i^etD gorfe fi>tate Collegf of Agriculture 3t Cornell Wlnibtviitf Stiiaca, i9. S. Hibrarp Cornell University Library HG 529.V15 Money; natural law of money, Internationa 3 1924 013 817 014 DATE DUE yMiamM^ SAYLORD PRI^fTED IN U.S.A. Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013817014 MONEY. NATURAL LAW OF MON^Y. INTERNATrONAL BIMETALLISM "FREE SILVER." CURRENCY. THE SILVER QUESTION AND HARD TIMES. JOHN J. VALeNTINE. The coins which, bein^ melted down, retain the entire valutii for which they Were leg^l tender before being rnel)be^ per cent in 1895. Money in the United States. 1873 Money per capita, $18. 58 — chiefly irredeemable paper. 1891 Money per capita, 34. 31 1 896 Money per capita, 3 1 . 20 38 i873- -Circulation per capita, $18.04 — chiefly irredeemable paper. 1 89 1.. Circulation per capita, 23.41 1896. .Circulation per capita, 22 . 47 Wealth, United States. i860 $16,000,000,000 1870 28,000,000,000 1880 45,000,000,000 1890 65,000,000,00a In 1890 the richest country in the world. This extraordinary increase may be discounted some- what because of the crude method of earlier censuses. Wealth of Great Britain, France, Spain, United States of America, Australia, Tasmania and New Zealand and Canada combined, estimated : 1870 $100,000,000,000 1890 200,000,000,000 Gold, World. Silver, World. 1853 $155,000,000 (Commercial Val...) 1870 107,000,000 1870 $ 51,575,000 1874 91,000,000 1880 85,636,000 1890 120,000,000 *i890 172,235,000 1894 180,000,000 1894 105,757,300 1895 200,000,000 1895 110,000,000 Present annual output of gold alone is more than annual output of gold and silver together thirty years ago. Estimate of world's stock of coin (U. S. Mint Report, 1894) : i860 $3,900,000,000 1894 8,021,000,000 1896 8,300,000,000 One of Professor Andrews' wails is that " Nations in the gold group can no longer trade freely with those in the silver group." The movement of merchandise and silver in connection with India has been as follows : *The price of silver was speculatively inflated in 1890, owing to pending legislation by the United States of America, the result of which was a dismal failure. 39 Shipments of Bullion and Specie from European Money Centers to Statement of Yearly Tonnage Eastern Countries. (Including Passing Through the Suez CanUl Sundry and Alexandria, to 1886.): from its Opening up to i8g4 : 18,168,303 1862 21,455,884 1863 24,318,189 1864 13,933.183 1865 10,032,626 1866 3.659,154 1867 10,189,904 i868 9,053,186 1869 110,810,389 4,507,388 1870 436,699 8,687,431 1871 761,467 10,988,705 1872 1,160,743 7,807,605 1873 1.367.767 11,448,512 1874 1.631,650 6,303.700 187s 2,009,984 15,147,012 1876 2,096,771 20,588,599 1877 2,355,447 85,478.952 11,820,438 8,403,350 1878 2,269,678 13,391,086 1879 2,263,332 10,983,339 -1880 3,057,421 7,985,996 •••• 1881 4,136.779 13.829,591 1882 5.074,808 10,100,591 1883 5.775,861 14,040,596 1884 5,871,500 13,365,500 1885 6,335,752 92,100,049 34,885,131 7,572,596 1886 5,767,655 8,541,505 1887 5,903,024 7,118,243 1888 6,640,834 11,380,823 1889 6,783,187 11,507,122 1890 6,890,094 8,809,828 1891 8,698,777 12,317,887 1892 7.712,028 14,667,799 1893 7,659,068 81,915,803 56,054,667 10,357,302 1894 8,039,17s Yearly tonnage passing through the Suez Canal was : In 1870 ■' 436,609 tons In 1894 8,039,175 " 40 Tlie foreign trade of India has more than doubled since 1872, and even the Lancashire manufacturers, who complain so bitterly, have more than doubled their exports of cotton goods to India. The quantity of cotton cloth exported to India in the year 1873 was 990 millions of yards ; while in 1894 the total had risen to the enormous amount of 2,279 millions of yards. The Secretary of the Lancashire Cotton Spin- ners' and Manufacturers' Association finds, on investi- gation of the facts, that while silver countries have, since 1873, increased their consumption of English cotton cloth by 100 per cent, gold countries have only increased it by 17 per cent, and India has, notwith- standing the increase in Indian mills, increased its consumption of English cotton manufactures by 130 per cent. In regard to the increase of wages on a gold basis. Prof. Andrews uses the following language : " The average value of labor, including unskilled, has not, in my belief, advanced so much as gold, even if it has risen at all." Rogers' " Economic Interpretation of History ;" McKenzie's " History of the Nineteenth Century;" Walter Besant's " Fifty Years Ago;" the report of Robert Giffen to the British Parliament on the progress of the working classes ; one by Alfred Neymark to the Statistical Society of Paris ; Guyot's " Economic Science ;" D'Avenal's " History Econo- mique," as shown in Schoenhof 's " History of Money and Prices ;" McMasters' " History of the American People ; " C. C. Jackson's " Has Gold Appreciated ; " the United States Senate Committee Report, commonly 41 called tlie " Aldrich Report on Prices, Wages and Transportation," the latter work a monument of in- dustry, patience and intelligence, and other literature on the subject too numerous to mention, all show that wages have increased in fifty years under the gold standard approximately over 60 per cent, and during this century 100 per cent. After examining the Aldrich Report, Prof. Taussig said : "All in all, the figures show that the purchasing power of money wages has been rising steadily for at least twenty years, and that the decline in prices since 1873, and especially since 1883, has been a source of prosperity, and not of depression, to the community at large." As to what has been the result to wage-earners under the gold standard in this country, I submit the following conclusions from the same Report : Prices and wages were examined from 1840 to 1892. The evidence demonstrated beyond all controversy two facts : (i) that wages, measured by the best dollar, had been increasing all the time ; (2) that prices, measured by the same standard, were falling during the whole fifty-two years. This is a happy condition for the wage-earner. He is doubly benefited by the standard of the gold dollar. He is benefited by the constant increase of his daily wage, and again by the constant decline in the prices of the things which he must buy. From 1840 to 1892 the rate of wages in- creased in the United States over 60 per cent, while the prices of things he had to buy were constantly de- clining. The investigation covered the prices of 223 articles, which showed an average reduction of 25 per 43 cent. Many of the articles, which were every-day necessaries of life, declined much more than that. Fuel fell 75 per cent, metal 39, drugs and medicines 39, and house-furnishing goods 40 per cent. This is to-day the wage-workers' situation on a gold standard. Let us compare it with the paper-standard era, when the country had the highest prices it has ever known. In 1866 the unlimited issue of paper money had banished gold from our circulation, and the paper dollar was the standard. Wages in paper money had risen 52 per cent above the gold rate of i860. At the same time we find that beef had risen 108 per cent above the gold rate, hams 198 per cent, New Orleans molasses 135 per cent, rice 183 per cent, salt 102 per cent, refined sugar 85 per cent, calico 131 per cent, ingrain carpets 141 per cent, denims 374 per cent, drillings 265 per cent, sheeting 291 per cent, shirting 222 per cent, coal 201 per cent, nails 132 per cent, pine shingles 121 per cent, window 'glass 10 x 14, 126 per cent, and quinine 131 per cent. Here we see that a depreciated standard of value robbed wage-earners of more than half their earnings. Of all the contrivances for cheating the laboring classes of mankind, none is more effectual than a currency that is not convertible into metallic money of intrinsic equivalency. I appreciate that estimating total relative prices with- out regard to relative importance or consumption of commodities is misleading, and in an analysis of such data, grouped according to relative importance of com- modities, it showed that the fall in prices was 6 per cent less than otherwise shown. That is to say, taking 100 4.1 as a standard of average from the years of 1865 to 1869, the fall from 1870 to 1885 was 24 per cent, as against 30 per cent where the relative importance of com- modities was not considered. Bleven leading products •of farms in the United States fell 26 per cent. Prices. 1873. 1891. Per cent. Print cloth, per yard % .066 $ .029 56 ■Quinine, per ounce 2.65 .30 89 •Goblets, per dozen 85 .25 70 10 X 14 glass 3.40 1.70 50 Undershirts 1.41 .62 56 •Ginghams, per yard 13 .06 54 •Carpets, two-ply ingrain, per yard. . 