which means the rise in prices that for some time had prevailed;

The yield of gold did not "suddenly increase," and the intelligent prophecy of the Daily News was fully realized, not merely to the extent of a check to the rising prices; (or, as it is styled by the Daily News, a check to the "fall in the value of gold,") but to the extent of an immediate rise in the value of that metal, and a persistent and deplorable fall in the general range of prices.

This prophecy that the "fall in the value of gold" would be checked by the demonetization of silver; or, better, reversed by it, was welcome reading to the creditor and income classes of England and of the world.

That it was "reversed," and the value of gold appreciated, is as plain as that; one being subtracted from two, there is but one for a remainder.

The immediate fall in prices of commodities was the natural, the anticipated, and the deliberately intended result of that movement.

But we are now assured that this fall is not due to any monetary cause, but to the greater efficiency of machinery in the production of commodities.

No advocate of an increased volume of money denies that in a few departments of manufacture there have since 1873 been improvements tending to economize labor and cheapen products; but they emphatically deny and challenge proof that improvements of mere detail in the manufacture of some articles will account for the extraordinary fall of price since that time in almost every product of industry. We are also told that the development of the system of transportation, both by land and sea, have tended to lower the price of commodities to the consumers. I grant it. But we had those improvements before 1873.

The inventions made between 1873 and 1890, the period of falling prices, were no more important or radical in their effect on industry,—tended no more to cheapen commodities, than did those from 1850 to 1873, the period of rising prices. Indeed the inventions which preceded 1873 were as a whole much greater in scope, more far-reaching in result, and more revolutionary in their effects on industry, than those of the later period. All the great basic improvements had been invented, and had been incorporated with the industrial system of all civilized countries long before 1873, if we except the electric light and the telephone. We have had the steam engine, the cotton gin, and the spinning-jenny since the last century; the railroad and the steam-ship since the '30's; the telegraph, the mechanical reaper, steam-plow, and other agricultural labor-saving devices since the '40's; the sewing machine since 1854, and the Bessemer process and steel rail since 1857.

The forced construction into which their position drives the advocates of the gold standard is well illustrated in a recent number of a magazine of high standing in this country, in which I find the following:

Observe how deftly the writer places iron, in the manufacture of which there have admittedly been some improvements, in the same category with wheat, in the production of which the improvements within any recent period have been of the most trifling character. It will be exceedingly difficult to convince the farmers of this country, whose mortgages are eating up the proceeds of their labor, that the enormous decrease in the debt-paying power of their products is made up to them in "the new efficiency which applied science has bestowed on toil."

As well might it be maintained that the rise of prices and the concurrent wave of universal prosperity, experienced after 1849, was not due to the increase of the world's money stock from the mines of California and Australia, but to some sudden, unaccountable, and complete loss of all improvements theretofore attained in the arts and industries of the world.

EFFECT OF CHECKS AND CLEARING-HOUSES.

But it is said that checks, notes, drafts, bills of exchange, and the facilities afforded by clearing-houses effect such economy in the use of money that it goes farther now than formerly, and that therefore so large a volume of money as was formerly needed is not needed at present. It is sought thus to escape the conclusion that the fall of prices is the result of a shrinkage of the volume of money, or at least to imply that if the money volume has been shrinking the agencies mentioned have served to mitigate, if not entirely to counteract, the effects of such shrinkage. This is in substance to claim that however contracted the money volume of a country may become, the system of checks and clearing-houses—on the principle of the compensating balance—will expand in a proportion directly corresponding to the contraction of the currency; that the greater the reduction of the volume of money in the country the greater the increase in the transactions of the clearing-house.

Nothing more absurd could be conceived. If this view were correct, it would make no difference whether the amount of money in circulation were large or small; a million dollars would be as efficacious as $100,000,000, and even one dollar as effective as a million dollars; and if we suppose the last dollar to have disappeared from circulation, then, according to the sweeping and pretentious claims set up for the clearing-house system, we could dispense altogether with the use of money and rely exclusively on checks, drafts, and bills of exchange.

That checks and clearing-houses are a great convenience to commerce is not denied. They serve to a certain extent to make more effective the money volume of a country. By the clearing house system of off-setting the demands of the several banks, one against the other, and requiring payment in cash of the balances only, large amounts of loans may remain undisturbed and greater stability of industrial conditions be secured.

Clearing-houses, however, were not established primarily for the convenience of commerce, but for the profit of bankers. Whatever amounts of money are economized by means of those institutions bring compensation, by way of interest, to the banks. We may, therefore, rely upon their being utilized to the utmost under all circumstances.

But, however much checks and clearing-houses may economize the use of money, they are no novel devices. They are not some untried and newly-invented instrumentalities. Checks have been in use ever since the invention of banks. The clearing-house system was established in this country in 1853. Contributing, as it does contribute, to the pecuniary profit of the banks by making possible an economy in the use of invested money, which the banks have loaned out, and on which they are drawing interest, the system has grown with the growth of the business of the country. It will undoubtedly continue to grow, but with no greater acceleration than population and business will warrant.

As it has been a part of the banking machinery of the country for nearly forty years, and during that period has been utilized to the utmost, the conditions of its existence and utilization have long since become static conditions. The demands for currency have borne relation to the needs of business, with clearing-house facilities in full sight and operation; and at all seasons, in the adjustment of prices, those facilities have had full force and effect. Assuming that at any given period the business of the country were conducted with a given volume of money, plus a certain volume of clearing house exchanges, then, at a later period, an increase of business would demand an increase in the volume of money, plus a proportionate increase in the volume of clearing-house exchanges; having had this system in full and effective use for forty years, it is as absurd to ascribe the fall of prices in the last half of that period to any economy in the use of money effected by the clearing-house system as it would be to ascribe to the same cause the directly opposite effect—the rise of prices—that took place in the first half of the same period.

THE PROOF AFFORDED BY THE FALL OF INTEREST.

If further proof were needed that gold has risen in value, it is, as I maintain, to be found in the coincident fact of a decrease of rates of interest on first-class securities. That decrease has kept even step and pace with the rise in the value of money.

The rise in the value of gold, as shown by comparison with large numbers of articles of commerce, has been between 35 and 40 per cent. The rate of interest on gilt-edged securities shows a corresponding decline. But unfortunately for the struggling people of the country, the fall in the rate of interest on farm mortgages and on property remote from money centers has been nothing like so great, nor has it been so great as the fall in the price of agricultural lands, and in the products of labor.

I hold, therefore, that a new axiom should be added to the science of political economy; namely, that as the purchasing power of money increases, its income producing power decreases, and in about the same ratio; and conversely, when the purchasing power of money decreases, its income-producing power increases. In other words, when prices rise interest rises; when prices fall interest falls. When money is increasing in volume and decreasing in value, prices rise, and its investment in productive enterprises becomes more profitable, and as a consequence interest rises. When it is decreasing in volume and consequently increasing in value, prices fall, investment in property and productive enterprises become precarious and unprofitable, and, as a consequence, it avoids them, and seeks investment in bonds and gilt-edged securities, aptly termed "money-futures," which for years have been increasing and continue to increase.

Some thirteen years ago I indulged in a little prophecy concerning the rates of interest. I take no great credit to myself for it, but in 1877—four years after the demonetization of silver—before the rates of interest had materially fallen, and when the same contention was made that is made now, namely, that money was cheap because interest was low, and that the policies of the country were wise because our credit stood on such a high plane, I submitted to Congress the report of the Monetary Commission, from which I quote:

All the facts of the situation to-day fully bear out the statements I then made.

So determined are the advocates of the single gold standard in defending the wisdom of its maintenance that facts whose existence would at ordinary times be readily admitted, are, during a discussion of the money question, pointedly denied. For example, within the past few weeks we have seen in various eastern newspaper contributions from prominent writers taking direct issue with the advocates of silver as to the prevalence of general distress throughout the country. They declare that there is no such distress, assert that they have looked for it in vain, and derisively inquire where it is.

Perhaps the best authority I can cite in response to this inquiry is the principal commercial daily journal of the east, the New York Journal of Commerce, itself one of the most ardent and uncompromising advocates of the gold standard. In an editorial article in its issue of January 11, 1890, that journal said:

FAILURES IN BUSINESS.

HAS SILVER FALLEN?

In order to ascertain whether silver really has or has not fallen in value, it is necessary that all the facts be taken into account and the situation looked at from a correct point of view. If a person be seated in a boat that is headed to the stream and wishes to test whether or not he is making headway he must keep in view not the stream, but the shore. The occupant of a railroad car who observes a moving train on a contiguous and parallel track, frequently thinks his own train at a stand-still, when in fact it may be in motion.

Whenever a rise or fall appears to take place in the price of any one article or commodity, that is to say whenever a difference takes place in the relation which that article bears to money—all other commodities remaining unchanged—such difference must naturally and properly be attributed to changed conditions affecting the commodity, and not to a change in the value of money. But wherever there is a fall in prices throughout the whole range of commodities then it is clear that this change is mainly due to a change in the value of money. Such however is the force of education and habit that the masses of the people are slow to suspect any change in the standard by which they have been accustomed to gauge or measure all values. Indeed they find it difficult to understand how under any circumstances any change can take place in it. Having their eyes fixed on the standard, and on that alone, they naturally attribute to the articles measured, and not to the standard, any difference that may seem to arise in the relation they bear to each other.

But the apparent is not always the real. Nothing seems more warranted by the evidence of our senses than that the earth is a stationary object, while the sun revolves around it. For thousands of years the world was convinced of the truth of the geocentric theory of the universe, and millions of men have lived and died in the confident belief that this planet was immovably fixed in space, while the sun was a rolling and ever-shifting body. Even yet, among the mass of mankind, so ever-present is this impression, derived from ocular demonstration, that in spite of the declarations of science, the world continues in common use the phrases which originally described the process that took place, as men understood it; hence we speak of the "rising" and the "setting" of the sun. In the same way we speak of the rise or fall in the value of commodities, without being particular to note whether the change that has taken place is strictly a change in the value of the article itself or a change in the money with which its value is measured. Perhaps I can best illustrate my meaning by an allegory:

THE BATTLE OF THE STANDARDS. THE ALLEGORY OF THE CLOCKS.

