The herald., 1896-05-24

when she had nothing but gold in cir
culation. until finally. in 1875, she closed
her mints to the free and un-
limited coinage of silver. Ma
poleon's famous law of 1903 began
under conditions most favorable to sue
cess, If success were possible. since the
coinage ratio then adopted by France
151s to Twas almost coincident with
the actual market ratio; and upon the
establishment of the Latin union
France was further assisted in her ex-
pertinent by the international support
and cooperation of other states of this
union, Belgium, Italy, Switzerland and
Greece. But, after centuries of trial
France finally ceased the free coinage
of silver. and thus publicly proclaimed
the impossibility of the so-called BIZ
metallic standard Of value. Contrary
! to theory, the two metals would not cir
culate together, and the Latin union in
1874 withdrew free coinage and limited
the coinage of silver to five-franc pieces.
1t is not necessary toS go abroad to
! discover the impossibility of the bime-
! tallic theory in practice. Though that
theory was indellibly printed upon the
pages of the statute books of the coun-
try, and remained there for over eighty
years. the theory was never in practical
operation In the United States We
have always had a single monometallic
| measures of values-silver VS.. gold-ex-
cept during the period of the suspension
of specie payment, when we were on a
paper, or credit money, basis. and the
two metals have never been circulated
CT 10 80
value. Since the acts of congress have
been brought into harmony with the
actual facts, that Is. since 1873, silver
and gold have circulated concurrently,
but not as concurrent measures Of val
lie. This function of money-measur-
ing values-has been performed by gold
alone since 1884, and since 1873 silver has
circulated as currency, as a medium of
exchange, a function for which 1t is
well adapted in small operations. Prior
to 1884 this country was practically on
a silver basis Since 1884 we have prac-
tically been upon gold basis and gold
has been the sole measure of values for
more than sixty years. And this be-
cause it was not possible to make the
artificial legislatively created coinage
ratio coincide exactly with the ever
shifting bullion or market ratios In 1892
the first coinage laws were passed. In ac
cordance with Hamilton's suggestion,
the ratio of 10 to l was adopted as the
coinage ratio. This ratio was less than
3 per cent removed from the bullion ra
ito. which was 1917 to l. Thus silver
was overvalued less than per cent, and
gold was correspondingly undervalued.
But this slight departure from the true
bullion value was sufficient to destroy
bimetallism. AS consequence of this
inexactitude in the coinage ratio the
owners of gold took it abroad where it
was worth more, and the foreign owners
of silver brought their silver to the
United States, where Is pounds of silver
was, by law. made equal to pound of
gold, while in France and elsewhere it
required 151a pounds to silver to ex-
change for one of gold. The result was
that gold soon ceased to circulate. 1t
began to disappear from circulation as
early 1906, and In a few years disap-
peared altogether. So that for the
forty years ending with 1884 there was
no gold circulating in this country, and
during this first period-17s2 to 1884
silver was the basis OF our
currency, and practically the sole
measure of values. The second period
of our coinage history began in 1884, when
Thomas H. Benton, on the floor of the
senate, asked for the restoration Of the
yellow boys" The change from the
silver to the gold standard was brought
about by simply changing the coinage
ratio of Is to l SO as to make 1t 16 to 1.
Thereupon silver was undervalued in
the coinage ratio, instead Of being over
valued, as in the first period. Condi-
tons were reversed. Silver left the
country and gold came back, and the real
decentralization of silver took place in
1884. The statutory decentralization Of
that metal occurred in 1873, although In
1905 President Jefferson, by an execu-
tive order, closed the minis to the coin
age of silver dollars. After 1884. and
prior to 1858, silver sought the melting
pot and there was danger that the sill
,er fractional coins-half dollals, qucr
ters and dimes-would likewise vanish
from circulation. To prevent this con-
gress, in 1858. decreased the amount of
silver in these fractional silver coins
SO that their coin value should exceed
their bullion value, and likewise de-
priVed them of full legal tender capacity
In this way they were kept out of the
melting pot, without displacing colo
The silver doller, however, disappeared
from circula ton after 1884, and the gold
dollar remained, practically, as the only
measure of values. Nor did the increased
demand for gold appreciate its value
so as to restore silver to circulation, al
though the difference between the coin
age ratio and the bullion ratio was less
than per cent How, then, is 1T to be
supposed, with the market ratio Of sill
Yer and gold at So to l, that the free and
restore them to concurrent circulation?
Or that they will oscillate within
small orbit about a fixed ratio of value,
as taught by the theoretical bimetal-
lism? No, bimetallism has never existed
in practice and never will. With no gold
in use during the larger part of the first
forty years Of our coinage history, and
no silver, not even enough small coins
for change during the most of the thirty
wears between 1884 and 1878, it requires
a rather hysterical imagination to call
such "bimetallism'' the real article, and
If bimetallism is an impossibility in prac-
tice it follows that we must choose be-
tween silver recommendation and gold
mouometalism. The act of 1873 did not
demonetize silver. The silver dollar had