Columbia ZLlnibersitu intt)e®upoflrt»2 l,rfe LI B RARY THE SELIGMAN LIBRARY OF ECONOMICS PURCHASED BY THE UNIVERSITY 1929 j l«7 C 1 / THE USE AND ABUSE OF SILVER AS MONEY. remarks OK HON. ABRAM S. HEWITT, OF NEW YORK, IN TIIK HOUSE OF REPRESENTATIVES, AUGUST 5, 1876. Who cliooseth me shall got as much as he deserve a .—Merchant of Venice. A * Washington. 1 67 G. -j e (lOfv^an A K EMARKS OF HON. ABRAM S. HEWITT. The House having under consideration the concurrent resolution re Committee on Hanking and Currency to create a commission to consu upon the question of the remonetization of silver- ported by the ler and report Mr. HEWITT, of New York, said: Mr. Spbaker : The discussion has taken a wider range than the provisions of the concurrent resolution reported by the Committee on Banking and Currency would seem to warrant, and has in fact ex¬ tended to the merits of the bill reported some days Rince by the Com¬ mittee on Mines and Mining, entitled “A bill to utilize the product of gold and silver mines, and for other purposes.” This extraordinary bill, extraordinary in the nature of its provisions as well as the source from which it comes before the House, contemplates the fol¬ lowing ends: 1. That the United States shall purchase all the gold and silver bull¬ ion which may be brought to its mints and assay offices and pay for the same in the coin-notes of the United States for gold at the rate of $1 for 25.8 grains, and for silver at the rate of $1 for 412.8 grains. 2. It directs the coinage of silver dollars, not now' known to the law', weighing 412.8 grains each of standard silver. 3. It provides that the coin-notes so issued shall be receivable with¬ out limit for all dues to the United States, and that the silver dollars so coined shall be a legal tender for all debts, public and private, not specilied to be paid in gold coin. 4. For the redemption of these coin-notes a fund equal to 75 per cent, of the amount outstanding shall alw'ays be kept on hand in the public depositories of the United States. The arguments which have been presented in favor of this measure appear to be as follows : 1. That the act of February 10,1873, by which the silver dollar was demonetized was passed surreptitiously, and that Congress was pur¬ posely kept in the dark as to its real nature and the effect of its pro¬ visions. In other words, that Congress did not intend to demonetize the silver dollar and that the bill could not have been passed if it had been understood that no more silver dollars could be coined after its passage. 2. That Congress has the right to restore the coin of the same weight and fineness as it contained prior to 1873, and to use it as a legal tend¬ er for the payment of all debts contracted prior to that date not spe¬ cifically payable in gold coin. 3. That the debtor class in this country, now' suffering from the op¬ pression of the creditor class, will thereby be greatly relieved, because debts can be discharged in a less costly medium than that now re- * quired by law, to wit, legal-tender notes or gold coin. 4 4 . That the burden of the public debt of the United States and of the several States and municipalities,now too heavy to be borne, will bo greatly lessened, and industry, being thus relieved from taxation, will again become active and labor will be fully employed and better paid. 5. That the price of silver will be raised in consequence of the en¬ larged field for its use and a better market secured for one of the lead¬ ing products of the American soil. BBM0X8TRAXCE OF THE CHAHBBB OF COMMKKCK.| Against this bill I am charged by the Chamber of Commerce of the City of New York “to remonstrate in its behalf as unjustly and need¬ lessly permitting the payment at par of more than $11,000,000,000 of public and private debts by silver coin now depreciated in market at least 18 per cent, and liable, to still further fluctuation and depression. Of this debt more than two thousand millions exist in the accumulated savings of many years invested in policies on lives, the holders of which will be despoiled of the 18 per cent, being three hundred and sixty millions. The holders of mortgages on property in all parts of the United States for at least $5,000,000,000, and many of them ill able to bear the loss, will lose their 18 per cent., being at least nine hun¬ dred millions. All these immense sums extracted from suffering in¬ dividuals are bestowed by the bill on t he debtors, without any equiv¬ alent justification or any public gain whatever.” In submitting this remonstrance, let me say that in my judgment it does not overstate the injury which will be inflicted upon the cred¬ itor class of the country, who are never supposed to be its enemies until after they have parted with their money, and for whose advent our fellow-citizens in the South and West are anxiously waiting, when they tell us that more capital is needed for the development of their great natural resources. But if there were any doubt upon the subject, the source from which the remoustrance emanates should lay the doubt at rest. For more than a century the Chamber of Com¬ merce has been a recognized authority upon all questions pertaining to exchanges and finance. It is composed uow, as it always has been, of the leading merchants, bankers, and manufacturers of the city of Now York. It numbers over seven hundred members, whose occupation, training, and inter¬ ests have necessarily made them familiar with the laws of trade and the delicate elements which affect credit, public and private. They become thus not merely experts, so to speak, in all matters of finance, but they are to a large extent the jealous guardians of commercial honor, which lies at the foundation of the national prosperity. Their voice is entitled, therefore, to great weight, greater possibly than the report even of a committee of this House, whose duty under the rules is not to consider questions of finauce at all, but is strictly limited “to- consider all subjects relating to mines and mining,that may be re¬ ferred to them, and to report their opinion thereon, together with such propositions relative thereto as may seem to them expedient.” (Rule Let me say right here, as the chairman of the committee has com¬ plained that the bill has been resisted by tactics commonly known as filibustering, he has no just ground of complaint when he reflects that when the Committee on Mines and Mining undertakes to deal with the question of what shall be the legal tender for the payment of debts, a subject entirely foreign under the rules to its domain, as-_ foreign as the tariff question, it sets an example of improper use of .t. /.on f'lirlv and indeed only 1)8 met l>y fiiicli oppoE^il ruIes of tl,e House ’ lld ° l)t0d t0 IU ° 0t j'tTt' rehml'to the remonstrance, to the serious allegations of of°Iudia umler Warren Hastings, and which renders ridiculous the sum-total of the extravagant expendituresoft lie last eight years, upon tbo investigation of which this House and its committees have ex¬ pended their energies during the present Bession of Congress. Ol’KItATlOX OS THE BT.AXD BIU. Let me explain, although it ought to be clear without even a word, of explanation, the process by which this spoliation will be accom¬ plished. As the law now stands, all existing contracts for the pay¬ ment of money must bo discharged either in gold coin or in legal- tender notes. ‘Now this bill proposes to make silver a legal tender for the payment of debts in all cases where the word coin or dollars is used, in all public and private contracts at the rate of 412.8 grains standard silver to the dollar, the value of which at fifty pence per ounce, the quotation of to-day, is 84.8 cents. Under the pledge of the act of 1869 the legal-tender notes of the United States are redeem¬ able in coin, which all the world has heretofore taken to mean gold