Chapter XLIX: Part II: Present Day Problems (3)

In coin-paying eras corrupt governments and Shylocks have debased coins to make them go further. In these credit-mongering times they try to bring their coin basis down to one metal, gold, and clamor for extreme fineness of that, in order to make their inverted pyramid of credit go further and sell dearer. The policy of Great Britain, for instance, has been to make gold, its standard, so dear and inaccessible to the foreigners and debtor class that they would find the other commodities in the market cheaper than the gold in the market, so that settlements in other commodities would be preferable. The retention of gold in the Bank of England, by raising discounts in panicky times, though murderous (“kindness,” says Mr. Laughlin) to individual active business men, is a necessary factor in this piratical scheme, and the fulcrum upon which England derricks into her treasure vaults the plunder of the whole world. Business is made a lottery, turning out dazzling prizes that keep merchants from rebellion. Long-headed American Shylocks hope to see the United States as much more successful in plundering the globe, in this way, as our country is larger than England.

Finally, as to Laughlin, with what bitter scorn this statement from the “closet scholar” will be greeted by the thousands of manufacturers who, during panics, have had to shut their factories for lack of cash “to pay the hands”—though they had all but gilt-edge collateral:

“The monetary function has to do solely with exchanges of goods; it hasn’t anything to do with their production.”

The Washington “Currency Reformers.”

In finishing this bird’s-eye view of the financial history of this country, a brief review of the current financial plans cannot well be avoided. It may be said of them, in a general way, that no other set of robbers ever before attempted to secure a law guaranteeing them unrestricted right to plunder with unlimited government protection. The out and out black-flag pirates, as represented by Walker of Massachusetts, have a plan as simple and explicit as a patent medicine. It runs thus: “Retire the greenbacks, kill silver once for all, and let the bankers manage the currency.” This obsolete idea, that banks should issue money, is showing all the vim of a death struggle. But a thousand columns of speeches in the _Congressional Globe_ on the safety of the national bank system are answered by this solitary fact: In the year 1893, three hundred and sixty banks west of the Alleghanies, owing $125,000,000, went to smash, and about a dozen bankers are now in prison or exile, while many more escaped as by fire.

THE BALTIMORE PLAN, which a while ago had the sanction of the Comptroller, Secretary of the Treasury and the President, is, in a word, a scheme for issuing circulating notes by both national and State banks, otherwise than upon the pledge of government bonds as now. The banks are to issue notes upon their own assets, supplemented by a deposit of a certain amount of greenbacks, as a safety and redemption fund. The theory of this plan is that when any special demand for currency arises the banks will make a special issue of notes to supply it; and that as soon as this demand ceases the banks will retire the notes it has called out. Thus the quantity of currency available will, it is assumed, never be either deficient or excessive; and there will never be at any point either a monetary stringency or a monetary plethora. Were the function of currency exclusively that of facilitating exchanges, such a system (like that of 3-65 interconvertible bonds) might be useful. But currency serves the additional purpose of measuring the price of commodities; and since its relation to those commodities is determined by its volume, any change of its volume changes its value also, and consequently impairs its stability as a measure of prices.

Again, as to the State bank feature of the Baltimore plan, the idea prevails extensively in the agricultural districts of the West and South that the chief business of a bank is to lend money to borrowers. That is why they clamor for the removal of the ten per cent. tax on State banks. An abundance of greenbacks and silver would do away with most of the need of borrowing from banks. That’s what’s the matter with the banks.

No further mention is needed here of the schemes of Carlisle, Springer, Vest and others. They seem all dead at this writing, and they certainly should be damned. Even the New York _Tribune_, a monopolists’ own, says of one of the safety-fund schemes:

“The bankers are to have free issue; and when one fails the government is to collect from the other banks and redeem its currency. But in time of panic the government would not and could not do that.”

On the other hand, the New York _Sun_, edited by a man who was a radical socialist in his youth, and now a bitter, hardened, cruel cynic, although lately a Greenback paper, is as rabid as the New York _Evening Post_ in advocacy of gold and gold only. It says of the latest safety-fund humbug:

“The new bill, like the old one, authorizes an inflation of our paper currency, by at least $550,000,000, without providing for its redemption in gold, and without any effectual provision for diminishing the volume of outstanding legal tender. Our New York financial magnates, who have put up, this year, $116,000,000 in gold, _to save the treasury from suspending gold payments_, ought to bestir themselves in opposition to this latest administration folly, if they would not see all their efforts go for naught and the catastrophe which they have labored to avert rendered inevitable.” [!!]

In Chicago we have Lyman Gage’s plan. Mr. Gage is a man of intellect who resembles some of those orthodox clergymen who, by a long course of theological dissipation, _i. e._, reasoning from false premises, have impaired their naturally fine faculties. Mr. Gage, if we must credit him with sincerity, has come to the same condition by financial dissipation. But his plan is not as vicious as some. To furnish the needed foundation for national bank circulation he would have the treasury issue $250,000,000 of 2½ per cent. bonds, for which greenbacks or Sherman notes should be paid. The money paid would not become an asset of the government. It would be canceled, destroyed, burned up. Of his scheme the Chicago _Times_ well says:

“Like other bankers, he thinks the chief end to be sought is to relieve the government of the duty of issuing the circulating medium of the country. Upon this point we must note an emphatic disagreement with Mr. Gage, and with the whole school of financiers of which he is a type.”

