THE BATTLE OF THE MONEY METALS

I. BIMETALLISM SIMPLIFIED.

BY GEORGE H. LEPPER.

The “free-silver delusion” is not dead, nor will it die unless the McKinley administration shall give it its quietus by providing the country with a sound and popular system of bimetallism. Even the most sanguine of the Republican leaders must admit that the prospect of accomplishing this task by international agreement is not so encouraging as to make the tentative consideration of other plans, not requiring concerted action, unnecessary or useless. The purpose of this article is to present such a plan, and to contrast it with those which have already been tried, or have thus far been proposed.

That the financial policy we have pursued since 1878, the year of the Bland-Allison Act, has been absurd and ruinous hardly admits of two opinions. Secretary Carlisle, in his letter of September 16th last, gave authoritative utterance to what had long been tacitly understood. He said, “If the time shall ever come when the parity of the present silver dollars and silver certificates cannot be otherwise maintained, they will be received by the government in exchange for gold.” In other words, the vast stores of silver purchased by the United States under the laws of 1878 and 1890 are a dead asset of the Treasury, and cannot be utilized for purposes of redemption until sixteen ounces of silver shall again be equivalent to one of gold, or until they are re-sold in the open market for gold. To render this treasure available for ultimate redemptions thus becomes a prime condition of our problem.

There is a growing disposition in certain influential quarters to evade the difficulties in the way of international bimetallism by taking the government out of the banking business, and relegating the matter of currency issues more and more to the banks. Whatever may be said in behalf of this course, it is certainly not popular with the masses, who, justly or ignorantly, have come to look upon national banks as favored objects of legislation, and in league with syndicates and trusts. But, aside from this, the real core of the trouble is not removed. We but shift the burden of responsibility. The ultimate fund for redemption remains limited to the one metal as beforehand can serve the banks even less efficiently, for the more divided the responsibility the larger the proportion of gold required for reserve purposes.

International bimetallism at the contemplated ratio of 16 to 1, and bimetallism by independent action at the same ratio, although opposing issues in the late campaign, are founded upon the same errors and misconceptions. Both assume that monetization creates a commercial demand for the metals, thereby enhancing their values; that the use of gold and silver as money substances has been one of choice with us instead of necessity; and that legal-tender laws create value.

It may be going too far to say that monetization creates no demand, but whatever demand it may be supposed to create is not a commercial one. In the latter sense the word signifies both an actual purchase, or the exchange of one thing for another, and a permanent withdrawal from the market of the thing bought. The act of coinage is certainly not a purchase, for, directly or indirectly, it aims to restore to the offerer of the bullion not something else, but the precise thing received; nor is the metal retired from the market, since it is actually or virtually, though in an altered form, immediately restored thereto. The whole process is merely one of bailment. It would therefore seem incumbent upon those affirming the efficacy of monetization to raise the price of the metal to show by scientific analysis just how, why, and to what extent it does so. The fact that from 1792 to 1873, with free coinage at a very close approximation to the market value, not once did the legal and commercial ratios coincide, and that the change of the former from 15 to 1 to 16 to 1 in 1834 had no perceptible effect on the market, seems to be conclusive proof that the general belief that free coinage at a fixed ratio appreciates the over-valued metal is delusive.

It is important to inquire into the grounds upon which the use of silver and gold is founded, for if we have chosen them for that purpose there is an implication that other substances might have served the same object almost, if not quite, as well. Such is not the case. Silver and gold are absolutely unique in possessing the qualities indispensable for money, and not only nature, but immemorial custom and deep-rooted prejudice combine to compel their use in the exchanges irrespective, and even despite, of legislation. Monetization, therefore, cannot, for this further reason, add to, or take away from, their respective values, because the exchangeability that monetization is supposed to give them is a natural quality and not the creature of law. But so much more is this true of gold than of silver, that the dependence of modern commerce, and, through it, modern civilization, upon it is almost absolute. If, therefore, free coinage at a ratio unfair to gold were attempted, gold would cease to be offered at the mints, but it would nevertheless continue in use in final settlements, especially in transactions of some magnitude, thus preventing its decline in value.

Suppose, then, that such a law, national or international, should go into effect to-day, would anyone be so fatuous as to part with his gold until the effect of the law could be discerned? If the governments at the same time should exercise the same good sense, they would retain their gold and disburse their silver, but such conduct would defeat the very object of the law. If, on the other hand, they should release their gold, retaining their silver, they would give fresh point to the oft-proved saying, “The fool and his money are soon parted.” A bona-fide attempt on the part of one or more powers to change the market ratio of the metals could result only in transferring government gold to private coffers, and in a general fall to the silver basis with all its attendant evils. Meanwhile the gold would continue its functions as money in new transactions, but at its market value, never by any chance reaching the public treasuries except on the same basis. The inconvenience of transacting business with a metal some thirty times as heavy, value for value, as that to which they had been accustomed would, without further reason, speedily induce the governments to a restoration of the gold standard at any cost.

As for the legal-tender quality, it cannot be denied that governments here possess a peculiar power which individuals cannot exert; but that fact does not make the exercise of that power morally right. The quality of legal tender infused into the debased dollar cannot but add temporarily to its exchangeable value in a degree gradually diminishing with the exhaustion of the accumulated credits. When, however, the last debtor in the series is reached, and there is no longer a Peter to rob for the sake of Paul, the fraudulent coin must inevitably sink to the value it had as bullion prior to the act that created it.

