Ideas for a Science of Good Government
COIN AND PAPER CURRENCY.
A LETTER ON THE CURRENCY.
NEW YORK, July 12, 1875.
To the Editors and Legislators of my native City and Country :
An inextinguishable desire to do what I can, in this the eighty-fifth year of my age, impels me to call and fix the attention of the American people on the appalling causes, that have so effectually paralyzed the varied industries of our country. This destructive cause has already shrank the value of property in less than three years to a condition, where real estate cannot be sold, or mortgages obtained on it for more than one-half the amount it would have brought three years ago.
There is nothing, that can be more important than to find out and remove a cause, that is bringing bankruptcy and ruin on millions of the most industrious and enterprising men of the American people. The national policy, that has brought this frightful calamity to our country, should receive the most thorough investigation and the most decided action of our Government.
I propose to show the true public policy, that underlies this whole question, and to indicate what appears to me, as the principles and the just methods, that ought to actuate the people, in their exercise of power through the Government, and the remedies, which that Government ought to devise. For it must ever be borne in mind, that the Government and its policy in this country, is just what we, the people, make it. It is our duty, therefore, at all times and in every way, to enlighten and exhort the people, and trust to such appeals, rather than any immediate criticism or direct appeal to the Government itself.
The whole question of the currency and money arises from the necessity of trade, or exchanges among men in the products of their industry, and the causes and methods, that make these exchanges fair, just, and beneficial to all concerned, or a means of tyranny and injustice, and an occasion for the exercise of greed and selfishness. A false balance is an abomination to the Lord, but a just weight is His delight. This proverb contains the secret of all unfairness in the dealings between man and man. Justice and truth are at the bottom of all fair exchanges, that are beneficial to both parties ; but false balances and unjust weights are the means, by which the strong and the insincere oppress or deceive their fellow men.
Let us then trace, in some simple way, this necessity of exchange among men, and the process by which injustice first creeps in, and the best method of keeping the true balance and the just weight, in the exchange of one equivalent for another.
Suppose a community or race of men to have passed that point in their progress, when simple barter is any longer the sufficient means of exchange, when some easier and more rapid method must be devised. The first thing selected for this purpose, is a concentrated and valuable form of labor, the most portable, durable, and susceptible of carrying on its very face, the record and sign of its value. Such is gold and silver money. Its value is two-fold ; it is both intrinsic and representative. But it is its representative value, that makes it money, or a conventional sign and record of exchanges. So far as its intrinsic value is concerned, the exchange of a piece of gold for anything else, is simple barter. But it holds the balance even, and it gives a just weight for whatever is exchanged for it, because, it has cost labor to produce it.
But there comes a time, in the complex and numerous exchanges, that take place between men in a higher state of civilization, when even the barter of gold and silver for other products, concentrated and portable as is their intrinsic value, becomes too cumbrous a method and too slow to effect these exchanges fast enough, and to keep the record of them in the most convenient shape. For this purpose the intrinsic value of the means of exchange is superseded entirely by the representative. The record is taken for a time, for the transaction itself, which, however, is assumed will take place infallibly ; and in order to secure a real result of the exchange of values, which at first, are the subject of promise and record merely, there must be some real or assumed ability on the part of the one, who makes the promise, that he can and will make that promise good. This is the origin of paper money. The value of this paper money, although not intrinsic, as is that of gold and silver, yet is no less real, provided, the exchange of values it is used to record, can in any way be made certain ; it must hold an even balance, and be sure to give a just weight in the end. But here is the point where deceit and injustice may creep in. The paper money is always representative of value, and a mere sign of a real exchange of values to take place at some future time. It may hence be falsified or trusted blindly, and on insufficient grounds. The selfishness and greed of men, or even their groundless hopes and miscalculations may give a temporary value to this promise to pay, which it cannot sustain. This is the secret of panics, revulsions in business and prostration of credits. The lie comes to the surface sooner or later, and the credulous find themselves in the snare.
This liability increases in proportion to the want of integrity and commercial intelligence in individuals and communities, where such methods of exchange take place. Individuals are less to be trusted with such a vast interest, as the power of making paper money, than are corporate bodies of men ; and these in turn, are less to be trusted than well organized governments. Governments themselves differ very much in this respect, in proportion as they are responsible to the people and easily held in check, or rectified by the demands of public interest. Hence, a true republican government is the safest agency in the world, to entrust with the power of making paper money.
A semi-barbarous government, like the Turkish, will from time to time, even call in all the coin of the country, and reissue it again in a depreciated condition and value. So, paper money is subject to great fluctuations in value, if there be any uncertainty in the real and permanent integrity of the power, that issues the paper, or a capricious use of its authority in determining its standard of value.
Experience has shown, that individuals cannot be trusted with such a power. Even large corporations cannot be trusted with the common welfare, involved in this privilege ; and while governments are the safest depositories of this power, they must be such as are not subject either to revolution or to any radical changes of policy, or to any irresponsible exercise of power. This, it appears to me, is now the condition of our Government. Its credit has been and is now the support of one of the greatest bonded debts, by means of which the life and perpetuity of the Union have been secured. The faith of this Government now gives value to an immense paper currency, for which the law has provided no redemption. It seems preposterous, therefore, to doubt the ability of this Government to give stability to any currency, which it might adopt as indispensable to the welfare of the nation. ... Gold is diffusible, because it is accepted by all countries as a standard of value and a means of exchange. But it is also fluctuating in any locality by the laws of production, supply and demand all over the world.
To fix upon an arbitrary and fluctuating standard, such as the worth or exchangeable value of a gold dollar, to indicate the exchangeable power of a paper dollar, is as uncertain as to take any other permanent product of human labor, such as a bushel of wheat or a pound of cotton. Nor can any standard be fixed for the value of a currency, because the uses and demand of currency are fluctuating wants. Now, the exchangeable value of anything depends upon 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 do so by a standard, which is beyond its control, and which naturally fluctuates, while the sign of exchange, indicated by the paper, remains the same ?
This is the unsound state, which possesses the minds of our people and of our politicians.
We must come out of this unreasonable condition, or we shall be subject, for all time, to these periodic disturbances of our money and currency, which bring such widespread ruin and distress on our commercial industries, and work, on the part of the Government, positive and cruel injustice. The remedy seems to me to be very plain.
First.We must put this whole power of coining money or issuing currency, as Thomas Jefferson says, where, by the Constitution, it properly belongs entirely in the hands of our Government. That Government is a republic ; hence it is under the control of the people. Corporations and States have hitherto, in some form or other, divided this power with the Government. Hence come the embarrassments and the fluctuations, as may be easily shown.
But now we must trust our Government with this whole function of providing the standards and measures of exchange, as we trust it with the weights and measures of all trade. So far from putting the people in the power of our Government, and at the caprice of parties in power, I contend, it will bring the Government more under the control of the people and give a check to mere party rule ; for the more stake the people have in the wisdom and honesty of the administration of the Government, the more watchful and firm they will be in its control.
