Benjamin S. Heath"Ill fares the land, to hastening ills a prey,
Where wealth accumulates and men decay;
Princes and lords may flourish or may fade,
A breath can make them as a breath has made;
But a bold peasantry, their country's pride,
When once destroyed can never be supplied."
The world has always contained two classes of people, one that lived by honest labor and the other that lived off of honest labor.
In early times the former had fixed habitations, occupied their time in tilling the soil and raising flocks and herds. They provided for their own wants; they had few incentives to crime and violence.
They were governed more by their natural instincts of justice, and respect and attachment for one another, than by arbitrary rules, hence their government was simple, democratic and inexpensive.
The other class consisted of roving bandits, who banded together under chiefs or leaders, and subsisted by swooping down upon and plundering the peaceful herders.
After years of marauding, a band, strong enough, would select a certain territory, rich in products and producers, overcome and subdue the people and then divide the spoils between themselves according to rank.
Each brigand had his portion of the territory set off to himself, and each was invested with a title to nobility according to rank, and possessions, and clothed with authority to exact from each of his serfs, or tenants, such contributions as the robber chief and his council might determine.
The chief became "monarch," his brigands "nobility," and thus was royalty and aristocracy established. That aristocracy might be limited to the royal few, and not be lost and diffused among the plebeian masses, the law of primogeniture was established, entailing upon the eldest son of each noble, the exclusive right to inherit the estates and title of the father.
The throne of England was established by the chief of a Norman banditti, her titles of nobility inherited from freebooters, and her soil wrenched from its rightful owners whom they reduced to serfdom, as the curfew bell proclaimed the "Divine right" of robber rule.
Thus did bands of ruffians parcel out the world, divide it into dominions, and establish thrones on an assumption of power, for their own personal aggrandizement.
They considered the conquered not as prisoners, or citizens, but as property whose toil and products belonged to them and not to the conquered.
As civilization advanced, and robbery became obnoxious to the more sensitive and refined intelligence of the age, as royalty became ashamed of its ancestry, its successors have attempted to obliterate the history of its beginning by assuming new relations to the balance of humanity, and new appearances to cut off the entail of its disgrace, while its principles and its objects remain the same.
What was originally plunder, has assumed the softer names of revenue and rent, and the powers which royalty usurped, it affects to inherit.
Thus was monarchy in Europe established, the divine right to rule inherited, and the titles of nobility originated.
The same two classes exist to-day, as of old, both in Europe and America. We have the toiling, tax-paying producers, and the idle, non-taxed, who absorb the fat of the land without labor.
The valleys of this grand republic, with their unparalleled resources, and their millions of industrious, intelligent toilers, afford tempting inducements to the avarice of civilized brigandage. But instead of collecting their horsemen, they collect lobbies, and marshal them against state and national legislatures. Instead of captains, they select lawyers. Instead of mail and spear they use statutes. Instead of scooping up the wealth of the valleys and leaving the peasants free, modern brigandage demands the increase for the next century, and has set guards of law to enforce its delivery. They craved fifteen hundred millions of interest spoil, and drew it with the war debt, which need not have been a debt.
Their greed grows with their wealth, and their avarice intensifies with their success, and craving three thousand millions more, they have saddled the levy upon labor by their damnable funding scheme. Not yet satisfied, but fearing to create alarm and revolt among their dupes, they have doubled the levy by depreciating values and doubling the purchasing power of the levy.
The English brigands practice a slightly different method of robbery. There are thousands of them, but we will give a few as examples. Their system is that of pensions and annuities. Under the pretense of loaning to the government, a boss robber, for some trivial consideration, is allowed a perpetual annual income for himself and his heirs for all time to come, which labor and its posterity are compelled to pay, thus establishing two classes, the nobility who feast and fatten off of labor through their annuities, and the serf, or toiler, who is compelled to clothe himself in rags that the noble robber may dress in purple.
There is another class whose nobility is based upon their pensions. These pensions are hereditary, and many of them date back to the reign of Charles II. Very few people in England have any idea of the extent of the pension list in that country. A pension of £4,000 a year was allowed by Charles II. to Sir L. Charges and his heirs. This pension has been held for over two hundred years, and is annually paid to the heirs. The yearly pensions of a few of the nobility are as follows:
Earl Nelson, per annum ....... $17,000
Lord Rodney ....... 5,000
Duke of Wellington .............. 20,000
Viscount Eversby .......... 20,000
Lord Pagent ......... 6,000
W.G. Romaine ............ 5,000
C.V. Villien ............ 6,000
S.H. Walpole ........... 10,000
Viscount Exmouth has held a pension of $10,000 per annum for sixty-four years. Viscount St. Vincent was allowed a pension of $15,000 in 1606. In the duke of Marlborough's name stands a pension of $22,000 per annum, granted in 1710, which has cost England $2,360,000. The heirs of the duke of Schomberg have been drawing a pension of $20,000 a year ever since 1695. This was granted for no service or consideration to the government or the people of England who are now taxed to pay it, but simply because Schomberg was a personal friend of King William III.
Thus did the brigands of the past seize sovereign power, and parcel out to one another and their heirs and assigns forever, royal pensions to be collected from the toil and blood of the peasantry.
Every title of nobility in England has a pension behind it, conferred upon some ancestor as a share of the spoils, when ancient brigandism declared itself the nobility and pensioned their posterity upon the toil of unborn generations of plebeians and serfs. The English system of high-toned robbery varies slightly from the one being inaugurated in America, but the principle, the object, and the results are identical. The object of both is to establish an idle, untaxed aristocracy of wealth, accumulated through incomes not earned by those who receive them, but filched from labor without consideration.
That which was called robbery and plunder in old times, is called usury and taxation to-day. The robber castles have given away to banking houses and boards of trade. While the brigand has assumed the title of financier, and exchanged his battle ax for bonds, and his shield and armor for special legislation.
The depredations of civilized brigandry are as destructive to the peace and happiness of society as were those of their barbarous predecessors. Death by the bludgeon and the lance of the freebooters was no more deadly than is that produced by want, starvation and suicide; while the colossal fortunes amassed by usury, rents, the contraction and appreciation of money, are no less the results of robbery, than were the accumulation of the ancient banditti by plunder. It matters but little by what process the few untaxed idlers manage to get possession of the wealth products of the toilers, it is the result that constitutes the crime, and not the name given to the process.
During the last twelve years a hundred thousand men and firms have been ruined financially, and over sixteen hundred million of dollars wrenched from them by bankruptcy and the shrinkage of values, while those who have been able to stand under the pressure, find the value of their possessions, dwindled to one-third their real worth, that the swallowing process may be made easy, when confidence in resumption shall enable the money sharks to open their bank inflation throats to gulp down what remains. Governments, whether monarchial or representative, are but faro tables for gamblers, and the people are the dupes of the games, and it will be so until the masses become more intelligent in public matters, less partisan in their prejudices, and command their servants in high-places, instead of being controlled and blindly led by them.
Our pilgrim fathers fled from the religious intolerance and persecutions of Old England, and bore patiently the dangers and privations of the wilderness, to enjoy the liberty of hanging witches, banishing Baptists and whipping Quakers in New England.
Our patriotic fathers of '76 fought seven long years to defend and establish the equal inalienable rights of all men to life, liberty, and the pursuits of happiness; then celebrated their success, and sealed their blood-bought victories by riveting the chains of bondage on the limbs and souls of millions of their battle-scarred companions.
A century passed away before the law recognized the patriotic professions of its makers, and even this concession was wrung out of the blood-stained garments of thousands who fell at the feet of the bondsmen in their efforts to include them also in the inventory of "all men."
