RESUMPTION AND THE DOUBLE STANDARD :

The change from the relation which existed during the medieval period is attributable chiefly to the opening of the oriental trade by the way of the Cape of Good Hope, and the settlement of the different relations between gold and silver which existed in the oriental and occidental worlds.  This settlement took place daring the seventeenth century ;  since which time the ratio has remained almost stationary and uniform throughout the world.

I have already stated that the East India trade absorbed a large proportion, estimated at two-fifths, of the whole American product of the precious metals ;  that is to say, about one-fifth during the seventeenth century and one-fifth during the eighteenth.  This proportion consisted nearly altogether of silver.  The result of these shipments of silver to the Orient was, that of the supplies of American metal absorbed in Europe, a large portion consisted of gold.  With the rise in prices which followed the discovery of America the demand for supplies of gold, as against silver, in Europe, was greater than before, owing to the superior availability of gold at that period for large payments ;  a superiority which the subsequent growth of banks and places of deposit has now destroyed.  This slightly increased demand for gold as against silver must be set off against the urgent demand for silver in the Orient.

The average ratio at Hamburg for the twenty years, 1701-1720, is given  at 15.21.  Sir Isaac Newton, in his report on coins , dated 1717, estimated it at 14.8 to 15 throughout Europe.

At this period the legal relation in England was 15½, and silver was, therefore, undervalued by law.  The consequence was that a large portion of the silver coin was exported to countries where it was more justly estimated.  To remedy the loss of coinage involved in exportation, the weight of the gold pieces was lessened, and instead of eight hundred and ninety, there were coined out of a pound of standard gold nine hundred and thirty-four and a half sovereigns of twenty shillings, or their equivalent, eight hundred and ninety in guineas of twenty-one shillings ;  or, what is the same thing, the guinea, or pound of guinea gold, of twenty shillings, was ordered to pass current at twenty-one shillings.

We are told by modern apologists for the adoption of the single gold standard in England in 1816, without any support for such statement, that the single gold standard was practically the standard of England front the time of this change in the coinage by Sir Isaac Newton, (MacLeod.)  But this fact, however “practical,” had nothing whatever to do with the law on the subject.

It appears that some forty years after Newton’s coinage reform gold fell in the markets of Europe until it would only purchase 14.74 of silver, while the law valued it at slightly under, (2 Harris, page 54, appears to make it 14.145, but this is unprecise.)  Such being the case, there arose an agitation favorable to the payment in gold of the interest or principal on the public debt, which was then largely held abroad, (2 Harris, 53-106.)  The argument in favor of this project was entirely sound.  The debt had been incurred in “pounds.”  The “pound” was a money of account consisting of 20 actual shillings of silver, each 11 ounces 2 dwts. fine out of 12 ounces, and weighing 3 ounces 17 dwts. 10 grains ;  in other words, one pound troy weight of standard silver was coined into 62 of these shillings.  By the same mint indenture to pound troy of standard gold was coined into as many guineas as there were in 890 shillings, and by subsequent indentures, previous to the period of the dispute, into as many sovereigns as there were in 934 shillings, (MacLeod, appendix, pages 9, 10.)  Why not, then, pay the debt in these gold “ guineas ?”

The only doubt which could arise as to the equity of this proceeding depended upon the fact as to when (under what indentures) the debt had been incurred, though, in fact, this question was of no importance.  But it never seemed to have troubled the disputants, who represented that large and influential portion of the debt which was held at home.  They stood upon the pound of silver ;  declared that that was the sole standard of value ;  that gold coins were mere tokens, and that the honor of the Crown was involved in the payment of the debt in silver “ pounds,” which, in point of fact, was only a money of account, (1 Harris, i, 61 ; ibid., ii, pp. 85, 97,) and had had no actual existence in silver since the days of William of Normandy, and none at all in gold.

The superior talent or persistency of these advocates of plutocracy prevailed over reason and equity, as it prevailed afterward, when they took the opposite side of the argument and showed that gold was the standard of England, and not silver, as it has prevailed in this Chamber, as it has prevailed everywhere and at all times.  The books and pamphlets issued on the subject at this period were innumerable, and amid the confusion which they occasioned, the unaccustomed jargon of the mint, and the loud voices of the plutocratical orators, the latter carried the day, and silver was assented to be the sole standard of England.

Some seventy years later, while specie payments were suspended in England, and there was no currency in circulation except unrepresentative and irredeemable bank-notes, silver was demonetized by law, as MacLeod says it had been in fact since the period of the measures effected by Sir Isaac Newton,¹ and, except for payments up to forty shillings, gold was declared the sole standard of value.

This celebrated enactment, the first one specifically making gold the single standard of value which was adopted by any country, is attributed to the same sinister influence which unhistorically and illogically maintained in 1750-’57 that silver was or ought to be the sole standard of England, because at that period gold had become slightly the cheaper metal of the two at the relation denoted by the mint indentures which had existed in Isaac Newton’s time.  But this inference does not appear to be supported either by the market ratio of the metals at that time or by any other facts known to the authors or supporters of the enactment.  The chief of these supporters was Lord Liverpool, whose report on coins antedates by several years the great work of Humboldt on New Spain, and by many years that of Jacob on the History of the Precious, Metals.  The principal fact in this connection which was known at that time, and which could have influenced the adoption of the single gold standard, was that silver had been slowly falling in value since the period of the bank suspension.  The average market ratio for the decade ending in 1790 was 14.74, while for the decade ending in 1800 it was 15.42 and for that ending in 1810 it was 15.61.  Beyond this the supporters of the act of 1816 knew little or nothing which could have assisted them in forming a judgment with regard to the probable future course of the metals.  The act of 1816 was, therefore, a mere blunder, a piece of empiricism based at most upon a recent and, as it afterward proved, a mere trifling and temporary decline of silver.  When we come to trace its consequences we shall see what a deplorable blunder it was.  And it is just such a blunder that we would now commit in this country if we disregard the present opportunity of restoring the double standard, if we empirically refuse to recognize silver as an essential and component part of the money of the world, simply because for the moment the ratio of silver to gold is depressed.

Having now traced the standard of England down to its latest legal change, which occurred in 1816, it need only be stated briefly in this place that no other country adopted the gold standard, except Portugal, until 1865.  The standards of the various principal countries of the occidental world previous to 1865 were either of silver, as in Germany, Holland, Scandinavia, &c., or of gold and silver equally, as in France, Spain, the United States, Belgium, &c.  During the interval between 1809 and 1848, when gold was falling off in supply and rising in price, England entered upon that policy of lending in silver and demanding payment in gold, which, but for the wide-spread bankruptcies which the failure of the gold supplies contributed to occasion in 1837, would have greatly enriched her wealthy classes.  They lent capital to all the countries of the world, lent in the cheaper moneys of those countries, (as they lent us later still during our civil war in paper,) and always demanded payment in gold.  Like all short-sighted policies, it was a profitable thing so long as it lasted, but its very profitableness forbade it to last.

The creditor may seek support in unjust laws, but nature is on the side of the debtor, and nature redresses the inequalities of laws.  As to the effect upon her own people in demonetizing silver during the period when gold was rising in value, it need only be said that England never passed through a more gloomy period than during the half century preceding the opening of California.  One has only to read Professor Thorold Rogers’s Review of Agriculture and Prices in England from the thirteenth to the nineteenth centuries, and McKay’s Working Classes, to be convinced of the fact that during the period, 1816-1848, the English laborer was reduced to a condition but little better than that of his predecessors during the Middle Ages and infinitely worse than that of his predecessors a century before.

Money became scarce, and, despite the alleviation caused by the invention of banking and paper money, hard times set in.  After 1809 the annual supply of the precious metals declined fully one-half, owing to the stoppage of the Mexican mines, consequent upon the war between Spain and her American colonies.  The period when the precious metals were most scarce was between 1810 and 1840 ;  and this, as every one knows, was precisely the period when national distress and political agitation were most rife among us.  The masses suffered and clamored for reform ;  the middle classes groaned under the taxation and cried for retrenchment ;  and in Parliament there arose the policy of peace, to lessen the burdens of a nation which could not afford to go to war.  The discovery of the Ural mines of Russia thereafter began to mitigate though not to remove the dearth.  But now once more a change has taken place and the discovery of the rich mines of California, Columbia, and Australia, &c.—Patterson’s Economy of Capital, page 45.

There is another point in this connection which is well worth mentioning to those who have shown so much eagerness to lead this country into the unwise footsteps which England has trodden in respect to the standard of money.  It may, perhaps, not have occurred to them that, with a system of household suffrage such as exists in England, the slightest rise in values has the effect of extending the franchise of voting.  This was shown by Mr. Patterson in his Economy of Capital, page 60, et seq.:

Houses which rented at £8 in 1848 are now rented at £10, which secures the franchise for the occupiers. * * * Taking the case of England in the nineteen years before the new gold supplies came into play, we find that between 1832 and 1851 the registered electors for burghs increased one-half and those for counties more than one-third, while the total population increased less than one-third,

Here, then, is a reason, in addition to their pecuniary interest, which actuates the ruling classes of England in their monetary legislation, a reason that should teach us of America to beware what hidden pits we may fall into by blindly and subserviently following the politico-economical or legislative footsteps, be they backward or forward, of a foreign country.

We need no foreign advice in the great concerns of state.  When that greatest of all political events, the American Revolution, which not only gave freedom to this people, but for the first time in the history of the world divorced church and state, denied the “divineright” of kings, the privileges of class, and the claims of feudalism, and thus gave to all men at once the principles of government and a land in which those principles could be carried into practice—when the American Revolution was organized, did our forefathers send to ask the opinion of the ruling classes of Europe ?  No.  They knew that if they did so the answer that they would get would be unfavorable to the accomplishment of their ends.  These ends were the freedom and happiness of all men.  These are what they had fought for and determined upon, and they needed no advice as to how they should secure them in that organization of a State which had been committed to their charge.

We now come to the effects of the gold discoveries in California, which effects, preceded as those discoveries had been by the minor ones of Ural and Siberia, were felt soon after the events that gave rise to them.  At this period, about the year 1850, England still had the single gold standard, the United States the double standard at 16, France the double standard at 15½, Spain, Holland, and Belgium (Chevalier, pages 6, 157, 159, and 163) the double standard, and Germany, Naples, (ibid., page 169,) and other countries the single silver standard.  In a word, the silver unit (dollar, thaler, franc, real, or ruble) was a legal tender to an unlimited extent in all these countries except England.

When gold began to pour in from the shores of the Pacific, the first and very proper act of the United States and France was to coin gold pieces and use them instead of silver ones for legal tender.  The United States, still holding on to her double standard, stopped coining the silver dollar, and by the act of 1803 coined a gold one, because it was the cheaper one.  France also held on to her double standard, (of 15½,) notwithstanding the eloquence of Chevalier, who, like Harris in England, precisely a century before, tried to convince France that the law of 7 Germinal, an XI, (year 1803,) meant a single silver standard instead of a double one.  The first care of these two great republics was the interests of their people, and these interests they consulted when they held on to a system which looks to and utilizes the hole supply of the precious metals for the basis of commercial transactions.

