The Silver Question
William Jennings Bryan
(1860—1925)
Delivered in Madison Square Garden, New York City, on Aug. 10, 1896, in
accepting the Democratic nomination for the Presidency. This speech contains,
in condensed form, the arguments offered in support of the restoration
of bimetalism.
I SHALL, at a future day and in a formal letter, accept the nomination
which is now tendered by the Notification Committee, and I shall at that
time touch upon the issues presented by the platform. It is fitting, however,
that at this time, in the presence of those here assembled, I speak at
some length in regard to the campaign upon which we are now entering. We
do not underestimate the forces arrayed against us, nor are we unmindful
of the importance of the struggle in which we are engaged; but, relying
for success upon the righteousness of our cause, we shall defend with all
possible vigor the positions taken by our party. We are not surprised that
some of our opponents, in the absence of better argument, resort to abusive
epithets, but they may rest assured that no language, however violent,
no invectives, however vehement, will lead us to depart a single hair’s
breadth from the course marked out by the National Convention. The citizen,
either public or private, who assails the character and questions the patriotism
of the delegates assembled in the Chicago Convention, assails the character
and questions the patriotism of the millions who have arrayed themselves
under the banner there raised.
It has been charged by men standing high in business and political circles
that our platform is a menace to private security and public safety; and
it has been asserted that those whom I have the honor for the time being,
to represent, not only meditate an attack upon the rights of property,
but are the foes both of social order and national honor.
Those who stand upon the Chicago platform are prepared to make known and
to defend every motive which influences them, every purpose which animates
them, and every hope which inspires them. They understand the genius of
our institutions, they are staunch supporters of the form of government
under which we live, and they build their faith upon foundations laid by
the fathers. Andrew Jackson has stated, with admirable clearness and with
an emphasis which cannot be surpassed, both the duty and the sphere of
government. He said:
“Distinctions in society will always exist under every just government. Equality of talents, of education or of wealth, cannot be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy and virtue, every man is equally entitled to protection by law.”
We yield to none in our devotion to the doctrine just enunciated. Our campaign
has not for its object the reconstruction of society. We cannot insure
to the vicious the fruits of a virtuous life; we would not invade the home
of the provident in order to supply the wants of the spendthrift; we do
not propose to transfer the rewards of industry to the lap of indolence.
Property is and will remain the stimulus to endeavor and the compensation
for toil. We believe, as asserted in the Declaration of Independence, that
all men are created equal; but that does not mean that all men are or can
be equal in possessions, in ability or in merit; it simply means that all
shall stand equal before the law, and that government officials shall not,
in making, construing or enforcing the law, discriminate between citizens.
I assert that property rights, as well as the rights of persons, are safe in the hands of the common people. Abraham Lincoln, in his message sent to Congress in December, 1861, said:
“No men living are more worthy to be trusted than those who toil up from poverty; none less inclined to take or touch aught which they have not honestly earned.”
I repeat his language with unqualified approval, and join with him in the warning which he added, namely:
“Let them beware of surrendering a political power which they already possess,
and which power, if surrendered, will surely be used to close the doors
of advancement against such as they, and to fix new disabilities and burdens
upon them, till all of liberty shall be lost.”
Those who daily follow the injunction, “In the sweat of thy face shalt
thou eat bread,” are now, as they ever have been, the bulwark of law and
order—the source of our nation’s greatness in time of peace, and its surest
defenders in time of war.
But I have only read a part of Jackson’s utterance—let me give you his
conclusion:
“But when the laws undertake to add to those natural and just advantages
artificial distinctions—to grant titles, gratuities and exclusive privileges—to
make the rich richer and the potent more powerful—the humble members of
society—the farmers, mechanics and the laborers—who have neither the time
nor the means of securing like favors for themselves, have a right to complain
of the injustice of their government.”
Those who support the Chicago platform endorse all of the quotation from
Jackson—the latter part as well as the former part.
We are not surprised to find arrayed against us those who are the beneficiaries
of government favoritism—they have read our platform. Nor are we surprised
to learn that we must in this campaign face the hostility of those who
find a pecuniary advantage in advocating the doctrine of non-interference
when great aggregations of wealth are trespassing upon the rights of individuals.
We welcome such opposition—it is the highest endorsement which could be
bestowed upon us. We are content to have the cooperation of those who desire
to have the Government administered without fear or favor. It is not the
wish of the general public that trusts should spring into existence and
override the weaker members of society; it is not the wish of the general
public that these trusts should destroy competition and then collect such
tax as they will from those who are at their mercy; nor is it the fault
of the general public that the instrumentalities of government have been
so often prostituted to purposes of private gain. Those who stand upon
the Chicago platform believe that the government should not only avoid
wrongdoing, but that it should also prevent wrongdoing; and they believe
that the law should be enforced alike against all enemies of the public
weal. They do not excuse petit larceny, but they declare that grand larceny
is equally a crime; they do not defend the occupation of the highwayman
who robs the unsuspecting traveler, but they include among the transgressors
those who, through the more polite and less hazardous means of legislation,
appropriate to their own use the proceeds of the toil of others. The commandment,
“Thou shalt not steal,” thundered from Sinai and reiterated in the legislation
of all nations, is no respecter of persons. It must be applied to the great
as well as to the small; to the strong as well as to the weak; to the corporate
person created by law as well as to the person of flesh and blood created
by the Almighty. No government is worthy of the name which is not able
to protect from every arm uplifted for his injury the humblest citizen
who lives beneath the flag. It follows as a necessary conclusion that vicious
legislation must be remedied by the people who suffer from the effects
of such legislation, and not by those who enjoy its benefits.
The Chicago platform has been condemned by some because it dissents from
an opinion rendered by the Supreme Court declaring the income tax law unconstitutional.
Our critics even go so far as to apply the name anarchist to those who
stand upon that plank of the platform. It must be remembered that we expressly
recognize the binding force of that decision so long as it stands as a
part of the law of the land. There is in the platform no suggestion of
an attempt to dispute the authority of the Supreme Court. The party is
simply pledged to use “all the constitutional power which remains after
that decision, or which may come from its reversal by the Court as it may
hereafter be constituted.” Is there any disloyalty in that pledge? For
a hundred years the Supreme Court of the United States has sustained the
principle which underlies the income tax. Some twenty years ago this same
Court sustained, without a dissenting voice, an income tax law almost identical
with the one recently overthrown. Has not a future court as much right
to return to the judicial precedents of a century as the present Court
had to depart from them? When courts allow rehearings they admit that error
is possible; the late decision against the income tax was rendered by a
majority of one after a rehearing.
