Part 7

One more brief contrast between France and England. No reader of current literature need be told of the appalling prevalence of poverty in Great Britain. As France is a country without poor-houses, so it may be said that England is a land of poor rates and poor unions. The latest official announcement is that the agricultural interest is declining more rapidly than ever before; and in regions where only fifteen years ago the land rented readily at several pounds per acre, statesmen and economists are appalled at the sight of that which so alarmed our New England people a few years ago: the phenomenon of abandoned farms. We are told that there is a revival of industry because British capitalists have withdrawn their money from other countries and will put it in anything rather than have it entirely idle; but the condition of agriculture steadily grows worse.

And have we anything to boast of in our own happy land in comparison with France? Our natural resources so far exceed those of any old country that a comparison would be ridiculous; and the monometallists tell us, when they are trying to prove that gold is not enhanced in value, that, by reason of inventions, a day's labor will produce at least twice as much as in 1870, and in many lines a great deal more than twice as much. Why, then, does not the laborer receive twice as much as he did in 1870? As wages are labor's dividend of its own product, and as capital had its dividend then as now, if a day's labor does not bring the laborer twice what it did, he is wronged; and, considering our resources, if we are not five times as well off as the French people, the only reason can be that we have slighted our opportunities, and blundered most fearfully in our management.

The monometallists profess to be great sticklers for experience and demonstrated fact; to have a horror of "theory." We present them the example of France as an unanswerable proof that one great nation can maintain bimetallism, and that by maintaining it she escaped the worst evils that have affected the monometallic countries, and assured for herself an extraordinary progress and prosperity. We present them, in contrast, the example of England, and point them especially to the great difference in the progress of the common people of the two countries. We ask them, with this experience, to consider the present condition of this country, and the evils that have affected it since 1873, and seriously to consider the question as to whether something is not radically wrong; whether some malign influence has not gone between us and the reward of our work, and robbed us of that to which we are honestly entitled.

BIMETALLISM ABROAD.

Many monometallists start with the assumption that what they call the "silver craze" is a mere fad, temporary and local; that the advocates of bimetallism are confined chiefly to the United States, and to the western part of it, and that, if they are thoroughly defeated at the November election, the discussion will be at an end.

"Mistaken souls that dream of heaven."

They do not realize that, although it has not taken the same popular form, the discussion is quite as serious in monometallic Germany and England, and in the latter country opinion has so far advanced that both parties agree on the enormous enhancement in the value of gold. There is now scarcely a difference of opinion in England on this point, but there is as to the effect. British monometallists assert that as England is a great creditor nation, the world owing her, as estimated, $12,000,000,000, every advance in the purchasing power of money is greatly to her advantage. In Mr. Gladstone's last public speech on the subject he stated that fact with great frankness, claiming that it was to England's interest that money should remain as now in purchasing power, and that if she should abandon the gold basis, because gold is worth far more than it was a few years ago, the world might applaud her generosity, but it would sneer at her wisdom.

The bimetallists of England, on the other hand, assert that the enormous losses of traders owing to the dislocation of the par with silver-using countries, of manufacturers by reason of the rapidly increasing competition of the same countries, of home debtors and of many other classes, and especially the loss to agriculture, far outweigh any gain made by the creditors as such.

The national debts of Europe now amount in round numbers to some $22,000,000,000. Including all other countries, the total of national debts exceeds $26,000,000,000, and the growth for many years averaged $500,000,000 per year. The local public debts of England and Canada are set at $1,735,000,000. According to the best authorities, the mortgage indebtedness of the principal European nations is as follows:

For Great Britain and Ireland........ $8,000,000,000 For Germany.......................... 8,500,000,000 For France........................... 3,850,000,000 For Russia........................... 3,250,000,000 For Austria.......................... 1,500,000,000 For Italy............................ 2,675,000,000 And for all other European countries. 3,050,000,000

A total of nearly $31,000,000,000.

Hon. Samuel Smith, M. P., places the mortgages of England at something over $2,000,000,000, which is more than half the value of the landed property, and those of Scotland and Ireland (the latter one of the worst mortgaged countries in the world) make up the grand total given above.

