The Providence news. (Providence [R.I.]) 1891-1906, 1896-09-16
Carlisle Explains How 1t
Is Maintained.
The Limit Beyond Which it
Could Not Be Sustained.
Sewall's Setback Causes Vigorous
P0pulISiic Comment.


Carlisle has written che following letter
on the subject Of maintenance of the
parity between gold and silver:
Bar Harbor. Me-. Sept. IL.
James T. Holm. LouisvilIe
My Dear Sir-Your letter, asking how
the silver dollars, which contain guam
tity of bullion commercially worth only
about 90 cents each, are maintained at
q parity with gold, Notwithstanding the
fact that the government does not di-
rectly redeem them, or the certincatss
issued upon them, In gold. Is received.
and. as a great many inquiries upon the
same subject are addressed 10 me from
different parts OF the country, when IL
Is impracticable to answer In detail, !
will take advantage Of your favor TO
answer them all at once.
All the standard silver dollars Issued
from the mints since the passage or the
act or 1915, now amounting TO more tnan
Sf3S, ,000, ,000 have been coined on publc
Secount from bullion purchased by the
gdvernment, and are legal tender In
payment or al debts. public and private.
without regard to the amount. except
when otherwise expressly stipulated In
the contract between the parties. They
belong to the government when coined,
and they are paid out by the govern
ment at parity with gold for property
and services of oil kinds and received
from the people ct a parity with gold In
the payment OF all public dues and'debts.
The government has made no discrim.
tnation whatever between the coins oil
the two metals. Gold has been paid on
its coin obligations, when gold was de-
inanded. and silver has been paid. when
silver was demanded. Under this policy
the coinage has been so limited by law,
and the policy of the treasury depart.
ment that the amounted coin has not
hpp en- "A q 10 Al
able coin. gold, out OF use, and thus de-
etroy the basis 81 our monetary SYSTEM
and SO long as the two metals are OF un-
equal commercial value, at n ratio es-
lablished by law, this limitation upon
the coinage is, in my opinion, absolutely
essential TO the maintenance OF their
parity in efecting exchanges. 1t con-
etitutes the principal safeguard and pro-
lection OF our currency against the de-
probation. which, the experiences OF all
countries has shown, would otherwise
result from the attempt to use two
legal tender coins of the same denomina-
tion, but OF unequal value. III the linn
itation were removed, confidence in the
ability of the government to preserve
equality I'm tho oxchangeable values OF
the coin would be destroyed, and the
lNarity would he lost long before the
imount OF silver coinage had become
really excessive. With free and un-
United coinage OF silver, on account OF
iriyate, individuals and corporations,
lhe government would be under no moral
obligation to maintain the parity. and,
moreover. IT would be unable To do so,
because the volume OF oyervalued silver
forced into circulation, by legal tender
provision. would soon expel gold from
the country, or put such premium upon
IL that IL would be impossible 10 procure
and hold in the treasury sufficient
amount 10 provide for the redemption oi
silver on presentation.
In order 10 maintain the parity under
such conditions the government would
be compelled from the beginning to ex-
change gold for silver dollars and their
paper representatives whenever de-
manded, Just as IL now exchanges gold for
Ats own notes when demanded: and as
the coinage OF silver dollars would be
unlimited, and, therefore, consequently
increasing, a point would soon be reached
where II would be impossible GO continue
the process of redemption. The implied
obligation OF the government TO preserve
the value OF the money which IL coins
from its own bullion and for Its own use.
and which IL forces Its citizens 10 re-
ceive In exchange for their property and
services, has been supplemented by two
statutory declarations. which substan-
TALLY pledge the public faith to the
maintenance Of that policy.
With knowledge OF these assurances,
the people have received these coins
and 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 satisfied
that so long as our present monetary
system is preserved, the government
will do whatever its moral obligations
and express declarations require IL 10
do, and very largely, as a consequence,
of this confidence in the good faith Of
the executive authorities the silver
coins have not deprecated In value
IT is not doubted that whatever can
be lawfully done TO maintain equality I'm
the exchangeable value of the awo met.
ais, will be done whenever IL becomes
necessary. and although silver dollars
and silver certificates have not up TO the
present time been received I'm exchange
for gold, yet, IL the time shall ever come
when the parity cannot be otherwise
maintained. such exchanges Will be
made. 1t is the dutA OF the secretary Of
the treasury, and OF all other public Off
Cials, TO execute In good faith the policy
declared by congress and whenever he
shall be satisfied that the silver dollar
cannot be kept equal I'm purchasing pow
er with the gold dollar, except by receiv-
ing il I'm exchange for the gold dollar
when such exchange is demanded. IL
will be his duty 20 adoSS that course.
But II our present policy Is adhered
to.and the coinage Is kept within reason.
ahle limits, the means heretofore EN-.
ployed for the maintenance OF the parity
will doubtless be found sufficient i'm tho
future. and our silver dollars and silver
certificates viii continue TO circulate az
par with gold thus enabling the people
fo use both metals instead OF one only
as would be the case II the parity were
destroyed by free coinage.
Yours truly, ]. G. Carlisle.