STAC& 
 AHNKX 
 
 407 
 
 nternational 
 
 Bimetalism. 
 
 A PAPER READ BEFORE THE 
 
 California Bankers Association 
 
 April 20, 1897 
 
 AT ITS 
 
 Annual Convention, Held at Los Angeles. 
 
 BY 
 
 JOHN J. VALENTINE 
 
 PRESIDENT OP 
 
 WEU.S, FARGO & COMPANY 
 SAN FRANCISCO, CAI,.
 
 A PAPER READ BEFORE THE 
 
 California Bankers Association 
 
 April 20, 1897 
 
 AT ITS 
 
 Annual Convention, Held at Los Angeles, 
 
 
 BY 
 
 JOHN J. VALENTINE 
 
 PRESIDENT OF 
 
 WELLS, FARGO & COMPANY 
 
 SAN FRANCISCO, CAL. 

 
 THE HICKS-JUDD CO., 
 
 PRINTERS, BOOKBINDERS, PUBLISHERS, 
 23 FIRST ST., S. F., CAL.
 
 Mr. Chairman and Members of the 
 
 California Bankers Association: 
 As introductory to my remarks on International 
 Bimetalism and the present monetary situation per- 
 mit me to quote the Republican Party, in National 
 Convention, assembled at St. Louis, June lyth last, 
 as follows : 
 
 "We are unalterably opposed to every measure 
 calculated to debase our currency or impair the 
 credit of our country. We are, therefore, opposed to 
 the free coinage of silver, except by international 
 agreement with the leading commercial nations of 
 the world, which we pledge ourselves to promote, and 
 until such agreement can be obtained the existing 
 gold standard must be preserved. All our silver and 
 paper currency must be maintained at parity with 
 gold, and we favor all measures designed to maintain 
 inviolably the obligations of the United States, and 
 all our money, either coin or paper, at the present 
 standard, the standard of the most enlightened na- 
 tions of the earth." 
 
 On January 2Oth a well-known English writer on 
 economic subjects wrote me from London: 
 
 " Senator Wolcott has just arrived here, and it is 
 said that he has a mission from Mr. McKinley. You 
 may rest perfectly sure that neither the Senator nor 
 anybody else will persuade the English people to 
 have anything to do with bimetalism. The Sena- 
 tor will be received well, personally, because from 
 everything we know of him we believe him to be a 
 gentleman. But he will very soon find out for him- 
 
 20O352O
 
 self that the English Birnetalists are a weak party, 
 who make a great deal of noise but have exceedingly 
 little influence." 
 
 And on February 2 ad a leading banker of Ber- 
 lin wrote me: 
 
 " I met Senator Wolcott a few days ago at dinner, 
 when he told Dr. Koch, the President of the Bank of 
 the Empire, that unless a solution was found for the 
 silver question the next election in the United States 
 would in his judgment undoubtedly go for free silver. 
 Let us hope that this may prove an erroneous party 
 view." 
 
 In March the public press reported that 
 
 l< The House, by a majority of 282 votes, passed 
 the Senate bill authorizing the President to call a 
 conference of foreign authorities to cooperate with 
 the United States in establishing an international 
 ratio in the proportional prices between gold and 
 silver. Meanwhile Senator Wolcott has returned 
 from his delightful trip. He was 'treated like a 
 prince ' in England, was l received with open arms 
 by the economists of Germany,' and actually assured 
 that ' if he could win over England, Germany would 
 then be glad to take the subject up again.' ' 
 
 To accomplish this task Messrs. Wolcott, Steven- 
 son and Paine have been appointed commissioners. 
 
 It is not my purpose to occupy your time and 
 attention with a speculative forecast of the mis- 
 chievous subtleties and embarrassing intricacies of 
 International Bimetalism as proposed by its advo- 
 cates, but to offer some of the most studied opinions
 
 and shrewdest judgments of financial experts as to 
 its chances for general adoption. Many of you may 
 know I have treated the subject at some length, from 
 an historic and scientific standpoint, in a collection of 
 papers published during the recent Presidential cam- 
 paign, reaching the conclusion that the theory of 
 bimetalism is in itself unscientific and unsound, 
 and that the hope of procuring concerted action 
 among the leading nations of the world for its inter- 
 national application is doomed to failure. With 
 the facts confronting us the appointment, by the 
 United States Government, of commissioners to visit 
 Europe in the interest of an International Conven- 
 tion and for the purpose of evangelizing the conserv- 
 ative powers of Europe to the doctrine of Inter- 
 national Bimetalism, on the basis of the unlimited 
 free coinage of both metals, is a sheer waste of time 
 and money. And no time should be lost in reform- 
 ing the monetary agglomeration of these United 
 States. To call the make-shift, patch-quilt currency 
 that has disturbed this country for more than thirty 
 years a "financial system" is a misuse of descrip- 
 tive terms. 
 