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 passing hours. This clock had been endeared to all the inhabitants of the village by the hallowed associations 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 noon-day 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 assemble 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 clockmaker, 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, passed 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 passing 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, not withstanding 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 asserted 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 asserted, 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.

Notwithstanding 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 mass 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.

THE PURCHASING POWER OF SILVER IN 1873 AND 1889.

If I can show that for a period of seventeen years, since its demonetization in 1873, silver has lost none of its purchasing power, none of its command over commodities; that is to say, if I can show that 412½ grains of silver to-day, uncoined, and shorn by hostile legislation of its principal element of value—the money use—will buy as much as would 412½ grains of silver in 1873 (when our silver dollar bore a premium over gold) of all the articles that enter into the daily consumption of the people, it must be manifest that silver has not fallen in value.

I present a table which I shall ask to have inserted in the Record as part of my remarks, showing the purchasing power of 412½ grains of silver, nine-tenths fine, in 1873 and 1890, respectively, so far as concerns several leading articles of daily consumption.

The table is as follows:

Comparative purchasing power of 412½ grains silver, nine-tenths fine, in 1873 and 1890, respectively.

From this table it conclusively appears that while in 1873 the standard silver dollar of 412½ grains, which then bore a premium over the gold dollar, would purchase four-fifths of a bushel of wheat; to-day the same quantity of silver, without the advantage of coinage and merely as bullion, will also buy four-fifths of a bushel of wheat—the only difference between the figures for the two years being that at the present time 412½ grains of silver bullion, as will be seen by the table, will buy a fraction of a bushel more than would 412½ grains of coined silver in 1873.

If, then, silver has fallen, it is manifestly not in its relation to wheat.

By the same table it is shown that the silver dollar of 1873, containing 412½ grains of silver, nine-tenths fine, would purchase one and eight-tenths bushels of corn; in 1890, a like number of grains of silver, uncoined and estimated at its gold value, will purchase one and nine-tenths bushels of corn. Here again the advantage is slightly in favor of the 412½ grains of silver bullion of 1890. This shows conclusively that silver has not fallen in its relation to corn.

The figures of the same table show that in 1873 a coined silver dollar of 412½ grains would buy 5¹⁄₃ pounds of cotton; to-day 412½ grains of uncoined silver will buy 6¾ pounds of cotton. From this it appears that silver has not fallen relatively to cotton, the great staple of universal use, but that, on the contrary, it has advanced somewhat in its purchasing power when compared with that article.

In order to present the question from another point of view I submit another table showing the number of grains of silver that are required in 1890 and the number which were required in 1873 to buy a bushel of wheat, a bushel of corn, &c., by which it will even more clearly appear that silver has not fallen in value in respect to commodities.

Comparative purchasing power of silver bullion, in grains nine-tenths fine, in 1873 and 1890, respectively.

From this table it will be seen that in 1873 it required 474 grains of standard silver, in the form of coined dollars, to buy one bushel of wheat; in 1890, only 468 grains of standard silver (and that merely in bullion form, or in other words, at its market value) are required to buy a bushel of wheat. This does not show that silver has fallen in value, in its relation to wheat, but, on the contrary, that it has risen in value.

In 1873 it required 224 grains of silver to buy a bushel of corn; to-day only 209 grains of silver are required to buy the same quantity. These figures fail to prove that silver has fallen in value, in its relation to corn. On the contrary, again, it has risen.

In 1873 a pound of cotton could not be had for less than 77½ grains of silver; to-day the same pound of cotton can be bought for 61 grains of silver. Silver, therefore, has not fallen, but risen in value in its relation to cotton.

In 1873 96 grains of silver were required to buy one dozen eggs; to-day only 76 grains of silver are required to buy the same quantity of eggs. Silver therefore has not fallen but risen in value, in its relation to eggs.

These comparisons might be continued with the same results as to a great majority of the articles entering into general use.

These figures demonstrate that in its relation to all commodities that enter into the daily consumption, silver has not fallen in value, but, as is clearly seen, while holding a remarkably steady ratio to commodities, has slightly increased in value, as is shown by the fact that a less number of grains of the metal are to-day required to purchase the same quantity of the commodities mentioned than were required in 1873.

In relation to what, then, is it that silver has fallen? As it has not fallen in relation to commodities, there remains but one thing in relation to which it can be said to have fallen, and that one thing is gold. The phrase "the fall of silver" is the ingenious and cunning invention by which it is sought to cast on that metal the discredit of depreciation rather than subject gold to the suspicion of any change whatever. The term to correctly describe what has taken place would be "the rise of gold;" but that term is scrupulously avoided, as implying that gold does not remain immovably fixed. That gold has risen, however, admits of no doubt, except to those who willfully shut their eyes to facts of common observation. The true test of the increasing or decreasing value of any one thing is not to compare it with any other one thing, but with a large range of commodities generally dealt in. It is not of so much importance to know how much gold can be bought with a given amount of silver, as it is to know how much bread, how much meat, and how much clothing can be bought, and how much of all the things that are necessary to the comfort and well-being of the people can be bought with that amount of silver.

PROOF THAT GOLD HAS RISEN.

In order to demonstrate that gold has risen, I will bring side by side the gold prices of a number of leading commodities of commerce in 1873 and 1889, respectively, and the amount in silver bullion that in 1889 would purchase an equal quantity of the same commodities, by a table prepared at my request by the Bureau of Statistics of the Treasury Department.

