A f-l 
 
 IS12, 
 
BIMETALLISM 
 
 Or the Double Standard 
 
 Read before the American Social Science 
 Association at Saratoga, 
 September 6, 1893 
 
 By Jacob L. Greene 
 
 HARTFORD, CONN. 
 
 Gbe Connecticut Mutual %lte Insurance Company 
 
 1893 
 
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Prefatory Note 
 
 This paper was an attempt to set forth in common speech 
 a simple hut comprehensive and orderly statement of those pri¬ 
 mary and unchanging facts of human nature and of human 
 action which always and everywhere cause and control to the 
 last detail the use of money and currency by men in dealing 
 with each other in every relation and capacity requiring such 
 use. 
 
 Its reception in certain quarters has led to the hope 
 that its wider distribution in this form may not be without use. 
 
 ‘Being restricted in length it necessarily treats many 
 points too briefly, and the temptation to recast some parts 
 was strong. But on the whole it has seemed best to leave it 
 unchanged even in those paragraphs which have special reference 
 to the crisis which was present when they were written. 
 
 Hartford, October 30, 1893. 
 
BIMETALLISM 
 Or the Double Standard 
 
 It is not a grateful task to offer an ele¬ 
 mentary thesis in this presence. But the 
 solution of the problem of Bimetallism does 
 not lie in any new data or hitherto undis¬ 
 covered facts; for there are none. It lies 
 rather in such plain statement and in such 
 comprehensive grouping of known and funda¬ 
 mental facts as will let them give their light 
 without confusion or obscurity and reach their 
 common focus without refraction. The average 
 man, impatient of prolonged attention and 
 careful thought, all too readily assumes that 
 the key to the answer lies in some obscure 
 principle of finance hidden away in hopelessly 
 complex facts impossible of apprehension by 
 the unskilled, and so gives ready assent to 
 any strongly asserted plausibility; or, starting 
 from the too common postulate, that all 
 human actions and interests finally head up 
 in political acts as their highest expression 
 and ultimate form and are therefore capable 
 
6 
 
 of complete regulation and remedy only by 
 political action, he turns to the legislature and 
 asks for an edict to settle the matter out of 
 hand. But the answer lies in a patient 
 recognition of facts so commonplace that their 
 controlling force is often overlooked: the plain 
 facts of everyday trade and of the use of 
 money and other currency commonly spoken 
 of as money. 
 
 The problem of the double standard is to 
 make two metals of different physical qualities, 
 of different utilities, of widely and irregularly 
 differing cost, and of widely different exchange¬ 
 able values for equal quantities, perform 
 equally satisfactory, perfectly interchangeable 
 and, therefore, absolutely equal and concurrent 
 service as money, both commercial and legal: 
 that is, to make them, however unequal 
 themselves, equal as measures of all values 
 of things exchangeable, as currency in effecting 
 exchanges, in discharge of commercial balances, 
 and in liquidation of all contracts and judg¬ 
 ments expressed in terms of money : the cost 
 and exchangeable value of one of which metals 
 has fallen with great rapidity within very re¬ 
 cent times while the conditions plainly in sight 
 affecting its cost and value indubitably promise 
 to send the two metals progressively apart. 
 It is the question of making some arbitrary 
 
7 
 
 but large number of ounces of silver, deter¬ 
 mined upon a merely momentary ratio of cost 
 and value, or else by legislative fiat regardless 
 of that ratio, play precisely the same and a 
 constantly interchangeable and equally satis¬ 
 factory part in the exchanges of the country 
 and of the world, and in the liquidation of 
 contracts, with an ounce of gold: of making 
 each metal do the same work indifferently, 
 equally, always, everywhere, without choice 
 between them, and to keep both in equal use 
 and demand. It is the question of making 
 an admittedly inferior agent perform an iden¬ 
 tical function in commercial and legal relations 
 with an admittedly superior one by somehow 
 making it everywhere equally effective and 
 equally acceptable. 
 
 The inability of the inferior to make its 
 own unaided way commercially is recognized 
 in the nature of the method relied on to effect 
 its proposed status. 
 
 The method is to procure the national 
 legislature to assume and to decree that a 
 given arbitrary number of ounces of silver 
 is now, always will, must, and shall be equal 
 in exchangeable value and legal efficiency to 
 an ounce of gold; that it shall be so taken 
 and held in all exchanges and liquidations 
 whether voluntary or involuntary; and that 
 
8 
 
 the minted aliquot parts of the assumed num¬ 
 ber of ounces of silver and of the ounce of 
 gold shall be equally and indifferently meas¬ 
 urers of all values including their own and 
 each other’s, of equal value in the market and 
 before the law, and of equal effect as tender: 
 to be of equal value in the market because 
 equal in effect as tender: each metal to be 
 freely coined on demand by the owner of 
 either, thus giving each the apparently equal 
 chance: the remedy for any preference between 
 them in the minds of men being the legisla¬ 
 tive “Thou shalt not.” 
 
 Can the method accomplish the end pro¬ 
 posed? Does the actual and effective power 
 of legislation extend that far ? 
 