 It may be alleged in excuse for the renewed agita" 
 tion of the silver question that good faith on the part 
 of the present national administration to its platform 
 pledges required the appointment of commissioners 
 to confer directly with the scattered advocates of 
 International Bimetalism in Europe, but the most 
 cursory knowledge as to the steps which have in the
 
 past forty years led all the commercial nations of 
 Europe in turn to adopt the gold standard should 
 convince every reflective person of the utter impracti- 
 cability, not to say impossibility, of securing their 
 co-operation in an effort to undo the work so labori- 
 ously accomplished, and enter into an agreement for 
 the unlimited free coinage of silver. The action of 
 Europe in adopting the gold standard was not pre- 
 cipitate; the discussion really began with the gold 
 discoveries in California and Australia, about the fif- 
 ties, became general by 1857, an( i tne International 
 Convention in Paris, 1867, thirty years ago, deter- 
 mined the question. This Convention was composed 
 of the most eminent and intelligent financiers and 
 economists of twenty governments represented, and 
 their conclusions were only reached after giving the 
 subject the most thorough consideration. From that 
 day to this the opinion of the economical, financial and 
 commercial world has clarified itself in favor of the 
 gold standard. There is not the slightest probability 
 of Great Britain or the European powers seriously 
 considering International Bimetalism, and for this 
 country to say that a ratio of sixteen parts of silver 
 to one of gold is a divinely and irrevocably fixed 
 relation would simply be to make ourselves the 
 laughing stock of intelligent people throughout the 
 world. As Mr. Tirard substantially said in the 
 Brussels Conference in 1892, " they can hold conven- 
 tions, deliver lectures, and orate, but what power has 
 indicated any intentions to agree to the free coinage
 
 of silver ? Not one; and it would be folly to do so." 
 And I will add it is all moonshine. The quicker 
 this country is made acquainted with the real facts 
 affecting this subject the better it will be for all 
 concerned. 
 
 I am not unconscious that " monetary science is a 
 vast subject, and a little unsteadiness of nerve may 
 be pardoned when one is navigating, what Petty 
 called two centuries ago, the deep ocean of all the 
 mysteries concerning money; when one is dealing 
 with such a subject, which can well be pictured as a 
 morass of problems, intersected by a few safe paths, 
 easy to walk on, but also easy to stray from." 
 
 Within a period of say five minutes, I have sum- 
 marized my own views upon this momentous ques- 
 tion, but these may be deemed simply opinions, 
 therefore I wish to submit evidence. I now quote 
 from Professor Francis A. Walker's " International 
 Bimetalism " : 
 
 "In 1696 the urgency of the monetary situation 
 of Great Britain combined with the influence and 
 authority of statesmen and philosophers to secure 
 the general recoinage of silver, both according to the 
 ancient right standard, and at the public expense. 
 The debate on these two points had been carried on 
 with remarkable power. Never before in England 
 had such able men taken part in the discussion of 
 monetary problems. Lowndes, Secretary of the 
 Treasury, appeared as the champion of the scheme 
 to put out the new coin at something like an average 
 of the existing coins. He proposed to coin the pound
 
 8 
 
 of standard silver into seventy-seven shillings in 
 place of sixty-two, effecting thus a reduction of 
 nearly one quarter. He argued that the debasement 
 had been long in progress, that prices had adapted 
 themselves, however painfully and inadequately, to 
 the state of the coin, that contracts for goods, for 
 rents, for interest, had been based on existing prices, 
 and that an abrupt return to the former measure 
 would work injustice to debtors, and would occasion 
 an unnecessary disturbance to production and trade. 
 John Locke stood forth as the champion of the 
 ' ancient right standard,' a standard of intrinsic 
 equivalency indisputable face value. Said Mr. 
 L<ocke : 
 
 " 'The multiplying arbitrary denominations will 
 no more supply nor in any ways make our scarcity 
 of coin commensurate to the need there is of it than 
 if the cloth which was provided for clothing the army, 
 falling short, one should hope to make it commen- 
 surate to that need there is of it by measuring it by 
 a yard one foot shorter than the stardard, or chang- 
 ing the standard of a yard, and so getting the full 
 denominations of yards necessary according to the 
 present measure. For this is all that will be done 
 by raising our coin as is proposed. All that it 
 amounts to is no more than this, viz.: that each 
 piece, and consequently our whole stock of money, 
 should be measured and denominated by a penny 
 one-fifth less than the standard. 
 
 (< ' The increase of denomination does or can do 
 nothing in the case for it is metal by its quantity and 
 not denomination that is the price of things and meas- 
 ure of commerce ; and it is the weight of metal in i }
 
 and not the name of the pieces, that men estimate com- 
 modities by and exchange them for. 
 
 " ' If this be not so, when the necessity of our affairs 
 abroad or ill-husbandry at home has carried away 
 half our treasure and a moiety of our money is gone 
 out of Bngland it is but to issue a proclamation that 
 a penny shall go for twopence, sixpence for a shilling, 
 half a crown for a crown, etc., and immediately, 
 without any more ado, we are as rich as before; and, 
 when half the remainder is gone, it is but doing the 
 same thing again, and raising the denomination anew, 
 and we are where we were, and so on.' ' 
 
 [I have hitherto used the foregoing extract from 
 Locke because it is the foundation of sound money.] 
 