A specimen of the demoralization and danger of the times is seen in a recent statement of Senator Gorman, that he and Quay had settled in their minds that a certain government bond scheme, like that of Mr. Gage, in eight items, including some about silver, was about the only proposition that could pass the present Congress. No. 3 among the eight items coolly dismisses the greenback thus: “The legal tenders to be retired and canceled as the bonds are put out.”

On the other hand, the Chicago _Inter Ocean_, which is repenting of some of its financial sins, and remembering what a good Greenback paper it was in 1878, says:

“One of the perils of the present financial situation is the disposition shown to reopen the greenback question. It took fifteen years to fight the great battle. Secretary McCulloch attempted to take snap judgment against legal-tender notes, paying them off at a rapid rate. Illinois, through one of its Congressmen, E. C. Ingersoll, stepped in the very first day Congress convened after that payingoff process had begun with a resolution which stopped it. Then began the intriguing of the Eastern bankers to destroy the greenbacks, and when the last decisive conflict occurred Illinois was again in the leadership, G. L. Fort being the especial champion of the greenback cause as against both the contractionists and the expansionists. There was a great victory. For half a generation the anti-greenbackers have been quiescent. They have come to the front again with this session of Congress. The knock-out received in caucus Monday ought to satisfy them that the greenback is here to stay. There never could be a better money. It is good for its face the world over. In that uttermost end of the earth, China or Japan, the United States legal-tender note is good for its face value, and, whatever changes are made, that part of our currency should remain intact. Should the current of Congressional events occasion a show of hands in the Republican party on this question, no doubt an overwhelming majority would say, as did the Democratic caucus, let the greenbacks alone.”

An extraordinary scene in the House between Representatives Hepburn and Hendrix so fairly illustrates the muddled stupidity and impudence of the gold-bugs that it deserves notice here as a sign of the situation. Mr. Hepburn described Mr. Hendrix as a self-heralded national banker, who came here with oracular utterances to tell the House what to do. Mr. Hepburn said his self-laudation was impaired by the recollection of his speech sixteen months ago, when the same conditions existed. Mr. Hendrix then found the panacea for all financial ills in the repeal of the Sherman silver law.

Before describing this discussion, attention should be called to the fact that the panic of 1893 was immediately brought on by the bankers because Secretary Carlisle undertook to perform about the only good deed he has ventured upon as Secretary, _i. e._, to pay the Sherman treasury notes according to the letter of the act of July 14, 1890, in silver, _just as France would have done_. Now mark how Hendrix “opened his mouth and put his foot in it,” and how, finally, Hepburn tripped him.

Mr. Hendrix described at some length the process by which the gold was withdrawn by speculators for shipment abroad, and then proceeded to contrast this with the situation in France, where the Bank of France refused to pay, except where actually necessary, more than five per cent. of gold on its demand obligations. These aggressions on our gold reserve must be stopped, and if the pending bill would stop them, afford relief, take the government out of the banking business, as it has been taken out of the silver business, he would vote for it.

“Does the action of the Bank of France, in refusing to pay more than five per cent. in gold,” asked Mr. Hepburn, “impair the credit of that bank?”

“No.”

“Then would the credit of the United States be impaired if the United States should exercise its discretion and redeem the Sherman notes in silver?”

“Yes, I believe it would at this time,” replied Mr. Hendrix.

“Why?”

“Because of the general distrust of the government’s ability to pay in gold. One hundred and fifty-nine million dollars of Sherman gold promises [?] to pay cannot be met without gold.”

“But the notes are redeemable in coin, not in gold,” was Mr. Hepburn’s parting shot.

Mr. Hepburn declared that Mr. Hendrix had pointed out unwittingly the remedy for the present evil when he told the House that the great banking houses of Europe exercised their discretion about depleting their gold vaults. “Why will not the Secretary of the Treasury exercise the same discretion?” he asked, amid a round of applause. “The exercise of this discretion did not impair the credit of European banks. Who dared to say that the credit of this country, with 65,000,000 people behind it, and an unlimited taxing power, would be impaired because it refused to kneel at the demands of the Shylocks?”

“Why have not the Republican Secretaries of the Treasury exercised that discretion?” asked Mr. Pence of Colorado.

“I have not been Secretary of the Treasury,” replied Mr. Hepburn hotly. “When I am I will answer. I am as fully convinced, however, as I am that I am alive, that if the Secretary of the Treasury were now to exercise his discretion and pay gold when legitimate redemptions were asked, and refuse it to sharks and speculators, the evils from which we suffer would cease to be.”

A broader view is that the prime motive of the Secretary in exercising his discretion should be the welfare of the government; and gold should be refused where its payment is likely to hurt the treasury.

