expressed this idea in the following words: "I believe that the world. is waiting for somebody to begin, and that the moment this great people throw open the doors of their mints . . . . the success of free coinage will be so well assured that the smaller nations of Europe who ardently desire the free coinage of silver money will at once come to the rescue, and that it is only a matter of courage that is required on our part to cease to regard the interested howls of the gold speculators, throw open the doors, and make a beginning."

Whether or not the United States could raise the value of silver seemed an immaterial consideration to many silver advocates. Leaving this question aside, it was vehemently urged that we would find no difficulty in maintaining the two metals in circulation under a free-coinage law. On this point was developed a remarkable contest concerning the existence and action of Gresham's law. A class of silver advocates denied the possible existence of such a law, and as this is a pivotal point in the discussion, liberal quotation may be pardoned. Representative Lane took, perhaps, the most extreme attitude. He said: "This union of the two metals, this blending of them into one standard for practical use, is improperly called the 'double standard,' for in reality it is a single standard of two metals, exactly a combination of the two as one."

This was equaled only by the following: "I believe too that the free coinage of silver will bring gold to us, not drive it away. Money attracts money. Riches produce riches. Wealth has no liking for anything so much as itself. Everything assimilates with its kind. Money is the most social, self-assimilative, and procreative of all material things."

Another and more common position was taken by Senator Daniel: "How is the gold dollar likely to go to a premium over the silver dollar? What condition could exist to drive it to a premium? What use will there be for a gold dollar, making it desirable that a man shall part with more than one silver dollar in order to get a gold dollar? He can pay as much tax with a silver dollar as with a gold dollar. He can discharge as much debt with his silver dollar as with his gold dollar. He can buy as much of any commodity with his silver dollar as with a gold dollar, and why then should he give more for a gold dollar than for a silver dollar?"

A favorite mode of denial was to point to our own experience since 1878. Said Senator Harris: "The experiment of eleven years of a coinage has effectually exploded the argument based upon the idea

that the remonetization and coinage of silver would drive gold out of the country." The question was frequently asked, If 343 millions of silver dollars will not drive out gold how much will? These denials and queries at once lose all force, however, when we consider that the operation of Gresham's law presupposes free coinage, while under our statutes the government reserves the right of coinage to itself, and retains in its vaults, as profit to itself, all seignorage.

The position held by the majority of the national bimetallists was, however, less extreme. They admitted the existence of Gresham's law, but affirmed that its action was confined to limited conditions. Gold, they asserted, could only be driven out by silver dollar for dollar in legitimate trade, and then only when the balance of trade is against us, or we have a surplus of money, or our securities and investments become no longer desirable. These assumptions, one and all, because they ignore the existence of the money broker, and the fact that a metal money may disappear as well in the melting-pot and by domestic hoarding as through the channels of commodity exchange, must be seen to be untenable.

B. THE REASONING FOR INFLATION

We come now to a different class of arguments upheld by men actuated by less worthy motives. For the origin of this class of reasoning in this country we must look to the financial history of the Civil War and the old greenback movement.

The advocacy of silver by the inflationist was based on the old familiar assumption that the quantity of money controls prices and that high prices mean prosperity. This view was supported by the usual assertions that throughout history the prosperous eras have always been periods of high prices; the conclusion of course being that high prices were the cause of the prosperity.

The inflationist accepted unreservedly the idea that it is impossible to have too much money. Said Mr. Perkins: "In my reading, or otherwise, I have never learned of any people who had too much good money to contribute to their happiness, to their support, and to the comfort of their homes. No one ever had too much money for caring for his little ones, for carrying on domestic concerns, which affect the happiness of the fireside of every man.”

The line of reasoning of the inflationist was completed by the argument that the degradation of metallic currency is impossible. A plain statement of this position is found in the speech of Senator Pugh:

"The people in no time of our history, and no country in the world's history, ever suffered in trade and commerce or otherwise from having too much coined money in circulation, or as the basis of circulation. Who ever heard of inflation in gold or silver money, or in paper money founded on it for redemption? How can there be depreciation in the unit of money value compounded of gold and silver, so long as the unit is the coin of the government, declared by a law of Congress to have the value of a dollar?"

It will be seen that this assumption was based upon the belief that the value of the monetary unit is independent of the bullion value, but depends solely on the stamp of the government, the legal-tender function given it. Senator Jones, of Nevada, was the most ardent advocate of this theory: "The logic of the situation and the reasoning of all the leading authorities on money lead irresistibly to the conclusion that its value does not reside in the material but in the stamp; in other words, on the legal-tender function impressed on that metal.

. . . The commodity value of any material on which the money function may be stamped is too trifling to merit attention. . . . There was never a dollar coined that did not legally and practically contain 100 cents."

