When Germany, intoxicated by her victory over France, and in order to
further cripple a fallen foe from whom she had exacted $1,000,000,000 in
gold, demonetized silver, she inflicted on her people by the fall of
prices consequent on the increase in the value of money, more misery
than all her armies of horse and foot had been able to inflict on
France. France, on the contrary, notwithstanding this unprecedented war
tribute, by keeping a sufficient volume of money in circulation to
maintain, and even advance, her range of prices, emerged in a few years
from the consequences of the greatest disaster in her history, conscious
of a triumph more complete than Germany had achieved by all the military
splendor of the war. The ransom exacted of France was received back by
her almost as soon as paid, in exchange for the products of her
industry. It is not a sign of prosperity, Mr. President, when hundreds
of thousands of people, the best bone and sinew of a nation, are found
annually emigrating; and it is a coincidence which I merely mention, in
passing, that as soon as the effects of demonetization of silver had had
time to make themselves felt in Germany, a veritable hegira of its
people took place.
From 1873 to 1889, the emigration from Germany numbered 1,546,000
persons.
Students of social science everywhere recognize the statistics of
illegitimacy and of suicides as among the most powerful evidences of
monetary distress. By reference to those statistics we find that
notwithstanding the large emigration during that period the number of
illegitimate births in Germany increased from 161,294 in 1883 to 169,645
in 1888. The suicides in Prussia, Bavaria, Saxony, and Baden--the
leading states of the German Empire--increased from 179 for each million
of population in 1868 to 196 for each million of the population in 1876
and to 218 for each million of the population in 1882. In Prussia alone
the number of suicides in 1876 was 151 per million, while in 1882 it was
191 per million.
This is part of the price which the toiling masses of Germany are paying
for the gold standard experiment, which, without their consent their
imperial government foisted upon them.
Bismarck made the mistake that many able men in all countries of the
western world have made and continue to make, namely, that of
attributing the commanding position of Great Britain in the commercial
and industrial world to her adoption of the gold standard. Bismarck
mistook for cause and effect what was a mere coincidence, the result of
exceptional conditions, as did those of our legislators in 1873, who
happened to know anything whatever of the nature of the act demonetizing
silver. The belief of some of the most far-sighted statesmen of Great
Britain has been that she secured her position, not by reason of the
gold standard, but in spite of it.
In a speech delivered at Glasgow, in November, 1873, after the
alteration by Germany in her monetary standard, Mr. Disraeli said:
The monetary disturbance which has occurred, and is now to a
certain extent acting very injuriously upon trade, I attribute to
the great changes which the Governments of Europe are making in
reference to their standard of value. Our gold standard is not
the cause of our commercial prosperity, but the consequence of
that prosperity. It is quite evident that we must prepare
ourselves for great convulsions in the money market, not
occasioned by speculation or any of the old causes which have
been alleged, but by a new cause with which we are not
sufficiently acquainted.
And again in March, 1879, when the effects of the decreasing volume of
money were making themselves more and more felt, Mr. Disraeli, then Lord
Beaconsfield, said:
All this time the produce of the gold mines of Australia and
California has been regularly diminishing, and the consequence is
that, while these great alterations on the continent in favor of
a gold currency have been made, notwithstanding that increase of
population which alone requires a considerable increase of
currency to carry on its transactions, the amount of the currency
itself is yearly diminishing, until a state of affairs has been
brought about by gold production exactly the reverse of that
which it produced at first. Gold is every day appreciating in
value, and as it appreciates the lower become prices. It is not
impossible that, as affairs develop, the country may require that
some formal investigation should be made of the causes which are
affecting the value of the precious metals, and the effect which
the change in the value of the precious metals has upon the
industries of the country, and upon the continual fall of prices.
In reaching their conclusions, Bismarck and others ignored the
fundamental principle that a gold supply that might be sufficient for
one country with a gold standard, and might even result in a measure of
prosperity to that country, would be wholly insufficient if other
countries should adopt the same standard and should enter upon a keen
competition and rivalry for the acquisition of gold.
The adoption of that standard by Germany and France was therefore not
only destructive of their own prosperity, but was a stunning blow at the
prosperity of England and all other gold-using countries. In taking
England for his model, Bismarck had not the condition of the toiling
masses before his mind, but the glamour of prosperity which surrounded
the creditor-barons.
The unprejudiced observer can not fail to perceive that the $370,000,000
coined under the Limited Coinage Act of the United States of 1878,
supplementing the gold stock of the western world, postponed great
industrial and financial crises. But the elements of these crises are
gathering, and, unless relief be soon forthcoming, will burst upon the
world with crushing severity.