 " Of the writings of the great philosopher on 
 this occasion, Macaulay remarks: ' It may well be 
 doubted whether in any of his writings, even in those 
 ingenious and deeply meditated chapters on language, 
 which form, perhaps, the most valuable part of his 
 Essays on the Human Understanding, the force of 
 his mind appears more conspicuously.' The highly 
 honorable decision to maintain the standard invio- 
 late introduced another question which has not 
 been of equal philosophical interest, but which was 
 of immense practical importance. Who should bear 
 the loss? In the coinage of 1559, in Queen Eliza- 
 beth's time, the loss from abrasion, clipping, and 
 sweating had been thrown upon the innocent actual 
 holders of the coin, and government had even real- 
 ized some profit by the transaction. In the recoinage 
 of King William, under Locke, the treasury assumed 
 the cost, which was clearly just, since the money had 
 been worn during the public use. The expense of
 
 10 
 
 the great work was nearly three millions sterling. 
 When it is remembered that this was one and a half 
 times the ordinary revenue of the kingdom, the 
 magnitude of the undertaking will be appreciated." 
 
 Edmund Burke said that " Great men are the 
 guide-posts and marks in the State.'' The history 
 of the ancient right standard of money constitutes an 
 imperishable memorial to the conscience and genius 
 of John Locke, and an unerring guide-post of the 
 ages, pointing out the right road to sound finance. 
 
 And now to come more closely to the text of this 
 paper. Said Walter Bagehot, in December, 1876 : 
 
 '' We have written much this year on the subject 
 of silver, but we have hardly referred to the scheme 
 which some persons think would set right every- 
 thing the scheme of universal bimetalism. But 
 the truth is that we regard that scheme as so entirely 
 beyond the boundaries of practical finance that we 
 did not think it worth discussing, and we only dis- 
 cuss it now because we continue to receive ingenious 
 pamphlets, some of them written by men of business, 
 which maintain that it is both practicable and advis- 
 able. We shall therefore state as shortly as possible 
 our reasons for thinking it is neither. 
 
 " The plan is, that by means of an ' international 
 conference ' or otherwise, all nations should agree to 
 use both gold and silver as legal tender for all 
 amounts, and to use them in the same proportions, 
 which it is said would cure any evils which now 
 arise from changes in the relative value of gold and 
 silver and in the cost of production of both or either 
 of them. But any such attempt would be such an
 
 If 
 
 alteration in the monetary system of most countries 
 that it would be difficult to get most of them to take 
 it into consideration, and impossible to induce many 
 of them to agree to it. England, for example, has a 
 currency resting solely on the gold standard; it suits 
 her, and is most closely united to her mercantile 
 and banking habits. What motive is there that 
 would induce her to alter it? You cannot even 
 begin an argument which would seem to have a 
 sufficiently striking sound. And the effect of the 
 bimetallic system, if universal, would be to fill the 
 world with the cheaper metal only. But this, and 
 other characteristics, whether for good or evil, which 
 may belong to universal bimetalism, are in our 
 judgment scarcely worth considering ; they seem to 
 us fit only for theoretical books, because the plan is 
 only a theory on paper and will never be in practice 
 tried." 
 
 Thus much from Mr. Bagehot. 
 
 One of the favorite arguments of silver enthu- 
 siasts, exploited right and left, has been Professor 
 Stanley Jevon's reservoir illustration of Wolloski's 
 common pool theory of international bimetalism. 
 In former years I had thought it a curious feature 
 of the seemingly plausible illustration of an inher- 
 ently fallacious economic principle that a writer of 
 Professor Jevon's analytical turn of mind should not 
 have perceived the inapplicability of his mechanical 
 device the equalizing reservoirs to a principle of 
 economic law. It was my impression that he ought 
 to have seen that no common faucet, or, as Forssell 
 of Sweden has called it, no common bunghole, would
 
 12 
 
 satisfy the demand upon either of these reservoirs, 
 had he considered that they were not only subject to 
 independent variations of supply and demand, but 
 that they might contain liquids entirely different in 
 nature, as, for example, molasses and petroleum, 
 each of which is used for many different purposes 
 that the other could not serve. The principle in- 
 volved is one of economic law and cannot be illus- 
 trated by the mere statement of a well-known fact 
 in physics that water will seek its own level. How- 
 ever, Professor Jevon modified his views, for in chap- 
 ter twelve of his ''Investigations in Currency and 
 Finance," published in 1884, he says: 
 
 "The notion of M. Cernuschi that there might 
 be a congress of nations, and that the leading com- 
 mercial States might be induced to unite in adopting 
 bimetallic money is chimerical. Several of the more 
 important European nations have for the present no 
 hopes of using coin, whether gold or silver. Ger- 
 many is only now establishing an excellent currency 
 on a gold basis, and is most unlikely to abandon it 
 without further trial. The Scandinavian kingdoms 
 have no reason for retracing their late adoption of 
 gold, which has done no harm. Hven France, which 
 has still the law of the double standard in nominal 
 existence, shows no desire to put it into operation 
 again, having experienced the trouble of an alternat- 
 ing standard and a heavy silver currency. 
 
 ''As to England, there is not the most remote 
 chance that the proposal would be accepted or even 
 entertained here. The present English system of 
 metallic money has now existed almost unchanged
 
 since 1816, and it has worked so satisfactorily in 
 most respects that it would require very strong rea- 
 sons for making a fundamental change. Even were 
 there a considerable weight of evidence in favor of 
 the double standard it would probably be found 
 impossible to persuade the House of Commons to 
 accept it. In nothing is the English nation so con- 
 servative as in matter of currency. . . 
 
