Shenandoah herald. [volume] (Woodstock, Va.) 1865-1974, 1895-09-27
BURROWS POSITION.
THE MICHIGAN SENATOR ARGUES
AGAINST FREE COINAGE.

and Cause Disastrous Panic-Result
of Having Two Dollars OF Different VAL
ues-EviIs Of Silver Basis.
In an address, delivered at Bay View,
Mich, Senator Burrows of Michigan
vigorously opposed the free coinage fall
lacy and upheld our present financial
system. After reviewing our monetary
legislation he said:
''In the first place the free and I'M
limited coinage of silver at l6 to l
would in my Judgment expel from our
circulation not only our entire volume of
gold, but every dollar OF paper money
redeemable in gold, and cause a contrac-
ton Of the currency and a resultant
panic the like Of which has not been
seen in this generation.
"This would follow as the inevitable
result Of that law Of monetary science
which where two moneys are issued OF
UNEQUAL value the cheaper will always
expel the dearer from circulation. 1t
certainly needs no argument to demon
strate the truth Of the proposition that
II two dollars are issued one worth 90
cents and the other 100 cents, the so
cent dollar will be the only dollar in
circulation and the 100 cent dollar will
be boarded by the banks and individuals
until the whole volume of such currency
entirely disappears. This law is OF uni
versal application and has its origin in
human nature itself. No debtor owing
800 would discharge that Indebtedness
in the more valuable Of two moneys. He
would surely make use Of the cheaper
and retain the dearer. 1t was the knowl-
edge Of this law that guided the fathers
in fixing the ratio in the beginning at
10 TO ].
"They knew that dollars Of unequal
commercial value could not be made to
circulate permanently side by side, and
so. having ascertained that 24'4 grains
Of pure gold were Of equal value with
3711I grains Of pure silver, they pro-
vided for the coinage Of these two met
ais into dollars at the ration Of 10 to l.
But the truth Of this principle has been
demonstrated over and over again even
in our own history. The gold and silver
coins issued at the ratio OF 10 to un-
der the act Of 1892 shortly became Of
UNEQUAL commercial value, the bullion
in the gold dollar being Of greater value
than the bullion in the silver dollar.
The silver dollar became cheaper than
the gold dollar, and the consequence
was that silver alone circulated and
gold gradually disappeared. Indeed,
and for the same reason, the coinage OF
gold declined, for the 24A grains OF
pure gold provided for in the gold dol
lar were worth more uncoined than
when coined, and therefore its coinage
naturally ceased, and silver bullion
alone found its way to the minis Of the
United States.
cit remains only to be inquired what
would be the probable effect Of adopting
the silver dollar Of 3711a grains as our
single standard Of value. The first and
most patent result, as already noticed,
would be to drive from our circulation
every other dollar Of superior value,
whether Of coin or paper. Our $780,
600, 600 Of gold, constituting one-third
of the entire volume of our money,
would be quickly eliminated from our
circulation by being boarded or sent
abroad, followed by the retirement OF
our $500, 600, 900 Of paper currency re-
deemable in gold, producing a contrac-
ton IF the currency, unexampled in our
history, Of over $1,000, 000,0 900, to be
followed by a financial cOnvulsiOn un-
precedented in modern times. 1t will
not do to say that with free and unlim-
tied coinage this vacuum would be
quickly supplied, for it would require
20 years, with the present capacity OF
ou1 minis, to replace this vast volume
Of currency with silver.
"This consideration alone ought TO be
sufficient to deter us from venturing
upon such a hazardous policy. More
than this The silver dollar Of S7l1a
grains produced under free coinage and
not maintained at parity with the gold
dollar, as it surely would not be, would,
as we have seen, at once sink to the level
Of its bullion value and be worth only
about 80 cents. Every depositor in saw
ings, national and state banks, the hold
ers Of policies in life, fire and all other
insurance companies, investments III
loan and building associations, represent
ed by great body of people numbering
more than 10000, 900, would be forced
to receive in return for their deposits
premiums and investments a dollar OF
only one-half the value Of that with
which they parted, to the enormous and
incalculable advantage Of these great
corporations. Suppose an importer OF
foreign goods should become indebted to
the government Of the United States in
the sum Of 100000 for customs dues,
what would prevent him from purchas-
ing s., 900 Of silver bullion and under
free coinage converting it into 10, 900
silver dollars, and with these liquidate
the indebtedness to the government?
Every pensioner would find his meager
stipend lessened one-haf, and many OF
them would be reduced to beggary. Not
only this, but all the recipients Of fixed
salaries, every clerk, teacher, railway
employee and receiver Of stated in
come would be forced to take money
which in procuring the necessities OF
life for himself and family would pos
sess only one-hah Of its former purchas- |
ing power, for it must be remembered /,
the price Of everything would advance /
as the value Of our money declined. |
But it would be an endless task to at
tempt to catalogue the disaster which (
such a step would be sure to entail. "