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The Bnslness Depression.—The Silver Question.

SPEECH
OF

HON. NELSON D I N G L E Y , JR.,
OF

MAINE,

IN THE HOUSE OF REPRESENTATIVES,
Thursday, August 24,1893.
The House having under consideration the bill (H. R . 1) to repeal a part of an
act, approved J u l y 14, 1890, entitled "An act directing the purchase of silver
bullion and the issue of Treasury notes thereon, and for other purposes"—

Mr. DINGLEY said:
Mr. SPEAKER: NO one can have failed to notice that in the debate
here and the discussions elsewhere on the pending proposition to discontinue the silver-purchasing policy, there has been a studious effort
to create the impression that this policy was inaugurated by the socalled Sherman act of 1890. The object is obvious. It is to fasten
upon the Republicans who supported that act whatever responsibility the country may place on the silver purchasing policy for the
existing industrial and financial distress.
There is not a gentleman within the sound of my voice who. does
not know that the silver-purchasing policy was inaugurated in 1878
over the veto of President Hayes and by the vote of a Democratic
House and a Republican Senate, three-fourths of the Democratic
Senators and Representatives voting to override the veto. The act
of 1890, styled the Sherman act, simply modified this policy, which
conld not then be repealed, so as to diminish some of its perils. Its
passage, too, warded off a free-coinage measure which had already
passed the Senate by nearly a solid Democratic vote. Very few of
the Republicans who supported the act of 1890 would have voted
for any original measure inaugurating the silver-purchasing policy.
The vote on the pending repeal bill, however, will bring to the
test the question of responsibility for the further continuance of the
silver-purchasing policy, now that its actual workings are known;
and the country can then accurately determine on what party jind
what Senators and Representatives the real responsibility rests.
In common with a majority of Republicans on this floor, I shall
vote for the discontinuance of the silver-purchasing policy inaugurated in 1878, and never intended to be permanent, not because I
believe it " principally" responsible for the existing industrial and
financial depression, although I believe that it has secondarily contributed to increase difficulties originated by another cnuse, but
because I am convinced tliat this policy obstructs an international
agreement on a coinage ratio, which I hold is the only way in which
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silver can. be given free coinage without driving gold out of circulation and bringing us to a silver basis, and because I regard it
wasteful and perilous in the near future. My desire for a prompt
discontinuance of this policy is properly intensified by the fact that
in view of the widespread belief that it is a potent factor in promoting the distrust whicli has caused our troubles, repeal will be
much more influential for good than it otherwise would be, because
of its influence on men's imaginations.
INFLUENCE OF SILVER-PURCHASING POLICT.

The discussions already had indicate a wide difference of opinion
here and elsewhere as to how much, if any, influence our silverpurchasing policy has had in bringing about our present difficulties.
The President and that wing of the Democratic party which
adopts his views on the currency question, hold that the silverpurchasing policy is the "principal" cause of our troubles. On the
other hand, that wing of the Democratic party which believes in
free silver coinage at the ratio of 16 to 1 by this country alone—
hitherto the head and body of the party—hold that this purchasing
policy has had nothing to do with bringing about the situation.
They even assert that the last Democratic platform which declared
that "the Sherman act of 1890 is a cowardly makeshift/' and which
demanded its "speedy repeal," was explained to them as meaning
that the act of 1890 was a "cowardly makeshift" for the free coinage
which would otherwise have been approved by both Houses of Congress, and that the platform was interpreted as a free-coinage declaration, in free-coinage States.
While I think nothing is clearer than that the silver-purchasing
policy did not cause the industrial distrust and consequent depression
which began to disclose itself near the beginning of the present
year, and increased from month to month, paving the way for and
even originating the financial depression which followed later,
yet there is strong reason to believe that this purchasing policy,
or rather the alarm abroad in consequence of the failure to maintain the gold-redemption fund which had been drawn, by the substitution of silver certificates and Treasury notes for gold in customs payments, below the hundred million mark that the law and
public opinion regarded as the danger line, did render the situation more serious by largely withdrawing foreign capital from this
country, thus so reducing loanable funds as to increase distrust,
wreck credit, promote hoarding, and bring about a money famine
of unparalleled proportions. At the same time I am confident that
the contributory share the silver situation has had in the present
difficulties is very much less than is generally supposed.
HOW SILVER CERTIFICATES IMPAIR THE GOLD REDEMPTION FUND.