1. 14 .50 56 Black pepper, per pound 19 .09 53 Molasses, per gallon 69 .32 53 "Freight rate, per ton 2.00 .92 54 Refined sugar, per pound 116 .057 50 ■Cut nails, per pound 049 .oi6 62 Pig iron, per ton 42-75 i7-5o 60 Cotton, per pound 188 . 10 53 •Corn, per bushel 61 .57 6 "Wheat, per bushel 1.31 .93 30 ■Bacon and hams, per pound .0S8 .076 14 Xard, per pound 092 .069 25 1 Average Pork, per pound 078 .059 24 \ fall of 26 :Beef, per pound 077 .056 27 | percent. "Butter, per pound 211 .145 32 Cheese, per pound 131 .09 31 Tobacco, per pound 107 .087 19 Eggs, per. dozen 26 .17 35 Leather, per pound 253 .16 36 Starch, per pound 053 .032 40 Illuminating oils, per gallon 235 . 07 70 ^Steel rails, per ton 120.50 29.92 75 Rio coffee, per pound 18 .16 11 Tea,perpound 95 -25 73 Sheeting, per yard 133 .068 48 Drilling, per yard 141 .064 55 Shirting, per yard 194 .106 45 Standard prints 113 -^ 47 Average reduction in eleven chief farm products, 26 per cent. Average Teduction in twenty-three other products, 55 per cent. ■44 According to Dr. Krai's tables for Hamburg, witbout going into details, tbe average of prices of all vege- tables and animal food was considerably higher in 1884 than it was in 1844, — forty years previously. Relative wages and prices in gold in tbe United States of all occupations, taking wages of i860 as 100 : Prices. Wages. Prices. Wages. 1840 116. 8 87.7 1871 122.9 147-8 1850 102.3 92.7 1880 106.9 141-5 i860 100 100 1890 92 - 3 158. 9 1870 117-3 133-7 1891 92.2 160.7 Tbe latest data obtainable shows that the annual average money wages of manual laborers in Great Britain increased from ;^43 8s. in 1876 to ^^T) i6s. in 1892, or over 23 per cent in fifteen years, though this may have been partly due to restrictions on child labor; but the increase from 1845 to 1895 has been relatively as great as in the United States. According to investigations of Yves Guyot, also J. B. Say, separately, the increase of wages in France from 1805 to 1883 was, in a superficial average upon ten callings, such as day laborers, cellar diggers, stone- cutters, brickmasons, carpenters, blacksmiths, etc., 120 per cent ; and the greatest advance in one of the five divisions of time into which this period was classified was in that from 1875 to 1883, the wages of carpenters and laborers having increased over 33 per cent and those of cabinet makers 50 per cent within that brief period, at the very time when, according to bimetallists' theories, wages ought to have fallen. If a day's labor be a reasonable unit of value, as some economists, even Adam Smith, have contended, it is 45 certain that, judged by that standard, gold has not risen. I assert that the facts submitted utterly disprove Professor Andrews' contention of " anaemia, asphyxia and paralysis." This country is not so much in need of more money as it is of more common sense and less hysteria. To answer upon a historic basis the theories of the international bimetallists, it is enough to say that no form of bimetallism by which the two metals were coined without' limit and were legal tender has ever succeeded. This is the unvarying verdict of history. For six hundred years, that is to say, since Florence began the minting of gold florins in 1252, which quickly extended to France, Flanders, Germany, and, later, to England, there have been a succession of reratings throughout the entire world in the endeavor to keep the two metals together, and fluctuations of less than one per cent in the diflference between the com- mercial value and the coinage value of each have always been suflEcient to exclude the more valuable from circulation ; and, under present facilities of com- munication and exchange, one-fourth of one per cent would be sufficient to produce the same effect. In the Overland Monthly for the present month of February, in an article on " Hard Times," Irving M. Scott says : " Europe, from early times down to a late date, employed both gold and silver as the ' standard of value.' This country, in its colonial and confederate 46 conditions, did the same. The United States, from the foundation of the Government (constitutional) down to 1873, employed both gold and silver, in accord with an Act of Congress making the standard unit of value ' One Dollar,' of a certain fineness. Thus, from 1687 to 1873, embracing a period of 186 years, our country employed both the silver dollar and the gold dollar — equal one to the other — as the standard unit of value and as redemption money. Thus it is seen that from time immemorial gold and silver worked together har- ■moniously. A greater production of one or the other did not affect the parity established between them?'' The closing assertion by a business man of Mr. Scott's standing is astonishing, for the facts are exactly the opposite. Among the ancient Phoenicians silver and gold circulated i to i, — weight for weight. In India, at the time of Alexander's invasion, silver to gold was as 2 to I, but in consequence of the rapid extension of com- merce the ratio soon reached 6 to i. In Athens, at the zenith of her power, the ratio at one time reached 13 to I. At a little earlier period the ratio with the Romans was 10 to I. They allowed the ^olians to pay their annual tribute in either silver or gold at this ratio. Between the fifth and thirteenth centuries, the great national formative period, gold was hoarded, and, though Byzantine, Arabian, Egyptian and Spanish-Moorish gold coins were to be found in circulation occasionally, there was no gold coinage by Western Europe until the close of the twelfth or the beginning of the thirteenth century, the impetus having been given by the Crusaders. There never was agreement in the thirteenth, fourteenth or fifteenth centuries, and the 47 sudden yield of money metals by the New World utterly upset the mintage ratios of all Europe during the sixteenth and seventeenth centuries. There never was anything like an equal and generally recognized ratio of value between gold and silver prevailing at any single point of time. At one and the same date a ratio of 7 or 8 to i prevailed in the Moorish parts of Spain, and 12 to i in the Christian parts (the kingdom of Castile). Similarly, at a later period, in 1474, the ratio in England was 11. 15; in Germany 11.12 ; in France ii.oo"; in Italy 10.58; and in Spain 9.20. Vasco de Gama found the ratio prevailing in South America with the Indians 8 to i. Changes of ratio in Europe under the influence of New World metallic product are indicated by the following figures : 1545-60 11.30 to I 1621-40 14.00 to I 1561-80 11.50 to I 1641-60 14-50 to I 1581-1600 11.80 to I 1661 15.00 to I 1601-20 12.25 to I Or from 1545 to 1660, a period of 115 years, the ratios of the two metals varied 33 per cent. And it is reasonably certain that all important monetary trans- actions in England prior to the Elizabethan reforma- tion of the coinage, under Gresham, were settled by weight and not by tale. Lord Liverpool, writing in 1805, says : " The price of silver in dollars has varied in twenty- three years, — that is, from the end of the year 1774 to the 31st of December, 1797, — 12 per cent (in round figures), and even in the course of one year, that of 1797, no less than g% per cent. The variation in the price of silver bullion appears to have been still 48 greater, by another account, with which I have been favored, by the later Mr. Garbett, an eminent merchant and manufacturer at Birmingham; it there appears, that silver purchased by him, as a refiner, varied, accord-- ing to his calculation, in the course of ten years, td 1793, more than igj^ per cent, and in one year alone more than 13^^ per cent." In the 500 years, from the fourteenth to the eighteenth centuries inclusive, there were over 400 changes or reratings throughout Continental Europe ; and even a cursory knowledge of the history of coinage of the last 500 years in the world will show that not alone has bimetallism, with free coinage, failed in Europe, but it failed also in India ; that two distinct attempts were made there, both of which resulted disas- trously. The difl&cult character of the question, as well as the nature of money dealings in the past, is well illustrated in a few words taken from Mr. D'Avenal, the French author of " Economic History," as interpreted by Mr. Schoenhof Writing of former times, he says : "An endless number of disks of gold, silver