute more than a fragment of the labor necessary to the production of any one article necessary to life or to comfort.


agriculturist may be said to come nearest to independence, but
in the present day even he must depend largely upon machinery,
so that he is practically subject to the rule I have indicated.
T h e production of food, clothing, and all the other indispensable necessaries, to say nothing of comforts or luxuries of life,
now depends upon the employment of a number of persons each
of whom has acquired skill in the manipulation of a particular
process or machine.

For example, taking the case of a shoe as

a familiar illustration, after the leather and other findings have
been supplied, there are required sixty-four separate processes
to produce the shoe.

This makes of each person engaged in the

work of manufacture but a fraction of a tradesman—but the
one-sixty-fourth part of a shoemaker.

H e can, as I have said,

supply, with his own labor, not even one of his wants.


most that he can do is to contribute a small fraction of the
effort necessary to the production of any one article which
he needs.

Hence, in order to render his own labor effective in

the supplying of his wants, it is absolutely indispensable that he
should have something with which all wants can be supplied—
something through which or by which to supplement his own
efforts and his own products by the efforts and products of other
men, and through and by which the products of the labor of


other men can be effectively demanded, and in response to which
they will without fail be instantly supplied. W i t h o u t some means
of thus commanding the efforts of others—of resolving and transmuting our own labor and its products at will, and at any moment, into the labor and products of other men—civilization as
we know it could not exist for one day.
No man but a beggar makes a demand directly for a coat, a
hat, a shoe, or anything else that he wants.

Every man works

in his own vocation, and from his labor or the products of his
labor, obtains money.

W i t h this money he can demand and

command the efforts and the products of the labor of other men.
This, as I have already stated, makes the demand for money urgent and incessant.

But this demand is not a demand for gold—

except in so far as gold is money.

If gold were not money it

would represent a demand but for one thing—a metal, which, as
a metal, serves but a trifling and inconsequential purpose in the
economy of life.

As a metal it would supply but one want—the

desire for decoration; and that want, in comparison with all the
material wants of life—how insignificant!
as money?

W h a t does it supply

Money supplies all wants, and therefore for gold as

money there is an importunate and unceasing demand.
Mr. C A R E Y .

How with silver?

Mr. JONES of Nevada.

It is the same with silver.


money enables men to supply every want, not because it is silver,
but because it is money.

There being, as I have said, no sub-

stitute for money, however dear it may become—however much
its command over commodities increases—it must be obtained,
to meet maturing obligations, to save men from bankruptcy, and
to purchase the necessaries and comforts of life.
for all necessaries and comforts is made by people.

The demand
W e r e there

no people there would be no need of money or anything else.
A s population increases there will be an increased demand for

It makes no difference what the number of dollars may

be with which a population starts on its career; when prices Of
commodities and property become adjusted to that number of
dollars and thousands of millions of dollars of debts are contracted
on the basis of those prices, the duty of the statesman is to see
that equity and justice are not violated through changes in the


quantity of the circulating medium by which those debts are
W h e n a given population has become accustomed to a certain
quantity of money, to which all prices have become adjusted, if
the population increases at the rate of 2 per cent there will surely
be needed 2 per cent more food, 2 per cent more clothing, 2 per
cent more houses, and 2 per cent more of all other things that
g o to supply human wants.

Inasmuch as those wants can only

be supplied with money, it is clear that there should be an increase of 2 per cent in the quantity of money.

Otherwise the

change of price arising from changes in the relation of supply and demand affecting the commodities themselves will be
intensified by changes brought about by variations in the quantity of money.
reason of

There being a greater demand for money by

the increased population commodities can be ex-

changed only at a lower and lowering range of prices, which
means that a constantly increasing quantity of the products of
labor must be exchanged for a given sum of money.
This means the destruction of men who have agreed to make
deferred payments, and, in this age, all great undertakings must
necessarily be conducted through the medium of deferred payments.

I assert, therefore, that as population increases the very

least increase that should take place in the volume of money is
an increase proportioned to the percentage of increase of the

Does anybody doubt this?


A h ! Mr. President, I think not.

Can anybody answer the
But, it will be

said, do you think silver money better than gold?

I reply that

under any circumstances it is just as good, and that by reason of
the fact that there is not enough gold, we should under no circumstances abandon silver.

The entire history of the world

shows that there has never been too much of both.
Mr. C A R E Y .

W i l l the Senator permit me to call his atten-

tion to the question I asked him?

I asked the Senator how he

would regulate the quantity of money, assuming that we have
not the right quantity now.
Mr. JONES of Nevada. I have stated that the least quantity
which should be added to the money volume is a quantity corresponding with the increase of population.
W h e n e v e r the


world shall be prepared to intelligently regulate the quantity
of money by trusting to the wisdom of legislation to supplement
the deficiencies of the yield from the mines there will not be
the slightest difficulty in arriving at methods of regulation.
That is a matter of mere detail.

So long, however, as the cred-

itor classes fear to trust the regulation of the money volume to
human wisdom, so long as they prefer to abide by the automatic
system, they should not distort that system in their own interest; they should not so legislate as that with each advancing
year the burden upon the backs of the debtors shall become
greater and greater.


W h e n we know that the mines of gold and silver taken together have never produced too much of both metals to serve
the purposes of money, there is no reason to assert that the
mines of one metal alone will yield enough.

W e know that the

placers, from which nine-tenths of the gold yield of the world
has been obtained, have been exhausted, and that the earth has
been raked as with a comb in the vain search for others.

It is

certain, therefore, that so long as the world relies upon metallic
money the reliance must be on silver.
The only persons whose interests can be subserved by discarding silver as money of final payment and as a measure of value
are the creditor classes, and they permit neither justice nor consistency to stand in the way of the achievement of their purpose.
W h i l e professing to distrust legislative interference with money
they destroy one-half the money of the world by legislation in
their own behalf.
W h e n , in 1816, Great Britain adopted the gold standard the
yield of gold had been for some years declining.

But that fact

did not prevent Great Britain, whose creditor classes were then
as they are to-day the governing classes of that country, from
adopting that standard.

They knew that whoever should be

hurt by that transaction it would not be themselves.

They un-

doubtedly expected that other nations would follow their example, but in this they were for a long time disappointed.
The accessibility of the French mint for the unrestricted coinage of both silver and gold enabled the world to utilize all the


silver as well as all the gold yielded by the mines.

H e n c e the

action of Great Britain in the interest not of the masses o f her
people, but of the classes only, was prevented from inflicting
upon society the injury which would otherwise have resulted.
The bimetallic law of France held the metals together.

It was

as easy for the world to pay in gold the debts they owed to Great
Britain as it would be to pay those debts if that country had
maintained the double standard.
Mr. C A R E Y .

It did neither good nor harm.






Mr. JONES of Nevada.






It did neither good nor harm at that

But as soon as the mints were closed to silver the harm,

as would naturally be expected, began.

W i t h the demonetiza-

tion of silver the creditor classes not only of Great Britain but
of every gold-standard country, began to receive from their investments an increment unearned and unbargained f o r ; and
having now for twenty years enjoyed the privilege of receiving
such increment it is regarded not as a privilege merely but as a
right vesting by mere prescription in the privileged classes of
all countries, against which the debtors are expected to make
no defense.

So we find that debtor countries like the United

States -which have to pay annually an enormous amount of
money, or its equivalent in the products of labor, to the creditor
classes of Great Britain are called upon by the creditor classes
not only of Great Britain but of our own country to g o to the gold
This country is a debtor country.

It is not in the position

of Great Britain, whose creditor classes, as Mr. Gladstone says,
have ten thousand million dollars out at interest.

There is no

reason—none has been or can be shown—why the United States
should go to the gold standard.

This country needs an increas-

ing volume of money as population and business increase.

It is

impossible for it to get gold except at the expense of ruinous and
continuously falling prices—a fall of prices by and through which
the property of the producing masses is being and will continue
to be confiscated into the possession of the creditors.
If other countries want gold let them have gold.



let them have it if they are the countries to which we send our
wheat, cotton, tobacco, meat products, and petroleum for sale,
so that the prices of those commodities may be such as will properly compensate our farmers, planters, and others for their labor.
W h a t we want is enough money to maintain a firm range of
prices, so that men will not have the discouragement of transacting business upon an inclined plane—producing goods upon one
level and disposing of them at another and always a lower level.
Mr. C A R E Y .

May I interrupt the Senator from Nevada ?

Mr. JONES of Nevada.
Mr. C A R E Y .


A s I understand the Senator, he says that good

money is made by simply putting the stamp of the Government
on the face of it; and if we can not have both gold and silver it
would be better to have silver than gold.
Mr. JONES of Nevada.


The annual gold yield

is almost all consumed in the arts and manufactures, and even if
it were not, the quantity produced is whollyinsufficient to maintain prices of commodities at a firm range, so that business can
not be planned or conducted with any intelligent foresight.

Mr. C A R E Y .


The Senator talks of the automatic theory

which depends upon the production of these two metals.
he on his own statement trust the automatic theory?


W i l l it be

safe to be guided by that in regulating the amount of money?
Mr. JONES of Nevada.

By taking both metals and utilizing

them to the full, justice may for a time be maintained.

It has

been demonstrated to the satisfaction of every impartial mind
that there is not gold enough, and that there is no chance of
getting enough, so that it is absolutely essential to continue the
use of silver to the fullest extent.

T h e production of silver is

not so fugitive a work as that of gold—not so dependent upon

The larger proportion of the gold stock of the world

is the production of nomads—only an infinitesimal portion having been produced by men who made the work the occupation of
their lives.

It has not been produced from mines or by means

of machinery.
T h e production of sil.ver, on the other hand, is a h i g h art.


requires the best machinery, the best mechanics, the best engi785


neers, and the best miners; and although mines of any great degree of fertility are extremely few, yet in the mines of moderate
or slight capacity there is promise of enough of the metal, fortunately for the interests of society, to be yielded slowly and
gradually through the years, an annual yield perhaps sufficient
to meet the monetary demands of the world for some time to

But the metal can not be poured out in a flood, as has

been foolishly and ignorantly stated.

The business is one that

few men, even in the most favored of its periods, will be content
to follow.

Railroads have long penetrated every section of the

mining regions of this country, yet but a very small number of
the population, whether capitalists or working miners, engage
in the business.

It is a business in the nature of a lottery.

W h i l e there is in it enough of hope to allure men of sanguine
temperament who will take great risk on the chance of a great
gain, there is at the same time enough of disappointment to discourage and repress any material increase in the numbers of
those who might wish to follow the occupation or invest capital
in it.
Mr. P E F F E R .

May I ask the Senator a question?

Mr. JONES of Nevada,
Mr. P E F F E R .


I wish to ask the Senator whether it is not a

fact that a very large proportion of the gold which is the product of the mines comes from the mines which produce silver?
Mr. J O N E S of Nevada.

A very large amount of it, I will an-

The Comstock mines have produced on an average about

45 per cent gold and 55 per cent silver.

The great silver fields

have been extremely few—so few that their names have become
familiar to every ordinary reader—the Comstock. Leadville, and

W h e r e are any others?

The Comstock lode, however,

is now practically exhausted.
As for the great mines that we sometimes hear of being discovered in Mexico, I have always noticed that while the marks
made in the highway by those entering Mexico for purposes of
mining are the marks of shoes, the marks made on the return
journey are of bare feet.

Any man can judge for himself as to

the profit of an occupation in a country of w h i c h such a state of
things can be predicated.


T h e wonderful stories told of the ease of production of silver
and its slight cost emanate f r o m people who know nothing whatever about the question.

T h e great and convincing truth is

that with alleged profits exceeding those of almost any other
business, capital does not enter it; and with wages of


higher than average wages in other occupations workingmen
do not engage in it.

As 1 have stated, but a very small propor-

tion of the population of this or any other country engage in
that business, though it is free and open to all.

Show me any

other business in the world in which the profits are said to be so
large, and I will show you a business which will be overcrowded
in two months.

There is no overcrowding here.

[ A t this point the honorable Senator yielded to Mr. VOORHEES.]

Monday, October 23, 1893.
Mr. JONES of Nevada.

Mr. President, when I yielded the

floor on Saturday, I had been diverted by the questions of my
friend, the Senator from W y o m i n g , from the direct line of my

I was attempting to demonstrate that the standard of

a country could not be gold, that it could not be silver, that it
could not be any especial material, but that of whatever material
the money might be composed the standard of a country is and
must be quantitative; that the value of the monetary unit depends upon the number of units out.

In support of my conten-

tion, I cited the opinions of the ablest political economists—the
leading thinkers and writers on the science.

I wish this morn-

ing to continue for a few minutes the consideration of that proposition, and in that connection to deal with a " fad," if I may so
term it, of the gold-standard press.


It is said that in arguing for the free coinage of silver and for
the increase of the quantity of money we forget the quality of

There is a great delusion about the quality of money.

W h y , Mr. President, there is no quality in money except that
imparted to it by quantity.
creation of quantity.


quality it has is the

The only quality that money has is that

by which it exercises command over property and services.

T h e extent of that command, exercised by each piece, can be determined only, and is determined wholly, by the number of
pieces out.

As I have shown by citations from the leading

authorities, the term value, as applied to money, has no meaning
whatever except purchasing power.
Until men come to perceive this they can not understand the
first principles of the subject, and if they attempt to discuss it
will find themsslves revolving in a circle, making no progress
with the discussion, but always coming back to the point from
which they started.

Y e t nothing seems more difficult to dis-

lodge from the minds of men who have looked into the question
only superficially than that there is some value in money apart
from purchasing power.
A l l the authorities agree, not only on that point, but also that
this value (purchasing power) of each monetary unit is determined (other things being equal) by the quantity of those units
in circulation.

The only consideration of consequence, there-

fore, in respect to the value of money is that it shall remain unchanging through time.
regulation of the quantity.

This effect can be secured only by
Of this doctrine, as enunciated by

the economists, there can be no possible denial, consistent with
the principles of reason.
T h e statement that there is some quality in money independent of that derived from its quantity is based on the exploded
idea that money has or should have " i n t r i n s i c " value, as if
value could be intrinsic, or could reside in an object.


In like manner, it is said by the advocates of the gold standard
that the reason why the silver dollar maintains a dollar's worth
of value or purchasing power is because the credit of the Government is back of it, and that it is that credit which keeps silver money at parity with gold.
It is not the credit of the Government that keeps it at a parity.
Seventy millions of people are constantly striving for the money
of the country, and it is this strife—this competition of all the
people to get money—that keeps the metals at a parity.


matter what the credit of the Government might be, if the people


were to strive harder for one metal than for the other it would be
impossible to keep them at a parity.
If it is the credit of the United States that keeps them at a
parity, why is it supposed that free coinage, or a larger number
of silver dollars, if put out, would endanger the parity?
Is it pretended that the extent of the credit of the United
States is only a few hundred million dollars?
question of credit.

Let us test this

Suppose the United States should issue

$3,000,000,000 in bonds; does any one mean to say that they
would not be at par?

W e know that the Republic has already

in one generation paid a national debt of nearly that amount,
and when we bear in mind the number and the energy of our
people there can not be a doubt that the credit of the Government could keep all those bonds at par without the slightest difficulty.

The credit of Great Britain, which contains but a little

over half our population, keeps consols for a larger amount than
this nearly at par.

But the issue of bonds and the prices of

bonds are matters involving credit.
The keeping of money at par, and having bonds at par, are
totally different affairs.
Notwithstanding the high credit of the United States—a credit
not excelled by any government in the world—no man in his
senses will for a moment pretend to say that we could issue three
or four thousand million dollars, whether of gold or any other
kind of money, and keep that quantity of money at par with the
gold standard of the present time.

Prices of commodities would

rise far above present gold prices, and it would be impossible to
keep so much money at a parity with the much smaller quantity
of gold that is now in circulation in gold-using countries.
Even if the number of dollars thus added were of gold, the fall
in value of each dollar, caused by the enormous issue, would constitute an entirely different gold standard; that is to say, the
range of prices of commodities which would then prevail would
be a range wholly different from that which now prevails.
T h e idea that the value of a Treasury note issued by a Government such as ours is not based on the number issued, but on
something behind the note, or upon the credit of the Government, deforms the whole idea of money.

It is clung to because


people have been accustomed to look upon money as something
of " intrinsic" value, and on that theory they have been at a loss
to account for the fact that uncovered paper dollars, when sufficiently restricted in number, have precisely the same purchasing power as gold money, quantity for quantity.
question of credit about it.

There is no

No man takes a piece of money of

any kind, whether gold or silver or paper, as a piece of credit.
If it is not legal tender it is not, in the true and full sense, money
at all; if a full legal tender it needs nothing behind it but the law
which makes it a legal tender for all debts and demands, and a
regulation of its quantity, to maintain the monetary unit at any desired level of value.
It is not the credit, but the power of the Government that is
behind it in the law of legal tender, and in the right to increase or diminish the issues.

Taxes are payable in money, and

debts are payable in money, and the only way that people can get
money with which to pay debts or taxes is by competing with
one another for it in all the occupations of life.

It is this uni-

versal competition to get it that fixes the value of all kinds of
money, as it is competition that fixes the value of all other

In this work of competition the number of dollars to be

competed for (other things being unchanged) must determine the
value of each dollar.
T h e quantitative theory does not mean that all countries would
require to maintain the same quantity of money in order to arrive at the same result.

The immemorial habits and customs

of the people of each country fix for them the per capita which
they need.

The French peasantry keep a good deal of money

stored away in old stockings.

But even with the quantity of

money in France much greater than the quantity of money in
this country, money would not, unit for unit, have the same
effect upon prices in a country like France that it would have
in a country like the United States, in which the habits of the
people are altogether different.

But, other things remain-

ing unchanged in any given country, the volume of money regulates the range of prices, or, to state the same thing in other
terms, it is the volume of money that regulates the value of each
of the units of money.

The character of the material of money


has nothing whatever to do with fixing the value of money.


is always the quantity—the number of dollars in comparison with
the demand for dollars—that fixes their value.
In the case of metallic money the regulation of quantity is
effected by nature through the limitations placed upon the production of the metals.

In the case of paper money, the regula-

tion would depend upon the wisdom of legislation.

The effect

of limitation of quantity is precisely the same in both cases.
If the quantitative theory be not correct—if the value of the
dollar is determined not by the number of dollars out, but by
what there is behind these dollars, or what they are based on—
then the adherents of the gold standard have absolutely no defense against the plan at one time suggested that the Government should issue money on the basis of land—the money to b e
lent to farmers on an appraisal of the value of their land.
If the theory be correct that something must be '' b e h i n d "
money, and something other than the demand of all the people
must be a " b a s i s " for money, it is wholly impossible to answer
the theory which contemplates land as a basis for money, or as
being behind money.

That theory is entirely erroneous, but is

derived naturally from the idea that money must have something as a basis or something behind it. The fact is that all that
is a basis for money is the universal demand for it, and that is
basis enough.

Nothing need be behind it except the law of legal

tender, which compels every man to take money in payment of
The farmers of this country are a most intelligent and patriotic class of men.

A l l that needs to be done in order to show

them that they are wrong in demanding an issue of new money
to be loaned on land as a " basis " is to demonstrate to them the
true principles of monetary science, especially the principle
that, other things being equal, the value of each dollar is determined by the number of dollars out.

But it is impossible to

demonstrate their error if it be insisted or if it be true that
money must have any other basis than the demand of all the
people for it.

If it be true that money must have something

concrete upon which it shall rest as a basis, then the theory that
hind is a good basis for money can not be controverted.

Land is


better than gold, which, notwithstanding its weight, may take

But it is not true, and the land-loan theory is wrong.

T h e quantitative theory is impregnable and intelligible, and its
general and universal acceptance would immediately dispel all
monetary illusions.

W h e n it comes to be understood that it is

the increase or the decrease of the quantity of money in the community that installs justice or creates injustice, the situation
will immediately become as plain as day.
S T A N D A R D S OF V A L U E .

W e are informed by so-called " financiers" and statisticians,
and by an army of ready-made political economists among the
gold-standard press—gentlemen who have not taken the trouble
to carefully study the subject—that the value of gold is unchang
ing, and that to attempt to depart from what is called the



standard " would be to set at naught all the principles of justice,
and even to defy the very laws of nature.

This is an argument

used only since the demonetization of silver.

Up to that time

it was well recognized by all who gave any attention to the subject of money, and is still well recognized by all the authorities
on political economy, that both silver and gold are variable in

So serious indeed have, from time to time, been the

variations in the value of money that thoughtful men—some of
them distinguished economists—have long observed and commented on the gross injustice which such variations involve, and
various suggestions have been made of methods for securing
stability of value in the monetary unit.
CJp to the period when the creditors discovered the ingenious
plan of surreptitiously increasing by an appeal to the legislative
arm of all governments the value of all debts due, and to become
due, to them, by depriving debtors of the immemorial right to pay
in either of the two metals, it was acknowledged by the most
eminent economists that the adoption of a single metal as a socalled " standard" of money did not secure so great a degree of
uniformity in value as the adoption of both metals.

This may

seem a paradox to those who have not reflected on the essential
nature of money and upon the method by which it obtains what
is termed its " value," which it does through the medium of the
prices of commodities.

They ask: How can there be a standard


composed of two things?

Must not a standard be one?

Can it

be two or more?

There can be no doubt that the discussion of the value of moneyis much clouded by the entirely unwarranted application of
the word "standard" to the material of which money is made.
The idea of a standard is of something that is absolutely uniform
and unchanging.

Now, the only uniformity there is about gold

is that, like all other elementary substances, it is, chemically considered, always the same, but people do not care for gold because
of its chemical properties.
desire it.

It is as money that all the people

Undoubtedly, those who keep their eyes always on

the metal itself, and not on the manner in which it is fulfilling
its monetary duty, think it is unchangingin value, and so long
as they confine their gaze to the metal alone, they must always
continue to think so.

Suppose that in the case of a machine, as a

steam engine, a certain pressure of steam—say 100 pounds—were
the normal pressure for the accomplishment of a prescribed purpose, and that if that degree of pressure were maintained the
most efficient service could be rendered consistent with safety.
Imagine what would happen if, instead of noting the oscillations
of pressure by observing the movements of the indicator upon
the gauge, the engineer should simply f as ten the figures "100 "
in bold type to the end of the indicator!
In such case, no matter how violently the pressure of steam
rose, how correspondingly the needle became deflected, or how
far it persisted in its course around the dial, a superficial glance
would always show that the indicator pointed to " 1 0 0 " — a degree of pressure understood to be entirely safe for that engine,
and best adapted to steady and uniform action of the machinery
to which the engine supplied motive force.

This absurdity is

precisely analogous to the course pursued by the creditor and
annuitant classes and the champions of the gold standard.


p i n t o gold the word "standard," and no matter how wild its
vagaries or violent its oscillations, its movements are always
apparently the movements of the " standard," so that whatever
point it reaches is assumed to be the correct point.

They wholly

divert the attention of the onlooker from the objects which it is


the function of money to measure—thousands of objects whose
relative positions taken altogether would unmistakably demonstrate that gold was changing in value.



T h e seeming paradox involved in the idea that what is called
a "standard of v a l u e " may be composed of more than one material is made plain when it is borne in mind that it is not the
material, but the quantity, of money which constitutes the standard.

The quality to which in the case of value the word "stand-

ard " is applied is not a quality inhering in the material of the money.
Value, as I have shown, does not reside in any article or in the
substance of any article.

W h e n the consideration to be kept in

view is not an object but a service—not a material but a function—the instrument by which that service or function is performed need not necessarily be limited to one material.


much as the purpose to be served is the attainment of a correct
result, whatever the material by which it m a y b e accomplished,
such number of materials as may be indispensable to that end
should without hesitation be employed.

If we wish to obtain a

c l o c k which shall indicate the correct time we do not insist that
it shall be made of one material.

The material of which money

is made is no more a standard of value than the material of a
clock is the standard of time.
T h e yardstick which by statute is declared to be the model for
all other yardsticks is made of bronze, but bronze is not therefore a standard of length.

A bushel measure may be composed

of any material, or of any number of materials combined, but
this makes no difference so long as the precise purpose sought is
attained, namely, the securing of perfect acuracy of measurement.

If we assume the model or "standard " bushel measure

to be composed of brass, it is not the brass that is the "standard of measure."

Assuming that all bushel measures were made

of brass, then this particular piece of brass comprising the model
constitutes a standard by which to test the metal of which all
future bushel measures may be made, but this does not constitute
brass per se a " standard " of cubical content.
A l l the functions of money are performed through the me785


dium of prices in the manner I have already indicated.

It is

the quantity of money, irrespective of the material of which it is
composed, that determines what shall be the general level of

Credits aid in the establishment and maintenance of

prices, but credits are themselves based on the quantity of
money available for liquidation.

They can be safely extended

only to the degree to which money payments can, in the ordinary course of business, be made.

No one will pretend to say

that credits can be wisely extended beyond that point.
Hence a gold standard means the maintenance of a level of
prices consistent with the quantity of gold in use as money,
w h i c h means a level of prices on the average the same as those
prevailing in gold-using countries.

This must be clear, from

the consideration that if from a country which possessed no gold
mines all the gold had been sent out, it could be attracted back
only to buy commodities; which clearly means that unless the
prices of the commodities forming the subject of international
trade were for the moment lower here than in the country from
which the gold should come, we could not have exported the commodities except at a loss.


I have said that the injustice of a variable money unit has at
various times led to suggestions for the remedy of the evil.


early as 1822 an English writer named Lowe proposed that authoritative returns should be collected, from a variety of localities, showing the prices of commodities of most general consumption, and that from those a table of reference be constructed,
having regard to the comparative quantities consumed in an
average household.

By following, he said, the course of prices

as shown by such returns all contracts which by their terms were
payable in money could, according as they matured, be adjusted
in accordance with the principles of equity, and the value of
money thus be kept constant.
Some eleven years later a scheme somewhat similar was proposed by another English writer, named Scrope, the author of a
work on political economy.

In 1838 G. R . Porter, author of The

Progress of the Nation, gave publication to another plan involving the same general features, with tables of prices of fifty lead785


ing commodities, showing their average monthly fluctuations for
a period of years.
Commenting on those plans, Prof. Jevons, who himself fully
recognized the evil of the varying value of money, writing so
late as 1875, says:
Such schemes for a tabular or average standard of value appear to be perfectly sound and highly valuable in a theoretical point of view, and the practical difficulties are not of a serious character. To carry Lowe's and
Scrope's plans into effect a permanent commission would have to be created
and endowed with a kind of judicial power. The officers of the department
would collect the current prices of commodities in all the principal markets
of the kingdom, and by a well-defined system of calculations would compute from these data the average variations in the purchasing power of

Inasmuch as Prof. Jevons was one of the most ardent and distinguished of the champions of the gold standard, it must surprise some of the eminent statisticians of this country who think
things are perfect only when they emanate from Great Britain,
to know that so eminent an economist and Englishman had actually admitted that gold was a varying standard of value, and
was not as immutable as truth itself, which, to these AngloAmericans, gold will always appear to be so long as it is the
money of Great Britain.
Prof. Jevons continues:
The decisions of this commission would be published monthly, and payments would be adjusted in accordance with them. Thus, suppose that a
debt of £100 was incurred upon the 1st of July, 1875, and was to be paid back
on the 1st of July, 1878, that the value of gold had fallen in the ratio of 106 t o
100 in the intervening years—

And in passing let me remind Senators that instead of falling
the value of gold has risen at an average rate of 2£ per cent per
annum as shown by the fall in the general level of wholesale prices
for the past twenty years, ever since the year when the United
States demonetized silver.

Prof. Jevons, however, for good rea-

sons, suggested the idea of a fall, and speaking of such fall, he
then the creditor would claim an increase of 6 per cent in the nominal
amount of the debt.

There is not a doubt that in the case of a fall in the value of
gold as supposed by Prof. Jevons, the creditor would insist
on equitable compensation for the fall: he would insist on being
made whole to the full extent of the increase of prices of commod785


ities—for that is what is meant by a " f a l l " of gold money or any
other kind of money.

But in the case which more immediately

comes home to the great producing masses, the persistent and
ruinous fall in the prices of the products of farm and factory f o r
the past twenty years, and the consequent and ruinous increase
of the burden of debt, the creditor sees no equity to be asserted
by the debtor and denies that this persistent and extraordinary
fall of prices is an injury to men who have borrowed money with
which to buy homes or to enter upon business enterprises in the
hope and expectation that the prices of their products would enable them to pay interest and to repay the loan without depriving them of their enire property.
P r o f . Jevons then enters upon a discussion of details affecting
the work of the commission which he suggests, and refers to
the confidence which could not fail to be entertained in the labors
of such a body, in view of the monthly publication, which he
recommends, of the figures on which their calculations might
be based, and the names of the localities from which such figures had in each case been taken.

This would give full pub-

licity to all the data and admit of the results being verified, so
that any departure from accuracy could at once be detected.


then adds this significant comment:
"Whatever method were adopted, however, the resuds would be better than if
we continued to accept a single metal for the standard, as w e do at present.
(Money and the Mechanism of Exchange. Appleton's edition, page 331).

Prof. Jevons knew and admitted that Prance, when giving unrestricted coinage to both metals without distinction, had, for
three-quarters of a century, kept the two metals at a parity under
circumstances of extraordinary variation in their relative yields
from the mines; and, while too loyal to suggest that they did
things better in France than in England, he could not avoid
stating his conviction that some plan should be adopted which
would secure equity of contracts caused by changes in the volume
of money.

In closing his chapter on the subject he says:

Such a standard would add a wholly new degree of stability to social r^t?
tions, securing the fixed incomes of individuals and public institutions fro;:
the depreciation from which they have often suffered.

Observe how careful he is not to suggest to the creditors thai
in the process of time an opposite effect might possibly come
about, namely, that they themselves might be compelled, in the


interest of justice, to yield or waive some of the unearned increment, the wrongful advantage, which under the single standard of gold would come to them from a literal but unjust interpretation of the terms of bonds, mortgages, and time contracts.
P r o f . Jevons knew that the only possible chance of getting
his proposed plan into favor was by giving prominence to the
considerations which weighed in favor of the creditor.

He con-

tinues his statement of the advantages that would follow the
adoption of the plan:
Speculation, too, based upon the frequent oscillation of prices, which takes
place in the present state of commerce, would be to a certain extent discouraged. The calculations of merchants would be less frequently frustrated by
causes beyond their own control, and many bankruptcies would be prevented.
Periodical collapses of credit would no doubt recur from time to time, but
the intensity of the crises would be mitigated, because as prices fell the liability of debtors would decrease approximately in the same ratio.

But this approximate decrease of the liability of debtors,
which this distinguished economist knew to be just and to be for
the enduring welfare of his country and the world, is the very
thing that the creditors cry out against, and which they are determined at all hazards to prevent.
Alfred Marshall, professor of political economy in Cambridge
University, England, recognizing the injustice of gold as a
standard of deferred payments, favors recourse to a tabular

He especially recognizes the injury to all classes of

workers by their relegation to idleness through the operation
of a defective monetary system.
In a paper read in 1885 before the " Industrial Remuneration
Conference " of Great Britain, Prof. Marshall said:
A great cause of the discontinuity of industry is the want of certain knowledge as to what a pound is going to be worth a short time hence. With
every expansion and contraction of credit prices rise and fall.

And as credit is based on money an expansion or contraction
of the volume of money results in an expansion or contraction of
the volume of credit.

I have already shown by quotations from

the various economists that the level of commercial prices rises
or falls in general accord with the increase or decrease of the
quantity of money.

Prof. Marshall continues:

This change of prices presses heavily even on those who kept themselves
as far as possible from the uncertainties of trade, and increases in many

ways the intensity of commercial fluctuations. For just when private traders and public companies are most inclined to reckless ventures the interest
which they have to pay on borrowed capital represents an exceptionally
small purchasing power, because prices are high. And in the opposite phase,
when their resources are crippled by the stagnation of business, the lowness of prices compels them to sacrifice a much greater amount of real
wealth in order to pay their interest. When traders are rejoicing in high
prices, debenture and mortgage-holders and other creditors are depressed,
and when the pendulum swings the other way traders, already depressed,
are kept under water by having to pay an exceptionally heavy toll to their creditors.
T h i s is n o t t h e s t a t e m e n t of an a d v o c a t e of s i l v e r , b u t of o n e
o f t h e m o s t d i s t i n g u i s h e d p r o f e s s o r s of p o l i t i c a l e c o n o m y n o w
l i v i n g , a n d h e is n o t r e f e r r i n g t o a " d i s h o n e s t s i l v e r d o l l a r , " b u t
to a dishonest gold pound.

Prof. Marshall continues:

This serious evil can be much diminished by a plan which economists
have long advocated. In proposing this remedy I want government to help
business, though not to do business. It should publish tables showing as
closely as may be the changes in the purchasing power of gold, and should
facilitate contracts for payments to be made in terms of units of fixed purchasing power.
A f t e r d e s c r i b i n g h i s p l a n , s o m e w h a t s i m i l a r t o t h e p l a n of
P r o f . Jevons, P r o f . Marshall says:
On this plan if A lends B £1,000 at 4|per cent interest and after some years
the purchasing power of money had risen by an eighth, B would have to pay
as interest not £45, but a sum that had the same purchasing powTer as £45
had at the time of borrowing, that is, £40. And so on. The plan would have
to win its way into general use, but when once it had become familiar none
but gamblers would lend or borroiv upon any other terms, at all events for long
T h e s e quotations f r o m P r o f . Marshall will be found in the

r e p o r t of t h e R o y a l

Commission on the Depression


T r a d e , a t p a g e s 422 a n d 423.


m e n of

highest eminence

in this


Jevons and Prof. Marshall—strongly r e c o m m e n d i n g the aband o n m e n t of g o l d as a s t a n d a r d of d e f e r r e d p a y m e n t s — t h a t is t o
s a y , as a s t a n d a r d of v a l u e , b e c a u s e of i t s u n f i t n e s s f o r t h a t f u n c tion o w i n g to its variability.
Y e t we are told by the political economists w h o edit our g o l d s t a n d a r d n e w s p a p e r s t h a t g o l d is a n u n c h a n g i n g a n d u n c h a n g e able " s t a n d a r d ! "
A l l t h e s e discussions of plans f o r t h e e l i m i n a t i o n f r o m b o n d s ,
m o r t g a g e s , d e b t s , a n d c o n t r a c t s , of t h e i n j u s t i c e p e r p e t r a t e d b y
c h a n g e s i n t h e v a l u e of m o n e y , w e r e d o u b t l e s s i n s p i r e d b y t h e d i s 785


covery that among the laws of Elizabeth's time a statute was found
directing that certain colleges, as those of Oxford, Cambridge,
Eton, etc., should, in letting out their lands for long terms, provide that a certion portion of the re nt should be paid to the
college, not in money, but in " c o r n , " the English term for wheat
and other cereals.

The object of this statute, it appears, was to

protect the parties from the injustice effected by changes in the
value of money.

" Bread corn," that is to say, wheat, was con-

sidered by Mr. Francis Horner, chairman of the celebrated bullion committee of the House of Commons, as " the real and paramount standard of all values."

John Locke, in his work on the

value of money , preceded Horner in the expression of the same

He said:

Wheat, in this part of the world, and that grain which is the constant general food of any other country, is the Attest measure to judge of the altered
value of things in any long tract of time.

Our own distinguished economist, Prof. Francis A . Walker, recognizes, as Prof. Jevons recognized, the wrongful exactions imposed by changes in the value of money.

He refers to such

changes as unavoidable in connection with metallic money, but
nevertheless as something of the first importance to avoid, in
the interests of justice.

He ascribes the changes in part to the

very character of the work of mining as being full of accidents
arising from natural and insurmountable causes.

On this point

Prof. W a l k e r says:
The very nature of metal deposits, the work of agencies long extinct, and
the utterly unaccountable way in which such deposits occur, especially in
the case of gold and silver, render it inevitable that periods of highly stimulated production should be followed by periods of comparative inactivity
or complete lethargy, to the serious prejudice of money in its functions as
the standard of deferred payments.

A n d in discussing the suggestions of Locke and Horner to the effect that wheat is abetter standard than the metals for the adjustment of time contracts, Gen. W a l k e r continues:
There is no reason to believe that the metals furnish a better standard
for the adjustment of long-term contracts [than wheat]. Indeed, quite the
reverse is probably true. Through considerable periods breadstuffs maintain their cost of production much more steadily than do the metals.

In support of this contention he advances these points: " T h e
vast breadth of arable land of reasonably uniform quality; the
simpiiaitv of the processes of agriculture and the wide diffusion


of the art of tillage; the comparative immunity of the soil amid
ravages which greatly impair, perhaps permanently cripple,
manufacturing, and, in an even greater degree, mining industry;
the limited applicability of the principle of division of labor to
agriculture, and the relative inefficiency of machinery in its operations."
Gen. W a l k e r accounts for the failure of society to adopt some
plan for the preservation of the equities in deferred payments by
advancing the following reasons:
The manifest convenience of having that for the standard of deferred payments which is also the medium of current exchanges, the indolence and
want of initiative which lead to the acceptance of what is nearest at hand
and most familiar, a superstitious veneration for the precious metals—

I do not think that if Gen. Walker were writing to-day he would
assert that there was any ' 1 superstitious " veneration for silver,
though there can not be a doubt that his statement is strictly
true with reference to gold.

He continues:

a superstitious veneration for the precious metals, together with great
ignorance as to the conditions and history of their production, have combined to withstand the important reasons which favor the adoption of corn
rents, corn interest, and corn annuities, in the case of long leases, long loans,
and fixed charges upon land.

H e fails, however, to mention what is undoubtedly the lion in
the path, namely, the determination of the creditor classes and
money-lenders and their agents, the bankers of the great cities,
to secure advantages to themselves at the cost of no matter how
much injustice.

There was no exhibition of " indolence " when

those classes secured in 187 3 the demonetization of silver, and
abov9 all there was no " l a c k of initiative."

On the contrary,

there was such an exhibition of initiative in their own interest
as had never before been exhibited, except in the case of the
creditor classes of Great Britain.

These creditor classes and

their agents in every country are capable of all the initiative
necessary to secure themselves every advantage.

They have

not power of initiative enough to use their money themselves in
business, nor the energy, skill, or disposition to do so, but they
have sufficient power of initiative to see that all risks, even of
those changes in the value of money which have been brought
about by the machinations of the creditors themselves, shall be


run by those who borrow from them, or buy from them on credit,,
or undertake to lease property from them for a term of years.
I have dwelt a little at length upon this question of a "tabular
standard," or "multiple tender," not because I think it would
be necessary if there were an intelligent regulation of the quantity of money, but in order to draw attention to the fact that
notwithstanding the loud assertions of the gold-standard champions with reference to the invariability and unchanging value
of gold, it has for hundreds of years been recognized that gold
and silver were variable in value.

Indeed, I might extend the

time to thousands instead of hundreds of years, for an expression
made use of by Aristotle appears to imply that he was cognizant
of changes in the value of money.
W i t h the money institution—which is the most important institution for the knitting together of society—properly and intelligently guarded; with both gold and silver fully availed of,
and the deficiencies of the mines supplemented as, with the
growth of population, industry, and commerce they should be,
by duly limited quantities of legal tender paper money there
could be no difficulty in maintaining equal and exact justice in
all contracts, bonds, mortgages, and debts of every character.
Of the wisdom and necessity of such a course only interested
casuists can compl-ain.

It is asserted by the advocates of the gold standard that there
is no insufficiency of that metal for the purposes of money.


before the demonetization of silver there was only enough of
both metals combined, how can men justify the assertion that
there is now enough of one of them alone to answer all demands
without rendering necessary a fall of prices of commodities?


will be conceded that value depends on the relation of demand
to supply.

No reason has ever been or can be given

money is not subject to that law.


What, then, was the demand

for gold in 1871 at the time Germany resolved to g o to the gold

There were but three countries of Europe that were

then formally on the gold standard—Great Britain, Portugal,
and Turkey—and of those Turkey was making no demand f o r
coin, but conducting its business with irredeemable paper.


Six of the other countries of Europe had nominally the bimetallic standard, namely, Prance, Italy, Belgium, Switzerland,
Greece, and Spain; but of these only two, Belgium and Switzerland, were actually using coin, all the others, by reason of wars
then but recently concluded, using inconvertible paper, and making no demand for coin of either metal.

The countries then for-

mally on the silver standard were Germany, Austria, Russia,
Sweden and Norway, Denmark, and Holland.

Of those Austria

and Russia were without coin, and transacting their business on
inconvertible paper money.

The people of the United States,

as is well known, were also at the time transacting" their business with paper money.

Placing the several countries in sepa-

rate categories, according to their actual condition in 1871, we
have the following results:
Countries making demand for gold alone: Great Britain and Portugal.
Countries making demand for gold or silver, indifferently:


gium and Switzerland.
Countries making demand for silver alone: Germany, Sweden
and Norway, Denmark, and Holland.
Countries making no demand for coin of either metal, but using inconvertible paper money: Austria, Russia, Turkey, Prance, Italy,
Greece, Spain, and the United States.
In Belgium and Switzerland, both of which were on the bimetallic standard, silver money was as useful and as welcome as
gold, so that those countries made no demand that was imperative for either of the metals in preference to the other.

In Ger-

many, Holland, Sweden, and Norway there was no demand for
gold as money.

All the other countries named, with the excep-

tion of Great Britain and Portugal, were at that time, as matter
of fact, upon the paper standard and made no demand for gold.
The population of those two countries, therefore (being in 1870,
respectively, 31,600,000 and 4,000,000, or in all less than 36,000,000),
comprised the entire population of Europe and America that
made an imperative demand on gold for monetary purposes.
Let us compare that demand with the demand of to-day.
W h a t are the countries of Europe and America now demanding gold, struggling for it, and endeavoring to conduct their


business with it?

Those actually on the gold standard are the

Great Britain, with a population of 38,000,000; Germany, 50,000,000; Austria, 40,000,000; Turkey, 33,000,000; Scandinavian
union (Norway, Sweden, and Denmark), 9,000,000; Egypt, 7,000,000.
A s our bonds have always been paid in gold we must add to
this group our own country with its 67,000,000 population.


asmuch as Holland and the countries of the Latin Union have
closed their mints to the unrestricted coinage of silver, and al.
though not on the gold standard have enter ed upon the struggle
for gold in order to make international payments, we must also
add the 85,000,000 comprising the combined populations of Holland, France, Italy, Switzerland, Belgium, and Greece—resulting
in a colossal struggle for gold participated in by 330,000,000 people—and this notwithstanding the admission of Mr. Giflen that
substantially none of the gold yielded annually from

the mines be-

comes (or if minted, remains) money, but is absorbed by the arts and
This is a population nine times that which in 1871 made demand for gold, yet we are informed by the advocates of the gold
standard that there is an ample supply of gold for all purposes,
and that the fall of commercial prices has been brought about by
new inventions!


W e are, however, able to show that at various times during
the progress of the fall of prices, but prior to the looming up of
the silver question, the change that was taking place was attributed, even by champions of the gold standard, to the insufficiency of the monetary supply.

In fact, before the fall began

it was by some writers foreseen as a danger lurking in monometallism.
Before any nation of Europe thought of imitating the example
of Great Britain by going to the gold standard, Prof. Stanley
Jevons expressed his sense of the danger of a rise in the value
of money which would be incurred by such a movement.


man then living was better entitled to be heard on any subject
relating to money, his researches having placed him in the first

r a n k of i n v e s t i g a t o r s a n d e c o n o m i s t s .

W r i t i n g to M . W o l o w s k i ,

t h e e m i n e n t F r e n c h e c o n o m i s t , i n a c k n o w l e d g m e n t of a t r a c t o n
t h e s u b j e c t of m o n e y o n t h e 12th of J a n u a r y , 1868, P r o f . J e v o n s
As regards the theory, I feel strongly in what an admirable manner you
have set forth the principles of the so-called " d o u b l e standard," and the
danger ive might run of a rise in the value of gold were silver entirely demonetized.
K n o w i n g t h e h o p e l e s s n e s s of

any m o v e m e n t to



c r e d i t o r classes a m o n g his o w n c o u n t r y m e n to replace the g o l d
m o n e y of G r e a t B r i t a i n b y s i l v e r , y e t s e e i n g t h a t if o t h e r n a t i o n s
s h o u l d d e m o n e t i z e s i l v e r t h e v a l u e of g o l d w o u l d r i s e , P r o f . J e vons in his c o m m u n i c a t i o n to W o l o w s k i added:
Yet, it is only by a more or less replacement of this kind [a replacement
of silver for gold in Great Britain] that a rise in the value of gold would be
prevented.—Investigations into Currency and Finanace, page 320.
I n a n a r t i c l e i n t h e L o n d o n E c o n o m i s t of M a y 8, 1869, P r o f .
J e v o n s said:
I think that the growth of population and trade tends to lower prices by increasing the use of gold.
Of c o u r s e in t h e t e r m " use o f " M r . J e v o n s i n c l u d e d " d e m a n d
f o r , " as a n i n c r e a s e d u s e i n v o l v e s an i n c r e a s e d d e m a n d .
I n 1871, t w o y e a r s b e f o r e t h e d e m o n e t i z a t i o n of s i l v e r , E r n e s t
Seyd made a prediction regarding the effects that would follow
d e m o n e t i z a t i o n , w h i c h , i n t h e l i g h t of s u b s e q u e n t f a c t s , m u s t
b e d e e m e d n o t h i n g less t h a n r e m a r k a b l e .

H e said:

It is a great mistake to suppose that the adoption of the gold valuation by
other States besides England will be beneficial. It will only lead to the destruction of the monetary equilibrium hitherto existing, and cause a fall in
the value of silver, from which England's trade and the Indian silver valuation will suffer more than all other interests, grievous as the general decline of prosperity all over the world will be.
The strong doctrinism existing in England as regards the gold valuation
is so blind that, when the time of depression sets in, there will be this special feature: the economical authorities of the country will refuse to listen
to the cause here foreshadowed; every possible attempt will be made to
prove that the decline of commerce is due to all sorts of causes and irreconcilable matters. The workman and his strikes will be the first convenient
target; then speculation and over-trading will have their turn. Later on,
when foreign nations, unable to pay in silver, have recourse to protection;
when a number of other secondary causes develop themselves, then many
would-be wise men will have the opportunity of pointing to specific reasons
which in their eyes account for the falling off in every branch of trade.
Many other allegations will be made totally irrelevant to the real issue, but
satisfactory to the moralizing tendency of financial writers. The great dan785

ger of the time will then be that, among all his confusion and strife, England's supremacy in commerce and manufactures may go backwards to art
extent which can not be redressed, when the real cause becomes recognized
and the natural remedy is applied.


A m o n g the most doughty of the champions of the gold standard
and most determined opponentsof bimetallism stands Mr. R o b e r t
Giffen, statistician to the London Board of Trade.

His writings

constitute the very arsenal from which all the advocates of gold
monometallism draw their ammunition.
doned for quoting him freely.

Hence I shall be par-

Before the silver question be-

came the burning question that it now is, Mr. Giffen put himself
on record with reference to the cause of the baleful fall of prices.
H e declared that the cause was continuing and persistent, and
one from the uninterrupted action of which a continued and
progressive fall of prices was naturally to be expected.

He shows

that there was need for an increase, not a decrease of money, if
prices were to be maintained firm.
In a paper read before the Statistical Society of London, in
January, 1879, Mr. Giffen said:
There is a general agreement that during the last few years there has been
a heavy fall in prices. * * * It is usually a fall in price which cripples
the weaker borrowers and causes bad debts, and this is a beginning of losses
by which stronger borrowers are in turn crippled, further falls in prices ensue, and more bad debts and losses are produced. When we see so many
failures as are now declared, therefore, we may be sure that they are preceded and accompanied by a heavy fall in prices.

In discussing in the same article the question of the insufficiency of the annual current gold yield to meet the monetary
wants of the world, Mr. Giffen says:
It is a moderate calculation that if only the countries which used gold in
1848, including their colonies, were now using it, the requirements to correspond with the increased population and wealth would be at least three times
what they were, assuming prices to remain in equilibrium.

But, he adds:
While during the last thirty years the annual yield of gold has been falling
away f r o m its first superabundance the current demands for the metal have certainly been growing with marvelous rapidity.

Now, observe his next statement.

Speaking of the extraordi-

nary demands made by the addition of Germany and the United
States (upon resumption of specie payments) to the list of gold785

s t a n d a r d c o u n t r i e s , a n d t h e p r a c t i c a l i n c l u s i o n of F r a n c e i n t h e
s a m e l i s t , h e s a y s of t h e s e n e w d e m a n d s :
They have been supplied very largely by a continued pressure upon existing stocks till an adjustment has at length been made by a contraction of trade
and fall in values.
N o man w h o can read that statement can doubt that it is an
u n e q u i v o c a l a d m i s s i o n of t h e f a c t t h a t t h e c a u s e of t h e f a l l o f
p r i c e s i s t h e i n s u f f i c i e n c y of t h e g o l d s u p p l y t o m e e t t h e
u r a l w a n t s of t r a d e a n d i n d u s t r y .


But, according to M r . Giffen,

'ohe m e r e i n c r e a s e of p o p u l a t i o n is n o t t h e s o l e e l e m e n t i n d e t e r m i n i n g t h e f a c t of s u c h i n s u f f i c i e n c y .

H e g o e s on to say that

s i n c e 1848 t h e w e a l t h p e r h e a d h a s i n c r e a s e d e n o r m o u s l y .


a f t e r s h o w i n g t h a t t h e w e a l t h of G r e a t B r i t a i n f o r t h e p e r i o d of
t e n y e a r s , 1865-1875, h a d i n c r e a s e d b y 27 p e r c e n t , h e c o n t i n u e s :
Not only must the requirements of gold-using people be increased by 50
per cent to allow for the natural increment of population, but another 50 per
cent must be added for the greater ivealth per head.
R e f e r r i n g t o t h e g r e a t f a l l of p r i c e s s i n c e 1873 h e s a y s :
Two causes only have been suggested. One is a great multiplication of
commodities and diminution of the cost of production due to the progress
of invention, improved facilities of communication, lower freights, international telegraphy, and like circumstances. The other is, that the precious metal used for the standard money—viz, gold—has become relatively
scarcer than it was, its production being diminished on the one hand, and
the demands for it on the other hand increased. The former of these causes
[multiplication of commodities and diminution of cost of production] was
discussed quite lately by Mr. Fowler in the Contemporary Review, and a
greater weight assigned to it than to the latter cause. I am disposed to give
greater weight to the latter.
T h a t is t o s a y , h e i s d i s p o s e d t o a s c r i b e t h e f a l l of p r i c e s t o
t h e i n s u f f i c i e n c y of t h e q u a n t i t y of g o l d .
H e continues:
To a large extent, however, the two causes are not in conflict. The question is of money prices—the relation of money to commodities. Whether it
is commodities that multiply, or gold that diminishes or does not multiply in
proportion, the relation between gold and the mass of commodities is equally
changed. It is quite conceivable that if gold were to increase in quantity
and its cost of production to diminish, as other commodities increase in
quantity and have their cost of production diminished, there would be no
change of any kind in gold prices. Commodities would be more abundant,
but the abundance would make itself felt in a rise of money wages, salaries,
rents, and profits, and not in loiuer prices. That it is felt in lower prices now appears to be absolute proof that the relation betiveen gold and commodities has
changed, that they have not increased in quantity and had their cost of production
diminished pari passu. In addition, however, while not denying that there
has been a change on the commodities side of the balance, I would go further,
and maintain that what has happened to gold in the way of diminished produc785

tlon and increased demands upon it, arising from other causes than the multiplication of commodities, must have had great effect.—Essays in Finance, series II,
pages 22 and 23.
In s h o w i n g w h y it was that w h a t has h a p p e n e d to g o l d


h a d g r e a t effect," M r . Giffen g o e s on to say:
In ronnd figures, therefore, there have been new demands in the last thirteen years for about two hundred millions [pounds sterling, equal to $1,000,000,COO] in gold, an amount very nearly equal to the whole production of th.e
period, although a larger amount than the annual production of that period
had been necessary in previous years to maintain the state of prices which
then existed. As the maintenance of equilibrium in the matter of prices is
only possible, other things being equal, by means of a supply of gold to meet
the wear and tear of coin and the increase of the population using gold in numbers and wealth—and the ordinary demands of that kind before 1872 amounted
in fact to twelve millions sterling annually—it is difficult to imagine how all
these extraordinary demands could have existed without contributing to that
change in the course of prices which we should have expected beforehand as the
consequence, and which in fact occurred.—Essays in Finance, series II, page 25.
N o t o n l y is i t d i f f i c u l t , as M r . G i f f e n s a y s , t o i m a g i n e h o w t h o s e
greatly increased demands could have been made without prod u c i n g t h e e f f e c t of a f a l l of p r i c e s , b u t t o a m i n d n o t b l i n d e d b y
p r e j u d i c e i t is w h o l l y i m p o s s i b l e t o c o n c e i v e h o w p r i c e s


h a v e sustained t h e m s e l v e s under t h e circumstances.
R e f e r r i n g to the m o d e

i n w h i c h a n i n s u f f i c i e n c y of


w o u l d express itself, M r . Giffen p r o c e e d s :
The way scarcity or abundance of gold would tell upon the money market
would be by producing monetary stringencies and periods of temporary
difficulty and discredit, by which, perhaps, the tendency to inflation in
prices at one time would be checked, and the tendency to depression at another would be aggravated. The average rates over the whole period when
these stringencies were occurring might be lower than at times when they
were fewer, but the mere fact of successive stringencies would help to produce the effect described on prices. Now, the course of the money market
since 1871, when the German Government began to draw gold from London,
has been full of such stringencies. The crises of 1873 and 1875 were no doubt
precipitated by them; and since 1876, in almost every year except 1879 and
1880, there has been a stringency, of greater or less severity, directly traceable to, or aggravated by, the extraordinary demands for gold and the difficulty
of supjrfying them.
Looking at all the facts, therefore, it appears impossible to avoid the conclusion that the recent course of prices, so different from what it was just
after the Australian and Californian gold discoveries, is the result in part of
the diminished production and the increased extraordinary demands upon the
supply of gold.
I n a p a p e r of M r . G i f f e n ' s r e a d b e f o r e t h e S t a t i s t i c a l S o c i e t y
of L o n d o n , i n D e c e m b e r , 1888, p u b l i s h e d

i n t h e j o u r n a l of


society for that month, he said:
W e can say positively that the recent change f r o m a high to a low level of

prices is due to a change in money, of the nature or in the direction of absolute
A n d after showing the extremely slight additions that h a d
b e e n r e c e n t l y m a d e t o t h e s t o c k of g o l d h e s a i d :
The stock with additions has had to do more work, and it has only been
able to do so because prices have fallen.
I n t h e s a m e p a p e r , s p e a k i n g of t h e e f f e c t s of t h i s i n s u f f i c i e n c y
of g o l d h e s a i d :
It is obvious beyond all question that these effects may be important.
The debtors pay more than they would otherwise pay, and the creditors receive
more. The matter is thus not unimportant to the two large classes of people who make up the community. Appreciation is a most serious matter to
those who have debts to pay. It prevents them gaining by the development of industry as they otherwise ivould.


