National Republican. (Washington City (D.C.)) 1872-1888, 1875-01-07
SUBSIDIARY SILVER COINAGE.
PRACTICE EFFECT OF THE SENATE FINANCE

BILL.
WASHINGTON, d. C., Jan. S. 1875.
To the Editor Of the National Republican:
Sir: The Alta California of the 2jth ult. con-
tains leading editorial on the Senate finance
bill, and among its conclusions arrives at the
following in relation to the provision for silver
redemption OF the fractional currency:
This mass of redundant paper is to continue
to be legal tender irredcmable in gold (Which
is IL per cent. premium for four years, while
silver is to be put in circulation Immediately
to the extent of O,OOO, 900 in substitution of
fractions. Now, gold being - per cent. pre-
MUM and silver s per cent. premium, there
presents itself profit of s per cent. for the
brokers to buy up and export the coin as fast
as the Government pays it out. Thus 81 900
legal tender may be bought for 1896 gold.
When the Treasury pays out 81 900 silver for
81 600 paper fractions, the holder of the paper
will get 1915 worth of silver for his 1896 of
gold, making per cent. profit. OF course no
silver will remain out; but the fractional cur
Tency will, as in 1862, be replaced with nickels,
which cost the Government about forty cents
on the dollar, and the Treasury and Minis will
have a labor of Sysiphus before them. The
plan is a renewal of Mr.. Richardson's absurd
ity Of two years since.
The calculation of the Alta is based upon the
assumption that silver coin is at premium of
per cent, and the conclusion is drawn
that il would be exported as rapidly as
paid out in the redemption Of fractional cur
rency. 1t must be known to that intelligent
and conservative paper that the premium indi-
Gated can apply only to the nominal value
of the silver coins and not to their bullion
value. The supply of such coin has hitherto
been insufficient to meet the demand in Texas
and other localities. They circulate in Texas
and Central America at their nominal value.
This excess of demand over supply has en-
abled the New York brokers to maintain the
premium referred to. Now, suppose the de-
mand to be fully met, will it not follow chat
for purposes Of export these coins must be re
garded simply as bullion, and as such, being
worth about 81 .12 per ounce, they will bring
about 5000 per 81 600; and not 1919, as stated
by the Alta
When the market price of silver is 112 cents
per ounce standard, the bullion or export
value of dollar in subsidiary silver coins is
exactly 90 cents, while the gold value Of the
currency dollar, with gold at 10 cents pre-
MUM, is SO 2-10 cents. With these rates and
exchange at par, 1t will scarcely be commended
by any one that the coins could be exported
at profit. Freight, insurance and broker
age would more than balance the triling diff
ference Of $40 of cent between the gold
value of the silver and paper dollar.
Suppose the Government had SIS, 900 900 of
subsidiary silver coin ready for issue, and the
minis coming such pieces at the rate Of
81 500 900 per month, is it at all probable that
the demand from two or three of the least i'm
portant of the South American States would
not soon be metz If so, the coins would cir
culate in the United States until they could be
exported at profit as bullion, and such a
condition of affairs would not arise unless
there should be a material advance in the
price of silver bullion or depreciation of the
greenback dollar.
At the present rates, the holder Of 81 900 in
silver coin has $685. ounces Of standard silver
bullion, and which, for export as bullion, are
worth 5000, and not 1915, as the Alta endeav
ors TO show. ....
Silver coins to the amount of 100000 could
not be sold at this time in New York city for
anything above their bullion value, and for the
reason that the sum mentioned would more
than meet any demand for such coins as nloney.
1t will not matter much if two or three mil
lions of the subsidiary coins go to Central or