RESUMPTION AND THE DOUBLE STANDARD :

RESTORATION ON THE DOUBLE STANDARD A NATIONAL AFFAIR.

The question is one of advantage to the nation, to society, to the world at large.  It has to deal not only with the industrial interests of to-day, but of all time.  It is the question of the measure which shall be applied not only to the labor of the present time, but to the labor of all time past, the labor of all time to come.  It proposes to gauge this labor by the measure which has gauged it forever, by the gauge that can measure it most fairly and equitably ;  by the only gauge that can truly measure it at all ;  to wit, the double standard of gold and silver.  It is opposed to the impracticable project of measuring it by a new and smaller measure ;  by an inconstant, a fluctuating, a monopolized measure.  This is the nature and magnitude of the question before us ;  a question to the elucidation of which the most intellectual men of all nations and in all times have largely devoted their attention ;  a question which lies down at the very basis of property, of industry, and of progress ;  a question which not only affects the wealth of nations, the rank of nations, the welfare of nations, but the very conditions of social existence itself.

It is too large, it is too grand a question to be belittled by any such vulgar and familiar approaches as have, I regret to say, been made toward it by one or two gentlemen who have alluded to the subject in the House of Representatives.  Fifty centuries of the world’s accumulated wealth are before us to be answered in our deliberations upon this question ;  fifty centuries of mute, but colossal interrogatories ;  fifty centuries of trial, of suffering, of toil, of conflict, of ever-perishing and ever-renewing human life, every element of which has contributed, one way or another, to mold the ponderous scale of the precious metals in which the work of the world is measured, and which some madmen would raise their vandal hands to destroy.

These men are chiefly the plutocrats of England and Germany.  They want the debts which the nations of the earth owe to them, and which were made in Manchester cottons and Birmingham wares, to be paid not in the base currencies in which they were nominally or really engendered—not even in good money, in gold and silver, which is the money of the world, and has been so for all time—but in that particular metal which they have observed is for the time diminishing in supply and daily becoming more difficult and expensive to purchase.  To accomplish this object they are ready to revolutionize the currency of the world ;  to help demonetize and advise others to help demonetize a stock of over $2,000,000,000 of silver, the precious moiety of the world’s standard of values, stored up from the ages, and in its place to set up their own moon-calf of gold, recking not how much suffering the inadequate substitution will occasion.

LET ENGLAND AND GERMANY ADHERE TO THE GOLD STANDARD IF THEY WILL.

The worst punishment which can befall this reckless trifling with the interests of society is that which it itself invites, and which must befall it if the rest of the world refuses to take part in such trifling.  By leaving England and Germany to the enjoyment of their self-erected standard of gold, it would result in the end that gold would become cheaper in those countries than elsewhere and prices would rise therein.  The co-ordinate use of silver with gold in the rest of the world would tend to drive gold into England and Germany, where it would accumulate and become cheap.  Gold would inevitably flow into the countries where it was most in demand, viz, England and Germany, just as now silver flows into Asia.  And as silver has accumulated in Asia and enhanced the prices of commodities and services in that portion of the world, so would gold accumulate in England and Germany and enhance the prices of commodities and services there.  When this happened, and the plutocrat perceived that his fund or his income of gold would purchase less of other men’s labor than before, his punishment will have arrived, and richly will he have deserved it.

What will then be his resource, his only resource from the loss of purchasing power ?  The same resource to which his narrow selfishness has always instinctively led him :  that of endeavoring to change the standard to the dearer metal, which will then be silver.  He will then have to purchase his silver from us, as he now asks that we shall purchase his gold from him, and we shall be able to fix as high a price upon silver as he would now fix upon gold.

ADHERE TO THE GOLD STANDARD IN THE UNITED STATES IS TO GRATUITOUSLY ENHANCE
THE MORTGAGES UPON THE NATION.

The true meaning of the sinister advice which we receive from this class is that by adopting the gold standard we should gratuitously and needlessly enhance the value of the mortgages which, in the shape of Government bonds, they hold upon the industries of this country.  We are not ashamed of these mortgages.  Though they were given for inadequate consideration, yet they were given in a time of peril and uncertainty.  We have not the slightest intention to repudiate them.  We have already paid upon them in interest vastly more than their entire face, and shall continue to pay this interest promptly and as fast as it comes due.  But, while it is neither to our taste (for we are a proud nation and disdain to submit our honor to the scant measure of a doubtful law) nor to our interest to repudiate our obligations, we do not propose to go beyond the limit which our organic laws have set to the standard in which debts shall be paid.  We do not propose by resuming specie payments in gold to increase the demand for and purchasing power of gold, and thus enhance the value of the mortgages upon our industry.  The law of this country made our standard the bi-metallic one of gold and silver.  This is not only the law of the United States ;  it is the law of nations ;  the law of ages ;  the law of the world.  We refuse to be led up and down hill, first into one standard and then into the other, at the beck of a short-sighted and selfish class of men, to whom the world owes no debt of gratitude.  We refuse to pull up and destroy our ancient moorings.  We refuse to part with the ages and with the rest of the world, to which both our present and our future interests unite us ;  to the rest of Europe, to South America, to Africa, and to Asia.  We propose to stand where we have always stood, where the nations stand, where stands the world ;  we propose to stand on the double standard, the standard of the populations, the standard which the natural fitness and general distribution of the precious metals has indicated to be the only safe one.

GOLD AND SILVER MINING UNPROFITABLE, AND TO INTERRUPT IS TO DESTROY IT.

There is great danger, I might even without exaggeration say, appalling danger, in abandoning the double standard.  This arises from the fact that the mining of the precious metals is, on the average, always conducted upon the verge of loss.  Therefore the moment you demonetize one metal you temporarily cheapen it, and help throw it out of production.  To stop production is the work of an instant, to re-instate it again is the work of years ;  and when, as is bound to be the case, the discarded metal is once more in demand, it is the work of long time to obtain sufficient supplies of it again.  We know that in the case of the Siberian gold mines over three thousand years elapsed between the time of their abandonment (by the, Persians) and reoccupation, (by the Russians;)  in the case of the Spanish silver mines fifteen hundred years ;  in the case of the Mexican silver mines, during the first half of this century, some twenty or thirty years.  It matters not what the cause of these several abandonments was ;  whether it was wars, or the insufficiency of known mechanical resources, or trifling with the standard.  It is sufficient if we know that no matter what cause put an end to the production of the metals, the most urgent after-demand for the abandoned metal was inadequate for a long period to stimulate its reproduction.

When mines are abandoned water flows into them and fills them up ;  earth, stones, and other débris clog and choke them, and frequently bury them up out of sight and even remembrance ;  the supporting timbers of galleries rot away, the galleries themselves fall in ;  and these circumstances often render it practically impossible to reopen the mines.  And you cannot find silver and gold mines at pleasure, as you can wheat-fields or suitable sites for mills or manufactories.  The whole surface of Central America and California and the Sierra Nevadas has been ripped and torn up in the search for the precious metals.  The valleys have been explored, the streams turned from their natural courses, the hills washed away with artificial hydraulic power, the mountains honey-combed with shafts and tunnels.  Not a district has been left undisturbed.  The Pacific coast of America has been ransacked in modern days even more thoroughly than were Northern Africa and the Spanish Peninsula in ancient days ;  for this ransacking has been done by the hardiest among the foremost races of the world.

But in the exploration of natural resources than has no pity for nature or posterity.  He exploits the land in the pursuit of agriculture as our Virginian forefathers did the noble valleys of the Atlantic coast in the cultivation of tobacco ;  as the planters of the cotton States did the table lands of Georgia and Alabama and the bottom lands of Mississippi in the cultivation of cotton ;  as the western men are now doing the richly-wooded lands of their country, for the sake of the timber which stands upon them.  In a similar way have the Pacific States been exploited for mines.

There are probably but few of even measuredly rich deposits left to discover.  The most that we call henceforth do is to exhaust what have been found.  There are no more great bonanzas in the Sierra Nevadas ;  probably there are not elsewhere in the world deposits of ore of such magnitude.  I do not mean deposits found ;  I mean found or unfound.¹

Already many of the less profitable silver mines of the world have ceased to be worked.  The slight and temporary fall in silver, occasioned by the partial demonetization of the metal in Europe, its prospective practical demonetization in this country, and the hitherto abundant yield of the bonanza mines, have been sufficient to throw many of the poorer paying silver mines of the world out of production.²

By resuming specie payments in this country upon the basis of the fatally erroneous law of 1873 we would render practical and immediate that demonetization of silver which, as yet, while paper notes form nearly the entire circulating media of the country, is but prospective, and therefore not practical.  More than this :  the example of so great a country as the United States would be apt to lead other countries into the same erroneous way, and silver would soon become entirely demonetized in the occidental world.

Did gold promise to continue in very abundant supply the ruinous consequences of this error might to some extent be mitigated ;  though under no circumstances could they be entirely mitigated, owing to the always fluctuating nature of gold supplies.  But even this degree of mitigation is not to be expected.  Gold is so far from being produced throughout the world in great abundance, that the present annual product is dangerously insufficient, and even this supply is declining.  We are invited to abandon a good ship and enter a sinking one ;  to desert solid ground and stand upon a quagmire ;  to renounce a system which has stood the test of centuries, and adopt one which has been tried but by a single nation, England, and that only since 1816, or rather from 1824 to 1848, and at the expense of retarding and crushing the prosperity of her industrial classes during the period of such trial.

I have said that the mining of the precious metals is always conducted, on the average, upon the verge of loss.  This statement is supported by all writers upon the subject.

The ready marketability of the precious metals, a fact which renders the product of the miner’s labor available on the instant, forms a strong inducement to their production, and the competition is so great as to push the production to the verge of loss, perhaps even beyond it.  The moment you destroy or impair this marketability of the precious metals, as you do by demonetizing silver, you diminish the production.  You could not do the same with wheat or other commodities.  Upon these the laws confer no privilege of marketability ;  they are not legal tender for the payment of debts.  Their production therefore never ventures beyond the area of profit—I mean, of course, profit on the average.  Present and future demand alone regulate their supply.  It is not the same with the precious metals.  Their supply has reference to the past as well as the present and future.  There is a stock of these metals in the world which has come down to us from the earliest ages of history, and every additional ounce produced affects this stock.  There is no similar stock of any other commodities.  Even arable lands and stone edifices fail to escape the ravages of time.  With metal produced to-day you can discharge obligations for commodities and services sold or rendered years ago.  You can not do the same with wheat or any other commodities.  Why ?  Because the laws make the precious metals legal tenders for the payment of debt.  You cannot force a creditor to receive payment in wheat or lands, but you can force him to accept payment in money.  Hence the superior marketability of the precious metals—a marketability which is due, in the first place, to their intrinsic qualities of superior homogeneity, divisibility, re-unitability, portability, &c., and in the second place to the law.

