Thomas B. (Thomas Brackett) Reed.

Modern eloquence; (Volume 11) online

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constantly reducing prices there ; and there is a reaction on
prices here, which continue to fall and fall.

Now, Mr. Speaker, I think if gentlemen will take pains
to inquire into the state of public feeling on this subject,
and especially as to the feeling existing in agricultural com-
munities throughout the West, they will ascertain the fact
that these people believe we ought to have a large increase
in the circulating medium, and they believe that this in-
crease ought to be based upon something that is permanent,
something that is constitutional, that is legal, and that the
experience of the past warrants us in resorting to.

The statement is made that they desire a large increase
in the circulating medium ; they believe that the most prac-
tical mode of getting that increase is by the use of silver
and by its free coinage ; and that statement comes from an
organization that cannot be denounced on this floor as
"lobbyists," and you may go into Iowa, and Wisconsin,
and Michigan, and you may go into Illinois, Indiana, into
Missouri, into Kansas, leaving all the Southern country
out, and find that the same sentiment prevails, the same
demand is being heard, and I have not yet read a single
resolution passed by the farmers in all of these states upon
the currency question in which they have not directly de-
manded the free coinage of silver. The gentleman from
Iowa and other gentlemen can denominate them as lobby-
ists if they please; they are not interested in the question
as silver men or silver bullion holders. They are interested
in the increased circulation of the volume of money in this
country, and they are interested in that direction to have
good money in circulation which is silver.

From 1792 to 1873 we had that system of money which
the Senate bill will reestablish. We tried it in this country
for over eighty years. It is no experiment, then, because


we know its results; but, simply because of the fact that
Congress saw fit in 1873 to suspend the coinage of the
standard silver dollar, and because gentlemen who desire to
collect from the people, the taxpayers of this country, an
enormous tribute in the way of low prices and high money,
because they are demanding gold and gold only, we are to
surrender the history of the past, and we are to surrender
one of the money metals of the world to accommodate a
few Shylocks in America. Mr. Speaker, I hope it will not
be the pleasure of the House to agree to such a proposition.

As I stated before, when this question was under dis-
cussion the act of 1878 when the question was discussed
in the House and acted upon, had we settled it then as we
ought to have settled it, we would have had no silver ques-
tion with us to-day. Now the opportunity is presented to
us to remedy the evil. Now again is the opportunity offered
to do right by repealing virtually the laws that demonetized
silver, and rehabilitate it in its proper position as a money
metal in this country.

How shall it be done? The Committee on Coinage,
Weights, and Measures have recommended non-concurrence
in the Senate amendments to the House bill. They insist
upon the passage of the House bill without amendment.
They insist upon a bill that in reality makes a commodity
of silver. They insist upon a bill that provides for the pur-
chasing of silver bullion at its market rates four and a half
millions per month and the issuance of certificates upon
the bullion, redeemable in coin, or in silver bullion, at the
discretion of the Secretary of the Treasury. I had occa-
sion, Mr. Speaker, to allude to this bill when it was being
considered before, and to call attention to the fact that it
was a departure from all past history with regard to the use
of gold and silver as money in this country. I called atten-
tion to the fact that under the Constitution Congress was
given the sole power to coin money and to regulate the value
thereof and of foreign coins; that no state could make any-
thing but gold and silver a legal tender in the payment of
debts. It was contemplated by the framers of the Consti-
tution that Congress should coin the money, gold and
silver. But this bill, if enacted into a law, makes silver
bullion not a subject for coinage, except that part of it