and billon were coined by all sorts of people in all kinds of countries, and these people had to value in livres, sous and deniers, at their true valuation, 6y weight and fineness. The barons and prelates who coined money regularly in the thirteenth century numbered eighty. There were consequently eighty coining standards, but in reality there were a good many more. Besides this, there were quite a number of pieces circulating of much more ancient date." This author also pertinently remarks that " the cur- rent value of money does not obey the ordinances of kings," that is, legal enactment, government fiat. 49 Apart altogether from the arbitrary debasement of the coin, apart even from the changes of the ratio enacted with the mere crafty design of inducing a flow of gold, the monetary systems of the times were so rough, so unscientific, the tariffing of the coins of different na- tions against each other so inexact, of so hasty average, that it was simply impossible to provide general tables of equivalents of coins. The mint conventions of con- tiguous States in Europe in the sixteenth century were so frequent that their history has been characterized as a jungle of intricacies. A modern writer has said that to pick out and enumerate all the changes of ratings in Europe in a period of 600 years — the thirteenth to the eighteenth centuries inclusive — would be like countihg the stars in the Milky Way. And in France, the cri- terion of the silverites, there were 150 changes in less than that number of years in the fifteenth and sixteenth centuries. During the French Revolution the ratings of gold and silver were changed over sixty times, with no effect whatever save to cheat the people. In that country, frorb 1820 to 1850, silver expelled gold, achiev- ing a proportion as currency of 91 to 9, while gold only was in effective circulation from 1850 to 1873. Said the Chevalier Baisse, in his "Problem of Gold," written in 18519 : " A change of i^ per cent in favor of gold sufficed, thirty or forty years ago, to cause that metal to dis- appear wholly from commercial payments. Under the regime of the law of the 7th Germinal, year XI (1803), gold had ceased to figure in transactions of any magni- tude since it had acquired an appreciable premium. People took their gold to the money changer in order 50 to pocket the premium, and made payments exclu- sively in silver, as every investigator knows." Gold and silver never liave at any time or place cir- culated freely, concurrently and indiscriminately as legal-tender coins at fixed ratios under unrestricted coinage. It was the unbroken experience of centuries when Locke took up the question in England, as it has been the experience ever since, that side by side with the legal ratio there is immediately a market ratio, and there is no discernible tendency for the former to govern the latter. The laws that finally govern finance are not made in conventions or congresses. The foun- dation of the bimetallic idea is thus erroneous from the beginning, and there is no discoverer or great econo- mist to set against the chain of authorities by which the opposite system has been established. Locke gave, as sufficient reason why silver was then the best money of account, that the world had so decided, — that the world of commerce had so decided, — and that it is enough that the world had agreed on it and made it their common money. And this is sufficient reason to-day wliy gold is the standard money, — money of ultimate redemption with Western nations, — because all the progressive nations of the world have made it so, and that out of regard to its superior efficiency. I would not have my hearers assume that scientists or economists, because they are ancient, are neces- sarily to be deemed infallible. About the last of the sixteenth century, Davanzate said : " All commodities 51 which serve to satisfy the wants of man are by con- vention equal in value to all the gold, silver and cop- per." It would seem incredible that such an idea could have been entertained, yet it must have been, for Montesquieu appears to have adopted it, because Chevalier took the trouble to refute it as coming from him by simply pointing out that the money quantities of France were estimated at 3^ milliards of francs in value, while the value of real propert}' alone amounted to 83 milliards of francs. We have spoken of the Oresme, Copernicus, Gres- ham Law, which was expounded by Locke, Newton and other eminent men of the times to the government of Great Britain, but a knowledge of its workings did not reveal to them a remedy for continually recurring evils of coinage, viz, the variations, the parting of the metals, the breakdown of parity of coin in circulation, etc., which was universal. The remedy was not per- ceived even by the great expounders of the Gresham Law. A solution was found by Sir William Petty, who died in 1687, in a treatise of his discovered in 1 69 1, viz, to make one metal the standard money, and the other subsidiary to it; that so much subsidiary coin as could be kept in free circulation, redeemable in or exchangeable with the standard metal coin, was not only the best but the only method practicable for using both. That there could, of course, be no such thing as a double standard, and the greatest stability of money was to be attained by using one metal as standard. This theory was elaborated at a later date by Adam Smith. 52 The best brief exposition extant of money on this basis — the Gresham-Petty laws — is by Lord Liverpool, at the beginning of this century, — say about 1805, — as follows: " The standard coin of a country is the measure by which the value of all things bought and sold is regu- lated and ascertained, and it is itself, at the same time, the value or equivalent for which goods are exchanged, and in which contracts are generally made payable. In this last respect the standard coin, as a measure, differs from all others, and to the combination of the two qualities before defined, which constitute the essence of this standard coin, the principal difl&culties that attend it in speculation and practice, both as a measure and an equivalent, are to be ascribed. These two qual- ities can never be brought perfectly to unite and agree ; for if the standard coin were a measure alone, and made, like all other measures, of a material of little or no value, it would not answer the purpose of an equivalent. And if it is made, in order to answer the purpose of an equivalent, of a material of value, subject to frequent variations, according to the price at which such material sells at the market, it fails on that account in the qual- ity of a standard or measure, and will not continue to be perfectly uniform and at all times the same. Civil- ized nations have generally adopted gold and silver as the material of their standard coin, because these metals are costly and difl&cult to procure, little subject to varia- tion in value, durable, divisible, and easily stamped or marked." Lord Liverpool was not insensible to the possibility of a change in the value of a money metal in respect of itself, and that the standard metal might so vary ; but he held this diflEculty to be so essentially inherent as not to be susceptible of remedy. 