Hot Springs weekly star. (Hot Springs, S.D.) 1892-1917, 1900-07-27
GOLD AND SILVER.
THEIR LEGAL AND COMMERCIAL
RATIOS STUDIED.

Gold Goes Where It Finds It's Value
y That Value IL What the Laws
of Great Nationa Give Tive Must
Give It the Same Value.
It has been suggested that if the legal
ratio OF silver to gold should he so
changed as to approximate the COM
Mcrcial ratio, the objection to the free
and unlimited coinage of silver would
disappear. This is not true. 1t is Il
well-known historical fact that a very
small variation of the commercial
ratio from the coinagesratio is sufficient
to eNpel 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 IL to l, and
that was made the legal ratio. The
mintS We're opened to the coinage of
both metals on that basis. In II 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 We're slightly more valuable as
bullion than as money and We're melted
down or exported.
This situation was maintained until
the act of 1884 changed the ratio to 1G
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 Is to l and 1G to 1. Fiji
teen to 1 drove out gold, and Ii to ]
drove out silver. After the act of 1884
Went into effect silver dollars would
not circulate in the United States I'M
less they We're light weight. From 1885
down to the opening of the year 1862,
when paper became the currency of the
United States. although the mints We're
opened to the unrestricted coinage of
silver. the total number OF silver dol
lars coined was 50, zoo. ;513333.
In 1929, when the change in ratio
vas under consideration. Albert Gala
tin. who had been Secretary of the
Treasury under Jefferson. was asked
his opinion concerning the failure of
gold to circulate, and in a letter dated
Dec. 81 wrote:
The present rate was tho result of in
formation, clearly incorrect. respecting
the then relative value of gold and silver
III Europe. which WAS represented as be-
ing lit the rate of less than IL to I, when
/ it ,vrc ~, f.o% = = 10 = A. ~ .,..lI
he better nj all events to discontinue al
together the coming Of gold than to con-
tinue the present system.
The Hon. S. ID. lnglam, who was at
that time Secretary of the Treasury
under President Andrew jackson, was
asked his opinion. and advised the COM
mittee that amy attempt to- make the
metals circulate together under free
coinage would be fruitlcss. He wrote:
The fluctuations in the value of gold
and silver cannot he controlled; and even
the attempt to conform the mint to the
market values must produce Il change in
the latter. But ii. after adjusting the
ratio Mt the mint by raising the value of
the gol! coins. it should happen that sill
Yer should rise in the market above the
mint value. the silver c~oins-exchan.e
with foreign countries being unfavorable
would he withdrawn from circulation.
and the only remedy within the power of
the Government would he to reduce their
weight. as it is now proposed in respect
TO the gold coins.
The committee of the House of Rep
rcsentatives having the matter under
investigation reported on Feb. % 1872:
That there are inherent and incurahsc
defects in the system which regulates the
standard of value in both gold and silver;
Its instability as Il measure of contracts
and mitability as the practical currency
of Il particular nation are serious impsr-
fe%ctions. whilst the inapossibility of main
tanning both metals in concurrent. SIM
infamous. or promiscuous circulation ap-
pears to be clearly asc~crtaincd; that the
standard being fixed in one metal is the
nearest approach to invariablcncss, and
precludes the necessity OF further ~lcgisla-
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 AS:
Mr.. Benton said this was not the time
to discuss the relative value of gold and
silver, nor to urge the particular prolnr-
ton which ought to he 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 a mercantile
problem, as much so as is acquisition of
any ordinary merchandise from foreign
countries could be. Geld goes where it
finds its 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 1G to L; in the
West Indies. generally. it is the same.
1t is not to he supposed that gold will
come from those countries to the United
States if the importer is to lose one dollar
in every sixteen that he brings. or that
our own gold will remain with MS when