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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

THE WORLD'S SUPPLY OF GOLD AND SILVER.

Since for thousands of years the world recognized both silver and gold as money, can anybody tell what has happened to render one of them unfitted for the money use?

No argument based on fluctuations in the current supplies of either of the metals can militate against the use of both as money. The fluctuation in the annual yield of both, taken together, is much less violent and less frequent than the fluctuation of either taken separately. By the use of both, society has much greater security against the evil of an insufficient money volume. While a large yield, now of one, and again of the other, has taken place, there is no instance in the history of the world of an extraordinary yield of both occurring simultaneously, except in the single instance of the first discovery of the mines of America. When the gold mines have been yielding largely, there has been no special increase of silver, and during the period when silver has been produced in comparatively large quantities the gold mines have been less productive.

This will be illustrated by the following table showing the yield of both gold and silver, from the discovery of America to the present time.

Annual average production of the precious metals throughout the world from the discovery of America to 1872.

[From Director of United States Mint.]

World's production of gold and silver for the calendar years 1873 to 1889, inclusive.

From this table it will be seen that from 1801 to 1820 the average yearly yield of gold was $9,710,500; of silver, $36,847,500—four of silver to one of gold.

From 1821 to 1840 the average yearly yield of gold was $11,466,000; of silver, $21,964,000—two of silver to one of gold.

From 1841 to 1860 the average yearly yield of gold was $85,150,000; of silver, $34,826,500—two and a half of gold to one of silver.

From 1861 to 1880 the yearly average yield of gold was $117,991,850; of silver, $68,043,900—nearly two of gold for one of silver.

From 1881 to 1889 the yearly average yield of gold was $105,500,000: of silver, $122,540,388—one-sixth more silver than gold.

From those figures it is plain that no continuous, extraordinary yield of silver, such as might warrant the slightest fear of an unnecessary addition to the money volume, is to be expected. On the other hand the continuous drain of gold for use in the arts, as dentistry, gold plate, jewelry, gilding, and articles of decoration generally, is seriously encroaching upon the annual supply.

Both metals possess in common, and neither in any different degree from the other, all the qualities which are recognized as necessary in a commodity money. Silver enjoys in an equal degree with gold the quality of indestructibility, of divisibility, of malleability, and of resistance to chemical changes. The stock of both existing in the world (the product of all time) is estimated to be about equal, the production of the past 500 years being set down as—

That silver mining has not proved exceptionally profitable in this country is proved by the comparatively small number that have engaged in the business. This country has been thoroughly explored in the search for additional mines without any of great value being discovered. The allurements of the business lie in its uncertainty; and for the occasional prize that is drawn thousands of blanks are found. There is always enough hope of results to induce continued effort, but there is also sufficient doubt and discouragement to deter an undue number from engaging in the business.

The mines of Mexico have been worked for hundreds of years; and up to 1873 the business of silver mining in that country had all the stimulus that a parity at 15½ to 1 could give to it. It is not, therefore, probable that any material increase of output can be expected from that quarter.

Conceding, for the sake of the argument, the eventual possibility of so superabundant a yield of silver as to work injury and inequity to the interests of creditors, is it not manifest that it is in the power of society at all times to remedy the evil by a limitation of the coinage? And on the other hand, is it not equally manifest that for an insufficient supply there is no remedy?

If great mountains of silver should be discovered, does not Congress meet constantly? If there should seem to be too much, could not the coinage be readily limited to prevent depreciation? But, on the other hand, when we dedicate the monetary function solely to one metal, of which there is manifestly and admittedly the world over an insufficient supply, where is the remedy? What can Congress do to enlarge that supply? Absolutely nothing.

THE GOLD USED IN THE ARTS.

The Director of the United States Mint a few years ago estimated that of the $100,000,000 gold annually produced from the mines of the world $46,000,000 are consumed in the manufacture of jewelry, gold plate, plated ware, gold-leaf, etc., and in various processes of dentistry.

The single standard of gold, therefore, is maintained by the creditor nations in the face of the admitted fact that but $50,000,000 of that metal are annually added to the money stocks.

Not only is this encroachment of the commodity demand on the money supply becoming greater year by year, with the growth of population, but the supply of gold from the mines is itself becoming less, having declined from an average of $137,000,000 between 1856 and 1860 (the period of greatest yield from California and Australia), to an average of $107,000,000 for the past ten years. Of the entire gold supply of the world, nine-tenths of it have come from placer mines, readily discoverable and easily worked, because requiring little or no capital. All known fields of those are practically exhausted, and there is no reasonable prospect of the discovery of others. Hardy, adventurous, and skillful miners from the United States, and capitalists from all countries, have ransacked the world in vain for new fields of gold. Why, then, with the knowledge of those facts before us, should we discard from the full money use and function the only metal that gives to the world any prospect of relief from the money famine from which civilization is now suffering and from which, if silver be not speedily restored to its ancient use and function, the world is destined to suffer much more?

If it be conceivable that the demonetization of either metal were necessary, why demonetize that which promises the greater and more steady yield? If for any reason society should decide that one of the metals should be discarded, should it not rather be that one which promises the smaller future yield, than that which promises the larger?

