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diff --git a/.gitattributes b/.gitattributes new file mode 100644 index 0000000..d7b82bc --- /dev/null +++ b/.gitattributes @@ -0,0 +1,4 @@ +*.txt text eol=lf +*.htm text eol=lf +*.html text eol=lf +*.md text eol=lf diff --git a/LICENSE.txt b/LICENSE.txt new file mode 100644 index 0000000..6312041 --- /dev/null +++ b/LICENSE.txt @@ -0,0 +1,11 @@ +This eBook, including all associated images, markup, improvements, +metadata, and any other content or labor, has been confirmed to be +in the PUBLIC DOMAIN IN THE UNITED STATES. + +Procedures for determining public domain status are described in +the "Copyright How-To" at https://www.gutenberg.org. + +No investigation has been made concerning possible copyrights in +jurisdictions other than the United States. Anyone seeking to utilize +this eBook outside of the United States should confirm copyright +status under the laws that apply to them. diff --git a/README.md b/README.md new file mode 100644 index 0000000..3e25eff --- /dev/null +++ b/README.md @@ -0,0 +1,2 @@ +Project Gutenberg (https://www.gutenberg.org) public repository for +eBook #66026 (https://www.gutenberg.org/ebooks/66026) diff --git a/old/66026-0.txt b/old/66026-0.txt deleted file mode 100644 index 89fe68a..0000000 --- a/old/66026-0.txt +++ /dev/null @@ -1,1449 +0,0 @@ -The Project Gutenberg eBook of A Speech on the Principles of Finance, by -Victoria C. Woodhull - -This eBook is for the use of anyone anywhere in the United States and -most other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms -of the Project Gutenberg License included with this eBook or online at -www.gutenberg.org. If you are not located in the United States, you -will have to check the laws of the country where you are located before -using this eBook. - -Title: A Speech on the Principles of Finance - -Author: Victoria C. Woodhull - -Release Date: August 9, 2021 [eBook #66026] - -Language: English - -Character set encoding: UTF-8 - -Produced by: Richard Tonsing and the Online Distributed Proofreading Team - at https://www.pgdp.net (This file was produced from images - generously made available by The Internet Archive) - -*** START OF THE PROJECT GUTENBERG EBOOK A SPEECH ON THE PRINCIPLES OF -FINANCE *** - - - - - A SPEECH - ON - THE PRINCIPLES OF FINANCE, - - - BY - - VICTORIA C. WOODHULL, - - DELIVERED AT - - COOPER INSTITUTE, NEW YORK CITY, - - THURSDAY, AUGUST 3, 1871. - - - NEW YORK: - WOODHULL, CLAFLIN & CO., No. 41 BROAD STREET. - 1871. - - - - - THE PRINCIPLES OF FINANCE. - - - - - MONEY! IS IT A PRINCIPLE OR A PROPERTY? - - -To the careful student of history, there is a very great deal more to be -considered than the mere political facts that stand as landmarks along -the path of progress which the nations have traversed since the plains -of Iran poured forth their hosts westward. These facts are the mere -externals that adorn the pages of historic lore, and embellish the -memories of the great men who have lived in and moved the world at -various times in various nations, or which clothe the lives of tyrants -and usurpers with their just reward. - -The superficial student of history cares only for the _results_ of the -evolution of nations—for the _fact_ that Sesostris was the greatest of -Egyptian kings; or that Semiramis rose by her military sagacity from the -rank of a mean official’s wife to be, first, the Queen of Ninas, and -afterward, to be the Assyrian Queen, who should march an army of three -millions men across the Indus to conquer the Indian King. Running down -the course of events, he traces the rise and fall of nations—after -Assyria then Egypt, next Persia, Greece, Rome and then the Dark Ages, -out of whose womb was evolved modern Europe; and, lastly, the birth, -development, struggle and recovery of the most remarkable nation which -has yet arisen in the world. - -Behind these facts, which are but results, lie the real motor powers of -history; and they are deeper, broader and more important than is that -which _they_ evolve. There is an external and an internal phase to -everything existent in the world. Up to _this_ generation the external -has apparently borne the more prominent part in determining what should -be next. But _now_ the analytic age has begun, wherein facts do not -suffice; wherein new systems, new theories, new philosophies and even -new religions are constructed, not by an examination of the _errors_ of -what has been, but by the _discovery_ and _application_ of the -principles, the powers, which underlie those errors. - -Heretofore there has been no inquiry made by the rulers of the people -into the general principles of government. It was sufficient that there -was a government maintained, the governors caring for little but the -power to compel the people to do their bidding. But it is beginning to -dawn upon the minds of those who have something more than a selfish -interest in humanity that there _is a science_ of government; aye, even -that there is a science of society: and such minds are endeavoring by -the deepest researches to discover the principles of these sciences. - -In our government, the principle of individual rights is theoretically -held, though in its application government still interferes with those -rights. The legitimate functions of a government, based upon the rights -of every individual over whom its power is exercised, are limited to the -_duties_ that will best _subserve_ and _protect_ the interests of -individuals. The proper understanding and practice of these functions is -the most important thing for a people to arrive at, but, having arrived -at this as the basis of all the relations of the people, the scientific -construction of the various departments of the complete superstructure -which is to cover all the public interests of all the people, as well as -to maintain their private interests intact, can be begun. - -After the general principles of government are properly formulated in -Constitutions and vitality given them by laws, a correct, a scientific -financial system stands _next_ in importance. If a country have a true -system of _government_, and do not have a true system of _finance_, it -can never attain to any _permanent_ prosperity. Literally speaking, -finance is a _part_ of government; since, in organizing it, means for -its support are among the first considerations. Hence it is plain, if -there are principles of government, so must there also be principles of -finance. - -It has never been pretended, so far as I know, even by the profoundest -political economists, who are sticklers for the gold standard, that any -financial systems the world has ever known were developed by the -scientific application of self-evident truths, which is the nature of -principles. - -The various systems of which use has been made were simply -_experimental_, devised for _politic_ reasons, as the _best_ methods to -meet the exigencies of the times in which they were required. Instance -the Greenback, the necessity for which was such as to shake the nation -to its very centre, and to fill the minds of all patriots with a dread -foreboding. - -If there have been no scientific money systems in vogue, and it now -comes out that the world has arrived at that degree of advancement -wherein _policy_ should give way to _principles_, even in finance, there -can be nothing gained by going back to review the errors, failures and -fallacies of the past. Nothing valuable can be gained by wading through -the almost innumerable statistics which have accumulated to a -sufficiently great extent to bewilder the most comprehensive intellects. -Having for ten years been deeply engaged in studying the principles of -government, I learned that no system of government could be perfect -unless its financial department was perfected; therefore I have -frequently endeavored to solve the financial problems which statistics -propose, but _invariably_ failed to learn anything that even promised to -look well as a basis for a new and improved system, to say nothing of -its promises in operation. - -The conclusion was inevitable, that there have been _no_ acknowledged or -even known, fundamental principles of finance operating in _any_ of the -many systems of the many nations, and that the so-called money of the -world _is not now, nor ever was_, money, in the scientific sense of that -term. - -All the statistics, failures and errors of the past, with which the -history of money abounds, being of no value, must be utterly ignored in -any inquiry which proposes to predicate a natural and scientific money, -as distinguished from arbitrary inventions, devised to meet the various -exigencies of nations in their growth, prime and decay. And _any_ person -who proposes to teach finance, or a new system, by arraying before you -the evidences of the past, contained in figures amounting to billions of -dollars, simply proposes to try _another experiment_, to _culminate_ in -another failure. - -Therefore I shall present no principals, per cents. and compounded -amounts, except, perhaps, as examples to illustrate the mathematical -impossibilities of the fallacious theories by which financiers have -attempted to dazzle the world, but who have only succeeded in -accumulating in the hands of a very select few that which by an exact -justice should belong to, and be distributed among, the people -generally. - -In order to intelligently discuss and arrive at legitimate conclusions -regarding the question of money, it should be _first_ determined just -what is to be involved in the discussion; for around this, as around all -other general things, there has been such a mass of rubbish and -extraneous matter aggregated that the main question is always in danger -of being lost sight of, unless this be first removed and the real issue -left clearly exposed. - -Most of the confusion which follows the attempts to solve the money -question arises out of the fact that the _same_ words in the mouths of -_different_ people do not mean the _same_ things, or that _different_ -words are used by _different_ people to mean the _same_ thing. If there -are two words in common use to represent similar objects, but which, -upon close analysis, _do not_ represent precisely the same thing, it is -better that _one_ of them be discarded. It is necessary, therefore, to -settle, prior to the beginning of this argument, _precisely_ what the -several terms _do_ mean which are prominently in use in connection with -the money question. It is, perhaps, near the truth to say that this -settlement is the argument. Very few persons have any well-defined -comprehension of what is the _real_ significance of the terms _gold_, -_money_, _currency_, _intrinsic value_ and _wealth_. If these words are -analyzed, what do they scientifically represent? - -Gold is a product of the earth only to be originally obtained by labor -and expense, and both practically and scientifically bears like -relations _to_ labor that all other things do which are produced _by_ -labor; and none other. But there has been an importance attached to gold -which has not been accorded to _any other_ product of labor. It has been -coined and called money, because it was coined, and by custom and common -acceptance made an _arbitrary_ standard of value, which _none_ of its -qualities warrant when subjected to analysis, as will be shortly shown. - -Gold bears the same relation to _real_ money that a religious theory -bears to _real_ religion, which theory, when comprehended by the -intellect of the people, loses its value as a substitute for real -religion; but which, until comprehension comes, it is better to have -than to have none at all. So also with gold. It has in _theory_ been -considered as _money_; but when a _true_ money comes to be comprehended, -it will lose its value as a substitute therefor, and sink to its proper -sphere among the other products of labor. - -It is altogether probable that gold was the very best substitute for -money during that part of the world’s evolution wherein people were -guided and controlled by policy and before principles were recognized as -that which should govern, let their action lead where it might. As the -world is now beginning to act from _principle_, for the sake of the -_truth_, so also must they now begin to formulate the principle of money -for the sake of the principle. - -Wealth is whatever is produced by labor which adds to the _comforts_, -the _happiness_ or the _life_ of man; and everything that does this, -either directly or indirectly, has intrinsic value—that is, has the -capacity to bless mankind. - -Wealth may, and should, be divided into two kinds, namely, _permanent_ -wealth and _transitory_ wealth. - -Permanent wealth consists of all those products of labor which are not -themselves _transferable_ into life, comfort or happiness, but which may -at all times be _exchanged_ for that which is thus transferable into -that which can be used to continue life. Gold, silver and precious -stones are among the best illustrations there are of permanent wealth. - -Transitory wealth consists of all those products of labor of which -direct use is made to maintain life or to add to its comforts and -happiness, and which, _by_ such process, are absorbed _into_ and become -_a part of_ the life of humanity. Transitory wealth, it will be seen, is -much the more important of the two, since, if people only possessed -permanent wealth, their life could not be continued an hour by it, -unless there were a possibility of exchanging it for the necessities of -life. - -It would seem that _all_ kinds of wealth are intrinsically valuable, -since its various kinds may be either _directly_ used to maintain life -or may be _exchanged_ for those which will maintain life. Wealth and -intrinsic value, then, mean the same thing. - -But what does the term _money_ mean: or has it no necessary significance -in the inquiry? - -There was a time when there was no such _thing_ or _word_ as money; but -at that time there was life to continue, for which wealth was necessary. -It seems that _wealth_ had existence before _money_ was thought of. -Wealth is substance, of which money is the principle or representative, -but which, in itself, has no intrinsic value. - -Money is an invention made to _represent_ wealth, or value, in order -that its various kinds may be exchanged with facility, or that they may -be exchanged without the absolute and direct and immediate receipt and -delivery of one product of labor for another product of labor. All the -products of labor may be exchanged _directly_, and without the use of -any representative or go-between, which for the time being stands -representative of the one or the other, but _not so well_ at all times -and under all circumstances. Money is _anything_ which stands -representative of any product of labor; that is, that can be made use of -to facilitate the exchange of any of the results of labor, which are -wealth. A representative of anything cannot be the thing itself, -therefore, if money is a representative of wealth it is not itself -wealth. Were A, B and C to at all times exchange their products between -themselves by _direct transfer_, they would have _no use_ for money; -they would exchange—deliver and receive—_actual_ values. But when A -desires from B some of his products, himself not having on hand any of -his products which B desires, he receives from B his value and gives him -his representative of value—his note—promising that at a future time he -will deliver B the _actual_ value which he desires. - -_Currency_ is only a _form_ of money, the same as _gold_ is only a form -of wealth; and in the same manner that gold is wealth, is currency -money. Money being the principle of representation in exchange, -everything of which use is made to facilitate exchange in the form of -representative value is money. Anything which can be transferred from -one party to another, anything that is negotiable which is not actual -value of itself, is money. This includes not only all currency, bank -notes, but also bills of exchange, the ledger and bonds. These are _all_ -representatives of wealth, _all_ demands for payment at a future time of -a certain specified sum, and consequently are money. It is quite evident -that, with the terms _wealth_ and _money_, we have all the necessary -distinctions which should enter into the abstract question of finance. -All other terms are but names for separate kinds or forms of these -terms, to be made use of when they respectively arise in making -exchanges. - -Now, every one must at once concede that that which best represents all -of the products of labor will also best _exchange_ them, and is -therefore the _best_ money. It is _equally clear_ that gold in _no way_ -represents _any_ labor but that which produces it. If gold were a true -representative of the results of _all_ other labor, except that which -produces it, would it not also be apparent that _such_ labor must be -_equal_ to _all_ other labor. Were gold a thousand times more valuable -than it is held to be, it would not _even then_ be able to represent all -other values. Therefore, gold is a _false_ standard of value, a _false_ -representative of wealth. - -Many