Plain facts boiled down [microform]: the probable effects of free coinage ...

fS‘8¥3 70- fS" MASTER NEGATIVE # COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD v.4^^ Clarke, Albert, 1840- Plain factn boiled do’^m; the probable ef-’^eotn of free coina^s... Boston, Home market olu>), 18^^, fl5*j p# 18 om. At head of title: Money loaflotn. Vol, 0^^ pirphlets. •n o^\sj RESTRIC' IONS ON USE: Reproductions may not be made without permission from Columbia University Libraries. TECHNICAL MICROFORM DATA FILM SI2 E: REDUCTION RATIO: 9-'/ IMAGE PLACEMENT: lA © DATE FILMED: 3 /^7/f ^ INITIALS: TRACKING # : 3/lLlO FILMED BY PRESERVATION RESOURCES, BETHLEHEM, PA Plain Facts boiled down Secretary of the Home Market Club, and Vice-President of the National Statistical Association. riiese lealletsare iiitemlL-il to he as non-partisan as truth, ami 1 heir t)hjeet is to enal)!e people \\ ho do not pretend to he up in linance to understand the nionej question. oy_NC^y BOSTON, iSr/,: PuuLi.siiED i!Y The IIo.me Market Club LIBRARY OF THK REFORNf CLUB Bound currbncy committcc. S2 William 8t., New York. CHAPTER I. DEFINITIONS. % * STANDARD MONEY : Any monej' prescribed by law. STANDARD FINENESS: In coinage, the proportion by weight of fine metal and alloy, established by law. In the United States the gold and silver coins have a fineness of 900 parts in 1000. The other 100 is alloy. The alloy in gold coins is ten parts of silver and 90 of copper. The alloy of silver coins is 100 parts of copper. The object of alloy is to harden the coins. FREE COINAGE : The right of any person to take standard metal to any mint and have it coined without charge, or to exchange it for standard money. LEGAL TENDER : Whatever the law says must be accepted in payment of debts. MARKET VALUE : The price which anything will bring when offered to the public. It cannot be fixed by law. * $ \ I I RATIO : The proportion of one thing to another. There may be a ratio of fineness, a ratio of value, or a ratio of quantity. i y PAR OR PARITY : • Equality with the standard. MONOMETALISM : The use of only one metal for standard money. BIMETALISM : The use of two metals for standard money, at a ratio of quantity fixed by law and maintained as nearly as possible to their relative market values. > If they are not so maintained, the more valuable will go out of monetary use, by operation of an immutable rule known as : ^HE GRESHAM LAW : Wliich was discovered by Sir Thomas Gresham in the reign of Qiieen Elizabeth and which is, that when a country has two kinds of currency and one is more valu- able as a commodity than the other, it goes out of circula- tion and is exported if the country owes abroad, while the less valuable remains. » So if this country should attempt bimetalism and not maintain it, silver monometalism would inevitably result. SIXTEEN TO ONE : As applied to the present coinage question, this means ^ that the government shall accept 16 ounces of silver as ^ worth one ounce of gold, and that money coined at that ratio shall be legal tender. At the present market values it takes from 31 to 32 ounces of silver to buy an ounce of gold. Sixteen ounces of silver will coin $18.60 — standard silver dollars. This quantity can be bought in market . for $9.84. The profit to the owner, under free coinage, 1 would therefore be $8.56, or 89 per cent, unless the value of silver should advance or the government should aban- don bimetalism and go upon a silver basis. CHAPTER n. Could Free Coinage By > | < This Country Alone Raise ! Silver to Par with Gold? I The friends of free coinage say yes ; but admitting pos- sible failure, they prefer silver to gold. Now if it was the demonetization of silver which sep- arated the market values of the metals, let us see who did it. What Nations Discarded the Silver Standard. Great Britain began it in 1816, but one country alone^ could not destroy parity, any more than one country alone can restore it. The metals remained at substantial parity until 1874. In 1867 the first international monetary conference, held at Paris, voted unanimously, with the exception of The Netherlands, in favor of the single gold standard. The nations represented were Austria, Baden, Bavaria, Belgium, Denmark, the United States, (by Samuel B. Ruggles of New York), France, Great Britain, Greece, Italy, The Netherlands, Portugal, Prussia, Russia, Sweden and Norway, Switzerland, Turkey and Wurtem- burg. Prussia changed to gold before 1870, and the whole German Empire changed in 1873. The same year the States, which in 1865 had formed the Latin Union for interchange of coins, namely, France, Belgium, Italy and Switzerland, to wliich afterwards Greece was added, closed their mints to the free coinage of silver, and that year also the new mintage act of the United States, which had been pending for three years, changed the unit from silver, which was then at a premium and had gone