following affidavit before E. II. English, a notary public at Valley Junction :
" I, James H. Kennedy, now a resident of the town of Sinaloa, Mexico, do sol-
emnly swear that I am an American by birth ; that I served three years in the Seventh
Iowa during the late Civil War ; that I have always been a republican ; that I have
resided in Mexico for twenty-five years ; that I speak the Spanish language as well or
better than 1 now do the English. I have travelled through twenty-four of the
twenty-seven states in Mexico in an official capacity and as an interpreter for numer-
ous syndicates. I have had access to almost all the archives of that country. I am better
acquainted with the customs and usages of that country than I am of my mother
country. I left Mexico on the 2d day of March, 1896, coming to this country to visit
my friends, relatives, and old comrades. During the last month in Iowa I have heard
more absurd and utterly false statements made in regard to Mexico than I ever thought
could be conjured up by mortal man, all to deceive the voter.
" One most heard is that you can take one American silver dollar into Mexico
and get two Mexican silver dollars for it, or that you can get a 50-cent meal and
throw down an American dollar and they will give you back in change a Mexican
dollar. I brand this as utterly false in every respect, a lie manufactured out of whole
cloth. I assert that a Mexican will not accept an American dollar, either gold, silver,
or paper, for any amount, but will refer you to a broker, where you can sell your
silver dollars as bullion for Mexican money ; then they will trade with you. The
largest hotel in the City of Mexico will not accept American money under any cir-
cumstances, but will invariably refer you to a broker.
" By paying the mintage any one can take silver bullion to either of the mints in
Mexico and get Mexican silver dollars for it, and for two hundred and fifty years
silver bullion has never fluctuated to exceed two cents.
" I hear it asserted that the national debt is payable in gold. I brand this as
utterly false. Every dollar of the debt, $46,000,000, is, and always has been, payable
in the lawful money of that country, and we are now paying our debt in Mexican
silver dollars, the money of the contract.
" I assert that Mexico in the present decade is making strides in advancement
574 ^bc Silver 5tan&ar& in ^ejico.
published by the Milwaukee Sentinel on the 4th of the following Octo-
ber, adding to my name the prefix of " Minister of the Mexican
Republic" in Washington, an official designation which I never use
and which is not correct, because the official name of Mexico is the
" United States of Mexico," not " Mexican Republic."
The following is a copy of my answer to Mr. Fletcher:
" Washington, D. C, September zy, tSgb.
" Mr. Arthur E. Fletcher, Plankim^ton Bank, Milwaukee, Wis. :
" Dear Sir : — I am in receipt of your letter of the 25th instant and in answer
have to inform you that the President's Message, read to the Mexican Congress on the
i6th inst., explains fully the case you mention. Our gold debt, or foreign debt, as
we call it, because all of it is held in Europe, amounts to more than $100,000,000, and
is payable in gold, both interest and principal, and our silver debt, a large portion of
which is held in Europe and some of it in Mexico, is payable in silver, both interest
and principal.
" I doubt very much whether Mexico could pay her whole debt even in silver,
because that would require about $200,000,000, and our revenue is only about $50,-
000,000 and the expenses reach about the same amount, but it might be redeemed by
issuing new bonds with less interest, and that is very likely what will be done by
Mexico at the proper time. I am, very truly yours, M. Romero."
Official DeclaratioTis of Mexico on the Monetary Question. — One of
the objects for which the International American Conference that
assembled in Washington in 1889 and 1890 was convened, under
Act of Congress of May 24, 1888, was (Section 6th) " the adoption of
a common silver coin to be issued by the different Governments, the
same to be legal tender in all commercial transactions between the citi-
zens of all the American States." A committee was therefore ap-
pointed to consider the subject of a Monetary Union, and not being
able to agree upon any project with such purpose in view, because the
United States delegates did not favor any, the committee decided to
recommend the convening of a Special Commission of the American
nations for the purpose, a recommendation which was finally adopted,
because the other American nations considered that the United States
being the largest of the American countries, ought to take the lead,
and the others ought not to act in opposition to its wishes and policy.
greater than any other nation on earth. Twenty-five years ago we had eighty miles
of railroad, now we have near eight thousand miles of railroad. We are building
factories on every hand. Twenty-eight years ago, when the French army was driven
out, the Mexican government was left penniless — not a dollar in the treasury. We
can now pay our entire national debt any day a demand would be made for it.
