SEVEN FINANCIAL CONSPIRACIES

CHAPTER IV.
CONTRACTION.

THE third scheme of robbery was that of contracting the currency by destroying the greenbacks.  In pursuance of this plan the act of April 12, 1866, was passed whereby it was provided that a regular and systematic cremation of greenbacks should take place.

Let it be remembered that upon this government money the greenback, the people did not pay interest.  It was backed by the government, which made it safe and reliable, and issued in sums convenient for small as well as large business transactions.  The money monger, with $1,000 in greenbacks, had found it necessary to employ that money in order to derive any profit from it.  This added to his care, which apparently was the very thing he sought to avoid ;  investments in commerce and manufacturing required his personal supervision ;  investments in houses and land incurred taxation, risks, and often loss ;  but investment in bonds seemed quite suited to his esthetical tastes, for they returned a rich golden harvest, without any of the annoyances of taxation, insurance or even the care of looking after his investments.

Is it any wonder he hailed with joy the contraction policy, and gladly gave his $1,000 in greenbacks (to be consigned to the furnace), in exchange for a $1,000 untaxed, interest-bearing bond ?  But what of labor seeking employment ?  Shylock has invested his property in bonds, he has no need of labor ;  true, labor must pay the interest on his bonds, but he has no employment for it.  While this $1,000 was in government money it could have given two men employment in some profitable business ;  but with his money invested in bonds, he kicks labor into the street and growls about the inefficiency of the tramp law.  He does nothing whatever to advance the interests of labor, but drains its life-blood in payment of his everlasting interest.  By investing the $1,000 in bonds it is taken from circulation.  There is $1,000 less for the people to do business with, and $1,000 more for them to pay interest upon.

Again, by contracting the volume of money it lowered the prices of other property and added that much more to the burdens of the debtor class.  For instance, Mr. Burt bought a farm for $6,000, when wheat was $2 per bushel.  He paid $3,000 cash, and placed upon it a mortgage for the remaining $3,000, which he expected to pay with wheat at $2 per bushel.  A part of the $3,000 cash invested in the farm was Mr. Burt’s savings from his services in the army.  He was a good soldier and bore testimony of having seen active service.  He was one of the first to enlist, and stood by the old flag until the last shot was fired, then he returned home, determined to spend the remainder of his days in the enjoyment of that peace so nobly won ;  accordingly he purchased his farm, little dreaming of the vicissitudes that awaited him.

Before the first pay day came the money of the country had been contracted 25 per cent, the price of wheat had been reduced in the same ratio, from $2.00 to $1.50 per bushel.  Neither the debt nor interest had in any way been contracted, and Mr. B. found it necessary to hire $250 to make up his payment.  He had not been disappointed in his wheat crop, it was even better than he expected, but for some inexplicable reason the price was not what he expected.  He was told there had been an over-production of wheat, that the supply was greater than the demand ;  and yet he knew that one of his neighbors, a day laborer, had never been so hard pushed to keep the wolf from the door.  The laborer was sober and industrious, Mr. Burt had often employed him ;  but since the price of wheat had declined, he must economize, and the first step in economy was to reduce the wages of his “help.”

When the next payment came due, wheat brought but $1 per bushel, and Mr. Burt was obliged to hire $500 to meet his payment.  In applying to a national banker for assistance, he found that “money was scarce, but he would try and get it for him at one per cent a month.”  Mr. Burt concluded to look farther, and after a long search found a “friend” who decided to let him have the amount at 10 per cent in advance.  This, taken from the $500, left him $450.  The other $50 was made up by selling a few sheep and the best cow.  Heretofore the butter had furnished Mrs. B. the means for keeping the children respectably clothed, but now the cow had gone and there was no means of replenishing their clothing.  Susan, John, Willie and even little Mary, were extremely sensitive, and when their clothes began to be shabby their fondness for the Sunday school declined.  Mr. Burt did not renew his church subscription that year, and it was very uncomfortable for him to sit in his pew and hear the minister preach about the worldly minded man, who thought more about the price of wheat than of his soul’s Salvation, and who grew so avaricious that he would not subscribe for the support of the gospel.  Mr. Burt listened to what the preacher said, but his heart grew hard, his clothes grew shabby, and his attendance at church grew infrequent and finally ceased altogether.

