•Ui 1 c^, A ^^==" S^ =- -o ==| n 2 — -^ H ==^ LIE 4 1 .^ n^ — 5 Q 2 ^=p i ^ ^'^ Dangers of the Proposed National Paper -Money Trust By Anson PhelDS Sto?mes ■^;i: «. THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES ^mt y4 DANGERS OF THE PROPOSED NATIONAL PAPER-MONEY TRUST COIN AND COIN CERTIFICATES THE ONLY SAFE, HONEST, SELF-REGULATING CONSTITUTIONAL, AND PER- MANENT CURRENCY ANSON PHELPS STOKES AUTHOR OF "JOINT-METALLISM" Hbe ftnicfierbocfier press, t^ew ^ot\i PROPOSED CURRENCY PLANK. We denounce paper money issued for the benefit of banks, bondholders, and speculators. We believe in hard money — gold and silver freely coined at a ratio regulated by Congress, — the only legal tender con- templated by the Constitution. We demand that the greenbacks, Treas- ury notes, and bank notes shall be re- placed by coin and coin certificates of deposit, and that in this country nothing shall be money that does not honestly represent labor. HO. DANGERS OF THE PROPOSED NATIONAL PAPER-MONEY TRUST. COIN AND COIN CERTIFICATES THE ONLY SAFE, HONEST, SELF-REGULATING, CON- STITUTIONAL, AND PERMANENT CURRENCY. It is pleasant to be able to agree with one's friends and neig-hbors on matters of public interest, if a man can do so without doing- violence to his convictions. There appears, however, to be growing up in this country a disposition to claim, practically, that even on such a Constitutional, histori- cal, and scientific question as that of the currency, a man has no right to differ from the views generally held in his neigh- borhood, or to express opinions not ap- proved by the Boss of his party. Efforts are made to declare, practically, that no one shall have equal opportunity in busi- 399738 2 Dangers of the Proposed ness or in the pursuit of happiness, unless he has the mark or the number or the name of the Boss on his forehead or in his hand. There are many in this country who, in their hearts, revolt against this condition of things, which they feel does not promote honest political effort. They like temper- ate, fair, and free discussion. Honesty requires that when a political party in con- vention formulates and proclaims a plat- form, those who are elected to office on distinct pledges in that platform shall maintain the principles thus declared until the next convention of the party. The pledge of the last Republican Con- vention to promote international bimetal- lism is the most distinct and unqualified in its platform. " International agreement with the lead- ing commercial nations of the world, which we pledge ourselves to promote." This pledge brought to the Republican Party votes necessary for the election of Mr. McKinley. The honorable Senator and head Boss National Paper- Money Trust. 3 of the Republican Party, havino- reformed the Custom House in New Orleans and the legislatorial system of electing National Senators from Ohio, is now taking the lead in trying so to reform the currency as to make bimetallism forever impossible. The Boss and the Republican Adminis- tration are engaged in promoting schemes to establish permanently gold monomet- allism for the permanent advantage of National banks and other corporations, capitalists, and speculators afifiliated with the party, and so to arrange matters that when the Democrats come again jnto power they may find their hands tied, so that if the President be a Democrat not susceptible to monetary influences, he may be bound by law to conform to the views of the present Administration. The plans proposed have the simple object above stated. Their complicated forms remind us unpleasantly of the De- monetization Act of 1873, which was osten- sibly an Act of seventy-one sections to regulate details " relative to the mint, assay offices, and coinage, etc." 4 Daiigcrs of the Pi^oposed These elaborate schemes show how badly frightened the gold-party bosses and bankers are by recent elections and other evidences of popular awakening. They are now willing to sanction what they pleasantly call general asset paper money, if this will help to get a law passed to bind the country to pay bonds and greenbacks in gold. They would not consider it polite to talk of wild-cat money. Congress expressly declared in 1878 that the bonds were payable, at the option of the Government, in silver dollars con- taining 41 2-|- grains each of standard silver, and Congress elected to accept a lower price for bonds rather than give up this option to pay in silver. The Eveni7ig Post of August 7, 1896, frankly stated as fol- lows : " Yes, the syndicate of February, 1895, offered to lend $65,000,000 at 3-| per cent, interest, if it were payable in coin, or at 3 per cent, if payable in gold. The difference to the Government durino- the time the bonds had to run was over $16,- 000,000." National Paper -Money Trust. 