Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1900-07-26

Gold Goes Where 1t F1n0S 1Ge v aAue
and That Value Is What the Laws
of Great Nations Give tive Must
Give 1t the Same Value.
It has been suggested that II the legal
ratio of silver to gold should be SO
changed as to approximate the COM
mercial ratio, the objection to the free
and unlimited coinage of silver would
disappear This is not true. 1t is a
well-known historical fact that very
small variation of the commercial
ratio from the coinage ratio is sufficient
to expel one of the metals from the
country and disturb all business calcu-
lations and relations.
When the first United States coinage
act was passed, by careful calculation
and inquiry it was assumed that the
true commercial ratio was 10 to l, and
that was made the legal ratio. The
minis were opened to the coinage OF
both metals on that basis. In short
time it became apparent that either an
error had been made or the market
ratio had changed. The two metals
would not circulate together. Our gold
coins were slightly more valuable as
bullion than as money and were melted
down or exported.
This situation was maintained until
the act of 1884 changed the ratio to IL
to 1, and that act, which was designed
to correct it, actually reversed it. 1t
brought back gold, but drove out silver.
The true commercial ratio was some
where between 15 to l and Ii to l. FIJI
teen to / drove out gold, and 10 to l
drove out silver. After the act OF 1884
went into effect silver dollars would
not circulate in the United States I'M
less they were light weight. From 1888
down to the opening Of the year 1867,
when paper became the currency of the
United States, although the minis were
opened to the unrestricted coinage OF
silver the total number of silver dol
lars coined was $2,7O0,53
In 1929. when the change in ratio
was under consideration, Albert Gala
tin, who had been Secretary of the
Treasury under Jefferson, was asked
his opinion concerning the failure of
god to circulate, and in letter dated
Dec. 81 wrote:
The present rate was the result of in
formation, clearly incorrect, respecting
the then relative value of gold and silver
in Europe, which was represented as be-
ing at the rate of less than Is to 1, when
it was in fact 1916 to 1916 to 1. 1t would
be better at all events to discontinue al
ne n
tinue the present system.
The Hon. s. D. Ingham, who was at
that time Secretary of the Treasury
under President Andrew Jackson, was
asked his opinion, and advised the COM
mittee that any attempt to make the
metals circulate together under free
coinage would be fruitless. He wrote:
The fluctuations in the value of gold
and silver cannot be controlled; and even
the attempt to conform the mint to the
market values must produce a change in
the latter. But if, after adjusting the
ratio at the mint by raising the value of
the gold coins, it should happen that sill
yer should rise in the market above the
mint value, the silver coins-exchange
with foreign countries being unfavorable
would be withdrawn from circulation,
and the only remedy within the power of
the Government would be to reduce their
weight as it is now proposed in respect
TO the gold coins.
The committee of the House of Rep
resentatives having the matter under
investigation reported on Feb. %, 1881:
That there are inherent and incurable
defects in the system which regulates the
standard of value in both gold and silver;
its instability as measure of contracts
and mutability as the practical currency
of particular nation are serious imper-
fections, whilst the impossibility of main
tanning both metals in concurrent, sim
ultaneous, or promiscuous circulation ap-
pears to be clearly ascertained; that the
standard being fixed in one metal is the
nearest approach to invariableness, and
precludes the necessity OF further legisla-
tive interference.
The change in rates continued, how
ever, to be agitated, and was advocated
with great energy by Thomas II. Ben
ton. His argument is summed up as
follows in Benton's Thirty Years
View, vol. 1, page 443:
Mr.. Benton said this was not the time
to discuss the relative value Of gold and
silver, nor to urge the particular proper
ton which ought to be established be-
tween them That would be proper work
of a committee. At present it might be
sufficient and not irrelevant, to say that
this question was one of commerce, that
it was purely and simply mercantile
problem, as much so as is acquisition of
any ordinary merchandise from foreign
countries could be. Gold goes where it
finds it's value, and that value is what the
laws Of great nations give it. In Mex
leo and South America, the countries
which produce gold, and from which the
United States must derive their chief sup
ply, the value of gold is 16 to 1; in the
West Indies, generally, it is the same.
1t is not to be supposed that gold will
come from those countries to the. United
States if the importer is to lose one dollar
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