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Mr. Adams, of Illinois.
Mr. Chairman, suppose Congress were to authorize unlimited coinage of standard silver dollars, what would be the immediate result? There would be a large addition to our silver circulation; there would be a large profit in bringing silver bullion to the Mint.
The market value of 371.25 grains of fine silver is about equal to that of 18.6 grains of fine gold. But when it has been coined into a silver dollar exchangeable in the market for a gold dollar its value is equal to that of 23.22 grains of fine gold. The profit of coining silver bullion, therefore, so long as the silver dollar and the gold dollar are interchangeable in the market, would be 4.62 grains of fine gold for each silver dollar coined. This profit now goes into the United States Treasury under our present system of limited coinage.
It is true that the whole of this profit could not be realized by everyone who bought silver bullion to send it to the Mint. The law of unlimited coinage would, by the creation of a new and highly profitable use for silver bullion, raise its gold price in this country and Europe. But bullion brokers would compete for silver bullion, after the creation of a new and extra-profitable use, chiefly for the purpose of putting it to the new use, or for the purpose of selling it to some one else who would use it in the same way. Moreover, every bullion broker would understand that the profit of coining silver bullion would decline whenever the silver dollar ceased to be exchangeable in the market for a gold dollar. He would, therefore, understand that the sooner he got his bullion coined into silver dollars the safer he would be. So long as the newly created use for silver bullion continued to be more profitable than other uses, so long as the circulating value of the silver dollar continued to be higher than the worth of 371.25 grains of silver for uses other than American coinage, I believe that silver bullion would flow to the American Mint and be coined into dollars.
Would foreign silver coin also come to the Mint? Some gentlemen say no. It would be excluded, they say, by the laws of trade. French and German silver coin has a value as coin above the value of the bullion contained in it. This additional coinage value would be lost if it were converted into bullion. Bullion it would be and bullion only it shipped from France or Germany to the United States. But as silver bullion in the United States could under a law of unlimited coinage be converted without cost into standard silver dollars, the loss on the whole transaction involved in converting French 5-franc pieces into American silver dollars exchangeable in the market with American gold dollars would be simply the difference between the coinage price of silver in France and the coinage price of silver in the United States. According to the French or German ratio of 1 to 15 Ë the silver equivalent of a gold dollar would be 359.91 grains of fine silver. According to the American ratio of 1 to 16 it would be 371.25 grains. The difference of 11.34 grains would represent the loss on each dollar's worth of French coin. It would be a loss of about 3 per cent.
Now, it is true that no French or German bullion broker would voluntarily incur the loss of 3 per cent. But the French or German Governments might, if they were anxious, as many persons suppose they are, to part with a portion of their silver circulation and replace it with gold. It would not be a commercial transaction undertaken for the profit of the transaction itself. It would be a measure of state policy. A government in dealing with its currency often takes a step involving an immediate loss for the sake of an ulterior benefit either to the government or to the nation. For instance, it melts down abraded coins for recoinage in order to maintain the standard of weight in its metallic circulation. The transaction is ultimately beneficial to the nation but it involves an immediate loss to the government.
I shall try to show hereafter that during the last eighteen years Germany and France have shown a deposition to secure a gold currency like that of England. Each has endeavored to obtain it at the expense of the other. Each would be glad to sell to the other silver coin in exchange for gold. Till international bimetallism, or something like it, is established, Germany as well, as France would willingly sell silver for American gold. Each would be the more ready to do so because of the belief that the stock of American gold was likely to be secured by the rival country. Each would be influenced by the belief that the opening of the American Mint to silver would for a short time furnish the best opportunity for the sale of European silver that would be offered during the next generation.
The coining price of silver in the American Mint under a law of free coinage would be $1.16 4/11 per ounce 9/10 fine. This is equivalent to 58.9d. sterling per English standard ounce .925 fine by which sales of silver bullion are usually reckoned in Europe. A law of unlimited coinage would for a time fix the price of silver bullion at about 58.9d. sterling per English standard ounce, less the cost of transportation to the American Mint, which would amount to about one-half of 1 per cent. on a shipment of 1,000,000 francs.
Mr. BLAND. Then, in order that there should be that profit the gentleman admits that free coinage would restore silver to a par with gold at our ratio of 16 to 1.
Mr. ADAMS, of Illinois. It would for a time, but —
Mr. BLAND. That is all.
Mr. ADAMS, of Illinois. The gentleman does not object to my answering with the limitation which is in my mind.
Mr. BLAND. Not at all. I only wanted to remark that such a thing could not occur except by reason of free coinage putting silver at a par with gold. I contend it will do that.
Mr. ADAMS, of Illinois. I believe that free coinage, by the prospect which the foreign bullion-owner would have of bringing his foreign bullion to the American Mint and converting it into silver dollars, would for a time give a high gold price to silver bullion in Europe. This would be conditioned on the possibility not merely of transporting the bullion to the United States Mint and converting it into silver dollars, but also on the possibility of converting those silver dollars into American gold dollars and exporting them. It is the possibility of converting foreign silver into American gold and sending the American gold abroad that would for a time fix the gold price of silver in Europe at nearly 58.9 pence per ounce. The question is whether this price would induce France or Germany to sell silver coin in exchange for American gold.
An answer to this question may be gathered from the following table,
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showing the prices and amounts of sales of silver withdrawn from circulation by Germany from 1873 to 1879. I take this table from the exhibit presented by Baron von Thielmann to the monetary conference of 1881, reducing the marks to dollars at the rate of four marks to the dollar:| Years. | Price. |
Proceeds of sale. |
| Pence. | ||
| 1873 | 59 5/16 | $2,324,170 69 |
| 1874 | 58 ž | 15,283,917 57 |
| 1875 | 57 ź | 4,552,112 27 |
| 1876 | 52 3/8 | 23,484,120 59 |
| 1877 | 54 5/16 | 57,606,059 63 |
| 1878 | 52 9/16 | 31,550,963 02 |
| l879 to end of May | 50 | 6,983,604 47 |
| Total | 53 15/16 | 141,784,998 25 |
If Germany has sold this large amount of silver at the average price of 53 15/16 pence sterling, can we be sure that Germany and France and other nations of Europe will not sell their silver for American gold if the open American mint fixes the price at 58.9 pence sterling less the cost of transportation?
It is a question to be carefully considered by those advocates of unlimited silver coinage who believe, as one of them recently declared, that if foreign silver coin were likely to be exchanged for American gold the argument against unlimited silver coinage would be conclusive.