coin, and their market value has been and is to-day fixed with refer¬ ence to redemption in gold coin. With gold at a premium of Ilf, these notes are worth 89.8 cents to the dollar; but if they are to bo redeemed in silver coin, worth only 84.8 cents to the dollar, they will necessarily fall to the same discount with reference to the value of silver as they now occupy with reference to gold ; in other words, they will be worth 73.1 instead of 84.8 cents in gold. The result is, therefore, that on all money contracts, whether payable in coin or in paper, there would be an immediate confiscation of the property of the creditor by act of Congress of 13 per cent, of his just claim. In the aggregate this would amount to a transfer, so far as the act of Congress could have any effect, from the creditor to the debtor class of a sum greater than the entire debt of the United States. The advocates of the hill admit, that this is one of the objects which they have in view. They call it “ relief to the debtor class.” They forget, however, that the laws of nature cannot be reversed by acts of Congress. It is true that the bill will authorize the debtor to dis¬ charge his debt with a less valuable commodity than was intended for its discharge at the time the contract was made, Imt no act of Con¬ gress short of a general division of property or an utter cancellation of indebtedness can endow the debtor with the means of payment. Ilo may indeed have a property which, in the present condition of things, would sell for enough to discharge his debt and leave him a surplus. But if this bill be passed, this margin and surplus would disappear with the same rapidity as the golden hues of the clouds after the sun passes below the horizon. In the face of the proposition dobnr fi f C f at0 15 p0r of f U the i,1 '/° re r. eapI n 1 wo, ! ld b® withdrawn from the country as rap 7 f * S ld co , llect , ed > and the steamships could remove it in i rm 0f r!, er ' ld vaIuo - Every dollar of American capital that could be controlled would in like manner be remitted to foreign countries for safe-keeping or would be hoarded in the secret recesses to which confidence betakes itself in time of spoliation. There would be a universal collection of debts and a universal fall in values, re¬ sulting in a general transfer of the properties of the debtors to the creditors in final liquidation of the debt. The country would be one scene of indiscriminate ruin and desolation; the condition of the people would be intolerable, and their just indignation would be visited upon every man and upon any political party who had any part or lot in bringing upon the beads of the people such an irre¬ parable and overwhelming disaster. Now, let me call the attention of this House to the classes in the community upon whom first would fall the weight of this mon¬ strous iniquity. Of the debt that would be confiscated, more than two thousand millions are in the form of accumulations to meet policies of life insurance. Need I ask this House whether it is the rich or the poor to whom these policies have been issued ? We all know that it is the professional man, the clerk, the tradesman, who, earning their living from day to day, endeavor thus to provide for their families when the sustaining and the laboring hand is at length laid low in the grave. Thus, then, it is that the bill proposes to de¬ spoil the desolate widows and the helpless orphans of §300,000,000 of that fund, vast in the aggregate,but limited in each individual case, which society has slowly and patiently accumulated as the barrier against suffering and want for the widows and orphans of the nation. Again, it is estimated that there were $5,000,000,000 invested in bond and mortgage, of which this bill will confiscate $900,000,000. Now, who are the largo holders of these mortgages? Not the rich mainly, butthesavings-banks, who hold in trustthescantyeamingsof thepoor. Upon the day-laborer, upon the industrious servant girl, upon the frugal mechanic, therefore, will fall this unparalleled and incredible loss of the means accumulated against a rainy day. This expected but fallacious “relief to the debtor” therefore would be at the expense of those who. too poor to get in debt, have with the patient industry which characterizes honest labor and humble station, accumulated a provision against the ills of life, the decay of old ago, and the dreaded refuge of the poor-house. It is the old story of the poor sacrificed to the demands of the needy speculator and the grasp¬ ing adventurer. The only protection against such robbery and such disaster lies in the good sense and solid integrity of the American peo¬ ple, who have only to be made acquainted with the effects of this legislation to set upon it the seal of their just condemnation. Now let us examine the grounds upon which this monstrous propo¬ sition is sought to be justified. We are told that prior to 1873 it was the right of the Government and of private individuals to discharge their debts cither in gold or silver at the option of the debtor, and that this right was taken away without their knowledge and consent, iu fact by covert legislation, the effect of which was not intended or appreciated by the Cougress which enacted it. The gentleman from Missouri [Mr. Bland] ou the 3d instant stated that the coinage act of 1873 “was passed surreptitiously and without discussion, anu was one of the grossest measures of injustice ever in¬ flicted upon any people.” The honorable Senator from Nevada [Mr. Junks] and the honorable gentleman from Indiana [Mr. Hoi.man] have made similar statements, and these statements have been re¬ iterated by the press of the country and repeated agaiu to-day by the gentleman from Missouri [Mr. Bland] and the gentleman from Illi- 7 noia, [Mr. Fort.] In auswer to these chargos I propose, at the risk of being tedious, but in order to refute them once for all, to give, in a foot note the history of the coinage act of 1873, as shown by the records of the Treasury Department and of Congress. I have felt it necessary to make this weary statement in order to prove that the legislation of 1873 was not surreptitiously enacted, traveling over ground that has been occupied in part by other mem¬ bers who have addressed the House, and in part by the daily press, because there is nothing so unpalatable to the American people as “tricks” in legislation, of which the Committee on Mines and Min¬ ing will be fully conscious when it comes to be generally understood how far they have exceeded the legitimate line of their duty in bring¬ ing forward this bill, which could never have been reported from the Committee on Banking aiid Currency, to which it properly belonged. Note.