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 The story of mone' 
 
 3 1924 032 520 250 
 
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 Library 
 
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 tlie Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924032520250 
 
"COLD THE STANDARD OR MEASURE OF VALUE-SILVER SUBSIDIARY." 
 
 Heading in Report of Director 0/ Mint, Nov. i, lSg3. 
 
 THE STORY OF MONEY. 
 
 A Science Hand-Book of Money Questions. 
 
 BY 
 
 EDWARD C. TOWNE, B. A. 
 
 ^ 
 
 NEW YORK. 
 G. W. Dillingham Co., Publishers. 
 
Copyright, igoo, 
 
 BY 
 
 EDWARD C. TOWNE. 
 
 WEED-PARSONS PRINTING COMPANY, 
 
 PRINTERS, BLECTROTYPEES AND BINDERS, 
 
 ALBANY, N. Y. 
 
A FOREWORD. 
 
 The writer of the chapters embraced in the pres- 
 ent volume was not, in the eight years following 
 the election of Harrison, a supporter of Harrison- 
 McKinley Republicanism, but from the beginning 
 of Mr. McKinley's presidency he has seen what 
 seem to him steadily and broadly advancing 
 grounds for the belief that in World-History no 
 American ruler, not even Washington and Lincoln, 
 will have a larger name or a more indelible record 
 of honor than the sagacious, judicious, resolute 
 administrator of national magistracy who came 
 into power through the magnificent honest money 
 campaign of 1896, and, under whom the New 
 World Republic of Washington and Lincoln has 
 slipped the anchor of early limitations to take her 
 inevitable place as a Power second to none in the 
 world. 
 
 If in the first instance this volume shall help to 
 make President McKinley our dependence for 
 another four years of soundness in national 
 finances, and of demonstration throughout the 
 world of American quality in counsel and power 
 in action, the chief aim of the writer will have 
 been accomplished, yet with the hope and belief 
 that through many years yet to come the book will 
 direct the student to sound views of money and the 
 voter to action at once honest and honorable. 
 
 [iii] 
 
"Gold the Standard or Neasore of Yafae— Silver Subsidiary. 
 
 Heading in Report of Director of Mint, Nov, 1 , 1 893. 
 
 PRESIDENT ANDREW JACKSON-"Iaall ages, through- 
 out the world, the standard of value. There is no fraud in gold ; like the 
 honest principles of the founders of our government, it is unchangeable and 
 will do its office well everywhere and at all times. It is the true representa- 
 tive of the principles of justice and equality which should enter into every- 
 thing that operates on our institutions and should be ever insisted on by the 
 industrious classes as the actual circulating medium to bring continually to 
 the test every species of credit currency and to suppress the spurious paper 
 system resting on no solid basis. ' ' — December 36, i8jb. 
 
 SENATOR JOHN SHERMAN— "The united states is the great 
 gold producing country of the world. The single standard of gold is an 
 American idea."— /a««ary, r^8. 
 
 " At the Paris monetary conference, held in 1867, the delegates of twenty 
 nations represented, agreed to recommend gold alone as the standard of value* 
 The United States, and nearly all the commercial nations, have adopted this 
 standard." — January 16, 1^4. 
 
 SENATOR W. M. STEWART— ''There is noting so satisfactory 
 
 as the real measure of value — gold." — January 13. 1874. 
 
 "Gold IS the universal standard of the world." — February so, 18^4. 
 
 " It is idle to talk about compromising on any other measure of value ; the 
 world will not accept it." — June 11, 1S24, 
 
 SENATOR JOHN P. JONES — "The sooner we comedown to a 
 purely gold standard the better it will be for the country. Gold is so exact a 
 measure of human effort that when it is exclusively used as a money it teaches 
 the very habit of honesty." — April /, t874' 
 
 HON. LYMAN J. GAGE— President McKinley's Secretary of the 
 Treasury, Hon. Lyman J. Gage, said, after reading Dr. Towne's " Story of 
 Money " : 
 
 " An immense gain and advance over any previous book on money." 
 
 " I took your manuscript with a view to glancing over it and reading here 
 and there the more interesting portions, but I became interested and read 
 every line." 
 
 ** It is very clear and instructive, and it seems to me you have made a good 
 distinction between the possibilities of a bi-metalUc standard and bi-metallic 
 money." 
 
 "The information you have gathered into the book as to the course of 
 money in the various countries is very valuable, and I hope you will be able to 
 get the book promptly into the hands of the public." 
 
 " I feel an interest in the work and would be glad to recommend It and buy 
 a limited number of copies." 
 
 [iv] 
 
A POLITICAL NOTE. 
 
 The situation created by the legislation of last March has been 
 very largely taken for far more than it really is. It declared very 
 justly the existence of the gold standard, and properly provided for 
 the redemption, or payment in gold, of United States notes and 
 treasury notes, amounting to about $425,000,000, but it did not simi- 
 larly provide for making as good as gold the nearly $580,000,000 
 of our silver, which is over half fiat value. The moral effect of the 
 new law was got without any new legal effect whatever. It, that 
 is, gave no new means for carrying out the gold standard system. 
 The House bill expressly authorized the Secretary of the Treasury 
 " to exchange gold coin for any other money issued, or coined by 
 the United States," whenever it should be necessary to do this. 
 This fundamental principle of the gold standard system was 
 rejected by the Senate, leaving the law no better than it was before 
 in respect of the means of acting on our gold standard professions. 
 
 This might involve no peril if our administration traditions should 
 become thoroughly fixed in the direction of fidelity to the gold 
 standard. But with Mr. Bryan made President, and a second sil- 
 ver fanatic Secretary of the Treasury, payment, in 47-cent silver 
 dollars, of both interest and principal of the bonded debt of the 
 United Stales, save only the funded two per cents., could be ordered 
 at once, and undoubtedly would be. The stand thus taken for sil- 
 ver would offer all our gold in exchange for silver at i for 16 
 when it is worth i for 33. No instance in history can be brought 
 to parallel the rascal stupidity of a scheme involving such an offer, 
 and with progress and prosperity so immensely advanced since 
 1896, the crash of a Bryan experiment of " fool fury " in finance 
 would be worse than all the costs and miseries of the civil war. If 
 any possible advantage could b; expected from either free silver 
 legislation and administration hereafter, or free silver clamor now, 
 the madness of 16 to i would be less extreme than it is. But no 
 possible advantage can be imagined, except upon a basis of hood- 
 lum ignorance of, or rascal indifference to, truth and fact. It might 
 as well be proposed to sell wheat, corn, cotton, and beef to foreign 
 markets at 53 cents on the dollar below the market price, as to cut 
 
 [v] 
 
VI A POLITICAL NOTE. 
 
 the value of a thousand millions of gold more than one-half to cus- 
 tomers in London and Europe. The silver interest alone could bet- 
 ter afford twice a President's salary for the rest of Mr. Bryan's life 
 than to give him a three months' opportunity to scuttle the whole 
 fabric of American prosperity in (he fashion of his dictation of i6 
 to I to the political convention which made him for the second time 
 a presidential candidate. And that a political convention hopeful 
 of success upon new issues for which something can be said, should 
 bow its neck to a needless, senseless, suicidal millstone, the damn- 
 ing infamy of which is only matched by its disastrous folly, is the 
 worst illustration in our history of convention chances. An anti- 
 imperialist of the financial competence of the editor of the New York 
 Evening Post, could have shown the Kansas City convention in 
 half an hour that the way was more than open to them to accept 
 the gold standard, and remove the question of standard from the 
 list of campaign issues. The only issue they have ever needed to 
 make is that of Bimetallism of money, and it is the world's experi- 
 ence, and especially American experience, that this can be better 
 had under the gold standard than in any other way. 
 
 If anything were needed to discredit the senile sentimentalism 
 of Mr. Boutwell's" anti-imperialist" cabal, it has been supplied by 
 their accession to the support of Mr. Bryan. The scholar in Ameri- 
 can history, if he equally understands the story of A merican money 
 and the origins of our present constitutional position, can hardly 
 conceive a catastrophe more appalling than that invited by the 
 hoodlum and rascal scheme for giving the present administra- 
 tion of our national affairs an overthrow such as the candidacy of 
 Mr. Bryan, in the name of the money of the fathers and of the 
 Declaration of Independence, as he views these, must imply. 
 
 The outcome, in constitutional politics, of the Declaration of 
 Independence, was a wretched, a rascal, a ridiculous failure — a 
 government which Washington described as " half-starved, limp- 
 ing, always moving upon crutches, and tottering at every step." 
 The Revolution, even with Washington to conduct it, would have 
 been a disgraceful fizzle, even as late as the Yorktown campaign, 
 had not two French fleets, a great number of French troops, and 
 loans of honest French money, come to the aid of the meagre force 
 led by Washington. One of the first results of liberty and independ- 
 ence gained by the Revolution was an armed rebellion in western 
 Massachusetts. It was because of failure, of disaster and dishonor, 
 under the Declaration of Independence, and the scheme of union 
 devised by the zealots of liberty, that " we the people, in order to 
 
A POLITICAL NOTE. vii 
 
 form a more perfect union, to establish justice, ensure domestic 
 tranquillity, provide for the common defense, promote the general 
 welfare, and secure the blessings of liberty to ourselves and our 
 posterity," made the profoundly radical new departure which an 
 entirely new constitution of necessity was. 
 
 It was plainly recognized as the creation of imperial sway over 
 the sovereignty of the states. John Adams said in 1786 that his 
 great desire was " to see rising in America an empire of liberty, 
 and a prospect of two or three hundred millions of freemen." 
 Dickinson of Pennsylvania said, that such " an extensive and well- 
 established empire " could be rreated " not only without the least 
 danger to liberty, but liberty will be thereby better secured." 
 Washington alone, out of his experience, his great clearness and 
 breadth of intelligence, and <t weight of personal influence almost 
 unparalleled, saw the necessity and value of an Imperial Union, 
 and the weakness of all objections to it, and secured the accept- 
 ance of it when framed. " There is no alternative," he said, 
 when the constitution was under consideration, " between the adop- 
 tion of it and Anarchy. All the opposition that I have yet seen is 
 addressed more to the passions than to reason." 
 
 Yet the Constitution, as proposed in 1787, roused an anti- 
 imperialist agitation of the most strenuous and frantic character, 
 with a majority of the public leaders and of the people carried 
 away by it, except as some sections felt very specially the needs 
 of commerce and as Washington and Samuel Adams prevented 
 Virginia and Massachusetts from taking the plunge which zeal for 
 liberty was thought to require. Samuel Adams, " the helmsman 
 of the Revolution," so far yielded to this zeal at first as to co-operate 
 with Elbridge Gerry and Rufus King in putting Massachusetts on 
 the side of hostility to the idea of a new Constitution, and when 
 the great instrumeni had been framed, and was submitted to the 
 States for acceptance, Mr. Adams said, " I stumble upon the thresh, 
 old," being alarmed at the idea of a " national government instead 
 of a federal union of sovereign states." As, however, the moment- 
 ous issue was debated in convention, where Rufus King appeared 
 as having seen new light, Massachusetts's historic patriot let go 
 his fears, his doubts, and his excessive zeal for liberty, and made 
 possible the acceptance of the Constitution, which Gerry and 
 Nathan Dane had refused to favor. He set an example which an 
 eminent Senator to-day may save himself by following, — as he 
 seems determined to do. 
 
 Richard Henry Lee, who is forever celebrated as the mover, in 
 
Vlll A POLITICAL NOTE, 
 
 the Congress of the colonies, of the Declaration of Independence,, 
 unhesitatingly damned the Constitution as "an elective despot- 
 ism." In Congress, to the presidency of which he was just then 
 elected, he fought with the utmost zeal every proposal for a new 
 Constitution, and when defeated there he restlessly battled against 
 the prospect of " an American empire,'' under which he said " lib- 
 erty would become an empty name." 
 
 Patrick Henry voiced his anti-imperialism with passion so frantic 
 as to violate every rule of order in debate. He declared, with hor- 
 ror such as our Atkinson-Boutwell-Winslow zealots of liberty can- 
 not approach, that " ' We the people ' is the institution of one great 
 consolidated national government of all the states," and George 
 Mason, a patriot of Virginia second only to Washington, spoke for 
 Henry and Lee as well as for himself when he said that " a general 
 consolidated government is one of the worst curses that can befall 
 a nation," because "' a national government," or " one government 
 over a very extensive country," cannot exist " without destroying^ 
 the liberties of the people." Benjamin Harrison, James Monroe, 
 John Tyler, and William Grayson, lent their utmost support to the 
 same view. Yet the event showed that George Washington was 
 right when he said that there was no reason for that view. 
 
 Anti-imperialism was the issue of the civil war, as honest an 
 issue to the southern states as the imperialism of the Constitution 
 to the northern. It was fought out and settled, and the acceptance 
 by the south of imperialism ranks with the greatest events in his- 
 tory. Hysterical revival of the issue by a handful of Massachu- 
 setts sentimentalists, who have so far taken leave of all decency as 
 to come very near the penalties of treason, and whose intelligence 
 is represented by readiness to assist criminal politics and financial 
 hoodlumism to overthrow at once the prosperity of the country 
 and the best administration it has had since Washington's, can- 
 not have serious value, save as it may be one torch madly put to 
 the greatest structure of liberty and welfare the world has ever 
 seen. 
 
 There may be very great mistakes in the course taken by the 
 administration of President McKinley, but these can be appealed 
 against without any senseless harking back to the anti-imperialism 
 of Patrick Henry, R. H. Lee, George Mason, and Benjamin Harri- 
 son, and not less without standing off from cordial general support 
 of the national administration. 
 
TABLE OF CONTENTS. 
 
 CHAPTER I. 
 
 INTRODUCTORY. 
 
 PAGB;. 
 
 1. Better knowledge needed I 
 
 2. Bimetallism not rightly explained 2 
 
 3. Shaw's " History of Currency " 3 
 
 4. White's " Money and Banking " 4, 
 
 5. Dr. F. A. Walker on money 7 
 
 CHAPTER II. 
 
 THE EARLIEST ORIGIN AND IDEA OF MONEY. 
 
 6. Importance of the story of money 10 
 
 7. Earliest facts of money 10 
 
 8. Business by barter in Egypt 11. 
 
 9. Use of gold in Egypt 13 
 
 10. Silver in Egypt 14 
 
 11. A gold-silver compound 15 
 
 12. Earliest money of Egypt copper 15; 
 
 13. Babylonian use of precious metals 13 
 
 14. African cowries as money ly 
 
 15. Indian wampum money 18" 
 
 16. Intrinsic value the basis of money 19^ 
 
 17. Regulated barter without money 20 
 
 18. Abraham's cash transaction in real estate 22- 
 
 19. First place given to gold 24 
 
 20. The gold wedding ring 26 
 
 21. The Mosaic sanctuary use of gold 27- 
 
 22. The gold of Solomon's Temple ' 28 
 
 23. Solomon sold bonds and bought gold 30 
 
 24. Solomon's demonetization of silver 30 
 
 25. The vulgar dispraise of gold 31 
 
 26. Anti-gold fanaticism 32^ 
 
 27. Gold as a rule of honesty 34 
 
 [ix] 
 
X TABLE OF CONTENTS. 
 
 CHAPTER III. 
 
 THE GROWTH OF MONEY: ORIGIN OF STAMPED COIN. 
 
 PAGB. 
 
 28. The natural history of money 35 
 
 29. The essential fact of money 36 
 
 30. Error of common view Z7 
 
 31. Early Greek making of money 38 
 
 32. Mr. Grote on Pheidon's coinage 42 
 
 ^3. Dr. Curtius on Pheidon's coinage 43 
 
 34. Growth of Greek money 45 
 
 2S- Religious connection of coinage 49 
 
 Zd- Ancient money was metal by weight 51 
 
 CHAPTER IV. 
 
 THE PRECIOUS METALS AS THE MATERIAL OF MONEY. 
 
 37. Unique position of money metals 53 
 
 38. Costly not the same as precious 54 
 
 39. Platinum not good for money 56 
 
 40. Relative position of silver and gold 57 
 
 41. The gold-silver compound 59 
 
 42. Earliest current money 59 
 
 43. What makes real money 61 
 
 44. The ultimate standard 62 
 
 45. What value consists in 62 
 
 CHAPTER V. 
 
 THE MAKING OF MONEY. 
 
 46. Metallism 64 
 
 47. Full value coin 65 
 
 48. Fiat value coin 66 
 
 49. A necessity in cheap coins 67 
 
 so. Full value metallism 68 
 
 51. Method of knowing coin values 69 
 
 52. Historic basis of real money 70 
 
 53. Silver metallism 71 
 
 54. Gold metallism 72 
 
 55. Gold the standard 74 
 
TABLE OF CONTENTS. xi 
 
 PAGE. 
 
 .56. Special case of silver 74 
 
 57. Gold commands confidence 7S 
 
 58. The chief problem of metaliism 76 
 
 59. The true interest of silver 77 
 
 60. Gold bimetallism 79 
 
 CHAPTER VI. 
 
 THE USES OF MONEY. 
 
 61. Money measures value 8r 
 
 62. Money regulates exchange 82 
 
 63. Aristotle on money 83 
 
 64. Mr. Horace White on money 84 
 
 65. Money as a standard of value 85 
 
 66. Labor and money 86 
 
 67. Money and credit 87 
 
 68. Money as capital 88 
 
 6g. Money and banking 88 
 
 70. Value of sound banking 89 
 
 CHAPTER VH. 
 
 THE MINTING AND ISSUE OF MONEY. 
 
 71. Coinage 90 
 
 72. American mint law 90 
 
 73. Origin of the dollar. 91 
 
 74. Failure of Hamilton's dollar 93 
 
 75. President Thomas Jefferson suspends coinage of the 
 
 silver dollar 93 
 
 76. Hamilton's gold a failure also 94 
 
 77. Silver thrown out by President Andrew Jackson 95 
 
 78. Horace White on " The Gold Bill " of 1834 96 
 
 79. First American success with silver 98 
 
 80. The silver dollar still a failure 99 
 
 81. The legal tender paper disaster of 1862 100 
 
 82. How Mr. Chase broke the banks loi 
 
 83. Seventeen years of paper money 102 
 
xii TABLE OF CONTENTS, 
 
 CHAPTER VIII. 
 
 FIATISM AND CURRENCY. 
 
 PAGE. 
 
 84. Legal fiat and money 104 
 
 85. Legal fiat and standard 105 
 
 86. The English law of standard 106 
 
 87. The English law of silver 107 
 
 88. Fraud by fiatism 108 
 
 89. Early American fiatism ; 109 
 
 go. A celebrated instance of extreme fiatism no 
 
 91. The colonial fiat money craze in 
 
 92. Elements of the delusion 112 
 
 93. The outcome of fiatist finance 112 
 
 94. Fiatist zeal for American indepeiidence 114 
 
 95. Continental fiatist money 115, 
 
 96. The Civil War " Greenback " fiatism 118 
 
 ^T. The costs of American fiatism ii9> 
 
 CHAPTER IX. 
 
 BIMETALLISM. 
 
 98. "What is Bimetallism?" 120 
 
 99. Sidney Sherwood on bimetallism 122 
 
 100. Shaw on bimetallism 123 
 
 loi. Error of Shaw's assumption 124. 
 
 102. Confusion of points of view 125. 
 
 103. Gold standard bimetallism 127 
 
 104. Secure ratio for silver 128 
 
 105. The true bimetallic interest 129 
 
 106. Gold cannot displace silver 130 
 
 107. Advantage enjoyed by silver 130 
 
 108. How silver lost first place 131 
 
 109. Gold standard will help silver 131 
 
 CHAPTER X. 
 
 BIMETALLISM IN ENGLAND: COMPLETE BREAKDOWN OF THE. 
 DOUBLE STANDARD SYSTEM. 
 
 no. Early English silver 133 
 
 111. Early English gold 133 
 
 112. Recoinage scheme, 1695-99 134 
 
TABLE OF CONTENTS. xiii 
 
 PAGE. 
 
 313. The money-mongers got the silver 135 
 
 1 14. Sir Isaac Newton on money 135 
 
 115. Engtand with no good money 136 
 
 116. Birth of the present English system 137 
 
 117. A law of tender applied to silver 137 
 
 118. Coinage of silver suspended 138 
 
 119. Recoinage of silver — 1816 139 
 
 120. Reasons for the gold standard 140 
 
 CHAPTER XL 
 
 BIMETALLISM IN FRANCE — DISASTROUS WORKING OF THE DOUBLE 
 STANDARD SYSTEM DRIVES FRANCE TO THE GOLD BASIS. 
 
 131. Early French money 140 
 
 122. French revolution money 141 
 
 123. Mr. Shaw on French bimetallism 142 
 
 124. Double standard perils 14S 
 
 125. The gold standard a necessity 146 
 
 126. The Latin Union and gold 147 
 
 127. Final adoption of the gold standard 148 
 
 J28. Historic bimetallism of money 149 
 
 CHAPTER XII. 
 
 THE UNITED STATES AND BIMETALLISM — COMPLETE FAILURE OF 
 SILVER — THE GOLD STANDARD A NECESSITY. 
 
 129. Alexander Hamilton's money scheme 150 
 
 130. Fundamental error of Hamilton 150 
 
 131. Bimetallism of money practicable 151 
 
 132. Failure of Hamilton's scheme 152 
 
 133. The law of 1834 throws out silver 153 
 
 134. Gold becomes the only money 154 
 
 135. Position of silver reduced in 1853 154 
 
 136. Silver discredited as a standard ISS 
 
 137. Silver from 1873 not a standard 156 
 
 138. Silver not demonetized in 1873 156 
 
 139. Gold the standard; not the sole money 157 
 
 140. Silver as money made secure 158 
 
xiv TABLE OF CONTENTS, 
 
 PAGE. 
 
 141. Gold standard means double money 159- 
 
 142. The Bland bill double standard scheme 159 
 
 143. The Bland bill results 16& 
 
 CHAPTER XIII. 
 
 GERMANY AND BIMETALLISM — THE GOLD STANDARD COMES IN 
 WITH THE EMPIRE — A RECENT GERMAN SILVER CRAZE. 
 
 144. Early German monetary effort 161 
 
 145. The Vienna convention 162 
 
 146. Germany's gold standard system 162 
 
 147. German gold and silver... 163- 
 
 148. Recent German agitation 164 
 
 149. Inquiry on behalf of silver 165 
 
 150. Latest German silver move 165 
 
 CHAPTER XIV. 
 
 INDIA AND THE GOLD STANDARD. 
 
 151. India's trial of silver 166 
 
 152. India demands gold i68- 
 
 153. India gets the gold standard 169 
 
 154. Injury done by free coinage 170 
 
 155. India's demand for silver 170 
 
 156. Futile effort to hold up silver in India 171 
 
 157. Present status of silver in India 172 
 
 CHAPTER XV. 
 
 MONEY AND PRICES. 
 
 158. Entirely false assertion of disastrous fall caused by 
 
 gold — No disastrous change in prices I7j 
 
 159. Cause of decline in prices 174 
 
 160. How supply and demand work 175 
 
 161. The case of cotton 175 
 
 162. Wheat prices 176 
 
 163. Wholly false claim that appreciation of gold since 1873 
 
 now injures debtors 177 
 
 164. Appreciation of gold desirable 179. 
 
TABLE OF CONTENTS. XV 
 
 PAGE. 
 
 165. Gold the supreme commodity 179-- 
 
 166. Debtors not hurt by gold 180 
 
 167. Gold the supreme servant 181 
 
 168. Use of metals as money does not cause appreciation. .. 182 
 
 169. Price of silver not aflfected by use as money 183 
 
 170. Market price not made by money use 185 
 
 171. Hoodlum and xascal finance 185 
 
 172. The foundation of prosperity 186 
 
 173. Entirely false idea that gold has appreciated 186 
 
 174. The cause of hard times 188 
 
 17s. False "American Independence" 189. 
 
 176. Anti-English fanaticism 191 
 
 177. Anarchist ravings 193. 
 
 178. Falsification of facts 194 
 
 179. Mendacious complaint against gold and banks 195 
 
 180. France and silver 198 
 
 181. The world's money supply to-day 199 
 
 182. Ignorant idea that gold is doing double work 200 
 
 183. Gold did double work before 1873 2or 
 
 184. Silver has helped since 1873 2or 
 
 185. Silver help' made matters worse 202 
 
 186. Criminal conspiracy against gold 202 
 
 187. Silver sale of gold 203, 
 
 CHAPTER XVI. 
 
 " INTERNATIONAL BIMETALLISM." 
 
 188. Dr. F. A. Walker's last book 204 
 
 189. Gold value wrongly viewed 205 
 
 igo. Radically wrong idea of money 206 
 
 191. Absurd notion of currency contraction 207 
 
 192. Possible regulation of gold and silver values 208 
 
 193. Alleged economic force set in motion by money law. . . 208 
 
 194. Dr. Walker's fundamental error 21& 
 
 195. A wholly baseless theory 212 
 
 196. False idea of eflect of new supply of gold 213 
 
 197. Possible peril in silver 2i5 
 
 198. France forced to drop silver 218 
 
 199. Double standard did not give France double money... 220 
 
xvi TABLE OF CONTENTS. 
 
 PAGE. 
 
 200. Theory of bimetallism based on supposed French ex- 
 perience 222 
 
 .201. Bimetallism a recent novelty 223 
 
 202. Errors of Dr. Walker's argument 224 
 
 :203. Mistakes of economists used in proof 226 
 
 -204. Inadequate defense of bimetallism 227 
 
 205. Alleged advantages of bimetallism 229 
 
 3q6. a wholly delusive scheme. 231 
 
 .207. " Demonetization " tragedy. 232 
 
 208. Dr. Walker's position indefensible 234 
 
 -209. Human progress means gold 234 
 
'Gold the Standard or Measure of Value — Silver Subsidiary." 
 
 Heading in Report of Dinctor of Mini, Nov. 1, 1893. 
 
 The Story of Money 
 
 A SCIENCE HAND-BOOK OF MONEY QUESTIONS. 
 
 CHAPTER I. 
 
 INTRODUCTORY. 
 
 I. BETTER KNOWLEDGE NEEDED. 
 
 Mr. John Henry Norman in his interesting and 
 valuable " Complete Guide to the World's Twenty-nine 
 Metal Monetary Systems," says by way of a dedication : 
 
 " These pages are dedicated with profound 
 respect to the world's first man of Science who in 
 the future produces a Science Primer of Money : 
 such as will compel the world to accept and teach 
 it as truth." 
 
 Mr. Norman's mastery of his particular field has 
 shown him how commonly both writers and prac- 
 tical men undertake discussion of some aspect or 
 aspects of the question of money without any ade- 
 quate grasp of knowledge and thought on one of 
 the most difficult subjects upon which either the 
 scholar or the statesman can enter. The whole 
 question of money is one not yet adequately studied 
 by even its gpreatest scholars, and but dimly seen 
 into, in respect of its wisest settlement, by the 
 most eminent statesmen. Bimetallism of the stan- 
 
dard, for example, is as much against nature as a. 
 calf with two heads, while bimetallism of money- 
 is as certainly necessary and practicable, properly- 
 planned and enacted, as gold and silver side by sider 
 in the mines and the arts, the mints and the mar- 
 kets of the world. But in what conference of econo- 
 mists, or in what house or senate, or by what writer 
 or speaker, have these two separate and opposite 
 bimetallisms been clearly put over against each 
 other, contrasted and understood, each in its true- 
 significance, so as to give to science and to finance- 
 absolute monometallism of the standard and ade- 
 quate bimetallism of money. 
 
 2. BIMETALLISM NOT RIGHTLY EXPLAINED. 
 
 Upton's excellent "Coin Catechism" speaks of 
 " Free Coinage or Bimetallism," making the last. 
 term mean the same as the first, and says that ' ' the 
 fact that Bimetallism has been tried by nearly- 
 every nation of the world and abandoned as imprac- 
 ticable should keep the United States from any- 
 such folly as attempting its restoration througk 
 any scheme." * This refers, of course, to bimet- 
 allism of the standard, and it is, for what it has in_ 
 view, a perfectly just statement. But it has the 
 very grave defect of appearing to assume that there 
 can be no other bimetallism than that which it con- 
 demns. It takes no thought of a desirable and 
 wise, a safe and necessary, bimetallism of money. 
 Yet this is, in fact, the only real practicable bimet- 
 allism, for the simple reason, as our review of the-. 
 
 * Pp. 28, 96. 
 
history will show, that under the double standard 
 system, that one of the two metals which is cheap- 
 est in the market takes the whole of the money 
 field, and the other, simply because it is worth 
 more as merchandise than as monej', entirely leaves 
 the field, and there is monometallism of money, 
 actual and practical monometallism, in spite of the 
 nominal bimetallism. 
 
 3. SHAW'S "HISTORY OF CURRENCY." 
 
 Mr. W. A. Shaw's " History of Currency, 1252- 
 i8g4., ' ' places him in the very front rank of authori- 
 ties on the subject of money. His work is perfectly 
 invaluable for his story of what befell the great 
 countries of the world under the vain attempt which 
 they made to use both silver and gold as standard 
 money, and how they were all driven to gold as the 
 better metal for money, and as the sole standard ; 
 and in order to have silver also, as a safe and secure 
 money, were compelled to put it into a secondary, 
 subsidiary position, as under-standard money, of 
 limited tender, and upon fiat parity with gold. 
 
 But Mr. Shaw's conceptions, thoroughly sound 
 as they are, keep to a certain extent the old point 
 of view, under which money and standard meant 
 the same thing. Thus, he designates as "mono- 
 metallic" the ideal monetary system, and yet 
 describes it as "one in which a single metal is made 
 the legal tender, and a second or third metal bound 
 to it in a hard-and-fast, subordinate relationship," 
 — an arrangement which secures bimetallism of 
 money, under monometallism of the standard. 
 
 And, again, Mr. Shaw says that the main basis 
 
of the truest modern currenoy system is these two 
 ideas thoroughly seized and put in practice, — 
 (i) the idea of limiting the tender of the secondary 
 money, so that it shall remain strictly subsidiary ; 
 and (2) the idea of issuing fractional money on a 
 basis of real value distinctly lower than the face 
 value. These two ideas, as thus stated, do not 
 quite express the basis of the truest modern cur- 
 rency. In that basis the secondary money, — our 
 silver dollar for example, — must be, precisely the 
 same as fractional money, on a basis of real value 
 distinctly lower than the face value; it must be 
 subsidiary. 
 
 4. white's "money and banking." 
 
 Another work of superlative merit, and one thor- 
 oughly fitted to serve as a handbook for every class 
 of readers, — Mr. Horace White's " Money and Bank- 
 ing : Illustrated by American History," — comes 
 short to a certain extent in its defining conceptions, 
 either stated or assumed. The title of the first 
 chapter, " Money a Commodity," conveys an error. 
 Money is never a commodity ; a commodity is never 
 money. Gold may be a commodity, or it may serve 
 as money when properly designated to that service. 
 The commodity, gold, not made money, may pass 
 instead of money, quite as money would, but that 
 does not make it money. Coined and issued gold 
 may be both money and a commodity. If it is at 
 all over-value coin, it will work as a commodity 
 only, and will not work as money. The market 
 will take it all for what it is worth to trade in. 
 The same is true of silver. The breakdown of sil- 
 
ver as standard money has resulted very largely 
 from the fact that it has so often, and through so 
 long periods, had more value as metal than as 
 money, with the result that trade in it as a com- 
 modity wholly removed it from the field of money. 
 As soon as the modern world began to understand 
 how the double standard involved failure of the 
 under-valued metal to stay in use as money, care 
 was taken that this metal should be silver rather 
 than gold, so that silver was deliberately let go 
 rather than let gold go. In the new silver period, 
 silver has been declining in value so steadily as to 
 create the instant risk that under a ratio true to the 
 market to-day, it would be down below that ratio 
 to-morrow, and would thus cause a loss of gold, and 
 leave only silver as money. It is this change in 
 silver which has made it necessary to have either 
 the gold standard with the silver subsidiary, or 
 silver money only and no gold. 
 
 It is quite right to bring out clearly that money, 
 good real money, requires something which has 
 value as a commodity, and which may be, in great 
 part at least, or in some properly designated part, 
 intrinsically worth what it is to pass for ; but it 
 must be no less something meeting other conditions 
 of money, such as common occurrence and abund- 
 ance, and of a relatively steady and even value. 
 
 And the new ideas of money contain nothing 
 more important than the principle that while stan- 
 dard money of gold should be of full intrinsic value, 
 worth exactly as much, therefore, as a commodity 
 as it is as money, any other money placed under 
 this standard, as silver, and notably the amount of 
 
silver which adequate bimetallism of money calls 
 for, must in no case figure as commodity at more 
 than about nine-tenths of its face value as money, 
 but must be to at least about one-tenth fiat, repre- 
 sentative, payable-in-gold, value, in order that 
 there may be no danger of its taking to itself wings 
 of real value, by rise in the market price of the 
 material, and flying away from the field of money 
 to the market for commodities, — as in 1873 Ameri- 
 can silver had done for forty years. Commodity, in 
 fact, is never money until it is properly made 
 money ; and we have learned that the proper mak- 
 ing of gold into standard money leaves it of full 
 value as commodity, while the proper making of 
 silver into money never does this. 
 
 Mr. White, as will be explained a little further 
 on, has a good deal to say about commodities being 
 made money, when they were in fact traded in by 
 way of regulated barter, with the express purpose 
 of avoiding the use of money. 
 
 And as perhaps the ablest American advocate of 
 the gold standard, and of gold as money, money 
 equally good as commodity or as money, Mr. White 
 leaves the whole matter too much as though the 
 question of gold and the question of money were 
 the same, and silver need not be taken into account. 
 He has, perhaps, not said his last word upon the 
 use of silver as money; and he certainly has not 
 said too much in advocacy of the gold standard ; 
 yet, beyond a question, it is money of both gold 
 and silver that we need to know about to-day, and 
 to know all that we can know, whether the history 
 of money in all its kinds, or the judgment upon 
 
3noney, which is to make the future, not only of 
 money but of the vast interests depending upon it. 
 
 5. DR. FRANCIS A. WALKER ON MONEY. 
 
 Mr. Norman, to whose work reference has been 
 made above, makes this declaration : 
 
 " I am under the profound conviction that the 
 world, at present, has no science of money, and 
 that it is a disgrace to science and common sense 
 that there is no safe guide to what money is and 
 how it does its work." 
 
 Referring to F. A. Walker's "Money, Trade, and 
 Industry, " Mr. Norman says, that while it was recom- 
 mended to him by Mr. Stanley Jevons as the best 
 book on money, he not only found it lamentably 
 disappointing,, but felt compelled to pronounce 
 lATalker's views the unsoundest which have been 
 .generally accepted since Locke's time ; and this, 
 Although the work is an accepted text-book in Eng- 
 lish institutions of learning.* 
 
 There is but too much reason for Mr. Norman's 
 severe judgment. Walker pronounces money ' ' that 
 which passes freely from hand to hand throughout 
 the community in final discharge of debts and full 
 payment for commodities, being accepted equally 
 
 *" The writer has recently read thirty definitions of money in that 
 number of English and American Encyclopaedias and Dictionaries. 
 In his opinion the unsoundest of them all is in the Encyclopaedia 
 Britannica of 1883, because it contains Professor F. A. Walker's 
 <iefinition of money, which embraces everything that passes from 
 hand to hand — such as credit instruments — and facilitates the 
 interchange of commodities, properties, etc. This definition is a 
 dangerously specious one, and appears to have enthralled most of 
 the younger political economists of the world." Norman: Com- 
 plete Guide, pp. 103, 104. 
 
8 
 
 ■without reference to the character or credit of the 
 person who offers it, and without the intention of 
 the person who receives it to consume it or enjoy 
 it or appl}'^ it to any other use than in turn to tender 
 it to others in discharge of debts or in payment for 
 commodities. ' ' 
 
 The fault of this definition is that it tells certain 
 things which are true about money without any 
 allusion to the things which make true money. It 
 deals with superficial facts of money, but does not 
 touch the fundamental facts of money at all. It is 
 an entirely worthless definition for purposes of 
 science, although a very good statement of what in 
 general money serves for. 
 
 One or two illustrations will expose the defect of 
 Walker's attempt to define money. In a Chinese 
 community the supposititious drug known as gin- 
 seng, and ignorantly held to be worth many times 
 per ounce the value of gold, would pass freely from 
 hand to hand in discharge of debt and payment for 
 commodities. But that would not make it money. 
 It would still remain a supposititious drug of no real 
 medical value, and current only in consequence of 
 the ignorance and superstition of the Chinese. 
 
 And if we take the example of true money in 
 gold, it may be received, and often is received, by 
 those who intend to consume it in the melting-pot, 
 or to hoard it as a store of value instead of them- 
 selves tendering it again as it was tendered to 
 them. In such case, according to Walker, the gold 
 coins of true value and character as money are yet 
 not money, because of the accidental use to which 
 the)' are to be put. 
 
9 
 
 Norman correctly points out that Locke made an 
 unfortunately superficial statement when he defined 
 intrinsic value as that estimate which common 
 consent has placed upon the thing valued. It is 
 but too plain that common consent, at any time or 
 any place, may make a wrong estimate of value, 
 and that even an approach to a true estimate cannot 
 be made without looking farther, both as respects 
 place and time; and in thus looking farther we 
 come upon the fact that common consent in various, 
 places and at various times changes differently for 
 different things. If, for instance, we take such 
 substances as gold, silver, copper, platinum, nickel, 
 etc., we see that as we pass down the list the diffi- 
 culty of trusting common consent at any moment 
 or at any place increases. If, therefore, we seek 
 to avoid this difficulty to the utmost extent possible 
 in the nature of things, we must stop upon the 
 substance at the top of the list. We cannot, there- 
 fore, define money, as Walker does, as anything 
 that passes for money. The definition, in fact, is 
 not only not science, but it is economic error of an. 
 extreme type.* 
 
 *What may be called learned inaccuracy, able and scholarly- 
 error, appears most frequently in the saying of something strikingly 
 true by way of definition, which yet wholly fails to define. The 
 Encyclopsedia Britannica, made in great part by authors of distinc- 
 tion, without any special knowledge of the Encyclopaedist's art, is- 
 rich to a degree in definitions which do not define. Dr. Walker's 
 definition of money is one of the ablest of these, and one of the 
 worst. 
 
 It would be hard to be more learnedly wrong. What constitutes- 
 money, what makes it money, is one thing, or set of things; what 
 money will do is another thing, or set of things, which may not 
 help to make it money. 
 
10 
 
 CHAPTER II. 
 
 THE EARLIEST ORIGIN AND IDEA OF MONEY. 
 6. IMPORTANCE OF THE STORY OF MONEY. 
 
 The first great necessity for an outline Science 
 of Money is a plain story of what in nature and in 
 idea money is, on the basis of gold monometallism 
 of the standard and gold and silver bimetallism of 
 money; how gold "got there," as the natural and 
 necessary standard, and how best to yoke silver 
 with gold, that they may together meet all the 
 demands of mankind for money, money of account 
 and security, and money of currency and credit; 
 gold standard money and both gold and silver cur- 
 rency money. 
 
 7. EARLIEST FACTS OF MONEY. 
 
 Even the earliest facts of the story of money show 
 how gold came naturally to its place, and with 
 what idea both gold and silver came into use as 
 money. Recent books full of new knowledge of 
 Babylonia and of Egypt, in the dawn of history 
 forty centuries before the era of Christ, enable us 
 to make an exact and conclusive statement of the 
 true origin and the fundamental idea of money. 
 If, for example, we turn to Maspero's magnificent 
 book on " The Dawn of History," in which he reports 
 the earliest facts both of Egypt and of Babylonia, 
 and to the equally admirable book of Erman on 
 Egypt, we may easily glean the facts which reveal 
 in the clearest manner how money originated, and 
 
II 
 
 liow barter transactions became cash transactions ; 
 always and everywhere, in the long run, tending 
 to a gold basis. 
 
 8. BUSINESS BY BARTER IN EGYPT. 
 
 Business, M. Maspero tells us, was mostly carried 
 on in early Egypt by barter. Purchasers brought 
 with them some product of their toil, — a new tool, 
 a pair of shoes, a reed mat, pots of unguents or 
 cordials; often, too, rows of cowries and a small 
 box full of rings, each weighing a "tabnu" (91 to 92 
 grammes), made of copper, silver, or gold, all des- 
 tined to be bartered for such things as they needed. 
 
 When it came to be a question of some large ani- 
 mal or of objects of considerable value, it was 
 necessary to be agreed not only as to the amount, 
 but as to the nature of the payment to be made, 
 and to draw up a sort of invoice, or, in fact, an 
 inventory, in which beds, sticks, honey, oil, pick- 
 axes, and garments all figure as equivalents for a 
 bull or a she ass. Smaller retail bargans did not 
 damand so many or such complicated calculations. 
 
 Exchanging commodities for metal necessitated 
 two or three operations not required in ordinary 
 barter. The rings or thin bent strips of metal 
 which formed the " tabnu " and its multiples, did 
 not always contain the regulation amount of gold or 
 silver, and were often of light weight. They had 
 to be weighed at every fresh transaction in order 
 to estimate their true value. The weighing of 
 rings is often represented on the monuments from 
 the eighteenth dynasty onward; not on the bas- 
 reliefs of the Ancient Empire. 
 
12 
 
 The rings of gold in the museum at Leyden, 
 which were used as a basis of exchange, are made 
 on the Babylonian pattern, and belong to the Asi- 
 atic system. 
 
 Erman remarks on barter among the Egyptians : 
 "All the trade of Egypt was carried on by barter, 
 and nothing was given in payment except goods 
 or produce. 
 
 "It seems strange to us of the modern worl4 that 
 a nation should hold markets, sell cattle, lend on. 
 interest, pay salaries, and collect taxes without 
 even knowing the use of small coin. 
 
 "But this is really not so difificult as we might 
 imagine, and the Mahommedans of the negro coun- 
 tries in Africa may be cited as proof that a com- 
 paratively high standard of civilization is compat- 
 ible with trade by barter. 
 
 "Barter of this kind never indeed remains purely 
 as such for any length of time. The exigencies of 
 trade soon require that some object should be set 
 aside as an arbitrary standard by which the value 
 of the various objects for exchange can be measured 
 and compared. 
 
 "Thus, at the present day in the Soudan, if a 
 man buys gunpowder, he may, perhaps, pay the 
 merchant for it in fowls, but in order to know how 
 much powder the one has to give, and how manj'- 
 fowls the other has to pay, they both reckon the 
 present market value of their goods in a third com- 
 modity in common use, perhaps in amber beads. 
 
 "They may not make use of any amber beads in 
 payment, or merely of a few to adjust some slight 
 difference in value, but the beads have become an. 
 
13 
 
 arbitrary measure of value in the market by which 
 the price of goods can be reckoned. 
 
 "We see that in this case amber beads really play 
 the part of money. 
 
 ' ' Measures of value of this kind are still common 
 in Africa, and the merchants who carry on trade 
 with the interior have to acquire exact knowledge 
 of the usages of the various markets and towns. 
 
 "In one place beads may be used, in another 
 blocks of salt, in another iron spades or Styrian 
 razors, or, perhaps, Merikanis, i. e., pieces of bad 
 American cotton goods of a certain size. ' ' 
 
 9. USE OF GOLD IN EGYPT. 
 
 In his "Manual of Egyptian Archceology," Maspero 
 sgeaks especially of the use of gold in Egypt. The 
 Egyptians were great lovers of jewelry. Not con- 
 tent to adorn themselves when living with a pro- 
 fusion of trinkets, they loaded the arms, the fingers, 
 the neck, the ears, the brow, and the ankles of their 
 dead with more or less costly ornaments. The 
 quantity thus buried in tombs was so considerable 
 that even now, after thirty centuries of active 
 search, we find from time to time mummies which 
 are, so to say, "cuirassed in gold." 
 
 The Egyptians, says Maspero, classified metals 
 under two heads, namely, the noble metals, as gold, 
 electrum, and silver, and the base metals, as copper, 
 iron, lead, and, at a later period, tin. Erman men- 
 tions the interesting fact that the two wonderful 
 papyri, which are famous as the oldest maps in the 
 world, relate to the gold mines of Sety I, and his 
 son Rameses II., the second and third kings of the 
 
14 
 
 19th dynasty, which Rameses I. founded about 
 B. C. 1400. Erman says of gold as an article of 
 commerce in Egypt : 
 
 "For commercial purposes gold was as a rule 
 formed into rings, which seem to have been of very 
 variable thickness, with a uniform diameter of 
 about five inches. Naturally these rings were not 
 taken on trust, and whenever they were paid over, 
 we see the master-weigher and the scribes busy 
 weighing them and entering the ascertained weight 
 in their books. We hear of enormous sums chang- 
 ing hands in this way. ' ' 
 
 10. SILVER IN EGYPT. 
 
 A remarkable illustration of the working of natu- 
 ral law, whether in temporarily or in permanently 
 making the place of a precious metal, appears in 
 the story of silver in early Egypt. Erman tells it 
 as follows : 
 
 "The Egyptians regarded silver as the most 
 valuable of all precious metals. It stands before 
 gold in all the old inscriptions, and in fact in 
 the tombs silver objects are much rarer than gold 
 ones. 
 
 " This curious circumstance admits of a very 
 simple explanation : no silver was to be found in 
 Egypt. The ' White, ' as silver was called, was 
 probably imported from Cilicia; the Phoenicians 
 and Syrians carried on this trade in the time of the 
 eighteenth dynasty (under which the New Empire 
 began at Thebes). 
 
 ' ' Either the brisker trade in this metal, or the 
 discovery of new mines, led to a fall in the value 
 
15 
 
 of silver under the New Empire, for later texts 
 usually mention gold first in the same way that 
 we do." 
 
 II. A GOLD-SILVER COMPOUND. 
 
 In Egyptian use, says Maspero, the gold was 
 often amalgamated with pure silver. When amal- 
 gamated to the extent of twenty per cent, it changed 
 its name and was called electrum (asimu). This, 
 electrum was of a fine light yellow color. It paled 
 as the proportion of silver became larger, and at 
 sixty per cent, it was nearly white. The silver 
 came chiefly from Asia, in rings, sheets, and bricks 
 of standard weight. The gold and electrum came 
 partly from Syria in bricks and rings ; and partly 
 from the Soudan in nuggets and gold dust. The 
 Egyptians, says Maspero, struck neither coins nor 
 medals ; but with these exceptions made the same 
 use of the precious metals as we do ourselves. 
 Erman says of this gold-silver compound : 
 ' ' In addition to gold and silver another precious 
 metal, the usm, is frequently mentioned. Lepsius 
 recognized this as electron, the mixture of gold and 
 silver. The proportion of the gold to silver was 
 apparently that of two to three. Under Thothmes 
 III. an official receives a 'great heap ' of electron, 
 which, if we may believe the inscription, would be 
 woith at least ;£'2oo,ooo — $1,000,000." 
 
 12. EARLIEST MONEY OF EGYPT COPPER. 
 
 A curious fact in the very earliest history of 
 money is the use of copper for money, while gold 
 and silver had not yet come to serve that purpose,. 
 
i6 
 
 but were exchanged as commodities. The fact 
 seems to have been that small money was far the 
 most needed, and that it sufficiently aided the ordi- 
 nary transactions by barter. Maspero says of this 
 use of copper, not as coins, but in small bits 
 unstamped, and current by weight : ' ' We must, per- 
 haps, agree with Lenormant in his conclusion that 
 the only kind of national metal of exchange in use 
 in Egypt was a copper wire or plate bent thus S- 
 Tjut more flat. ' ' 
 
 And Erman again tells us : 
 
 ' ' Under the New Empire in Ancient Africa (the 
 Theban Empire in Egypt), a copper piece of one 
 "Uten, i.e., of ninety-one grammes, was in use as a 
 measure of value. This copper piece was in the 
 form of a spiral wire. (The word uten is read by 
 Maspero tabnu.) 
 