In this country revolutions have consisted in bloody struggles to establish in practice, and in fact, such measures and principles as a previous revolution had declared in theory to be right and just.
To-day we are living under laws, and are governed by systems, social, political and financial, as much at variance with the essence and spirit of the constitution, under which they were enacted, as was the institution of slavery with the spirit of the Declaration of Independence.
The preamble to the constitution which was designed as a brief interpretation of its spirit, declares that it was ordained and established "For the purpose of transmitting to posterity the blessings of liberty, to establish justice, to insure domestic tranquility, and to promote the general welfare !"
To secure the benefits of these pledges, and enjoy, in fact, the privileges and rights thus declare to be man's inheritance, are the important and just demands which will precipitate the pending revolution.
Whether this revolution shall be characterized by the blood stains and heart aches which mark the pathway of its predecessors, depends upon the means used by avarice, greed, ambition and selfishness, to deprive the present generation of their inalienable rights, and posterity of its patrimony.
What is that liberty which the present policy of our law makers has in store for posterity ?
The soil, the parent of humanity, from whose breast all substance must come — the green earth, which God filled with goodness and gave to all His children as an inheritance jointly and in common, has been usurped by avarice and greed, whose heirs will hold it to purchase the toil of unborn generations as effectually as the title to the mother carried with it the services and life-long toil of every dark son and daughter of the South.
This is not all. Posterity has not only been robbed its rights to the soil, compelling it to enter the world pauper and a trespasser in law, but a burden is being prepared to hang about its neck in the form of an immortalized public debt, whose interest-fetters will bind its limbs and forever deprive it of the liberty our fathers enjoined upon us to transmit to those who should come after us.
The present generation has an undoubted right to contract debts of its own, and to clothe the law with power to collect them, if it chooses to do so; but what unborn soul has authorized, or by what right do we authorize Congress to control and take away the freedom of posterity, and impose upon coming generations conditions and burdens who were not here to give or withhold their consent ?
The coming revolution will break every fetter forged for posterity, and transmit to it the blessing of liberty as required by the constitution and the laws of God.
"To establish justice," is another object that will be contended for by the coming revolution. Uniform taxation, every person and interest to pay for the support of the government just in proportion to the amount of protection required, and benefits conferred.
The abolition of all laws creating monopolies, and granting special privileges, and the establishment of such as will insure to labor and enterprise the full benefit and enjoyment of the fruits of their toil.
Usury will be shorn of its power to rob, and usurers pass into history as the law-protected brigands of a darker age.
Then, when the medium of commercial exchanges shall be wrested from the control of the usurer, and restored to its legitimate service as a hand-maid, and not a robber of labor — and when, by the establishment of justice, the wealth products of labor shall be equitably distributed among their producers, domestic tranquility will then, and not till then, be insured.
All of which will tend "to promote the general welfare."
That this revolution will come, and that these ends will be accomplished, is as certain as that they were recognized by our fathers as right, and bequeathed to this generation under the blood seal of the revolution of 1776, as a joint inheritance.
That it is at our doors, is evident from the numbers and earnestness of those demanding it, represented by the million votes cast at the recent elections.
May it be bloodless, and wrought by a substitution of ballots for the bullets of its predecessors. But let it come.
Nothing short of a radical and absolute financial revolution will meet the demands of the age. The day of patch-work reform, and relief measures under a system based on robbery and oppression, has passed. The financial and monarchical systems of Christendom are twin-sisters, each dependent upon the other for existence; in fact, each is but part of a perfect whole, which, when united, constitute tyranny in the most absolute and oppressive form. Without the "money of the world," the monarchies of the world could not endure for a generation, and that republic which adopts the monarchical financial system can remain such only in name. It may have the form of a republic, but it will possess the soul of a tyrant.
The revolution of '76 is not yet completed. The true republic is not yet born. The efforts of our fathers, like those of too many of the present day, were for reform, simply. They appealed for a redress of grievances. The blood that flowed at Lexington, Concord and Bunker Hill was not for liberty and independence, but for temporary relief. The war of the revolution was not at first waged against the system of monarchy, but against the severity of the monarch.
It was not to break or remove the yoke of the king, but to lighten its pressure, and not until they found that all their efforts were futile did the most venturesome mind dare to strike at the root of the evil, and declare for a government by the people. Those were times that not only tried men's souls, but tested their wisdom, their patriotism, and their statesmanship. They traced the cause of their sufferings back of parliament, to the crown. They traced it to a system of government based upon injustice, and supported by oppression. They saw that redress and relief, under such a system, would be but temporary patch-work. They resolved to strike at what they deemed the great tap root of the evil, and emancipate themselves from the rule of hereditary tyrants, for throughout the world they saw misery and monarchy marching hand in hand, and inspired by a nobler spirit than had before animated a people they cried aloud: "O, ye that love mankind ! Ye that dare oppose, not only the tyranny but the TYRANT, stand forth ! Every, spot of the old world is overrun with oppression. Freedom hath been hunted round the globe. Asia and Africa have long since expelled her, and Europe regards her an alien and a stranger. Let America receive the fugitive, and prepare in time an asylum for the oppressed of earth."
When told that reconciliation and relief under the protection of the crown was the wisest policy, they cited the cruelties and the inhumanities inflicted upon them by the crown. The writer of the crisis said:
" Hath your house been burnt ?
" Hath your property been destroyed before your face ?
" Are your wife and children destitute of a bed to lie on, or bread to live on ?
" Have you lost a parent or a child by the tyrant's hand, and you the wretched ruined survivor ?
" If you have not, then you are not a judge of those who have. But if you have, and can still shake hands with the murderers, then are you unworthy of the name of husband, father, brother or lover, and whatever may be your rank or title in life, you have the heart of a coward, and the spirit of a sycophant."
Another inconsistency of a government by the people was the long-cherished custom of centralizing or materializing sovereignty in some one individual to be exercised for die masses. It was tauntingly asked: "What will be your king in the Republic ?" and the answer was:
" I'll tell you, friend, he reigns above, and doth not make havoc of mankind like the royal brute of Britain, yet that we may not appear defective even in earthly honors, let a day be solemnly set apart for proclaiming the charter; let it be brought forth, placed on the divine law — the Word of God; let a crown be placed thereon, by which the world may know that so far as we approve of a monarch in America the law is king."
Our fathers supposed that when they had thrown off the yoke of King George, they had, as far as they were concerned, dethroned the tyrant. They looked over the world, and saw misery, poverty and degradation among the tax-burdened and royally oppressed people, and naturally attributed man's hard lot to the tyranny of monarchs, and the lack of self-government among the masses.
But the light of a century has disclosed the fact that away back of the monarch, in his gilded den, sits the real tyrant, Avarice. That monarchical governments, the tyranny of kings, and the hereditary succession of power, are simply outgrowths of an underlying system of robbery so old that it is revered, and so popular that at the communion table of Christendom it is given the seat of honor. Gold for money that usury may rob, is the corner stone of every, throne in Europe, and the foundation of the political rings which rule, oppress, and rob the industries of the republic. When our fathers cast off the British yoke, they kept the yoke-maker, and set him up in business. Specie basis, and the inevitable debt system for usury, is the arch tyrant which is oppressing and crushing humanity to-day. This is the monster which must be dethroned, and his scepter broken. With our fathers let us say: "O, ye that love mankind, ye that dare oppose, not only the tyranny, but the tyrant, stand forth ! Every spot in the old world is overrun with the oppressions of specie basis and usury. It has driven freedom from the habitations of civilization, and Christianity from Christendom. Let us receive these fugitives, and with an exchange medium of intelligence, and a nobler civilization, that which struck the manacles from the limbs of African slavery, prepare an asylum for the oppressed of all nations; and when the worshipers of the golden tyrant tauntingly ask, "What's your fiat basis?" tell them it is intelligence and popular sovereignty, with God's green earth, and the fullness thereof as collaterals. And when unlimited coinage and silver bill compromises are claimed to be ample panaceas for the ills we have been and are suffering, put the questions which patriotism put to Toryism in 1776.
