The islander. [volume] (Friday Harbor, Wash.) 1891-1899, 1896-10-15
scheme to create something out of moth
ing has proved disastrous.


me money on the United States.
The money of the United States con-
slsts OF gold coin and gold certificates,
silver coin and silver certificates legal
tender notes payable on demand at the
treasury of the United States in gold.
treasury notes issued under the act known
as the Sherman law redeemable in coin.
gold or silver coin (but up to this time re-
deemed when presented for REDEMPTION
in gold conn., and in national bank notes
Inc gold coin is money possessing in
trlnslc value TO its face value as money
Melt it, and in bars it would be worth as
much as the coin.
The gold certificates are worth their
face not on account of their intrinsic value
which is nothing at all, but because they
can be exchanged a pleasure for gold
coin deposited in the treasury for their re-
demption.
The legal-tender notes possess no intrin-
sic value, but they are at par with
gold because they may be, on demand at
the treasury of the United States, convert
ed into gold, and reserve of s1O0, 900 900
of gold has been provided by law for their
redemption, and the secretary of the treas
ury has been authorized, if necessary, to
sell bonds of the United States to provide
gold for their redemption
The national bank notes are secured by
deposits of United States bonds, and when
a national bank fails or its notes are to
be withdrawn from circulation the pro-
ceeds Of the bonds are applied by the
United States to the payment of the notes
in gold or its equivalent.
The treasury notes, issued for the pur-
chase of silver bullion under the Sherman
law, while by their terms payable in coin,
were issued under an act of con-
gress which contains declara ton
substantially to the effect that it
is the policy of the United States
to maintain the parity between gold
and silver coins, and to do this the secre-
tary of the treasury redeems the notes
presented for redemption in gold.
The measure of values in the United
States is gold-the gold coins of the
United States. The several kinds of money
just mentioned except gold coin are the
equivalents of gold coin of the United
gold coin. The silver coins of the United
States are intrinsically worth only the
value of thes silver bullion they contain
something over so per cent of their face
The silver certificates are intrnsically
worth nothing, but are valuable because
they can be converted into silver coin
which possesses intrinsic value. Both sill
yer coin and silver certificates possess a
purchasing and exchangeable value in ex-
cess of the value Of the silver they con-
tain or represent by reason of the limited
provision made by the government for
their redemption in gold and the faith of
the public that the government will main
tain their circula ton as the equivalent of
gold and will redeem them at their face in
gold.
The free-coinage advocates deny that
any provision of law exists for the re-
demption in gold of silver coin and sill
yer certificates. and would have us be-
lieve that silver coin and silver certificates
circulate at par with gold because they
have been given some of the functions of
money. I admit that the redemption of
silver coin and silver certificates in gold
upon presentation to the United States
treasury has not been provided for as in
the case of gold certificates and legal-ten-
der currency, but it is true nevertheless
that provision for practically limited re-
demption of them has been made.
The silver dollar of the United States
has been issued and put in circulation by
the government substantially with this dec
laration and promise: "This coin con-
tainS 41212 grains of standard silver, is in
trinSically worth whatever the bullion it
contains is worth in the markets of the
world but it is issued upon the under
taking of the United States that it will
to the extent of the revenue collected by
the government (some $500, 00O, 900 annually
redeem it in gold by its receipt for public
dues as the equivalent of a gold dollar"
This provision and the faith of the public
that the government will pursue financial
policy which will maintain the silver
dollar in circulation as the equivalent OF
the gold dollar has been sufficient hereto
fore to maintain the parity between our
gold and silver coin. but there have been
times when public confidence appeared to
be shaken and they threatened to part
company How long this limited redemp
ton of silver currency will be sufficient
to keep silver dollars and silver certifi
NIT roll 0nt1 ic on
upon which there is a wide difference of
opinion. The discontinuance by the United
States of the purchase of silver bullion has
postponed and let US hope avoided the
catastrophe which was sure to have fol-
lowed from a continuation of the policy
of increasing our silver and legal-tender
currency without a corresponding increase
of gold available for its redemption. But
if duties should be made payable in gold
only as has been suggested, the silver
dollar would al once depreciate to its bull
lion value.
The Coinage Laws of the United States
To show that with the free coinage Of
silver at the ratio of 16 to 1 by the United
States alone parity between our gold and
silver currency could not be maintained, it
is only necessary to refer to our own
coinage laws, although the histories of 9TH
er nations might be cited and would show
that their experiences have been similar to
our own.
From 1892 to 1884 our coinage laws pro-
vided for the unlimited coinage of both
gold and silver at the ratio of Is to 1, and
gold was not coined in this country, or,
if coined. left the country.
Secretary of the Treasury Hamilton, in
recommending the ratio between gold and
silver for coinage, endeavored to adopt
the worlds ratio between gold and silver
bullion But there was at that time great
difficulty in determining the commercial ra-