country creates wealth, is as much a business man as the man who goes upon the board of trade and bets upon the price of grain; the miners who go down a thousand feet into the earth, or climb two thousand feet upon the cliffs, and bring forth from their hiding places the precious metals to be poured into the channels of trade are as much business men as the few financial magnates who, in a back room, corner the money of the world. We come to speak for this broader class of business men.

. . . We do not come as aggressors. Our war is not a war of conquest; we are fighting in the defense of our homes, our families, and posterity. We have petitioned, and our petitions have been scorned; we have entreated, and our entreaties have been disregarded; we have begged, and they have mocked when our calamity came. We beg no longer; we entreat no more; we petition no more. We defy them. . .

Let me call your attention to two or three important things. The gentleman from New York says that he will propose an amendment to the platform providing that the proposed change in our monetary system shall not affect contracts already made. Let me remind you that there is no intention of affecting those contracts which according to present laws are made payable in gold; but if he means to say that we cannot change our monetary system without protecting those who have loaned money before the change was made, I desire to ask him where, in law or in morals, he can find justification for not protecting the debtors when the act of 1873 was passed, if he now insists that we must protect the creditors.

If they

And now, my friends, let me come to the paramount issue. ask us why it is that we say more on the money question than we say upon the tariff question, I reply that, if protection has slain its thousands, the gold standard has slain its tens of thousands. If they ask us why we do not embody in our platform all the things that we believe in, we reply that when we have restored the money of the Constitution all other necessary reforms will be possible; but that until this is done there is no other reform that can be accomplished. . . .

...

Mr. Carlisle said in 1878 that this was a struggle between "the idle holders of idle capital" and "the struggling masses, who produce the wealth and pay the taxes of the country ;" and, my friends, the question we are to decide is: Upon which side will the Democratic party fight; upon the side of " the idle holders of idle capital" or upon the side of "the struggling masses?" That is the question which the party must answer first, and then it must be answered by each individual hereafter.

The sympathies of the Democratic party, as shown by the platform, are on the side of the struggling masses who have ever been the foundation of the Democratic party. There are two ideas of government. There are those who believe that, if you will only legislate to make the well-todo prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.

You come to us and tell us that the great cities are in favor of the gold standard; we reply that the great cities rest upon our broad and fertile prairies. Burn down your cities and leave our farms, and your cities will spring up again as if by magic; but destroy our farms and the grass will grow in the streets of every city in the country.

My friends, we declare that this nation is able to legislate for its own people on every question, without waiting for the aid or consent of any other nation on earth; and upon that issue we expect to carry every State in the Union. I shall not slander the inhabitants of the fair State of Massachusetts nor the inhabitants of the State of New York by saying that, when they are confronted with the proposition, they will declare that this nation is not able to attend to its own business. It is the issue of 1776 over again. Our ancestors, when but three millions in number, had the courage to declare their political independence of every other nation; shall we, their descendants, when we have grown to seventy millions, declare that we are less independent than our forefathers? No, my friends, that will never be the verdict of our people. Therefore, we care not upon what lines the battle is fought. If they say bimetallism is good, but that we cannot have it until other nations help us, we reply that, instead of having a gold standard because England has, we will restore bimetallism, and then let England have bimetallism because the United States has it. If they dare to come out in the open field and defend the gold standard as a good thing, we will fight them to the uttermost. Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests, and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.

William J. Bryan, The First Battle: A Story of the Campaign of 1896 (Chicago, [1896]), 200-206 passim.

172. The Gold-Standard Act (1900)

BY SECRETARY LYMAN JUDSON GAGE

Gage was a prominent banker in Chicago who in 1897 became secretary of the treasury in McKinley's cabinet. The chief issue in the presidential contest of 1896 was that of the monetary standard. The Republicans, advocating a single gold standard unless bimetallism should be adopted by international agreement, were successful, and the gold-standard law of 1900 was the outcome of their success. Secretary Gage took an active interest in the matter and was one of the chief promoters of the bill. The article from which this extract is taken is in the nature of a reply to an article written by Professor J. L. Laughlin, in the Journal of Political Economy, June, 1900.- Bibliography as in No. 168 above.

I

AM satisfied that the new law establishes the gold standard beyond assault, unless it is deliberately violated. . . .

It is quite true that the legal tender quality has not been taken away from the silver and paper money of the United States. It would have been a remarkable and disquieting thing to do and it would have been quite as likely to weaken as to strengthen our monetary system. It makes no difference to anybody to-day whether he is paid in gold or silver, so long as the two metals circulate at par with each other and are received on deposit by the banks without discrimination. What difference would it make to me if I held some bonds and Mr. Bryan should direct his Secretary of the Treasury to sort out some of his limited stock of silver dollars for the purpose of redeeming the bonds? Would I not immediately deposit the silver in my bank and draw checks against it, just as I would if the Secretary had exercised the more rational policy of paying me with a Sub-Treasury check?