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In the foregoing pages we have attempted to give such a bird’s-eye view of American money and finance as would serve as an example and warning for the future. We behold in this short story how our finances were continually run upon the rocks and shoals of a false “political economy,” so-called, and how they were occasionally pulled off—though remaining most of the time stuck fast in the most dismal way.

As to the general aspects of the money question this is added:

Our financial kings have kept two purposes in view. _First_: To have our money issued by and for the special use of private institutions called banks; and to have this money scanty in quantity and of fluctuating value. _Second_: To issue, foster and maintain, by all possible means, bonds and other interest-bearing obligations, as the most convenient means of transferring to the few the product of the industry of the many.

To maintain these humbugs, they use learned language, like doctors writing prescriptions in Latin. All the expert handlers of money, stocks, etc., hate nothing so much as that which is best for the other classes, viz., steady values. Their delight is in ups and downs; and then, if speculators, their effort is to be on the winning side. With brokers, every change is profitable. With them it is: “Heads I win, tails you lose.” Copernicus said of the work of these traitors: “It is not by a blow, but little by little, and through a secret and obscure approach, that it destroys the state.” Further back in the ages Plato, Lycurgus and Solon saw this most plainly.

The new American system of money is plainly and briefly this: Abundant government fiat paper money—founded upon the wealth and credit of a great, stable nation; such money to be kept at a steady purchasing power by the increase and decrease of its volume; and to be quite void of intrinsic value, and quite free from particular commodities as bases for the monetary units.

For the present we wish free coinage of gold and silver at 16 to 1. The ultimate of gold and silver will probably be free coinage for all who bring them to the mints, into suitable coins stamped with their weight and fineness, and returned to the owners to be used as they choose. And no one will lie awake nights for fear the metals will go abroad.

When we get that “honest” fiat paper dollar, nothing will call for an extra session of Congress quicker than any prospect of a change in its purchasing power, after we have once got it to a generally satisfactory point, say about the buying power of our dollar in 1866. While any kind of a change, up or down, suits many gamblers and speculators, the steady increase in the buying power of the dollar, for thirty years past, has been destroying the producers of this country and largely creating the pestiferous breed of millionaires.

The bulk of our money wars have been crowded into the past thirty years. We might call them “Our Thirty Years’ War.” Its history has been utterly, wofully and willfully misrepresented by such pseudo-historians as Sumner of Yale and David A. Wells.

Those years nearly cover the great and little panics of 1837, ’47, ’57, ’60, ’73, ’84, ’85, ’90 and ’93. Vast tomes might be written concerning the manifold causes. One cause has always been foremost in them—scarcity of legal-tender money.

At times our rulers have tried to deceive us by a great show of abundant currency. Such were the fifteen kinds of money thrust upon the nation to confuse it during the civil war, by McCulloch and Sherman.

Why need we here repeat the many-times-told tales of the craft of the national banks, demonetization of silver, the mystery and raised value of gold, Rothschild tricks, the control of our finances and politics by Europe, and the gradual merging of the gold Democrats and Republicans into practically one party?

The bankers’ rebellion of 1881, which conquered President Hayes. The whirling of stock values up two billions then and down again in 1883. The deluge of trusts and syndicates in full tide in 1887. The bogus silver bill of 1890. Cleveland’s object-lesson of ruin and misery in 1893. The counting out of victorious Bryan in 1896. And now the ghostly attempt to bring prosperity by tariff bills and Lyman Gage “currency reform,” while millions of deceived, disappointed, dazed, discouraged, almost maddened Americans suffer all the tortures of poverty.

And the end is not yet.

IV.
THE EIGHT MONEY CONSPIRACIES.

“When I stand in the United States Treasury, I stand on
English soil.”—NATHANIEL P. BANKS.

“HUGH McCULLOCH hamstrung the whole nation. His management of the finances, while it enriched him and made him a great London banker, has cost the American people more than the war did.” These words were uttered by Hon. William D. Kelley, and they are true as gospel. They would be equally true if the name of John Sherman were substituted for that of Hugh McCulloch.

That the constant aim and object of the manipulators of our financial legislation since the war has been to contract the currency and to burden the people with interest-bearing debt, thereby enriching the usurers and impoverishing the producing classes, is evidenced in the following brief summary of the eight principal enactments affecting money which passed Congress since 1861:

1. =The Exception Clause.= (Feb. 25, 1862.) In 1861 and 1862 demand treasury notes to the amount of $60,000,000 were issued by the government and made legal-tender money for all debts, public and private—equal to coin. Wall Street could not gamble in legal-tender paper money; so, as soon as the legal-tender act passed the House and was sent to the Senate, the Shylocks placed on the greenback what is known as the “exception clause”—“Except duties on imports and interest on the public debt.” This practically demonetized the United States treasury note, and cost the producing classes millions of dollars. The greenback “went down,” or, more correctly speaking, gold “went up,” until $1 in paper money was valued at only 37 cents when compared with gold. John Sherman said: “We purposely depreciated the greenback, to get sale for our bonds.” He was willing to destroy the people’s money to appease the greed of gold gamblers at home and abroad.