— On April 25, 1870, the Secretary of the Treasury transmit¬ ted the following letter to Hon. John Sherman, chairman of the Finance Committee of the Senate : Treasury Department, April 25,1870. Sir: I have tho honor to transmit herewith a bill revising the laws relative to the Mint, assay offices, ami coinage of the United States, and accompanying re¬ port. The bill has been prepared under the supervision of John Jay Knox, dep¬ uty comptroller of the currency, and its passage is recommended in the form pre¬ sented. It includes, in a condensed form, all the important legislation upon the coinage, not now obsolete, since the first mint was established, in 1792; and the report gives a concise statement of the various amendments proposed to existing laws and the necessity for the change recommended. There has been no revision of the laws pertaining to the Mint and coinage since 1837, and it is believed that the passage of the inclosed bill will conduce greatly to the efficiency and economy of tfiis important branch of the Government service. I am, very respectfully, your obedient servant, GEO. S. BOUTWEI.U, Secretary of the Treasury. The report and the bill were referred on April 28, 1870, to the Fi¬ nance Committee of the Senate, and subsequently, on May 2, 1870, live hundred additional copies were ordered to be printed for the use of the Treasury Department. The report says: The method adopted in the preparation of the bill was first to arrange in as con¬ cise a form as possible the laws now in existence upon these subjects, with such ad¬ ditional sections and suggestions as seemed valuable. Having accomplished this, the bill, as thus prepared, was printed upon paper witli wide margin, and in this form transmitted to the different mints and assay offices, to the First Comptroller, the Treasurer, the Solicitor, the First Auditor, and to such other gentlemen as are known to be intelligent upon metallurgical ami uumisnmtical subjects, with the request that the printed bill should be returned with such note's and sugges¬ tions as experience and education should dictate. In this way the views of more than thirty gentlemen who are conversant with the manipulation of metals, the manufacture of coinage, the execution of the present laws relative thereto, the method of keeping accounts, and of making returns to the Department, have been obtained with but little expense to the Department and little inconvenience to cor¬ respondents. Having received these suggestions, the present bill has been framed, and is believed to comprise within the compass of eight or ten pages of the Revised Statutes every important provision contain d in more than sixty different enact¬ ments upon the Mint, assay offices, and coinage of the United States, which are the result of nearly eighty years of legislation upon these subjects. The amendments proposed by the bill were as follows: PROPOSED AMENDMENTS. The new features of the bill now submitted are chiefly: the establishment of a Mint Bureau at the Treasury Department, which shall also have charge of the col¬ lection of statistics relative to the precious metals; the consolidation of the office of superintendent with that, of the Treasurer, thus abolishing the latter office, and disconnecting the Mint entirely from the office of assistant treasurer; the repeal of the coinage charge, and authorizing the exchange of imparted for refined bars; a 8 POWER OK CONGRESS TO REMONETIZE SILVER. But admitting that there was nothing underhand in the legislation of 187:}, it will be asked whether it is not true that prior to that date debts might have been discharged in silver dollars weighing 412.5 grains; and, if so, have we not a legal aud moral right to restore the dollar to circulation in order that debts contracted prior to that date may be paid iu such dollars! To this question I reply that certainly prior to the passage of the law of 1873 debts might have been paid in such silver dollars, but now we have neither the legal nor the moral right to pay debts in silver dollars worth less than the value of the standard gold dollar, which is now the sole unit of value. We have an un¬ doubted right, to remonetize the silver dollar, and it may he wise to y tho grain instead of by tho gram. Tho in¬ trinsic value of each is to ho stamped' upon the coin. Tho Chamber of Commerco of Now York recommended this change, and it has been adopted, I believe, by all the learned societies who have given attention to coinage, and has been recom¬ mended to us, I believe, as the general desire. That is embodied in these three or four sections of amendment to make our silver coinage correspond in exact form and dimensions and shape and stamp with the coinage of the associated nations of Europe, who have adopted an international silver coinage. (Page 672, volume 106, third session Forty-second Congress.) The bill was scut to the House, and on January 21, 1873, on motion of Mr. Hooper, it was again printed with amendments, and subse¬ quently committees of conference were appointed, consisting of Messrs. Hooper, Houghton, and McNeel.v of the House, and Senators Sherman, Scott, and Bayard of the Senate. The reports of tho committees of conference were agreed to, and tho bill became a law on February 12, 1873, substantially as originally prepared at the Treasury. The bill as prepared at the Treasury omitted the silver-dollar piece, and the report stated the fact of its omission three different times' and gave the reasons therefor. The silver-dollar piece was omitted from tho hill as it lirst passed tho Senate. It was also omitted from the bills reported by Sir. Kelley; but in the hills reported by Sir. Hooper a new silver dollar was proposed equal in weight (384 grains) to two of the half dollars then authorized. Tho Senate substituted a trade-dollar weighing 420 grains in place of the dollar of 384 grains, in accordance with the wishes of the dealers in bullion upon the Pacific coast, that being considered by them as the most advantageous weight for a coin to be used for shipment to China and Japan. The weight of the subsidiary silver coin was increased about 4 per cent, in value, making tho half dollar, quarter dollar, and dime, respectively, of the weight of 12£ grams, (>£ grams, and 2£ grams, or precisely one-half, one-quarter, and one-tenth, respectively, of tho weight of the French tive-franc piece. All of said coins were made a legal tender in nominal value for any amount not exceeding^ in any one payment. The bill was read in full in the Senate several times, and the record states on January 9,1872, that it was read in the House. It was undoubtedly read at other times. The bill was printed separ¬ ately eleven times and twice in reports made by the deputy comptrol¬ ler of the currency, thirteen times in all by order of Congress. It was 15 predation of silver. We could only have called them in and re placed them with new dollars containing the necessary additional silver to have restored them to their equivalency with the gold dol¬ lar. The loss of this operation would have been insignificant, com¬ pared with the stupendous losses which would otherwise have occurred in the settlement of existing indebtedness. This doctrine of equivalency must prevail in all countries main¬ taining the double standard, which cannot exist without it, and in practice does not long exist anywhere, because it involves too fre¬ quent changes in the weight of coins. The cessation of the coinage of silver by Switzerland and its limitation by the Latin Union is a practical abandonment of tho double standard for the time being, and its restoration cannot be safely attempted until the relation be¬ tween the value of gold and silver shall have once more become stable. considered at length by the Finance Committee of the Senate and the Coinage Committee of the House during five different sessions, and tho debates upon the bill in the Senate occupied sixty-six columns of tho Globe and in the House seventy-eight columns of the Globe. The Secretary of the Treasury called the special attention of Con¬ gress to tho bill in his annual reports for 1870,1871, and 1872. In his report of 1872, he says: In the last, ten years the commercial value of silver has depreciated about 3 per cent, as compared with gold, and its use as a currency has been discontinued by Germany and by some other countries. Tho financial condition of the United States has prevented the use of silver as currency for more than ten y<-ars, and 1 am of opinion that ui>on grounds of public policy no attempt should bo made to introduce it, but that the coinage should be limited to commercial purposes, and designed exclusively for commercial uses with other nations. The intrinsic value of a metallic currency should correspond to its commercial value, or metal should be used for the coinage of tokens redeemable by tho Gov¬ ernment at their nominal value. As the depreciation of silver is likely to con¬ tinue, it is impossible to issue coin redeemable iu gold without ultimate