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  MONEY.


    "Gold is a wonderful clearer of the understanding; it dissipates
    every doubt and scruple in an instant, accommodates itself to the
    meanest capacities, silences the loud and clamorous and brings
    over the most obstinate and inflexible. Philip of Macedon refuted
    by it all the wisdom of Athens, confounded their statesmen, struck
    their orators dumb, and at length argued them out of their
    liberties."
                                                            --ADDISON.


  SPEECH
  OF
  HON. JOHN P. JONES,
  OF NEVADA,
  ON THE FREE COINAGE OF SILVER;
  IN THE
  UNITED STATES SENATE,
  MAY 12 AND 13, 1890.

  WASHINGTON.
  1890.




  SPEECH
  OF
  HON. JOHN P. JONES,
  OF NEVADA.

  On the bill (S. 2350) authorizing the issue of Treasury notes on
  deposits of silver bullion.


Mr. JONES, of Nevada, said:

Mr. PRESIDENT: The question now about to be discussed by this body is in
my judgment the most important that has attracted the attention of
Congress or the country since the formation of the Constitution. It
affects every interest, great and small, from the slightest concern of
the individual to the largest and most comprehensive interest of the
nation.

The measure under consideration was reported by me from the Committee on
Finance. It is hardly necessary for me to say, however, that it does not
fully reflect my individual views regarding the relation which silver
should bear to the monetary circulation of the country or of the world.
I am, at all times and in all places, a firm and unwavering advocate of
the free and unlimited coinage of silver, not merely for the reason that
silver is as ancient and honorable a money metal as gold, and equally
well adapted for the money use, but for the further reason that, looking
at the annual yield from the mines, the entire supply that can come to
the mints will at no time be more than is needed to maintain at a steady
level the prices of commodities among a constantly increasing
population.

In view, however, of the great divergency of views prevailing on the
subject, the length of time which it was believed might be consumed in
the endeavor to secure that full and rightful measure of legislation to
which the people are entitled, and the possibility that this session of
Congress might terminate without affording the country some measure of
substantial relief, I was willing, rather than have the country longer
subjected to the baleful and benumbing influences set in motion by the
demonetization act of 1873, to join with other members of the Finance
Committee in reporting the bill now under consideration.

Under the circumstances I wish at the outset of the discussion to say
that I hold myself free to vote for any amendment that may be offered
that may tend to make the bill a more perfect measure of relief, and
that may be more in consonance with my individual views.


THE CONDITION OF THE COUNTRY.

The condition of this country to-day, Mr. President, is well calculated
to awaken the interest and arouse the attention of thinking men. It can
be safely asserted that no period of the world's history can exhibit a
people at once so numerous and homogeneous, living under one form of
government, speaking a common language, enjoying the same degree of
personal and political liberty, and sharing, in so equal a degree, the
same civilization as the population of the United States. Eminently
practical and ingenious, of indomitable will, untiring energy, and
unfailing hope; favored by nature with a domain of imperial expanse,
with soil and climate of unequaled variety and beneficence, with every
natural condition that can conduce to individual prosperity and national
glory, it might well be expected that among such a people industry,
agriculture, commerce, art, and science would reach an extent and
perfection of development surpassing anything ever known in the history
of mankind.

In some respects this expectation would appear to have been well
founded. For several years past our farmers have produced an annual
average of 400,000,000 bushels of wheat. Our oat crop for 1888 was
700,000,000 bushels, our corn crop 2,000,000,000 bushels, our cotton
crop 7,000,000 bales. In that year our coal mines yielded 170,000,000
tons of coal, our furnaces produced 6,500,000 tons of pig iron and
3,000,000 tons of steel. Our gold and silver mines add more than
$100,000,000 a year to the world's stock of the precious metals. We
print 16,000 newspapers and periodicals, have in operation 154,000 miles
of railroad and 250,000 miles of telegraph. The value of our
manufactured products at the date of the last census was $5,400,000,000.
Our farm lands at the same time were estimated at $10,000,000,000, our
cattle at $2,000,000,000, our railroads at $6,000,000,000, our houses at
$14,000,000,000. It is not too much to say that there has been an
increase of fully 50 per cent. in those values since the taking of the
census of 1880. Our national wealth to-day is reasonably estimated at
over $60,000,000,000.

Figures and facts such as these in the history of a young nation bespeak
the presence not merely of great natural opportunities, but of a people
marvelously apt and forceful. From such results should be anticipated
the highest attainable prosperity and happiness. Our population is
alert, aspiring, and buoyant, not given to needless repining or aimless
endeavor, but, with fixity of purpose, presses ever eagerly on,
utilizing every conception of the brain to supplement and multiply the
possibilities of the hand, and at every turn subordinating the subtle
forces of nature to the best and wisest purposes of man. No equal number
of persons on the globe better deserve success, or are better adapted
for its enjoyment.

