Virginia free press. (Charlestown, Va. [W. Va.]) 1832-1916, 1895-09-04
THE GRESHAM LAW.
It Explains Why silver Standard Ma
lions Coin No Gold.


When 1 closed Yesterday I was
speaking OF the effect OF the free COIN
age of silver TO bring US to the single
silver standard. / quoted the opln-
ions Of quite a number Of persons who
were Of that view, who believed that
the free coinage of silver would nee
~essarily bring US TO the single silver
standard based upon the market value
/ Of 37l4 grains OF silver. / wish now,
in addition TO the testimony OF lndi-
viduals as 70 their opinion OF what the
effect would be, 10 call attention to
the actual condition OF things IN every
country in the world where the flee
coinage of silver now exists. In every
one of them, SO far as l know without
exception, the free coinage OF silver
excludes the monetization OF gold on
the ground that a marked difference
between the value OF silver and gold
according 20 its coinage standard and
its market value viii prevent any per
son from bringing the better metal to
the mint TO have it coined; 1t Will
necessarily exclude the coming Of the
better metal and necessarily prevent
the payment of the better metal.
No nan governed by the ordinary
selfish notions OF individuals Will ever
day in gold when it Is worth more
than silver. They did not. pay in sill
yer when silver was worth more than
gold according to the legal ratio, and
the converse OF that proposition Is
equally true. There is a law of finance
as universal as the laws Of the Ten
Commandments, and that Is that when
there are two standards of value, or
two e OF payment, the cheaper
one will be used and the dearer metal
viii be either exported to where 1t Is
more valuable or IL Will be boarded or
kept IN the control Of the owner. We
plain people distinguish between a
ragged bill and a good, fresh, crisp
bill, because we would rather carry
the crisp bill than the ragged bill. 1t
is the natural instinct of human nature
among all people to select the poorer
metal for payment to others and keep
the best himself.
believe that is the law of selfish
ness, which is a universal law. 1t Is
sometimes called the Gresham law,
because a famous man in England, IN
the time of Queen Elizabeth, who was
not only a high financial authority,
but held high offices in Great Britain.
proclaimed the simple principle that
the cheaper money viii always dis
place in circulation the better money.
subsequently, when a contest grew up
as TO the recOinage of the gold and
silver coins of England, in the early
part Of the eighteenth century, nearly
two hundred years ago, the question
of recoiQage entered into politics OF
Great Britain, and IA finally carried
by the great weight aud power OF Sir
Isaac Newton, who decided in favor OF
the recoinage of the coins of the realm.
Mr.. President, that is the universal
Law, and therefore when l quote the
actual results among Nations 1t Is only
10 show that among Nations as well as
among individuals the same rule pre-
walls. In Mexico they have the free
coinage OF silver. They have no coin
age OF gold, not because they cannot
coin it, but simply because nobody
would carry the gold to the minis TO
be coined when it is more valuable
than the silver.
In all the South American Nations
I believe there is free coinage OF
silver. If I am in error about this 1
shall be glad to be corrected some
other time, but l think l am not.
Now what is the condition of affairs
in those South American countries?
In the first place, having the free
coinage of silver, they ha1 more or
less of silver in Brazil and the Argen-
tine Confederation, but they soon
drifted into practically an irredeema-
BILE paper money.
But We sometimes hear, and my
friend from Nevada (Nr. Stewart
has often quoted India, as if India
now had all the blessings OF the sys-
TEN of free coinage practically. 1t Is
said that India absorbs all the silver
that is adoat-a Nation OF two or
three hundred millions of people, who
are about a thousand years behind
the time-and they have made money
by it. 1 have taken great pains
to study the Indian question, AMI l
am prepared to show that the results
of practically the free coinage Of sill
yer in India are precisely the same
that have occurred in every other
country.-Hon. John Sherman, June
1, 1892.