The Portland daily press., 1895-06-28
THE SILVER QUESTION.
To the Editor Of the Press:
Silver as a Reserve.

coined money subserves in civilized So
ciety, and found that the only ones that
need be considered are, first as itself an
instrument of purchase and payment, and
second, as Reserve Fund to support the
credit and the currency of bills, notes,
cheques, and other forms of credit-trans
ference, by which all but an insignificant
part of the purchases and payments in
the commercial world are now actually
made. and having found too that coins,
especially gold coins, for the first pur-
pose might be dispensed with without
serious inconvenience, it is next in order
to consider, what, if any, disability silver
is under to perform effectually the second
and principal purpose as a part of the
Reserve Fund.
For the performance of such service its
superior bulk and weight is no objection
TO it, rather aids it's utility. We leave
our Steinway grand piano in our house,
from which we absent ourselves for weeks
and months, trusting to its bulk and
weight alone to protect it from raid by
the burglars, who readily help themselves
to jewels, diamonds, watches, money,
and such silver plate as they can easily
Remove and conceal. The best quality of
a Reserve is it's staying quality. 1t is
undoubtedly the right of every creditor,
Whose bill or note has become due, to de-
Snand and receive prompt and complete
payment; and any default in making it
isa breach of the contract and a practical
failure of the payer; but, on the other
hand, it is not for the interest of the pub
lie that the notes, which form the bulk of
the circulating medium of the community
should be presented for actual payment
in any considerable number and the con-
tinuance of such a practice would bring
on a commercial panic harmful to the
public, and disastrous to the bill-holders.
1t is easy to see that any prolonged dis
trust of the solvency of a noteissuing cor
poration, whether public OF private, mani
tested by an unreasonable and unneces-
sary demand of it's circulating notes,
would generate an abnormal alarm, un-
der which we might be deprived of the
great advantages of paper circulation,
and driven back to pure and simple
specie currency, with its great incon
venience, and dangerously shrunken vol
ume.
When note-issuing corporations are
prudently managed, when the community
is not frightened by any unreasonable
panic, it is not difficult to maintain a
reserve The cash drawn out in the
morning to pay debt, or consummate a
purchase, comes in at noon as a deposit
by the payee, and so the specie basis is
kept good.
The dislocation of the currency of the
world by the inconsiderate local demone-
tization of silver, while it was and still is
the specie currency of nearly all those
nations with whom profitable trade is
possible, greatly added to the difficulty of
maintaining the cash reserves of all note
issuing corporations, for it is mostly for
purchases in countries where silver has
been disused as money that gold is drawn
from the deposits. Our old state bank
system worked with precisely the same
friction, when the bills even of Chicago
banks enjoyed circulation at par within
a radius only of one hundred miles, and
Eastern men about to travel thither drew
specie from the banks for purchases and
necessary payments.
The establishment by international
agreement of the monetary status of sill
ver-the recognition by all commercial
people of that convention that gives it its
prime value among certain peoples an
object SO desirable, as to be we'll worth
all the efforts made by our government
to bring it about. It would have the
same effect upon the world at large, that
the assumption by the federal government
of the control of the currency of this
country had upon its paper circulation.
1t would prevent those hostile raids which
one country often makes upon the cash
reserves of another; it would enlarge the
sphere of circulation of notes performing
locally the office of money in purchases
and payments; and it would reduce to a
minimum the rates of exchange, which
under the present dislocation threaten to
make international commerce impossi-
BILE.
The healthy status of a specie basis is
to lie undisturbed in the vaults of the
corporations, and to be drawn against, by
bill and note holders for the purposes of
exchange A too great outward flow Of
its gold is always considered by the Bank
OF England as symptom OF public dan
ger and unhealthy trade, to which the
remedy of raising the rates of discount is
always promptly applied. Those incon-
siderate people who took alarm because
silver coins and bullion accumulated in
the Treasury, and who, would have con-
graduated themselves if the same thing
had happened to gold had about as much
reason as the hypochondriac, who should
be frightened at the normal beating of his
heart or the regular respiration of his
lungs. The fact was instead of being a
failure the silver experiment, so far as il
was tried, in spite of the unfriendly ac-
tion of both tine government and the
moneyed class was a brilliant success,
the silver performing it's most important
function in more effectual way than did
the gold.
WHAT GIVES COIN ITS VALUE?
Here, as I have said, the schools part.
The monometalists declare that the only
value of gold and silver coins is their in
trinsic, commercial value as metals, that
is, the value of service they render society,
silver, principally for plate and utensils,
gold. almost exclusive for pure ornament.
This commercial value is strictly subject
to the relations of supply and demand, as
in the case of all other commodities. and
it is not in the power of single people OF
of combination of many peoples, by
usage, by convention or by positive law to
vary that valuation
The bimetalists maintain, that the cir
cumstance that gives value to coins is
that an immemorial custom, now EN-.
bodied in positive law, regards them as
the symbols and representatives of uni.
versal value, and SO makes them ex.
changeable among all civilized peoples in
certain definite quantities, for any pur.
chaseable thing, and as a legal and COM
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