OF VERMONT. (BORN 1810.)
ON THE REMONETIZATION OF SILVER —UNITED STATES SENATE, JANUARY 28, 1878.
MR. PRESIDENT, the bill now before the Senate provides for the resuscitation of the obsolete dollar of 412 and 1/2 grains of silver, which Congress entombed in 1834 by an Act which diminished the weight of gold coins to the extent of 6.6 per cent., and thus bade a long farewell to silver. It is to be a dollar made of metal worth now fifty-three and five-eighths pence per ounce, or ten cents less in value than a gold dollar, and on January 23d, awkwardly enough, worth eight and three-fourths cents less than a dollar in greenbacks, gold being only If per cent. premium, but, nevertheless, to be a legal tender for all debts, public and private, except where otherwise provided by contract. The words seem to be aptly chosen to override and annul whatever now may be otherwise provided by law. Beyond this, as the bill came from the House, the holders of silver bullion—not the Government or the whole people—were to have all the profits of coinage and the Government all of the expense. This, but for the amendment proposed by the Committee on Finance, would have furnished the power to the enterprising operators in silver, either at home or abroad, to inflate the currency without limit; and, even as amended, inflation will be secured to the full extent of all the silver which may be issued, for there is no provision for redeeming or retiring a single dollar of paper currency. Labor is threatened with a continuation of the unequal struggle against a depreciated and fluctuating standard of money.
The bill, if it becomes a law, must at the very threshold arrest the resumption of specie payments, for, were the holders of United States notes suddenly willing to exchange them for much less than their present value, payment even in silver is to be postponed indefinitely. For years United States notes have been slowly climbing upward, but now they are to have a sudden plunge downward, and in every incompleted contract, great and small, the robbery of Peter to pay Paul is to be fore-ordained. The whole measure looks to me like a fearful assault upon the public credit. The losses it will inflict upon the holders of paper money and many others will be large, and if the bill, without further radical amendments, obtains the approval of the Senate, it will give the death-blow to the cardinal policy of the country, which now seeks a large reduction of the rate of interest upon our national debt. Even that portion now held abroad will come back in a stampede to be exchanged for gold at any sacrifice. The ultimate result would be, when the supply for customs shall have been coined and the first effervescence has passed away, the emission of silver far below the standard of gold; and when the people become tired of it, disgusted or ruined by its instability, as they soon would be, a fresh clamor may be expected for the remonetization of gold, and another clipping or debasing of gold coins may follow to bring them again into circulation on the basis of silver equivalency. In this slippery descent there can be no stopping place. The consoling philosophy of the silver commission may then be repealed, that a fall in the value of either or both of the metals is a "benefaction to mankind." If that were true, then copper, being more abundant and of lower value, should be used in preference to either gold or silver. The gravity of these questions will not be disputed.
The silver question in its various aspects, as involved in the bill before us, is one of admitted importance, possibly of difficult solution; and it is further embarrassed by not only the conflicting views of those entitled to some respect, but by the multifarious prescriptions intruded by a host of self-constituted experts and by all of the quack financiers of the land. Every crocheteer and pamphleteer, cocksure "there's no two ways about it," generously contributes his advice free of charge; but sound, trust-worthy advice does not roam like tramps and seldom comes uninvited. Many of the facts which surround the subject are perhaps of too recent occurrence to justify hasty and irrevocable conclusions. The service of our own people, however, must be our paramount concern. Their intercourse with themselves and with the world should be placed upon the most solid foundation. If any have silver to sell it is comparatively a small matter, and yet we earnestly desire that they may obtain for it the highest as well as the most stable price; but not at the expense of corn, cotton, and wheat; and it is to be hoped, if any have debts to meet now or hereafter, that they may meet them with the least inconvenience consistent with plain, downright, integrity; but, from being led astray by the loud declamations of those who earn nothing themselves and know no trade but spoliation of the earnings of others, let them heartily say, "Good Lord, deliver us."