If you impair this marketability by demonetizing one of the metals, you reduce it to the same rank as any other commodity, to the rank of commodities which are produced only when such production is profitable.  You will not destroy the production of the demonetized metal.  Far from it.  The precious metals are too valuable for a great variety of industrial purposes.  They will still continue to be produced, only the quantity produced will be less ;  and after the stock of demonetized coin shall be absorbed irretrievably into the arts, the price will be higher.  Why ?  Because the production of the metal will only be continued where it proves profitable.  The supply will become regulated by the present and future demand.  Rather than push the production of the metal to the verge of loss, men will prefer to engage in some other occupation.  The price will not only rise on account of diminished production, but also, and chiefly, because the producer will demand in it a profit.  Now he does not ;  he cannot.  The competition is too keen to admit of profit.  The production of the precious metals is, perhaps, even on the whole, a constant source of loss.  Still, men will engage in it, not only on account of the occasional fortunate and unexpected prizes which it yields, and which is the same in diamond-washing and pearl-fishing, but also because of the superior, the instant, marketability of the product.  This instant marketability is due in part to the law.  It enables the gold or silver miner to realize the product of his labor at once.  It induces him to make the most of that labor ;  it leads him to overwork ;  and eventually it destroys him.  The valleys of El Dorado are strewn with the wrecks of human lives, wrecks which lie bleaching in the sun to warn away the newcomer.  But they warn in vain ;  and the production of the precious metals continues in spite of loss, and sickness, and premature death.  Conducted at this great sacrifice, conducted thus always upon the verge of loss, and perhaps beyond it, the moment the production of the precious metals, or either of them, is discouraged by demonetization, from that moment it sinks to the rank of all other commodities and demands a profit in its price.  Suppose you demonetize silver, and thus limit its production to the extent of the demand for it in the arts ;  and when the stock of silver coin becomes melted up and absorbed, as it soon would be, you discover, as you will be sure to discover, that you have made a mistake ;  at what price is it imagined can this silver be repurchased ?  At 15 for 1 of gold ?  At 12 for 1, 10 for 1, 8 for 1 ?  I fancy not.  Gold was demonetized in Japan, and not more than twenty-five years ago it could be purchased in that country at four times the price of silver.  Later on they remonetized gold in that country, and were obliged to purchase it at the rate of 1 for 15½ of silver.

Had Japan not been a country at that period very backward in civilization, divided into great feudatories, whose tributes and rents were payable in grain, the difficulty of again monetizing the discarded metal would have been insuperable.  Even as it was, the measure was accompanied by a violent social revolution and the entire destruction of the existing system of government.

Are you prepared to hazard an experiment of this character ?  For the sake of pursuing the idle, mischievous theory called monometalism, urged by an interested, selfish, and short-sighted class of men in England and Germany, and indorsed by certain flippant and conceited writers on political economy, are you ready to invoke the tremendous risk of banishing a metal which constitutes one-half of the world’s stock of money, and which, if once banished, call never be recalled without the propitiating sacrifice of all vested interests, of all existing relations of property, of all the institutions of Society ?  The great institution of Japan was the feudal system, and the moment she opened herself to the influence upon prices and relations which was exercised by the precious metal which she had previously forbidden to compose part of her standard, that great institution was shivered to atoms.  The great institution of the United States is popular suffrage.  Are we prepared, by abandoning the olden way, the double standard, and exposing ourselves to the social revolution which, after abandoning that standard, would inevitably accompany its re-establishment—are we prepared to see our great institution shivered to atoms, too ?

It cannot be doubted that resumption in specie and limitation to the single gold standard would, in time, produce these alarming results.  But we are not a people who would open the door to such consequences.  We would endeavor to obviate them.  And the only way to obviate them would be to go on with irredeemable paper, with violent aberrations of prices, with bankruptcies, and with the pandemonium of the stock exchange.

THE DOUBLE STANDARD WILL HAVE TO BE RESTORED.

There are, perhaps, those who do not perceive any reason which would compel a nation to return to the double standard after having abandoned it.  These reasons have already been given, and I regard them as unanswerable.  They are :

1.  The insufficient stock of gold in the world to effect its exchanges without a great, rapid, and overwhelming fall in prices to one-half of present prices in specie.

2.  The insufficient annual supplies of gold :  there not being more than enough produced to supply the arts and maintain the stock of coin.

3.  The fluctuating nature of gold production, which would give rise to violent aberrations of prices from time to time.

4.  The monopolization of the supply of gold, which now is chiefly from countries covered by the British flag.

And many other reasons, which these few will serve, perhaps, to recall.

When the tremendous decline and violent fluctuations in prices which must accompany a single gold standard have worked as much ruin and destruction of existing relations as the nation will bear, the revulsion in favor of again monetizing silver will be too great to resist ;  yet remonetization may have to be effected in the face of difficulties and dangers quite as great as those from which escape is sought to be made.  It wound be Charybdis on one side ;  Scylla on the other ;  mischief, danger, ruin, on both.

At the bottom of this dangerous effort to abolish the double standard of this country lie nothing but selfishness and injustice—the selfishness of a class who desire to receive payment for debts and obligations in a metal which, for the moment, and at the mean natural relation, is a few per cent. dearer than the other.

SOCIETY CAN ONLY BE RULED WITH EQUITY—THE GOLD STANDARD IS INEQUITABLE.

Opposed to the consummation of this injustice, not only does all nature array herself, but so also do the unconscious instincts of humanity, the occult working of social institutions.  Consummate it if you can, and you will have poverty, distress, commotion, and perhaps revolution.  Having consummated it, try then to undo it, and you will find the task beset with great difficulties.

Neglected dislocations of the human frame are difficult to remedy ;  because the wrenched member finds for itself a new socket.  The dislocation of the social fabric which threatens to result from the effects of the act of 1873 may yet lie averted by the timely measure of restoring the double standard before we attempt to resume specie payments.

You cannot expect to take a nation by the throat, hold it down, squeeze the last drop of substance out of it, no matter in what sacred name, whether of honor or justice, without running the risk of being taken by the throat yourselves.  No matter how cunning the injustice is, it is sure to be found out when it comes to work, and sure to be avenged when it is found out.  All the interests of society, even the safety and permanence of vested interests, demand the exercise of equity in the affairs of government ;  and I tell those who represent such interests that, in the long run, they will best consult their advantage in being just at the outset.  They got the people of this country by the throat in the ambiguously worded act of February 25, 1862.  They pinned the people down by the coin-paying act of March 18, 1869, and now they would squeeze the last drop of substance out of them by the single gold standard act of February, 1873, which they propose to carry into effect by the resumption act (a very proper act of itself) of 1875.  And now my advice to them is, to stop and undo the worst part of their work, by repealing so much of the act of 1873 as prevents the silver dollar from being tendered for the payment of debts.  The people have paid their full ransom to Brenuns ;  let him not attempt to overload the scale with the weight of his sword, or they may take it up and use it.

OUR COMMERCE WITH ASIA DEPENDS UPON THE DOUBLE STANDARD.

Turning from these considerations of danger in abolishing the double standard to those of profit and advantage in retaining it, permit me to call your attention to the influence which this subject is destined to exercise upon our commerce.

It has been the interest in all ages of certain classes to deny that commerce is beneficial, and that agriculture, and manufactures or mining are alone entitled to political consideration ;  but such a position is utterly untenable.  Production cannot advance beyond the rudest limits without commerce, whose essential function it is to exchange that which is not needed for that which is, or to remove commodities from places where they are not wanted to places where they are.  In fact, commerce is inseparably bound up with production ;  there is no actual dividing line between them.  The carriage of seeds to be planted, of textiles to be woven, of ores to be smelted, and the removal of the results to places of deposit or consumption, are all commercial functions.  Foreign commerce is in like manner inseparable from production, and forms part of it.  The implements, materials, agencies, and even remoter sources of national productive industries, depend upon foreign commerce, and would perish without it.  Commerce has exercised a potent influence in propagating and extending religion.  In its train have ever followed opulence, national strength, political liberty, letters, arts, and sciences.  Its advance has always been marked by a general progress in the condition of men ;  its retardation by a corresponding retrogradation ;  and its discouragement or decline by poverty, national dissolution, tyranny, slavery, ignorance, and crime.  It has destroyed the barriers of distance, alienage, race, religion, and caste.  It has equalized the conditions of life in various parts of the earth, and tended to promote that homogeneousness of the human race which the profoundest thinkers have maintained is an indispensable preliminary to its highest development.

Asia Major, with the products of its varied climes and its teeming populations of Tartary, Persia, India, China, and Japan, has in all ages been the objective point of commerce, and the nations who found the best route to it, have in turn all held the scepter of commercial greatness.  The Phœnicians opened a route (not the ancient canal of Necho) to Asia by way of Suez ;  the Hebrews, overland, by way of Palmyra or Tadmor.  The Suez route was re-opened by the Greeks, and successively kept open by the Romans and Venetians.  The Genoese penetrated to Asia by way of the Euxine ;  the Portuguese led the way by the Cape of Good Hope ;  the Hansards opened an overland route by way of Novgorod ;  Spain sought for a path westward and stumbled upon a new world ;  England discovered a route by way of Cape Horn, and America has paved with iron rails first one route by way of Panama, and afterward another via San Francisco.  France has acquired both glory and profit by re-opening the long-abandoned Suez canal of the Egyptians ;  England has re-awakened the commercial hopes of her statesmen by purchasing a large interest in this canal ;  the former prosperity of Italy has been revived through her proximity to it ;  and Russia is exciting the jealousy of England by extending her borders and military posts to the northwestern limits of India.

The commercial diadem of the world, the commerce with Asia, lies within easier grasp of the United States than that of any other nation of the Occident.  We not only possess the two shortest or best routes to the Orient, those by way of Panama and San Francisco ;  we are not only in fact the next-door neighbor to Japan and China, stretching as our possessions do within sight of Kamtchatka and holding almost the entire shores of the Northeastern Pacific ;  we are not only at peace with Asia and regarded by her with more friendliness than any other nation, we possess that commercial object for which Asia is as anxious to seek the Occident as we are the Orient, for tea, spices, and silk.  We are at the present moment the largest producers of silver in the world, and silver is the main, almost the only, object of foreign commerce to Asiatics.  Even yet, although Europe has for centuries been pouring what silver she could spare into Asia ;  although all of Atahualpa’s treasures and almost all the silver product of Mexico has found its way to Asia Major, the price of agricultural labor in that country is scarcely more than a penny a day, and the taxes levied by its monarchs are paid in rice.  These facts prove the necessity and demand for silver in Asia and the comparative scarcity of it even at the present day.

I have already stated that it is estimated that Asia possessed a stock of coin, almost entirely silver, amounting at the beginning of the present century to about $700,000,000 ;  in 1829 to about $800,000,000 ;  in 1848 to about $900,000,000 ;  and in 1872 to about $2,100,000,000.  With a population stationary, and of, say, 700,000,000, this amounted to $1 per capita at the beginning of the century, and $3 per capita at the present time.  Merely to keep this stock of coin preserved from the effects of abrasion and loss, Asia requires some $30,000,000 in silver every year.  To increase it, she requires more.

Suppose we persist in demonetizing our silver, suppose we lessen the demand for its use in the Occident, and help to throw upon the markets of the world a stock of silver which we must replace with a stock of gold, is it not patent to the humblest understanding that we would lower its value and be obliged to sell it to Asia, who, having then no competitor for its possession, would be likely to obtain it at a very low price in her commodities ?  Is it not plain that under such circumstances, and for a long series of years to come, our annual product of silver would follow the way of our rejected stock, and fall, into the hands of the Orient at a degraded price ?  Should we not have to pay more, much more, than now, for the teas, spices, silk, rice, textiles, and other raw materials which we obtain from that quarter of the world ?  And were we obliged eventually, as I believe we should be, to buy back this thoughtlessly demonetized and abandoned stock of silver, should we not have to purchase it at a very high price, seeing that meanwhile all prices in Asia would have become, greatly enhanced ?

Hence, if we let slip the present favorable opportunity to purchase silver for the purposes of resumption, we may find it very difficult to do so in future.  When occidental silver once gets to the Orient it rarely returns, and it never will return in any considerable quantity until the scale of prices in the two great divisions of the globe become more nearly equalized than they are at present.  This may be centuries hence.

