sounder basis than that or fall altogether, As a matter of fact the bill was before Congress for nearly three years. It was first submitted to the Senate on April 25, 1870, and to the House on June 25. It was debated in the Senate and passed on June 10, 1871, by a vote of 36 to 14. It was debated in the House in 1872 and passed, with amendments, by a vote of 110 to 13. It was passed in the Senate, as amended, Jan. 17, 1873, a conference committee was appointed, and the bill became a law, Feb. 12, 1873. The reports accompanying the bill, especially Mr. Knox's, explained the fact, and the purpose of dropping the silver dollar from the coinage. This fact was therefore brought home to the members, who discussed it, and Mr. William D. Kelley, Chairman of the Committee on Coinage, Weights and Measures, in reporting the bill to the House, said that it had been most carefully and deliberately considered by the committee, who had gone over it "line by line and word by word." Although he subsequently joined the advocates of free coinage, he said on this occasion that "it is impossible to retain the double standard."

All this is interesting as history, but it had nothing to do with the merits of the question. After 1873 and until 1878 the country was not only in fact but in law on a gold basis. Silver had begun to be cheaper, as has already been shown; but it was not until 1876 that the fall had become great enough to arouse the owners of mines and the friends of silver generally to the beginning of a contest.

By 1876 the price of silver in the London market had dropped from 59 1-4d. an ounce in 1873 to 52 3-4d. The causes of this decline open up a very interesting field of investigation and discussion. The demand for gold had been growing since 1849. The production of this metal in twenty-five years from 1851 to 1875 was enormous. The value of the output during that period was $3,317,625,000 as against a silver product of $1,395,125,000. Prof. Laughlin, in his "History of Bimetallism in the United States," has shown that this output of gold was a trifle more than the gold product of the 357 years from 1493 to 1850. The price of gold fell, and consequently obtained a still wider circulation as money. It drove silver into the melting pot, and threatened the small change not only of the United States but of Continental Europe. Therefore the Latin Union was formed and the frame was lightened just as our own 50, 25 and 10 cent pieces were lightened. In 1840 the annual production of gold was about $15,000,000, in 1851 it was $150,000,000. Between 1852 and 1864 France absorbed $680,000,000 of gold and sent abroad $345,000,000 of silver. There was no disposition manifested any where to surrender gold and to procure silver in its place. On the contrary, a decided preference was shown for gold, and nowhere more than in France, where, as time went on, silver coins were changed and limited in purchasing power, but gold was left untouched.

In this country the annual product of gold increased from $889,085 in 1847 to $10,000,000 in 1848. The next year it was $40,000,000, the next $50,000,000, and from then to 1859 it ranged from $50,000,000 to $65,000,000. In 1858 the product of silver in the United States was $500,000. Before then it had never exceeded $50,000 in a year. It was not until after 1860 that it reached $2,000,000 a year. From that year it rapidly increased, and in 1873 it was $35,750,000, while the product of gold for the same period was $36,000,000. The production of silver increased, and gold about held its own.

Undoubtedly this increase in the supply of silver made the metal cheaper, but there were other causes than the increase of supply to cheapen silver. Alongside with the increase there was a decrease of demand. From 1848 to 1860, when the annual product of gold in this country was increasing from $10,000,000 to $50,000,000, $60,000,000 and $65,000,000, the product of silver was inconsiderable.

But the price of silver did not materially fall, notwithstanding the increased production of the years immediately following 1860. The highest prices ranged from 60 3-4d. to 61.16. But in 1873 the price of silver fell so much that the average price was 59 1-4d., and in the three following years the

fall was so great that the lowest price in London in 1876 was 46 3-4d. and the highest 58 1-2d. By this time the annual product of silver had grown to be $91,208,750 as against $115,756,750 of gold. The interpretation of this is at least that the fall in price did not result wholly from the increase of supply. The demand had a good deal to do with it. Much stress is laid on the new German coinage act and the consequent increase of the supply of silver in the world's bullion market. The fact is that from 1871 to 1876 the German sales of silver did not exceed $30,000, 000. At the same time the German demand for gold for the purpose of establishing the single gold standard was about $414,000,000. This demand for gold had a greater effect on the price of silver than the sale of the silver coins for bullion. At the same time there was a decreased demand for silver on the Continent. Belgium and Holland had already closed their mints to silver, and the French mints was closed in 1876. India, too, helped the depreciation of the price of silver. Her indebtedness to England temporarily suspended her enormous power for absorbing silver. In 1869-1870 the excess of India imports of silver was $36,601,685; in 18701871 it fell to $4,709,685; in 1872-1873 it was down to $3,523,220. It was not back to large figures until 1878. The effect of the decreased demand is shown in our own statistics of exports. In 1871 our total exports of silver amounted to $31,755,780 ; in 1876 they were down to $25,329,252 notwithstanding the greatly increased production, which in the same year advanced from $23,000,000 to $38,800,000. Nor did the decline of exportations cease with 1876. In 1882 they were only $16,829,599, while the silver product of the country had grown to be $46,800,000.

