In the autumn of 1862 I spent several weeks with Secretary Chase, and was permitted to share his studies of the financial questions which were then engrossing his attention. He was preparing to submit to Congress his matured plans for a system of banking and currency to meet the necessities of the war, and this subject formed the chief theme of his conversation. He was specially anxious to work out in his own mind the probable relations of greenbacks to gold, to the five-twenty bonds, to the proposed national bank-notes, and to the business of the country.
One evening the conversation turned on some question relating to the laws of motion, and Mr. Chase asked for a definition of motion. Some one answered, “Matter is inert; spirit alone can move; therefore motion is the spirit of God made manifest in matter.” The secretary said: “If that is a good definition, then legal-tender notes must be the devil made manifest in paper; for no man can foresee what mischief they may do when they are once let loose.” He gravely doubted whether that war-born spirit, summoned to serve us in a dreadful emergency, would be mustered out of service with honor when the conflict should end, or, at the return of peace, would capture public opinion and enslave the nation it had served. To what extent his fears were well founded may be ascertained by comparing the present state of the public mind in regard to the principles of monetary science with that which prevailed when our existing financial machinery was set up.
More than a million votes will be cast at the next presidential election by men who were school-boys in their primers when the great financial measures of 1862 were adopted; and they do not realize how fast or how far the public mind has drifted. The log-book of this extraordinary voyage cannot be read too often. Let it be constantly borne in mind that fourteen years ago the American people considered themselves well instructed in the leading doctrines of monetary science. They had enjoyed, or rather suffered, an extraordinary experience. There was hardly an experiment in banking and currency that they or their fathers had not fully tested.
The Currency Doctrines of 1862
The statesmen of that period, the leaders of public thought, and the people of all political parties were substantially unanimous in the opinion that the only safe instrument of exchange known among men was standard coin, or paper convertible into coin at the will of the holder.
I will not affirm that this opinion was absolutely unanimous; for doubtless there was here and there a dreamer who looked upon paper money as a sort of fetich, and was ready to crown it as a god. There are always a few who believe in the quadrature of the circle and the perpetual motion. I recently met a cultivated American who is a firm believer in Buddha, and rejoices in the hope of attaining Nirvana beyond the grave. The gods of Greece were dis-crowned and disowned by the civilized world a thousand years ago; yet within the last generation an eminent English scholar attested his love for classical learning and his devotion to the Greek mythology by actually sacrificing a bull to Jupiter, in the back parlor of his house in London. So, in 1862, there may have been followers of William Lowndes and of John Law among our people, and here and there a philosopher who dreamed of an ideal standard of value stripped of all the grossness of so coarse and vulgar a substance as gold. But they dwelt apart in silence, and their opinions made scarce a ripple on the current of public thought.
No one can read the history of that year without observing the great reluctance, the apprehension, the positive dread, with which the statesmen and people of that day ventured upon the experiment of making treasury notes a legal tender for private debts. They did it under the pressure of an overmastering necessity, to meet the immediate demands of the war, and with a most determined purpose to return to the old standard at the earliest possible moment. Indeed, the very act that made the greenbacks a legal tender provided the effective means for retiring them.
Distressing as was the crisis, urgent as was the need, a large number of the best and most patriotic men in Congress voted against the act. The ground of their opposition was well expressed by Owen Lovejoy, of Illinois, who, after acknowledging the unparalleled difficulties and dangers of the situation, said, “There is no precipice, there is no chasm, there is no possible bottomless, yawning gulf before the nation so appalling, so ruinous, as this same bill that is before us.”
Of those who supported the measure, not one defended it as a permanent policy. All declared that they did not abate a jot of their faith in the soundness of the old doctrines.
Thaddeus Stevens said, “This bill is a measure of necessity, not of choice. No one would willingly issue paper currency not redeemable on demand, and make it a legal tender. It is never desirable to depart from the circulating medium which, by the common consent of civilized nations, forms the standard of value.”
In the Senate the legal-tender clause was adopted by only five majority. The senators who supported it were keenly alive to its dangerous character. Mr. Fessenden, chairman of the committee on finance, said of the bill, “It proposes something utterly unknown in this government from its foundation: a resort to a measure of doubtful constitutionality, to say the least of it, which has always been denounced as ruinous to the credit of any government which has recourse to it; ... a measure which, when it has been tried by other countries, as it often has been, has always proved a disastrous failure.”
With extreme reluctance he supported the bill, but said the committee was bound “that an assurance should be given to the country that it was to be resorted to only as a policy; that it was what it professed to be, but a temporary measure. I have not heard any man express a contrary opinion, or, at least, any man who has spoken on the subject in Congress. ... All the gentlemen who have written on the subject, except some wild speculators on currency, have declared that as a policy it would be ruinous to any people; and it has been defended, as I have stated, simply and solely upon the ground that it is to be a single measure standing alone, and not to be repeated. ... It is put upon the ground of absolute, overwhelming necessity.”
Mr. Sumner, who supported the bill, said, “Surely we must all be against paper money, we must insist upon maintaining the integrity of the government, and we must all set our faces against any proposition like the present except as a temporary expedient, rendered imperative by the exigency of the hour ... A remedy which at another moment you would reject is now proposed. Whatever may be the national resources, they are not now in reach except by summary process. Reluctantly, painfully, I consent that the process should issue. And yet I cannot give such a vote without warning the government against the dangers from such an experiment. The medicine of the constitution must not become its daily bread.”
Such was the unanimous sentiment which animated Congress in making its solemn pledge to return to the old path as soon as the immediate danger should pass.
The close of the war revealed some change of opinion, but the purpose of 1862 was still maintained. December 14, 1865, the House of Representatives resolved, —
“That the House cordially concurs in the views of the Secretary of the Treasury in relation to the necessity of a contraction of the currency with a view to as early a resumption of specie payments as the business interest of the country will permit; and we hereby pledge cooperative action to this end as speedily as practicable.”
This resolution was adopted on a call of the ayes and noes, by the decisive vote of one hundred and forty-four to six.
The last ten years have witnessed such a change of sentiment as seldom occurs in one generation. During that time, we have had a Babel of conflicting theories. Every exploded financial dogma of the last two hundred years has been revived and advocated. Congresses and political parties have been agitated and convulsed by the discussion of old and new schemes to escape from the control of the universal laws of value, and to reach prosperity and wealth without treading the time-worn path of honest industry and solid values. All this recalls Mr. Chase’s definition of irredeemable paper money.
