"Now, you all know that the money in circulation in the United States—all of it—is good, good as gold. It will pass everywhere and buy as much as the same amount of any other money in the world. Our money is of many kinds—gold, silver, nickel and copper are all coined into money. Then we have United States notes, or greenbacks, gold certificates, silver certificates, treasury notes and national bank notes. But the virtue of all these many kinds of money is that they are all good. A dollar of each is as good as a dollar of any other kind. All are as good as gold. But, and here comes the first difficulty, the silver in the silver dollar is not worth as much as the gold in the gold dollar. The nickel in that coin is worth but a small part of five cents' worth of silver. And the copper in the cent is not worth one-fifth of the nickel in a five cent piece. How then, you may ask me, can these coins be made equal to each other? The answer is that coinage is a government monopoly, and though the copper in five cents is not worth a nickel, and the nickel in twenty pieces is not worth a silver dollar, and the silver in sixteen dollars is not worth sixteen dollars in gold, yet, as the government coins them, and receives them, and maintains them at par with gold coin, they are, for all purposes, money equal to each other, and wherever they go, even into foreign countries, they are received and paid out as equivalents.
"The reason of all this is that the United States limits the amount of all the coins to be issued except gold, which, being the most valuable, is coined without limit. If coinage of all these metals was free, and any holder of copper, nickel, silver or gold could carry it to the mint to be coined, we would have no money but copper and nickel, because they are the cheaper metals, worth less than one-fourth of what, as coin, they purport to be. For the same reason, if the coinage of silver was free at the ratio of sixteen of silver to one of gold, no gold would be coined, because sixteen ounces of silver are not worth one ounce of gold.
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"The one distinctive, striking feature of the law of 1890 is, that the United States will not pay for silver bullion more than its market value. And why should we? What is there about silver bullion that distinguishes it from any other product of industry that the government needs? When the government needs food and clothing for the army and navy it pays only the market price to the farmer and manufacturer. The value of silver produced is insignificant compared with the value of any of the articles produced by the farmer, the miner and manufacturer. Nearly all the silver produced in the United States is by rich corporations in a few new states, and its production at market price is far more profitable than any crop of the farmer, and yet it is the demand of the producer of silver bullion that the United States should pay him twenty-five per cent. more than its market value that lies at the foundation of the difference between the Republican and Democratic parties.
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"Our Democratic friends differ from us in this particular. They are in favor of allowing any holder of silver bullion, foreign or domestic, any old silverware or melted teapot, any part of the vast accumulated hoard of silver in India, China, South America and other countries of the world, estimated by statisticians to be $3,810,571,346, to present it to the treasury of the United States and demand one dollar of our money, or our promises to pay money, for 371 grains of silver, or any multiple of that sum, though this amount of silver is now worth only 77 cents, and has for a period of years been as low as 70 cents. If with free silver we receive only the quantity of silver we are required to purchase by existing law, the United States would pay over $13,000,000 a year more than if purchased at the market value, and this vast sum would be paid annually as a bounty to the producers of silver bullion.
"But this is not the worst of it. Free coinage means that we shall purchase not merely four and a half million ounces a month, but all the silver that is offered, come from where it may, if presented in quantities of one hundred ounces at a time. We are to give the holder either coin or treasury notes, at his option, at the rate of one dollar for every 371 grains, now worth in the market 77 cents. Who can estimate the untold hoards of silver that will come into the treasury if this policy is adopted?
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"But it is said that free coinage will not have the effect I have stated; that the silver in sight is so occupied where it is that it will not come to us. They said the same when the present law was passed, that foreign silver would not come to us. Yet our purchase of 4,500,000 ounces, troy weight, or 187 tons, of silver a month, at market price, brought into the United States large amounts of silver from all parts of the world. If that is the effect of limited purchases at one dollar an ounce, the market price, what will be the effect of unlimited purchases at 29 cents an ounce more than market price? It would inundate us with the vast hoards of silver in countries where silver alone is the current money, and draw to us all the rapidly-increasing production of silver mines in the world.
"But they say with free coinage the price of silver will rise to the old ratio with gold. The experience of all the world belies this statement. In no country in the world where free coinage exists is sixteen ounces of silver equal to one ounce of gold. France and the United States maintain the parity between the two by carefully limiting the coinage and receiving and redeeming silver coins as the equivalent of gold. But wherever free coinage exists that is impossible. With free coinage the market value of the bullion fixes the value of the dollar. The Mexican dollar contains more silver than the American dollar, and yet the Mexican dollar is worth about 78 cents, because in Mexico coinage is free. And the American dollar is worth 100 cents because in the United States coinage is limited. So in all free coinage countries where silver alone is coined it is worth its market value as bullion. In all countries where gold circulates the coinage of silver is limited, but is used as money in even greater amounts than in countries where coinage is free. This is the case in France and the United States. The free coinage of silver in either would stop the coinage of gold.