 " If the United States were to adopt the double 
 standard they would throw into confusion the mone- 
 tary relations of the foremost commercial nations, 
 while the universal bimetalism essential to the suc- 
 cess of M. Cernuschi's schemes would be as far dis- 
 tant as ever. If, indeed, the adopted legal ratio of 
 gold and silver were such as to enable gold to circu- 
 late in the United States, then no effect on the value 
 of silver would be produced, and all discussions 
 would end in nothing. If the legal ratio were 15^ 
 to i, as proposed, then full weight gold coins could 
 not circulate, and the currency and the standard of 
 value would consist of silver only. American trade 
 would be hampered by a money fifteen and a half 
 times as heavy as it need be. Americans would be 
 loading themselves with silver fetters, and for what 
 purpose ? In order that the rest of the world might 
 enjoy the superior convenience of gold money. 
 While other advanced nations are passing, one after 
 another, from the silver age of currency to the golden 
 age, America, and probably America alone, would be 
 stepping back from the gold age into the silver age. 
 This seems to me about as wise as if the men of the 
 bronze age had solemnly decided to reject bronze, and 
 to go back into the stone age. In a matter of this 
 sort we must take account of general and long-
 
 continued tendencies, and the tendency now appears 
 to be inevitably toward the general adoption of gold 
 as the standard money. 
 
 14 If America could establish the double standard 
 and succeed in inducing other nations to do so like- 
 wise, the advantages of so great and so difficult a 
 measure are of a very speculative and doubtful kind. 
 I quite concede to Messrs. Wollowski and Cernuschi 
 that the bimetallic system does spread fluctuations 
 of supply and demand over a wider area. I have tried 
 to explain in my book on ' Money and the Mechan- 
 ism of Exchange,' published in 1875, that gold and 
 silver, free from the action of a legal ratio, are like 
 two unconnected reservoirs of water, each liable to 
 be raised and lowered in level by various accidents. 
 Establish a communication between these reservoirs 
 and then each new supply spreads itself over a double 
 area, and each new demand is supplied with less effect 
 upon the general level. The legal currency ratio of 
 Z 5X to i actually does establish a communication of 
 this sort between the reservoirs of gold and silver in 
 the world, but it does not therefore follow that it is 
 desirable to establish the communication. . . . 
 
 "My principal purpose is accomplished if I have 
 adequately expressed the strength of my conviction 
 that, in trying to establish bimetallic money, the 
 American nation would be setting themselves against 
 irresistible natural tendencies so as to insure defeat. 
 For the sake of making those richer who are rich 
 already they would be loading themselves with 
 heavy metal, which, if it is to be abundant, had bet- 
 ter be left to other uses or to those Eastern nations 
 who are too poor and ignorant to employ gold. It is
 
 15 
 
 the general rule in commerce to take care of ' num- 
 ber one,' but in the bimetallic scheme the rule is 
 reversed, and ' number one ' is asked to carry silver 
 coin in order to benefit ' number two ' and * number 
 three.' ' Thus much from Professor Jevons. 
 
 Mr. Henry D. MacLeod, in his " Bimetalism," 
 says: 
 
 ; 'The assertion of the bimetalists, upon which 
 their whole case rests, that it is possible to regulate 
 the value of gold and silver by international agree- 
 ment is flatly contradicted by 
 
 " i. The history of birnetalisin in every country. 
 
 "2. The unanimous arguments of Oresme, Co- 
 pernicus, Gresham, Petty, Locke, Harms, Steuart, 
 Lord Liverpool, the Government of India, the British 
 Government, and hosts of other experienced persons 
 who had the consequences of bimetalism before 
 their eyes. 
 
 "3. After attempting to maintain bimetalism 
 for centuries every State in Europe has found itself 
 forced to abandon it as impracticable and injurious." 
 
 In Mr. Thomas Lloyd's " Bimetalism Examined" 
 we find : 
 
 " Practically silver has ceased to be a standard 
 of value throughout the civilized world, and this has 
 simply and solely been in consequence of a slow 
 change in the opinion of the world. The bimetal- 
 ists deny that the world has changed its opinion in 
 the manner here stated. They allege that the 
 whole change has been made by the governments, 
 and not by the people. If bimetalists mean by this
 
 i6 
 
 that the great body of the people have not troubled 
 their heads about the matter, I am not inclined to 
 dispute the statement. But if they mean that the 
 governments acted on their own initiative, and not 
 because of the impulse given by the commercial 
 classes, then I entirely disagree with them. Govern- 
 ments, however meddlesome in other matters, are 
 always very careful how they interfere in business 
 arrangements, and especially in monetary arrange- 
 ments, and they do interfere finally only because 
 they are compelled to do so by the pressure of the 
 classes specially interested. 
 
 " The fact remains that one civilized country after 
 another has demonetized silver and adopted the gold 
 standard, and there is no answer to that. This is 
 the real and conclusive argument against the bimet- 
 alists. For over a century the world has been 
 moving, country by country, steadily in one direc- 
 tion, and it is useless to talk of turning it back. 
 Opinion has settled the matter, and opinion is sover- 
 eign, not only in matters of policy, but in matters of 
 economy also. If the bimetalists choose to say that 
 opinion is wrong, that the world is ill-advised, that 
 the whole movement has been a mistake, they, of 
 course, have a perfect right to their view of the mat- 
 ter. But they do not alter the facts, and they cannot 
 alter the facts by any amount of preaching. 
 
 "It is impossible, by any arrangement what- 
 soever, to maintain indefinitely a fixed ratio of value 
 between any two commodities, let them be metals, or 
 let them be what you please. And it is noteworthy 
 that no speaker in the Brussels' Bimetallic Confer- 
 ence of 1892 ventured to offer any detailed scheme 
 showing how the idea could be carried out. No one
 
 ventured, either, to take a vote on the ratio to be 
 fixed. 
 
 " The real scientific opinion of England is against 
 bimetalism, and will continue to be opposed to it. 
 Further, it seems incredible that Germany, Austria- 
 Hungary and Russia will throw away the fruits of 
 their sacrifices and all their efforts to get together 
 a great gold reserve. No country could bind itself 
 forever-and-a-day to maintain bimetalism. And if 
 the Union were to be formed, and were to be compul- 
 sory only for a few years, is it reasonable to suppose 
 that bankers would accept depreciated silver instead 
 of the appreciated gold to which they are entitled ? 
 
 " If every great nation in the world were to enter 
 into a bimetallic convention for a definite number of 
 years, bankers in the great commercial centers, and 
 especially the bankers of London, would refuse to 
 accept silver and hold it in their reserves, and the 
 convention would break down as certainly as the 
 Sherman experiment failed in the United States. 
 
 " Bimetalists insist that if England will lead the 
 way all the other countries will immediately follow; 
 bimetalists will not see that, even if the Govern- 
 ments could be persuaded, there would still be the 
 bankers to deal with, that bimetalism could be 
 adopted only for a definite number of years, that 
 therefore the danger would remain that it might 
 come to an end by and by, and as long as a fear of 
 that kind existed people would cling more tena- 
 ciously than ever to their gold contracts. From 
 every point of view, then, bimetalism is impossible. 
 It could not be made to work if adopted. It will not 
 be adopted because the governments cannot be per- 
 suaded to fall in with it, and if the governments
 
 18 
 
 could be persuaded it would be rejected by the bank- 
 ers, and still more decisively would it be rejected by 
 investors. 
 
 u We have to accept accomplished facts, and it is 
 an accomplished fact that opinion has pronounced 
 decisively against silver and for gold. And it must 
 never be forgotten that in matters economic, opinion 
 is as supreme as in matters political. 
 
 "The only argument bimetalists have is refer- 
 ence to the Latin Union, viz.: French bimetalism, 
 which lasted barely seventy years 1803 to 1873, 
 when it utterly broke down, and free coinage had to 
 be suspended. The ratio between gold and silver 
 was not strictly maintained, and the bimetallic sys- 
 tem did not prevent wide variations. What it really 
 did was to facilitate the transition from one mone- 
 tary system to another. Bimetalism, in its very 
 nature, is a temporary makeshift which is useful in 
 a transition period, but which must inevitably break 
 down when a certain evolution has been accom- 
 plished. 
 
 "Evidence given by N. M. Rothschild, Esq., 
 before the Committee on the Bank of England Char- 
 ter, July 24, 1832 : 'Question: Does the demand for 
 gold from France produce a scarcity of money in 
 France ? Answer : No. Question : Why is that ? 
 Answer : Because gold is generally in private hands ; 
 it is merchandise there.' 
 
 "Up to 1848 bimetalism was not operative in 
 France, gold was not in circulation; it was mere 
 merchandise, held only by private individuals. 
 So French bimetalism was never operative. Up 
 to 1848 France was a silver-using country; after- 
 wards it became gold using. A conclusive proof
 
 19 
 
 that bimetalism was quite ineffectual is afforded by 
 the fact that the instant Germany demonetized and 
 proceeded to sell her silver French bimetalism broke 
 down. Both in the United States and in India we 
 have had lessons as to how tampering with the cur- 
 rency may injure the prosperity of great countries. 
 What happened in the United States would happen 
 in Europe if bimetalism were adopted. The banks 
 would refuse to hold silver in their reserves; silver 
 coin consequently could not be forced into circula- 
 tion, and, that being so, I ask once more how the 
 bimetalists propose that the value of silver should 
 be raised if universal bimetalism was adopted ? If 
 the value of gold under a bimetallic arrangement 
 were not greatly reduced the condition of all the 
 world would be similar to the condition of the Latin 
 Union and the United States. Gold would practi- 
 cally remain the standard of value, and silver would 
 be a subsidiary money, no matter what hocus-pocus 
 were applied. How, then, would the bimetalists 
 lower materially the value of gold ? The Constitu- 
 tion of the United States expressly declares the free- 
 dom of contract inviolable. Therefore if the United 
 States is to be a party to bimetalism freedom of con- 
 tract in the fullest sense must be maintained. Con- 
 sequently all the existing contracts for payment in 
 gold would remain valid and enforceable, and every 
 one would be free in the future to enter into similar 
 contracts. The truth of the matter is that the 
 bimetalists have never thought out the subject at 
 all. They have taken up the extraordinary notion 
 that opening of the mints provides a market." [If it 
 provided anything it would be warehouses for storing 
 the unused metal.] 
 
 Thus much from Mr. Lloyd.
 
