The times. [volume] (Richmond, Va.) 1890-1903, 1891-01-22
The SILVER PROBLEM.
The Esistfss Law Better Foe silver Men
Than rrsr cslnaIN WI
fror thu Riohn,ont3 Times1 or t-A

Il pOlltlC, which pfOuuCcU tnat ueluslOn, nov
gives feyerish strength to the free coinsg
craze. fiffif d. s.fg rf,.I-
IL is stated upon g1od authority that th
Savings Ranks and Trust Companies of IN,
East have loaned more than -, 0oo, ooo. 200 OF
Western farm mortgages. The loans ar,
due, or are soon 10 mature, and the Who'll,
Yves, is In ferment, and is agitating tn,
question how 20 pay It's debts as oheaply a,
possible. United with the Western debtor,
in this agitation are the Silver Bsrons, re
| Gently strengthened by the admission Of the
new silver States whose Objects 10 enhance
the value Of their product, at the cost OF the
Government, that IL OF the people.
The object OF this article II 10 show thai
tbs existing law 10 better for the producer
Of silver than tho free coinage act Per.
haps ii is better also for the country.
PROVISIONS ot 1tiR LAW.
Under the existing law the Government
must buy 54,000.000 ounces OF silver every
year and issue therefor United States
Treasury notes at the market value. This
lie equivalent 10 an annual increase in the
currency Of nearly about $80,0o0,00 a
steady annual increase, known and relia-
BILE, and on which every business man can
make hie calculations.
IL affords permanent steady market for
nearly The whole product Of the mines OF
this country, and has advanced the price OF
silver about 10 per cent. The country can
probably absorb this amount Of silver cur
rency annually and yet maintain gold pay
meuts. The maintenance Of gold payments
means the retention Of $3.50, 100000 Of gold
as part of our circulating medium.
As far as it goes, the existing law is very
favorable 10 the debtor. BY increasing the
amount Of currency, and is equally favor
able TO the silv sr producer, by furnishing
him market, and a purchaser, who pays
him more than the article is really worth.
EFFECT OF FREE COINAGE.
Look at the other side. Free coinage will
neither increase the currency to avery gieat
extent nor furnish the silver producer with
as profitable a market as the existing law.
The effect of free coinage will be TO sus-
pend gold payments and to make silver the
measure Of all values for this country.
This assertion is made because. In the first
place, the banks, bankers, and capitalists
Of the country do earnestly believe that such
will be the case. s f D.3
Whether it should be 80 logically, or eI
necessitate rel, is OF course open 70 ques-
ton. But if the banks, bankers, and CAPT
talists believe that il will drive gold out Of
circulation, then it will do so. because the
moment they become satisfied that free
coinage law will pass they will act upon
their belief; they will lock up the gold, and
will themselves bring about the suspension
OF gold payments by putting gold to pre-
MUM.
This tendency was made manifest last
week, when within two days after the Senate
voted for free coinage gold went nearly TO
the exporting point. And when the New
York Bank statement appeared on Satur-
day the public was surprised to find that
the bank showed an increase OF 81, go, 900 in
eOld. Where did the increase come fromi
No gold had b zen imported. The banks had
stopped paying out gold apparently; in
other words were boarding 1t.
GOLD AT A PREMIUM.
I'm the second place, it is maintained that
free coinage logically and eX necessitate
aci means that gold will 90 TO premium
and that silver will be the standard Of va
lue. Free coinage is an invitation to the
whole world 10 send its silver here to be ex-
changed for gold.
The supply of gold in the United States
Treasury is 1870, 100000. Against this has
been issued about {l7O,000,000 Of gold certi-
fcates, leaving 800, 100000 of gold for re-
demptiOn fund. The rest Of our gold sup
ply is i'm the hands of banks and indivi-
duals. who certainly will not exchange IL
Tor silver. If the free coinage law should
be passed in its present shape, and gold dill
not at once go to a premium, IL would oper-
ate as follows: The owners OF silver IN
England, France, Germany, or elsewhere,
could send their silver 10 this country
for coinage, az soon as deposited at
the mint they would receive Tor
il an equivalent amount of United States
Treasury notes, which they would exchange
for gold, making a profit on the transaction
of about twenty 10 twenty-five cents an
ounce. As the Government has only ABOUT
500 0OO, 900 OF gold TO meet this drain, the
supply would be quickly exhausted, and
then gold would 20 TO premium.
But it is not to be supposed that our swn
people are not a. smart fnaneiers as the
foreigners. The practical result OF the free
coinage law would be that there wsuld be
an immediate scramble for the supply OF
gold, and il would 20 to premium at once.
EFFECT ON FOREIGN SILVER.
The moment gold goes TO a premium, sill
yer would cease TO come from abroad for
coinage. because there would no longer be
any profit in such transaction.
The foreigner could not afford to pay the
costs and charges Of transportation TO eI-
change silver bullion for paper dollars.
which would be worth no more than the
bullion in this country, and would be worth
much less abroad.
This being SO, with respect to foreign sill
yer. how would it be with regard to the
home production.
As has been said, the moment gold goes
u a premium, all values in this country
vii be increased in silver. What induce
m.nt will there be for the owners OF silver
bu ion 10 take it 10 the mint for coinage!
II ne takes 500 worth OF silver to be
coined be receives back 500 in silver dol
r,ftnI ~tafpc iTrQaaurV DOtpQ for his
eoulv. lent amount which 10 worth no more
than Tee 500 Of bullion which he surren-
ders. Ia other words, he makes no pront
bv the transaction, and there would be
noihin- to cause rush OF bullion 10 the
mint for coinage.
Ttere is no reason why after the country
cones to a silver basis, there should be any
greater demand for coinage OF silver than
there now is for coinage of gold. NO gold
bullion comes from abroad TO this country
10 be coined into dollars, or eagles, al
though the coinage OF gold 10 just as Tree ss
il is proposed 10 make the coinage OF silver
IL Is a well-known fact that only small
proportion Of the gold produced In the
United States is turned into gold coin.
HOPES oF SILVER PRODUCERS.
The silver producers hope Of profit from
free coinage Is based upon the expectation
that Il q Govern meDt Will NC doic, ih sVin0
inexpiicable manner, 10 continue 10 main
tain silver at par with gold.
When it is discovered that this is imprac-
ticable. and that there is no substantial
nroft 10 be derived from exchanging silver
bullion for its exact equivalent In siver
= liars or Treasury notes, 1t will probably
found that the amount of silver coming 10
the mint for coinage will be far less than
the 1900, 900 ounces required by the existing
law 10 be purchased annually.
In other words, the existing law VIII inr-
nish a better market for the produce OF tne
mines. and therefore keep silver at higher
price than free coinage.
II gold goes TO a premium there VIII De
an immediate and large reduction In the
volume of our currency. Six hundred mil
lions of gold will instaneously cease 10 De .
part of the circulating medium, and instead
~ having an imitation we will have large
Ammunition Of the currency. This VII
probably produce q temporary strlngenc!
in the money market and general as
arrangement OF business. The country
however, will quickly adapt itseii 70 tne
new standard, aud the secondary result
will be an advance in value OF land ana tnt
nrodncts of the soil, accompanied by gen