Sound Currency

Quality money must possess in order to meet demands made upon it-Definiteness and stabil-
ity of value-Necessity of a unit of value-A common unit necessary for the carrying on of trade-
Contracts for future payment would not be entered into if money not stable Existence of
credit depended upon the certainty of the monetary unit-Stability of purchasing power-
Money may vary in value-Variations expressed by price, how caused--God money-How is
stability of value obtained--Practical test of stability of money is general stability in prices.

THE MONETARY UNIT.

Two kinds of money cannot circulate side by side when differing in purchasing power-A

difference leads to hoarding the more valuable metal-As a result prices rise-Gresham's law-

Its effects-Bankers generally the first to notice the tendency in a money to depreciate-Justi-

PAGE

fication of bimetallism-Necessary under bimetallism to have harmony of value-This only ac-

complished by the establishment of a monetary unit-Denominational and monetary units

Monetary and denominational units in the monetary history of the United States-Establish-

ment of the dollar of account, 1792-Depreciated money in Civil War-Resumption of specie

payments-Our four kinds of money held at par only by making each representative of gold-

The Government by no means free to select either of the two coinages as a standard-Gresham's

law-The monetary unit once established becomes the standard for measuring all values expressed

in money-The progress toward simplification and method in money-The duty of the Govern-
ment to provide a monetary unit and to provide against its being changed except by consti-
tutional amendment-The value rule should bear a deunite, known and unchangeable relation
to the value rules in use among the people with whom the nation trades-Identity of metal
alone assures identity of intrinsic value in equal weights.

LEGAL TENDER

Definition of the term-Object of a legal-tender act-Legal-tender money must be preserved at

constant value-If not, the object of the law is defeated-Legal-tender laws control the execution

of contracts Fixed value in the medium of payment underlies all taxation-Not the dollar but the

dollar's worth is the power of industry-Governments bound to pres rve the value of legal-tender

money-Value the essence of the matter-Equality of value alone will content the avidity of justice

for what is right.

THE MATERIAL AND FORM OF MONEY.

What principle should govern the coinage of metals and the creation of paper currency-Differ-

ence between two kinds of money-Coin, intrinsic value-Paper money's force depends upon law-

Beyond the limit of confidence paper money has no power of circulation-The value of coins not

dependent upon what is stamped upon them-Paper money is created by statute-Life of paper

currency depends upon the continuous sustaining power of the law-The evils of a depreciated

currency-How a government can secure itself against a depreciated currency-No reason why the

United States should not provide a system of banks of issue-The relation of the value of labor to

the material of money-Early times services requited by protection - Money now indispensable to

the daily lives of people-The material of money kept pace with the rise in price of labor-The

world in this way outgrows the inferior metals-Silver and gold the best money metals-The world

not bound to either if a more convenient medium is found-History of paper money-The phi-

losophy of paper money-The necessity of a metal base-Paper money should be good at all times

-This possible only when legislators understand the difference between good and bad money.

PAPER MONEY

Necessary that money merit and obtain universal confidence-Insistence of many economists

-Objections to an exclusively metallic circulation-Inert capital and interest-To secure pront

from money one must part with it-The policy of business men-The burden of idle money-How

can the burden be lightened-The burden of paper money offset by the profit upon its issue-Ex-

amples of bank of issue-Saving to the community by the use of paper money-Savings on

Government and bank issues of paper money-Early use of bank notes-Their circulation rests

upon the credit enjoyed by the issuer-Paper money of two kinds, bank and Government issues-

Convertible and inconvertible paper money-Three conditions necessary to the conversion of paper

money-Inconvertible money may exist at par with metallic money-Conditions of existence-In-

convertible and convertible money depreciate when public confidence is shaken.

TREASURY NOTE, OR DUE-BILL CIRCULATION.

