View original document

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

S I L V E R .









W e d n e s d a y , A u g u s t 2 8 , 1893.








The House 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 purposes'

Mr. DUNN said:
Mr. SPEAKER: After listening to the various speeches on the
subject and the arguments advanced on both sides of the measure
before the House, and being somewhat green in legislative matters of this kind at this time, I may subject myself to severe criticism when I say I do not think that any member who has yet
spoken has taken the same views that I do, at least upon one
point, which is, in my judgment, a vital one. Our form of government is the result of the wisdom of ail the ages of the past
analyzed by the founders of our Constitution, and the best effects
derived from the experience of all former governments has been
molded into that which we now live under.
There are two principles upon which the whole structure is
built. The first |s that all men are born free and equal, entitled
to life, liberty, and the pursuit of happiness; and the second, protective of the first, is that all just powers of government must
be derived from the consent of the governed. The last proposition being true, I put it that if this question of the repeal of the
Sherman act were to-day submitted to the people of this country
there can be no question in the mind of any intelligent person at
all conversant with the situation but that the purchasing clause
would be at oncO repealed, by such a sweeping majority (and in
this country majorities rule) as would astonish the defenders of
private interests on the floor of the House, and satisfy them, beyond doubt, that the act has not the consent of the people. But
legal consent is engrafted and embodied in the Constitution of
our country.
Now, I will make* this proposition to the defenders of the
silver interests on the floor of this House: that is, to vote against
the repeal of the Sherman act, provided they will furnish me a
brief before the vote is taken, that would satisfy even a thirdrate justice of the peace, that the Constitution of our country has
in a single sentence, line, or word given the power to the Congress of 1890, or to any other Congress, to enact a law such as the
Sherman purchasing clause; a law that compels the Secretary
of our Treasury to furnish a market for an already debased
product, to compel him to coin it into money at a rate from 35 to
40 per cent above its commercial value in the markets of the

world, and to force upon the many for the benefit of the few, the
mine-owners, that debased coin whereby a robbery, under the
pretense of law, is committed upon the people to the extent of
the difference between the commercial and the coin value fixed
upon the silver by the fiat of the Government. I find no portion
of the Constitution that can be in any way construed to give that
fearful and dangerous power, though there are some who claim
that under the first clause of the eighth section of the Constitution the words " provide for the common defense and general
welfare of the United States " justifies the act.
It is well, however, to remember that this power, by construction only, was used in such a manner, soon after the adoption of
the Constitution, that the implication of power led to many difficulties and to much distrust. The result was that a limitation
clause was afterwards adopted in the ninth amendment, which
says that " the enumeration of certain rights shall not be construed to deny or to disparage others retained by the people,"
and in Article X of amendments the powers of the Constitution
before adopted were limited aud defined as follows:
The powers not granted to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively or to the

. So clear is it fixed in my mind that the purchasing clause of
the Sherman act is unconstitutional, that I do not believe there
is a lawyer in this country to-day of respectable ability who will
not agree with me when I say that if this bill was submitted in
proper form to the Supreme Court of the United States it would
end the debate on the subject in this House at once. That body
would declare it utterly unconstitutional, and say'that the act
did not come properly within the constitutional power of Congress. First, because there is no grant of power in the Constitution to warrant the passage of such an act; second, because it
is against the genius and intent of our Constitution, which is
rigidly against the grant of special privileges or special immunities to individuals or corporations.
In its inception it was clearly enacted, and meant to be in the
interest of a single product, that is, the product of silver, to
which it granted special privileges, under the plea of its being necessary to stamp it into coin, when in fact it was utterly
unnecessary, and has proved to be dangerous and against the public welfare, as is now shown by the misery, desolation, and want
that this unfortunate, unjust, and unholy measure has brought
upon our country.
I need go no further for arguments to satisfy my mind that my
duty, under my oath, can have but one direction, ilbd that is immediate, unconditional repeal of the act, as that seems now to
be a quicker method of disposing of it than by taking it before
the Supreme Court in regular form and having it declared null
and void. I am at a loss, however, in yiew of these facts, to sae
how so many men can entertain the views they appeal to hold
with reference to the repeal of this law.
I can not for my life see what reason they can give to their own
consciences, in view of their sacred obligations when they called
God to witness that they would maintain the Constitution; and
yet, with this bill clearly unconstitutional, condemned by all, ac199