S o w e l l c o n v i n c e d w a s P r o f . J e v o n s of t h e i n j u s t i c e of g o l d as
a s t a n d a r d f o r d e f e r r e d p a y m e n t s t h a t i n 1875 h e w r o t e of i t :
It should cease to be the permanent standard of value because, as I have
explained in chapter 25 (of Money and the Mechanism of Exchange), longenduring debts and transactions will be regulated by the tabular standard
of value, the amounts of debts although expressed in gold, being varied inversely as gold varies in terms of other commodities.—Investigations in Currency and Finance, page 297.
D i s c u s s i n g t h e e f f e c t s o n p r i c e s of a n i n c r e a s e d d e m a n d f o r
g o l d the same w r i t e r in an article in the C o n t e m p o r a r y R e v i e w
f o r M a y , 1881, s a y s :
It stands to reason, of course, that if several great nations suddenly decide that they will at all costs have gold currencies to be coined, in the next
few years the annual production can not meet the demand, which must be
mainly supplied, if at all, out of stock. The result would doubtless be a tendency
to a fall of prices.
A n d after r e f e r r i n g to the g o l d stock in G r e a t Britain, and
t h e c o n s i d e r a b l e g o l d f i e l d s of t h e B r i t i s h c o l o n i e s , h e a d d e d :
If these foreign nations insist upon having gold currencies, they must pay
our price for gold, and they must, in raising the price, benefit us and our colonies.
I n 1883 M r . G o s c h e n , a f t e r w a r d c h a n c e l l o r of t h e


of G r e a t B r i t a i n , r e a d a p a p e r b e f o r e t h e B a n k e r s ' I n s t i t u t e of
London, on the " P r o b a b l e
c h a s i n g p o w e r of g o l d . "

r e s u l t s of a n i n c r e a s e i n t h e

A f t e r s h o w i n g that w i t h i n ten


an enormously increased d e m a n d had arisen for g o l d , and that

in that time G e r m a n y , t h e U n i t e d States, Italy, and


h a d a b s o r b e d $1,000,000,000 of i t , M r . G o s c h e n s a i d :
Economists will accordingly ask themselves what result, if any, is such a
phenomenon likely to have produced? I think there is scarcely an economist but would answer at once, " It is probable, it is almost necessary, it is
according to the laws and the principles of currency, that such a phenomenon must be followed by a fall in the prices of commodities generally. Just
as a large amount of gold poured into Europe in 1852 and subsequent years
created a rise in prices, so the counter phenomenon must produce a fall.
A n d a t t h e s a m e m e e t i n g of t h e B a n k e r s ' I n s t i t u t e a t w h i c h
M r . G o s c h e n ' s p a p e r w a s r e a d , M r . G i f f e n s t a t e d t h a t if t h e s u p p l y of n e w m o n e y w e r e n o t s u f f i c i e n t t o m a i n t a i n t h e e q u i l i b r i u m
b e t w e e n d e m a n d a n d s u p p l y — c o n s i d e r i n g t h e i n c r e a s e of p o p u l a t i o n a n d w e a l t h — " t h e n w e m a y h a v e a l o n g - c o n t i n u e d f a l l of
p r i c e s f r o m g e n e r a t i o n t o g e n e r a t i o n , and this will probably
a very great effect as time goes



P R O F . R O G E R S A N D GEN.


T h e t o t a l i n s u f f i c i e n c y of g o l d f o r t h e m o n e t a r y p u r p o s e s o f
t h e w o r l d , c o n s i d e r i n g t h e u n e q u a l l e d e x t e n s i o n of i n d u s t r y a n d
c o m m e r c e , is e m p h a s i z e d b y P r o f . T h o r o l d R o g e r s , i n a n a r t i c l e i n t h e P r i n c e t o n R e v i e w f o r J a n u a r y , 1879.
S p e a k i n g of t h e " r a p i d r i s e i n t h e e c o n o m i c v a l u e of


h e says:
The fact has been commented on with considerable but unequal force by
M. Laveleye, in a recent number of the Revue des Deux Mondes, where he alleges, and on good grounds, that the annual produce of this metal is not more
than sufficient to cover the annual wear and tear of the currencies.
A n d he adds:
Unless we are to assert that the values of gold and silver do not depend on
the demand which exists for them and the means for supplying that demand,
it must follow that a large demand brought to bear on a limited supply will a/fect the values of those precious metals, and through them loiver prices.
W r i t i n g i n 1879 of t h e e f f e c t s of d e m o n e t i z a t i o n of s i l v e r , o u r
leading American economist, Prof. Francis A . W a l k e r , now presi d e n t of t h e M a s s a c h u s e t t s I n s t i t u t e of T e c h n o l o g y , s a i d :
The second immediate consequence of the German demonetization has
been an enhancement of the purchasing power of gold, now left throughout
pretty much all Europe to perform the whole office of money which six years
ago was performed by a money mass composed both of gold and silver. The latter having been thrown out of its use as full-valued money, and remitted to
the purposes of small change or banished to the East, the value of the former has, by a necessary consequence, risen greatly, even in the few years that
have intervened since this disastrous act was accomplished.

The effects upon industry and trade of a diminishing money supply in enhancing the burden of debts and fixed charges and in disparaging the profits of business and hence reducing the motives of production, have been discussed so much at length that we need only inquire here as to the fact.
T w o notable pieces of testimony on this subject have been given to the
public within the past few weeks. In an article in the January number of
the Princeton Review Prof. Thorold Rogers, of Oxford, in discussing the
causes of the present general disturbance of commerce, writes as follows:
" The first cause in importance, the most general, and, in all probability the
most enduring, is the rapid rise in the economical value of gold.
" While the area of civilization is widening and, therefore, the demand for
an adequate currency is being extended, the most populous state of Europe
has abandoned a silver for a gold currency, and has had, as a fruit of a successful war with France, an exceptional power of attracting gold to itself,
with singular success indeed, to the incredible misfortune of its people.
Germany has effected a monetary revolution on the grandest scale, and has
beggared its own industries.
" Taking into account the growing intercourse of civilized nations, and
particularly the sensitiveness which they feel at any event which may
check the activity o r derange the machinery of trade and production, it appears that at no time has the drain on the existing stock of gold been so sharp
and rapid as at present. '
On the 28th of December the London Economist, in a remarkable article on
the causes of the present depression of prices which that journal finds to be
greater than after the panic of 1857 or that of 1866, gives as the principal
causes the following:
First. There has been a diminution in the supply of gold.
Second. There has been a marked increase in the demand for gold. The effect of the adoption of a gold standard in Germany, as well as in some other
European countries of minor importance, has been, as we have clearly seen,
to depreciate the value of silver, measured by a gold standard, in an extraordinary manner. Large masses of silver have been demonetized and
thrown upon the market. But, on the other hand, large masses of gold have
been required to take their place, while, as has been shown, the supply has been
actually diminishing.
The Economist concludes that there has been a real fall in prices to the
extent of 16 per cent since 1869. This is an undoubted appreciation of gold,
because it represents a real increase in the purchasing power of gold.
What does an increase of 16 per cent in the purchasing power of gold
It means an addition of one-sixth to the burden of every existing debt,
national, corporate, and private, payable, as are nearly all the public and by
far the greater part of the private debts of the world, in gold. It means
that on every day which the laboring man gives to work to pay his share of
the interest and principal of such public debts, or to meet the interest or
principal of the mortgage on his cottage or his farm, his hours of labor shall
be, not twelve, but fourteen. In those last two hours' drag, if brain and hand
g r o w weary with the strain and toil, he should know whom to thank, the
financiers and political economists who, at a time when the production of
the two historical money metals jointly was at a standstill, or even diminishing, accomplished the great monetary reform of throwing the stock of one
of them, accumulated through thousands of years, out of its uses as money
of full power in Europe, remitting it to the office of small change, and sending the remainder to swell the treasures of the Orient; all for the sake of a
mathematical and metrical unity of coinage and exchange.—Money Trade
and Industry, page 191 et seq.


W i t h i n the year a piece of testimony has been contributed to
the discussion as to the appreciation of gold, which one would
suppose, by reason of its source and timeliness, should serve to
awaken thought among even the most fanatical of the adherents
of the gold standard.

It will be remembered that in 1886 the

British Government appointed a royal commission to inquire
into the " r e c e n t changes in the relative values of the precious

This became known as the Gold and Silver Commis-

It was naturally composed of men of ability and distinc-

tion—twelve in number—among whom was Mr. Leonard Courtney.

R e g a r d i n g the genesis of the fall of prices the commission,

as is well known, divided—six of the members maintaining that
it was to be looked for mainly in causes affecting commodities;
the other six mainly in causes affecting gold.
A m o n g those who believed that the change was for the greater
part due to causes affecting commodities was Mr. Courtney.
Now, after six years of further investigation and reflection, Mr.
Courtney expresses a change of conviction, or, more correctly, a
progress of conviction toward the ground occupied by what may
be called his opponents on the commission.

In an article in the

Nineteenth Century for April, 1893, he says:
I was one of the six members of the Gold and Silver Commission who could
not see their way to recommend bimetallism, and repo rted, " When we look
at the character and times of the fall in the prices of commodities * * * we
think that the sounder view is that the greater part of the fall has resulted
from causes touching the commodities rather than f r o m an appreciation of
the standard." In the same paragraph we had said, " W e are far f r o m denying that there may have been, and probably has been, some appreciation
of gold," though we held it impossible to determine its extent.

Mr. Courtney then continues:
Let me make a confession. I hesitated a little about this paragraph. I
thought there was perhaps more in the suggestion of an appreciation of
gold than my colleagues believed, but whilst I thus doubted I did not dissent.

H e then goes on to say:
I am now satisfied that there has been an appreciation of gold greater than 1
suspected when I signed the report, and I should not be able to concur in the
same paragraph again. My conclusion is built upon many reasons, and it
seems to me to explain many phenomena otherwise inexplicable.

Mr. Courtney admits that the fall of prices is as much as 30 per
cent, which means an appreciation of 43 per cent in the purchasing power of gold; and referring to its effect, he says that even


if it were but 10 per cent it ' ; would just counteract all that we
[the English people] have done in the last fifteen years in the reduction of the national debt."
And he continues:
W e have reduced the nominal amount, but the real burden is unaltered.
The pressure of all debts, public and private, has increased. Nor is this all.
Although it is immaterial to commercial and industrial activity what may
be the scale of prices, high or low, when a scale is reached and maintained,
yet the transition from high prices to low is extremely restrictive of enterprise.
The person who enters on the use of things—that is, the man who creates
enterprise, whether in industry or commerce—has his wealth nibbled away
by those who have money claims upon him, and the man who trades on borrowed capital trades as little as possible if he finds his assets shrinking compared with his liabilities. Differences must also constantly arise between
masters and workmen, between the producers of a raw material and the
creators of the finished product, in a word—between all who cooperate to put
something on the market—if they find its selling price mysteriously diminishing, and their shares of it have to be perpetually adjusted.

A n d Mr. Courtney adds:
It is a dream to suppose that gold is stable in value. * * * It has undergone a considerable appreciation in recent years, and industry and commerce have been more hampered by its movement than they would have
been had silver been our standard. Whether the appreciation will be maintained undiminished is uncertain, but every step taken toward the further
demonetization of silver must tend to the enhancement of the value of gold.

But, Mr. President, it would be useless to multiply testimony.
No man who bears in mind the enormdus increase in the demand
for gold, and the fact that most, if not indeed all, of the current
annual yield is absorbed in the arts and manufactures, can for
a moment entertain a doubt that the metal has enormously



The advocates of the gold standard in this country assert that
the fall of prices, which they are compelled to admit began the
very year of the demonetization of silver, is not due to such demonetization, but is a mere coincidence; and that it is in fact
due to new inventions and consequent improvements in the various arts and industries.
But it is to be observed that such improvements have been
the characteristic of all periods of time since the application of
steam to the various processes of industry. W h i l e improvements of detail calculated to facilitate production have undoubt785.,


edly been a feature of the mechanic arts during the past twenty
years, yet for far-reaching invention, for radical improvement
in all the round of industries, that period is not to be compared
with the twenty years preceding, during which the prices of
commodities not only were not falling but were in fact rising,
and when the business of the world, instead of being in collapse
as a consequence, was more prosperous than at any former period
in history.
Economic writers have made all readers familiar with the redletter character of the period from 1850 to 1873, during which
the Californian and Australian discoveries were reinvigorating
the almost exhausted energies of the commercial and industrial
world, which for a period of thirty years prior had suffered from
the dry rot of a money volume not keeping pace with demand.
W i t h the new supplies of money came universal prosperity in
t h e form of rising prices—notwithstanding the extreme activity of invention and improvement in methods of manufacture.
In discussing this question the advocates of the gold standard
leave it to be inferred that no inventions or improvements in
methods of production were ever made prior to 1873, and are
driven by the logic of their contention to the absurd conclusion
that with that year was ushered in a new order of the ages.
There is no reason whatever for supposing anything of the kind.
Mr. Giffen, in a paper read by him before the


Society of London, in January, 1879, referring to the period from
1818 to 1877 (the period which, except the last four years, was
characterized by rising prices), said:
The peculiarity of the period has been the increase of mechanical invention
and the constant augmentation of goods.

A n d he went on to show that in the period named the annual
output of pig iron in England had increased 300 per cent, of cotton exports 400 per cent, of shipping clearances 400 per cent,
and in other departments of business in like proportion.
And writing in 1885, he said:
The same reply may also be made to the suggestion that the multiplication of commodities accounts for the entire change that has occurred.
There is no reason to suppose that the multiplication of commodities relatively to the previous production has proceeded at a greater rate since 1873
than in the twenty years before that. Yet before 1873 prices were rising notwithstanding the multiplication of commodities; and since that date the

tendency has been to decline. The one thing that has changed, therefore, appears to be the supply of gold and the demands upon it; and to that cause largely
we must accordingly ascribe the change in the course of prices which has occurred. * * * The very thing is happening which ive should have expected to
happen if there had been a pressure upon gold.—Essays in Finance, Series II,
page 28.

of t h e

g r e a t f a l l of p r i c e s

b e t w e e n 1809 a n d 1849,

w h i c h h e a s c r i b e d t o t h e f a l l i n g off i n t h e s u p p l y of t h e m o n e y
m e t a l s b y t h e c l o s i n g of t h e S o u t h A m e r i c a n m i n e s , a n d


m e n t i n g o n t h e a r r e s t of t h a t f a l l a n d t h e s e t t i n g o n f o o t of a
contrary movement by the California discoveries, Prof. Jevons
Thus while industry, trade, and property were rapidly advancing in Great
Britain and other parts of the world there was no corresponding advance in
the production of the precious metals. Prices both in gold and silver continually receded. Now, if while the introduction of railways, telegraphs, and innumerable other improvements accelerated the extension of trade and the
consequent demand for the precious metals no new discoveries of the precious
metals had been made, what must have ensued ? Prices must have continued
in the downward course they had pursued for thirty or forty years before.
But they did not con tinue in this course. On the contrary they turned upwards
in a sudden and decided manner as shown in the body of this tract. And this
change was simultaneous with the discovery of the new gold fields. Half the
prerogative instances of Bacon are exemplified in this question, and if the
philosophy of observation and common sense may be applied to statistical matters
we can draw but one conclusion—that prices have risen in consequence of the gold
B u t P r o f . J e v o n s continues his reflections b e y o n d this, and in
o r d e r t o a c c e n t u a t e t h e b l e s s i n g s w h i c h t h e y i e l d of t h e n e w g o l d
discoveries had been to the world, he siys:
The gold discoveries have had the double effect of arresting the fall of
prices and then raising them, The total effect is not merely the rise that
has occurred, but that rise plus the fall that would have occurred. This
goes a considerable way to explain why prices have not risen so high as the
vast supplies of gold might have led us to expect .—Investigations into Currency and Finance, page 110.
T h e r e is n o t a p e r i o d of h i s t o r y s i n c e t h e i n v e n t i o n of
W a t t that has not been characterized


by n e w inventions


M r . T o o k e , i n t h e f i r s t v o l u m e of h i s H i s t o r y of P r i c e s , p u b l i s h e d i n 1838, r e f e r r i n g t o t h e s e v e r a l c a u s e s of a r i s e of


o b s e r v e d t o o c c u r b e t w e e n 1792 ( o n e h u n d r e d y e a r s a g o )


1819, s a y s :
And as the improvements in agriculture and manufactures, all tending greatly
to reduce the cost of production, were in progress during the whole period, although not so rapidly in the earlier part of it, they must have operated as a

corrective against so great an advance in price of those articles to which
they applied as might f r o m the operation of other causes have been expected. This cause need, therefore, only be incidentally referred to.

The same author, in one of his later volumes, dealing- with the
period from 1848 to 1856, after the gold discoveries, says:
The rapid increase in every part of the world, the improvements in the
navigation and speed of ships, the rapid spread of population into new and
fertile regions, the quick succession of important discoveries in practical science
and the ceaseless activity with which they are applied to increase the efficiency of
all mechanical appliances * * * are all causes which singly and conjointly
have assisted to accelerate the rate of progress; [but with all this] the influence of the new supplies of gold year by ye ar has probably been that particular cause or train of causes which has modified in the most powerful degree the economical and commercial history of the last nine years.

From those statements it will be observed that so far as concerns new inventions and improved methods they have been a
constant feature of industry in periods both of high and of low
prices from the date of the invention of the steam engine to the
present time.

And while it is conceded that in one or two in-

dustries radical improvements

have within the past twenty

years been effected, yet in the vast mass of processes, no revolutionary change has occurred, or anything to justify the extraordinary fall of prices which has occurred—not in the products
of one or two classes of industries merely, but of all classes of industries—no less of those involving finished products than of
those involving raw materials, both of the factory and the farm.


If the gold standard contributes to the welfare of the peoples
adopting it, there must be some method of ascertaining that

There must be some external evidences of the prosperity

which it is said to impart.
W e are told that gold is especially the proper medium for the
money of rich nations, and that Great Britain, being a rich nation and having a gold standard, and gold alone for money of
full legal tender, we should follow the example of Great Britain,
and that if we did not do so we should be placed alongside India,
Mexico, South America, and so on.
W e do not dispute that there is great wealth in Great Britain,
but when it is said that Great Britain as a nation is rich, we are
placed upon inquiry as to what constitutes a rich nation.


O n t h i s p o i n t I q u o t e a p e r t i n e n t s u g g e s t i o n of J o h n R u s k i n ' s .
H e says:
Respecting riches, the economist has to inquire, first, into the advisable
modes of their collection; secondly, into the advisable modes of their administration.
Respecting the collection of national riches, he has to inquire, first, whether
he is justified in calling the nation rich if the quantity of wealth it possesses,
relatively to the wealth of other nations, be large, irrespectively of the manner of its distribution. Or does the mode of distribution in any wise affect
the nature of the riches? Thus, if the King alone be rich (suppose Croesus,
or Mausolus), are the Lydians or Carians therefore a rich nationf Or if a
few slave-masters are rich, and the nation is otherwise composed of slaves,
is it to be called a rich nationt For if not, and the ideas of a certain mode
of distribution or operation in the riches, and of a certain degree of freedom
in the people, enter into our idea of riches as attributed to a people, we
shall have to define the degree of fluency or circulative character which is
essential to the nature of common wealth; and the degree of independence
of action required in its possessors—questions which look as if they would
take time in answering.
And further. Since the inequality, which is the condition of riches, may
be established in two opposite modes—namely, by increase of possession on
the one side and by decrease of it on the other—we have to inquire with
respect to any given state of riches precisely in what manner the correlative poverty was produced; that is to say, whether by being surpassed only
or being depressed also; and if by being depressed, what are the advantages, or the contrary, conceivable in the depression. F o r instance, it being
one of the commonest advantages of being rich to entertain a number of
servants, we have to inquire, on the one side, what economical process produced the riches of the master; and on the other, what economical process
produced the poverty of the persons who serve him, and what advantages
each on his own side derives from the result?—Munera Pulveris, page 22.
Does it then, M r . President, m a k e any difference h o w
r i c h e s of a nation are d i s t r i b u t e d ?


L e t us t a k e a c a s e n e a r h o m e

i n o r d e r t o e n a b l e us t o s e e t h e s i t u a t i o n c l e a r l y .

T h e late M r .

Jay Gould lived in a village or small t o w n on the Hudson, adj a c e n t t o t h e c i t y of N e w Y o r k .
a t l e a s t $100,000,000.

H e was believed

to be w o r t h

E v e n if n o o t h e r m a n i n t h e v i l l a g e w a s

w o r t h a dollar, it c o u l d still b e said t h a t that v i l l a g e was a r i c h
v i l l a g e b e c a u s e M r . G o u l d l i v e d i n it.

In a certain limited sense,

as w o r d s a r e u s u a l l y u n d e r s t o o d , t h a t w o u l d d o u b t l e s s b e t r u e .
B u t , mi bono?

T h e fact that M r . Gould was rich did not m a k e

t h e o t h e r i n h a b i t a n t s of t h e v i l l a g e r i c h .

One swallow does not

make a summer.
I t i s s a i d t h a t t h e i n c o m e of o n e d u k e i n E n g l a n d a m o u n t s t o
h u n d r e d s of t h o u s a n d s of d o l l a r s a m o n t h , f r o m r e n t s a l o n e .


fact, in o n e sense, m a y b e said to m a k e E n g l a n d a r i c h c o u n t r y ;
b u t , i n t h e t r u e s e n s e of t h e t e r m , d o e s i t m e a n a n y t h i n g t o af785


firm that by reason of the riches of the Duke of Westminster
England is a rich nation?

A nation is not made up of dukes.

May it not be that the people at large, instead of being the richer,
are the poorer, for the riches of the Duke of Westminster? A n d
when the example of Great Britain, as a rich nation, is held up
to the admiring gaze of our people by the gentlemen who are so
devoted to the gold standard, do they intend us to understand
that a nation is rich because a few of its people are rich?


If the wealth of a nation be concentrated in the hands of a few
persons, while the masses of the people are steeped in poverty,
what a travesty it is upon words to say that the nation is rich.
W h a t is a nation?

Is it mere land without reference to the peo-

ple who dwell on it?

Manifestly not.

If, then, it means people,

does the word " n a t i o n " express only that limited number of
people who are rich?
This was the idea of polished and cultured Greece, in which
the artisans and all that portion of the population corresponding
with the working classes of our time, were slaves.

It accorded

sufficiently well also with the Roman idea—one-half the population of the Roman empire (according to Gibbon) consisting of
slaves—not black slaves, but white—being persons, of whatever
race or blood, conquered in war.

But the classes of white men

that were formerly slaves are now freemen and constitute the
great body of every community.
A n y description of a nation which should leave them out of
account would be a description which would omit the most indispensable part of society—the makers of things—the
cers of


wealth—as contradistinguished from the drones and

idlers, and that portion of the community which, instead of producing wealth, merely juggles with the counters by which wealth
is computed.

In this age, what significance can attach to the

expression " a rich nation," if it mean only that a few persons
residing in a country are the possessors of large wealth, or of all
the wealth of the country?

A n y correct definition of the term

could include only nations in which wealth is generally diffused
among the people.


In that sense Great Britain is not a rich, but a very poor, nation.

Like m ost European countries, it is a nation in which a

few are rich, while the great masses of the people are steeped
in poverty.

The persons who constitute the nation, in the sense

of those who speak of Great Britain as a rich nation, are the
creditor classes—and they are the most active, alert, and watchful in their own behalf of any " n a t i o n " in Christendom.


co untry is, by situation and circumstances, naturally a commercial country: and its creditor classes have, from the earliest times,
determined to dominate the commercial world, and especially
t h e world of which we, to-day, form part.

Before the application

of steam to the purposes of industry, many nations of the continent ex celled Great Britain in the arts and manufactures.


ing to find a market in Europe, the eyes of the commercial and
financial aristocracy turned at an early day to the American

Here they saw a market which they were determined

to enjoy without competition.

Not only without competition

from other European countries, but without competition even
from the colonists themselves.








In 1660 the first of the navigation acts was passed which compelled the colonists to use only English ships in the work of

In 1663 another law was enacted which required

that all the articles which the colonists might desire to buy in
Europe should be bought in the markets of England.


penalties were prescribed for the violation of such laws. In 1669
Parliament declared that no wool, yarn, or woolen manufactures
of the American plantations should be shipped, or even laden to
be transported from thence to any place whatever.
In 1719 it declared that the erecting of manufactories in the
Colonies tended to lessen their dependence upon Great Britain.
In 1732 a law was passed forbidding hats or felts to be exported
from the Colonies or even to be loaded on horse, cart, or other
carriage for transportation from one plantation to another.


determined were they to repress and put down, by the strong
hand, all attempts on the part of the Americans to produce the
articles required by their own situation and circumstances, that

i n 1750 P a r l i a m e n t w e n t t o t h e e x t r e m e l e n g t h of p r o h i b i t i n g b y
l a w " t h e e r e c t i o n , o r c o n t i n u a n c e , of a n y m i l l o r o t h e r


for slitting or rolling iron, or any plating f o r g e to work with a
tilt h a m m e r , or any furnace f o r m a k i n g steel, in the Colonies "
u n d e r t h e p e n a l t y of £ 2 0 0 .
E v e r y such mill, engine, forge, or furnace was declared a comm o n n u i s a n c e , w h i c h t h e g o v e r n o r s of t h e p r o v i n c e s w e r e b o u n d
t o a b a t e w i t h i n t h i r t y d a y s u n d e r a p e n a l t y of £ 5 0 0 .







In the same



g r e a t a u t h o r i t y i n its t i m e — a w o r k w r i t t e n b y a

person named Gee, exhibited the tone

a n d s p i r i t of


p u b l i c o p i n i o n r e g a r d i n g t h e i n d u s t r i a l d e v e l o p m e n t of t h e C o l onies.

T h a t w r i t e r said:

Manufactures in our American Colonies should be discouraged and prohibited. We ought always to keep a watchful eye over our colonies, to restrain them from setting up any of the manufactures which are carried on
in Great Britain, and any such attempts should be crushed in the beginning,
for if they are suffered to grow up to maturity it will be difficult to suppress
them. * * *
Our colonies are in much the same state as Ireland was in when they began the woolen manufactory, and as their numbers increase will fall upon
manufactures for clothing themselves, if due care be not taken to find employment for them in raising such productions as may enable them to furnish themselves with all the necessaries from us. As they will have the
providing rough materials for themselves, so shall we have the manufacturing of them. If encouragment be given for raising hemp, flax, etc., doubtless they will soon begin to manufacture if not prevented.
Therefore to stop the progress of such manufacture it is proposed that no
weaver have liberty to set up any loom without first registering at an office
to be kept for that purpose. That all slitting mills and engines for drawing
wire or weaving stockings be put down; * * * that they shall be prohibited from manufacturing hats, stockings, or leather of any kind. This limitation—
T h e a u t h o r is g o o d e n o u g h t o s a y —
will not abridge the planters of any liberty they now enjoy—on the contrary,
it will then turn their industry to promoting and raising those rough materials. * * * If we examine into the circumstances of the inhabitants
of our plantations and our own, it will appear that not one-fourth part of
their product redounds to their own profit, for out of all that comes here
they carry back clothing and other accommodations for their families, all
of which is of the merchandise and manufacture of this kingdom.
N o w , note h o w early the shrewd " foreign investor " began to
g e t i n h i s w o r k u p o n t h e p e o p l e of t h i s c o u n t r y .

M r . Gee says:

All these advantages we receive by the plantations, besides the mortgages on
the planters' estates, and the high interest they pay us, which is very considerable,
and therefore every care ought to be taken in regulating all the affairs of the
colonists that the planters are not put under too many difficulties, but encouraged

to go on cheerfully/ * * * New England and the northern colonies have
not products enough to send us in return for purchasing their necessaryclothing, hut are under very great difficulties, and therefore any ordinary
sort of clothing sell with them; and when they have grown out of fashion
with us they are new-fashioned enough for them.

I may add, as a pertinent suggestion at this point, that we still
find New England sending no wheat or cotton abroad, so that
the fall of prices of those leading articles of export is not a matter of so supreme importance to the people of that section as it
is for other parts of the country.
All this, Mr. President, shows that from the earliest time the
eyes of the alert money lenders of Great Britain have been
turned to these " plantations " as the fertile field for the cultivation and development of British prosperity.
That was written nearly one hundred and fifty years ago, and
to this day it can truthfully be written that the interest we pay
them is " very considerable."

If the silver-purchase law be re-

pealed, and the dollars of every man's debt be thus made more
valuable to the creditor, the interest will yearly grow more and
more " considerable," to the hearty satisfaction of our " f o r e i g n
investor," who accordingly is urging this repeal with unfeigned


One hundred years ago, at a time when France was the only
rival of England, Edmund Burke, speaking of the money power
of Great Britain, said:
Our capital gives us a superiority which enables us to set at defiance all
the efforts of France to rival our manufactures. The powers of c a p i t a l -

H e added—
are irresistible in trade. It dominates; it rules; it even tyrannizes in the
market; it entices the strong and controls the weak.

No better description of the effects of capital, as it is utilized by
the British capitalist, was ever given.

Fifty years later, Sir

Robert Peel, in debating the corn laws, still understood its influence when he said:
That we may retain our manufacturing preeminence we must neglect no
opportunity of securing to ourselves those advantages by which that preeminence can alone be secured. * * * The accumulation of wealth—that
is, the increase cf capital—Is one of the chief means by which we can retain
the eminence we have so long enjoyed.

A n d P r o f . Senior, in one of his Oxford lectures (1830), ingen785



uously admits the manner in which the prosperity of Great
Britain and its great creditor classes is maintained.
worked by Englandhe

" The mine

says,"£s the general market of the world!"

In a report made in 1854 by a commission appointed by Parliament to inquire into the operations of the mining laws of Great
Britain the following statement appears:
The large capitals of this country are the great instruments of warfare
against competing capitals of foreign countries, and are the most essential
instruments now remaining by which the supremacy of our manufactures
can he maintained—the other elements—cheap labor, abundanc^of raw material, means of communication, and skilled labor, being rapidly in process
of being equalized.

A l l these statements, as to the purpose of the legislative and
governmental policies of Great Britain, lead up directly to the
statement made by Mr. Gladstone in his speech in the House of
Commons on the 28th of February last, in opposition to the motion of Sir Henry Meysey Thompson with reference to the Brussels conference.
" E n g l a n d , " said Mr. Gladstone, " i s the great creditor of the countries of
the world; of that there can be no doubt whatever; and it is increasingly the
great creditor of the countries of the world. I suppose there is not a year
which passes over our heads which does not largely add to the mass of British investments abroad. I am almost afraid to estimate the total amount
of the property which the United Kingdom holds beyond the limits of the
United Kingdom; but of this I am well convinced, that it is not to be estimated by tens or hundreds of millions. One thousand millions probably
would be an extremely low and inadequate estimate. Two thousand millions,
or something even more than that, is very likely to be nearer the mark. I
think, under these circumstances, it is rather a serious matter to ask this
country whether we are going to perform this supreme act of self-sacrifice."

The act of self-sacrifice, to which Mr. Gladstone referred, was
whether Great Britain should even discuss the question of giving a larger use to silver as currency.

In giving utterance to

those views Mr. Gladstone simply repeated in another form
what had before been so often stated.

The gist of his statement

is contained in his opening remark, that " E n g l a n d is the great
creditor of the countries of the world."
Now, Mr. President, it is well known that the United States
is one of the great debtor countries of the world.

If it would be

an act of self-sacrifice for the creditor classes of Great Britain
to bring to a halt the unjust and constantly growing appreciation of gold, would it not be an act of wisdom on the part of the


American Senators to do what may he in their power, in the interest of their own people, to bring about that result without
reference to the self-sacrifice of the creditor classes of Great
Mr. Gladstone's highest estimate—namely, that the property
which the United Kingdom holds beyond its own limits, may be
£2,000,000,000, or $10,000,000,000, is sustained by the statements
of eminent writers.

Prof. Cairnes calculated that according

to the returns of imports and exports the creditor classes of Great
Britain receive every year, on their foreign investments, not
less than $500,000,000, which would be the interest on $10,000,000,000 at 5 per cent.

This computation was made in 1874; and

we may rest assured the amount has not been reduced since then.
And Prof. Thorold Rogers, in his work on the Economical Interpretation of History, says:
* * * An enormous and incredible mass of foreign and colonial securities is held by British investors. I am confidently assured by those w h o
know the facts well, that at least two thousand millions sterling of such securities are held in Great Britain, and ear-marked on the stock exchange.
W e in England hold all, or nearly all, the colonial securities, the Indian
debt, and so large a mass of foreign debt that no large purchase can be mad©
of such foreign debt on any but the London Stock Exchange. Now, interest
must be paid on such liabilities, and of course, in accordance with the rule
laid down before, the ordinary way in which such an amount of interest is
paid, as is implied in the above-stated indebtedness, is by goods, the amount
or value of which makes the aggregate of imports appear to be vastly in excess of the aggregate of exports. * * * In fact, the annual interest which
the borrowers contract to pay is expressed in the currency of the United
Kingdom, or in the currency of the borrowing state and community, and in
theory such debtors are bound to pay in money. In practice, however, they
pay in goods, generally in raw materials, or in articles which our climate will
not allow to be produced, or not to be produced in so useful a form. Hence
a country like our oivn, to ivhom other countries are largely indebted, always gets
its raw materials, ana some other articles, at the cheapest rates possible—The
Economic Interpretation of History, page 98.

W h y , Mr. President, the very object of Great Britain in maintaining the gold standard is that her creditor classes may get
the products of other people's labor at the " cheapest rates possible."

They want American wheat and American cotton at the

" c h e a p e s t rates possible," and they are getting them cheaper
and cheaper as time elapses.
It needs no prophet to safely predict that by the repeal of the
purchasing clause of the Sherman law they will get our products
very much cheaper than ever.


W h i l e Great Britain appears to be receiving gold as interest
on her foreign investments, yet what she really receives is not
gold itself—which she does not want—but commodities at the
range of prices consistent with the existing quantity of gold

If the $500,000,000 of interest, which Prof.


calculated was received each year by Great Britain, were received in money, it would be a sum greater than the entire
monetary supply of the kingdom, and, were it possible to be obtained, would produce such a rise of prices of all commodities as would create a revolution in the industries and trade of
the country.

But no country can retain more than its distribu-

tive share of the gold of the world.


T h e creditor classes are, and well may be, content to receive,
not the money, but the materials which the money will buy.
Producing nothing by their own labor, they can observe without
regret a constant fall in the prices of the products of other men's

They know that it would be impossible to obtain the gold,

and that, if obtained, it would be good only for its purchasing
power as money.

For hundreds of years, as I have shown, it

has been the determination of those classes to dominate the commercial and industrial world.

They are too intelligent to at-

tempt, in this age, a domination of force.
acquire domination by strategy.

They know how to

This was the basis of their de-

termination to limit the supply of money to gold alone.
W h e n they decided to adopt the gold standard they knew that
the quantity of money in circulation determined the value of the
monetary unit.

Before taking that step they were not unaware

of the difficulties that would be encountered, but not being t h e m selves producers of wealth they had nothing to fear.

T h e mis-

eries which their course might inflict upon others was not a
matter which concerned them.

In the investigation by the par-

liamentary committee, made prior to the adoption of the gold
standard, the manufacturing interests of Great Britain were represented by wise and thoughtful men, who foresaw and delineated the consequences that must ensue from the carrying out of
the gold policy, but the executive department of the Govern785


merit of Great Britain turned a deaf ear to the statements of the
manufacturing and agricultural classes, and listened only to those
of the bankers and money-lenders.

To their interest, then, as

at all times since, every other interest was subordinated.
In describing the consequences of the parliamentary enactment which placed Great Britain on the gold standard, Sir
Archibald Alison says:
The capital which had been realized during the war [with Napoleon] had
been so great, the influence of the moneyed interest so powerful, that the
legislature became affected by the desires of its possessors. The monetary
bill of 1819, before many .years had elapsed, added 50 per cent to the value of
money and weight of debt and taxes. * * * Small landed propriet ors were
generally ruined from the fall of prices; the magnates stood forth in increased lustre from the enhanced value of their revenues. Industry was
querulous from long-continued suffering; wealth ambitious from sudden
exaltation.—Continuation of History of Europe, volume 1, page 3.

And again he says:
The effects of this sudden and prodigious contraction of the currency were
soon apparent, and they rendered the next three years a period pf ceaseless
distress and suffering in the British Islands. The accommodation granted
by the bankers diminished so much, in consequence of the obligation laid
upon them of paying in specie, when specie was not to be got, that paper
under discount at the Bank of England, which in 1810 had been £23,000,000,
and in 1815 not less than £20,660,000. sank in 1820 to £4,672,000, and in 1821 to
£2,722,000. The effect upon prices was not less immediate or appalling.
They declined in general—

The historian says—
within six months to half their former amount, and remained at that low
level for the next three years. Distress was universal In the latter m o n t h s
of the year 1819; and that distrust and discouragement was felt in all
branches of industry, which is at once the forerunner and the cause of disaster.

The land-owners of Great Britain at the time of the passage of
the bill numbered 160,000 persons.

By reason of the ruinous

consequences of the fall in prices they became reduced in the
course of seven years to 30,000 in number, or less than one-fifth,
while 15 per cent of the population became the subject of support by organized charity.

The idleness and distress among the

people became so universal that mass meetings were held in all
towns and cities, some of which were attended by as many as
60,000 persons.

Collisions with the troops occurred, in which

many were killed and wounded.
Speaking of the effects of this same bill establishing the gold


standard, Sir James Graham, in his tract entitled " C o r n and
Currency," published in 1826, says:
Whether we regard private debts or public burdens, the effects of the
measure of 1819 have been to enact that for every less sum owing a greater shall
be paid; prices f ailing, but pecuniary engagement remaining undiminished,
the farmer has no profit, the landlord no rent, the manufacturer no customer, the laborer no employment; a revolution of property and a derangement of the whole frame of society must necessarily ensue.

But the writer significantly adds that—
Amidst the ruin of the farmer and of the manufacturer, the distress of
the landlords and the insurrections of a populace without bread and without
employment, one class flourished and was triumphant; the annuitant and
the tax-eater rejoiced in the increased value of money; in the sacrifice of productive industry to unproductive wealth, in the victory of the drones over
the bees.

But these sufferings had no effect then and similar sufferings
have none now on men determined to gain an advantage for
themselves at the expense of the masses of the people.
Ever since the establishment of the gold standard the business
of the English people, and that of all people having the gold
standard, has been subjected to frequent and violent panics, resulting from the incongruities and absurdities of a money system wholly insufficient, and growing yearly more insufficient,
for the performance of the task imposed upon it.

But, as was to

be expected, when anything occurs calculated to expose the
monstrosity of a system under which rich and powerful classes
are increasing their riches and perpetuating their power, the
professors of political economy and the writers for the daily press
attempt to account for its eccentricities by the most absurd and
contradictory hypotheses—even Prof. Jevons, a most distinguished economist, actually connecting the causation of the
numerous panics, periodically occurring in Great Britain, with
the recurrence of the spots on the sun!
Our statisticians, economists, and statesmen who laud the gold
standard and recommend its adoption by the United States, may
flatter themselves that their theories are supported by the supposed fact that England is a rich nation, but we know nothing
about the riches of a nation until we shall ascertain how those
riches are distributed.

The distribution of wealth in a country

is a subject upon which it is difficult to arrive at very exact information.

Those whose business it is to write upon public


questions, especially in m o n a r c h i c a l countries, d e e m it a patrio t i c d u t y t o g i v e r o s e - c o l o r e d v i e w s of t h e c o n d i t i o n s of s o c i e t y .

S u c h a p i c t u r e is o n e t h a t I a m a b o u t t o r e a d f r o m an a d d r e s s
r e c e n t l y d e l i v e r e d b y S i r E d w i n A r n o l d at B i r m i n g h a m , in E n g land.

W h e n p e o p l e r e a d s u c h d e s c r i p t i o n s of t h e c o n d i t i o n s of

l i f e , w h i c h t h e y s u p p o s e t o e x i s t a m o n g t h e m a s s e s of t h e p e o p l e
of G r e a t B r i t a i n , i t is n o w o n d e r t h e y c a l l i t a r i c h n a t i o n ; n o
wonder they call the g o l d standard a great standard; no w o n d e r
t h a t the c r e d i t o r classes should w e l c o m e such statements, and
h o l d t h e m u p t o t h e a d m i r i n g g a z e of a n a p p r e c i a t i n g w o r l d a s
e v i n c i n g t h e b e a u t i e s a n d e x c e l l e n c i e s of t h e g o l d s t a n d a r d .


E d w i n A r n o l d said:
Upon the face of facts, is life—even were it transient—so bad a thing as
some people make out? Look at common modern existence as we see it,
and note to what rich elaboration and large degrees of comfort it has come.
I leave aside for the moment uncivilized nations and the bygone struggles
of our race; its wars and woes; its tyrannies and superstitions; all of which
history has greatly exaggerated, not telling us of the contemporaneous contentments. I invite you briefly to contemplate an artisan's existence in your
own Birmingham. Let alone the greatness of being an Englishman, and
the supreme safety and liberty of his daily life, what king of old ever fared
so royally? W h a t magician of fairy tales ever owned so many slaves to
bring him treasures and pleasure at wish? Observe his dinner board! Without being luxurious, the whole globe has been his servingman to spread it.
The currants in this dumpling are a tribute from classic Greece, and
tinned salmon or kippered herring a token from the seas and rivers of Canada or Norway. He may partake, if he will, of rice that ripened under the
hot skies of Patna or Rangoon; of cocoa—that '-food of the gods "—plucked
under the burning blue of the equator. For his rasher of bacon the hog express runs daily with 10,000 grunting victims into Chicago. Dutch or Brittany hens have laid him his eggs, and Danish cows grazed the daisies of
Elsinore to produce his cheese and butter. If he drinks beer, it is odds that
Russia and Bavaria have contributed to it the barley and the hops; when he
has finished eating, it will be the Mississippi flats or the gardens of the Antilles that fill for him his pipe with the comforting tobacco. He has fared, I
say, at home as no Lucullus ever fared: and then, for a trifle, his daily newspaper puts at his command information from the whole globe, the freshness
and fullness of which make the news-bearers of Augustus Ceesar, thronging
hourly into Rome, ridiculous. At work, machinery of wonderful invention
redeems his toil from servitude and elevates it to an art.
Is he fond of reading? There are free libraries open to him, full of intellectual and imaginative wealth. Is he artistic? Galleries rich with beautiful paintings and statues are prepared for him. Has he children^ They can
be excellently educated for next to nothing. Would he communicate with
absent friends? His messengers pass in the Queen's livery bearing his letters everywhere by sea and land, or in the hour of urgency the ariel of electricity will flash for him a message to the ends of the kingdom at the price
of a quart of small beer. Steam shall carry him wherever he wants to go
for a penny a mile; and when he is sick, the charitable institutions he has

too often forgotten in health render him such succor as sick goddesses never
got from ^Esculapius, nor Ulysses at the white hand of Queen Helen.
Does he encounter accident? For him as for all others the benignant
science of our time, with the hypodermic syringe or a waft of chloroform
has abolished agony; while for dignity of citizenship he may help when
election time comes by his vote to sustain or to shake down the noblest empire ever built by genius and valor. "Let the fancy fill up the imperfect picture with these thousand helps and adornments that civilization has brought
even to lowly lives; and does it not seem stupid and ungrateful xo say, as
some go about saying, that such an existence, even if it were transitory, is
not for itself distinctly worth possessing?

N o man can doubt that in presenting' this picture the distinguished poet and writer is perfectly sincere.

So long as the

rich and cultured classes in those countries are enjoying life, it
is a great comfort to them to suppose that all others enjoy it.
T h e y concern themselves very little with the sufferings or burdens of the workers, and especially of those who are relegated
to idleness.

They have no personal knowledge of those condi-

It is gratifying to their sense of humanity to suppose

that enforced idleness is unavoidable.

They would never think

of holding the gold standard responsible for it.
are supposed to be inevitable.

Those things

They find so many good things

in their own path that they assume something of a like good fortune for everybody else.
For idleness the only suggestion they have to make is that
charity shall be brought to bear.

So conditions are investi-

gated only with reference to the effects which philanthropy
may have on them.

Even the philanthropists, the persons who

have some heart, and those who see the miseries of the masses
as matters of daily observation, are disposed to regard them as
the results of natural causes, or of the inscrutable decrees of

The literature, therefore, which deals with the

real condition of the masses of the people is very limited.


few examine those conditions at their sources.
W e can, however ascertain some general facts which may aid
us in arriving at a judgment as to the wisdom of the national
policies that dominate the Government of Great Britain, of
which none can be more important than its monetary policy.

T h e concentration of wealth in that country is illustrated by
the distribution of the national debt, amounting to over $3,500,000,0003 which, a short time ago, the official returns showed to


be held in the hands of only 126,331 persons, thus averaging 1
$30,000 to each person owning the debt.

The greater prosperity

of the French people is illustrated by the wider and more general distribution of the public debt of that country.

Even so

long ago as 1867 that debt was held in the ownership of 1,095,683
persons, averaging but $2,000 each, and since that time it has
obtained even a wider distribution.
The following statement of the distribution of land ownership in Great Britain and Ireland is a summary from the recent work on political economy by Prof. J. S. Nicholson, of Edinburgh:
England and Wales, total area, 37,000,000 of acres.
of men not exceeding 4,500 own more than half.
people own one-sixth of the inclosed land.
one-eighteenth part, or 2,000,000 acres.

A body

Less than 280

Sixty-six people own
One man owns 186,397

Ireland, total area, 20,000,000 acres.
two people own one-third
own one-half.

Two hundred and ninety-

Seven hundred and forty-four people

There are three persons owning more than 100,-

000 acres each.
In Scotland the figures are still more striking.
age about 19,000,000.
in England as well.
000 acres each.

Total acre-

One owner has 1,326,000 acres and 32,000
There are five owners with more than 300,-

Twelve men own one-quarter of all Scotland.

Nine-tenths of the whole of that country belongs to fewer than
1,700 people.
T h e following summary is still more startling:
Two-thirds of the whole of England and Wales owned by
10,207 persons.
Two-thirds of the whole of Ireland owned by 1,942 persons.
Two-thirds of the whole of Scotland owned by 330 persons.
One man owns an entire county extending across Scotland.
One land owner in Scotland a few years ago appropriated 300
square miles of land to a deer forest, evicting many families to
make room for the deer.
SOME P R O S E - W R I T E R S '



In a book entitled Breadwinners Abroad, Mr. R o b e r t P .
Porter, late Superintendent of the United States Census, speaks


of a district he visited—the nail-making district near Birmingham, England, within a few miles of the spot at which was delivered the glowing description I have read from the remarks
of Sir Edwin Arnold.

Mr. Por.ter says:

It is said that 24,000 persons are engaged in this dismal district making
nails and rivets. Though within 7 miles of the great and prosperous city of
Birmingham no one seems to know or care about this army of men, women,
young girls, and children condemned to a life of wretched slavery. * * *
The inhabitants of this desolate district are among the most industrious
and yet the most wretched in England. They are engaged in making all
kinds of nails, rivets, and chains. The work is done in little smithies attached to the hovels in which the workers reside. * * * These houses, as
a rule, contain little or no furniture. They are filthy and wretched beyond
description. What spare time the unhappy nailer's wife gets from nursing the baby and preparing the meager meals is spent at the smithy fire
pounding away at the anvil until late at night. But the extra work that the
woman does, combined with that of one child—say a girl of 14—will barely
keep the family from starvation. * * * The most cruel part of this
business is that young women should be allowed to work at what is called
the "Olivers," a heavy iron machine worked by means of two wooden
treadles. I found numbers of girls making large 8-inch bolts on these
machines, and indeed they seemed to work with masculine firmness and
with far more vigor than the men. * * * Their earnings do not exceed
gl.25 per week.
In this way mothers, daughters, and mere children toil and slave on from
year to year—indeed one man told me that nails had been made here for
over a century in this way. How they exist is a mystery to me. They live
in hovels, they are poorly fed, and poorly clad. They marry early, and several girls not over 17 were pointed out to me as mothers of children 2 and 3
years of age. The men have an unmuscular look; most of them are very pale
and lean and leaden-eyed. The small nailers are not protected by the English factory act and they work in their father's shops sometimes until late
at night. The time to see the nailers at work is at night. The sharp din of
the hammer on the anvil, and the dull rapid thud of the Oliver as it flattens
the heads of the nails and spikes still rings in my ear from last night. I can
see the bright sparks from the forge, the red-hot nails clattering down to
join their cooler brethren, the bending forms of the men, the women and
the girls, little children creeping into the clattering, scintillating nail shop
for the sake of warmth, and every now and then the red flames from the
forges illuminating the scene and making more distinct the wierd form of
these shadowy creatures doomed to a never-ending industrial treadmill.
In some cases I found mothers and three, and even four, daughters at the
forge. In most of such instances, the father, 1 was told, spent his time in
the public house, and the united earnings of the entire family would be less
than $5. Many of the nailers actually starve, and cases of the deepest sorrow are not uncommon. " Misery," as the London Standard correspondent
wrote, " s o deep and dreadful that the most graphic pen can but faintly convey its depth of sorrow is witnessed," * * * Not long ago a journalist
of ability undertook to show7 the desperate condition of the working classes
here. I do not mean the idle, worthless, good-for-nothing people, but just
such industrious people as those described in this letter. He sent the result of his inquiries to a Liberal journal and the manager refused to publish the facts. He wrote: " I t is better not to call attention to such matters.
It could do no good." * * * It is time the truth about industrial Eng785

land is told. The London Standard has dared to speak out on the condition
of labor in the Black Country, and when that paper makes the following
statement I can say that actually accords with some of the horrible facts
which have come within my observation during my stay in this dismal region :
" W o m e n within a few days of their confinement have been known to work
in the agony of exhaustion in order to earn a few pence at the hearth—not
the hearth of home, but the hearth of the forge; they have been known to
return to work in a day or two after childbirth, emaciated in constitution,
weak and weary for the want of simple nourishment. Their children, ragged and ill-fed, have to lead miserable and wretched lives, with no hope before them but a life of wickedness and vice."—The Breadwinners Abroad, chapter 48.

Should it be said that these statements are from the pen of an
American writer, we need not trust altogether to Americans.

In a letter of Mr. Arnold W h i t e , a prominent citizen of London,
England, in the daily Times of that city, dated January 11,1893,
we find a statement of a few significant facts which give us a
striking view of the condition of that class of people in England
which the well-to-do call the lower orders.

Mr. W h i t e states

that according to an official publication—the Directory of the
charitable associations of London—a great body of associations
which number nine hundred and eighty-six, there were received
by those organizations in cash during the year 1892 the sum of
£6,246,136 (over $31,000,000), to be distributed among the poor.
He adds that from his long and intimate acquaintance with the
city he is certain that at least twice that sum is given each year
as private charity.
Even if we assume an equal sum only to be given, there are
$60,000,000 a year expended in organized and unorganized charities in the city of London.

A t the rate of $2 a week (and peo-

ple would hardly give more, as a regular weekly gratuity, to
paupers) this sum would support 600,000 persons all the year

This is 12 per cent of the entire population of London.

Inasmuch as the people of European cities aie not given to indiscriminate charities, it must be assumed that of this large
number of persons a considerable proportion are cases of chronic
In accordance with the laissez-faire maxims of the period, the
enforced idleness that comes of a volume of money shrinking in


comparison with the demand for it is charged to the dullness of
trade—never to the policies of the Government—which are supposed to have no responsibility for dullness of that character.
In ninty-nine cases, however, out of one hundred this dullness
is caused by a shrinking money volume—a matter wholly within
the correcting power of the Government.
T h e estimate of Mr. Arnold W h i t e is sustained by estimates
based upon actual investigations.

But who would care to make

those investigations?
None but those who have to do with the classes immediately

Not the prosperous; not the creditor classes; not

the bankers; not the cultured and the literary classes.


would undertake a work which may well make the stout heart

That which wealth, culture, and refinement disdained

or neglected to do, religious enthusiasm, not for the first time,

And I will say here in behalf of the writer I am

about to quote, that as his book created a sensation in England, there was appointed a committee of most distinguished
persons to investigate his career and his work, and after investigation that committee made a unanimous report commending
him and his work in the most hearty manner and approving
his efforts for the improvement of the condition of the unfortunates of whom he writes.


Gen. W i l l i a m Booth, in his book entitled In Darkest England,
gives some idea of the condition of a large class of his countrymen.

In the introduction of his subject he says:

In setting forth the difficulties which have to be grappled with, I shall
endeavor in all things to understate rather than overstate my case. I do
this for two reasons: First, any exaggeration would create a reaction; and,
secondly, as my objcct is to demonstrate the practicability of solving the
problem, I do not wish to magnify its dimensions.

He then proceeds:
The denizens in darkest England for whom I appeal are, first, those who,
having no capital or income of their own, would in a month be dead f r o m
sheer starvation were they exclusively dependent upon the money earned
by their own work; and second, those who, by their utmost exertion, are
unable to attain the regulation allowance of food which the law prescribes,
as indispensable even for the worst criminals in our jails. I sorrowfully admit tha*< it would be Utopian in our present social arrangement to dream of
attaining for every honest Englishman a jail standard of all the necessaries

of life. Sometime, perhaps, we may venture to hope that every honest
worker on English soil will always he as warmly clad, as healthily housed,
and as regularly fed as our criminal convicts—hut that is not yet. Neither
is it possible to hope for many years to come that human beings generally
will be as well cared for as horses.
Mr. Carlyle long ago remarked that the four-footed worker has already
got all that this two-handed one is clamoring for: "There are not many
horses in England which are able and willing to work which have not due
food and lodging and go about sleek-coated and satisfied in heart." You say
it is impossible. "But," said Carlyle, " t h e human brain, looking at these
sleek English horses, refuses to believe in such impossibility for English
men." Nevertheless forty years have passed since Carlyle said that, and
we seem to be no nearer the attainment of the four-footed standard for the
two-handed worker. "Perhaps it might be nearer realization," growls the
cynic, " i f we could only produce men according to the demand, as we do
horses and promptly send them to the slaughterhouse when past their
prime," which of course is not to be thought of. What then—

Asks Gen. Booth—
is the standard toward which we may venture to aim with some prospect
of realization in our time? It is a very humble one, but if realized it would
solve the worst problems of modern society. It is the standard of the London cab horse.
When in the streets of London a cab horse, weary, or careless, or stupid,
trips or falls and lies stretched out in the midst of the traffic, there is no
question of debating how he came to stumble before they try to get him on
his legs again. The cab horse is a very real illustration of poor, brokendown humanity; he usually falls down because of overwork and underfeeding. * * * If not for his own sake, then merely in order to prevent an
obstruction of the traffic, all attention is concentrated upon the question of
h o w we are to get him on his legs again. The load is taken off, the harness
is unbuckled, or, if need be, cut, and everything is done to help him up.
Then he is put in the shafts again and once more restored to his regular
round of work. That is the first point.
The second is that every cab horse in London has three things; a shelter
for the night, food for his stomach, and work allotted to it by which it can
earn its corn. These are the two points of the cab horse's charter.
he is down he is helped up, and while he lives he has food, shelter, and work.
That, although a humble standard, is at present absolutely unattainable
by millions—literally by millions—for our fellow men and women in this
country. Can the cab horse charter be gained for human beings? I answer
yes. * * *
The first question, then, which confronts us is, what are the dimensions
of the evil? How many of our fellow-men dwell in this darkest England?
How can we take the census of those who are fallen below the cab-horse
standard to which it is our aim to elevate the most wretched of our countrymen?
The moment you attempt to answer this question you are confronted by
the fact that the social problem has scarcely been studied at all scientifically. Go to M u l e ' s and ask for all the books that have been written on
the subject, and you will be surprised to find how few there are. There are
probably more scientific books treating of diabetes or of gout than there are
dealing with the great social malady which eats out the vitals of such numbers of our people.
Of late there has been a ch ange for the better. The report of the Royal Commission on the housing of the poor and the report of the committee of the

House of Lords on sweat ing, represent an attempt at least to ascertain the
facts which hear upon the condition of the people. But, after all, more
minute, patient, intelligent observation has been devoted to the study of
earthworms than to the evolution, or rather the degradation of the sunken
section of our people. Here and there in the immense field, individual
workers make notes, and occasionally emit a wail of despair, but where is
there any attempt, even so much as to take the first preliminary step of
counting those who have gone under.
G e n . B o o t h t h e n e n t e r s u p o n an e s t i m a t e , b a s e d u p o n a n a c t u a l
i n d u s t r i a l c e n s u s of E a s t L o n d o n , of t h e c o n d i t i o n s of t h e
p l e t h r o u g h o u t t h e c o u n t r y as a w h o l e .


