Ideas for a Science of Good Government
1883

by Hon. Peter Cooper, LL.D.

COIN AND PAPER CURRENCY.



ADDRESS AT THE CONVENTION OF THE NATIONAL PARTY,
CONVENED IN BOSTON, 4TH OF JUNE, 1879.


FELLOW CITIZENS :  We have met in Convention to consider one of the most important questions, that can engage the attention of the American people ;  it is the question—“ What share shall the people have in the fiscal Government and the Moneyed Institutions of this Republic ?”  It is not too much to say, that it is now not only the most important question, but the only question, next to that of the right of the people to universal and free education, which is left to be decided, in order to secure the final objects of the Constitution, which puts into the power of the people of this country all legislation and all authority.  The objects are, as stated in the preamble of that Constitution—“ To establish justice, insure domestic tranquility, provide for the common defence, promote the general welfare, and secure the blessings of liberty to ourselves and posterity.”

These objects can never be obtained, while general ignorance and general poverty prevail.

It is not how rich the general resources of a country may be, or how wealthy, learned and intelligent certain classes are, that make the happiness and prosperity of the people ;  but it is the just diffusion of the wealth and advantage, which the common country, common industry, and the general powers of the people produce.  Monopolies of all kinds must be at the expense of the people and the happiness of the whole nation.  Let us then always turn to the spirit, as well as the letter of our Constitution, in discussing all public questions.

Nothing can be more self-evident than the fact, that the framers of the Constitution intended by its preamble, that every law which is passed, should be in conformity with its requirements, and have for its object the establishment of justice as the only possible means, by which the general welfare of a nation can be effectually promoted.

It will be remembered by all, who have read what I have written in relation to a National Currency, that I have uniformly contended, that the provision of the Constitution, which declares, that Congress shall have the power “ To levy and collect taxes, duties, imposts and excises ;  to pay the debts and provide for the common defence and general welfare of the United States,” is all that is needed to authorize Congress to issue Treasury Notes, and make them receivable for all forms of taxes, duties and debts.  If such a course of national policy had been adopted (instead of a national money with a part of its purchasing power repudiated by an act of Government), it would have lessened the cost of the civil war to one-half the amount, and would have saved our country from the paralyzed condition, through which it has been compelled to pass.

I have uniformly endeavored to show, that our General Government holds the only power, authorized to coin the money of the country, and regulate the value thereof ;  whether it be coined out of gold, silver, copper, nickel, or paper, and that nothing can be legal money without the stamp of the Government on it.

In all that I have written on the subject, I have endeavored to adopt the broadest principles, that conduce to the peace and happiness of my country, without regard to party lines or party affiliations.

I think, that the neglect of our several administrations to make laws, that shall properly regulate the currency, both in volume and value, has been a greater cause of demoralization, want and misery among the mass of the people, than all other causes combined.

The American people have a right to demand of their Government a substantial reason for having taken from them their money, used by them for years as the currency of the country without cost to the Government.  Our present Secretary of the Treasury declared in the Senate that “every citizen of the United States had conformed his business to the clause of the law regulating the currency of the country.”

I believe it will be impossible for our Government to show a good reason for having taken from the people their circulating notes, possessing (as the late Secretary McCulloch stated at the banquet, given by the New York Chamber of Commerce) “all the legal attributes of money.”  The Secretary at the same time said, that, “ In the very year, in which the war was closed, the reduction of the debt was commenced, and the reduction has been steadily continued, to the amazement of foreign nations.”

This debt, so called, was also “ the credit of a great nation, cut up into small pieces and circulated as money;”  as was well said by Secretary Chase.  What shall we think of the administration of a Government, expressly designed, “ by the people and for the people,” that should turn their circulating credit and their real money, into a debt which stops that circulation, vital as it is to the trade and prosperity of this people, and makes it a burden of bonds and taxes on their industry ?

It will be equally impossible to show a good reason for having taken from the people their fractional currency, which was costing the Government nothing, and supplying its place with a more inconvenient currency, at the cost of thirty-two millions of dollars, added to the National debt.

The amount, already paid by the people as interest on the National debt, apart from any payments on account of the principal, is already one thousand, two hundred and twenty-four millions of dollars.

I have long been compelled to believe, that all that is now or ever has been required to secure permanently, is a safe deposit for all the unoccupied moneys of the country, and an ever strengthening bond of National union, as well as the best currency, that our country or the world ever saw, will be for the Government to do now, what should have been done at the close of the civil war,—and at the close of the war of Revolution against England—namely, to make the people’s money, found in circulation at the close of the war the sole money of the country, and the unflactuating measure of all values, receivable for all forms of taxes, duties and debts, and interconvertible with the interest-bearing bonds of the Government, which should bear an equitable but low rate of interest.

It should be remembered, that all this shrinkage of our currency was made, while the Government was being compelled to disband more than a million of soldiers, and turn some four millions of emancipated slaves houseless and homeless on the community to find employment, food and shelter, or to starve.

In conclusion, Fellow Citizens, I shall leave the full discussion of this National question to those, specially invited for that purpose.  I wish merely to express to you my profound sympathy and clear convictions in the cause, for which we are assembled.

I hope, that the intelligence and education of Massachusetts, which stand foremost among the States, will be brought to bear on this great national question—How can we, as a Republican and a free people, control the Financial Institutions and the policy of this Government in the interest and prosperity of the whole people ?

It is evident, that some fatal errors have been committed, some where, by which want, ruin and distress have been introduced, where before was prosperity, abundance and full employment for the enterprise and industry of this nation.

Individuals may suffer from extravagance, over-trading or over-production ;  but how can a whole nation have its joy and prosperity turned into mourning, but by the fatal errors of its ruling classes, which make the laws, and can thus mete out injustice and dry up the resources of a nation by rapacity and greed of gain, instead of diffusing happiness, education and freedom among the people.

Misgovernment and the faults of the ruling class have always proved in history the trouble and sorrow of nations.  All the responsibility of a nation’s happiness, which may depend on a people’s laws and administration, must rest upon those, who are, for the time, the law making and administrative class.

Though the influences, that are now working against the rights of labor and the true interests of a Republican Government, are insidious and concealed under plausible reasons, yet the danger to our free institutions, now, is no less than in the inception of the rebellion, that shook our Republic to its centre.  It is only another oligarchy, another enslaving power, that is asserting itself against the interest of the whole people.  There is fast forming in this country an aristocracy of wealth—the worst form of aristocracy, that can curse the prosperity of any country.  For such an aristocracy has no country—“ absenteeism,” living abroad, while they draw their income from the country, is one of its common characteristics.  Such an aristocracy is without soul and without patriotism.  Let us save our country from this, its most potent, and, as I hope, its last enemy.  I beseech you, fellow-citizens, to consider well what the crisis of the country demands of you, not losing sight of the fact, that there are great wrongs which must be righted in the administration of the finances of this country for the last twelve years.  Old issues of North and South are, in a great measure, passing away, but there is no section of our common country, that needs so much the reviving influence of an abundant and a sound currency, as the South.  The Southern people have the finest natural resources, that our country affords ;  every facility for manufacture—the material, labor and water-power indefinite.  They need only money, wisely distributed among its working and enterprising population, for their work and their enterprise, which may draw out the money, and put it to the best use.  It was well said, lately, by one of the Southern statesmen, that the “ Government had impoverished, discomfited, and crushed the South more by its financial policy, since peace was declared, than by its arms during the whole war of Rebellion !

If the people can look for no relief from the present Congress and Administration—if those, who now sway the financial interests of the country cannot see their great opportunity—then new men must be chosen by the people, whom they can trust to make laws, and execute measures, that “ shall secure the blessings of liberty to themselves and their posterity.”

I will close my remarks by a quotation from a speech of Daniel Webster.  He declared that “ The producing cause of all prosperity is labor, labor, labor.  The Government was made to protect this industry, and to give it both encouragement and security.  To this very end, with this precise object in view, power was given to Congress over the currency and over the money of the country.”




LETTER TO HIS EXCELLENCY R.B. HAYES.


HONORED SIR :  Allow me to assure you, that nothing short of a most profound anxiety for the nation’s welfare could induce me, in this eighty-ninth year of my age, to make another effort to call and fix your attention on the unmeasured importance of the facts, that my former letters were intended to press on your immediate consideration.

Your effort to secure for our country a “ civil service,” as a means to obtain honesty and capacity in all places of public trust, is a matter of vital importance to all the best interests of our common country.