Upon such fallacies as these it is sought to erect the elaborate superstructure of the civilized world’s monetary system! Some of the more advanced thinkers among the self-styled bimetallists, realizing that some deference must be paid to the lessons of experience, which offers not a solitary instance of the concurrent use of the two metals under a fixed ratio, argue that, even so, the chief blessing of bimetallism—a less variable standard—will have been secured in the automatic oscillation from one circulation to the other. If this oscillatory feature is the object sought, the adoption of a ratio of 16 to 1, or thereabouts, would certainly not secure it, but one almost identical with the market ratio would be imperative. Not once in the history of our country did this alternation occur, although from 1792 to 1873 we were upon the double standard. It is true that in 1834 the circulation changed from silver to gold, but that was due not to the automatic effect of that system, but to an actual change of the legal ratio from 15 to 1 to 16 to 1. But if the legal ratio is now made to conform to the market one, what becomes of our present silver coins? Must they be called in and be replaced by the new? If so the convenience of our subsidiary coinage will be sacrificed, for a silver dollar twice its present size would be intolerable.

The obstacles in the way of international bimetallism need not be enumerated here. The proceedings at the Brussels monetary conference in 1892, though they accomplished little besides, certainly served to make these difficulties plain. The primary object is to make silver coins and gold coins continuously interchangeable in trade at a ratio approximating as closely as possible to 16 to 1, and the discussion of the means to accomplish this has apparently narrowed down to one proposition to be answered by a simple yes or no: Shall the free coinage of gold and silver at the ratio of 1 to 16 be restored? It will not do to insert any other ratio (except, perhaps, 1 to 15 or 1 to 15½), because if a ratio closely approximating the commercial one is contemplated, each nation might decide the question for itself, and an international agreement would be superfluous. All the civilized nations have their own established ratios of coinage varying from 15 to 15½ or 16 of silver to 1 of gold, and whichever of these should prevail the result could not but be a serious matter to those nations obliged to reform their coinage in accordance therewith. Neither horn of the dilemma presented by the plan of a fixed ratio is practicable; the convenient one of 16 to 1 is impossible, and the commercial one would necessitate recoinages and make the coins prohibitively cumbrous. The choice of an intermediate ratio would be a virtual relinquishment of the principle itself, for how would that ratio be arrived at if not by mere guess? There are no data to guide us, nor is there any formulated rule by which the desired ratio may be determined. Besides, the intermediate ratio would still remain open to the objections advanced against the higher ratio, both in requiring recoinage and in unduly enlarging the coins.

The inevitable result of free coinage at a fixed ratio is to expel the undervalued metal from circulation. There can be but one way to prevent this, and that is by a system of sliding scale whereby scrupulous fidelity to the state of the market from day to day may be preserved. Diurnal recoinages are of course out of the question, but the thing is nevertheless both easy and practicable.

Let us assume that gold only has hitherto been used as money, that 25.8 grains thereof have been taken to be one dollar, and that it is now desired to supplement it with the use of silver. Our proposition will necessarily take this form: If one dollar is equal to 25.8 grains of gold, it must be equal to as many grains of silver as 25.8 grains of gold will buy in the open market. Here we must remember that what is true to-day may not be true to-morrow or a year hence. So many grains of gold may to-day be worth 412½ grains of silver, to-morrow they may be worth but 400, and next day, 420. By fixing the amount of silver in the dollar we thus utter through these coins a new falsehood each day. Constant values, not constant weights, is what we are driving at; so in lieu of the silver coin we must substitute a promise to pay a gold dollar, or a gold dollar’s worth of silver, whatever the state of the market. This is what I designate natural bimetallism. The silver dollar and fractional pieces as we now have them may nevertheless continue in circulation, for the promise can be written into them by legislation to redeem them, upon surrender, in the same manner as the paper promises. It is possible that Hamilton and his successors in office prior to 1837 may have thought of this expedient, but discarded it as not then feasible. We must remember, however, that they had serious practical difficulties to contend with, which are now happily removed. The advantages of the telegraph, the cable, the improved means of transportation, and our admirable system of market quotations, enable us now with certainty and ease to determine daily what any given thing is worth in terms of any other.

In order to make my plan as clear as possible, I shall run the risk of seeming elementary by following through, step by step, a typical transaction under it: Let us fancy that the reader, bearing a nugget of gold in his left hand and another of silver in his right, and desiring to convert them into money, repairs to the Philadelphia mint. He applies there to the proper clerk, who, for simplicity’s sake, we will suppose performs all the operations. The clerk weighs and assays the two pieces of metal, and finds the gold one to contain 25,800 grains of standard gold, worth precisely $1,000, which are counted out in bills. A similar operation reveals that the lump of silver weighs 35,500 grains, but the clerk is now observed to consult a table before saying, “The market equivalent of a gold dollar is to-day 710 grains, consequently your 35,500 grains are worth $50;” and he then proceeds to count out the money in bills precisely like those given in payment for the gold. Upon examining these at his leisure the reader discovers imprinted thereon a contract running as follows: “This note entitles the bearer on demand to [the denomination of the bill] dollars in gold or to the market equivalent thereof in silver.”