Have you lost your home ?
Has your property been sacrificed before your face, under the sheriff's hammer ?
Has your fortune been swept away by the shrinkage of values ?
Has your business been ruined, and your children made beggars ?
Are your wife and children destitute of bed to lie on or bread to live on ?
Have you lost a parent or child by suicide, from want or despair ?
Have disease and death entered your unthatched roof, and carried off your idols, and you the wretched, ruined survivors ?
Are you out of employment, tramping up and down the earth for sustenance, or eking out a prison life, in preference to starvation ?
Are you one of the millions who have been bankrupted, robbed and ruined for life, with hopes blasted, prospects blighted, a living wreck, that the usurer might lay in his harvest of gold, dress in fine linen, and fare sumptuously every day ? If you have suffered none of these things, you are not a judge of those who have. But if you have, knowing them to be the fruits of specie basis and usury, and still shake hands with those who advocate the murderous system, then you are unworthy the name of freemen, and whatever may be your rank or title in life, you have "the heart of a coward, and the spirit of a sycophant."
With the exception of the incidents and results of the revolution of '76, national affairs and national politics never presented questions of such momentous importance to the American people as stand to-day foremost on the calendar of public discussion. Circumstances seem to be culminating to precipitate a struggle which may, and probably will, result in another revolution of greater importance to the world than any which has preceded it. The revolution of a century ago was the triumph of democracy over monarchy, the ballot over the scepter. The struggle now pending, is between the same spirit that won the victories of the revolution, and demonstrated the possibility of political liberty, and that power behind the throne, stronger and more despotic than he who sat upon it. As vigilance is the price of liberty, every patriot is called upon to contribute his share.
Probably no territory on earth of the same area is more richly endowed with natural resources and the elements of wealth and prosperity, than that embraced within the United States. It possesses every variety of climate, soil and production, with unmeasured and unimagined mineral deposits of every conceivable variety magnificent forests of timber, with ocean bound coasts on the east and west, on the north, a chain of inland seas, and the land locked gulf on the south, while a net work of the grandest rivers in the world afford natural highways, and cheap and easy transportation and distribution of the products of labor, and the bountiful supplies of nature's store houses. Whence came these generous supplies, and for whom were they designed ? After God had created the earth and the fullness thereof, He created man, the crown and coronation of His work, and gave the earth into his possession, with instructions to multiply and replenish. He said to man, "Behold, I have given to you every herb bearing seed, to you it shall be for meat. Have dominion over the fish of the sea, and over the fowls of the air, and over the cattle, and over all the earth, and over every creeping thing that creepeth upon the earth."
All of these are the free gifts of God to man. Each man inherits, in common with the universal brotherhood of man, these blessings. We are all heirs of God, and joint and equal heirs of these, His gifts. There is enough for all the needs and luxuries of the human race, and an abundance to spare for the beasts of the field, the fish of the sea, and the fowls of the air.
Every soul is born into the world naked and helpless, but anticipating its advent and wants, a benevolent Creator has from the morning of creation supplied an abundance to satisfy all the needs and luxuries of His creatures, and if any child of God is not in the full enjoyment of all that is necessary for his bodily wants and soul's development, it is because he has been deprived of his just inheritance by the hand of legalized robbery.
In the United States there is yet sufficient unclaimed and unoccupied soil to give every man a farm. Sufficient unowned and unpossessed timber, stone, brick, paint, nail, and glass material to construct for every family a palace. Ample unclaimed and unappropriated facilities for raising cotton, woolen, silk, and fur fabrics to construct royal robes for every man, woman and child in America. Abundance of material going to waste to fashion into form elegant furniture, carpets, bedding, and ornamentation for every palace and home in the land. There are millions of acres of uncultivated soil pregnant and groaning with the elements of food for every hungry family.
There is no lack of skill and labor to raise, fashion, and produce from natural resources an abundance to supply every want and gratify every desire, taste, hope, and holy aspiration of man. Nature's storehouse is full of unclaimed raw material, requiring only the magic touch of labor to bring forth that which will satisfy every want of man.
Millions of laborers stand idle in the market places, offering their services and begging to be employed.
Millions of women and children go hungry and half clad through the streets begging for bread and clothing.
Famine stalks abroad at noon-day, while the vaults of nature are bursting with the fullness of food.
Able bodied and skillful laborers are tramping the streets for a beggar's subsistence, and moulding themselves into felons that they may be adapted to the conditions which surround them.
What is the matter ?
No lack of resources. No lack of skill to fashion, or labor to produce. No lack of transportation to distribute and exchange the fruits of earth and the products of skill. But one thing for which the earth cries aloud, and for want of which humanity is rapidly going downgrade to perdition. "Without money, civilization could never have had a beginning. With an insufficient quantity of it, it will languish, and finally die."
With an abundant supply, our country can be made a paradise, and our generation inaugurate the millennium. It is not gold and silver we want, but the money that carried the nation through the war, fought our battles in the clouds, spanned the continent and bound the two oceans together with iron bands.
It will give us colleges in place of prisons, schools in place of court increase in place of ruinous taxation, teachers in place of sheriffs and policemen, refinement in place of demoralization, skilled artisans in place of tramps, wealth in place of poverty, justice in place of robbery, and peace on earth and good will toward one another in place of crime and violence.
Unlike other nations of earth, the people of America have the means in their own hands, and the power in their own sovereignty, to bring about these glorious results.
"At the Christian era, the metallic money of the Roman empire amounted to one thousand, eight hundred million dollars. By the end of the fifteenth century, it had shrunk to less than two hundred million dollars.
"During this period, the most extraordinary and baleful change took place in the condition of the world. Commerce, art, wealth and freedom disappeared. The people were reduced by poverty and misery to the most degraded condition of serfdom and slavery.
"Whether the cause or not, this period was coincident with the shrinkage in the volume of money which had no historic parallel.
"The crumbling of institutions kept even step with the shrinkage in the stock of money and the falling of prices.
"It is a suggestive coincidence, that the first glimmer of light only came with the invention of bills of exchange, and paper substitutes, through which the scanty stock of precious metals was increased in efficiency.
"It needed the heroic treatment of rising prices to enable society to re-unite its shattered links, to shake off the shackles of feudalism, to re-light and uplift the almost extinguished torch of civilization.
"That the disasters of the Dark Ages were caused by decreasing money and falling prices, and that the recovery therefrom and the comparative prosperity which followed the discovery of America, were due to an increasing supply of the precious metals and rising prices, will not seem surprising or unreasonable when the noble functions of money are considered.
"Money is the great instrument of association, the very fibre of social organism, the vitalizing force of industry, the protoplasm of civilization, and as essential to its existence as oxygen is to animal life.
"Without money civilization could not have had a beginning, with a diminishing supply it must languish, and, unless relieved, finally perish.
"Symptoms of disaster, similar to those which befell society during the dark ages, were observable on every hand during the first half of this century.
"In 1809 the revolutionary war between Spain and her American colonies broke out. These troubles resulted in a great diminution of the production of the precious metals, which was quickly indicated by a fall in general prices.
"The purchasing power of the precious metals increased between 1809 and 1848 fully 145 per cent., or, in other words, the general range of prices was 60 per cent. lower in 1848 than it was in 1809.