You will recollect how ardently I expressed to you my thanks in my first letter, for the wise and patriotic course you had then adopted in the discharge of the delicate and difficult duties, that you were called upon to perform.  The interest you had then manifested in the nation’s welfare, had sent a thrill of hope and joy into the hearts of suffering millions throughout the whole country.  They were then looking to you with an anxious hope, that you would most urgently declare and insist, that all officers, in every department of Government, are bound by the solemnity of their oath, of office to have for their object, in every legislative act, the establishment of justice, by the organization and the execution of Constitutional laws, as that is the only sure means, by which domestic tranquility can be secured, and the nation’s welfare be surely and effectually promoted.

Instead of having legislation to establish justice, it now appears by the laws passed, that nearly the whole course of financial legislation, since the close of the Rebellion, has been so manifestly cruel and unjust, that it seems impossible to frame an apology for those, who have taken an active part in framing and passing laws so directly in violation of the very letter and spirit of a Constitution, that has in the fewest possible words covered the whole field of a nation’s wants.  The Preamble declares “ That we, the people, in order to establish justice, secure domestic tranquility, provide for the common defence, PROMOTE THE GENERAL WELFARE, and secure the blessings of liberty for ourselves and our posterity, do ordain this Constitution for the people of these United States.”

To show the danger, that must result to the American people by continuing to allow our present system of National Banks, authorized as they are, to issue paper “ promises to pay ” gold and silver on demand, when they should have always been compelled to bank on national fiat money, made receivable on a par with gold and silver at its present value, weight and fineness, let us refer to the founders of our Constitution, etc. . . .

I am at a loss to see how it could have been possible to obtain such a course of financial laws as those, that have been passed, commencing, as they did, by paying out paper money to circulate as legal dollars, and then, by an act of Congress, took from the people’s legal money its power to pay duties on imports or interest on bonds.

The bankers and dealers in gold were not satisfied with the privilege of buying bonds, made payable in currency at half their face value, with the right to deposit said bond with the Government, who agrees to receive (said bond) and pay interest on the same at its face value, and give bankers $90,000 and interest on $100,000, in good money, guaranteed by the Government, to enable them to carry on National Banks.

The bankers were not satisfied with receiving interest on the value of their bonds in currency.  They obtained an invalidating law, that made the bonds, that were originally issued to be paid in currency, made payable in coin.  Another act made the coin to mean gold, and another act relieved the gold bond from bearing any part of the public burden of taxation by either State or Nation.

Not satisfied still, the Government has taken from the people their small currency, that was costing them nothing, and has given in exchange a less convenient currency, that has now bound the people to pay interest on some fifty millions of dollars, at four per cent. quarterly, for thirty years.

The money powers of our own and other countries persuaded our Government to demonetize silver, when it was known to be a large product of our own country, and, at the time, some three per cent. more valuable than gold.

The most cruel of the laws, that have peen passed, was the one that took from the people their money, made legal by all the forms of law, known to our Government.

That money had been allowed to circulate as legal dollars in the pay of the soldier, the sailor, the farmer, mechanic and merchant, in exchange for all forms of labor and property, purchased by the Government, and consumed in the prosecution of the war.  That money had become the lifeblood of the trade and commerce of the country.

When the war ended, the exact amount, found in circulation, was known, and that amount should have been declared the permanent unfluctuating measure of all values for all coming time, and never allowed to be increased or diminished, only as per capita with the increase or diminution of the inhabitants of our country.

It was the nation’s currency, such as France issued and received for all taxes, duties and debts throughout its desperate struggle for that nation’s life.  The French Government, instead of taking from their people the paper money, as soon as the German war was ended ;  instead of contracting their currency as our Government has done, the French Government added some 250 millions more to their paper circulation, and in addition to that great increase of their paper money, their Government authorized temporary loans to be made on goods by all principal cities of France.  This wise and just policy saved France from the terrible consequence of a panic like that, which was brought on our own country by an unjust and unwise contraction of our nation’s currency—a policy, that brought wretchedness and ruin to the homes of millions.

That truly wise and just policy of France has carried that country to a pinnacle of greatness among the nations of the Earth ;  while the policy of our Government is rapidly producing a money power fearful to contemplate.

Thomas Jefferson declared a most important truth, that should never be forgotten.  He says that “the power to issue Treasury Notes bearing or not bearing interest, is a fund that can never fail.”

It was unfortunate for our country, that the advice of Thomas Jefferson could not have been taken, when he said, “ bank paper must be suppressed, and the circulating medium must be restored to the people to whom it belongs.”  He wisely declared, “that it is the only fund, on which Government can rely for loans.  It is the only resource, which can never fail them, and it is an abundant one for every necessary purpose.”  Had the advice of Jefferson, Franklin, Calhoun and Webster been taken, the cost of our late war would have been not more than half the amount, that was expended, and our country would have been saved from the disgrace of selling its bonds for forty or fifty cents on the dollar.

When I was last in Washington, in conversation with Mr. Evarts, I said to him, that “I believed the time had come, when this great American question of national finance must be settled, and that it must be settled in the interest of the great mass of the American people, and not in the interest of the moneyed classes, as it is now.

I am glad to find that those, who are striving to drive our country back into the “ barbarism” of a metallic basis for currency, are fast giving way for want of argument.  It is being discovered, that all the great writers, who have analyzed the subject, and have viewed it from a scientific standpoint, come to the conclusion, that paper money is superior to metal for a currency.  Even Ricardo, the bullionist, allows this.  He says, that a “ regulated paper currency is so great an improvement in commerce, that I would greatly regret, if prejudice should induce us to return to a system of less utility.”

The following resumé, found in a late paper, expresses my opinions on the whole subject of our national finances :


“ THE TRUE FINANCIAL SYSTEM.


“ 1st.  The Government should issue all the currency, that is used by the people, whether it be gold, silver or paper, and it should all be made a legal tender for ALL debts, public and private.

2d.  The coinage of both gold and silver should be unlimited, and the Government should coin all the gold and silver bullion it can procure, and coin without loss.

3d.  All surplus currency, now in the Treasury, should be used to cancel bonds, and thus stop interest on the same.

4th.  Government paper should be substituted for natural bank notes.

5th.  The Government should secure to the people the same volume of money, with which to pay their debts, that was in circulation, when those debts were contracted.

Government postal savings banks should be established in all our large cities and villages, where the surplus money of the people can be deposited :  and the money, thus deposited, should be used by the Government to cancel the public debt and to promote such public improvements, as would be of value to the whole people.”

All these invalidating financial laws were passed in direct opposition to the warning advice, given by your present Secretary, Sherman, when in the Senate, 1869.  He then described, in language never to be forgotten, the scenes of misery and ruin, that would come upon our country, as a consequence of taking away from the people the legal money they had received in payment for all the labor and property they had passed into the possession of the Government, in exchange for the legal dollars they had received.  Secretary Sherman was right, when in the Senate, 1869, he declared that “every citizen in the United States had conformed his business to the legal tender clause of the law, regulating the currency of the country.”  He declared that, “ the appreciation of the currency is a far more distressing operation than Senators supposed.” He then stated :

“ It is not possible to take this voyage without the sorest distress to every person, except a capitalist out of debt, or a salaried officer or annuitant.  It is a period of loss, danger, lassitude of trade, fall of wages, suspension of enterprise, bankruptcy and disaster.  To every railroad it is an addition of one-third to the burden of its debts, and more than that deduction to the value of its stock. * * * It means the ruin of all dealers, whose debts become twice their (business) capital, though one-third less than their actual property.  It means the fall of all agricultural productions, without any great reduction of taxes.  What prudent man would dare to build a house, a railroad, a factory, or a barn with the certain fact before him, that the greenbacks he puts into his improvement, will in two years be worth thirty-five per cent. more than his improvement is worth.  When that day comes all enterprise will be suspended, every bank will have contracted its currency to the lowest limit, and the debtor will be compelled to meet in a coin debt, contracted in currency ;  he will find the coin hoarded in the Treasury, no adequate representation of coin in circulation, his property shrunk, not only to the extent of the appreciation of the currency, but still more by the artificial scarcity made by the holders of gold. * * * To attempt this task by a surprise on our people, by arresting them in the midst of their lawful business, and applying a new standard of value to their property, without any reduction of their debts, or giving them an opportunity to compound with their creditors, or to distribute their losses, would be an act of folly without an example of evil in modern times.”

Secretary Sherman’s whole speech in the Senate was intended to show, that a nation’s currency could not be contracted without bringing ruin on the debtors and on the laboring classes throughout our country.

