C:;r>w«( . o crt ;M UNTO . s^aO^ OH^'goi.0 &** 26 OBJECT LESSONS. GEO. G. MERRIGK. A WORD IS ENOUGH FOR A WISE MAN. *«• •*« tec « c c c < « K OBJECT LESSONS SHORT CHAPTERS ON FINANCE, MONEY, LEGISLATION, AND THE GENERAL SITUATION AT THE CLOSE OF THE YEAR 1895. By GEO. G. MERRICK. A WORD IS ENOUGH FOR A WISE MAN. 'Be it known unto thee, oh king, we will not serve or worship the golden image wliich thou hast set up."— Daniel iii. 18. DENVER, COLO. John Dove. Printer and Publisher. 1S96. Copyrighted by GEO. G. MERRICK 1896. INTRODUCTION. IN the preparation of this volume no at- tempt has been made to present a con- tinuous argument in favor of the free coinage of silver, nor to do more than to in- dicate, in as concise manner as possible, some of the causes and effects which operate up- on the welfare of the people. The effort has been to condense rather than to enlarge, hoping thereby to stimulate g independent inquiry and investigation. Great care has been taken that every statement made shall be wholly reliable as J to the facts, and as to the soundness of the f propositions in Political Economy and Sci- a| ence of Money. ^ No merely local or selfish interests are to be exclusively benefited by the restora- tion of silver to its constitutional place in the money of this nation. The right is as broad as the power of the people. It is in- herent in the Constitution. Every citizen should desire the greatest good to the great- est number; and that the destructive bur- den of debt shall be rendered lighter, and mdustry permitted its just reward. And in 6 a *""> ^~t ^— ^ ■»•» - 4 Introduction. the hope that the American people will unite, placing patriotism above partisan pol- itics, and restore the laws of the republic under which the nation's industries pros- pered ; that is, a government which, found- ed upon the broad principles of equality and right, extends its almighty arm over all, on one common basis of liberty, equality and justice. And in that hope, and in that faith, this volume is respectfully dedicated to the American People. Geo. G. Merrick. Denver, Colo., January, 1896. THE DOLLAR OF THE CONSTITUTION. ,«< ,tTS>* The Silver Dollar of Three Hundred Seventy-one and one quarter grains fine sil- ver is the dollar of the Fathers, of the Con- stitution and of the Law. It is the dollar of Washington, Madison and Jefferson. It is the dollar which supported the Patriots of American Liberty, and gave the American Nation a constitutional government. It is to-day, what it was before the adoption of the Constitution, the one coin above all others identified as the Money of the People, which has never been altered, changed or impaired. Patriotic memories are associated with it. It is the dollar of the American People. They love it. It is a part of their traditions; and they will no more surrender it, than they will surrender their National Existence, or their National Flag. PROPHECY, 1876. "However great the natural resources of a country may be, however genial its cli- mate, fertile its soil, ingenious, enterprising and industrious its inhabitants, or free its institutions, if the volume of money is shrink- ing and prices are falling, its merchants will be overwehelmed with bankruptcy, its in- dustries will be paralyzed, and destitution and distress will prevail." -Report U. S. Sil- ver Commission, iSj6, p. §6. FULFILLMENT, 1895. Prices have fallen fifty per cent. ! Merchants are bankrupt ! Industries paralyzed ! Destitution and distress prevail ! The burden of debt increasing ! The volume of money shrinking ! The only business which prospers is the accursed trade of usury ! CHAPTER I. FREE COINAGE : WHAT IT IS, WHAT IT IS NOT. The advocates of the gold standard for money, seem unable to define with precision just what is meant by Free Coinage ; and as such definition is essential to a clear under- standing of the purpose and effect of words used, the following may be accepted as the truth in relation to each set of phrases : Free Coinage, Unlimited (or unrestricted) Coin- age, Gratuitous Coinage. Free Coinage. This means that every person having good metal (silver or gold), shall be entitled to free access to the mint to deposit it for coinage ; that there shall be no discrimination, no favoritism, for or against either metal, nor in favor of, or against any person, by reason of age, sex, color, religion or party. And that mint officials shall re- ceive the bullion, and deliver out the coins made therefrom, in the order of time in which deposited. 1 And that the law shall provide proper penalties for the due en- forcement of these rights. Free coinage does not mean gratuitous coinage either di rectly or by implication. 1 See Objection No. 6. S Free Coinage : What it is, What it is not. Unlimited (or Unrestricted) Coinage. This phrase means, that any person may de- posit at the mint for coinage, any quantity of metal, silver or gold, without reference to locality where produced, or limitation as to amount, above $100. Gratuitous Coinage means, that standard metal shall be fabricated into coins, without charge for mintage, or the operation of the mint. There never has been, nor is there now, any controversy as to whether coinage shall be gratuitous or not. If it is proposed to make the mint, either in whole or in part, self-supporting, the only demand is, that both silver and gold contribute upon an equitable basis of charge for coinage to that support. That the law shall provide equal rights to silver and gold. That there shall be no discrimination for or against either metal, in their rights of mintage, and func- tion as money. The coinage law of 1792 was fashioned upon the English Act of Parliament of 1666, which provided for the free, unlimited and gratuitous coinage of all the silver and gold brought to it for coinage into lawful money Frt e Coinage : What it is, W/iat it is not. 9 of England. 1 The act of 1S37 was a free, un- limited and gratuitous coinage act. The acts of 1792 and 1837 provided for certain charges, for assaying, refining, part- ing, and for alloy, in preparing, or standard- izing- the metal ; but no charge for the oper- ation of the mint. It will be observed that the law draws a sharp distinction between the metallurgical processes of preparing standard metal suitable for the operation of the Mint, and the conversion of standard metal into coin. Standard metal may be prepared by any responsible metallurgical establishment: but the converting of standard metal into coin, is the prerogative of the mint ; expressing the sovereignty of the people. The services of the United States Mint have uniformly been gratuitous, with the exception of twen- ty-three months after February 12, 1873. The coinage act of 1873, f° r the first time established a mint charge of one-fifth of one per cent, for converting standard gold bul- lion into coin. And the charges for assay- ing, melting and refining, parting and for alloy, to be fixed by the Secretary of the 1 International Monetary Conference, 1878, published by Department of State, Doc. 56, 45th Cong., 3d Sess., pp. 309. 3io. jo Free Coinage : What it is, What it is not. Treasury so as to equal, but not to exceed, the actual average cost, etc. 1 This charge of one-fifth of one per cent, on gold coin was repealed by Sec. 2 Act of January 14th, 1S75, "An Act to Provide for the Resumption of Specie Payments." So that since that date the coinage of gold has been free, unlimited and gratuitous. The demand is for exact equality for silver and gold ; no more, no less. 1 See Sec. 25, Act February 12th, 1873. Also Sec. 18, Act January 18 h, 1837. CHAPTER U. WHAT IS VALUE IN POLITICAL ECONOMY ? "Ye are all physicians of no value."— Job xiii. I. Value in political economy, in buying, or selling, where the exchange is to be effected with money as one of the terms, or agents of the contract, possesses no other or differ- ent quality, than were the exchange one of property for property. There must first be an agreement to exchange the quantities fixed by the agreement, a debt contracted, which, like all debt, is payable in money. x Value, therefore, is that estimate which the individual mind places upon an article or commodity, in relation to the desire for its possession, together with the ability to ac- quire it. Value is an ideal, ^and in this ideal there can be no standard/ s 1 No one can be compelled to exchange anything for money until a contract in some form is established in which money is one term of the agreement. (See "What is Money ?" page 20. 2 "It is hardly correct to speak of a standard of value. Value is an ideal thing."— U. S. Supreme Court, 12th Wal- CHAPTER III. UNIT OF VALUE IMPOSSIBLE. In the United States the dollar is the unit for money, 1 and the money of account. When in 1792 the United States Congress enacted "That the money of account shall be expressed in dollars or units, * * * and all accounts in the public offices, and all proceedings in the courts of the United States shall be kept and had in conformity with this regulation," the effort was directed towards preserving with scrupulous care the then existing order of things, the rights, habits, methods of thought, and usage among the people upon, not only the money of account, but also as to the unit, what it then was, and what it should continue to be. Value being purely "an ideal thing," it is impossible to, by enactment, create a unit to which the ideal shall conform, or, by which it shall be expressed. And it was left for the Congress which passed "the treach- erous and deceptive act of 1873," to attempt 1 What is a unit ? 7'he fundamental unit adopted in any system of weights, measurers, or money, by which its several denominations are regulated, and which is itself defined by comparison with some known magnitude, either natural or empirical, as, in the United States, the dollar for money. Unit of Value Impossible. 1 3 the impossible, and solemnly decree a "unit of value." It were charitable to suppose that when the act of 1873 was prepared, the promoter of it was so much absorbed with the intent to "remove the ancient landmark of money," that the absurd and futile expression, "unit of value," when used in connection with the gold dollar, escaped the attention of the committee. May it not be further evidence, that neither the committee, nor Congress, knew it were there, for there were many members of both houses of Congress who knew that a "unit of value," was a legal ab- surdity ; and that to vote in support of such an impossible proposition, was to imperish- ably record their incompetency as legisla- tors*. "The dollar as a unit of value" is prepos- terous. Our Hamilton-Jefferson statute, founding the mint, provided a dollar as our "unit of account." 1 The dollar remains in law and usage the unit of account of the United States. The attempt was made in the 14th Sec- l W. P. St. John, President Mercantile National Bank of New York, before the Committee of Banking and Cur- rency. House of Representatives, on the Carlisle Bank Note Bill, December 15th, 1S94. 14 Unit of Value Impossible. tion of the act of 1873 to change the ex- pression of that unit from silver and gold to gold alone, but to effect that purpose the words "of value," after "unit" must be held to be surplusage, and of non effect. A unit of value is an absurd and preposterous im- possibility. CHAPTER IV. GOLD NEVER VARIES IN VALUE. This is a stock argument of the advocates of the single gold standard, but they never venture to explain why it does not. The answers are very simple. Under existing laws and usage, gold is not a commodity ! Gold is not bought or sold in the market. 1 Gold miners are not in competition. The producers of gold in the United States, Aus- tralia or South Africa, whether at a cost of 15 cents an ounce or at $30 an ounce, pro- duce gold, for which the mint doors are open to receive and convert into money at $20.67 per fine ounce, and without charge. This is the legal, the statutory, the money value of an ounce of gold ; because it will be converted into primary — full legal-ten- der, debt paying money at that ratio. Take from gold this unlimited use, deprive it of free coinage and of the legal tender, and 1 It is customary to say that the bankers or dealers buy gold bullion. Do they ? The basis of every transaction in gold dust, nuggets, or bars is the mint valuation of $20.67 per fine ounce. The dealer charges for transportation, ex- change, interest and commission. So that the transaction is a charge for services rendered, not a purchase in the sense of bargaining as to the value or price of the fine metal. 1 6 Gold Never Varies in Value. gold becomes a commodity to be bartered in the markets to the highest bidder. It possesses no quality in itself which gives to the metal an unchanging price ; but as long as the law creates the arbitrary function of payment of debts, and confers it upon gold, the market price and the mint valuation must, in the nature of things, remain the same. Hence, the unchanging value of gold depends upon its legal function, and an open mint. The commercial value of gold ex- pressed in gold must always be its gold value. It must always be at parity. CHAPTER V. MONEY EASY IN WALL STREET. When Prices of the Products of a Country Fall, Interest Falls. Money easy, offered on call at one per cent per annum ; and this condition at the important money centers is cited as evidence that there is a great over-supply of money for which there is no demand. If evidence were needed that the country is not generally prosperous, the fact that there is an undue accumulation of money and currency at the banking centers would in itself be sufficient. The fact that money or currency is of- fered to loan to be repaid on call (on de- mand without grace) at the rate of one per cent, per annum interest, is in no sense any proof of an adequate supply of either. It is proof that the holders of it (banks) dare not loan for any time, fearing that the owners (depositors) may call for payment without notice, and that the demand could not be met. Money or currency locked up in reserves or held for speculative purposes, or offered to loan on call at one per cent., is not money I 8 Money Easy in Wall Street. in circulation, or available for commercial or industrial transactions. Neither railroads, steamboats, factories, shops or mills, nor any important industrial enterprise can be instituted and developed upon money borrowed to be repaid on call ; nor can the wheat, or cotton, or any other of the great staple crops of the country be moved to a market by the use of money bor- rowed to be repaid on call. When prices of the products of a country fall, interest falls ! Why ? "When prices of commodities and property are falling moneyed men will not part with money in order to acquire property which in a month will be worth less than they paid for it, or to employ labor, the prices of the products of which are constant- ly declining. They keep their money either in the form of gilt-edged bonds or as de- posits in bank, subject to their order. In other words, so far as all the purposes of money are concerned, it may be said to be hoarded." * * * "When money is rising in value, therefore, men, instead of putting it to use take it practically out of use. Hence at such times it refuses to perform the be- nificent functions for which society intended Money Easy in Wail Street. 1 9 it. * * * "These low and lowering rates of in- terest, instead of denoting financial strength and industrial prosperity, are a gauge of in- creasing prostration." 1 'There are some who deny this, on the ground that 'money was never so cheap as now,' to use the parlance of the market. "It is true that the rate of interest was never tower, and in that sense the very inaccurate phrase, 'cheap money,' is quite true. But all monetary authorities know well that the two things are quite distinct. "The rate (of interest) for the use of capital, and the purchasing power of gold, are wholly different things. The former varies with the state of credit, the activity of trade, etc., and would do so whether the pur- chasing power of gold were great or small. "Indeed, a fall in prices has a tendency to keep down the rate of interest, as it causes much distress, and a want of confi- dence among the commercial classes; hence unused capital accumulates, and the curious phenonomen is witnessed of the value of money, i.e. its purchasing power increasing while the rate of interest declines. 2 1 Hon. John P. Jones' speech in U. S. Senate, Oct., 1893. \ The Bimetallic Question, by Samuel Smith, M. P. CHAPTER VI. WHAT IS MONEY. TFirst published in Dr. Kling's "Snap Shots at Facts in Finance." J There is no such natural thing as money. Money, therefore, is a function. That func- tion is created by law. Money is wholly ar- tificial. The creation of and the issuing of money constitutes one of the highest attributes of sovereignty. No other authority can create money. The function performed by money is that of legal tender; this legal tender being conferred upon the substances of which money is made, by the sovereign power- the law maker. It is this function which clothes money with its power of exchange for all commodities, all debts, and all labor- Mark this important fact : No one can be compelled to exchange anything for money until a contract in some form is established in which money is one term of the agree- ment. But money being the solvent of all debts, renders it of "universal desire and commanding utility." "All money is safe money, is honest money, is sound money. If it is not all these it is not money." What Is Money ? 