 13. BABYLONIAN USE OF PRECIOUS METALS. 
 
 The Babylonians, says Maspero, like the Egyp- 
 tians, were unacquainted with the use of money, 
 but from the earliest times the employment of 
 precious metals for purposes of exchange was prac- 
 ticed among them to an enormous extent. 
 
 Though copper and gold were both used, silver 
 was the principal medium in these transactions, 
 •and formed the standard value of all purchasable 
 objects. It was never cut into flat rings or twists 
 of wire, as was the case with the Egyptian 
 "tabnu." It was melted into small unstamped 
 ingots, which were passed from hand to hand by 
 weight, being tested in the scales at each 
 "transaction. 
 
17 
 
 ' ' To weigh' was in the ordinary language the 
 equivalent for " payment in metal," whereas to 
 measure denoted that the payment was in grain. 
 The ingots for exchange were, therefore, desig- 
 nated by the name of the weights to which they 
 corresponded. The lowest unit was a shekel, 
 weighing on an average nearly half an ounce, sixty 
 shekels making a mina, and sixty minas a talent. 
 It is a question whether the Babylonians possessed 
 in early times, as did the Assyrians of a later 
 period, two kinds of shekels, and minas, one heavy 
 and the other light. 
 
 14. AFRICAN COWRIES AS MONEY. 
 
 The cowries mentioned by Maspero as among 
 the objects traded in by the early Egyptians, and 
 passed from hand to hand in transaction of barter, 
 became at an indefinitely remote date, first an 
 article of common adornment with universal intrin- 
 sic value, a kind of shell jewelry, and on the basis 
 of this universal value, a low-culture African cash 
 — perhaps the oldest cash in the world. 
 
 ' ' Cowry " or " cowrie ' ' is the name of the shell 
 of a family of Molluscs known as the Cyprceida. 
 Upwards of one hundred species are known and 
 they are widely distributed over the world in the 
 shallow water along the shores of the sea. The 
 best known is the money cowry or Cyprcea moneta. 
 One authority describes this as "A small shell 
 about half an inch in length, white and straw- 
 colored without and blue within, which derives its 
 distinctive name from the fact that in various coun- 
 tries it has been employed as a kind of currency." 
 2 
 
i8 
 
 Another authority says: — "A small yellowish- 
 white shell with a fine gloss, used by various peo- 
 ples as money, " It is most abundant in the Indian 
 Ocean, on the coasts of Africa and India and those 
 of the East India Islands. It was used in China 
 for money before the introduction of metal money. 
 In Bengal its use lasted until recent times and 
 called for one hundred and fifty thousand dollars 
 worth every year. In other parts of India it is 
 still in use, but its widest employment is among 
 the natives of Africa. On the western coasts of 
 Africa, where it is the usual money tender, the 
 shells are fastened together in strings of forty or 
 sometimes of one hundred each ; fifty of the smaller 
 strings and twenty of the larger, or two thousand 
 cowries, representing a dollar ; each shell therefore 
 representing one-twentieth of a cent. Even among 
 tribes who do not recognize cowries as money, they 
 still have a value as fashionable decorations. 
 
 15. INDIAN WAMPUM MONEY. 
 
 The wampum of the Indians of North America 
 consisted of strings of small shell heads which were 
 used both as money and for ornament. It was of 
 two kinds, white and dark purple or black. When 
 first known to the English, six of the white or 
 three of the black were reckoned equal to a penny, 
 or two cents. The strings of shells, besides passing 
 as money, were worn as bracelets and necklaces 
 and wrought into belts of curious workmanship. 
 The word wampum meant white, so that the name 
 of the Indian money was the White, referring to 
 the more common type of beads. 
 
19 
 
 The full name of the common Indian money was 
 wampumpeag, meaning white strung beads. The 
 more rare variety was much less used. The name 
 of the first, which was far the most common, became 
 the ordinary name for money under the abbreviated 
 form of wampum. The black variety, which was 
 in fact dark purple, passed as of double value 
 because it was less common and was more esteemed 
 for ornament. 
 
 l6. INTRINSIC VALUE THE BASIS OF MONEY. 
 
 These extremely primitive examples of money 
 conclusively illustrate the fact that intrinsic value 
 is everywhere and always the true basis of money. 
 It was an especially pretty shell which became the 
 money cowry, and in the same way a manufactured 
 shell bead, of two kinds, differing in intrinsic value, 
 became the Indian Wampum. 
 
 Mr. Jevons, in his able book on money, says on 
 this point : 
 
 "A passion for personal adornment is one of the 
 most primitive and powerful instincts of the human 
 race, and as articles used for such purposes would 
 be durable, universally esteemed, and easily trans- 
 ferable, it is natural that they should be circulated 
 as money. The wampumpeag of the North Ameri- 
 can Indians is a case in point, as it certainly served 
 as jewelry. It consisted of beads made of the ends 
 of black and white shells, rubbed down and pol- 
 ished, and then strung into belts or necklaces, 
 which were valued according to their length and 
 also according to their color and luster, a foot of 
 black peag being worth two feet of white peag. 
 
20 
 
 Exacth' analogous to this North American currency 
 is that of the cowry shells used as small money in 
 British India, Siain, the west coast of Africa, and 
 elsewhere. Among the Fijians whales' teeth served 
 in the place of cowries, and white teeth were 
 exchanged for red teeth somewhat in the ratio of 
 shillings to sovereigns.'* 
 
 17. REGULATED BARTER WITHOUT MONEY. 
 
 The principle which produces money has been 
 very widely acted on in what may be called regu- 
 lated barter. A great variety of articles of well- 
 known intrinsic value have been, at different times 
 and in different places, used as we use money. 
 Furs or skins were thus employed in many ancient 
 nations, and again in recent times in the traffic of 
 the Hudson's Bay Company with the North Ameri- 
 can Indians. In that early stage of society repre- 
 sented in the poems of Homer, the extent to which 
 cattle were a common possession led to estimating 
 values in oxen; thus the shield of Glaucos was 
 valued at one hundred oxen ; that of Diomed, at 
 nine ; a tripod given as the first prize for wrestlers, 
 at twelve; and a woman captive, guaranteed to 
 make a good hired girl, at four. The Latin word 
 pecunia, meaning money, is derived from the word 
 pecus, meaning cattle. Our v/ord fee is from the 
 Anglo-Saxon word feoh, which means both cattle 
 and money. In the ancient German codes of law 
 fines and penalties were stated in terms of live 
 stock. In countries where slaves are a common 
 
 * Money and the Mechanism of Exchange, p. 24. 
 
21 
 
 and valuable possession they have been in all ages 
 counted as we count money. Wheat, barley and 
 oats have been so counted in Europe and Indian 
 corn in America. Olive oil has been so counted in 
 countries where it is a common article of produce 
 and consumption. In Central America and Yucatan 
 cocoanuts have been used as we use money ; so also 
 almonds in European countries where they are 
 grown ; but with great chances of variation in their 
 nominal value according to their abundance or 
 scarcity in any 3'-ear. In Virginia, in 1618, the fiat 
 of the governor made a pound of tobacco tender 
 equal to three shillings. Young women imported 
 as wives for the settlers were disposed of at one 
 hundred pounds of tobacco each, and later one hun- 
 dred and fifty pounds. Grain was made legal tender 
 in Massachusetts in 1641. As late as 1732 Maryland 
 made corn and tobacco legal tender. Alpine vil- 
 lages in Switzerland have used eggs as we use 
 money, and Newfoundland has used dried cod fish. 
 In many countries, remote from civilization, pieces 
 of cotton cloth have taken the place of money. 
 
 But in all cases in which anything of this kind 
 has been done, the invariable rule has been accep- 
 tance of some convenient article or articles to be 
 used as we use money, on the basis of intrinsic 
 value. Even where there have been touches of 
 fiatism there has been no departure from the prin- 
 ciple of employing articles in place of money accord- 
 ing to their intrinsic value. And it is entirely a 
 mistake to represent that these articles of barter, 
 made to serve to some extent as money serves, 
 were money. They were simply articles of barter, 
 
22 
 
 handled somewhat as we handle money. The wam- 
 pum of the Indians and the cowries of Africa may 
 be taken as savage money. To the savage mind the 
 intrinsic value of the beads and the shells was like 
 that of the precious metals to higher culture. They 
 thus had a universally accepted real though very 
 low value ; they fulfilled all the offices of money ; 
 and they promoted universal resort, or at least very 
 considerable resort, to what we should call cash 
 transactions rather than barter. The fatal defect 
 of cash of this kind was in the beads and the shells 
 entirely lacking real intrinsic value, except among 
 savages at a very low level of culture. 
 
 l8. ABRAHAM'S CASH TRANSACTION IN REAL ESTATE. 
 
 For another glimpse of the earliest history of 
 money we may turn to the Biblical book of Genesis. 
 We read of Abraham, after he had left " Ur of the 
 Chaldees, ' ' the Babylonian city of his nativity near 
 the mouth of the Euphrates, and had lived a long 
 time, first at Haran on the upper Euphrates and 
 later in Egypt, that when he came to go "up out 
 of Egypt, he, and his wife, and all that he had," 
 he was ' ' very rich in cattle, in silver, and in gold ; ' ' 
 and when, at a considerably later date, Sarah hav- 
 ing died in the Land of Canaan, Abraham wished 
 to purchase " a possession of a burying place," 
 there took place a transaction in real estate of 
 which the following is the singularly interesting 
 story : 
 
 "And Abraham rose up before his dead and spake 
 unto the children of Heth saying, I am a stranger 
 and a sojourner with you ; give me a possession of 
 
23 
 
 a burying place witli you that I may bury my dead 
 out of my sight." 
 
 "And the children of Heth answered Abraham 
 saying unto him, Hear us, my lord; thou art a 
 prince of God among us : in the choice of our sep- 
 ulchres bury your dead ; none of us shall withhold 
 from thee his sepulchre, but that thou mayest 
 bury thy dead." 
 
 "And Abraham rose up, and bowed himself to 
 the people of the land, to the children of Heth. 
 And he communed with them, saying, If it be your 
 mind that I should bury my dead out of my sight, 
 hear me, and intreat for me to Ephron the son of 
 Zohar, that he may give me the cave of Machpe- 
 lah which he hath, which is in the end of his field ; 
 for the full price let him give it to me in the midst 
 of you for a possession of a burying place." 
 
 ' ' Now Ephron was sitting in the midst of the 
 children of Heth : and Ephron the Hittite answered 
 Abraham in the audience of the children of Heth, 
 even of all that went in at the gate of his city, say- 
 ing. Nay, my lord, hear me : the field give I thee, 
 and the cave that is therein I give it thee ; in the 
 presence of the sons of my people give I it thee : 
 bury thy dead." 
 
 "And Abraham bowed himself down before the 
 people of the land. And he spake unto Ephron in 
 the audience of the people of the land saying, but 
 if thou wilt I pray thee hear me : I will give the 
 price of the field ; take it of me, and I will bury 
 my dead there. ' ' 
 
 "And Ephron answered Abraham saying unto 
 Mm, My lord, hearken unto me : a piece of land 
 
24 
 
 ■worth four hundred shekels of silver, what is that 
 betwixt me and thee? Bury therefore thy dead." 
 
 "And Abraham hearkened unto Ephron: and 
 Abraham weighed to Ephron the silver which he 
 had named in the audience of the children of Heth, 
 four hundred shekels of silver, current with the 
 merchant. So the field of Ephron which was in. 
 Machpelah, which was before Mamre, — the field, 
 and the cave which was therein, and all the tree& 
 that were in the field, that were in all the border 
 thereof round about, — were made sure unto Abra- 
 ham for a possession, in the presence of the chil- 
 dren of Heth, before all that went in at the gate of 
 his city. ' ' 
 
 This transaction involved payment by Abraham, 
 of something less than two hundred ounces of 
 silver, and the account is conclusive that the silver 
 was current, not by any fiat value of the shekel, 
 but by weight. The word ' 'money, ' ' which appears 
 in our English version, is not in the original. It 
 is by no means certain that the shekels of silver 
 were then known as money. But there was an 
 approach to it in the fact that they were in use as 
 we use money, and were "current with the mer- 
 chant." 
 
 19. FIRST PLACE GIVEN TO GOLD. 
 
 In the next passage of Abraham's life we find 
 him sending a confidential servant, "the elder of 
 his house, that ruled over all that he had," to 
 Haran on the Euphrates, to procure from their 
 kindred a wife for his son Isaac. The story relates 
 how the man found Rebekah, a cousin of Isaac and 
 
a " damsel very fair to look upon," among the 
 women who had gone to the well, on the outside 
 of the city, to draw water ; and how he presented 
 to Rebekah "a golden ring of half a shekel weight 
 and two bracelets for her hands of ten shekels 
 weight of gold. ' ' The man further related to the 
 family of Rebekah that his master possessed "flocks 
 and herds, and silver and gold, and men servants 
 and maid servants, and camels and asses : ' ' and he 
 " brought forth jewels of silver, and jewels of gold, 
 and raiment, and gave them to Rebekah." 
 
 There seems to be decisive evidence here, not 
 only of the possession by Abraham of gold as well 
 as silver, but of the use of gold in preference to 
 silver. The ring and the bracelets given to 
 Rebekah were of gold, and their value was indi- 
 cated by their weight. Whatever may have been 
 the occasional preference of silver, the final choice 
 everywhere of a precious metal of the highest 
 intrinsic value, both for ornament and as a repre- 
 sentative of value, gave gold a place which silver 
 did not approach. It had been so for at least a 
 thousand, and perhaps two thousand, years before 
 the time of Abraham. The city of Abraham's 
 nativity, " Ur of the Chaldees, ' ' was the Liverpool 
 or New York, or we might more exactly say the 
 Chicago, of that oriental world. Other cities more 
 ancient and farther east had risen earlier as seats 
 of ancient Babylonian culture. Ur was a compara- 
 tively new city at the extreme west of southern 
 Babylonia. Its wealth and culture were largely 
 represented in the art of which rings and bracelets 
 of gold are a product. Those rings and bracelets. 
 
26 
 
 were a type of value, and of value honestly esti- 
 mated by true weight in the balance. 
 
 20, THE GOLD WEDDING RING. 
 
 The gold ring on the finger of the bride to-day 
 stands for not less than six thousand years of the 
 common opinion of mankind in favor of gold as a 
 representative of value, of real intrinsic value, 
 whether for purposes of ornament and of many 
 varieties of artistic decoration, or for the purposes, 
 which we include under the name of money. No 
 doubt it might have been otherwise. There might 
 have arisen everywhere, as there did arise at an 
 early period in Egypt, a preference for silver, a 
 higher estimate of the white metal above the yellow, 
 but the conviction of mankind did not take that 
 course. In proportion to the progress of knowl- 
 edge and of culture, human thought, and feeling, 
 and practice, definitely accepted gold as for all 
 higher purposes very greatly preferable to silver. 
 We may imagine the wedding ring and the bridal 
 bracelets, not to speak of the setting of diamonds 
 and other precious stones, done in silver instead of 
 gold; but, does anybody want it? would anybody 
 accept it? Suppose we give the jeweler an order to 
 make a number of dollars worth of gold — we will 
 say seven, the sacred number of tradition — into a 
 ring ; and to expend the same number of dollars in 
 silver and make this into a ring. Can we imagine a 
 single instance in which the silver ring would be 
 accepted instead of the gold? Even the mummies 
 of Egypt are found, as Maspero tells us, ' ' cuirassed 
 in gold. " And gold it will be to the end of time. 
 
27 
 21. THE MOSAIC SANCTUARY USE OF GOLD. 
 
 The directions in the book of Exodus, and the 
 account of what was done pursuant to them, for 
 making a tabernacle sanctuary, show a supreme 
 estimation put upon gold, while silver and brass 
 figured together for wholly secondary uses. The 
 burnished brass in fact seems to have been esteemed 
 next to gold. In making the tabernacle, the forty- 
 eight boards, each a cubit and a half wide and ten 
 cubits long, were overlaid with gold. The fifty 
 clasps for the tabernacle curtains were of gold, 
 while those of a tent stretched over the tabernacle 
 were of brass. The only use of silver was in sock- 
 ets into which the ends of the boards were fitted. 
 The acacia wood altars were overlaid, that of 
 incense with gold, and that of burnt offering with 
 brass. All the fixtures of the latter, and the vessels 
 used with it, were of brass ; and all those of the 
 former of gold. In constructing a court about the 
 tabernacle the pillars rested in sockets of brass, and 
 had hooks and fillets of silver. Of brass were all 
 the pins used, and all the instruments required for 
 the tabernacle service. The ark of acacia wood 
 wa? overlaid with pure gold within and without. 
 All its trimmings were of gold, and the staves used 
 in carrying it were overlaid with gold. The mercy 
 seat, or cover of the ark, was of pure gold, and the 
 cherubim placed upon it facing each other, figures 
 symbolizing divinity, were of gold. The shew- 
 bread table was overlaid with gold ; all its fixtures 
 were of gold; and the bowls, flagons, spoons, and 
 dishes used with it were of pure gold. The great 
 
28 
 
 candlestick, upbearing seven lamps on its seven 
 branches, was ' ' the whole of it one beaten work of 
 pure gold." The breastplate and the ephod with, 
 their rings and chains, for the high priest, employed 
 in the making no metal but gold, and their precious 
 stones were all in settings of gold. Bells made of 
 gold hung from the skirts of the ephod, and on a 
 plate of gold upon the front of the turban were 
 graven the v/ords Holy to the Lord. The amounts 
 used of the three metals "in all the work of the 
 sanctuary, ' ' were, 29 talents and 730 shekels of gold j 
 100 talents and 1,775 shekels of silver (each of 100 
 sockets taking one talent) ; and 70 talents and 2,40a 
 shekels of brass. 
 
 22. THE GOLD 'of SOLOMON'S TEMPLE. 
 
 The use of gold by King Solomon, of magnificent 
 Hebrew memory, affords one of the most signifi- 
 cant historical illustrations of the law of value under 
 which gold commands respect far above every 
 other precious commodity. The marvelous "house 
 which King Solomon built for the Lord," of hewn 
 stone, and cedar, and gold, every part of the con- 
 struction-material made ready for its place and use 
 before it was brought, so that "there was neither 
 hammer, nor axe, nor any tool of iron heard in the 
 house, while it was in building, ' ' bore witness as 
 splendid as it was costly to the supreme estimate 
 naturally put upon gold. The most holy place 
 forming the rear third of the structure was wholly 
 "overlaid with pure gold." Moreover, we read: 
 
 " Solomon overlaid the house within with pure 
 gold ; and he drew chains of gold across before the 
 
29 
 
 most holy place; and lie overlaid it with gold. 
 And the whole house he overlaid with gold, until 
 all the house was finished; also the whole altar 
 that belonged to the most holy place he overlaid 
 with gold. And in the most holy place he made 
 two cherubim of olive wood, each ten cubits high. 
 , . . And the wings of the cherubim were 
 stretched forth, so that the wing of the one touched 
 the one wall, and the wing of the other cherub 
 touched the other wall ; and their wings touched one 
 another in the midst of the house; and he overlaid 
 the cherubim with gold. And the floor of the house 
 he overlaid with gold within and without. And 
 two doors of olive wood, carved with carvings of 
 cherubim and palm trees and open flowers, he 
 overlaid with gold. And [the great folding doors 
 of the temple itself, carved with cherubim and palm 
 trees and open flowers] he overlaid with gold fitted 
 upon the graven work." 
 
 ■ ' ' And Solomon made all the vessels that were in 
 the house of the Lord : the golden altar, and the 
 table whereupon the shewbread was, of gold ; and 
 the candlesticks, five on the right side, and five on 
 the left, before the most holy place, of pure gold ; 
 and the flowers, and the lamps, and the tongs, of 
 gold; and the cups, and the snuffers, and the 
 basons, and the spoons, and the firepans, of pure 
 gold; and the hinges, both for the doors of the 
 inner house, the most holy place, and for the doors 
 of the house, of the temple, of gold." 
 
30 
 
 23. SOLOMON SOLD BONDS AND BOUGHT GOLD. 
 
 The London of the Ancient East, a thousand 
 years before the Christian era, was the Phoenician 
 city of Tyre, the centre of a broadly advanced civil- 
 ization, and the seat of a rich commerce. The 
 Hebrew record tell us that Hiram, king of Tyre,, 
 "had furnished Solomon with cedar trees and fir 
 trees, and with gold, according to all his desire," 
 during twenty years, " wherein Solomon had built 
 the two houses, the house of the Lord and the 
 king's house; " and that "Hiram sent to the king 
 six score talents of gold. ' ' To pay for this gold 
 " King Solomon gave Hiram twenty cities in the 
 land of Galilee." As nearly as was possible for 
 that time Solomon sold bonds and bought gold ; and 
 when the bonds were due he paid with "cities in 
 the land of Galilee, ' ' which the story says so greatly 
 disgusted Hiram when he "came out from Tyre to 
 see the cities which Solomon had given him," that 
 "he called them the land of Cabul (Dirty)." 
 
 24. SOLOMON'S DEMONETIZATION OF SILVER. 
 
 We read also that "King Solomon made a navy 
 of ships in Ezion-geber, on the shore of the Red 
 Sea, in the land of Edom. And Hiram sent in the 
 navy his servants, shipmen that had knowledge of 
 the sea, with the servants of Solomon. And thej'- 
 came to Ophir, and fetched from thence gold, four 
 hundred and twenty talents, and brought it to King 
 Solomon." 
 
 And when the Queen of Sheba "came to Jerusa- 
 lem with a very great train, with camels that bore 
 spices, and very much gold, and precious stones, ' ' 
 
31 
 
 "she gave the king an hundred and twenty talents 
 of gold, and of spices very great store, and precious 
 stones." And "the weight of gold that came to 
 Solomon in one year was six hundred three score 
 and six talents of gold, beside the chapmen [bring- 
 ing gold], and the traffic of the merchants and of 
 all the kings of the mingled people, and of the 
 governors of the country. And King Solomon 
 made two hundred targets of beaten gold; 
 and three hundred shields of beaten gold. More- 
 over, the king made a great throne of ivory, 
 and overlaid it with the finest gold. And all King 
 Solomon's drinking vessels were of gold, and all 
 the vessels of the house of the forest of Lebanon 
 were of pure gold; none were of silver; it was 
 nothing accounted of in the days of Solomon. 
 . . . The king made silver to be in Jerusalem 
 as stones for abundance. ' ' 
 
 This depreciation of silver by reason of its abun- 
 dance, and preference, for all purposes of wealth 
 and richness, of gold, in consequence of the fact 
 that gold could be had, were the result of the natu- 
 ral operation of ordinary law. Nothing but extreme 
 rarity and very high cost can bring silver anywhere 
 near to gold in common estimation, and with an 
 ample supply of gold and extreme abundance of 
 silver, nothing can save the latter from being 
 thrown out as a metal highly valued by the side of 
 gold. 
 
 25. THE VULGAR DISPRAISE OF GOLD. 
 
 Among the most ignorant, or the most mendacious, 
 of human prejudices, is that which has been directed 
 against gold, as the most real and most esteemed 
 
32 
 
 article of wealth. Nothing else which is within 
 human reach so perfectly represents sure and 
 secure value. Precious stones, even the finest, 
 cannot be known for value by assay for purity and 
 by weight, but only by the opinion of experts, and 
 of the market. A hoard of diamonds valued to-day 
 at a million might prove ten years later, in expert 
 and market opinion, worth very much less than 
 that, especially if the occasion to realize their value 
 in money were sudden and peremptory. A state 
 treasury filled with diamonds at the cost of a hun- 
 dred millions in gold might not prove worth half 
 that for instant conversion into money. 
 
 The sureness and security of values in silver, 
 even to hold for a short time, and still more to carry 
 for an indefinite time, and to bring into use at any 
 sudden moment, do not approach, and cannot be 
 made to approach, the sureness and security of 
 values in gold. Values in silver may slump dis- 
 astrously. Values in gold will at the worst only 
 decline, and that moderately. For high value, 
 steadily maintained, and certainly known, gold is 
 out of reach above silver. 
 
 26. ANTI-GOLB FANATICISM. 
 
 The perverse ignorance of fanaticism, if it be not 
 the perverse mendacity of dishonesty, never went 
 more wide of the mark of truth than an orator of 
 silverism did when he said: "It has been well 
 said that gold in its last analysis is the sweat of the 
 poor and the blood of the brave. You can rob this 
 world of gold and put enough silver in the world 
 to make up for the loss of gold and commerce will 
 
33 
 
 move on, but rob this world of its silver, if you will, 
 and try to fill its place witb gold, and see how long 
 your system will stand. ' ' (W. J. Bryan, speech at 
 Syracuse, N. Y., Aug. 26, 1896.) 
 
 Gold in its last analysis is the most precious 
 product of nature, the richest material gift of the 
 Creator, and the commodity best representative of 
 high, steady, and sure value. A world without 
 silver would lack a most useful material for smaller 
 secondary money, but could easily enough find a 
 substitute in a mixture of gold and copper. With- 
 out gold the world would lack its supreme and most 
 useful precious substance and form of wealth, 
 the supreme stay and instrument of commerce, 
 and altogether the richest material of ornament 
 and art. 
 
 It is a hoodlum and rascal spleen which raises a 
 cry against wealth, and especially against gold as 
 the type of wealth, in terms of maudlin concern for 
 the poor, the toiling, and the suffering of mankind. 
 The mendacity of the complaint is not less than its 
 absurdity, in face of the universal dominance in 
 culture throughout the world, not indeed of per- 
 fect justice and kindness, but of an immensely 
 -developed and steadily gaining social order which 
 has perfect justice and kindness for its ideal. The 
 margin of wrong is not inconsiderable anywhere 
 that we scrutinize human developments ; but wealth 
 under its accumulated form, held in the grasp of 
 law, necessarily alive to wise self-interest, and 
 Tinder pressure of exceedingly strong agencies of 
 humanity and religion, follows lines of truth and 
 Tight quite as closely as any other form of the 
 3 
 
34 
 
 organic interests of mankind. If the enthusiasts, 
 not to say the fanatics, of labor, were as subject to 
 reason and knowledge, and as strictly under control 
 of law and opinion, as wealth is, the most serious 
 labor problems would disappear. 
 
 27. GOLD AS A RULE OF HONESTY. 
 
 A supreme service rendered by gold is that of a 
 standard of honest reality in values. The intense 
 scorn and hatred of gold which politicians have 
 been known to feel or to affect, has been in great 
 part the revolt of a sort of rascal libertinism against 
 a veritable rule of honest reality. To speculative 
 libertinism in politics, the dream of making that 
 real which is not real, and of finding thereby a 
 short and easy way to success in life, finds gold as 
 a standard of reality in value very much in its way. 
 The absolute clearness and certainty with which 
 gold represents high value, and exceptionally 
 steady and sure value, had given it a supreme posi- 
 tion before Solomon built, or Moses planned, or 
 Abraham traveled. 
 
 The same Senator Stewart who at a somewhat 
 later date became a special pleader for Free Silver, 
 made this record in 1874: Jan. 13 — "There is 
 nothing so satisfactory as the real measure of value 
 — gold. ' ' Feb. 20 — " Gold is the universal stan- 
 dard of the world. ' ' June 11 — " I do not care how 
 much you discuss it, or how many resolutions you 
 pass ; they do not make any difference. You must 
 come to the same conclusion that all other people 
 have, that gold is recognized as the universal stan- 
 dard of value. It is idle to talk about compromising 
 
35 
 
 on any other measure of value ; the world will not 
 accept it." 
 
 The notorious creator of ' ' Free Silver " as a factor 
 in American politics, Senator Jones, made in like 
 manner a record of honest truth when he said, 
 April 1 , 1 874 : — "I believe the sooner we come down 
 to a purely gold standard the better it will be for 
 the country. Did any country ever accumulate 
 wealth, achieve greatness, or attain high civilization 
 without a standard of value ? And what but gold 
 could be that standard? . . . Gold is so exact a 
 measure of human effort that when it is exclusively 
 used as money it teaches the very habit of honesty. ' ' 
 
 Through Nevada impecuniosity in respect of 
 gold, and use to excess of silver, at an ever declin- 
 ing, always uncertain, and altogether slippery 
 value, Senators Stewart and Jones came later under 
 impressions in regard to money which enabled 
 them to grossly falsify the facts of gold. But the 
 facts are not altered. 
 
 CHAPTER III. 
 
 THE GROWTH OF MONEY: ORIGIN OF 
 STAMPED COIN. 
 
 28. THE NATURAL HISTORY OF MONEY. 
 
 Mr. W. Stanley Jevons, in his "Money and the 
 Mechanism of Exchange, ' ' one of the best books for 
 thorough study of the subject, has the following 
 under the head of "Early History of Money: " 
 
 "The natural history of money is almost a virgin 
 
36 
 
 subject, upon which I should like to dilate; but the 
 narrow limits of my space forbid me from attempt- 
 ing more than a brief sketch of the many interest- 
 ing facts which may be collected." 
 
 The chapter which Mr. Jevons goes on to make, 
 after this remark, fills ten pages with facts which 
 bear less upon the history of true money than 
 upon the story of what coramodities have been 
 made to serve in place of naoney, without actually 
 fulfilling conditions which distinguish money used 
 for cash transactions from commodities made 
 to serve the purposes of barter. The matter is 
 commonly dealt with much as if one should 
 attempt a story of ocean steamers by collecting 
 descriptions of canoes, rafts, launches, sailboats, 
 etc., as means of travel by water, assuming that an 
 ocean steamer is in the same category because it is 
 a means of travel by water; whereas the fact is that 
 an ocean steamer is essentially the application of 
 the steam engine to travel by water. 
 
 The mistake thus made is that of counting as 
 money various non-monetary commodities which 
 have been used, as we have already shown, not 
 properly as money, but as aids to trade, somewhat 
 taking the place of money. 
 
 29. THE ESSENTIAL FACT OF MONEY. 
 
 Money essentially means the application of a 
 precious commodity, notably a precious metal, or a 
 substitute representative of such metal, to certain 
 uses found necessary in the world of trade at large. 
 How at a pinch various non-monetary commodities, 
 as oxen, tobacco, and various products, have been 
 
37 
 
 used to make shift with for lack of money, or how 
 savages have made low-culture money of pretty 
 shells or shell beads, valued somewhat as ornament 
 and thus available as a cheap money, is hardly per- 
 tinent to the natural history of true mone}', as 
 intelligence and experience now understand and 
 employ it. 
 
 30. ERROR OF COMMON VIEW. 
 
 Mr. Horace White says, on the opening page of 
 his " Money and Banking," that " money is anything 
 that serves as a common medium of exchange and 
 measure of value — the agreed measure of any 
 time, place, or people." He remarks, with refer- 
 ence to the fiat folly of Virginia in trying to make 
 tobacco go as tender in place of money, that "Vir- 
 ginia grew her own money for nearly two centu- 
 ries," adding that " hardly any form of currency 
 could have been worse, the fluctuations in its value 
 being extreme and incessant, and the social disor- 
 ders produced by it enormous. ' ' 
 
 Yet Mr. White tells us that "the word money, as 
 used in the colonies, always meant metallic 
 money ; ' ' that a petition ' ' asked that a sub-treas- 
 urer be sent to the colony to receive the rents and 
 that he be instructed not to exact money 'whereof 
 we have none at all,' but to collect 'the true value 
 of the rent in commodity;' " that it was enacted, 
 because ' ' many and great inconveniences do daily 
 arise by dealing for money," "that all money debts 
 made since the 26th day of March, or hereafter 
 made, shall not be pleadable or recoverable in any 
 court of justice; " that "in 1742 it was enacted that 
 
38 
 
 persons not growing tobacco might pay taxes and 
 fees to public officers 'in current naoney at such 
 prices and rates for tobacco as shall be settled by 
 the courts of their respective counties;' " that 
 again, when severe drought had cut off the tobacco 
 crop, ' ' it was enacted that all tobacco debts, taxes, 
 and fees, might be paid in money at i6s. 8d. per 
 IOC lbs.;" and that "traders had generally kept 
 their books in terms of silver money, although their 
 dealings liad been in tobacco," — facts which 
 clearly show that the whole business was one of 
 senseless fiatism seeking to regulate barter by mak- 
 ing a fiat price of tobacco and giving this com- 
 modity a legal tender character. Nothing so absurd 
 as counting tobacco as money was for a moment 
 thought of. In the great dearth, or almost total 
 absence, of money, an attempt was made to get 
 along without money by legal regulation of barter. 
 The true idea of money was not lost. It is, there- 
 fore, not historically correct, and certainly not true 
 to any proper idea of money, to say that Virginia 
 used tobacco as money. It was instead of money, 
 and to get along without money, by making regu- 
 lated barter take the place of money or cash trans- 
 actions. 
 
 31. EARLY GREEK MAKING OF MONEY. 
 
 The facts already given, in Ch. II., under the 
 head of "The Earliest Origin and Idea of Money," 
 show how gold, silver, and a mixture of the two 
 known as electron, together with copper, naturally 
 came to the front as money, each according to its 
 value by weight, and with a tendency of the most 
 
39 
 
 precious to take the lead ; copper being in use in 
 pieces as a cheap and easy common money for 
 counting value and for making small change. 
 
 Further evidence in regard to the true natural 
 history of money may be cited from the latest of 
 our works of authority on the history of Greece, 
 Adolph Holm's " History of Greece." 
 
 To get a clear idea of the places referred to, a 
 glance at a map of ancient Greece will enable the 
 reader to see the position of Argos, on the east side 
 of the Peloponnese opposite to Attica, with the 
 Saronic Gulf between them, and midway in that 
 gulf the island .^gina. The city of Argos was 
 regarded by the Greeks as their most ancient city, 
 and one of its most notable kings was Pheidon. 
 Looking directly across from Greece to Asia Minor 
 the situation of Lydia is shown. Lydia is of impor- 
 tance in the history as representing Greek civiliza- 
 tion before it had been planted in Greece itself. If 
 now we remember the position of Argos, where 
 Pheidon is said to have been seventh in its list of 
 early kings, we shall be prepared to understand 
 the statement made by Holm in his history. 
 
 "Pheidon," he says, "became famous according 
 to Herodotus, by establishing a standard of weights 
 and measures for the Peloponnese. He is said to 
 have been the first to stamp coins in Greece. Long 
 afterwards in the Heraeum near Argos could be 
 seen bars of silver, obeliskoi, which Pheidon had 
 dedicated to commemorate his having done away 
 with this kind of money and having replaced it by 
 stamped coins. His mint was in ^gina. 
 
 "It is beyond question that Pheidon occupied a 
 
40 
 
 very important position in Greece. That he was. 
 master of ^gina is proved by the statement that 
 he stamped his coins in that island. His appear- 
 ance as president of the Olympic games was in the 
 eighth Olympiad. Pheidon, however, has gained 
 an especially brilliant reputation by his supposed 
 introduction of a standard of weights and measures- 
 and of coinage into Greece, or, according to Hero- 
 dotus, into the Peloponnese. 
 
 "In the civilized countries of Asia and Africa the 
 precious metals had long served as a means of 
 exchange, but they were taken according to weight, 
 and the weight had in every case to be verified by 
 the scales. Then the coin came into existence by 
 the weight of a piece of metal being guaranteed, 
 by an ofi&cial stamp, and thus the coin can be used 
 for payment without further verification. The idea 
 of using the stamp for this purpose originated, ac~ 
 cording to the ancients, not in the large civilized 
 countries of Central Asia, nor in Egypt, but in Asia 
 Minor, or, according to the opinions of some writ- 
 ers, with Pheidon in Greece. We must come to the 
 conclusion that the discovery was only made at one 
 place : in which case, as Asia Minor took the lead 
 generally in civilization, Greece would have bor- 
 rowed it from that country. In Asia Minor, Lydia 
 was said to have been the first country that used 
 coins. They were bits of the pale, impure gold 
 known as electrum or electron, of which many have 
 been preserved to the present day. The coins of 
 Pheidon, on the other hand, were made of silver. 
 Long afterwards, in the Herseum, near Argos, 
 could be seen bars of silver, obeliskoi, which Phei- 
 
41 
 
 don had dedicated to commemorate his having; 
 done away with this kind of money ; and having 
 replaced it by stamped coins. Thus the originality- 
 of Pheidon may have consisted in his having intro- 
 duced silver coins. This he is said to have done 
 in ^gina, which means that the .^Egina standard, 
 of coinage and the manufacture of the ^gina coin. 
 are ascribed to him. The .^Egina standard was 
 originally the most widely used in Greece. The 
 coins bore a tortoise as a distinguishing mark. At 
 first they had no inscription, but only images. 
 Whatever Pheidon's share in the introduction of 
 coinage, he took an active part in the regulation of 
 weights and measures in Greece, and did much to 
 make the Greeks a commercial people of the first 
 rank. 
 
 "Much research and many volumes," Holm adds- 
 in a note, "have been devoted to the origin of coin- 
 age. In the opinion of the ancients, the question, 
 lay between Pheidon and the Lydians. Herodotus 
 is in favor of the Lydians. Some ancient Lydiaa 
 coins have come down to us, made out of pale Pac- 
 tolus gold or electrum ; also some old .^gina coins 
 with the tortoise. Barclay Head, in his introduc- 
 tion to " The Coins of the Ancients," asserts that the 
 Lydians first made lumps of metal into money by 
 stamping them, and that the Greeks of Asia Minor 
 were the first to put regular images on the stamp, 
 and that in any event they were the first to engrave- 
 names upon it. But it is not quite so certain that 
 the Lydians were really the inventors of coins. 
 We know that rings were used as a currency by 
 weight in Egypt. If the ring shape is compatible^ 
 
42 
 
 with the idea of a coin, the Lydians can hardly have 
 invented coinage. If, on the contrary, the lump 
 shape is essential, the honor rests with the Lydians. " 
 
 32. MR. GROTE ON PHEIDON'S COINAGE. 
 
 In regard to this celebrated king of Argos, Phei- 
 don, who is known to have been president of the 
 Olympic games in the year 747 B. C, and who 
 enjoys the distinction of having been the first 
 Greek ruler to coin metal money, and the first to 
 establish a scale of weights and measures which was 
 widely adopted, Mr. Grote, in his "History of 
 Greece^ ' ' * says : 
 
 "He first coined both copper and silver money 
 in ^gina, and first established a scale of weights 
 and measures which, through his influence, became 
 adopted through Peloponnesus and acquired ulti- 
 mately footing both in all the Dorian states and in 
 Boeotia, Thessaly, Northern Hellas generally, and 
 Macedonia, under the name of the .(Eginaean scale. 
 . . . The Babylonian talent, mina, and drachma 
 (one hundred drachmse to a mina and sixty minag 
 to a talent) are identical with the ^Eginsean. The 
 word mina is of Asiatic origin ; and it has been 
 rendered highly probable that the scale circulated 
 by Pheidon was borrowed immediately from the 
 Phoenicians and by them, originally, from the 
 Babylonians. The Babylonian, Hebraic, Phoeni- 
 cian, Egyptian, and Grecian scales of weight (which 
 were subsequently followed wherever coined 
 money was introduced) are found to be so nearly 
 
 * Vol. II. pp. 240-341. 
 
43 
 
 conformable, as to warrant a belief that they are 
 all deduced from one common origin ; and that 
 origin the Chaldaean priesthood of Babylon. It is 
 to Pheidon that the Greeks owe the first introduc- 
 tion of the Babylonian scale of weight and the first 
 employment of coined and stamped money." 
 
 33. DR. CURTIUS ON PHEIDON'S COINAGE. 
 
 The interest of the early Greek facts appears still 
 further from the following account by Dr. Curtius : 
 "The times of the Homeric trade by barter were 
 past. The lonians had long learnt from the Lydi- 
 ans to shape precious metals in accurately weighed 
 pieces and to provide them with the signs of their 
 value. All the islands and coasts were acquainted 
 with this Ionic gold, viz., the bullet-shaped gold 
 pieces of a pale yellow color, formed out of the 
 electrum of the Pactolus. But men hesitated to 
 accept the strange money which possessed no cur- 
 rency in the land. Every business transaction in 
 the Peloponnesian harbors gave rise to a complica- 
 tion of difl&culties. For in Argolis also there 
 existed none but a clumsy kind of money, of iron 
 and bronze, founded (or cast) in bars, which were 
 weighed out to each customer, totally unsuited on 
 account of its form, its weight, and the inequality 
 of its value for purposes of foreign trade. Pheidon 
 accomplished a vital reform, bj?^ completely adopt- 
 ing the system of weights and money which Phoe- 
 nicians and Lydians had spread from Babylon over 
 the whole of Asia. The talent, a term used by 
 Homer to express a perfectly indefinite value, 
 henceforth became in the European country also 
 
44 
 
 the fixed unit for weights and money; it was 
 divided into sixty parts, for which the Semitic 
 name of mna or mina was retained, and each mina 
 again was divided into one hundred drackince. The 
 ancient bar money was suspended in the temple of 
 Hera as a reminiscence of ancient times, and the 
 new money was coined, first in Euboea,* then, on. 
 the territory of Argos itself, in [the island of] 
 JEgma..-\ On this island was instituted, under pub- 
 lic inspectors, the first Peloponnesian silver-mint, 
 and the tortoise, the smybol of the ancient Phoeni- 
 cian goddess of the sea and of trade, was adopted as 
 a stamp. At the same time a regular system was 
 introduced of liquid and solid measures. 
 
 "The grand style in which Pheidon carried out 
 these reforms shows that they were not intended, 
 for the narrow territory of a single city. They are 
 the undertaking of a man who desired to found an 
 empire, and who had received the first impulse 
 towards this desire from Asia, where in the rear of 
 the Hellenic cities (of Asia Minor — the lonians) 
 existed vast empires with well-ordered systems of 
 commerce." J 
 
 * Euboea was a specially convenient seat of commerce, an island 
 stretching along from opposite Attica in the south to opposite 
 Thessaly in the north, and separated from the eastward mainland 
 of Greece by a narrow strait of water. 
 
 f ^gina was an island in the Saronic guU, between Attica and 
 Corinth, where it naturally became a notable centre of trade of 
 shipowning and naval development, and of manufactures. The 
 shipowners of jEgina became in later times the richest merchants 
 of the Greek world. They had trading places in distant parts, and 
 became a seat of naval power. Dr. Ciirtius says of them: "They 
 deemed no way of making money beneath Ihem. Everywhere 
 .(Eginetans were to be found, huckstering with utensils of bronze, 
 vessels of earthenware, ointments, and other articles, which were 
 produced on ^gina in large manufactories." (II. 227.) 
 
 X History of Greece, I. 272, 273. 
 
45 
 
 34- GROWTH OF GREEK MONEY. 
 
 The essential facts of the growth of Greek money- 
 are clearly summarized in the following passages 
 of Gardner and Jevons' "Manual of Greek Antiqui- 
 ties," a very recent work of high authority. 
 
 " It is quite certain that in Homer's time, although 
 ■coins were not yet in use, bars and rings of metal 
 of fixed weight were current and generally accepted 
 in all kinds of mercantile transactions.* Small 
 wedges of silver were the principal medium of 
 exchange in Greece very long before the seventh 
 century B. C, and of these six were reckoned as a 
 drachma or handful. Indeed, from very remote 
 times the Babylonians and the Egyptians had 
 formed for themselves systems of currency in metal 
 Tsars, and had transmitted the custom to the nations 
 of Asia Minor and Syria, with whom the Greeks 
 were in constant contact. We cannot fix the date 
 at which the custom spread to Greece also, but it 
 must have been very early. And when bars of 
 metal of fixed weight and fineness are in circula- 
 tions, nothing is required to turn these into coins 
 except the addition of an official stamp." 
 
 ' ' It has long been disputed what people were the 
 
 * This is a much needed correction of the common statement that 
 oxen were the money of Homer's time. The principal riches of 
 the chiefs, of whom we read in Homer, consisted in their floclfs 
 and herds and their slaves, and trade almost always meant exchang- 
 ing cattle for whatever they bought of the foreign merchants who 
 visited them. It was thus natural to speak of values in terms of 
 cattle, but this reference to habitual and familiar barter by no 
 means excluded the existence, and frequency even, of cash trans- 
 actions, in which the money consisted of bars, and rings of gold, 
 or wedges of silver, of fixed weight and fineness, which only 
 needed to have a stamp oh them to make a near approach to our 
 modern coin. 
 
46 
 
 first to substitute in their currency coins proper, 
 that is, properly stamped lumps of metal, for the 
 bars of metal of fixed weight which had preceded 
 them. Modern opinion is inclined to the view that 
 this discovery belongs to the Lydians. The first 
 coins were made neither of gold nor silver but of a 
 yellow metal compounded of the two and called 
 electrum, which was found in large quantities in 
 the beds of the Pactolus and other rivers of Asia 
 Minor. About the reign of Gyges it occurred to 
 some wise man of the Lydian court to have small 
 balls of electrum marked with the official stamp of 
 a city or a temple, to guarantee both its weight and 
 its quality. Miletus and other Greek cities of Asia 
 adopted the plan from their neighbors, and as early 
 as the seventh and sixth centuries before our era a 
 considerable quantity of electrum coins was circu- 
 lating on the shores of the ^gean sea and the 
 Euxine." 
 
 "Pheidon, king of Argos, is supposed to have 
 been the first to issue money in Greece proper. 
 This he struck in the Island of .^Egina. The metal 
 he used was silver, silver being the normal cur- 
 rency of Greece, as gold was of Asia and copper of 
 Italy. The type was the tortoise, the symbol of 
 the Venetian goddess of the moon and of trade, 
 whom the Greeks identified with their own Aphro- 
 dite. There is no trace of any Athenian coinage 
 before the time of Solon; for all Attic money is 
 struck on the monetary standard introduced by him. 
 Nor do most of the cities of Greece proper seem 
 to have issued money until the time of the Persian 
 wars." 
 
47 
 
 • ' By that time Persia had a -well established cur- 
 rency both in gold and silver. Croesus had intro- 
 duced in Lydia a regular state coinage in these two 
 metals, in place of the irregularly issued pieces of 
 electrum which had preceded him ; and Darius, the 
 son of Hystaspes, in his general reform of the Per- 
 sian Empire, followed the example of Croesus, 
 adopting alike his metals and his standards of 
 weights." 
 
 " Darius claimed the minting of gold as his 
 exclusive prerogative, hence throughout ancient, 
 and early medieval history the issue of gold coin 
 was the sign of a claim to complete autonomy. 
 The Persian satraps were, however, allowed to 
 issue silver. Also the Greek cities of Asia Minor 
 were allowed, during a great part of their history, 
 to issue electrum and silver money of their own. 
 Meantime everywhere in Greece the state was step- 
 ping into the place of the temple as the issuer of 
 coin. Hence throughout the flourishing period of 
 Greek history the most usual inscription on the 
 money is the name of the state which issued it or 
 rather the people of that state." 
 
 "It has been ably maintained by Prof. Curtius 
 that the origin of coins was religious. He considers 
 that the need of a currency became most clear and 
 strong at the religious festivals which took place at 
 fixed periods in connection with the great temples 
 of antiquity. The offerings of the people on such 
 occasions would take the form of small bars or 
 ingots of gold or silver, and these, on being accumu- 
 lated in the temple would sometimes be stamped 
 with the mark of the deity, — the lyre for Apollo, 
 
48 
 
 the tortoise for Aphrodite, the owl for Athena. 
 Thus the earliest coins are everywhere ingots thus 
 marked with the symbols and not the heads or fig- 
 ures of deities. In fact it is certain that in early 
 times coins were closely connected with the deities 
 and their festivals. The coins of Ephesus are 
 closely connected with the temple of Artemis; 
 those of Miletus with the temple of Apollo at 
 Didyma. The coins of Elis bear every mark of a 
 close relation to the Olympic festival. The Roman 
 mint was the temple of Juno Moneta." 
 
