The Trade-Dollar.

Mr. Sherman.  Senate bill No. 263 was reported two or three days ago from the Committee on Finance.  If it is the pleasure of the Senate, I would like to have it taken up now.  I do not wish to interfere with morning business, but I desire the bill acted upon.

Mr. Christiancy.  If in order, I move to take up the motion submitted by me some days since for the reconsideration of the vote by which the bill was passed fixing the salary of the President of the United States.

The President pro tempore.  The Senator from Ohio has just moved to proceed to the consideration of the bill he has named.

Mr. Sherman.  I think it will take but a few minutes.  It is very short.

The President pro tempore.  The Secretary will report the bill at length for information.

The Chief Clerk read the bill (S. No.263) to amend the laws relating to legal tender of silver coin.

Mr. Cockrell.  I object to that bill.  I should like it to lie over until we have an opportunity for the consideration of it.

Mr. Sherman.  I do not think the Senator will object to it if he understand the precise nature of it.

Mr. Cockrell.  I am very decidedly a hard-money man;  I believe in silver as a currency, and I should like to see it a legal tender for sums larger than $5.  I am opposed to its being demonetized and driven out of the country.

Mr. Sherman.  The Senator, I am sure, will not object to the bill when he hears it explained.  It only changes the existing law in a very slight degree.  At any rate, I should like to have it called up before the Senate.

The President pro tempore.  The Senator from Ohio moves to proceed to the consideration of the bill.

The motion was agreed to;  and the Senate, as in Committee of the Whole, proceeded to consider the bill, the pending question being on the amendment reported by the Committee on Finance, to strike out all after the enacting clause, and in lieu thereof insert:

That section 3586 of the Revised Statutes of the United States be, and hereby is, amended to read as follows:

The silver coins of the United States, except the trade dollar, shall be a legal tender at their nominal value for any amount not exceeding $5 in any one payment.

Mr. Sherman.  Mr. President, the only change in the existing law proposed by this short bill is to except the trade-dollar from being a legal tender.  By misadvertence, I imagine, in the revision of the statutes the trade-dollar was made a legal tender, while in fact the trade-dollar is simply a mercantile dollar, coined at the request of any holder of silver bullion for merchandise, intended to promote our trade with China.  It is not proposed to interfere with that object of the trade-dollar which is coined now at the request of any holder of bullion who can have it converted into silver coin in this form.  It was never the purpose to make it a legal tender in the payment of debts, because it was at the time it was issued considerably more valuable than gold.

Mr. Merrimon.  Why is the trade-dollar specially valuable for the trade with China ?  What is the difference between the trade-dollar and the ordinary dollar ?

Mr. Sherman.  The trade-dollar contains 420 grains of standard silver.  The dollar of the law contains 412½ grains of silver.  The subsidiary coinage contains 385 grains in two half-dollars.  The trade dollar was a dollar coined simply for the benefit of merchants in the foreign trade to compete with the Mexican dollar, which was a more valuable dollar than our legal-tender dollar.  It was never intended to make it a legal tender.  Now the result is, as silver has declined below the standard of gold, far below its former value, that private persons carry their silver bullion to the mints, and under the law as it now stands require it to be coined into trade-dollars, and then use them as a legal tender, silver being now depreciated below its legal standard.

Mr. Mitchell.  I would like to make one inquiry of the Senator from Ohio, whether the Committee on Finance in reporting this bill means to be understood by the Senate as opposing the proposition contained in the original bill of the Senator from California [Mr. Sargent] to make the silver coins of the United States a legal tender to a larger amount than $5 ?

Mr. Sherman.  We do not propose now to interfere with that question at all.  That question is being considered by the Committee on Finance.  Whether we will extend the limit of the legal-tender is now being considered in another way.  It has no relation to this bill.

Mr. Mitchell.  A separate proposition ?

Mr. Sherman.  A separate proposition.  The only question now is whether we will correct that misadvertence in revising the laws which made the trade-dollar a legal tender when it was not so designed.