Silver is the money-metal best suited to the mass of the people, and to the variety and character of transactions that constitute the interchanges of daily life. The supplies of both metals if united by law, in the full money function, would have a steadiness of value which can not be attained by either separately.

TREASURY NOTES SHOULD NOT BE REDEEMED IN BULLION

The proposition to redeem the proposed treasury notes in silver bullion or in anything but lawful money of the United States will never meet the approval of the people.

What the people of this country want is money, and what they should have is money. These notes will represent full value received, the evidence of which is the bullion in possession of the Government. When issued, they will enter into circulation. They will have to do the work of money among the people. They will go to make up the volume of the currency. On the basis of that volume each dollar acquires a certain value, and represents a given amount of sacrifice. On that volume, and on those conditions, bargains will be made, prices established, debts contracted, values adjusted, and equities created. If any portion of that money be withdrawn from circulation (for that is what "redemption" means) without an equivalent amount of money in some other form being issued to take its place, the circulation will to that extent be contracted, every dollar in circulation will increase in value, prices will fall, property-values established on the basis of the larger circulation will shrink, and equities will be destroyed.

The redemption of any number of those notes in silver bullion means the withdrawal of many dollars of money from circulation and the destruction of so much of the money of the country. Money is not a thing that can be destroyed with impunity. It should be kept in use among the people. It is to industry what the blood is to the human body; it is the life-giving and life-sustaining medium. The money volume of a country should not be subject to frequent and violent changes. In a new and growing country, it should be characterized by that steady accretion that characterizes the increase in the quantity of blood in the human body as it progresses from infancy to maturity. It is no more unreasoning, empirical, or unscientific to be alternately withdrawing blood from, and injecting blood into, a human body than to be constantly contracting and expanding the money volume of the country. And as activity of circulation of the blood is essential to the health of the body, so activity of circulation in money is indispensable to the well-being of society. The possession of no mere commodity, whatever its value, will compensate a country for the destruction of any considerable portion of its money, upon the entire volume of which vast equities rest.

MONEY SHOULD BE REDEEMABLE IN ALL THINGS.

Money should be redeemed in all things; not in one thing alone. The peculiar characteristic of true money, that which distinguishes it from all other things whatsoever and constitutes it a prime factor in civilization, is that it is at all times redeemable in any thing that is on sale. Being an order for property, it should be redeemed in any form of disposable property which the holder may desire.

said Adam Smith—

Any form of money, the condition of whose existence depends on redeemability in one thing alone, can not be money in the full sense, and whenever an urgent demand for real money springs up the other ceases altogether to be money.

The redemption of money should be reciprocal between the Government and the people and between and among all individuals in the community. It should not only be redeemable by the Government by acceptance for taxes but also redeemable by and among the people for all property for sale and services for hire. Its quantity should be so regulated as that its unit (the dollar) should neither increase nor diminish in value, and it should be kept constantly in circulation, and not be permitted to lie uselessly in the Treasury. Any other money than this is to a certain extent counterfeit; it is false money, because when most needed it fails to be money and has to be "redeemed" in something else (gold) which can not be got except at ruinous sacrifice.

It is of the very essence of money—its pith and marrow and protoplasm—that it should be a legal tender, a universal solvent, the ultimate of payment, and redeemable, at the prices ruling, in everything that is on sale. If the volume of such money be properly regulated, while there may from time to time be variations in the prices of particular articles, the general range of prices will be maintained practically undisturbed.

What an absurdity it is for the Government to put its stamp on one thing in order to make it redeemable in another thing imprinted with the same stamp, but which nobody wants except for the purpose of getting a third thing that could have been got just as well without the intervention of the second. As well might he who, wanting water, is given a silver cup wherewith to get it, but on going to the spring is forbidden to drink until he exchanges his silver cup for a gold one.

The real reason why it is insisted that all other things than gold shall be exchangeable into gold is that gold is getting dearer by reason of decreasing supply and increasing populations. The necessity for convertibility into gold implies that, in ordinary times, a range of prices higher than the gold range will prevail, and when, by reason perhaps of increased activity of business, redemption comes to be demanded prices are at once precipitated to those of the gold standard and below, to the great advantage of the creditor classes, who, as owners of bonds, may be considered in the language of the stock exchange "long" on money, and to the equally great injury of the producing class, who, being in debt, may be considered as having sold money "short."

The supreme consideration is that the money of a country shall be so regulated as that prices may not fall from any cause inhering in the money system. The value of money—in other words, the sacrifice necessary to obtain it—should be no greater at one time than at another. In order to effect that object of prime consequence, to maintain the value of money unchanging, there should be no hesitancy whatever in changing the material of which it is made.

Nobody who has reflected on the subject for a moment doubts that what gave "value" or exchangeable power to the greenback was not the promise made on its face, without date, to pay a dollar, but the inscription on its back which declared it a legal tender for all dues and demands, public and private, except duties on imports. It was a misfortune to mankind that the words "promise to pay" were printed on it, because by it millions were led to believe that the "value" or exchangeable power resided in the promise instead of in the legal-tender power conferred upon it.