But instead of finding, as we should find, happiness and contentment
broadcast throughout our great domain, there are heard from all
directions, even in this Republic, resounding cries of distress and
dissatisfaction. Every trade and occupation exhibits symptoms of
uneasiness and distrust. The farmer, the artisan, the merchant,--all
share in the general complaint that times are hard, that business is
"dull." The farmer is in debt, and is not realizing, on the products of
his labor, the wherewithal to meet either his deferred or his current
obligations; the artisan, when at work, finds himself compelled to share
his earnings with some relative or friend who is out of employment; the
merchant who buys his goods on time finds little profit in sales, and
difficulty in making his payments.


WHAT IS THE DIFFICULTY?

What can it be, Mr. President, that has thus brought to naught all the
careful estimates and painstaking computations, not of thousands, nor of
hundreds of thousands, but of millions, of keen, shrewd, and far-seeing
men? Our people take an intelligent interest in their business; they
look ahead; they endeavor, as far as possible, to estimate correctly
their assets and liabilities, so that on the day of reckoning they may
be found ready. Why this universal failure of all classes to compute
correctly in advance their situation on the coming pay-day? What potent
and sinister drug has been secretly introduced into the veins of
commerce that has caused the blood to flow so sluggishly--that has
narcotized the commercial and industrial world?

All have been looking for the cause, and many think they have discovered
it. With some it is "over-production," with others either a "high
tariff" or a "tariff not sufficiently high." Some think it due to trusts
and combinations, others to improved methods of production, or because
the crops are overabundant or not abundant enough. Some ascribe the
difficulty to speculation; others, to "strikes." All sorts of
insufficient and contradictory causes are assigned for the same general
and universal complaint. However inadequate in themselves, they serve to
emphasize the universal recognition of a difficulty whose cause without
close inquiry is likely to elude detection. But the evil is of such
magnitude, it is so widespread and pervasive, that, without a knowledge
of its cause, all effort at mitigation of its effects can but add to the
confusion and intensify the difficulty.

It behooves us, therefore, as we value the prosperity and happiness of
our people, to set ourselves diligently to the inquiry: What is the
cause of the unrest and discontent now universally prevailing?


ONE SYMPTOM COMMON TO ALL INDUSTRIES.

In surveying the question broadly, to discover whether there is anything
that affects the situation in common from the standpoint of varying
occupations, we find one, and only one, uniform and unfailing
characteristic; the prices of all commodities and of all property,
except in money centers, have fallen, and continue falling. Such a
phenomenon as a constant and progressive fall in the general range of
prices has always exercised so baleful an influence on the prosperity of
mankind that it never fails to arrest attention.

History gives evidence of no more prolific source of human misery than a
persistent and long continued fall in the general range of prices. But,
although exercising so pernicious an influence, it is not itself a
cause, but an effect.

When a fall of prices is found operating, not on one article or class of
articles alone, but on the products of all industries; when found to be
not confined to any one climate, country, or race of people, but to
diffuse itself over the civilized world; when it is found not to be a
characteristic of any one year, but to go on progressively for a series
of years, it becomes manifest that it does not and can not arise from
local, temporary or subordinate causes, but must have its genesis and
development in some principle of universal application.


WHAT PRODUCES A GENERAL FALL OF PRICES?

What, then, is it that produces a general decline of prices in any
country? It is produced by a shrinkage in the volume of money relatively
to population and business, which has never yet failed to cause an
increase in the value of the money unit, and a consequent decrease in
the price of the commodities for which such unit is exchanged. If the
volume of money in circulation be made to bear a direct and steady ratio
to population and business, prices will be maintained at a steady level,
and, what is of supreme importance, money will be kept of unchanging
value. With an advancing civilization, in which a large volume of
business is conducted on a basis of credit extending over long periods,
it is of the uttermost importance that money, which is the measure of
all equities, should be kept unchanging in value through time.


EFFECT OF A REDUCTION IN THE MONEY-VOLUME.

A reduction in the volume of money relatively to population and
business, or, (to state the proposition in another form) a volume which
remains stationary while population and business are increasing, has the
effect of increasing the value of each unit of money, by increasing its
purchasing power.

It is only within a comparatively recent period that an increasing value
in the money unit could produce such widespread disturbance of industry
as it produces to-day. In the rude periods of society commerce was by
barter; and even for thousands of years after the introduction of money,
credit, where known at all, was extremely limited. Under such
circumstances changes in the volume and in the value of money, while
operating to the disadvantage of society as a whole, could not instantly
or seriously affect any one individual. An increase of 25 per cent. in
one year in the value of the money unit--a change which now, by reason
of existing contracts or debts, would entail universal bankruptcy and
ruin--would not be seriously felt by a community in which no such
contracts or debts existed, in which payments were immediate or at short
intervals, and each individual parted with his money almost as soon as
he received it.

