V.FINANCIAL AUTHORITIES.
“Above all things good policy is to be used, that the treasures and money of the state be not gathered into a few hands; for, otherwise, a state may have great stock and yet starve. And money is like muck, not good unless spread. This is done by suppressing, or at least keeping a strait hand upon the devouring trade of usury, engrossing, great pasturages and the like.”—Bacon.
THE following is a carefully prepared collection of quotations from the writings and speeches of eminent statesmen, jurists, financiers and economists, ancient and modern, foreign and American. It will be found not only interesting and instructive to the casual reader, but of extreme value to the student for reference:
Alexander Hamilton(report on the mint, 1791): “To annul the use of either of the metals as money is to abridge the quantity of the circulating medium. It is liable to all the objections that arise from a comparison of the benefits of a full with the evils of a scanty circulation.”
Benjamin Franklin, April 3, 1792 (Jared Sparks, page 255): “Want of money in a country reduces the price of that part of its products which is used in trade. A plentiful currency will occasion the trading produce to bear a good price.”
Page 185 of his autobiography (speaking of his pamphlet on “The Nature and Necessity of a Paper Currency,” for the purpose of increasing the circulation): “It was well received by the common people in general, but the rich men disliked it, for it increased as well as strengthened the clamor for more money. The utility of this currency by experience became so evident as never to bemuch disputed, so that it grew soon to be £55,000, and in 1879 to £80,000, since which it rose to £350,000, trade, buildings and inhabitants all the while increasing.”
Daniel Webster: “A contraction of the currency, even if not sudden, contracts business, discourages enterprise and restrains the commercial spirit. A sudden contraction aggravates these circumstances.”
Henry Clay(debate on the sub-treasury, 1840): “The proposed substitution of an exclusive metallic currency to the medium with which we have been so long familiar is forbidden by the principles of eternal justice. Assuming the currency of the country to consist of two-thirds paper and one of specie, and assuming, also, that the money of a country, whatever may be its component parts, regulates all values, and expresses the true amount which the debtor has to pay his creditor, the effect of the change upon that relation, and upon the property of the country, would be most ruinous. All property would be reduced in value to one-third of its present nominal amount, and every debtor would, in effect, have to pay three times as much as he had contracted for. The pressure of our foreign debt would be three times as great as it is, while the six hundred millions, which is about the sum now probably due to the banks from the people, would be multiplied to eighteen hundred millions!... A man, for example, owning property to the value of $5,000, contracts a debt of $5,000. By the reduction of one-half of the currency of the country, his property in effect becomes reduced to the value of $2,500. But his debt undergoes no corresponding reduction.... But if the effect of this hard money policy upon the debtor class be injurious, it is still more disastrous, if possible, on the laboring classes.... Of all the subjects of national policy, not one ought to be touched with so much delicacy as that of the wages—inother words, the bread—of the poor man. In dwelling, as I have often done, with inexpressible satisfaction, upon the many advantages of our country, there is not one that has given me more delight than the high price of manual labor. There is not one which indicates more clearly the prosperity of the mass of the community....
“The revulsions of 1837 produced a far greater havoc than was experienced in the period above mentioned. The ruin came quick and fearful. There were few that could save themselves. Property of every description was parted with at sacrifices that were astounding, and as for the currency, there was scarcely any at all. In some parts of the interior of Pennsylvania the people were obliged to divide bank notes into halves, quarters, eighths, and so on, and agree from necessity to use them as money. In Ohio, with all her abundance, it was hard to get money to pay taxes. The sheriff of Muskingum County, as stated in the GuernseyTimes, in the summer of 1842, sold at auction one four-horse wagon at $5.50; ten hogs at 6¼ cents each; two horses (said to be worth from $50 to $75 each) at $2 each; two cows at $1 each; a barrel of sugar at $1.50, and a store of goods at that rate. In Pike County, Missouri, as stated by the HannibalJournal, the sheriff sold three horses at $1.50 each; one large ox at 12½ cents; five cows, two steers and one calf, the lot at $3.25; twenty sheep at 13½ cents each; twenty-four hogs for 25 cents for the lot; one eight-day clock at $2.50; a lot of tobacco, seven or eight hogsheads, at $5; three stacks of hay at 25 cents each.”
Horace Greeley(“Political Economy,” page 65): “They [false economists] assume that if half the money in a country leaves it for goods imported, the residue will perform the functions previously devolved on the whole, save only that there will be a general reduction of prices. I, onthe contrary, issue an appeal to the experience of mankind to sustain me that in such cases the remainder, so far from subserving the end formerly answered by the larger volume of currency, will not even subserve half of it, for it will all but cease to circulate at all.... In its absence the people will quite generally be driven back to barter, a discouragement of industry and a long stride on the downward road to barbarism.”