I heard a statement made this morning that the trouble was that
under the Sherman law we were using the silver as a basis for money
at the bullion value rather than at its coinage value, and that redeemable in gold, and that under the act of 1878 we used it at its
coinage value rather than at its bullion value, and provided simply
for redemption in silver dollars; and that if we had continued that
policy we should have had no run on the Treasury for gold.
Now look at the matter a moment—because it is no use to blind
ourselves—look at a silver certificate issued on deposit of silver
dollars. You say it is redeemable only in silver dollars; but if, as
a matter of fact, it was not redeemable, indirectly in something
else than that it would have fallen to its bullion value within a
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short time after the amount of the issue had increased heyond what
the people required for constant use. What has maintained the
parity with gold of the silver certificate and the silver dollar from
1878 to the present time? Why, it was the fact that the Treasury
of the United States has received those certificates and dollars in
lieu of gold in the payment of duties.
Now, what difference docs it make whether you directly redeem
your silver certificates in gold or accept them in lieu of gold for duties ? It is gold redemption in either case, with this difference, that
the redemption by receiving them for gold duties is only good as long
as the amount of those silver dollars and silver certificates do not
bear too great a proportion to the amount that can be readily used
in payment of duties and the amount constantly needed in exchange.
As a matter of fact we have been drawing on our gold redemption
fund at both ends. The silver certificate has been preventing gold
from going into the Treasury, and the redemption of the Treasury
note has been taking gold out at the other end; and it mukes no
difference, so far as its effect on the fund is concerned, which form
of redemption is employed; in both forms it depletes the gold redemption fund.
Gentlemen ask what has been the trouble. Go and look at the
percentage of silver certificates and Treasury notes that have been
received into the Treasury from 1885 down to the present time in
the payment of go! d duties. Atfirstthere were almost none received,
because the volume of outstanding certificates was small, and the
contraction of national bank currency made a place for them. As
the volume swelled the number presented for redemption in payment of duties increased rapidly, until recently, when the currency
famine has obliged our importers to send to England for gold.
They have now nothing but gold to pay duties with, because they
can not get hold of currency; but that is only a temporary situation.
For the last( three or four years the importers have been paying a
very large proportion of ail the duties in either silver certificates
or Treasury notes based on silver. That is how the silver purchasing policy—not the Sherman act, but the purchasing policv, for the
Sherman act is better than the one which it supplanted—-has been
keeping gold out of and draining gold from the Treasury and affecting our financial situation. I think we had no trouble at all from
this purchasing law until last spring, but if you continue it in
force there is bound to be trouble in the future. We can not go on
buying silver and practically paying for it in gold without coming to disaster.
IMPORTANCE OF MAINTAINING GOLD REDEMPTION FUND.

I was in London, as it happened, last spring at the very time a
New York telegram appeared in the London papers that our gold
redemption fund had fallen below the one hundred million limit,
which, in the minds of the people of this country and of others,
seems to mark the dividing line between safety and danger, and I
had an opportunity of seeing exactly how that affected men there
who were dealing in American securities, and who had English
money invested in this country.
Mr. SIMPSON. Mr. Speaker, I am very much interested in the
gentleman's discussion. He said, as I understood him, that the
Government receives these certificates in lieu of gold.
Mr. DINGLEY. Yes, sir.
Mr. SIMPSON. Now, can not the Government use the same certificates in lieu of gold to pay its debts!
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Mr. DINGLEY. Well, that would bring us to the discussion of
the question as to whether when we have refused to pay our debt
and interest in gold it would not greatly injure our credit and oblige
us to pay a higher rate of interest whenever we should want to
borrow again, and whether it would not also tend to bring us to a
silver basis.
Mr. SIMPSON. The gentleman does not seem to understand my
question. If the Government receives those certificates in lieu of
gold
Mr. DINGLEY. Mr. Speaker, as I am now trespassing on the
patience of the House, I must ask the gentleman to wait uutil I get
through.
Now, I observed that while up to that time there had been very
little talk about American securities, though some had been sent
back, but probably for other reasons, yet on the very day that announcement was made that no steps would be taken to make that redemption fund good, and the suggestion even went out that we
might resort to silver payments, as my friend from Kansas has suggested, there was at ouce a panic among dealers in American securities; and by the very next steamers there was sent to this country
and sold in our markets a very large amount of such securities. As
the gold received for the same was withdrawn from this country
and returned to London the practical effect of allowing our gold
redemption fund to fall below the hundred million mark was to
take so much money from our loanable capital, contract credits, and
start a money famine.
Gentlemen have said, Is not the fact that a silver certificate is at
par with the gold dollar to-day evidence that there is no special
distrust in this country as yet as to the future of our currency 1
Certainly it is; although if we do not maintain our gold redemption
fund, no one can tell how soon distrust of the currency will arise
here; but English investors did take alarm last spring, and may do
so again.
THE ORIGINAL CAUSE OF DISTRUST.

The industrial distrust which began to show itself near the beginning of the year was evidently caused solely by the belief of those
engaged in manufacturing industries that the result of the elections
in November, which had placed the entire legislative, as well as
executive, power in the hands of the Democratic party, portended
an early overthrow of the policy of protection; ill accordance with
the Democratic platform. Manufacturers and merchants, therefore,
at once began to prepare for what they believed would be radical
changes that would supplant domestic with foreign goods. Enlargements contemplated were given up. Dealers' orders for goods
for another autumn were given slowly and guardedly. Raw materials for goods to be delivered another season were bought sparingly, and prices gradually forced down near to the point where
it was supposed they would be when the goods went into consumption. For example, Michigan washed wool, which sold last October
for 28 cents, was gradually forced down to 20 cents, because manufacturers expected to have to sell their goods on the basis of the
contemplated free wool tariff. Looms were stopped to reduce production, in view of the diminished demand.
No actual change in the tariff has as yet been made, but manufacturers and merchants have been preparing in advance for the
revolutionary changes which the Democratic platform portended,
and have been discounting in part the new tariff to come. When
apprehension of coming evil seizes upon men oftentimes the appre178




