The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-05-21


or such a coin. However. when the bill
was finally reported back from the commit
TO provide for the coinage of subsidiary
piece. 10 be called a dollar. and TO con-
tain 3s4 grains of standard silver. the same
as the French 5-franc piece and 1t was
TO be a legal tender TO the extent OF five
dollars, and no more. In this form il passed
the House by very large majority-in fact,
yeas and nays were not even called The
Senate struck out the 5-franc subsidiary
sidiary coin. called the trade dollar. con-
tanning 40 grains of standard silver. and
provided that il should be legal tender
10 the amount OF five dollars. and no more
the senate amendment was agreed to, and
the bill became law by the approval
is7 Thn f brie sfe historical Oh state
ment of the proceedings, which is fully sus-
tanned by the official record shows shows that that
the old standard silver dollar of 4l2i5 grains
was not TO be thereafter coined at our
mnts. and that the only difference of opin-
ion that existed, even temporarily be-
tween the Senate and House was whether
sisisrv Wo coin eo5tsinne IN m rrans
subsidiary coin containing 40 grains of sill
yer. No proposition was made in either
dollar. or 10 make any silver coin the unit
rnent of debts
The plain truth is that this act of 1873.
which has been the subject of much
misrepresentation and denuncistion. was sim
ply legal recognition of monetary condi-
ton which had existed in fact in this coun-
try for about thirty-five years. ever since
a short time after the passage of the coin
age act of 1894 From about the year 1898
until after the passage of the Bland-AlIi-
son act in 1878 no silver dollars were in
circulation in this country. and our whole
notes, except from 1852 to 1878. when our
active circulation, outside Of California and
its neighboring territory. was all paper.
There during the latter period about
S25,0OC,00 in gold in circulation on the Pa
cifc coast, and the United States was col
Letting customs dues in gold and using il in
the payment of interest on the public debt,
but there was no silver in circulation any
n;Gb, IN TINS COUNTRY not even tne ghd
United States note or greenback was al
ways measured by gold and not by silver.
paper price, but never a silver price be-
cause silver. except the half dollars. quar-
tiers and dimes coined under the act of 1885,
had been out OF use here for more than
twenty years before the commencement of
the war, and even THESE subsidiary coins
had not been in use for eleven years prior
TO 1871
OUR MONETARY HISTORY.
Our own monetary history had already
furnished two most striking illustrations OF
the operation Of the natural law under
which the coins which are overvalued by
statute always drive out of circulation the
coins which are undervalued. Our own ex-
perience had again demonstrated what the
history of the world already showed-that
whenever the coinage laws OF any country
permit the free coinage of both metals with
full legal-tender qualities at a ratio of
value which does not conform substantially
to their intrinsic or commercial ratio in the
markets of the world both kinds of coin
cannot be kept in circulation at the same
time. The reason is that, both being full
legal tender, the least valuable coin Will al
q m "
become the sole measure OF value, and the
most valuable will be boarded or sent ant
of the country into the market where its
Our first coinage law was passed in 1872.
and It provided for full legal-tender gold
that is TO say, fifteen pounds Of silver were
TO be considered as equal in value to one
were adjusted to that rule. In deciding upon
this ratio; neither Mrs hamilton. who rec
odnnsg ,n nor the me Congress wnl9n
establishing the relative values of the two
metals, for no legislative authority could
simply adopting and utilizing in the statute
law the existing intrinsic commercial
ratio between them. brief experience,
made, and the inevitable result followed.
1t soon became evident that fifteen pounds
to one pound of gold, and that no matter
what words were printed in the statute
book, the people, In the transaction of their
and treated the metals according to their
relative commercial value, and that they
fifteen pounds OF silver, either i'm coin or
bullion, nor use gold coins as money when
the amount of bullion in the coin was worth
In short silver had been overvalued and
gold had been undervaluei in the law. and
gold had disappeared from the, country,
and from that time on until after the pas
had sill IA
In May. 1905. President jefferson stopped
the coinage of the silver dollar. and dur
not single standard silver dollar was
coined r a. the minis % Of the I'M
coins were of full weight, as compared
with the dollar and were legal tender.
and 5heye s9 or and b
notes constituted our circulating medium.
os nvGs id & to Srng
back by changing the ratio.
THE ACT OF 1884
The act of 1884, supplemented by the act
of 1887. provided that the legal ratio should
be 10 TO 1; that is. that 16 pounds of silver
in the coins should be equal to pound of
gold in the coins. and the effect of this
was to drive silver out of circulation and
substitute gold in it's place, because silver
was undervaued and gold overvalued
in the statute. One pound of gold coined
or uncoined. was not, in fact. worth in
trinsically or commercially Is pounds OF
silver. coined uncoined. and. therefore,
the coins of the two metals could not cir
culate together at that ratio The au-
thors and supporters of this law well knew
what the effect of such legal ratio would
be in case IL did not conform to the COM
mercial ratio. but the great object in view
was the restoration of gold to the circua-
ton. and all other considerations were
subordinsted 10 that Doubtless many of
them still believed that the so-called double
coins of the two metals could be kept in
circulation together at the new ratio; but
they were mistaken. Silver went out and
gold came in. The gold basis was estab-
lished in 1894. by the practical operation
OF the ratio, just as completely and eff
fectually as If ii had been expressly de-
clared in the stature.
Here. then, were two experiments in the
free coinage of the two metals in this
years, at legal ratios very nearly CORE
spending to the real relative values i'm the
commercial world. and they both failed-in
one case because silver was cvervalued, ard
in the other case because gold was over
valued. A very small percentage of differ
ence between the legal ratio and the COM
mercial ratio has always been found suf-
ficient in modern times TO drive the under
valued metal entirely out and substitute
the other or paper based upon the other.
in its place. and no Congress or Parliament
can repeal alter the natural law of
trade by which this movement of The
metals is governed.
In 1853 Congress. in order TO maintain the
circulation OF subsidiary coins-half dol