knowledged to be an excrescence, denounced and denied by its
fathers, they refuse upon One pretext or another, private or public, to vote for the repeal of this bill forthwith unless they can
force a bargain in favor of a private interest as a condition of
their performance of their public duty.
The real and proper object of a Government such as ours is
to maintain the peace and to execute justice "between its citizens,
leaving- to each a choice of occupation without favoring one at
the expense of another; and what is true of the individual is true
of every interest, whether individual or corporate, and wherever
the Government obtrudes itself into private enterprise as it has
done in furnishing- a market for the silver industry, it makes not
only a constitutional usurpation, hut a fateful mistake, because
as in this case it has cramped and dwarfed every other industry
in the land to benefit this one.
The province of government is to secure the liberty, the properties, and the possessions of its citizens by wise and wholesome
laws, and there can be no civilization where there is not security
for life and property; and any law which makes property less secure, unsettles and throws down established values as the Sherman act has done, is not only unconstitutional per seand against
the spirit of our Government, but is a menace to civilization and
an injury to mankind.
The poorest judgment at all familiar with political economy
must be satisfied that it is impossible for any Government to
• maintain and circulate in the same business community two dollars, one worth 100 cents anywhere in the world, and the other
worth but 57 cents, yet each purporting to be value for the same
amount of product. The proposition is so absurd that I am astonished that any man or set of men with good sense can for a moment
entertain it. The most valuable coin will at once disappear from
the channels of trade and the baser be circulated, and then only at
its real or bullion value, as prices will vary to meet the debasement of the ooin; for no man will part with a dollar's worth of his
product for a 57-cent coin, although the Government fiat had
stamped it as worth a dollar, unless the Government says that it
will redeem it with $1 of standard gold on presentation for redemption at the Treasury of the United States. The conclusion
arrived at by the best business minds of the country, is that the
unlimited flood of cheap and debased coin which free coinage
of silver would impose upon the country would prevent the
Government from redeeming in gold.
Now, why should we keep this law upon our statute books? I do
not believe that there is a silver man in this House who does not
feel it to be his dut^ to repeal it at once, but they argue against
repeal while admitting it to be an evil. Why? Simply because
they want to force an unholy bargain with those who favor repeal—a bargain that their special interest, silver, and not the
public good, may be conserved. What would you think of a burglar who, when caught stealing your silverware, admitted that
he was wrong, but, under the threat of a pistol, wanted to make a
bargain for his escape from the punishment he deserved by restoring only a part of his plunder.
It seems to me that the silver kings having already plundered
the people, having been caught in the act, the power about to

