Currency reform

“ The balance of trade is not to be turned in our favor by creating new demands upon us abroad. Our currency can not be improved by the creation of new banks or more issues from those which now exist. Although these devices sometimes appear to give temporary relief, they almost invariably aggravate the evil in the end. It is only by retrenchment and reform—by curtailing public and private expenditures, by paying our debts, and by reforming our banking system—that we are to expect effectual relief, security for the future, and an enduring prosperity. ”

“ Can it not be conclusively shown by facts and figures that the legal-tender notes, such as they are, have cost the people infinitely more by the commotions, and uncertainties, and distrusts, and disasters their relation to the Treasury has caused, than the interest on the same amount of bonds would have cost; that they have thus proved an immensely expensive sort of currency; that contraction is not hurtful but beneficial when it consists in the retirement of redundant currency not needed by the business of the country ”

“ Many of these notes had served a useful purpose in tradal transactions, but those officially issued by the feudal chiefs had in some cases ceased to have any purchasing power, and must in every case have become valueless when the fiefs ceased to exist. The first duty of a centralised, progressive administration should have been to reform the currency: to substitute uniform and sound media of exchange for these unsecured tokens, which hampered trade, destroyed credit, and opposed barriers to commercial intercourse between neighbouring provinces and districts. ”

“ It avoids almost, if not altogether, the evils of a great and sudden change in the currency by offering inducements to solvent existing institutions to withdraw the circulation issued under State authority, and substitute that provided by the authority of the Union. Thus, through the voluntary action of the existing institutions, aided by wise legislation, the great transition from a currency heterogeneous, unequal, and unsafe, to one uniform, equal, and safe, may be speedily and almost imperceptibly accomplished. ”

“ It may well enough be admitted that while Congress confines its regulation to weight, fineness, shape, and device, banks and individuals may issue notes for currency in competition with coin. But it is difficult to conceive by what process of logic the unquestioned power to regulate coin can be separated from the power to maintain or restore its circulation, by excluding from currency all private or corporate substitutes which affect its value, whenever Congress shall see fit to exercise that power for that purpose. ”

“ The Government has nothing to do with it but to see that the coin struck in its mints be of the prescribed standard value; it prevents and punishes counterfeiting; it regulates the banking system, so as to make it safe, and then it lets currency and trade in their relations take care of themselves, without assuming any arbitrary control over volume and value. These are the simple principles of a sound money system under which business can regain confidence in itself and prosperity will revive. ”

“ We do not comprehend the wisdom of fixing and limiting the amount of currency the country may have for a circulating medium, and empowering one man to decide, how, when, and where it shall be distributed. Conceding to the general government the power to charter banks and issue treasury notes, the power is not exclusive. There is no limit to the volume of gold and silver, and if government should attempt to limit the amount of coin, it could not do it. ”

“ Now is the time to separate the government from all banks—receive and disburse the revenue in nothing but gold and silver coin, and the circulation of our coin through all public disbursements will regulate the currency forever hereafter—keep the government free from all embarrassment, whilst it leaves the commercial community to trade upon its own capital, and the banks to accommodate it with such exchange and credit as best suits their own interests—both being money making concerns, devoid of patriotism, looking alone to their own interests—regardless of all others. ”

“ It does not seem that much can be done in the direction of steadying the exchanges except to put such pressure as is practicable on foreign countries to cease inflation by printing paper money, to balance their budgets, and to stabilize their currencies and re-anchor them to gold, though not necessarily in the same parity as pre-war, at the same time adding to the national wealth, on which sound currency is based, by increasing national production, decreasing consumption, reducing expenditure, and prompting public and private economy. ”

“ And the same remark applies with equal force to foreign coin, if allowed to circulate freely in a country without any control by the government. Every civilized government, therefore, with a view to prevent such abuses, to facilitate exchanges, and thereby to encourage all sorts of industry and commerce, as well as to guard itself against the embarrassments of an undue scarcity of currency, injurious to its own interests and credits, has found it necessary to coin money, and affix to it a public stamp and value, and to regulate the introduction and use of foreign coins. ”

“ In short, the Republicans, controlling both the Legislative and the Executive branches of the Government, will, next winter, have ample power and opportunity to do what they ought to have done at the last session—to put the currency law in such a shape that the gold standard cannot possibly be shaken by Executive action, no matter who may occupy the Presidential chair—and thus remove, to that extent at least, the basis of our monetary system from the changeful game of party politics. ”

“ Now it happens that among the new political issues that have arisen, the question of the currency has assumed a most prominent place. There can be no doubt of the intensity of the feeling that has developed against the national banks, which have supplied a large proportion of the circulating medium since the war, and the demand for a currency issued directly by the government, without the intervention of the banks, is growing both in volume and in force. ”

“ And let us not deceive ourselves by supposing that those who oppose this repeal are in favor of a purely metallic currency, to the exclusion of paper currency, for all intelligent men agree that every commercial nation must have both; the one as the standard of value by which all things are measured, which daily measures your bonds and notes as it measures wheat, cotton, and land; and also a paper or credit currency, which, from its convenience of handling or transfer, must be the medium of exchanges in the great body of the business of life. ”