A highly suggestive fact is that, as experience develops the enormous evils of the monometallic system, the number of conversions among prominent men to bimetallism steadily increases, and they become more outspoken and radical in their views.

At the Paris Monetary Conference of 1867, Mr. Mees, President of the Bank of the Netherlands, protested against a single gold standard and foretold literally what has followed. Two years later Baron Alphonse de Rothschild said: "As a sequel we should have to demonetize silver completely. That would be to destroy an enormous part of the world's capital; that would be ruin."

At the conference of 1878, Mr. Henry Hucks Gibbs, director and former governor of the Bank of England, was an advocate of the single gold standard; but a few years' experience so completely changed his views that he said: "Mr. Goschen and I were together in the conference in Paris; both of us were sturdy defenders of gold monometallism; but I have changed my mind. I do not say Mr. Goschen has changed his mind, but he has somewhat modified it."

In the Paris Conference of 1878, Mr. Goschen said: "If other states were to carry on a propaganda in favor of a gold standard and of the demonetization of silver, the Indian Government would be obliged to reconsider its position, and might be forced by events to take measures similar to those taken elsewhere. In that case the scramble to get rid of silver might provoke one of the gravest crises ever undergone by commerce."

As it is the fashion of our monometallists to sneer at the possibility of bimetallism, it may be well to quote here the report of the Royal Commission on gold and silver, made in 1888. This commission was composed of six monometallists and six bimetallists, but they assented unanimously to this proposition:

"SECTION 107. We think that in any conditions fairly to be contemplated in the future, so far as we can forecast them from the experience of the past, a stable ratio might be maintained if the nations we have alluded to (herein), the United Kingdom, the United States, and the Latin Union, were to accept and strictly adhere to bimetallism at the suggested ratio. We think that if in all these countries gold and silver could be freely coined and thus become exchangeable against commodities at the fixed ratio, the market value of silver as measured by gold would conform to that ratio and not vary to any considerable extent."

Mr. Leonard H. Courtney, one of the monometallist members of that commission who signed the report, has since become an avowed bimetallist, as have many other prominent Englishmen. Among them may be mentioned Professor Alfred Marshall and Professor Sidgwick, of Cambridge University; Professor Nicholson of Edinburgh; Professor H. S. Foxwell, Professor of Political Economy in University College, London; Professor E. G. Gonner, of Liverpool; Professor J. E. Munro, of Kings College, London; and many others.

Mr. Courtney says, in his article in the Nineteenth Century, April, 1893: "Is it true that gold is this stable standard? I was one of the six members of the Gold and Silver Commission who could not see their way clear to recommend bimetallism, and reported: 'When we look at the character and power of the fall in the price of commodities, we think that the sounder view is that the greater part of the fall has resulted from causes touching the commodities rather than from an appreciation or increase in value of the standard,' In the same paragraph we had said: 'We are far from denying that there may have been, and probably has been, some appreciation in gold, though we may hold it impossible to determine its extent.'" Now, then, he goes on to say: "Let me make a confession. I hesitated a little about this paragraph. I thought there was perhaps more in the suggestion of an appreciation of gold than my colleagues believed; but while I thus doubted it, I did not dissent. I am now satisfied that there has been an appreciation of gold greater than I anticipated when I signed the report, and I should not be able to concur in that same paragraph again. We have been passing through a period of an appreciation of gold, and no one can tell how long it will last. This is a serious matter. The pressure of all debts, private and public, has increased. The situation is serious. It is a dream to suppose that gold is stable in value. It is no more stable than silver. It has undergone a considerable appreciation in recent years, and industry and commerce have been more hampered by this movement than they would have been had silver been our standard. Every step taken towards the further demonetization of silver must tend to the enhancement of the value of gold. It is true that much inconvenience is involved in the use of gold as a standard in some countries, and of silver as a standard in others, with no link to check their divergent relations; but the advantage of having the same monetary standard throughout the world would be counterbalanced if we made gold that universal basis and tied all the fortunes of the nations to it."

