If Not Silver, What?

by John W. Bookwalter

This nation should have the best money in the world.

Very true. And the question of what is the best can only be determined by science and experience. It is certain that gold standing alone is not; for its fluctuations in purchasing power have been so tremendous as again and again to throw the commercial world into jimjams. History shows that it has varied 100 per cent. in a century, and we have seen in this country that its value declined about 25 per cent. from 1848 to 1857, and that it has increased something like 60 per cent. since 1873. Without desiring to be ill-natured, I must say it seems to me that a man has a queerly constituted mind who insists that that is the only “honest money.”

But we don’t want 50-cent dollars.

And you can’t have ’em, my dear sir. A dollar consists of 100 cents. The phrase “50-cent dollar” and that other phrase “honest money” remind me of what I used to hear in my boyhood when the slavery question was debated with such heat: “What! Would you want your sister to marry a nigger? Whoosh!” It was assumed, if a man denounced slavery, that he wanted the colored man for a brother-in-law. Men who employ such phrases show a secret consciousness of having a weak cause. And while I am about it I may as well add that I do not admire the way some of our fellows have of denouncing gold as “British money.” Great fools, indeed, the British would be if they did not fight for a gold basis, for by reason of it they get twice as much of our wheat, meat, and cotton for the $200,000,000 per year we have to pay them in interest. According to the Chancellor of the Exchequer, the world owes England $12,000,000,000, on which she realizes a little over four and a half per cent., or pretty nearly $600,000,000 per year. Fully that, if we add income from property her citizens own in this and other countries. On the day we demonetized silver, that $600,000,000 could have been paid in gold in the port of New York with 450,000,000 bushels of wheat; to-day it would take 900,000,000 bushels. In short, the amount of grain England has made clear because of the rest of the world adopting monometallism would bread all her people, feed all her live stock, and make three gallons of whiskey for every person on the island. Why shouldn’t they take what the world willingly gives them? I have my opinion, however, of the common sense of a world which does things that way.

We want money that is equally good all over the world.

There is no such money. The coin we send abroad is only bullion when it gets there, and most dealers prefer government bars. The exchange must be calculated exactly the same whether we use gold, silver, or paper in our domestic trade; and this notion that we “should be at a disadvantage in the exchange” is a delusion. The variations in the value of the greenback during our war era were calculated daily, and prices in this country rose or fell to correspond. It must, I say, be calculated just the same in gold or silver, and any smart schoolboy can do it in a minute on any transaction.

What I mean is that the silver dollar is worth only 50 cents in gold.

And by the same token the gold dollar is worth 200 cents in silver. The answer is as logical as the quip, and neither is worth notice. Such a process merely assumes an arbitrary standard and measures all other things by it, as the drunkard in a certain stage of intoxication thinks that his company is drunk while he is duly sober. And, by the way, where do you get your moral right to say that a dollar which will buy two bushels of wheat or twenty pounds of cotton is any more honest than one which will buy one bushel or ten pounds? Is it because with the dear dollar the farmer must work twice as long to pay off a mortgage, that the interest paid on the great debts of the world will buy twice as much, and the debtor nations are put at a terrible disadvantage as to the creditor nations personally? Is that honest?

A very safe test of any theory is to follow it to its logical conclusion. Take your “honest” money argument, on the basis of twenty years’ experience, and see where it will take you in the near future. The dollar which buys two bushels of wheat or sixteen pounds of cotton is “honest,” you say, and a dollar which buys but one bushel or eight pounds is not. By and by, if your fallacy prevails, the dollar will buy three bushels of wheat or twenty-five pounds of cotton, and will then, by your reasoning, be much more “honest” than now. Is that your idea? How much lower must prices go before you will admit that gold has gained in purchasing power?

But it cannot be that prices have fallen because of the scarcity of money, for the low rate of interest now prevailing proves that money is abundant and cheap.