Secondly.We must require the Government to make this currency, at all times, and at the option of the individual, convertible. But the currency must be convertible into something, over which the Government has entire control, and to which it can give a definite as well as a permanent value, which is its own interest-bearing bonds. These are, in fact, a mortgage upon the embodied wealth of the whole country. The reality of their value is as sound and as permanent as the Government itself, and the degree of their value can be determined exactly by the amount of interest the Government may think proper to fix.
This convertibility will always keep a check, both in the amount of currency and the amount of bonds, that may be called for at any time ; for the bonds are property, creating an income, and the currency is merely the measure of property and the means of exchange. If currency swells in the hands of the people, it will show, that business is active, exchanges numerous and investments profitable. If currency shrinks and bonds increase, it will only be to the extent of those natural fluctuations, which seasons and times bring upon the productive energies of man. But at no time will either the bonds or the currency be a mere drug upon the market, for they will be mutually convertible.
When we look into the history of the past for the real cause of those periodical panics, that have brought financial ruin on so many of our people, we find, that on all those occasions, as in the present paralyzed condition of the trade and commerce of the country, the main difficulty has originated in the unfortunate financial policy, adopted by the General Government. A policy, that is producing for our people what the policy of the British Government has brought about for the people of that country, where the real estate of the whole of England has, in a comparatively short period, been transferred from 165,000 of the past, to 30,000 landowners of the present. And this, where the most rapid increase of wealth, perhaps, in the world, is also attended with the worst and most unequal distribution ; and where, instead of a diffused happiness and universal prosperity, the rich grow richer, and the poor poorer, by constant vacillations in the measures of value.
Our own Government, instead of taking the whole subject of money and currency entirely in its hands, as provided by the Constitution, allowed, for a time, local banks to multiply and continue, until their notes, which were promises to pay specie on demand, became mere delusions, and the best informed and most prudent merchant found it impossible to distinguish those, that were redeemable or convertible into gold, from those that were not. The chartered Bank of the United States, in the first four years of its operation, issued $40,000,000 of paper with only $300,000 in specie to redeem its notes. Banks evaded the law by issuing paper they were unable to redeem, when it was not wanted. The reason of this lay in the fact, that the demand for currency at times was far in excess of the quantity, that could be reabsorbed in gold, when the currency was no longer needed.
Gold was not its proper agent of conversion, because it is uncertain in volume, and is itself subject to the magnetic attraction of a foreign trade, that needs it to make up its balances.
Had the currency, which should have been all United States currency, been at once convertible into United States bonds, which, instead of locking it up, as would be the case now, should have given a small interest, until the currency was wanted again, when the bonds should immediately be convertible into currency, we would have escaped the panics and stagnation of trade and stoppage of industry, which has now affected the commerce of the world.
The local banks were allowed to continue, until the war of the Rebellion compelled the Government to issue a currency as legal tender, as the only advisable means of carrying on its operations for the safety of the nations life.
In this extremity, our Government was literally compelled, as a war measure, to offer to these local banks nearly double the ordinary interest of loans, in order to induce them to lend their money to the Government, and base their banking on the bonds of the Government, and exchange their own currency for that of the United States. This great advantage, given to capital invested in the local banks, should have come to an end, when the war was over, as it was only a war measure. At the end of the war, common justice to the debtor class should have prevented the Government from doing anything to lessen the purchasing power of those legal tender notes, which the people had been literally compelled to accept for all products of their labor. The circulation should have been left simply to the natural law. At the close of the war the legal tenders should have been made the permanent currency of the country, and the volume should not have been increased or diminished, except as per capita, with the increase of the population of the country. And further, it should have been made convertible into the bonds of the Government, over which it has entire control, and to which it could give a permanent value in interest. Instead of this, what do we find the Government doing ? Resolving that at a certain future time, in 1879, the currency shall be convertible into gold ! Why did not our Congress proceed to resolve, that by that time there should be gold enough in the country to absorb all the currency, that foreigners might wish to be converted into gold ? But this they could not do. Hence the present unwillingness of capital to invest in business or manufacture, because the capitalist does not know what his property or his money may be worth, four years hence. This currency must be made convertible, or it cannot measure real property, or properly represent it. But its convertibility into gold cannot be made a matter of legal enactment, but must be left entirely to the laws of trade, the supply and demand for gold, as for any other commodity.
The only policy the Government could adopt to influence the influx of gold into this country, and keep its relations on a par with other commodities and with the paper currency, would be, that the Government should require its import duties to be paid in legal tenders, adding always the premium on gold to the amount as estimated in the paper currency. That would be desirable at present, or until the national debt is extinguished ; because the Government is under obligation to pay the interest of its bonds in gold. It will have a tendency to keep the paper on a par with gold ; for it will make it easier to pay the dues of the Government ; besides, the superior convenience and certain convertibility of the paper will always have a tendency to keep it on a par, or even make it more valuable than gold. But interest-bearing bonds are purely a subject of legal enactment, and hence can be controlled by the Government. This is the whole secret of the difficulty, and the real key to our financial condition. Our currency, in point of fact, is not convertible into gold. When it is not needed as at present, to the full extent of its volume to effect the exchanges or pay the wages of labor, because these are in a measure interrupted, what is to be done with it ? Some say, call it in and burn it up, that the rest may be worth its own volume in gold. But this currency has already been in circulation ; it is now the measure of the whole property of the country, and has been the measure of many exchanges, and now represents the great mass of indebtedness. To bring down its relative value to that of gold is as arbitrary a measure as to bring it to the standard of any other product that of wheat or iron, for instance.
It will place all in the power of those, who have the most gold. It will transfer a large part of the property of the country to foreigners or to those, who can readily draw gold from Europe.
But let us consider this subject more closely. If we admit, that there is at any one time only a certain amount of gold in the world, it is certain, that our community or nation cannot obtain more than its share, without leaving all the others in a deficiencyat least for a time.
By this means one nation has the power to derange the exchanges, and through these, the industries of every other country. The caprice and power even of a few large capitalists can do this. It would be, therefore, an unwise policy for our Government to allow this one article of gold, that all nations are struggling to obtain by the use of all the arts, that human ingenuity can devise, and which must be employed in settling all balances of trade between different countries, and which, as a product of nature and of human industry, is uncontrollable by any law, that the Government can deviseto make this the standard of all values and the legalized measure of all trade and exchange in this country, would be in direct opposition to the opinion of many of the wisest statesmen, that our country has produced. This will appear by the following expression of their views on finance :
OPINIONS OF THOMAS JEFFERSON AND BENJAMIN FRANKLIN.
Thomas Jefferson in his letters to Mr. Eppes, volume 6 of his works, says:
Bank paper must be suppressed, and the circulating medium must be restored to the nation to whom it belongs. It is the only fund on which they can rely for loans; it is the only resource which can never fail them, and it is an abundant one for every necessary purpose. Treasury bills, bottomed on taxes, bearing or not bearing interest, as may be found necessary, thrown into circulation will take the place of so much gold and silver, which last, when crowded, will find an efflux into other countries, and thus keep the quantum of medium at its salutary level.
Also the great statesman and philosopher, Benjamin Franklin, in volume 4, page 82, of his works, says :
Gold and silver are not intrinsically of equal value with iron. Their value rests chiefly in the estimation they happen to be in, among the generality of nations. Any other well founded credit is as much an equivalent as gold and silver. Paper money, well founded, has great advantages over gold and silver ; being light and convenient for handling large sums ; and not likely to have its volume reduced by demands for exportation. On the whole, no method has hitherto been formed to establish a medium of trade, equal in all its advantages to bills of credit, made a general legal tender.
DANIEL WEBSTERS OPINION.
The following is an extract of constitutional argument of Daniel Webster, affirming the right and power of the Government of the United States to take exclusive control over the standard of value and medium of payment :
Among the objects, sought to be secured by the Constitution, were commerce, credit and mutual confidence in matters of property ; and these required, among other things, a uniform standard of values, or mediums of payment. One of the first powers, given to Congress, therefore, is that of coining money and fixing the value of foreign coins ; and one of the first restraints, imposed on the States is the total prohibition to coin money.
These two provisions are industriously followed and completed, by denying to the States all the powers of emitting bills of credit, or making anything but gold or silver a tender in payment of debts. The whole control, therefore, over the standard of value and medium of payments is vested in the General Government. And again, collating the grant to Congress, and the prohibition on the States, a just reading of the provision is this : Congress shall have the power to coin money, regulate the value thereof and of foreign coin, emit bills of credit, or make anything besides gold and silver coin, a legal tender in payment of debts.
In view of this, Mr. John G. Drew, a financial writer of New Jersey, pertinently asks :
Where, we ask, then, under the Constitution, have the States any power to charter corporations with privileges, that they themselves cannot exercise ; or where does Congress acquire the right to transfer such a vast power to a few favored capitalists ?
JOHN C. CALHOUNS OPINION.
The following is an extract from a speech of Hon. John C. Calhoun, in the Senate of the United States, on the currency issue, and is eminently appropriate to be quoted in the prevailing discussion :
It appears to me, after bestowing the best reflection I can give the subject, that no convertible paper, that is, no paper, whose credit rests on the promise to pay, is suitable for a currency. It is the form of credit proper in private transactions between man and man, but not for a standard of value, to perform exchanges generally, which constitutes the approximate function of money or currency. No one can doubt but that the Government credit is better than that of any bank-more stable and more safe. Bank paper is cheap to those, who make it, but dear, very dear to those, who use it. On the other hand, the credit of the Government, while it would greatly facilitate its financial operations, would cost nothing, or next to nothing, both to it and the people, and would of course add nothing to the cost of production, which would give every branch of our industries, agriculture, commerce and manufactures, as far as its circulation might extend, great advantages, both home and abroad ; and I now undertake to affirm, and without the least fear, that I can be answered, that a paper issued by Government, with the simple promise to receive it, for all its dues, would, to the extent it could circulate, form a perfect paper circulation, which could be as uniform in value as the metals themselves ; and I shall be able to prove, that it is within the Constitution and powers of Congress to use such a paper in the management of its finances, according to the most rigid rule of construing the Constitution.
SPENCER ON FINANCE.
Herbert Spencer stands among the first writers and thinkers of this age. He studies and writes for the sake of truth. Hence the following from his pen will be fresh and invigorating to thirsty souls of this time :
The monetary arrangements of any community are ultimately dependent, like most other arrangements, on the morality of its members. Amongst a people altogether dishonest every mercantile transaction must be effected in coin or goods ; for promises to pay cannot circulate at all when, by the hypothesis, there is no probability, that they will be redeemed. Conversely, amongst perfectly honest people, paper alone will form the circulating medium, and metallic money will be needless. Manifestly, therefore, during any intermediate state in which men are neither altogether dishonest nor altogether honest, a mixed currency will exist ; and the ratio of paper to coin will vary with the degree of trust individuals place in each other.
There seems no evading this conclusion. The greater the prevalence of fraud, the greater will be the number of transactions, in which the seller will part with his goods only for an equivalent of intrinsic value ; that is, the greater will be the number of transactions, in which coin is required, and the more will the metallic currency preponderate. On the other hand, the more generally men find each other trustworthy, the more frequently will they take payment in notes, bills of exchange and checks ; the fewer will be the cases, in which gold and silver are called for, and the smaller will be the quantity of gold and silver in circulation.
The pretensions 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. Even Ricardo, the high priest of the bullionists, the father of the present British system, allows this. He says :
A regulated paper currency is so great an improvement in commerce, that I should greatly regret, if prejudice should induce us to return to a system of less utility. The introduction of the precious metals, for the purposes of money, may with truth be considered as one of the most important steps toward the improvement of commerce and the arts of civilized life. But it is no less true that, with the advancement of knowledge and science, we discover, that it would be another improvement to banish them again from the employment, to which, during the less enlightened period, they had been so advantageously applied.
HENRY CARY BAIRD, of Philadelphia, says :
The only system, ever devised for furnishing a country with a volume of money in exact accordance with the needs of that countryneither in deficiency nor in excessis that, by which it is proposed, that the public debt of the United States shall be converted into bonds, bearing 3.65 per cent. interest, and legal tender notes interchangeable with each other, at the pleasure of the holder."
It appears by a speech of W.W. Allen, Esq., that there had been drawn from the people, in the shape of taxes and duties during eight years, between the 31st of August, 1865, and the first of November, 1873, the amount of $631,488,677, making a reduction of the national debt in eight years of $631,488,677, showing, that an annual amount of $195,113,356 has been drawn from the people, in the shape of taxes, and paid towards the extinguishment of our national debt. This amount was over and above the amount, drawn from the people to pay all the expenses of the Government in addition to the amount, required to pay the interest on the national debt.
Such a rapid withdrawal of the peoples means from their ordinary business, is quite sufficient to account for the ruin, now brought on untold thousands of the American people.
For our Government to continue such a policy and go on drawing taxes from the people ; as they have done to extinguish the national debt, before it is either due or wanted by those, who hold it, is about as wise as it was for Pharaoh to expect his people to make bricks without straw.
The people could and would willingly have paid the five dollars interest on every hundred dollars of the national debt. They could have paid the interest on the debt with enough of the principal to show, that they honestly intended to pay the whole amount.
This they could and would have done, if they had been permitted to retain the tools of their trades ; the amount of currency, on which they were compelled to depend for their ability to pay the taxes on the cost of the war.
I believe I have shown, that the policy, adopted by our Government to hasten a return to specie payments, has rendered the attainment of that object more distant and difficult, than it was at the close of the war of the Rebellion.
I am now convinced, that an opposite policy, one that would have legalized all the Government money in circulation at the close of the war, making it convertible into interest-bearing bonds, and reconvertible into currency at the will of the holder, would have established justice between the people and the Government, and would have caused our currency to appreciate to the value of gold long before this. It would have left the money, the sinews of war, the tools of trade, in the hands of the people, to enable them to meet the expenses incurred, and make the necessary provisions for the hundreds of thousands of disbanded soldiers, thrown back on their homes to find employment or starve.
In conclusion, I would say, that we have every reason to hope for our country. But we must not trust in the amount of our gold or other riches, but in the principles of our Constitution as free people, and in the free development of all our magnificent resources. We must turn again the tide of immigration, which is now leaving our shores. We can do this, as in the past, by continuing to offer a better reward for labor, and cheaper land for settlement, by a faithful administration of our laws in the interests of the people, and not of classes or monopolies, and by trusting in all questions of money and currency to the integrity and power of our Government, and not placing ourselves at the mercy of foreign capitalists nor submitting tamely to that war of commerce, which every nation is willing to make upon us, if we do not take effectual means for our own self-preservation.
PETER COOPERS NEW DEPARTURE.
To the Editors of the Evening Post :
In some of your late issues I find an article by S.S.P., entitled Peter Coopers New Departure, and an article with a similar title by my old and valued friend, John B. Jarvis. These communications allude to the fact, that 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. Colwells work on Ways and Means of Payment, p. 485.
That such a policy 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 almost 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.
My efforts to avoid the evils, that have befallen the finances of our country, will appear in petitions, sent by me to Congress, etc. . . .
In conclusion, I would say, that ever since paper money was issued by any civilized country, it has generally been assumed, that one dollar in coin would float from three to five dollars in paper ; but this has only been true in times of expanding credits. As soon as contraction came from any cause, a panic ensued, for it was found, that a dollar in coin was needed for every dollar in paper. Why then keep up this vain fiction any longer ? It can only serve to expand credits to an unwarrantable degree, while it permits another class to contract credits suddenly, and to a ruinous degree. It leads inevitably to panics. Now, it seems to me there is a plain way out of all these financial difficulties. If currency is issued only as an equivalent of bonds, then every dollar of the currency is at all times sustained, or floated by an equal value of the bonds of the Government. An expansion of currency can go no further than the actual equivalent, received by the Government for its bonds. A contraction of currency can go on no faster, than the conversion of the paper into bonds. Panics will be impossible, because there will always be a means, by which real assets can be at once converted into money. It is this want of ready conversion, that causes panics and ruins, even in well-founded houses, etc.
I have lived too long to enter now, at this late day of my protracted life, into the mere partisan disputes of the day. I have no other object or interest, than the welfare of the whole people of my country ; and, believing as I do, I should hold myself very much to blame, if I withheld my feeble testimony in this important crisis of the country, and on a question involving such momentous consequences as a sound currency and a true financial system. On these we must depend for the future prosperity and happiness of the whole industrial class, with whom I have ever been in sympathy. I confess to a most profound anxiety for all those, who, with their best efforts, find life a great struggle for a bare subsistence.
These troubles will be greatly lessened when gold becomes, as it should be, only a guide in the exchanges of commerce, as the mariner looks at the North star as his best guide over a dangerous ocean.
ADDRESS OF THE NATIONAL INDEPENDENT PARTY
TO THE CONVENTION AT INDIANAPOLIS, MAY 17, 1876.
Gentlemen of the Convention :
We have met, my friends, to unite in a course of efforts to find out, and, if possible, to remove a cause of evil, that has shrunk the value of the real estate of the nation to a condition, where it cannot be sold, or mortgages obtained on it for much more than one-half the amount, that the same property would have brought three years ago. This dire calamity has been brought on our country by the acts of our Government. The first act took from the national money its power to pay interest on bonds and duties on imports. The second act has contracted the currency of the country, until it has shrunk the value of property to its present condition by destroying public confidence ; and that without shrinking any of the debts contracted in its use.
I do most humbly hope, that I will be able to show the fatal causes, which have been allowed to operate and bring this wretchedness and ruin to the homes of untold thousands of men and women throughout our country.
Facts will show, that it was the unwise acts of our own Government, that have allowed a policy to prevail, more in the interest of foreign Governments than our own.
It was these unwise acts of legislation, that brought discredit on our national money, as I have said, by introducing into the law, which created it that terrible word except, which took from our legal money its power to pay interest on bonds, and duties on imports.
The introduction of that little word except into the original law drew tears from the eyes of Thaddeus Stephens, when he looked down the current of events and saw our bonds in the hands of foreigners, who would be receiving a gold interest on every hundred dollars of bonds, that cost them but fifty or sixty dollars in gold.
But for the introduction of that word except into the original law, our bonds would have been taken at par by our own people, and the interest would have been paid at home in currency, instead of being paid to foreigners in gold.
An additional calamity has been brought on our country by a national policy, that has taken from the people their currency, the tools of their trades, the very life-blood of the traffic and commerce of our country.
Facts show, that in 1865 there were in the hands of the people, as a currency, $58 per head, and that at a time of our greatest national prosperity.
We have now arrived at a time of unequalled adversity, with a currency in 1875 of $17.33 per head, with failures, amounting to two hundred millions of dollars in a year.
Among the causes, that now afflict the country, it may be well to look at the enormous increase in our foreign importations, which amounted to 359 millions in the year 1868, increased to 684 millions of dollars in 1873, and were 574 millions of dollars in 1875.
I think you will agree with me, when I say, that prosperity can never be restored to our beloved country by a national policy, that enforces idleness and financial distress on so vast a number of the laborers and business men of this country. Our nations wealth must forever depend on the application of knowledge, economy, and well-directed, labor to all the useful and necessary purposes of life, but also a proper legislation for the people.
The American people can never buy anything cheap from foreign countries, that must be bought at the cost of leaving our own good raw materials unused, and our own labor unemployed.
I find myself compelled to believe, that much of the past legislation of our country, in reference to tariff and currency, has been adopted under the advice and influence of men in the interest of foreign nations, that have a direct motive to mislead and deceive us. Our prosperity as a nation will commence to return, when the Congress of our country shall assume its own inherent sovereign right to furnish all the inhabitants of the United States a redeemable, uniform, unfluctuating national currency.
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 physical 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 present 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 which 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.
It will require all the wisdom, that can be gathered from the history and experience of the past, to enable us to work out our salvation from the evils, which an unwise legislation has brought on our country.
It will be found, that nothing short of a full, fair and frank performance of the first duty, enjoined on Congress by the Constitution, will ever restore permanent prosperity to us as a nation.
It is a remarkable fact, that the most essential element of our colonial and national prosperity was obtained by the use of the legal tender paper moneythe very thing, that our present rulers seem now determined to ridicule and bring into contempt. We are apt to forget, that the continental money secured for us a country, and the greenback currency has saved us a nation.
Sir A. Alison, the able and indefatigable English historian, has borne testimony to the superior power and value of paper money. He says : When sixteen hundred thousand men, on both sides, were in the continental wars with France in Germany and Spain alone, where nothing could be purchased except by specie, it is not surprising, that guineas went, where they were so much needed, and bore so high a price. ... In truth such was the need of precious metals, owing to this cause, that one-tenth of the currency of the world was attracted to Germany as a common centre, and the demand could not be supplied ; and by a decree in September, 1813, from Peterwalsden, in Germany, the allied sovereigns issued paper notes, guaranteed by Russia, Prussia, and England. These notes passed as cash from Kamtschatka to the Rhine, and gave the currency, which brought the war to a successful close.
In a recent edition of the History of Europe, Sir A. Alison gives an additional evidence of the important advantages, which experience has demonstrated to result from the use of paper currency.