which, it is claimed, may be necessary to redeem the notes.
But it also provides that the notes may be redeemed in the
bullion itself on deposit, and thus afford an opportunity of
expanding or contracting the currency of the country at
the will of the "speculators" the gentleman from Iowa
a moment ago alluded to. Now, if there have been organ-
ized combinations or syndicates of individuals for the pur-
pose of speculating in silver bullion, having that object in
view, it must have been in contemplation of the passage of
this House bill, because that opened the doors to the widest
speculation in silver bullion. To-day, for instance, you
may have $10,000,000 of bullion under this bill in the
treasury, to-morrow not $1,000,000 not a dollar, not a
cent. You put silver bullion into the treasury at one door
and issue notes upon it, and then go right straight to the
next door and take the whole of it out. You may have
$100,000,000 in the treasury four or five years from now,
and under the bill, in the discretion of the Secretary of the
treasury (to enable the speculators to speculate and realize
fortunes in silver bullion) you may turn it out daily to the
amount of $50,000,000, until it is all gone, if he sees proper.
So the bill as it passed the House was an invitation to the
formation of these syndicates, and gentlemen who desire to
speculate in silver bullion ; and the doors would have been
open wide if the Senate had agreed to the House bill.

But there are other objections to it, Mr. Speaker. As
I stated before, it is a departure from all the traditions,
from all the principles, of bimetalism. It measures silver
by gold, and gold only, in the purchase of the bullion. It
measures the amount of certificates that may be in circula-
tion upon the gold value of the bullion. In other words,
there can be no bimetalism under that system. The bill
provides that the notes, when issued, shall not exceed in
circulation the cost of the bullion, or, in other words, that
you will not be permitted to have in circulation in this
country the coinage value of the bullion, but only its gold
value. Thus, practically, you fix the market rate of the
two metals as the ratio of issuing money, instead of that
established by law fixing the legal ratio as we have it to-day
at sixteen to one. Now, if the bill provided that the bul-
lion should be purchased at its market rate, and that the


notes outstanding should not be less than the market rates
of the bullion on hand, nor exceeding the coinage value,
you would then keep up the legal ratio. The Secretary of
the Treasury would have some discretion, possibly, but you
would have the power to issue notes up to the coining value
of the bullion ; whereas, under this bill the Secretary of the
Treasury is absolutely prohibited from keeping in circula-
tion a dollar in notes beyond the gold value of the bullion
deposited. Now, in that I say we establish a new ratio of
issuing money on silver. We depart from the ratio of six-
teen to one entirely. We issue notes upon the silver bul-
lion at the gold value of the bullion, and not upon its
coining value. Now, the present law and I want to call
gentlemen's attention particularly to that, because it is an
important part of the discussion of this bill the present
law provides for the purchase of the bullion, but it also
compels the coinage of that bullion into standard dollars of
4 12 /^ grains, which are a legal tender, and on this coin
a note is issued, so that under the present law we have a
circulation equal to the coining value of all the bullion pur-
chased. In other words, we maintain the ratio between the
two metals, that ratio being sixteen to one (or 15.98 more
correctly speaking), and in the issuing of the money and
putting it in circulation we recognize that legal ratio be-
tween gold and silver, and maintain it. Under this bullion
bill, that is the House bill, we depart from it, and we not
only purchase the bullion at its market rate, but we pro-
hibit the issuing of money upon it except at its gold value,
thus permanently fixing for this country the gold standard,
and the gold standard alone, whereas the present law is a
modification of the gold standard. It is a modification of
the gold standard in so far as we issue silver and put it in
circulation at a fixed ratio of sixteen to one, and every
silver dollar that is a legal tender for every debt, public and
private, at the ratio of sixteen to one, comes into competi-
tion with the gold dollar, and to that extent competes with
the gold dollar and maintains the ratio between the two.
But this House bill, and all the bullion propositions that
I have seen yet, depart from that ratio, an important mat-
ter to be considered by this House, and one that must be
considered by the Senate if we undertake to get up a con-


ference committee. It is an important matter for those in
favor of silver, whether you deposit bullion and issue notes
upon it, or whether you coin the money, that you maintain
the ratio, and insist upon the right and power of the govern-
ment to issue notes equal to the coining value of the bullion
on deposit.

