The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-09-24

IHdt can anect the Tdt1O DttWttH sOIu anu
silver. and that is the fluctuations of sup
ply and demand. All the syndicates OF
bankers or moneyed men-nay, all the pow
er or the government-cannot change the
commercial ratio of gold and silver. That
rests upon a higher law. and we might as
we'll legislate TO keep back the tides OF the
ocean as to legislate as TO the relative value
OF any two commodities. Let US suppose
that law Is passed that the commodities
Of wheat and corn should never be bought
or sold only at the ratio of to 1.-TWO
bushels of corn should always be the equiv
alent of one bushel of wheat. Does any
one suppose that such law would have
any practical effect on the market? The
course OF trade would simply ignore IL, ana
the law would be a mere brutum fulmen.
The experiment has often been tried 10 es-
tablish the price of a commodity by stat
ute, and I defy any one to show an IN,
stance where IL has succeeded. / should
qualify what have said by the admission
that If any man, or body of men, or govern
ment, buy up all there is of an article ana
hold IT. thereby creating an abnormal sup
ply, and an artificial demand. that they can
fix prices to suit themselves. But there is
no danger of this in regard to the precious
metals The estimated amount OF silver IN
the world, coined and uncoined, is SS,OO0.OOO,-
OOO To corner this amount would be
pretty large contract, even for the most
powerful government.
EFFECT OF FREE COINAGE.
We are now ready TO see why the un-
limited coinage of both metals at any
fixed ratio would inevitably result in the
withdrawal from circulation of one of
them, so that instead of bimetallism we
should have recommendation, and that in
variably of the cheaper metal When our
coinage was established in 17S5 an ounce
of gold would buy fifteen ounces of silver.
The ratio therefore was Is to /. Our faith
ers, therefore, provided for the free and
unlimited coinage of both gold and silver
at the ratio of Is to 1. Now, if this relative
commercial value could have remained SO
Until this day, there could be no objection
to their unlimited coinage. I would call
your careful attention TO what follows,
as IL is the key to the whole question. AS
soon as either metal declines in market
value below the ratio, the other metal is
worth more as bullion than its nominal
value. Consequently, 1t Is not used for the
payment of debts, or the purchase of goods.
An illustration will make this perfectly
clear Let us suppose that Congress had
passed a law in consonance with the Demo-
cratic platform to take effect on the 1st
OF August Bear in mind just what Is they
want: The free and unlimited coinage of
both gold and silver, and that the dollars
so coined shall be a full legal tender for
all debts, public and private" Now, let us
suppose owe a man slO0payable some time
after the 1st of August. i have 800 in gold
with which 1 had intended to pay my
debt Instead Of doing this. take my 800
and buy silver bullion To-day L can buy
all wish at 5S cents an ounce. For my 500
purchase li2 ounces OF pure silver. This is
equivalent to $3.50 grains. The coinage
law requires 37l.25 grains to the dollar. So
| take my silver to the mint, and receive
for 1t SOD dollars; pay my debt and have
Sl22 left. Can any one suppose for mo-
ment that gold would circulate under those
conditions? Every gold eagle would be
worth twenty-five silver dollars. and every
half eagle eleven. To-day 1 used half eag gle
/ a II hav va
changed 1t for eleven silver dollars There
is no escaping this conclusion. Gold would
be Immediately and entirely withdrawn
from circulation for the reason L have
stated, that it would be worth more as
bullion than Ii is as money. This is the
bimetallism to which Mr.. Bryan invites US.
1t only exists in his fancy at Is must
Bryan, at Topeka, told US that the reason
| We were enjoying measure of prosperity
| was, as he had always claimed, because
| we had more money in circulation. What,
| then, must one think OF measure which,
| by one fell swoop, would deprive us en-
| tirely of half our metallic currency? Such
| contraction could not help but result
| in widespread disaster. What l have said
| in regard TO silver Is equally true In regard
| to gold. Should the price of silver bullion
ever rise. as IL once did, to $1.29 an ounce
an ounce of gold would only purchase
| fifteen ounces of silver, which would be
| less than the legal ratio, and the silver
being more valuable as bullion than as
| currency. would disappear. This is just
| what occurred between 1910 and 1860. Sill
| yer being at a premium, our currency Wa:
made up entirely of gold, pape- money and
| foreign coins.
| PROVED BY HISTORY.
81 promised to prove the truth of my
| contention by history. Let us, then, ex.
| annie what we can learn from the history
of coinage from the foundation of the gov,
| ernment. / shall make no statements bu
such as can be substantiated by publ,
documents. In 1892 Congress in establish
ing a mint provided that the Spanist
milled dollar, containing 371.25 grains o.
pure silver. should be the unit of value
They also made provision for the free ant
unlimited coinage of both gold and silver
1t was enacted that 24.75 grains of gol,
should be equivalent to the silver in TIL
| dollar. This, as will be seen, was at tn
ratio of 10 to l. For nearly 200 years tn
ratio, as / have before said, fiuctuated II
the narrow margin between l4s and 1850
It was thought that the ratio of Is to
would be about a fair average. 1t wa
claimed then as IL Is to-day that If tn
price of bullion did fluctuate little, tina
II one metal should rise in value above tn
other, ana thereby create disposition L
board or export 1t. that its Disappearance
would create demand for 1t, that wou
soon restore the equilibrium, and so tn
| TWO metals WOULD balance each other an
could both be used. But the inexorabl
laws that govern prices, cared nothing 70
theories, and 1t was soon found that gol
had been undervalued, and was being ex
ported, or sold as bullion. From 1920 I
1890 the legal and the commercial ratio CO
incided, and for the only time in our his
, tory We had the use of both metals, O
bimetallism, with free and unlimited coin
age But after 1880 the same trouble re
appeared, and Congress found 1t necessar
to alter the relative value of the coinag,
| In 1884 the amount of gold in the dolla
| was decreased to 23.2 grains. This mad
the ratio 16.045 In q short time this wa
found to be little too far in the othe
direction. and the same trouble supervenet
Three years later, In 1887 Congress agai
attacked the troublesome question and in
creased the gold in dollar to %. % grains
|, This made the ratio 15.9SS Since then ther
. has been no change, except in subsidiar
, coinage, as i shall explain. Soon IL wa
|, evident that the new ratio undervalued ST
. yer, and the silver dollar disappeared frol
years. Here / wish to extract a few SCI
fences from the Library of Univers;
, knowledge work of standard authorit,
, 1t will be found in Vol. X, r. 129. L ask
! | careful reading, as Ii is full of instruction
: ! While the legal value of silver TO GO
| was 1 to Is, gold at a premium, ar
, | disappeared from circulation to pay 70
eign debts, as 1t would pay more than
home. After the ratio of is to / made
. | the law of 1887 until 1874 the silver dolls
: bore a premium over the gold dollar I'm II
: Silver in consequence became scarcer, b-
: did not entirely disappear as gold won
| have done under the same condition,
account or its indiSpenSableness for sma