The Senator from California [Mr. Sargent] thinks I have not explained the matter.  I think I have.  I will say further that the trade-dollar is issued at the request of private persons.  When any holder of silver bullion desires to exchange it for trade-dollars, he can take it to the mints and ask that it be coined into trade-dollars;  and then he sells them or uses them in the foreign trade, while the other silver coins of the United States are coined at the pleasure of the United States and only for their benefit, and whatever profit is derived from the other coinage is derived by the United States, and not by private individuals.  But the trade-dollar is a mere article of merchandise.  The Committee on Finance have considered the subject fully.

I will read the section under which the trade-dollar is issued.  I will read, first, section 3513, in regard to the silver coins of the United States:

The silver coins of the United States shall be a trade-dollar, a half dollar, or fifty-cent piece, a quarter dollar, or twenty-five-cent piece, a dime, or ten-cent piece;  and the weight of tho trade-dollar shall be four hundred and twenty grains troy;  the weight of the half dollar shall be twelve grams and one-half of a gram;  the quarter dollar and the dime shall be, respectively, one-half and one-fifth of the weight of said half dollar.

Or, reduced to grains, two half dollars of the ordinary coinage contain three hundred and eighty-five grains.  The trade-dollar is issued only under the circumstances stated in section 3520, which I will now read:

Any owner of silver bullion may deposit the same at any mint to be formed into bars or into dollars of the weight of four hundred and twenty grains troy, designated in this title as trade-dollars, and no deposit of silver for other coinage shall be received.  Silver bullion contained in gold deposits and separated therefrom may, however, be paid for in silver coin at such valuation as may be, from time to time, established by the Director of the Mint.

The subsidiary coin is coined only by the United States in such quantities as are demanded for money.  The trade-dollar is issued only as an article of merchandise, as a form of silver bullion, and therefore it ought not to be made a legal tender.  There should be no question about that.

Mr. Frelinghuysen.  If I understand the object of this bill --and I would like the chairman to tell me if I am correct-- it is that whatever profit there may be from converting silver into coin shall accrue to the benefit of the United States, instead of to the benefit of individuals.

Mr. Sherman.  That is precisely it.

Mr. Frelinghuysen.  That certainly is right.

Mr. Sherman.  Now, any profit accruing by the issuing of the trade-dollar goes to private individuals, and thus we lose all our control over our silver coinage.  The proposition is so plain that I think further debate is unnecessary.

Mr. Bogy.  I should prefer that the bill should go on the Calendar, as it will very properly bring up the question of making silver a legal tender for a larger amount than $5.  The statement made by the Senator from Ohio is perfectly conect, and the correction which he proposes to make by this bill should be made, because, strictly speaking, the trade-dollar is not a coin of the United States.  His statement in that respect is altogether correct, and the bill I presume is perfectly correct;  but it will present in a very proper way the subject of making silver a legal tender to a larger amount.

Mr. Sherman.  If my friend will allow me, I will state that the Committee on Finance have a bill before them that is now being very fully considered in regard to that very point.  This process of converting silver bullion into trade-dollars is pushed forward by persons interested in it, and thus the United States are deprived of their control of the silver coinage of the United States.  This bill ought to pass immediately.  As to the other question, it is a much broader question, and is now being considered by the Committee on Finance, and will be reported upon as soon as we are ready.

Mr. Bogy.  I cannot see the bad effect of the present law, although I admit that what is called the trade-dollar is not, strictly speaking, a legal-tender coin.  Although it is so, perhaps, by section 3513, yet if you will look at section 3520 you will see that it was not the intention.  There is an error manifestly.

Mr. Sherman.  An error in revising the statutes.

Mr. Bogy.  And it should be corrected.  Nevertheless, I think the whole subject had better be brought up, and I cannot see that any great harm can result by this law remaining as it is for a short time longer.  If parties who own bullion desire to have it coined into trade-dollars, there can be no harm, and the export of that coin cannot hurt anybody, because it is of no use in this country, not being a legal tender.