In my late appeal to all legislators and religious teachers, I have demonstrated a fact, that cannot be disproved, viz., that all the legal money, paid out by the Government for labor and property during the war, was, beyond all controversy, the PEOPLE’s MONEY.  The money, having been wrongfully taken from the people, must in order to establish justice, be given back to them in the purchase of all the outstanding interest-bearing bonds of the Government, in exact accordance with the law, under which they were issued.

By this plan a partial justice can be established, and the general welfare of the nation can be surely and effectually promoted.

This plan will return to all the original holders of Government bonds nearly double the amount in the same kind of legal money, that was paid for the bonds at the time they were first issued.

The nearest possible approach, that can be made to the establishment of justice in the regulation of the currency, would be to pay off the national debt, in strict accordance with the requirements of the law, under which it was contracted, by an issue of legal tender money, which would stop the interest of so much debt and have one form of money for ALL PURPOSES throughout our country.  The advantages of paying off the national debt in legal money, would be many and great.  It would throw back the money, wrongfully taken, into the hands of the people, who own it, and make them responsible for the use of their, own money, in all the forms of trade and commerce in the country.  This money, so paid back to the people, would start all kinds of enterprise.  Nothing is more certain than the fact, that we can never have continuous prosperity in the trade and commerce of our country, so long as we allow ourselves to depend on a paper circulation, PROMISING TO PAY SILVER AND GOLD ON DEMAND.  All the bank failures of the past compel me to believe, that the banks of the future will be like those of the past—they will be compelled to fail, whenever an unexpected foreign demand is made on them for the silver and gold in their possession.


APPENDIX.


A most frightful picture of the course of special legislation, that has taken from the people, as I have before stated, the people’s money, and has converted the same into a national debt.

The following startling amounts have been wrung from the toiling masses of the American people, leaving the debt in the main as large as ever.

Senator Beck says :

“ The bondholders had up to 1869, received $100,000,000 of profit, before they got the principal of their bonds payable in gold.

It can be shown by the Treasurer’s report, from year to year, giving the amount of bonds, sold each year, and the premium of gold from 1862 to 1869, that the purchase of the bonds with paper at its face value, and the purchase of the paper at the discounts, gave a profit to the bondholders as follows :

An Account of the Bondholders“ Clear Profits,
arising from an investment may therefore be stated in the following tabular form :

1862 ..............................$28,138,989
1863.................................94,555,713
1864...............................306,551,582
1865...............................110,158,367
1866.................................53,757,183
1867...............................167,915,741
1868...............................253,150,765
On account of 5 per cent. bonds 98,297,864
Total...........................$1,012,536,204”

This most remarkable statement was, as Senator Beck declared, “ carefully and truthfully prepared.  The proof is in the official records.  It will satisfy the country, and ought to satisfy the bondholders and their advocates.”

The policy of contracting England’s currency after a suspension of specie payments for more than twenty years actually, according to sir Archibald Alison, brought on England a greater scene of widespread bankruptcy and ruin, than all the wars, pestilences and famines that had ever afflicted the country.  Notwithstanding the warnings of such an example, Mr. McCulloch, in his address, made at the banquet, given by the Chamber of Commerce in New York, spoke boastingly of his earnest efforts, both personally and in writing, with Members of Congress, in trying to persuade them to allow him to take out of circulation the people’s money, which (in his address) he states :  “ had all the legal attributes of money.”

My age and experience, have compelled me to believe, that mankind, as individuals, communities, states and nations, will improve and better their condition, just so far as they come to see, know and understand, that what a man, an individual, a community, a state, or a nation, “ soweth, that must they also reap,” somewhere, somehow, and at some time, and that by the operation of a reign of universal and beneficent laws, designed in infinite wisdom for the use and elevation of mankind.  They are laws that in themselves are so wise and good, that they will never require to be altered, amended, or revoked.  They are laws, that bind every member of the Government to act with the same intelligent economy and care, that a wise and good individual would adopt, if the whole community were, every one, members of his own family.

I am in fervent hope, that the day will come, when men will realize what the poet says :

* * “ A nature rational, implies the power
Of being as blest or wretched, as we please ;
And he that would be barred capacity of pain
Courts incapacity of bliss,
Heaven wills our happiness, allows our doom,
Invites us ardently, but not compels.”

PETER COOPER.




LETTER TO SENATOR BECK.


My Dear Sir :  I see that Sherman is making a desperate effort in the Senate, to force a vote on his 3 per cent. funding bill at as early a day as possible.

The people of this country, who have given some attention to the financial question, are watching with deep interest the discussion, that is taking place in reference to this bill.  This bill cannot be regarded in any other light by intelligent minds, than an effort on the part of those, who advocate it, to fasten a portion of the public debt upon the people, so that it cannot easily be paid, and to perpetuate the existence of the National Banks.

Senators, who support this bill, will not, as I believe, in the future, be supported by the people.

I sincerely hope, that you will make one of your ablest speeches in opposition to this bill, and in favor of abolishing bank currency, as fast as the charters of these banks expire.  This whole system of issuing money and making it a gratuity to rich bankers, is one of the most infamous frauds, ever perpetrated upon the people.

Now, can any plausible reason be given, why the Government of the United States should issue $362,000,000 of notes, and endow such notes with the function of money, and practically make them a free gift to rich bankers, while the masses of the people have to work for every dollar of this money, that comes into their possession ?

Why, Sir, if this volume of currency was issued in the form of legal tender notes, the working classes of this country would supply for it the labor and material, requisite to build two lines of double-track railroad from the Atlantic to the Pacific coast, and fully equip those roads, and in addition thereto, construct fifty first-class ocean steamers, by which the question of cheap transportation, both at home and abroad, could forever be settled in the interests of the people.

Why should the people, who create the wealth of the nation, be compelled to contribute the largest share of that wealth to the owners of the money, and the owners of the transportation lines, the medium through which the products of the people’s labor are interchanged ?

Why should Messrs.  Gould, Vanderbilt, Sage, Miller, Huntington, Crooker, other railroad managers, and a few hundred bankers in New York be permitted to accumulate their hundreds of millions of dollars, by simply controlling the money and transportation, that should belong to the whole people ?

Is it not because we have men of John Sherman’s stamp in the United States Senate and in Congress, who are legislating in the interest of these parties ?

Is it not about time, that such men should step aside and the true Representatives of the people’s interest, should step to the front and pass measures for the benefit of the people, and not solely for that of rich bankers and railroad magnates ?

If this 3 per cent, funding bill of John Sherman should pass, the bonds it provides for issuing would command a premium in one year of four or five per cent., which would be two or three times the amount of interest saved over the 3½ per cent.

Besides this with our surplus revenues, it would only require about 3½ years to pay off every one of the 3½ per cent. bonds.

This cry of Mr. Sherman of “ saving interest ” is just a pretense on his part ;  the real object of the bill is to perpetuate the public debt, and by that means to continue to issue bank currency.  The whole system of issuing currency by banks, whether they are private, State or National, is one that will bring panics, wide-spread bankruptcy and financial ruin.

It is a perpetual scheme for inflation and contraction, for sending the prices of property up and sending them down for permitting people to get in debt on bank paper and forcing them to pay those debts in coin for selling property, when it is high, and buying it on foreclosure, when it is low.

About every ten years the business men of this country are forced through bankruptcy, and their property is absorbed by bankers and money lenders through the process.

I send you, herewith, some documents, which contain tables, taken from the finance report, which will show you how inflation and contraction was carried on under the old State bank system ;  and also show what a system of legalized fraud the present system of National Banks would become, if the legal tenders were destroyed and the tax on bank circulation removed.

I also send you a copy of my letter to Secretary Folger, reviewing his last report.

I trust you will examine these documents carefully, and that your voice will be heard with great clearness on this subject, before a vote is taken on this bill of Mr. Sherman.

Congress should at once prohibit any further refunding of the public debt, and should pay the debt as fast as possible.  It should also prohibit any further re-charter of the National Banks, or the issue, of any more bank currency of any kind.  It should provide also for the unlimited coinage of gold and silver, for the issue of gold and silver certificates, and for legal tender notes, to take the place of the notes of the National Banks, as fast as their charters expire.  In addition to this it should provide cheaper transportation and Post Office Savings Banks for the people.

This will secure the best interests of those, who create the wealth of the nation by labor, and not solely of those, who absorb that wealth through class legislation and special privileges.

