Read Ebook: If Not Silver What? by Bookwalter John W John Wesley

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empered and revengeful as the Moors. If not, why not? They all have the gold standard. You may say that this answer is foolish, and I don't think much of it myself, but it is strictly according to Scripture . The retort is on a par with the proposition, and both are claptrap. The progress of nations and their rank in civilization depend on causes quite aside from the metal basis of their money.

We must remember that for many years after the establishment of the Mint we had in this country little or no coin in circulation except silver, and were just as much on a silver basis then as Mexico is now. Were our forefathers, then, inferior to us, or on a par with the Mexicans and Chinamen of the present day? Even down to 1840 the silver in circulation greatly exceeded the gold in amount.

In all the Spanish American States there are 60,000,000 people, and they have a little less than 0,000,000 in silver. Not per capita! This is a startling statement, I know, but it is official, and you will find it in the last report of the Director of the Mint . The South American States have but 83 cents per capita in silver, and Mexico has but .50. With a population nearly twice that of Great Britain, they have much less silver, and less than half of that of Germany, though having a much larger population. In fact, to give the Spanish American nations as large a silver circulation per capita as the average of England, France and Germany, they must needs have nearly 0,000,000 more, or nearly three times as much as they now have. It looks very much as if the "dump" would have to be the other way.

There is no such thing as intrinsic value. Qualities are intrinsic; value is a relation between exchangeable commodities, and, in the eternal nature of things, never can be invariable. Value is of the mind; it is the estimate placed upon a salable article by those able and willing to buy it. I have seen water sell on the Sahara at two francs a bucketful. Was that its intrinsic value? If so, what is its intrinsic value on Lake Superior?

No more than an invariable standard of friendship or love. Value is, in fact, a purely ideal relation. All this talk about an invariable dollar which shall be like the bushel measure or the yard stick is the merest claptrap. The fact that gold men stoop to such language goes far to prove that their contention is wrong. The argument violates the very first principle of mental philosophy, in that it applies the fixed relations of space, weight, and time to the operations of the mind. Would you say a bushel of discontent or eighteen inches of friendship? Men who compare the dollar to the pound weight or yard stick are talking just that unscientifically. Invariable value being an impossibility, and an invariable standard of value a correlative impossibility, all we can do is to select those commodities which vary the least and use them as a measure for other things; but you will not find in any economic writer that any metal is a fixed standard. And this brings me to consider that singular piece of folly which furnishes the basis of so much monometallist literature, namely, that gold is less variable in value than silver, and that one metal as a basis varies less than two. Some of our statesmen have got themselves into such a condition of mind on this point as to really believe that, while all other products of human labor are changing in value, gold alone is gifted with the great attribute of God--immutability. It is sheer blasphemy. It is conclusively proved, and by many different lines of reasoning, that silver is many times more stable in value than gold.

In February, 1873, a ten-ounce bar of uncoined silver sold in New York city for in gold, or .82 in greenbacks. To-day the ten-ounce bar sells there for .90.

Going through a long list in the same manner, we find that the ten-ounce bar of uncoined silver would buy in '73, in New York city, twenty-three and a half bushels of corn, to-day twenty-four bushels; of cotton then eighty pounds, to-day eighty-six pounds--and there is "a great speculative boom in cotton," and has been for some time, but on the average price of this year silver would buy much more. Of rye, then about fifteen bushels , to-day thirteen bushels; of bar iron then 310 pounds, to-day 460 pounds, and so on through the market. In the Central West in 1873 it would have taken ten such silver bars to buy a standard farm horse, Clydesdale or Percheron-Norman.

Will it take anymore bars to-day at .90 each?