Nature has furnished us with such advantages for seeking the commerce of Asia—advantages of route, of amicable relations, of an ample supply of silver—that if we do not senselessly throw them away, we are almost certain to monopolize the Asiatic trade and the vast profits that accrue from its pursuit.  Asia stands in urgent need of silver ;  that silver we possess, and she must now come to us for it and purchase it from us ;  and as we can afford to sell it to her cheaper than Europe can, by the difference of carriage, insurance, interest, commissions, &c., we are almost certain to secure the monopoly of her trade, and with it a market not only for our silver, but also for our coal and iron, our wheat and Indian corn, our manufactures, our literary and our art products.  And, moreover, we shall inevitably become what England is now, the occidental world’s emporium for Japanese, Chinese, and East India products.  Instead of being obliged to go to Europe for these products as now, Europe will be obliged to come to us for them.

Was it mere forgetfulness or a perversion of correct views which induced some of our public men to entertain even for an instant the notion of abolishing the double standard and degrading our silver product, or was it the sinister advice of nations whose far-seeing commercial policies detected the advantages which we possessed over them in the future rivalry for the rich trade of the Orient ?

Already has the partial demonetization of silver in Europe had the effect of helping to triple the stock of silver which Asia possessed at the opening of this century, and yet so small is the stock of coin among Asiatic nations that, if silver is not entirely demonetized in the Occident, there is not the slightest chance that the surplus silver of the world for centuries to come will suffice for the wants of Asia.  Even with a partial demonetization of silver in the Occident, Asia will be able to absorb such portion of the surplus current supplies of the world as can be spared, as well as a large portion of the stock, without being saturated with silver.

SILVER CANNOT BECOME CHEAPER THAN IT IS AT PRESENT.

To those who indulge the insane fear that the late rise of gold or decline of silver caused by the European demonetization will continue, it is only necessary to say that the thing is impossible.  This decline cannot continue after the discarded stock of silver is worked off, and when the cost of its production again becomes the principal factor of its price.  And should this country wisely conclude at this favorable juncture of affairs to remonetize silver, the time necessary for it to advance to its former relation—with gold-would be comparatively short.

Specie is too scarce in China and India, prices are too low, and the mere maintenance of their present stock of coin demands a supply of many millions a year.  I have seen the Humboldt, Truckee, and other rivers which flow between the eastern slope of the Sierra Nevadas and the western walls of the Wahsatch, and which near their sources in the mountains flow in great volume, sink all at once into the sands of the desert and disappear from view forever.  An attempt to saturate Asia with silver would, to my mind, be as successful as one to saturate the Great American Desert with the waters of these rivers.

But let its suppose, for the sake of argument, that Asia cannot take the surplus of silver of the Occidental world and demands gold instead for the balance of her foreign trade.  Would this not make gold so scarce as to force us of the Occident to keep our own stock of silver which we now would banish ?  And if it would force us to keep it then, why should we not keep it now ?  Why change and disturb prices only to come to the same result at last ?  Why place ourselves in a dilemma, either horn of which is dangerous ?  Why attempt to banish silver to Asia or force her to send it back to us, which she would do in case the above supposition is well founded ;  a supposition not borne out either by philosophy or fact.

Banish silver from the western world, and you will help to banish progress with it ;  you will unwittingly and powerfully assist the growth and development of China and India at the expense of our civil progress, and precipitate a monetary revolution, whose overwhelming and wide-spread effects no man can fully estimate or foresee.

THE MEXICAN AND CENTRAL AND SOUTH AMERICAN TRADES.

Similar considerations, scarcely less important, demand that our double standard shall be restored in respect of our commercial and other relations with Mexico and Central and South America.  All these countries except Brazil and Chili have either the single silver standard or the double standard of gold and silver.  Omitting Brazil and Chili, these countries contain an aggregate population of more than 26,000,000 souls.  This vast population is at the present time entering upon an unprecedented era of activity and progress.  Their trade with the manufacturing states of the world belongs naturally and by reason of proximity to the United States.  Shall we run the risk of losing it by unnecessarily depressing the quotations of South American products in our market, as we should do if we limited ourselves to a single gold standard ?  Shall we offer to them for their productions a stinted measure of the metal which they do not want, instead of a fair measure of the metal which they do want ?  Shall we force them to manufacture for themselves, rather than purchase the fabrics they need from us in exchange for their valuable raw materials ?

THE CRESCENDO AND DIMINUENDO THEORY OF THE ACTION OF MONEY.

I now come to those considerations, in reference to this subject which have ever commanded the most serious attention of statesman and publicists.  I allude to the effects of increasing or diminishing money upon the social, moral, and religious welfare of peoples.

I have already shown how profoundly the diminution of coin in the occidental world, from the period of the Roman empire to that of the discovery or re-introduction of bills of exchange, affected the welfare of Europe.  But as, perhaps, it may be disputed that the Dark Ages, and the awful social wretchedness which characterized them, are attributable wholly, or even in great part, to the diminution of money which occurred during that period, I have deemed it best to bring into view more recent and familiar eras of similar character, eras which pertain, not like the Dark Ages, to a remote period and an entire continent, but to later times and particular countries, wherein the relation of the mutations of the currency to the welfare of the people is so close as to admit of little doubt concerning the influence and action of one upon the other.

I have already stated that from the nature and functions of money, it made no difference to the welfare or convenience of society whether the total sum of money was large or small, provided that it was neither so large nor so small that the substance of which it was made, the precious metals, could practically be coined into pieces of convenient size for transportation or handling and for the transactions of the ordinary business of life.

While this is quite true, it nevertheless does make a most important difference whether the sum of money be increasing or diminishing.  This difference, and the social phenomena connected with it, has been very fitly termed by the author of the essay on currency in the original edition of Johnson’s Cyclopedia the crescendo and diminuendo theory, a phrase derived from the terminology of music, all art whose terms are essentially expressive of movement in time.

SOCIAL EFFECTS OF INCREASING AND DIMINISHING MONEY.

Crescendo or increasing, and diminuendo or diminishing, are terms which have been deemed convenient for the expression of the movement of the stock of money in time.  While this stock is increasing, prices rise ;  exchange or commerce is stimulated ;  new enterprises are set afoot ;  the products of agriculture, manufactures, and mining are increased; the commercial and industrial classes find abundant employment and earn remunerative profits and wages ;  bankruptcies and suicides rarely happen ;  marriages are promoted ;  the newly born survive in greater numbers ;  population increases in quicker ratio ;  letters, the fine arts, and the sciences make most rapid strides ;  education, intelligence, morality, and the observance of religion are promoted ;  and the general happiness of mankind becomes greatly enhanced.

What is the cause of all this industrial activity and social progress ?  What action or influence of the increasing stock of money lies at the bottom of it ?  Simply this :  that an increasing stock of money tends to distribute wealth, and it is the distribution of wealth which effects these wonderful results.  “ O ! it is agrarianism or communism that you propose.  You would go on increasing artificially and by legislation (for it is only artificially that it can be done) the sum of the currency forever, in order that wealth may be continually distributed, industrial activity stimulated, and social progress promoted.”

I propose nothing of the sort.  I have depicted the consequences of all increasing stock of money, not in order to advocate an artificially increasing currency, but as preliminary to depicting the consequences of an artificially diminishing currency, and with the view of warning the country against submitting to any such diminution.  I do not propose to rob the capitalist ;  but neither do I propose to permit the capitalist to rob society.

While the stock of money is diminishing prices fall ;  commerce is depressed ;  enterprises are abandoned or neglected ;  industry is paralyzed ;  its products are diminished ;  its supporters defeated in their just expectations or thrown out of employment ;  bankruptcies and forced sales are increased ;  marriages are discouraged ;  suicides become common ;  the newly born perish ;  the increase of population is retarded ;  the cultivation of letters is abandoned ;  the arts and sciences fall into decay ;  education, intelligence, morality, and religion are neglected ;  crime increases ;  and general misery prevails.

What is the connection between the stock of money and these appalling social phenomena ?  Simply this :  that a diminishing stock of money tends to concentrate wealth, and the concentration of wealth is a cause sufficient to promote all of these evils.  “ Would you, then, legislate with the view of preventing the stock of money from being decreased ?  Would you repeat those measures of medieval coercion which distinguished the reign of Henry V, who forbade gold or silver to be used in the arts in order to prevent the stock of money from being diminished ? ”

I would do nothing of the sort.  I propose neither to increase the currency by artificial means nor to diminish it by coercion.  I propose to follow and advocate that policy which little minds never perceive the advantage of pursuing, but which the great men of the world have recognized to be the only safe one in commercial affairs.  I propose to let things alone.  Laissez faire in money is as important to the well being of the world as laissez-faire in corn.

Is it not time, Mr. President, that we, republicans, we the exemplars of civil freedom to the world, should abandon and renounce this mischievous policy of meddling with the affairs of commerce ;  this policy which has been handed down to us by the tyrants and marplots of the world—the men with bloody hands and the men with ruthless purposes ?  Is it not time that we practiced freedom as well as preached it ?

For five thousand years has the world been amassing a stock of gold and silver money wherewith to conduct its commerce, and yet in one instant and by a single blow would our irreverent and mischievous hands annihilate one-half of this stock.  The act of 1873 essentially impaired the character of silver as money in this country—a character which it did not owe to legislation, but to fitness and immemorial usage.  Could the act have affected other countries as it did this one alone, it would have demonetized silver throughout the world.

What is the principal effect of demonetizing silver ?  It reduces the entire stock of money by one-half.  This effect may be mitigated by permitting a small sum of debased silver coins, as tokens, to pass current for petty payments in each country, but even then its chief harm remains.  The money of the world commences to diminish, prices fall, wealth becomes centralized and concentrated in a few hands, property is sacrificed to pay debts incurred before the diminution, bankruptcies ensue, industry is petrified, want and wretchedness stare the commercial classes in the face, and to escape from these disasters they take refuge in dishonesty and immorality, and in the end wind up with crime and destruction.

The evidence of these deplorable consequences of arbitrarily diminishing the stock of money is to be found in the social statistics of all countries.  It is only for the sake of brevity that I content myself with adducing a portion of those only of this country.  And here let me remark to the possible objection that the statistics of the currency of the United States include paper promises, that the principle is the same, whether the currency is of money alone or money and paper combined.  So long as the promises are deemed to be good enough to pass current as money their effect upon prices is precisely the same.  It does not follow from this, as some theorists erroneously maintain, that paper promises would pass current as money without a money basis.  On the contrary, repeated experience proves that they will not.  Nor does it follow that, because a diminishing stock of money or mixed currency produces the evils alluded to, these evils can be avoided by recourse to a forced currency of paper.  They can only be avoided by letting the currency alone, and the sooner we learn and appreciate the importance of this great truth the better will it be for our country and the world at large.

THE WORLD’S  STOCK OF THE PRECIOUS METALS THE GREAT CONSERVATOR OF ITS CIVILIZATION.

It will perhaps be remarked that no statistical evidence has been offered to support the assertion made with regard to the effect of the movement of the currency upon letters, the arts, &c.  The reason for this is that, while statistics have made such progress that they now fully cover certain features of civilization, and concerning these features afford most thorough and convincing testimony, they do not yet fully cover certain other features, such as those omitted from the illustrations adduced.  Within the boundaries to which thus far its conquests have been confined the use of statistics is of the highest importance to the student, the publicist, and the legislator.  Beyond that, such use is almost valueless, and want of discrimination as to where to stop in the employment of statistical evidence can have, but the single result of bringing statistics into undeserved disrepute.

