St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-07-01
HOW IT WORKS.

IL mas Dcen suggested by gentleman
of the city that the editorial writers
take it too much for granted that their
readers are familiar with the facts OH
which their comments are based i'm this
much discussed question of the silver
purchase act, and that he finds many
intelligent persons whose pre-occupa-
ton in business has prevented them
from getting that information which
would enable them to comprehend the
comments made on the act and its
effects. Writers assume, perhaps with
insufficient foundation. that their read
erS are also as close and attentive read
erS of the news columns as they are,
and that statement of the facts would
be au unnecessary and tireSome repeti-
ton.
The BLAND ALLISON act of 1873 COM
PEELED the purchase and coinage of not
less than $1,000. 900 and not more than
S4.000,000 worth of silver bullion each
month-not,as all evening contemporary
stated. each year. The SHERMAN act
changed this to compulsory purchase
of 4,500,0 600 ounces of silver each month,
and the issue of treasury notes redeem
able in coin in payment. The coinage
of a portion of the silver purchased was
stopped in 1891 under the authority of
the act.
The ratio of coinage is the quantity of
one metal which is declared by law to
be the equivalent in value of fixed
quantity of another. The ratio Of silver
to gold is as 1898 to l, or as, commonly
stated, 16 to I; that Is, an ounce of gold
is worth sixteen ounces of silver, OR
1922 grains of gold, the quantity of fine
gold in dollar, is the equivalent of the
37l.25 grains of fine silver in dollar.
This ratio was ascertained to be very
nearly the commercial ratio among all
commercial nations when it was estab-
llshed in 1884, but in fact it was some
what less. 15.5 to being that of France.
Ii 1872 grains Of gold are worth dollar,
all ounce is worth $50 81, and an ounce
of silver. being worth one-siXteenth that
of gold, is worth S1.29.
In its purchase of silver under these
acts the treasury paid the market value
of the metal. If there had been no de-
probation ia the value Of silver,it would
have paid uniformly S1.29 an ounce. But
that price has been steadily falling, in
spite of these purchases, until it has
reached the present price. the lowest
ever known. As the government is
bound to maintain the parity of the
value of all the coin, or its representa-
tives, which it issues, every dollar it
pays out for silver, whether it is silver
dollars, silver certificates. or the
treasury notes of the SHERMAN act.
is worth 1922 grains of gold. But the
quantity of silver which it puts into
a silver dollar costs 1t today but 1876
cents. 1t issues it, and, under the legal
tender clause, o5liges the people of
this country only, to take it for dollar
measured in gold. 1t therefore gains
the difference between the cost of the
metal in the dollar and the value it de-
crees it shall be taken at This differ
ence is called "seigniorage.
If we had the free coinage which Mr..
BLAND and his crowd want, this gain
would go to the owner of bullion in
stead of to the Cover nment. He would
be enabled to take his silver, for which
in any market he could get but 63 cents
an ounce, to the minis and have it
coined into standard dollars which the
legal tender clause would oblige people
to take at one dollar, although the
bullion in them were worth but 1916 cents
In other words, the government would
oblige its people to pay the mine' 81. 30
an ounce for the silver for which he
could get but GO cents it the marts Of
commerce.