One reason why Mr. Sherman is pushing this 3 per cent. bill is, that $243,000,000 of the bonds now, held by the Treasury to secure bank currency, are 3½ per cents. and by paying these off as rapidly as is now being done, the banks are compelled to surrender their circulation, or pay a high premium for 4½ per cent. bonds to be held as their legal reserve, and, as security for these notes.

The questions of currency and the payment of the public debt are of vast importance to the American people.  The future stability and prosperity of our Government depend greatly upon a wise settlement of these momentous interests.

The American people will never allow these subjects to rest quietly, until they are safely moored to those sure foundation principles of eternal truth and justice, on which our Fathers placed the Constitution of the United States.  The Constitution was designed to establish a Government of the people for the people, and make it a shield of protection for the unsuspecting masses of the people against those, who are resorting to all forms of art to obtain property without labor.  The framers of the Constitution would never have recommended one kind of money for the Government, another for the people, and another for the banks.

In settling these questions of debt and currency we should be governed by the opinions of such a staunch champion of Democracy as Thomas Jefferson.

That great statesman and philosopher, Benjamin Franklin.

That life-long Democrat and statesman, John C. Calhoun.

Herbert Spencer, who is regarded as one of the first writers and ablest thinkers of his age, says :

“ England herself does not in reality base her currency on specie, nor could she without bringing all business to a dead stop in a very short time.  She just mixes enough of this specie basis fiction in her finances to continually or periodically divest the laboring classes of their earnings for the benefit of the nobility.  But for the real basis of value to her currency, she makes the notes of the Bank of England, as well as her coins, a full legal tender for the payment of debts, but not the notes of the other banks.  From this we see, that even in England specie basis is a mere fiction, a false pretence.”

I see, that suggestions are being made by the officers of the Government, and bills are being introduced, which aim to destroy the legal tenders or remove their legal tender quality.  This could not be done, except with the greatest hazard.

Our Government, having been literally compelled to issue and use a legal tender paper money, in order to save the nation’s life, has, by its use, caused the whole property of the country to be measured by its purchasing power.  By this use of paper money the Government has created a most solemn obligation on its part to do no act to increase or diminish the amount of paper money beyond the absolute necessities of the Government.  As an increase of the amount would inflate prices without increasing real values, in the same proportion a diminution of currency must cause all property to shrink in price, and thereby put it out of the power of the people to pay their debts.

One thing is certain, that the public and private debts can never be paid by a governmental policy, that shrinks the currency, destroys values, paralyzes industry, enforces idleness, and brings wretchedness and ruin to the homes of millions of the American people.

It is equally true, that Americans can never buy anything cheap from foreign countries, that must be bought at the expense of leaving our own good raw materials unused, and our own labor unemployed.  It should be remembered, that neither gold, silver, copper, nickel, nor paper are money, without the stamp of the Government upon it.  The Constitution has made it the duty of Congress to coin the money of our country, regulate the value thereof and fix a standard of weights and measures, as the only possible means, by which commerce can be regulated between foreign nations and among the several States.

The people look to you and your associates to protect their interests, and I trust you will pardon me for thus impressing upon you the importance of legislating upon the questions here referred to, in such a way as to provide for the prosperity of the masses, and not solely for the benefit of a few, who have secured special charters and privileges for their own benefit.

Very respectfully yours,             
PETER COOPER.




OPEN LETTER TO THE CITIZENS AND VOTERS OF MAINE.


HAVING been requested by citizens of your State, to address a few words of counsel and appeal, on the present condition of this nation, involved in the political issues, that are now before your people as a State, I take this means to do so, in the hope, that it may have some effect in inducing them to listen, for once, to other than their party leaders, to reflect on their condition for themselves, and to take the counsel of an old man, in his eighty-eighth year, who has no other ambition or object in life, than the good of his country and the happiness and prosperity of the whole people.

The commercial ruin of so large a part of the business and productive power of our country, and the consequent distress of the honest laboring portion of our people is the overwhelming fact, which we all acknowledge and deplore.

The causes of this distressful state of things, given by one party, is the extravagance of the people, over-production, over-importations and the unwillingness of the working people to work for low wages.

It has never been proved yet, how these causes could produce this wide-spread distress in our country, in the presence of the facts :  First, that extravagance, from its very nature, must be confined to a few, who can afford it ;  and that over-production and over-importation can only be the consequence of inability to pay for consumption ;  for no amount of production and importation could distress the people, if they could pay for and consume all.  How came about this inability to pay ?

Now, we of the National Party maintain, that a different cause is the source of the distress and misery of our people.

IT IS MISGOVERNMENT.  It is precisely that form of misgovernment, which has always brought distress and oppression on any people—legislating for a class, and putting the property, the interest and the power for good or evil that exists in public law, entirely into the control of a particular class, as distinguished from the rest of the people.

But what particular policy of the Government and what acts of legislation can be cited as “ misgovernment,” and as having brought all this distress upon us ?

It is the policy of legislating, for the last twelve years, in the interest of the bondholders of this nation’s debt, and the several “ funding Acts of Congress,” that have carried out that policy.

I cannot go into a detail of those “Acts.”  Let any one examine them, and he will see but one purpose in them all ;  it was to degrade the value and shrink the volume of the people’s legal tender, raise the value, and keep up the monopoly of gold and silver, and especially of gold—as a class money.

This is the whole secret ;  and as a consequence, our legal tender, till very lately, was kept below par to specie, by denying it the power of a full legal tender ;  and the process of funding has been going on, until all the Government money, introduced into the circulation and business of the country, and to which “ the whole business of the country was conformed,” was shrunk from a volume exceeding 2,000 millions to the present volume of greenbacks, about 350 millions.

Remember, every dollar of the funded debt now in existence, was at one time, in the shape of “ legal tender ”—not greenbacks, only four hundred and twenty millions were greenbacks—but legal tender, and designed, made for, and introduced into the circulation of this country in payment of labor and property, received and used by the Government ;  and the whole business of the country, as John Sherman said, from his seat in the Senate, “ was conformed to the legal tender act.”

It is this policy and legislation, that has brought ruin upon the business and laboring portion of our community.

If these are facts—and they are undoubted facts of public record—they are ample to account for the present state of affairs.

Hence, it is the design of the National Party, as Senator Jones says, “ to undo the unwitting and blundering work of 1873, and to render our legislation on the subject of money conformable to the Constitution of our country.

We cannot, we dare not avoid speedy action on the subject.  Not only does reason, justice, and authority unite in urging us to retrace our steps, but the organic law commands us to do so ;  and the presence of peril enjoins what the law commands.”

The American people have come to know, that our country has been subjected to a cruel financial policy—a policy, that has (as I have said) converted the people’s money, which was actually found circulating as a national currency, at the close of the war, and which should have been permitted to remain, in some form as legal tender, into a National debt, paying interest in gold.

Knowing this, we mean to undo this policy, rescind those “ Acts of funding ” and pay the National debt ;  we mean to do this according to the provisions of law, with justice towards the bondholders, and with justice towards the people of this country—we mean to do this, at the earliest opportunity, consistent with all just and legal engagements to the bondholders.

I do not mean to accuse our political opponents on this great national question, either of insincerity, want of patriotism, or any determination to distress the people, to gratify their own ambition or lust of gain ;  though I cannot except all, from this class ;  but I do think both our rulers and the people need more light on this subject.

My long life has made me know, that sincerity is not always the evidence of correct principles.

I have learned, that even so great and so good a man as St. Paul—even he once—verily believed, that he was doing God service by hauling men, women and children to prison and to death.

The number of deaths, occasioned by the mistaken zeal of St. Paul were insignificant, when compared with the thousands, that have died and are dying of starvation in this country, and the many, who have taken their own lives to get relief from their present suffering condition.

In conclusion, this policy of funding the people’s money, under the notion, that it is a mere debt to capitalists, so as to deprive the people of the use of their money, after having conformed their business to its use, must be reversed.  It is the “ credit of a great country cut up into small pieces,” as Secretary Chase termed it, “ and circulated as money.”

The people prefer this form of their credit ;  “ redeeming ” it constantly, as it passes from hand to hand, as money or legal tender ;  and made receivable or “ redeemable ” for all taxes and dues to the Government.  We can keep this money on a par with coin, by simply giving it the same function as coin—a perfect legal tender ;  and keeping the nation out of debt to foreigners, and especially to BONDHOLDERS, paid in gold.