In the course of time, say five years hence, these identical notes, by the accidents of trade, have come into my hands, and I desire to have them redeemed. Applying to the United States Treasury I find I am granted the privilege of taking payment in silver, in gold, or partly in one and the balance in the other. For the purposes of our illustration, however, we will adhere to the figures already used. In exchange for the $1,000, then, I receive back precisely the weight of gold originally given for them. For the $50 I receive six pieces of silver of different sizes, which I notice are arranged upon a decimal scale of grains. They contain respectively 30,000, 5,000, 1,000, 500, 100, and 50 grains; in all 36,650 grains, or 1,150 grains in excess of the original quantity. Upon inquiry I learn that this excess is not due to any mistake by the clerk, but that since the first transaction silver has fallen so that 733 grains are now commercially equal to 25.8 grains of gold, and that the government has simply redeemed my notes at par. After this first experience I have many subsequent transactions with the mint and with the Treasury. At the former I find that I have the choice of notes, gold coin, or silver coin. At first I reject the silver coins as being under weight, but upon its being explained that they are purposely made light for the sake of convenience, and that they are by general law redeemable in the same manner as the notes, I no longer object to them. At the Treasury, on the other hand, I am sometimes, though rarely, informed that the government is exercising the option reserved in its contract; that it is paying exclusively in gold, or exclusively in silver, or partly in one and partly in the other. These occasional disappointments, however, never affect the integrity of the money I have in hand, for whether redeemed in gold or silver, everyone knows that it will be redeemed at its face value, and it accordingly passes unquestioned.

Upon several occasions I present bonds of the government for redemption, some of them issued previous to the inauguration of the new system, and others issued afterward. In either case I find that the same system of redemption prevails as in the example of the notes. Treasury notes, silver coins, and silver certificates—one and all I discover are also redeemable like the new notes or convertible into them, so that I need never concern myself about any matter save their genuineness.

Gold certificates and greenbacks must, of course, be redeemed as their special contract requires, but, once redeemed, they must reissue in the new bimetallic notes which I have described. Thus a very simple method is provided whereby this form of currency may be transmuted into another without contracting the circulation.

The great desideratum is to make our vast stores of silver available for ultimate redemptions, and this, natural bimetallism effectually accomplishes. Our gold reserve would therefore cease to be indispensable to the preservation of our national credit just as soon as the greenbacks and gold certificates were converted into the bimetallic notes or cancelled. But there need be no fear that the gold reserve would ever become depleted. By removing all danger of the debasement of our money, by insuring the parity of every dollar of our currency with gold, and by permanently retiring the greenbacks, we destroy the incentive to hoard gold, cause its return to the reserve, relieve it of half the burden it formerly had to sustain, and reduce to a minimum the tendency to withdrawals. The copious supply of gold thus secured would enable the Treasurer to waive his option to pay in silver whenever the customer preferred gold, thereby enabling merchants to use the less cumbrous metal for foreign shipments. Indeed, it is entirely probable that the new notes would be preferred to gold in international as well as in domestic exchanges.

An advantage of especial importance is that the metals can be concurrently used. The oscillation from one to the other, even if it be admitted that it would provide us always with the better of them under whatever changes may occur, is certainly not to be preferred to the constant and equal use of both. The unlimited coinage of the two metals upon a plan so equitable, recognizing as it does their precise market relations from day to day, would enable us to view with indifference the fluctuations of the market, however great, and to whatever cause due. Incidental to this advantage, and second only to it in importance, would be the establishment of a par of exchange simultaneously with the gold-and with the silver-using countries by allowing customs duties to be paid in silver bullion at market prices, or in gold.

It may be contended that under the plan here proposed the government might lose by a continued decline in silver, and that the silver it already has would remain depreciated far below the price the government paid for it. I frankly admit this. But is it reasonable to suppose that silver will continue to decline? The probabilities are that in the succeeding twenty years the production of gold will increase more rapidly in proportion than silver; and it also seems that whereas processes for extracting and refining silver have well-nigh reached their limit of economy, the new processes for treating gold are rapidly improving. Nor must it be forgotten that should such a decline occur the mint deposits are from day to day keeping pace with the withdrawals, the losses on the latter thus being counterbalanced by concurrent gains, and interest-bearing debts being constantly transmuted into non-interest bearing currency. It is equally clear that the utilization of a dead asset, as the government stock of silver now is, is a distinct gain, and will permanently dispense with the future issue of bonds for the repletion of the gold reserve. As for the silver purchased by the government under the Acts of 1878 and 1890 having become depreciated, the fact is there whether we choose to recognize or ignore it. There is no better way for palliating that loss than to make that silver immediately available for the payment of the nation’s debts.

Allied to the question of the costliness of the system is that of its tendency toward, or freedom from, speculative disturbances. So long as payment solely in gold was compulsory, speculators had a fertile field for their operations. By giving the Treasurer the option of payment in silver or gold, however, raids upon either metal can be met by paying exclusively in the other until the proper equilibrium is restored. If a real difficulty should still be found to exist in practice, a slight mint charge would effectually put an end to it. In any event, natural bimetallism is much less open to criticism on this score than the existing system, or than that of the fixed ratio.