people think and speak as if gold would be of no use to this -country if it were to come into disuse as _money_; that we should -entirely lose it as _wealth_; the very reverse is really true, since we -should have just the same quantity of gold that we _now_ have, to be -used for the _same_ purposes for which it is now required, to wit: to -export to other countries in exchange for imports. - -Suppose our imports to amount to a thousand millions dollars per annum, -and that we export cotton, corn and pork to that amount, what use would -we have for gold except to loan other countries, and could we not _loan_ -it as _gold_, taking their representatives of value for it equally as -well as though it were coined into money, having the seal and stamp of -the government? It is well known that we do not export gold to Europe as -so many American dollars, but as so much gold, by weight of a certain -degree of fineness, the stamp of the government attesting to that -degree. - -Again: Suppose that we had no cotton, corn or pork to give in exchange -for our imports, and that we produced a thousand millions dollars’ worth -of gold per annum, should we not be _equally_ well conditioned to trade -with Europe? - -It is seen that the real character and qualities of gold are the same as -are those of any other product of labor, which we can exchange direct, -for other products of labor which we want more than we do the gold. If -at any time the balance of trade is _against_ us, and we have _no_ -cotton, corn, pork, gold or _anything else_ to make it good, we must -then make it good by our representatives of value—our bonds—to be -converted when we shall have these products. This process has been -actually going on ever since we began to export bonds, either national, -state, county, city, railroad or bonds of other incorporated companies. - -Now, is it not _perfectly_ evident that we have not only produced by -labor what we have exported, which we have been pleased to denominate -merchandise, but also that we have produced all the gold that has been -exported; and in this connection is it not just as much an article of -merchandise as is either cotton or corn? Gold cannot at _one_ and the -_same_ time be both _money_ and _merchandise_. If _gold_ is money, so -also is _wheat_, _cotton_ and _corn_ money, since they perform the same -_services_ and possess the same _qualities_ as merchandise that gold -does. - -To be perfectly clear in our conclusions, money must be resolved into -its _uses_ and entirely divested of all its _fictitious_ and -_irrelevant_ relations. The fact that money is that thing which is made -use of to exchange real values must be the initial starting-point, of -which sight must never be lost until it is _definitely_ settled what -will _best_ perform this service. Anything which can be made use of for -_any other purpose whatever_, is _not_ the _best_ thing to be made use -of as money; because the demand for such a thing for such other purposes -destroys its positive value as money by causing fluctuations in its -exchanging power. - -It is a grave financial error for this country to endeavor to return to -gold as money. All the practices under the gold standard have been -positive and ample refutations of the arbitrary value accorded to gold. -A _dollar_ in gold can only exchange a _dollar_ in value in any other -substance; and the practice of issuing a greater amount of bank notes -than the bank has gold dollars to redeem them by, is a _legalized_ -system to _rob_ the people; since it is _evident_ that a bank having -three hundred thousand dollars in notes in circulation, and only one -hundred thousand dollars in gold in its vaults, can redeem but -_one-third_ of its circulation if it be all presented at once for -redemption. All the other securities of a bank, such as its discounts, -personal property and real estate, may become of no value, or may be -placed out of reach of the holders of its circulation, so that the only -_real_ security for its circulation is what it may have in gold in its -vaults. Beside, what right has a bank to receive legal interest on three -times the amount of its real security? Is not this a most _transparent_ -method of _swindling_ the people? Hence I assert that the use of gold as -money _always_ results disastrously to the producers of wealth, and -_always_ beneficially to those who are permitted to absorb all their -productions. - -Another unanswerable reason why gold cannot answer the requirements of -money is found in the _degrees of value_ which belong to different -products of labor, and which are _universally_ determined by the -sacrifice required to produce them. That is to say, all other things -being equal, the _relative_ value of products is determined by the -_time_ and _labor_ required to produce them. The increase in the value -of manufactured material is in _exact_ proportion to the _time_ required -and _wealth_ consumed in their manufacture. The value of gold is -determined in _precisely_ the same manner; and it is simply foolishness -to assert that the value of gold never changes, or that it has the same -purchasing power at all times. - -Suppose there should be immense fields of gold suddenly developed all -over the country, so that it would become as common and plentiful as -iron or coal, would it not decrease in value in comparison with other -products? That is to say, would an ounce of gold then possess as great a -proportionate value to other products as it now does? No one will -pretend it. Then gold is just as much the subject of fluctuation as is -any other product of labor, and for _just the same_ reasons—demand and -supply—which are the great arbitrators of values in all parts of the -world. - -Everybody knows that for a certain quantity of gold a certain quantity -of cotton may be obtained, and for a certain quantity of corn, a horse. -The fact that the horse is obtainable by the corn does not convert the -corn into money, neither does gold any more than the corn become money -because the cotton is obtained thereby. The gold for the time is equal -in value to the cotton, and so is the corn to the horse. Now, what is -required of money is this: Suppose the gold, cotton, corn and the horse -to be of equal value, a person possessing an amount of money -representing the value of either of the four can, at his discretion, -purchase whichever he may choose; since the money would equally -represent the gold, cotton, corn and the horse. Anything that may be -used for money that will not do the same thing for any variety of the -products of labor, values being equal, is not money in any sense of that -term. - -Incidentally in this connection, because it has an indirect bearing upon -the question under consideration, I wish to call attention to a mistake -that has been productive of more financial ills and consequent injustice -to a large proportion of the people, who are the wealth producers, than -any other single cause, and that is the fundamental error of making -land, wealth, which it is no more entitled to be, scientifically, than -gold is to be called money. Wealth is that which is produced. Land -exists. All improvements made upon land are wealth; _but the land -proper, never_. - -In this almost fatal mistake—almost fatal to the humanitarian interests -of the so-called common people—which is fundamental in its nature, is -found the _basis_ upon which rest the vast disparities in the -distributions of wealth, and which gives to certain favored individuals -the means of realizing vast fortunes without ever resorting to the -production of wealth, or of even accumulating it by trafficking in the -different kinds of wealth. - -There are numerous examples of this manner of becoming possessed of -riches. People acquire title to lands which, by favorable location, come -into great demand and consequently rise in value from _one dollar per -acre to hundreds of thousands of dollars per acre_. By what principle of -_equity_ and _right_ should _any_ person be entitled to such vast -increases in capital invested in land, when it is entirely attributable -to the movements of the community which produce it, and in no single -particular to the individual? To be so entitled is for the individual to -possess advantages over others to which no just communal government -should for a moment consent—is to have the right to appropriate to self -the results of labor which belong in common to all the people. Such -results are against _all_ principles of equity and justice, and is one -of the _greatest_, if not _the_ greatest error of the present, regarding -the equities of property, and is the foundation and prophecy of all -other kinds of monopoly. - -It occurs to me that an objection may be raised to my argument classing -gold as wealth, and defining wealth to be that which can be made use of -to minister to life, comfort and happiness; or perhaps to the -distinction of permanent and transitory wealth. Gold, as permanent -wealth, can only minister to man through its exchange for other -valuables of which direct use can be made. It may be said that in _that_ -sense gold can legitimately be money. - -But if there are objectors to this argument, I beg to call their -attention to the conclusive fact that gold _can never_ be representative -of all other kinds of wealth. It is just as impossible that it should -be, as it is that a bridge _one_ hundred feet in length should span a -river _five_ hundred feet in width. It must further be remembered that -the uses for which money is required demand an invention which can be -made use of for _no other_ purpose whatever, and that money is the name -of an invention _demanded_ and made for the purpose of _facilitating_ -exchanges—for making them easy, _convenient_ and _adaptable_ to _all_ -conditions of _all_ persons. - -Every attempt ever made to compel gold to answer the demands of money -has been a disastrous failure. So long as a country enjoys continuous -prosperity under a gold standard of value, it is all well enough. The -people make use of an expanded volume of currency in the full faith that -prosperity will continue and everything be smooth and right. - -But anon a _change_ comes, the nation is precipitated into conditions -which require _more_ than its accumulations of gold to meet. _That_ -being exhausted, it is _inevitable_ that representation be resorted to. -The wealth in the form of gold not being adequate, and other wealth not -having been used or accepted as money, paper representatives of it are -the _only_ resort. So it appears that when an _emergency_ arises the -people are _involuntarily_ pressed to the use of the principle of -representation, which is the _only_ scientific thing that can be called -money. So that while a paper representative of wealth is, _with -everything else_, a product of labor, it is more than that; it is the -embodiment and application of a principle, which other products of labor -are not; and all principles are fundamental; are the basis of all -permanent and all purely scientific things and truths, while wealth is -the realized product of the outworking of principles, directed and -appropriated by man for his use and convenience. - -The direct inquiry can now be made as to _what_ will _best perform_ what -the people require of money; and money is that which can be used to -_represent_ real values without an absolute _transfer_ of such values. -The basis of all value of this country is our _present_ accumulated -_real_ wealth and our _capacity_ to increase it, and this accumulation -and the prospective increase may be _wholly_ represented by money and -the nation never become bankrupt. - -A person may possess wealth to the amount of ten thousand dollars upon -which he may issue his representatives of value or promises to pay that -value. These representatives of value would circulate among those who -believe in the capacity and intention of the utterer to give _up_ to -them, _when_ demanded, that which they represent. Everybody by his -individual right has the authority to issue such representatives of -value, and no government has any right to prohibit their circulation; -because the people, as individuals, have the right to take or refuse -them. The issue of bank notes is upon the same principle, and so long as -the government does not in substance _indorse_ these issues, the people -have the _perfect_ right to deal in them—to receive and deliver them. - -But there is an insuperable objection—one which cannot be overcome by -any governmental requirements—to these representatives being called the -real money of the people, since circumstances over which _neither_ their -utterers nor receivers can have _any_ control may render them -valueless—may make it impossible for those who uttered them to redeem -them—and their holders find themselves with _bits of paper_ representing -_nothing_; but for which they parted with real value. - -So far as this condition is confined to individuals who had no other -reason for receiving them, and no other assurance of their real value -than the supposed _capacity_ and _intention_ of the uttering person or -persons, it is _strictly_ a legitimate condition; and one with which the -sufferers can find _no_ fault; since of their own free will and choice -they received the utterers assurances that his representatives were of -real value. An individual upon his personal judgment, without undue -persuasion, accepts another’s representative; if it prove _bad_ he has -_himself only_ to blame for the loss, as coming from an error of -judgment; and _no power_ or _authority_ has any right to step in to -compel the making of amends for this error. _This_ is the simple -doctrine of the _rights_ of _individuals_, with which _no third party_ -has any right to interfere after the occurrence of the fact. But when -banks are organized under certain formula of law, framed by the people -or their representatives through government, the people receive and pay -out their issues—representatives of their value—_not_ because they have -special confidence in the capacity and intention of the individuals who -compose the management, _but_ because they _suppose_ the management has -conformed to _those certain forms of law_ which are _intended_ to render -them safe. In this way the government, at least indirectly, gives -_credit_ to the bank, and _currency_ to its issues, and the people -accept them _simply_ because the government has done so. - -But if these banks are mismanaged either ignorantly or intentionally, or -managed by designing men, as often they are, who make use of the -governmental sanction to swindle the people, as many times they have, -_where_ can the people look for redress; _where should_ they look for -redress? The government is justly responsible to the people for all such -issues, since it did not require real security from the banks, and -government should make reparation therefor. - -This is precisely our objection to _any_ and _all_ forms of bank issues. -There can be _no_ arrangement made so _perfect_ in security to her -people as to _guarantee_ them _absolutely_ against all hazard, that will -permit the banks to make the profits which they seem to think they are -entitled to make from the people. In _absolute_ security there can be -_no_ profit. Bank profits demand the circulation of more notes than they -have _real_ value to represent. Profits come only from speculating -either upon the _confidence_ or the _money_ of the people, and -government has _no_ right to _protect_ such _illegitimate_ and _unjust_ -practices. - -Our present system of banking is a _swindle_ upon the people, which it -is simply surprising that they endure as they have and do. For the banks -to be permitted to filch from the people twenty-four million dollars per -annum is an _outrageous villainy_ which, if comprehended by the people -in its _true light_, could not exist _another year_. ’Tis true these -banks complied with the law passed in a time of dire necessity, and that -through them the government acquired the means to conduct the war. But -did not the people themselves do even _more_ than furnish money, which -was promised to be returned; did they not freely give their _lives_, -which can never be returned, and which the government never thought of -promising to either return or guarantee, and that, too, for the pitiful -sum of thirteen dollars per month? What comparison is there between the -sacrifices made by the two classes of people, the capitalists who have -absorbed the wealth of the country and the laborers who still continue -to give life, property and vitality _to_ the country. There is -absolutely _no_ chance for a comparison; the distinction is _too_ great. - -It seems to me that if either class is entitled to superior -consideration—to receive millions of the people’s money—it is the common -people who so freely offered their _lives_ to save their country, -instead of those who simply _loaned_ their money at enormous rates of -interest, with the certain knowledge that it would be repaid. The -present claims are too preposterous, and deceptive, and too unjust to be -long continued. - -All bank notes in their ultimate effects are frauds upon the people, and -their