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sTHE MORNING POST: FRIDAY,: OCTOBER 26 1900
WHAT IS 16 TO I ?
Free Coinage Discussed by
Secretary of the Treasury
A DEFINITION OF RATIO
It I a Relation In We I slit Between
Geld and Silver Dollars-How tba
Parity Has Been Maintained The
Interest of Waze-earners In the Celn
se'Qacstlon How Banking and
Baiiotii Interests Are Affected
Brooklyn, Oct. 25. Hon. Lyman J.
S!age, secretary of the treasury, deliv
ered all address before the.Younff He
jrablican Club toufcht, discussing the
t'.xteen to one question. He spoke as
follows:
.Gentlemen of the Young Republican
Club:
It is cay purpose to speak to you for
twenty or thirty minutes. My subject
5iay be stated after this fashion: What
is the interest of the wage-earner and
stipendiaries of every class in the propo
sition to open the mints for the free and
unlimited coinage of silver at the ratio
of 16 to 1? It is the declared purpose
of the Democratic party, so called, to do
that thln-r. If done, it "will have an
enormous effect for -weal -or woe upon
h welfare of everv man. woman, and
child in the United States. No question
is of deeper moment' than this question,
and you can not act intelligently on it
unless you understand it.
Do vou really understand it? I thought
until lately that by this time the merits
or demerits of that proposition must
Irttmderstood by everyone, but I know
better now. A gentleman a business
man of considerable intelligence only a
" week since, called on a member of Con
gress and asked him this question: "What
does 10 to 1 mean? I am ignorant and
I want to know." Now, let me ask that
question right here and now. What is
1G to 1? What does the term mean?
I have a little granddaughter eleven
years old. he visited me a few weeks
ago. and "while -with me asked me that
very quenion. I said to her: '"Tell me
what vou understand it to mean."
"Well." she said, "I fhink it is this way:
Gold is worth about thirty-two times as
much as silver, but the Democrats want
to pass a law to make sixteen ounces
of silver worth the same as one ounce
of gold. I don't know if that is right,
though.' "Well, my child," I said, "you
Lave it right down tine, and I won't
disturb your mind by further explana
tion." Sixteen to One Denned
But "we grown-up folks can probably
enlarge the point a little here. What
is 1G to 1? It is the ratio -which Con
rress fixed many years, ago between
gold and silver when coined at the miatJ
that is to sa-. it is a relation, in weignt
of metal, "between silver dollars and
gold dollars. Under the law, a given
quantity ot gold was stamped a dollar,
and sixteen times that weight in silver
was tamped a dollar. You perceive it
is a relation of weight, not a relation of
Talue.
You will ask. then, why was the
weight Tatio fixed at.lG'to 1? The an
Kter is obvious and plain. It "was be
cause, that relation of weight recognized
in the coins minted the then commercial
value of the two metals in the markets ;
of the world. Because the commercial
value of gold was sixteen times, or there
about, greater than silver. Congress
Vccognized the fact and established the
coins in the same ratio of weight. Make
no mistake on this point. The mint
ratio never established the value of eith
er gold or silver, nor did it establish the
relative value of one to the other. The
commercial exchanges of the word fix
the value of all things, including gold
and silver. The only way on earth to
.determine the value of gold, either as
coin or as bullion, is to find put "what it
will bring in flour, or clothing, or labor,
or other things. The value of gold is
measured by the quantity of things for
which it will exchange. The same is
exactly true as to silver. Now, gold and
silver are no more related to' each other
in any fixed ratio than are wheat and
corn. - Wheat and corn are good for food,
and there is a sort of relation between
the two in value, but it is a'fincruating,
not a fixed, relation. Tne same is true
of gold and silver. They are both met
ers used as money, but their relation to
each other in exchangeable value has,
as history nroves, been a variable, not a
fixed, relation.
The Jllnt and the Real Ratio
Now, when our coinage laws were
passed in 1702 and amended in 1834, 15,
lo1- or 16 ounces of silver had about the
tame power to purchase things in the
world as had 1 ounce of gold, and for
that reason, and that reason solely, tho
mint ratio, a ratio of weight, was es
tablished in a way that was supposed to
hr.ih mpfjils mm( in the mint for coin
ace m snr aDDreeiable volume at the
same period of time. . That metal came
for coinage which had at. the time the
least relative 'buying power" abroad.
while the one which enjoyed the greater
Durchasinir Dower abroad did not come
to the mint, but went abroad, where it
ccuia ma.Te neuer oargains ior me u
?r of it. But since the years. 1702 and
1S34 the relative value - between gold
and silver has'radically changed. In the
former periods one 'ounce of gold would
exchange for about sixteen ounces of sil
ver. For some years past one ounoj or
a - a l a. a ... m
gold nas exenangea joc um-iy-iwa oi
thirty-four ounces of silver. Jt.wHl now
exchance in the same ratio, and there
is no reason to doubt that it will so con
tinue to exchange for an indefinite time.
