paper if there had not been a considerable and yearly-increasing issue of United States notes. During the last 12 years the annual product of the gold mines of the United States has averaged about $35,000,000. Of this sum not less than $10,000,000 has been used in the arts. It is manifest that an annual increase of $25,000,000 in the volume of the circulation would have been quite inadequate, and hence it is now manifest that the country was compelled either to legalize the use of silver or to authorize an annual addition to the volume of greenbacks. As to the future, it may be predicted, with a reasonable degree of certainty, that silver is to be the chief factor of the currency of this country and of this continent; unless there should be a large increase in the gold product, and if we reason from known facts, there is no ground on which to predict such an increase. In the last 10 years the annual product of gold has neither risen above $36,000,000 nor fallen below $32,000,000. Without now canvassing the wisdom of particular measures, the experience of these 10 years justifies the use of silver as the most available, most valuable, and least dangerous means of reinforcing the currency of the country. The important questions remaining are these: To what extent and by what measures shall the use of silver be continued? By what means shall England and Germany be induced or compelled to authorize the use of silver, and through an international agreement to aid in determining its value, relative to gold, for all the purposes of domestic and foreign trade? Not more than 30 years ago it would have been thought a supreme achievement in finance to secure a paper currency based upon an equal deposit of either gold or silver in the treasury of the United States; but now that we are approaching a condition when such a deposit of silver seems inevitable, the public mind is disturbed by conjectures, theories, and apprehensions as to the consequences. These apprehensions of evil may never be realized; but most assuredly they are suggested, naturally, by the existing condition of affairs.

A history of the stages by which the country has reached the present condition requires some reference to my official opinions and doings in the treasury and in the Senate of the United States. In December, 1872, silver had depreciated about seven

per cent. from its value relative to gold in the year 1860; that is to say, a gold dollar would then purchase the silver contained in a silver dollar and leave a margin of something more than three cents. The prospect was that the depreciation would continue for many years. In my report to Congress in December, 1872, I made the following statement:

"In the last 10 years the commercial value of silver has depreciated about three per cent, as compared with gold, and its use as a currency has been discontinued by Germany and some other countries. The financial condition of the United States has prevented the use of silver as currency for more than 10 years, and I am of opinion that upon grounds of public policy no attempt should be made to introduce it, but that the coinage should be limited to commercial purposes, and designed exclusively for commercial uses with other nations. The intrinsic value of a metallic currency should correspond to its commercial value, or metal should be used only for the coinage of tokens redeemable by the government at their nominal value. As the depreciation of silver is likely to continue, it is impossible to issue coin redeemable in gold without ultimate loss to the government; for when the difference becomes considerable, holders will present the silver for redemption and leave it in the hands of the government, to be disposed of subsequently at a loss. If the policy should be adopted of issuing irredeemable silver coin whose intrinsic and nominal values should correspond to those of gold, the time would come when the country would suffer from the presence of a depreciated silver currency not redeemable by the government or current in the channels of trade."

If we accept the fact that our silver coins are not current in the channels of trade outside of the United States, all that was thus predicted in 1872 has been verified by the experience of subsequent years. In accordance with these views, Congress passed the act of February 12, 1873. By this act the use of silver was limited to the subsidiary coins and to the trade dollar of 420 grains, to which the legal-tender quality was denied for payments above five dollars. The new dollar was designed for the India and China trade. This result was so far attained that for many years there was a large coinage of the trade dollar for foreign markets, and in limited quantities it circulated in the United States. The act of February, 1873, was known as "the act for demonetizing silver," and in Congress and before the people the charge has been made that it was passed secretly or surreptitiously. The charge has no foundation whatever. From the first days of December, through a period of more than two

months, my recommendation and the current proceedings of Congress were before the country.

The financial troubles of 1873, and the relative decrease in the production of gold as compared with the production of silver, when considered in reference to the demand for gold in the leading countries of Europe, gave to the advocates of silver an immense advantage in Congress and before the country. The several reports made by the various members of the Silver Commission of 1876 justified the conclusion that the time had come when the exclusive use of gold should be abandoned. In this conclusion, as a member of the Commission, I concurred, subject, however, to the condition that an effort should be made to secure the co-operation of European countries, and especially of England and Germany, before any authority should be given for the coinage of silver in the United States. This view was not accepted, and in February, 1878, an act was passed over the veto of President Hayes, authorizing the coinage of silver dollars and making them legal tender. The same act made provision for a conference of nations for the purpose of agreeing upon the use of both gold and silver upon an arbitrary ratio of value.

