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April 27, 2010 Reading Time: < 1 minute

“The amount of circulating cash of all kinds in the hands of the people at the present time is about nine hundred millions. If the dollar was reduced to half its present value, and if allowance was made for reserves, two thousand million silver dollars would be the specie requirement of the country. We already have nearly five hundred millions of such dollars. Hence the country could not use at the utmost, if the new silver dollar was worth not more than haft the present gold dollar, and if the total circulation consisted of silver without any paper, but three times as many more silver dollars as we have now. But every one knows that such a state of the currency never would exist. We should have paper “based on silver”; that is to say, the silver inflation never will be carried out. It will turn to paper inflation at the first step. Who can believe that, if the silver standard was adopted, silver would be bought and piled up dollar for dollar against the paper, and that the paper would be issued only as fast as the silver could be coined? In fact, silver would no doubt be dropped and forgotten, and we should have plain and straightforward fiat money of paper. Such ought to be faced as the only real sense and probable outcome of the present agitation for the free coinage of silver.” Read more.

“The Free-Coinage Scheme is Impracticable at Every Point”
William Graham Sumner
The Forgotten Man and Other Essays, ed. Albert Galloway Keller (New Haven: Yale University Press, 1918).
Via Liberty Fund.
Atlas would like to thank Lawrence H. White for bringing this article to our attention. 

Image by Salvatore Vuono / FreeDigitalPhotos.net.

Tom Duncan

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