under military escort, and marine commerce was hazardous beyond modern comprehension.

The result of this general condition was that the industrial world was made up of numerous distinct communities, with but little local trade in any, and very meagre intercourse with each other. Under such conditions the stock of money in each of these communities was of small value and consisted of numerous pieces of minute denomination. Silver was the only precious metal cheap enough to serve as a multiple of these minute monetary values, and the obstacles to transportation kept each community's stock of silver nearly constant in quantity, and consequently nearly stable in value. If there had been any use for gold as money in such communities the stock would have been more variable, because value is more portable in gold than in silver, and consequently its value as a basis would have been less stable.

The present condition is the opposite of that then existing, for now industry is co-extensive with civilization, and commerce is almost universal, so that there is hardly anywhere a community without trade, or beyond the influence of the world's commerce. This condition of industry and trade necessitates incessant settlement of balances between trade centres, and these balances are very large in amount— so that gold now derives its equability of value from its superior portability because transportation facilities are so universal and so cheap that the slightest elevation of value at one point sets in motion currents of supply from many other points, and the effect is the preservation of the world's stock of gold at very nearly the same value everywhere.

The natural laws that control the currents of the air, and the formation and condensation of clouds, are not more constant than are the natural laws that control the currents of commerce, and the distribution of capital.* It is natural law alone that has gradually made gold the prime standard of value. Thus it came about that Great Britain was the first nation to adopt the single gold standard (1816), while for a long time afterward other nations did very well without it. The principal countries of Continental Europe were commercially isolated by the protective system, and their bi-metallic currencies supplied not only the needs of domestic circulation, but gold for trade with gold countries, and silver for trade with the South and East.

Before the advent of ocean steamers the United States were geographically isolated; hence here, too, there was for a time a bi-metallic circulation; for we used gold to settle Canadian and European balances and silver to settle balances arising in the trade with Central and South America and the West Indies. The debasing of the gold standard in 1834 drove our silver coins abroad, and from that time we were practically on a gold basis until 1860; but to-day commerce has brought all nations into one monetary community, and forces upon all, in*“the nature of things," the use of one and the same standard of value. Silver now suffices as a standard of value in Mexico, Central and South America, and Asia, because these countries are still in a comparatively primitive state of industrial development.

At the beginning of the nineteenth century Great Britain was by far the foremost commercial nation of the world, and there industry was more active and diversified, labor was better compensated and consumption more extended than anywhere else; hence it is in accordance with the principles stated above that Great Britain should have early adopted the single gold standard.

Next to Great Britain the United States became, early in the century, the country of greatest and most diversified industrial and commercial activity, and consequently, in 1834, this country adopted in fact, though Congress did not establish by law, the single gold standard.

Up to 1834, gold coins could not circulate in the United States, and the country was practically on the silver basis. After 1834, silver dollars could no longer circulate, and the country had only the gold standard up to the suspension of specie payment at the outbreak of the Civil War-a period of nearly twenty-eight years during which the United States gained more in industrial development, commercial extension, population, and a generally diffused prosperity of the people, than in all their previous existence.

The same inevitable law that imposed the gold standard on Great Britain in 1816, that maintained it in this country from 1834 to 1862, and that impelled Bismarck to try to establish it the moment Germany became an Empire, would have been at work among us driving us by the scourges of industrial depression and disorder toward our proper destiny as the controlling gold standard country of the world. We know what the country has gained under the gold standard since 1879.

The efforts now being made to preserve the monetary use of silver in international trade are on a evel with the pranks of Dyrenforth, and are destined to a like failure.

No one can compute what we might have lost if we had been during the same period on the monetary plane of India, Mexico, and China, with all industrial Europe raised to the higher level of the gold standard, and kept there by the weight of our silver circulation bearing down the other end of the lever.