There is another way to calculate the decline, and that is by taking the average farm value instead of the export or New York city price, and including all roots and garden products not exported, and this makes the showing far more favorable to silver. The Agricultural Department at Washington has recently issued a pamphlet showing the crops of every year since 1870, and the average home or farm price, together with the total for which the whole crop was sold. Send for it and contrast the prices given in it with those known to you to-day, and you will find that in rye, barley, oats, potatoes, and many other things the decline has been very much greater than is given above. In short, it takes more farm produce to buy an ounce of silver than it did in 1873, and twice as much to buy an ounce of gold. Of Ohio medium scoured wool, for instance--and that is the standard wool of the market--it would have taken in 1873 two and a half pounds to have bought an ounce of silver, while to-day it will take considerably over three pounds. The monometallists habitually talk, and have talked it so long that they believe it themselves, as if silver had become so cheap that the farmer ought to rank it with tin, lead, or spelter; but if the farmer will try the experiment he will find that it takes a good deal more of his product to buy a given amount of silver than it did in 1873.

The plain truth of the matter is that the time has come for both gold and silver to increase in purchasing power; but by reason of demonetization almost the entire increase has been concentrated in gold, leaving silver almost stationary as to commodities in general, but somewhat enhanced as to farm products. In the name of common, honesty, is it not a high-handed outrage to make the old debts of that period payable in the rapidly appreciating metal, instead of one that has merely retained its value? and is it not hypocrisy to speak of such a system as "honest money," and affect to deplore the dishonesty of those who insist upon their right to pay in the least variable metal, which was constitutional and the unit of our money from the very start?

Gospel truth! And there is but one kind of perfectly honest money--that which will give the creditor an equivalent in commodities for what he could have bought with the money he loaned. Surely no honest man will pretend that gold to-day does that. At this point we must admit the painful truth that, in that sense, there is no perfectly honest money, that is, no money that does not change somewhat in purchasing power; and how to remedy this has been the great problem with the greatest minds among financiers--with all financiers, in fact, who are more anxious for justice than greedy of gain. But surely there should not be added to an innate variability that much greater variability due to the mischievous interference of interested parties, through the power of the government. And herein is made manifest the reckless folly of the gold men in fighting against the soundest conclusions of science and honesty, in striving for a standard of one metal allowing the greatest variation, instead of two which by varying in different directions might counteract each other.

Gold alone has varied in production in this century from ,000,000 to 0,000,000 per year, or tenfold; but gold and silver combined have never varied more than sixfold. It is self evident, therefore, that the two combined form a much more stable mass than gold alone, and it cannot be too often repeated that the great desideratum in money, the one quality more important than all others, is stability in value, to the end that a dollar or pound or franc may command as nearly as possible the same amount of commodities when a contract is completed as when it is made. Economists dispute about almost everything else, but they are unanimous in this: That a money which changes rapidly in purchasing power is destructive of all stability and even of commercial morality. Will anybody pretend that gold has not changed rapidly in purchasing power within the last twenty years? Has not the universal experience shown that the variation has been very much greater in one metal than it ever was when the two metals were treated equally at the mint? The very least that could be asked on the score of honesty would be free coinage of both, with a proviso that debts should be paid with one-half of each. Back of all that, however, comes in the great principle of compensatory action, the variation of one metal counteracting that of the other; and from the standpoint of pure science and honesty it is greatly to be regretted that, instead of two precious metals, we have not at least five.

How much of it? The records of the Patent Office show, and the experience of farmers confirms it, that all the improvements in farm machinery since 1870 have not reduced the labor cost of farm produce on the general average more than 2-1/2 per cent. Here is a little paradox for you to study. In the twenty-five years from 1845 to 1870 the progress of invention in farm machinery was greater than in all the previous history of the world, marvellously rapid, in fact, and during those years the farm price of the produce steadily increased; but in the ensuing twenty-five years to 1895 there were very few improvements, and the price has declined with steadily increasing speed. This fact is either ignorantly or skilfully evaded by Edward Atkinson and David A. Wells in their elaborate articles on the subject; so I will present some facts and figures which were obtained early this year in the Patent Office, and carefully verified by members of Congress from every portion of the farming regions.