be denied to them to plunder any longer, they are bargaining, as
it were, through their mistaken friends, to retain a part of the
power which they have so long unjustly held, to keep a portion
of their plunder before they will permit justice and right to
prevail. This is strong language^ and I am sorry that I am
obliged, in accordance with my views of duty, to give it utterance.
Now, what is the excuse ottered for the conditional retention of
this measure ? I have admired the speech of my friend from
Nebraska [Mr, BRYAN]. There is no doubt that it is molded in a
cast of eloquence that is rare indeed; but when it comes to argument, and he attempts to make a bargain in favor of bimetallism
as a first condition under the plea that there is not gold
enough in the world, etc., he lays down a platform which is a
mistake of-fact. He says that if bimetallism is not adopted we
will go to ruin, and that there is not gold enough with which
to transact the business of the world.
Let us see whether that is true or not. He forgets that the
world has progressed, that bimetallism is not only unsafe but
unnecessary under present conditions. Let me put this proposition before you. If silver was a product of Nova Scotia, in which
this country and no man on this floor had an interest, I ask him
would he still retain the same views that he now holds? I can
not believe it.
In the matter of " the insufficiency of gold coin with which to
transact the business of the world," the one potential argument
setup by the advocates of bimetallism, I now quote from the work
of Hon. J. H. WALKER, in his address before the World's Congress Auxiliary at the Columbian Exposition. His facts and his
figures taken together with what I have gleaned from other
sources are to my mind conclusive as against this theory of insufficient gold with which to transact business.
According to his statement the average daily transactions of
banks are about "$400,000,000."
I believe that to be a correct statement; we have had sufficient
money right along to meet the business demand and we have
now. We do not propose in the repeal of this bill to have any
less, as we stand by the redemption of the silver already coined
and also the bullion in the Treasury, and I for one flatly and
absolutely refuse to be a party to increasing that amount at the
risk of our Government's ability to redeem it with the standard
coin of the world. " The loanable fund held by the national
banks in this country is shown by the report of the Comptroller
of the Currency to ba in round numbers $2,800,000,000. Of this
sum $1,800,000,000 are deposits of customers and the balance belongs exclusively to the banks. The loans and discounts are
$2,200,000,000, and the other $600,000,000 are held as a reserve."
This means that the banks hold titles, mainly in the notes of
their customers, to$2,200,000,000 of the consumable wealth of the
country; that there is now in the hands of the farmers, merchants, and manufacturers title to $1,800,000,000 of the funds now
in banks by way of deposits. As the deposits are $1,800,000,000,
and the daily transactions are $400,000,000, it is evident that the
average time each deposit remains in b ink is four and one-half
days. This $1,800,000,000 of deposit capital in the banks can only
be made available to the community for use in our daily needs by

a proper system of banking-; and here let me say, thuft I have no
sympathy—I have nothing but condemnation—for those uncalledfor and unintelligent assaults upon the banks of our country at
this unfortunate period.
I do not believe in those gold-bugcries or those assaults on the
banks. They are simply the stock catchwords of demagogues
who appeal and pander to the ignorance, the passions, or the
prejudices so likely to be awakened in the hour of distress, to
divert the minds of the suffering artisans and laborers of our country from the silver blight, the true cause of our misfortune, to
the goblin held up by the silver interest and shaken in their faces
by the wild, unreasoning spirit of self-interest and demagoguery.
If we had to-day a sound currency, good money, absolutely redeemable in coin of a standard value all over the world, the distress that surrounds us would disappear like the mists of the
morning before the noonday sun, all this sophistry uttered upon
this floor to the contrary notwithstanding. Let it be known to
the world that we have a sufficient amount of the best reserve
coin in the world ready at all times for redemption purposes,
and the demand would be only sufficient to meet the daily wants
of exchange.
The people would not rush for gold, as they do not want it in
the daily business of life. This demand may be made and answered ten or a thousand times in a day, as the case may be, during a given time, in every instance almost immediately to be returned to the bank from which the gold is drawn. But where two
coins of different commercial bullion value are legal tender, sure
redemption means that it be instantly done in the coin of the highest bullion value, which is hoarded at banks as is the case today.
To doubt money is to discredit it, and that portion of our money,
silver, which to-day is doubted and discredited, would drive
every dollar in gold coin from the country because the drafts
made on the banks for gold would never be redeposited, while
obligations could be paid with a cheaper money, and we would
be obliged perforce to rest all our financial transactions upon a
silver basis, which means a debasement that would be death to
the financial life of the country and mean poverty to its working
As all values depend upon supply and demand and the cost of
production, so all values would be regulated upon a silver basis
according to the amount of production of silver each year, as the
supply or demand of the market required it. As silver fluctuated, so would every value, and no man would want to engagein
business, thus depriving labor of its looked-for reward.
In England, the visible gold upon which all her transactions
and her foreign exchange rest is $125,000,000. Every dollar of
that represents a foreign commerce of at least $25. while the gold
in our country—the visible gold—is rated at $337,000,000, with a
foreign commerce of only 2§ dollars to each dollar of visible gold.
The actual daily need of coin for the business of our country is not a speculation; the daily bank exchanges are about $400,000,000, and we know with
absolute certainty that only H per cent of those exchanges are made in coin.
Now, the efficiency of each f1,000 in coin to-day, in making the exchanges of
the world, has increased a thousand-fold faster than have exchanges of any
other country in the world.