Treasurer Spinner(that portion of his report for December, 1873, which was suppressed by President Grant): “When ... legitimate money becomes more and more abundant, credits are asked for and given on shorter and shorter time, until the time comes when there is money sufficient to transact all the legitimate business and to effect all necessary exchanges of the merchantable commodities of the country; then private credits will be almost entirely unknown, as will commercial revulsions and consequent panics.... Inflation can only be when the people are excessively in debt. Such is not the position when money is plentiful; for when money is plentiful people get out of debt and acquire habits of promptness, punctuality, and pay as they go.”
George S. Coe(“Financial History of the War”): “As the war progressed and the country became poorer, the currency increased. It is strange that all other property was eagerly sought for in preference to this, and that prodigal expenditure became the law of the land.”
Report of George S. Coe, John J. Knox, James Harsen Rhoades and W. P. St. John(committee of New York Chamber of Commerce, 1891): “The enlarged volume [of legal-tender money], besides disturbing the equitable relations of men to each other, at once adjusts itself to the prices of all commodities and relatively enhances their cost, so as to absorb at once whatever advances theircost.... This is why thoughtful men see in any issue of legal-tender notes the way to inevitable destruction.”
Robert G. Ingersoll: “We have passed through a period of wonderful and unprecedented inflation. For years every kind of business has been pressed to the very sky line. A wave of wealth swept over the United States. Tatters became garments and garments became robes. Walls were covered with pictures, floors with carpets, and for the first time in the history of the world the poor tasted all the luxuries of wealth. But monopoly changed that paradise into hell by creating a money famine.”
John J. Ingalls: “No people in a great emergency ever found a faithful ally in gold. It is the most cowardly and treacherous of all metals. It makes no treaty it does not break; it has no friend it does not sooner or later betray. In times of panic and calamity, shipwreck and disaster, it becomes the agent and minister of ruin. No nation ever fought a great war by the aid of gold. In the crisis of the greatest peril it becomes an enemy more potent than the foe in the field.... In our own civil war it is doubtful if the gold of New York and London did not work us greater injury than the powder and lead and iron of the rebels. It was the most invincible enemy of the public credit. It was in open alliance with our enemies the world over, and all its energies were evoked for our destruction. But, as usual, when danger has been averted and the victory secured, gold swaggers to the front and asserts supremacy.”
Hugh McCulloch, Secretary of the Treasury (1866): “The process of contracting the circulation of the government notes should go on just as rapidly as possible without producing a financial crash.”
John A. Logan(Feb. 17, 1874): “You may theorize and argue to the farmers until you are hoarse, and you will fail to get them to prefer low prices to high ones for theirproducts.... The people have and do realize that their most prosperous times were when currency was the most plentiful....
“I can see the people of our Western States, who are producers, reduced to the condition of serfs to pay interest on public and private debts to the money sharks of Wall Street, New York, and of ThreadneedleStreetStreetin London, England. And this will be accomplished by withdrawing the treasury notes from circulation, and destroying them until the banks can control the entire volume of money.... It was the contraction and increased want of currency, and not a superabundance, which produced the necessity for running in debt.
“Falling prices and misery and destruction are inseparable companions. The disasters of the dark ages were caused by decreasing money and falling prices. With the increase of money labor and industry gain new life.
“I can see benefit only to the money-holders and those who receive interest and have fixed incomes. I can see, as a result of this legislation, our business operations crippled and wages for labor reduced to a mere pittance. I can see the beautiful prairies of my own State and of the great West, which are blooming as gardens, with cheerful homes rising like white towers along the pathway of improvement, again sinking back to idleness. I can see mortgage fiends at their hellish work. I can see the hopes of the industrious farmers blasted as they burn corn for fuel, because its price will not pay the cost of transportation and dividends on millions of dollars of fictitious railway stocks and bonds.”
Preston B. Plumb(Senate, April, 1880): “The contraction of the currency by 5 per cent. of its volume means the depreciation of the property of the country three billions of dollars.”
The Chicago Tribune(1878): “Straight along for four and a half years the dollar has grown dearer and larger, the debts heavier and harder to pay, and the value of property has withered; business has been done at a continual loss. Real estate—lands, lots and improvements, the foundation of all wealth—has gone down year after year in value, while the mortgages have devoured it, wiping out equities and all that had been paid thereon, and annihilating multitudes of fortunes.”
President Grant(message, 1870): “Immediate resumption, if practicable, is not desirable. It would compel the debtor class to pay beyond their contracts the premium on gold at the date of their purchase and would bring bankruptcy and ruin to thousands.”
Message of 1873: “The experience of the present panic has proven that the currency of the country, based as it is upon its credit, is the best that has ever been devised.
“To increase our exports, sufficient currency is required to keep all the industries of the country employed. Without this, national as well as individual bankruptcy must ensue....
“Prices keep pace with the volume of money.”
John Sherman(1869): “The contraction of the currency is a far more distressing thing than Senators suppose. Our own and other nations have gone through that process before. It is not possible to take that voyage without the sorest distress. To every person except a capitalist out of debt it is a period of loss, of danger, lassitude of trade, fall of wages, suspension of enterprise, bankruptcy and disaster.”