There is no object in redeeming in gold, except to maintain gold prices, that is to say, the range of prices prevailing in gold-using countries, and as those prices are constantly trending downward, any country that insists on maintaining the gold standard must accept the consequences in a corresponding fall of prices. The advocates of the gold standard, in effect, maintain that no matter to what extreme prices may fall, we must be content—we must bow in humble submission to the inevitable, since, in their view, it is more necessary to maintain the sacredness of the gold standard than to establish justice, promote prosperity, or to maintain equity in all time transactions.

It is in no way necessary, on account of any intrinsic or inherent quality of gold, that should have that particular metal, and that alone, for money.

It is boasted that gold is a universal measure. Why is it universal? Why is gold accepted in every country of the world? Not because the gold is wanted for any quality inherent in the metal, but because it is an order for property in gold-using countries, such as England, France, and Germany, whose trade is largely a foreign trade. At whatever rate gold will exchange in England, it will exchange in all countries having trade relations with England, because it is an order for goods in a country with which they are dealing. Will not the money of this country equally, and for like reasons, whether gold or silver, have acceptability in every country with which the United States have trade relations? Not for any quality inherent in the metal, but because it is an order for property in the United States. Will it not be willingly accepted by those who wish to buy in this country?

POSSIBLE EFFECT OF REDEMPTION IN BULLION.

In order to see the effect of the redemption of these Treasury notes in bullion, we have but to look at the possibilities of the situation. Suppose there were in the Treasury $300,000,000 worth of that bullion, which, by the taking up, little by little, and month by month, of the amount not used in the arts, would be taken by the Treasury at or about par. Then, suppose that for any reason, such as fear of approaching panic or otherwise, $100,000,000 of the Treasury notes were suddenly presented for redemption, and canceled, and the bullion as suddenly put on the market, what would it be worth? What would gold bullion be worth if it had not the privilege of coinage, and if $100,000,000 of it, deprived of the money use, was suddenly put on the market? Can there be a doubt that the abrupt output of so large a quantity would have the effect of immediately and enormously depreciating its value? In the case under consideration, the result would be that the silver remaining in the Treasury would not bring one-fourth the sum necessary to redeem the outstanding Treasury notes, so that not only would a heavy loss result to the Government, but, by reason of the sudden and serious contraction of the money volume, an infinitely greater loss would result to all the people.

But if it be deemed a remote contingency that any extraordinary amount would in that manner be suddenly taken from the Treasury, there is another danger which can not be put aside as improbable, but which, on the contrary, is to be looked for with almost absolute certainty, and to my mind, constitutes an irremovable and insurmountable objection to any system of bullion redemption.

A large number of merchants in London need, monthly, millions of dollars worth of silver to make payments in India. They will naturally want to get it at the lowest price, and it is not to their advantage to intensify the competition for it. On the contrary, it is to their direct advantage to depress the price to the lowest possible point.

As the Treasury of the United States would buy silver at the lowest price, the London merchants would refuse to enter the open market in competition with our Government for its purchase. But no sooner could the silver be stored in the vaults of the Treasury, than the agents of the London merchants would appear, and before any opportunity had offered for a favorable change in the price of the bullion, could present as many millions of these notes as might suit their purpose, and receive bullion therefor. A Secretary of the Treasury who conscientiously believed that it was his duty to maintain the gold standard at all hazards, would naturally feel compelled—certainly it would be in his power—to put out whatever amount of bullion he might deem necessary to accomplish that purpose, even if it all had to go.

Thus the United States Treasury would become the convenient and capacious conduit through which silver should immediately flow from this country to England, depriving our people, notwithstanding the legislative measures for their relief, of practically all use of silver as money, inasmuch as the four and a half-million dollars of Treasury notes would be withdrawn and canceled about as soon as issued.

Thus would our Treasury Department be made practically the purchasing agent in this country of any syndicate or combination of English merchants who might desire silver for the East India trade.

If it be said that no Secretary of the Treasury would attempt thus to defeat the will of the people as expressed in the law, the sufficient reply is that a conscientious man who believes that the honor of the United States is pledged to the maintenance of the gold standard, and that it is indispensable to the prosperity of the people, will exercise all the power vested in him by law to prevent a departure from that standard, and will regard himself as for the time being the savior of the Republic by keeping it from "the edge of so dangerous a peril" as the execution of the people's will.

Certainly no man will deny to the present Secretary of the Treasury entire rectitude of motive in all his conduct. From the well-known fact that since the passage of the limited coinage act of 1878 all our Secretaries have refrained from purchasing more silver than they were compelled to do by the mandatory provision of that law, it is reasonable to infer that none of them, if called upon to execute a law containing a silver bullion redemption clause, such as is suggested, would feel called upon to make a net purchase of more than $2,000,000 worth in each month; and that none of them would hesitate to exchange for Treasury notes all the monthly purchases of bullion in excess of that amount.

A PLANK FROM THE REPUBLICAN PLATFORM.

I must be pardoned for directing the attention of Senators on this side of the Chamber to a short declaration of the last Republican National Convention: