and exchanges, and that the sphere of credit is constantly enlarging; that what the world needs is not more silver or more gold, but more calls for gold in the shape of bank notes, miscalled money, checks, bills of exchange, promissory notes, bonds, all payable in gold, and necessarily by increasing the demand for gold in redemption, increasing its value as compared with property and products.

I assume that all believe that an enlightened self-interest should govern nations, just as it does individuals, and that the interests of nations vary, that there is no fixed rule of policy that should govern all nations alike, and the first question we have to meet is this: Is it to the interest of the United States that gold should increase in value?

The nations of the world are divided into two classes-creditor nations and debtor nations. When I speak of creditor nations I do not mean that the government of such a nation occupies toward other nations or toward individuals the position of a creditor. I mean that the people of that nation in their relations with the people of other countries have the general relation of creditors. In this view England can be called a creditor nation, for almost all our enterprises and almost all the national governments of the world owe the people of England vast sums of money. So, also, the United States may be called a debtor nation. It is a debtor nation in two respects-the Government itself owes large sums of money upon bonds, and our various enterprises, both individual and corporate, owe still larger sums abroad. So that the United States is justly called the greatest debtor nation of the world.

Now, what is the interest of a creditor nation which has its money loaned out to other countries on time? It is to make money more scarce and more valuable, so that it may increase every day and month and year in its value, in its purchasing power, and in that way command more of the products and more of the commodities with which the people of the debtor nations for the most part pay their debts.

What is the interest of a debtor nation? Not that money shall depreciate in value, for any policy that would bring that about might be termed dishonest, but to keep the money stable in value, so that the debtor nation or debtor enterprises will not be compelled to surrender more of products and more of commodities in order to pay the interest and principal of debts.

These two classes of nations, then, are represented by England and the United States, and the question is whether the same monetary policy should govern both where their interests are so diverse.

CREDITOR NATIONS.

In reviewing the nations of the world, we find that there are very few creditor nations, and they are principally England, Germany, and France, for Belgium and Holland do not figure largely in international transactions. Look on the map and see how small a space those three creditor nations occupy as compared with the other countries of Europe, Asia, Africa, and America, all of which are debtor and producing nations. France is not a creditor nation in the same degree as the other countries are, because she concerns herself chiefly with domestic affairs and engages little in international enterprise. The two great creditor nations of the world are England and Germany. Through their manufactures and commerce their people have derived profit from the whole world. They have sent their ships to every sea, their agents into every country and clime, to sell their manufactured goods. From their profits

they have accumulated large sums of money, which they loan to enterprises of other nations upon bond and mortgage. There is hardly a people in the world that does not owe these two countries large sums of money. There is probably no people in the world that they owe money to. Whatever debt they owe is mainly held by their own people.

SCARCITY OF GOLD.

These people then have accumulated almost all the gold of the world, and gold is very limited in quantity. Four billion dollars of gold constitute the accumulations of the world. That seems a large sum, but let us reduce it to cubic dimensions. It is an uncontested and incontestable fact that all of the gold coin of the world, if melted into a solid mass, would make a cube of 22 feet; in other words would fill a space 22 feet long, 22 feet wide, and 22 feet high, a space little larger than the ordinary guest's chamber of one of our leading hotels.

Where is this gold located? We refer to the statistical report of our Mint Director, and we find that to-day two billions, one-half of the accumulated supply, is located in England, France, and Germany, and the other two billions is scattered over the rest of the world, but is tied to these countries by the strings of bond and mortgage, so that it can be withdrawn at any time by the action of the creditor nations through the sale of securities in the country that has issued them.

THE GOLD TRUST.