Tills efficiency has Increased faster in the last ten years, and is now Increasing faster than ever before by the use of railways, steamships, telegraphs, telephones, and, above all, in improved commercial methods and
economies. In trade between Boston and Canton or New York and Canton
as one instance, the efficiency of each $1,000 in gold coin has increased thirteen
thousand times since 1830, $1,000 now being the equivalent of $13,000,000 under
the methods and appliances of commerce and exchange in 1830. Then a ship
loaded for a six months voyage to Canton took its supercargo to trade for a
return cargo, and with him took the coinneededto make up the difference

The gold is not sent there now; it is simply placed to the credit
of the factor until the exchanges are made. Then thirty days
were consumed in going from Boston to St. Louia. Now money
is transferred in one minute; so that you will see that coin—X
speak now of the coin recognized by the business world—is ten
thousand times more efficient in trade. One thousand dollars in
1893 in the exchanges of the world is the equivalent of ten millions in 1830. This is a startling proposition, but it is an undisputable fact.
To prove this the returns made by the Comptroller of the national banks in our own country show that each day's transactions is about l i per cent of coin and 41 per cent of bank notes
and other currency, and 94 per cent of checks, drafts, bills of exchange, and'other tokens of property. The banks of our country,
and especially of the metropolis and the clearing-house at New
York, deserve not the assaults made upon them, but the lasting
gratitude of the country for the honorable manner in which they
have stood together and stemmed the tide of financial misfortune,
which would have spread to a much greater extent but for them.
Had they been what they are represented to be by some of the
advocates of a debased currency, financial wreci would have
been much greater from one end of this country to the other
than it is to-day, such a financial wreck indeed as the world has
never yet seen.
Money is in the commerce of the world a token of value,
whether in coin or in bullion, but you would not of yourself be
able to determine the real value of a bullion token given you in
exchange for something that you had produced and offered for
sale, and consequently you might give a much greater amount
of your product than was fair for a given amount of bullion.
Coinage has therefore been fixed as one of the most important
functions of government; that is to say, the Government at its
Mint assays the gold ajid silver, jmrifying them and marking
each coin with its fineness and weight, that you may know exactly what you are getting for your produce.
Ttie Government certifies that the coin has a fixed amount of
grains of the metal required by law to be put in the particular
coin, and it is bad money unless .when it is recoined it is worth
in bullion what it represents itself through the Government
stamp to be in coin. The Government can not in the process of
coining the bullion into a money token give it a greater commercial value in the coin than it has in the bullion. If it does,
by its own act it debases the coin and is, to all intents and purposes, a forger of false coinage. It does that of itself which false
coiners do, and for which it decrees a severe penalty. It cheats
the people with a false measure of value, and the Government
has no more right to rob the people than a forger has.
The money of circulation should be of such value that no matter

what I hold as its representative, whether it be a piece of paper,
a piece of leather, or a piece of silver, those who issued it to me,
having-my money or my property, should, at my demand, return to
me what is mine, not 57 cents worth of silver for a dollar, but the
value of 100 cents or $1. It is the fear of the Government's inability to make this redemption on my demand or the demand of the
business world, in view of the immense flood and consequent
debasement of silver, that has caused the panic, and those who
believe the panic to be unreasonable do not understand the keen
intelligence of the business world.
_ When the Government coins money it does not create gold or
silver; it never owned gold or silver; it has no constitutional
right to own it for the purpose, and never pretended to own it
before the passage of the Bland act in 1878 and a still later one
of 1890, since when it exercises an unconstitutional power to purchase for currency purposes. The business interests and intelligence of the country are keen enough to see that the Government
is filling up its vaults with an unredeemable or fluctuating metal
that is becoming cheaper and cheaper each day. Whenever it
coined money before the acts named it coined, not the Government's metal; it coined the metal,of John Jones or John Stewart
and fixed its stamp of value upon it.
Now, while it had the power to stamp the gold or silver bullion
of John Jones or John Stewart and to make it a legal tender if
it chose to do so, it had no right and has no power to make even
gold a legal tender for more than its actual or real value. It
does not, and can not from its very nature, create a value where
a value does not exist, or rightly give a fictitious or a greater
value to an existing one than it is worth in the markets of the
It does none of the things of itself which creates value and out
of which values grow. It neither produces nor saves, neither
toils nor exchanges; it only expends or destroys what is given
to it by society. Like a pauper, it exists by the contributions
of the citizens paid into its Treasury by way of taxes. And
therefore to attempt to create a value where no value exists, and
can not exist, is as vile as it is dangerous and criminal, and is a
W e who believe in an honest token of value, having within
itself the intrinsic merit which makes it exchangeable for its
face value of any other commodity of a like value, are told by
the adherents of the silver fallacy that with them we have come
to the parting of the ways, if we do what under our oaths of duty
we are obliged to do by the repeal of this bill. That is to say, a
portion of the great Democratic party threatens it with dire destruction if it attempts to carry out that which it is pledged to do
in its platform. And this threat is held over the friends of honest money to compel them for party?s sake to bow their heads
to the Moloch of silver.
I want to say to those men here and now, that I am a Democrat
by nature, training, and instinct, that I believe the Democratic
party will live while the Constitution of our country lives.notwithstanding those threats; that when the Democratic party
dies, as an effective protector of the principles of our Government, the Government will die with it; that the principles of