2. =The National Bank Act.= (Feb. 25, 1863.) This scheme was introduced in the Senate and advocated by John Sherman in the interest of bondholders and capitalists, just one year after legal-tender notes were authorized by law, and before sufficient time had been given to test their utility. The express object was to have the bank notes supersede the legal-tender notes, after the investment of legal tenders in bonds.

“I look upon the national bank, as now recognized by law,” says Myers in his “Money, Its History and Functions,” “as one of the most gigantic schemes for robbing the people ever devised by man. I cannot conceive of a single reason for perpetuating the system one day beyond the time required to settle its affairs. The national banks of this country have cost the people, in thirty years of their existence, over $6,000,000,000. The credit which the banker sells at from 7 to 15 per cent. costs him only 1 per cent. on actual circulation; hence it is virtually a present to him. He draws interest on this credit; on what he himself owes. His note is not money, nor is it in any sense a legal tender between man and man. It is simply a ‘promise to pay.’ The banker _lends his credit_, with which he has supplied himself by gift from the government, and the borrower _pledges his wealth_; the banker being far more secure than the holder of the banker’s paper. The banker takes pay for something he does not furnish; for the capital (wealth) is furnished by the borrower. So the banker gets something for nothing, and the borrower pays for that which he never receives.”

Banks are run on the deposits, rather than on any capital the banker himself may have. The patrons of the bank furnish the capital, and also the security. The banker lends other people’s money to other people; on this he draws interest; he conducts his business on _your_ money and _his_ credit, which _you_ furnish him.

Now, if the government can afford to let the banker have _credit_ at 1 per cent. on actual circulation, why can’t the treasury supply all the people with legal-tender money at the same rate? Why not issue the money direct to the people and then pay interest into the United States treasury, instead of into the coffers of corporate institutions? National banks are expensive luxuries which we don’t need. So let the people unite in demanding their abolition at once, and then institute in their stead United States banks, sub-treasuries if you please, backed by all the people, and hence absolutely safe. This would make a government for the _people_, instead of for the corporations. Let us do business on the credit of the people—on the credit of the government; not, as we are now doing, on the credit of banks and bankers.

3. =The Funding Act.= (April 12, 1866.) Commonly called contraction. This law authorized the Secretary of the Treasury to retire the legal-tender notes by investing them in 6 per cent. bonds. Contraction continued until some $1,500,000,000 were destroyed, and a corresponding amount of 6 per cent. bonds issued. The treasury notes, or legal tenders, were nearly all non-interest-bearing. This reduction of the currency was an outrage upon the people. The volume should have been increased to keep pace with an increasing population. But Shylock must have interest.

4. =The Credit-Strengthening Act.= (March 18, 1869.) This law provided that the legal-tender treasury notes be paid in coin, as also all interest-bearing obligations of the government. Prior to the passage of this law public obligations had been payable _in the lawful money_ of the country; the greenback was lawful money, redeemable the same as gold and silver coin, except duties on imports and interest on the public debt. The credit of the nation was good, and needed no strengthening. The war was over, and the country was prosperous and the people contented. Why, then, add another burden?

5. =An Act Refunding the Public Debt.= (July 14, 1870.) This act authorized the issue and sale of $1,500,000,000 United States bonds, to refund 5-20 bonds and make them conform to the law of 1860. To fund means to put public obligations into stocks and securities, making them interest-bearing.

The public debt should have been paid, as at first provided, in the lawful currency of the country, gold, silver and treasury notes. The law of 1869 added $500,000,000 to the 5-20 bonds, by making them payable in _coin_; then to refund the bonds, just to please English Shylocks, is villainy unnamed and unnameable.

6. =The Demonetization of Silver.= (Feb. 12, 1873.) The act of 1869 had made all public obligations payable in coin, gold or silver; while the act of 1873, clandestinely passed, by omitting the silver dollar from the list of coins enumerated, practically demonetized silver, making the public debt, interest and all, as well as the paper currency, payable in gold coin—a further contraction of the volume of currency.

The silver dollar was created by the Congress of the United States on April 2, 1792, and made the unit of value. It contains 412½ grains of standard silver, nine parts pure silver, one part alloy. At that time the mints of all the principal nations of the world were open to the free coinage of both gold and silver. That is, all of such metal presented to the mints could be converted into money without any charge except the actual cost of coining. The ratio then was about 15½ to 1; that is, one ounce of gold was equal to 15½ ounces of silver. January 18, 1837, the ratio between gold and silver coins of the United States was changed to 15.988 to 1, commonly referred to as 16 to 1.

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.

7. =The Resumption of Specie Payment.= (January 14, 1875.) This law provided for the retirement of the fractional currency ($45,000,000) and the legal-tender treasury notes, their places to be supplied by national bank notes, which are not a legal tender between man and man. The name “specie payment” is simply a blind; it does not mean anything; to get rid of the much despised greenback was the real object of the act. The moneyed aristocracy had long ago confessed their inability to “control” the “greenback as it is called.” Had the provisions of this law been carried out, it would have added to our annual interest charge about twenty millions of dollars.

