The motive for the demonetization of silver was precisely the same that
had previously inspired the demonetization of gold. The object was to
demonetize one of the metals--that metal which promised the greatest
abundance, and which would contribute most largely to maintaining at an
equitable level the general range of prices. The motive in both cases
was to aggrandize the privileged classes--the income and the creditor
classes of the world--and by means of a subtle and sinister manipulation
of the money volume, whose effects it is not always easy to trace to
their true cause, to practically confiscate the reward of the hard toil
of the masses. To all intent and purpose the design was to establish a
new system of slavery for the western world, of which the debtor
classes among the white races should be the victims.
When demonetization was determined on there was no pretense that there
was any difficulty in maintaining a parity between the two metals at the
established ratio.
In the official resume of the doings of the French monetary commission
of 1869 the arguments upon both sides were summed up.
In behalf of the gold standard it was said:
The rise in price which has taken place within twenty years in a
great number of articles of merchandise is evidently due to many
causes, such as war, bad harvests, and increase in consumption;
but it is very probable that the depreciation of the precious
metals has contributed to it, since there has been a striking
coincidence between the rise of prices and the production of the
new mines of gold and silver. The annual production of the two
metals, which was only $80,000,000 in 1847, exceeds now
$200,000,000. It has nearly tripled, and it is easy to see that
the real value of the metals has diminished. It is difficult to
estimate exactly what the diminution is, but whatever it may be
it demands the attention of governments, because it affects
unfavorably all that portion of the population whose income,
remaining nominally the same, undergoes a yearly diminution of
purchasing power. As governments control the weight and standard
of money, they ought so far as possible to assure its value. And
as it is admitted that the tendency of the metals is to
depreciate, this tendency should be arrested by demonetizing one
of them.
In behalf of the double standard it was replied as follows:
Many economists argue that the precious metals, having become
very abundant, have lost 10 or 15 per cent. of their value, and
that the situation must be redressed by making money scarcer by
demonetizing silver. To this it may be answered that the great
discoveries of gold of the last twenty years have injured nobody.
The new mass of gold, spreading over the whole world, has found
employment in stimulating all forms of business, and, as a
consequence, the value of gold has fallen very little. According
to Mr. Newmarch, the mass of gold and silver has augmented 3 per
cent. per annum, while the mass of exchanges has augmented more
than 3 per cent. per annum, so that the equilibrium has been
maintained. And the present is an especially inopportune time to
demonetize silver, because the annual production of gold has been
falling off for several years. It was $200,000,000 in 1853, and
it is now not more than $140,000,000. What will happen to the
civilized world if silver is demonetized and if gold shall then
fail?