William D. Kelley(House of Representatives, Jan. 3, 1867): “The experiment [on contracting the currency], if attempted as a means of hastening specie payments, willprove a failure, but not a harmless one. It will be fatal to the prospects of a majority of the business men of this generation, and strip the frugal laboring people of the country of the small but hard-earned sums they have deposited in savings banks. It will make money scarce and employment uncertain. It will increase the purchasing power of money, and by thus unsettling values will paralyze trade, suspend production and deprive industry of employment. It will make the money of the rich man more valuable and deprive the poor man of his entire capital, the value of his labor, by depriving him of employment. Its final effect will be widespread bankruptcy.”
Toledo Blade(May 17, 1877): “In financial crises the thing men want is money; that which everybody must receive in payment of debt or forever thereafter forego all claim of interest thereon. What men want in such seasons of panic and distress is that which will pay a note in a bank, will meet the exactions of government, will avert the sacrifice of homestead, warehouse or other property by sheriff’s or marshal’s sale; which, being money, will, when tendered in payment, arrest such proceedings.... The existence and inflexibility of the law are indisputable. If the volume of money is increased creditors complain that the prices of commodities are further enhanced.”
George William Curtis(Harper’s Weekly, July, 1877): “There can be no doubt that as the volume of money decreases the purchasing power increases.... It is unquestionably true that it is a maxim of money that the increase of its volume decreases and the decrease increases the purchasing power of the unit.... It may be a fair question whether the demonetization of silver did not increase the value of gold.”
Thomas Ewing(November 22, 1877): “No greater wrong can be inflicted on the people by government thana contraction of the volume of the currency. The prices of commodities, whether land, product or labor, are determined absolutely by the effective volume of the currency. An increase of the volume raises the price of commodities.”
James G. Blaine(House, February 7, 1878): “The destruction of silver as money and establishing gold as the sole unit of value must have a ruinous effect on all forms of property except those investments which yield a fixed return in money. These would gain an unfair advantage over other species of property.”
James A. Garfield(1880): “Whoever controls the volume of currency is absolute master of the industry and commerce of the country.”
Senator Mills, of Texas (House, February 3, 1886): “But the crime that is now sought to be perpetrated on more than fifty millions of people comes neither from the camp of a conqueror, the hand of a foreigner, nor the altar of an idolator. It comes from the cold, phlegmatic marble heart of avarice—avarice that seeks to paralyze labor, increase the burden of debt, and fill the land with destitution and suffering to gratify the lust for gold—avarice surrounded by every comfort that wealth can command, and rich enough to satisfy every want save that which refuses to be satisfied without the suffocation and strangulation of all the labor of the land. With a forehead that refuses to be ashamed it demands of Congress an act that will paralyze all the forces of production, shut out labor from all employment, increase the burden of debts and taxation, and send desolation and suffering to all the homes of the poor.”
Leland Stanford(Senate, March 10, 1890): “An abundance of money means universal activity, bringing in its train all the blessings that belong to a constantly employed,industrious, intelligent people.... Abundant and cheap money places the power in the hands of the industrious.... Cheap and abundant money means co-operation of labor to an extent hitherto unknown.... Would go far towards aiding his [labor’s] intelligence, toward realizing his highest destiny. It seems to me that the great thought of humanity should be how to advance the great multitude of toilers, increase their power of production and elevate their condition.... To me one of the most effective means of placing at man’s disposal the force inherent in the value of property is through furnishing a bountiful supply of money.... If money were suddenly annihilated from all business affairs there would be a general suspension of business all over the country. It is the duty of statesmen to furnish the means, if possible, to find out the way by which the Creator’s design for the highest advance of civilization is to be obtained. Want, discomfort and misery are not necessarily the heritage of the industrious and provident man. So far as I can ascertain, no government has ever attempted to furnish an adequate supply of money or establish any standard by which its want could be ascertained.”
John G. Carlisle(in the House, February 21, 1878): “According to my views of the subject the conspiracy which seems to have been formed here and in Europe to destroy by legislation and otherwise from three-sevenths to one-half the metallic money of the world is the most gigantic crime of this or any other age. The consummation of such a scheme would ultimately entail more misery upon the human race than all the wars, pestilences and famines that ever occurred in the history of the world. The absolute and instantaneous destruction of half the entire movable property of the world, including houses, ships, railroads and other appliances for carrying on commerce,while it would be felt more sensibly at the moment, would not produce anything like the prolonged distress and disorganization of society that must inevitably result from the permanent annihilation of one-half the metallic money of the world.”
John G. Carlisle(speaking for the Bland bill, 1878): “It will reverse the grinding process that has been going on for the last few years. Instead of constant and ruthless contraction, instead of constant appreciation of money and depreciation of property, we will have expansion to the extent of at least $2,000,000 a month, and under its influence the exchangeable value of commodities, including labor, will soon begin to rise, thus inviting investments, infusing life into the dead industries of the country, and quickening the pulsations of trade in all its departments.”