Such being their monetary theory, the primary desire of this class of silver advocates was simply for more money to raise prices. Why did they resort to silver to satisfy their desire? Simply as a matter of expediency. They had no love for silver as such, but it was the cheapest and most abundant substance for which they could gain support, its use would result in more legal-tender currency, and its metallic character would in a measure shield the advocates from being stigmatized as inflationists. Three facts exist which prove that the object aimed at by this class of silver advocates was simply and only more money and not especially more silver money. First, they made no effort toward the remonetization of silver until after the fall in its value in 1876; secondly, the members of this same class exerted themselves to force the reserves held by the government into circulation; and, thirdly, they openly declared that their object could be attained as well by putting fewer grains in the gold dollar.

The inflationists admitted freely that the free coinage of silver would result, not in a bimetallic currency, but in the silver standard of values. In logical keeping with their monetary theories, they hailed the result with pleasure. Having assumed that the value resides solely in the stamp of the government, a cheaper metal is as

stable and costs less to maintain. By resort to the silver standard the United States would make money by disposing of its gold, and also in the enhanced price of silver. "And further," added Senator Jones, "the export of our gold will raise the price for our exported goods." Such was the reasoning for inflation in the silver debate of

1890.

C. THE REASONING IN FAVOR OF THE DEBTOR CLASS

The train of reasoning in favor of the debtor class is closely allied to that which was urged in favor of currency inflation. Both proceeded from a desire for more money and higher prices, but while the inflationists emphasized the benefits of rising prices, this class called especial attention to the evils of falling prices. The two lines of reasoning might be called complementary. The supposition at the foundation of the reasoning for the debtor class was that the depression under which the country labored had been caused by a contraction of the currency (producing lower prices and so decreasing debt-paying power) due to the silver legislation of 1873. The per capita circulation was not sufficient for the needs of trade.

The contraction of the currency being assumed, the silver advocate proceeded to emphasize the evils resulting therefrom. The following from a speech of Senator Jones is a characteristic example: "It is my firm conviction that the inexpressible miseries inflicted upon mankind by war, pestilence, and famine have been less cruel, unpitying, and unrelenting, than the persistent and remorseless exaction which this inexorable enemy has made upon society. As the volume of money contracts, prices decline, and with the decline of prices comes stagnation of industry. . . . . Stores, workshops, and factories, unoccupied and unused, are found on every hand. Crime increases, bankruptcies multiply, and even though the aggregate of wealth augments, it is unjustly distributed, and is consequently barren of results."

A careful examination of the statements on this subject seems to show that the silver advocates attributed the evils of contraction to two causes: first, the raising of the standard of deferred payment (by the fall of prices) and consequent increase of burdensome indebtedness; and, secondly, the decrease of loanable capital.

The reasoning in favor of the debtor classes was completed by an attempt to prove the justice of free silver as a remedy for the evils of contraction. The arguments were (1) theoretic, (2) technical, and (3) moral.

(1) It was urged that gold had risen in value, while silver, instead of falling, had maintained a remarkable steadiness as compared with the value of staple commodities. The belief that gold had risen followed logically from the postulate that credit must bear a fixed proportion to metallic money. If this be true, and the law of 1873, as was claimed, had cut off one-half the metallic basis, the increasing monetary work of the world was thrown upon the remaining metal, and its rise in value followed naturally. The steadiness in the value of silver was plausibly maintained by reference to tables of prices dating from 1873.

(2) Technically it was maintained that there are no obligations in the United States which may not be paid as well in silver as in gold. The Constitution, it was urged, provided for the coinage of gold and silver, and the law of 1873 was in direct violation of this. The Constitution secured the absolute right of the debtor to pay in the cheaper coin. Said Congressman Moore, of Texas: "Congress had no more power to demonetize it than it had to pass an ex post facto law." In this connection it was denied with great earnestness that we were actually upon a gold basis.

(3) Finally it was claimed that "this cry for the best money is at last beginning to be recognized for what it is: the cunning device of creditors to catch the conscience of the people and play upon the sense of fairness that characterizes the great mass of mankind."

To crown the argument the cry was raised that the limited coinage of silver is an unjust discrimination against the people's money: "Silver is the money of the people, the common people, not of the speculators, not of the wealthy men, not of the kings and princes and potentates. It is the money of the people and has been the money of the people so long and so far back in the history of the race as we have any record of whatever."

It seems almost incredible that this train of reasoning, its assumptions based on error in fact, its postulates on error in theory, and its conclusion leading directly and inevitably to repudiation, could have found supporters in the Congress of the United States, yet it was maintained vigorously by the leaders of the silver party in both Houses and with far more energy than it was opposed.

D. THE REASONING IN FAVOR OF A SPECIAL INDUSTRY

By the close of the last decade the persistent fall in the market value of silver had convinced the mine-owners and all those dependent