View original document

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













HON. J. N. D O L P H
The Senate having under consideration the President's m e s s a g e -

Mr. DOLPH said:
Mr. PRESIDENT: The President of the United States, moved
thereto by the business depression and financial disturbances
every where prevailing, and assuming that the present condition
of the country is the result of the operation of the so-called Sherman law, has convened Congress in extraordinary session and
urged upon it in his message of to-day the immediate repeal
of that law. Whether or not it would be wise under existing
circumstances to repeal this law, the claim or the assumption
that it is the principal cause of the prevailing business and financial condition of the country should not be permitted to go unchallenged.
The present financial and industrial condition of this country
should surprise no one. It hasbeen predicted for years by those
who believe the prosperity of the country can only be maintained by the protection of American industries. The present
condition is the logical result of the success at the Presidential
election of November last of the party which declares that protection of American industries is robbery, and stands pledged
to reverse the policy which for more than thirty years has given
us an era of prosperity such as this or no other country has ever
before enjoyed—a policy which has caused civilization to sweep
across a continent, which has opened mines of the useful metals
and start-id the wheels of new industries in the South, which
has largely transferred the industries abroad once supported by
our people to our own shores to furnish them employment, which
has c-iused the continent to be covered with a network of railroads along whose lines great centers of industry have sprung
up. with great manufacturing establishments giving profitable
employment to millions of American citizens.
Over all this great industrial system hangs a dark cloud of
uncertainty and fear, an impending blow-threatening its destruction. And so the wheels of progress are stopped. The fires are
suffered to go out in furnaces, the machinery of great establishments is idle, and idle men seek employment. The importer
will not import dutiable goods when he fears that soon his competitors can import them free of duty. The manufacturer will
not produce his products in excess of the present demand when


he fears that his surplus product may be compelled to compete
with free foreign products. He will buy raw materials for present needs only while the prospect is before him of soon being*
able to supply himself with raw materials of foreign production
free of duty; and so the importer, the merchant, the manufacturer to avoid disaster curtail their opei'atioris.
The wholesale merchants, the bankers, and all classes of creditors press collections, settlements are forced, and financial
losses, business failures, and bankruptcies are the result. The
Sherman law is not the sole or even the principal cause of the
present financial depression, and its repeal will not cure our
financial and industrial ills. No permanent improvement in the
industrial situation need be expected while the destruction of
the protective system is threatened or feared. No legislation by
which domestic industries will be injured or destroyed, by which
the products of foreign labor will be admitted to free or to greater
competition with domestic products, which will result in transferring domestic industries to foreign countries, and giving labor now performed by American citizens to foreigners, will help
to restore confidence or bring1 business prosperity.
After the Democratic majority in Congress shall have settled
upon a tariff policy, and formulated and enacted its tariff revision, whether such revision shall be general or be destructive
only with a few American industries, such as the wool and tinplate industries, the business of the country will adjust itself to
the changes, and we may enjoy a halting, intermittent prosperity
with lower wages to laborers, but a sound, permanent, prosperity
in this country will not, in my judgment, be again enjoyed until
we are assured of the success of the Republican party and its
control of both Hou : e3 of Congress, and that a policy is to be
adopted andm iint lined by which the industries, the capital, and
the labor of this country are to be preferred to those of foreign
Necessity for the repeal of the Sherman law, if such a necessity exists, has been created by the s ccess of the Democratic
party, the threitof frje tr de •tn«I the predictions by the Democratic press and D^mojr.tic politicians of disaster to follow
from the operation of the Sherman law, made in a systematic effort to secure the repeal of that law at the last session of Congress under a Republican Administration.
There are so many widely differing views upon the silver
question, so many diverse financial plans proposed, so many
erroneous opinions concerning bur coinage laws, our financial
system, and the character and functions of money, that it may
be useful to refer briefly to some of the elementary principles of
political economy which can not ba disregarded by Congress if
it would provide the country with a sound, safe, and honest currency.
Labor employed in the creation of .useful articles is the source
of all wealth. A useful product of labor is a thing of value. It
may be a product of agriculture, for which the farmer plows and
sows and reaps, availing himself of what nature has furnished
him at hand; the fertile soil, the warmth of the suA, the early
and later rains, or it may be the gold and silver for which the
miner patiently delves in the great treasure vaults of nature, or


the more useful products of iron and coal which require the labor
of men to extract them from the earth and fit them for use, or
it may be a coat, a hat, a watch, or a steam engine. All the
things by which we are fed, clothed, and sheltered, which add to
our convenience, comfort, and pleasure are the products of labor.
They are valuable because they are adapted to the use of man.
But one man can not make all the things he needs, or at least he
does not. Hence we have diversity of labor, and one man mines
gold and silver, another cultivates the soil, another raises sheep
and grows wool, another manufactures cloth, another manufactures clothing, and so on.
Now, the man who works the mine or grows wool must have
food and clothing and many other things. If there were no
money or medium of exchange the manufacturer of cloth might
buy wool of the wool-grower and give him cloth in exchange,
but the wool-grower might not need the cloth. t He would need
provisions and clothing. He might take cloth and find a manufacturer of clothing who would exchange clothing for it, and he
might possibly exchange cloth for groceries, and the groceryman might in turn exchange cloth for something that he needed;
but this would be a very tedious and unsatisfactory manner cf
conducting commercial exchanges. Hence the necessity of a
medium of exchange—a tool of exchange—so that when the woolgrower carries his wool to the manufacturer of cloth or to some
middleman and sells it, instead of taking cloth in exchange for
it, he can receive this medium of exchange to the amount of the
value of his wool, and this medium can in turn be exchanged for
any other commodity which he may need.
This medium we call money. If we could conceive of the first
community which invented money assembling together to choose
such a medium we could probably obtain a pretty good idea of
why gold and silver came to be selected. Such a medium should
possess considerable intrinsic value; that is, be capable of being
used for a great many useful purposes. It should be tolerably
scarce, and hard to obtain, so as to be proportionately valuable,
easily transported, and pass currently from hand to hand. It
should be plenty enough, however, to answer the requirements
of commerce, and it should be capable of being easily subdivided and changed in form.
Diamonds would not be selected, because they are not plentiful
enough and could not be divided. Gold seems to possess all the
essential requirements for money, and it is undoubtedly for this
reason that it was selected. Silver partakes in some degree of
the same quality, although it is more abundant and more easily
obtained. Therefore it has been selected and used for money
and made a legal tender for the payment of debts, in some countries for all sums and in others for limited sums only.
Sometimes in the exigencies of commerce the purchaser may
not have this medium of exchange, money, in sufficient quantities to pay for his purchases, and hence he buys on credit.
That is the promise to pay money at a future day. This promise may be a mere verbal promise or even an implied agreement;
in which case it is called a book account, or it may be given in
writing in a form required by commercial law and usage, and
then it is a note, a bond, or a bill of exchange. In either case it


