The record-union., 1895-05-08
Secretary Morton Writes Let
ter to a Denver Citizen.
ANSWER TO CRITICISMS OF STATE
MEMS HE HAD MADE.
What Is the Sense. Says the Secretary,
of Clamoring for Unlimited Coin
age. When the Treas ury Cannot
Get Rid by Hook or Crook of Those
Dollars Already Coined and Lying
in Useless Heaps in the Vaults.
Special to the REcoRD-UNros.

Special to the RECoRD-UNIoN.
WASHINGTON, May 7.-Secretary Nor
ton has written letter to James A.
Cherry of Denver, in answer to letter
from that gentleman criticising some
statements in the interview with the
Secretary OF Agriculture, printed two
weeks ago, which caused 80 much COM
ment. 1t is as follows:
From your letter OF April %, 1895. it
appears that you and ! perfectly agree
in the fundamental point, namely, de-
mand and supply inexorably regulate
ali values whatsoever at all times and
at all places. At what points do we be-
gin to separate from each other. and
Then go on to conclusion so utterly di-
verse? These points are only two--the
first historical and the second logical.
First, you assume certain PROPOSE
tions to be true of silver, which are not
historically true at all, but quite the re-
verse of true. You say, tor instance,
| until 1873 the chief use OF silver was for
coinage 1t had other uses, but the de-
mand for its coinage purpose was steady
and constant. On this point you have
been monStrouSly mlSlnformed. 1he
first Federal coins of silver were minted
in 1874, and OF gold in 1875. Their ratio
was recommended by Alexander ham
ilton, and fixed by Act of Congress. 1t
was 10 to 10, and it WAS thus hoped to
keep the two metals in equilibrio on the
coinage. But they would not even come
into equilibrio on that ratio, still less
would they stay there.
"Only 81 silver dollar pieces were
coined at the American mint i'll the entire
year of 1905, because the silver was worth
more out of coinage than in it, and worth
for N or 0nn
What was tho matter with those silver
dollars? Nothing, only they were too
valuable.
May l, 1906 there came an order from
President Jefferson to the Director OF the
Mint at Philadelphia: That all the silver
TO be coined at the mint shall be OF small
denominations, so the value OF the largest
pieces shall not exceed half dollar
1.-The reason given by the President for
| this order was 'tnat considerable pur-
! chases have been made OF dollars coined
at the mint for the purpose OF exporting
them, and that it is probable further pur-
chases will be made
1.-The coinage OF silver dollars thus au-
| thoritatively suspended at the American
| mint was not resumed there for thirty
years. In these few facts, which are
official and unquestionable, behold the
beauties and advantages OF a double
standard-the unlimited coinage OF both
metals i'll an enacted and constant ratio
| with each other; of two yard sticks OF
different lengths to measure cloth Dy III
the same market.
'By the law of 1884 the ratio was SUBJ
stantialiy put at to q. But this was GO
ing too lar in the opposite direction. Gold
was not worth 16 in silver in the markets
of Europe. Constantly the international
current of the metals was now for time
reversed, silver passing in preference
al to linniHata hnllnEpS
and gold coming in small quantities to
! the United States, where 1t was more
| than per cent dearer IN silver than IN
Europe. BY 1888 the immense disadvan-
tages of double standard had become SO
plain to al the thinking people that Con-
gress wisely deter med to abandon the
utterly futile attempt to secure the parity
of the two metals. and to make gold the
| legal tender Tor debts, except for sums OF
So and under.
"In the second place, Mr.. Cherry, as an
instance of an historical assumption con-
trary To the facts and natural inference,
allow me respectfully to call your atten-
ton to the use, in common with many
biinetalliSts so-called, of the date of 1878
as the time OF the demonetization of sill
yer. Unless l am mistaken, the silver
dollar Is not mentioned at ALL one way
or the other, in the Act of 1873. All the
demonetization of silver, as understand
it, that ever came about in this country
happened in the law of 1888. after full
discussion and practically with unanim-
ity, when Congress introduced the sub
sidiary silver coinage, of which a NOM
inal dollars worth weighed 6.9l per cent.
less than the silver dollar, and also took
away the legal tender quality of all silver
in payment of debts OF over 80 in amount.
Second, you employ over and over
again in your letter the two most COM
ia a n
argumentatiye men everywhere, namely,
putting cause in the place OF effect,
and assuming that because one thug
happened after another III point of time.
therefore it was the result OF that other.
Let us look candidly together at the two
or three instances OF this taken at ram
dom. YOu ask, What created demand'
and answer Use / ask, III my turn,
What creates use?' and answer, De-
mand.' Why is 1t there is SO little use of
silver dollars in this country to-day, while
millions upon millions OF them are lying
aile? l answer confidently, because
there is no adequate demand for them.
''Have you not innocently but sadly
mixed up cause and effect in this case?
Demand, in the commercial sense, is
nothing but desire for something on the
part of one man coupled with his willing
ness to pay something for it satisfactory
to the other who owns 1t. use OF that
thing, no matter Wnat 1t Is, only lOl!OWS
the demand for it. You have helplessly
put the cart before the horse.
.'What is the sense of clamoring still
for unlimited coinage when the treas
ury cannot get rid by hook or crook OF
these already coined and lying in useless
| heaps? They are we'll minted, OF just
weight, nine-tenths fine, are legal tender
| for all debts and bear the legend, In God
| We Trust What ails them? l answer,
and so must you, on reflection. there is
no demand for them, and therefore no
| use of them. What more can the law
do for them? Mr.. Eckeis, the present
Comptroller of the Currency, has made it
probable by careful inquiry through his
| department. that about 90 per cent. OF
the retail houses Of this country are
doing business by means OF checks
drawn on local banks, and cleared by the
banks with very little use of coins. The
relative employment of these instru-
ments of credit Is constantly increasing
through the multiplication of banks and
otherwise. Ofcourse, also the quantity OF
coin money required to do the business
of the world or of any advanced country
| in the world is steadily decreasing reia-
tive to the business done"