 What is money ? It is some sort of val¬ 
 uable property of such peculiar and general 
 acceptability that it readily exchanges for 
 any and every other commodity, and therefore 
 comes to measure in the terms of its natural 
 or conventional divisions or denominations, 
 the exchangeable value of every commodity, 
 whether property or service, for which as 
 currency it is exchangeable. Logically, and 
 in point of fact, its use as currency precedes 
 its use as a measurer of values, and this 
 latter use, as well as its still later artificial 
 legal use as tender, grows out of its use first 
 
9 
 
 as an actual and common currency; as accept¬ 
 able anywhere in exchange for all other prop¬ 
 erty because acceptable everywhere for any 
 property. 
 
 What is the origin of money ? It is born 
 of trade. What is its relation ? It is itself a 
 part of trade and an instrument of all trade. 
 And what is trade? It is the voluntary ex¬ 
 change of commodities for reciprocal advan¬ 
 tage. What is the primary, invariable, and 
 eternal fact of trade ? It is that one com¬ 
 modity is never parted with by its posses¬ 
 sor except for another of equal value. That 
 is the moral law of trade. No one owning 
 a piece of property, or capable of rendering 
 a service, willingly parts with the one or 
 renders the other — unless in charity — with¬ 
 out receiving another piece of property or 
 a definite service of at least equal exchange¬ 
 able value, and which for some then pres¬ 
 ent reason is more desired by the recipient 
 than that parted with by him in the exchange. 
 Property for property; actual value for actual 
 value ; substance for substance; something else 
 valuable for every valuable something, and 
 that according to the free will and judgment 
 of the respective owners : that, and only that, 
 is trade, its essence, its form, and its law : its 
 unalterable condition. 
 
10 
 
 And if, for any reason, one of the com¬ 
 modities involved in the exchange be not at 
 hand for instant manual delivery, and can 
 be delivered only at a distant place, or to a 
 representative empowered to receive it; or if 
 delivery of the return commodity be for¬ 
 
 borne to a future date, in any such case the 
 person entitled to it may, for a compensating 
 advantage of some sort, be willing to receive 
 in place thereof a good and sufficient contract 
 therefor, a formal paper evidence of the trans¬ 
 action, a title deed to the thing yet to be 
 delivered, to be fully executed or liquidated 
 at the agreed time and place by the thing 
 itself, failing which damages may be had : that 
 is credit on the one side and debt on the 
 
 other: credit on the part of him who parts 
 with his property expecting to receive the re¬ 
 turn parcel to the exchange elsewhere or else- 
 when; credit founded on the faith that the 
 
 desired piece of property for which he has 
 
 taken the contract or title deed, will be deliv¬ 
 ered at the specified time and place. It is 
 debt on the part of him who has received 
 his something in the exchange but has not 
 yet rendered his something-else in return. 
 And these facts furnish the definition of every 
 credit and every debt. Every true credit rep¬ 
 resents something, some valuable property, 
 
parted with in an exchange which is to be 
 completed later on and elsewhere by the deliv¬ 
 ery of the agreed and equally valuable some- 
 thing-else; and every honest debt represents 
 the something-else necessary to complete the 
 agreed exchange in which the something has 
 been already received. That is the essential 
 fact of every debt no matter what its form of 
 origin; whether it arise in the exchange of 
 one kind of property for another kind, or in 
 the exchange of a certain quantity of a cer¬ 
 tain kind of property for a like quantity of 
 the same kind of property to be delivered in 
 the future. Borrowing, as distinguished from 
 renting or hiring, is simply an exchange of 
 two quantities of the same property, the deliv¬ 
 ery of one of which, by the lender, is immedi¬ 
 ate and the delivery of the other of which, by 
 the borrower, is postponed to an agreed date 
 and place. It is trade and nothing else. 
 
 Or, the owners of the things exchanged 
 may effect their purpose by an exchange of 
 contracts for, or title deeds to, these things 
 respective^, delivery and possession to be had 
 elsewhere and at another time in both cases, 
 to the great convenience of both parties. 
 
 But in any and every case it is the prop¬ 
 erties owned by each and desired by the other 
 that are exchanged; and the credit or faith 
 
12 
 
 attached to any paper instrument of the trans¬ 
 action is simply the belief that it will be duly 
 solved by the delivery of the property itself as 
 agreed. There is no other credit or faith 
 known among men in their commercial and 
 financial relations. Any other use of the term 
 is idle breath and covers either a gambling 
 speculation or a specious cheat. 
 
 These propositions cover the whole essence 
 and method of all trade and commerce, 
 whether it be the limited and petty barter 
 between individuals, or that between the prod¬ 
 ucts of communities or nations massed in the 
 hands of their merchants for those multifa¬ 
 rious exchanges which are commerce, domestic 
 or international, on the grand scale, involving 
 as their incidents and instruments, transpor¬ 
 tation, insurance, and those elaborate and 
 refined systems of credit by which the one 
 mass is balanced against the other, and simply 
 the difference in value is transferred from the 
 one side to the other in some acceptable form 
 of property used as a currency. This it is 
 which bewilders the unfamiliar mind by its 
 magnitude and the multiplicity of its instru¬ 
 ments and detail, and so obscures its essential 
 and perpetual simplicity that men believe it 
 really follows some hidden law, and that trad- 
 ers * n mu ltitude may do something else than 
 
13 
 
 that which each man does: that somehow 
 something is exchanged for no something-else, 
 or no title deed to something-else, and that the 
 paper evidence of debt is something apart 
 from, and valuable apart from, the property it 
 pledges to give for that already received. 
 
 The obvious converse of these propositions 
 brings us forward a step : As all commerce is 
 the free exchange of valuable commodities, 
 and without such exchange there is no com¬ 
 merce, so nothing but a valuable commodity, 
 and at its exchangeable value, can enter into 
 an exchange, or into commerce. And as every 
 debt represents only the postponed completion 
 of the exchange of properties, and nothing 
 but property can satisfy the debt and com¬ 
 plete the exchange, so no form or evidence 
 of debt can enter into voluntary transactions 
 between men unless it is a good and sufficient 
 contract for, or title deed to, a piece of actual 
 property; and it can enter into the exchange 
 or transaction only at the actual known or 
 supposed value of the property to which it 
 carries the right of eventual possession to 
 transfer which it was uttered. It is the prop¬ 
 erty and not the very convenient paper which 
 is traded for. The evidence of debt which 
 does not convey and effectually secure the 
 possession of the something-else is not ex- 
 
14 
 
 changeable for the something. When men 
 lose faith in its ability to bring the prom¬ 
 ised propert}^ it is waste paper, whether it 
 be the note of an individual bankrupt, or 
 ‘‘continental money,” or French assignats. 
 
 It follows from the facts of all trade that 
 whatever the world of commerce uses as 
 money, that which is itself universally accept¬ 
 able for any commodity one wishes to part 
 with in order to secure the something-else, 
 because one is sure that it will, without loss 
 of value, exchange for any particular com¬ 
 modity he may at any time desire, and in 
 the terms of which the values of all com¬ 
 modities are therefore expressed, must itself 
 be property; else it will not buy property. 
 And it has been, must and will be of a sort 
 the most convenient and effective to its pur¬ 
 pose under all the circumstances of its use 
 for the time being. General and permanent 
 utility, desirability, the narrowest possible 
 range of fluctuation in value, probable future 
 steadiness and practical permanence of value, 
 great durability, and a minimum of bulk with 
 capacity for ready division, are some of the 
 characteristics which qualify any kind of prop¬ 
 erty to serve as a common currency and there¬ 
 fore as a measurer of values, and have deter¬ 
 mined their adoption as such in all ages. As 
 
1 5 
 
 between any two substances, two kinds of 
 property, differing from each other in respect 
 of these things and their consequent cost of 
 use, it is impossible that there should not be 
 a choice in the minds of men using them. 
 The one must of physical and unalterable 
 necessity be preferable to the other for such 
 use. The whole history of money has been 
 the progressive disuse of the primary, crude, 
 bulky, and perishable forms of property as 
 currency, and the natural selection and grad¬ 
 ual and general, but at first perhaps uncon¬ 
 ventional, or extra-legal adoption of more de¬ 
 sirable forms for that purpose. New and 
 isolated communities, having no outside com¬ 
 merce, have been compelled to use sometimes, 
 as money, even in recent times, forms of 
 property as singular as, and sometimes identi¬ 
 cal with, those of the primitive tribes whose 
 methods and instruments of exchange and 
 traffic furnished the terminology which persists 
 to this day. But as commerce has become 
 extended in area and scope, spreads over 
 wider fields and embraces more articles and 
 greater quantities, and becomes complex by the 
 multiplicity of personal relations and services 
 involved, it searches for and uses the less 
 variable, more refined, convenient, accurate, 
 and therefore less expensive instrument. In 
 
16 
 
 the presence of the more valuable and con¬ 
 venient the less valuable and convenient will 
 not do, and is never called to do, that 
 complete work which the more valuable and 
 more convenient does more readily, more 
 accurately and certainly and less expensively. 
 The less valuable and convenient thing will 
 never, in actual commerce, measure the value 
 of the more valuable and convenient. It will 
 itself be measured in the terms and quantities 
 of the most valuable and most desired. It 
 will, therefore, never measure the values of 
 other commodities. They will be measured in 
 the divisions of quantity of that most valuable 
 thing which itself measures the value of the 
 less valuable. The most acceptable form of 
 money is the measure of every other value 
 whether it be of some other so-called money or 
 of some other commodity. There never was 
 any other measure in the business world; 
 there never can be any other. It is a physical 
 and psychological impossibility. The best form 
 of currency, the form most acceptable to the 
 commercial world, was, is, and eternally will 
 be, the sole and absolute measure of all values 
 coming in contact with it, until difficulty, 
 inconvenience, loss, expense, and diminishing 
 trade are at a premium among business men. 
 So long as human nature retains the elements 
 
1 7 
 
 and is accomplishing the fact of progression, 
 the superior will always be the standard as 
 against the inferior. The inferior cannot be 
 other than subordinate and subsidiary. It will 
 do the full work of the superior only in its 
 absence, and then only on the terms of its 
 own conversion into the superior; that is, at 
 such discount as covers the risk and cost of 
 and pays a profit on its use in place of the 
 superior. And whenever coins of the inferior 
 metal have been sought for and preferred, 
 it has been because they, for the time being, 
 contained a quantity of metal in excess of 
 the ratio of their nominal exchangeability 
 with the coins of the superior metal, and were 
 therefore worth more to take out of local 
 circulation for use in arts or for foreign 
 trade at their actual exchangeable value by 
 weight than for domestic trade by count at 
 nominal value. 
 