We know a priori that the gradual diffusion of wealth means also the gradual diffusion of the work of life, wherein no feudal tyrant or merciless plutocrat can lord it over the masses of a community bound to exacting toil or helpless slavery.  It is only during this tendency (mark, I say tendency) toward a distribution of rewards according to effort that letters and the arts can flourish.  At all other periods, if they make any progress at all, it is confined to a few favored persons, and soon perishes ;  for the acquisition of letters must be the result of leisure and exemption from toil, and the community that is bound to continual labor call never hope to enjoy the fruits of this divine art.

Therefore, such an increment of the stock of money as would work out a gradual diffusion of wealth, and with it the more equitable distribution of work and leisure than would result from a stock of money which was decreasing or stationary while population advanced, could not fail, and it has never yet failed, to promote the progress of letters, the arts and sciences, morality and religion.  Nor could any greater increment occur than one which would be sufficient to induce a gradual diffusion of wealth ;  that is, so long as the world retained its present vast stock of the present metals.  Estimating this stock at $5,700,000,000, it requires $85,500,000 a year to keep it from waste by abrasion and loss, and the annual supply of the precious metals or so much of them as is available for coin has rarely been so much in access of this sum as to be sufficient to produce more than a very inconsiderable and gradual diffusion of wealth.  If the increase by population be considered, the process would be extremely slow.

Viewed from this point, it will be seen that the world’s stock of the precious metals has really been the great conservator of civilization.  It is this stock and its slow increment since the sixteenth century which has kept prices, on the whole, steady and slowly rising ;  just as it was the decrement of this stock which threatened the extinction of civilization during the Middle Ages.  It was the little of it that survived throughout that memorable era which prevented the total subversion of society, and with it letters and the arts, in a word, civilization, and it was in the country that preserved the greatest stock of it during that period that civilization held aloft its highest torch.³

THE RESERVOIR OF THE PRECIOUS METALS.

Lest this phrase, “ the great conservator of civilization,” sounds too grand, let it be supposed that at the present time no reservoir of the precious metals existed, or that the entire stock of money was destroyed in an instant.  Setting aside the incalculably calamitous consequences of such a catastrophe, is it not plain that the annual supply of the metals, now amounting to about one hundred millions, would assume a new importance in the distribution of wealth and each individual’s share of production ?  Assuming that the precious metals would continue to be used for money, because no other materials would answer the purpose so well, would not these supplies as fast as they come forward affect the prices of commodities and services so enormously and suddenly as virtually to place society at the mercy of the few persons who might be able to control or anticipate such supplies ?

In the immensity of the world’s stock of the precious metals, which forms a measure of value of such vast proportions that no vicissitudes of production can sensibly affect it, society therefore possesses a guarantee for the conservation of all those institutions upon which civilization depends ;  upon diffusion of wealth, adequate reward for effort, due proportion of production, liberty, leisure, letters, the arts, morality, and religion.  And yet it is one-half of this precious stock that madmen would now destroy or degrade to the level of gewgaws and bangles.

In the face of the significant facts which we have found to correspond with the movement of the currency, whether in the same is counted only the real money in circulation, or the real money combined with the credits based upon it, (if due allowance be made for their differing ratios of activity,) I ask you, are you prepared to confirm and ratify the thoughtless act of 1873, which demonetized silver as a legal tender in the United States, or will you restore that metal to its rightful position in the money of the country ?

Have the industrial, the commercial, the active, the progressive, the working classes of the country no rights that legislation is bound to respect ?  What authority has this Chamber to shorten or curtail the standard by which their labor is to be measured ?  What justice, what wisdom, what safety is there in assisting to destroy the efficiency of one-half of the world’s stock of specie, one-half of that measure of value which has come down to us sanctified by fifty centuries of toil, of usage, of experiment, of universal approval ?  Can you look on with unconcern and permit the entire relations of society to be disturbed in the fancied interests of that small class of persons who in every country are wealthy enough to monopolize the possession of its measure of value—which, at best, is limited, and barely sufficient to keep pace with the increase of population and commerce ?

Such is the pressing scarcity of money, both of gold and silver, throughout the world, that every conceivable form of substitute for it, both safe and unsafe, is in use to eke it out.  Every country of the world is using credit in some form as a temporary substitute for money ;  yet you would arbitrarily demonetize one-half the stock of money, under the erroneous impression, either that one metal is a measure of value less fluctuating than two, or the equally erroneous one that the option of two metals to pay with is derogatory to the rights of creditors which accrued while the option was open.⁴

CONSTITUTIONAL AND LEGAL ASPECTS OF THE CASE.

I shall now endeavor to show that under our Constitution both the precious metals are made legal tender for the payment of debts.

I hold—

First.  That the word “ money,” as used in article 1, section 8 of the “Constitution of the United States,” menus both the precious metals, silver and gold, and, by reason of the context, cannot mean either paper promises or one of the metals only.

Second.  That the power to “regulate the value thereof” was necessary in order to render this meaning effective, and that had “ money” meant one metal instead of two the power to regulate value would have been supererogatory, abortive, and absurd.

Third.  That no other construction of the phrase “to regulate the value thereof” is admissable, because even in theory law cannot regulate values, unless the things whose values are to be regulated are specified, and practically, unless also the law power or Government possesses control of the supply or demand of the things to be valued.  As all things cannot be specified, and as Government only has control of the supply of gold and silver coins, it follows that the value of these commodities, one to the other, is all that can be “regulated” under the Constitution, and that this regulation constitutes both silver and gold as money and legal tender.

I.  Article 1, section 8, of the Constitution for the United States provides that—

The Congress shall have power * * * to coin money, regulate the value thereof, and of foreign coin, and fix the standards of weights and measures.

What is money ?  Gold and silver coined.  This was the only meaning attached to “money” when the Constitution was framed, and it is the only proper meaning.  In late days the word money has been used to mean any circulating media, whether gold or silver coined, or promises to pay.  That such is not the meaning of the term as employed in the Constitution is evident from the phrase “to coin,” which prefixes the word “ money.”  Promises to pay cannot be coined, nor were any other metals than gold and silver used as money in this country or any other at the period of the Constitution ;  therefore, money, as mentioned in that instrument, meant gold and silver coined, and could not have meant anything else.

Nor could it have meant either one of these metals separately, because of the affix, “and regulate the value thereof.”

What is value ?  The relation between two services or commodities exchanged, or, to be more precise, the quantitative relation in services or commodities between two services or commodities exchanged.  I have already explained the meaning of this term.  (See page—,ante.)  It must not be compared with worth, utility, or desirability, which are intrinsic qualities or characteristics without quantity ;  while value is an extrinsic and a quantitative characteristic which is only determinable in exchange.  Worth, utility, and desirability may reside in an object without reference to exchange.  Value without exchange is impossible.  Law cannot regulate the worth, utility, or desirability of a commodity.  Why ?  Because these are intrinsic and incommensurable characteristics, and are therefore not susceptible of regulation.  Law can regulate value, because value is an extrinsic characteristic, determinable by exchange.  But law cannot regulate the value of a commodity generally, and as to all things, unless it specifies separately the quantity of all things which shall be interchangeable.  This is not only palpably impracticable, but, even were it practicable, is clearly inadmissible as a construction of the constitutional phraseology.  An attempt to regulate the value of money as to all things would produce the utmost injustice and confusion in industrial affairs, and entirely subvert the Constitution and the objects for which it was established.  The power to regulate the value of money was therefore confined to gold and silver only.  It could not have been with reference to other things.

II.  Even with reference to gold and silver, the power to regulate the value of money would have been supererogatory unless money meant both gold and silver, and value the relation between them ;  for value in respect to an isolated thing is inconceivable and impossible, value being a relation, and not an intrinsic quality.  If “money,” according to the Constitution, meant both gold and silver, the power to regulate the value thereof was a necessary incident to that of coinage, and this view affords the only explanation of the employment of the phrase “ to regulate the value thereof ” in the Constitution.  Otherwise the phrase were powerless, meaningless, and absurd.  To coin money and regulate the value thereof are, therefore, inseparable powers, and although Congress is not required to exercise them, but is merely permitted to do so, yet, if exercised, they can only be exercised together, and the exercise of one power without the other is unconstitutional.  Therefore, so long as any coins of the United States are in existence the suppression of the silver dollar by the act of 1873 is void.⁵

III.  Practically, the Government has control of only two commodities among all those known to the world :  these two are gold and silver coins.  The Constitution gives to the Government exclusively the power to coin money, and this power gives it practical control over the supply of gold and silver coins.  It may be held, indeed, that the same power gives it also control over any substances which it may choose to employ as money ;  for example, copper, tobacco, musket balls, wampum-peag, paper promises, &c.  But the impracticability of regulating the value of substances of such heterogeneous composition and limitless supply merely serves to show the absurdity of attempting to extend the meaning of the phrase “money” beyond that which was clearly attached to it at the time of the Constitution, namely, gold and silver coins.  These various substances, and many others, had all been employed in this country as substitutes for money, or as tokens, previous to the Constitution, and some of them were in wide use at the time of that instrument.  But it is quite clear that none of them were referred to in the phrase “money,” and that gold and silver alone were meant.

Having control of the two commodities, gold and silver coins, and of these two only, it was not and is not practicable for the Government of the United States to regulate the value as between any other commodities than gold and silver coins.⁶

Having made this regulation, Congress went as far as it had power to go.  In the regulation that “the proportional value of gold to silver in all coins which shall by law be current as money within the United States shall be as 15 to 1, according to quantity in weight of pure gold or pare silver,” (act of April 2, 1792, section 11,) Congress exercised all the kind of power which was conferred upon it by the Constitution regarding the regulation of values.

VIEWS OF THE LAST GENERATION ON THE CONSTITUTIONAL QUESTION.

The view herein taken is that which has hitherto been taken by all who have carefully considered this subject.  In a report to this Chamber by one of its members, Mr. Sanford, the chairman of a “select committee to consider the state of the currency,” appointed by the Twenty-first Congress, (see Executive Document, second session Twenty-first Congress, December 15, 1830,) he held the following language :

The Constitution of the United States evidently contemplates in the power conferred upon this Government to coin money, regulate the value thereof, and of foreign coins, and the restriction imposed on the States to make nothing but gold and silver coins a tender in payment of debts, that the money of this country shall be gold and silver.  Our system of money established in the year 1792 fully adopts the principle that it is expedient to coin and use both metals as money, and such has always been the opinion of the people of the United States.

At this period (1830) there was not a dollar of gold in the country.  England nearly depleted us of what little we had, previous to 1817, in order to prepare for the resumption of specie payments, which had been suspended in England since 1797, and which resumption the ruling classes of England had unwisely or selfishly planned upon the basis of a single metal.  This depletion went on from 1817 until after 1820, perhaps until 1821 or 1822.  Then it stopped so far as we were concerned, from sheer exhaustion on our part.  We had no more gold to sell.  At that period we had nearly $70,000,000 of bank paper afloat.  What condition this country would have been left in had our statesmen been as indifferent then as they appear to have been in 1873, in regard to the constitutional requirement to make both gold and silver legal-tender money, I leave to the imagination.  Our population was then 10,000,000.  We had but lately emerged from a war with England, at the close of which gold had stood, in our excessive paper issues, at 117, and an attempt to resume in 1817 was met by a revulsion in 1819 and a secondary revulsion in 1821.

