CHAPTER XXVIII.: Taxation by Bad Money.

Since the two foregoing chapters on our monetary system were completed I have received John Henry Norman’s book upon The World’s Exchanges, published by Sampson Low, Marston, & Co., London.

In this work simple rules are given for computing the relative value of all the coins of the world by the relative weight in grains of pure gold or pure silver in each coin. That is manifestly the only true method of determining their value, as the proportion of alloy in each coin varies in different countries.

For instance, the gold dollar of the United States, which is the lawful unit of value, weighs twenty-five and eight-tenths grains (258/10), but it consists of nine parts of pure gold and one part of alloy; the coin is nine-tenths fine, it therefore contains twenty-three and twenty-two-hundredths grains (2322/100) of pure gold.

The English pound sterling is a name or definition of the weight of one hundred and thirteen grains and a very small fraction (113.0016) of pure gold. The coin named sovereign, which is the equivalent of the pound when of full weight, consists of 916.667 parts of gold and 83.333 parts of alloy, the coin being seven-eighths fine.

The alloy in the coinage of other countries varies in some cases from either standard, therefore in order to ascertain the relative value of any coin the computation of the value for such comparison must be made by the relative weight of pure metal.

The elements of weight and valuation are inseparable; there is no method of comparing value except by weight, Edition: current; Page: [234] and no act of any country can change or alter the value of a coin except by adding to or taking off a part of the pure metal.

This computation I have tabulated from Norman’s work, and the tables below have been carefully corrected by him.

It would be well that the following tables should be officially verified by the officers of the United States Mint, or that corresponding tables should be given if the computations have already been made. I am not aware that any such tables exist.1

Gold coins named in Norman’s work, with weight of pure gold in each stated in troy grains, and relative value as compared to the gold dollar of the United States:

Country.		Name of coin.		Grains of pure gold.	Relative value.
1. {	United States	1	Dollar	23.21997	$1.00
	United States	5	Dollars	116.09985	5.00
	United States	10	Dollars	232.19970	10.00
2.	Great Britain	1	Sovereign	113.0016	4.866
3.	France	20	Francs	89.60701	3.859
4.	Germany	20	Marks	110.6268	4.764
5.	Netherlands	10	Guilders	93.45985	4.025
6.	Denmark	20	Crowns	124.45418	5.360
7.	Austria	8	Florins	89.60701	3.859
8.	Russia	5	Roubles	92.57403	3.986
9.	Turkey	1	Pound	102.0804	4.396
10.	Portugal	5	Milreis	125.4425	5.402
11.	Egypt	1	Pound	114.7781	4.943
12.	Mexico	16	Pesos	365.45753	15.739
13.	Cuba	1	Peso	21.5019	.926
14.	Chili	5	Pesos	105.92533	4.562
15.	Brazil	10	Milreis	126.81996	5.461
16.	Peru	10	Sols	224.01753	9.647
17.	Uruguay	5	Pesos	120.0750	5.170
18.	Argentine	5	Dollars	112.00875	4.825
19.	Japan	5	Yen	115.74262	4.984
20.	Philippines	1	Peso	22.83705	.9834
21.	India	15	Rupees	165.0000	7.106
22.	Persia	1	Thoman	52.96536	2.281
23.	Tunis	50	Piastres	135.55776	5.838
24.	Newfoundland	2	Dollars	47.07895	2.027

Edition: current; Page: [235]

Silver coins named in Norman’s work, with weight of pure silver in each stated in troy grains, and relative value as compared to the silver dollar of the United States of 412½ grains nine-tenths fine, 371.2514 pure; also their relative value in gold at the present price of silver bullion.