53 Following tlie teachings of Grestam, Locke, Newton and Petty, Great Britain, after the most careful consid- eration, and after centuries of monetary welter, decided in 1816 to legally adopt the gold standard, though, as already stated, because of its efl&ciency, gold had really been, through the custom and usage of merchants as well as by proclamation, the money of commerce for one hundred years previously. The master of the mint declared in 18 16 that the law merely established and leg9.1ized the system which had been adopted by public opinion since 1717. So, also, the Acts of the United States Congress of 1853 and 1873 merely carried into full legal effect the Acts of 1834-37, a fact of nearly forty years. As already stated, there is not a trace in the writings of American statesmen of the peculiar monetary theory on which bimetallism is now based. The conclusion that commodity values absolutely rule coinage values — purchasing power — was concurred in and accepted by the statesmen of our own country, — Morris, Gallatin, Hamilton, Madison, Jay, Jefferson, and other founders of our American Republic, and, later on, Webster, Clay, Jackson, Benton, Tilden, Cleveland, and others. Jefferson said, among other and similar utterances on the subject : " Just principles lead us to disregard legal proportions altogether, to inquire into the market price of gold in the several countries with which we shall be principally connected in commerce, and to take an average from them." This conclusion was followed in 1834 by the United States, as indicated by the following, taken from the Report of Currency Committee to Congress, June 30, 1832 : 54 " The Committee think that the desideratum in the monetary system is the standard of uniform value. They cannot ascertain that both metals have ever circu- lated simultaneously, concurrently and indiscriminately in any country where there are banks or money dealers ; and they entertain the conviction that the nearest approach to an invariable standard is its estab- lishment in one metal, which metal shall compose ex- ■clusively the currency for large payments," — that is to :say, standard money, — money of commerce, money of ultimate redemption. This conclusion is impregnable. The only rational bimetallism possible is the circula- tion of so much silver as may be kept freely inter- changeable with gold and as may be necessary for the minor transactions of trade. All silver hoarded by •Government in excess of this means the withdrawal of just so much capital from active operations in the hands of the people, — for illustration, the present mone- tary status in the United States, which is a perverted •example of the bimetallism of Sir William Petty. To assure the use of gold and silver at the same time on a par, gold must be the standard, and the coinage of silver so limited that the Government can maintain their ■exchangeability. And under such a policy any excess -of silver beyond the actual uses of it by the people is, as stated above, just so much capital withdrawn from .active operations, because the excess is useless for pur- poses of redemption and is a menace to the redemption money. If the coinage cannot be circulated, then it is waste to lock it up and circulate the paper instead .entailing all the disadvantages of paper without the 55 advantage of its economy. The excess of silver over what can be practically used in active circulation is not more defensible than the Populists' farm-product Sub- Treasury schemes. The important point here is, that with all the complexity and confusion originating in notions of making money abundant (which will be referred to later on under the head of "Currency"), our Government has arrived at nothing and has effected nothing which might not have been effected better by a thoroughly monometallic system, with gold for the standard. " While it is admitted that no single nation can, by a legal-tender law, make a money buy more in the market than it is worth as property, it is asserted that an agree- ment among the nations having commercial relations to make depreciated silver full legal tender at an univer- sally uniform ratio would put it on a par with gold in the markets of the world. Then would fifty cents' worth of silver, coined in a dollar piece, buy an hundred cents' worth of gold or of any other property. Such an agree- ment and its accompanying legislation would be abso- lutely barren and powerless to effect the proposed result, because trade alone fixes values, and nations as nations do not trade with each other. Governments are not traders. They are not in commerce. They neither buy nor sell. Their individual citizens trade with each other according to the unchanging element of human interest. The government of each furnishes protection and facilities for trade to its merchants, its selling pro- ducers and its buying consumers. But governments themselves are not merchants. They do not own the exchangeable properties of their citizens. They do not bargain them away. They have nothing to do with their price. They have nothing to do with what is 56 taken in excliange for them, nor with the rate at which one is exchanged for the other. They keep the peace, protect property, administer justice, make it safe and convenient for their merchants and their customers to deal with each other within their several jurisdictions, enforce for them their lawful contracts, and there they stop. They are no part of the world of trade. They can, each within its own territory, rob creditors by legal- tender acts which are false to the facts and ethics of trade, and so drive away capital ; but they can no more change the exchangeable value or commercial function of the money of trade than they can change the exchangeable ratios of cotton, hay, iron, cows, steam- ships, or any other form of property in which men deal with each other according to their needs and their mutual agreement upon values. If they could, all they would have to do to secure eternal commercial tran- quillity would be to enact all forms of property to be money, all unlimited legal tender, fix their ratios to each other once for all, and then let the world run." It is as impossible for the whole worid, by inter- national agreement, to maintain coins of two or more metals in circulation, in unlimited quantities, at a fixed legal ratio, differing from the relative natural or market value of the metals of which they are composed, as it is for separate and independent nationalities to do it, and the latter never has been done. Let us now consider the status of the international bimetallic movement after twenty years of agitation. At the Brussels Convention of 1892 the delegates of the United States were, under date of November 22, 1892, thus instructed by Secretary of State John W. Foster : 57 - You should not lose sight of the fact that no arrange- ment will be acceptable to the people or satisfactory to the Government of the Xjnited States which would, by any possibility, place this country on a silver basis while European countries m,aintain the single gold standard.'''' The BritisTi delegates asserted from the outset that they would not adopt bimetallism on the basis of free coinage ; Germany and Austro-Hungary let it be known that they would not, — at least not without the con- currence of Great Britain ; France explicitly declared this to be her attitude ; and Weber for Belgium, Forssell for Scandinavia, and Rafifalovich and De Thoener for Russia, declared that, in the years that had elapsed since former conventions, — 1878, 1881, — they had seen no reasons for changing their convictions against it, citing examples to show how utterly impossible it is, in monetary matters, to resist natural forces by statutory laws or agreements. Forssell of Sweden voiced similar sentiments with a force and originality of reasoning, a wealth of learning and illustration, and a caustic wit, not exceeded by any member of the convention. Said Forssell : " The question is. What should be the size of a hogshead to contain a certain quantity of liquid when there is no possibility of stopping the bunghole?" And, further, " If the conference of Brussels contributes to establish and fortify the conviction that an interna- tional agreement for the free and unlimited coinage of silver is not only rejected for the moment, but is inadmissible for the future, it will have reached a very important result." So the Brussels Convention closed with the following glittering generality in the way of a resolution, — a 58 diplomatic courtesy of Baron de Renzis, the Italian delegate, who represented the Ivatin Union, in the ab- sence of Mr. Tirard, French delegate : " The International Monetary Conference, recognize ing the great value of the arguments which have been developed in the reports presented and in the discus- sions at the meetings, and reserving its final judgment upon the subjects proposed for its examination, ex- presses its gratitude to the Government of the United States for having furnished an opportunity for a fresh study of the present condition of silver. " The conference suspends its labors and decides, should the governments approve, to meet again the 30th of May, 1893. It expresses the hope that during the interval the careful study of the documents submitted to the conference will have permitted the discovery of an equitable basis for an agreement which shall not infringe in any way the fundamental principles of the monetary policy of the different countries." But the real status had been previously expressed by Mr. Tirard in the Convention, and, as France is constantly cited by the silver agitators, I ask my hearers' indulgence for quoting at some length Mr. Tirard, then Minister