is an obligation to pay money at a future day; it is not money
itself. It may be worth all the money it calls for or it may not
"be. This depends upon the willingness of the promisor to pay,
and his ability to do so, and the power of r,he creditor to force
him to pay.
"When the war of the rebellion broke out it required a great
deal of money to carry it on, and there were many reasons which
rendered it difficult for the Government to obtain money, that
is, gold and silver. In its extremity the United States, to enable
itself to meet its engagements, to pay the soldiers, to furnish
arms, transportation, and supplies, not having gold and silver
enough, issued its promise to pay money in the future. Some
of these were promises to pay certain amounts of money at the
expix*ation of a fixed period with interest semiannually at fixed
rates. These were the Government bonds. Then it issued
Treasury notes or greenbacks of various denominations, so as to
pass from hand to hand as money, which were nothing bat acknowledgments of indebtedness, without any time being fixed
for their payment or any agreement to pay interest. Congress
made these notes legal tender for the payment of private debts.
As the legal tenders possessed no intrinsic value and were
debts payable only at the pleasure of the United Stites, and as
the war progressed portions of the people began to fear that the
South would prevail and that the States remaining in the Union
would be either unwilling or unable to redeem these promises,
they rapidly depreciated in value until they were worth no more
than 35 cents on a dollar; but as the prospects of subduing the
rebellion and maintaining the Union increased they gradually
appreciated in value, and after the war was closed continued to
appreciate until they reached about the value of 90 cents on the
dollar; that is, a dollar in greenbacks was worth 90 cents in g^ld.
Congress after a while passed the resumption act—that is, fixed
a day when the Government would pay its notes in coin if presented to the Secretary of the Treasury, and provided one hundred millions of gold in the vaults of the Treasury to pay them.
But all at once the legal-tender notes became worth their face in
gold and the gold in the Treasury was not needed. The people
preferred to keep the promises of the Government to pay the
money when the Government was ready to redeem them.
The legal tenders and all Treasury notes are evidences of debt
of the Government and possess no intrinsic value. They are
made by law to perform some of the functions of money. They are
made legal tender for the payment of private debts and public
dues, and their value depends entirely upon the provisions made
by law for their redemption in coin—that is to say f upon the fact
that they are convertible into that which has intz*insic value.
W e have several kinds of currency in circulation, performing
the functions or some of the functions of money. There is the
gold coin double eagle, eagles, half eagles, quarter eagles, etc>
These gold coins are legal currency—that is, they have been declared by law to be a legal tender for the payment of private
debts and public dues, but they also possess such intrinsic value
that if you Should melt them up into bullion the bullion would
be just as valuable as the coin. In fact, when they are exported,
the fact that they are coined with the devices provided by our


laws upon them adds nothing to their value; their value depends
entire y upon their weight.
Then we have the silver coin, which is aleo by law made tx
legal tender for the payment of private debts, and is receivable
for public dues. The intrinsic value of the silver dollar, like the
intrinsic value of the gold dollar, is the value of the bullion it
contains, which at present is about 60 cents in gold.
The silver dollar in the payment of debts and public dues is
required by^ law to pass for one hundred cents. Forty cents of
the value of every silver dollar is based upon the credit of the
Government. It is true that the Government has not agreed to
redeem the silver currency in gold upon presentation to the
Treasury, but it has promised to receive it as the equivalent of
gold for public dues, of which we collect about $500,000,000 annually. This is a qualified redemption in gold, and this provision,
with the general expectation that the Government will maintain
this currency upon a parity with gold, has so far kept the silver
dollar at par with the gold dollar.
There are also the gold and silver certificates, which perform
the functions of money. They are receipts for gold and silver
deposited in the Treasury. They are redeemable upon presentation at the Treasury in gold or silver coin as the case may require. They are like wheat' receipts issued by warehousemen,
which call for a given number of bushels of wheat upon presentation, and pass from hand to hand instead of the wheat, until
some holder is ready to present them to the warehouseman and
exchange them for the wheat. *
Any person may take gold not less than $10 in amount to the
Treasury and deposit it and receive a gold certificate, and the
gold is kept in the Treasury, to be returned to the holder of the
receipt when it is presented. The same thing is true of silver
Then there are the legal-tender notes, possessing, as I have
said, no intrinsic value, but redeemable in gold on presentation
to the Treasury. They are, therefore, worth their face in gold.
There are about $346,000,000 of this currency.
We have also another kind of national currency, the Treasury
notes issued under act of J890. They were issued for the purchase of silver bullion at the market price at the time of purchase. The silver bullion is stored in the Treasury vaults theoretically, if not legally, as security for the payment of the notes,
and the law provides that the notes shall be redeemed upon presentation in coin—gold or silver coin—at the option of the Secretary of the Treasury. The gold coin and the gold certificates
constitute an absolutely safe currency, for the coin is intrinsically worth its face, and the certificates can be exchanged for gold
upon presentation at the Treasury.
The legal-tender notes are equally safe, for they aro redeemable upon presentation at the Treasury in gold. A hundred
millions of dollars in gold is kept in the Treasury as a reserve
for the payment of these notes, and the Secretary of the Treasury is authorized to sell bonds for gold, if necessary, for their
redemption. The silver coin and silver certificates and Treas*
ury notes stand on a different footing. The intrinsic value of
the silver coin in gold, as I have said, is about 60 cents on the


dollar. The silver certificates are redeemable in silver. The
Treasury notes may be paid in silver coin. There is no provision of law for redeeming this silver coin and currency in gold,
except the provision for the receipt of it as the equivalent of
gold in payment of public dues.
If Congress should repeal the law requiring silver coin and
silver currency to be received for public dues, the value of the
silver coin, the silver certificate, and tbe Treasury notes would
at once depreciate until they Would be worth no mor$ on the dollar than the value of the silver bullion in a silver dollar. To
repeat, the gold and silver coin possess intrinsic value. The
gold coin is intrinsically worth its face; the silver coins are intrinsically worth about 60 per cent of their face. The gold certificates and the silver certificates are the obligations of the Government. and are valuable because they are convertible on demand
into gold and silver. The legal-tender and Treasury notes are
evidences of debt of the Government, but possess no intrinsic
value and are valuable only because the legal-tender notes can
be converted into gold upon presentation to the Treasury, and
the Treasury notes can be converted into coin, gold or silver
coin, at the option of the Treasury, upon presentation for payment.
While silver and gold possess intrinsic value, and for that
reason, in part, are adapted to use as money, it must not be supposed they have a fixed relative value; that is to say, that a certain amount of silver is always worth a certain amount of gold.
Considered as bullion, they are but products of labor, just as whe it,
potatoes,cotton, and wool are products of labor, and it would be
no more absurd to suppose that the relative valuo betwe :n potatoes and wheat, or cotton and wool is fixed, so that 2 or 4 bushels
of potatoes are always equal in value to the value of a bushel of
wheat, or that 5 pounds of cotton is always equal in value to a
pound of wool, than to suppose that a given number of ounces of
silver, say 16 or 20, is always equal in value to an ounce of gold.
The value of each metal, like the value of every other product
of human labor, is fixed by the supply and the demand. This
is the reason why the use of the two metals as money under free
coinage of both is impossible without the concurrent use of the
two metals as money > at an agreed ratio, by a sufficient number
of commercial nations to maintain the ratio of their intrinsic
value at the legal ratio agreed upon.
Some persons who demand free coinage of silver in the United
States at the ratio of 16 to 1 appear to believe that gold and
silver have naturally a fixed value relatively one to the other,
and that the United States adopted that natural relative value
by the coinage acts of 1834 and 1837. The relative intrinsic
value of the two metals, as I have said, is fixed by the universal
and imperative law which fixes the price of every product of
human industry in the world's market.
The value of silver as compared with gold has been, with the
exception of a comparatively brief period, constantly fluctuating
sinfee authentic history began. Five hundred years before the
Christian era an ounce of gold was worth 13 ounces of silver.
At the beginning of the Christian era an ounce of gold was worth
9 ounces of silver. Three hundred and fifty years later it reCl

quired 15 ounces of silver to buy 1 ounce of gold. Two hundred
and fifty years later still an ounce of gold was worth 18 ounces
of silver. About the close of the fifteenth cantury the ratio was
about 1 to 10; by 1688 the value of gold had again increased until
an ounce of gold was worth 16 ounces of silver. For nearly two
centuries this ratio was substantially maintained by the use of
both metals as money by the principal commercial countries of
Europe. When silver was demonetized by Germany and its
coinage suspended by France and the Latin Unioji this ratio was
no longer maintained, and the relative value of silver to gold
lias since greatly fallen and has been constantly fluctuating.
Until an international agreement can be secured between the
principal comm?rcial countries of the world for the free coinage
of silver at an agreed ratio so that the intrinsic value of the silver
product of the world as measured in gold can be maintained at
the legal ratio agreed upon, each nation must determine for itself whether it will have a gold or a silver standard. A double
standard is impossible. The two metals will not circulate together unless the parity of their value can be maintained. Today the following foreign countries have the silver standard:
India, China, Mexico, Japan, and most of the Central and South
American States. The following have gold standards: Brazil,
British possessions in North America, Denmark, Egypt, Finland, German Empire, Great Britain, Liberia, Norway, Portugal,
Sweden, Turkey. The following hav6 legally a gold and silver
standard, but in facta gold standard. They have no free coinage
of silver, and silver coin is maintained in domestic circulation
on a parity with gold by some provision for its redemption in
gold or by its receipt for public dues: Argentine Republic, Belgium, Chile, Cuba, France, Greece, Haiti, Italy, Netherlands,
Spain, and Switzerland. Those people who propose free coinage
for the United States propose that we shall change our measure
of value from gold to silver and join India, Mexico, China, and
other countries having a silver standard, and that silver shall be
the basis upon which all the transactions in this country shall be
Our own experience is sufficient to show that it is impossible
under free coinage to maintain in circulation both gold and silver when either is undervalued by the legal ratio. The coinage
law of 1792 established the ratio of 1 to 16 between gold and silver." The intention of Congress was to adopt the commercial
ratio between the two metals in the markets of the world. But
gold was undervalued and could not be kept in the country, and
its place was supplied with Spanish milled dollars and small,
abraded silver coins. The ratio of France being at the same
time 1 to 15i, France took all our gold under a law that is universal and inevitable. To secure the ret3ntion and circulation
of gold in this country the acts of 1834 and 1837 were passed.
The ratio under those laws was 1 to 16. Gold was overvalued
and silver left the country under the operation of the same law.
To enable us to retain in this country silver subsidiary coins the
act of 1853 was passed, reducing the amount of silver in half dollars and oth ^r fractions of a dollar, discontinuing free coinage
of subsidiary coin and providing for its coinage by the Governe 1


ment from silver purchased by it, upon which it received the
Doss anyone suppose for a moment that when Congress established a mint and fixed a ratio between gold and silver at 15 to 1
on the advice of Hamilton, or when in 1834 the ratio of 16 to 1
was adopted for silver and gold, if silver and gold had been of
the value relatively to each other they are to-day the ratio of 15
to 1 or 16 to 1 would have been adopted? It is familiar history
that Hamilton endeavored to adopt as the legal ratio the then
commercial ratio between the two metals in the markets of the
world, and that Congress in 1834 designed to make the ratio such
that gold would remain in this country, whether under it we
could keep silver or not.
Some persons have proposed that a new legal ratio between
gold and silver should be established by law, say a ratio of 20 to
1, and the mints be opened for the free coinage of silver at this
ratio; but this proposition is impracticable, would surely give us
a silver standard and drive gold out of circulation, would not increase the price of silver bullion or benefit silver producers, and
would be no better for the country than free coinage at the present legal ratio. If we are to abandon gold as the standard, and
to adopt the silver standard, it is not material whether a silver
dollar is worth 50 per cent or 90 per cent of the gold dollar. If
we could maintain in the world's markets the actual commercial
and intrinsic ratio of value between gold and silver at some legal
ratio we could adopt, then the question would be solved; but we
can not.
This can only be done by the united action of the principal
commercial nations of the world. If we should adopt by law a
legal ratio, which at the time was the same as the commercial
ratio of value of the two metals, before a dollar could be coined
under it, silver, which fluctuates every day in price, might fall
until the legal ratio and the ratio of the intrinsic value of the
two metals would be? widely different; and under free coinage
at the ratio adopted only one metal would be coined or remain
in circulation. Such a proposition shows a failure upon the
part of those who make it to comprehend the first principles of
the silver question.
Others have advocated free coinage of both gold and silver
without an attempt to make the silver dollar the equivalent of
the gold dollar, but letting the intrinsic value of gold and silver
fix the current money value of gold and silver coin; in o&ier
words, that we should have two standards, a gold standard and
a silver standard; but this is impracticable. In such a case one
or the other of the two metals would have to be measured by the
other, or we would require a third standard to measure them
Gold being the standard of value of all the great commercial
countries, and the medium in which public dues must be paid
and foreign debts settled, the silver coin under such circumstances
would be but a commodity in foreign countries. Gold would disappear, and the depreciated silver currency be our standard of
value, and the measure of commercial transactions or our exchanges conducted on the silver standard would be mere barter.
We hear occasionally such .nonsense as that the Creator inCI


tended by providing both gold and silver that they should both
be used as money, and that gold *;nd silver are the monsy of the
Constitution. The ratio of value between gold and silver, as I
h>ive shown, has been in all times subject to great fluctuations.
There is nothing in the Constitution about the use of both gold
and silver as money, or concerning the ratio to be maintained
between them. The truth is that under free coinage both gold
and silver could not be maintained in circulation or both used as
money in any civilized country without a stable ratio between
the intrinsic or market value of gold and silver bullion.
While gold and silver both possess qualities which render
them peculiarly fitted for use as money, their natural value as a
tool of commerce is their intrinsic value, and when either metal,
as is the case in the United States with silver to-day, is made by
a provision for its exchange, for the other to possess a value in
excess of its intrinsic value, this value is imparted to it because
it can be converted into something more valuable than it is.
The Government stamp can not create good money. All
money must possess intrinsic value or be convertible into that
which has intrinsic value. I have reTerred on another occasion
and in another place to the interesting fact that after the discovery of gold on the Pacific coast gold dust was largely used as
a medium of exchange, and that before the establishment of the
branch mint an San Francisco private parties manufactured gold
coins of the weight and fineness 6f the United States gold coins,
and in subdivisions as low as 25 cents. They were not made in
imitation of the United States coin and were not legal tender,
but they were worth as much, and passed as currently everywhere, as the gold coins of the United States. There probably
was not a c^se in all the history of California where any creditor refused to receive them in payment of debt. When it was
needed private enterprises supplied for the public use a more
convenient medium of exchange than gold dust.
When the branch mint was established the Government did
that for the public con venienc3 which private parties before had
done. This incident shows that while the stamp of the Government, and legal-tender enactments are necessary to make legaltender money, it requires neither the Government stamp nor
statutes to make a convenient medium of exchange when that
medium possesses the necessary intrinsic value, while, on the
other hand, the depreciation of the legal-tender notes during
the war shows that neither the Government st imp nor legislative enactments making a currency legal tender canalwaysmake
good money. Neither the Government stamp nor their legaltender qualities gave the learal-tender notes the value they did
possess as a medium of exchange, but this was imparted to them
by the promise of the Government to redeem them in money,
and when the day of payment was fixed and provision was made
for their payment they became good for their face, because they
were convertible into gold at par.
If private parties were to coin silver bullion into coin of the
weight and fineness of the standard silver dollars such coin
would be worth no more than its market value as bullion and
would not circulate any where as a medium of exchange.
The silver rupee of India, the Mexican dollar, and the silver