The pieces of silver with which redemptions are to be made are in no sense to be regarded as money. They are distinctly merchandise, possessing a commercial value precisely equivalent to the number of money units received or surrendered therefor, and when the notes have been redeemed, and the commercial equivalent has been given therefor, the government’s responsibility ends. The government assumes no obligation to maintain silver bullion at a given ratio to gold, but it does assume to make each unit of money the equal of 25.8 grains of gold. In other words, the fluctuations in the value of silver are confined to it in its bullion shape, and cannot enter into its form as money. The idea that paper currency must be redeemed in gold, as money, or silver, as money, is erroneous. It is redeemed in those metals because they have value as merchandise. In domestic transactions this fact is often lost sight of, but it becomes manifest in international exchanges when the metallic money passes strictly on its merits as bullion, and without regard to the stamp it bears. For these reasons the Treasury should not be understood as guaranteeing the weight or fineness of the metal, except in its immediate transactions, although to facilitate its ready acceptance between reputable merchants, the affixing of the government’s seal upon the pieces would be a very proper practice.

Nor is there any mechanical difficulty in the way of the operation of the plan. The silver could be fashioned into pieces of different sizes graduated upon a decimal scale of grains, with the smallest piece containing fifty grains, being somewhat larger than the current dime. By limiting redemptions, then, to fifty dollars and multiples thereof, our pieces will in every conceivable instance enable us to make the exchange, or redemption, to the accuracy of a single grain on each dollar, which is certainly sufficiently close for all practical purposes.

In contrast to the national banking system, the bonds could be retired without derangement to our finances, the metals forming a basis upon which our outstanding currency could directly rest—thus obviating the extravagant features of that system and stripping us of the impediment of an immense debt. And not only this: the encouragement natural bimetallism would hold out to owners of bullion of both kinds would cause our national vaults to be filled to overflowing with the sinews of war, and make us the best equipped nation on the earth for a prolonged struggle, should such a struggle come.

By providing a means for the remonetization of silver at the market rate we are doing its friends a greater kindness than they ask. Free coinage on seemingly more favorable terms would result in immediate overproduction and a glutted market, from which condition it would be most difficult to escape. If there be any merit in the contention that a “demand” for the metal is what is needed, and that that demand will enhance its price, so much the better, for in that case not only will the condition of the silver industry improve, but the government itself will be benefited by the enhancement in the value of the metal it already holds and may hereafter acquire. The example set by the United States would be gladly imitated by other nations, and the use of silver as a basis for money would speedily rival that of gold.

Viewed as an experiment the trial of it would be inexpensive and without peril, while congressional debates pending its consideration would give no cause for apprehension or disturbance to business, since the gold standard would not be jeopardized. But why should it be regarded as experimental when the most elementary and most familiar business principles are followed?

The question may be raised whether the preservation of the gold standard is desirable, since, it is claimed, it is gradually appreciating in value. To this it may be said that the peril of the gold standard does not consist in the fact that it is rising, but that it has been hitherto accompanied by the non-use of silver in final redemptions. That an appreciating dollar is necessarily an evil is, moreover, fairly debatable. During the period from 1864-1872 (which our Democratic friends delight to laud as the most prosperous in our history), although we were nominally on a bimetallic basis, contracts were made on that of the greenback, which rose during that time an average of ten per cent per annum, to wit: from 49.2 cents in 1864, to 89 cents in 1872. In other words the debtor who borrowed $492.00 in 1864 was obliged, eight years later, to pay his creditor $890.00 of like purchasing power as he had received, in addition to a considerably higher interest than now current. I do not wish to be considered as standing sponsor for the rising dollar, but it is a pertinent question to ask those who decry the gold standard for this reason, why the same cause did not have the same effect in each instance.

The objection may be made that I would make of a silver mere commodity, but the point is not well taken, inasmuch as the mint offerings are transmuted into paper currency, which is virtually making silver, money; moreover, the silver itself is retained in its present form of subsidiary coinage. Silver is not a moral being possessed of rights and sensitive to insults; it is a mere thing whose function it is to serve us in any way we may deem most conducive to our interests. If under the system of natural bimetallism it does this best, the question as to its money or commodity character is vain. Moreover, under Gresham’s law, one metal under the fixed ratio is not only “reduced to a commodity,” but is absolutely expelled from circulation and as a basis for circulation; and we have also seen that in the last analysis both silver and gold are commodities under any system of specie payments.

Under a republican form of government, where frequent and extreme changes from one policy to another must be guarded against, that policy should be adopted which most nearly conforms to justice, and which the sense of the largest majority commends. What proposition, then, could be fairer and more apt to commend itself to the general intelligence than that the metals should be monetized at their commercial values from day to day, or what policy more likely to remain unaffected by the mutations of parties and politics?

In conclusion let me sum up the salient points: We have seen (1) that the chief weakness of the present system is the non-availability of silver for final redemptions; (2) that “currency reform” is inadequate because of its unpopularity and in failing to increase the primary basis of money by the addition of silver; and (3) that the principle of the fixed ratio is fallacious and impracticable. On the other hand, we have discovered Natural Bimetallism to be the application of the principles of everyday business to that business which underlies all others,—national finance,—and that the advantages resulting therefrom are: It dispenses with the necessity of an international agreement with its attendant uncertainties, perils, and delays, and at the same time points out the way to a sound and permanent home policy upon which all our factions could unite. It practically restores to silver its unlimited coinage at its just market rate, injects a healthy stimulus into the languishing silver industry, preserves our admirable system of subsidiary coinage, and utilizes both metals as companion pillars of our national credit. It coaxes gold to the mint, keeps it there, and does away permanently with bond issues. It provides for the retirement of the greenbacks, supplies their place with currency equally sound but less hazardous, and insures the absolute parity of every dollar in circulation with every other, and with gold. In fine, as every true principle must, and as only a true principle can, it answers every condition of the problem to which it applies, and commends itself as the best, if not the only, way out of our financial embarrassments.

II. BIMETALLISM EXTINGUISHED.

BY JOHN CLARK RIDPATH.

The article on “Bimetallism Simplified” by Mr. George H. Lepper is open to one serious criticism: the title should be changed to “Bimetallism Extinguished;” for, when the argument is translated out of its sophistical form, that is its precise meaning. We are obliged, in such a matter as this—even at the expense of courtesy—to break through the thin film of plausibility, and at one stroke to lay bare what is in the bottom.

It is a marvellous thing that they who engage in excogitating this kind of double-meaning literature about bimetallism, should suppose that the people can any longer be deluded with it. The agents of the money-power and the fuglemen of the dominant political party seem to think that a certain species of casuistry and complicated makeshift of argument can still be forced into currency, as it has been in the past, and that the great American democracy can be persuaded thereby to accept fallacy for truth and thus to perpetuate the reigning Dynasty of Robbers. Messieurs, you can perform this feat no longer.

Mr. Lepper admits in the outset that the McKinley administration is doomed unless it can provide the country with a sound and popular system of bimetallism. As a matter of fact, a sound system of bimetallism is simply bimetallism. A popular system of bimetallism is simply bimetallism—neither more nor less. In this vital matter, the popularity will take care of itself, and so will the soundness.

In the next place, we observe that if the McKinley administration depends upon the adoption by it of any system of bimetallism, then the administration is doomed, deeply and darkly doomed, already. Let the world know that the McKinley administration will not provide, and has never intended to provide, the country with any kind of bimetallism. The administration has no notion of such a thing. It was not created for such a useful and honorable destiny. It was created to prevent bimetallism by treacherously pretending to be in favor of it. They who created the administration, they who determine and will continue to determine its action, openly sneer at any system of money except the gold-based system of monometallism.

Mr. Lepper must be aware of this fact. Indeed it is to be hoped that there is not any longer one man in the United States so far gone down the slopes of delusion and idiotic infatuation as to imagine that the hollow pretensions of this administration in the direction of bimetallism by international agreement, or by any other method, have ever been anything else than cunning subterfuge and treachery.

The politicians who worked out the St. Louis platform knew what they were about. They knew that they were creating a hypocritical document with which to deceive and ensnare the American people. They fixed their net and made their haul. They succeeded to this extent—that they elected their ticket and gained possession of the government. Lo, the day of judgment has already come! Now, in the endeavor to postpone the judgment, they prepare arguments under captions that have a friendly sound but are at bottom bitterer than cassia and more mockful than the laughter of Mephistopheles.

The next stage in the policy of these gentlemen is to invent something that shall seem to be bimetallism, but is not. This something they seek to palm off on the world and to distract mankind with it until the money sharks who are chuckling behind the gold-vaults of two continents shall be enabled, in the confusion and mêlée, to shuffle off to covert with their incalculable loads of booty.

Mr. Lepper’s paper is a document of the kind described. The general purport of it is this: “People of the United States, I am a physician. I belong to the silver school. I am a graduate of the Bimetallic Institute. This pill which I give you is out of the silver pharmacopœia. It will heal all your diseases perfectly.” But when you examine the pill which he exhibits, you will find it to be a solid bolus of gold, filmed over with tin foil.

Mr. Lepper enters upon the discussion of the subject with the following statement: “The vast stores of silver purchased by the United States under the laws of 1878 and 1890 are a dead asset of the Treasury, and cannot be utilized for purposes of redemption until sixteen ounces of silver shall again be equivalent to one of gold.” Observe what becomes of these propositions under a truthful analysis. In the first place, our “vast stores of silver” are not vast stores. They are not nearly as vast as they ought to be. There are no bursting vaults of silver in the Treasury of the United States and never were. In the next place the stores of silver are not a dead asset of the Treasury. They are just as much a living asset of the Treasury as is the accumulation of gold therein—and in the same sense. These stores cannot be used for purposes of redemption because they do not exist for that purpose. A bimetallist who is not a bimetallist is always strong on redemption; and he knows only one redeemer—gold. The redeeming business in our financial plan of salvation has been altogether overdone. In the name of wonder, what is it we want to redeem? Is it the greenbacks? Is it any of our legal tender? The greenback is already constitutional money. Does Mr. Lepper know that the greenback has been declared constitutional money by the Supreme Court of the United States—this with only a single dissenting vote? Does he know that every national bank bill in the United States is finally redeemable in greenbacks? Does he know that in our scheme of redemption, the people have only a paper redeemer, while the banks, with the connivance of the government, have a redeemer of gold? Our “vast stores of silver” have only to be coined into silver dollars; to be used as primary money, just as gold is used; to be paid out just as gold is paid out in the transaction of national business, and in particular in the payment of the national indebtedness. If this is freely done, the exaggerated purchasing power of the latter metal would at once be reduced to the normal standard. This reduction would immediately express itself, or begin to express itself, in a general rise of prices, in a revival of business, and in a universal restoration of prosperity. Everything would again be well in the great Republic. All this would happen without financial sin and without a redeemer.