He says : To the suspension of cash payments by the act of 1797, and the power in consequence, vested in the Bank of England, of expanding its paper circulation in proportion to the abstraction of a metallic currency, the wants of the country and the resting of the national industry on a basis, not liable to be taken away by the mutations of commerce or the necessities of warit is to these facts, that the salvation of the empire must be ascribed. ... It is remarkable, that this admirable system, which may be truly called the working power of nations during war, became at the close of the war the object of the most determined hostility on the part of the great capitalists and chief writers of Political Economy in the country. ... Here, however, says Alison, as everywhere else, experience, the great test of the truth, has determined the question. The adoption of the opposite system of contracting the paper currency, in proportion to the abstraction of the metallic currency by the acts of 1819 and 1844, followed, as they were, by the monetary crises of 1825, 1839 and 1847, have demonstrated beyond a doubt, that it was in the system of an expansive currency, that Great Britain, during the war, found the sole means of her salvation. From 1797 to 1815 commerce, manufactures and agriculture advanced in England, in spite of all the evils of war, with a rapidity greater, than they had previously done in centuries before. This proves beyond a doubt the power of paper money to increase the wealth of a nation.
It is worth while to observe, that this same 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 nations welfare.
Sir Walter Scott, in his Malachi Margrowthers Fetters, shows how the wealth of a nation is increased by paper money. I assume, he says, without hazard of contradiction, that banks have existed in Scotland for nearly one hundred and twenty years ; that they have flourished, and the country has flourished with them ; and that during the last twenty years particularly the notes, and especially the small notes, which the banks distribute, supply all the demand for a medium of currency. This system has so completely expelled gold from Scotland, that you never by any chance espy a guinea there, except in the purse of an accidental stranger, or in the coffers of the banks themselves. But the facilities, which this paper has afforded to the industrious and enterprising agriculturists and manufacturers, as well as to the trustees of the public, in executing national works, have converted Scotland from a poor, miserable, barren country into one where, if nature has done less, art and industry have done more than, perhaps, in any other country in Europe, England not excepted.
President Grant, in his message of 1873, said : 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. ... In view of the great actual contraction, that has taken place in the currency, and the comparative contraction continuously going on, due to the increase of the population, the increase of manufactories and of all industries, I do not believe there is too much of it now for the dullest period of the year.
Notwithstanding these recommendations of the President, Congress has continued to tax the people and contract the national currency in a vain effort to arrive at specie payments.
Our Government should have left that amount of currency in the hands of the people, which the necessities of war had compelled it to put in circulation, as the only means of the national salvation.
Every dollar of currency, paid out, whether gold, silver, or paper, was given out for value received, and thus became, by the act of the Government, a valid claim for a dollars worth of the whole property of the country. Hence not a dollar of it should ever have been withdrawn.
It is now almost universally believed, that had the Treasury notes continued, as at first issued, to be received for all forms of taxes, duties and debts, they would have circulated to this day, as they did then, as so much gold, precisely as the Government paper did circulate in France, when put upon the same footing.
This would have saved our country more, than one-half of the amount of the whole expenses of the war in the present shrinkage of values, and the interruption to honest industry. It would have saved us also from the perpetual drainage of gold to pay interest on our foreign indebtedness.
Gentlemen of the Convention ; I have heretofore enlarged upon what seemed to me the true financial policy of this country in pamphlets and writings, that I have had the honor to lay before the country, so that it would be a vain repetition to go much into that subject now.
The paper currency, commonly called legal tenders or greenbacks, was actually paid out for value received as so much gold, when gold could not be obtained.
This being an incontrovertible fact, it follows, that every Treasury note, demand note, or legal tender, given, out as money, in payment for any form of labor and property, received by the Government, became, in the possession of its owners, real dollars, that could not be taken constitutionally from the people, except by uniform taxes, as on other property.
But whether our currency will be always on a par with gold or not, I have shown from history, and incontrovertible facts prove it, that the commercial and industrial prosperity of a country do not depend upon the amount of gold and silver there is in circulation. Our prosperity must continually depend upon the industry, the enterprise, the busy internal trade and a true independence of foreign nations, which a paper circulation, well based on sound credit, has always been found to promote.
But I believe prosperity can never again bless our glorious country, until justice is established, by giving back to the people the exact amount of currency, found in circulation at the close of the war. That was the price of the nations life. It ought to be restored and made the permanent and unfluctuating measure of all values, through all coming timenever to be increased or diminished, only, as per capita, with the increase of the inhabitants of our country.
This currency must be made receivable for all forms of taxes, duties and debts, and convertible into interest-bearing bonds, at some equitable rate of interest, and reconvertible into the currency at the will of the holder. This, we believe, will secure uniformity of value to a degree, that gold has never attained. President Steele, of Lawrence University, has well said on this subject :
In fixing a standard, it is essential to select something, that is as nearly as possible invariable. The conventional unit of lineal measure must not be a line, which averages a foot, though it may be fourteen inches to-day and nine inches to-morrow. The bushel measure should not contain two or three quarts more or less at one time than at another. For the same reason it is desirable, that the unit of value should have the same purchasing power next week, that it has now.
In conclusion, Gentlemen, I think we have reason to congratulate ourselves on the great awakening of the public mind in regard to this question of finance. The people are beginning to recognize their rights and their duties in this matter. I think the time has come to exhort every one to go to the ballot-box and select good and true men, who will legislate in accordance with justice, the Constitution and the true interests of the people ; and give us what will always stand as a monument of political wisdom, a true national currency.
With devout wishes for the success of all measures, tending to this object, I remain yours, in the common interests of our beloved country,
THE PLATFORM OF THE INDEPENDENT PARTY.
The following is the platform of the Independent Party, as adopted by its National Convention at Indianapolis :
The Independent Party is called into existence by the necessities of the people, whose industries are prostrated, whose labor is deprived of its just reward, as the result of the serious mismanagement of the national finances, which errors both the Republican and Democratic parties neglect to correct. In view of the failure of these parties to furnish relief to the depressed industries of the country, thereby disappointing the just hopes and expectations of a suffering people, we declare our principles and invite all independent and patriotic men to join our ranks in this movement for financial reform and industrial emancipation.
FirstWe demand the immediate and unconditional repeal of the Specie-resumption Act of January 14, 1875, and the rescue of our industries from the disaster and ruin, resulting from its enforcement ; and we call upon all patriotic men to organize in every Congressional district of the country, with the view of electing representatives to Congress, who will legislate for, and a Chief Magistrate, who will carry out the wishes of the people in this regard, and thus stop the present suicidal and destructive policy of contraction.
SecondWe believe, that United States notes, issued directly by the Government and convertible on demand into United States obligations, bearing an equitable rate of interest (not exceeding one cent a day on each one hundred dollars), and interchangeable with United States notes at par, will afford the best circulating medium ever devised ; such United States notes should be a full legal tender for all purposes, except for the payment of such obligations as are by existing contracts expressly made payable in coin. And we hold, that it is the duty of the Government to provide such a circulating medium, and we insist, in the language of Thomas Jefferson that bank paper must be suppressed and the circulation restored to the nation, to whom it belongs.