continuation as a circulating medium is only possible because that -part of the people who suffer from them have not yet risen into a proper -understanding of the question. The time is, however, near at hand when -those who have reveled in the result, of the wear and tear of the -muscle, and the sweat of the brow, of the common laborer, will be -compelled to produce honestly and equitably everything they would enjoy. - -The substitute for all kinds of bank notes as the money for the people -should be a _purely people’s money_—a _national currency_ whose basis of -value would be the accumulated wealth of the country, and also its -capacity for regularly increasing such wealth. Is there any reliance to -be placed in a currency issued by an individual or a number of -individuals through an incorporated bank, based upon his or their -wealth, which is at all times liable to pass into the hands of other -individuals? Yes, there is a presumptive reliance—an indefinite -security—but the security is not perfect. In comparison with this -security place that of a currency issued by the government, based upon -the _entire_ wealth of the _whole_ country, which, no matter how much it -might be changed about among the different persons comprising the nation -by various contingencies, could never depart from the country; which -fact would render it safe under any and all contingencies that could -possibly arise, excepting alone the entire destruction of the country -and its government by a foreign power; which contingency is not -sufficiently imminent to cause any present alarm. - -A national currency _thus_ based would have not only _all the gold_ of -the country as a basis, but also _all other kinds of wealth_. Is it not -perfectly plain that such a money would be just so much better than -common bank notes, with a one-third gold basis, as the total amount of -the wealth of the country is greater than such amount of gold? It would -be in the most complete sense the people’s money. It would be a system -of mutual banking wherein every individual of the country would have an -interest, instead of there being a vast number of mutual banking -institutions, such as has been proposed by a person of profound -financial ideas. - -As before stated, my objection to all systems of individual banking is -that the _basis_ of their issues is at all times _liable_ to pass from -the possession of such individuals; whereas, in a national currency—the -_money_ of the people, _themselves_ in the aggregate the basis and -security—there could be _no such_ liability; since, if _parts_ of the -security pass from original to secondary hands, it is _still_ the basis -of the currency, and could never be transferred beyond the jurisdiction -of security by the operations of designing or incapable persons. By no -possibility could there ever a loss occur to the holder of such a -currency, except it be destroyed in his hands. - -Undoubtedly the _greenback_ was the _nearest_ approach to a _real_ money -that any people of the earth ever made. We have only to observe how -_admirably_ it has answered nearly all the purposes for which people -require money, to be convinced that it has the very best—the most -secure—basis that it is possible for a money to have. It stands -representative of the capacity and willingness of the government—the -representative of all the people—to pay. - -But it is one of the most _difficult_ of things for the people to -divorce their minds from the idea that gold is the only possible, real -money. Yet the _facts_ attaching to the greenback stand out in bold and -indisputable relief, perfectly and entirely dispelling all basis for the -idea. Because the greenback was the _first_ step toward a real money -that the country ever took, which left gold entirely out of the -question, the impression still remains with the people that a _return_ -must be made to a gold basis; never stopping to observe how vastly -superior the wealth basis is to what the gold basis would be. - -Bank note currency, or a currency issued by an individual or by a class -of individuals, always carries along with itself the _idea_ and _need_ -of redeemability. If, however, there is any thought among the people -that the utterers cannot meet their _promises_ of redemption, at that -_very_ time when, of _all_ others, _confidence_ is necessary to avoid -_ruin_, they rush to prove the suspected incapacity; and generally they -do prove it. - -The idea of, and necessity for, redeemability, is that which _most_ -requires to be _divorced_ from money. Money—real money—should never -require to be redeemed. It should always be just as valuable to retain -possession of as anything could be into which it may be converted. -Anything that requires to be redeemed in order to make it _permanently_ -valuable or a representative of value is utterly unworthy the name of -money, because it does not truly represent _real_ wealth. It is that -currency of which there is doubt about the real wealth it pretends to -represent which requires to be made redeemable before it will circulate; -and _this_ fact proves _most_ conclusively that it is _not_ money in any -true sense of that term: that is to say, it is not that which requires -to be converted into substance. - -It is readily perceivable that a national currency having continually -all the nation’s wealth, accumulated and prospective, as its basis, -never needs to be redeemed. This _single_ consideration is of quite -sufficient importance to _alone_ warrant its immediate adoption and use -upon the standard of wealth. The gold standard is the flimsiest -deception of which it is possible to imagine. The people’s talk of -approaching a gold standard as the ultimate of appreciation is the -_merest jeu d’esprit_. Gold is now selling at say 113. Suppose that -during the next year its price should gradually decline to par, or, in -the phraseology of the goldites, their country’s general credit should -appreciate to par, would the process of appreciation _necessarily_ stop -just at _that_ point? Why should it not just as reasonably _continue_ to -appreciate, so that in another year gold would be below the par of the -country’s credit? This simple analysis proves beyond _all_ cavil the -arbitrariness of the gold standard of value. - -The credit of a country increases or diminishes without _any_ regard -whatever to its gold producing or paying capacity. It is governed by its -capacity for the _general_ production of _all_ kinds of wealth over and -above its average consumption. It is just the same with a country as it -is with an individual; the individual, to become wealthy and to have a -good credit, must not necessarily ever have _any_ gold; but he must be -able to produce or acquire more than he consumes by his general -expenses. A country must proceed by the same process to become wealthy, -and it is simply an _absurdity_ for people to talk of the _prosperity_ -of the country when _high prices_ for _everything_ are induced and -fostered by a system which restricts _general_ production in order that -_special_ production may flourish. Individuals cannot get rich by -trading among themselves, _no matter if they increase the price_ of -their _wares ten per cent. every year_. Neither can all the individuals -of a country do the same thing. What is required by both is increase in -the quantity of what they trade in. - -It is not the price of what a people _have_ that constitutes their true -wealth, but it is the _quantity_ of their commodities. A barrel of flour -is possessed of no more real value if it cost twenty dollars instead of -five. It will not maintain life a day longer, let the price even be a -thousand dollars. Thus we arrive at the real basis of values—the real -wealth—and I have introduced this, precisely for the purpose of showing -the high-priced protectionists that they know nothing about _true_ -values or _true_ economy, as well as to also show that there is _no_ -real wealth except that which conduces to higher ends than its simple -acquisition. Wealth as an end is despotism. Wealth as a means is -humanitarianism. - -But to return from this departure to the main subject. For the idea of -redeemability for money there should be substituted that of -convertibility. A real money should at _all times_ be capable of being -converted into _that_ of which it stands _representative_. And here we -arrive at the last analysis of a real money. It will be readily seen how -completely a national currency meets this requirement. It would be -representative of the productive capacity of the country, and could -always be converted into whatever portion or kind of its products might -be required; or into the products of other countries which may be -acquired by the direct exchange of our own products. - -What more than this can be demanded of money; or what better thing -invented as money; or what more capable of inspiring and maintaining an -even and legitimate confidence? - -National currency being the very best possible money, because it is not -only the most convenient but also the most secure, there remains -_nothing_ to be done but to _continue_ to so _acquaint the people_, -until they become _convinced_ of the rapaciousness of those systems by -which the _large_ majority are compelled to labor _all their lives_ for -the _very select few_. There is no difficulty in arriving at all the -initial points necessary to determine the amount required, how it should -be distributed and kept in circulation, or how its circulation should be -regulated. These are all practicalities of finance. - -But there is _one thing_ which has never yet received consideration, -which is _absolutely necessary_ to make money meet _all_ the -requirements of money, and at the same time to maintain a _fixed_ and -_absolute_ value at all times and under all circumstances, which money -never has had. From its lacking, have come all the various financial -convulsions. And _this is_, an absolute measure of value. - -Can money be measured so that the same fixedness shall attach to it that -attaches to everything else with which we have to do? Money itself has -always been considered a measure of value; and it is this false stoppage -and foundationless position that has made possible all financial -discords, irregularities and inconsistencies. Does it appear to be a -strange proposition that money should be measured? Why should not a -dollar be just as absolute as a dollar as a pound is as a pound; or as a -foot is as a foot; or as a gallon is as a gallon? A cord of wood -contains one hundred and twenty-eight solid feet, or eight cord feet. It -must _always_ be _eight_ feet in length, _four_ feet in height and -_four_ feet in width, or some other multiples of one hundred and -twenty-eight. A cord can _never_ be any more, _never_ any less than just -that measurement. And the same rule holds of everything else with which -we have to do; with quantity, time, space and motion. All these have -fixed and unvarying modes of measurement. But money, the lever by which -all these are moved, has been left to fluctuate as it would—to be moved -by every different influence, so that in _many instances_ what should -have brought contentment, peace and continuous prosperity, has -bequeathed the direct reverse. - -It does not concern us that there are _more yards of cloth_ at one time -than another, provided that _yard-sticks_ are all of the same length. -But what _would_ concern us would be this: That if with increase of the -_quantity_ of cloth the _length_ of the yard-sticks should increase -proportionately; or with the _decrease_ of the quantity of flour the -_pound_ should decrease in like proportion therewith. Now this is just -what has always been true of money; its _real_ value _increases_ and -_decreases_, just in proportion as those things which it professes to -measure have increased or decreased in quantity. Instead of these things -being exchanged or converted into something measured by as _fixed_ a -_standard_ as they are, the attempt is made to measure them by -_something_ which _constantly increases_ and _decreases_ in -representative capacity. In other words, a dollar is not at all times -one and the same thing. Sometimes it is but seventy–five cents, and -sometimes a dollar and a half. That to say that seventy–five cents at -one time possess the same representative power that a dollar and a half -does at another time, which is in substance to say that money has no -measure. - -Now what is desirable and indispensable is to give money a _fixed -measurement_, which shall be _just_ as absolute in its measure of the -value of money as the pound is in its measure of weight, or as the -yard-stick is in its measure of distance. There never is any more cloth, -though there be a thousand more yard-sticks. Nor is a yard-stick ever -any longer or shorter, if the quantity to be measured is increased or -decreased a thousand-fold. Now just to such a fixedness must money be -reduced before it will subserve its best purposes and uses, and the only -way this can be done is by that method which will also remove the _only -possible_ objection there can be brought against such a national -currency as is proposed. This objection is that by over-issues of -currency its value would or might be depreciated. - -Let it be supposed that the country’s extremest need to meet the demands -of the greatest amount of trade is a _billion dollars_ currency. At -certain times there are greater and less demands for money, which, under -our present practices, make a dollar, to-day, worth _four per cent. per -annum_ interest, and to-morrow increase it to _ten per cent._ It must be -remembered that we are now speaking of an _irredeemable currency_, the -_representative_ of the _wealth_ of the nation: that the _government_ -representing the nation has _uttered_ it, in behalf of _the people_, -upon the _soundest_ and, in reality, the _only_ sure basis of value -_any_ money _can have_—the productive power and capacity of the nation. - -An over-issue is the only thing to be guarded against. The government -must be prohibited by some _absolute law_ from resorting to the process -so well known in railroad management as the “_watering process_.” And -this is to be accomplished in the following manner: This currency—this -money—must be made convertible into a national bond, bearing such a rate -of interest while in the hands of the people as shall be determined upon -as “the true measure of value”—say three or four per cent.—which -experience would necessarily determine as the true point of balance; and -the bond also convertible into currency at the option of the holder. - -In other words, the people should demand that the Government issue one -thousand million dollars in bonds, bearing three per cent. interest, -payable in currency, and that it issue one thousand million dollars of -circulating medium or money to be loaned to whomsoever deposits the -bonds as collateral; all loans to be made at three per cent. per annum; -to be for six months, with two renewals of three months each, one-half -payable on each renewal. The principle underlying the time being that -all credits should be settled with each year’s products. - -The operation of such a system can be very easily traced. Whenever there -should be so much currency in circulation that it would be worth _less_ -than four per cent., the surplus would at once be invested in the four -per cent. interest-bearing national bond; and when business should -revive and the demand for money to transact it should make money worth -_more_ than four per cent., then bonds would be converted into currency -again until the equilibrium should be re-established. And whenever the -demand should be such that all the money would be converted, and money -still be worth more than four per cent., then the government should -issue enough to produce the equilibrium. - -Thus it is seen that the four per cent. or the three per cent. -interest-bearing national bond becomes the _fixed measure_ of value for -money. It would always be worth _just that amount_—_never_ any more; -_never_ any less. The gallon measure always gives just the same quantity -of molasses. The yard-stick always gives just the same quantity of -cloth. The pound weight always gives just the same quantity of sugar. -So, too, would this measure of money always give just the same amount of -real wealth, or its representative, every day, week, month or year, -whether applied to wealth in business, to bonds, or to money at -interest. An oscillation would be perpetually maintained; first, -conversion of currency into bonds; next, conversion of bonds into -currency; and whenever the supply of currency should be deficient, _then -the issue of more by the government to meet it_. Thus there would be a -_people’s_ money regulated to _financial_ equilibrium, which is the -_ultima thule_ of convenience for exchanging the products of industry. - -It may be remarked, parenthetically, here, that even three per cent. per -annum interest is altogether too greatly in favor of capital. A careful -calculation of interests and general increase of the nation’s wealth -discovers that less than a two per cent. interest is required to make -the capitalist