Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1896-07-31

'hNtiuiii' III tiiiS view MI JtiltIoO
concurred, saying that the unit mus
stand upon both metals"
1t was found that the commercis
ratio was - to l, and Congresa, b
resolution, July 6, 1885, declared tina
the money unit should be dollar, an,
by resolution of August s, 1856, fxe,
that dollar at 37l4 grains of fine sill
yer and of 2i4 grains OF pure gold
which were thought to respectivel
represent the commercial value of tn
metals to be coined.
AT that time both metals were il
universal use as primary money.
The commercial value of silver an,
gold bullion, like other commodities
is controlled by the law of supply ant
demand, and as soon as the Unite,
States and the European nations
closed their mints to silver, the de
creased demand lessened the price o
silver bullion, while the increased de
mand for gold thereby caused in
creased the price of gold. Thus tn,
two metals parted company in value
rs we'll as in money uses.
1t will hardly be questioned that in
ternational free coinage would restore
silver to par with gold. In such case
gold no longer having the monopoly
but being in competition with silver
would fall in price and silver would
rise until parity was reached.
1t will also be conceded that the
parity would be maintained with free
coinage by the United States alone at
rate of 80 to l. This is what is
meant by some when they say "put a
dollars worth of silver in a silver
dollar"
The fallacy of the contention for
taking the present commercial value.
as the basis OF the coinage ratio is that
it leaves out of consideration the in
creased market price of silver that
could come from its increased Use
caused by its restoration to mintsge.
Could it be definitely ascertained in
advance what effect free coinage would
produce on the price, the ratio could
now be fixed accordingly, and the
problem would be solved. That there
would be rise in silver by restoring
that metal to free coinage in oul
mints is clear; it is equally clear that
there would be q corresponding fall in
the price OF gold. Whether gold
would fall and silver rise until
the parity between them were per.
manently restored depends upon the
question whether the demand for sill
Yer money would equal the supply.
1t seems clear that free coinage by
the United States would for the time
being restore the parity in this coun
try, for no one would take less thar
$1.29 an ounce for silver bullion wher
by sending it to the mints he coul,
get that price in legal tender money.
Whether the United States coult
maintain the parity at that ratio de
pends, as already said, upon whethe
the demand would continue to equa
the supply. If silver, like clay or iron
were practically unlimited in quantity
neither the United States nor tn,
world could maintain such parity
But silver is a precious metal because
the quantity is limited. 1t is no
generally known that the excess OF tht
worlds product of gold over silver from
1850 to 1895 is more than one billion
of dollars. To be more exact, that ex
cess is officially estimated at $1,216,
354, 800.
1t is common error to think thai
in late years silver has been discovered
in fabulous quantities, but the director
of our mint estimates that the com
mercial value OF the gold product ol
the world since 1873 up to 1895 ex-
ceeds that OF the silver product in
that period by 1915. 1850, 800.
With these facts in mind, let us
look little closer into the question
whether we can, now safely open oul
mints to silver.
The underlying economic laws are
these
l. Supply and demand ultimately
regulate prices.
2. An unlimited demand for an
article limited in quantity at an arbi
trary price, establishes its minimum
price. 1t may rise above that figure
but cannot fall below it.
What. then, would be the probable
demand for silver under free coinage
by the United States, and what the
probable supply?
First as to the demand. The tota
indebtedness OF the United States
public and private, is estimated q,
more than twenty billions of dollars
and the annual interest upon it al
more than one billion OF dollars, the
greater part of which is legally paya
bic in silver.
The annual taxation for city, county
State, and Federal purposes exceed
eight hundred millions OF dollars.
The aggregate sum of the United
States money, all told, is less than the
sum required each year to pay inter
est and taxes. The total value o
gold product OF our mines is thirty
nine and half millions OF dollars,
large part OF which is needed for the
arts. while two hundred millions are