A stupid charge, heretofore, in the front of debate, has been made, and wickedly repeated in many places, that the Coinage Act of 1873 was secretly and clandestinely engineered through Congress without proper consideration or knowledge of its contents; but it is to be noted that this charge had its birth and growth years after the passage of the Act, and not until after the fall of silver. Long ago it was declared by one of the old Greek dramatists that, "No lie ever grows old." This one is as fresh and boneless now as at its birth, and is therefore swallowed with avidity by those to whom such food is nutritious or by those who have no appetite for searching the documents and records for facts. Whether the Act itself was right or wrong does not depend upon the degradation of Congress implied in the original charge. Interested outsiders may glory in libelling Congress, but why should its own members? The Act may be good and Congress bad, and yet it is to be hoped that the latter has not fallen to the level of its traducers. But there has been no fall of Congress; only a fall of silver. To present the abundant evidence showing that few laws were ever more openly proposed, year after year, and squarely understood than the Coinage Act of 1873, will require but a moment. It had been for years elaborately considered and reported upon by the Deputy Comptroller of the Currency. The special attention of Congress was called to the bill and the report by the Secretary of the Treasury in his annual re-ports for 1870, 1871, and 1872, where the "new features" of the bill, "discontinuing the coinage of the silver dollar," were fully set forth. The extensive correspondence of the Department had been printed in relation to the proposed bill, and widely circulated. The bill was separately printed eleven times, and twice in reports of the Deputy Comptroller of the Currency,—thirteen times in all,—and so printed by order of Congress. A copy of the printed bill was many times on the table of every Senator, and I now have all of them here before me in large type. It was considered at much length by the appropriate committees of both Houses of Congress; and the debates at different times upon the bill in the Senate filled sixty-six columns of the Globe, and in the House seventy-eight columns of the Globe. No argus-eyed debater objected by any amendment to the discontinuance of the silver dollar. In substance the bill twice passed each House, and was finally agreed upon and reported by a very able and trustworthy committee of conference, where Mr. Sherman, Mr. Scott, and Mr. Bayard appeared on the part of the Senate. No one who knows anything of those eminent Senators will charge them with doing anything secretly or clandestinely. And yet more capital has been made by the silver propagandists out of this groundless charge than by all of their legitimate arguments.'
The gold standard, it may confidently be asserted, is practically far cheaper than that of silver. I do not insist upon having the gold standard, but if we are to have but one, I think that the best. The expense of maintaining a metallic currency is of course greater than that of paper; but it must be borne in mind that a paper currency is only tolerable when convertible at the will of the holder into coin—and no one asks for more than that. A metallic currency is also subject to considerable loss by abrasion or the annual wear; and it is quite important to know which metal—gold or silver—can be most cheaply supported. A careful examination of the subject conclusively shows that the loss is nearly in proportion to the length of time coins have been in circulation, and to the amount of surface exposed, although small coins, being handled with less care, suffer most. The well-ascertained result is that it costs from fifteen to twenty-five times more to keep silver afloat than it does to maintain the same amount in gold. To sustain the silver standard would annually cost about one per cent. for abrasion; but that of gold would not exceed one-twentieth of one per cent. This is a trouble-some charge, forever to bristle up in the path-way of a silver standard. It must also be borne in mind that the mint cost of coining silver is many times greater than that of the same amount in gold. More than sixteen tons of silver are required as the equivalent of one ton of gold. As a cold matter of fact, silver is neither the best nor the cheapest standard. It is far dearer to plant and forever dearer to maintain.
A double standard put forth by us on the terms now proposed by the commission or by the House bill would be so only in name. The perfect dual ideal of theorists, based upon an exact equilibrium of values, cannot be realized while the intrinsic value of either of the component parts is overrated or remains a debatable question and everywhere more or less open to suspicion. A standard of value linked to the changing fortunes of two metals instead of one, when combined with an existing disjointed and all-pervading confusion in the ratio of value, must necessarily be linked to the hazard of double perturbations and become an alternating standard in perpetual motion.
The bimetallic scheme, with silver predominant—largely everywhere else suspended, if not repudiated—is pressed upon us now with a ratio that will leave nothing in circulation but silver, as a profitable mode of providing a new and cheaper way of pinching and paying the national debt; but a mode which would leave even a possible cloud upon our national credit should find neither favor nor tolerance among a proud and independent people.