our party are as indestructible as the eternal hills of God, and I
would rather see it buried out of the sight and sound of men forever by the forces of nature or revolution rather than that the
party should^bandon a single one of its principles under the
threat of a private interest which seeks to dominate this House
and overthrow all principle of right and justice amongst men to
serve their own aims and interests.
There are men on the floor of this House to-day, both older
and younger than I am, who remember the threats made in the
Charleston Convention "that we had then come to the parting
of the ways." Do those men remember what that parting meant?
Have they forgotten the flaunting of the bloody shirt? Have
they forgotten the dreadful sacrifice that their parting of the
way brought about? Do they undertake to-day, when the common sense, the intelligence, and the patriotism of the American
people has covered the bloody shirt in the oblivion which it deserved, to establish in its place at the parting of the way the
bloody bridle of the silver king? If they do persist in that
course, it will be history repeating itself, and they will be the
first to suffer.
The men who are first to step off the broad platform of the
Democratic party and the principles of right and honest government will be the first to fall into the mire and the last to be relieved from the predicament in which they have placed themselves.
There are measures of relief in the direction of an elastic currency which I might present at this time, but I believe it is somewhat irrelevant to the matter upon which we are called to act.
I will, however, offer it later on.
The American gold dollar contains 25.8 grains of gold, 900
fine. One ounce, -or 480 grains, 1,000 fine—that is, pure—would
mint in this coin $20.68. This coin has a standard value all
over the world equivalent to $4.86:1605O for the English sovereign,
and $3.86 for the French piece of 20 francs. It is to-day the
basis of value of all descriptions of United States notes, by
reason of legislative mandate and the ability of the United
States Treasury to draw from its reserve the gold coin which
may be required to meet any exchanges or redemption.
The full legal-tender silver dollar contains 412i grains of silver,
900 fine, sixteen times the quantity contained in the gold dollar,
and, with pure silver selling at 70 cents per ounce, has a bullion value of only 54 cents, but a currency value equal to a gold
dollar, so long as the Treasury can, by free exchanges, maintain
the parity of the two coins. The mint rate between gold and
silver is 16 to 1, but the coinage value of an ounce of gold being
$20.68 and the market value of an ounce of silver being 70 cents,
the commercial ratio is then over 29 to 1. How can the Government maintain it at a parity; only by a loss of the difference?
The value of a silver dollar and the papsr note3 which it represents can thus plainly be seen to now depend upon the ability
of the Government to maintain a sufficient gold reserve to make
all necessary exchanges at the established ratio.
The standard silver dollar has always been a full legal-tender
coin, but it has never filled a prominent place in the business
transactions of the people. Its bullion value for a long time prior