ccins of China, and of every other country having- free coinage
of silver, are worth no more even in the countries where they
are coined than the value of the silver they contain. The reason
that the standard silver dollar of the United States is worth 100
cents in the United States and even in Mexico, although it contains less silver than the Mexican dollar, is because the Unitsd
States has put the standard silver dollar into circulation, virtually saying this coin, though intrinsically worth only what the
silver it contains is worth as bullion in the markets of the world,
is issued upon the pledge of the Government that it shall be accepted as the equivalent of a gold dollar in payment of all Government dues.
If Congress were to provide that all public dues should be
paid in gold, and substitute no provision for the redemption of
silver currency in gold, the standard silver dollar would become
immediately worth less in the United States and everywhere
than the Mexican silver dollar.
By the free coinage of silver it is proposed that anyone shall
be permitted to take to the mints of the United States 37If
grains of pure silver, now worth, say, 60 cents, and receive for it
a standard silver dollar, which is to be a legal tender in payment for private debts at its face .and receivable as the equivalent of a gold dollar for public dues, or, as provided in the Stewart bill of last Congress, which passed the Senat3, receive for
his 60 cents' worth of silver bullion a Treasury note which is a
legal tender in payment of private debts and receivable in
payment of public dues at its face. The whole object of the
Stewart bill was to make the Government the purchaser of all
silver bullion offered at the mints at the rate of 100 dents for 60
cents' worth of bullion.
If there are now premonitions of the depreciation of the silver
dolltr when it is coined only by the Government, and its coinage
is limited, and its cost to the Government is only its intrinsic
value, what would happen if the mints were thrown open for the
coinage of silver on private account and private parties presenting the bullion to the mints were to receive a profit equal to the
difference between the value of the bullion offered and the face
value of the coin or Treasury notes received in exchange for it
and the Government were to lose an amount equal to the profit
of individuals?
It seems impossible that anyone should suppose for a moment
that the silver dollar or Treasury notes received in exchange for
silver bullion under such a law could be maintained equal to a gold
dollar. It could not be. Before the first dollar under a free
coinage law could be coined, the silver dollar could be worth no
more than the value of the bullion it contained.
The merits or demerits of any measure for the use of silver as
money to day must be determined by existing conditions. The
question whether previous financial legislation has been wise or
unwise is immaterial. The ratio of the value of silver to gold
to-day, and not the ratio in 1873, is the important matter for
consideration. Since 1873 silver has depreciated in value about
40 per cent. The product of silver increased from 63,000,000
o u n c a s in 1873 to 140,000,000 ounces in 1891. The coinage of silver has been discontinued for mjiny years by the principal counCi


tries of Europe. Many persons believe that with free coinage
of silver we would be flooded with the world's silver.
The stock of full legal-tender silver coin in the principal
countries of Europe approximates $1,100,000,000, of which $4:^0,000,000 are stored in the vaults of five banks, and could be
thrown upon our markets without delay. I have never feared
that free coinage of silver in the United States would cause the
world's silver to be dumped upon us, because I have never be^
lieved that with free* coinage the silver dollar would possess any
greater value than the bullion it contained.
Of course, if under free coinage the silver dollar could be
maintained the equivalent in value of a gold dollar we would
speedily get all the silver of the world, and citizens of the United
States and subjects of foreign countries and foreign governments
themselves would undoubtedly avail themselves of the privilege
of presenting at our mints 60 cents' worth of silver, receiving for
it a legal-tender note, and converting that note into gold. The
United States would become the purchaser of all the silver in
the world—bullion, coin, and old silverware—paying a dollar in
gold for 60 cents' worth.
But it is absurd to suppose that if everyone was permitted to
carry silver bullion to the mints to be coined there would be any
alchemy in the process that would double the value of silver bullion. It is as absolutely certain as anything can be that under
free coinage the value of the silver dollar would depreciate until it was worth no more as money than the value of the bullion
contained in it. As soon as this occurred, the profits to silver
owners in exchanging silver bullion for silver coin would xe >se
and there would be no longer any inducement to take silver bullion to the mint to be coined. Silver, like every product of human labor, would be sold in the markets for what it would bring
for use in the arts or for money.
The amount of silver coined under free coinage would be variable, and would depend upon a variety of circumstances. But
little over eight million silver dollars were coined from the establishment of the mint until 1873, and it is not likely any great
amount would now be coined under free coinage. With frae
coinage of silver, silver would be the standard for all our business transactions. Our $700,000,000 of gold would be withdrawn
from circulation; the circulating medium would be greatly contracted, and the products of industry greatly diminished. Free
coinage would not increase the price in gold of any commodity.
The price of every thing we ^import would still necessarily be
paid in gold. If more silver dollars were received by the producer for his products, more silver dollars would be required to
purchase everything which he consumes.
For instance, if the farmer should receive $1 in silver for a
bushel of wheat, that silver dollar would go no further than 60
cents in gold or so much gold as in the world's markets would
buy a silver dollar. The value of property measure^ in silver
would be at once advanced to offset the depreciation in the standard of value. The last thing to be advanced would be the price
of labor. Although the price of every thing consumed by the
laborer would be nearly doubled in value, it would be along time,
and after many a struggle, before the laborer would succeed in



getting two silver dollars in lieu of the one gold dollar he now
receives for his labor.
Ail producers and laborers would lose by th3 change in our
st mdard of value, and .only bankers, brokers, money changers,
and middlemen would profit by it. All s ilaries and pensions
would be paid in silver and ail appropriations of the Government expended in silver. The distarbance of our financial condition which would result from adopting a silver standard would
produce great financial stringency, force the immediate collection of debts, increase the rate of interest, demoralize business,
throw labor out of employment, impair the credit of the Government, bring home for collection our State, municipal, and corporation bonds held abroad, impair confidence, bring upon us
ruin and bmkruptcy.
If existing debts were paid in depreciated silver it would be
robbing the creditor, because they have all been contracted with
reference to the present standard, and 95 per cent of them since
.the great depreciation in silver.
India, one of the countries until recently having free coinage
of silver or coining silver on private account, has hitherto been
a great consumer of silver bullion for ornaments and coinage,
and ha3 been pointsd, to by the advocates yof free coinage as an
examp:e of prosperity with free coinage of silver. The amount
coined has been large, but not uniform, some years being a hundred per cent more thin others. The following table shows the
amount, expressed in dollars, of silver annually minted during
the period of sixteen years, and shows the consumption of silver
in India for coin:


1 73

187 7
187 9
188 1
188 3

.. 12,410.636


4), 00-. 173
24, 927,400'

188 5
188 6

$48,48r, 114
-36.297, J32

Total 17 years
Annual a v e r a g e . . .


The amount coined in 1890 is estimated at $30,000,000. The
silver rupee of India contains 186 grains of pure silver; the half,
quarter, and eighth rupees are of corresponding weights. The
coinage of both metals until the recent action of the India government was practically free, provided the amount presented
was equal to 50 tolos of gold or a thous And tolos in silver. There
was a duty of 1 per cent upon all gold and silver brought to the
mints. Gold was not coined in any considerable amount, and
the business of the country was conducted upon a silver standard. The stoppage of the coinage of silver on private account
in India is not an abandonment of the silver standard. Silver
is still the standard, and will continue to bi whether the government coins silver on its own account or not.
It is said this action of the government of India is intended to
have the effect to prevent the further decline of the value of the
rupee, but upon what this expectation is based is not stated.
The value of the rupee will be fixed hereafter, as heretofore, by
its value as silver bullion in the London market. It will still be
meisured in all London and in all foreign transactions by gold,
and the discontinuance of free coinage by throwing the silver


