Part 2

But if there are objectors to this argument, I beg to call their attention to the conclusive fact that gold _can never_ be representative of all other kinds of wealth. It is just as impossible that it should be, as it is that a bridge _one_ hundred feet in length should span a river _five_ hundred feet in width. It must further be remembered that the uses for which money is required demand an invention which can be made use of for _no other_ purpose whatever, and that money is the name of an invention _demanded_ and made for the purpose of _facilitating_ exchanges—for making them easy, _convenient_ and _adaptable_ to _all_ conditions of _all_ persons.

Every attempt ever made to compel gold to answer the demands of money has been a disastrous failure. So long as a country enjoys continuous prosperity under a gold standard of value, it is all well enough. The people make use of an expanded volume of currency in the full faith that prosperity will continue and everything be smooth and right.

But anon a _change_ comes, the nation is precipitated into conditions which require _more_ than its accumulations of gold to meet. _That_ being exhausted, it is _inevitable_ that representation be resorted to. The wealth in the form of gold not being adequate, and other wealth not having been used or accepted as money, paper representatives of it are the _only_ resort. So it appears that when an _emergency_ arises the people are _involuntarily_ pressed to the use of the principle of representation, which is the _only_ scientific thing that can be called money. So that while a paper representative of wealth is, _with everything else_, a product of labor, it is more than that; it is the embodiment and application of a principle, which other products of labor are not; and all principles are fundamental; are the basis of all permanent and all purely scientific things and truths, while wealth is the realized product of the outworking of principles, directed and appropriated by man for his use and convenience.

The direct inquiry can now be made as to _what_ will _best perform_ what the people require of money; and money is that which can be used to _represent_ real values without an absolute _transfer_ of such values. The basis of all value of this country is our _present_ accumulated _real_ wealth and our _capacity_ to increase it, and this accumulation and the prospective increase may be _wholly_ represented by money and the nation never become bankrupt.

A person may possess wealth to the amount of ten thousand dollars upon which he may issue his representatives of value or promises to pay that value. These representatives of value would circulate among those who believe in the capacity and intention of the utterer to give _up_ to them, _when_ demanded, that which they represent. Everybody by his individual right has the authority to issue such representatives of value, and no government has any right to prohibit their circulation; because the people, as individuals, have the right to take or refuse them. The issue of bank notes is upon the same principle, and so long as the government does not in substance _indorse_ these issues, the people have the _perfect_ right to deal in them—to receive and deliver them.

But there is an insuperable objection—one which cannot be overcome by any governmental requirements—to these representatives being called the real money of the people, since circumstances over which _neither_ their utterers nor receivers can have _any_ control may render them valueless—may make it impossible for those who uttered them to redeem them—and their holders find themselves with _bits of paper_ representing _nothing_; but for which they parted with real value.

So far as this condition is confined to individuals who had no other reason for receiving them, and no other assurance of their real value than the supposed _capacity_ and _intention_ of the uttering person or persons, it is _strictly_ a legitimate condition; and one with which the sufferers can find _no_ fault; since of their own free will and choice they received the utterers assurances that his representatives were of real value. An individual upon his personal judgment, without undue persuasion, accepts another’s representative; if it prove _bad_ he has _himself only_ to blame for the loss, as coming from an error of judgment; and _no power_ or _authority_ has any right to step in to compel the making of amends for this error. _This_ is the simple doctrine of the _rights_ of _individuals_, with which _no third party_ has any right to interfere after the occurrence of the fact. But when banks are organized under certain formula of law, framed by the people or their representatives through government, the people receive and pay out their issues—representatives of their value—_not_ because they have special confidence in the capacity and intention of the individuals who compose the management, _but_ because they _suppose_ the management has conformed to _those certain forms of law_ which are _intended_ to render them safe. In this way the government, at least indirectly, gives _credit_ to the bank, and _currency_ to its issues, and the people accept them _simply_ because the government has done so.

But if these banks are mismanaged either ignorantly or intentionally, or managed by designing men, as often they are, who make use of the governmental sanction to swindle the people, as many times they have, _where_ can the people look for redress; _where should_ they look for redress? The government is justly responsible to the people for all such issues, since it did not require real security from the banks, and government should make reparation therefor.