Holland and Belgium pursued a different course.  These countries, like England, were governed by kings, surrounded by a powerful plutocracy.  Like her they were lenders of money, the creditors of other nations, and like her they feared the fall of gold.  But, unlike England, they had no single gold standard before ;  no gold standard while gold was becoming scarce, as during the period 1816-1840 ;  therefore no distress, no agitations, no chartist riots, no reform bills, no clamor for popular representation, no demand for ministerial responsibility.  Hence, unlike the British plutocrats, those of Holland and Belgium had no fears to restrain them from adopting a single silver standard when silver became dear.  Belgium retired her gold coins in 1854,² and adopted a silver standard.  Holland did the same thing in 1858.  (McCulloch Dic., art.  “Precious Metals,” says 1847 and 1849.)

The success of the ruling classes in Holland and Belgium in demonetizing gold during this period of its downfall was greatly envied by their brethren in England.  Between 1850 and 1857 gold fell from 15.83 to 15.27 of silver, the extremest range, as it has since proved, during more than eighty years, to wit, from 1790 to 1872.  The creditor classes of England viewed this depression of their favorite metal with great alarm, and fancied that it would go on—as with the same short-sightedness they now fancy that the present temporary depression of silver will go on—forever.  Forgetting that they had profited while gold rose, they now demanded that they should not lose because gold was falling.  They looked with envy upon the plutocratical legislation of Holland and Belgium, and asked why England should not also demonetize gold and adopt silver as her sole standard of value.

Unfortunately for them, their own short-sighted and blundering legislation of 1816 stood in the way, and nature was reaping its revenge.  What was to be done ?  What had England’s plutocratical politico-economists to advise at this period ?

Mr. Richard Cobden, while disclaiming any right on the part of the government to interfere with contracts already made, saw no reason why it should be excluded from such interference with the future as might be necessary to facilitate voluntary contracts.  (Chevalier, page 6.)

Mr. James Maclaren recommended the establishment of life-insurance companies on the basis of a silver standard.  (Ibid.)

Mr. Cobden, quoting this suggestion with approbation, proposed to adapt it to all contracts extending over a long period of time, and even thought of evading the consequences of the depreciation of gold by resorting to the primitive practice of paying in kind, as by granting farm leases upon a rent to be regulated by the price of produce !³  O, sophistry, sophistry, how desperate are thy convolutions !

In short, England was fairly caught in her own toils, and but for the retention of the double standard in the United States, France, and other countries, which enabled these countries to absorb the new supplies of gold by replacing with them their silver coins, which they exported to Asia, wherewith to pay for goods, the relations of commodities and services in England—and this involved her entire political structure—would have been revolutionized.  As it was, her government barely escaped overthrow, and the agency that saved her was that very double standard which the selfishness and folly of 1816 had overthrown in England, but which, fortunately for England, other nations had retained.

The consequences of these various measures, during the fall of gold from 1848 to 1865, were, that England prospered in spite of her foiled plutocracy, France prospered, and the United States prospered, and an era of industrial activity was opened in these three great countries the like of which had never been seen before.  This was the distinctive era of labor-saving machines, international expositions, railways, life-insurance, clearing-houses, and great commercial reforms.

THE RECENT PERIOD.

We now come to the next important change in the history of money and the standard—the era of the silver-bearing mines of the Comstock lode, of the demonetization of silver in several important countries of continental Europe, and its demonetization in the United States through the agency of the act of 1873.

This era opened in 1862 with the exportation of the entire stock of silver as well as other coin of the United States, consequent upon the adoption of an unrepresentative paper currency by the act of February 25 of that year.  In the same year also occurred the discovery of the great silver-bearing mines of Washoe.

The ratio of silver to gold in the markets of the world was, thus threatened with depression from two causes acting simultaneously :  First, the demonetization of a large stock of coin by an important country ;  second, the discovery of new and very productive silver mines.  It was not forgotten by financiers that, together with our silver, we demonetized a much more valuable stock of gold, nor that Washoe was still in its incipiency.  Therefore, it was not until 1863 or 1864 that the bearing of the events of 1862 upon the probable future ratio of silver and gold began to be discussed in Europe.  Their bearing, however, was not wholly dismissed from consideration, and as the Washoe mines gave more and more promise of great production, discussion in Europe with regard to the tendency of the ratio became more and common.

In England the anticipated decline of silver was regarded with great complacency.  It was a veritable windfall for her plutocracy ;  a parachute to retard the previously threatening decline in the purchasing power of gold ;  a governor to that engine of their own construction, which they had built in 1816 and regretted since 1848.

As the great mines of Washoe became further developed the continental plutocracy also began to prick up its ears.  It was at this period organized and formidable, which is more than can be said of it in 1848, when the red flag flaunted in its face from every corner of Europe ;  France was now an empire ;  Italy a united kingdom ;  Greece a newly fledged monarchy.  The plutocrats of these countries could have their own way now.

Nature, steam, and the Comstock lode labored for mankind ;  the silver treasures of the Sierra Nevada began to make themselves felt in the coinages ;  the gold product fell off, and gold went up to nearly sixteen of silver.  It was therefore in the interests of the plutocracies to demonetize silver and adopt gold as the sole standard of value, and they endeavored to convince society that gold alone was the true standard.

The reading world was flooded with pamphlets and magazine articles on the subject, penned by the highest order of talent, which, too often neglected by the people, is forced to ally itself with power ;  conventions, with cut-and-dried programmes, were called to discuss the matter; advocates were employed and charlatans retained to drown with the clamor of numbers the modest voices of science, equity, and reason.  Another motive urged the plutocracies to their course.  So long as silver was harbored as a legal tender in Europe, the United States, by being the principal producer of that metal, might become the money center of the world—a matter of no little concern to London, Paris, and Berlin.

An international monetary convention was held in Paris in 1865, and a treaty concluded between France, Belgium, Italy, and Switzerland in which Greece and Roumania subsequently joined, by virtue of which these countries so limited the mintage of their legal-tender silver coins as to prepare to make gold their sole standard of value, and partially demonetize silver.  Taught by previous experience, they did not actually demonetize silver, but left the law in such a condition that by a concerted change in the coinage regulations either gold or silver, if need be, could be made the sole legal tender, and, by adopting whatever happened to be for the time the dearer metal, a see-saw between silver and gold could be kept up for the benefit of plutocracy at every change of market relation.

There can be no see-saw unless the legal relation between the metals is permanently fixed and unalterable.  When this relation is altered from time to time, as it should be, (once in ten or twenty years would practically be often enough,) to accord with the slow fluctuations of the markets, neither the creditor, who would demand the dearer metal, nor the debtor, who would proffer the cheaper metal, could profit by having his choice.  But when the relation is unalterably fixed or difficult to alter, as is the case in France, then the creditor who always demands the metal that abroad commands a premium, or the debtor, who would pay in the one that can be purchased abroad at a discount in the one which is the legal tender, derives an advantage.

This treaty of 1865 was to last until 1880, and with certain modifications is still in force.  England did not enter into it.  Gold was now to become dearer, and in her present political condition, when popular interests have the power to be heard, her plutocrats feared to open a question which might overthrow the advantages they already possessed.  England had a single and peremptory gold standard.  Why should she enter into a treaty which would make her a party to only a permissive gold standard, a standard which, practically, when the treaty expired, and before gold fell in price again, might be changed by a concerted coinage regulation ?

But, although British plutocracy saw nothing to be gained by entering into the monetary treaty of 1865, it saw something to be gained by attending the congress which preceded the treaty and the subsequent convention which was held in 1867 with the view to extend the operation of the treaty.  That something was to draw the United States into the treaty, the United States which were as yet not bound to a gold standard at all, either permissive or obligatory.

Accordingly England sent her delegates to both conventions.  They were instructed to say nothing which world bind England, but to carefully watch and report the proceedings until, I presume, the hands of the United States were fairly into the fire and the chestnuts safely landed for the benefit of the ruling classes of England.  These instructions were carried out with great skill.  The Frenchmen arranged the programme, the Germans did the arguing and philosophizing, the Englishmen listened, and the American delegate, overcome by the plutocratical atmosphere that surrounded him, walked straight into the trap that had been set for him.  The convention was called for the nominal purpose of unitizing the weights of the coins of various nations.  Its real object, which it fully accomplished, was to commit the United States to the adoption of the gold standard while gold was growing dearer, so that the interest and principal of her public, corporate, and mercantile indebtedness, held mainly in Europe, which was then under our laws payable in the silver dollar of 371½ grains pure, should be made payable in the temporarily more valuable gold dollar of 23.22 grains pure.  Of course the United States was not bound by this vote of its delegate in the international monetary convention, but the vote had its influence.  It tended to sway the judgment of the Congress of the United States when the question came up ;  that is to say, tended to sway it so far as it was called into exercise at all.

DEBATE ON THE AMERICAN DEMONETIZATION ACT OF 1873.

But the manner in which this legislation was effected leaves but little reason to infer that any deliberate judgment was exercised on this important subject of the standard or that the question was ever so presented to the American people as to elicit the indorsoment or the approval of any single congressional constituency.  The bill by which it was effected originated, as I understand it, in another bill which was introduced into the House of Representatives February 9, 1872.  It was discussed for a few moments on April 9, 1872.  Then the discussion was cut short, and a substitute, the present law, reported by title on May 27, passed without a reading, under a suspension of the rules, May 29, 1872.  From the House it went to the Senate, where, without any discussion at all upon the all-important section 14, it passed, and, after concurrence by the House, again without a discussion, became a law.

I am aware that it has been stated that the bill was passed after very full discussion on this subject ;  but I am unable to find a corroboration of this statement in the official report of the proceedings.  If any such full discussion appears in the Congressional Globe, I shall be glad to have it pointed out, in order that I may correct the impression now on my mind in respect of this matter.

This bill was originally reported to the House of Representatives February 9, 1872, from the Committee on Coinage, Weights, and Measures by its chairman, Mr. Hooper, of Massachusetts.  It was discussed for the first time April 9, 1872, when Mr. Hooper informed the House that Mr. Ernest Seyd, of London, a distinguished writer on coins, had examined the first draught of the bill and “furnished many valuable suggestions which have been incorporated in the bill.”  Curiously enough, Mr. Seyd is an uncompromising advocate of the double standard, and it is to be regretted that having received Mr. Seyd’s advice the committee only saw fit to follow it wherein it was entirely unessential and to disregard it in its most important feature.  Mr. Hooper then assured the House with regard to section 14, where the standard was changed by implication from the double to a single gold one, that the reason for this change was that the silver dollar was worth $1.03, a mere accidental and temporary fact which afforded no sound reason for abandoning the double standard.  Subsequent events have proved that the option which we then enjoyed of paying in silver or gold dollars at pleasure was of the highest importance to the American people, and should not have been surrendered.  Even if the fact as to the premium on the silver dollar were permanent and assured, the simple remedy would have been to change the legal relation between gold and silver.

Mr. Hooper also stated that the single gold standard had been adopted in Great Britain and most of the European countries, which latter statement was certainly not correct.—Congressional Globe, second session Forty-second Congress, part 3, page 2305.

Mr. Stoughton, who followed Mr. Hooper, repeated the statement that the silver dollar was worth, he said, 3½ per cent. premium.  (Page 2309.)

Mr. Kelley, who followed Mr. Stoughton, said it was worth 3½ per cent.  (Pages 2311 and 2316.)

Mr. Potter, of New York, appeared to be the only member, besides the movers, who suspected the real character of the bill.  He said,

"I confess that the introduction of the bill at such a period (during a suspension of specie payments) excited my suspicion.  I was and am at a loss to gather from anything I know or can learn that there is any necessity for the adoption of this measure now."

