Gold dollar

“ If gold should cease entirely to be used as a medium of exchange, or in bank or government reserves, if the gold dollar should become a mere formula, so many grains of gold, without there being any coins made of it, still, so long as that number of grains had a definite, ascertainable value, commensurate with the value of some other commodity which could be used as a means of paying balances and redeeming representative money, the gold dollar could still serve as a measure and standard of values. ”

“ Money today has two great functions. It is a medium of exchange and it is a standard of value. Gold was chosen because it was a good medium, not because it was a good standard. And so, because our ancestors found a good medium of exchange, we now find ourselves saddled with a bad standard of value!
The problem before us is to retain gold as a good medium and yet to make it into a good standard; not to abandon the gold standard but to rectify it; not to rid ourselves of the gold dollar but to make it conform in purchasing power to the composite or goods-dollar. ”

“ We ourselves have changed the weight of our gold dollar twice; once in 1834, when the gold in the dollar was reduced 7%, and again in 1837, when it was increased one tenth of one per cent. If we can change the weight of a monetary unit once or twice a century, we can change it once or twice a month!
And if we circulate gold only through paper representatives redeemable only in gold bullion and discontinue gold coins, these periodical changes in the weight of the gold dollar can be made even more easily than the occasional changes which history records. ”

“ A gold dollar has intrinsic value, and is worth, 340actually, just as much in England or France as it is here; and yet you attempt, when there, to pay your grocer or milliner with an American gold dollar, and they refuse to take it; so you have to take it to a broker, and suffer him to pocket a certain amount from you just for giving you another piece of gold or silver of the same value! ”

“ A silver dollar is a demand or a check calling for a gold dollar. The silver dollar, the United States Note, the National Bank Note all pass at their face value because they are convertible into gold, and are temporarily redeemed by Uncle Sam in gold, while gold is its own redeemer, and a ten dollar gold piece, or any other gold coin, is worth just as much, if hammered into a spike, or melted into a slug, as when it bears the stamp of Uncle Sam, certifying its quality and its quantity. ”

“ It is, however, a significant fact that every silver dollar that has been coined under that act is at a parity with gold, and will to-day buy as much of all the objects of human desire as will the gold dollar. ”

“ Thus a lowered gold price, or raised dollar weight, can reduce any stock of gold, however large, into a small number of dollars simply by enlarging each dollar; while, contrariwise, a raised gold price, or lowered dollar weight, can multiply any stock of gold, however small, into an ample supply simply by breaking it up into a larger number. It is like multiplying the loaves and fishes,—except that there is nothing miraculous about it, since small dollars will feed our monetary needs as well as larger dollars, provided they buy as much. ”

“ We do not believe that the gold dollar would go to a premium, because it could not find a better coinage ratio elsewhere, and because it could be put to no purpose for which a silver dollar would not be as good. ”

“ According to the admissions of the royal commission of England, the gold dollar of to-day is to the producers of this country, measured by their products, already at a premium of between 30 and 40 per cent. over the gold dollar of 1873. The advocates of the gold standard have no sympathy with our farmers and manufacturers who have to pay, in commodities, a premium of 30 to 40 per cent. on gold, to meet their engagements, but express extreme anxiety at the bare possibility that a few importers might have to pay even a small premium in any form. ”

“ By all means, then, let us keep the metal gold for the good attributes it has—portability, durability, divisibility, salability—but let us correct its instability, so that one dollar of it will at all times buy approximately that composite basketful of goods. Under the plan proposed only the gold dollar, duly corrected, is to be actually handled. The goods-dollar is merely a fiction in terms of which we may statistically test and correct the gold dollar. ”

“ That depends on men's judgments, and not on edicts at all. No law of the United States can add directly an appreciable fraction to the value of a gold dollar. The law makes it consist of 254⁄5 grains troy of gold 9⁄10 fine, the mint so stamps and attests it, and thereafter it takes its own chance as to value. ”

“ If gold began to leave us and prices to fall, gold dollars would be lightened, their numbers would be thereby kept from decreasing, despite the decrease in the physical amount of gold, and the price level kept from falling. ”

“ And as to fixing a price, as soon as the Government stops holding up the silver dollar to the gold standard, as it would with Mr. Bryan's election, the silver dollar, measured by its purchasing power, will be worth not a cent more than the market value of the silver contained in it. If the market value of that quantity is 50 cents in gold, and you present at the mint 50 cents worth of bullion, you get back, not a gold dollar, but a silver dollar worth just 50 cents in gold. You might, instead of taking your bullion to the mint, sell it in the market for just the same amount of money. ”

“ It seems this ratio undervalued silver, that is to say, the gold dollar was still worth 100 cents, but the silver dollar was worth from 102 to 103 cents. Gold at once became the hard money circulating medium in this country, silver the higher priced money, was entirely retired by the money changers, bullion dealers and silversmiths. This is another illustration where the cheaper money drove out of circulation the higher priced money. ”

“ However great may be the disturbing effect of some other cause on the scale of prices, that effect can always be neutralized by a suitable change in the weight of the gold dollar, provided, of course, that all other dollars are kept redeemable in gold dollars. ”

“ Now, while we are doing this immense business with the world abroad on the gold basis, must it not be evident to the dullest understanding that, although the last gold coin may have been banished from our domestic transactions, the value of the fiat dollar in comparison with gold will be quoted just as the greenback dollar was, and that this comparison will be a matter of daily concern and anxiety to every farmer, West and East, the price of whose products depends upon the foreign market? ”

