Mr. President, n.o.body wants it enough to give a premium for it. It is only worth what is daily paid in the markets of the world and n.o.body 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 h.o.a.rd 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 inst.i.tutions 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 inst.i.tute 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 ma.s.ses 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 princ.i.p.al 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 ma.s.ses 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 h.o.a.rd it. They are already h.o.a.rding 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 h.o.a.rded 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 h.o.a.rding of gold, or that any calamity can occur to 65,000,000 people by the disappearance of that which has long since disappeared.

THE ARGUMENT BASED ON OUR BALANCE OF TRADE.

One of the staple arguments of the advocates of the single gold standard is, that if our stock of gold were greatly reduced we should be unable to make payments to foreign countries in case the balance of trade turned against us. It is only through an excess of imports over exports that gold could go, and this country now produces of nearly all articles almost all that it consumes. With the exception of two years there has not been a balance of trade against us for fourteen years, as the following table will show:

_Value of merchandise imported into, and exported from, the United States, from 1876 to 1889, inclusive; also annual excess of imports or of exports--specie values._

------+------------+------------+--------------+-----------+---------- Year

Excess of

Excess of ending

Total

Total

Total exports

exports

imports June

exports.

imports.

and imports.

over

over 30--

imports.

exports.

------+------------+------------+--------------+-----------+----------

_Dollars._

_Dollars._

_Dollars._

_Dollars._

_Dollars._ 1876

540,384,671

460,741,190

1,001,125,861

79,643,481

-- 1877

602,475,220

451,823,126

1,053,798,346

151,152,094

-- 1878

694,865,766

437,051,532

1,131,917,298

257,814,234

-- 1879

710,439,441

445,777,775

1,156,217,216

264,661,666

-- 1880

835,638,658

667,954,746

1,503,593,404

167,683,912

-- 1881

903,377,346

642,664,628

1,545,041,974

259,712,718

-- 1882

750,542,257

724,639,574

1,476,181.831

25,902,683

-- 1883

823,839,402

723,180,914

1,547,020,316

100,658,488

-- 1884

740,513,609

667,697,693

1,408,211,302

72,815,916

-- 1885

742,189,755

577,527,329

1,319,717,084

164,662,426

-- 1886

679,524,830

635,436,136

1,314,960,966

44,088,694

-- 1887

716,183,211

692,319,768

1,408,502,977

23,863,443

-- 1888

695,954,507

723,957,114

1,419,911,621

--

28,002,607 1890

742,401,375

745,131,652

1,487,533,027

--

2,730,277 ------+------------+------------+--------------+-----------+----------

This table shows that while for last year there was a balance against us of $2,730,277, and the year before of $28,002,607, for all former years from 1887 back to 1874 the balances were in our favor--all the way from $23,000,000 in 1887 to $265,000,000 in 1881. But the total want of significance so far as the movement of gold is concerned attaching to any figures showing a balance of trade against the United States will be seen by an a.n.a.lysis of the figures for any one year. Let us take for example the imports and exports for 1889 and a.n.a.lyze them by countries.

I now present a table in which I place in one group the gold-using countries, and in another the silver and paper-using countries.

_Exports and imports of the United States to and from the various gold-using and silver-using or paper-using countries of the world for the fiscal year ending June 30, 1889._

------------------------------------+---------------+--------------- Countries.

Exports.

Imports.

------------------------------------+---------------+--------------- Gold-using countries:

Canada

$42,141,156

$43,009,473 Belgium

23,345,219

9,816,435 Denmark

3,903,937

846,904 France

46,120,041

69,566,618 Germany

68,002,594

81,742,546 Great Britain

382,981,674

178,269,067 Greece

165,079

988,923 Italy

12,604,848

17,992,149 Netherlands

15,062,939

10,950,843 Portugal and its possessions

3,266,814

1,282,556 Spain

11,946,348

4,636,661 Sweden and Norway

2,615,569

2,983,319 Turkey

--

4,687,731 British possessions in Africa

2,936,213

895,344 British possessions in Australia

12,321,980

5,998,211

Silver and paper using countries:

