Part 28

Mr. McPHERSON. The question I want the Senator to answer is this: Will the people of this country, the financiers of this country, the banks, the moneyed men holding $500,000,000 of gold, with a certainty of the free coinage of silver and going to a silver basis, for that is what it means, put their gold in circulation, or will they hoard it? Will it disappear?

Mr. JONES, of Nevada. I scarcely know what the Senator means by a "silver basis." He talks about a 72-cent dollar. We have never seen a 72-cent dollar. The papers in the East have told us that the silver dollar was worth 72 cents. I recollect talking on that subject once with some Senators in the cloak-room. During the conversation one of the Senate pages brought me a telegram, on which he said the telegraph messenger had told him there were 50 cents due. I give the page a silver dollar and said to him: "I have been informed by some very respectable and intellectual gentlemen in here, some of them now candidates for the Presidency even, that this dollar is worth only 75 cents. I do not want to cheat a little boy. Take this out, and if the boy thinks it worth only 75 cents he can send me back 25 cents, and if he thinks it is worth a dollar he can send me back 50 cents. I will leave it to him." The page brought back 50 cents and said the telegraph boy told him he did not know what those old "duffers" in there might say, but it was as good a dollar as he wanted and was very hard to get. [Laughter.]

The Senator talks about the bullion value as though that had anything whatever to do with the value of the dollar. I have attempted to demonstrate that the material that was in the dollar has nothing whatever to do with it. Let me illustrate. Suppose the entire supply of silver of the world to-day were $60,000,000. Suppose the law limited the coinage of it to $58,000,000, and every dollar coined was at par with gold. Suppose there were a demand for half a million dollars of silver, to be used in the arts, and that the remainder ($1,500,000) of uncoined silver were barred from the imperial money use. That supposes a supply of $2,000,000 left after satisfying the requirements for coinage, and supposes only half a million dollars' demand for use in all the arts. In that case there would be a $2,000,000 supply bearing down a half million dollars' art demand, or a proportion between supply and demand of 4 to 1. Suppose that under those circumstances silver bullion went to 50 cents an ounce. Would the Senator then say that 50 cents an ounce was the value of the $58,000,000, and all the rest of the coined silver of the western world, while by coining another million and a half, which would be nothing to a country like this, all the silver would be at par with gold? Every ounce of silver coined in Europe and the United States is at par with gold, a thousand or twelve hundred million dollars of it to-day in France, $200,000,000 in Germany, $370,000,000 of it here. We are not dealing with the price of silver bullion, that portion of silver that is deprived of its immemorial use as money. We do not say what the commodity demand for silver may make that worth. Such a consideration has no bearing whatever on the value of money.

I will suppose that in some one county of the United States a law were passed that the wheat grown in that particular county should have no right to go through the grist-mill, and that that wheat, as it might very naturally do, being deprived of use, fell to one-half the price of the wheat grown elsewhere in the country. Would the price of the wheat of that one county thus under interdiction and denied the grist be a fair gauge by which to measure the value of the entire wheat crop of the country? Manifestly not. All we have to do is to take up the little "slack" of silver, and all of it will at once be at par with gold; then we shall hear no more about the "commodity value" of silver. That is the contention that the bimetallists make.

Mr. HEARST. It will be $1.29.

Mr. JONES, of Nevada. It will be $1.29 an ounce in one week--in three days--in fact the very moment you give it back its ancient right of coinage and restore to it its full money power. You coin of gold all that is brought to the mint, and you deny to a certain portion of silver that same long-established privilege, and then you measure the value of the whole supply of silver by that of the little fraction that is not coined, and which therefore has to find a market as a commodity.

Mr. McPHERSON. Then, if the Senator will permit me, he necessarily proposes that the Government of the United States shall take up all this "slack," as he calls it, in the surplus quantity of silver and shall use it in the coinage. The mints of Europe being closed against the coinage of silver, there is no other place where it will be coined. Now, if the Government of the United States should use all the surplus silver in the country, which has simply forced the price down since we remonetized silver in 1878 more than 20 per cent.----

Mr. JONES, of Nevada. Gold has risen 35 per cent.

Mr. McPHERSON. Then I think the Senator's argument is upon this idea and upon this plan, that after we are upon a silver basis, as we should be most assuredly, there would be no inequality in the money, because it would be all silver.

Mr. JONES, of Nevada. And no inequality between it and gold.

Mr. McPHERSON. Certainly not, because there would be no gold in circulation. But let me ask the Senator another question. While he can use his short-legged silver dollar for the payment of debts, when he comes to make a new obligation would not the price of the goods assume a price equal to the difference between gold and silver? In other words, while you can use a debased currency for the payment of debts, if a legislative decree requires that you shall accept it, you can not use it for any other purpose.

Mr. JONES, of Nevada. I can not understand the Senator. We have not provided any "short-legged" dollar. The Senator is assuming a good many facts and attempting to adjust me to them. I ask the Senator to wait until he has heard my argument, and I invite the Senator then to make reply to it.

Mr. McPHERSON. I am sorry that I interfered with the Senator.

