A TALK BETWEEN SAM SILVER, FRANK 
 
 FIAT AND BEN BANKS. 
 
 W. DODSWORTH. 
 
 The three were plain common-sense citizens cf the town of Columbia. 
 All had been favored wi:li a good public school education ; but none of 
 them pretended to much book learning and least of all to the kind of knowl¬ 
 edge called economic. Still they were regular readers of the local papers 
 and generally managed to get hold of the fly-sheets and the pamphlets issued 
 by men in search of votes to popularize an idea or “ to grind an axe. 5 ’ 
 Naturally enough, therefore, their attention had been arrested by the excited 
 discussion of the great money question. A celebrated financial conjurer 
 named Coin Harvey, from Chicago, had just given an entertainment in the 
 Town Hall, in the course of which, with marvelous sleight of hand, he 
 showed how to make fifty cents’ worth of silver into a real United States 
 dollar. While sitting in the soft moonlight of a mild May night their talk, 
 therefore, naturally drifted upon this striking feat of converting fifty cents 
 into a dollar. Sam became enthusiastic over the discovery of such a short 
 cut to wealth, but Frank and Ben seemed inclined to the idea that, if it was 
 so easy to create money it might be possible to outdo the Professor at his 
 craft. 
 
 Said Sam : “I don’t see w T hy that dollar Harvey made under our eyes 
 wasn’t a r l one and as good as any dollar ever made. It was as big, it 
 weighed much, and it was as pure metal as the shining fellows they turn 
 out by 1 aillions at the mints ; and, what's more, it had Uncle Sam’s own 
 stamp . Wliat else, then, but a true standard dollar, as Harvey called 
 
 it, con be ? Now, darn me, if I can see what use it is to make a silver 
 
 dolla d costs as much as a gold dollar, when they can make it for fifty 
 
 cent / All the better, say I, for its costing less. If cheap bread and cheap 
 
 clot are good things, why isn’t cheap money a good thing ? And, don’t 
 yov ee we can get twice as many dollars when they cost only half. 
 
/ 
 
 “ Then there’s another thing. It strikes me this cheap dollar would be 
 a darned good thing to pay debts with. You see, I have a hundred-acre 
 farm out in the valley, and I borrowed $5,000 on it from one of them New 
 England money-shavers, at seven per cent. I thought it pretty steep in¬ 
 terest, when lots of people can get all the money they want at five per cent. 
 But the loan agent said my security was risky ; and likely it was, for who’s 
 going to say what a farm’s worth when wheat drops half of its price. How¬ 
 ever, that’s nothing ; a bargain’s a bargain. What tickles me is, if Uncle 
 Sam makes up his mind to play Harvey’s trick I shall have a chance of 
 getting square with that mortgagee; for I can pay him in dollars that cost 
 only half what he lent me. 
 
 “ And that isn’t all. I guess if these cheap dollars are going to be used 
 the factory men and the storekeepers won’t be willing to give so much dry 
 goods or flour or groceries or anything else as they would for a gold dollar, 
 which seems to mean that prices will go up to about double. Good again ; 
 that means I shall get just twice as much for my crops. So, you see, I 
 shall save half of my farm mortgage and double my income, and my farm 
 will be worth twice as much as it is now. That’s what cheap money will 
 do for me and you. The conjurer didn’t say that plain out exactly ; maybe 
 he didn’t want to be quite so cheeky, and he might have frightened some¬ 
 body or hurt some weak consciences; but he knew men such as you and 
 me would understand it ; and anyway that’s the plain, common sense of 
 what he said. Now, I don’t know what you men think of it, but that’s the 
 sort of doctrine for me. I’m from this day a disciple of Harvey and the 
 Colorado aud Nebraska men that started Harvey’s 4 Financial School ’ and 
 sent him to conjure up opinion in this benighted town. I say Jones and 
 Teller and Stewart and all their like are benefactors of their race, when 
 they offer to supply Uncle Sam with all the dollars they can dig out and 
 all he can coin at a cost of 50 cents apiece.” 
 
