In the late 1800s, an ongoing battle between silver and gold
for Legal Tender supremacy was being played out to conclusion. Silver was
widely traded for routine transactions, gold for large transactions. In the
bimetallic economy, the value ratio between silver and gold [historically 10:1
to 15:1 for millenniums] was a moving target determined by the Market. Law
continuously tried to legislate and fix the value ratio to accommodate debt
contracts. Since both gold and silver were Legal Tender, arbitragers could, and
did, make plays on slight differences between the Market ratio and the Legal
ratio that allowed debtors to pay off debts at the expense of the lender. Both
forms of money could not coexist as Legal Tender if debt contracts were to
function, one had to go.
The Crime of 1873 is best explained by Alexander del Mar
[1836-1926] - a political economist, historian and author. He was born in New
York City, 1836, and was educated as a Civil and Mining Engineer at
Polytechnic. He became the Director of the Bureau of Statistics of the United
States and Mining Commissioner to the United States Monetary Commission of 1876
and nominated for Secretary of Treasury.
In his book, History of Monetary Systems 1895,
Alexander del Mar lists the Laws that were concurrently passed in the United
States, Europe, Russia, Japan, India, and South America to undermine the Legal
Tender status of silver. This is the Crime of 1873. Gold and Law combined to
undermine Silver on an international scale, and gold became the singular form
of Legal Tender throughout the world. Debt and taxes still had to be paid with
Legal Tender, now gold only, no more arbitrage games. Silver took on a
commodity status and was greatly devalued, no longer accepted as Legal Tender
for debt and taxes. This was a truly spectacular collaborative conspiring
effort. But alas, eventually, even gold had to drop out the Legal Tender race,
not able to keep up with the exponential growth demands of Legal Tender.
Coinage Act of 1873 - Wikipedia – questionably slanted.
History of Monetary Systems by Alexander Del Mar,
1895, Excerpts
Crime of 1873 – The New Mint
Code
There is no mistaking the identity
of that golden thread which runs through the Latin Union Codes of 1867, the
British Mint Code of 1870, the German Mint Code of 1871, the New Mint Code of
the United States of 1873, and the Codes of numerous other countries. It is of
precisely the same issue in all of them.
France and the Latin Union - A
conference between the four states whose monetary system rests on a numeration
by francs - France, Belgium, Switzerland and Italy - resulted in the Latin
Monetary union of December 23rd, 1865. When the international delegates met
again [June 17th, 1867], it discussed the entire monetary question, and carried
a resolution in favor of what is called gold monometallism in the shape of a
New Mint Code. In 1873, France and the Latin Union limited the coinage of
silver.
Scandinavia - On September 20th,
1872, a monetary union was adopted by Sweden ,
Norway and Denmark , which
was followed by a New Mint Code. Under this code the private coinage of silver
was suspended, and the legal-tender of silver coins limited.
Austro-Hungary - The decree of
March, 1879, suspended the Private Coinage of silver, but did not limit the
legal-tender of silver coins.
Chili - Law of November 26th, 1892,
stopped the Private Coinage of silver, limited the legal-tender of silver.
Mr. Carlisle, since Secretary of
the Treasury, said in the House of Representatives, February 21st, 1878,
"The conspiracy which seems to have been formed here and in Europe to destroy by legislation and otherwise from
three-sevenths to one-half of the metallic money of the world, is the most
gigantic crime of this or any other age. The consummation of such a scheme
would ultimately entail more misery upon the human race than all the wars,
pestilences and famines that ever occurred in the history of the world."
Mr. John Jay Knox, one of the officials who in 1869-70 lent his assistance to
the preparation of the American Mint Code, when the matter was brought home to
him acknowledged his part in it, and boasted that he was "proud of his
work."
From the foregoing recital it will
be observed that the practical political outcome of the Gold Movement of
1865-73 has been to concentrate the gold coins in the world banks of four or
five principal States.
The election of 1896, between Williams Jennings Bryant and McKinley, was all about whether silver or gold was going to be the preferred form of Legal Tender. Bryant delivered his famous ‘Cross of Gold’ speech.
"You shall not press down upon the brow of labor a crown of thorns.
You shall not crucify mankind upon a cross of gold."
Gold won the
election, silver’s last hurrah. Eventually the growth of debt outstripped the
growth capacity of gold, and Legal Tender had to disconnect itself from gold, no
longer a commodity based money, to become Fiat Legal Tender: the perfect form
of money for a debt based monetary system. A severely flawed form of money.
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