Confusion of legal-tender terms-The right of taxation-The principles of circulation of an

irredeemable due-bill currency-Taxation to keep pace with expenditure, stability of the Govern-

ment-The due bill system a method of borrowing by the Government from the people-Repre-

sents the extreme of arbitrary exaction by the Government-Binds a people to a scale of taxation

commensurate with the volume of the paper issues-A due bill may or may not be made a

legal tender for debt-Case of greenbacks in the United States, 1862.

BANK-NOTE CIRCULATION

Bills of exchange-Checks on banks of deposit recent development of bills of exchange-

Certified checks-Different from bank notes, but would serve all the purposes of bank notes-

The economy of paper over netallic money-Increase of bank-note issues tends to reduce

rate of interest-No gain to the people from the greenback currency-Rate of interest during

period of note issues by State banks-History of the bank of Stockholm a striking proof of

reduction in rate of interest by bank issues of currency-Gain to the people of Sweden - People

would have been injured if bank of issues prohibited as in United States since 1862-National

bank notes a Government currency-Profits of national banks not equal to those of bank issues-

Risks taken during war commensurate with any profits made at the time-National Bark

currency merely cheapened loans-Under present system notes derive their existence and value

from deposited bonds-Banks whose names appear on national bank notes gain nothing by

their prolonged circulation-Bank notes proper have no vitality until issued, cease to have a

money force when returned to the bank of issue-True banks of issue have an interest in

putting out as large a circulation as possible-Tends to cheapen loans-Greater incentive to bank

of issue to lend-Elasticity of circulation of banks of issue-Obligations of a bank of issue-

Use of money by agricultural communities-Banks of issue in agricultural communities-Expense

of the present system-The benefits of well-managed banks of issue-Necessity of some

metallic currency-Identity of value between bank-note dollar and monetary unit-System in

Scotland-Evidences of prosperity seen in our history brought about by banks of issue-

Legitimate investment of a bank's funds-Violation by national banks-Capital invested in bonds-

Reduction of available circulation of banks by the national system-Practical inconvertibility

of national bank notes-Liab lity of depreciation of Government and bank currencies-Govern-

ment notes issued to creditors-Bank notes issued to debtors-Government subject to political

influences.

THE BALANCE OF TRADE

Balances in banking-The Clearing House-Money only needed to settle final balances, pay

wages and to carry on r tail trade-Rates of exchange-Money comes in at the end to settle the

balances-Precious metals in international trade pass by weight only -What good money is-

Bankable funds-No commercial community free to set up a local money of its own.

THE VOLUME OF MONEY

The per-capita requirement-Table bank credit per-capita circulation-No uniform proportion

of currency to population exists-Shows that Government should refrain from any attempt to

increase or diminish the supply of money by legislative enactment-The volume of currency

should increase with increased wealth-All the money of a country never in circulation at one

time-Increased effectiveness of money by repetition of employment-Legislation guided by per-

capita theory sure to be misguided-The supply of currency in a community depends upon the

desire and ability of individuals to obtain the amount wanted-Scarcity of money-A community

PAGE

does not retain a larger circulation than it needs-Tendency to establish an equilibrium-No

amount of money issued by the Government can arrest periods of scarcity-Periods of stringency

less liable to occur where area and population under one monetary system are enlarged-

Per-capita theory affords grounds for an increased supply of money-The dearness or cheapness

of money dependent upon the relation between the supply of loanable funds and the demand for

the use of such funds--Influence of the state of trade upon loans-Results of unwise and ill-con-

sidered augmentations in the volume of currency-The quantity of money in circulation should be

determined by the demand for it-Rapidity and smoothness of circulation needed.

VALUE

Definition of value-Utility defined-Value rises with the resistance of appropriation-Desires

measured by money or human exertion-Value as an attribute only-Value rises according to

demand and supply-Value in exchange-Money as value in action-Commerce deals in commod-

ities; finance deals in values-Commerce a complicated system of barter-Relation of finance

and commerce-The principles of barter must apply to all commercial and financial operations.

THE STANDARD OF VALUE.

