Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-05-22
A UNION OF NATIONS
On the Silver Question Is the Only
Practicable Solution.
WE SHOULD STOP ALL COMING.
This Would Fsrcs Europe to Take . SteI
Of Mutual Advantage.
AN ARGUMENT FROM BANKER CLEWS
WRITTEN FOR THE DIsPArcH.l

none that so vitally affects the future of our
| financial interests as this one-what shall
be the status Of silver among the worlds
curreucies? 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 neces-
sary function as money unless it is invested
with stability of e1ehangeable value. Such
stability it cannot possess without the in.
tervent1on of a conventional arrangement,
which, with all the force of a uniform law.
make given weight of silver virtually e1-
changeable 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 prejudices, governments
have hesitated to act with the unanimity
that is necessary to an efficient conventional
arrangement. Each one has preferred that
others should take the responsibility of free
coinage; and the result has been that unre-
stricted coinage has been adopted only by
those nations which happened to be most
imperatively committed to the necessity of
protecting their silver circulation.
Silver in the Latin Union.
Those nations were comprised in the inte ).
national combination known as 'The Latin
Union, That union was found competent
to take care of all the new supplies of sill
yer. so long as the principle of free coinage
was maintained and the value Of the metal
was kept uniform under its operation. In
an evil hour, however, certain German
theorists persuaded Chancellor Bismarck to
commit Germany to the demonetization of
silver. The large supply of the metal there
by suddenly thrown into the mints of the
Union nations alarmed the combination,
first, into limitation of. their coinage of
silver, and finally, into q suspension of it
The coinage demand for silver being thus
shut 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 commercial
demand, and to decline in consequence of
an excess of supply over demand. This
is brief explanation of the causes
value of silver. I know of no way of re-
pairing the value of that metal other than
by establishing an international union SIM
liar in its objects and conditions to the now
virtually defunct Latin Union, but embrac-
ing wider range of Governments than. that
combination did, the cooperation of the
United States, England and Germany being
especially important
Possibly existing stocks of gold in Europe
and America might be sufficient to serve
the purposes of banking reserves and for
transmission in the international exchanges;
but it is impracticable to use such q valu-
able 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 I regard the use of silver,
co-ordinately with gold, as an indispensable
element in the worlds currency.
Uniform Value OF Bullion.
Iregard an international union a, abso-
lutely necessary for maintaining the Joint
use of gold and silver if the relative value
between those metals is to be maintained.
If uniform value of silver were adopted
by members of such a unin, and if the Mint
of each Nation were bound to coin all silver
brought to it, and the coins were made
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 bullion would be
preserved as long as the union should be
continued. Even the limited international
arrangement known as the Latin Union
sufficed to keep silver at about 60 pence
per ounce, until its members taking fright
by the demonetization of silver BY Ger
many, 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 1515 weights of
silver to one of gold, the rate now general
in Europe, and the members of the union
were compelled to coin it 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 coin
age charges, which is tantamount to making
silver worth about 80 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, it appears to 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
25,000,0O0 to 3O,OO0,0OO of bullion of our
silver going thither every year, the effect
would be so serious upon Asiatic trade and
upon the immense silver circulation of the
Latin nations that it seems certain they
would soon become willing to assume their
share in restoring silver. At any rate, it
is a proper and necessary compulsion for US
to apply.
Gold Drifting Toward q Premium.
The Government is very closely threat
ened with suspension of gold payments, if
the coinage is continued. We have already
seen a point at which the Treasury had to
negotiate with banks for six millions of
gold to avert that catastrophe; and it 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 sus-
pended coin payments gold would be apt to
60 to an indefinite premium; with the con-
sequence of a rush OF greenbacks into the
Treasury for redemption and depreciation
dfsuch paper as is redeemable in silver to
the purchasing power of that coin. In my
view these dangers are much nearer than is
generally supposed, and it is a most unjusti-
fable policy that needlessly perpetuates
this state of things.
For the reasons already given regard the
suspension of the coinage of the silver dol
lars as to the last egree imperative. And
the suspension should be both total and un-
conditional. Either partial or temporary
suspension would fail equally to avert the
home dangers with which we are threatened,
and to bring about that European action
which is indispensable to sound and per-
manent settlement OF the question.
So 1ono there is M aff1cia onn van