loss to tho Government; for when the difference becomes considerable the holders will pre¬ sent tho silver for redemption and leave it in the hands of the Government, to be disposed of subsequently at a loss. Therefore, in renewing the recommendations heretofore made for the passago of tho mint bill. I suggest such alterations as will prohibit the coinage of xilver for cir¬ culation in thin country , but that authority be given for the coinage of a silver dol¬ lar that shall be as valuable as the Mexican dollar, and to bo furnished at its actual cost. As a final answer to tho charge that tho bill was passed surrepti¬ tiously, I append, first, a copy of tho section in reference to the issue of silver coins as printed in the report of the Treasury Department, and as passed by the Senate; second, a copy of the section as reported by Mr. Kelley; third, a copy of the section as reported by Mr. Hooper; fourth, a copy of the section as finally passed by the Senate and agreed upon by the conference committee. The following section was printed in the two reports of John Jay Knox, deputy comptroller of the currency, to Congress; also in Sen¬ ate bill 859, Forty-first Congress, second session, April 28, 1870; in Senate bill 859, December 19, 1870, and January 11, 1871, third ses¬ sion, Forty-first Congress, as reported by Mr. Sherman : Src. 15. And be it further enacted, That of the silver coins, the weight of tho half dollar, or piece of fifty cents, shall bo 192 grains; and that of the quarter dollar and dime shall be, respectively, one-half ana one-fifth of the weight of said half dol¬ lars: that tho silver coin issued in conformity with the above section shall bo a legal tender in any one payment of debts for all sums loss than |1. The following section was printed in Senate bill 859, Forty-first Congress, third session, February 25, 1371; and House bill No. 5, 16 HISTOItr OP AMEHI .'AN COt.VAOE. The money history of the United States has been in strict accord¬ ance with this doctrine. At the foundation of the Government the dollar in use was the standard Spanish milled dollar. All contracts for hard money were payable in these dollars. In order that no in¬ justice might be done to debtors or creditors it was necessary to de¬ termine the quantity of silver contained in these dollars. Hamilton undertook the task, and after an elaborate in vestigation, including care¬ ful assays of average specimens, fixed upon 37If grains of pure silver as the standard value. This formed the basis of our system of coinage. Ho next determined the equivalent in gold at its then market value of 371f grains of silver, and fixed it at 27 grains. Owing to an error in the calculation the gold was slightly undervalued, and never, therefore, came into use, but the cheaper medium, the silver dollar, was the actual standard of value. This was the era of the silver dollar, and it continued to be the sole medium of legal tender in use until 1834. At that time the best financial minds of the country, such as Gallatin, Ingham, and others, came to the conclusion that the interests of the nation required that gold should be brought into cir¬ culation. It was a legal tender but it did not circulate, because it was undervalued. For that reason the owner of gold bullion did not bring it to the Mint to be coined. And just here it will be well, Mr. Speaker, to call the attention of the House to the true functions of the Mint as at that time pre¬ scribed by law. These functions have been largely overlooked, Forty-second Congress, first session, March 9, 1871, as reported by Mr. Kellf.y : Sec. 15. And be it further enacted. That of the silver coius, the weight, of the half dollar, or piece of fifty cents, shall bo Uh2 grains; and the quarter dollar and dime shall be, respectively, one-half and ono-tifth of the weight of said half dollar; which coins shall boa legal tender, at their denominational value, for any amount not exceeding $5 in any one payment. The following section was printed in House bill No. 2934, May 29, 1872; House bill No. 1427, February 9, 1872, and February 13, 1872, Forty-second Congress, second session, as reported by Mr. Hooper: Skc. 1C. That the silver coins of the United States shall be a dollar, a half dol¬ lar or ilfty-cent piece, a quarter dollar or twenty-fivo-ceut piece, and a dime or ten- cent piece; and the weight of tho dollar shall bo 384 grains ; the half dollar, quar¬ ter dollar, and the dime shall bo. respectively, one-half, one-quarter, and one-tenth of the weight of said dollar; which coins shall bo a legal tender, at their denomina¬ tional value, for any amount not exceeding $5 in any ouo payment. The following section was printed in House bill No. 2934, December 1G, 1872, January 7, 1873, and January 21, 1873, Forty-second Congress, third session, as reported by Mr. Sherman: That the silver coins of tho United States shall be a tradc-dollar, a half dollar or flfty-cont piece, a quarter dollar or twenty-five-contpiece, a dime or ten-cent piece; and the weight of the tradc-dollar shall bo 420 grains troy; tho weight of the half dollar shall be 12$ grains; the quarter dollar and the dlino shall he, respectively, one-half ami ono-tifth of the weight of said half dollar; and said coins shall he a legal tender at their nominal value for any amount not exceeding $5 in any ouo payment. Tho following section was contained in all of tho different hills and the coinage act of 1873: Sec. 18. And be it further enacted , That no coins, either of gold, silver, or minor coinage, shall hereafter ho issued from the Mint other than those of tho denomina¬ tions, standards, and weights herein set forth. Copies of the different hills may he obtained at tho document-room of the Senate. 17 forgotten, and misunderstood in the confusion which has crown of the substitution of legal-tender paper money for cold and Anin. The Mint of the United States was never an institution in which the Government manufactured money on its own account and sup¬ plied it to the public at a profit. It was merely a factory, to which citizens brought their bullion and plate and had it converted into coin or money at a fixed charge, which sufficed merely to cover the cost of the operation. The stamp of the Government was merely a certificate of value, and no more, impressed by the Government upon the property 'of the citizen. The Government did not buy the bull¬ ion and sell the com, it merely received the bullion, stamped it, and returned it to its lawful owner, llenco new light is thrown upon that provision of the Constitution which requires Congress “to coin money and regulate the value thereof,” for it was the property of individuals which was to bo coined and the value of which was to be regulated by the Government, which had no other iuterest or duty but to impress upon it the true and not a fictitious value. Now, as the value which the law required the Mint to stamp upon gold was less than its commercial value, no gold was brought to the Mint to bo stamped. The commerce of the world, and especially of the most progressive nations, such as England and Holland, was mainly carried on in gold. All bills of exchange settled in London and Amsterdam, the principal financial marts of the world, were pay¬ able in gold. Our own commerce was then in a rapid state of devel¬ opment, and our statesmen perceived that we needed a gold unit of value for its lubrication and growth. What did they do f They let silver alone, because it was the existing unit of value in all contracts. To change it would work injustice to debtors and creditors alike. They therefore brought the weight of the gold dollar down to the value of the silver dollar, and, in order to make it circulate, a bare trifle below it. Thus they did exact justice to debtors and creditors, or rather so little injustice that its effect was imperceptible and of no