I believe that silver will never drop below par in gold? The crux of the proposition is that adequate measures have been taken by the new law to prevent such a contingency. . .

The question is largely an academic one whether any provision is made for maintaining the parity of gold and silver beyond the provisions of previous laws, for the simple reason that methods were already in operation which maintained this parity under severe strain from the first coinage of the Bland dollars in 1878 down to the repeal of the silver purchase law in 1893 and have maintained such parity ever since. Prof. Laughlin understands the practical operation of these methods of redemption through the receipt of silver for public dues. This method will unquestionably prove adequate, upon the single condition that our mints are not opened to the free coinage of silver and

no further considerable purchase or coinage of silver takes place. The facts of the situation and the experience of other countries with a considerable amount of silver coins plainly show that the suspension of free coinage and the receipt of the silver coins without discrimination for public dues are in themselves sufficient to maintain parity.

But I think Prof. Laughlin is mistaken in his criticism that no means whatever have been provided for maintaining the parity between gold and silver. He admits that the first section of the Act declares that "All forms of money issued or coined by the United States shall be maintained at a parity of value with this standard, and it shall be the duty of the Secretary of the Treasury to maintain such parity." He criticises this provision upon the ground that it gives absolutely nothing with which to maintain parity. . . .

It is to be regretted that the provision on this subject is not put in plainer language. I understand that it was urged upon the Conference Committee that this clause should read, "it shall be the duty of the Secretary of the Treasury to use all appropriate means to maintain such parity." This would have conveyed sweeping and complete authority to buy gold, sell bonds, or take any other steps in execution of a solemn duty imposed by Congress. But there is another provision of the bill which Prof. Laughlin seems to have disregarded. This is in section 2, providing for the gold reserve, where it is prescribed that when bonds are sold for the maintenance of the reserve the Secretary of the Treasury, after exchanging the gold for notes and depositing the latter in the general fund of the Treasury, " may, in his discretion, use said notes in exchange for gold, or to purchase or redeem any bonds of the United States, or for any other lawful purpose the public interest may require, except that they shall not be used to meet deficiencies in the current revenues." The declaration that notes may be used "for any lawful purpose," certainly includes the maintenance of parity between gold and silver, since it is distinctly made a legal obligation of the Secretary by the first section. If the Secretary of the Treasury, therefore, finds a considerable fund of redeemed notes in the general fund of the Treasury, and fears that silver will fall below parity with gold, he is able under this provision to pay for silver in United States notes which are redeemable in gold on demand. It seems to me this affords an important and almost perfect means of maintaining the parity of gold and silver. It amounts in substance to the ability of the holder of silver dollars to obtain gold notes for them, if the Secretary of the

Treasury, under the mandate laid upon him by law, finds it necessary to offer such notes in order to maintain the parity of silver.

But suppose that there were no notes in the general fund of the Treasury which could be used for this purpose?- if, in other words, there was no demand for gold by the presentation of United States notes, which had resulted in an accumulation of the latter it is pretty plain that there would be no demand for the exchange of silver for gold. The entire body of the law on this subject is calculated for a period of distrust and demand for gold. If such a demand occurs it must fall upon the gold resources of the Government by the presentation of notes. The notes then become available for exchange for silver. If the criticism is made that this puts the notes afloat again in excessive quantities, it may be answered that the quantity of silver in circulation has been diminished, that a gold note has taken its place, and that if this note comes back for redemption in gold the Treasury is fully equipped by law for obtaining additional gold by the sale of bonds and holding the note until financial conditions have changed. . . .

Objection is made to the new law that it does not make the bonds of the United States redeemable in gold. That is true in a narrow sense. The new law, as finally enacted, does not change the contract between the Government and the holder of the bond, which was an agreement to pay coin. . . . I think that upon many grounds the conference committee acted wisely in refusing to make this change. It establishes

a dangerous precedent to enact a retroactive law. . . . For those who prefer a gold bond Congress provided the means of obtaining it by offering the new two per cent bonds upon terms of conversion approaching the market value of the old bonds. . . . Nobody doubts that these bonds will be as good as gold, and it is wholly immaterial whether some Secretary of the Treasury pursues the infantile policy of paying silver dollars upon these bonds instead of checks, when as I have shown all money of the United States is convertible into gold. These are the distinct provisions of the new law and they cannot fail to maintain the gold standard except by the deliberate violation of the duty imposed by the law upon the Secretary of the Treasury.

Lyman J. Gage, The Gold Standard Law, in Sound Currency, July, 1900 (New York), VII, 113–115 passim.