the domestic production of silver-standard countries. Such a country as Mexico, having been accustomed to buy all manufactured products from England and Germany, finds herself obliged to turn her silver into gold for that purpose, and she gets only one-half as much for its silver as it used to, and the result is the Mexicans commenced to manufacture for themselves, and it has now become the settled policy of Mexico-so announced in its leading paper-to cut off importations from gold-standard countries and stimulate, as far as they can, the manufacture of all products for which they have been obliged to rely upon gold-standard countries heretofore.

By striking down silver we have given silver-standard countries the advantage of cheaper production, which has already disastrously affected our farm products and is about to affect our manufactured products. Our country is on the down grade. Japan and Mexico are on the up grade.

DISTRESS AS A TEACHER.

There is one thing you will observe, and that is that distress is the greatest teacher of political economy in the world. It was the distress of the mining States that first brought the attention of their public men to the money question. They were ignorant to begin with, but they commenced to study it simply because they found that the price of silver bullion was declining and that there was a relation between the value of the ounce of silver bullion and the money question, and as they progressed in their study they found that the volume of primary money had a relation to all values, and so gradually their public men became the leaders of agitation on this subject. Then you will find the wheat growers' attention was attracted to it, because they found there was a certain relation between the value of the bushel of wheat and the ounce of silver, and so they began to study the question; and then the cotton growers began to study this question.

Now, what other class has studied this question? The manufacturing class of England and Germany. The most prominent bimetallists in those countries belong to the manufacturing class, and almost the entire agitation in those countries is being conducted by it.

Of course, the land owning class of those countries had joined in that agitation. They commenced it, probably, but it has reached its intensity through the agitation of the manufacturing class, and what caused them to agitate it was simply distress and suffering. They had been controlling the markets in the Orient and in silver-standard countries generally. They had been manufacturing their goods and sending them out there for sale, and had absolutely monopolized those markets, and they found that the premium upon gold caused such countries as India, China, Japan, and Mexico to gradually establish manufacturing institutions of their own, and that they were gradually losing their trade; and you will find in the proceedings of the Berlin silver commis sion, a commission recently appointed by the Emperor for the purpose of investigating this question, their inquiry entirely turned upon the effect of the depreciation of silver upon their industrial enterprises, and not to the effect of the disuse of silver in causing a contraction of the currency. You will find almost the entire discussion was upon the effect of the fall in the price of silver upon their manufacturing industries, and there were accounts there of entire manufacturing districts in Germany that had suffered from this. They had been accustomed to send their products to the Orient, and these products, instead of being absorbed in the Orient, were thrown back on Germany, thus

entering into competition with the products which they have been accustomed to manufacture there for domestic use and thus lowering the price.

In Manchester, which is the center of bimetallic agitation, we find the greatest complaints upon the part of all manufacturers who have been engaged in trade with the oriental and silver-standard countries, though of late the loss of the oriental trade has been made up to them by the increased markets in the United States, caused by the Wilson bill. Now, if this competition is a dangerous competition to the cheap labor of Europe, the cheap labor of Germany, and the cheap labor of England, where wages are only half the wages which prevail in this country, how much more dangerous will that competition be with this country? We have not felt it as yet because we have not been exporting to those countries in any large degree. We have contented ourselves with merely manufacturing for our domestic markets, but what tariff wall can we put up in this country which will keep away the product of labor about one third as cheap-perhaps one-fourth as cheap-as European labor? We have a tariff wall now adjusted to measurably protect us against European competition. That tariff wall has recently been lowered, and what is the result? The European products are coming in, slipping over the wall into this country and taking away the business of our local industries. Now, if their products can slip over the existing wall, how much easier would it be for the products of China, Japan, and Mexico, and other silver-standard countries to slip over this wall?

THE DANGER IMMEDIATE.

This danger is now upon us. It has been a matter of constant discussion of late on the Pacific Coast. There is not a newspaper there that is not alive to the Japanese invasion and to its effect upon American manufacturing-an effect which will be mainly felt in the Eastern States, for they do the manufacturing for the West. We of the Pacific Coast have had previous experiences of Chinese competition on our own soil. We found they monopolized every industry they attacked. They were intelligent; they were good workmen; their expenses of living were almost nothing; there was not a single industry to which they turned their attention that they did not monopolize, and the exclusion act was simply an act of self-defense to save our civilization against this Chinese invasion; and now we find the products of the cheap labor which we sought to exclude are slipping over this tariff wall and coming into this country. I do not think our people realize the extent to which their manufactured goods are now being used in this country. Japanese manufacturing agencies are established; they sell rugs, matting, clocks, watches, and numerous other products, and undersell American products of the same grade.