How long would a law of unlimited silver coinage continue to give to European nations this opportunity to sell silver coin for American gold at 58.9 pence sterling per English standard ounce, less the cost of transportation? So long as the silver dollar continued to be exchangeable in the American market for a gold dollar; in other words, so long as gold remained in circulation. After the gold had disappeared the silver dollar would begin to depreciate by the continued addition to the volume of circulation, and the profit of coining silver bullion would diminish. It would still be great enough to bring bullion to the Mint till the circulation value of the silver dollar had sunk to the value of 371.25 grains of fine silver for uses other than American coinage. We should then be on the silver level.
I have spoken of this exchange of American gold for foreign silver as though it would be a methodical commercial transaction, the foreign silver coming here for sale and the gold going abroad to pay for it as fast as the silver came in. But the process would be accelerated by a disposition to withdraw gold from circulation in anticipation of the effect of the free-coinage act. The gold would not all be hoarded. Some of it would be exported on cable orders to purchase silver. The sadden withdrawal of gold would be contraction. The silver and paper dollars left in circulation would not thereby become depreciated. On the contrary, they might be appreciated for a time. The prices of goods measured in such silver and paper dollars might sink even below the gold level, especially if the fear of change which perplexes merchants as well as monarchs were to cause a contraction of credit. This, however, would widen the margin of profit in sending bullion to the mint. In other words, it would narrow the margin of loss in selling foreign coin as bullion. Foreign silver coin imported as bullion would be paid for partly in gold and partly in American goods bought at panic prices. The transaction as a whole might be profitable even to the foreign government; that is, the foreign government might for a short time sell its coin as bullion without any loss whatever.
Thus the vacuum caused by an outflow of gold would be filled by an inflow of silver. Contraction would cease and expansion would begin. It would go on, for all that appears, till the purchasing power of the American silver dollar had sunk to the present market value of 371.25 grains of fine silver bullion. Whether silver bullion would sink to a still lower level in consequence of the rejection of a large amount of silver from the French and German circulation, just as it is supposed to have declined in 1876 in consequence of a similar policy adopted by the German Government, is a question worth considering which I have not time to discuss.
If it be true that European governments would take advantage of a law of unlimited silver coinage in this country to strengthen their gold reserves, it follows that the silver mining industry of the United States would not receive much benefit from such a law. These high grade mines which are ready to put bullion on the market would sell it at a higher price. A mine of lower grade ore which can not be profitably worked at the present price of bullion, might become profitable if the prices of bullion were to advance, but almost as soon as it could be developed and put in working order its opportunity to sell its bullion at a profit might have passed away by the decline in the purchasing power of the silver dollars into which its bullion could be coined.
Therefore it has been suggested that the Mint should not be opened to European silver coin, but only to silver bullion produced in American mines. The difficulty and expense of enforcing such a law would be considerable. If it could be enforced it would undoubtedly diminish the danger of unlimited coinage.
It might not prevent depreciation, but it would retard it. It would also retard, without altogether preventing, the outflow of our cold coin. If the increase of our circulation were accompanied by a corresponding increase in population and commerce depreciation would not follow prices would not rise. This, however, would hardly satisfy those who demand more silver as a means of raising prices or as a means of relieving debtors. If, on the other hand, the circulation increased faster than population and commerce, then prices would rise here as compared with prices abroad. This would stimulate imports of foreign goods. The balance of trade would turn and our gold would gradually go abroad. The silver-mining industry would flourish at the expense of other American industries.
One other probable effect would be that a diversion into the United States Mint of the silver bullion which now goes abroad would diminish the supply of silver bullion in Europe and so raise its price that Germany or France would be induced to sell coin for export to India. It is not in the interest of this country, nor is it in the permanent interest of our silver-mining industry, to raise the price of silver bullion in Europe until European governments have agreed upon a method or a ratio at which there shall be substantially free coinage of silver everywhere.
I should not take pains to show that unlimited silver coinage would cause depreciation if all advocates of unlimited coinage reasoned as many of them do, for the argument of many of them concedes depreciation and proclaims it as a national blessing, because, as they say, it would lighten the burden of existing debts. They advocate depreciation as a remedy for appreciation. They say gold has risen more than silver has fallen. I do not discuss that question now. Gold may have risen somewhat and silver fallen somewhat. They certainly stand on widely different levels now. All I wish to make clear is that unlimited coinage of silver means a rapid descent from one level to the other.
The fall is as great whether we fall from the ground into a pit 20 feet deep, or fall to the ground from a bank 20 feet high, or fall from a bank 10 feet high into a pit 10 feet deep. It is 20 feet every time.
There would be a serious decline in the value of money. That means a more than corresponding rise in the prices of commodities, for rising prices acquire a momentum and continue to rise for some time after the force which originally caused the rise has ceased to act. The expansion of the currency begets on expansion of credit. When this has spent its force the natural and inevitable reaction comes. The question is whether a general and decided rise in prices due to a decline in the value of money to the silver-bullion level would be a national blessing or a national evil. I believe it would be a national evil.
Many suppose that it would equalize the conditions of life by taking from the rich and giving to the poor. I believe it would have the opposite effect. It would make some rich men richer and nearly all poor men poorer.
How would it affect the wage-earner? Would it better his condition? Manifestly not, unless wag-earners now out of work would find employment, or unless the wages of men now employed would rise faster than the cost of living. How is it with the price of labor? Does it rise as fast as other prices? It never does. It always lags behind. Laboring men and women and salaried employees may be properly described by a certain popular phrase which we have heard used in this debate. They are "possessors of a fixed income," because they find it harder than any other class to enlarge their income by raising the price of their commodity — that is, their labor — to meet a rise in the cost of living.
Compare, for instance, the laboring man with the laboring man's grocer. How long does it take a retail grocer to raise the price of sugar? A word to his salesman and the thing is done. And how soon does the grocer learn that the time has come to raise his prices? He reads it in the daily market reports, by which the intelligence of every cause that is operating in the money centers of the country is radiated to every board of trade, to every bank parlor, to every wholesale and retail shop in the country. The business map reads the market report and acts on it instantly. He must do so in order to succeed. If the wholesale price of sugar has gone up a cent a pound, the retail grocer adds the amount to the price which he charges to his customers. He also adds thereto his reasonable or unreasonable profit thereon.
Can the laboring man do likewise? When he starts for his work in the morning, can he examine a daily price-current of labor to ascertain what price he shall charge his customer for the commodity of his day's labor, which he must bring to market on that day or lose it forever?