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hcnsion is worse than the realization. My friend from Missouri
[Mr. B A I I T H O L D T ] made a most admirable analysis of that trait of
the human mind which looks forward to what is thought to be
coming. The distrust in manufacturing circles which began in
December ahd J anuary, late in the winter, extended to financial circles. There can be no mistaking the fact that this industrial distrust and consequent depression was caused entirely by the proposed revolution in the tariff; although after this had gone on for
some months, the silver situation in the way I have suggested came
in to aid in intensifying the distrust, and convert industrial depression into a financial panic and money famine.
It is not possible to have a national election, conducted on the
issue of the overthrow of an economic policy that has prevailed for
thirty years, and given great prosperity to the country, result in
the complete triumph of a party pledged to such a revolutionary
change, without arresting production, stopping machinery, injuring
credit, and paralyzing business.
[Here the hammer leli.]
The' SPEAKER pro tempore (Mr. R I C H A R D S O N of Tennessee, in
the chair). The time of the gentleman has expired.
Mr. GEAR. I ask that the time of the gentleman be extended for
twenty minutes.
Mr. HULICK. Mr. Speaker, I would suggest that the time of the
gentleman be continued indefinitely so that the words of wisdom he
is giving us can be heard by every member of this House.
Hie SPEAKER pro tempore. The gentleman asks unanimous
consent that the gentleman from Maine be allowed to conclude his
remarks. Is there objection? [After a pause.] The Chair hears
none.
Mr. DIXGLEY. Mr. Speaker, I am very much obliged to the gentlemen and to the House, and will endeavor not to weary your patience.
WHAT WRECKS CREDIT.

It must be borne in mind that modern business, especially business
in a new country rich in resources like ours, inviting development,
is conducted largely, perhaps 90 per cent of it, on credit^ and that
confidence of men in each other, confidence in the continuance of
the conditions under which industries have prospered is the basis
of credit, essential to induce men to invest capital, and tlie inspiration of production, exchange, the employment of labor, good wages,
and business prosperity. Whatever impairs this confidence and promotes distrust arrests investment, wrecks credit, stops looms, puts
out the fires of forges, locks up money, deprives laborers of employment, reduces wages and brings the whole machinery of business
to almost a standstill, involving millions in financial ruin and misfortune.
This was exactly what the elections last November did in placing
in complete power a paTty pledged to overthrow our protective
policy; and while the present senseless, panicky condition of the
public mind and the money famine caused by fright can not long
hold their present intensity, yet we shall continue to feel industrial
distrust and depression, at least until it shall be definitely known
what, kind of a tariff the Democratic party will enact, and wages
and business shall adapt themselves to the changed conditions.
SOME OTHER EXPLANATIONS COXSIDEBED.

All other explanations of thd cause of the sad change from the
prosperity of one year ago to the adversity of to-day failto explain.
The gentleman from Missouri [Mr. B L A N D ] and the gentleman
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from Nebraska [Mr. BRYAN], representing that element in the House
which demands that this country alone shall undertake the free coinage of silver at the ratio of 16 to 1 of gold as the only remedy that
will cure, insist that the general distrust which has produced so
much mischief is the result of a conspiracy of bankers, notably
"Wall street or New York bankers, under the dictation of what they
denominate the gold bugs of England, who are seeking to overturn
silver, increase the value of gold, and make money out of the ruin of
the people.
The difficulty with the "conspiracy" theory is, first, that the distrust which prevails with such intensity is as deep in the ranks of
those who, like my friends from Missouri and Nebraska, make a
point of depreciating and ridiculing the views of the bankers of
New York and the country, as it is in Wall street; and secondly, that
no class in our community have so much to lose by the prevalence
of distrust as bankers. It must be remembered that hankers do business and make their profits mainly by loaning deposits, and that it
is essential to the banker that confidence in the future should be
preserved, because this maintains and increases the deposits, which
are the source of his prosperity and profits, and that distrust brings
disaster to him in greater degree, if possible, than to anyone else.
I have before me the New York weekly bank statement of August
5, 1893, and that of August 6, 1892; and as the New York bankers
are selected by our free-silver friends as the chief culprits in this
bank " conspiracy" to get up a panic to increase their profits, this
exposition of exactly how distrust has affected the New York banks
ought to serve to enlighten our understanding and dispel some of
our prejudices.
On August 6,1892, the New York banks had deposits amounting
to $528,462,300, and mainly because of these were able to loan to
the business men of that city $488,777,100. On the 5th of August,
1893, these deposits had been reduced to $372,945,200, a reduction
of $155;517,100, mainljr in the last five months, by the distrust which
had seized upon depositors. This large reduction of the deposits, on
which banks do business, compelled a reduction of the loans of the
banks to the extent of $80,024,600, and consequently a large reduction of their profits. In other words, the prevailing distrust has
caused a loss to the New York banks of nearlyfivemillions in interest
on deposits loaned, to say nothing of losses by failures of persons
to whom money had been loaned, losses directly brought about by
the prevailing distrust.
This shows that the only reason the New York banks were forced
to cut down their loans$80,000,000 was because the private citizens
who were accustomed to make deposits had withdrawn $155,000,000
of their deposits and put it away in their trunks and stockings.
I submit to my free-coinage friends 'that a decent regard to what
has been called "common sense" calls for a relegation of the "conspiracy" theory to the tomb which sooner or later claims theories
born of prejudice.
To the same tomb should be consigned the theory of the gentleman from Mississippi [Mr. HOOKER], reaffirmed by the chairman of
the Finance Committee of the Senate [Mr. VOOUHEKS], that the
banks have deliberately locked up the money of the country and accumulated a big reserve in order to bring about a pressure for such
legislation as they desire.
It is suggestive that almost at the same time that the banks were
being arraigned here for locking up money the Senator from Kansas [Mr. PEFFER] was arraigning them in 'the Senate for not locking up as much as the law requires as a reserve.
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If these gentlemen will hut look at the Ntfw York hank reports to
which I have referred—for it is the Now York banks which seem to
be regarded as the chief sinners—they will find that these banks had
about one hundred and fifty-one millions reserve on hand August 6,
1892, and only seventy-nine millions August 5,1893, fourteen millions
less than the law requires; so that as a matter of fact their available funds were loaned much more closely at tho latter date than
the former, when there was no difficulty in obtaining loans, probably
because they can not now further reduce their loans for the reason
that their customers can not pay their notes at maturity.
THE CURRENCY CONTRACTION THEORY.

The late Presidential candidate of the Populists in a recent address
affirmed that the distrust was caused by a contraction of the outstanding currency through " the persistent war on silver;w and several gentlemen in the course of this debate have reiterated substantially the same view.
The difficulty with this theory is that when this distrust began
and during its progress, the outstanding volume of currency in this
country was the largest absolutely and per capita ever known in
our history—nearly twice that of the five-year period before the
war. The volume of currency outside of the Treasury on the 1st
of August was over $1,600,000,000, or $24 per inhabitant, against a
volume of $10.23 in 1862, $18 in 1872, $22 in 1886, $23.45 in 1891, and
$24.32 on the first of January of the present year.
Since distrust was inaugurated in the face of such a large volume
of currency, the active circulation in use has been daily diminished
by the want of confidence, which has caused hoarding by the great
mass of the people, thus demonstrating that our trouble is not contraction of the outstanding volume of currency, but contraction of
the confidence which leads to the use of the abundant money in the
hands of the people.
This situation affords an object lesson which ought to be instructive to those gentlemen who assume that volume of outstanding
money necessarily measures prices and prosperity, and who are always ^'clamoring for a larger issue of money regardless of quality or
methods, and make it clear that it is money and its substitutes, including credits, used, and not money outstanding and hoarded, which
is the life-blood of business; and that the extent to which money and
its substitutes will be used in production and exchange depends
first on its good quality and stability, aud secondly, on the public
confidence in the industrial and financial future. Any amount of
currency beyond what is to be used in exchanges simply lies idle,
and is so much waste.
Inasmuch as we have to-day in our stock of currency six hundred
andfifteenmillions in silver money, of which five hundred and thirtyeight millions is full legal tender, purchased and used since what is
erroneously denounced as the demonetization of silver in 1873, against
only six hundred and four millions of gold (the amount of gold coin
in the Treasury being one hundred and three millions), an amount
several times as large as all the silver, including fractional silver,
coined in the eighty-one years from 1792 to 1873 (the coinage of silver
dollars having been only eight millions during this period), it must
be confessed that wheu gentlemen undertake to claim that we have
contracted our currency in the last twenty years by declining to
make a larger use of silver, they indulge in a license of speech
hardly consistent with the facts. At no time in our history did we
ever have so much silver per capita as a basis for money as we have
now.
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THE ODIO DEMOCRATIC CONVENTION.

The gentleman from Alabama [Mr. WHEELER], and several other
gentlemen on the Democratic side, have put forth still another
theory of the cause of the distrust which commenced near the beginning of the present year and has been growing in intensity ever
since. A theory, by the way, on which I notice by the resolution
adopted by that body, which was read the other day by my friend
from Ohio [Gen. G R O S V E N O R ] , the Ohio Democratic State convention
has taken out a patent. This theory affirms that the present situation "is the unfortunate legacy of Republican administration, and
the natural result of the McKinley tariff," etc.
When it is remembered that confidence and unexampled prosperity had existed under Kepublican policy for years and prevailed
as never before under the McKinley tariff till after it became known
that the elections of last November had resulted, for the first time
in thirty-two years, in the capture of the complete legislative as
well as executive power by the Democratic party, which had declared during the campaign that they intended to.overthrow our
protective policy and substitute a tariff for revenue only: and that
immediately after, the distrust which has caused our troubles began,
increasing in intensity as the Democratic administration has gathered
up the rems of Government and the time approached for the actual
application of Democratic theories to our tariff and finances, it must
require a large stock of what plain people call "gall" to euable
them to put forth in convention the theory that our protective
policy is the cause of the prevailing distrust.
No, Mr. Speaker, none of these alleged causes, which the imaginations of our free-silver friends have conjured up, have had anything
to do in bringing about the profound distrust, degenerating into a
senseless panic, which has brought about first the industrial and
then the added financial depression and currency famine which is
upon us. Even the silver-purchasing policy, inagurated in 1878,
illogical, unwise, and dangerous as I have always regarded it, had
nothing to do with the inauguration of the industrial distrust which
prepared the way for financial distrust, and only came in as a secondary and contributory adverse influence just at the time it did,
because distrust was already in the air, and the gold redemption
fund was suffered to fall below the hundred million mark without
any official announcement that it would be maintained.
I firmly believe that if the late House, in the closing days of the
last session, had concurred with the Senate in reaffirming the authority given by the act of 1875, to sell bonds to maintain the gold
redemption fund, and the Secretary of the Treasury had announced
to the world that the fund would be maintained at all hazards,
there would have been no distrust of our securities in Europe, and
we should have been saved from the money panic which has caused
so many losses, although the industrial depression caused by the
threatened tariff revolution would have remained. And I also believe that the announcement of this policy would have made it unnecessary to sell a bond.
THE BLAND AMENDMENTS.