out of the country, to gold. Austria-Hungary is changing gradually, likewise Russia. ( I A Case for Common Sense. Admitting that this general discontinuance of the use of silver as standard monej', and the greater use of gold, lessened the value of silver and increased the value of gold — although other causes operated, as will be shown further on — does it stand to reason that what so many n.ations concurred in doing the United States alone can undo? Let us see : The World's Silver and Our Gold. As there can he no bimetalism without approximate parity, the United States w'ould have to raise all the sil- ver in the world from its present value, 53 cents for 412)0 standard grains, to 100 cents; that is, we should have to buy all that might be offered. How much is there of it? Nearly four billions, or, ac- cording to the best authorities, $3,931,100,000, and if the value should increase, the output of the mines would enormously increase. How much gold has the Ifnited States? According to the Secretary of the Treasury, $636,256,023— only about one-sixth as much as the world’s stock of silver, and of course all of it could not be used. Would the Deluge Come? But the friends of free coinage say that all the silver W'ould not be offered. Possibly. But so long as we should pay more than the market price — and 16 to i is almost double tlie market price — it would be sure to come. They say that most of it is in use and could not be spared. The answer is that when a profit of *49 or even of 10 per cent could l)e made, it would be drawn out of its present use. Again, nine European banks hold $450,- 000,000 of silver as a reserve. This they would offer at once. But it is contended that the European ratio being i5'.< to I instead of 16 to 1, there would be a loss of 3 per cent in sending their silver here. Very well, that would still leave 46 per cent profit at present prices. Would it he possible, therefore, for this country to re- store and maintain parity? The foregoing facts and fig- ures show' that we should fail. CHAPTER III. Results of Changing From Gold to Silver. First, gold would be withdrawn and the circu- lation contracted, causing great and prolonged distress. Second, our securities held abroad, estimated at $2,000,000,000, would be thrown upon the mar- y ket, which would cause a panic. This would par- alyze business, earnings would in many cases cease and the poor would have to sacrifice their property. Third, all fixed investments and incomes would shrink 49 per cent, or whatever would then mark the difference between gold and silver. Here are some of them : Number of Depositors. 4. 875^5 10 SAVINGS BANKS. Amount of Deposits, $1,810,507,023 NATIONAL BANKS. Average Deposit. $371-36 Net Deposits, Sept. 28, ’95, a fair average, $1,989,300,000 BUILDING AND LOAN ASSOCIATIONS. Number, 6,000 Assets, $750,000,000 Yearly Receipts. $200,000,000 LIFE AND ANNUITY INSURANCE. Number of Policies. 11,283,950 Beneficiaries. 25,876,080 Amount Insured, $12,285,604,947 PENSIONS. Number, June 30, ’95. 97o»5-4 Annual Payment- $128,356,204. NATIONAL DEBT (1S95.) Interest Bearinjj Bonds, Annual Interest, $716,202,060 $29,240,792 NET MUNICIPAL DEBTS, ( 1 S90. ) Total Amount. Annual Interest at 5%. $1,135,210,442 $56,760,522 WAGES. Pe*^plc Employed (1890.) Annual Aggregate. 22,735,6^ $7,891,047,500 RAILROADS. Fixed Miles, June 30, ’95. Bonds. Annual Charges. 180,657 $5.407.1 14'3«3 $425,966,921 MANUFACTURING AND OTHER COMPANIES. Bonds estimated at $2,500,000,000; interest, $125,000,000. PROMISSORY NOTES. Principal estimated at $4,500,000,000 ; int’st, $225,000,000. All these obligations are for dollars. They can- not be marked up to offset the inflation of the standard, as other property can. Thus Four-Sevenths of the Public Wealth is marked for scaling. Nearly forty billions of this wealth is owned by people of moderate means, and the debts are owed by great concerns. Debtors who denounce banks little realize that banks are debtors and that, by loading with silver, they could save nearly two thousand millions of dollars by paying their depositors in dollars worth only 49 per cent of those deposited. Who Would Suffer? If any have thought that free coinage would “relieve the common people,” they can see by the foregoing figures that it would “relieve” them of their property. CHAPTER IV. Who Would Benefit By the Free Coinage of Silver By this Country Alone ? Nobody in this country except the owners of silver. Would not debtors benefit? No; for how can they get silver.^ The New York Lumber Trade Journal thus ^ clev'erly puts the case : “To a man who has no money, there are several ways to get it, viz. : (a)I5egit; (h) Steal it; (c) borrow it ; (d) Secure it by gift; (e) Trade sometliing for it. If we are to beg it, we might just as well beg a gold dollar. If we are to steal it, we want the best. A thief who would steal a silver dollar in preference to a gold dollar would be accjuitted, on the ground that he was insane. If we borrow it we want that kind of money which will go far- thest. If we are to secure it by gift, certainly we should not depreciate that which we are about to receive. This brings us to (e), which is the way most money is obtained. What have I got to trade for money which I want.