of Finance of the French Re- public and Governor of the Bank of France. Said Mr. Tirard : " Gentlemen, I believe that if a conclusion could not be reached which would be accepted by everybody, or at least by a majority sufl&cient to establish the base of an international system, it is because the adoption would result necessarily, for several large States, in a radical change of their monetary legislation. " That is, in truth, a difficult undertaking. Peoples already far advanced in civilization have habits, customs 59 and laws which are adapted to their traditions, They are not applied in an arbitrary fashion ; they are bound up with the very conditions of the existence of these peoples. " Despite all the demonstrations and the speeches^ all the publications^ and all the newspaper articles^ do we see the Powers named^ and, too, others, change their opinion ? NoT THE LEAST IN THE WORLD. " Since the first day, we have heard upon this point declarations which were perfectly frank and sincere, declarations for which I, on my part, am grateful to their authors, because it is well to know upon what we may rely. We have heard the Minister of Germany, and the Minister of Austro-Hungary, and then Sir Rivers Wilson, declare that neither Germany nor Austro-Hungary nor England had any intention .of modifying their monetary systems, with which they declared themselves fully satisfied. Under these con- ditions we evidently cannot re-establish free coinage, and I have not the vanity to believe that I should suc- ceed in persuading the governments of these great countries, and their eminent representatives, that they are mistaken, that they have taken the wrong road, and that they are in error in remaining attached to gold monometallism. I consider, therefore, until some change takes place, that the question of free coinage is decided so far as we are concerned." Said Mr. Currie, for Great Britain : " After the repeated, declarations of the delegates of France, Germany and Great Britain, we should only delude ourselves if we did not admit that the question is closed." After the Brussels Convention, the German Agricul- turists, deluded into the belief that bimetallism might raise the price of grain, induced the Government to 6o appoint a Commission on the subject, and the Commis- sion has reported that it is not possible to raise the price of silver by international agreement. After twenty-one sessions the President closed the proceed- ings with the single remark that these protracted debates might be useful as showing how difficult it was to find something which would evidently be desirable if it were attainable. On the present status of the movement let me put in evidence M. Paul Leroy Beaulieu, in The Forum for December, 1895: " To-day a fixed ratio between gold and silver, and equality in monetary function between the two metals, is an arrangement long since vanished. It seems an antiquated institution, abandoned for a quarter of a cen- tury. Any restoration becomes more difi&cult with the passage of time. Such is the fate of silver, — a de- throned monarch. In 1876, in 1880, in 1885, even in 1890, though far less at the later dates, there were people disposed to maintain it in its former functions, or to restore those functions when they had been only recently lost. But to-day an entire new generation of adults has arisen who never knew silver in complete possession of the functions of money. "There is not a single Buropean country, in a normal financial condition, that attaches the slightest impor- tance to bimetallism. From time to time some Minis- ter utters in Parliament a few equivocal words on the subject, seeking to avoid stripping the bimetallists absolutely of all hope. But America must not be duped by these ambiguous expressions. At bottom not a country, not a government of Europe, has the least wish to make the least change in the established mone- tary system, that is, in the pre-eminence of gold, and the secondary and circumscribed function of silver." 6i As there were proposals as early as the beginning of the seventeenth century, or really the closing of the sixteenth century, that is, three hundred years ago, for an international common ratio, we can see from the present status what progress the theory or proposition for international bimetallism has made. Says Mr. Giffen : " After so much bimetallic clamor as we have suffered for twenty years, sober men may be interested to see how overwhelming are the facts and the economic opinion against the bimetallist, and how little claim bimetallism has to be a competing monetary theory with gold monometallism." Says Prof W. A. Shaw : " The verdict of history on the great problem of the nineteenth century — bimetallism — is clear and crush- ing and final, and against the evidence of history no gainsaying of theory ought for a moment to stand." To conclude this part of my subject I will repeat: 1st. The quantitative theory — the international bimetallists' theory — lacks foundation in any known principle of economic law, and is a fallacy. 2d. That the economic phenomena of the past fifty years indicate that prices of commodities move in obedi- ence to natural and inherent causes, independent of circulating money quantities. 3d. By natural law, there is but one way to provide for bimetallism in any country, and that is to make the more precious metal the standard, and then float such an amount of the cheaper metal as can be kept upon an undoubted equality through free interchangeability. "FREE SILVER." ACCORDING to the press dispatches of February 8th, Representative Hall of Missouri charged on the floor of Congress that Senators who voted for free coinage had, according to " credible information," privately said they believed free coinage would bring upon this country national and individual bankruptcy and ruin. He declared that the greatest sin of the present age was the cowardice of statesmen. We have shown under the head of " International Bimetallism " that it has been rejected by every West- ern power of any importance, and it should be borne in mind that it is not claimed by any prominent advocates of that theory, for example, I/avelleye of Belgium, Cernuschi of France, Ahrendt of Germany, Walras of Switzerland, Seyd (deceased) or Gibbs or Helm of England, or Andrews or Walker of the United States, that the unrestricted free coinage of silver by any one government now maintaining a gold standard could be otherwise than disastrous. On the contrary, they declare in print that they do not desire to debase the standard of value ; they would have every debt paid in gold or its equivalent. And this is the tone of bimetal- lists generally in Great Britain and Continental Europe. To all of which I repeat: When the two money metals 63 have unlimited free coinage at fixed ratios^ and are legal tender^ the cheaper will, under all possible circum- stances, drive the dearer out of circulation. We now come to the present most aggravated form of the silver money question, — its independent, un- limited free coinage by the United States. Alongside of me in business is a man of the utmost probity, who regards gold and silver as Siamese twins, and in effect says, " What God hath joined together let not man put asunder," though the commercial relations of the two metals have been, since the dawn of history, from i of silver to i of gold to 34 of silver to i of gold, and in the past three hundred years France alone has changed their ratios more than one hundred times to keep this pair of celestials in double harness. Nevertheless, this does not daunt my doughty friend, who ascribes all the trouble to the " natural cussedness " of mankind, the iniquitous machinations of avaricious goldbugs, and simply relies upon the leaven of genuine Christianity to keep the discordant couple in harmony. He finds Love a solvent for all refractory elements in life, an ounce of which he maintains in his philosophy on a parity with a pound of knowledge, that is, of the scientific methods in conformity with economic law. In support of his doctrine he quotes : "While Honor's haughty champions wait Till all their scars are shown, Love walks unchallenged through the gate And sits beside the throne." Recently one of our California Congressmen whom I met, after saying he would leave in a few days for 64 Washington, to vote for the unlimited free coinage of silver, volunteered the opinion that there is no economic law that is an absolute criterion in finance, and that