Imagine 10,000,000 people, exhausted by war and the sores of a double revulsion, depleted of every dollar of gold, and divested of the power to resume in silver or use that metal in the payment of debts.  Do you suppose, if the statesmen of 1822 had been as forgetful of the interests of their country and as oblivious of constitutional law as seem to have been those of 1873, that any respect would have been paid to their legislation, and that, if it had been respected, the country could have been saved from revulsion and repudiation ?  I fancy not.

And this episode of our history conveys more than one warning, more than the warning that monometalists, if persisted in, may bring the country to great social and political disturbances.  Some people are so filled with the sense of security that a warning of repudiation seems to them a mere bugaboo.  Simple failure in an attempt to resume specie payments is to them an event of far greater likelihood, if not of importance.  Very well, then :  the episode before us contains the warning of such a failure, of two such failures.  We tried to resume in 1817 ;  we tried again in 1821 ;  and on both occasions distress followed.  What was the cause ?  Lack of specie.  We tried to redeem sixty or seventy millions of paper with twenty or twenty-five millions of coin.  What was the cause of the lack of specie ?  England had drained us of our gold, which she virtually overvalued in order to prepare for her own resumption.

But for silver, the use of which as legal tender had been preserved for us by the Constitution, we should not have resumed at all, at least not for forty years after, when California opened.  The case is similar now.  England again has drained us of our gold.  We have $800,000,000 of paper afloat and less than $50,000,000 of specie where with to redeem it.  Yet Congress orders resumption to take place, and forbids the employment of silver wherewith to resume.  Is it not plain that resumption is quite impracticable ;  that a sum of gold sufficient for the purpose cannot be purchased throughout the world at any prices for bonds or exports at which we would be willing to sell, and that any attempt to resume, unless the constitutional requirements as to the monetization of silver are obeyed, will plunge the country into all the disasters of monetary revulsion ?

VESTED INTERESTS UNDER THE CONSTITUTION.

Ever since Mr. Webster’s time it has been an oft-quoted doctrine that under the Constitution the destruction or impairment of a vested interest by act of Government is in the nature of a breach of contract.  Without giving adhesion to this doctrine it ought to be remarked that as a rule of law it appears to work too many ways to be practicable, because legislation is impossible without disturbance of social relations, and therefore of existing interests.  However this may be, the rule has been held to apply with peculiar force, though I know not why, to the vested interests of the public creditor, and prejudice has been arrayed against the return to the double standard because it is held that payments in silver might affect the interests of the public creditor.  To this I have already adverted, and I do not propose to raise that question now.  But while on the subject of vested interests and breach of contract there is something more to be said.  That something relates to the mining interests of this country ;  interests which, I think it will be admitted, are quite as important to the welfare of the country as those of the public creditor.

The mining interests of this country came into existence under clauses of the Constitution which it was well understood made both gold and silver money legal tender for the payment of debts.  During the first three-quarters of the period of our national existence silver chiefly and for the most time only was employed as money ;  during the last quarter of the period gold was chiefly so employed.  But not until 1873 (and that merely by implication) was either metal demonetized.  It was therefore while both metals were money that the entire gold and silver mining interests of this country were created and built up, at first upon alluvial findings and washings, and afterward with the profit from these upon the more difficult and expensive ores in veins and lodes.  These interests, once so few, now so numerous that they yearly throw into the lap of the country $100,000,000 of the precious metals—more than one-half of the product of the entire world, and sufficient if rightly managed to render our country the clearing-house of the world—were literally built up with the naked fingers, with the rude pick and cradle.  This single foundation was that clause of the Constitution which makes the precious metals money, but for which they would have had no existence, and upon the continued and faithful observance of which they depend even to-day for maintenance, because, though of gigantic dimensions in the aggregate, their average profit is so small that it vanishes with the slightest disturbance in the value of the precious metals.  Yet there are those who hold in respect of these permanent, important, and well-deserving interests vested in mining that the interests of a pack of clamorous money-lenders in London, Berlin, and Frankfort are of vastly more account than theirs.  The recent project of a Boston correspondent to pay the interest on the public debt in silver dollars they sneered at as “a nice down-east joke,” and bullied about the rights of vested interests under the Constitution.

The Constitution !  Sir, when I come to pronounce that word I do so with a respect that is akin to reverence ;  for under the shadow of that instrument, so wisely and so wondrously drawn as to have lasted a century of the world’s busiest times, there has grown up from thirteen feeble and jealous colonies, containing 3,000,000 people of varied origin and conflicting interests, a nation of thirty-eight proud States, containing 45,000,000 people, free, homogeneous, prosperous, strong, and progressive.  When and where else in the world’s history has such a growth been seen ?  The constitution of the Roman republic, though nominally it lasted longer, really did not last so long, for it was frequently and essentially altered and modified.  It had to deal with a far lesser number of states, interests, or people, and the progress under it was nothing as compared with our progress.  Take the most important of modern states, England, France, or Germany.  In which of them will you find the same freedom, the same equality, the same ingenuity and adaptability, the same energy, the same elasticity, the same rapidity of growth, either in numbers or wealth ?  Since the date of our Constitution, England has scarcely tripled her population.  France has not yet doubled hers, while ours has increased fifteen times.  Our national life has not been without its vicissitudes, but who can deny that it has been grand, noble, and progressive, and that it is due, all of it, to that sacred instrument which we rightly term the Constitution for the United States ?

In pronouncing the name of this instrument I do so with the respect due to the mighty agency which it has had in building up a great nation and promoting the progress of man in all countries.

In this remembrance I should almost regard it as sacrilege to invoke its support of a false doctrine, to twist it, distort it, or seek to turn it aside from its plain meaning.  And I regard it as sacrilege when I see it used as a cover to protect the sharp-toothed greed of plutocracy.

That gold and silver are both the money of the Constitution is so obviously the meaning of that instrument that the question, so far as I am aware, was never fully raised until lately and after the passage of the act of 1873.  That the Constitution either directly or by the remotest implication throws any mantle of protection over the public creditor which does not at the same time as amply cover the third greatest industrial interest of the whole country—this I deny.

Between an interest which has become “vested” by dint of hasty and ill-considered legislation, and one which has become “vested” through bold adventure, the peril of life, the miasma of death-inclosing valleys, the snows of lofty mountains, the arid and burning plains, through incessant labor, and far away from “home” and familiar faces, between these classes of vested interest there is a wide difference.  One of these classes demands the maintenance of the act of 1873, because it fears that the overthrow of that act may have some possible hearing upon the advantages which it has secured ;  the other asks for its immediate abolition because it is unconstitutional, it is unwise, it is sapping the foundation of an industry of vital importance to the country.  Let the Senate decide between them, and choose whether it will intrust the welfare of the nation rather to the money-dealers of Lombard street and the Continent than to the hardy mountaineers of the Sierra Nevadas, whose occupations are environed with danger and whose unceasing watch-word is Liberty ?

WHAT THE HAND OF THE DESTROYER HATH SPARED.

Some of the greatest nations of the earth have been destroyed, and it has been asserted that nothing remains to attest their existence except the languages they employed.  Such is the case with the ancient Arabians, the Phœnicians, and the Carthagenians, who were all of the same race.  Such, also, was the case with the ancient Malays, Egyptians, and Toltecs.  Of the Lake Dwellers of Switzerland or the Mound Builders of America, it is said that not even language remains.  And yet all of these nations and many other prehistoric ones, as the Pelasgians, the Etruscans, &c., have left a legacy to mankind.  That legacy is the precious metals which they employed for money.  Much of it must still be in existence in some form or other of usefulness.  The hand of the destroyer, Time, hath spared this, even while he hath not spared language.  And yet there are impious men to-day who, for the sake of a temporary personal advantage, would strike down this last and precious vestige of nations who fought and labored scores of centuries ago that we might now live in peace and plenty.

WORSE THAN DESTROYING THE MINES.

The demonetization of silver would not merely have the same result as the stoppage of all the silver mines of the world ;  the result would be far worse ;  it would be as though one-half of all the labor of past ages, except what doubtful legacy has remained in the shape, of land improvements, were blotted out of existence.  This would be worse than destroying the mines, for they might be re-opened, whereas the demonetized metal would be irretrievably lost in the arts and otherwise.

“ LET THINGS STAND AS THEY ARE.”

“ Let things stand as they are ” is the false and treacherous maxim of those who have wrongfully obtained an advantage over others.  Laissez faire does not mean “ let things stand as they are,” but “let alone” altogether.  The existing state of affairs may be the result of a good deal of meddlesomeness.  To let them remain as they are would be to let ruin work its own way.  The single standard foisted upon this nation by the act of 1873 was a mischievous interference with trade, and things cannot be let alone until this act is repealed.  The suppression of the double standard cannot be compared with the usury laws.  It is ten thousand times, nay, infinitely worse ;  for in the rate of interest for money there is competition between moneylenders, whereas concerning the kind of metal in which they will demand to be paid there will be no competition whatever.  Herein the interests of all money-lenders are identical.  The only way to meet their rapacity is by restoring the double standard, to give the debtor the same option in paying that the creditor had in lending.

ANTIQUITY OF MONEY—PREHISTORIC NATIONS
EXPERIMENTS IN MONEY—GOLD STANDARD—PLATINUM COINS.

Hitherto, in alluding to the antiquity of gold and silver money, I have sometimes used the expression thirty or fifty centuries, the former referring to the oldest coins now extant, the latter to the earliest period for which we have indisputable evidence concerning the use of these metals for money.  But if there is any credence to be reposed in the numerous authorities quoted in Baldwin’s Prehistoric Nations, both gold and silver were employed as money by the ancient Arabians or Cushites from sixty to a hundred centuries ago.  The precise antiquity of money is, however, of little consequence in this connection.  It is sufficient if we know that it is of very great antiquity, and of this there is no doubt whatever.

During all this time every conceivable sort of experiment was made with money.  It was tried in ingots, in “dust,” in wire coils, and in coins ;  round, square, oblong, punctured, buttoned, milled, and unmilled coins ;  coins with and without alloy ;  pure coins, composite coins, base coins, plated coins, coins of brass, tin, iron, nickel, and platinum.

The history of platinum coins exemplifies the results of all these experiments.  These coins were adopted in Russia in 1826, during the notable decline in the product of the precious metals, which occurred from 1810 to 1840, and before the Ural and Siberian mines were opened.  No substance was intrinsically more suitable to answer the purposes of money than platinum.  It was only inferior to the precious metals in one respect, but that respect proved fatal to its continuance.  There was no great stock of platinum in the world to modify the vicissitudes of its current production as there is of the precious metals ;  no reservoir of antiquity, no heirloom of the centuries.  Consequently, every time the annual production of platinum greatly increased, prices in platinum coins were suddenly and violently advanced, and every time the production of platinum fell off, prices fell.  These violent aberrations proved fatal to the continued use of this metals for coins, and it was discontinued.  The same thing had previously occurred with coins of brass, iron, tin, &c., and if our nickel coins were anything more than tokens, mere promises to pay stamped on base metal, the same thing would happen with them.

Substitutes for money form another class of experiments which have ended disastrously in bank panics, in commercial crises, in stay laws, and in repudiation.  The trouble is the same with bank credits as with coins of any other substances than the precious metals.  There is no stock on hand to modify the influence of great supplies.

The adoption of the single gold standard is another experiment in money of similar character, and subject in a measure to the same fatal objection.  In this case the stock on hand is very great ;  but it is only one-half as much as that of the two precious metals combined ;  and this important fact must settle the fate of the experiment.

COMPARATIVE FACILITY AND COST OF TRANSPORTING GOLD AND SILVER.

