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tural and manufacturing classes are still forced to exercise extreme economy, and with this the case, no very great expansion of business can be immediately expected. It is also notable that the slowly increasing demand for manufactured goods runs to low grade articles, while the better grades of goods are left upon the dealers' shelves.

The passage of the Bland seigniorage bill by the house and senate, disturbed the business world only slightly with apprehensions of reviving monetary uncertainty; and the president's veto has deprived it of further immediate importance. No thought of any other course on the part of the president, whose attitude on the money question is firm and unambiguous, was seriously entertained in financial circles.

THE SILVER SEIGNIORAGE BILL.

THE silver question, which had dropped temporarily into the background after the repeal of the Sherman law of 1890 on November 1, 1893, was revived early in February of the present year, and thereafter occupied a large share of public attention until the end of March. On February 7, Mr. Bland reported from the coinage committee of the house of representatives a bill providing for the coinage of what is known as the silver seigniorage in the treasury. It was passed by the house on March 1; by the senate, on March 15; but was vetoed by President Cleveland on March 29. During its passage through the two branches of the legislature, and during the period which elapsed before the intention of the president regarding it was announced, it had a noticeable, but limited, disturbing effect on business.

The following is the text of the bill:

SECTION 1. That the secretary of the treasury shall immediately cause to be coined as fast as possible the silver bullion held in the treasury, purchased under the act of July 14, 1890, entitled "An act directing the purchase of silver bullion and the issuing of treasury notes thereon, and for other purposes," to the amount of the gain or seigniorage of such bullion, to wit: the sum of $55,156,681; and such coin of the silver certificates issued thereon shall be used in the payment of public expenditures, and the secretary of the treasury may, in his discretion, if the needs of the treasury demand it, issue silver certificates in excess of such coinage; provided, that said excess shall not exceed the amount of the seigniorage as herein authorized to be coined.

SECTION 2. After the coinage provided for in the first section of this act, the remainder of the silver bullion purchased in pursuance of said act of July 14, 1890, shall be coined into legal tender standard silver dollars as fast as possible, and the coin shall be held in the treasury for the redemption of the treasury notes issued in the purchase of said bullion; that as fast as the bullion shall be coined for the redemption of said notes, the notes shall not be reissued, but shall be cancelled and destroyed in amounts equal to the coin held at any time in the treasury derived from the coinage herein provided for, and sil

HON. GEORGE F. HOAR OF MASSACHUSETTS, REPUBLICAN UNITED STATES SENATOR.

ver certificates shall be issued on such coin in the manner now provided by law; provided, that this act shall not be construed to change existing law relating to the legal tender character or mode of redemption of the treasury notes issued under said act of July 14, 1890. That a sufficient sum of money is hereby appropriated to carry into effect the provisions of this act.

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Under the act of 1890, the treasury has purchased certain silver bullion, which, by express provision of that law, it is required to hold against the treasury notes issued. in its purchase. The amount of notes issued exactly represented the market value of the bullion when purchased. Were this silver worth $1.29 an ounce, every standard silver dollar made from it would be at par with gold. Silver has, however, greatly depreciated in value of late years, so that the amount of notes actually issued against the bullion is less by about $55,000,000 than the number of standard dollars which could be coined from it. difference is an apparent gain to the United States; and this is the so-called seigniorage. Mr. Bland's bill proposed to increase the volume of our paper currency at once to the full number of the notes which could be issued against the bullion if its market value rose to $1.29

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an ounce, placing the standard dollar at par with gold.. It should be stated that the "gain above referred to is only apparent. Were the standard dollar taken at par in all the markets of the world, the gain might be real; but, without the assurance that for every silver dollar a gold dollar may be had on demand, the value of the silver dollar in the world's markets would drop to the market value of the silver it contains. And thus, whatever apparent gain there may be in being able to pass off as a dollar what is worth only a fraction of a dollar, that gain is exactly counterbalanced by the liability to be called on for payment of the difference in gold on demand. When a commodity is purchased, and, while yet in the hands of the buyer, greatly depreciates in value, the transaction as a whole is usually looked upon as involving, not a gain, but a loss. The only possible real gain will come when the commodity so rises in value that it can be sold for more than it cost.