 "The types or devices of early Greek coins are 
 almost exclusively religious. The earliest money 
 bore a mere indentation on the reverse, and on the 
 obverse the symbol of some deity. The god or 
 goddess selected for this honor was often the pro- 
 tecting divinity of the mint city. The symbol was 
 frequently an animal ; thus the wolf of Apollo is 
 impressed on the early coins of Argus, the owl of 
 Pallas on those of Athens, Pegasus on those of 
 Corinth, etc. In later times, that is to say early in 
 the fifth century, this symbol is in most coinages 
 transferred to the reverse of the coin, while the 
 obverse is reserved for the effigy of the deity to 
 whom the symbol belongs. This is the most general 
 rule, but the exceptions are very numerous; in 
 fact, in every district of Greece the coinage has a 
 distinct character. No city which was autonomous 
 seems to have been too small to issue coin, with its 
 own types and inscriptions, and each city struck 
 on the standard of weight which best suited its 
 markets and its monetary alliances. Hence the 
 prodigious abundance of Greek coins differing in 
 
49 
 
 type, legend and weight one from another, which 
 must have been very confusing and detrimental to 
 commerce at the time. ' ' 
 
 35. RELIGIOUS CONNECTION OF COINAGE. 
 
 The connection of coinage with religion, and of 
 money with the temples, comes out with special 
 distinctness in Greek history. The worship of 
 Apollo, god of light and of culture, found its chief 
 seat in Greece at Delphi, on an isthmus situated 
 exactly in the centre of commercial intercourse and 
 in the meeting-point of all the routes by lan^ and 
 by sea. The annual festival was intentionally 
 placed at the beginning of the most favorable sea- 
 son, in order that a visit to attend it might be made 
 also a commercial journey. It was a mart of 
 exchange, at which industrious men of business 
 could open new connections and carry on commer- 
 cial relations already begun. The earliest inns, 
 halls of assembly, trading booths, etc., were in 
 connection with the temple festivals. The art of 
 road-making, and of building bridges, took its first 
 origin from the sanctuaries to which people wished 
 to make annual pilgrimages. The net-work of 
 Greek roads took its origin from Delphi. 
 
 The worship of Apollo had come into Greece as 
 a mission, and one of its supreme principles was 
 that of missionary spread of culture. The whole 
 matter of colonization stood under the special guid- 
 ance of Apollo, who was regarded as the god of the 
 sea and the coasts, a god of peace and prosperity. 
 Not only were the holy places centres of protected 
 and peaceful commercial intercourse, but in these 
 
 4 
 
so 
 
 trading fairs knowledge of articles of value grew 
 rapidly and. methods of exchange were developed. 
 Here, therefore, the monetary system arose, and 
 finance took its origin. Dr. Ernst Curtius, whose 
 account our sketch follows, says of the temples as 
 seats of wealth : 
 
 "Long before colonization had begun to spread 
 in this grand and connected fashion, the holy places 
 of the land were centres of an extensive commercial 
 intercourse, which found peace and security in the 
 sacred ports, on the sacred roads, and in the vicinity- 
 of the temples, whilst in the rest of the world a 
 wild law of force prevailed. 
 
 ' ' Herein lies perhaps the greatest and most per- 
 manent service rendered by the Delphic oracle. 
 The exercise of this influence, however, was not 
 confined to Delphi alone. Miletus was, like ChaU 
 cis, an Apolline city. The temple on Delos also, 
 the Herseum at Samos, and the Artemisium at 
 Ephesus, became the starting-points of an imposing 
 maritime commerce, and of important explorations. 
 The religious sense and the spirit of commerce^ 
 both so powerful in the Hellenic nation, penetrated 
 one another in a remarkable degree. The gods, 
 were the wealthiest capitalists in the land, and 
 their priests the first to understand the power of 
 capital. The temples had in part large revenues 
 from the proceeds of their lands, from the tithes of 
 war booty and commercial gains, from fines and 
 amercements, from the gifts presented for services 
 rendered, for counsel and aid, for bodily and spirit- 
 ual healing. With the gold-producing countries of 
 Asia, Delphi maintained a lively intercourse; at 
 
SI 
 
 Delphi were established by Midas and Gyges the 
 first treasures of gold in Hellas. 
 
 "With all the more important sanctuaries there 
 was connected a comprehensive financial adminis- 
 tration, it being the duty of the priests, by shrewd 
 management, by sharing in profitable undertakings, 
 by advantageous leases, by lending money, to 
 increase the annual revenues and gather a treasure 
 which not only sufficed for the maintenance of the 
 dignity of religious worship, but was also an essen- 
 tial means of advancing the national power of the 
 sanctuary. The treasure of the gods was preserved 
 under the threshold of the house of the god or in 
 special enclosures within the court of the temple 
 under the oversight of the treasurers. There were 
 no places of greater security, and they were, there- 
 fore, used by States as well as by private persons 
 as places of deposit for their valuable documents, 
 such as wills, compacts, bonds, or ready money. 
 By this means the sanctuary entered into business 
 relations with all parts of the Greek world, which 
 brought it gain and influence. The oracles became 
 money institutions which took the place of public 
 banks. II. 46, 47. 
 
 36. ANCIENT MONEY WAS METAL BY WEIGHT. 
 
 The fact which stands out most distinctly in this 
 history is the use of precious metals, not in coins 
 of fiat value, but in bars, rings, ingots or other 
 forms invariably current by weight. Coinage 
 essentially meant a record on the piece of metal of 
 its weight. The history of honest money is the 
 
52 
 
 history of various metals esteemed precious and 
 current by weight. 
 
 Mr. Jevons in his "Money and the Mechanism of 
 Exchange ' ' * says : 
 
 ' ' There is overwhelming evidence to prove that 
 simple currency by weight is the primitive system. 
 Before the invention of the balance, lumps and 
 grains were no doubt exchanged according to a 
 rude estimate of their bulk or weight; but after- 
 wards the balance became a necessary instrument 
 in all important transactions. In the Old Testa- 
 ment we find several statements clearly iinplying 
 that the ancient Hebrews used to pass money by 
 weight. Aristotle, in his Politics, gives an inter- 
 esting account of his view of the origin of money, 
 and distinctly tells us that the metals were first 
 passed simply by weight or size, and Pliny makes 
 a similar assertion. That it was so we may infer 
 from the remarkable fact that even when no use 
 was made of it the custom of bringing a pair of 
 scales survived as a legal formality in the sale of 
 slaves at Rome. ' ' 
 
 "There can be little doubt that every system of 
 coinage was originally identical with a system of 
 weights, the unit of value being the imit of weight 
 of some selected metal. In the present day cur- 
 rency by weight is far more extensively practiced 
 than might be supposed. In all large international 
 transactions currency by weight is the sole 
 method." 
 
 * Pp. 88-91. 
 
53 
 
 CHAPTER IV. 
 
 THE PRECIOUS METALS AS THE MATERIAL 
 OF MONEY. 
 
 37. UNIQUE POSITION OF MONEY METALS. 
 
 Mendeleeff, the greatest of living chemists, 
 points out the double character of "the perfectly 
 unique position held by copper, silver and gold," 
 — their chemical position and their monetary posi- 
 tion. Thus he says ; 
 
 "The perfectly unique position held by copper, 
 silver, and gold, in the periodic system of the ele- 
 ments, and the degree of affinity which is found 
 between them, is all the more remarkable, as nature 
 and practice have long isolated these metals from 
 all others by having employed them — for exam- 
 ple, for metallic money — and determined their 
 relative importance and value in conformity with 
 the order of their atomic weights, etc. — silver 
 between copper and gold." 
 
 The metals fall by their chemical characteristics 
 into series, such as iron, cobalt, and nickel in one, 
 osmium, iridium, and platinum as "the heavy plati- 
 num metals," ruthenium, rhodium, and palladium 
 as "the light platinum metals," and copper, silver 
 and gold as the series of precious metals. 
 
 The double series of platinum metals form a 
 group of six metals, which are associated together 
 in nature and are characterized by a number of 
 common properties, both physical and chemical. 
 They are called the platinum metals because plati- 
 
54 
 
 niim predominates so markedly over the others. 
 The heavy series has atomic weights nearly 191 to 
 196; the lighter, 104 to 106. They are found in 
 nature in a native state — not as iron, which is 
 always found combined with some other element. 
 They have great infusibility and tenacity, and 
 small chemical energy — so Mendeeleff expresses 
 it, but what should be said is that they do not 
 readily accept union with other substances, but are 
 proof against the attacking energy of such sub- 
 stances ; oxygen, for example, the attacking energy 
 of which is very intense. The predominance of 
 platinum is shown by the fact that in the ores as 
 they are found, 70 to 80 per cent, is platinum, 
 5 to 8 iridium, and a somewhat smaller quantity 
 osmium; while the light series, palladium, rho- 
 dium and ruthenium occur in still smaller pro- 
 portions. 
 
 38- COSTLY NOT THE SAME AS PRECIOUS. 
 
 Mr. Jevons speaks, though as barely more than 
 a "scientific fancy," as if "some still more valuable 
 metal, such as the scarce and intractable iridium or 
 osmium, or the remarkable metal palladium, might 
 possibly take the place of gold. ' ' But costly, from 
 scarcity and intractability, does not mean valuable 
 by the side of either gold, silver, or copper. Two 
 things are to be considered in estimating the pre- 
 ciousness of metals, — intrinsic worth and cost. 
 Intrinsic worth is determined by rare properties 
 which give high value. Gold stands in this respect 
 very much above all other metals. Cost is deter- 
 
5S 
 
 mined by the amount found and the difficulty of 
 getting the metal in quantity. Gold is easily got 
 and is found in very great quantity. This makes 
 its cost low in comparison with quite a number of 
 substances of greatly less intrinsic worth. The 
 obscure metal gallium, belonging to the same group 
 as tin, costs $200 an ounce, while gold costs but $20 
 per ounce. Palladium and thurium are very much 
 alike, yet they cost, the first $8 per ounce and the 
 second $160. Vanadium, a nearly useless black 
 powder, costs $48 per ounce. Germanium closely 
 resembles tin, yet it costs $95 per ounce. Rubid- 
 ium, a greenish-gray powder, costs $88 per ounce. 
 Santatun, which is very like rubidium, costs $80 
 per ounce. Baryllium, which resembles lead, is 
 also worth $80 per ounce. Calcium, the oxides of 
 which are so common and so familiar, is a white 
 powder, worth $80 per ounce. Indium and didym- 
 ium are each worth $72 per ounce ; lithium, $64, 
 erbium $62 per ounce; ruthenium $44, cerium, 
 strontium, rhodium, and zirconium, each $40 per 
 ounce; barium $32, borium $25 per ounce. A 
 principal fact affecting the cost of these substances 
 is the extreme difficulty of preserving them from 
 oxidation, — ■ that is, from being consumed by oxy- 
 gen. It is very difficult to get them separate from 
 the oxygen compounds in which they occur, and 
 very difficult to keep them when got secure against 
 the attack of oxygen. They are, in fact, costly 
 because of being to such a large extent intrinsically 
 worthless, in consequence of the fact that exposure 
 to oxygen destroys them, as iron is destroyed by 
 
 TUSt. 
 
56 
 
 39- PLATINUM NOT GOOD FOR MONEY. 
 
 Platinum is more costly than silver, but that does 
 not make it valuable for use as money. In price 
 per ounce platinum takes a place nearly half way 
 irom silver to gold, but this is due to the demand 
 for it in the arts and the comparatively small sup- 
 ply of it. Its price fluctuates remarkably, as from 
 $8 an ounce to $4 an ounce during the ten years, 
 1875-1885; showing that it does not possess quali- 
 ties to make it a highly precious metal if there were 
 an ample supply of it for all uses. The Encyclo- 
 paedia Britannica says (Vol. XIX. 190 and 193): 
 
 "Though a noble metal chemically, platinum has 
 too modest an appearance to lend itself much to 
 the jeweler's purposes. The Russian government 
 used, for a while, to strike platinum coins, but soon 
 came to give up the practice on account of the 
 immense fluctuations in the commercial value of 
 the metal. 
 
 "Almost all the platinum produced nowadays is 
 made into chemical utensils; Platinum, in fact, is 
 the metal of the chemist. 'Without platinum cru- 
 cibles, which share the infusibility of porcelain 
 with the chemical inertness of gold ones, the com- 
 position of most minerals ' said Liebig, ' could not 
 have been ascertained,' and chemistry generally 
 could not have come up to its present level. In 
 industrial chemistry platinum is used chiefly for 
 the construction of those stills for the concentra- 
 tion of oil of vitriol, which, although a single one 
 costs a fortune, are cheaper in the long run than 
 glass retorts. ' ' 
 
57 
 
 40. RELATIVE POSITION OF SILVER AND GOLD. 
 
 Silver is rarely found in the native state uncom- 
 pounded witli another element or elements. What 
 we call silver ores are all more or less complex 
 mixtures, in which less than half is silver. It is 
 almost universal to find some gold in silver ores 
 and some silver in gold ores. In $350,000,000 worth, 
 of metal taken from the Comstock lode of Nevada, 
 the amount of gold was nearly equal in value to the- 
 value of the silver. Gold becomes loose from the 
 ores in which it occurs, yet remains unaltered by 
 exposure in nature, and is thus found in particles 
 and nuggets. Silver, becoming loose, wears away 
 or enters into a new mixture, so that it can be got 
 only from the rocks in which it originally occurs. 
 As the Encyclopaedia Britannica says (Vol. XXII. 
 72), "the greater rapidity with which gold can be 
 obtained has often influenced the legal relation of 
 value between these two metals, and its bearing 
 upon prices, commerce, and civilization." 
 
 Silver is originally as widespread as gold, but the 
 amount of loose gold enormously extends the pres- 
 ence of gold, and its readiness to the hand of man, 
 beyond the presence and readiness for use of silver. 
 Most of the ores in which silver occurs are difficult. 
 to reduce, or separate into their parts, and it is 
 therefore, says the Britannica, safe to regard silver 
 as the last of the three great coining metals which. 
 come into use. Pure silver has a beautiful white 
 color and luster. It is almost as plastic as pure 
 gold, and, like it, very soft. It ranks next to gold, 
 in being proof against the action of caustic alkali 
 
58 
 
 lyes. It is too soft to make durable coins without 
 an alloy of copper to harden it. 
 
 British coin silver is 925, and may be not more 
 than 931 parts in 1,000 of pure silver. Only 900, or 
 within three of 900, are required in the United 
 ■States and in Germany, for all coins ; also in France 
 and Austria for the major coins. The minor coins 
 of France, under one franc, are 835 parts silver, 93 
 copper and 72 zinc. The minor coins of Austria 
 do not have more than 520 parts silver, and from 
 that down to 375. For making alkali-proof vessels, 
 an alloy found superior consists of 910 parts silver, 
 .70 gold, and 20 nickel. British standard silver is 
 too soft to wear well, far softer than the 900 alloy 
 <of the United States, Germany, France, and Austria. 
 
 The color, luster and power of resisting oxida- 
 tion, which gold possesses, have caused it to be 
 valued from the earliest ages. It is the only metal 
 of a yellow color. It is nearly as soft as lead ; is 
 the most malleable of all metals ; is extremely duc- 
 tile, and it can readily be welded cold, making it a 
 very simple matter to compress it into forms of any 
 desired kind. It is found in nature chiefly as pure 
 metal, and less frequently in combination with other 
 metals, as silver, lead, and tellurium. For coinage, 
 alloys with silver and copper are chiefly used. 
 
 In America and in the Latin Union countries the 
 alloy in use has 900 in 1,000 parts of gold. The 
 Norse 2-kroner gold piece has only 800 parts gold. 
 For the Austrian reichsducaten copper is used with 
 986.6 parts gold. English standard gold is com- 
 posed of eleven parts of fine gold, and one part of 
 alloy, chiefly copper. 
 
59 
 
 41. THE GOLD-SILVER COMPOUND. 
 
 The Greeks, as the Encyclopaedia Britannica 
 account states (Vol. X. 740), and as our story of 
 early money has already shown, were familiar with 
 natural alloys of silver and gold known under the 
 name of electrum, and rough nuggets of which 
 were frequently stamped and are said to have 
 formed the earliest coins of the Lydians of Asia 
 Minor, who were a very advanced people when as 
 yet Greece had taken only the first steps of pro- 
 gress. 
 
 This ancient example has naturally raised the 
 question whether we could not accommodate both 
 gold and silver interests by an electrum coinage, 
 mixing gold and silver in some definite proportion. 
 It is, however, a suggestion in disregard of the true 
 science of money. The first principle of that sci- 
 ence is intrinsic value by weight of the material 
 used as money ; full value for standard money, and 
 less than full for subsidiary. Be the shekels of 
 copper, or of silver, or of gold, they may be made 
 good money in proportion as they have intrinsic 
 "value, readily known. 
 
 42. EARLIEST CURRENT MONEY. 
 
 Money began by circulation of definite weights 
 of one of the precious metals. Coinage was merely 
 marking the weight. Our modern improved coin- 
 age is only an improved method of indicating and 
 making permanently secure the weight of the coin. 
 We could, with equal ease and advantage, make 
 money of copper, silver, platinum, gold, or elec- 
 
6o 
 
 trum, if they all alike served for coinage, on the 
 principle just stated. As a matter of fact they 
 differ very greatly, and we are shut up for good 
 money to the metal or metals which best meet 
 coinage conditions. 
 
 And here it is important to note that coinage, or 
 the marking, and making secure the value by 
 weight of a piece of metal, looks in two directions 
 — that of minor coins of low value and limited use, 
 and that of major coins of high value and unlimited 
 use. It does not much matter about minor coins 
 of copper, nickel, or silver even, because they only 
 serve to count small values, which are payable in 
 the major coins. It is for the major coins that we 
 require exact and secure indication of the value by 
 weight of every coin. 
 
 And for the major coins the fundamental princi- 
 ple is this, that that substance, that one of the 
 precious metals, will best serve for money, and 
 must for that reason be the standard, which most 
 constantly and steadily keeps the highest line, or at 
 least some definite high line, of value. As the out- 
 put and market of the world now are, gold does 
 this far beyond silver. 
 
 If gold mines were to greatly increase in number 
 and output, and silver mines to correspondingly 
 fail, so as to make silver to be steadily held at the 
 highest line of value above gold, the effect would 
 be to give silver the advantage above gold for pur- 
 poses of steadily maintained value in coin form. 
 If we could depend as well upon the value in trade 
 of a definite weight of silver as we can upon that 
 of a definite weight of gold, silver would be just as 
 
6i 
 
 good as gold for money. If the two metals wotild 
 stand together, and together rise or fall equally, 
 and if possible only slightly either way, then we 
 could have money in gold or silver indifferently, 
 so far as relates to the goodness of the money as 
 coined and current precious metal, the one great 
 objection in such case to silver being its bulk and 
 weight compared with gold. An immense experi- 
 ence, notably in France, has shown that bulk and 
 weight alone are a fatal objection to silver as the 
 chief or even the equal money of modern business. 
 But far beyond this are found other objections, 
 especially those of the invariably bad working of 
 the double standard system, to which attention is 
 directed in later chapters, and those which show 
 silver never commanding any such estimate of its 
 desirability and worth as gold always and every- 
 where commands. The historical facts for fully 
 2,500 years show gold alone standing at a high line 
 of value constantly and steadily, and silver not only 
 making no approach in value to gold, but con- 
 stantly fluctuating in value ; that is, in what it can 
 be exchanged for in trade. We cannot, therefore, 
 get away from the fact that gold works by itself 
 in the major or standard coins better than anything 
 else, far better than silver, and that the more silver 
 there is coming upon the market, the harder it will 
 be to make silver work equally well. 
 
 43, WHAT MAKES REAL MONEY. 
 
 The fundamental fact, we cannot too carefully 
 consider, which makes real money, is its intrinsic 
 value, the value of the substance of which it con- 
 
62 
 
 sists, such as a given weight of gold, or silver, or 
 copper, or platinum, or nickel. But it is not indif- 
 ferent what substance we select for making real 
 money. If there were no gold, silver, or copper, 
 real money could be readily made of platinum,, 
 with, perhaps, an approach to a satisfactory stan- 
 dard ; but as substances are, in respect of the cir- 
 cumstances which affect their value for makings 
 real money, gold so decidedly stands at the top, 
 out of reach of competition by or comparison with, 
 silver, that we may unhesitatingly say that in the 
 nature of things gold enables us to make real money- 
 of the most satisfactory standard. 
 
 44. THE ULTIMATE STANDARD. 
 
 What is the most satisfactory standard, existing 
 in the nature of things? It is the standard of stead- 
 ily maintained value; not an absolute maintenance 
 of value, but a maintenance the nearest to absolute 
 that is practicable, and decidedly above that possi- 
 ble in the case of silver. While, therefore, we 
 might use silver to make real money, and fare well 
 in doing so, we yet can fare better by employing 
 gold for our standard real money, making our sil- 
 ver money as good in reality as we can, and then 
 raising its value as money to the level of gold by 
 making it a substitute for or payable in gold. 
 
 45. WHAT VALUE CONSISTS IN. 
 
 If we ask what value consists in, the standard of 
 which we get in its best form in a given quantity 
 of gold, the answer, determined by the nature of 
 things, is the estimate made in trade. Trade or 
 
63 
 
 barter is the fundamental fact never to be lost 
 sight of. A true piece of money is a given amount. 
 of whatever substance serves well or serves best as 
 money, and its value is what it can be exchanged, 
 for of that limited class of commodities which are 
 most definitely valued in ordinary exchange. The 
 balance measures money just as truly as it meas- 
 ures lead or wheat. The ideal piece of money is a 
 given weight of gold or a given weight of silver 
 readily exchangeable for gold. 
 
 We cannot take the value of gold in any great 
 variety of commodities indiscriminately. We may 
 take it in wheat, in wool, in cloth of a definite qual- 
 ity, the production of which is very general and. 
 steady and the uses of which are continuous and 
 universal, but even so, we can only make an 
 approach to a true estimate of what gold is worth 
 to mankind at different times and in different, 
 places. If, for example, we compare the fifteenth 
 century with the nineteenth, and ask how much 
 wheat, or wool, or cloth an ounce of gold would be 
 exchangeable for, the answer which we get is sub- 
 ject to qualification by anything affecting the com- 
 parative values of wheat, wool or cloth in the two 
 centuries About all that we can arrive at is the 
 conclusion that, in different ages and places, and 
 with a sufficiently large development of normat 
 conditions, gold fairly maintains not only a high, 
 value but the highest value among large exchange- 
 able substances, and maintains this with less fluctu- 
 ation than any other substance known to us.* 
 
 *" It must not be assumed that gold is absolutely stable in 
 value. When we speak of the value of the one thing which meas- 
 
64 
 
 The money, then, which we make of gold, or the 
 substitute money which we make of silver, funda- 
 mentally consists of one thing, and one only — a 
 ^ven weight of the standard substance, gold. 
 
 CHAPTER V. 
 
 THE MAKING OF MONEY. 
 46. METALLISM. 
 
 The study of money requires us to consider the 
 meaning of such terms as metallism, monometal- 
 lism, and bimetallism. Metallism properly means, 
 in relation to the question of money, the use of a 
 metal or metals as money. It might mean the use 
 of any metal as money. As a matter of fact, with 
 the experience of mankind establishing usages 
 which are for the best, metallism comes to mean 
 the use of any precious or convenient metal 
 in the making of money. Gold and silver are 
 found useful precious metals from which to make 
 money. Copper is found a convenient cheap metal 
 from which to make money in coins of small 
 value. 
 
 ures all value, we mean its purchasing power in terms of those 
 commodities whose supply is unlimited, or not controlled by 
 monopoly. The value of gold thus measured is subject to varia- 
 tions, but it is impossible to measure them with accuracy even 
 when we compare prices during long intervals of lime. Gold is 
 subject to fewer changes of purchasing power than any other 
 known substance. The fact that it is not wholly free from varia- 
 tions itself will not prevent it from becoming the sole and universal 
 [standard] money of civilized mankind." Horace White in 
 ' ' Money and Banking. ' ' 
 
47. FULL VALUE COIN. 
 
 There are two principles on whicli we can pro- 
 ceed in making pieces of metal serve as money. In 
 regard, for instance, to clieap metal made into small 
 coins and used as money, the law might require 
 -that whenever the mints coined copper they should 
 estimate the actual value of a certain weight of 
 copper from the average of prices for the previous 
 twelvemonth, and should' give in a one-cent coin 
 one cent's worth of copper. If this were done, a 
 man might gather a large quantity of copper coins 
 with a certain measure of security that he could 
 sell them for their face value for copper, and yet 
 there would be a measure only of security. If the 
 amount of copper coined was so large and its use 
 so common that a man's bank account would stand 
 to a considerable extent in a great weight of cop- 
 per, with no chance to get rid of it except to sell it 
 for its worth as metal, there would be many chances 
 that such sale would be attended with some loss. 
 As a matter of fact, there is no trouble with small 
 cheap coins, because the principle of putting exact 
 value of the metal into them is not only not fol- 
 lowed, but is avoided. If it were attempted to be 
 as exact as circumstances permit, it would be pos- 
 sible for traders to gather large quantities of the 
 copper coins whenever they found the price of 
 copper higher than that whicli was assumed in the 
 making of the coins, and by selling the coins as 
 metal they would make a profit. For this reason 
 the wise principal of coinage of cheap coins is that 
 -of making them of sufficiently less actual value in 
 5 
 
€6 
 
 comparison with the face value to remove all tempta- 
 tion to accumulate them for sale as metal. 
 
 48. FIAT VALUE COIN. 
 
 The second principle on which we can proceed 
 in making pieces of metal serve as money is that 
 of making them in whatever form is most conven- 
 ient, and authorizing them to count as of a certain 
 value for use as money. The law might say, for 
 example, that a piece of copper worth ten cents as- 
 metal should pass as worth a dollar. This would 
 mean that if we had a dollar to pay in taxes or a 
 dollar to pay in wages for labor, or a dollar to pay 
 in settling any debt, we could pay it with one of 
 these coins intrinsically worth only ten cents. 
 There is but one difficulty with money of this kind. 
 If it exists only under the law in question it will 
 not pass in the way proposed. People will uni- 
 versally insist that it is actually worth only ten 
 cents, and all transactions will be made on the 
 basis of its being worth only ten cents. There is 
 nobody who will give more than ten cents for it, 
 and, consequently, it cannot pass for more than 
 that. Even if the government takes it for that it 
 can get along only by requiring that a tax or a 
 duty which ought to be one dollar shall be ten dol- 
 lars. In the same way a laborer who ought to- 
 receive two dollars a day will require twenty in. 
 order to be fairly paid. If he gets only five or ten 
 or fifteen, he will be cheated out of fifteen, ten or 
 five. In all probablity with such money it would- 
 be practicable to steadily cheat the laborer, because 
 of his difficulty in insisting on so high a figure as 
 
67 
 
 twenty dollars for a day's work ; and, on the other 
 hand, when he comes to pay for articles of food or 
 clothing it will be again easy to make him pay more 
 in proportion than he can get on the plea of the 
 small value of the dollars which he pays. This 
 kind of money made by law is called fiat money, 
 and it has been called thieves' money, because just 
 in proportion as it can be handled successfully 
 those who handle it steal from those with whom 
 they deal. They give a ten-cent dollar and take 
 something worth nearer a true dollar. It is one of 
 the worst and most cruel forms of dishonesty. It 
 can be practiced, of course, on a different basis 
 from that of ten-cent dollars. It might be said, for 
 example, by our coinage laws, that ten cents' worth 
 of copper should constitute a shilling, and that five 
 shillings should constitute a dollar. Many people 
 would not understand the trick in this, but would 
 try to make it work, and would be cheated accord- 
 ingly. 
 
 49. A NECESSITY IN CHEAP COINS. 
 
 There is one case, that of cheap coins, in which 
 it is important to have the coin actually worth a 
 little less than its face. It is the case of the cheap 
 copper coins already referred to. If it were 
 attempted to put full standard value into them a rise 
 in the price of the metal above that standard value 
 would tempt traders to get the coins in great quan- 
 tity and sell them for metal instead of passing them 
 for money. 
 
 Coinage laws recognize in the case of small coins 
 that are not worth in metal their face value, that 
 
68 
 
 no one ought to be required to take them as money 
 beyond a certain narrowly limited amount. They 
 are made legal tender, that is, for only five dollars, 
 or a similar small sum. One consideration requir- 
 ing this is that of the objection to the bulk which 
 would have to be handled in using such cheap coins 
 as money for any considerable sum. A man might 
 be tendered, in payment of a sale or a debt, a weight 
 of copper which he could not carry away ; but even 
 if this did not make such coins objectionable for 
 use as money to any extent, they would be objec- 
 tionable solely on the ground of the difference 
 between their real value in metal and their face 
 value as coin. 
 
 50. FULL VALUE METALLISM. 
 
 If we now look higher up among the metals to pla- 
 tinum and silver and gold we find the same princi- 
 ples of money metallism applicable. The corner- 
 stone of honest coinage is to stamp a piece of metal 
 for what it is worth. But by " worth ' ' may be meant 
 the piece in itself, or what it can be exchanged for. 
 We might stamp pieces of gold, silver, and plati- 
 num according to their weight in pounds, ounces, 
 or grains. Our money might consist of gold coins 
 weighing various numbers of ounces and of silver 
 coins also weighing various numbers of ounces, 
 and of platinum coins also weighing various num- 
 bers of ounces; and in all transactions of trade 
 money would go by its weight, so many ounces of 
 gold, or so many ounces of silver, or so many 
 ounces of platinum. Platinum, it may be said here, 
 is not much thought of for use as money, yet Rus- 
 
69 
 
 sia had it in use at one time, and it might be used 
 but for the extent to which there are objections to 
 employing it as money. It is useful in discussing 
 the subject to keep platinum in view, because it is 
 a really precious metal, and can be very well used 
 as money, and also because a view of the objections 
 to platinum as money will help us to understand 
 some other points of the question of money. 
 
 51. METHOD OF KNOWING COIN VALUES. 
 
 If we were, as suggested, to have for money 
 pieces of gold, of silver, and of platinum, passing 
 according to their weight, it would necessitate con- 
 stant knowledge of the relative values of the three 
 metals, and that knowledge would be determined 
 by the prices at which the metals sold in the 
 accepted metal markets. We would have telegrams 
 from all the great money centers giving daily infor- 
 mation as to the amount of silver necessary to bal- 
 ance an ounce of gold, and the amount of platinum 
 necessary to balance either an ounce of silver or an 
 ounce of gold. Transactions would be figured on 
 the basis of the daily relative values of the metals. 
 All settlements would have to be on the basis of 
 counting the different weights offered of the three 
 metals according to the estimate based upon their 
 relative value at the moment of settlement. If, for 
 instance, a trade had been made thirty days since 
 on the basis of paying in a certain weight of plati- 
 num, or its equivalent, the equivalent would have 
 to be taken in either silver or gold, according to 
 the market rate on the day of payment. It might 
 have seemed when the promise of payment in plati- 
 
70 
 
 num was made that platinum was likely to be at 
 the end of thirty days lower than the average in 
 price, and that the equivalent for it in gold or sil- 
 ver would be, say in sixty days, a considerable 
 advance upon the platinum value; and so with 
 reference to either of the other metals. Every 
 transaction would necessarily call for either so 
 many ounces of gold, or so many ounces of silver, 
 or so many ounces of platinum, or their equivalent, 
 on the day of payment. A transaction might, 
 indeed, adopt the relative value on the day of sale 
 of the three metals as the value to be followed on 
 the day of payment, and the promise to pay might 
 refer definitely to given weights of either one of 
 the three metals. But whatever the exact character 
 of particular transactions, the principle underlying 
 them all would be that of observing from day to 
 day the relative values of the three metals in use 
 as money by means of pieces of definite weight. 
 The market would steadily and constantly deter- 
 mine just what weight of silver stood for that day 
 as equal to an ounce of gold, and just what weight 
 of platinum stood for that day as equal to an ounce 
 of gold, or the equivalent to an ounce of gold in 
 silver. 
 
 52. HISTORIC BASIS OF REAL MONEY. 
 
 All human experience from the beginning during 
 not less than six thousand years, has shown that 
 the foundation of money is either metallism on the 
 basis of the intrinsic value of the metal, or some- 
 thing similar to metallism of that kind, with a ten- 
 dency to come to metallism pure and simple. The 
 
71 
 
 Teal principle is that of trade or barter. At first 
 anything may be traded for anything, but conveni- 
 ence soon fixes on something particularly precious 
 to serve as a type of value, A civilization which is 
 a little agricultural, but mostly pastoral, and with 
 very large development of the raising of cattle, 
 might find it convenient to make cattle the type of 
 value, so that, for example, a transaction for the 
 purchase of certain rights of pasture should be 
 made in terms of so many cattle. This would 
 probably mean so many cattle with two or three 
 classes of cattle compared relatively. A payment 
 might mean, for example, ten oxen, or thirteen 
 ■cows, or twenty yearlings, or a part of each, with 
 this scale of relative value. History, however, 
 shows an invariable tendency to metallism as the 
 true method of money. 
 
 S3. SILVER METALISM. 
 
 To a very large extent, if not universally, there 
 has been quite as much readiness to accept silver 
 metallism as gold metallism. During many ages of 
 knowledge of the precious metals, silver seemed 
 quite as good a type of metallism as gold, in spite 
 of the fact that a given weight of gold was esti- 
 mated to be worth, perhaps, twelve or thirteen 
 times as much as the same weight of silver. There 
 were some quite special reasons during the earlier 
 ages of human experience for appreciating very 
 highly the qualities of silver, and for placing it by 
 the side of gold, in spite of the more than ten-fold 
 intrinsic value of the gold. So long as this state 
 of things existed, nothing objectionable resulted 
 
72 
 
 from recognizing it, and acting accordingly. One 
 of the first principles of money is that of being 
 guided by whatever universal estimate exists. If, 
 for instance, it were possible for copper to become 
 so rare as to be precious because of rarity, and for 
 some new electrical treatment of copper to give it 
 even greater interest than gold, the relative value 
 of copper might rise above even that of gold, and 
 it would then be not only legitimate but necessary 
 to recognize that relative value and to act upon it. 
 
 54. GOLD METALLISM. 
 
 Another thing which history shows is the invari- 
 able tendency of trade, of market opinion, and of 
 the common sense of mankind everywhere to con- 
 sider the most precious of the metals as the type of 
 metallism. If, for example, there becomes estab- 
 lished the use for money of stamped weights of 
 gold, silver, and platinum, convenience at once 
 demands that one of them stand as the type. But 
 this type cannot be arbitrarily chosen. The con- 
 venience in question turns entirely upon which of 
 the metals is, by its intrinsic value and by its steadi- 
 ness in relative value, superior to the others. 
 There has never been a doubt as to the immense 
 superiority of gold in intrinsic value as compared 
 with silver. The earliest coinage of which we 
 have any knowledge made gold worth twelve or 
 thirteen times as much as silver, weight for weight. 
 But this alone, decisively as it determines the type 
 of intrinsic value, might not of necessity determine 
 the type of money metallism. If it were the fact 
 that silver at thirteen to one, or sixteen to one, or 
 
73 
 
 twenty to one, or at whatever ratio, held a steady 
 relative value, fluctuating less in relative value 
 than gold, that would give it for money purposes 
 the superiority as a type of metallism But all 
 experience testifies to the exact opposite of this. 
 It is gold, with its greatly superior intrinsic value, 
 which is greatly superior also in the steadiness, 
 with which it maintains its relative value. The 
 convenience, therefore, of counting in gold value 
 and calculating from gold values is greater than 
 any other. It is not, indeed, perfect; that is to 
 say, if we take a variety of important values, val- 
 ues of various food products, and of other articles 
 of universal trade from year to year, and from 
 generation to generation, and take their value rela- 
 tively to the value of gold, or what is the same 
 thing, the value of gold relatively to their value, 
 we may readily enough perceive that there is some 
 fluctuation in the relative value of gold. This, 
 however, does not alter the fact that in gold we 
 have the type which is far nearer the perfect than 
 any other which we can have. Platinum is out of 
 sight below it because of the very great variations 
 in its market value, making it extremely objection- 
 able for employment as money, or, in other words, 
 as a precious metal of steady value. Silver stands 
 between platinum and gold. As a precious metal 
 of steady value it ranks not only below gold but far 
 below it. It cannot be made a type, and to that 
 extent a standard of value anything like as con- 
 veniently as gold can, simply because its variations- 
 in market value are very much beyond those of 
 gold. 
 
74 
 
 55- GOLD THE STANDARD. 
 
 Inevitably, therefore, the money metallist in all 
 trade everywhere throughout the world must take 
 his point of judgment for values from gold instead 
 of from silver. Even if we use three precious 
 metals, gold, silver, and platinum, as money, and 
 cheaper metals as nickel and copper for coins of 
 ■small value and of limited use as legal tender, the 
 ■whole system, in order to be the most convenient, 
 the best in working, and the safest and most satis- 
 factory, must have its basis in gold, so that all 
 transactions can be conducted by calculating the 
 values of everything in gold. This requires that 
 whatever coinage of silver is attempted, or what- 
 ever coinage of platinum is attempted, the princi- 
 ple shall be followed of harmonizing the use of 
 these coins with the use of gold as a standard of 
 value. 
 
 56. SPECIAL CASE OF SILVER. 
 
 The application of this principle is especially 
 important in the case of silver, because silver, 
 although considerably less desirable than gold for 
 use as a standard or basis, is yet capable of such 
 use. If silver is coined at as nearly as possible its 
 intrinsic value at the time of coinage, that is, its 
 value relatively to gold, there might happen later 
 a. rise in the price of silver which would make it of 
 intrinsic value greater than its face value. The 
 result of this would be that traders in money would 
 accumulate the silver in exchange for gold, and sell 
 it for its value as metal, for the sake of the profit 
 which they would make on the difference between. 
 
75 
 
 the coined value and the intrinsic value. It is, 
 therefore, to the interest of steadiness in the use 
 ■of silver money that its intrinsic value should be 
 kept somewhat lower than its face value. On the 
 other hand, the same interest requires that there 
 should not be too much difJerence between the face 
 value and the intrinsic value. If the difference is 
 large, thirty or forty cents on the dollar for 
 instance, then the silver coin is in reality a promise 
 to pay, secured by the sixty cents' worth of silver, 
 and requiring further security for the other forty 
 ■cents. This further security has to be provided 
 for, and provision of such security, on a very large 
 Bcale, through a very large use of silver as money, 
 •can be secured only in one way, by the accumula- 
 tion by government of a corresponding gold reserve, 
 •or at least such a large reserve as will show that 
 the government is in a position to promptly meet 
 both this and any other possible demands upon it 
 >for what may be called full value payment. 
 
 57. GOLD COMMANDS CONFIDENCE. 
 
 One remarkable illustration of the opinion of the 
 world in regard to money is the fact that the great 
 nations of Europe, whose circumstances compel 
 them to contemplate the possibility of having in 
 hand a great amount of money for war purposes, 
 are doing all that they can to lay up a great store 
 -of gold. They know that gold is a precious metal 
 of steady value, and that whatever theories may be 
 in vogue, or whatever practice nations may adopt, 
 the universal market will recognize their gold 
 according to its intrinsic value as standard money 
 
1^ 
 
 which can be depended upon. If they were to 
 accumulate in the same way an immense stock of 
 silver, they would take the chance of finding the 
 silver greatly depreciate on their hands. They 
 might have $500,000,000 in silver, that is $500,- 
 000,000 worth that in gold at the time the silver 
 was purchased, and by the time they got ready to 
 use it it might have fallen forty or fifty per cent, 
 in value. In 1873 silver was worth a little more 
 than 16 to I, and a United States silver dollar was 
 worth a little more than a gold dollar. For eighty 
 years silver had been worth as much or more than 
 16 to I of gold, but in 1894 it was worth less than 
 half that. The silver in one of our present silver 
 dollars is worth about fifty cents. A visitor to 
 Mexico has recently given this illustration: In 
 paying at a restaurant for a dinner, the charge for 
 which was one dollar in Mexican money, he handed 
 out an American silver dollar, and got in change a 
 Mexican dollar containing seven and one-half grains 
 of silver more than the American, and therefore 
 intrinsically worth more than the American. The 
 secret of the exchange was that the American silver 
 dollar was construed as a United States promise to 
 pay one dollar in gold, and it therefore passed for 
 more than twice its intrinsic value. 
 
 58. THE CHIEF PROBLEM OF METALLISM. 
 
 By far the most important problem of metallism 
 is that of two kinds of money, one standard, and 
 the other subsidiary ; the standard money to be in 
 the standard precious metal, gold, and the subsidi- 
 ary money to be in the subsidiary precious metal,. 
 
77 
 
 silver. If this relation of the two metals and of the 
 two kinds of money is not accepted, it means a fight 
 between silver and gold, with the absolute certainty 
 of victory for gold and defeat for silver, carrying 
 injury wherever dependence has been placed upon 
 silver, and prosperity wherever the basis trusted 
 has been gold. This is a result of the nature of 
 things. We might like to have it different, and we 
 may be able to show by argument, that it could be 
 different, and ought to be; but the fact is it will 
 not be as long as the arrangements of mankind are 
 what they are. A single nation, having no rela- 
 tions, whatever outside itself, could adopt a system 
 irrespective of the rest of mankind, but nothing of 
 the sort is possible in matters of finance. Even so 
 immensely strong a nation as the United States is 
 to a large extent necessitated to do what the world 
 at large considers best. The world at large con- 
 siders best the use of the precious metals for money 
 on the general basis of security by intrinsic value 
 for nominal value ; and it further considers that 
 security, in intrinsic value, is much steadier, more 
 certain, and more satisfactory, to be in gold value 
 rather than in silver value. Silver, therefore, is 
 placed by mankind in a subsidiary position, and 
 the interests of silver require that the best be made 
 of that position. 
 
 59. THE TRUE INTEREST OF SILVER. 
 
 What is best for silver turns entirely upon the 
 relative intrinsic value of silver. The maintenance 
 of the subsidiary position requires two things, first, 
 a sufficient intrinsic value in the subsidiary coin to 
 
maintain an average near approach to face value^ 
 and, second, a sufficient face value above the intrin- 
 sic value to give security against the latter being 
 carried by changes in the market price above the 
 former. A silver dollar, that is, should employ as 
 much silver as is not likely to become worth more 
 than its face value. The bulk of silver coinage will 
 thus stand appreciably near in value to the value 
 for which it passes, yet without rising above its 
 face value, with the effect of displacing, for the 
 time, the gold standard. 
 
 It is misleading to speak of the two moneys, 
 gold and silver, as "equal standards of value." 
 We may say "two moneys, gold and silver, side by 
 side," but to make them work together for the best 
 advantage, both of the public interest and of the 
 silver interest, it is absolutely necessary to make 
 the gold the standard of value, and to place the 
 silver, in the matter of the amount of intrinsic 
 value in silver coins, in a subsidiary position. To 
 attempt to give both metals standard or first place 
 is to have no secure standard, and no steady place 
 for either. Silver will stand best both as coin 
 largely employed and as metal in the markets of 
 the world, if we keep it in the best possible subsid- 
 iary place, and do not allow it to rise by the changes, 
 of the market to a standard place. 
 
 The question of coinage of silver, the question, 
 that is, of the amount of intrinsic value relatively 
 to the nominal value to be put into silver coin, 
 ought to be left to the coinage experts. It is a 
 matter for the mint, not a matter for legislation. 
 Legislation should determine the principle on which 
 
79 
 
 the mint shall turn out silver coins as near full 
 value as will not violate the subsidiary basis, but 
 no more than that. The mint experts will readily 
 determine, from experience in matters of coinage, 
 just where the line should be drawn in silver coins- 
 between face value and intrinsic value. 
 
 60. GOLD BIMETALLISM. 
 
 If these principles are carried out we obtain a. 
 system of gold bimetallism, that is, money metal- 
 lism based upon both gold and silver, but with gold 
 as the standard money and silver as the subsidiary 
 money. Any other system for coinage of silver,. 
 regardless of the preservation of the gold standard,, 
 can only have the effect of depriving ourselves of 
 the use of either gold or silver. If we coin silver 
 with a value of metal in each coin above the face 
 value, even if only a little above it, it means that 
 we offer to all comers more than a dollar's worth 
 of silver for a dollar in gold. Everybody that 
 knows enough to trade in money will hand in the 
 gold and take our silver, and we shall find our- 
 selves entirely sold out of the silver and on a basis, 
 of gold monometallism. On the other hand, if we 
 make silver coins which are less in intrinsic value, 
 than their face value, even if only a little less, and. 
 make them full legal tender for their face value, 
 we at once set in motion an effort of all who have 
 our silver to exchange it for our gold, because by 
 the exchange they will make something ; and the 
 result of this will be to get all our gold and leave 
 us with only silver. This will be silver monometal- 
 lism at a cost represented by the difference between 
 
8o 
 
 the value of our stock of gold and the silver which 
 we have taken in place of it. If, for example, we 
 coin silver at i6 to i, and make sach coinage of 
 silver dollars full legal tender, there will be a very- 
 rapid taking away of our gold in exchange for sil- 
 ver with a loss on every dollar, at the present price 
 of silver, of nearly or quite half a dollar. Even if 
 circumstances should considerably carry up the 
 price of silver we would still be in the same -fix, 
 that of losing our gold and getting in place of it 
 silver of less value. If it were possible to make 
 our silver coins of almost exactly the same face 
 value as their intrinsic value, we would still have 
 one or the other of the difficulties mentioned. Sil- 
 ver fluctuates in value much more than gold does, 
 and for most of the time the intrinsic value would 
 be either above or below the face value, and we 
 should have one or the other of the difficulties of 
 which we have spoken. We should, in short, have 
 silver monometallism or gold monometallism, as to 
 money in circulation, just according as the one 
 dollar or the other, silver or gold, stood relatively 
 lowest in market value. The lowest always remains 
 as money, while the highest is disposed of as mer- 
 chandise. Issue of the lower as legal tender equal 
 with the higher is the same thing exactly as sale of 
 the higher at a profit to the money mongers equal 
 to the difference in value of the two. If the United 
 States, for example, with its present stock of six 
 hundred millions in gold, should issue, and make 
 standard and legal tender, silver at i6 to i, when 
 the market ratio is nearer 32 to i, it would be 
 -exactly the same as offering the six hundred mil- 
 
8i 
 
 lions for sale at half price, every full-value, or 
 double-value gold dollar for a half-value silver dol- 
 lar, and of course the foreign money market would 
 take the whole of it, and make three hundred mil- 
 lions, gold value, or six hundred millions new 
 American silver value, by the transaction. A more 
 thoroughly criminal financial operation it would be 
 difficult for even the wildest intellectual hoodlum- 
 isn\ to propose. 
 
 CHAPTER VI. 
 
 THE USES OF MONEY. 
 6l. MONEY MEASURES VALUE. 
 
 The things which money will do, or the uses to 
 which we may put it, may all be covered under 
 four heads. In the first place, it enables us to 
 readily estimate the comparative value of different 
 commodities. We become familiar with the stead- 
 ily maintained value of the precious metal, and we 
 are able to ascertain how much of the metal repre- 
 sents the value of any given commodity and at what 
 values the respective commodities can be offered 
 for exchange. Money thus serves primarily as a 
 standard of value. It has been said that the idea 
 of general value could not be formed without the 
 existence of money. This, however, is an entire 
 mistake. The comparison of commodities neces- 
 sarily results in a general idea of comparative val- 
 ues, and primitive culture shows the rise and preva- 
 lence of this idea at many different stages of com- 
 6 
 
82 
 
 parison of commodities, all the way up to that of 
 comparing all others with the supreme commodity, 
 gold. But it is true that without the existence of 
 some such commodity as gold it would not be easy 
 to form ideas of comparative values and to count 
 these values as they are counted by the use of 
 money. 
 
 62. MONEY REGULATES EXCHANGE. 
 
 In the second place, money serves to facilitate 
 exchanges or trade. It does this solely in conse- 
 quence of and subsequent to the service rendered 
 by money as a ready means of estimating compara- 
 tive values. Writers of distinction have placed the 
 facilitating of exchanges first. But this is not the 
 order of the facts. That order begins with the use 
 of money as a means of determining comparative 
 values, and only after this does money serve as a 
 medium of exchange. The use of money as a 
 medium of exchange is so conspicuous as to natur- 
 ally take the first place in common observation, but 
 some reflection will show that this use arose wholly 
 in consequence of the fact that whatever was 
 employed to facilitate exchanges had shown itself 
 a convenient measure of value. To exchange oxen 
 for wheat through the medium of gold shekels, the 
 oxen must be valued in gold shekels and the 
 wheat also. It is by an unconscious inaccuracy 
 that writers who thoroughly know the subject, 
 mention promotion of exchange as the first func 
 tion of money, and measuring of values as the 
 second. 
 