A few weeks before the third and final payment came due, Mr. Burt sold his wheat at 75 cents per bushel ;  a fine crop, but it failed to meet the requirements of the contract, foreclosure followed, and Mr. Burt and family were turned penniless into the street.  Setting out in search of work he unfortunately reached Michigan just after her tramp law had taken effect.  Wandering from place to place, shabbily dressed and “without any visible means of support,” he was finally arrested for vagrancy, and sent to the penitentiary.  Disheartened and overcome by a feeling of disgrace, he soon sickened and died.  His friends, ignorant of his whereabouts, knew nothing of his sad fate.  Twenty-four hours after his death, on a bleak December day, a rough wooden box was landed at the basement window of the medical department of the Athens of Michigan, and a few days later a subject with care-worn look and locks prematurely grey, was laid upon the dissecting table.  The students jocosely remarked that “the old fellow must have been a soldier, judging from the number of scars upon his person.”  But there was one student who did not join in the merriment of his companions.  He earnestly scanned the features of the dead man, and half an hour after the dismissal of the class a missive was winging its way to the state penitentiary.  The next day the expressman brought a little package to the serious student.  He opened it with trembling hands ;  alas, his conjectures were realities.  The package contained a few articles of clothing, and in a little soiled packet he found some mementoes from his father’s house, among them the picture of a beautiful maiden, his sister Mary, and by her side a young man in soldier’s uniform.  The blood curdled in his veins.  He remembered when that picture was taken, though only a child ;  the occasion was indelibly fixed upon his mind.  It was the day that his sister was married to the soldier—Joseph Burt—the pauper of yesterday, the victim of the dissecting knife.  Spared from the shot and shell of the battlefield to die a pauper’s death, and to suffer a fate that none but criminals should ever know.  Ah, my country ! where is thy gratitude ?

Through the contraction of the currency Mr. Burt’s debt was doubled, and what is true of this unfortunate debt is equally true of the debt of the government.  Notwithstanding John Sherman said to the laboring people of Ohio less than a year ago that “the debt is nearly paid off,” yet it is a fact that this debt is a greater burden upon us today than it was at the close of the war.  That is, our debt-paying power has been reduced in a far greater ratio than the debt itself, and today it would take more bushels of wheat, more tons of hay, or more bales of cotton, to pay our national debt than it would have taken at the close of the war.  What is true of the debt is equally true of the interest, and notwithstanding we have paid interest enough to have twice paid the original debt, it will take more pounds of beef, pork, or wool, more day’s labor to pay our interest this year than it took in 1866.  The effects of contraction on the morals of the country is briefly depicted by a Georgia editor as follows :

In 1868 there was about $40 per capita of money in circulation ;  cotton was about 30 cents a pound.  The farmer then put a 500 pound bale of cotton on his wagon, took it to town and sold it.  Then he paid $40 taxes, bought a cooking stove for $30, a suit of clothes for $15, his wife a dress for $5, 100 pounds of meat for $18, 1 barrel of flour for $12, and went home with $30 in his pocket.  In 1887 there was about $5 per capita of money in circulation ;  this same farmer put a 500 pound bale of cotton on his wagon, went to town and sold it, paid $40 taxes, got discouraged, went to the saloon, spent his remaining $2.30 and went home dead broke and drunk.

There is no doubt but it was the avowed policy of the party in power to retire from circulation and utterly destroy every dollar of greenback currency.  Words are inadequate to express the horror that such a movement would have precipitated upon the people.  It is enough to know the results of ten years of such legislation.  Ten years in which our government circulation was reduced nearly fourteen hundred million dollars, and swept into the vortex of financial ruin thousands and tens of thousands of our grandest and truest men.  In the words of a philanthropic journalist we will review the history of the ten years of contraction :

On the 12th day of April, 1866, congress passed a law authorizing the secretary of the treasury to sell 5-20 bonds, and with the proceeds retire United States currency, including greenbacks.
    On Dec. 4, 1866, E.G. Spalding, a Buffalo, N.Y., banker, a member of congress, wrote to Secretary McCulloch as follows :
    You, no doubt, now, to a certain extent, have control of the currency of the country, and I think that you will, of necessity, contract moderately, so as to preserve a tolerable easy money market.  There may be occasional spasms or tightness for money, but generally, I shall look for plenty of money, for at least one year to come.
    When this letter was written the country was in possession of $1,996,687,770 currency.
    During this year, there were but 520 business failures in the whole country, involving a loss of but $17,625,000.
    Labor was well paid and fully employed.
   