While the money question overshadows all other questions in importance,
I desire it distinctly understood that I shall offer no apology for the
income tax plank of the Chicago platform. The last income tax law sought
to apportion the burdens of government more equitably among those who enjoy
the protection of the Government. At present the expenses of the Federal
Government, collected through internal revenue taxes and import duties,
are especially burdensome upon the poorer classes of society. A law which
collects from some citizens more than their share of the taxes and collects
from other citizens less than their share is simply an indirect means of
transferring one man’s property to another man’s pocket, and, while the
process may be quite satisfactory to the men who escape just taxation,
it can never be satisfactory to those who are overburdened. The last income
tax law, with its exemption provisions, when considered in connection with
other methods of taxation in force, was not unjust to the possessors of
large incomes, because they were not compelled to pay a total Federal tax
greater than their share. The income tax is not new, nor is it based upon
hostility to the rich. The system is employed in several of the most important
nations of Europe, and every income tax law now upon the statute books
in any land, so far as I have been able to ascertain, contains an exemption
clause. While the collection of an income tax in other countries does not
make it necessary for this Nation to adopt the system, yet it ought to
moderate the language of those who denounce the income tax as an assault
upon the well-to-do.
Not only shall I refuse to apologize for the advocacy of an income tax
law by the National Convention, but I shall also refuse to apologize for
the exercise by it of the right to dissent from a decision of the Supreme
Court. In a government like ours every public official is a public servant,
whether he holds office by election or by appointment, whether he serves
for a term of years or during good behavior, and the people have a right
to criticize his official acts. “Confidence is everywhere the parent of
despotism; free government exists in jealousy and not in confidence”—these
are the words of Thomas Jefferson, and I submit that they present a truer
conception of popular government than that entertained by those who would
prohibit an unfavorable comment upon a court decision. Truth will vindicate
itself; only error fears free speech. No public official who conscientiously
discharges his duty as he sees it will desire to deny to those whom he
serves the right to discuss his official conduct.
Now let me ask you to consider the paramount. question of this campaign—the
money question. It is scarcely necessary to defend the principle of bimetalism.
No national party during the entire history of the United States has ever
declared against it, and no party in this campaign has had the temerity
to oppose it. Three parties—the Democratic, Populist and Silver parties—have
not only declared for bimetalism, but have outlined the specific legislation
necessary to restore silver to its ancient position by the side of gold.
The Republican platform expressly declares that bimetalism is desirable
when it pledges the Republican party to aid in securing it as soon as the
assistance of certain foreign nations can be obtained. Those who represented
the minority sentiment in the Chicago Convention opposed the free coinage
of silver by the United States by independent action, on the ground that,
in their judgment, it “would retard or entirely prevent the establishment
of international bimetalism, to which the efforts of the Government should
be steadily directed.” When they asserted that the efforts of the Government
should be steadily directed toward the establishment of international bimetalism,
they condemned monometalism. The gold standard has been weighed in the
balance and found wanting. Take from it the powerful support of the money-owning
and the money-changing classes and it cannot stand for one day in any nation
in the world. It was fastened upon the United States without discussion
before the people, and its friends have never yet been willing to risk
a verdict before the voters upon that issue.
There can be no sympathy or cooperation between the advocates of a universal
gold standard and the advocates of bimetalism. Between bimetalism—whether
independent or international—and the gold standard there is an impassable
gulf. Is this quadrennial agitation in favor of international bimetalism
conducted in good faith, or do our opponents really desire to maintain
the gold standard permanently? Are they willing to confess the superiority
of a double standard when joined in by the leading nations of the world,
or do they still insist that gold is the only metal suitable for standard
money among civilized nations? If they are in fact desirous of securing
bimetalism, we may expect them to point out the evils of a gold standard
and defend bimetalism as a system. If, on the other hand, they are bending
their energies toward the permanent establishment of a gold standard under
cover of a declaration in favor of international bimetalism, I am justified
in suggesting that honest money cannot be expected at the hands of those
who deal dishonestly with the American people.
What is the test of honesty in money? It must certainly be found in the
purchasing power of the dollar. An absolutely honest dollar would not vary
in its general purchasing power; it would be absolutely stable when measured
by average prices. A dollar which increases in purchasing power is just
as dishonest as a dollar which decreases in purchasing power. Prof. Laughlin,
now of the University of Chicago, and one of the highest gold-standard
authorities, in his work on bimetalism not only admits that gold does not
remain absolutely stable in value, but expressly asserts “that there is
no such thing as a standard of value for future payments, either in gold
or silver, which remains absolutely invariable.” He even suggests that
a multiple standard, wherein the unit is “based upon the selling prices
of a number of articles of general consumption,” would be a more just standard
than either gold or silver, or both, because “a long time contract would
thereby be paid at its maturity by the same purchasing power as was given
in the beginning.”
It cannot be successfully claimed that monometalism or bimetalism, or any
other system, gives an absolutely just standard of value. Under both monometalism
and bimetalism the Government fixes the weight and fineness of the dollar,
invests it with legal tender qualities, and then opens the mints to its
unrestricted coinage, leaving the purchasing power of the dollar to be
determined by the number of dollars. Bimetalism is better than monometalism,
not because it gives us a perfect dollar—that is, a dollar absolutely unvarying
in its general purchasing power—but because it makes a nearer approach
to stability, to honesty, to justice, than a gold standard possibly can.
Prior to 1873, when there were enough open mints to permit all the gold
and silver available for coinage to find entrance into the world’s volume
of standard money, the United States might have maintained a gold standard
with less injury to the people of this country; but now, when each step
toward a universal gold standard enhances the purchasing power of gold,
depresses prices, and transfers to the pockets of the creditor class an
unearned increment, the influence of this great nation must not be thrown
upon the side of gold unless we are prepared to accept the natural and
legitimate consequences of such an act. Any legislation which lessens the
world’s stock of standard money increases the exchangeable value of the
dollar; therefore, the crusade against silver must inevitably raise the
purchasing power of money and lower the money value of all other forms
of property.
