The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1895-09-12
WRITES CHAIRMAN DUDLEY AN
OPEN LETTER BEAR
ING ON
THE GREAT AND ABSORBING
QUESTION OF FINANCE.
The Senator Says That He Is Still In
Favor of Retaining Both Gold
and Silver in Our Circula-
ton and Always Has.
Washington, D. c., Sept. Z, 1895.

Democratic State Committee:
Dear Sir-I have been called upon Il
give to the people of Texas an expires
sion of my opinion on the financial ques
lions now being discussed on the stumI
and in the press of the State. l nave
spoken in and out of congress on al
the phases Of the pending controvers!
and had supposed that my opinions
were known to all of my constituents
I repeat now what / have so often said
that / am in favor of retaining both
gold and silver in our circulation, and
have been ever since the coinage ques-
ton has been brought into controversy.
I advocated the unlimited coinage of sill
yer and gold at 16 to l as long as
could see prospect of keeping them
both in our circulation. The continued
fall of silver and the progressive aban-
donment of it as a standard of value
by other countries has separated the
two metals so far that the conclusion
has been forced upon my mind that the
United States alone cannot bring them
TO par and keep them at par throughout
the world at that ratio. l would be
glad to have all the minis of the world
open to the unlimited coinage of both
gold and silver at Is IL to 1 or 1G to /.
But this is a result that cannot be pro-
duced by any one nation, because no
one country is able to control the de-
mand and supply of all the gold and
silver in the world. We must ascer-
tain what we can do independently of
other countries and what the best inter-
ests of the people of the United States
require us to do. Some of our people
are urging Independent action on the
basis of an unlimited coinage at 16 to /;
some contend for unlimited coinage of
both metals at their market value, and
still others that gold shall be retained
as the standard and coined without limit
with subsidiary coinage of silver, so
limited in amount as to be kept at par
with the standard; a fourth class, and
a very powerful one, would suppress
all silver coinage except small amount
for change; sell the silver bullion in the
treasury for gold; convert the five hun
dred millions of treasury notes into
interest bearing bonds and give to bank
ing corporations the authority to issue
the entire paper circulation of the coun-
try and to contract and expand its vol
ume as the interest of their stockholders
should demand.
The advocacy of unlimited coinage of
silver at 16 to is based chiefly upon the
argument that increased coinage of sill
yer will increase the prices Of all CON-
modities That would be true if the
increased coinage of all other countries
kept pace with ours. But increasing
Ahn &c ,tsn r,nt IN,
crease prices in other countries unless it
is the standard money of other coun-
tries whose volume we increase. The
proposition is not to be disputed that
the increase of currency, all other
things being equal, raises prices
wherever the money circulates. But
prices are not affected in any country
where the money does not circulate.
The opening of our minis to the I'M
limited coinage of silver will increase
prices in the United States but not in
Europe. As the prices of commodities
rise here. the value of the dollar falls
here, in precisely the same proportion.
The price of the gold dollar, which is
the common measure of value, remain
ing the same in Europe, it would go to
Europe, because it would buy more
commodities there than here. To H.
ed at one dollar in London, it is one
dollar in gold and the price in New York
is the same in gold less the costs Incl
dent to transportation. Now, if our
circulation is increased 10 per cent at
home by an addition of silver or paper,
the bushel of wheat would be increased
in price 10 per cent in New York,
but not in London, because there
would be no addition to the circulation
of England. Wheat being 10 per cent
higher here than in London. gold would
go to London, not to New York, to eX-
change for wheat, and as the mints con-
tinued to increase the volume the gold
would continue to go to Europe for
wheat, cototn and other commodities.
and as son as it was seen that the un-
limited coinage of silver was the estab-
lished law of the United States, all
creditors for their own protection,
would make their debts payable in sill
yer dollars at the market value of 81
IA grains of uncoined silver. and the
obligations of all debtors would contain
promises to pay twice as many dollars
IN silver as they do now in gold. Then
the country would be on the silver stand
ard with an exclusive silver circulation.
1t is n mistake to suppose that we can
increase prices in this country on the
ny NolulllS SllNcI NlluOuL
limit. The money we put in our circu-
iation must either flow out itself or drive
out the standard. One or the other must
take place. If we increase our cir
culation with gold, as we did from 1850
to 1860, it will raise prices now as it
did then and flow out to restore the
level. AS the gold leaves its volume de-
creases and its value increases and
prices rise here and its outward move
ment stops when the common level is
reached. When the volume of our cir
culation is increased with silver or
paper the increased prices make gold
flow out but as it goes out, the silver not
only takes its place, but continues to
drive out that which remains in the cir
culation as fast as the volume is en-
larged. Every gold dollar being worth
more in the market than in the circula-
ton, the whole gold circulation will
eventually disappear and silver become
the standard of value. Gold can never
be more valuable in our circulation than
it is in the open market and still remain
in circulation. The same result will
follow when silver becomes the stand
ard. All other values will then be de-
termined by the market value of 81
Ii grains of pure silver. The gold in
our gold dollar being twice as valuable
as the silver in our silver dollar. the
prices of all property measured by sill
yer will be twice as high as when meas
ured by gold. Being once fixed on the
silver standard they can not rise above
that plane by any amount of silver that
may be coined and added to the circula-