Mr. Lepper very properly says that international bimetallism and independent bimetallism “are founded upon the same errors and misconceptions.” He should have said that they are founded upon the same truths and necessities. For “errors,” read truths, and for “misconceptions” read necessities. The writer of “Bimetallism Simplified” next goes on to say that whatever value may be created by monetization is not a commercial value. Well, then, what kind of value is it? Is it a social value, such as a man attributes to his child that is not for sale? Or is it a political value, such as a party manager attributes to a vote that is for sale?

Let us see whether monetization does, or does not, create value. We will not quibble about the phrase “commercial value,” but come directly to the issue of value in general. Take the case upon which the goldites so greatly rely, that of the safe burned in a fire with a bag of gold coin and a bag of silver coin fused within. The triumphant gold sophist says, “The ten gold dollars fused into a lump will still be worth just ten dollars, while the silver dollars fused into a lump will be worth only five dollars.” Of course the lump of fused gold will be worth ten dollars when it is coined and measured by itself! Suppose that the lump of fused silver be coined into dollars again; how much will that be worth? Everybody who has a premonitory symptom of common sense knows that the lump of fused silver will—if coinable again into dollars—be worth just as much as the lump of fused gold. It is because the lump of fused gold is coinable again into dollars that it retains its value. It is because the lump of fused silver is not coinable again, under the present order, that it is not worth ten dollars.

What makes the difference? It is the fact of monetization for one of the metals, and demonetization for the other. Does anybody suppose that ten dollars of silver fused into a lump would not still be worth ten dollars if the lump were re-coinable? Does anybody suppose that ten gold dollars fused into a lump would still be worth ten dollars if the lump were not re-coinable? The fact of monetization not only confirms the value of one metal, but it insures the value of the other also—that is, it would insure it if monetization were not denied. Incidentally, this plain statement of the case utterly confutes the only seemingly valid argument, that is the two-bag argument, with which the goldites have been able to support their theory of “sound” money. Mr. Lepper’s assertion that monetization does not confer commercial value will have to rise through many circles in the spiral of intelligence before it reaches the plane of nonsense.

Further on in his paper, Mr. Lepper says: “The inevitable result of free coinage at a fixed ratio, is to expel the undervalued metal from circulation.” Who taught him that? Perhaps Gresham taught him. If so, he taught him what is not true. It is incredible that intelligent people should be humbugged with such a fallacious proposition as Gresham’s so-called “law.” Suppose that under free coinage, gold be undervalued, and suppose that, being so, it begins to vanish—where will it go to? To the Bank of England? If so, what will be the effect on the price of gold in the Bank of England? Will not the price begin to fall at that point at which the stream of gold pours out? And will it not continue to fall as long as the outflow goes on? What, on the other hand, will be the effect on the money market at that point from which the outflow is established? Will there not be produced a stringency behind the outflow, and will not all kinds of money begin to appreciate at that point from which the flow begins? And will not this stringency become greater and greater as long as the outflow continues? And will not the prices of all kinds of money, silver in particular, begin to rise until the outflow ceases? This is to say that the price of gold, like the price of anything else whatsoever, will fall wherever it accumulates, and the price of silver will rise in every place from which the gold is drained away, until a parity of values between the two money metals shall be inevitably established. This is the real law of two money metals circulating together; and Gresham’s so-called “law” is only the hocus-pocus and ghost of a law that is true to begin with, and is not true to end with.

I now come to the gist of Mr. Lepper’s article, and I invite particular attention to the heart and core of the matter as he presents it. He says (all the while declaring himself to be a bimetallist): “Let us assume that gold only has hitherto been used as money, that 25.8 grains thereof have been taken to be one dollar, and that it is now desired to supplement it with the use of silver.” I had not supposed that any person in the world could be under the influence of a delusion to the extent of propounding three such hypotheses as the foregoing. Mr. Lepper might with equally good reason, in discussing the constitution of nature, have said, “Let us assume that the world is a circular disk of tin,” or rather, “Let us assume that the world has always been regarded as a circular disk of tin. Let us assume that the world, being a circular disk of tin, weighs 3,820 lbs., and that it is now desired to improve its constitution by adding forty pounds to its weight and by converting it into a square block.” These propositions would be just as philosophical, just as useful in argument, and just as well warranted as those which he presents! His assumption is that gold only has been used as money. But it is not true that gold only has been used as money. It is not true that gold principally has been used as money. It is not true that gold has been as widely used as silver. It is not true that it is as universally used to-day as silver. It is not true that it was used at as early a day as was silver. It is not true that it has been used as a standard unit of money and account in the United States as long and as universally as silver has been used. It is therefore absurd to say, “Let us assume that gold only has been used as money.” It is preposterous to offer such a hypothesis. If we should grant the affirmative of such an assertion, we should rush into a region of falsehood and fanaticism identical in all particulars with that station which the goldites now occupy, and from which they send forth their clamor.