Mr. Sherman.  It is a legal tender now.

Mr. Bogy.  Only to the amount of $5, which is next to nothing at all, and in point of fact amounts to nothing.  I am perfectly satisfied myself that we ought to make silver a legal tender to a larger amount.  I do not think that silver should be made a legal tender to an amount unlimited as gold is, because, not being as valuable as gold, it would drive gold away;  but I am fully impressed with the conviction that the amount of silver which should be made a legal tender ought to be increased to at least $1,000, and in that way we should be doing what is being done in France and other countries where the double standard is maintained.  The silver would become the coin of the people, and be used in all small transactions, and gold would be used for banking transactions.

This involves the consideration of the great question as to the relative value of silver and gold.  That is a question which has to be examined very carefully and very scientifically.  I do not propose to go into that question at all just now;  nor am I prepared to say what is the exact proportion;  but admitting that that proportion can be ascertained, (as it can be, and ascertained beyond a doubt,) I can see no reason why silver should not be made a legal tender, but I can see many reasons why it should be made a legal tender.

Then, again, in my opinion it involves a great constitutional question.  As it is now, the States have the right to make gold and silver a legal tender, and nothing but gold and silver;  therefore it is competent for one or for all the States to say that silver shall be a legal tender without any limit whatsoever, because the inhibition of the Constitution is that no State shall make anything a legal tender but gold and silver.  That being so, they then can make gold and silver a legal tender without any limit whatever.  If all the States were to make silver a legal tender equal to gold, it would become the legal tender for the United States;  and it would not be competent for the Federal Government to restrain the action of the States.  It therefore involves a grave constitutional question, besides a financial question.  I have thought a great deal upon this subject, and I am not able to see any good reason why silver should not be made a legal tender to a very large amount, say a thousand dollars;  but I see a great many good reasons why it should be so.

I shall not on this occasion detain the Senate to discuss the subject.  I intend doing so at a future time, and I would much prefer that all bills having a bearing on the subject should, for a while, go on the Calendar, so as to bring up the whole subject to the mind of the Senate in a proper manner.

Mr. Sargent.  The original bill referred to the committee was introduced by myself and provided for a greater legal tender of silver coin.  It is a question beset with difficulties, and I do not know that my mind is entirely clear as to the extent to which silver coin should be made a legal tender;  but I am very positive upon one proposition, and that is that if silver coin is a legal tender to any extent, it ought to be within the control of the Government to coin it on its own account.  Your silver coin becomes abraded.  Who shall redeem it ?  As it is now, the Government does it on account of the large profit it makes in coining the silver coinage.  Obviously, it should do so.  But the trade-dollar is without a father;  the Government is under no obligation to redeem that.  It simply takes bullion of any one, puts it in a certain form, and stamps it.  The trade-dollar is of higher value than the subsidiary silver coinage for which the Government is responsible.  The stamp is put on the trade-dollar according to the law, which requires that a certain amount shall be in it in order that the stamps may go on it;  but there is no margin to the Government at all.  It receives the mere cost of that coinage, and cannot be called on to redeem that coin when it becomes abraded.  The question of the abrasion of coin is a very important one to the commercial classes in my State, both as to our silver and our gold coin.  We have been trying for some time to secure legislation in reference to the gold coin that would bring it up to the true standard, because the abrasion in actual use has been so great that if a strict discount were made in business transactions on that amount there would be considerable depreciation.  Who shall lose the difference between standard and naturally abraded coin ?  If the holder, he suffers for an abrasions before made by others and by the Government in handling it for years.  The question is, as I say, important.