It is impossible. He can not act on wages alone. He must combine with his fellow-workmen, and combination takes time. First, he must be sure that the higher prices which he pays for the necessaries of life are due to a general and permanent cause. It must be general and appear to be permanent in order to overcome the inertia of a large number of individuals, so that they can act in concert.
No man cares to strike for higher wages till he is sure of being supported by his fellow-workmen. He can not be sure of their support if they suspect that the cause of their distress is temporary. By the time a concerted demand has been made and acceded to and wages have been fixed at a higher level, the cost of living has gone steadily on to a higher level still, and the wage-earner, with his higher nominal income, is in reality poorer than before.
Nor is it true, as has been intimated in the course of this debate, that
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a general rise of prices, due to a decline in the value of money, causes a larger demand for labor. History proves the contrary. It proves that when prices are rising rapidly capital is withdrawn from the employment of labor in the creation of wealth, to speculate on the rising prices of commodities already created.That a general rise of prices is usually attended by distress among the laboring poor has been noticed by many observers.
Walker, in The Wages Question, alludes to the difficulty which the laborer experiences in adjusting his demands upon his employer to rapid and violent changes in the currency cost of living, and the still greater difficulty which he finds in the contest with the retail dealer from whom he obtains the necessaries of life. He shows, too, how the consumer loses his reckoning when the decline in the value of money forces him away from the landmarks of customary prices. "He learns to pay without dispute whatever the shop-keeper may demand, for he has no means of determining the justice of the demand. It is this temper which enables the retail dealer to gather his largest profits and work his worst extortions." "This it was, over and above the proper effects of currency inflation, which allowed retail prices to be carried up to such an unprecedented height in the United States during the war of secession, and to be kept up by combinations of dealers long after whatever reasons had existed for the advance ceased. The extravagant profits thus realized had not, as is well known, the effect to invite true competition tending to reduce prices, but merely served to allow the multiplication of shops and stands at every corner and to support an army of middlemen."
Professor Cairnes and John Stuart Mill have also noticed this effect of a general rise in prices.
Therefore the apparent and temporary prosperity attending a decline in the value of money is a redistribution rather than an increase in national wealth, and in this redistribution the chief losers are salaried employés and the laboring poor.
Historical illustrations are not far to seek.
Macaulay, describing the depreciation of the silver currency in England at the close of the seventeenth century, states that in the midst of the general distress the bankers accumulated immense fortunes.
Thiers says that the chief losers by the assignats of the French revolution were the wage-earners. "Lastly, the working people," he says, "always obliged to offer their services and to give them to any one who will accept them, not knowing how to act in concert to obtain a twofold or threefold increase of wages in proportion to the depreciation of the assignats, were paid only part of what was necessary to obtain in exchange such things as they needed."
Alison, speaking of the same period, says:
The people in the midst of the horrors of famine were exasperated at the sight of fortunes made out of the miseries which they endured.
Noah Webster, speaking of our Revolutionary currency, says:
The first visible effect of an augmentation of the currency and the consequent fluctuation of value was a host of jockeys who followed a species of itinerant commerce and subsisted upon the ignorance and honesty of the country people, or, in other words, upon the difference in the value of the currency in different places. Perhaps we may safely estimate that twenty thousand men in America left honest callings and applied themselves to this knavish traffic. A sudden augmentation of currency flattered people with the prospect of accumulating property without labor.
Arthur Young gives an actual case of a laborer living near Bury, in Suffolk. In 1799 he got 5s. a week, and could buy therewith a certain specified amount of the necessaries of life. In 1801, after a general rise in prices, his wages were 9s. a week, but he could not buy as much as before, though he now got an allowance from the parish rates in addition to his wages.
A writer in the Quarterly Review says that never in the history of Portugal was there a period of greater national distress arising from poverty than at the time when the gold mines of Africa and the tribute of Morocco poured a vast treasure into the kingdom.
It was thus in Spain —
He continues —
when ships came laden with silver and gold from Mexico and Peru. The fact was distinctly seen and the cause distinctly stated by a contemporary writer. All the necessaries of life advanced in price. The burden fell upon the poor.
Tooke, in his History of Prices, shows by repeated instances that a general rise of prices brings distress upon the laboring population.
According to all experience —
Says he —
whether within modern observation or recorded by history it may be laid down as an established maxim that labor is the last of the objects of exchange to rise in consequence of death or depreciation, and that conversely the price of labor is the last to fall in consequence of increased abundance of commodities or of increased value of money.
When the French war indemnity fund was poured into Germany at the close of the war of 1871, prices advanced and speculation bloomed, but the condition of the laboring population was not improved though wages were doubled. "The deposits in the savings banks did not increase," says a French writer. "The house of the mechanic and laborer was no better furnished, and his family were no better lodged and no happier; so that when the day of panic arrived the mechanic, after all his increase of wages, found himself as poor as before."
Mr. BLAND. If that is true, why is it that in all history, especially in our own history, during periods of low prices and hard times we have labor troubles and labor riots, and never when prices are high and times good.
Mr. ADAMS, of Illinois. During a general rise of prices many men are under a delusion and believe that they are better off than they really are. But I deny that times of rising prices are good times for laboring men.
Mr. WEAVER, of Iowa. It is not a delusion for a man to conclude that he is well off when he is working at good wages and is able to pay his debts.
Mr. ADAMS, of Illinois. My answer is to refer the gentleman to what the writers on this subject have established. I do not care to speculate on the question. If the gentleman will answer what has been said by Mr. Walker on the wages question and by other authors on prices, he will spend his time more profitably than by putting questions to me.
Mr. WEAVER, of Iowa. I have read the writings of Mr. Walker, and I know very well the teachings of the school to which he belongs but I do not accept everything he says as true.
Mr. ADAMS, of Illinois. Nor do I accept everything that any man says as true.
Mr. SYMES. Except members of this House. [Laughter.]
Mr. ADAMS, of Illinois. Excepting members of this House, of course.
Mr. McCOMAS. Not on matters of opinion.
Mr. ADAMS, of Illinois. The historical citations which I have read tell the same story over, and over again. A general rise in the prices of commodities injures the wage-earner in two ways: first, the cost of his living rises faster than his wages rise; secondly, the profits of retail trade and the temptation to speculate on rising prices withdraws capital from the employment of labor.
Mr. WEAVER, of Iowa. One other question. Why was it that during the period of "inflation" — during the war period and just after the war — the people of the United States were out of debt?
Mr. ADAMS, of Illinois. I think they were getting into debt.
Mr. WEAVER, of Iowa. The fact is established by the report of the Secretary of the Treasury in 1865, in which it is stated "the people of the United States are now comparatively out of debt." And so they were. Everybody had money in bank. Since that people have got into debt. Their money has been taken away from them.