Gold mono-metallism is the unavoidable destiny of this country; the sooner we recognize this and fix it in our laws, the sooner will we reap the fruits; the longer we defer the recognition, the more we impede and postpone its establishment by law-the longer will our industries be hampered and all our business deranged by financial unrest and commercial apprehension. Should we unfortunately let go the single gold standard, there will be nothing to take hold of but silver monometallism; for bi-metallism for us is a snare and a delusion.

PRICE LIST-SOUND CURRENCY, VOL. II.

(Condensation of the author's work, "The People's Money," Charles Scribner's Sons, New

York.

SOUND CURRENCY.

PUBLISHED SEMI-MONTHLY BY THE SOUND CURRENCY COMMITTEE OF THE REFORM CLUB. ENTERED AT THE POST-OFFICE, NEW YORK, AS SECOND-CLASS MATTER. Publication Office, No. 52 William St., New York City.

Each number contains a special discussion of some Sound Currency question.

"FOR INSTANCE:"

Is gold appreciating in value?

That is hard to say. Compared with labor, it is steadily depreciating.

In each five year period of the last fifty years, a given amount of labor commanded higher wages in gold than in any similar period before.

But suppose gold has appreciated.

Then it is so much the better for the wage-earner.

Wholesale prices of goods change

daily, retail prices every week or two, but wages only once or twice a year, or even less frequently. This means that the wage-earner, paid on a gold basis, can get more and more goods for the wages he receives.

What would be the effect upon the American farmer of expressing his prices in silver? If he got the same price in silver that he now gets in gold, he would receive only half the purchasing power he now gets. If prices doubled he would get just the same that he now gets; in one case he would lose and in the other he would make nothing.

Why are the silver dollars called the "Dollars of the Fathers?"

Because the Fathers made very few of them, called silver's expulsion of gold "an unhappy experience," and changed the law so that gold drove out silver.

A FINANCIAL CATECHISM.

Anything that circulates freely and customarily between man and man in exchange for services and merchandise.

What two main classes of money are there?
Merchandise and promises to pay merchandise.

Give examples of each.

Skins, shells, metals, etc., are merchandise and serve the purpose of money just in proportion as they are desired for use or ornament by any community of men. Pieces of paper and like substance serve as money when they convey to the bearer the right to a certain quantity of specified merchandise.

Why have gold and silver, more than other things, come to be used as money? Because they are desired by all men, everywhere and at all times.

Where wages and prices are very low, and transactions rare and petty, gold coins would be too small or too valuable for convenient use. Where wages and prices are high, and exchanges frequent and large in amount, silver coins would be too heavy, or too many of them would be needed for convenient use.

What do the money metals indicate, then, as to a country's condition ?

The brass" cash" of China indicate that the people are in a state of extreme degradation; the silver dollar of Mexico indicates a higher condition of the people; the gold coin and its paper representatives of the United States and the greater part of Europe indicate the highest industrial condition.

Whence comes the idea that while gold may do for the rich, silver money is more suitable for poor people?

From a confusion of quantity with value. cheaper it is the more easily he can procure it.

Of food a man needs quantity and the
Of money he needs value, and it is no

easier to earn a dollar's worth of silver than a dollar's worth of gold.

France, at the head of the Latin Monetary Union, of course uses little or no gold ? On the contrary, she has a larger stock of gold than any other country of Europe or America; she has $275,000,000 more than England has.

And India-gold not being a legal tender, or used commonly as money--of course the people there care nothing for gold?

Far from that; a commission in 1866 reported that the desire for the coinage of gold was universal in India. The net imports of gold into India since the metal was demonetized in 1835 have been $750,000,000, and it is estimated that there was in the country $600,000,000 of gold when it ceased, under British jurisdiction, to be coined. But if all the nations want gold will there be enough to go around?

We can have the best, and it would be an extraordinary spectacle of self-abnegation for the United States to take silver in order that there might be gold enough for other nations.

Is not the gold giving out?