Mr. Speaker, injurious and even dangerous as I regard a further
continuance of the silver-purchasing policy under which the Government has |>urchased since 1878 448,05*,000 ounces of silver, equal to
the entire product of the world from 1860 to 1870, paying therefor
$140,000,000 more than it can be bought for now; andunder which
in payment for silver $334,274,236 in silver certificates. $57,000,000
of silver dollars, and $147,000,000 Treasury notes, which must be
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maintained at par, the first by indirect redemption through their acceptance in lieu of gold for duties, and the latter by direct redemption also, a process which saps the gold redemption fund at both
ends and is immensely increasing the difficulties of maintaining our
currency at par; yet either of the amendments proposed by the
gentleman from Missouri [Mr. BLAND] to the pending bill—the
only amendments in order—if adopted, would make the measure far
worse than the existing law.
The amendment to substitute the Bland act of 1878 for the act of
1890, would leave the purchasing policy to stand without the additional protection afforded by the Sherman act. The act of 1878
provided for the use of silver at its overvalued coinage value. The
act of 1890 provided for its use at its market value in gold. The
act of 1878 provided no means of maintaining the parity with gold
coin and certificates issued, except its acceptance for duties and taxes,
which would be insufficient when the amount outstanding should
be too large. The act of 1890 made it the duty of the Government
to maintain its parity by redemption in gold if necessary. If we
must continue the silver-purchasing policy then the act of 1890 is
far preferable to the act of 1878.
The several amendments establishing free coinage at a changed
ratio—the highest 20 to 1—are unsound and unwise from any point
of view. If the theory of the friends of free coinage, that this Government alone can maintain any ratio it desires, without regard to
the market ratio, is sound, then assuredly there is no excuse in departing from the ratio of 16 to 1 and adopting the ratio of 20 to 1,
and thus wasting an immense amount of silver. Indeed, the proposition itself is practically a surrender, by those who vote for it,
of the pet theory on which free coinage at the ratio of 16 to 1 has
always been advocated.
On the other hand, if the theory of those who believe that free
coinage must be near the market ratio of silver, and can be secured
only by an international agreement, is sound, then the ratio of 20
to 1, when the market value of the bullion is 28& to 1, would be as
fatal as 16 to 1.
The adoption by us alone of a changed ratio of 20 to 1 would present a new obstacle in the way of an international agreement, for
it can hardly be supposed that other nations would take kindly to
our attempt to fix a ratio alone. Obviously, if we are to endeavor
to secure an international agreement, we should not undertake to
fix any ratio alone.
Again, the proposition to alone change our ratio to 20 to 1 would
instantly demonetize the $419,334,450 in silver coin and silver certificates which we have coined or issued, and thus result in such
an instantaneous contraction as would work ruin until we could
recoin these dollars at the increased ratio at a cost of nearly
$90,000,000.
Surely no one, on reflection, should favor such a proposition.
FREE COINAGE AT 16 TO 1.