Average export prices of the following named domestic commodities for the years ending June 30, 1873 and 1889.

What does an examination of this table show? It shows beyond dispute that gold has risen in value.

A bushel of wheat that, according to the figures of the Bureau of Statistics cost $1.14 in gold or silver in 1873, and which, as will be seen by the table, still commands $1.12 in silver bullion, will to-day bring only 87 cents in gold.

A pound of cotton that in 1873 cost the purchaser, in gold or silver, 16 cents, and which still commands 13 cents in silver bullion, will bring only 10 cents in gold.

A pound of cheese that in 1873 cost the purchaser 11¹⁄₃ cents in gold or silver, and which now brings 12 cents in silver bullion, will bring only 9 cents in gold.

A barrel of flour which in 1873 cost the purchaser $6.60 in gold or silver, and which to-day commands $6.02 in silver bullion, will bring but $4.70 in gold.

A pound of butter that in 1873 brought 18.4 cents in gold or silver, and now commands 20.8 cents in silver bullion, will bring but 16.6 cents in gold.

Notwithstanding that 412½ grains of uncoined silver will to-day buy as much of the leading articles of commerce as the coined gold dollar would buy in 1873, yet the advocates of the gold standard characterize it as a 72-cent dollar. Then the gold dollar of 1873 was a 72-cent dollar. If the gold dollar of to-day be an honest and equitable dollar, that of 1873, which was worth much less, was a swindling and dishonest one; and if gold continues to advance as it has been advancing, and with the declining output of that metal there is no reason why it should not, it will be but a short time before any other kind of dollar whose value may be equal to that of the present gold dollar will be stigmatized as a swindling 72-cent dollar. There never was a dollar coined that did not legally and practically contain 100 cents. But the creditors stigmatize a dollar of the value of the gold and silver dollar of 1873 as a 72-cent dollar. May not the debtors, with much more propriety, denounce the gold dollar of to-day as a 140-cent dollar?

According to the admissions of the royal commission of England, the gold dollar of to-day is to the producers of this country, measured by their products, already at a premium of between 30 and 40 per cent. over the gold dollar of 1873. The advocates of the gold standard have no sympathy with our farmers and manufacturers who have to pay, in commodities, a premium of 30 to 40 per cent. on gold, to meet their engagements, but express extreme anxiety at the bare possibility that a few importers might have to pay even a small premium in any form. They insist that the money system of a population of 65,000,000, shall, like an inverted pyramid, be made to rest upon its apex in order to enable a few importers, most of whom are residents of foreign countries, to make their payments abroad in gold.

Verily, Mr. President, the single gold standard is an expensive luxury for our people to maintain.

Those who deride silver as a money-metal indulge in feeble attempts at sarcasm by inquiring why we do not advocate the use of tin and brass as money. They speak and write as though the idea of using silver as money were a recent discovery or invention of people engaged in silver mining. They also ignore the fact that the standard silver dollar of the United States, which, with much satisfaction, they stigmatize as a 72-cent dollar, requires a gold dollar to obtain it. It is worth a gold dollar in London, in Berlin, in Vienna, in Saint Petersburg, in Madrid, in Havana, and in all countries having commercial relations with the United States. It can at once be exchanged into the money of any country with only the slight deduction of cost of shipment to this country—as is the case in the United States with notes of the Bank of England, which are redeemable in gold.

Our silver dollar is not money in foreign countries—and it is to our advantage that it is not—for were it money anywhere else than in this country, we could not rely on its remaining here to maintain that steadiness of prices indispensable to prosperity. But if any of our silver dollars are found abroad, let no one suppose he can get them by tendering 412½ grains of silver bullion for each dollar. He will find it will cost him precisely as much gold as it passes for in the United States.

SOME EFFECTS OF THE RISE OF GOLD.

If a cotton planter in 1873 owed $10,000 he could then have paid it with 60,975 pounds of cotton. To-day, by reason of the increased command which gold has over commodities, it would take 101,010 pounds of cotton to pay that $10,000; not withstanding that the money in which the debtor has paid the interest has each year become more valuable than it was at the time he contracted to pay it.

The cotton manufacturer of the East who in 1873 owed $10,000 could then have paid it with 70,422 yards of uncolored cotton cloth; to-day owing to the rise in the value of gold it would require 147,059 yards to pay that debt, without taking into account the amount lost by the debtor in the greater sacrifice he had year by year to make to pay the interest.

The farmer of the North and West who in 1873 owed $10,000 could then have paid it with 8,733 bushels of wheat; to-day it would require 11,446 bushels of wheat to liquidate that debt, though he, too, has year by year been "cinched" through the progressive increase in the value of the money in which the interest has been paid. Or he could, in 1873, have paid his debt with 1,514 barrels of flour; to-day it would take 2,126 barrels of flour to pay the same debt.

The property of the country is fast passing into the hands of the creditors, and if the iniquitous system is not reversed the condition of our American farmers will be that of the farmers of gold-standard countries. Instead of owning their farms they will be tenants and rent-payers—a condition but little in advance of that which prevailed in feudal days.