Mr. ADAMS, of Illinois. I must hurry on with what I proposed to say; and in reply to the gentleman from Iowa I will only remark that I have not gone into that question. I do not think it necessary for me to explain all the financial phenomena that occurred from 1860 to 1865 or 1873. I believe, however, that all the financial phenomena that have occurred in this country from the time of the discovery of gold in California have been greatly complicated with events of a different character, so that I doubt whether they afford a normal guide for the establishment of any financial theory. For instance, in the period immediately following the outbreak of the war we had an extraordinary expansion of currency, and also an extraordinary convulsion in the industrial world because of the destruction of property by the operation of the war and the withdrawal of so many men from the various productive occupations. To resume: The prosperity, therefore, which is foretold as a consequence of unlimited silver coinage would not be real; it would not be an increase of national wealth. It would be simply a spoliation of the wage-earner, effected in the first instance by the retail dealer, who in his turn would be forced to share his plunder with the jobber, the wholesale dealer, and the money-lender.
It is claimed that a decline in the value of money would benefit the debtor class. Some debtors doubtless would be gainers, those, namely whose debts were incurred before the decline was foreseen by the lender and are payable after the decline has taken place. They could pay their debts in cheaper dollars than were in contemplation of the parties when the loan was made and the rate of interest agreed on.
A law of unlimited silver coinage will not help those who have occasion to borrow money after the law is enacted or its enactment is foreseen. They will have to pay a rate of interest high enough to insure the lender not merely against the loss which he can calculate but also against the loss which he can not calculate but merely apprehends. Are not such borrowers members of the debtor class within the view of legislation? Is it worth while to lessen their chances of making an advantageous bargain with a money-lender merely to give to existing debtors an advantage which they did not bargain for when then rate of interest was fixed?
If the rate of interest on a Western farm mortgage is now 10 per cent as we have heard in this debate, how high will it be on a new loan or on a renewal of an old loan if the money-lender knows beforehand that the debt will be paid in cheaper dollars? The amount of private and corporate indebtedness now existing in this country is enormous, it is true. It will be so for many years to come. New loans will be made and old loans will be extended. The annual interest on this indebtness is great sum, but it is small compared with the amount yearly paid in wages. We can lighten this burden of interest in one of two ways. We can depreciate the money in which the interest is paid, or we can assure
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capital against appreciation, and so enable new loans to be made at lower rates of interest as fast as existing loans fall due.The first method benefits existing debtors at the expense of wage-earners and consumers generally. The second method benefits the community at large by increasing the effectiveness of capital and labor in the production of wealth. Even the benefit conferred on existing debtors by a depreciation of the currency is a questionable one. A debtor is usually something besides a debtor. He does not make his living by being in debt. He may be wage-earner as well as debtor. Depreciation of the currency might injure him as much in his character as wage-earner as it would benefit him in his character as debtor.
Such, according to my view, would be the results of unlimited silver coinage. Contraction first, followed by expansion. First paralysis of commercial credit; then, the fever of speculation. To wage-earners it means shrinkage of income by the rise in the cost of living; to merchants, manufacturers, and bankers, a brief prosperity which vanishes when the bubble of expansion breaks; to existing debtors, a questionable advantage which they did not bargain for; to the borrowing class, the burden of a higher rate of interest; to the speculator, a larger chance of profit in every wave of confidence or alarm that sweeps through Wall street; to the high-grade silver mines, a temporary increase of dividends; to the low-grade mines, a promise of dividends broken almost as soon as made; to France and Germany, assurance of a larger gold reserve; to silver bullion, first a sudden rise, then a rapid and, it may be, a permanent decline. It means the indefinite postponement of the only satisfactory settlement of the silver question. If France and Germany shall succeed in supplying themselves with a gold currency like that of England, there will be less reason than there is to-day to hope for the establishment of an international gold and silver union, which is the desire of the great majority of reasonable men.
As to limited coingage of silver under the law of 1878, it has been supported by some and opposed by others because it is supposed to be a step in the direction of unlimited coinage. If we leave the prospect of unlimited coinage altogether out of view, and consider limited coinage on its own merits, I think it will be found that all the arguments in its favor and some of the arguments against it have been much overstated.
Suppose a case. Suppose limited coinage goes on under the law of 1878 for five years till we have coined one hundred and forty million of silver dollars in addition to the present stock. Let us assume that we can carry this additional amount of silver in our circulation without causing depreciation, and that at the end of five years gold coin will circulate freely in the American market. If we assume this we must also assume that the purchasing power of every American dollar, gold, silver, or paper, will be the value of 23.22 grains of fine gold in the markets of the world. Gold can not freely circulate here at a value materially different from that at which it circulates in Europe.
Would our currency be better or worse in the case supposed than it would be at the end of the same five years if we were to suspend silver coinage to-day?
Would it lighten the burdens of existing debts? How so, if gold still circulated? Would not every debtor for every dollar nominated in his bond be forced to pay the international value of 23.22 grains of fine gold? Would it reduce the international value of gold? Only in so far as it would add to the world's stock of metallic money.
The gentleman from Ohio said recently that if we were to abolish the silver money of the world, the gold money of the world, having more work to do, would be enormously increased in value. It would be the same whether we destroy the silver, leaving the gold to do the work of gold and silver, or whether we melt all the gold and silver into a compound metal and then destroy about one-half of the compound metal coins.
The mass —
Says he —
is the same in either case, and it is the mass of the whole and not the way it is coined that determines the value of the whole and of each piece.
When the gentleman from Ohio says this he evidently supposes that the ultimate result of suspension of silver coinage in this country would be to destroy silver money. I do not understand how he comes to think so, but I agree that if that were to happen it would greatly increase the value of gold by diminishing the world's supply of money. But by the same reasoning the coinage of one hundred and forty million of silver dollars during the next five years will not diminish the value of gold except in so far as it increases the world's stock of gold and silver money. To what extent will it do this? An addition of $140,000,000 to a total stock of $7,000,000,000 would be an addition of 2 per cent. — that is, two fifths of 1 per cent. in each of the five years.
But the coinage of $140,000,000 of silver in this country would not add that amount to the world's stock of money. If we did not coin it some of it would be coined in India, or else by supplying a demand in the arts in India and Europe would prevent the withdrawal of silver coin from circulation to satisfy the same demand. Is it not clear that, leaving out of view for the present the supposed ultimate effects of one policy or another, the direct and immediate effect of a continuance of limited silver coinage could only be to reduce in a slight degree the value of gold in this country by reducing in the same slight degree the value of gold throughout the world? Whatever evil there may be in silver coinage we bear alone; the good it does, if any, we share with all the world; and yet some advocates of silver coinages call it an American policy, and ask in a tone of superior scorn, "What have we to do with abroad?"