2 1 No dollar of money can be more or less than one hundred cents. Money is not a commodity ; money is not bought or sold. The phrases premium or discount, for money, are misleading, erroneous and mis- chievous. It is only when money is ex- changed for some form of currency — some- thing that is not money ; such as bank or treasury notes, drafts or bills of exchange- that premiums or discounts apply, and be- longs to the currency, not to the money. l The payment for transfer of money from one place to another by bank draft or bill of ex- change is payment for the service rendered by the transfer, and does not relate to any- thing else. 1 About August 15th, 1893, the following advertisement appeared in the New York World : "Wanted— Silver Dol- lars. We desire to purchase at a premium of % per cent., or $7.50 per $1,000, standard silver dollars in sums of $1,000 dollars or more, in return for our certified checks, payable through the clearing house. Zimmerman & Forshay, bank- ers, 11 Wall Street." In this case the combined credit of the New York Clearing House, in sums of $1007.50, payable in gold, was offered in exchange for $1,000 of the abused and maligned standard Silver Dollars. Why ? Because silver dollars would pay debts, and certified clearing house checks would not. CHAPTER VII. WHAT IS CURRENCY ? [First publisher! in Dr. Klinar*s "Snap Shots of Facts in Finance."] In its relation to money, currency proper is 'That which is in circulation or is given as having representative value ; as a curren- cy of a country, — government, or bank notes circulating as a substitute for money." "A currency is that thing or things which in the form or semblance of money, cir- culates, because of the confidence of the people that it will be accepted of the holder thereof in payment of debts or purchases; but which the creditor may at any time, or place, without notice, refuse to receive in payment of a contract stated in terms of money." "It is customary to refer to the whole vol- ume of outstanding money and currency to- gether as the currency in circulation." Mon- ey circulates and is a currency, but this fact in no sense clothes a currency with the money function. National bank notes are a form of currency. If your creditor may refuse to receive that which you tender in payment of a money obligation, you do not have money. Here What Js Currency f 23 lies the true test between money and cur- rency. Can the creditor refuse to receive it of the debtor ? If so, it is not money. We challenge the gold standard advo- cates to successfully point out error in any of the foregoing propositions. CHAPTER VIII. MONEY SUPPLY VS. MONEY DEMAND. [First published in Dr. Kling's "Snap Shots at Facts in Finance."] 'The supply of money has never equaled the demand for money." Since the time when money became the most convenient expedient of civilization— of commanding importance, and of universal desire — these eleven words state the cause of every monetary disaster in the world's history. They also state the cause of every mone- tary controversy, including the silver coin- age question of the present day. The gigan- tic structure of debt of all nations, and of all peoples, is built upon the fact that the de- mand for money is greater than the supply. The usury system (interest) could not exist upon any other condition. All forms of credit devices, or substitutes for money, such as bank notes, government notes, or other promises to pay money, are all in evidence that the demand is so great that the people will accept in the place of money that stupendous fraud, a promise to pay from four to six times as many dollars as there are dollars available to pay with. Money Supply vs. Money Demand. 2 -d The demand for money is insatiable. It grows with the development of individuals, and of nations ; it is as high as human hope, and boundless as human aspirations ; it is as broad as ambition's tireless search ; it is as deep as the bottomless pit; as cruel and mer- ciless as avarice. No other cause has aided so greatly to national ruin. No other con- dition that has been the means of holding / humanity so absolutely in servitude. In the twentieth year of the reign of Ar- taxerxes there is recorded (Nehemiah v. 3-7) the case of a province, a people, where the demand, the necessity, for money was so great that they had mortgaged homes, lands, and the growing crops on the lands. Not only this, they had mortgaged their sons and their daughters into bondage, and the mort- gage holder was foreclosing upon the lands, crops and children. Like causes produce like results. In the United States the mort- gaged land, houses, growing crops, Mocks of the field, and the cattle upon the plains and hills, is the rule, not the exception. The restoration of silver to its constitu- tional place as a money metal, and the free coinage of it into money, would double the supply of money. The demand for money 26 Money Supply vs. Money Demand. will then be more easily met ; prices of farm products, and of all other products of labor, will increase ; and it may be possible to re- deem the land, the houses, the crops and the children from the ever-present burden of debt. CHAPTER IX. THE EVILS OF THE GOLD VALUATION OR STANDARD. Briefly stated they are : i. Low prices of all exportable products. 2. Continuing fall in general prices. 3. Destructive competition from silver using countries. 4. Increase of debt, both national and pri- vate. 5. Increasing divergence of the purchas- ing power of gold over silver. 6. A high and unstable rate of exchange. That a decline in general prices, taken alone, or in connection with other things, is a destructive evil, is not open to debate. That a continuing fall in general prices involves the transference from the active producers of wealth (the farmer and planter), of a much larger proportion of production in satisfaction of the fixed charges (interest, taxes, and debts of all kinds) due to the non- producing, or passive owners of wealth. And the fact that production is large, and that with fair prices a greater abundance would be available for the payment of such fixed 28 Evils of Gold Valuation. charges. Such fact is no justification for the transference of any part of it from those -to whose skill and labor such production is due; to those other agencies, who have furnished neither skill, or labor, and to whom, there- fore, it is not due. In justice the whole in- crease should go to the active agents of pro- duction. But, any fall in prices prevents their participation in the increase ; leaving them no better off ; whilst, if there is a fur- ther decline, it leaves them worse off, not- withstanding the abundance which they have added to the wealth of society. It is important that the American people clearly understand that a fall in the prices of commodities, whether taken alone or in con- junction with currency or money standards; which involves the supply of money; not on- ly retards the production of wealth, but in- volves less wealth to be divided between those who produce it all ; and more wealth to be accumulated by those who produce none ; than would have fallen to their re- spective shares, had there been no appreci- ation of the purchasing power of money due to the gold standard, and to the degradation of silver coins, to token currency redeem- Evils oj Gold I \iluation. 29 able in gold. 1 When these conditions are understood, and that such results are due to an unwise, if not criminal, policy on the part of administrative officials in the discharge of grave official duty; and that the only reme- dy possible, lies in the restoration of silver to all its ancient rights of mintage and func- tions of money, thereby increasing the vol- ume of money available with which to trans- act the business of the country. And, when that remedy shall be applied, much will have been done toward checking the continuing decline in the selling prices of exportable commodoties. The premium so long offered to the growth and export of wheat and cot- ton, from silver using countries, and the manufacture of goods there, has been so long continued that the destructive effects upon our own industries can only be checked by depriving the exporters of the bounty of- fered in cheap silver. The increase of debts, both national and private, would at once cease. Gold would possess no power over silver in making prices, or in payment. And the rates of foreign exchange must at once decline with the result of a credit bal- 1 "Bimetalist" (London), December, 1895. 30 Evils of Gold Valuation. ance of trade in our favor and exchange on London at a discount. 1 Such are the natu- ral results following the remonetization of silver by the people of the United States. 1 See Mr. W. P. St. John on Exchange in reply to Objec" tion No. 5. CHAPTER X. WHY THE PRODUCTIVE INDUSTRIES OF THE PEOPLE WILL BE BENEFITED BY THE FREE COINAGE OF SILVER. First. As to the products of the earth, the primary source of all wealth. The free coinage of silver would so large- ly increase the supply of money available for commercial transactions that prices of all ex- portable commodities would rise, while at the same time foreign exchange would, of neces- sity, fall ; resulting in an immense increase of exports to countries with a gold standard. 1 It is said that the farmer must buy as well as sell. True ; but the law is simple. Pro- ducers always produce more than they con- sume, and in the case of a rise, theygain on the whole amount produced, ancMose only on what they purchase. 2 Second. As to the effect upon the em- ployment and earnings of those engaged in manufactures, and the wage earner gener- ally. As the result of a larger supply of money, i See answer to Objection No. 5. 2 Monetary Principles No. 13. Productive Industries Benefited. a* the purchase of foreign goods would be large- ly restricted, which would at once set all our home manufacturers at work, employing operatives on full time and increased wages; who in turn become much larger consumers of home products. And this law applies to all occupations where labor is seeking em- ployment ; and, while the price of food and fabric would be higher, the difference in such cost would be much more than com- pensated by regular employment and the in- creased wages received. "High prices and plenty are prosperity ; low prices and want are misery. ' Third. As to the non-producer, the own- ers of money, held for investment. If the non-producing class should lose temporarily owing to the increase in general prices they would in the end be benefited by the increased opportunities for investment, and by the intensified demand for the use of capital. 1 They would also be immensely benefited by the stability and permanence given to the value of securities held for pres- ent or future investments. The truth of these three propositions can be verified by the experience of every far- 1 Monetary Principles No. 14. Productive Industries Benefited. i 7 mer, every wage earner, and every holder of securities in the United States during the last three years. The astonishing thing is that any one among them can be so blind as to advocate the gold standard, and conse- quent destruction of all values and all in- dustries. CHAPTER XI. A PREMIUM ON GOLD. Much is said about the disastrous effects upon the people of the United States should gold go to a premium; but no clear state- ment is made as to how those effects will be realized. A case in point: At Buenos Ayers, the Capitol of the Argentine Republic, gold has been quoted as bearing a premium of some- thing over 250 per cent, for many years; and there, if anywhere, we should look for the destructive effects of a premium on gold. What are the facts? No gold-standard nation on earth is as prosperous as is the Argentine Republic; not so much be- cause of the premium on gold, as because they use a large volume of money, and currency which enables national and private industries to be developed and enlarged. The important fact to be remembered is, that it costs the Argentine farmer and planter no more bushels of wheat, no more pounds of cotton, of the same grade and quality, to pay a debt of one thousand dol- lars in London — with a premium on gold, no matter what that premium may be— A Premium on Gold. 35 than it does the farmer and planter in the United States. Why ? Because the prices of those exportable articles are fixed in London; and the Argentine producer, and the United States producer, are both in com- petition with Indian grown wheat and cot- ton; where silver has lost none of its value in purchasing and debt paying power. The productive industries of the United States have nothing to fear from a premium on gold; but have much to fear from the gold standard. CHAPTER XII. THE GRESHAM LAW. Sir Thomas Gresham, of London, Eng- land, born 1519, died 1579, was a successful merchant, and was employed by Edward VI. in 1 55 1 , to reform the financial affairs of the kingdom. Gresham, as the financial agent of the government, conducted many secret ne- gotiations, effected large loans, never omit- ting an opportunity to use the knowledge so obtained to promote his private gains, so that he accumulated great wealth. 1 In 1 55 1 the English money — principally silver coins of Spanish and English mintage -had been so reduced in weight, by clipping, punching, filing and other methods, that the current money was "in such a state of confu- sion and fluctuation that the sellers scarcely ever knew what value they were to receive for their goods." Under such conditions, the merchants having bills to pay out of England, where sil- ver and gold were received by weight, and not at the nominal value of the coin, saved all the full zaeight coins with which to pay their 1 Dictionary of National Biography. McMillan & Co., London, 1890, vol. 23, page 142, et seq. The G res ham Law. y] foreign debts. The result of which was, that all the good (full weight) money was sent out of the country, and all the bad — poor— (light weight) money remained at home and was passed around in exchange or in pay- ment of domestic purchases and debts. This evil continued as long as the government ac- cepted the light weight coins in payment of taxes and dues ; but, when the government established a limit of tolerence in weight at which coins would be received at their nom- inal value, the discrimination ceased, because there was no gain to the merchant by retain- ing the light coins and exporting the sound ones. The Gresham Law was first stated by Aristophanes the Greek Philosopher. Jevons states the law as comprised in two preposi- tions : 'That bad money drives out good money ;" "Good money cannot drive out bad money." 1 Referring to the condition of the money (coins) of England at the time of Gresham, the "Law" is shorn of all difficulties and its application freed from all uncertainties. For the law to apply, the money (coins) 1 Jevons' Money and Mechanism of Exchange : H. S. King, London, 1876, page 81. 3ft<)255 T)S> The Gresham Laiv. must be of the same material. The law does not apply to money (coins) of different ma- terial, such as silver or gold. "Bad money drives out good money ;" which is the short way of saying that wherever light weight coins can be used in the payment of taxes and other public dues, at their nominal value, such coins (bad money) will remain in circu- lation, and that all full weight coins (good money) will be exported for the payment of debts, not at their nominal value, but by weight. "Good money cannot drive out bad money ;" and for the same reason, good money (full weight) is gathered for export where it must be weighed and its value cal- culated upon weight. The light weight coins (bad money) passing at their nominal value cannot be exported without loss to the hold- er. It will be seen that the Gresham Law ap- plies to coins of the same kind of metal, not to coins of silver expelling gold, or coins of gold expelling silver, or a paper currency properly limited and protected, expelling either or both gold and silver. The ratio adopted as the basis of coinage may, under extraordinary circumstances, op- erate to expel the undervalued metal ; but The Gresham J.azu. 39 the effect of ratio has been much exaggerated and misrepresented ; and as ratio is not in- volved in the Gresham Law, it will not be discussed here. CHAPTER XIII. GREAT BRITAIN GUARDS HER USURY. The interests of English creditors are plainly opposed to any movement calculated to raise the value of silver relatively tt> gold. 1 The maintainance of the gold standard in the interest of the creditor classes lies at the foundation of the silver question, not only in Great Britain, but in the United States. That this should be true in Eng- land, where the moneyed aristocracy is se- curely intrenched behind forms of law, sanc- tioned by usage, and which recognizes no duty, or obligation to protect the rights of the productive industries of the people, need not suprise the student; but for the people of the United States, where the people are the source and origin of power, who are a productive and at present a debtor people, to adopt such a system is beyond reason, suicidal and destructive. The interest of the moneyed aristocracy are not the interests of the productive peo- ple of the United States. The English bond- 1 Encyclopedia Brittanica, vol. 16, page 73S. Great Britain Guards Her Usury. 