In addition to the increased supply and the exceptional state of things in India, the fact that silver had generally gone out of use as a standard of value in Europe must be taken into consideration in seeking for the reason of the fall in price in 1876. It was this fall that led to the movement in this country to "rehabilitateˇ silver. Before this, gold was the native product that appealed successfully to Con gress for protection. Now silver was becoming the national metal. In 1876 Colorado was admitted as a State, the enabling act having been passed in 1875. The silver interests thus secured two Senators in Congress. One of the two new Senators was Henry M. Teller, who is still a member of the body, and is an able and experienced advocate of the cause of the free coinage of silver. In 1876 the products of gold and silver were about equal. By 1879 the annual product of silver exceeded in commercial value that of gold, and this excess steadily increased until 1893. There is no doubt, whatever may be said as to causes governing the market prior to 1876, that this rapid increase of silver production since then accounts in great measure for the great fall of price from an average of 52 3-4d. to about 33d. The movement for the free coinage of silver in 1876 was very brisk. Several bills were introduced in the House for the issue of coin notes and for the re-establishment of the silver dollar. One of these was passed, but received no consideration from the Senate. On Nov. 5, 1877, Mr. Bland introduced a free coinage and unlimited legal-tender silver bill, which was passed, without debate and under suspension of the rules, by a vote of 163 to 34. When the bill reached the Senate it was placed in charge of Mr. Allison, who reported it back from the Finance Committee with important amendments. The bill passed the Senate, Feb. 15, 1878, by a vote of 48 to 21. As it passed it provided for the monthly purchase of not less than $2,000,000 worth of silver bullion or not more than $4,000,000 worth “at the market price thereof," the bullion to be coined into 412 1-2 grain dollars. Silver certificates and an international monetary conference were provided for. Free coinage was defeated. After some protest the House concurred in the Senate amendments by a vote of 203 to 72. On Feb. 28 President Hayes vetoed the bill. On the same day both houses passed it over his veto. While the discussion of these measures was in progress Senator Matthews secured the passage of a resolution declaring that the United States might lawfully redeem its bonds in silver

Our

dollars. The result of the passage of this resolution was immediately felt. bonds began to come back from Europe. In one week $10,000,000 of them were thrown upon the market, and the amount sent home was estimated by Mr. Allison to have reached $100,000,000. We had warning fifteen years ago of what has resulted from the act of 1890.

Under the act of 1878 the Treasury never coined more than $2,000,000 worth of silver a month. Sometimes the bullion owners demanded more than the market rates, when Secretary Sherman, interpreting the law as Mr. Carlisle has lately interpreted it, declined to make the purchases. The Government found it almost impossible to force the new silver dollars into circulation. The people would not take them. The Clearing-House in New York declined to receive the certificates in settlement of balances, until they were compelled to do so by an act of Congress which forbade national banks from joining an association covered by such a rule. The Government did its best. It paid the cost of transporting the dollars. It discontinued the issue of legal-tender notes of denominations less than five dollars. It issued one, two and five dollar silver certificates, and finally obtained a circulation for the smaller of these.

Fortunately for the country, the surrender of large amounts of national bank currency at this time made a place for the new silver currency, so that all the evil effects of a silver coinage adopted in the face of the action of the commercial world and in antagonism to it were not felt. Under the act of 1878 the Government purchased 291,292,019 ounces of silver, for which it paid $303,190,262. But out of it the Government issued in coins 378,166,795 silver dollars. The purchases of the Government did not check the rapid decline in the price of silver, as is shown by the following quotations of the average London price per ounce :

The friends of silver were not satisfied. They insisted that the Government should do something more for their favorite metal. On June 17, 1890, the Senate passed a free coinage bill by a vote of 42 to 25. The House did not concur, and there was a compromise measure agreed upon by a conference committee, which became a law, known as the Sherman act. The law required the monthly purchase of 4,500,000 ounces, and the coinage every month of 2,000,000 ounces of the bullion so purchased until July 1, 1891. After that bars were to be coined for the redemption of the legal tender Treasury notes authorized by the act, in the discretion of the Secretary. The act recited further that it was the "established policy of the United States to maintain the two metals on a parity with each other."

The Treasury purchased under the Sherman law 168,674,682 ounces at a cost of $155,931,002. At 60 cents an ounce this bullion is worth $101,204,809, a loss to the Government of $54,726,193.

The operation of the Sherman law was quickly felt. Although there was no free coinage, Gresham's law began to act. Holders of American securities became alarmed lest they would be obliged to accept payment in silver, and a general hoarding and exportation of gold followed. The following table will show the in

crease of our exports of gold coin and gold bullion:

Subtracting imports, there was in these years a net loss of gold to the United States of $230,234,403.

In the mean time the departure of gold was shown in another way. In January, 1890, of the customs dues received by the Government 92.6 per cent. were paid in gold; in December 88.3 per cent. was in gold. In December, 1891, the amount of gold received for customs dues had fallen to 65.4 per cent.; in January, 1893, only 8.9 per cent. was paid in gold; and though the hoarded gold forced from the bank vaults by the currency famine of 1893 temporarily swelled the gold receipts from customs, the proportion in January, 1894, was but 17.6 per cent.; from which it rapidly dwindled, until in October and November, 1894, gold receipts had entirely ceased.