Our opponents sometimes admit that it was a mistake to demonetize silver,
but insist that we should submit to present conditions rather than return
to the bimetalic system. They err in supposing that we have reached the
end of the evil results of a gold standard; we have not reached the end.
The injury is a continuing one, and no person can say how long the world
is to suffer from the attempt to make gold the only standard money. The
same influences which are now operating to destroy silver in the United
States will, if successful here, be turned against other silver-using countries,
and each new convert to the gold standard will add to the general distress.
So long as the scramble for gold continues, prices must fall, and a general
fall in prices is but another definition of hard times.
Our opponents, while claiming entire disinterestedness for themselves,
have appealed to the selfishness of nearly every class of society. Recognizing
the disposition of the individual voter to consider the effect of any proposed
legislation upon himself, we present to the American people the financial
policy outlined in the Chicago platform, believing that it will result
in the greatest good to the greatest number.
The farmers are opposed to the gold standard because they have felt its
effects. Since they sell at wholesale and buy at retail they have lost
more than they have gained by falling prices, and, besides this, they have
found that certain fixed charges have not fallen at all. Taxes have not
been perceptibly decreased, altough it requires more of farm products now
than formerly to secure the money with which to pay taxes. Debts have not
fallen. The farmer who owed $1,000 is still compelled to pay $1,000, although
it may be twice as difficult as formerly to obtain the dollars with which
to pay the debt. Railroad rates have not been reduced to keep pace with
falling prices, and besides these items there are many more. The farmer
has thus found it more and more difficult to live. Has he not a just complaint
against the gold standard?
The wage earners have been injured by a gold standard, and have expressed themselves upon the subject with great emphasis. In February, 1895, a petition asking for the immediate restoration of the free and unlimited coinage of gold and silver at 16 to 1 was signed by the representatives of all, or nearly all, the leading labor organizations and presented to Congress. Wage-earners know that while a gold standard raises the purchasing power of the dollar, it also makes it more difficult to obtain possession of the dollar; they know that employment is less permanent, loss of work more probable, and reemployment less certain. A gold standard encourages the hoarding of money, because money is rising; it also discourages enterprise and paralyzes industry. On the other hand, the restoration of bimetalism will discourage hoarding because, when prices are steady or rising, money cannot afford to lie idle in the bank vaults. The farmers and wage-earners together constitute a considerable majority of the people of the country. Why should their interests be ignored in considering financial legislation? A monetary system which is pecuniarily advantageous to a few syndicates has far less to commend it than a system which would give hope and encouragement to those who create the nation’s wealth.
Our opponents have made a special appeal to those who hold fire and life
insurance policies, but these policy-holders know that, since the total
premiums received exceed the total losses paid, a rising standard must
be of more benefit to the companies than to the policy-holders.
Much solicitude has been expressed by our opponents for the depositors in savings banks. They constantly parade before these depositors the advantages of a gold standard, but these appeals will be in vain, because savings bank depositors know that under a gold standard there is increasing danger that they will lose their deposits because of the inability of the banks to collect their assets; and they still further know that, if the gold standard is to continue indefinitely, they may be compelled to withdraw their deposits in order to pay living expenses.
It is only necessary to note the increasing number of failures in order
to know that a gold standard is ruinous to merchants and manufacturers.
These business men do not make their profits from the people from whom
they borrow money, but from the people to whom they sell their goods. If
the people cannot buy, retailers cannot sell, and, if retailers cannot
sell, wholesale merchants and manufacturers must go into bankruptcy.
Those who hold, as a permanent investment, the stock of railroads and of
other enterprises—I do not include those who speculate in stocks or use
stock holdings as a means of obtaining an inside advantage in construction
contracts—are injured by a gold standard. The rising dollar destroys the
earning power of these enterprises without reducing their liabilities,
and, as dividends cannot be paid until salaries and fixed charges have
been satisfied, the stockholders must bear the burden of hard times.
Salaries in business occupations depend upon business conditions, and the
gold standard both lessens the amount and threatens the permanency of such
salaries.
Official salaries, except the salaries of those who hold office for life,
must, in the long run, be adjusted to the conditions of those who pay the
taxes, and if the present financial policy continues we must expect the
contest between the taxpayer and the tax-eater to increase in bitterness.
The professional classes—in the main—derive their support from the producing
classes, and can only enjoy prosperity when there is prosperity among those
who create wealth.
I have not attempted to describe the effect of the gold standard upon all classes—in fact, I have only had time to mention a few—but each person will be able to apply the principles stated to his own occupation.
It must also be remembered that it is the desire of people generally to
convert their earnings into real or personal property. This being true,
in considering any temporary advantage which may come from a system under
which the dollar rises in its purchasing power, it must not be forgotten
that the dollar cannot buy more than formerly unless property sells for
less than formerly. Hence, it will be seen that a large portion of those
who may find some pecuniary advantage in a gold standard will discover
that their losses exceed their gains.
It is sometimes asserted by our opponents that a bank belongs to the debtor
class, but this is not true of any solvent bank. Every statement published
by a solvent bank shows that the assets exceed the liabilities. That is
to say, while the bank owes a large amount of money to its depositors,
it not only has enough on hand in money and notes to pay its depositors,
but, in addition thereto, has enough to cover its capital and surplus.
When the dollar is rising in value slowly, a bank may, by making short-time
loans and taking good security, avoid loss; but when prices are falling
rapidly, the bank is apt to lose more because of bad debts than it can
gain by the increase in the purchasing power of its capital and surplus.
Some bankers, however, combine the business of a bond broker with the ordinary
banking business, and these may make enough in the negotiation of loans
to offset the losses arising in legitimate banking business. As long as
human nature remains as it is, there will always be danger that, unless
restrained by public opinion or legal enactment, those who see a pecuniary
profit for themselves in a certain condition may yield to the temptation
to bring about that condition. Jefferson has stated that one of the main
duties of government is to prevent men from injuring one another, and never
was that duty more important than it is to-day. It is not strange that
those who have made a profit by furnishing gold to the Government in the
hour of its extremity favor a financial policy which will keep the Government
dependent upon them. I believe, however, that I speak the sentiment of
the vast majority of the people of the United States when I say that a
wise financial policy administered in behalf of all the people would make
our Government independent of any combination of financiers, foreign or
domestic.
