When the Ratio Becomes Settled. 19

the smaller silver coins be found then to differ very much from the ratio, they should be recoined, so as to be made of nearly full intrinsic value.

Prior to 1873 (under "free coinage") for each 500 ounces of pure silver the mint delivered 646 silver dollars, less a charge of cent on each piece..$3.23 and for copper alloy about....

I. II

$4.34, or

about two thirds of 1 per cent. The coinage of much larger pieces would cost the mint a much smaller fraction of 1 per

cent.

That the question of joint-metallism is an intricate one is no reason why it should not be studied, and discussed in the newspapers. That the ratio can only be approximately exact might be urged with equal force against navigation and other sciences.

Until the general public, by special study, is better able to understand questions regarding the basis of currency, it may be injurious to have bimetallism

made a party issue. The debate on bimetallism is becoming so envenomed that, like the slavery question, it may make dangerous sectional trouble. Many at the East think the West is dishonest on this subject. Many at the West think the East is dishonest on this subject.

The duty of patriotism is to try to find a just and honest way to permanently settle a question which cannot be finally settled by narrow and fluctuating majorities nor by vetoes.

It will go far to promote clear thinking regarding this question if it is generally understood

First, that money is a certain potentiality or stored-up and readily-available energy representing the cost of the production of the precious metals.

Secondly, that the real function of the mint regarding the precious metals is to stamp pieces of metal so as to indicate the weight of the gold or silver they contain.

Thirdly, that Government paper money should be only certificates of the deposit of such pieces of metal.

Injurious Results.

21

Fourthly, that for centuries the metallic money of the world has been in total value about half gold and half silver, a legal ratio having commonly existed between the precious metals, being for a long period 15 to 1 or 16 to 1, the legal sanction of the ratio being powerful enough to overcome slight differences in the relative costs of producing the two metals or their market values.

Fifthly, that silver, having now become generally demonetized, and its chief use in Europe and in the United States being thus abolished, and its market value diminished below the reduction in value caused by the lessening of the cost of production, certain results have necessarily followed, very injurious to our country and to the world, among these results being a general decline in values and an insufficient metallic basis of currency, making manufacture and trade1 both uncertain and dangerous.

The question before us is how to remonetize silver.

First-Shall the United States alone 1 And agriculture.

attempt to fix and maintain a permanent ratio under present conditions of a demonetized silver market? This is impossible.

Second Shall we wait until other

nations can be induced to join in fixing a ratio? This is dangerous and unnecessary, and the ratio, if so fixed, would soon have to be changed.

Third-Shall the United States decide to use gold and silver together at ratios always based on their relative market values? This is safe and honest, and it can be accomplished by the plan I have called joint-metallism.

Instead of waiting to make a law or a treaty every time a change in ratio is required to conform approximately to the market values, my contention is that we ought to establish a law now and a treaty, if possible, later, that will provide for necessary changes in ratio, although it is probable that after both metals shall have had about equal access to the mint, even in our country alone, for a period of a year or more, on the joint basis I have proposed, changes in ratio will thereafter

become very infrequent, and perhaps many years may pass without such a change.

A few years ago it became evident to some students of economics and to the Government of Germany that the falling off in gold production and the cheapening of silver production by improved metallurgy, etc., and the increase of the world's business and credits, would make inevitable a change in the ratio, which from the beginning of the century had varied but very little.1 Germany2 took advantage of her knowledge, her financial position, and her governmental methods, which enabled her to act promptly, and sold her silver for gold, and in 1871 and 1873 demonetized silver, and other nations followed her lead. Now that the market value of silver has fallen far below the cost of its production in quantities sufficient for its general use as a money metal, Germany may probably be glad to follow us in joint-metallism on the plan I have proposed, and to congratulate herself on her astute operations in silver.

1 See page 132.

2M. Rochussen opposes this view.