" 1 am now on my way to Mexico to spend the rest of my life. Any one can find
me by addressing a letter to James H. Kennedy, Sinaloa, Mexico.
" In conclusion, I invite an honest and thorough investigation into the facts of
my statement, and I defy successful contradiction. I am not the owner of mining
stocks and no personal interest has caused me to make this statement, but have given
it by request of an old comrade. James H. Kennedy."
©tRctal Declarations on tbe /IDonetar^ (S^uestion. 575
During the discussion of that report I suggested the adoption of a
common coin by all the American nations, to be legal tender in payment
of all debts, and the coining of a certain amount of silver dollars of the
same weight and fineness, to be issued in proportion to their popula-
tion — for instance, $i for each inhabitant that each country had, — such
dollars to be legal tender for the payment of all debts of all the Ameri-
can nations, redeemable on presentation in gold by the respective
countries and stated the inconveniences that would accrue to Mexico
by the adoption of a common silver coin. '
When the Special Commission of the Monetary Union assembled in
Washington from January 7 to April 4, 1891, it appeared that the
' I expressed on that occasion the willingness of Mexico to agree to a common
silver coin of the same fineness and weight, to be legal tender in all American nations,
if they all should accept that agreement, notwithstanding the great drawbacks that
Mexico would suffer in that case. In the remarks that I made before the Conference
in the meeting of March 27, 1890, when the Monetary Union recommendation was dis-
cussed, I said on the subject what follows :
"It would be difficult for the American nations to agree that the international
silver dollar should have the same fineness and weight as the Mexican dollar, because
in that case they would create a coin of more value than their own. And this would
necessarily have to be depreciated if they should accept the same fineness and weight
as that of the dollar of the United States of America, which is substantially the same
as that of several other of the American States. Then we should have in Mexico two
silver coins ; the international one, with the weight and fineness which should be
agreed upon, and the Mexican one with higher weight and fineness. This difference
in weight and fineness in two coins of the same nominal value, coined in the same
country, could not but cause serious embarrassments. Notwithstanding all this,
Mexico, wishing to contribute as far as it is in her power, and even at the expense of
any reasonable effort, to the unifications of institutions and interests with all the other
American Republics, has been disposed to accept the coinage of an international sil-
ver coin, without undervaluing the fact that any step towards increasing the value of
silver will finally be advantageous to us.
My opinion on the rehabilitation of silver by the United States was expressed in
the following words :
" This gentleman fears that if an international silver dollar should be coined by
all the American nations, that coin would come to the United States to be exchanged
for gold, and that in that way all the gold now in the Treasury should be lost and the
United States be obliged to give up their gold standard and become monometallist.
In my opinion this fear is ungrounded, because the United States buy from the
American nations to the amount of several millions of dollars in raw materials, and
the difference between the amount bought and the American goods exported to those
countries, which is paid by them in cash, could be paid in international silver coin
which they might receive. Besides, we could agree, as the Latin Monetary Union did,
that each American nation should be bound to redeem in gold the international silver
dollar that each might coin. If the basis for coinage should be as the minimum one
dollar per each inhabitant in each country, there should be a demand at once for
i20,f)00,ooo ounces of silver, which would necessarily increase the value of this metal
and have a very great moral influence in the solution of this problem by the other
commercial nations of the world."
576 Tlbe 5ilv>er 5tan^a^^ in ^ejlco.
American delegates would not be in favor of any Monetary Union
among the American nations, and that the only way to overcome the
difficulties of the case was to recommend the meeting of a Monetary
Conference, where all the nations of the world should be represented,
which motion was adopted, and led to the meeting of the Monetary
Conference which assembled at Brussels from November 22d to De-
cember 17th, 1892.
At the fifth meeting of the American International Monetary Com-
mission, which took place on March 30, 1891, I delivered an address
in which I again stated the position of Mexico so far as monetary
matters were concerned, and foreshadowed the same views expressed
in my answer to Senator Morgan, and in my paper published in the
North American Review for June, 1895. That answer will be found
in an appendix to the present paper.