This may not please a certain class, who hold the chief control of the coin of the world ;  and who desire the highest interest for money, made from the sacrifices and toil of the million ;  but it is for the interest of the working masses, who will then have the chance to receive the wages, due to their labor.

It is the last and most fervent hope of my old age, that these truths will be recognized by the people, in time to save themselves from the ruin and distress, which has already fallen on so many ;  and finally introduce the only policy in the financial affairs of this people, that can secure the permanent prosperity of the country.

This policy may be thus briefly expressed :  First, let all that passes as money in this country be the legal tender of the United States, and receivable equally with coin, for all the taxes and dues of Government—not subject to be funded ;  and let it be limited in volume to the present funded debt of the United States.  This sum, by a constitutional provision, shall not be increased, except by a fixed regulation, keeping it, per capita, according to the increase of the population, in time of peace ;  and in time of war, changed only by a vote of two-thirds of the States, as other provisions of the Constitution require.




GOOD GOVERNMENT.—APPEAL TO ALL LEGISLATORS, EDITORS,
RELIGIOUS TEACHERS, AND LOVERS OF OUR COUNTRY.


The experience of a long life has compelled me to believe, that the Constitution has made it the imperative duty of Congress to take and hold the entire control of all, that should ever have been allowed or used as money for the nation’s trade and commerce.  All articles are measured and weighed in reference to the amount of money, that would be a just equivalent in all the varied exchanges, where one form of labor and property is given for others.

The failure on the part of the general Government to obey the first mandate of a Constitution, that vests the power of coining money and regulating the value thereof in the United States, without directing whether it should be coined from gold, silver, copper, nickel, or paper.

The regulation of the value of money can only be accomplished by a law of Congress, that will declare the exact amount, which may be legally collected for the use of, or interest on, money.

According to Spaulding’s “ Financial History of the War ” (p. 201), the public debt of the United States stood on the books of the Treasury, October 1, 1865, at a total of $2,803,549,437.  According to the same author, who is a strong advocate for specie payments (page 10, Introduction), out of this debt, in 1864, “ the inflating paper issues, outstanding, were over, $1,100,000,000,”—and gold reached its highest quotation, 2.85.

Now, be it remembered, that although a few money-changers, speculators and importers were willing to give $2.85 of paper for one dollar in gold, yet the people were using this paper to buy flour and exchange their commodities at prices, that were far less than this inflated price of gold.

Gold, was no longer the standard of exchange, except in foreign commodities, where “ balances ” had to be paid in gold.  The internal trade, commerce, and industries of the country were steadily increasing, and never before so flourishing as during the time of this famine for gold.  In an evil hour it became the policy of this Government to reduce all our paper currency to the standard and par value of gold.  This was attempted by the withdrawal of the paper currency as fast as practicable, and by absorbing the same, by an arbitrary law, into a debt for so much gold as the face of the paper, in the shape of gold bonds, bearing the yearly interest of six per cent. in gold !  In the course of less than eight years this change was effected, and the people’s money and currency of all kinds were reduced subsequently from $2,192,395,527, as represented on the Treasurer’s book on September 1, 1865, to the sum of $631,488,676, on the 1st of November, 1873, making, a reduction of the currency in eight years of $1,561,906,851 !  (See Congressional Record, March 31, 1874, speech of John M. Bright, of Tennessee.)  This brought on the panic of 1873 and all our present financial troubles.  Although a part of this vast sum was a kind of currency, that drew interest, and, therefore, partook also of the nature of an investment, yet as Mr. Maynard, Chairman of the Committee on Banking and Currency, said, from his seat in Congress, on occasion of Mr. Bright’s speech, “ those issues were engraved and prepared in a form to circulate as money, and, as a matter of fact, did so circulate,” until either they were funded or “ the interest accumulated so as to make them superior to the ordinary class of currency.”  But this stupendous decrease in the people’s money—the very tools of their trades and enterpises of every description, the use of which they had fairly earned by the blood and sacrifices of a great war, and the beneficial effects of which were proved by the great activity in business and trade, which it engendered as long as it lasted—this great reduction in the money of the people was made by methods equally unjust, as they were disastrous to the prosperity of the country.

This paper currency was absorbed by interest-bearing gold bonds, bought by the paper, which in its turn had been purchased by gold at 40, 50, and 60 per cent. discount ;  thus turning the debt of the country to one of twice its value in paper, and paying for the gold bonds at half their value in paper.  This was done at a time, when this paper currency was doing the nation all the good, that so much gold could do for our domestic prosperity and trade.  The people were building up the country with a rapidity unexampled before, with this paper, which, if it had been fully honored by the Government that issued it, and received for all imports, duties and debts, and allowed to be exchanged at par for bonds at an equitable rate of interest, would not have permitted any premium of gold.


A HAPPY INCIDENT FOR AMERICA.


In 1879, a fortunate incident for America happened :  the crops failed all over Europe, which forced the people to look to the United States for supplies.  This brought millions of gold, that seemed like a special Providence ;  for without it our unwise specie resumption would have brought ruin all over the country ;  because our real estate and other commodities would have been at the mercy of foreign and domestic gold-mongers, in whose favor Congress has been legislating since 1862.

Now (1880) Europe has average crops, and we cannot expect the millions of gold we had last year.  Let us hope the specie resumption will prosper without European gold that relieved the pressure, in 1879.  Such an unfortunate incident for Europe, and fortunate for America, it is to be desired, will not soon occur.  What then will prevent gold speculation, pressure and ruin ?  Congress should at the earliest opportunity create a currency, based on the property of the nation, reserving gold merely for foreign exchanges, so that speculators could not interfere with it.  The people are now used to, and prefer a national paper currency from a ten cent, to a one hundred dollar, bill ;  there is no reason why they should not have it ;  being their only salvation from knavishly contrived periodic gold pancis by holders of gold in our own and foreign countries.

As a further evidence of the danger, that must result to the American people by our present system of National Banks, authorized as they are to issue paper money, “promsing” to pay gold and silver on demand, it should be remembered, that no ten years have passed in the history of our country without a failure of our banks to pay coin.  This danger was made to appear in all its frightful proportions by the testimony of Mr. S.B. Chittenden, Member of Congress from Brooklyn, given before a Congressional Committee in 1874, appointed to inquire into the National Banking System.


S.B. CHITTENDEN’S TESTIMONY
CONCERNING THE NATIONAL BANKS.


“ I believe that, of 1,000 National Banks, there are not two-thirds in number sound to-day—I mean, two-thirds in number.  In the vast proportion of them the capital is very small.

I know, for instance, how one National Bank was established, and I presume there were hundreds established in the same way.

I say I know a National Bank of $100,000 capital (so represented), where a broker in New York purchased $100,000 in Government bonds and paid for them.

The owners or organizers of the bank furnished the margin between the ninety per cent. in currency, which they were allowed to draw on deposit bonds, and the cost of the bonds, and that margin was all the capital that was ever put into the bank.  [And that $100,000 didn“t go to the bank—it went to pay for the bonds.]

The broker sent the bonds to Washington to get his $90,000, or ninety per cent. on the dollar in national bank notes, already having the margin from the gentleman, who established the bank, while he reimbursed himself with the $90,000 in national bank notes drawn on the bonds.

The bank was one of the first to suspend in the crisis of 1873, but resumed again shortly, and is going on as before.  It has a banking house which cost over thirty thousand dollars.”


There you have the facts in a nut-shell ;  and Mr. Chittenden never having manifested the first symptoms of Greenbackism, but being a well-known bitter opponent of the “people’s money,” his testimony should be accepted as conclusive.

It will be noticed particularly, that there was “ not a dollar in the bank ” of which Mr. Chittenden testifies—and that “ in a vast proportion of the banks the capital is very small.”

It would be safe to “ strike an average,” and place the bank capital at ten per cent. “ cash,” and ninety per cent. “ confidence.”

The testimony of Mr. Chittenden will show, that our present system of National Banks is a moneyed power, that is more able to inflict on the American people the greatest possible amount of suffering, like that which is now passing the real estate of our country rapidly out of the hands of the many into the possession of the few.


SENATOR JONES ON HASTY LEGISLATION.


I do heartily agree with Senator Jones, when he says that “ the present is the acceptable time to undo the unwitting and blundering work of 1873 ;  and to render our legislation, on the subject of money, consistent with the facts, concerning the stock and supply of the precious metals throughout the world, and conformable to the Constitution of our country.”