I shall not stop to discuss how this
came about. Whether it was the alleged-
"crime of 73," or whether it. was
hpransp -silver has become relatively
more plentiful than gold, or because the
desires or men nave cnansea wnni
ever theory you may adopt, the fact re
mains unchanged, viz, one ounce of gold
is equal in exchangeable power to thirty
two ounces of silver, let it is in full
view of these facts that a political par
ty, or, rather, a combination of at least
three political parties, proposes, if it
gets control of the government, to re
open the mints to the free coinage of sil
ver atthe old ratio of 16 to 1. Why?
Whj? If it were desirable to open the
mints for the free coinage of silver, why
not do as our fathers did. to wit, make
the ratio as near as possible to the commercial-value
ratio? They .say it was
a crime to close the mints to free coin
nsre of silver in 1S73. I deny it: but if
it were true, wonld it cure that crime
to commit an egregious folly in 10001
Bryan's Position Analyzed
The Democratic champion still avers
that on this question the party stands
where it did in 181X3. He does not talk
about it so much, but when he does talk
about it, hp uses the same misleading
phrases as of old. For instance.- he
has repeatedly said: "The Republican
administration under McKinley is coin
ing silver every day in the month and
every month in the year at the ratio of
16 to 1. If that is not the correct ratio,
why do they do it?"
Mr. Bryan knows why, but he conceals
the reason and .allows his hearers to
draw erroneous conclusions. The state
ment, so far as it goes, is true. In 1S78
a measure passed Congress directing he
Secretary of the Treasury to buy two
million ounces per month and coin into
"standard dollars." But remember this:
The coinage was to be for the govern
ment and on government account, and
not on private account for the holders
of bullion. 'In 1S00 the Sherman law
was passed, which directed the Secretary
to buy not less than four and one half
million ounces of silver and to coin not
less than two million ounces a month.
That act also declared it to be the poli
cy of the government to maintain these
dollars on a parity with gold. In 1893
the purchasing clause of theShermau
law was repealed, -iince that time the
mints have in truth been engaged in
coining up the purchased bullion. But
mark this:, Through the law, and by
the operation of the Treasury, the dol
lars have been kept equal to gold. They
are paid.out only by the government, and
against the receipt by the government of
an equal amount of gold, or in service
rendered, or goods bought. With the
government's guarantee of parity, and
the quantity limited, it is manifestly an
indifferent circumstance whether the
ratio were 16 to 1. 20 to 1. or 3 to 1. And
yet Mr. Bryan deftly insinuates that this
practice justifies free coinage for every
body at a .ratio commercially obsolete
without any guarantee of equality with
gold from anybody.
Let me tell you a story. It illustrates
this question of parity and makes it
more clear. Four or five years ago I
listened to a conversation between a cer
tain judg and a banker. tThe judge
said: "I constantly hear that our sil
ver dollar is worth only sixty cents, and
yet you bankers and all dealers are glad
to take them for a dollar each. How is
that? Are 4hey really worth a dollar,
or do yon all give forty cents more for
each of them than they are worth? My
question is an honest one: I want to
know." The banker renlied: "Well. I
will answer you by the kindergarten
method." He held up a nickel and ask
ed the judge, "What is that:' Answer:
"A nickel five cents." "What is the
metal in the coin worth?" Judge: "I
don't, know." Banker: "I will tell you.
It is worth about six-tenths of one cent.
Now, with so small value in itself, how
does i. come to be worth five cents?"
Judge: t "Why. the government, having
issued it for five cents, and having re
ceived five cents for it. will redeem it for
five cents in gold, won't it?" Banker:
"Yes, you have it exactly. You have de
scribed what is perfectly analogous to
the truth regarding the silver dollar.
The government buys the silver at the
market price, now about sixty cents,
stamps a certain quantity of it a dollar,
gets a aonarior it wnen it pays one
out and redeems it when presented for
redemption." Judfee: "'Does the gov
ernment redeem it with a gold dollar?"
