Is that all?

No; Thomas H. Benton said in the Senate that everybody knew that gold was undervalued and "expelled from circulation." Finally Congress, in 1834, raised the mint price of gold from 15 ounces of silver per ounce to 16 ounces of silver per ounce. 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" of the country, and changed the law so that gold drove out silver. Was not the silver dollar extensively coined by the Fathers?

From 1793 to 1850, when California gold entered the circulation, there were coined 2,456,990 silver dollars and $85,446,392 in gold.

Who stopped the coinage of silver dollars?

It was stopped in 1805 by the man who wrote the Declaration of Independence. When was the coinage resumed?

Only a thousand silver dollars were coined in the eight years Andrew Jackson was President; the regular coinage was resumed under the Administration of Martin Van Buren, who was accused of being an aristocrat and of using gold spoons.

When Congress offered sixteen ounces of silver at the mint for an ounce of gold, did silver stay in circulation?

No; silver went where an ounce of it was worth more than one-sixteenth of an ounce of gold.

What evidence of that is there?

In 1853 Congress reduced the weight of the halves, quarters and dimes, making them worth more as money than as bullion, and Representative C. L. Dunham said in a speech Feb. 1, 1853: "There is, then, a constant stimulant to gather up every silver coin and send it to market as bullion to be exchanged for gold, and the result is the country is almost devoid of small change for the ordinary small business transactions." Twenty years later the coinage of the silver collar was stopped on the plainly declared ground that it had long ceased to circulate.

Has any other country had difficulty in keeping gold and silver in circulation at the the same time?

Yes; the English Government of India readjusted the weights of gold and silver coins four times between 1769 and 1835 in its efforts to keep both in circulation, but did not succeed, and finally gave it up and made silver the exclusive legal tender in 1835. What! Did Englishmen demonetize gold?

They did, and nearly thirty years afterward the Imperial Government refused to sanction the proposal of the Indian Government to make gold a legal tender. But bimetallism was a great success in France?

It did not secure the concurrent circulation of gold and silver, which is the main object of bimetallism according to most of its advocates. From early in this century till 1850 gold circulated little in France, but for several years after 1850 gold predominated, and silver became so scarce that the minor pieces were reduced in weight in 1865, as ours were in 1853, to keep them in circulation.

What authorities substantiate this?

Michael Chevalier, Robert Giffen and Clarmont Daniell.

What statistics corroborate them?

From 1815 to 1821 France exported, net, fourteen million dollars of silver; from 1821 to 1852 she imported $615,000,000; then gold came in, and in the succeeding twelve years she exported $332,000,000 of silver; the Latin Union was formed in 1865, and in the following six years the silver net imports amounted to $111,000,000; in 1872 they were $19,000,000; in 1873 they rose to $35,000,000, and in 1874 to $69,900,. 090; then the coinage of silver was restricted and the import fell to less than $23,000,000 in 1878; then the free coinage of silver was wholly stopped, and the net import of silver fell two years later to $7,000,000.

What event corroborates them?

In addition to the alteration of the minor coinage, the establishment of the Latin Union.

Why was the Latin Union formed?

Because by separate action the several nations could not keep gold and silver in concurrent circulation.

But if individual nations could not do this, the monetary union proved the power of several nations acting together to accomplish it?

It proved that they could not do it. Nine years after the Union was formed the price of silver fell a little and France had to restrict the free coinage; in 1878 free coinage in the Latin Union was suspended.

Was not the fall of silver due to the action of Germany in establishing the gold standard ?

It makes no difference what the cause was; the Latin Monetary Union was unable to keep silver and gold together. In proposing the restriction of free silver coinage Leon Say attributed the fall of silver to the sales of silver by Germany, the increased production by American mines and the decreased absorption by India. The Latin Union could not prevent any of these things, or maintain the parity of gold and silver in spite of them.

Has any other nation found bimetallism impracticable?

England did not establish the single gold standard till after two centuries of failure to keep gold and silver in concurrent circulation.

Did not English bankers send Ernest Seyd here with money to bribe Congressmen to pass the Act of 1873 ?

That has not only been said, but in Denver it has been sworn to. The fact is that Mr. Seyd was a distinguished bimetallist, who wrote many books and pamphlets in favor of silver, and wrote a long letter about the Act of 1873 to Mr. Hooper, who had charge of the bill, in which he urged the continued coinage of the silver dollar. This letter was printed in full in the Congressional Record for August 22, 1893.

Did not New York money dealers procure the Act of 1873 ?

Representatives Potter and Brooks of New York opposed the bill and were accused of doing so in the interest of the New York bullion brokers.

Was not the act procured surreptitiously?

