Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-03-05
WHAT "sEIGNIORAGE, MEANS.
A Statement Which Will Make Plain
the Purposes of the Bland Bill.

From the Review Of Reviews.
1t was hoped by the country in general,
when the long silver struggle in the au-
tumnal session resulted in the repeal of the
Sherman law, that the agitation of the free
silver coinage men would be allowed to rest
in allegiance for at least a year or two.
Even many of the strongest friends of BIZ
metallism believed that the movement for
the restoration of silver as money metal
would be best promoted by policy of wait
ing. But this view was not entertained by
Mr.. Bland and the majority of his House
committee on money and coinage Accord
ingly, when the Wilson tariff bill with its
income tax appendage was passed and sent
to the Senate, and when the McCreary reso-
luton sustaining the Presidents Hawaiian
policy was accepted after several days of
stormy debate. Mr.. Bland was ready to
force the discussion Of his proposal to initiate
the currency by turning the Sherman treas
ury notes into silver certificates, and by is
suing an additional $50, 600 900 of such silver
certificate currency through the process
commonly known as coming the seignior-
age" If there should happen to be a read
er of the Review of Reviews who does not
understand exactly what Is meant by Mr.
BANDS proposal to put SJ5, 100000 into the
treasury by coming the seigniorage," he
need not feel especially discouraged.
There are members of Congress who
would find it hard to explain clearly. The
word seigniorage has usually been applied
to the mere fraction of one per cent charged
at the mint to cover the expense of convert
ing bullion into coin. broade- definition,
however, and one that is sanctioned by the
Century Dictionary" is as follows: ."The
difference between the cost of a mass of
bullion and the face value of the piece COIN
ed from it," Now, the Sherman act called
for the purchase by the government of H.
100000 ounces of silver bullion each month
at the current or market price for silver
bullion. The government paid for the bull
lion in special treasury notes. Inasmuch
as the price of silver was constantly fiuc-
tuating, the volume of these notes issued
from month to month was never the same,
although such monthly issues were always
based upon practically the same quantity
or bullion. Altogether, from the time of the
passage of the Sherman act in July 1880,
up to its repeal on November l. 1893, some
what less than 1854 100000 was issued in
treasury notes in payment for great mass
OF silver that now lies in the government
vaults.
Our standard silver dollar contains 81 .25
grains of pure silver. The mass of bullion
bought with the $l54,000,O0O of treasury
notes is great enough to make about 20o,-
100000 standard dollars if it were actually
coined. Thus, in 1890 the bullion value of
the silver dollar fuctuated between % and
"a cents, but averaged 81 cents for the yea.
In 1891 it averaged about 76 cents. In 1892
1t averaged little over 81 cents, and in
1893 the average was not far from 60 cents.
Thus far in 1894 the price has been consid-
e-ably lower still. and at the market price
for silver bullion in February the $l54, OOO-
UO OF treasury notes would have bought
bullion enough to coin very nearly 300, OOO-
600 standard dollars. The simple fact them
Is that sl54,OOO,OOO approximately of these
treasury notes are outstanding, and that
the mass of silver behind them is great
enough to coin not only 15I. coo 900 silver
dollars, but also some S55.0OO0Oo additional
The Sherman act made these notes redeem
able in gold or silver coin, and gave the
Secretary of the Treasury authority at his
discretion to coin the silver. But it will re-
quire number of years. working all the
mints at full capacity, to manufacture the
$4,000, 200 silver dollars for which there is
no demand.
MIR. BANDS idea IL TO expand the circu-
lating paper currency represented by this
mass OF silver IRON the outstanding issue of
treasury notes to an amount $55 900 900
greater, nv treating the whole of ii as If Ii
were d deposit of coin id silver dollars for
each of which CORES bonding paper dollar
should be sent out. II this measure should
become a law its effect would be to nut
So5,OOO,OOO into the treasury of the govern
ment to help the Secretary out of the diff
culties occasioned by the serious deficiencies
In the current revenue. But, inasmuch as
the continued Gepreciat ton of silver has
made the mass brought under the Sherman
act worth in the market today considerably
less even than the 1854, 900 of treasury
iOtcS' II 10 pam lHdl tNe issue OF additional
notes as against the seigniorage so-called
would be no better than an out-and-out is
sue OF fiat money. In fact, as between this
proposition and that of the Greenba ckcrs
who have always consistently demanded the
unambiguous issue of treasury notes secured
by nothing but the credit of the nation, the
latter method would seem preferable
Moreover. the proposition helps the silver
mining industry in no manner, directly or
indirectly 1t is makeshift that has little
TO commend it, and that is Objectionable
upon many grounds