Now, sir, I am willing to do all I can with safety even to taking great risks to increase the value of silver to gold at the old ratio, and to supply paper subst.i.tutes for both for circulation, but there is one immutable, unchangeable, ever-existing condition, that the paper subst.i.tute must always have the same purchasing power as gold and silver coin, maintained at their legal ratio with each other. I feel a conviction, as strong as the human mind can have, that the free coinage of silver now by the United States will be a grave mistake and a misfortune to all cla.s.ses and conditions of our fellow-citizens. I also have a hope and belief, but far from a certainty, that the measure proposed for the purchase of silver bullion to a limited amount, and the issue of Treasury notes for it, will bring silver and gold to the old ratio, and will lead to an agreement with other commercial nations to maintain the free coinage of both metals.
And now, sir, I want to state in conclusion, without any purpose to bind myself to detail, that I will vote for any measure that will, in my judgment, secure a genuine bimetallic standard--one that will not demonetize gold or cause it to be h.o.a.rded or exported, but will establish both silver and gold as common standards and maintain them at a fixed ratio, not only in the United States but among all the nations of the world. The principles adopted by the Acts of 1853 and 1875 have been sustained by experience and should be adhered to. In pursuance of them I would receive into the Treasury of the United States all the gold and silver produced in our country at their market value, not at a speculative or forced value, but at their value in the markets of the world. And for the convenience of our people I would represent them by Treasury notes to an amount not exceeding their cost. I would confer upon these notes all the use, qualities, and attributes that we can confer within our const.i.tutional power, and support and maintain them as money by coining the silver and gold as needed upon the present legal ratios, and by a pledge of all the revenues of the Government and all the wealth and credit of the United States.
And I would proclaim to all our readiness, by international negotiations or treaties, to bring about an agreement among nations for common units of value and of weights and measures for all the productions of the world.
This hope of philosophers and statesmen is now nearer realization than ever before. If we could contribute to this result it would tend to promote commerce and intercourse, trade and travel, peace and harmony among nations. It would be in line with the civilization of our age.
It is by such measures statesmen may keep pace with the marvellous inventions, improvements, and discoveries which have quadrupled the capacity of man for production, made lightning subservient to his will, revealed to him new agencies of power hidden in the earth, and opened up to his enterprise all the dark places of the world. The people of the United States boast that they have done their full share in all this development; that they have grown in population, wealth, and strength; that they are the richest of nations, with untarnished credit, a model and example of self-government without kings or princes or lords. Surely this is no time for a radical change of public policy which seems to have no motive except to reduce the burden of obligations freely taken, a change likely to impair our public credit and produce disorder and confusion in all monetary transactions. Others may see reasons for this change, but I prefer to stand by the standards of value that come to us with the approval and sanction of every party that has administered the Government since its beginning.
JOHN P. JONES,
OF NEVADA. (BORN 1830.)
ON TREASURY NOTES AND SILVER,
IN THE SENATE OF THE UNITED STATES, MAY 12, 1890.
MR. PRESIDENT, the question now about to be discussed by this body is in my judgment the most important that has attracted the attention of Congress or the country since the formation of the Const.i.tution. It affects every interest, great and small, from the slightest concern of the individual to the largest and most comprehensive interest of the nation.
The measure under consideration was reported by me from the Committee on Finance. It is hardly necessary for me to say, however, that it does not fully reflect my individual views regarding the relation which silver should bear to the monetary circulation of the country or of the world.
I am, at all times and in all places, a firm and unwavering advocate of the free and unlimited coinage of silver, not merely for the reason that silver is as ancient and honorable a money metal as gold, and equally well adapted for the money use, but for the further reason that, looking at the annual yield from the mines, the entire supply that can come to the mints will at no time be more than is needed to maintain at a steady level the prices of commodities among a constantly increasing population.
History gives evidence of no more prolific source of human misery than a persistent and long continued fall in the general range of prices.
But, although exercising so pernicious an influence, it is not itself a cause, but an effect.
When a fall of prices is found operating, not on one article or cla.s.s of articles alone, but on the products of all industries; when found to be not confined to any one climate, country, or race of people, but to diffuse itself over the civilized world; when it is found not to be a characteristic of any one year, but to go on progressively for a series of years, it becomes manifest that it does not and can not arise from local, temporary, or subordinate causes, but must have its genesis and development in some principle of universal application.