Let me say a word, now, in regard to certain persons who are pecuniarily
benefited by a gold standard, and who favor it, not from a desire to trespass
upon the rights of others, but because the circumstances which surround
them blind them to the effect of the gold standard upon others. I shall
ask you to consider the language of two gentlemen whose long public service
and high standing in the party to which they belong will protect them from
adverse criticism by our opponents. In 1869 Senator Sherman said:
“The contraction of the currency is a far more distressing operation than
Senators suppose. Our own and other nations have gone through that operation
before. It is not possible to take that voyage without the sorest distress.
To every person, except a capitalist out of debt, or a salaried officer,
or annuitant, it is a period of loss, danger, lassitude of trade, fall
of wages, suspension of enterprise, bankruptcy and disaster. It means ruin
to all dealers whose debts are twice their business capital, though one-third
less than their actual property. It means the fall of all agricultural
production without any great reduction of taxes. What prudent man would
dare to build a house, a railroad, a factory, or a barn with this certain
fact before him?”
As I have said before, the salaried officer referred to must be the man
whose salary is fixed for life, and not the man whose salary depends upon
business conditions. When Mr. Sherman describes contraction of the currency
as disastrous to all the people except the capitalist out of debt and those
who stand in a position similar to his, he is stating a truth which must
be apparent to every person who will give the matter careful consideration.
Mr. Sherman was at that time speaking of the contraction of the volume
of paper currency, but the principle which he set forth applies, if there
is a contraction of the volume of the standard money of the world.
Mr. Blaine discussed the same principle in connection with the demonetization
of silver. Speaking in the House of Representatives on the 7th of February,
1878, he said:
“I believe the struggle now going on in this country and other countries
for a single gold standard would, if successful, produce widespread disaster
in and throughout the commercial world. The destruction of silver as money,
and the establishing of gold as the sole unit of value must have a ruinous
effect on all forms of property, except those investments which yield a
fixed return in money. These would be enormously enhanced in value, and
would gain a disproportionate and unfair advantage over every other species
of property.”
It is strange that the “holders of investments which yield a fixed return
in money” can regard the destruction of silver with complacency. May we
not expect the holders of other forms of property to protest against giving
to money a “disproportionate and unfair advantage over every other species
of property?” If the relatively few whose wealth consists largely in fixed
investments have a right to use the ballot to enhance the value of their
investments, have not the rest of the people the right to use the ballot
to protect themselves from the disastrous consequences of a rising standard?
The people who must purchase money with the products of toil stand in a
position entirely different from the position of those who own money or
receive a fixed income. The well-being of the nation—aye, of civilization
itself—depends upon the prosperity of the masses. What shall it profit
us to have a dollar which grows more valuable every day if such a dollar
lowers the standard of civilization and brings distress to the people?
What shall it profit us if, in trying to raise our credit by increasing
the purchasing power of our dollar, we destroy our ability to pay the debts
already contracted by lowering the purchasing power of the products with
which those debts must be paid? If it is asserted, as it constantly is
asserted, that the gold standard will enable us to borrow more money from
abroad, I reply that the restoration of bimetalism will restore the parity
between money and property, and thus permit an era of prosperity which
will enable the American people to become loaners of money instead of perpetual
borrowers. Even if we desire to borrow, how long can we continue borrowing
under a system which, by lowering the value of property, weakens the foundation
upon which credit rests?
Even the holders of fixed investments, though they gain an advantage from the appreciation of the dollar, certainly see the injustice of the legislation which gives them this advantage over those whose incomes depend upon the value of property and products. If the holders of fixed investments will not listen to arguments based upon justice and equity, I appeal to them to consider the interests of posterity. We do not live for ourselves alone; our labor, our self-denial, and our anxious care—all these are for those who are to come after us as much as for ourselves, but we cannot protect our children beyond the period of our lives. Let those who are now reaping advantage from a vicious financial system remember that in the years to come their own children and their children’s children may, through the operation of this same system, be made to pay tribute to the descendants of those who are wronged to-day.
As against the maintenance of a gold standard, either permanently or until
other nations can be united for its overthrow, the Chicago platform presents
a clear and emphatic demand for the immediate restoration of the free and
unlimited coinage of silver and gold at the present legal ratio of 16 to
1, without waiting for the aid or consent of any other nation. We are not
asking that a new experiment be tried; we are insisting upon a return to
a financial policy approved by the experience of history and supported
by all the prominent statesmen of our nation from the days of the first
President down to 1873. When we ask that our mints be opened to the free
and unlimited coinage of silver into full legal tender money, we are simply
asking that the same mint privileges be accorded to silver that are now
accorded to gold. When we ask that this coinage be at the ratio of 16 to
1, we simply ask that our gold coins and the standard silver dollar—which,
be it remembered, contains the same amount of pure silver as the first
silver dollar coined at our mints—retain their present weight and fineness.
The theoretical advantage of the bimetalic system is best stated by a European
writer on political economy, who suggests the following illustration: A
river fed from two sources is more uniform in volume than a river fed from
one source—the reason being that when one of the feeders is swollen the
other may be low; whereas, a river which has but one feeder must rise or
fall with that feeder. So in the case of bimetalism; the volume of metalic
money receives contributions from both the gold mines and the silver mines,
and therefore varies less, and the dollar resting upon two metals is less
changeable in its purchasing power than the dollar which rests upon one
metal only.
If there are two kinds of money, the option must rest either with the debtor
or with the creditor. Assuming that their rights are equal, we must look
at the interest of society in general in order to determine to which side
the option should be given. Under the bimetalic system gold and silver
are linked together by law at a fixed ratio, and any person or persons
owning any quantity of either metal can have the same converted into full
legal-tender money. If the creditor has the right to choose the metal in
which payment shall be made, it is reasonable to suppose that he will require
the debtor to pay in the dearer metal if there is any perceptible difference
between the bullion values of the metals. This new demand created for the
dearer metal will make that metal dearer still, while the decreased demand
for the cheaper metal will make that metal cheaper still. If, on the other
hand, the debtor exercises the option, it is reasonable to suppose that
he will pay in the cheaper metal if one metal is perceptibly cheaper than
the other; but the demand thus created for the cheaper metal will raise
its price, while the lessened demand for the dearer metal will lower its
price. In other words, when the creditor has the option, the metals are
drawn apart; whereas, when the debtor has the option, the metals are held
together approximately at the ratio fixed by law, provided the demand created
is sufficient to absorb all of both metals presented at the mint. Society
is, therefore, interested in having the option exercised by the debtor.
