The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-02-17
A WORD TO THE UNWISE.

To the Editor OF The Herald:

To the Editor OF The Herald
Your morning contemporary is still
| tiounderng in its attempts to discuss the
money question. In Thursdays issue it
| said:
Zone of the mistakes of silver extrem-
lists is in supposing that the mere
nat of this Government can invest sixteen
parts OF silver with the same purchasing
| and liquidating power as one part of gold
| without Limitation of coinage
In reply it is to be said that the funda-
! mental mistake of your contemporary is
i'll not recognizing the fact that the only
| source OF the value either of silver or gold,
is the fiat OF law. Money as money is the
! creation OF the law which authorizes its
issue as money and its use as an I'M
limited legal tender The conten-
ton OF the silver extremists" as your
contemporary is pleased to term the advo-
CAGES OF free silver coinage, that the Gov
| ernment OF the United States is adequate
TO maintain gold and silver at a parity
| at the ratio of 16 to l, is based upon the
fact that for more than seventy years
| France and the Latin Union, by their
| open minis, maintained gold and silver
| Tor the whole world at a ratio of II 12 to
l. This is one of the indisputable facts
| your contemporary so often speaks about.
| Against the simple assertion of the gold
| ties that Government cannot do this thing
| is placed the more than seventy years of
actual experience referred to. For ten
| years, at least, the advocates of the gold
standard have been trying to break the
| force of this argument from the experience
| of France, but without avail. All they
have succeeded in showing is that during
| that time, upon occasions, gold com
| manded small premium, but the force of
| this fact is destroyed by the other fact
| that it is also true that during that time
| silver also occasionally commanded pre-
| IN hat in bnt / Ia
| was covered by the cost OF getting either
metal from London TO Paris, and the
| small charge for coming at the French
mints. For the coins of either metal,
| under their free coinage, to command Il
| small premium is nothing unusual, but
| this premium in no wise results from an
| increased demand for the metals as COM
| modities, but from an increased demand
tor the COINS for money use. An illus
tration is found in the fact OF New York
! York merchants paying 3 per cent pre-
! MUM for silver dollars during the pan
icky days of 1898. In the half-dozen years
before 1877 the United States sold nearly
S40O, 900 600 of gold to Europe at a pre-
| MUM, and then in 1873 borrowed some of
it back for resumption purposes.
Your contemporary says 10 parts OF
| value as one part of gold without limita-
! lions of coinage This is also an error
The effect of limitations of coinage is to
| destroy the equivalency of value between
coins of different metals, not to maintain
| it, To the extent that the coinage of
| metal is limited, to that extent is its
money use destroyed. The destruction of
use is the destruction of demand, and the
destruction of demand is the destruction
of value.
Your contemporary further says:
The value of all commodities is fixed
by the demand therefor (Which is gov
| INxyI enN tlA
| The recognition and use of gold as a
standard of value throughout the civil
! lied world establishes its bullion value at
substantially its minting value among
the commercial nations. The non -recog-
milton OF silver by the great commercial
| nations as standard of value, coupled
with Its abundant supply, makes the diff
| ference between its bullion value and its
| minting value.
| 1t is true that the value of commodities
| is fixed by the demand therefor and the
| supply thereof But in the case of the
| commodities, gold and silver, the largest
| demand therefor is that created by law
the law which authorizes their coinage
| into money and makes them an unlimited
| legal tender. If the law puts no linn
| ltation upon their coinage or their
4 legal eg tender power, an unlim,,
tied demand is thereby created
| for them. 1t seems to be necessary to
repeat here what was said in former ar
| tlcie that with the mints open to the free
coinage of any metal and the coins of that
metal invested by law with an unlimited
legal tender power, there is only one price
the world over for the metal and that is
the mint price No seller of that metal
will take less than the minis will pay, no
buyer OF that metal will pay more than
| the coins are worth. No one wanting bull
| ion will pay more for it in that form than
than it costs him in the form of coin.
Your contemporary says that the parity
between gold and silver at given ratio
can only be maintained by international
cooperation. But there was no such Coop
| Grafton for the more than seventy years
during which France and the Latin Union
maintained the ratio at Is 1-2 to l. For
much the greater portion of that time
England was on the gold basis. Dur,
| the United States coined silver and gold
at the rate of Is to and during the last
| half at IS to /. The effect of this differ
ence of ratio was to hinder instead of as
sist France. But in spite Of England s gold
recommendation and the different ratios of
the United States, the open minis of
France maintained the parity for all the
| world at 10 IL to l, and this notwith-
| standing changes in the relative produce
| ton OF the two metals much greater than
| any that have occurred since 1873 and that
are made an excuse for the denonetiza-
this controversy are the facts of expert
ence as well as the principles of the sci
ence of money, and that is why. the advo-
Gates of free silver coinage refuse to see
anything in the proposition OF interna-
tional bmetalism except subterfuge, the
| real object of which is to prolong the de-
structive regime of gold monometallism.
Club Man (rather full)-I wish you'd
(hic) take me home. Do you know
where (hic) | live?
! Observation-Disclosures the name OF your
| cook?--Life.
| Insomnia is a frequent forerunner OF in
sanity. This explains why so few police
| men become insane. Texas Siftings.
| New Policeman--And where is your
| permit to peddle?
PeddIer-I have verbal permit.
| New Policeman-Show it to nIe.-Texas
| Siftings.
r. -