The great conflict of opinion resulting from this change of sentiment finds expression in the cries of hard money and soft money which have been so constantly echoed from State to State during the last six months. Following these as rallying-cries, the people are assembled in hostile political camps, from which they will soon march out to fight the presidential battle of 1876.
The recently invented term “soft money” does not convey a very precise notion of the doctrine it is intended to describe. In fact, it is applied to the doctrines of several distinct groups of theorists, who differ widely among themselves, but who all agree in opposing a return to specie as the basis of our monetary system.
The scope of these opinions will be seen in the declarations which recent public discussions have brought forth.
(1.) Most of the advocates of soft money deny that political economy is a universal science. They insist that each nation should have a political economy of its own. In pursuance of this opinion, they affirm that our country should have a standard of value peculiar to itself, and a circulating medium which other nations will not use; in short, a non-exportable currency.
“Beyond the sea, in foreign lands, it [our greenback currency] fortunately is not money; but, sir, when have we had such an unbroken career of prosperity in business as since we adopted this non- exportable currency?” (Hon. W. D. Kelley.)
“Money should be a thing of or belonging to a country, not of the world. An exportable commodity is not fitted to be money.” (Quoted as a motto by Henry Carey Baird.)
“I desire the dollar to be made of such material that it shall never be exported or desirable to carry it out of the country.” (Hon. B. F. Butler, Cooper Institute, October 15, 1875.)
The venerable Henry C. Carey, under date of August 15, 1875, addressed a long letter to the chairman of the Detroit Greenback Convention, in which he argues that this country ought to “maintain permanently a non-exportable circulation.” Lie says, “This important idea was first promulgated by Mr. Rauget, thirty-six years ago.”
I will quote one other financial authority, which shows that the honor of this discovery does not belong to Ranget, nor to the present century. In his work entitled Money and Trade considered: with a Proposal for Supplying the Nation with Money, published at Edinburgh, 1705, John Law says: —
“If a money be established that has no intrinsick value, and its extrinsick value be such as it will not be exported, nor will not be less than the demand for it within the country, wealth and power will be attained, and will be less precarious. ... The paper money herein proposed being always equal in quantity to the demand, the people will be employed, the country improved, manufacture advanced, trade domestic and foreign carried on, and wealth and power attained; and [it] not being liable to be exported, the people will not he set idle, etc., and wealth and power will be less precarious.”
The subsequent experiments of Law are fitting commentaries.
(2.) They propose to abandon altogether the use of gold and silver as standards of value or instruments of exchange, and hold that the stamp of the government, not the value of the material on which it is impressed, constitutes money.
“I want the dollar stamped on some convenient and cheap material, of the least possible intrinsic value, ... and I desire that the dollar so issued shall never be redeemed.” (Hon. B. F. Butler, Cooper Institute.)
“A piece of pig-metal is just as much money as a piece of gold, until the public authority has stamped it, and said that it shall be taken for so much. Suppose, then, that instead of taking a bar of silver or a bar of pig-metal, the government of the United States takes a piece of paper, called a greenback, and says that this shall pass for a legal tender in the receipt and expenditure of government dues, and in all the transactions of the people. Suppose this government to be a government of good standing, of sound credit, and responsible for its paper. This dollar thus stamped, instead of a piece of metal being stamped, is to all intents and purposes equivalent to a silver dollar when it has been made such by the government of the United States.” (Campaign speech of Governor Allen, Gallipolis, Ohio, July 21, 1875.)
“The use of gold or other merchandise as money is a barbarism unworthy of the age.” (Wallace P. Groom, New York.)
“The pretense of redemption in gold and silver is of necessity a delusion and an absurdity.” (Britton A. Hill, Missouri.)
“The government can make money of any material and of any shape and value it pleases.” (Hon. O. S. Halsted, New Jersey.)
(3.) They are not agreed among themselves as to what this new soft money shall be. They do agree, however, that the national banking system shall be abolished, and that whatever currency may be adopted shall be issued directly from the treasury, as the only money of the nation. Three forms are proposed: —
First. The legal tenders we now have, their volume to be increased and their redemption indefinitely postponed. The advocates of this form are the inflationists proper, who care more for the volume than the character of the currency.
Second. “Absolute money;” that is, printed pieces of paper, called dollars, to be the only standard of value, the only legal tender for all debts, public and private, the only circulating medium. The advocates of this kind of money, though few in numbers, claim the highest place as philosophers.
The ablest defense of this doctrine will be found in a brochure of one hundred and eighteen pages, by Britton A. Hill, published in St. Louis during the present year and entitled Absolute Money. The author says, —
“If such national legal-tender money is not of itself sovereign and absolute, but must be convertible into some other substance or thing, before it can command universal circulation, what matters it whether that other substance or thing be interest-bearing bonds or gold or silver coin? ... The coin despotism cannot be broken by substituting in its place the despotism of interest-bearing bonds.”
Third. A legal-tender note not redeemable, but exchangeable, at the will of the holder, for a bond of the United States bearing 3.66 per cent. interest, which bond shall in turn be exchangeable, at the will of the holder, for legal-tender notes. In order that this currency shall be wholly emancipated from the tyranny and barbarism of gold and silver, most of its advocates insist that the interest on the bonds shall be paid in the proposed paper money. This financial perpetual-motion is regarded as the great discovery of our era, and there are numerous claimants for the honor of being the first to discover it.
Mr. Wallace P. Groom, of New York, has characterized this currency in a paragraph which has been so frequently quoted, that it may be fairly called their creed. It is in these words:
“In the interchangeability (at the option of the holder) of national paper money with government bonds bearing a fixed rate of interest, there is a subtle principle that will regulate the movements of finance and commerce as accurately as the motion of the steam-engine is regulated by its governor. Such PAPER MONEY TOKENS would be much nearer perfect measures of value than gold or silver ever have been or ever can be. The use of gold or other merchandise as money is a barbarism unworthy of the age.”
(4.) The paper-money men are unanimous in the opinion that the financial crisis of 1873 was caused by an insufficient supply of currency, and that a large increase will stimulate industry, restore prosperity, and largely augment the wealth of this country.
Hon. Alexander Campbell, of Illinois, a leading writer of the soft-money school, thinks there should now be in circulation not less than $1,290,000,000 of legal-tender notes.
John G. Drew, another prominent writer, insists that “as England is an old and settled country, and we are just building ours,” we ought to have at least $60 per capita, or an aggregate of $2,500,000,000.