the people are bound to have the unlimited free coinage of silver. It is very certain that the average man knows far less of finance and the laws of economic science than he does of the solar system and astronomical science; and natural law governs economic science as surely as it does the movements of the planets. Popular clamor should never be heeded in finance any more than in astronomy; for, as we have already shown under the " Natural Law of Money " and " International Bimetal- lism,", all history proves that economic law operates with as much certainty in the one as gravitation does in the other. Prof. Nicholson wisely observes : "If it is once generally believed that questions of currency can be decided off-hand by popular vote, the way becomes open for great national calamities." As indicating the views of the free silver agitators, I quote from the proceedings of a Silver Convention in Iowa: " The demonetization of silver was a colossal con- spiracy and crime, the greatest ever perpetrated against the human family. It was demoniac." Senator Pfeffer of Kansas declared : " It matters not of what money is made, or what its intrinsic value is. What gives value to the coins is law, nothing else. Our dollars ought to represent our property, all that we have, and not merely the little 65 gold in our possession; and our money ought to be made of material which, in small bits, would have no appreciable market value. Then it would not be ' cor- nered,' and when war or hard times should come it would not slink away and hide. When the people need money, they ought to have it within easy reach." And for himself and constituents, in furtherance of such and kindred vagaries, a free silver Governor of a free silver State said that they would, if necessary, ride in blood " even unto the horses' bridles." Senator Stewart of Nevada, in the Overland Monthly for November, says : " The combination which wickedly, dishonestly and clandestinely demonetized silver and destroyed one- half of the metallic money of the world dare not admit why they did it and for whose benefit it was done, — and that it is supported by time-servers, cringing politicians, trembling debtors, oflEce-holders with fixed incomes, and fawning hypocrites and sycophants of every name and nature." The Silver party, in its Convention at Washington, on Thursday, January 23d, said : " The fall of prices has destroyed the profits of legiti- mate industry, injuring the producer for the benefit of the nonproducer, increasing the burden of the debtor and swelling the gains of the creditor, paralyzing the productive energies of the American people, relegating to idleness vast numbers of willing workers, sending the shadows of despair into the home of the honest toiler, and building up colossal fortunes at the money centers." Only a few weeks ago a free silver Senator from South Carolina denounced the President of the United 66 States as a besotted tyrant, declaiming on the floor of the Senate to this eflFect : " The derangement in our financial affairs and all this cry about sound money and maintaining the honor and credit of the United States are all part and parcel of a damnable scheme of robbery, which has for its object: first, the utter destruction of silver as a money metal ; second, the increase of the public debt, the issue of bonds payable in gold ; and third, the surrender to corporations of the power to issue all paper money and give them a monopoly of that function." In a debate in the United States Senate, January 30, 1896, Senator Mitchell of Oregon said: " We must legislate to increase the value of our export commodities (including silver) so as to enable us to meet, reduce, and, if possible, wipe out the debt which to-day makes the people of this country virtually slaves to the money-lenders of Great Britain." Irving M. Scott says, in the Overland Monthly for February : " Not only have the demonetizing acts with respect to silver reduced the world's redemption money fully fifty per cent, but they have palsied its powers of recuperation, have effected a scarcity of money, and thereby infested our country's doors with countless packs of ravenous wolves." Such are some of the hysterical utterances of the finan- cial rough-riders of the country as they shout their fallacious doctrines to deluded adherents. The folly of the free silver agitators in the United States is but another form of the " whip-all-creation " braggadocio once so common in this country, but none the less hurtful and deplorable because common. To all of ^1 whicli I have repeatedly remarked in the past, and now reiterate, that if the Government of the United States can, by legal enactment, convert a given quan- tity of a commodity worth only fifty cents in the world's markets into one dollar of money of per- manent value, why not waive the fifty cents' worth of intrinsic value and issue fiat money at once ? If law can do this, why not make gold and silver equal in value, ounce for ounce ? If this can be done, why levy taxes ? The doctrine is, in fact, that of the advocates of inconvertible paper ; only the latter are more logical. If Government is to fix prices at all, it is, of course, cheapest and easiest to go to incon- vertible paper at once. The perverted views in ques- tion have all resulted from the cheap-money delusion which has made the United States monetary system the irregular and wasteful patchwork that it is. To create more money in order to raise prices in general has been the object of one faction, while another has aimed purely and directly at raising the price of silver. What has been proposed and done, therefore, has tended to aggravate monetary evils instead of lessen- ing them. Senator Stewart says, " They dare not admit why they did it and for whose benefit it was done," namely, the omission of the silver dollar from coinage, — that whicb he now calls " the crime of '73." As he voted for it, I will put him in evidence. In the Senate, February, 1874, Senator Stewart, replying to a ques- tion from Senator Logan, said : 68 " I want the standard gold, and no paper money not redeemable in gold ; no paper money the value of which is not ascertained ; no paper money that will organize a gold board to speculate in it." The " gold board " referred to was the Gold Ex- change in New York, which existed during the sus- pension of specie payments. Subsequently Senator Logan, in discussing the same subject, stated that we could not get gold to resume specie payments with. To which Stewart replied : " When gold is invited to a country like this, with such an industrious people as we have, with our industry and our resources, I say there will be no difficulty about getting sufficient gold." Since those words were spoken the annual produc- tion of gold in the world has increased 120 per cent. Senator Stewart now says : " They (the advocates of a gold standard) know full well that, if silver had the same right of mintage with gold, the parity between the two metals would be restored and maintained^ as it was for thousands of years pre- vious to the crime of /(^/J." I wonder if he was conscious of the irony of his own words ? There never has been maintained, at any place or period, an evenly operating parity between the two metals as legal tender under free coinage at fixed ratios. He also asks : " Does anybody doubt that Japan, China, Mexico, and other free coinage countries, are more prosperous and happy than ever before in their history ? while every 69 gold-standard country in the world is more miserable than at any other time for the last two hundred years ?" I have taken at random nine callings, as follows, laborer, bricklayer, stonemason, blacksmith, driver, butcher, shoemaker, carpenter, printer, and find that at present their aggregate wages for one day in San Francisco are $29.35 Z^^^ ! ^^ four Pacific Coast com- mercial centers, combined average, $25.56 gold; in commercial centers east of Missouri River, $22.17 gold; in Mexico, $8.17 in silver; in China, $3.25, and in Japan, $2.19, also silver, though since the Chino- Japanese war wages are rising in China as well as Japan. McMasters quotes the same number and calling of workmen in New York as earning, in the period between 1 770-1800, for one day, $7.35 in silver. Thomas Carlyle, in his " Past and Present," quaintly records that Milton received for his " Paradise Lost," and other works, ;^io in installments and a narrow escape from hanging. And Bishop Latimer, in one of his sermons, shows