Country.		Name of coin.		Grains of silver.	Relative value in silver at 16 parts of silver to 1 part of gold.	Value at 30 per cent. discount in ratio to gold.
1.	United States		Dollar	371.2514	$1.00	.70
2.	Great Britain		Shilling	80.72937	.2174	.1522
3.	France		Franc	69.4455	.18705	.1310
4.	Germany		Mark	77.1617	.20784	.1456
5.	Netherlands		Guilder	145.8357	.3928	.2751
6.	Denmark	2	Crowns	185.1882	.4988	.3493
7.	Austria		Florin	171.4703	.4618	.3235
8.	Russia		Rouble	277.7221	.74807	.5240
9.	Turkey	20	Piastres	308.1168	.8299	.5910
10.	Portugal	5	Testoons	176.8284	.4763	.3337
11.	Egypt		Pound	173.6139	.4676	.3276
12.	Mexico		Dollar	377.0586	1.0156	.7127
13.	Cuba
14.	Chili		Dollar or peso	347.2278	.9352	.6551
15.	Brazil	2	Milreis	360.7311	.9716	.6805
16.	Peru		Sol	347.2278	.9352	.6551
17.	Uruguay		Peso	347.2278	.9352	.6551
18.	Argentine		Dollar or peso	347.2278	.9352	.6551
19.	Japan		Yen	374.40	1.0084	.7060
20.	Philippines		Dollar	360.5614	.9712	.6804
21.	India		Rupee	165.0000	.4444	.3111
22.	Persia		Kran	63.0316	.1697	.1190
23.	Tunis		Piastre	43.0145	.1158	.0813
24.	Newfoundland		Half dollar	168.1871	.4532	.3173
25.	Java		Dollar	376.1434	1.0113	.7093
26.	Tripoli		Mahbub	313.2101	.8434	.6910
27.	Siam		Tical	206.2850	.5556	.3892
28.	Shanghai, China		Trade dollar	378.0000	1.0182	.7128
29.	China		Tael—weight not a coin.	513.0572	1.3819	.9673

“The above silver equivalents are found by dividing the grams of pure silver in each money of current in the large table of the Guide by 24.0567 grams.”—J. H. N.

Edition: current; Page: [236]

In making these tables through the aid of Mr. Norman I was not aware that a similar valuation had been made by Mr. Edward O. Leech, Director of the Mint, which is to be found in Johnson’s Encyclopædia, edition of 1888, Vol. II., pages 144-146, under the Edition: current; Page: [237] article “Coinage.” From this table compiled by Mr. Leech, condensed tables have been prepared, which are given below, giving the value, as estimated by him, of the principal coins mentioned by Mr. Norman, in which some slight variations may be found from the previous tables, and some further valuations are added.

TABLE OF FOREIGN COINS.
GOLD.

Countries.	Standard.	Denomination of Coins.	Weight, Grains.	Fineness, Thousandths.	Pure gold, contained grains.	Value in U. S. gold coin.
Argentine Republic	Double	Argentine	124.451	900	112.006	$4.82.3
Austria-Hungary	Single Silver	(8 Guldens) 8 Florins	99.561	900	89.605	3.85.9
Bolivia	Single Silver	Onza	385.800	900	347.220	14.95.4
Brazil	Single Gold	20 Milreis	276.695	916⅔	253.637	10.92.3
Bulgaria	Double	Alexander (20 Leii)	99.561	900	89.605	3.85.9
Central American States	Single Silver	{ Onza or Doubloon coined prior to 1870.	417.590	875	365.390	15.73.6
Costa Rica }	Single Silver
Guatemala }
Honduras }
Nicaragua }		{ 20 Pesos, coined since 1870 }	497.806	900	448.025	19.29.5
Salvador. }
Chili	Double	Condor	235.384	900	211.845	9.12.3
Colombia	Double Silver	Double Condor	497.806	900	448.025	19.29.5
Cuba	Double Gold	Doubloon (Isabella)	129.538	900	116.584	5.01.7
Equador	Double Silver	Double Condor	497.800	900	448.025	19.29.5
Egypt	Double Gold	Eg’y Pound	131.172	875	114.775	4.94.3
Finland	Double Gold	20 Markkaa	99.561	900	89.605	3.85.9
German Empire	Double Gold	Double Crown (20 marks)	122.915	900	110.623	4.76.4
Great Britain	Double Gold	Sovereign	123.270	916⅔	113.000	4.86.65
Hayti	Double Gold	10 Gourdes	248.903	900	224.012	9.64.7
India	Double Silver	Mohur (15 Rupees)	180.000	916⅔	165.000	7.10.6
Japan	Double (practically Single Silver)	Yen	25.720	900	23.148	.99.7
Latin Union	Double	100 francs	497.806	900	448.025	9.29.5
{ Belgium (francs)	Double	50 francs	248.903	900	24.012	19.64.7
{ France (francs)	Double	20 francs	99.561	900	289.605	.85.9
{ Greece (drachmas)	Double	10 francs	49.780	900	44.802	1.92.9
{ Italy (liras)	Double	5 francs	24.890	900	22.401	.96.4
{ Switzerland (frs.)	Double
Mexico	Single Silver	Peso	26.111	875	22.847	.98.4
Netherlands	Double	10 Florins	103.703	900	93.332	4.01.9
Persia	Single Gold (recent)	2 Tomans	87.962	900	79.166	3.40.9
Peru	Single Silver	20 Sols	497.806	900	448.025	19.29.5
Portugal	Single Gold	Crown (10 Milreis)	273.686	916⅔	250.878	10.80.4
Roumania	Double	20 Leis	99.561	900	89.605	3.85.9
Russia	Single Silver	Imperial (10 Roubles)	199.133	900	179.219	7.71.8
Scandinavian Union	Single Gold	20 Kroner	138.280	900	124.452	5.35.9
Denmark	Single Gold	10 Kroner	69.140	900	62.226	2.68.0
Norway	Single Gold
Sweden	Single Gold
Servia	Double	Milan (20 Dinars)	99.561	900	89.605	3.85.9
Spain	Double	25 Pesetas	124.451	900	112.006	4.82.3
Tunis	Double	100 Piastres	300.924	900	270.831	11.66.4
Turkey	Double (practically Gold)	500 Piastres	556.817	916⅔	510.416	21.98.2
Venezuela	Single Silver	100 Bolivars	497.806	900	448.025	19.29.5