In the silver coinage the Government has always recognized this duty on account of the profit it makes on it, and the difference between its real value and nominal value induces the Government to keep good the silver coinage;  but in reference to the trade-dollars nothing of the kind can occur.  You cannot call on the Government for that.  It is like the stamp it puts on a bar of bullion, stamping it at the time it passes through its hands as worth a thousand dollars or $500, but it is not responsible for it six months thereafter when it may have passed from hand to hand or been filed or mutilated.  In reference to the trade-dollar, its stamp carries no higher meaning or responsibility than that on the bar of bullion.

That which we are trying to remedy in this matter is a local trouble which has arisen among the people of the Pacific coast.  They have in their hands, which they have bought of the Government, paying gold for, some millions of silver subsidiary coinage.  They are not able to procure a dollar of that silver subsidiary coinage from the Government except by paying its full value in gold.  The Government came in then, and while providing for a trade-dollar which was to facilitate our commerce with China, declared it should be a legal tender for $5;  that is to say, it put it in a clause which when read altogether subjected this coin to the condition of the subsidiary silver coinage, without remembering that this was not a national coin of the Government;  that it put no seigniorage on it at all and made no profit on it.  It simply stamps it, for the accommodation of the parties who have silver bullion, to give it currency in China.  As soon as this was discovered, parties threw their bullion in immense quantities into the mints to have it coined in this trade-do1lar form;  they threw it out on the market, and therefore began depreciating the millions of subsidiary silver coinage which men had paid gold for and were using in all the avocations of life.  The result was that complaint came from workmen that they were paid in this depreciated silver coinage;  they could not pay their bills with it to the amount of over $5.  We are thus finding the effects of a depreciated currency where we have stood for hard currency all the way along.  The difficulty was in giving the legal-tender quality to an article which was not coined on Government account, and the amount of the coinage of which the Government cannot regulate.  In reference to the subsidiary silver coinage the Government has the power in its hands to regulate it, to prescribe that not more than a certain amount shall go out, and only under conditions that keep it equal for business purposes with gold.

Mr. Bogy.  What does the Senator mean by "subsidiary silver coinage" ?

Mr. Sargent.  I mean halves and quarters, all the silver coin which is issued by the Government except the trade-dollar --the ten-cent piece, the five-cent piece, and the three-cent piece are included.  The former American dollar, which is less than the value of the gold dollar, the Government made its profit on, as it does on the two halves;  but it is not now in circulation nor is it much called for, on account of its bulk.  The half dollar is as large a silver coin as men ordinarily want to carry.

The incongruity, so far as the currency is concerned, is that the two half dollars are not of the value of the trade-dollar;  and the moment you issue the dollar in this form it brings down necessarily in proportion the two half dollars below the standard;  and if you turn the whole bullion mines of the Pacific coast into our mints, and coin them into trade-dollars, and make them a legal tender, you necessarily derange the character of the subsidiary silver coinage for which gold has been paid.  The inconvenience has been felt by the people in my State and the State of Nevada.  It is simply a local grievance.  If you had gold and silver coinage in Ohio and Missouri, you would find it there.

Of course, if trade-dollars were coined only on Government account and issued at the mints in exchange for gold, that would remedy the difficulty I have mentioned;  but merchants could not afford to export them, and the original object would be defeated.

The course of trade will soon relieve the market of trade-dollars, and restore the tone of the money market and the value of subsidiary coin, if this bill is passed.  The relief will be easy and natural, by sending trade-dollar abroad to China, provided the issue for the purpose of circulation among ourselves is stopped.  That, after a while, will cure the evil.

Mr. Bogy.  The trouble on this question I think comes in this way:  There is no law now fixing the relative value as between silver and gold.  The silver coinage is not uniform.  Yon have the trade-dollar, of four hundred and twenty grains troy, and then you have the half dollar, which is measured in French grams not grains, creating a confusion, and the relative value has never been fixed.  If the coinage of silver was uniform from the dollar down to the five-cent piece of proper standard, (which standard of course I am not able to state now,) and fixing the value as between silver and gold, there would be no trouble at all.  The trouble is, in this case, that we, by the act of 1873 --and I think without much consideration, because I have been unable to find much discussion on the subject-- demonetized silver entirely excepting to the extent of $5, which really amounts to nothing at all.  I think it is the greatest subject that can be discussed by the Senate with reference to the important question of resumption.

