Little Falls weekly transcript., 1894-10-05
POPULIST FALLACIES.
CONTINUED FROM FOURTH pAGE.l

CONTINUED FROM FOURTH pAGE.1
I. y, wss, open to the unlimited coinage Of both
Rold ana silver, her legal ratio was such as
!. 70 9 overvalue silver and undervalue gold
As A 9 9 consequences Of this, silver circulated
as money, while gold did not. In other
Wofds, though nominally a bi-metallic
country, france was in actual fact mono
metallic country; that is, she had silver
mono-metallism. 2 5,
About 1850, as you all know, there were
great gold discoveries in Rnssia Anstra.
liza and California The actual production
Of gold leaped within q year or two from
an average of little more than S13 OOO OOO
TO an average of about $133, ,OOO. 900 AS
consequence, the value Of gold fell.
Before 1851 an ounceiof pure. gold was
worth more than Is 10 ounces Of nnre sill
yer; but for the succeeding 16 wears. an
ounce of gold was worth less than * 10
ounces Of silver. During those wears.
therefore, it was more profitable to take
gold to the mint than to the market. while
tne 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
tment from Cairne's ESSAYS in Political
Economy, page 49, until the recent
perlOd the metal which formed the staple
rof the French currency was silver. but.
owing to the fall in the value of
gold, consequent upon the discoveries,
gold is now q86O rapidly taking it's place
and becoming the principal medium of
circulation. Up to the year 1852 the i'm
Portatlon of silver into France was always
largely in excess of it's expectation; but in
tnat year the tide turned, and has since
continued flowing outward with increas-
ing vOlume''
In Laughlin's History of Bi-metallism'
i lind the following corroborative state
:ment:
Since 1903 legal ratio of 1 to Is 10 had
been maintained by France without
change. 4 [Up to 1881 the French
legal ratio gave gold a less value in the
form of coin than it possessed in the form
or bullion, while silver was given a 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. y During the years from 1859
to 1854, France absorbed through direct
imports about $3.50, 600, 900 of gold, and
elected about $345, 900, 900 of silver. The
French mints 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.
hnY oSr,+ 4ol~1 49,
the legal ratio between gold and silver was
liked at to Is. This remained the legal
ratio for 42 years. But during all that
time there was not a 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. 51>"t ~ Il, T., - $780, ,.,>- s.e.'
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, 900 a
year for the AZ 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 situations:
LAS early as 1918 the United States be-
gan to recognize that HanliltOn's ratio of
1 to Is differed so much from the market
ratio between gold and silver, that if it
were designed to maintain double stand
ard a new adjustment of the legal rela-
tions of the two metals was necessary
While nominally possessing a double
standard, the country really had only one
and that 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 a 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,
cite the following statement by the Hon.
@. L.. Dunham, as given in the Congress
sional Globe of February 1, 1853, and this
is but one of many historical statements
that might give to the same effect:
"There is, then, constant stimulant to
gather up every silver coin and send it to
the market as bullion to be exchanged for
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 50 years, from 1903 to 1852,
the actual circulation of only one, namely
silver; that, with the legal relations un-
changed, she had for the next IA years the
actual use of gold only.
This change from silver monometallism
to gold monometallism took place, 1 re-
peat, while the legal status Of the two