The American countries have different kinds of coin. Venezuela
for instance, has as a monetary unit, the Bolivar, equal to a franc, and
other countries have two kinds of dollars, peso duro, and one of
less value called peso feble, and in each country the dollar has dif-
ferent names. In Ecuador it is called Sucre, in Peru, Sol, in Bolivia,
Boliviajio, and in Brazil, Milreis. The weight and fineness of the sil-
ver dollar varies in almost every one of them : some have 9/10 of silver
and i/io of alloy ; others have less, and others, like Mexico, more
than that proportion, and it would be of great advantage if the coins
of all American nations, by having the same fineness and weight,
should be of the same denomination and value.
Mexican Opitiion Favorable to the Silver Standard. — Everybody in
Mexico, that is, from the educated to the ignorant, from the rich to
the poor, from the natives to the foreigners, and even the bankers '
who in other countries are decidedly favorable to the gold standard,
' This assertion is confirmed by the following extracts from an editorial of the
Mexican Herald, a newspaper published in English in the City of Mexico by very able
American editors, in its issue of November 4, 1897.
" Mexican Bankers and Silver. — Why are our great bankers so loyal to the cause
of silver? Why are they not gold monometalists as are the bankers of England, the
United States, and the continent of Europe ? It is because they are not merely
bankers ; they are heavy investors and directors in new manufacturing industries de-
pendent for their prosperity on the continued use of silver as money in this country.
They take a broader view of the currency situation than do bankers abroad, because
they are factors in a great manufacturing movement, which has for its ultimate purpose
the achieving of Mexico's industrial independence.
" Being something more than lenders of money, they are liberal in their ideas and
are not blinded by prejudice. They can see all sides of the currency question. There
are many able and sagacious men among the bankers of Mexico and they are, with
hardly an exception, bimetallists. They are not trying to make money dear, they are
not wrecking properties, but rather are creating industries.
/IDejican ©pinion ^favorable to tbc Silver 5tan^ar^. 577
are all in favor of silver. The Government holds the same opinion.
As Mexico is now prosperous a large portion of the people attribute
its prosperity to the silver standard and are therefore decidedly favor-
able to the continuance of that standard.
It is not strange that Mexicans think so when prominent and able
foreigners living there hold the same opinion.
Mr. Lionel E. G. Garden, the very able British Consul at the City
of Mexico, who has been in Mexico for nearly eighteen years and
understands the country well, has expressed official views on this
subject which go much further than my own. He holds that, while
the first effects of the depreciation of silver on the Mexican Govern-
ment and on the Mexican railroads were unfavorable, the ultimate result
will be beneficial and will tend to increase the country's agricultural
resources and consequently the republic's export trade, provided that a
price shall be arrived at not subject to fluctuations; and that the greatest
disadvantages that the Mexican Government and the railways suffer
from the depreciation are therefore the constant fluctuations in the
market price of silver. Mr. Garden's views appear in a report on the
effect of the depreciation of silver in Mexico, addressed to Lord
Rosebery on August 4, 1893.'
' It would occupy too much space to give here the chief portions of Mr. Garden's
report, and I will only insert, therefore some of its main points :
" A low price of silver," Mr. Garden says, " if permanent, would not only not be
prejudicial to Mexico as a whole, but would conduce to its ultimate benefit by the
stimulus it would afford to the development of its immense agricultural resources."
His conclusions are that " the losses which would be sustained by the government and
the railway companies are essentially limited in their amount, the benefits which
would accrue to certain of the productive industries are susceptible of indefinite ex-
tension," and that such extension would " at once make itself felt in an increase in the
revenues of the government as well as of the railways."
The reasoning by which these interesting conclusions are supported is somewhat
too extensive for full quotation here. Mr. Garden's report is supplemented by ex-
haustive tabulations of the statistics on which he formed his views. He points out
that the fall in the exchange value of the Mexican silver dollar from 2>ld. (its average
for some years) to about 33^/. (the present level), involved an additional loss to the
government of al)out $2,000,000 in meeting the gold payment on its external debt,
while to make good the effect of the silver depreciation on the indebtedness of the
railroads on which gold must be paid, the lines would have to increase their earnings
by over 23 per cent. At the same time it is figured out that an increase in the premium
on gold from 30 per cent, to 50 per cent, produces, all other things being equal, a loss
of 10 per cent, in customs duties to the Government.