Such proportion of the annual increase in the value of the money unit as
could attach to any one month, week, or day would be wholly
insignificant, and as most transactions were closed on the spot, no
appreciable loss could accrue to any individual. Such loss as did accrue
was shared in and averaged among the whole community, making it the
veriest trifle upon any individual. But how is it in our day?


THAT EFFECT INTENSIFIED AS CIVILIZATION ADVANCES.

The inventions of the past one hundred years have established a new
order of the ages. The revolution of industry and commerce, effected by
the adaptation of steam and other forces of nature to the uses of man,
have given to civilization an impetus exceeding anything known in the
former experience of mankind. Under the operation of the new system, the
rapidity and intensity with which, within that period, civilization has
developed, is due in great part to an economic feature unknown to
ancient civilization and practically unknown even to civilized society
until the present century. That feature is the time-contract, by which
alone leading minds are enabled to project in advance enterprises of
magnitude and moment. It is only through intelligent and far-seeing
plans and projections that in a complex and minutely classified system
of industry great bodies of men can be kept in uninterrupted employment.

We have 22,000,000 workmen in this country. In order that they may be
kept uninterruptedly employed it is absolutely necessary that business
contracts and obligations be made long in advance. Accordingly, we read
almost daily of the inception of industrial undertakings requiring years
to fulfill. It is not too much to say that the suspension for one season
of the making of time-contracts would close the factories, furnaces, and
machine shops of all civilized countries.

The natural concomitant of such a system of industry is the elaborate
system of debt and credit which has grown up with it, and is
indispensable to it. Any serious enhancement in the value of the unit of
money between the time of making a contract or incurring a debt and the
date of fulfillment or maturity always works hardship and frequently
ruin to the contractor or debtor.

Three-fourths of the business enterprises of this country are conducted
on borrowed capital. Three-fourths of the homes and farms that stand in
the name of the actual occupants have been bought on time, and a very
large proportion of them are mortgaged for the payment of some part of
the purchase-money.

Under the operation of a shrinkage in the volume of money this enormous
mass of borrowers, at the maturity of their respective debts, though
nominally paying no more than the amount borrowed, with interest, are,
in reality, in the amount of the principal alone, returning a percentage
of value greater than they received--more than in equity they contracted
to pay and oftentimes more, in substance, than they profited by the
loan. To the man of business this percentage in many cases constitutes
the difference between success and failure. Thus a shrinkage in the
volume of money is the prolific source of bankruptcy and ruin. It is the
canker that, unperceived and unsuspected, is eating out the prosperity
of our people. By reason of the almost universal inattention to the
nature and functions of money this evil is permitted, unobserved, to
work widespread ruin and disaster. So subtle is it in its operations
that it eludes the vigilance of the most acute. It baffles all foresight
and calculation; it sets at naught all industry, all energy, all
enterprise.


CONTRAST OF EFFECTS PRODUCED BY AN INCREASING AND A DECREASING
MONEY-VOLUME.

The difference in the effects produced by an increasing and a
decreasing money-volume has not escaped the attention of observant
writers.

David Hume, in his Essay on Money, says:

    It is certain that since the discovery of the mines in America
    industry has increased in all the nations of Europe. * * We find
    that in every kingdom into which money begins to flow in greater
    abundance than formerly, everything takes a new face; labor and
    industry gain life; the merchant becomes more enterprising, the
    manufacturer more diligent and skillful, and even the farmer
    follows his plow with greater alacrity and attention. * * * It is
    of no manner of consequence with regard to the domestic happiness
    of a state whether money be in a greater or less quantity. The
    good policy of the magistrate consists only in keeping it, if
    possible, still increasing; because by that means he keeps alive
    a spirit of industry in the nation and increases the stock of
    labor, in which consists all real power and riches. A nation
    whose money decreases is actually at that time weaker and more
    miserable than another nation which possesses no more money, but
    is on the increasing hand.

William H. Crawford, Secretary of the Treasury, in a report to Congress,
dated 12th February, 1820, says:

    All intelligent writers on currency agree that when it is
    decreasing in amount poverty and misery must prevail.

Mr. R. M. T. Hunter, in a report to the United States Senate in 1852,
says:

    Of all the great effects produced upon human society by the
    discovery of America, there were probably none so marked as those
    brought about by the great influx of the precious metals from the
    New World to the Old. European industry had been declining under
    the decreasing stock of the precious metals and an appreciating
    standard of values; human ingenuity grew dull under the
    paralyzing influences of declining profits, and capital absorbed
    nearly all that should have been divided between it and labor.
    But an increase of the precious metals, in such quantity as to
    check this tendency, operated as a new motive power to the
    machinery of commerce. Production was stimulated by finding the
    advantages of a change in the standard on its side. Instead of
    being repressed by having to pay more than it had stipulated for
    the use of capital, it was stimulated by paying less. Capital