New-York tribune., 1876-07-25
BEFORE AND AFTER 1878.
OUR PRESENT PosITIoN-uow SILVER Is AFFECTED
BY PAST LEGISLATION.

OUR PRESENT POsITION-uow SILVER Is AFFECTED
BY PAST LEGISLATION.
To the razor OF Thc irf6anc.
SIR: In the discussion of the silver question,
notice that there has appeared great DIAL OF ignor
ance. looscness of reasoning and their usual con-
comitant bad temper. Two distinct inquiries are
involved:
/. Is il desirable that this country should perna-
nently adopt the double standard
H. To what extent are existing obligations affected
10y the fac that, prior TO 1873, debts could be law
fully paid either in gold silver at the pleasure of
the debtorl
These questions are often coufounded in the dis
cussion. with lamentallc results Let us lIsi find
out where We stand today. lI.or TO 1873, silver
equally with gold was hy laws Of the
United States a legal tender for the pay
mcnt Of debts TO any amount. The coinage
acts were simply efforts of the Government
to make its silver and its gold CONS equal,
dollar for dollar in maret value that no benefit
or injury should result from the option given by the
laws of payment in either kind Of com. Ii was not
then understood as clearly it is now, that the
two metals are never constant in relative value for
a long period, that 10 attempt 70 cqua.ize chem by
coinage laws can meet with more than temporary
success, and that change in the purchasing power
of either 80 reacts upon she purchasing power of tHc
other rs gradually - re- tore the equilibrium. Dur
ING many years silver was rated too high IN COINAGE,
and therefore drove out gold so that from 5'2 20
1888 we used silver almost oECiUsiycly Daring
other years silver ra.ed TOO low, and was there
fore driven out by gold. SO That FROM NjS 20 1913
We used gold almost cscIusiyoiy How do these
errors Of the Government affect legal nights created
at different times!
Ianswcr: In no way whatever. The law Of the
tfo
,,,r.....ed l.,..,.. &C ,'.e -.t'.'. -. -''.-- -;
gold al the option Of the person paylr". contract
TO pav dollars. therefore, was q contract to pay
cltlcr so many grains of gold or So many oi SILVER
As the debtor mic' prefer at tlc time Of payment.
The fact that silver was in little use NJ one time
and gold al another, was thr consequence oi that
OPTION but in 10 way al cts tAc fact iha: l' option
was granted to every debtor and understood 10y
every cf.ditor. Gold for example, was the cheaper
coin before the way Persons borrowing money cN-
pectcl to be Permitted 10 pay a gold, if the cheaper
ar in silver if that shou'd become the ch apcr before
tbc time of payIrent. That was a right conceded IN
eve,y contract. because the law made either coin
LEGAL tender If q bonanza had been discovered in
$50 and Lad caused the pri of silver 90 fall o.
low as +: now, no one cuuli have questioned the
ri4ht Of every debtorto pay silver instead oil Gold
Those who did pay IN gold naturally took ady"'"3 "3'
O, the discoveries in California. Had the N"'.d1
silver mine, been discovered instead, they would
have paid in silver and Uo man could have disputed
their night: In what way, then, did thc act Of 1873
alter the nature Of debts created prOr 70 tat time
The United States las 10 right to pass any law
changing the obligation Of contracts. If debt Was
created at a time when the laws Of the United
STATES cave 70 the debtor the right Ia pay that debt
in silver doilaIs, what ioht, ash has the United
States by SUBSEQUENT act 20 provide that silver dol
lars shall not be a legal tender! Rr-pccl"g ail
vdcbts created after the enactment Of 1913, tie
United States had power 10 provide that silver
should no. b. a tender But what power had 1t to
impair the obligation of contracts previously exist
ug!
SIS position. then. is this: 1t would be a mere
act Of Justice to provide silver coin, equal in
weight to That muse priorto 1873, which should hra
LEGAL tenderin payment Of all debts tucn created Bat
il would be a gross Injustice 10 provide that such
coin should be a legal tender in payment Of debts
Exceeding - in amount created after that enact
ment of 1873. For since that time coin contracts
have been gold contracts; the law of the United
States has entered into and forms part Of all con
tracts since made. The question of cXpedicncy is to
be separately considered. As to the question Of
right the United States has no right 10 impair the
obligation Of contracts. Hence il has no right TO
make silver legal tender for payment of debts
created since 1873, nor to make gold only legal
tender for the payment of debts created prior to
1878. Yours, G.
Nelc- IorL July 90 1876.