consequence compared with the advantages of securing the circula¬ tion and establishment of a gold uuit of value in harmony with the currency of the nations with whom we had large commercial relations. Thus and then ceased the first or silver era and began the second or golden era of the American coinage. Silver dollars slowly but Burely disappeared from circulation, because they were slightly un¬ dervalued as coin, and it paid to export them or melt them up. The gold dollar weighing 25.8 grains took the place of the silver dollar, and from 1837 until the passage of the paper legal-tender act in 1862 gold dollars were the solo "unit of value in the United States. Al¬ though gold and silver dollars were equally a legal tender for the payment of debts, in fact for more than a generation, nearly forty years, gold only was the metal in use for payments exceeding §1; and -when the legal-tender act was passed the value of the notes issued under it was referred to the standard of gold, and gold only. This was still the case in 1873, when the silver dollar was demonetized. No one referred to silver as the standard of value, because the silver dollar was then more valuable than the gold dollar, being worth §1.03, and had not been in use for forty years. Hence in the revision of the coinage laws it was treated, and properly so, as an obsolete coin, which had not been in use for a generation, and which in the ordi¬ nary course of things would never come into use again. No one de¬ sired it for the payment of debts, for all debts had in effect been contracted on the basis of the gold dollar, and no one expected either 2 II* 18 to receive or give anything else in payment where coin was to be paid. The abolition therefore of the silver dollar in 1873 did no injus¬ tice to any human being; and even if the allegation were true, as I have shown it not to be, that it was done iu the dark, it was a deed by which no one was injured and no existing right impaired. EQUrVALEXCY OF VALUE. It is now demanded that the silver dollar be restored; and let. it be conceded for the sake of argument, as mav possibly be found to be the fact, that it is expedient to yield to this demand. Upon what, basis of value shall it be restored ? How many grains of silver shall it contain? The Committee on Mines and Mining say 412.8 grains, w'orth with silver at fifty and three-fourths per ounce about eighty- four cents in gold. Lot it be noted that the old silver dollar only contained 412.5 grains, so that the committee do not adhere to it. Why do they make any change if they plant themselves on the old silver dollar? The Constitution says that Congress shall “ coin money and regulate the value thereof.” They propose to make a new coin, a dollar which does not now exist and as reported by them never known to the law. They must regulate its value. They cannot shut their eyes to this duty. They cannot shirk it. They must regulate its value. By what standard? There is but one standard of value in existence,*w’hich is the gold dollar or unit of value. The new coin or silver dollar must therefore be regulated by the gold dollar now in use, and with reference to it alone, for there is no other stand¬ ard or unit of value known to the law. No act of Congress can make 412.8 grains of silver worth a dollar in gold when a dollar in gold will purchase, as it can to-day, 480 grains of silver in the open market. If Congress should attempt to do this in the face of large purchases daily made by the Director of the Mint at tho rate of 480 grains to the dollar, the Supremo Court of the United States would bo bound to hold that Congress had not regulated the value of the now coin, but had given it a false value, and violated the express provisions of the Constitution. This much is clear; but whether tho Supreme Court might not go further and decide that in making this silver dollar a legal tender for the payment of debts, except to and from the Govern¬ ment, Congress had exceeded its authority, I am not tho person to venture an opinion; but I can find no authority in the Constitution for such legislation. Having thus, as I believe, clearly demonstrated that Congress has no legal right to make a creditor receive 412.8 grains of silver in lien of a gold dollar which will purchase 4S0,grains, it seems to mo quite superfluous to attempt to show that it has no moral right to do so. A man may voluntarily take less than he is entitled to, but to force him to receive less than his money would purchase in open markot is a manifest wrong which requires noelucidation. No wrong was done to the debtor in 1873 by the abolition of the silver dollar then worth more than the gold dollar, and which had not been in use within tho existence of the present generation. All that it did was to take away the unexpected and unseen possibility of paying the creditor in less value than either party expected or in reality contracted to pay. The operation of a law which would make 412.8 grains of silver a legal dollar cannot be better illustrated than by following through the purchase of silver by the Director of the Mint for the manufact¬ ure of subsidiary coin under the recent legislation of Congress. The Government sells one million of 5 per cent, bonds for par in gold. This gold is sold for legal-tender notes at a premium of 12 per cent. 19 and produces 61,112,000 in greenbacks. These purchase, with silver at fifty and three-quarter pence per ounce, about $1,200,000 in standard silver. Now, suppose the seller of the silver to have kept his legal- tender notes on deposit until after the passage of the proposed bill: tho notes will then be payable in silver instead of gold, but as they are not at present redeemable in anything, they will fall to a discount as compared with silver equal to the present discount as compared with gold; that is, about 12 per cent. The seller of the silver would therefore be able with his greenbacks to purchase only $1,000,000 of silver to replace the proceeds of the $1,200,000 which lie had sold to the Government shortly before, thus losing two hundred thousand dollars’ worth of silver by act of Congress, and without any fault of his own, except the belief, which he has shared with all the world, that the legal-tender notes would bo redeemed in gold and not In silver. rERTUItllATIOXS IX Till! VALUE OK SILVER. If, therefore, we legislate upon this subject at all, we are bound by the express directions of the Constitution, as well as by the dictates of common honesty, to adopt the true and not a falso ratio of value between the two metals. But who can tell what is the true ratio f To-day silver is selling at 51 rf. per ounce, and a week ago it was selling at 46fd. per ounce. On the 16tli of March last, when I had tho honor to address tho House upon this subject, the price was 53d. per ounce. In the month of January last it was 56 }d. per ounce, and the extreme low point which it has reached in 1876 is 18 per cent, below the average value of 1875. These perturbations can only bo compared to tho variations of the thermometer dur¬ ing the last week. This, then, is a time when no man of wisdom in monetary affairs can determine the true ratio of value between gold and silver, as required by the Constitution. It is therefore a time absolutely unsuitable for legislation upon this subject. It is an epoch of perturbation in the price of silver more marked than has ever before occurred in the history of the precious metals. In the long period of time for which we have authentic data, from 1687 to 1872, the variations in the relative value of gold and silver were be¬ tween 14.74 and 15.83; and during our whole political history of one hundred years the ratio ranged between 15 and 16 until the present year, when the range has been between 16 and 20, involving a fall of 18 per cent, in the value of silver in a single year. Now, where is the man who can tell us whether silver is going up or going down relatively to gold? Who can tell us whether the present ratio is likely to be permanent or whether there is to be a sudden rise in tho value of silver or a fall still greater than that which has occurred f Who can determine the duration of the causes which have produced this fall ? First of these comes the yield of the American silver- mines, now estimated at $40,000,000 yearly, and there is every reason to believe that tho product of the American mines will steadily in¬ crease. Tho second cause, the demonetization of silver begun in Ger¬ many, will have spent its force when the stock of silver on hand in that country shall have been disposed of. And this is a striking evi¬ dence of the sensitiveness of the market for silver, that the attempt to sell so small an amount as $40,000,000, not more than the product of the American mines for a single year, should cause a fall in the price of silver in London of from five to eight pence per ounce. The third agency producing the fall in the valueof silver is the present apparent saturation of India and China with that material; in other words, those countries no longer absorb the surplus silverof the world. Now 20 who can tell how long these causes will continue to operate ? Even if Germany should relieve itself of its surplus silver, what policy will the Latin Union adopt in regard to their silver ? THE DOUBLE STANDARD. The whole course of commerce points to the adoption of the single gold standard throughout the civilized world for all purposes except subsidiary coinage. The difficulties in the way of a doublo standard, always serious, would appear to be insuperable in view of the extraordinary fluctuations in the value of silver, and it would be only possible to preserve the double standard by frequent changes in the value of silver coin, involving through its recoinage such confusion in the current business of society that it would become an intolerable nuisance. JS'or would this confusion be abated by the adoption of the silver standard alone. So far as foreign commerce is concerned settlements would have to be made in the gold standard, and the fluctuations of exchange would be aggregated by the daily fluctuations in silver. The views of John Stuart Mill upon this sub¬ ject are so clearly stated, that I do not see how they can be regarded otherwise than jis decisive.* ’§1. Though the qualities necessary to fit any commodity for being used as money aro rarely united in any considerable perfection, there are two commodi¬ ties which possess them in an eminent and nearly an equal degree, the two precious metals, as they are called: gold and silver. Some nations have accordingly at¬ tempted to compose their circulating medium of theso two metals indiscriminately. Tnero is an obvious convenience in making use of the more costly metal for larger payments and the cheaper one for smaller; and the only question relates to the mode in which this can best be done. The mode most frequently adopted has been to establish between the two metals a fixed proportion; to decide, for example, that a gold coin called a sovereign should be equivalent to twenty of the silver coins called shillings; both the one and the other being called, in the ordinary money of account of the country, by the same denomination,a pound; and it being left free to every ono who has a pound to pay, either to pay it in the one metal or in the other. At the time when the valuation of the two metals relatively to each other—say twenty shillings to the sovereign or twenty-one shillings to the guinea—was first mado. the proportion probably corresponded, as nearly as it could bo made to do, with the ordinary relative values of tlio two metals, grounded on their cost of pro¬ duction; and if thoso natural or cost values always continued to bear the same ratio to one another, the arrangement would be unobjectionable. This, however, is far from being the fact. Gold and silver, though the least variable in value of all commodities, are not invariable and do not always vary simultaneously. Silver, for example, was lowered in permanent value more than gold by the discovery of the American mines; and thoso small variations of value which take place occa¬ sionally do not affect both metals alike. Suppose such a variation to take place, the value of the two metals relatively to one another no longer agreeing with their rated proportion, one or the other of them will now be rated below its bullion value and there will be a profit to be made by melting it. Suppose, for example, that gold rises in value relatively to silver, so that the quantity of gold in a sovereign is now worth more than the quantity of silver in twenty shillings. Two consequences will ensue. No debtor will any longer find it his mterest to pay in gold. Ife will always pay in silver, because twenty shill¬ ings aro a legal tender for a debt of one pound, and he can procure silver converti¬ ble into twenty shillings for less gold than that contained in a sovereign. The other consequence will be that unless a sovereign can be sold for more than twenty •hillings all the sovereigns will bo melted, since as bullion they will purchase a greater number of shillings than they exchange for as coin. The converse of all this would happen if silver instead of gold were the metal which had risen in com¬ parative value. A sovereign would not now be worth so much as twenty shillings, and whoever had a pound to pay would prefer paying it by a sovereign ; while the silver coins would be collected for the purpose of being incited and sold as bullion for gold at their real value, that is. above the legal valuation. The money of the community, therefore, would never really consist of both metals, but of the one only which at tlio particular time best suited the interest of debtors; and the standard of the currency would bo constantly liable to change from the ono metal to tlio other, at a loss on each change of the expense of coinage on the metal which fell out of use. 21 WHAT WE ARE ASKED TO DO. I need not tell the House that the question of the value of silver is a disturbing element at the present time, not only in this country, hut throughout Europe; that the fall in value has produced great distress throughout the eastern world, and India is said to be in a state of general bankruptcy in consequence of the inability of debt¬ ors to discharge their obligations even though the money in which they were payable has fallen in value, because capital has taken fright and sternly locks itself up until a calm judgment can bo formed as to a future market for silver. Fortunately the United States have escaped these great evils. Owing to the suspension of specie payments and the demonetization of silver in 1873 we are not forced to deal with the question of the depreciation of our coinage. We are thus relieved from the difficulties which beset England in its Indian Empire, France and the Latin Union in regard to their double standard, and Germany in its effort to establish a single gold stand¬ ard. But the proposition of this bill is that, being free from the em¬ barrassment of the question,we shall deliberately load ourselves down with its difficulties, and by making a market for the surplus silver which has produced all these disastrous consequences, transfer to our¬ selves the burden of the settlement of this difficult problem. And, as I have already shown, we are asked to take all these consequences upon our shoulders without the slightest obligation on our part to do so, and without the possibility of any benefit either to the country or to the producers of silver. It appears, therefore, that the value of money is liable to more frequent fluetua- tious when both metals are a legal-tender at a’flxcd valuation than when the ex¬ clusive standard of the