What I claim is, that if we are to have the limited coin-
age of silver, if we are to have this House bill agreed to by
a committee of conference, which provides for the purchase
of $4,500,000 worth of silver bullion every month, and the
issue of $4,500,000 in notes on the bullion so purchased,
and purchased at its gold value, and the notes issued at its
gold value I say, after it is purchased, we ought to insist
upon the right and power, and we ought to give the power
to the Secretary of the Treasury, to issue beyond that ; not
to the bullion holder, because the government when it pur-
chases the bullion owns it, and has paid for it at its gold
value, at its cost ; but after the bullion is paid for and is the
property of the government we ought, to keep up the ratio,
to permit the Secretary of the Treasury to increase the
notes to the coining value of the bullion.

You understand the proposition. I say we get the
benefit of the seigniorage now, because we purchase bullion
and coin it into 412^-grain dollars, and the notes are issued
upon this coin, and in that way the government and the
people get the benefit of the seigniorage. In other words,
$2,000,000 of silver bullion, if silver is worth seventy-two
cents, will coin $2,280,000. That is to say, the Secretary
of the Treasury purchases $2,000,000 worth of bullion, and
that $2,000,000 worth of bullion yields a circulation of
$2,280,000. That is the gain, and that gain goes into cir-
culation under the present law. Four million dollars worth
of bullion each month, coined into standard money, will
put into circulation about $60,000,000 per year. That is,
$48,000,000 worth of silver bullion will coin about 60,000,-
ooo standard dollars, or more than this bill will put into
circulation in its present state. In other words, we get the
benefit of the seigniorage ; so we get the difference between
the cost value and the coining value. And it is important
to keep up that as a principle, not only in order to gain the
benefit of that outside circulation, but in order that we may


not here establish a precedent ; because this bill will estab-
lish this precedent, if it is enacted into a law, that we have
abandoned the ratio of sixteen to one in issuing money on
silver; that we have established a new relation and a new
ratio ; that we have established its gold value as the ratio,
whatever that may be, for the notes outstanding; and when
contracts are based upon it, years hence, when we want
free coinage and come before Congress demanding it, it
will be claimed that you have established here a market
ratio between gold and silver that all contracts are resting
upon, and that you cannot now go back to the ratio of
sixteen to one.

It will be claimed that it will be unjust to creditors, that
debtors would have the advantage, and it would be unjust
to go back to the ratio of sixteen to one in issuing money.
Hence, I say, it is an important matter, if this bill is to
become a law, that gentlemen watch that point, that we do
not depart from our ratio, and although you may put in
your bill that the notes outstanding shall not be less than
the cost of the bullion, let it further provide that the issue
may be to the limit of the coining value after the govern-
ment has purchased the bullion. Then, if we should have
a deficit in the Treasury department and we want more
money issued on that bullion, you have the power to do it.
Reserve that power in the bill to increase the notes to the
amount of the coining value of the bullion, and do not de-
part from that, but insist upon it. Now, I say, after the
government has purchased the bullion at its cost, and the
notes are issued for its purchase, it shall then reserve the
power and right in the Secretary of the Treasury to issue on
it notes equal to its coin value, and the government gets
the benefit of the difference between the bullion value and
the dollar. I say that we propose that point, first, because
it is necessary, so that we keep up the ratio of the two
metals and not permit gold to be the whole measure, as it
is being made by this bill; not to establish the gold stand-
ard entirely, and use silver only as a commodity, and as
having no part or parcel in the measure of the circulation
of the country.

That is the House bill, and therefore I insist that this
changes the ratio of issuing money upon silver. Instead of


making the legal ratio of 16^ to I, it is establishing a
market ratio on which money shall be issued, changing the
whole theory of our coinage and changing the ratio of 16%
to i to the market ratio, which to-day is 22 to I. In other
words, this bill proposes to change the ratio from 16 to I to
22 to i in issuing money on silver.

Now, I say if the bill is so amended that after the bul-
lion is purchased notes issue at its market price, but after
it is purchased giving the power to the Secretary of the
Treasury to authorize the further issue of the amount of
the difference between the. market value and the coin value
of the bullion, then, I say to you, we get the benefit of the
profit or seigniorage; for certainly no one will claim that it
is not safe to issue money on silver bullion when it has
behind it, dollar for dollar, the coin value of the bullion,
and I am claiming and demonstrating that that is safe
enough. We have a currency based, dollar for dollar, on
the 412% grains of silver, with a paper dollar note behind
it. It is safe. Do we want to depart from that and issue
notes and say notes shall not be outstanding in greater
amount than the actual value of the bullion?