"During this time the volume of money did not materially decrease, but the supply was not sufficient to keep the stock up to the proper correspondence with the increasing demand of advancing civilization.
"The world has rarely passed through a more gloomy period than this one. Again do we find falling prices and misery and destitution inseparable companions.
"The poverty and distress of the industrial masses were intense and universal. In England the sufferings of the people found expression in demands upon Parliament, for relief, in bread riots. The military arm had to be strengthened to prevent the all-pervading discontent from ripening into open revolt. On the Continent the fires of revolution smoldered everywhere and blazed out at many points, threatening the overthrow of States and the subversion of social institutions.
"Wherever and whenever the mutterings of discontent were hushed by the fear of increased standing armies, the foundation of society were honeycombed by powerful secret political organizations.
"The cause at work to produce this state of things was so subtle, and its advances so silent, that the masses were entirely ignorant of its nature. They had come to regard money as an institution fixed and immovable in value, and when prices of property and wages of labor fell, they charged the fault not to the money, but to property and the employer.
"They were taught that the mischief was the result of over production. Never having observed that over-production was complained of only when the money stock was decreasing, their prejudices were aroused against labor-saving machinery.
"They were angered at capital because it either declined altogether to embark in industrial enterprises, or would only embark in them upon the condition of employing labor at the most scanty remuneration.
"They forgot that falling prices compelled capital to avoid such enterprises on any other conditions, and, for the most part, to avoid them entirely. They did not comprehend that money in shrinking volume was the prolific parent of enforced idleness and poverty, and that falling prices divorced money, capital, and labor; but they none the less felt the paralyzing pressure of the shrinking metallic shroud that was closing around industry."
William Jacob, F.R.S., gives the following table, showing the progress of contraction to the year 806, when the lamp of civilization went out, and the night of the dark ages prevented him from continuing the report:
A.D. 14 ..... $1,790,000,000
A.D.230 ........ 909,000,000
A.D.410 ........ 537,000,000
A.D.662 ........ 256,000,000
A.D.806 ........ 168,000,000
The first glimmer of light from the midnight of the gold and silver era, came on the wings of paper substitutes, the invention of bills of exchange.
The effects of a decreasing volume of currency upon the business, prosperity, and people of a country are well stated in the following extracts:*
"While the volume of money is decreasing, even though very slowly, the value of each unit of money is increasing in a corresponding ratio, and property and wages are decreasing.
"Those who have contracted to pay money, find that it is constantly becoming more difficult to meet their engagements. The margin of securities melt rapidly, and their confiscation by the creditor becomes only a question of time.
"All productive enterprises are discouraged and stagnate, because the cost of producing commodities to-day will not be covered by the price obtainable for them tomorrow. Exchanges become sluggish, because those who have money will not part with it for either property or service, for the obvious reason that money alone is increasing in value, while everything else is decreasing in price.
"This results in the withdrawal of money from the channels of circulation, and its deposit in great hordes channels where can exert no influence on prices.
"Money in shrinking volume becomes the paramount object of commerce, instead of the beneficent instrument. Instead of mobilizing industry, it poisons and dries up its life currents.
"It is the fruitful source of political and social disturbance.
"It foments strife between labor and other forms of capital, while itself, hidden away, gorges on both, rewards close-fisted lenders, and filches from, and bankrupts, enterprising producers."
_____________________________
* Congressional Monetary Commission.
"Diminishing money and falling prices are not only oppressive upon debtors, but they cause stagnation in business, reduce production, and enforce idleness. Falling markets annihilate profits, and as it is only the expectation of gain that stimulates capital to invest in operations, inadequate employment is found for labor, and those who are employed can only be so on diminished wages."Leon Fanchet (1843) says:
"If all the nations of Europe adopt the system of Great Britain, the Price of gold would be raised beyond measure, and we should see produced a result lamentable enough."David Hume, in Essays on Money, says:
Wm. H. Crawford, Secretary of the Treasury, in his report, Feb., 1820, says:"We find that in every kingdom into which money begins to flow in greater abundance than formerly, everything takes a new face; labor and industry gain life, the merchants become more enterprising, the manufacturers more diligent and skillful, and the farmer follows his plow with greater attention and alacrity. The good policy of the government consists of keeping it, if possible, still increasing, as long as there is an undeveloped resource or room for a new emigrant, because by that means there is kept alive a spirit of industry in the nation, which increases the stock of labor, in which consists all real power and riches.
"A nation whose money decreases, is actually weaker and more insurable than other nations, which possess less money, but are on the increasing hand."
"All intelligent writers on currency agree that when it is decreasing in amount, poverty and misery must prevail."
The following table, compiled from official sources, shows the amount of our circulation, per capita, and its contraction from 1865 to 1877:
YEAR. CURRENCY. POP. PER CAP.
1885 ......... $1,651,282,373 | 34,819,581 | $47.42
1866 .......... 1,803,702,726 | 33,537,148 | 50.76
1867 .......... 1,380,414,677 | 36,269,502 | 86.88
1868 ............ 817,199,773 | 37,016,949 | 22.08
1869 ............ 750,025,989 | 37,779,800 | 19.86
1870 ............ 740,039,179 | $8,558,371 | 19.19
1871 ............ 734,244,774 | 89,750,078 | 18.47
1872 ............ 736,349,912 | 40,978,807 | 17.97
1878 ............ 788,291,749 | 42,245,110 | 17.48
1874 ............ 779,031,589 | 43,550,756 | 17.84
1875 ............ 778,176,250 | 44,896,705 | 17.88
1876 ............ 735,358,839 | 46,284,344 | 15.89
1877 ............ 696,443,394 | 47,714,829 | 14.60
The component elements of the above volume of paper money in each year comprise the following items, according as these were in existence at the time: Demand, and one and two year treasury notes, (acts of Dec. 27, 1857, Dec. 17, 1860, and March 2, 1861); temporary ten day loans and one year certificates of indebtedness; treasury notes payable in two years and sixty days; seven-thirty three year notes; compound interest notes; three per cent. certificates; non-interest bearing demand and legal tender notes (acts of July, 17, 1861; Feb. 25, 1862, July 11, 1872, and March 3, 1961); fractional currency; State bank notes; and national bank notes.
That business failures have resulted from, and kept even pace with, the contraction of the currency, there is no doubt, as the following table, prepared by Dunn, Barlow & Co., will show:
Hugh McCulloch was aware of the depressing and panicy influences of contraction when he said, in 1866:
"The process of contracting the circulation of the government notes should go on just as rapidly as possible WITHOUT PRODUCING A FINANCIAL CRASH."
McCulloch was wise enough to anticipate the results of contraction.
Hon. A.G. Spaulding, an eminent banker and member of congress from New York, wrote McCulloch, in 1866, then secretary, to "contract slowly, so AS TO MAINTAIN A TOLERABLE EASY MONEY MARKET FOR AT LEAST A YEAR TO COME."
Sherman himself, then honest, stated in the senate that such contraction of the currency as was anticipated in the bill, "would produce the most disastrous financial results that ever befell the nation."
Figures won't lie:
We all know that the panic and crash of 1857, during which year over 4,000 business failures took place, involving a loss of over $200,000,000 by bankruptcies, was wholly produced by the loss and contraction of the bank currency of the country, resulting from the exportation of coin from the United States to meet an extraordinary European demand.
The panic and crash of 1860, during which year over 6,000 business failures took place, was caused by the loss and contraction of nearly all our western currency by failure of banks based upon southern state stocks. After the greenback era of 1862, the number of failures diminished with the increasing of the currency, and when contraction commenced, in 1866, the failures commenced to increase and kept even pace with such contraction. Here are the figures, which are worth more than all the sophisms of demagogues.
