The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1896-07-25
Can We Maintain the Ratio ofle to l

In view of the declaration of the Chicago
Convention in favor of the ''free and unlimt-
ed'' coinage of silver at the ratio of l6 TO /,
the question, Can the United States (inde-
pendently of the concerted action of EurOpe)
establish and maintain the parity between
gold and silver at the ratio named? is of in
creasing interest
Eastern politicians and capitalist for the
most part answer this question in the mega
tive The Southern and Western Democracy
have answered in the affirmative. Both an
swers being presumably influenced by per-
sonal interest, an unprejndiced Investigation
may elucidate the probable truth.
The consensus of impartial scientific opin-
ion may be said to have resulted in agreement
up on the following propositions
|. Since 1878 gold has risen in value 100
per cent. and silver and all other commodi-
ties have fallen SO per cent.
2 Under the gold standard gold must CON
time to appreciate and other commodities
repreeate.
8. These conditions benefit the holders of
realized riches, and persons with fixed in
comes, and tend to hard times, the impover-
ishment of the many and the bankruptcy of
the debtor class.
A.. Hence a return to the bimetallic stand
ard is desirable, if feasible.
The only plans suggested to such return
are:
First-The Whitney plan of international
agreement This includes England. Is 1t
probable that England will consent to such
agreement? She demonetized silver in 1916,
and has since steadfastly adhered to that poll
cy The London Economist in 1888 said :
iEngland being the chief creditor of the
world, it is to her interest to keep the volume
of money as small as possible in countries
from which debts are due, in order to get
more of their products in payment OF interest
due to her citizens" In 1886 Sir Robert N.
Fowler, ex-Lord Mayor of London, Mem
ber of Parliament and a banker, said: The
effect of the depreciation of silver must finally
be the ruin of the wheat and cotton industries
Of Amenca and the development of India as
the chief wheat and cotton exporter OF the
world" In 1872 the London Daily News
said: ''For Great Britain, pre-eminently the
creditor among all nation, to adopt 1t would
be midsummer madness, indeed. bi-
metallism would shake to its foundations the
financial fame and supremacy Of Great Brit,
aim In late speech Mr.. Gladstone said
of England at is the great creditor nation
of the world, and it is increasingly the great
creditor country ofthe world In that speech
Mr.. Gladstone estimated the holdings of Great
Britain beyond the limits of her kingdom at
$40, 900, ,00O, 900, and admitted that bimetal-
lism wonld result in England making a pres
ent of $500, 900, 600 to the world. William
Henry Grenfell, chairman of the Bimetallic
League of England, declares that if we wait
for England to show the way we will 'wait
forever"
Since it is to the interest of the creditor
class to maintain the gold standard, and that
class controls the policy of England, bimetal-
lism by international agreement may be DIS
missed as out of the question.
Second-The other plan is for the United
States to go it alone.
The proposion is that the United States
shall establish the dual standard by their own
decree, independent of European action.
Can this be done? Such experiment is at
once new and old. 1t is old because we had
free coinage of both metals up TO 1879. Ii IS
new because heretofore the coinage of the two
metals has been established upon ratio APP
proximating the commercial value Of the
metals
Mr. Hamilton was opposed to attaching the
unit of value TO either metal for the reason
that to do so would ''destroy the Office and
character of one of them as money, and re-
duce it to the situation of mere merchandise,
and he held that ''to annul the use of either
of the metals as money is 70 abridge the
quantity of circulating medium and is liable
10 all the objections which arise from com
parison of the benefits ofa full with the evils
of scant circulating medium. In this view
Mr.. Jefferson concurred, saying that "the
unit must stand upon both metals.
It was found that the commercial ratio was
l5 to ], and Congress by resolution July 6,
1885, declared that the money unit should be
dollar, and by resolution of August 8, 1876,
fixed that dollar at 3711 grains of fine silver
and 24a grains of pure gold, which were
thought to respectively represent the com
mercial value Of the metals to be coined.
At that time both metals were in universal
use us primary money.
The commercial value of silver and gold
bullion, like other commodities, is controlled
by the law of supply and demand, and so soon
us the United States and the European nations
closed their mints to silver the decreased de-
mand lessed the price Of silver bullion, while
the increased demand for gold thereby caused
increased the price of gold. Thus the two
metals parted company in value as well as IN
money use.
1t will hardly be questioned that interna-
tional free coinage would restore silver topaz
with gold. In such case gold, no longer
having the monopoly, but being IN competi-
would rise until parity was reached.
1t will also be conceded that the parity
would be maintained with free coinage by
the United States alone at a ratio of 30 to !.
This is what is meant by some when they say,
''Put a dollars worth of silver in silver
dollar;
The fallacy of the contention for taking the
present commercial values as the basis of the
coinage ratio is that it leaves out Of consider
alton the increased market price of silver that
would come from its increased use caused by
its restoration 20 mintage.
Could it be definitely ascertained in ad-
vance what effect free coinage would produce
on the price, the ratio could now be fixed ac-
cordingly, and the problem would be solved.
That there would be rise in silver by restor-
ing that metal to free coinage in our miBts is
clear. 1t is equally clear that there would be
a corresponding fall in the price Of gold.
Whether gold would fall and silver rise until
the parity between them were permanently
restored depends rpon the question whether
the demand for silver money would equal the
supply.
II seems clear that free coinage by the
United States would for the time being re.
store the parity in this country, for no one
would take less than Sl.29 an ounce forsilver
bullion when by sending it TO the minis he
could get that price in legal tender money.
Whether the United States could maintain
the parity at that ratio depends, as already said,