The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1894-01-24
MIR. sHERMAN,s CONFESSION.

MIR. SHERMAN'S CONFESSION.
The populists who have been insisting
on sub-treasury scheme by which the
government should make advances of
money to farmers, on deposit of grain,
may take fresh courage from the fact
that Senator Sherman has made explicit
declaration that his late lamented silver
law was a measure of exactly that
which always follows wherever Sherman
leads, has promptly taken up his state
ment as the law and the gospel. 1t is
the more encouraging to these populist
theorists because John Sherman has long
been held up as the apostle of sound
finance, though there is hardly any view
of any financial question that he has not
held and advocated at some period of
his disastrous career. That he should
now appear as an advocate of populist
financial theories is not at all astonish-
ing, and it will probably help the popu-
lists along on account of the large re
publican following that John always
carries with him. Mr.. Shermans state
ment is as follows:
Under the so-called Sherman law the
silver bullion in the treasury was to be
held as a fund of redemption for the
silver certificates issued against 1t. Now,
in Ohio, when the railroad development
progressed, the farmers would bring
their wheat to warehouses for storage.
The one holding it would often speculate
upon the grain, and it came to the pass
he would often sell 1T. 1t was all right
if he could pay the former full market
value when he called for it. But il hap
pened too frequently that those so en-
gagged could not pay. The result was
that the Ohio legislature passed a law
defining such action as larcenouS. To
take the seigniorage and coin it would
compel the coinage Of the silver redemp-
ton fund now in the treasury vaults.
This, under the Ohio law 1 have recalled,
would be larceny. Under the Sherman
law and a section not repealed it is to
be held a redemption fund. Then
again there is a class who want to is
sue treasury notes on the SeigniOra &c;
that is, estimate what the seigniOrage
ought to be and pledge it as a fund of
redemption for the issue Of treasury
notes. This class forget that the silver
in the treasury vaults has had a great
shrinkage in value. 1t is not now, at the
present market value of silver, worth
within S17,000,00O of its cost to the
United States. All schemes of this kind
simply aim at fiat money. If you take
away the fund of redemption behind the
silver certificates now eXtant these be
come fiat money.
As a matter Of fact this statement is
as false and misleading as any of the
other fallacies that the great Tepub-
lican fnancier has advanced at various
times, but that will not interfere at all
with the impression it will make on
the mind of the average republican, for
he will believe it is true because Sher-
man says so. There is no similarity be-
tween the Ohio storage of wheat and
the purchase of silver under the Sher-
man law. When a man stores wheat he
does not part with the title He merely
entrusts it to the warehouseman for
safekeeping, and the latter has no more
right to sell it than the checkboy at a
hotel has to sell the hat or Overcoat of
a guest, or an express company has to
sell the articles given it for transporta-
government under the Sherman law was
bought absolutely. There was no stor-
age in it, The law expressly provides
for the purchase" Of silver and moth
ing else. The title passed to the govern
ment and its ownership is complete.
Furthermore, the bullion so purchased
was not to be held as a fund of re-
demption for the silver certificates is
sued against it, The law provided
nothing of the kind. There is not a sim
gle silver certificate, and never was one,
that is redeemabIe in silver bullion.
They are redeemable in silver money,
and there is no fixed relation between
our silver money and the price of silver
bullion. There is a fixed relation be-
tween the silver dollar and the quantity
of bullion, for a silver dollar must con-
tain exactly so much silver. There is
no reason why the government may not
coin this silver if it so desires, or coin
the amount over and above what is
needed to make enough dollars to re-
deem the silver certificates All the sill
yer certificates and all the other paper
money of the country will have to be
-edeemed ultimately in coin, on a gold
basis, and it makes little difference
what form the money taxes. 1t is all
credit money in any event, whether sill
yer or paper.