The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1877-06-27


of 1865, the above table is given to the date
of his writing. Only the last two columns
show the actual gold value, at which govern
ment notes and bonds were held, and are
worthy of attention Newcomb says, rela-
tive to this Whatever may be now
said about the demonstration of gold, and
its conversion into an article of merchan-
disc, the following facts are thoroughly un-
dersto0d by the mercantile community:
al Gold and silver have for centuries been
the standard of value IN every civilized
country
so Gold and silver now are the standard of
value in our own, well in every civil
lied country, in spite of the legal tender pa
per.
''3. Gold will be the standard of value in
this and every other civilized country, in
spite OF anything any government can do to
prevent ito
He fails to perceive though, that gold
and silver are the standard of value between
modern nations as they were formerly so
between individuals, because, like diamonds,
pearls and precious stones, they have an in
trinsic value, based upon their utility and
rarity. The cost of gold is doubtless
the chief cause of its value, for its
specific gravity makes it more difficult
to mine it than any other mineral.
That is, natures laboratory turns ont min
erals for the use of man in such a mixture
as to cause gold to be of greater specific
gravity than any other that possesses the
same power to resist acids, and that is also
ductile and malleable.
Hence gold, silver copper, nickel, etc.,
have been made use OF as currency, or stan
dard of credit, by all governments of mod
ern times, whose coinage, however, has been
of different ineness and weight. For in
stance, the pound sterling of the English
government from the Norman Conquest un-
til the reign of Edward III. contained
pound of silver. From that time until Ed
ward vi. there was an almost continual de-
gradation of the standard. The House of
Stuarts, in Scotland. in century and half
reduced the quantity of silver in a pound
TO less than one-twentieth of its original
amount. When Newcomb says gold and
silver are the standard of value, he means
the legal standard. The laws of nations diff
fer as to the legal standard of gold and
silver coins. Hence the value of all
coins is regulated by supply and de-
mand. For instance the British legal stand
ard dsovereign-pounds sterling-has an intrin-
sic value of 81 5000; its commercial value
varies according to the demand, like mer-
chandise; S4.84 is the value of the sovereign
at our custom houses for duties. But the
par value of the pound sterling in the Uni
ted States is 81 Al 40. The par value of the
pound in London, in American coin. is
$3.50. Then the difference of exchange is
another value. Here are five different val
ues that all foreign coins are subject to in
each nation, as the British sovereign is in
ours. Why is this difference? Simply be-
cause the mint standard of fineness, or alloy,
in all nations is not the same. The standard
of British gold coin is 11-12 in fineness. Our
gold dollar is $40 in fineness. A troy ounce
of pure gold will produce in the British
mint "a 109. 440, which equals S4 21-22 shil
lings or 1,019 5-11 pence. The American
gold dollar weighs 25 A 5 troy grains and
contains q 1l-50 troy grains of pure gold.
VALUE OF SILVER.
An ounce, troy, of silver of the British mint
standard 81 40 or 925-1000 in fineness, is
worth SO 9S-008 pence, or about $1.19-73.
But the silver dollar coined by the United
States is, or was 4l6 standard, and contained
| BIZ grains of pure silver. worth about
| Sc. .923-79 according to the standard of the
British mint And according to that stand
ard our fractional silver coin is of less value
than that of Canada, where an American
| so cent piece is worth p cents less than the
Canadian 90 cent coin. Thus it is practically
evident that gold and silver are the national
| medium of exchange between nations, while
paper Is or may be the legal money of each
nation as well as gold and silver, the buying
power of which, outside of said nation, de-
pends upon the credit of that nation. Hence,
| IL gold and silver are scarce, each nation can
1 ~
/ credit. But If more paper is put into circu-
i lation than the business of the people re-
| quires then that paper money will depre-
ciate in value accordingly. But there is no
business so great as that of nation that is
! working every fibre of its formto maintain
and preserve its life. The United States gov
/ ernment was in that position during the late
war when paper was made legal tender.
| Such war made business so stupend0us
i as to require ten times the amount of circu-
lation ordinarily demanded. This fact Mr.
Newcomb recognizes He has said, Making
the notes legal tender adds nothing to
their value. Although congress can declare
notes legal tender it can not fix the price
Of provisions" But he shows in page 81
that the faith of a patriotic farmer in the
paper money which his government issues
TO prosecute such war as the last may
prompt him to so act as to disturb the rela-
ton existing between the supply and de-
mand of gold and silver coin, which are gov
erned and depend upon public opinion.
Suppose says he, ''that an Ohio farmer,
| who never heard of a stock board or the
premium on gold, has received hundred
dollars in legal tender notes for his wheat.
He knows that the same wheat would have
brought him only forty dollars in gold. II
he is disposed TO set higher value on this
money he has received than others he will
be inclined to sell more wheat, and to spend
the least possible amount OF the legal tender
notes in buying goods at such high prices
and he will either keep the money or invest
il in government bonds. The increased
amount of wheat he has thrown upon the
market will then cause the price to fall, and
his refusal to buy the usual amount of goods
will diminish the demand for them both
effects being caused by the farmers increased
appreciation of legal tender notes. This fall
In wheat will stimulate an increased export
of that article, while the diminished de-
mand for dry goods will canse diminished
importation. Hence the importer will want
less gold for foreign export, and the price oi
gold will also fall" Thus the senti
ments of the Ohio farmer are re
fected in the gold market The influence Of
one farmer represents that Of thousands