TABLE OF FOREIGN COINS.
SILVER.

Countries.	Denomination of Coin.	Weight, grains.	Fineness, Thousandths.	Pure silver, contained, grains.	Value compared with silver in U. S. silver dollar.
Argentine Republic	Peso	385.800	900	347.220	$0.935
Austria-Hungary	Gulden (florin)	190.517	900	171.465	.462
Bolivia	Boliviano	385.800	900	347.220	.935
Brazil	2 Milreis	393.516	916⅔	360.723	.972
Bulgaria	2 Leit	154.323	835	128.857	.347
Central American States	Peso	385.800	900	347.220	.935
Costa Rica }	¼ Peso	96.450	900	86.805	.234
Guatemala }	½ Peso	192.900	900	173.610	.468
Honduras }	Dime	38.580	835	32.214	.087
Nicaragua }	½ Dime	19.290	835	16.107	.043
Salvador }
Chili	Peso	385.800	900	347.220	.935
Colombia	Peso	385.800	900	347.220	.935
Cuba
Equador	Sucre	385.800	900	347.220	.935
Egypt	20 Piastres	432.096	833⅓	360.080	.970
Finland	2 Markkaa	159.952	868	138.836	.374
German Empire	5 Marks	428.666	900	385.800	1.039
Great Britain	Florin	174.535	925	161.445	.435
Hayti	Gourde	385.800	900	347.220	.935
India	Rupee	180.000	916⅔	165.000	.444
Japan	5 Sen	20.800	900	18.720	.051
Latin Union	5 Francs	385.800	900	347.220	.935
{ Belgium (francs)	2 Francs	154.323	835	128.857	.347
{ France (francs)	1 Francs	77.160	835	64.428	.174
{ Greece (drachmas)	50 Centimes	38.580	835	32.214	.087
{ Italy (liras)	20 Centimes	15.432	835	12.886	.035
{ Switzerland (francs)
Mexico	5 Centavo	20.889	902.7	18.859	.051
Netherlands	Florin	154.323	945	145.832	.393
Persia
Peru	Sol	385.800	900	347.220	.935
Portugal	500 Reis	192.900	916⅔	176.825	.476
Roumania	5 Leii	385.800	900	347.220	.935
Russia	Rouble (prior to 1886)	319.920	868.05	277.706	.748
Scandinavian Union	2 Crowns	231.480	800	185.184	.499
Denmark
Norway
Sweden
Servia	5 Dinars	385.800	900	347.220	.935
Spain	5 Pesetas	385.800	900	347.220	.935
Tunis
Turkey	20 Piastres	371.216	830	308.104	.830
Venezuela	5 Bolivars	385.800	900	347.220	.935

Edition: current; Page: [238]

There are 480 grains in a troy ounce. There are 371.2514 grains of silver in a silver dollar. Therefore, in order that a silver dollar may be worth as much after it is melted as it purports to be worth in the coined dollar, the price of bullion in New York must be a fraction over $1.29 per ounce. Fine silver bars are now worth 88 to 90 cents per ounce. In other words, they are at a discount of thirty per cent., and the true value of the silver dollar at the present standard is substantially seventy cents; it has recently been worth less.