Questions as to what is the standard of value-The need of a standard of value-The necessity for

a world-wide standard of value-Money standards of value must correspond with the standard fixed

by law-Nations trading together must have a standard of value common to all-Requirements of

commerce-London the center of finance-Necessary to conform to the standard of value in use

there-What is the true scientific standard of value-Human labor not, because not a constant

force-The foundation of Adam Smith's work-Division of labor-A standard of value must be

capable of subdivision without loss of value-Gold and silver best fitted to be standards of value

-Why does London insist on gold?

THE GOLD STANDARD.

Gold standard brought into use by influence of commercial forces-A natural outcome of

present conditions-Progress of money material from less valuable to more valuable substances-

Principles of the gold standard-The value of human labor not reduced-Transition from silver to

gold standard-Industry now co-extensive with civilization-Commerce universal-Large balances

to be paid-Gold fills the conditions better-Natural law alone has made gold the prime stand-

ard of value-Advance of commerce-Silver standard in different countries-Commerce brought

all nations into one monetary community-Standard in England, United States and Germany-Gain

under the gold standard in the United States-Gold mono-metallism the unavoidable destiny of this

country-Bimetallism a snare and a delusion.

A FINANCIAL CATECHISM.

MONEY AND ITS MATERIALS.

What is money-Main classes of money-Examples-The use of gold and silver as money-

Indications of money metals-The idea of gold for the rich-Confusion of quantity with value-

Is gold giving out-Production of gold-The movement of gold-Is gold too valuable for money-

England's position.

FIAT MONEY AND LEGAL TENDER.

Paper representatives' for money-Fiat money-Why fiat money is not successful-Experience

against the use of fiat money-Congress cannot regulate human desires-The workings of fiat

money-Legal tender acts--Not necessary for gold money-Example of Russian Government-

Introducers of cheap money-Earliest example--A modern instance-Government promises-Con-

fidence as a factor in their circulation-What happened in 1893.

VOLUME OF MONEY AND PRICES.

The act of 1873-Trade dollars-Trade dollars not legal tenders-Increase in the use of silver

-Amount coined since 1873-Demonetization of silver in Germany-Business and the volume of

currency-"Money of ultimate redemption "-Amount of money in country, 1873, 1894-Money in

France, Germany and England-Per-capita circulation of European nations-Money and human

happiness-No advantage in a cheap dollar-The ideal dollar-Effect of gold and silver standards

-Prices and silver-Manufacturers and silver-Bimetallism.

BIMETALLISM IN HISTORY.

Free coinage-When is coinage not free-Free coinage means bullion value-Only hope of

mine owners to drive gold out-What is bimetallism-Alexander Hamilton's investigation of ratios

-Thomas Jefferson's position-The silver dollar not the sole monetary unit, 1792-1873-The mone-

tary unit-Hamilton on the unit-Change in the weight of the gold dollar, 1834-The gold dollar of

1849-Evidence that the standard is not identical with material of the one-dollar piece-The

market ratio--Gold driven out prior to 1834--Reports to Congress on the coinage of the two metals

--The dollars of the Fathers--Coinage of silver by the U. S.--Difficulty of keeping gold and silver

in circulation in India-Bimetallism in France--The Latin Union-Not able to maintain the parity

of gold and silver-England and bimetallism-Ernest Seyd and the Bill of 1873-Debate in the

House Remarks of Kelley, Hooper and Stoughton-Gold the standard since 1834-Changes in

standards-The quantitative theory of money-John Stuart Mill's position.

