The herald., 1896-04-17
A STATESMAN'S ADDRESS


livered by that distinguished gentle-
man on the financial issue. While not
entirely neglecting to discuss the fun
damental principles of monetary sci
ence. according to the telegraphic re-
port of his remarks report necessarily
abbreviated, he devoted his time prin-
cipally to q dissection of some of the
pet theories of the silver standard peo-
pie. and in his lucid, logical. dispassion-
ate way laid bare the sophistries Of
the sixteen to one advocates.
The cardinal points of the secretary's
address were that the question of the
ratio in which gold and silver should
be used for money is q commercial and
not q political one, that the free and
unlimited coinage Of silver at the ratio
Of sixteen to one would actually reduce
instead Of increasing the circulating
medium of the country. that the silver
standard has not brought prosperity to
the peoples that have adopted it and
that the wage earners Of the United
States would be more disastrously af-
fected by the alteration in the money
standard demanded by the silverites
than any other class Of people.
The people who persist in advocacy
Of the idea that it is the function Of the
government to fix the value of commo-
dities and therefore believe that the
United States government should ar
bitrarily enact that fifty cents worth
Of silver is entitled to the stamp, one
dollar. are fond Of appealing in the
name Of Hamilton and Jefferson. The
latter certainly believed in the use, or
at least were willing to provide for the
use. of both gold and silver as money
metals, but there is absolutely no basis
for the assertion that they held to the
theory of double standard or to the
proposition that the government could
by itself create value.
AS Secretary Carlisle says, when
Hamilton and Jefferson first established
the ratio between the two metals that
1t was decided should be used for mon
etary purposes by the United States,
they were governed in their decision
entirely by the market value of the
metals. relying in no wise upon the
power Of the government to establish
relative values" It is matter of his
tory that they indulged in the most deli
cate experimenting in order to reach a
ratio that would accord exactly with
the commercial ratio of the time. They
could do nothing else, sensibly and
honestly.
There are but two monetary theories
the fiat and the intrinsic or commod-
ity. The first holds that money should
not be value in itself, but be representa-
tive Of value, therefore it should be
made Of the cheapest material that will
serve the purpose. 1t should be issued
by the government according to the
needs Of trade. and it's only redemption
would be in its acceptance by the gov
crnment in the payment of taxes or
obligations due the latter. The fiat
money people have no objection to indi-
viduals dealing in gold. silver or any
other commodity as much as they de-
sire. but the only money they would
have the government pay out or re-
ceivs would be Of the fiat variety. 1t is
only stating the truth to say that many
Of the most advanced and analytical
students Of the money question are fat
enthusiasts and advance arguments
certainly entitled to very respectful
consideration. The other theory is the
intrinsic or commodity theory. 1t rests
| on the proposition that money should
not be merely representative of value,
but be value itself; that money should
| be composed Of a commodity with a
staple commercial value; be property.
| SO that when person exchanged goods
| or labor for money he actually ex-
changed the one or the other for prop
! erty which would not depend for its
worth upon the good faith or the stabil-
ity of the government that coined 1t.
| This country, in common with sub
stantially all the civilized countries of
the world, has seen fit to adopt the last
mentioned theory of money. The sue
cess with which that theory serves the
country depends entirely upon an intel
| ligent use of and a consistent adherence
| to it. Money is only intrinsic in value
| when it is really worth as material in
the markets of the world the amount
that is stamped upon it. To the extent
that it is deficient in material worth it
is fiat and not intrinsic. But it is not
nearly as satisfactory as avowed fiat
money, because the latter would circu-
late as such absolutely while the other
would seek the confidence of the world
| as intrinsic, when, indeed, it is only
| partly so. and in the end somebody
| would be cheated. Now, then the free
; silver men are believers in intrinsic
money, else they would demand fiat
money instead of the free coinage of any
metal by the government. Yet they in
consistently, absurdly demand that
the government shall issue money
that is neither absolutely intrinsic nor
fat, but half of each. They apparently
believe that money should be property,
and yet they call for money that will
be SO per cent property and 50 per cent
does not recognize and has made no pro-
vision for, fiat, with the inevitable con-
sequence, if their desire is complied
with, that somebody would be placed in
position to rob somebody else OF
labor or the products Of labor.
The secretary's exposure of the fal.
lacy of the argument that the silve,
standard countries of the world en-.
joy an advantage over the gold stand
ard countries in trade, and that thi
country cannot hope to compete Will
China, Japan or Mexico unles it de
scends to the silver basis, was mastery
and thoroughly demonstrated the hol
lowness of the pretense that such
change could benefit the American
wage-earner. That part of his speecl