Counting the houseless

a n d t h e s t a r v i n g , as w e l l as t h e c r i m i n a l s a n d t h e m e m b e r s of
the pauper workhouses—all who g e t relief, whether indoors


o u t d o o r s , as w e l l as t h o s e w h o g e t n e i t h e r — a n d i n c l u d i n g E n g land only, without reference to Scotland or Ireland, after enumerating the actual


upon w h i c h his estimates are based,

h e s u m s u p t h e c a s e as f o l l o w s :
This brings my total to 3,000,000, or, to put it roughly, to one-tenth of the
According to Lord Brabazon and Mr. Samuel Smith, betwreen two and
three millions of our population are always pauperized and degraded.
Mr. Chamberlain says—
I a m still q u o t i n g f r o m M r . B o o t h ' s b o o k —
there is " a population equal to that of the metropolis' '—that is, between four
and five million—"whichhas remained constantly in a state of abject destitution and misery." Mr. Giffin is more moderate. The submerged class,
according to him, comprises 1 in 5 of manual laborers, or 6 in 100 of the population. Mr. Giffln does not add the third million which is living on the
border line.
B e t w e e n M r . Chamberlain's f o u r millions and a half and


Gilfin's one m i l l i o n e i g h t h u n d r e d thousand, G e n . B o o t h says h e
i s c o n t e n t t o t a k e t h r e e m i l l i o n s as r e p r e s e n t i n g t h e t o t a l n u m b e r s of t h e d e s t i t u t e .

H e continues:

Darkest England may be said, then, to have a population about equal to
that of Scotland. Three million men, women, and children—a vast despairing multitude, in a cond ition nominally free but really enslaved—these it is
whom we have to save.
It is a large order. England emancipated her negroes sixty years ago at
a cost of £40,000,000 sterling, and has never ceased boasting about it since.
But at our own doors, from Plymouth to Peterhead, stretches this wraste
continent of humanity—three million human beings who are enslaveft 1 some of them to taskmasters as merciless as any West Indian overseer, all
of them in destitution and despair.
Is anything to be done with them? Can anything be done for them? Or
is this million-headed mass to be regarded as offering a problem as insoluble as that of the London sewage, which, feculent and festering, swings
heavily up and down the basin of the Thames with the ebb and flow of the


In a recent publication entitled Masses and Classes, a review
of social and industrial life in England, the author, Henry Tuckley, quotes Canon Blackley, of the Church of England, as saying
The proportions which pauperism attained among the old were not easily
ascertained, but as the clergyman of a large parish he had examined the registers of death in his charge, and had found that of those parishioners who
in eleven years had died over 60 years of age, 37 per cent had died in the
receipt of pauper relief. Moreover, at his request, seventy or eighty other
clergymen had made similar inquiries, and their returns placed the proportion at 45 per cent. These returns related to all classes all over England,
and if the number of those who provided for themselves were deducted, what
lesson did we learn but the horrible lesson that, roughly speaking, half our
working people, if they reached 60 years of age, were doomed to die as paupers.

The same author quotes Mr. Joseph Chamberlain as stating at
a public meeting in England that—
at the present time, of the working classes, one in two, if he reaches the age
of 60, is almost certain to come upon the poor law for his subsistence.

Mr. Chamberlain continues:
It may well be that some of these deserve their fate; they may have been
brought to it by intemperance or misconduct of some kind or another. But
nobody will persuade me that that is true of all of them [cheers], or even of
the larger portion of them. It is impossible that one out of two of the industrial population of this Kingdom have done anything to deserve the fate
which under existing circumstances is inevitably in store for them. [Cheers. ]

Now, Mr. President, what American heart can fail to be moved
by such descriptions of the conditions under which an enormous
number of the people of England live?

W e look in vain for the

sturdy yeomanry with whom song and story have made us familiar.

Instead, we find great estates reserved for game, or placed

under pasture, while the millions who might make a living on
the land are starving.


W h a t American can have patience with the laudations he hears
of the riches of Great Britain, when he knows that parents are
compelled to force their children of tender years to hard and
dreary labor in order that the family taken altogether may eke
out a bare existence.

Great numbers of little boys and girls, the

future men and women of Great Britain, are wearing out their
young lives in order that the nation maybe called rich, and may
be held up to the admiring gaze of the people of the United States,

In an able w o r k

upon T h e W a g e s Question, referring to the

c o n d i t i o n s of c h i l d - l a b o r i n E n g l a n d , G e n . F r a n c i s A . W a l k e r
We know that mill owners are harassed with applications from their
hands to take children into employment on almost any terms, and that the
consciences of employers have required to he reenforcedby the sternest prohibitions and penalties of the law to save children 10, 7, or 4 years old f r o m
the horrors of " sweating dens " and crowded factories, since the more miserable the parents' condition, the greater becomes the pressure on them to
crowd their children somehow, somewhere, into service; the scantier the remuneration of their present employment, the less becomes their ability to
secure promising openings or to obtain favor from outside for the better
disposition of their offspring. Once in the mill, we know how little chance
there is of the children afterwards taking up for themselves another way of
W e know, too, that in the agricultural districts of England gangs of children of all ages, from 16 down to 10, or even 5 years, have been formed
and driven from farm to farm, and from parish to parish, to work all day
under strange overseers and to sleep at night in barns huddled all together,
without distinction of sex. (Page 201.)
A n d he adds:
So late as 1870, children were employed in the brickyards of England,
under strange task masters, at 3^ years of age. Account is given us, sickening in its details, of a boy weighing 52 pounds carrying on his head a load of
clay weighing 43 pounds 7 miles a day, and walking another 7 to the place
where his burden was to be assumed.—The Wages Question, page 202.

f r o m t h e r e p o r t s of s o m e E n g l i s h



spectors, t h e same a u t h o r says:
Speaking alike of the weaving sheds of the cotton districts and of the
woolen districts, Dr. Bridges and Mr. Holmes, in their report to the local
government board, in 1873, say : " The work is done in the great majority of
cases by women; a considerable portion of these are married, and the practice of working until the last stage of pregnancy and of returning to work
within a month, sometimes within a fortnight, or even a week, of childbirth, is
as common in the West Riding (of York) as in Lancashire." An old factory
surgeon says: " I regard the mother's return to the mill as almost a sentence of death to the child." It is also a fruitful source of permanent injury
to the mother herself.—The Wages Question, page 52.
W h a t a p i c t u r e f o r t h e i n s t r u c t i o n of t h e A m e r i c a n w o r k i n g
classes, w h o s e d u t y it b e c o m e s to see t h a t t h e c r e d i t o r classes
of t h e i r o w n c o u n t r y d o n o t e x p l o i t t h e m w i t h a g o l d s t a n d a r d
a s t h e w o r k i n g c l a s s e s of G r e a t B r i t a i n a r e e x p l o i t e d b y


c r e d i t o r c l a s s e s of t h a t c o u n t r y .
J o h n R u s k i n w e l l u n d e r s t o o d t h e c o n d i t i o n s of h i s c o u n t r y m e n , w i t h r e g a r d t o t h e d i s t r i b u t i o n of w e a l t h , w h e n h e s a i d :
Though England is deafened with spinning-wheels, her people have not
clothes; though she is black with the digging of fuel, they die of cold; and
though she has sold her soul for grain, they die of hunger.


A n d the great heart of Mrs. Browning—moved by the s i g h t
of hundreds of thousands of little hands prematurely set to labor
to aid in piling up the riches which enable the American ad
mirers of the gold standard to state that Great Britain is a rich
nation—what does it say?

Hear the pathetic appeal of a woman

to the stony hearts of the classes for whose benefit those riches
are accumulated:
Do ye hear the children weeping, O, my brothers,
Ere the sorrow comes with years?
They are leaning their young heads against their mothers,
And that can not stop their tears.
The young lambs are bleating in the meadows;
The young birds are chirping in the nest,
The young fawns are playing with the shadows;
The young flowers are blowing towards the West—
But the young, young children, O, my brothers,
They are weeping bitterly;
They are weeping in the playtime of the others,
In the country of the free.

T h e riches, Mr. President, that are built up on the foundation
of children^ tears may excite the admiration of those who are
thoughtless enough to look at ends without regarding means;
but the policies that permit it, or that render it necessary, are
not policies to be held up to the emulation of a free and independent people who do not propose to be enslaved, whether by
law or by conditions having equal force with law.

The people

of this Republic will be on their guard against a system which
renders necessary a sacrifice of the great body of the people, not
merely men and women, but little, helpless children—the men
and women of the future—in order that the nation which tolerates it may pass for a rich nation, and be held up to the world
as the exemplar of a perfect civilization.


A t the demand of the creditor classes the gold standard was
adopted in England after the Napoleonic wars, in order that the
war debt, a large portion of which was incurred in paper, might
be paid in gold.

In his Financial History of England, Mr.

Doubleday states his belief that for a portion of the war period
the pound note with which the public securities of Great Britain
were bought was not worth in specie over 7 or 8 shillings in the
pound—about 33 to 38 per cent.

T h e debt being afterward by law made payable, pound f o r
pound, in gold, it is obvious that the bondholders of Great
Britain then mulcted the people of that country, as, at a later
period, the public creditors of the United States mulcted the
people of this country.

T h e English people supposed that they

had long since paid the expenses of the struggle with Napoleon,
but. by the annual increase in the value of the pound sterling,,
that struggle is costing them more and more as the years go b y .
A l t h o u g h the war is over so far as concerns the destruction of
men in uniform and on the battle-field, yet their destruction
continues without uniform, and without the formidable formalities of battle-lines.

A l t h o u g h three-fourths of a century have

elapsed since that war terminated, the conflict still rages.
T h e bonds that were issued to pay the expenses of those wars
are increasing in value at the same rate at which gold increases,
which, for the past twenty years, is at the rate of 2£ per cent
per annum.

Napoleon has been dead for two generations.


his will, by formal words and solemn injunction, he bequeathed
to France the duty of avenging upon England the untimely death
to which it had consigned him.
the trouble.

He might have saved himself

H e has found avengers whom he little suspected

among the Englishmen themselves.
T h e public creditors, by the increasing exactions which from
year to year they are making through the operation of the gold
standard in the payments of interest on the war debt, have already by means of idleness and starvation brought to ruin, desolation, and death millions of such brave men as defeated Napoleon.

T h e masses of the people of great Britain, though able

to cope with an open foe on a field in which they recognized the
enemy, have not been on their guard against the insidious attacks
of the crafty adversary who presented himself in the guise of a
compatriot, who under the authority of law by a subtle manipulation of money has continued the slaughter.
The creditor classes of Great Britain having, by their merciless exploitation, reduced their artisan classes, through the instrumentality of the gold standard, to the helpless and pitiable
state which their own writers describe, have finally established,
such conditions in that country as render it impossible for them


longer to make what they deem sufficient return on their money.
Hence they seek abroad the investments and profits that, were
their wisdom as great as thei* cupidity, they would be able to
find at home.

In the search for foreign investments they nat-

urally seek as most desirable the country in which consumption
is greatest.

No country in the world can, in the earnings or ex-

penditures of its people, compare with the United States.


people consume fully three times as much as the average consumption per capita of the people of Europe.


Under a proper monetary condition the people of this country
would not need foreign money.

W e should be able to attend to

our own business and to maintain justice and equity among our
own people without asking permission from foreign countries,.
T h e British Government is determined to treat the United
States as an annex to Lombard street; and its efforts are seco ided by a few persons in this country who delight to be known
rather as citizens of the world than of the United States.


masses of the people of this country will not permit a perpetual
injury to be inflicted on them simply because the Government, or
governing classes, of some other country are so indifferent to the
welfare of their own people as to maintain a shrinking money
standard, which constantly relegates large numbers to idleness.
The people of the United States are too brave to be enslaved
by military power.

The combined armies of the earth, with all

the powder, shot, and shell they could bring to bear, would be
impotent to reduce to a condition of servitude the fearless and
undaunted people of this country.

But, Mr. President, many a

man who can encounter even death itself with a smile, can not
face a hungry family; and a people that never could be conquered
by a foreign foe may be reduced to abject submission by a few
foreigners, cooperating with a few of their own people, through
the subtle and clandestine manipulation of the volume of money.
W i t h o u t financial independence, political independence is butan
empty name.
If the creditor classes of Great Britain can have their way
now in establishing the financial measures of this country, and
can dictate, as they are dictating and shaping, the national pol785


icies of this Republic, the sufferings and heroism of our forefathers have been in vain.

W h a t does independence mean?

Hear Webster's definition of it:
Absence of dependence; exemption f r o m reliance on others or control
f r o m them: self-subsistence or maintenance; direction of one's own affairs
without interference.

These are all self-evident significations of the term.

But it is

said that independence means freedom to make our own laws
without interference from others. Laws about what? Does independence mean the right to make laws to prevent Great Britain
from sending her troops here to reduce this country to possession?

By no means.

W h a t would she do with the country?

Of what use would possession be to her unless she could tax us
or compel us to pay tribute?
time ago.

That question was settled some-

But why should Great Britain put herself to the

trouble and expense now of sending troops here to reduce this
country to possession when she can secure all the tribute she
wishes by voluntary acts of Congress—which contract our money
volume, acts by which the value of gold will be enormously enhanced?

W h a t more can she have or wish to have, than the right

to tax the labor of this country?

That right she has already in a

measure secured—that is to say, her creditor classes have secured, by their success in compelling our people to render tribute to tnem through the ingenious and unsuspecting operation
of our own laws, first, by the demonetization of one of the money
metals in which our debts to Great Britain were payable, and,
secondly, when Congress sought to correct that error, then, by
the violent and little less than criminal interposition of the executive officers of our Government in behalf of the bondholder,
to his unfair advantage and against the interests of the producing masses of this country.
The governing classes of Great Britain are much better off to
have this country take the trouble of passing its own laws in so
far as concern the police regulations and the maintenance of internal order, while permitting those classes to reap all the benefits to come from the possession of what are tantamount to large
colonial dependencies, teeming with an active, enterprising,
and vigilant population.

They get $80,000,000 a year in inter-

est, and on other accounts, from the great dependency India;


they get probably thrice that much from the United States,
which, if the pending measure become a law, will displace India
as the principal dependency of Great Britain, though out of regard for our creditors and foreign rulers we will not give them
the trouble to appoint agents to collect taxes and tribute.


will ourselves see that they are paid.
Owing to the poverty of the people of India it is impossible
that much more can be extorted from them in the form of tribute
to the creditor classes of Great Britain; but so far as concerns
tbe people of the United States, their very activity, energy, ingenuity, and enterprise form the groundwork of the hope of Great
Britain and her creditor classes that here they may find a field
worthy of their effort.

They are intelligent enough to know

that any form of tribute exacted from the people of this country
must be in clandestine form; for while the people of India are
unable to defend themselves the people of the United States
have but clearly to perceive the evil in order instantly to apply
a remedy.
Hence the necessity of calling gold a " s t a n d a r d , " so that all
propositions to increase the volume of money in accordance with
population may be met by the objection that there is no more
of the " standard" with which to make possible an increase,
and that however much a fall of prices may be regretted it is
They keep out of view, and out of reach of the people, the truth
as to a standard, which is, that it is not a material but a quantity.
T o them, gold commends itself because its limitation of quantity is extreme.

With a gold standard it is impossible to have

much money—impossible to have such increase as to keep creditors from looting the producers of the world.
T h e London Daily News, in its issue of May 10, 1892, speaking
of bimetallism editorially, says:
" For Great Britain, preeminently the creditor among all nations, to adopt it, would be midsummer madness, indeed." " B i metallism," it adds, " w o u l d shake to its foundations the financial fame and supremacy of Great Britain." W e l l , Mr. President, if the installation of justice would have the effect of shaking to its foundation the financial fame and supremacy of Great
Britain, it only shows how far removed from the true standard


that fame and supremacy are.

The " supremacy " to which the

Daily News refers is the power of the creditor to extort from his
debtor more than is called for by the contract.
There can be no doubt that the restoration of silver to its full
function as money of ultimate payment would tend to lessen that
power, would tend to retard the further appreciation of gold.
But that tendency would not deprive the creditor of anything
to which he is rightfully entitled. It would simply render it less
easy for him to commit a fraud; less easy to compel the debtor
to return more than was agreed upon.

T h e argument that Eng-

land's financial supremacy would be destroyed by the free coinage of silver may be a justifiable argument to present to the
moneyed classes of Great Britain, but it is incomprehensible how
it can be presented to the people of the United States.


The effect which that standard is having upon the people of
Ireland is well summed up by Archbishop Walsh, of Dublin.


an interview originally printed in the Dublin Freeman's Journal,
and since published in a pamphlet entitled Bimetallism and
Monometallism, Archbishop Walsh says:
Here is where the difficulty comes in. In all such cases the farmer is under the obligation of paying, year after year, an amount specified in pounds
shillings and pence. But then this rent, or other annual payment which he
has to make, though it is thus specified in amount, is really increasing, that
is to say, becoming more burdensome from year to year.
To bring the matter to a point, it comes to this, that year after year more
corn, more hay, more cattle, have to be sold by the farmer to enable him to
get the gold which is required to meet that annual payment.
But, of course, if he has not more corn, more hay, or more cattle to sell,
he can not, out of what he has to sell, get enough to enable him to make
that payment.
And, plainly, the longer the term for which his fixed " annual payment
has to be made, the more disastrous must be the results to him.
As for the tenant-purchaser, he probably thinks that, after the extra pressure of the first few years, he may look back to easy times for the rest of his
life. He little knows what is before him. If things go on as they are, it will
be harder for him ten or twelve years hence to pay £40 a year than it would
be for him to pay £50 a year now. But of all this he knows nothing. How
could he? His only idea is that a pound is always a pound, a sovereign is
always a sovereign. So in the belief that the yearly payment, when it is
reduced to £40, will be well within his reach, he puts his head into the halter.

Archbishop Walsh continues:
This aspect of the case is brought out forcibly also by the Belgian economist, Emile de Laveleye:
'This consideration," he says, "especially affects Ireland. * • *

" I f you can let tenants hold, their lands for nothing, it would be all right;
but if they have to pay a fair rental, either to landlords or to the Government, or to purchase at a fair price, they must then sell produce so as to
procure the amount requisite for purchase or for a fair rent.
" If the price of this produce is very low, and is still falling lower, then the
tenants will be incapable of raising the required sum, and it will be necessary to evict them * * * or to cancel their debts.
" T h e supply of gold being wholly insufficient, a fall in prices must ensue;
hence the ruin of Irish cultivators in spite of home rule."


Last summer the British Government knew that a great discussion was soon to take place in this country upon the silver
question; having observed the published statements that an extraordinary session of Congress was to be called for the purpose
of debating it.

Knowing the strength of the free-coinage sen-

timent among the masses of the people of this country, Great
Britain deliberately threw down the gauntlet of "defiance to the
United States by closing the mints of India to free coinage.
A n d , assuming that when Great Britain spoke all discussion on
the part of other nations was closed, we had the assurance of
the chancellor of the British exchequer, in Parliament on the
8th of August last, that the order in council had forever destroyed

This statement he made in a tone of supreme tri-

umph and cynical satisfaction.
W h e r e was the United States Government during this time—
the United States, of all the nations of the earth the most interested?

T h e position of our Chief Magistrate on the question

is well illustrated by the line from Emerson:
I am the doubter and the doubt,

but in the words of the supplemental line, the Genius of the R e public admonishes the President as well as Great Britain:
They reckon ill who leave me out.

The people of the United States, Mr. President, do not propose to be left out of the consideration as to what shall be the
material or the quantity of their money

Great Britain may

have what material and what quantity of money it pleases, and
may extort usury in compound or in quintuplicated form from
such nations as India and Egypt, whose people are the remnants
of exhausted races and have not the genius or the strength to
defend themselves.

But we are not yet a dependency of Great


Britain, and our President is not a governor-general who can
issue orders in council.

The people of this country propose

to regulate their own affairs, without orders in council or orders
from Downing street.
Instead of calling Congress together for the purpose of adopting the true American policy of an instant remonetization of
silver, as the answer of the United States to the order of the
British Government, the Executive of the Republic is found to
be the head and accepted chief of a new party, composed of members of the two leading political parties, who find no inspiration
in the Declaration of Independence, and no authority in the Constitution of the United States, by which our people, after a century of self-government, can extricate themselves from the net
which the so-called and self-styled " great creditor nation " and
" great rich nation " has set for mankind.
If we are to be governed by Lombard street and by British
policies, if we are really to be controlled by the English governing classes, and if they are to decide upon what is to be taken
as money in the United States, would it not be well, in order to
save them trouble, for us to declare by statute law that the unit
of money hereafter in this country shall be the pound sterling?
In that way the English creditors will be saved a great deal of
trouble in making their computations.
Is there not some danger, if we do not adopt this plan and accept
their unit of money as our unit of money, that we shall be placed
alongside Mexico and India and the Argentine?

Had we not

better, while it is yet time, and before the Constitution of the
United States has become obsolete, as it will become under the
operation of the gold standard, adopt this plan by a constitutional amendment, or (which will be equally binding) by a decree of the Chief Magistrate?
For the first time in our national history we find ourselves putting into execution, through officers elected by the people of the
United States, plans formulated in Downing street.


Mr. President, time has its revenges.
Inasmuch as the policies of Great Britain are so much better
than ours—so much better than those planned for us by W a s h ington, Hamilton, Jefferson, Madison, and the others whom we


have evidently been mistaken in regarding as great men—it is
clear that it was the errof* of the centuries that these colonies
ever became independent States.

W h o were Washington, Ham-

ilton, and Jefferson—those arch-enemies of Great Britain—that
they should be named on the same day or in the same century
with Presidents who offer up " d a i l y prayers" that the delay occasioned by the Senate in carrying into execution plans for gold
monometallism, rejected by the founders of our Government, may
not bring discredit and dishonor to the United States?
W h o , especially, was Washington that he should bid his countrymen beware of entangling alliances with foreign nations on
the ground that a republic could not expect favors from monarchies?

W e have learnt in these modern days that it is better

to make alliances with foreign nations—monetary alliances—and
to keep advising them daily that we intend to be " h o n e s t " and
to pay our debts in the " h o n e s t " money which they designate
after they have " c o r n e r e d " the material, which, as thgy assert,
is the only " h o n e s t " money material.

W h o were the framers

of our Constitution that they should impose on their countrymen unsound, unstable, and dishonest currency composed of
gold and silver, instead of gold alone?
These men, whose foresight, sagacity, and political genius
have been regarded as among the marvels of all time, are relegated to the rear by modern statesmen who, in the words of the
present President of the United States, wish our currency " t o
be of such character as will demonstrate abroad our wisdom and
good faith, thus placing us upon a firm foundation and credit
among the nations of the earth."

Immortal shade of W a s h i n g -

ton ! Would it not be better to demonstrate this at homef


has '' abroad " got to do with us? If it be justice that is sought, is
there to be no justice at home?

W h y '' abroadf "

I do not wish to

exaggerate, but I suppose it to be universally conceded, both
abroad and at home, that the United States is not merely the
greatest nation now of the earth, but the greatest that ever has
been of the earth, and that it gives promise of becoming, not
smaller, but greater, with the advance of time.
Is it necessary for the splendid citizenship of this mighty
Republic, the possession and inheritance of 70,000,000 of alert


and aspiring people, to be vindicated by daily protestations of
honesty to a few usurers who have been paid far more than their
contract called for, and more than was agreed to be paid them?
Such an idea disparages citizenship of a free Republic, and sets
up as the model and standard of perfect political wisdom the
relation held by subjects to monarchs, more wise than those they
govern, monarchs who know what they are about when they
prescribe the gold standard as the unfailing remedy for all overweening aspirations on the part of the masses of the people.







A l l discussions of the silver question have arisen out of the
claims of the holders of United States bonds to be paid the principal and interest of the bonds in gold, yet there is no debt of
the United States that by the will or consent of the people or of
Congress was ever made payable in that metal.

W h e r e , by the

terms of the bonds, any mode of payment was prescribed, the
words used were either " l a w f u l money," which would mean coin
or paper, or else the word " c o i n , " which would mean either
gold or silver.

The word " g o l d " was never used.

The act of February 25, 1862, authorizing the issue of $500,000,000 of 5-20 bonds provided that the principal of the bonds
should be payable simply in " d o l l a r s , " making no mention of
the material of which the dollars should be composed.

It pro-

vided specially, however, that the interest should be payable in

It is clear, therefore, that the act contemplated the pay-

ment of the principal in lawful money of the United States,
whatever that money may be.

Having provided that the inter-

est should be paid in coin the act set apart the coin receipts from
customs for that purpose.
T h e act of March 3, 1863, under which the 10-40 bonds were
issued, makes the principal and interest of those bonds payable
in coin.
That no portion of the bonds of the United States, except the
interest, was by the original law authorized to be paid in anything but lawful money was attested by the honorable Senator
from Ohio [Mr. SHERMAN] in a letter written by him to the
Hon. A . Mann on the 20th of March, 1868, Mr. Mann being a

r e s i d e n t of B r o o k l y n , N . Y .

U n d e r t h a t d a t e , as a p p e a r s


various printed publications, the honorable Senator wrote a lett e r of w h i c h t h e f o l l o w i n g is a c o p y :
DEAR SIR : I was pleased to receive your letter. My personal interests are
the same as yours, hut, like you, I do not intend to he influenced by them.
My construction of the law is the result of careful examination, and I feel
quite sure that an impartial court would confirm it if the case could be tried
before a court. I send you m y views as fully stated in a speech. Your idea
is that we propose to repudiate or violate a promise when we offer to redeem
the principal in legal tender.
I think the bondholder violates his promise when he refuses to take the
same kind of money he pays for the bonds. If the case is to be tested by law,
I am right. If it is to be tested by Jay Cooke's advertisement, I am wrong.
I hate repudiation or anything like it; but we ought not to be deterred from
doing what is right by the fear of undeserved epithets. If under the law
as it stands the holders of the 5-20's can only be paid in gold, then we are repudiators if we propose to pay otherwise. If the bondholder can legally demand only the kind of money he paid, then he is a repudiator and extortioner
to demand money more valuable than he gave.
Yours truly,
T h e s e w e r e t h e v i e w s , a n d c o r r e c t v i e w s , of t h e


S e n a t o r f r o m O h i o a t t h e t i m e t h i s l e t t e r was w r i t t e n .


i s n o d o u b t , h o w e v e r , t h a t u p o n t h e p a s s a g e i n 1869 of t h e a c t
t o s t r e n g t h e n t h e p u b l i c c r e d i t , a n d i n 1870 of t h e a c t p r o v i d i n g
f o r t h e r e f u n d i n g of t h e n a t i o n a l d e b t , t h e U n i t e d S t a t e d S t a t e s
w a i v e d and abandoned t h e r i g h t to p a y in l a w f u l m o n e y and
g u a r a n t e e d p a y m e n t of b o t h p r i n c i p a l a n d i n t e r e s t of t h e b o n d s
in coin.





A t t h e t i m e of t h e p a s s a g e of t h e a c t of 1869 i t is c l e a r t h a t n o
one had any idea that the bonds were payable in gold alone.


t h e a c t is v e r y b r i e f , I w i l l r e a d i t :
Be it enacted, etc., That in order to remove any doubt as to the purpose of
the Government to discharge all just obligations to the public creditors, and
to settle conflicting questions a,nd interpretations of the laws by virtue of
which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment
in coin ov its equivalent of all the obligations of the United States not bearing interest, known as United States notes, and of all the interest-bearing
obligations of the United States, except in cases where the law authorizing
the issue of any such obligation has expressly provided that the same may
be paid in lawful money or other currency than gold and silver. But none of
said interest-bearing obligations not already due shall be redeemed or paid
before maturity unless at such time United States notes shall be convertible
into coin at the option of the holder, or unless at such time bonds of the
United States bearing a lower rate of interest than the bonds to be redeemed

can be sold at par in coin. And the United States also solemnly pledges its
faith to make provision at the earliest practicable period for the redemption
of the United States notes in coin.

A n y one who can read the English language can clearly perceive that this act makes no promise of payment in gold. On the
contrary, it specifically recognizes the fact that the " c o i n " p r o m ised in the former act is coin of either gold or silver.

The idea

with which the act was passed was that all the obligations of the
United States were to be paid, not as was at first agreed, in
" l a w f u l money," but, as this act now stated, " i n coin or its
equivalent," with the single exception of obligations as to which
it had been "expressly provided that the same be paid in lawful
money or other currency than gold or silver."


The act of July 14, 1870, providing for the refunding of the national debt, authorized the Secretary of the Treasury to issue
certain classes of bonds therein named to the amount of altogether some $1,500,000,000, " redeemable in coin of the present
standard value.'1'1 Those bonds when issued had printed upon
them the following statement:
This bond is issued in accordance with the provisions of an act of Congress entitled " A n act to authorize the refunding of the national debt," approved July 14, 1870, amended by an act approved January 20, 1871, and is redeemable at the Treasury of the United States after [stating such number
of years as applied to the various descriptions of bonds whose issue was
provided for in the act] in coin of the standard value of the United States on
said July 14,1870.

On the date of the passage of this act of July 14,1870, the
standard coin of the United States consisted of a gold dollar and
a silver dollar; the gold dollar containing 25.8 grains of standard gold and the silver dollar 412i grains of standard silver.
No change which the Government might afterward make in
the standard or character of its coins could deprive the creditors of the right in this act guaranteed to them of payment in
coin of the then standard


But neither could any execu-

tive officer lawfully deprive the people of the United States of the
option in this act secured to them, to pay in coin of either gold
or silver of the then standard value.
If the act was good to guard the creditor against any subsequent alteration in the standard of value by which the true


value of the debt could be reduced, it was equally good to secure the debtors—the people of the United States—against any
alteration in the standard of value by which the true value of
the debt might be increased.

Whatever changes might be

made in one direction or the other, the rights of the pa;/ties
were now specifically fixed and determined in writing, even
though at a grievous loss to the debtors.

If after the enactment

of this law the United States should see fit to demonetize both
gold and silver and resort to paper money or to coins of platinum,
or other metal, still the rights of these creditors held good to
be paid in coins of either gold or silver and not in paper money
or platinum.
Should the United States, before the maturity of those bonds,
provide a new coinage of gold and silver in which the dollar
should consist of but one-half or three-fourths the number of
grains of pure metal of either gold or silver contained in the
standard coins of July 14, 1870, then the creditors could rightly
decline to receive such coins in payment, and their legal rights
could not be overridden or prejudiced by any such alteration of
the standard.

So, on the other hand, if the laws of the United

States should later provide for a coinage system in which the
dollar of gold should contain a larger number of grains of gold
than that which was the standard of July 14, 1870, or the dollar
of silver a larger number of grains of silver, no injustice could
be done the creditors by enforcing the bond according to its
terms requiring payment in the smaller dollar, which was the
standard on July 14, 1870; and it would be then, as it always has
been, the imperative duty of the executive officers of the Government to carry out the law according to its plain and unmistakable terms.
After the passage of the demonetization act by the United
States, gold and silver bullion, as was foreseen by the creditors,
began to part company.

In this process no change took place

in the purchasing power of silver.

The change that took place,

as has been demonstrated time and again, was in gold, which
was rapidly appreciating in value by reason of the enormously
increased demand for it. All the statistics of the subject, as
printed from day to day and month to month by the gold-stand785


ard papers themselves, g o to demonstrate that the change that
was taking place was a change in the value of gold, while the
purchasing power of silver—not merely of the silver dollar, but
of silver bullion—remained related to commodities substantially
as it, in common with the gold dollar, had been related to commodities before the act of demonetization.
But the gold dollar, being taken as the standard, and silver
and everything else being measured in terms of gold, the change,
as it progressed, and as gold became more and more valuable,
had the appearance of a change in the value of silver bullion,
which was said to have fallen.

Had the bondholders, therefore,

received their pay not even in silver dollars, but merely in silver bullion, they would have received ail the purchasing power
that the gold dollar in common with the silver dollar had at the
time the act of 1870 was passed, which provided for payment in
coin of either metal, and all that the gold dollar had when they
bought the bonds.

They would have received even more, as the

proofs are that silver not only had not lost any power over commodities but had slightly gained, owing to the want of sufficient
money-volume to maintain the exchanges of the world.


being the case, I ask any gold-standard Senator to answer how
the payment of the bonds, principal or interest, in silver (had
the payment been so made) could have inflicted the slightest
possible injury on the public creditors?
The gold dollar had in 1870 a purchasing power of say 100 per
cent. The silver dollar had precisely the same purchasing power;
it would buy precisely the same amount and number of commodities in general as would the gold dollar.

The purchasing power

of silver bullion remains the same to-day, in relation to commodities in general, that it was then, while the gold dollar has steadily kept rising in its power over commodities, until to-day it has
a purchasing power substantially 50 per cent greater than it had
in 1870, or 150 in 1893 to its 100 in 1870.
But this is no reason why the people of the United States, who
had contracted to pay only 100 per cent of purchasing power, as
that purchasing power stood in 1870, should to-day be paying,
or be bound hereafter to pay, 50 per cent more value than had
been agreed upon.


The determination of the officers of the United States therefore to pay the bonds in gold, added enormously and causelessly
to the just burden of the debt.

Had the bonds been paid, accord

ing both to the spirit and the letter of the contract, in either
gold or silver, as might have best suited the convenience of the
Treasury and the interests of the people, which were and are
the interests of justice, an enormous amount of money—an enormous amount of wealth—would have been saved to the people of
this country.
Mr. S T E W A R T .

A n d they would have been out of debt.

Mr. JONES of Nevada.

Yes, they would have been entirely

out of debt.
Not merely saved in the amount wrongfully and unrighteously
paid out to the bondholders, but in the colossal sums which have
been needlessly lost to our people, especially our producers of
wheat, cotton, and other articles of export by reason of the unprecedented fall in prices.


It is said that the honor of the Government would be tarnished
if it did not pay its obligations in gold; that its credit would be
destroyed, and that it would be ranked among the nations that
have repudiated their lawful obligations.
T h e honor of the United States, Mr. President, does not rest
upon the word of interested self-seekers and their casuistical defenders.

It abides in the patriotism of the people who have

never consented to pay more than their honest debts merely to
receive the questionable and interested plaudits of their creditors.

T h e idea that a debtor must pay more than he justly owes

in order that he may be on good terms with his creditor is an
idea worthy of the feudal ages, when men upon bended knees
swore homage to the lord of the manor.

It is a piece of syco-

phancy and absurdity of which the people of this country and of
this age will not be guilty.

This Republic has never failed to

meet its indebtedness, and it is the only country in the world
that has never made default in the payment of its obligations.
T h e most powerful governments of Europe have made such defaults.
[ A t this point the honorable Senator yielded to Mr. STEWART.]


Mr. JONES of Nevada.

Mr. President, there is hardly a na-

tion on earth except the United States that has not at sometime paid its obligations or the interest on them in a money less
valuable than that in which it agreed to pay.

The people of

the United States have scrupulously guarded their honor by a
faithful observance of every obligation, not only in the spirit,
but in the letter.

But while the people have always maintained

their honor by observing justice, the officers whom they have
chosen to execute their laws have joined hands with the creditors of the country in extorting from our citizens, under the
name of honor and honesty, more than the people had agreed to
In disregard and in open defiance of the law, these officials
have aided the public creditors to loot the taxpayers of the

For the executive officers to interpret an obligation

of the United States in such a manner as to pay over to the
creditors of the country from the public funds a greater value
than the people contracted to pay, was a gross violation of the
instrument constituting the contract between the parties.
I do not charge that it was done through any want of desire to
do what was right, but if done from zeal for the honor of the
country it was a most mistaken zeal, and was not authorized or
warranted by the law.

So far as concerns the essential fact,

which is the loss suffered by the people of this country, it has
had precisely the same effect as if those officials had deliberately
altered the words of the bonds, so that instead of agreeing to pay
$1,000 the United States had agreed to pay such amount greater
than $1,000 as gold has appreciated in value—or about 2| percent
per annum for the past twenty years.

Their reward for this

consists of the loud, interested, and obnoxious praises of the
cunning schemers who have used the officials of the United
States as tools to assist them in plundering the public Treasury
under the plea that wh it they were doing was honest, and that
the honor of the United States demanded it.
In the execution of laws for the payment of money, officials
must take cognizance not merely of the rights of the creditors, but the rights of the people.

If the officials choose to act

as trustees for the creditors, they should not forget that they

w e r e c h o s e n as t r u s t e e s a n d a g e n t s of t h e p e o p l e .

The people

r e s e r v e d t o t h e m s e l v e s t h e o p t i o n of p a y i n g t h e i r d e b t s i n e i t h e r
g o l d o r s i l v e r , f o r t h e v e r y p u r p o s e of b e i n g p r o t e c t e d a g a i n s t
a n y c o n t i n g e n c y , w h e t h e r of l e g i s l a t i o n b y f o r e i g n c o u n t r i e s w i t h
r e s p e c t t o e i t h e r of t h o s e m e t a l s , o r a n y c o m b i n a t i o n of c i r c u m s t a n c e s w h i c h m i g h t i n v o l v e a c h a n g e of c o n d i t i o n s i n t h e p r o d u c t i o n of t h e m e t a l s , o r o t h e r w i s e .

T h e p o s i t i o n of t h e U n i t e d


States was v e r y clearly stated b y

A t t o r n e y - G e n e r a l D e v e n s i n 1877, i n a l e t t e r r e p l y i n g t o a n i n q u i r y of t h e t h e n S e c r e t a r y of t h e T r e a s u r y , n o w t h e h o n o r a b l e
S e n a t o r f r o m O h i o [ M r . SHERMAN].

In o r d e r to s h o w the founda-

t i o n of t h e o p i n i o n of t h e A t t o r n e y - G e n e r a l , I w i l l first r e a d t h e
l e t t e r of i n q u i r y of t h e S e c r e t a r y of t h e T r e a s u r y :


Washington, D. C., April 21, 1877.
SIR: I beg leave to call your attention to, and ask your opinion upon, the
following questions growing out of the refunding act of July 14, 1870, to wit:
Can I stipulate in the body of the 4 per cent bonds about to be issued that
they shall be redeemable in coin of the present standard value; that is, the
standard value at the date of their issue, or must it be the date of the law?
I submit a statement prepared by the Hon. H. M. French, Assistant Secretary, having reference to the laws.
It may become important to the public interests to make the new bonds
payable in coin of the present standard, that is, gold coin. Some doubts
have been expressed upon whether previous bonds issued under acts passed
prior to 1873 are not legally payable in silver coin. This question may become important, as any doubt upon the legal terms of a public security affects its value.
Very respectfully,


Attorney- General.
T h e r e p l y of t h e A t t o r n e y - G e n e r a l w a s as f o l l o w s :

April 26, 1877.

SIR: In answer to your letter of the 21st instant requesting m y opinion
upon the following question growing out of the refunding act of July 14,
1870, to wit, " Can I stipulate in the body of the 4 per cent bonds about to be
issued that they shall be redeemable in coin of the present value, that is, the
standard value at the date of their issue, or must it be the date of the law?"
I have the honor to reply;
The act provides for the issue of bonds ''redeemable in coin of the present
standard value." The word " p r e s e n t " undoubtedly refers as a matter of
date to the time when the act was passed, and not to the time when the
bonds were thereafter issued. It contemplated that a long period would
elapse before it would finally be carried into effect, and that changes in the
coinage of the country might occur during that period.

Whatever changes in the coinage should, occur these bonds were, however,,
to be redeemed in coin of the standard value as it existed at the date of the
act. By this provision the holder was guarded against any depreciation
that might take place in the value of the coin, and the Government would
not be compelled to pay the additional value should the coinage be appreciated. All the bonds issued under the act were to stand alike, no matter
what was the date when such bonds were issued Each was to be redeemable in coin which was included in the authorized coinage of the country at
the date referred to, it being of the standard value as it then existed. Since
the law was passed no change has taken place in the standard value of the
coin. It is understood that there has been a certain change in the coinage
of the country and that silver dollars have now ceased to exist practically
as coin.
It has been further provided by the statute of February 12th, 1873 (Revised
Statutes, sections 3585, 3586), that " T h e silver coins of the United States
shall be a legal tender at their nominal value for any amount not exceeding
$5 in any one payment."
Notwithstanding this practical change in the coinage of the country and
the passage of this act in regard to legal tenders, the f o r m of bond to be
issued by you should not be changed so far as the mode in which it is to be
redeemed is concerned. It was not intended that this should be varied according to the changes which might be made in the coinage, because a definite rule was given by reference to the coin of a particular date. That which
will pay the bonds heretofore issued under this act will pay the bonds which
y o u may hereafter issue.
It can not be authoritatively said that the words " P a y a b l e in coin " or
"Payable in gold " are equivalent to the words used by the statute. Even if
this leaves open for discussion the question whether bonds issued under this
act are or are not redeemable in silver coin of the character and standard
which existed July 14,1870, it is not a doubt which it is in your power to remedy by the use of words in the bond other than those which this statute provides.
While I comprehend the difficulty suggested in your letter and the convenience that there might be in removing any question upon this matter, I
am, therefore, of opinion that it would not be safe to issue the bonds, except
as redeemable in coin of the standard value of July 14,1870.
Very respectfully, your obedient servant,
CHAS. DEVENS, Attorney-General.

Secretary of the Treasury.
W h a t did the Attorney-General
w o u l d n o t h e "safe"

m e a n w h e n h e said t h a t


t o i s s u e t h e b o n d s , e x c e p t as r e d e e m a b l e i n

c o i n of t h e s t a n d a r d v a l u e of J u l y 1 4 , 1 8 7 0 ?

H e s u r e l y m e a n t , if

h e m e a n t a n y t h i n g , that t h e statute m u s t b e construed a c c o r d i n g
t o i t s p l a i n t e r m s — a n d i t is v e r y c l e a r t h a t h e c o n s i d e r e d t h a t
t h e i s s u e of b o n d s p a y a b l e in g o l d w o u l d b e a v i o l a t i o n of


W i t h reference

to the




S e c r e t a r y of

T r e a s u r y t h a t s o m e d o u b t s h a d b e e n e x p r e s s e d as t o



p r e v i o u s b o n d s i s s u e d u n d e r a c t s p a s s e d p r i o r t o 1873 w e r e n o t
l e g a l l y p a y a b l e i n s i l v e r c o i n , t h e o p i n i o n of t h e A t t o r n e y - G e n 785


eral w:.s that it was not a doubt which it was in the power of the
Secretary of the Treasury to remedy by the use of any other
words in the bond than those provided by this statute.


meaning is clear, that any doubt on the subject was one that
could be resolved and removed by legislation only, and not by
the unauthorized dictum of an executive officer.
T h e Secretary of the Treasury, upon reading this opinion of
the Attorney-General, must have concluded that he was entirely
without authority to pay these bonds, or the interest on them,,
in gold coin.

No other inference can be drawn from his recom-

mendation to Congress at the opening of the subsequent session.
In his report dated December 3, 1877, he suggests to Congress
that provision be made by express act for payment in gold coin.
Had he supposed that the law of 1870 and the provisions printed
on the bond authorized the payment of gold alone, why should
he have suggested the enactment of affirmative legislation to
authorize such gold payments?

T h e Secretary's recommenda-

tion was as follows:
If, therefore, the public interests demand the issue of silver dollars—a subject hereafter discussed—it is respectfully submitted to Congress that an
express exception be made requiring that gold coin alone shall be paid f o r
principal or interest on bonds issued to public creditors since February 12,
1873, the amount of which is $502,990,700. These bonds have entered into the
markets of the world. If the market value of the silver in the new coin is
less than the gold dollar, a forced payment in the new coin is a repudiation
of a part of this debt.

Congress did not act on this recommendation.

One would sup-

pose this fact to be notice, if any were necessary, to the officials
of the United States that Congress did not agree with the Secretary in his interpretation of the case, whether upon the law
or the facts.

Congress did not see that either the law or the

equities required any readjustment.

Congress knew, as all men

knew, that the bondholders had taken very good care of themselves already, and had in 1870 provided for full, and more than
full, payment by the passage of the provision for payment in
coin of either metal.
From all the facts in the case, none of the executive officers of
the Government could have for a moment been ignorant of the
meaning and determination of Congress in respect to the matter.




People who buy bonds do not buy them from altruistic motives.
They buy them for their own profit and advantage,

They buy

bonds of the United States as they buy all bonds, only after careful scrutiny of the terms on the face of the bonds, and of the
laws by authority of which these bonds have been issued.


look sharply to the figures which show the dates of payment of
principal and interest, but above all, and rising beyond all other
considerations, they look to the medium, or as they term it, the
standard in which the payment is, by the terms of the bond, to
be made.
T o suppose that such a feature is neglected would be to suppose that public creditors, the keenest of men, had lost their

Every bond ever issued has, in plain terms, stated

on its face the authority for its existence.

It contains a clear

citation of the law or laws which constitute the reason for its

These laws are open to public inspection.

No class of

persons better than public creditors so well understand the limitations which the laws of all civilized nations place upon the
functions of executive officers with respect to issuing bonds or
incurring debts or obligations on behalf of their country.


know that the duties of those officers in connection with loans
are specified in the laws by which the loans are authorized to be

Hence these loans are examined as with a mental mi-

croscope to see that no doubt exists as to the authority of the
officer who executes the securities, and as to all other particulars concerning payment of the obligation.

If they did not

observe on the bond the plain printed statement that it was payable in the standard coin of the United States of July 14, 1870,
they must have been blind indeed.
I have never heard a denial by anyone having knowledge of
the legislation under which the bonds were issued that it is the
legal right of the United States to pay those bonds in either gold
or silver coin.

It is said that at the time of the negotiation of

the bonds silver money was out of use in this country.

The suf-

ficient answer1 to that is that gold was equally out of use.

It is

said that the bonds were sold to citizens or subjects of countries
in which silver was not recognized as money.

This was cer-


tainly not true of Germany, in which country early and considerable sales were made.
Germany was on the silver standard until December, 1871, and
had considerable silver in its coin for a long time after that.
Besides, our bonds were not, either by their terms or by implication, payable in foreign countries or in the money of those

They were payable within the United States, and it was

distinctly affirmed on their face that they were payable in dollars
of the United States.

If the citizens or subjects of foreign coun-

tries who bought such bonds did not understand what a dollar of
the United States meant, they could not have had the slightest
difficulty in ascertaining; and of course they did ascertain.


A t the time when all these transactions took place one of the
money metals was cheaper than the other.

For such of the

bonds as any creditor bought it was his option to pay in either
the cheaper or the dearer metal.

He exercised his option by

paying in the cheaper metal—which, at the time, was gold,
which was 3 per cent less valuable than silver.

He knew that

by the terms of the bonds it was the option of the people of the
United States, whenever the time of payment should arrive, to
do as they had been done by—namely, to pay in the metal which
at the time of payment should be the cheaper.

If the cred-

itor had, as he did have, a specific option and exercised it in his
own behalf and for his own benefit and advantage, what reason
can be advanced why the debtors should abandon an equally
specific option residing in them?



But to place the matter beyond possibility of doubt or peradventure, this whole question as to whether the bonds of the
United States were lawfully payable in either gold or silver at
the option of the United States was thoroughly discussed by the
representatives of the people in both Houses of Congress in 1878,
prior to the passage of the silver-purchase law of that year.


the 16th of January, 1878, the Hon. Stanley Matthews, then a
Senator from the State of Ohio, in view of the claims of the

bondholders and their h e n c h m e n in Congress that the bonds
were legally payable in g o l d alone, submitted to the Senate a
c o n c u r r e n t r e s o l u t i o n d e s i g n e d t o c a l l f o r t h t h e v i e w s of t h e
m e m b e r s of t h e H o u s e a n d S e n a t e n i n e y e a r s a f t e r t h e p a s s a g e
of t h e a c t o f M a r c h 1 8 , 1 8 6 9 .
ond thought.

T h a t was time e n o u g h f o r sec-

T h e p r e a m b l e of t h e r e s o l u t i o n r e c i t e s t h e c o n -

d i t i o n of e x i s t i n g l a w s r e l a t i n g t o t h e p a y m e n t of U n i t e d S t a t e s
b o n d s , a n d as I t h i n k t h e d o c u m e n t w i l l b e f o u n d


r e a d i n g , I a s k t h e c a r e f u l a t t e n t i o n of S e n a t o r s t o i t :
Whereas by an act entitled "An act to strengthen the public credit," approved March 18, 1869, it was provided and declared that the faith of the
United States was thereby solemnly pledged to the payment in coin or its
equivalent of all the interest-bearing obligations of the United States, except in cases where the law authorizes the issue of such obligations had previously provided that the same might be paid in lawful money or other currency than gold or silver; and
Whereas all the bonds of tte United States authorized to be issued by the
act entitled " A n act to authorize the refunding of the national debt," approved July 14, 1870, by the terms of said act were declared to be redeemable
in coin of the then present standard value, bearing interest payable semiannually in such coin; and
Whereas all bonds of the United States authorized to be issued under an
act entitled " A n act to provide for the resumption of specie payments," approved January 14,1875, are required to be of the description of bonds of the
United States described in the said act of Congress approved July 14, 1870,
entitled "An act to authorize the refunding of the national debt;" and
Whereas at the date of the passage of the said act of Congress last aforesaid, to wit, the 14th day of July, 1870, the coin of the United States of standard value of that date included silver dollars of the weight of 412^ grains
each, declared by the act approved January 18, 1837, entitled " A n act supplementary to the act entitled 'An act establishing a mint and regulating
the coins of the United States, " to be a legal tender of payment, according
to their nominal value for any sums whatever: Therefore,
Be it resolved by the Senate (the House of Representatives concurring therein),
That all the bonds of the United States issued or authorized to be issued
under the said acts of Congress hereinbefore recited are payable, principal
and interest, at the option of the Government of the United States, in silver
dollars of the coinage of the United States, containing 412^ grains each of
standard silver; and that to restore to its coinage such silver coins as a
legal tender in payment of said bonds, principal and interest, is not in violation of the public faith nor in derogation of the rights of the public
A m o t i o n to refer that resolution to the C o m m i t t e e on Finance
of t h e S e n a t e w a s v o t e d d o w n .

A v e r y i n f l u e n t i a l m e m b e r of t h e

Senate, the then Senator f r o m V e r m o n t , Mr. Edmunds, m o v e d
t o s t r i k e o u t s u c h p h r a s e o l o g y of t h e r e s o l u t i o n as d e c l a r e d s i l v e r t o b e l e g a l t e n d e r i n p a y m e n t of t h e b o n d s , a n d t o i n s e r t , i n stead, phraseology w h i c h would m a k e

the bonds




•gold or its equivalent."

But, not satisfied with these words, the

distinguished Senator from Vermont in addition moved to incorporate in the resolution the following declaration:
And that any other payment—

That is to say, any other than " g o l d or its equivalent"—
without the consent of the creditor would be in violation of the public faith
and in derogation of his rights.

This proposed amendment brought sharply before the attention of the Senate the very point in issue.

W h a t was the de-

cision of the Senate upon that point?
The amendment of the Senator from Vermont was voted down;
the vote standing—yeas 18; nays 48. This means that nine years
after the passage of the act to strengthen the public credit
which guaranteed to the creditors payment of the principal and
interest of their bonds in coin and seven and one-half years after
the standard of the coin was named 48 out of 66 Senators of the
United States repelled the assertion or implication that the
bonds were payable in gold alone.
It will be noted, Mr. President, that the proposer of that resolution [Senator Matthews] was not a representative



of the so-called silver States, nor was he a silver crank nor a crank
of any other character.

His appointment later to the position

•j, ssociate justice of the Supreme Court of the United States,
; nd his distinguished services in that capacity leave the advocates of the gold standard no opportunity to designate him by
any term that is not complimentary.
The Senator from Vermont, not daunted by the rejection of
his first amendment, moved to amend the preamble so as to
change the resolution into one declaring for gold payment in the
ease of the public debt.

This amendment was also rejected, and

the resolution was sent to the House of Representatives, where,
on the 29th of January, 1878, it was passed by a vote of 189 yeas
to 79 nays, considerably over two-thirds of the votes cast being
in favor of the resolution.

Both Houses, then, of the Forty-fifth

Congress declared by an overwhelming majority that the public
debt should be payable in gold or silver, as might best suit the
people of theUnited States—Congress in that respect simply reasserting and reaffirming the rights of the people as they had


been settled and recorded by the acts recited in the preamble of
the concurrent resolution.
One would suppose that after this unmistakable declaration of
Congress as to the tenor and meaning, and as to the intention in
the passage, of the acts recited, there could be no room for doubt
as to the material or standard of money in which the public debt
of the United States might lawfully be paid.


Indeed, the then Secretary of the Treasury, the present honorable Senator from Ohio [Mr. SHERMAN], appeared for a time
to be in full accord with Congress and to be determined to carry
out the law according to the intent and meaning with which it
was passed. There was a time at least when he favored the paying of the bonds exactly in accordance with the law of July 14,
1870, namely, in either gold or silver, at the option of the United
States, and not at the option of the bondholder.
I think I can say with truth that, considering the amount of
suffering and distress caused to all the industrial classes of this
country by reason of the change of conviction on the part of the
honorable Senator, no single act in the lifetime of any man who
ever held office in the United States since the adoption of the
Constitution is more to be regretted.