The prices of all our principal products are now on a gold basis. We get one hundred cents’ worth of gold or its equivalent for each dollar’s worth of cotton, corn, wheat, pork, butter, or other goods that we export; our whole internal traffic is on the same basis and is measured at the same standard.

The rates of wages and the incomes of all our people are now on a gold basis, liquidated in money worth one hundred cents on each dollar.

The only effect of debasing our standard to silver worth seventy cents on a dollar will be to lower wages by destroying credit.

The advocates of the free coinage of silver dollars of full legal tender have the audacity to say that an act for the free coinage of silver will bring the silver bullion and the silver coin of the world up to par in gold. They undertake to say that the United States can raise the value of silver from seventy cents, where it now is, to one hundred cents in gold, an advance of a fraction less than forty-three per cent. This claim only needs to be stated in order that its absurdity may be made conspicuous. The power of the United States to promote the circulation of silver certificates convertible into gold is already exhausted. Silver bullion is now uselessly piling Edition: current; Page: [239] up in the Treasury at the cost of the tax-payers of this country.

The people of this country are now paying a tax in gold of $4,000,000 per month, or $48,000,000 a year, for the purchase of silver bullion that nobody wants to use as money either in coin or in certificates.

When the legal-tender notes of the United States first depreciated, the depreciation being shown by what was called the premium on gold, gold vanished from circulation and was hoarded or exported on the very day the premium reached even one per cent. When the so-called premium on gold reached a little higher rate, so that our subsidiary silver coin became worth more than the paper currency, the whole of our silver coin vanished and was seen no more for many years. As we moved on in 1878 toward resumption on a gold basis, January 1, 1879, the silver coin first re-appeared and the gold next came back into the vaults of the Treasury and of the banks. No one could trace the silver and only a part of the gold in the statistics of the export and import of the precious metals.

A difference of a fraction of one per cent. turns the tide of gold from one country to another. What would be the effect on silver when we offer to coin it at forty per cent. profit?

Our gold coin can be converted into sovereigns at the rate of $4.8666 to one sovereign. The sovereign is the coin which corresponds to the pound sterling, the pound sterling is the standard of international commerce. If the free coinage of silver dollars of full legal tender were granted, any foreign banker could now purchase silver enough to make $4.86 for less than three dollars and a half in gold. This conversion would be at work at once. These dollars would then be paid out in this country as a full legal tender on all contracts for cotton, wheat, provisions, Edition: current; Page: [240] and other goods. Gold would be drawn out from the Treasury and from our banks to be shipped to England. The shock to credit would stop trade, except for daily necessities of life. The bankers who deal in exchange would make immense profits on the import and conversion of silver into dollars, and the stupid people would suffer the cost. People are slow, but not so stupid as they seem. This nefarious act cannot be done.

The advocates of the free coinage of silver dollars of full legal tender at the present time are trying to induce the people of this country to offer one hundred cents’ worth of gold, or of our cotton, grain, meats, provisions, oil, and other products now worth one hundred cents in gold at present prices, for the whole volume of silver coin or bullion in the world which is now worth but seventy cents in gold. This would give forty per cent. profit to the dealers in silver bullion.

The figures which I have given prove this, and no man capable of reasoning can deny it. It is beyond the power of the silver Senators and Representatives to disprove this statement.

The Republican Senators and Representatives of the silver-mining States now demand that the West and the South shall take seventy cents’ worth of silver instead of one hundred cents’ worth of gold for their cotton and their grain in order to enable the silver miners to sell their little petty product of silver for more than it is worth. The Democratic Senators of the South and West with few exceptions have nibbled at this bait, but the trap has not yet been sprung.

The trick is exposed, and the masses of the people who would pay the terrible cost of this nefarious measure have warned their representatives that this fraud must not be put upon them.

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No coined money is true money and no coined standard can be a true standard or unit of value of which the bullion is not worth as much after it is melted as it purports to be worth in the coin.

The silver dollar of the present standard is bad money; it is a false standard because it does not meet these conditions. Its coinage must cease and the purchase of silver bullion must be stopped. This verdict has been rendered, and either this or the next Congress will enforce the decision by suitable legislation.

The Bland act and the McKinley act have been alike condemned,—neither has any intellectual standing nor any intelligent support. Both are marked alike by a perversion of the power of taxation to purposes of private gain in total disregard of the public welfare.

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