 Now how far, and in what wise, do sep¬ 
 arate communities, nations, and countries come 
 under the common operation and effect of this 
 law or fact, and what is their individual share 
 in it? Or rather, how far, if at all, are they 
 exempt from it? Can they escape it? Can 
 they take themselves out from under its abso¬ 
 lute domination ? 
 
 Money is merchandise: merchandise which 
 
i8 
 
 for its special quality has taken on a wider 
 function than other merchandise, but which 
 took on that function solely in virtue of its 
 merchantable quality, and can retain that func¬ 
 tion only so long as it retains that quality in 
 a superior degree. In the world’s market 
 money buys by the quantity and quality and 
 present value of its substance precisely as does 
 any other merchandise, and no matter what its 
 substance for the time being may be. In in¬ 
 ternational exchanges coins do not pass as 
 coins. They are not counted. The substance is 
 weighed for quantity and tested for quality, 
 exactly as iron, wheat, and beef are. Local 
 coining sufficiently certifies to the citizens of 
 that country the proper quality and the con¬ 
 ventional divisions of quantity, or denomina¬ 
 tions ; so that counting the locally coined 
 divisions sufficiently ascertains the quantity 
 for local purposes; but, whether abroad or 
 at home, it is still the quantity however ascer¬ 
 tained that does the business in virtue of its 
 merchantable value. Coinage is of purely 
 local use and convenience. Away from home 
 it certifies nothing sufficiently to answer the 
 demands of a commerce in which slight frac¬ 
 tions of value make the difference between 
 loss and gain. 
 
 So long as commerce is purely local its 
 
19 
 
 money can be, and often has been, a kind 
 of property of only locally superior value and 
 convenience. And so long as that kind of 
 property is actually superior locally, and it is 
 not brought into competition with outside 
 better money, it will perform the function of 
 money truly, however clumsily and inade¬ 
 quately. It will measure other values and ex¬ 
 change for them, whether it be itself cattle, 
 cowries, or bunches of shingles. 
 
 But when localities and peoples begin to 
 trade with each other, some form of property 
 equally acceptable to each, of superior adapta¬ 
 bility to the purpose in each, will come to be 
 used as the common measurer of the values 
 of the various commodities of each, because 
 freely accepted in exchange therefor. And that 
 thing which most freely of all exchanges for 
 and measures in its own convenient divisions 
 of quantity the values of these diverse com¬ 
 modities in and for international exchange, by 
 that very fact fixes also, in its own terms, their 
 exchangeable values for every locality within 
 the countries concerned in the commerce. For 
 the trade of each locality or community be¬ 
 comes simply a part of the commerce of the 
 whole. And as all local prices of commodi¬ 
 ties dealt in between communities are con¬ 
 trolled by and constantly regulated to the 
 2 
 
20 
 
 prices of those commodities at the centers of 
 that exchange, so will those local prices nec¬ 
 essarily find expression in the money used to 
 fix prices at those centers and in no other. 
 That thing becomes the money the terms of 
 which measure all values throughout those 
 countries because only through its use do all 
 the commodities of those countries pass to their 
 final interchange. Hence it is the money 
 which as currency is most readily, freely, safely, 
 and inexpensively exchanged for their com¬ 
 modities throughout those countries. And if 
 in any of those countries an inferior kind 
 of property be locally used for money, it will 
 be so used only at the inconvenience and 
 expense of casting its market value in the 
 terms of the better money of the commercial 
 world and the exchange of that better money 
 into the poorer local money, with such addi¬ 
 tion for the risk of further depreciation and 
 for profit on the transaction as the immediate 
 conditions may require. It is only the best 
 money which really measures the values of 
 all commodities subject to interchange: it is 
 the best money which as currency buys most 
 leadily, at least loss and the cheapest, and 
 which is, therefore, the cheapest money: it 
 is only the best money which settles the 
 final balance. Therefore is it the money 
 
21 
 
 that measures. The inferior money may be 
 used exclusively as a local currency; but it 
 will not be used to measure by; and prices 
 locally expressed in its nominal terms will 
 mark up or down as it marks down or up 
 in the measure of the best, the prices in 
 that remaining unchanged. 
 
 We hear much of the desirability of a 
 cheap money for the people, and of the prom¬ 
 ised efficacy of the double standard in 
 procuring it. What is dearness and what is 
 cheapness in money ? It is a question of the 
 cost at which it performs its functions of 
 measuring values and exchanging for them 
 either directly or by settlement of balances. 
 It is purely a question of the economy with 
 which it does its work. The cheap money 
 is that which does its work at least cost: 
 which is the same thing as saying, with 
 widest and readiest acceptance, with least 
 hindrance and least friction. Dear money 
 is that which costs the users the most to 
 use. And it is not the commodity which is 
 most abundant, of which the greatest bulk 
 can be produced at least cost, that makes 
 a cheap money by doing its work cheaply 
 — exactly the contrary. It is not a ques¬ 
 tion of the cost of a given bulk of the 
 article; not a question of a cheap material, 
 
22 
 
 but of the cheapness of its service; of the 
 relative cost at which it does its work. 
 Otherwise the Spartan currency would be 
 a cheaper and therefore better money than 
 either gold or silver. The inferior substance, 
 no matter how dignified by law or made 
 venerable by custom, will and can play only 
 an inferior and subordinate and expensive 
 part. Cost is not affected by sentiment. Trans¬ 
 portation and storage and handling cost by 
 weight and bulk. 
 