83 
 
 63. ARISTOTLE ON MONEY. 
 
 Aristotle, the most scientific of the Greek philoso- 
 phers, speaking of the resort of the various tribes 
 of mankind to barter, and the part which it played 
 in the economy of human society, went on to say : 
 
 ' ' From this it came about logically that as the 
 machinery for bringing in what was wanted, and 
 of sending out a surplus, was inconvenient, the use 
 of money was devised as a matter of necessity. For 
 not all the necessaries of life are easy of carriage ; 
 wherefore, to effect their exchanges, men contrived 
 something to give and take among themselves, 
 which, being valuable in itself, had the advantage 
 of being easily passed from hand to hand for the 
 needs of life ; such as iron or silver or something 
 else of that kind, of which they first determined 
 merely the size and weight, but eventually put 
 a stamp on it in order to save the trouble of weigh- 
 ing, and this stamp became the sign of its value. ' ' 
 (Aristotle's Politics, I. 9.) 
 
 It was not so much that men contrived an instru- 
 ment of exchange. They found commodities the 
 value of which everywhere and always could be 
 estimated with comparative ease and certainty. 
 The cowry money shells, pretty shells everywhere 
 the same, so common as to have a steady low value, 
 offered themselves as types of value, value-meas- 
 urers. So of gold or silver or copper by weight. 
 It was easy to employ them as measurers of value, 
 because estimate of their value was relatively easy 
 and certain. After such measurers of value became 
 known, the practice of using them to promote 
 exchange sprang up. 
 
84 
 
 64. MR. HORACE WHITE ON MONEY, 
 Mr. Horace White says, for a definition of money, 
 ""anything that serves as a common medium of 
 exchange and measure of value." But he also 
 says : ' ' The simple truth is that gold is the only 
 money of civilized nations " (p. 112); and again: 
 "The money of the country consists of all the gold, 
 plus all the other instruments of exchange which 
 are redeemable in it." (P. 226.) He further says, 
 in the opening of his chapter on "General Princi- 
 ples : " " Roescher correctly observes that if money 
 were nothing but a measure of value it would on 
 that account, if on no other, possess value. This 
 fact is often contradicted, and still oftener lost 
 sight of. No invention or discovery since the 
 world began has been of so great service to man- 
 kind as that of a common measure of value. ' ' 
 
 "As a matter of fact, however, all the things 
 that have been used as money have possessed other 
 value, and we have the best reason to believe that 
 this other value led to their use as money in every 
 instance without a single exception. We cannot 
 conceive that gold would ever have been brought 
 into use as money if it had not possessed certain 
 qualities of beauty, portability, durability, etc., 
 which caused it to be prized as an article of adorn- 
 ment." (P. 24.) 
 
 The accuracy of this statement of facts cannot be 
 questioned. It brings out very clearly the founda- 
 tion fact of money, the convenience of making 
 certain commodities serve as value-measurers, not 
 under a contrived plan to make them such, 
 but because they manifested themselves as such. 
 
85 
 
 To be perfectly accurate, therefore, Mr. White's 
 definition should say "a common measure of value 
 and medium of exchange. 
 
 65, MONEY AS A STANDARD OF VALUE. 
 
 The third function of money is that of a standard 
 of value applicable to the more or less indefinite 
 future. It is one thing to say that an ounce of gold 
 is of a certain value in trade at the present time and 
 quite another thing to say that it shall be of the 
 same nominal value ten, fifty, or a hundred years 
 from now. Money in proportion as it is good for 
 its purpose, — not to say perfect for its purpose, — 
 ■will serve as a standard for future value, not less 
 than as a standard for present value. 
 
 And here it is of special importance to observe 
 that the urgent necessity for good money of one 
 standard, and that the best which is possible in the 
 nature of things, becomes more urgent still when 
 money is used as a means of designating future 
 values. If we designate the value ten years hence 
 of a hundred acres of land as ten thousand dollars 
 it may make, and in all probability will make, a 
 very great difference whether that is ten thousand 
 dollars in gold or in something else that may be 
 legal tender as dollars ten years hence. Even with 
 the best efforts which could be made to supply sil- 
 ver money along with gold, but without the tie to 
 gold of a substitute coin payable in gold, all the 
 chances are that the ten thousand dollars at the end 
 of the ten years, if paid in silver, would not exactly 
 and fairly pay the debt. One chance at least would 
 be that it would more than pay the debt through 
 
86 
 
 the value of silver at the time. But nearly all the 
 chances are that if there were any change it would 
 be in the other direction. 
 
 66. LABOR AND MONEY. 
 
 The use of money as a standard of value is espe- 
 cially important when looked at from the point of 
 view of labor. Labor depends on future payment 
 in some definite money. No interest is more 
 imperative than that which labor has in the 
 making of money of the best known substance. 
 The payment of labor in pieces of gold always and 
 necessarily means more than any other payment 
 Tvhich labor can accept. There might be indeed 
 good payment in good silver money ; that is, money 
 made as nearly as possible of a real value in silver 
 equal to its nominal value. But all the chances are 
 that payment in silver would fall short, at least a 
 little, of full and fair payment, and that absolute 
 security for a full wage could not be had except on 
 the basis of payment in gold or in substitute money 
 exchangeable for gold. 
 
 Of all the varieties of ignorance blinding man- 
 kind to their true interests, there could hardly be 
 named one more lamentable than the ignorance 
 which should permit labor in the modern world at 
 large to demand the adoption of a money the sole 
 result of which to labor must be the substitution of 
 part payment for whole payment. True as it is 
 that half a loaf is better than no bread, it is simply 
 insane to insist on having a half loaf instead of a 
 whole loaf. Under all circumstances whatever the 
 use of money means trade, and when labor is oflfered 
 
87 
 
 in trade for wages, the labor gains or loses just in 
 proportion as the money in which wages are paid 
 is real money of an intrinsic value fully equal to 
 the nominal value. No class of traders have more 
 interest in gold, as money of the highest standard 
 quality, than that great class some of whose mis- 
 guided leaders are everywhere proposing general 
 acceptance of a system of money which will regu- 
 larly cheat them out of a part, and perhaps a large 
 part, of their wages. 
 
 67. MONEY AND CREDIT. 
 
 Under the head of "A Store of Value," Mr. Jev- 
 ons remarks on a possible fourth function of money 
 as follows : 
 
 "It is worthy of inquiry whether money does not 
 also serve a fourth distinct purpose — that of 
 embodying value in a convenient form for convey- 
 ance to distant places. ... At times a person 
 needs to condense his property into the smallest 
 compass, so that he may hoard it away for a time, 
 or carry it with him on a long journey, or transmit 
 it to a friend in a distant country." 
 
 The obvious justice of this might be conceded 
 without looking farther, but a moment's considera- 
 tion of what use of money all organized business, 
 and notably the business of banking, involves, and 
 of the basis upon which properly issued paper can 
 be made to answer as money, will show that as a 
 store of value capable of supplying a basis of credit, 
 whether in the form of ordinary capital or in the 
 special form of banking capital, money has a fourth 
 function of immence significance. 
 
88 
 68. MONEY AS CAPITAL. 
 
 In the case of any organized business a store of 
 money is the foundation upon which the business, 
 including a certain amount of credit, is built. The 
 incalculable importance of money thus serving as 
 capital, and thus creating credit in aid of the busi- 
 ness, cannot be too strongly expressed. A certain 
 prejudice widely felt against capital would undoubt- 
 edly disappear if the necessary and beneficent uses 
 of even the largest and most questionable aggrega- 
 tions of money, in the notable fortunes of the multi- 
 millionaires, were better understood. What the 
 public good demands is not repression of capital as 
 in any way an evil, but improved service by capital, 
 and this can be got, in all probability, more easily 
 rather than less easily, from the administrators of 
 great aggregates of capital. 
 
 69. MONEY AND BANKING. 
 
 The use of money to create credit, and to carry 
 on the constant supply of organized credit in aid of 
 all kinds of business, is one of the largest and most 
 important facts of the present organization of 
 human affairs. After a lucid explanation of just 
 what banking is, and how it involves (i) money, 
 and (2) bank credits which may be four or five 
 times the amount of the money, Mr. Horace White 
 says : 
 
 "It is found in practice that $200,000 of loans and 
 discounts may be easily carried on $50,000 of cash. 
 Thus, the loans of all the national banks in the 
 United States in October, 1894, were $2,000,000,000 
 and their cash, including silver certificates and 
 
89 
 
 silver dollars, was a trifle less than $400,000,000, or 
 only one-fifth the amount of the loans. The other 
 four-fifths -was credit, and perfectly sound credit, 
 too, for it had passed through one of the severest, 
 panics in our history." * 
 
 70. VALUE OF SOUND BANKING. 
 
 How much banking means may be understood if 
 we recall how Mr. Chase, Secretary of the Treasury 
 in Mr. Lincoln's cabinet, began his great financial 
 operations by insisting, against the wise and hon- 
 est counsel of the great bankers, on taking $170,- 
 000,000 of gold and paying it away, instead of draw- 
 ing checks upon the banks and letting them pay, 
 as usual, in bank notes secured by their gold reserve^ 
 Mr. Chase by this operation broke the back of the- 
 bank power of the country to grant loans and dis- 
 counts to the amount of $850,000,000. The banks 
 could have loaned him $350,000,000 with less dan- 
 ger than the giving up of $170,000,000 of gold, 
 involved. If Mr. Chase had been one of the great 
 kings of finance, and had foreseen how great the 
 war demands would be, he would have bought gold, 
 from abroad with bonds until he had put $250,000,- 
 000 of gold into banks, and enabled them to lend 
 him a thousand millions to carry on the war. But 
 Mr. Chase, as we shall presently see more fully, 
 had no proper knowledge of the dictates of wise; 
 and honest finance. 
 
 * Money and Banking, p. 237. 
 
go 
 
 CHAPTER VII 
 
 THE MINTING AND ISSUE OF MONEY. 
 71. COINAGE. 
 
 The work of the mint in the coining of money is 
 that of making pieces, of gold, or silver, or other 
 metal, according to a rule of weight and fineness, 
 which in the case of government mints has been 
 -enacted as law. Aristotle says that the first coins 
 were pieces of metal with only the weight stamped 
 upon them, and that the weight stamp became the 
 indication of the value of the coin. Such terms as 
 shekel, talent, drachma, pound, penny, peso, livre, 
 and mark, designated weights at first, and so came 
 to designate values. Payment by weight was 
 expressed in Latin by the term stipendium, from 
 which comes our word stipend, applied especially 
 to the pay of a clergyman or other ecclesiastic, 
 laecause the church so long used the Latin. Our 
 English words expend and expense are from the 
 X,atin expendo, which means to weigh out. 
 
 72. AMERICAN MINT LAW. 
 
 The Congress of the United States passed, April 
 2, 1792, "An Act establishing a Mint and regulat- 
 ing the coins of the United States." The unit 
 adopted in this law was the dollar, ' ' of the value 
 of the Spanish milled dollar," with a specified 
 weight of silver.* The gold eagle was ordered to 
 
 " 371.25 grains of pure silver." 
 
91 
 
 be made "of the value of ten dollars or units." 
 The standard was made silver on the very natural 
 ground that silver was the money of common use. 
 In Queen Elizabeth's time in England silver was 
 the common measure of value because it was the 
 money of the people ; and gold was employed in 
 large payments in quantities counted by its current 
 value in silver.* When the celebrated John Locke 
 studied the subject, he advised making silver the 
 standard, with gold coined as commercial money, 
 to pass, not as legal tender, but at its market value 
 in silver. In France Mirabeau took the same 
 ground, and when, in 1834, the United States law 
 was altered, Raguet, who represented the best 
 knowledge of that time, saw the matter as Locke 
 and Mirabeau had seen it, — silver, the' common 
 money of the day, as the standard, and gold trade 
 money, passing at its commercial value. No one 
 yet understood how bad a standard of value silver 
 might prove to be, from its greater liability than 
 gold to drop from a higher market value to a lower ; 
 nor how it might become, from its bulk and weight, 
 a terribly inconvenient medium of exchange. 
 
 73. ORIGIN OF THE DOLLAR. 
 
 The term dollar, daler or thaler, comes from the 
 German word thai, which is the same as dale in 
 English. The Count of Schlick set up a private 
 mint at Joachimsthal, or Joseph's-dale, in Bohemia, 
 in 1581, and turned out, what was rare then, coins 
 of such uniform goodness as to become very widely 
 
 * Jevons' Money and the Mechanism of Exchange, p. 17. 
 
92 
 
 acceptable. These coins were called Schlicken- 
 thalers, or Joachimsthalers ; then for short thalers, 
 which gave dalers or dollars. The term Dollar is 
 thus an historic monument of German science and 
 honesty. 
 
 It was the Spanish dollar which the Congress of 
 the Confederation, in 1785, declared the monetary- 
 unit of the United States. This was because, 
 although the colonies were English, and accounts 
 were kept in pounds, shillings, and pence, there 
 were no English coins in circulation, and the silver 
 coins in actual use were nearly all the Spanish or 
 Mexican silver dollars. When gold and silver were 
 both declared full legal tender in the United States, 
 in 1792, the division of the dollar into hundredths, 
 or cents, was first adopted. This gave it great 
 value as a unit of account. The law of 1792 made 
 dollars, dimes, and cents, the money of account of 
 the United States, but until after the civil war old 
 colony usage, differing in different States, kept on 
 with the divisions of the dollar which the early use 
 of Spanish silver had made familiar. New Eng- 
 land had a shilling which was six to the dollar ; 
 New York one which was eight ; and Pennsylvania 
 one (a levy, or eleven pence) which was seven and a 
 half, and the half of which was a fip (or five pence). 
 The dollar with its decimal divisions is now com- 
 pletely established. Mr. Jevons says of it : 
 
 "It is firmly adopted as the money of a nation, 
 which, as far as human wisdom can penetrate the 
 future, is destined to be the most numerous, rich, 
 and powerful in the world. That nation, which 
 has arisen from the best stock of England, has 
 
93 
 
 absorbed much of tbe best blood of other European 
 nations, and has inherited the richest continent in 
 the world, must have an importance in coming 
 times of which even Americans are barely con- 
 scious." * 
 
 74. FAILURE OF HAMILTON'S DOLLAR. 
 
 The Spansh dollar f amilar to the early American 
 colonies was brought in by the trade with the West 
 Indies. The American dollar, made upon Hamil- 
 ton's plan, passed in trade in the West Indies, as 
 equal to the Spanish. But it was in fact a trifle 
 (2 1-2 grains) lighter than a new silver Spanish 
 dollar. For every American dollar sent to the 
 West Indies a Spanish dollar a trifle heavier could 
 be had, and by getting this recoined into an Ameri- 
 can dollar, a trifle of silver would be left over for 
 the operator. The recoinage was done by the mint 
 free. It only paid about one cent on every dollar, 
 but all the American coinage went to the workers 
 of the operation, the public got the benefit of hardly 
 any of the coins made for them, but had to get 
 along with old and worn foreign coins, and the 
 mint was running almost wholly for the benefit of 
 the moneymongers. 
 
 75. PRESIDENT THOMAS JEFFERSON SUSPENDS COIN- 
 AGE OF THE SILVER DOLLAR. 
 
 President Jefferson, seeing what a failure Hamil- 
 ton's dollar was, stopped the coinage of it, and this 
 suspension lasted until 1836, making forty-four 
 
 ^ Money and the Mechanism of Exchange, p. 172, 
 
94 
 
 years of failure of the original American dollar.* 
 To May ist, 1806, there had been coined only 
 1.433.457 of Hamilton's dollars. Jefferson's order 
 to Robert Pattison, director of the mint, to which 
 the name of James Madison, Department of State, 
 was signed, was in these words : 
 
 "The President directs that all the silver to be 
 coined at the mint shall be of small denomination, 
 so that the value of the largest pieces shall not 
 exceed half a dollar. ' ' 
 
 The fractional pieces were at that time of full 
 value, and nearly all of them went the same way 
 that the dollars had gone. The report of the 
 House Committee on coinage in 1832 stated that to 
 1830 there had been a total coinage at the mint of 
 $37,000,000, of which four-fifths had been taken out 
 of the country, and not more than one-fifth had 
 been circulated. The law legalized the circulation, 
 in 1793, of a variety of foreign coins, which were 
 worn and light weight, and these were the princi- 
 pal money of the people. As Mr. Upton says: 
 "The effort of the country to provide coin for cir- 
 culation of any kind was a dismal failure." 
 
 "jQ. HAMILTON'S GOLD A FAILURE ALSO. 
 
 At the same time that Hamilton's plan failed to 
 give silver, it failed also to give gold coin. Under 
 the ratio of 15 to i gold coin were worth more to 
 sell than to circulate, and however many the mint 
 turned out, the moneymongers took all of them 
 and the public had none. Gold began to grow 
 
 * White's " Money and Banking." p. 41. 
 
95 
 
 scarce, says Mr, White, in 1810, and had wholly 
 disappeared in 1817. Raguet, the finance expert 
 of the time, wrote in 1820 of "the disappearance of 
 gold from the United States," Two years later he 
 said that "although the coinage of gold continued 
 to be large ($1,319,030 in 1820), not a gold coin wa& 
 anywhere to be seen in circulation. " As Mr . Whit& 
 says : "The facilities of the mint were simply used 
 by merchants to certify the weight and fineness of 
 gold for exportation. ' ' Under the law, as Hamil- 
 tion's ideas shaped it, the mint was run, in making- 
 silver coin and in making gold coin, for almost the 
 sole benefit of the moneymongers. The United 
 States had two standard moneys, silver and gold, 
 but none, or next to none, in use. The monarchies 
 of Europe, said Thomas H. Benton, in 1834, had 
 the use of gold; so had the young republics of 
 South America and even the negroes of San Do- 
 mingo; but for twenty years the yeomanry of 
 America had had none ; not even though their mint 
 was making it all the time. Of the mint Benton 
 said: 
 
 ' ' It has coined, and that at a large expense to the 
 United States, 2,262,717 pieces of gold worth 
 $11,852,890, and where are these pieces now? Not 
 one of them to be seen ; all sold and exported. ' ' 
 
 •jy. SILVER THROWN OUT BY PRESIDENT ANDREW 
 JACKSON. 
 
 President Andrew Jackson, June 28, 1834, signed 
 a bill the purpose of which was to put an end to 
 conditions of coinage which had made the United 
 States mint, to use Mr. Upton's words, "a most 
 
96 
 
 Tidiculous and absurd institution. " The bill altered 
 the ratio from 15 to i to 16 to i. There was no 
 ^old in circulation and only about eight millions of 
 fractional silver. The United States Bank had 
 some $13,000,000 of its notes in circulation. The 
 new bill was expected to provide gold, and at the 
 same time get rid of the bank. The actual result 
 was to make a complete riddance of our silver. 
 The ratio 16 to i was borrowed from Mexico, 
 through the proposal of Senator Thomas H. Benton, 
 and against the advice of fiaancial experts, who 
 put the market rate at 15 5-8. The result of this 
 16 to I ratio was to make the silver coin, even more 
 than before, worth more to sell than to keep in use 
 as money. The mint coined the standard silver 
 dollars, but only to enable the holders of silver to 
 have it in good shape to sell. None of it went into 
 •circulation as money. Mr. Upton says: "Silver 
 was taken out of circulation under the operation of 
 the new ratio as effectually as if its further coinage 
 Tiad been prohibited under the penalty of death, 
 and those voting for the measure understood that 
 such would be the result, and when it came they 
 did not plead ignorance or refer to the act as the 
 crime of 1834."* The reason for this was the uni- 
 versal desire to have gold. 
 
 78. HORACE WHITE ON " THE GOLD BILL" OF 1 834. 
 
 Mr. Horace White says of the bill of 1834, that it 
 was termed the Gold Bill, and that it came from a 
 special committee of the House, of which Mr. Camp- 
 
 ■ Coin Catechism, p. 31. 
 
97 
 
 bell P. White, of New York, was chairman. Of 
 the passage of the bill Mr. Horace White gives this 
 account: 
 
 "The bill, as reported to the House by Mr. 
 White, provided for a ratio of i to 15.6, but when 
 it came up for discussion Mr. White moved an 
 amendment making the ratio i to 16; and this 
 amendment was adopted without a division. Then 
 another amendment was offered making the ratio 
 I to 15.625, and it was supported on the ground 
 that it was the true market ratio, and that it would 
 keep gold and silver in concurrent circulation. The 
 adoption of the ratio of i to 16, it was contended, 
 would drive silver out of circulation. Neverthe- 
 less, the amendment was voted down — yeas, 52 ; 
 nays, 127. The bill was then passed in the House 
 by 145 to 36, and in the Senate by 35 to 7. It was 
 perceived on both sides that the passage of the bill 
 would make the United States a gold-standard 
 country in practice. ' ' 
 
 The desire to have gold in circulation, the hope 
 of promoting the production of gold in the Southern 
 states, where the output was already considerable 
 ($868,000 in 1833), and the wish to make gold coin 
 take the place of bank notes, found an opportunity 
 to strike a blow at silver in the fact, that it had 
 proved a dismal failure. The absentee, good-for- 
 nothing-for-money, merely moneymongers and 
 merchandise silver dollar, was left a fact in law, 
 partly because many contracts were in existence 
 expressly calling for payment in silver, and partly 
 because the halves, quarters, and dimes which 
 were the small money of the people, were fractional 
 
 7 
 
98 
 
 parts of the silver dollar, made tinder the same law, 
 and how to make them otherwise was not yet 
 understood. As a matter of fact the small coins 
 were about as hard to keep in circulation as money 
 as the dollar, unless they were worn and so of light 
 weight, but the effort to have them could not be 
 given up ; and so the dollar and its parts were still 
 coined, and the double standard was retained in 
 law although discredited by all experience from 
 1792 to 1834, and although discarded in practice. 
 
 79. FIRST AMERICAN SUCCESS WITH SILVER. 
 
 Although the law of 1 834 gave the United States 
 gold money, the old difficulty, the constant. taking 
 away of the silver, was worse than ever, because 
 gold worth less than its face value could be used to 
 buy not only all fresh native silver coins, but even 
 the best of the foreign coins, leaving very few 
 small coins for use as the necessary money of the 
 common people. In 1852, when the American mint 
 had been sixty years in operation, it had not at any 
 time given the American people silver coin so made 
 and issued as to be of service. A bill which became 
 law February 21, 1853, borrowed from English 
 practice a coinage plan for fractional currency of 
 about seven per cent, less real value than the face 
 value, to be given out at the face value, and to be 
 legal tender for small sums up to $5. Three years 
 later the foreign silver pieces were made redeem- 
 able at a rate slightly above their market value, 
 with the result of buying them all in and having 
 only American coins in circulation. "The country- 
 then," says Mr. Upton, "had for the first time ia 
 
99 
 
 its history (i 776-1 856 — 80 years), its own gold and 
 diver coins circulating side by side, ample in 
 amount, throughout the country, neither driving 
 the other from circulation or skulking because for- 
 eign coins were treated better in law than they 
 were." * 
 
 80. THE SILVER DOLLAR STILL A FAILURE. 
 
 The standard silver dollar was not affected by 
 the law of 1853. It still held its position, but this 
 only meant that the American mint supplied the 
 trade in silver with the American honorary silver 
 piece. It cut no figure as money ; had never done 
 any service as money ; was an absentee, and des- 
 tined to remain so until 1873, when ninety years of 
 continuous failure would bring about its dismissal 
 from service. Mr. Upton says of ' ' the total amount 
 and the character of money in circulation in i860: " 
 
 "According to an estimate of the Secretary of 
 the Treasury the amount was $435,000,000, of which 
 $180,000,000 is known to have been represented by 
 bank notes, leaving $255,000,000 of coin. This 
 coin was admittedly made up of our gold and sub- 
 sidiary coinage, of which the latter was probably 
 not above $43,000,000. The estimates of aggregate 
 specie circulation and of its division between gold 
 and silver at that time vary somewhat, but in no 
 case does the estimate include any silver dollars as 
 in circulation. ' ' f 
 
 * Coin Catechism. 
 
 t Coin Catechism, p. 39, 
 
lOO 
 8l. THE LEGAL TENDER PAPER DISASTER OF 1862, 
 
 The progress of the United States in the direc- 
 tion of good money, of the right kinds, both gold 
 and silver, and ample in amount, was arrested in 
 1862 by one of the most discreditable and disastrous 
 departures from sound money principles on record 
 in history. For the purposes of the great civil war 
 which began in 1861, the United States, by August 
 of that year, needed large sums of money, which 
 could be had only by large use of the national 
 credit. The Secretary of the Treasury was Salmon 
 P. Chase, a man of unsurpassed character and gen- 
 eral ability, and the representative, in Mr. Lincoln's 
 cabinet, of Ohio, a State deservedly counted as the 
 heart of the Republic. The sole question confront- 
 ing Mr. Chase was how to wisely and honestly use 
 the national credit in getting large sums of money ; 
 it might be many of them, one after another, into 
 the indefinite future. But the high intelligence 
 and lofty patriotism of Mr. Chase not only took 
 no note of the plain dictates of wisdom and honesty 
 in finance, but they pushed aside the advisers who 
 knew those dictates thoroughly, and plunged him 
 into precisely the abyss which the worst rascals of 
 criminal finance would have dug for him, that of 
 getting money on the unsecured and irregular 
 paper of the United States, instead of on regular 
 paper with the best possible security. The better 
 the paper the more would it be honestly handled ; 
 the worse the paper the more would the rascals be 
 able to use it to their profit. Mr. Chase put the 
 United States completely into the hands of the 
 rascals, with a profit to them of hundreds of mil- 
 
lOI 
 
 lions, every dollar of whicli might have been saved 
 by wise and honest dealing -with the accredited 
 experts of finance. 
 
 82. HOW MR. CHASE BROKE THE BANKS. 
 
 The amount of gold in the country was unusually 
 large and banking operations based on it were 
 unusually safe. The most obvious wisdom was to 
 make the most of this, carefully guarding the gold 
 as a reserve in the banks, and borrowing of them, 
 not by taking their gold, but by an arrangement to 
 draw checks upon them, which they would pay in 
 the usual way, to some extent, perhaps, in gold, 
 but presumably in their notes. Mr. Chase nego- 
 tiated three loans of fifty million dollars each, at a 
 meeting, August 9, 1861, with the representatives 
 of the chief American banks, in New York, but he 
 refused their advice to take the money through 
 checks drawn upon them, and insisted, with lofty 
 but terribly mistaken self-consciousness of high 
 honor in finance, upon having the gold, and upon 
 having demands paid in gold which could just as 
 well as not have been paid in bank notes. One 
 hundred and seventy million dollars in gold were 
 at considerable expense carried to different parts of 
 the country, and paid away, when it was in reality 
 worth more than its nominal value, and as the bank 
 reserve of the country was worth vastly more than 
 Mr. Chase got for it. A worse blunder of opinion- 
 ated ignorance could not have been made, at that 
 moment, but the moment speedily came in which 
 the opportunity for worse was presented, and 
 meanwhile Mr. Chase had not learned to take advice 
 
I02 
 
 from those who knew the dictates of wisdom and 
 honesty in finance. 
 
 83. SEVENTEEN YEARS OF PAPER MONEY. 
 
 The effect of Mr. Chase's disregard of the advice 
 of James Gallatin and other representative Ameri- 
 can bankers, not to take away from the banks the 
 coin basis of credit, was to reduce them to suspen- 
 sion of specie payment, December 28th, 1861, — a 
 suspension which lasted until December 31, 1878, 
 and left upon the greatest period in American his- 
 tory a blot of discredit and dishonor which the 
 patriot cannot sufficiently regret. Mr. Upton's 
 excellent ' ' Coin Catechism, ' ' after briefly sketching 
 what was done in the old days of colonial inexperi- 
 ence and perhaps desperate necessity, raises the 
 question whether anything of the kind could have 
 happened under a government organized on the 
 basis of our Constitution ; and the facts compel this 
 answer : 
 
 "In 1862 the government of the United States 
 authorized paper promises in the form of notes, 
 silent as to the time of their redemption, to be 
 equal in debt-paying power to the metallic money 
 they represented, though at the time the promises 
 were worth in current exchange less than one-half 
 as much as the coin itself. ' ' 
 
 ' ' The Supreme Court of the United States held 
 that the National government by its inherent 
 power of sovereignty had a right to change the 
 terms of all contracts whenever the law-making 
 power deemed such a change necessary for the wel- 
 fare of the countrj'. " 
 
I03 
 
 But it was not a question of desperate peril to 
 the country ; not in the least ; it was a question 
 of wisely and honestly using the national credit to 
 get money to carry on the war; a question of 
 straightforward honest borrowing, at a saving, 
 as it would have proved, of hundreds of millions, or 
 of round-about, rascally, lawless borrowing, at a 
 loss of hundreds of millions, not to speak of the 
 cheating, by payment in half worthless money, of 
 all persons under contract to give service at fixed 
 rates. The issue of unsecured, irregular promises 
 to pay, making them legal tender, and requiring 
 that they should be used as money, the payment of 
 duties on imports and of interest on the regular 
 public debt being alone excepted, was a long way 
 off from the easier, the cheaper, and the more hon- 
 est, not only borrowing of money, but carrying on 
 of the business of the nation. It was an act of 
 financial and moral lawlessness, absolutely inex- 
 cusable, and impossible to have occurred, had not 
 our system put in the place of chief responsibility 
 a man who could venture to disregard the advice 
 of financial experts, in dependence upon his own 
 uninstructed, and in fact lamentably incompetent 
 judgment on q.uestions of money. 
 
104 
 CHAPTER VIII. 
 
 FIATISM AND CURRENCY. 
 84. LEGAL FIAT AND MONEY. 
 
 Fiatism is a method of making current by law, 
 making to pass, that is as money, or to pass in bar- 
 ter instead of money, something which would not 
 pass at all, or would not pass exactly the same, but 
 for the law. For pure honest money in gold and 
 silver current by weight, there is no necessity for 
 any government fiat, but there is convenience, first 
 in a government stamp certifying the weight and 
 fineness of either bars or coins of gold or silver, 
 and second in a law designating the conditions of 
 legal tender of such bars, ingots, coins, or other 
 pieces of precious metal. As with other matters of 
 recognized right the administration of which is 
 facilitated by state organization and state laws, all 
 matters of money are given security by laws prop- 
 erly recognizing what is right and what the public 
 interest requires. Coinage of gold and silver done 
 by government and with the government's stamp 
 upon it, is the highest practical security to those 
 who handle coins, that they are what they profess 
 to be. Governments usually forbid coinage by 
 private persons, not because it could not be done, 
 but because the opportunity to cheat is such as to 
 make it extremely difficult to provide securities 
 against it. It is of value, therefore, even for gold 
 and silver current by weight, to have the pieces 
 weighed and stamped by the government, and to 
 
105 
 
 have distinct notice by law of the manner of their 
 currency. So far, moreover, as money consists of 
 coins in a secondary position, like those of gold 
 under a silver standard, or those of silver under a 
 gold standard, and all subsidiary small coins, legal 
 fiat is necessary to determine how such coins shall 
 pass ; to what amount they shall be legal tender, 
 and whether they shall be passable, up to the limit 
 of tender, on a parity with the standard superior 
 money. 
 
 85. LEGAL FIAT AND THE STANDARD. 
 
 A supremely important governmental act is that 
 of determining a money standard of value. For 
 many centuries the nations of Europe had no sys- 
 tem of proper regulation and the result was a con- 
 fusion of varying standards enormously injurious 
 to the public, and as enormously beneficial to the 
 money brokers. In the seventeenth and eighteenth 
 centuries most, if not all civilized countries, 
 employed both gold and silver as money of full 
 legal tender, the legal ratio between them being 
 fixed by some such fiat as that of 15, 15 1-2, or 16 
 to I, which means that 15, 15 1-2, or 16 ounces (or 
 pounds) of coined silver shall pass as equal to one 
 ounce (or pound) of coined gold ; the theory being 
 that this is the ratio of value between the two 
 metals by weight in the metal market, or at least 
 near enough to it to answer coinage and currency 
 purposes. Experience, however, has always shown 
 the impossibility of keeping the metals at parity 
 of value with each other, and the absolute certainty 
 that whichever of the two standard metals chanced 
 
io6 
 
 at any moment to be of a higher value than the 
 other in the market, the money changers would 
 take all of it out of circulation, giving in exchange 
 coin of the cheaper metal, and making a profit for 
 themselves by the transaction in proportion to the 
 value of the one above the other. What may be 
 called the see-saw of the standards has been for 
 ages the money brokers' opportunity to regularly 
 fleece whatever governments and people undertook 
 the foolish experiment of trying to have two stan- 
 dards of value. 
 
 86. THE ENGLISH LAW OF STANDARD. 
 
 The first nation to comprehend the situation, and 
 to provide a remedy by choosing of the two stan- 
 dards that one which was manifestly the best, and 
 which could be made the steadiest and most secure, 
 -was England, in the adoption in 1816 of the gold 
 standard. One of the most famous monetary 
 studies ever made was that made by the Earl of 
 Liverpool, whose ' ' Treatise on the Coins of the Realm ' ' 
 first set forth the principles of a composite money 
 system, in which gold should take the place of a 
 standard, and silver should occupy a subordinate 
 position, with limitations to its coinage and use 
 suited to keep it in that position. In this com- 
 posite system coins of gold, such as the English 
 sovereign and half sovereign, are adopted as the 
 standard of value and principal legal tender, and 
 subordinate coins of silver are furnished for the 
 purpose of sub-division and as legal tender for lim- 
 ited amounts only. These subordinate coins are 
 made of such weights that their value as metal 
 
I07 
 
 cannot rise above the nominal value at which they 
 are exchangeable for gold. 
 
 The essential part of the Act of Parliament of 
 1816, on which the English monetary system is 
 based, was in these words: "And whereas at vari- 
 ous times heretofore the coins of this realm of gold 
 and silver have been equally a legal tender for 
 payments to any amount, and great inconvenience 
 has arisen from both those precious metals being 
 concurrently the standard measure of value and 
 equivalent for property ; and it is expedient that 
 the gold coin, made according to the indentures of 
 the mint, should henceforth be the sole standard 
 measure of value and legal tender for payment, 
 without any limitation of amount, and that the 
 silver coin should be a legal tender to a limited 
 amount only, for the facility of exchange and com- 
 merce: Be it therefore enacted, that from and 
 after the passing of this Act, the gold coin of this 
 realm shall be and shall be considered and is hereby 
 declared to be the only legal tender for payments, 
 except as hereinafter provided, . . . and no 
 tender of payment of money made in the silver 
 coin of this realm of any sum exceeding the sum of 
 forty shillings at any one time, shall be reputed a 
 tender in law." 
 
 87. THE ENGLISH LAW OF SILVER. 
 
 For securing the subordinate position of silver, 
 in this English system of gold-bimetallism, the 
 weight of the silver coin was reduced about six per 
 cent. ; and with the recent considerable fall in the 
 price of silver, this now means that an English 
 
io8 
 
 silver coin is worth hardly more than half its face 
 value, and justice to silver as good money kept 
 reasonably near in intrinsic value to standard 
 money, although not itself a standard, manifestly 
 demands considerable increase in the weight of the 
 silver coin. This, however, is of less importance 
 to England from the fact that the coinage of silver, 
 which is at the discretion of the mint, is kept 
 within narrow limits; limits, in fact, which go far 
 to make the English practice one of gold mono- 
 metallism of money, qualified by the use of Bank of 
 England notes, which are paper payable in gold ; 
 and yet the case of India, a part of the British 
 empire, with its enormous employment of silver as 
 money, practically makes the whole British system 
 one of gold standard bimetallism of money. 
 
 88. FRAUD BY FIATISM. 
 
 The fiatism which has had the largest place in 
 history, and which still lingers to plague the world 
 with its iniquitous and mischievous operations, is 
 that by which governments have issued as money 
 either coins or paper more or less false and fraudu- 
 lent in character, or at least more or less doubtful 
 and worthless, for lack of security, or even expec- 
 tation of security, for their payment. The chief 
 Impenitent Thieves of history in this matter have 
 been unscrupulous kings and reckless despots, 
 undertaking by criminal monetary schemes to rob 
 their subjects. So constantly, however, and so 
 largely was this method of criminal finance worked, 
 during centuries of universal ignorance and gen- 
 eral denial of popular rights, that something like a 
 
109 
 
 tradition of its legitimacy was established, as in the 
 same way a tradition of the legitimacy of lotteries 
 was established. Hence the possibility of such an 
 extraordinary, and we must say such disgraceful ex- 
 hibitions of facility in criminal finance as appeared 
 in the early American colonies, and during the 
 American Revolution, in the issue of paper money, 
 under circumstances not only doubtful to the last 
 degree as to proper prospect of payment, but thor- 
 oughly discreditable and dishonest in respect of the 
 means taken to provide securities for payment. 
 
 89. EARLY AMERICAN FIATISM. 
 
 In the early history of the American colonies 
 fiatism was very largely and very disastrously 
 applied, both in the regulation of barter, to make 
 commodities pass at a price fixed by law, or at the 
 current price, and in the issue of paper money. In 
 Massachusetts in 1631 a fiat of the General Court 
 ordered that corn should pass for payment of all 
 debts at the price it was usually sold for, unless 
 money or beaver skins were expressly stipulated. 
 This legislative fiat continued in force and opera- 
 tion for more than half a century. In 1635 musket 
 balls, to the extent of twelve pence in one payment, 
 were made passable the same as coin. In 1640 the 
 prices at which different grains might be tendered 
 were fixed by law ; Indian corn at four shillings 
 per bushel, wheat at six shillings, rye and barley 
 at five shillings, and peas at six shillings. 
 
 The currency of Indian wampum money was in 
 part left to trade estimate, depending on the fact 
 that the Indians would take it in payment for 
 
no 
 
 beaver skins and that the beaver skins were a good 
 commodity for export. In course of time the 
 beaver trade declined and this destroyed the value 
 of the wampum money to the whites. A fathom 
 of wampum, consisting of 360 white beads, passed as 
 worth sixty cents. In the years 1641-1643 a Mas- 
 sachusetts fiat made wampum legal tender to the 
 amount of ten pounds. This was then reduced to 
 forty shillings, and for taxes the wampum money 
 was not received at all. 
 
 The story of fiatism in Virginia, applied to the 
 regulation of barter, affords a most remarkable 
 illustration of ignorance and folly seeking the pub- 
 lic good, yet accomplishing little but mischief and 
 injury. The attempt especially to make tobacco 
 pass in trade at values fixed from time to time by 
 law, showed many varieties of failure without any 
 example of success. The public opinion which sus- 
 tained it was largely that of the planters and farm- 
 ers, who thought they would be benefited by fiat 
 values put upon their produce; but no matter 
 what scheme was tried, failure and failure only was 
 the invariable result. 
 
 90. A CELEBRATED INSTANCE OF EXTREME FIATISM. 
 
 One of the most desperate fiatist attempts ever 
 made was that of France when her finances were 
 under the control of the celebrated financier and 
 projector of commercial schemes, John Law. On 
 the nth of March, 1720, a government fiat, designed 
 to help the value of paper money, decreed that, 
 after the first of May, gold should no more be used 
 in the payment of debts, nor silver after the first of 
 
Ill 
 
 August, and that no more of either metal should 
 be coined; but the utmost efiforts of a despotic 
 government to carry out this fiat proved of no avail 
 whatever. Gold and silver held their own exactly 
 the same, and the value of the paper decreased faster 
 than before. The experience of one month com- 
 pelled the withdrawal of the decree, and although 
 other fiat efforts were made, and in the course of 
 fifteen months the fiat value of gold was changed 
 twenty-eight times and that of silver twenty-five 
 times, no real effect upon the market value of these 
 metals was produced, nor anything whatever accom- 
 plished in support of the value of the paper money. 
 
 91. THE COLONIAL FIAT MONEY CRAZE. 
 
 The colonial paper money story of America, 
 Massachusetts in the lead, is one of the most dis- 
 creditable in monetary 'listory. It reveals patriot- 
 ism in alliance with financial crookedness of the 
 most unblushing character. In 1690 the General 
 Court of the Colony of Massachusetts issued ;^4o,ooo 
 in due bills, not legal tender and not bearing inter- 
 est. It was a dishonest forced loan. The bills 
 were not payable at any particular time, and they 
 were receivable only for taxes and for such com- 
 modities as the colonial treasury might have in 
 stock. They were issued in payment of the wages 
 of soldiers who had served in an expedition against 
 Canada. The soldiers lost two-fifths of their face 
 value, from the cut rate at which they had to pass 
 them. In 1692, when it was too late to be of any 
 benefit to the soldiers, the bills were made legal 
 tender in all payments, receivable for taxes at five 
 
112 
 
 per cent, better than silver, and redeemable in sil- 
 ver at the end of twelve months ; provisions which 
 caused them to pass at par with silver. The doubt- 
 ful character of even the later form of these prom - 
 ises to pay was not seen. It did not occur to a 
 public without experience of finance, that such 
 promises would prove worthless if they should be 
 issued in excess of ability of the treasury to take 
 care of them. They were so issued with reckless 
 disregard of consequences. The success of Massa- 
 chusetts in making paper pass at par with silver in 
 1692, before experience had begun to show how the 
 scheme would ultimately work, started throughout 
 the colonies an epidemic of confidence in paper 
 money. 
 
 92. ELEMENTS OF THE DELUSION. 
 
 Even when the intelligent and honest saw how 
 certainly the criminal folly of the scheme would 
 work disaster and dishonor, they were powerless 
 to arrest the delusion. The ignorant, the debtor 
 class, vaguely counting partial escape from pay- 
 ment of debt one of their rights, and the specula- 
 tors who could profit by monetary disorder, were a 
 majority of the voters. The intellectual and moral 
 hoodlumism of the movement for cheap money and 
 plenty of it, went to the extreme of carrying laws 
 to compel owners of property offered for sale to 
 accept paper the same as silver. 
 
 93. THE OUTCOME OF FIATIST FINANCE. 
 
 Those who had been compelled to take the paper 
 naturally supported in many cases efforts to make 
 it pass. But with a great deal of robbery and out- 
 
"3 
 
 Tage, of cruel wrong unwittingly done and of 
 scoundrelism rampant, the invariable result, wher- 
 ever paper money was issued, was depreciation and 
 loss, disaster and dishonor. The bills of the colony 
 of Massachusetts became worth only one-eleventh 
 of their face, and to return to specie payments 
 Massachusetts used the rascal method of repudiat- 
 ing nine-tenths of her outstanding promises to pay. 
 The trouble was greatest in the four colonies which 
 then constituted New England. Puritan patriotism 
 ■went shamelessly wrong through the craze of the 
 uninstructed and unprincipled for cheap money, for 
 escaping honest payment of debts, and for making 
 ■gain by legal manipulation instead of by honest 
 labor. Mr. Horace White, in a full chapter on the 
 subject, showing how Massachusetts led the way, 
 and how the plague spread to the other colonies, 
 does not exaggerate when he says: "No kings, 
 however tyrannical, ever debased the money in 
 circulation so recklessly, persistently, and outrage- 
 ously, as the colonial assemblies. ' ' * The cele- 
 brated freethinker, Thomas Paine, all whose pre- 
 judices were popular and. patriotic, said, in an essay 
 written in 1786, that "the concise history of paper 
 money schemes ' ' would show that they originated 
 with speculators planning some swindling opera- 
 tion and debtors who hoped to cheat their creditors. 
 One of the uses to which fiat paper was put was 
 that of making loans to private persons, and espe- 
 cially to the land-owners, who everywhere con- 
 trolled the legislative assemblies, and carried their 
 
 * Money and Banking, p. 121. 
 
 8 
 
114 
 
 corrupt schemes. The manifest shameless crimi- 
 nality thus introduced into political business- 
 throughout the colonies provoked Paine to declare 
 that a man who proposed a law of legal tender 
 ought to be put to death. 
 
 94. FIATIST ZEAL FOR AMERICAN INDEPENDENCE. 
 
 There is no more impressively significant lesson, 
 for Americans of English descent to ponder, than 
 that of the story of colonial bluster against English 
 effort to keep American money sound and honest. 
 The colonists were not disposed to cease to be Eng- 
 lish ; it was to their rights as Englishmen that they 
 appealed; and foremost among those rights they 
 placed, and stoutly contended for, that of disastrous 
 and dishonest issue of paper money. Nearly the 
 whole of the earlier quarrel of the colonies against 
 the mother country, for the space of seventy-five 
 years, was the shameless quarrel of the colonial 
 populace and demagogues against perfectly just and 
 wise restraint, through the colonial governors, of 
 unbridled license to work iniquity, not against Eng- 
 land, but against their own people ; the cruel iniquity 
 of putting out paper money, through the handling of 
 which large numbers of the unscrupulous and crafty 
 could unmercifully rob those with whom they had to 
 deal. It was not, indeed, American; the scoun- 
 drelism was imported from England, and much of 
 it made a stern conscience of wild west new world 
 Yankeeism, scorning to know either instruction or 
 restraint; the real intelligence and conscience of 
 the makers of new commonwealths were overborne, 
 sometimes even dragooned by circumstances into 
 
"5 
 
 figuring conspicuously on the wrong side, or even 
 swept away in the delusion ; but that large sense 
 of liberty and law which was to characterize Ameri- 
 can development of the better and the dominant 
 type, would have kept American money honest 
 and American finance sound. Bui it was not to be 
 until after the Revolution ; and after the Civil War ; 
 and after the final education of the American 
 masses to comprehend the wickedness and the folly 
 of fiatist cut- value fifty -three-cent dollars of cheap 
 silver.* 
 
 95. CONTINENTAL FIATIST MONEY. 
 
 The Continental Congress, in respect of financial 
 matters, and most of all in its issuing to its own 
 people of absolutely worthless paper money, was 
 little better than a den of thieves — strictly honor- 
 able thieves, orators of lofty eloquence, zealots of 
 liberty, enthusiasts for freedom, and in some 
 respects among the greatest men in history — yet 
 hardly less issuers of fraudulent paper and robbers 
 of the American people, to whom they gave that 
 paper in payment of supplies for the army, than 
 if they had been a band of counterfeiters. By the 
 time Yorktown was fought they had justly earned 
 the detestation of their subjects, as much as any 
 robber despot could have done, and but for the 
 colossal honesty and discretion of George Wash- 
 
 * Mr. Horace White's chapter in " Money and Banking'' pp. 120- 
 134, on " Colonial Paper Money," goes more fully than the above 
 summary account into the facts of colonial kicking against the 
 pricks under the administration from England of righteousness in 
 matters of money. 
 
ii6 
 
 ington, they would have -wrecked the cause which. 
 they undertook to direct. 
 