BANKS AND DEBTS.

money-Banks debtors

Credit-Loans and discounts of national banks -Can banks "corner"
for deposits-Why banks do not favor cheap money-Meaning of cheap and dear money-Credit
used to supplement capital--Money of itself yields no return--Bankers and deposits-Panics-
Influence of Wall Street-Stock Exchange reflects the state of business-Importance of con-
fidence and security to debtors-Rates on money-The gold standard not raising the rate of
interest-Showing of the census tables-Capital and interest-Debtors and obligations--Who
are debtors and who creditors-Obligations of commercial and banking institutions Creditors
injured by reducing the dollar-Farmers and mortgages- Bonds and mortgages,

DECLINE OF PRICES

Decline of prices since 1873-Effect on 'mortgage indebtedness-Fall in prices not uniform-

Not due to the purchasing power of money-Senate Finance Committee Report-Changes in

prices-Percentage of fall-Causes of lower prices-Increase in production-Competition from

silver using countries not severe-Why has silver declined-Production has increased rapidly-

Cost of producing silver has declined-Increase in manufacturing Indications of prosperity-

Particulars of the growth of the country since 1873-Farm values-The cause of prosperity

checked in 1893-The silver legislation-Panic of 1893- Effect of silver legislation on foreign

trade-Export of gold-Silver monometallism masquerading under the guise of bimetallism.

NATIONAL POLICY..

Not to our interest to impair the credit of the country-Options-Trade balances with gold

and silver countries-Effect on Europe of the silver policy of the U. S.-International Bi-

metallism-The U. S. the only country where people want to reduce gold money to silver
money-Inducement held out by silver men.

COIN'S FINANCIAL FOOL.

INTRODUCTION

"Coin " an absurdity-Science of Finance does not come by nature -Necessity of study-

Pictorial illustrations-Object of Coin's Financial School-Virtual outcome a single standard of

silver.

COIN'S FIRST FALSEHOOD....

Statements as to the money of the Roman Empire-Falsity of statement-Reasons-Wages at

the Christian era-Difference in money now and 1445-Original penny-Clipping of coin-As to

the price of wheat-Attempt of Coin to attribute the low price of wheat to the shortage of

money-The reasoning applied to other cases-Section from report of U. S. Monetary Commis-

sion, 1876-Misquoted by Coin.

OUR FIRST SILVER DOLLAR.

The silver dollar not the monetary unit, 1792-1873-Silver dollar the monetary unit of Congress

of the Confederation, 1785-The meaning of the word "unit"-The law of 1792-Coin's deduction

and error-Congress adopted two things as money-The meaning of "unit" in the law-Confusion

from two uses of the word-Reason for Jefferson's order to stop coining silver dollars.

ANOTHER FORGERY.

The Act of 1843-Circulation of silver coins due to their legal tende quality - Shown to be

untrue-The full law as passed by Congress-Only two foreign silver coins legal tender, the Spanish

dollar and the 5-franc piece-Reason for their being made legal tender-Coin's contention that

coins circulate by reason of their legal tender quality-Quotations on coins more than legal tender

value-Their bullion value more than a dollar-Scarcity of silver-Jefferson and Jackson's recom-

mendations -The question of ratios-France's alleged reason for establishing a ratio-The real

reason for our change in 1834.

A FEW NUGGETS

The clearness of Coin's statements-The poor man's money-Gold the money of the rich

All poor men ought to be in favor of silver-What does a poor man want money for ?-Poor entitled

to the same standard of value as the rich-Silver as a human being-Logic of silver's treatment-

Bimetallism, 1872-Coin's pictures-No "metallism" whatever in 1872.

THE CRIME OF 1873

Silver not demonetized secretly-Mode of passing bills-The law of 1873-Discussion in Con-

gress of the omission of the silver dollar from the bill-Remarks of Messrs. Hooper, Stoughton,

Potter and Kelley-The proposed dollar of 384 grainsstricken out by the Senate-Introduction of

the trade dollar-The U. S. on the gold basis in practice ever since 1834-Dishonesty of the present

intention to change the character of the dollar-The question what is a dollar.

THE DEBATE WITH LYMAN J. GAGE

Coin's answer to the problem of varying standards-The mints of the world to be thrown open

in order to create an unlimited demand-Statements in regard to coinage of silver-Reference

to ratios "Variation of two points-A difference of two per cent. sufficient to expel one metal-

Giffen's statement-Mints of the world dwindle to those of two nations--Letter from Mr. Gage—

Another fib-Bland-Allison act does not discriminate against all other forms of money.