Goming to the other and more favorable side of this question, Mr. Garden con-
tends that the fall in silver would be accompanied by an increase in the purchasing
power of the country. The amount of foreign goods imported depends chiefly, he
argues, on the number of dollars available for the purchase of such goods, which, in
its turn, depends upon the general prosperity of the country. As the present year,
i8g3, promises well for the agricultural interests, there are good grounds for expecting
that the consequent increased movement of trade will to some extent compensate the
578 Zbc Silver Stan^ar^ In /IDcrico.
Mr. Garden in a later report to the Foreign Office on the trade
of Mexico in 1895 attributes to the depreciation of silver the expansion
of that trade and of the general prosperity of the country, as follows:
" This favorable condition of things must he attributed in great measure to the
stimulus afforded to the development of the agricultural resources of the country by
the depreciation of silver, which, far from being prejudicial, has proved to be of the
greatest benefit to Mexico, as 1 predicted it would in my report on that subject of
August, 1893."
I will give now some of the reasons that Mexico has to be so far
favorable to the silver standard and not to lose all hope that silver
may yet be reinstated as a money metal by the great commercial
nations of the world.
T/ic Natural Ratio and the World's Production of Precious Metals.
— We have not yet lost all hope of the rehabilitation of silver as one of
the money metals of the world, because, although modern machinery
and improved methods have cheapened the production of silver, the
same causes, and especially the discovery of new and rich gold fields,
like South Africa and the Klondike, have increased very largely the
proportions of the production of gold.
I will enter into some details on this subject to show that the position
of Mexico is not entirely destitute of foundation and sound reason.
loss arising from the fall in value of the silver dollar. Supposing this fall should con-
tinue — as is most likely to be the case when the Sherman act is repealed — the develop-
ment of agricultural enterprise and the increased movement of trade will have to be
considerable to ofTset the loss in revenue of the government. Mr. Garden thinks that
in four years that movement may increase to the extent of from 10 per cent, to 15 per
cent. Then there has been a notable increase in the exports, not only in amount, but
also in the silver value of these articles, the selling price of which, being in gold, is
improved by a rise in exchange. Calculated at 60 per cent, premium as regards the
gold values (t.^., taking the silver dollar at 30^/.), the exports in 1891-92 would show
an increase of $21,897,522 over those of 1889-90. This calculation shows that what
would be gained by the increased gold value of the exports more than covers
what would be lost in connection with the greater silver cost of the imports ; that is to
say, the increased purchasing power of $16,599,800, which a gold premium of 60 per
cent, would require, would be met by an increaseof $21,897,522 in thevalueof the ex-
ports. As stocks of merchandise on hand were then considerably reduced, Mr. Garden
thought the commercial classes would not suffer much actual loss by a further fall of
silver, provided it were fixed and permanent, and that prices would soon adapt them-
selves to the altered condition of exchange. The railways, he thought, would find
compensation in the ordinary development of their traffic and by the opening up of new
traffic for export, while, as for the silver mining enterprise, which is an important factor
in Mexico, the profits are not affected by a reduction in the gold value of silver, while
the increase in the cost of supplies imported from abroad is offset by the very general
existence of a small proportion of gold in the silver ores. On the other hand, a de-
preciation of silver would greatly stimulate the mining of gold, copper, and the base
metals.
IRatural IRatio an& TKIlorl&'3 lPrc&uction of Silver. 579
Among the advocates of gold monometallism, and I am not speak-
ing of the intelligent advocates of a single standard, it is commonly
said that the reason why most of the nations of civilization have de-
monetized silver is its excessive production of late years as compared
with gold. They always declared that silver is mined so abundantly
and so cheaply by modern processes that it has become useless except
as token money. But the facts regarding production do not bear out
this assertion. Silver, as I will show by unimpeachable statistical
authority, is not produced in excess at the present time.