The manufacturers of this country will soon wake up as to the force and effect of this competition, and some realize it already.

Now, the reports of consuls of England and Germany in the Orient, the reports of travelers who have been in these countries, testify to the growing terrors of this oriental invasion, and the question is whether we shall wait until we feel its full effects before we take action; for recollect that as long as the low price of silver continues to have the effect of an export bounty, they will gradually increase their manufac tories in those countries. But if the price of silver should go back to $1.29 per ounce, I think it fair to assume that the manufacturing development in those countries would be checked; but if silver remains at

a low price, the manufactories of those countries will certainly increase, and then when you seek to check their competition, you will find it too late, because by that time they will have organized their plants and have more skilled labor instructed in these various vocations in active competition with you, and it will be more difficult to meet them than in the present condition, when they have not got their plants fully and thoroughly organized.

If you attempt to meet this oriental invasion by the tariff, you will have to make it practically prohibitory, and this the country will not assent to. It is politically impossible, for the West and South, suffer. ing from the agricultural competition of silver countries, will not assent to a measure which will protect the factories alone.

The best protective measure, both to the farm and factory, would be a free silver bill which would double the gold price of silver and so double the gold cost of labor of silver countries. The premium in gold would not then, as now, stimulate their production of farm and manufactured products, because the parity would be restored.

Recollect, that in order to restore the price of silver and do away with the present injurious dislocation between silver and gold, we only have to provide for the absorption of the current production. The accumulated stock of silver is all in actual use as coin and is not in the shape of bullion, except in the United States, and here it is constructively coined as silver certificates, and Treasury notes have been issued against it and are in circulation.

As to the accumulated stock of coin in the various countries, none of it would come to our mints. It is in actual use as coin, and no advantage would be gained by simply changing the stamp.

EXAGGERATIONS REGARDING SILVER.

What, then, is the current production of the mines, and what is likely to be the production if the price of silver rises to its old price of $1.29 per ounce? The exaggerations concerning silver are marvelous. One would think from the newspaper accounts that every storehouse and vault was bursting with silver. As a matter of fact-and you can refer to the Mint Director as authority-all the silver coin in the world amounts to a little less than $4,000,000,000, and all this coin can be put into a cube of 66 feet. Think of it. The accumulation of the ages will fill only this space, and yet exaggerated alarm is experienced concerning the production of the future. There never has been enough of both gold and silver to satisfy the demands of the world for money, and the Mint Director's report shows that nearly one-quarter of the money supply of the world is uncovered paper money-that is to say, Government paper or bank paper not actually backed by coin. This proves that there never has been enough metallic money produced to supply the world. The entire current production is absolutely absorbed by existing demands. The demand of this country would be a new demand and would raise the value of silver to its old relation with gold, and then all talk of a 50-cent dollar would vanish, for we would have a gold dollar worth 100 cents in silver and a silver dollar worth 100 cents in gold.

NATIONAL ACTION.

The people of the United States can not wait for the slow processes of international arrangement, even with debtor nations. This country has ample capacity in connection with the existing use of silver to

restore its value by free coinage. We have a large country to build up. We are enterprising and need more money than any other nation. We can not increase our stock of gold, for the supply is too limited, and the whole world is scrambling for it. We have not enough metallic money, for the Mint Director's report shows that we have about $500,000,000 of uncovered paper money, consisting of greenbacks and national-bank notes. We are the only debtor nation which has been able to keep its uncovered paper money on a par with gold, and we have only been able to do it by issuing bonds, which in reality represent the gold premium. A clamor has been raised for the retirement of greenbacks, but if they are retired the burden of gold redemption would fall on the national banks, and they would have the same struggle to keep their bank paper on a par with gold as the Government has had with greenbacks.

