Birmingham age-herald., 1895-05-21
ABSOLUTELY PURE


 be used as money under such a policy2 The banking and other great financial institutions which own and hold in their reserves much the greater part of this gold, would at once sell it at large pre- mium for silver-about $2 for $1-or they would exchange it for silver bullion in the market at the ratio of about thirty two pounds of silver for each one pound of gold, have the thirty-two pounds of silver coined into dollars at the expense of the people, and with this cheap money pay the demands of their depositorS and other creditors. The masses of the peo- pie cannot do this, for they have no gold nor have they any silver bullion to be coined at the expense of the government.
 But it is said that although the masses of the people have no bullion, many of them are in debt, and that the free coin age of silver would increase prices and give them more money, thus enabling them to discharge their obligations more easily The merit of this argument will be judged by each individual according to the view which he may take of the nature of his obligations to the people who have loaned money or sold proper ty to him If a man who has borrowed $1000 in gold, or it's equivalent, and has promised to pay 1t, or has purchased 5000 worth of another mans property and has promised to pay for it in the standard money recognized by law at 
 it would be just and honest to discharge his obligation in a new stadard worth only half as much as the money he bor- rowed or the property he purchased he would appreciate and indorse this argu- ment and it would be useless to discuss the question with him. But if, as I have already endeavored to show, the imme- diate effect of the adoption of a free coinage policy at the ratio of 16 to 1 would be to contract the currency to the extent of about $625, ,000 900, by the with drawal of that amount of gold from circulation and for use as the basis of notes and other forms of credit prices would no even nominally advance. On the contrary, for the time being at least, this contraction would greatly reduce prices, because it would alarm the coun- try destroy credit and undoubtedly pro- duce the most serious financial disturb ance this country has ever witnessed. Every depositor in the savings and oth- CT banks, fearing that he would ulti- mately be paid in depreciated silver, would immediately demand the return of his money, and this would compel the banks to call at once for the pay ment of all the notes and other securi- ties they had discounted for their GUS toner's and the contraction of the cur rency would cause an increased demand for currency at the very time when it could not be obtained, and thus the diff heulty of the situation would be in- creased by both causes. The banks would be compelled to either suspend payments themselves or drive their GUS toners, who are generally business men -the men who give employment to la Dor in every community-into bank ruptcy at once. Who would profit by this condition of affairs? Nobody ex-- cept the holders of gold and the owners of silver mines, the holders of silver bullion and the brokers and speculators in stocks of silver mining companies The people who owe debts and are un- able to pay them would be the ones to suffer most, while the people who owe no debts and have money on hand would be the ones to profit most Every man in debt would be called upon to pay it promptly when due; there would be no more extensions of old debts, or any new credits given, because no man could foretell what the money would be worth at any time in the future. In this crash the laborer would be thrown out of em- ployment by the failure or suspension of his employer, the farmer would receive less real money for his products proper ty would be sold at low rates under ju- dicial proceedings all over the country, credit would be destroyed, and all in- dustrial and commercial enterprises would stand still, awaiting the result of the new experiment with the mone- tary system. Of course a great country like this, rich in natural resources. would ultimately recover in some measure from even such disaster but how long a time would be required to do so no man can predict.
 All the hints of the United States, if devoted entirely to the coinage of sil- yer dollars, could produce only about $4OO0oOO0 per annum, and, therefore, with free coinage it would require more than fifteen years to put silver dollars in the place of the gold we now have and give back to the country the same amount of metallic money now existing. But, i'll the meantime, we would have a de- preciated standard of value with nomi- nally higher prices-after the first col lapse was oVer-on account of the re- duced purchasing power of the dollar and at the same time we would have for a long time fewer dollars to pay with Common prudence would dictate that when any considerable change is to be made in our monetary system, some pro- vision should be made in advance of the actual change for gradual transition from the old to the new order of things; a transition period should be provided for so as to avoid as far as possible sudden disturbance of business and contraction of the currency; but the advocates of free coinage have no such purpose. They propose to make a sudden and revolu- tionary change in the standard upon which all existing contracts of the peo- pie are based and by which all values are measured, and let the consequences take care of themselves.
 Singular Delusion as to Power of Govern
 ment.
 But. suppose the change is made and that the business affairs of the country have been finally adjusted to the new standard, what will be the effect on our domestic trade? The prices of all things will be nominally increased-that is to say, it will require a greater number of dollars to purchase a given amount of any commodity than it required before iIn hn cir dclll-