Indeed, there can be no such thing as real bimetalism unless the option
is exercised by the debtor. The exercise of the option by the debtor compels
the creditor classes, whether domestic or foreign, to exert themselves
to maintain the parity between gold and silver at the legal ratio, whereas
they might find a profit in driving one of the metals to a premium if they
could then demand the dearer metal. The right of the debtor to choose the
coin in which payment shall be made extends to obligations due from the
government as well as to contracts between individuals. A government obligation
is simply a debt due from all the people to one of the people, and it is
impossible to justify a policy which makes the interests of the one person
who holds the obligation superior to the rights of the many who must be
taxed to pay it. When, prior to 1873, silver was at a premium, it was never
contended that national honor required the payment of government obligations
in silver, and the Matthews resolution, adopted by Congress in 1878, expressly
asserted the right of the United States to redeem coin obligations in standard
silver dollars as well as in gold coin.
Upon this subject the Chicago platform reads:
“We are opposed to the policy and practice of surrendering to the holders
of the obligations of the United States the option reserved by law to the
Government of redeeming such obligations in either silver coin or gold
coin.”
It is constantly assumed by some that the United States notes, commonly called greenbacks, and the treasury notes issued under the act of 1890, are responsible for the recent drain upon the gold reserve, but this assumption is entirely without foundation. Secretary Carlisle appeared before the House Committee on Appropriations on January 21, 1895, and I quote from the printed report of his testimony before the committee:
“Mr. Sibley: I would like to ask you (perhaps not entirely connected with
the matter under discussion) what objection there could be to having the
option of redeeming either in silver or gold lie with the Treasury instead
of the note holder?
“Secretary Carlisle: If that policy had been adopted at the beginning of
resumption—and I am not saying this for the purpose of criticizing the
action of any of my predecessors, or anybody else—but if the policy of
reserving to the Government, at the beginning of resumption, the option
of redeeming in gold or silver all its paper presented, I believe it would
have worked beneficially, and there would have been no trouble growing
out of it, but the Secretaries of the Treasury from the beginning of resumption
have pursued a policy of redeeming in gold or silver, at the option of
the holder of the paper, and if any Secretary had afterward attempted to
change that policy and force silver upon a man who wanted gold, or gold
upon a man who wanted silver, and especially if he had made that attempt
at such a critical period as we have had in the last two years, my judgment
is it would have been very disastrous.”
I do not agree with the Secretary that it was wise to follow a bad precedent,
but from his answer it will be seen that the fault does not lie with the
greenbacks and treasury notes, but rather with the executive officers who
have seen fit to surrender a right which should have been exercised for
the protection of the interests of the people. This executive action has
already been made the excuse for the issue of more than $250,000,000 in
bonds, and it is impossible to estimate the amount of bonds which may hereafter
be issued if this policy is continued. We are told that any attempt upon
the part of the Government at this time to redeem its obligations in silver
would put a premium upon gold, but why should it? The Bank of France exercises
the right to redeem all bank paper in either gold or silver, and yet France
maintains the parity between gold and silver at the ratio of 15-1/2 to
1, and retains in circulation more silver per capita than we do in the
United States.
It may be further answered that our opponents have suggested no feasible
plan for avoiding the dangers which they fear. The retirement of the greenbacks
and treasury notes would not protect the Treasury, because the same policy
which now leads the Secretary of the Treasury to redeem all Government
paper in gold, when gold is demanded, will require the redemption of all
silver dollars and silver certificates in gold, if the greenbacks and treasury
notes are withdrawn from circulation. More than this, if the Government
should retire its paper and throw upon the banks the necessity of furnishing
coin redemption, the banks would exercise the right to furnish either gold
or silver. In other words, they would exercise the option, just as the
Government ought to exercise it now. The Government must either exercise
the right to redeem its obligations in silver when silver is more convenient,
or it must retire all the silver and silver certificates from circulation
and leave nothing but gold as legal tender money. Are our opponents willing
to outline a financial system which will carry out their policy to its
legitimate conclusion, or will they continue to cloak their designs in
ambiguous phrases?
There is an actual necessity for bimetalism as well as a theoretical defense
of it. During the last twenty-three years legislation has been creating
an additional demand for gold, and this law-created demand has resulted
in increasing the purchasing power of each ounce of gold. The restoration
of bimetalism in the United States will take away from gold just so much
of its purchasing power as was added to it by the demonetization of silver
by the United States. The silver dollar is now held up to the gold dollar
by legal-tender laws and not by redemption in gold, because the standard
silver dollars are not now redeemable in gold either in law or by administrative
policy.