 20 
 
 Professor Taussig in his '' Silver Situation in the 
 United States,'' says : 
 
 fi Distinguished economists have urged interna- 
 tional agreements for the wider use of silver, and 
 have deprecated independent action by any one 
 nation. But the more thorough-going advocates of 
 free silver in the United States say, certainly with 
 much force, that an international agreement has 
 proved to be simply impracticable, and that if the 
 wider use of silver is to be deferred until there is 
 concerted action by the great nations, it will never 
 come, and certainly it is true that the scheme for In- 
 ternational Bimetalism has practically no prospect 
 of adoption." 
 
 Thus much from Professor Taussig. 
 
 I shall now apply extracts from Horton's " Silver 
 in Europe " : 
 
 ''If submitting these remarks shall arouse a 
 sense of the realities of the struggle in progress, 
 then at least it can be said of these disjointed pages 
 that, though the road be a rough one, still, as the 
 French idiom has it, ' we arrive.' Let me mark 
 here, points which it may prove peculiarly useful to 
 dwell upon at this juncture, when the air is full of 
 talk of an international conference. Europeans will 
 never agree to the free coinage of silver merely 
 because Americans wish them to do so ; an interna- 
 tional conference having, as such, no original power 
 to establish a coinage system. 
 
 '' The opposition to the silver movement is 
 usually painted in deceptive colors. The language 
 of eloquence and of passion before many a constitu-
 
 21 
 
 ency has presented an indictment against the origi- 
 nators of the anti-silver laws of Europe, and against 
 its apologists to-day, as well as against the partisans 
 of gold in this country an indictment for conspiracy 
 against the rest of mankind. This untenable in- 
 dictment is a great compliment to the foresight and 
 power of organization of the supporters of the gold 
 standard. 
 
 ' ' Of course special interests, and short views 
 about them, affect opinion, and naturally they have 
 played their part here. In a broad sense anti-silver 
 legislation was adopted to satisfy opinion based upon 
 avowed and legitimate interests represented in public. 
 Everywhere, in every country, those learned in 
 monetary matters were avowed inspirers of the 
 movement against silver, believing that they were 
 right. 
 
 '' It was upon the incitation, and with the approval 
 of an overwhelming majority of the learned of all 
 nations that the anti-silver statutes and decrees in 
 divers nations became fact. Americans must take to 
 heart that for this general policy the United States 
 has its share of responsibility, for in 1867 the influ- 
 ence of the American Union in the family of nations 
 was militant in Paris, aiding and abetting the anti- 
 silver movements then organizing. And all was 
 done with the best intentions, and under the advice 
 of counsel recognized as learned in the law. 
 
 " These anti-silver laws, whose effects we have 
 been called upon to consider were not adopted with- 
 out deliberation. The advice of counsel was taken, 
 men of action submitted to men of thought, and the 
 advising counsel were the learned of a generation. 
 It was the general consensus of the learned opinion
 
 22 
 
 of the time which these laws were intended to reflect. 
 The republic of monetary learning an imperium in 
 imperils, an economic church which respects no 
 national boundaries was unanimous. It believed in 
 the unification of money in security of valuations, 
 in simplification of the means of exchange, in facili- 
 tating international trade and investment an aim 
 nobly in unison with the progressive spirit of an age 
 whose glory it is already to have made giant strides 
 in this direction, by putting nature's forces in har- 
 ness, as well as by cultivating the faculties of men. 
 This was the aim, the object, the end. What could 
 be more worthy ? " 
 
 Thus much from Mr. Horton. 
 
 Again quoting Walter Bagehot, November 14, 
 1868, he said: 
 
 "A universal currency must be founded on a 
 single standard, not on a double. A contract to pay 
 a sum of money shall be satisfied only by the pay- 
 ment of a specified portion of one known metal ; if 
 gold, by so much gold, if silver, then by so much 
 silver. Under the contrary system, that of a so- 
 called double standard, the contract may be satisfied 
 in two ways ; the debtor has an alternative he may 
 pay either so much gold or so much silver as he 
 likes, and therefore there are two chances for depre- 
 ciation. Whichever metal declines in value the 
 debtor is sure to select, and that metal so impaired 
 the creditor must receive. A kind of mist floats over 
 some minds ; they fancy that by using a currency of 
 two metals they evade the danger of depreciation of 
 either, but they really risk the depreciation of
 
 BOTH ; the impaired will always be preferred be- 
 cause it IS impaired, because it is cheaper. 
 
 " A new coinage to suit present commerce must 
 have a high GOLD UNIT. Silver is the character- 
 istic currency of early nations and poor nations; by 
 comparison it is plentiful, and therefore cheap ; the 
 small amounts which early trade required were best 
 paid in it, and therefore it was used. But now large 
 transactions require a DEAR paying medium; the 
 more costly the unit, the fewer the pieces to be 
 counted and the easier the use of the currency." 
 
 Bear in mind that just previous to this brief ex- 
 tract from Mr. Bagehot I have been applying the 
 words of the ablest American bimetalist, Mr. S. 
 Dana Horton, and he says : 
 
 " In fairness I may confess that the keynote of 
 what I have been saying was given me by one of the 
 highest names in the camp of the opposition and in 
 the literature of money, for Michel Chevalier is 
 among the prophets for all who have a monetary 
 faith. During the Monetary Conference of 1878, 
 Michel Chevalier, speaking of the subject of the Con- 
 ference, said words which remain and always will 
 remain in my memory : " You will never succeed in 
 converting Engla nd. ' ' 
 
 Thus much from Mr. Horton. 
 
