Speech of Col. Henry Sylvester Fitch,
in the State convention of the
National Currency Party of California,
held in Dashaway Hall, San Francisco,
June 29th, 1877.
A CONDENSED HISTORY OF OUR MONETARY LEGISLATION DURING THE CENTURY OF OUR NATIONAL EXISTENCE; SHOWING THE UNDER-LYING CAUSE OF ALL OUR FINANCIAL MISHAPS AND PANICS, AND THE PRESENTATION OF A BETTER MONETARY SYSTEM.
Ordered Published by a Unanimous Vote of the Convention.
SAN FRANCISCO: CENTRAL BOOK AND JOB PRINT,
420 MONTGOMERY STREET
Mr. President, and Gentlemen of the Convention:
The State Executive Committee of the National Party of California have done me the honor to request me to address this body upon the great question of MONETARY FINANCE, at this time a subject of the most momentous concern to every citizen of the republic. It is a subject upon which I have bestowed considerable thought; and while I may not be able to awaken very great enthusiasm, I trust I shall be able to present to you some RECORDED FACTS touching our monetary legislation, and state some of the effects thereof, in such manner as shall interest you, and perhaps cause a better understanding of the troubles which so afflict the country to-day.
I know the subject of Finance is not such as to enlist the popular mind – there is so much in it that requires close attention and study to comprehend; and therefore I shall ask of the members of the press, and all who hear me to-day, to be patient as well as generous in the bestowal of their attention to what I shall have to say.
In this, as upon every other subject to which I have given publicity to my views, I declare to you that I am inspired with the sentiment that "the noblest motive is the public good." To make you aware of the great evils which have grown out of the financial legislation of the Government, I will present to you a succinct history of the monetary acts of this Government since its foundation, and trace their effects to the present time: and when I shall have shown you the many unwise things that have been done, the force and effects of which and sadly telling upon the whole country at this time, I will not leave you "What shall be the remedy?" because I do not believe in demolishing a structure until I can offer you a better to replace it.
The experience of the past should furnish to us lessons from which we may derive a better understanding for our future guidance; and I know of no better means of teaching you of what is requisite to be done, than by first showing you the mistakes of this Government, commenced at its national birth, and continued down through the first century of its existence. I will show you that we have had influences to contend with, from the very start, opposed to the welfare and prosperity of the nation, outside of the nation – that they are wise, crafty, skillful, and persistent, and never sleep upon an opportunity to do us mischief.
In 1776, our then infant Government made its first issue of paper money. During what is understood as the Revolution, our Government issued about 350 millions of paper money, and distributed it among the people; and it became the material financial aid which enabled us to achieve our freedom from British rule.
This currency, after it had helped to accomplish the high purposes of patriotic freemen, and when scattered among the soldiers and laborers of the land, was infamously repudiated by the very Government it had been chiefly instrumental in establishing. You have doubtless heard of the "Continental Money" of that period, and you hear it now sometimes mentioned (by those who favor the gold standard) with a sneer. Few there be who attempt an explanation of the causes which bereft this money of the public favor. I will tell you something about it, and before I take leave of you, in the close of this address, I will make it very plain that the same influence which caused the repudiation of the notes which proved so potential in securing our freedom, and carrying us through the Revolutionary war, has been kept alive since that day, and has done its devastating work in our country during all the century of our national existence.
The method is very simple, and exceedingly well understood by the money craft. As I have said, at the close of the war there was something more than 350 millions of this continental currency (so called) afloat. Silver and gold coin had been drained from these colonies, much in the same manner that government treats its colonies to-day. This drain was one of the causes of the Revolution.
Well, when English arms had failed to achieve a victory over us, the government and people of England, through its commercial and other agents, commenced a tremendous financial intrigue, tending to cripple this young nation, by a contraction of its financial resources.
While our people were singing songs of gladness, and piously uttering their thanks and gratitude to God for deliverance from English tyranny the subtle trap for our country's enslavement was being woven by the government and sympathizing subjects of King George.
Nearly one-half of the citizens of the new nation still leaned in their affections toward English rule, and gave to the emprise of the new republic a negative support. Many of these were forehanded and affluent, and comprised what might be considered the capitalistic class. These were spurred on by British nation-wreckers to set on foot a scheme to demonetize and make valueless the paper issues of the Government believing that, without money, the sufferings of the masses would become so great that they would finally return allegiance to the parent government. The people of England made a loud outcry against our paper money. Traders in our own country chiefly English, declared that this Government should place itself in commercial accord with other countries, and especially England; and maintained that such a condition could not be arrived at without redemption of our continental notes with coin. Redemption was known to be absolutely impossible, since we had not a tenth part of the necessary sum. Their demand was therefore no less irrational than mischievous.
Then, as now, the cry arose against a paper money promise, which had no provision of coin for redemption. Then, as now, many of the capitalistic class of our citizens, whether resident in England or lending to this country the favor of their presence until they could satisfactorily retire with their gains joined in a furious tirade and abuse of a Government that failed to retire its paper issue and confine its monetary provisions to gold and silver coin alone. The paper money of the banks of England and Scotland were referred to, and the issues of our Government contemptuously compared.
In short, the influence of the moneyed class became so powerful and dogmatic, that Congress yielded to the demand "that gold and silver coin should only be a legal tender in the United States" thus actually repudiating the paper money of the Government, then disseminated among the people. This yielding to a foreign policy, under the guise of a necessary "commercial accord," was the first fatal financial fault committed by our Government. Think, for a moment, of the effect of this demonetization and consequent repudiation of the Government notes at this early period. The loss of a circulating medium of 350 millions by a people whose small supply of coin was only derived from immigration, and impossible of increase on account of the constant foreign drain; the irrational and unstatesmanlike surrender of what had become an accepted vehicle of trade, answering every demand save that of the enemies of our country nipping in the bud the promise of prosperity which had dawned upon the republic striking with paralysis the nervous energy and ambition of an aspiring people stripping them of their gains depriving them of their resources, and compelling them to submit to the subtle dictation of a power whose mercenary rule they abhorred pressed into an acceptance of a monetary theory which placed them absolutely under the dominance of English intrigue, and more thoroughly subjugating them to England's imperious will than when under the governmental control of that power; all, and much more than I can name to you in this address, accomplished in the interest of England, and for our financial overthrow, by the adoption of one single line of England's financial science – to wit : "Gold and silver coin shall only be a legal tender."
We cannot reckon the cost of this expensive sentiment to us by the estimation of the money losses and the shrinkage in the value of the properties of the people. We must go farther, and estimate the possibilities of our achievements had we been less blind and yielding, and more wise and firm; then may we comprehend our serious mistakes, and our loss of power in lost opportunity.
None but the students of the history of these times can realize how much we owe to that "Corsican soldier" who understood England's policy to the core, and who so valiantly made England and all Europe feel his power, and join for common protection, for a quarter of a century, and so occupied the attention of King George and his scheming subjects, that in some degree the operations which had been planned for our destruction were deferred, notably to our advantage.
This money scattered among the people, constituting in great part the capital on which industry and employment found dependence; this chief money supply we may say almost entire money supply of the people stricken by the very hand of its creator with demonetization, degradation, and damnation ! Is it surprising that our continental money has been often referred to as furnishing in unhappy experience ? Good money, in all parts of the United States – everywhere received and accepted at par with gold and silver coin, until shorn of its power of a tender, and its field of service destroyed.
Have you ever considered the potentiality of the words "legal tender," when placed upon a piece of paper by the Government ? Have you ever contemplated the wide disasters which fall upon the country when this legal tender power is either restricted or denied to any monetary issue of the Government ? If you have not, and find yourselves in doubt upon these questions, I commend them to your examination. I think I can safely assert that there is no known instance, in all the history of financial legislation upon the globe, when a partial limitation of or total repeal of the law of a tender did not, in degree, debase either coin or paper money, and thereby distract or mar every industrial interest of the country in which such action has been had. In the instance I here refer to, it is well known that the war of the Revolution, with all its rigorous demands upon the people, was never so afflictive to their common interests as was this blight cast upon the nation's substitute for money, and which had been accepted by them in good faith. I think it was in the year 1782 that the Congress of the United States in great measure representing, as at the present day, the interest of the capitalistic class, the English and American combination repudiated the Continental money of this Government by the passage of a law which declared that only coined money should henceforth be a legal tender.
This was the method by which we were placed in commercial accord with Europe. How do you like the process ? Shall our anathemas fall upon the paper money, which had achieved so much for freedom and which gave such promise for human progress ? or shall they fall upon those soulless mercenaries who struck this blow for England, and for so long a time held our citizens in bonded service to a power whose yoke we thought we had thrown off ? The condition of the people had become so distressing and unbearable in the nine years following, that they sent numerous petitions to Congress for relief. This relief came in the form dictated by
A United States Bank (so called) constructed expressly to serve the will of the English and American combination, was chartered in 1791, to run for 20 years – bills redeemable in coin, whether obtainable or not.
Although the issues of this bank were not so good as the continental money before demonetization, yet the people received it, as the people have done ever since – glad to get any form of money with which to carry on business, and pay for bread; so it may be said that even this scheme, concocted by the compacted money powers, afforded indirect relief to the country, and for a time credit in certain quarters improved and industries revived, and the country assumed a quasi prosperous condition until 1811, when this bank charter expired.