Mr. JONES, of Nevada. It was no interference on the part of the Senator, except that I can not separate the Senator's questions from the argument and assumptions that he makes. As to the outflow of gold, as I have said, it would take a long time for even $400,000,000 of it go. The amount of gold driven out would tend to raise prices abroad by making money more plentiful there, and so check the outflow of gold from here. When Senators speak about $600,000,000 of gold being withdrawn from circulation here a question that is a little curious arises. What are these people who own it going to do with that gold after they have withdrawn it from circulation? Are they going to invest it in Great Britain? Are they going to invest it in France? Are they going to the Cape of Good Hope to invest it? If they are they will reverse the policy that English capitalists are pursuing now and have been pursuing for years--bringing their gold over here for investment. The Senator tells us that gold is to disappear from circulation. What will the owners do with it? Where and in what are they going to invest it?

Mr. McPHERSON. It will be held for a premium.

Mr. JONES, of Nevada. But who will buy it at a premium? Who needs it at all? For what purpose is it needed? Who is going to pay any premium for it? Nobody is "short" on it, and there is no law which forces anybody to have it.

Mr. President, nobody wants it enough to give a premium for it. It is only worth what is daily paid in the markets of the world and nobody is going to pay a premium for it. It is a bogie with which to frighten the people who demand reform in the currency of this country. Let them withdraw their gold.

I tell the Senator it is not the men who hoard the gold in vaults who maintain or promote the prosperity of this country, but the toilers in the wheat-fields and on the farms of the country, the men who work in the planing mills, the forges, the furnaces, the factories, and in all our institutions of industry. It is they that bring us our prosperity, and not these people who are gambling for premiums on gold.

Let them gamble among themselves; let who lose and let who win, the people care nothing. The people of the United States are going to institute a money that shall install and maintain justice as between the citizens of this country, and they will not be impeded. I can tell the Senator that neither his party nor the Republican party will ever impede the march that this great country is about to make--the first in the world, I am glad to say--in adjusting to the demands of industry and commerce, that great instrument, money, the non-adjustment of which, as I have already stated, has, in my belief, caused more misery than was ever caused by war, pestilence, and famine.

But to resume at the point where I was interrupted:

The gold going out would tend constantly to restore the equilibrium between our prices and those of the gold-using countries, making the proportion of the gold outflow each year less than that of the year before. If there be included in this computation the remaining $100,000,000 of gold, which would remain after the outflow of the $600,000,000, we shall be compelled to come to the conclusion that the time when our stock of gold can be driven out will be almost indefinitely postponed.

But even should all our gold go by reason of the remonetization of silver, it will not be to the injury of the gold standard, but to its great advantage, and to the equally great advantage of the masses of the people, as well of this country, which the gold may leave, as of all countries to which it may go. It will make the "gold standard" consistent with the prosperity of the countries maintaining it. But instead of preserving the gold standard of to-day, which is a standard of wrong, it will inaugurate a gold standard that will approximate to a standard of justice.

The new "gold standard" that would be established by the outflow of our gold would be a standard of prices resulting from the influx into England, France, and Germany, the principal gold-using countries of Europe, of more than $600,000,000 of money.

So considerable an addition to their money-stock would raise prices in those countries, and by remaining there, would, with the current production, which we could spare to them, tend to maintain prices at a steady level. Such a condition would be an inestimable boon to the overburdened masses of Europe, and their prosperity would not be attained at the expense of the people of the United States. We could well afford to let gold go, since, by the coinage of silver, our own money volume would not be reduced. The rise of prices which it would effect in Europe would not only, as I have stated, secure better prices for our exported goods, but would undoubtedly enable us to maintain prices here at a substantial parity with those of Europe--that is to say, with those of the new, more rational and more beneficent gold standard which would be established by the full remonetization of silver in this country.

PRACTICALLY NO GOLD MONEY IN THE UNITED STATES.

But, aside altogether from this consideration, the gold that we already have is really a surplus--it is practically a dead and useless article. Gold, Mr. President, can not with entire truth be said at the present time to form any part of the money of this country. Who but a bank clerk ever sees a gold piece? With the exception of a few million dollars on the Pacific coast, gold is not really in circulation in this country. It is performing no useful function whatsoever. While I am engaged in delivering these remarks I venture to say no Senator within the sound of my voice has in his pocket a single gold coin of any denomination whatever, or any paper representative of one.

This is the answer to the fear expressed by some Senators that when those who hold gold shall observe the enlargement of the money circulation by the issue of the proposed Treasury notes they will be likely to hoard it. They are already hoarding it. Every body knows that that is about all that gold is used for in this country. It is hardly possible for it to be hoarded to any greater extent than it is at the present time. So little is this metal in circulation that I do not deem it any exaggeration to say that there are millions of people in the United States, "native here, and to the manner born," who have never in all their lives seen a gold coin.

How absurd, then, is the claim that any loss is to be suffered by the alleged future hoarding of gold, or that any calamity can occur to 65,000,000 people by the disappearance of that which has long since disappeared.