and the laborer stand upon an equality. Had I the time I -would be glad to present you some figures to show to what condition we -are tending. I will simply remark, however, if capital continue to -receive the present rates of interest for the next thirty-five years, at -the end of that time it will have absorbed all the wealth of the -country. That is to say, that interest compounded at the rate of 6 per -cent. upon the present Banking Capital will amount to a sum larger than -the present aggregate of wealth together with the same rate of increase -which has governed it during the past, added thereto. Is not this a -sufficiently alarming fact to cause people to stop and consider the -despotism into which they are rapidly merging? - -Everybody who knows anything about the relations of money to the people -must prefer such a money as we have indicated to any other kind. It is -really the greenback system extended to _all uses_ for which money is -required, and to which is given a _fixed measure_ of value. All people -at present interested in national banks and high interest-paying bonds -are constitutionally opposed to such a change in our money system. This, -however, should not deter its introduction and use. The people’s welfare -is what should be consulted, and made _the test_ of all propositions -that are to become theirs to practice. National banks and all banks of -issue, with their drain upon the people to make their immense profits, -must be done away, and banks simply as depositories for the -accommodation of the people, alone exist. - -The national bank and other currency would be gradually called in at the -rate of, say ten per cent. a month. - -I may add in justification of this plan, that if the Government can loan -three hundred millions to the banks for nothing, it can loan to the -people for three per cent.; if at the same time it can pay three per -cent. on its bonds and in currency, instead of six per cent. and in -gold, it secures a new-found advantage. - -But one of the _chief_ benefits which would come to the people from the -proposed currency would be the _interest_ which would accrue to the -government—all the people—for the use of this money. In other words, -_all_ the interest now paid to _banks of issue_ for _loans_, for the -_same_ convenience should be paid to the government. A _part_ of the -people, for the _use_ of money belonging to _all_ the people, themselves -inclusive, would pay _interest_ to the government therefor. And what -more legitimate method of governmental support than this, if by it all -other means of taxation could be annulled? The interest now paid by the -people of the country to the Banks and Capitalists would, twice over, -pay all costs of maintaining the government. A three per cent. interest -paid to the government on all loans the people required would not only -relieve the people who produce wealth of one-half the interest they now -pay, but also of all taxes of all kinds. Is not this a matter to be -looked into in the most serious manner? - -With such a currency system _once_ inaugurated, the country would begin -a gradual process of general prosperity. Wealth, instead of accumulating -in a _few_ hands, would continually tend to an _equal_ distribution -among _all_ producing people. A large part of the speculative mania -would be rendered futile, and those now devoting all their time to -_hatching schemes_ by which to defraud the producing classes of their -wealth would be _compelled_ to turn producers themselves. It is -calculated that one-tenth of the male population of this country is -engaged in speculative pursuits. In other words, they ‘live and grow -fat’ from those who are engaged in production. And that is our boasted -equity, our equality. - -It should be the object of all reform to make a _nearer_ approach to a -system of _complete_ justice and a _perfect_ equity. Any reform that -does not base itself upon _such_ a proposition and whose outlook is not -in this direction _is no reform_, and does not deserve the serious -attention of any. There is scarcely an idea prevalent in the community -of what true justice and equity consist. But it may be stated as -follows: _No person has any just claim to the ownership of anything -which he did not produce or which he did not acquire by an equitable -exchange of something which he did produce._ Tested by _this_ rule, the -accumulated wealth of the world is in unjust hands; it is held by those -who have a _no better title_ thereto than if they had actually stolen -it. It has been fraudulently acquired, and that is the word which best -expresses the manner of its obtainment. And one of the most effective -methods of remedying this growing evil is to attain to a true money -system—one founded in the requirements to be met and based upon that -which it is to represent—that which it is to be used to exchange. -Anything that _departs_ from these standards is _not_ scientific money. -That which _has_ these for its standards _is_ a scientific money. - -Aside from all that has been said, there is a general principle rising -into the comprehension of humanity which _must of necessity_ dethrone -that which has so long been worshiped as the money god. The day for -arbitrary rule and standards is drawing to a close, whether they be -standards of materiality or spirituality; of morals or intellect; of -despotism or democracy. Gold _is_ an arbitrary money standard, and with -all others of like character _must_ fall. The tendency of the world is -_against it_, and its doom is _already_ sealed. It has been _weighed_ in -the balance and found wanting. - -The interest of the common people, who should always hear every new -Christ, demands a reform in our monetary and financial systems. We are -aware, however, that there is a great deal of prejudice in their minds -in favor of “hard money,” and they must be awakened to the fact that -hard money is a myth—a play upon words—a deception practiced upon them -by those who have played the part of “the appropriators of wealth” lo! -these many years, and who would continue to filch _year_ after _year_ -all that the “toiling millions” can compel nature to yield up to them. -In this process the laboring classes are the mere avenues through which -the earth pours its wealth into the coffers of the capitalists. - -Some object that the very numerous and intricate methods to which resort -would be required would prove _unmanageable_, and that _corruption_ -would _inevitably_ creep in and undermine its usefulness. Let such -consider our almost perfect postal system, and how _well balanced_ are -all its movements and checks, and find therein their answer. Would there -be more intricacy in the proposed system than there now is in the -present? Do not all national banks, though nominally distinct, _really_ -have a common fountain head in government? Does not all their currency -come from government? Suppose all these banks, instead of being -independent institutions, were an organized system, having a common -head, as the banks of New York City virtually have in the Clearing -House, would not that be a condition so nearly related to the system -which would be required as to show its entire practicability? - -Indeed, there is scarcely need that there should be a new department -inaugurated to bring such a currency home to the people. Perhaps there -never was a system operated in which there was _less_ proportionate loss -through its executive officers than in our postal system. And this is -because the _responsibility_ comes _home_ to the people. The postmaster -is _always_ a resident of the _place_ in which he officiates, and, -either with or without a civil service law, should be the _appointee_ of -the citizens whom he is to serve; and, of course, would be a person -possessing their special confidence. To such persons might the _care_ of -the public money well be intrusted; and in _all places_ except cities a -_single_ person could perform both the services of postmaster and of -United States financial agent. - -Means can be easily devised to make all post offices offices for -loaning, as they now sell post office stamps and money orders. - -In all that I have said my only purpose has been to endeavor to arrive -at a proper understanding of the most important feature of governmental -justice and uniform equity among all the people. All past systems have -failed to secure this. The world has constantly witnessed the proceeds -of the labors of the millions _aggregated_ in the hands of the few. This -advantage which one class has possessed over another cannot long exist -under the rapid spread of intelligence, which marks the present -generation; and it behooves _this_ people to give _due_ consideration to -_any_ scheme which proposes to lessen this advantage. And _most -especially_ does it become the duty of the people, if there be such a -thing as _principles_ of _finance_, to _find_ them out and cause them to -be practically applied. - -In fine, and to resume, the idea of money must first be separated from -that of the intrinsic value of gold, or any other commodity, and -confined to the mere capacity of representing all commodities, and so of -facilitating the exchanges of wealth. This, it has been abundantly -demonstrated, can be as well, and for various reasons, better done by -strips of paper, properly stamped and signed, than by gold or any other -metal. - -In the next place, these strips of paper, signed by the Government, with -the credit and wealth of the whole country, are better than individual -promises; though the issuance of individual promises should not and need -not be prohibited, as we do not now prohibit anybody from making or -receiving private notes, drafts and checks. - -Again, the Government Money need not be redeemable, but only convertible -into new strips of paper when the old ones are worn out, and into -commodities when they are used in trade, and into other Government -Securities bearing interest, as I have pointed out. - -Still again, money has also been held to be a correct measure of values. -This it ought to be, indeed, but has never been so, because it has never -been measured itself. Of what use would yard-sticks be, used for -measuring cloth, but which had never themselves been measured by -anything? The system which I have stated for measuring money itself is -believed to be perfect. It is not the individual dollar, relatively to -the half dollar or the hundred dollars, that has failed to be measured -or fixed; but the rate of increase relatively to other values, of _all -the Government currency afloat_. By the convertibility of any excess of -issue sinking its value below a certain standard into interest-paying -bonds, any over-issue is immediately absorbed, while a deficiency of -issue will be revealed by the fact that absolutely no bonds will be -sold. In this manner the whole operation will be self-adjusting from day -to day; the value of the aggregate of Government money will be -accurately measured and kept uniform; and any interest or temptation -which the Government might have to an over-issue would be immediately -neutralized by the absorption of such surplus into bonds, upon which the -Government itself would be paying interest; or, in other words, assuming -an unnecessary and useless burden, in the face of the people and of its -own economies. Can anything more perfect be devised? If so, let us have -it by all means; if not, let this device be adopted. A self-adjusting, -self-regulating admeasurement of the value of money would make it a true -measure of other values, and is a suggestion which, if it can be -secured, is of unequaled importance. - -Another somewhat similar idea was glanced at in passing—that of a -definite method of determining scientifically the equitable rate of -interest. This I cannot stop now to explain. It will, however, only be -when we come quite down to that basis, that the full value of this -financial system will be experienced. - -Finally, in its basis, this system of Government money is money issued -at the mere cost of printing and circulating; but by adjoining with it -the idea of a complete, simple and exceedingly economical means of -raising the revenue of the country, the three or four per cent. is paid -to the treasury; that is to say, by the people individually to the same -people in their collective capacity. Under this system all the various -revenue officials and tax assessors and gatherers would be dispensed -with, and a vast system of economy inaugurated, which, in a few years, -would transpose us from a borrowing to a loaning nation, making us the -financial example for all the world. This it also seems to me is another -invaluable feature of the system, all of which I, however, respectfully -submit to the decision of the people. - -The interests of humanity which are involved in this question are -greater than are the interests of those who have assumed to _rule_ the -world, and who are endeavoring to _fasten_ upon the people _despotism_, -to escape from which would require the shedding of whole rivers of human -blood and the destruction of the best evidences of our civilization, for -which we have a perfect right to feel the greatest admiration. - -A _timely_ understanding of the money question would guarantee precisely -the reverse of _all_ this, and cause humanity to take still _greater_ -and more rapid _strides_ toward that perfect enlightenment which can -alone thoroughly recognize the common brotherhood of the human race, -toward which end all reform should be directed. - ------------------------------------------------------------------------- - - - - - TRANSCRIBER’S NOTES - - - 1. Silently corrected obvious typographical errors and variations in - spelling. - 2. Retained archaic, non-standard, and uncertain spellings as printed. - 3. Enclosed italics font in _underscores_. - -*** END OF THE PROJECT GUTENBERG EBOOK A SPEECH ON THE PRINCIPLES OF -FINANCE *** - -Updated editions will replace the previous one--the old editions will -be renamed. - -Creating the works from print editions not protected by U.S. copyright -law means that no one owns a United States copyright in these works, -so the Foundation (and you!) can copy and distribute it in the -United States without permission and without paying copyright -royalties. Special rules, set forth in the General Terms of Use part -of this license, apply to copying and distributing Project -Gutenberg-tm electronic works to protect the PROJECT GUTENBERG-tm -concept and trademark. 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Woodhull</div> - -<div style='display:block; margin:1em 0'> -This eBook is for the use of anyone anywhere in the United States and -most other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms -of the Project Gutenberg License included with this eBook or online -at <a href="https://www.gutenberg.org">www.gutenberg.org</a>. If you -are not located in the United States, you will have to check the laws of the -country where you are located before using this eBook. -</div> - -<p style='display:block; margin-top:1em; margin-bottom:1em; margin-left:2em; text-indent:-2em'>Title: A Speech on the Principles of Finance</p> - -<div style='display:block; margin-top:1em; margin-bottom:1em; margin-left:2em; text-indent:-2em'>Author: Victoria C. Woodhull</div> - -<div style='display:block; margin:1em 0'>Release Date: August 9, 2021 [eBook #66026]</div> - -<div style='display:block; margin:1em 0'>Language: English</div> - -<div style='display:block; margin:1em 0'>Character set encoding: UTF-8</div> - -<div style='display:block; margin-left:2em; text-indent:-2em'>Produced by: Richard Tonsing and the Online Distributed Proofreading Team at https://www.pgdp.net (This file was produced from images generously made available by The Internet Archive)</div> - -<div style='margin-top:2em; margin-bottom:4em'>*** START OF THE PROJECT GUTENBERG EBOOK A SPEECH ON THE PRINCIPLES OF FINANCE ***</div> - -<div class='tnotes covernote'> - -<p class='c000'><strong>Transcriber’s Note:</strong></p> - -<p class='c000'>The cover image was created by the transcriber and is placed in the public domain.</p> - -</div> - -<div class='titlepage'> - -<div> - <h1 class='c001'><span class='xlarge'>A SPEECH</span><br /> <span class='small'>ON</span><br /> THE PRINCIPLES OF FINANCE,</h1> -</div> - -<div class='nf-center-c0'> -<div class='nf-center c002'> - <div><span class='small'>BY</span></div> - <div class='c003'><span class='large'>VICTORIA C. WOODHULL,</span></div> - <div class='c003'><span class='small'>DELIVERED AT</span></div> - <div class='c003'><span class='large'>COOPER INSTITUTE, NEW YORK CITY,</span></div> - <div class='c003'>THURSDAY, AUGUST 3, 1871.</div> - <div class='c002'>NEW YORK:</div> - <div>WOODHULL, CLAFLIN & CO., No. 41 BROAD STREET.</div> - <div>1871.</div> - </div> -</div> - -</div> - -<div class='chapter ph1'> - -<div class='nf-center-c0'> -<div class='nf-center c004'> - <div>THE PRINCIPLES OF FINANCE.</div> - </div> -</div> - -</div> -<div> - <span class='pageno' id='Page_3'>3</span> - <h2 class='c005'>MONEY! IS IT A PRINCIPLE OR A PROPERTY?