This is precisely our objection to _any_ and _all_ forms of bank issues. There can be _no_ arrangement made so _perfect_ in security to her people as to _guarantee_ them _absolutely_ against all hazard, that will permit the banks to make the profits which they seem to think they are entitled to make from the people. In _absolute_ security there can be _no_ profit. Bank profits demand the circulation of more notes than they have _real_ value to represent. Profits come only from speculating either upon the _confidence_ or the _money_ of the people, and government has _no_ right to _protect_ such _illegitimate_ and _unjust_ practices.

Our present system of banking is a _swindle_ upon the people, which it is simply surprising that they endure as they have and do. For the banks to be permitted to filch from the people twenty-four million dollars per annum is an _outrageous villainy_ which, if comprehended by the people in its _true light_, could not exist _another year_. ’Tis true these banks complied with the law passed in a time of dire necessity, and that through them the government acquired the means to conduct the war. But did not the people themselves do even _more_ than furnish money, which was promised to be returned; did they not freely give their _lives_, which can never be returned, and which the government never thought of promising to either return or guarantee, and that, too, for the pitiful sum of thirteen dollars per month? What comparison is there between the sacrifices made by the two classes of people, the capitalists who have absorbed the wealth of the country and the laborers who still continue to give life, property and vitality _to_ the country. There is absolutely _no_ chance for a comparison; the distinction is _too_ great.

It seems to me that if either class is entitled to superior consideration—to receive millions of the people’s money—it is the common people who so freely offered their _lives_ to save their country, instead of those who simply _loaned_ their money at enormous rates of interest, with the certain knowledge that it would be repaid. The present claims are too preposterous, and deceptive, and too unjust to be long continued.

All bank notes in their ultimate effects are frauds upon the people, and their continuation as a circulating medium is only possible because that part of the people who suffer from them have not yet risen into a proper understanding of the question. The time is, however, near at hand when those who have reveled in the result, of the wear and tear of the muscle, and the sweat of the brow, of the common laborer, will be compelled to produce honestly and equitably everything they would enjoy.

The substitute for all kinds of bank notes as the money for the people should be a _purely people’s money_—a _national currency_ whose basis of value would be the accumulated wealth of the country, and also its capacity for regularly increasing such wealth. Is there any reliance to be placed in a currency issued by an individual or a number of individuals through an incorporated bank, based upon his or their wealth, which is at all times liable to pass into the hands of other individuals? Yes, there is a presumptive reliance—an indefinite security—but the security is not perfect. In comparison with this security place that of a currency issued by the government, based upon the _entire_ wealth of the _whole_ country, which, no matter how much it might be changed about among the different persons comprising the nation by various contingencies, could never depart from the country; which fact would render it safe under any and all contingencies that could possibly arise, excepting alone the entire destruction of the country and its government by a foreign power; which contingency is not sufficiently imminent to cause any present alarm.

A national currency _thus_ based would have not only _all the gold_ of the country as a basis, but also _all other kinds of wealth_. Is it not perfectly plain that such a money would be just so much better than common bank notes, with a one-third gold basis, as the total amount of the wealth of the country is greater than such amount of gold? It would be in the most complete sense the people’s money. It would be a system of mutual banking wherein every individual of the country would have an interest, instead of there being a vast number of mutual banking institutions, such as has been proposed by a person of profound financial ideas.

As before stated, my objection to all systems of individual banking is that the _basis_ of their issues is at all times _liable_ to pass from the possession of such individuals; whereas, in a national currency—the _money_ of the people, _themselves_ in the aggregate the basis and security—there could be _no such_ liability; since, if _parts_ of the security pass from original to secondary hands, it is _still_ the basis of the currency, and could never be transferred beyond the jurisdiction of security by the operations of designing or incapable persons. By no possibility could there ever a loss occur to the holder of such a currency, except it be destroyed in his hands.

Undoubtedly the _greenback_ was the _nearest_ approach to a _real_ money that any people of the earth ever made. We have only to observe how _admirably_ it has answered nearly all the purposes for which people require money, to be convinced that it has the very best—the most secure—basis that it is possible for a money to have. It stands representative of the capacity and willingness of the government—the representative of all the people—to pay.

But it is one of the most _difficult_ of things for the people to divorce their minds from the idea that gold is the only possible, real money. Yet the _facts_ attaching to the greenback stand out in bold and indisputable relief, perfectly and entirely dispelling all basis for the idea. Because the greenback was the _first_ step toward a real money that the country ever took, which left gold entirely out of the question, the impression still remains with the people that a _return_ must be made to a gold basis; never stopping to observe how vastly superior the wealth basis is to what the gold basis would be.