bullion heretofore coined in India on private account on the
world's markets has depreciated, and will continue to depreciate,
the intrinsic value of the
The claim sometimes made that silver has not fallen in value
in India, and that the silver rupee in the interior of India will
purchase as much wheat or as much of tho other products of
labor is absurd; it is incredible. The price of wheat in London
is fixed in gold by the world's supply and demand. It is impossible that there could be to the exporter of wheat from India a
profit equal to the fall in the price of silver since 1873. Such a
state of things could not exist ten days in any country under the
sun. Competition among English wheat-buyers would speedily
raise the price of wheat in India to an approximation of its gold
price in; London.
I am informed that the price of wheat is fixed in the export
cities of India by the price in London and the cost of transportation, insurance, etc. The statement is undoubtedly an invention intended to make farmers believe that in some way the
price of their commodities is affected by the depression of silver.
Not every country "vyhich uses silver as money has a silver
standard. In the United States we have about $500,000,000 of
silver currency, but our standard is gold, and the difference between our gold and the intrinsic value of our silver currency
rests upon the obligation of the Government to redeem it in
England, although having a gold standard since 1816, hasaboat
$100,000,000 of silver, subsidi ry coin, used in small transactions.
France has $700,000,000 of silver and $900,000,000 of gold, but has
a gold standard, and her silver passes at par upon the faith of its
redemption, and an actual redemption in gold, and this is the
case in every country which maintains in circulation silver upon
a parity with gold. In all these countries silver is redeemable
in some manner in gold: free coinage of silver has been discontinued, and the stock of silver is not increased. On the contrary,
in every country where there is free coin ige of silver the purchasing power, of silver coin is precisely the market value of the
bullion it contains.
Mr. PEFFER. Will the Senator from Oregon allow me to interrupt him?
Mr. DOLPH. For a question.
Mr. PEFFER. I do not wish to interrupt1 the Senator, but
in view of the fact that I have received soma inquiries from
friends in different parts of the country, I wish to ask the Senator whether he understands that the Goverhmant of the United
St -tea, represented by the Secretary of the Treasury, has been
in the habit of redeeming silver dollars with gold?
Mr. DOLPH. Not on their presentation to the Treasury, but
they are never refused and can not ba refused when they are paid
eitlier for internal-revenue taxes or duties at the custom-house,
and that, as I said, is a qualified redemption of them in gold. It
is a redemption to the extent of $500,000,000 annually in gold.
Mr. HOAR. The Senator is not discussing the act of 1890?
Mr. DOLPH. No, I am not discussing the act of 3890; that
deals with the redemption of Treasury notes; that is another
matter, to which I shall come directly.
Mr. PEFFER. Does the Senator understand that I have a


right to take a silver dollar to .the Treasury of the United States
and ask a gold dollar for it?
Mr. DOLPH. No, you have not the right to do that; but if
you had internal-revenue taxes to pay or if you were an importer
and hsd to pay duties you could pay them in silver dollars, in
silver certificates, or other silver currency. As I said, before,
that is a qualified redemption of the silver currency in gold, and
that is the provision of law to day which, in my judgment, together with the expectation of the people of this country'that
the parity will be maintained between the silver dollar and the
gold dollar, and that if the present provisions are not sufficient
for that purposa other provisions will be made for it, that keeps
the silver dollar and the gold dollar at a parity.
Mr. HOAR. I am sorry to interrupt my friend, but I should
like to put a question for my own information. Does not the
Senator from Oregon understand that if the maintenance of
the parity required the exchange of silver for gold whenever it
was presented for that purpose to the Treasury, the obligation
of the act of 1890 would rest upon the Treasury to do it? That
would be necessary, as I understand it.
Mr. DOLPH. I do not understand that there is anything in
the act of 1890 that requires the Treasurer of the United States
to receive standard silver dollars or silver certificates in exchange for gold, nor do I believe that under the act of 1S90 the
Treasurer had any right- to redeem Treasury notes with gold
from the gold reserve in the Treasury. I think that his option
was gone when the free gold in the Treasury was exhausted.
There is persistent and gross misrepresentation concerning
the manner in which the act of 1873 discontinuing the free coinage of the silver dollar was enacted. The recent article by exS^cret *rv Boutwell in the Boston Herald giving the facts concerning iha manner in which the law of 1873 was passed should
set the question at rest, but it will not. I quote the following
from ex-Secretary Boutwell's article:
The act k n o w n as the act f o r the demonetization of silver was passed in
1873, and upon a distinct recommendation made in m y annual report to Congress in December, 1872. The statement B often made and so generally ReO
lieved. that the provision w a s introduced and passed surreptitiously, w a s
w i t h o u t a n y foundation, as will appear f r o m quotations f r o m m y report,
which I shall incorporate in this article.
The c o i m t r y had due and full notice of the p o l i c y proposed, and, if the
friends*of a silver currency were Ignorant of the m o v e m e n t , the fault w a s
their own. N o t o n l y was there no concealment, but, o n the other hand, the
change proposed was announced early and definitely. F o r myself, I can s a y
that I never hesitated to a v o w the authorship of the measure, and I have
been ready always t o assign the reasons by which I w a s influenced.
I n 1860 the American silver dollar was m o r e valuable than the gold?dollar,
according t o the statute r a t i o between the metals, in the s u m of about 4
cents. F r o m that time onward the difference in f a v o r of silver diminished
gradually, and in 1&72 the difference had disappeared.
At that time the power drill had been invented and its value established.
T h e use of dynamite was well understood, and the number and richness of
the silver mines in t he R o c k y Mountains justified the conclusion that silver
w o u l d deteriorate in value w i t h each succeeding year.
On thig theory of the then future m y p o l i c y was based. W e were then o n
a gold basis as far as the use of the metals had a part in our v flnancial affairs;
w e were a principal producer of gold, and the most important steps had t e ? n
taken in the w o r k of bringing the Treasury note t o the standard of gold
In the s a m e report I advised the coinage of a silver dollar, k n o w n as the
trade dollar, in value superior t o t h e Mexican dollar, w h i c h was then in use
almost exclusively in the c o m m e r c e of China and the East Indies. T h i s


coin, which w a s not current in the United States, became the means of a
very considerable export of silver to the East.
These t w o measures were designed to maintain a gold basis, in competition with England, our principal rival, and to substitute American silver for
Mexican silver in our dealings with the countries using that metal. As evidence of the facts alleged, I introduce the following extracts f r o m m y report
of 1872:
In the last ten years the commercial value of silver has depreciated about
3 per cent as compared with gold, and its use as currency has been discontinued by Germany and some other countries. The financial condition of
the United States has prevented the use of silver as currency for m o r e
than ten years, and I a m of o p i n i o n that upon grounds of public policy
n o attempt should be made t o introduce it, but that the coinage should be
limited to commercial purposes, and designed exclusively f o r c o m m e r c i a l
uses with other nations.
" T h e intrinsic value of a metallic currency should correspond to its c o m mercial value, o r metal should be used o n l y f o r the coinage of tokens redeemable by the Government at their nominal value. As the depreciation
of silver is likely t o continue, it is impossible t o issue coin redeemable in
gold without ultimate loss t o the G o v e r n m e n t ; for, when the difference becomes considerable, holders will present the silver f o r redemption, and
leave it in the hands of the Government to be disposed of subsequently at a
loss. If the policy should be adopted of issuing silver coin irredeemable,
but whose intrinsic and nominal value should correspond to gold, the time
must c o m e when the country would suffer f r o m the presence of a depreciated silver currency, not redeemable by the Government n o r current in the
channels of trade.
"Therefore* in renewing the recommendations heretofore made f o r the
passage of the mint bill, 1 suggest such alterations as will prohibit the coinage of silver f o r circulation in this country, but that authority be given for
the coinage of a silver dollar that shall be as valuable as the Mexican dollar
and to be furnished at its actual cost. The Mexican dollar i s used generally
in trade with China, and is n o w sold at a p r e m i u m of about 8 per cent o v e r
the aetual expense of coining. As the production of silver is rapidly increasing^such a coinage will at once furnish a market f o r the r a w material
and facilitate c o m m e r c e between the United States and China."

