New-York tribune., 1900-08-25
DANGER OF FREE COINAGE
AND WHY CONGRESS HAS REJECTED
THE SILVER MEMS DEMANDS.

of the efforts of Colonel Bryan and his man
ayers to shift the issue and ignore the plank
in their platform which demands free coinage
Of silver well gold, the voters are keenly
alive to the danger which threatens from that
source, and those who do not fully understand
the subject eagerly seeking light. For the
benefit of such these the following is re-
such changes as are necessary 10 bring the sta
tistics OF gold and silver production and circu-
lation down to date:
By free coinage" is meant the acceptance at
the mint OF all gold or silver offered for the
purpose. and the melting. assaying and stamp
ing Of it into money without expense to the
owner of the metal
BY ratio" is meant the relative value Of gold
and silver according to weight.
BY free coinage of both silver and gold at the
ratio Of l6 TO l. is meant the coinage, without
expense 10 the owner Of the metal OF all gold
ard silver brought to the mint, on the theory
that sixteen ounces Of silver are equivalent in
value 10 one ounce Of gold.
The Government of the United States, ac
cording to law, now coins free all gold bullion
brought to the mint and the advocates Of free
silver coinage demand that the same privilege
be extended to the owners of silver bullion.
The Governments refusal-through Congress
10 grant this demand rests the fact that the
two metals do not bear constant ratio Of value
toward each other. and that the ratio Of 16 TO l.
at which the free coinage of both is demanded,
does not at present represent the real ratio
which exists between the two. Pure gold in the
open markets of the world brings $50 61 an
ounce: pure silver in the same markets brings
less than 65 cents ounce. which is an actual
ratio Of nearly 81 TO THAT is. it actually takes
nearly thirty-two ounces Of silver TO equal in
value one ounce of gold. Experience has shown
that any attempt to coin the two metals at 16
TO l under these unequal conditions would re-
suit in monometallism on the basis Of the cheap
metal, which in this case is silver. There
fore, free coinage of silver by this country alone
would mean violent and sudden change Of the
currency from the present gold basis to a silver
basis
FIRST USE OF GOLD AND SILVER.
Gold and silver have been used for money
since the dawn Of civilization, because, being
metals much desired by all men for their beauty.
durability and usefulness as utensils and orna-
ments. they came to have recognized value
in the eyes Of all, and were readily accepted in
exchange for and as a measure OF the value of
products and property Of all kinds They pos
sess the additional advantage Of being small
in bulk in proportion TO their value, and are
readily passed from hand TO hand AT first
they passed by weight ascertained at each
transfer and then governments took upon them
selves, for the convenience and security Of the
people. the duty Of stamping the metals into
coin. thereby certifying to a certain weight and
a certain quality in each piece. That is all
that the Government does IN coming money to
this day.
But gold and silver have fuctuated greatly IN
relative value in the course OF time owing 10
variations IN the amount Of each produced and
available for use-in other words in accordance
with the law of supply and demand. Gold has
always been considered the more valuable. in
proportion to weight, and has held first place
In the esteem Of men. At time the accepted
ratio Of value was TO 1; that is, people ac-
cepted the metals interchangeably in the pro-
portion of six parts by weight of silver to one
Of gold, and coins were measured at that ratio.
BY the time of Henry I. in England, the begin
ming Of the twelfth century the ratio had
changed to TO !, and. by gradual stages. the
metals drifted further apart, until at the close
OF the last century, when our first coinage laws
We're enacted, the ratio had reached 10 to l.
Meanwhile, all civilized nations attempted TO
Use both metals concurrently as standards of
value, changing the coinage ratio from time to
time as experience taught them that the real
ratio OF value changed. We say attempted to
use both standards" because, as a matter of
fact history shows that no nation ever sue
ceeded in keeping both in circulation at once
for any great length of time. for as soon as the
commercial. real. ratio departed from the
legal or coinage. ratio one metal or the other
in accordance with the law of supply and de-
1nand, disappeared from circulation as money
for in the arts or for boarding, was ex-
ported 10 some country where the legal ratio
had been made to conform again to the COM
rnercial ratio
DISCOVERY OF GREsHAMs LAW.
At first the people did not understand these
movements, and attempted 10 stop them by leg
islation. by putting severe penalties on the ex-
porting of the coin or metal which showed a
tendency to disappear or the melting of the
coins for use in other directions. But such leg
islation always failed absolutely to produce the
desired effect and a closer study of the ques-
ton revealed where the real trouble lay. In the
latter part OF the fourteenth century Charles V
Of France commissioned one of his most trusted
councillors. Nicholas Oresme TO investigate the
subject. OTesme reported his conclusions in a
treatise on money, in which he laid down the
principles that no sovereign had the power TO
fix the value or the purchasing power Of coin;
that the legal ratio Of coin must conform strict
ly to the relative market value Of the metals;
that If the fixed legal ratio of coin differs from
the market value Of the metals. the coin which is
underrated entirely disappears from circulation
and that. If degraded or debased coin is allowed
TO circulate along with good and full weighted
coin, all the good coin disappears from circu-
lation. and the base coin alone remains current
10 the ruin Of commerce. Working on a similar
commission from the King Of Poland one hun
dred and sixty years later the great Copernicus.
without knowing Of the existence of Oresme's
treatise, arrived at identically the same con-
cIusions. Still later Sir Thomas Gresham, Mas
ter Of the British Mint and chief financial ad-
visor Of Queen Elizabeth, worked out the prin-
cipes once more, and explained them to his
sovereign The great fundamental law Of coin
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