Of course, every gentleman understands that I have been
arguing all the while that the only proper way of settling
this question is by free coinage, and I wish to do whatever
is in my power to secure that. If it is impossible to get
that, and we can get this with two amendments, I will vote
for it. These particular amendments are simply this: First,
that the notes outstanding shall not be less than the cost
price of the bullion, and not exceeding its coin value. Sec-
ond, in order to keep up the coinage, that the notes shall
be redeemed in coin, and the Secretary of the Treasury
shall coin, if necessary, for its redemption, no less in amount
than $2,000,000 per month.

In other words, let coinage go on. Do not stop that.
Now, gentlemen, I insist upon that. It is an important
matter. I object to continuing piling up and piling up
bullion in the Treasury without ever coining it; for it will
not be coined. You will set a precedent that will come
home to trouble you. It will be a boomerang. I insist
upon coining this money, and there ought to be coined not
less than $2,000,000 per month ; and if you cannot get that,


get $1,000,000. It is an important point that you must
have it coined. Take from the note the legal-tender
feature, and probably there will not be presented for re-
demption one million, probably not half a million ; and if
they are not presented for redemption, there will be no
coinage. There will be no coinage in any event. Mark
that. And I will tell you why. You have about 200,000,-
ooo of standard silver dollars already coined, and on them
you have notes outstanding almost equal to the amount of
coined dollars, except the dollars in circulation probably
56,000,000 or 58,000,000.

There is nothing in this bill, or in the present law, to
prevent the Secretary of the Treasury from canceling the
present silver certificates to whatever amount he sees proper.
The law simply provides that they may be reissued. When
these certificates come in for the payment of taxes, they are
canceled or reissued, at the pleasure of the secretary, and
he will simply cancel a sufficient number of the certificates,
and will leave the resulting coin for the redemption of
legal-tender notes. I see nothing at all to prevent it, and
we know that the present Secretary of the Treasury has
already stated, as all secretaries preceding him have stated,
that we ought not to coin another dollar; so that not another
dollar will be coined under this bill unless there is compul-
sion in it, because the coin on hand will answer all these
purposes. The notes outstanding will be canceled for that
purpose. The 8,000,000, 10,000,000, 15,000,000, or 20,000, -
ooo of silver dollars already coined will be kept on hand for
the redemption of the notes, and you cannot get another
dollar coined under this bill.

Our national banks are insisting upon maintaining their
legal status by a small issue of circulating notes, and they
are desirous of reducing their circulation and having a system
that will permit them to exist with as small a circulation as
possible, keeping within the purview of the law. On the
same principle the friends of silver ought to insist on the
continued coinage of silver in order to keep it within the
purview of the law and the Constitution ; for, mark you,
unless silver bullion is coined, if it is simply bought as a
commodity, and put into the treasury simply as a com-
modity, as it would be under this bill, you will have it said,


and said truly, by the people, that you have as much right
to put iron there, that you have as much right to put lead
there, that you have as much right to put zinc there, that
you have as much right to put wheat there, as you have to
put silver bullion; and you have the same right, and you
cannot answer the argument. But, on the other hand, if
the mints of the government are continually coining this
silver bullion into money, the case will be entirely different.
That is what the Constitution contemplates. It contem-
plates silver as money, because it can be coined. Cotton
cannot be coined, neither can lead, nor zinc, nor any other
commodity, and therefore they are not money; but, under
the Constitution of our country, we can legally make money
out of silver bullion, and silver is good as bullion in the
treasury simply because your mints are open to its coinage,
and when you stop that the principle is abandoned.