I sincerely hope, that the concluding advice of Senator Jones will make a living and lasting impression, when he says, speaking to the Senate, “ We cannot, we dare not, avoid speedy action on the subject.  Not only does reason, justice, and authority unite in urging us to retrace our steps, but the organic law commands us to do so ;  and the presence of peril enjoins what the law commands.”

The Senator states a most important fact, and one that all know to be true, “ that by interfering with the standards of the country, Congress has led the country away from the realms of prosperity, and thrust it beyond the bounds of safety.”  He says, truly, “ to refuse to replace it upon its former vantage ground would be to incur a responsibility and a deserved reproach, greater than that, which men have ever before felt themselves able to bear.”

Why the Senator’s patriotic advice was not taken, those who listened to, and neglected it, best know.


SIR A. ALISON ON OUR PAPER CURRENCY.


It is worth while to observe, that Sir A. Alison, who speaks so wisely on this subject in reference to the history of his own country, while scanning a few years ago the prosperity of our country during the war of the Rebellion and immediately after, has a foreboding of what might happen, and remarks :

“ The American Government may make financial and legislative mistakes, which may check the progress of the nation and counteract the advantages, which paper money has already bestowed upon them ;  they may adopt the unwise and unjust system, which England adopted at the close of the French war ;  they may resolve to pay in gold, and with low prices, the debt contracted with paper, and with high prices.  But whatever they may do,” he adds, “ nothing can shake the evidence, which the experience of that nation during the last six years affords of the power of paper money to promote a nation’s welfare.”

Conversation at my house with Hon. S.B. Chittenden, Chairman of Committee on Currency :

Mr. Chittenden said, that he came expressly to get me to join with him in a suit before the Supreme Court of the United States, to get a decision against the legality of the greenbacks.  He occupied nearly half an hour in presenting his side of the case, to which I had given close attention.  Soon after I had commenced to show the impolicy and the impropriety of such a course, he became impatient and wanted to go.  I requested him to hear me as patiently as I had listened to him.  Mr. Chittenden said his mind was made up ;  he was going to the Supreme Court to get a decision.

I urged him to give me twenty minutes, as I felt very sure, that I could convince him and show, that there is nothing to go to the Supreme Court for.

He then said :  “ I will acknowledge, that you have sown the seed, which has sprouted and taken root, and the people will have the greenbacks sooner or later, unless a decision of the Supreme Court can be obtained, pronouncing them illegal.”

PETER COOPER.


HORACE GREELEY’s PLAN.


“ Let Congress make our greenbacks fundable at the pleasure of the holder, in bonds of $100, $1,000 and $10,000, drawing interest at the rate of one cent a day on each $100 (or $3.65 per annum), and exchangeable into greenbacks at the pleasure of the holder.

“ Now authorize the Treasurer to purchase and extinguish our outstanding bonds, so fast as it is supplied with the means of so doing by receipts for customs or otherwise, and to issue new greenbacks whenever large amounts shall be required, every one being fundable in sums of $100, $1,000, $10,000, as aforesaid, at the pleasure of the holder, in bonds drawing an annual interest of $3.65 in coin per annum, and these bonds exchangeable into greenbacks whenever a holder shall desire it.

Our greenbacks which are now virtual falsehoods, would be truths.  The Government would pay them on demand in bonds as aforesaid, which is in substantial accordance with the plan, on which the greenbacks were first authorized.”


WENDELL PHILLIPS.


“ No observer can fail to see, in the measures, which the banks forced the Treasury to submit to, or deluded it into adopting two distinct intentions.  During the war, every effort was made and every trick used to artificially and unnecessarily depress the national credits, so that capitalists could buy its bonds at the very lowest price.  As soon as the war stopped, every expedient was resorted to by capitalists to artificially and unnaturally raise its credit and increase the burden of the debt, which they had bought at less than fifty cents on the dollar.

For instance, the original treasury note was receivable for duties and imports, and could be exchanged for a 5.20 bond.  The money changers forced the Government to repeal these two provisions, making the greenback not receivable for duties or the bond.  The capitalists then forced the Government to create two methods of payment, one to its common creditors, contractors, soldiers, laborers, etc., in greenbacks ;  a second to bondholders, whose interest was to be paid in coin.  These changes probably cost the nation a thousand million dollars, and put the amounts into the pockets of bondholders during the war.

After the war, or just at its close, the bonds were relieved of taxation, and in 1869, made payable in coin.  It is far  within the truth to say that these two measures unjustly and unnecessarily increased the burden of the people’s debt by another $1,000,000,000.  Then, in 1865, began the policy of contraction ;  and in 1873, silver was demonetized—two measures, which have cost the nation at least double what the war cost, probably $10,000,000,000, by the bankruptcy they have created.

This, briefly, is the history of the Republican party’s financial management during the last eighteen years,” etc.


The pretentions of those, who are attempting to drive this country back to the barbarism of a metallic basis for our currency, are fast giving away for want of argument.  It is being discovered, that all the great writers, who have analyzed the subject and viewed it from a scientific standpoint, came to the conclusion, that paper is superior to metal for a currency, etc. . . .

* That a system of bills of credit, made a general legal tender, is practicable, is proved by the fact, that the French Government has made and maintained a legal tender paper circulation through one of the fiercest and, to them, the most disastrous wars of modern times ;  and, having paid a thousand millions of indemnity, their paper money is to-day nearly on a par with gold.  This is because the Government took its own paper for all dues, instead of discrediting it, by not taking it, as ours does.  They take their paper also for French Government bonds, which has resulted in the public debt being mainly due to their own citizens, instead of foreigners, as ours is to-day, thus becoming a perpetual tax on the resources of the country.


EXPANSION versus CONTRACTION.


The following statistics from the London Economist demonstrate the fact, that the expansion of French Government legal tenders has kept pace with the accumulation of specie, and materially develops the home industries of that country :

“ Of legal tenders in April, 1869, the circulation was million dollars, and in April, 1876, 494 millions, being an increase in seven years of 280 millions, or 130 per cent.

Of specie and bullion in December, 1869, the stock was, 247 million dollars, and in November, 1876, 432 millions, or an increase in seven years of 185 millions, or 75 per cent.”

In 1792, the kings, by divine right, thought they must league against France and restore a king by divine right ;  but they learned a lesson, that taught them to let France manage her own internal affairs, in 1876.


JOHN EARL WILLIAMS ON THE DUTY OF CONGRESS :


To the above we append the following suggestions from John Earl Williams, President of the Metropolitan Bank of this city :

“ I would suggest :  That Congress assume, at once, the inherent sovereign prerogative of a Government ‘ of the people, by the people and, for the people,’ and exercise it by furnishing all the inhabitants of the United States with a uniform national currency !  Surely the people, and the people only, have a natural right to all the advantages, emolument, or income, that may inure from the issue of either $1,000 bonds with interest, or $10 notes without, based on the faith and credit of the nation.

This principle, simple, clear and undeniable ought to be recognized as fundamental, and the only safe and proper, basis, on which may securely rest all the circulating medium of the country, for the sole benefit of all the people, and not, as now, for the profit of a class of stockholders, however deserving they may be in all other respects.

To carry into effect this principle—to substitute United States notes for bank-notes—take away, as soon as practicable, and for ever, all circulation from banks.

They would do a strictly legitimate business as banks of discount and deposit ;  knowing that whatever leads to the prosperity of the whole people must be beneficial to the banks ;  but leaving the right where it belongs, to the United States Government, to supply the whole circulating medium of the country.

In this connection we must remember, that banks are the creatures of law.  The laws, which created them may, by virtue of rights reserved, be amended, altered or repealed.

To those, who are disposed to complain of the change as a hardship, one is tempted to ask, what natural right a dozen stockholders have to receive notes from Government to circulate, that any other dozen men do not possess ? ”


As this gentleman was an eminent banker, his opinion must have weight.  One thing is certain, that the national debt can never be paid by a Governmental policy, that shrinks the currency, destroys values, paralyzes industry, enforces idleness and brings wretchedness and ruin to the homes of millions of the American people.  It is equally true, that Americans can never buy anything cheap from foreign countries, that must be bought at the expense of leaving our own good raw materials unused, and our own labor unemployed.  It should be remembered, that neither gold, silver, copper, nickel or paper are money without the stamp of the Government upon it.  The Constitution has made it the duty of Congress to coin the money of our country, regulate the value thereof and fix a standard of weights and measures, as the only possible means, by which commerce can be regulated between foreign nations and among the several States.