to resumption being greater than the gold dollar, it was coined
in but small quantities and was soon exported or consumed in the
arts, and in the coinage act of 1873 no provision was made for its
This often-named conspiracy or demonetization of silver has
been much discussed since then: but at the time the omission
attracted very little attention, as the bullion required to make
a silver dollar had a market value of about $1.03. A few years
later silver began to decline, and has continued ever since to do
so, by reason of its abandonment by leading nations as an unrestricted money metal, and also in consequence of a great increase
in its production and a diminution in the expense of obtaining it.
Great efforts have been made to induce the United States to
protect the interests of the producers of silver. The free coinage of standard dollars has been vehemently urged, and many
times rejected by Congress. The Bland act of 1878 required the
Government to purchase silver and to coin not less than two
million nor more than four million silver dollars every month.
This experimental measure was, even by its authors, admitted to
be a failure, having been based on the expectation that the people would readily accept and,circulate those coins. £' The dollar
of their daddies."
But the day for a popular demand for such coin had passed.
The use of Government and national-bank notes of uniform appearance, and therefore easily recognized and difficult to counterfeit, of certain redemption and universal acceptance, had become more acceptable to the public than any use of silver except for subsidiary coin for small change, and this feeling applied to gold as well as to silver coin. The new coinage of silver
dollars was highly unpopular, and the silver interest hastened
to placate the people and preserve the continuance of the coinage and consequent absorption or market for silver, by the creation of certificates based on it, circulating as currency.
In 1890 $297,556,238 of this sort of currency had been put in
circulation. It was useful for the time being as money in the
transaction of business, and somewhat obviated the difficulty
that seemed to threaten' because of the reduction in the amount
of national bank notes caused by the redemption of United States
bonds which had been issued to secure those issues. But the
value of the certificate really rested upon the value of the gold
reserve behind it, and not upon the hoarded silver coin which
it represented, and which no one wanted to either store or
This coin, which at first was below the mint standard in value,
declined more and more each year in bullion value. The resumption of specie payments had been effected with about $350,000,000 United States legal-tender notes outstanding, for which
a gold reserve had been by law provided. It is sufficient now to
say that this $350,000,000 of United States notes, supported by a
reserve of $100,000,000 in gold coin, has had a use the benefit of
which it would be hard to deny while the law so rigidly restricted
the issue of ordinary bank notes.
A glance at official figures shows some remarkable changes in
the volume of United States currency and money as well between
1878 and 1892. The amount in circulation had increased from

$729,132,634 to $1,601,347,187; the per capita, from $15.32 to $24.40.
United States notes secured by the $100,000,000 gold reserve remained at the same figure, $346,681,016. Of gold, there was, in
1878, onlv $25,000,000, circulating in California, In 1892, in Treasury, bank reserves, etc., there were $664,275,335. The amount of
national-bank notes had been reduced to $172,683,850, a decrease
in this kind of circulation of some $150,000,000, while circulating
notes based on silver purchases had been created to the extent
of upwards of $4^0,000,000.
The growth of this currency issue was regular up to 1890, and
at the beginning of President Cleveland's term had reached
$208,538,9t>7, but the free gold in the Treasury was about $150,000,000, and having this new Government paper issue to take care
of, as well as nearly $350,000,000 of legal-tender notes, the policy
was adopted under Mr. Cleveland's Administration of building
up the Government's supply of gold, which was done to the extent of over $200,000,000. The large surplus then existing permitting this line of action and also great stability in Government
credit as a result, aithoughsome distrust was felt in consequence
of the continued decline of the price of silver, of which there
was so large a stock being carried.
Under the Harrison Administration the surplus in the Treasury
disAppeared, and a large part of the Government's gold reserve
was, in consequence of the mad extravagance practiced, necessarily used in the payments of debts, but the purchase of silver
kept righton ->nd, indeed, was greatly increased by the act of 1890.
In 1888, in addition to an amount of $120,8S8,448 of gold, for which
there were certificates outstanding, the Treasury held $203,885,218
(in December) of free gold as a reserve, with only $308,000,000
legal-tender notes and $200,759,657 of silver certificates outfit inding—about 40 per cent of gold reserve.
July, 1892, the gold reserve had diminished to $110,444,391 of
free gold, with$309,559,904 legal-tender notes, $326,693,465 silver
certificates, and coin notes (act of 1890) $98,258,692, a total outstanding of $734,512,061, while the percentage of gold reserve was only
about 15 per cent. A year later, July, 1893, the notes based on
Bilver purchases had increased some $50,000,000, and the gold reserve declined to $95,000,000, and doubt and distrust seemed to
have taken possession of the public mind, until now we are in
the midst of the direful consequences of a discredited and doubtful currency.
In order that a silver dollar should have the same bullion value
as a gold dollar it would be necessary that the price of silver be
as high in commercial value as $1.29 per ounce, but this has not
been the case since before the passage of the Bland act of 1878,
and the decline has been steady in spite of the extraordinary
and unconstitutional efforts made to check it, until as low as 70
cents per ounce has been reached. And with recent events in
Germany, Austria, and India, tending to a still further depression of silver, tne public is becoming aware of the lack of confidence arising from the fact that this Government is carrying so
large a part of its bullion reserve in this unstable metal, and
therefore the business world doubts its ability to carry out its
promise to redeem in gold, and hence the panic.
We have parted with $60,000,000 in transactions on foreign