I do not intend to exag-

gerate, and am entirely serious and sincere when I say that in
my humble opinion no one act since the foundation of the R e public has caused more affliction and desolation to the people of
this country unless it be the act of firing on Fort Sumter.


am equally sincere in saying that according to my judgment if
this attempted repeal is accomplished all who vote for it will
live to see and to feel that the firing on Sumter, serious and
sorrowful as it was in its immediate consequences, was a shot
that for enduring injury to the industrial classes and to every
man who works for a living in this country, can not be compared
with the measure it is now attempted to drive through this body.
It will be remembered that the silver-purchase law of 1878, besides directing the purchase and coinage of silver to the extent
of not less than two nor more than four million dollars' worth
per month, also restored the legal-tender character of thestand785


ard silver dollar.

That fact being borne in mind, it will be in-

teresting to know that the honorable Senator from Ohio saw no
further necessity for paying the bonds or the interest thereon in
gold, knowing, as of course he must have known, that it was not
only lawful, but equitable that they should be paid in either coin.
I say " of course equitable," because I can not assume that the
distinguished Senator would do or recommend the doing of anything that was not equitable.
Some three weeks after the enactment of the law of February
28,1878, the Senate Committee on Finance had a conference with
the honorable Senator, then, as is well known, the Secretary of
the Treasury, or finance minister of the Administration of President Hayes.

From the proceedings of that conference I shall

read a few remarks.

It will be borne in mind that the New

Y o r k press, in the interest of W a l l street gamblers and moneylenders, had raised a great alarm (which was purely


and manufactured for the occasionj because of the threatened
passage of the bill, and denounced Congress in unmeasured terms
for want of patriotism in attempting to impose such a measure
on the country.

Of course, they prophesied the most serious

consequences to result from the new legislation.
A t this conference with the then Secretary of the Treasury,
which was held on the 19th of March, 1878, there were present,
besides the Secretary, the following-named Senators:
MORRILL of Vermont (Chairman); Dawes of



Ferry of Michigan, JONES of Nevada, ALLISON of Iowa, B a y ard of Delaware, Kernan of New Y o r k , Wallace of Pennsylvania, and VOORHEES of Indiana.
The extract I shall read is as follows:
CHAIRMAN. W h a t effect has the silver bill had, or is likely to have u p o n
Secretary SHERMAN. I do n o t want to tread o n delicate ground in answering that question, Mr, Chairman. I shall have to confess that I have
been mistaken myself. N o w , as to the silver bill, I have watched its operations very closely. I think the silver bill has had some adverse effects, and
it has had s o m e favorable effects, on the question of resumption. Perhaps
the best wTay f o r me to proceed would be to state the adverse effects first. It
h a s undoubtedly stopped refunding operations. Since the agitation of the
silver question, I have not been able largely to sell bonds, although I have
made every effort to do so. * * *
N o w , another adverse effect the silver bill has had is to stop the accumulation of coin. Since the 1st of January we have accumulated n o coin, e x 785

cept for coin certificates, and except the balance of revenue over expenditure.
The revenues in coin being more than enough to pay the interest of the debt
and coin liabilities, we accumulate some coin.
Another effect that the silver bill has had is to cause the return of our
bonds f r o m Europe. Although the movement of our bonds in this direction
has been pretty steady for more than a year, yet it is latterly largely increased, how much I am not prepared to say.
On the other hand, I will give the favorable effects. In the first place, the
silver bill satisfied a strong public demand for bimetallic money, and that
demand is, no doubt, largely sectional. No doubt there is a difference of
opinion between the West and South and the East on this subject, but the
desire for remonetization of silver ivas almost universal. In a government
like ours it is always good to obey the popular current, and that has been
done, I think, by the passage of the silver bill. Resumption can be maintained,
more easily upon a double standard than upon a single standard. The bulky
character of silver would prevent payments in it, while gold, being more portable,
iv ould be more freely demanded, and I think resumption can be maintained
with a less amount of silver than of gold alone.
Senator BAYARD. YOU are speaking of resumption upon the basis of
silver, or of silver and gold?
Secretary SHERMAN. Yes, sir; I think it can be maintained better upon a
bimetallic, or alternative standard, than upon a single one, and with less accumulation of gold. In this way remonetization of silver would rather aid
resumption. The bonds that have been returned from Europe have been
readily absorbed—remarkably so. The recent returns in New Y o r k show
the amount of bonds absorbed in this country is at least a million and a quarter a day. W e have sold scarcely any from the Treasury since that time.
This shows the confidence of the people in our securities, and their rapid
absorption will tend to check the European scare.
Senator VOORHEES. That shows, Mr. Secretary, that this cry of alarmin New
York was unfounded. Then, this capital seeks our bonds when this bimetallic
basis is declared?
Secretary SHERMAN. Yes; many circumstances favor this. The demand
for bonds extends to the West and to the banks.
Senator JONES. Then, in its effect u p o n the return of the vast amount of
bonds you refer to, would there not bean element of strength added in favor
of resumption, in that the interest on these bonds returned would not be a
constant drain upon the country?
Secretary SHERMAN. Undoubtedly.
Senator JONES. Would the fact that they come back enable us to maintain
resumption much easier?
Secretary SHERMAN. Undoubtedly,
Senator BAYARD. YOU speak of resumption upon a bimetallic basis being
easier. Do you make that proposition irrespective of the readjustment of
the relative values of the two metals as we have declared them?
Secretary SHERMAN. I think so. Our mere right to pay in silver would
deter a great many people from presenting notes for redemption who would
readily do so if they could get the lighter and more portable coin in exchange. Besides, gold coin can be exported, while silver coin could not be exported, because its market value is less than its coin value.
Senator BAYARD. I understand that it works practically very well. So long
as the silver is less in value than the paper you will have no trouble in redeeming your paper. When a paper dollar is worth 98 cents nobody is going
to take it to the Treasury and get 92 cents in silver; but what are you to do
as your silver coin is minted? By the 1st of July next or the 1st of January
next you have eighteen or twenty millions of silver dollars which are in cir785

culation and payable for duties, and how long do you suppose this short
supply of silver and your control of it by your coinage will keep it equivalent to gold—when one is worth 10 cents less than the otherf
Secretary SHERMAN. Just so long as it can be used for anything that gold is
used for„ It will be worth in this country the par of gold until it becomes so
abundant and bulky that people tuill become tired of carrying it about; but in our
country that can be avoided by depositing it for coin-certificates.

For my part, Mr. President, I can not comprehend how the
distinguished Senator from Ohio can reconcile with the statements made on that occasion the idea that either the principal
or interest of bonds of the United States are now payable exclusively in gold.
There is but one rule known to the law for the interpretation of
written contracts, and that is by reference to their specific terms.
No impartial mind can read the bonds or the statutes of the
United States without perceiving that the bondholders have
never, by the terms of the bond or by the law, been entitled to
a compliance with their demands.

Even were it so, were they

to claim payment in gold, not on any technical ground, but on
the ground of equity, we quote them the maxim of the law.
" Those who demand equity should do equity."




W h a t , then, is the position of the bondholders from an equitable point of view?

In legislating regarding the national debt

have we trenched in any respect upon the fair repute of our
Government and upon those principles of probity and honorable
dealing so dear to our people?

Let us look at the actual facts.

Between 1862 and 1868 the United States Government sold
bonds to the amount of $2,049,975,700.

How much did the pur-

chasers pay to the Government for those bonds—these men in
whose behalf the legislative contribution box is made to pass
around at almost every session of Congress in order that some
new act or law more potent than those which have preceded
may now and again be dropped into it for the better support of
the bondholders?
The amount received by the Government for those bonds was
less thari $1,400,000,000, or, to be exact, $1,371,424,238—being, on
an average for the entire issue 67 per cent of their face value.
These bonds would have been honestly paid, if paid in lawful


money, no other money having been prescribed in the acts authorizing the issue, except that coin was prescribed for the payment
of the interest. T h e very fact that it was deemed proper to provide
that the interest should be payable in coin was a plain implication
that the principal was not to be so payable.

The maxim of law is

that the inclusion of one is the exclusion of the other.
However, on the clamorous insistanceof the creditors the people yielded so far as to declare in the " act to strengthen the
public c r e d i t " and in the refunding act that the principal also
should be paid in coin.
For this $1,400,000,000 received by the Government of the
United States there have already been paid back to the bondholders in principal alone $1,756,000,000—being
more than was altogether received.


Besides, there have been

paid as interest on the debt $2,538,000,000, or nearly twice the
total amount received.

There has been paid as a premium on

bonds bought in $58,000,000.

So that for the $1,400,000,000 re-

ceived there have been paid in all to the bondholders the 3um of

But the cupidity of those people is unbounded.

Let us now

look at the facts from another point of view, still bearing in mind
merely the equities, and not the technical interpretation of the

As I have shown earlier, the only value that money has

is purchasing power.

L e t us see what amount of purchasing

power has been paid to the creditors in return for the purchasing power which they paid to the Government when the bonds
were placed on the market?
Assuming that the people had paid the dollars constituting
the public debt at the same ratio of purchasing power that those
dollars possessed when paid over by the bondholders to the people—as stated by a member of another body—it would have required but 1,007,000,000 bushels of wheat to pay the entire

W e have already, as principal alone, paid to the bond-

holders the equivalent in money of 1,986,000,000 bushels of
wheat; we have paid as interest the equivalent in money of
2,974,000,000 bushels; and as premium 62,000,000bushels, makings
the total payment of principal, interest, and premium 5.022,000,785

000 bushels of wheat, or five times the purchasing power which
the people received from the bondholders.
Y e t after paying this enormous sum during the past quarter
of a century we have still the same number of bushels of wheat
to pay that would have paid the entire debt at the time it was
Again, had we paid the dollars of the debt at the same ratio
of purchasing power that the dollars had when we received them,
we could have paid the entire sum with 14,184,000 bales of cotton,
whereas we have already paid, of principal, interest, and premium to the holders of our bonds, the equivalent of 94,690,000
bales of cotton, and there still remains to be paid more cotton
than would have been sufficient at the time the debt was contracted to pay it all back.
It will be said that the prices of commodities, when the money
was borrowed, w e r e ' ' war " prices.

But whatever the prices were,

they were the same for the bondholder that they were for the
people, and dollars had at the time the same value, the same purchasing power, for the one as for the other.
Estimating the debt then as the amount of sacrifice with which
the bondholders parted, and measuring that sacrifice by bales
of cotton, the holders of bonds have been paid seven times over,
and we still owe them more cotton than the original quantity.
Nothing can more clearly show the enormous advantage which
falling prices bring to those who have money out at interest.
W h a t they want is not to get their money back, but to get the
things which money will buy, and when prices fall by reason of
the manipulation of the volume of the country's money in their
own behalf, by demonetizing one of the metals—which necessarily operates as a limitation on supply—they are simply engaged in a gigantic looting of the community under the name
of honor and honesty.
W h e n , under such circumstances, people speak of an investment in government bonds as a "speculation," they might very
correctly spell '' speculation " without the " s ".

The course pur-

sued by the bondholders—the public creditors—of the United
States would appear to indicate that they were the parties who


were in the mind of John Ruskin when he referred to " t h e
magnificence of authorized larceny and polished mendicity."




The lessening of the value of the money that is to be paid to
the creditor and bondholder is regarded by the advocates of the
gold standard as an unparalleled calamity—something which is
destined to uproot the very foundations of the Republic.


note is taken of the enormous increase in the burden of the debt—
an increase effected by the sinister machinations of those men,
first, through the mighty arm of the law, in changing the contract to their advantage after it was entered into, and, as if that
were not enough, then in effecting, again by law, the demonetization of one of the metals in which the debt was payable, in
order to increase the value of the other, and having exhausted
the powers of legislation, then through the powerful supplemental arm of the executive officers of the Government continued
the process of spoliation.
But, Mr. President, w-e understand that all this is done in the
name of honor and honesty.

The use of the word " h o n e s t " in

this connection has a tendency to bring it into the contempt of
the people.

They smile in derision when they hear it applied

to the bondholder's dollar—as the spectators in a theater smile
when they hear the Moor of Venice speak of '' Honest Iago."
hear constantly of justice to the public creditor.
ing of justice to the people.


We hear noth-

W h e n the interests of the bond-

holders are at stake the note of alarm is sounded by the officers
of our Government, and the noise and commotion are so great
that it would appear as if the pillars of the temple of our Constitution were falling.
The burden of the sacrifice which the people of this country
made during the war is not to be compared with that which they
have been enduring since by reason of the administration of their
money system.

The amazing productiveness of the country has

enabled them to pay off a large proportion of the war debt, though
not without suffering.

During the continuance of active hostili-

ties any hardship that might have been experienced was attributed to the war, and men felt that the country was engaged in a


struggle for its existence.

Even those who lost fathers, broth-

ers, and husbands in the conflict were sustained to some extent
by that exaltation of feeling that arises from patriotism.


in the later conflict, that which arose out of the monetary contraction following the war, no consolations of that character
were experienced.

Nothing but discouragement and distress.


The attempt of the American bondholder to get the word
" coin " erased from his contract, and to get written into its
place some word which would describe a coin that was always
getting dearer, is not the first attempt of the kind in history.
A similar attempt was made on behalf o

the French bondhold-

ers after the discoveries of California and Australia.

Gold was

then the metal that was becoming cheap money, and the French
bondholders took ready alarm at the prospect of the purchasing
power of their incomes being reduced by the inflow of the new

They found, as all bondholders find everywhere, ready

and pliant agents and advocates in the literary guilds.
Chevalier and those in accord with him made a demand for
the payment of the bonds of the French Government in silver.
Their cry was for honest money.

It is the same cry that we

hear now, and have heard for more than twenty years.

It was

a demand for a payment of the money that was becoming dearer.
For it appears that when money is becoming dearer it is honest
money, while if wheat and cotton become dear, which means that
money is becoming cheap, the wheat and cotton are dishonest
and fraudulent.
Chevalier demanded the payment of the bonds in silver.


order that the people might suppose that he had some ground
in reason for his demand he maintained that silver had always
been the money of France, and that when people bought the
bonds of the Government they supposed they were buying bonds
payable in silver—very much the same sort of argument that
has been used in the United States, except that in this country
the demand was for bonds payable in gold.
This ruse did not work, however. The officers of the Government refused compliance with the demand. They declined to


transfer to the creditor the option which the people of France
had reserved to themselves,

That they were right no man but

a bondholder could have the hardihood to deny.
Our modern Chevaliers have been more successful—chevaliers
of industry, whose only connection with industry is the laying
it under tribute, and exacting from it an unearned increment,
with the approval and through the instrumentality of our executive officers.




Suppose the owner of a great estate had entered into a contract by which he obligated himself to deliver certain quantities
of cereals—his option being to deliver either wheat or barley,
whichever, at the fulfillment of the contract, he might choose.
Suppose that his object in embodying the option in the contract
was to protect himself from a possible corner in one of the articles named—a corner which might be effected by the machinations of speculators in cereals.

Suppose that, as matter of

fact, when the time of delivery arrived there was a corner in
wheat which, as a consequence, was held at an exorbitant price.
W o u l d anybody suppose that in such case, an agent even had
he a full power of attorney to act for his principal, would be justified in saying to the creditor, " A l t h o u g h , in the making of this
contract, my principal reserved to himself, as a protection against
wrongful exaction, an option to deliver either wheat or barley,
whichever might be most just upon the day when the contract
was filled, yet you are an 'honest' man, and of course whatever advice you would give me would be ' honest' advice, and
whatever money you would wish to be paid would be ' honest1

Therefore, I will interpret this contract in such way

as shall be suitable to honest men like you.

If, instead of ac-

cepting delivery in barley, which is not cornered, and which is

4 dishonest,'

you prefer wheat, which is cornered by

honest men like yourself, I will transfer to you the option
which my principal reserved to himself, and if you wish me to
deliver wheat, I shall do so, even if I have to pay out of the funds
of my principal the exorbitant and extortionate price which
the honest managers of the corner in wheat have decreed."


W h a t , I may ask, would he thought of the " honesty " of such
an agent?

And especially what would be thought of his honesty

when it was as plain as day that the creditor was himself a member of the gang that had cornered the wheat market.
It has often been said, Mr. President, that Americans are nothing, if not original.

This method of dealing in options is cer-

tainly original, even in America.

No similar example is to be

found in the history of any civilized government, and I venture
to say that the officers of no government on earth will ever follow the example of those of the United States in a matter of this


Had the Congress of the United States been willing to make
special provision for the payment of the public creditors in gold,
many years after the making of the contract, thus establishing
a distinction between them and the body of our citizens, including the workingmen and all who were not owners of bonds, we
should not have been summoned here in extraordinary session
to enter upon a discussion of this subject.

The silver question

would have long since disappeared from public view.
W h e n the silver-purchase law of 1878 was before the Senate
for consideration, one of the gold standard Senators offered an
amendment providing that standard silver dollars " s h a l l be a
legal tender at their nominal value for ail debts and dues, public and private, except duties on imports and interest on the public debt."
The intention of this was to give to the creditors a special
dollar, and to discriminate in their favor against everybody
else, to give them an " h o n e s t " dollar and the working-man
what Senators themselves called a " d i s h o n e s t " dollar.


that amendment been accepted by those who favored free coinage
of silver, the silver question would then and there have been
settled, and we should have had free coinage at once.

This is

the sort of regard that the advocates of the gold standard had
for the interests of the workingmen of the country, whose special friends and champions they now pretend to be.

Had the

bondholders been able to secure for themselves a gold dollar
which was constantly increasing in value, they and their friends


were willing that the workingmen should have any other kind
of dollar that they pleased.

W h e r e , then, were to he found

the advocates of the dollar of " h i g h e s t purchasing power " for
the workingmen of the country?

W e heard nothing from the

New Y o r k press denouncing a provision that would have paid
the workingman in " c h e a p dollars" and " d o l l a r s of low purchasing power," while giving to the bondholder a dollar not
only of high purchasing power, but a purchasing power constantly growing higher.
[ A t this point the honorable Senator yielded to Mr. TELLER.]
Tuesday, October
Mr. JONES of Nevada.


Mr. President, we are told that with

unrestricted coinage of silver, or with continued purchases of
silver under the Sherman law, the gold in the country would
g o to a premium.

Let us examine that question.






In the first place I challenge Senators to point to a period in
the history of any country when gold went to a premium while
any considerable quantity of it remained in that country.
certain circumstances it might be sent out.


So long, however,

as it remained it would never reach a premium until the total
amount of all forms of money in circulation was more than sufficient to meet all monetary demands at the international range
of prices.
There must be a reason for the separation of the metals and
for the happening of a premium on gold.

The metals have no

will of their own to separate or to coalesce when they please.
Neither can the gold holders make a premium at their pleasure.
If they could do so we should find gold constantly at a premium.
A premium must be made by conditions.
those conditions?

W h a t is it that creates

The range of prices of goods that form the

subject of international commerce.

T o the extent that we pur-

chase of those goods in excess of the sales of our own products
to the people of the gold-using countries, we create a necessity
for the outward shipment of gold in payment of balances.
Suppose the holders of our $600,000,000 of gold decided to-day


to put a premium of 1 per cent or of 10 per cent on gold.
they do it?


Do we not know that if they could get a premium

by merely demanding it they would promptly demand it?


difficulty is that the conditions on which alone a premium can
be created do not exist, and in the absence of the appropriate
conditions no one will give them a premium, no matter how
strenuously they insist upon it.




W h e n the number of dollars in a country is from any cause
reduced, there is a tendency to a fall in the prices of commodities.

If then a man be engaged in productive operations in this

country, and if by reason of the outward flow of gold to meet
foreign payments a fall takes place in the prices of the products
of his labor, compelling him to accept less for those products
than he otherwise would receive, he suffers a loss which, though
not called a " p r e m i u m , " is in tenor and effect a premium on

So far as he is concerned, he is so much the poorer by

reason of the outflow of the money of the country.
W h y quibble about names?

In order that a payment may be

entitled to be called a " p r e m i u m , " and to involve the serious
consequences attributed to a premium, is it necessary that it
shall be paid by a particular person?

If a farmer, planter, or

manufacturer in this country is compelled to pay $100 through
the medium of products, the prices of which have been to that
extent reduced owing to the maintenance of the gold standard,
what but the mere name is the difference between that man's
payment and the payment of the banker or broker who disburses
$100 as a difference in exchange and on his books enters the
amount as a " p r e m i u m ? "

If an American farmer, hatter, or

shoemaker has to sfive more of the products of his labor for gold,
what divinity doth

hedge around

the American banker or

broker which entitles him to call his occasional payment a
" premium," while the constant and persistent payments of the
producers are called a mere " fall in p r i c e ? "
If farm products fall 10 per cent by reason of the sending out
of gold, if the product of the shoemaker's labor is similarly reduced, as well as that of men engaged in all other industries, is
not that 10 per cent a premium on gold? And if not, does it differ


in anything but the name?

Being a loss caused by the gold

standard, does it not have all the effect of a premium?
not in nature and substance a premium?

Is it

Y e t the importer says,

and our financiers and statesmen all unite in saying, that so long
as it is the producer who is suffering the loss everything is all
right, and that it is only when it becomes the turn of the importer or the money-broker to pay that " t h e times are out of

So long as the producing classes do the paying it at-

tracts no attention, but as soon as the broker or importer has
to pay a great wail is heard.
W h e n gold alone, or a money based on gold, is the circulating
medium of a country, a contract calling for the payment of
$1,000 on the spot would on its face seem to be the same as a contract calling for the payment of $1,000 at a future time, because
the sum being in each case the same and payable in the same
form of money, there would seem to be no premium involved.
If, however, men are obliged to give more of their products for
it in the one case than in the other, are they not to all intents
and purposes paying a premium on gold?

Is it any less a pre-

mium because the true character of the transaction is not detected?

Values being always stated in terms of money, never in

terms of commodites, it is not easy for the uninitiated to detect
variations in the value of the circulating medium itself.
Anything that is measured by itself alone can never present
an appearance of change.

No matter, therefore, how great a

departure may be made by gold from its value at any former period, such departure is never denominated a change in the value
of gold, but always a change in the prices of commodities.

It is

thus that even the everyday phases of industry and commerce
are calculated to conceal the evil which the gold standard inflicts upon society, and afford to interested casuists and sophists,
as well as to superficial thinkers upon money, to so-called statisticians and would-be philosophers and economists an opportunity much improved by them of disputing as to the true nature
of the change that has taken place.
The masses of the people take no note of changes in the value
of money, but the banking and creditor interests are keen to
observe all such changes.

W h e n e v e r a variation of value ap-


pears between two forms of money, they select the form which
commands the greatest amount of property, and loudly proclaim that to be the " b e s t " money and the only " h o n e s t "
money, while the other form, which may have retained its value
unimpaired, and therefore be an exactly just and equitable measure of value, is derided as " cheap " and dishonest money.


gold-standard advocates never speak of any advance in the value
of the dearer metal.

By them the change is always made to ap-

pear as a decline in the value of the other metal, which may in
fact have suffered no decline.


It is supposed to be decisive of the question to inquire how, if
we have not the gold standard, we can pay our debts to foreigners?

Let us examine this point.

A n American importer buys

goods in Great Britain or Germany to be sold here for his profit,
and his alone.
his bill?

The query is: How is he to get the gold to pay

I reply to the question by asking another.

means does he pay bills in his own country?
chant obtain money?

By what

How does any mer-

By sales of merchandise.

Very well.

Let, then, the American importer sell merchandise for gold
with which to pay his gold indebtedness.

He bought in gold-

standard countries the goods which require to be paid for in gold.
Let him sell in those countries for gold the goods from sales of
which to pay his bill.

Gold is to be bought for commodities in

every gold-standard country of the world.

If the range of prices

in those countries is such that he can not make a profit on the
transaction, that is his misfortune, and is not one for which the
American people at large are responsible; or by reason of which
they should be mulcted in sums infinitely larger than any possible premium that could be involved in the transactions of a few
A l l the internal commerce of this country, which is fifty times
greater in amount than our foreign trade, should not be disjointed by reason of the necessity which exists for a few men
to pay their debts abroad.

Is it a greater act of justice to facil-

itate the payment of an importer's foreign bill at the expense of
all the people of the United States than to maintain equity and
justice in the payment of all debts and the payments for all com785


modities and services interchanged among the 70,000,000 people
of our country?

Must we forever continue to inflict wrong and in-

justice upon all our producing classes—upon ninty-nine one-hundredths of our people—simply to save an occasional importer or
foreign business house some inconvenience?—for, in any case, it
could be nothing more than an inconvenience; it could under no
circumstances result in a loss to any importer to have to pay a
Suppose a failure of the crops to occur in Europe and an abundant harvest in this country.

There will be a consequent boom

Numbers of contracts will be made on a high range of


Then this country becomes a poor country to buy in, be-

cause prices are high, but for the same reason it becomes a good
country to sell in.

Other countries at such a time will be poor

countries to sell in because prices there are low, and they will
for the same reason be good countries to buy in.
On such occasions our importers strain every nerve to buy to
the utmost.

Having, therefore, large payments to make to for-

eign countries, they find that owing to the low prices prevailing
abroad they are unable to send out our wheat or cotton to advantage.

Hence they gather up the money of the country and

send it away.
Instead of assuming the responsibility for the exercise of bad
judgment or overweening cupidity on their part in making
more purchases than the country makes sales, they make everybody in the country suffer—those who have not had anything
whatever to do with foreign goods as well as those whose
business it is to deal in such goods.

A s everybody knows, the

number of persons who deal in foreign goods is utterly insignificant compared with the enormous number who deal in domestic articles.
The premium which in any event the importers would pay is
a bagatelle in comparison with the unseen and unobserved premium which for many years has been paid by the toiling millions.

Money is bought by every man with the products of his


T h e masses of the people are not digging gold out of the


T h e gold they dig is the amount that can be bought by

their labor exerted in fields of wheat and cotton, in seams of iron


and coal, and in the city shops, foundries, and factories.


amount of money which the products of such labor will command
is therefore the measure of the value of gold.
W i t h the present system all the people of this country are
made to pay a premium on gold in order that a few importers
may be saved some imaginary inconvenience in the payment of
A n adverse balance of trade whereby $100,000,000 of the money
of the country might be shipped out, would so reduce the debtpaying power of the people and the prices of the commodities
with which, in the last analysis they must pay the debt, as to
make it a calamity of great proportions in comparison with any
inconvenience to which importers might be subjected in paying
their foreign balances.
In order that such a transaction may result in great loss to the
masses of our people, it is not necessary for a panic to occur.
T h e loss could be gradual, but great.
In one case, only the men who bought abroad would be subjected to inconvenience—and it would be inconvenience merely;
for, as I have said, they would in no case be subjected to loss.
In the other, every man in the United States who owes a debt
would be put not merely to inconvenience but to loss.
It is the most monstrous of ideas that because a few men can
make a profit by sending out the money of the country all the
industries of the country must be disarranged.

In an age of en-

lightened civilization nothing seems more absurd and unjust.
It is natural and proper that some difficulty should be experienced in transmuting the money of one country into the money of
If people in one country wish to buy in other countries more
than can be sold from their own country, they are warned by the
state of the exchanges that the balance is against them.


ing as the balance becomes more and more against them those who
persist in buying should personally suffer* the inconvenience.
The people of the entire country, who have nothing to do with
importations, should not be compelled to suffer.
Whenever that which may be termed international money has
its normal value, it is at the par of exchange.

W h e n it becomes


unprofitable to ship products, and the demand for money f o r
shipment becomes excessive, so that a premium arises, the persons who should pay the premium are the importers—those who,
for their own profit, import into the country more than the
exports of the country can pay for.
The people of the whole country who are conducting a business

times as larg-e as the entire importing business, and under

our system of credits involving themselves in debt to enormous
amounts, should not be compelled to pay a premium upon every
dollar of their domestic debts simply to suit the convenience of
a few importers.

Any balance of trade which can possibly be

against us must always be infinitesimal, compared with the enormous amount of domestic debts that are constantly being paid by
our own people.

If we had an ample supply of silver money for

the transaction of our own business all that we could need of gold
would be such sum as would meet any adverse balance.
P r o f . Stanley Jevons, one of the most renowned of the financial economists of Great Britain, in a paper read before the
American Social Science Association in Saratoga, in 1877, said:
Gold is not really requisite except for making - international payments,
and the stock need not be very much larger than will meet any conceivable
demand for exportation.

I call the special attention of those who have a horror of the
silver standard to a remark of the London Times, which with
them ought to be the first of authorities, in discussing the very
bill which it is now proposed to repeal.

In an editorial on the

so-called Sherman law, the Times of September 1, 1890, said:
Under a silver standard a rich country can keep as large a stock of gold as
it requires for all purposes, without any difficulty whatever.

W h e n the United States resumed specie payments a small gold
stock proved sufficient for the purpose.

Y e t now, with $600,-

000,000 of gold in the country, Senators fear a premium on it!

do foreign nations which

They exchange goods for it.

have no mines g e t g o l d ?

SO the importers who would need

gold to pay for goods imported should get the gold by the sale
of their goods.

They would not need much to settle balances,

and they could get it at but slight extra cost.

Indeed, it would

be better for the United States if gold were always at a slight
premium, because then the silver money would remain in the


country and would not flow out, to the disarrangement of all
prices and all equities here.
Contracts made in any country are made on the basis of the
range of prices at the time prevailing in that country.

If after-

ward the money supply of that country be diminished relatively
to demand, whether such diminution be owing tononproduction
of the metals from the mines, to their consumption in the arts,
to increase of population and demand for money, or to exportation of gold in payment for imported goods, can anybody doubt
that the fall of prices sure to result from such diminution is
practically a premium on gold and paid by the producing classes?
There is no possibility of a permanent premium upon gold here
except when enough of other money has come into circulation
to put our prices above the international range.

That is to

say, having $1,600,000,000 of money in this country, of which,
say, $1,000,000,000 is other than gold, but of full legal-tender
power, if the gold all left the country, or went out of circulation
(which it would do if it went to a premium), there would have to
be $600,000,000 of some sort of money added to the $1,000,000,000
before we could reach the gold range of prices.
$600,000,000 to come from?

W h e r e is that

Is it possible that with only $1,000,-

000,000 of money, which is $600,000,000 less than our present
stock, there could be an increase of prices?

W o u l d there not,

on the contrary, be a fall, and would it not be silver rather
than gold that would be at a premium as measured in the products
of labor?

Is it possible that $1,000,000,000 of silver alone is capa-

ble of elevating prices beyond the level to which they can be elevated by $1,000,000,r )0 of silver and paper plus $600,000,000 in

That is contrary to every principle of political economy

and of common sense.
Only a certain range of prices is consistent with the international range.

Should our prices rise beyond that gold would

begin to flow out, though not to the extent of our whole foreign
trade; only to the extent of balances against us.
In any case there could not be a permanent premium upon
gold until what may be termed a corresponding degree of permanent " p r e m i u m " had arisen on commodities, property, and
services—the things which it is the function of money to dis-


If in comparison with gold prices all men should get

higher prices for

their commodities and services, in other

words, if their commodities and services were at a " p r e m i u m , "
how should they be harmed by a premium on gold?
It is a contradiction of terms to say that we could have a premium upon gold and at the same time a decline in the prices of
goods and of labor.
Had we to pay a premium, or increase of price, in silver for
gold over what we might have previously paid for it, it would be
because we had first received a corresponding premium, or increase of price, in silver for the products or services with which
we might buy gold.

In any event, we would have to buy the

gold, since all men who need gold, except actual miners of the
metal, can get it only by selling their labor or products for it.
Should gold g o to a premium, and we could show that the
silver money of the country had not fallen, but measured equitably all property and services, who would be at any disadvantage, except people who make a business of gambling in gold,
and who can not complain when the game goes against them?
If gold goes to a premium of 10 per cent, that means that it
will buy 10 per cent more of goods internationally dealt in than
can be bought with silver o r other money.

But if a man has to

pay 10 per cent for gold, does he not get 10 per cent more in the
other money for his goods and services?
fore preserved among our people?

Is not equity there-

W h a t greater end can be de-

sired than equity?
Even as to our foreign trade, were there a premium of 10 per
cent on gold, and Liverpool merchants bought from us wheat,
cotton, or anything else, they would have to pay us either the
Liverpool price in gold or the American price in silver, which
latter, in case there were a premium of 10 per cent on gold,
would mean 10 per cent over the gold price.
Gold might g o to a premium of 1 or 2 per cent, and yet if interest were high and business active in this country, that metal
might not leave, because the percentage of interest obtained by
loaning gold or investing it in this country might be so much
more than the percentage of profit derived from gold if sent


abroad that it would be more profitable for its owners to keep
it here.
Gold is frequently at a premium without the fact attracting
attention, because the term " p r e m i u m " is carefully avoided
in designating the transaction,

There is frequently, as a result

of the differences in what is called exchange, a small payment
required on gold beyond the cost of shipping it.

W h a t is that

but a premium?
So, when in England gold becomes scarce and the bank rate
goes up, the increased rate is called a " rise in the rate of discount."

It is really a premium upon gold.

Suppose the bank rate to be ordinarily and normally 3 per cent,
and that in case of emergency or difficulty it rises to 6.


in reality is this extra 3 par cent but a premium of 3 per cent on

W h e n the bank rate is thus raised, it is not because the

borrower is able to make 3 per cent more profit on the money
that he borrowed, or can afford to borrow it at that price.
The fact is that the reason why he has to borrow is that he finds
it impossible to make even ordinary profit, or indeed to do business at any profit that will enable him to provide for his moneyed engagements.
It is not a case in which money at that time will buy more than
before, or more than usual.

The borrowers do not take it

with a view to buying anything, but solely with the view of
me ting imperative obligations, entered into when normal conditions prevailed.
Let us suppose the domestic indebtedness of our people to one
another to be $30,000,000,000, while our gold stock is only $600,000,000.

If a premium of 10 percent should take place on gold—

that is to say, if it alone, and of itself, without reference to the
other money of the country should advance 10 per cent in value,
it would at the utmost be an advance of only 10 per cent on
$600,000,000; whereas, while we are on the gold standard, a corresponding fall in the prices of commodities consequent on the
increasing purchasing power of the gold dollar would involve,
t o our domestic debtors alone, a total loss of 10 per cent on the
$30,000,000,000 of their debts, or such proportion of them as were
in existence during the whole period of this 10 per cent fall.


The true name for this fall of prices and for this enormous loss
to the people is a " p r e m i u m on g o l d . "

In comparison with this

unrecognized and undesignated premium the thing


called a premium is hut an insignificant trifle, even were it a
loss, and it could not he a loss so long as our silver money justly
measured all equities.
W h o pretends to say that under the Sherman law the dollar
is worth less to-day than it was when the first dollar was issued?
W h o contends that during the operation of that law there has
been any general advance in prices of commodities?


pretends to say that before the late panic occurred the monthly
issues of Treasury notes under the Sherman law had produced
an inflation of our currency?

W h o denies that the value of the

dollar from month to month was rising and not falling?


then, is the evil to be remedied by stopping the issue of Treasury
notes under that law?
It is seen that the increasing population of

the country

and the increasing demand for money are not sufficiently met
by the 4,500,000 ounces purchased each month.

It is seen that

the dollar is all the time becoming more valuable.

W h a t , then,

is it against which those who so vehemently demand the repeal
of the purchasing clause of the Sherman law wish to defend the

Surely not an inflation; for prices of commodities con-

tinued to fall from 1890, when the bill was passed, until the time
the panic broke out.

This was shown by the exhaustive examina-

tion of the Finance Committee of the Senate.
How can repeal redress the situation in this country?


are falling and were falling at the time the panic broke out.
There was not money enough to maintain them at a firm o r
equitable range.
that indicates

For, as I have said, price is the barometer
whether equities are being maintained and

whether times are good or bad; yet with prices falling, our goldstandard economists tell us that we must cut off the money that
has hitherto been furnished, notwithstanding that it is admitted
by the champions of the gold standard that almost the entire
yield of the gold fields is consumed in the arts- and manufactures and little or none left for the money use.


Mr. M c P H E R S O N .


I do not wish to interrupt the Senator's

speech at all; hut I simply wish to make an inquiry.

T h e com-

mittee to which the Senator refers in making their investigation
and report did report that the prices of commodities had fallen.
A t the same time the report states that the price of wages had

How does the Senator account for that?

Mr. JONES of Nevada.

On several occasions of late when I

have had the floor in this debate I have stated that the wageearner is not a commodity; not a dead piece of property.


many years ago the wage-earners began to organize in this country, at a time when they were getting by no means their fair
share of that which they contributed to the joint product of capital and labor.

All over the United States they organized into

compact masses, as they previously had done in England, and
kept constantly increasing their demand upon the employers for
more wages.
In the manner in which business is conducted in these latter
years it is necessary to employ great numbers of workmen;
hence contracts covering long periods of time must be entered
into, and such contracts frequently contain clauses involving
heavy forfeitures or penalties for failure of prompt performance.
This fact compels employers to beware of serious difficulties with
their working force.

They know that a general strike might

involve them in enormous loss.

The official reports of strikes

show that in many instances where employers have conceded
an increase of, say, 10 per cent demanded by the workmen,
the increase was followed by a dismissal from employment of
10 per cent of the workers.

If this were true generally it would

mean that wages as a whole were no greater than before.
They only appear to be increased because the men retained in
employment receive more than before.

It would be better for

society as a whole and far better for the working classes themselves if all were retained in uninterrupted employment, even
without increase of wages, than that some should have their
wages increased, while others receive nothing and are left to
In order to show that wages have really increased, the returns


should also show that the number of men employed continued
to be as great as before.

Otherwise the laboring class as a whole

receive no more money as wages.
Given a certain number of men employed at, for ease of computation, say, a dollar a day.

They demand a dollar and ten

T h e employers, with heavy contracts on hand, know not

how to resist that demand.

They yield.

In a few weeks they

discharge 10 per cent of their employes; and against this decree
the men have no recourse.

The reduction of force is made up

in the shop by a resort to all sorts of small economies.


per cent of the men formerly employed are sent into compulsory idleness.

Their labor is lost to society, and themselves and

their families are brought to penury.

Y e t no note is taken of

So long as the men in actual employment are paid the

customary, or even increased wages, it is taken for granted that
all is well.

No census of the unemployed is taken.

T h e Senator from New Jersey knows that within tenor fifteen
years large numbers of business establishments have been concentrated under one management.

A thousand and one methods

of decreasing expenditures have been resorted to.

The work-

men have been constantly striking for more wages with great
power and with great intelligence.

The employers, not always

able, owing to the fall of prices, to meet that demand, have yielded
in one direction only to recoup themselves in another.
But now the maximum has been reached.

It must be borne

in mind that effect does not immediately follow cause in questions of this character.

A stone thrown into the harbor of New

Y o r k is certain to result in a rise of the level of the water at
Liverpool; but the effect is by no means immediate.
Mr. M c P H E R S O N .

The Senator, I think, certainly will ad-

mit that for the last fifteen or twenty years there has been a
gradual and persistent rise in the wages of labor.

He has al-

ready stated in his speech a number of times that there has been
a great depression and a great fall in the prices of commodities.
Now, commodities are things that labor makes; the commodities
are the things that labor consumes.

W i t h an increase in the

price of labor, with the lowering of the price of commodities


which labor consumes, I do not understand how the Senator can
measure the money of the country by the price of commodities.
Mr. JONES of Nevada.

The Senator from New Jersey starts

out with the proposition that laborers were getting the wages
they were fairly entitled to, considering the volume of money in
circulation in the country; but this was manifestly not so.
are looking more sharply after their interests.


Until the great

organizations arose business was conducted more loosely.
Mr. M c P H E R S O N .

It has been increasing every day.

Mr. JONES of Nevada.

T h e workers have been constantly

increasing their demand, and the employers have had to yield.
NOW5 however, millions of laborers are out of employment.


is the statement of every business man that for the past twenty
years business in this country has been conducted at practically
no profit.

Previous to that time the same businesses were con-

ducted at large profits.

This condition is not peculiar to the

United States, but is a characteristic of all gold-standard countries.
Mr. T E L L E R .

W i l l the Senator from Nevada allow me to

read a very brief extract from an English newspaper?
Mr. JONES of Nevada.
Mr. T E L L E R .


It is as follows:

Never was there such an industrial war in England; never was there such
destitution, and never such a mass of inflammable discontent in the veryheart and center of the land. Relief committees and soup kitchens are unceasingly at work throughout the strike areas. Bread is distributed and
fought for by famishing men and women, and gardens and orchards robbed
in the frantic search for food. Hungry children attend the schools too weak
to learn, and women tramp f r o m village to village begging for money or

That is from the London Daily News of September 7, 1893.
Mr. JONES of Nevada.

Mr. President, that is the way the

condition of the laboring man has been " improved." I saw great
numbers of the unemployed on the hills about London—people
who were starving; yet we are told wages have been advancing
for years!

T h e gentlemen who compile statistics take

note of the unemployed.


I deny, whatever they may say to the

contrary, that, taking wages, for instance, all over the W e s t and
South, they have been increasing for fifteen years.
Mr. G E O R G E .

They have fallen.


Mr. JONES of Nevada.

Counting the numbers of men dis-

charged from employment owing to the persistent fall of prices,
it is my conviction that, on the whole, wages have fallen rather
than risen.
Mr. M c P H E R S O N .

If the Senator will bear with me a sin-

gle moment longer, I will state that a subcommittee of the Committee on Finance, a very intelligent committee, pursued an investigation for several months here in 1891 after the passage of
the so-called McKinley law to ascertain what the effect of the
M c K i n l e y law had been upon prices.

It was argued by the

friends of the McKinley law that inasmuch as we had raised
the duty upon foreign products thereby we would increase the
wages of labor in the domestic products, and that was the reason
why wages had raised in this country.

Now, I simply invite the

attention of any Senator to that report to the effect that in the
gainful institutions where labor was employed there has been
more increase in the wages of labor among those industries that
were not protected at all.

In agriculture?

Mr. M c P H E R S O N .

In agriculture and everything else.


speak of wasres as compared with the cost of living.

The Senator is wrong as to the South.

Mr. M c P H E R S O N .

Of course when you speak of wages of la-

bor you speak of it as compared with the cost of living to the
Mr. P A S C O .

If the Senator from Nevada will allow me, I

will state that in the speech which I delivered on the 27th of last
month I showed clearly the situation in the section of the country
where I lived, an agricultural section, a cotton-raising section.
I stated, and it is susceptible of proof, that the wage-earners
there have shared the fate of the cotton-planter, and that their
wages have been reduced relatively and actually.

My belief is

that a like result has followed in similar sections of the country
where cotton-raising is the principal industry, as will be borne
out by the Senators from those sections.
Mr. JONES of Nevada.
about it.

Mr. President, there can be no doubt

A n interested body of statisticians, most of whom do

nothing but tabulate their own ignorance and air their own


egotism, are engaged in attempting to bolster up the gold standard and make their figures and their conclusions correspond
with all the claims that are made by the advocates of that
standard, whatever the real facts may be.

Of course, there are

conspicuous and honorable exceptions, but it is certain that none
of them take account of idle labor.

There can b3 no doubt in

the mind of any observant man that there has been a fall of
w ges of unskilled labor in such parts of the country as are not
in close proximity to great manufacturing centers, where labor
could combine to keep wages up.

It is absolutely inevitable, while prices are falling, that men
should be relegated to idleness.

W h e n it becomes apparent

that the employer of labor is bound to lose money, it is only a
question of time when the laborer must lose his employment—
not merely suffer the loss of a part of his wages, but all his

Things must ultimately accommodate themselves to the

volume of money.

W h a t happened during the recent panic was

simply that not only the wages of labor but the prices of property commenced to adjust themselves to the volume of money
in the country.

They had both by every conceivable means

been held above the range naturally consistent with that volume: and at last the law of supply and demand, in the relation
between money and commodities, asserted itself. It is sought to
divert attention from the true source of the difficulty by the assertion that the people had some fears as to the kind of money
they were going to get.
There never was a more monstrous perversion of the truth.


do not believe that a man can be found in the United States who
will say, so far as he is concerned, the panic had its genesis in
any such cause.

W h a t he feared was that the institutions in

which his money was deposited did not have it to pay him back
on demand.

The demand was not for gold, but for silver, or

silver certificates, or any other character of legal-tender money.
Mr. M c P H E R S O N .

I understand the Senator to contend that

it is not the kind of money, but the volume of money which determines and fixes the unit of value.
Mr. JONES of Nevada.


Undoubtedly; nobody who has inves-


tigated the subject of the value of money will deny that proposition.
Mr. M c P H E R S O N .

If the Senator will bear with me a single

moment longer, the fear the people of the country had was t h a t
there was a disposition to impose the free coinage of silver, uncertain in amount and quantity; that if whatever there was of quantity to-day in the world that would come from the mines to our
mints was all to be coined into dollars, the result would be that
the volume of that kind of money which was not on a par with
good money, as the world understood i t , would disarrange values
or there would have to be a general readjustment of the values of
Mr. JONES of Nevada.

In answer to the Senator from New

Jersey, I can say that neither immediately before nor during
the recent troubles was there a word said about free coinage..
That question was not under discussion.

The only silver ques-

tion that could at all have entered into the minds of the people,
if any did, was whether we could go on supplying this limited
quantity of money to the people of this country.

The question

of free coinage, as everbody knew, was settled for such time at
least as the present Executive held his position.

There was

therefore not the slightest fear of the unrestricted coinage of

Hence all that the Senator says about the enormous in-

crease to be expected or feared in the amount of money by reason of free coinage falls to the ground.
Mr. M c P H E R S O N .

I draw no distinction between free coin-

age and the operation of the Sherman law, except as to the quantity.

The Sherman law would bring us to a silver basis with

the same certainty, but not so rapidly.
Mr. JONES of Nevada.

I have shown that the quantity of

money paid out under the Sherman law was not even sufficient
to maintain the range of prices—and prices are of the essence of
the question.

The unit of money should be kept at a parity

with the units of property and commodities.

T h e producing

masses of this country want a dollar that shall remain at something like parity with the pound of cotton, with the bushel of
wheat, and with all other products of labor—not a dollar that
shall be at parity with a metal which is constantly increasing in


value to the unjust advantage of the bondholders and the moneylenders of the world.

Our demand is a demand for equity and

W e say it is not necessary that our money should keep

at a parity with gold if only it will keep at a parity with justice.
If keeping it at a parity with gold, which is a unit of chance,
and which has been constantly increasing in value, is inconsistent with justice, then, I say, let gold go.

If we have to take

our choice between a gold standard and a standard of justice, we
insist upon the standard of justice.
sey takes the gold standard.

The Senator from New Jer-

W e are willing to go before the

people on that proposition.
Mr. M c P H E R S O N .

That is the standard of justice.

Mr. JONES of Nevada.

The Senator says it is the standard of

justice, yet it is everywhere admitted that gold has been con.
stantly rising in value for twenty years, effecting a constant looting of the debtor in the interest of the creditor.

Is it not ex-

traordinary that we have never heard any complaint about a
rise in the value of the money unit, but whenever there is a fear
or suggestion of a fall in the value all hands are up?

That is

deemed a dreadful misfortune to the world; yet a rise in the
value of money means the making of the rich unjustly richer
and the poor unjustly poorer.
I will now resume the consideration of the question of a gold
premium at the point at which I was interrupted.
Suppose a war to be imminent in Europe, and that Russia, in
order to increase her war fund, should offer a premium of 5 per
cent for gold, which is not an absurd supposition by any means;
and suppose the other gold-standard nations of Europe, in order
to attract to themselves the supply of gold, should make an offer
of 10 per cent premium, which would be better than Russia's 5—
does it follow that all the people of the United States who owe
money should permit themselves to be mulcted in 10 per cent
upon every dollar of their debt, so that the dollar to be paid by
them to their creditors shall require from the debtors 10 per
cent more sacrifice than the dollar which was agreed to be paid
and agreed to be accepted?

Yet, that is precisely what will hap-

pen so long as we maintain a system of what may be called international money.


Mr. M c P H E R S O N .

If the Senator will allow me, I want to

get at the exact facts that he is contending for.

It seems to me

that if gold had appreciated interest would have gone up; it
seems to me if gold had appreciated labor would have gone
down, as the inevitable consequence of his contention.


in the past ten or fifteen years we have seen the bonds of the
United States, which we will consider a perfectly safe and not a
speculative security, g o down from 5 p e r c e n t to 2, the bonds bei n g floated to-day at 2 per cent.
Now, as to the labor question I contend that labor ha;S gone up
for the past ten or fifteen years in a regularly increasing ratio.
If in most of the countries that employ labor, large countries
like England, the United States, Germany, and other countries,
labor is paid an increased price year after year, I can not understand how those countries, being upon a gold basis, can stand that
condition of things with the appreciated value of gold.
Mr. JONES of Nevada.

I will say to the Senator that within

the past few days I have more than once gone over that entire

T h e proposition which the Senator makes is one of

the most startling proofs of the disingenuousness of the statistics that attempt to show us the effect of improved processes
and other alleged causes for the fall of prices.

I think I demon-

strated to the satisfaction of every Senator who listened to me
that one of the most irrefragable proofs of an increase in the
value of the monetary unit is a decline in the rates of interest.
If money is increasing in purchasing power, if it is increasing
in its command over land and over the products of labor—in
other words, if prices are falling—who wants to enter business?
Men prefer to wait until bottom prices have been reached.


man who puts up a factory when prices are falling finds that in
two or three years his rival can put up one exactly similar for 10
or 15 per cent less money.
Hence, I say that when prices are falling money congests in
the centers, because its owners are not willing to risk it in legitimate business.

A keen competition, therefore, arises for first-

class securities.

This competition is incontestable proof of the

.advance in the value of money.


W h y , in a new country like this, should interest fall?


can not money be used as profitably now as at any period of our
Is not the field wide here for industrial enterprises?
country finished?

Is the

Has it reached the fullness of its develop-

Had we a proper monetary system, could not a thousand,

yes, ten thousand, enterprises be entered upon with advantage
alike to projectors and workingmen?
Sir, everybody wishes to keep that which is going up and to
refrain from investing in that which is going down.


prices are falling money is going up and all forms of property
going down.

This is why money accumulates in the centers,

and why the competition for gilt-edged securities increases.


better evidence is needed of the advance of value in gold than
the decrease of interest.

W h i l e dollars are increasing in value

men find it impossible to pay the old rate of interest and at the
same time a constantly increasing value in the dollars constituting the principal.

And it will be observed that during the

last twenty years, as I have said, there is a remarkable coincidence between the ratio of the decrease in the rates of interest and that of the increase in the value of the money unit—a
coincidence wholly inexplicable on any other hypothesis than
that I have stated.
The instinct of thrift on the part of all mankind is to avoid
that which is falling and to hold on to that which is rising in

Hence the 4 per cent bonds rose from par to 127.

is a bond?


Nothing but an obligation to deliver money in the

During a period of falling prices capitalists want to be

long on money, not long on property.
want to be long on business.

A t such times men do not

W h e n business is declining, the

value, that "is, the purchasing power, of the dollar is rising.
Hence everybody wishes to be long on money, and there is,
therefore, competition to get nothing but money futures, that
is to say, bonds.
Having already, however, dealt with this subject at some length
in the course of my remarks, I will now resume the consideration of the question which I was discussing when interrupted.




In order to keep labor uninterruptedly employed contracts
must be made long in advance and debts incurred covering years
of time.
As money is not prized for itself but for what it will purchase,
equity and justice demand that its purchasing power should be
kept as steady and unchanging as possible.

Otherwise time con-

tracts and debts would work great injustice by compelling performance of much more than was contracted for, or much less, as
the case might be.
instead, however, of endeavoring to keep this power of money
steady and unchanging, the people of every country that has an
international money permit the value of their money to undergo
constant fluctuation by reason of the outflow of the money of
their own country and the inflow of that of a foreign country.
Suppose it were the case of some other great instrumentality
of indispensable necessity to civilization.

On account of the

function which money performs in the proprietary distribution
of property, it is frequently compared to a railroad train, which
effects its physical distribution.

Suppose great numbers of our

locomotives and cars were daily put on leviathan ships and carried over the ocean, to remain on the other side until some exigency of the countries to which they might have gone should
admit of their return to us?

W h a t a state of demoralization and

paralysis would exist in every business in the country.

Y e t it

would be trifling compared with the paralysis created by reason
of the shipping out of great quantities of our money, upon the
volume of which the equities of all contracts are based.
It seems to me, therefore, to be absurd that large quantities
of the money of the country should be permitted to g o out when
we know that scores of millions of dollars of deferred obligations depend for their just and equitable settlement upon the
the quantity of money in the country.

So also it seems to me

that the money of other countries should not come in here
since we know that when it comes it produces inflation, and when
it goes—as g o it will—it produces contraction.
If we have the right quantity of money here, why permit any
more to come in, and why permit any to go out? The gold-standard


advocates contend that inasmuch as all that we might receive
from abroad would be an advantage we should welcome it.


as we can not keep it, as we can not keep any more gold than
our distributive proportion of the gold of the world, we gain
nothing permanent by it.

Our whole industrial system is de-

ranged by its coming, and more than deranged by its going.
W h e n the quantitative theory of money comes, as come it
must, to be universally recognized as correct, then it will be
considered folly for a government to permit the quantity, and
consequently the value of the unit of money upon which so many
equities are based to be changed merely for the purpose of accommodating a few men who wish to make purchases in foreign

W o u l d it not be better to have a national money

that would neither flow in nor flow out, than to have injustice
daily and hourly perpetrated upon all the citizens of our own
country, especially those least able to bear the injustice,namely,
the debtors?
Should a separation finally take place between gold and silver
money, it will be because of the constant and ruinous rise in the
value of gold.

Should population and business in this country

continue to increase as for some years they have been increasing,
and should the yield of gold from the mines diminish either absolutely or relatively to the demand for it, and the value of the
metal under the operation of increased demand continue, as a
consequence, to rise higher and higher, the time must come
when gold and silver money must separate.

The salvation of in-

dustry and commerce would depend on and require such separation.
W e know that the world has been ransacked in vain for gold,
and we know that there is not only a vast and constant increase in
the world's population and business, but a constant increase in
the consumption of gold for nonmonetary purposes in all the
arts and manufactures, especially in dentistry.

Unless great

discoveries of gold are made—something in the highest degree
improbable—there is not the slightest doubt that the gold standard must ultimately be abandoned or people will begin to suspect that after all it is not the " spots on the sun " that cause


the periodic and frequent panics in countries of the gold standard.
The country that has the foresight to first perceive the necessity for its abandonment, and the intelligence and virtue to
provide a proper and sufficient substitute, will lead the world in
a career of unintermitting prosperity.

It is not alone, nor nec-

essarily, an inflation of the money volume that will drive gold
out of a country.