Banker: "No; but it does substantially
the same thing. It receives it as the
equivalent of a gold dollar in the pay
ment of customs dues. Being as effi
cient as gold for that purpose, it is now
the equal of gold for all purposes. At
the same time it does this, it pays gold
to every one that wants it who has a
claim or demand on the Treasury. Thus
the panty is maintained. I have been
- a j. - .t.: , -
CM:rrtrsnoiiu io utir commercial vmues
in their respective powers to buy things, j obliged to say so much ,by way bf ex
I can not stop to. recite history. Suffi- planation or preface to iny main ques
cient to say that never in our history did tion.
The Real Interest of Wase-earners '
How would the interests of wage
earners and salary-paid people be af
fected if the Democratic Bryan propo
sition should 'be realized? In the year
1895 I had a conversation with one of
the brightest and most capable business
men of the West. He was engaged in
large affairs an employer of labor, a
bank president, and a man of reputed
wealth. He said to me: "I am per
suaded that it is for the interest of the
people of the United States to open the
mints for the free coinage of silver at
the ratio of 16 to 1, and. to get on to the
silver standard as soon as possible."- I
said to him: "It is surprising to hear
such a statement from you. You must
have thought it well over; you can, I
know, make your thought and reasoning
perfectly clear. Explain to me how it
will be for the interest of our people to
go into this thing, and if I can see it
as vou do I will drop all objection and
espouse the cause at once." This was !
his explanation: "He have come, to a
time," he said, "when a protective tariff
no longer protects. Under the Wilson
hill, which, though a Democratic meas
ure, is still protective, our factories are
idle,, labor is out of employment, and
general business languishes. The truth
is, we can not compete in manufactur
ing with the older countries, where labor
is cheap. Wages and salaries are too
high here. The labor cost of what we
manufacture is too great. We must re
duce the labor cost. To undertake to re
duce wages directs would simply breed
strikes, lockouts, disorder, and riots;
but can not you see," he continued,
"that if we adopt silver as standard
money for our domestic use we will,
while nominally paying the same wages,
pay them in a kind of money which will
be obtained at a cost, measured in fin
ished products, of not more than one
half the present cost in gold" "Yes,"
I replied, '"I see this clearly. It is strict
ly true, but you said it was for the
interests of the people. Don't you rec
ognize the wage-worker and the salaried
man as the people? Your proposition Is
a proposition to blindfold their eyes
while you pidc their pockets. I can
not agree to your plan. Better strikes
lockouts, and riots than this kind of
juggling and cheating through the me
dium of payment. If protection will not
nrotect (which time will show), if our
labor cost be too high, if wages must,
as vou claim, be finally reduced, the
grind of competition will determine when
and how much. Against such a result,
reasonable and just resistance should bo
offered, while you would surrender the
whole question at once without a strug
gle "
Wages Reduced One-half ,
Was the gentleman right? Would
the free coinage of silver and the con
sequent adoption of the silver standard
in our domestic affairs have the effect
he predicted? Would it deprive the
wage-earner of one-half his present re
ward? I have no more doubt of the
truth of it than I have doubt that grapes
grow grapes or that thistles grow this
tles. '
You can see it for yourself if you will
reallv try. Give attention now. It is
not difficult. It is simple. You work
for pay. In what are you paid? You
will say, "In money." That is true,
but the money is only an intermediary
to that in which you are really paid
viz, things that you use and consume
The value ' of your work is measured
finally hy.what'your work will procure
You are paid two dollars , per day, ii
gold or its equivalent. Two dollars wil,
buy a sack of flour, a pair of shoes, o.
a thousand pounds of coal, and so on
The value of your labor is, therefore.
equal to the value of a sack of flour,
a pair of shoes, a thousand pounds oi
coal, or what not.
'Now, among other things your labor
pay will buy is silver. With two dollars
of the money in which you are now
paid you can buy 1,600 grains of silver
bullion. That quantity of silver bullion
has its exchangeable value all over tht
world. In our market 1,600 grains of sil
ver are equal in value to a sack of flour,
a pair, of shoes, or a thousand pound
of coal. In other words, your labor pay
and 1.600 grains of silver are equivalent
to each other in their power to command
those things that minister to the com
fort and happiness of yourselves and
your families.