In a speech made by me before the Massachusetts Republican
Club in Boston some time ago, in discussing this matter, I said:

There has been m u c h misrepresentation about the manner in which the
act of 1873 w a s passed, and, although the statement that the act was clandestinely passed has been m a n y times disproved, it is constantly reiterated
by the advocates of free coinage. The truth is that in the official statement
which accompanied the bill by which free coinage of the silver dollar was
discontinued when it was transmitted f r o m the Treasury Department t o Congress, attention was called t o the fact that b y the bill the coinage of the silver dollar w a s t o be discontinued. That fact was also stated m o r e than one©
o n the floor of both the Senate and the House.
The bill was many times printed. It was pending in m o r e than one Congress apd received careful scrutiny by committees of both' Houses of Congress; it was then a matter of indifference to Congress and t o the c o u n t r y
whether the provision f o r the free coinage of silver dollars w a s continued o r
not. Silver had been undervalued since the laws of 1834 and 1837 were passed.
Silver dollars could not be kept in the country. A s I have said, only a little
over eight millions of silver dollars had been coined at our m i n t s in all o u r
If the l a w of 1873 had n o t been passed w h e n F r a n c e and the Latin U n i o n
discontinued silver coinage, this c o u n t r y would have been compelled to have
done the same, o r to have g o n e to the sil ver standard, if the act of 1873 had
n o t been passed, n o silver dollars would have been coined between 1873 and
1878, or, if coined, they would have left t h e country as bullion. If the act of
1873 had not been passed after silver w a s demonetized by Germany and its
coinage discontinued b y F r a n c e and t h e Latin Union, our gold would have
disappeared and the silver of the world would have begun t o c o m e to us.
The results which w o u l d have f o l l o w e d the continuance of free coinage of
silver in this country at the legal r a t i o would have been disastrous in tht
extreme. It w o u l d have made silver the currency and the*silver dollaT at
its intrinsic value the measure of all values in this country. The o n l y
standards with which o u r financial s t a n d i n g under such a condition can be
compared are those of India, China, M e x i c o , and other countries having a
silver basis. W i t h o u r m i n t s o p e n t o free coinage of silver when the price
of 371£ grains of pure silver fell below SI In g o l d of our coinage, silver w o u l d
have been o u r only metallic currency in circulation and the basis of all
c o m m e r c i a l transactions.


Gold would have ceased t o circulate, as it has in other countries under
similar circumstances, and the purchasing p o w e r of our currency and the
price of all o u r products of human industry would have fluctuated ay the
price of silver bullion rose and fell in the w o r l d ' s markets. The credit of
the Government would have been impaired. F o r e i g n capital would have
been permanently withdrawn f r o m the country, our f o r e i g n trade demoralized, o u r prosperity destroyed, and the development of our great resources
stopped. But under the financial policy adopted and pursued by the Government the national credit has g r o w n stronger and stronger until it is
better than ever before in o u r history, and better t h a n that of any o t h e r
nation of the world.
Our once depreciated paper currency, o n a c c o u n t of o u r wise financial
policy, is to-day preferred f o r all c o m m o n transactions in this country and
passes current in other countries. Our national debt has been refunded at
greatly reduced rates of interest, and has been rapidly paid off. Our bonds
are at a premium, our public debt is decreasing, the rate of interest on G o v ernment securities is continually g r o w i n g less, all of which p r o v e the wisd o m of the policy we adopted. The great development of our resources, the
rapid increase of our wealtn, and our long-continued prosperity attest the
w i s d o m of maintaining the public credit.
Our mines have been opened, o u r forests cleared, our vast public d o m a i n s
settled, railroads constructed, great manufacturing industries established,
e m p l o y m e n t provided f o r labor, national and individual prosperity promoted, and the nation made rich. In m y j u d g m e n t free coinage of silver
would not o n l y provide a depreciated standard as the measure of value of
all commodities, but would demoralize business, contract the circulating
medium, and g i v e j i s a currency which would fluctuate in value as the price
of silver bullion rose and fell, destroy o u r prosperity, and bring u p o n u s
disaster and ruin.

The operaton of the Bland act and the Sherman law was recently stated in an authorized interview with Secretary Carlisle.
He said:
The operations of the United States Mint commenced in 1792, and f r o m
that time to 1873. a period of eighty-one years, the total amount of silver dollars coined w a s $8,045,838. In 1873 the coinage was stopped by act of Congress,
but in 1878 it was resumed under the so-called Bland-Allison act, b y the
terms of w h i c h the Secretary of the Treasury was directed t o purchase and
coin into standard silver dollars of 412J grains each, n o t less than $2,000,000
w o r t h n o r m o r e than $4,000,000 w o r t h of silver bullion each month, and between the date of the act and the 14th of July, 1890, a period of twelve years,
there was coined $378,166,793.
In addition t o this there has been coined f r o m trade dollars $5,088,472. and
f r o m the seigniorage of bullion purchased and coined under the act July 14,
1890, the s u m of $6,641,109, m a k i n g in the aggregate $389,886,374 in full legaltender silver m o n e y issued b y the Government since 1878. Of this a m o u u t
only $58,016,000 was in actual circulation on the first day of the present month,
the remainder being held in the Treasury as part of the assets of the Government, o r being represented by outstanding certificates.
The act of July 14.1890, requires the Secretary of the Treasury to purchase
4,500,000 fine ounces of silver bullion each month, and it provided that he
should continue the coinage of silver dollars, at the rate of $2,000,000 per
month, till the 1st day of July, 1891, and under this act there has been coined
$29,408,461, which Snakes a total coinage of silver dollars under all acts since
1878/ $419,29-4,835, o r m o r e than fifty times as m u c h as was coined during a
previous period of eighty-one years. In addition t o the silver bullion purchased by the Government since 1878 and coined as above stated, the Secretary of the Treasury h a s purchased under the act of July 14,1890, and n o w
holds in the vaults of the Treasury uncoined, 124,292,532 fine ounces of silver
bullion, which cost the people of the United States $114,229,920, and is w o r t h
to-day at the market price of silver $103,411,386, thus s h o w i n g a loss of
B y the terms of the act the Secretary w a s required to p a y f o r all silver
bullion purchased b y the issue of n e w United States Treasury notes, payable in coin, and it provided that u p o n demand of the holder of any such n o t e s
they should be^redeemable in g o l d o r silver coin, at the discretion of the Secretary, It being in the language of the act the established policy of the United
States to maintain the t w o metals o n a parity with each other u p o n the
present legal ratio, o r such r a t i o as m a y be provided by law. In the execution of this policy of Congress it is the duty of the Secretary w h e n the necessity arises t o exercise all the p o w e r s conferred upon him by law in order t o
keep the Government in a condition to redeem its obligations in such c o i n
as m a y be demanded, and t o prevent t h e depreciation of either as c o m p a r e d
w i t h the other.


The records of the Treasury Department s h o w that during the eleven
m o n t h s beginning May 31,1892, and ending May 1, 1893, the coin Treasury
notes issued f o r the purchase of silver bullion under the act of July 14, 1890,
amounted t o 149,861,184, and that during the s a m e period the amount of such
notes paid in gold was $47,745,173. It thus appears that all silver bullion
purchased during that time, except $2,216,011 worth, was paid for in gold,
while the bullion itself is stored in the vaults of the Treasury, and c a n
neither be sold n o r used f o r the payment of any kind of obligation. H o w
long the Government shall thus be compelled t o purchase silver bullion and
increase the public debt by issuing c o i n obligations in payment f o r it is a
question that Congress alone c a n answer. It is evident that if the p o l i c y is
continued and the Secretary of the Treasury be compelled to issue bonds o r
otherwise increase the interest-bearing debt, it will be done for the purpose of procuring g o l d with which t o pay f o r silver bullion purchased under
the act referred to.

