The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1894-10-05

AS consequence OF InlS, SILVER clrCuidCu
as money, while gold did not. In ouneI
words, though nominally bi-metallic
country, France was in actual facta mono
metallic country; that is, she had silver
recommendation.
About 1850, as you all know, there were
great gold discoveries in Russia, Austria
liza and California. The actual production
OF gold leaped within a year or two from
an average OF a little more than S13,OO0,OOC
to an average of about Sl33, 100000. As
a consequence, the value of gold fell.
Before 1851 an ounce of pure gold was
worth more than Is 1-2 ounces of pure sill
yer: but for the succeeding 16 years, an
ounce of gold was worth less than ID IL
ounces of silver. During those years
therefore, it was more profitable to take
gold to the mint than to the market, while
the opposite was true of silver. During
those years gold was coined and circulated
as money in France, while silver retired
from circulation.
In justification of what have been say
ing, cite the following historical state
ment from Cairne's Essays in Political
Economy, page 142: Until the recent
period the metal which formed the staple
of the French currency was silver, but,
gold, consequent upon the discoveries,
gold is now QS60) rapidly taking its place
and becoming the principal medium OF
circulation. Up to the year 1852 the i'm
portation of silver into France was always
largely in excess of its eXportation; but in
that year the tide turned, and has since
continued flowing outward with increas
ing volume"
In Laughlin's History of Bi-metallism"
l find the following corroborative state
ment:
''Since 1903 legal ratio of to Is 1-2 had
been maintained by France without
change. up to 1852 the French
legal ratio gave gold a less value in the
form of coin than it possessed in the form
of bullion, while silver was given greater
value as coin than it possessed as bullion.
AS natural consequence, gold disap-
peared from circulation and silver took
its place, so that by 1850 the main part of
the circulation in France consisted of sill
yer. During the years from 1852
to 1864, France absorbed through direct
imports about S6S0,000,0O0 of gold, and
elected about S345, 100000 of silver. The
French minis were actively engaged in
coming this gold into the form in which
its legal value was greater than as bull
ion."
The Experience of the United States.
When our mint was established in 1892,
the legal ratio between gold and silver was
fixed at to Is. This remained the legal
ratio for ~ years. But during all that
time there was not year after 1898 in
which this legal ratio was not an over-val.
uatiOn of silver and consequent under
valuation of gold. In other words during
all those years the mint was the most
profitable place to take silver, while gold
could be more proftably disposed of in the
market. Inasmuch as each was naturally
disposed of where it brought the best re-
turns, we are not at all surprised to learn
that silver was coined and circulated as
money. while gold remained out of circu-
lation.
In confirmation of the foregoing let me
cite the following statement from Senate
Document No. 10, first session Twenty
first congress: Our gold coins are with
drawn from circulation soon after they
are issued from the mint" That is, what
ever coinage of gold there was, and it was
small averaging something over $500, 600 a
year for the ~ years. was simply for the
purpose of facilitating the sale of gold as
coin.
In Laughlin's History of Bimetallism,
page 81, find the following statement of |
the situation:
''As early as 1918 the United States be-
gan to recognize that Hamilton's ratio of |
l to Is differed so much from the market
ratio between gold and silver, that if it |
were designed to maintain a double stand
ard a new adjustment of the legal rela-
tions of the two metals was necessary
While nominally possessing a double
the country really had only one,
and that a silver standard"
In 1884 the legal ratio of the United |
States was changed from Is to 1898, and |
since then the ratio has remained un-
changed. That is to say, since 1884 an
ounce of gold has been treated at the mint |
of the United States as exactly equal in |
value to 1898 ounces of silver. But, for |
the succeeding 40 years, this over-valued |
gold at the mint while it under-valued sill |
yer. AS consequence, gold was taken to
the mint for coinage purposes, because
that was the most profitable way of dis
posing of it, while silver was sold as bull |
lion.
In confederation of what I have said, I |
cite the following statement by the Hon. |
G. l.. Durham, as given in the Congress
sional Globe of February l, 1858, and this |
is but one of many historical statements
that l might give to the same effect:
''There is, then, a constant stimulant to
gather up every silver coin and send it to
the market as bullion to be exchanged f..
gold and the result is the country is al. |
most devoid of small change"
What Does Experience Teach?
We have seen that in France, with the
unlimited coinage of both metals, there
was for nearly so years, from 1903 to 1852,
the actual circulation of only one, namely
silver; that, with the legal relations I'M
changed, she had for the next IA years the
actual use of gold only.
This change from silver recommendation
to gold recommendation took place. I re-
peat, while the legal status of the two
metals remained unchanged it was nat
ural consequence of the change in market
value of the two metals, resulting from
the tremendous increase in gold produc-
ton at that time. l need hardly point out
to you the perfectly obvious fact shown by
this experience, that France was entirely
unsuccessful in her effort to secure actual
bimetallism by keeping her minis open to
the unlimited coinage of both metals,
though both were full legal tender.
The experience of the United State has
shown the same truth up to 1854 althouph