Autobiography of Seventy Years, Vol. 1-2

by George Frisbie Hoar

There were two theories among the persons who desired to maintain the gold standard. One was entertained by the persons known as Gold Monometallists. They insisted that no value could be given to any commodity by legislation. They said that nothing could restore silver to its old value as compared with gold; that its fall was owing to natural causes, chiefly to the increased production. They insisted that every attempt to restore silver to its old place would be futile, and that the promise to make the attempt, under any circumstances, was juggling with the people, from which nothing but disaster and shame would follow. They justly maintained that, if we undertook the unlimited coinage of silver, and to make it legal tender, under the inevitable law long ago announced by Gresham, the cheaper metal, silver, would flow into the country where it would have a larger value for the purpose of paying debts, and that gold, the more precious metal, would desert the country where there would be no use found for it as long as the cheaper metal would perform its function according to law. From this, it was claimed, would follow the making of silver the exclusive basis of all commercial transactions; the disturbance of our commercial relations with other countries, and the establishment of a standard of value which would fluctuate and shrink as the value of silver fluctuated and shrunk. So that no man who contracted a debt on time could tell what would be the value of the coin he would be compelled to pay when his debt became due, and all business on earth would become gambling. They, therefore, demanded that the Republican Party should plant itself squarely on the gold standard; should announce its purpose to make gold the exclusive legal tender for the country, and appeal to the people for support in the Presidential election, standing on that ground.

To them their antagonists answered, that the true law was stated by Alexander Hamilton in his famous Report, accepted by all his contemporaries, and by all our statesmen of all parties down to 1873 or thereabouts, and recognised in the Constitution of the United States. That doctrine was, that the standard of value must necessarily be fixed by the agreement of all commercial nations. No nation could, without infinite suffering and mischief, undertake to set itself against the rule adopted by the rest of mankind. It was best, if the nations would consent to it, to have two metals instead of one made legal tender, at a ratio to be agreed upon by all mankind, establishing what was called Bimetallism. If this were done, the Gresham law could not operate, because there would be no occasion for the cheaper metal to flow into any one country by reason of its having a preference there in the payment of debts; and nothing which would cause the more precious metal to depart from any country by reason of its being at a disadvantage. If such a rule were adopted, and a proper ratio once established, it would be pretty likely to continue, unless there were a very large increase in the production of one metal or the other. If the supply of gold in proportion to silver were diminished a little, the corresponding demand for silver by all mankind would bring up its price and cure the inequality. So, if the supply of gold were to increase in proportion to silver, a like effect would take place.

If, however, the nations of the world were to agree on one metal alone, it was best that the most precious metal should be taken for that purpose.

The above, in substance, was the doctrine of Alexander Hamilton, the ablest practical financier and economist that ever lived, certainly without a rival in this country.

The duties specially assigned to me in the Senate and in the House related to other matters. But I made as thorough and faithful a study as I could of this great question, and accepted Hamilton's conclusions. I believed they were right in themselves, and thought the reasons by which they were supported, although the subject is complex and difficult, likely to find favor with the American people. Silver has always been a favorite metal with mankind from the beginning. While gold may be the standard of value, it is too precious to be a convenient medium of payment for small sums, such as enter into the daily transactions of ordinary life. It is said that you can no more have a double standard, or two measures of value, than you can have a double standard, or two measures of distance. But the compensating effect may be well illustrated by what is done by the makers of clocks for the most delicate measurements of time, such as are used for astronomical calculations. The accuracy of the clock depends upon the length of the pendulum and the weight which the pendulum supports. If the disk at the end of the pendulum be humg by a wire of a single metal, that metal expands and shrinks in length under changing atmospheric influences, and affects the clock's record of time. So the makers of these clocks resort to two or three wires of different metals, differently affected by the atmosphere. One of these compensates for and supplements the other, so that the atmospheric changes have much less effect than upon a single metal.

Beside the fact that I thoroughly believed in the soundness of bimetallism, as I now believe in it, I thought we ought not to give our antagonists who were pressing us so hard, and appealing so zealously to every debtor and every man in pecuniary difficulties, the advantage, in debate before the people, of arraying on their side all our great authorities of the past. We had enough on our hands to encounter Mr. Bryan and the solid South and the powerful Democratic Party of New York and the other great cities, and every man in the country who was uneasy and discontented, without giving them the right to claim as their allies Alexander Hamilton, and George Washington, and Oliver Ellsworth, and John C. Calhoun, and Daniel Webster, and Henry Clay, and Thomas H. Benton. I was, therefore, eager that the Republican Party should state frankly in its platform what I, myself, deemed the sound doctrine. It should denounce and condemn the attempt to establish the free coinage of silver by the power of the United States alone, and declare that to be practical repudiation and national ruin. But I thought we ought also to declare our willingness, if the great commercial nations of the earth would agree, to establish a bimetallic system on a ratio to be agreed upon.

Some of the enemies of the Republican Party, who could not adopt the Democratic plan for the free coinage of silver, without contradicting all their utterances in the past, denounced this proposal as a subterfuge, a straddle, an attempt to deceive the people and get votes by pledges not meant to be carried out.

I believed then, and I believe now, that we were right in demanding that the Republican Party should go into the campaign with the declaration I have stated.

It is true that you cannot give value to any commodity by law. It is as idle to attempt to make an ounce of silver worth as much as an ounce of gold by legislation, as it is to try to make one pound weigh two pounds, or one yard measure two yards. You cannot increase the price of a hat, or a coat, or a farm, by act of Congress. The value of every article, whether gold or silver, whether used as money or as merchandise, must depend upon the inexorable law of demand and supply. But you can, by legislation, compel the use of an article, which use will create a demand for it, and the demand will then increase its price. If Congress shall require that every soldier in the United States Army shall wear a hat or coat of a particular material or pattern, or shall enact that every man who votes shall come to the polls dressed in broadcloth, if there be a limited supply of these commodities, the price of the hat or the coat or the broadcloth will go up. So, when the nations of the world joined in depriving silver of one of its chief uses—that of serving the function of a tender for the payment of debts, the value of silver diminished because one large use which it had served before was gone. Whether this doctrine be sound or no, it was the result of as careful study as I ever gave in my life, to any subject, public or private. It was not only the doctrine of the Fathers, but of recent generations. It was the doctrine on which the Republicans of Massachusetts, a community noted for its conservatism and business sagacity, had planted the Commonwealth, and it was the doctrine on which the American people planted itself and which triumphed in the election of 1896.

I have been accused, sometimes, of want of sincerity, and, by one leading New England paper, with having an imperfect and confused understanding of the subject. Perhaps I may be pardoned, therefore, for quoting two testimonials to the value of my personal contribution to this debate. One came from Senator Clay of Georgia, one of the ablest of the Democratic leaders. After I had stated my doctrine in a brief speech in the Senate one day, he crossed the chamber and said to me that, while he did not accept it, he thought I had made the ablest and most powerful statement of it he had ever heard or read. The other came from Charles Emory Smith, afterward a member of President McKinley's Cabinet and editor of the Press, a leading paper in Philadelphia. I have his letter in which he says that he think an edition of at least a million copies of my speech on gold and silver should be published and circulated through the country. He also said, in an article in the Saturday Evening Post, June 14, 1902: