Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-12-04

secretary will feel it to be his duty, unless
Congress otherwise provides, to direct that
after the LIST day of January next. and while
United States notes are redeemed at the treas
ury, they be received the same as coin by the
ofheers of this department in all payments in
all parts of the United States.
II any further provision of law is deemed
necessary by Congress to authorize the receipt
OF United States notes for customs dues or for
bonds, the secretary respectfully submits that
this authority should continue only while the
notes are redeemed in coin. However desirable
continuous resumption may be, and however
confident we may feel IN its maintenance, yet
the experience of many nations has proven that
it may be impossible in periods of great emer-
gency. In such events the public faith de-
mands that the customs duties shall be collect
ed in coin and paid to the public creditors,
and this pledge should never be violated or our
ability to perform it endangered.
Heretofore, the treasury, in the disburse-
ment of currency, has paid out bills of any de-
nomination desired. In this way the number
of bills of a less denomination than five dollars
is determined by the demand for them. Such
would appear to be the true policy after the
LIST of January. It has been urged that with
view to place in circulation silver coins no bills
of less than five dollars should be issued. 1t
would seem to be more just and e1pedient not
to force any form of money upon public
creditor, but to give him the option of the
kind and denomination. The convenience of
the public, in this respect, should be consult
ed. The only way by which moneys of different
kinds and intrinsic values can be maintained
In circulation at par with each other is by the
ability, when one kind is in excess, to readily
exchange it for the other. The principle is APP
pllcable to coin as we'll as to paper money. In
this way the largest amount of money of differ
ent kinds can be maintained at par, the differ
ent purposes for which each is issued making
demand for it. The refusal or neglect to main
tain this species of redemption inevitably eff
fects the exclusion from circulation of the
most valuable, which, thereafter, becomes
commodity, bought and sold at premium.
When the resumption act passed. gold was
the only coin which by law was legal tender
in payment Of all debts. That act contemplat-
ed resumption in gold coin only. No silver
coin of full legal tender could then be lawfully
fractional coin, which was a legal tender for
hve dollars only. The act approved February
2o, 1878, made very important change in our
coinage system. The silver dollar provided for
was made legal tender for all debts, public
and private, except where otherwise expressly
stipulated in the contract The amount of
this coin issued will more properly be stated
hereafter, but its effect upon the problem Of
resumption should be here considered.
The law itself clearly shows that the silver
dollar was not to supersede the gold dollar; nor
did Congress propose to adopt the single stan
dard of silver, but only to create bimetallic
standard of silver and gold. of equal value and
equal Purchasing power. Congress-, therefore,
limited the amount of silver dollars to be coin
ed to rot less than two millions nor more than
four millions per month, out did not limit the
aggregate amount nor the period Of time dur
ing which this coinage should continue. The
market value of the silver in the dollar, at the
date of the passage of the acc. was 934 cents in
gold coin. Now it is about sc cents in gold
coin. If it was intended by Congress to adopt
the silver instead of the gold standard, the
amount provided for is totally inadequate for
the purpose. Experience, not only in this
country, but in European countries, has estab-
llshed that certain amount of silver coin may
be maintained in circulation at par with gold
though OF less intrinsic bullion value. It was,
no doubt, the intention Of Congress to provide
a coin in silver which would answer multitude
of the purposes of business life, without ban
ishing from circulation the established gold
coin of the country. To accomplish this it is
indispensable either that the silver coin be linn
tied in amount or that its bullion value be
equal to that Of the gold dollar If not it's
use will be limited to domestic purposes. 1t
cannot be exported except at its commercial
vnlue as bullion. If used in excess of demands
for domestic purposes, it will necessarily fall
in market value, and, by well known princ-
pie of finance, will become the sole coin stand
ard of value. Gold will be either boarded or
are authorized without limit, the cheaper alone
will circulate. If, however, the issue of the
silver dollars is limited to an amount demand
ed for circulation, there will be no deprecia-
ton, and their convenient use will keep them
at par with gold as fractional silver coin issued
under the act approved February 81, 1853, was
kept at par with gold.
The amount 0f such caip hot o,,, 4b,, 10
maintained at par with gold cannot be fairly
tested until resumption is accomplished. As
yet paper money has been deprecated, and sill
yer dollars being receivable for customs dues,
have naturally not entered into general circu-
latlon, but have returned to the treasury in
payment of such dues, and thus the only effect
of the attempt of the department to circulate
them has been to diminish the gold revenue.
After resumption these coins will circulate in
considerable sums for small payments. To the
extent that such demand will give employment
to silver dollars their use will be an aid to re-
sumption rather than hindrance, but if issued
in excess of such demand they will at once tend
to displace gold and become the sole standard
and gradually, as they increase in number, will
fall to their value as bullion. Even the fear or
suspicion of such an excess tends to Danish
gold, and, if we'll established, will cause con-
tinuous drain of gold until imperative neces-
slty will compel resumption in silver alone
The serious effect of such a radical change in
our standards of value cannot be exaggerated;
and its possibility will greatly disturb conf
dence IN resumption, and may make necessary
larger reserves and further sales of bonds
The secretary, therefore, earnestly invokes
the attention Of Congress to this subject, with
a view that either during the present or the
next session the amount of silver dollars to be
issued be limited, or their ratio to gold for
coming purposes be changed.
Gold and silver have varied in value from
time to time in the h1story of nations, and laws
have been passed to meet this changing value.
In our country, by the act of April 9, 1892, the
ratio between them was fixed at one of COLL to
fifteen of silver. By the act of June %, 1884,
the ratio was changed to one of gold to sixteen
of silver. For more than century the market
value OF the two metals had varied between
these two ratios, mainly resting at that fixed
by the Latin nations, of one to fifteen and a
half.
But we cannot overlook the fact that within
few years, from causes frequently discussed
IN Congress, great change has occurred in the
relative value of the two metals. It would
seem to be expedient to recognize this controll-
ing fact-one that no nation alone can change
by careful adjustment of the legal ratio
for coinage of one to sixteen, 80 as to conform
to the relative market values of the two met
ais. The ratios heretofore fixed were always
made with that view, and, when made. did
conform as near as might be. Now, that the pro-
ductlon aud use of the two metals have greatly
changed in relative value, corresponding
change must be made in the coinage ratio.
There is no peculiar force or sanction in the
present ratio that should make US hesitate to
adopt another, when, in the markets of the
world, 1T is proven that such ratio is not now
the true one. The addition of one-tenth or
one eighth to the thickness of the silver dollar
would scarcely be perceived as an inconvenience
by the holder, but would inspire confidence
and add greatly to its circulation. AS prices
are now based on United States notes at par with
gold, no disturbance OF values would result
from the change.
1t appears from the recent conference in
Paris, invited by us, that other nations will not
join with us in fixing an International ratio