It was printed over and over again; opinions on it were solicited by the Treasury officials from many persons who understood coinage and money matters, and it was debated on several occasions in Congress during two years or more.

But at least the dropping of the silver dollar was concealed from Congress, was it not? In the debate in the House April 9, 1872, Judge Kelley said: "It has become impossible to retain an American dollar in this country except in collections of curiosities." Mr. Hooper said the silver dollar "has long since ceased to be a coin of circulation," and that the Committee had concluded that "the gold dollar should be declared the money unit;" Mr. Stoughton said that the principal change proposed by the bill was in "more clearly specifying the gold dollar as the unit of value. * The time has come in this country when the gold dollar should be distinctly declared to be the coin representative of the money unit."

* *

What evidence is there that gold was the standard in fact much earlier?

In supporting the coinage bill of 1853 Mr. Dunham said, “We have had but a single standard for the last three or four years. That has been and now is gold. We propose to let it remain so, and to adapt silver to it, to regulate it by it." Mr. Skelton of New Jersey said, "Gold is the only standard of value by which all property is now measured; it is virtually the only currency of the country.”

Perhaps free coinage would raise the value of silver.

Then it would make things no easier for the debtor, in whose behalf most of the silver agitation has been carried on.

What is the difference between the changes from gold to silver, or silver to gold, that have occurred in this and other countries and the change from gold to silver that would now result from free coinage?

Just the difference between floating down stream and going over the falls.
Does not every one wish all the money he can get ?

He wishes all the wealth he can get; he does not wish any more of it in the shape of cash than is necessary. He can not get money without giving something for it; buying it with merchandise, and he will not buy any more money, to keep as money, than his business requires. A farmer will not keep more mowing machines than he absolutely needs, and he will not keep enough to do all his mowing at once; he will use the same machine over and over.

Does not John Stuart Mill say that a large volume of money makes prices high, and vice versa ?

He says that is so if all the money is specie, and no element of credit enters into the transaction, and all the money is in use all the time in making purchases, and the ra pidity of the circulation is fixed, conditions which never occur in real life. The quan titative theory of money is a "barren ideality."

BANKS AND DEBTS.

Which do banks lend the most of-money or credit?

Credit. The loans and discounts of the national banks alone in October, 1894, amounted to more than two billion dollars, and all the money in the country outside of the Treasury was only a little more than sixteen hundred millions.

Whose money and credit do they loan?

Their own capital and the money that other people deposit with them. The capital of the national banks in October, 1894, was less than seven hundred millions, and the deposits were nearly seventeen hundred and fifty millions.

How do the banks "corner" money?

They don't "corner" money; they can't corner it. Most of the money they hold belongs to other people who can draw it out whenever it is for their interest to do so. Are the banks debtors to the amount of their deposits ?

They are, and would be benefited like other debtors if they could repay in cheaper dollars than they received.

Then why do they not favor cheap dollars ?

Because, if their depositors got an idea that if they did not hurry they might be paid in cheap dollars they would hasten to take out their deposits and thus ruin the banks.

But do not the banks make money dear ?

No; money is dear when there is an exceptional demand for it, or when depositors are scared and withdraw their funds so that the banks have little to lend. What does" cheap money" mean, anyway?

In the money market " cheap money" is money loaned at low rates of interest. Sometimes "cheap money" is spoken of as though it meant money of which a little merchandise would buy a great deal; in other words, high prices. The two things are very different.

Is credit used because there is not enough currency?

No. It is used to supplement capital because men try to do all the business they can; all they have cash for and all they have credit for. It is used to supplement currency because it is cheaper.

How cheaper?

Money is the only form of property which yields no return.

If a man had $100,000

in currency, but his business did not imperatively demand that he have over $10,000 on hand at all times, he would put $90,000 into his stock of goods, or his "plant," or ex

change it for some sort of certificate or security that would bring him interest. And then if he had to pay out $20,000 all at once, how would he do it? Draw a check on his credit at the bank.

And does the banker keep on hand the money of all the depositors so that he can pay all their checks ?

Oh, no; in that case he would have nothing to loan. If a dozen men make deposits, the banker feels safe in lending the deposits of eight or nine of them, because not more than three or four will want their money at any one time.

Is it for the interest of banks to have times of panic and stringency?

Such periods are disastrous to banks, for then they can not collect the money they have loaned, and their depositors withdraw their deposits and the securities they hold depreciate.

But what about the malevolent influences of "Wall Street ?"

"Wall Street" sometimes means legitimate banking and sometimes the operations on the Stock Exchange. The two things are wholly different. Bankers do not approve of stock speculations, though the truth is that the Stock Exchange reflects rather than causes the state of business.

Is not gold monometallism in the interest of creditors?