 Mr. Horace White relates, in his chapter on "Con- 
 tinental Money," the story of this discreditable and 
 disastrous fiatism, undertaking to make practically 
 worthless paper pass as money. After noting the 
 fact that $15,000,000 of this continental currency 
 had been issued before independence had been 
 declared, Mr, White says: 
 
 "From this time the demon of fiat money had 
 possession of the country and worked its will on 
 the inhabitants. The issues ran on in an increasing 
 volume till they amounted to two hundred and 
 forty-two million dollars in the year 1779. In 1781 
 the whole mass became worthless. Mr. Pelatiah 
 Webster, a merchant of Philadelphia and an ardent 
 patriot, wrote while the money experiment was 
 going on : 'We have suffered more from this than 
 from every other cause of calamity ; it has killed 
 more men, pervaded and corrupted the choicest 
 interests of our country more, and done more injus- 
 tice than even the arms and artifices of our ene- 
 mies.' Mr. Webster, in one of his essays, said that 
 not more than one man in ten thousand was capable 
 of understanding the subject. . . . With the 
 mass of the people nothing could be done. All of 
 them, the wise and the unwise together, were hur- 
 rying to a cataclysm. 'The fatal error,' says Web- 
 ster, 'that the credit and currency of the continen- 
 tal money could be kept up and supported by acts 
 of compulsion entered so deep into the mind of 
 Congress and all departments of administration 
 through the states that no consideration of justice, 
 
117 
 
 religion, or policy, or even experience of its utter 
 inefficiency, could eradicate it. It seemed to be a 
 kind of obstinate delirium, totally deaf to every 
 argument drawn from justice and right, from its 
 natural tendency and mischief, from common sense 
 and even common safety. This ruinous principle 
 was continued in practice for five successive years, 
 and a,ppeared in all shapes and forms, that is, in 
 tender acts, in limitations of prices, in awful and 
 threatening declarations, in penal laws with dread- 
 ful and ruinous punishments, and in every other 
 way that could be devised, and all executed with a 
 relentless severity, by the highest authorities then 
 in being, namely, by Congress, by assemblies and 
 conventions of the states, by committees of inspec- 
 tion (whose powers in those days were nearly sov- 
 ereign), and even by military forces ; and though 
 men of all descriptions stood trembling before this 
 monster of force without daring to lift a hand 
 against it during all this period, yet its unrestrained 
 energy ever proved ineffectual to its purposes, but 
 in every instance increased the evils it was designed 
 to remedy and destroyed the benefits it was intended 
 to promote. Many thousand families of full and 
 easy fortune were ruined by these fatal measures 
 and lie in ruins to this day, without the least bene- 
 fit to the country or to the great and noble cause in 
 which we were then engaged.' " 
 
 "Judge Story," says Mr. White, "referring to 
 the Revolutionary and post-Revolutionary legal 
 tender laws, says : ' They entailed the most enorm- 
 ous evils on the country and introduced a system 
 of fraud, chicanery and profligacy which destroyed 
 
ii8 
 
 all private confidence and all industry and enter- 
 prise.' " 
 
 The excessive fanaticism into which zeal for lib- 
 erty is easily betrayed had the effect then, as it 
 still has the effect, of making men blind, not only 
 to the dictates of sound policy but to the demands 
 of common honesty. 
 
 96. THE CIVIL WAR " GREENBACK" FIATISM. 
 
 In a further chapter on "The Greenbacks," Mr. 
 White shows by an unanswerable statement of 
 facts how the issue of legal tender notes, and of 
 the treasury notes known as Greenbacks, was an 
 altogether discreditable and disastrous resort to 
 fiatism, when the only honest and rational method 
 of meeting the expenses of the government, even 
 in the greatest crisis, was that of taxation and of 
 borrowing upon the security of bonds. 
 
 The financial incompetence of Secretary Chase, 
 of the Treasury Department, together with the 
 personal credit which his commanding intellect and 
 liigh character gave him, were in large part, as Mr. 
 White shows, responsible for the wretched fashion 
 in which, by fiatism of the most illegitimate char- 
 acter, the nation's finances were mismanaged. Mr. 
 E. G. Spalding, of Buffalo, a successful banker, Mr. 
 Samuel Hooper, an eminent merchant of Boston, 
 and Thaddeus Stevens, of Pennsylvania, chairman 
 of the committee of ways and means and leader in 
 the lower house of Congress, assisted to give char- 
 acter to a scheme which the great representatives 
 of American banking interests and the chief repre- 
 sentatives of American finance remonstrated 
 
119 
 
 against. The plan urged by the bankers for bor- 
 rowing honestly in the money market by the sale 
 of bonds for what they would bring was violently 
 objected to by Mr. Spalding as likely to knock down 
 government stocks to seventy-five or even sixty 
 cents on the dollar, but under the plan adopted to 
 carry out Mr. Spalding's views, the government 
 paper went down to forty cents on the dollar, and 
 the creditors of the government, including the sol- 
 diers and the laboring men, were incidentally 
 cheated out of more than half their dues. 
 
 The whole scheme, as Mr. White shows, added 
 $870,000,000 to the cost of the war. As Mr. White 
 unanswerably demonstrates, the large general way 
 in which Secretary Chase commanded the confi- 
 dence of the country and the effort which he made 
 to carry his head high and not let the United States 
 appear as a borrower selling bonds below par, 
 worked most disastrously for the national finances. 
 
 97. THE COSTS OF AMERICAN FIATISM. 
 
 However great our country, and however excel- 
 lent the motives governing our statesmen, we are 
 punished none the less severely for whatever finan- 
 cial mistakes we make. Benjamin Franklin, the 
 wisest man of the colonial times, and especially 
 notable in history as a laboring man who, by self- 
 education and genius rose to the highest distinction, 
 both in statesmanship and in science, urgently 
 advised against continental paper money without 
 any security for the payment of the interest at least 
 in "hard dollars." The patriot Congress voted 
 that it was impracticable, but in this they were 
 
I20 
 
 grievously mistaken. The determination to pay 
 in honest hard dollars may not go very far at the 
 time in getting the dollars, but it goes much farther 
 than fiat issue of paper, and it secures credit for 
 borrowing upon terms much better than those to 
 which we have always had to come after resort to 
 fiatism. It may be set down as beyond doubt that 
 the United States, taking the colonial times with 
 our own times, have fooled away, by resort to fiat- 
 ism with its inevitable and invariable failure, not 
 less than $1,000,000,000. The fact that we have 
 been a great country, and are on the wa}' to become 
 the greatest of countries, and that the average of 
 intelligence and character in our people is higher 
 than anywhere else in the world, cannot in the least 
 save us from the discredit and dishonor, the disas- 
 ter and destruction of national interests, which are 
 the inevitable result of any fiatism whatever, by 
 which it is attempted to make a paper or other sub- 
 stitute for honest hard dollars. 
 
 CHAPTER IX. 
 
 BIMETALLISM. 
 
 98. " WHAT IS BIMETALLISM?" 
 
 A public journal of July 17, 1895, had the follow- 
 ing under the head of "Meaning of Bimetallism." 
 
 "In the agitation going on over the financial 
 question it is time that, if possible, some authority 
 should establish the meaning of the much-used, 
 word, 'bimetallism.' 
 
121 
 
 "In a volume recently published by Mr. Muhle- 
 man, deputy assistant treasurer of the United 
 States, entitled 'Monetary Systems of the World,' 
 the author gives the following definition: 'By 
 bimetallism, strictly defined, is meant the free and 
 unlimited coinage of both gold and silver into coins 
 of full debt-paying power. Not the mere use of 
 the double standard, but the actually open mints 
 on the terms given above. No country in the 
 world is, therefore, bimetallic to-day, since those 
 conditions do not exist anywhere. ' Other authori- 
 ties just as competent as Mr. Muhleman define 
 bimetallism as 'the concurrent circulation of gold 
 and silver coins at a fixed ratio.' " 
 
 "It is absurd to hold that 'bimetallism' and 'fre& 
 silver-coinage' are synonymous. The report of the 
 director of the mint gives the following as the 
 bimetallic countries: United States, France, Bel- 
 gium, Roumania, Netherlands, Turkey, Japan, the 
 Straits Settlements and Cuba. When two govern- 
 ment officials like the director of the mint and the 
 deputy assistant treasurer disagree as to the mean- 
 ing of a word, to such an extent, it is time for its 
 meaning to be fixed by some competent authority. ' ' 
 
 The difficulty with the whole subject grows out 
 of the fact that no proper study of the history is 
 made the basis of the explanations offered. Such 
 study would show very clearly that historic bimet- 
 allism had no theoretical ground, that it was an 
 effort to have both gold and silver money together, 
 and that it adopted one or another plan to secure 
 this, as very imperfect knowledge suggested, and 
 got upon the ground of the double standard, free 
 
122 
 
 -coinage, and equal legal tender of both gold and 
 silver, because the bad finance involved was not 
 yet understood. 
 
 99. SIDNEY SHERWOOD ON BIMETALLISM. 
 
 Sidney Sherwood, in the eleventh of his lectures 
 -on ' ' The History and Theory of Money, ' ' says : 
 
 "What is bimetallism? It is the policy of using 
 both gold and silver as money, the mints being 
 open to the free coinage of both of these metals, 
 and both kinds of money being full legal tender. 
 There is also this requisite, that by law there shall 
 be a fixed ratio between the units of these two 
 coinages. All of these elements are necessary to 
 Teal bimetallism. Hence the situation in the Uni- 
 ted States to-day, in which there is free coinage of 
 one metal (gold) and not free coinage of the other, 
 is not bimetallism, although both moneys are made 
 full legal tender. ' ' 
 
 The supreme fact of the history, an attempt to 
 have both gold and silver money, making bimet- 
 allism of money, is left out of view in the above 
 -Statement. Prof. Sherwood's view of the matter 
 rests entirely on the assumption that the bimet- 
 allism of the past, on the old bad plan of two kinds 
 of standard money, both gold and silver, is the 
 only possible bimetallism. This is an assumption 
 which has been naturally made, but without suffi- 
 cient study of the subject, and with much more 
 than a chance that the progress of education in 
 economics will open an entirely different view, and 
 permit advocacy of another kind of bimetallism. 
 It is, however, beyond all doubt that the bimet- 
 
123 
 
 allism of the past, gold and silver yoked together 
 to make a double standard, could not survive the 
 revelations of modern economic science. 
 
 ICO. SHAW ON BIMETALLISM. 
 
 Mr. W. A. Shaw, in his '^History of Currency — 
 1252 to 18^4," has the following remarks in his 
 Preface : 
 
 "The total omission of the historic, reasoned, 
 and consecutive study of currency history — the 
 most important domain of practical economics — 
 from the curriculum of every university in the 
 land, is matter for surprise and regret, and can 
 only be attributed to the lack of an initiative and 
 of a handbook." 
 
 ' ' The verdict of history on the great problem of 
 the nineteenth century — bimetallism — is clear, 
 and crushing, and final ; and against the evidence 
 of history no gainsaying of theory ought for a 
 moment to stand." 
 
 "Throughout mediaeval Europe and up to the 
 close of the eighteenth century, the currency of 
 Europe was practically bimetallic. ' ' 
 
 ' ' The conception of a law of tender is quite mod- 
 ern. And the evolution of the idea of such a law 
 has gone hand in hand with the evolution of a con- 
 ception of monetary theory on the part of the 
 legislator. . . . From the thirteenth to the 
 eighteenth century, both gold and silver had been 
 actually employed in European commerce without 
 any idea either of declaring or of restricting the 
 tender, whether of the one or of the other. ' ' 
 
 ' ' The final outcome of the application of the law 
 
124 
 
 of tender was the development of the modern 
 monometallic system. It was only at the close of 
 the eighteenth century that England evolved this 
 system and flung away the last remains of that 
 mediaeval ignorance which had brought with it 
 such a dov/er of mishap. France has taken almost 
 a century of further experience before arriving at 
 the same point of development. ' ' 
 
 ' ' The modern theory of bimetallism is almost the 
 only instance in history of a theory growing not 
 out of practice, but out of the failure of practice ;, 
 resting not on data verified, but on data falsified 
 and censure-marked. No words can be too strong 
 of condemnation for the theorizing of the bimet- 
 allist who, by sheer imaginings, tries to justify- 
 theoretically what has failed in five centuries of 
 history and to expound theoretically what has 
 proved itself incapable of solution save by cutting 
 and casting away." 
 
 ' ' Such a verdict as this of history, negative as it 
 is, must strike many a serious mind with dismay. 
 The following of bimetallism would not be what it 
 is were it not for the despair of any other remedy 
 for the situation at the moment." 
 
 lOI. ERROR OF MR. SHAW'S ASSUMPTION. 
 
 Mr. Shaw's account is that of one of the greatest 
 living authorities upon the history of money, and 
 his judgment in condemnation of bimetallism of 
 the standard is just beyond all possibility of appeal ; 
 but that does not make it less to be regretted that 
 his statement proceeds upon the wholly unneces- 
 sary assumption that bimetallism can only mean. 
 
125 
 
 and has first of all historically meant, the old bad 
 plan of having gold and silver, or silver and gold, 
 not only go together as money, but each figure as 
 standard money with equal tender, under a valua- 
 tion of coins fixed by law. It has been natural for 
 many persons not well studied in so large and so 
 difficult a subject, to think it possible to make the 
 old bad plan of a double standard work well by 
 some method of new regulation. Every such 
 thought can only prove useless and fatal, yet there 
 is no need of construing this as condemnation of 
 all bimetallism. There may be a bimetallism of 
 money, without a bimetallism of the standard, gold 
 and silver united in use without the old bad plan 
 of trying to have the parity of the silver with the 
 gold as a standard maintained. What intelligence 
 and experience now thoroughly understand is, that 
 a double standard is a delusion and a snare. But 
 it does not follow that we may not have both gold 
 and silver money, and make the most of each of 
 our precious metals. Nor does it permit us to read 
 the past as chiefly devoted to bimetallism of the 
 standard. It was chiefly devoted to bimetallism of 
 money, and adopted the double standard system as 
 a supposed necessity of use together of both gold 
 and silver. 
 
 I02. CONFUSION OF POINTS OF VIEW. 
 
 Current discussion on both sides of the dispute 
 is commonly wrong as to the point of view, with 
 the double result that the money bimetallists are 
 accused of straddling, or are induced to think well 
 of international effort to restore the double stan- 
 
126 
 
 dard system, and the silverites are betrayed into 
 an entirely false position, that of suicidal denial of 
 the standard which is in the nature of things the 
 only sound and true and honest standard. If 
 the former could explain just how they lean to 
 silver, and if the silverites could understand 
 themselves as friends of silver, the dispute would 
 disappear. 
 
 The confusion turns upon a double meaning of 
 "bimetallism." The bimetallism of money is one 
 thing, and it is the thing upon which all would 
 unite if the whole matter were seen in a clear 
 light. The bimetallism of the standard is another 
 thing, an impossible thing, as well as a pro- 
 foundly bad thing, which the silverites them- 
 selves should be the last to advocate, because of 
 the injury to silver, as well as to other interests, 
 which it will work. The definitions commonly 
 given make the great mistake of losing sight of 
 bimetallism of money. Thus Mr. Preston, director 
 of the mint, says that bimetallism means "the 
 unlimited coinage of both gold and silver into full 
 legal tender coins." But this is bimetallism of the 
 standard, monometallism of which does not exclude 
 bimetallism of money. Gold monometallism of the 
 standard, with gold and silver bimetallism of 
 money, is the true point of view. This means gold 
 coined at its supposed intrinsic value, and current 
 as standard money, and silver coined in the ratio to 
 gold most secure and most helpful to silver and 
 to general, popular money interests, and current 
 on a fiat parity with gold, or exchangeable for 
 gold. 
 
127 
 103. GOLD STANDARD BIMETALLISM. 
 
 The bimetallism thus secured would be gold" 
 bimetallism — gold as to the standard, and gold 
 and silver as to the money in use. There could be 
 a silver bimetallism, with silver as the standard 
 and gold dealt with as secondary, precisely as we 
 explain for silver ; and with great shortage of gold 
 such a system might be necessar)^; but no other 
 bimetallism is workable in practice or sound in 
 theory than that which chooses one of the two 
 metals as standard. "All experience has shown 
 that you must have one standard coin, which shall 
 be a legal tender for all others, and then you may 
 promote your domestic convenience by having a 
 subsidiary coinage of silver, which shall circulate 
 in all parts of your country as legal tender for a 
 limited amount, and be redeemable at its face value 
 by your government." — William D. Kelley in 
 Congress, April 9, 1872. Neither the United States 
 alone nor all nations together could maintain 
 bimetallism of the standard; and looking in that 
 direction would not be thought of by either party 
 if the distinction between bimetallism of the stan- 
 dard and bimetallism of money had been properly- 
 understood. 
 
 Real parity of standards has been found by ages 
 of experience impossible of maintenance, because 
 value in the market never can be depended upon 
 to remain where real parity requires, and the 
 moment that one of the two metals is at a market 
 price below the other the money-mongers use it to 
 buy up the other for the sake of what they can 
 make by selling the other as metal. The fine work 
 
128 
 
 of the robber gold men is got in with every change 
 in the value of either of two standard metals which 
 makes one of them intrinsically worth more than 
 the other, and the only way to make an end of the 
 plague is that of making one of the metals the 
 standard and giving the other a parity with it, 
 which is just enough fiat parity to make the two 
 work together both securely and helpfully. 
 
 104. SECURE RATIO FOR SILVER. 
 
 The most secure ratio between gold and silver 
 means intrinsic value in the silver coin enough less 
 than its face value to leave no chance of rise in the 
 market value of silver making the coin worth more 
 as metal than as money. Its parity with gold 
 should be fiat parity to the small extent, say seven 
 per cent., necessary to avoid the risk of giving the 
 money-mongers a chance to make a profit by 
 exchanging it for gold and selling it at a profit as 
 metal. 
 
 On the other hand, the ratio most helpful to sil- 
 ver and to general popular money interests will be 
 that of intrinsic value in the silver coin as large as 
 may be consistent with security of the coin as 
 money — the security against being taken out of 
 circulation and sold as metal by the money-mon- 
 gers. It is really a question for mint experts 
 exactly what part of a silver coin, under the princi- 
 ples here explained, should be intrinsic value in 
 silver. We may suppose it to be ninety-three per 
 cent., or about forty per cent, more than that of 
 our present silver dollar. This amount of silver in 
 the coin will make the largest practicable use of 
 
129 
 
 silver, and it will at the same time permit the 
 amplest desirable supply of silver money, with 
 the least dependence on fiat value in it, and thus the 
 least peril to national credit. If our present silver 
 money had been thirty-five or forty per cent, richer 
 in silver than it is, the amount of silver used would 
 have been that much larger and the money itself 
 that much less dependent on fiatism, and thus our 
 credit more secure, and business and prosperity 
 not only undisturbed, but booming, full and strong 
 against all the world. 
 
 105. THE TRUE BIMETALLIC INTEREST. 
 
 The facts which have been given make plain the 
 justice of a desire for bimetallism, and even lean- 
 ing to silver, only it is bimetallism of money, not 
 of the standard, and gold bimetallism, or gold the 
 standard, and silver established as near to gold as 
 security of its position will permit, with fiat parity 
 to make it "as good as gold" in the money market 
 and in the labor market. There is no opposition 
 of interest between the money market and the 
 labor market in the matter of the character of 
 money, except that labor suffers the most, and 
 money-mongers, by their craft and tricks, get the 
 most advantage, when money is not good and 
 credit is not secure. What labor wants as against 
 capital is a larger share, but it wants that share 
 good, and has more interest than the money-mon- 
 gers have to keep it steadily good. 
 
 9 
 
I30 
 
 Io6. GOLD CANNOT DISPLACE SILVER. 
 
 There is no truth whatever in the complaint of 
 denial under the gold standard of a place for silver 
 in the money of mankind, and dangerous depen- 
 dence everywhere upon gold only for money. The 
 nations of progress, of wealth, and of commerce, 
 in whose affairs gold as money, and as a standard, 
 is a recognized necessity, constitute the minority 
 only of mankind. Even their use of the gold stan- 
 dard operates to secure the large use of silver along 
 with gold ; and the contention is a just one that 
 even if the gold standard were accepted every- 
 where, and gold money brought into use, it would 
 operate to make more rather than less secure th& 
 large use of silver. 
 
 107. ADVANTAGE ENJOYED BY SILVER. 
 
 Silver enjoys the advantage of being the familiar 
 and the necessary money of the majority of the 
 human race, the hundreds of millions who inhabit 
 India and China, and other parts of the eastern and 
 tropical regions, where nearly all transactions- 
 require small money. Even in England monetary 
 distress of the common people has in times past 
 turned upon the want of silver small coins in which 
 to make change ; and what gave silver so long and 
 in so many nations the rank of a standard was the 
 fact that it was so generally the necessary money 
 of the common people. Silver had the lead on this, 
 account, and would have kept it but for its more 
 and more failing to give the service which it was- 
 depended upon for. 
 
131 
 
 I08. HOW SILVER LOST FIRST PLACE. 
 
 As numbers of persons came to require large 
 sums to be frequently handled, the bulk and weight 
 of considerable amounts were found terribly objec- 
 tionable ; and if the market price of silver made the 
 coins worth more than their face, the money-mon- 
 gers took all of them, and none were available as 
 money. If, moreover, silver stood as standard and 
 tenaer money, and its value fell to any extent, as 
 in times of large development and very great pro- 
 gress it shows a tendency to do, it would fail of one 
 of its most important uses, that of applying at the 
 payment of a debt the same as at its creation, and 
 would enable all persons under promise or contract 
 to pay to make their payments by tender of less 
 than "value received." 
 
 109. GOLD STANDARD WILL HELP SILVER. 
 
 The gold standard system not only gives gold 
 where it is a necessity, but prevents the silver 
 money from going out of service as money, or 
 doing by its fall in value false work as a standard 
 equall}' applicable to the creation and to the pay- 
 ment of debts ; and as in all countries there is an 
 immense need of money of the common people, 
 part of which at least may be silver dollars, and a 
 large part of which, for smaller change, must be 
 silver; and as vast regions of the globe, embracing 
 a majority of mankind, chiefly use silver as money, 
 there is no possibility of a lessened world-use of 
 silver as money. There is, in fact, a very great 
 probability of the increased dependence of the 
 
132 
 
 •whole world upon silver money. Let it be once 
 understood that this use is to be under the gold 
 standard, and international agreements for it will 
 be at once practicable, the effect of which will be 
 to carry gold bimetallism everywhere, and to 
 largely increase the amount of silver coined and 
 current as money ; coined at the best advantage to 
 silver and current at the best advantage to the pub- 
 lic. Mr. Jevons put the case fairly well when he 
 said: 
 
 "The highly-civilized and advancing nations of 
 Western Europe and North America, including 
 also the rising states of Australasia, and some of 
 the better second-rate states, such as Egypt, Brazil, 
 and Japan, will all have the gold standard. The 
 silver standard, on the other hand, will probably 
 long be maintained throughout the Russian empire 
 and most parts of the vast continent of Asia ; also 
 in some parts of Africa, and possibly in Mexico. 
 Excluding, however, these minor and doubtful 
 cases, Asia and Russia seem likely to uphold silver 
 against the rest of the world adopting gold."* 
 
 * Money and the Mechanism of Exchange, p. 149. 
 
 India and Russia have gone to the gold standard since Jevons 
 wrote, and China even uses that standard to measure the value, 
 day by day, of the silver she uses. 
 
133 
 
 CHAPTER X. 
 
 BIMETALLISM IN ENGLAND : COMPLETE BREAK- 
 DOWN OF THE DOUBLE STANDARD SYSTEM. 
 
 no. EARLY ENGLISH SILVER. 
 
 In England silver was the only metal coined from 
 the time of Egbert to that of Edward III., unless, 
 perhaps, a very few small pieces of gold. Silver 
 was the sole legal tender and measure of value, and 
 few coins were issued except silver pennies. These 
 silver pennies, equal probably in purchasing power 
 to a shilling at least, and perhaps sixteen pence, of 
 the present English money, formed the mass of 
 the currency. Good gold coin came from Florence 
 under the name of florins, and from far off Byzan- 
 tium (Constantinople), under the name of byzants. 
 Tradesmen, moreover, put out copper coins, which 
 the people gladly used as small money. No legiti- 
 mate coinage of copper existed before 1664. 
 
 III. EARLY ENGLISH GOLD. 
 
 The use of foreign gold led to English coinage 
 of gold. The Plantagenet kings, for example, 
 finding that under exclusive coinage of silver the 
 people used gold money from abroad, eventually 
 undertook the issue of gold coins, at a fixed ratio 
 of exchange with silver. This made the English 
 system a double standard system, and from 1257 to 
 1664 England had both silver inoney and gold 
 money, under a ratio of exchange which was fixed 
 from time to time by royal proclamation. From 
 
134 
 
 1664 to 1717 no proclamations were made, and the 
 value of gold was variously reckoned in terms of 
 the silver shilling ; making a silver standard sys- 
 tem. But the system worked badly. Under Charles 
 II. and James II., from 1661 to 1690, there was no 
 end of trouble to have money in England. The 
 good coins were exported because, the face value 
 being lower than the real value, they were worth 
 more to sell abroad than to circulate at home, and 
 hardly anything was in circulation except depreci- 
 ated, scarcely half value, silver, and iron, brass, or 
 copper pieces plated with silver. 
 
 112. RECOINAGE SCHEME 1695-99. 
 
 In 1695, November 22, under William II., an Act 
 for remedying the ill state of the coins was passed, 
 but with the unwise determination to adhere to 
 the pre-existing standard, in spite of the clearly 
 seen advance in the value of silver, which made 
 the coins worth more as metal than as money. The 
 arguments of the celebrated John Locke were 
 accepted and acted on, in spite of replies to them 
 which ought to have been seen to be absolutely 
 decisive. A great recoinage scheme, carried out in 
 the years 1695-99, had the result of bringing in a 
 great quantity of gold, but the gain of gold meant 
 the loss of silver. The movement either way, of 
 gold into England and of silver out of England, 
 was due to the fact that the gold coin were accepted 
 in England at more than their real value and the 
 silver coins at less. Even a premium of 2 1-2 pence 
 per ounce on foreign silver coins brought to the 
 
135 
 
 Tnint, between April 17 and December i, 1709, did 
 no good, because it still left silver wortli more else- 
 "where than in England. 
 
 113. THE MONEY-MONGERS GOT THE SILVER. 
 
 It was remarked in Parliament * that the situa- 
 tion had occasioned "a clandestine trade, of late 
 years carried on by the Dutch, Hamburgers and 
 other foreigners, in concert with the Jews and 
 other traders here (in London), which consisted in 
 exporting silver coins and importing gold in lieu 
 thereof; which being coined into guineas at the 
 Tower (the government mint at the Tower), near 
 fifteen pence was got by every guinea, which 
 amounted to about five per cent. ; and as these 
 returns might be made five or six times in a year, 
 considerable sums were got by it, to the prejudice 
 of Great Britain, which thereby was drained of 
 silver and overstocked with gold.f 
 
 114. SIR ISAAC NEWTON ON MONEY. 
 
 The celebrated Sir Isaac Newton was master of 
 the mint in England, and in 171 7, some months 
 •earlier than the just mentioned speech in Parlia- 
 ment, he had made a report showing very plainly 
 the effect of overvaluing or undervaluing gold or 
 silver, causing the overvalued to come in and the 
 tindervalued to go out through the inevitable trade 
 in money which the situation stimulated. In 
 another report of September 21st, Newton stated. 
 
 * Dec. 20, 1717. 
 
 ■j; Shaw; J7ist. of Currency, p. azS. 
 
136 
 
 tHat, since tlie beginning' of 1702 to September, 
 1 71 7, the gold coined at the mint had amounted to 
 7, 127,835 pounds sterling, while the silver within the 
 same period had only amounted to 223,380 pounds. 
 To meet the situation Parliament petitioned the 
 king to have the value of the guinea reduced to 2 1 
 shillings, instead of 21s. 6d., and this was at once 
 done by proclamation December 22. Even this was 
 not a complete cure. The evil lasted for half a 
 century, and might have lasted still longer but for 
 the rise in the value of gold which began about 
 1756, and by 1773 had made gold worth what it was 
 counted as worth. 
 
 115. ENGLAND WITH NO GOOD MONEY. 
 
 The change that gave England gold did not after 
 all keep it in circulation as money. There very 
 soon took effect another tendency created by the 
 situation, that of export of gold to Holland to be 
 filed and sent back in a depreciated form. The 
 silver was so poor, so depreciated, that depreciated 
 gold could be made to pass with it. Mr. Shaw 
 remarks on this phenomenon, which he says 
 "always recurs in a currency containing two differ- 
 ently depreciated elements : ' ' 
 
 "The idea that bimetallic action replaces one 
 good metal by another, a good undepreciated coin- 
 age of silver for a good undepreciated coinage of 
 gold, or vice versa, is not borne out by a single 
 instance in history. Bimetallic action always sub- 
 stitutes the less for the greater, the more depreci- 
 ated for the less, or the depreciated for the perfect 
 standard coin. . . . The result of fifty years of 
 
137 
 
 bimetallic regime left England witli currency 
 depreciated in both its limbs, in both silver and 
 gold, and as deficient in the quantity current as in 
 the weight of the individual pieces.* 
 
 Il6. BIRTH OF THE PRESENT ENGLISH SYSTEM. 
 
 It was at this stage of English experience that 
 Lord Liverpool intervened with those enlightened, 
 views which operated to create the present English 
 system of stable finance. Under his advice, and 
 by resolutions of the House of Commons passed 
 May lo, 1774, all the deficient gold coins were 
 called in and recoined, and the sound rule of good 
 standard money was made that in future the cur- 
 rency of the gold coin should be regulated by 
 weight as well as by tale or count, and that the 
 several pieces should not be legal tender if dimin- 
 ished below a certain weight. This not only 
 brought the gold coins to a state of comparative 
 perfection, but kept them there. 
 
 117. A LAW OF TENDER APPLIED TO SILVER. 
 
 To mend the case of silver an Act was passed in. 
 the fourteenth year of George III. prohibiting, on 
 pain of confiscation, the importation of light silver 
 coin, and requiring that for payment of any sum 
 exceeding £2^1, at any one time, silver should be 
 legal tender by weight only at the rate of 5 s. 2d. 
 per ounce of silver. Mr. Shaw says of this last 
 provision of English law dating from 1774: 
 
 "The importance of this latter epoch-making 
 
 *IIist. of Currency, pp. 232, 233. 
 
138 
 
 clause is vital. It is the first enactment of a law of 
 tender in the history of English monetary legisla- 
 tion, and it was the first step towards the shaking 
 off the incubus of that mediaeval currency system 
 which was even then only coming to be understood 
 in all its fatal perniciousness. For statesmanship, 
 the only parallel to it is that Act of Henry III. of 
 France, which proved so short lived in its adop- 
 tion.* It was the first step in the evolution of that 
 system of safeguarded currency which was finally 
 constructed in i8i6.f 
 
 Il8. COINAGE OF SILVER SUSPENDED. 
 
 Trouble because of silver was, however, not yet 
 at an end, and after various attempts to deal with 
 it, the further coinage of silver was suspended, 
 ^ ' for the present, " by an Act of June 21,1 798. Not 
 that silver did not remain the standard coin of the 
 realm, and legal tender to any amount. But "the 
 state of the coins," standard though they were, 
 and ' ' the present low price of silver bullion, ' ' mak- 
 ing it likely that operations in coinage for export 
 would increase, temporary suspension of coinage 
 was adopted. Mr. Shaw says that even after this 
 step had been taken, "the years of the bank restric- 
 tion [from 1797], until, that is, the new mint law of 
 18 16, saw the heaviest export of silver probably 
 that England has ever experienced;" that, for 
 
 *The officials of the French mint advised Henry III. in 1575 to 
 adopt a system in which the gold ecu should be the standard, and 
 some experiment was made in this direction, but with no proper 
 understanding of its significance and only to be abolished by Henry 
 IV. in 1602. 
 
 f Mist of Currency, p. 236. 
 
139 
 
 example, "during the ten years, 1801-1810, nearly 
 ten millions sterling of silver was exported from 
 England (over 38,176,016 oz.) while the gold 
 exports amounted only to ;^2, 088,483, so that, of 
 the total export, silver formed eighty -two per cent, 
 (net amounts in both cases) ; ' ' and that ' ' the straits 
 -of the poorer classes, due to the existing bimetallic 
 system, ' ' were most extraordinary.* 
 
 119. RECOINAGE OF SILVER— 1816 
 
 It was because of the utter breakdown of silver, 
 and in order to restore it to currency and service, 
 that the measure of 18 16 for recoinage of silver, but 
 'with limit of legal tender and gold as the sole 
 standard and the only unlimited tender, was 
 enacted. If silver had been doing good service, or if 
 any other way of making it do good service had 
 Taeen known, the change to gold monometallism of 
 the standard would not have been made. The 
 "'"Whereas" for the recoinage of silver said that 
 ""the silver coins of the realm have, by long use 
 and other circumstances, become greatly dimin- 
 ished in number and deteriorated in value, so as 
 not to be sufficient for the payments required in 
 ■dealings under the value of the current gold coins, 
 by reason whereof a great quantity of light and 
 counterfeit silver coin and foreign coin has been 
 introduced into circulation within this realm, and 
 the evils resulting therefrom can only be remedied 
 by a new coinage of silver money." f 
 
 *Hist. of Currency, pp. 241, 242. 
 
 \ Quoted by Shaw; Hist, of Currency, pp. 242, 243 
 
I40 
 
 I20. REASONS FOR THE GOLD STANDARD. 
 
 And for the further enactment, making gold the 
 sole standard and the only unlimited tender, and 
 silver tender only up to forty shillings, the prefa- 
 tory explanation was : 
 
 ' ' Whereas at various times heretofore the coins 
 of this realm of gold and silver have been usually 
 as legal tender for payments to any amount, and 
 
 GREAT INCONVENIENCE HA.S ARISEN FROM BOTH THESE 
 PRECIOUS METALS BEING CONCURRENTLY THE STAND- 
 ARD MEASURE OF VALUE AND EQUIVALENT OF PROP- 
 ERTY, IT IS EXPEDIENT THAT THE GOLD COIN MADE 
 ACCORDING TO THE INDENTURES OF THE MiNT 
 SHOULD HENCEFORTH BE THE SOLE STANDARD MEAS- 
 URE OF VALUE AND LEGAL TENDER FOR PAYMENT 
 WITHOUT ANY LIMITATION OF AMOUNT, AND THAT 
 THE SILVER COIN SHOULD BE A LEGAL TENDER TO A 
 LIMITED AMOUNT ONLY, FOR THE FACILITY OF EX- 
 CHANGE AND COMMERCE," * 
 
 CHAPTER XI. 
 
 BIMETALLISM IN FRANCE — DISASTROUS WORK- 
 ING OF THE DOUBLE STANDARD SYSTEM 
 DRIVES FRANCE TO THE GOLD BASIS. 
 
 121. EARLY FRENCH MONEY. 
 
 The original French livre, now called the franc, 
 was at first a pound weight of silver. The royal 
 custom, diligently pursued for the profit that there 
 
 ^Quoted by Shaw; Hist, of Currency, p. 243. 
 
141 
 
 was in it, was that of changing the value in a 
 •coin to a less value, while making it pass under 
 the same name. The report of M. Beranger, on the 
 French monetary system, in 1802, stated that the 
 ratio of gold to silver had been changed twenty-six 
 times between 1602 and 1773, and that the livre was 
 at the time of his writing worth only the seventy- 
 sixth part of its original weight. Recoinages 
 always meant debasement of the coin, on the rascal 
 principle in favor with needy kings, that intrinsic 
 value could be left out to any extent and fiat value 
 substituted for it. There were four recoinages 
 under Louis XIV., and five under Louis XV. The 
 ratio between silver and gold, adopted in 1 726, was 
 
 14 5-8 to I, and at this time that in England was 
 
 15 1-7. The two worked to make silver go from 
 England to France, and gold go from France to 
 England, simply because France counted silver at 
 more than its real value, and England counted gold 
 at more than it was worth.* 
 
 122. FRENCH REVOLUTION MONEY. 
 
 Calonne, the finance minister of Louis XVL , un- 
 dertook in 1785 a recoinage based on sound money 
 principles. He put the ratio at 15 1-2, not on the 
 ground that it was the exact market ratio, but in 
 the belief that a rise to this was at hand. The 
 monetary system of Republican France was built 
 on a law of the year XL, 28th March, 1803, which, 
 instituting no new principle, or theory, or system 
 in French currency, but carrying on the old loose 
 
 * Horace White : Monty and Banking, p. 6i. 
 
142 
 
 and shifting plan of a double standard, made silver 
 the basis, and issued gold money of a value based 
 on the ratio of 15 1-2, —although the minister of 
 finance, Gaudin, admitted that for a long time the 
 commercial ratio had been under 15. The neces- 
 sary result of thus overvaluing silver and under- 
 valuing gold was that the gold went where it was 
 worth more and France was filled with silver, the 
 bulk and weight of which were a terror to all who 
 had to handle money to any amount. It was not 
 until the new and enormous production of gold in 
 California, Australia, and Russia, about 185 1, that 
 France was delivered from the silver incubus, and 
 had gold as well as silver money. There is no 
 truth whatever in the statement sometimes made, 
 that France, under the 1803 ratio of 15 1-2, kept the 
 ratio steady and both gold and silver in circulation. 
 
 123. MR. SHAW ON FRENCH BIMETALLISM. 
 
 Mr. Shaw remarks very plainly and justly on the 
 error into which English writers, seeing a fixed 
 and steady state of things in England, due to gold 
 monometallism of the standard, have given the 
 credit for this to French bimetallism, when in fact 
 France had no experience of it. Mr. Shaw says : 
 
 "At no point of time during the present century 
 has the actual market ratio, dependent on the com- 
 mercial value of silver, corresponded with the 
 French ratio of 15 1-2, and at no point of time has 
 France been free from the disastrous influence of 
 that want of correspondence between the legal and 
 the commercial ratio. The opposite notion, which 
 prevails and finds expression in the ephemeral 
 
143 
 
 "bimetallic literature of to-day, is simply due to 
 ignorance. It is in no polemic spirit, but simply 
 in the interest of science that this particular misap- 
 plication of history to the squaring of a theory is 
 to be branded. The plainest facts of history are 
 thereby absolutely misrepresented. At no point 
 of a graphic representation do the market and the 
 legal ratios coincide. After three years of fluctua- 
 tions, 1803-06, now above and now below, the 
 market ratio sinks persistently below the legal for 
 seven years, 1807-13. For the succeeding five or 
 six years, 1813-19, the market ratio was as con- 
 sistently above the legal. From 1819 up to 1850 
 its course was undeviatingly below 15 1-2 ; then for 
 1851-67, the period of the great gold outputs of 
 Australia and America, as undeviatingly above. 
 And from 1867 up to our own days, the course of 
 the commercial ratio has been again unbrokenly 
 below the 15 1-2 ratio, and with an ever increasing 
 enormity of divergence." 
 
 "The influence of this divergence, of the com- 
 mercial from the legal ratio, upon France's store of 
 the precious metals, has been exactly similar in 
 effect and force with that of similar trains of event 
 and circumstance in the monetary history of France 
 during the four preceding centuries. From 1830' 
 to 1850, while the market ratio remained continu- 
 ally below the legal 15 1-2, there was a profit on 
 the import of silver, and a persistent and heavy 
 import took place. In 1830 the (balance of the) 
 silver imported amounted to a matter of six mil 
 lions sterling; in 1831 to seven and one-quartei 
 millions; in 1834 to four millions; in 1837 to over 
 
144 
 
 £ve and one-half millions; in 1838 to nearly five 
 millions; in 1841 to nearly five millions; in 1843 to 
 over four millions ; in 1 848 to over eight and one- 
 half millions ; and in 1 849 to nearly ten millions. 
 There was not a single year that was not accom- 
 panied by this import, and over the whole twenty- 
 two years the total of importations reached the 
 enormous figure of, approximately, ninety-two 
 millions sterling. And it must be clearly under- 
 -stood that this sum represents not the gross but 
 the net importation or balance of imports over 
 exports, and that the money passed into the cur- 
 rency of the country, taking its place as such and 
 displacing gold. ' ' 
 
 "With the year 1852 the decisive change in the 
 ratio sets in with the new gold influx. The market 
 ratio rises above the 15 1-2 of the French law, and 
 the profit on the importation and coining of silver 
 vanishes. Its place is taken by a corresponding 
 profit on the importation and coinage of gold. Tlie 
 fourteen years during which the market ratio 
 remained above the legal 15 1-2 witnessed the 
 importation into France of a total net (or balance) 
 of gold to the amount of one hundred and thirty- 
 five millions sterling, and a total net or balance of 
 exportation of silver of sixty-six and two-thirds 
 millions sterling. ' ' 
 
 "With 1865 the final, and, so far as the nine- 
 teenth century is concerned, the fatal chaise of 
 the commercial ratio sets in. It sinks persistently 
 and increasingly below the legal 15 1-2, in face and 
 spite of the united mintiujgs of the Latin Union, 
 and at once the premium on the importation and 
 
145 
 
 coinage of gold changes into one on silver. From 
 1865 to 187s, one year before the abandonment of 
 the coinage of the 5 -franc piece and the consequent 
 relinquishment by France of the bimetallic system, 
 Iter net imports of silver amounted to fifty-six 
 millions sterling." * 
 
 124. DOUBLE STANDARD PERILS. 
 
 The final outcome of French experience was 
 compulsory acceptance of the gold standard. The 
 formation of the Latin Union in 1865, and the 
 establishment of a convention which came into 
 force August 17, 1869, for Belgium, France, Switz- 
 erland, and Italy, was for the purpose, not of 
 spreading and securing bimetallism of the standard, 
 but of obtaining securities against the perils of 
 such bimetallism of the standard. The French 
 monetary commission of 1867 told a part of the 
 story of French experience in the following : 
 
 "It is well known by all that this ratio (of 1 803 
 — 15 1-2) by the simple reason of its being fixed 
 could not remain correct. There was quickly a 
 premium on gold, and silver remained almost 
 alone in circulation until near 1850. The discovery 
 of the mines of California and Australia suddenly 
 changed this situation by throwing into the Euro- 
 pean market a considerable quantity of gold. By 
 the side of this force, which tended to create a 
 divergence from the legal ratio by lowering gold, 
 there was another which occasioned a rise of silver. 
 Under the influence of various circumstances, too 
 
 *Shaw: Hist of Currency, pp. 172-182, 
 10 
 
146 
 
 long to enumerate, the needs of tlie extreme East 
 had grown in unusual proportions, and as silver is 
 alone in favor there, it was exported in enormous 
 masses. There was a premium on silver to the 
 extent of eight per mille, and it disappeared almost 
 completely from circulation, yielding place to gold. 
 Preoccupied by the situation, the government 
 charged a commission to study the measures to be 
 taken. Its labors are summed up in the report of 
 M. de Bosredon (1857)." * 
 
 125. THE GOLD STANDARD A NECESSITY. 
 
 The report of M. de Bosredon examined the sys- 
 tem tending to preserve silver money intact by 
 lowering the value of gold money, and conversely 
 the system tending to the adoption of the gold 
 standard by reducing the silver money to the state 
 of billon or subsidiary money, but came to no 
 decision. Continuance of trouble, and the example 
 of Switzerland, which had in i860 reduced the 
 value of its smaller coins, led to the appointment of 
 another commission in 1861, which advised doing 
 what Switzerland had done. ' ' It did this, ' ' to recur 
 to the language used by the commission of 1867, 
 "in complete knowledge of the cause, fully recog- 
 nizing that in so doing the monetary unit of silver, 
 characteristic of- our system, would be thereby 
 broken, at any rate for its circulating form; for 
 while the franc no longer existed in law, the 5 -franc 
 was disappearing in fact, so that the change was 
 
 ^Quoted by Shaw: Hist, of Currency, p. 188. 
 
147 
 
 EQUIVALENT TO THE ESTABLISHMENT OF A GOLD 
 STANDARD." * 
 
 126. THE LATIN UNION AND GOLD. 
 
 The advice thus given was acted on in part only, 
 hy a law of 1864, affecting only the fifty centime 
 and the twenty centime coins. But the next year 
 resort was had to the formation of the Latin Union, 
 in order to arrange some safeguard against the 
 perils of the tottering monetary system of France. 
 The commission of 1867 remarked on the inten- 
 tional aspect of the Latin Union : ' ' This conven- 
 tion places in the front rank gold money, and 
 reduces the piece of silver of two francs and less to 
 the r61e of token money. It therefore definitely 
 determines the ascendency of the gold francs, and 
 solves practical difficulties arising from the double 
 standard." f 
 
 Mr. Shaw justly declares in regard to the Latin 
 Union, that it was formed in order to arrange a 
 remedy for the evils of bimetallism of the standard, 
 as these were felt in Belgium, France, Italy, and 
 Switzerland, and that the idea that it was formed 
 for the maintenance of this bimetallism could not 
 have arisen but for the complete revolution in the 
 conditions of production of the precious metals 
 which brought a fall in the value of silver from 
 1 87 1. The heavy fall which made itself felt in 1873 
 set in motion action of one or another of the par- 
 
 • Quoted by Shaw: Hist, of Currency, p. 189. 
 t Quoted by Shaw: Hist, of Currency, p, 190. 
 
148 
 
 ties to the Latin Union tending to the final over- 
 throw of bimetallism of the standard, and adoption 
 of- the gold standard. 
 
 127. FINAL ADOPTION OF THE GOLD STANDARD. 
 
 In 1876, when the fall of silver became more dis- 
 astrously pronounced, the French government sur- 
 rendered to the inevitable, a monetary system on 
 the same gold basis which England had adopted 
 sixty years earlier. The minting of 5 -franc silver 
 pieces was suspended entirely, by a bill which M. 
 Leon Say submitted to the Senate, March 21, 1876, 
 and other legislation followed, the grounds of which 
 were stated in these words : 
 
 "The events which have happened for some time 
 past in the relations of the precious metals have 
 brought to a head the monetary question amongst 
 us, although from 181 5 Great Britain has laid down 
 principles which have attracted round her an ever- 
 increasing circle of nations. ' ' 
 
 "The theory of the double standard, on which 
 our monetary law of the year XL reposes, has been 
 called in question ever since its origin." 
 
 "It is, to our conception, less a theory than the 
 result of the primitive inability of the legislators to 
 combine together the two precious metals other- 
 wise than by way of an unlimited concurrence — 
 metals, both of which are destined to enter into 
 the monetary system, but which recent legislators 
 have learned to co-ordinate by leaving the unlim- 
 ited function to gold alone and reducing silver to 
 the r61e of divisional money. From 1857 the 
 French government has studied the question, and 
 
149 
 
 it may be stated that since that date the principle 
 of the gold standard has won increasing favor 
 through our several administrations." * 
 
 128. HISTORIC BIMETALLISM OF MONEY. 
 
 The interpretation here of historic bimetallism 
 of the standard, as not the result of thought or 
 knowledge justifying a theory, but as an effort, 
 when thought and knowledge were not yet in pos- 
 session of the field, is thoroughly just. Both gold 
 and silver money were wanted, and both were 
 made standard money, and often enough silver 
 made the unit of value, simply because no better 
 plan was yet known. The better plan has become 
 known; experience, wherever it is known, proves 
 it to be the only sound plan ; gold monometallism 
 of the standard; gold and silver bimetallism of 
 money; the two made to work in harmony as 
 money by giving gold alone the place of standard 
 and by adjusting silver to it on an under- standard 
 and limited legal tender basis. 
 
 '■Quoted by Shaw: Hist, of Currency, pp, 196, 197. 
 
ISO 
 
 CHAPTER XII. 
 
 THE UNITED STATES AND BIMETALLISM — 
 COMPLETE FAILURE OF SILVER — THE GOLD 
 STANDARD A NECESSITY. 
 
 129. ALEXANDER HAMILTON'S MONEY SCHEME. 
 
 Alexander Hamilton figures conspicuously in the 
 early monetary history of the United States, but he 
 was far from being a prophet of sound finance. 
 Mr. Shaw says : 
 
 "Hamilton's scheme, as contained in his most 
 remarkable paper, was for a silver unit or dollar of 
 371 1-4 grains of pure silver and a ratio of 15, and 
 instead of the allowance of two per cent, for waste 
 and coinage, the principle was adopted of free coin- 
 age — of delivering at the mint the same weight of 
 pure metal coined as should be brought to it in 
 bullion or foreign coin." * 
 
 130. FUNDAMENTAL ERROR OF HAMILTON. 
 
 Hamilton expressed himself as ' ' strongly inclined 
 to the opinion that a preference ought to be given 
 to neither of the metals for the monetary unit 
 . , . because this cannot be done effectually 
 without destroying the office and character of one 
 of them as money and reducing it to the situation 
 of mere merchandise. ' ' 
 
 If Hamilton in saying this had in view bimet- 
 allism of the standard, he spoke from the imperfect 
 
 * History of Currency, p. 251, 
 
151 
 
 knowledge of the time. The whole history of 
 modern experience with money shows nothing 
 more plainly than the effect of the double-standard 
 system to reduce one of the two metals from the 
 position of money to that of merchandise. That is 
 the largest and the most significant fact in the his- 
 tory of gold and silver, that if both are made stan- 
 dard money, one of them will go as money and the 
 other as merchandise, because one of them, com- 
 pared with the other, will be worth more to sell 
 than to circulate. If the United States were to 
 enact the legal tender parity of its present i6 to i 
 silver dollars with its standard gold, it would be in 
 effect the same as offering the gold for sale at some- 
 thing less than 50 cents on the dollar. Even if 
 it were a 99-cent silver dollar, the effect would be 
 to sell the gold for 99 cents on the dollar. Hamil- 
 ton, therefore, spoke most unadvisedly when he 
 suggested that we ought to have a double standard 
 in order to keep both of them going as money. 
 
