244 



CURRENCY. 



meant gold, and that coin payments involved 

 the shrinking of all values to the measure of a 

 single metal." The Government of the United 

 States, a debtor nation and a nation of debtors, 

 cannot, without abusing its trust, support such 

 a movement as the general demonetization of 

 silver, which would largely increase the bur- 

 den of taxation to be imposed upon the people 

 for the payment of the interest and principal of 

 the national debt (2,000 million dollars), the 

 state debts (390 millions), the city, town, and 

 county debts (850 millions); it would practically 

 double the debts of railroads (2,459 millions), 

 canals (109 millions), and of other corporations, 

 mining, manufacturing, etc., whose aggregate 

 debts are enormous ; it would increase the long 

 debts which are secured by real-estate mort- 

 gages in like proportion, and would work the 

 confiscation of a large portion of the land and 

 city property of the country from the present 

 owners and improvers (a large portion proba- 

 bly one-half of the deposits and surplus capital 

 of the banking institutions are invested in real- 

 estate securities, and the mortgages held by 

 private persons must be of much greater 

 amount; the cities and farming regions alike 

 of the United States are largely built up on 

 long loans ; it was computed that three-fourths 

 of the lots on Manhattan Island were under 

 mortgage liens two years ago) ; it would aug- 

 ment in like manner the value of the rents con- 

 tracted for in advance in the leases of land and 

 buildings, or of land to be built upon by the 

 lessees, and a great portion of the property 

 occupied for commercial and manufacturing 

 purposes in the cities has been taken on long- 

 lease contracts ; and it would render insup- 

 portable the current trading liabilities of the 

 business community, contracted under the 

 present scale of value (the average liabilities 

 of the 9,022 merchants and manufacturers 

 on the list of Dunn's mercantile agency, who 

 failed in 1876, were $21,020 ; taking that as 

 an average for the whole number of traders 

 and manufacturers on the books of that agency, 

 the collected business debts of the whole 630,- 

 099 mast amount to $13,244,000,000, and the 

 aggregate liabilities of all the traders and op- 

 erators in the country to a much larger figure). 

 " The danger which menaces is, not a plethora, 

 but a scarcity, of money, even if both metals 

 are retained as such. But with the demone- 

 tization of one of them we should witness a 

 contraction and scarcity of money and fall in 

 prices which, in magnitude and suddenness 

 combined, has no precedent in the history of 

 the world, and in respect to the consequences 

 of which we have no adequate experience to 

 guide us." The aggregate amount of Ameri- 

 can public and corporate debts held in Europe 

 is over 2,000 million dollars, the simple interest 

 on which exacts a tribute of 100 millions on the 

 productive forces of th^TUnited States. "If 

 the United States should resume specie pay- 

 ments under the optional or double standard, 

 silver would always constitute a part of our 



currency. The channels of circulation would 

 doubtless for a short time, and until the new 

 demand here for silver caused the legal and 

 market relations of the metals to coincide, be 

 monopolized by silver, and by such paper as 

 might be convertible into the metals. It would, 

 therefore, not be necessary to resumption to 

 draw gold from Europe or to intercept it on 

 its way there. Even if the gold now in this 

 country, or some portion of it, should be sent 

 to Europe, it would be sent where it would be 

 of the greatest possible service to us, and where 

 it would have a direct influence in raising the 

 prices of our exported products. These prices 

 are not regulated or controlled by the volume 

 or kind of money in use in this country, but by 

 the volume and kind of money used- in the 

 countries to which our products are exported. 

 A gold standard here will force a fierce scram- 

 ble with Europe for gold. This would straiten 

 our largest customers, diminish their means 

 and disposition to make purchases, and lower 

 the prices of our products in European mar- 

 kets." 



The commissioners recommended the resto- 

 ration of the double standard, with unrestrict- 

 ed coinage of both metals; Messrs. Jones, Wil- 

 lard, and Bogy advised the relative valuation 

 of the Latin Union of 1 : 15, as tending to 

 strengthen those countries in the bi-metallic 

 position ; while Messrs. Groesbeck and Bland 

 favored the retention by the former legal rela- 

 tion of 1 : 15.988. The commission believed 

 that the remonetization of silver by the United 

 States would deter the Latin Union from aban- 

 doning the double standard, and, even if it 

 should not, that it would restore its former 

 value to silver. In the event of a large influx 

 of silver from Europe, the citizens of the 

 United States would only be voluntarily ex- 

 changing commodities which they can spare 

 for money which they need. 



Mr. George S. Boutwell presented a minority 

 report, in which he recommended that the 

 United States Government invite governments 

 of the other commercial nations to join in a 

 convention for the use of both metals as cur- 

 rency, according to a fixed relative valuation 

 to be agreed upon. He deprecated any inde- 

 pendent action, and considered that the incon- 

 venience which would ensue to American mer- 

 chants in the settlement of their balances in 

 London, which is the clearing-house of the 

 world, furnishes a paramount objection to the 

 use of a silver currency in this country. The 

 depreciation of the public credit, by the pay- 

 ment of its obligations in silver, would entail 

 losses which would greatly overbalance the 

 gain to be derived from the payment of the 

 debt and interest in the cheaper metal. 



Prof. Bowen also returned a minority report, 

 in which Mr. Gibson concurred. The recent 

 fluctuations in silver, he believed, had three 

 causes: 1. The productiveness of the Nevada 

 mines, which increased the annual silver pro- 

 duction of the world within the period from 



