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balances arising in the domestic trade of the country is determined and discharged. The amount daily arising at the present time averages about $14,000,000, the exchanges daily taking place equalling $200,000,000. The first sum measures that required in the domestic trade of the country, creditors at the Clearing Houses one day being debtors the next. Of course a much larger sum would under all conditions as a matter of caution be maintained. Should we return to a normal system, the amounts required at the Clearing Houses would be greatly reduced. With such, no considerable balances to be discharged in gold could arise in the foreign trade of the country, the instruments of expenditure never exceeding the means of the people. Up to a comparatively recent date the average amount of gold held by the Bank of England as the reserves of all the issuers in the United Kingdom, their issues largely exceeding those of our own institutions, was about $110,000,000, or, say, £22,000,000. This has been lately largely increased, in common with the action of all the great Continental powers, in view of military and political complications. With an adequate system $100,000,000 in gold would be ample for all the purposes which, with us, it would be called upon to serve. With it we could presently discharge from use some $500,000,000 of gold, assuming the amount in the country to be $600,000,000; and an equal nominal amount of silver, the whole to be applied to production and distribution. As the world's stock of gold exceeds $4,000,000,000, and as the annual product, rapidly increasing, exceeds $200,000,000, our own share exceeding $50,000,000, and as with us gold money has but one use, to serve as the reserves of the issuers of paper money, we have no more reason to trouble ourselves about the adequacy of the amount than about the adequacy of rainfall, or of the vital air, to meet the wants of our increasing numbers; and no more concern about the restoration of silver as money than that of old mechanical contrivances long since relegated to the scrap heap.

We have briefly summarized the laws and attributes of money as illustrated by our history a history which fortunately has solved every question that can arise in reference thereto. At the outset bi-metallism was attempted, to fail with the attempt. Thereafter no thought of the reconciliation of the coin value of the two metals was ever entertained. For forty of the first years of our existence as a people silver was our proper metallic money. In 1834 gold,

by its deliberate debasement, took the place of silver. Neither metal, while serving as the standard of value, was ever the instrument, on a large scale, of exchange. In 1830, for the first time. from the establishment of the Government, attention was turned to the subject, and on the 23d of December of that year a special committee of the House, of which Campbell P. White, a member from the city of New York, was chairman, was directed to inquire into the expediency of adopting as our own the coins of the newly established Spanish-American Governments, the people of which were the great producers of the precious metals; and also to inquire whether any additional provisions were necessary in relation to the coinage of foreign silver at our own mints. The committee reported, February 23, 1831, that of coins having a value of $37,000,000 that had issued from our mints, of which $27,000,000 were silver, only about $7,000,000 in value of the latter were in circulation; $4,000,000 being in the hands of the banks, the coin reserves of which equalled $22,114,917; and about $3,000,000 in the hands of the people. The total amount of metallic money in their hands did not exceed $5,000,000, or 30 cents per head. Of the gold coin, $9,000,000, not a dollar remained in circulation. not retain our own coinage, if we made no difference between it and that of other nations, why not, it was asked, adopt their coins as our own, saving thereby a large annual outlay? In view of a suggestion so reasonable, the committee recommended that the silver dollars of Mexico, Central America, Peru, Chili, and Brazil, and the five-franc pieces of France, be adopted as our own, provided that they were of standard fineness. For such a recommendation precedents of our use of the metallic moneys of Great Britain, Portugal, France, and Spain were cited. As was proper, the committee recommended that subsidiary coins should issue from our own mints, the annual amount not to exceed $200,000 or $300,000. The conclusions to which it came were summarized as follows:

If we could

"I. That the operations of commerce will assuredly dispense to every country its useful and equitable proportion of the gold and silver in currency, if it is not repulsed by paper or subjected to legal restrictions.

"2. That it cannot be of essential importance to any State whether its proportion of the money of commerce thus distributed

consists of gold or of silver, or of both metals, it being the instrument of exchange, but not the commodity really wanted.

"3. That there are inherent and incurable defects in the system which regulates the standard of value in both gold and silver: its instability as a measure of contracts, and mutability as the practical currency of a particular nation, are serious imperfections, whilst the impossibility of maintaining both metals in concurrent, simultaneous, or promiscuous circulation appears to be clearly ascertained.

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4. That the standard being fixed in one metal is the nearest approach to invariableness, and precludes the necessity of further legislative interference.