Machiavelli, describing a turbulent period in the history of Florence, said:

The brigandage of the Middle Ages, whether in Italy or elsewhere, was a criminal defiance of law, but it was pursued at some risk, and under manifest disadvantages. The brigand took his life in his hands. He knew that his calling was unlawful; and, although ruthless in his work, the method by which he exacted ransom of his occasional victim was less destructive to the prosperity of the community than the legalized brigandage of to-day by which, through a vicious system of money, the great mass of the people are despoiled of their property. The distinguishing characteristic of the brigandage of the nineteenth century is that it scrupulously observes all legal forms, and is conducted in the name of honor, honesty, good morals and "sound finance." Mortgages are foreclosed only in accordance with law, and the unearned increment which results from the increased and increasing value of the money is transferred from the debtor to the creditor, with punctilious regard for the statutes.

The demands of the brigand were enforced with guns and pistols; those of the creditor are enforced with bonds and mortgages; both exactions cruel and unjust, one by violence, the other by law. But, in the latter case, so indirect is the method of operation that many of those who are benefited by it are unaware of the perpetration of any wrong. So subtle is the process that the change seems to be only a change in the price of commodities, and thousands of men who would scorn consciously to exact from any one more than a just return for money loaned are beneficiaries of this vicious and ruinous system.

With regard to the great body of the working masses it is sometimes said they have no cause for complaint, that their condition now is better than ever before.

But, Mr. President, it is not enough that men are better off than they have been. When we reflect that nine-tenths of the inventions and improvements constituting all the material features of the civilization of this century have been made by working men, it is manifest that they are entitled to much more of the comforts and convenience of life than are now accessible to them. By watchful, repeated, and aggressive efforts through their trade organizations, the working men in many branches have been enabled to keep wages from sinking, and occasionally to secure an advance; but, during a period of falling prices, what is gained in this way by those who are kept at work is lost to the working class as a whole by the remission to idleness of part of their number.

The statisticians who seem to be employed by some propaganda to prove by figures that prosperity prevails, point exultantly to the fact that the wages of the working people seem constantly to have increased while prices are falling, and they cite this to prove that low prices are consistent with prosperity. They leave entirely out of the account the large numbers of workmen who of necessity are relegated to idleness on account of the lack of profit in business.

If you go into the workshops of any large manufacturing enterprise, while prices are low and lowering, and ask the managers what they now do when a strike occurs among the workmen, they will tell you they find it impossible to shut down, because they have contracts extending through time that they must fill, but, they add, "We pay the wages demanded and we reduce the number of the employed."

If there are a thousand workmen employed, getting $2 each per day, that would be a wage fund of $2,000 a day. If, when prices fall and business becomes dull, the employer should want to reduce the pay of each workman to $1.50 a day, and if the workmen, by striking, should prevent that decrease, and if, then, 25 per cent. of their number should be discharged, the loss to the working class, as a body, and to the community at large, would be the same as though the wages were reduced to $1.50 a day. Until these people who present statistics can show us how many laborers are left out of employment there is no possibility of arriving at any correct conclusion as to what the wage fund is and how much wages are paid.

The loss to society is much greater when 25 per cent. of the people are unemployed than if all continued at work upon a 25 per cent. reduction of wages, because the relegation to idleness of 25 per cent. of the workmen reduces the producing force, and lessens correspondingly the aggregate annual production.

THE INTEREST OF THE MINING STATES IN THE REMONETIZATION OF SILVER.

Those who in the Senate and in the other House of Congress, represent mining constituencies are taunted with the selfish purpose of advancing the interests of their own States at the expense of those of the country. It is sought to discredit the State which I have the honor in part to represent on this floor, on the ground that the people, being largely silver miners, have a personal interest in the remonetization of silver.

The silver miners, Mr. President, need no defense here or elsewhere. They have asked no favors from the Government, and ask none now. They are bold, adventurous, and self-reliant men, who have wandered across alkaline deserts, and over pathless mountains, braved the assaults of hostile savages, the miasma of the Isthmus and the storms of the Cape, and have planted the flag of a high civilization on the western confines of this Republic. No more patriotic or public-spirited class of citizens can be found within the borders of the Union. Their business is an honorable one. When they entered upon it they, in common with other citizens, had the warrant of time, and the authority of all writers and thinkers on political economy, for the belief that silver was, and would ever be, a money metal, entitled to that full credit which from time immemorial had been accorded to it. Silver, equally with gold, had been consecrated by all the ages to the money use, and was dedicated to such use by the Constitution of the United States.

When the Constitution declared that Congress should have power "to coin money and regulate the value thereof" and that "no State shall * * * make anything but gold and silver coin a tender in payment of debts," it warranted the belief on the part of all who adopted the calling and undertook the business of mining, that gold and silver would continue to be money metals in the sense in which they had been for thousands of years in the past. The silver miners were warranted in presuming that when the Constitution esteemed so highly the legal-tender function in the two metals, gold and silver, as that it prohibited the States from making anything a legal tender except coin of those two metals, it would not warrant the Congress of the United States in taking from one of those metals the power of legal tender and conferring that imperial function exclusively on the other. Silver mining is a business requiring for its successful prosecution skill, experience, and energy, while nine-tenths of the gold of the world has come from placers; requiring neither organization, capital, nor skilled labor.