41 holder's interest is in usury, low prices, and consequent debt. All the discussion in Eng- land, in and out of Parliament, where the proposition that England shall re-establish the coinage of silver, making it a full legal tender money, is considered; the opposition rests exclusively upon the fact that to do so, would raise the value of silver relatively to gold, to the disadvantage of the English .creditor. Very early in colonial history English policy was directed towards exploiting the industries of the American people. Acts of Parliament required that the colonist should use only English ships, that purchases of all goods should be made in the English market; that manufactures should be discouraged, if not forbidden. "That the planters should not be put under too great difficulties, but should be encouraged to go on cheerfully, because of the high rate of interest they paid which was very considerable." 1 From that time to the present, England has missed no opportunity to look sharply in support of the volume of interest to be paid her people; and to protect that usury is the 1 Speech of Hon. John P. Jones, Oct. 14-30, 1893 Pa?e 224. & 42 Great Britain Guards Her Usury. supreme object of English policy in its legis- lative enactments to-day. The British Royal Commission states the motives clearly. It says: ' It must be remembered, too, that this country is largely a creditor country of debts payable in gold, and any change which entailed a rise in the price of commodities generally, that is a diminution of the pur- chasing power of gold — would be to our dis- advantage." 'The interest of our Australian and other colonies, at which we have already glanced, must also be considered. Their deposits of gold are one of the principal sources of wealth, and any measure which tended to check gold-mining or to depreciate that metal would, in all probability, injuriously affect the prosperity of the colonies, and re- act upon the trade of the mother country with them." In February, 1893, Mr. William E. Glad- stone, then prime minister, made a speech in the House of Commons, upon a motion made looking towards the re-assembling of the Brussels Conference and to the restora- tion of silver money. Mr. Gladstone said: ' England is the great creditor of the credit- or countries of the world; of that there can Great Britain Guards Her Usury. 43 be no doubt whatever; and it is increasingly the great creditor of the countries of the world. I suppose that there is not a year which passes over our heads which does not largely add to the mass of British invest- ments abroad. I am almost afraid to esti- mate the total amount of the property which the United Kingdom holds beyond the limits of the United Kingdom; but of this I am well convinced, that it is to be counted by tens or hundreds of millions (pounds sterling). " One thousand million would probably be an extremely low and inadequate esti- mate. Two thousand million, or something even more than that, is very likely to be nearer the mark. |"Hear! Hear!"] I think under these circumstances it is a rather seri- ous matter to ask this country to consider whether we are going to perform this su- preme act of self-sacrifice. I have a pro- found admiration for cosmopolitan princi- ples. I can go a great length in moderation I laughter] in recommending their recogni- tion and establishment, but if there are these two thousand millions or fifteen hundred mil- lions of money which we have got abroad* it is a very serious matter as between this country and other countries. 44 Great Britain Guards Her Usury. " We have nothing to pay them; we are not debtors at all; we should get no comfort, no consolation out of the substitution of an inferior material, of a cheaper money, which we could obtain for less and part with for more. We should get no consolation, but the consolation throughout the world would be great." Much more might be quoted from the speeches of the "Grand Old Man," who is solicitous about the usury to be received upon these millions of sacred pounds sterling. He fails to realize the distress in the agri- cultural and manufacturing districts of Eng- land. He sees only the benefit to the owner of pounds sterling investments ; and he is willing, nay, he insists that the industrial and productive interest of every debtor nation shall be pirated in order that English usury shall be protected. The Grand Old Man, in his" anxiety to worship the golden calf of English idolatry, and to secure the favor and support of that aristocracy which fattens upon usury, repudiates and reviles, as un- worthy of notice, any productive interest of the English people. He treats them as im- material, unimportant, as of no use or bene- fit to the body politic. What matter that the Great Britain Guards Her Usury. 45 cotton spinner suffer the loss of millions of pounds sterling (in this case they are not sa- cred) in attempting to compete with the cot- ton spinner in silver standard India, China, and Japan? What matter that the English farmer is crushed by the low price of wheat grown in silver standard countries? What matter that poverty is increasing everywhere x What matter that any or all these evils which work the destruction of governments, peo- ples, nations, which exist only by reason of bad laws, or the bad execution of good laws, shall rest like a nightmare upon the English people? What matter ? says this grand old humbug, this disgrace to statesmanship ! 2 What mat- ter? We must protect the usurer ! Pounds sterling invested in usury are very sacred. Pounds sterling invested in productive in- dustries, which furnish employment to the English people, are of no account, unworthy 1 "Clearly then, whenever you see paupers in a state somewhere in that neighborhood there are hidden away thieves and cut-prices." — Plato. 2 "The true patriot (statesman) in a democracy, ought to take care that the majority are not too poor, for this is the cause of rapacity in the government."— Aristottle-Politics. To encourage and protect the productive industries of a people is the highest type of statemenship under any form of government. 46 Great Britain Guards Her Usury. to be mentioned in connection with the di- vine right of usury. The British Royal Commission, in 1887, answering the argument "that low prices and dear money help the wage earner," said : "That a fall in prices benefits the capital- ists WHO HAVE LENT MONEY FOR FIXED PERI- ODS AT A FIXED RATE OF INTEREST, and in Such cases a smaller share of the product of labor is left to be divided between the producer (manufacturer) and the wage earning class- es. Here again it is interest, usury, that is benefited by falling prices, and the wage earner injured. And as long as English gatherers of usury can secure gold in payment, and purchase American products at gold prices, just so long will the American people be bondslaves to the gold power, and will also cease to be their own masters, by reason of constant de- cline in prices of exportable commodities, and as constant increase in the volume of debt. CHAPTER XIV. • SILVER, WHEAT, COTTON. The low price of silver operates as a premium to the growth and export of wheat and cotton in silver using countries. In June, 1886, there was held in London, England, a meeting of the British and Col- onial Chambers of Commerce, at which the silver question, and its effects upon Eng- lish and Indian commerce was discussed at length. In the course of that discussion, Sir Rob- ert N. Fowler, an ex Lord Mayor of London and a banker, said : 'That the effect of the depreciation of silver must finally be the ruin of the wheat and cotton industries of Ameri- ca, and be the development of India as the chief wheat and cotton exporter of the world." Mr. Fowler did not explain the details by which the wheat and cotton growers of America were to see those great staples shrink in price until there would be no profit to the producer ; but he spoke with profound knowledge of the laws of money which oper- 48 Silver, W lie at, Cotton. ate upon the great industries of the com- mercial world. The advocates of the gold standard ve- hemently assert that there is not, and cannot be, any intimate relation of cause and effect upon the market price of wheat and cotton dependent upon the market price of uncoined silver, 1 and enter into absurd and impossible comparisons to prove their claims. Mr. Mulhall, the English statistician, asserts that because the manufacture of steel pens has been largely increased while the selling price is much lower, therefore the cost of produc- tion must control the selling price of all com- modities. Other equally absurd or incom- petent claims are made in an attempt to prove the impossible. To state the case with the utmost fair- ness, it is not claimed that the London price of butter, eggs, poultry, apples, are directly affected or controlled by the bullion price of silver ; nor are the prices of other articles of commercial importance, but which do not come in competition with articles of similar nature and of equal quality produced in In- dia, such as Indian corn, oats barley, rye, 1 It is silver bullion, not silver money, that is under con- sideration. Silver, Wheat, Cotton. 49 and generally all meat products. These ar- ticles come under the head of general com- modities, and are affected by the general range of prices ; which are in turn controlled by the money volume available in mercantile transactions. London, or England, is the market in which is offered all the surplus wheat and cotton grown in the world, and it is the price of this surplus that fixes the price of the en- tire product. No economic question more directly af- fects the great mass of the American people than does the price of wheat and cotton. These are the great staples upon which we depend to keep the balance of trade in our favor, and with which to pay the ever in- creasing burden of interest upon bonds and other evidences of debt. The silver question is embodied in the wheat and cotton question, and the silver question cannot be fully understood until the wheat and cotton question is solved ; and if the low price of silver is operating to de- stroy the wheat and cotton industries of the United States, it is high time that the proper remedy was applied. Mr. Fowler's opinion was given in 1886. 50 Silver, Wheat, Cotton. In the same year, Mr. Manning, then Secre- tary of the Treasury of the U. S., in his sec- ond annual report said : "It is a direct consequence of the mone- tary dislocation that wheat of India, which there fetched three rupees 1 per quintal four- teen years ago, and there fetches three ru- pees per quintal to-day, can be sold in Lon- don for as little as the gold price of three rupees to-day — a fall of 25 per cent. This lowered price of wheat in London has had to be met by a lower price of the American wheat in London. * * * The price of our surplus wheat determines the price of the whole wheat crop of the United States, so that the money dislocation has already cost the farming population, who number nearly one-half the total population of the United States, an almost incomputable sum, a loss of millions upon millions of dollars every year." The secretary realized that wheat, bought with silver in India and sold at the g"old price of wheat in London, was disastrous to the American wheat grower. Mr. Bagehot, for many years editor of 1 The standard silver coin of InJia, worth, at $[.29 per fine ounce, 0.47 37-100 cent. Silver, Wheat, Cotton. 5 I the London "Economist," in his work on the Depreciation of Silver (page 54) says : "The necessary effect of a depreciation of silver as against gold, is to give a bounty on exports from India and other silver-using countries to England. An English merchant can now buy more rupees than he formerly could with the same number of sovereigns, and therefore he can import from India, though prices at Calcutta are not at a level at which it would have paid him to operate if he had not had that novel facility in get- ting rupees." 1 We cannot well complain that the Eng- lish merchant avails himself of "that novel facility in getting rupees ;" but it is our right and duty to complain, and to insist that such "novel facility" shall not longer disgrace the legislative and financial policy of this na- tion. With reference to the effect of the com- petition of India on the prices of American and English wheat, the British Royal Com- 1 In 1873 the g°ld price of one ounce of silver was 129.29 at U. S. coinage ratio. In 1894 the gold price of an ounce of silver was 063.479. This premium of 065. Si 1 per bushel on wheat grown in India results from that novel fa- cility in obtaining rupees. The same premium applies to cotton and to all other products from India which come in competition with like articles exported from the United States. 52 Silver, Wheat, Cotton. mission on gold and silver, in 1887, exam- ined a number of witnesses, among them Mr. J. Shield Nicholson, professor of politi- cal economy at the University of Edinburgh, and one of the most distinguished econom- ists of Great Britain. The following ques- tion, which is precisely to the point, was put to the professor by a member of the Com- mission : "Indian wheat is the very wheat com- plained of by Secretary Manning, Secretary of the United States Treasury, as having lowered the price of European and Ameri] can wheat, and he attributes it all to the di- vergence of gold from silver. You do not think tying gold and silver again would raise the price of English and American wheat by 25 per cent ?" To which Prof. Nicholson replied : "Now it seems to me probable, if the price of silver rose to its old level, wheat could not be profitably exported from India until prices rose in a corresponding degree. For India, being a silver country, the price of wheat there is independent of the. relative vahie of gold and silver. An exporter to England at present will give the Indian price in silver, and he can buy his silver for less gold, and Sliver, Wheat, Cotton. 53 thus competition will lower the price. If the price of silver rose, the exporter from India must get more gold. Thus a rise oj sil- ver would, on this view, raise the price of wheat to a corresponding degree." 1 On the same subject, Prof. Nicholson fur- ther says, in a recently published treatise on Money, and Essays on Money Problems, page 229 : "Now consider the export trade of India, with wheat for the example. Every fall in silver acts like a bounty on the production of wheat in India, and the area under culti- vation is rapidly extending. But again, sup- pose that silver ceases to fall and that silver prices begin to move upward. The Indian producer, in this case, will require more gold than the Western producer; he wants not only the same number of rupees, but more ; and then he can only afford to sell for more gold. But if gold prices rise the West of America and the Lothians of Scotland may again find it profitable to grow wheat, and the Indian producer may suffer.'"'' "The 'monetary dislocation,' of which Secretary Manning wrote, is the variation in t Hon. John P. Jones, Oct., 1893, page 394. 2 Hon. Joseph C. Sibley, Jan. 8, 1895, page 20. 54 Silver, Wheat, Cotton. exchange between England, a gold standard country, and Asiatic silver standard coun- tries, a dislocation which accompanied silver demonetization in 1873 and has existed ever since. The main cause of it is what Mr. Gladstone calls the 'perversity' of the rupee, the standard silver coin of India. It was sup- posed to be a universal rule that a depre- ciated currency resulted in increased prices, but the rupee was so 'perverse' that it re- fused to be depreciated, in fact never has been depreciated in India, and prices, con- sequently, have not risen. "The fall in the price of silver bullion in London has never depreciated the rupee in India. It buys just as much now as it ever did, so that the Indian wheat and cotton grower can afford to and does sell his crop for no more silver than twenty years ago, but that same silver can be bought in Lon- don for fifty per cent, less than in the year 1873." The English dealer gets his cotton and wheat from the East Indian for fifty per cent, less gold now than in 1873, while the East Indian sells now and all the time for the same price in silver — an ounce of silver, no matter what the gold price of it may be, Silver, Wheal, Cotton. 