Among the objections he had to the bill was that—

"It provides for the making of changes in the legal-tender coin of the country, and for substituting as legal tender coin of only one metal, instead as heretofore of two.  I think myself this would be a wise provision, and that legal-tender coins, except subsidiary coin, should be of gold alone"

Finally, he stigmatized the bill as a cover, and that it was “gotten up to be a cover,” among other things, for the coinage of nickel pieces in order to enhance the market value of nickel and benefit the monopolizers of nickel mines and processes.  (Page 2312.)

And the impartial observer at the present time finds it difficult to account for the introduction of such a bill when specie payments were suspended and unprovided for, unless upon some such ground as Mr. Potter suggested, to wit, either the interest of the owners of nickel mines at home or that of creditors at home or abroad.

But of what avail was argument or objection ?  The discussion was cut short by a motion to adjourn, and the discussion was never renewed.  The next we hear of the bill is that it was pushed through on the 27th May, under a suspension of the rules, without even a reading, and that it went to the Senate.  (Page 3883.)  There it was reported by title on the 28th May, referred by title to the Finance Committee on the 29th May, and passed it the following session, without, so far as can be ascertained from the Congressional Globe, having ever been fully considered.

CAUSES OF THE RELATION OF 15½.

Turning away from these details to the general history of the relative valve of the precious metals, the principal and by far the most important fact to be observed is the remarkable steadiness which this relation has shown for over two hundred years.

The question now arises concerning this constancy in the relation in value of gold and silver since the early part of the seventeenth century :  to what is it due ?  We have seen that this relation has been almost constantly and with slight variation 15½.  Why has the pivotal point of this relation been just 15½ ?  Why not 13, as in the days of Herodotus ?  Why not 12, as in the feudal ages ?  Why did it not fall to 20 when Potosi poured its silver treasures upon the world ?  In short, why did it center at 15½ and remain there ?  A satisfactory answer to this question cannot fail to be important, because it will afford a guide which will enable us to compute the probable variation of the relation between silver and gold in the future.

Since the opening of the East Indies and China trade in the early part of the seventeenth century the relation of gold and silver in the Occident and gold and silver in the Orient became equalized.  At the same era, also, the Spanish-American silver mines were opened, and the use of quicksilver in amalgamating ores discovered.  These three events changed the pre-existing relations in the whole world.  The first raised the value of silver ;  the second and third lowered it ;  the three together placed it at 15½, kept it there, and equalized it all over the world.  The oriental trade continues, the American silver mines are still productive, the process of amalgamation is still employed.  Therefore the conditions of production and consumption are essentially the same as they have been for over two hundred years.  When we consult those conditions with the view of determining the cause of the relation between gold and silver, we find that the same quantity of capital, superintendence, labor, or of those commodities necessary to support capitalists, superintendents, and laborers, as food, clothing, shelter, &c., and of materials, such as quicksilver, tools, machines, &c., as are, on the average, employed to extract fifteen and a half pounds of silver from the earth will only produce one pound of gold.  This is the average of all countries and of over two hundred years of trial.  It comes to this at last.  This is the boiling down of the whole subject.

It will, of course, be understood that the several rewards of capitalists, superintendents, and laborers—in other words, their share of production—differs in various countries, and has differed at various periods ever since the opening of India and America.  So, also, has the effectiveness of laborers.  Hence the reward of each of these classes of persons has differed enormously.  But, as under the same difficulties of production—and these have not changed as between the metals during the past two centuries, and are not likely to change in the future—the sum total of their contributions to the work has been the same, it follows that, as before stated, it is the total outlay of capital and labor, applied respectively to gold and silver, that has determined the relation of value between them.

When, at any given time or in any given country, the same outlay of capital, labor, materials, &c., that is sufficient to result in the production of one pound of gold, if removed from gold and applied to silver mining, will produce more than fifteen and one-half pounds of silver, the labor, materials, &c., will be removed from the production of gold to that of silver.  When, at another time or in another place, the outlay sufficient to result in the production of fifteen and one-half pounds of silver, if devoted instead to gold, will produce a fraction more than one pound of gold, it will, as a matter of course, be devoted to gold.  The same laborers and the same capital, plant, tools, materials, &c., are not always removed from one industry to the other.  One industry ceases in one place ;  the other may spring up in another place.  It amounts to the same thing either way.  These changes do not occur on the instant ;  they come about in time.  When mines cease to be profitable at the long-established relation in value of silver and gold—a relation that finds its reflection in the prices of the services and commodities necessary to carry on the works—they are not abandoned at once, but continued in the hope of improvement.  If no such improvement occurs they must eventually stop, for men will not and cannot go on forever losing money at mining.

This, then, is the basic reason for the long-time relation in value of silver and gold.  The average result of over two hundred years of experiment in all parts of the world assures us that fifteen and a half pounds of silver and one pound of gold are equivalents, and this assurance is as solidly supported in respect of the future as we find it in respect of the past.  Now that the most remote parts of the world are connected by commerce, nothing can weaken it, unless it were possible that some very great and peculiar improvement in mining or the recovery of ores could take place in respect of one metal and not of the other.  For example, suppose an improved method of extracting or recovering gold was devised which was inapplicable to silver, then gold would be produced more cheaply than now and silver would rise in value, or vice versa, in case the improvement could be applied to silver and not to gold.

But this is impossible :  first, because the nature and qualities of the two metals are so nearly alike that any improvement applicable to the extraction or recovery of one must apply also to the other ;  and, second, because the geological distribution of the two metals is such that, in many of the large deposits of the world, they lie together in the same matrix.  They must therefore be taken out together, and the quartz which contains them both must be crushed, amalgamated, separated, and refined by one and the same process.  The quartz matrices of the mines of the Sierra Nevadas generally contain about 1,000 troy grains of gold to every 24,000 grains of silver, or about 40 per cent. in value of gold to 60 per cent. in value of silver, and the proportion in other great silver mines of the world varies front 20 to 50 per cent. in value of gold to that of the two metals combined.

Here, then, we have an unalterable reason why all improvements in the art of mining the precious metals must apply equally to both of them, and also why, indeed, so long as one metal is produced, so must be the other.  Coupled with that of the relative cost of producing them, as ascertained from in experience of several centuries, this fact assures us not only that 15½ has been the average relation between the metals in the past, but also that it will remain the average relation throughout the future.

The relation being thus fixed, there are powerful influences to keep it there and prevent it from yielding to any temporary vicissitudes, however prolonged, in the supply of the two several metals, such, for example, as the accidental finding of large alluvial deposits or placers of gold, as in the early history of California and Australia.  These influences are :  First, the vast stock of the precious metals already in existence in the world ;  and, second, the steadying action of the double standard in the countries where it prevails.

INFLUENCE OF THE STOCK OF THE PRECIOUS METALS.

The influence of this stock of the precious metals is perhaps the most important feature of this whole subject, and yet, so far as I am aware, it has either wholly escaped notice or been referred to with but slight appreciation of its consequence.

STEADYING ACTION OF THE DOUBLE STANDARD.

The second great influence which tends to keep steady that relation of 15.½ to 1 which the commercial brotherhood of the world and the conditions of the productions of the precious metals have primarily occasioned, is the steady action of the double standard.  I can best and most briefly exemplify this action by quoting from Professor Jevons :

The prices of commodities do not follow the extreme fluctuations of value of both metals as many writers have inconsistently declared.  Prices only depend upon the course of the metal which, happens to have sunk in value below the legal rates of 15½ to 1, (or whatever else it may be.)  Now, if in the accompanying figure we represent by the line A the variation of the value of gold as estimated in terms of some third commodity, say copper, and by the line B the corresponding variations of the value of silver, then superposing these curves, the line C would be the curve expressing the extreme fluctuations of both metals.  Now, the standard of value always follows the metal which falls in value, hence the curve D really shows the course of variation of the standard of value.  This line undergoes more frequent undulations than either of the curves of gold or silver, but the fluctuations do not proceed to so great an extent, a point of much greater importance.  (W. Stanley Jevons on “Money and the Mechanism of Exchange,” New York. Appleton, 1875, page 138.)

The effect of employing the two metals together is to modify the action of each.  Such dual employment prevents one from rising and the other from falling, so that the fluctuations in either “do not proceed to so great an, extent” as they otherwise would.

GOLD BY ITSELF NOT A CORRECT MEASURE OF VALUE.

Money is a measure, as the bushel, the rule, and the scale are measures.  The bushel measures capacity, the rule extension, the scale gravity, while money measures value.  All of these measures are expensive ;  expensive to produce, expensive to maintain, expensive to preserve.  Nor is money by any means the most expensive, it being deemed quite susceptible of demonstration that, compared with the services it performs, it costs even less than the others.  Yet, expensive as they are, their use must nevertheless be a source of economy to mankind or they would certainly not be employed.  This employment and the economy to which it is due ceases the moment the measures fail of uniformity, definiteness, precision, exactness, and steadiness, for it is in their excellence in these respects that their whole utility resides.

The discordance of moneys, weights, and measures has probably been in all ages one of the first and greatest obstacles which the world’s commerce had to overcome, and even the progress of local commerce has had to wait upon uniformity in this respect.  Indefinite and unprecise measures are an intolerable evil which men avoid even at the expense of much that is desirable.

What, then, shall be said of measures that are not only discordant and unprecise, but fluctuating also ?  What would be said of a bushel that alternately contracted and expanded, and contracted more than it expanded ;  of a rule of elastic rubber, or a pair of scales with a shifting fulcrum ?  And what shall be said of a fluctuating measure of value ?

Yet this is what money is, if gold be regarded to the exclusion of silver.

To be convinced of this it is only necessary to consider the statistics of the precious metals which have just been adduced.

From these tables it will be observed that since nearly the beginning of the present century the stock of coin in the commercial world has exactly doubled ;  that is to say, it has increased from $1,800,000,000 to $3,600,000,000, an increase that very closely corresponds with population—the population of the occidental world having been 180,000,000 in 1810 and 360,000,000 in 1875.  (Essay in New York Independent, March 11, 1875.)  Taking both of the precious metals together, the stock of coin has been as nearly as possible $10 per capita of population at each of the four dates mentioned since the beginning of the present century.

At these periods at least, and we have the data for no others, the measure in the commercial world has been apparently unvarying, and this appearance has deceived many writers on the subject ;  but it is by no means true.

The effective measure of value is not the whole stock of coin, but that portion of it which the law permits to be tendered for the payment of debts.  To this should be added the paper substitutes which are from time to time temporarily employed and accepted for the purpose of large payments, and which fluctuate in volume with the vicissitudes of credit and the adoption, transitory operation, and eventual failure of legislative expedients.⁴  The balance of coin or credit no more form a part of the measure of value than do the precious metals when locked up in the form of a plate.  Now, how much the legal-tender coin and substitutes of the commercial world amounted to at the various dates given is difficult to estimate.  An effort in this direction will, however, be made.

ESTIMATE OF THE EFFECTIVE MEASURE OF VALUE IN 1803.

