The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-05-08
ONE HISTORICAL POINT.
Behold the Beauties and Adj
VantageS of the Double
Standard"
LITTLE DEMAND FOR MONEY.
Rather Peculiar Arguments Adj
Vanced by the Secretary
of Agriculture.

WASdlNO1ON, II. w., May 7.-SeCretarY
Morton has written letter to James A.
Cherry of Denver in answer to letter
from that gentleman criticizing some state
ments in the interview with the Secretary
of Agriculture printed two weeks ago,
which caused so much comment. 1t is as
follows:
From your letter of April %, 1898, it appears
you and perfectly agree in the fundamental
point-namely, that demand and supply
inexorabIy regulate all values whatsoever, at
all times and in all places. At what points do
we begin to separate from each other and then
go on to conclusions so utterly diverse? These
points are only two-the first historical and
the second logical.
First-You assume certain propositions to be
true of silver which not historically true at
| all, but quite the reverse of true. You say for
| instance: "Until 1873 the chief use of silver
! was for coinage 1t had other uses, but the
demand for its coinage. purposes was steady
| and constant"
On this point you have been monstrously
mislnformed. The first Federal coins of silver
were minted in 1894 and of gold in 1875.
Their ratio was recommended by Alexander
Hamilton and fixed by act of Congress. 1t was
| Is to l. 1t was hoped thus 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 321 silver dollar pieces were coined at
! the American mint in the entire year of 1905,
| because the silver was worth more out of coin
| age than in it and worth more for export than
| for domestic money. What was the matter
with those silver dollars? Nothing only they
were too valuable. May l, 1906, there came
an order from President Jefferson to the di-
rector 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 larg-
! est pieces shall not exceed a dollar"
The reason given by the President for this
order was "that considerable purchases have
! been made of dollars coined at the mint for
the purpose of exporting them and that it is
! probable further purchases and expectation
will be made" The coinage of silver dollars
thus authoritatively suspended at the Ameri-
! can mint was not resumed for thirty years. In
! these few facts. which are official and unques-
| tionable, behold the beauties and advantages
| of a double standard-the unlimited coinage of
| both metals in an enacted and constant ratio
with each other-of two yardsticks of different
| lengths 10 measure cloth by in the same
| market.
| By the law OF 1884 the ratio was substan-
| TALLY put at / to Is. But this was going too
| far in the opposite direction. Gold was not
| worth Is in silver in the markets OF Europe.
! Consequently the international current of the
| metals was for time reversed, silver passing
! in preference abroad to liquidate the balances
| of trade and gold coming in small quantities to
| the United States where it was more than 3
| per cent dearer in silver than in Europe. By
| 1858 the immense disadvantages of double
! standard had become so p ain to all the think
| ing people that Congress wisely determined to
! abandon the utterly futile attempt to secure the
| parity of the two metals and to make gold the
| legal tender for debts except for sums of S.
and under.
In the second place, Mr.. Cherry, as an in
stance of an historical assumption contrary to
! the facts and natural inference, allow me re-
spectfully to call your attention to the use, in
| common with many bimetallists, SO called of
| the date of 1878 as to the time of the demone-
| tization of silver. Unless 1 am mistaken the
| silver dollar is not mentioned at all, one way
| or the other, in the act of 1873. All the de-
monetiza ton of silver, as understand it, that
ever game about in this country happened in
| the law of 1858, after q full discussion
and practically with unanimity when
| Congress introduced this subsidiary silver
| coinage, of which a nominal dollars
| worth weighed 6.91 per cent less than the sill
yer dollar, and also took away the legal tender
quality of all silver in payment of debts of over
| So in amount Second, you employ over and
over again in your letter the two most common
| logical fallacies that enter into the speech of
! argumentative men everywhere, namely, put
! ting cause into the place of effect, and assum-
| ing that because one thing happened after an
! other in point of time therefore 1t was the
result of that other.
| Let us look candidly together at the two or
three instances of this taken at random. You
ask, ''What created demand?" and answer
| "Use." l ask in my turn "What created use?"
and answer Demand Why is it there is so
little use of silver dollars in this country to-
day. while there are millions upon millions of
| them lying idle? l answer confidently because
there is no adequate demand for them. Have
| you not innocently but badly 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 willingness to pay something for it
satisfactory to the other who owns it.
| "Use" of that thing, no matter what it is
only follows 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 treasury cannot get rid, by
hook nor crook, of those already coined and
| lying in useless heaps? They are we'll minted.
of just weight, nine-tenths fine, are legal ten
der 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 fuse" of them
What more can the law do for them?
Mr.. Eckles the present Comptroller of Cur
rency, has found 1t probable, by careful inquiry
| instituted through his department, that about
so 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 employ
ment of these instruments of credit is con-
stantly increasing through the multiplication
of banks and otherwise; of course 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
! relative to the business done.
Cruise of the Monterey.
WASHINGTON, D. c., May THE coast