Year. Number. Amount. 1857 ... 4,932 .... $291,750,000 1858 ... 4.225 ...... 95,749,000 1859 ... 3,913 ...... 64,394,000 1850 ... 3,673 ...... 79,807,000 1861 ... 5,993 ..... 207,210,000 1862 ... 1,652 ...... 23,049,300 1863 ..... 485 ....... 6,864,700 1864 ..... 520 ....... 8,579,000 1865 ..... 580 ...... 17,625,000 1866 ..... 682 ...... 47,333,000 1867 ... 2,386 ...... 86,218,000 1858 ... 6,608 ...... 63,774,000 1869 ... 2,799 ...... 75,054,000 1870 ... 3,551 ...... 88,242,000 1871 ... 2,915 ...... 85,252,000 1872 ... 4,069 ..... 121,056,000 1873 ... 5,183 ..... 228,499,000 1874 ... 5,830 ..... 155,239,000 1875 ... 7,740 ..... 201,060,353 1876 ... 9,092 ..... 191,117,786 1877 ... 8,872 ..... 190,660,936 1878 .. 10,478 ..... 234,383,132 1879 (six months) ... 4,058 .... 65,779,398
If the number of failures for the first six months of the year 1879 were less than the number for the corresponding time the previous year, it is no evidence that the cause was being removed, but like the apparent improved condition of a scourge-cursed Memphis, there were fewer cases because there were fewer victims to destroy.
Secretary Sherman denies that resumption had any hand in the catastrophe, because the collapse occurred fourteen months before the act was passed. He failed to state that the object of contraction was to appreciate the remaining greenbacks to an equivalency with gold, and the act simply specified the day when the money sharks anticipated that they would, through contraction, reach that point. But notwithstanding the great appreciation of gold itself, it being some 34 per cent. from 1873 to 1879, contractions had been so rapid and disastrous to general values that the remaining greenbacks caught up with gold before the day appointed. It is true the congressional act providing for resumption on January 1, 1879, did not produce the panic, but preparing our national finances to enable congress to safely predict, and set a day when such a result could be legalized, did the work.
As the true causes Secretary Sherman ascribes "the waste of war," "over production," "wild speculation," "inflated prices," etc. How an over-production of products could possibly co-exist with the wastes of war, and how the two could combine to result in a panic and widespread bankruptcy nine years after the war terminated, the learned demagogue left the public to cypher out.
"Inflated prices" and "over production" are equally inconsistent coincidents. Inflated prices generally have the effect to deplete stocks. It is generally the low, priced stocks that move slow and accumulate.
The chief cause ascribed by Mr. Sherman was our "irredeemable paper currency that varied in value from day to day." Let an insulted public pause one moment, and consider if there ever was a day, while gold was bobbing between 100 and 285, but every dollar of this irredeemable paper money would pay a dollar of debts. The $2,000,000,000 of losses were not the result of irredeemable paper money, for with that money — as bad as it was — every debt could have been paid. It was for the want of it that disaster came. When the currency was poorest, relatively to gold, our prosperity was greatest, and our financial disasters fewest, nor was there a symptom or an indication of financial prostration until contraction had forced an undue inflation of credits.
"Money is the national medium of exchange for property and products. It must be instituted, and its value must be fixed by the laws of the nation, in order to make it a public tender in payment of debts. No debt can be paid with property or with individual notes, except by consent of the creditor; but when money is tendered all creditors are compelled to receive it in full satisfaction of debts. The aim of legislation in regulating the value of money is to insure to all individuals, in making exchanges of their property for money, the full value of their products or property. Debts are postponements of the time of payment for the property or products received; and loans of money, and all rents of property, are mere rents of the use of certain amount legal or actual value; which use is to be paid for at the expiration of a specified, period. Money is the legal tender and must be offered and received in payment for all these debts.
"Certain properties are by law given to some substance, which bears the name and performs the functions of money. The term money, then, signifies a legal, public medium of exchange, which possesses all the qualifications necessary to effect a just exchange of property. In the discussion of the nature of money, it will appear that its properties are, in truth, the creation of law, and entirely different from the properties of the things which it exchanges.
" Money has four properties or powers, viz.: power to represent value, power to measure value, power to accumulate value by interest, and power to exchange value. These properties are co-essential to a medium of exchange: it is impossible that any one of them should exist in such a medium independently of the others. The material of money is a legalized agent, employed to express these powers, and render them available in trade. The powers of money, which alone render it useful, are created by legislation, therefore money can possess none but legal value. All legal value depends upon the actual value that it represents.
"Some writers, instead of considering money as a medium of exchange, call it capital seeking investment. If money be capital, it is already invested; because the capital would consist in the inherent value of the material of the money, and not in the thing the money seeks to obtain. But, when money has found one investment, it is as much a seeker for a second and a third investment, as if it had not been invested at all. It is always seeking investment, without being invested. It is no more real capital than a very poor horse, of which the appearance is such that he will do very well to exchange off. But if he should finally fall into the hands of a person who had not the good fortune to exchange him again for something else, the owner would have to depend upon his few useful qualities. And if a currency were formed in the various nations independently of gold and silver, and coins should cease to be a tender in payment of debts, the value of coins would depend upon their inherent qualities, as metals, as much as the value of the horse when he could be no longer exchanged for more than his actual worth, would depend upon the little labor that he could perform, or upon his hide and bones. The price of the gold and of the horse would then depend upon their actual usefulness, and not upon any capabilities for exchange.
"Money is, then, a combination of legal powers, expressed upon metal, paper, or some other substance; its value is the standard, or determiner of the value of all other things, and it serves as a public medium of exchange for land, labor, and all commodities.
—Kellog
Scattered throughout the length and breadth of the land, are the millions of workers, engaged in producing those commodities demanded for the needs and luxuries of man. These productions alone constitute wealth. Commerce consists in the modes and methods of distributing the various products of skill, so that each producer may enjoy the benefit of the product of every other man.
To accomplish this, with the least possible expense to both producer and consumer, is the mission of true political economy. An universally accepted and recognized medium of exchange is as essential as safe and cheap transportation.
One exchanges ownership, the other location.
Hence, cheap and abundant money is as essential to the prosperity of both producer and consumer, as abundant and cheap transportation.
If the medium of transportation is limited, or inadequate to effect the necessary change of location, consumption must be limited, and people in every part of the country must go destitute, and perhaps suffer for the want of many things which are produced in abundance but cannot be distributed. With such limited transportation, those who monopolize it can command any portion of the surplus of a country's production they choose, for transporting the balance. The result would be, low prices and an overstock at every point of production, and destitution and high prices, at every point of consumption. The same principle will hold good in regard to the medium of exchange. As it takes a certain number of ears to move the surplus products of the country from the places of production to the places of consumption, so it takes a certain number of dollars to effect the exchanges of ownership. If cars are too scarce, products accumulate, prices fall, and labor is thrown out of employment. If dollars are too few, exchanges cannot be made, products accumulate on the hands of producers, prices decline, and labor is thrown out of employment.
If railroads ramify all parts of the country, and rolling stock is abundant, the location of commodities can be changed at cost, and a fair recompense for use of the means invested. So if dollars are abundant, and not controlled by monopoly, exchanges of ownership may be so readily and cheaply effected as to provide every laborer and producer with a ready market, full employment, ample reward, and an abundance to supply all necessary wants and to gratify all proper desires. As an abundance of railroads lessen the profits of the railroad kings, and prevents them from fleecing the public, so an abundance of money lessens the banker's profits, and prevents him from robbing the producers of wealth. An expansion of either would bless the masses; a contraction of either would enrich their owners. As well style a single railroad track across the continent, and the exorbitant profits it could make on the amount invested, "honest transportation," and call such limited facilities, a "sound policy," as limit money to a safe gold basis and depress prices to the gold standard, and call it "honest money," and a "sound policy."