We have the free coinage of gold. There can be no
objection to issuing notes on gold at its coinage value. You
do not take its bullion value, but you take its coin value'at
the mints, and you can issue notes upon it. Why? Be-
cause if I have a gold note I can take it to the treasury, if
I wish to do so, and take out the gold bullion, and go to
the mint and have it coined into money. I do not care
whether a piece of gold is bullion or coin in the treasury;
in fact it is money, and the miner who extracts gold from
the earth does not extract a product, a commodity, but he
extracts dollars and cents, because he can take the gold to
the mints of the country anywhere and have it turned into
money. So as to silver bullion, when you give it free coin-
age at your mints ; then the party can deposit his bullion,
or he can have it coined. It is no longer a commodity,
because it is monetized. The free coinage of silver has the
same effect as the free coinage of gold. It monetizes the
metal, and all the government does is to put a die upon it
to show what the coin is. Whether in bullion or in coin,
such a metal is worth precisely what it will coin, neither
more nor less.

The moment you provide for the free coinage of silver
it is no longer a commodity; it is monetized. Why? Be-
cause every man who has got 412 grains of silver will refuse
to take one cent less than a dollar for it, knowing that he


can take it to the mint and have it coined into a dollar.
That fixes a price below which it cannot fall; but when
silver is not monetized, when it is a commodity, as this bill
makes it, the case is different. You pile it up in the
treasury as a commodity, and when you take it out by a
note, you cannot go and have that silver coined ; it is a
mere commodity. On the other hand, when you take out
a piece of gold bullion with a note, you can take it directly
to the mint and have it coined. There is a vast difference
between a metal that is monetized and one that is demone-
tized. Silver is now demonetized. It is now a commodity,
and when you issue notes upon it, you issue notes upon
a commodity.

Unless you have some compulsory coinage of that bul-
lion you cannot maintain the proposition that it is better
as a basis for coinage than wheat, except that it is not per-
ishable, or any better than lead or zinc, which are not
perishable. You cannot coin lead or iron or zinc, nor can
you coin the silver that is piled up in the treasury depart-
ment unless you authorize it by law.

Hence I claim that it is a matter of great importance to
the friends of silver, to those who are in favor of the true
theory of money in this country, to insist that silver shall
have the right of coinage to some extent, however limited
it may be, so as to contradistinguish it from commodities.
That is what I mean. When you say that silver bullion
shall not be coined, that practically no coin shall be issued
upon it, but it shall be placed in the treasury and notes
issued upon it, you treat it as a commodity; it is no more
entitled to coinage than iron or zinc or any other metal.

By such measures you demonetize silver; you make a
commodity of it. When you, gentlemen on the other
side, go home to your constituents and undertake to ex-
plain this point, and tell them why you provided for the
deposit of silver bullion and the issue of treasury notes
upon it, and why you would not treat cotton or wheat or
lead or iron in the same way, you cannot explain your posi-
tion. But if you say to your constituents, "We have put
bullion in the treasury, it is true, but we have compelled
the Secretary of the Treasury to coin it under the Constitu-
tion," however limited the coinage may be, you then draw


the distinction between silver bullion and other commodi-
ties. You then point to the Constitution of the country,
which makes silver money; you point to the law which rec-
ognizes it as money at a fixed ratio of coinage ; you keep
up the ratio as well as the coinage. Thus you educate the
people of this country in the true theory of monetary sci-
ence. But when you undertake to select any particular
commodity on which to issue notes without coinage, you
are departing from all the theories of bimetalism, and you
are giving silver a stab in this very bill which is claimed to
be friendly to it.

Now, Mr. Speaker, I hope this free-coinage bill will not
be voted down. I trust this House will do what the Forty-
fifth Congress seemed to be unable to do, and that is, grap-
ple with this great question. The longer we postpone it
the greater becomes the difficulty. It was postponed in
1878, and a provision was put into the bill asking a confer-
ence of foreign governments for the purpose of coming to
some agreement on the subject, and some understanding
by which France, England, and Germany may open their
mints to the free coinage of silver. We were told then
that was the prediction that defeated free silver then that
we could have this agreement which was promised us.

Online LibraryThomas B. (Thomas Brackett) ReedModern eloquence; (Volume 11) → online text (page 28 of 43)