It used to be affirmed that, to preserve the parity of exchange be-
tween gold and silver, the production of the latter should be as sixteen
ounces to one of the former. But since the discovery, in the middle
of our century, of the Australian and Californian gold-fields, the
output of the yellow metal has been excessive, and that of silver, as
Mulhall, the statistician, points out, relatively short. If, he urges,
i\iQ production of the two metals determined their value, silver should
be worth at present jj />^r cent, more than in iS^o, for from 1850 to
the close of 1894 the production of silver, in weight, has been, ap-
proximately, but twelve times that of gold — 93,714 tons of silver to
8108 of gold.
But the depreciation of silver has been more than 50 per cent., for
it sold in London in 1850 at do-^ pence an ounce, and to-day it ranges
below 28 pence!
The silver production of the world from 1850 to the beginning of
1895 was as follows:
SILVER. VALUE.
Tons. Millions of £.
United States 30,350 226
Mexico 29,910 217
South America i3,4io 103
Other Countries 20,044 156
Total 93.714 702
The annual average output of silver at the present time is 5,000
tons, and it is interesting to bear in mind that, in twenty years, from
1850 down to 1870, the average production was only 1050 tons yearly.
Taking this fact in connection with its demonetization and the decline
of silver in value is explained. There are some curious facts regarding
the precious metals, and the following table shows that the world's
stock of silver, as compared with gold, was in 1848 as 32 to 1, whereas
at present it is less than 20 to i. The world has taken advantage of
the increasing supply of gold to employ it more extensively in money.
58o
XTbe Silver Sta^^ar^ in /IDejico,
THE WORLD S STOCK OF THE MONEY METALS.
YKAK. Coined.
1800 908
1848 1,125
1894 5,840
YEAR. Coined.
1800 42,000
1848 45,200
1894 92,000
GOLl>. TONS.
Uncoined.
Total.
1,822
2,730
2,450
3.575
3,460
9,300
SILVER. TONS.
Uncoined.
Total.
46,000
88,000
67.800
113,000
89,000
181,000
These figures show how, relatively, gold has outdistanced silver ;
how slight, in comparison, has been the increase in the world's stock
of silver to that of its stock of gold.
And while gold is being mined in a ratio to silver far beyond the
averages of former years, the arts are taking up a large proportion of
the product. In 1894, the gold mined was 273 tons, and Soetbeer
estimates, on a carefully ascertained mass of data, that 100 tons are
yearly absorbed in the arts. Silver is being mined at the rate of 5000
tons a year, and 500 tons are consumed in the arts. And, although
as silver declines in price the manufacturing use of it increases, it re-
mains a fact that a vastly greater proportion than of gold is available
for monetary use.
Mr. Francis B. Forbes, of Boston, a careful student of the currency
question, has taken the trouble to compile a series of tables of great
value, and, incidentally, he confirms Mulhall's statistics, which I have
just given, demonstrating indubitably that silver is not being produced
in excess of a just ratio to gold.
TABLE A. world's PRODUCTION OF GOLD AND SILVER, 1493-1896.
Total production, 50 years, 1801-1850. ,
Total production, 25 years, 1851-1875.,
Total production, 21 years, 1876- 1896..
Total production, 96 years, 1801-1896.,
Add total production from discovery of
America by Columbus to beginning
of this century, according to best
estimates, 308 years, 1493-1800 4,633,583
GOLD.
SILVER.
WEIGHT
Kilograms.
Kilograms.
Ratio of
Silver.
118,487
3.272,345
27.6
4,775,625
31,003,825
6.5
3.991,614
70,841,365
17.7
8,885,726
105,117,535
II. 8
Aggregate production, 404 years, 1493-
i8q6 13.519.309
146,554.405 31.6
251,671,940 18.6
IRatural IRatlo ant) Morl&'s ipro^uction.
581
TABLE B, WORLD S ANNUAL PRODUCTION OF GOLD AND SILVER
FOR THE ELEVEN YEARS, 1 886-1 896.
GOLD. SILVER. WEIGHT.
Product. Product. Ratio of
YEARS. Kilograms. Kilograms. Silver.
18S6 159,735 2,901,826 18.2
1887 159,150 2,989,732 18.8
188S 165.803 3,384,865 20.4