ThirdIt is the paramount duty of the Government in all its legislation to keep in view the full development of all legitimate business, agricultural, mining, manufacturing and commercial.
FourthWe most earnestly protest against any further issue of gold bonds, for sale in foreign markets, by means of which we would be made, for a longer period, hewers of wood and drawers of water for foreign nations, especially as the American people would gladly and promptly take at par all the bonds the Government may need to sell, provided they are made payable at the option of the holder, although bearing interest at three and sixty-five one-hundredths per cent. per annum, or even a lower rate.
FifthWe further protest against the sale of Government bonds for the purpose of buying silver to be used as a substitute for our more convenient and less fluctuating fractional currency, which, although well calculated to enrich the owners of silver mines, yet in operation will still further oppress through taxation an already overburdened people.
PETER COOPERS ACCEPTANCE.
NEW YORK, May 31, 1876.
Hon. Moses W. Field, Chairman, and Hon. Thomas J. Durant, Secretary of the National Executive Council of the Independent Party :
GENTLEMENYour formal, official notification of the unanimous nomination, tendered by the National Convention of the Independent Party at Indianapolis, on the 17th instant, to me for the high office of President of the United States is before me ; . . . together with an authenticated copy of the admirable platform, which the Convention adopted.
While I most heartily thank the Convention through you for the great honor they have thus conferred upon me, kindly permit me to say, that there is a bare possibility, if wise counsel prevails, that the sorely needed relief from the blighting effects of past unwise legislation, relative to finance, which the people so earnestly seek, may yet be had through either the Republican or Democratic party ; both of them meeting in national convention at an early date.
It is unnecessary for me to assure you that, while I have no aspiration for the position of Chief Magistrate of this great Republic, I will most cheerfully do what I can to forward the best interests of my country.
I, therefore, accept your nomination, conditionally, expressing the earnest hope, that the Independent Party may yet attain its exalted aims, while permitting me to step aside and remain in that quiet, which is most congenial to my nature and time of life.
Most respectfully yours,
(From the New York Mercantile Journal.)
The New York Herald has just sent one of its corps to Peter Cooper, who thus was led to give a casual review of the present financial and political situation. It is needless for us to say, that anything, dictated by Mr. Coopers clear head and honest heart, is eminently worthy of attention:
With a split at St. Louis, said our venerable fellow-citizen, Mr. Peter Cooperwith a split at St. Louis and the election of President, thrown into the House of Representatives, I regard my possible selection as President of the United States with positive alarm. And yet, continued the aged patriot, as a mild zephyr from the southwest wind gently lifted his locks and brushed them out upon his shoulderand yet I am ready for the sacrifice. Its hard to give up the comforts and conveniences of a home in exchange for the push and tussle of a life in Washington ; but I will respond to the call of my country. For her sake I am ready to give up life itself. So probable is the success of the soft money ticket that I am most anxious, if I can retire with honor, to have Governor William Allen, of Ohio, in my place. The people dont know that man enough. In the early days, when these principles were but little understood, Bill Allen was firm and uncompromising. He was able, bold, clear, defiant, enlightened, far-seeing and thoroughly well-informed on this great subject of financeso little comprehended, even now, by many, who write and talk with most pretense. The Herald of this morning gives the world a good idea of Governor Allen. It could not be improved on. At dinner today Judge Proctor Knott, of the House of Representatives, told me, that he knew Governor Allen well, and that he is one of the ablest and purest of men. All accounts agree in representing him as a singularly able man, of keen foresight, sound judgment, and practical sense. Allen is a man of tremendous nerve. He is firmness personified, and, if he were President, the people would understand, that they had a man at the helm with a will of his own, and a conscience behind it.
REPORTER You appear confident of a split at St. Louis.
Mr. CooperYes, sir, I do. We can hope for nothing from the Republicans. They are joined to their idols. Hard-money is their god, and an absurd divinity it is to be sure. I wonder, if they ever read Ben Franklin. Ben was a great man in his way. And how admirably he put this very matter years and years ago. He said : Gold and silver are not intrinsically of equal value with iron. Their value rests chiefly in the estimation they happen to-be in among the generality of nations. Any other well founded credit is as much an equivalent as gold or silver. Paper money, well founded, has great advantages over gold and silver, being light and convenient for handling large sums, and not likely to have its volume reduced by demands for exportation. On the whole, no method has hitherto been formed to establish a medium of trade equal in all its advantages to bills of credit made a general legal tender. Of course, the Republicans see no wisdom in this. They have found a convenient war-cry, and will doubtless hold to it. So I place them entirely one side. They will nominate their candidate distinctively as a hard-money man. For him the hard-money Republicans will vote, of course. If there shall be at the same time an objectionable soft-money man in the field, for whom would the soft-money Republicans be most likely to vote in this crisis ? And this is a crisis. It is a crisis, which may well make a patriot tremble. We are drifting to bankruptcy, thence to starvation, and thence to revolution, etc. .... Mr. Tilden came into line in time to join the hurrah and get his reward. .... The three tickets will go before the people. Therell be no choice. And then I see, with dread and apprehension, that, as General Butler said in the Herald on Saturday, the soft-money ticket will sweep the House. Governor Allen must be on that ticket, and yet, if Heaven wills it so, I am ready to be sacrificed.
R. Not much of a sacrifice either, is it ? Peter Cooper President and $50,000 a year isnt a very awful fate.
Mr. C.Well, Mr. Allen is some years younger than I am. As for the $50,000, I shouldnt touch the money. I should give it away, or turn it over to the Cooper Union, perhaps.
R. Are the strikers after you much ?
Mr. C.Tolerably, or rather intolerably. I get letters and applications from everywhere and everybody. A great many newspapers want help in carrying on the great principles of soft-money doctrines. They are mainly from the West, but some are nearer home. The Herald is always very courteous in printing facts and news about us and our progress. I dont intend to send these applicants any money, but I send all of them my pamphlets and our documents for their comfort and instruction. I get letters from all sections of the country, giving information about organizations, and before long demonstrations will be made. The labor unions are taking an active interest in the matter. The Bricklayers Union are heart and soul in the movement. They tell me they see the folly of strikes, and hope to be able to carry their points hereafter without recourse to that absurdity. The laboring men of the country seem to have confidence in me as one of themselves, and that may make it difficult and inexpedient to substitute Governor Allen for me, but I fervently hope and pray to effect that end, etc. . . .
WASHINGTON, February 21, 1874.
My Dear SirAccept my thanks for your long and instructive letter about finance. I have read it carefully and hope to profit by your suggestions.
With high respect,
Your obt. Sert.
Address at Music Hall, New Haven, Conn., March 31, 1876.
(From the New Haven Union.)
