The Democratic Party Never in Favor of Fiatism.
Declarations of the Chicago Convention in Direct Opposition to Utterances of Jackson, Jefferson, and Benton--Distinct Approval of the Gold Standard Shown in Official Acts of These Men and Other Early Democratic Leaders.
October 12, 1896 - John R. Procter of Kentucky, President of the Civil Service Commission, has been looking over The Congressional Record in order to determine the ground the Democratic Party has held in times past with reference to the gold standard. Speaking to-day of his researches, Mr. Procter said:
“My study satisfies me that the framers of the Constitution and the wise founders of our Government were united and determined that the coined value of our gold and silver money should correspond with the market value of the bullion contained. This is demonstrated by the writings of Jefferson, Madison, Monroe, and Hamilton. The Constitution gave to Congress the power ‘to coin money and regulate the value thereof, and of foreign coins, and to fix the standard of weights and measures,’ not to fix the standard of value, but to regulate it as fixed by the market price of gold and silver.
“Mr. Jefferson wrote: ‘Just principles will lead us to disregard legal proportions altogether, to inquire into the market price of gold in the several countries with which we shall be connected in commerce, and take an average from them.’
Hamilton Was Mistaken.
“Hamilton, in his first message as Secretary of the Treasury, said that to make a greater difference than one-half of 1 per cent between the coined value and the market value of the gold and silver would be unsafe. Hamilton was a bimetallist, and believed that the ratio which he proposed— 15 to 1—would keep gold and silver in concurrent circulation.
“In this he was mistaken. An ounce of gold gradually became worth more than fifteen ounces of silver, and a slight undervaluation by the act of 1792, drove gold out of circulation; and in order to bring gold again into circulation, and place the country on a gold standard the Democratic Congresses of 1834 and 1837, led by the Administration of Andrew Jackson, adopted a ratio of sixteen ounces of silver to one ounce of gold, notwithstanding the arguments that this ratio would drive silver out of circulation, as the commercial ratio was 15.60 to 1.
Benton on the Gold Bill.
“Mr. Benton, arguing in favor of the passage of the bill of 1834, which was called at the time the ‘Administration Gold bill,’ advocated gold because it was the ‘safest standard of value of property,’ that it had uniformity of value because of its superiority over all other money, which gave its possessor the choice and command over all other money because of its power over exchanges, gold being the currency which contributes most to the equalization of exchange, and keeping down the rate of exchange to the lowest and most uniform point,’ and ‘because it IS the Constitutional currency, and the people have a right to demand it as currency as long as the Constitution of the United States is permitted to exist.’
“This bill was passed by a vote of 145 to 36 in the House, and by a vote of 35 to 7 in the Senate; was signed by Andrew Jackson, and because of the prosperity following this act, Benton was fondly called ‘Old Bullion.’
Andrew Jackson for Gold.
“Andrew Jackson was so pleased with the result of this bill of 1834, bringing gold into circulation, that on his first trip to Tennessee, he ostentatiously paid out gold at all the stopping places along the route. Writing from Washington, Dec. 26, 1836, to the Rev. A. S. K. MaCallum, President Jackson said:
“'I am obliged to you for the favorable manner in which you speak of some of my late public measures, which the pure and intrinsically valuable material of the useful and beautiful present you tender gives occasion to introduce, as you seem to think, not inaptly. The useful and ornamental purposes to which gold can be applied are the properties which give it real value and render the demand for it universal.
“'This, with other peculiarities, has made it in all ages, throughout the world, the standard of value. There is no fraud in gold. Is therefore the true representative of the principles of Justice and equality which should enter into everything that operates in our institutions, and should be ever insisted on by the industrious classes as the actual circulating medium to bring continually to the test every species of currency, and to suppress the spurious paper system, resting on no solid basis, and giving birth to frauds and stock gambling.’
“As silver had gone out of circulation after the act of 1834, and as the subsidiary coinage contained relatively as much bullion as the dollar—two halves or four quarters containing the same amount as the dollar—the subsidiary coins, as well as the dollars, went out of circulation. To restore silver for the purpose of change, R. M. T. Hunter of Virginia, as Chairman of the Senate Committee on Finance, brought in a bill on March 9, 1852, diminishing the amount of silver in the subsidiary coins, in order to keep them in circulation. Notwithstanding Senator Hunter was a bimetallist, it is well for the bimetallists of the modern school to read his significant language, used in the report or the committee, signed by him.
