The herald., 1896-09-27
BY A. J. UTLEY

| lion from any person. Under free COIN
age, II silver was presented at the mint
it would be received by the officer in
charge, coined into money and handed
| back to the person presenting 1t. That
Is all there Is of free coinage. Suppose
Mr.: Rothschilds should come over to
this country with shipload of silver
puii1on and present 1t at the mint for
coinage; under free coinage, we would
receive his silver bullion, coin 1t into
money, and give 1t back to him. We
would coin 1t into American money
we don't run mints for any other coun-
try. Being American money he would
nave 10 spend 1t In America. If he car
| rledI II out or the country, the moment
he got three marine leagues from shore.
1t would become bullion in his hands
again. II he paid 1t out for commodities
1t would enter into circulation, form a
part of the circulating medium of the
country, stimulate business and add to
| the general prosperity Of the people. If
any foreign gentlemen have silver bull
lion that they desire to bring to this
| country and have coined into American n
money l. certainly, have no objections.
| We need some addition to our money
| just now, very badly.
1t is claimed by gold standard men
that the reason why silver has declined
IN value as measured by gold is because
| or the over-production of silver. 1t ia
an economicN theorem that so long as
both metals have free and unlimited
coinage at certain ratio the amount
| of production Of either of the metals can
have no effect upon the ratio. Mr.. Jew
ons, the great English political econo-
| mist. in his Theory of Political Economy.
| published in 1879, says.
| THE ratio of equivalent weights of
silver and gold which had never before
risen much above 16 to 1, commenced to
! w q
1861 as high as 221a to in the London
market. Though 1t has since fallen, the
ratio continues to be subject to frequent
considerable oscillations. The great
production of silver in Nevada may con-
tribute somewhat to this extraordinary
result, but the principal cause must be
the suspension Of the French law of
double standard and the demonstration
of silver in Germany. Scandinavia and
elsewhere"
Mr.. Jevons says the principal cause Of
the divergence between the metals was
the suspension Of the French law Of
double standard and the demonstration
of silver in Germany, Scandinavia and
| elsewhere.
I propose to prove that the only cause
OF the divergence between the metals
was the adverse silver legislation in the
United States and Europe. and that the
great production Of silver in Nevada
had nothing to do with 1t.
Mr.. Laughlin. professor Of political
economy In the University Of Chicago,
| in 1888. published work on Political
Economy in which he gives chart show
Ing the worlds production of gold and
| silver from 1893 to 1885. His chart Is d.
vided into two sections, the first section
| extending from 1893 to 1885, and the Sec
! ond section from 1850 to 1885. 1t appears
| from this chart that the worlds produce
ton OF gold from 1893 to 1850 was ss,S14.-
100000; and the worlds production Of
| silver during tho same time was $685.
| 100000. From the same chart 1t appears
that the worlds production of gold from
| 1850 to 1885 was $4,425,0 900, 900, and the
worlds production of silver during the
same time was $2,397 ,000, 900. During the
| first period named. the value of silver as
| measured by gold was much higher than
during the second period. If the amount
or production had controlling influ-
would have been true '''''
If the legislative demand 10 for the
total available supply Of both gold and
silver. and the legislative demand fixes
| q price at which the total available
supply Of both metals will be received.
then It necessarily follows that while
the metals may change in value as
measured by commodities they cannot
change in value as measured by each
other.
In proof Of this proposition, I desire
! to cits the fact. as shown by Mr.. Jevons,
Del Mar and others, that from 1898 to
1909 gold fell in value as measured by
| commodities 46 per cent; and that from
1909 to 1S49 gold appreciated in value
145 per cent. The commercial ratio be-
tween gold and silver in 1893 was 1889
to 1; in 1909 It was 1895 to l. only trif-
ing fluctuation-less than cents per
ounce. And yet, gold had fallen in
value in the meantime 48 per cent. If
gold had not carried silver down with
it, the commercial ratio In 1909 would
have been S.42 to 1. AS we have already
seen, the commercial ratio between gold
and silver in 1909 was 1895 to l; in 1S49,
1t was 1878 to /; and, in the meantime.
gold had appreciated in value 145 per
cent. II gold had not carried silver
up with 1t, the ratio between the metals
| in 1s49 would have been 39.68 to 1; but
at q matter of fact, the value Of silver
measured by gold. notwithstanding the
appreciation Of gold. was little higher
| In 1S49 than 1t was In 1909 before the ap-
probation Of gold. Is it not conclus-
lively shown from these facts. that so
| long as the metals have free and unlirn-
| tied coinage at certain ratio they can
| not separate In value, but II there be
a material change in the value of either
| of the metals the one changing In value
will carry the other with 1t? And is it
| nOL necessarily tTuo tudt tiiC SOiuihO Va
| both metals would be less liable to SER
; ious fluctuation than either would be
standing alone3
| That legislation may establish and
maintain any ratio between the metals
SO long as they both have free and un-
limited coinage, and that the country
producing the greatest amount Of bull
! lion, or able to control the greatest
! amount of bullion, will have controll-
ing influence in fixing and maintaining
the ratio is fact well authenticated
| by history.
The Encyclopedia Britannica. volume
%, page 73, in its historical account Of
| the ratio, says:
"In Spain, by the edict Of Medina
(14sO the ratio was 10 8-4. When Amer
lea was first piundered the first fruits
were gold, not silver; whereupon Spain
| In 1546, and before the wealth Of the
silver mines of Potosi was known. raised
| the value Of gold to 13 1-3; and as Spain