Vernon County censor. [volume] (Viroqua, Wis.) 1865-1955, 1900-07-25
GOLD AND SILVER.
THEik LEGAL AND COMMERCIAL
RATIOS STUDIED.
Gold Goes Where 1t Finds Its Value
and That Value Is What the Laws
OF Great Nations Give Tive Must
Give 1t the Same Value.

0ktG IL tIG EaAG atACs
1t has been suggested that If 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
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 /, and
that was made the legal ratio. The
minis were oTened TO the coinage of
both metals IN that basis. II a short
time 1t becIme apparent that either an
error had been made or the market
ratio had changed. The two metals
would no 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 III
to /, ana that act which was designed
TO correct it, actually reversed it, 1t
brought back gold. but drove out silver
The tn e commercial ratio was some
where between IL to / and 10 10 l. Eff
teen to l itoye out gold, and 16 10 /
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 1885
down to the opening of the year 1862,
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 $500. 533.
In 1929. when the change in ratio
was under consideration, Albert Gala
tin. who had been Secretary of the
Treasu under Jefferson, was asked
his opinion concerning the failure of
gold to circulate, and In letter dated
Dec. 81 wrote:
The pres mt rate was .he 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 II to i. when
it was in fact 155 to 1876 to l. 1t would
be better at all events to discontinue al
togo Ter the ccining Of gold than to con
tinue the present system.
The Hon S. H. Ingham, who was at
that time Secre tary Of the Treasury
under President Andrew Jackson, was
asked his opinion, and advised the com
mit'ee that any attempt 10 make the
metals circulate together under free
coinage would be frutless. He wrote:
The fluctuations in the value of gold
and silver can aot 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 al the mint by raising the value of
the gold coins, it should happen that sill
| yer should rise in the market above tha
| mint value, the silver coins-exchnnge
with foreign countries being unfavorable
would be withdrawn from circulation.
| and the only remedy within the power Of
| the Government would be to red ice their
weight as it is now proposed in respect
! 10 the gold CONS.
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 a measure of contracts
and mUtability as the p ctical currency
of particular nation are serious mper-
fections, whilst the impossibility Of main
tanning both metals i'll concurrent, sim
Infamous. r pr0miscuous circulation APP
pears to be clearly ascertained; that the
standard being fixed in one metal is the
nearest approach to in'Arrab lencss. and
precludcs the necessity of further legisa-
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. l. 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 hc-
tween them. That would be proper work
Of committee. At present it might be
sufficient, and not irrelevant to say that
this question was one of comme q. that
il was purely aud simply "A mercantile
problem. as much so as is acquisition Of
any ordinary merchandise from foreign
countries could be- Cold goes where II
finds its yalue. and that value is what the
! laws of great nations give il. In Mpx-
leo and S0uth America the countries
which produce gold. and from watch the
| United States must derive their Chief sun
ply, the value Of geld is IL to in the
| West indies, generally. it is the same.
1t is not To be supposed that gold will
! come from those countries 10 the United
States if the importer is to lose one dollar
/ in every sixteen that he brings, ar that
Our own gold will remain with as when
the exporter can give one dollar in every
fifteen that re carries out Such results
would be contrary 10 the rules OF trade
md therefore we must place the same
value upon gold that other nations do if
we wish 10 gain any part Eff their trade
or to retain any part Of our own
Bepton's statements that gold would
not come to this country if the importer
must lose one dollar in every sixteen.
or stay if an exporter could make one
dollar III sixteen. would have been
equally true if he said on one dollar in
tbirty-two. Indeed. the gain by export
ing silver after the act Of 1894 .raq
passed was not more than on dollar