Austria-Hungary

726,156

7,642,297 Russia

8,364,545

2,985,631 Mexico

11,486,896

21,253,601 Central America

4,325,923

8,414,019 Hawaii

3,375,661

12,847,740 Argentine Republic

9,293,856

5,454,618 Brazil

9,351,081

60,403,804 Chili

2,972,794

2,622,625 Peru

780,835

314,032 Colombia

3,821,017

4,263,519 Uruguay

2,192,848

2,986,964 Venezuela

3,738,961

10,392,569 Cuba

11,691,311

52,130,623 Hayti

5,340,270

5,211,704 Porto Rico

2,224,931

3,707,373 British West Indies

10,453,973

20,723,268 Dutch West Indies

887,778

654,320 China

6,477,512

18,508,678 India, British

4,330,413

20,029,601 India, Dutch

2,249,604

5,207,254 j.a.pan

4,619,985

16,687,992 ------------------------------------+---------------+---------------

By this table it is seen that the only gold-using countries having a balance of trade against us are Canada, $868,317; France, $23,446,577; Greece, $823,824; Germany, $13,739,952; Italy, $5,387,301; Sweden and Norway, $367,850; Turkey, $4,687,731--making a total balance against us in gold-using countries, $49,321,452--against which we have a balance in our favor with Great Britain alone of over $200,000,000.

The balance against us in favor of all the silver using countries could of course be readily settled in silver; and by carefully noting the figures of the table last given it will be seen that it is in the last degree improbable that there will ever be a balance of trade against us in the gold using countries, taken as a whole.

Hence it is clear that if we had no gold at all we could readily settle all foreign balances that might be against us.

Nations, however, ultimately, and on the whole, square their accounts with commodities. Every nation must buy what it wants with its own products. In this country especially have we nothing to fear, because any temporary balance against us could always be met by the yield from our own mines. No country has any difficulty by reason of my difference in money systems in buying what any other nation has to sell.

This view is supported by all writers on political economy. I need quote but one. Professor Cairnes, professor of political economy in the University College of London, in his able work on "Some unsettled questions in political economy" (1874), says:

It appears to me that the influence attributed by many able writers in the United States to the depreciation of the paper currency as regards its effects on the foreign trade of the country is, in a great degree, purely imaginary. An advance in the scale of prices, _measured in gold_, in a country, if not shared by other countries, will at once affect its foreign trade, giving an impulse to importations and checking the exportation of all commodities other than gold. A similar effect is very generally attributed by American writers to the action on prices of the greenback inconvertible currency.

But it may easily be shown that this is a complete illusion.

Foreigners do not send their products to the United States to take back greenbacks in exchange. The return which they look for is either gold or the commodities of the country; and if these have risen in price in proportion as the paper money has been depreciated, how should the advance in paper prices const.i.tute an inducement for them to send their goods thither? The nominal gain in greenbacks on the importation is exactly balanced by the nominal loss when those greenbacks came to be converted into gold or commodities. The gain may, in particular cases, exceed the loss, but, if it does, the loss will also, in other cases, exceed the gain. On the whole, and on an average, they can not but be the equivalents of each other.

Mr. President, the best place in the world where we can have gold is not in the Treasury of the United States, not in any sub-treasury, but in circulation, if not in our own country, then, in the foreign countries where our surplus products are sold. That is where gold would do us the most good by making money plentiful and prices correspondingly high. It does us no good here whatever, locked up as it always is, and doing none of the work of money, but simply reduces to the minimum the tax-paying and debt-paying power of our wheat- and cotton-growing communities.

An unjust money should not be tolerated, whatever the material of which it may be composed, and the people of this country will not tolerate it.

They do not fear the outflow of gold. If, in order to retain it, they must continue to lose as they have been losing for the past fifteen years, they will favor its going, and raise a shout of joy when it does go. With a perfect money system in our own country the range of our domestic prices would continue stable and equitable without regard to the prices of foreign countries. Our foreign trade would take care of itself, and whatever the balances might be, they would be much oftener in our favor than against us, and in reality concern only the importing merchant and not the Government or the people of the United States. The difficulty of gold-using countries to get our money, in which to pay us the balances they would owe us, would be much greater than our difficulty in getting their money, in which to pay them the occasional balances we might owe them.

Much the more serious question, (if it be a serious question at all, which I deny) is how they shall get our money, not how we shall get theirs. As the balances would be for the most part in our favor, it is for them to take such steps as may be necessary in order to pay us. But there is no just reason to apprehend difficulty in either case. A great country like the United States will have no trouble in buying the money of any other country at equitable rates--at rates regulated by the purchasing powers of the moneys of the two countries, respectively.

No country in the history of the world, having a money local to itself, has ever found the slightest difficulty in buying, upon ratios determined by the relative purchasing powers of the two kinds of money, a sufficient amount of foreign exchange (which simply means the money of another country) to meet all adverse balances of trade.

While earnestly advocating the full remonetization of silver and the maintenance in this country of a money volume sufficient to insure a steady level of prices and an unchanging value in the money unit, I entirely disclaim any desire for an inflation of the currency. My contention is that without silver we can not keep prices from further decline, and can not have enough money to serve the growing needs of population, industry, and commerce.

