Emerson on Sound Money / A Speech, 1896

by Willis George Emerson

The patriotism and statesmanship of Andrew Jackson and Thomas Jefferson were untainted in 1792 by the dangerous influence of a coterie of silver barons. They simply ascertained as nearly as they could the relative or market value of the two metals, and determined the legal from the commercial ratio, placed them side by side and started our mints going with the unlimited coinage of gold and silver at the ratio of 15 to 1. As a matter of fact they had overvalued silver; that is to say, the gold dollar was worth 100 cents, but the silver dollar was only worth 98 cents. Now the rank and file of our forefathers cared very little about the discrepancy of the 2 cents on the dollars, but the money changers were abroad in the land in 1792, the same as they are in 1896, and whenever a gold coin came into their possession it was quietly retired from circulation. In other words, the cheaper money drove out of circulation the higher priced money, and as a result, we had silver as the only hard money currency circulating in this country from 1792 to 1834. Let me quote Thomas Jefferson's own words. In speaking of the ratio of the two metals, he says:

"THE PROPORTION BETWEEN THE VALUES OF GOLD AND SILVER IS A MERCANTILE PROBLEM ALTOGETHER."

What statement could be clearer and more concise than that? It being a mercantile problem, it of course was understood to be subject to fluctuation and change. Accordingly, in 1834 our forefathers concluded as their first attempt at a double standard had utterly failed in keeping the two metals circulating side by side as money, that they would change the ratio from 15 to 1 to 16 to 1, which they did. It seems this ratio undervalued silver, that is to say, the gold dollar was still worth 100 cents, but the silver dollar was worth from 102 to 103 cents. Gold at once became the hard money circulating medium in this country, silver the higher priced money, was entirely retired by the money changers, bullion dealers and silversmiths. This is another illustration where the cheaper money drove out of circulation the higher priced money.

GREENBACKS WERE CHEAP MONEY.

In 1861 our country was engaged in civil war, and the greenbacks were issued as money, and were at once looked upon as a cheaper money than either gold or silver and immediately drove both gold and silver out of circulation and kept them out of circulation for seventeen years, or until we resumed specie payment in 1879. The history of these seventeen years is another instance where the cheaper money was victorious and drove out of circulation the higher priced money. Mr. Harvey no less than four times in his recent speech in this city gave the following definition of bimetallism: "Bimetallism is the right to use either of the two metals for money." This condensed answer bears about the same relation to the correct definition of bimetallism as the Boy Orator of the Platte compares with those intellectual giants whom he seeks to imitate, but without success, the immortal Washington and Lincoln. (Applause). Bimetallism as is understood in the discussion of our financial question, is the use of both gold and silver as money; both legal tender money, and the legal ratio between the two metals determined from the commercial ratio. Throughout Mr. Harvey's published works and lectures we find him affirming the false principle that money is a creature of law, and that by operation of law the commercial ratio between gold and silver can be made to conform with the legal ratio of 16 to 1. Let us follow the author of "Coin's Financial School" for a few moments, and see where this false principle will carry us.

TO-DAY THE COMMERCIAL RATIO BETWEEN SILVER AND GOLD IS ABOUT 32 TO 1. MR. HARVEY CLAIMS THAT IF HIS THEORIES ARE SPREAD UPON OUR STATUTE BOOKS THAT IN A VERY SHORT TIME THE COMMERCIAL RATIO WILL BE 16 TO 1. IF MR. HARVEY POSSESSES THE SUPERHUMAN POWER OF REDUCING THE VALUE OF GOLD ONE-HALF, OR DOUBLING THE PRICE OF SILVER, WHICHEVER YOU WILL, AND BRING THEM TO A COMMERCIAL PARITY AT 16 TO 1, THEN INDEED WOULD HE BE FALSE TO THE CITIZENS OF THIS REPUBLIC IF HE DID NOT ADD A LITTLE MORE POWER TO HIS "KEELEY-MOTOR" THEORY, (APPLAUSE) AND MAKE THE COMMERCIAL RATIO BETWEEN GOLD AND SILVER 15 TO 1, THE SAME AS IT WAS IN 1792, OR BETTER STILL, IF IT IS A BLESSING TO HUMANITY TO LOWER THE RATIO BETWEEN GOLD AND SILVER, THEN APPLY A LITTLE MORE OF THIS OCCULT POWER AND MAKE THE RATIO 13 TO 1, THE SAME AS IT WAS IN 1620, WHEN OUR ANCESTORS CAME OVER IN THE MAYFLOWER; OR APPLY THE SAME FORCE WITH RENEWED ENERGY AND BRING THE RATIO DOWN TO 10 TO 1, THE SAME AS IT WAS IN 1492. INDEED, IF THIS PRINCIPLE IS A BOON TO HUMANITY, AND HIS THEORIES ARE NOT FALSE, WHY NOT PUSH THE WORK ALONG AND MAKE THE RATIO BETWEEN GOLD AND SILVER 1 TO 1? (APPLAUSE.)

My fellow citizens, in following my friend Harvey, you are led into a labyrinth abounding with impossibilities and as impracticable as the theory of perpetual motion. When the earth is proven to be flat instead of a globe, when water runs up-hill, when the law of gravitation ceases to be operative, when the tail wags the dog and not the dog the tail, then, and not till then, may we seriously consider these perpetual motion, "Keeley Motor" theories of Mr. Harvey and other double standard advocates. (Great Applause). If we were unable to keep both metals circulating side by side when there was a slight discrepancy of only two or three cents in their intrinsic value, does any intelligent or sane man believe for a moment whether he is a student of Coin's Financial School or not, that if we throw open our mints to the free and unlimited coinage of 52-cent dollars, that they would not at once drive out of circulation the $630,000000 of gold, now constituting more than one-third of our circulating medium? If gold, so important a factor in our medium of exchange both at home and abroad, should retire before silver—the cheaper money (and the light of experience surely proves that it would) can any one doubt that we would at once go on to a silver basis? Can any one doubt that the $625,300,000 of silver now used as money in this country would not instantly be cut in two so far as its purchasing power is concerned—that is, shrink from 100 cents, its face or nominal value, to 52 cents, its bullion value? In the light of past experience it would surely be a sad commentary on our intelligence as an enlightened nation, if we had learned nothing in 100 years. If the illustrious Hamilton and Jefferson were alive, they would, by pursuing the same policy which actuated them in determining the money of the constitution, fix the ratio to-day at about 32 to 1, simply because the relative or market value of the two metals has varied to that extent.

HONESTY AND SOBER JUDGMENT NEEDED.

My countrymen, the questions involved in the present campaign merit and deserve your most careful thought and study. It is the sober, honest judgment of the thinking, reading, investigating American citizen that the Republican party is relying upon for its support. Let me give you a few facts which possibly you will consider worthy of remembrance:

FIRST. EVERY FREE AND UNLIMITED COINAGE COUNTRY IN THE WORLD IS ON A SILVER BASIS.