Since 1795 there have been granted 6,700 patents for plows, but since 1870 there have been but three really valuable improvements. Farmers are divided in opinion as to whether the riding plow reduces the labor cost. The lister, recently patented, throws the earth into a ridge and enables the farmer to plant without previously breaking the soil. It is valuable in the dry regions of the West, but useless where the rainfall is great, as the soil must there be broken up anyhow. There have been 920 corn gatherers patented, of which only one is considered a success, and most farmers reject it on account of the waste. The general verdict is that the labor of producing corn has been reduced very little, if any. In the labor of producing potatoes there has been no reduction whatever, nor in the finer garden products, nor in fruits. It takes the same labor to produce a fat hog or a fat ox, a sheep, horse, or mule, as in 1870. In wool growing many patents have been taken out for shearers, and three of them are said to be savers of labor, provided the wool grower is so situated that he can attach the shearer to a horse or steam power.

There have been since the opening of the Office 6,620 patents for harvesters, of which the only great improvement since 1870 is the twine binder, for which over 900 patents have been taken out. The beheader is used in California, as it was before 1870, and in the prairie regions the sheaf-carrier has recently been introduced, holding the sheaves until enough are collected to make a shock. Counting the labor of the men who did the binding after the original McCormick reaper at per day, the total saving by all these improvements since 1870 is estimated at 6 cents per bushel for wheat, rye, and oats. Much of this saving in labor is neutralized by cost of machines, interest, and repairs. There have been nearly 3,000 patents in fences, over 5,000 in the making of boots and shoes, and in stoves and heaters 8,240, none affecting farm labor except the first. In cotton growing exactly the same processes are used, from planting to picking, as in 1850; but out of many hundred attempts to invent a cotton picker it is now claimed that one is a success, though it has not yet got into use. The cost of ginning the cotton has been reduced about two-fifths of a cent per pound. There have been 176 patents for saw gins, 63 for roller gins, and 47 for feeders to gins, out of all of which there has been a new gin evolved which will be in use hereafter. I might thus go around the list, but enough has been said to show that nearly all our farm machinery was in use before 1870, and that since that date, as I said, the reduction of labor cost has not upon the whole field exceeded 2-1/2 per cent. The assertion that reduced transportation lowers the farm price is in flat contradiction of political economy, as, according to that, the benefits should be divided between producer and consumer, the farm price rising and the city or export price declining.

It is evident that you are not a practical farmer. However, your non-acquaintance with the figures is not to be wondered at when we consider what has been said by great scholars and statesmen. I recently heard a politician, and one of perfectly Himalayan greatness, say in debate that a day's work on an Illinois farm would now produce more than twice as much as in 1870, and another clinched it by adding that a man could pay for a good farm by his surplus from five years' crops. Now go to some practical farmer and get him to make the calculation, and you will find that what he has saved by reduced prices is less than one-fifth of what he has lost from the same cause. The average farm family in the central West consists of five persons, and their greatest saving has been on clothing. You may set that at per year. The next is in sugar, for which they pay but half the price of 1873. There is no other item that will reach , not even including all the iron or steel they have to buy in a year. The largest estimate of gains, unless they go into luxuries, does not exceed per year. At least a third of this gain is offset by increased taxes.

Now let us see what this farm family has lost, counting only the price of the surplus it sells and taking our average from the official reports. On 500 bushels of wheat, at least 0; on 600 bushels of corn, 0; on ten tons of hay, ; on rye, oats, potatoes, and so forth, ; on three horses and mules sold per year, 0. Total, 0, being more than ten times the net gain over taxes.