Mr. Speaker, the first, and I presume only serious substitute which
the gentleman from Missouri [Mr. BLAND] proposes to ask a vote
on, is the proposition for this Government, single-handed, to immediately undertake the free coinage of the world's silver at the ratio
of 16 to 1 of gold, when the market value of the bullion to be coined
into the proposed full legal-tender dollar is only 28 £ to 1.
He, and the other gentlemen who have favored this free coinage
substitute, insist that if we should do this, it would immediately
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result in permanently advancing by this simple act of legislation
all the world's existing silver and all that may be mined hereafter
from its present price of 72-J cents per ounce to $1.29 per ounce, and
thus make 16 ounces of silver equal in value everywhere to one
ounce of gold.
Now, if this would bring about such a permanent result so easily,
and give us our due share of gold as well as silver in our currency—
all floating at a parity—it would indeed be a great consummation,
which would be welcomed with thanksgiving, for thereason that this
is what I, what most of the people of this country are seeking, what
both the Republican and Democratic national conventions declared
for in 1892, viz, the full legal tender coinage of both silver and
gold in such a manner as will make the intrinsic value (t, <?., the
bullion value) of the coins of each metal equal, and will permanently preserve the parity of all our money and make all as good as
gold.
I have said that this is what both political parties in 1892 declared
to be their silver platform—the significant difference, however,
being that the Republican declaration was in accordance with a
majority of the Republican votes in each House <?f Congress since
1878, and the Democratic declaration exactly the reverse of the
record of a majority of their votes. The gentleman from Missouri
[Mr. BLAND] alleges that he was assured the Democratic platform did
not mean this; but nevertheless the natural construction of the
words is against him, unless we assume, as is too often the case,
that the language of Democratic platforms is intended, as .Talleyrand said of the language of diplomacy, to conceal rather than
express ideas. I have learned for myself that the acts of a party
are always more reliable indications of their purposes than their
platform professions. I hope that in this case, however, that will
nofc eventually prove true.
So we are all bimetallists, in that we desire to leave the free coinage of both silver and gold at such a ratio that will permanently,
maiutain the intrinsic value of the coins of both metals equal, ana
thus give us both metals in our currency.
The difference between us is that you think that we can do this
alone by establishing free coinage at a ratio of 16 to 1, when the
market value is 28 to 1; and we think that this course would rapidly
carry us to silver monometallism, give us a single silver standard,
and drive out our gold, and that the only way to secure bimetallism
is through an international agreement.
The burden is certainly on you who propose, under present conditions, to take the great leap into the dark proposed by the gentleman from Missouri, to give us not assertions, but absolute proof from
experience and the conclusions of intelligent research, that this important step will result as you assert it will.
It is a very serious fact against you that none of the great authorities in bimetallism in Europe like Cernuschi, or in this country
like Horton, almost none of the great financiers, few of the men
who have made the subject a study for a lifetime, few of the men
who are regarded as successful business men believe that the Uuited
States alone can do this. It will not answer to reply that they are
gold bugs, whatever that may mean. It seems to them as it seems
to me that unless some new alchemy has been discovered which s«;fcs
aside known laws of production, distribution, and exchange, this
free-coinage proposition proposes a fearful leap into the dark in the
face of reason and experience, and that if adopted it would result in
overwhelming disaster.
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T E E A P E O FllAXCB.
H X ML F
So far as I have heard or read, the sole support from experience
Eresented by those who take this view, is that France, single*
anded, from 1803 to 1865, and the Latin Union (France, Belgium,
Switzerland, Italy, and Greece) from 1865 to 1874, maintained free
coinage of silver at the ratio of 15 J to 1 of gold in weight, without
driving out gold.
Even assuming that they did this, which is not strictly correct,
we must know what was the state of silver production and the silver market during this period before we can accept this as a case
parallel to what our own would be under existing conditions.
Wo find that during the period from 1800 to 1860 the production
of silver in the world did not increase. It was about 28,000,000
ounces per anuum in 1800 and only 29,000,000 per annum in 1860 and
the previous five years, reaching 35,000,000 in 1865, showing that
there was no sufficient reduction in the cost of production to make the
profits of silver mining large enough to increase the supply; and
that for these reasons silver bullion was steady and unchanged at
very near the French ratio established in 1803, at what was then
the actual market ratio of silver and gold.
But when the production increased to only 63,000,000 ounces in
1874, and Germany ceased to coin silver for anything more than
subsidiary coins, and even began to sell as bullion her discarded
silver coins, France and the other states of the Latin Union found
so much silver coming to their mints to be coined that they were
obliged to discontinue the unlimited free coinage of silver, and in
1878 to close their mints altogether to the coinage of full legal-tender
B i l v e r , and not a dollar of new full legal-tender silver has been
coined since.
Now when the five countries of the Latin Union were forced to
discontinue free coinage in order to prevent going to a depreciated
silver standard, the world's annual production ot silver was only
65,000,000 ounces, and silver was worth but little less than $1.29
per ounce in the markets of the world. Yet this small difference was turning silver to the mints of the Latin Union, and France
and the other states gave up the fight to maintain silver by free
coinage. It is the almost universal testimony of French statesmen
and financiers that five years more of unlimited free coinage of silver, even with the production of 1875-1880, would have depreciated
the French currency, driven out gold, and made France a monometallic nation, and that silver.
I submit that the example of France conclusively shows that the
United States alone can not maintain the free coinage of silver at
a ratio of 16 tol, under present conditions, without going to a silver standard and driving out gold. France and the Latin states
fave up the experiment when the production of silver in the world
ad reached 65,000,000 ounces, and silver had declined only to $1.20.
Inasmuch as in the last fifteen years the annual silver production has
steadily increased from sixty-five to one hundred and fifty-two millions ounces last year—more than doubled—in the face of a decline
of silver from $1.20 per ounce in 1878 to $1.09 in 1885, 934 cents in
1889, and 85 cents in 1892, surely there is nothing in France's trial
and final failure to maintain free coinage under the slight increase
of production before 1878, to justify the conclusion that we can now
support free coinage alone.
It must be borne in mind, too, that France is a country which
uses coin mainly for the transaction of her business; that she has
few banks of discount and deposit, and no savings banks, and hence
she uses more.actual money per capita than other commercial na178




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tions that employ checks and other substitutes for money; yet she
maintains her seven hundred millions silver only with a gold support of eight hundred millions in precisely the same way as we should
maintain our six hundred and fifteen millions of silver (five hundred
and thirty-eight millions of it legal tender) with only six hundred
and four millions of gold, if we should to-day discontinue silver purchases and stop the further coinage of silver dollars and wait for
other nations to cooperate with us.
OAK WE BUT THE WORLD'S SILVER f

But let us test the soundness of the free-coinage plan to have the
United States buy all the silver of the world that comcs to us and
pay $1.29 per ounce in merchandise or gold,—for that is practically
what the free-coinage proposition is so long as we are able to maintain silver and gold at a parity.
We are told that when we offer this price for the world's silver
then the market price of that metal the world over will at once rise
to $1.29 and no foreign silver will come to us. We shall have, it is
said, only the domestic product (58,000,000 ounces last year) to
buy.
Even if this were true, what do you suppose the domestic product
of silver would be in five years on an offer of $1.29 per ounce, when
it has increased from 24,000,000 ounces in 1875 to 58,000,000 ounces
in 1893, on a falling market going as low as 85 cents per ounce ? Will
anyone confidently tell me that it will not double in three years and
quadruple in five years!
But there must be silver to come here from abroad for the reason
that foreign countries now, at the present low price, produce more
than the rest of the world wants, and are constantly increasing
their product. With the increased price offered, production would
rapidly increase in Mexico, South America, and other Bilver countries, and we should find an enormous quantity of silver dumped
upon us.
Then where else could the 38,000,000 ounces per annum that India
has coined go next year, than to our mints, now that India has
stopped free silver coinage?
I notice that there was imported last year $17,000,000 of foreign
discarded silver coins. How much discarded foreign coinage would
come here next year at an offer of $1.29 per ounce f
It seems to me surprising that, in view of such facts, anyone
should entertain the belief that we could enter single-handed upon
free silver coinage at 16 to 1 and not soon find it impossible to
maintain at par with gold the immense amount of silver that would
be poured upon us; and as soon as we could not do so then our
fold would leave ns and we should go to a depreciated silver stanard and become a silver country like Mexico, China, and the
States of South America.
I f t h a t i s t h e object, if the purpose is to drive this country to
silver monometallism and a silver basis, then I can understand the
scheme.
THE OLD " F I A T " IDEA.

