Year: 1878




By vetoing the silver bill President Hayes


has earned the respect of the country. Even
| the friends of the bill cannot but admit the


loftiness of his aim and the sincerity of his


purpose, while the opponents of the measure
will be profuse and hearty in their acknowl-


edgment of the stand taken by him against


those who sought to debase the currency. 1t
should be remembered that many of the
warmest supporters of his administration


were among the most radical advocates of
the reconciliation of the old silver dollar.
But he did not permit his friendships to lead
him astray. 1t is unfortunate that he could
not command the support of these friends at
this critical time.


All that the believers in currency based
upon gold can now do is to trust to the sober
second thought of the people. An intelli-
gent population like that of the United States


will soon see if it is pursuing the wrong way,
and is honest enough to retrace its steps if
that be right. Unfortunately the descent to
debased coinage is as easy as the descent to
that other thing which has commanded so
much attention and provoked so much dis
cussion of late; and the return is labor of
difficulty. If the silver bill brings about the
evil results which the advocates of the gold
standard apprehend we shall pay dearly for
our folly and have many hard struggle be-
fore we right the wrong. But the struggle
will surely be made. If on the other hand the
silver bill brings about that improvement of
our condition which its more sanguine advo-
Gates expect its opponents will not long hesi-
tate to confess their error. In either event the
consequences which are hoped for or feared
will come with laggard steps. 1t will be
many months before silver can enter into
the currency of the country in sufficient
quantities to appreciably affect values. All
that can be coined for at least year to come
will be taken up for the payment of duties,
will then go into the Treasury and as paid
out in discharge of the current expenses of
the government will slowly make its way into
general circulation. Very likely this duty
demand will for time materially appreciate
the value of the metal. Importers can af-
ford to pay ninety-seven, ninety-eight or
even ninety-nine cents gold for the silver
dollar and then make good profit. As long
as the coinage is limited there will be sharp
demand for il. But when in many months
great quantities Of silver have been coined,
when the stock Of gold in the Treasury has
been exhausted by the payment of interest
on bonds, and the interest begins to be paid
in the cheaper metal competition and sharp
demand will cease and silver will fall to its
normal value. Then the evils of remonetiza-
tion will show themselves. We shall not
only be taxed on all our trade the amount of
the difference between the two metals but we
shall be subjectto to the Inconvenience, uncer-
tainty and expense attending the use of
currency which is continually fluctuating in
value. This is the great objection from an
economic point of view to the use of silver.
Every man who sells on time will protect
himself against the possible fall in the value
of the metal between the time of giving credit
and the time of payment by adding
very considerably to the asking price, and to
this heavy tax all trade will be subject. Cap
ital. too, VIGOROUSLY timid, will hesitate to
enter upon so hazardous ventures. No man
will like to lend hundred silver dollars,
worth ninety-two cents each, when six
months thence he may be paid in silver dol
lars worth but eighty-six cents. There is
every reason to apprehend that this fluctua-
tion in the value of silver will take place,
for the metal has been dancing up and
down in the market for the last four years,
Between July, 1876 and December of the
same year the price of the metal ranged in
the London market from Al to 5S1 pence, a
fuctuation in value of nearly 25 per cent.
The hundred millions we have already used
in subsidiary coinage and the trade dollar
have not been able to send it to par, and
there are no indications that the supply
will soon be exhausted. Indeed it is on the
increase.


The immediate effects of the silver bill
will be the injury done to our credit and the
consequent stopping of refunding operations.
We have not hesitated to impair the obliga-
tion of contracts, and cannot hereafter hope
to be held honest. The process of funding
our six per cent. bonds at a lower rate of in
terest has come TO an end. Had that pro-
cess been continued we should have saved
twenty or thirty million dollars annually on
our interest account, sums which in forty
years woald amount to enough to discharge
the entire national debt. That is what our
silver dollar costs us to start with. The ulti-
mate cost is yet to be reckoned 1t is to be
sincerely hoped that the Senate amendments
will, as their advocates claim, keep us from
the evils of the original bill. But the silver
people advance no good reason for the hope
within them.