The production of gold is much more a matter of accident and much more liable to fluctuation than is the case with silver. The silver miners therefore had a right to believe that so long as 23.22 grains of pure gold should be entitled to recognition as one dollar, 371.25 grains of pure silver would continue to be entitled to like recognition as one dollar, and would possess the legal-tender function as such, for the liquidation of all debts, public and private. On the strength of this warranty of the Constitution, and of the unbroken experience of the ages, large sums of money were invested in mining property and in the employment of labor to develop the mines of the country. On the strength of this belief and conviction, shared in by all the people of the United States, that gold and silver would both remain the money metals of the world, debts to an enormous extent were incurred, and it was confidently believed that both metals would for all time be available for the payment of those debts.

The silver-miners had learned from the history of mining, as well as from hard and bitter experience, that the mines might at any moment cease to yield, in which case their occupation would be gone and the capital invested would be a total loss. But they did not suppose that the verdict of all time would be reversed, or that the implied warranty of the Constitution of the United States would be disregarded. They did not believe that either one of the money metals would ever be demonetized. And if a doubt had entered their minds on that subject, they would naturally suppose that gold rather than silver would be demonetized, gold being too limited in quantity to answer alone the purposes of money in a rapidly advancing civilization; its yield being uncertain and capricious and the prospect of a continued and sufficient supply becoming less from year to year.

But, Mr. President, the degree of special interest which the mining States have in this measure is not to be compared with that of the other States of the Union.

According to the report of the Director of the Mint, the total quantity of silver produced in the United States in the eleven years from 1878 to 1888 inclusive was 406,210,000 fine ounces. According to the same authority the commercial value of that silver was $436,260,000, and the coinage value $525,145,000. A very simple process of arithmetic shows that the difference between the commercial and the coinage value of that silver was $88,885,000, or an average of $8,080,544 each year. Assuming that amount to have been the annual difference between the coinage and commercial value of silver for the five years preceding 1878, we must add to the $88,885,000 the sum of $40,402,220, making a total of $129,287,220 as the amount which the silver miners, not of Nevada but of the whole United States in the seventeen years ending 1889, lost by the demonetization of silver.

Having thus demonstrated in dollars and cents the degree of selfishness which, as is charged, is the motive of the miners in advocating the remonetization of silver, let us glance at the degree of selfishness which may be said to impel other classes of the community to advocate the same cause.

THE INTEREST OF THE NON-MINING STATES IN REMONETIZATION.

The price of cotton for the year 1873, in gold or silver (then of equal power), was 16.4 cents per pound. The price in 1889 was 9.9 cents.

The yield of cotton for 1889 was 7,000,000 bales, or 3,500,000,000 pounds.

Had not silver been demonetized that cotton would have brought as good a price to-day as it did in 1873. At the price of 1873 the account would have stood 3,500,000,000 pounds, at 16.4 cents, $574,000,000. At the price of 1889 the account stands 3,500,000,000 pounds, at 9.9 cents, $345,500,000, showing a loss in debt-paying and tax-paying power on cotton alone (only one article of merchandise) in the single year 1889, by reason of the fall in prices caused by the demonetization of silver, of $227,500,000.

Having shown that the loss to the silver miners by the discount on silver for the seventeen years from 1873 to 1889 was less than $130,000,000, it will be seen that the loss in one single year to the cotton planters of the United States is greater by $90,000,000 than the total loss for the entire seventeen years to the silver miners of the country.

But inasmuch as the cotton crop of 1889 was exceptionally large, I will, for the purpose of my computation, discard it, and assume instead that an average yield for the years between 1873 and 1889 would be 5,000,000 bales per annum—which is a fair average and by no means high—5,000,000 bales, of 500 pounds each, are equal to 2,500,000,000 pounds.

At the price of 1873 the result of each year would be 2,500,000,000 pounds, at 16.4 cents, $410,000,000.

According to the figures given by the Bureau of Statistics the average price received each year of the seventeen was 13.1 cents per pound; 2,500,000,000 pounds, at 13.1 cents per pound, equal $327,000,000, showing a difference of $83,000,000; that being the average each separate year for seventeen years, or a total sum for the entire period of $1,411,000,000, which represents the loss in debt- and tax-paying power suffered by the cotton planters by reason of the demonetization of silver.

This is the enormous tribute which has been exacted of the cotton industry of this country in behalf of the gold "standard," and of those who, for their own pecuniary advantage, cunningly induced the Congress of the United States to demonetize silver. This is the sum which the planters of this country have lost in debt-paying and tax-paying power by that mad act of folly. As will be seen at a glance, it is a loss vastly in excess of that suffered by the silver States in the discount on the price of silver bullion.

So that, if the silver miners are taunted with having a personal interest in the success of the movement for the full remonetization of silver, the cotton planter must be placed in the same category, and with ten-fold more reason.

A like computation with regard to wheat will show a loss in debt-paying and tax-paying power of not less than $100,000,000 a year to the farmers of the North and West, by reason of the demonetization of silver—a total of $1,700,000,000 in the article of wheat alone in seventeen years.

Thus a loss, wholly unnecessary, of more than $3,000,000,000 in debt-paying and tax-paying power is shown to have been inflicted on the farmers and cotton planters of this country.