1867.

    This year the work of contraction was vigorously pushed, and there were 2,386 failures, with a total loss of $86,218,000.
   

1868.

    During this year, $473,000,000 of money was destroyed, and failures increased to 2,608, with a loss to creditors of $63,774,000.  Money began to be tight, and financial “spasms” were frequent.
   

1869.

    During this year over $500,000,000 of money passed into the cremation furnace, producing 2,799 business failures, and a loss of $75,054,900.  Money growing tighter and wages lower.
   

1870.

    This year $67,000,000 of money was destroyed, and 3,551 failures took place, involving a loss of $88,242,000.  Money very scarce and wages of labor were reduced all over the country.
   

1871.

    Thirty-five millions of money this year is retired, with 2,915 failures and a loss of $85,250,000.  More men out of work and wages cut down.
   

1872.

    Only about $12,000,000 was destroyed this year, but such had been the strain upon the business of the country for the past five years that this proved the last straw to 4,069 business firms, involving a loss of $121,058,000.  More cutting of wages and strikes talked of.
   

1873.

    This year the storm reached its climax.  Business had hoped that, with every returning season, prospects would brighten and money would become plenty.  Instead of this, however, notwithstanding but $1,609,000 were destroyed, the people became panic-stricken, and 5,183 business firms were precipitated, with a loss of $228,499,000.  Five hundred thousand men are thrown out of employment, wages cut down all over the country, and strikes are of frequent occurrence.
   

1874.

    Notwithstanding the terrible results of the last year, the wine-press of contraction still creaks on its hinges of death, as round and round it sweeps out of circulation $75.484,000 certificates of indebtedness, which have been made legal tender money, $85,760,000 treasury notes, $6,335,045 legal tenders, $3,000,000 fractional currency, and $1,000,000 bank notes, producing 5,832 failures, and a loss of $155,239,000 to creditors.  A million idle men began to tramp in search of work.  Wages still decline and strikes more numerous.
   

1875.

    The volume of currency, this year, was contracted $40,817,418 and the failures reach 7,740, with loss to creditors of $201,060,000.  Two millions of laborers out of work.  Famine and hunger begin to stare them in the face, and “tramping” becomes a profession.
   

1876.

    According to the most reliable estimates, the contraction of the currency this year, in the destruction of greenbacks, and the withdrawal of bank currency amounts to about $85,000,000, with 9,092 failures, and $191,000,000 loss, during the first quarter of the year.  The aggregate failures of the year reached over 10,000, with losses not less than $300,000,000.  This does not include losses to stockholders, by foreclosure and sale of railroads.

What a record for ten years !  Who wonders times were hard, and men idle ?  Still with all this array of wreck and ruin, with the finger-board of contraction at the close of each year, pointing to the cause, the people were asleep, or on their knees praying for some interposition of Providence in their behalf, while John Sherman went marching on with the torch of death, to burn the remaining $300,000,000 of the the people’s money.
    Three million men are out of employment.
    Bankruptcies multiplying with great rapidity.
    The tramp nuisance culminates.
    Wages are cut down to starvation prices.
    Strikes, riots and general consternation seize the people, and the circulation is cut down to $606,000,000.

1877.

The red torch of the vandal lighted up the country from Pittsburg to Chicago.  These are the footprints of the red-mouthed despots, the money power, which is still forging chains for the limbs of American industry, with a view to enslaving the American populace by robbing them of their homes and firesides, and thus controling their life, liberty, and pursuits of happiness by controling their wages through the control and monopoly of money.

These are God’s truths which the people can heed and be saved, or heed not and the Republic be lost.