Let us now examine . the. free-silver
proposition. It is simply this:' Open the
mints to everybody. Permit the. owners
of silver to bring in 37114 grains of sil
ver. Stamp 'fit one dollar and give it
back to them. Clothe that dollar with
legal-tender quality, so that it may be
lawfully used to pay debts. That is all.
It is simple enough, -isn't it? But we
know that one dollar of our present kind
of money in which you are paid your
salaries and your, waes is worth, not
3714 grains, but more than 800 grains.
Would you not. rather have ftne equiva
lent of 800 grains for your pay than the
equivalent of 2714 grains?
And yet, if you consent to the free
silver programme, if fBrvan and his
Democratic Populistic Silveristic sup
porters come into power, that pro
gramme will be adopted, and you inevita
bly get your pay in the new dollars con
taining 37114 grains of fine silver. - Be
fore you vote for this sort of business
be wise enough to get a stipulation from
your employers that , you shall then be
paid, as you are now paid, in something
equivalent to 800 grains of silver. If
you do not do so. you will get the equiva
lent of only 37114 grains for every, dollar
paid you. Can you afford it? v
But they will tell vou that these new
dollars, containing 371VI grains, will be
as valuable then as 800 grains are now.
They will tell you that a dollar is. a
dollar, and that free coinage will bring
IB O ld
the value' of the bullion up to its cora- Ufe and Death Fiht
age' value. So that then 371 grains Mr. W. A. Hines of Manchester, la.,
will be worth a dollar. -Three hundred ' writing of his almost : iraculous escape
and seventy-one and one-fourth grains in - from death, says: "Exposure after
silver bullion will be indeed worth, one j measles induced serious lung trouble,
of the new silver dollars, because with which ended in Consumption. I had
that numher of grains you can get one j frequent hemorrhages - and " coughed
of the new dollars, , and one of the new night and day All my doctors said I
dollars will be worth 37114 grains of sil- must soon die. Then I began to use
ver, because there are just,371 grains - Dr; King's New Discovery for Con
in. it; hut: the question the question in j sumption, which completely cured me.
which you are interested is this: What ; I would not not be withont it even if. it
will be the value of that dollar in Rur-fcost $5.00 a bottle. Hundreds have used
chasing power when , paid to me in I it on my recommendation and all say
w ages, compared with the dollar in it never fails to cure Throat Chest and
which I am now -aid? You know the' Lung troubles." Regular size 50c and
value of your present dollars. Are you $1.00. Trial bottles free at Ul Drug
prepared to guarantee to yourselves nd gists. , .
to vour families that these new proposed : ' - ' ' -'
dollars will be of equal orleven of ap- t -nrnvim
n tr vnlrif? No ' ppntlpmpn. von
can not "afford to do so. Take the risk
of such an empty chance if you will, but
when the hour of your grief and disap
pointment shall come, as come it surely
will, then blame yourselves, but ab
solve the (Republican party from any
responsibility for the adversities you
will suffer.
The Banking and Business Interest
But the Democratic orators will tell
you that. what I am saying is the voice
of the banker, and that the banker has
a special interest in the gold standard;
that gold is the rich man's money and
silver is the poor man's and other rot of
that kind. I want to speak a moment of
the banker's position. I want to show
you, as I readily can, that the banker,
if he had regard only for an immediate
and ill-gotten profit, would himself advo
cate the free-coinage measure of the
Democrats. Let's see how he could
make it serve his profit. -
Assume that" the free-coinage law
would be operative in two years. Know
ing this, the banker, having say, $500,
000 in deposits, could buy at the present
market price, say, one million Mexican
dollars, or an amount of silver equal
thereto in bullion, each one a little
heavier and a little finer than the propos
ed silver dollars. The mint being open
ed, he could take his one million Mexi
cans to the mint and receive in return
OF RiLEIGB, N. C.
(Continued on page seven.)
Capital ............. $100,000.00
Surplus and profits ... 60,000.00
Deposits ............. 710,000.00
No Interest Paid on Deposits.
Total assets.... ..$025,000.00
Ample facilities for handling accounts
of farmers, merchants, manufactufers
and all others. '
Liberal loans on cotton or other satis
factory collateral. "1 - .
Correspondence and personal calls in
vited. ' , '
SAFE DEPOSIT BOXES
00 to $12 .00 pi r annum.
- s
JOS. G. BROWN, President.
HENRY B. LITCHFORD, Cashier.
, , . FOR SAL&
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Inquire Box 64, Raleigh, W. GL . 4
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