Even were that volume kept intact and steady,

in its relation to population and business, gold might go by reason
of the shrinkage of its quantity as compared with population and
business, ana with the amount previously in existence and doing
duty as money.
If there be but one kind of money in a country, for example
gold, or if all the money of the country be " r e d e e m a b l e " or resolvable into one, it may, without detection, g o to what, for want
of a better name, I must denominate a premium over itself; that
is to say, it may become more and more valuable—acquiring
greater and greater purchasing power day by day and year by
year; yet there is apparently no way of measuring or estimating
what has taken place except in terms of this same thing, gold.
The fact, however, is that in such case the fall in the general
range of the prices of commodities is the measure of the premium
on the gold money.
Suppose prices fell 15 per cent it would be insisted that there
was no premium upon gold, because none would be apparent,
since all values would continue to be stated in the same terms
as before.
But, suppose we had a money that was not scarcer then than
before, and that in terms of that money there was no fall of
prices, then we could see that a premium on gold really existed.
If, however, in the one case, there was a fall of prices of say 15
per cent, and in the other case a rise of say 17i per cent, it would
cost no more in the products of labor to get the gold dollar in the
one case than in the other.
Y e t people talk about the premium upon the gold which each
man happens to have on hand as if that were a great factor in
the case, when really the most powerful factor in a premium
upon gold is a fall in general prices.

It is in that way that gold


is acquiring day by day greater and greater control over commodities.

In this way the gold of each year is at what might be

termed a premium over the gold of the year before; in other
words, at a premium over itself.

Y e t it is not seen that there is

any premium because men are constantly measuring gold by

It would be perceived and made perfectly plain and

demonstrable to all the people that there was an increasing purchasing power in gold if we had another money by which we
could see just what was taking place—a sort of monetary barometer.
Had we this other kind

of money—a national


would measure the premium upon gold with precision and exactness, and we would see at once that this increasing purchasing power of gold was nothing but a premium upon itself, and
that it would take 110 more of the products of industry to get the
gold dollar under the one condition than under the other—that
is to say, no more of the products of labor to get a given amount
of gold when gold is at an open and admitted premium, than
when, during a fall of general prices, it is at an unrecognized
and undesignated premium.

With a money of unchanging value

the equities in all time contracts would be preser ved without involving any hardship in obtaining any necessary quantity of

The few who might require it would be obliged to give

no more commodittes for it in the one case than in the other.
Had we an ample supply of silver money , which would not leave
the country, we would always have an equitable money.


such a money we should have something which would openly declare whether a premium upon gold existed or not, and if it did
exist, would measure and record such premium.

W e could then

clearly see that the fall of prices was a premium on gold.


would be an infinitely better monetary system than anything that
is possible under the so-called gold standard.
Men who owed obligations in their own country would not then
need gold.

They would not be mulcted simply because other men

were '' s h o r t " on gold.

The men who needed the gold would alone

pay the premium when buying the foreign goods, but so also
they would receive a


p r e m i u m " when selling them.

they would lose nothing.



Only gamblers in money who were " s h o r t " on gold would lose


The money of a country should be adjusted not to the conduct
of an incidental and subordinate trade, as against the dominating trade; not to facilitate a foreign trade as against, and to the
injury of, the domestic trade.

Have Senators ever stopped to

consider what are the proportions existing between the domestic
and the foreign trade of the United States?
Mr. Edward Atkinson, in his book entitled " The Industrial
Progress of the Nation," computes the production of this country by all who are at work at such a sum as makes a little over
an average of $200 per head of the entire population.


ing our population to be, in round numbers, 70,000,000, this
would give a total production of $14,000,000,000 per annum.
But business does not end with production.

It is estimated that

each article is bought and sold at least three times before being consumed.

As, in computing foreign trade, we count both

exports and imports, so, in ascertaining the total trade, we count
purchases and sales.

W e must therefore add to the $14,000,-

000,000 a further sum made up of the treble sales and the treble
purchases which constitute the commerce of the country apart
from production.
W e have, therefore, these
A l l purchases
A l l sales



$14, 000, 000, 000
42, 000, 000, 000

making a total of $98,000,000,000 of production and commerce, not
computing any thing for profi ts on the transactions.

Of this vast

sum, what proportion is the foreign trade of the country?


year it was larger than ever before in our history, and still it
amounted to less than $1,900,000,000, or considerably below the
one-fiftieth part of our total trade!
W h e n we keep in mind this colossal sum constituting the business of our own people among themselves, it must be obvious that
the monetary question of most importance to the population of
the United States is by what form of money they can equitably
e x c h a n g e products and pay debts among themselves.


The need for gold is not for the purpose of making payments
o n all foreign purchases, but for the purpose only of settling
momentary balances, or excesses of imports over exports, which
are never more than the merest trifle in proportion to the total

Had we a permanent balance every year against us of

$50,000,000, to be paid in gold, two-thirds of it could be paid from
the products of our own mines.

But even the $50,000,000 would

be but the one-fortieth part of our foreign trade, and would,
therefore, be but the two-thousandth part of our entire business.
Y e t it is this infinitesimal demand for the money of a foreign
country that induces Senators to persist in adhering to a standard that is disturbing the equities of all time contracts in their
own country and through falling prices relegating to idleness
large numbers of the population.


Undoubtedly the foundation of the popular fear of a premium
on gold is the idea that in order to trade with other countries
we must use for our domestic money the same money material
as the countries with which we trade; and the discount on our
paper money during our late war is pointed to as a warning.
But that discount was not in the slightest degree due to the
character of the material of our money, but to the number of the
dollars that were put into circulation.

It was the excessive

quantity of the money units in circulation that caused the variance in purchasing power between the paper unit and the gold

W h o will deny that if the whole number of our dollars of

all kinds had been kept strictly limited to a number equal to the
number we had at the time the war began, every dollar of the
paper would have remained equal to gold?
The great fluctuations in the relation between greenbacks and
gold were not, however, a correct measure of the so-called depreciation of the greenback. It frequently happened that the premium upon gold was enormously greater than the relative values
of the two things, greenbacks and gold, as measured in everything else.

T h e overplus simply indicated that a little ' 'corner"

or " squeeze " in gold was for the time being made in the market.
A simple illustration will be sufficient to show this: W h e n there


was a change of 3 or 4 per cent in the premium on gold, as there
frequently was within twenty-four hours, it was not found that
all the values in the country fluctuated to that extent in a day.
The wages of men were not readjusted from day to day, nor did
the prices of commodities, measured in greenbacks, suffer any
such sudden change.

It meant that some persons were in great

need of gold at that moment, and a " c o r n e r " was created in
order to squeeze them.
There was but a small supply of gold in the country, and it
was subject to demand and supply on the spot where, and at the
moment when, needed.

The premium did not, therefore, c o r -

rectly measure the relative values of the two kinds of money.
Take the range of prices in England and in this country in
gold all through the war, and it will be found that when there
was a little corner made here, and the metal ran up to a h i g h
figure, it was not owing to any corresponding change of prices.
Gold was then a commodity in this country, and the elements
that governed value in all other things governed its value—
namely, demand and supply at the time and place where wanted.
Those who sold gfold without owning or having it frequently
found the market cornered, and at whatever cost, had to get it
for delivery on the day on which they had engaged to deliver it.
In no sense, therefore, did it measure the relative values of
things, according to the medium in which, at the time, all things
in this country were bought and sold.
The fact is that during the war we were simply calling two different things (a paper dollar and a gold dollar) by the same name,
" d o l l a r , " leading people to the idea that they represented one

Instead of having relation to one another the paper

dollar was simply the dollar, or money unit, of this country.
W h a t the thing called the gold dollar really represented was a
fractional or proportionate part of the value created by the whole
number of dollars (or their equivalents) of gold in use throughout the world, as modified by the varying numbers in the different gold-using countries, and by the amounts of silver and paper
money in use in those countries.

Prices in one country having

the gold standard must bear a certain relation to prices in every
other country that has the gold standard. With any other kind


of money unit than a gold unit we might, therefore, without the
slightest injustice or depreciation in our money, separate from
t h e gold standard.

Had we never called the two things by the

same name, the word " p r e m i u m " could not be used to describe
a difference between them.
For example, had we never had a gold dollar, but had a paper
dollar, and had we found that at one period a certain number of
grains of gold could be got at a certain rate in paper, that is,in
the money of the country, and that at a subsequent period they
would cost more, people would not conclude that our money had
depreciated, but simply that gold, which was in no sense the
money of this country, had risen.

Especially would this be the

case if, as measured by our money, the general range of prices
had been maintained practically unchanged.
But viewing gold as an unvarying thing, it has been taken for
granted, without examination, that it has not been appreciating.










T h e advocates of the gold standard lay great stress upon the
necessity of our money being as good as the money of any other
Y e t we know that with a given amount of gold we can buy
twice as much labor in England, and three times as much on the
Continent of Europe, as we can in this country.

How, then, can

any comparison whatever be made between the moneys of the
respective countries, and is it not absurd to talk about the money
of this country being kept as " good " as the money of any other
T h e value of money in any country is based on its purchasing
power in the country of its coinage or issue.

A n y person in one

country who wants the money of another country can buy and
must buy that money with such goods as he may have, and at such
rates as it can be got for, measured by the products of that country.
If a man abroad wants to buy some particular product in the
United States he will purchase the money of the United States
with that of his own country, and with our money he or his agent
will buy and pay for the product of which he is in need.

In other

words, he will buy a bill of exchange on the United States.


very purpose of a bill of exchange is, as it were, to transmute the


money of one country into that of another.

A s to any two coun-

tries, the money of either will, to the full extent of the e x p o r t
trade of that country, buy on absolutely equitable terms, the
money of the other country, of no matter what material the money
of either may be composed.

The ratio of the two moneys in ex-

change will, of course, be proportioned to the purchasing power
of the units of the two in their respective countries.
This rule holds good, no matter how poor a country may be.
Even in the case of bankrupt governments it holds perfectly good.
For instance, the money of Turkey, whose bonds are worth
little or nothing, is as gcod in London as in Turkey, up to the
limit at which English merchants have to pay for goods which
they have bought from Turkey, minus, of course, a small percentage for exchange and charges, as in the case of the money
of any other country.
Or again, suppose there were in London a sum in Japanese
yens equivalent to £10,000,000, and that 40,000,000 yards of
Japanese silk were imported at 5 shillings a yard.

That money

would pay for them, and, after deducting a small charge for exchange, would, although not legal tender in England, have in
London all the value it had in Japan.
T h e money of this country will likewise, on terms absolutely
equitable, buy the money of any other country to the extent of
our exports.

Should there be an excess of importations from

gold-using countries over exportations to such countries, there
would be a small premium on exchange.
These are matters for adjustment between exchange dealers
and those who, without foresight, send goods here from abroad
to be sold in our market, or who, living here, buy abroad more
than can be paid for by the exports of our own country.


of exchange should not be made to fall on all our people, but only
on those who are responsible for them.

Any country that has a

balance of trade in its favor can always, to advantage, get so
much of the money of any other country as it may need.

OF A N A T I O N A L , A S C O N T R A D I S T I N G U I S H E D




Mr. President, extraordinary anxiety is expressed lest w e
should g o to a silver standard or a silver basis, and thus




arate ourselves," as the advocates of the gold standard say, f r o m
the commercial nations of Europe.

The " c o m m e r c i a l nations "

in this case mean only Great Britain and Germany, because there
would be no difficulty in exchanging silver with Prance.


other nations of Europe outside of the three named, so far as
our commercial relations are concerned, are not worth taking
into account.
Now, I, for one, believe in submitting things to the test of

I am not willing to take the word of any man in mat-

ters of reason without investigating for myself.

Let us then in-

quire what injury could result to the people of this country if we
should have a money not international in character.

For al-

though there is, strictly speaking, no such thing as international
money, yet in view of the fact that a special material has unrestricted access to the mints of several countries, and is therefore
potentially money in those countries even when not coined, we
may, for the purposes of the discussion, term gold international
There are two great evils inseparable from the use of what
maybe termed international money: First, the demand of a large
group of nations being made upon the same money material,
the supply of which is insufficient for the constantly growing
exchanges of those countries, there must result a continuous and
progressive fall in general prices.

Second, the money of each

country in turn is taken out of the circulation and shipped to
other countries, whence in time it is returned, only to be shipped
out again, thus maintaining a process of seesaw in the course of
of prices in the various countries affected.

So that by basing all

transactions, both internal and external, upon an international
money, trade and industry are kept in a constant oscillation between bad times and good times—between inflation and contraction. Hence prosperity, like the ocean tide, has its ebb and flow.
It is said to come in " w a v e s , " and so long as nations adhere to
the shrinking gold standard prosperity can come in waves only.
So long as we use a money material common to all nations, or to
a large group of nations, not only are we never sure of having
enough for the needs of our own people, but when any difficulty
occurs in a foreign country we are subjected to extreme varia785


fcions in the value of our money because of foreign embroilments
over which, in the nature of things, we can have no control.


this would be avoided by the possession of a money purely national.



N o amount of energy, industry, enterprise, or thrift can keep a
country uninterruptedly prosperous while large quantities of its
money are flitting back and forth across the ocean, alternately
contracting and inflating the money volume, alternately lowering
and raising prices, disarranging contracts, destroying equities,
defying foresight, inducing bankruptcy and producing misery.
W e r e our money exclusively national, then, should the balance
of trade go against us, it might be that, so far as this country is
concerned, the international money would go to a premium.
who would want international money?
to have it?


W h o would be compelled

T w o classes of persons only.

First. Our importers

of foreign goods, and they to the extent merely that they have
bought more largely of foreign goods than the merchants of foreign countries have bought of our goods.

Second. Railroad and

other corporations which have outstanding bonds payable in
A s to the first class: If the importer paid a premium he would
not be a loser, because he would recoup himself by charging so
much more for his goods, and this extra charge should very
properly be paid by those among our citizens who prefer foreign-made articles to those of American manufacture.
As to the second class, namely, railroad corporations having
outstanding obligations payable in gold: Under a system of national money they could as readily command gold as they now

How do railroad companies now command gold?

B y ren-

dering certain services in the transportation of persons and commodities for which the public pay certain rates of fare and

T h e more active and remunerative the business of

their patrons the more thriving must necessarily be the business
of the railroads.

W h e t h e r under a gold regime or any other, if

the business of the people be stagnant and unremunerative, the
business of the railroads can not be prosperous.

A farmer or


cotton-planter can batter afford to pay a high rate of transportation 011 wheat or cotton that is marketed at a rate which yields
a fair profit than to pay a much lower rate on the same commodities marketed at bare cost of production or at a loss.
The prosperity of the railroad companies depends on the prosperity of all the people of the region through which the roads

This prosperity can not coexist with persistently falling

prices of the commodities which it is the function of railroads to

W a n t of prosperity among the people means ruin

and " receiverships " for railroads.

Such want of prosperity is

the inevitable result of a shrinking money volume.
W i t h a national money that should keep even step and pace
with demand there would be confidence in the stability of prices,
safety in the making of time contracts, consequent prosperity in
the course of business, and uninterrupted employment of all the

These are the elements that enter into the prosperity

of railroads, as of all other business enterprises.
I have said that railroads now get gold by rendering certain
services for which the public make certain payments.


money received in such payments bears a certain average relation to commodities, and, at that relation, commands commodities.

Under a system of national money the payments which

railroads would receive would be in such national money, which
would have a certain control over commodities in this country.
A s commodities now in this country bear relation to gold, and
at that relation command gold, so our national money, which
would always bear relation to our commodities, would at that
relation command gold.
The only difference would be, that whereas now the increase
in the value of gold is furtive and unperceived, because we use
gold as the " s t a n d a r d " and measure it by itself, a national
money would exhibit this baleful increase in all its deformity,
and would register the degree in w h i c h , f r o m month to month
and year to year, gold was departing from the level of equity and
justice, and the degree in which it was confiscating into the possession of the creditors the property of all debtors in the countries which adhered to its so-called " s t a n d a r d . "
Should a premium arise on gold by reason of a decline in the



value of our national money (measured of course in commodities) that would be one thing; but if by reason of a rise in the
value of gold (measured likewise in commodities) that would be
another and wholly different thing.

It would be a benefaction

to this country to have a money that would neither rise nor fall
in value, and I must here repeat that the value of money means
purchasing power; it has no other value.

If, however, gold should

rise and there were a sufficient supply of national money with
which to do our business and maintain the average range of
prices undisturbed, then a premium on gold, as measured in our
national money, could not exist until the prices of commodities,
estimated or expressed in national money, should come to bear
the same relation to prices estimated or expressed in gold th at
the purchasing power of our national money would bear to the
purchasing power of money in gold-using countries.
In other words, a premium could not arise on gold until the
general range of prices of commodities, expressed in national
money, rose to a degree corresponding with the premium on

Hence commodities would command as much gold as if

the national money did not exist, and the few persons who m i g h t
owe gold debts would have no more sacrifice to make, in order
to get gold with which to pay those debts, than if there was no
national money.

Indeed they would not need to make so much

sacrifice, inasmuch as if all the gold of this country were permitted to g o to and remain in Europe our exports would bring
better prices there, and so command more gold than if we
should insist on maintaining the struggle for a share of the
world's supply of that metal.
On the other hand, with gold only for money, or with money
redeemable in gold, the increasing value of the monetary unit
would be wholly unperceived, except as' evidenced by the fall
in the prices of our commodities.

That fall would occur, not in

prices of imported articles merely, but of all articles whether
imported or domestic.

This would create a subtle but enormous

increase in the obligation of all domestic debts—debts amounting to many thousands of millions of dollars. Gold has increased
in value—that is to say in purchasing power—50 per cent in the
past twenty years, or at the average rate of 2i per cent per an785


num, so that the indebtedness of our people, measured in sacrifice has, by reason of adherring to the gold standard, cost them
that much more than they were equitably required to pay.
W i t h a national money—a money which would not be sent out
of the country, there would be no great rise or fall of prices,
and no great changes in the volume of money.

A l l the money

would remain in the country, for the use of our own people, and
all differences in exchange would then be settled (as t h e y should
be settled) by commodities.
It would then be as profitable to meet balances of trade with
commodities as with money, because our money would in foreign
countries be mere merchandise, which, I assert, is as it should

T h e money supply of our country should not be continually

oscillating between a feast and a famine, alternately raising hopes
and dashing them to the ground.


T h e absence of a parity between the moneys of nations does
not affect their foreign trade, as some would have us believe. I
challenge any gold-standard Senator to point to an authority of
repute on political economy who anywhere pretends to assert
that any nation having money other than gold is, or can be, injuriously affected in its business or other relations by any variance in what is called the parity of moneys.

The money of this

country, whether gold, silver, or paper, will always command—
will always purchase—upon equitable terms, the money of any
other country with which we have commercial relations, whether
those relations be directly with itself or through other countries.
One of the most eminent of economists, Prof. J. E. Gairnes, of
the University College, London, though an eminent advocate of
the gold standard, in his Leading Principles of Political Economy, says:
It appears to me that the influence attributed by many able writers in the
United States to the depreciation of the paper currency, as regards its effects on the foreign trade of the country, is, in a great degree, purely imaginary. An advance in the scale of prices, measured in gold, in a country, if
not shared by other countries, will at once affect its foreign trade, giving
an impulse to importations, and checking the exportation of all commodities other than gold.
A similar effect is very generally attributed by American writers to the
action on prices of the greenback inconvertible currency. But it may be
easily shown that this is a complete illusion. Foreigners do not send their

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

I find this point touched upon also by an American writer
w h o m I regard as one of the ablest contributors to the literature
of political economy to be found in this or any other country.


allude to Mr. John P . Y o u n g , the managing editor of the San
Francisco Chronicle.

In a luminous article on bimetallism in

the issue of that journal for August 3, last, Mr. Young says.
But the suggestion that this country might have a sole silver currency is
the bogie that frightens many who know little or nothing of the subject. " To
have a sole silver currency 1 ' in their eyes means unparalleled disaster.
Such people completely ignore the fact that during the period that we had a
sole gold currency no one thought that the country was threatened with
ruin because the dearer silver was not coined. Such as gave the subject a
thought at all and had any real knowledge of the difficulty desired that the
mistake of undervaluing silver might be corrected, but they would have
judged a man a fit candidate for the lunatic asylum had he asserted that disaster would certainly follow the free coinage of gold because it was cheaper
than silver. * * * If a nation has resources and a people capable of de
veloping them it will increase its wealth no matter what sort of money it
employs to circulate values, provided the standard of values is not tampered
Between 1860 and 1880 the precious metals, silver and gold, were not used
to circulate values in the United States. Our only currency w7as the greenback—except in California. There was no demand for gold except th at artificially created by promising to pay the interest on bonds in money of that
metal, yet during the period in question, in spite of a devastating war during which production was interrupted and vast quantities of property destroyed, the wealth of the United States increased f r o m $16,160,000,000 to
$43,642,000,000, or nearly threefold in twenty years. If the theory of those
who make a fetich of gold were sound this could never have happened. Nor
while we were increasing our wealth at home did our foreign trade suffer.
That went on precisely as described by John Stuart Mill in his chapter " On
the Foreign Exchanges." After supplying an illustration, Mill remarked:
" I t t h u s appears that a depreciation of the currency does not affect the
foreign trade of the country. This is carried on precisely as if the currency
maintained its value. * * * If the currency is depreciated 10,15, or 20 per
cent, then in whatever way the real exchange arising f r o m the variation of
international debts and credits may differ the quoted exchange will always
vary 10,15, or 20 per cent from it. However high this nominal premium may
be it has no tendency to s««id gold out of the country for the purpose of
drawing a bill against it and profiting by the premium, because the gold so
sent must be procured, not from the banks at par, as in the case of a convertible currency, but in the market at an advance of price equal to the premium."


Bank of England notes will at any time, and at equitable rates
of exchange, buy the money of any other country with which
England has commercial relations—direct or indirect.


Not because they are payable in gold, but because they will command commodities in Great Britain.

The ultimate object of

money is to command goods—to purchase commodities.


is an order for goods in the country of its coinage or issue—a
guinea, as Adam Smith says, being nothing more than " an order
for goods on all tradesmen in the neighborhood-"

A n y form of

money that will command commodities in Great Britain can,
therefore, in any country of the world, be exchanged at equitable rates for the money of other countries, because almost all
countries have commercial relations with Great Britain.


the comodity desired be gold itself the situation is in no sense

The principle is the same.

Even gold coin is but a

commodity in every country except that whose stamp it bears.
W h e r e , as in Europe, a number of small countries lie close together, and the plane of living of the people of all such countries is about the same—especially, if travel between them is
very general—the utility of what may be termed an internatianal
money is much more obvious than under other and directly opposite conditions.


W h e r e a country is of continental proportions and separated
by thousands of miles of broad ocean from another country possessing a certain character of money; where, also, the manners
and customs of the people altogether differ, and the level of life
for the masses is much higher; where, instead of four or five
millions, or even twenty or thirty millions, of inhabitants, the
country has 70,000,000; where, too, a country is in no way dependent upon other countries for the supply of its needs, but has
within itself every element necessary to the supply of all the
wants of its people—but, above all, where the spirit of freedom
and independence prevails to a degree unknown elsewhere—
there is no necessity whatever for a money system corresponding with that of any other country.

On the contrary, when the

situation comes to be carefully analyzed, many reasons will ap785


pear why it would be better for such a country not to have a financial system to correspond with that of other countries.
If money be necessary at all, it is necessary all the time.


ever the volume of money may be, that quantity is needed every
day and every hour of the day.

There is no circumstance of

business or season of the year in which it is not necessary that
the volume should be steady.
pend upon it.

The equities of all contracts de-

In transactions requiring deferred payment, jus-

tice is impossible unless the money volume increases with increase of population and demand.

It is as unwise, therefore, for

the people of a country to permit their money to be taken away
in any material quantity as it would be to permit the agricultural
implements employed in the country to be taken away when they
were needed for the operations of agriculture—indeed it would be
more objectionable and injurious to take the money than the agricultural implements, because the season demanding the use of
agricultural implements is short, while the season for money is
the entire year—and every day of the year.
T h e advocates of the gold standard lay great stress upon the
fact that 95 per cent, as they call it, of the business of the world
is transacted now with checks, drafts, notes, and bills of exchange.

Ninety-five per cent of the business they regard, and

rightfully regard, as a very large percentage, but when we show^
that 95 per cent of our business is domestic business, is a business
between our own people themselves, and not between our own
people and foreigners, then the 5 per cent done with foreigners
becomes of enormous importance, while the 95 per cent done between our own people is a matter of no consequence whatever!


4 'revenue


t a r i f f " advocates are criticised by our protec-

tionist friends because, as is said, they do not take an American
view of the tariff.

The protectionists, however, refuse to take

an American view of the money question.

The protectionists

of to-day lack the courage with which the Republican party set
out in its great career.

They have not the courage to investi-

gate this great question of money from a national, or natural,
point of view.

A true American should be amazed to hear that

no money is good money unless it be the money of Great Britain


and Germany.

W h e n e v e r those two countries say to us that we

may use silver as full legal-tender money, then our Republican
protectionist friends are willing that we may do so.

Silver will

then be gcod American money, not before.
This is a " lame and impotent conclusion" for a great national
party—the party of human freedom.
that of an inferior race.

The slavery of 1861 was

There is a slavery of to-day which it

is sought to perpetuate, and which, while not so palpable to the
common view as that of 1861, is more far-reaching and repulsive
and baleful in its consequences, because it is a slavery of the producing masses of the white race all the world over.
our people can not escape.
no defense.

This slavery

Against it, forms of government are

If we do the bidding of the money-lenders, and

maintain the gold standard, we must expect our producing
classes to become year by year more and more depressed, provided they are willing to tolerate the conditions which the gold
standard renders inevitable.

One of the plainest of those con-

ditions is that the lands are to pass into the proprietorship of
mortgage companies and other rich creditors, while our working farmers are to be transformed into tenants, as in Europe.
The respect in which our people, however, differ from those
of Europe is that they are not disposed to tolerate European

The political unrest of the past year or two in this

country and the serious defection from both the leading political
parties, speak to Congress louder and more plainly than do
the bankers and the chambers of commerce.
It is impossible to misapprehend or mistake the spirit of our

For many years past demands for the free coinage of sil-

ver have been made by all the leading organizations of labor and
all the great associations of agriculturists in this country.
It will not do to say that these men do not understand the
monetary question.

They understand it much better than the

advocates of the gold standard suppose.
W h a t an absurd idea it is that we can not tell a week in advance what shall be the volume of money in our own country.
It is absurd for 70,000,000 intelligent people to submit their
entire business, with all the delicate and multifarious equities


existing between debtors and creditors, to the dictum of foreign
governments and peoples.


A l l governments reserve to themselves the r i g h t to coin

It is impossible to obtain money except through the

instrumentality of governments.

Is it not the duty of a govern-

ment to adopt a monetary standard that will admit of the possibility of a sufficient volume of money being obtained for the
transaction of the business of its own people, and to protect it
against both inflation and contraction.

The government after

all is but the people in their collective capacity, and the collectivity may do, and in fact, as to money, must do. what can not be
done by the individual.

The happiness of all the people depends

upon their having a sufficient volume of money, and no government should divide responsibility in so important a matter with
any foreign government.
A n inflow of money, by tending to make prices rise, gives an
impetus to business.

No sooner has the process commenced,

however, than a contrary influence begins to assert itself, and
the money by flowing out of the country leaves our industries
without monetary support.
W i t h a national money properly regulated and the banks held
under strict control and restraint with reference to the extension of credits, a general or widespread panic would be impossible.

In matters on which there was a diversity of judgment

there would, with any system of money, be chances of disaster.
There would be occasional overspeculation in town lots, or too
many people entering into special lines of business, but the effects
would be local and limited—local as to places and limited as to
classes of business.

There would be no general panic.

It is one of the inalienable rights of a free people to provide
themselves with a sufficient and properly regulated money system, regardless of the systems prevailing in countries of less
enlightenment, or in which the rights and interests of the people are subordinated to the cupidity of money-lenders and privileged classes.
During the late war we had not the manufacturing resources
that we now have.

The support of our A r m y and Navy created


a demand for goods of all kinds.

Our imports enormously ex-

ceeded our exports, and we became u s h o r t " on gold.

Then the

Europeans had us at a disadvantage and we had to issue bonds
for coin with which to pay for foreign purchases.
But now positions are reversed.

It is we who have products

that the Europeans must have, and ^ h i l e they produce nothing
that is indispensable to us, we produce articles of prime necessity which are absolutely essential to their very existence.





The more one reflects upon this question the more monstrous
does it seem that the value of money in this country should depend on the will or whim or cupidity of the governments or people of other countries.

If by reason of wars or otherwise the peo-

ple of other countries suspend specie payments, they can, by suspension or resumption of such payments, affect the value of
every dollar in the United States, simply by taking the money
out of this country and storing it up in their vaults, as they are
now doing.
Suppose that our national monetary unit should represent accurately the amount of sacrifice that a debtor equitably and honestly owes—suppose it should represent precisely the value that
was agreed to be delivered in repayment ot a debt—when we
know that the value of the monetary unit depends on the number of units circulating in the country, could we look with satisfaction upon a process by which without any control upon our
part foreigners, whether througn their wars or otherwise, could
in effect alter the terms of all our domestic debts and contracts?
Had we a money system that secured justice and maintained
equity, how is it possible that we could be at a disadvantage in
comparison with a country that had an unjust system?
Whatever our money may be, it will be good abroad to the e x tent of our exports, and we do not want any better condition
than that.

W e do not want a money that can be shipped out, to

the injury of our business.

If any of our importers wish to buy

in excess of the sales being made by our exporters, then it becomes the personal business of the importer to settle his debt
without inflicting injury on domestic debtors, who are praeti785


cally the people of the entire country.

Had we a national money

we should have an unerring barometer, which, by the rise of
foreign exchange, would notify us that we were importing more
goods than we were exporting.

Merchants and others could

then adjust their business relations accordingly, and no one
could be injured.
The English economists and professors insist with vehemence
on the theory that goods are paid for in goods, not in money.


was the acceptance of this theory that led to the rejection of the
so-called mercantile system, which regarded money as the only
wealth—as something whose possession for its own sake was the
main object of commerce.
Their whole theory of political economy is based on the idea
that imports are paid for by exports, and that all international
trade is barter.

If correct in this why need they express so

much anxiety lest the money of a foreign country go to a premium in this?

The premium could affect only those of our peo-

ple who wished to use articles of foreign production—and whom
else should it affect?



Owing to the influence of England, which was the first of the
civilized nations to develop a large foreign commerce, all discussions on money are based upon foreign trade.

This may

do for Great Britain, but will not do for the United States.
The poverty of the masses of the people of that country is such
that in proportion to their foreign trade their domestic trade
is much less per capita than that of the United States.
comparison is not one derogatory to this country.

But this

On the very

contrary, the superior purchasing power of our people is tha^.
which constitutes the source of their prosperity and independence.

Hence the conditions of the two countries widely differ.

Our internal commerce is enormous.

One of our trunk lines of

railway—the Pennsylvania Company—hauls more tons of freight
in a year than the entire foreign shipping of Great Britain.
"With such a statement before us, can any Senator explain why
the United States should attempt to adjust its enormous domestic interests to the moneyed necessities of a business that consists of a mere one-fiftieth part of our entire trade?


In any event when we buy gold we have to buy it with commodities.

Inasmuch as every man must get or " buy " the money

of his own country with commodities, the product of his labor,
will not that money in its turn buy gold, should it be needed to
pay importer's balances?

Had we a m o n e y exclusively national, our importers could buy
to whatever extent they pleased without disturbing the prosperity of the country. Nobody would even inquire whether there
was a balance of trade against us or not.

He who bought would

simply have to make payment according to his agreement.


could not and should not be permitted to make payment by
sending our money out of the country, to the detriment and disadvantage of all who owe debts in this country, and they are
nine-tenths of the people.

He could not turn his property into

foreign money, but would have to turn it into money of his own

He could not deprive the people of his own country of

their natural supply of money, the supply necessary to maintain
the equity of contracts.
W h e n the balance of trade is against us it means that we are
going to lose a part of our money.

W i t h a money exclusively

national the balance of trade would not affect us at all.

It would

"be a matter of personal concernment only to the importer.


would leave him to make payment according to contract, and
would remove from the idea of an adverse balance of trade all the
objections that now attach to it.
Under a proper system of money we should not have more than
enough to do our own business, at a firm and natural level of

That much we need all the time, and it is a great injus-

tice to our people to arbitrarily disturb the system upon which
the prices of the products of their labor depend.
W h e n e v e r our national money were offered for sale, foreign
nations would be glad to take it to the full extent of our exports.
Sheuld a larger amount be demanded, or, in other words, whenever our imports should begin largely to exceed our exports,
then, undoubtedly, a premium would begin to operate against us.
This would not be unnatural, nor would it be a disadvantage.
Like the index upon the steam gauge, the premium would, as it


rose, indicate the increasing pressure.

Like an automatic at

tachment, it would ring a note of warning, gentle at first, but
increasing in force until heeded.

It would announce that the

imports of the country were exceeding its exports, and that the
time had arrived for the curtailment of importations; or that, if
they continued, it should be for the importer to arrrange f o r
In discussing international trade the advocates of the gold
standard altogether lose sight of a most important fact, namely,
that a premium means a reduction of the prices of exports.

A cer-

tain range of prices prevailing in this country, a premium arising on gold would mean that at present prices the merchants of
gold-standard countries are not willing to buy our goods, but by
giving those merchants a premium, they are enabled to take the
goods at the prices at present prevailing here, and dispose of
them in their own country at a profit.
If importers do not wish to pay a premium on the money of a
foreign country they should see to it that they do not exceed in
imports the export business of their own country.

It is no hard-

ship on them to require them to keep themselves informed of
the conditions of their own trade.

A man who brings foreign

goods into the country should be compelled to make his own
computations as to how he is going to obtain the money with
which to pay for them.

There is no difficulty about the compu-

tation, and, so far as the country at large is concerned, it would
be found that the foreigners would very much oftener have to
pay a premium upon our money than we should upon theirs.
If the foreigner buys our goods, with what will he pay?


our money, or with goods measured in our money; that is, the
goods of his own country.

If the foreigner does that, he will be

willing to give for our money its equivalent in grains of gold.
T h e subtle consideration involved in this proposition is that
our money will be, and must be, good to the full extent of the
amount of our exports.

It always will, and must, purchase upon

absolutely equitable terms to the full amount of our exports the
money of any other country.
No country can have an equitable system of money for its own
citizens while permitting foreign governments to be partners


with itself in the matter of its money.

It would be better to

have such a partnership in other things than in money, yet the
idea of partnership between nations in the matter, for example,
of ships, would be considered absurd.
There are many things as to which this country has no partnership with other nations, yet as to which we have prospered

Then why a partnership in money?

Had we a national money no foreign crisis could disturb the
prosperity of our people.

T h e r e could be no general crisis here.

Should the money of a foreign country

become too high,

we should have an alternative; that is to say, we should not
need to buy anything from that country beyond the so-called
equilibrium of trade.

But if we use the same character of money

as the people of that country do, a scarcity of money with them
may produce a widespread panic in our country.
Had we a money of unchanging value, by reason of a proper
regulation of its quantity, what possible disadvantage could
come to us from the lack of foreign gold?

W e should always

have $35,000,000 of gold every year from our own mines; and gold
is offered in every country in the world for our products.

Suppose the people of the United States in all their dealings,
foreign and domestic, should make their contracts for payment,
not in dollars, but in pounds of wheat.

Suppose the foreigners

insisted that in these transactions the Americans should use the
system of scales and weights that were used abroad.

And sup-

pose we found after awhile that according to the foreign system
the specific gravity of the pound weight was constantly and
wrongfully increasing.

Suppose that upon this discovery, ob-

jection was made by many Americans to making payment according to this foreign standard, what would be thought of other
Americans who should noisily insist that payment should be
made to these foreigners according to the pound which was constantly increasing in weight, although they knew or could readily ascertain that this increase of weight was


clandestine, and fraudulent?
Suppose the payments to have been made, however, according
to the interpretation placed upon the contract by these noisy


Americans, many of whom regarded themselves as citizens of
the world rather than of the United States, and that all foreigners declined to enter into further obligations except upon the
understanding that Americans making foreign contracts should
use these foreign scales and weights.

Very well.

W h a t injus-

tice could there be in letting such of our citizens as insis?ed on
making foreign contracts on those terms carry out their contracts according to their agreement, letting each man individually pay his indebtedness to the foreigner according to the terms
and understanding of the contract and according to the scales
and weights of the foreign country?
But what objection could there be to permitting all the remainder of the people of the United States conducting their
business among themselves according to the scales and weights
which were the standard in the United States—scales and weights
by which exact justice may be meted out between citizen and
Prosperity can not come from injustice.

Let our people among

themselves have just weights and measures; let the foreigners
have such weights and measures as they please.

Those who

make contracts with foreigners may use any scales provided for
by the contract.

But why should not our own people, among

themselves, use scales that are perfectly equitable—what injury
or injustice can happan to any one by such a course?


By having correct scales for the home trade the equities between our own people are preserved.

If any individual wishes

to make a contract which requires him to pay in certain prescribed scales and by certain prescribed weights, he is entitled
to make his contract as he pleases.

But why should he find it

necessary to force upon all the other people of his country the
inequitable scales and weights of foreigners and make them the
standard of his own country, so that no sign of the iniquity may
be discernible, no evidence of the wrongful aberrations observed?
If we have correct scales and weights for our own domestic
transactions, we shall be able to see the errors of the others.


we have no scales or weights other than those of foreign nations,


which are constantly increasing their measuring power over
commodities, our people will not be able to perceive the wrong
which is inflicted upon them, and will have to undergo much
suffering from causes which they can not explain.
So, as I have stated, we do not escape the payment of a premium
by having the gold standard in this country.

The fact simply

is that, everything being measured in gold, all changes that take
place are attributed to conditions affecting commodities.


masses of the people are not prone to suspect changes to occur
in that which they are taught to regard as a standard.
No nation, whether on the gold standard or not, can keep more
than its distributive or proportionate share of the world's gold.
Hence any influx of gold into a country beyond the customary
stock can be merely temporary.

Only national money will re-

main to perform the money function among the people.


property in national money, instead of being a vice, as the goldstandard men assert it to be, is a crowning virtue.
Had we free coinage of silver no one would want gold, because, even if as supposed by the gold-standard advocates, gold
3hould then be hoarded and withdrawn from circulation, prices
of commodities might fall instead of rising.

In that case our

foreign purchases would become less, so that balances would be
in our favor.






Compared with the United States the population of the European countries is stationary.

The money systems of those coun-

tries, therefore, are no criteria for us.

W i t h the character of our

population, their enterprise, their energy, ingenuity, and aspiration, their aptness in adapting means to ends, they would make
this country the center of civilization and of progress.
If we have an international money we must content ourselves
with international prices.

It is only when prices have gone up

above the international range that gold begins to g o out, and if
the gold product should continue small, and a constantly increasing amount of it be consumed in the arts, the chances are that
without any inflation whatever gold would continually get dearer,
and the two metals might part company. ' They are more likely


to remain together, however, if this country does not enter into a
contest for gold.
It is impossible, as I have said, for gold to go to a premium in
this country until substantially all the gold in the country has
gone out, and it will take a large amount of silver to drive out
all the gold.

A silver dollar can do no more in that respect—

can do no more toward sustaining prices or sending out gold—
than a gold dollar.
It is admitted that we have $600,000,000 of gold in this country.

How long would it take for that gold to g o out and $600,-

000,000 of silver to take its place, and what would be the effect
abroad and at home while that operation was taking place?


Suppose that according as portions of the $600,000,000 went,
the monetary supply of this country were maintained at a steady
level by the issuance of a number of silver dollars equal to the
number of gold dollars that were sent abroad. Suppose the gold
to g o out gradually and silver gradually to come in to take its

Suppose that ultimately—say in a year—$100,000,000 of

gold should g o and $100,000,000 of silver were coined and issued
to take its place.

Could any change take place on that account

in the prices of commodities?

If so, how?

Can any Senator an-

And if that question can not be answered, let me further

inquire: If prices do not rise, how can our importations increase
sufficiently to take out any more gold?

But suppose that eventu-

ally all our gold left the country and went to Europe, would the
gold standard of Europe be then the same that it now is?


are, according to the report of the Treasury Department, $3,000,000,000 of gold in Europe.

A n influx of six hundred millions

would be an addition of 20 percent to that stock of money.

Is it

to be contended that that amount, added to the volume of money
in European countries, would not raise the prices of commodities

W o u l d the gold standard of Europe be then the same

gold standard that it is now?

Manifestly not.

The gold standard simply means the range of prices consistent
with the available quantity of gold money.

W h e n our gold had

all gone and entered into the circulation of European countries—
its place being supplied here by silver—would not the gold stand785


ard of those countries be altogether a different standard from
that of to-day?

Would it not be a much better standard, a more

beneficent standard?

W o u l d not the range of prices in Europe

be materially increased by the inflow of so large an amount of

W o u l d not a halt be called to the unjust increase in the

burden of debt, and would not our products exported to Europe
command much batter prices than they now do?

To what better

place could our gold go than to the markets in which we sell our
wheat, cotton, petroleum, tobacco, and meat products?
Meanwhile, as each dollar of silver took the place in our circulation of each dollar of gold as the gold went out, our prices
could not alter.

It will surely not be contended that a dollar of

silver could have any more effect than a dollar in gold.
Suppose, as I have said, that $100,000,000 of gold should g o out
every year.

Of this amount we should have $35,000,000 from our

own mines, which would leave $65,000,000 of our accumulated
stock to be sent out.

Hence, it would require ten years to send

out all our gold, even at the rate of a hundred million a year,
and even if that amount, when sent to Europe, had no effect whatever on prices of commodities in the countries to which it went.
But no one doubts that it would raise prices there, so that long
before one-half or even one-third of our gold could go to Europe
the range of prices would be such as to establish an equilibrium
between the two countries.

This would altogether stop the

outgo of gold; no man with any capacity for reflection can for
a moment doubt that that is precisely what would occur.


the demand for our gold would stop very far short of exhausting
the quantity in the country.
There is no country in which the upper classes are more luxurious than in Russia.

They are the most lavishly extravagant

people in the world in the purchase of all sorts of foreign luxuries.

Y e t they have had practically no money but paper money

for one hundred years.

They simply purchase the necessary

gold by means of the commodities they have to sell.

Does any-

body suppose that we can not get in like manner the few things
that we need abroad—for we need, in proportion to our population and wealth, less things abroad than any other people in
the world.



All the articles of prime necessity, the articles required for
the daily living of the masses of our people, are in surplus in
our own country, so that we do not need to buy them abroad.
T h e same is true of the larger proportion of our luxuries.



It is said that we ought not to separate ourselves from the rest
of the world by having a money different from that used by other

No one wants to separate our country from the rest

of the world.

People who live in separate houses do not neces-

sarily separate themselves from the rest of the world.


family has its separate house, and there are certain rules and
restrictions for the government of all.

That does not separate

them from the rest of the world or from the rest of the country,
or from the rest of the city.

In the long run trade between na-

tions is settled with commodities.

Nations could not go on sell-

ing everything and buying nothing.

They would soon have to

stop the process, because in a few years they would have no

Even the most fanatical of the gold men would have to

admit that 95 per cent of the business of the country, being domestic business only, there must be some medium retained in
the country by which the exchanges can be effected.


It is vehemently asserted that if we g o to a silver basis we shall
be placed alongside India ana Mexico.
I should like to know whether Senators really suppose—
whether their reacting of history and of sociology leads them t o
understand that the difference between the sturdy race that inhabits this country and the ryots of India and peons of Mexico —
is the standard of money that is used in the respective countries.
If that is the conclusion which they draw from their reading,
I must be permitted to express my amazement.
I have supposed that the difference arose not from the standard of our money, but the standard of our men and women—the
standard of the blood in our people, of the iron in their veins, of
the nerve, the muscle, the brain, and the brawn of our race.


have supposed we owe something to the experience of the thousands of years during which our ancestors have been struggling
up the rugged mountains, fighting for liberty, and achieving it.


I have supposed we owed something to our hope, our faith, our
aspiration, our unconquerable determination. If I am mistaken,
however, and if really there is any credit due to the standard of
money, I can still point to the first half century of the existence of our Republic, when silver money was the money of the
country, and when Washington, Jefferson, Madison, and other
great men laid strong and wide and deep the foundations of
a great nation.
Every schoolboy knows that the achievements of that time
have never been excelled in history.

I might even inquire

whether they have ever been equaled.

The subject would bear

elaboration, but I deem it of no importance.

Those who advance

the claim that by going to a silver standard the people of the
United States would be placing themselves alongside India, in
the sinister sense in which these claimants desire to be understood, do not themselves believe it, and in making the claim are
splaying upon what they suppose to be the credulity of our people.
The contention would be entitled to be called silly but for the
fact that not one of those who use it believe it.

It is wholly

A r e we to understand that if the people of India should now
adopt the gold standard they would place themselves ' ' a l o n g side " the United States—that is to say, that they would become
equal to the people of this country in intelligence, in enterprise,
in inspiration, in energy, in genius, in momentum, in power?
If it be true that it is the gold standard that invests the white
race with those qualities, it should invest the Hindoos with

T o state the proposition is to answer it.

The words 4' India " and '' Mexico " in this connection are mere
catch-words with which to distract the attention of people from
the real issue, and their use is proof of a pitiful lack of merit
in the argument for the gold standard.
According to the admissions of the advocates of the gold standard, the United States are now indebted to silver alone for the
performance of all the functions of money in this country, gold
being either hoarded or held in the banks when it is not going
It must be pretty good money that will keep always in circu785


lation—performing' the service for which money is useful.


money that should he praised is the money that remains in circulation, and not the money that is hoarded or goes abroad.
I recollect hearing a discussion some twenty years ago as to
the superior merits of gold as money.

The gold-standard cham-

pion had been for some time expatiating on the bupposed advantages of the money he advocated.

The old farmer with whom

he was discussing told him that he remembered well when the
war broke out, and that when the reverberations of the first gun
came from Sumter the eagle on the ten-dollar gold piece shrieked
like a cowardly fowl and fled the country, while the greenback
shouldered the musket and went to the front, where it stayed till
the war was over.

He said gold might be good money, but it

would not fight.

Mr. M c P H E R S O N .


May I ask the Senator a question in that

Mr. JONES of Nevada.
Mr. M c P H E R S O N .

It has been constantly contended by

those who entertain the same views in regard to this question
as the Senator from Nevada that Russia, Austria, and all the
great countries of Europe were constantly strengthening their
gold reserves to prepare for war.

I wish to ask if gold will not

buy the munitions of war, if it will not keep troops in the field,
if it is not to be preferred to paper or silver, what becomes of
the argument we have so often heard here that the gold of the
world is being absorbed in the treasuries of the great nations
who are preparing for war?
Mr. JONES of Nevada.

I will say to the Senator that the

great war fought between Germany and France a few years ago
was fought on the part of Germany with silver money alone.
T h e Napoleonic wars, in which Great Britain took a great part,
were all fought with paper money.

No great war in history was

ever fought with gold; and now, when the nations of Europe are
drawing gold to fill what are called their war chests, the object
of each is to embarrass the other with regard to its



is a financial war, which often precedes the pomp and circumstance of the real war.


A s I have said, a money that will circulate, of whatever material it may he composed, is the best form of money.

Some peo-

ple mistakenly depreciate a money that will circulate in their
own country and not in any other.

But although the money of

the United States may not circulate in any other country, it will
have recognition there to the extent of our export trade, which
is not only as good for our purposes as circulation there would
he, hut, indeed, very much better.
No mind not blinded by prejudice can doubt that if the United
States should altogether get rid of gold and send it to Europe
and itself g o to the silver standard exclusively, it would be an
enormous stimulus to the exportation of commodities from this
In the first place, the gold would, as I have said, largely increase the volume of money in Europe, and as a consequence the
prices of our commodities sent there for sale would rise.


would not only reward our farmers and planters with better
prices, but would stimulate our entire export trade.


would not then be so much difference between gold and silver as
there is now.

W e r e the United States to make silver their only

money the rise in the purchasing power of gold would be arrested.
Mr. V E S T .

W i l l my friend permit me to ask if his attention

has been called to a dispatch published this morning from Bombay in regard to the effect upon prices in India of the demonetization of silver by the English government in India?
Mr. JONES of Nevada.
Mr. V E S T .


This dispatch comes from Consul-General Jam-

T h e effect, as stated in the article published in this

morning's papers, is that in India there is no monetary panic;
that silver continues to buy as much of all commodities as before
the change in the mintage by the English Government; that
gold has gone up enormously in value while tjae prices of commodities have fallen.
Mr. JONES of Nevada.
Mr. V E S T .
Mr. H O A R .
silver do?

In gold?

Yes; in gold.
Then what harm does the demonetization of


Mr. V E S T .

This report goes to show, what I understood the

Senator from Nevada to say in the early part of his argument,
that while silver remained equal in its purchasing power ancl
would buy as much as before, gold has gone up.
Mr. M c P H E R S O N .

Does not the article state that that has

occurred in Bombay and in Calcutta?

Does it state that gold

has gone up through the interior of India?
Mr. V E S T .

It has gone up, as I understand it, in India. I do

not know anything abouc any particular locality.
Mr. JONES of Nevada.

That is undoubtedly true, and the

more it is investigated the more perfectly clear it will become.
[ A t this point the honorable Senator yielded the


Wednesday, October 25, 1893.
Mr. JONES of Nevada.

Mr. President, I presume it will be

obvious to Senators that those who believe in the continuance
of the purchase of silver under the Sherman law until a law authorizing unrestricted coinage can be enacted are not making
speeches with the hope of changing any votes in this body; but
we are determined in this great contest to place in full before
the people of the United States the reasons that lie at the foundation of the question.
The time I had intended to occupy has been very much lengthened by the various questions that I have been called upon to
answer, but I shall proceed as rapidly as possible with what I
have to say.



Some advocates of the gold standard inquire, with a sneer,
h o w it is that free coinage of silver is going to put money into
the pockets of the workingmen?
labor for money.

They say that men must give

T o that we agree.

In advocating the free

coinage of silver men do no.t attempt to put money directly into
anybody's pocket.

W h a t we are attempting to do is to secure

the adoption of a national policy that will enable business to be
conducted on steady prices for the products of labor.

If em-

ployers can not conduct business without incurring loss, idle men
can not find employment.

They will earn their money if given


the opportunity.

But if there is not enough money in the com-

munity to prevent falling prices, it is impossible that men can be
kept in uninterrupted employment.
W e are simply attempting to secure the adoption of laws that
will permit the issue of metallic money, as has been the custom
of all time.

If we are to have metallic money, how is it to be got

into circulation?

How do people get gold money?

have to work for it?

Do they not

Men have to work even for bank notes,

which have none of this valuable quality which so many call
intrinsic value."
With a correct monetary policy, those who now earn nothing
will be set to work, and will get their share of the money in the
community without depriving others of an equal opportunity to
get such share as those others may be entitled to.
Because a law against stealing does not put money directly into
any man's pocket, is it therefore useless to enact such laws?


cause the preaching of the gospel does not put money into the
pockets of the multitude, must, therefore, the preaching of the
gospel be dispensed withy

Because the observance of morality

or justice puts no money directly into the pockets of people, must
we, therefore, cease the inculcation of those qualities?


trouble ourselves to commend to our youth the advantages of
education, intelligence, uprightness, honesty, equity, and fair
dealing, because, after all, as the gold advocates inform us,
money can be made only by working for it.

Must not people at-

tempt by proper laws to establish correct conditions?
If gold monometallists are right, then the Decalogue is a superfluity, and the Sermon on the Mount mere exuberance of emotion.

No one can see very clearly how either of those puts money

directly into the pockets of the people.

Let the bankers have

charge of the issuing of the money of the country, and they will
be happy.

The people of this country have determined, how-

ever, that the issue of money, which is a function of sovereignty,
shall be exercised by themselves, through their Government,
and it is useless for the banks to attempt to override the will of
the people,












Others of the gold-standard advocates, among whom are found
the New Y o r k bankers and the President of the United States,
entertain great fear that if the silver-purchase law is not repealed
the workingmen will be paid in depreciated money—money of
low purchasing power—while the employers will keep the gold
money for themselves—because it will, as they suppose, have
higher purchasing power.
I wish some of them or their friends had taken the trouble to
indicate how this result was to be brought about, so that we
might have before us the modus operandi.
If silver dollars were to become depreciated, in relation to
what would they become depreciated?

W o u l d they become de-

preciated in relation to the products of labor?

Does anybody

suppose that if the products of labor bring a higher price, the
wages of the laborer will not rise with the price of the products?
Nothing can be clearer than that the wages of labor must in the
long run fall with the prices of the products of labor, and that
they must rise with rising prices for those products and with
the modern organization of labor the rise of wages must promptly
follow a rise of prices.
In the latter case not only does labor rise, but the universal
testimony is that it maintains the rise for a considerable time
after the general range of prices of commodities has fallen, and
this by reason of the natural indisposition of the working classes
to have their wages reduced, and their stubborn opposition to
any proposition looking to that end.
W i t h the article which is the product of labor persistently
falling in price, how can the employer keep on paying the workingman a dollar that is constantly growing more valuable?
How could anybody afford to continue manufacturing if he
must pay wages at the former rate while the product of the
labor is falling in price?
There was a time, Mr. President, when the metal that was becoming the cheaper and more plentiful was not silver, but gold..
W h a t was the belief at that time regarding the probable effect
of such cheapening process on the wages of the workingman?


And what class of the community was then deemed entitled to
commiseration owing to the growing cheapness of the money?












Shortly after the discoveries of California and Australia Chevalier was a member of the council of state of the usurper, Napoleon III.

He foresaw, as he supposed, great evils to follow from

those discoveries—from a flood of depreciating money to flow into

He wrote a work on The Probable Fall in the Value

of Gold.

Did he entertain the fear that the workingman would

suffer by being paid in the depreciated money?

Here is what

he said on that subject:
If we would particularize the persons who will be more or less deeply
affected by the fall in gold, we have only to select those whose income will
not find itself augmented naturally and by a self-adjusting process, in exact
proportion to the fall, and by the very fact of the fall, in gold.

W h o are those persons that Mr. Chevalier, in the largeness
of his heart, commiserates?

A r e they the workingmen?


his answer:
The-national creditor—

H e says—
is the characteristic type of this class of sufferers.
All those p e r s o n s -

He continues—
whose incomes, expressed in monetary units, remain the same would be injured by the change to the extent of the half of their income, all other things
being equal.

H e was arguing that gold would probably depreciate one-half in
purchasing power.

It was for the national creditor that his sym-

pathies were aroused, and it is for the national creditor that the
sympathies of the bankers are now aroused.
All commodities,—

He continued—
excepting gold [the money that was growing cheap] and every kind of
property excepting that of which the income is, from the present, fixed, as
is the case with government funds ought from the moment that the monetary crisis is terminated, to have attained in a gold currency do uble the price
which they are at present worth.

His opinion then was that the price of commodities and of
property, except government funds, would " d o u b l e in p r i c e . "


H o w was it with wages—the reward of the workingmen?


they to continue low as before while prices were rising?


alier says:
It will be the same eventually ivith the wages of labor [that is to say, wages
would double], and with all personal services, whether rendered in the fact o r y or on the farm or from the liberal professions.