At the same time I can not refrain from expressing the conviction that, as between inflation and contraction, no careful student of history and of economic science can for a moment hesitate in deciding that the evils inflicted on society by contraction have been longer in duration and infinitely greater in degree than any that have ever resulted from inflation. During all periods in which there has been a generous increase in the money-volume of a country or of the world, activity and prosperity have been its accompaniment. I challenge the citation of an instance to the contrary.

With a volume of money increasing at a rate sufficient to meet the demands of a growing population, and especially if the money be such as will not leave the country, but, under all circ.u.mstances, will remain in it, to sustain prices, preserve equities, and reward labor, no country with a proper coordination of its industries can be otherwise than prosperous.

The property of mobility--of fluidity--which is so much lauded in gold, is precisely the property least to be desired in the money of a country, if that property of mobility or fluidity is to keep alternately bringing money into and taking it out of the country, disturbing prices and disarranging equities. When it comes, if it enters into circulation, prices rise; when it goes, prices fall, and thus, instead of having a steady and level platform of prices on which the trade and industry of the Republic may rest, like the firm and level platform of liberty upon which all our citizens stand, we whose business it is to "see that the Republic take no harm," furnish our people with an "inclined plane" of finance on which all their business must be conducted. Men buying this month at the elevated end of the platform find themselves selling next month at the depressed end.

Whenever in the history of a country there has been least reliance on international money (gold) and more reliance on merely national money (even of paper when reasonable limits were placed upon its quant.i.ty), prosperity has been everywhere present. I need not recall to the minds of Senators the wave of prosperity that swept over this country when it was without any international money and resorted to the "greenback"

currency.

When, as a result of the Franco-German war, France was deprived of international money, suspended specie payments, and resorted to a properly limited paper currency, her progress was unbounded.

No period in the history of Great Britain can compare for activity, prosperity, or achievement, with the twenty years preceding 1816, when specie payments were suspended, and during which period, as testified to by witnesses before the secret committee of Parliament, the discount rate of the Bank of England did not buffer a single change; whereas from that period to 1847 the rate was changed sixteen times, and from 1847 to 1874 as many as 274 times, the fluctuations being sometime of the most violent character.

When gold threatens to leave Great Britain the rate of discount at the Bank of England is raised, with the view of discouraging, if not preventing, the outflow. Raising the rate of discount is like putting the brakes on a railroad train; lowering the rate is like letting off the brakes.

These changes were not due to any greater demand for money but to the movements of gold. There was frequently, in the condition of business, no warrant whatever for a rise in the rate of discount. The only reason for it was to prevent gold from performing what "our most conservative financiers" denominate its "n.o.ble" function of "mobility"--of "fluidity"--namely, the function of going "where it was wanted." This function of going "where it is wanted" is described as the great "mission" of gold, and it is a.s.sumed that it will never be wanted at more than one place at a time. Yet hear what the chancellor of the exchequer of Great Britain said a few days ago in the House of Commons:

I admit that, as interested in the commerce and monetary system of this country I feel a kind of shame that on the occasion of 2,000,000 or 3,000,000 of gold being taken from this country to Brazil, or any other country, it should immediately have the effect of causing a monetary alarm throughout the country. (Speech of the chancellor of the exchequer in the House of Commons, April 18, 1890.)

This is a suggestive admission, from so well-informed a source, as to the operation of the single gold standard. I commend it to those who would circ.u.mscribe and hamper the prosperity of this country by making gold alone the standard of all values.

I have thought it necessary, Mr. President, to state what I conceive to be the true principles of the science of money, the principles that, with the progress of time and growth of intelligence, must prevail the world over; because, without a clear understanding of the relation which the quant.i.ty of money in a country bears to the prosperity and happiness of its people, there would be no justification for an addition of either silver, gold, or any other form of money to the quant.i.ty already in circulation. If the value of money depends on quant.i.ty, then, as long as the world adheres to the automatic theory of money, my contention is that all the silver produced from all the mines of the world should be trans.m.u.ted into coin; and even then, if the wants of the world continue to increase as they have been increasing, it is only a question of time, and that not far distant, when the combined supply of both metals will be insufficient to maintain the equities in time transactions.

The world having decreed to stand by the automatic system we are now dealing with the question as a practical one.

The only relief that can be had is to adhere strictly to that system, and give it full scope. Remove all legislative restrictions and let the world have the full benefit of all the precious metals that are yielded by the mines.