New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1896-08-16
COIN AND MARKET VALUES.
WHY SILVER WOULD HAVE TO s A, d
ALONE UNDER FREE COINAGE.
REAL MONEY NOT AFFECTED IN VALUE BY THE
GOVERNMENT sTAMP-FUTILITY OF AN

| GOVERNMENT sTAMP-FUTILITY OF AN
ARTIFICIAL RATIO.
| To the Editor OF The Tribune
Sir: l. What will be the status OF the dollar Under
| free coinage should 1t come? Namely (a) VIII the
Government in any sense be behind II to redeem or
protect It? ) VIII It circulate in business at just
what the silver in 1t will sell for In the market
and no more? g. Could The Tribune fix or at least
announce. uniform nomenclature In TINS
money discussion find all the following and
more in The Tribune and in speeches and other
papers: Intrinsic value" bullion value" market
value" coin value, mint value: commercia,
value" etc Now. to the unframed this is
confusing. at least was to me for months II a
head Of Your money articles giving the exact
meaning Of these words and their eauiva Is,s
would In my opinion. be Of great value. Science
should be exact in terms. Finance Is a SCIENCE
Wichita, Kan. Aug 4 o. w. HoSS'
I Under free coinage Of silver the Government
would in no sense stand behind the coins issued
70 redeem protect them. 1t would simply GER
tify to their weight and fneness. The stamp OF
the Government neither adds TO nor takes from
the value Of the metal contained In the coins OF
standard money-that Is. in real money. or what
the silver people call redemption money. An
ounce Of pure gold is worth exactly the same IN
any part Of the world whether II is In the form OF
bullion or coin Under free coinage silver would
dollars are representative money, not real money.
They pass at fictitious value because the law
declares it to be the policy of the Government to
maintain the equality of all the dollars when
have been issued and agrees to accept silver dol
lars at their face value in all payments to itself.
1t also makes them legal tender by tale in all
payments between individuals. unless otherwise
distinctly specified. II can maintain the
parity only so long as the amount OF lie
titious dollars outstanding Is rigidy Inn
tied Under free coinage 1t would he unable
to continue the policy. and silver dollars
would necessarily. being no longer representative
money, pass according to their own real value
If illustrations Of this fact are required look at
Japan and Russia. The monetary unit in Japan
is the yen 1t is coined in both gold and silver at
the ratio of 1911 to l. The gold yen contains
% Is grains of pure gold. and is worth. the world
over so 991 measured in terms of our gold dollar
The silver yen which u.s. according to the fiat Of
Japanese law, the equivalent Of the gold yen. con-
tains 314.4 grains of pure silver, and is worth
nomlnally S1.O0S in money. Its exchange
| able value not only in the markets Of the world
| but in Japan itself, was, on January l. 1870.
So 491, measured in terms Of our gold dollar-that
Is, 1t passes according to its bullion value. Japan
| is nominally a double-standard country. but. al
tnOuRn 1ree-SllVer coinage mas Deen SuspeHucu' IL
is actually on a silver basis. The stamp of the
Government does not add one iOta of value to the
coins struck whether they be gold silver In
Russia the monetaD unit is the rube. The
coinage ratio is 1914 to l. but it has effect on
the value of the coins A ruble in gold passes for
! so 772 in terms of our money. A ruble in silver
| passes for S0.364 In terms Of our money.
,. 1t IS. of course. impossible for The Tribune
n tx at
cussng the money question All it can do is to
| be as accurate as possible itself. Intrinsic value
! Is a term which should really have place in
a discussion about money What we are really
concerned with regards money is exchange
| able value. When intrinsic value is used 1t Is
| intended to be synonymous with bullion value
| real value commercial value and market value
| These terms all mean the common value which
is set gold and silver by all people; the value
| at which people are willing to exchange them
| for each other, or for labor and products Of all
| kinds. Coin value. mint value, or legal value
| is, on the contrary, an arbitrary value set, or
attempted to be set, upon the metals by the fiat
OF law. For instance, law says that 232 grains
Of pure gold shall be called, when coined one
dollar; or that 113 grains of pure gold shall be
called, when coined a sovereign That fur
nshes a standard by which other values may
be measured and is, of course, within the PROV
nce of government. If gold becomes more
scarce and thereby more valuable. or more
plentiful and thereby less valuable, the dollar or
the sovereign will increase decrease in pur-
chasing power but It will still be called dollar
or a sovereign and will still be the measure OF
exchangeable value. But If the law goes further
and tries to establish mint, coinage or legal
value for another metal also. complications
rT.o hat l.
grains of pure silver we'll 23.2 grains
of gold shall be called a dollar and shall be a
legal tender for 81 of debt but the law cannot
force any one to part with 23.2 grains Of gold In
exchange for 371t. grains of silver. II the COM
mercial value and the legal value Of the two
happen to conform. a person will make the ex-
change Otherwise he will not That is the dit
ficulty with the free coinage Of two metals side
by side at a fixed ratio. AS long as the market
values of the metals conform to the legal ratio
all will be well. but when for any reason the
relative value changes the metal which is I'M
dervalued will disappear from circulation. The
United States struggled with double standard
from 1892 to 1873. During the first half OF that
period no gold circulated because gold
dervalued at the legal ratio of Is to l. During
the second half Of the period gold came in and
silver went out. because silver was undervalued
at the legal ratio of l6 to |. Every nation
which has ever tried TO the double standard
has had a similar experience double stan
dard by single nation means neither more nor
less than monOmetallism on the basis Of the
metal which Is overvalued. Commercial value
is established by the law of supply and demand.
Legal value is an artificial thing and cannot be
enforced in opposition TO natural laws.
THE LOW PRICES OF FARM PRODUCTS.
OvERPRODCCTION AND LESSENED CONSUMPTION
THE CAUSES.