Seventeen years ago, I held it to be unsafe for the public welfare, as I now do, to allow banks to incur liabilities, payable in specie, on demand, by issues of paper and loans many times the amount of the specie they held in their vaults, or could obtain from any source, for the immediate payment of their notes in gold, on demand.  This demand was made with all the accompanying disasters of widespread ruin and interruption of credit and industry, in times called “ panics.”  The effect of the panic of 1857, and the causes are very clearly detailed in Mr. Colwell’s work on “ Ways and Means of Payment; ” p. 485, etc. . . .

It is of the greatest importance, that all the paper money, allowed by the Government, should be made as unyielding in its power to pay debts as the yard-stick or the pound weight.

Our Government, having been literally compelled to issue and use a legal-tender paper money, in order to save the nation’s life, has, by its use, caused the whole property of the country to be measured by its purchasing power.  By this use of paper money the Government has created a most solemn obligation on its part to do no act to increase or deminish the amount of paper money beyond the absolute necessities of the Government.  As an increase of the amount would inflate prices, without increasing real values, in the same proportion a diminution of currency must cause all property to shrink in price, and thereby put it out of the power of the people to pay the national debt.

I do not believe in the good policy of selling Government bonds, as a means of resuming specie payments, as it will soon be drained from us again, leaving our paper as it was before, irredeemable in gold ;  nor in the purchase of silver to take the place of the best small currency our country has ever possessed.  It was a currency, that served the country without interest ;  and gave back to the whole people whatever was lost or worn out in the public service.  But let the currency at all times be interconvertible with interest-bearing bonds, and let the Government, not only make its money a legal tender, but receive it for all dues, and we shall hear no more either of “ inflation ” or of “ depreciation.”  This is my doctrine “ in a nut-shell.”  I believe with Jefferson, and many of our wisest statesmen, that our general Government is as much bound by the Constitution to hold the entire control of all, that is allowed as a legal money measure, in the regulation of trade and commerce, as they are bound to fix a standard for the pound weight or the bushel measure ;  and that this measure of value should be made as unfailing and unalterable as possible.


WEBSTER tells us :

“ When all our paper money is made payable in specie on demand, it will prove the most certain means, that can be used to fertilize the rich man’s field by the sweat of the poor man’s brow.”

[How unfortunate that Mr. Cooper popularized a fabricated quote, attributing to Mr. Webster notions that he never held.]

It will do this by ensuring the periodical return of those scenes of panic, pressure, general bankruptcy and ruin, that have so often changed the values of all property and labor, some twenty-five or fifty per cent. in a single year, whenever it was for the interest of foreign creditors or merchants at home to withdraw a few extra millions from our banks, as they did in “57, when a withdrawal of only seven millions produced the panic of that year, which sunk the values of all the property of our country to the amount of thousands of millions of dollars.  These millions were taken from the farmers, mechanics and merchants, who were in debt, and put in the possession of those, who had the means to buy at the ruinous rates, at which property of all kinds was compelled to be sold, thus making, as it ever must, the rich richer, and the poor poorer.

There can be no security for any man, that is in debt, until our general Government shall perform its most important duty, which is not only to establish a just system of money, but a system of legal tender paper, in amount equal to the amount put in circulation at the end of the war by the necessities of the Government ;  for labor and property had been given for every dollar, allowed to circulate as money.

Such a legal tender paper would be a bond and mortgage on the whole property of the country, and a bond of union among the States, and would leave gold and silver to be an article of commerce in the hands of those who hold it.

Free trade is beautiful in theory, and will be in practice, where all things are equal and peaceful in the relations of nations, and rapid transit shall go far to annihilate space.

Our Government, having allowed and used paper money, until the day’s labor has been made to cost at least one-third more than a similar day’s labor would cost in other countries, to bring about an equality in trade, will require a tariff, based on the difference in the cost, that will purchase a day’s labor in our country, as compared with that of foreign countries.

If the farmers desire to secure for themselves a reliable market and the highest price for their product, they must use the means best calculated to effect that object—they must encourage the manufacture of the articles they consume and have them made as near their homes as possible.  This should be done wherever good raw materials can be found, that can be put into forms of usefulness with as small expense of labor in this country as in any part of the world.

If I am not mistaken our country will rise out of its great embarrassment in a way, that would astonish the world, if our Government would perform what was and is its first and most important duty.

The Constitution made it the duty of Congress to adopt measures, that will “establish justice;”  that is the only means by which the “common welfare can be promoted.”

To establish justice for a nation, there must be created and maintained a just and uniform system of money, weights, and measures.


GEORGE W. DEAN tells us :

“ Our Government can only hold its power as a free system by avoiding in future all special, partial, or class legislation, and by the enactment of only such general laws as are necessary and indispensible to establish justice.  Justice can only be established I and the general welfare promoted by the Government holding entire control over all that is allowed or intended to measure or weigh the different forms and values of labor in its course of exchange from one person to another.

The unparalleled prosperity of France, fresh from her disastrous war, can only be attributed to her wise protective policy, which results in having annually a balance of trade of over one hundred millions in her favor.

I favor a free list and low duties for all necessary productions imported, which we ourselves do not produce and sell.

A tariff for revenue, and not for the protection of American industries, would quickly cause our great Republic to be reduced to the level of European countries—for workingmen, a country to migrate from, to seek elsewhere work and a living.

Our American people cannot support all other nation’s industries and our own beside, as low duties now cause us to do.  A tariff law for American industries alone would dissolve this ruinous and unnatural division of our market, as was found necessary to do after the bankruptcies of 1837 and 1857, to our country’s immediate relief from depression of business.”


Entreaties and petitions remained unanswered, while thousands of industrious men and women were suffering for the want of the people’s money, removed from circulation by special and class legislation.  Yet see how one of our leading papers speaks of the ample currency given to the nation in 1865 :

“ The necessities of the war, the law of self-preservation, the providing for the common defense, and the general welfare, gave us a currency, August 31, 1865, according to the report of the Secretary of the Treasury, as quoted by the New York Times in 1873, of $1,552,914,892.67.

Consisting of—
United States notes, greenbacks, and frac-
tional currency ............................................. $459,505,311.51
National and State bank notes..........................250,189,478.00
Legal-tender certificates of indebtedness,
6 per cent...........................................................85,095,000.00
Legal-tender temporary loan .............................107,148,713.00
Legal-tender 6 per cent........................................33,954,230.00
Legal-tender 3.65 per cent.................................217,024,160.16

Total ............................................................$1,152,914,892.67

—legal tender money for the most part, and all in circulation as money throughout the country.”

To this circulation also properly belong the 7.30 interest notes ($830,000,000) which, under the acts of June 30, 1864 ;  and March 3, 1865, were currency according to Mr. Spinner in his letter to John G. Drew, which read as follows :

“MOHAWK, August 24, 1876.
DEAR SIR :  Your letter of the 15th instant is received.  I have to say that the 7.30 Treasury notes were intended, prepared, issued and used as currency.
Very respectfully yours.         
F.E. SPINNER.”

Here the New York Times congratulates the country on acquiring a national currency, while the Secretary of the Treasury urges its contraction, as shown by what follows :

Mr. Secretary McCulloch, in his annual report to Congress in 1865, in which he was urging upon Congress the adoption of the contraction scheme, says :  “ The people are comparatively free from debt.”

This he gives as a reason why it is safe to enter upon contraction—that contraction, which has ruined and pauperized one-half of our people.  Who can portray the experience and suffering of the American people since that fatal hour ?  Hoping, that the people may arouse and take the Government once more into their own hands, and that our civilization may be made better through our great suffering, I will not trespass further upon the time of the House.  (This is part of a remonstrance, uttered in the House by one of its members against contraction.)

All the invalidating financial laws were passed in direct opposition to the warning advice, given by your present Secretary Sherman, when in the Senate, 1869.  He, then described, in language never to be forgotten, the scenes of misery and ruin, that would come upon our country as a consequence of taking away from the people the legal money they had received in payment for all the labor and property they had passed into the possession of the Government, in exchange for the legal dollars they had received.  Secretary Sherman was right, when in the Senate, 1869, he declared, that “ every citizen in the United States had conformed his business to the legal tender clause of the law, regulating the currency of the country.”  He said that “ the appreciation of the currency is a far more distressing operation than Senators supposed.”

I am glad to find that those, who are striving to drive our country back into the “barbarism” of a metalic basis for currency, are fast giving way for want of argument.  It is being discovered, that all the great writers, who have analyzed the subject, and have viewed it from a scientific standpoint, came to the conclusion, that paper money is superior to metal for a currency.