No doubt the very large vote in Ohio and Pennsylvania in favor of soft money resulted, in great measure, from the depressed state of industry and trade, and a vague hope that the adoption of these doctrines would bring relief. The discussion in both States was able; and, toward the close of the campaign, it was manifest that sound principles were every day gaining ground. Important as was the victory in those States, it is a great mistake to suppose that the struggle is ended. The advocates of soft money are determined and aggressive, and they confidently believe they will be able to triumph in 1876.
It ought to be observed, as an interesting fact of current history, that the soft-money men are making and collecting a literature which cannot fail to delight the antiquarian and the reader of curiosities of literature. They are ransacking old libraries to find any
quaint and curious
Volume of forgotten lore
which may give support to their opinions. In a recent pamphlet, Henry Carey Baird refers to Andrew Yarranton as “the father of English political economy.” The forgotten treatise which is now enrolled among the patristic books of the new school was published in London in 1677, and is entitled “England’s Improvement by Sea and Land. To outdo the Dutch without Fighting, to pay Debts without Moneys, and to set at work all the Poor of England with the Growth of our own Lands.”
The author proposes a public bank, based on the registered value of houses and lands, “the credit whereof making paper go in trade equal with ready money, yea better, in many parts of the world, than money.” He was perhaps the first Englishman who suggested a currency based on land. On pages 30-33 of his book may be found his draft of a proposed law, which provides “that all bonds or bills issued on such registered houses may be transferable, and shall pass and be good from man to man in the nature of bills of exchange.”
The writings of John Law are also finding vigorous defenders. Britton A. Hill, in the pamphlet already quoted, devotes a chapter to, his memory, compares him favorably with Leibnitz and Newton, and says, “John Law is justly regarded as one of the most profound thinkers of his age, in that he originated the first fundamental principle of this proposed absolute money.” The admirers of “father” Yarranton should see to it that the outdoer of the Dutch is not robbed of his honors by the great Scotsman.
English history is being hunted through to find some comfort for the new doctrines in the writings of that small minority who resisted the Bullion Report of 1810 and the resumption of cash payments in 1819, and continued to denounce them afterwards. History must be rewritten. We must learn that Mathias Attwood (who?), not Lord Liverpool, Huskisson, or Peel, was the fountain of financial wisdom. Doubleday, whom no English writer has thought it worth while to answer, is much quoted by the new school, and they have lately come to feel the profoundest respect for Sir Archibald Alison, because of his extravagant assault upon the Resumption Act of 1819. Alison holds a place in English literature chiefly because he wrote a work which fills a gap in English history not otherwise filled.
In 1845 he wrote a pamphlet entitled “England in 1815 and 1845; or, a Sufficient and a Contracted Currency,” which the subsequent financial and commercial events in his country have so fully refuted that it has slept for a generation in the limbo of things forgotten. It is now unearthed, and finds an honored place in the new literature.
As a specimen of Alison’s financial wisdom, we quote the following: “The eighteen years of war between 1797 and 1815 were, as all the world knows, the most glorious and, taken as a whole, the most prosperous that Great Britain has ever known. ... Never has a prosperity so universal and unheard-of pervaded every department of the empire.” He then enumerates the evidences of this prosperity, and prominent among them is this: “While the revenue raised by taxation was but £21,000,000 in 1796, it had reached £72,000,000 in 1815; and the total expenditures from taxes and loans had reached £117,000,000 in 1815.” Happy people, whose burdens of taxation were quadrupled in eighteen years, and whose expenses, consumed in war, exceeded their revenues by the sum of $225,000,000 in gold!
The infiationists have not been so fortunate in augmenting their literary store from the writings and speeches of our early American statesmen. Still, they have made vigorous efforts to draft into their service any isolated paragraph that can be made useful for their purpose. So far as I have seen, they have found no comfort in this search except in very short extracts from three of the great leaders of public thought. The first is from a juvenile essay in defense of paper money, written by Benjamin Franklin in 1729, when he was twenty-two years of age. This has been frequently quoted during the last four years. They are not so fond of quoting Franklin the statesman and philosopher, who after a life-long experience wrote, in 1783, these memorable words: —
“I lament with you the many mischiefs, the injustice, the corruption of manners, etc., that attend a depreciated currency. It is some consolation to me that I washed my hands of that evil by predicting it in Congress, and proposing means that would have been effectual to prevent it if they had been adopted. Subsequent operations that I have executed demonstrate that my plan was practicable; but it was unfortunately rejected.”
A serious attempt has been made to capture Thomas Jefferson and bring him into the service. The following passage from one of his letters to John W. Eppes has been paraded through this discussion with all the emphasis of italics, thus: —
“Bank paper must be suppressed, and the circulating medium must be restored to the nation, to whom it belongs. It is the only fund on which they can rely for loans; it is the only resource which can never fail them, and it is an abundant one for every necessary purpose. Treasury bills bottomed on taxes, bearing or not bearing interest, as may be found necessary, thrown into circulation, will take the place of so much gold or silver, which last, when crowded, will find an effiux into other countries, and thus keep the quantum of medium at its salutary level.”
This passage was quoted as a strong point for the soft-money men in their campaign documents in Ohio, last fall. They did not find it convenient to quote the great Virginian more fully. When this letter was written, the United States was at war with England, with no friendly nation from whom to obtain loans. The demand for revenue was urgent, and the treasury was empty. Mr. Jefferson had long been opposed to the state banks, and he saw that by suppressing them and issuing treasury notes, with or without interest, the government could accomplish two things: destroy state bank currency, and obtain a forced loan, in the form of circulating notes. In enforcing this view, he wrote from Monticello to Mr. Eppes, June 24, 1813: “I am sorry to see our loans begin at so exorbitant an interest. And yet, even at that, you will soon be at the bottom of the loan-bag. Ours is an agricultural nation. ... In such a nation there is one and only one resource for loans, sufficient to carry them through the expense of a war; and that will always be sufficient, and in the power of an honest government, punctual in the preservation of its faith. The fund I mean is the mass of circulating coin. Every one knows that, although not literally, it is nearly true that every paper dollar emitted banishes a silver one from the circulation. A nation, therefore, making its purchases and payments with bills fitted for circulation, thrusts an equal sum of coin out of circulation. This is equivalent to borrowing, that sum; and yet the vendor, receiving payment in a medium as effectual as coin for his purchases or payments, has no claim to interest. ... In this way I am not without a hope that this great, this sole resource for loans in an agricultural country might yet be recovered for the use of the nation during war; and, if obtained in perpetuum, it would always be sufficient to carry us through any war, provided that in the interval between war and war all the outstanding paper should be called in, coin be permitted to flow in again, and to hold the field of circulation until another war should require its yielding place again to the national medium.”