55 buying as much in India in 1894 as it did in 1873- In 1893, General Warner, president of the American Bimetallic League, published a circular containing an analysis of "Silver in its Relation to Wheat and Cotton." In it he said : "We have the highest authority, includ- ing that of two Royal Commissions, for the statement that the Indian rupee will to-day buy, in India, as much land or labor, or as much of any product, as it would twenty years ago, or at any other period in recent times. "As a rupee contains 180 grains of silver, an ounce of silver will make a little over 2^2 rupees. For a long period, and continuing to the present time, 2% rupees (1^ for the wheat and 1 for transportation) would buy a bushel of wheat in India and lay it down in Liverpool. At our ratio of 16 to 1, an ounce of silver is worth in gold $1.2929 ; that is, with silver at par with gold on our ratio, a pound ster- ling will buy silver enough to make almost exactly 10 rupees and the 10 rupees will lay down in Liverpool 4 bushels of wheat. "With silver at 85 cents an ounce, a pound 56 Silver, Wheat, Cot 'ton. sterling will buy very nearly 6 ounces of sil- ver, or enough to make 15 rupees ; and the rupee price of wheat being the same in In- dia, 15 rupees will lay down in Liverpool 6 bushels Indian wheat, or a bushel for an ounce of silver. 'Therefore, when silver is 85 cents an ounce, unless the wheat grower in the United States will deliver 6 bushels of wheat in Liv- erpool for a pound sterling, the Liverpool merchant will go to India for his wheat, and as cost of transportation from India is re- duced, so much more wheat can be delivered for an ounce of silver. "On the other hand, if silver was at par, or $1.29 an ounce, the wheat grower in the United States would have to deliver but four bushels for a pound sterling. "Six bushels of wheat delivered in Liver- pool for a pound sterling is equivalent to about yS cents in New York, or say 69 cents in Chicago, while four bushels for a pound sterling in Liverpool is equal to $1.19 in New York, or $1.10 in Chicago. "Another way of stating the same thing is the way it was stated by Moreton Frewen, in his address before the Second Silver Con- vention at Washington. An ounce of silver Silver, Wheat, Cotton. 57 bullion will always buy a bushel of wheat in India and pay transportation on it to Liver- pool. Hence the American farmer must also lay down his bushel of wheat in Liverpool for an ounce of silver bullion. If this ounce of silver is worth but 85 cents in gold, then all the farmer can get in gold is 85 cents less the cost the transporting the wheat to Liver- pool. Therefore, if the farmer will deduct the cost of transporting a bushel of wheat from Chicago to Liverpool from the price of an ounce of silver, he will have very nearly the price of a bushel of wheat in Chicago. "Assuming the cost of sending a bushel of wheat from Chicago to Liverpool, includ- ing storage, insurance and brokerage, to be 15 cents, and silver to be worth 85 cents an ounce, then wheat in Chicago would be worth 70 cents. But if silver were at par, as it would be under free coinage, an ounce of silver would be worth $1.29 and a bushel of wheat in Chicago would be worth $1.29, less the cost of sending it to Liverpool, or about $1.14. "Hence, as silver rises above, or falls be- low, 85 cents an ounce, so will wheat in this 58 Silver, Wheat, Lotion. country rise above or fall below the prices above stated. "From the above it will be seen that while the Indian farmer gets the same price, in rupees for his wheat now that he got twenty years ago, the American farmer gets not quite two-thirds as much, and the consumer, or the middleman, gets the difference. In 1873 India exported only 730,485 bushels of wheat; in 1892 India exported 59,000,000 bushels. "Any one can figure up the loss to the American farmer. It amounts to from $160,- 000,000 to $220,000,000 on the wheat crop of a single year. "The effect on cotton and cotton manu- factures is the same as on wheat. An Indian rupee will buy about 4 pounds of cotton, and pay transportation to Liverpool. As an ounce of silver makes 2% rupees, an ounce of silver will buy io pounds of cotton and lay it down in Liverpool. With silver at $1.29 an ounce, a pound sterling will pay for 40 pounds of cotton delivered in Liverpool. A pound sterling for 40 pounds of cotton in Liverpool, would be about \2 Y / 2 cts. a pound for the American planter. At 85 cents an ounce for silver, a pound sterling will buy Silver, Wheat, Cotton. 59 nearly 6 ounces of silver, which, converted into rupees, will pay for 60 pounds of cotton delivered in Liverpool. Sixty pounds of cot- ton in Liverpool for a pound sterling is about 8 cents a pound there, or about 6}£ in Mem- phis. A large cotton crop in India, or a short crop here, will, of course, vary these relations somewhat, but the general effect of the fall of silver is under-stated rather than over-stated." The market prices of wheat and cotton have fully proven that the constant depreci- ation of silver operates as a premium to the growing of wheat and cotton in India, and in the silver using countries. □ If further evidence were needed that there is an intimate and uniform relation between the gold price of silver bullion, and the prices of wheat and cotton, the annexed table of average prices for twenty-one years in groups of five years should be conclu- sive : 1873 .... 1874' 1878^' •••• 1S79I 1883 j •••• 1884/ 1888 f •••• k'HEAT. Cotton. Silver. I.3I .. .. 18.8 .. 1.29 1.26 • • i3- 2 4 •• l.20}4 1. 15 .. . . 1 1 .00 IA2}4 .90 S . . . . 10.06 . . .99 20 60 Silver, lf r /ieat, Cotton. ';r s niillion bushels; while in the teeth of this deficient supply the average price on the total crop declined 50 per cent. Why? The answer has been fully given in "Silver, Wheat and Cotton," and 'because we are supplying the Orientals with silver at half price, which money has there maintained its purchasing power; while, at the same time, if we wish to continue our exports to two- thirds of the human race, we must either sell our goods at half-price, or see our manufac- tures and commerce swept out of existence by the yellow man with the white metal." Nor should the wage earners in the Unit- ed States — those directly engaged in the manufacture of goods — fail to realize the The Yellow Man With The White Metal. 1 1 7 immense importance to them involved in this cheep rupee. Here are millions of people, patient, in- dustrious, imitative, equipped with the best machinery of American and English manu- facture, willing to work from twelve to six- teen hours a day for one cent an hour to two cents an hour for skilled labor. How long can the American workingman expect to maintain a rate of wages of 25 cents an hour with a working day of eight hours ? Think this problem out in all its bearings upon the productive industries of this na- tion, and tell, if you can, of any other reme- dy than to restore silver to its normal con- dition as a money metal, thereby doubling the cost of silver to the operators in Asiatic manufactures. CHAPTER XXII. GREAT AS IS THIS REPUBLIC IT CANT CREATE MONEY. (Secretary John G. Carlisle's Speech at Banquet in N. Y., 1894.) "Time was, whoa the brains were out the man would die and there an end."— Shakespeare. "Great as is this Republic it can't create money." This assertion shows such mental incompetency to comprehend, to appreciate the source from which money receives its function, as well as the power through which it is created, that it were charitable to sup pose that the Secretary's brain had reached such a point of obfuscation 1 that he had lost the faculty of appreciation of the ethics of money. "Great as is this republic it can't create money ! !" Why ? This, like all administrative ut- terance upon the question of money and finance, asserts but does not prove the asser- tion. The truth is that the sovereign power of the nation, the Republic, is the only au- thority through which money can be created. 1 His head like smoke-jack, the funnel unswept and the ideas whirling round and round about in it, all obfuscated and darkened over with fuliginous matter. — Sterne. This Republic Cant Make Money. 1 19 The doors of the prison swing inward on easy hinges to admit him who ventures to fabricate anything in the form or semblance of money, unless he be vested with national authority to do so. The existence of the mint, the existence of national bank charters, both of which come within the department of the Secretary, of the Treasury, are sufficient proof that Mr. Carlisle, in this remark, was a long way from expressing the truth in relation to the power to create money. The United States Constitution expressly imposes upon Congress the duty to create money, and as expressly forbids the creation of it by any other authority ; and Congress has assumed and performed up to 1873, the duty of creating money out of the constitu- tional money metals. The Supreme Court has also recognized the sovereign power vested in Congress to create money. It has also upheld all legislation by Congress in- tended to protect the national coins from impairment by counterfeiting, clipping, or in any way mutilating the money created by the sovereign authority. It must be admitted that the Secretary's language is wanting in that precision of state- 1 20 This Republic Cant Make Money. ment, in that unquestionable truthfulness which should characterize the public utter- ances of officials high in authority, when speaking to the people upon questions of grave national importance, and Mr. Carlisle could not be ignorant of the fact that the national, the sovereign power, is the only source of authority by or through which money can be created. 1 1 If the power to declare what is money is not in Con- gress it is annihilated.— U. S. Supreme Court, 12 Wal- lace, page 514 CHAPTER XXIV. SECRETARY CARLISLE'S LATEST REMEDY EOR EXISTING FINANCIAL EMBARRASSMENTS. In an interview given in the New York Sun," of December 28th, 1895, the Secretary s credited with the following assertion : "I am satisfied that there is but one per- nanent remedy for our financial embarrass- nents and that is legislation providing for he retirement and cancellation of the legal ender notes." This dictum of Mr. Carlisle's is not only :rroneous as to the proper remedy to be ipplied, but it also fails to realize the causes vhich have produced "existing financial mibarrassments." Retirement and cancel- ation of the legal tender notes, issued by he government, will afford no remedy for existing export of gold, nor for the continu- ing embarrassments of the productive in- lustries of the country. Gold goes out to >ay interest and debts, including imports of roods purchased in Europe. Exports of Vmerican products, while large in volume or [uantity, are, owing to the gold standard, so ow in price that it does not pay interest 1 2 2 Latest Remedy. dividends and purchases of goods, and this excess of unpaid balance becomes a sight draft upon products of farm, factory and gold mines. The result is, that the United States has to pay in Europe more money, gold, than the prices received for all our exports, hence export of gold; and the retire- ment of the legal tender notes, will not only offer no remedy, but will intensify the de- mand for gold, resulting in a further decline in the gold prices of all the products of American labor and the bankruptcy of all those who are in debt. For the year from June 30, 1894, to June 30, 1895, the excess of merchandise exports over imports was $6 1 ,440,01 5 ; excess of gold exports over imports, $30,981,449; excess of silver exports over imports, $37,664,797; to- tal excess for year, $130,086,261. Notwithstanding this large excess of ex- ports our debt to Europe increased during that year about 270 million dollars. This great deficit must be paid in gold, or in the products of the farm and plantation, at prices so much below the prices of the same pro- ducts of other countries as will induce the foreign creditor to take of us commodities instead of gold. Latest Remedy. 123 To apply Mr. Carlisle's remedy under ex- isting conditions of debt, of general depres- sion, would be in the highest degree crim- inal ; and the conspiracy panic of 1893 would be forgotten in the cyclone of destruction which would follow such contraction of the currency volume. 1 The Secretary's remedy for the financial embarrassments of 1892-3 was the repeal of the Sherman silver purchase act. He then claimed that that act was responsible for all the financial ills which have so persistently followed the attempt to place the country on the gold basis, There was then no hint that the "legal tender notes" contributed to the financial embarrassment. It was the pur- chase of silver that lay at the root of the evil. Do away with that, and all will be well. The evil complained of remained ; like Banqo's ghost, it would not down. Prices declined. The volume of debt in- creased. Gold continued to go out in pay- ment of debts. And the Secretary has dis- 1 The contraction of the currency by five per cent, of its volume means the depreciation of the property of the country Three Thousand Millions of Dollars. — Senator Plumb, of Kansas, March 26th, 1888. "Congressional Rec- ord," part 3, 150th Congress, first session, page 2395. 124 Latest Remedy. covered that the only cause was, has been, and now is, "the legal tender note." The total volume of these legal tender notes amounts to about 486,264,296 dollars, consisting of 346,681,016 greenbacks, and 139,563,280 treasury notes issued in the pur chase of silver. To withdraw such a sum from the present inadequate money and cur- rency supply would close every savings bank, every national bank, every trust company, every railroad, every insurance company, ev- ery manufactory, every store. Bankruptcies would prevail, no business could be done, and prices would fall to a point never before reached in our country's history, and civili- zation and progress would become as a dream, yet such is the blind subserviency of the administration cuckoos, that all the dis- asters which follow unusual contraction of money and currency volume are set at naught, laws disregarded and theories substituted in derogation of the sovereign will of the peo- ple. Nowhere in the United States laws is there a legislative shall, or a legislative may, in relation to the Treasury Department maintaining a gold reserve of 100 million Latest Remedy. 