It would seem as though a President with his Cabinet and Congress, with such advice and facts of past experience before them, might halve avoided a repetition of similar distress and ruin to their country, in 1873.  If the resumption act was due to ignorance or carelessness, it should be reprehensible ;  and, if due to anything else it should be punished as treason, being unconstitutional, etc. . . .

Extracts from two letters to his Excellency, President Hayes, June 1, 1877, and August 6, 1877 :

Your noble course has, thus far, inspired the people with the hope and trust that you will, in the providence of God, be our country’s Moses, to lead the people from a threatened bondage, that now hangs over the liberties and happiness of the American people.

This bondage has its manifold centre and its secret force in more than two thousand banks, that are scattered throughout the country.  All these banks are organized expressly to loan out their own money and the money of all those, who will entrust them with deposits.  These loans are made to men, whose business lives will soon become dependent on money, borrowed from corporations, that have a special interest of their own.  Such a power of wealth, under the control of the selfish instincts of mankind, will always be able to control the action of our Government, unless that Government is directed by strict principles of justice and of the public welfare.  The banks will favor a course of special and partial legislation, in order to increase their power—“ for even the good want power ;”  they will never cease to ask for more, as long as there is more, that can be wrung from the toiling masses of the American people.

Such a power should never be allowed to go out from the entire and complete control of the people’s Government.  The struggle with this money-power, intrenched in the special privileges of banks, has been going on from the beginning of the history of this country.  It has engaged the attention of our wisest and most patriotic statesmen.  Franklin, Jefferson, Webster, Calhoun, Jackson, have all spoken of the danger of such a power, and the necessity of guarding against it.

In the opinion of Thomas Jefferson the Constitution has made this subject clear, plain and positive.  He says :  “ Bank paper must be suppressed, and the circulation must be restored to the nation, to whom it belongs.”

The present Secretary of the Treasury, Hon. John Sherman, speaking in the Senate, when the subject of regulating the currency was under consideration, declared it to be a fact, that “ every citizen of the United States had conformed his business to the legal tender clause.”  That Senator further declared, as appears by the Congressional Record, that “ if the bondholder refuses to take the same kind of money, with which he bought the bonds, he is an extortioner and a repudiator. . . . . There is no such burdensome loan negotiated by any civilized nation in the world as our five-twenty bonds, if they are to be paid in gold.”  And yet these very six per cent. bonds, that were issued under a law, that made them payable in the currency of the country, have, by a most cruel and unaccountable change in the law, been made payable in gold—the very bonds, which had been sold at from forty to sixty dollars in gold for one hundred in currency, thereby causing a debt, that now hangs like a millstone on the neck of the nation.

I find myself compelled to agree with Senator Jones, when he says, that “ the present is the acceptable time to undo the unwitting and blundering work of 1873. . . . We cannot, we dare not, avoid speedy action on the subject.  Not only does reason, justice and authority unite in urging us to retrace our steps, but the organic law commands us to do so, and the presence of peril enjoins what the law commands.”

I have ventured this long letter in the firm belief, that the adoption of a permanent, unfluctuating national currency, as before stated, equal to the amount actually found in circulation at the close of the war, and that amount shall never be increased, only as per capita with the increase of the inhabitants of our country—such a measure of all internal values, with a revenue tariff of specific duties to be obtained from the smallest number of articles, that will give the amount needed for an economical Government—such a national policy would introduce prosperity once more into the trade, commerce and finances of this country, etc.

Real estate has depreciated to less than half of what it would have brought four years ago ;  much of it cannot be sold for any price, or mortgage for one-quarter its value.  The thriving and enterprising farmer of the West, especially, feels this rise in the value of money, as compared with labor or property.  With the hardy toil of years, he has opened and improved his farm, and the comparative small loan, which laid but a light weight on the resources of his land in prosperous times, and with a sufficiency of money, is now threatening to swallow up the labor of his life !  Even the banks and the loaning institutions, not being able to invest their money on “ good securities,” are embarrassed on both sides—the failure of their debtors, which throws so many of the securities on their hands, and makes “ bonds and mortgages ” a “ glut in the market,” and the difficulty of making any new loans or investments—so that money “ goes a begging ” at one and a half and two per cent., etc. . . . .

In the year 1865 there was in the hands of the people as a currency $58 per head ;  in 1875 the currency of all kinds was only a little more than $17 per head.

You may call this currency a vast debt of the people, as it was in money—every dollar of it.  It was paid by the Government “ for value received ;”  it was used by the people to pay their debts, to measure the value of their property, and, as your present Secretary of the Treasury said in his seat in the Senate, “ every citizen of the United States had conformed his business to the legal tender clause.”

This currency was also the creature of law, and under the entire control of the Government, but held in trust for the benefit of the people, as are all its functions.  Was it either just or humane to allow $1,100,000,000 of this currency, a large part bearing no interest but paying labor, and fructifying every business enterprise to be absorbed into bonds in the space of eight years, bearing a heavy interest, of which the bondholder bore no share ?  (See Spaulding’s “ History of the Currency.”)  The Government seemed to administer this vast currency, as if there were but one interest in the nation to be promoted, and that the profit of those, who desired to fund their money with the greatest security, and to make money scarce and of high rate of interest !  This is the issue of the hour; this is the battle of the people and for the people, in which the present administration is called upon to declare which side it will take, etc. . . .

If the people can look for no relief from the present Congress and Administration—if those, who now sway the financial interests of the country, cannot see their great opportunity—then new men must be chosen by the people, whom they can trust to make laws and execute measures, that “ shall secure the blessings of liberty to themselves and their posterity.”

I appeal from those, who seem insensible to the cry of the people, to the people themselves.  I appeal from the political parties, organized to control the Government, and distribute the offices and emoluments of office to the great industrial classes, who are organized to protect their interests and obtain some recognition of their rights from the Government.  Let them substitute co-operation for ’strikes,” and unite to save themselves and the country from the present disaster and distress to all the industrial classes.  Let no man think of the bullet, while he has the ballot in his hand.  It needs but the use of that simple instrument of political power to rectify all our discontents and social evils, for Webster tells us :  “ Power was given to Congress over the currency and over the money of the country.”

Let us have our national currency daily honored ;  let us take the testimony of the nation’s experience, and that of other countries, as to what such currency can do for our prosperity ;  let the gold par be reached by rendering our currency of higher and indispensable uses, as now exemplified in France, and not by contracting its amount ;  and let its volume and its value be determined by the interconvertible bond, placed at the disposal of the wants of the people and governed by all the forms and sanctities of law ;  and not surrender the currency to the ever-changing basis of a commodity like gold—and we shall have peace on this question.  “ Justice will be established and the general welfare promoted ;”  prosperity again will re-visit us, and we shall vindicate the wisdom and superiority of our free institutions before the world.

France, with her 600,000,000 of legal paper, has kept her industries profitably employed by keeping her paper receivable for all forms of taxes, duties, and debts.

My views upon the currency I have heretofore briefly expressed as follows :

The worth or exchangeable value of gold is as uncertain as other products of human labor, such as wheat or cotton.  The exchangeable value of anything depends on its convertibility into something else, that has value at the option of the individual.  This rule applies to paper money as to anything else.  But how shall Government give an exchangeable value to a paper currency ?  Can it be done by a standard, which is beyond its control and which naturally fluctuates, while the sign of exchange, indicated by the paper, remains the same ? etc. . . . .

The time has come, when the claims of a common humanity, and all that can move the manhood of an American citizen, must unite in a demand for an act of common justice, now due to the American people, who have saved our country from ruin, and will, I trust, forever protect it.  The Constitution has made it the first and most important duty of Congress “ to establish justice, insure domestic tranquillity, provide for the common defence, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.”

In all I have written and quoted from writings of others, my object has been to impress on the minds of the American people the unmeasured importance of a strict compliance with the letter and spirit of a Constitution, that requires the establishment of justice, based on a national currency as unfluctuating as possible, which alone can guarantee to this great and glorious country a Republican form of government, with the blessings of liberty secured to ourselves and our posterity.

To complete this appeal to my countrymen, I add the following system of finance, devised by the veteran financier, Silas M. Stilwell, author of the beneficent “ Stilwell Act,” and father of our “ Greenbacks,” wrongly attributed to Secretary Chase.**



* From my address to the Union League Club, published in the New York Tribune, March 9, 1877.

** As stated by Edward Jordon, Esq., private secretary and confidential friend of Chief Justice Chase, to a reporter of the New York Graphic, September 21, 1878.