Then commenced another period of distress and ruin, brought on the country by the contraction and settlements enforced : which process was suddenly checked by the war of 1812.
Temporary use was made of the bills of the U.S. Bank, and some concessions granted to it by the Government, whereby settlements were deferred. Requisitions for men who had been thrown out of employment, for the army and navy, production of supplies, and the diversified employments following therefrom, enabled the people, though restricted greatly in the money supply, to plod along until 1816, when the National Bank was granted a re-charter for another twenty years. Paper money again put new life into everything. Many manufacturing and other enterprises were established, and the idea of what a people could accomplish, when fully employed, began to dawn upon the country. From 1826 to 1836, State banks were chartered in great numbers. The lesser capitalists of the country had ascertained the power and profit of banking, and the States maintained that their rights were co-equal with the General Government to charter banking corporations the issues of either being only a substitute for money. Indeed, the States contended that theirs was the rightful prerogative to charter, and that the Government should confine itself to the making and regulation of money de facto, and not lend itself to any issue of a substitute for money whatever.
GEN. JACKSON, PRESIDENT OF THE U.S.
In 1833, took sides with the States and State Banks upon this question, and conceived it to be sound policy to support these State institutions in preference to the scheme of a United States Bank, and vetoed the bill of Congress re-chartering that famous institution. He not only manifested his hostility to the National Bank scheme, but showed his decided favor to State Banks by withdrawing the national funds from the vaults of the National Bank, and depositing them in several of the State Banks selected by him.
The National Bank charter expired in 1836, and then it was that the full fury of the Anglo-American money combination began to show itself. They declared that with State banks it was impossible for this nation to occupy a position of "financial accord" with Europe. I would say, en passant, that financial accord with Europe always means financial accord with Great Britain. Assume this feature as we pass along.
The scheme to bring this country to the support of the United States Bank, so that the United States Government, like the English Government, could be brought under the control of the same money powers, had temporarily failed; and to recover the lost power of these Anglo-American schemers, the coined money of the realm was quietly gathered in, and much of the sum shipped away to England, so that it could not possibly serve for redeemable use when called for. By the dark ways ever open to these campanian mercenaries to breed disaster when they have a will to do so, they proceeded to make a run upon one State bank after another until a financial panic ensued, and a suspension of specie payments followed throughout the whole country. Then it was that
ENGLISH FINANCIAL STRATEGY
showed its hand. The control of our money was only part of the great scheme. The control of our productions, and the supply of our people with English manufactures, had been coupled with their monetary machinations. The ruin which followed this great raid seemed complete. Every industry seemed paralyzed; manufactures tumbled into bankruptcy the dependents on daily toil were left to starve; English manufactured goods flooded the country, and doubtless at loss to England; these goods continued to be poured upon us. The point to gain was, the utter destruction of our manufacturing enterprises and the complete supply of our people with English productions. Some few statesmen of our country perceived the dire intent of this commercial accord cry, and aroused the country to an issue of protection. A protective system was inaugurated by Congress, which raised the drooping energies of the people, and for a time the invasions of British trade were held somewhat in check.
It may be proper here to state, that the only instance shown in our history when the Democratic party favored a State substitute for money was when President Jackson proclaimed his favor for State banks. Judging from the history of that party's policy since that period, it is fair to presume, that had there been a contest between a demand for a direct issue of the Government and this quasi money of the State banks, that great statesman would have cast his influence on the side of a Government money. Never since that unhappy experience with State institutions issuing a substitute for money, or United States Banks issuing a no-less-precarious substitute for money, has that party, by word or deed, subscribed to either project. Without a United States Bank and States banks, our statesmen, pressed by complaints of a want of more money, set about the consideration of some other plan of a money, not open to the contingencies which had swept away all former institutions; and after much discussion the issue of Treasury Notes was decided upon. In the years 1837, 1838, and 1839. $10,000,000 yearly was issued of these notes, and with this thirty million issue partial relief was rendered to the suffering people.
The passage of a
GENERAL BANKRUPT LAW,
in 1841, also enabled not only bankers, but others, to adjust their affairs and start anew.
These Treasury Notes were about this time called in, the Treasury Law having been repealed; and revivals of business met with another severe check – and so the people pulled along until 1846, when Congress gave to the people a Sub-Treasury Law, which furnished us with a mixed currency, consisting of coin, Treasury notes, and State bank bills.
The war with Mexico, commencing in this year, produced an activity which nothing else could have accomplished under the then-existing state of the money supply, which continued until 1849.
During this year the Anglo-American financial schemers set on foot another run upon the State banks, and succeeded in driving most of them into suspension; and because of the small issue of Treasury notes, and inadequate supply of coin, nearly every interest became affected, and every industry again paralyzed,
THE DISCOVERY OF GOLD IN CALIFORNIA
Drew many idle and unemployed to these shores; and the production of this metal in quantity stimulated the flagging energies of the people, and rescued them from the immediate further effects contemplated by those who had combined to put a scourge upon the country.
Thus affairs continued, with varying degrees of prosperity, until 1857, '58, and '59, when Anglo-American combinations effected another run upon the State banks; another time of suspension and stricken business enterprise ensued, and spread again over the country its gloomy prospect.
In 1860-'61, just as the State banks were becoming re-established,
Was inaugurated; and I desire especially to call your attention to the financial legislation of Congress from that period to the present day. If we give to this thread of events a careful examination, we shall not fail to observe some very significant facts touching this whole money question. The first fact that will impress us is, that English financial strategy has entered into every Congressional discussion upon monetary affairs from 1782 to the present day, and that her secret influence has constituted the bottom cause of every financial mishap that has befallen the country.
Second, That during all this period our Government has been without any characteristic financial policy of its own blindly following the suggestions of those whose interest it was to mislead and overreach us on every available point.
The third fact illustrated by this century of experience is, the utter impracticability of every effort to supplement the volume of money with paper promises to pay in coin; and that any Government which permits an issue of notes in excess of its provision of a coin basis, simply invites disaster, and lays itself open to the commission of tremendous mischiefs by its enemies, at home and abroad.
Fourth, We are led to understand that coin, as the only representative of wealth the only standard of money cannot possibly measure the nation's need; and that, as a basic support of a paper substitute for money, it becomes the potential pebble with which David can bring down his Goliah at will.
This much I assert, and ask your observation of the events given in the order of their occurrence, and judge thenceforth for yourselves.
LEGISLATION SINCE 1860.
You will remember, in 1860, at the time of the commencement of the war between the South and the North of this republic, the money of the country consisted of gold and silver coin, not exceeding the sum of one hundred million dollars. This coin was principally locked up in banks in New York and elsewhere, as the basic security of a substitute for money (representing about 5 to 1 of coin), in the bills of corporate banks.
All wars create an exigency of demand for money to carry them on : and our internecine struggle proved no exception to the rule. It may be considered a remarkable fact, that to the present time the nations of the earth, most powerful, most enterprising, and most progressive, have failed to originate and incorporate into their constitutions and laws a distinctive and declared monetary system.
They have had in force, with more or less degree of merit, their Financial, their Domestic, and their Foreign policies; but never a monetary structure, adding permanency to progress, exemption from panics, or security in times of war against monetary vicissitudes. In such a condition of dependence was this Government at the period named, that it became absolutely necessary to apply to the banks then existing in the eastern cities for a loan. The first and the second application of the Government for a loan found a response from the bankers on terms, clearly significant, that further accommodation must be conditioned upon the virtual transfer of the Government into the hands of the money powers. This experience of the Government in borrowing money led it to question the possibility of creating a Governmental paper issue, acceptable to the people. England and Germany had both been applied to for a loan, and both refused. The money which had been borrowed had been nearly all expended, and yet the war continued. War, like a conflagration, cannot be measured in its duration, by the start it has. Enough to say, the condition of the country demanded monetary relief, and the greenback was proposed by Congress.
We now come to what we call the Congressional legislation upon money, and I wish you to observe how pertinaciously the money powers projected their mercenary views into all the legislation upon the subject. Some one in Congress had the good sense to say, that "all the bank currency in the country was neither less nor more than certificates of those banks' indebtedness to the holders of their notes;" and the quere arose, "Why not apply the nation's wealth to the nation's need ? Why not loan our services and our goods to the nation on its certificates of indebtedness, as properly as to banks ?" The bankers and (consequently) the press opposed this enlightened view of the question with more energy than success. The first loans made by the banks to the Government consisted of coin to the amount of near 30 millions, and bills 220 millions; and for this Congress enacted, in July and August 1861, that bonds should be given running twenty years, bearing 7.3 per cent per annum interest for a part of this sum, and that Treasury Notes were to be issued in denominations of not less than $50, payable in three years from date, with interest at the rate of seven and three tenths per cent, per annum, payable semi-annually; convertible into twenty year 7-30 bonds. In this Act, the option was given to the Secretary of the Treasury to issue 50 millions Treasury Notes (if he thought best), in place of the 50 millions three-years notes, in denominations of $5, and which should be denominated "demand notes," and made receivable in payment of public dues. There was so much of the Sub-Treasury Law set aside by this Act, that it was left at the option of Mr. Secretary Chase to select some of these banks to act as depositories of the Government. This last clause the bankers had put into the Act upon the supposition that Mr. Chase could be persuaded to leave the money of the Government on deposit in the very banks which had made the loans. This last bright idea Mr. Chase failed to comprehend, so far as the coin part of the loan was concerned; but the option given him of issuing 50 millions of $5 Treasury notes he was persuaded to adopt, and the result was, that the bankers were enabled to recover nine-tenths of their coin loaned to the Government, in less than six days and these Treasury notes too, in less than sixty days : and in a short time after, finding that Mr. Secretary Chase would not then entirely join their nefarious schemes for robbing the Government, they suspended specie payment [28th Dec., '61] of their own bills, which had already passed through the Government into the hands of the people.
