The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-06-16

The bullion value of silver and gold,
here and elsewhere. has always rested.
ard rests today. upon the single and
simple item OF belief. 1t is an old belief,
universally credited, based upon the
actual experience of one hundred genera
tons OF the human race. 1t is this:
That, as there has been in the ages past,
so there Il be in the years to come, no
discovery in either of such metals which
as to quantity or as to the expense of
producing shall make them comparable
IN value With any other materials suita-
BILE for the use OF mankind as money.
The faith and credit OF mankind in the
natural and unconquerable limitation OF
supply of those materials rests mistaken
and undisturbed, as it did at the first
dawn of commerce, as it did in the days
OF the old patriarch, when silver was
current money with the merchant.
There has always been difference be-
the two metals and the legal coinage
value. This characteristic or difference
attaches to both. No denomination OF
the gold coinage Of the United States has
a bullion value equal to the legal tender
value thereof. The gold dollar is not
what W at it purpports to be. The whole series
of these gold coins is made from bullion
only nine-tenths fine. l do not go into
the reasons for this-I state the fact
Inc whole of the gold coinage is tithed-
il is placed under par bullion value by
the subtraction of one. tenth. This is
why these coins outside of our own issue
pass only by weight. not by count. The
missing tenth is what is called alloy.
This alloy is not gold at all-it is mix
ture OF copper and silver. only one-tenth
OF silver and nine-tenths copper. OF
course this alloy reduces the commercial
value as metal OF the whole series of gold
coin. This is nowhere spoken of because
nj C1nir or 10 "a
vocates of gold monometallsts, that
piece OF money whose bullion may be less
than its commercial value is unsound
and dishonest.
The same with silver coinage. the
dollars and that part calledesubsdiary
money. This is coined under par COM
mercially. Like the gold coins the alloy
is one-tenth wholly OF copper, and besides
that the proportion OF grains of metals
used diminishes with the denomination
of the coins. The half dollar has but
1872 grains. a good deal less than half the
dollar has only So grains; the dime has
only 50 grains-the holder of ten dimes
has only $50 grains. yet he can get halves
or quarters for the whole for these dimes.
notwithstanu .ng the cost price of the
metal in them is far below its lawful
value. The nickel passes for five cents.
The bullion value of the metal which
composes it is not half the legal. The
cent coined by the United States. made of
95 paris of copper and parts of tin and
zinc. lis worth as metal not more than one
third it's lawful or legal value, which is
the one-hundredth part of dollar.
still we have no other coin than this.
All our balances when settled in coin
are paid in it. The largest payments are
made in the alleged gold; and the silver
dollar with its group of fractional parts
and subsidiary coinage performs the func-
tions Of money. is passed, paid and re.
ceived as coin of ultimate liquidation.
busnsss2
An American CHEAP money" expert
ment was tried in this country at the
close Of the revolutionary war, when the
people of Rhode Island found themselves
in extreme poverty and heavily 1urdened
with their share OF the national debt. In
1875 they began to clamor for paper
bank. and carried the qestion into the
elections, where they won surprising
victory, gaining control OF the general
mbly by large majority in May 1856
and one of its first acts was the passing
of law establishing paper money bank
OF 500, 900. The bills were to be loaned to
the people, and every farmer or merchant
who came to borrow money must pledge
real estate for double the amount desired.
The money was to be loaned to the peo-
pie upon this pledge according to the
apportioment of the last tax. and must
be paid into the treasury at the end of
entertained by the farmers of the benef-
cent results which were to follow upon
this new influx of wealth. Many from
all parts OF the state. says McMaster IN a
very interesting chapter upon the sub
jcct in his History of he People of the
selves of their good fortune, and mort
gagged fields strewn thick with stones and
covered with cedars and stunted pines for
sums such as could not have been obtained
for the richest pastures. They had, how
ever. no sooner obtained the money and
sought to make the first payment at the
butchers or the bakers than they found
that heavy discount was taken from the
face value"
The depreciation of the new money be.
gan literally with its issue. Every mer-
chant and tradesman in the state refused
to receive it tor Its face value. and the
holders of 1t refused to make any dis
count. The general assembly came to the
aid of the bank and sought to give its
paper money full value by statutory en-
actment. A forcing act was passed SUBJ
jecting any person who should refuse to
take the bills in payment for goods on
the same terms as specie, or should in
such terms to fine of 500 and to the
loss of his rights as freeman. This
made matters worse than ever. Merchants
and traders refused to make any sales
whatever, many of them closing their
shops. disposing of their stock by barter
and going out of business. In fact. mon.
ey almost ceased to circulate at all.
Nearly all kinds Of business was transact.
ed by barter, rents were paid in grain
and other commodities, and the only
people who used the paper money were
those who had borrowed it on their land.
The chief cities of the state. Providence
and Newport: presented very remark
able spectacle. Half their shops were
closed. their inhabitants idle. ana their
streets animated only by groups of an
cry and contentious men blaming one an.
other for the blight which had fallen