Secretary Windom(Jan. 31, 1891): “The ideal financial system would be one that should furnish just enough absolutely sound money to meet the legitimate wants of trade, and no more. Had it not been for the peculiar condition which enabled the United States to disburse over seventy-five million dollars in about two and a half months last autumn, I am firmly convinced that the stringency in August and September would have resulted in widespread financial ruin.”
Chauncey M. Depew: “Fifty men can paralyze the whole country, for they can control the circulation of the currency, and create panic whenever they will.”
Hon. G. G. Symes, of Colorado (commenting on the demonetization of silver): “There would be truly enough money to do the business after the shrinkage of prices and the financial disasters. For the new order of things and basis of values there would still be gold enough to carry on the business. It would only require one-half after the newcondition and basis was reached. The monometallists, then, would still argue that gold was not scarce.”
Henry Clews, Wall Street financier (March 16, 1895): “Wall Street keeps a quick eye upon the prospects of the suggested international silver conference. It sees in the adoption of a world-wide policy of bimetallism the certainty of a material increase in the metallic money of the commercial nations, and assumes that, in such case, there would be a general rise in values and a consequent speculative boom of wide dimensions.”
Franklin H. Head, of Chicago (business man): “That an increase in the quantity of money reduces prices, and a diminution lowers them, as stated by Mill and other economic writers, is the most elementary proposition in the theory of currency, and without it we should have no key to any of the others.”
Amasa Walker, of Massachusetts: “Other things being equal, the amount of currency in circulation determines the prices of everything that is for sale; and these are increased or diminished as the volume of the currency is increased or diminished.”
A. B. Hepburn, of the United States Treasury (Forum, 1894): “When credit is withheld a money stringency is easily created.”
Prof. William G. Sumner, of Yale (“History of American Currency,” page 205): “In 1872 this issue was forced out of between forty and fifty million, reducing a redundancy and enhancing retail prices.” Page 211: “The war being ended, the financial question took this form: ‘Shall we withdraw the paper, recover specie, reduce prices, lessen imports and live economically until we have made up the waste and loss of war? Or shall we keep paper as money?’ Mr. McCulloch proposed to contract inflated paper and pursue the former alternative.” Page 221: “The wholestory goes to show that the value of paper currency depends upon its amount.” Page 329: “If, therefore, a nation has a specie currency, a drain upon it by an adverse balance of trade, a foreign payment, or any other similar cause, would immediately produce a lowering of prices and a return of current specie until the natural level was once more restored.”
Prof. Francis A. Walker, Yale (“Money,” page 57): “The value of money in any country is determined by the quantity existing. Its power of acquisition depends not upon its substance, but upon its quantity.... That prices will fall or rise as the volume of money be increased or diminished is a law that is unalterable as any law of nature.” Page 210: “Gold and silver undergo great changes of value and become in a high degree deceptive. Prof. Jevons estimates that the value of gold fell, between 1789 and 1809, 45 per cent.; from 1809 to 1849 it rose 145 per cent., while in the twenty years after 1849 it fell again at least 30 per cent.... When the process of contraction commences the first class on which it falls is the merchants of the large cities; they find it difficult to get money to pay their debts. The next class is the manufacturer; the sale of his goods at once falls off. Laborers and mechanics next feel the pressure; they are thrown out of employment. And lastly the farmer finds a dull sale for his produce.”
Robert Ellis Thompson, M. A., University of Pennsylvania (“Political Economy,” page 151): “The influx of money into a progressive country is one of the most powerful promoters and increasers of production. When it is plenty all sorts of productive work is stimulated. Labor is the master of capital, and industrial enterprise gains a more than proportionally large return for its outlay.” Page 209: “The possession of a large quantity of moneyenables any country to organize its industries upon such a scale as to carry its division of labor to such perfection as will bring down the prices of all the products of industry, while affording a larger return to both capitalist and laborer. It therefore makes such a country a cheap place to buy in, mainly because of that accumulation of money which was to make everything dear.”
Professor Thompson(“Political Economy”) quotes Thomas Tooke, page 208: “If money has increased, industry and trade are increased.... If iron and cotton are scarce, those who need them suffer by the scarcity, but it has no effect upon the prices of other materials. If, on the other hand, money is scarce, the price of everything else is affected. Every one must make exchanges, just as when the water falls in the rivers traffic is interrupted because the vessels are aground.”