The Agricultural Department figures indicate that, taking the United States as a whole, including even the intensive farming near the cities, the reduction of annual income is a few cents over per acre. Thus something like ,800,000,000 has been taken from the farmers' annual income, and the farmer being just like any other man, in that he cannot spend money that he does not get, this withdraws ,800,000,000 from the manufacturers' and general market. In view of these figures--and if anything I have understated them--what conceivable good would a raise in the tariff do the manufacturers so long as our farmers must sell on a gold basis and be subject at the same time to the rapidly increasing competition of silver basis countries? I have said nothing of fixed charges which do not decline, or of the cost of the federal government, which steadily and rapidly increases. Have you heard of any decline in official salaries, taxes, debts, bonds, or mortgages?

The Aldrich Report is a miserable fraud. It does not so much as mention farmers and planters or any of the laboring classes immediately dependent on farmers. It gives only the wages of the highest class of skilled laborers and in those trades only where the men are organized in ironbound trades unions which force up the wages of their members. Take the lists and census and add the numbers employed in every trade mentioned in that report, and you will find that all together they only amount to one fourth the number of farmers, or about 12 per cent. of the labor of the country. Furthermore, it takes no account whatever of the immense percentage of men in each trade who are out of employment. One who didn't know better would conclude from it that our coal miners worked 300 days in the year, and that stone masons, plasterers, and the like worked all the year in the latitude of New York and Chicago. And these are but a few of the tricks and absurdities of the report.

Wages are labor's share of its own product. The claim that wages generally can rise on a declining market involves a flat contradiction of arithmetic; it assumes that the separate factors can increase while the sum total is decreasing, and that the operator can pay more while he is every day getting less. The whole philosophy of the subject was admirably summed up by a Southern negro with whom I recently talked. "If wages be up, how come 'em up? We all's gittin' but half what we useter git for our cotton, and how kin five cents a pound pay me like ten cents a pound, and me a pickin' out no mo' cotton?" His philosophy applies to 60 per cent. of all the working people in the United States, for that proportion do not work for money wages. They produce, and what they sell the product for is their wages. Viewed in this, the only true light, the wages of 60 per cent. of our laborers have declined nearly one half, making the average decline for all laborers nearly a third. How, indeed, could it be otherwise? Will any sensible man believe that a farmer could pay men as much to produce wheat at $.50 as at .50? Or take the case of the cotton grower. It takes a talented negro to make and save 3,000 pounds of lint cotton; when he sold it at $.10 he got 0, and when he sells it at $.05 he gets 0, and all the tricks of all the goldbugs in the world cannot make it otherwise. To tell such men that their wages have increased, in the face of what they know to be the facts, is arrogant and insulting nonsense.

Very true. And the question of what is the best can only be determined by science and experience. It is certain that gold standing alone is not; for its fluctuations in purchasing power have been so tremendous as again and again to throw the commercial world into jimjams. History shows that it has varied 100 per cent. in a century, and we have seen in this country that its value declined about 25 per cent. from 1848 to 1857, and that it has increased something like 60 per cent. since 1873. Without desiring to be ill-natured, I must say it seems to me that a man has a queerly constituted mind who insists that that is the only "honest money."

And you can't have 'em, my dear sir. A dollar consists of 100 cents. The phrase "50-cent dollar" and that other phrase "honest money" remind me of what I used to hear in my boyhood when the slavery question was debated with such heat: "What! Would you want your sister to marry a nigger? Whoosh!" It was assumed, if a man denounced slavery, that he wanted the colored man for a brother-in-law. Men who employ such phrases show a secret consciousness of having a weak cause. And while I am about it I may as well add that I do not admire the way some of our fellows have of denouncing gold as "British money." Great fools, indeed, the British would be if they did not fight for a gold basis, for by reason of it they get twice as much of our wheat, meat, and cotton for the 0,000,000 per year we have to pay them in interest. According to the Chancellor of the Exchequer, the world owes England ,000,000,000, on which she realizes a little over four and a half per cent., or pretty nearly 0,000,000 per year. Fully that, if we add income from property her citizens own in this and other countries. On the day we demonetized silver, that 0,000,000 could have been paid in gold in the port of New York with 450,000,000 bushels of wheat; to-day it would take 900,000,000 bushels. In short, the amount of grain England has made clear because of the rest of the world adopting monometallism would bread all her people, feed all her live stock, and make three gallons of whiskey for every person on the island. Why shouldn't they take what the world willingly gives them? I have my opinion, however, of the common sense of a world which does things that way.