“'But if silver is not made a legal tender—and it is not made so in Great Britain, except for small sums—it can only circulate for such purposes. To make it a legal tender at such rates, rates beyond its bullion value, would debase the standard and expel the gold. Whenever the relation between the market and mint values of gold and silver shall promise a reasonable degree of stability, there can be little doubt that there should be a readjustment of the mint values of these metals. The great measure of readjusting the legal ratio between gold and silver cannot be safely attempted until some permanent relations between the market values of the two metals shall be established.’
“Mr. Dunham of Indiana, who was the Democratic Chairman of the committee reporting this Senate bill in the House, ‘Feb. 1, 1853, explaining the meaning of the committee said:
“'They (the committee) desire to have the standard currency to consist of gold only and that these silver coins shall be entirely subservient to it, and that they shall be used rather as tokens than as standard currency, and they propose to maintain their credit and circulation not only by limiting the supply to the wants of the country, but by making them receivable for all public dues to the United States. We mean to make gold the standard coin, and to make these new silver coins applicable and convenient, not for large, but for small, transactions. I trust this sufficiently explains the reason for our pursuing this course.
“'Whenever the experiment of a standard of a single metal has been tried it has proved eminently successful. Indeed, it is utterly impossible that you should long at a time maintain a double standard. We have had but a single standard for the last three or four years. That has been gold. We propose to let it remain so, and to adapt silver to it, to regulate it by it.
Mr. Skelton’s Explanation.
“In the debate that followed, Mr. Skelton used the following language: ‘But I anticipate a difficulty here. As long as we have two metals circulating as legal tenders for debts, the relative value of the metals in the commercial market is constantly liable to change and, no doubt will change.
But, in order to meet this difficulty, a committee of the United States Senate has proposed a remedy, and’ that is that they will make the silver coin so light that it will be of less value, commercially, than the gold coin; and in order to prevent any injustice arising from that, they say that the silver coin shall not be made a legal tender for debts of over $5. Now it appears to me that this meets the difficulty in both cases.’
“It will thus be seen that this act was thoroughly understood, that its intention was to place the country on a single gold standard, and that it did have that result. It was passed by a Democratic Congress. The bill was passed in the Senate, which stood 37 Democrats to 34 Whigs, without division, and in the House, which stood 145 Democrats to 90 Whigs, by a very large majority. John C. Breckinridge, and other men who became prominent in Democratic councils afterward, advocated and voted for this bill.
All will agree that the decade of the fifties was the most prosperous decade in our history to the agriculturists in all parts of the country. There was not a dollar of American silver in circulation, and hardly enough silver coinage to meet the requirements for making change. The country was on a single gold standard, and remained there until the legal-tender act of 1862. The coinage act of 1873, which has been called ‘the crime of ‘73,’ simply recognized an existing fact. The country had practically been upon a gold standard since 1834. Silver dollars had gone out of circulation. The few that had been coined had been melted up into bullion.
The Chicago platform of 1896 declares that ‘Congress alone has the power to coin and issue money,’ and demands ‘that all paper money shall be issued directly by the Treasury Department.’ This is an entire reversal of all Democratic doctrines from the formation of the Government to the present day.
“It was decided in the Constitutional Convention by a vote of nine States, against New-Jersey and Maryland, that the power to issue paper money should not be granted to the Federal Government.
Madison and Jefferson.
“Mr. Madison in his narrative of the proceedings says:
“'Thus the pretext for a paper currency, and particularly for making the bills a legal tender, either for public or private debts, was cut off.’
“Mr. Jefferson, writing to John Taylor in 1798, said:
“’I now deny their (Congress’s) power of making paper money, or anything else, a legal tender.’
“The Constitution gave to Congress the power to raise money by taxation or toI borrow money, but no power to issue money. On this point Mr. Benton, who used to be good Democratic authority, said:
“Every clause in the Constitution which bears upon the subject of money—every statute of Congress which interprets the meaning of these clauses—and every historic recollection which refers to them, go hand in hand in giving to that instrument the meaning which this proposition ascribes to it. The power granted to Congress to coin money is an authority to stamp metallic money, and is not an authority for emitting slips of paper containing promises to pay money.
“‘The authority granted to Congress to regulate the value of coin is an authority to regulate the value of metallic money, not paper. The prohibition upon the States upon making anything but gold and silver a legal tender is a moral proposition found in virtue and honesty, and is just as binding on the Federal Government. The States may do all things which they are not forbidden to do; and the Federal Government can do nothing which it is not authorized to do.