The times. [volume] (Richmond, Va.) 1890-1903, 1894-03-08
WHAT "SEIGNIORAGE" MEANS.
& Statement Which viii Make flsin the
Purposss of the Bland Bill.

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 De al
lowed to rest i'm allegiance Tor AT ledst
year or two. Even many OF the strongest
friends Of bimetallsm believed tnal the
movement for the restoration OF SILVER a5
"A money metal would be best promoted
by a policy Of waiting. But this view was
not entertained by Mr.. Bland ana the
majority Of his House Committee on
Money and Coinage. Accordingly, Wheh
the Wilson tariff bill. with its income-tax
appendage. was passed and sent TO the
Senate and when the McCreary resolu-
ton sustaining the Presidents Hawaiian
policy was accepted after several days OF
stormy debate, Mr.. Bland was ready 10
force the discussion OF his proposal TO
initiate the currency by turning the Sher-
man treasury notes into silver certln-
Gates and by issuing an additional Aoo'-
100000 OF such silver certificate currency
through the process commonly known as
"cOining the seignioraSe. III there
should happen to. be a reader OF the
Review OF Reviews who does not under
stand exactly WI at Is meant by Mr..
BANDS proposal 20 put S55,o0J,000 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
piled 10 the mere fraction Of per cent.
charged at the mint TO cover the expense
Of converting bullion into coin. A broad
er definition. however. and one that Is
sanctioned by the Century Dictionary
is as follows. 1.-The difference between the
cost Of a mass Of bullion and the face
value Of the piece coined from it," Now.
the Sherman act called for the purchase
by the Government Of 100000 ounces Of
silver bullion each month at the current
Government paid for the bullion in special
treasury notes. Inasmuch IA the price Of
silver was constantly fuctuating. 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 OF
bullion. Altogether, from the time of the
passage OF the Sherman act I'm July. 1890,
up 10 its repeal on November ]. 1898.
somewhat less than Sl54. 100000 was issued
in Treasury notes In payment for a
great mass OF silver that now lies i'm the
Government vaults.
our standard silver dollar contains
ILL grains Of pure silver. The mass
of bullion bought with the Sl54O0O.OOO OF
treasury notes Is great enough 10 make
about 29,OO0,0O0 standard dollars II il
were actually coined. Thus. I'm 1880, the
bullion value Of the silver dollar fuctu-
ated between 90 and "A cents, but aver
aged ~ cents for the year In 1891 IT
averaged about 20 cents. In 1872 il
Il
1898 the average was not far from 90
cents Thus far I'm 1894 the price has
been considerably lower still, and at the
market price for silver bullion in Febru-
airy the Sl54 10000 OF treasury notes
would have bought bullion enough TO
coin very 7 early 300 600 standard dol
lars The simple fact then, is that
S154 100000, approximately. of these
treasury notes are outstanding. and that
the mass Of silver behind them Is great
4 ell
yer dollars, but also some $50 0OO, 600 adj
ditOnal. The Sherman act made these
notes redeemable In gold or silver coin,
and gave the Secretary OF the Treasury
authority at his discretion 10 coin the |
silver. But IL will require a number OF |
years, working all the minis at full ca |
pacity. 70 manufacture the 2O9OOO.OO sill |
yer dollars for which there is no demand |
Mr.. BANDS idea is 10 expand the cir |
Culating paper currency represented by |
this mass Of silver from the outstanding |
issue Of treasury notes 10 an amount |
So, 100000 greater. by treating the whole |
Of it as II II were a deposit OF coined |
silver dollars. for each Of which a cor |
responding paper dollar should be sent |
out. IL this measure should become |
law. its effect would be TO put $4,000. 600 |
into the treasury Of the government to |
help the Secretary out Of the difficulties !
occasioned by the serious deficiencies in |
the current revenue. But, inasmuch as |
the continued depreciation OF silver has |
made the mass brought under the Sher-
man act worth I'm the market to-day |
considerably less even than the Slj4 go
900 Of treasury notes. IL il plain that
the issue OF additional notes az against
the seigniorage sO-called would be no
better than an Out-and-Out issue Of fiat
money In fact as between this DrOpO-
siticn and that Of the Greenbackers. who
have always consistently demanded the !
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 a
that has little TO commend IL.
and that is Objectionable upon many |
grounds. -Heyiow Of Reviews