Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1896-10-01
A LEGAL TENDER WHATTII?.

way Win tue eleineuts VI Tue cuhtest
which is now rending old political parties
| in twain, has led TO the receipt Of so many
letters aud questions that have been
unable to give personal reply to most of
them. The question, "A Legal leiiuer--
What Is It?" is one Of these. That ques-
ton goes to the root Of the matter. A
full reply would call for a volume of
monetary history.
I. To those who wish to go fully into the
case commend n few books:
'Bimetallism," by Henry Dunning Nc
Leod; History of Currency" by w. A.
Shaw; Origin of Currency and Weight
Standards" by Professor William Ridg-
way.
/ also commend to every ones atten-
ton 1.-THE Silver Situation in the United
States by Professor II. w. Taussig of
Harvard University.
II Twill add President Francis A. Walkers
recent work on International Bimetallism,
of which he is an advocate. II is of great
value historically and statistically, but
cannot help ,concurring with review
which appeared in the August number of
the Investors Review of London to the
effect that while President Walkers sup
port of international bimetallsm is not
readily eomprehended there are ''streaks
of luminosity" in his dealing with that
branch of the subject. l quote this phrase
only for the reason that do not myself
think that any one Swho holds that an act
, of force or of legal tender is necessary to
| give monetary use Or power to every kind
of money, even money made of gold, can
ever make his argument perfectly clear.
II may contain ''streaks of luminosity"
but it can only become thoroughly lumi-
} | ami lpaiI fbrnunh n rntnnlntp
render of the fat fallacy.
The advocates of international bimetal-
lism rest their case wholly upon the fiat of
2 law. Their contention is that by giving
I Il forced circulation ito silver at a fixed
t ratio relative to gold such use may be
e created for silver as to lead to its valua-
ltion by the public being maintained with
G substantial permanencc mt the fixed ratio
I which may be determined upon. The
4 term international bimetallism" should
I give place to a very awkward term for
. which l can find no synonym, 'interna-
d tional bi-legal-tenderism." The money
+ settlements of the balances of internal
g tional commerce are now made by remit
Q tanees of fixed weights of gold under the
a name pound sterling" which is not the
d name of any lawful coin. There is no act
n of international legal tender, and the oh.
, jeet of the advocates of bimetallism can
$ only be attained by bringing the force OF
,, law to bear upon the contracts which are
e now conducted free of any restriction
d and without any intervention of forced
y legal tender. Hence it is right to say that
d all advocates of international bimetallisn
N as well as all advocates of the free coin
4 age of silver concur in being advocates
A. of fiat money.
'e have given the names of these books
Is because have had so many letters OF
d inquiry. #.4s" sLa
4 did not clear my own mind of man,
" doubts upon the money problem until
s. had put to myself this very question. "A
ID Legal Tender-What Is IT." | could n
Is first see no reason to deny the assertion
on which the bimetallic theory rests
lie namely, that the quantity of coin in MS,
Z at given period must of necessity be
II controlling element in establishing price,
"a in the conduct of purchases and sales
~ once appeared to me that in setting of
: goods against money, or money agains
~ goods, the price must of necessity be de
% termined by an equation: as the quantit,
IL of money set off against the quantity o
"a goods ut n given time so must be tn,
~ price. This ! now regard as a fallac,
IS corresponding to that out of which tn
.NuEt lUtDfy
~ namely, that given so much capital avail
IN able for production at. aigiven time an,
Re so many laborers. the ratelof wages woul
he be worked by division of that capital
ly No one has done greater service in re
w moving the latter fallaey than Presiden
III Francis A. Walker. If the quantitativ
a, theory were absolutely true in It's appl
/, in ton to particular period, say year, o
ne even decade, then any act or series o
hu acts displacing great quantity of col
on which had been previously in use as none
"a might lessen all prices and would make n
u, debts then due more difficult to pay.
m | think that this is fair statement o
an the case, not only of the advocates of tn
be free coinage of silver but of the bimeta
re lists who hold that silver has been demon
etized and that the quantity of none
ud Of full legal tender has been so much re
us duced as to have brought about villa
Is President Andrews calls u fatal ia
en- in prices" to the benefit of the creditor
re and to the grave injury of debtors
ID 1t is admitted that the quantitatiy
RS theory of money is not without suppo,
10 in certain facts. 1t may be admitted tia
'ht the enormous increase of gold and sily,
ne alike has afft cted prices in very lon
periods of time. Both gold and silve
US have deprecated by becoming more abuI
IN dant in ratio TO their use since, for ii
10y stance, the latter part of the seventeent
IN century when under William III, III
as british debt was first put in funde
no form. There can he no doubt that hot
nc gold and silver have lost Il part of tile
purchasing power in ratio to all con
nodities since then, hut the effect of qual
titative changes is developed only in yer
he long periods of time. Hence it follow
to that neither gold or silver can be held
ny be absolute standards. There is no sue
he thing as an absolute monetary standard I
b. standard of value / have myself lon
Of been of the conviction that the vel
on large increase in the relative qua
la tity of gold as compared to silv,
BE after the discoveries in Califorp
of and Australia has rendered to
la preciate both gold and silver alike-si
&C. yer moro than gold under the law thu
as when a substance most fit for u give
for purpose becomes SO abundant as to re
to der 1t possible to displace one less fit IL
or latter may be deprecated by the gre.
nor increase of the former.
zen In respect to gold, the enormous relati,
ant increase after 1850, to which anoth
DO hinge increase is now being added, has
md my Judgment caused u depreciation
er, gold itself or, in other words, from Il
to examinations which have made in MAJ
OK objections, the great reduction in the lab
een cost of production of many articles won
Al IN anti Il