The bimetallic sentiment in England is not confined to the mere theorist and doctrinaire or statesman, but is advocated by some of the ablest journalists in the kingdom. Thus, the Statist, which undoubtedly ranks in that country as the highest authority in financial and economic matters, is quite as pronounced as Mr. Balfour and others in its views upon the effect the demonetization of silver has had upon the value of gold. In its issue of July 1, 1893, it says: "The new policy is likely to intensify the appreciation of gold. One consequence of the further appreciation of gold will be to intensify the agricultural depression all over Europe. Most of the charges upon land having been fixed heretofore, they will weigh more and more heavily upon land-owners as gold rises in value. So, again, rents will become more onerous, and it will be found by and by that the settlement of the last few years was only provisional, and that a further reduction will become necessary. Also it is evident that the burden of debt, not only upon individuals, but upon governments, will be much increased. Everywhere the burden of debt will necessitate increased taxation, and so will weigh very heavily upon the general population."

Hon. Robert Giffen, the well-known chief of the statistical department of the Board of Trade, London, was long known as the most determined and uncompromising monometallist in England. In 1888 he read a paper before the Royal Statistical Society, in which he showed that gold had notably gone up in purchasing power; that the increase was continuous and likely to continue, and that this was the true explanation of the fall in the prices of commodities.

In a former paper read in 1879 he had predicted the rise in the purchasing power of gold, and in his paper of 1888 he said: "If the test of prophecy be the effect, there was never surely a better forecast. The fall of prices in such a general way as to amount to what is known as rise in purchasing power of gold is, I might almost say, universally admitted. Measured by any commodity or group of commodities usually taken as the measure for such a purpose, gold is undoubtedly possessed of more purchasing power than was the case fifteen or twenty years ago, and this high purchasing power has been continued over a long enough period to allow for all minor oscillations."

In 1871, when the discussion may be said to have begun, the French economist Ernest Seyd pointed out very plainly that the adoption of the gold standard by Europe and the United States would lead to the destruction of the monetary equilibrium hitherto existing, and then added this singular prophecy: "The strong doctrinarianism existing in England as regards the gold valuation is so blind that when the time of depression sets in the economic authorities of that country will refuse to listen to the cause here foreshadowed. Every possible attempt will be made to prove that the decline of commerce is due to all sorts of causes and irreconcilable matters. The workman and his strikes will be the first convenient target; then speculating and over-trading will have their turn; many other allegations will be made, totally irrelevant to the real issue, but satisfactory to the moralizing tendency of financial writers."

How literally has that been fulfilled in our sight. At this very time, the monometallists of the United States are pointing to all sorts of causes and irreconcilable matters to explain the ruinous fall in prices. They not only allege all the causes here assigned, but many more peculiar to this country; and, after the fashion of all who oppose any reform in the interests of producing labor, they particularly and even savagely deprecate agitation.

By the way, does not every clear-headed American, know that any system that cannot stand agitation is totally unfitted to this country? Agitation, investigation, public discussion in the papers and on the stump, are the very life-blood of our institutions. And if our finances were as they should be, the more thoroughly they were discussed, the more warmly would the system be approved, and the more would investigation be invited.

Hon. G. J. Goschen, former Chancellor of the Exchequer, pointed out as early as 1883 that the enormous increase in the demand for gold consequent upon the demonetization of silver was liable to create great evil. After elaborating this subject, and saying that the fall in prices had already produced serious evils, he added: "Some writers have appeared to show something approaching to irritation at the view of the situation that gold should have largely influenced prices. I scarcely know why, unless through the apprehension that the bimetallists may utilize the argument." A little later he said: "I must repeat that to my mind the connection between the additional demand for gold and the fall of prices seems as sound in principle as I believe it to be sustained by facts."

We might multiply at length quotations to show that opinion is unanimous in England, regardless of party, to the effect that there has been a great increase in the purchasing power of gold. As to the effect of this Mr. Giffen says: "The weight of all permanent burdens is increased.... Our people, in paying annuities or old debts, have to give sovereigns, which each represent a greater quantity of the results of human energy. The debtors pay more than they would otherwise, and the creditors receive more. It is a most serious matter to those who have debts to pay."