Nothing is honest that robs, and no policy is sound that deprives society of its natural wants, and tends to demoralize, rather than to elevate the human race. Before the wealth producers and toilers of this country can be free, and enjoy the fruits of their own labor, both money and transportation must be wrested from the hands of monopoly, and, controlled by wise legislation, made the servants and not the masters of labor.
Mr. Madden, author of coins of the Jews, states that in the West Indies and South America, pins, a slice of bread, a pinch of snuff, a dram of whisky, soap, chocolate and eggs were current money.
The aboriginal inhabitants of America used wampum, and cocoanuts. As late as 1635, wampum was made a legal tender in Massachusetts among the colonists.
Silver being demonetized in Great Britain, Thomas Baring says that in 1847 it was impossible to raise any money whatever on £60,000 of silver.
During a similar crisis in Calcutta in 1864, it was equally impossible to raise a single rupee on £20,000 of gold, that metal being demonetized in India.
In Britain at an early time a double standard was used, called "living money" and "dead money," or slaves and cattle, and land and metal.
In the twelfth century, gold and silver coins were redeemable in leather legal tenders in Sicily, under redeemable in leather legal tenders in Sicily, under William I.
In the fourteenth century, the Chinese used a money coined from the inner bark of the mulberry tree.
The inhabitants of the coast of Africa use an "ideal" money -- a sign-of value, without money.
In the South Sea Islands beads and tools of iron were long used as money.
Salt is the current money of Abyssinia, codfish of Iceland and Newfoundland.
At an early day, deer and coon skins were legal tender in the State of Illinois.
In 1574, large amounts of pasteboard money were coined in Holland.
Rome used both wooden and leather money about 700 B.C.
Tin money was coined by Dionysius I, tyrant of Syracuse.
Platinum was coined in Russia from 1828 to 1845.
The Spaniards used leather money as late as 1574.
Under the Cæsars, lands were made money.
The Carthagenians had leather money.
France used leather money in 1360.
Sir John Mandeville, who traveled among the Asiatic nations in the 14th century, gives an account of an ancient fiat money used by the great Chan of Persia and Tartary, which is given by Jevon, in his "Money and Mechanism of Exchange," as follows:
" This Emperour may dispenden als moche as he wile, withouten estymacioun. For he despendeth not, he maketh no money, but of Lether emprented, or of Papyre. And of that money, is some of gretter prys, and som of lasse prys, aftre the dyvesiteer of his Statutes. And when that Money hathe ronne so longe that it be begynneth to waste, then men beren it to the Emperoure's Tresorye; and than thei taken newe money for the olde And that money gothe thorghe out all the Contree and thorghe out all his Provynces." For there, and beyond hem, thei mak no Money nouther of Gold nor Sylver."
The hard money advocates characterize the popular uprising of the people in favor of a representative money as a "craze," a "financial epidemic," a political bubble, that will soon burst, and leave its followers stranded on the rocks of error and delusion.
These financial savants would do well to bear in mind that the so-called, "fiat" or non-intrinsic money theory, is not new. It is as old as civilization.
It had its origin when men were honest, and only yielded to brute force in the hands of ambitious tyrants, who established a currency of intrinsic value -- the easier to enslave and rob the masses.
Even after gold and silver were adopted, it was discovered that these metals did not increase proportionately with other commodities; and the wisdom of ancient legislators perceived that production must be arrested if no other distributive instrument than gold and silver were employed.
We quote from Jonathan Duncan: "One of the earliest plans adopted to surmount the difficulty was the creation of a National Currency in each independent State, for internal trade; and its distinctive characteristic was the total absence of intrinsic value, WHICH EFFECTUALLY PREVENTED ITS EXPORTATION.
"This invention greatly economized the use of the precious metals, allowing them to be wholly employed in discharging the balance of foreign trade.
"Thus the cities of Byzantium and Clazomenæ provided iron money for their own citizens, which circulated at home for the value impressed on it by public authority."
The monetary laws of Lycurgus were founded upon the same principle; who deprived his money of even the intrinsic value of iron, by first destroying its malleability, so it could not be converted even into implements of labor.
Seneca states that the Spartans used leather money, having a stamp to show what value it represented, and by whose authority it was issued.
Plato recommended a double currency in every nation: "A coin," he said, "for the purposes of domestic exchange and to pay wages to hired servants and settlers, for which purpose I affirm it must have value among the members of the State, but no value to the rest of the world." For visiting, and using in other States, Plato proposed a coin of intrinsic value, which would pass current in foreign States.
Xenophon states that "most of the States of Greece have money which is not current except in their own territory."
Homer and Hesiod never speak of gold or silver money.
They express the value of things by saying they are worth so many oxen.
They estimated the riches of a man by the number of his flocks, and the wealth of a nation by the abundance of its pastures.
Homer values the golden armor of Glaucus at 100 oxen, and the brazen armor of Damocles at nine oxen. Cæsar had "tribute money," representing a tax to be paid, which was issued by the government, based upon taxes. It bought property, paid for labor, discharged debts, and was redeemed in taxes.
It bore inscriptions representing real money, which was cattle and property.
Thus, for greater cattle they were stamped with the figure of a horse or an ox; for less, with that of a hog; for corn fields, with an ear of corn; for a poll tax, with the head of a man.
"On these historical facts," says Duncan, "we have evidence that ALL THINGS OF VALUE, capable of being transferred from man to man, were accounted REAL MONEY, and they were all represented by symbols, or tokens, by which device they (the things of value) were rendered movable in the shape of currency representatives." The real money -- the property of value, was the basis and security on which the tokens were issued, and whoever held a token, was admonished by it that he was a creditor to its amount on the real money of the country.
Money, in the strict sense of the term, is whatever the community consents to use as a medium of exchange. The constitution of the United States clothes congress with the power to "coin money and regulate the value thereof," but is silent in reference to the material upon which the money function shall be stamped. Money, in the strict sense of the term, does not possess intrinsic value more than a court judgment, or a statute of law. The value of gold and silver, which we call intrinsic, is not so, but is a value placed upon those metals by law.
Gold and silver are as abundant for the real uses of those metals as iron is for its real uses, and were the precious metals stripped of their artificial, legal or fiat value, their abundance for the real needs and uses of society would reduce their intrinsic value to that of iron or lead. The credit of the governments of the world, the faith of the people that these governments will receive their coins at their face and weight value, and that they will enforce the legal tender qualities of such coin are all that give them a value above their weight of iron. Of the commercial exchange of the world, Colwell and other standard authors estimate that they are made as follows:
With coin .......... 50
Paper currency .... 2.50
Other credit devices .... 97.00
............... 100.00
The banking system the world over, supplies a currency of credit.
The Bank of England has long used about $75,000,000 of government debt as money, irredeemable. The banks grow rich by loaning their own credit, and that of their customers. They loan the credit of those who borrow credit of them. Through the machinery for swapping promises, called a clearing house, the banks are enabled to form a ring, and loan, also, each other's credits. The report of the comptroller shows that the banks are to-day loaning and drawing interest on three times as much credit as there is money in the country. It is the same in all the civilized world. Credit of one kind and another, constitutes the great bulk of the world's medium of exchange, while the precious metals constitute less than one-half of one per cent. As congress has the power, why then should it not coin the government credit, make it legal tender, and thus supply a more uniform medium of exchange, and one less expensive than that supplied by banks and capitalists ?