 Now touching the legislative assistance 
 proposed for the inferior metal commodity, 
 let us ask, what can the statute law of any 
 country or of all countries, effect in this 
 matter ? How far is true commerce, free 
 exchange, controllable by legislation ? Can 
 legislation abrogate or materially modify a 
 single iota of its essential facts and con¬ 
 ditions ? Can it touch exchangeable values ? 
 Can it change human nature, its needs, rights, 
 and essential methods ? Can it compel the 
 exchange of something for nothing, of a 
 whole for a fraction, of the superior for 
 the inferior on terms of the latter’s own 
 dictation ? And if it could do all these 
 things within its own sovereignty, can it 
 reach and control all the parties concerned? 
 
 Commerce is not the product of statute 
 
23 
 
 law. Its methods and its instruments are 
 not creations of law: they are born of 
 its own unalterable elements and facts. 
 The statute can recognize, sanction, and 
 declare them and provide remedy for the 
 effectual protection of the personal and 
 property rights growing thereout. That is 
 the most and best it can do: all it can do 
 that is beneficial. It can obstruct, it can 
 make costly, it can burden commerce with 
 burdens alien to its nature. It can rob and 
 destroy. But wherever commerce is and sur¬ 
 vives it is there and in being by virtue of 
 obedience to its own inherent laws and by 
 the use of its own instruments, and not by 
 virtue but in spite of statutes undertaking to 
 modify or control their operation. Law is an 
 outside instrument of commerce so far as it 
 understands and its provisions harmonize with 
 the facts of trade. It is not its foundation 
 nor its ruler. 
 
 The precise operation by which it is pro¬ 
 posed to effect the equality of silver with 
 gold as a standard and as a currency through 
 the power of the law, is to declare it a legal 
 tender for unlimited amounts and then allow 
 its unlimited coinage: that is, by compelling 
 its local use as unlimited legal tender cur¬ 
 rency to force commerce to use it as a 
 
24 
 
 local measure of values. But as the only 
 
 use of silver as currency which the statute 
 can compel, is as legal tender in discharge 
 
 of debts payable here, so long as the 
 better gold is in sufficient supply for local 
 
 metal currency uses, and especially so long 
 as the silver supply is mainly held by 
 the government, and its creditors prefer 
 and it is ready and willing to pay the 
 
 better money, practically excluding silver 
 from wide circulation, the silver will be used 
 in reality only as a subsidiary or token coin¬ 
 age in petty trade, and so pass readily at its 
 nominal coin value. Under these conditions 
 its unlimited legal tender function is wholly 
 unused. Whenever that function is generally 
 resorted to, either voluntarily or of necessity, 
 then silver will be at once substituted for 
 gold in the currency and will no longer 
 buy at its nominal value as a token coin¬ 
 age, but at its commercial value, as coined 
 merchandise; and the more valuable gold, 
 no longer counting coin for coin with silver, 
 will be taken out of circulation, leaving the 
 depreciated money to pay its debts. While 
 government coins silver on its own account 
 and thus holds the supply, and refuses or 
 fails to use it as a legal metal tender, it 
 protects us from the silver as general cur- 
 
I 
 
 25 
 
 rency and from the loss of gold. But if it 
 must receive silver in unlimited quantity 
 from any and every owner and purchaser of 
 it and return it without cost in coins of un¬ 
 limited effect as tender, but of inferior com¬ 
 mercial value or convenience, thus entirely 
 losing control of the application of the 
 tender function and handing it over with 
 the inferior coins to persons immensely 
 interested in applying it; or, if government 
 continues to exhaust its stock of gold by 
 buying silver or otherwise until it has to 
 refuse gold and resort to its silver coin as 
 actual tender, then in either case silver 
 becomes at once the sole domestic metallic 
 currency. But even so, it cannot make free 
 commerce use it except on its own terms 
 and as a merchandise currency; and as such 
 it will not finally measure values unless 
 it is the best currency of outside commerce 
 as well as of our own. 
 
 The legal tender function of money is a 
 special, artificial, and localized use growing out 
 of and supplementing its commercial use, by 
 extending its measurement of values to the 
 measurement of damages, and extending its 
 currency use, the application of its merchant¬ 
 able value, to the liquidation of damages and 
 of contracts made in its terms. As relating 
 
26 
 
 to the matter of damages, it is in the nature 
 of a remedy. As relating to contracts for 
 money, it declares what commodity is meant or 
 will solve the contract by delivery. 
 