All nations are using gold coin at the present day pretty much, excepting France and a few of the southern peoples of Europe, who are using yet the double standard.  I say, and am perfectly convinced of the fact, that we in this country could most advantageously use silver a coin, provided the relative value as between that and gold is scientifically and justly fixed by law.  ---[you cannot fix by law that which nature has not fixed;  even if everyone inside the united States adhered to the law, bullionists outside the united States would not, and they would manipulate the relative value between gold and silver, to their advantage.  You can fix by law how much silver is in a $1 coin, and that is all you need to do]  Now, you have trade-dollar of 420 grains troy, which contains more silver in proportion than the half dollar, or quarter, or ten-cent or five-cent piece.  As a matter of course, the smaller coin, which my friend calls the subsidiary coin, is depreciated, and person who are compelled to receive their pay in silver to the extent of $5 do not like to take a coin which is of less purity than the silver dollar.  But that is owing to the fact that the coinage is not uniform;  it is owing to the fact that the same character of purity does not extend down from the dollar to the five-cent piece;  and it is owing to the further fact that the relative value as between silver and gold has not been fixed.  Whenever you have fixed the value as between silver and gold, and fixed that properly, whatever that may be, there can be no flood of silver, because it will be just as good as gold, and yet it is not intrinsically as valuable a gold;  and to that extent perhaps it would be wise to limit its legal-tender capacity.  It formerly was without limit;  and we all remember the day when silver was the coin of this country --I may say entirely--and gold was used as a sort of metallic merchandise.  The act of 1873 demonetized silver in this country;  and, as I said in the speech I had the honor to make some time ago on that very subject, we blindly followed the lead of Great Britain, and yet our position is just the reverse of the position of Great Britain.

Mr. Conkling.  Will the Senator allow me to ask him or some other Senator a question ?  Is it true that there is now by law no American dollar;  and if so, is it true that the effect of this bill is to be to make half dollars and quarter dollars the only silver coin which can be used as a legal tender ?

Mr. Sherman.  I will answer the Senator from New York that since the law of 1853 the use of the silver whole dollar has been discontinued and none has been issued.  That has been so since 1853.

Mr. Conkling.  Is there power to issue it ?

Mr. Sherman.  There is no power and has been none.

Mr. Bogy.  The power to issue existed from 1853 to 1873;  but since 1873 I think there has been no power.

Mr. Sherman.  There has been no silver dollar issued since 1853, and my impression is that the law of 1853 did not confer the power to issue it.  The Senator thinks it did confer the power;  but the law of 1873 cut off the power, in my judgment, if it existed.  The dollar was practically dropped from our coinage system for the best possible reason, the same reason that the five-franc piece and the large coins of England have been dropped out of their currency, simply because it is inconvenient in size and form for ordinary coinage and ordinary business.

Mr. Jones, of Nevada.  Allow me to suggest that the reason the dollar was dropped and that no such silver coin has been coined since 1853 is because silver was at a premium at the then established ratio of gold, and nobody had any inducement to coin the silver dollar at that time.  The law, however, authorized the coinage of the silver dollar then, and it was never demonetized until February, 1873;  but it needed no law to prevent people from coining such a dollar for use in business, when there was another dollar to be got 3 or 4 per cent.  cheaper.  The people did in 1853 and up to 1873 have an option that if gold should become dearer they could fall back again on the silver dollar.  In 1873 that privilege was taken away.

Mr. Sherman.  There is a bill now pending before the Committee on Finance to authorize and prescribe a dollar of the weight and fineness of two half dollars of what is now called our subsidiary silver coinage.  That bill will be acted upon as soon as we can get the requisite information.  That bill also seeks somewhat to change the law in regard to the amount for which silver shall be a legal tender.  That is not this bill at all, nor does it have any effect on this bill.  This bill simply excepts from the legal-tender authority the trade-dollar, which is simply a dollar coined for the benefit of merchants, not coined by the United States in any case.