There is but one objection, and that is, it would deprive the banks and money sharks of their rich interest harvests from loaning their own, and their customers' credits for usury. Gold is not the money of the world, even restricting money to coin and bank paper, for the entire stock of Europe and America aggregates but a trifle over $1,900,000,000 against over $3,000,000,000 of government and bank issues.
The States prohibited from making anything but gold and silver legal tender, but congress is not; for the first legal tender the government ever coined under the constitution was copper, which was a full legal tender for any and all amounts. No one disputes the right of the government to issue bills of credit, or treasury notes, and the supreme court has decided that this being conceded, "the incidental power of giving such bills the quality of legal tender follows as a matter of course."
There is not sufficient gold and silver in the world to serve as a universal medium of exchange, hence it cannot be a money of the world. Bank and individual credit lack the necessary stability, safety and responsibility to constitute a money of the world, hence, they are not appropriate. The government credit alone, based upon the powers of its sovereignty and the combined credit, consent and mutual interest of society, can supply a safe, reliable, ample and uniform currency to effect all the necessary exchanges of commerce, and do away with that class of vampires, cormorants and middle-men, who now monopolize the supply, that they may reap the lion's share of labor's productions.
The Constitution of the United States, Art. I, Sec. VIII 5, declares congress shall have power to coin money, regulate the value thereof and of foreign coin, and fix a standard of weights and measures.
"To coin money," as used in the constitution does not mean to shape, fashion, weigh, and stamp pieces of metal or paper. It simply means to determine what shall constitute the lawful money of the realm. This is a power inherent in sovereignty, and as sovereignty rests with the people in a republic, this prerogative was delegated to congress to be exercised for the people. A literal interpretation of the clause would be: "Congress shall have power to determine what shall constitute the exchange medium and lawful tender for debts in the United States." It certainly does not mean that congress shall perform the manual and mechanical labor of stamping coin or notes; if it does, then all of our mints are unconstitutional institutions. Congress has power to determine the material and style of the token or thing which shall represent the value of a dollar, when such value is agreed upon between the parties to an exchange; also the different denominations of such tokens, the functions they shall perform, and the extent and for what purposes they shall be lawful tender for debts.
The value of money is its purchasing power, which is governed by its volume, or the relation which the total volume sustains to the total volume of the exchangeable commodities of a country. The larger the money volume in proportion to the exchangeable commodity volume of a country, the less is the purchasing power of the former, and the higher are the prices of the latter. Hence, the value of money can be regulated only by regulating its volume, and as this sovereign power has been delegated to Congress in trust for the benefit of all the people, that body has no warrant in the constitution to delegate this important trust to individuals or corporations for their private benefit. Neither the people nor Congress have power to regulate the in
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idea that money must necessarily be a thing, and that thing, possessed of the intrinsic value of its face or stamp.
As the body of man possesses no more of intrinsic value than a lump of earth of its weight, so should the body of money possess no more intrinsic value than its weight of the cheapest product of earth.
It is not the body of man, or the material of which it is made, that constitutes the wealth of the soul, but that invisible element, or spirit, breathed into it, and stamped upon its face, by the sovereign power of the universe.
A lump of gold weighing 25.8 grains, troy, is not a dollar. It will not pay a dollar of debt in any country on the globe. It is not money. But without taking from, or adding to, it a particle of matter, we pass it under the mint dies, and behold it comes out a living, legal tender, debt-paying dollar.
We lay it on the railroad track, allow a train of cars to run over it, and although it has lost none of its weight, fineness or intrinsic value, the dollar has fled, it is no longer money, and will not legally pay a debt of ten cents.
Where has the dollar gone ?
Where, and what, was that element, or principle called money, or a dollar ?
In its crude natural state it did not possess it. It went under the mint dies and came out with a soul of money -- a living legal tender. It possessed a new, and a debt-paying function, which it did not before possess. Under the car wheel it lost that function, or quality. Its legal tender spirit was driven out of it. It became a dead commodity. Its money soul had departed.
Now, what is money ?
Not the material body of 25.8 grains of metal, for although that still existed before it went to the mint, and after the car wheels passed over it, the money principle was not in it. Money, then, is not material, nor does it possess intrinsic value; for the intrinsic value of 25.8 grains of gold was not changed from the time it came from the ore bed till its flattened form was taken from under the car wheel.
If money, then, is the spirit of legal tender breathed into an organic or material form by the sovereign power of the government, as the spirit of man is breathed by God into the soul's clayey tenement, why clamor for a body, or hope to obtain an equal in intrinsic value to the spirit that inhabits it ?
As Pagans worship a material deity of wood or stone, so let financial idolators, who cannot comprehend or grasp the idea of the spirit of money, worship the image of gold and silver, while a higher wisdom, a more refined civilization, and a more exalted manhood abandon this Pagan materialism, and substitute the true and the living.
E.P. Elder, in his treaties on political economy, says:
"Money is no more a standard of the value of the things exchanged than is any other commodity."
Speaking of the precious metals, Adam Smith says:
"Constantly varying in their own value, they can never be made an accurate measure of the value of other commodities."Colwell, in his Ways and Means of Payment, says:
"Another attribute generally given to the precious metals is that they are a standard of value."This is inaccurate.
"Gold cannot, in the mint, be made the standard for silver, nor can silver be made the standard for gold. Much less, taking the whole range of articles for human consumption, can they be a standard of value to which all can be referred. The term standard is, then, inaccurately applied, when it is used with any signification. If gold is a standard at all, it is a standard of payment, but not of value."
We can measure a quart of milk with a quart measure, and that measure will measure that amount a thousand different times, and during as many different years. But who ever heard of a dollar, no matter how "honest" it was, or how universally the world recognized it as such, that would measure, or represent, the value of a given amount of wheat any two years, or even two days, in succession ?
If money measures values, there would be no necessity for "price currents," "market reports," goods marking, or bantering in trade. When we wish to measure the value of anything, we do not approach it with coin or legal tender. An experienced lapidary is better than all the gold in Christendom to determine the value of a jewel. If we want a piece of property appraised, we do not employ gold, but intelligent experience, and sound judgment. After intelligence has ascertained the value, we express it in money terms. The unit of value, the dollar for instance, is used to express the value which intelligence has determined. We measure value, then, with brains, and express it in terms of money, as we measure yards by the stick, and express them in numbers. So money is no more the measure of values than figures are the measure of yards.
Price is the relation of commodities to the money of account. Value is the relation of commodities to the labor, or force, usually required to produce them.
Adam Smith says:
"Labor, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can, at all times and places, be estimated and compared. It is their real value; money is their nominal price only."
Carey defines value as "simply the measure of resistance that labor and skill meet in subduing natural objects to human use."
The value of commodities is not changed by high or low price. For instance, wheat may be a dollar a bushel in gold in Canada, and two dollars a bushel in green backs in the United States. Supposing a Canadian farmer and an Illinois farmer meet in New York with a cargo of fifty bushels of wheat each, the Canadian receiving one dollar per bushel in gold, and the Illinois farmer two dollars per bushel in greenbacks. Have they received equal value, or the representative of equal value ? Certainly, for the $50 of gold will purchase the same quantity of labor, dry goods, groceries or other commodities that the $100 of greenbacks will. The only difference is, the greenbacks will pay twice the amount of debts in the United States that the gold will in Canada, but their purchasing power is no greater. The larger the volume of money, the more active its circulation, the more lively and the better times are, and the higher prices are. It matters not how high prices are in the currency of the country, it does not change the value relation between labor and commodities. The proceeds of the sale of high priced commodities in this country, will purchase no more or less of English manufactures, than the proceeds of the sale of the same commodities in England, or Germany, where prices may be 50 per cent. less. Wheat may be five dollars per bushel in American money, and but one dollar in English money, while its value may be the same in each country, measured by the purchasing power of its proceeds.
