The act demonetizing silver was understood by few, and, in fact, many of those who voted for it, and President Grant, who signed the bill, were unaware of its actual meaning and effect. The money speculators of England, backed by cupidity and ignorance on this side, were its real instigators. There was every reason in the world why England should desire the demonetization of silver here. She is a creditor nation, and her capitalists hold vast amounts in government and other securities abroad. From this country alone the capitalists of Great Britain derive each year more than five hundred millions of dollars for interest on their investments, all of which is paid in gold or its equivalent. The United States produces an enormous quantity of silver, but we very humbly submit to the gold standard as set up by Great Britain. We deny ourselves the right to use a metal of which we have an abundance and adopt one more scarce and, consequently, more expensive. By this policy we are forced to purchase gold abroad, thus adding constantly to the burden of a perpetual, interest-bearing national debt.
By accomplishing the demonetization of silver in this country, England gained a double victory, for the governments of the Latin Union, France, Belgium, Italy, Switzerland and Greece, were soon afterward forced to suspend silver coinage. The gain to England and the loss to the other countries involved, especially to the United States, by this general demonetization of silver, can hardly be estimated. The loss, of course, was the heaviest in this country, where the production of silver is very large, where so many are engaged in agricultural pursuits, and where a large and freely circulating volume of money is so essential to commercial activity.
Before silver was demonetized, we were under the burden of an enormous national debt, but every dollar of this was payable in silver. The stimulated demand for gold, and, consequently, its increase in value, was not the only gain to England. She now buys our cheap silver bullion, exchanges it at its coinage value for products in the silver-using countries of Asia, Africa and South America, and nets a profit of over one hundred per cent. by the transaction. We then buy from her at gold prices and pay with gold or products at prices which, by forcing us into competition with the world, England fixes herself.