current value, as we have seen, is maintained only because a silver dollar can be exchanged for a gold dollar at the United States Treasury.

The bi-metallic ratio of the United States is sixteen grains of silver to one of gold. When this ratio was adopted it corresponded very nearly to the relative market values of the two metals; at present, however, one grain of gold will buy about twenty-seven grains of silver, which makes the bullion value of our silver dollar about sixty cents.' If, for example, we should melt five silver dollars and three gold dollars separately into bullion, the present market value of these two bits of bullion would be the same, and we should find this to be the case wherever sold.

As gold has been the standard in the United States since January, 1879, every dollar of silver money in the country, whether it be in coin or paper, has cost its owner a gold dollar, or the equivalent of a gold dollar; therefore a drop in the monetary standard to a silver basis would cause these owners to lose forty per cent. of their money. A person with five dollars of silver money in his pocket would lose two dollars; he would still have five dollars nominally, but actually only three, as the purchasing power of the five would

1 This valuation is used throughout, to preserve uniformity in the calculations, though in Nov. 1893, when this was written, silver was worth less.

have shrunk to that of three. It might seem to him when he came to spend his five dollars that prices had advanced, but what would really have taken place would be a reduction in the value of his money while it lay in his pocket. Commodities, and property in general, would not be affected in value by the change in the value of the money, as would be evident to those who had gold money to spend. In the adjustment of values to the depreciated monetary standard, the advance in prices would disturb for a time the prevailing idea of relative values; but these changes in prices would be nominal; values. would remain as they were, subject only to natural fluctuations.

In the derangement of prices that would follow a sudden change of the monetary standard, large numbers of persons, not foreseeing the effect of the change, would be likely in trading to underestimate the value of their property in the new and cheaper money, and thus they would sustain the full loss resulting from buying with gold and selling for silver. The better knowledge of monetary conditions possessed by the few, and their larger opportunities for turning this knowledge to pecuniary advantage, would enable them not only to protect themselves, but to profit by the ignorance or the limitations of their neigh

bors; and thus much of the wealth of the country would be aggregated in fewer hands. But as values of property in general would not be affected by the depreciation in the value of the money, the direct and immediate loss would inevitably fall upon the owners of money, of bank-deposits, and of such assets as were payable in money. This loss would fall mainly upon that great body of frugal and industrious working people that composes more than half the population of the United States, as the savings of these people are generally held in bank deposits. A large majority of them would not understand the situation, and even if they did, it would not be in the power of any considerable number of them to protect themselves.

The number of small depositors in the United States cannot be less than eight millions; in a general liquidation, these depositors would be found to be the principal owners of the money that constitutes our medium of exchange. As their savings are usually left quietly and permanently on deposit, this money becomes, through the intricacies of exchanges in the ordinary course of business, the active lendable money of the nation. The sum of deposits in savings banks alone is $1,712,769,026.00, and the number of depositors is 4,781,605, making an average of $358.20 to

each depositor. As, however, but a small percentage of the money deposited in savings banks is allowed to lie idle, this money goes immediately back into circulation; even the bulk of the reserve money of savings banks is held on deposit in commercial banks, which are the active distributors of money.

If the government should cease to redeem its silver money in gold, about a thousand million dollars of the circulating medium of the nation would drop to the silver basis; but in order to ascertain the full percentage of individual loss on the depreciated money, we must take the total sum on deposit in the United States, and add to it the money in current use, as follows:

Here we have a sum exceeding five thousand million dollars, upon which there would be a direct loss of forty per cent., or say two thousand million dollars.

While the change of monetary standard would not lessen the volume of actual capital in the country, the loss to individuals would be as abso

lute as if their property had been annihilated by fire; and nothing can be plainer than that the great burden of this vast loss would have to be sustained by the working people who had laid up a little money in bank for safe-keeping, and for the interest it would bring them. There would be no levelling of fortunes, as is vaguely supposed by some people, but only an increased disparity. Tradespeople, merchants, manufacturers, and the great industrial corporations, have their capital invested in goods and merchandise, in land, factories, and in the products of factories: the value of all these would be adjusted to the new standard without loss, and as these industries are mainly carried on with borrowed money, the loss from its depreciation would not fall upon them. Nor would the banks that are the lenders of money be the losers, for nearly all the money lent by them belongs to their depositors; banks would therefore in a large measure be able to protect their stock-holders by keeping their reserve money in gold.

A glance at the weekly statements of the National Banks of the City of New York will show that the gold held in reserve by them is really in excess of their total capital.