From this it appears that Jefferson favored the issue of treasury notes to help us through a war: but he insisted that they should be wholly retired on the return of peace. His three long letters to Eppes are full of powerful and eloquent denunciations of paper money. The soft-money men appeal to Jefferson. We answer them in his own words: “The truth is that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks of paper money.”
Their third attempt to elect some eminent statesman as an honorary member of the new school affords a striking illustration of a method too often adopted in our politics. It was very confidently stated by several advocates of soft money that John C. Calhoun had suggested that a paper money, issued directly by the government and made receivable for all public dues, would be as good a currency as gold and silver. Mr. Hill finally claimed Calhoun’s authority in support of his absolute money, and printed on pages 56, 57 of his pamphlet a passage from a speech of Calhoun’s. This extract was used in the Ohio campaign with much effect, until it was shown that there had been omitted from the passage quoted these important words: “leaving its creditors to take it [treasury note circulation] or gold and silver at their option.” After this exposure, the great nullifier was left out of the canvass. Thus far we have attempted no more than to exhibit the state of public opinion in regard to the currency in 1861-62, the changes that have since occurred, and the leading doctrines now held by the soft-money men.
Most of these dogmas are old, and have long ago been exploded. All are directly opposed to principles as well established as the theorems of Euclid.
The Doctrine of Hard Money
Believing that this generation of Americans is not willing to ignore all past experience, and to decide so great an issue as though it were now raised for the first time, we shall attempt to state, in brief compass, the grounds on which the doctrine of hard money rests.
Hard money is not to be understood as implying a currency consisting of coin alone (though many have held, with Benton, that no other is safe), but that coin of ascertained weight and fineness, duly stamped and authenticated by the government, is the only safe standard of money; and that no form of credit-currency is safe unless it be convertible into coin at the will of the holder.
Money as an Instrument of Exchange
As preliminary to this discussion, it is necessary to determine the functions which money performs as an instrument of exchange. As barter was the oldest form of exchange, so it was and still is the ultimate object and result of all exchanges. For example: I wish to exchange my commodities or services for commodities or services of a different kind. I find no one at hand who has what I want, and wants what I have. I therefore exchange, or, as we say, sell, my commodities for money, which I hold until I find some one who wishes to sell what I want to buy. I then make the purchase. The two transactions have, in fact, resulted in a barter. It amounts to the same thing as though, at the start, I had found a man who wanted my commodities, and was willing to give me in exchange the commodities I desired. By a sale and a purchase I have accomplished my object. Money was the instrument by which the transactions were made. The great French economist, J. B. Say, has justly described a sale as half a barter, for we see, in the case above stated, that two sales were equivalent, in effect, to one act of simple barter. But some time may elapse between my sale and the subsequent purchase. How are my rights of property secured during the interval? That which I sold carried its value in itself as an exchangeable commodity; when I had exchanged it for money, and was waiting to make my purchase, the security for my property rested wholly in the money resulting from the sale. If that money be a perfect instrument of exchange, it must not only be the lawful measure of that which I sold, but it must, of itself, be the actual equivalent in value. If its value depends upon the arbitrary acts of government or of individuals, the results of my transaction depend not upon the value of that which I sold nor of that which I bought, nor upon my prudence and skill, but upon an element wholly beyond my control — a medium of exchange which varies in value from day to day.
Such being the nature of exchanges, we should expect to find that so soon as man begins to emerge from the most primitive condition of society and the narrowest circle of family life, he will seek a measure and an instrument of exchange among his first necessities. And in fact it is a matter of history that in the bunting state skins were used as money, because they were the product of chief value. In the pastoral state the next advance in civilization sheep and cattle, being the most valuable and negotiable form of property, were used as money. This appears in the earliest literature. In the Homeric poems oxen are repeatedly mentioned as the standard by which wealth was measured. The arms of Diomed were declared to be worth nine oxen, as compared with those of Glaucos, worth one hundred. A tripod, the first prize for wrestlers, in the twenty-third book of the Iliad was valued at twelve oxen, and a female captive, skilled in industry, at four.
In many languages the name for money is identical with that for some kind of cattle. Even our word “fee” is said to be the Anglo-Saxon “feoh,” meaning both money and cattle. Sir H. S. Maine, speaking of the primitive state of society, says, “Being counted by the head, the kine was called capitale, whence the economic term capital, the law term chattel, and our common name cattle.”
In the agricultural and manufacturing stage of civilization, many forms of vegetable and manufactured products were used as money, such as corn, wheat, tobacco, cacao nuts, cubes of tea, colored feathers, shells, nails, etc.
All these species of wealth were made instruments of exchange because they were easily transferable, and their value was the best known and least fluctuating. But the use of each as money was not universal; in fact, was but little known beyond the bounds of a single nation. Most of them were non-exportable; and though that fact would have commended them to the favor of some of our modern economists, yet the mass of mankind have entertained a different opinion, and have sought to find a medium whose value and fitness to be used as money would be universally acknowledged.
It is not possible to ascertain when and by whom the precious metals were first adopted as money; but for more than three thousand years they have been acknowledged as the forms of material wealth best fitted to be the measure and instrument of exchange. Each nation and tribe, as it has emerged from barbarism, has abandoned its local, non-exportable medium, and adopted what is justly called “the money of the world.”
Coinage was a later device, employed for the sole purpose of fashioning into a convenient shape the metal to be used as money, and of ascertaining and certifying officially the weight and fineness of each piece.
And here has arisen the chief error in reference to the nature of money. Because the government coins it, names its denomination, and declares its value, many have been led to imagine that the government creates it, that its value is a gift of the law.
The analogy of other standards will aid us at this point. Our constitution empowers Congress to fix the standard of weights and measures, as well as of values. But Congress cannot create extension, or weight, or value. It can measure that which has extension; it can weigh that which is ponderable; it can declare and subdivide and name a standard; but it cannot make length of that which has no length; it cannot make weight of that which is imponderable; it cannot make value of that which has no value. Ex nihilo nihil fit. The power of Congress to make anything it pleases receivable for taxes is a matter wholly distinct from the subject now under discussion. Legislation cannot make that a measure of value which neither possesses nor represents any definitely ascertained value.
