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 _melee_, 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
pharmacopoeia. 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 1/4 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.