125 dollars. The people have declared through congressional resolutions, "that to pay the principal and interest of the public debt in silver dollars, would not be in violation of the public faith or in derogation of the rights of the public credit," and Mr. Carlisle voted for that resolution. Notpnly does Mr. Carlisle refuse to pay the public credit in silver, but when the law expressly gives to the government the option to pay in silver, or gold, he surrenders that option to the creditor; he does more than that, he insists upon paying in gold, thereby inviting, aid- ing and encouraging the drain of gold, and then whines out the miserable subter- fuge, that the legal tender note is the cause of all the financial embarrassments, which effect the productive industries of the peo- ple. With a reasonably honest man as Secre- tary of the Treasury, one who would respect and execute the laws of the nation, in rela- tion to national finances, all the evils of which Mr. Carlisle complains would van- ish. There would be no more bonds add- ed to the public debt; there would be no more surrender of the power and duty of 1 26 Latest Remedy. the department to a brokerage syndicate. The majesty of the law would prevail and the nation's resources be honored and re- spected. CHAPTER XXV. UNITE OR DIE. (Franklin's advice to the American Colonists in 1754.) If it were necessary that the American colonists should, in 1754, unite for the com- mon good, for self-preservation, for the en- joyment of the rights of self-government : to us, their successors, responsible for the preservation of popular government, the day, the hour, has come when the people must lay aside their prejudices, their party subserviency, and unite as one man to re- store the government upon the great prin- ciples established and administered by the fathers — by Washington, Jefferson, Madison, Jackson, and Lincoln — which is a govern- ment for all the people upon the one common basis of Liberty, Equality, and Justice ! The struggle of people to be free, to en- joy the blessings of liberty, equality, and justice, has been growing with the years since Christ declared for the liberty of mankind and sealed his devotion to that cause with his life's blood upon the hill of Calvary. The American people are called upon for no such supreme sacrifice. They have 128 Unite or Die. only to unite; to lay aside partisanship, and put on patriotism ; to accept the essential things which make for the good of all ; and lay aside those non-essentials, upon which they are divided. The Republic was established by such wise and patriotic concert of action. The Republic has been maintained by no other course. If the Republic is to endure, the people must unite ! must assert their power at the ballet box, in order that those blessings which the fathers bequeathed as an imper- ishable legacy to us, may be transmitted to future generations to the upbuilding of hu- manity, the maintainance of justice, and the glory of God. The situation demands a more exalted manhood ; a higher patriotism ; a broader charity ; a clearer grasp of truth ; the subju- gation of greed ; dispensing with the envi- ronments of old party lines, and uniting; that the Republic may enter upon a new life, which shall be as a beacon lighting the na- tions of the earth onward and upward to perfect peace. Objections and Answers. OBJECTION NO. ONE. "If silver is to be placed on an equal footing; with gold, there must be adequate means of main- taining; the parity." PARITY — WHAT IT IS AND WHAT IT IS NOT. Before we can intelligently discuss the philosophy of parity, in a monetary sense, we must arrive at what is meant by parity. Par- ity means equality. The coins to be fabri- cated of silver must be in every respect the equals of gold coins, in their rights of mint- age and in legal tender. This is essential to parity ! Without it no element of parity ex- ists. To speak of a parity between coins of gold, fabricated at the mint freely, in un- limited quantities and gratuitously, for all who deposit gold metal for coinage, and such coins a full legal tender; and of coins of sil- ver, where the metal is not coined freely to 130 Objection Que. all comers, and which coins are limited in their legal tender, is in violation of the ethics of parity. THERE MUST BE equal rights of coinage, equal function as money, before the elements of parity exist, in relation to coins of silver and coins of gold ! "But," says some one, "when the gold coins are melted into bullion, the bullion is worth, sic, as much per ounce as it was in the coins, provided you have it in sums over one hundred dollars:" And seem to infer from that fact that there is some quality in the gold that is not found in the silver ; for it is asserted that silver coins, melted into bullion, are worth, sic, less than fifty cents on the dollar ; and this is offered as evid- ence of some quality lacking in the silver. The only element lacking is justice, equality. The reason, and the only reason, WHY the gold bullion has a fixed and unchange- able value (market price) per fine ounce is, because it is received at the mints, and coined into money, for the use and benefit of the depositor. Silver bullion is not now so received and coined, hence the crucible test, the test of the melting-pot, as it is termed, is only an indictment against the ( Objection One. J.V government that treats its coins in a manner so dishonest, so destructive to the business interest of the people. Open the mints to the coinage of silver upon the same terms that gold is coined, and the coins of both metals a full legal tender, and "parity" is at once restored, and the market price of the bullion metal is as unchangingly fixed as is that of gold. That such would be the fact there is the most conclusive proof. Take the fifty years 1823 to 1873, before silver was deprived of free coinage and of true money function. The Director of the Mint, Report Produc- tion of Gold and Silver, 1893, P a g e 2 5 T » shows that the market ratio of silver changed in those fifty years from lowest to highest 74-100 of one per cent., or from 15.93 in 1843 to 15.19 in 1859. In 1873 it was J 5-9 2 - Now as to production and quantities of silver and gold, and the quantity ratio between them. From 1800 to 18 10 there was in the world 33.6572 silver to 1 gold; from 1810 to 1820, 34.0602 silver to 1 gold; from 1850 to 1890, 19.7481 silver to 1 gold. Here is a change in quantity ratio of nearly forty per cent., which had no greater effect upon the mar- ket price, or ratio, than 74-100 of one per 132 Objection One. cent. This constant unchanging price of silver and gold bullion was due to the fact that the mints were open to the coinage of both metals, and that coins of both metals performed the money function — legal ten- der. The mints of the United States are open to the coinage of all the gold of the world, at the rate of $20.67 f° r each ounce, and were no other mints open to the coin- age of gold, the price, or market equivalence of gold metal, would still be $20.67, l ess the cost of carriage to the United States mints. Why ? Because the United States converts the bullion into money ; and the people of the United States will sell, or exchange, any- thing they possess for money. But this fact brings no gold for coinage. Therefore as soon as the mints of the Unit- ed States are open to the coinage of all the silver of the world at the rate of $1.29.29 for each ounce, and the dollars, armed with the money function; when that is done, every ounce of silver bullion on the earth's surface available for coinage, becomes fixed at the price of $1.29.29, less the cost of carriage to the United States. Why ? For the same reason that gold has its unchanging price. It would be converted into money, and the Objection One. 133 people of the United States will sell or ex- change anything they possess for money ! But this fact will bring no silver for coin- age. Parity of coins will be maintained by legal tender ; full, complete. Parity of metals with coin, can only be maintained by abso- lute justice, by freedom of access to the mint. "For in a country in which the coin- age of silver is free, the commercial value of silver, expressed in silver, can never widely depart from its coinage value, it be- ing optional with the owner of the metal to export it or have it coined." 1 Neither a parity in coins, or a parity of uncoined metals, can be preserved by re- demption of the degraded coins in the leg- ally preferred coins. Parity will be maintained by exact equal- ity of right, duty, and function, and -any- thing less than this is destructive to parity, is a fraud, a delusion, and an impossibility. 2 1 See Report Director of Mint, Production of Precious Metals, 1893, P a S e 2I 3- 2 "Parity may be maintained and every declaration of governmental policy fully met by accepting for all dues, public or private, including duties upon imports, silver and paper issues of the nation of every description whatso- ever." — Hon. Joseph C, Sibley, speech, Jan. 8, 1895, page 9. OBJECTION NO. TWO. "Practically there is not a bi-metallic nation on the face of the earth to-da}'." Whether or not there is a bi-metallic na- tion "on the face of the earth to-day" (1895), is not the question under discussion any- where, and whether true or not, has no weight in an argument wherein the restora- tion of the laws of the Republic, as they ex- isted from before the adoption of the Con- stitution and up to 1873, is the issue. By the Constitution of the United States, silver and gold are equally money metals. By existing laws it is a bi-metallic nation. The people are deprived of their rights by dispensing with statutes, and the forced and unwar- rented construction put upon acts of Con- gress by Executive and Department officials, or by unconstitutional enactments. Bimetallism 1 consists in part in the right 1 The monetary standard is bi metallic when by law gold and silver are legal tender in full at a fixed ratio, and both coined to all comers without limitation. — Cernuschi Nomisma on Legal Tender, D. Appleton etc., N. Y., 1877. Object i o?i Two. 135 to use, the power to use, coins of silver or of gold, one or both, in the payment of all debts, all money contracts, and the redemption of all currencies. It is not material whether there are more coins of one metal than of the other in visible use. I think it was Count Wolowski who compared bimetallism in relation to money and price, to the com- pound pendulum, where, by the unequal contraction and expansion of metals, the length of the pendulum rod is maintained constant, and the uniformity of its motion preserved. The mechanism of this opera- tion is invisible, insensible, but the metals are there, and whether they both at any time carry equally the weight of the pendu- lum is entirely immaterial. So it is the vol- ume of money available for daily use in pay- ing debts and making purchases, that stead- ies prices and builds up industries. The ma terial of whfch money is made performs no money function. That function is created by positive law. Bimetallism in the United States would practically double the volume of primary debt paying money. It would decrease the volume of credit devices, which the people are compelled to use as substitutes for money, V i 3G Objection Two. which would relieve the people from a par* alyzing burden of interest paid for the use of these credit devices, these substitutes for money. These panic-breeding corporation promises to pay in money which does not exist, which cannot be obtained. Promises to pay, which are a lie upon their face, and a fraud upon industry. "Promises which undertake to exceed the limitations of na- ture and surpass the bounties of God." 1 l "Shy lock," by Gordon Clark, page 18. OBJECTION NO. THREE. "How can it (Free Coinage of Silver) be adopted without putting- this country on the monetary basis of the semi-civilized countries of South America and Asia?'' "The value of money is not in ite substance, but in the legal force with which its substance is armed by positive law."'— Steck's Axioms No. 14. If the question stated above carries with it by implication the assertion that, because of the free coinage of silver, or through the use of silver as the standard, or primary money ot a country, that country, by reason of its use of silver as its basis of money, will be thereby, and necessarily, reduced to the condition of civilization, material progress, literature, science, and invention "of the semi-civilized countries of South America and Asia" at the present time. Or if the question is intended to assert, that the pres- ent conditions of the peoples referred to, are due alone to the silver basis for money, it is of far reaching and immense import- ance. If the question doesn't mean all this what does it mean ? 138 Objection Three. Analyzed in the light of history and ex- perience, and applying the rules of mone- tary science to the duties and functions per- formed by money in the affairs of men, and the effect which its volume available for such uses has in developing and promoting the natural resources of a country;. in building up its industry at home, and extending its trade, both domestic and foreign, we find that : All countries, peoples, nations, have by slow progression ascended from a condition of semi-civilization, and in that upward pro- gress money has been a "most convenient ^expedient," a most important agency. Historically, from the day when Abra- ham paid silver money for a burial place for his dead wife Sarah, down through the ages, money, fabricated of silver, has been the agent which has moved the energies of the world in its upward and onward pro- gress. It is true that at certain epochs in the history of nations, immense progress has been made while using a bronze coin, or an irredeemable paper currency. It is true that great wars arc usually car- ried on by the use of a paper currency; and Objection Three. ['39 that out of great wars, usually great advance- ments in material prosperity are achieved. When the desolation, the barbarism of the dark ages rested upon Europe; when mankind were oppressed by poverty, the first ray of light, of relief, dawned with the opening of silver mines in Germany. And when the silver treasures of the new world were discovered, Europe experienced all the blessings of abundant money. Prosperity unheard of before fell to the lot of the mass of the people; all industries prospered, and civilization started on it up- ward and onward course. It is to the silver mines of the new world that civilization owes its past and its present progress. The Almighty, in his supreme wisdom, created silver with the gold — more silver than gold. There is more use, more need of silver than of gold. There are more poor than rich. 1 Silver saved civilization to the world ; let us retain silver to still further help hu- manity on its upward and onward struggles | 1 Of the seventy millions of people in the United States sixty-five millions of them make their daily cash purchases in sums of one dollar or under. 140 Objection Three toward that goal where there shall be jus tice and right between rich and poor, and debt and usury shall be as a vision of the dark ages. If the question under discussion carries with it the proposition that comparisons shall be made between countries with the single gold standard of money, and those countries using silver as the money stand- ard, we welcome, aye, we challenge the com- parison. Great Britain is the ideal gold standard realm. Its people are of the hardy, indomitable, inventive, energetic, aggressive, and progressive Anglo-Saxon blood, "whose drum-beat encircles the earth;" whose manu- factures, railroads, and educational institu- tions are fully developed, whose people are learned and skilled in literature, art and science; who claim to levy tribute upon the commerce and industry of the world. Surely here, if anywhere, are we to find the supreme advantages which follow the gold basis for money. For a country on the silver basis we name Mexico, whose population is largely composed of the native race ; whose chief executive is of that race ; whose industries have barely recovered from the effects of Objection Three. 141 the French invasion under Maximillian ; whose lines of transportation are but illy adapted to meet the requirements of its pro- ductions, due to its conditions of soil and climate ; whose people are inclined to be in- dolent, non-inventive and non-progressive. Now take the ten years, 1886 to 1895, both inclusive, and Mexico will show a steadily improving condition of all its industries, while for the same period Great Britain will show as constant a decline. England will show an increase in usury received by her money lending class, and she also shows an immense increase of poverty among her laboring-productive population. England shows a great decline in the selling price of her lands, and a decline in rentals of from one-half to two-thirds former rates ; yet the condition of her agricultural classes is dis- astrous beyond any comparison in recent years ; and most fatal of all to England's industries, her export trade shows an al- most crushing decline. Mexico, with her silver standard and free and unlimited coinage of silver, shows an immense increase of wealth among the com- mon people. She shows a large advance in the selling price of land. Mexico shows an 142 Objection Three. immense and constantly increasing volume of exports, increasing in two years some sev- enty million dollars. Her agriculture and manufactures are being stimulated and de- veloped in accordance with the law laid down in reply to Objection No. 5. If this is not sufficient, go to Egypt, a gold standard country, with its financial af- fairs administered by Englishmen and in the interest of English usurers. Where it used to take one bale of cotton to pay a debt it now demands three. The valley of the Nile is the most productive soil that the sun shines on. The people are patient, hard- working, frugal living, spending little in either food or clothing, yet absolute slaves to the English tax gatherer of sacred gold. Portugal is another shining example of a nation's industries paralyzed by the shrink- ing volume of money caused by the gold standard. I cannot recall any silver standard, silver using country, people, or tribe, where con- ditions are as bad as are those of Egypt, yet Egypt has the gold standard. In some of the South American States, revolutions, rebellions against existing gov- ernments, are of common occurrence, but Objection 11 nee. 143 that is due more to racial causes than to any question of standard for money. It is not the material of which money is made, or the monetary standard of a country that operates upon its industries, commerce, or civilization. It is the volume of money available for use, that influences industries, that controls prices, and if in sufficient quan- tities, new life, new vigor new development will surely follow. The people of the United States have nothing to fear from the restoration of the laws of the Republic as they existed prior to the adoption of the Constitution down to the treacherous and deceptive act of 1873 ; on the contrary though that restoration is their only hope of relief from being com- pelled to give three bales of cotton or three bushels of wheat, or three barrels of beef or pork or three day's labor where one of each would be all that justice, equity and good conscience could demand. OBJECTION NO. FOUR. "Upon the restoration of silver to coinage into full legal tender money; all gold (money and metal) would leave the United States." As the advocates of the single gold stan- dard for money have persistently insisted that such would be the result following the restoration of the rights of mintage to sil- ver ; and as these advocates are principally bankers and bank agencies, or such agenc- ies as are more or less dependent upon or employed by them, it might reasonably be expected that they would desire to prove that gold would leave the United States up- on the resumption of silver coinage, and that exportation of gold would follow. There would also be a withdrawal of gold from circulation through the same agencies, and for the same reasons. If domestic and foreign commerce, to- gether with the demand for money, were left to the operation of natural legitimate transactions in the usual course of the mar- Objection Four. 145 ket, the flow of gold to or from the United States would not cause any serious loss of that metal. If gold should be exported, it would be done for the purpose of creating such a monetary disturbance as would en- able the bankers to pirate the busines inter- ests of the country for mercenery purposes, as in the panic of 1893. x 1 New York, June 27, 1S93.