There is no such money. The coin we send abroad is only bullion when it gets there, and most dealers prefer government bars. The exchange must be calculated exactly the same whether we use gold, silver, or paper in our domestic trade; and this notion that we "should be at a disadvantage in the exchange" is a delusion. The variations in the value of the greenback during our war era were calculated daily, and prices in this country rose or fell to correspond. It must, I say, be calculated just the same in gold or silver, and any smart schoolboy can do it in a minute on any transaction.

And by the same token the gold dollar is worth 200 cents in silver. The answer is as logical as the quip, and neither is worth notice. Such a process merely assumes an arbitrary standard and measures all other things by it, as the drunkard in a certain stage of intoxication thinks that his company is drunk while he is duly sober. And, by the way, where do you get your moral right to say that a dollar which will buy two bushels of wheat or twenty pounds of cotton is any more honest than one which will buy one bushel or ten pounds? Is it because with the dear dollar the farmer must work twice as long to pay off a mortgage, that the interest paid on the great debts of the world will buy twice as much, and the debtor nations are put at a terrible disadvantage as to the creditor nations personally? Is that honest?

That is a very old fallacy, and a singularly tenacious one, as it seems that no amount of experience drives it from the minds of men. Look over the history of our panics and you will find that after the first convulsion is past the banks are soon crowded with idle money, and the rate of interest falls. Take notice, however, that the money lenders always declare that they must have "gilt-edged paper." Interest on first-class securities is never lower than in the hardest times which follow a particularly severe panic, and the reason is obvious: all far-seeing business men know that prices are likely to fall, and, consequently, investments become unprofitable: therefore they do not invest; therefore they do not want money; therefore they do not borrow, and idle money accumulates. This is a phenomenon always observed in hard times. In good times, on the contrary, when investments are reasonably sure to be profitable, there is naturally an increased demand for money, and so the rate of interest rises. As a matter of fact, however, interest rates, when properly estimated, have been for several years past very much higher than previously--that is, the borrower has, in actual value, paid very much more; so rapid has been the increase of the purchasing power of money, that the six per cent. now paid on a loan will buy more than the ten per cent. paid a few years ago. In addition to that, the value of the loan has been steadily increasing. Make a calculation for either of the years since 1890, and you will find it to be something like this: the six per cent. paid as interest has the purchasing power of at least ten per cent. a few years ago, and the lender has gained at least two per cent. a year, if not twice that, by the increased value of his money; so the borrower will have paid, at the maturity of his obligation, at least twelve per cent. per annum, and probably much more.

The silent and insidious increase of their obligations, by reason of the enhanced and steadily enhancing value of gold, has ruined many thousands of business men who are even now unconscious of the real cause or of the power that has destroyed them.

I may add in this connection that the three per cent. now paid on a United States bond is worth about as much in commodities as the six per cent. paid previous to 1870, and at the same time the bond has doubled in value for the same reason; thus, calculated on the basis of twenty-five years, the bondholder is really receiving, or has received, the equivalent of ten per cent. interest.

DEMONETIZATION OF GOLD.

Gold has an intrinsic value, says the monometallist, which makes it the money of the world. It is sound and stable, while silver fluctuates. See how much more silver an ounce of gold will buy than in 1873, but the gold dollar remains the same, worth its face as bullion anywhere in the world.

But suppose there had been a general demonetization of gold instead of silver, how would the ratio have stood then? Would not the same reasoning prove silver unchangeable, and gold the fluctuating metal?

Oh, nonsense! it is impossible to demonetize gold, because the civilized world recognizes it as an invariable standard by which all commodities are measured in value. The supposition is absurd. It would be very much like deoxygenizing the air.