When I heard the gentleman from Nebraska ("Mr. B K Y A N ] announce that this Government can select any coinage ratio that it
desires and maintain the two metals at parity by its fiat I saw at
once that the same old greenback delusion which prevailed fifteen
years ago,—that the Government stamp is all that is necessary to
make money and maintain it at par with gold, without any direct
or indirect redemption or intrinsic value,—is really at the bottom of
the free silver crusade now going on.
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I could not help thinking that if this theory he true then it is a
pity to use 4i2£ grains of standard silver to make a dollar when
half that weight, a quarter, and even less silver, or a bit of paper
costing a tenth of a cent, will answer just as well.
It is the fallacious idea that the Government can make anything
good money by simply stamping itr-tlie idea that a Treasury note or
reenback is money of final payment, which does not need to be reeemable in full value coin, instead of simply a promise to pay money
of full intrinsic value—that is at the bottom of the denunciatory
rhetoric which we hear so much of whenever the currency question
is discussed. When we hear men denouncing the Government for
paying its bonds in gold instead of depreciated greenbacks in 1869,
we know that they have got it into their heads that the greenback is
money of final payment, and that the Government is not under obliations to redeem it in gold; otherwise nothing could be saved by
estroying our credit. When it is fully understood that both bond
and greenback are simply promises of the Government to pay money
of intrinsic value, promises that must be redeemed,—then all the
crude ideas and wild talk about the currency will cease.
WHY NOT A BATIO OF 16 TO 1.

The only reason that we can't have free coinage of silver at a ratio
of 16 to 1 of gold, as our fathers once had, is that when our fathers
did this, 16 ounces of silver would buy 1 ounce of gold in the
markets of the world, and that is why they fixed that ratio.
Now 16 ounces will not buy 1 ounce of gold. In process of time
there have been such improvements in silver mining and in separating the bullion from the ore that it costs less to produce silver
than formerly, and it requires more than 16 ounces of silver to
buy 1 ounce of gold. So long as it does, so long as the market
price of silver for any cause is considerably less than this ratio to
gold, especially where the difference is so much as it is now, it is
useless to talk about this country alone maintaining gold and silver
at a parity on a ratio of 16 to 1 by free coinage.
I am a bimetallist because I think I see an advantage in that
system; but I see no other way of reaching bimetallism and securing the unlimited use of both metals under free coinage than
by an international agreement on a coinage ratio (which must be
near the actual market ratio) among enough commercial nations to
exercise a strong influence on the market and hold the price steady;
for there is no doubt that a combination of several strong commercial nations can do this, at least until there are important changes
in cost of production of either money metal, by first making a common coinage ratio that is substantially the market ratio of bnllion.
HAS SILVER DECLINED?

We are told that silver has not declined, but that gold has advanced 40 or 50 per cent in the last twenty years; and to prove
this the fact that prices of merchandise have declined; estimated
in gold, is presented as a demonstration of the operation. It is
even said that prices estimated in silver have changed but little
since 1873, when our currency was depreciated.
Now, everybody knows that the cost of production of most merchandise has been reduced by labor-saving devices and greater concentration of industries, and therefore that prices ought to be lower;
and if it be true that prices, estimated in silver, have not declined,
it is clear that since 1870 silver must have fallen because of a decline
in cost of production.
Mr. MARSH. Will the gentleman yield for a question?
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Mr. DINGLEY. I will yield for a question, although I prefer not
to do so, as I am using the time of the House.
Mr. MARSH. Has not the nonuse of silver during that period of
time had something to do with its depreciation in price 1 Let that
go with your statement, because it is important to be considered.
Mr. DINGLEY. Even if it were true that less silver is used now
than when silver commanded $1.30 per ounce (which is not the
fact), that would have no effect on the cost of production.
The simple fact that the production of silver, after having been
substantially stationary at about 28,000,000 ounces annually from
1800 to 1865, with the market price about $1.30 per ounce, has since
1878 more than doubled in the face of a constant decline to 85 cents
er ounce, proves beyond question that the cost of production lias
een greatly reduced, for surely the production would have increased
if the lower price had not afforded the mine-owners as great or greater
profit than the old price did twenty years ago. I may also call attention to the fact that in 1892 the world used a much larger amount of
silver per capita than in 1860 or 1875. In 1860 there was used in the
arts and for money only 29,000,000 ounces of silver, for that was the
entire production, while in 1892 the world used more than 140,000,000
ounces of silver. Even for money purposes the United States and
India alone used 102,000,000 ounces of silveT, which was nearly two
and a half times the entire production (43,000,000 ounces) and use of
silver for both money and in the arts in 1870.
Let me again call attention to the enormous increase of production of silver in the face of a declining price—the stern fact with
which we have to deal—as shown by the tables of Dr. Adolph Soetbeer, than whom there is no higher authority on the production of
gold and silver:
Average production of gold per

annum.