During the great continental wars of three-fourths of a century ago, the necessity of having large military chests in the service of armies rendered it necessary to transport large sums of specie in the field.  For this purpose gold was found to be superior to silver on account of its lighter weight in proportion to value.  While the fact was then so important that it may have had no little influence in reconciling the British nation with that formal adoption of the single gold standard which followed shortly after these wars, it is now of no importance whatever, even in Europe, and never has been of any importance in this country.  Armies do not employ military chests now a days.  Russia, Austria, Italy, Germany, France, and even England, have fought their greatest campaigns with the aid of treasury or bank paper.  In America all our wars have been fought with paper.  The colonial expedition to Louisbourg, in 1745, was conducted with paper, our war of Independence was fought with paper, our rebellion was put down with paper.  Whatever may be the evil effects of paper, it is hopeless to expect that it will not be issued by governments in the event of great wars.  War is of itself the greatest of evils, and the lesser evil of paper merely follows in its wake, as sharks do the mutinous ship.

In times of peace the cost of transporting a given sum in gold or silver is the same, notwithstanding the lighter weight of the former.  Freights upon gold and silver are rated according to value and not according to bulk or weight.  The freight upon a ton of gold from California to new York is now more than sixteen times as much as that upon a ton of silver, and this is the same upon railway, and steam ship, and other transportation lines throughout the world.  The curious will find the actual freights quoted in M. Cernuschi’s work on Bimetalism.

The rating of freights upon gold and silver by value instead of bulk or weight is due to the important consideration of risk.  The bulk or weight of a million dollars in silver is far greater than that of a million dollars in gold ;  but the risk of loss from accident or robbery is far greater in the case of gold than in that of silver.  An ingot of gold worth $2,000 could be very easily lost, and would be very difficult to recover in case of a railway collision, a fire, the breaking of a bridge, a robbery, &c.  An ingot of silver worth $2,000 would be difficult to lose and easy to recover ;  nor could a thief conveniently carry it off, because it would weigh over a hundred pounds.  No guards are required to conduct a shipment of silver bars, because no highwaymen could lift them, whilst gold ingots of the same value could be stowed away in the pocket, and therefore would have to be guarded by armed men.  The expense incurred in this and other ways fully counterbalances the saving which arises from inferior bulk or weight in transportation.

As to the alleged superiority of gold in handling sums of money suitable for the ordinary payments of commercial life, it is the merest moonshine.  One would suppose, to hear this claim made, that such an institution as banking was unknown to the world, instead of being, what is the fact, of seven hundred years’ growth.  Only the most narrow theorist will contend that the resumption of specie payments in this country will be followed by the extinction of banks.  After resumption, banks will receive specie on deposit and issue bills in its place, and these bills will be used for payments from hand to hand just as similar bills were used before suspension.  The only difference will be that, thanks to the superiority of the national over the old State-bank systems, the bills will be better secured—indeed, we may say absolutely secured—provided, of course, that no relaxation is made of the admirable and sound conditions and principles upon which this system was founded ;  and of such relaxation we need entertain no fears.

In such case, and in all cases, we always have a perfect expedient to obviate the inconvenience of handling coins, that of depositing the coins with the Government, which shall issue therefor, dollar for dollar, bills to be declared by law receivable for all payments, public and private.

This project I need not elaborate at this time or in this connection.  Its suggestion merely serves to show that in any event our money, whether of gold or silver, or both, as it should be, can always be made easy enough to handle through the medium of representative paper.

It should always be borne in mind that, as M. Cernuschi remarks, a bill of exchange (or bank-note) for silver does not weigh any more than one for gold.

THE SINGLE STANDARD COMMERCIALLY UNPROFITABLE.

If we look at the question from the national and not merely the plutocratical point of view, it will appear that every nation which demonetizes one of the metals and limits itself to the rise of the other only punishes itself.  It would leave more money to the other nations.

Prices would fall in the former countries and rise in the latter.  The former would have to sell their products to the latter at low prices and purchase back in high prices ;  just as China sells to us now at low prices and buys from us at high ones.  If instead of selling their products wherewith to pay for the products they purchased, the gold-standard nations sold their products wherewith to purchase the demonetized metal in which the prices of the other were rated, as, for instance, if England purchased silver wherewith to pay for East India products, she would have to purchase such silver at the high prices of commodities which would prevail in India after the surplus stock of Europe were driven thither.  In other words, the course of exchange would be against the gold-standard nations.  For example, a pound sterling of exchange upon India would cost more than a pound sterling of gold in England.  Arrange it as you will, either product against product or product against exchange, the result will be the same.  The nations with a limited stock of money would trade disadvantageously with nations having both the metals for their standard of value.  This is the secret of the profitableness of the oriental trade.  The oriental countries employ but one metal for their standard—silver.  The occidental countries have hitherto employed both metals.  Hence the low prices of the Orient and high prices of the Occident.  As a measure between the labor of the two great divisions of the world, it has always been favorable to the Occident.  This advantage it is now proposed to destroy.  To call it madness would be but a mild stigma.

OUR MONEY SHOULD BE EN RAPPORT WITH
THAT OF THE WORLD.

Having already shown that gold and silver are the money of the world—not gold or silver singly—it would seem hardly necessary to reply more specifically to an objection to the restoration of the double standard which some men suggest.  That suggestion is that unless we adopt the gold standard we shall not be en rapport with the standard of England, the country with which we transact the most commerce.

Those who suggest this objection do not appear to remember how foreign exchanges are conducted.  Balances of trade are not paint in coin, but in bullion, and it makes no difference whether the bullion is of gold or silver or both.  It goes for its value, whatever that may be at the time.  Exchanges are adjusted by means of bills, which are rated in view of the standard of value in the several countries upon or through which the bills are drawn.  Suppose our standard were of gold, and we had to pay for a balance of trade to China ;  we would not pay in gold coin, but in bullion, in gold not at its price in this country, but at its price in all countries.  This would be determined by the course of exchange, which is the product of settlements between all commercial nations.  So, if our standard were the double one of silver and gold, our balances with England would not be settled in gold and silver coin, but in bullion, at its price in all countries, as determined by the course of exchange.  We would settle in bills of exchange, as we do now, as we always have done.  So far as this objection goes, the discordance between the standards of two countries is of no consequence whatever.  Discordance of standard is only material when it has the effect of locally demonetizing, for a greater or lesser duration of time, an important part of the world’s stock of coin, and this can only happen when several important countries unite in demonetizing one of the metals.  This is the case now.  Silver is being driven to the Orient, and though, in spite of demonetization, it will find its way back in time, yet meanwhile the nations who unite in demonetizing it will needlessly produce a revolution in prices and the relations of the various classes of society which may seriously affect the rank of such in the scale of civilization.

To render our standard of money en rapport with that of England, while it would not prove of the slightest convenience in commercial affairs, would tend to render our institutions of government en rapport with hers.  If this is what gentlemen desire, they should say so openly, and not under the mash of a fancied commercial advantage.  Their constituents will then be better able to appreciate their statesmanship.

GROWING INFLUENCE OF THE WORLDS STOCK OF SPECIE.

There was a time when the world’s stock of specie was so small that the slightest vicissitude in the supply of bullion from the mines was sufficient to cause violent fluctuations in prices and violent changes of fortune.  The feudal system owes no little of its strength and permanence to this fact, for it was the only institution upon which the ruling classes, ecclesiastical and secular, could rely to secure to them their monopoly of wealth.  When the feudal system, through many causes,⁷ began to lose strength, the mercantile system was adopted to serve the purpose of controlling the flow of specie from one country to another.  At the present time the world’s stock of specie is so great that the vicissitudes of supply call have but little influence upon prices ;  and as that stock becomes larger and larger the influence of the supply will become less and less.  Another century may see society safely placed beyond the influence of these mutations.  Yet now, upon the threshold of a condition of affairs which must do more to equalize the fortunes of individuals and advance the progress of society than any other, it is proposed to destroy at one blow the work of countless centuries, by demonetizing one-half of the world’s stock of specie, and the United States are asked to assist in this work of superlative madness and inhumanity.  Such a proposition, which could only emanate from men crazed and arrogant with good fortune, is not merely an insult to the genius and institutions of this country ;  it is a bold and direct attack upon progress, upon civilization, upon liberty.  The men who have made it do not merely attack the prosperity of their own countries ;  they conspire to destroy humanity ;  they are traitors to society ;  they have urged a proposition of the most violent and revolutionary character.

NOBODY HURT BY RESTORING THE DOUBLE STANDARD.

I ask gentlemen to point me out one individual who can be injured by restoring the double standard, retaining the silver dollar of 371½ grains fine, and making it a legal tender for all amounts, as it was before.  Point me out one man who would suffer by it.  Point me out one product of the country which would be lessened in its gold price by restoring the silver dollar.  Point me out one interest imperiled, one sacrifice sustained.  On the other hand, I will point you out millions of men who will be ruined if you persist in retaining the gold standard ;  I will name a thousand products of the country which will continue to fall in price ;  I will show you a myriad of interests in jeopardy and innumerable sacrifices to be sustained.

THE STOCK OF MONEY MAKES PRICES, AND THE COURSE
OF PRICES AFFECTS CIVILIZATION.

Double the world’s stock of money to- day, and you will double all prices.  Diminish it one-half, and prices will fall one-half.  This relation of money and price is axiomatic.  You will find it in all the books on political economy.  No writer has ever ventured to doubt it ;  not even Tooke, who doubted everything, even his own opinions.  Price is the expression of the measure of value, which is money.  The larger the measure, the larger the expression or price ;  the smaller the measure, the smaller the expression or price.  Hence, with a large stock of coin in the world, prices would be high :  with a small stock, prices would be low.  To increase the stock of coin is to enhance prices, alleviate the burdens of the debtor class, and distribute wealth ;  to decrease it is to lower prices, increase the claims of the creditor class, and concentrate wealth.  One result leads to social progress, the other to decay.  Every dollar hewn out of the rocks, no matter whom it enriches in the first instance, has an immediate effect in alleviating the general condition of mankind.  Every dollar worn out, lost, or demonetized by plutocratical legislation tends to lower prices and concentrate wealth, tends to impoverish the needy and enrich the affluent.

The proposition to resume specie payments in this country on the gold standard is tantamount to demonetizing one-tenth of the world’s stock of silver or one-twentieth of its entire stock of coin.  When the long period which has been required to accumulate this stock is taken into consideration, it is not too much to say that this act will set us back in the command of some of the most important factors of civilization as much as a century of constitutional freedom has set us forward.

THE STANDARD OF VALUE IN VARIOUS COUNTRIES IN 1870.

The standard of value which existed in the various principal countries of the world in 1870 was as follows :

DOUBLE STANDARD.

Country.                                   Population.
United States*....................................................39,000,000
France................................................................36,000,000
Italy*.................................................................26,000,000
Spain .................................................................17,000,000
Belgium .............................................................. 5,000,000
Switzerland...................................................... 3,500,000
Greece*............................................................ 1,500,000
Peru............................................................. 4,000,000
New Granada..................................................... 3,000,001
Ecuador.............................................................. 1,000,000

SILVER STANDARD.

India ................................................................ 200,000,000
China................................................................ 250,000,000
Russia*............................................................... 82,000,000
Germany ........................................................... 41,000.000
Austria*.............................................................. 30,000,000
Mexico ............................................................... 9,000,000
Sweden
Norway................................................................ 6,000,000
Denmark ............................................................. 2,000,000
Holland................... ............................................ 4,000,000
Central America................................................... 2,500,000

GOLD STANDARD.