I call your attention to this piece of remarkable financiering, for the Government ! The Government borrows a large sum of the bankers' bills (not a legal tender for anything, and not money at all, and never was anything but a questionable and uncertain substitute for money), and gave in exchange Treasury notes that were a legal tender, and fully equal to gold in powers of purchase and payment, and which commanded as high a premium as ever gold attained, simply because of their unrestricted use as money. What think you of the Governmental shrewdness, which gives in exchange its own bills, which subsequently sell in the market for 180 per cent, premium over the bills borrowed ?
But I will proceed to state the next act in the money drama. The national banking system was planned shortly after Secretary Chase entered upon the duties of his office, and was recommended by him in his first annual report to Congress, Dec. 10, 1861. At that time it was not deemed advisable to press the measure, since its author contemplated the hypothecation of Government bonds, which did not then exist in sufficient quantity, and could not then be purchased at a price which suited banking ideas. Something had to be done to strike the national credit. Gold had to be manipulated, Treasury notes had to be issued in quantity, and depreciated in quality, before this nefarious scheme could be carried out; and then it was that the most formidable conspiracy known to modern times was organized, with John Sherman, U.S. senator from Ohio, at the head to shape legislation so as to depreciate the paper of the Government, and enable them (the bankers) to secure the bonds necessary to establish the national banking system at the lowest possible figure. The National Bank Bill, therefore, was not pressed until 1863 a time when it could serve no interest of the people, and only exercise a potential power in all matters detrimental to the Government. Mr. Berkey, an eminent writer, has said : "The National Banking System was conceived in fraud, and its promoters, who found it to their advantage to first depreciate by legislation, and then decry (as they are still doing) the paper of the Government, were more dangerous, because more subtle enemies of the Government than Jefferson Davis and all his hosts."
By the next Act of Congress, approved Feb. 12th, 1862, the Secretary of the Treasury was authorized to issue $10,000,000 of Treasury notes, payable on demand, not bearing interest, in addition to the 50 millions of like notes authorized by act of July and August, 1861, which should be deemed part of the loan of 250 millions, already referred to. By the Act of March 17th, 1862, it was enacted that these demand notes (60 millions in all) shall in addition to being receivable in payment of duties on imports, be receivable and shall be lawful money, and a legal tender.
These notes being a full legal tender and equal with gold, as I have said, afterwards sold with gold at 185 per cent, premium over what is known as "greenbacks," afterwards issued.
We now come to the action of Congress in relation to what we call the Greenback Law, or "Legal Tender Bill."
The original bill authorized the Secretary of the Treasury "to issue on the credit of the United States 100 millions of Treasury Notes, not bearing interest, payable generally, without specifying any time or place of payment, and of such denomination as he may deem expedient : and all other Treasury Notes payable on demand, not bearing interest that have been heretofore authorized to be issued, shall be receivable for all debts and demands due the United States, and for all salaries, dues, debts, and demands owing by the United States to individuals, corporations, and associations within the United States;" and "shall be exchangeable for coupon Six-per-Cent Bonds of the United States at par value; or for any bonds that may be hereafter issued by the United States, as the exigency of the public service may require."
No sooner was this bill made public than delegations of bankers from Boston, New York, and Philadelphia, hurried to Washington to oppose it. They organized formally, and invited the Finance Committee of the Senate and the Committee of Ways and Means of the House to meet them; and these are the propositions of the bankers :
" 1. A Tax Bill, to raise 125 millions over and above duties on imports by taxation.
" 2. Not to issue any Demand Treasury Notes, except those authorized at the extra session, July, 1861.
" 3. Issue 100 millions Treasury notes at two years, in sums of $5 and upwards, to be receivable for public dues to the Government, except duties on imports.
" 4. A suspension of the Sub-Treasury Law, so as to allow the banks to become depositories of the Government of all loans; and to check on the banks from time to time, as the Government shall require money.
" 5. Issue Six-per-cent. Twenty-year Bonds, to be negotiated by the Secretary of the Treasury, and without any limitation as to the price he shall obtain for them in the market.
" 6. That the Secretary of the Treasury be empowered to make temporary loans to the extent of any portion of the funded stock authorized by Congress, with power to hypothecate such stock; and if such loans are not paid at maturity, to sell the stock hypothecated for the best market price than can be obtained."
I think you may have comprehended the diabolical trap which these shameless scoundrels sought to draw the Government into, by force of its necessities. You perceive that it far exceeds our California mode of stock operations, in the summary mode of forcing settlements.
The bankers, however, did not get all they then asked for. I will tell you what they did do with that bill. The bank delegates remained in Washington, and held further consultations with Secretary Chase, extending through several days, which resulted in an arrangement to the effect that Congress should be urged to pass a National Bank Bill (the pet scheme of Secretary Chase) issue no more Demand Notes enable the Secretary of the Treasury to retire all such notes from circulation, including several other propositions which they thought would eventually serve them as well.
The Legal Tender Bill, when it came up in the House had been changed to call for an issue not to exceed 500 millions; and for fourteen days occupied the House in its discussion, and finally passed that body. Mr. Thad. Stevens, in the course of debate, said some things which I desire to repeat to you. Speaking of the opponents of the Legal Tender Bill, he said : "But while these men have agonized bowels over the rich man's cause, they have no pity for the poor widow, the suffering soldier, the wounded martyr to his country's good, who must receive these notes without a legal tender, or nothing, and who must give half of it to the Shylocks to get the necessaries of life." "Sir, I wish no injury to any, nor with our bill could any happen; but if any must lose, let it not be the soldier, the mechanic, the laborer, and the farmer." "This amendment of the gentleman from Ohio [Mr. Yallandingham] proposes the same issue of notes, but objects to a legal tender. He fears our notes would depreciate. Let him who is sharp enough to see it instruct me, how notes that every one must take, are worth less than the same notes that no man need take."
But, Mr. President, I will proceed with the history of this Legal Tender Bill. On the 10th of February, 1862, Mr. Fessenden, chairman of the Committee on Finance in the Senate, reported the House bill from the Finance Committee with the following amendment :
1. That the legal tender notes should be receivable for all claims and demands against the United States, of every kind whatever, except for interest on bonds and notes, which shall be paid in coin.
2. That the Secretary might dispose of United States bonds "at the market value thereof, for coin or Treasury notes."
3. A new section, No. 4, authorizing deposits in the Sub-Treasury, at 5 per cent., for not less than 30 days, to the amount of twenty-five millions, for which certificates of deposit might be issued.
4. An additional section, No. 5 "That all duties on imported goods, and proceeds of the sale of public lands," etc., should be set apart to pay coin interest on the debt of the United States, and one per cent, for sinking fund," etc.
You will not fail to perceive in these amendments the voracious intermeddling of the bankers' committee. The bill, as amended, passed the Senate on the 14th of February, by a vote of 13 to 7, and was returned to the House on the 18th. Mr. Stevens, in reporting the bill as amended, said, "I have no purpose of considering the bill at this time. I desire that it shall be referred to the Committee of the whole, and be made the special order for to-morrow, at one o'clock. I hope gentlemen of the House will read the amendments. They are very important, and in my judgment very pernicious; but I hope the House will examine them."
To take you through the able discussion which ensued would occupy too much of the time accorded me for this address. The speeches of Mr. Spaulding and Mr. Stevens were masterly efforts, and should be read by every man who desires the public good, or would know to what execrable schemes the bank ring would lend themselves.
The Senate amendments were concurred in only in part, and a committee of conference was made necessary.
The Conference Committee appointed by the Senate consisted of Messrs. Fessenden, Sherman, and Carlisle; and of the House, of Messrs. Stevens, Horton, and Sedgwick; and after two or three days' struggle over the bill, finally reported it, with several alterations, the most important of which was "that the duties on imports should be paid in coin. On the 24th of February, 1862, the bill as agreed to by the Conference Committee was agreed to by the House by a vote of 97 to 22; and on the 25th the Senate concurred in the action of the Committee, and the same day the Legal Tender Act was approved by the President.
Thus, as Mr. Berkey has said, "were the most sacred interests of the people, especially of the producing classes – the farmer, the mechanic, the manufacturer, and the laboring man – grossly and wickedly betrayed into the hands of the money power, by the Senate of the United States."