Mr. Lepper says further: “Let us assume that 25.8 grains hitherto have been taken to be one dollar.” But it is not true that 25.8 grains of gold have hitherto in our American system been taken to be one dollar. It is true that, according to our fundamental statute, and to all subsequent statutes down to the year 1873, 25.8 grains of gold were taken to be of the value of a dollar; but they were not a dollar. Our gold eagles were of the value of ten dollars; our half eagles were of the value of five dollars; our double eagles were of the value of twenty dollars; our quarter eagles were of the value of two and one-half dollars; our one-dollar gold piece, of 1849, was not one dollar, but was of the value of a dollar! The dollar was first, last, and all the time, defined to be a coin composed of 371 ¼ grains of pure silver. This is the very alphabet of the matter. I have myself set forth these facts so many times that I am ashamed to repeat them; for it implies that there are still people in the United States so lacking in intelligence and information as to require the reiteration of the bottom facts and principles in our American coinage system.

Twenty-five and eight-tenths grains of gold never did compose a dollar in the United States until after the year 1873. Why, therefore, should Mr. Lepper say, “Let us assume that 25.8 grains of gold have been taken to be one dollar”? Then he goes on to say, “Let us assume that it is desired to supplement it [that is the gold dollar] with silver.” Why should he speak of supplementing the use of gold with silver, any more than supplementing the use of silver with gold? There is not as good reason for the proposition to supplement gold with silver as there is to supplement silver with gold. Herein lies the trouble with those gentlemen who are trying to fix up a plan by which not to do it. They begin with a series of false hypotheses. They work along from these false assumptions until they reach some monstrous conclusion, and then show how sound the conclusion is because it is logical!

Genuine bimetallists do no such thing. They claim the coinage of gold and silver on terms of absolute equality. They do not propose to measure the silver by the gold, or the gold by the silver. They propose to have two standard units, and to use the one unit or the other unit at the option of the debtor. They do not propose that the creditor shall decide in which of these money metals a debt shall be paid or a contract made valid—simply for the reason that the two units co-exist, and every contract and engagement made among men is made in the face of this fact, and with the full knowledge of it, and with the understanding of what it implies. That understanding is that at the date of settlement, the debtor, and not the creditor, shall decide in which of the two standard metal-moneys he shall discharge his obligation. The option is his—exclusively his. The transaction is honorable, right, and just. Whoever challenges it is an abettor of the scheme for robbing the debtor by compelling him to transact his business, and in particular to pay his debts, according to a standard unit differing from the dollar of the law and the contract.

Of this outrageous fraud we will have no more. We spew it out of our mouths. We spit on the proposition, under whatever garb it comes, to compel the debtors of this nation to discharge their obligations in a dollar differing from the dollar of the law and the contract. We do not propose to “supplement” gold money with silver money—meaning the subordination of the silver to the gold. We do not propose to “supplement” silver money with gold money—meaning that the gold shall be absolute and the silver only token. There is no “supplement” about it. It is a simple proposition to have our money in two kinds, and not in one kind. It is like laying a foundation of stone and brick. The stone is not more dependent on the brick than the brick is dependent on the stone. They are both built into one abutment; they both contribute alike to its solidity and magnitude; they both enter into its composition and are part of its structure; and they both shall stay there, gentlemen of the gold craft, in spite of your efforts to take one constituent part of the abutment away!

I now come to the next essential division of Mr. Lepper’s article. I call particular attention to what he proposes. He says:

“In order to make my plan as clear as possible, I shall run the risk of seeming elementary by running through, step by step, a typical transaction under it: Let us fancy that the reader, bearing a nugget of gold in his left hand and another of silver in his right, and desiring to convert them into money, repairs to the Philadelphia mint. He applies there to the proper clerk, who, for simplicity’s sake, we will suppose performs all the operations. The clerk weighs and assays the two pieces of metal, and finds the gold one to contain 25,800 grains of standard gold, worth precisely $1,000, which are counted out in bills. A similar operation reveals that the lump of silver weighs 35,500 grains, but the clerk is observed to consult a table before saying: ‘The market equivalent of a gold dollar is to-day 710 grains; consequently your 35,500 grains are worth $50;’ and he then proceeds to count out the money in bills precisely like those given in payment for the gold. Upon examining these at his leisure, the reader discovers imprinted thereon a contract running as follows: ‘This note entitles the bearer on demand to [the denomination of the bill] dollars in gold or to the market equivalent thereof in silver.’”

