Evening star., 1920-01-12
COMMITTEE HEARINGS
ON SILVER ACT BEGUN
Pittman Bill and Purpose Ex-
planned by Representative Nc
Fadden-Rise in White Metal,

Hearings were started today by the
House committee on banking and cur
rency on the bill introduced by Rep
resentative L. T. McFadden of Penn
sylvania to amend the Pittman silver
act of April %, 1918, and to reduce the
standard of subsidiary silver coins
from 80 to so per cent.
Mr.. McFadden, who is a member Of
the committee. explained the Pittman
act and the purpose Of his bill.
He said that act authorized the Sec
retary of the Treasury to melt or
break up 300,000,000 standard silver
dollars. sell the product Of bullion
and repurchase a like amount of Sill
yer bullion at 81 an ounce. MY BILL
declared Mr.. McFadden, amends the
Plttman act by requiring that all our
standard silver dollars shall be melted
and sold as bullion, and repeals the re-
purchase clause.
The phenomenal rise in the price
of silver from 4Sk cents an ounce in
1915 to s1.37k in 1919 has caused our
standard silver dollar, worth only 81
cents in 1915. to be worth $1.O6A in
gold in 1919, and the silver dollar, be-
ing worth more as bullion than as
coin, has driven itself out of crcula-
ton by the operation of the inexor-
able law announced by Sir Thomas
Gresham, the financial adviser of
Queen Elizabeth. Gresham announced
that money of less value drives out
money of more value This law ap-
plies to the 'bimetallic' or so-called
double standard of value as well as to
worn coins. AS our gold dollar. at the
coinage ratio Of / to 16 with silver,
is now less valuable than the stand
ard silver dollar, the cheaper gold
dollar has driven the more valuable
silver dollar out of circulation. So
here Is a twentieth century proof Of
the fallacy Of 'bimetalism.'
We had the very same experience
In 1852, following the discovery Of
gold in California, when all our sill
yer change money was melted up and
the public had to use postage stamps
for change. At that time our subsid-
iary silver coins-dimes. quarters and
halves-were the aliquot part of
the standard silver dollar. Congress
relieved that situation by enacting on
February 21, 1853. our present sub
sidiary silver coinage law, which re-
duced their weight by per cent and
government credit. When silver is
worth s1.29 an ounce it is profitable
to silversmiths and silver exporters
to melt full-weight standard silver
dollars, and when silver is worth
$1.3S an ounce it is profitable to them
to melt our full-weight subsidiary
silver coins, of which we have more
than two hundred million dollars out.
To prevent the Inconvenience expert
enced by US in 1852, when we lost all
our change money, had the bill pro-
vide that all future coinage of sub
sidary silver pieces should be on an
so instead Of 80 per cent basis. The
Holland government has already pro-
posed a bill to recoin their silver on
an so per cent basis, and Canada con-
templates similar action.
'1n the debate in the Senate on the
Pittman bill, it was shown that sill
yer, under ordinary labor conditions,
could be produced at profit of so
cents an ounce; yet the Pittman act
requires the government to repur-
chase a like amount of silver at 81
an ounce. It is my purpose to repeal
this vicious clause of the Pittman
act"