I think you will perceive in the history of this bill, briefly as possible given to you, fellow citizens, that the points contended for by the Senate were, in substance and effect, the same as those contained in the plan of the bankers offered at their meeting in Washington.
Judge Kelley, in his speech delivered in Philadelphia some time afterwards, said, "I remember the grand old Commoner (Thaddeus Stevens) with his hat in his hand and his cane under his arm, when he returned to the House after the final conference, and shedding bitter tears over the result. 'Yes,' said he, 'we have had to yield; the Senate was stubborn. We did not yield until we found that the country must be lost or the banks be gratified; and we have sought to save the country in spite of the cupidity of its wealthy citizens.' "
If you will be patient with me, I will endeavor to show you more of the dark chapters in our American history.
It will be found that every step taken by Congress, since the passage of the Legal Tender and 5.20 Bond Bills, pertaining to the finances of the nation, has been dictated by the money powers. The sum taken from the people during the war, by the financial policy then adopted, and which now encumbers the nation in the shape of a bonded debt, is estimated at over one thousand millions of dollars; and it is susceptible of proof that the losses to the Government and people by the maintenance of this policy to the present time is more than the whole cost of the war, to North and South combined.
Permit me to give you the form of the endorsement on the back of the Greenback issued under the Act last mentioned. "This note is legal tender for all debts, public and private, except duties on imports and interest on the public debt; and is exchangeable for United States Six-per-Cent Bonds, redeemable at the pleasure of the United States after five years."
May I not say to you that this Greenback, hampered as it was in its power of payment, proved of most signal service to the nation. The people accepted it, with all its faults, and with marvelous celerity it found circulation in every avenue of industry, and bred an energy and an activity among the people such as they had never known before. A nation with every industry strickcn down, and groaning under the weight of a terrible apprehension, sprang suddenly into the light of the sun, the mightiest on the face of the earth. But we know what the Legal Tender has done for the country. Let us see how this tool of service to the nation and people has been unceasingly attacked by those who seek to control the Government, and all its monetary provisions. Let us examine and present to you the amazing pertinacity with which this money power has sought not only the control of the Government, but the absolute subjugation of the people. The premium on gold, standing at about 3 per ct. at the time of the passage of the Legal Tender Act, began to decline, and did not go up again till the last of May following. United States bonds immediately advanced from 90 to 102.
By the fourth section of the Legal Tender Act, the Secretary of the Treasury was authorized to receive in the Sub-Treasury to the amount of 25 millions, in sums of not less than $100, at 5 per cent. interest, with the privilege of drawing it out again, on ten days' notice after thirty days. On the 17th of March, 1862, the authority to receive these deposits was increased to 50 millions. On the 11th of July, 1862, it was still further extended to 100 millions; and by January 30th, 1864, to 150 millions; and the Secretary was authorized to pay as high as six per cent. interest. These deposits reached the sum of $120,176,196.
Is there any who can fail to see the hand of the conspirators in this work ? The privilege of withdrawal on ten days' notice left the Government using these deposits subject to a demand at any time to pay or give bonds on the terms offered by the depositors. Will you wonder now that gold began to rise, and that the disparity between gold coin and the greenbacks was made daily more apparent ? Do you not begin to perceive the machinations of the money power at work in the direction of attack upon the national credit ?
Again let us read the record :
In March, 1862, the Secretary of the Treasury was authorized to issue to public creditors, who may be desirous to receive the same in satisfaction of audited and settled demands against the United States, "certificates of indebtedness, in sums not less than $1,000 each, payable in one year, with interest at six per cent. And by a subsequent act in the same month this power was enlarged so as to embrace checks drawn in favor of creditors by disbursing officers, upon sums placed to their credit on the books of the Treasurer ! These certificates were issued in the form of bank notes, and circulated to a large extent as currency. The amount of this class of indebtedness in circulation November, 1864, was $238,593,000.
We would ask right here, if the Legal Tender would not have been better, since they would have been unattended with the same contingencies of demand as were these certificates, and would bear no interest ? On the 11th day of July another bill was enacted and became a law, authorizing another issue, of legal tenders of $150,000,000–$35,000,000 being of less denomination than $5.
In the second annual report of Secretary Chase, he fails to give the true cause for the rise in the price of gold and the 60 millions Treasury notes; which was, that coin and notes were the only currency that was a full legal tender; and he again advances his favorite theory of a national banking system. I have arrived at a point in this veracious history where I desire to call your attention to the recommendations of Secretary Chase, not only concerning the bonds which the Government was called upon to issue, but also the kinds and quality of currency which was asked to be issued; and I wish you to note and to remember how singularly his suggestions accord with the programme of the committee of bankers, which had some time before been urged upon him and upon Congress to adopt. In his report he says, "While the Secretary thus repeats the preference he has heretofore expressed for a United States note circulation, even when issued directly by the Government, and dependent on the action of the Government for regulation and final redemption, over the note circulation of the numerous and variously organized and variously responsible banks now existing in the country; and now sets forth more fully the grounds of that preference he still adheres to the opinion expressed in his last report, that a circulation furnished by the Government but issued by banking associations organized under a general Act of Congress, is to be preferred to either."
By this and what immediately follows it will be observed that the Hon. Secretary had set himself thoroughly to work in the of the bank rings :
He urged Congress to repeal that portion of the Act of Congress of February 25, 1862, which restricted the sale of bonds to their market price; and also the clause providing for the convertibility of bonds and Treasury notes (Greenbacks).
He proposed, also, that Congress should provide an increased amount of bonds for sale !
In furtherance of the designs and plans of the bankers' league, on the recommendation of Mr. Chase the following bill was reported by the Committee of Ways and Means, entitled "A Bill to provide Ways and Means for the Support of the Government," afterwards known as the $900,000,000 Loan Act ! After all the amendments of the Senate, (a large majority coinciding with Secretary Chase and the bank league,) had been introduced into the bill, it became a law on the 13th day of February, 1863.
The first section authorized a loan of 300 millions for the then current year, and 600 millions for the then next fiscal year, and to issue bonds therefor at a rate of interest not exceeding six per cent, per annum – interest to be payable in coin for the entire sum.
Section 2 provided that the Secretary, in lieu of an equal amount of said bonds, be authorized to issue 400 millions of Greenbacks, bearing interest not exceeding 6 per cent., payable in lawful money, which notes payable at periods expressed on their face might be a legal tender at their face value. Making these last more valuable than bonds.
Section 3 provided for an issue of 150 millions United States notes – legal tenders. The restriction in the sale of bonds to market value was repeated – thereby permitting their sale at any price which the syndicate were pleased to ask or offer for them.
This section further provides, that the holders of United States notes, issued under former Acts, shall present the same for the purpose of exchanging them for bonds, as therein provided, on or before the first day of July, 1863, and thereafter the right to exchange the same to cease and determine.
The fourth section imposed a tax of one per cent, each half year, on a graduated scale, on State Bank circulation, according to the capital stock of each bank. If these sections be carefully noted, it will be observed that the doors are thrown wide open for the capitalists to press these issues of notes back upon the Government. Not only this, but the holders of notes of a former issue were called upon, whether willing or not, to surrender their notes in exchange for bonds.
The promise of the Government, not only to pay interest in coin on the bond issue, but also for a portion of the Government notes, created an increased demand for coin to meet these engagements all of which worked as the Gold League designed it should, in putting up the price of gold and putting down the price of bonds; so that the National Bank ring could provide themselves with bonds at a low price to start upon.
But this is not the end of the perfidy practiced upon the people of the United States. In the last Act referred to, it will be observed, that the convertibility of the Greenback issued under the law of February 25th, 1862, was repealed contrary to the express terms of the Act under which the issue was made, and there existing in the nature of a contract, and comes as close to repudiation as possible. This was done to prevent an exchange which would lessen the total of the bond issue, and consequent crowding of the market with them.
It has been remarked, that when this Act of repudiation occurred, no objection was raised by the press of our country (possibly because not understood), and not a note sounded against its injustice, or the infamous policy which dictated it.
On the 3d of March, Mr. Spaulding's National Bank Bill became a law, after Mr. Sherman, of the Senate Finance Committee had doctored it to suit the bankers, Mr. Chase, and himself. The money power now had matters all its own way, and was in a situation to prey upon the Government and people at its pleasure. Duties on imports were made payable in gold. Interests on our bonds, it was claimed, were payable in gold. The exchangeability of the Greenback for bonds, of a certain description, had been abrogated; the country was flooded with evidences of indebtedness of the Government, in all forms such as demand notes, Treasury notes bearing interest, mutilated legal tender notes, certificates of deposit, certificates of indebtedness, etc., and a banking bill authorizing the issue of $300,000,000 more notes.
Now came the time when the $500,000,000 bonds, authorized more than a year before, were pressed upon the market. Remember, Secretary Chase had held these bonds back on one pretense after another; and if, under all these circumstances, gold advanced soon after to 280, and bonds receded to a fraction of their face value, it may not be considered, from all these causes, an unaccountable result.
I will not weary your patience by recounting the further issues of Government notes, and the laws which authorized their issue. But I will inform you of certain Acts, since the passage of the National Bank Act, which cannot fail to make you comprehend the sad condition of a Government and people administered and entirely controlled by a money power, whose voracity is absolutely insatiable.