Bank note currency, or a currency issued by an individual or by a class of individuals, always carries along with itself the _idea_ and _need_ of redeemability. If, however, there is any thought among the people that the utterers cannot meet their _promises_ of redemption, at that _very_ time when, of _all_ others, _confidence_ is necessary to avoid _ruin_, they rush to prove the suspected incapacity; and generally they do prove it.

The idea of, and necessity for, redeemability, is that which _most_ requires to be _divorced_ from money. Money—real money—should never require to be redeemed. It should always be just as valuable to retain possession of as anything could be into which it may be converted. Anything that requires to be redeemed in order to make it _permanently_ valuable or a representative of value is utterly unworthy the name of money, because it does not truly represent _real_ wealth. It is that currency of which there is doubt about the real wealth it pretends to represent which requires to be made redeemable before it will circulate; and _this_ fact proves _most_ conclusively that it is _not_ money in any true sense of that term: that is to say, it is not that which requires to be converted into substance.

It is readily perceivable that a national currency having continually all the nation’s wealth, accumulated and prospective, as its basis, never needs to be redeemed. This _single_ consideration is of quite sufficient importance to _alone_ warrant its immediate adoption and use upon the standard of wealth. The gold standard is the flimsiest deception of which it is possible to imagine. The people’s talk of approaching a gold standard as the ultimate of appreciation is the _merest jeu d’esprit_. Gold is now selling at say 113. Suppose that during the next year its price should gradually decline to par, or, in the phraseology of the goldites, their country’s general credit should appreciate to par, would the process of appreciation _necessarily_ stop just at _that_ point? Why should it not just as reasonably _continue_ to appreciate, so that in another year gold would be below the par of the country’s credit? This simple analysis proves beyond _all_ cavil the arbitrariness of the gold standard of value.

The credit of a country increases or diminishes without _any_ regard whatever to its gold producing or paying capacity. It is governed by its capacity for the _general_ production of _all_ kinds of wealth over and above its average consumption. It is just the same with a country as it is with an individual; the individual, to become wealthy and to have a good credit, must not necessarily ever have _any_ gold; but he must be able to produce or acquire more than he consumes by his general expenses. A country must proceed by the same process to become wealthy, and it is simply an _absurdity_ for people to talk of the _prosperity_ of the country when _high prices_ for _everything_ are induced and fostered by a system which restricts _general_ production in order that _special_ production may flourish. Individuals cannot get rich by trading among themselves, _no matter if they increase the price_ of their _wares ten per cent. every year_. Neither can all the individuals of a country do the same thing. What is required by both is increase in the quantity of what they trade in.

It is not the price of what a people _have_ that constitutes their true wealth, but it is the _quantity_ of their commodities. A barrel of flour is possessed of no more real value if it cost twenty dollars instead of five. It will not maintain life a day longer, let the price even be a thousand dollars. Thus we arrive at the real basis of values—the real wealth—and I have introduced this, precisely for the purpose of showing the high-priced protectionists that they know nothing about _true_ values or _true_ economy, as well as to also show that there is _no_ real wealth except that which conduces to higher ends than its simple acquisition. Wealth as an end is despotism. Wealth as a means is humanitarianism.

But to return from this departure to the main subject. For the idea of redeemability for money there should be substituted that of convertibility. A real money should at _all times_ be capable of being converted into _that_ of which it stands _representative_. And here we arrive at the last analysis of a real money. It will be readily seen how completely a national currency meets this requirement. It would be representative of the productive capacity of the country, and could always be converted into whatever portion or kind of its products might be required; or into the products of other countries which may be acquired by the direct exchange of our own products.

What more than this can be demanded of money; or what better thing invented as money; or what more capable of inspiring and maintaining an even and legitimate confidence?

National currency being the very best possible money, because it is not only the most convenient but also the most secure, there remains _nothing_ to be done but to _continue_ to so _acquaint the people_, until they become _convinced_ of the rapaciousness of those systems by which the _large_ majority are compelled to labor _all their lives_ for the _very select few_. There is no difficulty in arriving at all the initial points necessary to determine the amount required, how it should be distributed and kept in circulation, or how its circulation should be regulated. These are all practicalities of finance.

But there is _one thing_ which has never yet received consideration, which is _absolutely necessary_ to make money meet _all_ the requirements of money, and at the same time to maintain a _fixed_ and _absolute_ value at all times and under all circumstances, which money never has had. From its lacking, have come all the various financial convulsions. And _this is_, an absolute measure of value.