The spacious edifice was crowded in every part ; the aisles and lobbies, being packed and every seat taken, before the meeting was called to order. Hundreds were turned away unable to get even a glimpse of the platform, or within hearing of the speakers, etc., ... magnificent was the sight, when that grand old man, Peter Cooper, rose to offer words of advice to the mighty throng ! The audience treated the great American philanthropist to a perfect ovation, and every heart seemed to swell with pride and emotion when the workingmans benefactor stood before them in animated form. It falls to the lot of few men to have such homage paid them, while in the flesh ; but the Father of the Universe is just, and Peter Cooper in hoary old age receives, as he deserves, the greatest tributes, that can be offered by a grateful people to one of their fellows, whose whole life has been devoted to humanity and the elevation of the poor and lowly.
We knowwe feel in our very soulthat the truthful words of advice, offered by the worlds greatest philanthropist, were not in vain. Mr. Cooper is beyond the villification of political manipulators and subsidized editors. No man can be found so base as to charge, that he, in his eighty-seventh year, would journey seventy-five miles for the purpose of aiding a fraudulent or an unrighteous cause. The instincts of the honest old veteran teach him, that this country is being led on to destruction under the guidance of the money power, and, though at painful sacrifice, he feels it his duty to warn the people of their danger. Peter Cooper is no illusionist. He does not desire repudiation or inflation. He is the personification of Honesty and Truth, and all the wealth in the world would not induce him to espouse a dishonest cause, etc., . . .
A part of the words of solid truth, given by Mr. Cooper on this occasion, were 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 ?
This is the unsound theory which possesses the minds of our people and of our politicians.
We must cut loose from this unreasonable theory, or we shall be subject, for all time, to these periodic disturbances of our currency, which bring such wide-spread ruin and distress to our commercial industries, and work, on the part of the Government, positive and cruel injustice. The remedy seems to me to be very plain.
FIRST.We must put this whole power of coining money or issuing currency, where, as Thomas Jefferson says, by the Constitution, it properly belongs entirely in the hands of our Government. That Government is a Republic ; hence it is under the control of the people. Corporations and States have hitherto, in some form or other, divided this power with the Government. Hence come the embarrassments and the fluctuations, as may be easily shown.
But now we must trust our Government with this whole function of providing the standards and measures of exchange, as we trust it with the weights and measures of trade. So far from putting the people in the power of our Government and at the caprice of parties in power, I contend it will bring the Government more under control of the people and give a check to mere party rule. For the more stake the people have in the wisdom and honesty of the Government, the more watchful and firm they will be in its control.
SECONDLY.We must require the Government to make this currency, at all times, and, at the option of the individual, convertible. But the currency must be convertible into something, over which the Government has entire control, and to which it can give a definite as well as a permanent value. This is its own interest-bearing bonds. These are, in fact, a mortgage upon the embodied wealth of the whole country. The reality of their value is as sound and as permanent as the Government itself, and the degree of their value can be determined exactly by the rate of interest the Government may think proper to fix.
If I should speak to you for hours on this subject, I could only enlarge upon the advantages of such a system. Let the National Government issue paper money, whose volume shall be regulatedin exact accordance with the needs of Commerceby its interchangeability, at holders option, with Government bonds, bearing an equitable rate of interest. Let the Government disburse this money only in payment of its indebtedness, and make it receivable for taxes and imposts of every kind. Depend upon it, under this system, your taxes would be greatly reduced, business would revive and hereafter remain free from exposure to disastrous panics.
OPEN LETTER TO THE CANDIDATES FOR THE PRESIDENCY, NOMINATED BY THE REPUBLICAN AND DEMOCRATIC PARTIES, IN CONVENTION ASSEMBLED.
NEW YORK, July 25, 1876.
Hon. R.B. Hayes and Hon. Samuel J. Tilden.
GENTLEMENI find myself impelled by an irresistible anxiety for my country ; by the palpable facts of distress and suffering, that surround me, and which, I am compelled to know, pervade the families of the great mass of our people ; by the earnest calls, that have been made to me from all parts of this great country ; and especially, by the solemn and deliberate act of an earnest and intelligent body of my fellow-citizens, in convention assembled, who, setting forth clearly their convictions as to the real cause of this widespread distress among the masses of our countrymen, have called upon me to represent those convictions, and nominated me as their chief executive to carry them out ;by all these considerations I feel called upon to address a few words to you, who now hold the nominations of the two great organized political parties in this country for the highest position of responsibility as to the future happiness and prosperity of this great people.
Far be it from me to attribute any want of patriotism, or any unworthy motive to your honorable selves, or to the leaders of those Conventions, which have nominated you both, respectively, to the high office of the President of the United States. But the imminent question of the day, that which touches the cause of the present financial ruin and suffering of so many, is one of such palpable facts and simple deductions therefrom, that I must think there is some mistake in the radical principle, by which these facts are viewed by you and the great parties, which you represent. I find in the platforms of the conventions of the two great parties no adequate expression, either of the facts, the causes, or the principles, that underlie the present great distress of our nation, when thousands of honest, industrious people are filled with anxiety for the bread of their families, or are suffering already from an inadequate supply. This seems to me the great and paramount question of the day, to which our chief thought and most efficient action should be directed, and before which all other questions should sink into insignificance.
What is the cause of this wide-spread ruin and present distress ? and what is the immediate remedy ?
A few facts of history and of public record will show this. According to Spauldings 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 $2,808,549,437. 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 $1,100,000,000and gold reached its highest quotation, 285.
Now, be it remembered that, although a few moneychangers, 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 6 per cent. in gold ! In the course of less than eight years this change was effected, and the peoples money and currency of all kinds were reduced subsequently from $2,192,395,527, as represented on the Treasurers books 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 $1,561,906,8511 (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 of Banking and Currency, said from his seat in Congress on the occasion of Mr. Brights 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 peoples moneythe very tools of their trades and enterprises 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 lastedthis 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, which were 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 on gold.
These are the facts. The panic of 1873 and all the consequent distress of the industrial classes of our country, and its baffled enterprise, are distinctly due to the contraction of the currency to this enormous extent during the eight years preceding 1873. It stopped credit, production and consumption, and made much of what currency was left, rush in a panic to the head money-centresas the blood in an apoplectic fit rushes to the headwhere this money is now vainly seeking investment in first-class security at two per cent.; while the country at large is palsied in its enterprises and industries for want of this very currency. And what was all this done for ? To change the debt of the country without reducing its real amount from a shape beneficial to the people, and incorporated as an integral part of the very life-blood of all their rising industries and their growing tradethis paper currency was turned, almost with the suddenness of a conjuration, and by the forms of an arbitrary construction of law, into another shape, twice in amount as measured by the same paper, and taxing the people with interest on it in gold, to the amount of $94,684,269 per year, (see statement of the public debt, June, 1876.)
Most of this interest is now paid to foreign bondholders, alien to our institutions and uninterested in our prosperity, except to keep up our ability and willingness to bear taxation.
And what is the specious reason for this change ? To return to specie payments !