The business distress which followed the loss of confidence in our securities and inevitably in each other, and in everything else that usually commands the respect of business men, is still upon us.

VI.

RECENT DEVELOPMENTS.

Congress was called together in the summer of 1893 for the purpose of repealing the Sherman act. After many vexatious delays, involving disaster and loss to the business interests of the country, a bill was passed unconditionally repealing the purchasing clause of the law. In the meantime, June 26, 1893, the Indian mints were closed to the free coinage of silver. While the effect on the monetary and commercial relations of India has not been what the authors of the act ex pected, the immediate result was a panic in silver. The price fell at once in London, reaching 302d., the lowest point ever touched up to that date. This was in June. In July the price rose to 321⁄2d., but in December it was down to 311⁄2d. in London and 70.25 cents an ounce in New York. Silver is now (January 1, 1895) selling at 27d. in London, and at 5934 cents an ounce in New York, and in the meantime the production of gold has enormously increased. In the calendar year of 1893 it was the largest known in the history of gold mining, the output being valued at $155,522,000. It is expected that the gold output for 1894 will be larger than that of 1893 by some $20,000,000, which will make it more than equal to the rate of gold and silver output of 1861-1865, and that the increase will continue indefinitely. In other words, the world will soon have as much gold as a basis of value as it had of both gold and silver together in the days before the act of 1873 was passed, before Germany was on a gold basis, and when the Latin Union was trying to keep the two unequal metals in parity.

VII.

A CENTURY'S STRUGGLE NOW ENDED.

These developments raise the point as to whether the whole question of bimetallism, as compared with a single standard either of gold or silver, is not being satisfactorily answered by the course of events outside of legislation. Whatever may have been the case in earlier periods, when governments were comparatively isolated, but practically omnipotent in influencing trade conditions within their respective boundaries, the developments of the last half century-in breaking down international barriers, in the increasing dependence of governments upon the conditions of finance and commerce, in the unexampled development of international as compared with local concerns-have

practically arrived at a point where laws are as powerless to affect the tides of commerce as are imaginary boundary lines to limit the climates or change the natural relations of the territories through which they run. In other words, in the essential matters of currency, commerce has become all-powerful. From now en the offices of legislation are two-either so to adapt the administrative functions of government as to effectuate the rapidly developing unwritten law of commerce, and thus to keep a people at the very forefront of civilization; or, either to refuse thus to serve it, or to obstruct it in serving itself, thereby keeping it at an increasing disadvantage.

It is, therefore, not to legislative but to commercial development that we must look for the signs which are to frame our expectations. These are marked and uniform in suggestion.

Fifty years ago the world's aggregate of coined money, silver and gold, was probably a fair supply for commerce as it then existed. Since then the question of supply and demand for coin currency has been vitally affected by three factors, namely:

(1). The development of facilities for communication, greater since 1840 than from the time of Abraham to that date, and the later corresponding development of commercial expedients; which have reduced the absolute amount of coin necessary for a given amount of exchanges.

(2.) Discoveries of new deposits and cheapening of gold and silver production in America, Australia and Africa; which have been such in the last half century as to add to our supply of these metals a greater amount than had been secured in a thousand years before.

(3.) The increasing (now almost universal) extent to which the use of silver as a basis for currency has been renounced by one nation after another.

Of course it must be remembered that in the case of a comparatively indestructible product, such as gold or silver, the world's stock on hand is so great as to permit its value to be affected but slowly by any increase in the annual production. But, even after all allowance has been made for this, during the earlier part of the last half century, while the first and second of the above suggested causes were in more active operation than was the third, the actual result was the inevitable one. The demand for gold and silver decreased greatly when compared with their rapidly increasing supply, and both were cheapened when compared with the price of labor, measured by the product in any direction of a given quantity of it.

During the last twenty-five years, however, the third factor has come so rapidly to the front that the civilized world (practically the whole world, so far as concerns commercial conditions) is now conducting its business upon the basis of gold alone.

As a consequence-though it is in large measure masked by coincident development of production and transport facilities-there has resulted, if not an absolute appreciation in the value of gold, at least a decided check to its depreciation when compared with that of labor, to which the experience of the preceding quarter century had accustomed us. In spite of the vast amount of ingenuity and research that had been lavished upon the subject, it is not easy to decide whether gold has appreciated. It is certain, however, that as compared with any measure of human effort its price has not of late depreciated at anything like the rate either of its own depreciation in the earlier part of the last fifty years epoch, or of the depreciation which has so generally characterized other products of industry.

Were this all, there might be a serious question-especially in view of the universal enmeshment in debt of individuals, municipalities and nations-as to the extent to which this comparative appreciation of gold should be tolerated; and it is fortunate that the course of events assures a solution which, apparently, we may