This is the age of trusts and combines. The prevailing idea is to control some product, limit its production, raise the price and make a profit. The scarcer the thing monopolized, the more efficient is the trust or combination. Throughout the ages nature has only yielded enough gold, in visible form to-day in the shape of money, to fill a cube of 22 feet. What more favorable subject could there be for a combine or trust than gold? And who would organize such a trust? The people who own the gold. And how would they make that combination effective? Not by limiting the production of gold, because that is limited enough, but by destroying the use of its only competitor, silver, which, throughout the ages, and until 1873, stood with gold as one of the acknowledged money metals. The production of money was to be limited by the destruction of the use of silver through legal enactment by denying it coinage and legal-tender quality. And this the United States, persuaded by some occult influence, proceeded to do in 1873. At that time specie payments were suspended, as they had been during the entire war, and there was no accumulated stock of either gold or silver in the country. Yet our country led the crusade of the debtor nations against silver; and, though Providence had exposed her richest silver treasures as a means with which to pay our great debt contracted during the war, this country, owning no gold, having no interest in the gold trust, but the greatest producer of silver in the world, the greatest debtor in the world, owing debts which it had obligated itself to pay in coin, either gold or silver, absolutely denied itself-at a time, too, when the silver in the silver dollar was worth 3 cents more than the gold in the gold dollar-the power to use its silver mines, and not only destroyed the legal-tender quality of the existing silver coin, but denied silver bullion admission to its mints, so that not an ounce of silver could be turned into legal-tender coin. We thus became the greatest customer in the world of the gold trust, and the result has been the accumulation of a foreign debt unequaled in the history of the world.

EFFECT OF LIMITING MONEY SUPPLY.

What is the effect when you diminish the money supply of the world? The old rule of supply and demand applies. If you diminish the supply while the demand remains the same, you increase the value of every unit of the thing supplied. Recollect that there is a universal demand for money. Money is not only a measure of value, but it is a medium of exchange, and it differs from all other standards in that particular. It is the thing itself that is exchanged for all other commodities, products, and properties.

When you measure a yard of silk with a yardstick, you never give a yardstick for the yard of silk. When you measure a bushel of potatoes in a bushel measure, you never give the bushel measure for the potatoes. Both are simply standards of measure. But the dollar is not only the standard of value, it is the thing itself that is exchanged for all other things, and it is the thing that everybody is seeking for as the universal solvent.

So a trust with reference to money involves not only the control of its value, but the value of every other thing in the world for which it is exchanged. Hence the effect of the limitation of quantity in money is to increase the value of every unit of that money and to diminish the value or price of everything for which it is exchanged.

And so, in 1873, we entered upon an era of low prices. It is true that the force of our original action was broken by the passage of the Bland Act and of the Sherman Act, both of which delayed the effects of monetary contraction by increasing the use of silver, and thus staying the appreciation of gold. But with the repeal of the Sherman Act in 1893 came the final blow, and since then we have been enjoying the gold standard in all its perfection; high gold, low prices; increased debts, diminished values of the products and property with which we pay debts.

POWER OF GOLD TRUST INCREASING.

Meanwhile the gold trust is extending the area of its power. The single gold standard gives to creditor nations the control of almost all the credits of the world, and they impose upon every country that deals with them the gold standard as the price and the consideration of loans. They have imposed it on Brazil and Chile recently. What will this mean if carried out to its ultimate result? Why, that every unit of gold will go up higher and higher, and every unit of property will go lower and lower. And when the process of liquidation comes, you will find the ultimate ownership of the gold and the ultimate ownership of most of the enterprises of the world in England and Germany. A general liquidation of that kind is, of course, well-nigh impossible, for the victims of the gold trust would break the bonds that bind them. But the contemplation of such possibilities illustrates the force and tendency of this gold movement.

INCREASED PRODUCTION OF GOLD.

But we are told that the production of gold is largely increasing, and that that will make up for the destruction of silver as money. It is true, it has increased, for everybody is searching for it. But the production is by no means commensurate with the wants of the world. More than half of the current gold production is absorbed in dentistry and the arts, and the remaining portion applicable for coinage will not

make up for the tremendous destruction in the value of silver caused by its disuse and the results occasioned by the dislocation in exchange between gold and silver standard countries.

The weak point in the contention of our adversaries is their assumption that the current production of gold goes into money. On the contrary, the most of it goes into ornamentation, the arts, and dentistry. It is true that gold has been increasing in production until it has now reached the large sum of $200,000,000 annually, but very little of this goes into coin. Most of it goes into other uses, and is hence as unavailable for money as are diamonds or pearls.

Over twenty years ago Senator Sherman calculated that the world's stock of gold coin was three billions and a half. The recent investigations of eminent statisticians, supplemented by the investigations of our own Mint Director, have established the fact that the present stock of gold coin in the world is only a little above four billions. In other words, in twenty years the total world's stock of gold coin has increased only five hundred millions, or about twenty-five millions a year, thus proving conclusively that the major part of the current production does not go into the shape of coin. Gold once used for ornamentation, in the arts, or in dentistry never goes back into coin, whilst millions of dollars of coin are melted and turned into these uses.

