Gold standard

“ 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. ”

“ Now our gold standard men are in the position of those who first refuse to look at anything beyond the two things, gold and silver, to see what has happened, and who, when it is finally demonstrated that all other things retain their former relations to silver, still persist that the law which makes gold an unchanging standard of measure is more immutable than that which holds the stars in their courses. ”

“ Have gentlemen considered the effect of a single gold standard universally adopted? Let us not deceive ourselves with the hope that we can discard silver for gold, and that other nations will take it up and keep it as a part of the world's currency. When all the silver available for coinage could gain admission to some mints and all the gold available for coinage would find a place for mintage, and some nation like France maintained the parity by means of bimetallism it was of comparatively little importance whether a particular nation used silver, or gold, or both. ”

“ You are aware that the gold standard has been the ruin of the States which adopted it, for it has not been able to satisfy the demands for money, the more so that we have removed gold from circulation as far as possible. ”

“ Gold is dug out of the earth, and, in close proximity to it, chrysocolla, a substance which, that it may appear all the more precious, still retains the name which it has borrowed from gold. It was not enough for us to have discovered one bane for the human race, but we must set a value too upon the very humors of gold.
Alas for the prodigal inventions of man! in how many ways have we augmented the value of things! In addition to the standard value of these metals, the art of painting lends its aid, and we have rendered gold and silver still more costly by the art of chasing them. ”

“ This simple analysis proves beyond all cavil the arbitrariness of the gold standard of value.
The credit of a country increases or diminishes without any regard whatever to its gold producing or paying capacity. It is governed by its capacity for the general production of all kinds of wealth over and above its average consumption. It is just the same with a country as it is with an individual; the individual, to become wealthy and to have a good credit, must not necessarily ever have any gold; but he must be able to produce or acquire more than he consumes by his general expenses. ”

“ Our gold standard is not the cause of our commercial prosperity, but the consequence of that prosperity. It is quite evident that we must prepare ourselves for great convulsions in the money market, not occasioned by speculation or any of the old causes which have been alleged, but by a new cause with which we are not sufficiently acquainted. ”

“ The money lenders in the United States, who own substantially all of our money, have a selfish interest in maintaining the gold standard. They, too, will not yield. They believe that if the gold standard can survive for a few years longer, the people will get used to it—get used to their poverty—and quietly submit. ”

“ To-day, I am a bimetallist, an ardent and devoted one, in the sense that I desire to see both gold and silver circulating side by side as money, and in the sense that we can have a greater per capita of money in this country by using both gold and silver as currency, than we possibly could by driving gold out of circulation, but fellow citizens, I disbelieve utterly in the possibility of a double standard. ”

“ So determined are the advocates of the single gold standard in defending the wisdom of its maintenance that facts whose existence would at ordinary times be readily admitted, are, during a discussion of the money question, pointedly denied. For example, within the past few weeks we have seen in various eastern newspaper contributions from prominent writers taking direct issue with the advocates of silver as to the prevalence of general distress throughout the country. ”

“ Thus does an eminent English monometallist denounce the idea of a universal gold standard and foretell its consequences. But we are not dependent for authority upon foreign advocates of a gold standard. ”

“ With population and consequent demand rapidly increasing how do the advocates of the gold standard expect to increase the money volume of the country in this proportion, while the yield of gold, instead of increasing in proportion to demand, is every day becoming less and less capable of meeting the requirements of the arts alone? ”

“ We have fixed a gold standard, because gold is sufficiently rare, and because it allows itself to be coined into a portable form. I am aware that there are economists who say that the world could be run on a pure credit basis, with no metal currency at the back of it ”

“ Even if our prices remain as they are and do not increase, gold will eventually leave the country if it continue to increase in value as it has been increasing during the past fifteen years. We have been enabled to maintain the gold standard here for the past twelve years notwithstanding a considerable addition of money other than gold to our currency, but we have been able to do so only because other countries have been using an equal or greater amount of money other than gold. ”

“ The less developed countries adhere to the silver standard. Many which nominally sustain both have, by some legal restriction in the coinage of silver, become practical supporters of the gold standard. ”

“ We are unalterably opposed to the single gold standard, and demand the immediate return to the constitutional standard of gold and silver, by the restoration by this Government, independently of any foreign power, of the unrestricted coinage of both gold and silver into standard money at the ratio of sixteen to one, and upon terms of exact equality, as they existed prior to 1873 ”

“ We have been called cranks and lunatics and idiots because we have warned our fellow-men against the inevitable and intolerable consequences which would follow the adoption of a gold standard by all the world. But who, I ask, can be silent in the presence of such impending calamities? The United States, England, France, and Germany own today about $2,600,000,000 of the world's supply of gold coin, or about five-sevenths of the total amount, and yet these four nations contain but a small fraction of the inhabitants of the gIobe. ”