8. =The Sherman Purchasing Clause.= (July 14, 1890.) This act was a miserable makeshift or substitute for a free coinage bill. It provided for the purchase of not less than 2,000,000 nor more than 4,500,000 ounces of silver bullion per month, 2,000,000 ounces of which was to be coined each month into silver dollars until July 1, 1891. Instead of redeeming the treasury notes issued in the purchase of silver with their equivalent in silver, upon the demand of the holder, the Secretary of the Treasury was required to redeem these notes in gold or silver coin at his discretion. The legal-tender power of the silver dollar was modified so as to read: “Except otherwise expressly stipulated in the contract.” In 1893 President Cleveland called Congress together in extraordinary session to consider the financial condition of the country. November 1, 1893, the Sherman law was repealed, leaving us on a single gold basis.

V.
FINANCIAL AUTHORITIES.

“Above all things good policy is to be used, that the
treasures and money of the state be not gathered into a few
hands; for, otherwise, a state may have great stock and yet
starve. And money is like muck, not good unless spread. This
is done by suppressing, or at least keeping a strait hand
upon the devouring trade of usury, engrossing, great
pasturages and the like.”—BACON.

THE following is a carefully prepared collection of quotations from the writings and speeches of eminent statesmen, jurists, financiers and economists, ancient and modern, foreign and American. It will be found not only interesting and instructive to the casual reader, but of extreme value to the student for reference:

_Alexander Hamilton_ (report on the mint, 1791): “To annul the use of either of the metals as money is to abridge the quantity of the circulating medium. It is liable to all the objections that arise from a comparison of the benefits of a full with the evils of a scanty circulation.”

_Benjamin Franklin_, April 3, 1792 (Jared Sparks, page 255): “Want of money in a country reduces the price of that part of its products which is used in trade. A plentiful currency will occasion the trading produce to bear a good price.”

Page 185 of his autobiography (speaking of his pamphlet on “The Nature and Necessity of a Paper Currency,” for the purpose of increasing the circulation): “It was well received by the common people in general, but the rich men disliked it, for it increased as well as strengthened the clamor for more money. The utility of this currency by experience became so evident as never to be much disputed, so that it grew soon to be £55,000, and in 1879 to £80,000, since which it rose to £350,000, trade, buildings and inhabitants all the while increasing.”

_Daniel Webster_: “A contraction of the currency, even if not sudden, contracts business, discourages enterprise and restrains the commercial spirit. A sudden contraction aggravates these circumstances.”

_Henry Clay_ (debate on the sub-treasury, 1840): “The proposed substitution of an exclusive metallic currency to the medium with which we have been so long familiar is forbidden by the principles of eternal justice. Assuming the currency of the country to consist of two-thirds paper and one of specie, and assuming, also, that the money of a country, whatever may be its component parts, regulates all values, and expresses the true amount which the debtor has to pay his creditor, the effect of the change upon that relation, and upon the property of the country, would be most ruinous. All property would be reduced in value to one-third of its present nominal amount, and every debtor would, in effect, have to pay three times as much as he had contracted for. The pressure of our foreign debt would be three times as great as it is, while the six hundred millions, which is about the sum now probably due to the banks from the people, would be multiplied to eighteen hundred millions!... A man, for example, owning property to the value of $5,000, contracts a debt of $5,000. By the reduction of one-half of the currency of the country, his property in effect becomes reduced to the value of $2,500. But his debt undergoes no corresponding reduction.... But if the effect of this hard money policy upon the debtor class be injurious, it is still more disastrous, if possible, on the laboring classes.... Of all the subjects of national policy, not one ought to be touched with so much delicacy as that of the wages—in other words, the bread—of the poor man. In dwelling, as I have often done, with inexpressible satisfaction, upon the many advantages of our country, there is not one that has given me more delight than the high price of manual labor. There is not one which indicates more clearly the prosperity of the mass of the community....

“The revulsions of 1837 produced a far greater havoc than was experienced in the period above mentioned. The ruin came quick and fearful. There were few that could save themselves. Property of every description was parted with at sacrifices that were astounding, and as for the currency, there was scarcely any at all. In some parts of the interior of Pennsylvania the people were obliged to divide bank notes into halves, quarters, eighths, and so on, and agree from necessity to use them as money. In Ohio, with all her abundance, it was hard to get money to pay taxes. The sheriff of Muskingum County, as stated in the Guernsey _Times_, in the summer of 1842, sold at auction one four-horse wagon at $5.50; ten hogs at 6¼ cents each; two horses (said to be worth from $50 to $75 each) at $2 each; two cows at $1 each; a barrel of sugar at $1.50, and a store of goods at that rate. In Pike County, Missouri, as stated by the Hannibal _Journal_, the sheriff sold three horses at $1.50 each; one large ox at 12½ cents; five cows, two steers and one calf, the lot at $3.25; twenty sheep at 13½ cents each; twenty-four hogs for 25 cents for the lot; one eight-day clock at $2.50; a lot of tobacco, seven or eight hogsheads, at $5; three stacks of hay at 25 cents each.”