5 In 1890, the Treasury notes were ex- pressly made payable in gold or silver, at the discretion of the Secretary of the Treasury. Where is there any legal authority for the claim that the greenbacks must be paid off in gold ? The word parity has been used as if it gave some sanction to this claim. Parity means equality. If you want to maintain the parity between two things or between two men you must treat both alike. You cannot maintain the parity between gold and silver by opening the mints to one and closing them to the other, nor by using one as standard money of account and in reserves, and refusing to so use the other. To every business man who will consider the matter, it must be plain that National banks with $25,000 capital cannot be made to pay on any safe system of banking. The interest on $2 5,000 at 4 percent, would be $1,000, a sum which would not go far toward paying rent, salaries, and other necessary expenses. Every workingman who will consider, 6 Dangers of the Proposed ought to be able to see that the only safety for labor lies in hard money ; that he is sure to be dependent upon capital so long as he permits bankers to furnish the cur- rency of the country ; but that when money cannot be increased except by digging precious metals out of the earth, milling, refining, transporting them, and having the Government coin them, then the demand for and the wages of labor will increase, and all increase in wealth will depend, as it ought to depend, upon increased expendi- ture of and for labor. If all money be, as it should be, stored- up labor, then rich capitalists will object less to have wages advance, for this will advance the value of their hordes of money and securities, and their investments will be made more secure. Farmers, manufacturers, merchants, and other borrowers ought to understand that their safety demands that the supply of money be absolutely unlimited, except by the costs of production of both the pre- cious metals, and that the loanable funds in this country would be vastly increased National Paper -Money Trtist. 7 and the rates of interest reduced by hav- ing all our money, coin and coin certifi- cates, orold and silver, at values reoj'ulated by Congress, as provided in the Constitu- tion, and nearly representing the relative costs of production. Real money would then fiow in from our mints and from abroad. But every dollar we have of paper or credit money destroys many dol- lars of credit, and restricts the circulation of real money, while the costs of main- taining paper money and the losses inevi- table therefrom are many times greater than the costs of providing and maintain- ing an ample currency on a strictly bul- lion basis. Of all the claims made by gold mono- metallists, none is more absurd and more easily refuted by statistics than the per- sistent misrepresentation that the decline in the gold price of silver has been caused by the increase in silver production. The facts are just the other way. The great increase in production is in gold. Our Mint was established at the end of the last century by Act of April 2, i 792. 8 Dangers of the Proposed PRODUCTION OF GOLD AND SILVER IN THE WORLD. Percentage of Production. Period. I>y Weiglit. ]5y Value. Gold. Silver. Gold. Silver. 1801-1810 1.9 98.1 24.1 75 9 1811-1820 2.1 97.9 25.3 74.7 1821-1830 3.0 97.0 33-0 67.0 1831-1840 3.3 96.7 35.2 64.8 1896 5.6 94.4 64.6 354 1896 At coinage value. 48.7 51.3 During the period 1801 to 1840 the rela- tive proportions of the prodvictions of gold and silver in the world varied but little from one decade to another, while the dis- cussions and legislation in France and in this country showed that the Governments were alive to the importance of keeping the mint ratios approximately near to the market ratios. During the period 1841 to 1870, the variation in the relative productions of the precious metals was much greater, but this did not prevent the market ratios from nearly coinciding with the Govern- ment ratios. To promote honest bimetallism here and abroad, it is necessary to pass a law National Paper-Money Trust. 9 that after a date, six months or more in the future, the mints shall be opened to the free coinage of silver at its then mar- ket value. Other provisions, which I have pointed out elsewhere, would aid, and would avoid the necessity for recoinage whenever the ratio should chano-e. We see often in the public press that bimetallism is dead. But the papers that keep attending the wake seem strangely afraid that the corpse may come to life. Reasonable and honest bimetallism is very much alive. In the last National campaign it was ill equipped and had a bad fall, being twisted out of its natural form by the 16 to i craze and the interna- tional-ao-reement delusion. But it will be found all right and ready for work in time for the next general election. I am reminded of the story of a laborer who awoke late one morning, and in his hurry got his overalls on wrong side be- fore. It would take too loncj to cret them off over his boots, so he buttoned them up behind and ran to his work on the new building. When he had climbed nearly lo Natio7ial Paper -Money Trust. to the top of the ladder he sUpped, and fell to the ground stunned. The by- standers cried, "He is dead!" but the foreman examined him and said, " He 's all right ; only he 's got a — bad twist." Anson Phelps Stokes. 