“ Must think of the folly of the United States, when they were a debtor nation, in adopting a gold standard. They knew nothing about currency matters; they did not know it was going to increase their debt enormously.”
Paulus (Roman jurist, third century) : “Money circulates with a power which is derived, not from the substance, but from the quantity.”
Blackstone (vol. I., page 2761) : “As the quantity of precious metals increases they will sink in value and become less precious. If any accident were to diminish the quantity of gold and silver they would proportionately rise.” ”

“ Congress, in 1853, adopted another expedient to secure the value of both metals as money. By this expedient gold is the standard and silver the subsidiary coin, containing confessedly silver of less value in the market than the gold coin, but maintained at the parity of gold coin by the Government.
But it is said that those of us who demand the gold standard, or paper money always equal to gold, are the representatives of capital, money-changers, bondholders, Shylocks, who want to grind and oppress the people. ”

“ The United States, and nearly all the commercial nations, have adopted this standard, and reduced the use of silver to a mere token coinage of less intrinsic value than gold, but maintained at par with gold by the right to be converted into gold at the will of the holder. So that for all practical purposes we may regard gold as the only true standard, the true money of the world, by which the value of all property, of all productions, of all credits, and of every medium of exchange, and especially of all paper money, is tested. ”

“ The inherent simplicity, and, so to speak, “naturalness,” of the single standard is best realized by embodying it in gold, which is universally desired, of high cost and yet found in sufficient amount to discharge the money work of the standard. The verdict of history is appealed to as confirming the theoretic presumption, for gold has been gaining ground from century to century. ”

“ Were gold a thousand times more valuable than it is held to be, it would not even then be able to represent all other values. Therefore, gold is a false standard of value, a false representative of wealth.
Many people think and speak as if gold would be of no use to this country if it were to come into disuse as money; that we should entirely lose it as wealth; the very reverse is really true, since we should have just the same quantity of gold that we now have, to be used for the same purposes for which it is now required, to wit: to export to other countries in exchange for imports. ”

“ The quality of a universal standard claimed for gold has been set up by the classes which, like that priesthood, had interests to be served by the superstition. All things else may be subjected to the test of reason and argument, but the slightest approach to a scrutiny of the claims of gold as a much-vaunted universal standard of valuation has been repelled by interested casuists and sophists who constitute the sacred guard of the temple of the idol. ”

“ You may say that the money power cannot get hold of the silver, because the silver, in the shape of coin or of paper based upon it, will be in general use as money. But is not, under the gold standard, the gold, in the shape of coin or paper based upon it, in the same general use as money? And if for this reason silver cannot be cornered, will it not for the same reason be impossible to corner gold? ”

“ Neither the annual supply of gold nor the total amount used as money is the principal64 factor in determining its value. It cannot be doubted that if all the nations now using the gold system were to abandon it, the value of the metal would be but a fraction of its present value, and on the other hand, if all the nations now using silver and paper, in whole or in part, as money, were to change to the gold standard, its value would be increased to many fold what it is now. ”

“ Those who advocate the return to a gold standard do not always appreciate along what different lines our actual practice has been drifting. If we restore the gold standard, are we to return also to the pre-war conceptions of bank-rate, allowing the tides of gold to play what tricks they like with the internal price-level, and abandoning the attempt to moderate the disastrous influence of the credit-cycle on the stability of prices and employment? Or are we to continue and develop the experimental innovations of our present policy, ignoring the “bank ratio” ”

“ You know it is necessary to fix the relative value of gold and silver, and to keep to it, if both are used as money on equal terms.”
“And such fixed value does not always agree, I suppose, with its natural value. It may sometimes cost more to obtain gold, and sometimes silver; and then it is either impossible or injurious to make them keep the value originally fixed. Is this the reason?”
“This is the great objection to a double standard. If, from any circumstance, silver became more plentiful than it had been, a man would be anxious to pay his debts in silver. ”

“ Commercial transactions imperiously require a standard of value, and the commercial world, at a very early period in civilization, adopted gold and silver as the true standard for that purpose, and the standard originally adopted has ever since continued to be so regarded by universal consent to the present time. ”

“ If it is difficult now to secure gold, what will be the condition when the demand is increased by its adoption as the world's only primary money? We would simply put gold upon an auction block, with every nation as a bidder, and each ounce of the standard metal would be knocked down to the one offering the most of all other kinds of property. Every disturbance of finance in one country would communicate itself to every other, and in the misery which would follow it would be of little consolation to know that others were suffering as much as, or more than, we. ”

“ Why are gold and silver, and particularly gold, the standard money of the great part of the world to-day? The principles of social psychology which Carlile employs in explaining the historical development, are also important in explaining the present attitude of mankind toward gold and silver, and will serve, together with the general theory of social value, to answer the question as to the value which money receives from the employment of the money metal as a commodity. ”

“ I do not advocate the lending out in India of any part of this reserve, or of the Cash Balances, at the expense of the stability of the Gold Standard, or until adequate measures can be taken in other ways to ensure this. ”

“ Much inconvenience arises from using two metals as a standard of our money; and it has long been a disputed point whether gold or silver should by law be made the principal or sole standard of money. In favor of gold it may be said, that its greater value under a small bulk eminently qualifies for a standard in an opulent country. ”