_Horace Greeley_ (“Political Economy,” page 65): “They [false economists] assume that if half the money in a country leaves it for goods imported, the residue will perform the functions previously devolved on the whole, save only that there will be a general reduction of prices. I, on the contrary, issue an appeal to the experience of mankind to sustain me that in such cases the remainder, so far from subserving the end formerly answered by the larger volume of currency, will not even subserve half of it, for it will all but cease to circulate at all.... In its absence the people will quite generally be driven back to barter, a discouragement of industry and a long stride on the downward road to barbarism.”

_Treasurer Spinner_ (that portion of his report for December, 1873, which was suppressed by President Grant): “When ... legitimate money becomes more and more abundant, credits are asked for and given on shorter and shorter time, until the time comes when there is money sufficient to transact all the legitimate business and to effect all necessary exchanges of the merchantable commodities of the country; then private credits will be almost entirely unknown, as will commercial revulsions and consequent panics.... Inflation can only be when the people are excessively in debt. Such is not the position when money is plentiful; for when money is plentiful people get out of debt and acquire habits of promptness, punctuality, and pay as they go.”

_George S. Coe_ (“Financial History of the War”): “As the war progressed and the country became poorer, the currency increased. It is strange that all other property was eagerly sought for in preference to this, and that prodigal expenditure became the law of the land.”

_Report of George S. Coe, John J. Knox, James Harsen Rhoades and W. P. St. John_ (committee of New York Chamber of Commerce, 1891): “The enlarged volume [of legal-tender money], besides disturbing the equitable relations of men to each other, at once adjusts itself to the prices of all commodities and relatively enhances their cost, so as to absorb at once whatever advances their cost.... This is why thoughtful men see in any issue of legal-tender notes the way to inevitable destruction.”

_Robert G. Ingersoll_: “We have passed through a period of wonderful and unprecedented inflation. For years every kind of business has been pressed to the very sky line. A wave of wealth swept over the United States. Tatters became garments and garments became robes. Walls were covered with pictures, floors with carpets, and for the first time in the history of the world the poor tasted all the luxuries of wealth. But monopoly changed that paradise into hell by creating a money famine.”

_John J. Ingalls_: “No people in a great emergency ever found a faithful ally in gold. It is the most cowardly and treacherous of all metals. It makes no treaty it does not break; it has no friend it does not sooner or later betray. In times of panic and calamity, shipwreck and disaster, it becomes the agent and minister of ruin. No nation ever fought a great war by the aid of gold. In the crisis of the greatest peril it becomes an enemy more potent than the foe in the field.... In our own civil war it is doubtful if the gold of New York and London did not work us greater injury than the powder and lead and iron of the rebels. It was the most invincible enemy of the public credit. It was in open alliance with our enemies the world over, and all its energies were evoked for our destruction. But, as usual, when danger has been averted and the victory secured, gold swaggers to the front and asserts supremacy.”

_Hugh McCulloch_, Secretary of the Treasury (1866): “The process of contracting the circulation of the government notes should go on just as rapidly as possible without producing a financial crash.”

_John A. Logan_ (Feb. 17, 1874): “You may theorize and argue to the farmers until you are hoarse, and you will fail to get them to prefer low prices to high ones for their products.... The people have and do realize that their most prosperous times were when currency was the most plentiful....

“I can see the people of our Western States, who are producers, reduced to the condition of serfs to pay interest on public and private debts to the money sharks of Wall Street, New York, and of Threadneedle Street in London, England. And this will be accomplished by withdrawing the treasury notes from circulation, and destroying them until the banks can control the entire volume of money.... It was the contraction and increased want of currency, and not a superabundance, which produced the necessity for running in debt.

“Falling prices and misery and destruction are inseparable companions. The disasters of the dark ages were caused by decreasing money and falling prices. With the increase of money labor and industry gain new life.

“I can see benefit only to the money-holders and those who receive interest and have fixed incomes. I can see, as a result of this legislation, our business operations crippled and wages for labor reduced to a mere pittance. I can see the beautiful prairies of my own State and of the great West, which are blooming as gardens, with cheerful homes rising like white towers along the pathway of improvement, again sinking back to idleness. I can see mortgage fiends at their hellish work. I can see the hopes of the industrious farmers blasted as they burn corn for fuel, because its price will not pay the cost of transportation and dividends on millions of dollars of fictitious railway stocks and bonds.”

_Preston B. Plumb_ (Senate, April, 1880): “The contraction of the currency by 5 per cent. of its volume means the depreciation of the property of the country three billions of dollars.”

_The Chicago Tribune_ (1878): “Straight along for four and a half years the dollar has grown dearer and larger, the debts heavier and harder to pay, and the value of property has withered; business has been done at a continual loss. Real estate—lands, lots and improvements, the foundation of all wealth—has gone down year after year in value, while the mortgages have devoured it, wiping out equities and all that had been paid thereon, and annihilating multitudes of fortunes.”

_President Grant_ (message, 1870): “Immediate resumption, if practicable, is not desirable. It would compel the debtor class to pay beyond their contracts the premium on gold at the date of their purchase and would bring bankruptcy and ruin to thousands.”

