The representative. [volume] (St. Paul, Minn.) 1893-1901, 1894-08-08
CHAPTERS ON SILVER.
Written for the Chicago Times by
Hon. III. G. Miller.


Hon. Ii. G. Miller.
To the Editor:
Ratio in our coinage laws means the rela-
ton which given quantity by weight of
one of the metal laws bear to a given
quantity Of the other as it's legal equiva-
lent.
If the mint is opened to the equal recep-
ton Of both metals and the ratio prescrb-
ed by law as to 16 then the coins struck
from one ounce of gold are the legal equiv
alent of the coins struck from 16 ounces OF
silver and being equivalent representatives
of the money mint they must, when used
as money, bear the same value; for things
that are equal to the same thing are equal
to each other. Hence, this talk about dol
lars having different degrees of purchasing
power and the value of the silver dollar
being less than that of gold dollar is non
sense When the two metals flow through
the mint into currency terms of perfect
equality upon ratio prescribed by law the
mint affords to each of them a permanent
market at it's legal value and it's commodity
or market value can never fall below it's
mint or legal valuation. The movement of
the metals is governed by law as mex
orable as that Of gravitaton which impels
each of them to the place or country where
it will exchange for the larger quantity of
the other metal. If the mint valuation is
an generalization of one of them as COM
pared with the other-that is. if it will ex-
change for a larger quantity of the other
metal at the mint than in the market it
will be attracted to the mint; and, as
lenders always lend the cheapest money
and debtors pay the cheapest, this will in
crease the demand for it for monetary use
and consequently raise it's value, while the
demand for the other metal will in a cor
responding degree be diminished and the
value of it will accordingly decline.
The volume of the currency will be kept
at its ordinary level, for metal re-
tires the other will take it's place. Hence,
their equilibratory action in the currency
tends to an equipose of their value When
two vessels are separated from each other
the height to which a fluid will rise in each
depends upon the quantity poured into it.
but when there is a connecting pipe be-
tween them the fluid will rise to the same
level in both, whichever receives the sup
ply, and this, says Jevous. exactly illus
trateS the movement of metals in Western
Europe under the operation of the French
law of 1903, which provides for the unre-
stricted coinage of both upon a ratio of 1
to 1512, and which gave to the coins struck
from each the office of unlimited legal ten
der. Their legal tender function was the
connecting pipe and the fluid drawn from
either of them a single fluid, though
in the inflow the color of one of them may
have been white and that of the other
yellow. So, when the standard is bimetal-
lie the resulting money is a single money,
and in it's relation to commodities eX-
DroSSlNp single Standard
but is called the bimetalc standard be-
cause two metals are selected for monetary
use, and to dispel the notion Of a double
measurement Mr. Helm in his recent valu
able work, called it the joint standard"
The effect of this standard is to steady the
value of money and the consequent prices
of commodities and prevent those sharp
fluctuations which inevitably take place
when only a single metal is used.
Our able secretary Of the treasury, in his
banqueting speech at New York, Nov. %,
1898, said: For my part l have never been
able to understand what is meant by BIZ
metallic Standard 1t is not an impert-
nent suggestion that he should suspend his
opposition to it until he shall have learned
what it is Under this law of 1903 the mint
of France was open to the reception of
both metals upon equal terms for 70 years,
during which period, although the relative
quantities of the two metals changed from
to l of silver to to of gold, 151a ounces
gold the world over. and this pract-
cally the par of exchange between silver
and gold-using countries during that time.
The operation of the French law demon
strated that while silver sometimes pre-
dominated at other times gold any
changes in their relative quantities did not
affect their relative value. The large in
crease in the quantity of either metal sim
ply had the effect of charging the quantity
of the money stock and stimulating indus
try. OF course, we canot expect that the
metals be kept at all times on parity
in the London market, where gold alone is
money, and silver is treated merchan-
disc; their slight disparity was never re-
garded in commercial transactions. NJ
Cernuschi who was most familiar with this
subject says that from 1903 to 1873. owing
to- the treatment of the two metals by
France, money exchanges between Eng
land and India were uniformly reckoned
upon the basis of the equivalency of 10
rupees of silver and fl Of gold. Therefore
England, a gold-using country, and India
a silvt-using country, enjoyed throughout
this period the full benefit of the bimetallic
standard and the relation of gold and sill
yer to comodites among all commercial
nations was the same. In this respect it
was precisely though a single metal
had beeA selected for monetary purposes.
~.
What it money? In a gold-using country
it is silver coin, and in bimetallic coun-
try it is silver and gold coins Money is a
creature of law, and it is the settled law of
this county that congress, under the
power granted in the constitution, can pro-
vide for issues by the government of paper
money, and endow these issues with all the
functions of money, making this money
a legal tender in payment Of debts and
therefore money Of ultimate payment
France has, reckoned in our currency,
about $500, 100000 of irredeemable paper
money circulating side by side with gold
and silver and having the same relation to
commodities that the coin struck from
these metals have. Therefore, in giving
definition of money, we must turn our at
tention away from the material or sub
stance of which money is made and confine
it to the office which it performs and say
with Senator Jones, Money is a function
and that is money which performs the
function of money, or rather. which is
legally endowed with that function without
regard to the substance of which it is made
or in which it may be embodied. In it's last
analysis money is an idea or mental con-
ception but to be employed in the tran
sactions of life, it must be represented by a
sensible object 1t was upon this theory
that our monetary system was constructed
In one of the sections of the act of 1872
preserved in section 1854 of the revised
statutes. it is provided THE money of ac-
count of the United States shall be ex-
pressed in units or dollars. dimes or tenths
cents or hundredths and mills or thou
sandths and all accounts in the public
offices and all proceedings in the courts
shall be kept and had in conformity to this
regulation" In another section it is pro-
vided. There shall from time to time be
struck or coined at the mint, units or dol
lars each to be of the value of the Spanish
milled dollar and to contain 371H grains of