Coin an Instrument of Universal Credit
Now apply to the operations of exchange a given coin, whose weight and fineness are certified by public authority. We cannot do this better than by borrowing the language of Frederic Bastiat, found in his treatise entitled Maudit Argent. He says, —
“You have a crown. What does it signify in your hands? It is the testimony and the proof that you have at some time performed a work; and, instead of profiting by it yourself, you have allowed the community to enjoy it, in the person of your client. This crown is the evidence that you have rendered a service to society; and it states the value of that service. Moreover, it is the evidence that you have not drawn from the community the real equivalent, as was your right. In order to enable you to exercise that right when and as you please, society, by the hand of your client, has given you a recognition, a title, a bond of the commonwealth, a token, in short a crown, which differs from other fiduciary titles only in this, that it carries its value in itself; and if you can read with the eyes of the mind the inscription which it bears, you will distinctly decipher these words: ‘Render to the bearer a service equivalent to that which he has rendered to society; a value received, stated, proved, and measured by that which is in me.’ ... If you now give that crown to me as the price of a service, this is the result: your account with society for real services is found regular, is balanced and closed, ... and I am justly in the position where you were before.”
Edmund Burke expressed the same opinion when he said, “Gold and silver are the two great, recognized species that represent the lasting, conventional credit of mankind.”
Three thousand years of experience have proved that the precious metals are the best materials of which to make the standard of value, the instrument of exchange. They are themselves a store of value; they are durable, divisible, easily transported, and more constant in value than any other known substances. In the form of dust and bars, as merchandise, their value is precisely equal to their declared value as money, less the very small cost of coinage. Coin made of these metals measures wealth, because it represents wealth in itself, just as the yard-stick measures length, and the standard pound measures weight, because each has, in itself, that which it represents.
Again, the precious metals are products of labor, and their value, like that of all other merchandise, depends upon the cost of production. A coin represents and measures the labor required to produce it; it may be called an embodiment of labor. Of course this statement refers to the average cost of production throughout the world, and that average has varied but little for many centuries. It is a fiat absurdity to assert that such a reality as labor can be measured and really represented by that which costs little or no labor. For these reasons the precious metals have been adopted by the common law of the world as the best materials in which to embody the unit of money.
Statutes Cannot Repeal the Laws of Value
The oldest and perhaps the most dangerous delusion in reference to money is the notion that it is a creation of law; that its value can be fixed and maintained by authority. Yet no error has been more frequently refuted by experience. Every debasement of the coin, and every attempt to force its circulation at a higher rate than the market value of the metal it contains, has been punished by the inevitable disasters that always follow the violation of economic laws.
The great parliamentary debate of 1695, on the recoinage of English money, affords an absolute demonstration of the truth that legislatures cannot repeal the laws of value. Mr. Lowndes, the secretary of the treasury, though he held that a debasement of the coinage should be rejected as “dangerous and dishonorable,” really believed, as did a large number of members of Parliament, that if, by law, they raised the name of the coin, they would raise its value as money. As Macaulay puts it, “He was not in the least aware that a piece of metal with the king’s head on it was a commodity of which the price was governed by the same law which governs the price of a piece of metal fashioned into a spoon or a buckle; and that it was no more in the power of Parliament to make the kingdom richer by calling a crown a pound than to make the kingdom larger by calling a furlong a mile. He seriously believed, incredible as it may seem, that if the ounce of silver were divided into seven shillings instead of five, foreign nations would sell us their wines and their silks for a smaller number of ounces. He had a considerable following, composed partly of dull men who really believed what he told them, and partly of shrewd men who were perfectly willing to be authorized by law to pay a hundred pounds with eighty.”
It was this debate that called forth those masterly essays of John Locke on the nature of money and coin, which still remain as a monument to his genius and an unanswerable demonstration that money obeys the laws of value and is not the creature of arbitrary edicts. At the same time, Sir Isaac Newton was called from those sublime discoveries in science which made his name immortal, to aid the king and Parliament in ascertaining the true basis of money. After the most thorough examination, this great thinker reached the same conclusions. The genius of these two men, aided by the enlightened statesmanship of Montague and Somers, gave the victory to honest money, and preserved the commercial honor of England for a century.
Paper Money an Instrument of Credit
In discussing the use of paper as a representative of actual money, we enter a new branch of political science, namely, the general theory of credit. We shall go astray at once if we fail to perceive the character of this element. Credit is not capital. It is the permission given to one man to use the capital of another. It is not an increase of capital; for the same property cannot be used as capital by both the owner and the borrower of it, at the same time. But credit, if not abused, is a great and beneficent power. By its use the productiveness of capital is greatly increased. A large amount of capital is owned by people who do not desire to employ it in the actual production of wealth. There are many others who are ready and willing to engage in productive enterprise, but have not the necessary capital. Now, if the owners of unemployed capital have confidence in the honesty and skill of the latter class, they lend their capital at a fair rate of interest, and thus the production of wealth will be greatly increased. Frequently, however, the capital loaned is not actually transferred to the borrower, but a written evidence of his title to it is given instead. If this title is transferable it may be used as a substitute for money; for, within certain limits, it has the same purchasing power. When these evidences of credit are in the form of checks and drafts, bills of exchange and promissory notes, they are largely used as substitutes for money, and very greatly facilitate exchanges. But all are based upon confidence, upon the belief that they represent truly what they profess to represent — actual capital, measured by real money, to be delivered on demand.
These evidences of credit have become, in modern times, the chief instruments of exchange. The bank has become as indispensable to the exchange of values as the railroad is to the transportation of merchandise. It is the institution of credit by means of which these various substitutes for money are made available. It has been shown that not less than ninety per cent. of all the exchanges in the United States are accomplished by means of bank credits. The per cent. in England is not less than ninety-five. Money is now the small change of commerce. It is perhaps owing to this fact that many are so dazzled by the brilliant achievements of credit as to forget that it is the shadow of capital, not its substance; that it is the sign, the brilliant sign, but not the thing signified. Let it be constantly borne in mind that the check, the draft, the bill of exchange, the promissory note, are all evidences of debt, of money to be paid. If not, they are fictitious and fraudulent. If the real capital on which they are based be destroyed, they fall with it, and become utterly worthless. If confidence in their prompt payment be impaired, they immediately depreciate in proportion to the distrust.