that in his time ^8 was not infre- quently the yearly wage of a parish priest, which he very justly denounced as niggardly. In money of the present time it would be only about $10. The average wage-earner in Japan or China gets no more in silver than one-eighth the rate obtained in this country in gold, and in Mexico, right alongside of us, as a rule no more in silver than one-third the rate received in this country in gold. I also refer to the labor statistics quoted under " International Bimetallism." Senator Stewart says, " One-half the metallic money of the world has been destroyed." Mr. Scott says, " Reduced the world's redemption money 50 per cent.' 70 There never has been any destruction of or reduction in the amount of silver money. On the contrary, it has increased over 75 per cent in 45 years. Taking Mulhall's figures for i860, $4,000,000,000, and 1890, $7,973,000,000, as a basis, and adding the total prod- uct, mint ratios, 1891-95 inclusive, and deducting from these five years 40 per cent for the arts, the amount of gold and silver money would now be approximately $9,100,000,000, or an increase of 134 per cent since i860. But taking other figures, in i860 the world's total stock of coin, estimated, was $4,000,000,000; in 1895, as per United States Mint Report, $8,157,000,000; and the present stock of metal- lic money exceeds $8,200,000,000, an increase of 105 per cent in 45 years. This money is divided at the present time: Gold, $4,130,000,000; silver, $4,070,- 000,000. Four thousand and seventy millions of dollars is the mint value of the silver money in the world, its commercial value being approximately sixty-five cents per ounce; and nearly half of it represents silver monometallism in Oriental lands. Does any sane man believe that unlimited free coinage by the United States of America would increase the market value of this mass of silver two thousand millions of dollars? Although eighty-five per cent of the total is full tender, it possesses, practically speaking, no more commodity value in one place than another, as compared with gold, because, in the relations between gold and silver in India, China, Japan and Mexico, silver is subject to practically the same commodity price that it would be with us. Throughout the whole history of the subject, 71 whatever may have been the legal ratio enacted between gold and silver coins, gold and silver themselves have always had a commodity value independent of these ratios ; and this commodity value invariably controlled the purchasing power of each money under unlimited free coinage of both medals. In all large transactions of ancient or medieval times, the settlement of obliga- tions was in either gold or silver by weight (as it is now in China), and without reference to coinage ratios, which were variable and constantly set at naught by the commercial status of the metals, that is, by the will of the people, — the supply and demand. However, so far as the world's stock of silver is con- cerned, it is only when it is employed in international exchanges or in the industrial arts that it is estimated at its bullion value in gold and subjected to a discount. In all countries where it is the legal standard, as well as in countries that have a so-called " limping " stan- dard, like the United States and the States of the Latin Union, it circulates as money at its full legal parity with gold, and to the extent of $630,000,000, which represents the subsidiary silver in circulation, is cur- rent at nearly seven per cent more than its bullion value in standard silver coins. Of the $4,070,000,000 silver in circulation, according to the Mint Director's last report, $1,900,000,000, or nearly one-half, is held in Oriental countries, where it is the " standard of value," and hence cannot be at a discount in the domestic commerce of those countries ; while over $1,720,000,000 is held by the United States, the Latin Union, Germany, Spain and Great Britain, 72 all of whicli circulates at its full parity with gold. A no period in history has there ever been such a vast volume of silver coin performing the functions of money. And, as proof of this, while the world's produce of silver since 1873, when its alleged demon- etization occurred, has been $2,754,452,900, its coinage has been $2,756,423,015. This, of course, includes recoinage. Moreover, it has been persistently asserted by leading bimetallists that silver has not depreciated, and will buy as much now as it ever could. And, to demonstrate that proposition, we have been treated to an amount of arithmetical jugglery that might well make Hermann, prince of prestidigitators, or even an Indian fakir, turn green with envy. In this connection Mr. Scott should consider the present and past relations of the copper " cash " with the silver taels in China. To merely touch upon Mr. Scott's assertion regarding what he deems reduction by reason of the gold standard, I may say that we find, upon reference to authorities, that the production of gold (I am now speaking of gold and silver as commodities) was, in 1874, $91,000,000 ; in 1876, $104,000,000; in 1878, $119,000,000; in 1890, $120,000,000; in 1892, $147,000,000; in 1894, $180,000,- 000; and in 1895, breaking all previous records, it was $200,000,000. Silver represented, in 1870, $51,000,000; in 1874, $70,000,000; in 1884, $91,000,000; in 1894, $106,- 000,000; in 1895, $110,000,000; wherefore, I repeat, there has never been any destruction of or reduction in the volume of silver money. 73 As Mr. Scott practically advises this country to abandon the gold standard and adopt the unlimited free coinage of silver, presumably at a ratio of i6 to i, which is about twice its actual value, and which means cheap-silver monometallism, — I would ask what effect such a policy would have upon the welfare of the men whom he employs, and also upon that of the people of California whose gains and earnings are largely repre- sented by the hundred and seventy-five millions of depos- its on a gold basis in the savings and commercial banks of this State ? In other words, does he, or does any one, really believe that his workmen, or anybody's workmen, or the people at large, would be benefited by being paid their wages, or their deposits in banks, on a depreciated silver basis, instead of a gold basis, as now ? In the Elizabethan reformation of the English coin- age under Sir Thomas Gresham in the sixteenth century, the Queen, in her proclamation, said : " The loss in the base money falls principally on pensioners^ soldiers^ hired servants^ and all other poor people who live by any kind of wages, and not by rents of land or trade or merchandise." This is in accordance with a natural law as inexorable as gravitation, that no legis- lation can evade or set aside. The way in which the subject of free silver coinage is discussed by many of its advocates would, without disrespect, suggest that they expected to be able to go forth with a sack and obtain money for nothing ; but there is no royal road to wealth, and all should consider the evils that would result to the industrial classes of this country from the substitution of a currency based on silver instead of gold. 74 Every person should candidly reflect upon the indus- trial condition and wage-earning opportunities of human kind in silver-standard countries as compared vpith the gold-standard countries. It is only in the gold-standard countries that high wages have been achieved. Every country in the world that has unrestricted free coinage is on a silver basis, and low wages prevail. There is not a gold-standard country in the world that does not use silver as auxiliary ; but there is no silver-standard country that does or can use gold as auxiliary, except by specific- contract or as hoarded treasure. Why any considerable portion of the American people should have believed, or can now believe, that the unrestricted free coinage of silver could possibly be a benefit, or that silver and silver-producers should be deemed entitled to any more consideration than wheat and cotton and the men that plant and cultivate them, is simply astonishing. Professor Andrews stands aghast at the idea of social- ism, — speaking of anarchism, nihilism and socialism in the same breath as corelated, — thus : " That labor is the sole cause of wealth, and that things are wealth exactly in proportion as they embody labor, is a fundamental tenet of socialism, anarchism and communism, the admission of which leaves one no