The herald., 1896-07-09
CLEWS' WEEKLY LETTER

NEW YORK. July 8. 1896.
During the past week, the bear" element
has found fruitful source of selling in the
exciting reports relating to the prospective
Chicago convention. Between the wild ex-
citemcnt of the silver delegates. the plots
OF Altgeld for controlling the convention
and the unwise and feeble tactics Of cer-
tain of the Eastern sound money leaders,
1t has been found easy to break prices by
vigorous short selling: and the fall in
prices for the week has therefore been
considerable. The sales, however. have
been almost entirely by professional opera
tors. Private investors have shown no
disposition to part with their securities
and London. in spite Of the weakness here.
has evinced o recovery of confidence by
taking 1000 shares of stock. besides a
good amount of bonds. The bears" have
found 1t possible to shake out consid-
cradle amount of stock carried on mar
gins; and that success has been the main
cause Of their persistence. These opera
tions have produced q feverish feeling. and
have naturally fostered the prevailing dis
trust. This unsettlement is likely to con-
tinue through the Chicago convention and
may quite possibly be aggravated by its
exciting developments. After that, the case
months of earnssp rA the people for four
the popular verdict at the elections pend
ing which there will be less material Tor
the creation Of speculative sensations.
Rarely, in the history Of national cleo
tions. have the people been called upon to
choose between more vital Issues; and 1t is
to the last degree important that there
should be clear conception respecting the
interest at stake. The public choice is be-
tween the continuance of basis under
which gold or its equivalents may be de-
manded in the settlement Of all contracts;
and basis under which silver dollars
alone would be used in payments; such
dollars being sixteen times the weight OF
the gold dollar. At the present value OF
silver bullion, the silver dollar would need
to weigh about thirty times the weight OF
the gold dollar, in order to make the two
coins of equal value. 1t follows. there
fore, that If. as demanded by the silver
ties. any holder Of silver bullion can have
his metal minted into dollars at the rate
of sixteen weights of the white metal to
one of the yellow, the dollars SO coined
would have an intrinsic of metallic value
of only about one-half that of the gold
dollar.
1t is proposed that this deteriorated
dollar shall be coined without limit.
whether from silver imported or that COM
ing from the home mines. 1t is also pro.
posed that these dollars shall be a legal
tender to any amount In the liquidation
of contracts. Under this scheme. the
United States would stand exposed to an
issue of silver dollars limited only by the
worlds entire current production and Its
accumulated stocks of coined silver. What
would prove to be the depreciation Of the
silver dollar under such conditions. 1t is
impossible to tell One of the first effects
of the change would be for the European
nations to exchange. as far as possible.
their ], 800, 900. 900 of silver bullion and coin
for our gold. Besides that, under the
natural law by which an inferior currency
always displaces q superior one, our sup
ply of gold would leave the country. In this
way we should lose our gold circulation
and become an exclusively silver-paying
nation with an attendant enormous loss
of the only stable form of money and a
consequent contraction of the circulation.
We should then be upon the same monetary
basis as China, Japan. Mexico and third
rate nationalities. Provided silver kept Its
present bullion value. our dollar would
then be worth a fraction over one-half of
it's present valuation; and to that extent
the purchasing power of our entire paper
circulation would also be diminished. All
our mercantile debts outstanding when
this state of affairs took effect Would be-
come payable In this deprecated money.
excepting those made under special con-
and the interest upon it would be legally
payable in the same STUFF; tnasmuch as the
law authorizing the DOndS makes tnem
payable "in coin," without stipulation as to
Whether the coin shall be Of silver or OF
gold. The many thousands of millions Of
real estate mortgages, and OF bonds or
every form, and the interest upon all cor
porate stocks, all of which are now pay
able in gold or its representatives, would
then become payable IN this silver money
of unknown value. Thus, the enormous
sum of national investments and the wealth
which they represent would not only lose
their stable gold standard Of value, but
would become enormously deprecated,
and their price would be ever. fuctuating
with the oscillating price of silver bullion.
The g. 700 900, 600 of private deposits In banks
and trust companies would suffer in the
same way, and so would the 1.S0O OO0. 900 OF
the workmans accumulations in savings
banks. as they would become payable in
the same deprecated dollar What would
become Of our foreign credit may be In
1,5O0, 900 to 1000 100000 If investment secur-
ities outstanding in foreign countries a
large part Of which would become payable
in this 'deteriorated coin.
These are some of the more obvious con-
sequences that would Immediately follow
the adoption of unrestricted coinage Of
silver in the ratio of sixteen parts of the
white metal to one of the yellow. What
would follow. 1t Is not difficult to foresee.
Our credit system would be paralyzed, II
not ruined. Capitalists who are conduct
ing vast industrial enterprises would nee
essarily be seriously embarrassed. The
ruin of producers would be inevitable and