Mr. Conkling.  What is the reason for eliminating the trade-dollar ?

Mr. Sherman.  That was provided for as a mere matter of convenience to merchants to enable them to convert their bullion into a trade-dollar for exportation to China, where the old pillar-dollar of Mexico had possession of the channel of trade, and the trade-dollar was a little more valuable than the Mexican pillar-dollar, in order to drive out of circulation the Mexican pillar-dollars in China and Japan.  For that reason the trade-dollar is a convenient way of exporting silver bullion.

Mr. McDonald.  Permit me to ask the Senator from Ohio whether we have any law on the subject of the silver coinage of the United States except section 3513 of the Revised statutes !

Mr. Sherman.  I read that section.

Mr. McDonald.  Is not that the only law we have defining the present silver coins of the United States ?

Mr. Sherman.  Yes, sir.  I read that.

Mr. McDonald.  Does not that leave out the old standard dollar entirely ?

Mr. Sherman.  Undoubtedly;  but I say there has been none coined since 1853.  The question of restoring that dollar is a question that is not in this bill at all.

Mr. McDonald.  Then the legal-tender act passed in 1873 applies to all silver coin ?

Mr. Sherman.  Yes, sir.

Mr. McDonald.  And limits the tender to the value of $5 ?

Mr. Sherman.  Yes, sir.

Mr. McDonald.  And the purpose of this bill, as I understand it, is to strike out the trade-dollar from that provision ?

Mr. Sherman.  From the legal tender, simply because the trade-dollar is a mere form of bullion issued only on the demand of merchants and private citizens, and not for the interest of the United States.

Mr. McDonald.  So I understand;  and it is legalized by the first section referred to, declaring it to be one of the silver coins of the United States.

Mr. Sherman.  And the reason why it was inserted in this provision was because at the time it was issued it was worth two or three cents more than gold, and it was put among the silver coins for that reason.  I again repeat that there is nothing in this bill except the exception of the trade-dollar from the legal tender;  and that if this exception is not made, any private citizen can control the silver coinage of the United States by carrying silver bullion to the mints and demanding that it be coined into trade-dollars, now of less value than gold.  It is manifest that this ought to be repealed, and the other questions that are spoken of by Senators will then properly come for consideration.

Mr. Christiancy.  Will the Senator from Ohio allow me to ask a question ?

Mr. Sherman.  Certainly.

Mr. Christiancy.  Why not remedy this difficulty by beginning at the other end ?  The trade-dollar approaches much more nearly the standard of gold value than our other silver coinage.  It is therefore certainly better as a legal tender for the use of the people.  The objection I understand to that is that it is coined without charging seigniorage.  Why not from this time charge that seigniorage instead of beginning at the other end ?

Mr. Sherman.  When we issue a dollar we must issue it at the same value as two half dollars or four quarter dollars or ten ten-cent pieces.

Mr. Christiancy.  Not if we provide otherwise.

Mr. Sherman.  But you must make them all alike.  You make two half dollars equivalent to a dollar, and four quarters equivalent to a dollar.  You cannot adopt a coinage in which the largest coin is worth more in proportion than the others.  The trade-dollar was never intended for circulation;  it was simply intended for export.

Mr. Christiancy.  Is it not now a legal tender to the amount ?

Mr. Sherman.  Yes, it was made so, probably by mistake;  but at the time the trade-dollar was provided for, the trade-dollar was worth more than the gold dollar.

Mr. Christiancy.  And is now much nearer the gold value than the other coinage.

Mr. Sherman.  The trade-dollar is now from ninety-five to ninety-six cents in gold.

The President pro tempore.  The morning hour has expired.

Mr. Sherman.  I hope this matter may be disposed of.