We have mentioned among these instruments of credit the promissory note. Its character as an evidence of debt is not changed when it comes to us illuminated by the art and mystery of plate-printing. Name it national bank-note, greenback, Bank of England note, or what you will; let it be signed by banker, president, or king, it is none the less an evidence of debt, a promise to pay. It is not money, and no power on earth can make it money. But it is a title to money, a deed for money, and can be made equal to money only when the debtor performs the promise delivers the property which the deed calls for, pays the debt. When that is done, and when the community knows, by actual test, that it will continue to be done, then, and not till then, this credit-currency will in fact be the honest equivalent of money. Then it will, in large measure, be used in preference to coin, because of its greater convenience, and because the cost of issuing new notes in place of those which are worn and mutilated is much less than the loss which the community suffers by abrasion of the coin. To the extent, therefore, that paper will circulate in place of coin, as a substitute and an equivalent, such circulation is safe, convenient, and economical. And what is the limit of such safe circulation? Economic science has demonstrated, and the uniform experience of nations has proved, that the term which marks that limit, the sole and supreme test of safety, is the exchangeability of such paper for coin, dollar f6r dollar, at the will of the holder. The smallest increase in volume beyond that limit produces depreciation in the value of each paper dollar. It then requires more of such depreciated dollars to purchase a given quantity of gold or of merchandise than it did before depreciation began. In other words, prices rise in comparison with such currency. The fact that it is made a legal tender for taxes and private debts does not free it from the inexorable law that increase of volume decreases the value of every part.
It is equally true that an increase of the precious metals, coined or uncoined, decreases their value in comparison with other commodities; but these metals are of such universal currency, on account of their intrinsic value, that they flow to all parts of the civilized world, and the increase is so widely distributed that it produces but a small increase of prices in any one country. Not so with an inconvertible paper money. It is not of universal currency. It is national, not international. It is non-exportable. The whole effect of its depreciation is felt at home. The level of Salt Lake has risen ten feet during the last thirty years, because it has no outlet. But all the floods of the world have made no perceptible change in the general level of the sea.
The character of inconvertible paper money, the relation of its quantity to its value, and its inevitable depreciation by an increase of volume were demonstrated in the Bullion Report of 1810 by facts and arguments whose force and conclusiveness have never been shaken. In the great debate that followed, in Parliament and through the press, may be found the counterpart of almost every doctrine and argument which has been advanced in our own country since the suspension of specie payments. Then, as now, there were statesmen, doctrinaires, and business men who insisted that the bank-notes were not depreciated, but that gold had risen in value; who denied that gold coin was any longer the standard of value, and declared that a bank-note was “abstract currency.” Castlereagh announced in the House of Commons that the money standard was “a sense of value, in reference to currency as compared with commodities.” Another soft-money man of that day said: “The standard is neither gold nor silver, but something set up in the imagination, to be regulated by public opinion.” Though the doctrines of the Bullion Report were at first voted down in Parliament, they could not be suppressed. With the dogged persistency which characterizes our British neighbors, the debate was kept up for ten years. Every Proposition and counter proposition was sifted, the intelligence and conscience of the nation were invoked; the soft-money men were driven from every position they occupied in 1811, and at last the ancient standard was restored. When the bank redeemed its notes, the difference between the mint price and the market price of bullion disappeared, and the volume of paper money was reduced in the ratio of its former depreciation. During the last half century few Englishmen have risked their reputation for intelligence by denying the doctrines thus established.
These lessons of history cannot be wholly forgotten. It is too late to set up again the doctrines of Lowndes and Vansittart. They may disturb and distract public opinion, but can never again triumph before an intelligent tribunal. I commend to the soft-money men of our time the study of this great debate and that of 1695. When they have overturned the doctrines of Locke and Newton and of the Bullion Report, it will be time for them to invite us to follow their new theories.
But we need not go abroad to obtain illustrations of the truth that the only cure for depreciation of the currency is convertibility into coin. Our American colonies, our Continental Congress, and our state and national governments have demonstrated its truth by repeated and calamitous experiments. The fathers who drafted our constitution believed they had shut and bolted the door against irredeemable paper money; and, since then, no president, no secretary of the treasury, has proposed or sanctioned a paper currency, in time of peace, not redeemable in coin at the will of the holder. Search our records from 1787 to 1861, and select from any decade twenty of our most illustrious statesmen, and it will be found that not less than nineteen of them have left on record, in the most energetic language, their solemn protest and warning against the very doctrines we are opposing.
The limits of this article will allow only the briefest statement of the evils that flow from a depreciated currency, evils both to the government and to the people, which overbalance, a thousand to one, all its real or supposed benefits. The word “dollar” is the substantive word, the fundamental condition, of every contract, of every sale, of every payment, whether at the treasury or at the stand of the apple-woman in the street. The dollar is the gauge that measures every blow of the hammer, every article of merchandise, every exchange of property. Forced by the necessities of war, we substituted for this dollar the printed promise of the government to pay a dollar. That promise we have not kept. We have suspended payment, and have compelled the citizen to receive dishonored paper in place of money. The representative value of that paper has passed, by thousands of fluctuations, from one hundred cents down to thirty-eight, and back again to ninety. At every change, millions of men have suffered loss. In the midst of war, with rising prices and enormous gains, these losses were tolerable. But now when we are slowly and painfully making our way back to the level of peace, now when the pressure of hard times is upon us, and industry and trade depend for their gains upon small margins of profit, the uncertainty is an intolerable evil. That uncertainty is increased by doubts as to what Congress will do. Men hesitate to invest their capital in business, when a vote in Congress may shrink it by half its value. Still more striking are the evils of such a currency in its effects upon international commerce. Our purchases from and sales to foreign nations amount in the aggregate to one billion two hundred million dollars per annum, every dollar of which is measured in coin. Those who export our products buy with paper and sell for gold. Our importers buy with gold and sell for paper. Thus the aggregate value of our international exchanges is measured, successively, by the two standards. The loss occasioned by the fluctuation of these currencies in reference to each other falls wholly on us. We, alone, use paper as a standard. And who, among us, bears the loss? The importer, knowing the risk he runs, adds to his prices a sufficient per cent. to insure himself against loss. This addition is charged over from importer to jobber, from jobber to retailer, until its dead weight falls, at last, upon the laborer who consumes the goods. In the same way, the exporter insures himself against loss by marking down the prices he will pay for products to be sent abroad. In all such transactions capital is usually able to take care of itself. The laborer has but one commodity for sale, his day’s work. It is his sole reliance. He must sell it to-day or it is lost forever. What he buys must be bought to-day. He cannot wait till prices fall. He is at the mercy of the market. Buying or selling, the waves of its fluctuations beat against him. Daniel Webster never uttered a more striking truth than when he said: “Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money. This is the most effectual of inventions to fertilize the rich man’s field by the sweat of the poor man’s face.”