</h2> -</div> - -<p class='c006'>To the careful student of history, there is a very great deal more -to be considered than the mere political facts that stand as landmarks -along the path of progress which the nations have traversed -since the plains of Iran poured forth their hosts westward. These facts -are the mere externals that adorn the pages of historic lore, and -embellish the memories of the great men who have lived in and moved -the world at various times in various nations, or which clothe the -lives of tyrants and usurpers with their just reward.</p> - -<p class='c007'>The superficial student of history cares only for the <i>results</i> of the -evolution of nations—for the <i>fact</i> that Sesostris was the greatest of -Egyptian kings; or that Semiramis rose by her military sagacity from -the rank of a mean official’s wife to be, first, the Queen of Ninas, -and afterward, to be the Assyrian Queen, who should march an army of -three millions men across the Indus to conquer the Indian King. -Running down the course of events, he traces the rise and fall of -nations—after Assyria then Egypt, next Persia, Greece, Rome and then -the Dark Ages, out of whose womb was evolved modern Europe; -and, lastly, the birth, development, struggle and recovery of the most -remarkable nation which has yet arisen in the world.</p> - -<p class='c007'>Behind these facts, which are but results, lie the real motor powers -<span class='pageno' id='Page_4'>4</span>of history; and they are deeper, broader and more important than is that -which <i>they</i> evolve. There is an external and an internal phase to -everything existent in the world. Up to <i>this</i> generation the external -has apparently borne the more prominent part in determining what -should be next. But <i>now</i> the analytic age has begun, wherein facts do -not suffice; wherein new systems, new theories, new philosophies and -even new religions are constructed, not by an examination of the <i>errors</i> -of what has been, but by the <i>discovery</i> and <i>application</i> of the principles, -the powers, which underlie those errors.</p> - -<p class='c007'>Heretofore there has been no inquiry made by the rulers of the -people into the general principles of government. It was sufficient that -there was a government maintained, the governors caring for little but -the power to compel the people to do their bidding. But it is beginning -to dawn upon the minds of those who have something more than -a selfish interest in humanity that there <i>is a science</i> of government; -aye, even that there is a science of society: and such minds are endeavoring -by the deepest researches to discover the principles of these -sciences.</p> - -<p class='c007'>In our government, the principle of individual rights is theoretically -held, though in its application government still interferes with those -rights. The legitimate functions of a government, based upon the rights -of every individual over whom its power is exercised, are limited to the -<i>duties</i> that will best <i>subserve</i> and <i>protect</i> the interests of individuals. -The proper understanding and practice of these functions is the most -important thing for a people to arrive at, but, having arrived at this as -the basis of all the relations of the people, the scientific construction of -the various departments of the complete superstructure which is to -cover all the public interests of all the people, as well as to maintain -their private interests intact, can be begun.</p> - -<p class='c007'>After the general principles of government are properly formulated -in Constitutions and vitality given them by laws, a correct, a scientific -financial system stands <i>next</i> in importance. If a country have a true -system of <i>government</i>, and do not have a true system of <i>finance</i>, it can -never attain to any <i>permanent</i> prosperity. Literally speaking, finance -is a <i>part</i> of government; since, in organizing it, means for its support -<span class='pageno' id='Page_5'>5</span>are among the first considerations. Hence it is plain, if there are principles -of government, so must there also be principles of finance.</p> - -<p class='c007'>It has never been pretended, so far as I know, even by the profoundest -political economists, who are sticklers for the gold standard, -that any financial systems the world has ever known were developed by -the scientific application of self-evident truths, which is the nature of -principles.</p> - -<p class='c007'>The various systems of which use has been made were simply <i>experimental</i>, -devised for <i>politic</i> reasons, as the <i>best</i> methods to meet the -exigencies of the times in which they were required. Instance the -Greenback, the necessity for which was such as to shake the nation to -its very centre, and to fill the minds of all patriots with a dread foreboding.</p> - -<p class='c007'>If there have been no scientific money systems in vogue, and it now -comes out that the world has arrived at that degree of advancement -wherein <i>policy</i> should give way to <i>principles</i>, even in finance, there can -be nothing gained by going back to review the errors, failures and -fallacies of the past. Nothing valuable can be gained by wading -through the almost innumerable statistics which have accumulated to -a sufficiently great extent to bewilder the most comprehensive intellects. -Having for ten years been deeply engaged in studying the principles -of government, I learned that no system of government could be -perfect unless its financial department was perfected; therefore I have -frequently endeavored to solve the financial problems which statistics -propose, but <i>invariably</i> failed to learn anything that even promised to -look well as a basis for a new and improved system, to say nothing of -its promises in operation.</p> - -<p class='c007'>The conclusion was inevitable, that there have been <i>no</i> acknowledged -or even known, fundamental principles of finance operating in <i>any</i> -of the many systems of the many nations, and that the so-called money -of the world <i>is not now, nor ever was</i>, money, in the scientific sense of -that term.</p> - -<p class='c007'>All the statistics, failures and errors of the past, with which the -history of money abounds, being of no value, must be utterly ignored -in any inquiry which proposes to predicate a natural and scientific -<span class='pageno' id='Page_6'>6</span>money, as distinguished from arbitrary inventions, devised to meet the -various exigencies of nations in their growth, prime and decay. And -<i>any</i> person who proposes to teach finance, or a new system, by arraying -before you the evidences of the past, contained in figures amounting -to billions of dollars, simply proposes to try <i>another experiment</i>, to <i>culminate</i> -in another failure.</p> - -<p class='c007'>Therefore I shall present no principals, per cents. and compounded -amounts, except, perhaps, as examples to illustrate the mathematical -impossibilities of the fallacious theories by which financiers have attempted -to dazzle the world, but who have only succeeded in accumulating -in the hands of a very select few that which by an exact justice -should belong to, and be distributed among, the people generally.</p> - -<p class='c007'>In order to intelligently discuss and arrive at legitimate conclusions -regarding the question of money, it should be <i>first</i> determined just what -is to be involved in the discussion; for around this, as around all other -general things, there has been such a mass of rubbish and extraneous -matter aggregated that the main question is always in danger of being -lost sight of, unless this be first removed and the real issue left clearly -exposed.</p> - -<p class='c007'>Most of the confusion which follows the attempts to solve the money -question arises out of the fact that the <i>same</i> words in the mouths of -<i>different</i> people do not mean the <i>same</i> things, or that <i>different</i> words are -used by <i>different</i> people to mean the <i>same</i> thing. If there are two words -in common use to represent similar objects, but which, upon close analysis, -<i>do not</i> represent precisely the same thing, it is better that <i>one</i> of -them be discarded. It is necessary, therefore, to settle, prior to the -beginning of this argument, <i>precisely</i> what the several terms <i>do</i> mean -which are prominently in use in connection with the money question. -It is, perhaps, near the truth to say that this settlement is the argument. -Very few persons have any well-defined comprehension of what is the -<i>real</i> significance of the terms <i>gold</i>, <i>money</i>, <i>currency</i>, <i>intrinsic value</i> and -<i>wealth</i>. If these words are analyzed, what do they scientifically represent?</p> - -<p class='c007'>Gold is a product of the earth only to be originally obtained by labor -and expense, and both practically and scientifically bears like relations -<span class='pageno' id='Page_7'>7</span><i>to</i> labor that all other things do which are produced <i>by</i> labor; and none -other. But there has been an importance attached to gold which has -not been accorded to <i>any other</i> product of labor. It has been coined -and called money, because it was coined, and by custom and common -acceptance made an <i>arbitrary</i> standard of value, which <i>none</i> of its qualities -warrant when subjected to analysis, as will be shortly shown.</p> - -<p class='c007'>Gold bears the same relation to <i>real</i> money that a religious theory -bears to <i>real</i> religion, which theory, when comprehended by the intellect -of the people, loses its value as a substitute for real religion; but -which, until comprehension comes, it is better to have than to have none -at all. So also with gold. It has in <i>theory</i> been considered as <i>money</i>; -but when a <i>true</i> money comes to be comprehended, it will lose its value -as a substitute therefor, and sink to its proper sphere among the other -products of labor.</p> - -<p class='c007'>It is altogether probable that gold was the very best substitute -for money during that part of the world’s evolution wherein people -were guided and controlled by policy and before principles were recognized -as that which should govern, let their action lead where it might. -As the world is now beginning to act from <i>principle</i>, for the sake of the -<i>truth</i>, so also must they now begin to formulate the principle of -money for the sake of the principle.</p> - -<p class='c007'>Wealth is whatever is produced by labor which adds to the <i>comforts</i>, -the <i>happiness</i> or the <i>life</i> of man; and everything that does this, -either directly or indirectly, has intrinsic value—that is, has the capacity -to bless mankind.</p> - -<p class='c007'>Wealth may, and should, be divided into two kinds, namely, <i>permanent</i> -wealth and <i>transitory</i> wealth.</p> - -<p class='c007'>Permanent wealth consists of all those products of labor which are -not themselves <i>transferable</i> into life, comfort or happiness, but which -may at all times be <i>exchanged</i> for that which is thus transferable into -that which can be used to continue life. Gold, silver and precious -stones are among the best illustrations there are of permanent -wealth.</p> - -<p class='c007'>Transitory wealth consists of all those products of labor of which -direct use is made to maintain life or to add to its comforts and happiness, -<span class='pageno' id='Page_8'>8</span>and which, <i>by</i> such process, are absorbed <i>into</i> and become <i>a part of</i> -the life of humanity. Transitory wealth, it will be seen, is much the -more important of the two, since, if people only possessed permanent -wealth, their life could not be continued an hour by it, unless there -were a possibility of exchanging it for the necessities of life.</p> - -<p class='c007'>It would seem that <i>all</i> kinds of wealth are intrinsically valuable, -since its various kinds may be either <i>directly</i> used to maintain life or -may be <i>exchanged</i> for those which will maintain life. Wealth and -intrinsic value, then, mean the same thing.</p> - -<p class='c007'>But what does the term <i>money</i> mean: or has it no necessary significance -in the inquiry?</p> - -<p class='c007'>There was a time when there was no such <i>thing</i> or <i>word</i> as money; -but at that time there was life to continue, for which wealth was necessary. -It seems that <i>wealth</i> had existence before <i>money</i> was thought -of. Wealth is substance, of which money is the principle or representative, -but which, in itself, has no intrinsic value.</p> - -<p class='c007'>Money is an invention made to <i>represent</i> wealth, or value, in order -that its various kinds may be exchanged with facility, or that they may -be exchanged without the absolute and direct and immediate receipt -and delivery of one product of labor for another product of labor. All -the products of labor may be exchanged <i>directly</i>, and without the use of -any representative or go-between, which for the time being stands representative -of the one or the other, but <i>not so well</i> at all times and -under all circumstances. Money is <i>anything</i> which stands representative -of any product of labor; that is, that can be made use of to facilitate -the exchange of any of the results of labor, which are wealth. A -representative of anything cannot be the thing itself, therefore, if money -is a representative of wealth it is not itself wealth. Were A, B and -C to at all times exchange their products between themselves by -<i>direct transfer</i>, they would have <i>no use</i> for money; they would exchange—deliver -and receive—<i>actual</i> values. But when A desires from B some -of his products, himself not having on hand any of his products which -B desires, he receives from B his value and gives him his representative -of value—his note—promising that at a future time he will deliver B the -<i>actual</i> value which he desires.</p> - -<p class='c007'><span class='pageno' id='Page_9'>9</span><i>Currency</i> is only a <i>form</i> of money, the same as <i>gold</i> is only a -form of wealth; and in the same manner that gold is wealth, is currency -money. Money being the principle of representation in exchange, -everything of which use is made to facilitate exchange in the form of -representative value is money. Anything which can be transferred -from one party to another, anything that is negotiable which is not actual -value of itself, is money. This includes not only all currency, -bank notes, but also bills of exchange, the ledger and bonds. These -are <i>all</i> representatives of wealth, <i>all</i> demands for payment at a future -time of a certain specified sum, and consequently are money. It is -quite evident that, with the terms <i>wealth</i> and <i>money</i>, we have all the -necessary distinctions which should enter into the abstract question of -finance. All other terms are but names for separate kinds or forms of -these terms, to be made use of when they respectively arise in making -exchanges.</p> - -<p class='c007'>Now, every one must at once concede that that which best represents -all of the products of labor will also best <i>exchange</i> them, and is therefore -the <i>best</i> money. It is <i>equally clear</i> that gold in <i>no way</i> represents -<i>any</i> labor but that which produces it. If gold were a true representative -of the results of <i>all</i> other labor, except that which produces it, -would it not also be apparent that <i>such</i> labor must be <i>equal</i> to <i>all</i> other -labor. Were gold a thousand times more valuable than it is held to be, -it would not <i>even then</i> be able to represent all other values. Therefore, -gold is a <i>false</i> standard of value, a <i>false</i> representative of wealth.</p> - -<p class='c007'>Many people think and speak as if gold would be of no use to -this country if it were to come into disuse as <i>money</i>; that we should entirely -lose it as <i>wealth</i>; the very reverse is really true, since we -should have just the same quantity of gold that we <i>now</i> have, to be -used for the <i>same</i> purposes for which it is now required, to wit: to export -to other countries in exchange for imports.</p> - -<p class='c007'>Suppose our imports to amount to a thousand millions dollars -per annum, and that we export cotton, corn and pork to -that amount, what use would we have for gold except to loan other -countries, and could we not <i>loan</i> it as <i>gold</i>, taking their representatives -of value for it equally as well as though it were coined into money, -<span class='pageno' id='Page_10'>10</span>having the seal and stamp of the government? It is well known that -we do not export gold to Europe as so many American dollars, but -as so much gold, by weight of a certain degree of fineness, the stamp -of the government attesting to that degree.</p> - -<p class='c007'>Again: Suppose that we had no cotton, corn or pork to give in exchange -for our imports, and that we produced a thousand millions dollars’ -worth of gold per annum, should we not be <i>equally</i> well conditioned -to trade with Europe?</p> - -<p class='c007'>It is seen that the real character and qualities of gold are the same -as are those of any other product of labor, which we can exchange -direct, for other products of labor which we want more than we do -the gold. If at any time the balance of trade is <i>against</i> us, and we have -<i>no</i> cotton, corn, pork, gold or <i>anything else</i> to make it good, we must -then make it good by our representatives of value—our bonds—to be -converted when we shall have these products. This process has been -actually going on ever since we began to export bonds, either national, -state, county, city, railroad or bonds of other incorporated companies.</p> - -<p class='c007'>Now, is it not <i>perfectly</i> evident that we have not only produced by -labor what we have exported, which we have been pleased to denominate -merchandise, but also that we have produced all the gold that -has been exported; and in this connection is it not just as much an -article of merchandise as is either cotton or corn? Gold cannot at <i>one</i> and -the <i>same</i> time be both <i>money</i> and <i>merchandise</i>. If <i>gold</i> is money, so -also is <i>wheat</i>, <i>cotton</i> and <i>corn</i> money, since they perform the same <i>services</i> -and possess the same <i>qualities</i> as merchandise that gold does.</p> - -<p class='c007'>To be perfectly clear in our conclusions, money must be resolved into -its <i>uses</i> and entirely divested of all its <i>fictitious</i> and <i>irrelevant</i> relations. -The fact that money is that thing which is made use of to exchange -real values must be the initial starting-point, of which sight must -never be lost until it is <i>definitely</i> settled what will <i>best</i> perform this service. -Anything which can be made use of for <i>any other purpose whatever</i>, -is <i>not</i> the <i>best</i> thing to be made use of as money; because the demand -for such a thing for such other purposes destroys its positive value -as money by causing fluctuations in its exchanging power.</p> - -<p class='c007'>It is a grave financial error for this country to endeavor to return -<span class='pageno' id='Page_11'>11</span>to gold as money. All the practices under the gold standard have been -positive and ample refutations of the arbitrary value accorded to gold. -A <i>dollar</i> in gold can only exchange a <i>dollar</i> in value in any other substance; -and the practice of issuing a greater amount of bank notes than -the bank has gold dollars to redeem them by, is a <i>legalized</i> system to <i>rob</i> -the people; since it is <i>evident</i> that a bank having three hundred thousand -dollars in notes in circulation, and only one hundred thousand dollars -in gold in its vaults, can redeem but <i>one-third</i> of its circulation if it be -all presented at once for redemption. All the other securities of a bank, -such as its discounts, personal property and real estate, may become of -no value, or may be placed out of reach of the holders of its circulation, -so that the only <i>real</i> security for its circulation is what it may have -in gold in its vaults. Beside, what right has a bank to receive legal -interest on three times the amount of its real security? Is not this a -most <i>transparent</i> method of <i>swindling</i> the people? Hence I assert that -the use of gold as money <i>always</i> results disastrously to the producers -of wealth, and <i>always</i> beneficially to those who are permitted to absorb -all their productions.</p> - -<p class='c007'>Another unanswerable reason why gold cannot answer the requirements -of money is found in the <i>degrees of value</i> which belong to -different products of labor, and which are <i>universally</i> determined by -the sacrifice required to produce them. That is to say, all other things -being equal, the <i>relative</i> value of products is determined by the <i>time</i> -and <i>labor</i> required to produce them. The increase in the value of manufactured -material is in <i>exact</i> proportion to the <i>time</i> required and -<i>wealth</i> consumed in their manufacture. The value of gold is determined -in <i>precisely</i> the same manner; and it is simply foolishness to assert -that the value of gold never changes, or that it has the same purchasing -power at all times.</p> - -<p class='c007'>Suppose there should be immense fields of gold suddenly developed -all over the country, so that it would become as common and plentiful -as iron or coal, would it not decrease in value in comparison with -other products? That is to say, would an ounce of gold then possess as -great a proportionate value to other products as it now does? No one -will pretend it. Then gold is just as much the subject of fluctuation as -<span class='pageno' id='Page_12'>12</span>is any other product of labor, and for <i>just the same</i> reasons—demand and -supply—which are the great arbitrators of values in all parts of the -world.</p> - -<p class='c007'>Everybody knows that for a certain quantity of gold a certain quantity -of cotton may be obtained, and for a certain quantity of corn, a horse. -The fact that the horse is obtainable by the corn does not convert the corn -into money, neither does gold any more than the corn become money because -the cotton is obtained thereby. The gold for the time is equal in -value to the cotton, and so is the corn to the horse. Now, what is required -of money is this: Suppose the gold, cotton, corn and the horse to be of -equal value, a person possessing an amount of money representing the -value of either of the four can, at his discretion, purchase whichever he -may choose; since the money would equally represent the gold, cotton, -corn and the horse. Anything that may be used for money that will not -do the same thing for any variety of the products of labor, values being -equal, is not money in any sense of that term.</p> - -<p class='c007'>Incidentally in this connection, because it has an indirect bearing -upon the question under consideration, I wish to call attention to a -mistake that has been productive of more financial ills and consequent -injustice to a large proportion of the people, who are the wealth producers, -than any other single cause, and that is the fundamental error of -making land, wealth, which it is no more entitled to be, scientifically, -than gold is to be called money. Wealth is that which is produced. -Land exists. All improvements made upon land are wealth; <i>but the -land proper, never</i>.</p> - -<p class='c007'>In this almost fatal mistake—almost fatal to the humanitarian interests -of the so-called common people—which is fundamental in its nature, -is found the <i>basis</i> upon which rest the vast disparities in the distributions -of wealth, and which gives to certain favored individuals the -means of realizing vast fortunes without ever resorting to the production -of wealth, or of even accumulating it by trafficking in the different -kinds of wealth.</p> - -<p class='c007'>There are numerous examples of this manner of becoming possessed -of riches. People acquire title to lands which, by favorable -location, come into great demand and consequently rise in value from -<span class='pageno' id='Page_13'>13</span><i>one dollar per acre to hundreds of thousands of dollars per acre</i>. By what -principle of <i>equity</i> and <i>right</i> should <i>any</i> person be entitled to such vast -increases in capital invested in land, when it is entirely attributable to -the movements of the community which produce it, and in no single -particular to the individual? To be so entitled is for the individual to -possess advantages over others to which no just communal government -should for a moment consent—is to have the right to appropriate to self -the results of labor which belong in common to all the people. Such -results are against <i>all</i> principles of equity and justice, and is one of -the <i>greatest</i>, if not <i>the</i> greatest error of the present, regarding the equities -of property, and is the foundation and prophecy of all other kinds of -monopoly.</p> - -<p class='c007'>It occurs to me that an objection may be raised to my argument -classing gold as wealth, and defining wealth to be that which can be -made use of to minister to life, comfort and happiness; or perhaps to -the distinction of permanent and transitory wealth. Gold, as permanent -wealth, can only minister to man through its exchange for other -valuables of which direct use can be made. It may be said that in <i>that</i> -sense gold can legitimately be money.</p> - -<p class='c007'>But if there are objectors to this argument, I beg to call their attention -to the conclusive fact that gold <i>can never</i> be representative of all -other kinds of wealth. It is just as impossible that it should be, as it is -that a bridge <i>one</i> hundred feet in length should span a river <i>five</i> hundred -feet in width. It must further be remembered that the uses for -which money is required demand an invention which can be made use -of for <i>no other</i> purpose whatever, and that money is the name of an invention -<i>demanded</i> and made for the purpose of <i>facilitating</i> exchanges—for -making them easy, <i>convenient</i> and <i>adaptable</i> to <i>all</i> conditions of <i>all</i> -persons.</p> - -<p class='c007'>Every attempt ever made to compel gold to answer the demands -of money has been a disastrous failure. So long as a country enjoys -continuous prosperity under a gold standard of value, it is all well -enough. The people make use of an expanded volume of currency in -the full faith that prosperity will continue and everything be smooth -and right.</p> - -<p class='c007'><span class='pageno' id='Page_14'>14</span>But anon a <i>change</i> comes, the nation is precipitated into conditions -which require <i>more</i> than its accumulations of gold to meet. <i>That</i> being -exhausted, it is <i>inevitable</i> that representation be resorted to. The -wealth in the form of gold not being adequate, and other wealth not -having been used or accepted as money, paper representatives of it are -the <i>only</i> resort. So it appears that when an <i>emergency</i> arises the people -are <i>involuntarily</i> pressed to the use of the principle of representation, -which is the <i>only</i> scientific thing that can be called money. So that -while a paper representative of wealth is, <i>with everything else</i>, a product -of labor, it is more than that; it is the embodiment and application of -a principle, which other products of labor are not; and all principles -are fundamental; are the basis of all permanent and all purely scientific -things and truths, while wealth is the realized product of the outworking -of principles, directed and appropriated by man for his use -and convenience.</p> - -<p class='c007'>The direct inquiry can now be made as to <i>what</i> will <i>best perform</i> -what the people require of money; and money is that which can be -used to <i>represent</i> real values without an absolute <i>transfer</i> of such values. -The basis of all value of this country is our <i>present</i> accumulated <i>real</i> -wealth and our <i>capacity</i> to increase it, and this accumulation and the -prospective increase may be <i>wholly</i> represented by money and the nation -never become bankrupt.</p> - -<p class='c007'>A person may possess wealth to the amount of ten thousand dollars -upon which he may issue his representatives of value or promises to pay -that value. These representatives of value would circulate among -those who believe in the capacity and intention of the utterer to give -<i>up</i> to them, <i>when</i> demanded, that which they represent. Everybody by -his individual right has the authority to issue such representatives of -value, and no government has any right to prohibit their circulation; -because the people, as individuals, have the right to take or refuse -them. The issue of bank notes is upon the same principle, and so -long as the government does not in substance <i>indorse</i> these issues, the -people have the <i>perfect</i> right to deal in them—to receive and deliver -them.</p> - -<p class='c007'>But there is an insuperable objection—one which cannot be overcome -<span class='pageno' id='Page_15'>15</span>by any governmental requirements—to these representatives being -called the real money of the people, since circumstances over which -<i>neither</i> their utterers nor receivers can have <i>any</i> control may render them -valueless—may make it impossible for those who uttered them to redeem -them—and their holders find themselves with <i>bits of paper</i> representing -<i>nothing</i>; but for which they parted with real value.</p> - -<p class='c007'>So far as this condition is confined to individuals who had no -other reason for receiving them, and no other assurance of their real -value than the supposed <i>capacity</i> and <i>intention</i> of the uttering person or -persons, it is <i>strictly</i> a legitimate condition; and one with which the -sufferers can find <i>no</i> fault; since of their own free will and choice they -received the utterers assurances that his representatives were of real -value. An individual upon his personal judgment, without undue persuasion, -accepts another’s representative; if it prove <i>bad</i> he has <i>himself -only</i> to blame for the loss, as coming from an error of judgment; -and <i>no power</i> or <i>authority</i> has any right to step in to compel the making -of amends for this error. <i>This</i> is the simple doctrine of the <i>rights</i> of <i>individuals</i>, -with which <i>no third party</i> has any right to interfere after the -occurrence of the fact. But when banks are organized under certain -formula of law, framed by the people or their representatives through -government, the people receive and pay out their issues—representatives -of their value—<i>not</i> because they have special confidence in the capacity -and intention of the individuals who compose the management, <i>but</i> because -they <i>suppose</i> the management has conformed to <i>those certain forms -of law</i> which are <i>intended</i> to render them safe. In this way the government, -at least indirectly, gives <i>credit</i> to the bank, and <i>currency</i> to its -issues, and the people accept them <i>simply</i> because the government has -done so.</p> - -<p class='c007'>But if these banks are mismanaged either ignorantly or intentionally, -or managed by designing men, as often they are, who make use -of the governmental sanction to swindle the people, as many times they -have, <i>where</i> can the people look for redress; <i>where should</i> they look for -redress? The government is justly responsible to the people for all -such issues, since it did not require real security from the banks, and -government should make reparation therefor.</p> - -<p class='c007'><span class='pageno' id='Page_16'>16</span>This is precisely our objection to <i>any</i> and <i>all</i> forms of bank issues. -There can be <i>no</i> arrangement made so <i>perfect</i> in security to her people -as to <i>guarantee</i> them <i>absolutely</i> against all hazard, that will permit the -banks to make the profits which they seem to think they are entitled to -make from the people. In <i>absolute</i> security there can be <i>no</i> profit. -Bank profits demand the circulation of more notes than they have <i>real</i> -value to represent. Profits come only from speculating either upon the -<i>confidence</i> or the <i>money</i> of the people, and government has <i>no</i> right to -<i>protect</i> such <i>illegitimate</i> and <i>unjust</i> practices.</p> - -<p class='c007'>Our present system of banking is a <i>swindle</i> upon the people, which -it is simply surprising that they endure as they have and do. For the -banks to be permitted to filch from the people twenty-four million dollars -per annum is an <i>outrageous villainy</i> which, if comprehended by the -people in its <i>true light</i>, could not exist <i>another year</i>. ’Tis true these -banks complied with the law passed in a time of dire necessity, and that -through them the government acquired the means to conduct the war. -But did not the people themselves do even <i>more</i> than furnish money, -which was promised to be returned; did they not freely give their <i>lives</i>, -which can never be returned, and which the government never thought -of promising to either return or guarantee, and that, too, for the pitiful -sum of thirteen dollars per month? What comparison is there between -the sacrifices made by the two classes of people, the capitalists who have -absorbed the wealth of the country and the laborers who still continue -to give life, property and vitality <i>to</i> the country. There is absolutely -<i>no</i> chance for a comparison; the distinction is <i>too</i> great.</p> - -<p class='c007'>It seems to me that if either class is entitled to superior consideration—to -receive millions of the people’s money—it is the common people -who so freely offered their <i>lives</i> to save their country, instead of -those who simply <i>loaned</i> their money at enormous rates of interest, -with the certain knowledge that it would be repaid. The present -claims are too preposterous, and deceptive, and too unjust to be long -continued.</p> - -<p class='c007'>All bank notes in their ultimate effects are frauds upon the people, -and their continuation as a circulating medium is only possible because -that part of the people who suffer from them have not yet risen into a -<span class='pageno' id='Page_17'>17</span>proper understanding of the question. The time is, however, near at -hand when those who have reveled in the result, of the wear and tear -of the muscle, and the sweat of the brow, of the common laborer, will -be compelled to produce honestly and equitably everything they would -enjoy.</p> - -<p class='c007'>The substitute for all kinds of bank notes as the money for the -people should be a <i>purely people’s money</i>—a <i>national currency</i> whose -basis of value would be the accumulated wealth of the country, and -also its capacity for regularly increasing such wealth. Is there any reliance -to be placed in a currency issued by an individual or a number -of individuals through an incorporated bank, based upon his or their -wealth, which is at all times liable to pass into the hands of other individuals? -Yes, there is a presumptive reliance—an indefinite security—but -the security is not perfect. In comparison with this security place -that of a currency issued by the government, based upon the <i>entire</i> -wealth of the <i>whole</i> country, which, no matter how much it might be -changed about among the different persons comprising the nation by various -contingencies, could never depart from the country; which fact -would render it safe under any and all contingencies that could possibly -arise, excepting alone the entire destruction of the country and its government -by a foreign power; which contingency is not sufficiently imminent -to cause any present alarm.</p> - -<p class='c007'>A national currency <i>thus</i> based would have not only <i>all the gold</i> of -the country as a basis, but also <i>all other kinds of wealth</i>. Is it not perfectly -plain that such a money would be just so much better than -common bank notes, with a one-third gold basis, as the total amount of -the wealth of the country is greater than such amount of gold? It -would be in the most complete sense the people’s money. It would be -a system of mutual banking wherein every individual of the country -would have an interest, instead of there being a vast number of -mutual banking institutions, such as has been proposed by a person of -profound financial ideas.</p> - -<p class='c007'>As before stated, my objection to all systems of individual banking -is that the <i>basis</i> of their issues is at all times <i>liable</i> to pass from the -possession of such individuals; whereas, in a national currency—the -<span class='pageno' id='Page_18'>18</span><i>money</i> of the people, <i>themselves</i> in the aggregate the basis and security—there -could be <i>no such</i> liability; since, if <i>parts</i> of the security pass from -original to secondary hands, it is <i>still</i> the basis of the currency, and -could never be transferred beyond the jurisdiction of security by the -operations of designing or incapable persons. By no possibility could -there ever a loss occur to the holder of such a currency, except it be -destroyed in his hands.</p> - -<p class='c007'>Undoubtedly the <i>greenback</i> was the <i>nearest</i> approach to a <i>real</i> money -that any people of the earth ever made. We have only to observe how -<i>admirably</i> it has answered nearly all the purposes for which people require -money, to be convinced that it has the very best—the most secure—basis -that it is possible for a money to have. It stands representative -of the capacity and willingness of the government—the representative -of all the people—to pay.</p> - -<p class='c007'>But it is one of the most <i>difficult</i> of things for the people to divorce -their minds from the idea that gold is the only possible, real money. -Yet the <i>facts</i> attaching to the greenback stand out in bold and indisputable -relief, perfectly and entirely dispelling all basis for the idea. -Because the greenback was the <i>first</i> step toward a real money that the -country ever took, which left gold entirely out of the question, the impression -still remains with the people that a <i>return</i> must be made to a -gold basis; never stopping to observe how vastly superior the wealth -basis is to what the gold basis would be.</p> - -<p class='c007'>Bank note currency, or a currency issued by an individual or by a -class of individuals, always carries along with itself the <i>idea</i> and <i>need</i> of -redeemability. If, however, there is any thought among the people -that the utterers cannot meet their <i>promises</i> of redemption, at that <i>very</i> -time when, of <i>all</i> others, <i>confidence</i> is necessary to avoid <i>ruin</i>, they rush -to prove the suspected incapacity; and generally they do prove it.</p> - -<p class='c007'>The idea of, and necessity for, redeemability, is that which <i>most</i> requires -to be <i>divorced</i> from money. Money—real money—should never -require to be redeemed. It should always be just as valuable to retain -possession of as anything could be into which it may be converted. -Anything that requires to be redeemed in order to make it <i>permanently</i> -valuable or a representative of value is utterly unworthy the name of -<span class='pageno' id='Page_19'>19</span>money, because it does not truly represent <i>real</i> wealth. It is that currency -of which there is doubt about the real wealth it pretends to represent -which requires to be made redeemable before it will circulate; -and <i>this</i> fact proves <i>most</i> conclusively that it is <i>not</i> money in any true -sense of that term: that is to say, it is not that which requires to be -converted into substance.</p> - -<p class='c007'>It is readily perceivable that a national currency having continually -all the nation’s wealth, accumulated and prospective, as its basis, never -needs to be redeemed. This <i>single</i> consideration is of quite sufficient -importance to <i>alone</i> warrant its immediate adoption and use upon the -standard of wealth. The gold standard is the flimsiest deception of -which it is possible to imagine. The people’s talk of approaching a gold -standard as the ultimate of appreciation is the <i>merest <span lang="fr" xml:lang="fr">jeu d’esprit</span></i>. Gold -is now selling at say 113. Suppose that during the next year its price -should gradually decline to par, or, in the phraseology of the goldites, -their country’s general credit should appreciate to par, would the process -of appreciation <i>necessarily</i> stop just at <i>that</i> point? Why should it not -just as reasonably <i>continue</i> to appreciate, so that in another year -gold would be below the par of the country’s credit? This simple -analysis proves beyond <i>all</i> cavil the arbitrariness of the gold standard -of value.</p> - -<p class='c007'>The credit of a country increases or diminishes without <i>any</i> regard -whatever to its gold producing or paying capacity. It is governed -by its capacity for the <i>general</i> production of <i>all</i> kinds of wealth over -and above its average consumption. It is just the same with a country -as it is with an individual; the individual, to become wealthy and to -have a good credit, must not necessarily ever have <i>any</i> gold; but he must -be able to produce or acquire more than he consumes by his general -expenses. A country must proceed by the same process to become -wealthy, and it is simply an <i>absurdity</i> for people to talk of the <i>prosperity</i> -of the country when <i>high prices</i> for <i>everything</i> are induced and fostered -by a system which restricts <i>general</i> production in order that <i>special</i> production -may flourish. Individuals cannot get rich by trading among -themselves, <i>no matter if they increase the price</i> of their <i>wares ten per cent. -every year</i>. Neither can all the individuals of a country do the same -<span class='pageno' id='Page_20'>20</span>thing. What is required by both is increase in the quantity of what -they trade in.</p> - -<p class='c007'>It is not the price of what a people <i>have</i> that constitutes their true -wealth, but it is the <i>quantity</i> of their commodities. A barrel of flour is -possessed of no more real value if it cost twenty dollars instead of five. -It will not maintain life a day longer, let the price even be a thousand -dollars. Thus we arrive at the real basis of values—the real wealth—and -I have introduced this, precisely for the purpose of showing the -high-priced protectionists that they know nothing about <i>true</i> values or -<i>true</i> economy, as well as to also show that there is <i>no</i> real wealth except -that which conduces to higher ends than its simple acquisition. Wealth -as an end is despotism. Wealth as a means is humanitarianism.</p> - -<p class='c007'>But to return from this departure to the main subject. For the -idea of redeemability for money there should be substituted that of -convertibility. A real money should at <i>all times</i> be capable of being -converted into <i>that</i> of which it stands <i>representative</i>. And here we arrive -at the last analysis of a real money. It will be readily seen how -completely a national currency meets this requirement. It would be -representative of the productive capacity of the country, and could always -be converted into whatever portion or kind of its products might -be required; or into the products of other countries which may be acquired -by the direct exchange of our own products.</p> - -<p class='c007'>What more than this can be demanded of money; or what better -thing invented as money; or what more capable of inspiring and maintaining -an even and legitimate confidence?</p> - -<p class='c007'>National currency being the very best possible money, because it is -not only the most convenient but also the most secure, there remains -<i>nothing</i> to be done but to <i>continue</i> to so <i>acquaint the people</i>, until they -become <i>convinced</i> of the rapaciousness of those systems by which -the <i>large</i> majority are compelled to labor <i>all their lives</i> for the <i>very select -few</i>. There is no difficulty in arriving at all the initial points necessary -to determine the amount required, how it should be distributed and -kept in circulation, or how its circulation should be regulated. These -are all practicalities of finance.</p> - -<p class='c007'>But there is <i>one thing</i> which has never yet received consideration, -<span class='pageno' id='Page_21'>21</span>which is <i>absolutely necessary</i> to make money meet <i>all</i> the requirements -of money, and at the same time to maintain a <i>fixed</i> and <i>absolute</i> value at -all times and under all circumstances, which money never has had. -From its lacking, have come all the various financial convulsions. And -<i>this is</i>, an absolute measure of value.</p> - -<p class='c007'>Can money be measured so that the same fixedness shall attach to -it that attaches to everything else with which we have to do? Money -itself has always been considered a measure of value; and it is this false -stoppage and foundationless position that has made possible all financial -discords, irregularities and inconsistencies. Does it appear to be a -strange proposition that money should be measured? Why should not -a dollar be just as absolute as a dollar as a pound is as a pound; or as -a foot is as a foot; or as a gallon is as a gallon? A cord of wood contains -one hundred and twenty-eight solid feet, or eight cord feet. It -must <i>always</i> be <i>eight</i> feet in length, <i>four</i> feet in height and <i>four</i> feet in -width, or some other multiples of one hundred and twenty-eight. A -cord can <i>never</i> be any more, <i>never</i> any less than just that measurement. -And the same rule holds of everything else with which we have to do; -with quantity, time, space and motion. All these have fixed and unvarying -modes of measurement. But money, the lever by which all -these are moved, has been left to fluctuate as it would—to be moved by -every different influence, so that in <i>many instances</i> what should have -brought contentment, peace and continuous prosperity, has bequeathed -the direct reverse.</p> - -<p class='c007'>It does not concern us that there are <i>more yards of cloth</i> at one time -than another, provided that <i>yard-sticks</i> are all of the same length. But -what <i>would</i> concern us would be this: That if with increase of the -<i>quantity</i> of cloth the <i>length</i> of the yard-sticks should increase proportionately; -or with the <i>decrease</i> of the quantity of flour the <i>pound</i> should -decrease in like proportion therewith. Now this is just what has always -been true of money; its <i>real</i> value <i>increases</i> and <i>decreases</i>, just in proportion -as those things which it professes to measure have increased or -decreased in quantity. Instead of these things being exchanged or -converted into something measured by as <i>fixed</i> a <i>standard</i> as they are, -the attempt is made to measure them by <i>something</i> which <i>constantly increases</i> -<span class='pageno' id='Page_22'>22</span>and <i>decreases</i> in representative capacity. In other words, a dollar -is not at all times one and the same thing. Sometimes it is but seventy–five -cents, and sometimes a dollar and a half. That to say that -seventy–five cents at one time possess the same representative power that -a dollar and a half does at another time, which is in substance to say -that money has no measure.</p> - -<p class='c007'>Now what is desirable and indispensable is to give money a <i>fixed -measurement</i>, which shall be <i>just</i> as absolute in its measure of the value -of money as the pound is in its measure of weight, or as the yard-stick -is in its measure of distance. There never is any more cloth, though -there be a thousand more yard-sticks. Nor is a yard-stick ever any -longer or shorter, if the quantity to be measured is increased or decreased -a thousand-fold. Now just to such a fixedness must money be -reduced before it will subserve its best purposes and uses, and the only -way this can be done is by that method which will also remove the <i>only -possible</i> objection there can be brought against such a national currency -as is proposed. This objection is that by over-issues of currency its -value would or might be depreciated.</p> - -<p class='c007'>Let it be supposed that the country’s extremest need to meet -the demands of the greatest amount of trade is a <i>billion dollars</i> currency. -At certain times there are greater and less demands for money, -which, under our present practices, make a dollar, to-day, worth <i>four -per cent. per annum</i> interest, and to-morrow increase it to <i>ten per cent.</i> -It must be remembered that we are now speaking of an <i>irredeemable -currency</i>, the <i>representative</i> of the <i>wealth</i> of the nation: that the <i>government</i> -representing the nation has <i>uttered</i> it, in behalf of <i>the people</i>, upon -the <i>soundest</i> and, in reality, the <i>only</i> sure basis of value <i>any</i> money <i>can -have</i>—the productive power and capacity of the nation.</p> - -<p class='c007'>An over-issue is the only thing to be guarded against. The -government must be prohibited by some <i>absolute law</i> from resorting to -the process so well known in railroad management as the “<i>watering -process</i>.” And this is to be accomplished in the following manner: -This currency—this money—must be made convertible into a national -bond, bearing such a rate of interest while in the hands of the people as -shall be determined upon as “the true measure of value”—say three or -<span class='pageno' id='Page_23'>23</span>four per cent.—which experience would necessarily determine as the -true point of balance; and the bond also convertible into currency at -the option of the holder.</p> - -<p class='c007'>In other words, the people should demand that the Government -issue one thousand million dollars in bonds, bearing three per cent. interest, -payable in currency, and that it issue one thousand million dollars -of circulating medium or money to be loaned to whomsoever deposits -the bonds as collateral; all loans to be made at three per cent. per annum; -to be for six months, with two renewals of three months each, -one-half payable on each renewal. The principle underlying the time -being that all credits should be settled with each year’s products.</p> - -<p class='c007'>The operation of such a system can be very easily traced. Whenever -there should be so much currency in circulation that it would be -worth <i>less</i> than four per cent., the surplus would at once be invested in -the four per cent. interest-bearing national bond; and when business -should revive and the demand for money to transact it should make -money worth <i>more</i> than four per cent., then bonds would be converted -into currency again until the equilibrium should be re-established. -And whenever the demand should be such that all the money -would be converted, and money still be worth more than four per -cent., then the government should issue enough to produce the equilibrium.