In 1803, either the single silver or the double standard prevailed in all the occidental countries and, except in England, where gold was erroneously overvalued and silver degraded, it was fixed in those countries at such a relation and the coinage of the pieces so arranged (I do not remember having heard of any silver piece heavier than that of two German thalers) as to permit of the employment of nearly the whole mass of silver and gold coin then in the Occident.  There was some legal-tender paper or bank paper afloat, notably in England and Russia, which brought the whole amount up to, say, $2,000,000,000, with a ratio of activity, let us assume, of 1.

ESTIMATE OF THE EFFECTIVE MEASURE OF VALUE IN 1872.

In 1872 a single gold standard existed in Great Britain ;  a restricted double standard in the Latin countries ;  a single silver standard in other European countries ;  a disused double standard in the United States, and legal-tender paper notes in many of these countries.  The sum of all these currencies might amount to $4,000,000,000, with a ratio of activity of say 2, making $8,000,000,000 in 1872, with a population of 360,000,000, or $22 per capita, as against $2,000,000,000 in 1803, with a population of 180,000,000, or $11 per capita.  The effective measure of value in the occidental world has, therefore, doubled since the beginning of this century.

As it is worth while to ascertain, if possible, how we may obtain a least varying measure of value for the world, it becomes necessary for this purpose to turn from the statistics of the occidental world to those of the whole world.

THE WORLD’S STOCK OF COIN AND POPULATION.

Assuming that without royal, seigniorial, or legislative interference, the relation of the mass of private credit current for money to the mass of money would be constant, let us confine our observation to the stock of metal money in the world.  In 1803, with a population of, say, 900,000,000, it was $2,500,000,000 ;  in 1829, with a population of, say, 1,000,000,000, it was $2,600,000,000 ;  in 1848-’53, with a population of, say, 1,100,000,000, it was $3,400,000,000 ;  and in 1872, with a population of, say, 1,200,000,000,⁵ it was $5,700,000,000.

SWELLING OF THE MEASURE OF VALUE SINCE 1803.

These figures give an average of coin per capita throughout the world amounting to $2.83, $2.60, $3.09, and $4.75, at the respective periods named.  If the assumptions of population here employed are admitted to be even approximately correct, then, even without reckoning greater activity of money now than formerly, it would follow that there has been no more fixedness in the relation of the world’s coin and population than there has been in that of the effective measure of value and population of the Occident.  They have both doubled, or about doubled, since the beginning of the century—doubled per capita of population.  The coin of the world per capita and the effective measure of value of the Occident per capita (i.e., the coin and circulating credit of the Occident combined) have both doubled.  What has caused this doubling, this unsteadiness of the measure of value ?  Has it been due to diminution in the population of the world ?  No.  We know that the population of the occidental world has more than doubled since the beginning of the century, while the figures assumed for the oriental world exhibit a very small increase.  (Japan increases very slightly.  As to India and China, they are probably stationary.)

Has it been due to superabundance in the stock of silver ?  No.  That stock was $1,600,000,000 in 1803, $1,800,000,000 in 1829, $2,200, 000,000 in 1848, and $3,100,000,000 in 1872.  Its ratio to population has been, as the ratio of money to population always should be, a slightly increasing one ;  but the relation has been substantially constant.

THE MEASURE OF VALUE SWOLLEN BY GOLD.

The swelling of the measure of value has been due to an enormous increase in the stock of gold.  This amounted to $1,800,000,000 in 1803, and twenty-six years afterward it had not increased.  During the next nineteen years it increased 50 per cent. and during the following twenty-four years it increased 116 per cent. over the previous increase.  In 1848 it was $1,200,000,000, in 1872 it was $2,600,000,000 ;  by the end of the present century it will probably have fallen again to $2,200,000,000, perhaps to $2,000,000,000.  So much for a metal which depends upon placer mining for its chief supplies.

This is the steady and unvarying measure of value to which the advocates of the single gold standard would commit us !

So far as steadiness is concerned, and irrespective of all other considerations, gold does not deserve to be used as money at all, and the old nations of Asia, who tried this metal more than thirty centuries ago, appear to have long since come to this conclusion ;  but the gradual increase of the mass of silver and the weight of the coins, together with the fact that gold frequently occurs with silver in the same matrix, give a place to gold which the unsteadiness of its supply would otherwise deny to it.

ANNUAL PRODUCTION OF GOLD AND SILVER SEPARATELY.

The validity of the statistics which have been quoted rests upon authorities—Wolowski, Seyd, Chevalier, McCulloch, and Jacob—whom the reading world has thus far been satisfied to accept as safe guides.  The important and conclusive deductions drawn from them are, however, not without an amplitude of other support.  They are to be drawn also from the statistics of the annual production of the precious metals, the validity of which will admit of but little question.

Taking silver by itself, we find that the annual production of the occidental world has but little more than kept pace with population.  It was $35,000,000 a year at about the beginning of the century ;  it was $72,000,000 a year in 1875.  The statistics of its annual production are characterized by the same steadiness that distinguishes its place in the circulation.  If gentlemen want details they can have them country by country.  There is no guess-work here ;  we are standing upon solid rock.

Turning to gold, we find that the annual production has varied enormously.  It was $113,000,000 a year in 1801 ;  fell to perhaps not over $5,000,000 in 1829 ;  rose to $182,500,000 in 1852 ;  fell to $107,000,000 in 1863 ;  rose to $130,000,000 in 1865, and fell to $97,500,000 in 1875, and with a downward tendency.

And yet this wildly fluctuating, ruinously unsteady metal is what the fledgelings of political economy, the charlatans of monetary conventions, and the numerous other dupes of Lombard street would divorce from its natural complement, silver, and have for a sole standard of value.  As well have the rack for a measure.  It has often served that purpose, only the thing that it measured was not value, but human endurance, and that seems to be about all that gold by itself is capable of measuring.  Thirteen million dollars a year in 1801 ;  $5,000,000 in 1829 ;  $182,000,000 in 1852 ;  $97,50,000 in 1875.  A wonderful measure of value indeed !

Let us suppose for a moment that silver had been demonetized by the entire commercial world at the same time that England demonetized it, to wit, in 1816, and the commerce, the business, and the vested interests, the daily labor and the time contracts of society left to adjust themselves in the course of twenty-six years (from 1803 to 1829) from a measure of $1,800,000,000 of gold and silver coin to one of, say, $700,000,000 or $800,000,000 of gold coin.  Recollect that even as it was, the whole of that period was one of bankruptcies and convulsions.  Now, let me ask what it would have been had the evil been aggravated by the adoption of such a gigantic blunder as England set up in 1816 for the imitation of mankind ?

We are upon the eve of another era of the same character.  The annual supply of gold has reached its culmination.  The supplies of gold are falling off.  The river-beds of California and Australia have been washed ;  the surface gold has been secured ;  the quartz mines have measurably used up the paying ore ;  the water-line has been touched, and below it are only those sulphurets which as yet have not been successfully treated.  Beware foreign influence !  Beware the example of England !  Beware England’s fatal blunder of 1816 ! Beware the ruinous effects that followed close upon its heels !  The causes of the bankruptcies of 1873, 1874, 1875, and 1876 may lie in deeper waters than the shallow stream which commenced to flow in October, 1873.  They may lie in the shrinkage of gold—that gold which the ill-considered act of 1873 made the sole measure of values and the sole arbiter of fortunes in the United States.

For the purpose of testing by comparison the efficiency of gold as a measure of values, let us suppose again that gold was the sole legal tender money of the commercial world in 1848.  Will gentlemen attempt to deny that the stock of this metal in the coins of the commercial world more than doubled between that date and 1867 ?  If this fact be admitted, must it not be perceived that, with gold as the sole standard of value, prices would have more than doubled during the course of these nineteen years, and that with such a great and sudden enhancement of prices the worth of all vested interests, the relations of all contracts, the entire distribution of wealth, would have been seriously affected ?  The widow and the orphan, left with a comfortable competence in 1848, might have had to eke out a scanty living in 1867 ;  the lessor of 1848 might have been glad to abandon his property rather than pay the taxes and charges of 1867 ;  the rich would have become undeservedly poor, and the poor undeservedly rich—a very equitable arrangement, according to some minds, and I confess I am not wholly unbiased that way myself ;  but I do not forget that I am now addressing the official successors of the authors of the act of 1873.

Observe, too, the effect which the enormous folly of demonetizing silver in certain states of Europe and in the United States has had upon the currency of Asia.  If these statistics have even approximate worth, and there is no reason to subject them to the slightest suspicion of incorrectness, for they rest upon numerous authorities who derived their data from widely different sources, it will be seen that the currency of Asia has more than doubled since 1848, and probably chiefly since 1862.  This currency is estimated to have amounted to $700,000,000 in 1803, $900,000,000 in 1848, and $2,100,000,000 in 1872, chiefly in silver.  So far as we know and are led to believe, from the character and institutions of the peoples of these countries, there was little or no increase at all in their numbers up to 1862, if, indeed, there has been any since that date.  The increase of their circulating medium has, therefore, been almost absolute, and it must have had the effect of enhancing the present level of prices in those countries three times more than that of 1803.

No wonder that Mr. Secretary Bristow advises Congress that the abolition of our import duty upon tea has failed to cheapen the price of that article.  Why we should have contributed, as we did contribute, by the suspension act of 1862 and the demonetization act of 1873, to triple the specie prices of everything we have had and shall have to buy from China, Japan, and the East Indies wholly surpasses the understanding.  To men of plain minds it seems to have been the most stupendous folly.

APOLOGIES FOR SUBSIDIARY COINAGE.

To these grave charges about tripling prices in Asia there has been a weak and ill-considered reply, to the effect that while England and her subservient imitators on the continent of Europe and in this country have demonetized silver as a legal tender for the payment of debts, that metal has nevertheless been allowed to remain in the form of base coin for fractional currency or small change.  It seems to have been forgotten that base or token money can only circulate to a small amount.  For example, if gold and silver were now equally legal tender in Great Britain, as they were previous to 1717, a large proportion, perhaps one-half, of the whole amount of money now in the kingdom, which is estimated at $575,000,000, (plus $5,000,000 of copper,) would be of silver, which at the present moment is the cheaper metal at the relation of 15½.  In France, in 1860, where the double standard prevailed, and when gold was the cheaper metal at the legal relation of 15½, a large portion of the entire metallic currency was of gold, (Seyd.)  But instead of the currency of England being entirely of silver, at the present time there are in that country $500,000,000 of gold and only $75,000,000 of silver (tokens) in circulation, (Jevons.)

This result is due to the demonetization of silver, and from this cause some $200,000,000 of silver, which would otherwise hold place in the money of that country, have either been melted up or exported ;  reduced either to plate or shipped to Asia.  In the one case, lost almost irretrievably to civilization, so far as its agency in measuring values and stimulating industry is concerned ;  in the other, gone to help add to the strength and commercial resources of a semi-barbarous world.

But far more important than this is the consideration that the substance of which coins are made and the substance of which the standard is composed are altogether different matters.  The coins of a country may be made of gold or silver, yet if wheat were made the standard of value, that is to say, if the coins were payable on demand in wheat, the prices of other commodities would fluctuate, not with the vicissitudes of coinage, nor even of the stock and production of the precious metals, but with those of the stock and production of wheat.  Coins of this character would merely be tokens, promises to pay (wheat) stamped on gold or silver ;  of this character are the silver coins of England ;  and the silver half dollars, quarters, and dimes of the United States.  They are were tokens, and, except at times when they rose in value (in the standard) so as to be worth melting or exporting, the metal of which they were composed would practically be demonetized.

