The Kimball graphic. (Kimball, Brule County, Dakota [S.D.]) 1883-1905, 1886-01-29

Its History In the United Statcs--Iho
silver Question.

United States" BY j. Lawrence Laugh
lin. PHI. d.. assistant professor of politi-
cal economy in Harvard University.
The history of the gold and silver
coinage CT the United States is an inter-
ssting story of fluctuations. From 1892
to'saS gold and silver circulated side by
side without %clashing. In 1853 gold
was abundant and silver scarce, Califor-
MIA having been found auriferous, and
discoveries of gold having been made
also in Russia and Australia. The gold
product reached its highest amount soon
after 1851. at is not too much to saw
that almost all the bimctallic discussions
OF recent years would not have arisen
had not this unexpected and astonish-
ing stream of gold from the mines of
both the new and old world been poured
upon the market. From its date almost
all u modern problems relating to
gold and silver, and we cannot discuss
the silver question of to-day without
reference to this extraordinary produc-
ton of gold. From an average annual
production in 1S4O-1S50 of about s3S,-
900, goo, the gold supply increased TO a
figure beyond $3.50, 600, 900 after 1850.
The value Of gold was lowered. y
Having enough gold, the country did not
care for silver. At the existing and only
nominal mint ratio of 1.16, the silver
dollar could not circulate. and the act
of 1853, regulating the coinage, practic-
ally ignored it. 1t is therefore to be
distinctly remembered that in 1858 the
actual use of silver as an Illuminated le-
gal tender equally with gold, was de-
cisively abandoned. Under any condi-
tons Their existing Il double standard
was publicity admitted to be hopeless.
The main animus of the act, therefore,
is to be found in what is not included in
it--that is, in the omission to insert any
provision which would bring the silver
dollar again into circulation.
In fact, at no time after the act of
1858 until the civil war was the silver
dollar of 4l2a grains equal to less than
lo3 or lO4 cents of u gold coins. and,
consequently. it was never seen in cir
culation. The country had willingly
acguiesced in the practical adoption of
the single gold standard. Silver was
only used for small payments, and all
large values were based upon gold. Up
to this time there was no trouble in orr
coinage system. 1t worked naturally,
and therefore admirably. All adjust
ments were made without friction.
The civil war brought Il momentous
change, and we have been w~allowing in
a stormy sea of financial theories and
practices ever since. AS soon as the
United States lcgal-tcndcr acts were
passed, Gresham's lawcamc into oper-
alton that when two metals are both le-
gal tenders the cheaper one will drive
the dcarer II out of circulation.
AS United States legal tenders
deprecated gold disappeared.
Even the small quantity of subsid-
larry silver held went out of the market.
When gold was at par. silver at 96, and
United States legal-tender notes at 81.
the paper money rapidly disledgcd both
coins. Even the smaller silver change
disappeared, and its absence called into
existence tokens. tickets, checks and
substitutes of every description issued
by merchants and shopkeepers. and
Congress wa obliged hastily to author
ize Il currency, originally based on the
likeness of postage stamps, but which
finally resulted in the simple issue OF
what was known as 1.-The fractional cur
rency.'
Ii was while the lc~gal-tendcr currcn-
cv was in use that the demonstration
of silver took place. The act of 1873
reads that the silver coins of the Uni
ted States shall be Il trade dollar, Il
half-dollar or 50-cent piece. q quarter,
dollar or 2j-cent piece. 4 dime or 10
cent piece" The coinage of the stand.
ard silver dollar is not provided for.
We give Mr.. Laughlin's explanation
and comments: '.ln the act of 1873, we
find Il simple legal recognition of that
which had been tho immediate result OF
the act of 1858. and which had been an
admitted fact in the history of our coin,
age during the preceding twenty years.
In 1853 it had been agreed TO accept the
situation by which VIC had come to have
gold for large payments and to relegate
silver TO Il limited service in the sub
sidiary coins. The act of 1873. howcv-
or, dropped the silver dollar out of the
list of silver coins. In discontinue
ing the coinage of the silver dollar the
act of 1878 thereby simply recognized a
fact which had been obvious to every
one since 1S49. Silver was not driven
out of circulation by of act 1878, which
omitted the dollars of 412I grains, since
it had not been in circulation for more
than twenty-five wears. But
while the act of 1873 had little impor.
lance in changing existing conditions.
it had an influence of \ kind which, at
the present time, can scarcely be over.
estimated. We are now in the course
of our story approaching the year 1876,
III which occurred the phenomenal fall
in the value of silver. Had the demon.
citation of the silver dollar not been
accomplished in 1876 and 1874, we
should have found ourselves in 1876
with = single silver standard, and the
resumption of specie payments on Jan.
uary l. 1879, would have been in silver,
not in gold, and IS per cent of all oul
contracts and existing obligations
would have been %repudiatcd. The ac'
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