^ It may be labor, or a horse, a cow^ lumber or shingles. At the present time we can trade any of the above, and get a gold dollar for every dollar’s worth of value as may be agreed upon between buyer and seller, but, if we have free coinage at i6 to i, will the dollar which vou get in trade be w'orth as much as the dollar you can get now.? This question must guide us in voting next November, and do not lose sight of the fact that, if all the silver in the world is coined into money, you can- not get a cent of it except by a, b, c, d, or e above referred to.” I Would not producers benefit ? No; for if the promised advance in prices should occur, it would only equal the cheapening of monej'. Everything is relative to othei things. Bimetalism might help. Lone-hand coinage, never. The Great Profit to Silver Owners. (1) As silver would take the place of gold, (see Gresh- am law), this would call for $636,256,023, or, at the present value of silver, $936,461,715. (2) As the present subsidiary coin (small change), which is now measured by gold would then be measured by silver, this would call for $40,784,850 in addition to keep the purchasing power equal to the present. (3') As the demand is that National Bank notes ($211- 691,035), shall give place to Treasury notes, and as U. S. notes, ($346,681,016) are now redeemable in gold, this will call for $820,806,914 more silver at the present price. (4) The Populist platform demands “ an increase of circulation.” It is now $23 per capita. To make it $40, as Populists demand, would call for $i,i90,cxx>,ooo more silver. Here is a total new demand for $3,014,053,479 of silver! It is desirable to help silver, but we must not cheat cred- ' itors. And how about other producers.? This is the way it looks to Prof. James Wilson of the Iowa Agricultural College : “ I am willing,” says be, “ to help out the silver min- ers if they are willing to help us. Their product is about half of the hen product of the country and if silver should be doubled in value by legislative enactment, I demand that Congress shall pass a law making six eggs a dozen. I refuse to support the free silver demand unless they are w illing to meet this demand from the farmers. I think that this country is big enough to act independently and make six eggs a dozen against all the world. Just see what an advantage this would be in collecting a tariff on eggs. When the Canadian brings his eggs over to the United States we will collect a tariff for a dozen on every six of his eggs, because our standard will be six eggs to a dozen. See what a great benefit this wdll be to the country. It may be urged that from time immemorial twelve eggs made a dozen, but I deny this for is it not true that thirteen is a baker’s dozen and fourteen is a fish- er’s dozen .? Do you mean to say that this great nation, extending itS domain from the Atlantic to the Pacific and from the Cheat Lakes to the Gulf of Mexico, is not able to maintain six eggs to the dozen.?” CHAPTER V. How . . ♦ Cheap Money Cheats Labor. All economists and historians agree that wage-earners aie the greatest sufferers from depreciated currency. The case was thus forcibly stated 6o years ago by America’s greatest stutcsinan, i^auicl Webster ^ “ '' J’o tampers with the. currency robs labor of its bread. He panders, indeed, to greedy" capital, which is keen-sighted and may shift for itself; but he beggars labor, which is honest, unsuspecting and too busy with the present to calculate for the future. The prosperity of the working classes lives, moves and has its being in es- tablished credit, and a steady medium of payment. All sudden changes destroy it. Honest industry never comes in toi any part of the spoils in that scramble, which takes place vvhen the currency of a country is disordered. Did wild schemes and projects ever benefit the industrious.? Did yio ent fluctuations ever do good to him who depends on his daily labor for his daily bread.? Did irredeemable bank paper ever enrich the laborious.? Certainlv never. A1 these lungs may gratify greediness for sudden gain . '■^sfiness of daring speculation, but they can brine nothing but injury and distress to the homes'^ of patient industry and honest labor.” ^ Labor Lost One-Third During the Civil War. The non-partisan IJ. S. Senate report, made in 1801, on prices and wages from 1840 to 1892 (the substance of , little pamphlet enti- mled Prices, Wages and Duties,” and which is sent free to all applicants), shows that prices for all articles of een- eial consumption stood in those years as follows: i860 