</p> - -<p class='c007'>Thus it is seen that the four per cent. or the three per cent. interest-bearing -national bond becomes the <i>fixed measure</i> of value for money. It -would always be worth <i>just that amount</i>—<i>never</i> any more; <i>never</i> any -less. The gallon measure always gives just the same quantity of molasses. -The yard-stick always gives just the same quantity of cloth. -The pound weight always gives just the same quantity of sugar. So, -too, would this measure of money always give just the same amount of -real wealth, or its representative, every day, week, month or year, -whether applied to wealth in business, to bonds, or to money at interest. -An oscillation would be perpetually maintained; first, conversion -of currency into bonds; next, conversion of bonds into currency; -and whenever the supply of currency should be deficient, <i>then the issue -of more by the government to meet it</i>. Thus there would be a <i>people’s</i> -<span class='pageno' id='Page_24'>24</span>money regulated to <i>financial</i> equilibrium, which is the <i>ultima thule</i> of -convenience for exchanging the products of industry.</p> - -<p class='c007'>It may be remarked, parenthetically, here, that even three per cent. -per annum interest is altogether too greatly in favor of capital. A careful -calculation of interests and general increase of the nation’s wealth -discovers that less than a two per cent. interest is required to make the -capitalist and the laborer stand upon an equality. Had I the time I -would be glad to present you some figures to show to what condition -we are tending. I will simply remark, however, if capital continue to -receive the present rates of interest for the next thirty-five years, at the -end of that time it will have absorbed all the wealth of the country. -That is to say, that interest compounded at the rate of 6 per cent. upon -the present Banking Capital will amount to a sum larger than the present -aggregate of wealth together with the same rate of increase which -has governed it during the past, added thereto. Is not this a sufficiently -alarming fact to cause people to stop and consider the despotism into -which they are rapidly merging?</p> - -<p class='c007'>Everybody who knows anything about the relations of money to the -people must prefer such a money as we have indicated to any other kind. -It is really the greenback system extended to <i>all uses</i> for which money is -required, and to which is given a <i>fixed measure</i> of value. All people at -present interested in national banks and high interest-paying bonds -are constitutionally opposed to such a change in our money system. -This, however, should not deter its introduction and use. The people’s -welfare is what should be consulted, and made <i>the test</i> of all propositions -that are to become theirs to practice. National banks and all banks of -issue, with their drain upon the people to make their immense profits, -must be done away, and banks simply as depositories for the accommodation -of the people, alone exist.</p> - -<p class='c007'>The national bank and other currency would be gradually called -in at the rate of, say ten per cent. a month.</p> - -<p class='c007'>I may add in justification of this plan, that if the Government can -loan three hundred millions to the banks for nothing, it can loan to the -people for three per cent.; if at the same time it can pay three per cent. -on its bonds and in currency, instead of six per cent. and in gold, it secures -a new-found advantage.</p> - -<p class='c007'><span class='pageno' id='Page_25'>25</span>But one of the <i>chief</i> benefits which would come to the people from -the proposed currency would be the <i>interest</i> which would accrue to the -government—all the people—for the use of this money. In other -words, <i>all</i> the interest now paid to <i>banks of issue</i> for <i>loans</i>, for the -<i>same</i> convenience should be paid to the government. A <i>part</i> of the -people, for the <i>use</i> of money belonging to <i>all</i> the people, themselves inclusive, -would pay <i>interest</i> to the government therefor. And what more -legitimate method of governmental support than this, if by it all other -means of taxation could be annulled? The interest now paid by the -people of the country to the Banks and Capitalists would, twice over, -pay all costs of maintaining the government. A three per cent. interest -paid to the government on all loans the people required would not only -relieve the people who produce wealth of one-half the interest they now -pay, but also of all taxes of all kinds. Is not this a matter to be -looked into in the most serious manner?</p> - -<p class='c007'>With such a currency system <i>once</i> inaugurated, the country would -begin a gradual process of general prosperity. Wealth, instead of accumulating -in a <i>few</i> hands, would continually tend to an <i>equal</i> distribution -among <i>all</i> producing people. A large part of the speculative mania -would be rendered futile, and those now devoting all their time to -<i>hatching schemes</i> by which to defraud the producing classes of their -wealth would be <i>compelled</i> to turn producers themselves. It is calculated -that one-tenth of the male population of this country is engaged -in speculative pursuits. In other words, they ‘live and grow fat’ from -those who are engaged in production. And that is our boasted equity, -our equality.</p> - -<p class='c007'>It should be the object of all reform to make a <i>nearer</i> approach to -a system of <i>complete</i> justice and a <i>perfect</i> equity. Any reform that does -not base itself upon <i>such</i> a proposition and whose outlook is not in this -direction <i>is no reform</i>, and does not deserve the serious attention of any. -There is scarcely an idea prevalent in the community of what true justice -and equity consist. But it may be stated as follows: <i>No person has -any just claim to the ownership of anything which he did not produce or -which he did not acquire by an equitable exchange of something which he did -produce.</i> Tested by <i>this</i> rule, the accumulated wealth of the world is in -<span class='pageno' id='Page_26'>26</span>unjust hands; it is held by those who have a <i>no better title</i> thereto than -if they had actually stolen it. It has been fraudulently acquired, and -that is the word which best expresses the manner of its obtainment. And -one of the most effective methods of remedying this growing evil is to -attain to a true money system—one founded in the requirements to be -met and based upon that which it is to represent—that which it is to be -used to exchange. Anything that <i>departs</i> from these standards is <i>not</i> -scientific money. That which <i>has</i> these for its standards <i>is</i> a scientific -money.</p> - -<p class='c007'>Aside from all that has been said, there is a general principle rising -into the comprehension of humanity which <i>must of necessity</i> dethrone -that which has so long been worshiped as the money god. The day -for arbitrary rule and standards is drawing to a close, whether they be -standards of materiality or spirituality; of morals or intellect; of despotism -or democracy. Gold <i>is</i> an arbitrary money standard, and with -all others of like character <i>must</i> fall. The tendency of the world is -<i>against it</i>, and its doom is <i>already</i> sealed. It has been <i>weighed</i> in the -balance and found wanting.</p> - -<p class='c007'>The interest of the common people, who should always hear every -new Christ, demands a reform in our monetary and financial systems. We -are aware, however, that there is a great deal of prejudice in their -minds in favor of “hard money,” and they must be awakened to the -fact that hard money is a myth—a play upon words—a deception practiced -upon them by those who have played the part of “the appropriators -of wealth” lo! these many years, and who would continue to filch -<i>year</i> after <i>year</i> all that the “toiling millions” can compel nature to yield -up to them. In this process the laboring classes are the mere avenues -through which the earth pours its wealth into the coffers of the capitalists.</p> - -<p class='c007'>Some object that the very numerous and intricate methods to -which resort would be required would prove <i>unmanageable</i>, and -that <i>corruption</i> would <i>inevitably</i> creep in and undermine its usefulness. -Let such consider our almost perfect postal system, and how <i>well balanced</i> -are all its movements and checks, and find therein their answer. -Would there be more intricacy in the proposed system than there now -<span class='pageno' id='Page_27'>27</span>is in the present? Do not all national banks, though nominally -distinct, <i>really</i> have a common fountain head in government? Does -not all their currency come from government? Suppose all these -banks, instead of being independent institutions, were an organized system, -having a common head, as the banks of New York City virtually -have in the Clearing House, would not that be a condition so nearly -related to the system which would be required as to show its entire -practicability?</p> - -<p class='c007'>Indeed, there is scarcely need that there should be a new department -inaugurated to bring such a currency home to the people. Perhaps -there never was a system operated in which there was <i>less</i> proportionate -loss through its executive officers than in our postal system. And this is -because the <i>responsibility</i> comes <i>home</i> to the people. The postmaster is -<i>always</i> a resident of the <i>place</i> in which he officiates, and, either with or -without a civil service law, should be the <i>appointee</i> of the citizens whom -he is to serve; and, of course, would be a person possessing their special -confidence. To such persons might the <i>care</i> of the public money -well be intrusted; and in <i>all places</i> except cities a <i>single</i> person could -perform both the services of postmaster and of United States financial -agent.</p> - -<p class='c007'>Means can be easily devised to make all post offices offices for loaning, -as they now sell post office stamps and money orders.</p> - -<p class='c007'>In all that I have said my only purpose has been to endeavor to -arrive at a proper understanding of the most important feature of governmental -justice and uniform equity among all the people. All past -systems have failed to secure this. The world has constantly witnessed -the proceeds of the labors of the millions <i>aggregated</i> in the hands of the -few. This advantage which one class has possessed over another cannot -long exist under the rapid spread of intelligence, which marks the present -generation; and it behooves <i>this</i> people to give <i>due</i> consideration to -<i>any</i> scheme which proposes to lessen this advantage. And <i>most especially</i> -does it become the duty of the people, if there be such a thing as -<i>principles</i> of <i>finance</i>, to <i>find</i> them out and cause them to be practically -applied.</p> - -<p class='c007'>In fine, and to resume, the idea of money must first be separated -<span class='pageno' id='Page_28'>28</span>from that of the intrinsic value of gold, or any other commodity, and -confined to the mere capacity of representing all commodities, and so -of facilitating the exchanges of wealth. This, it has been abundantly -demonstrated, can be as well, and for various reasons, better done by -strips of paper, properly stamped and signed, than by gold or any other -metal.</p> - -<p class='c007'>In the next place, these strips of paper, signed by the Government, -with the credit and wealth of the whole country, are better than -individual promises; though the issuance of individual promises should -not and need not be prohibited, as we do not now prohibit anybody -from making or receiving private notes, drafts and checks.</p> - -<p class='c007'>Again, the Government Money need not be redeemable, but only -convertible into new strips of paper when the old ones are worn out, and -into commodities when they are used in trade, and into other Government -Securities bearing interest, as I have pointed out.</p> - -<p class='c007'>Still again, money has also been held to be a correct measure of -values. This it ought to be, indeed, but has never been so, because -it has never been measured itself. Of what use would yard-sticks be, -used for measuring cloth, but which had never themselves been -measured by anything? The system which I have stated for measuring -money itself is believed to be perfect. It is not the individual dollar, -relatively to the half dollar or the hundred dollars, that has failed to be -measured or fixed; but the rate of increase relatively to other values, of -<i>all the Government currency afloat</i>. By the convertibility of any excess -of issue sinking its value below a certain standard into interest-paying -bonds, any over-issue is immediately absorbed, while a deficiency of -issue will be revealed by the fact that absolutely no bonds will be sold. -In this manner the whole operation will be self-adjusting from day to -day; the value of the aggregate of Government money will be accurately -measured and kept uniform; and any interest or temptation -which the Government might have to an over-issue would be immediately -neutralized by the absorption of such surplus into bonds, upon -which the Government itself would be paying interest; or, in other -words, assuming an unnecessary and useless burden, in the face of the -people and of its own economies. Can anything more perfect be -<span class='pageno' id='Page_29'>29</span>devised? If so, let us have it by all means; if not, let this device be -adopted. A self-adjusting, self-regulating admeasurement of the value -of money would make it a true measure of other values, and is a suggestion -which, if it can be secured, is of unequaled importance.</p> - -<p class='c007'>Another somewhat similar idea was glanced at in passing—that of a -definite method of determining scientifically the equitable rate of -interest. This I cannot stop now to explain. It will, however, only -be when we come quite down to that basis, that the full value of this -financial system will be experienced.</p> - -<p class='c007'>Finally, in its basis, this system of Government money is money -issued at the mere cost of printing and circulating; but by adjoining -with it the idea of a complete, simple and exceedingly economical -means of raising the revenue of the country, the three or four per -cent. is paid to the treasury; that is to say, by the people individually -to the same people in their collective capacity. Under this system -all the various revenue officials and tax assessors and gatherers would -be dispensed with, and a vast system of economy inaugurated, which, -in a few years, would transpose us from a borrowing to a loaning nation, -making us the financial example for all the world. This it also seems -to me is another invaluable feature of the system, all of which I, however, -respectfully submit to the decision of the people.</p> - -<p class='c007'>The interests of humanity which are involved in this question are -greater than are the interests of those who have assumed to <i>rule</i> the -world, and who are endeavoring to <i>fasten</i> upon the people <i>despotism</i>, to -escape from which would require the shedding of whole rivers of human -blood and the destruction of the best evidences of our civilization, for -which we have a perfect right to feel the greatest admiration.</p> - -<p class='c007'>A <i>timely</i> understanding of the money question would guarantee -precisely the reverse of <i>all</i> this, and cause humanity to take still <i>greater</i> -and more rapid <i>strides</i> toward that perfect enlightenment which can -alone thoroughly recognize the common brotherhood of the human race, -toward which end all reform should be directed.</p> - -<div class='pbb'> - <hr class='pb c003' /> -</div> -<div class='tnotes x-ebookmaker'> - -<div class='chapter ph2'> - -<div class='nf-center-c0'> -<div class='nf-center c004'> - <div>TRANSCRIBER’S NOTES</div> - </div> -</div> - -</div> - - <ol class='ol_1 c002'> - <li>Silently corrected obvious typographical errors and variations in spelling. - - </li> - <li>Retained archaic, non-standard, and uncertain spellings as printed. - </li> - </ol> - -</div> - -<div style='display:block; margin-top:4em'>*** END OF THE PROJECT GUTENBERG EBOOK A SPEECH ON THE PRINCIPLES OF FINANCE ***</div> -<div style='text-align:left'> - -<div style='display:block; margin:1em 0'> -Updated editions will replace the previous one—the old editions will -be renamed. -</div> - -<div style='display:block; margin:1em 0'> -Creating the works from print editions not protected by U.S. copyright -law means that no one owns a United States copyright in these works, -so the Foundation (and you!) can copy and distribute it in the United -States without permission and without paying copyright -royalties. 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