Mr. Jones, of Nevada.  I should like to say a word or two on this question.

The President pro tempore.  Is there objection to continuing the consideration of this bill ?

Mr. Morton.  I am satisfied that this matter will lead to discussion.

Mr. Jones, of Nevada.  I wish to make an explanation.

Mr. Morton.  Very well.

Mr. Jones, of Nevada.  In order to monetize silver, or declare the double standard, or carry out the views of the Senator from Missouri, it would be necessary to have a bill that should be harmonious in all its part.  This measure is designed only to protect the people of the Pacific coast, who are on a gold basis, from severe aberrations in the price of silver.  They have been obliged to use a subsidiary or small coinage to make change with.  In that small coinage the two half dollars contain but three hundred and eighty-five grains of silver;  the trade-dollar contains four hundred and twenty grains of silver;  but for the reason that the two half dollars were necessary and very convenient and portable, and were made a legal tender to the amount of $5, for the amount that was necessary to make the change of that community, sufficient of this debased coinage could be sold for gold and kept at a parity with gold because it cost gold and was necessary to make change with, and it did not disturb the relations between the retail and wholesale dealer of the Pacific coast.  The trade-dollar was made when it was 2 or 3 per cent. premium over gold, but by a decline in silver the trade-dollar now is worth ninety-two, ninety-three, or ninety-four cents in gold.  By having the trade-dollar a legal tender for $5, the full amount that the subsidiary coins are now a legal tender for, the effect is to degrade the two half dollars that had cost the citizen there $1 in gold, and upon which he was doing business.  It degrades that subsidiary coin to the bullion value of the trade-dollar.

Mr. Bogy.  Because it is not as pure as the trade-dollar;  because it does not contain as much pure silver.

Mr. Jones, of Nevada.  It takes it to the level of the trade-dollar.  The subsidiary coin does not go below the trade-dollar, but nobody is going to use a subsidiary coin sold by the Government for gold when he can buy the bullion at its bullion value and get it coined at his own option at the Mint.  Therefore it degrades the coinage.

Mr. Bogy.  I will ask the Senator is the half dollar as pure as the trade-dollar ?

Mr. Jones, of Nevada.  It is as pure, nine-tenths fine, but is not half as heavy.  The two half dollars contain three hundred and eighty-five grains of standard silver.  A half dollar, supposing it were made on the basis of the trade-dollar, would contain two hundred and ten grains of standard silver.  Therefore I say that, silver having fallen in value, the business of that community being done on a coin basis, and you allowing persons to buy silver and themselves take it to the Mint, the effect is to destroy the value of the four or five millions of subsidiary coins already purchased from the Government for gold at their nominal rate, dollar for dollar.  It reduces the value of all subsidiary coins to the present bullion value of silver, and therefore disarranges the trade between wholesale and retail dealers, much to the inconvenience of the people of that coast.  They have neither the one thing nor the other.  They are on a gold basis for large transactions and on a silver basis without a scientific relation having been established by the Government between gold and silver for the subsidiary coin.

Then, while I am in favor absolutely of monetizing silver, while I am in favor of the double standard, yet I think it would be the height of wisdom to pass this measure, in order that the business of that coast may not be disturbed until such relation can be established and until we shall ordain some law here that gold and silver shall pass concurrently.  This is absolutely needed on that coast because it is impossible to do business as at present neither on the one basis nor on the other.  The subsidiary coins issued by the Government will pass if the privilege to private citizens to take their silver to the Mint and have it coined is taken away, or at least if the legal-tender clause in the bill authorizing it is taken away.  Then the subsidiary coin will pass on a parity with gold, and hereafter on another occasion it will be time enough to introduce bills, and advocate them, restoring the silver dollar and declaring the double standard.

Mr. Thurman.  Will my friend from Nevada allow me to ask a question ?  I am very much struck by his explanation, which I understand to be this:  that, inasmuch as the subsidiary silver coinage can only be obtained by paying gold for it, if you allow the trade-dollar to be used as a legal tender, which is worth less than gold, you have operated an injury on those who pay gold for the subsidiary silver coinage.