Can money be measured so that the same fixedness shall attach to it that attaches to everything else with which we have to do? Money itself has always been considered a measure of value; and it is this false stoppage and foundationless position that has made possible all financial discords, irregularities and inconsistencies. Does it appear to be a strange proposition that money should be measured? Why should not a dollar be just as absolute as a dollar as a pound is as a pound; or as a foot is as a foot; or as a gallon is as a gallon? A cord of wood contains one hundred and twenty-eight solid feet, or eight cord feet. It must _always_ be _eight_ feet in length, _four_ feet in height and _four_ feet in width, or some other multiples of one hundred and twenty-eight. A cord can _never_ be any more, _never_ any less than just that measurement. And the same rule holds of everything else with which we have to do; with quantity, time, space and motion. All these have fixed and unvarying modes of measurement. But money, the lever by which all these are moved, has been left to fluctuate as it would—to be moved by every different influence, so that in _many instances_ what should have brought contentment, peace and continuous prosperity, has bequeathed the direct reverse.

It does not concern us that there are _more yards of cloth_ at one time than another, provided that _yard-sticks_ are all of the same length. But what _would_ concern us would be this: That if with increase of the _quantity_ of cloth the _length_ of the yard-sticks should increase proportionately; or with the _decrease_ of the quantity of flour the _pound_ should decrease in like proportion therewith. Now this is just what has always been true of money; its _real_ value _increases_ and _decreases_, just in proportion as those things which it professes to measure have increased or decreased in quantity. Instead of these things being exchanged or converted into something measured by as _fixed_ a _standard_ as they are, the attempt is made to measure them by _something_ which _constantly increases_ and _decreases_ in representative capacity. In other words, a dollar is not at all times one and the same thing. Sometimes it is but seventy–five cents, and sometimes a dollar and a half. That to say that seventy–five cents at one time possess the same representative power that a dollar and a half does at another time, which is in substance to say that money has no measure.

Now what is desirable and indispensable is to give money a _fixed measurement_, which shall be _just_ as absolute in its measure of the value of money as the pound is in its measure of weight, or as the yard-stick is in its measure of distance. There never is any more cloth, though there be a thousand more yard-sticks. Nor is a yard-stick ever any longer or shorter, if the quantity to be measured is increased or decreased a thousand-fold. Now just to such a fixedness must money be reduced before it will subserve its best purposes and uses, and the only way this can be done is by that method which will also remove the _only possible_ objection there can be brought against such a national currency as is proposed. This objection is that by over-issues of currency its value would or might be depreciated.

Let it be supposed that the country’s extremest need to meet the demands of the greatest amount of trade is a _billion dollars_ currency. At certain times there are greater and less demands for money, which, under our present practices, make a dollar, to-day, worth _four per cent. per annum_ interest, and to-morrow increase it to _ten per cent._ It must be remembered that we are now speaking of an _irredeemable currency_, the _representative_ of the _wealth_ of the nation: that the _government_ representing the nation has _uttered_ it, in behalf of _the people_, upon the _soundest_ and, in reality, the _only_ sure basis of value _any_ money _can have_—the productive power and capacity of the nation.

An over-issue is the only thing to be guarded against. The government must be prohibited by some _absolute law_ from resorting to the process so well known in railroad management as the “_watering process_.” And this is to be accomplished in the following manner: This currency—this money—must be made convertible into a national bond, bearing such a rate of interest while in the hands of the people as shall be determined upon as “the true measure of value”—say three or four per cent.—which experience would necessarily determine as the true point of balance; and the bond also convertible into currency at the option of the holder.

In other words, the people should demand that the Government issue one thousand million dollars in bonds, bearing three per cent. interest, payable in currency, and that it issue one thousand million dollars of circulating medium or money to be loaned to whomsoever deposits the bonds as collateral; all loans to be made at three per cent. per annum; to be for six months, with two renewals of three months each, one-half payable on each renewal. The principle underlying the time being that all credits should be settled with each year’s products.

The operation of such a system can be very easily traced. Whenever there should be so much currency in circulation that it would be worth _less_ than four per cent., the surplus would at once be invested in the four per cent. interest-bearing national bond; and when business should revive and the demand for money to transact it should make money worth _more_ than four per cent., then bonds would be converted into currency again until the equilibrium should be re-established. And whenever the demand should be such that all the money would be converted, and money still be worth more than four per cent., then the government should issue enough to produce the equilibrium.