 131. BIMETALLISM OF MONEY PRACTICABLE. 
 
 What Hamilton said may indeed mean that, while 
 silver held the field he more than suspected that a 
 silver unit was a mistake, and that gold ought to 
 have at least equal place with it, even if not made 
 the standard to the exclusion of a silver standard. 
 But whatever lay behind in Hamilton's mind, he 
 made a capital mistake in assuming that there could 
 not be at one and the same time monometallism 
 of the standard, and especially of the better 
 standard, and bimetallism of money. With gold 
 as the standard, and silver coined of, say, ninety 
 
152 
 
 per cent, intrinsic value, and issued as by law 
 exchangeable for gold, or upon fiat parity with, 
 gold, there could be any amount of silver money 
 that the public would take and use ; not indeed 
 standard money the same as gold, but, with ninety 
 per cent, of intrinsic value and ten per cent, of fiat, 
 value, as true money and as good money as any 
 other. And the supreme lesson of monetary 
 experience is that the only way to maintain silver 
 in use as money, good money and ample in quan- 
 tity, is that of linking it with a gold standard as 
 under-money, or on an under-standard basis, that 
 of intrinsic value to about ninety per cent, and fiat 
 value about ten per cent. ; the object being to guard 
 against rise in the price of the metal changing it 
 from money into merchandise. 
 
 132. FAILURE OF HAMILTON'S SCHEME. 
 
 Hamilton's scheme was adopted April 2, 1792^ 
 and of its working Mr. Shaw says : 
 
 ' ' For a period the system established in 1 792 went 
 on, although the ratio established was prejudicial 
 to gold. But, twenty years after, the natural result 
 arrived in America as in England, and the circula- 
 tion of gold was completely extinguished in the 
 United States by the unseen withdrawal of the 
 metal.* 
 
 Hamilton's scheme had made the standard silver 
 dollar too cheap in comparison with gold. It, 
 therefore, paid the money-mongers to get all the 
 gold by giving the cheaper silver dollars for it. The 
 
 *Shaw: Hist, of Currency, p. 253. 
 
153 
 
 United States sold to them all her gold, at a loss to- 
 the seller, and to the buyer a corresponding profit. 
 The system, trying to make both silver and gold 
 money, actually made the gold merchandise. 
 
 133. THE LAW OF 1834 THROWS OUT SILVER. 
 
 The state of things created by Hamilton's mis- 
 takes, and the causes of which were not understood, 
 lasted until the law of July 31, 1834, made a change 
 by enacting a new ratio, i to 16 instead of i to 15. 
 Benton, in his "Thirty Years' View," says that at 
 that time "15 5-8 was the ratio of nearly all who 
 seemed best calculated from their pursuits to under- 
 stand the subject; " that "the thick array of speak- 
 ers was on that side, and the eighteen banks of the 
 city of New York, with Mr. Gallatin at their head, 
 favored that proportion;" that "the difficulty of 
 adjusting this value, so that neither metal should 
 expel the other had been the stumbling block for 
 a great many years, and now seemed to be as 
 formidable as ever; " that "there seemed to be no 
 way of getting to a concord of opinion either from 
 the light of science, the voice of history, or the 
 result of calculations;" and that he, "taking his 
 stand upon the single fact that equality and actu- 
 ality of circulation had existed for above three 
 hundred years in the Spanish dominions of Mexica 
 and South America, where the proportion was 16 
 to I," presented this with such effect that "all the 
 real friends of the gold currency soon rallied to it. 
 . . . and eventually the bill was passed (in the 
 House) by a large majority, 145 to 35 ; " while "in 
 the Senate it had an easy passage ; Calhoun and 
 
IS4 
 
 Webster supported it, Mr. Clay opposed it ; and on 
 the final vote there were but seven negatives. ' ' 
 
 Mr. Benton went on to state "the good effects of 
 the bill;" how "a currency (gold) banished from 
 the country for thirty years overspread the land 
 and gave joy and confidence to all the pursuits 
 of industry.* 
 
 134. GOLD BECOMES THE ONLY MONEY. 
 
 This was the beginning of a gold basis in the 
 United States. It was intended to bring gold back, 
 and the gold came — came to stay. It was not 
 intended to displace silver, but that was the effect, 
 a result of the fact that the silver dollar was not 
 cheap enough, was worth more as metal, as mer- 
 chandise in the metal market, than as money, and 
 thus gave the money-mongers a chance to make a 
 profit by taking it all in exchange for gold. 
 
 135. POSITION OF SILVER REDUCED IN I8S3. 
 
 Mr. Shaw says in regard to Benton's glowing 
 -account of the coming of gold : 
 
 "The ratio was too high, and the silver dollars 
 could not be maintained. They were unduly 
 exported, especially between the years 1848 and 
 1851. And in order to retain within the country a 
 sufficient amount of small coin the amount of silver 
 in the small coins, from the half-dollar downwards, 
 was reduced by an Act of February 24, 1853. It 
 was at the same time provided that they should be 
 
 'Shaw: Hist, of Currency, pp. 257-259, 
 
155 
 
 coined only on government account, and they were 
 made legal tender only up to the sum of five dol- 
 lars. The direction of this step will be seen at a 
 glance — it was in the direction of the gold valua- 
 tion. It was so conceived and explicitly stated by 
 Dunham, who piloted the bill through the House. 
 'We have had,' he said, 'but a single standard for 
 the last three or four years. That has been and 
 no w is gold. We propose to let it remain so, and 
 to adapt silver to it, to regulate it (silver) by it 
 (gold).' Legally, the old silver dollar was left 
 untouched, and the gold and silver valuation was 
 not expressly abolished. No reference whatever 
 was made to the silver dollars in the Act, for the 
 simple reason that for years nothing had been seen 
 of them. They did not and could not circulate. 
 There was plenty of gold, and the absence of silver, 
 with the change in standard therein practically 
 implied, was either unnoticed, or regarded, if at 
 all, only with indifference. ' ' 
 
 136. SILVER DISCREDITED AS A STANDARD, 
 
 Both Mr. Shaw here, and Mr. Dunham, whom he 
 quotes, miss the mark of perfectly accurate history. 
 It was not true that the standard had become gold 
 only, and that nobody noticed the change, or at 
 least nobody cared. What was true was that gold 
 alone wa? the money of the country, and that this 
 most naturally suggested that the standard ought 
 to be gold alone. Silver was an absentee. It had 
 entirely quitted the field of money to figure as 
 merchandise in the metal market. Nobody desired 
 it to quit serving as money, but every dollar got 
 
156 
 
 two cents for changing from serving as money ta 
 figuring as merchandise, and away they went with 
 one accord scorning to remain as money. And that 
 in spite of the fact that they were standard money, 
 if only they would stay as money. 
 
 137. SILVER FROM 1 873 NOT A STANDARD. 
 
 Mr. Shaw goes on to say of the developments 
 following the failure of silver to keep its place as 
 money in the United States : 
 
 "The final step in the simplification and unifica- 
 tion of this system was commenced in 1870, when 
 a bill was prepared for a revised coinage law with a 
 pure gold standard, silver being demonetized as 
 a legal tender money. The bill did not become 
 law until April 12, 1873. And no opposition was 
 expressed in either the House or the Senate to the 
 abolition of the double standard. The silver dol- 
 lars previously coined (of which, however, but few 
 were in existence) maintained their quality as legal 
 tender ; but the coining of new dollars, whether on 
 government or private account, was forbidden. 
 This Act was, therefore, simply the complement of 
 the preceding legislation of 1853." 
 
 138. SILVER NOT " DEMONETIZED " IN 1 873. 
 
 The expression "demonetized as a legal tender 
 money " is not only misleading, but it is inaccurate. 
 To be accurate it should read " unlimited le^&l ten- 
 der," and to recite the exact fact the expression 
 "demonetized" should not be used at all. Silver 
 remained money just as really as if its standard 
 
IS7 
 
 character had not been taken away. Mr. Horace 
 White states the exact facts of money when he 
 says: "The money of the country consists of all 
 the gold, plus all the other instruments of ex- 
 <:hange which are redeemable in it. ' ' 
 
 139- GOLD THE STANDARD: NOT THE SOLE MONEY. 
 
 The law of 1873 made the gold dollar the unit of 
 value or dollar of account. As Mr. Samuel Hooper, 
 whom Mr. White quotes from the Congressional 
 Globe, said in Congress, April 9, 1872: 
 
 "The committee, after careful consideration, 
 concluded that twenty-five and eight-tenths grains 
 of standard gold constituting the gold dollar should 
 be declared the money unit or metallic representa- 
 tive of the dollar of account." 
 
 To the same effect Mr. W. L. Stoughton said : 
 
 ' ' Gold is practically the standard of value among 
 all civilized nations, and the time has come in this 
 country when the gold dollar should be distinctly 
 declared to be the coin representative of the money 
 unit." 
 
 Mr. C. N. Potter said : 
 
 "This bill provides for the making of changes in 
 the legal tender coin of the country, and for sub- 
 stituting as legal tender (without limit), coin of 
 only one metal instead as heretofore of two. I 
 think myself this would be a wise provision, and 
 that legal tender coins, except subsidiary, should 
 be of gold alone. ' ' * 
 
 * Money and Banking, pp. 214, 215. 
 
158 
 
 I40. SILVER AS MONEY MADE SECURE. 
 
 And further, in regard to silver, Mr. Hooper said : 
 
 "Section sixteen re-enacts the provisions of 
 existing laws defining the silver coins and their 
 ■weights respectively, except in relation to the sil- 
 ver dollar, which is reduced in weight from 412 1-2 
 to 384 grains, thus making it a subsidiary coin in 
 harmony with the silver coins of less denomination, 
 to secure its concurrent circulation with them. The 
 silver dollar of 412 1-2 grains, by reason of its 
 bullion or intrinsic value being greater than its 
 nominal value, long since ceased to be a coin of 
 circulation, and was melted by manufacturers of 
 silverware. ' ' 
 
 And Mr. Wm. D. Kelley said : 
 
 ' ' I wish to ask the gentleman who has just spoken 
 if he knows of any government in the world which 
 makes its subsidiary coinage of full value. The 
 silver coin of England is ten per cent, below the 
 value of gold coin. And, acting under the advice 
 of the experts of this country (the United States), 
 and of England and France, Japan has made her 
 silver coinage, within the last year, twelve per 
 cent, below the value of gold coin, and for this 
 reason: It is impossible to retain the double stan- 
 dard. The values of gold and silver continually 
 fluctuate. You cannot determine this year what 
 will be the relative values of gold and silver next 
 year. Hence all experience has shown that you 
 must have one standard coin, which shall be a legal 
 tender for all others, and then you may promote 
 your domestic convenience by having a subsidiary 
 coinage of silver, which shall circulate in all parts 
 
159 
 
 of your country as legal tender for a limited 
 amount, and be redeemable at its face value by- 
 your government. ' ' * 
 
 141. GOLD STANDARD MEANS DOUBLE MONEY, 
 
 The evidence here is very clear that silver was 
 not demonetized. It was, on the contrary, changed 
 in its relation to gold, destandardized, for the sole 
 purpose of making it stay and work as money, in- 
 stead of failing to so work. To have silver as well 
 as gold as money, and to have as ample a supply of 
 silver money as could be used, was the purpose of 
 taking silver out of the position of a standard, and 
 giving it a subsidiary position. The old false idea 
 made nothing money unless it were standard 
 money. The new idea makes two kinds of money, 
 standard of gold, and subsidiary of silver upon a 
 basis of fiat parity with gold. And it does this as 
 the only means of having both gold and silver 
 money working together, instead of one working 
 as money and the other taken away as merchandise, 
 
 142. THE BLAND BILL DOUBLE STANDARD SCHEME. 
 
 It was within a very short time after the changes, 
 made in 1873 that fresh interest in silver was stim- 
 ulated by the new mines of that metal in Nevada,, 
 and by the expectation of the resumption of specie 
 payments. This led to efforts to get silver made 
 again a standard along with gold. A commission 
 appointed August 14, 1875, recommended the estab- 
 lishment of the double standard. Bland, one of 
 
 * Money and Banking, pp. 214-216. 
 
i6o 
 
 the commission, offered a bill, for re-establishing' 
 the double standard at the ratio of i6 to i (15.988 
 to i) with free coinage of silver. The majority of 
 the Congress elected in 1876 represented the patri- 
 otic enthusiasm, and opinionated half-knowledge 
 or absolute ignorance of money questions and 
 money history, of the mass of the people. They 
 favored the Bland bill, but could not carry it 
 against the Senate and the President. The House 
 passed the bill, to restore the double standard and 
 coin silver on the same terms as gold, and at the 
 ratio of 16 to I. In the Senate Mr. Allison carried 
 an amendment which dropped free coinage but 
 provided that the government should bu)' every 
 month not less than $2,000,600 worth and not more 
 than $4,000,000 worth of silver and coin it into "16 
 to I " silver dollars, which should be full legal ten- 
 der money. Although even this the President 
 T/-etoed, it was passed over his veto,* and under its 
 operation the whole number of dollars coined was 
 378,166,793, of which about 57,000,000 were put in 
 circulation, and the remainder were made the basis 
 of silver certificates which, although not legal ten- 
 der, were receivable for all public dues, and were 
 thus readily current. 
 
 143. THE BLAND BILL RESULTS. 
 
 Mr. Shaw says of the (Allison) Bland bill, which 
 had the Bland restoration of the double standard 
 left out, and was thus Bland only in name : 
 
 "The Bland bill deceived the hope of both par- 
 
 * Feb. 28, 1878. 
 
i6i 
 
 ties, as such a compromise might be expected to 
 •do. It remained in force, notwithstanding, till 
 August, 1890, and during the twelve years, 
 1 878-1 890, the United States coined a matter of 370 
 million silver dollars, employing therein a third of 
 the total contemporary production. Almost yearly, 
 up to 1 887, the repeal of the silver purchase clauses 
 of the Bland bill and the suspension of the silver 
 coinage was recommended to Congress by Presi- 
 dential message, and in the reports of the Secretary 
 ■of the Treasury." * 
 
 CHAPTER XIII. 
 
 GERMANY AND BIMETALLISM — THE GOLD 
 STANDARD COMES IN WITH THE EMPIRE — 
 A RECENT GERMAN SILVER CRAZE. 
 
 144. EARLY GERMAN MONETARY EFFORT. 
 
 Germany, says Mr. Shaw, had not less than nine 
 distinct and independent coinage systems in exist- 
 ence, when at last the events of 1871 came to give 
 her unity in her coinage, along with unity in her 
 political life.f 
 
 An unsuccessful attempt to secure mint unifica- 
 tion throughout Germany had been made in 1738, 
 and this attempt had been renewed in the General 
 Mint Convention of the States of the Zollverein, 
 which was agreed upon in full assembly of dele- 
 gates at Dresden July 30th, 1838, and ratified there 
 January 7, 1839. 
 
 * Hist, of Currency, p. 263. 
 \'^Hist. of Currency," p. rgS. 
 
 II 
 
1 62 
 
 145. THE VIENNA CONVENTION. 
 
 The agreement of 1838-39 had continued in force 
 nominally until the later and still more famous 
 convention of Vienna in 1857, which undertook to 
 bring into one system the three competing systems 
 then existing in Germany, those of Austria, Prus- 
 sia, and South Germany or Bavaria, and to secure 
 a properly regulated gold coinage. 
 
 In regard to the latter Mr. Shaw points out how 
 exactly the two cases of Germany in 1857 and of 
 the Latin Union countries in 1865, were brought 
 about by the working of bimetallism of the stand- 
 ard, after the gold price of silver had risen above 
 60 7-8 pence per standard ounce. The profit on 
 minting gold in France at 15 1-2, sent the money- 
 mongers into Germany to exchange silver for it, 
 until gold had nearly disappeared and its place was 
 filled with silver. 
 
 The action of the Vienna Convention looked to 
 the gradual adoption of gold coinage, but the effect 
 of the agreements reached was quite in the other 
 direction, that of establishing the maintenance of 
 a pure silver currency. The experiment of a trade 
 gold coin failed completely. The premium on the 
 minting of gold in France drew all the gold there,, 
 and left Germany little but silver, 
 
 146. GERMANY'S GOLD STANDARD SYSTEM. 
 
 From the date of the Vienna Convention, prog- 
 ress was sought on the basis of a silver standard, 
 •with gold as trade money, and even after the 
 moment came, with the erection of the Empire^ 
 
i63 
 
 ■when everything favored complete reform, it was 
 only at the last stage of the preparation of a bill to 
 establish a monetary system that the gold standard 
 ■was settled upon. 
 
 The Act to establish the system passed Dec. 4th, 
 1871, and a second Act of July 9th, 1873, declared 
 the law of tender. Mr. Shaw says: 
 
 "The unit of the system is the mark, which is the 
 y^.-g- part of a pound of gold of 500 grammes at 
 9-10 fine, and is coined into pieces of 20 and 10 
 marks. The gold crown is a lo-mark piece, is 9-10 
 fine, and struck at a tale of 139 1-2 pieces to the 
 German pound; charge for coinage, 3 marks per 
 pound of fine gold." 
 
 "The pound of fine silver is struck into loa 
 marks, 9-10 fine. The total amount of silver coin 
 not to exceed 10 marks per head of population. 
 No individual need accept more than 20 marks of 
 imperial silver coin in payments. They are 
 accepted in any amount by the Empire and by the 
 Federal States." 
 
 "All other German coins are no longer legal ten- 
 der, and have been withdrawn, with the single 
 exception of the thaler pieces. Whatever pieces of 
 this kind still exist are legal tender to any amount, 
 like the imperial gold coins, each being equal to 3 
 marks." * 
 
 147. GERMAN GOLD AND SILVER 
 
 "The total silver withdrawn from circulation up 
 to the close of 1880 was 1,080,486,138 marks. Of 
 
 *"Mist. of Currency," pp. 215, 216. 
 
164 
 
 this amount 382,684,841 marks were delivered to 
 the mint for coinage into the new imperial silver 
 coins. The remaining 696,797,069 marks were 
 melted into silver and produced 7,474,644 pounds 
 of fine silver. Of this quantity 7,102,862 pounds 
 were sold up to Maj', 1879." * 
 
 The account of the gold minting of the recon- 
 structed German Empire, from 1872 to December, 
 1878, makes a complete total, in Mr. Shaw's report, 
 of 1,205,786 lbs. weight = ;^84, 103, 584.1 
 
 148. RECENT GERMAN AGITATION. 
 
 There has sprung up recently j^ in Germany a 
 movement of profound discontent of the landown- 
 ers and land- cultivators, the uninstructed and 
 headstrong zealots of which are trying to work the 
 discredited delusion of the double standard. An 
 injury, not to say a wrong, had been done to Ger- 
 man agriculture and German land by a treaty of 
 commerce with Russia admitting Russian cereals 
 at a low rate of duty. The weight of the discon- 
 tent, and the hold which a delusive bimetallism, of 
 the standard had upon the chiefs of the discon- 
 tent, made it a necessity of policy for the govern- 
 ment to go somewhat into the matter, and for the 
 sound money Liberals to lend themselves to the 
 hopeless quest of relief for low prices in bimet, 
 allism of the standard. 
 
 *Shaw: "Hist, of Currency " p. 219. 
 
 fid. p. 2i8. 
 
 \ Refers to 1896. 
 
165 
 
 149' INQUIRY ON BEHALF OF SILVER. 
 
 In the spring of 1894 a commission of sixteen 
 members was appointed by the Imperial govern- 
 ment to consider whether means could be found for 
 raising the price of silver and making it more 
 stable. Twenty-one sessions of this commission 
 accomplished nothing more than to show, as its 
 president said in closing its proceedings, how diffi- 
 cult it is to find something which would evidently 
 be desirable if it were attainable. The proposition 
 of an international conference to promote the free 
 coinage of both metals on an agreed ratio (pre- 
 sumably 15 1-2 and regardless of England) was 
 favored by the six decided bimetallists on the com- 
 mission, but entirely opposed by the two moderate 
 bimetallists and the seven gold standard members 
 (an eighth being absent). The proposal of the two 
 moderate bimetallists of a plan looking to a larger 
 use of silver by augmenting the weight of the sil- 
 ver coins in actual use, was rejected by all the other 
 members. The plan was to be carried out under a 
 convention with other governments, and especially 
 that of Great Britain, with an engagement of the 
 latter to reopen the Indian mints. This was a 
 suggestion in the direction of bimetallism of money, 
 which may reasonably attempt to do as much for 
 silver as respect for the place of silver below the 
 gold standard will permit. 
 
 150. LATEST GERMAN SILVER MOVE. 
 At a later date, after the close of Caprivi's min- 
 istry, and the gain which the land-owning interest 
 made by the change, a motion asking the Imperial 
 
i66 
 
 government to take the initiative for assembling a 
 new international monetary conference, received 
 the support of both the Conservative parties and of 
 the Catholic party, and of nearly all the National 
 Liberals; the latter yielding, against their judg- 
 ment, to the pressure on them from a portion of 
 their constituents, and in the hope that a confer- 
 ence, inevitably stopping short of resurrection of 
 bimetallism of the standard, might yet find some 
 remedy for the existing discontent, or at least 
 some cure for the silver craze of the German 
 peasants.* 
 
 CHAPTER XIV. 
 
 INDIA AND THE GOLD STANDARD. 
 151. INDIA'S TRIAL OF SILVER. 
 
 British India emerged from the difficulties of the 
 double standard in 1835, when the silver standard 
 was adopted. But the growth of commercial inter- 
 ests gave rise to objection to silver on account of 
 its bulk and weight. "As early as 1859," says Mr. 
 Horace White, " the commercial classes of the 
 country began to urge the government to adopt the 
 gold standard, with silver as subsidiary currency. 
 
 "In 1864 the Bombay Association addressed a 
 memorial to the government on the subject, saying 
 that 'a silver currency might have been suitable to 
 the country when its commerce was limited and 
 
 * Mr. Horace White gives a very lucid account of these recent 
 German movements, in an appendix to his " Money and Banking," 
 pp. 447-452- 
 
i67 
 
 payments in the main extremely small, but was 
 very inconvenient when wealth was largely diffused 
 throughout the country and the operations of com- 
 merce had become so enormous. The transport of 
 this bulky and cumbersome currency entailed heavy 
 and useless expense on the country and was a seri- 
 ous impediment to trade. ' 
 
 ' ' The Bombay chamber of commerce took similar 
 action, saying that 'the importation of gold into 
 India had steadily increased for many years, though 
 it was not legal tender; that the natives themselves 
 had devised a rude remedy for the deficiency of the 
 existing silver currency by using gold bars stamped 
 by the Bombay banks as a circulating medium; 
 and that the exclusion of gold from the currency of 
 India could not be justified or be considerd other 
 than barbarous, irrational and unnatural. ' " * 
 
 This effort of India itself, more than thirty years 
 since, to secure the gold standard, with silver sub- 
 sidiary, caused the government of India to suggest 
 that a system of bimetallism be adopted. The 
 British government refused on the ground of the 
 impracticability of a double standard. By 1878 the 
 government of India wished to close the mints 
 against the free coinage of silver until the demand 
 should operate to cause a rise of the standard coin 
 in value. Silver had fallen from about 6od. an 
 ounce to Sod. , and the suggestion to close the mints 
 for a time was proved by the event to have been a 
 ■wise one. But British hesitation in London refused. 
 
 In 1886, silver having fallen to 426.. per ounce. 
 
 ' Money and Banking" pp. 6g, 70. 
 
i68 
 
 the India government again suggested decisive 
 measures and again met British refusal. March 23, 
 
 1892, with silver down to sgd., the India govern- 
 ment called the attention of the home government 
 in London to the special request of the Bengal 
 chamber of commerce that something be done, but 
 still British hesitation prevailed. 
 
 152. INDIA DEMANDS GOLD. 
 
 June 21, 1892, the India government sent to Lon- 
 don suggestions for adopting the gold standard with 
 large use of legal tender silver, which had been, 
 matured by Sir David Barbour, the India Financial- 
 Secretary and a thorough bimetallist. This emi- 
 nent India official, although a bimetallist, declared 
 that, unless the Brussels Conference satisfactorily- 
 arranged for international bimetallism, the gold 
 standard would be a necessity in the fast advancing 
 wreck of Indian finances due to the rapid decline- 
 and the worse uncertainties of silver. 
 
 At a later date Sir David again pointed out how- 
 very bad the silver situation in India was, how con- 
 fidence in silver was utterly destroyed, and how 
 certainly failure of the United States to continue 
 its monthly silver purchases would tend to hastert 
 the worst possible breakdown of silver dependence- 
 in India. The British government met this des- 
 perate silver situation of India by entrusting a 
 committee of eminent experts, of which Lord Chan- 
 cellor Herschell was chairman, with the task of 
 determining what should be done; and May 31, 
 
 1893, this committee reported on the chief facts of 
 money and commerce in India, and recommended 
 
169 
 
 that the request of the government of India for 
 permission to close the mints against silver should 
 be granted, except as rupees might be coined on 
 government account. 
 
 153. INDIA GETS THE GOLD STANDARD. 
 
 The British government in London gave its con- 
 sent at last, after fifteen years of refusal, to the 
 demand of India for stopping the coinage of silver, 
 and June 26, 1893, the India government announced 
 this in India. It was supposed that rupees in silver 
 might appreciate in value, and to control this the 
 government announced that it would supply them 
 at the rate of is. 46.. per rupee, and would receive 
 gold at that rate in payment of taxes. 
 
 This did not mean that if silver kept on falling 
 the government would hold up the silver rupee to 
 IS. 4d. gold value. And silver did keep on falling, 
 first from 38 3-4d. early in June, to 30 i-2d. after 
 the closing of the mints, and later to 27 i-2d. 
 Although the British government held back from 
 selling in London the bills payable in rupees in 
 India for less than is. 4d. per rupee, they finally 
 had to sell at 15 3-4d., and from that down to 13d. ; 
 and even 13d., with silver at 27 1-2, meant 2d. more 
 than the value of the silver in the rupee. The 
 rupee, that is, will pass in India for that much more 
 than its real silver value. 
 
 India thus came to the gold standard, not through 
 the eagerness of London to fasten it upon her, but 
 in spite of protracted British hesitation, and through 
 the sense, which commerce in India had created, of 
 the necessity of gold for large use in place of silver, 
 
170 
 
 ■and as a standard far less uncertain than silver, to 
 which silver could be related with some possibility 
 of holding fairly steady its currency value. 
 
 154. INJURY DONE BY FREE COINAGE. 
 
 A recent statement of undoubted authority on 
 the silver situation in India shows conclusively 
 that the suspension of free coinage of silver had no 
 other purpose than that of increasing the useful- 
 ness of silver as money in that country. The rep- 
 resentation commonly made by advocates of free 
 coinage that the Indian mints were closed to silver 
 in order to give an advantage to gold and compel 
 India to pay in the dearer gold instead of in the 
 cheaper silver, has never been true, and could not 
 be true. India has all along paid in gold, that is, 
 in silver rupees counted at whatever they would 
 bring in gold in London. And India's trouble has 
 been that the silver rupees kept falling in value in 
 the London market, as the direct and inevitable 
 result of the steadily falling value of silver and of 
 the supply of rupees exceeding the demand to such 
 an extent as to make it difficult to hold up the value 
 of the coins above that of the silver in them. 
 
 155. INDIA'S DEMAND FOR SILVER. 
 
 India was for many years as large a taker of sil- 
 ver as the United States could be expected to be 
 tinder free coinage. India is a continent in breadth 
 and in bulk of population, and it is insatiable in its 
 readiness to take silver. The net imports of silver 
 into India in the twenty- three years from 1870-71 
 
171 
 
 to 1892-93 were 165,226,000 tens of rupees, an 
 average of 7,184,000 tens of rupees — about $35,- 
 <X30,ooo — annually. This absorbed nearly one- 
 third of the silver production of the world. It was 
 a case, if there could be one, of a section of man- 
 kind, almost more than a nation, large enough and 
 strong enough and independent enough, to carry 
 silver as money, and get the best work of money 
 out of it, no matter what might or might not be 
 done with silver elsewhere. 
 
 J 56. FUTILE EFFORT TO HOLD UP SILVER IN INDIA. 
 
 But as a matter of fact the independence was 
 purely imaginary. In trading with the world India 
 had to have her values counted in gold, and values 
 which India herself counted in silver rose or fell, 
 when counted in gold, just according to the market 
 price of silver, together with any extra fiat or credit 
 value which the Indian silver coins might have. 
 The actual case was that the market price of silver 
 went lower and lower, and that the coinage was so 
 immense as to make-it hard to give the coins even 
 a small extra credit value. It was desired to have 
 the rupee pass in trade for 16 pence or 32 cents, 
 when it was intrinsically worth as silver consider- 
 ably less than that. The immense need of the 
 money for trade throughout India, and the Indian 
 liking for silver, gave some chance to carry the 
 rupees at more than their intrinsic value, but the 
 -excessive quantity of them, with the free coinage 
 mills running wide open, made the difficulty of 
 ■circulation at partly credit value almost insuper- 
 able. The bottom question all the time was, and 
 
172 
 
 always must be, at what rate the people of India 
 would take them in trade. If, for example, a rupee 
 actually worth in silver eleven cents would pass 
 for fourteen or fifteen cents in India, that would 
 put up the gold price of rupees in London. The 
 ignorant, or perhaps mendacious, calumny has 
 been employed in certain quarters that English 
 interest was for gold against silver, and that coin- 
 age of silver was stopped to injure silver and 
 thereby benefit gold. The exact contrary has 
 been, and always must be, true. Although India 
 greedily absorbs gold, the immense trade of the 
 common people requires silver, and English inter- 
 est is as strong for silver in India, and to benefit 
 silver rupees in the gold market of London, as it 
 is for gold in England. How to make the rupee 
 pass, say for i6 pence in paying and purchasing 
 power in India, when the intrinsic value of the sil- 
 ver in it was far below that, has been the problem 
 of recent Indian finance. 
 
 157. PRESENT STATUS OF SILVER IN INDIA. 
 
 It was when all other plans had failed that the 
 suspension of coinage was resorted to, in the hope 
 that a fixed parity could be created through the 
 credit of the government and the limitation of the 
 supply of silver rupees to a quantity not in excess 
 of the legitimate monetary interests of India. It 
 was something, however, which could not be forced. 
 It was desired to have the rupee sell for 16 pence, 
 or about 32 cents, in the London market. But the 
 market would not pay that, until the growth of 
 credit warranted doing so. The bills payable in 
 
173 
 
 silver rupees in India, which are sold in London, 
 brought only 13.62 pence in April, 1894; but in 
 March, 1896, the price had reached 14.375. and this 
 Avas advanced to almost 16 in July, 1896. By limit- 
 ing- the supply of silver to the real needs of India, 
 government credit and popular demand have raised 
 the rupee from its recent hopeless estate under 
 free coinage. To no small extent an arbitrary 
 credit value has been given to the silver coins in 
 spite of the continued low price of silver. Free 
 coinage prevented this while it lasted, and return 
 to free coinage would destroy this most remarkable 
 success of Indian finance. 
 
 CHAPTER XV. 
 
 MONEY AND PRICES. 
 
 158. ENTIRELY FALSE ASSERTION OF DISASTROUS 
 FALL CAUSED BY GOLD — NO DISASTROUS CHANGE 
 IN PRICES. 
 
 It is said that the single gold standard has pro- 
 duced a disastrous fall in the prices of commodities. 
 To this statement, which puts a wholly false con- 
 struction upon very simple facts, there is the most 
 conclusive possible answer, no matter what the 
 point of view from which we come at the question. 
 It is especially gross falsification to say that under 
 gold there have been changes for the worse. 
 There has been no general disaster, but quite the 
 contrary. Wages have advanced since 1873, with 
 the result of giving to the great mass of the people 
 
174 
 
 more of the necessities and comforts of life for the 
 same labor than they could command before. The 
 most thorough, full and conclusive study of prices, 
 wages, transportation, and other conditions of 
 demand and supply,* has shown by unanswerable 
 figures, which cannot lie, that the purchasing power 
 of money wages has been rising steadily for at least 
 twenty years, and that the decline in prices since 
 1873, ^T^^ especially since 1882, has been a source 
 of prosperity and not of depression to the great 
 mass of the people. Low prices for whatever the 
 people have to buy, coupled with correspondingly 
 high wages for labor, are a blessing and not a 
 disaster. 
 
 159. CAUSE OF DECLINE IN PRICES. 
 
 The decline in the prices of commodities has 
 been due to the ability and desire of sellers to sup- 
 ply the demand at such lower prices as have pre- 
 vailed, and has not been due to the gold standard. 
 So far as this decline has touched American pro- 
 ducts, and so far injured American producers, it 
 has been in part the result of immensity of Ameri- 
 can production, causing necessity for selling at low 
 prices in order to sell at all, and in part the result 
 of immense production of our products in other 
 countries, making them our competitors in all the 
 markets of the world. The prices of cotton, wheat. 
 
 * Report on Wholesale Prices, Wages and Transportation, made 
 by the Senate Committee on Finance, March 3, 1893, of which Mr. 
 Horace White says, — "a work which has never been surpassed 
 in this or any other country in fullness, thoroughness and 
 impartiality." — " Money and Banking '' p. log. 
 
175 
 
 and corn are especially affected by excess of pro- 
 duction on our own part, and by competitive pro- 
 duction in other countries. 
 
 l6o. HOW SUPPLY AND DEMAND WORK. 
 
 An illustration of how supply and demand aifect 
 prices may be found at almost any time in the press 
 reports of the current market. A very good 
 example is the following statement from the Even- 
 ing Transcript of Boston, Mass. : 
 
 ' ' The potato yield of the country last year was a 
 great success as a crop and a great failure as a 
 source of income. For a variety of reasons the 
 farmers of the great agricultural sections planted 
 an unusually large acreage to potatoes. The sea- 
 son was favorable and the product was so abundant 
 that the usual result followed. The market was 
 glutted and the prices went down to so low a figure 
 that many found it more profitable to feed their 
 surplus to their stock than to carry it to market, 
 and take chances. In New Hampshire potatoes 
 sold for fifteen cents a bushel. In Western Massa- 
 chusetts they went down as low as ten cents, not 
 in a few isolated cases but in sufficient quantities 
 to make that the price for a time. A farmer near 
 Westfield took thirty bushels of potatoes to market, 
 which he sold for $3 and invested the proceeds in 
 a pair of shoes. For this reason he is going to vote 
 for free silver, not realizing that supply and 
 demand are the arbiters of prices, and that he was 
 the victim of a natural law, whose operation cannot 
 be controlled by any policy of parties or govern- 
 ment." 
 
176 
 
 l6l. THE CASE OF COTTON. 
 
 If we look at the case of cotton, once the surest 
 wealth-winning product of American soil, we can 
 most readily see that the inexorable law of supply 
 -and demand, without any reference to questions of 
 money, has carried prices down, or down and up, 
 according to circumstances. Cotton may easily rise 
 in supply from America alone so much above the 
 demand as to put the price too low to give the 
 grower any profit. Cotton has heaped America 
 with wealth since Eli Whitney's invention of the 
 cotton gin, and yet we at last saw in the crop 
 of 1 894, which was fifty per cent, larger than any 
 crop prior to 1887, a crop so much beyond the 
 world's demand as to almost abolish profit. 
 
 I62. WHEAT PRICES. 
 
 Wheat necessarily goes down in price in conse- 
 quence of the enormously rapid increase of wheat- 
 growing throughout the world, and the correspond- 
 ing rapid development of transportation facilities 
 for carrying this wheat to market. The increase 
 of production of wheat in the United States alone 
 has been from 292,136,000 bushels in 1875 to 611,- 
 780,000 bushels in 1891 ; and even in 1895, with a 
 partial failure of the crop, 467,100,000 bushels. 
 The acreage of wheat increased fifty per cent, from 
 1875 to 1891; from 26,318,512 to 39,916,897 acres. 
 The simultaneous advances made in the production 
 of all the chief crops gives more than full measure 
 of supply to the demands of mankind. Corn in the 
 United States went from 34,091,137 acres in 1871 
 to 76,204,515 acres in 1891; an advance of 124 per 
 
\^7 
 
 <jent. ; and in 1895 the yield of corn was more than 
 -double that of any year prior to 1875. In the same 
 ■way both the acreage and the average annual yield 
 of oats have doubled since 1871. And over and 
 above these American advances, such countries as 
 Jlussia, India, and Argentina in South America, 
 have sent immense quantities of their products to 
 compete for a large share of the supply of the 
 demands of the world. That changes such as these 
 have worked the fall of prices of farming products, 
 -with no reference whatever to the gold standard, 
 is shown by the fact that under gold from 1840 to 
 1890 all the principal farm products rose in price; 
 as barley from 62 cents to 95, corn from 38 to 58, 
 oats from 20 to 58, rye from 68 to 97, and wheat 
 from 38 to $1.03. As at the same time, from 1840 to 
 1890, the average wages of all occupations have 
 more than doubled, and since i860 have increased 
 over 75 per cent., all under gold, the whole effect 
 upon prices does not seem a matter for complaint. 
 
 J63. WHOLLY FALSE CLAIM THAT APPRECIATION OF 
 GOLD SINCE 1873 NOW INJURES DEBTORS. 
 
 In connection with what is said of prices, it is also 
 said that the burden of mortgages and of all 
 national and State indebtedness has been increased 
 by giving gold the position of standard money. 
 This is said to have caused gold to appreciate in 
 value, thus causing "the dollar of account," or 
 standard dollar in which debts must be counted 
 when paid, to be worth a good deal more than the 
 value represented by a dollar when the debts were 
 incurred. 
 
 12 
 
178 
 
 It is but too easy to form a wrong impression 
 that gold has appreciated in value. In the year 
 1 8 ID, when England was on a paper basis, and gold 
 was at a premium of 15 per cent., the governor of 
 the Bank of England, and other financial experts, 
 insisted on the opinion that gold had appreciated, 
 and that bank notes had not depreciated. A 
 majority of the merchants and statesmen of the day 
 also took this ground with confidence. To settle 
 the question Parliament appointed a committee to 
 make the most thorough examination possible, and 
 the conclusions of this committee, published in 
 what is known as the "Bullion Report," made it 
 plain beyond all question that the paper currency, 
 because of its excessive amount, had depreciated, 
 and that gold had not appreciated. The plausible 
 opinion of merchants, statesmen, and financiers 
 was proved to have been wrong. 
 
 The double answer to the claim that appreciation 
 of gold now injures debtors is this : 
 
 (i) No proof whatever that gold has appreciated 
 to any particular extent, has been or can be given, 
 except the fact that a larger amount of the things 
 of value to man can be obtained with it now than 
 could have been obtained twenty years ago ; and 
 
 (2) This fact of low prices only includes things 
 which are cheap in consequence of abundant supply 
 and competition in trade, and does not include 
 labor, the wages of which are higher instead of 
 lower; thus giving a situation which is broadly- 
 advantageous, even to the debtor class; which, 
 moreover, has not been created by the gold stan- 
 dard ; and which can be helped, so far as may be 
 
179 
 
 necessary, by measures of tariff calculated to get 
 still more of low prices for the farmer, the rancher, 
 and the miner. 
 
 Mr. David A. Wells, in a work of great interest 
 and importance, on "Recent Economic Changes, " 
 traces very carefully the decline in prices of staple 
 articles which has actually taken place since 1873, 
 and shows that the progress of invention, improve- 
 ments in manufacture, greatly lessened cost of trans- 
 portation, and other known conditions of supply 
 and demand, have done all the actual cheapening 
 of goods, precisely as would have been the case if 
 the gold standard had not existed. 
 
 164. APPRECIATION OF GOLD DESIRABLE. 
 
 If it be true, not merely that silver has depreci- 
 ated precisely as copper has done, through the 
 operation of the conditions of production, but that 
 gold, apart from any effect of the conditions of pro- 
 duction, and in consequence of the place given it, 
 whether as money above all other and the sole 
 standard of value, or as a precious metal for use in 
 the arts, has appreciated, the fact of such apprecia- 
 tion, cannot be regarded, in any light whatever in 
 which it can be viewed, as other than an uplift of 
 ■wealth and prosperity for mankind ; a fact of uni- 
 versal advantage, a benefit and not an injury to all 
 concerned. 
 
 165. GOLD THE SUPREME COMMODITY. 
 
 If the whole mass of gold in the world should 
 appreciate one per cent, every year for twenty 
 years, the chief result would be an addition of one- 
 
i8o 
 
 fifth to the value of this mass of property, and it 
 would be just as much, and just the same, a benefit 
 as a corresponding rise of value in land. There is 
 no more reason why gold should not appreciate to 
 universal advantage than there is why land should 
 not appreciate to universal advantage. What we 
 justly regard as universal advantage may, indeed, 
 in the case of rise in the value of land, work to the 
 greatest advantage for some, to the least advantage 
 for others, and to more or less disadvantage to 
 others, but this does not alter the general fact of 
 universal advantage. It is precisely the same in 
 the case of gold, nor does the particular case of 
 serious disadvantage to debtors from having to pay 
 in appreciated gold value warrant thinking the 
 appreciation of gold not a universal advantage. 
 
 l66. DEBTORS NOT HURT BY GOLD. 
 
 In every respect except the single one of payment 
 of debt the debtor will reap benefit, and if he 
 loses something in respect of his position as a 
 debtor, there are four things to be said about it, — 
 first, that his loss falls as one of those chances 
 which fall widely and in great number, on the just 
 and the unjust alike; second, that with the excep- 
 tional slowness and steadiness with which the value 
 of gold has ever moved, or, apparently, ever can 
 move, no great change, up or down, can take place 
 within the life of a common debt ; third, that, with 
 the perfection of knowledge and justice among men 
 provision may undoubtedly be made against any- 
 thing like injustice to debtors in the matter of pay- 
 ment in gold largely appreciated in value, — and. 
 
i8i 
 
 fourth, that mankind at large would be immensely- 
 advantaged rather than otherwise if it came to be 
 understood that all debts running for periods of 
 years involved the almost certain peril of payment 
 in gold value considerably appreciated; as either 
 interest charges on such debts would be lower, or 
 the peril would deter from contracting the debts. 
 There are, in short, no considerations tending to 
 show that appreciation of gold is not as much to 
 be desired as any other rise in value of property, 
 even if it is somewhat to the disadvantage of debt- 
 ors, unless they are on the guard against it. If 
 appreciation takes place slowly and steadily, and 
 serious fluctuation in value does not occur, now 
 suddenly up and again suddenly down, then may 
 gold remain all that it has ever been as the supreme 
 commodity of the word, serving, by its high and 
 steady value, as a standard of value far better than 
 any other. 
 
 167. GOLD THE SUPREME SERVANT. 
 
 In the services which gold renders other than 
 that of a supreme commodity and standard of value 
 it is the supreme servant of all men, from the high- 
 est to the lowest, and by so much as it appreciates 
 in value it can render services which are by so 
 much the better as the appreciation is greater. In, 
 for example, the matter of prices, the appreciation 
 of the standard of value tends to make the necessi- 
 ties and comforts of life figure lower than they 
 otherwise would, even if they are not absolutely 
 any lower, while wages are not to the same extent 
 carried down, not only because efforts to prevent 
 
1 82 
 
 this are made to the utmost, but because the greater 
 wealth of the world makes the payment of rela- 
 tively higher wages practicable. Depreciated 
 money causes a rise in the prices of commodities, 
 without anything like a corresponding rise of 
 wages, and thus injures all wage-earners so far as 
 they are purchasers of common commodities, 
 because they fail to gain in wages enough to meet 
 what they must give more than before for comforts 
 and necessities. To just the contrary effect appre- 
 ciated money will tell for the broad and deep bene- 
 fit of the wage-earning and commodity-purchasing 
 mass of mankind, and by so much as gold may 
 slowly and steadily appreciate, as the ages of human 
 progress roll hy, by so much will the average of 
 human welfare experience and uplift altogether 
 beneficent. 
 
 l68. USE OF METALS AS MONEY DOES NOT CAUSE 
 APPRECIATION. 
 
 It is a very ignorant and false notion that the 
 more or less use of gold as money, or the place 
 given it as the standard of value, materially affects 
 its commercial value in the markets of the world. 
 That value is in any case so high, that it does not 
 make the slightest difference whether gold has the 
 standard position or whether silver is the standard 
 and gold is current at a commercial rate per ounce. 
 If it is not coined, issued, and counted as money, it 
 will none the less figure in trade precisely as money 
 does, and hold its place and value just as well as if 
 recognized by mintage and issue. 
 
 The foundation and stay of all good money of 
 
183 
 
 account, all real and sure money, is the commercial 
 value of the metal. No matter how much silver 
 may be given place and name as standard and legal 
 tender, its only sure foundation and firm stay is 
 the commercial value of the metal ; and that will 
 be counted in gold, even if gold is not recognized 
 as money, for the simple reason that people can 
 count in gold more easily and surely than they can 
 in silver, because gold values are so much more un- 
 changing, or but slowly changing, than silver values. 
 
 169. PRICE OF SILVER NOT AFFECTED BY USE AS 
 MONEY. 
 
 It does not really help the price of silver even, 
 much less does it affect that of gold, to employ 
 either the one or the other as monej\ Whatever 
 may happen contrary to the view thus taken is 
 abnormal and transient, just as an abnormal and 
 transient acceptance, even at full value, may be at 
 first given to paper money under which there is no 
 secure basis, and the due course of which will be 
 down to no value at all. 
 
 It did nothing whatever for the price of silver 
 that it was standard money by legal fiction from 
 1792 to 1873. The hucksters of worthless finance, 
 trading on the distress and the credulity of the 
 ignorant, put forward the false pretence of money 
 of the fathers of the Constitution, meaning silver 
 money along with gold, and proclaim, with extra- 
 ordinary indifference to truth, that silver is fallen 
 one-half from what its market value would be if 
 ■we had again the money of the Constitution and of 
 the fathers. The simple fact is that the fathers 
 
1 84 
 
 and the times of the Constitution saw no silver 
 money and yet saw the price of silver high. It is- 
 not less the fact that our times have seen a vast 
 flood of silver money, yet have not seen in conse- 
 quence any check to the steady decline of the price- 
 of silver. 
 
 From 1805 to 1835 not a single silver dollar was- 
 coined, yet the commercial ratio, which was 15.79 
 in 1805, was only changed to 15.80, one-tenth of a 
 cent, in 1835 ; and it ruled as good, or better than 
 this, down to 1874, although the average coinage 
 per year was only $173,466, and the total for the 
 thirty-eight years, — 1836 to 1873, — was only 
 $6,591,721. During eighty years from the founda- 
 tion of our government the price of silver never 
 fell below $1.29 per ounce, although the average 
 coinage was only $100,353 each year. The price 
 did not fall in the no-coinage period of thirty years, 
 1805-1835, nor did it rise in the coinage period of 
 thirty-eight years before 1874. 
 
 Use as money, or disuse as money, had no effect 
 upon the price. And after the increase in produc- 
 tion of silver began, about 1 876, to carry the price 
 down, steadily and surely, no amount of American 
 coinage had any real effect to stay that decline. 
 The coinage from 1878 to 1896, amounting to 
 $430,790,041, an average each year of $23,285,948, 
 did not, and could not, materially affect the decline. 
 Coinage, issue, and circulation (or storage securing^ 
 paper in circulation), does not use up, and take out 
 of reach as a commodity, the metal so dealt with, 
 but leaves it on the market, the same exactly as if 
 it were not coined. 
 
i8s 
 170. MARKET PRICE NOT MADE BY MONEY USE. 
 
