Currency repudiation

“ They are responsible for the dreadful error of having not only done nothing to extend and secure the currency from being exported or contracted, when they had added so enormously to the internal engagements of the kingdom, but done everything, by the establishment of a permanent system of free trade, and a permanently fettered currency, to secure its reappearance on occasion of every future recurrence of an indifferent harvest, or any continuance of a great importation. ”

“ A permanent increase of currency can only be effected by employment for it in exchanging or transferring property, but its increase for one or the other object, produces very different consequences to a nation. When currency is increased by a demand for it to facilitate exchanges, it indicates national prosperity; but when it is increased for the purpose of transferring property, it is an infallible proof of fraud and oppression. ”

“ 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. ”

“ 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. ”

“ With our high protective tariffs, extortionate charges for inland transportation, lack of ocean commerce, and immense foreign debts, public and private, absolute financial ruin must overtake us, unless a different policy is adopted. The amount of currency being fixed by law, the government has in effect declared that the people of this country shall have but this fixed amount for all the purposes for which money is used. The effect of this arbitrary law, followed and supported by the legal tender decision of the supreme court, is to prevent any increase of the currency or money. ”

“ 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. ”

“ Can there be a more convincing proof that the currency of the country has been unduly drained away, and that the present monetary system, which forbids any extension of it in paper when the specie is abstracted, is based on a wrong foundation? Nor is it surprising that the currency should be straitened when it is notorious that every packet which goes out to America takes out vast sums to that continent to pay for the immense quantities of grain which are brought in. ”

“ 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. ”

“ 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. ”

“ A disordered currency is one of the greatest political evils. It undermines the virtues necessary for the support of the social system and encourages propensities destructive of its happiness; it wars against industry, frugality, and economy, and it fosters the evil spirits of extravagance and speculation. ”

“ The approach to a specie basis is very gratifying, but the fact can not be denied that the instability of the value of our currency is prejudicial to our prosperity, and tends to keep up prices, to the detriment of trade. The evils of a depreciated and fluctuating currency are so great that now, when the premium on gold has fallen so much, it would seem that the time has arrived when by wise and prudent legislation Congress should look to a policy which would place our currency at par with gold at no distant day. ”

“ To hold what we have and to appreciate our currency to that standard is the problem deserving of the most serious consideration of Congress.
The experience of the present panic has proven that the currency of the country, based, as it is, upon the credit of the country, is the best that has ever been devised. Usually in times of such trials currency has become worthless, or so much depreciated in value as to inflate the values of all the necessaries of life as compared with the currency. Everyone holding it has been anxious to dispose of it on any terms. ”

“ Not only within the country had we a local and general currency perfectly sound, but in whatever quarter of the globe American commerce had penetrated, there also did the bills of the United States bank command unbounded credit and confidence. Now we are in danger of having fixed upon us, indefinitely as to time, that medium, an irredeemable paper currency, which, by the universal consent of the commercial world, is regarded as the worst. ”

“ Primarily, of course, a clearing-house is an innocent institution occupied with adjusting balances between banks, and has no relation to the volume of the currency. Furthermore, among all highly centralized nations, the regulation of the currency is one of the most jealously guarded of the prerogatives of sovereignty, because all values hinge upon the relation which the volume of the currency bears to the volume of trade. ”

“ You can issue it; but, mark my words, you cannot force it into the channels of legitimate business, and you cannot force it out of the channels of speculation. The currency you issue will fall under the control of exactly the same class of men who control it now, only in a larger and more oppressive form. With every addition you make, a larger proportion will go into the hands of those who have too much already and use it for bad purposes; and it will increase their power to keep it out of the hands of those who have not enough, and who would use it for good purposes. ”

“ Thus, should the public good require the suppression of a paper currency, certainly the government would have a right to suppress it, although, in doing so, they would destroy the banks whose paper composes that currency. ”

“ If depreciated paper is to be continued as the permanent currency of the country, and all our coin is to become a mere article of traffic and speculation to the enhancement in price of all that is indispensable to the comfort of the people, it would be wise economy to abolish our mints, thus saving the nation the care and expense incident to such establishments, and let our precious metals be exported in bullion. ”

“ Nobody wants to have French assignats issued amongst us, or to have every insolvent who chooses to call himself a banker authorised to issue currency ad libitum, and substantially usurp the Queen's prerogative by coining worthless paper into doubtful money. But as little can the nation go on longer with our circulation based exclusively on gold coin, and liable to be contracted as that coin is drawn out of the country; thereby doubling the evil, by first inducing speculation when specie is plentiful, and then withdrawing the currency when it becomes scarce. ”

“ The main obstacle in the way of an effective currency reform is the cowardice of the politicians.
There is hardly any authority on financial science outside of political circles that does not insist upon the withdrawal of our government paper money, or at least upon a gradual diminution of it, as a prerequisite of the establishment of a currency system which is to furnish a trustworthy guarantee of the maintenance of the gold standard, and thus to insure the confidence of the business community. ”

“ The issuing of currency is the prerogative of sovereignty. The real sovereign in this country—the government—can only issue a currency of the actual dollar: can only issue gold and silver—and each piece worth its face. The banks which have the privilege of issuing currency issue paper; and not content with two more dollars out for one that is, they go to five, ten, twenty—failing of course on the first run; and the loss falling upon the holders of its notes—and especially the holders of the small notes. ”

“ 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. ”

“ The effects of the depreciation of the paper currency in the United States are thus described by Mr. Wells: “It renders it impossible to sell abroad the products which have cost too much at home, and invites from other countries the products of a cheaper labor paid for in a sounder currency. It exaggerates imports, while destroying our ability to pay in kind.” ”

“ We assert that the experiment has had a fair—a liberal trial, and that disappointment and mischief are visible in all its results—that the promise of a regulated currency and equalized exchanges has been broken, the currency totally disordered, and internal exchanges almost entirely discontinued. We, therefore, make our earnest appeal to the Executive, and ask whether it is not time to interpose the paternal authority of the government, and abandon the policy which is beggaring the people. ”

“ 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 necessities of government are so pressing that the temptation to increase the amount becomes too great for resistance. As prices rise in consequence, the currency becomes of less and less value — that is, has a decreasing power in exchange, so that the inducement to issue becomes continually stronger as the volume expands. ”

“ It is, however, in the present low state of economical knowledge, often possible for Governments to venture on an issue of currency, when they could not venture on an additional loan or tax, because the real operation of such issue is not understood by the people, and the pressure of it is irregularly distributed, and with an unperceived gradation. Finally, the use of substances of intrinsic value as the materials of a currency, is a barbarism;—a remnant of the conditions of barter, which alone can render commerce possible among savage nations. ”

“ The imported specie is useless as currency, because we have more bank currency than we can find employment for, and because the expulsion of foreign commodities to a considerable amount, has correspondently diminished the use of money for facilitating exchanges. If the dead specie surplus, said by the Committee to exist, has been produced by the sales of stock, commerce will inevitably seize and scatter the accumulation, unless we should be saved by a beneficial bankruptcy of all our banks. ”

“ 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. ”

“ But I am confident the people will gradually and surely learn to understand, if they do not understand it already, that, aside from its demoralizing influences, an irredeemable, depreciated, and fluctuating legal-tender currency is the most expensive money that can possibly be invented, for it obliges the Government to pay extravagant prices for all that it needs, and in consequence of its depreciation and its fluctuations it imposes upon the people a most unequal, unjust, extortionate, and oppressive tax, the more extortionate and oppressive as it is uncertain and irregular. ”