The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1891-07-19
CLEWS ON SILVER.
The Question Discussed From a
Wall Street Standpoint.
1T MUST BE SETTLED SOON.
The Remedy Is an International Coinage
Union, on a Basis Broad Enough to
Give Stability to White Money.

OF all the current public questions, l
know OF none that so vitally affects the fu-
ture of our financial interests as this one
what shall be the status of silver among
the worlds currencies? At the present
time about one-half of the worlds metallic
money consists of silver, and the other
half of gold. 1t is clear that silver cannot
maintain its necessary junction as money
unless 1t is invested with stability of
exehangeable value. Such stability 1t can
not possess without the intervention of
conventional arrangement which, with all
the force OF uniform law, makes given
weight OF silver virtually exchangeable for
given weight of gold. This principle
once established, and silver bullion being
made convertible into silver coin at the
mints OF the chief nations on demand, it
follows that the bullion value of silver
must constantly conform closely to its
value as coin, and the stability of the
value of silver coin would thus be insured
The difficulty has been that, owing to
petty jealousies and preiudices, govern
ments have hesitated to act with the
unanimity that is necessary to an efficient
conventional arrangement. Each one has
preferred that others should take the re-
sponsibiiity of free coinage, and the result
has been that unrestricted coinage has
been adopted only by those nations which
happened to be most imperatively COM
mitted to the necessity of protecting their
silver circulation. Those nations were
comprised in the international combina-
ton known as 1.-The Latin Union" That
union was found competent to take care of
all the new supplies of silver so long as
the principle of free coinage was MAIN
tanned and the value of the metal
was kept uniform under its opera
ton. In an evil hour, however,
certain German theorists persuaded
Chancellor Bismarck to commit Germany
to the decentralization of silver The large
supply of the metal thereby suddenly
thrown into the minis of the union ma
tons alarmed that combination, first, into
limitation of Their coinage of silver.
and, finally, into suspension OF it. The
coinage demand for silver being thus cut
off, the price of silver bullion was cut
loose from the relative legal valuation be-
tween silver coin and gold, and was left to
drift with the variations in the CONNER
cial demand, and to decline in consequence
of an excess of supply over demand. This
is brief explanation of the causes of the
present depreciation in the value of silver
know of no way of repairing the value
of that metal other than by establishing
an international union similar in its OBJ
Jects and conditions to the now virtually
defunct Latin union, but embracing a
wider range of governments than that
combination did, the cooperation of the
United States, England and Germany be-
ing especially important.
Possibly existing stocks of gold in
Europe and America might be sufficient to
serve the purpose of banking reserves and
for transmission to the international ex-
changes, but it is impossible to use such
valuable metal to the extent required for
the purposes of active circulation, and
this creates necessity for a silver legal
tender coin for the retail transactions of
business. For this reason 1 regard the
use of silver, co-ordinately with gold, as
an indispensable element in the worlds
currency.
l regard an international union as alb
solutely necessary for maintaining the
joint use of gold and silver, if the relative
value between those metals is to be main
tanned. If uniform value of silver were
adopted by members of such union, and
4
coin all silver brought to it, and the coins
were made a legal tender, it appears to me
that this would establish a uniform value
for silver bullion the world over on a
parity with the legal valuation of silver
coin; and this conventional value of bull
lion would be preserved as long as the
union should be continued. Even the
limited international arrangements known
ha att strfft 70
at about 60 pence per ounce, until its men,
bers, taking fright by the characterization
of silver by Germany, stopped the coinage
of silver; when, the conventional support
being withdrawn and the coinage demand
suspended, bullion fell to its value as a
mere commodity. This shows how effective
the union principle is and what becomes
of silver without it.
If an international union were to fix the
value of the two metals at fifteen and a
half weights of silver TO one of gold, the
rate now general in Europe, and the men,
bers of the union were compelled TO coin
il on demand at that rate, then the free
convertibility of bullion into coin would
necessarily make the coin and the bullion
of equal value. except the slight difference
that might arise from coinage charges.
which is tantamount to making silver
worth about 60 pence an ounce, or its
former value.
In view of the differences of opinion in
Europe on the standard question and the
strong prejudices in England in favor of
the gold standard, II appears 70 me more
than doubtful whether any step will be
taken on this subject until those countries
are made to carry the burden of the large
surplus of silver that We are now coming
But with SIS, 100000 TO 100000 600 of bull
lion of our silver going thither every year,
the effect would be so serious upon Asiatic
trade and upon the immense silver circu-
lation of the Latin nations that it seems
certain they would soon become willing to
assume their share in restoring silver. At
any rate, il is a proper and necessary COM
pulsion for Us 10 apply.
The government is very closely
threatened with a suspension of gold pay
ments, If the coinage is continued. We
have already seen point at which the
treasury had TO negotiate with the banks
| for $1,000, 900 of gold 10 avert that catas-
trophe, and il is only a thin margin of a
very few millions that separates Us from
such a condition all the time. OF course,
| if the government suspended coin pay
ments, gold would be apt TO go to an in
J definite premium, with the consequence Of
rush Of greenbacks into the treasury for
| redemption and s depreciation of such
1 paper as is redeemable in silver to the
/ purchasing power Of that coin. In my
view these dangers are much nearer than