Professor Francis Bowen, Harvard (“American Political Economy,” page 280): “The whole process of exchange may be compared to the process of weighing a well-poised balance, the money and the merchandise being placed on the opposite arms of the lever. Increase the weight on the money side, and the merchandise is sure to rise.” Page 281: “The equalization of money is but another name for the equalization of prices.” Page 244: “The probability of the notes being redeemed at some future day, more or less remote, is not the cause even of the depreciation in the value of paper money, ... but solely on the relative amount of the currency compared with the needs of business. How great are these needs? Commerce needs money or currency enough to enable it to perform its peculiar function; that is, to make the prices of commodities in the home market equal or as nearly equal as possible to the prices of the same commodities in foreign markets.” Page 245: “If there is only $100 to buy flour with, andonly ten barrels of flour offered for sale, the competition of buyers and sellers must fix the price at $10 a barrel. If there was twice as much flour, the number of dollars being the same, the price must be reduced to $5. On the other hand, double the quantity of money; there would be $200 available for this purpose, and, as at first, only ten barrels to be sold; the price would rise to $20 a barrel.” Page 301: “The general principle is that the value of money falls in precisely the same ratio in which its quantity is increased. If the whole quantity of money in circulation was doubled, prices would be doubled; if it was only increased one-fourth, prices would rise one-fourth.”
President Steel, Lawrence University: “The conventional unit of lineal measure must not be a line which averages a foot, though it may be fourteen inches to-day and nine inches to-morrow; for the same reason it is desirable that the unit of value should have the same purchasing power next week as it has now.”
Prof. Francis Wayland(“Elements of Political Economy,” page 297): “If there is more money in a country than is needed for its exchanges, the price of goods is raised and it is sent abroad for new purchases. If there is a scarcity of money in a country, the price of goods declines, and money comes in from other lands to be exchanged for them.” Page 298: “If money is abundant because business is stagnant and exchanges are few, it is a sign of adversity rather than of prosperity.”
Edwards Pierpont(North American Review): “When currency is small it is always easy for a few lords of corporations and rich money-lenders to combine and lock it up, and thus throw down the price of stocks, wheat, cotton and other commodities, and work a corner on the currency. Thus the market is made tight and extortion easy.”
John Sheldon(New England Yale Review, March, 1890):“This is of supreme importance, for prices tend to carry with the amount and not simply with the kind of legal-tender money in circulation. The greater the amount the higher the range of prices; the less the circulation the lower the prices. Prices tend ever to follow up and down the amount of legal-tender money in circulation; they do not tend to fixity of the particular kind of money or standard used.”
Alexander Baring(before the committee, House of Lords, 1819): “The reduction of paper would produce all those effects which arise from reduction in the amount of money in any country.”
Sir Robert Peel(May 6, 1844, speaking of the act to regulate the currency): “There is no contract, public or private, no engagement, national or individual, which is unaffected by this.”
Lord George Bentinck(Parliamentary Debates, about 1847): “Of all the subtle devices which the wit of man has contrived to despoil the community of their property, nothing equals the contrivance of laws which limits the currency to gold.”
Lord Beaconsfield(“Agricultural Depression”): “Gold is every day appreciating in value, and as it appreciates in value the lower become prices.”
Sir Walter Scott(speaking of abundant currency): “It is not less an issue that the consequences of this banking system as conducted in Scotland have been operated with the greatest advantage to the country; have converted Scotland from a poor, miserable and barren country into one where, if nature has done less, art and industry have done more than in perhaps any country in Europe, England itself not excepted.”
Encyclopedia Britannica(1859): “A fall in the value of precious metals, like a fall of rain water after a long courseof dry weather, may be prejudicial to certain classes. It is beneficial to an incomparably greater number, including all who are engaged in industrial pursuits, and is, speaking generally, of great public or national advantage.”
North British Review(November, 1861): “Metallic money, whilst acting as coin, is identical with paper money in respect to being destitute of intrinsic value.”
WilliamJacobJacob, F. R. S., gives statistics of the world’s volume of money from the year 14 A. D., when it was $1,790,000,000, to 806, when it had fallen to $168,000,000. The price of a horse in England then was £1 15s2d; an ox, 7s2d; a cow, 6s2d; sheep, 1s2d; goat, 4d.
Ernest Seyd(1867, speaking of a reduction in volume): “Throughout the world a fall in prices will take place, injurious alike to the owners of solid property and to the laboring classes, and advantageous only, and unjustifiably so, to the holders of state debts and other contracts of that kind.” (“Bullion,” 1868:) “On this one point all authorities are agreed: that the large increase in the supply of gold has given a universal impetus to trade, commerce and industry, and to greater social development and progress.”
Baron Rothschild(French Monetary Convention, 1869): “The suppression of silver would amount to a veritable destruction of values without any compensation.”
Ricardo, M. P.(high priest of the bullionists), in his reply to Bauset, said: “The value of money in any country is determined by the amount existing.... The commodities would rise or fall in price in proportion to the increase or diminution of money. I assume that as a fact that is incontrovertible. However debased a coinage may become, it will preserve its mint value.... A well-regulated paper currency is so great an improvement in commerce that I should greatly regret if prejudice should induce us to return to a system of less utility.... Bylimiting the quantity of money it can be raised to any conceivable value.”
John R. McCulloch(commenting on Ricardo): “He explains the circumstances which determine the value of money ... and he shows ... its value will depend upon the extent to which it may be issued compared to the demand. This is a principle of great importance, for it shows that intrinsic worth is not necessary to a currency.”