And in a summing up distinguished for clearness of statement
he concludes this portion of his remarks with this paragraph (I
desire to call the special attention of the Senators to this, so that
they may note the classes of persons whom he includes):
" Thus, as a definitive analysis," he says, " the proprietors of lands, houses,
and other real estates, manufacturers, merchants, and their auxiliaries of
every kind: public functionaries of all ranks: and also those who follow the
different learned professions, will all find themselves in the end compensated
in the new state of things with advantages whicn they now enjoy, all other things
being equal." " I t is another class of persons," he says, " w h o m we have
previously defined in a general way (the national creditors) who have to submit to a sacrifice in the proportion to the fall in the precious metal.''

This enumeration of persons who can not be injured by a falling value or purchasing power in the monetary unit is sufficiently comprehensive to include all workers, as contradistinguished
from idlers, all laborers, whether with hand or brain, and the
employer as well as the employe.


In discussing the welfare of the workingman, in connection
with the subject of silver money, the bankers and the President
talk as if wages were fixed, either by the mere dictum of the
employer or else by some hidden and occult process, or some
immutable law, so that no matter what might be the purchasing
power of a dollar, the wages of labor must remain what they are.
This means that if the dollar came to be a cheaper dollar the
workingman could get no greater number of dollars, and if dearer
he would get no fewer, while in either case all the people
would be kept uninterruptedly employed.
If the value of the dollar could be kept constantly increasing,
and if, notwithstanding this, the workman could get, in wages,
the same number ot dollars that he got before, then the secret
of his prosperity has been discovered.

If the dollar which he re-

ceives in wages is each year to buy more and more of the products of labor, while he suffers no diminution in the number of


dollars received, and if, as a consequence, none of his fellows are
discharged, then it is to his interest that dollars shall increase
in value until each shall have a purchasing power, say one hundred times as high as at present, so that the article which now
costs $100 may he had for $1.
Of course this increase of purchasing power in the dollar can
not be had without a great reduction in the number of dollars in
circulation relatively to the numbers of the population and the demand for money.

Under this theory what a blessing it would be

to the workingmen of the country if the Secretary of the Treasury
should discover some method of taking out of circulation and locking up in the Government vaults nine-tenths, or even a larger proportion, of the money of the country!

The more he could get in

the greater would become the value of the dollars left out.
The value of money—

says John Stuart Mill—
other things being the same, varies inversely as its quantity, every increase
of quantity lowering the value, and every diminution raising it in a ratio
exactly equivalent.

If the repeal of the Sherman law is to be accomplished in behalf of the workingmen, if the country is to be deprived of the
three millions or so which that law has added monthly to the
circulation, we shall doubtless next have a proposition looking
toward the calling in and cancellation of all the notes issued
under it, with the view of further increasing the value of the
dollar in the so-called interest of the workingman, to be followed by other propositions of like character, all in the interest
of an increasing value in the dollar, in order that it may be
made a better dollar.
W h a t is wanted in the dollar, Mr. President, is that it shall
neither increase nor diminish in value, but shall, as nearly as
possible, be unchanging through time.

This would hurt neither

debtor nor creditor.



W e have seen what were the prognostications of Chevalier as
to the probable results to be expected from the increased money
supply with which the world was blessed during the middle of


the century.

A s to the actual results there is ample testimony.

I will cite the one author who more vividly than any other has
left a picture of the times.
Sir Archibald Alison says:
The annual supply of gold and silver for the use of the glohe was, by these
discoveries, suddenly increased from an average of £10.000,000 to one of £35,000,000. The era of a contracted currency, and consequent low prices and
general misery, interrupted by passing gleams of prosperity, was at an
end. Prices rose rapidly, and rose steadily; ivages advanced in a similar proportion, exports and imports enormously increased, while crime and misery
rapidly diminished; emigration itself, which had reached (in 1852) 368,000 persons a year, sank to little more than half that amount. Wheat rose from 40
shillings to 55 shillings and 60 shillings; but the wages of labor advanced in
nearly as great a proportion: they were found to be about 30 per cent higher
on an average than they had been five years before.
In Ireland the change was still greater, and probably unequaled in so short
a time in the annals of history. Wages of country labor rose from 4 pence
a day to one-and-six-pence or 2 shillings; convicted crime sank nearly a
half; and the increased growth of cereal crops under the genial influences
of these advanced prices was for some years as rapid as its previous decline
since 1846 had been. At the same time, decisive evidence was afforded that
all this sudden burst of prosperity was the result of the expanded currency,
and by no means of free trade, in the fact that it did not appear till the gold
discoveries came into operation, and then it was fully as great in the protected as in the free-trade states.

Those were the effects of an increased volume of money upon
the condition of the working classes forty years ago, when labor
was wholly unorganized, and employers had, to a far greater
extent than at present, the determination of the rate of wages.


W i t h the modern organization of labor, the question, W h a t
shall be the wages of the workers in any occupation is not wholly
a question for the employer.
It is his right to close his establishment if he can not work it
at a profit, but if he will keep it open it must be on terms at least
acceptable, if not welcome, to the workers.
T h e growing strength, efficiency, and intelligence of the workingmen have for some time been depriving the employer of the
dogmatic and autocratic power which in former periods characterized his relations with his employes.

T h e alertness of the

workmen and their disposition to assert their right to a fair,
and even a growing, share of the products of their labpr, will
be seen from an extract from the proceedings of the British
Royal Commission on Labor which has only recently completed


its labors.

Before that commission, sitting at Westminster Hall,

London, a large number of witnesses were examined, among
them a secretary of an organization of working people, comprising 200,000 persons—the Weavers 1 Association of Northeast Lancashire.

This gentleman, Mr. Thomas Birtwistle, was asked by

one of the commissioners:
When there is a rise in prices, by what means do the operatives get their
share of such a rise?

To this question Mr. Birdwistle answered:
By meeting and discussing the question with the committee I have described before, the joint committee (a committee consisting of six employes
and six representatives of the operatives), Of course, we each of us use our
best arguments; we produce facts as far as we are able, and prove that the
profits of the employers are such that they can afford to do this.

He was further asked:
Do they ever give it to you without your asking it?

T o this he replied:
A. I only remember one case; they did once, some twenty or twenty-five
years ago.

(Minutes of Evidence, Group C, page 59.)
This period was during the rise of prices—before the demonetization of silver.
From these questions and answers it is manifest that the laborers are keenly on the alert and keep a watchful eye on the
prices of the products of their labor, so that they may be able
promptly to take advantage of a rise.

Not only this, but so de-

termined are they not to be deprived of anything which they
deem their due that even when prices are falling they are indisposed to submit to a reduction of wages which the employers
deem absolutely essential in order to keep the establishments

A question on this point was directly put to Mr. Bird-

wistle by one of the members of the commission, who first reminded him of the testimony he had given regarding the increase of wages.
Q. I think you went on to say in answer to Mr. Mawdsley that if business
were to improve you would of course look for an advance in wages?

T o this the witness answered, " C e r t a i n l y . "
Q. But if, on the other hand, there came a period of depression, y o u would
not allow your wages to g o down?


The answer to this question was:
No, I did not say " allow," I simply said we should do our hest to prevent
it. (Same evidence, page 64.)

These answers sufficiently attest the spirit which animates
the working classes of Great Britain regarding the increase and
reduction of wages.

That spirit is further attested by the fact that the number of
strikes in that country in 1889 was 1,145, of which those for advance of wages numbered 768.

Of these 768 it is a significant

fact that the number recorded as being wholly unsuccessful is
but 76, being only 10 per cent.

The demands for higher wages

were, therefore, wholly or partially successful in nine cases out of
ten; and taking the entire number of strikes from all causes in
that country for that year, the number declared of record to be
unsuccessful is only 207—so that the workingmen were either
wholly or partially successful in four-fifths of the cases.
In Germany, for the year ending April 30,1890, the number of
strikes and lockouts reported, of which particulars can be ascertained, consists of 1,075.

Of these the number resulting favor-

ably to the employers was 187; those favorably to the workingmen 420, and the number compromised 468.

If we credit the

workman's side with one-half of the number compromised and
the side of the employers with the other half, it will show 644
strikes out of 1,075, or 60 per cent in which the workmen succeeded either wholly or partially.
T h e growing self-assertion of the workers is to be seen even in
Italy, in which the strikes in 1878 were but 22, while in 1890 they
were 160.

In 1878, the number of strikes in that country arising

from demand for increased wages were but 25 per cent of the
whole, while in 1890 those arising from the same cause were 50
per cent of the whole.
In France, as stated by the eminent statistician, Maurice
Block, the number of strikes of workingman prior to 1844, ranged
from 20 to 50 per annum.

In the year 1889 alone they numbered

These are evidences of the unmistakable trend of labor in Europe towards larger self-assertion and a determination to obtain


what to the laborers appears to be a fair share of the products;
of their labor.


It is not to be supposed that the workers of the United States
are less alert and attentive to their own interests than those of
other countries.

Accordingly, we find, by the third annual re-

port of the United States Commissioner of Labor, Col. Carroll
D. W r i g h t , that the number of strikes in this country in 1881
was 471, while in 1886 the number was 1,411.
A n analysis of all the strikes in the United States from 1881
to 1886 inclusive, made by Col. W r i g h t , shows that strikes having for their object simply an increase of wages occurred in
9,439 establishments.

Of these the workmen were completely

successful in 6,229, or 66 per cent.

In 797 others, or 8.43 per

cent, they were partly successful.

So that the workers suc-

ceeded, either wholly or partially, in 75 per cent of the establishments in which they struck.

In only 25 per cent of the estab-

lishments did the strikes for increase of wages wholly fail.
During the pendency of this debate we have seen in the morning papers an item of news from Milwaukee, reading as follows:
If the Chicago, Milwaukee and St. Paul Railroad Company insists on cutting wages there will be a strike by the six thousand employes in the operating departments. This is the decision of the grievance committee of the
Brotherhood of Trainmen.

W e can hardly infer from all these that the wages of the working classes depend on the employer.
I must be permitted to distrust the anxiety of many of these
gold-standard theorists with regard to the welfare of the workingman.

If the silver dollar were really a cheap dollar—cheaper

than a gold dollar—many of those who now express anxiety for
the laborers would be the first to welcome it.

If they could keep

for their own purposes a dollar of high purchasing power, and
have at command, as a special fund for the payment of wages, a
supply of dollars of low purchasing power, we should find them
sending up petitions to Congress for the fr^ee and unlimited coinage of depreciated dollars.
The workers do not seek the commiseration of the bankers with
reference either to the amount of wages they are to receive o r


the quality of the money in which those wages are to he paid.
They are the guardians of their own rights, and will so remain.
They are citizens of the United States, imbued with all the manhood and independence which that term implies.
W h e n it is said that the first thing which these depreciated
silver dollars would do would be to find their way into the pockets of the workingmen, it seems to me that, taking into account
the enormous numbers of workingmen who are constantly idle,
owing to lack of profit in business, the greatest blessing that
could occur would be to have such a quantity of dollars of some
kind in circulation as would increase with the growth of population and business.

If that were done, the dollars would be sure

to find their way into the pockets of men who are willing to
work, but for whom, even in a country that is not yet half finished, there is no room, owing to the persistent fall of prices,
which disorganizes industry.
The greater the number of dollars that get into the pockets of
the working classes the better. It is not enough that dollars shall
getin to the pockets of only such persons as, under the operation of
the gold standard, are able to find employment.

It can not be said

that a nation is prosperous when a part only of its people are
employed—even if that part should be employed at wages so
h i g h as to include the laborer's entire contribution to the product.

The working classes will never be prosperous until the

employer is found seeking workmen with the same zeal that
workmen are now seeking employers.

That condition of affairs

will be brought about by an intelligent regulation of the money
system of the country so that the number of dollars shall always
increase in accordance with the increase of population and business.
The constant trend of the laboring classes in all countries
is to combination—a direction in which capital set them the example.

The process is certain to continue and to result in the

laborers getting a larger and larger share of the contribution

they severally make to the joint product

and labor.

of capital

T o the extent that they pursue this course they

must impinge upon the profits of the employer until a stage is


reached at which an equilibrium between wages and profits is





W i t h a constantly shrinking volume of money, however, there is
little hope for employer or employed.

The leading factor in all in-

dustries of the present day being the time contract, it is impossible for employers to see their way to meeting their obligations
while the money unit is obtaining ever-increasing control over
commodities—over the products of labor.

In many industries

great strikes have recently been undertaken in order to prevent
reductions of wages, rendered

necessary, as the employers

stated, because of the fall of prices.

Such a strike was that of

the Lancashire operatives, in which tens of thousands of workers opposed a proposed reduction of 5 per cent in their wages.
After a struggle of five months, throughout which the employers insisted that with falling prices they could not continue
manufacture at the old rates of wages, the men were obliged
to accept a compromise by which the proposed reduction was divided, so that they were compelled to submit to a lowering of
per cent.
Later still we have seen 350,000 coal miners of Great Britain
going out on strike rather than submit to a proposed reduction
of 25 per cent in their wages, rendered necessary, as the employers asserted, by the long-continued fall in the prices of their
W h i l e other adverse influences in business may be foreseen
and guarded against, the most far-sighted computations are
brought to naught by the subtle power of an increasing value in
the money unit.

So long as this increase continues it is impos-

sible for business enterprises to be anything but games of chance,
in which men the most reckless and unconscionable outwit the
most honorable and conservative.
T h e working classes may battle for better wages, but when the
fall of prices reaches the point at which profits vanish they must
give up the fight and accept the reduction or be relegated to

A l l over the European world, as well as in this coun-

try, the maximum of wages consistent with the gold standard
7 8 5 — 22


appears to have been reached.

Everywhere we observe trouble

between employers and employes.

Everywhere we see multi-

tudes of men rendered idle, owing to want of profit in business—
a want of profit due to the persistence of the fall of prices.
The bane of labor is the idle laborer.

In this enlightened and

progressive age, in which people are learning to adapt means to
ends, it is pitiful to see millions of men always out of employment, and it is useless to hope for any improvement so long as
the value of the money unit is increasing and acquiring greater
and greater control over the products of labor.

It is not meant

that the same millions—the same identical persons—are always
out of employment, but while the persons vary, the number of
the idle always reaches millions.


On the very day that Mr. Gladstone was making his speech in
the House of Commons, in February last, ascribing the prosperity of Great Britain—meaning thereby the creditor classes of
Great Britain—to the gold standard, the official returns show
that of the trades unions of skilled workmen reporting to the
board of trade, comprising at that date 280,377 members, there
were out of employment 26,324, or 9.49 per cent.

A s these were

distributed all over the country, the number of idle men among
such unions as did not report to the board of trade must have
been a similar percentage.

Inasmuch, then, as in round num-

bers 10 per cent of the skilled and organized artisans of Great
Britain were out of work, we can not assume any less number of
the unskilled and unorganized to have been so, and there being,
according to Mr. Giffin, thirteen million two hundred and seventy-seven thousand workers in the Kingdom, we are warranted
by the official figures in placing the number of the involuntary
idle in Great Britain at 1,327,700.
If we add to these the number of persons naturally dependent
upon them for support—a very small average of which would be
two persons to each worker (and I believe it to be a larger number)—we find, including the workers themselves, 3,900,000 persons, or, in round numbers, 4,000,000 persons, the skilled artisans of Great Britain and their families, without means of livelihood, in a country whose boast it is that it has no money but.


" sound " money; no standard but the gold standard.

Y e t these

are the men upon whose labors rests the renown of Great Britain.


In comparison with the services rendered by these, the services of her generals, her admirals, her armies, her navies, and
her statesmen, upon which the literature of England spreads so
much hazy and questionable glamor, are as nothing.

T o the

skill and the genius of her artisans is due the civilization of E n gland; not to the cunning of her so-called financiers, the greed
of her money-lenders, or the cupidity of her creditor classes.
The idleness of 10 per cent of her workingmen is a misfortune
of incalculable weight, yet it is recorded in a news item of half
a dozen lines in England's leading economic paper, and goes
wholly unnoticed in the great dailies, in which a column or two
of space may be given to an attack of the gout on a duke or an
earl, and an entire page to a horse race.
T h e large proportion of the idle men in England can not be
ascribed to temporary derangement of the industries of that
country owing to the passage of our tariff bill of 1890.

It is usual

to find enormous numbers of persons out of employment in Great

I do not r e f e r t o t h e " Submerged Tenth," the 3,000,000

unfortunates who are always on the verge of starvation.
fer to the respectable artisan class.

I re-

A s far back as 1886—four

years before the passage of the McKinleybill—the records of the
board of trade show a percentage of idleness even higher than
10 per cent.
It must be manifest that willing and capable workers would
npt thus be thrown out of employment except by falling prices.
Profit is in all cases the inducement to production.
ceases production ceases.

W h e n profit

If, therefore, production be not sus-

tained by steady prices for the products of labor it is certain
that workmen will be relegated to idleness.
There can be no doubt that before the development of labor
organizations many employers were making undue profits, and
getting a larger share of the products of industry than they
were entitled to, in comparison with the share of the workman.
But as the organization of labor became more perfect, then, in


response to the imperious demands of the workers, wages gradually improved.
All great institutions of industry have time contracts stretching into the future, which they are under hond to fulfill by or before specified dates, so that few such institutions can afford to
resist the workmen's demand for increase of wages, so long as
such demand is one not inconsistent with their continued operation.

W h e n closely pressed, however, the employer often seems

to yield—that is to say, he grants the increase of wages, and
then discharges a number of his men—resorting to all sorts of
small economies to render more efficient the labor of those who
are ret lined.
People do not perceive that if, by reason of an increase of 10
per cent in wages 10 per cent of the workmen are thrown out of
employment, a f a r greater injury results to society than if the
wages of all were permitted to remain unaltered, or even than
if they were to a moderate extent reduced.
W i t h all the workmen employed there would be 100 per cent
of production.

W i t h only 90 per cent employed there would be

but 93 per cent of wealth produced; yet from this 90 per cent all
men must live—including the workmen themselves and their


W h e n the workers of the world express dissatisfaction with
present conditions they are reminded of the fact that they are
better off than were the workingmen of former times, that their
condition is far ahead of that of the laboring classes of the last
century, and the century before.
tion at issue.

But this is not the real ques-

It is not whether the man now living is better off

than were men of his class who lived at some remote period of
the past; but whether the man now living—the man now producing the wealth by means of which alone all other classes in
the community can continue to exist—is, all things considered,
receiving his own fair share of the products of his labor.
The question is whether the working classes, all of them, and
not merely a portion of them, are able to keep uninterruptedly
atwork, and to receive for their work that compensation w h i c h
comports with the advances in invention, in science, in art, and


in government.

In other words, are they as well off as the

methods of production warrant?
My conviction is that when we have a correct system of money,
the working man, instead of having one spare dollar to protect
himself against the exigencies of the day, will have ten.
W o r k i n g m e n have the same intuitions as other men; they desire to have some money in their pockets.

A t the least calcula-

tion, under conditions as they should be, in this new and great
country, our 22,000,000 workers would absorb in pocket money
alone, to be constantly held against contingencies, not less than
a hundred million dollars, which would be $5 per capita.


would absorb $100,000,000 of silver to-morrow.
Mr. G E O R G E .

W h a t is the Senator^ statement?

Mr. JONES of Nevada.

That with every laboring man kept

constantly at work, and at such rates of wages as should be just,
not only to himself but to his employer, considering the risks of
capital, the interest on money, etc. there would be a constant
tendency to an increase of the amount of money statically held
in the pockets of the people.

If you will go around among work-

ingmen to-day you will find them carrying perhaps 10 cents, 25
cents, or at most perhaps a dollar in their pockets.

W i t h un-

failing' constancy of employment at just wages there would be a
continual advance in the amount thus carried by those men to
protect themselves against the emergencies of the day.

With a

five-dollar piece instead of 25 cents in the pocket, $100,000,000
would be absorbed by the community before prices of commodities could in the least exhibit a rise.






Large numbers of the people even of this country are doing
business by barter, owing to the lack of a sufficient quantity of
money; and this is a most extravagant method of doing business.
W e r e they to do business with money, an enormous amount of
money would be thus absorbed before a rise in prices could take
place, and without a rise in prices there could be no such thing
as a diminution in the value of the money unit: because, to say
that prices rise is but another way of saying that the money
nnit is diminishing in value.


A s I have already stated and as is well known, after the discoveries of California and Australia, when the money volume of
the world was doubled, the resulting increase of prices of commodities was only 20 per cent, distributed most gradually over
a period of twenty years.

The reason for so small a rise of prices

following so great an increase of the money volume is to be found
in the fact that before prices can rise the first effect of the new
money supply is always to quicken the movement and increase
the volume of business—cutting out new channels of enterprise
for itself and widening and deepening those already existing.
This process calls from idleness to labor every man who has
been unemployed, which fact alone absorbs an enormous amount
of money. Before any rise, therefore, could take place in prices
there would be an enormous increase in the number of transactions and a like increase in the number of men put to work.


instead of having a million or two million of men idle in this country, ali were at work who were willing to work, a vast increase in
tne amount ol money would be needed before any increase could
possibly take place in the general range of prices, or any diminution in the value of the money unit.

W h e n , therefore, there

is a large increase of money in proportion to population, without
a corresponding advance in prices, it is a signal that that wonderful instrumentality, money, is beginning to operate—beginning
to perform its great function of setting every energy in motion
and putting every idle man to work.

It is then that great enter-

prises are undertaken—great projects, stretching far and wide,
giving opportunity for the exercise of all the activities of the

Men have courage when satisfied that prices are going

to be firm in the future.
After a long period of shrinkage in the volume of money, comdared with demand, an enormous amount of new money would
be absorbed as soon as all the people began to be employed and
all the energies of this great country to be called out.
Therefore I say we need have no fear whatever of the coinage
of all the silver there is in sight, which can not exceed $25,000,000.

The effect of an increase now of $100,000,000, $200,000,000,

or $300,000,000, were it possible to obtain so much, would be like


that of rain upon the parched and thirsty earth.

It would he ab-

sorbed as fast as it could come, with the most fructifying results.
Before any rise of prices could take place every department of
industry would be enormously stimulated.
The working classes are specially benefited by increases of the
volume of money.

Referring to the effects upon those classes of

the increase of the money volume of the world by the California
and Australia discoveries, Prof. Cairnes (Essays in Political Economy) has demonstrated that the addition of 40 per cent to the
money volume of Great Britain between 1851 and 1859 was prevented from affecting the prices of commodities, except in the
most gradual and infinitesimal degree, not merely by the stimulus
to business, but by reason of the increase in real incomes resulting to the industrial classes as a consequence of the increased
production of gold.

He demonstrated that the tendency of all

increases in the volume of money was to effect a larger proportionate distribution of money among the working classes.
The true test of the prosperity of the people is their ability to

No people can have the highest capacity for con-

sumption while large numbers among them are unemployed.
W i t h steady prices, or prices having a slight tendency to rise,
employers will be seeking workmen with all the zeal that workmen are now seeking employers.


As I have stated, the great impediment to the progress of the
working classes is the idle man.

W h i l e large numbers are hun-

gry and unemployed, it is impossible for organization to accomplish the objects it has in view.

Hence the task which natur-

ally precedes all attempts of workingmen to obtain an advance
that shall be real, rather than apparent, in wages is the adop
tion of such national policies as may result in putting and keepi n g every man at work.
Computations as to rates of wages are, and will continue to be,
wholly incomplete and misleading until side by side with them
are placed the figures which show the number of men who are
living in enforced idleness.

Our statisticians take note of wages

as they are, for those who are at work.

They make not the slight-


est attempt to ascertain the number of the unemployed.


this is done all calculations of wages are vain.
Enormous numbers of men are at all times to be found ready
to take the places of those who g o out on strike, and this, too,
in a country whose development instead of being complete, has
only just begun.
On the occasion of the strike on the New Y o r k Central Railroad at Buffalo some months ago, although all the statisticians
and orators of the gold-standard school had for some time been
telling us that there was no suffering in the country, that our
prosperity was never greater, it was seen that the railroad company had no trouble in supplying the places of the strikers.
The same is true of the strike at Homestead, Pa.

It is well

known that at that place a very large number of men of high
skill were employed, and that to take their places an equal number of idle men of like skill were sought and were found.


strikes, therefore, both at Homestead and Buffalo, proved to be
complete failures.
W h e n large numbers of men are found standing ready to take the
places of those who strike it means more than appears upon the surface as to the numbers of the unemployed.

It means not only

that the number actually needed to fill the places of the strikers
are idle, but a very much larger number.

For such is the esprit

de corps of the working classes that men must be at the point of
starvation before they will take the places of their fellows who
are struggling for what they deem their rights—struggling for
the elevation of the entire body of workers, including that of
the men who take their places.
Men who undertake to fill such places know that they incur
the hatred of the entire class to which they belong, and would,
under ordinary conditions, hesitate a long time before subjecting themselves to so severe an ordeal as the ostracism of themselves and their families.

There is among the great body of

workers a class pride that deters each from injuring all by filling places under such circumstances.

Hence, we may be assured

that when, on the occasion of an extended strike sufficient men
are found without difficulty to fill the places of those who have
engaged in what they feel to be a struggle for life or death, the


number who take their places form but a trifling proportion of
the whole number out of employment.
W h e n compelled to admit that large numbers are chronically
idle, the advocates of the gold standard take refuge in the cynical assertion that in all communities a number of men will be
found who do not wish to work, and that their idleness is the result of their own folly or improvidence. The statement that men
prefer idleness to honest labor I consider a slander on the working classes.

These are the statements of the political philoso-

phers of gold-standard countries, resorted to in order to account
for the enormous proportion of men whom the gold standard
relegates to idleness, and keeps there—a standard which is the
symbol for the concentration of wealth and the distribution of

By its diversion of money from the paths of industry

into the great centers of speculation, it takes from the labor
market and uses in the bond and stock market the material
which is the lifeblood of industry.
The idea that men prefer to beg rather than to work is altogether an idea of European origin, and is contradicted by all
the experiences of this new country.

The very classes that in

Europe have been charged with incorrigible laziness, prove, on
coming to this country, that in their European homes they were
merely the slaves of conditions, and that they can be as industrious as any other class of the community.
W h a t e v e r amelioration occurs in the condition of the workingman occurs because he is year by year increasing his demands.
He will continue to increase those demands until it becomes
clear to him that he receives his fair share of the products of
his labor.

So long as the employer's profits will warrant the in-

crease, the workman will exact it, until the equilibrium between
profits and wages is reached.

This is inevitable. But where, with

falling prices, the employer is already on the verge of loss (and
as money shrinks in volume his profits tend to disappear) no
effort on the part of the workers, whether by strikes or otherwise, can permanently secure to them a higher scale of wages.
W h e r e the strikes are warranted by conditions of business they
will be successful.
bly fail.

W h e r e not so warranted, they must inevita-


W h e n it is said that the prices of the products of labor could
increase all along the line without the laborer exacting his share
of the employer's increased profits, I should like to inquire where
the laborer is supposed to be while all this is going on?
sumed that he is asleep?

Is it as-

The history of labor within recent

years does not warrant this assumption.
Is it for a moment to be supposed that American workmen
stand in such awe of their employer that they can not contrive
to obtain from him any fair proportion of this increase in the
price of the commodities which are the products of their own
In other words are we to understand that the prices of inanimate things—things that can not think—are to rise, while the
price of flesh and blood—the compensation of living, thinking,
human beings, who make those inanimate things, can not rise?
The great object of a nation should be to have such national
policies as may lead to the uninterrupted employment of all its

A country can not come to harm wThen its people are all

at work, when every forge, anvil, and loom is performing its
function—when every hand and every brain is busy.
Whenever there is enough money in a country to keep prices
of commodities firm, the productive energies of the people are
fully occupied, and business profits are reasonable, so that employment is continued and continuous for all.

W i t h a proper

volume of money comes a proper distribution of the results of
Under proper monetary conditions in this country there would
be opportunities constantly offering for every American worker
to invest his surplus earnings in the industrial or manufacturing
establishment with which he may be connected.

This would

give him an interest in the work in which he is employed—an
interest far beyond the ordinary interest of a wage-earner.


would be a spur to industry and thrift, and would increase the
true permanent wealth of the country.
T h e aim of political economists seems to be to deal with products after they have been made—after they get into the hands
of those who did not produce them.


The entire learned world appears to be applying itself to the
task of remedying complaints made by speculators, by those who
deal in articles by mere purchase and sale, while the interests
of the producers are wholly ignored.

W h i l e science and learn-

ing are thus looking after the interests of the already enormously
powerful aggregation of middlemen who assume to themselves
all importance in the development of industry, the industrious
and hardy producers are left to shift for themselves.

Such or-

ganizations as they effect with a view to their own advancement
are sneered at even by Cabinet ministers through the columnsof
the public press.
The parties who should be left to shift for themselves are the

W h e n e v e r justice comes to be done, the interests

of the producers will be cared for.
by no man can suffer.

W h e n they are justly dealt

It is in their capacity as producers that

men are entitled to consideration.
Imagine the injury to a capitalist if a great machine remain
idle for a time!

Y e t machines are mere inert matter.

Man is in-

finitely greater than any machine that is the work of his bands.
In comparison with the idleness of a man, the idleness of a machine is a mere trifle. Y e t how palpable is the injury when machines are idle; how impalpable, unperceived, unappreciated, and
disregarded when men are idle!








In view of the almost infinite division of labor which is the
ever-increasing characteristic of our advancing civilization, it
may be said that the principal function of money is to keep all
the people at work.

I wish emphatically to impress upon Sen-

ators that when that is not clone there is some failure or fault in the
money system.

Nothing can be of greater importance to a nation

than to keep all its people at work.

Until every man is em-

ployed, each in the labor of his choice and of his aptitude, the
goal of civilization will never be reached.
There is not a minute of time that has not its duty; not a
minute of the working day in which every man of sound body
should not be contributing to his own support and that of his


family; to the creation of wealth, and the enrichment and advancement of society.

Imagine, then, the colossal waste when

millions of men are compulsorily idle!
By the effect of a sufficient volume in sustaining the prices of
commodities, so that all men may be kept at work without interruption, money becomes an instrumentality by which billions
of millions of minutes are saved to society, and by which to that
extent civilization is enabled to advance beyond a motionless
level, beyond the point of petrifaction, because work is the dynamo of civilization.

The loss of so much dynamic force in so-

ciety is absolutely immeasurable.

The most serious, then, of all

the evil effects wrought by a money volume which does not keep
pace with demand, is the subtle and furtive effect by which it
relegates to idleness millions of the workers of the world.
The national policies that will keep men at work, and keep
them all at work, are the policies that will make the people
happy, contented, and prosperous.
sure of a living.

If all are at work, all are

This statement, so easily made and in so few

words, seems commonplace, but if we reflect upon it we shall find it
to be the bearer of a great message to humanity.

That message

is, that it is only when men are certain of earning a livelihood that
their real development begins.

In order that man may experience

the highest and most noble development, not only is it necessary
for him to have uninterrupted employment for hand and brain,
but without this, that is to say, without being relieved of the
fear of hunger, no man can put his soul into his work.
W h e n men are deprived of work, even for a short time, they
get into debt, which, being practical slavery, benumbs the faculties and depresses aspiration.

W i t h regular and uninterrupted

occupation for all there would be fewer disordered minds and
fewer men falling into evil ways—fewer lunatic asylums and
fewer jails.
The best missionary work in the world is that which keeps
men employed.

An increasing value of the unit of money tends

to put them out of employment.

The more skillful, intellectual,

and spiritual a people become, the greater the necessity for a
correct money system, in order that their labor and its products
may be justly measured and equitably distributed.

The more


intelligent and aspiring the people the greater the e c o n o m i c
loss by their idleness—the greater the loss to their country and
to civilization.

No people were ever more intelligent, aspiring,

or skilful than the people of the United States.

T h e compul-

sory idleness of large numbers of our people constitutes a greater
loss to civilization than the like idleness of twice the number in
any other country of the world.
Says John Ruskin:
Sinc&the essence of wealth consists in power over men, will it not follow
that the nobler and the more in number the persons are, over whom it has
power, the greater the wealth? Perhaps it may even appear, after some
consideration, that the persons themselves are the wealth—that these pieces of
gold with which we are in the habit of guiding them are, in fact, nothing
more than a kind of Byzantine harness or trappings, very glittering and
beautiful in the barbaric sight, wherewith we bridle the creatures; but if
these same living creatures could be guided without the fretting and jingling
of the byzants in their mouths and ears, they might themselves be more
valuable than their bridles.
In fact, it may be discovered that the true veins of wealth are purple—are
not in rock, but in flesh—perhaps even that the final outcome and consummation of all wealth is in the producing as many as possible full-breathed,
bright-eyed, and happy-hearted human creatures. (Unto this last; Essay

T h a t is a sentiment, Mr. President, which I commend to the
serious consideration of the gold-standard advocates.


T h e gold-standard men tell us that all they ask for is g o o d
money—honest money.

If that is so, then there must be some

monstrous j u g g l i n g with words.

For the very pith and marrow

of our contention in demanding the restoration of the privilege
of full coinage to silver is for g o o d money, honest money, a
money more honest than gold, a money that shall be honest not
merely to-day, but in perpetuity.

T h e acute among the gold

men very well know that gold money under existing conditions
is not an honest money, but an unjust and essentially dishonest
W h a t , then, is an honest dollar?

Is it not a dollar which de-

mands at all times the same degree of sacrifice to obtain it?
Is a dollar " h o n e s t " only when it is increasing in purchasing
power—when it is enlarging its grasp over the products of labor?
Is it an " h o n e s t " dollar only when it is exacting more f r o m the
debtor than he contracted to pay, and g i v i n g more to the creditor than he agreed to receive?


Is a dollar dishonest when, on the date of repayment, it commands precisely the same degree of sacrifice that it commanded
when it was borrowed?
In order that a dollar may be entitled to the designation " honest," is it necessary that at the date of repayment it should have
a greater control o v e r human effort than it had when it was
One would naturally suppose that an honest dollar would be a
dollar that would correctly register the sacrifices of men, so that
at the close of the term of a loan the creditor, in addition to lawful interest, would receive as principal not merely the same
number of dollars, but dollars commanding on the average the
same degree of human effort as those he had lent.
A r e we to understand that after the making of a contract requiring the payment of money a dollar becomes more and more
" honest " i n the proportion in which its purchasing power increases, to the advantage of the creditor and the disadvantage
of the debtor?
W A S T H E G O L D D O L L A R A N H O N E S T D O L L A R I N 1873?

T h e gold dollar having to-day a purchasing power 50 per cent
greater than the same gold dollar had in 1873, was the gold dollar of twenty years ago a dishonest dollar, and is it to-day 50 per
cent more honest than it was then, it being at both periods of
precisely the same weight and fineness? And if it continues to
increase in purchasing power, will it continue to increase in honesty?
W e have heard no gold-standard champion attribute dishonesty to any gold coin of any country at any date.

Gold, they say,

is always gold, which in one sense we grant, and therefore one
would suppose that a contract to pay gold would be the same contract at one time as at another.

Y e t , at two different periods

of time it means two totally different things.
One of the most important ends served by money is, or should
be, to equate the differences in value produced by the varying
degrees of supply and demand w h i c h , from season to season,
affect the commodities in the market.

Before money became

evolved from barter men could, on the spot, have exchanged
wheat for clothing, but without money they could not have ar785


ranged, as Aristotle puts it, " for the exchange to take place at
a future time," because in another season, owing to altered conditions of supply and demand affecting the commodities, their
true relation in exchange might be altogether different.
Under a perfect money system the sacrifice necessary to obtain
any given sum would on the average be no greater at one time than
at another. It is as a measure, an adjuster—an instrument of registration—of the varying degrees of human sacrifice entering into
the production of commodities and the rendering of services,
that money finds its most beneficent function.

It cannot faith-

fully perform that function whp-n the measuring unit is increasing in power from year to year.
T o illustrate: in 1849 the pound sterling bore the same name
that it bore in 1809, yet, as I have already remarked, between
those years, according to Jevons, and according to Tooke and
Newmarch, its value increased 145 per cent—that is to say. in
1849 it had a purchasing power two and a half times as great as
in 1809.
In view of the enormous debts of the world, is it possible that
Senators are prepared to admit that such a pound, constantly
increasing its grasp over the products of labor, was an honest

If so, it must have been two and one-half times more

honest in 1849 than in 1809, and as the weight of debt became
progressively heavier, the pound must have grown more and
more honest!
So, likewise, from 1873 to 1893, as is shown by the reports of
royal commissions and by all the economical, financial and commercial literature of the times, the pound sterling, the dollar,
the franc, and every other monetary unit in gold-standard
nations have increased in value 50 per cent.
Taking into account these extraordinary changes, can money
be said to be thus serving the ends for which society intended

It will be observed that it is only when it is undergoing this

sort of change—it is only as it is increasing in power—that it is
called " h o n e s t . "
T o be entitled to the designation honest, ib is not enough that
it shall be a dear dollar.

It must be constantly increasing in

It must be a dollar that is becoming progressively



more difficult for debtors to obtain—a dollar which requires
more sweat and toil to reduce it to possession. Of course, on the
theory of the gold-standard advocates, the dearer and more difficult a dollar is to get, the more " h o n e s t " it is.

That sort of

dollar, when paid over by a debtor to the holder of his bond and
mortgage, will command more property than could have been
commanded by the debtor with the dollar which the creditor
originally lent him.

That is the idea of an honest and a just

dollar entertained by the champions and beneficiaries of the gold
A s the dollars are due to them, they deprecate with upturned
eyes and clasped hands any change except one by which it is
becoming more valuable.

W e r e they the persons who owed

the dollar they would feel that they had discharged every duty
of honor and honesty if they paid their debts in a dollar of
precisely equal value with that which they borrowed—in a dollar which should transfer to the creditor the exact amount of
sacrifice—of control over human effort, which the creditor had
transferred to them on making the loan.

W h a t further can jus-

tice require?
The cry for an honest dollar is a mere pharisaical claim by
which money-lenders are enabled to perpetrate practical robbery upon the masses of the people.

It is a demand under the

name of honesty for a grossly dishonest dollar.

W h i l e they are

calling out for honest money, they are looting the community.
Their entire contention is enough to bring the word " honesty"
iiito reproach.

A s well might the dealers in " g r e e n g o o d s " i n -

sist that their trade is " honest."
A sordid disposition, from which, as civilization advances,
mankind can escape only slowly, still induces many to think
that anything is honest which is for their profit and advantage.
W e l l may we invoke honesty, as Madame Roland invoked liberty, exclaiming " H o w many crimes are committed in thy


T h e gold advocates say that one dollar must be as good as

But they do not define what goodness means.




is goodness in the case of a dollar?

Is not a just dollar a good

Is not a dollar of unchanging value a good dollar?

If the dollar they take for their model is a swindling dollar,
why should they ask that an


dollar should be as

' 1 g o o d " or as bad as that?
If a dollar should get to be more valuable than the dollar of
the contract—if goodness means dearness—then we want a dollar
that shall not be so good.

W e want a dollar that shall demand

no more sacrifice to get it than tbe dollar of the contract—than
the dollar that was agreed to be paid.
By artful devices, and without the knowledge or consent of
the people, but through the arm of the law, the creditor classes
increased the value of the dollar by cutting off one-half the quantity of the material from which dollars had theretofore from time
immemorial been made; and, having thus clandestinely secured
themselves, they began, with loud voice and sanctimonious air, to
announce to the people that justice required every dollar to be
kept at a parity with this new dollar that is constantly growing
W e r e gold to double in value in the course of the next year
we should still hear ringing sentences from the banks and from
the President of the United States, demanding that we make
every dollar as good as every other dollar—meaning that all
dollars would have to be made of equal value with the gold dollar.

They would disregard the injustice caused by overturning

all contracts and doubling the burden of all debts.

The honest

dollar, according to these authorities, is that which exacts the
most sweat and toil from the debtor.
Suppose that instead of agreeing to pay dollars people agreed
to pay wheat in standard bushels of the United States, and suppose that after the debt had been contracted, a bushel measure
was introduced and made the only legal bushel, having a capacity
50 per cent greater than the measure which was the standard at
the time when the transaction was entered into, then with the
same propriety that our leading financiers now speak of the gold
dollar, we should find them and the President declaring the larger bushel to be the best bushel because it would give to the
creditor a larger quantity of wheat than the bushel for which he


had contracted.

So also if a pound weight were by law so changed

as to represent 50 p e r c e n t more than the present standard pound
the creditors would assert that they must have the best, meaning the heaviest pound weight.

They would cast odium upon

the old weight as a cheap and dishonest weight, and insist that
one pound weight should be as good as another!
The analogy will be completed when we suppose the law to
provide that without further specific legislation all the standard
wTeights and measures of commerce shall each year take on a percentage of increase—the pound weight to be a heavier weight,
the yardstick a longer stick, and the bushel measure a more

In this way, without the trouble of making

new laws every year and undergoing the exposure and odium
naturally attaching to acts of moral turpitude, the creditor classes
could enter into contracts involving future payments of money
to them with the certainty that as each yearly payment fell due
they would get a greater and greater unearned increment of


If gold be the best money, it will of course stand the best test.
L e t us apply to it the test that we would apply to all other
The supreme test of all things human is the ordeal of war.


order to fight to the best advantage—in order to win battles—a
country must have the best men; those men must have the best
guns, the best powder, the best clothes, the best blankets, the
best horses, the best tents, the best food.

A l l these require

money—and, one would suppose, the best money.

W h a t is to be

said of a money that disappears on the outbreak of hostilities?
Do we consider citizens the best citizens who leave their
country on the first appeal to arms?

Has mankind been mis-

taken in its estimate of duty and valor, and is the true patriot,
after all, not the man who goes to the front, but he who takes
the first steamer for a neutral port, to return only when the conflict is ended?
If gold be the best money, is it not extraordinary that no nation on earth has ever been able to fight with it?

And is it not

equally extraordinary that men can only fight with the worst



W h a t would he thought of a country that should pro-

vide its soldiers with the worst guns, the worst powder, the
worst food, and the worst clothing?

In the greatest emergency

of the nation's life it had no. gold—in the greatest emergencies
of the lives of all nations, they have had no gold.

A t the first

roar of the cannon gold goes, and never returns until it comecin
the hands of usurers.
The lesson of history is that that money which fights for liberty, and has fought for liberty all the world over, is not an international money, but a national money.

It is a very extraor-

dinary thing that people will persist in ascribing the term " b e s t "
to a money that leaves them helpless upon the slighest note of

In every great war that has ever occurred in the his-

tory of the world, men have been deserted by this money which
we are told is the '' best."

The memory of every Senator informs

him that it is as true of this country as of others.
our late war, where was gold?


W h e r e was this " best " money?

W h o then heard the statesmen and the newspapers calling upon
the workingmen of the country to demand the " b e s t " money
and the only honest money?

If gold was the best money why

did not the Government officials seize it and make it serve the
the front?

They did not hesitate to seize men and send them to
Is gold more sacred than men?

After all, do we not make a mistake in saying that a national
money is the worst money?

Observing the h i g h premium on

gold during our time of trial, all the monarchies of the earth
were predicting the doom of the Republic.

One of England's

greatest historians, Prof. Freeman, saw this so clearly that in 1863
he published an elaborate work entitled " A History of Federal
Government from the formation of the Achaean League to the
Disruption of the United States."

No doubt the monarchs and

the historians based their calculations on the fact that at that
time the money-lenders of Great Britain possessed all there was
of this " b e s t " money, and that for want of it we were helpless.
They have since had ample opportunity to discover that the
people of the United States are equal to every emergency.



So far as concerns the need for money, is there essentially any
difference between a time of war and a time of peace?
is there no exigency demanding money?

war a people need something with which to pay.
get hungry in peace as in war?

In peace

In peace as well as in
Do men not

Do they not need money with

which to exchange the products of industry at one time as at the
During a period of warfare the exigency is on the part of the
Government and the people as a whole—as a collectivity; it is a
struggle by all for the existence of the nation.

During a period

of peace the exigency is on the part of every individual citizen,
who is engaged in a struggle hardly less serious, for his own

If in the supreme emergency of war, a nation can

wholly dispense with gold, why during peace should they sacrifice justice to obtain it?
If without gold a people in their collective capacity can defend and preserve their lives and liberties, how illogical and absurd to suppose that they are dependant upon it in peace to defend and protect their industries?

If the Republic is to survive,

it is as important that the people shall have food and clothing
during peace as during war.

The struggle for existence is not

over on the cessation of armed hostilities.

The battle of life goes

In the contests of industry the people need money as exi-

gently in peace as the nation needs it in war, and they need
just as good money.
A l l admit that there is a struggle in war, but who can deny
that there is also a struggle in peace?

T h e war struggle lasts

a year or two; the struggle of peace lasts a lifetime.

The same

men who held the muskeg are they who follow the plow.


they not continue to need at home, as they needed on the battlefield, the best blankets, the best clothes, the best food, and the
best money?

Is there any period of their lives when the indus-

trious, energetic, and aspiring people of this country should not
have all of these?

Is it only during periods of warfare that men

are to be blest with prosperity?
ties are to be in requisition?

Is it only then that their activi-

Must men be unemployed during



Must they starve because they are not destroying each


Did Milton err when he wrote:
Peace hath her victories
No less renowned than war.

Those who insist upon having the best money can not mean
that the entire volume of a money, if composed of any special material, is any bstter or has any more value than the entire volume
of a money composed of any other material.

All the economists

unite in declaring that all the money-value possible to a country
at a given time is expressed in its total volume at that time, no
matter of what material the money may be composed.
The entire value of the money of a coun try can not be increased
except by increasing the wealth of the country.

Under given

conditions the only change in value that can be effected is in the
value of the unit.

The word " best " therefore can have no pos-

sible application to the volume of money as a whole.

It can ap-

ply only to the individual units of money—to the separate dollars.

But if " b e s t " money means best units of money, the term

is nonsensical.

If there is a " b e s t " unit of money, there must

be a best unit of other things.
the best unit of wheat!

Imagine a farmer insisting upon

If the best unit of money is that which

has the largest control over property, then the best unit of property would be one that has the largest control over money.
Hence our farmers should be occupying themselves with the
invention of devices for progressively decreasing the cubical
contents of the bushel, as it is only in that way that wheat can
acquire greater control over money.

The farmer has just as

much right to claim the best unit of wheat, as the banker has to
claim the best unit of money.

As the vast mass of industry in

this age is based on time contracts, neither the unit of wheat,
nor the standard measure of any other product of human labor,
any more than the unit of money, should be permitted to suffer
either increase or diminution if it be possible for human wisdom
to keep them unchanging.
So, again, if the bankers are correct in insisting upon the best
unit of money, why should not the manufacturer of cloth insist
upon the best unit of cloth—meaning by that a unit of measure
that is constantly shifting its measuring power—and always in


the direction which will give advantage to the cloth manufacturer.

If the instincts of the money-lender lead him to wish the

greatest purchasing power in the unit of money, and to scheme
and plan in order to bring about a constant increase in that purchasing power, then the cloth manufacturer should not be blamed
if he for his part should strive to see that the unit of his merchandise shall command a constantly increasing quantity of



The best money is the money of unchanging value.

The best

dollar* is the dollar that holds its own.
T h e best dollar is that which, as time advances, becomes no
dearer and no cheaper, so that neither debtor nor creditor can
be despoiled by it.

The best dollar is that which, in so far as it

expresses the equity of a contract at the time the contract is
made, continues faithfully to express that equity through time,
no matter for how long a period the contract endures. W h e n e v e r
society shall get such a dollar the ultimate will have been

With a perfect money the world will be transformed.

Men will succeed in life according to their ability in their special
callings, and not according to their cunning, their hardheartedness, or their dishonesty.

It will be sufficient if they shall be

able to exercise foresight and make calculations with regard to
their own business without being compelled to study the science
of finance and enter upon long computations regarding the changing value of money.
T h e statement that silver is cheap money is only correct in
the sense that gold has become a dear money.

Silver bullion

will buy as much to-day of everything that enters into the consumption of the people as gold bought twenty years ago.
that sense silver is to-day cheaper than gold.


The delicate hands

of our bankers g o up in horror at the idea of having a cheap

It is repugnant to their sensitive nerves that the thing

with which they have to deal should become cheap.

They do

not suspect anything to be wrong when it is wheat that is becoming cheaper.

Indeed with many advocates of the gold stand-

ard it has become a maxim t h a t ' ' cheapness is the life of trade "—
meaning some other man's trade—not their own.


All things in which other people deal may become cheap without debasing our civilization, but to cheapen the things in which
bankers deal would be altogether unendurable.
Now, as I have already indicated, if money be not cheap other
things must be cheap.
money be dear?

How can other things be cheap unless

T o state the one is to state the other.


bankers and bondholders would not directly admit that they
want a dear dollar; they prefer to call it an honest dollar.


much as " dear " is the opposite of " cheap," one would suppose
they would use the word " d e a r " to describe their own dollar,
and if they were logical they would do so. They want the dear dollar, but are afraid to say so. That a dear dollar is what they really
want—even a dollar that is each year becoming dearer—is confessed by their insisting that all dollars shall be equal to the gold
dollar, to a dollar that has risen in value, in purchasing power—
in command over the products of labor—at an average rate of 2i
per cent per annum for the past twenty years, or 50 per cent for
that entire period.
W h e n people talk about dear money being the " b e s t " money,
everything depends upon whom they have in mind.

If they are

considering only the creditor, the annuitant, and the idle income gatherer, then in one sense they are right.


edly in a narrow sense, and for the purposes of the moment, the
best money in the case of these persons is the money that is increasing in value, and acquiring constantly larger control over
the products of labor.

But how is it with reference to the pro-

ducer? W h a t money is best for him? Is he not to be considered
in the matter?

Is he to be destroyed in order that creditors

may receive a dollar more valuable than they paid, more valuable than they agreed to take in repayment, and more valuable than
justice or equity warrants?

They effected their loans in a dol-

lar that would buy 100 cents' worth of property; they insist on
being repaid in a dollar that upon that basis will buy 150 cents'
worth of property.

Calling the two dollars by the same name

will not make them the same thing.
T H E 60-CENT D O L L A R .

And here let me inquire, is it not a somewhat remarkable circumstance that 60-cent dollars are quite numerous, while 150785


cent dollars are never heard of?

It is singular that a dollar can

become less than 100 cents, but can never become more.
rule does not seem to work both ways.


No matter how high the

value of the dollar may go, according to W a l l street it can never
rise above 100 cents.

This is because it is to the interest of

money-lenders to keep the eyes of the people off the rising dollar and make it appear by comparison that the other dollar is

It is a device to divert the attention of the people from

the ruinous advance in the value of gold in the interests of those
who juggle with money.
When Senators deride the silver dollar and call it a 60-cent
dollar, they are in effect deriding the gold dollar of 1873, and
calling it a 60-cent dollar.

It was not so dear a dollar then—it

had not such a high-purchasing power—hence according to their
logic, the gold dollar of to-day is more honest.
The fact is, however, that every dollar that the law creates contains 100 cents.

A dollar means 100 cents.

The thing to be as-

certained when two different dollars change their relation to one
another is whether the unit of each of such dollars bears on the
average the same relation to the units of commodities that it
did before.

If not we may ascertain that one of the dollars has

become a 150-cent dollar.

In that case it is a very bad dollar.

If our dollar is a 60-cent dollar, then the 5-franc piece of France,
Belgium, and Switzerland is not a 5-franc piece but a 3-franc

The 5-lire piece of Italy is equally " s h o r t . "

If the value

of money is derived from any supposed " intrinsic value " of the
metal it contains, how are we to account for the fact that all
those "short-weight" coins are doing the business'of the countries
named in unlimited payments at par with gold and without complaint by the people of those countries or anybody else?
According to the logic laid down by the advocates of the gold
standard the gold dollar of to-day will in a few years be considered a swindling dollar, inasmuch as the dollar of a few years
hence, though containing no more metal, will have considerable
more purchasing power than the gold dollar of to-day.


Many persons take for granted that a unit of money having
the highest purchasing power is the best unit.

It is not a ques-


tion of h i g h or low per se, but of a chanqe.

It makes no differ-

ence whether the value of a dollar be high or low at any given
time, provided it will only remain unchanged.

The idea that

there is any advantage, even if there were no injustice, in having a unit of higher value than one that previously existed, is as
absurd as to suppose that the best clock is that which is constantly gaining time, that the best yardstick is one which each
year acquires an addition of a few inches to its length, or that
the best pound weight is that which is each year acquiring
greater specific gravity.
The distinguished Senator from Ohio [Mr. SHERMAN], in some
remarks delivered before the Legislature of Ohio on the occasion of his last election, is represented by the New Y o r k Tribune
and other newspapers to have stated that what both political parties in Ohio wanted was " the best money and plenty of it," so
that " labor and production will be measured by money of the
highest purchasing power."
Now, Mr. President, in the sense here intended, the expression " best money and plenty of it " is a contradiction of terms.
All political economists agree that money will have purchasing
power in proportion to its scarcity, so that according to the Senator's statement, what both parties wanted in Ohio was " t h e
scarcest money and plenty of it."




For those who have already achieved fortune—who have reduced the dollar to possession—undoubtedly

in a narrow and selfish

sense the best dollar is the dollar of highest purchasing power,
especially if, as is the case with the gold dollar, the purchasing
power is constantly increasing.

Hence it is not unnatural to find

that men who lend money and deal in bonds and mortgages call
the best dollar 3 and indeed the only " good " dollar, that which
will exchange for an increasing quantity of commodities.


if a man owe a dollar, is not the best and most honest dollar in
that, not only for him but in a broad sense for the man even
to whom it is due, the dollar intended by the contract—that is
to say, a dollar which will demand of the debtor when repaying
it the same sacrifice that it demanded of the creditor when lending it?


If any other dollar is meant, it would argue that injustice and
exaction are better for the human family than equity and fair

The correct principle is that it makes no difference

what may be the purchasing power of the dollar, so long as it
remains unchanging through time.

W h e t h e r it have a high or a

low purchasing power it will equally maintain the equity of
debts and time contracts if it retain that purchasing power without alteration, and especially without increase.
In the Middle A g e s 6 bushels of wheat could be bought with
the present price of 1 bushel.

The money of that time was

money of a higher purchasing power than the present money of
the United States.

W i l l it be wise for us, therefore, to return to

the prices of the Middle Ages?

If wheat continues declining till

it gets to be 5 cents a bushel, then a dollar will buy a very much
larger quantity of wheat than it does to-day; in other words, the
dollar will have a much higher purchasing power than the dollar of to-day.

Had we better, therefore, persist in our adher-

ence to that form of " best "money—money of increasing purchasing power—until prices have fallen sufficiently to enable the rich
man, whose money is already reduced to possession and who is
himself producing nothing, to buy the products of other men's
labor at the rate of 20 bushels of wheat for $1.

This is a ques-

tion that ought to have some interest for our farming communities.

