The Saint Paul globe., 1896-11-01
TO PAR WITH GOLD.
VIII Free and Unlimited Coinage s
Raise SiIyer9

Will Free and Unlimited Coinage So
Raise SiIyers
To the Editor of the Globe.
Will the free and unlimited coinage Of sill
yer at the ratio of 16 to 1 by the United
States alone raise the value of the silver dol
lar to par with gold?
In arguing this question, 1t Is necessary
TO assume that every one will buy where he
The gold-standard countries are now buying
their silver for about 65 cents an ounce, or
at the rate of about so cents for dollar.
Will they meckly take our word for the new.
value, and pay a double price without an
effort to the contrary? l think not, and will
argue on that basis, first considering our deal
1ngs with the gold-standard countries.
They are now paying for our products in
gold. Under the new deal they could tender
US silver at $1.29 ounce, and we could
hardiy refuse 1t, as we have proclaimed that
this is the value. If we should refuse it. we
would at once acknowledge that our claim
was weak, and encourage them to oppose 1t
the more. If we accepted silver at $1.29 an
ounce, 1t would be equivalent to selling them
our products at half-price, as they would pay
In silver which had cost them half what we
allow them for 1t. They would, naturally.
consider this pretty good thing, and would
buy as long as they could get silver at
satisfactory price or as long as our products
held out. So far, the tendency would be
to raise the price of silver.
the gold-standard countries These. hitherto,
nave been paid for in gold, and we should
expect gold to be demanded in the future
we certainly could not compel the other
and, unless they should choose to accept
what they consider half price, they would
demand gold in payment for our purchases.
IN that case, there would be a steady stream
OF gold going out for our purchases and one
OF silver coming in for our sales.
1t may be claimed that purchases and sales
WouId offset each other, as they do now,
but 1 think not, as our dealings are with
many different countries, and the various
transactions could be grouped only by using
one metal or the other as standard, and,
naturally, gold; but that would invalidate
our claims entirely. Even if it were possible
to offset the one against the other. and
merely settle the balances, the balances would
vary from one one side to the other at different
seasons OF the year, and the result would be
the same, only more slowly. We would re-
celve silver and have to pay gold
,,il.e Lei US now consider our dealings with the
sllver-standard countries. While their interest
would be to do their best to helm us in
raising the price of silver, it is very doubt
1ul II they would go so far as to accept silver
at lts new valuation in payment for our pur-
cnases, especially as they would need gold
10 settle their balances with tother countries.
Iney nave now large amounts of silver on
nano; nan ana would very likely, be glad to
pay IL 10 us at S1.29 an ounce and to buv
All our products that they could from us or,
tnat OASIS; so that the result would be prac-
uGally "a y the Ie,i same as with gold countries
II is well to remember that prices cannot
change materially under .his sunnosifion
1or, unless the other nations could get our
prooucts for less prices in gold than tey now
TO make extra purchases
Let US look at still another phase of the
mdIteri the dealings Of silver countries with
sotd countries outside of our own
NOW all these dealings are on the has.s
OF gold, or silver at 65 cents an ounce, Viii
the gold countries accept silver at 81 % an
ounce from all other countries, just because
tbinT not o1at a. II LIS Is " worth so much? Again
would be the process? The silver countries
would tender silver at 81. 80 saving that VIC
tp6nsl9er pnslq II worth that much. and will pay
that Tor 1t. The natural reply would he tbat
tne thlng to do would be to sell at thai nrice
IL tney could and pay them the gold The
silver SILVER countries would next call on us to
give them gold orStheir silver at 81 % and
we would probably decline as we couId coo
notmng In 1t for us. Then would follow
course OF bargaining, for If theyeco sell
countr;es Sivep ,,a At higher price than the gold
oInerence, and margin Of N of 4 per icent
Is 1S1 g9od proht in large transactions.
b,,w ,IhaS hhinS on the axiom that every one will
ouy Wnere he can buy the cheapest the i'm
hedlate result of the new policy would he
a d. iusn sl from ali the world to get our gold
~ ~ -, pr9uucts ~ as long as they could pay for
IleI4 IN silver at $1.29 an ounce or even &c
nuch above the market price as would nosLe
II an object. We would, truly. have IN car,
ea ene @ Ioad, not only of our own silver, but Of
as much of the 81, 900 600 600 worth ~, "
world as is used for money or hulIio, M me :
clam is made that much of this siivar ne 70
a1fedoy thfe1 used as money at par with gold. 7
tnlnK that this does not figure very y,,,L
as this silver could be easily snaraS ~ 1uoIl' cI
cnange Tor gold, and probably ren1scad lota,
at less price if needed iaCer
nave tried to show how the world ,,o,,,a
scramble Tor our gold and products "nJ
certain conditions but as uU.s mettaT unoer
tnIs would be very unlikely to hannon So
the very good reason that there arc =: so,oa roa
Preety @ snrewd people in our country. and
treasury would be raided and all the ooIS Ia
IN slght, disappear at once Not bavinr 5u.u on..
goio on hand, we would be powerlass to baci,
oI,n up our cialm am that silver was worth s1.29 an
ounce IN golo. We might possibly. nav orr
uepts IN silver at that rate. but. If W. con
tlnueo to buy of other countries ,ve woI.
nave TO pay them in gold or in ommofiittas
including silver, at market rates. What a1so
could we do? WHAT else
can see only one thing that might +and
70 noid the silver or its representative llttla
ABOVE the value of the bullion in it and that
tSot - the ioea or nope that some might have,
that we would at some time repent and re.
ueem our money in gold or a lIttle lasS
put think that this effect would be slight onS
the the tendency might be the other way. !
admit that throwing so much gold onto ~
markets of the world in exchange for, sii
| yer would temporarily raise the price Of tbo
latter, but the relative values of The two ere e
permanently In proportion to the relative
! amounts and demand in the world and n is
| doubtful II the mere exchanging OF location
| would affect them. We would onIv exciange
SO much gold for is equivalent In silver yet
| the same amounts of each in the world wo;,1d
| exist II the temporary rise in the pr;ce ~
! silver should cause increased production
| there would be greater proportion Of silver
| In the world than before, and the price wonId
settle little lower than 1t otherwise world
| Mr.. Bryan says that he firmly believes thai
| the free and unlimited coinage of silver al
/ the ratio of 16 to 1 by the United States wor1d
| make silver worth S1.29 an ounce in gold hut
| that the only way to find out is to try. With
! all due respect to Mr.. -Bryan's ability. can
! not agree with him, nor, apparently, do mosi
| business men. This whole question has been
tried many times, of course on a smaller
| scale, that the results are as well known to
| those who have informed themselves as tha;
| two and two make four.
What would be the effect on prices of other
| products is much more complicated matter
| Such articles as wheat that other countries
must have, and sugar. that we must import
would, undoubtedly rise in price. Other
| things, less necessary, would rise less and
such articles as we produce and consume en-
| tirely at home would be governed by the de-
mand and our financial condition.
! As a result of such violent plunge as
would be that from gold standard to a sill
! yer standard there would, naturally be o
great surging of prices how great or for how