[To THE EDITOZ Of THE " SPECTATOR:1 SIR, — Manifestly what would
be the results of bimetallism in the future may be known by its effects in the past. A generation ago, when both gold and standard silver dollars were legal tender in the United States, it was stipulated in the deeds of certain ancient ground-rents, in which I was interested, that the interest should be paid in silver dollars. As there was at that period a much larger production of gold than of silver, the only silver coins in circulation were fractions of a dollar made by the Mint below the standard for the dollar. It became therefore necessary from time to time to purchase the silver dollars at a premium of 5 percent. with gold coin, to meet the periodical payments of interest. During the suspension of specie payments, during and after the Civil War, the Pacific States retained the coin basis by a general commercial under- standing. But as the production of silver increased relatively to gold, silver dollars were passed only in small sums at the par of gold, while in large sums they were purchasable at 10 per cent. discount, though a legal tender. It was considered a dishonesty, involving refusal of future credit, to force silver upon creditors. On one occasion I had a debt of two hundred dollars forced upon me in silver, for which I could only obtain one hundred and eighty dollars in funds receivable in bank. What would again occur under bimetallism may be predicted by its working in the past. Under the irresistible laws of demand and supply, it is impossible to keep silver and gold in a permanent relative value.—I am, Sir, &c.
R. PEARSALL SMITH.
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