Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1898-04-08
The Cause Of Free Silver.
THE Bo1Es COMPROMISE.
g ten Entertained by Iowa's
ssS~ Ex-GOvernOr.

= Glance ut the Latest Financial No-
ten Entertained by Iovva's
#&~ Ex-Governor.
2 Ex-Gov. Boies, Of Iowa, has come to
the front again with his compromise
proposal upon which he thinks both
wings of the democratic party, gold
monometallists and bimetallists, can
be brought together by 1900. We must
confess we see little reason to look for
either silver or gold democrats to take
up Mr.. Boies' plan. Still it may be
worth while to glance at his compro-
mise. In the first place, Mr.. Boies puts
to one side the demand for free silver
coinage at the ratio of sixteen to one
or at any other ratio. He proposes as
a substitute that the treasury shall be
opened to the deposit of silver bullion,
and that silver certificates shall be is
sued to the depositors to the market
value of the silver deposited. Such de-
posts would be unlimited save by the
stock of silver. The certificates thus
issued Mr.. Boies proposes to redeem,
not in silver coin, but in silver bullion,
not by returning the amount of silver
bullion deposited, but silver bullion to
such amount as may be worth at mar
ket rates the face value of the silver
certificates. Thus, if silver should fall
in market price SO that it would be
worth much less on the day Of redemp-
ton than when deposited the govern
ment would have to return more silver
than It received. This would appear
to subject the government to the risk
of great loss in the event of fall in
ingeniously provides by simply provid-
ing that the government shall take the
silver certificates redeemed and buy
with. them silver bullion in the open
market. So the government would get
just as much silver back on the notes
as it paid out, would have just as much
silver on hand at the end of the trans
action as at the beginning. If, on the
contrary, the price Of silver should rise
so that it would take less silver bullion
to redeem notes than was deposited the
difference would remain as profit to the
government and go to swell the cash
balance of the treasury. He would also
treat gold in the same way.
Now let us see how this plan would
work. We are at once confronted with
the questions: What is to be considered
the market value of silver? It's value as
measured in gold? If so, then the value
of the proposed silver certificates would
be fixed absolutely by the value of gold,
though, of course, this plan might re-
suit in moving the value of gold.
If, on the other hand, the new pro-
posed certificates redeemable in bull
lion were made the measure the value
of such certificates might take an in
finite downward flight, for just as they
were increased in volume and fell in
purchasing power the value of gold and
silver as measured by these certificates
would rise and it would take less to re-
deem them. Consequently redemption
would be no check to imitation. And so
the imitation and fall in value might go
on ad infnitum. Of course, such GER
tifcates could not take much Of an up
ward flight, for if they did debtors
and take out notes, SO increase the vol
ume of money and make these certif-
Gates cheaper.
But we presume that Mr.. Boies has in
mind the gold value of silver when he
speaks of market value, and therefore
the value of the certificates would, be
fixed by the value of gold. But the eff
feet on the price of silver would, no
doubt, be extra ordinary. It would be
quite possible, indeed probable, with
this inducement, for speculative
clique to corner the loose silver in the
markets-there are only few million
ounces-jump up the price to the pres
ent mint price of silver and deposit at
that value. Higher than this they could
not well Jump the price, for if they did
all the coined silver of Europe and
America would become available as bull
Hon-that is, could be melted down and
sold as bullion at profit. And this
would effectually prevent rise above,
say, our present mint price.
Such speculative rise in silver might
be followed by reaction, but there
would soon come into operation fac
tor that would check such fall. That is,
the government would appear as pur-
chaser, for every time q note was pre-
scented and redeemed in more silver
than was deposited the government
would go into the market with that note
and buy silver. And this, of course,
would keep up the price, while it would
keep all the certificates In circulation.
This, meaping expansion AND rising
PRICES, Would lead to 9 drain Of either
gold or silver or both In Europe, rise
IN price Of such metals in America. I
fall in Europe. The final result would
be maintenance Of the price Of silver at
q fixed parity with gold,, which parity
would be the present coming ratio Of
the world, for it is at such price that a
practically unlimited stock Of silver
would be available for deposit. That Is,
# the price rose above this, great depos-
its of silver for certificates would at
once take place. Soft would appear the
results would be much what they would