II. Silver

Silver is rarely found in the form of metal, but chiefly as an ore, from which the metal is obtained by complicated processes. Nor is the ore usually found on or near the surface of the earth, but mostly in quartz veins, or in lodes and pockets which lie deeply buried in the recesses of metamorphic rocks. Hence silver was the last of the two great precious metals obtained by man; and it could not have been procured in any but minute quantities before the discovery of iron and the fabrication of iron and steel tools of sufficient hardness to cut the rocks in which silver ores are concealed. As for the suggestion that copper tools, hardened with tin, were sufficient for deep mining, we leave the inventors of this hypothesis to account for copper and tin metal themselves in any great quantity prior to the advent of steel tools.

The dependence of silver upon steel enables us to fix its era with some degree of certainty. The Indian Brahmo-Buddhists, the Babylonians, Assyrians and Greeks all agreed in assigning the invention of iron and steel to about the beginning of the 14th Century B.C.

The Greek date was that of Jasius and the Ten Dactyles of Mount Ida, B.C., 1406. This date marks alike the era of iron metal and of quartz mining; whether of gold, copper or silver. The earliest use of silver for coins must be assigned to the East Indians, who, in their ramtenkis, or rama-tankas, employed a mixture of both gold and silver, called by the Greeks, electrum.

The earliest silver coins of the West were those of Pheidon, King of Argos, who, according to the Parian chronicle, struck them in the Isle of Aegina, near Athens, about B.C. 895, from silver, probably obtained in the mines of Laurium. The punched stater of Miletus, now in the British museum, has been assigned upon artistic grounds to the period B.C. 800, but Mionnet contends that it is not older than Dirius Histaspes. The electrum coins of Lydia are of a somewhat later date. The mines of Laurium were situated near Cape Sunium, about 30 miles from Athens. The surface deposits probably contained some native silver. There is reason to believe, from the archaic remains found at Tiryns and their resemblance to those of Byrsa (Carthage), that such surface deposits were originally worked by the Phoenicians.

However this may be, the mines were certainly known to Aeschylus, Themistocles, Herodotus and other Greek writers of the fifth and fourth centuries B.C., at which last named era the excavations were of some depth and the ores were of calamine and difficult to reduce. In the time of Themistocles the annual produce of silver amounted in value to that of the metal in about a million dollars of the present day.

The systematic working of these mines marks an epoch in the history of silver. It gave rise to that rivalry for the trade of the Orient which led to or kept up the wars between Greece and Persia.

Silver coins soon became common in all the Greek States; and specimens of them are still extant. The ratio of weight in silver and gold coins of the same value, at this period was, in India, 6 for 1, Persia 13 for 1 and Greece 10 for 1. In exchanging Western silver for Indian gold the Persians made 100 percent, and the Greeks 50 percent profit.

The use of gold and silver coins was not universal in the Greek States. The iron nummularies of Sparta under Lycurgus and the nummulary system of Clazomenae and Byzantium were remarkable exceptions, which, in this place, can merely be mentioned, but which nevertheless, especially the first one, deserve the careful examination of all students of money. They serve to prove, if nothing more, that neither silver nor gold are indispensable for the purposes of money or commerce. From a passage in Varro, preserved by Charisius, viz., that "It is said that silver money was first made by Servius Tullius," there is reason to believe that the Romans struck silver coins at an earlier date than that mentioned by Pliny and that silver and copper coins were used for money down to the period of the Gaulish invasion. This system was abandoned, in A.U. 369 (B.C. 385), for a nummulary system consisting of highly overvalued bronze counters, which formed the distinguishing money of the Republic, until B.C. 316, when the plunder of Magna Graaecia led to the issue of the scrupulum coins of silver and gold at the weight ratio of 9 for 1. The capture of Tarentum in B.C. 271 led in B.C. 269 to a new coinage of silver and gold, this time at 10 for 1. Other coinages followed, which it is not deemed necessary to further mention in this place. In B.C. 206 Scipio Africanus conquered Spain for the Romans. Here began a new era in the history of silver. Down to this time, indeed, until the Roman patricians acquired such command of the State and its possessions as to render them the arbiters of its destiny, the Republic controlled the issues of its mint and regulated, in the public interest, their number and value. From the moment that Spain fell to Scipio there arose a struggle among the privileged class, to which that hero belonged, to control its silver mines and coinages.