SUBSIDIARY COINAGE NOT WHAT IS WANTED.

It is not merely urged by the advocates of the double standard that silver should have that subordinate place in the currency which is the utmost that can be filled by a token coinage, and which could be filled to a certain extent as well by any baser metal, or even, perhaps, by paper ;  it is not merely asked that silver shall be granted the same sort of recognition that is vouchsafed in social life to a menial—it is demanded that it shall be accorded the same rank in which gold has been maintained ;  the rank to which the great place of silver in the coins of the world, its universal distribution and appreciation, its ample and steady supply, its twin birth, its utility and adaptability, and its worth as a pleasure of value entitle it.  With a double standard wisely fixed, all the moderately large payments would be made in gold and all the smaller ones in silver, just as for moderately large quantities of liquids the oaken hogshead is employed and for smaller ones the tin gallon.  By forcibly interdicting oak, you might compel hogsheads to be measured by the tin gallon, just as by interdicting tin you might force gallons to be measured by the oaken hogshead.  What is demanded for silver is that it shall be left free to assume its own rank in the currency, so that whenever it temporarily becomes the cheaper metal at the average relation to gold, it may for the time possess that same influence in modifying the measure of value that has been always so zealously accorded to it when it became the dearer.

THE FLUCTUATIONS IN GOLD DUE CHIEFLY TO PLACER MINING.

It will not do to rejoin to this that the probabilities of gold again becoming the metal in more plentiful supply are remote.  Even if true, this reply would confess the very selfishness of the champions of the gold standard which they have been so solicitous to conceal in the solemnity of their monetary conventions and the surreptitious character of their measures of legislation.  But it is not true.  Although at the present time the annual supplies of gold are falling off, it is impossible to predict how long this movement play last.  While silver is essentially the product of industry and enterprise, gold is largely that of adventure and chance.  This results from the physical fact that the last-named metal is nearly always found in alluvial deposits or placers, and it is from these sources that the bulk of the world’s stock of gold has been obtained ;  this is never the case with silver.

GOLD AT PRESENT CHIEFLY A BRITISH PRODUCT.

These facts bring under our consideration another important matter in connection with the history of the precious metals separately.  It is this :  that at the present time and for the main part the supplies of gold to the world are chiefly from British countries or countries subject to British domination.  The following table will illustrate this very significant statement :

Estimated annual gold product of the world at latest dates for which the statistics are attainable in the various official reports.

The United States, 1815 ....................................... $26,000,000
Australia, &c., 1872............................................. $58,000,000
British Columbia ............................................. 2,000,000
Canada and Nova Scotia....................................... 500,000
Other British possessions and British isles ........... 1,500,000

Total British possessions..................................62,000,000
Balance of the world...................................... 30,000,000
Total of the world........................................118,000,000
Proportion of the world’s production from British possessions, (percent.) 52½

From this table it will be observed that of the $118,000,000 which represent the annual gold product of the world 52½ per cent. was obtained in countries over which the British flag waved or which were subject to British domination.

Is this, then, the secret of British plutocratical solicitude for the single gold standard ?  Is it not only that the people of Great Britain shall have the rewards of their labor measured by this diminishing measure, which is to be held tightly grasped in the monopolizing and cruel hands of their plutocratic lords, but that the labor of the entire civilized world shall be measured by it also ?  For one, I reply to this, never !  And when this subject shall be fully understood by the American people, the reply that I now make should echo and reverberate throughout the whole length and breadth of this great land.  Never ought we, never will we, submit to have our labor and enterprise measured by a standard subject to the manipulation and pleasure of a foreign nation, and of a class hostile to the genius of our institutions.

THE DOUBLE STANDARD FOR THE UNITED STATES.

Hitherto the double standard has been alluded to with reference to its great superiority as a measure of value for the exchanges of the world.  I now propose to treat it solely or chiefly with reference to the affairs of the United States.

Many of the considerations adverted to in connection with its superiority as a measure of value for all nations apply with equal, and sometimes more than equal, force to this nation.  Briefly recapitulated they are mainly as follows :

The convenience of employing gold for moderately large payments and of silver for smaller ones induces both metals to be employed as money, whether one or the other, or both or neither, are made the standard of value.  The violent aberrations in the annual supplies of gold, the steadiness of silver, the often deficient and sometimes excessive supplies of the one, and the always ample supplies of the other forbid us to rely upon one as a standard of value to the exclusion of the other, and particularly when that one is gold.  And this objection to gold as the sole standard of value obtains additional force at a time like the present, when its annual supply is diminishing every year, its distribution throughout the world is narrowing, and its production is at the mercy of the arms and legislation of a single powerful nation, and a class hostile to the growth and prosperity of republican communities.

Another basic consideration is the stock of precious metals in possession of the world, the product of many centuries of toil, abstinence, contention, suffering, and sacrifice.  It is this stock which measures prices.  Nearly one-half of it consists of silver.  To demonetize this half will reduce all prices one-half and convulse every country in the world, except those which may refuse to take part in such demonetization.

Beyond these considerations, however, there are others which apply with peculiar force to the present time and to our own country.  These will be treated in their proper order.

EFFECTS UPON THE DEBTOR AND CREDITOR CLASSES.

First, with regard to the effect of the standard on the debtor and creditor classes.

At the outset let it be premised, to the great honor and glory of our country, that in the sense in which the term is used in England we have no debtor and creditor classes.  Notwithstanding the tendency of the national debt and of the other financial scars which the recent great civil conflict has left upon the war-worn features of the nation, we have no permanent debtors and creditors.  The man who is a debtor to-day becomes a creditor to-morrow and the creditor of to morrow becomes the debtor of next day after to-morrow.  We are all in the same boat in this country ;  all struggling, toiling, risking, winning, or losing.  There are no hereditary privileges, no entailed estates, no permanently vested interests.  Misadventure, death, unexpected legislation, in a word, a thousand agencies are continually at work to redistribute wealth and redistribute poverty ;  while a free soil, boundless natural resources, thoroughly diffused and abundant education, and a universal spirit of enterprise contribute to increase our stock of wealth ;  so that, while the gifts of fortune are being continually redistributed, those of intelligence and industry, which are always fairly distributed at the outset, are being added to them—an equalizing reservoir with a primarily equalized and always-rising level.

Therefore, the remarks which will now be devoted to the consideration of the respective equities of the debtor and creditor classes will apply with far less cogency to the affairs of this country than to those of any other.

It was not complained by the debtor class, when the act of 1873 was passed, that it would tend to favor the interests of the creditor class, as it undoubtedly did.  Why was no complaint made ?  Because the act was so drawn that it apparently related only to the technical regulation of the units and gave no notice, either from its title or its text, that that far graver measure, a change of the standard of value, was proposed.  There is no mention of the term “standard of value” in the act ;  there is not even mention made of the silver legal tender dollar which the act abolished.  None but those fully conversant with the history of our legislation upon the subject of money, none but those who were familiar with the details and principles of the long forgotten act of 1791 and subsequent legislation, could have understood the full purport of the important changes of legislation which the passage of the act of 1873 involved.

Moreover, specie payments had been suspended for eleven years, nor for more than two years afterward was there any provision made for resumption ;  and resumption appeared so far off in 1872—that is to say, at the time the demonetization act was introduced into Congress—that the effects of demonetization, coupled with those of resumption, were not realized or anticipated.  The silver dollar had not been coined at our mints for many years and, during the fall of gold subsequent to 1848, had gone out of circulation, except for the payment of ground-rents in Philadelphia and elsewhere, and for the purposes of the Asiatic trade.  The demonetization of the silver dollar at such a period was, like a stab in the dark, unexpected, unseen, and not to be felt until too late to be averted.

There was, therefore, no notice to the debtor class, who are always the poorer class, and therefore the more numerous and wide-spread, the least organized, the least protected by the law, the least courted by ambition or favored by power.

In the absence of such complaint from the debtors in 1873, in the absence of any notice which was practically accessible to them of the supernal importance of the change proposed, what right would now the creditor class possess to object to the rehabilitation and restoration of the double standard ?  Clearly none whatever.

I do not speak now of the creditors of the Government, whose status in respect of the coin in which their claims are to be paid is not proposed to be discussed ;  I speak of creditors generally.  In view of the concealed effects of the demonetization act of 1873, in view of the fact that resumption was not provided for until 1875, in view of the utter absence of complaint from the debtor class when the demonetization act was passed, what right, or even shadow of right, has any class of creditors now to object to the monetization of the silver dollar ?  The demonetization act was not passed at their solicitation any more than it was passed with the knowledge or concurrence of the debtors.  It was not a contract between the Government and the people.  It was a mere caprice of legislation, which could be undone, which in deference to public policy and justice should be undone, and which, under our organic law as I hope presently to show, which raises the double standard far above the province of legislation, must be undone.

But putting all this aside and looking at the question purely as an economical and political one, and without reference either to its merits or its history, both of which so emphatically decide in favor of the double standard, let us see which class it is that, when benefits or advantages are to be dispensed, a wise and particularly a republican Government should favor.

Is it the creditor class, who consist to some extent of capitalists whose estates were hereditary, and of others whose estates were the result of chance, unexpected death, unlooked-for legislation, or extraordinary and unforeseeable events ?  Is it the creditor class, whose garnered capital represents the results of past labor, perhaps of that of the serf, the slave, the overworked, brow-beaten, fagged, and famished victim of toil ?  Is it the creditor class, who are always allied to an effete conservatism, out of which spring caste and aristocracy and feudal privileges and every other odious form of power, to whom legislative favors shall be granted ?  Is it the creditor class, who least stand in need of such favors or advantages ?

To whom shall legislation dispense what small favors it may have to bestow in a country so free and republican as this ?  Shall it be to the class whose tendencies I have depicted or to the debtor class, to the poor, the needy, the temporarily depressed, the cast-down, the struggling, the toiling, the enterprising, the active, the aspiring, the ever hopeful ?

Shall the favors of legislation be granted to those who ask for them and fawn and intrigue for them, or to those whenever ask, nor fawn, nor intrigue ?

Shall they be granted to those whom we here in Congress do not represent, or to those whom we do ?

Shall they be awarded to the many whose servants we are, or to the few whose servants we are not ?  For remember that this is a Government based upon numbers and not upon wealth, and that the States and Commonwealths which are represented in this Chamber are also based upon the principle of numbers, of the greatest good to the greatest number.

If there are favors to be accorded, let the people have them.  It is upon their prosperity and welfare that this country, nay the entire world, essentially depends for its advancement ;  not upon the patronage of a class.

NO ADVANTAGES TO BE GAINED BY EITHER CLASS.

But I deny that there are any favors or advantages to be granted by a return to the double standard.  A single standard confers advantages, advantages to the few, while a double standard divides and distributes advantages.  This is fully illustrated by Professor Jevon’s diagram.  The double standard both gives and takes.  It strikes a medium between the metals, although but one of them may chiefly be employed in the currency and that the one of temporarily the lesser purchasing power.  There is no practical difference between its effects and those which would flow from the adoption of a single metal which is adhered to as the standard forever, a metal which is always in as sufficient supply and as widely distributed and largely held as now are both the metals combined, provided such a metal could be found.  And whatever infinitessimally small difference there is, whatever poor crumb of advantage the restoration of the double standard would afford to the debtor class, it bears no comparison at all with the full ration, the stuffed loaf of advantage, which the continuation of the single gold standard is destined to confer upon the creditor class while the annual supplies of gold are diminishing in quantity.  Whatever advantage there was in the double standard, if it was worth the planning of one class to destroy it, it is due to the interests of the other and the welfare of the nation to restore it.