What, then, is it that produces a general decline of prices in any country? It is produced by a shrinkage in the volume of money relatively to population and business, which has never yet failed to cause an increase in the value of the money unit, and a consequent decrease in the price of the commodities for which such unit is exchanged. If the volume of money in circulation be made to bear a direct and steady ratio to population and business, prices will be maintained at a steady level, and, what is of supreme importance, money will be kept of unchanging value. With an advancing civilization, in which a large volume of business is conducted on a basis of credit extending over long periods, it is of the uttermost importance that money, which is the measure of all equities, should be kept unchanging in value through time.
A reduction in the volume of money relatively to population and business, or, (to state the proposition in another form) a volume which remains stationary while population and business are increasing, has the effect of increasing the value of each unit of money, by increasing its purchasing power.
We have 22,000,000 workmen in this country. In order that they may be kept uninterruptedly employed it is absolutely necessary that business contracts and obligations be made long in advance. Accordingly, we read almost daily of the inception of industrial undertakings requiring years to fulfil. It is not too much to say that the suspension for one season of the making of time-contracts would close the factories, furnaces, and machine-shops of all civilized countries.
The natural concomitant of such a system of industry is the elaborate system of debt and credit which has grown up with it, and is indispensable to it. Any serious enhancement in the value of the unit of money between the time of making a contract or incurring a debt and the date of fulfilment or maturity always works hardship and frequently ruin to the contractor or debtor.
Three fourths of the business enterprises of this country are conducted on borrowed capital. Three fourths of the homes and farms that stand in the name of the actual occupants have been bought on time, and a very large proportion of them are mortgaged for the payment of some part of the purchase money.
Under the operation of a shrinkage in the volume of money this enormous ma.s.s of borrowers, at the maturity of their respective debts, though nominally paying no more than the amount borrowed, with interest, are, in reality, in the amount of the princ.i.p.al alone, returning a percentage of value greater than they received--more than in equity they contracted to pay, and oftentimes more, in substance, than they profited by the loan. To the man of business this percentage in many cases const.i.tutes the difference between success and failure. Thus a shrinkage in the volume of money is the prolific source of bankruptcy and ruin. It is the canker that, unperceived and unsuspected, is eating out the prosperity of our people. By reason of the almost universal inattention to the nature and functions of money this evil is permitted, un.o.bserved, to work widespread ruin and disaster. So subtle is it in its operations that it eludes the vigilance of the most acute. It baffles all foresight and calculation; it sets at naught all industry, all energy, all enterprise.
The advocates of the single gold standard deem even silver money much better money than greenbacks. Does it then follow that when greenbacks were our only money--good enough money to carry our nation through the greatest war in all history--we were "along-side" or underneath the barbarous nations of the world? It is not the form or material of a nation"s money that fixes its status relatively to other nations. That is accomplished by the vitality, the energy, the intellectuality and effective force of its people. The United States can never be placed "alongside" any barbarous nation, except by compelling our people to compete with barbarous peoples--compelling them to sell the products of American labor at prices regulated by the cost of labor and manner of living in barbarous countries. As well might it be said that we are alongside the barbarous people of India because we continue to produce wheat and cotton.
The distinguishing feature of all barbarous nations is the squalor of their working cla.s.ses. The reward of their hard toil is barely enough to maintain animal existence. A civilized people are placed alongside a barbarous one when, in their means of livelihood, the foundation of their civilization, they are made to compete with the barbarians. That was the result accomplished for the farmers and planters of the United States when silver was demonetized.