What can this policy result in but a further distress and impoverishment of this people, and the building up of the interests of a class, whose business it is to invest or to lend money, and whose policy will be to get the highest rate of interest ? We may concede all, that is claimed of the necessity of specie payments, and our currency being made on a par with gold. But this disastrous and ill-judged method of reaching specie payments, by the past and present contraction of our currency, is very unjust and cruel to our people ; for it shrunk the value of all property, so that it could not be sold, or mortgages obtained on it for more than one-half the amount the same property would have brought three years previous, and reduced the wages of labor to the same degree. This return to specie payments may be made without such injury, by honoring the currency in every way ; by making it exclusively the money as well as the legal tender of the country ; by receiving it for all forms of taxes, duties, debts to Government, as well as the payment of all private debts ; by establishing its value on a firm basis, at a fixed and equitable rate of interest, which it may always find in an interconvertible bond ; and by determining the volume of the currency, where the unobstructed laws of the internal trade and industry of this country may require it to be, under the free use of the interconvertible bond. This great national debt ought to be held as a great trust by the Government of this people, and made the receptacle of all the trust funds, and the savings of all the poor among our own people. It should be an investment put within the reach of our own people, instead of being sent abroad to swell the coffers of the rich in other countries.
If the Government, after the war of Rebellion, had been as anxious to heal the wounds, which that unhappy war created, to alleviate the poverty, which it brought on a large section of our country, to reinstate the broken industries and enterprises of our whole people, as it had been to carry that war vigorously, at any cost, on to victory, the Government would have seen ; that peace had its demands as well as war. If a Government is bound to protect the people from the aggressions of war, it is also bound to save it from commercial distress and the sorrows of a laboring population without work. The Government might now free hundreds of thousands from imminent want, and set the wheels of trade again in motion by building the two great railroads across the continent at the southwest and northwest of the country, that private enterprise has already commenced, but cannot complete, for want of capital. The legal tender of a solvent country like this cannot be called a debt in any proper sense of the word. It is money and measures the exchangeable value of all property, gold included. All must see that the currency, paid out by the Government for value received, became the peoples money, over which the Government lost all control, except to tax it as all other property to meet the wants of Government. This amount of money even now may be given back to the people in works of great national importance, like that of a Northern and Southern Pacific Railroad, that would to-day be worth their cost, in aiding to put down the Indian wars, that now threaten the frontier of our country. What is a Government good for, if in such a country as this, with all its material resources and vast extent, it cannot prevent a large part of its people from the distress of want of work and bread ? This seems to me the first duty of Government.
Sorry am I to see, and I say it without any reproach cast upon the integrity of those concerned, that in neither of the platforms of the political parties, that represent the governing intelligence and wealth of this country, is this great question of finance either discussed or recognized in its principles, or bearings upon the happiness and prosperity of this peopleexcept in a way, that seems to me adverse to both.
I have, therefore, consented with great reluctance to go before the peoplenot for the strife of office, not for the petty triumphs of a successful candidate, but for the vindication of a great principle, that underlies all true Republican or Democratic Institutionsnamely, that the interest and happiness of the whole people are superior to the demands or interests of any one class ; that in the neglect or defiance of this principle, the great debt of this people, incurred by a war to save the life of this nation, has been administered too much by the advice, and in the interest of a small class, that care for their income, but cannot look out for, or attend to active investments ; hence, they prefer the bond to the currency ; and for another class, who desire the highest interest for the smallest investment ; hence they prefer gold to a paper legal tender ; and for still another class, who alien to our institutions and country, care only to tax its energies and wealth for the highest interest they can draw for an immediate investment of their money. But these are not the interests of the people of this country. Neither honor nor justice requires such administration of the public debt of this country.
I feel, therefore, constrained by every principle of honor and love for my country, to come forward at an advanced age, and with a mind, that would gladly seek repose, after the toils of a long and laborious life, to answer the call of a portion of my countrymen, to try these issues before the people of the whole country ; to test these truths, which we hold to be self-evident, as soon as they are honestly examined, as are the truths of the Declaration of Independence. One of the chief of these truths is that, as all rightful Governments are made for the people and by the people, they must be administered with a parental care in the interests of the whole people, and not for a class. No single interest touches the domestic comfort and prosperity of the people as this one of the currency ; and in the present condition of the country, none is of so much immediate importance, or calls for more immediate solution. To put off this question, therefore, with vague expressions of reform, and the desirableness of specie payments, is to ignore the ruling interest of the hour. It is to surrender the people to their sufferings without any promise of remedy.
I appeal, therefore, 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 organized to protect their interests and obtain some recognition of their rights from the Government of the country. Let them substitute co÷peration 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.
Let us have our national currency duly honored ; let us take the testimony of the nations experience, and that of other countries, as to what such a 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 goldthen we shall have peace on this question. Justice will be established, and the general welfare promoted ; prosperity, again, will revisit 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, 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 defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity.
To my present friends I need not say, that this sacrifice of peace and rest is like the surrender of what remnant of life I may have. But to the country at large I will say, that I am willing to stand in the place, where I have been put by the judgment of an intelligent and honest portion of my countrymen, to stand with them and try before the whole people this cause of the peoples money, and the true financial policy of this Government.
Most respectfully yours,
LETTER ON FINANCE.
NEW YORK, August 21, 1876.
Hon. Moses W. Field, Chairman, etc., etc.:
DEAR SIRI must beg you to accept the warm weather incident to this season of the year (together with the thought which forces itself upon my mind, that my presence might possibly cause some personswho do not know meto think, that I was electioneering) as a sufficient apology for not accepting your kind invitation to join our friends in the Convention at Chicago on Wednesday next.
I shall be with you, however, in spirit, and also by the presentation of thousands of pamphlets, which give my views on the most important issues of the day, and some of the errors of public administration, to which both the Republican and Democratic parties neglect to give attention.
I waited long and with, I trust, a fair degree of patience, for Governor Tildens letter of acceptance, entertaining the hope, that I might find sufficient ground for retiring from the field as a candidate, nominated for the same office. But in this I was disappointed, as he indicates a determination, similar to that expressed by Governor Hayes in his letter of acceptance, to the effect that, if successful in the canvass, no step backward from the wrong policy, pursued by the Government relative to finance, will be taken, notwithstanding it has ruined untold thousands and brought sore distress upon honest toilers throughout the land, etc. . . .
It is extremely difficult to frame an apology for the course of financial legislation, that has been adopted by the Government of our country, and is still insisted on by both political parties. I find, on a close examination, that it is just such a policy as men and nations would advise, who have a direct and immediate interest to mislead and deceive us.
The legislation of our country, on this subject of finance, has been nearly identical with that, adopted by Great Britain during and after her Napoleonic wars, and is attended with similar results. The English Government caused a suspension of specie payments for more than twenty years. Those years of suspension proved to be the years of Englands greatest prosperity.
A similar policy has paralyzed all our industries, and has brought suffering to millions of the American people ; and this must continue as long as the present contraction of the currency is allowed to go on.
I here repeat my belief, that prosperity will never again bless our glorious country, until justice is established, by giving back to the people a sufficient volume of currency, with which to transact business. This can only be assured by the use of national paper money in defraying all proper expenses of the Government.
When our Government has secured to the people one kind of paper money, receivable for all forms of taxes, duties and debts, and interconvertible with national bonds, bearing an equitable rate of interestwhen such an inestimable blessing has been secured to my beloved country, I shall be able to say, with one of old, Lord, now lettest thou thy servant depart in peace, for I have seen the salvation of my country.
Very respectfully yours,