There is to be added to our stock of silver bullion the purchases made since this interview was had. The intrinsic value
of the silver dollar is to-day $0.56; present value of an ounce of
silver, $0,726. Under the Bland and Sherman acts we have purchased 460,000,000 ounces of silver at a loss/at the present prices
of silver bullion, of $134,957,000.
Mr. MITCHELL of Oregon. May I interrupt my colleague
at this point?
Mr. DOLPH. Certainly.
Mr. MITCHELL of Oregon. I understood my colleague to
say he did not think the Secretary of the Treasury had any right,
after the $100,000,000 limit had been reached in the gold reserve,
to redeem the Treasury notes put out under the Sherman act in
Mr. DOLPH. That is my impression about the law.
Mr. MITCHELL of Oregon. The only other way to redeem
them would haye been in silver?
Mr. DOLPH. In silver.
Mr. MITCHELL of Oregon. Now, suppose he had redeemed
them in silver, would that or would it not have destroyed the
Mr. DOLPH, I do not think it would, but still it may be that
the action of the Secretary of the Treasury, whether legal or
otherwise, did affect the value of the silver dollar.
Mr. STEWART. Let me ask the Senator from Oregon
whether he is aware of the fact that the French Government has
$260,000,000 of silver in its treasury and $700,000,000 in circular
tion, an$ all its obligations are payable the same as ours in either
silver or gold?
Mr. DOLPH, I am aware that in France there is a silver circulation of $700,000,000. I am not prepared to admit that the
Senator is correct when he says that there are $260,000,000 in
the French treasury in addition to the $700,000,000.
Mr. STEWART. No, that is a part of it.
Mr. DOLPH. Part of the circulation is contained in the Q&nk
of France., There are, I suppose, $2j0,000,000 or $2b0,000,000 in
the Bank:of France. France also has $900,000,000 in gold. The
Bank of France pays out gold or silver at its option, just as the
Secretary of the Treasury redeems the Treasury notes at his option in gold or silver coin, and silver is received for Government
dues the same as in the United States. They have substantially
the sime provisions we have for the use of silver; but coinage
by the Government and coinage for individuals of silver has been
stopped and there is no further increase1 of the silver in circulaci


tion. With $900,000,000in gold, under similar provisions to our
own, they manage to maintain a parity between silver and gold.
Mr. STEWART. Can a person take any paper of Prance and
obtain gold for it for exportation?
Mr. DOLPH. I do not know what the provision is as to the
exportation of gold. There may be some provision against it.
I suppose that the Bank of France, being a government institution, could itself regulate that matter,
Mr. STEWART. Is not that the fact?
Mr. DOLPH. I will take the Senator's word for it.
Mr. STEWART. That is the fact.
Mr. DOLPH. I will not state as a fact what I do not know. ,
Mr. STEWART. That is the fact. Now, with regard to Germany, will she pay out gold for paper? Does she not compel
them to take silver? Is there any government except ours that
will exercise the discretion given it to protect the country in
favor of exporters and against the people? Is there any other
government? I defy any Senator to tell me of any other government that has robbed the people of gold and given the creditors the preference when the option belonged to the government.
Mr. DOLPH. I am informed by a Senator near me that there
is no government but ours that puts out paper money and redeems it in gold.
Mr. STEWART. What construction does the Senator put
upon what are claimed to be the mandatory clauses which provide that the Secretary of the Treasury shall coin sufficient of
the bullion purchased to provide for the redemption of the notes?
I say that all the trouble which has grown up and all of the disgrace which has been heaped on the act of 1890 is the result of
maladministration and not of unwise law.
Mr. DOLPH. I do not construe that provision to require the
Secretary of the Treasury to coin silver unless he finds it necessary for the purpose of redeeming the notes in silver; he may
have a right under the act of 1890 to use the gold reserve for the
purpose of redeeming notes issued under that act in ffold. But
1 do not believe he has. I believe he acted contrary to the requirements of law when he continued to redeem the Treasury
notes of 1890 with gold after the reserve had been encroached
Mr. STEWART. I will not interrupt the Senator from Oregon
now, but at the proper time I shall show the various arrangements made to get gold into Austria, and the action of different
parties. I shall give a detailed history of the manner in which
our gold was sent abroad and how this trouble was produced.
Mr. DOLPH. One of the causes that sends gold abroad is a
balance of trade against us. Gold is the standard of all the
commercial countries of Europe, and'all our imports from there
must be paid for in gold.
A tariff that causes what we consume to be made at home
tends to increase our exports and diminish our imports, and to
bring gold to us instead of sending it out of the country. Then
American travelers must provide gold for their expenses in
Europe, and they carry a great deal of gold abroad annually, but
the principal cause of the drain of gold from this country is the
fact that we are debtors to the people of foreign countries, and


when they demand payment we must send the gold abroad to
liquidate our indebtedness.
During our recent financial disturbances there was a large
exportation of gold. The stock of free gold in the Treasury,
that is, the amount of gold over and above the $100,000,000 reserved for the redemption of legal Treasury notes, was exhausted
and the reserve was encroached upon. This condition, in my
judgment, was largely caused by the fear of our European creditors that we would go to the silver standard in the United
States, and the consequent disposition on their part to recall
their investments in this country. Jf we should adopt free coinage of silver and go to a silver basis, whenever an American citizen should go abroad he would be compelled to exchange the
silver currency of the United States for gold, paying a premium
equal to the difference between the intrinsic value of the two
metals, and the same thing would be true concerning the payment of any balance of trade against us,-and of the payment of
our foreign creditors.
There is a great deal of absurd talk about the friends of silver
and the enemies of silver. I am neither a friend of gold nor an
enemy of silver. I am in favor of the use of the two metals as
money whenever possible. The advocates of free coinage denounce those who oppose free coinage of silver as the enemies
of silver, and as gold bugs. etc. Nothing could be more unjust.
No legislation favored by those who believe that the gold standard should be maintained is for the purpose of discriminating
against either metal.
I have no doubt but that the repeal of the Sherman law, the
cessation of the purchase of silver by the Government, and the
throwing of the 4,500,000 ounces of silver monthly now purchased by the United States upon the markets of the world,
would still further depreciate the price of silver; but the Sherman law has failed to keep up the price of silver bullion, and
threatens under existing conditions, for which the law is not responsible, to force us to a silver standard.
I do not believe that the free coinage of silver would maintain
the price of silver bullion or benefit silver producers, while it
would bring disaster upon the country. I claim to have been a
better friend to the producers of silver than those who have
favored free coinage. -I have never thought that the purchase
of silver by the Government and coining it into silver standard
dollars required to be received at their face for public and
private dues, or storing it in the vaults of the Treasury, was in
accordance with sound financial principles; in other words, that
such a course could be continued indefinitely, and the parity
between the gold and silver dollar be maintained. In a-speech
which I mads in the Senate on the 19th of May, 1890,1 said:
The sliver c o i n of the United States, coined under the Bland act and n o w
stored in the Treasury vaults, m a y be c o m p a r e d to a leaning towsr. The
fact that a silver dollar is intrinsically w o r t h but about 80 cents o n the dollar is the l a w of gravitation that is constantly pulling the whole mass downw a r d t o the level of the price of silver bullion. The fact that the Government receives it in payment of public dues u p o n a par with g o l d and redeems
the certificates in gold if preferred by the holder is the counteracting f o r c e
that prevents the fall; but every m o n t h ' s coinage represents a course of m a terial that raises the height of the tower and carries it towards the center
of gravity, which, once reached, the law of attraction will precipitate the
mass downward. That there is such a line between the opposing forces, bey o n d which w e can not safely pass, is conceded by m o s t people in this c o u n -


try, and because some persons have miscalculated its position and the precise time when it will be reached does n o t p r o v e that it does not exist.