In comparison with this enormous loss to farmers and planters, how paltry is the loss of $8,000,000 a year suffered by the silver miners.

But, however large the direct loss to the debtors and to the country by reason of falling prices, the losses that are indirect are of infinitely greater magnitude, and stand out like a great mountain of wrong superimposed upon the most deserving class in the community, whose interests it should be the paramount duty of Government to protect, a wrong more calamitous in its consequences than any of the multitudinous wrongs which a shrinking volume of money inflicts upon society.

THE ENORMOUS LOSS OF POTENTIAL WEALTH THROUGH INVOLUNTARY IDLENESS.

The political economist, Mr. President, deals with property in esse, and producers employed. I propose for a moment to deal with property in posse and producers unemployed. The wealth which the political economist discusses is realized wealth; that to which I now briefly invite your serious consideration is the wealth that might be, and would be, brought into existence were the energies of all the people utilized. For, while it has attracted but little attention from writers on economic science, it will be found upon examination that the non-employment of its members is incomparably the greatest loss which an increase in the value of money and the consequent disorganization of industry inflicts on society.

The great writers and thinkers on economic subjects discuss with care the elements that enter into the production and distribution of wealth. They follow in detail the manufactured article through all its stages, from the crude material to the finished product; and, when completed, they conduct it through the intricate channels by which it reaches the hands of the consumer. The greatest consideration is bestowed upon the labor employed and the wealth resulting therefrom, but scarcely any thought is given to the immeasurable mass of potential wealth not produced, but lying latent in the brains and hands of the millions who are condemned to involuntary idleness.

While no mere sum in arithmetic can represent the enormous loss suffered by a nation through this cause, let us see whether we can arrive by figures at an approximate conception, at least, of the loss of wages which it entails upon the working masses, and the corresponding loss of wealth to the country.

The most thorough and painstaking investigation into the conditions of labor in this country has been that which for many years has been conducted by the Massachusetts Bureau of Labor. Its work has been universally admitted to be free from bias, and devoid of all attempt to establish any special hobby, or to force, by figures, the proof of any preconceived theory.

SOME STATISTICS OF THE UNEMPLOYED.

An examination of the work of that bureau shows that, in 1887, there were 816,470 persons engaged in wage earning in the State of Massachusetts. Of those, 241,589, or nearly 30 per cent., were idle during some part of the year—ranging from one to six or more months. The average of their unemployed time was about four months, or one-third of the year.

Now, 240,000 people idle for one-third of their whole time is equivalent, in money loss, to the total idleness of one-third of that number, or 80,000 people, for the entire year. The whole number of persons enrolled for labor in the State being 816,470, this is equivalent to the total idleness of one-tenth of the people engaged in all occupations.

If a number equivalent to one-tenth of the people in all occupations are idle twelve months in the year in a State like Massachusetts, where labor is better organized, better classified, and more efficiently ordered than elsewhere in this country, it can not be presumed that any other State of the Union will exhibit a smaller proportion of unemployed laborers.

The Census Report of 1880 states the number of persons employed in all occupations as 17,392,099, out of a population of 50,155,783, or a percentage of 34.68 of the entire population. Our present population being not less than 65,000,000, if we assume, as we are warranted in doing, that a like proportion of the population is engaged in occupations of all sorts, it is clear that we have to-day a working population of 22,254,000 persons.

Accepting as correct the careful deductions from the Reports of the Massachusetts Bureau of Labor that a number equivalent to ten per cent. of the people are always out of employment we find that at the present time there are 2,250,000 persons involuntarily idle in this country. How faintly does the term "the army of the unemployed" describe this vast number of eager and willing men seeking in vain the opportunity to earn a livelihood for themselves and families.

Were the business of the country in the active condition in which it could not avoid being if our money system were perfectly adjusted to industry, and if employers were competing for laborers with the same degree of eagerness that laborers are competing for employment, the average wage of a day for a working man would not be less than $2. This would make but the moderate sum of $50 a month for each workman, which, under the most thrifty system of household economy, can not be considered more than enough for the support of an American family.

THE WAGE LOSS FROM INVOLUNTARY IDLENESS.

By multiplying the number of persons thus shown to be idle, by this moderate average wage, we arrive at the amount of $4,500,000 as the daily sum which is lost to the wage earners of the United States by the non-employment of labor. This is a money loss of $27,000,000 a week, $117,000,000 a month, or the amazing sum of $1,404,000,000 a year. A saving of this sum for a year and three months would pay our entire national debt. This being the loss in a single year, we can imagine (making due allowance for difference in the numbers of the population) how stupendous has been the loss to the nation during the past seventeen years, a loss exceeding incomparably all other losses whatsoever.

If a crop of wheat be lost, it is appropriately noted as a public misfortune; if a city be burned down, or swept away by flood, it is properly regarded as a great national calamity, and the sympathies of all the people go out in unstinted measure to the sufferers. But here is a loss as real and as deplorable as any ever caused by flood or fire—a loss whose consequences, while not so apparent, are as destructive to national prosperity as the burning of ten cities, or the occurrence of one hundred and forty Johnstown disasters every year, and always to the people who can least afford it. Yet it passes almost wholly unheeded except by the sufferers.