It is the constant increase of value in the monetary unit

that disturbs and disarranges industry, that ruins employers and
relegates to idleness our workingmen.
If the gold dollar is the best dollar because of its weight—because of its containing so many grains of metal—it would manifestly be a better dollar if the number of grains were increased.
On that contention the dollar would be twice as good if the number of grains were doubled, and three times as good if trebled.
According to this the best foot measure would, as I have already
stated, be that which should have the greatest number of inches,
the best yardstick that which should have the greatest number
of feet, the best hat, the biggest hat.
Inasmuch as all economists agree that the principal function
of money is that by which it serves as a measure of value for deferred payments, what difference can it make whether there are


many grains or few in the dollar, many inches or few in the
foot rule, provided the measure be unchanging.

W i l l not a

bushel measure be a good measure if it always measures out the
same quantity of wheat, and the foot rule a good rule if it always stands for the same space?
I must here repeat that money is a question of relative numbers.

The value of money—its purchasing power and control

over commodities—is a question of the number of money units
in circulation.

The effect of one unit is precisely the same as

that of another unit.

Other things being equal, one dollar, no

matter of what material made, can not make prices either advance or decline more than any other dollar.

A n increase of the

purchasing power of all dollars results f r o m a decrease, relatively to demand, in the quantity of all kinds of dollars in the
circulation; and vice versa.
The value of every dollar in use, population and demand remaining the same, being determined by the number fcf dollars
in circulation, the purpose Ox repealing the Sherman law manifestly is to increase the value of the dollars in circulation by
refusing to increase the quantity of money while population continues to increase.

This will add unjustly to the burden of every

debt and to the weight of every mortgage.

It will turn increas-

ing numbers of workmen out of the shops and throw them on
cold charity of the world.


If money is to have the highest or a constantly increasing purchasing power, prices of commodities must be kept constantly

The higher the purchasing power of the dollar the

lower necessarily must be those prices.
prices to be " g o o d . "

Y e t everybody wants

In the stock market business is said to be

prosperous when sales are rapid and prices rising.

It is said to

be " b a d " when prices are falling and sales, as a consequence,

The same rule applies to all forms of business.


less, then, there is to be a fall in the purchasing power of money,
there is no way to secure better prices except by a diminution
in the production of commodities—by poor crops and idle factories.


There is great rejoicing in the New Y o r k newspapers when
stocks and property are rising, which means that money is decreasing in value; yet they tell us in the same breath that they
want money of the highest purchasing power, showing that so
far as money is concerned the writers do not understand the relation of cause and effect.

W h e n these " honest money " news-

papers of the East tell us that there is a " brightening up all
over the country" and that "business is looking b e t t e r " they
always add that " t h e r e is an advance in values."

Now, an " ad-

vance " in prices of property signifies a decline in the value of
money, but they do not perceive this.

A s k business men gen-

erally whether they think it better for the country that a slow
and slight rise in prices should take place, rather than a steady
and persistent fall, however slight, and they will tell you that
a gradual and reasonable rise of prices is the very synonym of
But when people want money of the highest purchasing power,
and at the same time want that activity of business that results
from steady or gently rising prices, they simply ask for two
things that are absolutely incompatible and contradictory. They
want both sides of the scales to be going up at the same time.
T o whatever degree money is increased in volume (other things
remaining the same), the value of all the money in circulation is

If, then, money of the highest purchasing power were

really the best money, and the only honest money, it would become a moral duty of governments, in the interest of society, to
forbid the further mining or coining of gold and silver.

B y re-

fusing to those metals or either of them free access to the mint,
the purchasing power of all dollars already in circulation would
be enormously increased.
If, notwithstanding this increase, workingmen could receive
the same number of dollars that they now do, what an inestimable boon it would be to the laborers not only of the United
States, but of the world if the greater portion of the money
stock were destroyed.

No scheme could be more philanthropic

than one in which all civilized nations should combine to annihilate nine-tenths of the money supply of the world, so that by
enormously decreasing the quantity of money the unit of money

may acquire the highest purchasing power, and inasmuch as,
according to the logic of the gold-standard advocates, the laboring men would still receive the same number of dollars, they
would of course be elevated from poverty to affluence.
This involves an entire reconstruction of the science of political economy upon principles never before dreamed of.

It is

hereafter to be a science, by the study of which men may learn
how to lift themselves up by the straps of their boots.

That is

precisely the performance which the advocates of the gold standard propose that the people of the United States shall undertake to do when they determine to inaugurate a season of prosperity by repealing the present silver-purchase law and putting
nothing in its place.


The ground that silver is the product of the United States does
not, in the eyes of the gold advocates, commend it in any way to

W h e n opportunity arose, however, to commend

gold as being such a product, the argument was deemed legitimate, and was used without hesitation.
Albert Gallatin, in his Considerations on the Currency, published in 1831, said:
Another consideration may be adduced in favor of the proposed r e f o r m of
our gold coins. It seems to be well ascertained that the United States contains some of the most extensive deposits of gold that have yet been discovered. * * * It appears but just to afford to those employed in collecting
that natural product, a certain, and the highest home market, of which it is
susceptible. (Page 64.)

Even the honorable Senator from Ohio [Mr. SHERMAN] has
considered the fact that gold was a product of the United States
to be a recommendation in its favor, and I presume he considers it so still, although, taking into account the much greater
importance of our silver yield, one would suppose that as a product of our own soil, silver would be esteemed the more valuable, the Senator professing to be a consistent protectionist.
In 1868 that Senator, then chairman of the Finance Committee of the Senate, submitted a report to this body upon the
question of an international monetary standard, recommending
the adoption by the United States of the system of unification
of the coins of all nations on the gold basis, as suggested by the


International Monetary Conference held at Paris in 1867.


that report the distinguished Senator states:
Aside from the general advantages which we will share with the civilized
world in attaining a uniform coinage, there are special reasons why the
United States should now adopt the system. The United States is the great
gold-producing country of the world, now producing more than all other
nations combined, and with a capacity of future production almost without
limit. Gold with us is like cotton—a raw product. Its production here affects and regulates its value throughout the world. Every obstruction to
its free use—such as the necessity of its recoinage when passing from nation
to nation—diminishes its value, and that loss falls upon the United States,
the country of production.

And farther along in the same report he repeats his recommendation for the adoption of the gold standard, on the ground,
among others, that gold is " m a i n l y the product of our own country."
The Senator did not permit his mistaken fears of an enormous
yield from the mines to intarfere with his recommendation.


distinctly stated that the United States had ' ; a capacity for future production almost without limit."

A c c o r d i n g to this rea-

soning it w^ould seem to be the conviction of the Senator from
Ohio that because gold was an American product it was our duty
by all the means in our power to sustain its value, no matter how
unlimited its supply or how insignificant the cost of its production.

" Every obstruction to its free use," said the Senator, " di-

minishes its value, and. that loss falls upon the United States, the
country of production."
Senator from Ohio.

In that statement I fully agree with the

But it seems that while this was a valid ar-

gument for gold, it is to be deemed preposterous as an argument
for silver.


The silver miners of the United States, Mr. President, are a
brave and hardy people.

Those of my State shrink from no

comparisons to which they can be subjected.

Tried by every

gauge of manhood and patriotism, they respond to all tests.
Imagine the resolute pioneer, filled with the ardor of expectancy and the enthusiasm of anticipation, denying himself all
present enjoyment, all the solaces and comforts of civilization,
to take up what he hopes will be but a temporary abode in a hut
on a barren mountain-side—can there be found within the borders of the Republic a soul more intrepM, more aspiring, more


filled with the ardor of liberty, more willing to do and dare,
more determined to defy and overcome difficulty, in the effort
to achieve, in the endeavor to appease that thirst, which, f r o m
the days of the Argonauts, has seized upon the best and the
bravest of mankind.
In his interested and alluring search he finds no consolations
of landscape; no spreading lawns; no undulating fields; no placid
lakes; no tempting fruits; no sheltering trees.

On bleak and

rugged mountain, or in deep forbidding g o r g e his lot is cast.
The blasts of winter and the torrid heats of summer he bears
with fortitude and resignation—for does he not see the finger of
Hope—that hand-maiden of Ambition—ever beckoning him on?
This follows, as of course, from the nature of his calling.
is, above all things, the occupation of Hope.


It is an honorable

occupation; requires the boldest and most enterprising men: invites none but independent and adventurous spirits.

No man

not possessed of self-control and self-reliance—no man who is not
willing to brave danger, can follow it.

Such characters are the

natural material for citizenship of a free republic.

And although

Nevada be a State of small population, yet its poxDulation is composed of such as these—no State in the Union can boast of
braver or of better.
As is befitting such a population, the great seal of the State
which I have the honor in part to represent in this Chamber
bears a motto which I commend to the serious consideration of
those who ridicule Nevada because it lacks the splendor and majesty of the great banking States of the East.

The motto is: " A l l

for our country." That was the simple but eloquent legend which
the warm glow of patriotism suggested to those faithful sons of
the Republic on the admission of their State to the Union.


was becoming to m§n who loved freedom and wished to give notice to all mankind that they were willing to brave all dangers
for the Republic which they loved.

" A l l for our country! "


Mr. President, that is a motto which I venture to assert will
never be found upon the escutcheon of any State in which bondholders predominate. Their sordid motto is, " A l l for our bonds."









Let me very briefly contrast the claims of these two classes of
men to the consideration of the people of the United States.
A s I have shown, when the bondholders entered upon their
relations with the United States they paid for the bonds in depreciated paper dollars, or in the gold equivalent of such dollars,
at the average rate of only 67 cents on the dollar.

Those bonds

were (according to law, and would have been according to equity),
payable in lawful money of the United States.

That was the con-

tract, and, in substance, it was so nominated in the bond.


bondholders then set to work to secure a change of the law in
their own interest, and did secure such change, by which dollars
that were agreed to be paid, and to be received, in lawful money
of the United States, were afterward declared to be payable in
Having got thus far they secured another change in the law,
by which, in 1873, one of the two metals which alone constituted
" c o i n , " in the meaning of the statute, was demonetized and rejected as money of full liberating power.

Inasmuch as the only

value which money has is purchasing power, and that value is
determined by supply and demand, the demonetization of one of
the metals enormously increased the demand for the other, and
by increasing the demand proportionately increased the value.
T h e object of the bondholders was to increase the purchasing
power of their bonds—of the debts which the people of the
United States owed to them.

That was what they knew they

would get if they could secure the demonetization of one of the
money metals.

They have since received from the United States,

in payment of the principal and interest of their bonds, an enormous increment which was not due nor earned by them, nor
agreed to be paid to them, nor to be received by them.
Having secured from Congress an act which waived payment in
lawful money, and agreed to pay in " c o i n , " having then secured
the act which demonetized one Of the metals and made the debt
payable in the other, they next attempted to secure from Congress
a new interpretation of the act which provided for the payment
in " c o i n " — a n interpretation which should translate the wora


coin " into the word " gold."

fused to make.

This interpretation Congress re-

Congress then distinctly stated, by an over-

whelming majority of votes in both Houses, that the word " c o i n "
meant either gold or silver coin of the United States of the standard value of July 14, 1870.

From Congress they appealed to

what seems to be a higher court, not provided or contemplated
by the Constitution, namely, the executive officers of the United
States, who, acting as a self-appointed court of appeals, decided
that the word " coin " meant " g o l d coin," and proceeded to pay
those usurers in that metal.
Now, by contrast with this relation of the bondholders to the
United States, in what relation did the miners stand toward the
the country.
W h e n they entered upon the work of silver mining they had
every reason and every right to expect and to believe that silver would continue to be what from time immemorial it had
been, namely, money.

And if it could have entered their minds

that other nations might demonetize silver—nations whose soil
contained none of that metal, and whose people produced none—
they could never have suspected or supposed that it would be
demonetized by the Government of the United States, especially
after a large number of citizens had embarked in the business
and had learned the trade—for trade it is, requiring a considerable time in which to become skilled.

Silver had been the com-

panion of gold in the exercise of the money function not only
since the dawn of history, but prior even to the period of tradition.

In common with gold, it had been dedicated by the Con-

stitution of the United States to the performance of that function, in the injunction imposed upon the separate States by a
provision which recited that—
No State shall * * * make anything but gold and silver a tender in
payment of debt.

Thus the miners not only invested money, but suffered enduring hardships and incurred the utmost risk of health and
life, upon the faith of what may be termed a constitutional guaranty,

and upon the faith of the laws of the United States from

the foundation of the Government—laws having the origin in
customs, mint regulations, governmental orders and decrees of


all nations, from " t i m e whereof the memory of man runneth
not to the contrary."
The miners have never asked the Government for any bounties
of any sort.

They have simply asked, and they only ask now,,

that the plain intent of the Constitution shall be given effect—
that that intent shall be adhered to, at least until the people of
the United States have the opportunity of determining for themselves, and without interference by the executive department,
the question involved in the constitutional provision.

The Con-

stitution stating that Congress shall have the power to coin
money and regulate the value thereof, and that no State shall
make anything but gold and silver a tender in payment of debts,
the miners were warranted in expecting that Congress would
never attempt by a mere law to override the authority implied
by the Constitution, which was that a State could lawfully and
constitutionally make silver as well as gold a tender in payment
of debts.
If all the States should declare gold and silver to be legal
tender, while the Government of the United States should prevent the coinage of silver, the provisions of the State laws passed
in compliance with the Constitution would be of no avail.
W h e r e v e r the miners have gone they have built up communities that, until struck by the hand of the foreign creditor of the
United States, were prosperous and happy.

They have added

to the Hag of the Union a number of great self-supporting States
whose future influence upon the destiny and welfare of mankind,
and especially of our Republic, by the yield of the precious metals
and otherwise, was destined to be most powerful.

They have

shown that they were true Americans in the courage, and energy r
and determination with which they set to work to construct
towns and cities in the heart of that which was a desert.
In those towns and cities, even in the least populated villages,
they have established all the institutions of s e l f - g o v e r n m e n t school houses, churches, libraries, lyceums, and all the other
concomitants of American civilization.

They have had to bat-

tle with the rude forces of nature and, like true Americans,
have not flinched from the conflict.
I need not expatiate upon the comparative equities of the


claims of the bondholders and the miners respectively.


who, after consideration of all the circumstances, do not see a
clear case in favor of the miner—a case which should be supported by all the power and all the energy of the United States—
are in my humble estimation to be commiserated upon the absence, not merely of patriotism, but of moral sense.
T h e foreign bondholders, notwithstanding the total absence of
equity and even in defiance of all law and of the plain and unmistakable terms of the written contract, find that they have
only to


ask and it is opened unto " tbem: while the brave hearts

that, in the hopeful dawn of early manhood, hazarded strength
and health and life in the honorable ambition to achieve—that,
American like, they might call no man master—are now, many
of them, in their declining years, and with families that are as
dear to them as ever wife and children were to bondholders—
left to seek, not new homes merely, but, harder yet, new occupations.

These, too, are the men whom the good and gentle

Lincoln declared in a message to Congress to be worthy not
merely of the protection of law, but of an " extraordinary " degree of encouragement.

These are the men whose acute suffer-

ings have afforded opportunity of ghoulish delight to the proprietors of the gold press of the country.
The demand of the bondholder is not only that laws passed for
his special and unjust advantage, after his contract was made,
shall be enforced, but that the most important word in the law
shall be read out of it, and a new and different word read into it
in order that he may get from the people not only far more than
he gave, but more than the people agreed to pay him, and more
than he agreed to receive from them, in full discharge of their
The present executive officers of the United States, following
the example of their predecessors, without respect to party, ever
since the issuance of the bonds, and supported by the army of bondhold ers and their servitors, and especially the leading newspapers of the great money centers, are determined to enforce this
interpretation which they themselves, without warrant of law or
reason, have made, even when, in ordpr to accomplish it, they
find it necessary, like kaisers, to reconstruct entire maps and


ruthlessly destroy the population of whole States.

Even czars

do not destroy the law-abiding people of their own countries.


was only the Janizaries who pillaged the cities which it was their
duty to guard.
The people of the mining States, Mr. President, among them
the people of the State which I have the honor in part to represent in this Chamber, advance in defense of their cause reasons
founded at once in principles of eternal justice and sound economic policy.

They are confident that a large majority of their

countrymen are with them on the side of the right, and only
need a fitting occasion and a plain statement of the case to make
prompt and unmistakable decision.
They assert that in fairness to the republican principle of government, which does not recognize the lodgment of all the
powers of state in the hands of any one man, all questions of superlative importance, such as that which involves at once the
monetary standard of the Republic, and the lives, fortunes, and
happiness of the population of entire Commonwealths, should
be submitted directly and openly, fairly and squarely, to the people of all the States, and should not be decided by snap judgment, after the manner of ignorant magistrates and petty criminal courts, nor by personal orders or rescripts in the nature of
imperial decrees.

They believe that justice to the theory of

government " o f the people, by the people,"' demands that all
questions of preeminent importance should be submitted to the
enlightened suffrages of the people in their capacity as rulers.
They submit that the question now under discussion is, in its
broad aspect, one which, for fifteen years, has, by disingenuous
methods, been studiously withheld from submission to the people, owing mainly to what, in my humble opinion, is an unconstitutional encroachment—gradual, progressive, and finally overshadowing and dangerous to the independence of the lawmaking body—the encroachment by the incumbents of the Presidential office, without distinction of party, upon the functions of
the lawmaking power.
T h e Roman republic, Mr. President, did not lose its liberties
until the senate had degenerated into a mere instrument for recording the will of the chief magistrate.

Macaulay has com-


men ted upon the ease and smoothness with which all democratic
forms, and the names and titles appertaining to a republican
form of government, were preserved in that commonwealth concurrently with the absorption of all the powers of the state—executive, legislative, and judicial—in the hands of one man.
that was a long time ago.


Times change, and men change with

This is a very different Republic from that of Rome, and

although history, we are told, sometimes repeats itself, I, for
one, can not believe that the Senate of the United States is ever
to become a subservient Senate.
I know that I can speak for the voters of the mining States
and millions of voters in other States who are in hearty accord with them on all fundamental features of the question now
before the Senate when I assert that if the entire monetary policy of the country is to be changed it is too great a question to
be decided without consulting the American people, whose mere
representatives and servants we are.

And, if there be a major-

ity of Senators here favorable to the passage of this measure,
without reference to the fatal effect which it is absolutely certain to have, not only upon all the people of the mining States,
but upon the producing masses in every State in the Union, may
I not admonish those Senators to pause and reflect that there is
no exigency whatever demanding its passage—that absolutely no
public condition requires it, and that—
it is excellent
To have a giant's strength, hut it is tyrannous
To use it like a giant.

[Applause in the galleries.]
Mr. JONES of Nevada.

October 27, 1893.
A t the close of my remarks on Tues-

day I had stated that the most immediate consequence of the
vote to be cast here in favor of repeal would be to practically
destroy the silver-mining interests of the country.


the inhabitants of the so-called mining States are numerous
enough to be entitled to consideration, they are not numerous
enough to be able, unaided, to undo at the polls the wrong inflicted here.

It is not, however, to the inhabitants of those

States that Senators will have to account, but to a much more


numerous body of citizens in all the States of the Union, namely,
the agriculturists and other producers.











I assert that by reason of the demonetization of silver the
wheat and cotton producers of this country are compelled to
give a much greater quantity of the products of their labor for
a given number of dollars than with unrestricted coinage of that
metal at our mints they would be called upon to give.
Agriculturists suffer in perhaps an exceptional degree from an
increasing value in the monetary unit.

The obligations of their

mortgages, like those of all others, are stated in dollars.


unlike other obligations, such as railroad and corporate securities in general, the farmer has no means of defending himself
from the injustice inflicted by an increasing value in the dollar.
Although railroads must suffer with others, yet when the value
of the dollar increases, their managers shrewdly " r e f u n d " and
" r e c o n v e r t " their bonds at rates of interest lower than the rates
originally provided for.

But there is no " reconversion " o r " re-

f u n d i n g " for the farmer or cotton planter.

The only result in

his case is that every day is hastening him on to the time when
the mortgage is to become a deed, and the mortgagee to become
the owner of the properly.
W h e a t and cotton, the leading products of our soil, have for
twenty years been falling in price

They fell last year, last

month, and last week, and will fall further next week, next
month, and next year.

To the producer the term " f a l l of

prices " is the equivalent of " increasing value in the dollar."
W h e r e is the falling process to stop?

Is it to persist until

wheat gets to be 5 cents a bushel, and cotton 1 cent a pound?


so, what are those agriculturists to do whose farms are mortgaged, and who owe fixed amounts of other debt, all of which
must be paid out of the amounts realized from the sales of their

W e r e debts to be " s c a l e d d o w n " according as the

value of dollars increased by reason of relative contraction of
the money volume, no one could complain.

But a debt is a fixed

number of dollars, no matter how the value of the dollars may
In order to get an idea as to how the fall of prices is progress785


ing let us enter into a comparison, at random, of a few items
from the report of the Government Statistical Bureau as to the
quantities (contradistinguished from values) in the case of a few
of our leading articles of export, for the two periods comprising
the nine months ending September 30 of this year and the corresponding period of last year.

According to those figures, we

discover that while the exports of wheat.were less in bush els this
year than last by only two millions they were less in dollars by
eighteen millions.
Taking hour as another illustration, we find that this year
the exports of that commodity were less in barrels by 100,000,
but less in dollars by 2,200,000.
Still more striking are the figures representing the quantities
and values of our petroleum exports during the periods named.
T h e exports of crude petroleum this year were greater than
those of last year in gallons by 13,000,000.

Notwithstanding this

large increase in quantity, there was a decrease in the number
of dollars received this year, as compared with last, by 3,000,000.
The full statistics of the cotton exports for the nine months
are not yet available, but comparing the exports of the single
months, September, 1892, and September, 1893, we find that the
exports of cotton were this year less in bales by 17,000, but they
were less in dollars by 215,000.
All these figures show that we are sending to Europe each
year an increasing quantity of our agricultural wealth for a continuously decreasing amount of money.

Our producers are being

sacrificed and forced into poverty because of the avarice and
cupidity of men, who, whether in Europe or America, produce
If the fall in the gold price of silver bullion is in any manner
responsible for this, is it not the imperative duty of thinking
men to investigate the subject?
The case for the agriculturist is so well stated by the New
Y o r k Sun of September 10 last that I give in full the able editorial which presents it.

The Sun says:



When, by reason of unfavorable conditions, nearly half of the population
Is deprived in whole or in part of its power to purchase of the products of
those engaged in manufacturing industries, the whole commercial and in785

dustrial world suffers from paralysis; the exchanges become derangea;
hoarding ensues: monetary stringency follows; mills, factories, and furnaces close; operatives, ceasing to earn, lose their power to purchase of
products of their own labor as well as of the labors of others; and the circle
of declining activity constantly widens.
Such are the conditions now existing, and they are largely if not almost
wholly due, primarily, to the loss of the power on the part of some 45 per
cent of the people to purchase of other than the veriest necessaries.
On the other hand, whenever this great multitude of people have large
revenues, their purchases are of such volume and the character and quantity
bought so constant that manufacturing pJants are fully employed, and new
ones are built to meet augmenting demands; the mill-owner buys raw material in advance of consumption; operatives and artisans have constant
work; the wage scale being an ascending one, the ability of the worker to
buy of the products of his own labor and of the labor of others is enhanced;
money seeks employment with confidence; the merchant's stock rapidly disappears and is constantly replenished; collections are easy, and, in short,
labor is fully employed, manufacturers overrun with orders, money is abundant, and times are good.
As the prices of farm products have fallen, so has declined the purchasing
power of that great body of producers constituting nearly half the working
force of the nation, and so has waned the prosperity of all.
At the taking of the census of 1870, 52 per cent of all the males following
regular vocations were engaged in agriculture, and this was approximately
the proportion of the people Jiving upon the farm, but by 1880, owing to the
growth of manufactures, the proportion had been reduced below 49 per cent,
and is now probably about 45 per cent.
After the close of the civil war farm products brought such prices that the
52 per cent of the population then directly dependent upon agriculture had
ample revenue: their purchases of the products of manufacture were so
liberal that many establishments ran night and day: the mill-owner, the
producer of raw material, the merchant, and all those engaged directly and
indirectly in distribution or construction, as well as those employed in the
subsidiary industries, were fully employed at remunerative rates, the result
being an era of prosperity never equaled in our history* as neither before
nor since have those prices for farm products been equaled.
Now the very reverse of such conditions obtains, except in so far as relates
to the desire of the farmer to buy of the products of others. This desire remains, as it has during all the years when declining prices for his products
have forbidden its exercise, except in the most restricted manner.
As the power of the farmer to buy declined, so has declined, measurably,
the activity of the industrial and commercial world, except as an impulse
has been given to commerce and manufactures by the construction of an
immense railway mileage, often in advance and excess of local needs. While
the development of transportation facilities served to mask and postpone
some of the inevitable results due to the farmer's loss of purchasing power,
the almost entire cessation of such works tends to emphasize the loss of
that power which the farmer exercised in such a way as to cause a rapid
extension of the industrial equipments of the country, until it has become
more than sufficient to meet demands reduced by reason of the loss of revenue suffered by the greatest body of workers in the country
The nation is likely never again to have its economic conditions hidden by
a factitious prosperity growing out of great railway constructions, as such,
operations are no longer possible, there being no region, except very limited
Southern areas, where expenditures could be made to appear as promising
returns to tempt the possessors of available funds.

For more than fifteen years—1878 to 1893—all the great primary agricultural
staples have been declining in price, although there have been periods when
the price of some one was high for a limited time. This is more notably true
as respects secondary products, especially meats and lard; but the trend of
the whole scale has been constantly downward, and the general price level
at the end of each year was lower than at its beginning. In the meantime
there has been no material reduction in the cost of production, the selfbinder, the gang plow, mower, hay tedder, and hay loader, and all other great
improvements in agricultural machinery having come into use prior to
1878. Subsequent modifications and improvements have been in the direction of greater facility in operation rather than of lessened cost. While it is
true that there has been a material reduction in the cost of farming implements, such reduction has not always resulted in lessening the cost of production on the farm, as new machines have often displaced those which were
but partially worn and which were quite as efficient.
It is probable that upon farms large enough to warrant the purchase of full
lines of improved machinery the cost of production has thereby been lessened
10 per cent, b&t such farms, constituting less than 5 per cent of the whole
area under cultivation, the aggregate saving from such economies has been
slight and has probably been fully offset by the progressively increasing use
of commercial fertilizers, which has been found necessary in all the region
east of the Mississippi, not to increase the fertility of the land, but simply
to prevent further deterioration.
While the cost of production can not have been lessened as much cts 5 per
cent since 1875, prices for the staple products of the farm averaged 82 per
cent greater during the five years ending with 1875 than now. This is especially true as respects the five staples—corn, wheat, oats, hay, and cotton—
which employ 195,000,000 out of the 206,000,000 acres now devoted to staple
The following table shows, in five-year averages, the gold value per acre
(in the local farm markets) of the product of the five staples named, for
quinquennial periods, since 1866, and an estimate of the value, with average
yields, of an acre under each such staple in 1893 at present prices:
Value of an acre's product—


1866-'70. 1871-75.



1876-'80. 1881-'85.




10. 92
13. 28
28. 01

$11. 30
28. 55

$9. 62
11. 57
17. 65

$10. 25
15. 63

9. 07
7. 50

$8. 35
5. 75
10. 00
10. 65

78. 21
15. 64


59. 42

56. 40
11, 28

49. 44
9. 89

40. 75

If, as is altogether probable, the revenue derived from the cultivation of
each acre of the staples named has not since 1885 been in excess of the cost
of production, then it is readily seen that the workers among the 30,000,000
who inhabit the farms of the United States have for eight years received no
more than laborers' wages, and could purchase but the barest necessaries.
As prices now current are 21 per cent below the average of 1868 to 1890, it follows that the products of the farm are now sold below the cost of production, and that the farmer is wholly without purchasing power other than
such as results from his wages as a common laborer.
Granting that present prices even cover the cost of production, or say $8.15
an acre, it is evident that every cent that can be added thereto will be in the

nature of profits or rent, and will add that much to the purchasing or debtpaying power of the cultivator; but there is abundant evidence that $8.15
does not represent the actual average cost of producing the staple products,
and that the farmer's debt-paying and purchasing power has been reduced
to that of the lower class of labor, and will afford him, while present prices
obtain, but the means of the most meager subsistence. That present prices
are below the cost of production appears probable f r o m the fact that outside a few favorably situated communities, there has been no reduction of
farm indebtment in recent years, while the farmer has, over wide areas,
f r o m year to year been reducing his purchases of the products of manufacture, although his revenues have been 21 per cent above the present level.
The extent of the reductions made in revenue from each acre under staple
crops is best shown by saying that the acre revenue f r o m 1866 to 1870 was
$7.59, or 93 per cent greater than in 1893; from 1871 to 1875 it was $7.04, or 86
p e r c e n t greater than in 1893; from 1876 to 1880 it was $3.73, or 46 per cent
greater than in 1893; from 1881 to 1885 it was $3.13, or 38 per cent greater than
in 1893; from 1886 to 1890 it was $1.74, or 21 per cent greater than in 1893. The
great diminution in the purchasing power of the farmer, implied by these
progressive reductions in acreage revenue, without compensating reductions in the cost of cultivation, is thus clearly shown; but the enormous
yearly aggregate of lost purchasing power is comprehensible only when we
multiply the acres now employed in growing staples by the declines shown
in the acreage value of products since 1870. While very accurately measuring the farmer's loss of revenue by reason of the declining value of the acreage product, even multiplying the acres under staple crops fails to show the
whole loss, as no account is thereby taken' of the reduction in the value of
animals and the thousand and one things produced on the farms of the
United States, which have suffered, in many cases, quite as great a decline
in value as have the great staples to which this showing is confined.
As 206.000,000 acres are now employed in growing staple crops, it follows
that the power of the farmer to purchase is this year $1,563,000,000 less than
it would be if he was receiving the prices of 1866-70 for his great staples.
If the prices now realized in the farm markets equaled those received f r o m
1871 to 1875, the farmer would this year be able to spend $1,450,000,000 more
for manufactures and other commodities than he will be able to spend with
prices at the present level. Were prices now equal to the average of those
obtained f r o m 1876 to 1880 the purchasing power of the farmers would this
year be augmented by $768,000,000. Should the crops of 1893 give average
yields and the prices equal those current from 1881 to 1885, the farmer's spending power would be $615,000,000 greater than with present prices. Even with
prices as low as those prevailing from 1886 to 1890 the farmers of the United
States would have $358,000,000 added to their debt-paying and purchasing
power in 1893; and like advances on the other products of the farm would
create an ample fund for building and general improvement, thus employing
more labor.
The least of these sums, added to the sums yearly distributed among the
producers of metals and textiles, would afford employment for great numbers, keep the mills in motion, make money abundant, and bring good times.
Much stress is laid upon the necessity of cheap food for the wage-worker;
but what possible benefit can be derived from a cheapness that deprives the
30,000,000 who produce food and fiber of the ability to keep the wage-worker
employed by buying the products of artisan and operative?
Doubling the present price of wheat would probably add the price of six
or eight days' labor to the cost of the year's supply of bread for the average
family; but with wheat at an average of $1 a bushel at the farm markets,
and other farm products at proportionate prices, there would be no idle

mills, and tlie earner of wages would have that easily procured and constant
work which would assure him the continuous ability to buy bread. Would
not that be far better than existing conditions and bread unattainable
though low in price?
W e recently published a statement to the effect that the 1,600 young women
employed in the Warner corset factory at Bridgeport, Conn., had been reduced to half time; that 600 of them were unable to buy food, and were fed by
the charity of their employer. Such conditions exist because the women
upon the farms are unable to renew their corsets with wheat selling west
of the Mississippi at from 30 to 40 cents a bushel.
The relation between the price of wheat, the lack of power to buy corsets,
and the idleness and inability of the women of Bridgeport to buy bread is as
obvious as that between the earth's movements and day and night.
However people may have disagreed about the late Zach Chandler's statesmanship, no one questioned his success as a merchant, and this was due as
much to his power of discerning economic conditions affecting his customers
as to the unerring judgment with which he provided saleable goods. Soon
after the close of the civil war, being asked if he could find sale in the farming districts for a lot of rich dress goods, which he was shipping to small inland towns, his reply was characteristic:
" Sell them! Sell them! Why, the women on the farms of Michigan have
discarded homespun and calicoes for silk and merino, and no farmer's son
now thinks of going out to plow unless dressed in doeskin trousers and calfskin boots. Don't you k n o w that wheat is selling for $2 a bushel?"
Such was the late Mr. Chandler's way of stating the operation of that economic law which enables people to buy liberally of the products of others.
When we reflect that had the 460,000,000 bushels of wheat exported since
July 1, 1891, brought but 15 cents more a bushel, the corn exported 10 cents
more, and the cotton exported only 4 mills more a pound, fully $100,000,000 less
in gold would have gone abroad, and many millions less in American securities have been sent back, we can understand that the purchasing power of
the farmer would have been enhanced by several hundred millions, as like
advances would have been secured on all similar products sold at home.
Such an addition to the farmer's power to purchase would have kept the
mills and furnaces employed; the operatives, having constant work at high
wages, would be able to buy bread; and their power to purchase of the products of their own labor, as well as of the products of the labor of others,
would be vastly increased, gold would be abundant, confidence unimpaired,
and prosperity still be the rule.
With prices of farm products again such as to afford fair remuneration for
the labor and capital employed in production, as they presently must be, by
reason of the elimination of the world's acreage excess, the purchases of the
30,000,000 upon our farms will help to keep every spindle busy: labor in the
towns will, at least for a time, be well employed; hoarding will cease; confidence will be restored, money become abundant, and an era of prosperity
will result f r o m the operation of that natural law which is the ultimate arbiter in determining the price of nearly every product of labor.

It would be difficult to describe more accurately the situation
of the farmers of this country and the effect which their prosperity or adversity has upon the entire body of our national industries.







Several years a g o s h r e w d m e n in Great Britain foresaw w h a t
would be the

e f f e c t o n t h e a g r i c u l t u r a l i n d u s t r i e s of t h e U n i t e d

S t a t e s of a f a l l in t h e g o l d p r i c e of s i l v e r b u l l i o n .

T h e y saw that,

i n t h e s i t u a t i o n of I n d i a , t h e p r i c e of s i l v e r b u l l i o n w o u l d d i c t a t e
the prices for w h e a t and cotton.
A t a m e e t i n g of t h e B r i t i s h a n d c o l o n i a l c h a m b e r s of c o m m e r c e h e l d i n L o n d o n i n 1836, S i r R o b e r t F o w l e r , a m e m b e r of
P a r l i a m e n t , b a n k e r a n d e x - m a y o r of L o n d o n , s a i d t h a t —
The effect of the depreciation of silver must finally be the ruin of the wheat
and cotton industries of America and be the development of India as the
chief wheat and cotton exporter of the world.
T h e i n t e r e s t of t h e f a r m e r s of t h i s c o u n t r y i n t h e s i l v e r q u e s t i o n c a n n o t b e m o r e p e r s p i c u o u s l y s t a t e d t h a n is d o n e b y M r .
M o r e ton F r e w e n , in some felicitous r e m a r k s d e l i v e r e d by h i m
a t t h e s e c o n d n a t i o n a l s i l v e r c o n v e n t i o n h e l d in W a s h i n g t o n a
year or more ago.

R e f e r r i n g to the m e t h o d by w h i c h the p r i c e

of s i l v e r b u l l i o n c o n t r o l s t h e p r i c e of w h e a t , M r . F r e w e n


This is a question to which, when in India, I gave very close study, and I
should like to make this general statement, which I am convinced the experience of the past and of the future will amply confirm. Let me put it
briefly in this way:
The price of wheat in this country is its price in London or Liverpool, less
the cost of carriage from here there, and the London price of wheat is, under
ordinary conditions, one ounce of silver per bushel of wheat. Your farmers
will always have to sell a bushel of wheat, say in Chicago, for an ounce of
silver, less freight charges to London. If, then, silver is worth $1.29 per
ounce, the London price of American wheat is $1.29. while, if silver is worth
90 cents, then your wheat will realize only 90 cents. This is a statement that
will bear close examination, and it is the sum of the importance of the silver
question to your nation. When in the Punjaub three years ago I went very
closely into the cost of producing wheat there. In that one India province
the area devoted to wheat-growing is twice that of the wheat area of all Great
The irrigation system organized by our Government is perfect, so that
harvest returns are extremely uniform, and the figures I arrived at, and
which have not been called in question, go to prove that the Punjaub wheat
farmer will always make a living profit by selling his wheat in Europe f o r
21 silver rupees per quarter [8 bushels]. And if this is the case the competition of tens of thousands of small wheat farmers in India will always suffice
to sell wheat in Europe down to that price. Now, 21 rupees a quarter is an
ounce of silver per bushel; and seeing that the value of the rupee in India to
buy land or labor or any local commodity is actually a little greater than it
was before the gold price of silver fell, I hold that we are Justified in stating
that the price of a bushel of wheat, whether American or Indian, in the Lon785

don market, has been in the past and will be in the future on the average an
ounce of silver.
Admitting, then, what all students of prices do admit, namely, that the
purchase power of the rupee in India is well maintained, the fact that the
price of wheat and cotton falls with the price of the silver exchanges between Europe and Asia is not for a moment open to doubt.

A comparison of the range of prices for wheat and cotton and
the gold price of silver bullion for the past twenty years will
demonstrate a much more than accidental relation between them.
The following table gives the figures:
per bushel. per pound. per ounce.





81. 32


1. 14
1, 13






„ 93




Let us endeavor to reach an approximate estimate of the losses
sustained by our agricultural population since 1885, when President Cleveland first advised Congress to repeal the silver-purchase act of 1878 and to stop the coinage of silver dollars:

Average export price per bushel—
1875 to 1885


According to the report of the Agricultural Department for
December, 1892, the wheat crop of this country for the year then
closed amounted to 516,000,000 bushels.

On this quantity a loss

of 44 cents per bushel, caused by the decline in the price of silver bullion, amounts to an annual sum of $226,600,000 of debt and
tax-paying power, which amount apportioned among the princi-


pal wheat-producing States shows the loss of each of such States
to he as follows (I give the figures in round numbers):
Wheat crop of 1892 in—



South Dakota..
North Dakota..
Washington ...

70, ooo:

32, OOO!
24, OOO!
12, 000,
10, 000,
10, 000.

There may be added to these figures five to ten million bushels each for the States of New Y o r k , Maryland, Virginia, North
Carolina, Texas, Tennessee, W e s t Virginia, Wisconsin, and Iowa.
The loss on wheat, therefore, suffered by the farmers of this
country must be estimated at $200,000,000 annually.

A v e r a g e price per pound in New Y o r k —
1879 to 1885
1879 to 1893





Taking the crop year 1888-'89 as an average year, and, for convenience of calculation, computing the loss at 3 cents per pound,
we find that the total annual loss of the planters of the United
States amounts to over $100,000,000, distributed among the States
as follows:
Cotton raised in—
North Carolina .
South Carolina .


230, 000,000
275, 000, 000
480, 000,000
32, 000. 000
422, 000, 000
532, 000,000
240. 000, 000
719, 000. 000
350, 000,000
162, ooo;000

.Loss per

8, 250,000
12, 675. 000
7, 200,000
10, 500. 000
4,860, 000

3,422,000, 000 i 102,660,000


This makes a total loss to the agriculturists of this country,
in wheat and cotton, by reason of the demonetization of silver, of
over $325,000,000 a year.
Mr. M c P H E R S O N .

Inasmuch as I have made a declaration

directly contrary to that made by the Senator on a former occasion, I should like to ask the Senator how he accounts for
it, then, that when you come to consider that the exports of
wheat from India have only averaged 10 per cent of the export
of wheat which supplies the world outside of India during the
past twenty years, how it could influence the market?


I wish to take up the export of cotton, and I read from the Statistical Abstract, which simply shows that while India in 1872
produced 35 p e r c e n t of the world's supply of coton, with a stimulus of 40 per cent in the fall of the gold value of the rupee, India's whole product of cotton fell 23 per cent.

I should like to

know how in the production of wheat and cotton it has been of
so much importance to India, when the Senator knows that in
Calcutta and Bombay the gold price and the silver price of cotton has been exactly the difference between the value of gold
and silver bullion.

I do not know what it has been in the inte-

rior of the country, but in the export cities the price of both
wheat and cotton represents exactly the difference between
gold and silver bullion, leaving out of the transaction, of course,
all transportation charges, so as not to cloud the transaction.
Mr. JONES of Nevada.

A very slight surplus of product, say

10 or 15 per cent of wheat, is enough to demoralize the entire
W i t h reference to cotton, I wish to call the Senator's attention to the fact that the production of cotton is enormously increased in India, but the shipments from India have not increased,
for the reason that the people, owing to the bounty (which the
premium on gold is), have been able to take an enormous amount
of business from the spinners and weavers of Great Britain.


dia is reaching out for the entire trade of the Orient, including
Japan, China, Siam, and the Straits settlements.

The result is

that the mills of India have closed many of the mills of England.
Mr. M c P H E R S O N .

If the Senator will permit me a moment

If it is ascertained that upon the continent of Europe


there is a deficiency of wheat to supply consumption, say, of 300,000,000 bushels, India only supplies 10 per cent of the 300,000,000

The Senator will not pretend to say that that 10 per

cent will regulate and control the market for a deficiency of 300,000,000 bushels.

He can not say that, and upon a little reflection

he will not.
Mr. JONES of Nevada.

Cheap silver stimulated the produc-

tion of India, of Russia, of the Argentine, and all other nongoldusing countries, because the wages obtaining in those countries
being payable in their national money, the rise of gold acted as
the equivalent of a bounty on all productions.

Does the Senator

deny the proposition that wages have not risen in India?


he deny the proposition that the rupee to-day among the 285,000,000 people of India will buy as much of all the things that
enter into daily lite as it ever bought?
Mr. M c P H E R S O N .

I deny it emphatically, because, in the

first place, there can be in commerce no such thing as a onesided prosperity.

If the Senator tells me that the Indian ryot,

who lives in a mud hovel, wears straw clothing, and eats only
rice is cheated, and is willing that the shipping agents or the
Indian merchants of Bombay and Calcutta may have the full
benefit of his labor, then I can not deny that, because I am not
acquainted with the practices and habits of the ryots.


when the Senator tells me that in Bombay and Calcutta the
price of both wheat and cotton, as taken from the Statistical
Abstract of India and England—both the gold price and the silver price of wheat and cotton—has not been exactly the difference between the value of gold and silver bullion, then I say the
Senator can not sustain his position.
Now, then, as to the rupee, if the Indian merchant at Bombay
or Calcutta ships his wheat to London he is able to get more
rupees either in council bills or silver for that wheat than he is
able to get if he sells it for gold.

Does the Senator pretend to

tell me that competition between India and London, between
the importers and exporters of Indian goods and Indian products
from India is not exactly like the competition between merchants
in the city of New Y o r k , Philadelphia or Baltimore?

If that is

not the case, then it seems to me, Mr. President, that there is


no such thing as commerce from that part of the country.

It is

Mr. JONES of Nevada.

I can scarcely understand the state-

ment made by the Senator from New Jersey.

The ryots and all

the small farmers in India are in competition with one another,
like the farmers of this country.

They must sell their wheat

for what they can get for it, and with the rates of wages which
have prevailed from time immemorial, and the range of prices
of commodities which now obtains, and has from time immemorial obtained, the rupee will buy as much of labor and as
much of the products of labor as before silver was demonetized.
It will buy as much now as then of everything sold in India that
the East Indian consumes.

To 280,000,000 of the East Indians

it is a matter of entire indifference what money is used in London.

It would be as useless to inform them about it as it would

be to inform them, if one knew, the character of money used in
Mercury or Mars.

They use nothing but silver.

Mr. M c P H E R S O N .

W i l l the Senator bear with me for a sin-

gle moment longer?
Mr. JONES of Nevada.
Mr. M c P H E R S O N .


Take wheat in London, worth 40 shillings

a quarter.
Mr. JONES of Nevada.
Mr. M c P H E R S O N .

Put it down lower than that.

Say, for illustration, 40 shillings a quar-

ter—I do not care what figure you put it at.

Twenty rupees are

equal to 40 shillings, and the East Indian—leaving out of the
question, so as not to cloud the transaction, freight, commissions,
etc.—receives 20 rupees for his quarter of wheat.

If that wheat

was sold to-day in England, with the rupee at 1 shilling 2 pence,
he would receive not 20 rupees, but 35 rupees in silver.

I wish

now to ask the Senator if he believes that there can be such a
thing as commerce between London and India, in which an Indian merchant, located in Bombay or Calcutta, can send that
wheat to London, and receive 35 rupees in silver, and pay no part
of it to the producer?

Then is it not true that wheat and cotton

buy more rupees, and is it not also true that the rupee has no^
the same purchasing power as before?
Mr. JONES of Nevada.

I have the most complete tables on


that subject, which I did not care to inflict upon the Senate, and
the figures they contain show that for twenty years the price of
silver has governed the price of wheat; that the price of wheat
varied with the price of silver.

A n ounce of silver coined into

rupees was the price of a bushel of wheat, with freight added r
in Liverpool.

Is that accidental?

The brief and sufficient an-

swer to all the Senator has said with regard to what under given
circumstances the Bombay or the Calcutta merchant would do
and what the ryot would do is the simple fact that under all
changes the price of a bushel of wheat has been an ounce of silver.
Mr. M c P H E R S O N .
has said.

Suppose I admit everything the Senator

W e know, of course, that India is not a civilized coun-

try to the full extent in which we understand the term civilizar

Apply that to the American farmer.

He is an intelligent

man; he receives telegraphic reports; he takes the newspapers;
he knows every day at the little railroad station near which he
lives and where he sells his products the price of wheat in London.

I want to know if the American farmer would be willing

to sell his wheat in the London market for a dollar a bushel in
gold, to be paid in silver, and silver is worth but 57 cents on t h e
Mr. JONES of Nevada.

The Senator talks as though a farmer,,

cultivating a little piece of land upon which rests a neavy mortgage, occupies himself by running to the telegraph office in order
to ascertain the amount of wheat that India is going to sell, and
then makes calculations as to the product of Europe.
no such thing occurs.

Of course

He sees simply what the price of wheat

is in Liverpool, and that fixes it.

That becomes the price.


sells at that price, and can not get more.
Mr. T E L L E R .

W i l l the Senator allow me to make a sugges-

tion as to the cotton trade?
Mr. JONES of Nevada.
Mr. T E L L E R .


The Senator from New Jersey thinks that

India does not export cotton, and that therefore she can have n o
influence on the cotton trade.

I have before me an article by

Mr. Grenfell, published in the Fortnightly Review for September, 1893, headed " Mr. Gladstone and the currency." and I want


to show from that article the export of cotton from India and from

The table that I now read is headed " From India to

China, Hongkong, and Japan."

It does not include some of the

other countries spoken of by the Senator from Nevada.

It runs

from April 1 to March 31, that being the Indian fiscal year, and
the exports from India to China, Hongkong, and Japan are given,
beginning with the year 1876—'77.
Mr. G E O R G E .

Does that refer to raw cotton?

Mr. T E L L E R .

No, it is cotton yarn.

The first table given

is as follows:
From India to China. Hongkong, and Japan, from April l to March si.
6. 596.129 1880-'8 1
13.783.563 1881-'8 2

1876-'7 7
1878-'7 9
1879-80 ...


Taking the next six years, beginning with 1882-'83, the following is the statement:

1882-'8 3
1883-'8 4
1884-'8 5
1885-'8 6

1886-'8 7
1887-'8 8




The exports from 1888 to 1892 were as follows:
From January 1 to December si.


178, 249, 034



Now, take the exports from England to the same places, China,
Hongkong, and Japan, beginning at the same time—that is, in
1876—and the following is the statement:
From England to China, Hongkong, and Japan, from, January lto December Si.





It will be noticed that the exports from India rose from 117,851,376 pounds to the places named in the next six years to
427,914,265 pounds, and in 1882 the English export fell to 34,391,500 pounds.
Mr. M c P H E R S O N .
Mr. T E L L E R .

T o the same countries?

To the same countries.

The following is the


statement of the exports of cotton yarn from England to the
same places from 1882 to 1887:
33,499, 800
38, 856,100



26, 930,400

A decrease of more than 28,000,000 pounds in the six years.
The following are the figures of the English export for the
n e x t five years, from 1888 to 1892:
From January l to December 31.
44,642,600 1892
. . . . . 38,057,400

189 0
189 1

. 178,277,500

Thus we have the total exports of cotton yarn from England
for the five years from 1888 to 1892 amounting to 178,227,500
pounds, as against 730,175,306 pounds, which had been exported
from India to China, Hongkong, and Japan.
I have a statement here showing that the Indian export trade
has practically destroyed the yarn trade of Great Britain.


think that will explain to the Senator how it has affected cotton,
because Great Britain was the market for our cotton and of the
cotton raised in India.

I want to state a further fact to the Sen-

ator, if the Senator from Nevada will indulge me a moment, that
during the last year cotton has been imported—to what extent
I do not know, but it has been imported—from India to the
United States.
Mr. M c P H E R S O N .

I should like to ask the Senator ho >v that

statement changes my contention in the least? India has engaged
in the manufacture of her own products, and she finds a ready
market in China and Japan.

As a matter of course, if it were

not that India produced cotton, the result would be that American cotton would probably go to China and Japan t h r o u g h the
English market and through the English manufacturers, but if
India finds a market in China and Japan, it is to the infinite
credit of India that she is able to manufacture her own goods.
There is nothing in the world that should prevent that; and it
can not hurt the American crop of cotton.

So the Southern

States have largely increased their manufacture of cotton, and


so has England increased her manufacture of cotton; but she
has found markets else where than China and Japan. That market
has been gained by India, which has become a factor in manufactures, and will always be a factor in the growth of wheat, but
India can not compete with the American export of the raw
material which goes to London, whether it be wheat or cotton
which we export, and do not manufacture.

For what we manu-

facture we find a market in other nations and at home.
It is to the credit of India indeed that she has found a market.
Y o u can not prevent her doing that, nor can you prevent the
natural causes which aid in the raising of wheat in India: but
that silver has anything to do with it, I deny, unless as silver
has fallen it has stimulated for a time, perhaps, growth and p r o duction.
Mr. JONES of Nevada.
Mr. M c P H E R S O N .


For this reason.

A s a matter of course,

the Indian ryot, selling wheat to-day in London and receiving a
certain amount, say 40 shillings per quarter, and taking his pay
in gold, will turn around and convert that gold into silver: and
instead of getting 20 rupees he gets 35 rupees for it.

That stim-

ulates production to a certain extent, but to say that the producer of wheat does not get the benefit is simply to say that there
is nothing whatever in commerce in which competition enters.
Mr. T E L L E R .

May I be indulged a moment by the Senator

from Nevada?
Mr. JONES of Nevada.
Mr. T E L L E R .


The Senator from New Jersey says we shall

always have India in competition in wheat-raising and in manufacturing.
Mr. M c P H E R S O N .
Mr. T E L L E R .


W e did not have India as a factor in either

until the low price of silver stimulated the export, first of wheat
and then the creation of manufactures in India.

That is a his-

torical fact which the Senator will not deny.
No wheat came from India to Europe until after the fall in silver, and practically no goods were manufactured in India and
sent to China until after the fall in silver.
says ' ; W h a t of it? It is to India's credit."

Now, the Senator

That is not the ques-



The question is, W h y did England buy less of American

cotton last year than ever before?
own market.

Because England has lost her

W h e n the Senator states she has made up her

market in some other portion of the world, I say she has absolutely lost her market and has not made it up anywhere, and the
statistics will not support the Senator.
India has become the competitor of Great Britain in the cotton business as well as the competitor of the United States in
the wheat-raising business.

It has become the competitor of

England because it raises its own cotton and manufactures it
and sends it to China, and thus takes away the English market.
It can be seen that the English market has fallen off, while the
Indian product has increased from 6,000,000 pounds in 1876 to
178,000,000 pounds in 1892.
to the credit of India.

It is not a question whether this is

It is undoubtedly true, as the Senator

states, that India is to be hereafter a factor in wheat-raising and
a factor in manufacturing.

That is the unfortunate part of it.

It will be the perpetual destruction of our market for wheat and

W h a t we complain of is the stimulation brought about

in India by the cheap price of silver, or, to state it more accurately, the enhanced value of gold.
Mr. M c P H E R S O N .

The Senator should state that the fault

is not the fault of India or of the United States, but the generosity of nature; that nature has given to India wheat-fields and
cotton-fields, which are suitable for the growth of wheat and
cotton, and suitable for nothing else.

I want to know how he is

to stop India f r o m producing wheat and cotton, when they have
rapid and cheap transportation between the ports of India and
those of England.

There is nothing else they can do in the

world except to grow wheat and cotton, and, as a matter of
course, they will grow it.

India has a population of 300,000,000

souls, or more, which must be supported in some way out of the
lands of India.

A f t e r 1870, when cheap transportation was

opened with India by way of the Suez Canal, India began to export her wheat and her cotton to London.
Mr. T E L L E R .

She did not do it until some time after that.

Mr. M c P H E R S O N .

I did not say how long after, but cer-

tainly in 1872 India exported very largely of wheat and cotton.



She did not.

Mr. M c P H E R S O N .

This export has been occasioned by the

improvements which have been made by the British Government in India in developing her great railroad system.


these railroads were built, the only means of transportation in
India was by ox-carts across that immense territory.

The very

moment transportation was opened, labor being cheap, they
began to grow wheat and cotton, and they became a factor and
they will always remain a factor; and as new lands are opened
in Asia and Africa the people of those countries will also become
factors; but what silver has to do with the question I can not
Mr. JONES of Nevada.

Mr. President, the Senator from New

Jersey states that nature has done this thing, and that we have
to complain of nature.

It had its genesis in the demonetization

of silver in 1873, and dates from that time.

That was done by legislation.

Nature did not do

It enabled the East Indian

ryot, in competition with the gold-using countries of the world,
to almost absolutely drive out of competition all other countries
and to make them produce cotton and wheat at a loss by reason
of the enhanced value of gold, or, as the Senator from New Jersey
m i g h t be pleased ^o term it, the low price of silver.
The combined losses 011 wheat and cotton which I have shown
amount to $325,000,000 a year, or more than a million dollars for
every working day, since the issue of Mr. Cleveland's
mination against silver.


A s a consequence of the repeal of the

silver-purchase law now in force, the losses to the farmers and
cotton planters of the United States will be very much greater.
Perhaps our farmers and planters should be only too happy in
the knowledge that any sacrifice on their part might contribute
to the constantly growing wealth of the nonproducers of Europe
and of India.

Nothing is better established by men who know and who write
of their own knowledge regarding the affairs of India than that
the prices of commodities there have not fallen as have prices
in gold-standard countries.


Mr. Daniell, in his work on The Industrial Competition of
Asia, says:
What has happened is that silver prices, or, to speak more exactly, the
value of silver in gold has fallen in Europe while its value in the exportable
products of India has not fallen correspondingly or at all in that, country.
(Page 32.)

Every decline, therefore, in the gold price of silver bullion, so
far as our farmers and cotton planters are concerned, is a decline
in the price of wheat and cotton at Liverpool; though not a decline in the price of anything that the East Indian people need,
or consume, or buy.