Had been appointed Secretary of the Treasury at the close of Mr. Lincoln's first term. He had been in the Senate during all these contests for supplying the Government with currency. He made no record worthy of referring to at this time. In July, 1864, he surrendered his office to Mr. McCullough, a banker from the State of Indiana, whose financial education extended no further than to a belief that the measure of the volume of currency should stand co-equal with its base of coin.
As the circulation of the various forms of currency had attained a ratio of about forty-five dollars per capita, and the ratio of coin was only about two dollars per capita, he comprehended the situation at a glance, and issued his famous contraction edict, and promised redemption before another year should add to his grain of sense, or abrade the conspicuous croppings of his conceit – evidently intending to make quick work of it.
Mr. McCullough was placed in this exalted position by the influence of the National Bank ring. He became their servant and tool, and received from the ring instructions in the line of his service of their schemes. The Greenback, although not an unlimited legal tender, had proved a beneficent provision of the Government, and the people had come to realize the superiority of a currency issued directly from the Treasury department of the Government, and had manifested their partiality for it over any issue that might come through the channels of corporate banking. Over thirty-five States of the Union the Greenback was received at par, without a murmur from any one for all debts and for all commodities. The people had been taught the power and advantage of a legal tender paper money of the Government. They were reluctant to try any experiment of a substitute for it, and the National Bank ring saw very plainly, that to place their own issues in circulation among the people, the Greenback which the people greatly preferred must in some way be retired; and hence the contraction edict of Mr. Secretary McCulloch. Was ever scheme of wrong and outrage upon the people more deliberately planned ?
In the first year of Mr. McCullough's occupancy of the Secretary's chair, he retired $395,815,318 of the various notes, and substituted in the place of this sum of what had been used as currency, the bonds of the United States, interest and principal payable in gold !
In the meantime the effect of contraction began to be manifest, "Hugh McCullough had tapped a great artery, and let nearly all the blood flow from the body politic." This scheme of contraction was continued until 1868, when Congress was compelled by force of public sentiment to stay the contraction operations of Mr. McCullough – not, however, before the mischief had been done, and the aims of the money rings in great part accomplished.
Both of the political parties of the country had pledged themselves to the payment of our national indebtedness in coin; and within thirty days after the inauguration of President Grant, "An Act to strengthen the credit of the United States" passed both Houses of Congress, and was signed by the President. This Act solemnly pledged the Government to the payment of its obligations in coin, and the redemption of United States Notes in coin.
By this Act the 500 million bonds that had been issued in 1862 were pledged to be paid in gold; and the house of Rothschild (holding most of these bonds), fearing a repeal of the law, set about negotiating the exchange of these bonds into gold or its equivalent before they became due. By means best known to Mr. McCullough, 150 millions of these bonds were so paid off during his administration of the Treasury; and his successor, Mr. Boutwell, found ways and means to buy off the balance in gold or its equivalent. This single act of robbery, counting the cost of the bonds and the interest compounded, presented a net profit to the holders of many millions of dollars.
Do you wonder, my fellow citizens, at the growing influence of the money power, when such grabs as these are made ?
Of course you will understand that these bonds were not paid off in gold coin, because this Government never had the power of raising quarter of the necessary sum. The trick was performed by substituting bonds which were made to run for a long period – interest and principal payable in coin. There is not a man in the United States that can show any proper grounds for this conversion of bonds. There has never been any justification of the Act attempted. Mr. McCullough's emigration from this country, and occupancy of a presidential chair in a London banking institution since that infamous transaction, may explain the substantial influences which guided his course in that matter.
But, Mr. President, I had commenced to show the effects of contraction on the country. I have already said that Congress had to interpose to check the ruin threatened in every part of the land, and I propose to enumerate some of its acts since 1868, that you may know that its sympathy for the people is spasmodic, and of short duration; and that, for some cause which you are at liberty to interpret, that body of representative men continue to misrepresent the wants of the nation, and mischievously conspire to rob the people, and destroy the public credit.
Mr. President, I know that it will seem incredible to you, and perhaps to all who hear me, when I state that these machinations of the money powers to rob the people and defraud the Government were inaugurated and in active force during all the time of the nation's struggle to maintain its existence, and, professedly, by men who declared themselves loyal to the Government !
One of the first Acts of Congress – and from the date of that Act to the present day has Congress, by various devices played into the hands of bondholders, domestic and foreign, in not only enabling them to purchase the bonds of the Government at the lowest possible price, but also to secure exemption from taxation. On whom could the nation rely to husband the resources of the State, and carefully guard its sacred interests, if not upon the nation's representatives, and the heads of the departments of the Government ? Do you not contemplate with profoundest amazement, this unmitigated perfidy on the part of men occupying exalted positions of public trust ?
"What!" say you "these men conspiring with the unconscionable oligarchs of the country to break down the credit of the nation, at a time when its very existence trembled in the balance with doubt and uncertainty ? "
Well, sir, your angry eyes may flame at this rehearsal, because you, sir, know how faithfully I have related this history; and when I tell you that these traitorous conspirators, plethoric with stolen gain, at the period when contraction had commenced, continued and still exercise their schemes of villany against the welfare of the country, you may swear, if you will, that your pen and voice shall labor to expose and damn them, while you live.
On the 14th of January, 1870, an Act was approved which provided for the refunding of the national debt. The first section of this Act reads as follows : "The Secretary of the Treasury is hereby authorized to issue, in a sum or sums in the aggregate of $200,000,000, coupon or registered bonds of the United States in such forms as he may prescribe, and of denominations of $50, or some multiple of that sum, redeemable in coin of the present standard value, at the pleasure of the United States, after ten years from the date of their issue, and bearing interest payable semi-annually in such coin at the rate of five per cent per annum [this limit was subsequently increased to $500,000,000]; also a sum or sums not exceeding in the aggregate $300,000,000, of like bonds, the same in all respects, but payable at the pleasure of the United States after 15 years, and bearing interest at the rate of 4½ per cent per annum."
Here we have an aggregate of $800,000,000 of bonds authorized to be issued by one Act of Congress, to be paid principal and interest in coin, which at that time (1870) consisted in silver and gold. It was not until three years afterwards that the "infamous" Act demonetizing silver was passed.
See, if you will, with what diabolical method the money combination conspired against the credit of the Government, and for the subjugation of the people. Observe if you please, the skillful employment of means to put this country in financial and commercial accord with Great Britain.
In 1870 they stipulate for the payment of bonds, principal and interest, in coin of the then standard.
In 1873 they demonetize silver coinage – taking from us one half of our resources for payment.
In 1874 they clinch their infamous scheme by the passage of an Act authorizing the Revised Statutes of the United States, wherein the compilation of the Statutes was made to show that there existed no law for the coinage of a legal tender silver dollar, and inferentially, therefore, that no coin was legally recognized in the United States but coin of gold.
I ask you to give heed to what these conspirators did in 1873, in the way of demonetization. After twelve years of uninterrupted scheming against the interests of the people and the national credit – after giving to the nation a sound currency, and thereafter summarily enacting a law which put a limit on its use; after depriving the nation even of the power to utilize it in the payment of interest; after the enactment of a law to retire this currency from circulation, without substituting something in its stead, of equal value; after piling up an immense bonded indebtedness, and promising and contracting that it should be paid, principal and interest in coin of gold and silver; after demanding that these issues of the nation shall be redeemed in coin then, to cap the climax of their villanies, by a surreptitious introduction of a bill in Congress, ostensibly authorizing the coinage of the trade dollar, but absolutely demonetizing the silver coin of the nation, it would seem that the utmost achievement of the money combination had been reached.
This last was a scheme intended to deprive this nation of at least one-half of its coin resources, and thereby make it impossible for the Government to meet the accruing interest on its bonded debt.
This villany was concocted in Great Britain, and its trusted messenger (Mr. Ernest Loyd) presented himself in Washington and held private conference with Mr. John Sherman, then chairman of the Senate Finance Committee, and other distinguished scoundrels; and at an hour when the nation was asleep, the damning deed was perpetrated. You would like to know the demons who did this dark deed. You wonder how it could have passed both houses of Congress, and receive the indorsement of the President of the United States, without one demurring voice.
You ask, "Can such things be?" I answer, that is the law which for four years has disgraced the Statutes of our country; and although there are none who are willing to say "I did it," the power of the money oligarchy is so potent, that a majority of both Houses have not yet been found who were disposed to under-take the repeal of the most atrocious law that was ever framed by man.
The coming Congress may undertake to re-monetize silver; and I desire, right here, to tell you how the gold ring will fight the bill. They will attempt to limit its legal tender power to $10. They will tight this limit all the way up to $50, and possibly to $100, and if they do not succeed in debasing the coin and restricting its use by a limitation of its legal tender property, they will attempt to restrict the sum of its coinage.
I have still further to state, that if silver coin is not made a full legal tender, it is not money ! and that, if made a legal tender, and an equivalent for gold, its quantitive relation to gold must be established by the Government : and further, that if there is any restriction whatever put upon the amount of coinage, the Government, nor any power on earth, can maintain the quantitive relation.
These sharp men who will oppose the measure know this full well; and if Congress fails to comprehend this plain law of the subject, the victory will be incomplete, although nominally made an unlimited legal tender.
The policy of resuming specie payment is put forward by those who find their profit in disaster. Nine thousand failures in 1876, and the proportion and promise of 15,000 in the present year, where only 450 per annum occurred before the contraction outrage had commenced, tells the sad story of a people's wrongs, in language that may be understood. The hundreds of thousands of people unemployed – the poor and starving multitude perishing for lack of bread – the languishing industries and disheartening outlook on every side – bid us pause, and ask with profound seriousness the question, "Is there no remedy for all this affliction ? "
We, who have called this Convention to meet in this hall, believe in the omnipotence of united human will : and we take this prominent step in the expectation of being able to present to you, and to the people of this State, some views upon the subject of monetary finance which shall commend themselves to your understanding. In a popular Government like ours, a change of policy, and a redress of wrongs upon the people are first inquired into by the people, and when understood the remedy rests with the people. When the representatives of the people become corrupted, or fail to perform the high and responsible trusts confided to them, it becomes part of the duties of every citizen to join and to accomplish the removal of unworthy public functionaries from their places in the Government, and to substitute better men in their places. Preparatory to such a step, I have asked your attention to the financial legislation of the last century. It is a true history, and you cannot have failed to observe its effects upon the country, and to charge the causes therefor where they belong. That you may not object to the demolition of an old system till a better is presented to take its place, we have thought it wise to present to this body a simple and, to us, a greatly improved plan for the monetary provision of the Government.
The State Executive Committee of the National Currency Party of California, with whom I have the honor to find a seat, have with great calmness of consideration evolved the system of finance enunciated in our platform. I shall endeavor to show you the consistency, propriety, and advantage of every section, in as condensed argument as it is possible for me to make at this time.
The first section of the platform reads as follows :
Resolved, That we demand the immediate repeal of the Resumption Act; also, the repeal of the National Bank Act, and the issue of a national currency (a legal tender) by the Government, consisting of gold, silver, and paper, with one standard, and of equal purchasing power."
We demand the immediate repeal of the Resumption Act, 1st, Because "resumption" means "redemption," or conversion of the paper money of the nation into coined money. This is demanding of the Government the performance of an absolute impossibility.
2d, The Government cannot possibly obtain gold coin in sufficient quantity to redeem its paper issue outstanding, and it dare not attempt the further contraction of the paper issue to correspond with the sum of coin attainable. With the monetizing of our entire silver production it could not be accomplished in less than nine years, were the Government enabled to control the coinage of both metals for that time; and were the Government capable of controlling and accumulating the entire gold production and coinage from this time henceforth, the necessary sum could only then be raised within a period of 16 years,
3d, There is not in our annual gold and silver production (were it all coined into money) half of the sum necessary to pay the annual interest falling due upon our foreign indebtedness alone. The prospect of accumulating a sum equal to our paper currency must, therefore, appear unpromising and illusory.
The suggestion of redeeming the Greenbacks in silver coin of a "limited legal tender" is a proposition to commit a fraud, and had not better be attempted a second time. The scheme of resumption, as called for, is therefore impracticable upon any rational hypothesis.
We want no more "poverty money." The repeal of the National Bank Act is asked for because we do not believe that Congress has the right to delegate to banking corporations the right to issue money or a substitute for money. Congress alone has the power to issue money and regulate the value thereof to issue bills of credit, etc.; and if the States are denied the privilege, there can be no justification for the farming out of these privileges to corporations, bodies, or bureaus not recognized under the constitution of the United States.
It is perhaps very late to raise the question of Congressional authority, since other governments, as well as our own, have made the practice common, if not respectable. History informs us, that the exercise of these sovereign powers (so transmitted once created an East India Company – carried dismay, desolation, and death throughout one of the largest portions of the habitable globe – a company which became in itself a sovereignty which subverted empires and set up new dynasties, and not only made war, but war against its legitimate sovereign !
Under the influence of these delegated powers, these grants of special privileges the South Sea Company, and the Missisippi Company, and a thousand other companies of lesser fame, have been projected by sovereign power, to filch from the people their hard earnings on the one hand, and to assail the credit, and sometimes the life of the power that gave them birth, on the other.
Mr. President, I am of the opinion that money begets a power, by concentration, sufficiently dictatorial, dogmatic and despotic, without granting to that power the functions and attributes of sovereignty.
The National Bank power has become potential and dictatorial in all the legislation of the country. It is time that the Government severed all connection with these arrogant children of its folly. They are conspirators against the happiness, welfare, and prosperity of the Government, and they perform no service for the State that were not better done by the constitutionally authorized departments of the Government.
There are several demands in this first resolution of ours. The last is, "A National Currency (full legal tender) issued by the Government, consisting of gold, silver, and paper, with one standard, and of equal purchasing power."
It has been, by some persons, considered impossible to make those kinds of money of an equivalence of value. To rightfully comprehend this subject, the functions and power of money must be explained. Money, or currency, must be lawful, secure, and a legal tender. It must be created by the highest authority. It must be unchanging in value, to make it useful and secure. It must be a legal tender, that its acceptance for debt shall be compulsory and not optional.
Equality of service in the field of use establishes equivalence of value. The legal tender is the special quality given to money to make it supreme, and to make its acceptance unquestionable. There must be no denial, and no limitation of this power. To grant to one kind of money a power denied to another kind, destroys the equivalence of value, and practically demonetizes the kind made deficient in power of use.
You will perceive, therefore, the cause that makes Greenbacks of less value than gold coin gold coin being a full legal tender, and Greenbacks limited. Silver coin being restricted in its field of use by the limitation of its tender to $5 payments, is also demonetized, debased, and not properly money, and therefore of less value than gold coin.
The three kinds of currency, therefore, made equal as a tender, become equivalent in value and use; and it is the fault of the Government if all the (so called) currency in circulation, not a full tender, is not worth as much as gold. We ask you if we are not right, then, when we demand three kinds of money each a full legal tender and of equal purchasing power.
" Resolved, That we demand that the paper currency shall be distributed directly to the people, on their securities, to be named by Congress, as, United States bonds, bullion, etc, at a tax rate not exceeding 3 per cent, per annum."
We believe that the privilege of obtaining money from the Government should be free, and open to every citizen of the republic, who can command the securities.
The distribution of the currency of the Government rests primarily with Congress, and we are opposed to special legislation and the granting of special privileges to a privileged few. Under the influence of wealth, the control of this great privilege has been transferred to a conclave of capitalists, who seek to use this valuable franchise, against the interests of the people, whom the Constitution intended it to serve.
First, The National Bank ring obtain from Congress the right and privilege to bank upon a charter granted by the Government, and so arranged the matter, that the Government provides them with the money, without interest, in a sum equal to three hundred and fifty million dollars.
Second, This privileged class influence a legislation in Congress, which orders a recall or subsidence of the legal tender Greenback.
Third, They induce Congress to demonetize the silver coinage of the nation.
Fourth, They are enabled to pass an Act through Congress calling for resumption, without any adequate provision for such performance, and finally insist upon making gold coin the only bases of money.
This has been the kind of legislation in this country for the last fifteen years.
The people receiving the money of the Government in good faith, projected the various enterprises on the basis of the Governmental provision of paper money, and upon the supposition that the volume of supply was necessary because it was accorded to them, and would not be recalled, entered upon their various avocations with well-grounded expectations of a continuance of the supply; when suddenly the revulsion conies down upon them, and sweeps their earnings, their shops, and all that belongs to them, into the abyss of the money ring. In the distress, the wreck, and ruin which ensues, the people look for an explanation of the causes of disaster.
They do not find it resulting from any acts of themselves. They have been prudent, economical, and industrious, and honestly anticipated success. Why, then, this ruin ? When told that it is the work of their representatives in Congress, they stand in doubtful amazement, and protest against the statement. They are asked to read, and to their reading and examination give reflection; and slowly do they come to realize that all this terrible retrogression is the result of purchased legislation in behalf of the money rings of the country that the money supply, which they accepted in good faith, is being contracted, and for no purpose whatever but to serve those organized bands of the money powers, into whose hands the Government has transferred the privilege of the money supply, to be regulated henceforth upon such terms as will best serve their interests, and most effectually cripple the industrial energies of the country.
To this infamous transfer the people should, for their own sakes, protest with a voice that can be heard over the land; and their action should be such that no more mercenary wretches should find a seat in the Congress of the United States. Some writer, from whose article I find valuable hints on this subject, has said, "Suppose the Government should find it necessary to regulate the manufacture of all the plows required in the country, and instead of selling to those who must have the plows, should place them in the hands of those only who are able to buy 10,000 at a time; and these gentlemen should live and grow immensely rich by loaning the plows to the farmers for a large percentage of the crop produced – how long would that sort of legislation be sustained ? " Yet this is precisely the character of legislation which Congress has made in relation to the currency of the country. It is even much more aggravating, because the supply and rate of interest charged for its use is left entirely in the hands of those who profit by extortion.