A war that would take a million of men from industry and deprive the country of the production which would result from their labors, would be regarded as a calamity of unsurpassable magnitude, yet a shrinkage in the volume of money relatively to population withdraws much more than that number from productive pursuits, and without the salutary discipline and restraints of military life, subjects them to conditions of which the unavoidable results are poverty and crime.

Imagine, Mr. President, the unhappiness, discontent, and even despair implied in the mere statement that 2,000,000 men are constantly out of employment; (or, what amounts to the same thing, that three times that number are idle for four months in the year!) Imagine, what it means to the working people of this country to be deprived of the enormous sum of $1,400,000,000 a year.

But, aside from the effect on the individual, what benumbing consequences are entailed upon the nation by the idleness of so large a number of its people. The loss of the wealth which the labor of those men might have created is a loss never to be retrieved. When the money volume of a country is sufficient to keep prices from falling, and thus to encourage capital to seek productive enterprises, in which labor is employed, every willing man is kept at work, and no country can enjoy any higher degree of prosperity than when all its people are employed, and the products of their labor equitably distributed.

Much, I believe, of the prejudice against silver money arises from an idea, conscientiously entertained, by many, that gold money has the greater "intrinsic value." I shall, therefore, Mr. President, at the risk of being a little abstruse, discuss that point.

THE MEANING OF VALUE.

No discussion of the subject of money can be intelligently conducted without a correct conception of the meanings attaching to the terms employed. For a misconception of those meanings is the root of much of the confusion and difficulty by which the subject is surrounded.

"Value" is a word which, of necessity, is more frequently used—and, I will add, more frequently misused and misunderstood—than any other employed in the discussion of economic science. Volumes have been written upon it, and yet, from the daily misapplication of the word in leading magazines and newspapers, it is evident that its meaning is very imperfectly understood.

The idea involved in the word "Value" is so broad and pervasive that within the limits of a speech it would be impossible to discuss it in all its bearings. I shall not, therefore, at this time, do more than present what I conceive to be a basic definition of it.

Value is human estimation placed upon desirable objects whose quantity is limited, and whose acquisition involves sacrifice. In order that an object may have value it must not only be the subject of human desire, but there must be a limitation of its quantity, and its acquisition must demand a sacrifice from him who would obtain it. The term "intrinsic value" is used by many writers with a total disregard of the idea involved in the word value. An article may have estimable qualities that are intrinsic, but no article whatever can have intrinsic value. Its "value" is the mental estimation of its qualities, as modified by the limitations of its quantity and the amount of sacrifice necessary to obtain it. In other words, value is subjective, not objective. In economic discussion, however, value is treated as though it resided in the object, rather than in the mind, and while, for convenience, I may occasionally use it in that sense, it is important to bear in mind the distinction.

In that acceptation, value is usually divided into value-in-use, and value-in-exchange. Certain esteemed qualities of an object may make it of great value-in-use; but unless its acquisition demand sacrifice, it can have no value-in-exchange. It is only with this class of value that economists deal. No matter how important the intrinsic qualities of any article may be, if there be no limitation of its quantity and its acquisition requires no sacrifice, it can have no value in the sense in which the word "value" is used in political economy. The air has qualities inestimable to mankind; it must be regarded as incomparably the most useful of all the objects of human desire; yet it has no value because there is no limitation of its quantity. By reason of its universality and accessibility, air requires no sacrifice to get it. If, however, circumstances should render air limited in quantity it is conceivable that it might become of surpassing value. A man confined in the "Black Hole" of Calcutta would give a fortune for free access to air. So water, where freely obtainable, without sacrifice, although indispensable to life, has no value in the economic sense—no value in exchange. But when not so obtainable, as in populous cities, where sacrifice of time and labor would be necessary to obtain it from river, lake, or spring, people pay for the convenience of having it in their homes. The indispensable prerequisites of value in all objects are utility—either actual or attributed—combined with limitation of quantity and the sacrifice necessary to be made in order to obtain it.

But value is not a property inhering in any article itself. It is not intrinsic. If the value were inherent or intrinsic it could not be taken away.

To illustrate: A generation ago the cradle with which wheat was harvested was said to possess intrinsic value. It was undoubtedly one of the most useful of all the articles needed by man. All that was then in that machine is in it still, yet the value is gone. Had the value been something that was intrinsic, had it resided in the object, and not in the mind, that cradle would still be worth all that it ever was. So, on the other hand, an article may possess most estimable qualities, but if those qualities are not known or recognized by the human mind the article will have no value.

A few years ago cotton seed had no value as an article of general commerce. To-day it is exceedingly valuable, because it has been found to possess estimable qualities not before suspected.

Indeed so strongly does the idea of value rest upon the estimation of the mind that it is not even necessary for an article to possess in reality any desirable quality whatever in order to have value. It will be sufficient if such quality is popularly attributed to it. Numbers of instances could be cited in which there was present no element of value except limitation of quantity, added to a mere belief, or conception of the mind, that the article had desirable qualities. Many will remember that a few years ago a herb called "Cundurango" was introduced into this country from Central America. It was generally believed to possess healing qualities in cases of cancer, and so came to have great value. As soon as this popular illusion was dispelled the article ceased to have even the slightest value.