CREDIT VS. METALLIC MONEY.

Another weak point in the contention of our adversaries is their assumption that the use of credit has in a large measure driven out the use of metallic money. No greater mistake can be made. It is true that the use of credits and of credit devices has largely expanded, but this only proves that credit and credit devices are used more, not that metallic money is used less.

The form of the use has somewhat changed. Warehouse receipts for money in the shape of checks and drafts and bills of exchange are now used in effecting transfers, instead of actual coin, but it must be recollected that these warehouse receipts are calls for actual coin, and you might as well say that the use of warehouse receipts for wheat does away with the use of the wheat as to say that the use of checks and drafts does away with the use of money. The form of the use has also varied in this, that instead of physically using coin in the exchanges it is now largely used as the basis of credit, and is held in our banking institutions as reserves. For instance, it is estimated that the total amount of deposits in all the banks and trust companies of this country amount to $5,000,000,000. These deposits are in the shape of gold demands, which the bank must respond to at any moment. To meet them, the banks must maintain reserves varying in amount according to the conservatism of the particular bank. Such reserves ought to be at least 25 per cent of the deposits, and assuming that all legal-tender paper honey, such as greenbacks, is retired, the metallic reserves, of the banks alone, outside of the money in the pockets of the people should amount to about $1,250,000,000.

This alone would require more metallic money than exists to-day in this country in the shape of both gold and silver, without taking into consideration the large amount of money that would be required for the pocket money of the people. The average man who reads of these large reserves in the bank vaults regards them as so much unutilized money awaiting investment, oblivious of the fact that they stand there as the representative of, and the security for, the deposits, aggregating

many times their amount already loaned out by the banks on time and demand paper. It is safe to say that the expanding system of credit requires more coin than the old system of ready money, for an expanding credit requires a constantly increasing reserve of coin.

OUR NATIONAL MONEY SYSTEM.

It is estimated that we have in this country about sixteen hundred million dollars, of which about one-third is gold, one-third silver, represented partly by silver certificates and Sherman notes, and one-third paper money, represented by national-bank notes and greenbacks. We have all of us come to the conclusion that some monetary legislation is required.

I do not propose to enter into the discussion of any particular bill, but it is safe to say that the legislation presented before this committee involves, in the main, that the Government should go out of the banking business, or, in other words, that it should retire its greenbacks. They are said to constitute the endless chain by means of which gold is drawn out of the Treasury of the United States, and it is insisted that so long as this system continues bond issues will also continue. This involves the determination at the very outset as to whether all the Government demand notes, as greenbacks are called, shall be redeemed in gold alone, and whether or not their retirement will put an end to the drain of the Treasury.

We find upon inquiry that it will not, for, according to the construction put by the Treasury Department, both under Mr. Harrison's and Mr. Cleveland's Administrations, upon the law imposing upon the Government the duty of maintaining the parity between the two metals, the redemption of the Sherman notes is required in gold, and after they are retired we are told that the silver certificates must be redeemed in gold, and after they are retired we are also told that the silver coin itself shall be redeemed in gold. It is not necessary to inquire into the methods by which gold redemption is to be made of all the various forms of alleged credit money, including silver. It is sufficient to say that under the construction placed upon the parity clause by both the Democratic and Republican Administrations, the Government can never be taken out of the banking business until $1,000,000,000 of money, represented by greenbacks, Treasury notes, and silver certificates, and silver itself, is redeemed in gold.

The pursuit of this policy, therefore, necessarily eliminates silver entirely from our currency, for if silver is once redeemed in gold, it necessarily follows that it is not used as primary money in any sense. It must be disposed of, and we will of course realize the grave results following the placing of over $500,000,000 of silver as a commodity upon the world's market. If the silver is not to be used as money of redemption it is useless for any purposes, and might as well be gotten rid of. It makes no difference whether the redemption of these various forms of money is made by the Government itself, or current redemption is made by banks as the result of some arrangement by which they are allowed to issue paper money. The result will be the same, silver will be eliminated from the currency of the country.

We will assume, however, that by some process greenbacks, Treasury notes, and silver certificates are retired, that the banks of the country are allowed to issue one billion of paper money in their place. The question then arises as to the redemption of this paper money. I do not understand that anyone contends that they shall be allowed to