We contend that free and unlimited coinage by the United States alone will
raise the bullion value of silver to its coinage value, and thus make silver
bullion worth $1.29 per ounce in gold throughout the world. This proposition
is in keeping with natural laws, not in defiance of them. The best known
law of commerce is the law of supply and demand. We recognize this law
and build our argument upon it. We apply this law to money when we say
that a reduction in the volume of money will raise the purchasing power
of the dollar; we also apply the law of supply and demand to silver when
we say that a new demand for silver created by law will raise the price
of silver bullion. Gold and silver are different from other commodities,
in that they are limited in quantity. Corn, wheat, manufactured products,
etc., can be produced almost without limit, provided they can be sold at
a price sufficient to stimulate production, but gold and silver are called
precious metals because they are found, not produced. These metals have
been the objects of anxious search as far back as history runs, yet, according
to Mr. Harvey’s calculation, all the gold coin of the world can be melted
into a 22-foot cube and all the silver coin in the world into a 66-foot
cube. Because gold and silver are limited, both in the quantity now in
hand and in annual production, it follows that legislation can fix the
ratio between them. Any purchaser who stands ready to take the entire supply
of any given article at a certain price can prevent that article from falling
below that price. So the Government can fix a price for gold and silver
by creating a demand greater than the supply. International bimetalists
believe that several nations, by entering into an agreement to coin at
a fixed ratio all the gold and silver presented, can maintain the bullion
value of the metals at the mint ratio. When a mint price is thus established,
it regulates the bullion price, because any person desiring coin may have
the bullion converted into coin at that price, and any person desiring
bullion can secure it by melting the coin. The only question upon which
international bimetalists and independent bimetalists differ is: Can the
United States, by the free and unlimited coinage of silver at the present
legal ratio, create a demand for silver which, taken in connection with
the demand already in existence, will be sufficient to utilize all the
silver that will be presented at the mints? They agree in their defense
of the bimetalic principle, and they agree in unalterable opposition to
the gold standard. International bimetalists cannot complain that free
coinage gives a benefit to the mine owner, because international bimetalism
gives to the owner of silver all the advantages offered by independent
bimetalism at the same ratio. International bimetalists cannot accuse the
advocates of free silver of being “bullion owners who desire to raise the
value of their bullion”; or “debtors who desire to pay their debts in cheap
dollars”; or “demagogues who desire to curry favor with the people.” They
must rest their opposition upon one ground only, namely: that the supply
of silver available for coinage is too large to be utilized by the United
States.
In discussing this question we must consider the capacity of our people
to use silver, and the quantity of silver which can come to our mints.
It must be remembered that we live in a country only partially developed,
and that our people far surpass any equal number of people in the world
in their power to consume and produce. Our extensive railroad development
and enormous internal commerce must also be taken into consideration. Now,
how much silver can come here? Not the coined silver of the world, because
almost all of it is more valuable at this time in other lands than it will
be at our mints under free coinage. If our mints are opened to free and
unlimited coinage at the present ratio, merchandise silver cannot come
here, because the labor applied to it has made it worth more in the form
of merchandise than it will be worth at our mints. We cannot even expect
all of the annual product of silver, because India, China, Japan, Mexico,
and all the other silver-using countries must satisfy their annual needs
from the annual product; the arts will require a large amount, and the
gold standard countries will need a considerable quantity for subsidiary
coinage. We will be required to coin only that which is not needed elsewhere;
but, if we stand ready to take and utilize all of it, other nations will
be compelled to buy at the price which we fix. Many fear that the opening
of our mints will be followed by an enormous increase in the annual production
of silver. This is conjecture. Silver has been used as money for thousands
of years, and during all that time the world has never suffered from an
over-production. If, for any reason, the supply of gold or silver in the
future ever exceeds the requirements of the arts and the needs of commerce,
we confidently hope that the intelligence of the people will be sufficient
to devise and enact any legislation necessary for the protection of the
public. It is folly to refuse to the people the money which they now need
for fear they may hereafter have more than they need. I am firmly convinced
that by opening our mints to the free and unlimited coinage at the present
ratio we can create a demand for silver which will keep the price of silver
bullion at $1.29 per ounce, measured by gold.
Some of our opponents attribute the fall in the value of silver, when measured
by gold, to the fact that during the last quarter of a century the world’s
supply of silver has increased more rapidly than the world’s supply of
gold. This argument is entirely answered by the fact that, during the last
five years, the annual production of gold has increased more rapidly than
the annual production of silver. Since the gold price of silver has fallen
more during these five years than it ever fell in any previous five years
in the history of the world, it is evident that the fall is not due to
increased production. Prices can be lowered as effectually by decreasing
the demand for an article as by increasing the supply of it, and it seems
certain that the fall in the gold price of silver is due to hostile legislation
and not to natural laws.
In answer to the charge that gold will go abroad under free coinage, it must be remembered that no gold can leave this country until the owner of the gold receives something in return for it which he would rather have. In other words, when gold leaves the country those who formerly owned it will be benefited. There is no process by which we can be compelled to part with our gold against our will, nor is there any process by which silver can be forced upon us without our consent. Exchanges are matters of agreement, and if silver comes to this country under free coinage it will be at the invitation of some one in this country who will give something in exchange for it.
Our opponents cannot ignore the fact that gold is now going abroad in spite
of all legislation intended to prevent it, and no silver is being coined
to take its place. Not only is gold going abroad now, but it must continue
to go abroad as long as the present financial policy is adhered to, unless
we continue to borrow from across the ocean, and even then we simply postpone
the evil, because the amount borrowed, together with interest upon it,
must be repaid in appreciating dollars. The American people now owe a large
sum to European creditors, and falling prices have left a larger and larger
margin between our net national income and our annual interest charge.
There is only one way to stop the increasing flow of gold from our shores,
and that is to stop falling prices. The restoration of bimetalism will
not only stop falling prices, but will—to some extent—restore prices by
reducing the world’s demand for gold. If it is argued that a rise in prices
lessens the value of the dollars which we pay to our creditors, I reply
that, in the balancing of equities, the American people have as much right
to favor a financial system which will maintain or restore prices as foreign
creditors have to insist upon a financial system that will reduce prices.
But the interests of society are far superior to the interests of either
debtors or creditors, and the interests of society demand a financial system
which will add to the volume of the standard money of the world, and thus
restore stability to prices.
Perhaps the most persistent misrepresentation that we have to meet is the
charge that we are advocating the payment of debts in fifty-cent dollars.
At the present time and under present laws a silver dollar, when melted,
loses nearly half its value, but that will not be true when we again establish
a mint price for silver and leave no surplus silver upon the market to
drag down the price of bullion. Under bimetalism silver bullion will be
worth as much as silver coin, just as gold bullion is now worth as much
as gold coin, and we believe that a silver dollar will be worth as much
as a gold dollar.
The charge of repudiation comes with poor grace from those who are seeking
to add to the weight of existing debts by legislation which makes money
dearer, and who conceal their designs against the general welfare under
the euphonious pretense that they are upholding public credit and national
honor.
Those who deny the ability of the United States to maintain the parity
between gold and silver at the present legal ratio without foreign aid
point to Mexico and assert that the opening of our mints will reduce us
to a silver basis and raise gold to a premium. It is no reflection upon
our sister republic to remind our people that the United States is much
greater than Mexico in area, in population, and in commercial strength.