Gold redemption will be demanded for export and gold will be required for export, so long as the depressed price of silver gives silverstandard countries the advantage over us in the markets of the world in the sale of farm products. Gold exports will not cease so long as the low price of silver and the systematic low price of our farm products continue, and the people will be watching the gold reserve of the banks as they now watch the gold reserve of the Treasury. Diminished reserves will alarm depositors and the demands of depositors, added to the demands of note holders, will create a monetary stringency and panic surpassing anything we have ever experienced.

It is clear, therefore, if we maintain our greenback system and redemption in gold, we will have to issue more bonds or else we will have to retire our greenbacks and issue other money in their places. The question is, whether this money shall be bank paper redeemable in gold, or metallic money coined from our silver mines. The issue of bank notes would increase the call for gold and the strain on the gold reserves. It would have a tendency to increase the value of gold, and certainly would not increase the value of silver, while the coinage of silver would increase its use and consequently increase its value.

If, then, we should conclude it would be wiser to increase the use and value of silver by coining it rather than to increase the demand for aud the value of gold by issuing call demands for gold in the shape of either Government or bank paper, we would have to coin about $100,000,000 per annum for five years before we would have retired the existing uncovered paper money of the country in the shape of greenbacks and national bank notes. If we would wish also to maintain our present per capita circulation, it would be necessary, inasmuch as our population has increased at a rate of about three millions per annum, to coin fifty or or sixty millions additional money for that purpose. If we should conclude, as I think it wise, to increase our per capita to the reasonable amount of $30 per head, we would require the coinage of $70,000,000 per annum for the next five years. In other words, we could in this country, without increasing the per capita of circulation to more than $30 per head, create an additional demand for new silver of nearly $200,000,000, which is equal to the entire existing supply, and that supply is now absorbed in current uses. Who would contend that such a largely increased demand would not restore the old parity, and thus do away with the only objection that is urged against the action of this country singly and alone?

I maintain, therefore, that the free coinage of silver at the rate of 16 to 1 by this country is practicable, that it will restore the old relative value of silver and gold, release this country from its dependence on foreign countries, impair the efficiency of the cheap labor of silver

standard countries in competition with our own, restore the value of our agricultural products, with which we pay our debts abroad, and save this country from a manufacturing competition that will prove destructive.

But I have dwelt too long on the silver question and will conclude by taking up again the proposed issues of bank currency although in doing so I am in some danger of reiterating views already expressed.

MONEY VOLUME OF UNITED STATES.

We have in this country about $1,600,000,000 of money, of which about one-third is gold, one-third silver-represented mainly by silver certificates under the Bland Act, and Treasury notes under the Sherman Act and one-third credit or paper money, consisting of about $346,000,000 of greenbacks and $200,000,000 of national-bank notes, all of this being uncovered by actual coin save the $100,000,000 gold reserve for the redemption of the greenbacks.

SILVER IS NOW CREDIT MONEY.

Under this Administration the coinage of new silver has been stopped and the silver which has already accumulated, instead of being used as primary money, seems to be regarded simply as the material upon which a promise to pay gold is stamped; for we are told that the Sherman notes must be redeemed, at the option of the holder, in gold alone, and we are also told that the pledge of the Government to maintain the parity between the metals will compel it to redeem the silver certificates themselves in gold.

So that we have nearly $500,000,000 of silver, mainly in coin but partly in bullion, in the vaults of the Treasury as useless as so much pig iron so far as its utilization as primary money is concerned.

GREENBACKS.

The greenbacks, though redeemable under the law in either gold or silver, are made, by the policy of the Treasury Department, redeemable only in gold; and the result is that we have the endless chain which constantly draws gold out of the Treasury in redemption of greenbacks, and, as the law compels the reissue of the greenbacks by the Government, we have the endless iteration of gold bond issues to maintain the reserve.

The Administration, having succeeded in forcing the stoppage of silver coinage, is now bent upon the retirement of the greenbacks; and the question is, having practically eliminated both Government paper and silver from our currency, what substitute shall we put in their place? The substitute suggested is the issuance of national-bank currencynot a legal tender, but the mere promissory note of the bank, redeemable, on demand, in gold. The very suggestion of this change implies that there is not enough gold in the world to do its business, for we have here the practical suggestion that as both silver and Government paper are eliminated, their places shall be taken by national bank currency of unlimited extent; the claim being made that it will be an elastic currency, it will expand to meet the requirements of the country, and can be issued in abundance when the country needs money, and be retired when the country does not need it.

This movement will doubtless be followed by a movement for the