ito; i86i--io^6; 1862—117.8; 1863—148.6; 1864— 190.C; 1865—216.8 This shows that in five years priced liad in- creased 1 16.8 per cent. The relative wages in all occupations during the same period were: 1S60— 100; 1861 — 100.8; 1862-100.4- 186:1— 7 .2] iS6.f— S0.8; 1S65 — 66.2. Everybody who then lived 4 remembers that wages were nominally increased, until they were thought to be high ; but, ineasured bv what they would buy, these figures show that they actually de- clined 33.8 per cent. This proves that wages do not'eon- form readily to inflation of the circulating medium, and that if this country were now to go upon the silver basis and issue an abundance of the cheap money for which some men clamor, labor would suffer. Would Hurt Labor in Many Ways. (1) By crippling industry. About 7000 iron miners in Northern Michigan are "now idle. President C. F. Rand of the Tilden mine says : “ We are not selling any ore. Our regular customers have not bought their supply, and tell us they now find it impossible to sell their pig-iron product, because the agi- tation in favor of free silver has stopped investments in enterprises which would otherwise have enabled them to operate their works as usual.” (2) By increasing the cost of imported raw materials and food products, which must be paid for at gold value, to the amount of nearly three hundred million dollars a year. (3) By embarrassing companies that are under legal restrictions as to charges, like street car companies whose charters limit fares to 5 cents or less. When wages and supplies should advance to conform to cheaper dollars, such companies would have to stop. (4) reducing the purchasing power of every dollar received. It is this power and not dollars by count that makes real wages. (5) Ey impairing the value of every investment that is expressed in dollars — such as savings in bank, insur- ance, and trades union funds. Labor Refusing It. The Socialist-Labor convention in New Hampshire and the Federal Labor convention in California, both held since Bryan was nominated, have denounced free coinage as “ class legislation,” and as wage-earners are not a debtor class, it would not be for their interest. The Chicago Tribune reports that the 1068 men em- ployed in the Studebaker works at South Bend, Ind., have taken a secret vote, which resulted: Gold, 709; silver, 282 ; doubtful, 77. So at this time over 66 per cent of the Americans, Poles, Germans, etc., working in this large establishment, Avant the dollars in which their wages are paid to be as good as the dollars paid them now. ^ The Nashville Banner (Dem.) puts these telling ques- tions : “ Does the dollar you earn buy too much ? If not, why clamor for cheap money.?” CHAPTER VI. Wages and Prices in Silver Standard Countries, It Is a fact, whatever the cause, tliat wages are lower and prices higher in silver standard countries than in gold standard countries. Prohahly a lower civilization accounts for the lower wages and the use of money that is less valuable than that of nations with which^ they trade accounts for the higher prices. Take these illus- trations ; MKXICO. Masons get 75 cents a day (silver); laborers 31 to 37 cents; spinners and weavers 20 to 30 cents; all other toilers in proportion. Under date of July 28, 1S96, U. S. Consul General Crit- tenden reports prices and exchange in Mexico as follows ; Pork, from $1.8710 $2.50 for 25 Ihs. ; ham, uncured, $3 to $3.25 for 25 lbs. ; cured, 50 to 6octs. a pound ; break- fast bacon, 50 cts. ; beef, not choice parts, 10 cts. ; beef, choice parts, 15 to 20; mutton, 10 to 15; abundance of beef and mutton liere in Mexico. Wheat, $9 to $10 for 300 lbs. T get excellent family flour at $8 per bundrcd — Mexican Hour. Corn bas ran«>-ed from $7.50 to $8.50 for 300 lbs. Sugar, refin'^d, 8crs.;- coffee in grain, 30 to 35 cts. These prices are Mexican currency with the exchan*>-e at from $1.85 to $1.90. That is, $i of the United Stales gold, paper or silver equaling $1.85 or $1.90 in Mexican silver or paper. The bulk of imported articles are high. Think of a factory hand getting 30 cents a day and pay- ing $16 a barrel for Hour. JAPAX. U. S. Minister Edwin Dunn, who has been in Japan nearly 25 years, says : “ The establishment of the silver standard in Japan and the abolishment of the gold standard took place at about the time of the so-called crime of 1873 in this country. The standard coin of Japan is the yen, worth a few cents more than a dollar of our money. It has depreciated in value until it is worth about fifty-fiye cents. Most of the Japane.se get about eighteen cents a day for labor and this goes just half as far as it did before. It takes two silver dollars to buy one gold dollar’s worth of stuff.” ixniA. Factory hands average 6 annas a day (about 10 cents), and the ryot (native) farmer, who is usually in debt to his banyan (land owner or money lender), gels less, as a rule. These poor