 Frank : “ Well, Sam, everybody knows you are a cute sort of a fellow, 
 especially when Number One is at stake' and I don’t see but what all your 
 argumentation comes straight out of what that conjurer showed us at the 
 Town Hall. But you must remember, after all, he was a sleight-of-hand 
 man and, as people say, ‘ things are not always what they seem ’ to be; and 
 there’s another true saying, that 4 few eyes see all the sides of everything.’ 
 I have no objection to cheap money, and none to an everlasting supply of 
 it. There we both agree. But there’s a few things about this cheap silver 
 dollar that I’m not near so clear about as you seem to be. It’s ail very well 
 to say that your Silver Kings are benefactors just because they tell you 
 they propose to kindly supply dollars at fifty cents. But arc you sure they 
 really want to furnish the thing for fifty cents ? I know that’s wliat they 
 say to you and me through such fellows as Harvey and the Honorable Mr. 
 Jigger and other politicians in their service ; but how is it when they talk 
 in Congress, and when they want to win votes in the East, where nobody 
 
trusts silver, they swear by everything that’s solemn that if the Govern¬ 
 ment will coin all the silver they can mine, the price of silver will go up 
 to its old figure, $1.33 an ounce, so that a silver dollar will be worth as 
 much and cost as much as a gold dollar ? And now don’t you think it 
 would be human nature for this little brood of autocrats to get the highest 
 price for their metal they possibly can ? You can see that if by turning all 
 their silver into dollars they can double its present price, it will be a grand 
 game for them to play. It will be worth about thirty-five millions a year 
 to them over and above what they now get out of their mines. Do you 
 think Harvey’s promises have really any more in them than a conjurer’s 
 tricks commonly have ? 
 
 “ No doubt, these Silver Kings have persuaded themselves that they 
 could put up the price of silver a great deal, for if not, they could have no 
 business reason for making such a fuss as they are raising about free coin¬ 
 age. But I want to ask you, Sam, what would become of your ‘ cheap 
 money’ if they did fulfill their promise to make a silver dollar worth as 
 much as a gold dollar ? You might then as well pay your farm mortgage 
 in gold as in silver ; there would be no rise in the prices of your crops ; 
 your farm would be worth no more than before and you would feel like 
 kicking yourself because you had thought Number One wide awake when 
 you had only been dreaming on a conjurer’s trick.” 
 
 Sam : “ I confess, Frank, you know a few things about this subject I 
 
 hadn't thought of, and you’ve catched me napping. But still I’m not so 
 very far out as you think. For, suppose the Kings, as you call ’em, were 
 to fail to put silver up to the old price,—and I see the papers on the gold 
 side of the fence say they must fail,—why then the silver dollar will still 
 be worth only fifty cents, which is what I calculated on and want ; so you 
 see, what would be lad luck to the Kings would be good luck for me ; I 
 shall get all I have expected.” 
 
 Frank : u That depends. Are you sure you have seen both sides of the 
 expectations raised by a dollar costing fifty cents ? You have seen your¬ 
 self as debtor, and counted on saving one-half the value due to the holder 
 of your mortgage. You have viewed yourself as a landholder, and expect to 
 see your farm double in value. You have reckoned that, as a raiser of crops, 
 you will get double present prices for all you will have to sell. So far, the 
 plan seems to suit your pocket splendidly. But you have forgotten to 
 ask where you would stand as a buyer. You have to buy labor, seed, 
 manure, implements, cattle, fuel, groceries, dry goods and a hundred 
 smaller things. You have not remembered that every man you bought 
 t’.iese things from would need to have the same doubling of the price of 
 what he sells as you are expecting for yourself, or else he would be beggared. 
 Don't you see, then, that your outlay would be increased just as much as 
 your income ; so that you would be no better oft in the new state than in 
 the old V Your balance of profit at the end of the year might show a 
 
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 larger number of dollars ; but those dollars would have only half the buy¬ 
 ing power they had before ; they would in fact be only half-dollars instead 
 of dollars. And supposing you found it necessary to borrow, under the 
 state of things you favor, you would get your fifty cent dollar ; and yet, 
 unless the lender were more foolish than lenders generally are, your bond 
 would call for payment in gold. Then you would find yourself in just the 
 fix in which you hope to put the creditor who now holds your farm 
 mortgage. So you see, Sam, it is not exactly a safe thing to swap your 
 money systems as heedlessly as you change your toggery/’ 
 
