the same, its own immediate liabilities, payable in gold, were increased to $830,000,000. To the above sums were to be added the issues, $700,000,000, of State Banks, bankers, and trust companies, serving as money, the aggregate being $3,400,000,000, all resting possibly upon an assumed provision of $100,000,000 in gold, the reserves of the Government, such sum by drafts upon it being, at one time, in 1894, reduced to the pitiful sum of $41,348,181. Such was the financial structure which Mr. Sherman above all others contributed to rear, to the support of which he seems to be fully committed.

Another purpose of Mr. Sherman was to increase the value of silver in order, in concert with other nations, to maintain the two metals at their legal parity. Why should we wish to increase the value of silver in order to maintain the parity of two metals, one of which is never again to be used as money? As silver is never again to be used as money, the lower the price, from reduced cost, the greater the general welfare, from the wider use in the arts of so valuable an article. With the same sense Mr. Sherman might call for a convention of nations to restore the price of copper to the old figures in order to bring it into use as money and maintain its 'parity with gold."

The third purpose of Mr. Sherman, which will be considered further on, was the establishment of "Bi-metallism."

The effect of the large increase, due to the act of 1890, of Government notes, for the retirement of which no provision was made, which largely served as the reserves of banks, and were greatly instrumental in drawing gold from the treasury, was to increase the apprehension which had prevailed, and which became so intense as to lead to the act of Nov. 1, 1893, for the repeal of the preceding This act failed to bring the expected relief, from the following recitation it contained:

act.

It is hereby declared to be the policy of the United States to continue the use of both gold and silver as standard money, and to coin both gold and silver into money of equal intrinsic and exchangeable value, such equality to be secured through international agreement, or by such safeguards of legislation as will insure the maintenance of the parity in value of the coins of the two metals and the equal power of every dollar at all times in the markets and in the payment of debts. And it is further declared that the efforts of the Government should be

steadily directed to the establishment of such a safe system of bi-metallism as will maintain at all times the equal power of every dollar coined or issued by the United States in the markets and in the payment of debts.

"The chief merit of this law," said Mr. Sherman, "was that it suspended the peremptory coinage of the silver purchased under it into silver dollars which could not be circulated, but were hoarded in the Treasury at great cost and inconvenience. It required the monthly purchase of a greater amount of silver than before, but that could be held in the form of bullion, and could be paid for by treasury notes equal in amount to the cost of the bullion, the whole of which was held in the Treasury as security for the payment of the notes. If silver bullion did not decline in market value it could, if necessary, be coined without loss, and thus the parity of the notes with gold could be readily maintained according to the declared policy of the law.

As Mr. Voorhees, Chairman of the Committee of Finance of the Senate, reported the bill for the act of 1893, which was supported by great numbers of members of Congress as pronounced silver men as himself, the conclusion is irresistible that it was from the conviction that its repeal was to be speedily followed by one for unlimited coinage of silver.

For the repeal of the act of 1890 the vote in the Senate was 43 to 32, and in the House 194 to 94. Mr. Sherman, then member of the Senate, voted for the repeal.

THE LATE ADMINISTRATION.

The situation, already sufficiently set forth, may again be briefly stated - $830,000,000 of Government notes, all payable in gold, not one of which came into being as an instrument for the distribution of merchandise, the only reserves provided for their conversion into coin being the assumed amount of $160,000,000, the amount at times falling below one-half that sum. Of the whole amount some $500,000,000 are legal tender in the payment of all debts, public and private, and serve as the reserves of the National Banks, the issues of which, with those of the State Banks, bankers, and trust companies, made an aggregate of $3,400,000,000. The gravity of the situation is greatly increased by the general assumption that no substantial reform is required; that all that is wanted is the maintenance of the status in quo; that no danger is to be feared so long as the amount of government money is not increased. There is little recognition of the disturbing and disastrous effect in affairs of the issue, on a colossal scale, of debt to serve as money. So long

as there is none no measure of reform will ever be entered upon. Such was the position of the late administration; such that of the present one. That of the former was well set forth by the late Secretary, Mr. Carlisle, in a circular letter addressed by him to Mr. J. J. Helm, of Kentucky, under date of Sept. 15, 1896:

Your letter asking how the silver dollars, which contain a quantity of bullion commercially worth only about 53 cents each, are maintained at a parity with gold, notwithstanding the fact that the Government does not directly redeem them, or the certificates issued upon them, in gold, is received, and as a great many inquiries upon the same subject are addressed to me daily from different parts of the country, which it is impracticable to answer in detail, I will take advantage of your favor to answer them all at once :

All the standard silver dollars issued from the mint since the passage of the act of 1878, now amounting to more than $433,000,000, have been coined on public account from bullion purchased by the Government, and are legal tender in payment of all debts, public and private, without regard to the amount, except when otherwise expressly stipulated in the contract between the parties.

The Government has made no discrimination whatever between the coins of the two metals, gold having been paid on its coin obligations when gold was demanded and silver having been paid when silver was demanded.

Under this policy the coinage has been so limited by law and the policy of the Treasury Department that the amount coined has not become so great as to drive the more valuable coin, gold, out of use, and thus destroy the basis of our monetary system; and so long as the two metals are of unequal commercial value, at the ratio established by law, this limitation upon the coinage is, in my opinion, absolutely essential to the maintenance of their parity in effecting exchanges.