Will this additional silver coinage cause a corresponding permanent addition to the number of underpreciated dollars circulating in the United States? In other words, will it give us a greater share of the world's stock of money? That can not be done, either by coining more silver or coining more gold or issuing more paper. The value of the total amount of money which this country can keep in circulation is fixed by a law higher than any that Congress can enact.
In a letter from John Adams to the Count de Vergennes, written in 1780, the law is thus stated:
The amount of ordinary commerce, external or internal, of a society may be computed as a fixed sum. A certain sum of money is necessary to circulate among the society in order to carry on their business. You may emit paper or any other currency within this rule and it will not depreciate. After you exceed this rule it will depreciate and no power or act of legislation hitherto invented can prevent it. In the case of paper, if you go on emitting forever the whole mass will be worth no more than that which was emitted with the rule.
This principle I consider to be as sound to-day as it appeared to John Adams one hundred and six years ago. If we now have in circulation $1,600,000,000, each worth 23.22 grains of fine gold, it is not because Congress has so ordained. It is because the amount of our commerce, external and internal, requires that amount to circulate in order to carry on our business. Congress may indeed by wise or unwise legislation strengthen or impair commercial credit, or in some other way increase or diminish the external or internal commerce of this country. But so long as that remains what it is, and the business habits of our people are unchanged, the real value of our total circulation will remain what it is.
If we need more money year by year as our commerce increases we may supply the additional demand partly by coining silver and partly by coining gold mined in this country or imported from abroad. If we supply the entire demand by coining silver gold will not flow in and the product of our gold mines will be exported. If we coin no silver gold will flow in more abundantly.
Do gentlemen say that gold can not flow out so long as the balance of trade is in our favor? True enough! But expansion of the currency will reverse the balance of trade. It will raise prices here compared with prices abroad. That will check exports and stimulate imports. The surplus of imported goods will be paid for in exported gold. The same results will follow whether we coin more silver, or issue more paper, or coin the product of newly discovered gold mines.
Germany appeared to ignore this law in 1876. The German Government was in haste to secure a gold currency. A large amount of gold coin was issued from the mint before room had been made for it in the circulation — that is, before the internal and external commerce of Germany required the additional amount. What was the consequence? The new gold coin began immediately to be exported. By April, 1876, three months after the emperor had declared the establishment of the gold standard, 37,000,000 francs had crossed the Belgian frontier and been melted down and recoined into Belgian Leopolds d'or. So says Edward Suess, in Die Zukunft des Goldes, published at Vienna in 1877.
I have said that Germany appeared to ignore this law of money. It may be that Germany ignored the possibility that the French mint would be closed against silver. Had the French mint remained open the gold price of silver bullion would have stood at nearly 60 pence per ounce. Germany could have rapidly withdrawn silver and might have secured and maintained a gold currency. France would have had a currency of silver. The trouble was not so much that Germany desired to sell as that France refused to buy.
I believe, therefore, that the effect of coining one hundred and forty million of silver dollars during the next five years will be simply to change the proportion between our silver coinage and our gold coinage. The total value of our entire circulation will hardly be affected. The question is whether American industry will be more benefited by increasing the proportion of gold or increasing the proportion of silver in our metallic circulation.
Leave out of view the question of convenience in the size or weight of the coins as they actually circulate among the people. It is a comparatively insignificant question. Ten dollars in gold is easier to handle than ten silver dollars; one silver dollar is infinitely preferable to a gold dollar. Coin of either metal is less popular in this country than paper currency redeemable in coin.
Leave out of view the saving in expense effected by the excessive seigniorage on silver. That is a gain to the Treasury. It hardly benefits American industry. The real question is whether under existing circumstances a currency stronger in gold or a currency stronger in silver would do more in the next five years toward the creation of national wealth by the co-operation of capital and labor.
That capitalists generally are opposed to silver coinage has been stated so many times in the course of this debate that it may be assumed to be a fact. It has also been repeatedly stated, with more or less extravagance of language, that capitalists in their view of the coinage question
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are influenced by a selfish regard for their own interests. This, also, may be assumed to be a fact.It has also been assumed, rather than stated, that capitalists generally, or an influential class of capitalists, have a selfish interest in opposing silver coinage in order to effect a rise in the value of money. Let us analyze this assumption.
The capitalist who would gain by a rise in the value of money can not be a merchant. How can a merchant gain by a decline in the prices of goods? Nor can he be a manufacturer. A manufacturer is an employer of labor. A rise in the value of money gives to labor a larger share in the product of industry. The price of the product sinks faster than the price of the labor by which it is produced. The manufacturer, to get even with his employés, must reduce wages.
Indeed, it may be said of labor and capital in their relation to each other that if we regard their temporary interests only it is labor and not capital that desires a rise in the value of money, since this gives labor an advantage till wages are reduced; while it is capital and not labor which desires a depreciation of the currency, since this gives capital an advantage until wages are raised. It is said that a strike for higher wages generally succeeds, while a strike to prevent a reduction of wages generally fails. If that is true, it shows that labor rarely strikes for higher wages till it is entitled to them; and that capital rarely reduces wages till it is entitled to the reduction.
In short, a general rise or general decline in money wages is a readjustment to new conditions, and as the readjustment frequently entails serious loss on both parties, the permanent interests of labor and capital alike would be best served by a steady currency that neither rises nor falls. Let me here say in parenthesis that in one department of the North Chicago Rolling Mills there prevailed for a series of years a plan of regulating wages on a sliding scale by which wages rose and fell month by month with the monthly rise and fall of the market price of the product. Such a plan can not be applied to wages generally, and therefore manufacturers generally have reason to dread rather than desire a rise in the value of money.
But if neither merchants nor manufacturers can gain by a rise in the value of money, how can bankers gain? The main business of a banker is to use the deposits of merchants and manufacturers in discounting the commercial paper of other merchants and manufacturers. When they thrive he thrives; when their business is dull his business is dull. This is true without regard to the fact that bank shareholders are frequently themselves manufacturers or merchants.
It is true that banks are also bondholders, but their interest as such is slight. If I am interested as bondholder to the extent of $4,000,000, and at the same time am interested as merchant or manufacturer to the extent of $50,000,000, how can it be claimed that on the whole I am interested in a rise in the value of money and in a decline in the prices of goods? That is about the situation of all the national banks Chicago, taken together at the present time. In the Chicago Inter Ocean of March 8 there is a statement of the condition of these banks at the close of business on March 1.