 Sam : “ Well, I've got to confess you settle up my argument in a way I 
 hadn’t thought of, and there don't seem to be much balance left to my side 
 of the case. But you must grant me that it would be a fine thing for the 
 country to have a big increase in our stock cf money. Didn't Harvey tell 
 us our mines turned out silver enough to coin into sixty or seventy millions 
 of dollars every year ? Think of that ! If they were only worth fifty 
 cents a piece, that would be as much as thirty millions of what they call 
 ‘sound’ money ; and wouldn’t that make trade hum out here where we 
 see so little money of any sort ? ” 
 
 Frank : “I'm in with you, Sam, for plenty of money ; but I want it to 
 be of the right sort. It won't do to have it double-faced money, a dollar 
 on one side and fifty cents on the other. It must have a fixed value ; not 
 worth fifty cents, compared with gold, to-day, sixty cents next month and 
 forty cents the month following. We don't want a money that shifts 
 around the compass in the lively way greenbacks did before the resumption 
 of specie payments, and causing prices of everything to go up and down 
 every few days ; and yet that’s just what we should have vhen free coinage 
 had driven our gold into hoards or out of the country. 
 
 “ Then, again, don't you think that if the silver dollar is good enough 
 after you've taken half of its value out it, it might answer all purposes if 
 the other half too was taken out and the coin was made of iron, or copper, 
 or nickel ? You would then have a monev with a solid riirht to be called 
 cheap.” 
 
 Sam : “ That’s enough. This subject has more sides to it than I saw 
 when that conjurer betwitched my eyes, and I’m going to look at it from 
 every angle before I open my mouth about it again. You’ve told me plain 
 enough what you don’t believe about the silver dollar ; now tell me, won’t 
 you, what sort of dollar you do believe in ? ” 
 
 Frank : “ All right. Mark, now, the dollar I’m going to speak of is not 
 the gold dollar, which is used to pay our debts to other countries and which 
 has to be used for certain other purposes. It is the sort we want for retail 
 everyday buying and selling. We will call it the dollar of trade, not the 
 dollar of finance. Yow my idea is that that dollar should cost nothing. 
 You see I go for cheap money a good deal further than your fifty-cent silver 
 dollar does. I suppose they would call me a fiat money man. I don't pre- 
 
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 tend to be learned about these things, and I’ve never read any of the books 
 written by the men called political economists ; but I’ve done some quiet 
 thinking of my own on the subject, and it seems to me a big extravagance 
 to use the most precious things in the world just to settle our bargains one 
 with another. That sort sort of thing was well enough in the barbarous 
 times w T hen men couldn’t trust one another ; but it seems to me that in 
 these days we ought to make some use of the fact that an honest man’s 
 promise is as good as his gold. The other day I saw in the papers that a 
 celebrated statistician—as they call the men learned in facts of this kind— 
 puts the value of gold and silver coin in the world at eight thousand millions 
 of dollars ($8,000,000,000). Just think of that and of what it means ! It is 
 so much money instead of so much of useful things—such as land, build¬ 
 ings, machinery, railroads, and goods of every kind needful to our com¬ 
 fort and happiness. Most people call this hard money wealth. I don't. 
 I call all such useful things as I’ve mentioned wealth. Money is not 
 real wealth ; it is only a tool through which we buy or sell the different 
 kinds of wealth ; and it seems to me at least that it’s about time we 
 began to see whether we can't find a tool a great deal less expensive ; 
 one indeed, that costs next to nothing.” 
 
