Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1895-05-21
CARLISLE ON MONEY.
CONTINUED FROM FIRST PAGE,

the bin introduced by him was pgecisey
the same as tho one that had passed the
Senate--that is. Il made no provision Tor
vich coin. However. when the bill was
finally reported back from the committee
10 the House II was 10 amended as 10
provide for the coinage OF a subsidiary
plece. 20 be called q dollar. and to con-
lain sA grains or standard silver, the
same as the French 6-franc piece, ana
AZ was 20 b legal tender TO the extent
III I'VE do. -. and no more. In THIS
form Il passed the House by very large
majorsty--in fact. the opposition to Y was
70 weak that tho yeas and nays were nov
rven called. The Senate struck out the
sfranc subsidiary dollar and substituted
for It another subsidiary coin, called the
trade-doilar, containing 40 grains OF
standard silver and provided that II
should be a legal tender 70 the amount
Df FIVE dollars. and no more. comms'-
tee OF conference was appointed the
Nenate amendment was agreed TO, ana
the bill became q law by the approval OF
President Grant on the 18th day OF feo-
ftary, 1873. This brief historical state
ment OF the proceedings. which Is FUZZY
sustained by the offiolai record, shows
that Il was well understood In Congress
that the old standard silver dollar OF
fieI 10 grains was not 10 be Thereafter
coined at our mints and that the only
difference of opinion that ever existed.
even temporarily, between the Senate ana
House was whether they would Substitute
tn ITS place a subsidiary coin containing
ss4 grains, OF a subsidiary coin contain
tng 40 grains OF silver. No proposition
was made in either body 70 continue the
coinage Of the old dollar. or TO make any
silver coin the unit OF value or fuh
legal tender In the payment OF deot@
MONETARY HISTORY.
The plain truth Is that this act Of 1873.
which has been the subject OF so much
nisapprehension and denunciauon. was
simply a legal recognition Of monetary
condition which had existed in fact III THIS
country for about thirty-five years. or ever
since a short time before the passage OF
7he coinage act OF 1S7s. From about the
year 1888 urtil after the passage OF the
pland-Allison act, In 1878. no silver DOL
lars were in circulation in this country.
and our whole currency consisted OF gold
coins and bank-notes, except from lS5z 10
1878 when our active circulation, OUTSIDE
nj California and it's neighboring territory,
xcas an paper There was during the
latter period about s250oo.0oO in gold In
circulation on the Pacific coast, ana the
United States was collecting customs dues
in gold and using II In the payment OF
interest on the public debt, but there
was no silver in circulation anywhere in
this country, not even the lightweight
subsidiary coins. The value OK the
United States note. or greenback, was
always measured by gold, and not by
silver and commodities had n gold-price
and a paper-price, but never silVer-price'
because silver. except I'm half-dollars, quar-
ters, and dimes coined under the act or 1913,
had been out OF use here for more than
twenty years before the commencement
OF the war and even these subsidiary
coins had not been I'm use for eleven years
prior TO 1873. our own monetary history
had already furnished two most striking
illustrations OF the operation OF the ma
tural law under which the coins which
are overvalued by statute always drive
out the circulation the coins which are
undervalued. Our own experience had
again demonstrated what the history OF
the world already shOwed-that whenever
the coinage laws of any country permit
the free coinage Of both metals with nun
legal tender qualities at a ratio OF value
which does not conform substantially TO
their intrinsic or commercial ratio In the
markets of the world, both kinds OF coin
cannot be kept i'm circulation at the same
time. The reason Is that, both being full
legal tender the least valuable coin
will always be used In making
payments and viii become the sole
measure OF value and the most valuable
VIII be boarded or sent out OF the coun-
try into the markets where It's real value
can be obtained.
SILVER IN THE PAST.
our first coinage law was passed in 1892,
and II provided for full legal tender
gold and silver coins at the ratio OF 10
10 THAT is TO say. fifteen pounds Of sill
yer were TO be considered as equal IN
value TO one pound Of gold, and the
weights OF the coins were adjusted TO
that rule. In deciding upon this ratio,
neither Mr.. Hamilton. who recommended
81, nor the Congress which adopted II,
supposed they were arbitrarily establish
ing the relative values OF the two metals,
for no legislative authority could do that
but II was supposed that they We're simply
adopting and utilizing in the statute law
the existing intrinsic or commercial ratio
between them. A brief experience. how
ever showed that mistake had been
made. and the Inevitable result followed
AZ soon became evident that fifteen
pounds Of silver were not in fact equal In
value to one pound Of gold, and that, no
matter what words were printed I'm the
statute book. the people In the transaction
OF their business wholly disregarded the
legal ratio and treated the metals accord
ing to their relative commercial value
and that they would not exchange one
pound OF gold for fifteen pounds of silver
either in coin or bullion, nor use gold
coins as money when the amount Of bull
lion IN the coin was worth in the market
more than the coin itself. In short, sill
yer had been overvalued and gold had
been undervalued In the law and the
gold had disappeared from the country,
and from that time on until after the
passage OF the act OF 1884 the United
States had practically silver monometal-
lism.
Ia May. 1906 President jefferson stop
ped the coinage Of the silver dol
lar. and during d period OF thirty-one
years thereafter not a single standard
silver dollar was coined at the minis of
the United States; but, under the act of
1872. the subsidiary coins were or full
weight. as compared with the dollar, and
were legal tender. and these coins. with
Spanish dollars. French crowns, or D.
franc pieces, and banl-notes constituted
our circulating medium. Gold having
disappeared from circulation. Congress
determined, In 1884, TO bring it back by
changing the ratio. The act OF 1894. sup
plemented by the act Of 1897. provided
that the legal ratio should be l6 to l.
that Is. that sixteen pounds OF silver In
the coins should be equal to- one pound of
gold IA the coins. and the effect of this
was 20 drive silver out of circulation and
bupSllutc koti IN ita lidtts DtCduSt SllNcf
was underValued and gold was overvalued
ia the statute. one pound OF gold coined
or uncoined, was not, Ia fact, worth
Intrinsically or commercially sixteen
pounds of silver coined or uncoined,
and. therefore the coins OF the two
metals could not circulate together at
that ratio The authors and supporters OF
this law knew we'll what the effect OF such
a legal ratio would be In case IL did not
conform 90 the commercial ratio, but the
great object in view was the restoration
~ gold 20 the circulation. and all other
considerations were suhordinated 10 that.
Doubtless many OF them SIN believed
that the so-callod double-standard could
be maintained. aud that the coins OF the
two metals could be kept In circulation
together at the new ratio: but they were
mistaken. Silver went out and gold came
IN.
THE GOLD BASIS
The sold basis was established in 1894.
by the practical operation OF the ratio
Jus, 90 completely and effectually as n it
HAD been expressly declared IN the stat
ute. Here, then, were two expert
ments IN the free coinage Of the two met
ais in this country. covering period
OF eishiy-one Years. at legal ratios very
nearly corresponding 10 the real relative
values IN The commercial world and they
both iailed--in one case because
silver was oyervaiued and IN the
other case because gold was over