It is absurd to assert that the United States is not able to do anything
which Mexico has failed to accomplish. The one thing necessary in order
to maintain the parity is to furnish a demand great enough to utilize all
the silver which will come to the mints. That Mexico has failed to do this
is not proof that the United States would also fail.
It is also argued that, since a number of the nations have demonetized
silver, nothing can be done until all of those nations restore bimetalism.
This is also illogical. It is immaterial how many or how few nations have
opened mints, provided there are sufficient open mints to furnish a monetary
demand for all the gold and silver available for coinage.
In reply to the argument that improved machinery has lessened the cost
of producing silver, it is sufficient to say that the same is true of the
production of gold, and yet, notwithstanding that, gold has risen in value.
As a matter of fact, the cost of production does not determine the value
of the precious metals, except as it may affect the supply. If, for instance,
the cost of producing gold should be reduced ninety per cent. without any
increase in the output, the purchasing power of an ounce of gold would
not fall. So long as there is a monetary demand sufficient to take at a
fixed mint price all the gold and silver produced, the cost of production
need not be considered.
It is often objected that the prices of gold and silver cannot be fixed in relation to each other, because of the variation in the relative production of the metals. This argument also overlooks the fact that, if the demand for both metals at a fixed price is greater than the supply of both, relative production becomes immaterial. In the early part of the present century the annual production of silver was worth, at the coinage ratio, about three times as much as the annual production of gold; whereas, soon after 1849, the annual production of gold became worth about three times as much, at the coinage ratio, as the annual production of silver; and yet, owing to the maintenance of the bimetalic standard, these enormous changes in relative production had but a slight effect upon the relative values of the metals.
If it is asserted by our opponents that the free coinage of silver is intended
only for the benefit of the mine owners, it must be remembered that free
coinage cannot restore to the mine owners any more than demonetization
took away; and it must also be remembered that the loss which the demonetization
of silver has brought to the mine owners is insignificant compared to the
loss which this policy has brought to the rest of the people. The restoration
of silver will bring to the people generally many times as much advantage
as the mine owners can obtain from it. While it is not the purpose of free
coinage to specially aid any particular class, yet those who believe that
the restoration of silver is needed by the whole people should not be deterred
because an incidental benefit will come to the mine owner. The erection
of forts, the deepening of harbors, the improvement of rivers, the erection
of public buildings—all these confer incidental benefits upon individuals
and communities, and yet these incidental benefits do not deter us from
making appropriations for these purposes whenever such appropriations are
necessary for the public good.
The argument that a silver dollar is heavier than a gold dollar, and that,
therefore, silver is less convenient to carry in large quantities, is completely
answered by the silver certificate, which is as easily carried as the gold
certificate or any other kind of paper money.
There are some who, while admitting the benefits of bimetalism, object
to coinage at the present ratio. If any are deceived by this objection
they ought to remember that there are no bimetalists who are earnestly
endeavoring to secure it at any other ratio than 16 to 1. We are opposed
to any change in the ratio for two reasons: first, because a change would
produce great injustice; and, second, because a change in the ratio is
not necessary. A change would produce injustice because, if effected in
the manner usually suggested, it would result in an enormous contraction
in the volume of standard money.
If, for instance, it was decided by international agreement to raise the ratios throughout the world to 32 to 1, the change might be effected in any one of three ways: the silver dollar could be double in size, so that the new silver dollar would weigh thirty-two times as much as the present gold dollar; or the present gold dollar could be reduced one-half in weight, so that the present silver dollar would weigh thirty-two times as much as the new gold dollar; or the change could be made by increasing the size of the silver dollar and decreasing the size of the gold dollar until the new silver dollar would weigh thirty-two times as much as the new gold dollar. Those who have advised a change in the ratio have usually suggested that the silver dollar be doubled. If this change were made it would necessitate the recoinage of four billions of silver into two billions of dollars. There would be an immediate loss of two billions of dollars either to individuals or to the Government, but this would be the least of the injury. A shrinkage of one-half in the silver money of the world would mean a shrinkage of one-fourth in the total volume of metalic money. This contraction, by increasing the value of the dollar, would virtually increase the debts of the world billions of dollars, and decrease still more the value of the property of the world as measured by dollars. Besides this immediate result, such a change in the ratio would permanently decrease the annual addition to the world’s supply of money, because the annual silver product, when coined into dollars twice as large, would make only half as many dollars.
The people of the United States would be injured by a change in the ratio,
not because they produce silver, but because they own property and owe
debts, and they cannot afford to thus decrease the value of their property
or increase the burden of their debts.
In 1878 Mr. Carlisle said:
“Mankind will be fortunate indeed if the annual production of gold and
silver coin shall keep pace with the annual increase of population and
industry.”
I repeat this assertion. All of the gold and silver annually available for coinage, when converted into coin at the present ratio, will not, in my judgment, more than supply our monetary needs.
In supporting the act of 1890, known as the Sherman act, Senator Sherman,
on June 5 of that year, said:
“Under the law of February, 1878, the purchase of $2,000,000 worth of silver
bullion a month has by coinage produced annually an average of nearly $3,000,000
per month for a period of twelve years, but this amount, in view of the
retirement of the bank notes, will not increase our currency in proportion
to our increasing population. If our present currency is estimated at $1,400,000,000,
and our population is increasing at the ratio of 3 per cent. per annum,
it would require $42,000,000 increased circulation each year to keep pace
with the increase of population; but, as the increase of population is
accompanied by a still greater ratio of increase of wealth and business,
it was thought that an immediate increase of circulation might be obtained
by larger purchases of silver bullion to an amount sufficient to make good
the retirement of bank notes and keep pace with the growth of population.
Assuming that $54,000,000 a year of additional currency is needed upon
this basis, that amount is provided for in this bill by the issue of Treasury
notes in exchange for bullion at the market price.”
If the United States then needed more than forty-two millions annually
to keep pace with population and business, it now, with a larger population,
needs a still greater annual addition; and the United States is only one
nation among many. Our opponents make no adequate provision for the increasing
monetary needs of the world.