 The extent of the misapprehension respect¬ 
 ing the rank and potency of the legal tender 
 function was well illustrated by its use as the 
 sole definition of money at a recent notable 
 convention of advocates of silver. One of the 
 speakers declared that “ Money is not gold 
 or silver, but the instrument by which debts 
 are legally paid.” And this declaration is 
 further instructive as showing the historic 
 continuity of the greenback or fiat money 
 theory with that of the legislative equality of 
 silver with gold. Both theories assume a 
 peculiar efficacy in the legal tender function 
 to be decreed by the legislature: that political 
 force can override the unchangeable terms and 
 conditions upon which men consent to deal 
 with each other: that the measurement of 
 values is a legal and not a commercial opera¬ 
 tion : that the commercial value and use of 
 money depends upon and results from the arti¬ 
 ficial and secondary office assigned it by the 
 legislature : that what it declares legal tender 
 is therefore, ex vi terminij money of full 
 and perfect commercial efficiency : which prem¬ 
 ises being granted, the question of the num- 
 
27 
 
 ber of standards passes, of course, into a lim¬ 
 itless range: from gold to potatoes. 
 
 It is not strange there should be such 
 confusion abroad when the men composing 
 the Supreme Court of the United States have, 
 by a large majority, declared that it is within 
 the constitutional competency and official mo¬ 
 rality of the national legislature to decree 
 that the man who has parted with something 
 on a contract for the future delivery of some- 
 thing-else, may, under all circumstances and 
 conditions, be compelled to receive, not that 
 something-else, not even another piece of prop¬ 
 erty than that stipulated, but, instead of either, 
 another evidence of somebody else’s debt: 
 another contract for the delivery of something 
 else. True, it was the evidence of the debt 
 of the United States which was being consid¬ 
 ered as the substitute for the property agreed. 
 But as yet under the paper tender the man 
 had received nothing; and still his claim 
 against his debtor was canceled in law. And 
 the court avers that it is wholly within the 
 legislative competency to declare what thing or 
 instrument may and shall be used as legal 
 tender. Wherefore it is competent and legally 
 proper to legislate that one evidence of debt 
 may be liquidated by some other evidence of 
 debt, ad infinitum , and the something-else for 
 
28 
 
 which something w T as parted with be thus 
 eternally postponed; and the second, third, or 
 one-thousandth such pretended liquidation and 
 actual postponement rests upon and also lacks 
 just the same basis in fact and in morals 
 as the first. 
 
 Legislation can, while that decision stands, 
 make anything a mere legal debt-paying cur¬ 
 rency : it cannot fix its value: commerce alone 
 can do that. It cannot make the standard by 
 which values are measured in the commercial 
 world, nor prevent the values as measured and 
 established by it from being universal, nor 
 enable the local legislative currency to perform 
 its intended work until it is itself first meas¬ 
 ured and valued and discounted in the’ terms 
 of the money of that commercial w^orld. It is 
 not the suffrages of men in their political 
 capacity but in their commercial capacity that 
 make the money of the merchant. It is not 
 the legal tender fiat of a government but its 
 voluntary acceptance among men that makes 
 the money of the wider realm. It is not as 
 citizens but as traders, not in our political 
 capacity but in our commercial relations, that 
 we, every one of us, use money. We can get 
 rid of our gold; the world will gladly take it; 
 but we cannot help having our values meas¬ 
 ured in it by the world which uses both it 
 and our other commodities. 
 
29 
 
 
 Another mist beclouds the general thinking: 
 the ambitious assertion of the possibility of 
 a purely American system of currency and 
 money, wholly independent of and different 
 from foreign S3^stems of money: a sort of 
 financial jingoism. 
 
 But it is not with any foreign system, not 
 with the money of any foreign government, 
 as such, that American money comes into 
 correlation and by the side of which it must 
 do its work. It is not with pounds, shillings, 
 and pence, francs, florins, or roubles. These 
 are not the essence of money, but merely its 
 local denominations. It is not a question of 
 these: nor yet whether these express quanti¬ 
 tative divisions of gold, silver, or iron. It is a 
 question of what is the money substance in the 
 exchangeable value of which and by the use of 
 which as currency the commerce of the coun¬ 
 tries issuing any and all of these local coin¬ 
 ages of that or any other substance, is meas¬ 
 ured and carried on with each other and 
 therefore within themselves, actually if not 
 nominally. These countries may or may not 
 be governmentally treating as their local money 
 the money of commerce. If they are so treat¬ 
 ing it, still it is not with it as British money, 
 or as* French money, or any other national 
 money that we come in contact: it is with 
 
30 
 
 it as the money of commerce which these 
 peoples have adopted as their own because 
 it is the money of that world of trade of 
 which they and we are a part: a part, not 
 by virtue of civil legislation, but by their 
 share in its commercial transactions. We are 
 a part of that world by virtue of the trans¬ 
 actions of our people in it. We are living 
 
 its life, doing its work, using its methods and 
 instruments, not as a government, not as a 
 nation in its official capacity, but as a people 
 dealing with the peoples of the world in per¬ 
 sonal relation. From that connection, and all 
 of form and substance that it implies, no 
 power can free us until we cease to trade. 
 Our system of money, as dealers in that world, 
 will be actually the system of money of that 
 world, no matter in what nominal terms the 
 
 local law may compel us to keep our books 
 
 and draft our notes and discharge our debts 
 to each other. Our legislature may set up an¬ 
 other system and decree another money as 
 tender. It will not be therefore the system 
 nor the money of the world of trade, nor ours 
 in dealing with it. We are a part of that 
 world, but only a part; and a part is not 
 greater than the whole and does not dominate 
 it. We can neither separate from it nor rule 
 it. We cannot sell in it without also buying 
 