logical defense against the general doctrine of those people." Yet, " doing something for silver " is class socialism as pernicious in effect as that of the greenback legisla- tion, which is probably one of the most aggravating examples known in this country of home markets that do not qualify for the farmer when his products are brought 75 into competition in the world's markets — which fix home prices — with the products of Argentine peons, Indian ryots and Russian peasants. The alleged popular desire for free coinage, upon which so much stress has been laid, is presumably based on a belief in the public mind that silver, given free scope, would cure or at least mitigate industrial depres- sion, caused, as alleged, by scarcity of money ; and that it would contribute largely to the relief of farm mortgage or note debtors, both of which are points upon which the advocates of free silver also place especial emphasis. An advocate of free silver has said : " It is not a question of interest to the people whether the gold and silver bullion owners may have the right to have their metal coined into legal-tender dollars, but it is of vital interest that those who carry the burden of $2,500,000,000 of debts that are liens on their property shall have the right to the use of both metals for legal-tender money to pay those vast debts." The question arises. Would even they be helped under the independent, unlimited free coinage of silver? Any one possessing silver bullion would have the same coined, because of the artificial value placed upon it by Government, and use it to his own advantage. How would farmers with mortgaged farms obtain such silver but by exchanging their commodities for it, or by executing fresh mortgages? When asked how they are to get possession of a more plentiful supply of money, if on a free silver basis it should be more plen- tiful, they cannot tell. That our wheat farmers have sufifered extremely admits of no doubt. In addition to drought and other climatic vicissitudes, they have 76 suffered from the competition of India, Argentina and Russia, thereby demonstrating the fallacy of the home- market delusion; and, latterly, cable and trolley cars and the bicycle have come in to lower the prices of their horses and lessen the demand for feed grains, etc. But how would a depreciated currency, such as would be produced by the unrestricted free coinage of silver, help them? In California their obligations are in terms of gold. In any event contraction and panic would be the first result of a change, because gold would be driven out of circulation. Moreover, gold has by law been the standard for twenty-three years, a period of time long enough to permit six generations of ordinary farm or land mortgages to expire by limita- tion, the average life of such mortgages being less than four years. It is averred by Mr. L. M. Dembitz, of Louisville, Ky.^ in his monograph, " The Free Coinage Problem," that, " making all proper deductions, it will be found that among the bread-winners of the United States there is not one in a hundred who owns a heavily incumbered home farm, and who could, with any approach to a semblance of right, demand the passage of a law shak- ing off or lightening his burden." Debtors might avail themselves of a free-coinage law to pay their debts in cheaper money if their creditors should not be alert enough for them; but capitalists will be equal to the situation as regards future bar- gains, for by universal consent commercial communities may by contract free themselves from the burdens of such an act. The gold standard was, in fact, brought 77 into use in Bn gland i8o years ago by the community contracting in this manner, and the experience on the Pacific Coast, as well as in England and elsewhere, shows that the commercial community is everywhere ready enough to use other than an enforced money if they do not quite like it. But there would be no protection whatsoever for the wage-earner of any kind. He would be as a lamb led to the slaughter. The shopkeeper who sells goods, and the capitalist who rents houses or lands, can raise the prices thereof by their own volition ; but the workman who buys goods and rents houses or lands cannot simi- larly raise his own wages. Of all the contrivances for cheating the laboring classes of mankind, none is more eflfectual than a currency that is not convertible into metallic money of intrinsic equivalency. In this country to-day the laboring man receives a dollar equal to gold worth loo cents, but with silver dollars of independent, unlimited free coinage he would be cheated of one-half of his dollar. Free silver coinage practically means cheating creditors out of one-half their dues. The adoption of free silver means silver monometallism, with silver coin depreciated one-half. The maintaining of both metals as money should be such that each should equal the other. That would be true bimetallism, and is only possible with gold as the standard and silver as auxiliary freely interchangeable. It is frequently asserted by advocates of the indepen- dent, unlimited free coinage of silver by the United States Government, that the prices of commodities, particularly wheat, have steadily moved in sympathy 78 with the price of silver. An examination of this sub- ject has shown that within the past twenty-three years the fluctuations, for example, in wheat, corn and cotton, have almost invariably occurred because of an increase or a decrease in the world's supply ; that is to say, when the crops were light, prices increased, and, when crops were heavy, prices decreased; — beef and pork fol- lowing the fortunes of the cereals to a less degree ; — and such fluctuations show continuously throughout the period named, to wit, twenty-three years, from 1873 to 1895 inclusive, with no indication that the changes in prices were caused or governed by silver quotations in any way. In other words, the general downward ten- dency in the price of wheat has been due mainly to the increased product, for export, in Argentina, India, Russia and the United States also. Let us take the coffee crop, almost entirely confined to silver-using countries, and of the present value of f 250,000,000 per annum. It has doubled in quantity since 1870, yet the demand has at the same time so increased that the price is now approximately 18 cents per pound in gold, as against an average of less than 11 cents for five years, from 1856 to i860, an increase of 66 per cent. Cotton varied ']'] per cent in 1895. Wheat declined in eighteen years — that is, from 1879 (date of gold resumption) to 1896 — 45 per cent ; corn 15 per cent.; oats 15 per cent ; lard 3 per cent ; mess pork increased 3 per cent ; butchers' beef 13 per cent, — a superficial aver- age decline on these six articles of 1 1 per cent ; while we have shown under " International Bimetallism " that in the same period transportation of all kinds and manufac- tures generally declined over 50 per cent, which must 79 surely be deemed a blessing, particularly as wages increased during the same period. What the explana- tion is of this situation is given in Professor Marshall's " Principles of Economics : " "A rise in the eflSciency of any one group of workers may tend to glut the mar- ket with their wares, but a general increase in the eflBciency of all workers would increase the national dividend and raise earnings nearly in proportion." This, I think, fairly accounts for the fact that wages have in the aggregate largely increased during this century, while as a whole prices of commodities have fallen, but not nearly so much as the general outcry would indicate, as can be seen from the following table from Schoenhof 's " Money and Prices : " Variation of Prices and Approximating Totals of Index Numbers. 1845-50. 1879. 1884. 1888. 1. Coffee 100 140 106 166 2. Sugar 100 55 54 49 3. Tea 100 III 92 64 4. Tobacco 100 156 200 244 5. Wheat ICO 75 73 58 6. Butchers' meat 100 127 123 108 7. Cotton 100 73 92 90 8. Raw silk 100 113 117 117 9. Flax and hemp 100 80 76 66 10. Sheep's wool 100 107 98 in 11. Indigo 100 164 151 129 12. Oils 100 104 no 74 13. Timber 100 115 100 80 14. Tallow 100 83 113 73 15. lycather 100 146 139 133 16. Copper 100 72 71 91 17. Iron 100 77 69 67 18. Lead 100 84 70 90 19. Tin 100 77 104 173 20. Cotton, Pernambuco. . . 100 71 74 70 21. Cotton yarn 100 88 99 90 22. Cotton cloth 100 81 88 87 Totalsof index numbers .. 2,200 2,202 2,221 2,230 Price of silver per ounce . . 6o>^d. 49j^d- S^^- 44/^