Moreover, and from a higher point of view, it is in the long run really to the interest of the creditor class, as well as of that larger class who are neither creditors nor debtors, for us to restore the double standard.  It is to the interest of honor, of virtue, of religion, of good will to all men and peace upon earth.  It will tend to save the debtor from despair and the resources which despair invites ;  from dishonest bankruptcy, from flight, from the sequestration of property, from its malicious and revengeful destruction, from popular agitation, agrarian disturbances, and revolution, and from recourse to “interchangeable bonds” or other covert forms of repudiation.

I have said that the practical effects of the double standard would be like that of a single metal which is adhered to forever.  I meant by this that a single metal adhered to forever would have its ups as well as downs, as England has had with gold since 1816.  It was down with the people of that country until about the year 1832 or 1837, then slowly up until 1848, then rapidly up until 1865, and since that year slowly down.  With a double standard England would have had fewer of these vicissitudes ;  with the restoration of our double standard we shall have fewer of them than otherwise.  These vicissitudes are clearly traceable to those disturbances of the double standard which commenced in 1816.  They are still unsettled.  With their settlement, with the return of nations to that dual employment of gold and silver which was never interrupted until England saw fit to interrupt it, will doubtless return that era of monetary ease and serenity which characterized the last century, during which the Bank-of-England rate scarcely varied one-half of 1 per cent.  Bank panics and financial revulsions will disappear, and possibly also the thousand and one mad schemes of irredeemable paper which necessity and despair have driven men to entertain.

But a single standard adhered to forever is something that even were a steady enough and otherwise suitable metal obtainable for the purpose, which is absolutely denied, is not to be looked for.  It is true that England adhered to gold all through that period so trying to her plutocratical rulers from 1848 to 1865, but it was not without having often been on the point of abolishing it and resorting to some substance for money the supplies of which did not increase so rapidly.  The propositions of Cobden and some of the other writers I have quoted in favor of adopting wheat, &c., as standards of value sufficiently attest the alarm of the ruling classes.  But fortunately for the people of England the popular sufferings of the previous period from 1816 to 1830, when gold was yearly diminishing in supply, had gone far enough to produce the reaction which the short-sighted and selfish adoption of the gold standard so richly merited.  A stern remembrance of these sufferings was abroad in the land, and forbade any further tampering with the standard.  The people said in effect, said it in the chartist and the anti-corn law and the reform contentions, “ It was your turn a while since ;  it is ours now.  Stand back, and let’s have fair play !”  The yeomanry of England had arisen from its pauper grave, and the voice of power trembled and was hushed in its presence.  While these circumstances forbade the desertion of that standard which the plutocracy of 1816 had set up for itself, there is no assurance that they would not again be evoked to prevent a change of the standard from gold to silver should the latter once more become the dearer metal.  The plutocracy of England found strong enough arguments to change the standard from the double to the single and from silver to gold.  The plutocracies of the continental countries have changed from one metal to the other whenever it suited, or they fancied it suited, their present interest most.  Neither, with the increasing advantages and power which the retention of the gold standard would confer upon our rising and promising regiments of plutocrats, would this class fail to make similar attempts in this country, and particularly if the easy success they met with in 1873 is suffered to stand unrebuked.  In effect, the standard would be changed whenever there occurred a marked change in the value, of the metals.  We should have a double standard, indeed ;  only, instead of standing upon two supports, it would rest upon one.  Instead of having its center of gravity always midway between its supports, it would have one that rocked to and fro, and at every oscillation tore away a portion of those foundations of equity upon which alone republican institutions and republican government may permanently rest.

RESORT TO A GOLD STANDARD INEVITABLY INCITES PAPER INFLATIONS.

An extremely important consideration has been adverted to and demands some elaboration.  It is this :  that any attempt by force of law to substitute gold for silver in the money of a country, at a time when gold is becoming scarcer, either absolutely or relatively as to silver, must surely result in producing paper inflations.  Paper notes, either representative or unrepresentative, are sure to be issued as substitutes for gold as it becomes scarce.  Any attempt to artificially enhance the purchasing power of gold, either by demonetizing or partly demonetizing silver—and the act of 1873 is of this nature—is certain to invite or prolong the issuance of paper notes.  By artificially enhancing the purchasing power of gold the profits arising from the issuance of paper notes are enhanced, and the pressure on the part of banks and individuals to obtain authority to issue them, if indeed the decline of prices and consequent stagnation of industry do not induce the Government itself to issue them, will become too great to be successfully resisted.  This authority once obtained, or this power once exercised, it always proceeds to extremes.  Neither reason nor prudence sets a limit to the emission of paper notes ;  the emission usually continues until it ends in general bankruptcy.

This, then, is what the purblind, short-sighted advocates of a single metal, when both metals together are barely more than sufficient to prevent the world’s stock of coin from falling behind the increase of population—this is what they would invite.  They would press the blade down to the point at which it is bound to spring up ;  spring up in defective and excessive credit, in speculation, in madness, in bankruptcy, and in crime.  They would twist the thumb-screw down until the debtor was reduced to poverty and despair, forgetting that they themselves more than any class of persons were interested in keeping him solvent and prosperous.

The lesson is the same in all artificial or forced systems of currency.  Money came into existence freely, and it has never yet yielded up its birthright.  Legislation should not, legislation cannot, enthrall it.  Beyond the scope of temporarily fixing the relation, which should be the mean natural or market relation, between two metals, both of which are indispensable for the purposes of exchange ;  beyond manufacturing and unitizing coins and punishing counterfeiters ;  in short, beyond the exercise of that surveillance which may fitly be termed the police of money, legislation has neither rightful function nor power.  All it can do beyond this is to confuse, to deceive, to injure, to disturb, and to invite loss, discontent, turbulence, violence, and anarchy.

Gentlemen may fancy that they are playing upon a very simple instrument when they undertake to meddle with money.  But they are mistaken.  The apparently simple instrument is an organism of the most complex character, the result of thirty centuries of growth and development, and, like all highly-developed organisms, impatient of control or restraint.  It recoils from the first touch of an unaccustomed hand ;  it gives forth alarming sounds ;  and if further meddled with, it revenges itself upon its disturber with overwhelming ruin.

DANGER OF ABANDONING THE DOUBLE STANDARD.

It is impossible to resume specie payments in gold alone.  Let us try to grasp the full significance of this proposition, if even it be only in one respect—that of the capacity of the mines of the world to supply it with gold enough to measure its exchanges without the co-ordinate employment of silver.  Given bills of exchange, given certificates of deposit, given bank bills, given Government legal-tender notes, given railways, telegraphs ;  in short, any form of representative or non-representative money or of agencies for increasing the rapidity of its circulation ;  given all these, and the world now employs them all whenever and wheresoever they can be employed with safety or advantage, and often when neither one nor the other is secured—given all these, and yet a certain quantity of the precious metals is needed at bottom, as the foundation upon which the entire basis of credit, safe and unsafe, must rest.  Now, how much does this indispensable quantity of the precious metals amount to at the present time ?

There is no difficulty answering this question.  The world’s stock of coin is $5,700,000,000, of which nearly one-half is of silver.  Of this sum, Europe, America, and the rest of the occidental world employ about $3,600,000,000.  Previous to the late partial demonetizations of silver in the Latin Union, and in Germany and the United States, these $3,600,000,000 consisted of, let us say, $2,000,000,000 of gold and $1,600,000,000 of silver.  They now consist of, say, about $2,400,000,000 gold and $1,200,000,000 silver.  By continuing to exclude silver from equal participation with gold in the currency of the United States, and attempting to resume specie payments, we occasion a demand for, say, $350,000,000 of gold wherewith to pay off the greenbacks and furnish bank reserves, and $50,000,000 of silver in lieu of the fractional notes.  If we could obtain these $400,000,000 of metal without drawing it from other countries in Europe or America, they would add so much to the stock of coin in the occidental world, which would then be $2,750,000,000 of gold and $1,250,000,000 of silver.  This is the answer to the question so far as the occidental world is concerned.  The quantity of the precious metals needed for money and the basis of credit in the occidental world—that is to say, the quantity needed to maintain prices at their present level—is at least $4,000,000,000.  Of this sum the United States, if it succeeds in resuming specie payments, will hold about $400,000,000. Now, let me ask, in the first place, where these $400,000,000 are expected to come from ?  Gentlemen may dispute the premise and contend that no such sum as $400,000,000 is necessary.  They may point to the fact that just previous to the time of the suspension in 1862 the entire stock of coin in this country was estimated at not over $300,000,000, (Finance Report, 1861, pp. 25 and 62,) of which probably not over three-fourths or $225,000,000 were in gold.  Granted that this was the fact, and I have no doubt it was, it must not be forgotten that since 1862 the population of this country has increased 50 per cent., and its exchanges fully 100 per cent.  What is the proof of this ?  Simply that in 1861 our whole circulating media consisted of $300,000,000 in coin and $200,000,000 of bank-notes, which circulated within limited areas at or nearly par ;  whereas now it consists of not more than $140,000,000 of coin and some $750,000,000 of Government and bank paper, the latter circulating (throughout nearly the whole country) at about 87½ cents to the dollar ;  say total circulation at par equal to $800,000,000.  This is 70 per cent. more than the par circulation of 1861 ;  an incontestable proof that exchanges have increased in volume at least 70 per cent.  Taking into consideration the superior activity of the legal tender and national-bank notes over the old State-bank notes, and the improvement and development of railways, telegraphs, clearing houses, and other mechanisms of exchange, since 1861, it cannot he doubted that the bulk of to-day’s exchanges in this country is at least double that of a corresponding day in 1862.  Suppose, however, we put it at only 70 per cent. higher ;  then, in order to resume specie payment upon at least as firm a footing as specie payments stood in 1861—and the universal suspension of the banks toward the end of that year proves that it was not so firm a footing as could have been wished—we shall require at least 70 per cent. more specie than we employed in 1861.  Add 70 per cent. to $300,000,000, and you have $510,000,000.  Allow $140,000,000 for specie already in the country, in the banks, in private hands, and in the vaults of the Treasury, and you will need $370,000, 000 in order to resume.  Of this $370,000,000 the Government will need, perhaps, about $350,000,000, and the banks the remainder.  But the apportionment is of no consequence in this connection.  The substantial fact is that in order to resume specie payments we shall need $370,000,000—say, for round figures, $400,000,000—of specie, of which, under the operation of the act of 1873, about $350,000,000 must be in gold.

I now ask where are these $350,000,000 expected to come from ?  Again, do I fancy I hear interpellation.  I shall perhaps be told that a proposition is even now before Congress, a proposition from careful and able sources, and boasting the indorsement of high financial authority, a proposition which assumes that $100,000,000 in gold will be sufficient wherewith to enable the country to return to specie payments.