"5. That gold and silver will not circulate promiscuously and concurrently for similar purposes of disbursement. Nor can coins of either metal be sustained in circulation with bank notes, possessing public confidence, of the like denominations." 1

The report of the committee was conclusive of the whole subject that the operations of commerce will assuredly dispense to every country its useful and equitable proportion of the silver and gold in currency (silver from the small transactions taking place being at the time equally convenient in use as gold and equally uniform in value); that, although the two metals were at the time nearly uniform in value, they could not be so reconciled that they would circulate side by side; that the standard of value must be fixed in one metal alone, and that from the use of paper money neither metal could be maintained in circulation as the ordinary instrument of exchange. The conclusions of the committee had all the force of mathematical demonstration, and served implicitly as our guide down to 1878, when Congress, with incredible recklessness and levity, restored the coinage of silver at the old ratio, although the value of the silver dollar had fallen to 89 cents in gold. The bill was vetoed by the President, Mr. Hayes, as a flagrant act of improvidence and bad faith. It was held in the debate that the coinage of metals at a rate widely differing from their commercial value would have the effect to reconcile their value at any ratio that might be established, although all history had demonstrated that the insignia of governments has no effect to increase the value of the metal on which it is impressed. It was most unfortunate that precedents long established, and which carried the force of demonstration,

1 See page 50.

should have been wantonly thrown aside. It was still more unfortunate that the nature of the act should have been concealed by an issue of notes assumed to be promises of the Government to pay gold. As the coinage was on account of the Government, it was held bound to sustain all its issues at the par of gold, no matter how much they might differ from it in value. It is hardly too much to say that no such purpose was ever really entertained when the act of 1878, or that of 1890, was passed, as otherwise some provision would have been made to maintain the value of the coinage. It is not too much to say that, from the absurdity of the proposition, no provision will ever be made for the maintenance of the debased silver coin at the par of gold. The cost of such maintenance would fully equal a provision of gold, to which is to be added the cost of the machinery that would be required. All this talk about the maintenance of the coins of the two metals at certain ratios is without a particle of sense or reason. We have reached a point in which we can no longer afford to indulge in such idle vaporings. Unless some remedial measures are speedily taken, the consciousness, only partially defined, that our monetary system is a false one, that Government may be speedily called upon for large sums of gold, its inherent weakness as an issuer of paper money being thereby disclosed, is certain to lead to a panic, Government and people being alike involved in a common catastrophe.

Apart from the absurdity of bi-metallism as a proposition, the appointment of a Commission to treat with other great powers should be deprecated, unless we are prepared to meet them on equal terms. While, from the force of laws which no intelligent people can long resist, other powers have been busy in discharging themselves of their useless loads of silver, we have been piling it up till our purchases have reached 459,946,701 ounces, at a cost of $464,210,262. Assuming the silver to be worth 66 cents the ounce, the loss on our purchases already equals $160,000,000. The interest on them equals, say, $140,000,000, the total loss so far being $300,000,000. With such a load on our own, should we appeal to other great powers for the establishment of bi-metallism, the natural inference would be that our purpose was to throw a part of it upon their shoulders. Should we expose ourselves to such insinuations? As evidence of our sincerity, let us meet the great powers, if we are to meet them, on equal terms.

If our currency was wholly symbolic, we might with safety dally with the subject of bi-metallism, certain that it would never come to anything but speculation and talk; but as it is largely one of Government notes, the consideration of this subject as a serious proposition has the direct effect. to delay the inauguration of any measures of reform. If by international agreement the value of silver as money can be doubled, certainly by compact among ourselves the value of Government notes can be maintained at the par of gold. One assumption being correct, the other by necessary consequence must be. It is here that our danger lies. Years may be required to secure an international compact for the use of silver as money. Till that great stumbling-block is removed, it is hardly possible that any steps by way of reform will be taken.

THE REMEDY.

The remedy: A return to a symbolic currency alike for the Government and the people. What is the situation?- $830,000,000 of government notes, for $346,000,000 of which only a small provision is made, and, say, $484,000,000 of silver notes assumed by the Government to be payable in gold, their constituent, unless converted into gold, being wholly unavailable for their discharge.

The first step, to quiet alarm, is provision for funding all the notes into bonds having a value in gold equal to their nominal amount. The terrible tension would be instantly relieved. Every man and every industry in the country would spring to its feet. The echo of the acclaim would go around the world, everywhere carrying hope and joy, for if one great nation like our own be in distress all alike share. Such a provision would be the equivalent of placing $830,000,000 of gold in the Treasury. We cannot now even deliberate without creating alarm. We cannot expose the situation without the danger of exciting a run upon the Government that would force it into a suspension of specie payment, and with it the people, as the entire monetary fabric of the country rests upon that of the Government. The present secure, we could proceed at leisure.

The second step would be to return to the people the power of creating everywhere their own money by removing the tax upon the circulation of the State Banks. Its imposition was a flagrant act of despotism by a gross infraction of the Constitution. The State

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