If the limitation were removed, confidence in the ability of the Government to preserve equality in the exchangeable value of the coins would be destroyed, and the parity would be lost, long before the amount of silver coinage had become really excessive.

With free and unlimited coinage of silver on account of private individuals and corporations, the Government would be under no moral obligation to maintain the parity, and, moreover, it would be unable to do so, because the volume of overvalued silver forced into the circulation by a legal tender provision would soon expel gold from the country, or put such a premium upon it that it would be impossible to procure and hold in the Treasury a sufficient amount to provide for the redemption of silver on presentation.

In order to maintain the parity under such conditions, the Government would be compelled from the beginning to exchange gold for silver dollars, or their paper representatives, whenever demanded, just as it now exchanges gold for its own notes when demanded; and as the coinage of silver dollars would be unlimited, and therefore constantly increasing, a point would soon be reached where it would be impossible to continue the process of redemption.

The implied obligation of the Government to preserve the value of the

money which it coins from its own bullion and for its own use, and which it forces the citizens to receive in exchange for their property and services, has been supplemented by two statutory declarations, which substantially pledge the public faith to the maintenance of that policy.

The act of July 14, 1890, after providing that the Secretary of the Treasury should, under such regulations as he might prescribe, redeem the treasury notes issued in the purchase of silver bullion, in gold or silver coin at his discretion, declares that it is "the established policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law," and the act of Nov. 1, 1893, again declares it to be "the policy of the United States to continue the use of both gold and silver as standard money, and to coin both gold and silver into money of equal intrinsic and exchangeable value, such equality to be secured through international agreement or by such safeguards of legislation as will insure the maintenance of the parity of value of the coins of the two metals and the equal power of every dollar at all times in the markets and in the payment of debts.”

It is not doubted that whatever can be lawfully done to maintain equality in the exchangeable value of the two metals will be done whenever it becomes necessary, and although silver dollars and silver certificates have not, up to the present time, been received in exchange for gold, yet, if the time shall ever come when the parity cannot be otherwise maintained, such exchanges will be made.

It is the duty of the Secretary of the Treasury, and of all other public officials, to execute in good faith the policy declared by Congress, and whenever he shall be satisfied that the silver dollar cannot be kept equal in purchasing power with the gold dollar except by receiving it in exchange for the gold dollar when such exchange be demanded, it will be his duty to adopt that course.

But if our present policy is adhered to, and the coinage is kept within reasonable limits, the means heretofore employed for the maintenance of the parity wilł doubtless be found sufficient in the future, and our silver dollars and silver certificates will continue to circulate at par with gold, thus enabling the people to use both metals instead of one only, as would be the case if the parity were destroyed by free coinage.

Under the acts of 1878 and 1890 more than 433,000,000 of silver dollars, said the Secretary, had been coined, a large amount of silver bullion purchased under the act of 1890 remaining in the Treasury as bullion and represented by notes. At the time of his circular letter the Government made no difference whatever between the coins of the two metals. As the coinage of silver had been on account of the Government, the amount had been so limited that it had not, the Secretary declared, driven the more valuable metal, gold, out of circulation, thus destroying the basis of our monetary system, the parity of the two metals being maintained. Thrown open to the public, the

Government would be under no obligation to, nor could it, maintain such parity. The effect would be that the least valuable would drive the most valuable out of circulation, or raise its price so high as to put it beyond the reach of the Government. The implied duty to preserve the parity of all money issued by it was, said the Secretary, supplemented by the acts of 1890 and 1893, both of which have been sufficiently described. The act of Jan. 14, 1875, for the resumption of specie payments, recited that, "to enable the Secretary of the Treasury to prepare and provide for the redemption in this act authorized or required, he is authorized to use any surplus revenues, from time to time, in the Treasury not otherwise appropriated, and to issue, sell, and dispose of, at not less than par, in coin, either of the descriptions of bonds of the United States, described in the act of Congress, approved July 14, 1870, entitled "An act to authorize the refunding of the National Debt." With the Secretary provision for the maintenance of the parity of all the issues of the Government was made by the above act and by no other. When he became satisfied that the silver could not be kept equal in purchasing power to the gold dollar except in receiving it in exchange for the gold dollar, such exchange would be made, the parity of the metals being thereby maintained. If his position was a correct one, then there should still be a steady increase of government money of some kind to meet the wants of the people increasing at the rate of 1,600,000 annually. Assuming that the proper amount of money in actual circulation would be $25 a head, the annual increased amount required would equal $40,000,000, which might be in the form of silver represented by notes, the only care being that the amount should not exceed the wants of an increasing population. Such ratio being preserved, there would be no difficulty in maintaining without further provision of reserves the value of the whole mass of our currency at the par of gold. Of course the fallacy arose from the assumption that value, either intrinsic or representative, was no necessary attribute of money.

The purpose of giving in this connection the circular letter of the Secretary is to show the position of the sound-money wing of the Democracy, the other, and the dominant one, being fully committed to the free and unlimited coinage of silver at the old ratio. From the former no help is to be expected for the reform of the currency,