 Sam : ‘ ; That seems all in the right direction, Frank. It beats Har_ 
 
 vey’s fifty-cent dollar hollow. But tell me where or how you are going 
 to get possession of this tool that costs nothing V* 
 
 Frank : "Well, you know what the United States Government is. It is 
 the biggest government on the face of the globe. It represents the richest 
 country in the world. Its destiny is to become richer and more powerful 
 for generations to come. It has the power to say to its people, ‘ Cease to 
 waste your labor and capital at the rate of one hundred and twenty millions 
 a year in digging out metals merely to help you to settle your contracts . 
 henceforth by fiat of our authority, the common money of the United 
 States shall be notes bearing over our seal the declaration, ‘ This is one or so 
 many dollars, payable for all debts public or private/ Now, if the United 
 States Government says that such notes shall be a dollar or dollars, Ln’t 
 that sufficient to make them money, and good money that everybody would 
 be glad to get ? You see it would be a very different thing from the green¬ 
 back. That note promises to pay so many standard dollars ; and, if the 
 Government happened to put out too many of such promises, it mightn’t be 
 able to pay them, and then they would be worthless. But this fiat note 
 makes no promise to pay dollars ; it is a dollar in itself, because Uncle Sam 
 declares it so. Can w T e have any stronger or cheaper money ? ” 
 
 Sam : " Your plan, Frank, is very enticing ; but I wouldn’t like to say 
 how it would w T ork. It seems to me a dollar ought to have something 
 more to it than this of yours would. But, anyhow, I would like to know 
 how we could get your notes from the Government so as to use them.” 
 
 Frank : ‘ * Oh ! easily enough. Let the Government call in all its bonds, 
 
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 and all its legal tenders and silver certificates, and pay the holders of those 
 debts in these fiat dollars. That would put in the hands of the people 
 fifteen hundred millions ^$1,500,000,000) of the new notes, which would be 
 equal to twenty-one dollars for every man, woman and child in the country. 
 Don’t you see how well the thing fits, and how easy it is to get for nothing 
 all the money the country wants and pay off the national debt into the bar- 
 gain ? 
 
 Here the Fiatist rested his case. Up to this point Ben had been a silent 
 listener, but not an uninterested one. He was a shrewd, thoughtful fellow, 
 and during fifteen years’ service as porter in the First National Bank of 
 Columbia had heard a good deal cf talk about the money question, and 
 especially for the last two or three years. Moreover, he had found oppor¬ 
 tunity for reading some books and pamphlets which he found lying around 
 the directors’ room. Added to these advantages, he had a good stock of 
 sound common sense, and had learned to express himself in a style of good 
 clear English somewhat above his position. To him Sam and Frank now 
 turned for an opinion on their views. 
 
 Ben : “I agree with you both that it is desirable to have more money of 
 a cheap nature than we have now ;• but I don’t think any dollar would be 
 cheap that was not soundly guaranteed to its last cent. As to you, Sam, I 
 have not much to say. It seems to me Frank has not left your fifty-cent 
 dollar a prop to rest on ; and he appears to have satisfied you that your 
 hopes of making business gains out of that sort of money are a delusion. 
 There is one point, however, on which the Silver Kings lay great stress 
 that, in my opinion, won’t hold water. They tell us that with free coin¬ 
 age all the silver produced, would go into the mint and that, as silver 
 bullion would thereby become scarce, its price would rise to its former 
 figure. Admitting this to be true to some uncerlain extent, it would still 
 be true also that silver, as a money metal, could not hold the same confi¬ 
 dence in the public mind as gold. The country would therefore have two 
 money metals of unequal standing. Now, so far as I have had opportunity 
 of reading books borrowed at the bank on this subject—and they were not 
 f e w—the writers all agree that it has always been the experience of the 
 world that gold left a country where silver coin was valued by law above 
 the price of silver bullion. T Ye only need to go five years back in our own 
 history to see how this fixed principle acts. In 1890 Congress adopted the 
 Sherman Act, requiring the Government to buy forty-eight million ounces 
 of silver each year. This act shook confidence in our silver money, and 
 the consequence was that between July 1, 1890, and July 1, 1893, one hun¬ 
 dred and fifty-six millions net ($156,000,000) of our gold was . sent to 
 Europe. My point, therefore, is that the free coinage of silver would 
 finally drive out of the country our six hundred millions ($600,000,000) 
 stock of gold. Now, both you men insist on plenty of money as well as 
 having cheap money ; and I want to know how you would like this reuuc- 
 
tion of six hundred millions in the amount of our currency. And I should 
 like to know what you think would be the value of the silver dollar when 
 the Government and the banks had suspended gold payments. The value 
 of the dollar would be fixed every day by the price of silver bullion, which 
 would be always changing. 
 