Message of 1873: “The experience of the present panic has proven that the currency of the country, based as it is upon its credit, is the best that has ever been devised.

“To increase our exports, sufficient currency is required to keep all the industries of the country employed. Without this, national as well as individual bankruptcy must ensue....

“Prices keep pace with the volume of money.”

_John Sherman_ (1869): “The contraction of the currency is a far more distressing thing than Senators suppose. Our own and other nations have gone through that process before. It is not possible to take that voyage without the sorest distress. To every person except a capitalist out of debt it is a period of loss, of danger, lassitude of trade, fall of wages, suspension of enterprise, bankruptcy and disaster.”

_William D. Kelley_ (House of Representatives, Jan. 3, 1867): “The experiment [on contracting the currency], if attempted as a means of hastening specie payments, will prove a failure, but not a harmless one. It will be fatal to the prospects of a majority of the business men of this generation, and strip the frugal laboring people of the country of the small but hard-earned sums they have deposited in savings banks. It will make money scarce and employment uncertain. It will increase the purchasing power of money, and by thus unsettling values will paralyze trade, suspend production and deprive industry of employment. It will make the money of the rich man more valuable and deprive the poor man of his entire capital, the value of his labor, by depriving him of employment. Its final effect will be widespread bankruptcy.”

_Toledo Blade_ (May 17, 1877): “In financial crises the thing men want is money; that which everybody must receive in payment of debt or forever thereafter forego all claim of interest thereon. What men want in such seasons of panic and distress is that which will pay a note in a bank, will meet the exactions of government, will avert the sacrifice of homestead, warehouse or other property by sheriff’s or marshal’s sale; which, being money, will, when tendered in payment, arrest such proceedings.... The existence and inflexibility of the law are indisputable. If the volume of money is increased creditors complain that the prices of commodities are further enhanced.”

_George William Curtis_ (_Harper’s Weekly_, July, 1877): “There can be no doubt that as the volume of money decreases the purchasing power increases.... It is unquestionably true that it is a maxim of money that the increase of its volume decreases and the decrease increases the purchasing power of the unit.... It may be a fair question whether the demonetization of silver did not increase the value of gold.”

_Thomas Ewing_ (November 22, 1877): “No greater wrong can be inflicted on the people by government than a contraction of the volume of the currency. The prices of commodities, whether land, product or labor, are determined absolutely by the effective volume of the currency. An increase of the volume raises the price of commodities.”

_James G. Blaine_ (House, February 7, 1878): “The destruction of silver as money and establishing gold as the sole unit of value must have a ruinous effect on all forms of property except those investments which yield a fixed return in money. These would gain an unfair advantage over other species of property.”

_James A. Garfield_ (1880): “Whoever controls the volume of currency is absolute master of the industry and commerce of the country.”

_Senator Mills_, of Texas (House, February 3, 1886): “But the crime that is now sought to be perpetrated on more than fifty millions of people comes neither from the camp of a conqueror, the hand of a foreigner, nor the altar of an idolator. It comes from the cold, phlegmatic marble heart of avarice—avarice that seeks to paralyze labor, increase the burden of debt, and fill the land with destitution and suffering to gratify the lust for gold—avarice surrounded by every comfort that wealth can command, and rich enough to satisfy every want save that which refuses to be satisfied without the suffocation and strangulation of all the labor of the land. With a forehead that refuses to be ashamed it demands of Congress an act that will paralyze all the forces of production, shut out labor from all employment, increase the burden of debts and taxation, and send desolation and suffering to all the homes of the poor.”

_Leland Stanford_ (Senate, March 10, 1890): “An abundance of money means universal activity, bringing in its train all the blessings that belong to a constantly employed, industrious, intelligent people.... Abundant and cheap money places the power in the hands of the industrious.... Cheap and abundant money means co-operation of labor to an extent hitherto unknown.... Would go far towards aiding his [labor’s] intelligence, toward realizing his highest destiny. It seems to me that the great thought of humanity should be how to advance the great multitude of toilers, increase their power of production and elevate their condition.... To me one of the most effective means of placing at man’s disposal the force inherent in the value of property is through furnishing a bountiful supply of money.... If money were suddenly annihilated from all business affairs there would be a general suspension of business all over the country. It is the duty of statesmen to furnish the means, if possible, to find out the way by which the Creator’s design for the highest advance of civilization is to be obtained. Want, discomfort and misery are not necessarily the heritage of the industrious and provident man. So far as I can ascertain, no government has ever attempted to furnish an adequate supply of money or establish any standard by which its want could be ascertained.”

_John G. Carlisle_ (in the House, February 21, 1878): “According to my views of the subject the conspiracy which seems to have been formed here and in Europe to destroy by legislation and otherwise from three-sevenths to one-half the metallic money of the world is the most gigantic crime of this or any other age. The consummation of such a scheme would ultimately entail more misery upon the human race than all the wars, pestilences and famines that ever occurred in the history of the world. The absolute and instantaneous destruction of half the entire movable property of the world, including houses, ships, railroads and other appliances for carrying on commerce, while it would be felt more sensibly at the moment, would not produce anything like the prolonged distress and disorganization of society that must inevitably result from the permanent annihilation of one-half the metallic money of the world.”

