Middletown transcript., 1897-03-13


to day, moving up aud down with the rise and
fall Of the commercial price Of the bullion con-
tanned In 1t, as the Mexican dollar does now,
and the premium on the gold dollar would Of
course huctuate to the same extent, thus AZ.
fording an opportunity to bullion brokers and
speculators to buy and sell 1t at profit. u
would cease 70 be used as money, because NO
man would pay his debt In gold dollars or in
paper redeemable In gold dollars, worth LOO
cents, when the law permitted him to pay 1t
In silver dollars, worth only 81 or So cents.
The sudden withdrawal Of $500, 900, 900 from the
volume of currency in the country would un-
doubtedly produce q financial and Industrial
disturbance far more disastrous to the inter
ests Of labor than has ever been experienced
In our history, and no man who has particle
Of sympathy for working men and women and
their dependent families can contemplate the
possibility Of such calamity without feeling
that 1t is his duty, whether he occupies pub
lie or private station, to employ every HON
orable means at his command to avert it.
While the sudden expulsion Of s820, ,0O0, 900 In
gold from our stock Of money would itself be
sufficient to create financial disturbance un-
paralleled IN the history Of this or any other
country the situation would be very greatly
aggravated by the fact that the purchasing
power of all the remainder Of our currency
would be suddenly reduced about one-haH;
we should have only about two thirds as much
currency as we have now, and at the same time
It would be SO deprecated in value that 1t
would require about twice as much as we have
now to transact the business Of the country,
provided there should be any business TO
transact.
Double Standard Failure.
The attempt to maintain what Is called the
double standard of value-that is, to attempt
to keep the legal tender coins OF the two met
ais, gold and silver, in use as money at the
same time, upon ratio ofvalue liked by law
has repeatedly been made by kings and par
liaments in every civilized country in the
world, and it has failed again and again In
every one of them, and it requires no gift OF
prophecy to foresee that it must continue TO
fail SO long as self interest constitutes con-
trolling factor in the business affairsof men,
Without trespassing upon your patience 70
review the monetary history Of other coun-
tries in which this experiment has been made
and failed 1t may be advantageous to refer
briefly to orr own experience upon this sub
ject When it was determined to adopt
monetary system for the United States and
establish mint Alexander Hamilton and
Thomas jefferson, two men who differed
widely upon almost every public question and
whose names as founders and leaders Of their
respective parties will live as long as our po-
Iitical literature Is read. agreed that in deter
mining what should be the coinage or legal ra-
ito between gold and silver the true relative
commercial value Of the two metals in the
markets Of the world must first be ascertained.
and that this relative value, when ascertained,
should be incorporated into the statute as the
basis of the proposed system of coinage. Al
though they were party leaders, they were
statesmen and patriots, and when they wer5
called ON to consider this great business ques-
ton affecting all the private affairs OF their
fellow citizens they gave 1t thorough and
impartial investigation upon its merits, with
out regard to the effect their decision might
have upon their own political fortunes or
upon the political fortunes of their followers.
The srFathers" Not Disturbed by This De-
fusion.
These great men were never disturbed for
moment by the delusion that congress could
fix by statute the actual or relative values OF
gold and silver any more than 1t could nx by
statute the actual or relative values OF pound
of lead and pound of iron. They knew that
gold and silver, like all other exchangeable
things, are commodities and that their value
will be fixed in the markets Of the world.
They knew that it was entirely competent In
fact necessary, for congress to declare the ra'
ito upon which the two metals should be coined
at the mint If they were to be coined at all,
but they knew equally well that II the ratio SO
declared did not correspond substantially with
the ratio which the commercial world had es-
tablished, the coins of the two metals could
not be kept in use as money at the same time,
and consequently, as have already said, they
determined to ascertain the commercial ratio
and to adopt it. They reached the conclusion
that the true commercial ratio at that time
was Is to THAT is, that 15 ounces Of silver
were equal in value to ounce Of gold and
accordingly the act Of 1902, which was our first
| coinage law, authorized the coinage Of the two
metals at that ratio.
