The Comstock Club

by C. C. Goodwin

In the meantime the honorary members had come in. As usual, the first theme was the condition of stocks. Miller believed that Silver Hill was the best buy on the lode, Corrigan had heard that day that a secret drift had been run west from the thirteen hundred level of the Con. Virginia; that up in the Andes ground an immense body of ore had been cut through, but that nothing would come of it until the Bonanza firm could gather in more of the stock. Carlin was disposed to believe that a development was about to be made in Chollar Potosi, because during the past month the superintendent had come up twice from Oakland, California, to look at the property. Strong was disposed to unload all the stocks that he had and invest in Belcher and Crown Point because the superintendent of both mines had that day assured him that they had no developments worth mentioning.

At length the conversation turned on silver. The Club had that day received a portion of their month's pay in silver, and some grumbled, thinking they should have received their full wages in gold. After a good deal had been said, the Professor, who had been quietly reading and had taken no part in the discussion, was asked for his opinion. He answered as follows:

"It is not right to pay laboring men in a depreciated currency; it is a still greater wrong that there is a discount on silver. It is the steadiest measure of values that mankind has ever found; it is the only metal that three-fifths of the human race can measure their daily transactions in; its full adoption by our Government, as a measure of values and basis of money, would mean prosperity; its rejection during the past five years and the denying to it its old sovereignty, have wrought incalculable loss.

"Here on the Comstock it sleeps in the same matrix with gold, the proportion in bullion being about forty-four per cent. gold to fifty-six per cent. silver. The Nation cannot make a better adjustment than to keep that proportion good in her securities. Five years ago silver commanded a premium over gold. Since then two dollars in gold to one in silver have been taken from the earth, but silver is at a discount, because through unwise if not dishonest legislation, its sovereignty as a measure of values, its recognition as money was taken away. The whole burden was put upon gold, and the result is that the purchasing power of gold has been enhanced, and silver is, or seems to be, at a discount. Those who have accomplished this wrong affect to scorn the proposition that legislation could restore to silver its old value, ignoring the fact that the present apparent depreciation is due entirely to unfriendly legislation, and conveniently forgetting that with silver, everything else is at a discount when measured by gold. That is, gold is inflated by the discriminations which have been made in its favor. The chief use of silver in the world is for a measure of values, as the chief use of wheat is for material out of which to make bread. Were men forbidden to make any more bread from wheaten flour and compelled to use corn meal as a substitute, would the present prices of wheat and corn remain respectively the same?

"Silver should be restored to its old full sovereignty, side by side with gold. Then, in this country, just as little of either metal as possible should be used in men's daily transactions. Handling gold and silver directly in trade is but continuing the barter of savage men, and is a relic of a dark age. Moreover, the loss by abrasion is very great. Both metals should be cast into ingots and their values stamped upon them. Then they should be stored in the Treasury and certificates representing their value should be issued as the money of the people. If this makes the Government a banker no matter, so long as it supplies to the people a money on which there can be no loss. The thought that this would drain our land of gold has not much force, because the trade balances are coming our way and will soon be very heavy; if the gold shall be taken away something will have to be returned in lieu of it, and after all the truth is that four-fifths of our people do not see a gold piece twice a year. Our internal commerce is very much greater than our foreign commerce, and to keep that moving without jar should be the first anxiety of American statesmen. For that purpose nothing could be better than the silver certificate.

"The Government has commenced to coin silver and has partially remonetized it. It is only partial because gold is still made the absolute measure of values and preference is reserved for it in ways which will keep silver depressed until there shall come a demand for it which cannot at once be met; then it will be discovered that it is still one of the precious metals and it will take its place in trade as it has its place here in the mines, side by side and the full brother of gold. Were the Government to-morrow to commence to absorb and hoard all the product of our mines and keep this up for a generation, issuing certificates on the same for the full value, at the end of about thirty years there would be on deposit as security for the paper afloat more than one thousand millions of dollars. This seems like a vast sum, but it would then amount to but ten dollars per capita for our people. You have each received two and a half times that amount to-day on account of your last month's wages, and the only serious inconvenience it has inflicted upon you is the discount which wicked legislation has given to silver.

"But long before one thousand millions in silver could be secured it would command a premium, because that would mean one-fourth of all the silver in circulation, and this old world cannot spare to one Nation that amount and still keep her commerce running and the arts supplied."

"But, Professor," said Alex, "why hoard the metals? Why may not money be represented by paper backed by the Nation's faith? Why pile up the metals in the Government vaults when the printing press can supply as good money as the people want?"

"That," replied the Professor, "is an argument for times of peace and prosperity only. The failure of one crop would so lessen the faith of the people that a serious discount would fall upon the money that was only backed by faith. And suppose Europe were to combine to fight the United States, then what would the loss be to the people? We can only estimate the amount by thinking what the United States currency was worth in 1864.

"Such a combination is not at all impossible. There is a vast country to the south of us, the trade of which should be ours, and with the Governments of which we have notified Europe there must be no interference from beyond the Atlantic. There are channels for ships to be hewed through the Spanish American Isthmus, and their control is to become a question.