But here we are met by the interconvertible-bond-and-currency men, who offer to emancipate us from the tyranny of gold and secure a more perfect standard than coin has ever been. Let us see. Our five per cent. bonds are now on a par with gold. Any actuary will testify that in the same market a 3.65 bond, payable, principal and interest, in gold, and having the same time to run, is worth but seventy-five cents in gold; that is, thirteen cents less than the present greenback. How much less the bond will be worth if its interest be made payable in the proposed interconvertible currency, no mortal can calculate. It is proposed, then, to make the new currency equivalent to a bond which, at its birth, is thirteen cents below the greenback of to-day. We are to take a long leap downward at the first bound. But “interconvertibility” is the charm, the “subtle principle,” the great “regulator of finance” which will adjust everything. The alternate ebb and flow of bond into paper dollar, and paper dollar into bond, will preserve an equilibrium, an equipoise; and this level of equipoise is the base line that will measure the new standard of value. The lad who sold his two-dollar dog for fifty dollars, and took his pay in pups at ten dollars each, never doubted that he had made a profit of forty-eight dollars until he found how small a sum the whole litter would sell for in the market.
Undoubtedly the beam will lie level that is weighted with the bond at one end and the paper money at the other. But what will be the relation of that level to the level of real values? Both the bond and the currency are instruments of credit, evidences of debt. They cannot escape the dominion of those universal laws that regulate prices. If made by law the only legal tender, such a currency would doubtless occupy the field. But what would be the result? To a certain extent the bonds themselves would be used as currency. The clearing-house banks of New York would doubtless be glad to get interest-bearing bonds instead of the government certificates of indebtedness, bearing no interest, which, for convenience, they now use in the settlement of their balances. The reserves of public and private banks, which now amount to more than two hundred million dollars, would largely be held in these interest-bearing, bonds. Thus the first step would result in compelling the government to pay interest on a large portion of the reserves of all the banks, public and private. It will hardly be claimed, however, that anybody will part with his property for bonds of this description, to hold as a permanent investment. Capital in this country is worth more than 3.65 per cent. How then will the new currency be set afloat? The treasury can pay it out only in exchange for the new bonds or in payment of public dues. Shall we violate public faith by paying the gold bonds already outstanding in this new and greatly depreciated paper? Or shall we, as some of the soft-money men have proposed, enter upon a vast system of public works in order to put the new currency in circulation? No doubt means would be found to push it into circulation, so long as enterprise or speculation should offer a hope of greater profits than 3.65 per cent. Once out, it would inevitably prove a repetition of the old story: an artificial stimulation of business and of speculation; large issues of currency; inflation of prices, depreciation of paper, delirium, prostration; “up like a rocket, then down like a stick.” They tell us that this cannot happen, because as the volume of paper increases, the rate of interest will fall, and when it reaches 3.65 per cent. the currency will be exchanged for bonds. But all experience is against them. Inflation has never brought down the rate of interest. In fact, the rate is always highest in countries afflicted with irredeemable paper money. For all practical purposes, the proposed currency would be unredeemed and irredeemable; and this is what its advocates desire. General Butler sees “no more reason for redeeming the measure of value than for redeeming the yard-stick or the quart pot.” This shows the utmost confusion of ideas. We do not redeem the yard-stick or the quart pot. They are, in reality, what they profess to be. There is nothing better for measuring yards than a yard-stick. But, in regard to the yard-stick, we do what is strictly analogous to redemption when applied to currency. We preserve our yard-stick undiminished and unchanged; and, by the solemn sanction of penal law; we require that it shall be applied to the purchase and sale of all commodities that can be measured by the standard of length. The citizen who buys by a longer yard-stick or sells by a shorter one than our standard, is punished as a felon. Common honesty requires that we restore, and with equal care preserve from diminution or change, our standard of value.
It has been already shown that the soft-money men desire a vast increase of currency above the present volume. The assumed necessity for such an increase was a leading topic in the debates that preceded the late elections.
The argument, often repeated, ran substantially thus: —
“Fellow-citizens! You are in great distress. The smoke of your furnaces no longer ascends to the sky; the clang of your mills and workshops is no longer heard. Your workers in metal and miners in coal are out of employment. Stagnation of trade, depression of business, and public distress are seen on every hand. What has caused these disasters? Manifestly, a lack of money. Is there any man among you who has money enough? If there be, let him stand forth and declare it. Is there one who does not need more money to carry on his business? [Cries of No! No!] The hard-money men have brought you to this distress, by contracting the volume of the currency, by destroying the people’s money, your money. And they propose to complete your ruin by forcing the country to resume specie payments. We come to save you from this ruin. We insist that you shall have more money, not less. We are resolved to make and keep the volume of currency ‘equal to the wants of trade.’”
These assumptions were answered by undeniable facts. It was shown that our large volume of paper currency had helped to bring on the crisis of 1873, and had greatly aggravated its effects; but that the main cause was speculation, over-trading, and, in some branches of business, an over-production beyond the demands of the market.
A striking illustration of the effect of over-production was drawn from the history of one of the interior counties of Northern Ohio. In the midst of a wilderness, far away from the centres of trade, the pioneers commenced the settlement of the county at the beginning of the present century. Year by year their number was augmented. Each new settler was compelled to buy provisions for his family until he could raise his first crop. For several years this demand afforded a ready market, at good prices, for all the products of the farm. But in 1818, the supply greatly exceeded the demand. The wheat market was so glutted that twenty bushels were frequently offered for one pound of tea, and often refused, because tea could be bought only for money, and wheat could hardly be sold at all.
If the soft-money men of our time had been among those farmers, they would have insisted that more money would raise the price of their wheat and set the plowboys at work. But the pioneers knew that until the stock on hand was reduced, the production of another bushel to be sold would be labor wasted. The cry for more currency shows that soft-money men have confounded credit with capital, and vaguely imagine that if more paper dollars were printed they could be borrowed without security.