Speaking in favor of a gradual reduction in the burden of debts, through the natural increase in the volume of precious metals, McCulloch said: “It promotes industry and diminishes the weight of obligations which press upon the producing classes, whether employer or employed.... Thus it appears that, whatever may be the material of the money of a country, whether it consists of gold, silver, copper, iron, salt, cowries, or paper, and however destitute it may be of any intrinsic value, it is yet possible, by sufficiently limiting its quantity, to raise its value in exchange to any conceivable extent.”
Samuel Bailey(Sheffield): “However some men doubt the advantage of an increase of the currency, no one can deny the ruinous effects of a decrease.”
Sir James Stewart: “Money is nothing more than a scale of equal parts for the measurement of things vendible.”
Sir James Graham(British statesman): “The value of money is in the inverse ratio to its quantity, supply of commodities remaining the same.”
William E. Gladstone(1876, speaking of the banks issuing money): “It will be exactly the same thing, so far as the money is concerned, to grant a legislative privilege to a person or to pay over to him a considerable sum from the consolidated fund.”
London Economist(1883): “England being the chiefcreditor nation of the world, it is to her interest to keep the volume of money as small as possible in countries from which debts are due, in order to get more of their product in payment of interest due to her citizens.”
The Royal British Commission, appointed August, 1885, to inquire into the causes of the depression of business, made world-wide inquiries and was composed of twenty-three members, a number of whom were distinguished statesmen and economists. They agreed that gold had greatly appreciated in value and that the rise in the value of gold was caused by the demonetization of silver and the falling off in the supply of gold, and it was the leading cause of the general depression in trade and industry. But it was added:
“This country [England] is largely a creditor country of debts payable in gold, and any change which entails a rise in the prices of commodities generally—that is to say, a demonetization of the purchasing power of gold—would be to our disadvantage.”
“This country [England] is largely a creditor country of debts payable in gold, and any change which entails a rise in the prices of commodities generally—that is to say, a demonetization of the purchasing power of gold—would be to our disadvantage.”
Archbishop Walsh(Dublin, 1893): “Of all conceivable systems of currency, that system is sure to be the worst which gives you a standard steadily, continually, indefinitely appreciating, and which, by that very fact, throws a burden upon every man of enterprise and benefits no human being whatever but the owner of fixed debts.”
Count Leo Tolstoi(Russian philanthropist): “Only by means of money do some people command the labor of others nowadays; that is, into slavedom. Money tribute has become a chief means of the subjugation of men, and by it are determined all the economic relations of man.”
Cernuschi(French economist): “The purchasing power of money is in direct proportion to the volume of money existing.”
Professor Chevalier(France), speaking of the increase of money, says: “Such a change will benefit those wholive by current labor and enterprise; it will injure those who live upon the fruits of past labor.... It has been wisely said that there is no machine which economizes labor like money, and its adoption has been likened to the discovery of letters.”
Sauerbeck(German statistician): “The propositions of some economists, that we have quite enough money in our country, or that there is sufficient gold to carry on the trade of the world, are valueless. They assume that there is a certain quantity required that need not be increased. Of course there is enough gold, and we could perhaps do with half the quantity. It only depends upon the state of prices.”
Fichte(German philosopher): “The amount of money current in a state represents everything that is purchasable on the surface of the state. If the quantity of purchasable articles increases while the quantity of money remains the same, the value of the money increases in the same ratio. If the quantity of money increases while the quantity of purchasable articles remains the same, the value of money decreases in the same ratio.”
Herr von Barr, speaking of the loss to German miners by the demonetization of silver, says: “This direct loss, important as it is, is nothing, however, compared with the indirect loss resulting from the fall of prices.”
M. Edouard Cazalet, banker of Milan (“Bimetallism,” page 14): “Since the value of all articles of commerce is represented by the currency, the value of these articles must fall in proportion to the reduction in the volume of the currency. Otherwise the moneyed currency could not possibly do the work which the two metals combined have previously performed.”
Dr. Soetbeer(German statistician): “The value ofmoney has fallen through the issue of paper money as well as through the increased production of gold and silver.”
Leon Fouchet(1843): “If all the nations of Europe adopted the system of Great Britain the price of gold would be reduced beyond measure. The government could not decree that legal tender should be only gold, for that would be to decree a revolution, and the most dangerous of all, because it would be a revolution leading to unknown results.”
M. Wolowski(French Institute, 1868): “The suppression of silver would bring on a veritable revolution. Gold would augment in value with rapid and constant progress, which would break the faith of contracts and aggravate the situation of all debtors.... If by a stroke of the pen they suppress one of these metals [gold or silver] in the monetary service, they double the demand for the other metal, to the ruin of all debtors.”
John Locke(“Considerations, etc., in Relation to Money,” 1691): “The greater scarcity of money enhances its price and increases the scramble, and makes an equal portion of it exchange for a greater of any other thing.” 1690: “Money is really a standing measure of the falling and rising value of other things. If you increase or lessen the quantity of money current, then the alteration of value is in the money. The value of money in any one country is the present quantity of the current money in that country in proportion to the present trade.”
