The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-05-03
ERRORS OF POPULISM.
With Free Coinage the United States
Alone Cannot Maintain the Parity
OF Gold and Silver 1t I6 TO L.
caprr.xht. ,sx. BY II. W. Craven.

metals at that ratio. aHc that g0tc ana ST.
yer coins would freely circulate side by
side with equal purchasing power dollar
fer dollar. They assert that with free
coinage from 1872 20 1873 we had no off,
Guilty in maintaining the parity OF the
metals al the mint ratio. and that our ex-
perieace under free coinage In the past IS
the best evidence as TO what our expert
ence under free coinage would be II IL
should again be established.
It Is without doubt true that cur experS-
ence under free coinage furnishes almost
conclusive proof as 70 what would be the
result; IL we should establish free coinage
at the ratio Of IS to !. Experience Is the
best teacher. A pound of actual test is
worth ton OF theory in determining any
practical question.
But our financial history does not sustain
this claim Of the Populists. II !ndisputabiy
proves the very opposite OF that which
they claim.
The United States mint was established
in lTae. Taking no notice Of the small
charge made by the government for con-
verting bullion into coin during a part OF
the time. II is correct to say that from 1879
to 1873 we had the free and unlimited COIN
age OF gold and silver IN this country
II Is the main purpose OF this article to
prove that during large part of that Pc
riod OF eight-one years the laws OF this
country utterly and entirely failed to main
tain the value OF gold and silver at the
mint ratio.
Alexander Hamilton, secretary OF the
treasury. In determining the mint ratio
recognized the fact that with free coinage
II is necessary. in order to secure the circu-
lation Of both metals that the mint ratio
market or bullion ratio. and that zone
consequence OF overvaluing either metal
in respect to the other Is the Punishment
OF tha. which is undervaluei."
Jefferson agreed with him In this ard
said: Just principles VIII lead us 10 dis
regard legal proportions altogether. to in
quire into the market price OF gold in the
several countries with which We shall prin-
einaiiy be connected in commerce, and TO
take IN average from them" ID.
AT that time none of those in charge Of
our financial affairs claimed that this gov
eminent. or any other government. could
arbitrarily establish a mint ratio very dif-
ferent from the market ratio and maintain
both metals in circulation The distinction
OF making such claim as that was re-
served for the champions OF free silver Of a
later day.
Hamilton decided that an ounce Of gold
bullion was worth fifteen ounces of silver
bullion; and Is 10 was established as the
ratio at the United States mint 1t could
hardly have been possible for Hamilton to
decide the matter more accurately. for in
1893. IN the bullion markets Of the world.
an ounce or gold would exchange for ex-
actiy fifteen ounces OF silver. "a.
Both gold and silver were an unlim.t-
ed legal tender. Gold was coined at the
rate OF q. 70 grains of pure gold 10 the dol
lar our standard silver dollar has always
contained 37l-25 grains OF pure silver. I'm
TO ISft3 the llar oil ar 1os,, \
pure silver, in proportion as the dollar.
For several years there was no difficulty
In maintaining the parity OF the two met
ais at the mint ratio. and gold and silver
circulated freely. But owing largely
to the greatly Increased production OF 81
yer, II gradually became cheaper: ana an
ounce or gold became worth appreciably
more than fifteen ounces OF silver.
When an ounce Of gold couId he ex
changed In the market for more than hf-
teen ounces OF silver. II would. of course.
not circulate as the legal equivalent of
orly fifteen ounces of silver The owner az
gold could make a greater profit by dis
posing Of Il as bullion than he could nv
disposing Of 1t as coin II two coins ~
unequal value are a legal tender for the
same amount only the less valuable coin
will circulate.
with free coinage. gold and silver. In the
bullion markets OF the country. have the
same value In the form of bullion tina.
they have In the form OF CON This 10
true because II costs nothing to have
the bullion made into coin: hence any iif-
ference between the value Of the lincoln
ed metal and the coined metal must he
0, the most temporary and incidental!
character. Senator Jones Of Nevada
saws on this point. ''Of course, with nm
restricted coinage In any country. the
bullion value and the mint value will In
that country he coinciient" 81
And when the bullion or n,arke. valua
or either metal varies from the rvaIua civ
en- TO II by the min. laws, Il "a invariably
the market value that fixes the value q,
the coin. The coin admits Itself "a .ha
bullion value. and Is worth no more than
the bullion II contains whatever NAV be
lis nominal value. This Is why /. Is true
that in Mexico where there IS the free
coinage OF silver nj the ratio 81 49, 10
Mexican coin exchanges for gold a, about
the ratio OF % to l.
so, when. al the mint ratio, gold bullion
COMMANDED premium over silver bull
Hon OF or per cent. gold coins com
mandei premium over silver coins O,
) or per cent. and went out OF circu-
lation ny law almost as powerful as
the law OF graviiatfon the cheaper nancy
drove on. the dearer money.
II Is now proposed 20 offer clear ara
strong prNot that curing a large mart OF
me period. t's2 to lSl-say from 1921 70
lS'-the mint laws Of this government
were ncweriess 10 maintain the rsrify
- gpia and silver AZ the mint ratio. TIA,
gold casn did not circulate at all in ms
country and bore constant prarni,,rn
over silver a. the min; ratio.
IN 1916 congress appointed n corrrnts-
SION - investigate the entire question OF
coinage II IS known as the United
states monetary commission Of 1875. Sen
aior Jones - Nevada. row Pop,lfis-
and generally recognized ne the atlsst =
Nocate OF free silver In America. was the
chairman OF that commission and rnafa
out the majority renor, which was eisa
signed by Nj Bland. % Missouri. an
ether Noted free silver man a In tina,
report Mr. Jones sasi. '.Notwithsfardi-g
the legal relation 81 value between :he
two precious metals established in r-ea
IN this country diA not y-ain,.. 10
exactly with the market relation. We,
they circulated con~sirrerfiv. with r,.~
hans prep0nterance OF silver tn .ha ~
culafi0a until fSsl patwear ,ssi
ant iSA when the legal equivaierrv No.
tween TIE metals vas Is % J. gold was Z
a premium n silver ~ from s TO per
cent. and disappeared from the ~,r,.r1la
ton. and ha' little vas brought 70 .ba
fnint Tor coinage Prior ,, ssss
sli Eoia coins. domestic ard foreign. ha3
eisa noearet from the ci~-1giafs1- 81 con-
SEQ aNnNe ~ the prernum on gold" fs).
thomas II. Benton. who ra--eSar.s :
Missouri IN the United States senate
from $50 % $50 aas whc ranked ar,,ar =
'9e 'ea9i0S men e he 0aaoa AZ hat
tine. giving the substance ., his snas-h
IN Re senate IN iSs4 SAYS Thus me =
srucs - a Small note currency. ana ,he
Constant arrival - duhio0-s .-n-n -
loNe- Massissf~1i. deferred the ss,~ % .hs
sols currency. as q was not ur.u ~.
lapse - nes-.v ;~S-tv years asfa- -
adoption . tAe erroneous STANDARD % 80
NAT TIE e.rfi' aiiHn o. tsat metal both