In whatever form the new currency be proposed, whether in the so-called absolute money or in the interconvertible paper money tokens, as a relief from distress it is a delusion and a snare. All these schemes are reckless attempts to cut loose from real money, — the money known and recognized throughout the world, — and to adopt for our standard that which a great gold gambler of Wall Street aptly called “phantom gold.” Their authors propose a radical and dangerous innovation in our political system. They desire to make the National Treasury a hank of issue, and to place in the control of Congress the vast money power of the nation, to be handled as the whim, the caprice, the necessities, of political parties may dictate. Federalist as Hamilton was, he held that such a power was too great to be centralized in the hands of one body. This goes a hundred leagues beyond any measure of centralization that has yet been adopted or suggested.
In view of the doctrines herein advocated, what shall be said of the present condition of our currency? It is depreciated. Its purchasing power is less than that of real money, by about fourteen per cent. Our notes are at a dis- count; not because the ability of the nation to redeem them is questioned, but partly because its good faith is doubted, and partly because the volume of these notes is too great to circulate at par. What that volume ought to be, no man can tell. Convertibility into coin is a perfect test, and is the only test.
Necessity of Resumption
The duty of the government to make its currency equal to real money is undeniable and imperative. First, because the public faith is most solemnly pledged, and this alone is a conclusive and unanswerable reason why it should be done. The perfidy of one man, or of a million men, is as nothing compared with the perfidy of a nation. The public faith was the talisman that brought to the treasury thirty-five hundred million dollars in loans, to save the life of the nation, which was not worth saving if its honor be not also saved. The public faith is our only hope of safety from the dangers that may assail us in the future. The public faith was pledged to redeem these notes in the very act which created them, and the pledge was repeated when each addition- al issue was ordered. It was again repeated in the act of 1869, known as the act to strengthen the public credit, and yet again in the act of 1875, promising redemption in 1879.
Second. The government should make its currency equal to gold because the material prosperity of its people demands it. Honest dealing between man and man requires it. Just and equal legislation for the people, safety in trade, domestic and foreign, security in business, just distribution of the rewards of labor, — none of these are possible until the present false and uncertain standard of value, has given place to the real, the certain, the universal standard. Its restoration will hasten the revival of commercial confidence, which is the basis of all sound credit.
Third. Public morality demands the reestablishment of our ancient standard. The fever of speculation which our fluctuating currency has engendered cannot be allayed till its cause is destroyed. A majority of all the crimes relating to money, that have been committed in public and private life since the war, have grown out of the innumerable opportunities for sudden and inordinate gains which this fluctuation has offered.
The gold panic of 1869, which overwhelmed thousands of business men in ruin, and the desperate gambling in gold which is to-day absorbing so many millions of capital that ought to be employed in producing wealth, were made possible only by the difference between paper and gold. Resumption will destroy all that at a blow. It will enable all men to see the real situation of their affairs, and will do much toward dissipating those unreal and fascinating visions of wealth to be won without industry, which have broken the fortunes and ruined the morals of so many active aid brilliant citizens.
My limits will not allow a discussion of the hardship and evils which it is feared will accompany the restoration of the old standard. Whatever they may be, they will be light and transient in comparison with those we shall endure if the doctrines of soft money prevail. I am not able to see why the approach to specie may not be made so gradual that the fluctuation in any one month will be less than that which we have suffered from month to month since 1869. We have traveled more than half the distance which then separated us from the gold standard.
A scale of appreciation like that by which England resumed in 1821 would greatly mitigate the hardships arising from the movement. Those who believe that the volume of our currency is but little above its normal level need not fear that there will be much contraction; for, with free banking, they may be sure that all the paper which can be an actual substitute for money will remain in circulation. No other ought to circulate.
The advocates of soft money are loud in their denunciation of the English resumption act of 1819, and parade the distorted views of that small and malignant minority of English writers who have arraigned the act as the cause of the agricultural distress of 1822, and the financial crash which followed, in 1825. The charge is absolutely unjust and unfounded. In 1822 a committee of the House of Commons, having investigated the causes of the agricultural distress of that and the preceding year, found that it was due to the operation of the corn laws, and to the enormous wheat crops of the two preceding seasons. Their report makes no reference to the resumption act as a cause of the distress. In both that and the following year, a few of the old opponents of hard money offered resolutions in the House of Commons, declaring that the resumption act was one of the causes of the public distress. The resolution of 1822 was defeated by a vote of one hundred and forty-one to twenty-seven, and that of 1823 was defeated by the still more decisive vote of one hundred and ninety-two to thirty. An overwhelming majority of intelligent Englishmen look back with pride and satisfaction upon the act of resumption as a just and beneficent measure.
But methods and details of management are of slight importance in comparison with the central purpose so often expressed by the nation. From that purpose there should be no retreat. To postpone its fulfillment beyond the day already fixed is both dangerous and useless. It will make the task harder than ever. Resumption could have been accomplished in 1867 with less difficulty than it can be in 1879. It can be accomplished more easily in 1879 than at any later date. It is said that we ought to wait until the vast mass of private debts can be adjusted. But when will that be done? Horace has told us of a rustic traveler who stood on the bank of a river, waiting for its waters to flow by, that he might cross over in safety. “At ille labitur et labetur in omne volubilis cevum.” The succession of debts and debtors will be as perpetual as the flow of the river.
We ought to be inspired by the recent brilliant example of France. Suffering unparalleled disasters, she was compelled to issue a vast volume of legal-tender notes in order to meet her obligations, But so soon as the great indemnity was paid, she addressed herself resolutely to the work of bringing her currency up to the standard of gold. During the last two years she has reduced her paper currency nearly seven hundred and fifty million francs; and now it is substantially at par.
Amidst all her disasters she has kept her financial credit untarnished. And this has been her strength and her safety. To meet the great indemnity, she asked her people for a loan of three billion francs; and twelve and a half times the amount was subscribed. In August, 1874, the American Minister at Paris said, in one of his dispatches, “Though immense amounts were taken abroad, yet it seems they are all coming back to France, and are now being absorbed in small sums by the common people. The result will be, in the end, that almost the entire loan will be held in France. Every person in the whole country is wishing to invest a few hundred francs in the new loan, and it has reached a premium of four and one half to five per cent.”
Our public faith is the symbol of our honor and the pledge of our future safety. By every consideration of national honor, of public justice, and of sound policy, let us stand fast in the resolution to restore our currency to the standard of gold.
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