— Henry Clews was of the opinion that the suspension of silver coinage in India ought to prompt President Cleveland to call congress together earlier than September. "There is every reason," he said, "why congress should be brought together at the very earliest possible day. The houses that were engaged, until lately, in shipping gold became so zealous in that enterprise that they tried to out- strip each other. The result was that more gold was ac- tually shipped than Europe required. The natural result must appear in the return of the surplus thus exported. Exchange is now fallen, indeed, to the specie importing point. As soon as our crops ripen there will be inevitably a return of a good deal of gold to the country. One of the arguments in favor of the repeal of the Sherman law has been that the baser metal has driven the finer metal out of the country. In a little while, with gold returning to us, the strength of that argument will be sapped. An early session of congress will leave the argument still in full force." Note the frankness of the admission that the standard argument that silver was the cause of the export of gold, was a known and realized fraud and lie, which would be exposed by gold returning to this country without the re- peal of the Sherman law, and that in order still further to 146 Object ion Four. But this condition could not be main- tained for any length of time, as will be shown in reply to Objection No. 5. use the lie, Congress must be called in special session at an early date, for, if delayed, gold would inevitably return and the treacherous falsehood be exposed. Study the state- ment carefully. OBJECTION NO. FIVE. "That the export trade of the United States would be lost and that imports would increase!" No act of Congress could so enlarge out- export trade as would the restoration of sil- ver to fr-ee coinage into full legal tender money. Why? Because the dollar would at once fall in gold value, which "pari pasu" lowers the rate of exchange, and exports are stim- ulated ; while at the same time imports must decrease. Again, Why? Because all imported goods must be paid for in the money of the coun- try where purchased — Gold. This payment in gold would make the imported goods so expensive that home manufactured goods would take the place of the imported. OUR SILVER DOLLAR AT A PREMIUM. "As the result of our silver money re- striction upon importations setting all out- spindles turning, employing operatives at full time, and these operatives made there- by to enlarge our aggregate of home con- I4§ Objection Five. sumers of all home products ; with our trade settlements in merchandise serving to en- large the exportations of our spare products; with Europe's prices for our products en- hanced by our enlargement of Europe's ag- gregate of money, our achievement next evident will be a credit of balance of trade established in Emrope for the merchants of the United States. At that point exchange on London sells in Wall Street at a dis- count. This means a draft on gold payable seven days from date offered at a discount in standard silver dollars — the despised, stig- matized 50-cent silver piece in Wall Street, held at a preminm over gold in London. It means our silver dollars and our gold coin at par ; bimetallism a reality in the United States. Our prosperity as her example, and to such a degree at her expense, is likely to enforce the influence of Manchester's opin- ion of English monometallism, the result of which may mean the abandonment by Eng- land of her vicious monetary system for bi- metallism universally. Europe's only silver is her money. Eu- rope's silver coin values silver from 3.06 cents to over 13.33 cent per dollar more than ours. Her "silver pots and spoons" carry Objectiom Five. 149 the additional price of labor in them. She will ship us gold, therefore, rather than sil- ver, at a minimum preference of over 3 per cent. But because we are Europe's "best source of supply' for our great surplus of staple commodities, Europe will buy of us, even though we do not buy of her. As, for in- stance, we buy from Cuba $75,000,000 worth of goods a year and sell to Cuba $12,000,000 to $25,000,000 only ; or as Brazil finds a mar- ket here for $70,000,000 of her commodities and buys $40,000,000 only, of our commodi- ties in return, and finally, as England on the contrary, is debtor to the United States for an excess of $100,000,000 a year by average in our mutual barter of commodities with her. 1 Lord Farrer of England, a member of the Hershell Commission and who signed the report of the gold men recommending the gold standard for India without a gold cur- rency, as late as July, 1894, says: "The government of the United States has only to revert to a silver standard itself, 1 W. P. St. John, President of the Mercantile National Bank of New York, before the Banking and Currency Com- mittee House of Representatives, December 15th, 1894. 150 Objection Five. and the dollar will at once fall in gold value, and the United States will reap the advan- tage of a lowered exchange in an immense increase of exportation to countries with a gold standard." 1 President Andrews of Brown University, in an interview published the 6th of April, 1895, upon the same subject said : "The im- mediate result would be a tremendous re- vival of business and restoration of depressed values. Money hoarded in banks would be turned loose. We should wrest from Eu- rope most of the trade with silver countries, our factories would be worked to their full capacity. All of our gold would pass to Eu- rope but we would not need it." This last statement means that exports from the United States would so largely increase in volume a?id price that it would more than pay the annual interest due Europe, together with the cost of imports, and that money would come to the United States. And as European money is gold, such payments would be made in gold, or gold exchange. The effect to follow the restoration of silver 1 Mark the words, "Immense increase of exports to countries with a gold standard."— See Fortnightly Review," July, 1894, page 117. Objection Five. i 5 1 as primary money by the United Stales has been stated by Senator Cameron in words so concise and logical that they need no elucidating argument : "The barrier of gold would be more fatal than any barrier of a custom house." "The bond of silver would be stronger than any bond of free trade." OBJECTION NO. SIX, "That the silver of the world, including India, would come to the United States to be converted into mone3 r ." This objection is supposed to be, if not impossible to answer, at least one of the most difficult to disprove. Like all error, the assertion can be made in a few words; while, to expose the error and prove the truth, demands many words. The objection seems to proceed upon a theory that there can be in a nation too much standard, primary, full legal tender money, procured by the people in the course of the legitimate development of their ener- gies expended in the cultivation of the soil, in manufacture, commerce, or mining. A theory so wholly abhorent to the physical, mental, and moral conditions of citizens of a republic, that it has no place in economics, or justice. Under the operation of a free coinage law, silver would be converted into full legal tender money, armed with the function of Objection Six. 153 payment of all debts, all taxes, and the re- demption of all currencies. The govern- ment does not purchase the bullion ; nor does the government attempt to exchange gold coins for silver coins, or silver coins for gold coins. The depositor of silver bull- ion receives in silver dollars the number fabricated from the metal deposited. They are his. He takes them away, and disposes of them at his pleasure. Now there are four ways, and four ways only, by which those dollars can be paid out. First. The owner of them can pay what he owes. Second. He can purchase some American product, either of the farm, shop, or mill. Third. He can invest in some American enterprise. Fourth. He can dispose of them in phil- anthropic, benevolent, or charitable pur- poses. Should foreign silver come to the United States mints for coinage into dollars, it must come under some or all of those conditions and subject to those limitations. The coins become lawful money of the United States ; and lawful money will buy of every producer 154 Objection Six. of commodities in the United States, all that he has to sell ; and this proposition includes lands and city property. It is not the material of which money is made, nor the cost of its production, that constitutes any faculty of money whatso- ever. The money function consists solely in its absolute debt paying power, conferred by positive law. And as in the world's his- tory the supply of money has never equaled the demand for money, and as every inter- est bearing debt, of long or short term, is cumulative evidence that the supply of mon- ey is less than the demand, we may rest as- sured that, were all the silver of the world available for coinage brought to the United States and coined into dollars, it would not rill the needed money supply, and that credit devices and evidences of debt would still be necessary. The fiction that foreign silver would come to the United States has been aband- oned by the most pronounced advocates of the single gold standard. Mr. Edward At- kinson admits that none would come. There is none that can come. The consumption of silver for all purposes, in periods of fifty years, is greater than the production for the Objection Six. 1 5 5 same period. 1 There is no overproduction of silver. If production were quadrupled, and it were all coined into money, the re- sults would be of vast benefit to the human race. The burden of constantly increasing debt would be stayed, industries stimulated, debts paid, and civilization lifted out of the mire of poverty and degradation which now environs it, through a decreasing volume of money and constantly increasing volume of credit devices, as substitutes for money It is this baseless volume of credit, built on nothing, a creation of the pen on the books of banks and kindred institutions, that has been the cause of every monetary panic in 1 Mulhall's Dictionary of Statistics, and English au- thority, on page 221, gives the world's product of gold for 50 years— 1831 to 1S80— as 6,357 tons, or 12,714,000 pounds. The world's consumption of gold, same period, 6,518 tons, or 13,036,000 pounds. Excess of consumption over production, i6t tons, or 322,000 pounds. On page 416, the same authority gives the production of silver in the world for the same period, as 57,270 tons, or 1 14,540,000 pounds. The consumption of silver, 62,500 tons, or 10,460,000 pounds. Excess of consumption, 5,230 tons, or 10,460,000 pounds. Recapitulation.— Excess of gold consumption, 161 tons, or 322,000 pounds ; excess of silver consumption, 5,230 tons, or 10,560,000 pounds. 156 Objection Six. the United States since we had a history. Not too much money, but too much credit, has been, and will continue to be, the cause of business disaster and the curse of national policy. OBJECTION NO. SEVEN. "The American people must pay their debts in the best money." MONEY WHICH COSTS THE MOST TO GET, WHICH DESTROYS INDUSTRIES, TO THE ADVANTAGE OF USURERS ! WHAT IS BEST MONEY? This objection raises the whole question as to what is money, and whether there can be a best money — whether there can be good money, medium money, poor money, bad money. As most of these phrases in use in rela- tion to money have been clearly analyzed in What is money? (see page 20) What is cur- rency? (see page 22) it is not necessary to repeat here. The advocates of the gold standard define good money, best money, as that which will stand the test of the melting pot. Says Edward Atkinson : "It is by the ordeal of fire that money may be tried. The coins which, being melted down, retain the entire value for which they were legal tender before they were melted down are good money . Those which do not retain it are not good money." I 5S Objection Seven. This is true of gold, and Why? Because the mint stands ready to reconvert the melt- ed coins into full legal tender money and without charge. Open the mint to silver and the same tests will bring the same re- sults. And thereby it is conclusively proven by the ordeal prescribed by the gold stand- ard advocates, that silver coins are just as sound, good money as are gold coins, noth- ing more, nothing less. 1 In the nature of things there can be no degrees in money. Money is either good, sound, honest, or it is not money. It is by virtue of the omnipotent power of the law and an open mint that sound metallic money is created. Money which can be tried and proven by the ordeal of fire ; and this is true solely and because the mint will receive the bullion and convert it into coin for the use and benefit of the depositor. 1 See Answer to Objection No. 6, page 152. OBJECTION NO. EIGHT. "That the United States government is not able of itself to sustain bimetallism, and that such policy should not be adopted without an international agreement." "Through the paths of by ami by you come to the region of never.' —Spanish Proverb. This theory against national and in favor of international bimetallism is founded on pure assumption, with no facts to justify it, that it is against experience and that we have a right, as a first step, to be put back just where we were in 1873, when free bime- tallic coinage was taken from us by fraud ; that it is from that standpoint and not from the present condition that the question shall be considered. The restoration of free bi- metallic coinage is a matter of absolute right and justice. OUR MONETARY INDEPENDENCE HERETOFORE. When Congress passed its first coinage law in 1 792, there was no international agree- ment, or suggestion of one, nor was there in 183*4, when the ratio was changed from 15 i6o Objection Eight. to i to 1 6 to I, nor even in 1873, when silver was demonetized. We legislated indepen- dently for eighty years, coining both metals at one ratio for forty-two years, and at anoth- er for thirty-nine years, and then demone- tized one of them. We acted for ourselves all these years, why not now? If it was not essential to ask the consent of other nations when we demonetized silver, why is it nec- essary to do so now before we can restore it to coinage? Is the right given Congress by the Constitution to "coin money and regu- late the value thereof," an absolute right with undivided responsibility, or is it merely a permissive grant to be exercised only with the concurrence of England and other for- eign nations? If the latter, when, where, and in what manner did we lose our mone- tary independence ? England began the demonetization of silver in 1816 and completed it in 1821. It was her independent act, the result of no international agreement, nor was one thought of. Austria and Prussia made silver the sole standard in 1857, and Germany established the "Imperial Gold Measurement" in 1873. Objection Eight. 