We say, away with this patent right of the money powers, and a thorough reformation of the practice of the Government in these matters
Resolved, That the form of the paper money issue of the Government shall be of the same significance as coined money; not a promise to pay, but a bill receivable for all Government dues, and a legal tender without limit.
What ! (you would ask) a paper money without the promise of payment or of redemption ? And we calmly reply, that we want money, and not notes which promise to pay. Gold coin carries not upon its face a "promise to pay." Silver money is not issued with any such promise attached, and yet it is receivable everywhere; why, then, should the paper money of the nation be impaired in its value, by the very condition which in itself demonetizes it ? A note (national, corporate, or individual) is an express obligation to pay money.
Are Governments, at this day, to be taught that it is their prerogative to make money, and that, by virtue of that right, they are not held to the same condition which enforces private corporations or individuals to attach a promise of payment to an issue intended only as a substitute for money ?
This being a new feature in money a new proposition touching its form I shall ask your attention to what I say in relation to it; for I declare to you, that the Government can more consistently give to paper money this form – "Money of the United States" ($10 for instance) than to attach to it the usual form of a "promise to pay."
I shall endeavor to prove to you that such form of issue would be money, and more valuable and less objectionable than that of the Greenback or the National Bank note. And I shall make it very plain, that it is eminently the policy of the Government to adopt the form we have intimated; that is, paper money – a bill receivable, not payable – endowed with the legal functions of money, exchangeable for all commodities, and a tender without limit.
In the first place, it is not consistent with the power and the dignity of the Government to put in circulation among the people anything as money that is not money. A note which bears upon its face the promise to pay money, cannot be in itself the thing it promises. If it be held that the Government only issues the currency, of the present form, as a substitute for money, I shall take the hazard of declaring that its financial heads may be better employed than to follow the form and ex- ample set by banking incorporations, by which the people have been egregiously misled and swindled for more than a century.
The Government has given to us the form of gold money and silver money – why not of paper money ? I do not mean promises to pay, for that is not money; I mean paper money in fact, in substance, in acknowledged power, and essential use.
I believe the Government has made a grave mistake in the issue of bills payable instead of bills receivable. The Constitution declares "that Congress shall have power to coin money, and regulate the value thereof, and issue bills of credit."
Congress has issued only bills debit, when it should have issued bills of credit; bills payable instead of bills receivable: and the difference to the country is incalculable. A bill receivable – a bill of credit, receivable for all dues public and private, and a legal tender without limit – would constitute the best form of paper money conceivable. The exigency of demand for coin to provide for its redemption could not have arisen. Indeed, it may be safe to state, that Congress has misunderstood the plain letter of the Constitution; and when it shall realize this fact, we may hope for a form of paper money asked for in our platform.
Is invention and discovery at an end in the creation of money ? Did our ancestors, 3,000 years ago, hit upon the utmost stretch of thought upon this subject ? I do not believe it, any more than I believe that gold and silver should recede in value, to what it was reckoned before it came to be used as a monetary medium.
I think I may as well state here, that I believe the time is not fur distant when there will be a general expression of amazement at the tremendous stupidity of the world, for so long a time ignoring the rights and representative value of labor, by holding so tenaciously to metallic money as the inflexible measure of wealth.
I have said to you, that the legal tender power of money is the property or function which makes money supreme. I should add that only the supreme power is capable of endowing paper money or metal money with these functions.
As money does not depend upon the material of which it is made, but upon the power placed upon a material substance by law, may not that power placed upon a piece of paper, make it as potential for commercial use and exchange as it is when placed upon pieces of silver and gold ?
If it be so, are we not making a discovery in economic science ? If sovereignty becomes manifest in its imprint on a piece of paper, is there any necessity for calling to paper money the basic support of gold or silver coin? Is it not something of promise for our progress if we utilize the powers of sovereignty, in the creation of paper money as well as in our coinage ? Why need we continue to be broken upon the wheel of the despot ? Why shall the Government confine its power to limitations that destroy it, and subject its citizens to crises and panics without end ?
Why may we not make a new declaration of independence rise one step higher in financial ethics, and cast aside for ever the Juggernaut of a specie base for money ? I do not mean to discontinue the coinage of gold and silver; because these should constitute a part of the money of the country. But make it into money as far as those metals can be utilized; and never more permit gold and silver coin to form the base of anything more than it represents in the sum of a necessary currency supply.
Were there no gold and silver coin in the country, the Government would undoubtedly possess the power of providing the nation with a currency of some other material, answering the demands of exchange and use. What rational argument, then, can be interposed to prevent the Government from adopting a paper money, where gold and silver is clearly admitted to be insufficient. All banking issues of a substitute for money are simple projects to supplement the volume; and, to the extent of such issue add to the demand for the only real money of the Government.
While bills "payable" are made to take the place of money in circulation, they amount only to an extension of the system of credit, which may be attacked any time by a demand for payment, which is absolutely impossible if urged by a general application. The issue of Greenbacks was considered to be a legal and proper effort to supplement the volume necessary for the country's uses; and in this experiment, crude and unreal as the effort was, the people were taught the value of the words "legal tender," by the service which this substitute for money rendered to the country.
Now, suppose the national notes (Greenbacks) had been issued in the form of money, and there had been no "promise to pay" – a full legal tender, unrestricted in its field of use do you think it would have been rejected by the people ? I shall show you that such a result need not have been apprehended.
Suppose the issue had been of the description we advocate, would there ever have been a demur to it on account of the lack of promised payment which the Greenback gave ? Would not its exchangeability have made it equivalent to redemption in every service demanded of it ? Would there ever have arisen a demand for redemption ? Would there have existed any difference in its purchasing power compared with gold and silver coin ? Would there have been any necessity for contraction, or any pretext whatever for lessening the volume, until the rate of interest had receded below 3 per cent, per annum – at which rate money should be had all over the United States.
Can you not begin to perceive that money of this class would have been more valuable, because fulfilling a wider range of use, and subject to no contingencies of payment, than any note bearing upon its face the promise of payment, which it was absolutely impossible to fulfil ? Would it not have possessed all the advantages of money, over any "promise to pay ?" And do you not perceive that the Government, and the bonded debt which it struggles to pay the interest on, would have been relieved of more than one-half of its present sum; that the burden of taxation would have been greatly reduced; that there would have been no contraction, and no panic, and no wide-spread distress and commercial disasters to record, and no enforced and wretched idleness among the laboring arms of our country.
Should not the country be guided by a policy that would save to itself so much ? Would it not be well for it to heed a plan which would so effectually relieve it from the exigencies of demand for gold even to the extent of its outstanding notes ?
I have said the Greenback answered temporarily a beneficial purpose. Could it have rendered the service it did, had it been deprived of the legal tender power given to it ?
See, if you will, how near the Greenback came to realizing what we claim for our irredeemable form of currency, shorn as it was of an important part of its power and use. Restricted as it has been and continues to be, the people continue to ask for more of it, to protest against the contraction of its volume, and to maintain that it is the best paper money that has ever been distributed among the people. If the Greenback proved acceptable to the people, can you suppose it was because there was engraved upon it a "promise to pay ?" Or was it not because the Greenback was made a legal tender in most of the transactions and trades of the county. This shows most plainly that it is the legal tender power that is required to make it money, secure, and of full measure of use. Equality of use establishes equivalence of value.
Again we say, that money is a device of man, for rendering an indispensable service to man. Why, then, shall man put upon it a limitation which shall abridge its power, and deprive it of essential use to him ?
There are those present who have read about the irredeemable money that was issued by the Bank of Venice, and which for four hundred years was preferred by the people of Venice to gold and silver coin.
This paper money of the Bank of Venice was issued as a bill receivable – a bill of credit, legal tender – as gold coin for every, thing. The accumulation of gold in that bank became so great, that discount upon it was submitted to for many years, when exchanged for their irredeemable notes; for the reason, that the notes were as useful as gold and silver coin, and far more convenient to handle and transport It would seem that 400 years' experience with an irredeemable paper currency should be proof of its excellence.
To further demonstrate the value of an irredeemable paper currency, I call your attention to what it has done through the Bank of France, under the authority of the French Government. The Minister of the Exchange of France ordered an issue at first of six hundred millions of francs, irredeemable currency, but a legal tender without limit, which were accepted by the people. When this issue was distributed, gold coin was raised to a premium of 2 per cent only. Soon after, eight hundred millions francs more were issued, and passed into circulation among the people. Gold fell to one per cent premium. After the next six hundred millions were issued, these irredeemable bills arrived at par with gold coin. The inference of confidence is undeniable.
The volume of issue under French authority was near three billion four hundred million francs, at which point the Government discontinued further issue; and to this day gold and silver, and the irredeemable currency of France, have stood upon an equality of favor and equivalence of value.
The result has amazed every one who has failed to estimate the power of a full "legal tender."
