The times. [volume] (Richmond, Va.) 1890-1903, 1901-01-04
FRIDAY. JANUARY A, 1901.
GRESHAM'S LAW IN THE PHILIP
PINES

IF milton attempts TO use different
for-ns Of currency at the same time, that
which has less intrinsic value in the mar
aets OF the world will always remain at
home, while that which is more valuable
VIII be liable to export
That is what is genenlly known as
Gresha1n's law. and there have been so
many practical demonstrations OF it from
time to time in this country and others,
that it is now recognized by financicrs as
indeed a law of currency
In speech delivered in Chicago on April
To- 1896, Hon John G. Carlisle showed how
this law had been demonstrated III the
United States. He pointed out that, in
the early days OF the republic, Alexander
Hamilton and Thomas jefferson. although
differing widely upon almost every public
question, agreed that in determining what
should be the coinage or legal ratio be
tween gold and silver. the true relative
commercial value OF the two metals in The
markets of the world must first be ascer-
gained and that this relative value, when
Escertained. should be incorporated into
the statute as the basis Of the proposed
system OF coinage. They reached the con-
cuson that the trne commercial ratio at
that time was l. to THAT is, that fifteen
ounces of silver We're equal in value TO one
ounce of gold-and accordingly the act OF
17a2 which WIS our first coinage law, au-
1horized the coinage of two metals at that
ratio. AT the ratio thus established the
silver dollar contained Sal IA grains OF
fine silver, and the gold dollar Il ga grains
of fine gold; but it was soon discovered
that q. mistake had been made and that
:;s.1 IA grains of fine silver were not, in
fact. equal IN value 10 u "a grains of fine
gold. and The consequence was that, al
though Tho difference between The value
of a silver dollar and The value OF y gold
dollar was only about ono cent and one
eighth of a cent, silver drove gold out of
use and out OF The country our OWE coins
were exported and used at their bullion
value in making purchases and paying
debts abroad, and Mr.. Jefferson himself
issued an order on May !, 1896, stopping
she coinage OF silver dollars at our own
anints.
The reverse Of his took place many
Years thereafter. Gold having left the
country, Congress in 1854. during the ad-
minlstraiion OF Andrew jackson, deter
mined TO restore il 10 circulation, and in
order 10 accomplish that result the legal
ratio was changed from u 10 ! TO IL to I;
ihat is. the law wal So amended as to
should contain - grains OF pure gold.
which made the dollar consist of - 1-5
grains, bur by the act OF 1857 ii was
changed 10 800 grains, which now con
etitutes the dollar and unit of value
This was a slight generalization OF gold
~ the coinage, because - grains OF
Aned gold were not. in fact. worth as
much in the markets us Sal Ii grains of
line silver. The difference was very small,
hut it proved sufficient TO change the whole
character ot our metallic currency. and
under this ratio gold and silver exchanged
places; silver went Out of the country ana
gold came in, and from that time until
utter the passage of the act Of 1873 we had
practically god menomct4liism. except
during The Civil War. when NC had no
metallic money OF any kind.
Another interesting illustration Of this
law is now given in The Philippines. 1t
Was stated The other day i'll The press
dispatches tt,a; the Secretary of Wag has
communicated 10 Congress a caolegram
from The Philippine Commission indicat-
tiis grave crisis in The monetary affairs
Of the archipelago. The message was
communicated 10 Congress i'll connection
With q mass of memoranda bearing on
the problem which IS now To be solved as
TO the coinage Of some kind Of silver TO
take the place OF the Mexican dollar in
the Philippines. The dispatch adds:
The commission has ca5Icd that the
stock of silver IN the islands Is rapidly
diminishing, and they urgently requested
- answer 10 The message sent by them