currency is either gold or silver. Instead of being only af¬ fected by variations in the cost of production of one metal, it is subject to derange¬ ment from those of two. The particular kind of variation to which a currency is rendered more liable by having two legal standards is a fall of value, or what is commonly called a depreciation ; since practically that one of the two metals will always be the standard of which the real has fallen below the rated value. If the tendency of the metals be to rise in value, all payments will be made in the on# which has risen the least; and if to fall, then in that which has fallen most. § 2. The plan of a double standard is still occasionally brought forward by here and there a writer or orator as a great improvement in currency. It is prob¬ able that with most of its adherents its chief merit is its tendency to a sort of de¬ preciation. there being at all times abundance of supporters for any mode, either opoD or covert, of lowering the standard. Some, however, are influenced by an ex¬ aggerated estimate of an advantage which to a certain extent is real, that of being able to have recourse for replenishing the circulation, to the united stock of gold and silver in the commercial world, instead of being confined to one of them, w hich, trotn accidental absorption, may not be obtainable w ith sufficient rapidity. The advantage without the disadvantages of a double standard seems to be best obtained by those nations with whom one only of the two metals is a legal tender, but th» other also is coined and allowed to pass for whatever value the market assigns to it. When this plan is adopted, it is naturally the more costly metal which is left to be bought ana sold as an article of commerce. But nations which, like England, adopt the more costly of the two as their standard resort to a different expedient for retaining them both in circulation—namely, to make silver a legal tenner, but only for small pajunents. In England no one can be compelled to receive silver in payment for a larger amount than forty shillings. With this regulation there is necessarily combined another, namely, that silver coin should be rated, in compari¬ son with gold, somewhat above its intrinsic value; that there should not be in twenty shillings as much silver as is worth a sovereign : for if there were a very slight turn of the market in its favor would make it worth more than a sovereign, and it would be profitable to melt the silver coin. The overvaluation of the silver coin creates an inducement to buy silver and send it to the mint to be coined, sine# i t is given back at a higher value than properly belongs to it: this, however, has been guarded against by limiting the quantity of the silver coinage, which is not left like that of gold, to the discretion of individuals, but is determined by the government and restricted to the amount supposed to be required for small pay rnenta. The only precaution necessary is not to put so high a valuation upon the silver as to hold out a strong temptation to private coining.— John Stuart MiU, Principle« of Political Economy, book 2, chapter 10. 22 HOW IT WOULD AFFECT THE GOVEBNMKNT. It is alleged, it is true, that tho effect of the passage of this hill will be to raise the price of silver, and that wo ought to pass it be¬ cause sih'er is a domestic product. This is putting the doctrine of protection to a new use. If silver is to continue to be one of our ex¬ ports, it can be sold abroad at its current commercial value; but it will not go abroad unless we are prepared to sell it at that price. But it is alleged that this bill will command a use for it at home and gradually raise its price here. If this be true, it would surely make a market for the surplus German silver, and all the silver which is now weighing down the markets of the world would simply be poured in upon our market and be sold to the Government at the rate of 412.8 grains to the dollar, when in fact a dollar should purchase 480 grains. Our gold would be thus driven out of the country and every¬ thing of value which could be exchanged for silver would follow the gold, just as happened in Japan under similar conditions, and tho Government would become tho owner of an enormous stock of silver bullion, upon which in fact it would have to pay the interest and levy it in the form of taxes upon the people anil the industries of the country. For the bullion so purchased the coin notes would be issued. These coin notes being receivable for public dues, the Gov- ment would have no revenue except in the shape of coin notes, which it could pay out only in the purchase of bullion, because tho Consti¬ tution confers no authority on the Government to make them legal- tenders from theGovcmment to its creditors, and tho bill before us now does not attempt it. How, then, would the Government meet its cur¬ rent expenses f It must either borrow money by the issue of bonds bearing interest or it would have to sell its accumulated silver which it had purchased at tho rate of 412.8 grains to the dollar at the best price it could get for it in the markets of the world. To-day it might sell it at the rate of 480 grains to the dollar, which would involve a loss of 15 per cent., but inasmuch as there would bo no other market for it except at such rates as would permit its use in the arts, it is manifest that the price would fall very much below the lowest limit which it has yet touched. Nor could any remedy for this embarrass¬ ment be found in increased taxes, for they would bo paid in these coin notes, which could only be used for the purchase of more bullion. The whole proposition, therefore, simply resolves itself into an attempt on the part of the owners of the silver-mines to sell their entire product to the Government of the United States at a price 15 per cent, above its present market value for their own personal profit, with the dead certainty that Government could not resell tho accumulated bullion, not only of our own markets, but of the world, except at a frightful loss, which must be borne by the tax-payers of this country. THE COIX KOTE8 CANNOT CIUCULATK AS MONEY. This proposition is so plain that I am overcome with astonishment at the audacity of its authors, -whoever they may be, and the failure of the Committee on Mines and Mining to comprehend the fatal bearings of the bill which they have reported. But we shall be told that these coin notes would circulate as money and drive out tho legal-tender notes. As no provision is made for tho retirement of the legal-tender notes I cannot see where they would be driven to, and if both classes of notes should, in effect, continue in circulation, the result would be inflation to the extent of the whole amount of tho coin notes issued. But this result is impossible, for the legal-tender notes becoming redeemable in silver instead of gold, and not being 23 payable on demand, would at once fall to a discount upon the price of silver equal to the present discount upon the price of gold. In other words, they would be at a discount of 12 per cent, upon the value of the silver-coin notes. They would therefore be the inferior currency, and, being a legal-tender for the payment of debts, would continue to circulate to tlie exclusion of the coin notes, which would only bo used for the payment of the duties upon imports. The only effect thoy could have would bo to drive out all the gold from the country, because there would bo no longer any use for gold, the du¬ ties being payable in silver, which the Government would bo expected to UBe by the advocates of this bill for the payment of interest upon the public debt. HOW SHALL WK PAY THE NATIONAL DEBT? Thus we are brought face to face with tho proposition that the public debt shall be paid principal and interest in silver coin at the rate of 412.8 grains to the dollar, which