Mr. Jones, of Nevada.  That is exactly the proposition.

Mr. Thurman.  I wish to ask the Senator whether in actual business $100 in half dollars will buy $100 in gold in San Francisco ?

Mr. Jones, of Nevada.  Undoubtedly, until this occurred.  The legal-tender clause applied to the trade-dollar has already had the effect of degrading the subsidiary coins.  The stream cannot rise above its source.  Heretofore they passed concurrently with gold;  that is the fact.

Mr. Thurman.  Does the Senator suppose that if the clause making the trade-dollar a legal tender were repealed, then in ordinary business $100 in silver would buy $100 in gold ?

Mr. Jones, of Nevada.  Without doubt, because the coins are being continually used up, lost, and all that sort of thing;  and they must have change.  It is necessary to do the business of the country;  and no more of the subsidiary coins will be purchased for gold than will pass parallel with gold.  What motive is there for anybody paying gold for a subsidiary coin when it is worth less than gold ?

Mr. Bogy.  With the proper value fixed between gold and silver, will not silver be taken as readily as gold ?

Mr. Jones, of Nevada.  I think so.

Mr. Bogy.  Will not $100 of silver procure $100 of gold ?

Mr. Jones, of Nevada.  Undoubtedly.

Mr. Bogy.  The trouble now is from the want of uniformity in the coinage, owing to the fact that the trade-dollar has one standard of purity and the other has a different standard ?

Mr. Jones, of Nevada.  Not that alone.  The subsidiary coinage is only issued by the Government for gold, while the trade-dollar is issued to whoever holds silver bullion, so that any person who desires to do so can purchase silver at its bullion value and turn it into a legal tender.

Mr. Bogy.  That is true, but it comes back to the original proposition, if your subsidiary coin was as pure as the other dollar there would be no harm in issuing it for gold.

Mr. Jones, of Nevada.  It is not necessary to enter into the reasons for debasing the subsidiary coin.  When the relations between gold and silver were established --sometimes gold being above and sometimes below silver-- when they were established, not scientifically as the gentleman wants them established, it was found frequently that if you made the subsidiary coins of equal value to the trade-dollar, if you did not degrade them at all, then a little rise in the price of silver destroyed all your subsidiary coinage.  Bullion-dealers bought them up and put them in the melting-pot, and the people of the country were not able to get small change.

Mr. Bogy.  There could be no rise in silver if you established the relative value by law based on a certain purity of coinage.

Mr. Jones, of Nevada.  On the contrary, I will state to my friend that under the double standard in France three times in fifty years did the relative value of gold and silver change.  Why ?  Because the legal-tender value of gold in the country was greater than its bullion value, and therefore silver went out and vice versa.  So it was three different times.

Mr. Bogy.  That was owing to the fact that the legal-tender capacity was changed.

Mr. Jones, of Nevada.  Not at all.  No legal-tender capacity was changed at all.  The market value of bullion changed, because of the great expense and the great time necessary for subsidiary coinage where the subsidiary metal was a little debased and the issue limited.  Nobody would pay a gold dollar for two silver half dollars if they would not buy gold again.

Mr. Bogy.  There is no difference to-day in France between gold and silver taken at the value fixed by law.  The trouble here heretofore has been under the act of 1873 that we had fixed a lower standard than France for silver and the consequence was silver went to France.  By the act of 1853 there was no limit to the coinage of silver dollars.  There were none coined in point of fact, but the law did authorize the coinage of silver dollars until 1873.  Now there is no law authorizing the coinage of silver dollars, excepting it be the trade-dollar.

Mr. Morton.  I call for the regular order.

The President pro tempore.  The unfinished business is the resolution relative to the Mississippi election.

Mr. Sherman.  I give notice that I will call this bill up to-morrow morning.