United Kingdom.................................................31,000,000
Turkey*.............................................................. 30,000,000
Brazil*................................................................ 10,000,000
Portugal.............................................................. 4,000,000
Chili..................................................................... 2,000,000
Australia............................................................. 2,000,000

* Specie payments suspended.

AN INTERNATIONAL STANDARD CONVENTION.

It would be desirable for all nations to adopt permanently the same standard of value, and if the same were, as in my opinion it no doubt would be, the double standard, to adopt the same relation between the metals.  To effect this object all that is necessary is an international standard convention, which can be called by any one of the great powers, and should be called by the United States.  Provision should be made that no other projects but the standard and ratio should be determined upon, and that the nations should vote according to population or wealth, or on a mixed basis consisting of both.  For such an international convention to be called by the United States there is imminent necessity.  I regard this project as likely to lead to results of the highest importance.  It may become the forerunner of that federation of the nations of which poets have dreamed and bards have sung.  The initial point of such a federation is most fitly the standard of value, for this lies at the base of all social and governmental arrangements ;  it determines the institution of property.

THE PECUNIARY INTEREST OF ENGLAND AND GERMANY IN THE GOLD STANDARD.

In a paper published in the Journal of the Society of Arts for March 10, 1876, Mr. Ernest Seyd estimates the amount of foreign debt (governmental, corporative, and other) held in England, Germany, and France as follows :

England, from .................................$5.000,000.000 to $5,500,000,000
Germany, from ..................................2,750,000,000 to   3,000,000,000
France, from...................................... 2,500,000,000 to   2,750,000,000

Confining our view to England and Germany only, we shall see how great a present pecuniary interest these countries have in establishing and upholding a single gold standard.  According to Mr. Seyd’s estimates these two countries alone hold over $8,000,000,000 of foreign debt.  By limiting themselves to the single gold standard and endeavoring to influence other nations (our own among the number) to adopt it, they have already succeeded in producing a decline of about 7½ per cent. in the relation of gold and silver, this being the ratio of the difference between 15.63 and 16.69, the average relation of silver to gold in 1872 add 1875 respectively.  Now, 7½ per cent. on $8,000,000,000 amounts to no less a sum than $600,000,000, which is the measure of the profit of the British and German plutocracy on the foreign debts they hold.  Descending from the principal to the interest on these debts, if we estimate the average annual interest at 6 per cent. per annum, which is certainly within the mark, the difference to these plutocracies between obtaining their interest in gold and obtaining it in silver during the years 1872 and 1875 inclusive has been no less than $36,000,000 per annum.  Since the introduction of the demonetization act into the American Congress these gentry have gained $108,000,000 by having their interest paid in gold instead of silver.  The magnitude of this advantage, every dollar of which bas been a clear and gratuitous loss to the debtor nations, is surely enough to account for the vehemence of the plutocratical objection to the double standard.  With $36,000,000 a year at stake, there is little wonder that they have succeeded in marshaling to their aid so imposing an array of advocates in the legislatures and the press of the victimized countries from which this extra and gratuitous tribute was drawn.

THE RIGHT TIME TO REHABILITATE THE SILVER DOLLAR.

The right time for us to rehabilitate the silver dollar, to restore the double standard, is not when the necessities of nations shall compel them, as it will compel them all, to go into the market for silver.  A simultaneous demand from Germany and the United States alone would put that metal up to 15, perhaps for the time even to 14.  The right time for its is now, while silver is temporarily cheap, and no other nation of the Occident is bidding for it.  Last month silver stood at and already it is up to 17.69.  Before the year ends expired it may stand 15.50.  It is dangerous and costly to delay.  The present time is therefore the most favorable one which may present itself.  Let us not postpone reform until it is too late to accomplish it.  European demonstration and an exceptional mine give us a great advantage.  Why should we not use it ?

PRACTICAL WORKING OF THE SINGLE STANDARD IN ENGLAND.

When an outflow of specie threatens to occur in England, the occurrence is sought to be averted and its effects mitigated by raising the rate of discount at bank.  This action at once clogs all financial operations by rendering them expensive and difficult of accomplishment.  Raising the rate of discount at bank is like patting the brakes on a railway train ;  lowering it is like taking the brakes off.

The Bank of England was established in 1694.  From that year to the year 1816, a period of one hundred and twenty-two years, there were only sixteen changes in the bank rate.  This rate never fell below 4 per cent., and (except in two instances to 6) never rose, above 5 percent.  During this period the double standard existed in England.  In 1816 the double was changed to the single gold standard.  From 1816 to 1647, a period of thirty-one years, there were sixteen changes in the bank rate ;  as many as had occurred under the double standard during a period of one hundred and twenty-two years.  But these changes, numerous as they were, compared with the few that had previously taken place, were few themselves compared with the number that took place after 1847, when the gold product of California began to make itself felt in the markets of the world.  From 1847 to 1874, inclusive, a period of twenty-seven years, the number of changes in the Bank of England rate was no less than two hundred and twenty-three, and the rate fluctuated violently from 2½ to 10 per cent. per annum.

These fluctuations have been ascribed by various writers to various causes, but none of these causes appear to have had so potential an effect as the mutations of the gold production of the world, for these must have operated with peculiar and great force in a country which alone among all the great countries of the world had committed itself to so unstable a measure of values as gold.

PRACTICAL WORKING OF THE DOUBLE STANDARD IN FRANCE.

While I have not been able to obtain in time for the present purposes the statistics of the changes in the rate of discount by the Bank of France, my general recollection on the subject enables me to say that these changes have been very few, and, except at certain critical financial junctures, they have been unimportant.  In a word, the rate of discount charged by this great institution, which is second only to the Bank of England in the magnitude of its resources and operations, has been changed but seldom and slightly from the period of its foundation, in the year 1800, to the present day.  Even at the financial junctures alluded to, I am unable to find any record of a higher rate than 6½ percent., and this occurred during the suspension which followed the Franco-German war.  This steadiness of the rate is attributable to the double standard.

THE BANK RATE REGULATES ALL COMMERCIAL OPERATIONS.

The rate of discount at bank not only regulates the outflow of specie ;  it also very powerfully affects all commercial transactions.  It is the price at which money can be borrowed to carry domestic produce, to import and export merchandise abroad, to construct railways and other public improvements, to pay debts, meet maturing obligations, and the like.  Every commercial speculation, every financial scheme, is influenced by its fluctuations.  It is the merchant’s inverse barometer, whose fall indicates prosperity, and whose rise points to bankruptcy and ruin ;  while its modifying influence acts like a breakwater to protect the country from the fierce currents of the financial ocean.

NO SUCH REGULATOR IN THE UNITED STATES.

In the United States there is no national bank par excellence, no great central institution, whose operations govern those of all smaller ones and at once influence the course of trade.  There has been no such institution in this country  since 1837.  The so-called “national banks ” are private institutions, and national only to the extent that they are chartered by the Federal Government, and must conform to its regulations as to securities and circulation.  They may each of them charge whatever rate of discount they please within the rate permitted by the laws of the State wherein they are situated.  As the legal rate of interest differs in nearly all the States, and the banks are not combined under any single management, there is no uniformity in the rate of interest they charge, and it follows that, except so far as concerns the action of certain prominent banks in the leading financial cities of the country, there is no practical check which can be exerted to restrain or modify a threatened outflow of specie, or any other financial disaster or inconvenience.

THEREFORE THE UNITED STATES LESS ABLE THAN ENGLAND, FRANCE, OR GERMANY
TO RUN THE RISKS OF A SINGLE STANDARD.

Hence for the United States to trust its commercial prosperity to the violent hazards of a single standard would be even more improvident than it has proved in the case of England.  That country, in its great national bank, possesses a “ governor ” upon whose action it can rely to break the force of sudden and great movements of specie.  Even with this “governor,” we have seen in the fluctuations of the rate of interest how violent these movements have been.  France possesses a similar “ governor”;  so does Germany.  The former country has never run the risk of trusting to it in this matter of abandoning the double standard, while the latter, during a contemplated change from the silver to the gold standard, has halted midway at the double standard.

Yet, although quite destitute of that great financial mechanism, even with the aid of which France and Germany hesitate to encounter the great peril which England has invited them to share with her, we of the United States are asked to adopt the single gold standard, and run the risk of immediate shipwreck.  This may be sound advice ;  but I must confess it does not appear to come from people who have evinced any solicitude for the welfare of the country.

OPPOSITE AND UNEXPECTED EFFECTS OF THE FRENCH INDEMNITY.

As a consequence of the victory of Germany over France in 1870, the last-named country was compelled to pay to the first named an indemnity amounting to the enormous sum of $1,000,000,000.  One would naturally have supposed that this indemnity would prove a heavy burden to France and a source of great prosperity to Germany—but owing, as it seems to me, chiefly to the retention of the double standard in France and the attempt to establish the gold standard in Germany, these consequences have been reversed ;  the burden is upon Germany ;  the prosperity has fallen to the share of France.  The presence of a large stock of silver coin in France enabled that country to raise the enormous indemnity fund from its own people, who offered the government five times as much as it asked for and at a low rate of interest.  This stock of silver would not have been found in the country but for the retention of the double standard of 1803.  The rate at which it was loaned was so low, that the country scarcely feels the burden, and its industrial activity has received no check.

Germany, on the other hand, no sooner received the indemnity than she unwisely attempted to follow the short-sighted footsteps of England, and changed her standard of silver to gold.  What have been the consequences ?  Panic, interruption of industry, commercial stagnation, and popular distress.  To this distress Germany, unlike England, cannot afford to turn a deaf ear, for the greatness of the former country depends upon its people, and not like the latter, upon its wealth.  Already Germany hesitates, and she will soon be obliged to retrace her ill-advised steps.  If she does not, it is quite safe to foretell that her efforts to establish the gold standard will do more to alienate from her the affections of her heterogeneous populations than the land reforms of Stein and Hardenbergh had done to win them.  If such a result as a change from the silver or the double standard to the gold one is the natural result of receiving a great war indemnity, it will be the better for Germany the next time she wins a victory to pay an indemnity rather than receive one.

THE VOICE OF AUTHORITY.

The voice of authority has ever been in favor of the double standard and opposed to the single.  I have only time to quote some of the most eminent statesmen, economists, bankers, writers, and practical men on this subject.

Alexander Hamilton :

To annul the use of either of the metals as money is to abridge the quantity of circulating medium, and is liable to all the objections which arise from a comparison of the benefits of a full with the evils of a scanty circulation.  (Report to Congress, 1791.)

Thomas Jefferson :

I return you the report on the mint.  I concur with you that the unit must stand on both metals.  (Letter to Hamilton, February, 1792.)

In his Recherches sir For et sur Fargent, 1843, Léon Fauchet said :

If all the nations of Europe adopted the system of Great Britain, the price of gold would be raised beyond measure, and we should see produced in Europe a result lamentable enough.  The Government cannot decree that legal tender shall be only gold, in place of silver, for that would be to decree a revolution, and the most dangerous of all, because it would be a revolution leading to unknown results, (qui marcherait vers l’inconnu.)

In a memoir read before the French Institute in 1868, M. Wolowski said :

The suppression of silver would bring on a veritable revolution.  Gold would augment in value with a rapid and constant progress, which would break the faith of contracts and aggravate the situation of all debtors, including the nation.  It would add at one stroke of the pen at least three milliards to the twelve milliards of the public debt.

Though the voices and votes of this great statesman and publicist, and of those who sided with him in the debates of the monetary convention of 1865, were overpowered, yet they still reverberate throughout the world ;  for truth and right cannot be suppressed.

