Evening star., 1896-10-03
GOLD AND SILVER PRICES
Deputy Controller Coffin Talks on Auditor
Baldwin's Figures.
He Does Not Accept the Conclusion
Deduced From Them by the Adj
vOcates of Free Coinage.

z
the currency, was asked by a Star re-
porter today whether he had examined
| the statistics showing production of gold
| and silver for the past four hundred years
| recently prepared for the democratic con-
gressional committee by Auditor Baldwin,
and II so whether he was satisfied that
1.-The value Of silver during that time was
| liked by the coinage value of the metal and
| not by the bullion or commercial value"
Il have not verified the correctness Of
| the figures given." said Mr.. Coffin, but
| assuming this I am very far from accept
ing the conclusions deduced from the fig
ureS.
In the first place. the statement is made
| that from 1893 to 1850. while the world 8
production of silver was 31.52 times as
great as that Of gold, the ratio of COM
| mercial value was comprised between Ii. IA
| and 1925. Now, as these two ratios are
the highest and lowest given in the mint
report for the years from 1857 to 1850. l am
| inclined to think that no research has been
| n ade into the commercial ratios from 1893
| to 1857. period of 1914 years. 1t appears
| from the best authorities that in the year
| 1875 the commercial ratio was about IL to
| L; in 1908 1t was IL to !, in 1926, 13 to L,
| and in 1910 the market value of silver had
| declined to 14h to l. Further than this
the facts of history show that prior to the
discovery of America in 1892 gold was
seldom more than ten or eleven times as
valuable as silver. but after that the price
Of gold rose because of the great supply
Of silver. AS to this greatly Increased
| supply Of silver, after 1892. see figures in
the mint report showing that the total
| worlds product of gold, 1661-16SO was
5.9o4. 1sO ounces, against 5,221, ,16O ounces
for 1493-1520, while the product of silver
216691,OOO ounces in 1661-16sO. So the
facts are these: That instead of the ratio
from 1892 to 1850 being comprised within
variation Of 14.14 to 1926 the variation
| n orkC l11c nf Gil h.,%rr
years named was between II and 1925 in
| stead and this great decline in the value
| Of silver was manifestly due to the enor-
mously increased production between 1892
and 1857. when the great fall in its price
occurred.
| A Factor Ignored by Free Coinage
Men.
''The stable value of silver compared with
gold between 1880 and 1872, when the ratio
| Of production was only about to /, is,
| think, mainly accounted for by a factor
| which is practically ignored by free coin
age advocates. and this is % the vast ex-
pansion of the banking system in most
commercial nations. but chiefly in the Unit
ed States and England, and (O the large
addition of paper money to the currency Of
the United States. which did, and still does,
the work of an equal amount of gold and
silver.
with regard to the first of these causes.
statistics show that in Great Britain, whic b
has practically had the single gold stand
ard since 1717, checks, drafts and bank
credits furnish fully 90 per cent of the en-
tire money circulation Of the people while
less than l per cent is specie. AS to this
statistics repeatedly gathered with care in
the United States show that 80 per cent Of
| bank deposits are checks, drafts, &C.. and
only 10 per cent is paper or metallic money
Of all kinds.
Large Amount of Paper Money.
NOW. as to the second cause, the large
amount of paper money which, in the Unit
ed States. between the years 1862 and 1873.
supplanted the place of silver and gold as
money, was. and Is, vital factor in the
silver question. which is not given due
weight.
Look at the figures: In 1862 the entire
paper money Of the United States was
about OO,OOO.O 900 state bank circulation. In
1873 this had been withdrawn and in its
place were $3.50, ,OOO, 600 of "greenbacks'' and
about $3.50, 100000 Of national bank circula-
tton. total of about $7OO, 1000, 600 In 1874
against $20O.OOO,OOO in 1862, or a net in
crease of $5OO,OOO,OOO of paper money dur
ing those few years. This great volume of
paper money largely offset the reduced pro-
ductfon of silver from 1850 to 1878, and
with some minor causes helped to sustain
Its market price, But coming to the period
between 1873 and 1885, when the production
OF silver again largely increased, this paper
money kept its place in the Circulation.
bank credits greatly increased instead of
diminishing. and thus silver became sub
1ect to that universal law of nature, the
law OF supply and demand, and tn obe-
d1ence to this law its price steadily de-
clined."