Birmingham age-herald., 1894-08-25
FINANCIAL PRINCIPLES.

The following enquiry came in the AGE HERALD's mail yesterday morning:
 EAST LAKE, Ala. Aug. 24, 1894 To the Age-Herald:
 Please explain in your paper the meaning of the expression ''16 to 1'' and ''20 to 1' as used with reference to our present money sys- tenn Yours truly, A. W. McGAHA.
 The expression ''16 to 1'' as commonly used, means IS grains of silver in the silver dollar, to one grain of gold in the gold dol lar. And the expression "20 to 1' means 20 grains of silver to 1 of gold, In broader sense, the expression means ratio or propor tion, and may refer to grains, ounces, etc. The expression was used very often last fall during the debate in Con- gress over the repeal of the purchasing clause of the Sherman law. The radical free silver advocates like Senator Stewart demanded that the government coin it's silver and gold in the ratio of 16 to 1, but the more conservative element if they could not get that proportion said they would &C., cept 20 to 1. Jn France, the ratio Is 1b5 to l. There are 412lb grains in the silver dollar and 25 S-10 grains in the gold dollar .900 fine.
 The commercial value of silver in a silver dollar is a little over half the value of gold in gold is aply- about 50 worth of silver in the silver dollar. The remaining value of 50 cents is fiat. Only the stamp of the government makes the silver dollar pass at par with the gold dollar. The unlimited coinage of silver, without international agreement, or some legal restriction, would inevitably lead to appreciated currency, which is the greatest curse that can befall nation. In the early days of civilization governments did not coin money. The medium of exchange was bar of gold or silver, and it's value was based upon it's weight. This medium of exchange was found inconvenient, as man must carry pair of scales with him to test the weight of the bar. Therefore, the government was asked to put it's stamp on the bar, certifying as to its weight and fneness. Now, the government exceeds it's original authority and puts fictitious or fiat value upon silver coin.
 In an able address on this subject before the senior class of the University, Hon. John M. Martin of this city gave some val uable views on the monetary question. His remarks were in reply to the question, "Is the unlimited coinage of silver to be desired?'' He said that if the free coinage of silver would put more wealth in the hands of the people, then he favored it. but such would not be the case. On the contrary it would result disastrously to the people, and especially to the working men, for they are the first to feel the effect of a depreciaied currency. Much of the confusion resulting from discussion of this question arises from the failure to realize the true point at issue, viz: Shall we have a certain fixed, sure and stable measure of value for money? The fact that a silver dollar is now kept quite equal in value to one in gold is due to the fact that the coinage of silver is kept in the hands of inc government, who first owns the dollar before the citizen gets it; :. and no one can obtain one of those silver dollars without giving in exchange for it a dollar in gold coin or it's equivalent. This valuation of the silver dollar is creature of the governments might, and when we strip it off by allow ing free coinage of silver, will pass away al once, leaving the silver dollar worth only its bullion value, with or without the cost of coinage added, dependent upon whether the government charges for the coinage. A well-known political econo- mist says: ITO possess value it must pos- sess utility, and must have cost labor for its productiou; cost-i. e.. labor-and util- jty are the two essential factors in order that the quality of value may be possessed by any commodity; hence the standard measure of value must be an object of util- ity, and must have cost labor for its pro- duction; and, possessing these two factors, it will possess yalue.'