has had no existence in law since 1873, and had no existence in fact since 1834. And we deliber¬ ately propose to adopt this mode of payment because silver has fallen below its value at the time of the contract, and we can thereby make a profit at the expense of the national creditors. If the authors of this scheme reflected that it will be at the expense of the national credit; that it will be regarded by the whole civilized world as an act of deliberate robbery; that it will be henceforth impossible to con¬ vert any more of our G per cent. Bonds into new bonds bearing a lower rate of interest ; that on the fourteen hundred millions of debt yet remaining to be provided for wo should thus lose at least 2 per cent, annually, amounting to $28,000,000 per annum, and that we should practically isolate ourselves from the commerce of the globe as much as China was formerly shut in from the civilized world, and that we should be regarded as a nation incapable of comprehending the first principles of common honesty, they would take pause and shudder at tho disastrous consequences involved in the ill-considered bill which they have reported “to utilize the products of the gold and silver mines” at the expense of the prosperity and the honor of tho country. Let it not be forgotten that “Honor’s train is longer than his foreskirt.” / WHO WILL BE rnOFITEU ? And now let us consider for a moment who is to profit by this mon¬ strous proposition. So far as the country is concerned, it is evident that there can only be loss, without any corresponding justification or advantage whatever, and tho end must be such a general destruc¬ tion in the values of property as to plunge the nation into difficulties and distress which it would require tho patient efforts and the wise statesmanship of a whole generation to repair. But, in tho process of this transfer of property and this destruction of values, the specu¬ lator and the gambler would have abundant opportunity to profit at the expense of the whole community. Pass this bill, and the rise in gold would be measured by tho exact difference between the market value of silver and tho fictitious value which is imparted to it by the provisions of the bill. The rise would be from 15 to 20 per cent., according to the fluctuations in the price of silver. On every million of dollars on which the gold-gamblers have gone “ long,” there would be a profit of from one hundred and fifty to two hundred thousand dollars, and the number of millions to which this fraternity would go “ long ” are only to be estimated by the num¬ ber of victims who can be found to take part in this game of “ heads I win, and tails you lose.” 24 Again the owners of the Bonanza mines, who, by the fall in the value of silver, are receiving $6,000,000 annually less than they ex¬ pected to get, would, by reason of the expected advantages of the legislation, be enabled to impart new life to their decaying stocks, and thus transfer to a confiding public, at high prices, property which is becoming too precarious for these sagacious operators longer to re¬ tain. Thus only have I been able to explain for myself, and I trust I have made it plain to this House, and that the country will understand, how it has been possible to get this bill reported from a committee which is not charged under the rules with the consideration of finan¬ cial bills of any kind whatever, much less of one which unsettles the whole financial system of this country and attacks the foundations upon which public and private credit has hitherto securely rested. It proposes arevolution before which all political questions sink into insignificance ; it undertakes at the heels of the session, and practi¬ cally without debate, the decision of one of the greatest and tlia gravest questions now before the world; one which has already in¬ volved the Indian Empire in disaster and bankruptcy; one upon which a British commission has been in session for months; one upon which a committee of the House of Peers of the French Republic has been and is still is session; one which seriously disturbs the German fiscal system and has caused the Latin Union to stop its coinage; one upon which the wisest and best political economists of the world aro indoubt and at variance. This great question, which affects every household throughout the civilized globe, is sought to bo disposed of by an inappropriate committee of this House as the Doorkeeper would brush away a cobweb from one corner of this Hall. REFERENCE TO A COMMI88IOX. If these gentlemen really desire to deal intelligently with this great question, let them withdraw their bill and support the concur¬ rent resolution now pending for the appointment of a commission of competent experts to consider this matter in all its bearings, political, financial, and social, and to report the results of the investigation at the next session of Congress, when they can bo discussed with delib¬ eration, good temper, and calm judgment, so that the really serious interests involved may be cared for with wisdom and with states¬ manship. CONCLUSION. It would soem to be clear, then, that tho proposed legislation is not in the public interest, but in furtherance of private speculation at tho expense of the public welfare, whereby tho property of creditors will be needlessly confiscated, involving debtors and creditors in one common ruin; whereby the savings of tho poorer classes will bo despoiled by the shrinkage in their value, and the provision made for widows and orphans through the beneficent agency of life-insur¬ ance will bo impaired; whereby it will become impossible to fund the public debt at a lower rate of interest, thus perpetuating tho heavy burden of taxation ; whereby American credit will be ruined at homo and abroad, and an irreparable check will bo given to our slowly returning prosperity; whereby a precedent will be set, dan¬ gerous to the commonwealth and fatal to our liberties, of using tho sovereign power to coin money for the express benefit of private and individual interests, which if followed up must end in the destruc¬ tion of free government. Summing up the whole matter, I conclude that the demonetiza¬ tion of the silver dollar in 1873 was not effected by surreptitious or im- proper legislation; that while it is competent for Congress to order the coinage of a new silver dollar, it has no right in law or morals to give it any other value than one which conforms strictly to the value of the existing standard of value, which is the gold dollar; that the debtor class will not only not experience any relief if the proposed legislation should be enacted, but would be hopelessly ruined ; that, this legislation would not reduce the burden of national, State, and municipal taxation, but would make it heavier to bo carried ; that labor would not bo benefited, but that the return to better times would be indefinitely postponed, in consequence of the flight of cap¬ ital from the walks of industry to regions where it will be safe from spoliation. I do not conclude, however, that it may not be expedient to remon¬ etize the silver dollar at its real value when it can be determined and upon proper conditions; or that it may not bo wise to re-establish the double standard, if it be found to be practicable, which I doubt; or that it may not be the wisest course of all to have but a single standard of silver, which is certainly feasible. Upon these points I reserve my judgment until we can have the report of a competent commission, such as was contemplated in the bill which I had the honor to introduce, the substance of which is incorporated in the con¬ current resolution reported by the Committee on Banking and Cur¬ rency and now before the House, in favor of which I shall record my vote, as the only statesman-like method to deal with a question which puzzles the wisest heads.