“ Which is the most valuable, a dollar's worth of gold or a dollar's worth of anything else? you might also feel that I had insulted your intelligence. Yet the belief that a dollar's worth of gold is more valuable than a dollar's worth of anything else is widespread and persistent. It has molded the policy of great nations, dictated treaties, marched armies, launched fleets, fought battles, constructed and enforced elaborate and vexatious systems of taxation, and sent men by thousands to jail and to the gallows. ”

“ It coaxes gold to the mint, keeps it there, and does away permanently with bond issues. It provides for the retirement of the greenbacks, supplies their place with currency equally sound but less hazardous, and insures the absolute parity of every dollar in circulation with every other, and with gold. In fine, as every true principle must, and as only a true principle can, it answers every condition of the problem to which it applies, and commends itself as the best, if not the only, way out of our financial embarrassments. ”

“ To imagine any time or place when it is not is difficult. But to-day an American twenty-dollar bill gives you a higher rate of exchange than an American gold double-eagle. A thousand dollars in bills in Paris is worth thirty dollars more to you than a thousand dollars in gold. And to carry it does not make you think you are concealing a forty-five Colt. The decrease in value is due to the fact that you cannot take gold out of the country. That is true of every country in Europe, and of any kind of gold. At the border it is taken from you and in exchange you must accept bills. ”

“ In this connection, fellow citizens, let me impress upon your minds the facts that you cannot go into any country on the face of the earth where its mints are open to free and unlimited coinage of silver and find a single gold coin circulating among the people, moreover, that the silver standard country does not exist where the United States gold dollar, the United States silver dollar, or the United States paper dollar will not purchase twice as much merchandise as any dollar which you can find circulating among its people. ”

“ At the same time we retain our traditional gold as the fundamental money and make no visible change in the money in use. The only essential departure from the system we now have is one quite invisible to all but a few miners, jewelers, exporters and importers, namely, varying, by a fixed rule, the price of gold from the present $20.67 an ounce. ”

“ It proves in the most conclusive way, the injury which will surely come when by present acts of coinage and of legal tender, our gold coin has been driven from the country, and our standard of value becomes a silver dollar of light weight and of uncertain value. ”

“ On this principle, if every dollar's worth of vendible property in the United States could be represented by a paper currency; and if the property could all be delivered on demand, in redemption of the paper, such a currency would not inflate the prices of property at all, relatively to gold. Gold would still stand at its true and natural value as a metal, or at its value in the markets of the world. And all the property represented by the paper, would simply be measured by the gold, and would stand at its true and natural value, relatively to the gold. ”

“ It is clear that this sameness of mint price as between the two countries really means nothing of economic consequence, for the reason that all prices of gold are in terms of gold. At bottom the basic fact is simply that exchange is at par when an ounce of gold in America will, in the exchange market, buy the right to an ounce of gold in England. ”

“ In Europe, the Napoleonic wars, and in America, the Civil War, seem to have left at least one indelible impression on the minds of business men—that what seems to be a rise in the price of gold bullion in terms of current irredeemable paper money is, in reality, rather a fall in the value of paper money; in short, that it is better to measure paper money in terms of gold than gold in terms of paper money. ”

“ Practically and commercially speaking, a dollar is not necessarily a specific thing, made of silver, or gold, or any other single metal, or substance. It is only such a quantum of market value as exists in a given piece of silver or gold. And it is the same quantum of value, whether it exist in gold, silver, houses, lands, cattle, horses, wool, cotton, wheat, iron, coal, or any other commodity that men desire for use, and buy and sell in the market. ”

“ Gold, still the standard of value and necessary in our dealings with other countries, will be at a premium over silver; banks which have substituted gold for the deposits of their customers may pay them with silver bought with such gold, thus making a handsome profit; rich speculators will sell their hoarded gold to their neighbors who need it to liquidate their foreign debts, at a ruinous premium over silver, and the laboring men and women of the land, most defenseless of all, will find that the dollar received for the wage of their toil has sadly shrunk in its purchasing power. ”

“ If the essential quality of redeemability given to the United States notes, bank bills, tokens, fractional coins and currency, maintained them at par, how much easier it would be to maintain the silver dollar, of intrinsic market value nearly equal to gold, at par with gold coin, by giving to it the like quality of redeemability. ”

“ Had gold been destroyed as primary money by the same nations, and silver made the standard, we could have had gold in the form of token money to-day, worth, say, fifty cents on the dollar as measured in silver. ”

“ A country which is just now going through an operation involving its very existence will hardly be seriously affected by taking this fictitious value out of the gold coin and establishing once and for all a sound currency that will be good for a hundred cents on the dollar—no more, no less—the world over. ”

“ She as a Nation and her individual traders have always paid 100 cents gold to each dollar and her commercial community has successfully negatived any attempt on the part of her Governments to depart from the strictly gold basis of her monetary system. ”

“ We have in the United States about six hundred million dollars in gold. Every dollar would instantly go out of circulation. Why? No man will use the best money when he can use cheaper. Remember that. No carpenter will use mahogany when his contract allows pine. Gold will go out of circulation, and what next would happen? All the greenbacks would fall to fifty cents on the dollar. The only reason they are worth a dollar now is because the Government has agreed to pay them in gold. When you come to a silver basis they fall to fifty cents. ”

“ But the only test of depreciation generally recognized was the depreciation of paper money relatively to gold. The idea that gold itself could depreciate was conspicuous by its absence. The result was that there was little thought and less effort to keep gold at par with commodities. There were, however, economists in England and the United States and a few business men who did their best to point out the absurdity of considering money stable simply because there was no open premium on gold. ”