Following are the totals:
| Loans | $50,779,418 |
| Bonds deposited with United States Treasurer | 1,024,500 |
| United States bonds on hand | 1,208,050 |
| Unspecified bonds on hand | 1,850,717 |
| Cash and exchange | 31,047,619 |
| Real estate and office fixtures | 684,297 |
| Deposits | 69,557,599 |
| Capital and surplus | 15,406,600 |
| Undivided profits | 996,368 |
| Circulation | 694,790 |
I have assumed that these national banks are interested as bondholders to the extent of $4,000,000, that being about the total amount of all their bonds. Their bondholding interest is not as great as that. Against $1,024,500 of bonds deposited with the Treasurer they have $694,790 of circulation, part of which they can lend to merchants and manufacturers. As to the $3,058,767 of bonds on hand they are not kept as permanent investment, but as an available fund to be turned into cash as occasion arises. I have also assumed that these national banks are interested as merchants and manufacturers to the extent of $50,000,000, that being the amount of their loans on March 1. The amount which they could safely lend in a favorable state of the market would be greater than that, as an examination of the table will show.
The capitalist, therefore, who has an interest in causing a rise in the value of money can not be either merchant, manufacturer, or banker. He must be a bondholder proper. Not one who uses his bonds as collateral to borrow money for business or speculative purposes. Not one whose fortune is invested in bonds in order that he may live on the 3 or 4 per cent. interest on the investment.
How much of a class does he make in this country? It is utterly insignificant in numbers and influence. The money kings of this country are not bondholders proper. They are the great merchants, the great manufacturers, the great bankers, the great railway shareholders, the great bonanza mine owners. They are not interested in doubling the value of money.
Mr. BROWN, of Pennsylvania. Still Vanderbilt stored away a very large bundle in Government bonds.
Mr. ADAMS, of Illinois. Fifty million dollars. Not a very large proportion of his aggregate wealth. Is there any man here who, if his wealth were $50,000 or $5,000,000, would invest the bulk of it in Government bonds? Men make such investments as a mere accessory to their other investments — a fund that can be converted into cash at any moment. Any man who would invest the bulk of his property in longtime Government bonds must be a man of very luxurious, unenterprising, un-American turn of mind. There are only a few such men in this country, and they have no influence on financial opinion.
Mr. WEAVER, of Iowa. The gentleman must admit that the banks control the bulk of the bonds.
Mr. ADAMS, of Illinois. I do not know whether the national banks control the bulk of the bonds or not; but the gentleman, from his point of view, is bound to show as a matter of fact that a national bank, taking into consideration its deposits, its loans, its capital, and its surplus, and setting off against these the very limited amount of Government bonds which it may have, is somehow interested in the rise in the value of money.
Mr. WEAVER, of Iowa. I can give the gentleman an instance.
Mr. ADAMS, of Illinois. I have only fifteen minutes remaining.
Mr. WEAVER, of Iowa. Then I will not take up the gentleman's time.
Mr. ADAMS, of Illinois. I was about to refer to a statement of the gentleman himself. When the silver question was under discussion a week or two ago, my colleague from Illinois declared that a severe contraction of the currency would injure all classes of society except the moneyed class. Thereupon my other colleague from Illinois rose and suggested that all classes of society without exception would be injured thereby. Thereupon the gentleman from Iowa arose and assented, declaring that we must save the moneyed class from the injury which, as he supposed, they were striving to inflict upon themselves.
Mr. WEAVER, of Iowa. The gentleman must have misunderstood me. I hold, on the contrary, that a rise in the value of money always benefits the man who owns money.
Mr. ADAMS, of Illinois. Will the gentleman examine the RECORD and see whether he did not say just what I have attributed to him?
Mr. WEAVER, of Iowa. If I am so reported in the RECORD it is a mistake. I repeat that a rise in the value of money always benefits the man who owns money.
Mr. ADAMS, of Illinois. I admit that the bondholder proper might profit in that way; but I claim that the bondholders would be an insignificant part of the population.
Mr. BRECKINRIDGE, of Arkansas. Does the gentleman deny that the holder of railroad stock or railroad bonds would be benefited?
Mr. ADAMS, of Illinois. There is a great difference between stocks and bonds. I admit that if a man has his means invested in long time railroad bonds for the same purpose that I am supposing the Government bondholder proper has invested his means in Government bowls he is interested in the rise in the value of money.
Mr. BRECKINRIDGE, of Arkansas. Is he not benefited in the same way that the holder of Government bonds is?
Mr. ADAMS, of Illinois. Certainly. But the case is different with the man who holds bonds only for a short time.
Mr. BRECKINRIDGE, of Arkansas. I supposed the gentleman applied his remark to the whole creditor class of the country.
Mr. ADAMS, of Illinois. What I mean is this: Reference has been made to the national banks and capitalists generally as interested in the rise of money. I am trying to analyze this question, and see which classes are so interested and which are not. I will admit that a creditor as a creditor, and to the extent to which he is a creditor, is benefited by a rise in the value of money in the same way that a debtor as a debtor is injured.
Mr. BRECKENRIDGE, of Arkansas. That is all I contend for.
Mr. ADAMS, of Illinois. But if my colleague from Illinois and the gentleman from Iowa see, as I see, that severe contraction would injure the capitalists of this country, can we suppose that the capitalists do not themselves see it? Do we not know that their constant study, day in and day out, is to see what will endanger their pecuniary interests? They must see it. Their opposition to silver coinage can not be due to a desire to raise the value of money. It must be due to some other selfish, motive. It may be the fear that a reduction of the gold balance in the Treasury may bring a frost upon commercial credit. Perhaps they dread the contraction of credit which they think would follow a suspension of gold payments by the Treasury more than they dread the depreciation which would ultimately follow unlimited silver coinage. They may be like people in a theater when there is a smell of smoke in the air. They may be afraid because they expect others to be afraid. With them as with a crowded audience in a theater it is a legitimate cause of alarm.