 “ As to Frank’s flat money, I think it would be truer to call it flat moon¬ 
 shine. It is flat nothingness. It rests on nothing. It represents nothing 
 It is wind and shadow. It has no merchantable value, like gold or silver. 
 It is not even a promise to pay. It is not an obligation of the United States 
 Government. It is simply a bold, engraved lie ; for it declares that to be a 
 dollar which does not possess any single one of the qualities or attributes 
 essential to money. It is a liar without a redeemer ; the most hopeless of 
 all the sinful forms of money. It has a history as the last desperate resort 
 of war finance ; as the final prop of bankrupt States ; as the last shift of 
 impotent fiscal financiers. It has never once been adopted without ruin to 
 trade and disgrace to the State. To even hint at the thing as a possibility 
 for the United States is an impudent affront to the intelligence and honor 
 of our people. Frank, with no lack of respect for you—that is my opinion 
 of your flat money. 
 
 “ There is, however, a form of paper currency which is not only as 
 cheap as yours, but as sound as it is cheap. Paper circulation should be 
 in the form of a credit. It should be a promise to pay on demand ; to pay 
 in a sound and stable legal tender; in fact, in gold. The issuer should 
 be a responsible corporation, possessing proved ample resources. The 
 entire assets of the issuer should be unreservedly pledged as a first lien 
 in favor of the holder of the obligation ; and, in addition to that lien, 
 the shareholders of the corporation should be held responsible for final 
 fulfillment of the promise. The amount of such promises should be re¬ 
 stricted well within—say to 75 per cent.—the sum of the paid-in capital 
 of the organization; and the National Government should institute 
 ar angements which would to the utmost help the obligations being sent 
 he me for redemption, so as, on the one hand, to prevent the circulation 
 from being excessive in amount, and, on the other hand, to put a check 
 upon unworthy issuers of it. 
 
 “ That is a picture of what a soundly guaranteed and well-regulated 
 bank note should be. The ideal has not often been realized ; but when it 
 has, this has been found the safest and most elastic form of paper currency 
 ever used ; it never failed to supply enough circulation ; it never permitted 
 too much. If I might be so presumptuous as to prophesy, I should unhesi¬ 
 tatingly say that the whole present drift in money affairs is towards a more 
 universal use of a bank currency thus guaranteed and regulated ; and I 
 very much mistake the signs of the times if the adoption of a system like 
 this is not destined to be the final settlement of this much misunderstood 
 question in the United States. 
 
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 “ Such a basis of note issues should not he confined to any one set of cor¬ 
 porations. It should he national in its authorization and scope. The per 
 mission should he alike to National hanks and to State banks, having not less 
 than $25,000 capital ; the conditions should he identical for both ; and both 
 should be equally subject to the inspection of a Federal Comptroller of the 
 Currency, so far as may be necessary to ascertain whether the banks are 
 complying with the legal conditions of issue. The present National banks, 
 however, might continue their issues against U. S. bonds if they so pre¬ 
 ferred ; but those notes would have no advantage of safety over the new 
 ones, and their issue would be much less profitable. 
 
 “ Now, my friends, these are my ideas as to what should be our cur¬ 
 rency of the future. Do either of you imagine that, among the people of 
 this great West and the twenty-three millions of the South, there are many 
 common-sense citizens who would clamor for an uncertain and dangerous 
 silver currency, if their local banks could be made free to issue all the cur 
 rency needed, and when that currency would be covered by even a broader 
 guaranty than that which now protects the National bank currency ? This, 
 in my humble judgment, is the only sound and wholesome settlement of our 
 money question. If you agree with me, let us go home and show our misled 
 silver friends a more excellent way to a sound and lasting currency system ” 
 
 May, 1895. 
 
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