It is a remarkable circ.u.mstance, Mr. President, that throughout the entire range of economic discussion in gold-standard circles, it seems to be taken for granted that a change in the value of the money unit is a matter of no significance, and imports no mischief to society, so long as the change is in one direction. Who has ever heard from an Eastern journal any complaint against a contraction of our money volume; any admonition that in a shrinking volume of money lurk evils of the utmost magnitude? On the other hand, we have been treated to lengthy homilies on the evils of "inflation," whenever the slightest prospect presented itself to a decrease in the value of money--not with the view of giving the debtor an advantage over the lender of money, but of preventing the unconscionable injustice of a further increasing value in the dollars which the debtor contracted to pay. Loud and re-sounding protests have been entered against the "dishonesty" of making payments in "depreciated dollars." The debtors are characterized as dishonest for desiring to keep money at a steady and unwavering value. If that object could be secured, it would undoubtedly be to the interest of the debtor, and could not possibly work any injustice to the creditor. It would simply a.s.sure to both debtor and creditor the exact measure for which they bargained. It would enable the debtor to pay his debt with exactly the amount of sacrifice to which, on the making of the debt, he undertook to submit, in order to pay it.
In all discussions of the subject the creditors attempt to brush aside the equities involved by sneering at the debtors. But, Mr. President, debt is the distinguishing characteristic of modern society. It is through debt that the marvellous developments of the nineteenth-century civilization have been effected. Who are the debtors in this country?
Who are the borrowers of money? The men of enterprise, of energy, of skill, the men of industry, of fore-sight, of calculation, of daring.
In the ranks of the debtors will be found a large preponderance of the constructive energy of every country. The debtors are the upbuilders of the national wealth and prosperity; they are the men of initiative, the men who conceive plans and set on foot enterprises. They are those who by borrowing money enrich the community. They are the dynamic force among the people. They are the busy, restless, moving throng whom you find in all walks of life in this country--the active, the vigorous, the strong, the undaunted.
These men are sustained in their efforts by the hope and belief that their labors will be crowned with success. Destroy that hope and you take away from society the most powerful of all the incentives to material development; you place in the pathway of progress an obstacle which it is impossible to surmount.
The men of whom I have spoken are undoubtedly the first who are likely to be affected by a shrinkage in the volume of money.
The highest prosperity of a nation is attained only when all its people are employed in avocations suited to their individual apt.i.tudes, and when a just money system insures an equitable distribution of the products of their industry. With our present complex civilization, in order that men may have constant employment, it is indispensable that work be planned and undertakings projected years in advance. Without an intelligent forecast of enterprises large numbers of workmen must periodically be relegated to idleness. Enterprises that take years to complete must be contracted for in advance, and payments provided for.
A constant but unperceived rise in the value of the dollar with which those payments must be made, baffles all plans, thwarts all calculation, and destroys all equities between debtor and creditor. If we cannot intelligently regulate our money volume so as to maintain unchanging the value of the money unit, if we cannot preserve our people from the blighting effects which an increase in the measuring power of the money unit entails upon all industry, to what purpose is our boasted civilization?
By the increase of that measuring power all hopes are disappointed, all purposes baffled, all efforts thwarted, all calculations defied. This subtle enlargement in the measuring power of the unit of money (the dollar) affects every cla.s.s of the working community. Like a poisonous drug in the human body, it permeates every vein, every artery, every fibre and filament of the industrial structure. The debtor is fighting for his life against an enemy he does not see, against an influence he does not understand. For, while his calculations were well and intelligently made, and the amount of his debts and the terms of his contracts remain the same, the weight of all his obligations has been increased by an insidious increase in the value of the money unit.
In an ancient village there once stood a gold clock, which, ever since the invention of clocks, had been the measure of time for the people of that village. They were proud of its beauty, its workmanship, its musical stroke, and the unfailing regularity with which it heralded the pa.s.sing hours. This clock had been endeared to all the inhabitants of the village by the hallowed a.s.sociations with which it was identified.
Generation after generation it had called the children from far and wide to attend the village school; its fresh morning peal had set the honest villagers to labor; its noonday notes had called them to refreshment; its welcome evening chime had summoned them to rest.
From time immemorial, on all festive occasions, it had rung out its merry tones to a.s.semble the young people on the green; and on the Sabbath it had advertised to all the countryside the hour of worship in the village church. So perfect was its mechanism that it never needed repair. So proud were the people of this wonderful clock that it became the standard for all the country round about, and the time which it kept came to be known as the gold standard of time, which was universally admitted to be correct and unchanging.