COIN ENLISTS IN THE CAVALRY

Coin's explanation of a unlimited demand-Example of a demand for horses by the Govern-

ment-Statement of the silver men, 1890--Silver would advance-Price of Silver per ounce, 1890-

1893-Repeal of the Purchase Act--Supply of silver increased with Government's increased purchase

-Free coinage, however, does not imply purchases by the Government--Bimetallism impossible--

The demonetization of silver did not destroy a dollar of redemption money-Would not have

redeemed greenbacks in silver when at a premium--Mr. Walsh's denial.

COIN'S SERIES OF EXPLOSIONS..

Coin's philosophy of panics-The argument involved--The crisis of 1890--How Professor Laughlin

got left--Professor Laughlin's letter--The lectures that never took place--The commercial value

of silver at par with gold-Demonetization of silver--Germany first, not the U. S.

COIN'S LECTURE ON THE GREENBACK SYSTEM.

Objection to a greenback system-When is a government not able to enforce legal tender quali-

ties--Paper money-Indefiniteness of statements-Paper money and war--Explanation of social

conditions during suspension--People not all on the same footing--Professor Sumner's statement,

wages lost while earned-A precocious traitor-A prophecy-Free coinage statesmanship.

JUGGLING WITH PRICES.

Prices of wheat-The purchasing power of a dollar-Examination of Coin's statements concerning

price--Explanation of the increase or decrease of value per bushel.

No difference to England what kind of money we have-What we owe to England payable in

English money--Prejudice against England-War with the octopus --England forcing a gold

standard upon us-Bimetallic committees--The business of the country-Gold standard in England

-Bimetallic in the U. S.-A little more treason-The argument that we need more money-

Coin's bimetallism-The way to bring gold back if driven out by free coinage--Can legislate the

premium out of gold--The meaning of this statement--Coin's and General Walker's positions.

CONCLUSION

forgery with intent to deceive.

THE BULLION REPORT.

[Report from the Select Committee on the high price of Gold Bullion, 1810.]

The object of the Committee-Price of gold bullion, 1806-10-Foreign gold higher than bar
gold-Diferences in price betwee bar gold and coin-Prices of silver, 1805-10-Exchange unfa-
vorable to England, 188-Exchange cities-Gradual improvement in exchanges-Exchange at
Paris, Hamburg and Amsterdam-Opinion of the Committee as to cause of high exchange-Expert
testimony.

ALLEGED SCARCITY OF GOLD.

High price of gold ascribed by witnesses to scarcity arising from an u usual demand in Eu-

rope-Opinion of the Committee that demand for gold is not the cause of its disappearance.

Price of Gold in Continental Markets.

PAGE

Influence of demand on price of gold-Inference of Committee-Price of gold in Europe and
price in England in paper currency-Expert testimony-No alteration of late in mint price of
gold in foreign places-Foreign gold less price of exchange-Testimony of Mr. Abraham Goldsmid
At Hamburg and Amsterdam, gold not risen in price as measured in silver-Permanent rise of
gold above its mint price--Reasons for it.

Price of Gold in England....

Supply of gold on the continent increased by England's substitution of another kind of cur-

rency--No want of bullion in England during Seven Years' War and the American War- Lloyd's

Lists and Wettenhall's Course of Exchange--Steady price of gold, 1773-1799--Two periods when

gold exceeded the mint price--Doubt as to the scarcity of gold in England-Disappearance of guin-

eas does not prove a scarcity of bullion--Plenty of gold can be had at the market price-Exports

and imports of gold-England the Clearing House of the world-Rise in the market price of silver

not ascribed to scarcity--Iligh price of gold not due to scarcity-The position of gold in England

-The price of gold, under normal conditions being measured and expressed in gold, cannot be

raised or lowered by an increased or diminished demand for it-The real price of gold-The cause

to be found in the state of the currency.

Price of Bullion Compared with Coin.