 It is, therefore, futile to a degree to count use of 
 a metal as money as of advantage td its market 
 price. Gold cannot materially appreciate from any 
 use as money; nor can silver depreciate because 
 not used as money, or because of the large use of 
 gold as money. And the difference made by hav- 
 ing gold only as the money of account, and silver 
 as merely subsidiary money; gold as standard 
 money of full intrinsic value, and silver as second- 
 ary money, upon a parity with gold one-tenth fiat, 
 or credit of the government, and nine-tenths 
 intrinsic value ; could not in the smallest degree 
 affect the market values of either gold or silver. 
 
 171. HOODLUM AND RASCAL FINANCE. 
 
 The ignorance is simply monstrous, and the aims- 
 terribly mischievous, of the anarchistic revolution 
 represented by advocacy of free silver as a means 
 of levelling up the values of silver and of farm 
 products to the present value of gold, or to the 
 value of gold properly brought down to a midway- 
 level. If by lies working delusion, and by criminal 
 violence to the rights of the moneyed class, any- 
 thing whatever could be got for the victims of pov- 
 erty and debt, a cyclone of hoodlumism in finance 
 might leave somebody benefited, even if at the. 
 cost of general injury. But no one, neither the 
 unfortunate debtor, nor the unhappy farmer, nor 
 the owners of silver, can derive any degree or kind 
 of benefit from the wild and wicked delusion that 
 making or unmaking money, silver or gold or 
 
1 86 
 
 paper, can at all affect the values of silver and farm 
 prodacts, to lift them up, or that of gold, to bring 
 it down. 
 
 172. THE FOUNDATION OF PROSPERITY. 
 
 The one fact that ages of bitter experience, and 
 •of slowly and painfully gained knowledge, bear 
 witness to, is the immense mischief and monstrous 
 wrong, first of having a standard of value which is 
 in any degree a fiat lie, and second of changing the 
 standard away from real value to fiat and false 
 value. Silver has given place to gold, not from 
 any unfair advantage enjoyed by gold, for the 
 advantage at first and for a long time was with sil- 
 ver, but solely because silver was so often found 
 to fail, where gold upon trial was found to be 
 greatly superior. Gold has come to the place of 
 supreme property, supreme standard of value, and 
 supreme service of all human interests, solely in 
 consequence of merits universally demonstrated 
 and benefits universally rendered. A crusade of 
 ignorance and madness against gold cannot but tell 
 with far the most terrible effect in injury to the 
 needy, the depressed, the debtor class. 
 
 173. ENTIRELY FALSE IDEA THAT GOLD HAS 
 APPRECIATED. 
 
 It would be difficult to hang a cause of any impor- 
 tance on an assumption more thoroughly mistaken 
 and false than that of the appreciation of gold, and 
 of the effect of adopting gold as the standard of 
 the monetary system everywhere to make gold 
 
i87 
 
 appreciate more and more. The further assump- 
 tion that such appreciation of gold, by putting 
 larger value under money figures, and thus lower- 
 ing the figures of prices, can be detrimental in any 
 way to any of the parties to exchange of values in 
 trade, is totally baseless, the merest blunder of 
 ignorant thinking. One of the surest principles of 
 monetary science is the advantage, rather than the 
 contrary, to all concerned, or rather the more sure 
 justice to all concerned, and the more equal advan- 
 tage of all, of appreciation of the value covered by 
 a money figure, and the consequent tendency to 
 lower prices in the exchanges of trade, that is, 
 values nominally lower while not in reality altered 
 at all. 
 
 But whatever may be the truth and the import- 
 ance of the law of lower prices in proportion as 
 values under money figures are greater, the con- 
 tention warranted by every consideration bearing 
 upon the point is that the values under the figures 
 of gold money are not as great as they were thirty 
 to fifty years ago, but are distinctly and consider- 
 ably lower. It is not, indeed, as easy as many cur- 
 rent statements assume to know where we are at in 
 our gold values. We cannot, for example, say that 
 if the present rate of interest is only one-half what 
 it was thirty years ago, and if the rate of payment 
 of wages to labor is double what it was a genera- 
 tion since, therefore gold is worth only half what 
 it was in i860 or 1870. The problem has too many 
 conditions to be of so simple a solution, and some 
 of them forbid thinking that gold values have fallen 
 one-half in thirty or forty years. But we may 
 
i88 
 
 safely reason from the facts, as to the rate of inter- 
 est and the wages of labor, that gold values are 
 distinctly lower, even if not very much lower. The 
 immensely increased production of gold would 
 naturally carry down the price, or tend to carry it 
 down, but against this is to be put the fact which 
 weighs more than all others, the extent to which 
 the uses of gold have kept pace with the supply. 
 But this must be considered in connection with the 
 fa,ct that the more the gold standard prevails every- 
 where, the less will gold be actually handled in 
 settling exchanges, so that there cannot be any 
 danger that hunger of the money marts all over 
 the globe will carry up, or even upon the whole 
 rigidly hold up the value of gold. It will remain a 
 very slightly, very evenly, and very steadily declin- 
 ing value. 
 
 174. THE CAUSE OF HARD TIMES. 
 
 Apart from what would be not more than the 
 average of current distress, the cause of hard times, 
 for the years 1893- 1896, was far more the appear- 
 ance in the high places of the nation of hoodlum 
 and rascal ideas of gold and of relations with 
 England, than any real failure of the conditions of 
 prosperity among the people. England is very 
 largely an invaluable dependence for us for borrow- 
 ing at low interest vast sums of money which 
 we can use to great advantage in developing Ameri- 
 can possibilities. Every million of gold which we 
 can borrow from England is equal to five or six 
 millions of American development. A hundred 
 millions of English gold wisely handled and hon- 
 
1 89 
 
 estly held, would count from six hundred to a 
 thousand millions of American development. It is 
 our interest to bring English gold here and to keep 
 it here, which alone demands consideration. We 
 have no greater interest of a financial kind. It is 
 precisely as if groups of sons going far west, from 
 the seats of accumulated wealth on the Atlantic, 
 turned back to the ancestral homes to borrow capi- 
 tal needed for developing new seats of wealth and 
 prosperity. Nothing could be more natural ; noth- 
 ing more beneficial ; nothing less open to carping 
 criticism on the part of Americans, as though such 
 dependence upon England could be in any light 
 open to American objection. 
 
 175. FALSE " AMERICAN INDEPENDENCE." 
 
 It is only the shyster in monetary politics who 
 -can masquerade at this day in protestations of 
 American independence of Europe, and patriotic 
 indifference in New York and Chicago to London 
 and Paris and Berlin. The honest hoodlum of the 
 backwoods and the mining camp, elevated by the 
 chance of circumstances to some office or some can- 
 didacy, might perhaps suppose himself thinking 
 according to knowledge and judgment, and not 
 according to ignorance and madness, in proposing 
 that ♦the United States undertake a monetary policy 
 of isolation and separatism. But the hoodlum must 
 develop into a pronounced shyster,* if not a hire- 
 
 *" Shyster: One who does business trickily; a person without 
 -professional honor: used chiefly of lawyers." — " The Century 
 JHciionary." 
 
I go 
 
 ling of criminal politics, to deliberately argue, in 
 the full light of existing commercial conditions, for 
 American defiance of the demands of the universal 
 commercial system, which makes New York as 
 much one with London as if the Atlantic ocean 
 were not wider than an easily bridged river. 
 
 In earlier times, and in countries not at all in 
 touch with the general progress of mankind, gov- 
 ernments could shape commercial and monetary 
 conditions in disregard of the rest of the world, 
 but even China cannot do that now. The wish to 
 do it, the thought that it can be done, the argument 
 attempted that it ought to be done, indicate an 
 almost infamous blindness to the universal light 
 everywhere directing human progress. The sim- 
 ple fact is that America hires money in London as 
 a matter of profit to herself, and complies with the 
 conditions of the London money market solely in 
 her own interest, for what she can make out of it. 
 The money is there on hire, and more dependent 
 on a chance to be hired than we are on the chance 
 to hire it. It is gold solely because that is the best 
 money, and the best for us even more than it is. 
 the best for its owners. The main condition 
 imposed by those who have large store of gold 
 on hire in London is that we do not by any 
 trick try to steal it. It is to our advantage far 
 more than to any other that we comply with 
 this condition, no matter what it may at some 
 moments cost us. The injury to English gold 
 interests is slight compared with the injury to 
 universal American interests of the scoundrelism 
 in finance which can deliberately suggest that 
 
191 
 
 patriotism express itself in dishonor and fraud, 
 because the victims are English, and because some 
 letter of law or some plea of policy can be alleged 
 for doing it. The resolution which passed th& 
 Senate of the United States January 25, 1878, on 
 the proposal of Senator Matthews of Ohio, and by 
 a vote of 43 to 22, and which passed the House 
 by a vote of 189 to 79, was not only one of the 
 most senseless plunges into an abyss of dishonor 
 ever made, but it was a wild and wicked sacrifice 
 of American interests, on the flimsy plea of tech- 
 nical legal liberty to allege our right to construe 
 "coin" as meaning fiat coin of silver equally with 
 gold coin of account. The application of intelli- 
 gence in finance, not to mention honesty, would 
 have shown that "coin," in an unqualified absolute 
 promise to pay, must mean the gold coin of account 
 and could not by any light, or any hoodlum and 
 rascal exclusion of light, mean fiat silver coin,, 
 whose honest quality was solely in the promise it 
 carried of exchangeability for gold. But whatever 
 the right to read "coin" as meaning silver equally 
 with gold, the proclamation of this right was a 
 most senseless and wanton destruction of American 
 interests, which would have been enormously 
 greater had not the inflexible honesty of the Secre- 
 tary of the Treasury, Hon. John Sherman, inter- 
 posed with the explanation that "coin" would be 
 understood to mean gold. 
 
 176. ANTI ENGLISH FANATICISM. 
 
 One of the craziest expositors of anarchistic: 
 Americanism, Mr. J. P. Altgeld, whose position. 
 
192 
 
 as Governor of the great State of Illinois, proved 
 an appalling revelation of what may befall in 
 American politics, alleged in a speech of August 
 29, 1896, that the great money center of the world 
 now is London, that the large financiers of New 
 York not only act on the suggestions but follow the 
 dictation of the London bankers, and that similarly 
 the bankers elsewhere in America follow the dicta- 
 tion of a few New York bankers, although it com- 
 pels them to "take a position which is against the 
 interests of the community in which they live and 
 do business. ' ' In Mr. Altgeld's view the American 
 bankers "are ready to either blindly follow the 
 cruel dictates of the gold men or are hopelessly in 
 the clutches of what is called the 'eastern money 
 power.' " And further Mr. Altgeld represents 
 that the English money power is conducting a 
 campaign in this country, is seeking to fasten upon 
 the people of this country an English' yoke, to 
 install English Shylocks as task-masters over all 
 the generations of Americans that are yet to come, 
 and that the experiment of trying to force the 
 nations of the earth on to a gold basis for the bene- 
 :fit of European creditors is ruining the American 
 people. And to meet this terrible situation Mr. 
 Altgeld insists that we make cheap half-value dol- 
 lars, and ' ' pay back the English creditors, principal 
 and interest, in the same money exactly which they 
 gave us, dollars that shall have the same purchas- 
 ing power, that will buy as much property and as 
 much labor of every kind, as the dollars which they 
 gave us. ' ' 
 
191 
 
 177- ANARCHIST RAVINGS. 
 
 The wildest possible honest misrepresentation of 
 facts hardly suffices to explain such a picture as this. 
 There seems to lie behind in the mind of the author 
 ■of the picture a sort pf madhouse fury completely 
 incapacitating for taking note of reason or tru^th, 
 destroying all conscience of justice, and yielding 
 ravings hardly to be distinguished from those of 
 complete insanity. The system of banking wliicl^ 
 governs American relations with London is as hon- 
 est and beneficent as any organic product of huma;^ 
 progress ; the gold standard has come everywhere 
 throughout the world, or is coming, solely in con, 
 sequence of its recognized and demonstrated advan- 
 tages, its greater honesty and beneficence; the 
 borrowing for America of English gold, and the 
 creation and maintenance of close monetary rela- 
 tions between London and New York and Chicago, 
 have had no motive and no result other than that 
 of carrying London advantages of capital as widely 
 as possible throughout the whole vast wilderness 
 of American needs and opportunities ; and the only 
 thing which has prevented continuous and steadily 
 increasing- benefit to America from financial ties to 
 London, has been an Americanism of bastard type, 
 restlessly malignant towards England, and miser- 
 ably ignorant, and even dishonest, in matters of 
 national finance. The chapter of ignorance has 
 alone cost us a thousand millions, and one of dis- 
 honor and dishonesty would cost us twice as much, 
 more. 
 
 13 
 
194 
 178. FALSIFICATION OF FACTS. 
 
 The Altgeld theory is that "if the present stand- 
 ard is to be maintained, if our people must go on 
 paying interest and principal in dollars that require 
 twice as much sweat, twice as much blood to obtain, 
 as did the dollars that were in circulation when the 
 debts were created, then the doom of American 
 producers is sealed ; low prices will be made per- 
 petual and there will be no hope for the American 
 farmer, the American mechanic, or the American 
 laborer. ' ' 
 
 The falsification here could not be greater. 
 There is no more incontestable fact than the very 
 considerable rise in wages in recent times. The 
 dollar now paid in wages does not require as much 
 labor as the older dollar did. The assertion that 
 it requires twice as much is mendacity run mad. 
 And hardly less must be said of the expectation 
 that American laborers, mechanics, and farmers, 
 will be ruined unless the prices of whatever they 
 have to buy are doubled. Low prices of every- 
 thing except their labor are the greatest benefit to 
 them. Even to the farmer, whatever he may lose 
 by low prices of his products, he gains enormously 
 by low prices of everything for which he has to pay 
 money. These facts are so plain, their meaning is 
 so clear, and they so completely put the brand of 
 gross falsification upon Mr. Altgeld's allegations, 
 as to leave us no alternative but to presume that 
 stump speaking on the Altgeld plan imposes no- 
 restraint upon useful falsification. 
 
195 
 
 179- MENDACIOUS COMPLAINT AGAINST GOLD AND 
 BANKS. 
 
 In justification of his proposal to pay "our Eng- 
 lish creditors" in half -value dollars, Mr. Altgeld 
 brings against them this charge : 
 
 "We say that their act in getting silver demone- 
 tized and gold made dear, after they had succeeded 
 in getting our bonds and our notes, so as to compel 
 us to pay in a different kind of money from what 
 they gave us, dollars which cost twice as much, 
 was a fraud and a crime against civilization." 
 
 "The moneyed classes of Europe," Mr. Altgeld 
 says, "conceived the idea that it would be to their 
 interest to make money dear and property and 
 labor cheap." The execution of this fell purpose 
 by "the London bond holders," proceeded, accord- 
 ing to Mr. Altgeld, as follows: 
 
 "In 1873 they got our government to by law 
 demonetize silver, stop its coinage, deprive it of its 
 legal tender functions and reduce it practically to 
 the basis of token money, and between that year 
 and 1 880 they got nearly all of the governments to 
 take similar steps, so that silver was no longer a 
 primary or redemption money, but occupied the 
 place practically of token money, and as the amount 
 of silver dollars in the world was just about equal 
 to the amount of gold dollars in the world, it fol- 
 lowed that when silver was demonetized and its 
 coinage was stopped thereafter the work which was 
 formerly done by gold and silver together had to 
 be done by gold alone. The number of people 
 who had to have gold was doubled, its importance 
 was doubled and it necessarily followed that its 
 
196 
 
 purchasing power was doubled, so that thereafter 
 a gold dollar would buy just twice the amount of 
 products, twice the amount of property, twice the 
 amount of labor that it formerly did, on the 
 average. 
 
 "Formerly there was added every year to the 
 volume of money that existed in the world, not 
 only the amount of gold that was mined, but also 
 the amount of silver that was mined, less what was 
 used in the arts, and as the population kept increas- 
 ing constantly, and as it was necessary that the 
 volume of money should be enlarged every year to 
 keep pace with the increase of population in order 
 that prices might not fall, the world depended upon 
 the increase to be derived from both metals being 
 about equal in amount. But since the demonetiza- 
 tion of silver there is added each year only the gold 
 that is produced, less what is used in the arts. In 
 other words, the annual addition now to the stock 
 of money is only half what it ixsed to be, while the 
 annual increase in population is much greater than 
 it used to be. 
 
 ' ' Who are the men who profit by the existing 
 order of things? Only the New York and Euro- 
 pean speculators and the Englishmen who hold 
 American securities. The great bondholding 
 classes of Europe now find that one-half of the 
 interest on their bonds will buy as much labor and 
 will buy as much property as all of it used to buy. 
 Silver has not fallen. It occupies the same relation 
 to property, to the products of the earth and to 
 labor that it formerly did. It is gold that has gone 
 up. The purchasing power of gold has doubled 
 
197 
 
 and our people are obliged to pay their debts, prin- 
 cipal and interest, in dollars which, as a matter of 
 fact, are 200-cent dollars." 
 
 If this amazing financial screed were the avowed 
 product of a disordered mind or of a debate among 
 convicts in a penitentiary, the hoodlumism of intel- 
 lect which marks it could hardly be more suprising. 
 It hardly matters whether Mr. Altgeld makes these 
 statements as a matter of disgraceful ignorance or 
 of graceless mendacity, the falsifications are so 
 obvious and so absurd. 
 
 The total silver in circulation in the United States 
 in 1878 was $65,780,545. Five years later the 
 amount had risen to $160,436,865. Ten years later 
 (1888) the amount was $306,287,314; and another 
 five years (1893) carried it to $448,919,176. The 
 gold in circulation in the United States in 1878 
 amounted to $109,637,454. Ten years later (1888) it 
 was $511,954,224. The highest mark was reached 
 in 1892, $550,003,079. The per capita of silver in 
 circulation in 1878 was $1.83. It had risen to $6.71 
 in 1893. The per capita of gold in 1878 was $2.30. 
 It had risen in 1892^0 $8.39. The total money in 
 circulation in the United Stat&s in 1873 was $751,- 
 881,809. In 1883 it was $1,230,305,696. In 1893 
 $1,596,701,245 was the amount; a rise of the per 
 capita from $18.04 in 1873 to $23.85 in 1893. 
 
 During the sixteen years, 1879^1.894, Great Bri- 
 tain, France, and Germany, had coined $647,653,- 
 321 of gold, and $93,994,059 of silver. The .gold 
 coinage of the United States for the same period 
 had been $671,865,945 ; and its silver coinage $430,- 
 804,848. The sum of money thus coined in the 
 
198 
 
 sixteen years, 1 879-1 894, reached the enormous total 
 of $1,319,518,266 in gold and $524,798,907 in silver. 
 These figures give the lie to Mr. Altgeld's wild 
 pretence that since about 1880 the supply of silver 
 money has been cut off, and that the entire supply 
 of money has been reduced one-half. 
 
 180. FRANCE AND SILVER. 
 
 The story of silver in France shows how little 
 truth there is in the pretence that injury to money 
 has been done by injustice to silver. From 1795 to 
 1849 France coined $850,000,000 in silver to $250,- 
 000,000 in gold. It might have been expected that 
 in silver at least France had thus secured an ample 
 supply of money. But it did not so prove. From 
 1849 to 1865 the new production of gold made gold 
 the cheaper money, as the ratio was in France, 
 with the result that the silver coins were worth 
 more as metal than as coin, and hardly any of them 
 remained in circulation. This failure of silver to 
 circulate as money entirely changed the direction 
 of French coinage, and from 1849 to 1865 France 
 coined $1,100,000,000 of gold and only $75,000,000 
 of silver. In 1865-96 France had coined about 
 $400,000,000 of gold, and $175,000,000 of silver. Of 
 this silver over $160,000,000 was coined prior to 
 1877. The world's production of silver increased 
 so fast, and the price fell so steadily, as to make 
 silver a dangerously cheap money. France, Bel. 
 gium, Italy, and Switzerland, united from 1865 in 
 the Latin Union, found themselves in danger of 
 being flooded with cheap, silver money, one effect 
 of which would be the loss of all their gold money. 
 
199 
 
 as at an earlier time France had lost her immense 
 store of silver money. If France had gone on with 
 silver the effect would have been to sell out her 
 whole stock of gold at an enormous loss, and with 
 enormous contraction of her currenc5^ Silver had 
 become not merely a monetary failure, but a mone- 
 tary disaster, and suspension of silver coinage not 
 only did not mean less money by one-half, but 
 simply security for sufficient money of the best 
 sort and of both kinds. 
 
 l8l. THE world's money SUPPLY TO-DAY. 
 
 France had in 1896 $850,000,000 of gold, and $487,- 
 ■900,000 of silver, of which $430,000,000 was full 
 legal tender. The United States had $600, 100,000 of 
 gold, and $487,900,000 of silver, of which $430,000,- 
 000 was full legal tender. Germany had $625,000,000 
 of gold, and $215,000,000 of silver, of which $105,- 
 000,000 was full legal tender. Great Britain had 
 $580,000,000 of gold, and $115,000,000 of limited 
 tender silver. These four leading nations, with 
 $2,655,100,000 of gold, had also more than a thou- 
 sand millions of full legal tender silver ($1,074,800,- 
 000), and $358,700,000 of limited tender silver, 
 making $1,433,500,000 of silver money; and their 
 supply of money amounted to $4,088,600,000. The 
 pretence, therefore, that the money supply of the 
 world had been cut down one-half, and silver thrown 
 out altogether, through a trick of the London hold- 
 ers of American bonds, to make gold dear, and 
 silver, labor, and property generally cheap, had 
 nothing behind it except either scandalous igno- 
 rance or shameless mendacity. 
 
200 
 
 The entire ttioney of the thirty-two countries 
 which made the world oif-commerce and civilization 
 in 1896, footed up, gold $4,068, 800,000, and silver 
 $4,070,500,000, of which $3v440, 700,000 was full legal 
 tender. This showed silver a full half of the money 
 of the world. And to this amount of gold and siU 
 vei: must be added of paper money $2,436,500,000. 
 The $10,575,800,000 of the total money of the 
 ■vvorld could as little be manipulated by London 
 bondholders as the water or the weather of the 
 Atlantic could be controlled by an English weather 
 bureau. 
 
 182. IGlsrORANT IDEA THAT GOLD IS DOING DOUBI.-E. 
 WORK. 
 
 An argument entirely without reason, other than 
 imaginary and fictitious, and wholly false as to its 
 assumption or assertion of essential facts, is that 
 of double work given to gold to do when it alone 
 is made the standard, and the inability of gold to- 
 do this double work. It is said that by the course 
 of things since 1873 gold has had this double work, 
 put upon it, and that gold cannot do double work 
 in that way, that in fact the supply of gold is not 
 great enough.* 
 
 *The average annual production of both;gold and silver during- 
 tlre years iSoi-iSlo was $48,982,900; and that of the years 1831- 
 1840 was only $38,271,000. 'Cdritrast with ihis the 'world's Output 
 of gold alone during the years 1890-1894: 
 
 1890 $118,849,000 
 
 1891 130,650,000 
 
 18^2 .' 146,297,000 
 
 1893 157,228,000 
 
 1894 181,510,10a 
 
201 
 183. GOLD DID DOUBLE WORK BEFORE 1873. 
 
 It would be difficult to make a more ignorant or 
 more untrue statement. The silver dollar of our 
 fathers had been put out of use as early as 1834, 
 and in 1873 gold was doing the whole work of 
 money, and had been doing it for forty years. If 
 a debt was paid at so many dollars "in silver," it 
 was actually paid in gold by counting 102 or loj 
 dollars in gold equal to 100 dollars "in silver." 
 "In silver" only meant dollars of the value of the 
 standard silver dollar, which was from 102 to 103, 
 cents of gold value. The reason for the absence 
 from the channels of money of the silver dollars,, 
 leaving all the work of money to be done by gold,, 
 was the simple fact that each silver dollar had con- 
 tained two or three cents worth over a dollar (gold 
 value) of silver, and it paid the money-mongers to 
 get all of them in exchange for gold and sell them 
 as silver, leaving gold to do the wliole work of 
 money. It is a very ignorant assertion, therefore,, 
 to make, that by a change in 1873 gold was made; 
 to do double work. It was already doing and had. 
 long done the whole work of money. 
 
 184. SILVER HAS HELPED SINCE 1873. 
 
 As to the course of things since 1873, while gold 
 has remained the standard, it has nothing like done 
 the whole work of money, but has had immense 
 help from silver. Under the Allison act, passed 
 ^eb. 28, 1878, as an amendment to the Bland Ijill 
 for free coinage of silver at 16 to i, there were 
 coined of silver dollars no less than $378,166,793. 
 And under the Sherman act of July 14, 1890, silver 
 
202 
 
 "was further called into service to the extent of 
 .$192,000,000, making $570,166,793 in silver helping 
 gold to do the work of money. 
 
 185. SILVER HKLP HAS MADE MATTERS WORSE. 
 
 But the help which silver has given has been so 
 badly mismanaged as to make it worse than none, 
 and the help which silverism proposes would drive 
 gold out of the business and leave silver to try to 
 do alone what it cannot so much as begin to do 
 unless gold takes the main burden. Gold is at the 
 least sixteen times as strong as silver; it is in 
 actual fact thirty times as strong as silver; the 
 strength being in paying and purchasing power 
 based on intrinsic value. Silver can help from 
 one-thirtieth to one-sixteenth, according to its 
 intrinsic value ; and by gross mismanagement the 
 immense mass of silver put at work by the acts of 
 1878 and of 1890 named above, has been rated as 
 16 to I, that is 16 silver equal to i gold, when in 
 fact it takes over 30 silver to equal i gold, and over 
 fourteen-thirtieths of every silver dollar is not real 
 strength but is fiat strength, which is in fact gold 
 strength, because the fiat makes the sham, cut- 
 value, 47-cent dollar* indirectly payable in gold. 
 Gold, that is, is actually doing fourteen-thirtieths 
 of the work which silver pretends to do. 
 
 186. CRIMINAL CONSPIRACY AGAINST GOLD. 
 
 The gold might well enough do all the work of 
 American money, if we honestly and squarely 
 promised to let it, and made reasonable provision 
 
 *It was a 53-cent dollar in i8g6. 
 
203 
 
 to keep our promise ; but all tlie talk, and tlie des- 
 perate insane purpose of silverism is, to not let it, 
 and not only to not let it hold the S3-cent cut-value 
 dollar up to loo cents, or "as good as gold," but to 
 take gold out from under all the loo-cent dollars, 
 and let them come down to 53 cents. The favorite 
 way of arguing this desperate destruction of value 
 and dishonor to our credit is that of calling the 
 present dollar a 200-cent coin, but this means cut- 
 value cents, worth in paying and purchasing power 
 onl}' half what cents are now worth by the gold 
 standard. 
 
 187. SILVER SALE OF GOLD. 
 
 A change to the double standard, under which 
 16 silver should count as equal to i gold, would 
 invite the money-mongers to take away all our gold 
 at a profit to themselves of 53 cents for every dollar 
 in gold taken away upon payment of a 47-cent dol- 
 lar. Even if the profit to the money-mongers were 
 less ; even if it were but a fraction, and a very small 
 fraction, of the not only possible but manifestly 
 probable profit, they would all the same take all 
 the gold, no matter how fast we coined it nor how 
 much there might be of it, and silver would be left 
 alone to do all the work of money. 
 
 To properly estimate silver we ought to say, 
 instead of 16 to i or 30 to i, one-sixteenth of one or 
 one-thirtieth of one. The actual strength of silver 
 is below one-thirtieth. Calling it one-sixteenth 
 will not make it so. But whether one-thirtieth or 
 one-sixteenth the strength of gold, silverism pro- 
 poses to put the whole work of money upon it, 
 
204 
 
 reckless to insanity and to crime of the breatdown 
 whicli must result. Ttie mere possibility of such 
 madness in 1896 could not but shake our prosperity 
 and stay our progress as a great nation. 
 
 CHAPTER XVI. 
 
 ' ' INTERNATIONAL BIMETALLISM. ' ' 
 ■188. DR. F. A. walker's LAST BOOK. 
 
 Dr. F, A. Walker, president of the Institute of 
 Technology in Boston, and an economic writer of 
 distinction, had in 1896 very recently stated in a new 
 book the case against the gold standard as this 
 seems to those who desire to have a union of the 
 nations of commerce and civilization in support of 
 double standard bimetallism. 
 
 Dr. Walker told us in this new book * that he 
 began to write on money for the newspapers as 
 early as 1858; that his published works on the sub- 
 ject began with the issue of his large treatise f in 
 1878; that the Lowell Institute lectures delivered 
 by him in 1879 were brought out in book form 
 under the title "Money, Trade and Industry " that he 
 did not know that he had had occasion to change 
 a single one of the opinions expressed in these 
 volumes ; and that to him the subject of money had 
 always seemed a perfectly simple one if prejudice 
 and passion are not allowed to obscure it. 
 
 *' ' International Bimetallism." 
 f'Money." 
 
205 
 
 With reference to the issue in the United States 
 raised by the proposal of free coinage, Dr. Walker 
 «aid: 
 
 "Though a bimetalli&t, of the international type, 
 to the very center of my being, I have ever con- 
 sidered the efforts made by this country, for itself 
 alone, to rehabilitate silver, as prejudicial equally 
 to our own national interests and to the cause of 
 true international bimetallism. In my 'Money, 
 Trade and Industry, ' published after my return from 
 the Paris Conference, 1878, I made use of the fol- 
 lowing language : ' For us to throw ourselves alone 
 into the breach, simply because we think silver 
 ought not to have been demonetized, and ought 
 -now to be restored, would be a piece of Quixotism 
 unworthy the sound practical sense of our people. 
 The remedy of the wrong must be sought in the 
 concerted action of the civilized States, under an 
 increasing conviction of the impolicy of basing the 
 world's trade on a single money metal. The 
 -demonetization of silver was a work of ill advice. 
 Let its restoration be a work of good advice. The 
 subject is not likely to lose its hold on the public 
 attention so long as gold continues to rise in value. 
 Let us await the time to act with effect; and not 
 forfeit our present remarkable success and imperil 
 resumption by measures which can do no lasting 
 good to the cause of silver and may do much harm 
 to ourselves. ' ' ' 
 
 189. GOLD VALUE WRONGLY VIEWED. 
 
 It is anything but encouraging to find Dr. Walker 
 ■confidently assuming as beyond question that "gold 
 
206 
 
 continues to rise." In every way in which the 
 question can be considered, gold is found to have 
 gone down in absolute value with the steady large 
 increase of the supply. Tested by the wages of 
 labor, by the rate of interest at which its use can 
 be had, and by the presumptions of the law of 
 supply, gold must be assumed to be at a lower 
 absolute value than it was twenty, thirty, forty, or 
 fifty years ago. 
 
 If silver and common commodities are in this 
 view found to have fallen excessively it is wholly 
 in consequence of causes of decline in no way 
 affected by the value of gold. The movement of 
 values, in gold, silver, and common commodities,, 
 is one movement due to one operation of causes,, 
 which is the same for gold as for silver, and on 
 which use or disuse as money has hardly any influ- 
 ence. The fatal defect of Dr. Walker's study of 
 money is his failure to make it a study of values 
 which remain practically the same whether the 
 money mark is or is not put on, and which the put- 
 ting on of that mark cannot really and permanently 
 alter. 
 
 190. RADICALLY WRONG IDEA OF MONEY. 
 
 In his reading of the story of money Dr. Walker 
 thinks that "utterly false views regarding the 
 nature and office of money" controlled nations to 
 whom the struggle for possession of the precious 
 metals meant a grasping after real values. They 
 did not know that "money" is "merely the tool 
 and agency of commerce." The nations, however, 
 were right. Gold and silver mean real values. 
 
207 
 
 The mark "money," which is put on to secure and. 
 promote use of these values in commerce, is noth- 
 ing but a mark. 
 
 Dr. Walker's misapprehension obliges him to- 
 maintain that the vast accumulations of Russia, 
 France, and Germany, in gold, do not testify to the 
 estimate universally made of gold as the surest and 
 safest money, but are the result of bad finance^ 
 throwing "money" out of use. At least, he main- 
 tains this in the text (p. 268), but he admits in a 
 note the contrary view, and his note might have- 
 added, by way of further contradiction of his owrt 
 determined wrong vew, that vast reserves of gold 
 values sustain credit to an amount worth far more- 
 than the interest on the gold. 
 
 191. ABSURD NOTION OF CURRENCY CONTRACTION. 
 
 Dr. Walker argues that "especially low rates of 
 interest and low prices of merchandise" are the re- 
 sult of currency-contraction due to not having sil- 
 ver a standard as well as gold. Hundreds of mil- 
 lions waiting to be loaned, or to serve as the basis 
 of thousands of millions of credit, he calls currency- 
 contraction, and low interest and low prices he 
 ascribes to, not the abundant supply of gold to loan 
 and of merchandise to sell, but to the sick and 
 dying condition of silver in a world which has. 
 $4,070,500,000 of silver money to $4,068,800,000 of 
 gold money. Dr. Walker is very particular about 
 his notions for an economist who is so little par- 
 ticular about his facts. 
 
208 
 
 192. POSSIBLE REGULATION OF GOLD AND SILVER 
 VALU.ES,, 
 
 The idea most confidently insisted upon by Dr. 
 "Walker, as "a principle absolutely incontroverti- 
 "ble," appears from tk« following statement : 
 
 "Tlae notion that law cannot iijifluence value is 
 Jiot unnaturally derived from certain conspicuous 
 instanqes where laws have attempted squarely to 
 -cross the economic impulses; of mankind and to- 
 thwart the instinct of self-interest at its maximum 
 ■of activity and of intensit5% and have failed. * * * 
 'Yet there are numberless instances where laws 
 have affected values ; and there is not a civilized 
 country in the world at present where law is not 
 profoundly affecting, if not controlling, the value 
 of some commodity. Laws often affect values when 
 the)' were not intended to do so. Indeed, it is 
 ■often difficult to prevent laws from affecting val- 
 ues, when they are passed for a very different pur- 
 pose, even when the result of affecting values has 
 TDcen carefully sought to be avoided. The truth of 
 the matter is, law cannot affect values, much less 
 ■control them, except as it sets some economic force in 
 •motion. Whenever law sets an economic force in 
 Tnotion, it can and will and must affect values. The 
 ^iegree in which values shall be affected will depend 
 upon the extent of the economic forces thus put 
 into operation. ' ' 
 
 193. ALLEGED ECONOMIC FORCE SET IN MOTION BY 
 MONEY LAW. 
 
 "As regards bimetallism, then," Dr. Walker 
 continues, "the question simply is, Can govern- 
 
209 
 
 ment set in motion any economic force whicli will 
 affect the relative values of gold and silver? I 
 answer yes, incontestably ; and that force is one of 
 enormous scope and reach. By declaring the two 
 metals indifferently legal tender in the payment of 
 debts, at a certain ratio, it at once and powerfully 
 influences the demand for one and the other of the 
 two metals. This was what France did by the law 
 of 1803. That law gave an ounce of gold, in coined 
 money, precisely the same power to pay debts as 
 that possessed by 15 1-2 ounces of silver, in coined 
 money. The operation of this principle was sim- 
 ple, instantaneous, automatic. If, at any time, 
 either of the two metals became less valuable than 
 by the legal ratio, every debtor instinctively sought 
 coin of that metal, with which to meet his obliga- 
 tions, in preference to coin of the other metal. This 
 increased the demand for the cheaper metal ; and, 
 by that very act, decreased the demand for the 
 metal which was becoming dearer in the market. 
 Now, to increase demand is, other things equal, to 
 lower price. Thus, through its power to regulate 
 the payment of indebtedness, the government prac- 
 tically threw its weight upon that one of the two 
 metals which tended to rise, and kept it down. No 
 one wanted the dearer metal to pay debts with ; 
 every one wanted the cheaper metal for that pur- 
 pose ; and, since the volume of indebtedness com- 
 ing due every day in any commercial country is 
 very large, the force thus invoked was sufficient to 
 produce an enormous economic effect." * 
 
 *" International Bimetallism," pp. 93-95. 
 14 
 
2IO 
 
 194- DR. walker's fundamental error. 
 
 This appeal to "force of enormous scope and 
 reach," "sufficient to produce an enormous effect," 
 sounds plausible. Dr. Walker declares that ' ' one 
 has to go as far away from the centers of educated 
 financial opinion, as Boston, New York, and Chi- 
 cago, to find men of position who are capable of 
 denying it." He avers that "the concurrence of 
 general opinion on the subject is overwhelming; " 
 that "not a person worth quoting can be cited to 
 the contrary effect; " and that "the only question 
 that can possibly arise is as to the degree of the 
 effect produced." 
 
 But this question would not be even asked if the 
 conditions of the problem were understood. The 
 "degree of the effect produced" is apparent only, 
 and not real. It is wholly imaginary. There is 
 absolutely no force where Dr. Walker assumes 
 "one of enormous scope and reach." There is 
 nothing whatever in use as money, or disuse as 
 money, to raise or to lower the price of the metal 
 of which the money is made. If gold is becoming 
 dearer in the market, it is because of other demand 
 than use as money produced by its having been 
 cheaper. If it is becoming cheaper in the market, 
 it is for other reasons than disuse as money pro- 
 duced by its having been dearer. The fact that 
 debtors seek coin of the cheaper metal with which 
 to pay their debts has no such effect on the market 
 demand for that metal as to affect its price. 
 
 The only demand of a monetary character which 
 could at all affect the market price of the metal 
 would be demand for more of the metal to be 
 
211 
 
 coined ; and the demand would have to be, or to 
 promise to be, considerable, in order to have even 
 a tendency to raise the price of the metal. Coinage 
 in no way uses up the metal ; does not deplete the 
 existing stock of the metal ; and the mere putting 
 of a stamp on pieces of it does not in the least alter 
 its relation to the market. If arrangements for 
 large additions to the existing coinage of a metal 
 have the effect of carrying up its price, this effect 
 is due, chiefly or wholly, to a misapprehension, and 
 as soon as the market has time to act it will almost 
 wholly, if not wholly cease. Not only so, but if 
 this arrangement for coinage of, we will say, a 
 very large amount monthly of the metal, is made 
 with a view to arresting the decline in price of the 
 metal caused by large increase of supply, it will 
 have only a limited transient effect. Coinage can- 
 not aflfect the market, simply because it does not 
 take the metal off the market, does not use it up 
 and make way for more. 
 
 Still less can use as money have any effect on the 
 market price of the metal. With a supply of .coined 
 metal in circulation, nothing whatever in the circu- 
 lation can in the least affect the price of the metal. 
 Dr. Walker is especially the victim of his own 
 phrases when he tells us how decreasing the demand 
 for the metal which is becoming dearer lowers its 
 price, through the government throwing its whole 
 weight upon that one of the two metals which tends 
 to rise and thereby keeping it down. Demand for 
 the metal is not in the least altered, up or down, 
 whether the money made of that metal is in use or 
 is lying idle. The metal is in use in idle money 
 
212 
 
 quite as really and quite as effectively as in money 
 that is not idle. The whole weight of the govern- 
 ment is not thrown, not an ounce of it, by contriv- 
 ing that debtors shall leave the dearer money lying 
 idle. If the sole use of nutmegs and of cloves was 
 that of smelling of them, and a supply of both 
 were in the hands of the public, the mere fact that 
 with hot spells the smelling was confined to nut- 
 megs, and with cool spells was confined to cloves, 
 would not carry up the price of the one or the 
 other according as the one or the other were in use, 
 without being appreciably used up. Demand for 
 the use of money is not demand for more of the 
 metal of which that money is made. 
 
 195. A WHOLLY BASELESS THEORY. 
 
 What Dr. Walker calls ' ' the force exerted by the 
 bimetallic system in restraining tendencies to 
 divergence, from natural and commercial causes,^ 
 between the two metals," is a purely imaginary 
 force. And the proof which he relies upon for 
 substantiating the existence and action of this 
 force, that of "the working of the French system, 
 under the great storm which followed the gold 
 discoveries of California and Australia, " is of no 
 validity whatever. The "storm," as to anything 
 more than false notions and fears, had no exist- 
 ence. Dr. Walker himself says that ' ' the maximum 
 momentary effect of more than doubling the world's 
 stock of gold was " only enough "to pull the metals 
 apart by 4 3-4 per cent. ; while the permanent 
 effect upon the ratio was only i 1-2 in 100." 
 
 The scare was no doubt severe, but it was a scare 
 
213 
 
 pure and simple, and yet Dr. Walker assumes that 
 nothing prevented senseless panic fear that gold 
 would drop one-half from coming true except the 
 bimetallism of France. ' ' The astonishing spectacle 
 is exhibited," Dr. Walker exclaims, "of one nation, 
 alone, unaided, not only maintaining that monetary 
 system unshattered and almost unshaken, through 
 the greatest storm of centuries, but even preserv- 
 ing the monetary peace of the world and carrying 
 Europe through what threatened to be a complete 
 wreck of industry and finance." 
 
 If the state of things was hardly shaken, and 
 monetary peace was almost undisturbed, it is mere 
 hysterical exaggeration to pretend that there was a 
 storm which might have produced universal wreck. 
 
 196. FALSE IDEA OF EFFECT OF NEW SUPPLY OF 
 GOLD. 
 
 The use which Dr. Walker incessantly makes of 
 delusive figures of speech disqualifies him for serv- 
 ing as a competent scholar and teacher. The new 
 supply of gold of 1850-60 his story makes to have 
 suggested a tumble of gold value of fully one-half ; 
 it looked, he says, as if "gold might fall, in a suc- 
 cession of plunges, from crag to crag, down to a 
 level which would mean nothing less than universal 
 bankruptcy." Chevalier, he says, wrote a book on 
 the "Probable Fall in the Value of Gold," in which 
 he more than once "used the illustration of a fall 
 to one-half its former value," — his object being 
 "to show briefly and strikingly what might come 
 from the bursting of the great reservoir and the 
 of trade and the seats of industry." It was a 
 
214 
 
 rushing of its mighty waters down upon the marts 
 "menace to industry, finance, and even the social 
 structure." It was "the greatest financial storm 
 of two centuries. By the end of 1 860 the gale had 
 well-nigh blown itself out, though the waves were 
 still running high." 
 
 By this language Dr. Walker refers, not to igno- 
 rant and baseless fears of what might happen, but 
 to the natural result in the world of finance of the 
 new supply of gold. But there was in fact no such 
 sudden and overwhelming increase of the world's 
 production of gold, in 1850-60, as Dr. Walker im- 
 plies. The annual average of 1831-40 was $13,- 
 484,000. This had risen for 1841-50 to $36,393,000, 
 or nearly three-fold. For 1851-55 it reached $132,- 
 513,000; and for 1856-60, $134,083,000; a consider- 
 ably less than four-fold rate of advance, for which 
 the nearly three-fold of the earlier decade had been 
 no inconsiderable preparation. 
 
 And vast as the aggregate of gold added to the 
 world's stock was, $1,332,981,000 for the decade 
 1851-60, it was not more than the world could take. 
 In fact the world took in the next twenty-five years, 
 1861-85, $2,909,411,000, and has taken in the decade 
 1886-95, $1,382,824,000 more. The gold of the world 
 produced since 1850* aggregates $5,625,216,000, with- 
 out any suggestion of a sea lashed into waves moun- 
 tain high and portending universal destruction. 
 Looking back over this addition since 1850, of more 
 than five and a half billions of gold to the world's 
 supply, actual facts show the absurdity of claiming 
 
 *To 1896. 
 
215 
 
 to-day that the first stage of this inflow of gold 
 would have brought "a catastrophe the destructive 
 effects of which can hardly be conceived," had not 
 France at the moment had free coinage of both 
 silver and gold at the 15 1-2 ratio. The event 
 proved that there was no capital peril in any pos- 
 sible coming of gold. If there had been any, noth- 
 ing whatever could have stayed the effect of gold 
 continuing to come until 5,625 millions of dollars 
 had arrived. ' 
 
 France took gold in the eight years, 1853-60, to 
 the amount of 3,082 million francs simply because 
 it was worth taking. It sold silver to the amount 
 of 1,465 million francs, the money market elsewhere 
 rating it worth more than the French coin rate. 
 This left France with no more than about 325 mil- 
 lion dollars (1,617 million francs) added to her stock 
 of money, about 41 million dollars a year. It was 
 anything but a sea with waves running mountain 
 high. There was no reason whatever for alarm 
 lest gold should fall one-half, and there is no reason 
 now for pretending that disaster would have 
 involved everything in universal wreck had not 
 France taken all this gold as she did, under the 1 5 1-2 
 ratio. Her taking it had no effect on the market 
 price, beyond that of momentary check upon sense- 
 less panic fear, and even if this fear had prevailed, 
 we have no reason to doubt that the senselessness 
 of it would have appeared soon enough to control 
 the permanent course of events. At any rate, what 
 the event proved was, not that free coinage could 
 hold up the price of gold, but that the price of gold 
 did not need holding up. 
 
2l6 
 
 An exact historical statement, made by Mr. 
 Horace White, of what took place in France from 
 1850 to i860, in consequence of "an enormous 
 increase in the production of gold in Russia, Cali- 
 fornia, and Australia, and scarcely any increase in 
 that of silver," is as follows: 
 
 "The market ratio declined to 15.46 in the year 
 1851; so, of course, gold could again circulate in 
 France. The ratio continued to decline till 1859, 
 when it reached its lowest point, viz., 15.19. It 
 remained below 15 1-2 till 1867. During this inter- 
 val of sixteen years France imported $600,000,000 
 of gold and exported about half that amount of 
 silver. Her circulation became saturated with the 
 yellow metal, to the great delight of her people, 
 who had become tired of carrying sacks of five-franc 
 pieces to and fro in cabs and handcarts. ' ' * 
 
 197. POSSIBLE PERIL IN SILVER. 
 
 Dr. Walker could not more certainly certify his 
 own incompetence as a bimetallist than by assum- 
 ing that any showing of what the system would 
 stand under a flood of gold could serve as proof of 
 what the system would stand under a flood of sil- 
 ver. A competent instinct in finance, to say noth- 
 ing of knowledge and judgment, would warn the 
 bimetallist to suspect at least sixteen to one of 
 peril in the silver end of his system. 
 
 A glance at a table of production of gold and sil- 
 ver in the world since the discovery of America 
 would bring to view the fact that only five per 
 
 *" Money and Banking " p. 64. 
 
217 
 
 cent, of it by weight has been gold, ninety-five per 
 cent, by weight having been silver. Here surely- 
 the suggestion is, perhaps not, to instructed imagi- 
 nation, of seas of silver with, waves running moun- 
 tain high, but at least of sacks of silver requiring a. 
 handcart for convenient carriage of a pocket-book. 
 And even in respect of value the gold produced 
 has been only 45.9 per cent., $8,011,122,035, the 
 silver having been 54.1 percent., or $10,357,814,100. 
 Ten and a third billions of bulky, heavy silver to 
 barely eight billions of gold might well seem a 
 dangerously uncertain end of a double system even 
 if no special uncertainty attaches to silver. Silver 
 has more than kept ahead during the last fifteen 
 years, 1881-95. The silver value for 1881-85 was- 
 $594,773,000; that of gold $495,582,000. For each 
 of the ten 1886-95 years the production has stood r 
 
 SILVER. GOLD. 
 
 1886 $120,626,800 $106,163,900 
 
 1887 124,281,000 105,774,900 
 
 1888 140,706,400 110,196,900 
 
 1889 155,427,700 123,489,200. 
 