161 Again no international agreement or sign of one. If all these changes occurred without an international agreement, why the necessity for any now? Of course there is none, but once admit such a prerequisite and bimet- allists risk their whole case upon any one of the considerable nations of the world, and the great majority of those who advocate bimetallism are confident that they can al- ways rely upon England refusing her con- sent to any international agreement favor- ing bimetallism. THE EXAMPLE OF FRANCE. Leaving the field of conjecture we have the example of France, with free coinage of silver and gold at 15^ to 1 from 1803 to 1873. During this time there was a wide variation in the proportionate product of the two met- als. From 1803 to 1820 the yield was $4 of silver to $1 of gold, and in the decade ended with i860 it was $4 of gold to $1 of silver. At one time, 1820 to 1847, the silver coined was nine times the gold coinage, and at another, 1857 to 1866, the gold coinage was sixty-four times the silver coinage, and 2 per cent, was the widest variation from par 1 62 Objection Eight. in the market ratio between gold and silver bullion in these eighty years. What France did we can do. Why not? She did not average half our present popu- lation ; the metal product varied from 4 of silver to 1 of gold to 4 of gold to 1 of silver; coinage shifted from 9 of silver to 1 of gold to 64 of gold to 1 of silver ; the stock of money the most of the time was 69 per cent, silver and only 31 per cent, gold, and yet with open mints to free bimetallic coinage she maintained the two metals at a parity for eighty years. Her currency was some- times mainly silver and then principally gold, but she changed from one to the other easily and naturally, with no mischief to any, and good to all. Now, with the stock of gold and silver nearly equal, and with the yearly product only a trifle more silver than gold, why can- not this nation of 65,000,000 do what France for so long a time did under less favorable conditions? INDEPENDENT FREE BIMETALLIC COINAGE PREFERABLE. Let me quote from a recent speech in the United States Senate by a gentleman who Objection Eight. 163 represents in part, a State supposed to be hostile to free bimetallic coinage — I refer to the present junior Senator from New York, and to this extract from his speech of Feb- ruary 6, 1893 : "My own personal conviction is clear that with adequate preparation, revised laws and competent administration and friendly ad- ministration, independent free bimetallic coinage would be within the power of the United States to establish and maintain ; and for my own part I should prefer that solu- tion, with no entangling foreign alliances or agreements to any international arrange- ment whatever. We do not half realize the overwhelming power of the United States." Thus said Mr. Hill : "The risk— even if there were a risk — attending independent free bimetallic coinage is a trifle compared with the danger of allowing foreign govern- ments to dictate to us what financial policy we shall pursue, or permitting them to veto any financial legislation we see fit to enact. "i 1 From an address by Mr. Henry Jones of Georgia, at first Annual Convention of American Bimetallic League, Washington, D. C, February 23rd 1893, page 34. ADDendix. THE MATHEWS RESOLUTION. Upon the assembling of the 43rd Con- gress in December of 1877, Mr. Bland, chair- man of the House Committee on Coinage, began the preparation of a bill to restore to the people the rights of free mintage to silver. Tbe Senate was equally prompt in its ac- tion. On December 6, Senator Matthews of Ohio, submitted a concurrent resolution which read as follows : Whereas, By the act entitled, "An act to strengthen the public credit," approved Mar. 18, 1869, it was provided and declared that the faith of the United States was thereby solemnly pledged to the payment in coin or its equivalent, of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of such obligations had expressly provided that the same might be paid in lawful money, or other currency than gold and silver ; and Whereas, All the bonds of the United States authorized to be issued by the act entitled "An act to authorize the refunding 1 68 Appendix of the national debt," approved July 14, 1870, by the terms of said act were declared to be redeemable in coin of the then present standard value, bearing interest payable semi-annually in such coin ; and Whereas, All bonds of the United States authorized to be issued under the act en- titled "An act to provide for the resumption of specie payments," approved January 14, 1875, are required to be of the description of bonds of the United States described in the said act of Congress approved July 14, 1870, entitled "An act to authorize the re- funding of the national debt ;" and Whereas, At the passage of said act of Congress last aforesaid, to-wit, the 14th day of July, 1870, the coin of the United States of standard value of that date included silver dollars of the weight of 4.12% grains each, as declared by the act approved January 18, 1837, entitled "An act supplementary to the act entitled 'An act establishing a mint and regulating the coins of the United States," to be a legal tender of payment according to their nominal value for any sum whatever; therefore, be it Resolved, By the Senate, (the House of Representatives concurring therein) that all Appendix. 1 69 the bonds of the United States issued under the said acts of Congress hereinbefore re- cited, are payable, principal and interest, at the option of the government of the United States, in silver dollars of the coinage of the United States containing 412^2 grains each of standard silver ; and that to restore to its coinage such silver coins as a legal tender in payment of said bonds, principal and inter- est, is not in violation of the public faith nor in derogation of the rights of the public creditor. On January 25, 1878, this resolution passed the Senate by a vote of 43 to 22. On the 28th, three days afterwards, it passed the House without debate, by 189 to 79. Among the Democrats who voted for this resolution was Mr. John G. Carlisle, now Secretary of the Treasury, and Mr. Hillary Herbert, now Secretary of the Navy. On February 28th, thirty-one days after the passage of this resolution, Congress, passed the Bland-Allison act over a Presi- dential veto. This fact gives to the resolution immense significance, as being intended as notice to the world that the United States proposed to restore silver to coinage with full legal 1 70 Appendix . tender to the coins, and to, with such coins, pay the principal and interest of the nation- al debt, at the option of the Government. This Resolution stands upon the records of the nation to-day unrepealed and unim- peached. It is in the highest sense declaratory of the will of the people, and the act of Feb- ruary 28th, 1878, confirmed that declaration. Mr. Carlisle, now an executive official of the government, nullifies this declaration and the law which follows it ; both resolu- tion and act sanctioned by his vote as the solemnly sworn representative of the people. ENGLAND'S COMMERCIAL PROS- PERITY NOT DUE TO HER GOLD STANDARD. OPINIONS OF DISRAELI. (lord BEACONSFIELD.)! At a banquet given to him November 19, 1873, by the corporation of the city of Glas- gow, on the occasion of his installation as Rector of the University of Glasgow, Mr. Disraeli said : "I do not observe myself that there are any symptoms in Britain of reckless specu- lation. "No doubt our young relation on the other side of the Atlantic, with the ardor which is characteristic of youth, have been doing some things somewhat extravagant. 2 But I do not believe that the disorders which have arisen there could have occasioned, or were adequate to occasion, the disorders 1 The Silver Question, by Geo. M. Weston, Secretary to U. S. Silver Commission, page 258. 2 The "'young relation" had demonetized silver in Feb- ruary of that year, 1873. 1 72 Appendix. that have occurred in our own country, with reference to the value of money. I attribute them to quite another cause. I think the cause is not exhausted, and is deserving the grave attention of men who are so deeply interested in the prosperity of the country and the action of commerce as those I have the pleasure of meeting to-day. "I attribute the great monetary disturb- ance that has occurred to the great changes which the governments in Europe are mak- ing with reference to their standard of value. "I know myself that an opinion has been extremely prevalent among the statesmen of Europe, and among distinguished econo- mists and merchants abroad, that the com- mercial prosperity and preponderance of England were to be attributed to her gold standard. But it is the greatest delusion in the world to attribute the commercial pre- ponderance and prosperity to our having a gold standard. Our gold standard is not the cause of our commercial prosperity, but the consequence of our commercial prosper- ity ; and it is very well for us to have it ; but you cannot establish a gold standard by violent means. It must arise gradually from Appendix . 1 73 the large transactions of a country, and the consequent command it may have over the precious metals. When the various States of Europe suddenly determined to have a gold standard and took steps to carry it into effect, it was quite evident that we must prepare ourselves for convulsions in the money market not occasioned by speculation or any old cause, which has been alleged, but by a new cause with which we are not yet sufficiently acquainted, and the conse- quences of which are very embarrassing." THE NEW SIAMESE TWINS. 1 Some of these people actually believe that they and the Government are one and the same, each of equal dignity and import- ance. This extraordinary language occurs in Henry Clews' weekly circular of Febru- ary ii, 1893 : "The United States Government in its finances is connected with the banks of the entire country with as strong a tie as that which united the Siamese twins. Their in- terests are identical, their success and future are equally dependent upon each other and the confidence in and high credit of both are, as it were, matrimonially joined together, hence the Government and the banks must stand, and will stand by each other insepar- ably; united they stand, divided they fall." Is this true, my countrymen ? There was no survivor of the Siamese twins ; when one died, the other died also; their mysterious union ended only with the dissolution of their 1 Mr. Henry Jones, of Georgia, at first annual conven- tion of The American Bimetallic League, Washington, D. C, February 23, 1893, page 30. Appendix. 175 bodies after their souls had departed. Is it to be thus with the Government and the banks ? Must the people support both, with the banks our masters and overseers, in or- der that we may have the Government for our service ? Is there to be no life for the Government beyond the banks, and are we to have the banks as long as we have the Government ? If the Government and the banks are joined in matrimonial bonds, as Mr. Clews says, then what God hath joined together let no man put asunder. Is that what they mean? Has it come to pass that this Gov- ernment, after its wonderful century of exist- ence, is of the banks, for the banks, and by the banks, lives only as it has the support of the banks, and will fall if the banks desert it? Is this all we have to show, as the result of an experiment such as the world never saw before, a government living and moving only when propped up by the banks and ready to die from neglect when they die? There is even no room for the survival of the fittest. The Government and the banks are so tangled up, each with the other, that while there may be a reasonable doubt as to 1 76 Appendix. whether they are to live or die, survive or perish, there is absolute certainty that the same good or ill fortune awaits both alike. At least, so says Mr. Clews, and he is cer- tainly a representative banker. NO LIGATURE BETWEEN GOVERNMENT AND BANKS. While undoubtedly Mr. Clews believes all he says, and in this fairly represents the opinions of banks and bankers, who assume the right to dictate the financial laws of the country, he is thoroughly mistaken both as to the fact, and also as to the temper of the plain people, who, after all determine legis- lation. The Government and the banks are not the Siamese twins, are not husband and wife, have no identical interests, or future prospects of any kind dependent each upon the other. They are entirely separate and distinct, and if the banks do not cease their unwarrantable interference with legislation there will be a war between them and the people to which Jackson's fight against Nicholas Biddle's "Fiscal Corporation" will be only an out-post skirmish. Other people' have rights as well as the banks, preferred rights, immeasurably superior rights. REPORT OF MONETARY CONFER- ENCE, 1878. (Page 210 The ten European powers represented at the monetary conference held at Paris in 1878, "Having maturely considered the pro- posals of the representatives of the United States, they recognize : " First. That it is necessary to maintain in the world the money functions of silver as well as those of gold, but that the selection for use of one or the other of the two met- als, or of both, simultaneously, should be governed by the special position of each State or group of States. "Second. That the question of the restric- tion of the coinage of silver should equally be left to the discretion of each State or group of States, according to the particular circumstances in which they may find them- selves placed, and the more so, in that the disturbance produced during the recent years in the silver market has variously af- fected the monetary situation of the several countries." 178 Appendix. These conclusions declare, in language that cannot be misunderstood, that each State should act in its own interest "accord- ing to the particular circumstances in which placed." The sum of human wisdom upon the monetary question. EXTRACTS FROM WASHINGTON'S FAREWELL ADDRESS, 1796. THE BANEFUL EFFECTS OF THE SPIRIT OF PARTY. "In contemplating' the causes which may disturb our union, it occurs as matter of seri- ous concern, that any ground should have been furnished for characterizing parties by geographical discriminations. One of the expedients of party to acquire influence, within particular districts, is to misrepresent the opinions and aims of other districts. You cannot shield yourselves too much against the jealousies and heart-burnings which spring from these misrepresentations ; they tend to render alien to each other those who ought to be bound together by fraternal affection. * * * They serve to organize fac- tion, to give it an artificial and extraordin- ary force — to put in the place of the dele- gated will of the nation, the will of the party, often a small but artful and enterprising mi- nority of the community; and, according to the alternate triumphs of different parties, 1 80 Appendix. to make the public administration the mir- ror of the ill-concerted and incongruous pro- jects of faction, rather than the organ of con- sistent and wholesome plans digested by common councils and modified by mutual interests. However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people, and to usurp for themselves the reins of government; de- stroying afterward the very engines which have lifted them to unjust dominion. * * * Let me now take a more comprehensive view, and warn you in the most solemn man- ner against the baneful effects of the spirit of party, generally. This spirit, unfortunately, is inseparable from our nature, having its root in the strong- est passions of the human mind. It exists under different shapes in all governments, more or less stifled, controlled, or repressed; but in those of the popular form it is seen in greatest rankness, and it is truly their worst enemy. Appendix. 1 8 1 The alternate domination of one faction over another, sharpened by the spirit of re- venge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a fright- ful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries which result, grad- ually incline the minds of men to seek se- curity and repose in the absolute power of an individual, and sooner or later the* chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation on the ruins of public liberty. Without looking forward to an extrem- ity of this kind (which nevertheless ought not to be entirely out of sight), the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and re- strain it. It serves always to distract the public councils, and enfeeble the public adminis- tration. It agitates the community with ill- founded jealousies and false alarms; kindles the animosity of one part against another, foments occasionally riot and insurrection. 1 82 Appendix. It opens the door to foreign influence and corruption, which find a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the pol- icy and will of another. There is an opin- ion that parties in free countries are useful checks upon the administration of govern- ment, and serve to keep alive the spirit of liberty. This within certain limits is prob- ably true ; and in governments of a monar- chial cast, patriotism may look with indul- gence, if not with favor, upon the spirit of party. But in those of the popular charac- acter, in governments purely elective, it is a spirit not to be encouraged. From their natural tendency it is certain there will al- ways be enough of that spirit for every sal- utary purpose. And there being constant danger of excess, the effort ought to be, by force of public opinion, to mitigate and as- suage it. A fire not to be quenched, it de- mands uniform vigilance to prevent its burst- ing into a fiame, lest, instead of warming, it should consume." "If ever the free institutions of America are destroyed, that event may be attributed Appendix. 