The proposition is openly and squarely made to pay the public debt at our option in whichever metal, gold or silver, happens to be cheapest, and chiefly for the reason that silver already happens to be at 10 per cent. the cheapest. In 1873, to have paid the debt in silver would have cost 3 per cent. more than to have paid it in gold, and then there was no unwillingness on the part of the present non-contents to pay in gold. Silver was worth more then to sell than to pay on debts. No one then pulled out the hair of his head to cure grief for the disappearance of the nominal silver option. Since that time it has been and would be now cheaper nominally to pay in silver if we had it; and therefore we are urged to repudiate our former action and to claim the power to resume an option already once supposed to have been profitably exercised, of which the world was called upon to take notice, and to pay in silver to-day or to let it alone to-morrow. I know that the detestable doctrine of Machiavelli was that "a prudent prince ought not to keep his word except when he can do it without injury to himself;" but the Bible teaches a different doctrine, and honoreth him "who sweareth to his own hurt and changeth not." If we would not multiply examples of individual financial turpitude, already painfully numerous, we must not trample out conscience and sound morality from the monetary affairs of the nation. The "option" about which we should be most solicitous was definitely expressed by Washington when he said: "There is an option left to the United States whether they will be respectable and prosperous or contemptible and miserable as a nation." Our national self-respect would not be increased when Turkey, as a debt-paying nation, shall be held as our equal and Mexico as our superior. The credit of a great nation cannot even be discussed without some loss; it cannot even be tempted by the devious advantages of legal technicalities without bringing some sense of shame; but to live, it must go, like chastity, unchallenged and unsuspected. It cannot take refuge behind the fig-leaves of the law, and especially not behind a law yet to be made to meet the case.
The argument relied upon in favor of a bimetallic standard as against a monometallic seems to be that a single-metal standard leaves out one-half of the world's resources; but the same thing must occur with a bimetallic standard unless the metals can be placed and kept in a state of exact equilibrium, or so that nothing can be gained by the exchange of one for the other. Hitherto this has been an unattainable perfection. A law fixing the ratio of 16 of silver to 1 of gold, as proposed by different members of the Commission, would now be a gross over-valuation of silver and wholly exclude gold from circulation. It will hardly be disputed that the two metals cannot circulate together unless they are mutually convertible without profit or loss at the ratio fixed at the mint. But it is here proposed to start silver with a large legal-tender advantage above its market value, and with the probability, through further depreciation, of increasing that advantage by which the monometallic standard of silver will be ordained and confirmed. The argument in behalf of a double standard is double-tongued, when in fact nothing is intended, or can be the outcome, but a single silver standard. The argument would wed silver and gold, but the conditions which follow amount to a decree of perpetual divorcement. Enforce the measure by legislation, and gold would at once flee out of the country. Like liberty, gold never stays where it is undervalued.
No approach to a bimetallic currency of uniform and fixed value can be possible, as it appears to me, without the co-operation of the leading commercial nations. Even with that co-operation its accomplishment and permanence may not be absolutely certain, unless the late transcendent fickleness of the supply and demand subsides, or unless the ratio of value can be adjusted with more consummate accuracy than has hitherto been found by any single nation to be practicable. One-tenth of one per cent. difference will always exclude from use one or the other metal; but here a difference nearly one hundred times greater has been proposed. The double-standard nations and the differing single gold- or silver-standard nations doubtless contributed something to the relative equalization of values so long as they furnished an available market for any surplus of either metal, but this they are doing no longer. Silver, though not yet universally demonetized, is thrown upon the market in such masses and from so many prolific sources as to be governed by the inexorable laws of demand and supply. Its magic as coin, if it has not hopelessly departed, has been, like the retreating soldier, fearfully "demoralized," and is passing to the rear.
It cannot be for the interest or the honor of the United States, while possessed of any healthy national pride, to resort to any expedient of bankrupt governments to lower the money standard of the country. That standard should keep us "four square" to the world and give us equal rank in the advanced civilization and industrial enterprise of all the great commercial nations.
I have failed of my purpose if I have not shown that there has been so large an increase of the stock of silver as of itself to effect a positive reduction of its value; and that this result has been confirmed and made irreversible by the new and extensive European disuse of silver coinage. I have indicated the advisability of obtaining the co-operation of other leading nations, in fixing upon a common ratio of value between gold and silver, before embarking upon a course of independent action from which there could be no retreat. I have also attempted to show that, even in the lowest pecuniary sense of profit, the Government of the United States could not be the gainer by proposing to pay either the public debt or the United States notes in silver; that such a payment would violate public pledges as to the whole, and violates existing statutes as to all that part of the debt contracted since 1870, and for which gold has been received; that the remonetization of silver means the banishment of gold and our degradation among nations to the second or third rank; that it would be a sweeping 10 per cent. reduction of all duties upon imports, requiring the imposition of new taxes to that extent; that it would prevent the further funding of the public debt at a lower rate of interest and give to the present holders of our 6 per cent. bonds a great advantage; that, instead of aiding resumption, it would only inflate a currency already too long depreciated, and consign it to a still lower deep; that, instead of being a tonic to spur idle capital once more into activity, it would be its bane, destructive of all vitality; and that as a permanent silver standard it would not only be void of all stability, and the dearest and clumsiest in its introduction and maintenance, but that it would reduce the wages of labor to the full extent of the difference there might be between its purchasing power and that of gold.