 1890 163,032,000 118,848,700= 
 
 I89I 177.352,300 130,650,000 
 
 1892 198,014,400 146,815,100 
 
 1893 214,745,300 157,287,600 
 
 1894 216,892,200 180,626, lOO' 
 
 1895 226,000,000 203,000,000- 
 
 In one of these years gold fell back ; in not one 
 did silver, not even with the terrible damage alleged. 
 to have resulted from "demonetization." Is thia 
 what the world wants, more than half the value 
 
2l8 
 
 and ninety -five per cent, of the weight of its money 
 in silver? Would the silver end of a bimetallic 
 system be safe, if cheap, and ever cheaper silver, 
 were to come in overwhelming amount? 
 
 198. FRANCE FORCED TO DROP SILVER. 
 
 We may well ask how France came, with the sil- 
 -ver standard consecrated by custom and tradition, 
 -with almost all her economists and financiers opin- 
 ionated to a degree in its favor, with the gold stand- 
 ard the one which, with one accord, they would 
 gladly have removed from their bimetallic system, 
 and with Belgium, Italy, Switzerland, and Greece 
 enlisted to help her make her system work happily 
 and stand securely, — how came she to let the sil- 
 •ver end go, and trust herself to the gold end alone? 
 The commission of 1857 was "bent upon maintain- 
 ing the silver standard," and made "senseless 
 Tecommendations' ' * looking to legal control of the 
 ■market, but experiment soon proved that this was 
 of no avail. Then Chevalier, whose head was so 
 Tattled at the sight of plenty of gold that he thought 
 the yellow metal would drop one-half in price, sug- 
 gested a coinage baby-jumper for gold, to make it 
 follow the ups and downs of silver ; while Levas- 
 seur, whom the event justified, advised accepting 
 by law what was already fixed in fact, the standard 
 action of gold. Nothing was done until 1864, and 
 then nothing more than to do what the United States 
 had done in 1853, cause small coins to be made of 
 
 *See Mr. Horace White's Excellent account, " Money and Bank- 
 nng" pp. 62-67. 
 
219 
 
 a value distinctly below gold value. There was 
 but slight relief in this, and in 1 865 another larger 
 move was made, that of the Latin Union scheme of 
 subsidiary limited tender coinage of silver. Resist- 
 ance to doing anymore lasted until 1873, when the 
 flooding of the mint with silver, more than thirty 
 times as much in 1873 as in 187 1-2, and more than 
 the mint could coin in a year and a half if it coined 
 nothing but silver, led to action by the Latin Union 
 to not allow the flood of silver to exceed, for all 
 the four countries, a coinage of 120,000,000 francs a 
 year. 
 
 The situation was that of holding up the price of 
 silver by taking it at the ratio of 15 1-2 when it 
 really required 1 5 3-4 ounces to equal one of gold, 
 and the certain prospect was of further decline of 
 silver. The figures may be most clearly followed 
 if we reduce the ratio to quarters, and call 15 1-2 
 sixty-two quarters. The mint paid 62 for gold 
 while the market paid 63. By 1876, while the mint 
 still rated gold as worth only 62, the market was 
 giving 68. Anybody who chose could take gold at 
 •62 and sell it at 68. All government transactions 
 counted gold at 62 while the market counted it at 
 ■68. The minister of finance, M. Leon Say, sought 
 from the Legislature leave to limit or suspend the 
 coinage of silver at discretion, and a bill passed 
 August 5, 1876, authorizing this. The committee 
 of the Senate to which the matter was referred 
 reported in favor of absolute prohibition of further 
 coinage of full legal tender silver. Such was French 
 ^distrust of the silver end of her own bimetallic 
 system. 
 
220 
 
 199- DOUBLE STANDARD DID NOT GIVE FRANCE 
 DOUBLE MONEY. 
 
 The fundamental question in regard to the opera- 
 tion of the double standard system in France from 
 .1803 to 1873 is not that of the ratio but that of the 
 supply of money, both gold and silver. Dr. Walker 
 says of the period 1803-1850: "Both gold and sil- 
 ver remained money in France, though the propor- 
 tion of the latter tended continually to increase, 
 and the proportion of the former to decline. ' ' This 
 is perilously near to falsification of facts for the 
 benefit of a theory. Mr. Horace White has the 
 facts to support him when he says that ' ' abundant 
 proofs can be adduced showing that bimetallism 
 did not exist in practice in France between 182a 
 and 1847." Gold was steadily at a premium, with 
 the effect of taking it out of the circulation, and 
 leaving silver alone as the currency. 
 
 The assertion of Dr. Walker that ' ' France pre- 
 served her bimetallic system in full virtue from 
 1819 down to the middle of the century," is dis- 
 tinctly and flagrantly contrary to the truth. Mr. 
 White states the real truth when he says that ' ' the 
 contention of the bimetallists that the French law 
 of 1803 kept the ratio steady at 15 1-2 till 1873 is 
 contradicted by facts." Thus Chevalier, in his 
 "Probable Fall of Gold," written in 1859, said: 
 
 "A change of i 1-2 per cent, in favor of gold had 
 sufficed, thirty or forty years ago, to cause that 
 metal to disappear wholly from commercial pay- 
 ments." 
 
 "Under the regime of the law of 1803, gold had 
 ceased to figure in transactions of any magnitude. 
 
221 
 
 since it acquired an appreciable premium. People 
 took their gold to the money changer, in order to 
 pocket the premium, and made payments exclu- 
 sively in silver, as everybody knows. " 
 
 In confirmation of these statements, Mr. White 
 quotes the following : 
 
 "Before 1848 silver was the usual money; daily 
 payments were made in five-franc pieces. Gold, 
 proportionally rare, had at this epoch almost gone 
 ■out of the French monetary circulation, in which 
 it was estimated that not more than one hundred 
 million francs remained. Block's " Dictionnaire de 
 la Politique" vol. II., p. 338. 
 
 ' ' In France, all large payments, which, as is well 
 known, were formerly made in sacks of five-franc 
 pieces (silver), have been of late years effected in 
 gold, and almost all the old five-franc pieces have 
 been successively exported or melted down." Re- 
 port by M. Achille Fould, Minister of Finance to 
 Napoleon III., on the monetary treaty of 1865. 
 
 "In those times when one was paid even so small 
 a sum as one thousand francs, he received his bulky 
 and heavy money in a canvas bag and had to hire 
 a porter or a cab to carry it home. ' ' Prof. Francis 
 Bowen in Report of United States Monetary Com- 
 mission of 1876, p. 146. 
 
 Dr. Walker insists that there was no such absence 
 of gold from circulation, and no such compulsion 
 to accept the bulky and heavy silver money. He 
 does this in disregard of the facts, and with rea- 
 sonings which are based solely on "the very center 
 of his being," the conviction that it must have 
 been so. He alleges gold coinage to the extent of 
 
222 
 
 24,000,000 francs a year as proof of gold circulation, 
 when nothing has been more common than coinage 
 solely for the benefit of export. 
 
 200. THEORY OF BIMETALLISM BASED ON SUP- 
 POSED FRENCH EXPERIENCE. 
 
 Dr. Walker expressly acknowledges that his 
 theory of double bimetallism came out of the ex- 
 perience of France. France undertook, he says, 
 to regulate and control the values of the precious 
 metals, by a free importation, free coinage, and 
 free exportation system, in which the ratio between 
 silver and gold was 15 1-2 ounces of silver equal to 
 I ounce of gold. In Dr. Walker's view the result 
 of chief significance was the survival of this system 
 during the period (1850-60) of an immense addition 
 to the world's stock of gold. Drawing upon his 
 imagination for the story of double standard bimet- 
 allism in France, Dr. Walker says: "The aston- 
 ishing spectacle is exhibited of one nation, alone, 
 unaided, not only maintaining that monetary sys- 
 tem unshattered and almost unshaken, through the 
 greatest storm of centuries, but even preserving 
 the monetary peace of the world and carrying 
 Europe safe through what threatened to be a com- 
 plete wreck of industry and finance." This, says 
 Dr. Walker, suggested the theory that "if a single 
 people could exert such prodigious power in influ- 
 encing and controlling the relations of the two 
 money metals, by admitting them freely to coinage 
 at a ratio and making them indifferently legal ten- 
 der in the payment of debts, the co-operation of a 
 group of commercial states, both increasing the 
 
223 
 
 Strength of the bimetallic system on the one hand, 
 and on the other hand diminishing the extent and 
 violence of the hostile forces by which it could in 
 any event be assailed, might suffice to give the 
 woild a circulating medium which should be essen- 
 tially the same in all lands ; whose value should be- 
 more stable, through long terms of years, than 
 either of its two constituents could possibly be, — 
 and which should thus be 'sound money' and 'hon- 
 est money,' in a much higher degree than mono- 
 metallic money could be; and which, by creating 
 a normal par of exchange between all trading com- 
 munities, should conduce to the promotion of inter- 
 national intercourse and to the peace and prosper- 
 ity of mankind. ' ' 
 
 20 1. BIMETALLISM A RECENT NOVELTY. 
 
 Dr. Walker expressly recognizes that this theory- 
 was a middle-of-the-nineteenth century novelty. 
 Thus he goes on from the above statement as. 
 follows : 
 
 "No wonder such a theory had to wait until welt 
 nigh into the middle of the nineteenth century that 
 it might be born. It was only when the humane 
 sentiments had made great progress in removing 
 the prejudices and animosities of nations and races ;. 
 when international alliances, leagues, and conven- 
 tions had made familiar the idea of co-operation for 
 the general good ; * * * it was only in such a 
 time that a theory like that of international bimet- 
 allism could possibly have found acceptance on the 
 part of financiers, statesmen, and men of business ; 
 and it was only when the true theory of the gen- 
 
224 
 
 <eral interest of mankind in respect to money had 
 been developed to the point reached at about the 
 middle of our own century, that such a theory 
 ■could possibly have taken definite form." 
 
 202. ERRORS OF DR. WALKER'S ARGUMENT. 
 
 (i) These contentions are vitiated by several 
 errors of false representation of facts and false 
 conception of the significance of facts. In the first 
 place France did not in reality regulate and control 
 the values of the precious metals. The entire his- 
 tory of French action is one of utter failure to hold 
 the two metals near enough to each other in value 
 to secure anything like the concurrent circulation 
 •of both as money. 
 
 (2) France went, and Europe went, safely through 
 the great gold period of 1850-65 because there was 
 nothing whatever of real peril in the new supply 
 of gold. When Dr. Walker, in view of the experi- 
 ence of France, speaks of "its monetary system 
 ■exposed to terrific trial by the floods of new gold, ' ' 
 his language is that of baseless imagination of 
 what might have been. The coming of so much 
 gold, and the departure of about half the amount 
 of silver, was an unmixed good, when properly 
 understood. 
 
 (3) It did, indeed, deal silver as a standard a fatal 
 blow, but that was in line with economic progress, 
 and was a benefit, and only a benefit, to France and 
 to Europe. The world was fast coming to under- 
 stand the supreme position of gold as a high, sure, 
 steady value, and the natural and necessary sub- 
 sidiary position of silver, extremely important as 
 
225 
 
 secondary money and utterly uncertain and dan- 
 gerous as fundamental and primary money. 
 
 (4) There was never at any time in the experi- 
 ence of France, or in human experience anywhere, 
 any evidence that the standard was better for try- 
 ng to have it double, and never was France, or any 
 other nation, able to have double money as the 
 result of linking silver and gold by a legal ratio 
 which hardly ever agreed with the commercial. 
 On the contrary, facts which forced themselves 
 upon recognition everywhere put in the clearest 
 light the superiority of the single gold standard, 
 a.nd made manifest to all sound judgment that both 
 gold and silver serving in any desired amount as 
 money together could only be under the single 
 standard, the gold standard everywhere chosen by 
 the preferences of mankind. 
 
 (5) The alleged par of exchange created by an 
 abortive effort to keep silver and gold together 
 never had any reality, except in appearance, and 
 could not be kept even apparently effective with 
 any extreme decline in the market value of silver. 
 The nations interested in an immense use of silver 
 ■could not have their silver necessities adequately 
 met except with silver made subsidiary to gold, and 
 the progress of these nations demanded, quite as 
 really as progress anywhere else, the use of the 
 gold standard. 
 
 (6) The progress characteristic of the middle of 
 the nineteenth century all looked in the direction 
 of a common adoption throughout the world of the 
 gold standard. The theory for which Dr. Walker 
 <:ontends never was anything but an eccentric spec- 
 
 15 
 
226 
 
 Illation, opposing itself to the universal trend of 
 progress, and holding by accidents of the past which, 
 had no significance for the future. It was when 
 the fog had not yet lifted, when a false theory of 
 money, as in some sense the creation of law, apart 
 from real values, had come into vogue, and before 
 gold in all its functions was properly understood, 
 that the delusion of a double standard, a two-headed 
 system, asserted itself. 
 
 203. MISTAKES OF ECONOMISTS USED IN PROOF. 
 
 Dr. Walker is more than contented with the 
 abundance of mistakes of reasoning made by writ- 
 ers of repute whom he calls gold monometallists, 
 but whose position was really that of having yielded 
 to the claims of gold without clearly comprehend- 
 ing the exact ground of those claims. Thus Jevons, 
 assuming, quite contrary to the fact, that use or 
 disuse as money, caused the metal values to rise or 
 fall, naturally argued that the play of the twa 
 values would be like the play of the two scales of a 
 balance ; or like the action of the surfaces of two 
 reservoirs connected by a communicating channel. 
 
 The mistake of the whole class of writers to 
 whom Dr. Walker appeals was that of failing ta 
 see that values, in gold and silver, are created, 
 maintained, modified, held steady or made to fluc- 
 tuate, almost or quite wholly without reference to 
 use or disuse as money ; and that reasonings which 
 assume that values of the metals rise and fall with 
 use and disuse as money are as baseless as they 
 have seemed plausible. 
 
 The twelve members of the Herschell committee 
 
227 
 
 of 1888, six of -whom were gold moncmetallists, 
 united in arguing that the tumble of silver away 
 from the level of gold after 1873 must have been 
 the result of the suspension in that year of the full 
 operation of the French or Latin Union bimetallic 
 system. But they only guessed at this, without 
 any clear light on the conditions of the problem. 
 Economic science was in the position of slowly 
 coming to the full knowledge of the gold standard 
 with both gold and silver money, and not a few 
 things justly thought in respect to double money 
 were by inadvertence said of the standard. 
 
 204. INADEQUATE DEFENCE OF BIMETALLISM. 
 
 The general defence which Dr. Walker makes 
 on behalf of double-headed bimetallism runs as 
 follows : 
 
 " The bimetallists of to-day stand upon the 
 ancient order. Universal monometallism is the 
 new and untried thing. Bimetallism is the old and 
 well-approved monetary system of mankind. We 
 know what bimetallism is and what it will do. The 
 method of its operation, the nature of its effects, 
 are well known, and can be studied historically and 
 statistically, upon a wide scale. No one knows 
 what universal monometallism would be, or what 
 it would do. Such a thing never existed. During 
 the past twenty years the world has made rapid 
 progress in that direction ; but the end is still far 
 distant, and no one can say what the system would 
 be, and what effects it would produce. Monomet- 
 allism is only half born. The twenty three years 
 (1873-96) during which it has been trying to make 
 
228 
 
 its way into the light have been years of unparal- 
 leled commercial disaster and disturbance ; and at 
 the end of that painful period, leading gold mono- 
 tnetallists, like Sir Robert GiiTen, declare that the 
 system cannot possibly be extended to India and 
 the further East; or, like Goetbeer and Lexis, of 
 Germany, declare that it has already gone too far 
 in Europe and that a portion of the ground must 
 be retraced. On the other hand, bimetallism has 
 a long record of beneficent activity in promoting 
 the stability and regularity of trade and produc- 
 tion.* 
 
 Dr. Walker does indeed stand upon the ancient, 
 outworn, discredited, and discarded scheme for 
 having both silver and gold as money by making 
 both standard, when all experience shows that if 
 both are standard only one of the two will stay in 
 anything like adequate circulation as money, and 
 that such bimetallism of the standard is the most 
 unsatisfactory monometallism of money. 
 
 What we know in regard to Dr. Walker's double 
 standard bimetallism is that it is not bimetallism 
 of money in any adequate sense,, and never can be, 
 and that it is at times the worst possible famine of 
 one of the two kinds of money. Dr. Walker's 
 statements turn monetary science into a game of 
 blind man's buff, to the scandal of all honest think- 
 ing. No fact of history is more certain than the 
 difficulty of having double money under a double 
 standard. 
 
 Just what "monometallism" means in the above 
 
 'International Bimetallism " pp. l6o, l6l. 
 
229 
 
 Statements by Dr. Walker may be doubtful. It 
 should refer to the standard only, and not to money. 
 To all appearance Dr. Walker conjures up an ideal 
 abomination in the shape of gold only in use as 
 money, gold excluding silver from use. The ma- 
 lignant dream hypnotizes him. But he should 
 know better than to suppose any such monomet- 
 allism of money possible. Bimetallism of money 
 is the express aim of the gold standard system 
 everywhere. The gold standard has prevailed 
 against tradition, opinion, and prejudice, because 
 it gave the best superior fundamental money, and 
 made possible having at the same time a good sub- 
 sidiary money of silver. When Dr. Walker says 
 that no one knows what the present gold standard 
 system will come to, and implies that it may or 
 may not come to disuse of silver, he shuts his eyes 
 to all the facts and directs his imagination to an 
 utterly false possibility. 
 
 205. ALLEGED ADVANTAGES OF BIMETALLISM. 
 
 Dr. Walker starts from an entirely false view of 
 how to make gold and silver work together as 
 money, and with a not less false view of how to 
 secure the best standard, and the best relation of 
 money to prices. ' ' The prime purpose of bimet- 
 allism," he says, "is to secure par-of -exchange 
 between gold and silver," (p. 242). More fully he 
 says that "the chief advantages of successful bimet- 
 allism may be stated under three heads." 
 
 "First, the establishment of an approximate 
 par-of -exchange between the gold-using and the 
 silver-using nations. 
 
230 
 
 ' ' Second, the securing of a higher degree of sta- 
 bility in the compound mass of the money thus 
 formed than could possibly exist with the two 
 metals separate and independent in the value 
 movements. * * * In a word, the object sought 
 is to make money everywhere a better standard of 
 deferred payments than it can be when it consists 
 of one metal alone. * * * The production of 
 the precious metals has always been of a highly 
 spasmodic character. Now it is gold which rises 
 and swells in volume ; now it is silver which pours 
 in mighty floods. If, then, each metal has its value 
 in commerce subject to the natural causes which 
 affect the supply and to the commercial causes 
 which govern the demand, it is evident that we 
 shall have an incessant fluctuation, not only in the 
 relation between the two metals, but also in the 
 relation of metal money to prices. Such fluctua- 
 tions cannot, in the nature of the case, be sup- 
 pressed; but if the two metals can somehow be 
 joined together in their function as money, it is 
 highly reasonable to expect that the aggregate 
 influence of fluctuations in price will be reduced. 
 There will be, on the whole, as things are likely to 
 go, a considerable compensating effect, giving the 
 result of a greater degree of steadiness in values." 
 
 "Such are the two great standing arguments for 
 bimetallism." 
 
 ' ' It will be observed that they are entirely inde- 
 pendent of the (3d) argument drawn from the facts 
 of prices, wages, and debts, as they existed at the 
 time of the demonetization of silver, by which that 
 metal was denied free coinage, and was either 
 
231 
 
 reduced to become the material of fractional money 
 solely, or was allowed to be coined only in limited 
 quantity." 
 
 206. A WHOLLY DELUSIVE SCHEME. 
 
 The scheme as thus stated is a thoroughly delus- 
 ive one. Par of exchange between gold and silver, 
 such as to make them circulate together as money, 
 has never resulted, and never can result, from coin- 
 age of the two at a fixed ratio. The only way to 
 have a perfectly steady relation between gold serv- 
 ing as money and silver serving as money is that 
 of making the silver subsidiary to the gold as 
 standard. And this is to the purpose of sound 
 finance, and of prosperity and progress, in India 
 and Mexico and China even, the futures of which 
 are fast coming into line with the futures of Europe 
 and America. It is an entirely false view that two 
 groups of nations are to forever stand apart as 
 gold-using and silver-using. 
 
 The expectation of a stability possible to a com- 
 pound mass of money greater than can be had with 
 the single gold standard, is not the least of the 
 delusive dreams bred by Dr. Walker's false view 
 of money. If we properly consider the gold values 
 and the silver values, we are shut up to the con- 
 clusion that the greater disposition of the latter to 
 fluctuate must introduce into a double mass of 
 standard money an element of uncertainty not 
 attaching to gold values. It has been the unques- 
 tionable superiority of gold in this respect which 
 has brought it by an irresistible tendency to its 
 now universal place as a standard value, and that 
 
232 
 
 in spite of tlie fact that silver everywhere had this 
 place at first, and has lost it by failing to give 
 service such as commerce requires, and such as 
 gold proves able to give. 
 
 Dr. Walker makes more than the facts warrant 
 of what he calls the "highly spasmodic character" 
 of the production of the precious metals. There 
 is no such character attaching to the additions to 
 the world's supply of gold, nor even in the case of 
 silver is there anything like a violent alternation 
 of rise and fall. Gold shows itself so universally 
 and so highly esteemed that no "floods" greatly 
 depress its value. Not only has it stood the test 
 of immense supply without materially breaking 
 down the price, but a whole brood of economic 
 fictions hangs by the wild imagination that it has 
 appreciated. The case of silver, however, is be- 
 yond doubt one of prolonged and extreme fall, 
 carrying it below the possibility of maintaining 
 itself as a fundamental and primary value, com- 
 parable to gold value as a standard. 
 
 207. ''demonetization" tragedy. 
 
 Dr. Walker takes up ' ' demonetization" from the 
 action of the Paris Conference of 1867, which France 
 had called with a view to securing some scheme of 
 international coinage, and which, finding nothing 
 possible on the basis of both the precious metals, 
 came unanimously to the conclusion that interna- 
 tional coinage must be upon the basis of a single 
 standard, and that gold. Dr. Walker's recital is 
 tragic in tone, and his suggestion of results lugu- 
 brious to a degree. He does not say, but he sug- 
 
233 
 
 gests, that everything dire which has befallen since- 
 1867 was with amazing recklessness pulled down 
 upon their own heads by the score of nations, 
 -whose representatives thought it a fine "game" 
 to plan for a money of all lands to consist of 
 gold. 
 
 ' ' In perfectly cold blood, ' ' he says, they ' ' declared 
 in favor of uprooting silver in countries embracing 
 a thousand million of human beings where it had 
 immemorially been used." He is shocked to see 
 "financiers and currency -tinkerers undertake to- 
 order up a new monetary system for the universe," 
 regardless of "the habits, instincts, traditions, and 
 prejudices of a thousand millions of men." The 
 universe of his gloomy imagination rests upon 
 China and India, the Straits Settlements, and 
 Mexico ! ' ' There was never anything, ' ' Dr. Walker 
 exclaims, "more against the laws of nature and the 
 constitution of human society than the proceedings 
 and the proposals of the Conference of 1867. That 
 body completely disregarded the facts of history 
 and the structure of trade and industry. It took 
 no account of the division of the world into two 
 great groups of nations, one using gold and one 
 using silver. It treated with contempt the instincts, 
 the habits, the traditions of nations comprising a 
 thousand million people, the rate of their wages, 
 their ruling prices, the scale of their exchange, 
 transactions. It proposed to rewrite history and. 
 reconstitute society in its industrial and financial 
 characters." 
 
234 
 
 208. DR. walker's POSITION INDEFENSIBLE. 
 
 In two most important respects Dr. Walker's 
 position is indefensible and discreditable. It mis- 
 represents the situation in respect of the silver- 
 using nations, and it assumes that human progress 
 ought not to contemplate the advance of the back- 
 ward peoples of the world, of India and China and 
 Mexico, to a thoroughly developed condition. 
 
 Dr. Walker must know that influences of tre- 
 mendous efficiency have been at work for a long 
 time to reconstitute the society and rewrite the 
 history of India, of Japan, of China, of Egypt, and 
 of whatever lands belong to that level of culture at 
 which the demand for small money, such as silver 
 can best meet, is both universal and urgent. India 
 -alone is of continental significance in its extent and 
 in the immense section of mankind which it forms. 
 How British India came to the gold standard, of 
 necessity and to her great advantage, affords one 
 of the most interesting and conclusive proofs that 
 the standard position of gold is absolutely final 
 both in the experience of mankind and in economic 
 science. It is in the nature of things impossible to 
 shut off any backward nations whatever from the 
 influences of human progress represented by the 
 gold standard. 
 
 209. HUMAN PROGRESS MEANS GOLD. 
 
 Dr. Walker figures, very little to his credit, as a 
 prophet of disaster on the ground that backward 
 silver-using countries are throwing off the tram- 
 mels of tradition, are developing industries of their 
 
235 
 
 own, are no longer slavishly following British lines, 
 and are becoming able to have factories and work- 
 shops of their own, not only meeting their own 
 wants, but raising them to the level of exportation 
 of manufactures to their neighbor lands of the 
 East. To all appearance Dr. Walker deprecates 
 "the rise and growth of new branches of industry 
 in India, Japan, and even China ; " he says that 
 " during the past four or five years the reports of 
 English consuls have been full of most unwelcome 
 information" on this subject; that "cotton factories 
 established in Japan show an exceedingly rapid 
 growth ; ' ' that ' ' India has exhibited an increasing 
 power to produce for herself articles which she 
 formerly imported from Europe; " that "not only 
 so, but Indian manufacturers are already cutting 
 English manufactures out of the neutral silver 
 countries of the East; " and that "even China has 
 turned herself to manufacture." The "influence 
 upon British and all European trade and manufac- 
 ture" of what the London Times calls "the enorm- 
 ous advantages which the manufacturers in a silver 
 country enjoy in competing with gold countries," 
 turns on the alleged fact, as stated by the Times, 
 that in any silver country, "the cost of the neces- 
 saries of life has remained absolutely unaffected 
 by the fall in silver, and the workman is there- 
 fore quite content to receive the same wages as 
 formerly. ' ' 
 
 If this representation were true, it would simply 
 mean that a remarkably interesting stage of prog- 
 ress in the East is bringing benfits to the East at 
 some considerable loss to English interests. Does 
 
236 
 
 Dr. Walker want his economic dream to persist at 
 the cost of prevention of progress in the East? He 
 appears to argue that his universally discredited 
 bimetallism should be got on its legs again as the 
 only means of holding down India and Japan, China 
 and Mexico, to the old-time dependence upon 
 Great Britain. 
 
 And "more important still" than the considera- 
 tion that the vast East, and the low culture lands 
 everywhere, are stimulated to manufacture for 
 themselves, and even for export, through their 
 silver advantages, Dr. Walker pronounces the por- 
 tending failure of British dominance generally. 
 "English trade," he says, "especially with the 
 Orient and with silver countries generally, has for 
 a long time stood largely on the basis of custom, 
 tradition, and use," "These Eastern countries," 
 he says, "if manufactures are once fairly estab- 
 lished in them," will become independent of British 
 tradition, custom, and use; "and the same is true 
 in a degree," he adds, "of Mexico and many South 
 American states." 
 
 If this barefaced appeal to British selfishness had 
 been made a hundred years ago it would even then 
 have been contemptible in science and in view of 
 the larger claims of human progress. It does not 
 gain in moral decency from manifestly serving as 
 the desperate resort of a beaten cause. 
 
 But the assumptions of this appeal are not well 
 founded. Plausible in theory as the alleged stimu- 
 lation of exports may be, the fact is denied upon 
 good authority. Mr. Horace White points out 
 that prices have not remained unchanged among- 
 
237 
 
 the common people of India, that as silver has 
 fallen the silver price of produce in India has risen, 
 that the rice of Bengal, for example, has more than 
 doubled in price since the silver rupee began to 
 decline in value, that there cannot be, therefore, 
 any permanent operation of the alleged silver situ- 
 ation, and that at most the manufacturer has had a 
 temporary benefit through the slowness of wages 
 to rise along with the rise of prices of food products. 
 India, in fact, China, Japan, and Mexico are sharing 
 in the general progress, and the economic progress, 
 of Europe and America, and will benefit vastly, in 
 the end, by use of the gold standard. India has 
 not only hoards of gold, but a large gold currency ; 
 China and Mexico measure the value of silver in 
 standard gold value ; nobody has, and nobody wants 
 the two-headed standard. 
 
INDEX. 
 
 ABRAHAM, his cash transaction in real estate, 22-24; gold'. 
 
 given first place, 24-26. 
 jEGINA, the island-seat of Pheidon's earliest Greek coinage, 
 
 42, 46. 
 ALTGELD, J. P., his amazing financial screed, 191-198. 
 "AMERICAN INDEPENDENCE," false shyster notion of, 
 
 189; anti- English fanaticism, 191; Americanism of bastard 
 
 type, 193- 
 APPRECIATION of gold, does not injure debtors, 177; no 
 
 proof that it has taken place, 178; could not be other 
 
 than a universal benefit, 179. 
 ARISTOTLE on money, 52, 83, 90. 
 BABYLONIANS, use of silver in chief place, 16; their Uz a 
 
 city of gold art and wealth, 25; system of currency in. 
 
 metal bars, 45. 
 
 BANKING and money, 88; value of sound banking, 89; disas- 
 trous disregard of, by Secretary Chase, loi. 
 
 BARTER, business by in Egypt, 11; resort to instead of use of 
 money, 20, 21 ; barter or trade the fundamental fact under- 
 all money, 63. 
 
 BIMETALLISM, not yet understood, i; that of the standard 
 and that of money not rightly separated, 2; gold bimetal- 
 lism by gold the standard and silver subsidiary, 79; 
 "What is Bimetallism?" 120; Mr. Muhleman on, 121; 
 Sidney Sherwood on, 122; W. A. Shaw on, 123; error of 
 Shaw's assumption, 124; money bimetallism desirable and- 
 possible, 125, 126; gold standard "Bimetallism, 127; the true 
 bimetallic interest that of double money under the gold, 
 standard, 129; bimetallism in France, 140; Shaw on 
 French bimetallism, 142-145 ; historic bimetallism inter- 
 preted from French history, 149; bimetallism in the- 
 United States, 150; Alexander "Hamilton's bad system,. 
 [239] 
 
240 
 
 ISO; bimetallism of money practicable, but only under 
 monometallism of the standard, 151; failure of Hamilton's 
 scheme, from making a cheap silver dollar sell out the 
 gold, 152; the law of 1834 threw out silver in order to 
 secure gold, 153; gold as standard from 1873 gave double 
 money, 157-159; the Bland bill double standard scehme, 
 159; its results, 160; bimetallism in Germany, 161; double 
 money under the gold standard, 163; " international bi- 
 metallism " advocated by F. A. Walker, 204; his idea of a 
 controlling " economic force," 208; a wholly baseless 
 theory, 212; failure of in France, 220; false theory based 
 on supposed French experience, 222; inadequate defense 
 of, 227; false idea of advantages of, 229; a wholly delusive 
 scheme, 231, 234. 
 ^OSREDON, M. DE, report on necessity of .gold standard in 
 France (1857), 146. 
 
 BRYAN, W. J., his anti-gold fanaticism, 33. 
 
 CHASE, SALMON P., Mr. Lincoln's Secretary of the Treas- 
 ury — how he wasted our gold and broke the banks, 89, 
 100-103. 
 
 COINAGE, a mere marking the weight, 52, 59; rules for coin- 
 age, 60-61; coinage of silver, 78; work of the mint, 90; 
 English recoinage scheme of 1695-99, I34; coinage of 
 English silver suspended in 1798, 138; recoinage of Eng- 
 lish silver in 1816, 139; rascal recoinages to cheat by 
 debasement, 141. 
 
 COINS, the first stamped in Greece those of Pheidon, 39; 
 Lydians may have been the first, 46; origin of coins relig- 
 ious, 47-51; coin materials of various countries, 58; full 
 value coin, 65; fiat value coin, 66; a necessity in cheap 
 coins to have the intrinsic value less than the face value, 
 67. 
 
 COPPER, earliest money of Egypt, 15. 
 
 COWRIES, African shells used as jewelry and as money, 17. 
 
 CREDIT and money, 87. 
 
 CURRENCY and fiatism, 104. 
 
 CURRENCY contraction, F. A. Walker's absurd notion of, 
 207. 
 
241 
 
 DOLLAR, German honest money origin of, 91; Spanish dollar 
 declared the American unit of value in 1785, 92; division 
 into hundredths first adopted in 1792, 92; Jevons on it as 
 " the coin of a nation destined to be the most numerous, 
 rich and powerful in the world," 92; failure of Alexander 
 Hamilton's dollar, 93; coinage of the silver dollar sus- 
 pended by President Jefferson, 93; Hamilton gold dollar 
 also a failure, 94; false complaint of dollars now worth 
 twice as much as formerly, 194-197. 
 
 EGYPT, early business in by barter, 11 ; use of gold in, 13; 
 
 silver in early Egypt, 14; a gold-silver compound, 15; 
 
 earliest money of copper, 15; use of African cowries, 17; 
 system of currency in metal bars, 45. 
 
 ELECTRON, or electrum, a gold-silver compound, 15; called 
 Ionic gold, 43; Lydian use of, S9- 
 
 . ERMAN on barter in Egypt, 12; on silver, 14; on electron, 15; 
 on copper, 16. 
 
 FIATISM and currency, 104; fraud by fiatism, 108; early 
 American fiatism, 109; a celebrated French instance of 
 extreme fiatism, no; the colonial fiat money craze, in; 
 its disastrous outcome, 112; fiatist zeal for American inde- 
 pendence, 114; Continental fiatist money, iiS; the civil 
 war "Greenback" fiatism, 118; the costs of American 
 fiatism, 119. 
 
 FRANKLIN, BENJAMIN, his protest against paper money, 
 
 119. 
 GOLD BIMETALLISM the true system, 79, 127. 
 
 GOLD, its place, 2, 3; as a commodity or as money, 4; use of 
 in Egypt, 13; put below silver, 14, 16; compounded with 
 silver, 15; Abraham's daughter-in-law presented with gold 
 bracelets and ring, 25; gold wedding ring, 26; Mosaic 
 sanctuary use of gold, 27; gold of Solomon's Temple, 28; 
 vulgar dispraise of gold, 31-33; gold as a rule of honesty, 
 34; relative position of gold, S7; definite and decisive 
 superiority of gold, 60; gold makes the most real money, 
 62; the best standard, 62; gold value the highest and stead- 
 iest, 63; gold metallism, 72; gold the standard, 74, 78; gold 
 commands confidence, 75; gold a trade money in England 
 under Queen Elizabeth, 91; failure of the American gold 
 16 
 
242 
 
 dollar of Alexander Hamilton, 94; American " Gold Bill " 
 of 1834 signed by Andrew Jackson, 96; desire and deter- 
 mination to have the actual use of gold as money, 97; 
 English conclusion in 1816 for the gold standard, 106; 
 gold cannot displace silver, 130; early English gold, 133; 
 new gold era for England in 1816, 137; gold standard 
 reasons, 140; gold becomes the only money in the United 
 States in 1834, 154; becomes from 1834 the standard, in 
 effect, though not in law, 154; from 1873 gold only stand- 
 ard, but with double money, 156-159; German gold under 
 double money system, 163; demand of India for gold, 
 166, 168; gold standard given to India, 169; wholly false 
 claim that appreciation of gold since 1873 now injures 
 debtors, 177; gold has not appreciated, 178, 186; its appre- 
 ciation desirable every way, 179; gold the supreme com- 
 modity, 179; debtors not hurt by gold, 180; gold the 
 supreme servant, 181; use of as money does not cause 
 appreciation, 182; gold has come to the supreme place 
 purely on its merits, 186; gold on hire in London purely 
 an advantage to us in America, 190; gold supply of United 
 States, 197; ignorant idea that gold is doing double work, 
 200, 201; criminal conspiracy against gold, 202; silver sale 
 of our gold under 16 to i, 203; gold value wrongly viewed, 
 186; false idea of the efifect of a. new supply of gold, 213; 
 gold in French monetary experience, 222-223; universal 
 looking to gold as standard at middle of nineteenth cen- 
 tury, 225; human progress means gold, 234, 237. 
 
 HAMILTON, ALEXANDER, his American silver dollar a 
 failure, 93; also his gold dollar, 94; his fundamental error, 
 150; Shaw on his scheme, 150, 152. 
 
 HARD TIMES, the causes of, 188. 
 
 HEAD, BARCLAY, his "Coins of the Ancients " — his view 
 of Lydian origin of coinage, 41. 
 
 HOLM, ADOLPH, on early Greek money, 39-42. 
 
 INDIA, her trial of silver, 166; demands gold, 168; gets the 
 gold standard, 169; injury done by free coinage, 170; 
 demand for silver in India, 170; futile effort to hold up 
 silver, 171; recent status of silver in India, 172. 
 
 JEVONS, F. BYRON, in Gardner and Jevons' "Manual of 
 Greek Antiquities," on early Greek money, 45- 
 
343 
 
 JEVONS, STANL'EY, on Walker's views of money as the 
 unsoundest known to him, 7; on intrinsic value as the 
 basis of money, ig; on the natural history of money, 35; 
 on currency by weight the primitive system, 52; on money 
 metals, 54; on money as a store of value, 87; on the 
 dollar of the United States, 92; on progress to universality 
 of the gold standard, 132. 
 
 JONES, SENATOR JOHN P., on gold as the only honest 
 standard, 35. 
 
 LABOR and money, 86; what labor wants, 129. 
 LATIN UNION, formation of to safeguard a bad money sys- 
 tem in France, Belgium, Italy and Switzerland, 147. 
 
 LEGAL TENDER, colonial usage of, 21; legal tender paper 
 disaster of 1862, 100. 
 
 LIVERPOOL, THE EARL OF, his epoch-making "Treatise 
 on the Coins of the Realm," which brought England to 
 adopt gold as the standard with silver subsidiary, 106, 137. 
 
 LOCKE, JOHN, his superficial definition of intrinsic value, 9; 
 advised making silver ' the standard, and gold a trade 
 money by weight at its current value in silver, 91. 
 
 MASPERO, his account of ancient Oriental money origins and 
 usages, Egyptian, 10, 11, 13, 15; Babylonian, 16; on African 
 cowries as low culture cash, 17; reports the mummies 
 " cuirassed in gold," 26. 
 
 MENDELEEFF on unique position of copper, silver and gold, 
 S3. 
 
 METAL MONETARY SYSTEMS, the world's 29; J. H. Nor- 
 man on, I. 
 
 METALLISM, the use of a metal or metals as money, 64; the 
 chief problem of metallisni, 76. 
 
 METALS as the material of money, S3; costly not the same as 
 precious, 54; relative position as metals of gold and 
 silver, 57; use of metals as money does not cause appre- 
 ciation, 182. 
 
 MINT, the work of, 90; American mint law of 1792, 91; the 
 Joseph's-dale mint of the Count of Schlick set up in 1581, 
 91; its honest thalers gave us the word dollar, 92; how the 
 
244 
 
 American mint wrought for mischief and not for benefit, 
 95; first American success with silver coinage (small coin 
 only), 98; 90 years of failure of coinage of silver dollars, 99. 
 
 MOSAIC sanctuary use of gold, 27. 
 
 NORMAN, JOHN HENRY, on the " World's 29 Metal Mone- 
 tary Systems," i; his conviction that the world has no 
 science of money, 7. 
 
 MONEY — the question of needing new study, i ; W. A. 
 Shaw's two fundamental ideas for a perfect system, 4; 
 bad definitions of " money," 7; F. A. Walker's in the 
 Encyclopaedia Britannica the worst, 7, 9; importance o£ 
 the story of, 10; science basis of, 10; earliest facts of, lo-ii; 
 intrinsic value the basis of, 19; African cowries and 
 Indian wampum as savage money, 22; growth of money, 
 35; essential fact of, 36; Horace White's general view of, 
 37; early Greek making of, 38; coinage of by Pheidon, 
 39-44; iron, cast in bars, as money, 43; temples were the 
 ancient money centres, 50-51; ancient money was metal 
 by weight, 51^52; earliest current money, 59; what makes 
 real money, 61; historic basis of real money, 70; money 
 measures value, 81; it regulates exchange, 82; Aristotle on 
 money, 83; Horace White on money, 84; money as a 
 standard of value, 85; money and labor, 86; money and 
 credit, 87; money as capital, 88; money and banking, 88; 
 the minting and issue of money, 90; Sir Isaac Newton on 
 money, 135; England with no good money before the 
 1816 change to the gold standard, 136; early French 
 money, 140; French Revolution money, 141; historic bi- 
 metallism of money in France, 149; money and prices, 
 173; Dr. F. A. Walker's radically wrong idea of money, 
 206. 
 
 PAINE, THOMAS, on paper money schemes as designed to 
 swindle creditors, 113. 
 
 PAPER MONEY, 17 years of United States paper money, 102; 
 desperate scheme of John Law to make paper money 
 work a complete failure, no; Massachusetts initiated a 
 scandalous paper money craze in Colonial New England, 
 III; fearful spread of plague, 113; untold ruin wrought by 
 it, 115-118; the civil war " Greenback" scandal, 118-120. 
 
245 
 
 PHEIDON, KING OT' ARGOS, the earliest Greek coiner of 
 money, 39-42; Grote on his coinage, 42; Curtius on, 43. 
 
 PLATINUM, a noble metal not good for money, 56, 68. 
 
 PRICES and money, 173; no disastrous fall caused by gold, 
 173; cause of decline in prices, 174; effect of supply and 
 demand on prices, 175; case of cotton, 176; wheat prices, 
 176; low prices not true of labor, 178; market prices of 
 gold and silver not affected by use as money, 185; lower 
 prices not in any way detrimental, 187. 
 
 RAGUET, M., finance expert, 1820-1834, 91, 95. 
 
 RATIO, market relation of such values as gold and silver, 76, 
 94, 96, 97, 105, 127; in France at no time in the present 
 century correct, 142. 
 
 SAY, M. LEON, his bill for making gold the standard in 
 France, March 21, 1876, 148. 
 
 SHAW, W. A., " History of Currency," 3; his story of all 
 countries driven to gold as standard with silver sub- 
 sidiary, 3; his essentials of an ideal currency system, 4; 
 on bimetallism, 123; error of his assumption, 124; on loss 
 of English silver to the money-mongers, 135; on want 
 of any good money in England, 136; on the new law of 
 tender for English silver in 1774, 137; on suspension of 
 English coinage of silver, 138; on its recoinage, 139; on 
 final gold standard law for England, 140; on French bi- 
 metallism, 142-149; on failure of Hamilton's U. S. silver 
 dollar, 150; and failure of Hamilton's scheme, 152; on 
 gold secured by law of 1834, 154; on silver in 1873, 156; 
 on results of the Bland silver bill, 160; on bimetallism in 
 Germany, 161-164. 
 
 SILVER, its breakdown as standard money, S; American a 
 deserter from the money field for 40 years before 1873, 6; 
 silver above gold in early Egypt, 14; Babylonians gave sil- 
 ver chief place, 16; relative position of silver, 57; silver 
 metallism, 71; special case of silver, 74; the true interest of 
 silver, JT; silver used as the common measure of value in 
 England under Queen Elizabeth, 91 ; Spanish silver dollar 
 adopted as the American monetary unit in 1785, 92; Alex- 
 ander Hamilton's silver dollar turns out a failure, 93; 
 President Jefferson suspends coinage of the American 
 
246 
 
 silver dollar, a 44 years' failure (1792-1836), 93; silver 
 thrown out by President Jackson, June 28, 1834, 95; no 
 service of silver as American money during the first 60 
 years of our mint (to 1852), and even then only small 
 silver, 98; the silver dollar still a failure as money until 
 1873 — go years of continuous failure, 99; the English 
 law of silver, 107; secure ratio for silver that of intrinsic 
 value below face value, 128; cannot be displaced by gold, 
 130; advantage enjoyed by silver, 130; how silver lost 
 first place, 131; the gold standard will help silver, 131; 
 early English silver, 133; the money-mongers got the 
 silver, 135; a law of tender applied to English silver, 137; 
 English coinage of silver suspended in 1798, 138; recoinage 
 of English silver in 1816, 139; the silver incubus in France, 
 142; fatal drop of silver, 144, 147; drove France to the gold 
 standard, 148; complete failure of American silver, 153; its 
 position reduced, IS4; discredited as a standard, 155; not 
 " demonetized " in 1873, 156; as money made secure under 
 gold standard, 157-159; Bland bill silver scheme, 159; 
 silver in German double money gold standard system, 
 163; later German silver interest, 164; India's trial of silver, 
 166; injury done in India by free coinage; demand in 
 India for silver, 171; present status of silver in India, 
 172; price of silver not affected by use as money, 183; 
 silver has given place to gold solely on the merits of 
 gold, 186; possible peril in silver, 216; France forced to 
 drop silver, 218; silver as a standard in France dealt a 
 fatal blow, 224; extreme fall of silver has ruled it out as a 
 possible standard, 232; silver-using nations changing to 
 gold, 233-234, 237. 
 
 SOLOMON'S TEMPLE, gold used for, 28-29; he sold bonds 
 and bought gold, 30; his demonetization of silver, 30. 
 
 STANDARD, the most satisfactory, 62; legal fiat and the stand- 
 ard, 105; the English law of standard, 106; bimetallism of 
 the standard impossible of good, 122, 125, 127; gold stand- 
 ard bimetallism, 127; double standard perils, French 
 experience of, 145; France finds the gold standard a neces- 
 sity, 146; final French adoption of the gold standard, 
 148; double standard did not give France double money, 
 220; silver as a standard overthrown in France, 224; uni- 
 versal need of gold standard, 237. 
 
247 
 
 STEWART, W. M., on gold as the true universal standard, 34. 
 
 "UPTON'S " Coin Catechism," 2; on dismal failure of American 
 effort to have coined money, 94; our mint " a most ridicu- 
 lous " failure, 95; on the design of the bill of 1834 to 
 throw out silver, 96; on American first money success 
 after 80 years of failure (1,776-1856), 98, 99; on the 17 
 years of fiat paper money due to Mr. Chase, 102. 
 
 VALUE, Locke's superficial definition of intrinsic, 9; articles 
 employed as money on basis of intrinsic value, 21 ; this 
 the sound money basis, 59, 61 ; what value consists in, 62. 
 
 VIENNA convention of 1857 gave Germany only silver money, 
 162. 
 
 WALKER, F. A., his exceptionally unsound views of money, 
 7; his " International Bimetallism," 204; gold value 
 wrongly viewed, 205; radically wrong idea of money, 206; 
 absurd notion of currency contraction, 207; idea of a 
 regulating economic force, 208; fundamental error, 210; 
 wholly baseless theory, 212; false estimate of effect of 
 new supply of gold, 213; proof of incompetence as a bi- 
 metallist, 216; theory based on supposed French experi- 
 ence, 222; errors of his argument, 224; used mistakes of 
 economists for proofs, 226; makes an inadequate defense 
 of double-headed bimetallism, 227-230; a wholly delusive 
 scheme, 231; false complaint of action of the Paris Con- 
 ference of 1867, 232. 
 
 WAMPUM, Indian shell heads used as jewelry and as money, 
 18; two kinds of, white and blacTc, 19, 20; currency of in 
 American colonies, 109. 
 
 WEBSTER, PELATIAH, his story of the demon of fiat money 
 in American Revolutionary times, 116. 
 
 WEDDING RING, the gold, 26. 
 
 WHEAT PRICES, cause of change in, 176-177. 
 
 WHITE, HORACE, his book on " Money and Banking," 4; 
 his conception of " money a commodity," 4; does not seem 
 to sufficiently recognize need of silver money, 6; his gen- 
 eral view of money, 37; Mr. White on gold not absolutely 
 stable, 63, note; his definition of money, 84; his explan- 
 ation of gold as a basis of credit, 88; on American coinage 
 failure, 94, 95; on the "Gold Bill" of 1834 signed by 
 
248 
 
 President Jackson, 96, 97; on the paper money plague in 
 early New England, 113-118; on early American legal 
 tender laws, 117; on the "Greenback" fiatism of Secre- 
 tary Chase, 118; on recent German movements, 166; on 
 the French commission of 1857, 218; on the failure of 
 bimetallism in France, 220, 221 ; on prices in India, 236. 
 
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