This paragraph needs only to be critically examined in order to show forth the material of which it is builded. Mr. Lepper takes his two nuggets, the one of gold and the other of silver. He goes to the mint. The gold nugget weighs 25,800 grains; the silver nugget weighs 35,500 grains. Mr. Lepper adroitly slips in the clause that the gold nugget is “worth precisely a thousand dollars!” In what units is the gold nugget worth a thousand dollars? Why, in gold units. He says that the 35,500 grains of silver are found to be worth $50. In what units is that amount of silver worth $50? Why, in gold units! That is, beginning with the gold standard, and ignoring the silver standard, Mr. Lepper reaches bimetallism! That is good. He assumes, to begin with, the thing he is trying to prove! He assumes it in his major premise, implies it in his minor premise, and reaches it in his conclusion. I say that is very good. Twenty-five thousand eight hundred grains of gold are “worth precisely $1,000,” in gold dollars at the rate of 25.8 grains to the dollar. Well, I should say so. The same would be true of tin, of leather, or tree-molasses. Only assume that something is a standard, and then measure that something by itself and you will get there. Mr. Lepper gets there. Then again he assumes that the market equivalent of the gold dollar at the date referred to, is 710 grains of silver; therefore, 35,500 grains of silver are worth just $50 in gold. Forsooth, it requires a philosopher to tell us that; though a country schoolboy might make it out just as well. It is only a problem in the rule of three. We assume that silver is worth so much in gold; therefore, so much silver will be worth so much in gold! That is, gold is the standard; but we are a bimetallist, and we will write a paper on “Bimetallism Simplified” showing how we can create a mono-bimetallic standard. The “mono” is the essence of Mr. Lepper’s scheme; the bimetallic part of it is sophism and green cheese.

In his argument Mr. Lepper simply proposes to measure gold by itself; and to measure silver by gold! That is all there is in it. He seems not to know that anything measured by anything other than itself is not primary money, and cannot be. Gold, when coined and made legal tender, is primary money when measured by itself. Silver when coined and made a legal tender is also primary money when measured by itself. Anything coined and made a legal tender is primary money when measured by itself.

It is thus that Mr. Lepper creates a bimetallic system of money. He proposes to keep it up in the same manner. He simply assumes that gold is an unfluctuating, eternal standard, and that silver is a fluctuating, impossible standard. He agrees that silver may be used as money and even coined on a basis which assumes that it shall not be used as money and not be coined at all, except by the measure of gold! His factitious and absurd device is therefore not bimetallism, but monometallism on a basis of gold. He might substitute pewter for silver in his scheme, and it would be just as good; he might substitute putty or plaster of paris, and his plan would work as well.

Such a scheme is not bimetallism at all. It is monometallism pure and simple. I have, in a private way, pointed out the fact to Mr. Lepper that his plan is not what it pretends to be. I have tried to show him that what he proposes is simply a delusion of goldite hocus-pocus. As a matter of fact, The Arena has not the space to be devoted to the dissemination of such literature as Mr. Lepper’s article. I did not wish to subject the writer of “Bimetallism Simplified” to this castigation, but he would have it so. It is no doubt an entertaining business with Mr. Lepper to work his elaborate scheme for pretending to do a thing, and not doing it. Practically, I might urge upon his attention the fact that what he proposes will satisfy nobody; certainly it will not satisfy the McKinley administration. That administration does not propose to do anything. It proposes to stand still, in the midst of much bluster, hoping all the time that the gold standard will become more and more fixed on the American people, and that the “silver delusion” will subside.

Mr. Lepper will have his labor for his pains. His system will be laughed to scorn by all the goldites proper, and it is certainly rejected as spurious, impossible, and absurd by all genuine bimetallists. I wish to remark in this case, that the term “goldite” applied to the monometallist, is not a misnomer or an unwarranted epithet; for monometallists advocate the establishment of gold money only, as the primary money and money of ultimate redemption. On the other hand, the term “silverite” is a misnomer; if accepted, it misleads, for it implies that he who is characterized as a silverite is a believer in silver only as the primary money and money of ultimate redemption. There are no people of this class of whom we have heard.

Bimetallists believe in the use of both moneys freely and on terms of perfect equality; they will be satisfied with nothing less. They know that they are in the majority, and that they cannot be ultimately defrauded of their purpose. They intend to restore our coinage to what it was before the Act of 1873. By such restoration they propose to break the corner on gold and to reduce the exaggerated purchasing power of that metal to the normal standard. They intend that this reduction in the purchasing power of gold shall be answered—as they know it will be—with a corresponding rise in the prices of all the products of labor. They intend in this way to achieve prosperity; they intend to wrong no man—not even the bondholder; they intend that every man shall have his rights according to the law and the contract; they intend to break faith with none; they intend to march right on to the achievement of this result; in doing so, they intend to consult themselves. They know full well that the so-called “great commercial nations” will be glad enough to trade with us, and to take our money in both kinds too. If not, we hold the rod! If any nation under heaven proposes to discriminate against the United States of America because of our bimetallic standard of money, let that nation try it! We shall see who comes out best in that contest.

When the weak-kneed, the time-serving, and the cowardly shall be expelled from power; when American patriots are in the high places of authority; when the people’s voice shall be heard as the voice of many waters,—all men shall then be assured that the great republic is able to do its own business in its own way, asking favor of none, menacing none, and fearing none! When that good day comes with the end of the century, such literature as Mr. Lepper’s “Bimetallism Simplified,” read in the retrospect and in the light of a better verdict of the people, will seem to the thoughtful student of history to have been the product of some humorist, indulging a sarcastical disposition at the expense of the very theory which he sets forth in his article.