A monetary commission appointed by the French government in 1869 took the testimony of practical financiers, who were unanimous against the proposed demonetization of silver.  Before this commission M. le Baron Alphonse de Rothschild said :

The actual state of things—that is to say, the simultaneous employment of the two precious metals—is satisfactory and gives rise to no complaint.  What is most needed in commerce is facility in its operations, and to-day it employs, according to its needs, sometimes gold and sometimes silver, and the partial replacement of silver by gold, which has taken place in these later times, has been effected without inconvenience.

They now demand that silver should be demonetized, as fifteen years ago they demanded that gold should be.  The French government wisely refused to demonetize gold then, and it will be equally wise to refuse to demonetize silver now.  In fact, whether gold or silver dominates for the time being, it is always true that the two metals concur together in forming the monetary circulation of the world, and it is the general mass of the two metals combined which serves as the measure of the value of things.  In countries with the double standard the principal circulation will always be established of that metal which is the most abundant.  It is scarcely twenty years ago that silver was the principal element in our transactions.  Since the discoveries of the California and Australian mines, it is gold which has taken its place.  No person can foresee what the future has in store for us or can predict that the proportion in which the two metals are now produced may not be changed in favor of silver.

It appears to me that there are real advantages in maintaining silver in circulation and none in its suppression, since, it is now actually a part of the circulation.  I should regret the demonetization of silver in its relations to our internal circulation, our commercial intercourse with other countries, and the always uncertain eventualities of the future.  But I should regret it even more if our example should be followed by other nations, for that suppression of silver would amount to a veritable destruction of values without any compensation.

Without doubt the two metals are not always in the same measure at our control ;  there is always one more abundant than the other ;  but neither of them has ever completely disappeared, and we have always been able to find the one of which we had need.

This is not the voice of plutocracy ;  it is the utterance of a great financial power whose self-interest is grand, enlightened, and in harmony with the other great interests of the world.

M. Rouland, the governor of the Bank of France, said :

We have not to do with ideal theories.  The two moneys have actually co-existed since the origin of human society, without any disadvantage, and even with actual advantage in all countries which have availed themselves of their.  They co-exist because the two together are necessary, by their quantity, to meet, the needs of circulation.  This necessity of the two metals, has it ceased to exist ?  Is it established that the quantity of actual and prospective gold is such that we can now renounce the use of silver without disaster ?  In place of the two moneys, is it entirely sure that the whole world can be usefully served with only one ?

M. Wolowski said :

To adopt one metal, gold, to the exclusion of the other, it is not merely as if they closed all existing mines of silver but as if they suppressed in this regard the labor of all past ages.  The sum-total of the precious metals is reckoned at fifty milliards⁸ one half gold and one-half silver.  If, by a stroke of the pen, they suppress one of those metals in the monetary service, they double the demand for the other metal to the ruin of all debtors.

At the sitting of the French senate on the 28th of January, 1870, which has properly been characterized as “ memorable,” from the magnitude of the subject of the debate and from the dignity and gravity with which the discussion was maintained, Dumas, a senator, to whose words, learning, experience, virtue, and age combined to give weight, invoked the body to pause before concluding to make a change which “ would affect the whole human race.”  He said :

Those who approach these questions for the first time decide them at once.  Those who study them with care hesitate.  Those who are obliged practically to decide doubt and stop, overwhelmed with the weight of the enormous responsibility.

The quantities of the precious metals which are now sufficient may become insufficient, and we should proceed with great prudence before we diminish that which constitutes a part of the riches of the human race.  Sometimes gold takes the place of silver.  Sometimes silver takes the place of gold.  This keeps up the general equilibrium.  Nobody can guarantee that the present vast production of gold will continue.  The placers are found on the surface of the earth, and may be exhausted by the very facility of working them.  Silver presents itself in the form of subterranean veins.  Science may contribute to accelerate its extraction.  In presence of the unknown, which dominates the future, we should practice a prudent reserve.

Henri Cernuschi, the eminent French political economist and author of La monnaie bimétallique, writes an article in the Paris Siècle on the depreciation of silver, urging England and America to adopt a double standard and to fix the relative value of gold and silver at 15½ to 1, the rate generally prevalent on the Continent.  Dwelling specially on Anglo-Indian interests, M. Cernuschi says :

Seduced by gold “monometalism,” Europe has ceased to coin silver, but it had long coined it previously, and colossal sums are in circulation.  All this silver is to be called in and melted down, the more so as it circulates as a forced currency for a value it no longer possesses.  All this silver is to be sold, and it is to London it will be sent to get gold.  Floods of silver going up the Thames, floods of gold descending ;  scarcity and increasing value of the yellow metal, which is the only English currency, glut and depreciation of the white metal, which is the only Indian currency.  The two conflicting “monometalisms” are about to face each other, the one suffering from anæmia, the other from plethora ;  two crises instead of one—a gold crisis and a silver crisis.  From Galle to the Indus what a monetary shock ;  what a rise of prices produced by the invasion of silver !  What increasing alterations in the value of all contracts and all engagements fixed in rupees !  The most terrible monetary storm ever known, breaking out in a conquered country, amid a population six times as large as that of the United Kingdom !  Can England fold her arms ?  Can she say to trembling interests “ Be patient ;  everything will end by finding its level ? ”  The indifferent fatalism to which somnolent ulemas may resign themselves is repugnant to the proud British Neptune.  England will have resolution to eliminate the evil.  To insure her welfare she will desire all that is possible, rational, and efficacious.  If it is demonstrated that the international rehabilitation of silver is the real solution, England will not hesitate ;  she will convoke the nations to the congress of monetary peace.

R.H. Patterson, a distinguished political economist, says :

It appears evident, then, that the formidable objections which theorists make to the existence of a double standard of value in a country are unsuppurted by facts.  They conjure up a vision of hydras, gorgons, and chimeras dire for which we feel no apprehension.  If a country has enough of gold or of silver to make its coinage entirely of that metal, good and well.  But if not—as is the case in India—by all means let it employ both metals.  The correctness of this opinion is abundantly shown in the case of France.  In that most logical of countries the double standard has long been established, and no one there has any desire to abolish it.  During the last dozen years this double standard has been subjected to the severest test that could be applied, and yet every one is satisfied with its working.  Gold is pouring in, silver is pouring out ;  a revolution is being effected in the currency of France ;  yet no one complains.  Evidently, practical or appreciable disadvantage of any kind is quite unknown.  Theoretically, as we have shown, a double standard cannot do much harm ;  practically, we find it does none at all.  And since it works under the most trying circumstances without the least injury in France, it may safely be introduced without any apprehension and with great advantage into India.  (The Economy of Capital, London, 1864, page 59.)

ERNEST SEYD.  This able and impartial writer has written several works on coin and bullion which evince a thorough knowledge of these difficult subjects.  He Says :

The rejection of silver as a standard of value would be a most unwise and dangerous proceeding.  It would be a far better and safer course to establish the double gold and silver valuation.  (Bullion and Foreign Exchanges, London, 1868.)

We think it can be shown that the gold valuation has been injurious to England’s interests in her foreign trade as well as in her internal financial policy.  (Ibid.)

Similar views are entertained in Mr. Seyd’s latest essay published in the Journal of the Society of Arts for March, 1876.

CONCLUSION.

I have done.  For the patience and attention with which Senators have listened to an exposition unusually lengthy and somewhat tedious, I thank them, and can only plead the transcendent importance of the subject.

There is yet time to undo the work of 1873, to correct the grave blunder perpetrated by the mint act of that year, in interdicting the American silver dollar and substituting the single standard of gold for the money of the Constitution.  The disastrous effects which, in my opinion, are bound to flow from this attenuation of the standard and the basis of prices and credit are not yet felt because of the existing suspension of specie payments ;  but so soon as specie payments are resumed—if indeed they call ever be resumed without the restoration and co-ordination of silver in the standard—will the bad effects of this legislation develop themselves and make their mark upon the affairs of the country.  It may then be too late to reform.

The present is therefore the acceptable time to undo the unwitting and inconsiderate work of 1873, end to render our legislation upon the subject of money consistent with the physical facts concerning the stock and supply of the precious metals throughout the world and conformable to the Constitution of the country.

We cannot, we dare not, avoid speedy action upon this subject.  Not only do reason, justice, and authority unite in urging us to retrace our steps, but the organic law commands us to do so, and the presence of peril enjoins what the law commands.  By idly interfering with the standard of the country, Congress has led the nation away from the realms of prosperity and thrust it beyond the boundaries of safety.  To refuse to replace it upon its former vantage-ground would be to incur a responsibility and deserve a reproach greater than that which men have ever before felt themselves able to bear.

1 It must always be borne in mind that the order of progress in mining is from the poor to the richer mines, just as the venerable and celebrated Henry C. Cary has shown it to be in agriculture.  This order of progress in mining results from the fact that man always seek first the most easily accessible sources of production.  When the outcroppings of a great mine are discovered it is rare that exploration proceeds farther than a few hundred feet beneath the surface where the ore lies in widespread lenticular masses.  Then comes the “barren zone,” which is seldom explored at first.  The richer but fewer deposits of ore below—the great bonanzas—concentrate in perpendicular veins far apart, and are never reached except at great outlay and expense and as the result of organized and scientific mining.  Whoever is fortunate enough to strike one of these bonanzas makes great profit from it, while others sustain loss, and on the whole the product of metal is diminished.

2 This fact is not only deducible from the statistics of the world’s annual yield of silver given above, but it has come under my own observation that many of the low grade ore deposits, even of the Comstoc lode, have either been abandoned or soon will be abandoned.  These low-grade mines, though fully provided with shafts, adits, railways, engines,  mills, &o., which were profitably employed while silver bore a higher price in market, are being abandoned, the improvements put upon them are lost, and great numbers of miners have been thrown out of employment.

3 Professor John W. Draper, in his recent work entitled The Conflict between Science and Religion, states that Almansor, the Moorish King of Granada, then the foremost country of Europe in civilization, population, and wealth, left at his death a treasure of gold and silver amounting in value to $150.000.000.  How much of this sum consisted of coin is not stated.

4 The main argument used in favor of the gold valuation is this :  “ If a creditor, having stipulated for a fixed payment, may be paid by the debtor in either gold or silver, the latter chooses the material which comes cheapest to him, and the creditor suffers all injustice.”  Without inquiring whether the creditor on entering upon the contract also exercised his option in furnishing the debtor with either material, and therefore cannot claim another treatment—without inquiring whether, as he can also part with the material received on the same terms, and must do so, I can show you that the dogma is one untrue, both in practice and in theory. * * * The large business of exchanging contracts, as well as all such dealings in capital and commodities, in which the “creditor” stands in the position assumed above, is carried on by accounts, checks, and clearing systems without the use of any currency, and so the great system depends upon the exchange of equivalents of value alone. * * * There can be no question of any difference or disproportionate “cheapness” between them, (the metals.)  The debtor, in order to obtain either gold or silver coin, must render up the same equivalent for either.  (Ernest Seyd, Journal of the Royal Society of Arts, March 10, 1876, p. 320.)

5 The word dollar was first defined in the coinage act of April, 1792. Therefore, the powers of coining and regulating value were first exercised together.  There was no regulation of value before coining :  therefore no regulation of the value of the foreign coins which circulated in the United States previous to 1792.

6 Not even between gold and silver bullion.

7 The invention of gunpowder, the introduction of bills of exchange, the discovery of America, and establishment of colonies with ample arable lands, &c.

8 M. Wolowski here refers not to coin only, but to the precious metals in coin and plate, &c.