Before 1850
1850 to 1870
1870 to 1892
1802

ounces.. 750,000
do.... 6,000.000
do.... 5,750.000
do.... 6,328,272
Average annual production of silver.

1800 to 1860
1860 to 1870
1870 to 1880
1892

ounces.. 28,600.000
do.... 48,000, 0 0
0
do.... 80,000,000
do.... 152,000,000
THE PRINCIPLE OF BIMETALLISM.

The essential principle of bimetallism laid down by Hamilton in
his celebrated report, on which Congress in 1792 fixed the ratio of
silver to gold at 15 to 1, was that the coinage ratio must be the
equivalent of the bullion ratio in the markets of the world. After
a careful investigation he found that the bullion ratio was in fact
on the average 15 to 1, and for that reason he recommended that
ratio, and Congress concurred.
In 1834 and 1837, finding that in consequence of a slight deviation
of less than 5 per cent of the coinage ratio from the bullion ratio,
this country was deprived of gold, Congress revised the ratio and
finally made it 16 to 1. This proved to be a slight deviation from
the actual ratio which deprived us of a large portion of our legaltender silver.
The principle of bimetallism from the beginning has been, as I
have already said, to make the coinage ratio the equivalent of the
bullion ratio in the market, because it never occurred to our fathers
that they could retain both legal-tender gold and silver in our coin
age if silver was overvalued or undervalued. Yet, here to-day, in
the face of the fact of the great change in the production and cost
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of induction of silver in the last twenty years, we find gentlemen
proposing to authorize the free coinage of legal-tender silver at 16
to 1, when the market value is 28^ to 1, and actually comforting
themselves with the idea that they are imitating "the fathers!"
TUB FUTURE OF SILVER.

It is probable that the price of silver has recently gone below the
cost of production, and therefore that within a year or two there
will be an adjustment of the market price of silver at a higher price
than that of to-day, but one conformable to the laws of demand
and supply and cost of production.
This situation, it seems to mo, will pave the way for an international agreement on a ratio for the coinage of silver as well as
gold as full legal-tender money. But I have no hope of such an
agreement until we stop purchasing silver, by which policy we
have been lifting from other nations burdens on account of the silver situation in which they should share, and abnormally stimulating production.
THE POOB MAN'S DOLLAR.

I have frequently heard during this debate that gold (in which
term of course is included all currency at par with gold) is the rich
man's money, and silver (t. e., the silver dollar of 412£ grains, intrinsically worth three fifths as much as the gold dollar and good
for no more than that under free coinage of silver at 16 to 1) is the
poor man's money. I stand here to say that no vote of mine shall
be given that will provide for the poor mau a less valuable dollar
than is provided for the rich mau. The laborer's wages are paid in
dollars, and no kind of a dollar that is worth less than a gold dollar is his due. And those legislators who, under the guise of benefiting the laborer or farmer^ enact currency laws which depreciate
the currency ate doing all in their power to injure the men whom
they pretend to be specially caring lor. They seem to forget that
any increase in the price of the farmer's products caused by depreciating the money in which it is measured can do him no good—in
fact will do much harm—because it increases more than correspondingly the prices of what he has to buy.
Even the suggestion that a depreciation of the currency will make
it easier to pay debts has little force, for the reason that the average time that private debts continue in this country is only uine
months, and every new debt must be just as much larger as the currency is depreciated. The chief use of money is in exchange, and
not in debt paying.
The prosperity of the country, of every citizen, whether rich or
poor, laborer or employer, is largely dependent upon a sound currency, in which every dollar, whether gold or silver or paper, shall
be as good as gold.
CURRENCY POLICY OF THE FUTURE.

If the silver-purchasing policy should he discontinued, as it
should be, then it will be the duty of this Congress to go forward
and establish a new and safe policy for providing our growing business and population with the increased volume of currency required
from time to time in our transactions.
The immediate passage of the bill to allow national hanks to is
sue circulating notes to the par value of their bonds deposited as
security would aid materially in meeting the dearth of currency
caused by hoarding, not only by adding twenty millions of safe
money at onoe to the circulation, but also by the influence on men's
imaginations of such an addition to our currency at this time in sat1*8




16
isfying thein that there is no further necessity or excuse for hoarding.
And whatever else shall he done, it is of vital importance that
steps should he taken to maintain our gold redemption fund constantly; at least at the one hundred million mark.
But great care should he taken in devising a wise currency policy for the future, for objectionable as is the silver-purchasing
policy, even with the wholesome restrictions of the act of 1890, it
would be far preferable, of course, to free silver coinage or the
old wild-cat, State-bank system. The plan to restore the old Statebank currency, which before the war proved so unsatisfactory and
expensive, should be resisted by every friend of sound money. Let
us nope that such a retrogade step will never be taken.
Why men who have so bitterly opposed our national-banking
system, which secures a uniform bank currency amply secured, as
good in Georgia as in New York, as current in Maine as in Louisiana—a currency which never subjected the people to a dollar's loss—
should now favor State banks of issue, giving us forty-four different kinds of bank notes under forty-four different systems, some
good, and more vicious, after the immense losses and sad experiences we had with our old State-bank systems before the war, is
what I can not understand.
Let me indulge the hope, Mr. Speaker, that whatever Congress
may do (and it must adopt some policy to provide currency for the
future) it will first take care to make every dollar of it as good as
gold; and secondly, that not a dollar will be allowed to be issued
by authority of any State, but all shall be issued under one uniform
system and under the authority and control of the nation. [Applause.]
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