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10 The Conservative.
IIISTOKV OF THE GOLD STANDARD.
[ Address by 'Mr. Horace White , Editor of
The New York Evening Post , at the Na
tional Currency Convention , Omaha , Neb. ,
September lath , 18(6. ( ]
The part assigned to mo in this discus
sion is the history of the gold standard.
That theme is not so interesting today
as it was when I essayed it at the
World's Congress of Bankers and Fi
nanciers in Chicago five years ago. The
nation has moved forward since that
time , and some things , about which
there was great dearth of information
then , are pretty well understood now.
I shall not repeat what I have already
said on the subject. The history of the
gold standard is substantially a narra
tive of attempts on the part of govern
ments and peoples to make two metals ,
variable- their nature , stable in refer
ence to each other. These attempts
were generally honest , although some
times advantage was taken of the varia
tions , and of the recoinages which fol
lowed , to nmko an illicit gain for the
government or for the reigning monarch ,
at the expense of the people. Mr. W.A.
Shaw , in his "History of Currency , "
tells us that in France the legal ratio
between silver and gold was changed
150 times in a single century , or at the
rate of three times every two years. Of
course there could not have been that
number of recoinages. The changes of
ratio were simply decrees issued by the
royal authority. There were five com
plete recoiiiages in the reign of Louis
XV , and the reign of Louis XVI began
with a sixth.
RECENT PROGRESS OF THE WORLD TO
WARD THE GOLD STANDARD.
In niy discourse at Chicago in 1898 1
gave on account of the changes in the
market ratio of the two metals in Eu
rope and America which had led the
nations , one by one , to the conclusion
that it was perfectly futile to attempt to
have a double standard of value that it
was impossible to do so , and that all the
time spent in seeking it was wasted , like
the pursuit of an ignis fatuus. The result
was that in nearly all civilized countries
the single gold standard had at that
time been adopted. A few days later
( Juno 20 , 1893) ) it was announced that
India had discontinued the coinage of
silver , with the purpose of adopting the
gold standard as soon as possible. Chile
adopted the gold standard in 1896 , Japan
adopted it in 1897 , and Russia has com
pleted her arrangements for that pur
pose during the present year. Ecuador
and Peru have either adopted the gold
standard or have announced their in
tention to do so. The only country
that has gone back from gold to silver
is Spain , and this has been due to her
recent misfortunes. Substantially the
only silver standard countries remain
ing are China and Mexico. There are no
bimetallic or double standard countries
now. I believe that Mexico has gold
coins circulating at their commercial
value , as India has. This is not bimet
allism. That term means the concur
rent circulation of two metals at a ratio
fixed by law , as , for example , sixteen
pounds or ounces , of coined silver as the
equal of one pound or ounce of coined
gold. There is no such circulation in
any part of the world , cither at the
ratio of 16 to 1 or at any other ratio.
When the government of India dis
continued the coinage of silver in 1893
the rupee was worth 15 d. in gold. Its
value followed that of silver downward
until it reached 18d. Silver continued
to fall , but the rupee remained at or
near 18d. As the quantity of rupees
could not be increased , they ceased to
be governed by the price of silver in the
market , but fluctuated within narrow
limits like an irredeemable paper cur
rency. By and by they began to rise.
They are now worth 16d. This is the
price at which the government hoped to
make the rupee and the pound sterling
circulate together freely , / . c. , fifteen
rupees equal to one pound. As the
market ratio seems tolerably firm , the
government has decided to establish the
gold standard , and is now talcing steps
to that end.
INTERNATIONAL BIMETALLISM.
This is all that history has to say
about the gold standard since 1898.
There is something to be said about in
ternational bimetallism since that time.
Entertaining sincere respect for Senator
Wolcott and his colleagues who visited
Europe lost year in the endeavor to pro
mote international bimetallism , I think
that the failure of their mission must be
taken as couchisive against the success
of any such scheme. There have been
three international conferences called
together to promote this object , all of
which failed one in 1878 , another in
1881 , still another in 1892 , the Wolcott
commission of last year being an en
deavor to bring about a fourth. The
failure of the Wolcott commission grew
out of the attempt the very proper at
tempt to define in advance what steps
should be taken to put bimetallism in
practice. All the previous conferences
had been brought together without any
plans at all. The Wolcott commission
proposed that the ratio of 15fj to 1 be
tween silver and gold should be adopted ,
and that the United States , France and
India should agree to open their mints
to the unlimited coinage of silver on
that basis. England had previously de
clined to adopt bimetallism for herself
on any terms or ratio whatsoever , but
had offered to recommend to the gov
ernment of India the reopening of the
mints of that country and to advise the
Bank of England to keep one-fifth of
her metallic reserves in silver. There
wore some minor projects to give silver
a lift , but these wore the principal ones.
There is no doubt that Lord Salisbury
and his colleagues honestly did all that
they could to promote the success of
this plan , but when it was brought for
mally before the government of India it
was rejected with something like terror.
It was a plan , they said , to introduce
unheard-of fluctuations in the rate of
exchange , to throw all business into con
fusion , to inflict enormous losses upon
individuals , and to undo all that they
had gained since 1893. They said that
they never could give their assent to it ,
and they implored the government of
Great Britain to dismiss it from their
minds. This reply was wholly unex
pected by the Salisbury ininistiy , and
was received by them with disappoint
ment and even dismay.
That was not the only obstacle encoun
tered by the government. It had agreed
to advise the Bank of England to keep one-
fifth of its reserves in silver , and the
Bank had taken some action which the
public construed to be an assent. There
upon there came such an outburst of re
monstrance from the leading financiers
and merchants of the United Kingdom
that the whole project fell dead. Sena
tor Wolcott preached its funeral sermon
after he came home.
I have said that Mexico and China
are the only countries of any size that
adhere voluntarily to the silver standard.
Mexico is a large producer of silver , and
is still rather backward in point of civil
ization. China can hardly be said to
have a government. Does not the una
nimity of the civilized world stand for
something in this debate ? Is it not
reasonable to suppose that the nations
understand their true interests in this
matter ? Is it not probable that our in
terests are the same as theirs ? Two
years ago we heard a great deal about
the British gold standard , in terms im
plying that if Great Britain has the gold
standard we ought to be against it. By
a parity of reasoning , I suppose that if
Spain has the silver standard now , we
ought to be against that.
"NOT ENOUGH GOLD TO DO THE WORLD'S
BUSINESS. "
You have often heard it said , as an
objection to the gold standard , that
there is not gold enough in the world to
do the business of the world. It has not
always been easy to answer this objec
tion , because there are no statistics
either of the amount of gold in the
world , or of the amount of business in
the world ; nor , if there were such statis
tics , is there any standard of sufficiency
by which wo could judge whether
the right proportion exists between the
two. As Mr. Fred Perry Powers has
very wisely said in a recent pamphlet :
"Use means a radically different thing
when applied to money and when ap
plied to wheat. Wheat is used when
eaten ; it is destroyed in the process ;
the same wheat cannot answer the uses
of two men , or supply the needs of the
same man twice ; it is possible to ascer
tain how much wheat one man needs ,
and therefore to compute whether there