_John G. Carlisle_ (speaking for the Bland bill, 1878): “It will reverse the grinding process that has been going on for the last few years. Instead of constant and ruthless contraction, instead of constant appreciation of money and depreciation of property, we will have expansion to the extent of at least $2,000,000 a month, and under its influence the exchangeable value of commodities, including labor, will soon begin to rise, thus inviting investments, infusing life into the dead industries of the country, and quickening the pulsations of trade in all its departments.”

_Secretary Windom_ (Jan. 31, 1891): “The ideal financial system would be one that should furnish just enough absolutely sound money to meet the legitimate wants of trade, and no more. Had it not been for the peculiar condition which enabled the United States to disburse over seventy-five million dollars in about two and a half months last autumn, I am firmly convinced that the stringency in August and September would have resulted in widespread financial ruin.”

_Chauncey M. Depew_: “Fifty men can paralyze the whole country, for they can control the circulation of the currency, and create panic whenever they will.”

_Hon. G. G. Symes_, of Colorado (commenting on the demonetization of silver): “There would be truly enough money to do the business after the shrinkage of prices and the financial disasters. For the new order of things and basis of values there would still be gold enough to carry on the business. It would only require one-half after the new condition and basis was reached. The monometallists, then, would still argue that gold was not scarce.”

_Henry Clews_, Wall Street financier (March 16, 1895): “Wall Street keeps a quick eye upon the prospects of the suggested international silver conference. It sees in the adoption of a world-wide policy of bimetallism the certainty of a material increase in the metallic money of the commercial nations, and assumes that, in such case, there would be a general rise in values and a consequent speculative boom of wide dimensions.”

_Franklin H. Head_, of Chicago (business man): “That an increase in the quantity of money reduces prices, and a diminution lowers them, as stated by Mill and other economic writers, is the most elementary proposition in the theory of currency, and without it we should have no key to any of the others.”

_Amasa Walker_, of Massachusetts: “Other things being equal, the amount of currency in circulation determines the prices of everything that is for sale; and these are increased or diminished as the volume of the currency is increased or diminished.”

_A. B. Hepburn_, of the United States Treasury (_Forum_, 1894): “When credit is withheld a money stringency is easily created.”

_Prof. William G. Sumner_, of Yale (“History of American Currency,” page 205): “In 1872 this issue was forced out of between forty and fifty million, reducing a redundancy and enhancing retail prices.” Page 211: “The war being ended, the financial question took this form: ‘Shall we withdraw the paper, recover specie, reduce prices, lessen imports and live economically until we have made up the waste and loss of war? Or shall we keep paper as money?’ Mr. McCulloch proposed to contract inflated paper and pursue the former alternative.” Page 221: “The whole story goes to show that the value of paper currency depends upon its amount.” Page 329: “If, therefore, a nation has a specie currency, a drain upon it by an adverse balance of trade, a foreign payment, or any other similar cause, would immediately produce a lowering of prices and a return of current specie until the natural level was once more restored.”

_Prof. Francis A. Walker_, Yale (“Money,” page 57): “The value of money in any country is determined by the quantity existing. Its power of acquisition depends not upon its substance, but upon its quantity.... That prices will fall or rise as the volume of money be increased or diminished is a law that is unalterable as any law of nature.” Page 210: “Gold and silver undergo great changes of value and become in a high degree deceptive. Prof. Jevons estimates that the value of gold fell, between 1789 and 1809, 45 per cent.; from 1809 to 1849 it rose 145 per cent., while in the twenty years after 1849 it fell again at least 30 per cent.... When the process of contraction commences the first class on which it falls is the merchants of the large cities; they find it difficult to get money to pay their debts. The next class is the manufacturer; the sale of his goods at once falls off. Laborers and mechanics next feel the pressure; they are thrown out of employment. And lastly the farmer finds a dull sale for his produce.”

_Robert Ellis Thompson_, M. A., University of Pennsylvania (“Political Economy,” page 151): “The influx of money into a progressive country is one of the most powerful promoters and increasers of production. When it is plenty all sorts of productive work is stimulated. Labor is the master of capital, and industrial enterprise gains a more than proportionally large return for its outlay.” Page 209: “The possession of a large quantity of money enables any country to organize its industries upon such a scale as to carry its division of labor to such perfection as will bring down the prices of all the products of industry, while affording a larger return to both capitalist and laborer. It therefore makes such a country a cheap place to buy in, mainly because of that accumulation of money which was to make everything dear.”

_Professor Thompson_ (“Political Economy”) quotes Thomas Tooke, page 208: “If money has increased, industry and trade are increased.... If iron and cotton are scarce, those who need them suffer by the scarcity, but it has no effect upon the prices of other materials. If, on the other hand, money is scarce, the price of everything else is affected. Every one must make exchanges, just as when the water falls in the rivers traffic is interrupted because the vessels are aground.”