If that could be done by a nation with a population of 25,000,000 to
35,000,000, what difficulty could be experienced by a nation of
65,000,000 in accomplishing the same result? Yet we are told that
international agreement is necessary to restore silver to its ancient
right as a full-money metal. Those who suggest such an agreement forget
that while this nation is a borrower of money, the first and principal
nation to demonetize silver is the greatest money lender known to
history. Is it for a moment to be supposed that the shrewd English
creditor classes will enter into any agreement which will deprive them
of the spoils of so delicate and ingenious a system of usury; a system
not only not banned by law, but, on the contrary, having the special
approval and protection of statutes, and the active support and approval
of all the complaisant moralists, philosophers, and financiers of the
age?
While they are dilligently gathering in the proceeds of this operation a
diversion is kept up for the occupation and amusement of dilettant
financiers and economists, by invoking a discussion of the ratio that
should be maintained between the metals. The ratio is the pretext on
which conference after conference has been called.
The advocates of the single gold standard contend that hostile
legislation had no influence in effecting the separation of the metals,
and that the reversal of that legislation can not and will not restore
them to a parity unless the principal commercial nations of the western
world join in the work of rehabilitation. As illustrating the force of
law on the relation of the metals I will read a suggestive paragraph
from the report of the Royal Commission of England (1886), Part I,
section 192:
Now, undoubtedly, the date which forms the dividing line between
an epoch of approximate fixity in the relative value of gold and
silver, and one of marked instability, is the year when the
bimetallic system which had previously been in force in the Latin
Union ceased to be in full operation, and we are irresistibly led
to the conclusion that the operation of that system, established
as it was in countries the population and commerce of which were
considerable, exerted a material influence upon the relative value
of the two metals.
So long as that system was in force we think that, notwithstanding
the changes in the production and use of the precious metals, it
kept the market price of silver approximately steady at the ratio
fixed by law between them, namely, 15-1/2 to 1. Nor does it appear
to us _a priori_ unreasonable to suppose that the existence in the
Latin Union of a bimetallic system with a ratio of 15-1/2 to 1
fixed between the two metals should have been capable of keeping
the market price of silver steady at approximately that ratio.
The paragraph quoted ascribes the effect thus produced to the bimetallic
treaty of the Latin Union, a combination of Italy, Belgium, Switzerland,
and France, entered into in 1865 for the purpose of maintaining similar
conditions of coinage. But it will be observed that, so far as the ratio
was concerned, precisely the same effect had been produced by France
alone during the sixty-two years from the passage of its law of 1803 to
1865.
Not only did the French law keep the metals together at a time when the
larger annual yield was of silver, but it kept them together when the
larger annual yield was of gold. Had not that law been in operation
during the '50's, when a flood of gold poured from the mines of
California and Australia, gold would have fallen, as in early times it
more than once fell, to the ratio of 1 to 10, at which but 10 ounces of
silver (instead of 15-1/2) would buy an ounce of gold. Thus the law of
one country alone, a country then of not one-half the present population
of the United States, held the metals together, so that to whatever
extent gold fell in relation to commodities from 1848 to 1865, by reason
of the large output of the mines, silver fell to the same extent,
notwithstanding the enormous decrease in its production relatively to
gold during that period.
What is claimed for law in this connection is not that it directly
controls the relative values of gold and silver any more than of
anything else, but that on the slightest separation of the metals there
instantly arises, under the law of the double standard, a demand for the
cheaper metal, while the demand for the dearer one is suspended. In this
way the double standard accommodates itself to the law of supply and
demand, which is admitted to be the governing factor in the
determination of value. It is not contended that a small or
insignificant country could keep the metals together, but all experience
goes to show that a great nation like the United States would have no
difficulty whatever in doing so.
So thoroughly are the advantages of the gold standard to the creditor
classes recognized in England that the English Commissioners, who, for
form's sake, have been sent to the several monetary conferences held on
the continent, have never been invested by their Government with any
power whatever. And it is but a few weeks since the House of Commons
overwhelmingly voted down a proposition made in good faith by Mr. Samuel
Smith, looking to the calling of a new conference, which was supported
by petitions to Parliament signed by 60,000 persons not merely as
individuals, but as representing large organizations of the toilers of
England.
The ratio is not the difficulty. Those who wanted silver demonetized do
not want it added to the money volume of the world at any ratio. Why
then shall we wait? Macauley, commenting on the impregnability of
intrenched prerogative, observed that if the announcement of the
discovery of the law of gravitation had militated against the personal
interests of any vested or privileged class, its general acceptance
might have been long postponed. Shall we, then, postpone relief to the
suffering industries of this country till we can secure from the
privileged classes, from the money-lenders of the world, an agreement to
cease their exactions?
No, Mr. President, we need not wait, and we _will_ not wait. All that is
necessary is to _act_, and so far as the rules of order and of
parliamentary procedure will permit, we propose to act, promptly and
decisively. The world can not expect the initiatory movement for any
change to be taken by those whose interests are served by the
continuance of present conditions. Such conditions being consistent with
their own welfare, they find no difficulty in arriving at the conclusion
that they are for the welfare of society at large.
The dogma that cupidity is a synonym for virtue will never fail to find
ready converts among the beneficiaries.
* * * Plate sin with gold.
And the strong lance of Justice hurtless breaks.