By the act of 1878 the secretary of the treasury was required to purchase and coin $2,000,000 worth of bullion each month, and authority was given to him to purchase $2,000,000 in addition, whenever, in his opinion, the public interest should require such purchase. This statute closed the controversy for all practical purposes. The wisdom of the measure is open to debate; but the country then entered upon a policy from which there can be no departure, except by a wrenching of our financial system so seri ous that its consequences would be felt by the commercial world. When the act was passed the currency of the country was upon a gold basis. Its passage was in accordance with the report of the majority of the Silver Commission created under a resolution of the houses of Congress, August 15, 1876. I may be allowed the additional personality of saying that I did not concur in that report. On the contrary, speaking for myself only, I then said that the introduction of silver as a currency ought to be postponed until an effort to secure the co-operation of other countries should be faithfully made, and that the remonetization of silver by

the United States would be "followed by such a depreciation in its value as to furnish a reason against the adoption of the plan by the rest of the world." These views were in harmony with the policy that I had advocated in my report of 1872. In that year, and thenceforward until 1876, the country was upon a gold basis, and I thought it wise to rest upon that basis in the hope that England would soon realize that the output of gold was inadequate to meet the demands of the commercial world.

By the act of 1878 the remonetization of silver was authorized, and a conference of the nations was invited. As might have been anticipated, England and Germany, under the influence of a well-founded opinion that in time they would be able to monopolize the free gold of the world, avoided any conclusion favorable to the policy of the United States. Thus it happens that the governments of England and Germany are engaged in a struggle, not free from serious difficulties, to place and to keep the business of those countries upon a gold basis, while our government is engaged in a futile attempt to maintain its silver coins and its gold coins at an equality of commercial value. While I adhere to the opinion that we committed an error, which may result in serious and far-reaching evils, in not inviting and securing a conference in advance, when our position as a gold-using and a gold-producing country was a menace to England and Germany, I cannot but admit that the use of silver has been an efficient agent in securing the degree of prosperity which the country has enjoyed during the last 10 years. The use of silver has rendered the withdrawal of a large volume of national-bank notes a comparatively harmless proceeding; but had the country been upon a gold basis exclusively, the stringency would have been such as to force an additional issue of United States notes.

At this point I venture the statement that the annual output of gold-in excess of the demand in the arts, which must be first met either by the use of bullion or by the use of coin-would be wholly inadequate to meet the necessities of England, Germany, and the United States, if the use of silver should be limited to subsidiary coins; and that this is so even if we take no notice of the requirements of other parts of the commercial world. On this view of affairs rest the alternative statements that either all com

mercial nations must use both gold and silver upon an agreed ratio of relative value, or some nations may use gold exclusively, while other nations must accept silver altogether or as the chief part of their currency. Voluntarily, and for the time being at least, we have placed ourselves in the latter class, and for the time being there are no visible and feasible means of changing our condition. The coinage of silver, under the statute of 1878 and its amendments, amounted, on January 1, 1891, to $376,000,000, and the thought of demonetizing silver and withdrawing this vast sum of coin from use cannot for a moment be entertained by any one.

The remaining question is this: In what manner can the use of silver be continued with the fewest and least serious evils to the country? Incident to this inquiry are two alternative propositions: Shall the use of silver, either in coin or in bullion, as the basis of silver certificates, be limited to the production of the United States, or shall we tender our market for the product of the entire world? The latter course might, and probably would, stimulate the production of silver in countries where the mines are richer than those of the United States, where labor is less expensive, and where, without much delay, the most effective processes and the most advanced inventions would be adopted. Can the miners of the United States be subjected safely to this competition? The value of this inquiry may be estimated by the facts that in 1878 the silver mines of the United States yielded 47 per cent. of the entire product of the world, while in 1890 the yield was a trifle less than 40 per cent. From 1887 to 1889 the increase for the world was $37,000,000, and of this increase only $11,000,000 came from the mines of the United States. In view of these facts, and of the reputed wealth of the mines of Mexico and South America, it is not unreasonable to apprehend that the destruction of the silver-mining interest in the United States would follow if the coinage of silver should be opened to the product of the world. Moreover, there is a large amount of silver coin and bullion in Europe which the holders would gladly exchange for gold, even at some loss in nominal value.

With the balance of trade in favor of the United States, it will not be easy for foreign banks and bankers to obtain American gold in large quantities, though there are possible devices