3i 
 
 in it: we cannot buy in it without also selling 
 in it. We have to come to daily and hourly 
 free, willing agreement with it for each side 
 of the transaction. And because we are in 
 it and of it, and because by reason of that 
 fact we are what we are as a producing and 
 commercial people, our whole internal com¬ 
 merce is simply a part of that greater whole, 
 follows its laws, conforms to its life, uses 
 its methods and instruments, in fact whatever 
 it ma}^ do in name; directly if allowed, in¬ 
 directly and by costly translation if it must; 
 because not otherwise can it remain a part 
 of the whole, and because it can have no 
 existence except as a part of the whole. We 
 do not live to ourselves. We live to and 
 with all the peoples of the whole earth. And 
 commerce means agreement with them and 
 common use of common instruments, and not 
 our own arbitrary way. Commerce is the 
 agreement of individuals, scattered through 
 the habitable earth maybe; and in the end 
 and at bottom the law and the power of 
 normal individual life and action are greater 
 and more enduring than the decree of any 
 multitude, howsoever framed. So liberty grows 
 and man leads men. 
 
 The actual inferiority of silver as a cur¬ 
 rency in this country has been abundantly 
 
32 
 
 shown by the extremely small amount of its 
 use both during the years that it was a legal 
 tender currency first for an unlimited and 
 then for a limited amount, and after it 
 became again an unlimited tender in 1878, 
 coined at the rate of $2,500,000 a month. 
 Notwithstanding the abundance and growing 
 cheapness of the metal it has been impossible 
 to get more than a very small amount of it 
 into circulation. It is not the kind of property 
 people very eagerly desire in exchange for 
 their property. Nor has the accumulation 
 for these years of uncoined bullion at the 
 rate of 4,500,000 ounces a month made this 
 property more attractive. The men who 
 owned this property as it came from the 
 mines and who have made our government 
 a customer through legislation, for that much 
 more of it than commerce will use either 
 as merchandize or currency, themselves prefer 
 the gold in which they immediately make 
 the government redeem its notes issued to 
 them for the purchase of their silver. The 
 silver has not been accepted of commerce; 
 its purchase has simply caused the utterance 
 of Treasury notes nominally calling for 
 coined gold or silver indifferently; but, so 
 long as silver is not acceptable and gold is 
 in supply, these notes in effect call only 
 
33 
 
 for the gold which commerce does accept, 
 and which the silver mine owners therefore 
 want and which the government cannot 
 withhold without suspending. And the acute 
 stage of the problem is reached now that 
 that supply of gold is so reduced that the 
 limit to the operation has become plainly 
 visible, and the business world therefore 
 stands to wait its solution: to know whether 
 the dollars it would venture in its enter¬ 
 prises will come back at one hundred cents 
 or fifty, and withholding these dollars until 
 that answer is made. The issue of Treasury 
 notes for the purchase of silver has veiled 
 the true character of the operation. The 
 cashing of the notes in gold by the sellers 
 of silver reveals that character. We have 
 been swapping our gold for their silver. So 
 does an indirection always carry and conceal 
 a practical fraud; and so have we allowed 
 that to be done by indirection which in 
 direct terms no one would have dared to 
 propose. Thus has our gold been made to 
 bear in fact most of the burden of currency 
 and all of the asserted legal tender function 
 of silver, which has been mainly useless, 
 and when useful at all has been simply 
 subsidiary throughout. And thus have we 
 learned both that there is and has been in 
 
34 
 
 this country actually but one standard, and 
 that one gold; and that whatever silver pro¬ 
 ducers wish other men to think, they them¬ 
 selves desire gold in exchange for their 
 product and have been most industriously 
 getting it, and getting it out of the country 
 which cannot use their silver, for com¬ 
 merce will not take it at the price. 
 
 Doubtless much of the confused popular 
 thinking or feeling upon the matter of a 
 double standard has been due to the supposed 
 need for an increased volume of money, an 
 abundant money, which has been so strenu¬ 
 ously alleged and generally accepted without 
 real examination, because of the general at¬ 
 tractiveness of the idea; and because of the 
 apparently implied idea that if it is only 
 abundant it can be more easily had, that is, 
 without earning it or without giving so much 
 or so valuable property for an equal value of 
 it; forgetful that if it takes less to get it with, 
 it will also buy less when we have got it; that 
 other things being equal, increase in abun¬ 
 dance, in volume, means decrease in purchasing 
 power, in exchangeable value in money and in 
 every other commodity, and that, consequently, 
 the more there is the more will be required 
 to accomplish the same transactions. The use 
 of money as actual currency is relatively 
 