account in a single six months, and the return of part of this
when the present depression began would have done much to have
checked the tide of destruction, but the menace of a debased silver standard supplanting the gold basis in this country has prevented this usual and natural relief. As the buying of silver
affords only an unstable basis for the issuance of United States
notes, this feature of the Sherman act should be at once absolutely and unconditionally repealed. [Applause.]
The following comparative table from the last report of the
Secretary of the Treasury would seem to show that there was
circulation enough in this country if confidence was restored:


United Kingdom. $550,000,000
United States.... 654,000,000




$50,000,000 $700,000,000
81,000,000 1,581,000,000
107,000,000 917,000,000
405,000,000 1,634,000,000


This table shows a per capita of $25.15, the greatest per capita
of currency ever before in circulation in this country. The largest in the flush times before 1888 was only $16, or thereabout;
the present circulation being a fraction more than a third greater
than it was then, and yet we are told by the silver men that
there is not enough of currency, and they offer this as one of the
arguments against the repeal. It is idle and vicious, because it
is untrue.
Gold coin is not any longer as desirable for a currency as its
representative in paper, except occasionally when needed to settle foreign balances. The stoppage of silver purchases and the
decision by the Government to maintain the gold redemption at
all hazards, for the sake of the na«i*>nal credit as well as the national honor, should be arrived at without loss of time. The
measures for the increase of the gold reserve require economy
in the Government, and, if taken with care and judgment and a
sound discrimination, will at once restore confidence and impart
stability to business affairs from the moment of their adoption.
The return to specie payments was accomplished in 1878 by the
issuance of United States bonds to create a gold reserve of about
30 per cent of the notes then outstanding. A similar expedient
would seem necessary now to increase the reserve in a fair proportion to the increased issues of currency, and thus maintain the
credit of the United States, though the issuance of interest-bearing bonds should be the last thing resorted to.
There are some suggestions, however, that I desire to offer at
this time, though they are hardly pertinent to the matter of the
repeal of this bill, except in so far as they would supply the place
of an elastic currency, which is the real thing the bimetallists
want, though they hardly seem to know it. At no time since
the ending of the civil war and the unexampled development
and increase in prosperity that followed has the country been
free from the lurking danger arising from the use of a large volumo of unelastic Government paper, which has constituted a
chief part of the circulating medium of the country. The rigid

