Coin's Financial School (1894)

Coin's Financial School is a short fictional book that was self-published by William Hope Harvey in 1894 to promote the free coinage of silver. Approximately 1 million copies of the book were sold. William Jennings Bryan, the bimetallist Democratic candidate for president in 1896, suggested that it was “the most potent of educational forces at work in behalf of bimetallism” (Harvey 5 ). Coin's Financial School opens with “a young financier” named Coin who opens a school of finance in the Art Institute of Chicago. Coin's goal is to “instruct the youths of the nation, with a view to their having a clear understanding of what has been considered an abstruse subject,” namely, the question of the monetary role of silver (Harvey 94

Coin's Financial School garnered significant public acclaim in large part because it was so accessible. Cheap versions of the book were printed so that they could be easily acquired by anyone interested, and the text was accompanied by many illustrations and diagrams. The book also incorporated well-known public figures, such as the prominent banker Lyman Gage and the economist J. Laurence Laughlin, who engaged in dialogue with the fictitious character of Coin. Many readers, not realizing the Coin's Financial School was a fictional work, wrote letters to Gage, Laughlin, and others inquiring about the lectures.

The first lecture introduces the Coinage Act of 1873, also known as the “Crime of 1873.” Coin's critique of the act is twofold; first, that it changed the unit of account from silver to gold, and second, that it demonetized silver. He suggests that the effects of demonetization would become particularly burdensome when the federal government began resuming specie payments (expected within the next several years) on a gold standard. The second lecture addresses the question of how a government-mandated ratio of the value of monetary gold to monetary silver could remain stable when the demand for gold and silver constantly fluctuated. Coin argues that the unlimited demand for silver and gold at the established ratio ensured that fluctuations in demand for nonmonetary silver and gold would be reflected in adjustments in the quantity of monetary silver and the quantity of monetary gold but not in the of the value of the two metals. Bimetallism is therefore stabilized by the unlimited demand for silver at the established price. The third and fourth lectures cover the history of bimetallism in the United States and the emergence of the Latin Monetary Union in Europe. The fifth lecture reviews the quantity theory of money, which establishes a proportional relationship between the amount of money in an economy and the price level. In this lecture, Coin emphasizes the impact that the demonetization of silver has on real debt burdens. Because the values of debt burdens are fixed in nominal terms, Coin argues that an increase in the value of money precipitated by a reduction in the money supply increases the burden of a given level of debt. The sixth and final lecture outlines Coin's plan for the independent free coinage of silver.

Daniel Kuehn

See also: Crime of ’73 ; International Monetary Conferences ; Quantity Theory of Money

References

Fisher, Willard. “‘Coin’ and His Critics.” Quarterly Journal of Economics 10 (2): 187–208.

Harvey, William H. Coin's Financial School. Edited by Richard Hofstadter. Cambridge, MA: The Belknap Press of Harvard University, 1963.