But, my dear sir, gold has been demonetized, and not very long ago, either, and very extensively, too. It was deprived of its legal tender quality by four great nations, comprising some seventy million people; demonetized because it was cheap and because the world's creditors believed it was going to be cheaper; the demonetization, so far as it went, produced enormous evils, and nothing but the firmness of France and the far-seeing wisdom of her financiers prevented the demonetization becoming general on the continent of Europe, which would have reversed the present position of the two metals in the public mind.

Of the many singular features in the present overheated controversy, probably the most singular is the fact that comparatively few bimetallists know of, or, at any rate, say much about, this demonetization of gold, while the monometallists ignore it entirely, and many of them, who ought to know better, absolutely deny it.

So extensive was this demonetization of gold, and so far-reaching were its consequences, that it may easily be believed that it was the beginning of all our misfortunes, and that the crime of the century, instead of being the demonetization of silver in 1873, was really the demonetization of gold in 1857; for that was the first general or preconcerted international action to destroy the monetary functions of one of the metals and throw the burden upon the other, and it first familiarized the minds of financiers, and especially of the creditor classes, with the fact that the thing might easily be done and that it would work enormously to their advantage.

It may also be said that it led logically to the action of 1867, which was but the beginning of a general demonetization of silver.

The history of gold demonetization is full of instruction and is here given in detail.

In 1840-45 the world was hungering for gold. All the leading nations had just passed through financial convulsions which shook the very foundations of society. Several American states had either repudiated their debts outright or scaled them in ways that to the English mind looked dishonest, and there was a general uneasiness among the creditor classes of the world. A universal fall of prices had produced the same results with which we are now so painfully familiar. In the half century terminating with 1840 the world had produced but 9,942,000 in gold, coinage value, and ,364,697,000 in silver, or some forty ounces of silver to one of gold; yet their ratio of values had varied but little, and the variation was not increasing. Why? Monometallists have raked the world in vain for an answer. Bimetallists point to the only one that is satisfactory, namely, the persistence of France in treating both metals equally at her mints. But there were grave apprehensions that France alone could not maintain the parity, and so, as aforesaid, all the world was hungry for gold.

And in all the world there was not one observer who dreamed that this hunger would soon be far more than satiated, and the philosopher who should have predicted half of what was soon to come would have been jeered at as a crazy optimist. In 1848 gold was discovered in California, and three years later in Australia. The supply from Africa and the sands of the Ural Mountains had previously increased, so that in 1847-8 it was equal to that of silver. But how trifling was this increase to what followed. In 1849 there was still a slight excess of silver production, and in 1850 the proportion was but ,450,000 of gold to ,000,000 in silver. Then gold production went forward by great leaps and bounds. How much was produced?

Well, the estimates vary greatly. Soetbeer places the amount at ,407,000,000 by the close of 1860; but Tooke and Newmarche have put it about 0,000,000 less. In the same era the production of silver varied but a trifle from ,000,000 a year. A committee of the United States Senate, appointed for investigating the facts, reported that in the twelve years ending with 1860 the gold produced was ,339,400,000; and in the next thirteen years, ending with 1873, it was ,411,825,000. Thus, in the thirteen years following the California discovery the stock of gold in the world was doubled, and in the twenty-five years ending with 1873 it was more than tripled. Several economic writers have made the statement very much stronger than this, and M. Chevalier, in his famous argument for the demonetization of gold, written in 1857, declares that the production of gold as compared with silver had increased fivefold in six years and fifteenfold in forty years, and that, owing to the export of silver to Asia and its use in the arts, there would, in a very little while, be no possible method of maintaining the parity of the two metals in money at any ratio which would be honest and profitable.

