Harper's/Delusions of Bimetallism

by Carl Schurz

DELUSIONS OF BIMETALLISM.

Among the advocates of bimetallism there are sincere and earnest men, moved by a philanthropic impulse. To judge from their utterances many of them are haunted by a gloomy apprehension that the great mass of mankind is at present in a condition of exceptionally dreadful distress and mister, threatening to grow much worse. This calamitous state of things they ascribe to the paralyzing effect of the diminution of the world's money, which they think has been caused by the so-called demonetization of silver and the establishment of the gold standard. The only remedy they can see is the complete “rehabilitation” of silver as a money metal and the general establishment of the double standard of values. Having persuaded themselves of the necessity of this remedy, they readily assume the possibility of its application; and in this respect they encourage themselves with the belief that an overwhelming majority of civilized mankind is not only in favor of it, but positively yearning for it, and that only the malign influence of a conspiracy of powerful financiers within a square mile around the Bank of England or within hearing distance of Wall Street in New York stands in the way of the happy consummation.

Here we have a remarkable structure of false conclusions built upon a ground-work of false premises. It is an instructive instance of the imagination of otherwise sensible persons running away with their understanding. In the first place, the very evil which these philanthropists mean to remedy is not such as they assume. To be sure, there is much poverty, distress, and suffering in this world — more than enough to move a good heart to pity. All the more should we be careful to base our schemes of relief upon a correct diagnosis of the evil. While it is true that much misery exists, it is not true that it is at present of exceptional extent, or that of late years it has been growing worse. On the contrary, the general condition of mankind as to material well-being is not nearly as unsatisfactory as it was fifty or thirty years ago. It has decidedly improved, especially since the period which to the mind of the bimetallist marks the beginning of progressive calamity — the period of the establishment of the gold standard in Germany and in the United States. Not only has there been in the countries named, as well as in England — the leading gold-standard country of the world — a most remarkable industrial development during that period, but the condition of the great masses of the people has, temporary depressions and cases of local distress notwithstanding, on the whole, strikingly changed for the better.

This is so well known a fact that it hardly requires proof in detail. But by way of illustration certain figures may be quoted which were recently published by the government Bureau of Statistics. An increased consumption of the things which enter into the daily life of every individual, especially of those things which, although in common use, are not necessaries in the strictest sense, is always a trustworthy symptom of rising prosperity among the many. Now it is shown that in the last thirty years the per capita consumption of sugar in the United States has risen 250 per cent., that of coffee more than 60, and that of tea more than 20 per cent. Moreover, the average consumption of wheat is one-fifth, and that of malt beverages nearly three times, greater than it was thirty years ago. A symptom of the same nature is it that every American on an average now spends three times as much money on letter postage as he did thirty years ago. The statistics of other gold-standard countries show similar results.

Drawing logical conclusions from such facts, the bimetallist, to be candid, would have to admit that if the establishment of the gold standard had any effect upon the material well-being of the great masses of mankind at all, it has been in the way, not of deterioration, but of marked improvement.

In the same conclusive fashion will the statisticians disprove his pretence that the volume of current money has diminished since the establishment of the gold standard; for they show by figures that the per capita circulation has actually increased. And this fact suffices to expose the hollowness of the well-worn assertion with which we have been plied for years, that the extensive decline in prices is owing to a diminution in the volume of current money. If the volume of money had determined the movement of prices, might it not be legitimately said that prices had gone down because the volume of money had gone up?

But the most characteristic delusion of the bimetallists is their belief that, excepting a small number of persons interested in the gold standard, all mankind is fairly hungering and thirsting for the realization of their scheme. The method by which the propagandist of bimetallism swells his roll of adherents is a very simple one. You ask ten persons whom you happen to meet whether it would not be a nice thing to have some arrangement by which silver and gold could be made safely to circulate together, thus giving the world about twice as much money as it has now — and nine of these persons, not having given the matter much careful thought, will probably reply that this would be a nice thing indeed. The propagandist of bimetallism then promptly registers them among the firm believers in his panacea, and thus puts down a majority of nine to one. But what will the nine reply when asked the farther questions, whether they think it possible, by mere legal enactment or by international agreement, to raise the market price of silver — which is now 65 cents an ounce — to $1.29 an ounce, so as to make silver money acceptable at the ratio of 16 to 1; or whether they think that any other ratio can be agreed upon, and which, if agreed upon, would bring about a practicable double standard of values; or whether they think that any of the great commercial nations which are carrying on their business successfully on the gold standard will be inclined to abandon that standard to the end of making so reckless an experiment? Confronted by such practical questions, the majority of nine to one will instantly evaporate. Only some visionary who hopes against hope will remain, or some debtor who has a vague impression that bimetallism will in some way relieve him of his incumbrances. Whoever doubts that this will be the result may look at the outcome of the international conferences which have been held on this matter. There was in them much eloquence so long as the “general subject” was orated upon. But when the question turned up how the thing was practically to be done, the members soon found it was time to break up and go home. This will inevitably be the result wherever the matter is intelligently discussed. In every civilized country the business community is overwhelmingly against the double standard. The yearning of mankind for bimetallism is a myth.

The serious consideration in Congress of a bill to bring about another international conference on bimetallism is one of the ghastliest performances of our day. Hardly any of the men who vote for it believe in the possibility of accomplishing the object. To say that the Republican platform obliges the party to make the attempt is like saying that a platform may oblige a party to galvanize a dead body into life. The outcome can be only to shake the confidence of the world in the intelligence or good faith of the American people, which seemed to shine so brilliantly in the late Presidential election, to discredit the meaning of the sound-money victory, and to furnish to the silver agitators in the United States an official endorsement of their most captivating arguments with which to make a new campaign.

Carl Schurz.