35 
 
 diminishing constantly, and will continue to 
 do so. Any money enters into commerce purely 
 as currency; that is, as merchandise; and con¬ 
 versely all merchandise and the bankable 
 credits made against it are currency in the 
 commercial world to the extent of the demand 
 for it in the market for the time being. By 
 the use of bank checks, bank bills, bills of 
 exchange, postal and telegraphic transfers, the 
 whole business world is brought into almost 
 as close contact as neighbors across the street. 
 By their use the exchange of the commodities 
 of one country for those of another is effected 
 and only the balance is remitted in the metal 
 used as money. The New York merchant 
 who buys goods in London does not send over 
 money to pay for them. He buys a bill of 
 exchange against some wheat, or cotton or 
 meat or other property, or against securities, 
 that London merchants have bought here, and 
 remits that, and the one property is exchanged 
 for the other. Commerce furnishes its own 
 more convenient currency of this sort to the 
 extent to which the commodities exchanged 
 balance each other, and falls back upon metallic 
 merchandize, metal currency, only to eke out 
 the deficiency on the side which has least of 
 other things to sell. And this use of a purely 
 commercial currency, the instrument of credit 
 
 3 
 
36 
 
 for things sold, increases in volume and efh- 
 cienc}^ with increased volume and variety of 
 product, with every increased facility for 
 intercommunication and every improvement in 
 the machinery of commerce. And what is 
 true as between nations is equally true as 
 between communities in our own country. 
 The transfer of money' as currency from one 
 commercial center to another is generally 
 limited to the adjustment of balances. Bank 
 bills, checks, and drafts against goods or pro¬ 
 ducts sold furnish the main currency of daily 
 domestic commerce, and even very largely and 
 increasingly for retail trade and all personal 
 uses. So conveniently and cheaply does this 
 sort of currency serve the needs of business 
 that so long as it is in good credit, securely 
 based upon and a good title deed to the re¬ 
 quisite property, it is preferred in use above 
 the best metal. And so common is its use 
 in place of money that in popular apprehension 
 and speech it stands for money; and to borrow 
 money no longer means borrowing the coin 
 itself, but the commercial currency, the use of 
 a commercial credit for the required amount. 
 Perhaps no small part of the confusion of 
 ideas about money arises from the fact that 
 the great bulk of the business of the civilized 
 world, its commerce and its financial trans- 
 
37 
 
 actions, is effected through the use of this 
 purely commercial currency. And using its 
 many forms so constantly as money, speaking 
 of them as money, borrowing and paying them 
 as money, seeing them while in good credit 
 perform so admirably the currency office of 
 money, and seeing money itself perform no 
 other visible office than that of currency, men 
 often fail to discriminate the final test of money, 
 its measuring ability; and forget that while 
 all money is currency not all currency can 
 be raised to the rank of full money ; the law 
 may decree it; the world will not so use it. 
 
 The inconvenience and cost of silver in 
 use as currency would be greatly intensified 
 by the adjustment of its coinage to its true 
 present ratio to gold necessarily implied in the 
 idea of a double standard, increasing the bulk 
 and weight of coins fully two-thirds, with the 
 certainty of future readjustments in the same 
 direction. In which connection it may be 
 said, that if it were true that the government 
 fiat settled the, commercial rank and the pur¬ 
 chasing power of legal tender money, the 
 obviously true way to make silver coins a con¬ 
 venient currency and superior money would be 
 by such legislative reduction of the coinage 
 ratio as would make the silver pieces at least 
 no larger than those of gold of like denomina- 
 
33 
 
 tion. That would be equality by legislation. 
 The further scaling down of either or both 
 gold and silver pieces without impairing their 
 purchasing power would be equally within 
 legislative competency. 
 
 To sum up what we have been trying to 
 say : 
 
 Let but the people clearly understand these 
 plain necessary facts of human life : that prop¬ 
 erty sells only for other property, and that 
 nothing but property can buy other property 
 and that therefore money must be property: 
 that while all merchantable commodities and 
 the credits against them are in effect currency, 
 nothing but the commodity most desired and 
 most acceptable of all and most readily ex¬ 
 changeable for all will or can measure the 
 values of all the rest and be in fact the final, 
 standard money; that no credit currency is 
 good for anything except as it is a good and 
 satisfactory title deed to the property it 
 promises to deliver: that the principal currency 
 function of any money is to settle balances in 
 the exchange of other commodities; that the 
 great world of commerce uses and will use as 
 its money only the best money; that we, as a 
 part of that world, must have our values meas¬ 
 ured in its money whether we will or no; that 
 we must use its money as our money or pay 
 
39 
 
 the continual loss and cost of using a poorer 
 one; and that our only power of choice is not 
 as to what money we will have all ' our values 
 measured in and use to settle our balances 
 with, but only as to what we will use as the 
 , basis of our purely domestic currency; that 
 the best money is the cheapest because most 
 effective at least cost; and lastly, that no mat¬ 
 ter how abundant anything we may call money 
 may be, so long as it is worth anything it 
 cannot be had except by giving for it its full 
 commercial value in some sort of property 
 or service; and that in no way can that 
 money get for its possessor more than its 
 commercial value entitles it to: let but these 
 simple facts be clearly seized, and the idea 
 of a double standard, of two measures that 
 cannot but measure differently, of an inferior 
 and unacceptable thing to do identical work 
 with the superior and acceptable thing, of 
 using as a concurrent and indistinguishable 
 measure fluctuating silver which has got to 
 be first measured itself in gold always and 
 everywhere and buy only by that measure, 
 will drop from the category of political prob¬ 
 lems and commerce will be left to deal with 
 its own instruments according to its exigencies 
 and according to both their potencies and their 
 limitations.