In the course of time there wandered that way a queer character, a clock-maker, who being fully instructed in the inner workings of time-tellers, and not having inherited the traditions of that village, did not regard this clock with the veneration accorded to it by the natives. To their astonishment he denied that there was really any such thing as a gold standard of time; and in order to prove that the material, gold, did not monopolize all the qualities characteristic of clocks, he placed alongside the gold clock, another clock, of silver, and set both clocks at 12 noon. For a long time the clocks ran along in almost perfect accord, their only disagreement being that of an occasional second or two, and even that disagreement only at rare intervals, such as might naturally occur with the best of clocks. But the Council of the village, in their admiration for the gold clock, pa.s.sed an ordinance requiring that all the weights (the motive power) of the silver clock, except one, be removed from it, and attached to those of the gold clock. Instantly the clocks began to fall apart, and one day, as the sun was pa.s.sing the meridian, the hands of the gold clock were observed to indicate the hour of 1, while those of the silver clock indicated 12.15. At this everybody in the village ridiculed the silver clock, derided the silver standard, and hurled epithets at the individual who had had the temerity to doubt the infallibility of the gold standard.
Finally, the divergence between the clocks went so far that it was noon by the gold standard when it was only 6 A.M. by the silver standard, so that those who were guided by the gold standard, notwithstanding that it was yet the gray of the morning, insisted on eating their mid-day meal, because the gold standard indicated that it must be noon. And when the sun was high in the heavens, and its light was shining warm and refulgent on the dusty streets of the village, those who observed the gold standard had already eaten supper and were preparing for bed.
But this state of things could not last. It was clear that the difference between the standards must be reconciled, or all industry would be disarranged and the village ruined.
Discussion was rife among the villagers as to the cause of the difference. Some said the silver clock had lost time; others that both clocks had lost time, but the silver clock more than the gold; while others again a.s.serted that both clocks had gained time, but that the gold clock had gained more than the silver clock.
While this discussion was at its height a philosopher came along and observing the excitement on the subject remarked: "By measuring two things, one against the other, you can never arrive at any determination as to which has changed. Instead of disputing as to whether one clock has lost or another gained would it not be well to consult the sun and the stars and ascertain exactly what has happened?"
Some demurred to this because, as they a.s.serted, the gold standard was unchanging and was always right no matter how much it might seem to be wrong; others agreed that the philosopher"s advice should be taken.
Upon consulting the sun and the stars it was discovered that what had happened was that both clocks had gained in time but that the gain of the silver clock had been very slight, while that of the gold clock had been so great as to disturb all industry and destroy all correct sense of time.
Nothwithstanding this demonstration, there were many who adhered to the belief that the gold standard was correct and unchanging, and insisted that what appeared to be its aberrations were not in reality due to any fault of the gold clock, but to some convulsion of nature by which the solar system had been disarranged and the planets made to move irregularly in their orbits.
Some of the people also remembered having heard at the village inn, from travellers returning from the East, that silver clocks were the standard of time in India and other barbarous countries, while in countries of a more advanced civilization gold clocks were the standard. They therefore feared that the use of the silver clock might have the effect of degrading the civilization of the village by placing it alongside India and other barbarous countries. And although the great ma.s.s of the people really believed, from the demonstration made, that the silver standard of time was the better one, yet this objection was so momentous that they were puzzled what course to pursue, and at last advices were consulting the manufacturers of gold clocks as to what was best to be done.
Now our gold standard men are in the position of those who first refuse to look at anything beyond the two things, gold and silver, to see what has happened, and who, when it is finally demonstrated that all other things retain their former relations to silver, still persist that the law which makes gold an unchanging standard of measure is more immutable than that which holds the stars in their courses. If they will compare gold and silver with commodities in general, to see how the metals have maintained their relations, not to one another but to all other things, they will find that instead of a fall having taken place in the value of silver, the change that has really taken place is a rise in the value of both gold and silver, the rise in silver being relatively slight, while that of gold has been ruinously great. And those who do not shut their eyes to the truth must see that the change of relation between the metals has been effected by depriving silver of its legal-tender function, as the want of accord between the clocks was brought about by depriving the silver clock of a portion of its motive power--the weights. The only thing that has prevented a greater divergency between the metals is the limited coinage by the United States--the single weight that, withheld from the gold clock, prevented its more ruinous gain.