“ Now, if he can propose a method how to establish a system of redemption that will be efficient, that will have the effect of putting a safe limit to the issue of national bank note currency, which without such limit might run into wild inflation — if he has any such proposition to make, I should be very happy to accept it, and to vote for it. While we cannot redeem in coin, the difficulty is that we have two kinds of paper currency, equally valuable and occupying the same field of action, so that converting one into the other means redeeming it with itself. ”

“ The point for immediate consideration simply resolves itself into this: are we to leave untouched upon the statute-book, a law which can at any time expose us to the inevitable hardship of a monetary crisis like the present?—Are we to continue and approve of an Act, the operation of which is, in certain circumstances, to drain dry the fountain of our currency, and that at the very time when an expansion of the currency is required? We do not want to hear from Sir Robert Peel, any more than from an itinerant lecturer, his definition of the nature of a “pound.” ”

“ Whenever any nation intrusts to its legislators the issue of a currency not based on the idea of redemption in standard coin recognized in the commerce of civilized nations, it intrusts to them the power to raise or depress the value of every article in the possession of every citizen. ”

“ Therefore, the Populists, successors to the old Greenbackers, have always clung to it as an article of faith that the Federal Government should exercise its constitutional right to create a currency, and should not delegate that power to national banks or to private citizens or corporations.
The government should supply the country with a sufficient amount of national money, every dollar of which should be equal to any other; every dollar of which should be a full legal tender for all claims, public and private, and no dollar of which should be made redeemable in any other dollar. ”

“ It records the most gigantic attempt ever made in the history of the world by a government to create an inconvertible paper currency, and to maintain its circulation at various levels of value. It also records what is perhaps the greatest of all governmental efforts—with the possible exception of Diocletian's—to enact and enforce a legal limit of commodity prices. Every fetter that could hinder the will or thwart the wisdom of democracy had been shattered, and in consequence every device and expedient that untrammelled power and unrepressed optimism could conceive were brought to bear. ”

“ That provision may be so extended as to reach the average circulation of the country, while a moderate tax, gradually augmented, on bank notes, will relieve the national from the competition of local circulation. It has been already suggested that the substitution of a national for a State currency, upon this plan, would be equivalent to a loan to the Government without interest, except on the fund to be kept in coin, and without expense, except the cost of preparation, issue, and redemption ”

“ If the currency is redundant, prices rise, exports are diminished; and the reverse follows with a contracted circulation. But banks inflate or restrict the currency at their pleasure, and thus control prices, commerce, exports, imports, and revenue. But they also destroy or depreciate the money of the Government, and deprive it of a vital power. Thus, the nation issues treasury notes, and makes them a legal tender: the banks immediately make such notes the basis of bank issues, in the ratio of three to one, and the whole currency necessarily becomes redundant and depreciated ”

“ We do not ourselves say that Congress ought to interfere and undertake by main force to regulate the currency, because we hold to other and, as we think, better methods of arriving at a sound and stable currency ”

“ It is only thus that a general rise of prices can be a source of benefit to producers and dealers; by diminishing the pressure of their fixed burthens. And this might be accounted an advantage, if integrity and good faith were of no importance to the world, and to industry and commerce in particular. Not many, however, have been found to say that the currency ought to be depreciated on the simple ground of its being desirable to rob the national creditor and private creditors of a part of what is in their bond. ”

“ Bank bills, or other promises to pay, are and always will remain unsafe as a money standard; especially when they cannot be exchanged for specie, save at large discounts. The policy of the government, of substituting treasury notes for coin, as legal tender, and then issuing national currency for general circulation by the banks of the country, has been effectual in preventing the circulation of coin, as well as the resumption of specie payment. ”

“ A depreciation of money is not an accumulation of national wealth, and therefore a nation may both abound in currency, and also become poor and wretched. This is, invariably, effected by the system for increasing currency, combined with regulations by which its occupation of exchanging property is contracted, and that of transferring it, is extended. The supreme law of commerce governs currencies both local and universal. ”

“ The whole matter of the currency would have been placed where, by the constitution, it was designed to be placed—under the immediate supervision and control of Congress. The action of the government would have been independent of all corporations; and the same eye which rests unceasingly on the specie currency, and guards it against adulteration, would also have rested on the paper currency, to control and regulate its issues, and protect it against depreciation. ”

“ I believe every part and portion of our country will have a satisfactory taste of the “better currency.” I believe we shall be blest again with the currency of 1812, when money was the only uncurrent species of property. We have, amidst all the distress that surrounds us, men in and out of power, who condemn a national bank in every form, maintain the efficacy and efficiency of State banks for domestic exchange, and, amidst all the sufferings and terrors of the “experiment,” cry out, that they are establishing “a better currency.” The “experiment,”—the experiment upon what? ”

“ How much have we all heard (we who are old enough) , within the last fifty years, of the power of congress, or of the States, "to regulate the currency." And "to regulate the currency" has always meant to fix the kind, and limit the amount, of currency, that men may be permitted to buy and sell, lend and borrow, give and receive, in their dealings with each other. ”

“ The United States is so large in extent, is so sparsely populated, and the price of labor is so much higher than in Europe, that we require more currency per capita. We now produce the larger part of the gold and silver of the world, and cannot limit our coinage except by the wants of our people and the demands of commerce.
"Congress alone can change the value of our coin. I see no object in negotiating with other powers on the subject. As coin is not now in general circulation with us, we can readily fix by law the size, weight, and measure of future issues. ”