Mr. PEFFER. 'Mr. President
The PRESIDING OFFICER (Mr. P A S C O in the chair). Does
the Senator from Oregon yield to the Senator from Kansas?
Mr. DOLPH. For a question?
Mr. PEFFER. Just a question.
Mr. DOLPH. Certainly.
Mr. PEFFER. The importance of the subject which the
Senator is discussing is,my only excuse for interrupting him, if
it is an interruption., I wish to ask the Senator what, in his
opinion, maintains the value of gold?
Mr. DOLPH. The same thing that maintains or fixes the
value of every other product of human industry.
Mr. PEFFER. Is there any other product of human industry
whose value is fixed in the law?
^ Mr. DOLPH. The value of gold is not fixed by law. The
law simply provides what shall constitute a. dollar. That dollar
might be worth 25 cents of our present dollar, or it might be
worth five times the value of the gold dollar. The fact that
gold is used for money as well as for ornaments and in the arts
helps to maintain its value, but that may be said as well of silver. That is but an additional use of the metal which helps to
fix its value.
Mr. PEFFER. I wish to ask the Senator, then, whether it
is not the law that a certain number of grains of pure gold shall
be put into a certain coin, say a quarter eagle, and that its value
shall be a certain sum, say $2.50, and whether the value of gold
is not fixed by the law and maintained by the law.
Mr. DOLPH. No, not at all. If a legal enactment would give
what is called money value, if the stamp of the Government or
the device of the Government upon the metal would give it
value, you might just as well make money out of iron and copper
as of silver or gold.
Mr. H A W L E Y . It is a mere enactment providing a name
for so many grains.
Mr. DOLPH. It is a mere Enactment giving a name to so many
grains of gold and providing what its functions as money shall
Mr. PEFFER. Then I want the Senator to answer my original question, what makes the value of gold? What maintains
its value?
Mr. DOLPH. Its use, its adaptation to the uses of man, the
fact that it is useful for a great many purposes, for ornaments,
for implements, or for table service, and for coinage as money.
I wish to quote some remarks I made in the Senate when the
conference report on the Sherman law was under consideration
in this body. I then addressed the Senate as follows:
, Mr DOLPH. Mr. President, I intend t o vote f o r this measure. I v o t e f o r
It because I consider it as different f r o m the free c o i n a g e of silver as n i g h t
i s f r o m day. I think the conferees did well t o m a k e haste t o report such a
measure, f o r it is pretty generally understood that a disagreement of
the conferees m i g h t have led t o the passage of a free-coinage bill. I v o t e
f o r this measure f o r a v e r y different reason f r o m that which has been g i v e n
b y s o m e Senators f o r supporting it, namely, that it to an approach t o free
On the contrary, this bill distinctly announces the fact that it is the intent i o n of Congress by the bill t o maintain the present standard, the gold standard, whereas, ,in m y j u d g m e n t , free coinage would h a v e p u t the c o u n t r y


u p o n a silver basis, would have put all o u r revenues upon that basis, and all
o u r expenditures, as well as the price of all commodities, and the w a g e s of
every laboring m a n in the country upon the same basis. The soldier would
have received the amount of pension he n o w receives in gold in dollars worth
80 cents o n the dollar of the present standard. E v e r y employ^ in the Government w o u l d have been paid in the same depreciated currency. In m y
judgment, g o l d would have been withdrawn f r o m circulation, the Government w o u l d have had n o power to supply anything in its place, and free coinage of silver would not have supplied as m u c h silver coin as we have been
coining under the Bland act.
There would under free coinage be n o inducement to bring silver to the
mines unless, as supposed by some, a m a n could c o m e in one d o o r of the
mint with silver at f r o m 72 t o 80 cents on the dollar and take out at another
d o o r a silver dollar worth a dollar in gold. That is improbable. The m o ment the silver dollar became worth no m o r e than the bullion in it there would
be n o m o r e inducement t o take silver bullion to the mint than t o sell it in
the open market. W e had free coinage f o r eighty years, and in t w o years, I
think, or three years past, we have coined m o r e under the forced purchase of
silver b y the Government than w e coined of silver in the whole eighty y e a r s
when we had free coinage.
I vote f o r this bill also n o t without some misgiving. I think there is s o m e
danger in it. There will be danger in any measure b y which the volnme of
silver coin o r silver certificates which are redeemable in silver dollars containing but 80 cents' worth of bullion, measured by the standard of gold, is
largely increased.
The question naturally arises, h o w much can the v o l u m e of this character
of currency be increased without passing the point at which the receiving
of these certificates f o r public dues and all the efforts of the Secretary of the
Treasury in redeeming them in silver o r gold, as he m a y have either metal,
c a n maintain them at par with the gold dollar?
So, when I v o t e f o r this measure, I do it with m y eyes open, knowing that
there is danger lurking in it. But it is so different f r o m free coinage, s o far
removed f r o m free coinage, that I vastly prefer it t o that.
A s I said before, there is a reasonable fear that if there should be disagreement w e would get a free-coinage bill. Instead of criticising the gentlemen w h o have changed their views u p o n this question, have seen such
sudden light and been s o suddenly converted, I feellike congratulating them
o n their conversion t o sound principles of currency. W e read of a m a n w h o
w a s traveling towards Damascus and breathing out threatenings and
slaughter against the early Christians, that he s a w a great light and w a s
instantaneously converted, and the whole trend and purpose .of his life w a s

I read this to show how I considered the Sherman law at the
time the conference report was agreed upon.
I believe, however, with the continuance in power of the Republican party, the Sherman law might have continued in force
for some time to come without any disastrous effects. The repeal of the Sherman law without any substitute by throwing
upon the markets of the world monthly the 4^00,000 ounces of
silver bullion now purchased monthly by the Government, should
the present production of silver continue, will necessarily greatly
depreciate the price of silver bullion.
It will stop the increase of our circulating medium by the issue
of Treasury notes. It will not, in my judgment, restore confidence or greatly improve the business situation. I fear, on the
contrary, that it will make it worse. It may, however, prevent
what is threatened, viz, the parting company of the silver and
gold dollar, and enable the Government to float its load of silver
currency upon our present stock of gold. This will only be the
case, however, by the repeal of the law unaccompanied by any
measure calculated to shake confidence in the financial ability of
the Government, and by such a decided action of Congress as to
make it certain that there is no further danger of free coinage
of silver, and that it is the policy of the Government to maintain the gold standard, and to redeem and retire the silver currency by substituting Treasury notes redeemable in gold on presentation, or to maintain our present circulation of silver cur*


rency at par with gold under the present or additional provisions
for its redemption in gold.
Some persons talk about the redemption of our silver currency
in gold as if it were, likeoiir currency, redeemable
on presentation. Others ignore entirely the provision which
has been made by law for the redemption of silver currency in
gold, and point to the fact that standard silver dollars pass current at their face in this country as evidence that free coinage
of silver would make the legal ratio in the United States between
gold and silver 16 to 1, the actual ratio of the intrinsic value of
the two metals.
I do not believe that the Secretary of the Treasury is authorized under the Sherman act to redeem the Treasury notes issued
under it in gold when the gold reserve is encroached upon, or
to sell bonds to obtain gold to rede3m them. They should,
under the law, have been paid in silver coin when there Was no
longer gold with which to redeem them without encroaching
upon the gold reserve, but the course pursued by the Secretary
of the Treasury no doubt helped to maintain the parity between
gold and silver.
In several of the States and Territories one of the principal
industries is silver mining. The owners of silver mines and
those engaged in dependent industries are interested in having
a market for the products of the mines at prices for silver bullion which will make mining profitable and the mining- regions
prosperous. Their reasonable demands upon the General Government, in this regard, have heretofore been more than complied with.
Under the Bland act the Government became a forced purchaser of silver to the value of $2,000,000 per month, and under
the Sherman act of 4,500,000 ounces of silver bullion per month,
all in a vain endeavor to prevent the further depression of silver bullion. I greatly sympathize with these people, and if
some one can devise a scheme by which silver mining can be
protected without injustice toother intex^ests quite as deserving
and without danger to our finances and our credit, I should be
very glad to support it.
It is evident that the Sherman law, even if it could be safely
continued, will not be sufficient to keep up the price of silver
bullion, and owiiig to its depreciation, silver mines are already
closing down. Undoubtedly the law has helped to sustain the
price of silver by withdrawing from the world's market so large
an amount of silver bullion.
While I have reluctantly concluded, notwithstanding the disastrous effect of the repeal on the price of silver bullion and the
silver-mining industry, that the Sherman law should be repealed
to prevent greater disaster, I am not willing to admit that that law
is responsible for existing financial and business conditions, and
I do not expect its repeal will greatly relieve us from such conditions. The proposition to repeal the provision of the Sherman
law, authorizing the purchase of silver bullion, to receive my
support, must not be connected with any other measure which
would be equally or more injurious to the credit of the Government and the finances of the country, such as the removal of the
tax upon State-bank issues or free coinage of silver.