Adam Clark’scommentary on II. Matthew: “The scarcity of money in England in 1351 influenced Parliament to pass an act fixing a day’s labor at 1d. Twenty-four eggs sold for 1d; a pair of shoes 4d; wheat 3d; a fat ox 80d.”
Copernicus, the astronomer (treatise “Monete CudendeRatio,” addressed to the King of Poland): “Numberless as are the evils by which kingdoms, principalities and republics are wont to decline, these four are, in my judgment, most baleful: civil strife, pestilence, sterility of the soil, and corruption of the coin. The first three are so manifest that no one fails to apprehend them; but the fourth, which concerns money, is considered by few, and those the most reflective, since it is not by a blow, but little by little, and through a secret and obscure approach, that it destroys the state.”
Daniel Watney, of England: “I cannot suppose that everybody is wise. Must think of the folly of the United States, when they were a debtor nation, in adopting a gold standard. They knew nothing about currency matters; they did not know it was going to increase their debt enormously.”
Paulus(Roman jurist, third century): “Money circulates with a power which is derived, not from the substance, but from the quantity.”
Blackstone(vol. I., page 2761): “As the quantity of precious metals increases they will sink in value and become less precious. If any accident were to diminish the quantity of gold and silver they would proportionately rise.”
Faucet(“Handbook of Finance,” page 146): “The decline of prices since 1872 and 1873 is explained by the increased value of gold. The first effect was to cause a collapse of speculative securities, namely, bonds of railroads, etc.”
Professor De Colange(“American Encyclopedia of Commerce”): “The rate at which money exchanges for other things is determined by its quantity.”
Beasey: “Slavery is the inevitable result of poverty. Poverty is the inevitable result of low wages. Low wages are the inevitable result of a scarcity of currency.”
A. H. Gaston: “Money is simply a measure of value, and as a nation contracts its circulation it contracts the value of all property in like proportion.”
Colton’s Public Economy(page 224): “We hold that money enough for the demands of trade is the tool of trade to a nation.” Page 193: “It is very desirable that there should not be sudden and great fluctuations, as such changes affect the value of incomes. For example, when the products of the American mines had raised the general prices on comforts of life as 4 to 1.”
Silver Commission Reportof 1876, page 49: “Whenever it becomes apparent that prices are rising and money falling in value in consequence of an increase in its volume, the greatest activity takes place in exchange and productive enterprises. Every one becomes anxious to share in the advantages of a rising market, and the inducement to hoard gold is taken away; its circulation becomes exceedingly active; labor comes into great demand and at remunerative wages. It not only increases production, but increases consumption.” Page 50: “Falling prices and misery and destitution are inseparable companions. It is universally conceded that falling prices result from the contraction of the money volume.” Page 50: “Money is the great instrument of association, the very fiber of social organism, the vitalizing force of industry, the pure, true organ of civilization, and as essential to existence as oxygen is to animal life. Without money civilization could not have had a beginning.” Page 51: “It is estimated that the purchasing power of the precious metals increased between 1809 and 1840 fully 145 per cent.... They had come to regard money as an institution fixed and immovable in value, and when the price of property and wages fell they charged the fault not to the money, but to the property and the employer. Their prejudiceswere aroused against labor-saving machinery; they were angered against capital.” Page 53 (effects of a decreasing volume of money): “It circulates freely in the stock exchange, but avoids the labor exchange. It has in all cases been the worst enemy with which society has had to contend.” Page 56: “However great the natural resources of a country, fertile its soil, intelligent, enterprising and industrious its inhabitants—if the volume of money is shrinking and prices falling, its merchants will be overwhelmed with bankruptcy, industries paralyzed, and destitution and distrust will prevail.” Page 59: “All respectable authorities agree as to the relative effects of an increasing and decreasing money.... History records no such disastrous transition as that from the Roman empire to the dark ages. In the Christian era the metallic money of the Roman empire amounted to $1,800,000,000. By the end of the fifteenth century it had shrunk to less than $200,000,000. Population dwindled, and commerce, arts, wealth and freedom all disappeared.”
Henry C. Carey, LL. D.(“Social Science,” page 297): “Money tends to diminish the obstacles interposed between the producer and the consumer precisely as do railroads and mills.... The most necessary part of the machinery of exchange being that which facilitates the passage of labor and its products from hand to hand, any diminution of its quantity is felt with tenfold more severity than is the diminution of the quantity of railroad cars or steamboats.”
Before the Congressional committee: “We next find him [Secretary McCulloch] issuing the destructive Fort Wayne decree, by means of which we were made to know that the currency was in excess and prices too high; that the policy of the treasury was to be one of contraction; and that unfortunate debtors must as speedily as possible placethemselves in a position to meet the shock to be thus created. In other words, all debtors were required to sell, capitalists meanwhile being advised not to buy, the government being determined that labor, lands, houses, stocks and property of all other descriptions should be promptly reduced to gold values.”
