PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
The point has now been arrived at where it is to be considered as decided that gold is not, cannot, be money; that it is a valuable article of merchandise. Its utility beyond this character has not only departed as a principle, but in practice a very considerable portion of the most enlightened people in the world consider it the source of great mischief, and the more the causes of the financial ills we are subjected to are analyzed, the more they will be found to be dependent upon the attaching of a specific value to something that is as changeable in cost of production as it is possible for anything to be.
The philosopher and the best reformer would here step in and say that it is their province not so much to tear down the old as it is to prepare the new that shall take the place of the old. This is the science of all reform. However, before there can be a field prepared in which the new can be used, the defunct condition of the old must be pointed out, and itsdebriscleared away, so that the new may find space for operation.
This preparation has in reality been already made. The necessities of the Government in the late war broke the first ground for the consideration of this very important question, and prepared the minds of the mass of the people, though, perhaps, unconsciously, for the reception of the idea that it is possible to do without gold; that specie payment is by no means a necessary accompaniment of a sound financial condition, and that a money system which is made dependent upon a redemption by something else, is not only not to be desired, but that it is the real foundation for all financial disasters, because it makes an undue expansion possible. The people who would once have considered a proposition for an irredeemable currency with the utmost alarm now discuss it as one of the things that is sure to be. It is believed by those who have studied this subject deepest that the time has arrived when this government must enter upon the consideration of a permanent change in our financial system, and that a return to the gold standard would be a disaster.
But, says the objector, how can an irredeemable currency ever be made to adapt itself to the varied demands of the country? How can anything so unsubstantial as a paper currency, without gold support, be made as absolute a measure of values as the yard-stick is of distance? and, if this can be accomplished, where will the elasticity of the currency be found? In general terms it is assumed that, unless the proposed financial system will answer all these conditions—that unless it will be elastic, adapting itself to all the demands that can be made, be they great or small, and at the same time remain absolute in its value, it is not even fit to be thought of, much less to be seriously considered as a substitute for what has been.
And this brings us back to the beginning of the argument—to the point from which the first departure was made. The course that will be pursued, however, after leaving this point this time will not be that of reconnoitring—looking over—the ground to be covered, but a steady, firm and final advance directly toward the objective result desired, which, if a failure is made in reaching, the campaign against gold may be considered a failure. Under the system of currency being good only when it can be redeemed by gold, there is required, to make the currency actually in circulation good, just as many gold dollars as there are currency dollars—that is, if there is at any time in circulation any more currency than there is gold to redeem it, then there is an expansion, which any sudden change in any of the circumstances by which nations are surrounded is liable to convert into a collapse. So long as everything is prosperous, so long as nothing arises to shake the confidence of the people, or to call the attention of any considerable number to the possibility that there is not gold enough to redeem all the currency that is in circulation, so long everything goes well; but so soon as any one of said conditions occur or change, then there is a rush to see who shall get what gold there is; the supply exhausted, the unredeemed currency is valueless. This is the practice and the result of a redeemable currency; the same results will also follow so long as such a system is tolerated.
Everybody knows that there never has been a currency in circulation sufficient in quantity to meet all the requirements of commerce that had a complete basis in gold, and everybody also knows that there is not gold enough in the world to meet this specific requirement. Hence it is that institutions possessing, say $100,000 in gold, put forth and obtain interest upon $500,000 in currency—that is to say, with a real capital of $100,000, which is worth six per cent. interest, theyreally obtain thirty per cent. interest, thus making it possible for them to double their original capital every three or four years. Did those who now so loudly complain of the National Banks receiving interest from the government upon their bonds deposited, and from the people upon their circulation, ever object to the greater enormities of the specie-paying banks?
The only use of money is to facilitate exchanges of what the earth produces, voluntarily or under compulsion. Money, then, has its direct relation to these products as a whole, and can have no special relation to any part of them; if made to enter upon and sustain any such special relation, it is a purely arbitrary law, without foundation in principle, that compels it, and all arbitrary laws belong to the ages past, when brute force was required to guide ignorance; they cannot be long in this age without generating irritation, and such irritation is now being rapidly developed all over the world, wherever the laboring classes have become at all advanced in knowledge. The few can no longer control the many; the many are to control the few. Capital, through false systems of values, has been able to control labor; but the time has nearly come when the producing many will control the accumulated wealth of the world for the benefit of the whole world—not simply and only because they are the many, but because they are to be reinforced by the invincible powers of demonstrated science, which are always to be found operating for the “greatest good for the greatest number.”
New York, Sept. 27, 1870.
New York, Sept. 27, 1870.
New York, Sept. 27, 1870.
New York, Sept. 27, 1870.