New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1896-08-19
ARGUMENT BY MR.. TOWNE.
He Says the Strength Of the Silver Dollar
Lies in the Demand For It.


liant congressman, contributed the fol-
lowing admirable article:
In the first place, let me strongly urge
the significance of the fact that the exist
ing standard silver dollar is at parity
with gold, and is so for the sole reason
that the demand for it's use for that
which it can do makes it so. Let it be
understood once and for all that the sill
YER dollar is not redeemed in gold. The
contrary impression is curiously general,
and is entertained by men whose know
ledge Of the general subject ought to be
proof against the error. On one side the
gold men cite the supposed fact of the
redemption Of the silver dollar in sup
port of their contention that two metals
cannot both be admitted to full money
functions, and that the "only kind of BIZ
metalllsm' Ito use their absurd appll-
cation of that word) possible is where
one metal IS practically redeemed in the
other; and, on the other side, many BIZ
netallists use it to enforce, along with
other illustrations, the fact that con-
stantly increasing burden is being put
upon gold. I notice that Mr.. Darrow
in his powerful refutation of Senator
Thurston's argument at Madison the
other day fell into this error, and that
Wharton Barker in his recent and admir-
able book on ':Bimetallism'' does the
same thing: though Mr.. Barker cites Mr.
Preston, director Of the MINT as author
ity. But the fact is that there is neither
any law in the United States nor any
custom Of the treasury department where
by the standard silver dollar, or it's rep
reseDtative, the silver certificate, is re-
deemed in gold. This has constantly
been my contention, but IN order to he
absolutely sure of the fact caused in
uuiry on the point to be made yesterday
in Washington of Mr.. Morgan, treasurer
Of the United States, and he stated that
there has never been silver certificate
redeemed in gold, except to limited ex-
tent at San Francisco some years ago, a
proceeding that was promptly stopped
by special order of the department.. Many
persons who entertain the contrary opin-
ion have connected it with the clause in
the law of Nov. 1, 1898, (repealing the
Sherman law declaring the policy Of
the government to maintain "the parity
in value of the coins of the two metals"
AS a matter OF fact the policy Of the
government has been to discriminate d.
galnst the silver dollar. No bimetallist
has ever failed to claim that the substan-
tial parity of gold and silver when coined
upon an equal footing could be main
tanned only by giving to the man having
Il payment to make the right in choos-
ing in which he should pay. This option
that there shall be an automatic trans
fer of tie demand from one of the metals
tending to become scarcer to the other.
thus relieving the strain on the temper
arily dearer metal, causing it to fall and
adding to the demand for the temporar-
lily cheaper, causing, it to rise, the result
being parity. But this option the gov
eminent has surrendered Both the
grecnbacks and the Sherman notes of
1890 are expressly redeemable in :'coin",
but the government has voluntarily Civ
en- up It's light to elect IN which ''coin"
1t will pay and has allowed the exporters
Of gold to compel it to furnish them
their needed supplies of that constantly
approaching metal. Yet, in spite of this
unjust and 1mpol1tic discrimination, and
in spite of the encouragement to credi-
tors to make their contracts soluble in
gold only, under the clause granting full
ASSoA e0dNtS1 pONCi " Sl1FcI ''cACCpl
where otherwise expressly stipulated in
the contract" the silver dollar is at
parity with gold.
What causes this? There is no possible
answer but this: The demand for it to
do the work which the law permits it to
do. Value is the ratio between demand
and supply. Demand is determined by
use. What thing is worth depends on
what you can do with it. The conten-
ton of bimctallists is that if we open
our mints to the free coinage of silver as
they are now open to the free coinage of
8 Id. and If we grant to silver when
coined the right to be used for all mon
ey purposes whatever, deprivinr the
scheming creditor of the right to con-
tract against it, the demand for gold will
lessen and that for silver, stimulated by
the marvellous money needs of this al