1 83 to the omnipotence of the majority, which may at some future time urge the minorities to desperation, and oblige them to have re- course to physical force. Anarchy will be the result, but it will have been brought about by despotism." 1 — De Tocqueville's "Democracy In America," chapter 15. 1 The despotism and corruption due to a disciplined party majority, — G. G. M. NEW YORK BANK PRESIDENTS' CONSPIRACY AGAINST INDUSTRY AND PROSPERITY.— A History of the Panic of 1893, by J. W. Shuckers, during the war, private secretary to Secretary Chase. EXTRACTS FROM IV. LETTER, REPRINTED BY PERMISSION. "On the nth of April (1893), Grover Cleveland appointed Conrad N. Jordan to be sub-Treasurer at New York. * * * lordan's appointment was a conspicuous departure from * Cleveland's publicly announced pur- pose, that he would not reappoint ex-office- holders of his former administration. * * * But if Jordan's appointment to be sub-Treas- urer was in violation of one of * Cleveland's principles of official action, it was strictly in line with another — that of his intended use of the federal patronage to force the repeal of the Silver Law. 1 Jordan became * * one 1 The Silver purchase act of 1890. Appendix. 185 of the most active and efficient of the fed- eral agents of that repeal. He became the confidential intermediary between Grover Cleveland and the New York National Bank presidents in their joint operations for a National Bank war upon the National in- dustries, commerce and prosperity. Jordan was confirmed on April 15. On the 20th and 2 1 st he was in Washington with his bonds, which were duly approved. Jordan returned to New York on April 21, arriving there about 5.30 in the afternoon. He went di- rectly to the Chase National Bank, where his coming was awaited by Henry W. Canon * * and J. Edward Simmons. * * A short but important meeting took place * * for as a consequence of it Cannon went to Wash- ington on a midnight train. * * He stayed in Washington until Sunday afternoon, April 23, interviewing with * Cleveland. * * 'He was disinclined to talk,' * * although he was willing to say that 'he believed his visit w T ould bear fruit.' * * "Jordan was sworn into office Saturday morning, April 22. * * His first act was to arrange a meeting with certain bank presi- dents in the afternoon. * * "The meeting was said to have been 'in- 1 86 Appendix. formal' and its proceedings were secret. * * But it was an important meeting; one in which, for some reason, * Cleveland was so deeply interested that Jordan went to Wash- ington on a late evening train specially to * report * proceedings. He went to the White House on Sunday morning, had a long con- ference with * Cleveland, at which Cannon was present. "Jordan and Cannon returned to New York, evening of Sunday, April 23rd. A meeting had been arranged by wire to take place 'at a private house up town.' It was preliminary to a more important meeting of the bankers on the next day ; all of these several meetings were preliminary to the last, and most important of them all, which occurred on Thursday, x^pril 27th. This was 'Columbus Day' — a bank and general holi- day in New York ; the day of the great in- ternational review, at which * Cleveland and his cabinet were to be present. "About half-past four o'clock, April 27th, the public exercises of the day being over, Mr. Carlisle was driven to the private resi- dence of Mr. George G. Williams, where nine National Bank presidents were assem- bled as follows : Appendix. 187 "George G. Williams, president Chemi- cal National; Edward H. Perkins, president Importers and Traders; Frederick D. Tap- pan, 1 president Gallatin National; James T. Woodward, president Hanover National ; Brayton Ives, president Western National ; Henry W. Cannon, president Chase Nation- al ; George S. Coe, president American Ex- change Bank; W. W. Sherman, president National Bank of Commerce ; J. Edward Simmons, president Fourth National Bank. Conrad N. Jordan and Charles J. Canda were also present. "Carlisle and the National Bank presi- dents met each other with an effusive cordi- ality. There were mutual expressions of admiration and respect. * *«The bankers recognized the difficulties of Mr. Carlisle's position, and Carlisle in his turn 'thanked the bankers for their expressions of sympa- thy, and declared that they gave him more pleasure than anything that had happened in a long time.' "'Business' being now in order, the bank presidents proposed an issue of bonds " 'to protect the public credit.' But the bank 1 This man has been described as "The Bank Dictator of America." i SS Appendix. presidents perfectly well knew, when they met the Secretary, that there was to be no issue of bonds. "Mr. Carlisle, in his reply to this proposi- tion * * expressed his strong repugnance to an issue of bonds. * * The subject matter was the repeal of the Silver Law. He assailed it with great bitterness. He de- nounced the whole body of the financial and currency laws, and declared the necessity for their revision, * * the beginning of which must be 'the early, unconditional and abso- lute repeal of the Silver Law.' There was nothing new in these views of Mr. Secretary Carlisle. The 'immediate un- conditional' repeal of the Silver Law had been a cry of the New York National Bank presidents raised coincident with the pass- age of the law ; there had been little or no intermission in its repetition since, and * Cleveland, both by persuasion and threats, had attempted to force the repeal at the second session of the 52nd Congress. But the Secretary now made a statement, so alarming, so attrocious and incendiary, that, if the National Bank presidents had been anything but what they were, men of the most reckless purposes, with whom the pro- Appendix. i gg posal to commit an infamous outrage upon the people was already familiar, they would have assailed him with indignant protest and denunciation. But the West and the South * * were against the repeal of the Silver Law. * * They would not consent to the re- peal except in exchange for Free Coinage. * Cleveland never would consent to Free Coinage, * * and was resolved upon the re- peal of the Sherman Law, * * and Cleve- land had come to the conclusion that if the object lesson of a panic, and the distress that monetary stringency would cause, were necessary to secure repeal, the Administra- tion would do nothing to prevent it. "It is not pretended that the foregoing were the exact words used by Mr. John G. Carlisle in his address to the National Bank presidents, but they convey the substance of what he said, * * and those with respect to the 'object lesson of a panic' are so nearly his words that to distinguish them would * be difficult. "By an 'object lesson' was meant an at- tack * * by banking operations upon the en- tire industrial and commercial communi- ties, and most particularly those of the South and West with a design to disorganize cred- i go Appendix. it, * * shut down mills and factories, bank- rupt merchants, to produce by banking op- erations so widespread and intolerable a state of social and business disorder * * as to create pressure from every quarter for the repeal of the Silver Law, to which all these universal ills were to be systematically ascribed. "This was the attricious scheme of out- rage and spoliation * * wrapped up in the proposed infamous 'object lesson.' * * * * "Now did any one of the nine National Bank presidents, or did Conrad N. Jordan or Charles J. Canda show the least sign of astonishment, alarm, distress, or even sur- prise, when Mr. Carlisle made his astound- ing statement that a National Bank war upon the National prosperity was approved by Grover Cleveland? NO ! "Did any one of them * * * make any protest, even the slightest, that a * * Bank war upon the industrial and commercial communitieswould be an outrage immeasur- ably wicked, cruel, indefensible, infamous and criminal? NO. "Did any one of them * * * 'show or ex- press any disinclination whatever to join in this proposed cruel, infamous and criminal Appendix. I g [ National Bank war upon the industrial and commercial communities?' NO ! "This meeting lasted about one hour, and was the last of that series of extraordinary and unprecedented secret Bank Conferen- ces in New York, and Confidential Bank- Cleveland communications between Wall Street and the White House, that had been in progress during seven consecutive days. The motive for their continuance no longer existed, the preliminaries had all been ar- ranged, the conclusions had been reached, and there would be no more meetings. An immense calamity now impended over the American people." These letters were given to the public in 1894. No action for slander, defamation of character, or libel has been instituted by any one or more of the persons charged as being in the conspiracy. Silence as of the grave; but silence consents, silence admits, that the charges are true. CORRECTIONS. Page 31 — 13th line, read "they gain." Page 45— Note 1, read "cut purses." Page 60— Last line of table, read silver, "63. * 7 -'" Page 95— Note, read three horses. Page 125— 8th line, read creditor. INDEX. A Ancient Landmarks 64 79 Andrews, Prof. E. B. Restoration of Silver 150 Argentine Republic, Conditions in 34 Aristottle, Paupers in State (Note) 45 Asiatic Competition 54. 62, 112, 115, 117 Atkinson, Edward, No Silver to Come 154 " " Sound Money 157 Austria and Prussia, Adopt Silver Standard 160 B Balance of Trade, How Maintained 83 Baneful Effect of Party (Appendix) 179 Bagehot, W., Bounty on Indian Exports 50-51 Banks of New York, Repeal Silver Bill (Note) 104 Bank Presidents, Conspiracy (Appendix) 184 Beck, Hon. Jos. B., Act of 1873 7° Best Money 157 Bond Issues, The Cleveland 94 Bland- Allison Act, 1878 102-103 Bright, Hon. J. M., Act of 1873 66 British Royal Commission on Prices 46-81 Burchard, Hon. S. B., Act of 1S73 67 1 94 Index. C Cameron, Hon. Don, Basis of Gold 151 Cairns, Prof., Oriental Trade 86 Capitalist. Benefited by Fall in Prices 46 Carlisle, John G., Necessity of Silver 71 Confession 107 Latest Remedy 12 1 Nullifies Matthews Resolution 170 Proposed Remedy Destructive 123 Surrenders Option of Payment 125 Cernuschi Standard Bimetallic (Note) 134 Clews, Henry, Repeal Silver Law (Note) 145 Clifford, Mr. Justice, Constitutional Money 102 Charges — Assaying, Preparing Standard Metal 9 Coinage of Gold, 9 ; Repealed 10 Charles I., Beheaded, Cause of 105 Colossal Swindle, Act of 1873 67-68 Comparisons, between Gold and Silver Countries .... 140 Competition of Cheap Labor ... 112, 115, 117 Congress no Power to Demonetize Gold or Silver .... 74 Constitution Imposes Duty to Create Money 119 Constitution, Supreme Law 100 Corn Trade, New Wheat Supply and Price 113, 115 Cornwall Tin Mines Closed (Note) 114, 115 Contraction of the Currency, Effect of (Note) 123 Contracts Void, What are 103 Conspiracy for Panic, 1893 109. 184 Cotton, Table of Prices 59-60 Credit Devices, in common use 24, 154 Currency, What is 22 D Debts, Arbitrary Function of Payment 16 Demand for Money Insatiable 25 Depreciation of Silver, a Bounty on Exports from Sil- ver Using Countries 5 1-53 Index. igcj De Tocqueville, on Dangers to American Republic. (Appendix) 183 Dictionary of National Biography 36 Dollars, Silver, at Premium (Note) 21, 147 Dollars, Silver, How Paid Out 153 Dollar, the Unit for Money 12 Disraeli on England's Commercial Supremacy (Ap- pendix) 171 E Effect of Falling Prices on Money 18 Effect of Restoring Silver to Money Function 25 Egypt, Conditions in 142 Encyclopaedia Brittanica, English Creditors 40 England's Agriculture, Condition of 141 England, the Great Creditor 42 English Creditors Injured by Increase in Price of Sil- ver 40 English Policy Exploits Industry 41 Evils of Gold Standard 27 Europe's only Silver is Money 148-9 Exchange on London at Discount 148 Exchange, Foreign, Effect of Low 29, 31, 112 Example of France 161 Export of Gold 122 144 Exports, General, Increased 122 147 F Falling Prices, Effect of on Interest 19 " Effect of on Industry (Note) 80 " Effect of on Production 27 Farrar, Lord, Effect of Silver Coinage by United States '49 Field, Mr. Justice, Constitutional Money 102 Fraud That Will Stink— Act 1873 66 Free Coinage Defined 7 Frewen, Mr. Moreton, on Prices 85 1 96 Index. Fowler, Sir Robert N., Wheat and Cotton in United States and India 47 G Gold Contracts Nullification 99 Contracts Obnoxious i°3 Exported, When 145 Not a Commodity 1 5 Never Varies in Value 15 Possesses No Unchanging Quality 16 Reserve, How Established 87 Reserve, None Authorized (Note) 91 Standard Reduces Prices 4 1 Gladstone, William E., English Creditors 42 Grant, President, Special Message 7 2 Great as is this Republic it Can't Create Money 118 Great Consumers, Who Are 82 Great Britain Guards Her Usury 40 Great Britain, the Gold Standard Realm 140 Gresham Law, The 36 Groesbeck, Hon. W. S., Act of 1873 75 H Halstead, Murat, Advertisement 7 6 Hill, Hon. David B., International Agreement 163 Holman, Hon. W. S., Act 1873 6 7 Howe, Hon. T. 65 Hume, David, Historian (Note 80) 84 I Imports, Decreased 147 Increase of Debt, 1894-5 122 Indian Competition 50, 5 1, 53, 55, 56, 57, 58, 59, 62-63 Industry Creates Wealth 83 Interest, Fixed Rates of, Benefited 46 Interest, Low Rates of, denote prostration 19 International Agreement 159 Index. H,; J Jevous, W. S. ( Money and Exchange (Note) 37 Jones, Mr. Henry, Georgia 159 Jones, Senator John P. (Note) 19, 41, 53, 92 (Note) L Legal Tender Notes, Volume of 124 Legal Tender, of Coins 102 103 Legislation Hostile to Silver 113 Lincoln, Abraham 64 London, England, Market for surplus 49-50 M Manning, Daniel, Secretary Treasury 50 Mathews Resolution, The (Appendix) 167 Monetary Conference, 1878 (Appendix) 177 Dislocation 50 Panics, Cause of 155 Money, All Sound 20 158 Easy in Wall Ssreet 17 Effect of Increasing Value 3 I_ 84 Supply vs. Demand 24 Substitutes for 84, 136, 156 Locked in Reserves 17 What Is 20 Mexico, Conditions in 140, 141, 142 Morgan, John P., Alabama, Act 1873 70 Mortgages, on Land, Houses, Crops and Children .... 25 Mulhall, M., on Cause of Low Prices 48 on Quantities of Gold and Silver 155 N National Bank Notes a Currency 22 Nicholson, Prof. J. S., on Exports from India 5 2_ 53 No over-production of Silver 155 Novel Facility in Getting Rupees 5 1 Nullification, by Gold Contracts 102 103 Nullification, of Silver Purchase Act 60 1 98 Index. O Objection No. One — Parity 129 No. Two — No Bimetallic Nation 134 No. Three — Monetary Basis : . 137 No. Four — Gold Would Go Out 144 No. Five — Exports Lost 147 No. Six —Silver Would Come 152 No. Seven — Best Money 157 No. Eight — International Agreement 159 P Parity, What Is, How Maintained 129 133 Paupers in a State (Note) 45 Pierrepont, Hon. Edwards, Act 1873 74 Plum, Senator, Kansas, Effect of Contraction (Note). 123 Premium on Gold, Effect of 34 Price, Fall in, Caused by Deficient Money 80 Price of Silver, 50 Years 131 Productive Industries Benefited 31 Production, Law of 31 Prophecy and Fulfillment 6 Public Policy, Contracts Void 103 R Relative Quantities Silver and Gold 131 Rupee, Standard Coin (Note 50) 55 Rupee, Effect of Cheap Silver 5 1, 54, 55, 58, 113 s Secretary of Treasury Nullifies Act 1890 60 Sherman, John, Establishes Gold Reserve 88 Siamese, Twins, The New (Appendix) 174 Sibley, Joseph C, on Parity (Note) 133 Silver, Dollars at Premium (Note) 21 " Exports of 1 22 " Foreign, None to Come 154 " Rises, Wheat and Cotton Rise 53 " Question, The, Wheat and Cotton Question. . . 49 Index. iqq Silver, Wheat, Cotton 47 Sound Money, What Is 20 158 South American States 142 Standard Metal, Silver, Gold 9 Standard of Value Incorrect (Note) 11 Steck, Amos, Value of Money 137 St. John, W. P., on Unit of Value (Note) 13 " " on Foreign Exchange 148 Substitutes for Money 22 84 Surplus, Products Sold in London 49 S° T Taxpayers not Consulted, Act 1873 6S The Crime of 1873 r, l The Dollar of Constitution 5 The Evils of the Gold Valuation or Standard 27 The Gold Reserve 87 The Wage Earners 80 The Yellow Man With the White Metal 112 Tribune, Chicago, Act 1873 6 9 u Unit Defined (Note) r » " of Value an Ideal, Impossible 12 Unite or Die — Franklin 127 Usury Must Be Protected 45 V Value, What Is, in Political Economy 1 1 Voorhees, D. W., Act 1873 68 W Wage Earners and Cheap Rupees 116 117 Warner, Gen. A. J., Silver, Wheat, Cotton 55 Washington's Farewell Address (Appendix) 179 Weed, Hon. Thurlow, Act 1873 What is Currency ->-> 200 hide: Wheat Crop, 1879-83 60 1893 61 Wheat Decline in Supply and Price 116 Wheat and Cotton Growers, Tax on by Bond Issues. .94-95 Why Productive Industries Benefited by Free Coinage 31 Wollowski, Count, Compound Pendulum 135 TWs book is DUE on the last date stamped below 5m-6,'41(3644) 1A UC SOUTHERN REGIONAL LIBRARY I AGILITY inn AA 000 593 788 3 rji