There was produced in the world from the discovery of America to 1850 152,779,050 fine ounces of gold, and from 1851 to the end of 1894 there was produced (the figures for 1894 being partly estimated) 261,669,379 fine ounces. In the first five years of California and Australia production the world's production was 32,051,621 fine ounces, and in the past five years it was 34,894,537 fine ounces. During the past ten years there has been an increase in the output of every important gold yielding country. Is not the total stock of gold very small?

If it were needed in large quantities it would be insufficient. But last year's product beaten in to a leaf would cover 55 square miles, or drawn into thread would reach the sun four times.

But does not the expansion of commerce make greatly increased demands for gold money?

There is computed by the Mint Bureau to be in the world $3,965,900,000 of gold money. The largest net movement of gold to or from any country in any one of the last 30 years was $97,466,127 net imports of the United States in 1881. This is less than two and a half per cent. of the present stock of gold money, excluding the considerable gold hoards of China and the enormous gold hoards of India.

Does not the demand for gold in the arts make it too valuable for money? No; its only competitor, silver, is being disused because it has not value enough. If you could deprive iron of its specific gravity you could not make weights from it. Is not the use of the gold standard by England a reason why we should use something else?

Not unless the use of other modern improvements by England is a reason why we should refuse them, and stick to stage coaches instead of building railways.

Is not England trying to get the rest of the world to use gold?

No; Englishmen lend or invest pounds sterling, and they get their returns in pounds sterling, and it is a thing of small importance to them how many dollars or rupees or taels make a pound.

FIAT MONEY AND LEGAL TENDER.

Are paper representatives of merchandise just as good for monetary use as merchandise itself?

They are better, because lighter and more convenient, if every person is sure that the promise on them will be kept in full and at all times.

Besides merchandise and promises to pay merchandise is there any other kind of money? Yes, "fiat" money, which is a piece of paper or other thing of insignificant value on which is stamped a statement that it is so much money.

Where does it get its name?

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From the fact that fiat" means "let there be," and is the expression attributed to the Creator when He made the universe out of nothing,

Can any human being or government create anything?

It cannot.

Why is not "fiat" money successful?

Because, as President Lincoln said, you can fool some people all the time and all the people some of the time, but you can't fool all the people all the time.

But why shouldn't it succeed?

Because men will not give their labor or goods for nothing.

Couldn't people be brought to use

fiat "money?

Reason and common sense are against it, and experience proves that they won't. Besides, if you were asked to fix your wages or prices in "rallods" how many would you charge?

I don't know how much a "rallod" is.

Well, you know as much about the value of a "rallod " as you would about the value of a dollar if it were not a specific quantity of something.

Can Congress determine how many yards of cloth or bushels of grain, an ounce of gold, or of silver, shall equal in value?

It cannot.

What is to prevent- -the Constitution?

Not the Constitution of the United States, but the constitution of man. Congress can no more regulate the relative intensities of human desire than it can regulate the length of day or night.

If Congress can make 25.8 grains of gold a dollar can it not make a piece of paper seven inches by three a dollar?

Yes, but that kind of a dollar would not buy anything.

Cannot Congress pass a legal tender act?

Oh, yes, if a man in the past has loaned a thousand dollars Congress can say that the debtor is discharged when he offers a thousand worthless "fiat" dollars.

Isn't that making "fiat" dollars just as good as any other kind of dollars?

It is so far as giving the debtor the thousand dollars that he ought to pay his creditor but it does not help a man to buy food and clothes, because the merchant will raise his prices for a while and finally refuse to sell at all.

What would the merchant do then?

1

Keep his goods till he found customers who would barter their merchandise for his. Are not legal tender acts passed for the benefit of the common people?

Not much; they are passed by the men who issue bad money to try to force it into circulation; good money will go of itself.

Give an illustration.

When the Russian Government was using marten skins, which had a value, as money in its eastern dominions, it got short of funds, as governments are apt to, and it cut off