New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1896-07-19

great Coperncus without knowing Of the ex-
istence Of Oresne's treatise arrived at identi-
cally the same conclusions. Still later. Sir
Thomas Gresham Master OF the British Mint
and chief financial adviser of Queen Elizabeth.
worked out the principles once more, and ex-
planned them 10 his sovereign. The great funda-
mental law Of coinage. based on these principles
has since become known Greshams law. In
the language Of n pamphlet issued In 1896 1t Is
simply this:
When two sorts Of coin current In the same
"a ton Of like value by denomination, bIt not IN
trinsically-i e.. In market value-that when mas
the least value will be current, and me otner; az
much as possible will be boarded or melted DOWN
or exported
THE MONEY or THE CONSTITUTION"
Still no nation so far applied this principle rs
to choose one metal permanently the standard
measure Of value and, when the fathers OF this
Republic came to frame our first coinage laws,
practically all civilized nations were using. or
trying to use. the double standard But they
were wise men In those days. When they drew
up our Constitution they carefully 'refraincd
from inclnllng In 1t any mandate as to whether
gold or silver or both together should be the
standard Of value. but cOntented themselves
with giving to- Congress the sole power to coin
money, and prohibiting the States individually
from making anything but gold and silver legal
tender That is all that the money Of the Con-
stitution" about which hear so much these
days, amounts to.
Now let us see what happened. Oneof the f1rst
laws passed by Congress was that regulating the
coinage OF money and establishing a standard
After thoughtful discussion they decided to fol-
low the then universal practice and try the
double standard they authorized the minting
of both silver and gold at the existing CONNER
ca ratio Of IL to |. They did not go back to the
ratio Of five centuries before % to - or TO any OF
the varying ratios Of the intervening centuries,
nor did they try to anticipate any ratio that
might be reached in the future. They simply
accepted the commercial ratio Of the year 1872
and went to work to coin money at that ratio
They enacted law declaring that an eagle
this is the order in which the metals are men
toned in the law-should consist of 241ia grains
Of pure gold and 22ia grains of alloy and that
dollar should consist Of 31lA grains Of pure
silver and 4iat grains of alloy Thus came into
existence the dollar of our daddes."
THE DOUBLE STANDARD FAILS TO WORK
From the very first the double standard
scheme, enacted in statute law failed to
work; though not so with Greshams law. The
latter continued to do business at the old stand
The coinage of gold and silver was begun.
were turned out from the minis only TO disap'
pear from circulation the gold to Europe or into
private boards the silver to Cuba. Why? The
silver disappeared from circulation because
Congress- in the exercise Of the powers vested in
It by the Constitution to regulate the value OF
foreign coins had said that a Spanish med dol
lar Of not less weight than Il pennyweights and
grains should pass current as and be legal
tender for dollar The Spanish milled dollars
on which this enactment was based were the old
coins actually in circulation here, and were
lighter in weight than new Spanish dollars. IT
so happened that the new American silver dol
lar passed current in Cuba as freely as new
Spanish dollars, which actually contained more
bullion. People soon found that they could send
100 American dollars to Cuba, get 100 Spanish
dollars for them. and have the Spanish dollars
melted and recoined at our mint into 10l Amer-
can dollars. making a profit of dollar on the
transaction. This kept American silver dollars
out of circulation and in 1903 the mint ceased
their coinage by order of President jefferson.
The gold remained in circulation for a time but
by 1910 the commercial ratio had changed, and it !
was more valuable as bullion than as money. |
Our coinage ratio was IL TO |; the commercial /
ratio was l5ia to l. In this country per-
son who owned one ounce of gold-whether in !
coin or bullion made no difference, for il should |
always be borne in mind that the coin /
ing OF a metal never affects its real value /
either one way or the other-could exchange /
it at the mint for fifteen ounces of silver.
BY sending 1t to Europe he could get fifteen and
a half ounces of silver for it, OF course he took /
his gold to the market where he could get the
most for it,
THE RATIO CHANGED.
The net result Of these operations was that |
by 1917 neither eagles dollars remained |
In the country Both had been driven out /
by the operation OF Greshams law and the
country was left with only Spanish milled dol |
lars and other light weight foreign silver coins |
for money. Finally. hen this state Of |
things became longer unbearable Congress /
changed the ratio in 1884 by reducing the amount /
Of gold in an eaela TO 232 grains Of pure gold ,
and % grains of alloy. and in 1887 the weight Of !
A silver dollar reduced TO 412ls grains OF /
standard silver making the ratio approximately |
Is to /.
The result was just inevitable In this case
as it had been before. Again Greshams law
operated. but the tables turned. The coin
age rate in Europe was generally 1914 to 1. /
and here it was practically 1G to /. God was
worth more for coming purposes here than in
Europe A man with one ounce OF gold could |
get sixteen ounces of silver for II here. In Flu /
rope he could get only fifteen and onehalf |
ounces of silver for 1t. Gold again appeared in
circulation here where it had not circulated for |
years and what silver coins got through the !
mint in their turn took wings and fitted Off to
tcurobe Thus the country remained with gold |
rs the sole circulating metal-barring. still. the
lightweight foreign silver subsidiary coins,
which did duty as small change. Until the sus-
pension Of specie pawn mt in 1862. during the
Evil War The gold standard had been practi-
ally established
THE DOUBLE STANDARD IN EUROPE.
Meanwhile Europe was having her own trou-
,les with money In England the coinage ratio
vas L. IL to l. and England had the same trou-