At the ratio thus established the silver dol
lar contained 37114 grains of fine silver and
a - 4~n1n l,rxk
| it was soon discovered that mistake had been
made and that S7IL grains Of fine silver were
| not in fact equal in value to 24z grains Of fine
gold, and the consequence was that although
| the difference between the value of silver
| dollar and the value of o gold dollar was only
about one cent and one-eighth Of cent, silver
| drove gold out of use and out of the country,
| and from that time we had silver monometal-
lism until after the passage OF the acts OF 1884
| and 1887.
The fact that the silver was put into the
| form of q coin and made legal tender the same
| as gold, and that both dollars were declared
| to be worth 100 cents each, did not increase
the value of the S714 grains OF silver to any
extent whatever. The people could not be de-
| ceiyed by mere words printed in statute;
they soon learned that the metal contained
/ in the silver dollar was not equal In value
| to the metal contained in the gold dollar,
and they paid silver to their creditors and
| boarded the gold or sent it out ofsthe coun-
| try Even our new and full weight silver
I coins would not circulate or remain in the
| country, because congress, by various acts,
made certain foreign coins legal tender in the
payment Of debts, and as they were generally
| so worn by abrasion as to be Of less weight
| than the new domestic coins they drove our
| dollars and half dollars. and to large extent
| our quarters and dimes also, out of use as
money. Our own coins were exported and used
/ at their bullion value in making purchases
| and paying debts abroad, and Mr.. Jefferson
| himself, who had then become president Of the
| United States, issued an order on the first day
of May, 1906 stopping the coinage OF silver
dollars at our mints. No more silver dollars
were coined until 1886, 80 years afterward and
| then only 1000 Of them were issued from the
| mints.
Restoration of Gold-Standard I'm 1884.
| Gold having left the country, congress, in
| 1884 during the administration of Andrew
jackson, determined to restore it to the circu-
1 lation and, in order to accomplish that result,
| the legal ratio was changed from Is to to
| about 16 TO THAT is, the law SO amended as
| to provide that the gold eagle or SO piece,
should contain 232 grains Of pure gold, which
| made the dollar consist Of % l-5 grains, but by
| $he act of 1857 IL was changed to 23.22 grains,
| which now constitutes the dollar and unit Of
| value. This was slight generalization Of gold
In the coinage because 23. q grains Of fine gold
/ were not IN Iact WOEbu dS uUCu IL OAo 1uhE-
kets as S71N grains Of fine silver. Although the
difference In value was very small, it proved
sufficient to change the whole character Of our
| metallic currency, and under this ratio gold
| and silver exchanged places. Silver went out
OF the country and gold came in, and from
that time until after the passage Of the act Of
| 1873 we had practical gold monometalliam,
| except during the period of the war. when we
had no metallic money Of any kind. When the
great civil war began, we had no silver in
i circulation except the subsidiary coins author
ized by the act Of 1853, but we had gold and
| paper redeemable In gold, and it was not long
| before we had another practical illustration Of
the natural law that the inferior or less Valu-
able legal tender currency will expel the SUI
| perior or more valuable legal tender currency
| from circulation.
Paper Currency Of War Period.
EARLY In 1852 congress, most unwisely, in my
opinion, authorized the issue Of legal tender
paper TO circulate as money, and the usual and
Inevitable result followed. Gold ceased to be
used as money and the banks and the treasury
having suspended specie payments. the coun-
try was flooded with deprecated currency
worth at times less than 5ocents on the dollar.
Later on fractional paper currency was au-
thorized by congress, and the effect Of this
/ was to drive out Of circulation even the light
i weight subsidiary coins, and for many years
not single piece Of metallic money Of any
kind was used by the people except ON the Pa
.~gru