I refer to a speech which has been made in the Senate.  But I warn gentlemen to beware of making a mistake in respect of this matter, for a mistake will set us back many years.  The British government tried to resume in 1817, after a suspension of twenty years, but it failed, and resumption was deferred for seven other years, untill 1824.  If we try to resume in 1879 with $100,000,000 and fail, we maybe set back a quarter of a century.  Moreover, if we fail, somebody—most probably some clique of stock-gamblers—will make 15 or 20 per cent. out of the operation.  How ?  Easy enough !  Knowing that $100,000,000 was the limit of the Government’s ability to pay, they could easily make arrangements with the banks and depositories throughout the country to withdraw $100,000,000 of greenbacks on the eve of the day of resumption, and present them for payment at the Treasury.  After having drawn the last dollar of specie out of the latter they could, by presenting an additional note, compel it to suspend again.  Then gold would go up once more, perhaps to the full extent of the figure from which it would have fallen, and the clique could sell their specie in the market and realize their profit.

This is not only a possible occurrence ;  it is a probable one—a highly probable one, almost a certainty.  There is nothing in the world to prevent it, except two things :  First the inability of a clique to raise $100,000,000 ;  second, the possibility that the Treasury, in offering to redeem its issues, may arbitrarily and unexpectedly prefer notes of particular numbers or dates of issue.  But these objections are frivolous.  Experience has demonstrated that there is no difficulty whatever on the part of stock-jobbing cliques to raise $100,000,000, while, with regard to making preferred credits of certain notes, the Treasury has no authority to do so, and if it had, the exercise of such authority would be almost certain to be defeated through treachery.  Secrets so weighty as this one would be, are impossible to keep.  Even if it did not leak out, the clique would be certain to monopolize the Treasury doors to the exclusion of all comers.  In short, wealth, power, organization, experience, and special training would be ranged on the one side, against a scattered and indifferent population on the other ;  and who can doubt which would win ?

Finally, even if carried out successfully, the exercise of such authority would be unlawful and unjust.

We cannot resume with $100,000,000, nor with $200,000,000.  Why, gentlemen, we have have had $140,000,000 in specie in the Treasury on several occasions during the past ten years.  If it is practicable to resume now with $100,000,000, why was it not practicable on those occasions with $140,000,000 ?  It was certainly not for lack of desire on the part of the Secretary of the Treasury, but simply because both the Secretary and Congress plainly saw that the thing could not be done.

It is better to be on the safe side of an operation of this magnitude and importance.  It is better to have a dollar more than is necessary for the purpose of resuming, than a dollar less than is necessary.  We cannot expect to resume upon false pretenses.  We cannot, and if we can, we ought not, hoodwink the people, or run the risk of failing, and, therefore, of unsettling values for an indefinite period in the future.  In order to resume we must pay dollar for “dollar,” and dollar for dollar, as the law now stands, means at least $350,000,000 in gold.

And now for the third time I ask, where are these $350,000,000 to come from ?  Gentlemen may differ with me as to the sum needed for resumption.  Some may believe $200,000,000 are enough, others may even consider $100,000,000.  I have briefly discussed these opinions, and do not believe that less than $350,000,000 will suffice.  With only $129,500,000 of Bank of England and $144,000,000 of provincial banknotes afloat in 1815, total $273,500,000 in paper, England required over $270,000,000 in coin before she was enabled to resume.  After you shall have resumed, less coin may be required in the country ;  but in order to resume, you will require a dollar in coin for every dollar of Government paper afloat, and, in my opinion, and, as shown by the experience of England, you will also have to give the national banks time to acquire an equal fund of specie before they can resume ;  otherwise, you may bankrupt every one of them.

Confining myself to the strict requirement of the Government, I again ask where is the requisite specie to come from if we are to depend upon gold alone ?

The annual gold product of the world is given at $97,500,000, of which let us say the whole amount can be retained in the Occident, which all will admit is a violent stretch of probability.  It is estimated that considerably more than one-half of this supply is needed for the arts, for gilding, plating, watch-case making, jewelry, and the like.  (Seyd.)  Let us limit this demand to one-half.  This would leave a supply of say $49,000,000 of gold per annum available for the maintenance and increase of money.  The maintenance of money costs about 1½ per cent. per annum in abrasion and loss.  One and a half per cent. on the present occidental stock of $2,600,000,000 gold amounts to $39,000,000.  This is the quantity of gold needed every year to maintain the existing stock of gold coin in the Occident.  Deduct this from $49,000,000, the total annual supply available for money, and there would remain a surplus of $10,000,000 a year.  It is out of this surplus that our $350,000,000 must come, unless it comes out of the existing stock in other countries, a point which will be considered further on.

Upon the most favorable hypotheses, after according every debatable point in favor of the feasibility of the proposition, we should have to wait nearly thirty-five years to accomplish it in practice ;  for if we managed to obtain every ounce of gold which can be spared from the supplies of the world for the next thirty-five years, we shall barely have secured enough.

There are considerations, however, which render some of these hypotheses untenable.

The entire population of the occidental world is increasing at the rate of 1 per cent. per annum.  (Essay on Population of the Earth in New York Independent.)  Even if its exchanges or their bases increased no faster than its population, this fact would require an annual addition of 1 per cent. to the stock of coin.  At the present time this would absorb nearly $3,000,000 per annum.

The demand for gold in the arts will undoubtedly increase at, at least, an equal rate.  The probability is that it will increase, because it has increased at a greater ratio.  Limiting it to this ratio, it will amount to nearly another $3,000,000 per annum.

The annual product of gold throughout the world is diminishing.  It was $182,000,000 in 1852 ;  it is given at only $97,500,000 in 1895.  This is a decrement of over $3,500,000 per annum.

On account of these considerations we must subtract about $9,500,000 per annum from the world’s available annual surplus of $10,000,000, leaving but $500,000 per annum to spare.  At the rate of $500,000 per annum we shall need seven hundred years in which to garner up $350,000,000, the amount necessary wherewith to resume payment in gold.

The possibility of performing even this feat rests upon the assumption that Austria, which has a forced paper currency ;  and Italy, which has a forced paper currency ;  and Russia, which has a forced paper currency ;  and several other countries which have forced paper currencies—countries which in the aggregate contain one-half of the entire European population of the globe—will be content to wait until the United States gets its quantum of gold wherewith to resume, before they will make any move to effect a similar reform in their own currencies.  It rests, also, upon the assumption that the people of the United States will wait during these years for the consummation of resumption ;  wait without complaint, without further legislation, without getting tired, or yielding to the clamors of interest, or prejudice, or ignorance.

RESUMPTION ON A GOLD BASIS IMPOSSIBLE.

I tell you, gentlemen, the thing cannot be done !  Resumption in gold is out of the question.  It is not practical financially ;  it is not practical metallurgically ;  it is not practical internationally ;  it is not practical politically ;  in short, it is not practical at all.

I can no longer wonder that the interchangeable theory or any other form of paper lunacy has obtained a footing in the land.  So long as intelligent and educated men will persist in attempting to do that which the most unintelligent and uneducated plainly perceive to be impossible, so long will demagogery and roguery have a footing.  “ My plan,” they will say, “ is at least as good as theirs ;”  meaning that of the gold resumptionists.  And I must confess that I assent to their proposition.  One plan is quite as good as the other, and not a whit better.  They are both utterly impracticable, and no attempt to carry out either one of them can have any other than one ending :  failure, violent fluctuations, and unsettlement of values, distress, commotion, and the grave dangers that lurk beneath all violent upheavals of the body-politic.

Them are two forms of reply that I anticipate to the assertion that it is impossible in less than a great number of years to obtain the requisite supply of metal wherewith to resume specie payments in gold.  One is if money is merely a measure of values, why will not $100,000,000 or even $50,000,000 measure values as well as $350,000,000 or any other sum ?  The puerility involved in this reply needs little further response than what has already been accorded to it in a previous portion of this speech.  If there was no accumulated stock of coin in the world upon which values throughout the world already rested ;  if there were existing no contracts, rents, leases, bonds, mortgages, and the like, executed in the past and maturing now, or executed now and to mature in the future ;  in a word, if the world was born to-day, $50,000,000 would in theory answer quite as well for the entire money of this country, ay, even of the whole world, as any other sum.  But the world was not born to-day, nor yesterday, nor the day before.  The stock of coin which forms the substratum of the world’s prices is the accumulation of fifty centuries, and bargains are being made every day—for example, Government and corporative debts—which cover long periods of time.  To disturb these prices and contracts by forcing the exchanges of the country to be measured by a sum of specie so vastly less than its usual measure, as $100,000,000 or even $200,000,000 would be, would be tantamount to the violent destruction of vast interests and a wrenching of all the relations of industrial and social life.  Imagine workingmen’s wages at twelve and a half cents a day in this county, while they stood at $2 in France or England.  Imagine our railway corporations forced to pay their rents on long leases and the interest on long bonds in daily appreciating gold.  Would not this be quite as unjust as, on the other hand, by issuing a daily depreciating interchangeable token to gratuitously save them from that disaster ?

The other reply that I anticipate to the objection that we cannot obtain gold enough wherewith to resume is this :  “ We can obtain the gold from Europe.” Can we ?  Let us examine this point.

CAN WE GET GOLD ENOUGH FROM EUROPE WHEREWITH TO RESUME SPECIE PAYMENTS ?

When a merchant proposes to buy a large quantity of a given article, his first thought is to compute how much his demand will raise the price of the article during the progress of the purchase.  The first element in this calculation is the stock on hand, the next is the current supply and demand.  It is the same with the stock-operator, in short, with dealers in all commodities.  Why should it not be the same with Government, when it goes into the market for $350,000,000 of gold ?

The current demand and supply of this article has been discussed.  There is no stock of it on hand in the same sense that there is a stock or accumulation of merchandise.  The stock of merchandise is the unused portion—the surplus.  There is no unused stock of gold coin in the world, no surplus.  It is all in use to support prices ;⁶ withdraw it, and the whole fabric of prices and credits falls to the dust.  The stock of gold in Europe and the countries settled by Europeans amounts to about $2,600,000,000.  On every one of these dollars stands a vast and almost toppling superstructure of credits in every conceivable form.  You now propose to purchase one-eighth almost one-seventh, of this entire basis of the rest of the occidental world’s exchanges and credits.  Do you believe you can do it ?  Do you believe you can offer your bonds or your merchandise in the markets of Europe low enough to purchase with them $350,000,000 of gold ?  Do you suppose that United States 5 per cent. bonds at par, or 90, or 80, or even 70, will accomplish it ?  Or, to put it another way, suppose you determine not to sell your bonds under par ;  do you suppose that you can place them at any rate of interest to which the self-respect of this country would submit, or which its resources would justify ?  Do you suppose that when you commenced to draw gold from Europe, the Bank of England and other like institutions would not raise their rate of interest to 7, 8, 10, or even 12 per cent.?  You know that this is always done when specie is observed to be flowing out.  You know that it must be done.  And do you suppose that when it is done you can place your bonds at any lower rate of interest than the bank rate ?  Do you imagine that American produce or manufactures offered to Europe at three-fourths of their present market prices will do it ?

Well, then, I do not.  To induce Europe and the European world to part with one-seventh of its measure of exchanges and basis of credit within the time fixed for the resumption of specie payment in this country you would have to sell all your movables—for remember that lands, which constitute more than one-half of our wealth, cannot be exported—at prices which would bankrupt every industry in this country.  You might get $10,000,000 or $20,000,000, or perhaps even $50,000,000 in gold.  By dint of hammering the bond market (and you would have to authorize the Treasury to sell below par, at any price the bonds would fetch) during the two years and a half now remaining you might even get $100,000,000 of metal ;  but when you shall have taken $100,000,000 away from Europe you will have produced a commotion and a fall in prices on the other side that, if it did not lead to the closure of the European stock markets to American bonds, would certainly precipitate a tremendous financial convulsion.⁷  As for this side, the effects would be no less alarming.

