The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-05-21

Gliding upon this ratio. neither Nj Ham
Aton, who recommended %. nor the con-
gress which adopted b.. supposed they
were arbitrarily establishing the relative
values OF the two metals, for no legisla-
tive authority could Go that. but IL was
supposed that they were simply adopting
and utilizing ia the statute law the eX-
isting intrinsic or commercial ratio be-
tween them. A brief experience, however,
showed that a mistake had been made,
ana the inevitable result followed IL
soon became evident that = pounds OF
silver were not 10 fact equal IN value 70
pound Of gold, AMI that no matter what
words were printed ga the statute book
the people in the transaction Of their
business wholly disregarded the legal
ratio and treated the metals according
10 their relative commercial value, and
tnat they would not exchange i pound
or gold for. Is pounds OF silver, either I'm
coin or In bullion nor use gold coins as
money when the amount Of bullion in the
coin was worth in the market more than
the coin itself n short. silver had been
oFer-valued and COLA had been under
valued in the law. and the consequence
was that by the year 1872 gold had dis
appeared from the country, and from
that time on until after the passage Of
the act of 1884 the United States had prac-
ucally silver mcnometallism. In May,
1850. President jefferson stopped the coin
age OF the silver dollar, and during a
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 OF fun weight as compared with
the dollar and were legal tender, and
these coins. with Spanish dollars, French
crowns or 5-franc pieces. and bank notes
constituted our circulating medium. Gold
having disappearei from circulation, con-
gress determined, in 1894. to bring il
back by changing the ratio. The act Of
1884, supplemented by the act 1897, pro-
vided that the legal ratio should be 16 TO
j. that is, that Is pounds of silver in the
coins should be equal 10 ! pound of gold
in the coins, and the effect of this was
to drive silver out Of circulation and sub
stitute gold in its place, because silver was
under-valued and gold was over-valued
in the statute. one pound OF gold, coined
or uncoined. was not, in fact, worth in
trinsically or commercially 16 pounds Of
silver, coined or uncoined, and therefore
the coins of the two metals could not
circulate together at that ratio The au-
thors and supporters OF this law well
knew what the effect of such a legal
ratio would be in case IL did not conform
to the commercial ratio, but the great
object in view was the restoration OF
gold to the circulation, and all other
CONSIDERATIONS were cunOEulndteU 10 that.
Doubtless many of them still believed that
the so-called double standard could be
maintained and that the coins of the two
metals could be kept in circulation to-
gether at the new ratio; but they were
mistaken. Silver went out and gold came
in. The gold basis was established in
1894, by the practical operation of the ra-
ito, just as completely and effectually as
il il had been expressly declared in the
statute Hero fhnn furo I'D
ments in the free coinage of the two
metals in this country, covering a period
Of eighty-one years. at legal ratios very
nearly corresponding to the real relative
values in the commercial world, and they
both failed, in one case because silver
was over-valued' and in the
other case because gold was
over-valued. A very small percentage of
difference between the legal ratio and the
commercial ratio has always been found
sufficient in modern times to drive the nn-
dervalued metal entirely out and substitute
the other, or paper based upon the other
in it's place, and no congress or parlia-
ment can repeal or alter the natural law
of trade by which this movement of the
metals is governed.
In 1853 congress In order to maintain the
circulation of subsidiary coins-half dol
lars, quarters and dimes-reduced the
weight of the metal contained in them
and made them legal tender only ian the
payment of sums not exceeding five dol
lars I'm amount. Under this act the value
Of the bullion contaiped in two hah-dol-
lars, four quarters, or ten dimes was not
equal to the value of the bullion contained
in either a gold or silver dollar, and con-
sequently these small limited legal tender
coins went into circulation and remained
in use until expelled by the cheaper paper
currency issued during the war; not being
fun legal tender, they could not drive
out the gold coins.
This was the condition of our monetary
system at the time the act of 1873 was
passed. Our legal position was bimetallic
but our actual measure of value was gold
and our actual circulating medium was
paper, with purchasing power measured
by the gold standard. We had no silver
and it had no influence whatever on our
prices. or on our ability to pay debts.
The act of 1873. therefore, did not and
could not take away from the people of
the United States any advantage they
then possessed, but II did prevent the coin
age of full legal tender silver dollars there
after, and the act of 1874 DESTROYED the
debt-paying power of the old standard
dollar coined before 1873, except in sums
not exceeding i've dollars. If there had
been any such dollars, in circulation or in
existence here, this latter act would have
abridged the ability of debtors to dis
none, it had no practical effect at that
time.
Thus we remained until 1873. We had
tried to keep the legal-tender coins of the
two metals in circulation at the same
time under a system of free coinage, but
had utterly failed. In 1873 a new policy
was adopted, and it was determined to