restrictions connected with the issuance of notes by national
banks have caused this very serviceable kind of currency to decrease, while the rapid growth of business and population required constantly more and more circulation.
No other nation than ours is more given to the habitual use of
banking privileges, and the free use of checks and drafts in the
transactions of ordinary business and the settlement of the normal expenses of daily life. Under ordinary circumstances a person of good repute can travel where he wishes, buy twhat he
wants, and settle his indebtedness by a check on his home bank
without difficulty. The amount of current money most people
have to hold and carry about compared with their total expenditure is a mere trifle, but to avoid delay and the trouble of
identification a person will require a larger amount of currency
when he passes outside of the locality in which he is thoroughly
Just as a fair portion of gold held as a reserve is able to impart
a standard of value to a much larger amount of paper issued, so
the currency reserves of the banks can in ordinary times sustain
a cash indebtedness three or four times as great. When there
is no adequate provision for the issue of circulating notes by the
banks there will come from the people an irresistible demand for
governmental issues of some sort, and if these are made in paper
or in coin not having full value abroad to an extent sufficient to
meet the full tide of active business and exchange, there will be
times of stagnation in the movements of the products of the country when the supply will be redundant and the accumulation
of money at the financial centers will be such that it can only find
employment in speculative transactions injurious to the people at
large, and from which it is difficult to withdraw the capital they
have absorbed and restore it to the regular channels of trade in
times of panic. .
In times of distrust and contraction there often arises a demand from many solvent merchants for an increase of ba»k
credit to tide them over a temporary depression, and at the
same time there is likely to be an increased demand from all
classes of persons on their deposits of currency, whether in ordinary banks of deposit or in institutions for savings.
A reduction in the cash resources in the banks has the effect
of enforcing a contraction of its loans, and thus it comes about
that at the very time of a demand for increased discount the
ability to extend this accommodation is taken away by the reduction in the reserve due to the demands of customers for the
payment in currency of their accounts. When adverse conditions produce a demand for currency and a bank is required to
pay out $100,000 of legal-tender money, then in order to maintain its reserve on a 25 per cent basis it must call in $400,000 of
its loans, and the embarrassment becomes great when this curtailment of credit is coincident with a demand for an increase in
its line of discount.
If under these circumstances a bank could freely emit its own
circulating notes in exchange for the checks of its depositors,
its total liabilities would not be changed by the operation; it
would owe more on account of circulation but less to the deposiitor whose check had been exchanged in this way, and the per199

centage of reserve to liabilities would remain the same, and the
demand for currency would have been met without a reduction
in the amount of legal-tender money held by the bank. In times
of financial stringency and distrust there will always be, as there
is now, some hoarding of legal-tender money by persons of small
means, and the aggregate of their collections and withdrawals
of customary deposit accounts is enough to seriously affect the
cash reserve of many banks. Actual suspension is then only
escaped by avoiding the payment of large checks except through
the clearing-house exchanges with other banks, where clearing-house certificates can be used, and a premium on currency
becomes an established feature of the situation.
In my opinion the business demands for currency, which cause
this premium, could be readily met if the bank in which the depositor has a credit balance could exchange for the individual
check its own promises to pay lawful money in convenient
amounts for the settlement of small transactions. Amongst the
legal restrictions which now cut off this method of relief is to
Be found the Government tax of 10 per cent on State bank notes.
This tax, designed to protect national banks and promote their
purchases of Government bonds, had a war origin, and, like the
revenue stamp on checks and promissory notes, was submitted
to with patriotic resignation. It should have been abolished
when the others were.
In the light of experience, it is the duty of every State to regulate the issues of bank notes so that no loss attending upon their
use shall fall upon the people through whose hands they pass.
This can readily be done, and it would be preferable that action
by the State Legislatures of uniform character and in harmony
with the currency legislation of the General Government should
be taken bsfore the present restrictions are entirely removed.
A State-bank issue can be made just as secure to the people as
any other circulating note by the enactment of wise legislation.
Banks of issue should be under governmental control and examination at frequent intervals of time.
The stockholders should be held liable to an amount equal to
their stock, and notes of circulation should be a first lien on all
assets of the bank in case of failure. All the banks in any State
made liable by a percentage on the circulation they have issued,
for any possible loss on the bills of any one of their number which
may fail. This, of course, while, as I said before, not pertinent
to the issue before this House, is offered as a suggestion which I
invite the bimetallists' and those who desire a safe and elastic
currency to think over.
I have not examined this matter in the light of constitutional
reflection, but if power can be found in the Constitution to
work out such a measure it would supply an elastic currency,
the one great need of the commercial and industrial interests of
our country. This matter, of course, is and ought to be an after
.consideration. The one great want of this country to-day is the
repeal of the Sherman act, and if good sense, patriotism, and the
obligations of public duty are to prevail there ought not to be a
single moment of unnecessary delay in reaching that end.