That capitalists profess to be alarmed is admitted. Their professed alarm has been the key-note of many a silver speech since this session of Congress began. We know for a fact that much capital now seeks shelter in bonds and call loans in the money centers, so that interest
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there is low; while interest in the West and South is high. What motive has thus brought capital from its free and wholesome circulation in the arteries of American industry to clog the money centers of the country? It can not be the hope of gain. It must be the fear of loss. No other motive than these two can be attributed to a capitalist, as such.Whether the apprehensions of capital are reasonable or not is not the question. Reasonable or unreasonable, they cause a substantial loss to American industry. Capital and labor must work together like two horses in a team. If either horse is restive the team is useless for the time being. It is just as useless whether the horse be reasonably frightened by the approach of a real danger, or unreasonably frightened by the roar of a departing locomotive or by the flapping of a petticoat on a clothes-line. It would be just as wise, moreover, to try to soothe the unreasonable fears of a horse by threatening him with the real terrors of the lash as it would be to try to soothe the fears of capital, unreasonable as they may be, by denouncing the rapacity of the money-lender and demanding a cheaper dollar in the name of the debtor class.
The opposition of capitalists to limited silver coinage is, doubtless, largely due to the belief that it will lead to unlimited coinage.
Is it not true that many advocates of limited coinage support it on that ground? The removal of this fear of unlimited coinage would be a real gain to American industry. It would encourage the investment of capital in, the productive employment of labor.
It remains to consider the international effect of silver coinage in the United States.
Nearly all men agree that the welfare of the industrial world is concerned in the concurrent use of gold and silver money on a uniform standard of value. Nearly all agree that this can not be permanently secured except by international agreement. The United States have twice invited the nations of Europe to a conference with this end in view.
Accordingly that form of our currency is the better, other things being equal, which more strongly tends to hasten the settlement of this great question by international agreement.
What is the silver question of to-day in Western Europe? It is not the theoretical question of the standard of value. That theoretical question was settled, so far as the prevailing public sentiment of Western Europe was concerned, by the Paris monetary conference of 1867, to which I shall hereafter refer. It was there settled that the best standard by which to regulate the value of all the gold and silver money of the world was the single standard of gold. The wisdom or unwisdom of the decision I do not discuss. I speak of the historical fact.
Thereupon a new question arose which first broke out into open rivalry between France and Germany at the close of the war of 1871. The question was which nation could sell its silver to other nations and thereby secure for itself a currency such as England had maintained since 1817, and the United States from 1834 till 1861, consisting largely of the metal which public sentiment in Western Europe had recently declared to be the best standard of value. The wisdom or unwisdom of this endeavor on the part of France and Germany I do not discuss — I speak of the historical fact.
This is the state of the silver question as it stands to-day in Western Europe. It is with reference to this state of the question that our silver policy in its international aspect must be judged.
It is idle to appeal to the disinterested regard of a foreign nation for the welfare of other nations. True wisdom lies, as Washington said in his farewell address, in appealing to the enlightened self-interest of each and every nation.
By continuing silver coinage in this country we produce the impression that we are more deeply interested in making a temporary market for silver bullion than we are in the international settlement of the silver question or in the possession of a strong reserve of gold such as the continental nations of Europe are contending for. By suspending silver coinage now, or announcing its suspension in the near future, we compel the financiers of Europe to face the probability of a larger flow of gold from Europe or a smaller flow of gold from the United States. This is why Cernuschi declares that every silver dollar that we coin is an obstacle to international bimetallism.
Mr. SYMES. Does not the gentleman admit that the demonetization of silver has in a great measure contributed to the present commercial depression and monetary embarrassment?
Mr. ADAMS, of Illinois. I believe the present state of things is fraught with considerable evil by inducing a contest among the nations of the world for a strong reserve of gold; and this without reference to the question of the proper standard.
Mr. SYMES. Does not the gentleman know the propriety of the bimetallic standard is now conceded in London and in the commercial centers of Europe by economists who a few years ago thought the single standard the best?
Mr. ADAMS, of Illinois. I do concede that the present state of things is fraught with evil, and I will say in passing it is an evil we can not remedy by legislation in the United States. It is an evil which has arisen from the action of other nations, and the only cure for it is an international arrangement by which a concurrent use of gold and silver shall be secured. It is not the question of the double or single standard.
Mr. SYMES. My question was whether the gentleman does not admit that the demonetization of silver has in a great measure contributed to the present commercial depression.
Mr. ADAMS, of Illinois. What does the gentleman refer to as "demonetization?"
Mr. SYMES. The action of Germany and the United States.
Mr. ADAMS, of Illinois. I admit that there has been within the last thirty years an endeavor on the part of the leading nations of Europe to gradually substitute gold for silver. But the action of Germany, to which the gentleman has referred, was a mere incident in the proceeding; and as for what he calls "demonetization" in this country, I do not think it has had the effect the gentleman states. The gentleman refers to the law of 1873.
Mr. BAYNE. In 1873 there was no silver circulation to demonetize.
Mr. SYMES. But the act of 1873 stopped the coinage of silver.
Mr. ADAMS, of Illinois. In the conference of 1878 our position was unfortunate in two ways: First, because we appealed to Germany not to part with silver, while at the same time, by coining silver in this country, we withdrew it from the market in which Germany was resolved to sell; secondly, because our attitude in 1878 was in grotesque contradiction with our attitude in 1867.
In the Paris conference of 1867 we were represented by Mr. Ruggles. In his address to the conference, after explaining the immense resources of the United States as a producer of gold bullion, Mr. Ruggles explicitly states that it was in view of this great prospective development of the gold-mining industry of this country that he felt bound to urge that the coinage of the world should be brought to one uniform system based on the gold standard.
In a letter addressed to Mr. Ruggles by the chairman of the Senate Committee on Finance the same views are expressed. The adoption of the gold 5-franc piece is recommended as the common standard of value in all civilized nations.
If this is effected —
Continues the writer —
France will surely give up her vain attempt to maintain the double standard. A common gold standard will regulate silver coinage, of which the United States will furnish the greater part, especially for the China trade.
The impression produced in Europe by the views expressed by Mr. Ruggles and Senator SHERMAN I gather from a work entitled Zur Munz Frage, by Moritz Mohl, published in Germany in 1871. In this work the passages before cited relating to the interest of the United States as a bullion-producing nation are printed in small capitals, and the author sarcastically comments thereon as follows:
We must at all events be grateful to Messrs. Ruggles and SHERMAN for the publication of the reports and correspondence of these very able and far-seeing American statesmen, who treat this important subject from the highest stand point and with the broadest views of international trade, and the dominant share thereof claimed by the people of the United States by reason of their possession of a larger part of the eastern and western coasts of America, but it, will be well if these frank utterances remind us that in this matter other interests than the common interests of all play an important part, and that the brotherly love of the United States to other nations is thereby shown to be in wonderful accord with the desire to drive a sharp bargain with Europe immensely profitable to North America.
Such was the impression produced in Europe by the attitude of this country in 1867. We seemed to be appealing to Europe in the interest of the world at large to invest largely in our special product. Out special product in 1867 was gold bullion. By 1878 things had changed. Not gold but silver bullion had now become the special product in the price of which we were chiefly interested. And so we change our tune. With the same lofty appeal, in the interest of the world at large, we call on Europe to abandon the gold standard and come to the rescue of silver bullion. Is it to be wondered at that our overtures to the European powers were received with frigid courtesy and half-concealed suspicion?
In the conference of 1881 our position was much stronger; our overtures were treated with more respect. It was not altogether because we made a more effective appeal to the disinterestedness of Europe. It may have been because between 1878 and 1881 we had demonstrated our ability to resume specie payments and to draw a large amount of gold coin from Europe.
Although Germany appears to be the chief opponent of an international settlement of the silver question, the attitude of Germany can not be fully understood without reference to the large share which France has had in bringing about the present state of things.
From the time of the Crimean war the French Emperor had been drawing closer the ties of commercial and political friendship between France and England. Nothing would have better promoted his plans than a monetary union with England at the expense of Germany. There is no doubt that in 1868 he was preparing to adopt the gold standard for which the Paris conference of 1867 had declared. This appears from the form of the circular inquiries issued by the French Government to the department officials, the chambers of commerce, and the Bank of France. The time was ripe for the change. For nearly sixteen
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years France has been strengthening her gold reserve. She had absorbed $680,000,000 of gold and exported $345,000,000 of silver.Had the issue of the war of 1871 been different; had the German military system been as inefficient as the French; had the French army been what the German army was, the finest combination of science, discipline, and glowing national feeling that Europe ever saw, the financial history of the last fifteen years in Europe would have been different. France would now have not merely the gold standard but a gold currency like that of England. Germany would have a currency of silver. It was undoubtedly the knowledge on the part of Germany of the intentions of the French Government which hastened the so called monetary reforms of the German Empire after the war. The same cause has I believe tended to delay the settlement of the silver question.
This contest between France and Germany for the possession of a gold currency illustrates the probable course of the controversy if it is not settled by international agreement. The result will be the acquisition of a gold currency like that of England by each nation which is strong enough or fortunate enough to force its silver on some other nation. The process will go on till the world's supply of gold is concentrated in some nations and nearly all of the world's supply of silver is concentrated in other nations. That the leading nations of Europe have shown a decided preference for gold for many years, is an indisputable fact. We can not blink it. France closed her mints against the silver of Germany in 1876. By this move France checkmated the German policy, and a large part of the gold coined in the German Empire came back to France. France did not close her mints against the gold of California and Australia, although as gold came in from the West silver flowed out to the East and was coined into rupees.
Many gentlemen suppose that the adoption of a gold currency by several of the leading nations of the world will lead to the abolition of silver money throughout the world. Such a result is no more likely to follow than a collision between the earth and the moon. No nation will adopt a gold currency except by selling its silver to other nations. So long as a single great nation of Europe holds to the purpose of increasing its gold circulation the other nations of Europe will in self-defense close their mints against silver.
It is claimed that the existing state of things has two evil results. The first is said to be an existing evil. It is the general feeling of insecurity among capitalists throughout the world, which may be due to a dread of silver monometallism or to a vague fear of financial convulsion. The second evil belongs to the future rather than to the present. It is the gradual contraction of the world's metallic circulation by the refusal of several nations of Europe to open their mints to silver.
Neither of these evils can be permanently cured by legislation in the United States, although both may possibly be alleviated abroad if we consent to become a silver monometallic nation for the accommodation of gold monometallism in Western Europe. How many will advocate this as an American policy?
What is to be desired is the adoption of an international agreement by which each nation shall bind itself to use its fair share of silver and so bind itself not to use more than its fair share of the world's stock of gold. The adoption of such an agreement would permanently raise the price of silver bullion.
It is said that suspension of silver coinage in the United States would add to the difficulty of the silver question by depressing the market price of silver bullion.
How comes it that the movement for international bimetallism or something equivalent thereto was stronger in 1881 than in 1878, and is said to be stronger in Europe to-day than it was in 1881? The price of silver bullion has been falling all the time.
What particular form the international gold and silver union of the future will take is comparatively unimportant. It may be free coinage of both metals at an agreed ratio. That is, it may be bimetallism in its strict and original sense of the double standard. It may be the issue of silver bullion certificates based on the market value of silver in terms of gold to be ascertained and determined from time to time by international authority. The only really essential feature is that there shall be one standard of value everywhere, and that on that standard each nation shall securely hold its fair share of the gold and silver money of the world.
I do not claim that we can force European nations to come to a settlement of the silver question. What I do claim is that by announcing our determination to suspend silver coinage in the near future we can remove from the minds of European financiers a motive which now operates to delay the formation of an international gold and silver union. They know that by our annual silver coinage of $28,000,000 we relinquish to other countries a large amount of gold which would otherwise be in circulation here. They also know that many able, earnest, and eloquent men in Congress are urging unlimited coinage of silver. They have some reason to hope that this country is about to commit and irretrievable error which Europe will be swift to turn to her own advantage. They have but to wait till our Mint is open to silver and the five hundred millions of gold now circulating in the United States will go to strengthen the gold reserves of France, Belgium, and Germany.
By enlarging the proportion of silver in our circulation we do more than postpone the settlement of the silver question. We lessen our influence in the negotiations by which alone that question can be settled. As the President says, "We render ourselves an undesirable party to any future monetary conference of nations." In such a conference we ought to be and might be the strongest among the nations. Why should we suffer our Delilah, of silver bullion to shear away our strength?
The word bimetallism has been so loosely used as to have almost lost its value as a term of definition. In its strict and original sense it means not merely the use of both metals as money, but the double standard of value. In a larger sense, in which it is now frequently employed, it means the large concurrent use of gold and silver money on one uniform standard of value throughout the civilized world.
In this newer and larger meaning of the word I believe in international bimetallism. Soon after we cease to give to Europe inducement to delay, we shall be invited to a monetary conference to found an international gold and silver union. We ought to go not as a suppliant craving relief from a disproportionate weight of overvalued silver. We ought to go as a powerful, and therefore influential, member to give rather than to receive relief. We should represent not merely or mainly the temporary interest of our silver mines, but the permanent interest of a great industrial nation in a stable currency not only for ourselves, but for the nations with whom we deal. In this way and in no other way can we help to establish on a secure and permanent basis the bimetallic money system of the world. [Applause.]