 Now I wish to add to this that the array of 
 French economists and financiers opposed to inter- 
 national bimetalism is larger than that of Great 
 Britain : Chevalier, Levasseur, Frederick Passy, 
 Fournier de Flaix, Duy Puynode, Clement Juglar,
 
 24 
 
 Mannequin, Cochnt, the Messrs. Coste, Baisse, 
 Parieu, Permez, D'Avenal, the two Says, Leon and 
 J. B., Tirard, Beaulieu, des Essars, and others ; in fact 
 every French economist of national repute of this 
 
 
 
 generation. 
 
 Now a word as to the amount of silver that can 
 be got into circulation, and I call your especial atten- 
 tion to the admission of Mr. Geo. J. Goshen, Chan- 
 cellor of the British Exchequer, and Mr. Dana Hor- 
 ton, one of the United States' Commissioners to the 
 Silver Congress of 1878, of the lack of power of a 
 government in such matters. The ability of a 
 country to " absorb" silver is the burden of the song 
 of some of the silver sirens. A few facts, particu- 
 larly as to experiences, especially of the United 
 States of America, in " absorbing " silver may be not 
 only interesting but instructive. To listen to the 
 clamor of silver advocates one would not only sup- 
 pose there is a universal desire for more silver, but 
 that the people are weeping and wailing for it. 
 
 Mr. Goshen said: 
 
 " I know there is considerable stir and anxiety 
 upon the part of other countries. I know there is 
 considerable desire for a conference. I am anxious 
 for the increased use of silver, and, personally I 
 am speaking without communication with my col- 
 leagues of the Bank of England on the subject I 
 have been always anxious to see the use of silver 
 extended as far as it could be done compatibly with 
 our general arrangements.
 
 25 
 
 " Now I want you to understand this probably 
 you do understand it, but I want the public to do 
 so that the Government, as a government, has no 
 power to force any particular kind of circulation on the 
 country. The letters I have received about the supply 
 of silver, for example, have been innumerable. 
 ' Why don't you let us have more silver ? ' Good 
 heavens, I wish every one would take as much silver 
 as possible, considering the enormous profit the 
 Exchequer makes by it. We have untold sums at 
 the Bank of England and at the Mint waiting to be 
 circulated, anxious to travel, but they are not invited. 
 I do not know who the persons are who do not ex- 
 tend the invitation to these silver coins to pay a visit 
 to the country, but at all events some of those who 
 spread the circulation of the country all of them 
 have got far more power to determine what circulation 
 there shall be in the country than the Government" 
 Thus much from Mr. Goshen. 
 
 Says Mr. Dana Horton, in his " Silver in 
 Europe " : 
 
 "The people of the United States do not take to 
 the silver dollar very kindly. They do not seem to 
 want more than one apiece, per capita, for their 
 pockets, their tills, and their strong-boxes. They 
 persist in 'treating silver as a commodity.' How- 
 ever inconvenient this fact may be, it can only be 
 dealt with as a fact. It is futile to try to explain 
 it away. The fact is fact. Silver certificates are 
 not silver dollars, and can no more be made into sil- 
 ver dollars than orange-peel water can be made into 
 wine by stress of imagination. Silver dollars have 
 been within reach for eleven years ( Mr. Horton was 
 writing in 1889); halves and quarters have been
 
 26 
 
 within reach still longer. Yet there are twenty-two 
 million of dollars of silver change that have been 
 losing interest for many years as a ' dead asset ' in 
 the Treasury. I have never heard that the Treas- 
 ury has interposed any obstacles in the way of a 
 demand for silver dollars, as compared with other 
 current money. We must accept the books of the 
 Treasury as a record of the people's will. In the 
 last four years there have been about sixty millions 
 of silver dollars in the hands of the people. I know 
 of no indication that a change of habit is to enlarge 
 the use of them." 
 
 Thus much from Mr. Horton. 
 In the summer of 1892 the United States Senate 
 asked the Director of the Mint what was the number 
 of standard silver dollars then in circulation, and the 
 answer was, 56,779,484. The Senate further asked 
 what was the number of standard silver dollars then 
 in the Treasury. The answer was, 357,189,251. 
 Thus in the fourteen years immediately following 
 the passage of the Bland-Allison Act barely one- 
 seventh of the legal tender dollars coined under that 
 Act had been got into circulation, in spite of all the 
 efforts of the Government of the United States of 
 America. 
 
 Professor Taussig, writing in 1893, said: 
 " The Government has made every effort to get 
 the silver dollar coins out of its hands. Congress 
 has annually appropriated a sum to enable the 
 Treasury Department to ship them, free of expense, 
 to all applicants in any part of the United States. 
 The premium so offered to persons who have occasion
 
 27 
 
 to use money in small denominations, and especially 
 to employers having large pay-rolls, has sometimes 
 led to considerable call for them. But the great 
 bulk of the coins thus got out of the Treasury return 
 to it almost at once. The employees to whom they 
 are paid get rid of them as fast as they make pur- 
 chases ; the shopkeepers in whose tills they accumu- 
 late, finding their customers averse to taking them in 
 change, turn them into the banks on deposit and the 
 banks finally turn them into the nearest sub-treas- 
 ury in payment of public dues. The round trip 
 from Treasury back to Treasury is easily made in 
 some districts in the course of a single week.' 1 
 
 Now let us consider the situation since 1893 : 
 
 Population. ^ 5111 ^r Capita. 
 