The Iberian mines had been opened in ancient times by the Phoenicians and afterwards worked systematically by the Carthaginians. They were so numerous and prolific that historical writers have with one accord assigned to Spain during the Roman era the same relative importance that is claimed for America during the 16th and 17th centuries. The control of the Spanish mines lawfully belonged to the Republic; but Strabo proved—and there are other evidences, derived from the appearance of the private coins, technically known as coins of the gentes—that shortly after the conquest of Spain the patricians of Rome acquired control of the silver mines and the privilege, under public regulation, of coining silver; the State still retaining and exercising the exclusive right to mine and coin gold.

The gentes coins were struck at the ratio of 10 silver to 1 gold, until the time of Sulla, when their weight was reduced, so that the ratio stood at 9 for 1, and this continued until the accession of Julius Caesar, when private coinage and meltage was abolished and the ratio was raised to 12 for 1. It was during the period from Sulla to Caesar when most of the gentes coins, now extant, were struck. The silver denarius of this period weighed 60.6 English grains. Of these, 25 were valued at one gold aureus of 168.3 grains. Hence 60.6 x 25 = 1515-168.3=9; which was the ratio between silver and gold between B.C. 82 and B.C. 45.

From the accession of Caesar, to the sixth century, the principal supplies of silver were obtained by the Romans in Spain, as elsewhere, by means of slave labor. These supplies were then materially lessened by the rising or invasion of the Visigoths, who, in remembrance of the cruelties suffered by their kinsmen under Roman masters, peremptorily closed the mines of Spain and forbade their being worked at all. The silver mines of Hungary, Bohemia, Germany, Gaul and Britain fell under the control of other "barbarians;" and though in the eighth century the Arabs conquered Spain and reopened its silver mines, the product did not go to Rome, but was employed in that new trade with the Orient which the Moslems and Goths had inaugurated. Substantially, from the sixth to the thirteenth centuries, the European supplies of silver went to the Moslem and Gothic traders, who swept the seas which encircle the Continent, and controlled the trades of the Levant, the Baltic, and the Orient.

The weight ratio of value between the precious metals within the Roman Empire always remained where Caesar fixed it, at 12 for 1; but the Moslems and Goths without the Roman Empire fixed it at 6 1/2 for 1, the same as it was in India. These two widely different ratios, the Roman and Indian, continued to antagonise one another in Europe, with more or less influence upon the coinages of those frontier states which did not fully fall within the sphere of either system, until the introduction of Christianity into the Gothic States and the decay of the Moslem power in Spain, when the Roman ratio of 12 for 1 again asserted its ascendency. This ascendency was, however, but temporary. Rome itself fell in 1204 (capture of Byzantium by the Latins and Venetians) and the coinage of gold, which, down to that time, had been exclusively exercised by the Roman (Byzantine) sovereign-pontiff—thus enabling him to keep the ratio unchanged—was usurped by every State that rose upon the ruins of the Empire. From the fall of Byzantium to the opening of Potosi in 1545 Europe witnessed every change in the relative value of silver and gold that provincial jealousy, avidity, expediency, or necessity could suggest.

For thirteen centuries the ratio within the Empire had remained steadily fixed at 12 for 1. During the following three centuries it varied in the coinage laws and coinage of Europe from 1 for 1 to 20 for 1. In 1535 the silver mines of Potosi were discovered: in 1545 these mines were opened systematically. In 1567 the "patio" process was discovered. From this period commenced that new and latest era in the history of silver which it is the purpose of this work to illustrate. In 1591 the Spanish Viceroys in America were authorized to coin silver and to furnish such coins in exchange for silver bullion upon which the King's fifth, 20 percent., and other dues, amounting to about 1 1/2 percent, more, had been paid. In 1608 the Viceroys were instructed to coin for private account and free of charge all duty-paid silver brought to the Viceregal mints, except when regard for the public interest rendered it in their judgment more expedient to cease coinage. This was practically unrestricted and gratuitous, but not yet unlimited, coinage.