So far as the people of India are concerned,

gold is not their money, and, as I have already stated, changes
in its value have no more effect upon them than if they inhabited another planet.

Every decline in the gold price of silver

bullion is a premium—a bounty—given to the producer of wheat
and cotton in India over the American farmer and cotton planter
in the prices of those commodities in European markets.
This encourages exportation from India to those markets.
Should the Hindoo, in return, want to buy gold with which to
pay for English goods, he would have to pay an enormous premium upon it.
tions into India.

This fact acts as a discouragement to importaBut as the 285,000,000 East Indians live almost

wholly on what their own country produces, they do not need
to buy gold for foreign payments.

T h e only people in India

who have anything whatever to do with goods made in goldstandard countries are a few English officials, a few native
princes, and the few merchants with whom those classes deal.
T h e vast masses of the people of India buy the commodities of
their own country with the silver rupee alone.













Every decline in the gold price of silver bullion is a direct
blow at the prosperity of the farmers and cotton planters of the
United States, a blow against which they are powerless to protect themselves, except by the opening of the mints of the United
States to the free coinage of silver.

This will be an act which

can not possibly injure any human being, not even the ryot of
India, inasmuch as wages in that country of 285,000,000 people
remain the same throughout the years.

It would, on the other


hand, be an act which would put heart, and hope, and energy into
every farmer and every planter in the United States.
That the fall of silver bullion does act as a bounty or premium
on Indian exports, the highest authorities show.

Air. Bagehot,

for many years the editor of the London Economist, in his work
on the Depreciation of Silver (page 54), says:
The necessary effect of a depreciation of silver as against gold is to give a
bounty on exports from India and the other silver-using countries to England. An English merchant can n o w buy many more rupees than he formerly could with the same number of sovereigns, and therefore he can import from India, though prices at Calcutta are not at a level at which it
would have paid him to operate if he had not had that novel facility in getting rupees.

So Mr. Bagehot differs from the Senator from New Jersey,
and I think that that gentleman has studied the question almost
as much as the Senator.
The same fact is proved by Mr. David McLean, manager of
the Hongkong and Shanghai banking corporation of London, in
the course of his testimony before the British royal commission on gold and silver, May 16, 1887.

In that testimony I find

the following questions and answers:
Q. I think y o u said that the wheat in India was often sold here in England
before it was actually purchased there?
A. Yes; very often.
Q. Then how is the operation carried out? Is it bought by corn merchants
here in England, and do they send out an offer for a certain quantity of wheat
of a certain quality?
A. Yes; and if the offer is sufficient, the wheat is shipped.
Q. Some witnesses have told us that the rate of exchange between India
and England acts like an export bounty or bonus upon the wheat sent f r o m
India to England. Is that your opinion?
A. I think the fall in exchange has encouraged the export of wheat f r o m
India very largely.
Q. And every additional fall acts as a bonus?
A. Yes.
Q. And you think that the fall in exchange has stimulated the export of
wheat from India?
A. Yes; there is no doubt about it r
Q. Do you think that that will be an abiding stimulus.
A. I think so; I think it will go on increasing.

This witness's foresight has been amply verified by the subsequent facts.

Inasmuch as an ounce of silver makes two and a half

rupees (no matter what the price of bullion may be), if silver
should fall to 50 cents an ounce in consequence of the repeal of
the Sherman law, an ounce of the metal would still make two


and a half rupees, which would still pay for a bushel of Indian

So long-, therefore, as India exports wheat, and it has

hardly more than commenced, the price of that wheat will fix
the price of American wheat until such time as silver is remonetized in the United States.

W h e n that shall be it is for our

producing classes, not for bankers, brokers, bondholders, and
other nonproducers, to decide.
W i t h reference to cotton, an ounce of silver will place ten
pounds of that commodity in Liverpool.

However low, there-

fore, the price of silver bullion may fall, the American planter
must, for the price of an ounce of that metal, deliver ten pounds
of raw cotton in Liverpool.

Should silver fall to 50 cents an

ounce, if he would sell his cotton, he must deliver ten pounds
of cotton in Liverpool, and pay transportation charges on it, all
for 5 cents a pound.
By bringing the price of silver bullion to a parity with gold
on the relation established in this country since 1792, our farmers and cotton-planters will be relieved of the competition of the
East Indian in the markets of Europe.
W i t h reference to the effect of the competition of India on
the price of American and English wheat, the British Royal
Commission on gold and silver in 1887 examined a number of
witnesses, among them Mr. J. Shield Nicholson, professor of
political economy at the University of Edinburg, and one of
the most distinguished economists of Great Britain.

T h e fol-

lowing question, which is precisely to the point, was put to
Prof. Nicholson by a member of the commission:
Indian wheat is the very wheat that is complained of by Secretary Manning, Secretary of the United States Treasury, as having lowered the price
of European and American wheat, and he attributes it all to the divergence
of gold from silver. You do not think tying gold and silver again would
raise the price of English and American wheat by 25 per cent?

In his reply Prof. Nicholson discusses the factors entering into •
the determination of prices under given conditions, and on the
point immediately germane to the point I am discussing, said:
Now, it seems to me probable if the price of silver rose to its old level
wheat could not be profltablg exported from India until prices rose in a corresponding degree. For India, being a silver country, the price of wheat there
is independent of the relative value of gold and silver. An exporter to England
at present will give the Indian price in silver, and he can buy his silver for
less gold, and thus competition will lower the price. If the price of silver

rose the exporter from India must get more gold. Thus a rise of
would, on this view, raise the price of wheat to a corresponding degree.


There is not a shadow of doubt that Prof. Nicholson is right.











I must here repeat that there is no ground whatever for supposing that in case of remonetization of silver in this country
all the silver of the world would be sent here.
As quickly as the telegraph could convey the news that the
United States had fully remonetized silver, that metal would
command $1.29 an ounce in every market in the world.

As I

have said, there is no silver bullion in the markets of the world
to exceed 25,000,000 ounces, if so much.

Such silver as may ex-

ist in any market would not need to come to the United States,
because when men knew they could get $1.29 for it by sending it
here they would not part with it for less.
W e have a demonstration of this in the fact that when in 1890
there was some expectation that a free-coinage bill m i g h t become a law in this country, and silver rose in consequence to
$1.20 an ounce, it rose to that price not in the American market
alone, but in every market in the world that had any silver bullion for sale.
W h e n it is said that the hoards of silver in India would come
here to be exchanged for gold, there is not the slightest foundation in reason for such a supposition.

Gold s not the money of

the 280,000,000 people of India, and it is impossible to conceive
that it ever can be.

The remonetization of silver simply means

that with silver freely admitted to the mints, gold would fall in
relation to silver.
W h y should the people of India want it on that account?
W h e n silver fell as compared with gold, did the people of the
gold-standard countries buy silver because they could get it
" cheap?"

Did anyone ever hear it suggested that when silver

declined as compared with gold the gold-using countries would
probably " d u m p " their g o l d , w h i c h was their money,into India
or any other silver-using country in order to take away silver,
simply because silver was getting " cheap? "

As gold is not the

money of India, any more than silver is the money of the West785


ern world, why should we suppose that when gold falls rel atively
to silver the people of India would " d u m p " their silver into
this country?
The silver of India, w h i c h is so much feared here, is referred
to by the latest official report—that of Lord Herschel's Indian
currency commission—as "coined rupees, of which it is said the
hoards chiefly consists."

(Report of the Commission, paragraph

A r e the people of India going to ship out their coined money
to be exchanged for something that, so far as they are concerned,
is not money, but merely a commodity?

The fact that there is

in India a considerable quantity of uncoined silver has but little
bearing on the question we are now discussing.

A s I have said,

the teeming millions of that country have always dedicated to
purposes of worship considerable quantities of the silver drawn
from Europe and America. Not only do they use it in the architectural decorations of their numerous and magnificent temples, but
as objects of religious regard, both in those temples and in their
homes and for religious charms, which they wear upon their
persons, and to which they attach, supernatural virtues.
That a people like the unchanging and unchangeable Hindoos
should, because of a change in the commercial relation between
gold and silver, melt up their idols and religious charms is, to
my mind, simply inconceivable.
Even as to that portion of the silver of India which consists of
simple personal ornaments and to which no religious value may
be attached, there is not the slightest justification for supposing
that its owners would part with it.

The best evidence of this is

found in a fact recorded in the report of the Herschel commission, paragraph 106.

Referring to that class, the report states:

In times of scarcity and famine a considerable quantity of silver ornaments has found its way to the mint.

But what is the quantity that the Commission terms " c o n siderable "?

It states that in the three years 1877-1879, inclu-

sive, as much 4,500,000 tens of rupees were coined from these

Now, the famine of 1877 was one of the most de-

structive famines ever known in India—the number of recorded
deaths from starvation being over 500,000—leaving the imagi7S5


nation to conceive the vastly greater number of unrecorded
deaths occurring among 280,000,000 of a squalid population
which during the most prosperous seasons are barely able to
keep body and soul together.

In round numbers 4,500,000 tens

of rupees may be taken to be $22,000,000.

This is the total sum

in silver ornaments which, in those three extraordinary years,
under the pressure of wholesale starvation the Hindoos could be
induced to part with.

This is at the rate of about $7,000,000 a

year—which for the purposes of this discussion is hardly to be
regarded as threatening a " f l o o d . "

Nothing but starvation

would have d£awn from them even so much as that.

It is pre-

posterous to suppose that a change of relation between gold and
silver would do what widespread starvation has been unable to
do—especially when, to the Hindoos, the process appears in the
light not a rise in silver measured by gold, but a fall in gold
measured by silver.
For as I have said, silver and not gold is the measure of value
in silver-using countries.

Persons living in a gold-using coun-

try, accustomed to estimating values in gold and to seeing prices
stated in gold, are prone to imagine that all the world sees
things as they see them.

T h e fact is that the people of each

country estimate and measure values—that is, they state prices—
in whatever is money in their own country.

In silver-using

countries all estimates are made in silver; in a gold-using country in gold; in a paper-using country in paper.

W h a t , to a

people in a gold-using country, would seem to be a decline in
the value of silver, would to people in a silver-using country appear to be an advance in the value of gold.
In order that it may be ascertained which of the metals has
changed, or whether both may not in fact have changed, it is
necessary to compare each with all the things which it is the
function of money to measure.

If it is found that all things ap-

pear to have changed in relation to the money of one country,
while all things remain unchanged in relation to the money of
the other, it can not be truthfully affirmed that the change has
been in the money of the country, in relation to which all commodities have maintained a practically unchanging relation. So,
when all commodities appear to have fallen in their relation to


a particular metal, while at the same time maintaining practically unchanged their relations toward one another, it is asking
too much to require us to believe that it is all these things which
have changed and not the particular metal.

From the point of

view of common sense alone, it must be conceded to be more
probable that one thing has changed than that every one of thousands of things (which maintain throughout a practically unchanging relation to one another) have all changed in relation to
one thing.


The New Y o r k newspapers were delighted when, during the
past summer, the price of wheat fell to a point at which that
cereal could be exported instead of gold, in payment for imports.

The New Y o r k Sun of June 19, 1893, called attention to

the fact that when the price of wheat became low enough the
gold that had left the United States came back from England,
because our importers could pay for their imports with American
wheat rather than with gold.
The farmers of the United States ought to be very glad to
know that by this depression of the price of the product of their
labor the brokers of New Y o r k , w b o deal in Reading stocks and
in Chicago Gas and National Cordage, are enabled, without loss
to themselves, to pay their bills in foreign countries.

W h o are

the farmers of this country, that they should interfere with the
profits of the New Y o r k brokers, or complain of the state of
things by which wheat is, by artificial means, reduced in price?
If the ruin of the farmers be necessary to enable the brokers
and bankers of New Y o r k to become rich, the farmers should be
willing to be sacrificed.
I hope that Senators in this Chamber who represent agricultural communities, who represent growers of wheat and of cotton,
can explain to their constituents the philosophy of the votes
they cast here in favor of the repeal of the Sherman law.
I hope the distinguished Senator from Ohio [Mr. SHERMAN]
will be able to satisfy the farmers of the great State which he
represents here that the $17,000,900 a year which they are out
of pocket on the sale of their wheat by the fall in the gold price
of silver bullion is more than made up to them in the gratifica785


tion they must feel at the increased wealth accruing to the
hankers, bondholders, pawnbrokers, and other creditors of Europe and America.
I hope, also, that such of the distinguished Senators from cotton-growing States as favor the demonetization of silver, to be
effected by the repeal of the purchase clause of the Sherman
law, will be able to prove to the satisfaction of the cotton-producers of the great Commonwealths which they represent in
this Chamber that those producers are not being destroyed by
the competition of India, and that that competition is not enormously stimulated by the bounty which the fall in the gold price
of silver bullion gives to the East India grower of cotton.
Agriculture, Mr. President, is the most fundamental and vitally necessary industry of mankind.
not live.

Without food men can

But in order that some men in other countries may

live better than they otherwise would, it is neither necessary
nor desirable for our people to permit our agriculturists to be
destroyed, or to be Kept at the lowest level of physical existence.
A country can have no better class of men than those who cultivate the soil; and in the selection of national policies we can
make no mistake by adopting such as may save from serious injury a class to whom the*ordinary methods of tariff protection
can be of but slight avail.


Mr. President, I am and have been a protectionist, and for
very broad reasons, which I have heretofore had the honor to
present in full to the Senate.

I believe no country can be so

happy as when it is doing all its own work; that no country can
be richer than one in which all its people are employed with
hand and brain in pursuits that accord with their aptitudes.


Mr. President, I want the protective theory to have full scope.
I want it carried out to the end of the chapter.
ent protectionist.

1 am a consist-

I believe in protecting all classes, not merely

some classes; all industries, not merely some industries.
Under the present protective policy of this country it is not
possible for the farmers and cotton producers to be directly benefited by the tariff.

The benefit they receive can only be that

indirect benefit which comes of developing in their immediate


neighborhoods the various manufacturing industries which will
create a demand for the products of the farm.

Whatever differ-

ences of opinion may exist as to whether a tariff is or is not a,tax
on some of our people for the benefit of others, no one can deny
that by legislation upon our part which will bring the price of
silver bullion to $1.29 an ounce we have an absolutely certain
method, without imposing any tax whatever on any class of our
people, of giving protection to our farming population, both
North and South, protection against a competition infinitely more
grinding and destructive than that of the people of Europe,
against whom especially our tariff wall has been erected.
W h e n we take into account the premium which the Asiatics
receive upon their exports, by reason of the fall in the gold price
of silver bullion, theirs is a competition which it is impossible
for us to remove except by raising the price of silver bullion,
which can be done without the slightest injury to anyone and
with immeasurable benefit to all.

W e can not erect a tariff wall

which will compel the East India wheat-grower to pay a duty on
his wheat as it enters Liverpool; we have no control over the
fiscal policies of other countries.

But in the way I suggest we

can erect a tariff wall that will protect our agriculturists North
and South, to the same degree that ouP manufacturing interests
are already protected.

And we must remember, Mr. President,

that if our farmers are to get the benefit of protection to the
same degree that our manufacturers do, it can only be by the
plan I recommend—by opening the mints of the United States to
the unrestricted coinage of silver.
For my part, I can not conceive how, consistently with their
theory, the protectionists of tne country can deny to the farmer
the full benefit of that policy.

W h i l e I do not believe that pro-

tection is a selfish policy except in the sense that all national
policies are selfish, and national selfishness is patriotism, I fear
that the agriculturists of the country will come to believe—do
they not already largely believe?—that the protective policy is
designed to benefit the manufacturers only; that it is for the advantage of certain classes, and not for the benefit of the whole

T H E P R E S I D E N T ' S L E T T E R TO G O V E R N O R




in a letter addressed



Northen, of Georgia, which I find published in the Washington
Post of September 28 last, says:

D. C., September


MY DEAR SIR: I hardly know how to reply to your letter of the 15th instant. It seems to me that I am quite plainly on record concerning the
financial question. My letter accepting the nomination to the Presidency
when read in connection with the message lately sent to the Congress in extraordinary session appears to me to he very explicit. I want currency that
is stable and safe in the hands of our people. I will not knowingly be implicated in a condition that will justly make me in the least degree answerable to any laborer or farmer in the United States for a shrinkage in the
purchasing power of the dollar he has received for a full dollar's worth of
work or for a good dollar's worth of the product of his toil.
1 not only want our currency to be of such a character that all kinds of
dollars will be of equal purchasing power at home, but I want it to be of
such a character as will demonstrate abroad oar wisdom and good faith,
thus placing us upon a firm foundation and credit among the nations of the
I want our financial condition and the laws relating to our currency so
safe and reassuring that those who have money will spend and invest it in
business and new enterprises, instead of hoarding it.
Y o u can not cure fright by calling it foolish and unreasonable, nor you
can not prevent the frightened man from hoarding his money.
I want good, sound, and stable money, and a condition of confidence that
will keep it in use.
Within the limits of what I have written I am a friend of silver, but I believe its proper place in our currency can only be fixed by a readjustment
of our currency legislation and the inauguration of a consistent and comprehensive financial scheme. I think such a thing can only be entered upon
profitably after the repeal of the law which is charged with all our financial
woes. In the present state of the public mind this law can not be built
upon nor patched in such a way as to relieve the situation.
I am therefore opposed to the free and unlimited coinage of silver by this
country alone and independently; and I am in favor of the immediate and unconditional repeal of the purchasing clause of the so-called Sherman law.
I confess I am astonished by the opposition in the Senate to such prompt
action as would relieve the present unfortunate situation.
My daily prayer is that the delay occasioned by such opposition may not
be the cause of plunging the country into deeper depression than it has yet
known, and that the Democratic party may not be justly held responsible
for such a catastrophe.
Yours, very truly,
Hon. W


J. N O R T H E N .

The President says he wants a " stable "currency. The President is said to be a man of convictions, and I have no doubt that
he believes fully that gold is a stable currency.
the economists say in this re -peel?
78 5 - 2 )

But what do


Adam Smith, in his work on the W e a l t h of Nations, says:
Gold and silver, like every other commodity, vary in their value. The discovery of the abundant mines of America reduced in the fifteenth century the
value of gold and silver in Europe to about a third of what it had been before.
This revolution in their value, though perhaps the greatest, is by no means
the only one of which history gives some account.

Evidently Adam Smith did not believe that gold was a stable
Prof. Jevons, in his work upon Money and the Mechanism of
Exchange, chapter 6, says:
In respect to steadiness of value the metals are probably less satisfactory,
regarded as a standard of value, than many other commodities, such as corn.

By " oorn " Prof. Jevons meant wheat and all other cereals.
The same author, in chapter 24 of the same work, says:
W e are accustomed to looking upon the value of gold as a fixed datum line
In commerce, but in reality it is a very variable thing.

H e appears to differ with the President as to the " stability "
of gold as a standard of value.
Ricardo, in his paper on the H i g h Price of Bullion, says:
If we diminish the quantity of currency, we give an additional value to it

By " c u r r e n c y " Ricardo meant money of every character, including gold.
Mr. Macleod, in his able work on the Elements of Banking, says:
The actual alteration in the quantities of the precious metals has materially altered their value at different periods of history, (Page 163.)

W e have a distinguished American economist who also differs
with the President as to gold being a stable currency.


Francis A . Walker, of the Massachusetts Institute of Technology, in his able work on Money, says:
Gold and silver do over long periods undergo great changes of value and
become in a high degree deceptive as a measure of the obligation of the
debtor; of the claim of the creditor. Thus Prof. Jevons estimates that the
value of gold fell between 1789 and 1809, 46 per cent, and from 1809 to 1849 it
rose 145 per cent, while in twenty years after 1849 it fell again at least 20 per

A s this enormous increase in the value of gold and silver
arose from the falling off in the yield of the metals from the
mines of South America, one would suppose that the lesson of
quantity would have impressed itself on those whose duty it is
to deal with monetary policies.

The President's idea of stability

must be somewhat nebulous when he supposes that gold is a


stable material, history demonstrating that it suffered an alteration of 145 per cent in one generation, so that one pound
sterling became practically two and a half pounds sterling.
The President also says that he wishes our currency laws to
be such that those who have money will spend and invest it in
business and in new enterprises instead of hoarding it.
I wonder whether the President ever asked himself the question why people hoarded money and did not invest it in business
Does he suppose that while dollars are increasing in value—
acquiring daily larger and larger control over property and
commodities, more valuable to-morrow than to-day, and more;
valuable next week than this—people

are going

to be in a

hurry to invest in property that is going down in price?


he suppose that people will want to buy property that will be
worth less next week than it is to-day?

W o u l d not the instinct

of thrift induce them to withdraw their money from productive
enterprises and hoard it?
Does the President suppose people will invest money for a given
amount of property when they know that that amount, if held in
hand, will buy much more property next month than this, and
next year than this year?

The President's idea is that money

is '' stable " when it is increasing in value, but unstable when it
is decreasing; so that according to this theory when property is
rising in price it signifies that money is unstable and unsound,
but when property is falling, so that those who own money may
be able to get an increasing amount of property for a given number of dollars, then money is " stable;" it is then " g o o d " money,
"sound " money, " h o n e s t " money!
In this letter to Governor Northen, the President also says:
My letter accepting the nomination to the Presidency, when read in connection with the message lately sent to the Congress in extraordinary session, appears to me to he very explicit.

That is to say, explicit with reference to the President's views
concerning the financial question, upon which he says in the
same letter:
It seems to me that I am quite plainly on record.

It is a great pity, Mr. President, that the President was not a


little more explicit before the election.

Had he been so he m i g h t

have been relieved of the necessity of being so explicit afterward.

After the election he furnishes the country with a cryp-

togram by which his letter of acceptance may be interpreted.
Had that letter needed no cryptogram the President would not
have supplied one.

He would not have become President for

the second time had the people of the United States, or the voters
of his party, understood that there was a mental reservation with
reference to the financial question, which reservation would be
fully expounded in a message to be " s e n t to the Congress in
extraordinary session," after the election, and which by its terms
would annul the platform of the party which nominated him.
In the same letter Mr. Cleveland says:
I will not knowingly be implicated in a condition that will justly make me
in the least degree answerable to any laborer or farmer in the United States
f o r a shrinkage in the purchasing power of the dollar he has received for a
full dollar s worth of work, or for a good dollar's worth of the product of his

Every man knows that when a " laborer or f a r m e r " gets dollars he usually retains them in his possession but a few days,
and on paying them out receives for them all that he gave.
Mr. Cleveland is very anxious that there should be no shrinkage in the purchasing power of the dollar for the extremely few
men who have reduced dollars to possession, but he expresses no
anxiety with reference to the gross injustice of creating an artificial shrinkage in the purchasing power of the bushel of wheat
and of the pound of cotton, and erf all the other products of human
industry, with which alone dollars can be obtained.

V e r y few

men have reduced dollars to possession compared with the enormous number that have yet to produce the material with which
dollars can be obtained, for the purpose of supplying wants and
paying debts.
The President knows that the whole stock of money in circulation in the country is only sixteen hundred million dollars,
and he ought to know that there are at least thirty or forty
thousand million dollars of debt;

so that for every dollar of

money which any man has reduced to possession there must be
twenty or thirty dollars that are owing by the producers of the
country, who must pay the ever-increasing value of the dollar


by an ever-increasing quantity of the products of their toil.


the President should concern himself about is not a shrinkage in
the purchasing power of the dollar to the few men who have reduced dollars to possession, but rather the shrinkage in the purchasing power of the unit of all the products of industry; so that
the farms and homes that are mortgaged may not by summary proceedings become the property of the mortgagee to the ruin of
the mortgagor; and so that the workingmen of the country may
not be relegated to idleness by reason of the absence of profit to
their employer, owing to the persistent fall of prices, which
the increase in purchasing power of the dollar is constantly gaining over the products of industry.

For the entire question in-

volved in monetary discussion is the question of the course of general prices
It is a great pity that the President did not call the extra session of Congress before the election, so that the country might
have before it an unmistakable statement of his views with reference to this all-important question.

It does not seem to have

been quite candid on the part of the President to adopt the plan
of the serial story papers, by which each installment is supplemented with the statement, " T o be continued in o u r n e x t . "
It is marvelous to observe what solicitude is displayed by the
President and the bankers witn reference to a shrinkage in the
purchasing power of the dollar—that is to say, a rise of prices
of commodities.

This is what they term inflation.


undoubtedly, is to be avoided, but so also is contraction.


two opposite factors in the money problem end in disturbance
and distress.

But the harm done by inflation, as the whole

history of commerce shows, is not one-hundredth part so great
as that done by contraction.


In every period of the history of the world, when prices have
been gradually rising, activity and

prosperity have marked

every department of business, while, on the contrary, whenever
a fall of prices has been taking place—and that has been the condition almost constantly, the periods of rising prices being f e w
and short—cankering and corroding misery have been its concomitants; social and political upheavals have been universal,


and civil governments, without respect to the degree of freedom
or liberty of which the people were possessed, were threatened
with overthrow.

It will be remembered that, as I have already

stated in the course of my remarks, during 1848 and 1849, at the
end of a generation of falling prices, violent upheavals characterized every city and country of Europe.

Starving men, women,

and children crowded the streets and cried for bread.
Almost every country of Europe had a revolution on its hands,
which could only be repressed by the strong hand of the military.

A n d this equally in despotic Austria and comparatively

free England and republican France.

It must never be forgotten

that the greatest civil commotion of all time—that which struck
terror into the hearts of all the governmental forces of Europe—
the French revolution—occurred after a period of seven years
persistent fall of prices.

That fall, which brought to a culmina-

tion the miseries of the French people, was a fall of but 15 per
cent, yet it was sufficient to relegate to idleness and keep long
in misery enormous numbers of men whose discontent and suffering finally overtoppled first the throne and later the republic.
In all ages of the world the great disasters have occurred during periods of falling prices.

Y e t we hear no solicitude—no anx-

iety—expressed by the President or the bankers because of the
persistent fall of the past twenty years in the prices of the products of industry in this country—although the story of all the
nations is punctuated with disasters growing out of this baleful
and prolific source.

T h e only fear we hear expressed is that

prices will not fall enough—that the producers will not be sufficiently

" c i n c h e d " by the idle creditors, income-gatherers, and

The President and the bankers express so much anxiety with
reference to a shrinkage in the purchasing power of the dollar
that they ought to have been delighted with the recent panic.
There was no shrinkage in the power of the dollar throughout
that period, and there is no shrinkage in its power now.


ever saw a dollar in the United States buy more than during the
recent disturbance?

According to the theory of the President,

instead of regretting the panic as a great evil we should rather
hail it as the dawn of the millenium.


If this Republic, Mr. President, is ever to lose its liberties it
will be through the gradual absorption and concentration of all
the functions of government in the hands of the Executive.
There is to-day throughout the country a feeling of uneasiness,
crystallizing into a conviction, that the lines of demarcation
which the Constitution has wisely marked out between the various departments of the Government are being obliterated, and
that the functions of government are being merged more and
more into the Executive.
It was the proud boast of the makers of the Constitution that
for the first time in history the three departments of government, the legislative, the executive, and the judicial, were by
that instrument made wholly independent of each other.


is within the knowledge of Senators that the Executive of
this Republic, whoever he may for the time be, possesses more
power of patronage than any monarch on earth.
The constitution grants the Executive the right, and imposes
it as a duty, to make to Congress recommendations from time
to time as to the state of the Union, but the Constitution never
contemplated the exercise of any pressure by the Executive upon
members of either House of Congress.

The framers of that in-

strument—men of wisdom and patriotism—had had some experience and observation of a pressure exercised by a chief executive, who, though called a king, had neither power nor influence which was for a moment to be compared with that of the
Chief Executive of this Republic in the closing years of the
nineteenth century.
The population of Great Britain in 1780 was less than onequarter of our population of to-day.

It was less than 16,000,000

of people, and the tenure of all persons holding government offices
was for life or for good behavior.

T h e power of a king in such

circumstances—the patronage which he could exercise, the influence which that patronage implied—in other words, the pressure
which the king of a little country could bring to bear upon the
members of the legislative body, was not a tithe of that which
the President of the United States could, were he so disposed,
bring to bear upon the members of the legislative department


of this Government—even were the members of that department
disposed to permit any interference with their constitutional
The British king may have been a tyrant; but there had been
greater tyrants.

He was not Dionysius or Critias.

But he was

tyrant enough to convince the people of these colonies that in the
making of a new constitution they should be on their guard
against any encroachment by executive power on the independence of the Legislature.

Hence, in providing for the relations

which, in the Republic they were founding, should exist between
the executive and the legislative departments of the Government, the makers of the Constitution never contemplated the
exercise of any pressure by the Executive upon the members of
either House in connection with questions of public policy.
The legislative branch of the Government is as independent
of the executive as is the judicial branch.

I am now merely

supposing a case; but I ask, in all seriousness, what would be the
condition of public morality in this country if it should come to
be understood that the judges of the Supreme Court, who by
the Constitution are not a whit more independent of the executive department than are members of this body, might e x p e c t
Executive favors in the way of patronage provided the judges
rendered decisions corresponding with the views of the Executive in behalf of one or the other of the parties to a suit
pending before the Supreme Court of the United States?


promptly would the press demand the impeachment of the Executive!

Y e t the gold press of this country—especially of the

great cities of the East—have been urging the President to e x ercise every means at his command (and all men know what that
signifies) to accomplish the passage of the bill now under discussion.



It is not the first time the gold press of the great money centers
were guilty of attempted subornation of perjury in urging the
Chief Magistrate of the Republic to violate his oath of office by
inciting him to purchase the votes of those whose convictions
were opposed to his.

During the period of the debate in Con-


gress on the silver-purchase law of 1878 a leading gold standard
journal of the Eastern States, which was in political accord with
the President then in office, said, under date of January 7 of that
The President knows that men can he held true to Republican pledges as
to finance-

It will he remembered that the President of the period was a
if they know that their truth will mean favor as to appointments.

This, as will be perceived, was no vulgar suggestion that the
President should bribe a member of the legislative body.


was, on the very contrary, an incentive to him simply to purchase
the truth.

It is a particularly delectable exemplification of gold-

standard morality—the morality that characterizes W a l l street—
that truth is, not something to be held sacred, as a precious personal possession, dearer than life itself, but something to be
bought by the President when necessary to maintain the gold
standard 1
Another leading Eastern gold-standard paper on the 12th of
February, 1878, during the same discussion, editorially gave the
Republican President a hint as to what he could do.

It said:

The United States Senate has sunk so far below the standard with which it
was formerly associated that the propositions which we yesterday gave as
in circulation at Washington excite little or no surprise. There are Senators who have so little intelligence or principle that they do not know their
own minds in regard to the silver question, or so little conscience that they
are ready to vote Cor or against the pending bill. They imagine that it is
popular. Provided they receive a quid pro quo, however, they are willing to
run the risk of unpopularity. They are ready in short to sell their votes to
the President and aid in defeating the bill. It is hinted that by adopting
this bribery plan the President may not only defeat the Bland bill, but also
may establish amicable relations between his administration and Senators
who are at present inimical.

T h e passage of what is known as the Bland bill by a two-thirds
majority of each House demonstrates that the then President
either did not take advantage of this hint or that if he attempted
to do so the attempt did not succeed.
It will be borne i » mind that this language was not used with
reference to the present occasion, but to an occasion
some fifteen years ago.


Nor do I cite it as having application to

this occasion, but to illustrate how safely republican institutions


may repose on such newspapers as are the obedient servitors of
the banking and creditor classes.

This was not language used

by irresponsible socialistic or reactionary sheets, bent on bringing into contempt such a thing as government of the people by
the people.

It was used by newspapers priding themselves on

their conservatism, that is to say, the conservatism of the banking classes, which does not regard such a trifle as want of fidelity
in a President to a solemn oath of office, or unfaithfulness in a
legislator to his own convictions, so long as thereby the gold
standard of which the bankers and brokers and their clients and
customers are the beneficiaries, ma,v be sustained and perpetuated.

Their motto is, " T h e end justifies the means."

So, also, on the 10th of January, 1878, a leading gold-standard
paper said:
The capital of the country is organized at last, and we shall see whether
Congress will dare to fly in its face.

W e are told the same thing now, Mr. President.

The cham-

bers of commerce, the boards of trade, and the bankers of the
United States, headed by the newspapers of the banking centers,
tell us that they are the people and the people are demanding
certain things to be done.

The capitalists of the country un-

doubtedly, or at least a noisy part of them, are organized in behalf of the measure now under consideration.

But, mark you,

we do not hear of the labor of the country being organized in
its favor.

Is not that a rather ominous fact?


It would be more creditable

for the capital of the country to investigate the great question
pending here before coming to the conclusion to follow the shallow-pated scribblers who are posing as editors and statisticians
and political economists, and whose fortune it is to find ready,
zealous, and numerous believers among the beneficiaries of the
swindle which they denominate the gold standard.

I t appears

that it is the interests of capital that are to be consulted in this
country, not the interests of labor—the interests of the few, not
those of the many.

Is it wise, let me ask, for the capitalists and

their organs, so early in the history of the Republic, to attempt
to separate men into classes?

Is it wise to establish orders which


shall be known as the capitalists and the laborers—which, like
the patricians and plebeians, may reproduce in this age and on
this continent the feuds that periodically convulsed the republics
of antiquity?
W e must not forget that history repeats itself.

T o the thought-

ful student of monetary science it was unnecessary for the goldstandard press to convey the suggestion that the capitalists of
the country were " o r g a n i z e d . "

It was but too palpable already

(to all who understand the subtle effects of the gold standard)
that those who were the beneficiaries of the system would be

I, for one, though my warning will pass unheeded,

suggest to the capitalists of the country that if they expect the
repose which should characterize a just government they might
profitably devote a little of their valuable time to examining and
analyzing the question with which we here are dealing before
petitioning for the passage of this bill.

More reflection and less

noise would better become men who pretend to be thinking
In a free republic the best protection for capital—yes, the only
protection for it—is the hearty content of the laborers.
the bulwark alike of capital and of freedom.

It is

History attests

that the greatest breeder of social and political discontent is

W e are admonished by the census returns that the

debts of the people are enormous.

The attempt to increase

the burden of those debts unjustly will be repelled and punished
by the people.

Any and all political parties that attempt to but-

tress and perpetuate injustice will be swept from power, whatever may be their names, or however great their history.
W e must remember that this is not India, and that the people
of this country are not Hindoos.

No order in council and no or-

der from Downing street will ultimately avail here to add to
the unearned increment which an increasing value in the money
unit exacts from the debtor—a secret, unjust, and clandestine
increment which the gold standard insures to the creditor without the knowledge of the debtor, and to his injury.

Unlike the

people of any other country in the world, the people of this
country are giving thought to their monetary policy.



unless justice be installed, parties will crumble under the righteous indignation of the voters.
W h e n it is said that other civilized peoples have abandoned
silver and gone to the gold standard, I enter a most emphatic
denial of the truth of the statement.

T h e masses of the people—

the producers—of no country have been at any time consulted as
to what should be the material of their money.

These matters

are settled for them by the little coterie of statesmen who believe
themselves born to rule, and who, in so far as they are not abstract theorists, are direct representatives of the creditor classes
and annuitants who are the beneficiaries of the wrong to which
these so-called " statesmen

lend themselves.

Our people will never surrender their sovereign powers into
the hands of any coterie of men. whether so-called statesmen or

This is the fundamental error which the gold-stand-

ard clique have been making in this country.

They think they

have to do with Hindoos or Egyptians, whose habit it is to sit
in silence and upon hearing their doom pronounced accept it not
only without resistance but without remonstrance.
The Constitution, as I have said, made separate and apart the
executive, the legislative, and the judicial functions and offices
of the Government.
of each other.

It made them coordinate and independent

T o suppose that the framers of that great instru-

ment intended that the Executive should have policies of his
own to enforce against the convictions of a majority of the lawmaking branch of the Government would be to imply that those
great men erred in trusting the making of laws to the wisdom
of a large number of men, selected to represent their several localities and States rather than the opinions or caprices of one

If the members of those Houses were to accept the dic-

tum of the Executive, it would have been better to provide that
the will of the Executive should be the law of the land.


W i t h a few honorable exceptions the daily press of the great
banking centers of the country have in this contest, as in all
monetary contests since 1873, pursued like sleuth hounds the advocates of silver money. No language has heen found too violent, no abuse too gross, no epithet too scurrilous, no imputation


too unjust, no falsehood too flagrant, to be applied to the motives
and conduct of those who stand here contending for the rights
of the plain people and against the perpetration of a monstrous

W h o are the persons who thus assail us ?

It is well

known that the brainy men who are employed upon newspapers
have nothing whatever to do with fixing the policy of the paper
on which they are employed.
Many of them are with us heart and soul in this great contest,
but. like soldiers on duty, they obey orders, whether those orders
have or have not the approval of their judgment.

The policies

of great modern newspapers are fixed and directed either by
syndicates of wealthy proprietors, in some instances leading
bankers or stock operators, or by single millionaire proprietors,
who prefer to spend in Europe in an anti-American environment
the money they make while figuring as " e d i t o r s "of newspapers
published thousands of miles from the scene of the editor's lodgings.

Even when the so-called "American." proprietor of some

great city newspaper remains at home and attends to his business, he is well described by Mr. J. W . Keller, the president of
the New Y o r k Press Club, who ought to know whereof


writes, in the number of the New Y o r k Forum for August last,
as follows:
He knows how to buy and sell, whether it be white paper or ink or brains.
The fact that he may not know the first rudiments of the English language,
that sociology and political science are as incomprehensible to him as the
hereafter, does not affect the case at all. He can hire men at so much a week
for all that sort of thing, just as he could hire skilled artisans if he were a
manufacturer of machines, or railroad cars, or jewelry. Editorial writers,
or copy readers, or reporters are so numerous and so cheap that his whole
editorial staff can be changed in a day if he deems it necessary. He despises
the literary accomplishments ot these men, and therefore the men themselves, because he measures all men by their ability to accumulate money,
and can not see advantage in anything not convertible into money
These men may be his superiors in all but money getting, but they are his
docile hirelings. To him the business end of a newspaper is of chief importance, and if he does not attend to that himself he is willing at all times
to pay more for a business manager than for an editor-in-chief. It is a favorite boast of one newspaper proprietor of this stripe that he can hire all
the editors he wants for $10 a week. This, of course, is a slight exaggeration. although the average pay of the writers in his employ does not greatly
exceed that sum; but his theory of journalism that newspapers are made in
the business offices and that the editorial departments are mere adjuncts
for carrying out money-making schemes hatched elsewhere is widely shared.
The domination of the business office over the editorial department is a
development of recent years; a natural consequence of the gradual evolu785

tion of journalism into a purely money-making business. There was a time
when the salaried editor despised the counting-room. His idea of a newspaper embodied a loftiness of aim which could not be affected by any sordid
motive. He held that there were certain reservations on which the business
office should not trespass. An advertisement should appear in the unmistakable form of an advertisement, and in the column set aside for advertisements. Editorial opinions should be above and beyond all considerations
except those of right and justice and the general good. The presentation of
news should be unbiased and uncolored, the single unvarying rule being t o
give th6 facts as nearly as possible.
In short, to borrow the words of a distinguished New York editor, there
should be " n o sailing under false colors." This was the old theory, the high
chivalrous declaration of journalistic principles wrhich the new school of
journalism, the purely business school, is willing enough to accept, even if
it does not always practice it, except in the matter of advertising. In that
the new school has wrought such a revolution that the salaried editor nowT
lends himself cheerfully and even enthusiastically to the attainment of the
one objective point, money getting.
The old school pretended to sell nothing but a certain space allotted to
advertising. The new school can see no reason for such restriction. If it is
right to sell advertising space in one part of the newspaper, that a man may
puff his wares, why not in another? This wholesale barter does not necessarily mean debasement, but it does mean that journalistic traditions are
shattered, and that in the new school the business office is paramount.
Therefore, if a man would be successful to the highest degree in journalism
to-day he must know the business office. Without this knowledge he may
attain success as an employe, but never as an employer. Without it he can
never hope to attain the ownership 01 a newspaper.
Working newspaper men, workers in the literary vineyard, have given too
little heed to this important fact. They have been too long and too thoroughly saturated with contempt for the business office. If the money getter of the journal despises them for their lack of thrift they doubly despise
him for his methods, even when their sustenance depends upon his success.
This has been chiefly because they have had no business training. They are
dependent f r o m the beginning, and their dependence increases with their
years of service.
A well-known editorial writer now in New York once made a contract
with a Boston newspaper owner to occupy the chair of managing editor f o r
five years. His compensation was to be a fixed weekly salary and $5,000 worth
of stock at the termination of the contract. After he had served three years
the proprietor of the newspaper made things so uncomfortable for him that
he offered to leave if $3,000 of stock or its equivalent were given to him.
" Y o u can get out now," said the proprietor, " w i t h o u t any stock or any
equivalent." " But," said he ' ; my contract calls for the stock, and I demand
it." " T a k e your contract to a lawyer," said the proprietor, " a n d let him
see what it is worth."
The proprietor thus becomes a sort of despot at whose feet his vassals sue
for favor, and to influence whom plots and counterplots are made until the
honest, straightforward, guileless man is so sick of such underhand work
that he is all too willing to quit the contest and seek some other field. Hence
it is that the best places are not always held by the best men. The courtier
is often more successful, temporarily at least, than the journalist.

It is not necessary for me, Mr. President, to add to this description, nor to enlarge upon the herculean task which the
masses of the people will always have before them when they


attempt to right any public wrong whose perpetuation appeals
equally to the cupidity and the ignorance of the men described
by the able journalist whom I have quoted.
Fortunately for the liberties of the people of this country, the
men thus described are few.

Their example, however, and the

influence of their journals doubtless affect to a greater or less extent men who have not taken the pains to inform themselves of
the claims of bimetallism from sources friendly to that system.
They have formed their opinions of it from the great metropolitan dailies, which, in view of the location of such papers in
great banking centers, they suppose must have analyzed the

They have been advised thatthe question was one that

concerned only miners of silver.

Thus many earnest minds

among the journalists of the country, in the multiplicity of their
labors and the daily and hourly urgency and pressure of an exacting profession, have not been able to give the subject the time
and thought that it deserves.

It will not always be so.


great body of the press of the country, with the exception of the
great city dailies, which will always be the allies of the banks,
will in time be found ranged on the side of the people.



The recent panic in this country has been ascribed to a great
variety of causes, some of which, with the permission of the Senate, I shall examine.
The New Y o r k W o r l d of August 1,1893, said editorially that
the fright which caused the panic began with the foreign investor.

It is not denied that at the very time that the foreign

investor was so alarmed with reference to the class of money that
he should receive from the United States there was in this country more wealth than ever before in its history.
A r e we to understand that the legislation of this country is to
be in the interest, not of the people of the United States, but of
Is the prosperity of this country to depend upon a lot of idle
fellows who live in some other country, for whom we must provide investment schemes upon which they may make a profit?
W h a t , after all, is it that brings prosperity to a country?



not prosperity present when all the people are at work with
hand and brain?

The real source of wealth is the productive

energy of the people.

The policy that will keep all our people

at work will develop the country without the aid of foreign investors.
The theory of these foreign investors is that in this new country great numbers of our people should be idle in order that the
foreign investors may be able to send their money here for investment.

If, as is constantly asserted, we have enough money

in this country, why do we want more?

And if we have not

enough of our own money, why should we not have enough?
The position of the bimetallists here is that we have not enough,
and that we should have enough of our own.
W i t h proper monetary and industrial policies in this country
everybody would be at work.

W e r e all at work, they would be

engaged on the best ventures we had.

This would be the max-

imum of effort, and from it would result the maximum of wealth, #
prosperity, and national content.
This exploitation of our country with foreign money simply
means that schemes are gotten up here to induce foreigners, who
do not understand all the conditions existing on this side the
ocean, to invest their money in enterprises that are not sufficiently
good to warrant wise men among our own capitalists taking hold
of them.

W h e n sound investments are found here our own

capitalists do hot hesitate to engage in them.
W e r e all our people occupied, a foreign investor, in order to
make a profit on the money he sent in here would be obliged to
send on the same ship with the money a number of foreign workmen upon whose labor the expected profit could be made.


much as the most profitable enterprises would already be absorbed
by our own people, there would be nobody upon whose labor the
foreigner could make a profit unless he sent in men as well as

This would mean the sending to this country of hordes

of the lowest order of foreign contract laborers, unacquainted
with our language and institutions, and not coming here by reason
of the development in them of that aspiration for political freedom
which makes the only sure foundation for citizenship in a selfgoverning republic.


If all our people are usually at work, as is claimed by the goldstandard champions, of what us3 would it be to bring into our
country more money?

In order that such money m i g h t be put

to use pur people would need to be diverted from their accustomed occupations—from those to which their lives have been
dedicated and in which they are prospering.

They would need

to be turned into new and unaccustomed avenues.
would be great economic waste.

In this there

A man is most useful and most

happy when in the vocation for which he has been trained—the
vocation of his choice and of his vouth.
It would be much better for us, instead of anticipating what
this country may require a generation hence, to attempt to build
up communities in reasonable proximity one to another, and
develop those to the utmost of our power, instead of building
railroads prematurely which are to languish for a generation or
more- much better to get all our domestic capital employed and
to maintain our own investments in high efficiency than to invite
hither the money of foreign investors, and thus throw away
much of our prosperity, if not also much of our independence.
W e should not be dependent on foreigners for the money necessary to make exchanges among our own people.
In a work on the Use and Abuse of Money, by a lecturer at
Cambridge University, England. Dr. Cunningham, the apposite
remark is made that foreign investments " do something to break
down the strong nationalism of old daysThere

can be no doubt

of this, judging from the awe with which the New Y o r k bankers, brokers, and newspapers look upon these foreign investors.
They regard the home investor, in comparison, as nobody—as
indeed no investor at all—because his money goes into enterprises that employ labor, while the foreigner employs the stockbroker.

T h e " workingman " whom these people have in view

is he who exhausts himself daily shouting in the pit of the New
Y o r k Stock Exchange.

His " c o m p a t r i o t , " as he may be called,

the " f o r e i g n investor'' of Great Britain, is well characterized
by the same author in the following words:
He m a y be prepared to j o i n in an outcry against the manufacturer w h o
sends improved patterns oi guns t o a rival power, say to Russia. But he
would feel no scruple in lending his capital t o Russia, and thus giving that

rival power the means of purchasing the improved arms.
ference between the cases.

There is no dif-

These gamblers engage in a business for all it is worth, and
they do not care who or what is hurt, whether their own country or any other.
Instead of this foreign money being borrowed to develop, as is
stated, the national resources of the United States, most of it
has been borrowed for the purpose of developing the personal
resources of speculative

adventurers, who have been able to

obtain control of franchises and privileges for enterprises which
anticipated by many years the needs of the people, and on which
these promoters issued bonds for fifty to a hundred per cent more
than the cost of the enterprise.

Of this amount large bonuses

were given to the foreign investor.

Hence almost every cor-

poration is enormously overstocked, and the securities as a
whole upon which the people are paying interest represent two or
three times the money actually invested.
It were much better for our people if the foreign investor kept
his money to himself, or invested it elsewhere than here.


all the purposes of rational and natural development in the United
States, our own investors and men of enterprise would, under
proper conditions, supply all necessary capital.

In such cases

the interest paid upon the investment, besides representing only
the normal cost of the plant, would remain in the country.


present conditions the interest is taken away by the foreign
investor, only to be brought back for investment in some new
speculative scheme, which also anticipates by many years the
natural demands of the community, but upon which the people
are constantly taxed to pay interest—so that they are compounding the interest on these foreign investments.
This course will, if the gold standard be proclaimed here, continue until these foreign investors will have our people as they
have the people of many other countries—in a condition of vassalage.
T h e importance to the United States of the money of the foreign investor is a mere bagatelle in comparison with the importance of a system of money which will maintain justice between
man and man.

The sooner the people of United States learn to


do their own work the better, including the work of supplying
themselves with their own money; to do this as the country needs
it, and in quantities sufficient to maintain all our industries and
keep prices firm.
It is very humiliating for a great country like the United
States to say that it must adapt its financial system to a condition
in which it can borrow money. This country does not need to borrow money.

What would be thought of the owner of a vast and

splendid estate, whose sole and constant aim it was to be always
borrowing money that he did not need?

W o u l d it not be an im-

peachment of his judgment and his common sense?

Imagine a

man rich beyond the dreams of avarice, yet wringing his hands
and crying in despair, " W h a t shall I do if I can not borrow

And borrowing money, too, upon conditions that in a

subtle and unperceived way would eat up his property by reason
of the increasing value of the money unit.
W h e n it is said that if we do not have a gold standard the foreign investors will not buy our bonds and securities, let me inquire what they are going to do with their money?

Do they re-

fuse to buy the securities of any other country or to invest their
money in any other country in which there is to be a profi t made?
Not at all.

They have so plundered their own country that they

can not invest profitably there.

Prices there are falling lower

and lower and driving more and more money out of England for
investment abroad.
W e r e our money national instead of international, and foreigners then wished to invest in our securities they could do so with
perfect freedom, but they would be oliged first to purchase our
money, either with commodities or with the money of their own
country, and with our money buy our securities, a process which
would in nowise inflate our currency.

Then when they wished

to realize on their investments and withdraw, they would have
to sell in our money, and with that money purchase the money
of their own country.
In that way they could not perpetrate an injustice upon every
producer and every debtor in the United States—upon millions
of men who have nothing whatever to do with the investments
of foreigners, but who, whenever money is taken out of our coun785


try to pay for bonds forced upon our marKet by monetary exigencies arising abroad, have to pay a premium upon gold in the
form of a fall in the prices of the products of American labor—a
fall which by bringing the producer to poverty and keeeping him
there works advantage to no human except the few men who
lend money.
It should be enough that the United States furnish to foreigners not only the opportunity to invest their money at rates of
interest higher than they could obtain in their own country,
but also the equal protection of our laws—protection equal to
that afforded to our own citizens—without permitting the foreigners to disturb and disarrange all the business of the country by
inflating the currency when they buy our securities, and contracting it when they sell, thus destroying all the equities in
hundreds of thousands of time contracts—contracts


millions upon millions of dollars—and distorting justice in the
innumerable debts due by and among our own people.
Has the American farmer whose farm is mortgaged, or the
American mechanic who is buying a home on installments, anything to do with these " f o r e i g n investors"? W h y should either
of these be made to suffer by reason of the investments of such
foreigners, either here or elsewhere?

W h e n it is undeniable

that the value of the unit of money depends upon the number of
units, is it wise to permit foreigners at their will to throw, say,
$100,000,000 of money suddenly into our country, thus inflating
our currency and putting up prices, and then, when prices have
gone up, or whenever financial trouble threatens in Europe, to
sell out the American securities, and take away the $100,000,000
as well as the profit on the investment, thus alternately inflating
and contracting our money volume to the great injury of our
W h e n bonds are sent here and gold is taken out by the foreign investor to enable him to meet pressing demands at home,
it is sure to be again sent here when the pressure there is o v e r ,
to be reinvested in the same or similar securities, only to be
again taken away as soon as the necessity arises for its European owners to meet obligations in countries other than the
United States.

Had we a money of our own that was not inter-


national in character we should he able to open up railroads and
to undertake all other enterprises as they were currently needed
for the national progress of our country, and nothing is gained
by undertaking such enterprises prematurely.

No enterprise

should be put upon the market except as it is needed, and with
a national money sufficient in quantity there would always be
enough of it among our own people to enable them to undertake
projects that would pay a fair return to capital.
Had we really to depend upon foreigners it would be a sad
commentary upon our population and our institutions—70,000,000
of people with whom no like number anywhere in the world can
compare for energy, industry, ingenuity, intelligence, and aspiration, and with a form of government adapted to the highest
development of man and without the traditions that tend to
petrify the conditions of the people, as in the civilization of older
The gold newspapers think a clear case is made in favor of the
gold standard when they assert that the panic was caused through
lack of good opinion which foreigners entertained of our country,
because of a fear that we might go to a silver basis. Well, Mr.
President, if we are to legislate for every foreigner who lacks
good opinion of the United States we shall have a good deal to do.
T h e creditor classes of Europe never had any opinion of this
country, its people or its institutions.

They see nothing good

in this country except when they can make a profit by sending
their idle money here.

W h e n they concern themselves at all

about our affairs it is to malign our people and condemn our institutions.
There is, therefore, no reason why we should do injustice to
our own people in order to secure the good opinion which the
" foreign investor " may entertain of us or our country.
[ A t this point the honorable Senator yielded the floor for the

Monday, October 80,1893.

Mr. JONES of Nevada.

Mr. President, everywhere we hear

it echoed and reechoed by the gold-standard press of the banking centers that the people demand the repeal of the purchasing
clause of the so-called Sherman law.

I deny most emphatically

that the people d e m a n d it.

T h e last s t a t e m e n t t h a t w e h a d f r o m

t h e m a s s e s of t h e p e o p l e of b o t h t h e l e a d i n g p o l i t i c a l p a r t i e s w a s
c o n t a i n e d i n t h e p l a t f o r m s of t h e i r n a t i o n a l c o n v e n t i o n s .


o r d e r s of t h e p e o p l e , t h e r e g i v e n i n u n m i s t a k a b l e t e r m s , w e r e
to continue

the use of both metals a s s t a n d a r d m o n e y , a n d i t w a s n o t

e v e n h i n t e d t h a t t h e u s e of e i t h e r w a s t o b e d i s p e n s e d w i t h .



T h e s i l v e r p l a n k of t h e l a s t R e p u b l i c a n n a t i o n a l


r e a d s as f o l l o w s :
The American people, from tradition and interest, favor bimetallism, and
the Republican party demand the use of both gold and silver as standard
money, with restrictions and under such provisions to be determined by
legislation as will secure maintenance of the parity of values of the two
metals, so that the purchasing and the debt-paying power of the dollar,
whether of silver, gold, or paper shall be at all times equal. The interest of
the producers of the country, its farmers and its workingmen, demand that
every dollar, paper or coin, issued by the Government shall be as good as
any other. We commend the wise and patriotic steps already taken by our
Government to secure an international conference to adopt such measures
as will insure a parity of value between gold and silver for use as money
throughout the world.
T h e p a r a g r a p h of t h e D e m o c r a t i c p l a t f o r m w h i c h r e l a t e s t o
s i l v e r is as f o l l o w s :
W e denounce the legislation known as the Sherman act of 1890 as a cowardly makeshift, fraught with possibilities of danger in the future, which
should make all of its supporters as well as its author anxious for its speedy
repeal. W e hold to the use of both gold and silver as the standard money
of the country, and to the coinage of both gold and silver without discriminating against either metal or charge for mintage, but the dollar unit of coinage of both metals must be of equal intrinsic and exchangeable value, or be
adjusted through international agreement, or by such safeguards of legislation as shall insure the maintenance of the parity of the two metals, and the
equal power of every dollar at all times in the market and in payment of
debt; and we demand that all paper currency shall be kept at par with and
redeemable in such coin. W e insist upon thi