47 Cedar Street, New York, Jan. 8, iSgS. The Bible denounces those who " make the shekel large," and who " make the poor to fail." Blaine said : "I believe gold and silver coin to be the money of the Constitution. No power was conferred on Congress to declare either metal should not be money. Congress has, therefore, in my judgment, no jiower to demonetize eitiier." Webster said : " I am certainly of opinion that gold and silver at rates fixed by Congress constitute the legal standard of values in this country, and that neither Congress nor any State has authority to establish any other standard or to displace this standard." McKinley said : " I want the double standard. I would have gold and silver alike." Hill said : " The bimetallic coinage is the demand of a vast majority of the American people. No wonder it made us the party of the silver dollar for eight years. To restore it safely, finally, and wisely is the mission of the Democratic party." Hamilton and Jefferson agreed in saying that tlie money unit must rest on both metals. The Democratic National Convention of 1892 declared : " We hold to the use of both gold and silver as the standard money of this country, and to the coinage of botli witliout dis- crimination against either metal." The Re]">uljlican National Convention of 1892 demanded " the use of both gold and silver as standard money." Carlisle said: "According to my view of the subject, the conspiracy which seems to have been formed here and in Europe to destroy by legislation and otherwise from three sevenths to one half of the metallic money of the world is the most gigantic crime of this or any other age." See Congres- sional Record, Vol. 7, Part 5, Appendix, page 41, second ses- sion XLVth Congress. To THE Editor of the Evening Post : Sir, — I note with interest what you kindly write in to-day's editorials about my book, yoint-Metallisni. You say, "joint- metallism, as we understand the matter, consists of a sciieme for enabling debtors to pay half gold and half silver." There is one point to which I would like to call attention, if it does not trespass too much upon your hospitable columns. I have all along steadily maintained that joint-metallism should be made to apply only to debts contracted after six months from the passage of the act. See pages 5, 3S, 54, in the fifth edition of yoint-Mt'/anisiii, which I send herewith. I think that you will agree with me that this restriction is important in any consideration of my plan, which, as you say, " clearly offers a middle way out of the existing difficulties, and may do something to abate the existing acrimony." That was my purpose in writing the book, which advocates a con- venient system of currency, consisting of joint certificates (see page 2or), based upon deposits of equal values of gold and silver at a Government ratio, to be fixed periodically when- ever the market ratio changed as much as one integer, e. g., from 32 to I to 31 to I, or from 20 to i to 21 to i ; and the coining of silver coins of the same weiglit as standard gold coins, to prevent the necessity of recoinage upon any such change of ratio. But T have shown that if the mints of the United States were thus opened to the coinage of both precious metals at their market values, then, whenever the economic ratio should be arrived at, being the relative costs of production of gold and silver in the poorest mines in which they could be pro- duced at a profit, the Government ratio would probably not change for years, perhaps not for centuries. By this plan, gold and silver together, at ratios always based upon their relative market values, may be made the metallic basis of a sound, honest, self-regulating, and permanent cur- rency, without frequent recoinings, and without danger of one metal driving out the other. Anson Phelps Stokes. JVeiu York, December ij, iSgj. II .