Confidence and security is peculiarly important to debtors. The rate of interest is declining while the price of labor is going up. In other words, Man is worth more and Money is worth less. Interest is particularly low in England and it has not been unfavorably affected by the prevalence of the gold standard. Before 1874, the discount rate of the Bank of England several times rose to eight and even ten per cent. Since 1874 it has only twice risen to six per cent. Free coinage of silver was stopped in India, and the United States repealed the Sherman law, in 1893; in the year from February 22, 1894, to February 22, 1895, the bank rate never varied from two per cent.; not only was the rate very low, but it was the first time for eighteen years that the bank rate had remained unchanged for twelve months.

Is not the gold standard raising the rate of interest here?

No. The census tables show that of all the real estate mortgages in 1880, 46.6 per cent. were at 5, 6 and 7 per cent. interest, 24.6 per cent. at 8 per cent., and 27.2 per cent. were at 9, 10 and 12 per cent. interest. In 1889 the proportion at 8 per cent. had not changed; the proportion at 5, 6 and 7 per cent. had increased to 54.6 per cent., and the proportion at 9, 10 and 12 per cent. had decreased to 17.6 per cent. of the total. Where is the rate of interest the lowest ?

Where the accumulations of capital are largest, and where the security of the investments is the most perfect.

Would it be good policy for the debtors to shave their obligations 50 per cent. if they got the chance ?

If they got the chance it would be human nature to do it, but if they were continuously borrowing, it is not certain that it would pay them to do it.

Who can borrow on the best terms?

Individuals and communities who are the most certain to pay in full and on time. Is the debtor generally a poor man ?

A man can not borrow money unless he can give security, or has a place in business that commands confidence.

Who are the creditors?

More than eight million people in this country are the creditors of commercial and savings banks for more than four and a half billion dollars that they have on deposit. More than a million and a half persons are creditors of thirty life insurance companies, to the amount of more than four and a half billion dollars represented by their policies; in 1893 these companies disbursed among their policy holders more than $110,000,000. The building associations in this country in 1893 had about a million and three

quarters of shareholders and only one-fourth of the whole number were borrowers; the amount of the loans due by one-fourth to the whole four-fourths was $443,000,000. Would all these creditors be injured by reducing the value of the dollar?

Just as much as any creditors would.

But are not the farmers in debt?

Many of them are in debt on their current accounts, as to which a change in the currency system would have very little influence. According to the census less than one in five owes money on a mortgage, and his property is worth three times the obligation.

Is money used mostly for paying bonds and mortgages, or for buying things of the merchant ?

Less than 3 per cent. is used for the former and more than 97 per cent. for the latter. How do you make that out?

In the Census year there were less than two billions of national, State, county, municipal and school bonds, about six billions of real estate mortgages, and five and a half billions of railroad bonds. This makes in all thirteen and a half billions. One of the popular books in the interest of silver coinage says it is "estimated " at forty billions. Of the mortgages, about a billion and a quarter may be paid off annually, because the average life of a mortgage is nearly five years. The public and railroad bonds run for very long periods, many of them for fifty or a hundred years. Not more than a quarter of a billion of them are paid off annually. That makes a billion and a half of bond and mortgage payments in a year. In the same year the bank clearings of the United States, after deducting the transactions on the New York Stock Exchange, amounted to fifty billions, of which a billion and a half is 3 per cent. But a large amount of trading done in cash and in sections where there are no banks, does not appear in the bank clearings, and should be added to the fifty millions. The bond and mortgage payments, then, would be considerably less than 3 per cent., probably not over 2 per cent. of the whole use of money.

DECLINE OF PRICES.

Has there not been a great decline of prices since 1873 ?

Yes.

And it has of course worked a hardship to farmers who had mortgaged their farms? That is true in a general way, but only one-fourth of the decline fell on any one mortgage, the average life of which is less than five years, and there has been a considerable offset in the reduction of the prices of things farmers have to buy?

Has the fall in prices been approximately uniform ?

It has not.

What does that indicate?

That the fall can not be due to a change in the purchasing power of money, for then all prices would be affected similarly.

Where do you get your information ?

From the voluminous compilation of wholesale prices and rates of wages published in 1893 by the Senate Finance Committee.

How much fall does that show in cloths and clothing?

On the basis of 100 in 1860 the prices of cloths and clothing rose to 121.5 (gold) in 1873, and fell to 81.1 in 1891.

What was the change in the prices of metals and implements?

On the basis of 100 in 1860 they rose to 115.2 (gold) in 1873, and fell to 74.9 in 1891. And the products of agriculture?

Barley, corn, cotton, hemp, oats, meats, rye, tobacco and wheat, averaged according to their relative importance, and on the basis of 100 in 1860, rose to 106 (gold). in 1873 and fell to 98.4 in 1891.