Treatise on “Wealth”: “A period of contracted currency is one of embarrassment, difficulty, and generally, in the end, of insolvency to the small farmer and moderate landholder.... It will rise in price from that scarcity, and become accessible only to the more rich and affluent classes.”
[This greatest of American political economists, the late Henry C. Carey, estimated the cost of contraction in order to secure resumption between the years of 1873 and 1879 at thirty billion dollars.]
Henry Carey Baird(March 13, 1882): “The man who has the greatest horror of the inflation of the currency generally has no horror of the inflation of bank credits. He likes it because it increases his power over his fellow men. What he objects to is the inflation of the people which causes an increase of their power.”
September 3, 1889: “People know that the expansion of the currency means life, and equally well that contraction means death.”
Henry Carey Baird(“Money and Bank Credit,” page 14): “The first and greatest need of a man is that of association and combination with his fellow men, and the daily life of a civilized people involves such countless myriads of acts of association or commerce that a medium having the quality of universal acceptability is absolutely necessary to that life. That medium is money.... In its absence in sufficient volume in Great Britain and Ireland, thousands of millions of dollars of labor power annuallyin those islands perish. While the Trenholms, the Russell Sages, the Pearsalls, the Fahnenstocks and the Seligmans wrangle over the efforts of the people to secure a sufficient supply of ‘current money,’ more labor power will go to waste than will represent the value of the capital of all the banks in the city of New York many times over.”
Peter Cooper: “Contraction in finance is not the same as economy in private life. Contraction in the finances of a country means a stoppage of a certain amount of the industry and exchanges, by reason of the contraction of the credit by which these are sustained. Nothing can be more certain than that a contraction of the currency by our government has been followed by a reduction of all values, so that a wrong has been inflicted upon all the enterprising business men of this nation, whose property has been virtually confiscated by this process of contraction.”
B. F. Butler(August, 1875): “I am informed that Mr. Duncan, of Duncan, Sherman & Co., went to Washington when the currency bill was before the President to advise him to veto it because it was necessary to depreciate values. The President did veto the bills. Values have been depreciated, I trust, to an amount entirely satisfactory to Messrs. Duncan, Sherman & Co.” [The firm of which John Sherman was a member was bankrupted by the depreciation.]
Solon Chase: “I bought a yoke of steers a year ago for $60; fed them all summer and winter, and in the spring was offered but $60 for them in the market. Who got the hay? So long as the owners of funded wealth control the volume of money they control the price of a day’s work down east and the price of a bale of cotton down south. The higher the price of hogs and corn, the easier the people can pay the debt. The farmer cannot pay off hisdebt on a falling market. The fight of the men who deal in money is not for the metal, but to control the volume.”
James D. Holden(President National Citizens’ Alliance): “So magical is the operation of this wonderful device known as money that by simply restricting its issue wealth is transferred from the hands that created it to the possession of those not in the remotest degree responsible for its production. Let the reader who does not indorse this view give himself, if possible, a reason why a people who by their laws create the supply of money should limit the issue.”
A Georgia editor(speaking of the effects of contraction) says: “In 1868 there was about $40 per capita of money in circulation; cotton was about 30 cents a pound. The farmer then put a 500-pound bale of cotton on his wagon, took it to town and sold it. Then he paid $40 taxes, bought a cooking stove for $30, a suit of clothes for $15, his wife a dress for $5, 100 pounds of meat for $18, one barrel of flour for $12, and went home with $30 in his pocket. In 1887 there was about $5 per capita of money in circulation; this same farmer put a 500-pound bale of cotton on his wagon, went to town and sold it, paid $40 taxes, got discouraged, went to the saloon, spent his remaining $2.30 and went home dead broke and drunk.”
Arthur Kitson(“Scientific Solution of the Money Question,” 1894, page 284): “A restricted currency means restricted commerce; restricted commerce means restricted production, and restricted production means poverty, misery, disease and death.” Page 396: “The gold standard is a device of the bankers for the measuring of everybody else’s corn with their bushel.”
Sealy(“Coins and Currency,” 1853): “The commerce of the country is now in the power of the Bank of England as it was before in the legislature.”
Doubleday(“Financial History of England”): “We have already seen the fall of prices produced by this universal narrowing of the paper circulation. Distress, ruin and bankruptcy which took place were universally among the landholders whose estates were burdened by mortgages. The effects were most marked. Owners were stripped of all and made beggars.”
President Andrews(Eaton University): “Demonetization of silver was the hardest, saddest blow to human welfare ever delivered by the action of states. So long as gold is the sole standard of that money, so long these wrongs and sufferings must continue.”
James Mill(father of John Stuart Mill): “In whatever degree the quantity of money is increased or diminished, other things remaining the same, in that proportion the value of the whole and every part is reciprocally diminished or increased.”
Herbert Spencer: “Barbarians do not want any money but hard money; semi-civilized people want hard money and convertible paper; but when the world becomes civilized and enlightened no other kind of money will be used but paper money.”