 November 1, 1893 
 
 67,426,000 
 
 58,725,818 
 
 0.87 
 
 November 1, 1894 
 
 68,887,000 
 
 56,443,670 
 
 0.82 
 
 November 1, 1895 
 
 70,378,000 
 
 58,354,092 
 
 0.83 
 
 November 1, 1896 
 
 71,902,000 
 
 58,190,802 
 
 0.81 
 
 March 1, 1897 
 
 72,418,800 
 
 55,378,762 
 
 0.76 
 
 April 1, 1897 
 
 72,547,000 
 
 54,507,319 
 
 0.75 
 
 The facts cited constitute a striking example of 
 the truth that the quantity of metallic money that 
 can be put into circulation is limited, and it is also 
 a fact that the 360,000,000 of silver dollars piled up 
 in the U. S. Treasury have really no more monetary 
 efficiency than coal or iron. 
 
 The largest number of silver dollars in circula- 
 tion in the United States at any given time was 
 November i, 1890, viz.: 65,709,564, at which date 
 the population was estimated at 63,200,000, which 
 would give a per capita of silver dollars in circula- 
 tion of $1.04.
 
 28 
 
 Senator Wolcott is quoted herein as alleging that 
 if a solution is not found for the question of Interna- 
 tional Bimetalism the next election in the United 
 States will go for free silver. In view of all the facts 
 this reminds nie of an amusing example in the 
 grammar, in use when I was a boy, of the misuse of 
 words: "A man upon falling into a slough cried 
 lustily: "I will drown! nobody shall help me!" 
 You, gentlemen of the Convention, can make your 
 own application. 
 
 Now, then, a few concluding remarks as to our 
 duty: 
 
 Every unjust or unwise measure that receives 
 consideration at the hands of our legislators ought 
 to be stoutly opposed. To permit such measures to 
 become law without an intelligent and vigorous 
 protest must suggest to the legislators a state of 
 indifference to or contempt of their action on the part 
 of those affected thereby, and an impression of either 
 kind once made upon their minds is sure to be fruit- 
 ful of mischief sooner or later. 
 
 In an admirable pamphlet by Mr. Lewis Hancock, 
 an Austin, Texas, banker, published last year, he set 
 forth pertinently the importance of the banking 
 interest, speaking out boldly and unreservedly regard- 
 ing the monetary affairs of the country, as follows : 
 
 " I do not say that it is our duty as bankers to 
 take up the burden of the fray. We, as bankers, are 
 no more interested in this struggle than the mer- 
 chants, the farmers, and the laborers. But as citi-
 
 29 
 
 zens of a great and prosperous country we are all 
 vitally interested." 
 
 You all know how candidly I expressed myself 
 throughout the last year's campaign upon questions 
 affecting the public interest. My experience has 
 taught me that the average member of a legislative 
 body, same as other men, likes to have the respect 
 shown him which is due to an intelligent, reasonable 
 citizen, and will take kindly to suggestions regarding 
 things he is expected to deal with in his representa- 
 tive capacity. I have found after forty odd years 
 of active business that the average legislator is 
 amenable to truth and reason ; that you can convince 
 him with arguments founded upon honesty and 
 fairness. Hence, as aforesaid, I do not believe in 
 letting any unjust, measures become law without 
 sturdy opposition that will leave law-makers no 
 pretext for inferring indifference or contempt. 
 Neither of these dispositions in regard to any matter 
 affecting public interest is proper or just, or respect- 
 ful to them or to the people who chose them as 
 their representatives. Yet this respectful attitude of 
 mind is not easy of attainment when one remembers 
 that of nearly three hundred Congressmen who 
 recently voted on this question only three had the 
 courage and candor to point out the futility and dis- 
 honesty of the whole delusive scheme of Interna- 
 tional Bimetalism. 
 
 If Congress would go to work and reconstruct on 
 scientific principles our monetary agglomeration
 
 30 
 
 for I repeat it cannot be called a system definitely 
 affirm the payment of all obligations on the basis of 
 the gold standard, retire the greenbacks, and let 
 banks, under proper restrictions and safeguards, 
 issue circulating notes, such action would go a long 
 way toward renewed industrial and commercial ac- 
 tivity. If the present administration and Congress 
 do not act courageously, intelligently and definitely 
 but permit things to drift the fiatists will not be 
 slow to take advantage of the situation. Congress 
 and the Administration cannot escape responsibility. 
 They may as well prepare, and promptly prepare, to 
 meet "the wild and many weaponed throng" of sil- 
 ver inflationists who are marching behind the tat- 
 tered stalking-horse of International Bimetalism. 
 
 The Bankers Association constitutes a van- 
 guard in the march of progress. Let not the national 
 escutcheon of a proud and noble people be smirched 
 or soiled by the indelible blot of repudiation. See to 
 it that the citadel of civic liberty and national honor 
 is ever held by the legions unswerving in fidelity 
 to the supremacy of law and order, and that from its 
 ramparts are kept floating the banner, unsullied and 
 invincible, of the ancient-right standard, a standard 
 of intrinsic equivalency. 
 
 ' ' Nor heed the shaft too surely cast, 
 
 The foul and hissing bolt of scorn; 
 For! with thy side shall dwell, at last, 
 The victory of endurance born."