In the second place, a change in the ratio is not necessary. Hostile legislation has decreased the demand for silver and lowered its price when measured by gold, while this same hostile legislation, by increasing the demand for gold, has raised the value of gold when measured by other forms of property.
We are told that the restoration of bimetalism would be a hardship upon those who have entered into contracts payable in gold coin, but this is a mistake. It will be easier to obtain the gold with which to meet a gold contract, when most of the people can use silver, than it is now when every one is trying to secure gold.
The Chicago platform expressly declares in favor of such legislation as
may be necessary to prevent, for the future, the demonetization of any
kind of legal tender money by private contract. Such contracts are objected
to on the ground that they are against public policy. No one questions
the right of legislatures to fix the rate of interest which can be collected
by law; there is far more reason for preventing private individuals from
setting aside legal tender law. The money which is by law made a legal
tender, must, in the course of ordinary business, be accepted by ninety-nine
out of every hundred persons. Why should the one-hundredth man be permitted
to exempt himself from the general rule? Special contracts have a tendency
to increase the demand for a particular kind of money, and thus force it
to a premium. Have not the people a right to say that a comparatively few
individuals shall not be permitted to derange the financial system of the
nation in order to collect a premium in case they succeed in forcing one
kind of money to a premium?
There is another argument to which I ask your attention. Some of the more
zealous opponents of free coinage point to the fact that thirteen months
must elapse between the election and the first regular session of the next
Congress, and assert that during that time, in case people declare themselves
in favor of free coinage, all loans will be withdrawn and all mortgages
foreclosed. If these are merely prophecies indulged in by those who have
forgotten the provision of the Constitution, it will be sufficient to remind
them that the President is empowered to convene Congress in extraordinary
session whenever the public good requires such action. If, in November,
the people by their ballots declare themselves in favor of the immediate
restoration of bimetalism, the system can be inaugurated within a few months.
If, however, the assertion that loans will be withdrawn and mortgages foreclosed
is made to prevent such political action as the people may believe to be
necessary for the preservation of their rights, then a new and vital issue
is raised. Whenever it is necessary for the people as a whole to obtain
consent from the owners of money and the changers of money before they
can legislate upon financial questions, we shall have passed from a democracy
to a plutocracy. But that time has not yet arrived. Threats and intimidation
will be of no avail. The people who, in 1776, rejected the doctrine that
kings rule by right divine, will not, in this generation subscribe to the
doctrine that money is omnipotent.
In conclusion, permit me to say a word in regard to international bimetalism. We are not opposed to an international agreement looking to the restoration of bimetalism throughout the world. The advocates of free coinage have on all occasions shown their willingness to cooperate with other nations in the reinstatement of silver, but they are not willing to await the pleasure of other governments when immediate relief is needed by the people of the United States, and they further believe that independent action offers better assurance of international bimetalism than servile dependence upon foreign aid. For more than twenty years we have invited the assistance of European nations, but all progress in the direction of international bimetalism has been blocked by the opposition of those who derive a pecuniary benefit from the appreciation of gold. How long must we wait for bimetalism to be brought to us by those who profit by monometalism? If the double standard will bring benefits to our people, who will deny them the right to enjoy those benefits? If our opponents would admit the right, the ability and the duty of our people to act for themselves on all public questions without the assistance and regardless of the wishes of other nations, and then propose the remedial legislation which they consider sufficient, we could meet them in the field of honorable debate; but, when they assert that this nation is helpless to protect the rights of its own citizens, we challenge them to submit the issue to a people whose patriotism has never been appealed to in vain.
We shall not offend other nations when we declare the right of the American
people to govern themselves, and, without let or hindrance from without,
decide upon every question presented for their consideration. In taking
this position, we simply maintain the dignity of seventy million citizens
who are second to none in their capacity for self-government.
The gold standard has compelled the American people to pay an ever-increasing
tribute to the creditor nations of the world—a tribute which no one dares
to defend. I assert that national honor requires the United States to secure
justice for all its citizens as well as do justice to all its creditors.
For a people like ours, blest with natural resources of surpassing richness,
to proclaim themselves impotent to frame a financial system suited to their
own needs is humiliating beyond the power of language to describe. We cannot
enforce respect for our foreign policy so long as we confess ourselves
unable to frame our own financial policy.
Honest differences of opinion have always existed, and ever will exist,
as to the legislation best calculated to promote the public weal; but when
it is seriously asserted that this nation must bow to the dictation of
other nations and accept the policies which they insist upon, the right
of self-government is assailed, and until that question is settled all
other questions are insignificant.
Citizens of New York, I have traveled from the center of the continent to the seaboard that I might, in the very beginning of the campaign, bring you greeting from the people of the West and South and assure you that their desire is not to destroy but to build up. They invite you to accept the principles of a living faith rather than listen to those who preach the gospel of despair and advise endurance of the ills you have. The advocates of free coinage believe that, in striving to secure the immediate restoration of bimetalism, they are laboring in your behalf as well as in their own behalf. A few of your people may prosper under present conditions, but the permanent welfare of New York rests upon the producers of wealth. This great city is built upon the commerce of the nation and must suffer if that commerce is impaired. You cannot sell unless the people have money with which to buy, and they cannot obtain the money with which to buy unless they are able to sell their products at remunerative prices. Production of wealth goes before the exchange of wealth; those who create must secure a profit before they have anything to share with others. You cannot afford to join the money changers in supporting a financial policy which, by destroying the purchasing power of the products of toil, must in the end discourage the creation of wealth.
I ask, I expect, your cooperation. It is true that a few of your financiers would fashion a new figure—a figure representing Columbia, her hands bound fast with fetters of gold and her face turned toward the East, appealing for assistance to those who live beyond the sea—but this figure can never express your idea of this nation. You will rather turn for inspiration to the heroic statue which guards the entrance to your city—a statue as patriotic in conception as it is colossal in proportions. It was the gracious gift of a sister republic and stands upon a pedestal which was built by the American people. That figure—Liberty enlightening the world—is emblematic of the mission of our nation among the nations of the earth. With a government which derives its powers from the consent of the governed, secures to all the people freedom of conscience, freedom of thought and freedom of speech, guarantees equal rights to all, and promises special privileges to none, the United States should be an example in all that is good, and the leading spirit in every movement which has for its object the uplifting of the human race.
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