people live almost wholly on second quality rice. Since 18S2, when silver began to decline, the price of this rice has advanced from 36 cents to 87 cents for 87 2-7 lbs. The manufacturer and the banyan have made money, but the poor toilers have grown poorer. In 1S95 British Consul Jamison at Shanghai gave this explanation why the India cotton mills were takiiiff the Chinese market from Lancashire mills: “Wages in the gold using countries have, through the appreciation of gold, become a hundred per cent dearer than they were, relatively to silver wages, and the manu- facturer in the silver standard countries can obtain his labor at half the cost which he formerlv paid.” l»IAXlTKACTrRi:RS. The fact that Mexico and Japan are developing their manufactures and prospering is cited to prove that a sil- ver standard becomes a kind of protection, making foreio^n goods so dear that the people produce their own. Granting that this is partly true, the foregoing facts show that it is at the expense of labor. Tbe only benefit that labor gets there is more work. More work and good pay are what we aim at in the Uni- ted States. There is a way to secure them Avithout lower- ing our standard. We have had it and can have it again. No country which degrades labor can be permanently prosperous. Good pay means good work and good mar- kets. Reduce by one half or one quarter the wages of twenty million people in this country and every farmer will find his produce a drug in the market and prices lower than ever before. CHAPTER Vn. The Silver Agitation in Relation to Agriculture. The fact that a great many Western farmers, suffering like all the rest of the people from the depression of indus- tries, are looking to free silver for relief, challenges in- quiry into their conditions. Farm Mortgages. The last census showed that of the nearly 5,000,- 000 farm homes in this country only 37}^ per cent are under any mortgage whatever, and that the amount of the incumbrance is less that 28 per cent of the value of the property mortgaged; also that more than 72 per cent of the indebtedness was incurred for purchase and improvements, and that during the decade more old debts had been paid than new had been contracted. ^These facts show average thrift that is unexampled. They also show that nearly all outstanding debts were incurred when money was as valuable as it is now. The Decline In Prices. Since 1873 the prices of farm products have declined in the aggregate 26 per certt; but the prices of what the farmer buys — machinery and implements, hardware, glass, sugar, clothing, and manufactures in general, have declined in the same period 55 per cent. So if the farmer has bought as much as he has sold, he has gained by the decline. , There has also been a great decline in the cost of trans- portation on trunk lines. In 1873 the freight charge on a bushel of wheat from Chicago to New York was 23 cents; now it is less than 10 cents from Chicago to Liverpool. Increased Competition. Within twenty years the wheat crop of Minnesota, the Dakotas and Kansas has increased eight fold. During that time India and Argentina have changed from custom- ers to competitors and now send to common markets more than half as much as we do. Cheap transportation applies there as here. These facts alone account for the great decline in prices. Loss of Home Market. Since 1893, when a new tariff policy began to shrivel employment, there has been a decline in the home con- sumption of wheat from 5.91 bushels to 4.54 bushels per capita; of corn from 30.33 to 16.98; of wool from 6.72 to 6.32 and of cotton from 24.03 to 22.48. Meanwhile imports have increased, of wool by 81 mill- ion pounds over 1892, cotton cloth by 13 million yards, woolen goods by 23 million dollars, potatoes by 900,000 bushels, etc., throwing many consumers out of employ- ment. In 1892 about 5}^ millions of people were employed in our manufactures; nearly two millions are now idle. A foreign workman making goods for this country con- sumes only about $4 worth of our farm products in a year. A workman producing the goods here consumes about $96 worth. McKinley's Sound Conclusions. “ Whatever the farmer is suffering to-day,” says William McKinley, “is because his competitors have increased in numbers and because his best customers are out of work. Can the farmer be helped by free coinage of silver.? No, because if the nominal price of grain were to rise, through an inflation of the currency, the price of every- thing else would rise also, and the farmer would be rela- tively no better off than he was before. Free silver will not remove the competition of Russia, India and the Argentine Republic. This competition would remain if you should coin all the silver of the Avorld. Free silver will not increase the demand for your wheat or make a single new consumer. You don’t get consumers through the mints; you get them through the factories.”