This experiment of France has taught the world the unimportance of a metallic base for money. Instead of driving all the gold out of France, as some maintained it would do, it became the means and active cause of attracting gold to France; and now, after the invaders of France have been paid their tribute in gold and departed to their own land after keeping her industrious arms employed and happily occupied – this crippled nation of a few years ago looms up into power again, and publishes to the world that there stands already in the Bank of France, to the credit of French industry and French Financial wisdom, 3,400,000,000 francs in gold and silver coin – a sum greater than is possessed by England, Austria, Russia, and Prussia combined. While this great sum was being earned by industrious France, the Prussian subjects of Emperor William have been suffering from the efforts of that Government to confine itself to a strictly gold standard.
And while this great work of reconstruction and recuperation was going on in France, what do we perceive in our own country ? In all this time, while another nation was so profitably employed, our own Government was fruitlessly endeavoring, under the pressure and scheming of the gold ring, to resume specie payments one of its acts being distinguished for the atrocious demonetizing of silver coin, and otherwise enacting such laws, so oppressive to all the industries and enterprise of the land, that the wreck of the country seems complete.
As before said, men of observation declare that the losses of the people, consequent upon our financial policy, aggregate a sum far greater than the cost of the late war to both the North and South.
Are we not justified, then, in repeating that we cannot longer sustain a Government policy resulting in a greater waste and loss to the people and Government, in times of peace, than have ever occurred in time of war ?
To sum up this part of our argument, we say – we want no more apocryphal money – no more money requiring a redeemer. We want money to represent truth, absolute, and understood, to fill the perfect measure of a value fixed by law. We are opposed to all substitutes for money, promising redemption in metallic money. These substitutes are simple extensions of credit – one part coin, nine parts public confidence. They are drafts upon the impossible – a delusion, a snare, a spider's trap, set to catch the unwary – a theocratic device, to produce a plutocratic effect – a devil's gospel, to mislead – a plexiform plot, to overreach, disturb, confuse, destroy, betray in short, a capitalistic fraud, begotten of mercenary instincts on the one hand, and superstitious ignorance on the other.
No man can safely engage in business while the system of a specie base is in force. National prosperity can never be secured while this Anglo-American octopus is allowed to live, and spread its voracious tentacles over the land.
This is our opinion of any (so-called) money requiring a metallic redeemer.
Resolved, That the quantitive relation of gold and silver shall be fixed at 1 to 16; that silver be coined principally into dollars of 412½ grains, the same as before demonetized; and that fractional coins of ten cents and upwards shall posess proportionate bullion value.
Gold and silver are metals of widely different value. Heretofore our Government established the quantitive relation of these metals, for the purposes of coinage into money, upon a standard of valuation of 1 to 16; which was maintained by it until 1873, up to which time gold continued interchangeable for silver without interruption, at these rates. Silver dollars contained 412½ grains (standard) in each of its dollar pieces. It was a legal tender in any sum, and being unrestricted in its use and power, its equivalence of value with gold was undisputed. I have shown you the law which was passed through Congress in 1873, demonetizing the silver dollar, and have adverted to the effect of that measure upon the country. While we propose to eliminate from our currency the basal dependence upon gold and silver, we do not propose to do away with the coinage of these metals by any means. On the contrary, we want silver coinage, but we want, it to be money – that is, a legal tender in any sum, unlimited in its powers and unrestricted in the quantity that may be coined – the same as gold money. We maintain that Congress has no right to make a distinction in the powers of its money issue. If silver be not so utilized, its quantitive relation to gold cannot be maintained; and we urge upon the Government that it make no further mistake in its coinage laws.
We also believe that its fractional currency, of whatever kind, should be equally a legal tender, wihhout limit; and that our small coins should be of equal proportionate bullion value with the dollar unit removing thereby all apprehension of loss by changing the ones for the other.
We now come to what we believe will properly determine the volume :
Resolved, That for the purpose of establishing a proper flexibility, accommodation and regulation of the volume of the currency, any money of the nation may be interconvertible into Currency Bonds of the United States at 3 per cent, per annum tax, at the option of every citizen, whenever and after it shall appear that money of the Government has been provided in such volume that it can be borrowed in any part of the United States at 3 per cent, per annum interest, from citizens or banking corporations. We demand that all such bonds so obtained shall be taxable, as other property, for State and national support, in the hands of the holder.
You will perceive in this resolution a disposition to provide against a redundant issue of money, and to determine the volume by the only method admissible or consistent with the law of "demand and supply." The rate of interest for the use of money should not exceed the rate of production in a country; and it is fair to fix the rate of interest at three per cent, per annum. That being the maximum rate, the Government may logically determine the volume by such issue as shall enable any citizen of the Republic to borrow upon approved security at the percentage named, I have said, in my contribution to the U.S. Monetary Commission, "that the rate of interest demanded for the use of money is the proper measure of the supply of it;" and I cannot conceive of any other rule or law for determining the necessary volume, at all comparable with the method I have enunciated.
If bonds are made interconvertible at any time before such a condition is reached, the volume of the money supply may be regulated at will by those whose interest it is to perpetuate a higher rate than we have recommended.
By our method contraction of the volume cannot be accomplished to such a degree that more than three per cent, shall be demanded; and the flexibility which we would establish applies only when, by any cause, money shall be so plentiful that it cannot be loaned for three per cent.
This plan would afford to the nation a volume equal to its need, yet not in excess of it. Our people would then occupy a position of equality with other nations, upon the question of interest; and I believe, with that condition attained, we shall be enabled to produce and manufacture for the world. Trade and the industries of the country would become properly protected, and money panics no longer of possible occurrence. We make it a point to secure these privileges to every citizen, believing that the Government should be impartial in its favors – that it is more just than its late dispensations to a select few, who make sharp practice and greed the animus of their lives.
Under a Government which boasts of its laws requiring that "taxation shall be equal," we cannot perceive either the justice, propriety, or consistency of making property in bonds exempt from taxation.
I will now call your attention to the next resolution, to wit : " That the entire gold and silver production of the country should be coined into currency of the United States."
I am in favor of this resolution because I desire to have these productions of our country utilized in their best form of service. Our obligations to pay coin are so considerable, that if the nation neglects its plain duty in this matter, the supply of coinage for our needs might become, as now, very difficult of attainment.
I cannot perceive any hardship or injustice to any citizen of the republic arising from a law embodying this resolution; and the advantages to the Government and people seem so manifold, that further discussion of it is deemed unnecessary at this time, and I will proceed to the following resolution :
Resolved, That the Treasury Department, or a Bureau of Finance which may be hereafter established, should become the repository of the gold and silver bullion production of the country, and the dispensing and issuing agency of the currency of the Government.
This resolution is designed to place the currency of the nation in the hands and under the control of the most responsible and duly authorized department of the Government. We desire that the Government shall sever its connection with any and all banking institutions and corporations, of any kind; and we distinctly declare our abhorrence of the practice of the Government of projecting banking institutions, and other like agencies, to act between the Government and the people. The experience of the last sixteen years has taught us, that they are as unsafe for the Government as they are merciless in their schemes to subjugate the people.
The following resolution is the last of our financial planks deemed necessary at this time to refer to, and I read it to you in the belief that you will accord to it your unqualified approval :
Resolved, That we earnestly protest against the further issue of Government bonds for any purpose, except they be made payable in the currency of the United States.
The interest on our bonded debt (mostly held in England), payable in coin, amounts to a sum considerably more than our total annual production of gold and silver. The annual interest payable in coin to England on our Railway Bonds, amounts to about the same sum. Annual Commercial demands against us may be estimated at near 60 million dollars. And the coin provision, or equivalent, which has to be made for those of our countrymen who air their dignity in foreign countries – whose families mostly reside in Europe, and spend their money and educate their children there – aggregates a sum not less than 60 millions per annum. Now, the sum total of all these requisitions upon us for coin is so considerable, that after paying 50 millions for subsidiary coinage, and a few pieces for the special gratification of the Pacific Coast hard-money advocates, I find myself quite at a loss to understand in what manner the necessary sum shall be raised to meet the interest on our public debt alone.
The motto placed on our gold coin – "In God we trust" signifies the utter insufficiency of it to answer the nation's need : hence our plan to escape the snares of a credit system.
The Executive Committee of the National Currency Party, who submit to you this resolution, deem it especially important for you to consider; and would suggest through you to the Government, that the interest promised upon any future issue of bonds shall be made payable in something which it is possible for the nation to provide. It is not at all probable that the Government will heed this protest, and prudent suggestion, this year, on account of the influence of one hundred and ten banking members of Congress, who are interested in opposing any reform whatever of our financial policy. I must therefore conclude my address this evening by asking every one of you, who agree with the principles of the National Currency Party of California, to commence the organization of clubs, in whatever town or city you reside, and discuss these questions among yourselves, and be prepared to render efficient service in those efforts of financial reform so absolutely essential to the welfare and happiness of the people, and the restoration of the Government into the hands of honest and capable men.
Those who are honestly exerting themselves in Congress to restore the silver dollar to its former status, should be sustained by the manifest approval of every citizen of the Pacific Coast States.
And those who have so long and faithfully worked to inaugurate an improved system of finance for our common country stand in need of your encouragement, and should be strengthened by expressions of your confidence and favor.
Fellow citizens, I beseech you to take courage. Cast aside all partisan predilections, and join the only party that mean exactly what they say, and who are working practically to accomplish the greatest good for the greatest number.