Evening star., 1896-10-23
F BRY WI N S
Effect on Business of a Silver Victory
at the Polls. :
THE VALUE OF SILVER DOLLARS
How the Farmer Would Suffer
With Deprecated Currency.
HARDSHIPS FOR THE POOR

To the Editor of The Evening Star:
If Mr.. Bryan is elected have you weighed
what the results will be?
At Paterson on September % he said: Il
say to you now that my election means
that this nation shall lopen Its mfnts to the
free coinage Of both metals at the earliest
possible moment. Not only that, but my
election means that this nation shall treat
the silver dollar just as 1t treats the gold
dollar, and that we shall not issue bonds to
buy gold"
If the treasury gold reserve is not to be
replenished by bond sales we all know it
can't last long. Foreigners would immedi-
ately call for their loans and balances here,
and holders Of the $33S 100000 Of outstand-
ing greenbacks and treasury notes (ac-
cording to the United States treasury state
ment of October l, 1886 would quickly
withdraw the s123, 100000 of gold now in the
treasury, to either export or hoard it. and
leave the holders of the remaining $780,
OG0,OOO to take their pay in silver.
That this gold will almost Immediately
be exported Mr.. Bryan admits. On Sep
tember % at Tammany Hall he said: You
know that with gold as our only primary
money. and the fact that the little quantity
Of gold can be drained away at a moments
notice by foreign creditors, 1t leaves us.
ETC."
AS all our national bank notes are re-
deemable in greenbacks, they too would fall
with them to a silver basis.
Ip short, Mr.. Bryan's election would, as
soon as the present gold in the treasury is
exhausted. put our currency on a silver
wise expressly stipulated. would be paid
in silver.
1t will be observed that this would all
happen, even if no free silver coinage act
should ever be passed.
AS interest on government bonds would
henceforward be paid in silver, and also all
dividends on stocks. foreign capitalists
would dispose largely of their holdings in
these. and thus necessitate further large
remttances of gold.
Their correspondents here and borrowers
Of foreign money, being called on to pay
up. would be compelled to call in their
loans, and draw their balances out Of bank.
The Immediate Effects.
All creditors in this country who prefer
gold to silver dollars (which includes the
bulk of them) would demand all debts due
them paid, and getting greenbacks or treas
ury notes for their bank balances. woul1
present them at the treasury for gold be-
fore Ii was too late. If impossible to get
gold they would buy sterling exchange or
exchange on Canada The Herald reports
that prior to October 1 over s6.OOO.NN in
gold had already been deposited in Cana
election. .-....,. .i.
In short, every man who had a dollar
coming to him would want that dollar paid
him while it was still worth 100 cents, and
before 1t got to be worth but 50 cents.
!. The business houses and other debtors
called on to pay Up would be compelled
to call on their debtors. and thus all the
debtors in the country would be called on
to pay up Immediately. The demands on
the banks would compel them to cali in
their loans. and If not paid, to sell or try
to sell collateIals.
Debtors would be compelled to sell their
property at any price, and where all debt
ors were sellers at once, the declines would
be such as We have never seen before, be-
cause there has never before been such
wholesale calling in Of debts, and conse-
quently selling, az this would cause
Business houses the country over being
unable to- collect balances due them, or to
realize On their stock. except at ruinously
low prices, If at all, must fail. Nothing
could save them
Small depositors, nervous and following
the larger ones, would draw their balances
and runs on banks would become general.
With these runs upon all the banks, they
must either break or suspend. In the
cities the stronger ones could combine and
suspend. but the weaker ones. left out of
the combination. and all country banks.
would fail.
The panic and ruin would far exceed that
OF 1873 or of 1Ss3 the latter Of which, call
ed the Silver panic" was caused by the
sis. This panic would be caused in part by
actually going on that basis.
Mr.. Bryan admits this. In the Chicago
convention he said: when you come be-
fore us and tell US that we shall disturb
your business interests, we reply that You
have disturbed our business interests" And
the st. Louis Globe-Democrat reported his
saying: Il think 1t (meaning the victory of
the free coinage movenent) will cause a
panic. But the country is in a deplorable
condition, and 1t will take extreme meas
Lres 20 restore it to a condition of pros
perity."
The Scramble for Gold.
In the general scramble of foreign and
home creditors for gold, as there is not
enough to go round, it would necessarily
go to premium. with the inevitable result
that the s517. .0OO,OOO Of gold now in circula-
ticn in the United States (according to the
United States treasury circular of October
l. 1885 would be exported or boarded
As the total circulation of gold silver
greenbacks, treasury notes, bank bills Sill
yer certificates and all other kinds of mon
ey In the United States was on October /.
1895, 81 H.5S2, 100000. forcing SSH, 600. 600 of
gold out Of circulation would reduce the
money in circulation about one-third. That
is to say, where there are now So of money
in circulation, then there would be but s.
Such a radical and sudden contraction Of
the currency would Of itself alone and en-
the depreciation Of the currency cause a
stringency and panic such as we have never
known But coming on top of the other
panic, the ruin 1t would spread would be
difficult to describe.
Thus railroad stocks with gold mortgages
ahead of them (as gold must be bought to
pay interest, thus increasing IL not dou-
bling this fixed charge, and to that extent
diminishing or entirely wiping out the net
earnings applicable to dvidends) with earn
i1.gs diminished by the business collapse,
would in the general panic become abso-
lutely unstable. The bottom would have
dropped out Of then.i Banks. therefore.
would become absolutely unable to realize
on their collateral and though a combina-
ton might save the strongest for time,
ultimately they, too. must go to the wall.
The Generalization would be complete.
In this general crash all factories, mills,
building operations, &C., would shut down,
and all classes Of workmen, mechanics and
laborers except farm hands be generally
thrown cut of employment
Under tie keen competition Of this mass
of unemployed for the little work left, it
is clear that wages, instead of rising. must
In the near future fall even though paid
for in deprecated dollars. because Of the
many who want employment, and must
take 1t at any price to save themselves and
their families from starving.
With no wages, the unemployed laborers
could buy neither food nor clothing, and
the diminished demand would cause the
prices Of grain, cotton and all farm pro-
ducts to fall as il ALWAYS the caae even in