The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1896-08-06

In last weeks issue the history OF
bimetalllsm In the United States was
brought up to the year 1853. 1t will be
remembered that since 1872 we had
practically been on gold basis. The
act of 1853 had for its object the coinage
Of subsidiary silver. This was accom-
pllshed by changing the weight of these
coins. Thus the act OF 1853 recognized
the prevailing gold standard and re-
duced silver to the. position of subsidiary
coin. Though the government had twice
fixePthe ratio between gold and silver
IN the hope that both metals could be
made to circulate together at parity
recommendation resulted each time, first
silver monometalllsm, then gold mono
metallism.
We remained on gold basis until 1862
when the United States legal tender
notes, commonly known as green backs
drove out both the gold and the sub
sdiary silver, though we we're still NOM
lnally on gold basis.
In 1873 what is known as The demone-
tization of silver took place. But this
act at the time OF its passage caused
little comment and less criticism because
it simply recognized conditions that had
been acquiesced in for nearly thirty
years.
The agitation in favor of free coinage
Of silver was renewed when silver began
to fall in value in 1879 and particularly
in 1876. By the latter date 1t had fallen
so that it's ratio to gold was nearly IS to
|, that Is, it took eighteen ounces of
silver to buy one ounce of gold. BY 1878
the ratio was 1871 Obviously the free
coinage agitation at the ratio of l6:1 was
begun by the western mine owners and
the holders of silver bullion. With free
coinage ninety cents worth OF silver
could he taken to the mint and coined
into a dollar legal tender. The free
coinage forces were partly unsuccessful.
A compromise measure was the result,
the fatal compromise of 1878. This was
known as the Bland-AllIson act. Accor-
ding to this measure the United States
was to go into the banking business. The
government was to buy from two to four
million dollars worth of silver bullion
each month and coin it into silver dollars
at the old ratio of 16:l. This was de-
preciated money from the start. Bnt it
circulated at par because the government
had issued it, and because of the general
understanding that the United States
would make good any loss. Over $780,
OOO,OO0 were coined, but only 100000
standard silver dollars were IN clrcu-
latlon at any time The rest had to be
''coaXed" into circulation by means of
the silver certificates.
What effect d d the forced buying and
coming of such vast amount of silver
have upon the value Of silver? Did it re.
store the old ratio OF l6:l, as was promis-
ed it would in the debates on the act of
1878? Decidedly not Soon after the act
went into effect silver rallied, but only
for moment. In 1879 It took Is ounces
Of silver To buy one ounce of gold, while
just before the adoption OF the act it
took 1915. But slight rs this gain WAS,
silver did not hold lis own. By 1884 the
commercial ratio was nearly 10 to |; the
next year pol, and after thBt it's decline
was rapid.
And all along we were buying silver at
the rate of from two to four million
ounces per month and coming it INTO
silver dollars. And all along the coined
silver was losing in intrinsic value and as
a consequence the people of the United
States were becoming alarmed that the
government might not be able to redeem
It's deprecated money. There was gold
reserve of &100,0O0,000 but that was kept
to back up the S346,O0O,000 green backs
Could II stand the additional burden
made necessary by the coinage of the
constantly deprecIating silver coin?
BY 1890 1t was realized that something
had to be done to relieve the strain and
restore confidence in our monetary sys-
tenn. But again the fatal compromise
spirit manifested itself. The act OF 1890
provided that silver should no longer be
coined at the ratio 1911, but that the
silver bullion purchased by the govern
ment should be stored In vaults, and
treasury notes issued in payment of this
silver. The treasury notes we're to rep
resent the market value of silver, and in
this respect were an improvement on the
standard dollars. But on the other hand
they were made redeemable IN coin.
which had to be construed to mean gold.
in order TO keep up the credit cf the
United States. It thus woAked to under
mine the stability of the gold standard,
in as much as an additional burden was
added to tue Sl00,0OO,OOO gold reserve.
Every commercial nation of the world
! had long ere this recognized that there