During the debate on the limited coinage bill, not content with abuse of
the advocates of the measure; with flimsy criticism of it and specious
arguments against it, its opponents in and out of Congress indulged in
diverse prophecies and predictions. They pictured forth the lamentable
results that would follow its passage, and the direful consequences that
would ensue from an increase of the circulating medium of the country.
Among the results confidently predicted were the following: that the
silver would not circulate at all, and again that it would circulate to
the exclusion of gold, which metal, we were informed, would flow out of
this country with a velocity and in a volume theretofore unknown; that
we should be unable to redeem our paper money in gold; that we should be
precipitated into a silver vortex; that an inflation of the currency
would follow, which would ruinously raise prices of all commodities and
that this inflation would result in an unprecedented contraction. We
were charged with forcing upon the public creditors a dollar worth only
ninety cents. We were warned that the passage of the bill would
indefinitely postpone the refunding of the public debt, and would lower
the price and impair the value of our national securities. It was
charged that we were setting on foot a new and irrepressible conflict
between two great sections of the country--the East and the West. We
were charged with uttering a debased coin; with lowering the standard
of American credit; with tarnishing the integrity and honor of our
country before foreign nations, and with unprecedented moral turpitude
in setting an example of flagrant and shameless national dishonesty.
The men of the far West, and of the Pacific slope especially, were the
particular targets of this abuse. They were denounced by some as
"lunatics," by others as dangerous and unworthy demagogues, because, as
was charged, their constituents, if not themselves, were directly
interested in the restoration of the ancient right of silver to full
recognition as one of the money metals. For their benefit resort was had
to every epithet which the English language afforded. In holding them up
to public scorn the rich and varied vocabulary of odium and opprobrium
was exhausted.
These prophecies of disaster were united in by the professors of
political economy in all the Eastern colleges, by the President of the
United States, by the Secretary of the Treasury, by the leading American
newspapers, by the principal public men and journals of Great Britain,
if not of all Europe; and, of course, by all bankers, money-lenders, and
professional financiers the world over.
And now, Mr. President, how many of all those alarming prognostications
by all these distinguished prophets have been fulfilled? Not one! On the
contrary, it is not too much to say that the public credit of the United
States is to-day the highest in the world. It does not stand merely in
line with that of other first-rate powers; it stands at the head. Our
gold, silver, and paper money stand at a parity with each other. If a
full measure of relief was not realized by the passage of that bill it
is because the coinage of $4,000,000 a month was left optional with the
Secretary of the Treasury, instead of being made mandatory on him.
But it is hardly necessary to assert that the predicted inflation of
prices has not been observed as a consequence of the coinage of
$2,000,000 a month. While the issuance of that amount has not, with our
rapidly increasing population and wealth, been sufficient to arrest the
downward tendency of prices, it has undoubtedly prevented them from
falling much lower. Without that coinage, we should have had industrial
depression, chronic and somber, with consequences of untold disaster.
But the result which gave most apprehension to those who advocated the
gold standard, the evil which they regarded as on the whole the most
threatening and direful of all the evils that were to result from even
so small an increase in the money volume as that bill provided for, was
the outflow of gold. They ridiculously under-estimated the tremendous
money-absorbing power of this great country. And as if to emphasize to
all the world the complete absurdity of their alleged fears--this
apprehension has been conspicuously and notoriously set at naught by the
constant inflow of gold. On the 30th of June, 1878, the amount of gold
coin and bullion in the Treasury and in monetary circulation in this
country is officially reported to have been $213,199,977, and this
amount is probably much over-estimated. On November 1, 1889, we had more
than three times as much--the amount of gold in circulation and in the
Treasury being reported as $689,000,000.
"Experience," says Dr. Johnson, "is the great test of truth, and is
perpetually contradicting the theories of men," and the last experience,
Mr. President, is the best.
If the professors of political economy, the Eastern newspaper editors,
and the professional financiers were then so seriously mistaken ought
they not to be a little modest now in making predictions, especially in
renewing predictions that have been already discredited? They can not
point to a single instance in which their prophesy has not been
falsified by the event. So humiliating a failure on the part of the
professors, in a realm of which they boastfully claimed to be masters,
so complete an overthrow of these "experts" by men who were ridiculed
and derided as rural financiers and crazy theorists, ought to put the
advocates of the gold standard on their guard against a like defeat on
this occasion. They are pressed for reasons to account for the utter
miscarriage of their prophecies. They are left without a shadow of
consolation except that the coinage of $2,000,000 worth of silver
bullion each month has not succeeded in placing silver at a par with
gold. They affect to believe that the advocates of silver in 1878
expected that that metal, under the very limited demand of $2,000,000 a
month, would be brought to a level with gold, which, owing to the
demonetization of silver, had risen abnormally and ruinously in value.
No such belief was ever entertained or expressed. On the contrary it was
repeatedly asserted by the advocates of silver that so long as the
entire yield of gold from all the mines of the world (in 1878,
$119,000,000) was invested with the full money function and had free
access to all mints to be transmuted into coin, it could not be expected
that the conferring of the legal-tender function upon a sum so
comparatively trifling as one-fourth the yield of silver (the yield in
1878 being $99,000,000) would have the effect of placing it on a level
with gold.
It is, however, a significant fact that every silver dollar that has
been coined under that act is at a parity with gold, and will to-day buy
as much of all the objects of human desire as will the gold dollar. Nay,
more, silver bullion--disparaged and discredited as it is by being shorn
of the money function, and denied access to the mints, instead of
decreasing in purchasing power, has maintained so steady a relation to
commodities that 412-1/2 grains of uncoined silver will exchange for as
much to-day as would the coined dollar, whether of silver or gold, in
1873, when the full money function attached equally to both metals. If
this be true--and I shall presently demonstrate it beyond
refutation--what an utter perversion of terms it is to say that silver
has fallen in value!