Evening star., 1896-09-26
What is the Money Of the
Constitutional Value
of Gold and Sill
yer Dollars.

Bryan to the Constitution as authorizing
and requiring free silver coinage was not
justified by the language Of the Constitu-
ton Continuing the discussion of the Ques-
ton, TX Y. H." writes to The Star as fol-
lows:
What now In reality Is the coinage" or
money Of the Constitution for the
phrases are not inapt or improper unless
used to mislead. The determination of this
question is not difficult. The best interpre-
ters of the Constitution are probably the
men who framed 1t and their associates.
What they did in the execution of its sew
eral provisions affords the clearest evidence
of It's true construction. though 1t would
seem that there could be no doubt what
ever as TO the meaning Of its simple ut
terance regarding coinage
What, however did Congress do in carry
irg out this provision? In the first place 1t
directed the Secretary of the Treasury,
Alexander Hamilton, to submit report as
to the expediency of establishing mint OF
the United States. which elected his IA
nous and exhaustive paper covering the
whole subject of coinage. This report be-
came the basis and guide to all contempo-
rary legislation. In order to determine the
fundamental principles upon which the
coinage of the United States should be es-,
tablished. thorough and comprehensive
investigation was made into the laws and
practice Of other Lations regarding this
matter. one OF the points 10 winch special
attention was given and which is argued
at great length in the repor. is the
ratio which should subsist between
silver and gold. with the conclu-
siCE that this should be IS to l, that is.
that for coinage purposes one ounce Of
gold should be accounted as equal in value
to II ounces of silver. This fact is. how
ever. in this connection by no means of
much Importance as is the principle upon
which the recommendation is based, and
the reasoning by which it Is justified.
A tempting opportunity was presented for
the suggestion of some novel scheme in con-
nection with the currency of new nation
which. In theory at least. might have been
defended by specious arguments. Hamil-
agined fer a moment that any arbitrary
ratio between the two metals could be
tsibshed wisely attempted. He there
fore set himself to ascertain by careful and
minute inquiry what the real and recog-
rized ratio was among the nations in which
gold and silver were current,in other words,
to learn their comparative commercial
value. He says: "In establishing propor-
tion between the metals there seems to be
an option of one or two things, to approach
as nearly as can be ascertained the mean
or average proportion in what may be
called the commercial world. or to retain
that which now exists in the United States"
THE existing proportion in this country Is
about as l to 10. being very nearly that
which obtains in the market Of Great
Britain, while in Holland, the greatest
money market of Europe, 1t is to IA 9-1O."
''As the ratio of l to 10 Is nearly con-
formabe to the state of those markets and
best agrees with that of our own, it will
probably be found the most eligible" One
argument in favor of maintaining in coins
the commercial ratio of the metals urged
by Hamilton is that "the overvaluing of
either in respect to the other is the banish-
ment of that which Is undervalued." with
this result that there would be "a diminu-
ton of the total quantity Of specie and
that the country receiving payments in the
~ tod afa1 tcratS MT
an it ought to do, or than 1t would do If
the ratio were just one 1t Is not neces-
sary to quote further from his able and
luminous report. The arguments presented
were accepted as conclusive by the states
men of that day. In particular Jefferson,
however much he disagreed with Hamilton
en- other subjects. expressed his hearty con-
Currence in the views submitted in this re-
port. Acting upon its suggestions, Con-
gress. after due deliberation. passed IAN
act establishing mint and regulating the
coins CT the United States.' which was ap-
proved by the President April =. 1892 Sec
| tion II OF this act provides that the pro-
| portiolal value Of gold to silver in all coins
| which by law shall be current as money
within the United States shall be u to l.,
according to quantity in weight Of pure gold
| Or pure silver; that Is to say, every fiji zen
pounds weight of pure silver shall be of
| equal value in all payments with one pound
| fore, established as the original ratio Of the
| two metals. This ratio was maintained for
| more than forty years when by act of June
| %, 1884, 1t was changed to 1902 to /, and
| by act of January 1S. 1897 to 1J.9SS to 1, not
| by naming these proportions in the law, but
| by slight modification of the weight and
fineness of the coin. These ratios so nearly
| approximate 16 to l that they are popularity
| so denominated. In the meantime, between
| 1892 and 1884. it had been demonstrated
| that in liking the original ratio 10 to /,
Congress had undervaiued gold. In conse-
| quence this was withdrawn from circulation
| and sent abroad, where in the markets OF
| Europe it commanded a higher price. The
| conditions then existing brought into play
| and illustrated the operations of that eco
| nomic law known as the Gresham law
! which asserts in effect that Of two metals
J associated in coinage that which Is under
| valued will disappear from circulation, be-
| ing either boarded or exported. The ex-
| pc rience of those forty years. we'll as of
| later. shows that this law has the force OF
f! a law Of nature. The fact that change OF
| ratio SO small as that from Is to 1G to 1 was
| sufficient to check the withdrawal of gold
and to cause a withdrawal of silver. shows
| how extremely sensitive metallic coinage Is
| to the influence of this law.
| The Interesting and essential fact, how
| ever. far the question under con-
| sideratic Is concerned is this-that in the
| discussions in 1884 Of the proposition to
, change the ratio. the one point the deter
| miEation Of which was deemed by Congress
as Of prime Importance. was, as in 1902. the
commercial ratio of the two metals. No
| suggestion that any other ratio would be
|
/ general, If not unanimous. agreement on
| the part of Congress. with the view Of Mr..
! Ingham Secretary of the Treasury in 1880.
that it is only from the market price Of
| both metals without regard to their mint
price the true relative value Is to be
found" and that in fixing the ratio due
regard must be paid to the relative value
Of bullion in the great marts Of the world"
| The great object to be attained was to
Secure the circulation of both coins in
| tbs country" II the law should over
value gold the country would have no sill
yer circulation. as by overvaluing silver
it had before lost its gold. To ascertain
the commercial ratio and to make that
the mintage ratio was their chief aim and
effort They were guided. therefore, in
their deliberations and conclusions by pre-
cisely the same principles and convictions
that controlled their fathers. the states
men of 1892. Nor was 1t alone in the dis
cussions of 1884 that these views find ex-
preston. In numerous reports by ccm-
| mittees Of Congress and Secretaries of the
Treasury and others this question Of the
ratio Of gold and silver was considered.
but 1t does not seem to. have occurred to
their authors to recommend or suggest any
deviation from the policy already adopted.
VIZ: The conformity Of the ratio Of coina age
| to the ratio Of commerce.
What nou in View these fQcfa Ia tho