It is with this last mentioned subject that we shall presently have to deal. Meanwhile it is necessary to mention the quantitative influence of gold and silver and to briefly trace the history of coining by machinery.

In my article "Silver," in the Encyclopedia Britannica, 9th edition, signed "A. De.," I said that "the greater rapidity with which gold can be obtained (as compared with silver) has often influenced the legal relation of value between these two metals." For example, when in 1668 the King of Portugal found that large supplies of gold were coming into his coffers from the Brazilian placers, he raised the mint price of gold from 13 1/3 silver to 16 silver. Hence the origin—for such was the origin—of this celebrated ratio was purely arbitrary and entirely opposed to the natural order of things. Silver did not fall owing to plentifulness, nor gold rise owing to scarcity. On the contrary, gold rose because the royal dues in that metal were so vast that the King of the principal coining country of that period deemed it worthwhile to raise its mint value in order to still further enhance the royal revenues. By the year 1747 the sporadic product of Brazil was substantially exhausted, and the King of Portugal, finding that his dues were now chiefly paid in silver, arbitrarily raised that metal from 16 to its former weight ratio of 13 1/3 for 1 of gold But at this period Portugal was ruined, and it did not much matter what the king did. The cause of her rise was the Plunder of the Orient and the Exploitation of the Brazilian placers; the cause of her fall was the sudden exhaustion of these sinister sources of wealth.

In all questions concerning coinage it must be borne in mind that gold has in fact been obtained chiefly from placers; that for the most part the placers needed no capital for their development, and that for this reason and also because placer gold is on or near the surface, the placers can be and always have been worked by a great number of people at once: hence that they can throw, and in fact have thrown, a vast quantity of metal upon the mints in a short space of time. It is no answer to these circumstances that the known placers are exhausted, or that there are no more placers to be discovered. Alaska is a recent and stubborn fact to the contrary; and until the entire earth, habitable or otherwise, is ransacked and washed over, the retention of gold as a Measure of Value exposes all the existing arrangements of men and things to disastrous revulsions.

Silver, on the contrary, is slow of production. The metal is locked up in the rocks, 28 cubic feet of which (mining "drives" or galleries are usually 7 feet high and 4 feet wide) have to be excavated in order to bring to the surface one lineal foot of vein matter, which is rarely more than a few feet thick. A silver mine needs capital and metallurgical skill for its development; while only a comparatively few men can work in one simultaneously.

For these reasons the production of silver has always been, and if not disturbed by legislation would always be, far more steady than that of gold. Its gradual demonetization is therefore without any apology either in the manner of its finding or production. As will be shown in the course of this work, it has been the result of intrigues which originated and have continued to emanate from the city of London, a place in which there are neither gold nor silver mines, but a plentiful accumulation of "financial" and commercial shrewdness.

I would not have it inferred from these remarks that I prefer silver to gold for a general Measure of Value. A general or universal Measure of Value is a chimera invented by the bankers of Thread-needle Street to foist their Metallic scheme upon the world and render their city the center of a system of cosmopolitan Barter. A national Measure of Value, consisting of silver metal ("free coinage" system), is but little better than one of gold metal. No metal, as such, can measure value with precision or equity. This is what Money alone can effect; and if there were no question of policy in the matter, I should advocate a monetary system independent of metals. But the monetary question is a practical and political one. We cannot ignore history; we cannot ignore the status quo; and as the status quo is a complex metal and paper system based upon history, law and practical politics, the most that can be done is to reform it in the interest of the government, that is to say, of the people. For the present I would advise a return to the coinage laws prior to 1873 and the retirement of bank notes, to be replaced by greenbacks. These reforms will not only benefit the great mass of our people, they will save the commercial classes from what will otherwise end in widespread bankruptcy and perhaps even more serious results.

Unfortunately the commercial classes are too greedy to accept reforms that do not promise them unfair advantages.