The money of the country should be sufficiently abundant to render its circulation free and easy, and readily obtainable at all times. The question of great importance is, after the volume of money and general prices are once established, to keep them uniform, and unvarying. If prices drop, debtors are wronged. If they advance above what they were when the debt was contracted, the creditor is wronged. All debts should be paid in a money having the same purchasing power, no more nor less, than money possessed at the time the obligation was incurred. It is the great decline in prices, and the appreciation of money, giving creditors double the value of their dues, robbing debtors of half the value of their labor and products, that has given rise to the greenback movement.
To pay to-day, when prices are down to a gold valuation, debts contracted when prices corresponded to thirty, or forty dollars per capita of circulation, is an outrageous swindle, nothing short of robbery upon every debtor and tax-payer in the nation. Why should nine-tenths of the people be robbed for all time to come, for the sake of feathering the nests and double paying the other tenth, who neither produce wealth, nor contribute to the support of the government by whose laws they receive their unjust gains ?
If there were no debts drawing fixed amounts of interest, the gold basis for money would have no advocates. The mountains of the world's debt, whose fixed interest yields colossal annual fortunes to their owners, were created almost wholly when prices were very high, and money very cheap, and to double the value of these debts, and the purchasing power of their annual income, the dollars in which it has to be paid have been doubled in value by limiting currency to a gold basis and depressing prices to a gold standard. This injustice is what the greenback party aims to overcome by cutting loose from gold and greenback equivalency, and lessening the purchasing power of money, by increasing its volume.
Prices are the estimate of mankind of the relative value of one thing to another, as compared with money. The term "price" is ordinarily employed to denote the amount of value possessed by a given thing expressed in terms of money. Thus, when we say, "wheat is worth a dollar a bushel," a dollar is the price of a bushel of wheat. But while we constantly use language in such a way as to imply that the value of the thing to which we affix the "price" is the sole fact we wish to determine, in reality, we put a price on the money as much as we do on whatever we "price." When we say "corn is worth a half a dollar a bushel," we virtually say that the price of a dollar is two bushels of corn. The average scale of prices measures the value of money as effectually as money measures the prices of commodities. The scale of prices is governed chiefly by two influences.
First, the volume of legal tender money in circulation; for, increase the volume, and the price of labor rises, and that raises the price of commodities. Diminish the amount of money, and wages and commodities fall in price. Money is like everything else. The scarcer it is, the dearer it is, and the more labor or commodities it takes to purchase a given sum.
Second, the extent to which public and private credit is employed in the form of notes, checks, bills of exchange, etc. It is not the amount of money in existence which determines prices, so much as the amount in active circulation. From 1866 to 1873 the circulating medium was diminished by the funding of over a thousand million greenbacks and treasury notes, still prices were kept up by the substitutions of inflated credits in place of money until the crash of the latter year produced a sudden and actual contraction of money, and credit, of over a thousand million dollars in a day, which caused prices to fall like the forest before a cyclone.
Prior to this time, prices had become established, and all debts and contracts were made with reference to these prices. But the contraction of the currency enhanced the value of money, depreciated prices, and robbed every man who sustained the relation of debtor, or contractor, whose obligations were incurred on the scale of prices previously existing.
From Sumner's Reminiscences of Colonial Times, we learn that for many generations after the first settlement of the Colonies, the work of production was slow and laborious, and the surplus products, at least such as could find their way to foreign markets, were hardly sufficient to procure in return the common necessaries of life. The small sums of money brought to the country by the settlers were soon exhausted, sent abroad for merchandise; and trade, for the most part, had to be carried on by the inconvenient method of barter. The Indians found along the shores of Long Island Sound, were more advanced in civilization than those further north, and used a circulating medium of exchange, consisting of beads of two kinds, one white, made out of the end of a periwinkle shell, and the other black, made out of the dark part of a clam shell. They were rubbed down and polished, and, when artistically arranged in strings or belts, formed objects of real beauty. These beads circulated among the Indians as money, one black bead being reckoned as worth two white ones, and were known as Wampum. The Colonists came to use them, first in their trade with the Indians, and then among themselves. In Massachusetts they became by custom, the common currency of the colony, and were made a legal tender in small sums. The first issue of paper money made in the Colonies, was made by Massachusetts in 1690, six years before the establishment of the Bank of England. An expedition had been sent out against Canada, and, returning without spoils, and in a state of misery, the soldiers were clamorous, for their pay. So £7,000 were issued in notes from 5s. to £5. The form of these notes or bills was as follows:
" This indented bill of ten shillings, due from the Massachusetts colony to the possessor, shall be in value equal to money, and shall be accordingly accepted by the treasurer, and receivers subordinate to him in all public payments, and for any stock at any time in the treasury." They circulated at par with coin for twenty years, until redeemed. In 1703, another issue of £15,000 was authorized, which were made a legal tender for private debts. In 1716, another issue to the amount of £150,000 was authorized, to be distributed among the different counties of the province, and to be put into the hands of five trustees in each county, to be appointed by the legislature, to be let out on real estate security in the county in specific sums for the space of ten years, at 5 per cent. per annum. Another act for £50.000, in bills, was passed in 1720, which resulted in clearing Massachusetts of debt in 1773. In 1720, bills were issued by the colony of Rhodes Island, and were made legal tender for all debts. The colony of Connecticut issued similar bills at various times between 1709 and 1731. New York began to issue bills in 1709; Pennsylvania, in 1723; Maryland, in 1733; Delaware, in 1739; Virginia, in 1755; and South Carolina, in 1703. The first emission of bills by Virginia bore 5 per cent. interest, and, according to Jefferson, in a very short time not one of them was to be found in circulation. They were locked up for the interest. "We then," says Jefferson, "issued bills bottomed on a redeeming tax, but bearing no interest -- these were readily received, and never depreciated a farthing. Several hundred thousand dollars of this colonial paper money remained in circulation more than twenty years at par with gold, with no other basis, or advantage, than being receivable for debts and taxes."
But in 1751, Parliament, controlled by the money power of Great Britain, and becoming alarmed at the prosperity and growing independence of the colonies, passed an act forbidding the issue of any more paper money, and in 1763 all colonial acts for issuing paper money were declared by act of Parliament void. Dr. Franklin visited England and protested against the act, but without avail. He stated to the British authorities that before the issue of colonial money, the colonies were stripped of gold and silver. That there were great difficulties for the want of money, as trade had to be carried on by the extremely inconvenient method of barter. But that the introduction of colonial paper money had given new life to business, promoted greatly the settlement and development of the country, whereby the provinces had greatly increased in inhabitants, and their exports had been increased tenfold.
This Parliamentary prohibition, more than anything else, led to the discontent which resulted in the Revolution. The colonial legal tender greenback system caused rich and powerful states to spring up in the wilderness as if by magic, but then, as now, it was liable to educate society into a better system than that of specie, and make production independent of the issuer. It had to be strangled. The shylocks of Change Alley feared its influence upon the institutions of the old world, and as the ruling powers of all monarchies are but the tools of the Money Power, Parliament had to obey.
During the Revolutionary struggle, the colonies or states issued what has since been known as continental money, a description of which, from the pen of Warwick Martin, is given in the following chapter.