*>99?38 EXTRACTS FROM " JOINT-METALLISM." I am opposed to the coinage of silver at i6 to r. I am op- posed to it, not because I believe in gold monometallism. I am equally opposed to that. 1 believe there is a solution of this whole dilrtculty which reasonable men in time may come to; and that is the free coinage, on substantially equal terms, of both gold and silver, in quantities of equal value, at the ratio of their market values. It would be unfair to take the market ratio for our govern- ment ratio now while one of the precious metals is demonetized. But if a reasonable future date were fixed when both metals should be admitted to free coinage at the then market ratio, no wrong would be done to any just interest. I would have the silver in new silver standard coins to be equal in weight to the gold in the gold standard coins ; and I would open the mint to the free coinage of both gold and silver when presented together in quantities of equal value of each metal, according to the government ratio of the time, wdiich should be based always on the market ratio, and changed only when the market ratio changed as much as one integer, e.g., from, say, 25 to i to 24 to i, or from 29 to 1 to 30 to i. The true economic ratio would thus soon be arrived at, and would very seldom change ; and any change would not make recoin- age necessary. I would have a currency so based, half on gold and half on silver, legal tender for the payments of debts contracted after a date some months later than the passage of the act. The Constitutional Convention refused to give Congress the right to print jiaper money, but did give it the right to coin money, and the power to "" rt'gtilatt'" the ratio. It is ultra vires for any political convention to attempt to fix the ratio. It is the duty of Congress to regulate the ratio from time to time to make it conform nearly to the market ratio. The States agreed to leave the matter of rates or ratio to the arbitration of Congress when they adopted the Constitution. Our i^resent trouble comes from the failure of Congress to alter the ratio on one of those very rare occasions when an alteration was necessary to make the ratio approximately accord with the market ratio, while both metals had free access to our mints. If credit money is good money, then the greenback or other fiat money is the best money, because the government's credit is the best credit. What we want is more real money and less credit money. What we want is that no dollar shall be issued that does not have a specie dollar behind it. As the human character is constituted, we shall never have any safety except on that basis. 12 " JOINT-METALLISM," Uy ANSON PHELPS STOKES. Extracts from Letters and Press Notices. Hon. David A. Wells, LL.D., D.C.L., etc. — Vour plan is certainly novel and ingenious. The Right Hon. Lord Playkair. — It is certainly a much more honest system of bimetallism than the schemes already propounded. Prof. W. Smart, LL.D., Glasgow. — It is a most suggestive contribution to a subject which is nf)vv creating as much interest in Great Britain as it does in its parent country. W. T. Harris, United States Commissioner of Education. — In my humble opinion the best book on this subject — a subject of vital importance to the prosperity of the people of this country. Right Rev. H. C. Potter, LL.D., etc. — Much impressed by your argument. Hon. Carroll D. Wright, United States Commissioner of Labor. — Your theory attracts me very much. It seems to me that there is within it the solution of the difficulty. " It is clear, precise, and backed by abundant facts regarding the whole question. . . . As we have said, it is both a timely and a valuable book." — Chicago Inter-Ocean. ". . . A rather striking example of the deep interest which thoughtful men and men of large affairs are now taking in oneof the foremost questions of our times." — A'. V. Times. " Mr. Stokes's plan . . . has real merits, and contains the element of a just appreciation of the present world difficulty. " — Springfield Reptiblican. " In this volume much information of great value may be obtained." — Baltivtore American. Mr. Stokes's plan certainly has the merit of originality, and it seems to overcome the chief difficulties heretofore found in securing the joint use of the two metals." — Pittsburg Gazette. JOINT-METALLISM PLAN BY WHICH GOLD AND SILVER TOGETHER, AT RATIOS ALWAYS BASED ON THEIR RELATIVE MARKET VALUES, MAY BE MADE THE METALLIC BASIS OF A SOUND, HONEST, SELF-REGULATING, AND PER- MANENT CURRENCY, WITHOUT FREQUENT RECOIN- INGS, AND WITHOUT DANGER OF ONE METAL DRIVING OUT THE OTHER ANSON PHELPS STOKES FIFTH FDITION COMPRISING Part I.— JOINT-METALLISM— APPENDIX Part II.— JOINT-METALLISM VS. BIMETALLISM AND MONOMETALLISM Part III.— HISTORY OF THE SCIENCE OF MONEY AND COINAGE Part IV.— THE APOTHEOSIS OF CREDIT— OBJECTIONS ANSWERED AND HONEST LEGISLATION DEMANDED. Part V.- FREE-COINAGE DEBATE ; LETTERS ; AFTER THE ELECTION, WHAT? G. P. PUTNAM'S SONS NEW YORK LONDON 27 WEST twenty-third STREET 24 BEDFORD STREET, STRAND STIjc ^Utichcrbochcr J-Irtsij Octavo, 277 pages $r oo UNIVERSITY OF CALIFORNIA AT LOS ANGELES ,T-k A X\\T 562 Stokes - ^ Q7d — Hangoro of the proposed nat'l panqr-^imiey trust, L 007 122 061 UC SOUTHERN REGIONAL LIBRARY FA AA 001 204 182 { HG 562 S87d