Q. David Bowers
"SEC. 7. That this act shall take effect thirty days from and after its passage.
"Approved, July 14, 1890.
"Another effort was made in 1891 and two in 1892 to pass a bill for the free coinage of silver, but to no purpose.
"The monetary policy of the United States since 1878 was now productive of its fatal results-the monetary crisis of 1892 and 1893, and from which the country is only now recovering. Early in 1893 it was clearly seen that the monthly purchase of 4.5 million ounces of silver bullion had not and could not result in the maintenance of the price of that metal. There was a feeling of mistrust abroad as to the stability of the currency of the United States, which not only discouraged investments in American securities, but encouraged their return.
"From July 1, 1890, to June 30, 1893, the loss in gold by export was $188 million. On the 27th of June, 1893, India closed her mints to the free coinage of silver, which intensified the monetary crisis. Congress met in extraordinary session August 7, 1893, on the call of the president, to consider the monetary condition of the country, and on November 1, 1893, an act was passed repealing the purchasing clause of the Act of 1890, after there had been bought under that act 168,764,682.53 ounces of fine silver, at a cost of $155,931,002.25. The act repealing the purchasing clause of the Act of July 14, 1890, is as follows:
"That so much of the act approved July 14, 1890, entitled 'An act directing the purchase of silver bullion and issue of Treasury notes thereon, and for other purposes,' as directs the secretary of the Treasury to purchase from time to time silver bullion to the aggregate amount of four million five hundred thousand ounces, or so much thereof as may be offered in each month at the market price thereof, not exceeding one dollar for three hundred and seventy-one and twenty five one-hundredths grains of pure silver, and to issue in payment for such purchases Treasury notes of the United States, be, and the same is hereby, repealed. And it is hereby declared to be the policy of the United States to continue the use of both gold and silver in money of equal intrinsic and exchangeable value, such equality to be secured through international agreement, or by such safeguards of legislation as will insure the maintenance of the parity in value of the coins of the two metals, and the equal power of every dollar at all times in the markets and in the payment of debts. And it is hereby further declared that the efforts of the government should be steadily directed to the establishment of such a safe system of bimetallism as will maintain at all times the equal power of every dollar coined or issued by the United States, in the markets and in the payment of debts.
"Approved, November 1, 1893.
"The total amount of silver purchased under the acts of 1878 and 1890 was, 459,946,701.099 fine ounces, at a cost of $464,210,262.92.
"REFORM OF OUR CURRENCY SYSTEM.
"From all that has been written above, it is clear that the result of the currency legislation of the United States, especiallyafter 1873, has been to leave it a monetary system, as inconsistent, illogical, dangerous, and expensive as can well be imagined-one which inspires little confidence at home, and is certainly not conducive to our credit abroad. Its reform is one of the most important and most urgent political and financial questions of the hour, as well as one of the most difficult-fully as difficult as the task that confronted Hamilton toward the close of the last century-on account of the magnitude, the diversity, and the conflict of interests, real or imaginary, involved in its solution. But for this conflict of interests, sectional and other, and the erroneous ideas of the real principles of currency, to which a great portion of American voters have, for about thirty-three years, become habituated, the reform of our monetary system would not be so arduous, for the principles which should guide us in it are easily acquiesced in by an unbiased mind."
Sen. Sherman on Silver (1895)
The following commentary by Sen. John Sherman is from the book, Silver and Gold, published in 1895, during the height of the "gold and silver question," a controversy which pervaded America and, in particular, politics in America:
"If we adopt the single standard of gold without aid from silver, we will greatly increase the burden of national and individual debts, disturb the relation between capital and labor, cripple the industries of the country, still further reduce the value of silver, of which we now have in the Treasury and among our people over $593 million, and of which we are the chief producer, and invite a struggle with the great commercial nations for the possession of the gold of the world.
"On the other hand, if we continue the purchase of silver, we will eventually bring the United States to the single standard of silver-a constantly depreciating commodity, now rejected by the great commercial nations as a standard of value; a commodity confessedly inconvenient by its weight, bulk, and value for the large transactions of foreign and domestic commerce, and detach us from the money standard now adopted by all European nations, with which we now have our chief commercialand social relations. In dealing with such a question we surely ought to dismiss from our minds party affinities or prejudices; all local and sectional interests, and all preconceived opinions not justified by existing facts and conditions.
"Upon one thing I believe that all agree: That both these extreme positions shall be rejected; that both silver and gold should be continued in use as money-a measure of value; that neither can be dispensed with. Monometallism, pure and simple, has never gained a foothold in the United States. We are all bimetallists. But there are many kinds of bimetallists. One kind favors the adoption of the cheaper metal for the time being as the standard of value. Silver being now the cheaper metal, they favor its free coinage at the present ratio, with the absolute certainty that silver alone will be coined at our mints as money; that gold will be demonetized, hoarded at a premium, or exported where it is maintained as standard money. The result would be monometallism of silver.
"Another kind of bimetallist, recognizing that 16 ounces of silver are not worth in the market 1 ounce of gold, proposes the free coinage of 20 ounces of silver as the equivalent of 1 ounce of gold. But this is only a difference in degree, because 1 ounce of gold is worth from 27 to 29 ounces of silver. Gold being undervalued, the hoarding or exportation of gold will inevitably follow, and silver will be the only standard. Another kind of bimetallist is one who believes that the essential quality of bimetallism requires that the coins of the two metals shall be maintained of equal purchasing power. The only way in which this can be done, in case the two metals are not on a parity of value at the legal ratio, is by freely coining the more valuable metal and coining the cheaper metal at the legal ratio, and maintaining by the flat of the government coins of the two metals at parity with each other.