And what was the real fact? The ratio, which in 1849 was 15-78/100 of silver to 1 of gold in the London market, and the same in 1850, never sank below 15-19/100 to 1, and never rose above the ratio of 1849 till after silver was demonetized. Why this wonderful steadiness? The answer is easy. In the eight years of 1853-60 France imported gold to the value of 3,082,000,000 f., or 6,000,000, and exported silver to the value of 3,000,000; in short, her bullion operations amounted to 9,000,000. She stood it without a quiver; she grew and prospered as never before. She resolutely refused to change her ratio. Her mints stood open to all the gold and silver of the world, and thus did she save the world from a great calamity.

Scarcely, however, had the golden flood begun when the moneyed classes and those with fixed incomes raised a loud cry. From the laboring producers no complaint was heard. They never complain of increased coinage. In the United States we knew nothing of this clamor, for we then had no large creditor class, no great amount of bonds, and very few people interested more in the value of money than in the rewards of labor. In Europe, however, all the leading writers on finance and industries took part. In 1852 M. Leon Faucher wrote: "Every one was frightened ten years ago at the prospect of the depreciation of silver; during the last eighteen months it is the diminution in the price of gold that has been alarming the public." In England, the philosopher DeQuincey wrote that California and Australia might be relied upon to furnish the world 0,000,000 in gold per year for many years, thus rendering the metal practically worthless for monetary purposes, and another Englishman, as if resolved to go one better, declared that gold would soon be fit only for the dust pan. M. Chevalier took up the task of convincing the nations that gold should be demonetized as too cheap for a currency, and of course the interested classes soon organized for action.

Holland had already begun the process in 1847, but had managed it so awkwardly that her condition is not easily understood or described as it was in 1857. The estimated amount to be thrown out of use was only half the real amount, and in the attempt to avoid a small evil they produced a very great one.

Austria was at that time involved in trouble with her paper money system, and thought the cheapening of gold offered a fair opportunity to come to a metallic basis. The reasoning of her statesmen was singularly like that of General Grant in 1874, when he pointed to the great silver discoveries in Nevada as a providential aid to the restoration of specie payments, being at the time in sublime ignorance that he had long before signed an act demonetizing silver, and thereby depriving this country of the benefit of such providential aid. But the strength of the creditor classes was entirely too much for Austria and Prussia, and the German States allied with them almost unanimously declared for throwing gold out of circulation. A convention had been held at Dresden in 1838, with the view to unifying the coinage, but little had been accomplished, and now a convention was called at Vienna, which was attended by authorized representatives of Prussia, Austria, and the South German States. It was there stated that, besides various minor coins, there were three great competing systems in Germany, namely, those of Austria, Prussia, and Bavaria. It is needless to go into details of this once famous convention, but suffice it to say that the following points were agreed upon: The Prussian thaler was to be the standard for Prussia and the South German States, and was to be a silver standard exclusively. The Austrian silver standard was to prevail throughout that empire. The contracting powers could coin trade coins in gold, but none others, except Austria, which retained the right of coining ducats, and these gold coins were to have their value fixed entirely by the relation of the supply to the demand. "They were not therefore to be considered as mediums of payments in the same nature as the legal silver currency, and nobody was legally bound to receive them as such;" in short, none of the gold coins permitted by the convention were to be legal tender, but all were to be mere trade coins precisely for the same purpose as the trade dollar once so famous in the United States. The result, of course, was to make silver the standard and gold the fluctuating money or token money. The effects of this convention remained with but little change till 1871.

Of course, gold at once became "dishonest money." It was worth less than silver, and a regular gold panic set in. Holland had already demonetized most of her gold coinage, that is, had deprived it of the legal tender quality, and Portugal now practically prohibited any gold from having current value, except English sovereigns. Belgium demonetized all its gold at one sweep, and Russia prohibited the export of silver. Thus, in an alarmingly short space of time five nations had practically demonetized gold, and others were threatening to do so, and the world was rapidly being taught that gold was the discredited metal, while silver was the stable and sound money.

Some curious and a few amusing results followed. Among a certain class in England a regular panic broke out, and in Holland and Belgium even the masses of the people became suspicious of gold and disliked to take it in payment. In the latter country a few traders hung out signs to attract customers, to this effect, "L'or est recu sans perte," meaning that gold money would be taken there without a discount. It is probably not known to one American in a thousand that the practice of inserting a silver clause in contracts became at that time so common in Europe that it was actually transferred to the United States, and in England life insurance companies were established on a silver basis. Several American corporations stipulated for payment in silver, especially of rents, and to this day a New England establishment is receiving a certain number of ounces of fine silver yearly under leases then drawn up.

It is equally interesting to note in the literature of that period arguments against gold almost word for word like those now used against silver. The financial managers threw gold out of use and then urged its non-use as a reason for its demonetization. "None in circulation," "variation shows impossibility of bimetallism"--such were the phrases then applied to gold, as we now find them applied to silver. An artificial disturbance was created, and then pleaded as a reason for further disturbance.

All this while the financiers of England were bombarded with arguments and prophecies of evil, but her geologists pointed out clearly that Australian and Californian products were almost entirely from the washing of alluvial sands and consequently must be very temporary. Her statesmen believed the geologists rather than the panic-stricken financiers, and so she held for gold monometallism.

But it is to France that the world is indebted for maintaining the parity through those years of alarm and panic. M. Chevalier urged upon French statesmen the importance of returning to the system which had been in force previous to 1785, when silver was the standard and gold was rated to it by a law or proclamation. The proposition was actually brought forward in Council and urged upon the Emperor that silver should be made the standard and gold re-rated in proportion to it every six months. The net result was, by France taking in gold and letting out silver, that in 1865 that country had a larger stock of gold than any other in Europe. Suffice it to repeat that several nations, including seventy million people, actually demonetized gold, deprived it of its legal tender, and treated it as a ratable commodity; while France, single-handed and alone upon the continent of Europe, was able to absorb the enormous surplus of gold and maintain the parity by the simple process of keeping her mints open to both at the ancient ratio.

Thus ended the scheme to drive gold out of circulation and base the business of the world upon one metal, and that the dearer metal, silver. But suppose the scheme had succeeded; suppose France had been less firm; what a wonderful flood of wisdom on the virtues of silver we should have had from the monometallists! How arrogantly they would have denounced us--who should, I trust, in that case have been laboring to restore gold to free coinage--how arrogantly they would have denounced us as the advocates of cheap money, dishonest tricksters, repudiators! How they would have rung the changes on "dishonest money," "fifty-cent gold dollars!" What long, long columns of figures should we have had to prove the stability of silver, the fluctuating nature of gold! What denunciations, what sneers, what gibes, what slurs would have filled the New York city papers in regard to those Western fellows who want to degrade the standard! How glib would have been the tongues of their orators in denouncing all who advocated the remonetization of gold as cranks, socialists, populists, anarchists, ne'er-do-wells, and Adullamites, kickers, visionaries, and frauds! Is there any practical doubt that we should have witnessed all this? None whatever; in fact, something of the same sort was heard in Europe at the time of the demonetization of gold. It all goes to show that self-interest blinds the intellects of the best of men so that they readily believe that which is to their interest is honest, but that the farmer who seeks to raise the price of what he has to sell thereby throws himself down as dishonest. Of course, the successful demonetization of gold would have brought about an enormous appreciation of the value of silver, since it would have thrown the whole burden of maintaining the business of the world upon one metal, and equally, of course, we should have had the same attacks upon the owners of gold mines that we now have upon the owners of silver mines. As the withdrawal of silver from its place as primary money and its reduction to the level of token money has thrown the burden of sustaining prices upon gold, so unquestionably would the reverse process have occurred had gold been reduced to token money in place of silver. All this we know would have taken place from what actually did take place, and this makes important the history of the demonetization of gold.

RELATIVE PRODUCTION OF GOLD AND SILVER.

"In 1873 the total product of silver in the world was 61,100,000 ounces, and the silver in a dollar was worth .04 in gold.

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