Omaha daily bee., 1895-05-18

MUM over gold BY this act the mints were
closed to the unlimited coinage OF silver, ex-
cept the trade dollar which was overvalued
by eight grains and intended only for export
to China, and II was shut of by the act of
1876, except as the secretary Of the treasury
might permit II to be coined. Silver had
then begun to fall as measured in gold, and
the breach in the commercial parity OF the
TWO metals, as was natural, gradually
widened. With resumption gold asserted its
Importance, and silver correspondingly de-
clined.
Under the Bland-Allson act of 1878 credit
ors began TO make their notes. bonds and
mortgages payable in gold to the exclusion of
all other forms OF legal tender money. This
increased the demand for gold Silver had
ceased to be primary money. That elasticity
which the alternate use Of silver with gold
that true bimetallism gave to our primary
money was now absent. If the demand for
gold became too great to supply the normal
needs of primary or redemption money there
was nothing to take its place as such Cred
ltors would demand the dearest metal and
the law had given them the right to do so.
AT THE GOLD MANS MERCY.
II gold was cornered neither the United
States treasury nor the debtor could put
silver In competition with it. They must go
to the men who have the gold and get it
and submit to their terms. A corner on
gold could not, as it does now, seriously
threaten the credit Of this nation IL silver
was In competition with gold as primary
money.
How long is our reserve stock OF gold to
last? How are we to replenish It? There
is only one way-that is to borrow from
those who have it, and that means England,
and that Is what we are doing. But how
are we TO pay these debts to England? II is
IN this way: Restore silver, put II in com
petition with gold on a ratio of 16 to /; re-
peal all laws allowing a discrimination be-
tween the two metals; stop gold notes from
Deing taken. Put silver in competition with
gold as quick as possible Where gold con-
tracts does not exist silver will
go at once into competition with gold
ana this will take some Of the demand
on OF gold. To that extent 1t will lower the
value OF gold. The extra demand for silver
will raise its value
When great government like the United
States says: Here is equal change, 16 to |,
gold for silver" man in France is not
going to part with his silver for gold unless
he gets that much for it, unless he gets
as much for it as the United States
VIII pay for 1t. less the cost Of exchange
So that when government is big enough
TO take all the silver in the world IL ii
wants to test its capacity demand is Gre
ated by an influence that Is able to sustain
that demand, so that man nowhere In the
world is going to sell his silver for gold for
any less than he can get for It in the United
States. But we will not have to go 1t alone
We would start with the western hemis-
phere, with China and Japan on the east
ern hemisphere, and with France with the
United States.
PROF. LAUGHLIN REPLIES.
Prof Laughlln, replying for the negative,
said:
Apart from the well understood use Of
money as medium Of exchange, money Is
used like a common denominator of value
with which other articles are compared AS
measure Of value it serves in a similar way
capacity, and as there is not needed a sepa-
rate cup for every quart of milk In existence
no one can measure hundreds of thousands
OF varieties of goods by comparing with the
same standard of measure. There is no
need Of an amount Of money equal to all the
goods In existence. The measure of value is
that in which prices are stated and debts are
paid, provided the measure of value Is also
made legal tender in any country. It is
evident then that the quantity of measures
is not so material as the unvaryng stability
OF the standard Of measure. There is no
more essential need of an increased amount
or measure with which to compare goods
than there is or should be number of yard
sticks equal TO the number of yards of cloth
in store. The absurdity of supposing that
much money is required in order to have
something with which to measure goods is
as absurd as to suppose community must
have hearses In number equal to the popula-
tion. One or two we'll regulated hearses may
do the work of buryng all the community
because they may not inconveniently all die
at the same time. So with gold. All goods
are neither exchanged at the same time nor
are they offered in comparison with the
standard at the same time
NECESSITY FOR MONEY.
What is important to point out is that
goods, when expressed in terms of
common denominator of value, are
daily exchanged in enormous guam
hn 80
money. For the exchange Of these goods
therefore, money is not needed in proportion
to the transactions. This function is that of
the medium Of exchange. The necessity Of
an Increasing quantity Of money is growing
less Important with the development of this
system of exchanges. From 92 to 95 per cent
Of transactions are performed by this ma
chnery, without the use of money, and re-
cent investigations made by the comptroller
of the currency show that 54 per cent Of
retail transactions are similarly performed
without the use Of money. But some one
might say: This vast system OF currency
must be liquidated in actual coin and money
so our business system rests like an inverted
pyramid on the vortex Of small reserve of
coin." Now this is wholly untrue. Week
press the value Of goods in terms of money,
but then we really exchange them almost en-
tirely by means OF the deposit currency. The
transactions expressed in terms of money
are based, not upon coin, but upon the goods
pought ana sold. The system, therefore, is
as broad as the transactions and is ultimately
resolved into goods and is based upon goods
The transactions in goods are the reason for
the existence OF the checks and deposits.
The checks and deposits are not the reason
for the existence of the transaction. The
redemption is ultimately in goods, and not
in coin. Coin only is a means Of going from
one set Of goods to another.
DEPRECATED ONE-HALF.
Prices since 1878 have not fallen because
Of the lack Of money. Silver has fallen
about so per cent as compared with very
modest fall in the price of commodities Sill
yer does not have the same purchasing price
in 1894 as in 1873. Hence free coinage can
not be urged as Just means of paying debt
More so-called redemption money by the
amount of 81 ,092, 900 900 is In existence today
as compared with 1878. and yet prices have
fallen and silver has fallen still more. Prices
Enthusiastically have fallen because OF the
cheapened cost OF production. Since we
undertook the purchase of silver in 1878 II
has fallen about one-half In value, although
we have purchased about $500 600 000 1t is
perfectly evident there is no use Of the
United States acting alone to bolster up the
price of silver when we have failed. even
IN concert with the Latin union. Free coin
age or silver at l6 to means the single ell
yer standard or silver monometallsm. Today
the market ratio between gold and silver
Is nearly "a to 1.
The free coinage Of silver under such con-
ditions as exist today would not mean the