Recollect, gentlemen, that the problem is that of taking $350,000,000 in gold out of a fully occupied and heavily over-topped basis of only $2,600,000,000 in the occidental world.  It is not the whole stock of metal, both silver and gold, that we can now call upon, as in former days.  Silver has been demonetized in several countries of Europe ;  it has been demonetized here.  We have thoughtlessly so worded our laws that, until we alter them, we can only pay in gold.  The Latin Union, Germany, and Scandinavia, together with England and Portugal, &c., have so worded their laws, whether thoughtlessly or not you can decide for yourselves, that gold alone is the legal tender in those countries for the payment of large sums, and its value is the standard of all payments, large or small.  We would demand of them one-seventh of their entire stock, which now, unlike the period from 1848 to 1865, is not increasing ;  which, in fact, has a strong tendency to decrease.  Who, under these circumstances, will have the hardihood to assert that this problem is a practical one ?  And who will venture to deny that, if it is solved at all, it can only be solved at a sacrifice more overwhelming than any which has presented itself to the consideration of financiers since the study of money, its functions and its vicissitudes, first became a science ?

OUR INTEREST CHARGE ANOTHER OBSTACLE TO RESUMPTION IN GOLD.

On top of the many insuperable difficulties which lie in the way of resumption in gold lies another one which is as great as any of them, and which you would augment by attempting to resume in gold.  I allude to the interest on the public debt, which debt is very largely held abroad.  This interest now amounts to nearly $100,000,000 per annum.  By selling bonds to the extent of $350,000,000, say, at 10 per cent.—for it is perhaps hopeless to expect to do it at a lesser sacrifice—you will add $35,000,000 a year to your gold interest debt, and those $35,000,000 to the portion held abroad.  Where are these $35,000,000 to come from ?  Where are the whole $135,000,000 to come from ?  Your annual interest charge will alone amount to more than the whole world’s product of gold.  So far as the portion of it which is paid to bondholders in this country is concerned, it may stay here and be thrown upon the market and purchased by the Government, and so used over and over again, as is the case now.  But not so with the portion that goes abroad.  You cannot hope to get any of that back without selling the merchandise of the country at lower rates than Europeans will be willing to take for similar merchandise of their own production ;  and after you shall have drained Europe of one-fifth of its specie, (one-seventh of the whole occidental world’s, or one-fifth of Europe's,) prices will fall to a very low point there, and you would have to sell very low to compete.  Are your farmers ready to deliver their wheat in Europe at the rate of forty or fifty cents a bushel ?  Are your manufacturers prepared to sell their cotton prints at two cents a yard ?

I warn you, gentlemen, that the attempt will be futile ;  that the thought is absurd ;  that the whole theory of endeavoring to destroy one-half of the world’s accumulation of the precious metals or of taking part in the attempt, as you would do by attempting to resume in gold alone, is sheer madness.

COMPARATIVE EASE OF RESUMING IN THE DOUBLE STANDARD.

Now let us contrast with this impracticable scheme the ease of resuming specie payments in both the metals, or on the basis of that double standard which the world has used for thirty centuries, and after an endless variety of experiments, without being able to dispense with it or even venturing to trifle with it until Change Alley found that money was to be gained by inducing these experiments to he made in England and on the Continent.

If we resolve to resume in gold and silver, instead of having to draw upon a fund of $2,600,000,000 and an annual supply of $97,500,000, as in the case of gold alone, we would have a fund of $5,700,000,000 and an annual supply of $170,000,000 to draw upon.  Not only is the fund more than twice as great, and the supply nearly twice as great, but both the fund and the supply are more widely distributed.  Instead of having to draw upon the Occident alone, we would have the whole world to draw upon.  Three hundred and fifty millions in gold form one-seventh of the entire stock of that metal ;  the same sum in both the metals forms less than one-sixteenth of the entire stock.  If a draught of one-seventh would occasion a fall in prices of 15per cent., a draught of less than one-sixteenth would occasion a decline of less than 6 per cent.;  and while 15 per cent., during two and a half years—equal to 6 per cent. per annum—would sweep away all and more than all the profits of industry, which, on the whole, do not net over 3 or 4 per cent. per annum ;  6 per cent. in two and a half years, equal to 2½ per cent. per annum, would enable us to get back to a sound measure of values without the loss of more than a very small portion of our current industrial profits.

It has been objected to the monetization of silver by the United States that the Comstock lode was vomiting forth a vast surplus of that metal.  It is only to be regretted that this is not the fact ;  for if gentlemen will consult the statistics of the precious metals, they will perceive that since 1852, when the product of gold and silver was $223,000,000, the annual supply has fallen off so that in 1875 it was but $170,000,000, and in 1876 will probably not be more.  There is therefore great danger of a dearth of metal, and it would be fortunate if the yield of the Comstock lode were more prolific than it is.

My fear is that this prolificity, such as it is, will have reached its maximum within the present year.  It is the candid opinion of a man who has devoted nearly thirty years of his life to the practical working and management of gold and silver mines that, so far as the Comstock lode is concerned, and he is entirely familiar with this great silver deposit, we have arrived at the beginning of the end.  We now know the probable dimensions and bearings of the ore-producing chimneys, and can very plainly foresee their early exhaustion.  Whatever the fact may be with regard to the Comstock lode, and at best it is but matter of opinion, we know that for the present, and so far as we can see ahead, the combined annual product of the two metals throughout the world, as compared with late years, is decreasing.

If now the question be asked, Where will you get your $350,000,000 from upon which to resume ? the best answer we can make is :  From the world at large ;  from a stock of $5,700,000,000 in gold and silver coin ;  from an annual supply of $170,000,000 ;  from Europe, from Mexico and South America, from Asia, and, readiest and best of all, from our own mines.

In buying metal from the rest of the world, as we should have to do had we no great mines of our own, we should have to buy it with the accumulated charges of transport and coinage upon it.  In buying it from our own mines we can buy it at its worth upon the spot of production, without transportation, or coinage, or interest, charges upon it.

RESTORATION OF THE DOUBLE STANDARD AND OUR MINING INTERESTS.

And here let me say that the mining interests of this country are represented not, as some persons absurdly suppose, by a few millionaires, but for the most part by a vast number of persons, with no other resources than their intelligent minds and willing hands, who work in the mines for daily bread, and by a scarcely less numerous class of small proprietors, themselves also workingmen, who hold each a few shares in the mines in which they are employed.

The miners of the West are among the most stalwart and spirited yeomen in the world.  They are inured to danger and toil, and are brave, strong, intelligent, and self-reliant.  In weary processions across alkaline deserts, under equatorial and blistering suns, across mountain and valley, desert and plain, amid the attacks of savages and the fevers of tropical swamps, they marked the path and blazed the trail of western empire.  They overcame every hostile condition and builded, on foundations of liberty and justice, three great States in your western border.  They conquered the Genius of Sterility in its stronghold, built cities 10,000 feet above the level of the sea and hewed out thrifty workshops twenty-five hundred feet below the surface of the earth.  They have organized mining with the exactness and thoroughness of science, and in this respect placed this country in the vanguard of the nations.  They have neither avoided your tax-gatherers, sought your subsidies, nor demanded your protective legislation.  Nor do they do so now.  They only ask that you shall legislate in respect of this great question in view of the history of the world, the Constitution of the country, and the facts that surround you.

While the miners of this country have the highest right both by reason of their birth, their indomitable love of freedom, and the perilous nature of their industry to demand both favor and advantage from the Government, they do not ask for either.  But they demand that the Constitution shall be respected and the laws enforced under which they established the great industry which they represent.  They know full well that the world’s accumulated stock of silver is too vast and the annual dimunition from abrasion and loss too great, to fear any permanent or continued fall in the price of that metal.  They know that silver must continue to remain the money of a main part of the world for centuries to come, and that it cannot be dispensed with in any part of the world.  They understand too well the fluctuating character of the supplies of gold to fear that this metal will permanently usurp the place of silver in the money of the world or in the money of any considerable part of the world.  They perfectly well comprehend the fact that the present slight fall of silver is due to the mad attempt to demonetize it wholly or partly in the countries of the Latin Union and Germany, and are not at all alarmed, either as to the success of this attempt or the future price of silver.  They believe as Jefferson said in discussing this very same subject nearly a century ago, that the world’s long and constantly-tried experience of silver is a kind of precedent which it is tolerably safe to trust to.

Our miners understand that silver is of constant, steady, and moderate supply ;  keeping pace with the world’s expanding industry and no more.  They understand that gold is of inconstant, fluctuating, find either superabundant or inadequate supply ;  and they have no fears as to the marketability of their silver product.

The question before us is therefore not one of favor or advantage to any industry, even though that industry be largely American and of a nature and importance that should command for it every advantage which legislation could confer.

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1 The authorities on this subject, namely, Harris, 1757, Chevalier, 1857, MacLeod, Putterson, and Seyd, disagree as to the legal position of the standard of England from 1717 to 1816.  The truth appears to be that the standard was the double one.

2 After having cut off her own tail, Belgium through the agency of her distinguished plutocratical politico-economist, M. Gustave de Molinari, endeavored to induce France to do the same thing.  This effort was made through the medium of the pages of the Economiste Belge of 10th February, 1857, in which M. Molinari recommended France to demonetize gold by reducing her gold coins to tokens, and adopt the single silver standard after Belgium.

3 In Jevon’s latest work Messrs.  Scrope & Lewis are quoted as in favor of adopting the average of one hundred articles of produce as the measure of value.

4 If legislation were wholly removed from the subject of money except to announce and fix the relation of the metals from time to time, and generally as to police functions, we would have both the metals in circulation plus an amount of free-bank paper which would bear an almost constant relation to the sun of the metals.  The measure of value in such case would be easy to ascertain ;  as it is, nothing is more difficult.

5 Behm and Wagner sum up the population of the world for 1872 at 1,391,000 000, but in this they include China at 446,000,000.  There is no authority for this extravagant figure besides that of the Chinese mandarin’s communication to Lord Macartney in 1795.  It was therein stated at 333,000,000, which was probably excessive by more than one-half.  Consult the numerous and munch more reliable estimates in Malte-Brun’s Geography.

6 The legal-tender portion at a full ratio of activity ;  the subsidiary coins at a lesser rate.

7 When the negotiations were going on in London for the sale of the largest amount of United States bonds that has ever been sold there at one time, it was foreseen by the Bank of England that a quantity of coin would accumulate as the proceeds of these bonds to the credit of the Government of the United States.  As a matter of fact there was an accumulation of about $21,000,000.  The Bank of England, foreseeing that there would be an accumulation of coin to the credit of the United States, which might be taken away bodily in specie, gave notice to the officers of the Treasury Department of the United States that the power of that institution would be arrayed against the whole proceeding unless we gave a pledge that the coin should not be removed, and that we would re-invest it in the bonds of the United States as they were offered in the markets of London.  We were compelled to comply.  (Speech of Senator BOUTWELL, formerly Secretary of the Treasury.  Congressional Record, Forty-third Congress, first session, volume 2, part 6, page 23 of Appendix.)