The record-union., 1896-09-16
In Answer to Many Inquiries Upon
an Interesting Subject.
The Parity of the Two Metals Main
tanned by an Implied Obligation
of the Government to Preserve
the Value of Money Which 1t
Coins From Its Own Bullion and
for Its Own Use.

WASHINGTON, Sept. 15.-Secretary
Carlisle, from his summer retreat in
Bar Harbor, Me. has addressed to one
of his Kentucky correspondents the fol-
lowing letter, which is to-day made pub
lie:
James P. Helm, Louisville: Your
letter asking how the. silver dollars
which contain a quantity of bullion
commercially worth only about fifty
three cents each are maintained at a
parity with gold, Notwithstanding the
f. ! that the Government does not di-
n " redeem them or the certificates
is ued upon them in gold, is received.
AID as a great many inquiries upon the
same subject are addressed to me daily
from different parts of the country
which it is impracticable to answer in
detail, | will take advantage of your
favor to answer them all al once.
All the standard silver dollars issued
from the mints since the passage Of the
Act of 1878. now amounting to more
than $433, ,000,O0O, have been coined on
public account from bullion purchased
by the Government, and are legal ten
der in payment of all debts, public and
private, without regard to the amount,
except when otherwise expressly stipu-
lated in the contract between the par
ties. They belong to the Government
when coined, and they are paid out by
the Government at a parity with gold
for property and services of all kinds,
and received from the people a a parity
with gold in the payment Of all public
dues and demands.
The Government has made no dis
elimination whatever between the coins
Of the two metals, gold having been paid
on its coin obligations when gold was
demanded and silver having been paid
when silver was demanded. Under this
policy the coinage has been so limited by
law and the policy of the Treasury De-
partment that the amount coined has
not become SO great as to drive the
J more valuable coin, sold, out of the
country and thus destroy the basis Of
our monetary system; and SO long as
the two metals are Of unequal COM
mercial value at the ratio established
by law this limitation upon the coin
age is, in my opinion, absolutely essen
tial to the maintenance Of their parity
in effecting exchanges. 1t constitutes
the principal safeguard for the protec
tion of our currency against the depre
citation which the experience Of all coun-
tries has shown would otherwise result
in the attempt to use two legal tender
coins Of the same denomination, but Of
unequal value. If the limitation We're re-
moved. confidence in the ability Of the
Government to preserve equality in the
eXchangeable value of the coins would
be destroyed. and the parity would be
lost long before the amount Of silver
coinage had become really excessive.
with free and unlimited coinage Of
silver on account Of private individuals
and corporations the Government
would be under no moral obligation to
maintain the parity, and, moreover it
would be unable to do so, because the
volume Of over-valued silver forced into
circulation by a legal tender provision
would soon expel gold from the country,
or put such a premium upon it that it
would be impossible TO procure and hold
in the treasury a sufficient amount to
provide for the redemption Of silver on
presentation. In order to maintain the
parity under such conditions, the Gov
ernment would be compelled from the
beginning to exchange gold for silver
dollars and their paper representatives
whenever demanded, just as it now eX-
changes gold for its own notes when de-
manded: and as the coinage Of silver
dollars would be unlimited and there
fore constantly increasing, point
would soon be reached where it would
be impossible to continue the process of
redemption.
..The implied obligation Of the Gov
eminent to preserve the value Of the
money which it coins from its bullion
and for it's own use. and which it forces
ftz citizens to receive in exchange for
their property and services. had been
s,.pplemented by two statutory declara-
tfons which substantially pledge the
n,,hIic faith to the maintenance Of that
noticv The Act Of July II. 1890, after
nrovidinc that the Secretary Of the
Treasury should, under such regulations
as he might prescribe, redeem the treas
urv notes issued by purchase Of silver
b,,lIion in gold or silver, at his decretion.
declares that it is the established policy
~ the United States TO maintain the
t,vo metals upon q parity with each
other at the present legal tender ratio,
or such ratio as might be provided by
law and the Act Of November !, 1888,
a~ain declared ii to be the pohcy OF the
United States to continue the use oI
tntb coId and silver as standard mon
ey. and to coin both bold ana slVer INTO
,.onav of equal intrinsic and exchange
able value such quality 10 pc secured
through international agreement, or ~
,at, safoo,ards of legislation as viii
ireura the maintenance Of the parity Of
the value of the coins Of the two met
ais. and the equal power Of every dollar
al all times in the markets in the pay
rnent of debts
with knowledge Of these assurances
the people have received THESE CONS
ard have relied confidently upon the
good faith of their Government, and the
confidence thus inspired has been a
most potent factor in the maintenance
Of the parity. The public has been sat
isfied that so long as our present none
tary system is preserved the Govern
nent will do whatever its moral oo-
legations and express declarations re-
Guire it to do, and very largely as q
consequence Of this confidence In the
good faith Of the executive authorlues
the silver coins have not deprecated IN
value.