of counterbalancing financial gains. If every debtor in the be
at least a slice of the solid pudding of repudiation, without the full sense of moral discredit which ordinarily accompanies repudiation. The debtor would have the ten per cent. in his pocket, and at the same time he would have a sense that he had given his creditor all that he was entitled to. Uneducated men are not easily made to see that there can be anything wrong in paying in one metal instead of in another. They are accustomed to small transactions, in which silver is a token money, and they naturally apply the identity which exists between gold and silver in sums which are counted by shillings to sums which are counted by millions. If an American farmer happens to have been in England, he will remember that twenty silver shillings went every bit as far as one gold sovereign, and when he hears that the Silver Bill is held dishonest by Englishmen, he will be likely to recall this cir- cumstance. He knows as a fact that to pay his debts in the inferior metal will somehow be a gain to him, but so long as he pays in legal coin he argues that it is merely a fair piece of luck, which has for once given him an advantage over the great capitalists, who usually have everything in finance their own way. We very much doubt whether the honesty of any nation would be proof against such a temptation as this. But then this temptation was not offered in its naked simplicity to the American public. They had a way of escape from it opened to them in the demonstration that certain consequences must follow which would eat up all the gains on which they had counted. They are not fools, these Americans, who are so eager to get silver accepted as legal tender ; and yet it is hard to understand how any one who is not a fool can deny that the Silver Bill is likely to work badly for the United States. The whole anticipated gain from the Silver manoeuvre turns upon the maintenance of the present relation between the two metals. It is thought worth while to risk the character of the United States for honesty and straightforwardness, because the supposed result of thus risking it will be to make ninety dollars do the work of a hundred. But what if, as soon as the Bill is passed, it turns out that ninety dol- lars will still only do ninety dollars' work V In that case, the moral sacrifice will have been made without the material gain, in expectation of which it was made, being realised. Surely that is a prospect which might reasonably discourage a man who is meditating a little sharp practice. But is it a prospect to which the American public could be expected to be alive ? We should have thought that it was, because the probability that they will be no richer for the Silver Bill rests on a principle with the working of which they are very familiar. The coinage of silver on a large scale will create a great and sudden demand for silver to be coined. Why should not the holders of silver raise the price of it, just as the holders of any other commodity that is greatly in request I Americans are not unacquainted with this process as applied to corn. When a bad harvest in Europe makes it certain that the imports from America will be unusually large, the holders of corn are not content to ask only the price that they would have asked if the European harvest had been an average one. It is true that the silver harvest has not failed, but there will be much more silver wanted this year in America than there has been in previous years, and as regards the effect on the price, this is precisely the same thing. " At the present moment," said Mr. Bagehot, writing a year and a half ago, " America (if both metals were legal tender) would become a silver country, and the interest and principal on her obligations would be paid . in silver. The evil, of course, would not be what the momen- tary circumstances of the market would now suggest. Silver would not be at 52d. an ounce, if America was a country with a sole silver currency. So large a demand as her coin require- ments would send the price up very rapidly,—perhaps to its old amount." We do not expect American farmers to read Mr. Bagehot, but we did expect them to understand and apply the lessons which they learn every year from their own harvests.
It may be said perhaps—and this is a consideration not unlikely to weigh with a calculating and frugal people—that on our own showing, the Americans have nothing to lose by the Silver Bill. If silver remains ten per cent. cheaper than gold, their creditors will abuse them, and perhaps refuse to lend them any more money ; but then they will have the ten per cent. safe in their pockets. If silver becomes as dear as gold, they will not have the ten per cent, in their pockets ; but then in the'assumption that a creditor's suspicions are only roused by a positive money loss. So fax is this from being the case, that the tendency on every Stock Exchange in Europe is to credit the American people with far graver dis- honesty than they are consciously guilty of. The de- cision to pay their debts in silver instead of in gold is not identical with repudiation in the minds of those who have arrived at it. They are going, they say, to pay the whole of their debts in lawful coin of the same nominal value as the coin in which they were contracted, and that is not the same thing as repudiation. If it is not unalloyed honesty, it is still honesty,—honesty with just that slight admixture of baser metal which is needed to make it workable. But foreign creditors will not regard the transac- tion in this qualified light. They will look simply at the fact that the American people have deliberately designed to de- fraud them of one-tenth of what is due to them, and it will be very hard to persuade them that a nation which has done this has done its worst, and may be trusted as much in the future as it has been in the past. It may be objected perhaps that United States bonds have risen since the Silver Bill has passed the Senate, and that this is evidence that the apprehended distrust is not really entertained. Why, if American credit is seriously damaged, should buyers be found to give more for their obligations than before the damage was irretrievably done ? The answer, of course, is that apart from mere market reasons, the rise in the existing Securities is a most significant sign of the estimation in which European Creditors hold the Silver Bill. The great end of American financiers is to reduce the burden on the taxpayer by paying off money borrowed at a high rate of interest, by means of fresh money borrowed at a lower rate of interest. It is the knowledge that the Secretary of the Treasury desires to do this, coupled with the belief that the high character of the security he has to offer would more and more enable him to do it, that has kept the Six-per-Cent. Bonds from finding their natural level. Now this belief no longer exists. The United States are about to take their place among those borrowers from whom a high interest is expected, in order to make up for the inferiority of the security. Consequently, the attempt to borrow money at low interest is likely to fail, and this is a prospect which positively increases the value of the existing bonds. But it is a very serious prospect to the American debtor, who sees the chance of borrowing money at 4 per cent. growing less and less, and the probability of having to go on paying 6 per cent. growing greater and greater. Yet all this might have been and was demonstrated to the Ameri- can people in the course of the discussion on the Bill, and demonstrated without the least apparent effect. It is the fact that the Silver craze has been so obstinately proof against argument, that gives it so high a place in the hierarchy of popular delusions.
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