On March 1, the seigniorage bill passed the house of representatives by a vote of 168 to 129. Seventy-nine Republicans voted against the bill, and 19 for it. Forty-nine Democrats and no Populists voted against it. All the Democrats from the farther South voted for it, except Mever of Louisiana, and all but five of those from the border states. The bill was passed by the Western and Southern members, nearly every Republican who voted for it being from the West, and nearly every Democrat from the West voting for it, the most conspicuous exceptions being six Democratic congressmen from Wisconsin, who voted against it.

In the senate on March 7, the advocates of the bill, by sharp parliamentary tactics, succeeded in rushing it through all the preliminary stages, thus depriving the Republican members of the possibility of amending it. This amounted, too, to a temporary side-tracking of the Wilson tariff bill. In fact, it was only through Senator Hoar's injection of a motion to adjourn, that a final vote on the passage of the seigniorage bill was not taken on that occasion.

In the debate which followed, noteworthy speeches. against the bill were made by Senators Sherman, Lodge, Allison, and others; but, on the ground that the proposed addition to the paper currency was but slight, and on the further ground of party and political expediency, the Silver Democrats succeeded in drawing to their side from those who voted against continued silver purchases last

fall, a sufficient number of votes to secure the passage of the seigniorage bill on March 15, by 44 yeas to 31 nays. Counting the pairs, 48 voted for the bill, and 35 against it. Of the 48 in the affirmative, 33 were cast by Democrats, 11 by Republicans, and 4 by Populists. Of the 35 in the negative, 11 were contributed by Democrats, and 24 by Republicans. With the exception of Delaware, Maryland, and Louisiana, no Southern state cast a vote against the bill in the senate.

During the period of uncertainty which followed, while the president's attitude regarding the bill was open only to conjecture, considerable opposition was organized against it in the banking and merchant circles of the country. The opponents of the bill declared that in principle it was a return to the policy abrogated at the time of the repeal of the Sherman law last fall; that its passage would again cause the hoarding and exportation of gold, the threat of reduction to a depreciated currency, and the return of American securities from Europe; and that it would revive the destructive strain on credit out of which the country had but lately emerged. On the other hand, it was claimed that so small a sum would not affect our credit, and that the coinage of the silver now in the vaults would save the government from the necessity of issuing bonds to meet the treasury deficit.

Vetoed by the President.-On March 29 the hopes of the silver men were dashed by the receipt, in the house of representatives, of a message from President Cleveland, vetoing the bill, and stating in full his reasons for such action. In a word, the president's objections to the seigniorage bill are three in number:-1. That salutary results have already followed the repeal of the Sherman silver purchase act, and any unwise measure at this stage would be likely to cause a financial relapse which would be worse than the trouble of 1893; 2. That the bill was loosely drawn and capable of double interpretations; 3. That in it no provision was made to maintain the parity between gold and silver.

"I believe," says the president, 'that if the bill under consideration should become a law, it would be regarded as a retrogression from the financial intentions indicated by our recent repeal of the provision forcing silver bullion purchases, that it would weaken, if it did not destroy, returning faith and confidence in our sound financial tendencies, and that as a consequence our progress to renewed business health would be unfortunately checked, and a return to our recent distressing plight seriously threatened."

Mr. Cleveland then goes on to review the operation of the silver purchase act of 1890, pointing out that under that act the government bought over 168,000,000 ounces of silver bullion, paying for the same nearly $156,000,000 in treasury notes.

"Such notes were by the law made legal tender in payment of all debts, public and private, except when otherwise expressly stipulated, and were made receiv

able for customs, taxes, and all public dues, and when so received might be reissued. * * *

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On the demand of the holders, these treasury notes were to be redeemed in gold and silver coin in the discretion of the secretary of the treasury, but it was declared as a part of this redemption provision that it was the established policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law.'

The money coined from such bullion was to be standard silver dollars; and after directing the immediate coinage of a little less than 28,000,000 ounces, the law provided that as much of the remaining bullion

HON. JOHN SHERMAN OF OHIO, REPUBLICAN UNITED STATES SENATOR.

should be thereafter coined as might be necessary to provide for the redemption of the treasury notes issued on its purchase, and that any gain or seigniorage arising from such coinage shall be accounted for and paid into the treasury.'

This gain or seigniorage indicates so much of the bullion owned by the government as should remain after using a sufficient amount to coin as many standard silver dollars as should equal in number the dollars represented by the treasury notes issued in pay. ment for the entire quantity of bullion.

These treasury notes now outstanding and in circulation amount to $152,951,280, and although there has been thus far but a comparatively small amount of this bullion coined, yet the so-called gain or seigniorage as above defined which would arise from the coinage of

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